Lightpath Technologies Inc 10-K for FY2026
Lightpath Technologies Inc (LPTH)
About this 10-K
Lightpath Technologies Inc filed this 10-K on September 11, 2026, covering the fiscal year ended June 30, 2026 (FY2026).
Headline figures
Fiscal year ended June 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $71.72M
- up 92.8% from $37.2M a year earlier
- Net loss
- $20.55M
- compared with a net loss of $14.87M a year earlier
- Diluted EPS
- -$0.38
- compared with -$0.36 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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| For the fiscal year ended | |
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| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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| For the transition period from_____ to_____ |
Commission file number
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LIGHTPATH TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
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| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No) | |
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| (Address of principal executive offices, including zip code) | (Registrant’s telephone number, including area code) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| | | The Market, LLC |
Securities registered pursuant to Section 12(g) of the Act:
Series D Participating Preferred Stock Purchase Rights
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
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 and 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.
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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “non-accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| | ☒ | Smaller reporting company | |
| Emerging growth company | |
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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 in the Exchange Act). Yes
The aggregate market value of the registrant’s voting stock held by non-affiliates (based on the closing sale price of the registrant’s Class A Common Stock on The NASDAQ Capital Market) was approximately $
As of September 8, 2026, the number of shares of the registrant’s Class A Common Stock outstanding was
Documents Incorporated By Reference
Portions of the Registrant’s definitive proxy statement for its fiscal year 2027 annual meeting of stockholders, which proxy statement will be filed no later than 120 days after the close of the Registrant’s fiscal year ended June 30, 2026, are hereby incorporated by reference in Part III of this Annual Report on Form 10-K.
Form 10-K
Table of Contents
CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS
Certain statements and information in this Annual Report on Form 10-K may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements concerning plans, opinions, expectations, beliefs, objectives, assumptions or projections regarding future events or future results and underlying assumptions and other statements, which are not statements of historical facts. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” or other comparable terminology. These forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions, including those described in the “Risk Factors”. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Annual Report on Form 10-K may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Important factors that may materially affect the forward-looking statements include the risk factors summarized below.
The factors identified below are believed to be important factors, but not necessarily all of the important factors, that could cause actual results to differ materially from those expressed in any forward-looking statement made by us. Other factors not discussed herein could also have a material adverse effect on us. You should not rely upon forward-looking statements as predictions of future events. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. Forward-looking statements represent management’s beliefs and assumptions only as of the date of this Annual Report on Form 10-K. You should read this Annual Report on Form 10-K completely and with the understanding that our actual future results may be materially different from what we expect.
The following is a list of factors, among others, that could cause actual results to differ materially from those contemplated by the forward-looking statements: the likelihood that we will need additional capital to sustain our operations in the future and to repay indebtedness; our ability to become and maintain profitability; our reliance on a few key customers; our reliance on a limited number of suppliers for key materials; the impact that international tariffs may have on our business and results of operations; the impact of political and other risks as a result of our sales to international customers and/or our sourcing of materials from international suppliers; our ability to protect and maintain our intellectual property.
As a result of the foregoing, no assurance can be given as to future financial condition, cash flows or results of operations. Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
General
Our Company
LightPath Technologies, Inc. (“LightPath”, the “Company”, “we”, “our”, or “us”) was incorporated under Delaware law in 1992 as the successor to LightPath Technologies Limited Partnership, a New Mexico limited partnership formed in 1989, and its predecessor, Integrated Solar Technologies Corporation, a New Mexico corporation formed in 1985. Today, LightPath is a global company with facilities in the United States and the Republic of Latvia. Our corporate headquarters is located in Orlando, Florida.
Historically, we operated with a focus on optical component manufacturing, and specifically on our leadership position as a precision molded lens manufacturer for visual light applications. We expanded our addressable market with the acquisition of ISP (as defined below), a manufacturer of infrared optical components, in December 2016. Since 2020, our strategy has been to move up the value chain by producing optical assemblies, modules and simple cameras. Through acquisitions, we have continued to enhance our abilities on cameras and sensors and speed our movement up the value chain in line with our strategy of value-add infrared systems.
Subsidiaries
ISP and ISP Latvia
In December 2016, we acquired ISP Optics Corporation, a New York corporation (“ISP”), and its wholly-owned subsidiary, ISP Optics Latvia, SIA, a limited liability company founded in 1998 under the Laws of the Republic of Latvia (“ISP Latvia”). ISP is a vertically integrated manufacturer offering a full range of infrared products from custom infrared optical elements to catalog and high-performance lens assemblies. ISP’s manufacturing operation is located at our corporate headquarters facility in Orlando, Florida (the “Orlando Facility”). ISP Latvia is a manufacturer of high precision optics and offers a full range of infrared products, including catalog and custom infrared optics. ISP Latvia’s manufacturing facility is located in Riga, Latvia (the “Riga Facility”).
Visimid
In July 2023, we acquired Liebert Consulting, LLC, dba Visimid Technologies (“Visimid”), an engineering and design firm, specializing in thermal imaging, night vision and internet of things (“IOT”) applications. Visimid provides design and consulting services for U.S. Department of Defense (“DoD”) contractors, commercial and industrial customers, and original equipment manufacturers (“OEMs”) for original new products. Visimid’s core competency is developing and producing custom thermal and night vision cores. Visimid’s facility is located in Plano, Texas.
G5 Infrared
In February 2025, we acquired G5 Infrared LLC (“G5 Infrared”), a New Hampshire limited liability company. G5 Infrared is a leading vertically-integrated manufacturer of high-performance infrared camera systems and imaging solutions, specializing in advanced thermal imaging technology and long-range mission-critical detection solutions. G5 Infrared’s existing revenue and future growth pipeline are driven by established multi-year contracts and multiple defense programs of record in shipboard long-range surveillance, border security, and counter unmanned aerial systems (“C-UAS”) systems, as well as recurring federal, naval, and law enforcement programs. Additionally, G5 Infrared is an industry-leading provider of cutting-edge advanced infrared coatings, including for materials such as LightPath’s BlackDiamondTM (“BlackDiamond”) glass. G5 Infrared operates from a state-of-the-art manufacturing facility in Hudson, New Hampshire. We believe that this acquisition strengthens LightPath’s position as a leader in infrared imaging by expanding the Company’s portfolio to include cooled infrared cameras. The combination of LightPath and G5 Infrared creates a more robust, vertically-integrated solutions provider.
Amorphous Materials
In January 2026, we acquired the assets of Amorphous Materials, Inc. through our newly-formed, wholly-owned subsidiary, Amorphous Materials, LLC, a Delaware limited liability company (“AML”). AML specializes in infrared glass fabrication, and operates from a manufacturing facility in Garland, Texas. We believe that this acquisition further strengthens LightPath's position as a leader in infrared imaging by expanding our materials portfolio and glass fabrication capabilities.
LPOIZ
In February 2023, we combined the operations of our two wholly owned China subsidiaries, LightPath Optical Instrumentation (Shanghai) Co., Ltd (“LPOI”) and LightPath Optical Instrumentation (Zhenjiang) Co., Ltd. (“LPOIZ”), with LPOIZ as the surviving company. LPOIZ’s manufacturing facility (the “Zhenjiang Facility”) provided a lower cost structure for production of larger volumes of optical components and assemblies. In July 2026, we announced that we had entered into a definitive agreement to sell and transfer 100% of our equity interest in LPOIZ, including the Zhenjiang Facility and its operations in China, to Hengtu Optical Technology Co., Ltd., which is owned by members of LPOIZ's incumbent management team. The transaction is expected to close in September 2026. As a condition to the sale, LPOIZ agreed to continue to supply products to LightPath as a third-party vendor.
Industry
We and our customers support a wide range of industries, including defense, public safety, industrial, commercial, telecom, medical and more. A commonality among these industries is the use of photonics as an enabling technology in their products.
Over the last ten years we have witnessed a pivotal shift in the adoption of infrared photonics in new applications. In the early days of the technology it was a specialty application, developed by and between optical engineers and required highly specialized technical knowledge. As applications have increased and costs have decreased, adaptation and knowledge has shifted from the customer to the supplier (LightPath). This is true for industrial and commercial applications and especially true in defense applications which is where we have seen the most growth in the past few years and into the future.
The accelerated rate of adoption and highly diversified industries and applications utilizing an expanding array of photonics technologies brought a change in both the needs of the customers and the supply chain, to support those needs. In the past, we and other component suppliers mostly served customers that specialized in photonics. The large OEMs focused on component companies as a significant supply source for optical parts and minor fabrication and assemblies. OEMs typically produced their own designs and relied on their suppliers to fulfill their needs without any strategic product planning, investment or collaboration. This supply chain was fragmented and consisted of a large number of small companies, many of which had particular specialties in the fabrication process. Often times these types of activities are referred to as build-to-print, as the OEM customer would design the lens down to the final manufacturing prints and the vendor would focus on producing according to those prints.
As the industry has evolved, and sensory, visualization, and imaging capabilities have become differentiators among suppliers, there are an increasing number of customers in a myriad of industries with specialized requirements for an expanding array of products that need to be addressed. As photonics technology continues to develop, leading to broader adaptation and application across more industries, and with customers now possessing expertise in different technologies, customers’ supply chain needs have evolved. In our case, the change has created opportunities to now serve OEM customers for which photonics is only one of several technologies they embed into their products. While in the past our typical customer viewed optics as their specialty and hence they designed all aspects of their systems and outsourced only the component fabrication, this is not the case with our newer customers. Many of our current and potential customers do not wish or do not have the capability to design and build the optical portion of their products in-house. As such, the fragmented supply chain that existed in our industry in order to serve customers on the component level, is not relevant for customers that view optics as only a part of their system, and not a core capability or function. For these customers, LightPath is well positioned to become their solutions partner for their optics needs. By tapping into the domain knowledge and design, assembly and testing capabilities of solutions providers like LightPath, the customer can avoid making the large investment needed for them to develop those capabilities in-house. We refer to this ecosystem as “optical engineered solutions,” and believe we are positioned to serve as a single source, global provider of optical solutions with leading engineering and manufacturing capabilities. This has led to our development of a new strategy and organizational alignment which is further discussed below.
Growth Strategy
Since our Chief Executive Officer, Mr. Sam Rubin, joined the Company in 2020, we have been developing a new strategy that will transition the Company from a pure component manufacturer to a supplier of imaging subsystems and systems. Our strategic direction, which is based on our core technological differentiators such as our BlackDiamond glass and proprietary molding technologies, significantly increases our value add to customers. Management believes this transition, which is occurring both organically and through acquisitions, such as the July 2023 acquisition of Visimid, the February 2025 acquisition of G5 Infrared and the January 2026 acquisition of AML, will position the Company for significant growth and higher profitability in coming years. These acquisitions have also added to our technological differentiators.
Understanding the shifts that are happening in the marketplace and the changes that come when a technology, like photonics, moves from being a specialty to being integrated into mainstream industries and applications, we redefined our strategic direction to provide our wide customer base with domain expertise in optics, and became their partner for the optical engine of their systems. In our view, as the use of photonics evolves, so do customer needs. The industry is transforming from a fragmented industry with a component oriented supply chain, into a solution-focused industry with the potential for partnerships for solution development and production. Over the last couple of years we have worked to align our organization to this strategy, and leverage our in-house domain expertise in photonics, knowledge and experience in advanced optical technologies, and the necessary manufacturing techniques and capabilities. We have been developing these partnerships by working closely with our customers throughout their design process, designing optical solutions that are tailored to their needs, often times using unique technologies that we own, and supplying the customer with a complete optical subsystem to be integrated into their product. Such an approach builds on our unique, value-added technologies that we currently own, such as infrared materials, optical molding, fabrication, system design, and proprietary manufacturing technologies, along with technologies that we acquired through the Visimid acquisition, such as video processing, and technologies from the G5 Infrared acquisition, such as long range imaging using cooled midwave cameras. The acquisition of AML further expanded our portfolio of infrared materials. Continually adding differentiating technologies is key to our strategy and we expect to continue to do so both organically and through acquisitions.
Examples of this strategic approach can be found in many of our recent new product lines. We refer to these as LightPath 2.0 and 3.0, as that symbolizes the evolution of the Company. LightPath 2.0 refers to our assemblies and LightPath 3.0 refers to our cameras and related subsystems and systems. Like any company, a successful implementation of a strategy depends heavily on differentiators. In our case, those differentiators mostly tend to be technologies and capabilities. Over the last few years we have worked to, and will continue to work to, add and evolve our differentiators. Some of our differentiators currently include our unique BlackDiamond materials, optical system design capabilities, glass molding technology, processing of thermal images, and long range imaging technologies. Examples of how those differentiators translate into revenue include our multispectral Mantis camera, our missile program with Lockheed Martin, our long range cameras for border patrol and C-UAS applications, and a number of other system and subsystem level products and programs that are enabled by these technologies. We continue to re-design products, including G5 Infrared cameras, to eliminate Germanium from the bill of materials, leveraging the advantages of our BlackDiamond materials as alternative to Germanium.
The shift in strategy and product offerings also shifts the price range of our product portfolio and indirectly drives growth in and of itself. Historically, as a pure component Company, the average selling prices (“ASPs”) of those products were measured in single dollars or tens of dollars, whereas with the development of our assemblies product line (i.e. LightPath 2.0), ASPs for those products are measured in hundreds of dollars. When we added cameras, subsystems and systems (LightPath 3.0), ASPs for those products are measured in tens of thousands, and sometimes hundreds of thousands of dollars.
Organizational Alignment
Along with the development of a new strategic direction, we are focused on the execution of a complementary strategic plan. To execute our new strategic plan, we also need, among other things, a strong manufacturing and technical organization that provides the domain expertise in photonics from the design of an optical engineered solution tailored for the customer’s needs through the manufacturing, assembly and testing of such a sub-system. Given the fast pace of advancements in photonics technologies, achieving a sustainable advantage will also depend on having unique capabilities and technologies that allow our team to design and deliver the tailored solutions demanded by customers.
LightPath today is very different than what we were five years ago, and LightPath five years from now will be very different than what we are today. An evolving organization also needs an evolving structure that is aligned with its strategy, growth and all other related changes. Additionally, we have used mergers and acquisitions as a tool to acquire technologies, teams and products, and expect to continue to do so with future acquisitions. Success of an acquisition happens not only because of a good plan, but more importantly because of a successful implementation of the plan and cultural alignment. This too leads to an ever-evolving organization and dynamic alignment of such organization.
In the first few years of our transformation our focus was on alignment of the core LightPath organization. Developing the appropriate engineering disciplines and aligning manufacturing capacity and capabilities globally, including the sunsetting of old product lines, among other changes. Once this was in place, we turned our focus to developing our differentiators. Starting from licensing from NRL, developing new BlackDiamond glasses through our first camera products in the form of Mantis, our multispectral camera, and more. Upon acquiring Visimid, we aligned the organization around the capabilities and products Visimid brought.
Acquiring G5 Infrared in February 2025 brought both new capabilities and products in the form of their long range cooled infrared cameras, and added capacity in the form of optical coating services. G5 Infrared’s operational integration with LightPath commenced soon after the acquisition. The complementary nature of the LightPath materials and optics capabilities and G5 Infrared’s system level camera quickly led the teams to start working together resulting in new products that have been announced already (such as the Germanium-free cameras) or that are in development.
The acquisition of AML in January 2026 further expanded our infrared materials portfolio and expanded our infrared glass manufacturing capabilities.
Today, the different teams across LightPath work well together and leverage each other’s capabilities in design and manufacturing. As we continue to evolve, both organically and through acquisitions, we plan to regularly review our array of capabilities and resources across the entire organization, and continuously align the organization to make best use of those.
In the longer term, we have identified capabilities and technologies that could be important differentiators, including, for example, optical detectors and active optical components such as lasers, motion systems, and more. The aggregation of such unique technologies is intended to allow us to differentiate our optical solutions and provide customers with products that are tailored exactly to their needs.
Technologies
We believe that to be the preferred partner to fulfill the photonics needs of our customers, domain expertise and differentiating technologies in photonics are key elements. Optics and photonics require multidisciplinary skills, including physics, mechanical engineering, material sciences, electrical engineering, and chemistry, among others. This is part of what makes using photonics so complicated, and at the same time part of what we see as the opportunity. Knowing what can and cannot be produced, designing the architecture and detailed design of the optical system, including electrical and mechanical interfaces, choosing and executing advanced manufacturing technologies, and delivering both the engineering prototypes that are needed, as well as producing a high volume of goods for the long-term, are all part of the domain expertise required. Additionally, to design the best solution for a customer, we not only need to know what can be produced and how to design it, we also must have unique capabilities that differentiate our solutions. Such technologies allow us to develop solutions and sub systems that outperform other solutions in size, weight, power, and cost.
Along those lines, we continue to focus on developing, acquiring and licensing new, innovative capabilities and technologies in all of our engineering and manufacturing groups, including systems design and testing, optical fabrication of components, material production, optical coatings, and electro mechanical design and production such as the following:
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Infrared Imaging Technologies. Our optical solutions strategy focuses around infrared imaging. Infrared imaging is a growing market, with technology that is evolving at a fast rate, and in which we have distinct advantages, based on our core technologies. Continually evolving and developing our technologies is key to maintaining and continuing to build and develop technical leadership, which translates to better products, which translate to creating value, and capturing value. While the basis of our infrared technology originally centered around infrared materials and optics, it has become more than that. As we evolve from a pure optics company to an integrator and solution provider, our differentiating technologies are evolving. Those differentiating technologies are often at a system or application level, rather than at the component or material level. Some of those technologies are gained through acquisitions, such as Visimid, and most recently G5 Infrared, which added advanced cooled, long-range infrared camera systems to our portfolio. G5 Infrared’s expertise in system integration, image stabilization, and ruggedized, defense-qualified platforms significantly expands our capabilities beyond uncooled solutions and imaging systems, positioning us as one of the few companies capable of addressing the full spectrum of infrared imaging applications, from compact commercial cameras to long-range defense and border security systems. |
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| A key differentiator of our infrared imaging portfolio is the integration of our proprietary BlackDiamond materials into camera designs. Unlike Germanium, which is subject to severe supply chain constraints and geopolitical risks, BlackDiamond materials are U.S.-produced and globally sourced, offering secure supply and unique technical benefits such as multispectral performance and low thermo-optic coefficients. In 2025, we announced the redesign of several G5 Infrared cooled cameras, where Germanium lenses were replaced with lenses made from BlackDiamond materials. This shift not only mitigates supply chain risk for Germanium but also improves system performance, lowers thermal sensitivity, and reduces cost. Other recent examples of such system-level capabilities include our development of a novel, unique approach to shutterless imaging that we can apply to microbolometer based cameras, and development of a technology for early detection of flames and fires using a combination of optical technologies and sophisticated image processing algorithms. |
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Optical Assemblies and Testing. When we began shifting our focus from optical components to solutions, doing more optical assemblies was a natural first step for us. During the first couple of years of implementing our new strategic direction, our team expanded our optical assemblies business and capabilities considerably. As our reputation in the assemblies space grew, so did the level of complexity of assemblies and sub-systems customers request of us. This trend was recently amplified when we began making available our new, exclusive infrared glass materials, which enable customers to design systems that far exceed the performance of existing systems using conventional materials. |
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| BlackDiamond materials provide a unique advantage in our assemblies. Because these glasses are designed, produced, and integrated within LightPath, we can deliver assemblies with unmatched speed and flexibility, ensuring shorter lead times for our customers. Moreover, our ability to build assemblies that are not based on Germanium optics gives us a differentiated position in the defense and security markets, where supply chain risk and strategic sourcing are increasingly critical factors. These assemblies not only reduce reliance on foreign-controlled materials but also offer superior optical performance in multispectral and athermalized designs.
Often, the new systems requested by customers require us to develop new assembly and testing capabilities. Each such new capability and technique we develop for such projects become another capability and technique we can market and offer to other customers. We expect this will create self-perpetuating development opportunities as our new capabilities and techniques bring in more business that may, again, require continuing development of new techniques. |
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Materials. Materials play an important role in providing design flexibility and allow tradeoffs between optical performance, weight, and performance in varying conditions. Additionally, the infrared imaging industry has traditionally relied heavily on the use of Germanium and Gallium (in the form of GaAs glass), which China dominates the supply of both materials and has been restricting its export. Traditionally, infrared applications have only a small number of materials, almost all of which are crystal based, with Germanium being the most commonly used material. Over the last few years LightPath has been investing in developing and commercializing our BlackDiamond glasses (which are labeled with a “BD” prefix) as alternatives to using Germanium. Some of these materials such as BD6 and BD2, are generic, and are produced by at least two other companies. The crown jewels of our materials, the BDNL type, are exclusive to us, and the most impactful to our products and to the market as a whole in terms of technology, innovation and value creation. In December 2021 we secured an exclusive license from the U.S. government for the Chalcogenide materials that have been developed by the NRL. Following a two-year effort to transition those new materials into production, we began making available for commercial use some of those new materials, starting with the introduction of BDNL-4 in April 2024. Our BlackDiamond materials offer multiple advantages over materials, such as Germanium. It is estimated that over 60% of the global Germanium supply originates from China, with Russia historically being the second largest supplier, until the trade restrictions related to the Ukraine war. Restrictions on supply from Russia and China have increased prices of Germanium from around $1,000 per Kg a few years ago, to a price of over $6,000 per Kg today. Additionally, supply of Germanium has considerably shrunk and for most customers and applications is not available at all. |
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| Our BlackDiamond materials, which are made in the USA and produced from raw ingredients available from many countries all over the globe, offer an alternative to the use of Germanium in infrared systems. Knowing that our materials are produced domestically and have a secure supply chain has been driving sales growth in our business and in particular in the defense sector. In addition to providing an alternative to the use of Germanium, the new materials we licensed exclusively from the NRL have unique technical advantages compared to traditional materials, including multispectral performance and low thermo-optic coefficients, making them less affected by changes in environmental temperature. The combination of providing an alternative to the use of Germanium and Gallium, together with distinct technological advantages, make these materials which we own exclusively, a very desirable and key element in every future infrared system.
As described above in Growth Strategy, we leverage these unique advantages to become not only the supplier of choice for materials and optics, but also to be producer of the subsystems and complete imaging solutions, a much larger part of the system than we previously had as a component manufacturer. The importance of those materials, both from a supply chain resilience perspective as well as from a technology leadership perspective has led to some significant collaborations and efforts together with various governmental groups, and in particular with the U.S. DoD. As announced on several separate occasions, LightPath has received funded development contracts from the U.S. DoD, the Defense Logistics Agency, the European Space Agency, and the U.S. Army, among others. Those fundings are all aimed at accelerating the qualification of the materials for use in their respective applications. We continue to develop those technical capabilities and materials, both using internal funding and federal funding. We expect infrared materials to continue to be an important technology in our portfolio. |
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High precision molded lenses. Historically, precision molding of lenses is the key technology we have built upon. Precision molding of optics is a unique technology that is well suited for both high volume production of optical components, as well as production of optics with unique shapes, which otherwise would require a very lengthy and complex process to individually polish each lens to shape. Precision molded optics (“PMOs”) is a technology in which we continuously invest to pursue advancements in what materials can be molded and the shapes and sizes of the optics we can mold. Although there are several other competitors that can mold optical elements, we have an established leadership position in this area as the original developer of the technology, and we believe we are the preferred vendor for the most complex, high-end projects of many of our customers. Some recent advancements we have made in precision molded optics include molding of non-symmetric shapes such as freeform optical components, and qualifying new materials for availability as moldable materials. |
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Traditional polishing and diamond turned optics. Our capabilities include a wide range of traditional fabrication processes. These include CNC (computer numerical control) grinding and polishing of optical elements, traditional grinding and polishing of lenses, and diamond turning of infrared materials. |
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Optical coatings. Thin film coatings are designed to reduce losses and protect the optical material, which are a key part of any optical system. Through our recent investments, we have the ability to coat lenses in all of our facilities, providing efficient, high quality antireflective coatings, as well as reflective and protective coatings. Our coating facilities employ both physical vapor deposition techniques as well as chemical vapor deposition techniques. In addition to our library of dozens of standard coatings, our coating engineers often design coatings specific for an application, optimizing the performance of the system for a specific customer use. One of our most known advanced coatings is Diamond Like Carbon, which provides materials such as chalcogenide glass significant environmental protection. This coating is currently available only at a small number of vendors, and is an example of a capability that we believe gives us a competitive advantage by allowing us to design better optical solutions. |
New Product Development
Consistent with our strategic plan, we have focused our development efforts in recent years on products, technologies and capabilities that allow us to provide better solutions using the most optimal technology for each customer and with alignment to customer product lifecycle. As much of our current and future growth is centered around thermal imaging, naturally our new product efforts are too. In fiscal year 2026, that included both enabling technologies such as our BlackDiamond glasses, as well as assemblies and cameras.
Our BlackDiamond glasses are an important enabling technology to much of our assemblies and camera systems. Besides offering an alternative to using Germanium as a lens material, optics made from our various BlackDiamond materials offer unique properties that can be very useful in system design. For example, some BlackDiamond materials have a negative, or even zero thermo-optic coefficient, making them very useful when designing a system that needs to operate across a wide range of temperatures. Other materials feature low dispersion, making them very useful for systems that need to work across a wide range of wavelengths.
We leverage those characteristics to develop advanced optical systems and cameras that we can offer as standard, or custom systems to our customers. Some of those systems are multispectral, meaning they operate in more than one part of the spectrum simultaneously. Mantis is an uncooled camera that images in both midwave and longwave parts of the spectrum, a capability made possible with the use of one of our BDNL materials. We also have been developing other multispectral assemblies such as ones that image in both the shortwave and midwave portion of the spectrum. We intend to continue to develop our multispectral portfolio, as we have a significant advantage in that area, and the detector technology is evolving, making multispectral imaging a possibility that did not exist easily before.
We also use BlackDiamond in some of our camera systems. In August 2025 we announced completing the redesign of two cooled midwave cameras made by G5 infrared, which we acquired in February of that year. Eliminating Germanium from those cameras was made possible by using a BlackDiamond glass as an alternative material. To the best of our knowledge, we are the first to offer a midwave uncooled camera that does not require any Germanium lenses. That too is an advantage we plan to continue to leverage.
Lastly, we have new product development ongoing in other imaging technologies, such as a shutterless operation of uncooled thermal cameras, image stabilization software and more.
We incurred expenditures for new product development of approximately $3.8 million and $3.1 million during fiscal years 2026 and 2025, respectively.
In some cases, our product and technology development is supported through billing of engineering services, such as non-recurring engineering (“NRE”) fees. In other cases, we receive external funding, such as our previously announced funding from Space Florida’s Space Foundation and Israel’s Ministry of Science, and the U.S. DoD (via the Defense Logistics Agency). Our efforts are self-funded in all other cases.
As part of our product development and research and development efforts, we have numerous employees with engineering and related advanced degrees located in our facilities in the U.S. and Latvia. Our facilities in Orlando, Florida, Plano, Texas, and Hudson, New Hampshire are located in or near industrial technology campuses with substantial access to optical industry constituencies, including a major university. This enables us and our staff to remain on the cutting edge of industry design trends and to enter into collaborative engagements.
Product Groups and Markets
Overview
We categorize our products into four product groups: (i) infrared components, (ii) visible components, (iii) assemblies and modules, and (iv) engineering services. G5 Infrared’s revenue is generally derived from infrared components (including coating services) and assemblies and modules.
Infrared Components Product Group. Our infrared product group is comprised of both molded and turned infrared lenses using a variety of infrared glass materials. This product group also includes revenue from sales of our BlackDiamond glass materials, AML's infrared glass materials, and G5 Infrared’s coating services. This product group includes both molded, conventional and CNC ground and polished lenses. Advances in chalcogenide materials have enabled compression molding for mid-wave (“MWIR”) and long-wave (“LWIR”) optics in a process similar to precision molded lenses. Our molded infrared optics technology enables high performance, cost-effective infrared aspheric lenses that do not rely on traditional diamond turning or lengthy polishing methods. Utilizing precision molded aspheric optics significantly reduces the number of lenses required for typical thermal imaging systems and the cost to manufacture these lenses. Molding is an excellent alternative to traditional lens processing methods particularly where volume and repeatability is required.
We offer Germanium, silicon or zinc selenide aspheres and spherical lenses, which are manufactured by diamond turning. This manufacturing technique allows us to offer larger lens sizes and the ability to use other optical materials that cannot be effectively molded. Our numerous manufacturing capabilities allow us to meet complex optical challenges that demand more exotic optical substrate materials that are non-moldable, as well as larger size optics.
We also manufacture chalcogenide glass from which we produce infrared lenses. We developed this glass and melt it internally to produce our BlackDiamond glass, which has been trademarked, and is marketed as BD6. Historically, the majority of our thermal imaging products have been germanium-based, which is subject to market pricing and availability. BD6 offers a lower-cost alternative to germanium, which is beneficial to the cost structure of some of our current infrared products and we expect it will allow us to continue to expand our product offerings in response to the markets’ increasing requirement for low-cost infrared optics applications. During fiscal year 2024, we also formally announced availability of BDNL-4, the first of our new materials licensed from the NRL. BDNL-4 is unique because it has a negative thermo-optic coefficient, an attribute that is key in a-thermalization of optical systems.
We have the capability to manufacture lenses from very small (with diameters of sub-millimeter) to over 300 millimeters, and with focal lengths from approximately 0.4 millimeters to over 2000 millimeters, utilizing our various manufacturing methods. In addition, we offer both catalog and custom designed infrared optics.
Overall, we anticipate moderate growth for our infrared components, particularly as our germanium alternatives continue to be adopted into new applications and designs. This product group also supports our assemblies and modules product group.
Visible Components Product Group. Aspheric lenses are known for their optimal performance. Aspheric lenses simplify and shrink optical systems by replacing several conventional lenses. However, aspheric lenses can be difficult and costly to machine. Our glass molding technology enables the production of both low and high volumes of aspheric optics, while still maintaining the highest quality at an affordable price. Molding is the most consistent and economical way to produce aspheres and we have perfected this method to offer the most precise molded aspheric lenses available.
Assemblies and Modules Product Group. Our assemblies and modules product group is comprised of both optical assemblies such as lens systems, and cameras, both in the form of camera modules and complete camera systems. Historically this product group also included optical fiber collimators and some visible lens assemblies, however those are now a very small part of our activity, making infrared cameras and assemblies the most dominant part of this group. Today, the majority of the revenue of this group is derived from cameras made in our Texas facility (uncooled camera systems and modules), cameras made in our New Hampshire facility (cooled cameras for long range surveillance and detection), and optical assemblies such as standard off the shelf lens assemblies, and custom lens assemblies. The latter are produced mainly in Orlando.
Engineering Services Product Group. We develop products pursuant to development agreements that we enter into with customers. Typically, customers approach us and request that we develop new products or applications utilizing our existing products to fit their particular needs or specifications. The purpose of those engineering services that we offer is not only to provide purely engineering services for a customer, but also to engineer new products which we later manufacture for the customer. The timing and extent of any such product development requests are unpredictable and outside of our control.
Sales and Marketing
Marketing. Because we offer raw optical materials, semi-finished components and finished assemblies, modules and cameras, we sell to customers positioned at different levels of the supply chain, and our marketing must address several distinct buying groups. In some cases we sell materials, optical components and assemblies to the same customer through separate programs and separate technical contacts. Our customers are principally defense prime contractors and system integrators that incorporate our materials, optical components, assemblies and cameras into their own systems, together with government agencies, industrial and laser equipment OEMs, industrial inspection and measurement equipment manufacturers, medical instrumentation manufacturers and research institutions. We sell primarily to integrators rather than to end users. Our marketing activities include digital advertising, our website, social media, direct marketing, and technical content directed to design engineers and program technical staff. As a greater portion of our revenue has come from customized solutions supplied to integrators rather than from standard catalog components, our marketing has placed less emphasis on individual component specifications and more on application requirements, system-level performance and end-user outcomes.
Sales Model and Structure. Our commercial organization comprises a sales function led by our Senior Vice President of Sales and a business development function, supported by product management and technical project management. The sales function is responsible for customer relationships, contract vehicles and channel partners. The business development function is responsible for identifying and qualifying new programs, and includes solutions architecture resources that work with customers on system requirements before a product is specified. Technical project management coordinates customer requirements with our engineering and manufacturing capacity and supports the development efforts through which we extend our portfolio of capabilities. Product management is part of our go-to-market organization and supports the positioning and growth of our infrared imaging portfolio.
Sales Team and Channel. We sell through a direct sales organization covering North America and Europe, supported by sales representatives in certain international territories and by distributors, through which we serve customers in Asia and other regions. Our products reach customers through several channels: direct sales to defense prime contractors and system integrators, sales under government contract vehicles, and catalog and stocking distribution for standard products. Our sales engineers are assigned by account and application. Because our products are generally designed into a customer’s system, our selling process is technical and consultative, beginning with the customer’s system requirements before a product is specified, and typically involves an extended qualification cycle. We maintain our website (www.lightpath.com), social media presence, and email communications as channels for technical content and customer engagement. Information on our website is not incorporated by reference into this report.
Trade Shows. We exhibit our products, introduce new offerings and meet with customers, end users and industry participants at defense, security and photonics conferences in North America and Europe. Events in which we participate on a recurring basis include SPIE Photonics West in San Francisco, California; SPIE Optifab in Rochester, New York; the SHOT Show in Las Vegas, Nevada; the Association of the United States Army (AUSA) Annual Meeting and Exposition in Washington, D.C.; SOF Week in Tampa, Florida; AUVSI Xponential; the Border Security Expo; and Homeland Security Week in National Harbor, Maryland. In Europe we participate in DSEI in London, United Kingdom, and Eurosatory in Paris, France, each of which is held biennially in alternating years. In September 2026 we participated for the first time in MSPO in Kielce, Poland, the largest defense exhibition in Central and Eastern Europe. We exhibit at certain of these events. At others we participate without an exhibit, meeting with customers, prime contractors and government program offices on the exhibit floor and attending technical and program briefings. The composition of the events in which we participate is weighted toward defense and security end markets, consistent with the composition of our revenue. Our participation supports brand awareness, business development relationships, and insight into customer requirements and technology trends in our target markets.
Competition
We are vertically integrated, with offerings ranging from raw optical materials to semi-finished components and finished assemblies, modules and cameras. We therefore compete at multiple levels of the optics supply chain, and our competitors vary by product group, end market and geography. In some cases, we are both a supplier to and a competitor of the same company — a customer that purchases optical components or materials from us may also produce infrared cameras that compete with ours. This is common in the defense industry, where companies routinely supply one another with materials, components and subsystems. As we broaden our product offerings, add services and expand into additional geographies, our competitive landscape continues to change and we encounter new competitors.
The global market for optical components and assemblies is fragmented and competitive. We compete principally on optical performance, size and weight, the ability to design or modify a product to a customer’s specific requirements, unit price, delivery lead time and the location of manufacture. Our manufacturing operations are located in the United States and Latvia. Our competitive position rests substantially on our precision molded optics technology and on our vertical integration in infrared, which allows us to control design and manufacturing from raw material through finished assembly, including in certain cases sensors and electronics. Our scale also allows us to pursue lower-volume, application-specific programs that certain larger competitors do not.
Raw material cost and availability are significant competitive factors in infrared. Germanium pricing has been volatile and supply is affected by export restrictions imposed by producing countries. Our BlackDiamond family of chalcogenide glasses is engineered to substitute for germanium in many applications, and we sell BlackDiamond materials and molded blanks both to customers and to certain competitors.
Infrared Components. We compete with suppliers of conventionally fabricated crystalline infrared optics, including single-point diamond-turned germanium, silicon and zinc selenide components, and with regional optical fabrication shops. Our molding process is intended to reduce cost at moderate volumes relative to diamond turning, though conventional fabrication remains competitive for prototype quantities and for certain apertures and geometries. In sales of BlackDiamond materials and molded blanks, we compete with germanium and with other engineered infrared glasses, as well as with crystalline materials. Because a change in optical material generally requires a customer to requalify an existing design, adoption cycles in this product group are long, and material selections tend to persist for the life of a program once qualified. Constrained germanium availability has increased customer interest in alternative infrared materials, and we believe our BlackDiamond glasses position us to serve applications previously served by germanium optics.
Visible Components. We compete with volume molders of aspheric lenses located in Asia and with the captive molding operations of larger optics manufacturers. Competition in this product group is driven substantially by unit price at volume, and we generally compete for applications in which tolerance, coating or qualification requirements exceed what commodity production supports.
Assemblies and Modules and Engineering Services. Our engineering services product group largely feeds our assemblies and modules product group, and the two share a competitive set. We encounter three types of competition in these product groups:
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Companies offering custom optical design through recurring production. Competitors in this category generally offer a narrower range of design and manufacturing capability than we do, particularly on programs requiring control of both the optical design and the manufacturing process, or requiring integration of optics with sensors and electronics. |
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Standard catalog products sold without customization, available from vendors including Ophir Optronics Solutions Ltd. (a subsidiary of MKS Instruments, Inc.), Controp Precision Technologies Ltd., Teledyne FLIR and Clear Align LLC. Customers selecting a standard product generally accept trade-offs in size, weight, detection range or power consumption relative to an assembly designed to their system requirements. Standard products compete effectively where a customer’s requirements can be met without modification, and where program schedule or volume favors an off-the-shelf solution. |
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Customer in-house engineering. Some customers, principally large defense prime contractors, design and build optical assemblies internally rather than sourcing them. Companies in this category are frequently both competitors and customers, and include Lockheed Martin Corporation, Anduril Industries, Inc., Teledyne FLIR, RTX Corporation and Elbit Systems Ltd. |
Manufacturing
Facilities. Our manufacturing is largely performed in our combined 58,500 square feet of production facilities in Orlando, Florida, G5 Infrared’s 27,000 square feet of production facilities in Hudson, New Hampshire, ISP Latvia’s 29,000 square feet of production facilities in Riga, Latvia, and LPOIZ’s 39,500 square feet of production facilities in Zhenjiang, China. As discussed in further detail above, in July 2026 we announced a definitive agreement to divest our Chinese operations, including LPOIZ's Zhenjiang Facility. We expect this transaction to close in September 2026.
Our Orlando Facility and LPOIZ’s Zhenjiang Facility feature areas for each step of the manufacturing process, including coating work areas, diamond turning, manufacturing and a clean room for precision glass molding and integrated assembly. The Orlando and Zhenjiang Facilities include new product development laboratories and space that includes development and metrology equipment. The Orlando and Zhenjiang Facilities have anti-reflective and infrared coating equipment to coat our lenses in-house. ISP Latvia’s Riga Facility includes fully vertically integrated manufacturing processes to produce high precision infrared lenses and infrared lens assemblies, CNC grinding, conventional polishing, diamond turning, assemblies, state of the art metrology, and infrared coatings. G5 Infrared’s Hudson, New Hampshire facility features the manufacturing of infrared coatings and production scale ability to assemble lenses and cameras as well as modern measuring and automation alignment tools.
We add production equipment and space at our facilities as needed. In fiscal year 2024, we completed the build out of additional Orlando Facility space, and are currently in the process of further expanding our glass fabrication capacity in this facility. In July 2025, we entered into a lease agreement for a larger manufacturing and office facility in Plano, Texas, to expand Visimid’s engineering, development and low volume sensor alignment capabilities. In addition to adding equipment or space at our manufacturing facilities, we add work shifts, as needed, to increase capacity and meet forecasted demand. We intend to monitor the capacity at our facilities, and will increase such space as needed. We believe our facilities and planned expansions are adequate to accommodate our needs over the next year.
Production and Equipment. Our Orlando Facility contains glass melting capability for BD6 chalcogenide glass, a manufacturing area for our molded glass aspheres, multiple anti-reflective and wear resistant coating chambers, diamond turning machines and accompanying metrology equipment offering full scale diamond turning lens capability, a tooling and machine shop to support new product development, commercial production requirements for our machined parts, the fabrication of proprietary precision glass molding machines and mold equipment, and a clean room for our molding and assembly workstations and related metrology equipment.
ISP Latvia’s Riga Facility consists of grinding, polishing, diamond turning, quality control, infrared coating departments and a mechanical shop to provide the departments with the necessary tooling. The grind and polish department has modern CNC equipment, lens centering and conventional equipment to perform spindle, double sided and continuous polishing operations. The diamond turning department has numerous diamond-turning machines accompanied with the latest metrology tools. The infrared coating department is equipped with multiple anti-reflective and wear resistant coating chambers. The quality control department contains numerous inspection stations with various equipment to perform optical testing of finished optics.
LPOIZ’s Zhenjiang Facility features a precision glass molding manufacturing area, clean room, machine shop, dicing area, and thin film coating chambers for anti-reflective coatings on both visible and infrared optics and related metrology equipment. As discussed in further detail above, in July 2026, we announced that we had signed a definitive agreement to divest our Chinese operations, including LPOIZ's Zhenjiang Facility, and we expect to close this transaction in September 2026.
The Orlando, Zhenjiang, and Riga Facilities are ISO 9001:2015 certified. The Hudson, New Hampshire facility is ISO9001/AS9100 certified, which is tailored for aerospace, space and defense requirements. The Zhenjiang Facility is also ISO/TS 1649:2009 automotive certified for manufacturing of optical lenses and accessories. The Orlando Facility is International Traffic in Arms Regulations (“ITAR”) compliant and registered with the U.S. Department of State; included in this registration are the Plano, Texas and Hudson, New Hampshire facilities. The Riga Facility has a DSP-5 ITAR license and Technical Assistance Agreement in place that allows this facility to manufacture items with ITAR requirements.
For more information regarding our facilities, please see Item 2. Properties in this Annual Report on Form 10-K.
Subcontractors and Strategic Alliances. We believe that low-cost manufacturing is crucial to our long-term success. In that regard, we generally use subcontractors in our production process to accomplish certain processing steps requiring specialized capabilities. For example, we presently use a number of qualified subcontractors for fabricating, polishing, and coating certain lenses, as necessary. We have taken steps to protect our proprietary methods of high-quality manufacturing by patent disclosures and internal trade secret controls.
Suppliers. We utilize a number of glass compositions in manufacturing our molded glass aspheres and lens array products. These glasses or equivalents are available from a large number of suppliers, including CDGM Glass Company Ltd., Ohara Corporation, and Sumita Optical Glass, Inc. Base optical materials, used in both infrared glass and collimator products, are manufactured and supplied by a number of optical and glass manufacturers. We utilize major infrared material suppliers located around the globe for a broad spectrum of infrared crystal and glass. The development of our manufacturing capability for BD6 glass and other germanium alternatives provides a low-cost internal source for infrared glass. We believe that a satisfactory supply of such production materials will continue to be available, at reasonable or, in some cases, increased prices, although there can be no assurance in this regard.
We also rely on local and regional vendors for component materials and services such as housings, fixtures, chemicals and inert gases, specialty ceramics, UV and AR coatings, and other specialty coatings. In addition, certain products require external processing, such as anodizing and metallization. To date, we are not dependent on any of these manufacturers and have found a suitable number of qualified vendors and suppliers for these materials and services.
We currently purchase a few key materials from single or limited sources. We believe that a satisfactory supply of production materials will continue to be available at competitive prices, although we are experiencing inflationary pricing pressure in the short term, however there can be no assurances in this regard.
Intellectual Property
Our policy is to protect our technology by, among other things, trade secret protection, patents, trademarks, and copyrights. We primarily rely upon trade secrets and unpatented proprietary know-how to protect certain process inventions, lens designs, and innovations. We have taken reasonable security measures to protect our trade secrets and proprietary know-how.
We are pursuing patents for new products that provide new features, capabilities or other advantages to our customers. We have recently received a patent directed to using an uncooled broadband camera for flame detection coupled with detection of humans or other low temperature signals within the overall imaging area and have filed a continuation-in-part application to cover additional aspects a detection in the presence of a flame. We have received a Notice of Allowance is for an optical element formed from a moldable material, with a transparent layer of a different material applied to the optical surface for use in resistive heating of the element in an infrared camera to be used to provide heating on an optic for de-icing or de-fogging. A patent application directed shutterless calibration by using pulsed infrared sources that can illuminate all pixels in the focal plane array with short pulses of light, which can then be used for non-uniformity correction, has not yet received any action.
We own several registered and unregistered service marks and trademarks (collectively, “marks”) that are used in the marketing and sale of our products. The following table sets forth our registered and unregistered marks, and denotes whether each mark is registered, the country in which the mark is filed, and the renewal date for such mark.
| Mark |
Type |
Registered |
Country |
Renewal Date |
||||
| LightPath® |
Wordmark |
Yes |
United States |
October 21, 2027 |
||||
| LightPath® |
Combination mark |
Yes |
United States |
August 27, 2030 |
||||
| GRADIUM™ |
Trademark |
Yes |
United States |
April 29, 2027 |
||||
| Circulight |
Trademark |
No |
- |
- |
||||
| BLACK DIAMOND |
Trademark |
No |
- |
- |
||||
| GelTech |
Trademark |
No |
- |
- |
||||
| Oasis |
Trademark |
No |
- |
- |
||||
| LightPath® |
Service mark |
Yes |
People’s Republic of China |
September 13, 2025 (Renewal pending) |
||||
| ISP Optics® |
Wordmark |
Yes |
United States |
August 14, 2034 |
||||
| ISP Optics® |
Combination mark |
Yes |
United States |
November 11, 2031 |
||||
| EdgeIR® |
Trademark |
Yes |
United States |
May 6, 2031 |
||||
| Mantis |
Trademark |
Yes |
Europe |
December 21, 2032 |
Environmental and Governmental Regulation
Currently, emissions and waste from our manufacturing processes are at such low levels that no special environmental permits or licenses are required. In the future, we may need to obtain special permits for disposal of increased waste by-products. The glass materials we utilize contain some toxic elements in a stabilized molecular form. However, the high temperature diffusion process results in low-level emissions of such elements in gaseous form. If production reaches a certain level, we believe that we will be able to efficiently recycle certain of our raw material waste, thereby reducing disposal levels. We believe that we are presently in compliance with all material federal, state, and local laws and regulations governing our operations and have obtained all material licenses and permits necessary for the operation of our business.
We also utilize certain chemicals, solvents, and adhesives in our manufacturing process. We believe we maintain all necessary permits and are in full compliance with all applicable regulations.
To our knowledge, there are currently no U.S. federal, state, or local regulations that restrict the manufacturing and distribution of our products. Certain end-user applications require government approval of the complete optical system, such as U.S. Food and Drug Administration approval for use in endoscopy. In these cases, we will generally be involved on a secondary level and our OEM customer will be responsible for the license and approval process.
The Dodd-Frank Wall Street Reform and Consumer Protection Act imposes disclosure requirements regarding the use of “conflict minerals” mined from the Democratic Republic of Congo and adjoining countries in products, whether or not these products are manufactured by third parties. The conflict minerals include tin, tantalum, tungsten, and gold, and their derivatives. Pursuant to these requirements, we are required to report on Form SD the procedures we employ to determine the sourcing of such minerals and metals produced from those minerals. There are costs associated with complying with these disclosure requirements, including for diligence in regards to the sources of any conflict minerals used in our products, in addition to the cost of remediation and other changes to products, processes, or sources of supply as a consequence of such verification activities. In addition, the implementation of these rules could adversely affect the sourcing, supply, and pricing of materials used in our products. We strive to only use suppliers that source from conflict-free smelters and refiners; however, in the future, we may face difficulties in gathering information regarding our suppliers and the source of any such conflict minerals.
Major Customers
In fiscal year 2026, we had sales to three customers that comprised an aggregate of approximately 37% of our annual revenue with one customer at 24% of our sales, another customer at 7% of our sales, and the third customer at 6% of our sales. In fiscal year 2025, we had sales to three customers that comprised an aggregate of approximately 23% of our annual revenue with one customer at 9% of our sales, another customer at 7% of our sales, and the third customer at 6% of our sales. The loss of any of these customers, or a significant reduction in sales to any such customer, would adversely affect our revenues and profits. However, two of the three largest customers for fiscal year 2025 are still significant customers, however they were not among the three largest for fiscal year 2026. Our customer concentration is not static, and our growth is driven by a combination of new customers and growing programs with existing customers. We continue to diversify our business in order to minimize our sales concentration risk.
In fiscal year 2026, 48% of our net revenue was derived from sales outside of the U.S., with 97% of our foreign sales derived from customers in Europe and Asia. In fiscal year 2025, 38% of our net revenue was derived from sales outside of the U.S., with 91% of our foreign sales derived from customers in Europe and Asia. However, those percentages are based on ship-to location, and one of our largest customers integrates products in Europe and ships to their customers in the U.S., so our international sales is actually less than this indicates.
Employees
Our employees are critical to providing our customers with the most innovative optics products. We employ a diverse group of people with different backgrounds, cultures, education and experience to move the Company and our strategic plan forward. As of June 30, 2026, we had 425 employees globally, including 414 full-time and 11 part-time employees, with 214 employees in the U.S., 107 employees located in Riga, Latvia, and 104 employees located in Zhenjiang, China. We have used and will continue utilizing part-time support, including interns, temporary employment agencies, and outside consultants, as required from time to time. Any employee additions or terminations over the next twelve months will be dependent upon the actual sales levels realized during the fiscal year.
Compensation and Benefits
LightPath offers competitive compensation and benefit packages designed to meet the short-term and long-term needs of our employees and their families. These benefits include but are not limited to a 401(k) Plan with company match, flexible spending and health savings accounts, short-term incentive programs, healthcare benefits, and employee assistance program.
Recruitment
Sourcing and hiring top talent is part of our success. Using different sources and partnerships to connect with talent has been crucial. LightPath uses regional, industry and internal metrics to ensure we are staying competitive in the market.
Diversity and Inclusion Initiatives
LightPath is committed to being an equal opportunity employer and strives to create an inclusive workplace that celebrates diversity of experience. As a global company, we celebrate diversity. All employment decisions are based on business need, basis of qualifications, performance and merit.
Employee Training
Employees start training on the first day of employment. Depending on their new position, initial training can take up to six months. All employees are given basic safety training for fire, hazardous materials, first aid, physical lifting, and accident prevention. As changes are made to processes and new products are introduced, training is imperative. All electronic training programs are assigned through a labor management system and completion records are maintained within the same system.
Available Information
We maintain a website with the address www.lightpath.com. We are not including the information contained on our website as part of, or incorporating it by reference into, this Form 10-K. Through our website, we make available free of charge our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and other reports and amendments to these reports that we file with or furnish to the Securities and Exchange Commission (“SEC”) in a timely manner after we provide them.
The following is a discussion of the primary factors that may affect the operations and/or financial performance of our business. Refer to the section entitled Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report on Form 10-K for an additional discussion of these and other related factors that affect our operations and/or financial performance.
Risks Related to Our Business and Financial Results
We have a history of losses. We reported net losses for several consecutive fiscal years. As of June 30, 2026, we had an accumulated deficit of approximately $251.3 million. We may incur losses in the future if we do not achieve sufficient revenue to maintain profitability, or if we continue to incur unusual costs. We expect revenue to grow by generating additional sales through promotion of our infrared products, with a focus on engineered solutions, and continued cost reduction efforts across all product groups, but we cannot guarantee such improvement or growth.
Factors which could adversely affect our future profitability, include, but are not limited to, a decline in revenue either due to lower sales unit volumes or decreasing selling prices, or both, our ability to order supplies from vendors, which, in turn, affects our ability to manufacture our products, and slow payments from our customers on accounts receivable.
Any failure to maintain profitability would have a materially adverse effect on our ability to implement our business plan, our results and operations, and our financial condition, and could cause the value of our Class A common stock to decline.
We may be affected by political and other risks as a result of our sales to international customers and/or our sourcing of materials from international suppliers. In fiscal year 2026, 48% of our net revenue was derived from sales outside of the U.S., compared to 38% in fiscal 2025, with customers in Europe and Asia accounting for 97% and 91% of our foreign sales in fiscal 2026 and 2025, respectively. However, those percentages are based on ship-to location, and one of our largest customers integrates products in Europe and ships to their customers in the U.S., so our international sales is actually less than this indicates. Our international sales will be limited, and may even decline, if we cannot establish relationships with new international distributors, maintain relationships with our existing international distributions, maintain and expand our foreign operations, expand international sales, and develop relationships with international service providers. For example, following the sale of LPOIZ and the Zhenjiang Facility, which is expected to close in September 2026, we expect to become more dependent on third-party suppliers, including LPOIZ’s new owners, for the manufacture and supply of certain materials and products. While the transaction documents contemplate an ongoing supply relationship, any disruption in the new owners' operations, changes in their business priorities, financial condition, or ability to perform under our agreements could adversely affect our supply chain, operations, and financial results. Additionally, our international sales may be adversely affected if international economies weaken. We are subject to the following risks, among others:
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greater difficulty in accounts receivable collection and longer collection periods; |
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potentially different pricing environments and longer sales cycles; |
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the impact of recessions in economies outside the U.S.; |
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the impact of high, sustained inflation; |
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unexpected changes in foreign regulatory requirements; |
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| ● |
the burdens of complying with a wide variety of foreign laws and different legal standards; |
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certification requirements; |
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reduced protection for intellectual property rights in some countries; |
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difficulties in managing the staffing of international operations, including labor unrest and current and changing regulatory environments; |
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potentially adverse tax consequences, including the complexities of foreign value-added tax systems, restrictions on the repatriation of earnings, and changes in tax rates; |
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price controls and exchange controls; |
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government embargoes or foreign trade restrictions; |
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imposition of duties and tariffs and other trade barriers; |
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| ● |
import and export controls; |
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| ● |
transportation delays and interruptions; |
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| ● |
terrorist attacks and security concerns in general; and |
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| ● |
political, social, economic instability and disruptions. |
Russia’s ongoing conflict with Ukraine may continue to disrupt our supply chain. Our business, financial condition, and results of operations could be adversely affected by continued disruption and global consequences stemming from the conflict. Although we have no direct operations in Russia or Ukraine, the broader consequences of this conflict have negatively affected, and are expected to continue to negatively affect, the global economy, including the imposition of sanctions, cyber incidents or information technology failures, supply disruptions, increases in inflation rates, increase in energy costs, changes to foreign currency exchange rates, constraints, volatility, or disruption in financial markets, the availability of raw materials, supplies, freight, and labor, and uncertainty about economic and global stability. Historically, we have sourced Germanium from suppliers located in Russia and China. At the start of the Russia\Ukraine conflict we had ceased all purchases of Germanium from vendors in Russia and instead have been purchasing Germanium from vendors in China. In July 2023 China announced its intentions to impose some export restrictions on Germanium, requiring all international customers to provide an end user statement for approval before receiving an export license. Since that announcement, supply of Germanium has been disrupted, though not completely stopped. In December 2024, China further announced an immediate export ban on Germanium, Gallium and antimony to the United States and for any dual use or military use applications. We have taken proactive steps to minimize the orders we accept for Germanium products and therefore minimize our exposure to this risk. We cannot provide any assurances that we will be able to obtain adequate supplies in the future or, if adequate supplies are available, that the timing or costs of obtaining such raw materials will be acceptable to us. Further, some of our major customers in Europe may be directly impacted by the Russian-Ukraine conflict, which could impact the amount and frequency of orders they place with us, as well as impact the timing and ability to pay for products ordered from us. Any material impacts to our customers could have a material adverse effect on our business and operating results.
We depend on single or limited source suppliers for some of the key materials or process steps in our products, making us susceptible to supply shortages, poor performance, or price fluctuations. We currently purchase several key materials (including Germanium and sensors) or have outside vendors perform process steps, such as lens coatings, used in or during the manufacture of our products from single or limited source suppliers. We may fail to obtain required materials or services in a timely manner in the future, or we could experience delays as a result of evaluating and testing the products or services of potential alternative suppliers. The economic decline in China may have adversely impacted the financial condition of certain of our suppliers, some of whom have limited financial resources. We have in the past, and may in the future, be required to provide advance payments in order to secure key materials from financially limited suppliers. Financial or other difficulties faced by these suppliers could limit the availability of key components or materials. The economic decline in China has also increased the risk of bankruptcy for suppliers with operations in China and has led to higher manufacturing costs for us and the need to identify alternate suppliers. Additionally, financial difficulties could impair our ability to recover advances made to these suppliers. Any interruption or delay in the supply of any of these materials or services, or the inability to obtain these materials or services from alternate sources at acceptable prices and within a reasonable amount of time, would impair our ability to meet scheduled product deliveries to our customers and could cause customers to cancel orders, thereby negatively affecting our business, financial condition, and results of operations.
International tariffs, including tariffs applied to goods traded between the U.S. and China, could materially and adversely affect our business and results of operations. The United States has recently enacted and proposed to enact significant new tariffs affecting certain products exported by a number of U.S. trading partners, including China. While certain tariffs have subsequently been suspended, modified or temporarily reduced, we cannot predict the results of the U.S. government’s trade negotiations or the outcome of ongoing legal challenges to specific tariff policies. The unpredictable nature of these trade policies and the potential for further escalation may increase uncertainty and volatility in our industry, which could negatively impact our financial performance
The institution of trade tariffs both globally and between the U.S. and China specifically carries the risk of negatively impacting China’s overall economic condition, which could have negative repercussions for us. Furthermore, imposition of tariffs could cause a decrease in the sales of our products to customers located in China or other customers selling to Chinese end users, which would directly impact our business. In light of these events, there continues to exist significant uncertainty about the future relationship between the U.S. and other countries with respect to such trade policies, treaties and tariffs. These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the United States. Any of these factors could depress economic activity and restrict our access to suppliers or customers and have a material adverse effect on their business, financial condition and results of operations, which in turn would negatively impact us. We have operations, customers and suppliers in the U.S., China and other countries and regularly import and export goods and services to and from those countries. An increase in tariffs could have a material impact on our costs and on the demand for our products and services.
Discussions remain ongoing in respect of certain trade restrictions and tariffs on imports, as well as retaliatory actions by affected countries, which could impose restrictions tariffs enacted in response to such actions, which could prohibit, reduce, or discourage purchases of our products by foreign customers, leading to increased costs of products that contain our components, increased costs of manufacturing our products, and higher prices of our products in foreign markets. Changes in, and responses to, U.S. trade policy could reduce the competitiveness of our products and cause our sales and revenues to drop, which could materially and adversely impact our business and results of operations.
We utilize a number of strategies to mitigate the current and, hopefully, future impact of tariffs. However, given the uncertainty regarding the current tariffs, as well as the potential for additional trade actions by the U.S. or other countries in the future, any future impact on our operations and financial results is uncertain and these impacts could be more significant than those we have experienced in the past. Further, we can provide no assurance that the strategies we implemented to mitigate the impact of such tariffs or other trade actions will continue to be successful. To the extent that our supply chain, costs, sales, or profitability are negatively affected by the tariffs or other trade actions, our business, financial condition, and results of operations may be materially adversely affected.
We are exposed to fluctuations in currency exchange rates that could negatively impact our financial results and cash flows. We execute all foreign sales from our U.S.-based facilities and inter-company transactions in U.S. dollars in order to partially mitigate the impact of foreign currency fluctuations. However, a portion of our international revenues and expenses are denominated in foreign currencies. Accordingly, we experience the risks of fluctuating currencies and corresponding exchange rates. In each of fiscal years 2026 and 2025, we recognized net losses of approximately $0.1 million on foreign currency transactions. Any such fluctuations that result in a less favorable exchange rate could adversely affect a portion of our revenues and expenses, which could negatively impact our results of operations and financial condition.
We also source certain raw materials from outside the U.S. Some of those materials, priced in non-dollar currencies, fluctuate in price due to the value of the U.S. dollar against non-dollar-pegged currencies, especially the Euro and Renminbi. As the dollar strengthens, this increases our margins and helps with our ability to reach positive cash flow and profitability. If the strength of the U.S. dollar decreases, the cost of foreign sourced materials could increase, which would adversely affect our financial condition and results of operations. If the Euro or Renminbi currencies were to trend unfavorably against the U.S. dollar on a long-term basis, then we would seek to rebalance our strategic materials sourcing.
We are dependent on a few key customers, and the loss of any key customer could cause a significant decline in our revenues. In fiscal year 2026, we had sales to three customers that comprised an aggregate of approximately 37% of our annual revenue, with one customer at 24% of our sales, another customer at 7% of our sales, and the third customer at 6% of our sales. In fiscal year 2025, we had sales to three customers that comprised an aggregate of approximately 23% of our annual revenue, with one customer at 9% of our sales, another customer at 7% of our sales, and the third customer at 6% of our sales. However, two of the three largest customers for fiscal year 2025 was not among the three largest for fiscal year 2026, which demonstrates that our customer concentration is not static. We continue to diversify our business in order to minimize our sales concentration risk. Our current strategy of providing the domain expertise and the extensive “know how” in optical design, fabrication, production and testing technologies will allow our customers to focus on their own development efforts, without needing to develop subject matter expertise in optics. By providing the bridge into the optical solution world, we partner with our customers on a long-term basis, create value to our customers, and capture that value through the long-term supply relationships we develop. However, the loss of any of these customers, or a significant reduction in sales to any such customer, would adversely affect our revenues.
Our stock price may fluctuate widely. Many factors, including, but not limited to, future announcements concerning the Company, its competitors or customers, as well as quarterly variations in operating results, announcements of technological innovations, seasonal or other variations in anticipated or actual results of operations, changes in earnings estimates by analysts or reports regarding the Company’s industries in the financial press or investment advisory publications, could cause the market price of the Company’s stock to fluctuate substantially. In addition, the Company’s stock price may fluctuate widely for reasons which may be unrelated to operating results. Also, any information concerning the Company, including projections of future operating results could in the future contribute to volatility in the market price of the Company’s Class A Common Stock.
As a U.S. corporation with international operations, we are subject to the U.S. Foreign Corrupt Practices Act and other similar foreign anti-corruption laws, as well as other laws governing our operations. If we fail to comply with these laws, we could be subject to civil or criminal penalties, other remedial measures, and legal expenses, which could adversely affect our business, financial condition, and results of operations. Our operations are subject to anti-corruption laws, including the U.S. Foreign Corrupt Practices Act (“FCPA”), and other foreign anti-corruption laws that apply in countries where we do business. The FCPA and these other laws generally prohibit us and our employees and intermediaries from offering, promising, authorizing or making payments to government officials or other persons to obtain or retain business or gain some other business advantage. In addition, we cannot predict the nature, scope, or effect of future regulatory requirements to which our international operations might be subject or the manner in which existing laws might be administered or interpreted. Operations outside of the U.S. may be affected by changes in trade production laws, policies, and measures, and other regulatory requirements affecting trade and investment.
We are also subject to other laws and regulations governing our international operations, including regulations administered by the U.S. Department of Commerce’s Bureau of Industry and Security, the U.S. Department of Treasury’s Office of Foreign Asset Control, and various non-U.S. government entities, including applicable export control regulations, economic sanctions on countries and persons, customs, requirements, currency exchange regulations, and transfer pricing regulations (collectively, the “Trade Control Laws”).
Despite our compliance programs, there can be no assurance that we will be completely effective in ensuring our compliance with all applicable anti-corruption laws, including the FCPA or other legal requirements, or Trade Control Laws. If we are not in compliance with the FCPA and other foreign anti-corruption laws or Trade Control Laws, we may be subject to criminal and civil penalties, disgorgement, and other sanctions and remedial measures, and legal expenses, which could have an adverse impact on our business, financial condition, results of operations and liquidity. Likewise, any investigation of any potential violations of the FCPA, other anti-corruption laws, or Trade Control Laws by the U.S. or foreign authorities could also have an adverse impact on our reputation, business, financial condition, and results of operations.
Uncertainties related to the use of artificial intelligence (“AI”) in our business may result in harm to our business and reputation. To remain competitive, we have made and will continue to make investments in AI technologies, infrastructure, talent, and training. Our use of AI technologies is at an early stage, and these investments may not yield anticipated benefits or may become obsolete more quickly than expected. The use of AI tools to assist in the preparation of our work product or our corporate operations may expose us to new forms of liability. Ineffective, inadequate or premature use of AI could result in unintended consequences, including competitive harm, regulatory penalties, legal liability, loss or misuse of intellectual property, disclosure of confidential or proprietary information, data privacy or cybersecurity incidents, or brand or reputational harm. In addition, if we fail to successfully deploy AI in our business activities, products, or services, or fail to keep pace with technological advancements and competitors that may more effectively adopt AI, our competitiveness, growth prospects and financial performance could be adversely affected. We may also incur significant costs in evaluating or implementing AI technologies, and such investments may not result in anticipated benefits or returns.
We rely, in large part, on key business and sales relationships for the successful commercialization of our products, which, if not developed or maintained, will have an adverse impact on achieving market awareness and acceptance and will result in a loss of business opportunities. To achieve wide market awareness and acceptance of our products and technologies, as part of our business strategy, we will attempt to enter into a variety of business relationships with other companies that will incorporate our technologies into their products and/or market products based on our technologies. The successful commercialization of our products and technologies will depend in part on our ability to meet obligations under contracts with respect to the products and related development requirements. The failure of these business relationships will limit the commercialization of our products and technologies, which will have an adverse impact on our business development and our ability to generate revenues.
If we are unable to effectively compete, our business and operating results could be negatively affected. We face substantial competition in the optical markets in which we operate. Many of our competitors are large public and private companies that have longer operating histories and significantly greater financial, technical, marketing, and other resources than we have. As a result, these competitors are able to devote greater resources than we can to the development, promotion, sale, and support of their products. In addition, the market capitalization and cash reserves of several of our competitors are much larger than ours, and, as a result, these competitors are better positioned than we are to exploit markets, develop new technologies, and acquire other companies in order to gain new technologies or products. We also compete with manufacturers of conventional spherical lens products and aspherical lens products, producers of optical quality glass, and other developers of gradient lens technology, as well as telecommunications product manufacturers. In both the optical lens and communications markets, we are competing against, among others, established international companies, especially in Asia. Many of these companies also are primary customers for optical and communication components, and, therefore, have significant control over certain markets for our products. There can be no assurance that existing or new competitors will not develop technologies that are superior to or more commercially acceptable than our existing and planned technologies and products or that competition in our industry will not lead to reduced prices for our products. If we are unable to successfully compete with existing companies and new entrants to the markets we compete in, our business, results of operations, and financial condition could be adversely affected.
We anticipate further reductions in the average selling prices of some of our products over time, and, therefore, must increase our sales volumes, reduce our costs, and/or introduce higher margin products to reach and maintain consistent profitable results. We have experienced decreases in the average selling prices of some of our products over the last ten years, including most of our passive component products. We anticipate that as certain products in the optical component and module market become more commodity-like, the average selling prices of our products will decrease in response to competitive pricing pressures, new product introductions by us or our competitors, or other factors. We attempt to offset anticipated decreases in our average selling prices by increasing our sales volumes and/or changing our product mix. If we are unable to offset anticipated future decreases in our average selling prices by increasing our sales volumes or changing our product mix, our net revenues and gross margins will decline, increasing the projected cash needed to fund operations. To address these pricing pressures, we must develop and introduce new products and product enhancements that will generate higher margins, continue to reduce costs, and/or change our product mix in order to generate higher margins. If we cannot maintain or improve our gross margins, our financial position, and results of operations may be harmed.
Because of our limited product offerings, our ability to generate additional revenues may be limited without additional growth. With our strategic transition into more value-added solutions, and the addition of Visimid in July 2023, we reorganized our products into four product groups: infrared components, visible components, assemblies and modules, and engineering services. The addition of G5 Infrared in February 2025 and AML in January 2026 further expands our product offerings and proprietary infrared materials. In fiscal year 2026, sales of infrared components represented approximately 30% of our net revenues, sales of visible components represented approximately 22% of our net revenues, sales of assemblies and modules represented 44% of our revenues, and engineering services represented 4% of our revenues. In the future, we expect growth primarily from our assemblies and modules product group, the vertical integration of which will be supported by the infrared components product group. Continued and expanding market acceptance of these products, particularly infrared products based on our proprietary chalcogenide materials (Germanium alternatives), is critical to our future success. There can be no assurance that our current or new products will achieve market acceptance at the rate at which we expect, or at all, which could adversely affect our results of operations and financial condition.
Our failure to accurately forecast material requirements could cause us to incur additional costs, have excess inventories, or have insufficient materials to manufacture our products. Our material requirements forecasts are based on actual or anticipated product orders. It is very important that we accurately predict both the demand for our products and the lead times required to obtain the necessary materials. Lead times for materials that we order vary significantly and depend on factors, such as specific supplier requirements, the size of the order, contract terms, and the market demand for the materials at any given time. If we overestimate our material requirements, we may have excess inventory, which would increase our costs. If we underestimate our material requirements, we may have inadequate inventory, which could interrupt our manufacturing and delay delivery of our products to our customers. Any of these occurrences would negatively impact our results of operations. Additionally, in order to avoid excess material inventories, we may incur cancellation charges associated with modifying existing purchase orders with our vendors, which, depending on the magnitude of such cancellation charges, may adversely affect our results of operations.
If we do not achieve acceptable manufacturing yields our operating results could suffer. The manufacture of our products involves complex and precise processes. Our manufacturing costs for several products are relatively fixed, and, thus, manufacturing yields are critical to the success of our business and our results of operations. Changes in our manufacturing processes or those of our suppliers could significantly reduce our manufacturing yields. In addition, we may experience manufacturing delays and reduced manufacturing yields upon introducing new products to our manufacturing lines. The occurrence of unacceptable manufacturing yields or product yields could adversely affect our financial condition and results of operations.
If our customers do not qualify our manufacturing lines for volume shipments, our operating results could suffer. Our manufacturing lines have passed our qualification standards, as well as our technical standards. However, our customers may also require that our manufacturing lines pass their specific qualification standards, and that we be registered under international quality standards, beyond our ISO 9001:2015 certification. This customer qualification process determines whether our manufacturing lines meet the customers’ quality, performance, and reliability standards. Generally, customers do not purchase our products, other than limited numbers of evaluation units, prior to qualification of the manufacturing line for volume production. We may be unable to obtain customer qualification of our manufacturing lines or we may experience delays in obtaining customer qualification of our manufacturing lines. If there are delays in the qualification of our products or manufacturing lines, our customers may drop the product from a long-term supply program, which would result in significant lost revenue opportunity over the term of each such customer’s supply program, or our customers may purchase from other manufacturers. The inability to obtain customer qualification of our manufacturing lines, or the delay in obtaining such qualification, could adversely affect our financial condition and results of operations.
Our future success depends on our key executive officers and our ability to attract, retain, and motivate qualified personnel. Our future success largely depends upon the continued services of our key executive officers, management team, and other engineering, sales, marketing, manufacturing, and support personnel. If one or more of our key employees are unable or unwilling to continue in their present positions, we may not be able to replace them readily, if at all. Additionally, we may incur additional expenses to recruit and retain new key employees. If any of our key employees joins a competitor or forms a competing company, we may lose some or a significant portion of our customers. Because of these factors, the loss of the services of any of these key employees could adversely affect our business, financial condition, and results of operations.
Our continuing ability to attract and retain highly qualified personnel will also be critical to our success because we will need to hire and retain additional personnel to support our business strategy. We expect to continue to hire selectively in the manufacturing, engineering, sales and marketing, and administrative functions to the extent consistent with our business levels and to further our business strategy. We face significant competition for skilled personnel in our industry. This competition may make it more difficult and expensive to attract, hire, and retain qualified managers and employees. Because of these factors, we may not be able to effectively manage or grow our business, which could adversely affect our financial condition or business.
We face product liability risks, which could adversely affect our business. The sale of our optical products involves the inherent risk of product liability claims by others. We do not currently maintain product liability insurance coverage. Product liability insurance is expensive, subject to various coverage exclusions, and may not be obtainable on terms acceptable to us if we decide to procure such insurance in the future. Moreover, the amount and scope of any coverage may be inadequate to protect us in the event that a product liability claim is successfully asserted. If a claim is asserted and successfully litigated by an adverse party, our financial position and results of operations could be adversely affected.
Business interruptions could adversely affect our business. We manufacture our products at manufacturing facilities located in Orlando, Florida; Hudson, New Hampshire; Plano, Texas; and Riga, Latvia. Up until completing the sale of LPOIZ, we also manufactured our products in a manufacturing facility in Zhenjiang, China. Our revenues are dependent upon the continued operation of these facilities. The Orlando Facility lease expires March 31, 2034. The Hudson, New Hampshire facility lease expires in December 2031. The Plano, Texas lease expires in August 2030. The Riga Facility is subject to two leases which expire in December 2030. Our operations are vulnerable to interruption by fire, hurricane winds and rain, earthquakes, electric power loss, telecommunications failure, and other events beyond our control. We do have a business continuity and recovery plan for our facilities however, we do not have a backup facility, other than our other facilities, or contractual arrangements with any other manufacturers in the event of a casualty to or destruction of any facility or if any facility ceases to be available to us for any other reason. If we are required to rebuild or relocate either of our manufacturing facilities, a substantial investment in improvements and equipment would be necessary. We carry only a limited amount of business interruption insurance, which may not sufficiently compensate us for losses that may occur.
Our facilities may be subject to electrical blackouts as a consequence of a shortage of available electrical power. We currently do not have backup generators or alternate sources of power in the event of a blackout. If blackouts interrupt our power supply, we would be temporarily unable to continue operations at such facility.
Any losses or damages incurred by us as a result of blackouts, rebuilding, relocation, or other business interruptions, could result in a significant delay or reduction in manufacturing and production capabilities, impair our reputation, harm our ability to retain existing customers and to obtain new customers, and could result in reduced sales, lost revenue, increased costs and/or loss of market share, any of which could substantially harm our business and our results of operations.
Risks Related to Our Intellectual Property
If we are unable to protect and enforce our intellectual property rights, we may be unable to compete effectively. We believe that our intellectual property rights are important to our success and our competitive position, and we rely on a combination of patent, copyright, trademark, and trade secret laws and restrictions on disclosure to protect our intellectual property rights in the United States and internationally. Although we have devoted substantial resources to the establishment and protection of our intellectual property rights, the actions taken by us may be inadequate to prevent imitation or improper use of our products by others or to prevent others from claiming violations of their intellectual property rights by us. In addition, we cannot assure that, in the future, our patent applications will be approved, that any patents that may be issued will protect our intellectual property, or that third parties will not challenge any issued patents. Other parties may independently develop similar or competing technology or design around any patents that may be issued to us. We also rely on confidentiality procedures and contractual provisions with our employees, consultants, and corporate partners to protect our proprietary rights, but we cannot assure the compliance by such parties with their confidentiality obligations, which could be very time consuming, expensive, and difficult to enforce.
It may be necessary to litigate to enforce our patents, copyrights, and other intellectual property rights, to protect our trade secrets, to determine the validity of and scope of the proprietary rights of others, or to defend against claims of infringement or invalidity. Such litigation can be time consuming, distracting to management, expensive, and difficult to predict. Our failure to protect or enforce our intellectual property could have an adverse effect on our business, financial condition, prospects, and results of operation.
We do not have patent protection for our formulas and processes, and a loss of ownership of any of our formulas and processes would negatively impact our business. We believe that we own our formulas and processes. However, we have not sought, and do not intend to seek, patent protection for all of our formulas and processes. Instead, we rely on the complexity of our formulas and processes, trade secrecy laws, and employee confidentiality agreements. However, we cannot assure you that other companies will not acquire our confidential information or trade secrets or will not independently develop equivalent or superior products or technology and obtain patent or similar rights. Although we believe that our formulas and processes have been independently developed and do not infringe the patents or rights of others, a variety of components of our processes could infringe existing or future patents, in which event we may be required to modify our processes or obtain a license. We cannot assure you that we will be able to do so in a timely manner or upon acceptable terms and conditions and the failure to do either of the foregoing would negatively affect our business, results of operations, financial condition, and cash flows.
Data breach and breakdown of information and communication technologies. In the course of our business, we collect and store sensitive data, including intellectual property. We could be subject to service outages or breaches of security systems which may result in disruption, unauthorized access, misappropriation, or corruption of this information. We rely on our information technology systems to effectively manage our operational and financial functions. We increasingly rely on information technology systems to process, transmit, and store electronic information. In addition, a significant portion of internal communications, as well as communication with customers and suppliers, depends on information technology. We are exposed to the risk of cyber incidents in the normal course of business. Cyber incidents may be deliberate attacks for the theft of intellectual property, other sensitive information or cash or may be the result of unintentional events. Like most companies, our information technology systems may be vulnerable to interruption due to a variety of events beyond our control, including, but not limited to, physical or electronic break-ins, vendor service outages, terrorist attacks, telecommunications failures, computer viruses, hackers, foreign governments, and other security issues. We have technology security initiatives and data recovery plans in place to mitigate our risk to these vulnerabilities, but these measures may not be adequate, or implemented properly, or executed timely to ensure that our operations are not disrupted. We have insurance coverage for cyber liability, but there can be no assurances that the amount of coverage will be adequate or that insurance proceeds will be available for a particular claim.
Although we have not experienced an incident, potential consequences of a material cyber incident include damage to our reputation, litigation, system disruptions, shutdowns, unauthorized disclosure of confidential information, and increased cyber security protection and remediation costs. Such consequences could materially and adversely affect our results of operations.
We may become involved in intellectual property disputes and litigation, which could adversely affect our business. We anticipate, based on the size and sophistication of our competitors and the history of rapid technological advances in our industry that several competitors may have patent applications in progress in the U.S. or in foreign countries that, if issued, could relate to products similar to ours. If such patents were to be issued, the patent holders or licensees may assert infringement claims against us or claim that we have violated other intellectual property rights. These claims and any resulting lawsuits, if successful, could subject us to significant liability for damages and invalidate our proprietary rights. The lawsuits, regardless of their merits, could be time-consuming and expensive to resolve and would divert management time and attention. Any potential intellectual property litigation could also force us to do one or more of the following, any of which could harm our business and adversely affect our financial condition and results of operations:
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stop selling, incorporating or using our products that use the disputed intellectual property; |
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obtain from third parties a license to sell or use the disputed technology, which license may not be available on reasonable terms, or at all; or |
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redesign our products that use the disputed intellectual property. |
Item 1B. Unresolved Staff Comments.
None.
Cybersecurity Risk Management and Strategy
Our cybersecurity risk management program is fully integrated within our broader enterprise risk management framework, leveraging consistent methodologies, incident reporting channels, and governance processes. These approaches are used not only for cybersecurity risks but also for managing other areas of risk, including legal, compliance, strategic, operational, and financial. The program is continuously assessed and refined, using the National Institute of Standards and Technology Cybersecurity Framework (“NIST CSF”) as a guiding tool to identify, prioritize, and manage cybersecurity risks that could significantly affect our operations, financial performance, or business objectives.
Key components of our cybersecurity risk management program include:
| ● | Cybersecurity Incident Response Plan (“CIRP”): Our CIRP ensures we are prepared to respond to, report, and remediate any cybersecurity incidents effectively. Led by the Chief Information Officer (“CIO”), our corporate compliance and risk management team manages all aspects of incident response. For significant incidents, additional third-party resources would be mobilized to mitigate impact on the business. | |
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| ● | Continuous Vulnerability Management: We continuously monitor our IT networks and legacy systems to identify threats that may adversely affect critical systems and information, ensuring that our broader IT environment remains secure. | |
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| ● | Third-Party Cybersecurity Consultants: We engage trusted -party cybersecurity experts to enhance our security posture, perform assessments, and provide strategic guidance, ensuring continuous improvement in our cybersecurity approach. | |
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| ● | Cybersecurity Awareness Training: Employees, incident response teams, and senior management undergo regular training to ensure awareness of evolving cybersecurity threats and the appropriate responses. | |
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| ● | Risk Management for Third-Party Providers: We conduct due diligence when selecting and periodically reviewing -party service providers, suppliers, and vendors to ensure they comply with necessary cybersecurity standards. |
Cybersecurity Governance
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In the event of a significant cybersecurity incident that escalates to a corporate crisis, the executive team and the Board will be engaged in alignment with the corporate compliance and risk protocols.
Our properties consist primarily of leased office and manufacturing facilities. Our corporate headquarters office and manufacturing facility is located in Orlando, Florida and our additional manufacturing and office facilities are located in Hudson, New Hampshire, Plano, Texas, Garland, Texas, Zhenjiang, China and Riga, Latvia. The following schedule presents the approximate square footage of our offices and facilities as of June 30, 2026:
| Location |
Square Feet |
Commitment and Use |
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| Orlando, Florida |
58,500 | Leased; 2 suites used for corporate headquarters offices, manufacturing, and research and development |
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| Hudson, New Hampshire |
27,000 | Leased; 1 suite used for administrative offices, engineering and manufacturing |
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| Plano, Texas |
9,000 | Leased; 1 suite used for engineering and manufacturing |
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| Garland, Texas |
7,300 | Licensed; 1 suite used for engineering and manufacturing |
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| Riga, Latvia |
29,000 | Leased; 3 suites used for administrative offices and manufacturing |
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| Zhenjiang, China |
39,500 | Leased; 1 building used for manufacturing |
*In July 2026, we announced the sale of LPOIZ, which includes the Zhenjiang Facility. We expect to close the transaction in September 2026, and the lease will be assigned to the purchasers as of the date of closing.
Our territorial sales personnel maintain an office from their homes to serve their geographical territories.
For additional information regarding our facilities, please see Item 1. Business in this Annual Report on Form 10-K. For additional information regarding leases, see Note 13, Leases, to the Notes to the Consolidated Financial Statements to this Annual Report on Form 10-K.
From time to time, we are involved in various legal actions arising in the normal course of business. We currently have no material legal proceeding to which we are a party to or to which our properties are subject to and, to the best of our knowledge, no material adverse legal activity is anticipated or threatened.
Item 4. Mine Safety Disclosures.
Not Applicable.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
Our Class A Common Stock is traded on the Nasdaq Capital Market under the symbol “LPTH”.
Holders
As of September 1, 2026, we estimate there were approximately 230 holders of record and approximately 38,300 street name holders of our Class A Common Stock.
Dividends
We have never declared or paid any cash dividends on our Class A Common Stock and do not intend to pay any cash dividends in the foreseeable future. We currently intend to retain all future earnings in order to finance the operation and expansion of our business. In addition, the payment of dividends, if any, in the future, will depend on our earnings, capital requirements, financial conditions, and other relevant factors.
Issuer Purchases of Equity Securities
During the year ended June 30, 2026 there were no repurchases of the Company’s Class A Common Stock by the Company.
Item 6. [Reserved].
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis by our management of our financial condition and results of operations in conjunction with our consolidated financial statements and the accompanying notes.
The following discussion contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. Our actual results could differ materially from those discussed in the forward-looking statements. Please also see the cautionary language at the beginning of this Annual Report on Form 10-K regarding forward-looking statements.
The following discussions also include use of non-GAAP measures discussed in more detail under the heading “Non-GAAP Financial Measures.”
Results of Operations
Operating Results for Fiscal Year Ended June 30, 2026 Compared to the Fiscal Year Ended June 30, 2025:
Revenue.
Revenue for fiscal year 2026 was approximately $71.7 million, an increase of 93%, as compared to $37.2 million in fiscal year 2025. We categorize our products into four product groups: (i) infrared components; (2) visible components; (3) assemblies and modules; and (iv) engineering services. Note that certain fiscal year 2025 amounts have been reclassified from infrared components to assemblies and modules to conform to current classification.
Revenue generated by the infrared components product group was approximately $21.2 million in fiscal year 2026, an increase of $7.3 million, or 52%, as compared to the prior fiscal year. Of this increase, approximately $1.3 million was attributable to increased sales by G5 Infrared of coating services, reflecting a full fiscal year, compared to less than half of fiscal 2025 due to the timing of the acquisition. AML, which was acquired in January 2026, contributed approximately $2.2 million to the increase in sales of infrared components. The remaining $3.8 million increase in revenue from infrared components is primarily due to increases in sales to defense and industrial customers in Europe.
Revenue generated by the visible components product group was approximately $15.5 million for fiscal year 2026, an increase of $3.8 million, or 32%, as compared to the prior fiscal year. The increase was primarily driven by increases in sales to industrial customers the U.S., Asia and Europe, including several new programs.
Revenue from the assemblies and modules product group was approximately $31.9 million in fiscal year 2026, an increase of $23.5 million, or 281%, as compared to fiscal year 2025. Of this increase, approximately $23.1 million is due to an increase in G5 Infrared sales of cameras and modules, including previously announced large defense and security programs.
Revenue from engineering services was nearly flat for fiscal 2026, as compared to the same period of the prior fiscal year. This includes Visimid’s contract with Lockheed Martin, as well as several other non-recurring engineering projects, the largest of which was for another defense customer. The timing and dollar value of deliverables is not always consistent, which causes revenue for the programs within this product group to fluctuate from period to period.
Cost of Sales and Gross Profit.
Gross profit for fiscal year 2026 was approximately $25.8 million, an increase of 155%, as compared to approximately $10.1 million in fiscal year 2025. Total cost of sales was approximately $45.9 million for fiscal year 2026, compared to $27.1 million for fiscal year 2025, an increase of 70%. Gross margin as a percentage of revenue was 36% for fiscal year 2026 as compared to 27% for fiscal year 2025. The increase in gross margin for fiscal year 2026 was driven by the increase in sales across nearly all product groups, as well as improved gross margins across each of the product groups. Fiscal year 2026 also includes a full year of G5 Infrared revenue and gross profit, particularly in the assemblies and modules product group. The assemblies and modules product group increased from 23% of revenue in fiscal year 2025, to 44% of revenue in fiscal year 2026, and these products typically have higher gross margins than the component product groups. Gross profit for fiscal year 2025 was also unusually low, partially due to the unfavorable impact of an approximately $0.5 million increase in inventory reserve charges primarily related to visible components where revenue had declined for the past several years.
Selling, General and Administrative.
For fiscal year 2026, Selling, General and Administrative (“SG&A”) costs were approximately $24.7 million, an increase of approximately $8.8 million, or 56%, as compared to the prior fiscal year. The increase in SG&A costs was partially attributable to including a full year of G5 Infrared SG&A costs for 2026, an increase of $2.3 million, as compared to fiscal 2025 due to the timing of the acquisition. The AML transaction also added $1.0 million in SG&A for fiscal 2026, including acquisition-related costs. In addition, we have increased our sales and marketing spend to promote new products, including personnel costs, travel and tradeshows. We have also increased our spend on information technology to meet heightened security standards as required by our customers, and for acquisition integration projects. Our SG&A personnel costs have also increased due to filling certain vacant executive roles and accruing for incentive compensation plans for employees.
New Product Development.
New product development costs were approximately $3.8 million in fiscal year 2026, an increase of approximately $0.7 million, or 24%, as compared to the prior fiscal year. New product development costs increased with the addition of G5 Infrared product development costs, and other additional engineering personnel. These increases were partially offset by a decrease in outside services and materials utilized for development projects, due to timing of such projects. Management views the investment in new product development as an important part of execution of our strategy, and plans to continue to grow our investment in new product development.
Amortization of Intangible Assets.
Amortization of intangible assets increased by $0.4 million for fiscal year 2026, as compared to the prior fiscal year due to the addition of amortization of intangible assets associated with the G5 Infrared and AML acquisitions. See Note 3, Acquisitions, in the Consolidated Financial Statements included in this Annual Report on Form 10-K, for further information.
Change in Fair Value of Acquisition Liabilities.
Change in fair value of acquisition liabilities increased by $14.1 million for fiscal year 2026, as compared to the prior fiscal year primarily related to the earnouts associated with the G5 Infrared acquisition, where the amounts earned were greater than the fair values estimated and recorded at the date of acquisition. See Note 3, Acquisitions, in the Consolidated Financial Statements included in this Annual Report on Form 10-K, for further information.
Other Expense.
Interest income, net, was approximately $0.01 million for fiscal year 2026, compared to interest expense, net, of approximately $1.1 million in the prior fiscal year. For fiscal 2026, we earned interest on our cash balance following the December Offering (as defined below) and the June Offering (as defined below), partially offset by interest expense on finance leases and interest and amortization of loan issuance costs on the Acquisition Notes (as defined below) until they were redeemed in December 2025. Interest expense for fiscal year 2025 includes financing costs associated with the warrant liability of approximately $0.3 million, and the interest and amortization of loan issuance costs associated with the Bridge Note (as defined below), executed in August 2024, which was subsequently replaced by the Acquisition Notes executed in February 2025. See Note 14, Loans Payable, in the Consolidated Financial Statements included in this Annual Report on Form 10-K, for definitions and further information.
We recorded a loss in extinguishment of debt of $0.5 million during fiscal year 2026, upon redemption of the Acquisition Notes, based on the difference between the carrying value of the debt being extinguished and the redemption amount. During fiscal year 2025, we recorded a loss on extinguishment of debt of $0.4 million related to the exchange of the Bridge Note for an Acquisition Note in connection with the financing of the acquisition of G5 Infrared. The loss is based on the difference between the carrying value of the debt being extinguished and the fair value of the new debt, plus any other payments exchanged (e.g. the aforementioned Class A Common Stock, Series G Convertible Preferred Stock and warrants).
In fiscal year 2025, we recorded an expense associated with the change in fair value of the warrant liability of $1.4 million. The fair value of the warrants was re-measured each reporting period from the date of issuance until the warrants were reclassified from liabilities to equity as a result of the action taken at a special meeting of the stockholders on June 16, 2025. See Note 8, Stockholders' Equity, in the Consolidated Financial Statements included in this Annual Report on Form 10-K, for definitions and further information.
Other expense, net, was approximately $0.1 million for fiscal year 2026, compared to $0.1 million for fiscal year 2025. Other expense, net, for fiscal years 2026 and 2025 primarily consists of net foreign exchange losses. We execute all foreign sales from our U.S. facilities and inter-company transactions in U.S. dollars, partially mitigating the impact of foreign currency fluctuations. Assets and liabilities denominated in non-United States currencies, primarily the Chinese Yuan and Euro, are translated at rates of exchange prevailing on the balance sheet date, and revenues and expenses are translated at average rates of exchange for the year.
Income Taxes.
During fiscal year 2026, we recorded income tax expense of approximately $0.3 million, compared to $0.04 million in fiscal year 2025, primarily related to our operations in China. Income taxes for fiscal years 2026 and 2025 include Chinese withholding tax expenses of $0.1 million and $0.2 million, respectively, the majority of which are associated with intercompany dividends declared by LPOIZ, payable to us as the parent company. While these repatriation transactions result in some additional Chinese withholding taxes, LPOIZ currently qualifies for a reduced Chinese income tax rate; therefore, the total tax on those earnings was still below the normal income tax rate. Income tax expense for fiscal years 2026 and 2025 are also offset by deferred income tax benefits from the turnaround of temporary differences, and increased by deferred income tax expense related to certain indefinite lived temporary differences. Please refer to Note 9, Income Taxes, in the Notes to the Consolidated Financial Statements in this Annual Report on Form 10-K for additional information related to each of our tax jurisdictions.
Net Income (Loss).
Net loss for fiscal year 2026 was approximately $20.5 million, or $0.38 basic and diluted loss per share, compared to approximately $14.9 million, or $0.36 basic and diluted loss per share, for fiscal year 2025. The increase in net loss for fiscal year 2026, as compared to fiscal year 2025, is primarily attributable to the approximately $14.1 million increase in the change in fair value of acquisition liabilities, which is included in operating expenses, as well as the increase in SG&A and new product development costs, which were largely offset by the increase in gross profit.
Weighted-average common stock shares outstanding were 53,374,275 for both basic and diluted in fiscal year 2026, compared to 40,874,068 for both basic and diluted in fiscal year 2025. The increase in weighted-average basic common shares was primarily due to the December Offering and the June Offering. The increase is also attributable to: (i) the 3,468,698 shares of Class A Common Stock issued upon the exercise of warrants; (ii) the 8,692,097 shares of Class A Common Stock issued upon conversion of Series G Convertible Preferred Stock; (iii) the 524,124 shares of Class A Common Stock issued in conjunction with the acquisitions of Visimid, G5 Infrared and AML, including earnouts; and (iv) the issuance of shares of Class A Common Stock under the 2015 ESPP and underlying vested RSUs and RSAs. Potential dilutive common stock equivalents were excluded from the calculation of diluted shares for all periods presented, as their effects would have been anti-dilutive due to net losses in those periods.
Liquidity and Capital Resources
At June 30, 2026, we had working capital of approximately $103.7 million and total cash and cash equivalents of approximately $93.2 million. Approximately 4% of our total cash and cash equivalents was held by our foreign subsidiaries in China and Latvia. Cash and cash equivalents held by our foreign subsidiaries in China and Latvia were generated in-country as a result of foreign earnings. Historically, we considered unremitted earnings held by our foreign subsidiaries to be permanently reinvested. However, during fiscal year 2020, we began declaring intercompany dividends to remit a portion of the earnings of our foreign subsidiaries to us, as the U.S. parent company. It is still our intent to reinvest a portion of earnings generated by our foreign subsidiaries, however we also plan to repatriate a portion of their earnings.
In China, before any funds can be repatriated, the retained earnings of the legal entity must equal at least 50% of the registered capital. During fiscal years 2026 and 2025, we repatriated approximately $0.2 million and $1.2 million, respectively, from LPOIZ. As of June 30, 2026, LPOIZ had approximately $0.7 million in retained earnings available for repatriation, based on earnings accumulated through December 31, 2025, the end of the most recent statutory tax year, that remained undistributed as of June 30, 2026. In July 2026, we repatriated $0.4 million, ahead of the closing of the divestiture of LPOIZ which is expected to occur in September 2026.
Loans payable as of June 30, 2026 consisted of the 2023 Equipment Loan (as defined below).
In May 2023, ISP Latvia entered into an equipment loan with a third party financial institution (the “2023 Equipment Loan”). The 2023 Equipment Loan is collateralized by certain equipment. The initial advances under the 2023 Equipment Loan totaled 260,258 EUR (or approximately USD $0.3 million), the proceeds of which were used to make prepayments to a vendor for equipment to be delivered at a future date. The final advance for the final payment to the equipment vendor was 132,674 EUR (or approximately USD $0.1 million). The 2023 Equipment Loan is payable over 48 months, with monthly installments beginning January 1, 2024. The 2023 Equipment Loan bears interest at the six-month EURIBOR rate, plus 2.84% (5.20% as of June 30, 2026). As of June 30, 2026, the outstanding balance on the 2023 Equipment Loan was approximately 164,000 EUR (or USD $0.2 million). For additional information regarding the 2023 Equipment Loan, see Note 14, Loans Payable, to the Notes to the Consolidated Financial Statements to this Annual Report on Form 10-K.
Equity Financing.
On June 1, 2026, we entered into a securities purchase agreement with a selling stockholder, North Run Strategic Opportunities Fund I, LP (“North Run”) and certain institutional investors for the purchase and sale of an aggregate of 7,142,800 shares of Class A Common Stock at an offering price of $14.00 per share, consisting of 3,571,400 shares of Class A Common Stock sold by the Company and 3,571,400 shares of Class A Common Stock sold by North Run (the "June Offering"), resulting in gross proceeds to us of approximately $50.0 million. The June Offering closed on June 3, 2026.
On December 12, 2025, we entered into an underwriting agreement (the “Underwriting Agreement”) with Canaccord Genuity LLC and Craig-Hallum Capital Group LLC, as representatives of the several underwriters named therein (the “Underwriters”), relating to an underwritten public offering (the “December Offering”) of 7,750,000 shares of the Company’s Class A Common Stock, at a public offering price of $7.75 per share. Pursuant to the terms of the Underwriting Agreement, we granted, and the Underwriters exercised, a 30-day option to purchase up to an additional 1,162,500 shares of Class A Common Stock in the December Offering at the public offering price. The December Offering closed on December 15, 2025.
On February 18, 2025, we announced the closing of the acquisition of G5 Infrared and the related financing, including the issuance of shares of Series G Convertible Preferred Stock. For additional information, refer to Note 3, Acquisitions and Note 8, Stockholders' Equity, to the Notes to the Consolidated Financial Statements to this Annual Report on Form 10-K.
In the short term, we have sufficient capital to fund the continued expansion of our operations. In the longer term, we may identify opportunities for additional acquisitions and other strategic transactions to expand and further enhance our business that may require that we raise additional capital should we elect to pursue any of such transactions.
Cash Flows – Operating.
Cash used in operations was $10.2 million for fiscal 2026, compared to approximately $8.3 million for fiscal year 2025. The cash used in operations for fiscal 2026 was primarily due to the following: (i) payment of the first earnout payment for the acquisition of G5 Infrared, of which $3.8 million was classified in operating activities, representing the amount in excess of the contingent consideration liability recognized as of the acquisition date; and (ii) investments in working capital of $9.6 million, largely driven by accounts receivable and inventory due to the growth in revenue, as well as supplier prepayments for critical materials with long lead times. The cash used in operations during fiscal year 2025 was driven by the net loss, after considering non-cash items, which was partially driven by significant legal and consulting expenses related to the acquisition of G5 Infrared. In addition, inventory increased $1.4 million (net of inventory included in the acquisition of G5 Infrared), while the increase in accounts receivable was largely offset by increases in accounts payable and accrued liabilities.
We anticipate continued improvement in our cash flows provided by operations in future years and as we continue to focus on managing our receivables, payables and inventory, while continuing to grow our sales and improve gross margins, with moderate increases in general, administrative, sales and marketing and new product development costs.
Cash Flows – Investing.
During fiscal years 2026 and 2025, we expended approximately $7.0 million and $18.5 million, net, to acquire AML and G5 Infrared respectively, as disclosed in Note 3, Acquisitions, in the Consolidated Financial Statements in this Annual Report on Form 10-K. During fiscal 2026, we expended approximately $6.3 million for capital equipment, as compared to approximately $1.3 million during fiscal year 2025. During fiscal years 2026 and 2025 our capital expenditures were primarily related to expansion of our glass fabrication capacity, as well as metrology and infrared coating equipment.
We anticipate a higher level of capital expenditures during fiscal year 2027, to support the demand currently in backlog and to enhance our capacity and capabilities; however, the total amount expended will depend on sales growth opportunities and other circumstances.
Cash Flows – Financing.
Net cash provided by financing activities was approximately $111.0 million for fiscal year 2026, compared to approximately $29.3 million in fiscal year 2025. Cash provided by financing activities for fiscal year 2026 reflects approximately $120.2 million in net proceeds from public and private equity placements, offset by $5.7 million in principal payments on loans and finance leases. Cash provided by financing activities for fiscal year 2025 reflects approximately $29.8 million from financing related to the acquisition of G5 Infrared, offset by $0.4 million in principal payments on loans and finance leases.
How We Operate
We have continuing sales of two basic types: (i) sales of standard product configurations and (ii) sales of customized products or products developed specifically for a certain customer. In this latter type of business, we work with customers to help them determine optical specifications and then create certain optical designs for them, including complex multi-component, optical system or sub-system designs that we call “engineered solutions.” This is followed by “sampling” or prototyping small numbers of the product for the customers’ test and evaluation. Thereafter, should a customer conclude that our specification or design is the best solution to their product need; we negotiate and “win” a contract (sometimes called a “design win”) – whether of a “blanket purchase order” type or a supply agreement. The strategy is to create an annuity revenue stream that makes the best use of our production capacity and longer-term revenue planning, as compared to the turns business, which is unpredictable and uneven. A key business objective is to convert as much of our business to the design win and annuity model as is possible. We face several challenges in doing so:
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Maintaining the design and new product development capability, including a high-quality and responsive optical design engineering staff, opto-mechanical engineering, and all related disciplines; |
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The fact that as our customers take products of this nature into higher volume, commercial production they begin to work seriously to reduce costs – which may lead them to turn to larger producers, domestic or overseas, even if sacrificing quality; and |
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Our small business mass means that we can only offer a moderate amount of total productive capacity before we reach financial constraints imposed by the need to make additional capital expenditures – in other words, because of our limited cash resources and cash flow, we may not be able to service every opportunity that presents itself in our markets without arranging for such additional capital expenditures. |
Despite these challenges to winning more “annuity” business, we nevertheless believe we can be successful in procuring this business because of our unique capabilities in optical design engineering that we make available on the market to our current and potential customers looking for specific solutions to their needs. Additionally, we believe that we offer value to some customers as a source of supply in the U.S. should they be unwilling to commit to purchase their supply of critical component(s) from foreign sources. For information regarding revenue recognition related to our various revenue streams, refer to Critical Accounting Policies and Estimates in this Annual Report on Form 10-K.
Our Key Performance Indicators
Usually on a weekly basis, management reviews several performance indicators. Some of these indicators are qualitative and others are quantitative. These indicators change from time to time as the opportunities and challenges in the business change. They are mostly non-financial indicators, such as units of shippable output by product line, production yield rates by major product line, and the output and yield data from significant intermediary manufacturing processes that support the production of the finished shippable product. These indicators can be used to calculate such other related indicators as fully yielded unit production per-shift, which varies by the product and our state of automation in production of that product at any given time. Higher unit production per shift means lower unit cost, and, therefore, improved margins or improved ability to compete, where desirable, for price sensitive customer applications. The data from these reports is used to determine tactical operating actions and changes. We believe that our non-financial production indicators, such as those noted, are proprietary information.
Financial indicators that are usually reviewed at the same time include the major elements of the micro-level business cycle:
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sales backlog; |
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revenue by product group; |
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inventory levels; |
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accounts receivable levels and quality; |
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EBITDA and Adjusted EBITDA; and |
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other key indicators. |
These indicators are similarly used to determine tactical operating actions and changes and are discussed in more detail below. Management will evaluate these key indicators as we transition to our new strategic plan to determine whether any changes or updates to our key indicators are warranted.
Sales Backlog.
We believe sales growth has been and continues to be a key indicator of success. Our best view into the efficacy of our sales efforts is in our “order book.” Our order book equates to sales “backlog.” It has a quantitative and a qualitative aspect: quantitatively, our backlog’s prospective dollar value and qualitatively, what percent of the backlog is scheduled by the customer for date-certain delivery. We monitor and evaluate our total backlog, which includes all firm orders requested by a customer that are reasonably believed to remain in the backlog and be converted into revenues. This includes customer purchase orders and may include amounts under supply contracts if they meet the aforementioned criteria.
Quarterly backlog levels for fiscal years 2026 and 2025 are as follows:
| Change From |
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| Total Backlog |
Change From |
Prior Quarter |
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| Quarter |
($ 000) |
Prior Year End |
End |
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| Q1 2025 |
$ | 20,542 | 7 | % | 7 | % | ||||||
| Q2 2025 |
$ | 19,767 | 3 | % | (4 | )% | ||||||
| Q3 2025 |
$ | 27,423 | 42 | % | 39 | % | ||||||
| Q4 2025 |
$ | 37,390 | 94 | % | 36 | % | ||||||
| Q1 2026 |
$ | 86,043 | 130 | % | 130 | % | ||||||
| Q2 2026 |
$ | 97,837 | 162 | % | 14 | % | ||||||
| Q3 2026 |
$ | 110,557 | 196 | % | 13 | % | ||||||
| Q4 2026 |
$ | 110,943 | 197 | % | 0 | % | ||||||
Of the total backlog of $110.9 million as of June 30, 2026, approximately $85.6 million is requested by the customer for delivery within one year, which is expected to be converted into revenues during fiscal year 2027.
The increase in total backlog from June 30, 2025 to June 30, 2026 of $73.6 million includes approximately $58.0 million in orders from a leading global technology customer for advanced infrared camera systems expected to ship in calendar year 2026 and 2027, as well as several other multi-million dollar orders from other customers. During fiscal 2026, we received a significant contract renewal for advanced infrared optics for a critical international military program. The acquisition of AML also added backlog of $1.1 million as of March 31, 2026. The timing of multi-year contract renewals are not always consistent and, thus, backlog levels may increase substantially when annual and multi-year orders are received, and decrease as shipments are made against these orders. We anticipate that our existing annual and multi-year contracts will be renewed in future quarters.
Markets continue to experience growing demand for infrared products used in the defense, security, industrial and first responder sectors. Demand for infrared products, including assemblies and cameras, continues to be fueled by interest in lenses made with our BD6 glass and our new BDNL materials. With the global supply of germanium concentrated in Russia and China, recent global events and increases in restrictions on the sourcing of these materials are generating high levels of interest in germanium alternatives such as our proprietary BlackDiamond materials, AML's AMTIR materials and other materials we are currently developing under an exclusive license with the Naval Research Lab.
Revenue by Product Group.
The following table sets forth revenue dollars by our four product groups for the three months and year ended June 30, 2026 and 2025, with certain fiscal year 2025 amounts reclassified from infrared components to assemblies and modules to conform to current classification:
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| Three Months Ended |
Year Ended |
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| June 30, |
Quarter |
June 30, |
Year-to-date |
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| 2026 |
2025 |
% Change |
2026 |
2025 |
% Change |
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| Revenue |
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| Infrared components |
$ | 7,095,963 | $ | 4,542,306 | 56 | % | $ | 21,196,156 | $ | 13,905,784 | 52 | % | ||||||||||||
| Visible components |
4,238,317 | 2,835,474 | 49 | % | 15,492,707 | 11,736,549 | 32 | % | ||||||||||||||||
| Assemblies and modules |
9,051,215 | 4,569,737 | 98 | % | 31,879,418 | 8,373,101 | 281 | % | ||||||||||||||||
| Engineering services |
776,857 | 262,276 | 196 | % | 3,153,818 | 3,187,196 | (1 | )% | ||||||||||||||||
| Total revenue |
$ | 21,162,352 | $ | 12,209,793 | 73 | % | $ | 71,722,099 | $ | 37,202,630 | 93 | % | ||||||||||||
Three months ended June 30, 2026 compared to three months ended June 30, 2025.
Our revenue increased by $9.0 million in the fourth quarter of fiscal year 2026, as compared to the same quarter of the prior fiscal year, primarily driven by increases in infrared components and assemblies and modules.
Revenue generated by the infrared components product group for the fourth quarter of fiscal year 2026 was $7.1 million, an increase of 56%, as compared to the same quarter of the prior fiscal year. AML, which was acquired during the quarter of fiscal 2026, contributed $1.1 million in sales of infrared materials during the fourth quarter of fiscal 2026. The remaining $1.5 million increase in revenue is primarily due to increases in sales to defense and industrial customers in the U.S. and Europe.
Revenue from the visible components product group for the fourth quarter of fiscal year 2026 was $4.2 million, an increase of 49% as compared to the same quarter of the prior fiscal year. The increase was driven by sales to industrial customers in Asia and Europe, as well as U.S. defense customers and distributors. In July 2026, we announced the divestiture of LPOIZ, our Chinese subsidiary, which will reduce our revenue from visible components following the closing of the transaction, which is expected to occur in September 2026.
Revenue from assemblies and modules was $9.1 million, an increase of 98%, as compared to the same quarter of the prior fiscal year. This increase is primarily driven by sales of G5 Infrared sales of cameras and modules, including the previously announced program with a large global technology customer and other defense and security customers, primarily for border patrol and C-UAS systems.
Revenue from engineering services increased by $0.5 million for the fourth quarter of fiscal 2026, as compared to the same quarter of the prior fiscal year. This increase was primarily driven by Visimid’s contract with Lockheed Martin, where the timing and dollar value of deliverables is not always consistent, which causes revenue for this product group to fluctuate from period to period. For the fourth quarter of fiscal 2026, the revenue recognized against this contract was more than in the fourth quarter of fiscal 2025. Management expects that the engineering revenue from a current Lockheed Martin program will decline, as the program transitions from development into production, yet other new programs that are starting now will generate comparable or higher engineering services revenue.
Year ended June 30, 2026 compared to year ended June 30, 2025.
Our revenue increased by approximately 93%, for fiscal year 2026, as compared to the prior fiscal year, primarily driven by increases in infrared components and assemblies and modules. Note that fiscal 2026 includes G5 Infrared for a full year, whereas the prior year included less than five months. In addition, we acquired AML during fiscal 2026, which contributed to infrared components since acquisition in January.
Revenue generated by the infrared components product group for fiscal year 2026 was $21.2 million, an increase of approximately 52%, as compared to the prior fiscal year. Of this increase, approximately $1.3 million is due to an increase in G5 Infrared sales of coating services. AML contributed $2.2 million to the increase in sales of infrared components for fiscal year 2026. The remaining $3.8 million increase in revenue is primarily due to increases in sales to defense and industrial customers in the U.S. and Europe.
Revenue from the visible components product group for fiscal year 2026 was $15.5 million, an increase of 32%, as compared to the prior fiscal year. The increase was primarily driven by sales to industrial customers in Asia, as well as in the U.S. and Europe. In July 2026, we announced the divestiture of LPOIZ, which will reduce our revenue from visible components following the closing of the transaction, which is expected to occur in September 2026.
Revenue from assemblies and modules for fiscal year 2026 was $31.9 million, an increase of $23.5 million, or 281%, as compared to the prior fiscal year. Of this increase, approximately $23.1 million is due to an increase in G5 Infrared sales of cameras and modules, including the previously announced program with a large global technology customer as well as other defense and security customers.
Revenue from engineering services for fiscal year 2026 was nearly flat, as compared to the prior fiscal year. Revenue from Visimid’s contract with Lockheed Martin was less than in the prior fiscal year, due to timing, partially offset by a non-recurring engineering project for another defense customer. The timing and dollar value of deliverables is not always consistent, which causes revenue for this product group to fluctuate from period to period. Projects related to this product group are expected to drive sales growth in the other product groups over time, as these new products transition to from development and prototyping to production.
Inventory Levels.
We manage inventory levels to minimize investment in working capital but still have the flexibility to meet customer demand to a reasonable degree. We review our inventory for obsolete items quarterly. While the mix of inventory is an important factor, including adequate safety stocks of long lead-time materials, an important aggregate measure of inventory in all phases of production is the quarter’s ending inventory expressed as a number of days’ worth of the quarter’s cost of sales, also known as “days cost of sales in inventory,” or “DCSI.” It is calculated by dividing the quarter’s ending inventory by the quarter’s cost of goods sold, multiplied by 365 and divided by 4. Generally, a lower DCSI measure equates to a lesser investment in inventory, and, therefore, more efficient use of capital. The table below shows our DCSI for the immediately preceding eight fiscal quarters:
| Fiscal Quarter |
Ended |
DCSI (days) |
| Q4-2026 |
6/30/2026 |
128 |
| Q3-2026 |
3/31/2026 |
100 |
| Q2-2026 |
12/31/2025 |
119 |
| Q1-2026 |
9/30/2025 |
111 |
| Fiscal Year 2026 Average |
115 |
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| Q4-2025 |
6/30/2025 |
123 |
| Q3-2025 |
3/31/2025 |
178 |
| Q2-2025 |
12/31/2024 |
107 |
| Q1-2025 |
9/30/2024 |
112 |
| Fiscal Year 2025 Average |
130 |
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Our average DCSI for fiscal year 2026 was 115, compared to 130 for fiscal year 2025. The decrease in average DCSI is driven by the increase in sales, while managing inventory levels to support our growing backlog. We strive to maintain DCSI of 110 to 120 days.
Accounts Receivable Levels and Quality.
Similarly, we manage our accounts receivable to minimize investment in working capital. We measure the quality of receivables by the proportions of the total that are at various increments past due from our normally extended terms, which are generally 30 days. The most important aggregate measure of accounts receivable is the quarter’s ending balance of net accounts receivable expressed as a number of days’ worth of the quarter’s net revenues, also known as “days sales outstanding,” or “DSO.” It is calculated by dividing the quarter’s ending net accounts receivable by the quarter’s net revenues, multiplied by 365 and divided by 4. Generally, a lower DSO measure equates to a lesser investment in accounts receivable and, therefore, more efficient use of capital. The table below shows our DSO for the preceding eight fiscal quarters:
| Fiscal Quarter |
Ended |
DSO (days) |
| Q4-2026 |
6/30/2026 |
65 |
| Q3-2026 |
3/31/2026 |
51 |
| Q2-2026 |
12/31/2025 |
48 |
| Q1-2026 |
9/30/2025 |
58 |
| Fiscal Year 2026 Average |
56 |
|
| Q4-2025 |
6/30/2025 |
71 |
| Q3-2025 |
3/31/2025 |
76 |
| Q2-2025 |
12/31/2024 |
65 |
| Q1-2025 |
9/30/2024 |
56 |
| Fiscal Year 2025 Average |
67 |
|
Our average DSO for fiscal year 2026 was 56, compared to 67 for fiscal year 2025. The decrease in average DSO for fiscal year 2026 is due to higher than normal DSO in fiscal year 2025. This was due to the addition of G5 Infrared revenue, which had a higher concentration of shipments in the third month of the third and fourth fiscal quarters of 2025 which drove the accounts receivable balance up disproportionately to sales. We strive to maintain a DSO of less than 60, which we achieved for fiscal year 2026.
Other Key Indicators.
Other key indicators include various operating metrics, some of which are qualitative and others are quantitative. These indicators change from time to time as the opportunities and challenges in the business change. They are mostly non-financial indicators, such as on time delivery trends, units of shippable output by major product line, production yield rates by major product line, and the output and yield data from significant intermediary manufacturing processes that support the production of the finished shippable product. These indicators can be used to calculate such other related indicators as fully-yielded unit production per-shift, which varies by the particular product and our state of automation in production of that product at any given time. Higher unit production per shift means lower unit cost, and, therefore, improved margins or improved ability to compete where desirable for price sensitive customer applications. The data from these reports is used to determine tactical operating actions and changes. Management also assesses business performance and makes business decisions regarding our operations using certain non-GAAP measures. These non-GAAP measures are described in more detail below under the heading “Non-GAAP Financial Measures”.
Non-GAAP Financial Measures
We report our historical results in accordance with GAAP; however, our management also assesses business performance and makes business decisions regarding our operations using certain non-GAAP financial measures. We believe these non-GAAP financial measures provide useful information to management and investors that is supplementary to our financial condition and results of operations computed in accordance with GAAP; however, we acknowledge that our non-GAAP financial measures have a number of limitations. As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies use.
EBITDA and Adjusted EBITDA.
EBITDA and Adjusted EBITDA are non-GAAP financial measures used by management, lenders, and certain investors as a supplemental measure in the evaluation of some aspects of a corporation’s financial position and core operating performance. Investors sometimes use EBITDA as it allows for some level of comparability of profitability trends between those businesses differing as to capital structure and capital intensity by removing the impacts of depreciation and amortization. EBITDA also does not include changes in major working capital items, such as receivables, inventory, and payables, which can also indicate a significant need for, or source of, cash. Since decisions regarding capital investment and financing and changes in working capital components can have a significant impact on cash flow, EBITDA is not a good indicator of a business’s cash flows. We use EBITDA for evaluating the relative underlying performance of our core operations and for planning purposes. We calculate EBITDA by adjusting net income to exclude net interest expense, income tax expense or benefit, depreciation, and amortization, thus the term “Earnings Before Interest, Taxes, Depreciation and Amortization” and the acronym “EBITDA.”
We also calculate an adjusted EBITDA, which excludes: (1) stock compensation expenses; (2) the loss on extinguishment of debt; (3) the effect of the non-cash income or expense associated with the mark-to-market adjustments, related to the warrants; (4) the effect of non-cash income or expenses associated with the fair value adjustments related to the acquisition earnout liabilities; (5) acquisition costs, including legal fees and due diligence; and (6) the effect of foreign exchange gains or losses. Management uses adjusted EBITDA to evaluate our underlying operating performance and for planning and forecasting future business operations.
The fair value of the warrants was re-measured each reporting period until the warrants were reclassified from liabilities to equity as a result of the action taken at a special meeting of the stockholders on June 16, 2025. The change in the fair value of the warrants was either recognized as a non-cash expense or non-cash income each reporting period from February 18, 2025, the date of issuance, through June 16, 2025, when the liability was reclassified to equity. The change in the fair value of the warrants was not impacted by our actual operations but was instead strongly tied to the change in the market value of our Class A Common Stock. Please refer to Note 8, Stockholders’ Equity, in the Notes to the Consolidated Financial Statements in this Annual Report on Form 10-K for additional information.
We believe EBITDA and Adjusted EBITDA are helpful for investors to better understand our underlying business operations. The following table adjusts net income to EBITDA and Adjusted EBITDA for the three months and year ended June 30, 2026 and 2025:
| (unaudited) |
||||||||||||||||
| Three Months Ended June 30, |
Year Ended June 30, |
|||||||||||||||
| 2026 |
2025 |
2026 |
2025 |
|||||||||||||
| Net loss |
$ | (4,140,865 | ) | $ | (7,055,980 | ) | $ | (20,545,563 | ) | $ | (14,873,182 | ) | ||||
| Depreciation and amortization |
1,320,375 | 792,488 | 5,038,066 | 4,149,240 | ||||||||||||
| Income tax provision |
111,497 | (122,402 | ) | 314,713 | 37,790 | |||||||||||
| Interest (income) expense |
(298,238 | ) | 312,967 | (16,003 | ) | 1,118,213 | ||||||||||
| EBITDA |
$ | (3,007,231 | ) | $ | (6,072,927 | ) | $ | (15,208,787 | ) | $ | (9,567,939 | ) | ||||
| Stock-based compensation |
1,600,218 | 298,309 | 2,861,795 | 1,043,464 | ||||||||||||
| Loss on extinguishment of debt |
— | — | 506,280 | 418,502 | ||||||||||||
| Change in fair value of warrant liability |
— | 2,224,270 | — | 1,353,716 | ||||||||||||
| Change in fair value of acquisition liabilities |
3,401,807 | 1,430,000 | 15,636,336 | 1,560,445 | ||||||||||||
| Acquisition costs |
70,273 | — | 290,448 | — | ||||||||||||
| Foreign exchange loss |
30,796 | 141,583 | 146,060 | 129,882 | ||||||||||||
| Adjusted EBITDA |
$ | 2,095,863 | $ | (1,978,765 | ) | $ | 4,232,132 | $ | (5,061,930 | ) | ||||||
| % of revenue |
10 | % | -16 | % | 6 | % | -14 | % | ||||||||
Our adjusted EBITDA for the quarter ended June 30, 2026 was approximately $2.1 million, compared to a loss of $2.0 million for the same period of the prior fiscal year. The increase in adjusted EBITDA in the fourth quarter of fiscal year 2026 is primarily attributable to higher sales and gross margin, partially offset by higher SG&A costs.
Our adjusted EBITDA for fiscal year 2026 was approximately $4.2 million, compared to a loss of $5.1 million for fiscal year 2025. The increase in adjusted EBITDA for fiscal year 2026 is primarily attributable to higher sales and gross margin, partially offset by higher SG&A and new product development costs.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 reported amounts of income and expense during the reporting periods presented. Our critical estimates include the allowance for trade receivables, which is made up of allowances for credit losses, allowances for obsolete inventory, valuation of compensation expense on stock-based awards and accounting for income taxes. Although we believe that these estimates are reasonable, actual results could differ from those estimates given a change in conditions or assumptions that have been consistently applied. We also have other policies that we consider key accounting policies, such as our policy for revenue recognition, however, the application of these policies does not require us to make significant estimates or judgments that are difficult or subjective.
Management has discussed the selection of critical accounting policies and estimates with our Board, and the Board has reviewed our disclosure relating to critical accounting policies and estimates in this Annual Report on Form 10-K. The critical accounting policies used by management and the methodology for its estimates and assumptions are as follows:
Inventory obsolescence allowance is calculated by reserving 100% for items that have not been sold in two years or that have not been purchased in two years. These items, as identified, are allowed for at 100%, as well as allowing 50% for other items deemed to be slow moving within the last twelve months and allowing 25% for items deemed to have low material usage within the last six months. Items of which we have excess supply are also reserved at 25% to 100%, depending on usage rates. The parts identified are adjusted for recent order and quote activity to determine the final inventory allowance. To date, our actual results have been materially consistent with our estimates, and we expect such estimates to continue to be materially consistent in the future.
Revenue is generally recognized upon transfer of control, including the risks and rewards of ownership, of products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. The performance obligations for the sale of optical components and assemblies are satisfied at a point in time. We generally bear all costs, risk of loss, or damage and retain title to the goods up to the point of transfer of control of products to customers. Shipping and handling costs are included in the cost of goods sold. Revenues from product development agreements are recognized as performance obligations are met in accordance with the terms of the agreements and upon transfer of control of products, reports or designs to the customer. Product development agreements are generally short term in nature, with revenue recognized upon satisfaction of the performance obligation, and transfer of control of the agreed-upon deliverable. Invoiced amounts for VAT related to sales are posted to the balance sheet and are not included in revenue.
Stock-based compensation is measured at grant date, based on the fair value of the award, and is recognized as an expense over the employee’s requisite service period. We estimate the fair value of each stock option as of the date of grant using the Black-Scholes-Merton pricing model. Our directors, officers, and key employees were granted stock-based compensation through our Amended and Restated Omnibus Incentive Plan, as amended (the “Omnibus Plan”), through October 2018 and after that date, the 2018 Stock and Incentive Compensation Plan (the “SICP”). Most options granted under the Omnibus Plan and the SICP vest ratably over two to four years and generally have ten-year contract lives. The volatility rate is based on four-year historical trends in common stock closing prices and the expected term was determined based primarily on historical experience of previously outstanding options. The interest rate used is the U.S. Treasury interest rate for constant maturities. The likelihood of meeting targets for option grants that are performance based are evaluated each quarter. If it is determined that meeting the targets is probable, then the compensation expense will be amortized over the remaining vesting period.
Goodwill and amortizable intangible assets acquired in a business combination are recognized at fair value using generally accepted valuation methods. Purchased intangible assets other than goodwill are amortized over their useful lives unless these lives are determined to be indefinite. Purchased intangible assets are carried at cost, less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets, generally two to fifteen years. We periodically reassess the useful lives of intangible assets when events or circumstances indicate that useful lives have significantly changed from the previous estimate. Amortizable intangible assets consist primarily of customer relationships, developed technology and tradenames. They are generally valued as the present value of estimated cash flows expected to be generated from the asset using a risk-adjusted discount rate. When determining the fair value of our intangible assets, estimates and assumptions about future expected revenue and remaining useful lives are used. Goodwill and intangible assets are tested for impairment on an annual basis and during the period between annual tests if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable.
We assess the qualitative factors to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the goodwill impairment analysis. If we determine that it is more likely than not that its fair value is less than its carrying amount, then the goodwill impairment test is performed. The fair value of the reporting unit is compared to its carrying amount, and if the carrying amount exceeds its fair value, then an impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, up to the total amount of goodwill allocated to that reporting unit.
Accounting for income taxes requires estimates and judgments in determining income tax expense for financial statement purposes. These estimates and judgments occur in the calculation of tax credits, benefits, and deductions, and in the calculation of certain tax assets and liabilities, which arise from differences in the timing of the recognition of revenue and expense for tax and financial statement purposes. We assessed the likelihood of the realization of deferred tax assets and concluded that a valuation allowance is needed to reserve the amount of the deferred tax assets that may not be realized due to the uncertainty of the timing and amount of taxable income in certain jurisdictions. In reaching our conclusion, we evaluated certain relevant criteria, including the amount of pre-tax income generated during the current and prior two years, as adjusted for non-recurring items, the existence of deferred tax liabilities that can be used to realize deferred tax assets, the taxable income in prior carryback years in the impacted jurisdictions that can be used to absorb net operating losses and taxable income in future years. Our judgments regarding future profitability may change due to future market conditions, changes in U.S. or international tax laws and other factors. These changes, if any, may require material adjustments to these deferred tax assets, resulting in a reduction in net income or an increase in net loss in the period when such determinations are made, which, in turn, may result in an increase or decrease to our tax provision in a subsequent period.
In the ordinary course of global business, there are many transactions and calculations where the ultimate tax outcome is uncertain. Some of these uncertainties arise as a consequence of cost reimbursement and royalty arrangements among related entities, which could impact our income or loss in each jurisdiction in which we operate. Although we believe our estimates are reasonable, no assurance can be given that the final tax outcome of these matters will not be different than that which is reflected in our historical income tax provisions and accruals. In the event our assumptions are incorrect, the differences could have a material impact on our income tax provision and operating results in the period in which such determination is made. In addition to the factors described above, our current and expected effective tax rate is based on then-current tax law. Significant changes during the year in enacted tax law could affect these estimates.
Impact of recently issued accounting pronouncements that have recently been issued but have not yet been implemented by us are described in Note 2, Summary of Significant Accounting Policies, to the Notes to the Consolidated Financial Statements to this Annual Report on Form 10-K, which describes the potential impact that these pronouncements are expected to have on our financial condition, results of operations and cash flows.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
As a Smaller Reporting Company as defined in Rule 12b-2 of the Exchange Act and in item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations with respect to this item and therefore are not required to provide the information requested by this Item 7A.
Item 8. Financial Statements and Supplementary Data.
The information required by this Item is incorporated herein by reference to the consolidated financial statements and supplementary data set forth in Item 15. Exhibits, Financial Statement Schedules of Part IV of this Annual Report on Form 10-K.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
As of the end of the fiscal year ended June 30, 2026, we carried out an evaluation, under the supervision and with the participation of members of our management, including our CEO and our Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(b) of the Exchange Act. Our CEO and our CFO have concluded, based on their evaluation, that as of June 30, 2026, our disclosure controls and procedures were effective at the end of the fiscal year to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit with the SEC under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to our management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Internal control over financial reporting is a process, including policies and procedures, designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles. Our management assessed our internal control over financial reporting based on the Internal Control—Integrated Framework (2013 Framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on the results of this assessment, our management concluded that our internal control over financial reporting was effective as of June 30, 2026 based on such criteria. In accordance with guidance issued by the Securities and Exchange Commission, companies are permitted to exclude acquisitions from their final assessment of internal control over financial reporting for the first fiscal year in which the acquisition occurred. Management’s assessment of the effectiveness of our internal control over financial reporting as of June 30, 2026, excludes the internal controls of Amorphous Materials, LLC, which was acquired on January 21, 2026. The acquired business represented approximately 1% of our total assets, excluding goodwill and intangible assets, 3% of our revenue, and 1% of our net loss as of and for the fiscal year ended June 30, 2026. Management is in the process of integrating and standardizing processes for G5 Infrared to conform to LightPath’s control framework.
A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met under all potential conditions, regardless of how remote, and may not prevent or detect all errors and all fraud. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within LightPath have been prevented or detected. Our internal control over financial reporting is designed 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.
Auditor’s Report on Internal Control over Financial Reporting
This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to rules of the SEC that permit us to provide only management’s report in this Annual Report.
Changes in Internal Controls over Financial Reporting
There have not been any significant changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| (b) | During the three months ended June 30, 2026, director or officer (as defined in Rule 16a-1(f) of the Exchange Act) of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K. |
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
Item 10. Directors, Executive Officers and Corporate Governance.
The information required under this item is incorporated herein by reference to our Proxy Statement for our fiscal year 2027 Annual Stockholders’ Meeting to be filed with the SEC later than 120 days after the end of fiscal year 2026.
Item 11. Executive Compensation.
The information required under this item is incorporated herein by reference to our Proxy Statement for our fiscal year 2027 Annual Stockholders’ Meeting to be filed with the SEC later than 120 days after the end of fiscal year 2026.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The information required under this item is incorporated herein by reference to our Proxy Statement for our fiscal year 2027 Annual Stockholders’ Meeting to be filed with the SEC not later than 120 days after the end of fiscal year 2026, with the exception of those items listed below.
Securities Authorized for Issuance Under Equity Compensation Plans.
The following table sets forth information with respect to compensation plans under which our equity securities are authorized for issuance as of the end of fiscal year 2026:
| Plan category |
Number of securities to be issued upon exercise of outstanding options, warrants and rights |
Weighted average exercise and grant price of outstanding options, warrants and rights |
Number of securities remaining available for future issuance |
|||||||||
| Equity compensation plans approved by security holders |
5,990,473 | $ | 8.25 | 2,302,750 | ||||||||
| Equity compensation plans not approved by security holders |
— | — | — | |||||||||
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The information required under this item is incorporated herein by reference to our Proxy Statement for our fiscal year 2027 Annual Stockholders’ Meeting to be filed with the SEC not later than 120 days after the end of fiscal year 2026.
Item 14. Principal Accountant Fees and Services.
The information required under this item is incorporated herein by reference to our Proxy Statement for our fiscal year 2027 Annual Stockholders’ Meeting to be filed with the SEC not later than 120 days after the end of fiscal year 2026.
Item 15. Exhibits, Financial Statement Schedules.
(a) The following documents are filed as part of this Annual Report on Form 10-K:
| (1) |
Financial Statements – See Index on page F-1 of this report |
|
| (2) |
Financial Statement Schedules – None |
(b) The following exhibits are filed or furnished, as applicable, herewith as a part of this report
| 101.INS |
Inline XBRL Instance Document* |
|
| 101.SCH |
Inline XBRL Taxonomy Extension Schema Document* |
|
| 101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document* |
|
| 101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document* |
|
| 101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase Document* |
|
| 101.PRE |
Inline XBRL Taxonomy Presentation Linkbase Document* |
|
| 104 |
The cover page from the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2026, formatted in iXBRL. |
† Management contract or compensatory plan or arrangement.
*filed herewith
**furnished herewith.
None.
Index to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm
Stockholders and Board of Directors
LightPath Technologies, Inc.
Orlando, FL
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of LightPath Technologies, Inc. (the “Company”) as of June 30, 2026 and 2025, the related consolidated statements of comprehensive income (loss), changes in stockholders’ equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “Consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at June 30, 2026 and 2025, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Revenue recognition
As described in Note 4 to the consolidated financial statements, the Company’s revenues were $71.7 million for the year ended June 30, 2026. Revenue is generally recognized upon transfer of control, including the risks and rewards of ownership, of products or services to customers. The performance obligations for the sale of optical components and assemblies are satisfied at a point in time.
We identified revenue recognition from the sale of optical components and assemblies to customers as a critical audit matter as auditing these revenues was especially challenging due to the extent of audit effort required to address this matter.
The primary procedures we performed to address this critical audit matter included:
| ● | Evaluating the timing and amount of revenue recognized for a sample of revenue transactions by inspecting source documents, such as customer contracts, proof of shipment or delivery invoices, and cash receipts. |
| ● | Evaluating the completeness and accuracy of information produced by the entity. |
/s/ BDO USA, P.C.
We have served as the Company's auditor since 2025.
September 10, 2026
Consolidated Balance Sheets
| June 30, | June 30, | |||||||
| Assets | 2026 | 2025 | ||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Trade accounts receivable, net of allowance of $ and $ | ||||||||
| Inventories, net | ||||||||
| Prepaid expenses and deposits | ||||||||
| Other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right-of-use assets | ||||||||
| Intangible assets, net | ||||||||
| Goodwill | ||||||||
| Deferred tax assets, net | ||||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Accrued payroll and benefits | ||||||||
| Operating lease liabilities, current | ||||||||
| Loans payable, current portion | ||||||||
| Finance lease obligation, current portion | ||||||||
| Total current liabilities | ||||||||
| Deferred tax liabilities, net | ||||||||
| Accrued liabilities, noncurrent | ||||||||
| Finance lease obligation, less current portion | ||||||||
| Operating lease liabilities, noncurrent | ||||||||
| Loans payable, less current portion | ||||||||
| Total liabilities | ||||||||
| Commitments and Contingencies - Note 15 | ||||||||
| Series G Convertible Preferred Stock; $ par value; shares authorized; and shares issued and outstanding | $ | $ | ||||||
| Stockholders’ equity: | ||||||||
| Preferred stock: Series D, $ par value, voting; shares authorized; issued and outstanding | ||||||||
| Common stock: Class A, $ par value, voting; shares authorized; and shares issued and outstanding | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive income | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities, convertible preferred stock and stockholders’ equity | $ | $ |
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated Statements of Comprehensive Income (Loss)
| Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Revenue, net | $ | $ | ||||||
| Cost of sales | ||||||||
| Gross profit | ||||||||
| Operating expenses: | ||||||||
| Selling, general and administrative | ||||||||
| New product development | ||||||||
| Amortization of intangible assets | ||||||||
| Change in fair value of acquisition liabilities | ||||||||
| (Gain) loss on disposal of property and equipment | ( | ) | ||||||
| Total operating expenses | ||||||||
| Operating loss | ( | ) | ( | ) | ||||
| Other income (expense): | ||||||||
| Interest income (expense), net | ( | ) | ||||||
| Loss on extinguishment of debt | ( | ) | ( | ) | ||||
| Change in fair value of warrant liability | ( | ) | ||||||
| Other expense, net | ( | ) | ( | ) | ||||
| Total other income (expense), net | ( | ) | ( | ) | ||||
| Loss before income taxes | ( | ) | ( | ) | ||||
| Income tax provision | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Foreign currency translation adjustment | ||||||||
| Comprehensive loss | $ | ( | ) | $ | ( | ) | ||
| Loss per common share (basic) | $ | ( | ) | $ | ( | ) | ||
| Number of shares used in per share calculation (basic) | ||||||||
| Loss per common share (diluted) | $ | ( | ) | $ | ( | ) | ||
| Number of shares used in per share calculation (diluted) | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated Statements of Changes in Stockholders' Equity
| Temporary Equity |
Accumulated |
|||||||||||||||||||||||||||||||
| Series G Convertible |
Class A |
Additional |
Other |
Total |
||||||||||||||||||||||||||||
| Preferred Stock |
Common Stock |
Paid-in |
Comprehensive |
Accumulated |
Stockholders’ |
|||||||||||||||||||||||||||
| Shares |
Amount |
Shares |
Amount |
Capital |
Income |
Deficit |
Equity |
|||||||||||||||||||||||||
| Balances at June 30, 2024 |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||||||||||
| Issuance of preferred stock under private equity placement, net of fees |
— | — | ||||||||||||||||||||||||||||||
| Issuance of common stock for: |
||||||||||||||||||||||||||||||||
| Employee Stock Purchase Plan |
||||||||||||||||||||||||||||||||
| Exercise of stock options, RSUs & RSAs, net |
( |
) | ||||||||||||||||||||||||||||||
| Shares issued as compensation |
||||||||||||||||||||||||||||||||
| Issuance of common stock for acquisition of Visimid |
||||||||||||||||||||||||||||||||
| Issuance of common stock for acquisition of G5 |
||||||||||||||||||||||||||||||||
| Issuance of common stock under private equity placement, net of fees |
— | — | ||||||||||||||||||||||||||||||
| Issuance of warrants under private equity placement, net of fees |
— | — | ||||||||||||||||||||||||||||||
| Preferred cumulative dividends plus accretion |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||||||
| Stock-based compensation on stock options, RSUs & RSAs |
— | — | ||||||||||||||||||||||||||||||
| Reclassification of warrant liability |
— | — | ||||||||||||||||||||||||||||||
| Foreign currency translation adjustment |
— | — | ||||||||||||||||||||||||||||||
| Net loss |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||||||
| Balances at June 30, 2025 |
( |
) | ||||||||||||||||||||||||||||||
| Issuance of preferred stock under private equity placement, net of fees |
||||||||||||||||||||||||||||||||
| Issuance of common stock for: |
||||||||||||||||||||||||||||||||
| Employee Stock Purchase Plan |
||||||||||||||||||||||||||||||||
| Exercise of stock options, RSUs & RSAs, net |
||||||||||||||||||||||||||||||||
| Exercise of warrants |
( |
) | ||||||||||||||||||||||||||||||
| Issuance of common stock under private equity placement, net of fees |
||||||||||||||||||||||||||||||||
| Issuance of common stock under public equity placements, net of fees |
||||||||||||||||||||||||||||||||
| Issuance of common stock for acquisition of Visimid |
||||||||||||||||||||||||||||||||
| Issuance of common stock for acquisition of Amorphous |
||||||||||||||||||||||||||||||||
| Issuance of common stock for acquisition of G5 |
||||||||||||||||||||||||||||||||
| Conversion of Series G Preferred to Common |
( |
) | ( |
) | ||||||||||||||||||||||||||||
| Stock-based compensation on stock options, RSUs & RSAs |
— | — | ||||||||||||||||||||||||||||||
| Foreign currency translation adjustment |
— | — | ||||||||||||||||||||||||||||||
| Net loss |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||||||
| Balances at June 30, 2026 |
$ | $ | $ | $ | $ | ( |
) | $ | ||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated Statements of Cash Flows
| Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Interest from amortization of loan issuance costs | ||||||||
| Amortization of fair value of loan | ||||||||
| Loss on extinguishment of debt | ||||||||
| Change in fair value of warrant liability | ||||||||
| Change in fair value of acquisition earnout liabilities | ||||||||
| Earnout payment for acquisition of G5, net of financing portion | ( | ) | ||||||
| (Gain) loss on disposal of property and equipment | ( | ) | ||||||
| Stock-based compensation on stock options, RSUs & RSAs, net | ||||||||
| Provision for credit losses | ( | ) | ( | ) | ||||
| Change in operating lease assets and liabilities | ( | ) | ( | ) | ||||
| Inventory write-offs to allowance | ||||||||
| Deferred taxes | ( | ) | ( | ) | ||||
| Changes in operating assets and liabilities, net of acquisitions: | ||||||||
| Trade accounts receivable | ( | ) | ( | ) | ||||
| Other current assets | ( | ) | ||||||
| Inventories | ( | ) | ( | ) | ||||
| Prepaid expenses and deposits | ( | ) | ( | ) | ||||
| Accounts payable and accrued liabilities | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Proceeds from sale of equipment | ||||||||
| Acquisition of Amorphous | ( | ) | ||||||
| Acquisition of G5 Infrared | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from exercise of stock options | ||||||||
| Proceeds from sale of common stock from Employee Stock Purchase Plan | ||||||||
| Proceeds from issuance of common stock under public equity placement | ||||||||
| Proceeds from issuance of common stock under private equity placement, net of fees | ||||||||
| Proceeds from issuance of preferred stock under private equity placement, net of fees | ||||||||
| Proceeds from issuance of warrants under private equity placement, net of fees | ||||||||
| Earnout payment for acquisition of G5, net of operating portion | ( | ) | ||||||
| Deferred payment for acquisition of Visimid | ( | ) | ||||||
| Borrowings on loans payable | ||||||||
| Loan issuance costs | ( | ) | ||||||
| Payments on loans payable | ( | ) | ( | ) | ||||
| Repayment of finance lease obligations | ( | ) | ( | ) | ||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rate on cash and cash equivalents | ||||||||
| Change in cash and cash equivalents | ||||||||
| Cash and cash equivalents, beginning of period | ||||||||
| Cash and cash equivalents, end of period | $ | $ | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Interest paid in cash | $ | $ | ||||||
| Income taxes paid | $ | $ | ||||||
| Supplemental disclosure of non-cash investing & financing activities: | ||||||||
| Purchase of equipment through finance lease arrangements | $ | $ | ||||||
| Operating right-of-use assets acquired in exchange for operating lease liabilities | $ | |||||||
| Issuance of common stock for acquisition of Visimid | $ | $ | ||||||
| Issuance of common stock for acquisition of G5, including earnouts | $ | $ | ||||||
| Issuance of common stock for acquisition of AML, including earnouts | $ | |||||||
| Accrual of earnout consideration for acquisition of G5 | $ | |||||||
| Accrual of earnout consideration for acquisition of AML | $ | |||||||
| Extinguishment of debt in exchange for common stock, preferred stock, warrants and a note | $ | |||||||
The accompanying notes are an integral part of these consolidated financial statements.
LightPath Technologies, Inc. (“LightPath”, the “Company”, “we”, “us” or “our”) was incorporated in Delaware in 1992. It was the successor to LightPath Technologies Limited Partnership formed in 1989, and its predecessor, Integrated Solar Technologies Corporation formed in 1985. The Company completed its initial public offering during fiscal year 1996. On April 14, 2000, the Company acquired Horizon Photonics, Inc. (“Horizon”). On September 20, 2000, the Company acquired Geltech, Inc. (“Geltech”). In November 2005, we formed LightPath Optical Instrumentation (Shanghai) Co., Ltd (“LPOI”), a wholly-owned subsidiary located in Jiading, People’s Republic of China. In December 2013, we formed LightPath Optical Instrumentation (Zhenjiang) Co., Ltd (“LPOIZ”), a wholly-owned subsidiary located in Zhenjiang, Jiangsu Province, People’s Republic of China. Effective February 28, 2023, the legal entities of LPOI and LPOIZ were merged, with LPOIZ as the surviving company. In December 2016, we acquired ISP Optics Corporation, a New York corporation (“ISP”), and its wholly-owned subsidiary, ISP Optics Latvia, SIA, a limited liability company founded in 1998 under the Laws of the Republic of Latvia (“ISP Latvia”).
In July 2023, we acquired Liebert Consulting LLC, dba Visimid Technologies (“Visimid”). Visimid is an engineering and design firm specializing in thermal imaging, night vision and internet of things (“IOT”) applications. Visimid provides design and consulting services for Department of Defense (“DoD”) contractors, commercial and industrial customers, and original equipment manufacturers (“OEMs”) for original new products. Visimid’s core competency is developing and producing custom thermal and night vision cores. We believe that Visimid’s capabilities are aligned with our strategy to focus on engineered solutions. Visimid’s facility is located in Plano, Texas.
In February 2025, we acquired G5 Infrared LLC, a New Hampshire limited liability company (“G5 Infrared”). G5 Infrared is a vertically-integrated manufacturer of infrared camera systems and imaging solutions, specializing in advanced thermal imaging technology and long-range mission-critical detection solutions. G5 Infrared’s existing revenue and future growth pipeline are driven by established multi-year contracts and multiple defense programs of record in shipboard long-range surveillance, border security, and counter unmanned aerial systems (“C-UAS”) systems, as well as recurring federal, naval, and law enforcement programs. Additionally, G5 Infrared is a provider of infrared coatings, including for materials such as LightPath’s BlackDiamond (“BlackDiamond”) glass. G5 Infrared operates from a manufacturing facility in Hudson, New Hampshire. We believe that this acquisition strengthens LightPath’s position as a leader in infrared imaging by expanding the Company’s portfolio to include cooled infrared cameras. Management believes that the combination of LightPath and G5 Infrared creates a more robust, vertically-integrated solutions provider.
In January 2026, we acquired the assets of Amorphous Materials, Inc. through our newly-formed, wholly-owned subsidiary, Amorphous Materials LLC (“AML”). AML specializes in infrared glass fabrication, and operates from a manufacturing facility in Garland, Texas. We believe that this acquisition further strengthens LightPath's position as a leader in infrared imaging by expanding our materials portfolio and glass fabrication capabilities.
As used herein, the terms “LightPath,” the “Company,” “we,” “us” or “our,” refer to LightPath individually or, as the context requires, collectively with its subsidiaries on a consolidated basis.
2. Significant Accounting Policies
Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.
Management estimates. Management makes estimates and assumptions during the preparation of the Company’s Consolidated Financial Statements that affect amounts reported in the Consolidated Financial Statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes available, which, in turn, could impact the amounts reported and disclosed herein.
Cash and cash equivalents consist of cash in the bank and cash equivalents with maturities of 90 days or less when purchased. The Company maintains its cash accounts in various institutions, generally with high credit ratings. The Company’s domestic cash accounts are maintained in several financial institutions, and balances may exceed Federal insured limits at times. The Company’s foreign cash accounts are not insured.
Allowance for credit losses is based on the best estimate of the amount of probable credit losses in existing accounts receivable. The Company determines the allowance based on historical write-off experience and expected future default probabilities based on our ongoing evaluations of our customers’ financial condition. The allowance consists of an amount identified for specific customers and an amount based on overall estimated exposure. Accounts receivable are customer obligations due under normal trade terms, which are generally net 30 days. If the Company’s actual collection experience changes, revisions to its allowance may be required. After all attempts to collect a receivable have failed, the receivable is written off against the allowance.
Inventories, which consist principally of raw materials, tooling, work-in-process and finished lenses, collimators and assemblies, are stated at the lower of cost or net realizable value, on a first-in, first-out basis. Inventory costs include materials, labor and manufacturing overhead. Acquisition of goods from our vendors has a purchase burden added to cover customs, shipping and handling costs. Fixed costs related to excess manufacturing capacity are expensed when incurred. The Company looks at the following criteria for parts to consider for the inventory allowance: (i) items that have not been sold in two years and (ii) items that have not been purchased in two years. These items, as identified, are allowed for at 100%, as well as allowing 50% for other items deemed to be slow moving within the last twelve months and allowing 25% for items deemed to have low material usage within the last six months. Items of which we have excess supply are also reserved at 25% to 100%, depending on usage rates. The parts identified are adjusted for recent order and quote activity to determine the final inventory allowance.
Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the related assets ranging from to years. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful lives of the related assets using the straight-line method. Construction in process represents the accumulated costs of assets not yet placed in service.
Long-lived assets, such as property, plant, and equipment and purchased intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to its estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. The Company did record any impairment of long-lived assets during the fiscal years ended June 30, 2026 and 2025. Assets to be disposed of would be separately presented in the Consolidated Balance Sheet and reported at the lower of the carrying amount or fair value less costs to sell and would no longer be depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the Consolidated Balance Sheet.
Goodwill and amortizable intangible assets acquired in a business combination are recognized at fair value using generally accepted valuation methods. Purchased intangible assets other than goodwill are amortized over their useful lives unless these lives are determined to be indefinite. Purchased intangible assets are carried at cost, less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets, generally to years. The Company periodically reassesses the useful lives of its intangible assets when events or circumstances indicate that useful lives have significantly changed from the previous estimate. Amortizable intangible assets consist primarily of customer relationships, developed technology and tradenames. When determining the fair value of our intangible assets, estimates and assumptions about future expected revenue and remaining useful lives are used.
Goodwill is tested for impairment on an annual basis, as of each fiscal year end, and during the period between annual tests if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. The Company may assess goodwill for impairment using either a qualitative or quantitative approach. The qualitative approach consists of a weighting of several qualitative factors, including, but not limited to, macroeconomic conditions (including global trade factors), industry and market considerations, the recent and projected financial performance of the reporting unit, changes in the Company's enterprise market value and other relevant factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount, including goodwill. This assessment may require significant judgments, including the estimation of future cash flows and an assessment of market and industry dependent risks. If the Company determines the qualitative factors indicate that the fair value of the reporting unit is greater than its carrying amount, a quantitative goodwill impairment test is not necessary. If the Company determines that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, then the quantitative goodwill impairment test is performed. Impairment loss is recorded to the extent that the carrying value of the reporting unit exceeds its assessed fair value, not to exceed the carrying value of the goodwill of the reporting unit. The Company reviews its amortizable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When evaluating amortizable intangible assets for potential impairment, the Company first determines if there are any indicators of impairment and if the carrying amount of the amortizable intangible assets might not be recoverable. If there are indicators of impairment, then the Company performs a recoverability test by comparing the carrying value of the assets to the estimated future undiscounted cash flows. If the estimated undiscounted cash flows are less than the carrying value of the assets, the Company calculates an impairment loss. The impairment loss calculation compares the carrying value of its assets to the assets’ estimated fair value. The Company did record any impairment of goodwill or amortizable intangible assets during the fiscal years ended June 30, 2026 or 2025.
Leases. The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities and operating lease liabilities on the Company’s Consolidated Balance Sheet. Finance leases are included in property, plant and equipment, current portion of long-term debt and long-term debt, net of current portion on the Consolidated Balance Sheets.
Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, the Company uses an estimate of its incremental borrowing rate based on observed market data and other information available at the lease commencement date. The operating lease ROU assets also include any lease payments made and exclude lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. The Company does not record leases on the Consolidated Balance Sheet with an initial term of one year or less. The Company does not separate lease and non-lease components but rather accounts for each separate component as a single lease component for all underlying classes of assets. Variable lease payments are expensed as incurred and are not included within the operating lease ROU asset and lease liability calculation. Variable lease payments primarily include reimbursements of costs incurred by lessors for common area maintenance and utilities. Lease expense for minimum operating lease payments is recognized on a straight-line basis over the lease term.
Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are computed on the basis of differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based upon enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances have been established to reduce deferred tax assets to the amount expected to be realized.
The Company has recognized a liability for uncertain tax positions. A reconciliation of the beginning and ending amount of unrecognized tax benefits or penalties has not been provided since there has been no unrecognized benefit or penalty. If there were an unrecognized tax benefit or penalty, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.
The Company files United States (“U.S.”) Federal income tax returns, as well as tax returns in various states and foreign jurisdictions. Open tax years subject to examination by the Internal Revenue Service (“IRS”) generally remain open for three years from the filing date. Tax years subject to examination by the state jurisdictions generally remain open for up to four years from the filing date. In Latvia, tax years subject to examination remain open for up to five years from the filing date and, in China, tax years subject to examination remain open for up to ten years from the filing date.
Our cash and cash equivalents totaled approximately $
With respect to the funds generated by our foreign subsidiaries in China, the retained earnings of the legal entity must equal at least 50% of the registered capital before any funds can be repatriated. During fiscal years 2026 and 2025, we repatriated approximately $
Beginning in fiscal year 2019, earnings from the Company’s non-U.S. subsidiaries were subject to the global intangible low-taxed income (“GILTI”) inclusion pursuant to U.S. income tax rules. See Note 9, Income Taxes, to these Consolidated Financial Statements for additional information.
Revenue recognition – See Note 4, Revenue, to these Consolidated Financial Statements for additional information.
Cost of goods sold consists primarily of raw materials and purchased components, direct manufacturing labor, and allocated manufacturing overhead. Manufacturing overhead includes production-related personnel costs, facility and equipment costs, depreciation, quality assurance, procurement, production control, and manufacturing engineering costs. Cost of goods sold also includes provisions for excess and obsolete inventory and inventory valuation adjustments are expensed as incurred.
VAT is computed on the gross sales price on all sales of the Company’s products sold in the People’s Republic of China and Latvia. The VAT rates range up to
New product development costs are expensed as incurred.
Stock-based compensation is measured at grant date, based on the fair value of the award, and is recognized as an expense over the employee’s requisite service period. We estimate the fair value of each restricted stock unit or stock option as of the date of grant using the Black-Scholes-Merton pricing model. Our directors, officers, and key employees were granted stock-based compensation through our Amended and Restated Omnibus Incentive Plan, as amended (the “Omnibus Plan”), through October 2018 and after that date, the 2018 Stock and Incentive Compensation Plan (the “SICP”). Most options granted under the Omnibus Plan and the SICP vest ratably over to years and generally have -year contract lives. The volatility rate is based on historical trends in common stock closing prices and the expected term was determined based primarily on historical experience of previously outstanding awards. The interest rate used is the U.S. Treasury interest rate for constant maturities. The likelihood of meeting targets for option grants that are performance based are evaluated each quarter. If it is determined that meeting the targets is probable, then the compensation expense will be amortized over the remaining vesting period.
Fair value of financial instruments. The Company accounts for financial instruments in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”), which provides a framework for measuring fair value and expands required disclosure about fair value measurements of assets and liabilities. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:
Level 1 - Quoted prices in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable.
Level 3 - Unobservable inputs that are supported by little or no market activity, therefore requiring an entity to develop its own assumptions about the inputs that market participants would use in pricing.
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management.
The respective carrying value of accounts receivable, accounts payable and accrued liabilities recorded on the Consolidated Balance Sheets approximated their fair values. Fair values were assumed to approximate carrying values for these financial instruments since they are short term in nature and they are receivable or payable on demand.
The fair value of the Company’s finance lease obligations and equipment loans payable approximate their carrying values, based upon current rates available to us.
The Company valued certain financial instruments issued in connection with the acquisition of G5 Infrared using Level 3 fair value measurements, including warrants, Series G Convertible Preferred stock and the Acquisition Notes (as defined below). See Note 8, Stockholders’ Equity, to these Consolidated Financial Statements for additional information regarding the valuation of the acquisition financing.
In connection with the acquisitions of G5 Infrared and AML, the Company also valued the earnout liabilities and the intangible assets acquired using Level 3 fair value methods. See Note 3, Acquisitions, to these Consolidated Financial Statements for additional information.
Other than as disclosed above, the Company does not have any other financial or non-financial assets or liabilities that would be characterized as Level 1, Level 2 or Level 3 instruments.
Debt issuance costs are recorded as a reduction to the carrying value of the related notes payable, by the same amount, and are amortized ratably over the term of the related note.
Comprehensive income (loss) is defined as the change in equity (net assets) of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. It includes all changes in equity during a period, except those resulting from investments by owners and distributions to owners. Comprehensive income (loss) has two components, net income, and other comprehensive income (loss), and is included on the Consolidated Statements of Comprehensive Income (Loss). Our other comprehensive income consists of foreign currency translation adjustments made for financial reporting purposes.
Business segments. The Company operates principally in reportable business segment. See Note 17, Segment Reporting, to these Consolidated Financial Statements for additional information.
Recent accounting pronouncements
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”) which requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses included in each expense caption on the face of the income statement at interim and annual reporting periods. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, and should be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements. We are evaluating the impact of ASU 2024-03 and expect the standard will only impact our disclosures with no material impact on our operating results, financial position, or cash flows.
There are no other new accounting pronouncements issued by the FASB that are not yet effective for the Company for the year ended June 30, 2026 that are expected to have a material impact on the Consolidated Financial Statements.
Recently Adopted Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”) which requires disaggregated income tax disclosures on an annual basis, including information on our effective income tax rate reconciliation and income taxes paid. The Company adopted ASU 2023-09 effective July 1, 2025, and applied the guidance on a prospective basis. The adoption of ASU 2023-09 did not have a material impact on the Company’s consolidated financial statements, but resulted in expanded income tax disclosures.
3. Acquisitions
On January 20, 2026, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”), by and among the Company, AML, a Delaware limited liability company and wholly-owned subsidiary of the Company (“Buyer”), Amorphous Materials, Inc., a Texas corporation (“Seller”) and other parties thereto, pursuant to which, subject to the terms and conditions set forth in the Asset Purchase Agreement, Buyer agreed to acquire substantially all of the assets (collectively, the “Assets”) and assume and acquire certain of the rights and liabilities of Seller (collectively, the “Liabilities” and such acquisition of Assets and assumption of the Liabilities together, the “Transaction”) relating to Seller’s business of compounding and melting a broad range of Chalcogenide glasses for third-party manufacturers. The Transaction closed on January 21, 2026 (the “AML Acquisition Date”).
Aggregate consideration payable by the Company to Seller under the Asset Purchase Agreement in connection with the Transaction will not exceed $
We accounted for the acquisition of AML using the acquisition method of accounting, which required us to measure identifiable assets acquired and liabilities assumed in the acquiree at their fair values as of the AML Acquisition Date, with the excess of the consideration transferred over those fair values recorded as goodwill.
As of January 20, 2026, Seller satisfied the first milestone contemplated by the Contingent Consideration Payments and received an aggregate of
As of the AML Acquisition Date, the preliminary fair value of the aggregate consideration was approximately $
| January 21, | ||||
| Description | 2026 | |||
| Cash consideration | $ | |||
| Net working capital adjustment | ( | ) | ||
| Equity portion of consideration | ||||
| Earnout portion of consideration | ||||
| Selling expense at closing | ||||
| Fair value of consideration transferred | $ | |||
We determined the fair value of assets acquired and liabilities assumed by using available market information and various valuation methods that require judgement related to estimates. Our preliminary fair value estimates and assumptions to measure the assets acquired and liabilities assumed were subject to change as we obtained additional information during the measurement period. We completed our accounting for the acquisition during the fiscal quarter ended June 30, 2026. The following table summarizes the allocation of the fair value of consideration transferred to assets acquired and liabilities assumed as of the AML Acquisition Date and the adjustments recognized during the measurement period:
| Preliminary as of | Measurement | |||||||||||
| January 21, | Period | Final as of | ||||||||||
| Description | 2026 | Adjustments, Net | June 30, 2026 | |||||||||
| Assets: | ||||||||||||
| Accounts receivable | $ | $ | — | $ | ||||||||
| Inventory | — | |||||||||||
| Property and equipment | — | |||||||||||
| Goodwill | — | |||||||||||
| Other intangible assets | — | |||||||||||
| Total assets acquired | $ | $ | — | $ | ||||||||
| Liabilities: | ||||||||||||
| Accounts payable | — | |||||||||||
| Accrued liabilities | ( | ) | ||||||||||
| Current deposits | — | |||||||||||
| Total liabilities assumed | $ | $ | ( | ) | $ | |||||||
| Net assets acquired | $ | $ | $ | |||||||||
Measurement period adjustments include fair value adjustments during the fiscal quarter ended June 30, 2026, related to accrued liabilities for employee benefits. The net impact of the aforementioned adjustments were offset by a net working capital adjustment, resulting on
Intangible assets – All intangible assets acquired in the acquisition of AML are subject to amortization. The fair value of identifiable intangible assets acquired as of the AML Acquisition Date is as follows:
| Useful Lives | ||||||||
| Intangible Asset | Total | (Years) | ||||||
| Backlog | $ | |||||||
| Developed technology | ||||||||
| Tradename | ||||||||
| Customer relationships | ||||||||
| Total | $ | |||||||
Goodwill – The $
The Company’s Consolidated Financial Statements reflect the financial results of AML beginning on the AML Acquisition Date. Revenue generated by AML from the AML Acquisition date through June 30, 2026 is approximately $
For the year ended June 30, 2026, we incurred approximately $
Unaudited consolidated pro forma information is provided below, in combination with the acquisition of G5 Infrared.
G5 Infrared
On February 18, 2025 (the “G5 Acquisition Date”), the Company acquired G5 Infrared pursuant to a Membership Interest Purchase Agreement (the “G5 MIPA”) by and among the Company, G5 Infrared, the G5 Infrared members through the purchase from the members thereof of all of the issued and outstanding membership interests of G5 Infrared (collectively, the “Sellers”), and Kenneth R. Greenslade, solely in his capacity as Sellers’ Representative.
G5 Infrared is a vertically-integrated manufacturer of infrared camera systems and imaging solutions, and also provides infrared coatings. G5 Infrared operates from a manufacturing facility in Hudson, New Hampshire. The Company acquired G5 Infrared to expand the Company’s portfolio to include cooled infrared cameras.
Net assets and results of operations of G5 Infrared are reflected in our financial results commencing on the G5 Acquisition Date. Revenue generated by G5 Infrared is included in our infrared and assemblies and modules product groups.
We accounted for the acquisition of G5 Infrared using the acquisition method of accounting, which required us to measure identifiable assets acquired and liabilities assumed in the acquiree at their fair values as of the G5 Acquisition Date, with the excess of the consideration transferred over those fair values recorded as goodwill.
The fair value of the aggregate consideration was approximately $
| February 18, | ||||
| Description | 2025 | |||
| Cash consideration | $ | |||
| Net working capital adjustment | ( | ) | ||
| Equity portion of consideration | ||||
| Earnout portion of consideration | ||||
| Revenue clawback | ( | ) | ||
| Fair value of consideration transferred | $ | |||
The fair value of the equity portion of the consideration was determined by multiplying the number of shares issued,
Earnout payments of an aggregate of up to $
During the year ended June 30, 2026, the first earnout period ended and based on the targets achieved, the first earnout payment was made to the G5 Sellers for $
We determined the fair value of assets acquired and liabilities assumed by using available market information and various valuation methods that require judgement related to estimates. Our preliminary fair value estimates and assumptions to measure the assets acquired and liabilities assumed were subject to change as we obtained additional information during the measurement period. We completed our accounting for the acquisition during the fiscal quarter ended June 30, 2025. The following table summarizes the allocation of the fair value of consideration transferred to assets acquired and liabilities assumed as of the G5 Acquisition Date and the adjustments recognized during the measurement period:
| Measurement | ||||||||||||
| Preliminary as of | Period | Final as of | ||||||||||
| Description | March 31, 2025 | Adjustments, Net | June 30, 2025 | |||||||||
| Assets: | ||||||||||||
| Accounts receivable | $ | $ | — | $ | ||||||||
| Inventory | — | |||||||||||
| Prepaid expenses and other current assets | — | |||||||||||
| Property and equipment | — | |||||||||||
| Operating lease right-of-use asset | — | |||||||||||
| Goodwill | ||||||||||||
| Other intangible assets | ( | ) | ||||||||||
| Other assets | — | |||||||||||
| Total assets acquired | $ | $ | ( | ) | $ | |||||||
| Liabilities: | ||||||||||||
| Accounts payable | — | |||||||||||
| Accrued liabilities | — | |||||||||||
| Operating lease liabilities, current | — | |||||||||||
| Deferred tax liabilities, noncurrent | ( | ) | ||||||||||
| Operating lease liabilities, noncurrent | — | |||||||||||
| Total liabilities assumed | $ | $ | ( | ) | $ | |||||||
| Net assets acquired | $ | $ | ( | ) | $ | |||||||
Measurement period adjustments include fair value adjustments during the fiscal quarter ended June 30, 2025, primarily related to refined assumptions in the valuation of the earnout consideration, and intangible assets such as backlog, customer relationships and developed technology intangible assets. Deferred tax liabilities were adjusted for the revised intangible asset values, and for the refined tax rate apportionment calculation. The net impact of the aforementioned adjustments resulted in an increase to goodwill.
Intangible assets –All intangible assets acquired in the acquisition of G5 Infrared are subject to amortization. The fair value of identifiable intangible assets acquired as of the G5 Acquisition Date is as follows:
| Useful Lives | ||||||||
| Intangible Asset | Total | (Years) | ||||||
| Backlog | $ | |||||||
| Developed technology | ||||||||
| Tradename | ||||||||
| Customer relationships | ||||||||
| Total | $ | |||||||
The fair value of intangible assets is estimated using the multi-period excess earnings approach for acquired customer relationships and the relief from royalty method for the acquired trade names and developed technology. All of these level 3 fair value methods are income-based valuation approaches, which require judgment to estimate appropriate discount rates, revenue forecasts, useful lives, royalty rates related to the tradenames and developed technology intangible assets, and profitability assumptions related to customer relationships. The acquired intangible assets are not expected to be deductible for New Hampshire state income tax purposes, which resulted in a deferred tax liability of $
Goodwill – The $
Acquisition costs have been expensed as incurred. In connection with the acquisition of G5 Infrared, we recorded acquisition costs of $
Unaudited supplemental pro forma information
The following table presents unaudited pro forma financial results of the operations acquired with G5 Infrared and AML. The pro forma results include adjustments to remove costs directly attributable to the acquisition, such as transaction-related costs and the loss on extinguishment of debt (as described in Note 14, Loans Payable, to these Consolidated Financial Statements). The pro forma results were prepared as if the acquisition of G5 Infrared was completed on the first day of our fiscal 2024, July 1, 2023, and as if the acquisition of AML was completed on the first day of our fiscal year 2025, July 1, 2024. The pro forma results do not include any integration synergies and are not necessarily indicative of our results of operations that actually would have been obtained had the acquisition of G5 Infrared been completed for the period presented, or which may be realized in the future.
| Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Revenue | $ | $ | ||||||
| Income before taxes | $ | ( | ) | $ | ( | ) | ||
Vismid Technologies
In July 2023, the Company acquired Visimid. The purchase price included certain installment payments of restricted stock, of which
4. Revenue
Product Revenue
The Company manufactures infrared imaging cameras, optical assemblies, optical components and infrared materials. Optical components include precision molded glass aspheric optics, molded and diamond-turned infrared aspheric lenses, and other optical elements produced using other fabrication techniques. The Company designs, develops, manufactures, and distributes optical systems, assemblies and components utilizing advanced optical manufacturing processes, multidisciplinary engineering and manufacturing technologies, and assembly and integration services. The Company also provides engineering services and performs research and development for optical solutions for a wide range of optics markets.
Revenue Recognition
Revenue is generally recognized upon transfer of control, including the risks and rewards of ownership, of products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company generally bears all costs, risk of loss, or damage and retains title to the goods up to the point of transfer of control of products to customers. Shipping and handling costs are included in the cost of goods sold. Revenue is presented net of sales taxes and any similar assessments.
Customary payment terms are granted to customers, based on credit evaluations. The Company does not have any contracts where revenue is recognized, but the customer payment is contingent on a future event. Deferred revenue is recorded when cash payments are received or due in advance of the Company’s performance. Deferred revenue was $
Nature of Products
Revenue from the sale of optical components, assemblies and modules is recognized upon transfer of control, including the risks and rewards of ownership, to the customer. The performance obligations for the sale of optical components and assemblies are satisfied at a point in time. Product development agreements for engineering services are generally short-term in nature, with revenue recognized upon satisfaction of the performance obligation, and transfer of control of the agreed-upon deliverable. Visimid has one longer-term order with a defense customer which includes both product development and hardware deliverables where similar revenue recognition criteria are applied.
We categorize our products into four product groups: (i) infrared components, (ii) visible components, (iii) assemblies and modules, and (iv) engineering services.
Revenue by product group for the fiscal years ended June 30, 2026 and 2025 was as follows, with certain fiscal year 2025 amounts reclassified from infrared components to assemblies and modules to conform to current classification:
| Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Infrared components | $ | $ | ||||||
| Visible components | ||||||||
| Assemblies and modules | ||||||||
| Engineering services | ||||||||
| Total revenue | $ | $ | ||||||
5. Inventories, net
The components of inventories include the following:
| June 30, | June 30, | |||||||
| 2026 | 2025 | |||||||
| Raw materials | $ | $ | ||||||
| Work in process | ||||||||
| Finished goods | ||||||||
| Allowance for obsolescence | ( | ) | ( | ) | ||||
| $ | $ | |||||||
During fiscal years 2026 and 2025, the Company evaluated all allowed items and disposed of approximately $
The value of tooling in raw materials, net of the related allowance for obsolescence, was approximately $
6. Property and Equipment, net
Property and equipment consist of the following:
| Estimated Lives | June 30, | June 30, | |||||||||
| (Years) | 2026 | 2025 | |||||||||
| Manufacturing equipment | $ | $ | |||||||||
| Computer equipment and software | |||||||||||
| Furniture and fixtures | |||||||||||
| Leasehold improvements | |||||||||||
| Construction in progress | |||||||||||
| Total property and equipment | |||||||||||
| Less accumulated depreciation and amortization | ( | ) | ( | ) | |||||||
| Total property and equipment, net | $ | $ | |||||||||
Depreciation and amortization expense related to property and equipment was $
7. Goodwill and Intangible Assets
In connection with various acquisitions, the Company identified intangible assets, which were recorded at fair value and are being amortized on a straight-line basis over their useful lives. The excess purchase price over the fair values of all identified assets and liabilities was recorded as goodwill, attributable primarily to expected synergies and the assembled workforce of the respective companies. See Note 3, Acquisitions, to these consolidated financial statements, for more information.
Changes in the carrying amount of goodwill were as follows:
| Balance as of June 30, 2024 | $ | |||
| Goodwill acquired during the year | ||||
| Balance as of June 30, 2025 | ||||
| Goodwill acquired during the year | ||||
| Balance as of June 30, 2026 | $ |
We assess goodwill for impairment annually during the fourth quarter or under certain circumstances more frequently, such as when events or circumstances indicate there may be impairment. The Company performed a qualitative assessment during its fourth quarter in 2026 and determined it was not more likely than not that goodwill was impaired. The Company did not record any impairment of goodwill or amortizable intangible assets during the fiscal years ended June 30, 2026 or 2025.
Intangible assets were comprised of the following:
| Useful Lives | June 30, 2026 | June 30, 2025 | |||||||||||||||||||||||||
| (Years) | Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | |||||||||||||||||||||
| Customer relationships | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | |||||||||||||||||
| Developed technology | ( | ) | ( | ) | |||||||||||||||||||||||
| Tradenames | ( | ) | ( | ) | |||||||||||||||||||||||
| Backlog | ( | ) | ( | ) | |||||||||||||||||||||||
| Total intangible assets | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | |||||||||||||||||
Future amortization of identifiable intangible assets is as follows:
| Fiscal year ending: | ||||
| June 30, 2027 | $ | |||
| June 30, 2028 | ||||
| June 30, 2029 | ||||
| June 30, 2030 | ||||
| June 30, 2031 | ||||
| After June 30, 2031 | ||||
| $ |
8. Stockholders’ Equity
Effective January 31, 2024, the Company’s authorized capital stock increased from
Of the
| ● | | |
| ● | | |
| ● | | |
| ● | | |
| ● | | |
| ● | |
Of the
Acquisition Financing
In conjunction with the financing of the acquisition of G5 Infrared, the Company designated a new series of preferred stock, Series G Convertible Preferred Stock, which is convertible into shares of Class A Common Stock. Concurrent with the entry into the G5 MIPA on February 13, 2025, we entered into (i) a Securities Purchase Agreement (the “Securities Purchase Agreement”) by and among the Company and North Run Capital, AIGH Investment Partners, LP, WVP Emerging Manager Offshore Fund LLC, the Lytton-Kambara Foundation and Alice W. Lytton Family LLC (collectively, the “Series G Purchasers”), (ii) a Class A Common Securities Purchase Agreement (the “Class A SPA”) by and between the Company and Lytton-Kambara Foundation (the “Class A Purchaser”), and (iii) and two senior secured promissory notes in an aggregate principal amount of $
At the closing of the Securities Purchase Agreement, the Company and the Series G Purchasers entered into a registration rights agreement, pursuant to which the Company agreed to register the shares of Class A Common Stock issuable upon the conversion of the Series G Convertible Preferred Stock (including those shares of Series G Convertible Preferred Stock that are issuable upon the conversion of the Acquisition Notes) and the Series G Purchasers Warrants (collectively, the “Registrable Securities”) under the Securities Act of 1933, as amended. The Company filed a registration statement covering the resale of such Registrable Securities on May 2, 2025, which became effective on May 12, 2025.
On June 16, 2025, the Company’s stockholders approved a proposal authorizing the issuance of shares of Class A Common Stock upon the conversion of the Series G Convertible Preferred Stock or the Series G Purchasers Warrants to the extent such issuances would result in an aggregate number of shares of Class A Common Stock exceeding
On February 13, 2025, the Company also entered into the Class A SPA with the Class A Purchaser, pursuant to which the Class A Purchaser purchased from the Company: (i)
The aggregate gross proceeds of $
Warrants – The Company issued
The Series G Purchasers Warrants were initially not indexed to the Company’s own stock due to the Exchange Cap, as shareholder approval is not an input for determining the fair value of a fixed-for-fixed option on the Class A Common Stock. As such, the Series G Purchasers Warrants were initially classified as liabilities on the Consolidated Balance Sheets, with subsequent changes in the fair value of the warrant recorded in the change in fair value of warrant liability in other income (expense) in the Consolidated Statements of Comprehensive Income (Loss). On June 16, 2025, the Purchasers Warrants were reclassified from liabilities to equity as a result of the action taken at a special meeting of the stockholders, which removed the Exchange Cap. The Class A Purchaser’s Warrants are indexed to the Company's own stock, and meet the criteria for equity classification. The Warrants are valued using the Black-Scholes-Merton pricing model, which includes assumptions of expected volatility.
During the year ended June 30, 2026, all Series G Purchasers Warrants and Class A Purchaser's Warrants were exercised, by means of "cashless exercise" as defined in the respective warrant agreements. As of June 30, 2026, no warrants were outstanding.
Series G Convertible Preferred Stock – Based on an analysis of the Series G Convertible Preferred Stock, it was concluded that they are more akin to an equity-type instrument. Economic characteristics and risks of an equity-linked conversion option are clearly and closely related to an equity-type host; thus, the conversion option embedded in the Series G Convertible Preferred Stock do not require bifurcation or liability classification under ASC 815, Derivatives and Hedging. It also does not meet the definition of being mandatorily redeemable under ASC 480-10-20 because it does not embody an unconditional obligation to redeem the instrument. The Series G Convertible Preferred Stock is redeemable at the option of the holder after the 5 year Guaranteed Term, thus, it should be classified as mezzanine equity, outside of permanent equity. The Series G Convertible Preferred Stock was valued using a Binomial Lattice Model which considers the ability of the Investor to convert the instrument into common stock at any time, and for the Company's call option and the Investor's put option which are available after 5 years. The model incorporates transaction details such as stock price, contractual conversion price, dividend yield, discount rates, expected volatility, market credit spread, estimated yield and investor exercise behavior. The Series G Convertible Preferred Stock bears dividends at a per annum rate of
During the year ended June 30, 2026, certain holders of Series G Convertible Preferred Stock elected "optional conversion," as defined in the certificate of designations. A total of
Promissory Notes – The Acquisition Notes are convertible into shares of Series G Convertible Preferred Stock limited to failure to achieve a certain EBITDA threshold, and were recorded at fair value based on several probability weighted Binomial Lattice Models which considered the following outcomes: (i) the Company's EBITDA for the year ended December 31, 2025 would be less than approximately $
Offering costs – The $
Offerings of Common Stock
On December 12, 2025, we entered into an underwriting agreement (the “Underwriting Agreement”) with Canaccord Genuity LLC and Craig-Hallum Capital Group LLC, as representatives of the several underwriters named therein (the “Underwriters”), relating to an underwritten public offering (the “December Offering”) of
On June 1, 2026, we entered into a securities purchase agreement with a selling stockholder, North Run Strategic Opportunities Fund I, LP (“North Run”) and certain institutional investors for the purchase and sale of an aggregate of
9. Income Taxes
For financial reporting purposes, income (loss) before income taxes includes the following components:
| Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Pretax income (loss): | ||||||||
| United States | $ | ( | ) | $ | ( | ) | ||
| Foreign | ( | ) | ||||||
| Loss before income taxes | $ | ( | ) | $ | ( | ) | ||
The components of the provision for income taxes are as follows:
| Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Current: | ||||||||
| Federal tax | $ | $ | ||||||
| State | ||||||||
| Foreign | ||||||||
| Total current | ||||||||
| Deferred: | ||||||||
| Federal tax | ( | ) | ||||||
| State | ( | ) | ( | ) | ||||
| Foreign | ( | ) | ||||||
| Total deferred | ( | ) | ||||||
| Total income tax provision | $ | $ | ||||||
The table below provides the updated requirements of ASU 2023-09 for the year ended June 30, 2026. See section Recent Accounting Pronouncements for additional details on the adoption of ASU 2023-09.
The reconciliation of income tax computed at the U.S. federal statutory rates to the total income tax provision is as follows:
| Year Ended June 30, 2026 | ||||||||
| Amount | Percent | |||||||
| Current tax at statutory rate | $ | ( | ) | % | ||||
| State income taxes, net of federal benefit (1) | ( | ) | % | |||||
| Foreign tax effects | ||||||||
| Latvia - statutory rate differences | ( | ) | % | |||||
| Other foreign tax effects | ( | )% | ||||||
| Effect of cross-border tax law | ||||||||
| GILTI | ( | )% | ||||||
| Tax credits | ||||||||
| Federal research and development credit expiration | ( | )% | ||||||
| Changes in valuation allowance | ( | )% | ||||||
| Nondeductible/nontaxable items | ( | )% | ||||||
| NOL expiration and adjustments | ( | )% | ||||||
| Other adjustments | ( | )% | ||||||
| $ | ( | )% | ||||||
| (1) | The states that contribute to the majority (greater than 50%) of the tax impact in this category include New Hampshire for 2026. |
As previously disclosed for the year ended June 30, 2025, prior to the adoption of ASU 2023-09, the reconciliation of income tax computed at the U.S. federal statutory rates to the total income tax provision is as follows:
| Year Ended June 30, 2025 | ||||
| U.S. federal statutory tax rate | % | |||
| Income tax provision reconciliation: | ||||
| Tax at statutory rate: | $ | ( | ) | |
| Net foreign income subject to lower tax rate | ( | ) | ||
| State income taxes, net of federal benefit | ( | ) | ||
| Valuation allowance | ||||
| NOL expiration and adjustments | ||||
| GILTI | ||||
| Federal research and development credit expiration | ||||
| Federal research and development and other credits | ( | ) | ||
| Rate change | ||||
| Stock-based compensation | ( | ) | ||
| Other permanent differences | ||||
| Acquisition financing | ||||
| Prior year true-ups | ||||
| $ | ||||
Cash Paid for Income Taxes
Cash taxes paid by the Company during the year ended June 30, 2026 were as follows:
| Year Ended June 30, 2026 | ||||
| Federal tax | $ | |||
| State: | ||||
| New Hampshire | ||||
| Other states | ||||
| Total state | ||||
| Foreign: | — | |||
| China income tax | ||||
| China withholding tax | ||||
| Total foreign | ||||
| Total cash paid for income taxes (net of refunds) | $ | |||
Income Tax Law of the People’s Republic of China
The Company’s Chinese subsidiary, LPOIZ, is governed by the Income Tax Law of the People’s Republic of China concerning the privately run and foreign invested enterprises, which are generally subject to tax at a statutory rate of
Historically, the Company considered unremitted earnings held by its foreign subsidiaries to be permanently reinvested. However, during fiscal year 2020, the Company began declaring intercompany dividends to remit a portion of the historical earnings of its foreign subsidiaries to the U.S. parent company. It is still the Company’s intent to reinvest a significant portion of the more recent earnings generated by its foreign subsidiaries, however the Company also plans to repatriate a portion of the historical earnings of its subsidiaries. Based on its previous intent, the Company had not historically provided for future Chinese withholding taxes on the related earnings. However, during fiscal year 2020 the Company began to accrue for these taxes on the portion of historical earnings that it intends to repatriate.
During the years ended June 30, 2026 and 2025, the Company declared and paid intercompany dividends of $
Law of Corporate Income Tax of Latvia
The Company’s Latvian subsidiary, ISP Latvia, is governed by the Law of Corporate Income Tax of Latvia. Until December 31, 2017, ISP Latvia was subject to a statutory income tax rate of
The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities are as follows as of June 30, 2026 and 2025, with certain fiscal year 2025 amounts reclassified from those previously reported to conform to current classification:
| Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Deferred tax assets: | ||||||||
| Net operating loss carryforwards | $ | $ | ||||||
| Stock-based compensation | ||||||||
| R&D and other credits | ||||||||
| Capitalized R&D expenses | ||||||||
| Inventories | ||||||||
| Intangible assets | ||||||||
| Lease liability | ||||||||
| Disallowed interest expense | ||||||||
| Accrued expenses and other | ||||||||
| Gross deferred tax assets | ||||||||
| Valuation allowance for deferred tax assets | ( | ) | ( | ) | ||||
| Total deferred tax assets | ||||||||
| Deferred tax liabilities: | ||||||||
| Depreciation and other | ( | ) | ( | ) | ||||
| Right-of-use asset | ( | ) | ( | ) | ||||
| Intangible assets | ( | ) | ||||||
| Total deferred tax liabilities | ( | ) | ( | ) | ||||
| Net deferred tax assets (liabilities) | $ | ( | ) | $ | ( | ) | ||
In assessing the potential future recognition of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. The Company’s largest deferred tax asset is related to its U.S. federal net operating loss (“NOL”) carryforwards. As of June 30, 2026, the Company has federal NOL carryforwards of approximately $
Based on the weight of the available evidence, management has provided for a valuation allowance against the deferred tax assets of approximately $
The utilization of the Company’s NOL carryforwards may be subject to a U.S. federal limitation due to the “change in ownership provisions” under Section 382 of the Internal Revenue Code and other similar limitations in various state jurisdictions. Such limitations may result in a reduction of the amount of NOL carryforwards in future years and possibly the expiration of certain NOL carryforwards before their utilization. The Company has performed a Sec. 382 study and concluded that there is no limitation under Section 382 as of June 30, 2026.
At June 30, 2026, in addition to NOL carryforwards, the Company also has research and development and other credit carryforwards of approximately $
The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examinations by federal, foreign, and state and local jurisdictions, where applicable. There are currently no pending tax examinations. The Company is no longer subject to U.S. federal and state tax examinations for fiscal years through June 2021, nor to corporate tax examination for through calendar year 2014 in China, and for fiscal years through June 2017 in Latvia. To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service and state and local tax authorities to the extent utilized in a future period.
As required by the uncertain tax position guidance in ASC No. 740, Income Taxes, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company applied the uncertain tax position guidance to all tax positions for which the statute of limitations remained open. The Company has recognized a liability for uncertain tax positions. The Company’s conclusions regarding uncertain tax positions may be subject to review and adjustment at a later date based upon ongoing analysis of or changes in tax laws, regulations and interpretations thereof as well as other factors.
On July 4, 2025, the One Big Beautiful Bill was enacted (“OBBBA”), introducing significant and wide-ranging changes to the U.S. federal tax system. Significant components include restoration of 100% accelerated tax depreciation on qualifying property including expansion to cover qualified production property. Another major aspect incudes the return to immediate expensing of domestic research and experimental expenditures (“R&E”) which in some cases may include retroactive application back to 2021 for businesses with gross receipts of less than $31 million or accelerated tax deductions of R&E that was previously capitalized for larger businesses. The legislation also reinstates EBITDA-based interest deductions for tax purposes and makes several business tax incentives permanent. Less favorable business provisions include limitations on tax deductions for charitable contributions.
The OBBBA modified the U.S. International Tax provisions for Global Intangible Low-Taxed Income (“GILTI”), Foreign-Derived Intangible Income (“FDII”), and the Base-erosion Anti-abuse Tax (“BEAT”) effective for tax years starting after December 31, 2025. The tax rate on GILTI, now renamed to Net CFC Tested Income (“NCTI”), is now 12.6%. The FDII rules, now renamed to Foreign Derived Deduction Eligible Income (“FDDEI”), now carry a 14% tax rate on FDDEI eligible income. The OBBB Act increases the BEAT rate from 10% to 10.5%.
The Company is currently assessing the potential impact of this legislation on its future financial position, results of operations, and cash flows. In accordance with U.S. GAAP, the effects will be recognized in the period of enactment.
10. Compensatory Equity Incentive Plan and Other Equity Incentives
Share-based payment arrangements — The Company’s directors, officers, and key employees were granted stock-based compensation under the Omnibus Plan, through October 2018 and after that date, the SICP. Such stock-based compensation may include, among other things, incentive stock options, non-qualified stock options, restricted stock awards (“RSAs”) and restricted stock units (“RSUs”). The SICP is administered by the Compensation Committee of the Board of Directors. To date, our stockholders approved an aggregate of
The LightPath Technologies, Inc. Employee Stock Purchase Plan (“2014 ESPP”) was adopted by the Company’s Board of Directors on October 30, 2014 and approved by the Company’s stockholders on January 29, 2015. The 2014 ESPP expired on January 29, 2025. A new Employee Stock Purchase Plan (“2025 ESPP”) was approved by the stockholders on June 16, 2025 with the first offering period beginning July 1, 2025. The 2025 ESPP permits employees to purchase Class A Common Stock through payroll deductions, which may not exceed
These plans are summarized below:
| Available for | ||||||||||||
| Award Shares | Outstanding at | Issuance at | ||||||||||
| Equity Compensation Arrangement | Authorized | June 30, 2026 | June 30, 2026 | |||||||||
| SICP (or Omnibus Plan) | ||||||||||||
| 2025 ESPP | ||||||||||||
Grant Date Fair Values and Underlying Assumptions; Contractual Terms —The Company estimates the fair value of each equity option as of the date of grant, using the Black-Scholes-Merton pricing model. The fair value of the 2014 ESPP and 2025 ESPP shares is based on the amount of the discount the employee obtained at the date of the purchase transaction.
Most stock options granted vest ratably over to years and are generally exercisable for years. The assumed forfeiture rates used in calculating the fair value of RSU grants was
The Company estimated the fair value of each stock award as of the date of grant using the following assumptions:
| Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Weighted-average expected volatility | % | % | ||||||
| Dividend yields | % | % | ||||||
| Weighted-average risk-free interest rate | % | % | ||||||
| Weighted-average expected term, in years | ||||||||
Restricted Stock Awards
RSAs are granted primarily to our executive officers, employees and consultants, and typically vest over a to year period from the date of grant, although some may vest immediately upon grant. The stock underlying RSAs is issued upon vesting.
Restricted Stock Units
RSUs are granted primarily to our directors, although RSU awards may also be made to executive officers, employees and consultants. RSUs typically vest over a to year period from the date of grant, although some may vest immediately upon grant.
The Company issues new shares of Class A Common Stock upon the exercise of stock options and upon vesting of RSUs and RSAs, unless the recipient has elected to defer receipt of shares under the applicable IRS rules.
Information Regarding Current Share-Based Payment Awards — A summary of the activity for share-based payment awards in the years ended June 30, 2026 and 2025 is presented below:
| Stock Options | Restricted Stock Units (RSUs) | Restricted Stock Awards (RSAs) | ||||||||||||||||||||||||||||||||||
| Weighted- | Weighted- | Weighted- | Weighted- | Weighted- | Weighted- | |||||||||||||||||||||||||||||||
| Average | Average | Average | Average | Average | Average | |||||||||||||||||||||||||||||||
| Exercise | Remaining | Grant Date | Remaining | Grant Date | Remaining | |||||||||||||||||||||||||||||||
| Shares | Price | Contract | Shares | Fair Values | Contract | Shares | Fair Values | Contract | ||||||||||||||||||||||||||||
| June 30, 2024 | $ | |||||||||||||||||||||||||||||||||||
| Granted | $ | $ | $ | |||||||||||||||||||||||||||||||||
| Exercised | ( | ) | $ | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Cancelled/Forfeited | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||
| June 30, 2025 | $ | |||||||||||||||||||||||||||||||||||
| Granted | $ | $ | $ | |||||||||||||||||||||||||||||||||
| Exercised | ( | ) | $ | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Cancelled/Forfeited | ( | ) | $ | |||||||||||||||||||||||||||||||||
| June 30, 2026 | $ | |||||||||||||||||||||||||||||||||||
| Awards exercisable/vested as of | ||||||||||||||||||||||||||||||||||||
| June 30, 2026 | $ | — | — | |||||||||||||||||||||||||||||||||
| Awards unexercisable/unvested as of | ||||||||||||||||||||||||||||||||||||
| June 30, 2026 | $ | 10.06 | ||||||||||||||||||||||||||||||||||
The intrinsic and fair values for share-based payment awards exercised and vested in the years ended June 30, 2026 and 2025 are presented below:
| Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Intrinsic Value - Exercised | ||||||||
| Stock Options | $ | $ | ||||||
| RSUs | ||||||||
| RSAs | ||||||||
| Fair Value - Vested | ||||||||
| Stock Options | $ | $ | ||||||
| RSUs | ||||||||
| RSAs | ||||||||
The intrinsic values of share-based payment awards outstanding and exercisable as of June 30, 2026 and 2025 are presented below:
| As of June 30, | ||||||||
| 2026 | 2025 | |||||||
| Stock Options | $ | $ | ||||||
| RSUs | ||||||||
As of June 30, 2026, there was approximately $
| Fiscal Year Ending: | Stock Options | RSAs | RSUs | Total | ||||||||||||
| June 30, 2027 | $ | $ | $ | $ | ||||||||||||
| June 30, 2028 | ||||||||||||||||
| June 30, 2029 | ||||||||||||||||
| June 30, 2030 | ||||||||||||||||
| June 30, 2031 | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
There was
Acceleration of Vesting — The Company does not generally accelerate the vesting of any stock options, RSUs or RSAs, however in the case of retirements, the Board of Directors may accelerate vesting, which would accelerate expense recognition.
Financial Statement Effects and Presentation — The following table shows total stock-based compensation expense for the years ended June 30, 2026 and 2025, which is included in selling, general and administrative expenses in the accompanying Consolidated Statements of Comprehensive Income (Loss):
| Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Stock options | $ | $ | ||||||
| RSAs | ||||||||
| RSUs | ||||||||
| Total | $ | $ | ||||||
11. Earnings (Loss) Per Share
Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of Class A Common Stock outstanding during each period presented. The computation of diluted earnings (loss) per share further assumes the potential dilutive effect of potential Class A Common Stock using the treasury-stock method and if-converted method, as applicable. During periods in which the average market price of the Class A Common Stock is above the applicable conversion price of the Company's convertible notes, the impact of conversion would be dilutive and such dilutive effect is reflected in diluted EPS. As a result, in periods where the average market price of the Class A Common Stock is above the conversion price, under the if-converted method, the Company calculates the number of shares issuable under the terms of the convertible notes based on the average market price of the stock during the period, and includes that number in the total diluted shares outstanding for the period. The Warrants and the Series G Convertible Preferred Stock are participating securities as the holders of such instruments participate in the event a dividend is paid on Class A Common Stock, however the holders do not have a contractual obligation to share in the Company’s losses. As such, losses are attributed entirely to common stockholders. The computations for basic and diluted earnings (loss) per share of Class A Common Stock are described in the following table:
| Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Accretion of dividends on Series G preferred | ( | ) | ||||||
| Net loss attributable to stockholders | $ | ( | ) | $ | ( | ) | ||
| Weighted-average common shares outstanding: | ||||||||
| Basic number of shares | ||||||||
| Diluted number of shares | ||||||||
| Loss per common share: | ||||||||
| Basic | $ | ( | ) | $ | ( | ) | ||
| Diluted | $ | ( | ) | $ | ( | ) | ||
The following weighted-average potential dilutive shares were not included in the computation of diluted earnings per share, as their effects would be anti-dilutive. Potential dilutive shares for the Series G Convertible Preferred Stock, warrants and convertible notes were calculated based on the Exchange Cap in effect for the respective periods:
| Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Options to purchase Class A Common Stock | ||||||||
| RSUs and RSAs | ||||||||
| Series G convertible preferred & warrants | ||||||||
12. Defined Contribution Retirement Plans
The Company provides retirement benefits to its U.S.-based employees through two defined contribution retirement plans. These benefits are offered under the LightPath Technologies Inc. 401(k) plan (the “LightPath Plan”) and the G5 Infrared, LLC 401(k) Plan (the “G5 Plan”). The LightPath Plan and the G5 Plan are defined 401(k) contribution plans, administered by third parties, that all U.S. employees, over the age of 18, are eligible to participate in after one month of employment. Under the LightPath Plan, the Company matches
13. Leases
The Company has operating leases for its manufacturing and office space. The Company has a lease agreement for its corporate headquarters and manufacturing facility in Orlando, Florida (the “Orlando Lease”). The Orlando Lease expires on March 31, 2034. Minimum rental rates for the extension term were established based on annual increases of approximately three percent (
As of June 30, 2026, the Company, through its wholly-owned subsidiary, G5 Infrared, has a lease agreement for a manufacturing and office facility in Hudson, New Hampshire, which expires December 31, 2031. The Company’s wholly-owned subsidiary, Visimid, has a lease agreement for a manufacturing and office facility in Plano, Texas, which commenced September 1, 2025 for a -year term. The prior facility was relocated to this larger facility, and the lease of the prior facility, which was set to expire October 31, 2026, was terminated in March 2026 pursuant to a mutual agreement with the lessor.
The Company’s wholly-owned subsidiary, LPOIZ, has a lease agreement for a manufacturing and office facility in Zhenjiang, China, which expires December 31, 2027. The Company, through ISP’s wholly-owned subsidiary ISP Latvia, has lease agreements for a manufacturing and office facility in Riga, Latvia, which leases expire December 31, 2030.
The Company’s facility leases are classified as operating leases. The operating leases for facilities are non-cancelable, expiring in 2026 to 2034. The Company includes options to renew (or terminate) in the lease term, and as part of the ROU assets and lease liabilities, when it is reasonably certain that the Company will exercise that option.
At June 30, 2026, the Company also has obligations under eighteen finance lease agreements, entered into during fiscal years 2023 through 2026, with terms ranging from to years. The finance leases are for computer and manufacturing equipment. The finance leases for equipment in Riga, Latvia include financial covenants specific to ISP Latvia.
The Company’s operating lease ROU assets and the related lease liabilities are initially measured at the present value of future lease payments over the lease term. Two of our operating leases include renewal options, which were not included in the measurement of the operating lease ROU assets and related lease liabilities. As most of the Company’s leases do not provide an implicit rate, the Company used its collateralized incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. Currently, none of the Company’s leases include variable lease payments that are dependent on an index or rate. The Company is responsible for payment of certain real estate taxes, insurance and other expenses on certain of its leases. These amounts are generally considered to be variable and are not included in the measurement of the ROU asset and lease liability. The Company generally accounts for non-lease components, such as maintenance, separately from lease components. The Company’s lease agreements do not contain any material residual value guarantees or material restricted covenants. Leases with a term of 12 months or less are not recorded on the Consolidated Balance Sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term.
The components of lease expense were as follows:
| Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Operating lease cost | $ | $ | ||||||
| Finance lease cost: | ||||||||
| Depreciation of lease assets | ||||||||
| Interest on lease liabilities | ||||||||
| Total finance lease cost | ||||||||
| Total lease cost | $ | $ | ||||||
Supplemental balance sheet information related to leases was as follows:
| Classification | June 30, 2026 | June 30, 2025 | |||||||
| Assets: | |||||||||
| Operating lease assets | Operating lease assets | $ | $ | ||||||
| Finance lease assets | Property and equipment, net(1) | ||||||||
| Total lease assets | $ | $ | |||||||
| Liabilities: | |||||||||
| Current: | |||||||||
| Operating leases | Operating lease liabilities, current | $ | $ | ||||||
| Finance leases | Finance lease liabilities, current | ||||||||
| Noncurrent: | |||||||||
| Operating leases | Operating lease liabilities, less current portion | ||||||||
| Finance leases | Finance lease liabilities, less current portion | ||||||||
| Total lease liabilities | $ | $ | |||||||
| (1) | Finance lease assets are recorded net of accumulated depreciation of approximately $ |
Lease term and discount rate information related to leases was as follows:
| Lease Term and Discount Rate | June 30, 2026 | |||
| Weighted Average Remaining Lease Term (in years) | ||||
| Operating leases | ||||
| Finance leases | ||||
| Weighted Average Discount Rate | ||||
| Operating leases | % | |||
| Finance leases | % | |||
Supplemental cash flow information:
| Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
| Operating cash used for operating leases | $ | $ | ||||||
| Operating cash used for finance leases | $ | $ | ||||||
| Financing cash used for finance leases | $ | $ | ||||||
Future maturities of lease liabilities were as follows as of June 30, 2026:
| Finance | Operating | |||||||
| Fiscal year ending: | Leases | Leases | ||||||
| June 30, 2027 | $ | $ | ||||||
| June 30, 2028 | ||||||||
| June 30, 2029 | ||||||||
| June 30, 2030 | ||||||||
| June 30, 2031 | ||||||||
| Thereafter | ||||||||
| Total future minimum payments | ||||||||
| Less imputed interest | ( | ) | ( | ) | ||||
| Present value of lease liabilities | $ | $ | ||||||
14. Loans Payable
As of June 30, 2026, loans payable consisted of one third-party equipment loan. During the year ended June 30, 2026, the Acquisition Notes were redeemed and the 2020 Equipment Loan (as defined below) was paid in full. The Bridge Note (as defined below) was extinguished during the year ended June 30, 2025.
Acquisition Notes
On February 18, 2025, in connection with the closing of the Securities Purchase Agreement (see Note 3, Acquisition of G5 Infrared), we issued the Acquisition Notes. The Acquisition Notes accrue interest at the rate between
The Acquisition Notes would have matured on
The Acquisition Notes were automatically convertible into shares of Series G Convertible Preferred Stock, which were in turn convertible into Conversion Shares, if the EBITDA reported by the Company for the calendar year ending December 31, 2025, is less than approximately $
The Acquisition Notes included customary affirmative and negative covenants and events of default. Additionally, the Acquisition Notes included financial covenants requiring the Company to maintain a Total Leverage Ratio (as defined in the Acquisition Notes) of not greater than and a Fixed Charge Covered Ratio (as defined in the Acquisition Notes) of greater than for each fiscal quarter beginning with the fiscal quarter ending December 31, 2025.
Bridge Note
On August 6, 2024, we entered into the Bridge Note with Lytton-Kambara Foundation (the “Lender” and also the “Class A Purchaser”) pursuant to which the Lender extended a loan to the Company in the principal amount of $
The Bridge Note and related accrued interest were settled on February 18, 2025, in conjunction with financing for the acquisition of G5 Infrared and the closing of the Securities Purchase Agreement and Class A SPA (see Note 8, Stockholders' Equity) with the Lytton Buyers. The Bridge Note and $
Equipment Loans
In December 2020, ISP Latvia entered into an equipment loan with a third party (the “2020 Equipment Loan”), which is also a customer. The 2020 Equipment Loan is collateralized by certain equipment. The initial advance under the 2020 Equipment Loan was EUR (or approximately USD $
In May 2023, ISP Latvia entered into an equipment loan with a third party financial institution (the “2023 Equipment Loan”). The 2023 Equipment Loan is collateralized by certain equipment. The initial advances under the 2023 Equipment Loan totaled EUR (or approximately USD $
Future maturities of loans payable are as follows:
| Equipment | ||||
| Loans | ||||
| Fiscal year ending: | ||||
| June 30, 2027 | $ | |||
| June 30, 2028 | ||||
| Total payments | $ | |||
| Less current portion | ( | ) | ||
| Non-current portion | $ | |||
15. Contingencies
Legal
The Company from time to time is involved in various legal actions arising in the normal course of business. Management, after reviewing with legal counsel all of these actions and proceedings, believes that the aggregate losses, if any, will not have a material adverse effect on the Company’s financial position or results of operations.
Potential Impact of Economic Conditions in China
Due to our operations in China, our business, results of operations, financial condition and prospects may be influenced to a significant degree by economic, political, legal and social conditions in China. China’s economy differs from the economies of other countries in many respects, including with respect to the level of development, growth rate, amount of government involvement, control of foreign exchange and allocation of resources. While China’s economy has experienced significant growth over the past several decades, its growth rate has declined in recent years and may continue to decline. Deteriorating economic conditions in China generally have led to lower demand for our products in China and thus lower revenues and net income for our subsidiaries in China and the Company overall. A continuation of China’s current economic conditions or a further slowdown in the economic growth, an economic downturn, a recession, or other adverse economic conditions in China is likely to have a material adverse effect on our business and results of operations in future quarters.
In addition, China’s export limitations on Germanium and Gallium, two materials that are commonly used in infrared optical components, are becoming increasingly disruptive to our business with adverse impacts. The initial restrictions imposed in July 2023 required all international customers to provide an end user statement for approval before receiving an export license. Following that announcement, supply of Germanium was disrupted, though not completely stopped. This also resulted in significant price increases in the cost of Germanium material. Following these restrictions we proactively canceled a number of customer orders for Germanium, to reduce our exposure in case of a supply disruption.
Then, in December 2024, China imposed additional restrictions applicable to exports to the United States, including a prohibition on exports of dual-use items to U.S. military users or for military uses and a policy under which exports of specified gallium- and germanium-related dual-use items to the United States would generally not be licensed. In November 2025, China suspended the latter U.S.-specific restriction through November 27, 2026. However, the underlying export-license requirements remain in effect, the restrictions applicable to U.S. military users and military end uses remain in place, and China may reinstate, extend, or modify its U.S.-specific restrictions.
As a purchaser of Germanium, we cannot provide any assurance that we will be able to obtain adequate supplies of Germanium, or that the timing or costs of obtaining such raw materials will be acceptable to us. We have taken proactive steps to minimize the orders we accept for Germanium products and therefore minimize our exposure to this risk, and are actively working with our customers to redesign their systems to use our BlackDiamond materials instead of Germanium-based materials. Additionally, we are actively collaborating with our customers to ensure those redesigned systems are tested and qualified as replacements for legacy Germanium-based systems. In some cases, such as complex defense and airborne systems, the re-qualification of such redesigned systems is a lengthy process that can take up to two years. In other systems such as commercial systems and also some specific defense systems, this is a faster process, that takes several months.
Beginning in February 2025, the U.S. imposed additional tariffs on imports from China, and China imposed retaliatory tariffs and other measures on certain goods imported from the U.S. Since that time, the United States and China have increased, reduced, suspended, replaced, and otherwise modified various tariff and non-tariff measures, including through bilateral negotiations. We utilize a number of strategies intended to mitigate the impact of tariffs and other trade restrictions. However, given the uncertainty regarding the current tariffs, as well as the potential for additional trade actions by the U.S. or other countries in the future, any future impact on our operations and financial results is uncertain and these impacts could be more significant than those we have experienced in the past. Further, we can provide no assurance that the strategies we implemented to mitigate the impact of such tariffs or other trade actions will continue to be successful. To the extent that our supply chain, costs, sales, or profitability are negatively affected by the tariffs or other trade actions, our business, financial condition, and results of operations may be materially adversely affected.
Impact of Ongoing Wars
In February 2022, Russian military forces invaded Ukraine. This war has led to ongoing sanctions on Russia, which have had continuing impacts on our supply chain of raw materials, particularly Germanium. Separately, Israel declared war on Hamas in October 2023. Initially, this resulted in a temporary increase in our sales, as Israel worked to replace electro-optical systems that in some cases use our materials. Our sales to customers in this region have since stabilized, however, it is still possible that this war could have a negative impact on our business as a result of the overall economic impact in Israel. In addition to the significant defense related market in Israel, we also serve many commercial related applications and work with commercial companies in Israel, and the business of those customers may be negatively impacted by the war over time. Given the dynamic nature of this situation, we cannot reasonably estimate the impact of either the Russian-Ukraine conflict or the Israel-Hamas war on our financial condition, results of operations or cash flows into the foreseeable future.
16. Foreign Operations
Assets and liabilities denominated in non-U.S. currencies are translated at rates of exchange prevailing on the balance sheet date, and revenues and expenses are translated at average rates of exchange for the period. Gains or losses on the translation of the financial statements of a non-U.S. operation, where the functional currency is other than the U.S. dollar, are reflected as a separate component of equity, which was a cumulative gain of approximately $
Revenues by geographic area, based on shipping destination, for the fiscal years ended June 30, 2026 and 2025 as follows:
| Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Revenues: | ||||||||
| United States | $ | $ | ||||||
| United Kingdom (1) | ||||||||
| Israel | ||||||||
| China | ||||||||
| Other European countries | ||||||||
| Other Asian countries | ||||||||
| Rest of world | ||||||||
| $ | $ | |||||||
| (1) | The majority of shipments to the United Kingdom are for a customer that integrates products in the United Kingdom and returns them to their customers in the U.S. |
Long-lived assets by geographic area as of June 30, 2026 and 2025 are as follows:
| June 30, | June 30, | |||||||
| 2026 | 2025 | |||||||
| Long-lived assets: | ||||||||
| United States | $ | $ | ||||||
| Latvia | ||||||||
| China | ||||||||
| $ | $ | |||||||
17. Segment Reporting
The Company has reportable operating segment, the optics segment that is managed on a consolidated basis. The optics segment designs and manufactures products at locations in the U.S., Europe and Asia and manages the business activities on a consolidated basis. Our Chief Operating Decision Maker (“CODM”) is the chief executive officer. The chief operating decision maker assesses performance for the optics segment and decides how to allocate resources based on consolidated net loss that also is reported on the consolidated statements of comprehensive income (loss) as consolidated net loss. The types of products and services from which the optics segments derives its revenues is described in Note 4, Revenue. The accounting policies of the optics segment are the same as those described in Note 2, Significant Accounting Policies, to these Consolidated Financial Statements. The measure of segment assets is reported on the consolidated balance sheet as total assets. See Note 4, Revenue for detail about revenue by product and service group, and Note 16, Foreign Operations, for geographic information. See Note 18, Supplier and Customer Concentrations, for information about major customers.
The CODM uses consolidated net loss to evaluate income generated from segment assets, and to determine whether to invest in new capabilities related to this segment. The CODM monitors budget to actual results for revenue, gross profit, operating expenses and net loss on a consolidated basis. The CODM reporting package includes non-operating items to reconcile to net income. The following table represents the financial information regularly reviewed by the CODM, in addition to the Consolidated Financial Statements. Interest expense is reported on consolidated statements of comprehensive income (loss) as interest expense, net; depreciation and amortization expense, stock-based compensation expense, and total expenditures for long-lived assets are reported on the consolidated statement of cash flows.
| Optics Segment | ||||||||
| Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Revenue | $ | $ | ||||||
| Cost of goods sold | ||||||||
| Segment gross profit | ||||||||
| Less: | ||||||||
| Sales & marketing | ||||||||
| General & administrative | ||||||||
| Corporate | ||||||||
| New product development | ||||||||
| (Gain) loss on disposal of equipment | ( | ) | ||||||
| Amortization of intangible assets | ||||||||
| Change in fair value of acquisition liabilities | ||||||||
| Interest (income) expense, net | ( | ) | ||||||
| Other non-operating income (expense)(1) | ||||||||
| Provision for income taxes | ||||||||
| Segment net loss | ( | ) | ( | ) | ||||
| Reconciliation of profit or loss | ||||||||
| Adjustments and reconciling items | ||||||||
| Consolidated net loss | $ | ( | ) | $ | ( | ) | ||
| (1) | Other non-operating income (expense) includes loss on extinguishment of debt, change in fair value of warrant liability, and other income (expense), net, each of which is presented on the accompanying Consolidated Statements of Comprehensive Income (Loss). |
18. Supplier and Customer Concentrations
The Company utilizes a number of glass compositions in manufacturing its molded glass aspheres and lens array products. These glasses or equivalents are available from a large number of suppliers, including CDGM Glass Company Ltd., Ohara Corporation, and Sumita Optical Glass, Inc. Base optical materials, used in certain of the Company’s products, are manufactured and supplied by a number of optical and glass manufacturers. The Company also utilizes major infrared material suppliers located around the globe for a broad spectrum of infrared crystal and glass. Historically, the Company has sourced Germanium from suppliers located in Russia and China. At the start of the war in Ukraine, all purchases of Germanium from vendors in Russia ceased and the Company has been purchasing Germanium only from vendors in China. In 2023, China began imposing export restrictions on Germanium and has continued to increase those restrictions over time, as further described in Note 15, Contingencies, to these Consolidated Financial Statements. The Company believes that a satisfactory supply of such production materials will continue to be available, however, with longer lead times and higher prices for Germanium in particular, although there can be no assurance in this regard.
In fiscal year 2026, the Company had sales to customers that comprised an aggregate of approximately
In fiscal year 2026,
19. Subsequent Event
On July 23, 2026, the Company and LPOIZ entered into an equity transfer agreement (the “ETA”) with Hengtu Optical Technology Co., Ltd. (the “Purchaser”), and Mr. Leo Zheng (the “Purchaser Representative”). The Purchaser is owned by the Purchaser Representative and certain members of the Company’s current management team. Pursuant to the ETA, and subject to the terms and conditions set forth therein, the Company agreed to sell and transfer one hundred percent (
The ETA further provides that during the period commencing on the closing date of the LPOIZ Transaction and ending of the later of (i) the date on which the Purchase Price has been paid in full and (ii) the fifth anniversary of the closing date of the LPOIZ Transaction (such period, the “Restricted Period”), the Company shall have the right to designate an observer at all meetings of the board of directors, shareholders or other governing bodies of LPOIZ. The Purchaser has also agreed that, during the Restricted Period, (a) a change of control of the Company (as defined in the ETA) shall not occur; (b) the Company shall not sell, dispose of or otherwise transfer all or substantially all of its assets (including without limitation intellectual property) and/or business to any third party, except for the sale of inventory and products in the ordinary course of business consistent with past practice and the ETA; and (c) if there is any direct or indirect change in the ownership of LPOIZ or the Purchaser, the Purchaser shall provide a written notice to the Company immediately, and any new direct or indirect shareholder shall execute an acknowledgment in form and substance satisfactory to the Company acknowledging and agreeing to the post-closing restrictions and other applicable terms of the ETA.
Subject to the terms and conditions of the ETA, LPOIZ will receive from the Company certain limited rights and licenses to use specified trademarks in specified territories, including certain transitional trademark rights and a five-year license relating to specified marks. The ETA also provides LPOIZ with certain rights to use product drawings, tooling, molds, process documentation, technology, know-how and related technical support in connection with LPOIZ’s business following the closing. The rights and licenses are subject to the scope, duration, territory, quality control, confidentiality, payment, default and termination provisions set forth in the ETA, and the Company and its affiliates retain ownership of their intellectual property except to the extent expressly provided therein.
Additionally, pursuant to the ETA, during the first five years following the closing of the LPOIZ Transaction (the “Exclusive Supply Term”), LPOIZ shall continue to supply products to the Company in a manner consistent with past practice, applicable specifications and agreed upon quality requirements. The purchase price of such products to be supplied by LPOIZ to the Company shall continue to be cost plus ten percent (
The ETA contains certain mutual post-closing covenants restricting each party’s ability to sell, market or distribute specified products in specified territories during the Exclusive Supply Term.
The LPOIZ Transaction is expected to close in September 2026.
End of Consolidated Financial Statements
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
| LIGHTPATH TECHNOLOGIES, INC. |
|||
| Date: September 10, 2026 |
By: |
/s/ SHMUEL RUBIN |
|
| Shmuel Rubin |
|||
| President & Chief Executive Officer |
|||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| /s/ SHMUEL RUBIN | September 10, 2026 | /s/ ALBERT MIRANDA | September 10, 2026 | ||||
| Shmuel Rubin | Albert Miranda | ||||||
| President & Chief Executive Officer | Chief Financial Officer | ||||||
| (Principal Executive Officer) | (Principal Financial and | ||||||
| Accounting Officer) | |||||||
| /s/ M. SCOTT FARIS | September 10, 2026 | /s/ THOMAS ELLIS | September 10, 2026 | ||||
| M. Scott Faris | Thomas Ellis | ||||||
| Director (Chairman of the Board) | Director | ||||||
| /s/ MARK CAYLOR | September 10, 2026 | /s/ JOSEPH MENAKER | September 10, 2026 | ||||
| Mark Caylor | Joseph Menaker | ||||||
| Director | Director | ||||||
| /s/ S. ERIC CREVISTON | September 10, 2026 | /s/ DARCIE PECK | September 10, 2026 | ||||
| S. Eric Creviston | Darcie Peck | ||||||
| Director | Director | ||||||
| /s/ KIMBERLY CRIDER | September 10, 2026 | ||||||
| Kimberly Crider | |||||||
| Director |
EXHIBIT 21.1
Subsidiaries
|
GelTech Inc. |
Delaware |
|
|
LightPath Optical Instrumentation (Zhenjiang) Co., Ltd |
People’s Republic of China |
|
|
ISP Optics Corporation |
New York |
|
|
ISP Optics Latvia, SIA |
Latvia |
|
|
Liebert Consulting LLC |
Texas |
|
|
G5 Infrared LLC |
New Hampshire |
|
| Amorphous Materials LLC | Delaware |
EXHIBIT 23.1
Consent of Independent Registered Public Accounting Firm
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-121389, 333-50976, 333-50974, 333-155044, 333-188482, 333-201871, and 333-221665, 333-288868, and 333-288866) and Form S-3 (Nos. and 333-286947, 333-290672 and 333-291717) of LightPath Technologies, Inc. of our report dated September 10, 2026, relating to the consolidated financial statements, which appears in this Annual Report on Form 10-K.
/s/ BDO USA, P.C.
Troy, MI
EXHIBIT 31.1
Certification of Chief Executive Officer
Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
I, Shmuel Rubin, certify that:
|
1. |
I have reviewed this annual report on Form 10-K for the year ended June 30, 2026 of LightPath Technologies, 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; |
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|
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: |
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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; |
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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; |
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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 |
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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 |
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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): |
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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 |
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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: September 10, 2026
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/s/ Shmuel Rubin |
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Shmuel Rubin |
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President and Chief Executive Officer |
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EXHIBIT 31.2
Certification of Chief Financial Officer
Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
I, Albert Miranda, certify that:
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I have reviewed this annual report on Form 10-K for the year ended June 30, 2026 of LightPath Technologies, Inc.; |
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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; |
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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; |
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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: |
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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; |
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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; |
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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 |
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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 |
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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): |
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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 |
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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: September 10, 2026
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/s/ Albert Miranda | ||
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Albert Miranda | ||
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Chief Financial Officer |
EXHIBIT 32.1
Certification of Chief Executive Officer
Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code
Pursuant to U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned Chief Executive Officer of LightPath Technologies, Inc. (the "Company") does hereby certify, to the best of such officer's knowledge, that:
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The Annual Report on Form 10-K of the Company for the annual period ended June 30, 2026 (the "Report") fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
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Dated: September 10, 2026 |
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/s/ Shmuel Rubin |
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Shmuel Rubin |
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President and Chief Executive Officer |
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The certifications set forth above are being furnished as an exhibit solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to LightPath Technologies, Inc. and will be retained by LightPath Technologies, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 32.2
Certification of Chief Financial Officer
Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code
Pursuant to U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned Chief Financial Officer of LightPath Technologies, Inc. (the "Company") does hereby certify, to the best of such officer's knowledge, that:
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The Annual Report on Form 10-K of the Company for the annual period ended June 30, 2026 (the "Report") fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
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Dated: September 10, 2026 |
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/s/ Albert Miranda | |
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Albert Miranda | ||
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Chief Financial Officer |
The certifications set forth above are being furnished as an exhibit solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to LightPath Technologies, Inc. and will be retained by LightPath Technologies, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 10.19
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (“Agreement”), dated as of [DATE], is by and between LightPath Technologies, Inc., a Delaware corporation (the “Company”) and [DIRECTOR] (the “Indemnitee”).
WHEREAS, the Company expects Indemnitee to join the Company as a director;
WHEREAS, both the Company and Indemnitee recognize the increased risk of litigation and other claims being asserted against directors and officers of public companies;
WHEREAS, the board of directors of the Company (the “Board”) has determined that enhancing the ability of the Company to retain and attract as directors and officers the most capable persons is in the best interests of the Company and that the Company therefore should seek to assure such persons that indemnification and insurance coverage is available; and
WHEREAS, in recognition of the need to provide Indemnitee with substantial protection against personal liability, in order to procure Indemnitee’s service as a director of the Company and to enhance Indemnitee’s ability to serve the Company in an effective manner, and in order to provide such protection pursuant to express contract rights (intended to be enforceable irrespective of, among other things, any amendment to the Company’s certificate of incorporation or bylaws (collectively, the “Constituent Documents”), any change in the composition of the Board or any change in control or business combination transaction relating to the Company), the Company wishes to provide in this Agreement for the indemnification of, and the advancement of Expenses (as defined in Section 1(f) below) to, Indemnitee as set forth in this Agreement and to the extent insurance is maintained for the coverage of Indemnitee under the Company’s directors’ and officers’ liability insurance policies.
NOW, THEREFORE, in consideration of the foregoing and the Indemnitee’s agreement to provide services to the Company, the parties agree as follows:
1. Definitions. For purposes of this Agreement, the following terms shall have the following meanings:
(a)“ Beneficial Owner” has the meaning given to the term “beneficial owner” in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
(b)“ Change in Control” means the occurrence after the date of this Agreement of any of the following events:
(i) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 50% or more of the Company’s then outstanding Voting Securities unless the change in relative Beneficial Ownership of the Company’s securities by any Person results solely from a reduction in the aggregate number of outstanding shares of securities entitled to vote generally in the election of directors;
(ii) the consummation of a reorganization, merger or consolidation, unless immediately following such reorganization, merger or consolidation, all of the Beneficial Owners of the Voting Securities of the Company immediately prior to such transaction beneficially own, directly or indirectly, more than 50% of the combined voting power of the outstanding Voting Securities of the entity resulting from such transaction;
(iii) during any period of two consecutive years, not including any period prior to the execution of this Agreement, individuals who at the beginning of such period constituted the Board (including for this purpose any new directors whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved) cease for any reason to constitute at least a majority of the Board; or
(iv) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets.
(c)“ Claim” means:
(i) any threatened, pending or completed action, suit, proceeding or alternative dispute resolution mechanism, whether civil, criminal, administrative, arbitrative, investigative or other, and whether made pursuant to federal, state or other law; or
(ii) any inquiry, hearing or investigation that the Indemnitee determines might lead to the institution of any such action, suit, proceeding or alternative dispute resolution mechanism.
(d)“ Delaware Court” shall have the meaning ascribed to it in Section 8(b) below.
(e)“ Disinterested Director” means a director of the Company who is not and was not a party to the Claim in respect of which indemnification is sought by Indemnitee.
(f)“ Expenses” means any and all expenses, including attorneys’ and experts’ fees, court costs, transcript costs, travel expenses, duplicating, printing and binding costs, telephone charges, and all other costs and expenses incurred in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness or participate in, any Claim. Expenses also shall include (i) Expenses incurred in connection with any appeal resulting from any Claim, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii) for purposes of Section 4 only, Expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement, by litigation or otherwise. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee. The parties agree that for the purposes of any advancement of Expenses for which Indemnitee has made written demand to the Company in accordance with this Agreement, all Expenses included in such demand that are certified by affidavit of Indemnitee’s counsel as being reasonable shall be presumed conclusively to be reasonable.
(g)“ Expense Advance” means any payment of Expenses advanced to Indemnitee by the Company pursuant to Section 3 or Section 4 hereof.
(h)“ Indemnifiable Event” means any event or occurrence, whether occurring before, on or after the date of this Agreement, related to the fact that Indemnitee is or was a director, officer, employee or agent of the Company or any subsidiary of the Company, or is or was serving at the request of the Company as a director, officer, employee, member, manager, trustee or agent of any other corporation, limited liability company, partnership, joint venture, trust or other entity or enterprise (collectively with the Company, “Enterprise”) or by reason of an action or inaction by Indemnitee in any such capacity (whether or not serving in such capacity at the time any Loss is incurred for which indemnification can be provided under this Agreement).
(i)“ Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently performs, nor in the past two years has performed, services for either: (i) the Company or Indemnitee (other than in connection with matters concerning Indemnitee under this Agreement or of other indemnitees under similar agreements) or (ii) any other party to the Claim giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.
(j)“ Losses” means any and all Expenses, damages, losses, liabilities, judgments, fines, penalties (whether civil, criminal or other), ERISA excise taxes, amounts paid or payable in settlement, including any interest, assessments, any federal, state, local or foreign taxes imposed as a result of the actual or deemed receipt of any payments under this Agreement and all other charges paid or payable in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness or participate in, any Claim.
(k)“ Person” means any individual, corporation, firm, partnership, joint venture, limited liability company, estate, trust, business association, organization, governmental entity or other entity and includes the meaning set forth in Sections 13(d) and 14(d) of the Exchange Act.
(l)“ Standard of Conduct Determination” shall have the meaning ascribed to it in Section 8(b) below.
(m)“ Voting Securities” means any securities of the Company that vote generally in the election of directors.
2. Indemnification. Subject to Section 8 and Section 9 of this Agreement, the Company shall indemnify Indemnitee, to the fullest extent permitted by the laws of the State of Delaware in effect on the date hereof, or as such laws may from time to time hereafter be amended to increase the scope of such permitted indemnification, against any and all Losses if Indemnitee was or is or becomes a party to or participant in, or is threatened to be made a party to or participant in, any Claim by reason of or arising in part out of an Indemnifiable Event, including, without limitation, Claims brought by or in the right of the Company, Claims brought by third parties, and Claims in which the Indemnitee is solely a witness.
3. Advancement of Expenses. Indemnitee shall have the right to advancement by the Company, prior to the final disposition of any Claim by final adjudication to which there are no further rights of appeal, of any and all Expenses actually and reasonably paid or incurred by Indemnitee in connection with any Claim arising out of an Indemnifiable Event. Indemnitee’s right to such advancement is not subject to the satisfaction of any standard of conduct. Without limiting the generality or effect of the foregoing, within thirty (30) days after any request by Indemnitee, the Company shall, in accordance with such request, (a) pay such Expenses on behalf of Indemnitee, (b) advance to Indemnitee funds in an amount sufficient to pay such Expenses, or (c) reimburse Indemnitee for such Expenses. In connection with any request for Expense Advances, Indemnitee shall not be required to provide any documentation or information to the extent that the provision thereof would undermine or otherwise jeopardize attorney-client privilege. Execution and delivery to the Company of this Agreement by Indemnitee constitutes an undertaking by the Indemnitee to repay any amounts paid, advanced or reimbursed by the Company pursuant to this Section 3 in respect of Expenses relating to, arising out of or resulting from any Claim in respect of which it shall be determined, pursuant to Section 8, following the final disposition of such Claim, that Indemnitee is not entitled to indemnification hereunder. No other form of undertaking shall be required other than the execution of this Agreement. Indemnitee’s obligation to reimburse the Company for Expense Advances shall be unsecured and no interest shall be charged thereon.
4. Indemnification for Expenses in Enforcing Rights. To the fullest extent allowable under applicable law, the Company shall also indemnify against, and, if requested by Indemnitee, shall advance to Indemnitee subject to and in accordance with Section 3, any Expenses actually and reasonably paid or incurred by Indemnitee in connection with any action or proceeding by Indemnitee for (a) indemnification or reimbursement or advance payment of Expenses by the Company under any provision of this Agreement, or under any other agreement or provision of the Constituent Documents now or hereafter in effect relating to Claims relating to Indemnifiable Events, and/or (b) recovery under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification or insurance recovery, as the case may be. However, in the event that Indemnitee is ultimately determined not to be entitled to such indemnification or insurance recovery, as the case may be, then all amounts advanced under this Section 4 shall be repaid. Indemnitee shall be required to reimburse the Company in the event that a final judicial determination is made that such action brought by Indemnitee was frivolous or not made in good faith.
5. Partial Indemnity. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for a portion of any Losses in respect of a Claim related to an Indemnifiable Event but not for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.
6. Notification and Defense of Claims.
(a) Notification of Claims. Indemnitee shall notify the Company in writing as soon as practicable of any Claim which could relate to an Indemnifiable Event or for which Indemnitee could seek Expense Advances, including a brief description (based upon information then available to Indemnitee) of the nature of, and the facts underlying, such Claim. The failure by Indemnitee to timely notify the Company hereunder shall not relieve the Company from any liability hereunder except that the Company shall not be liable to indemnify Indemnitee under this Agreement with respect to any judicial award in a Claim related to an Indemnifiable Event if the Company was not given a reasonable and timely opportunity to participate at its expense in the defense of such action. If at the time of the receipt of such notice, the Company has directors’ and officers’ liability insurance in effect under which coverage for Claims related to Indemnifiable Events is potentially available, the Company shall give prompt written notice to the applicable insurers in accordance with the procedures set forth in the applicable policies. The Company shall provide to Indemnitee a copy of such notice delivered to the applicable insurers, and copies of all subsequent correspondence between the Company and such insurers regarding the Claim, in each case substantially concurrently with the delivery or receipt thereof by the Company.
(b) Defense of Claims. The Company shall be entitled to participate in the defense of any Claim relating to an Indemnifiable Event at its own expense and, except as otherwise provided below, to the extent the Company so wishes, it may assume the defense thereof with counsel reasonably satisfactory to Indemnitee. After notice from the Company to Indemnitee of its election to assume the defense of any such Claim, the Company shall not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently directly incurred by Indemnitee in connection with Indemnitee’s defense of such Claim other than reasonable costs of investigation or as otherwise provided below. Indemnitee shall have the right to employ its own legal counsel in such Claim, but all Expenses related to such counsel incurred after notice from the Company of its assumption of the defense shall be at Indemnitee’s own expense; provided, however, that if (i) Indemnitee’s employment of its own legal counsel has been authorized by the Company, (ii) Indemnitee has reasonably determined that there may be a conflict of interest between Indemnitee and the Company in the defense of such Claim, (iii) after a Change in Control, Indemnitee’s employment of its own counsel has been approved by the Independent Counsel or (iv) the Company shall not in fact have employed counsel to assume the defense of such Claim, then Indemnitee shall be entitled to retain its own separate counsel (but not more than one law firm plus, if applicable, local counsel in respect of any such Claim) and all Expenses related to such separate counsel shall be borne by the Company.
7. Procedure upon Application for Indemnification. In order to obtain indemnification pursuant to this Agreement, Indemnitee shall submit to the Company a written request therefor, including in such request such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of the Claim, provided that documentation and information need not be so provided to the extent that the provision thereof would undermine or otherwise jeopardize attorney-client privilege. Indemnification shall be made insofar as the Company determines Indemnitee is entitled to indemnification in accordance with Section 8 below.
8. Determination of Right to Indemnification.
(a) Mandatory Indemnification; Indemnification as a Witness.
(i) To the extent that Indemnitee shall have been successful on the merits or otherwise in defense of any Claim relating to an Indemnifiable Event or any portion thereof or in defense of any issue or matter therein, including without limitation dismissal without prejudice, Indemnitee shall be indemnified against all Losses relating to such Claim in accordance with Section 2 to the fullest extent allowable by law, and no Standard of Conduct Determination (as defined in Section 8(b)) shall be required.
(ii) To the extent that Indemnitee’s involvement in a Claim relating to an Indemnifiable Event is to prepare to serve and serve as a witness, and not as a party, the Indemnitee shall be indemnified against all Losses incurred in connection therewith to the fullest extent allowable by law and no Standard of Conduct Determination (as defined in Section 8(b)) shall be required.
(b) Standard of Conduct. To the extent that the provisions of Section 8(a) are inapplicable to a Claim related to an Indemnifiable Event that shall have been finally disposed of, any determination of whether Indemnitee has satisfied any applicable standard of conduct under Delaware law that is a legally required condition to indemnification of Indemnitee hereunder against Losses relating to such Claim and any determination that Expense Advances must be repaid to the Company (a “Standard of Conduct Determination”) shall be made as follows:
(i) if no Change in Control has occurred, (A) by a majority vote of the Disinterested Directors, even if less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum or (C) if there are no such Disinterested Directors, by Independent Counsel in a written opinion addressed to the Board, a copy of which shall be delivered to Indemnitee; and
(ii) if a Change in Control shall have occurred, (A) if the Indemnitee so requests in writing, by a majority vote of the Disinterested Directors, even if less than a quorum of the Board or (B) otherwise, by Independent Counsel in a written opinion addressed to the Board, a copy of which shall be delivered to Indemnitee.
The Company shall indemnify and hold harmless Indemnitee against and, if requested by Indemnitee, shall reimburse Indemnitee for, or advance to Indemnitee, within thirty (30) calendar days of such request, any and all Expenses incurred by Indemnitee in cooperating with the person or persons making such Standard of Conduct Determination.
(c) Making the Standard of Conduct Determination. The Company shall use its reasonable best efforts to cause any Standard of Conduct Determination required under Section 8(b) to be made as promptly as practicable. If the person or persons designated to make the Standard of Conduct Determination under Section 8(b) shall not have made a determination within ten (10) calendar days after the later of (A) receipt by the Company of a written request from Indemnitee for indemnification pursuant to Section 7 (the date of such receipt being the “Notification Date”) and (B) the selection of an Independent Counsel, if such determination is to be made by Independent Counsel, then Indemnitee shall be deemed to have satisfied the applicable standard of conduct; provided that such ten (10) calendar days may be extended for a reasonable time, not to exceed an additional ten (10) calendar days, if the person or persons making such determination in good faith requires such additional time to obtain or evaluate information relating thereto. Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement of Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of any Claim.
(d) Payment of Indemnification. If, in regard to any Losses:
(i) Indemnitee shall be entitled to indemnification pursuant to Section 8(a);
(ii) no Standard Conduct Determination is legally required as a condition to indemnification of Indemnitee hereunder; or
(iii) Indemnitee has been determined or deemed pursuant to Section 8(b) or Section 8(c) to have satisfied the Standard of Conduct Determination,
then the Company shall pay to Indemnitee, within thirty (30) calendar days after the later of (A) the Notification Date or (B) the earliest date on which the applicable criterion specified in clause (i), (ii) or (iii) is satisfied, an amount equal to such Losses.
(e) Selection of Independent Counsel for Standard of Conduct Determination. If a Standard of Conduct Determination is to be made by Independent Counsel pursuant to Section 8(b)(i), the Independent Counsel shall be selected by the Board of Directors, and the Company shall give written notice to Indemnitee advising him of the identity of the Independent Counsel so selected. If a Standard of Conduct Determination is to be made by Independent Counsel pursuant to Section 8(b)(ii), the Independent Counsel shall be selected by Indemnitee, and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. In either case, Indemnitee or the Company, as applicable, may, within thirty (30) calendar days after receiving written notice of selection from the other, deliver to the other a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not satisfy the criteria set forth in the definition of “Independent Counsel” in Section 1(i), and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person or firm so selected shall act as Independent Counsel. If such written objection is properly and timely made and substantiated, (i) the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit; and (ii) the non-objecting party may, at its option, select an alternative Independent Counsel and give written notice to the other party advising such other party of the identity of the alternative Independent Counsel so selected, in which case the provisions of the two immediately preceding sentences, the introductory clause of this sentence and numbered clause (i) of this sentence shall apply to such subsequent selection and notice. If applicable, the provisions of clause (ii) of the immediately preceding sentence shall apply to successive alternative selections. If no Independent Counsel that is permitted under the foregoing provisions of this Section 8(e) to make the Standard of Conduct Determination shall have been selected within thirty (30) calendar days after the Company gives its initial notice pursuant to the first sentence of this Section 8(e) or Indemnitee gives its initial notice pursuant to the second sentence of this Section 8(e), as the case may be, either the Company or Indemnitee may petition the Court of Chancery of the State of Delaware (“Delaware Court”) to resolve any objection which shall have been made by the Company or Indemnitee to the other’s selection of Independent Counsel and/or to appoint as Independent Counsel a person to be selected by the Court or such other person as the Court shall designate, and the person or firm with respect to whom all objections are so resolved or the person or firm so appointed will act as Independent Counsel. In all events, the Company shall pay all of the reasonable fees and expenses of the Independent Counsel incurred in connection with the Independent Counsel’s determination pursuant to Section 8(b).
(f) Presumptions and Defenses.
(i) Indemnitee’s Entitlement to Indemnification. In making any Standard of Conduct Determination, the person or persons making such determination shall presume that Indemnitee has satisfied the applicable standard of conduct and is entitled to indemnification, and the Company shall have the burden of proof to overcome that presumption and establish that Indemnitee is not so entitled. Any Standard of Conduct Determination that is adverse to Indemnitee may be challenged by the Indemnitee in the Delaware Court. No determination by the Company (including by its directors or any Independent Counsel) that Indemnitee has not satisfied any applicable standard of conduct may be used as a defense to any legal proceedings brought by Indemnitee to secure indemnification or reimbursement or advance payment of Expenses by the Company hereunder or create a presumption that Indemnitee has not met any applicable standard of conduct.
(ii) Reliance as a Safe Harbor. For purposes of this Agreement, and without creating any presumption as to a lack of good faith if the following circumstances do not exist, Indemnitee shall be deemed to have acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company if Indemnitee’s actions or omissions to act are taken in good faith reliance upon the records of the Company, including its financial statements, or upon information, opinions, reports or statements furnished to Indemnitee by the officers or employees of the Company or any of its subsidiaries in the course of their duties, or by committees of the Board or by any other Person (including legal counsel, accountants and financial advisors) as to matters Indemnitee reasonably believes are within such other Person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Company. In addition, the knowledge and/or actions, or failures to act, of any director, officer, agent or employee of the Company shall not be imputed to Indemnitee for purposes of determining the right to indemnity hereunder.
(iii) No Other Presumptions. For purposes of this Agreement, the termination of any Claim by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere or its equivalent, will not create a presumption that Indemnitee did not meet any applicable standard of conduct or have any particular belief, or that indemnification hereunder is otherwise not permitted.
(iv) Defense to Indemnification and Burden of Proof. It shall be a defense to any action brought by Indemnitee against the Company to enforce this Agreement (other than an action brought to enforce a claim for Losses incurred in defending against a Claim related to an Indemnifiable Event in advance of its final disposition) that it is not permissible under applicable law for the Company to indemnify Indemnitee for the amount claimed. In connection with any such action or any related Standard of Conduct Determination, the burden of proving such a defense or that the Indemnitee did not satisfy the applicable standard of conduct shall be on the Company.
(v) Resolution of Claims. The Company acknowledges that a settlement or other disposition short of final judgment may be successful on the merits or otherwise for purposes of Section 8(a)(i) if it permits a party to avoid expense, delay, distraction, disruption and uncertainty. In the event that any Claim relating to an Indemnifiable Event to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such action, claim or proceeding with our without payment of money or other consideration) it shall be presumed that Indemnitee has been successful on the merits or otherwise for purposes of Section 8(a)(i). The Company shall have the burden of proof to overcome this presumption.
9. Exclusions from Indemnification. Notwithstanding anything in this Agreement to the contrary, the Company shall not be obligated to:
(a) indemnify or advance funds to Indemnitee for Expenses or Losses with respect to proceedings initiated by Indemnitee, including any proceedings against the Company or its directors, officers, employees or other indemnitees and not by way of defense, except:
(i) proceedings referenced in Section 4 above (unless a court of competent jurisdiction determines that each of the material assertions made by Indemnitee in such proceeding was not made in good faith or was frivolous); or
(ii) where the Company has joined in or the Board has consented to the initiation of such proceedings.
(b) indemnify Indemnitee if a final decision by a court of competent jurisdiction determines that such indemnification is prohibited by applicable law.
(c) indemnify Indemnitee for the disgorgement of profits arising from the purchase or sale by Indemnitee of securities of the Company in violation of Section 16(b) of the Exchange Act, or any similar successor statute.
10. Settlement of Claims. The Company shall not be liable to Indemnitee under this Agreement for any amounts paid in settlement of any threatened or pending Claim related to an Indemnifiable Event effected without the Company’s prior written consent, which shall not be unreasonably withheld; provided, however, that if a Change in Control has occurred, the Company shall be liable for indemnification of the Indemnitee for amounts paid in settlement if an Independent Counsel has approved the settlement. The Company shall not settle any Claim related to an Indemnifiable Event in any manner that would impose any Losses on the Indemnitee without the Indemnitee’s prior written consent.
11. Duration. All agreements and obligations of the Company contained herein shall continue during the period that Indemnitee is a director or officer of the Company (or is serving at the request of the Company as a director, officer, employee, member, trustee or agent of another Enterprise) and shall continue thereafter (i) so long as Indemnitee may be subject to any possible Claim relating to an Indemnifiable Event (including any rights of appeal thereto) and (ii) throughout the pendency of any proceeding (including any rights of appeal thereto) commenced by Indemnitee to enforce or interpret his or her rights under this Agreement, even if, in either case, he or she may have ceased to serve in such capacity at the time of any such Claim or proceeding.
12. Non-Exclusivity. The rights of Indemnitee hereunder will be in addition to any other rights Indemnitee may have under the Constituent Documents, the General Corporation Law of the State of Delaware, any other contract or otherwise (collectively, “Other Indemnity Provisions”); provided, however, that (a) to the extent that Indemnitee otherwise would have any greater right to indemnification under any Other Indemnity Provision, Indemnitee will be deemed to have such greater right hereunder and (b) to the extent that any change is made to any Other Indemnity Provision which permits any greater right to indemnification than that provided under this Agreement as of the date hereof, Indemnitee will be deemed to have such greater right hereunder. The Company will not adopt any amendment to any of the Constituent Documents the effect of which would be to deny, diminish or encumber Indemnitee’s right to indemnification under this Agreement or any Other Indemnity Provision.
13. Liability Insurance. For the duration of Indemnitee’s service as a director of the Company, and thereafter for so long as Indemnitee shall be subject to any pending Claim relating to an Indemnifiable Event, the Company shall use commercially reasonable efforts (taking into account the scope and amount of coverage available relative to the cost thereof) to continue to maintain in effect policies of directors’ and officers’ liability insurance providing coverage that is at least substantially comparable in scope and amount to that provided by the Company’s current policies of directors’ and officers’ liability insurance. In all policies of directors’ and officers’ liability insurance maintained by the Company, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee the same rights and benefits as are provided to the most favorably insured of the Company’s directors, if Indemnitee is a director, or of the Company’s officers, if Indemnitee is an officer (and not a director) by such policy. Upon request, the Company will provide to Indemnitee copies of all directors’ and officers’ liability insurance applications, binders, policies, declarations, endorsements and other related materials.
14. No Duplication of Payments. The Company shall not be liable under this Agreement to make any payment to Indemnitee in respect of any Losses to the extent Indemnitee has otherwise received payment under any insurance policy, the Constituent Documents, Other Indemnity Provisions or otherwise of the amounts otherwise indemnifiable by the Company hereunder.
15. Subrogation. In the event of payment to Indemnitee under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee. Indemnitee shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights.
16. Amendments. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be binding unless in the form of a writing signed by the party against whom enforcement of the waiver is sought, and no such waiver shall operate as a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver. Except as specifically provided herein, no failure to exercise or any delay in exercising any right or remedy hereunder shall constitute a waiver thereof.
17. Binding Effect. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company), assigns, spouses, heirs and personal and legal representatives. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part of the business and/or assets of the Company, by written agreement in form and substances satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.
18. Severability. The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any portion thereof) are held by a court of competent jurisdiction to be invalid, illegal, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.
19. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand, against receipt, or mailed, by postage prepaid, certified or registered mail:
(a) if to Indemnitee, to the address set forth on the signature page hereto.
(b) if to the Company, to: LightPath Technologies, Inc.
Attn: Shmuel Rubin
2603 Challenger Tech Court, Suite 100
Orlando, Florida 32826
Notice of change of address shall be effective only when given in accordance with this Section. All notices complying with this Section shall be deemed to have been received on the date of hand delivery or on the third business day after mailing.
20. Governing Law and Forum. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware applicable to contracts made and to be performed in such state without giving effect to its principles of conflicts of laws. The Company and Indemnitee hereby irrevocably and unconditionally: (a) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Delaware Court and not in any other state or federal court in the United States, (b) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement and (c) waive, and agree not to plead or make, any claim that the Delaware Court lacks venue or that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.
21. Headings. The headings of the sections and paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction or interpretation thereof.
22. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original, but all of which together shall constitute one and the same Agreement.
[SIGNATURE PAGE FOLLOWS]IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
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LIGHTPATH TECHNOLOGIES, INC. |
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By: Name: Shmuel Rubin Title: President and Chief Executive Officer |
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INDEMNITEE |
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By: Name: Address: |
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EXHIBIT 4.1
DESCRIPTION OF THE REGISTRANT’S SECURITIES REGISTERED PURSUANT TO
SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
The following is a summary of all material characteristics of the capital stock of LightPath Technologies, Inc., a Delaware corporation (“LightPath,” the “Company,” “we,” “us,” or “our”) as set forth in our Certificate of Incorporation, as amended (the “Certificate of Incorporation”) and our Amended and Restated Bylaws, as further amended (the “Bylaws”), and as registered under Section 12 of the Securities Exchange Act of 1934, as amended. The summary does not purport to be complete and is qualified in its entirety by reference to our Certificate of Incorporation and our Bylaws, each of which are incorporated by reference as exhibits to the Annual Report on Form 10-K of which this Exhibit 4.1 is a part and to the provisions of the Delaware General Corporate Law (the “DGCL”). We encourage you to review complete copies of our Certificate of Incorporation and our Bylaws, and the applicable provisions of the DGCL for additional information.
General
Our authorized capital stock consists of 105,000,000 shares, divided into 100,000,000 shares of common stock, par value $0.01 per share (the “Common Stock”), and 5,000,000 shares of preferred stock, par value $0.01 per share (“Preferred Stock”). Under our Certificate of Incorporation, our board of directors (our “Board”) has the authority to issue such shares of Common Stock and Preferred Stock in one or more classes or series, with such voting powers, designations, preferences and relative, participating, optional or other special rights, if any, and such qualifications, limitations or restrictions thereof, if any, as shall be provided for in a resolution or resolutions adopted by our Board and filed as designations.
Class A Common Stock
Of the 100,000,000 shares of Common Stock authorized in our Certificate of Incorporation, our Board has designated 94,500,000 shares as Class A common stock, par value $0.01 per share (the “Class A Common Stock”).
Holders of our Class A Common Stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders, including the election of directors, and are entitled to receive dividends when and as declared by our Board out of funds legally available therefore for distribution to stockholders and to share ratably in the assets legally available for distribution to stockholders in the event of the liquidation or dissolution, whether voluntary or involuntary, of LightPath. We have not paid any dividends and do not anticipate paying any dividends on our Class A Common Stock in the foreseeable future. It is our present policy to retain earnings, if any, for use in the development of our business. Our Class A Common Stockholders do not have cumulative voting rights in the election of directors and have no preemptive, subscription, or conversion rights. Our Class A Common Stock is not subject to redemption by us.
The transfer agent and registrar for our Class A Common Stock is Computershare Trust Company, N.A.
Preferred Stock
Of the 5,000,000 shares of Preferred Stock authorized, our Board has previously designated:
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250 shares of Preferred Stock as Series A Preferred Stock, all previously outstanding shares of which have been previously redeemed or converted into shares of our Class A Common Stock and may not be reissued; |
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300 shares of Preferred Stock as Series B Preferred Stock, all previously outstanding shares of which have been previously redeemed or converted into shares of our Class A Common Stock and may not be reissued; |
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500 shares of Preferred Stock as Series C Preferred Stock, all previously outstanding shares of which have been previously redeemed or converted into shares of our Class A Common Stock and may not be reissued; |
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500,000 shares of Preferred Stock as Series D Preferred Stock, none of which have been issued; however, in 1998, our Board declared a dividend distribution as a right to purchase one share of Series D Preferred Stock for each outstanding share of Class A Common Stock upon occurrence of certain events. The rights expired on February 28, 2021; |
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500 shares of Preferred Stock as Series F Preferred Stock, all previously outstanding shares of which have been previously redeemed or converted into shares of our Class A Common Stock and may not be reissued; and |
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35,111 shares of Preferred Stock as Series G Convertible Preferred Stock. |
Of the 5,000,000 shares of Preferred Stock, 4,463,339 shares of our Preferred Stock remain available for designation by our Board. Accordingly, our Board is empowered, without stockholder approval, to issue Preferred Stock with dividend, liquidation, conversion, voting or other rights that could adversely affect the voting power or other rights of the holders of Common Stock. The issuance of Preferred Stock could have the effect of restricting dividends on the Class A Common Stock, diluting the voting power of the Class A Common Stock, impairing the liquidation rights of the Class A Common Stock, or delaying or preventing a change in control of us, all without further action by our stockholders.
Certain Provisions of our Certificate of Incorporation, our Bylaws, and the DGCL
Certain provisions in our Certificate of Incorporation and Bylaws, as well as certain provisions of the DGCL, may be deemed to have an anti-takeover effect and may delay, deter, or prevent a tender offer or takeover attempt that a stockholder might consider to be in its best interests, including attempts that might result in a premium being paid over the market price of the shares held by stockholders. These provisions contained in our Certificate of Incorporation and Bylaws include the items described below.
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Classified Board. Our Certificate of Incorporation provides that our Board is to be divided into three classes, as equal in number as possible, with directors in each class serving three-year terms. Provisions of this type may serve to delay or prevent an acquisition of us or a change in our directors and officers. |
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No Written Consents. Our Certificate of Incorporation and Bylaws provide that all stockholder actions must be effected at a duly called meeting of stockholders and not by written consent. |
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Special Meetings of Stockholders. Our Bylaws provide that special meetings of our stockholders may be called only by the Chair of the Board, President, or a majority of our Board. |
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Stockholder Advance Notice Procedures. Our Bylaws provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide timely notice in writing and also specify requirements as to the form and content of a stockholder’s notice. These provisions may delay or preclude stockholders from bringing matters before a meeting of our stockholders or from making nominations for directors at a meeting of stockholders, which could delay or deter takeover attempts or changes in our management. |
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No Cumulative Voting. Our Certificate of Incorporation does not include a provision for cumulative voting for directors. Under cumulative voting, a minority stockholder holding a sufficient percentage of a class of shares could be able to ensure the election of one or more directors. |
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Exclusive Forum. Our Bylaws provide that unless we consent in writing to the selection of an alternative forum, the courts in the State of Delaware are, to the fullest extent permitted by applicable law, the sole and exclusive forum for any claims, including claims in the right of the Company, brought by a stockholder (i) that are based upon a violation of a duty by a current or former director or officer or stockholder in such capacity or (ii) as to which the DGCL confers jurisdiction upon the Court of Chancery of the State of Delaware. |
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Undesignated Preferred Stock. Because our Board has the power to establish the preferences and rights of the shares of any additional series of Preferred Stock, it may afford holders of any Preferred Stock preferences, powers, and rights, including voting and dividend rights, senior to the rights of holders of our Class A Common Stock, which could adversely affect the holders of our Class A Common Stock and could discourage a takeover of us even if a change of control of LightPath would be beneficial to the interests of our stockholders. |
These and other provisions contained in our Certificate of Incorporation and Bylaws are expected to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with our Board. However, these provisions could delay or discourage transactions involving an actual or potential change in control of us, including transactions in which stockholders might otherwise receive a premium for their shares over then current prices. Such provisions could also limit the ability of stockholders to remove current management or approve transactions that stockholders may deem to be in their best interests.
In addition, we are subject to the provisions of Section 203 of the DGCL. Section 203 of the DGCL prohibits a publicly-held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years after the person became an interested stockholder, unless:
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The board of directors of the corporation approved the business combination or other transaction in which the person became an interested stockholder prior to the date of the business combination or other transaction; |
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Upon consummation of the transaction that resulted in the person becoming an interested stockholder, the person owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding, shares owned by persons who are directors and also officers of the corporation and shares issued under which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or |
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On or subsequent to the date the person became an interested stockholder, the board of directors of the corporation approved the business combination and the stockholders of the corporation authorized the business combination at an annual or special meeting of stockholders by the affirmative vote of at least 66-2/3% of the outstanding voting stock of the corporation that is not owned by the interested stockholder. |
A “business combination” includes mergers, asset sales, and other transactions resulting in a financial benefit to the interested stockholder. Subject to certain exceptions, an “interested stockholder” is a person who, together with affiliates and associates, owns, or within the prior three years did own, 15% or more of a corporation’s voting stock.
Section 203 of the DGCL could depress our stock price and delay, discourage, or prohibit transactions not approved in advance by our Board, such as takeover attempts that might otherwise involve the payment to our stockholders of a premium over the market price of our Class A Common Stock.