10-Q
Syntec Optics Holdings, Inc. (OPTX)
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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
(MARKONE)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Forthe quarter ended ### March 31, 2026
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from to
Commission
file number: 001-41034
SYNTEC
OPTICS HOLDINGS, INC.
(Exact Name of Registrant as Specified in Its Charter)
| Delaware | 87-0816957 |
|---|---|
| (State<br> or other jurisdiction of<br><br> <br>incorporation<br> or organization) | (I.R.S.<br> Employer<br><br> <br>Identification<br> No.) |
515Lee Rd.
Rochester,NY 14606
(Address of principal executive offices and zip code)
(585)464-9336
(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 |
|---|---|---|
| Common<br> stock, par value $0.0001 per share | OPTX | The<br> Nasdaq Capital Market |
| Redeemable<br> warrants, exercisable for shares of common stock at an exercise price of $11.50 per share | OPTXW | The<br> Nasdaq Capital Market |
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large<br> accelerated filer | ☐ | Accelerated<br> filer | ☐ |
|---|---|---|---|
| Non-accelerated<br> filer | ☒ | Smaller<br> reporting company | ☒ |
| Emerging<br> 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As
of May 12, 2026, there were 40,279,878 shares of Class A common stock, par value $0.0001 per share, issued and outstanding.
SYNTEC
OPTICS HOLDINGS, INC.
FORM
10-Q FOR THE QUARTER ENDED MARCH 31, 2026
TABLE
OF CONTENTS
| Page | |
|---|---|
| Part<br> I. FINANCIAL INFORMATION | 1 |
| Item<br> 1. Interim Unaudited Condensed Consolidated Financial Statements | 1 |
| Condensed<br> Consolidated Balance Sheets as of March 31, 2026 (Unaudited) and December 31, 2025 | 1 |
| Condensed<br> Consolidated Statements of Operations for the Three Months ended March 31, 2026 and 2025 (Unaudited) | 2 |
| Condensed<br> Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2026 and 2025 (Unaudited) | 3 |
| Condensed<br> Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025 (Unaudited) | 5 |
| Notes<br> to Condensed Consolidated Financial Statements (Unaudited) | 6 |
| Item<br> 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 12 |
| Item<br> 3. Quantitative and Qualitative Disclosures Regarding Market Risk | 19 |
| Item<br> 4. Controls and Procedures | 20 |
| Part<br> II. OTHER INFORMATION | 22 |
| Item<br> 1. Legal Proceedings | 22 |
| Item<br> 1A. Risk Factors | 22 |
| Item<br> 2. Unregistered Sales of Equity Securities and Use of Proceeds | 22 |
| Item<br> 3. Defaults Upon Senior Securities | 22 |
| Item<br> 4. Mine Safety Disclosures | 22 |
| Item<br> 5. Other Information | 22 |
| Item<br> 6. Exhibits | 23 |
| SIGNATURES | 24 |
PART
I - FINANCIAL INFORMATION
Item1. Interim Unaudited Condensed Consolidated Financial Statements
SYNTEC
OPTICS HOLDINGS, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
MARCH
31, 2026 AND DECEMBER 31, 2025
| 2025 | |||
|---|---|---|---|
| ASSETS | |||
| Current Assets | |||
| Cash | 617,007 | $ | 358,867 |
| Accounts Receivable, Net | 5,439,501 | 6,241,768 | |
| Inventory | 7,798,397 | 7,884,943 | |
| Prepaid Expenses and Other Assets | 509,110 | 655,827 | |
| Total Current Assets | 14,364,015 | 15,141,405 | |
| Property and Equipment, Net | 9,137,149 | 9,172,703 | |
| Total Assets | 23,501,164 | $ | 24,314,108 |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||
| Current Liabilities | |||
| Accounts Payable | 2,433,745 | $ | 2,691,748 |
| Accrued Expenses | 855,915 | 683,397 | |
| Federal Income Tax Payable | 169,582 | 169,582 | |
| Deferred Revenue | 74,794 | 66,420 | |
| Line of Credit | 6,763,863 | 6,763,863 | |
| Current Maturities of Debt Obligations | 94,586 | 93,358 | |
| Current Maturities of Debt Obligations - Related Party | 463,530 | 406,495 | |
| Current Maturities of Debt Obligations | 463,530 | 406,495 | |
| Current Maturities of Finance Lease Obligations | 361,717 | 354,499 | |
| Total Current Liabilities | 11,217,732 | 11,229,362 | |
| Long-Term Liabilities | |||
| Long-Term Debt Obligations | 1,246,936 | 1,267,043 | |
| Long-Term Debt Obligations - Related Party | 1,005,203 | 862,237 | |
| Long-Term Debt Obligations | 1,005,203 | 862,237 | |
| Long-Term Finance Lease Obligations | 1,313,295 | 1,414,611 | |
| Total Long-Term Liabilities | 3,565,434 | 3,543,891 | |
| Total Liabilities | 14,783,166 | 14,773,253 | |
| Stockholders’ Equity | |||
| CL A Common Stock, Par value .0001 per share; 121,000,000 authorized; 36,994,164<br> issued and outstanding as of March 31, 2026; 36,920,226 issued and outstanding as of December 31, 2025; | 3,699 | 3,692 | |
| Common stock, value | 3,699 | 3,692 | |
| Additional Paid-In Capital | 2,752,174 | 2,677,181 | |
| Retained Earnings | 5,962,125 | 6,859,982 | |
| Total Stockholders’ Equity | 8,717,998 | 9,540,855 | |
| Total Liabilities and Stockholders’ Equity | 23,501,164 | $ | 24,314,108 |
All values are in US Dollars.
The
accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
| 1 |
| --- |
SYNTEC
OPTICS HOLDINGS, INC.
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR
THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025
| 2026 | 2025 | |||||
|---|---|---|---|---|---|---|
| Net Sales | $ | 6,513,366 | $ | 7,069,042 | ||
| Cost of Goods Sold | 5,552,574 | 4,760,424 | ||||
| Gross Profit | 960,792 | 2,308,618 | ||||
| General and Administrative Expenses | 1,736,839 | 1,780,166 | ||||
| (Loss) Income from Operations | (776,047 | ) | 528,452 | |||
| Other (Expense) Income | ||||||
| Other Income | 69,300 | 5,697 | ||||
| Interest Expense, Including Amortization of Debt Issuance<br> Costs | (191,110 | ) | (200,896 | ) | ||
| Total Other Expense | (121,810 | ) | (195,199 | ) | ||
| (Loss) Income Before Provision for (Benefit) Income Taxes | (897,857 | ) | 333,253 | |||
| Provision for Income Taxes | - | 9,588 | ||||
| Net (Loss) Income | $ | (897,857 | ) | $ | 323,665 | |
| Net (Loss) Income per Common Share | ||||||
| Basic and diluted | $ | (0.02 | ) | $ | 0.01 | |
| Weighted Average Number of Common Shares Outstanding | ||||||
| Basic and diluted | 36,953,087 | 36,920,226 |
The
accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
| 2 |
| --- |
SYNTEC
OPTICS HOLDINGS, INC.
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR
THE THREE MONTHS ENDED MARCH 31, 2026
| Additional | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Common Stock | Paid-In | Retained | ||||||||||
| Shares | Amount | Capital | Earnings | Total | ||||||||
| Balances, December 31, 2025 | 36,920,226 | $ | 3,692 | $ | 2,677,181 | $ | 6,859,982 | $ | 9,540,855 | |||
| Net Loss | - | - | - | (897,857 | ) | (897,857 | ) | |||||
| Stock-Based Compensation | 73,938 | 7 | 74,993 | - | 75,000 | |||||||
| Balances, March 31, 2026 | 36,994,164 | $ | 3,699 | $ | 2,752,174 | $ | 5,962,125 | $ | 8,717,998 |
The accompanying notes are an integral part of theunaudited condensed consolidated financial statements.
| 3 |
| --- |
SYNTEC
OPTICS HOLDINGS, INC.
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR
THE THREE MONTHS ENDED MARCH 31, 2025
| Additional | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Common Stock | Paid-In | Retained | |||||||||
| Shares | Amount | Capital | Earnings | Total | |||||||
| Balances, December 31, 2024 | 36,688,266 | $ | 3,669 | $ | 2,377,204 | $ | 8,653,209 | $ | 11,034,082 | ||
| Balances | 36,688,266 | $ | 3,669 | $ | 2,377,204 | $ | 8,653,209 | 11,034,082 | |||
| Net Income | - | - | - | 323,665 | 323,665 | ||||||
| Net Income (Loss) | - | - | - | 323,665 | 323,665 | ||||||
| Stock-Based Compensation | 231,960 | 23 | (23 | ) | - | - | |||||
| Balances, March 31, 2025 | 36,920,226 | $ | 3,692 | $ | 2,377,181 | $ | 8,976,874 | $ | 11,357,747 | ||
| Balances | 36,920,226 | $ | 3,692 | $ | 2,377,181 | $ | 8,976,874 | $ | 11,357,747 |
The
accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
| 4 |
| --- |
SYNTEC
OPTICS HOLDINGS, INC.
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR
THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025
| 2026 | 2025 | |||||
|---|---|---|---|---|---|---|
| Cash Flows From Operating Activities | ||||||
| Net (Loss) Income | $ | (897,857 | ) | $ | 323,665 | |
| Adjustments to Reconcile (Loss) Income to Net Cash | ||||||
| Provided By Operating Activities: | ||||||
| Adjustments to Reconcile Loss to Net Cash (Used In) Provided By Operating<br> Activities: | ||||||
| Depreciation | 539,682 | 710,804 | ||||
| Amortization of Debt Issuance Costs | 4,170 | 2,416 | ||||
| Stock-Based Compensation | 75,000 | - | ||||
| Change in Allowance for Expected Credit Losses | 105,195 | (15,244 | ) | |||
| Change in Reserve for Obsolescence | 2,298 | 50,345 | ||||
| (Increase) Decrease in: | ||||||
| Accounts Receivable | 697,072 | (568,310 | ) | |||
| Inventory | 84,248 | (692,092 | ) | |||
| Prepaid Expenses and Other Assets | 146,717 | 33,487 | ||||
| Increase (Decrease) in: | ||||||
| Accounts Payables and Accrued Expenses | (295,288 | ) | 279,142 | |||
| Federal Income Tax Payable | - | 179,376 | ||||
| Deferred Revenue | 8,374 | (4,299 | ) | |||
| Net Cash Provided By Operating Activities | 469,611 | 299,290 | ||||
| Cash Flows From Investing Activities | ||||||
| Purchases of Property and Equipment | (294,325 | ) | (214,731 | ) | ||
| Net Cash Used in Investing Activities | (294,325 | ) | (214,731 | ) | ||
| Cash Flows From Financing Activities | ||||||
| Borrowing on Debt Obligations - Related Parties | 200,001 | - | ||||
| Repayments on Debt Obligations | (23,049 | ) | (114,277 | ) | ||
| Repayments on Finance Lease Obligations | (94,098 | ) | (28,165 | ) | ||
| Net Cash Provided By (Used in) Financing Activities | 82,854 | (142,442 | ) | |||
| Net Increase (Decrease) in Cash | 258,140 | (57,883 | ) | |||
| Cash - Beginning | 358,867 | 598,787 | ||||
| Cash - Ending | $ | 617,007 | $ | 540,904 | ||
| Supplemental Cash Flow Disclosures: | ||||||
| Cash Paid for Interest | $ | 159,714 | $ | 201,956 | ||
| Cash Paid for Taxes | $ | - | $ | - | ||
| Supplemental Disclosures of Non-Cash Investing Activities: | ||||||
| Assets Acquired and Included in Accounts Payable | $ | 209,803 | $ | 168,628 | ||
| Issuance of common stock for stock-based compensation | $ | 7 | $ | 23 |
The
accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
| 5 |
| --- |
SYNTEC
OPTICS HOLDINGS, INC.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note1 — Description of Organization and Business Operations
Natureof Business
Syntec Optics Holdings, Inc. (the “Company” or “Syntec Optics”) is a vertically integrated manufacturer of optics and photonics components and sub-systems – from opto-mechanicals to optical elements of various geometries, diamond turned optics – both prototype and production, and optical systems including optics assembly, electro-optics assembly, design, and coating. Sales are made to customers in the United States and Europe in defense, medical, and consumer end-markets. The Company has one reporting segment as its operating segments meet the requirements for aggregation.
Note2 — Summary of Significant Accounting Policies
The Company has provided a discussion of significant accounting policies, estimates and judgements in its 2025 Annual Report. There have been no changes to the Company’s significant accounting policies since December 31, 2025.
Basisof Presentation
The accompanying interim unaudited condensed consolidated financial statements have been prepared by the Company in United States (“U.S.”) dollars and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”), the instructions to Form 10-Q and the provisions of Regulation S-X pertaining to interim unaudited condensed financial statements. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted. The interim unaudited condensed consolidated financial statements and notes included in this report should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. In the opinion of management, these interim unaudited condensed consolidated financial statements include all adjustments and accruals of a normal and recurring nature necessary to fairly state the results of the interim periods presented. The results for interim periods are not necessarily indicative of results to be expected for the full year or for any future periods.
Recent Accounting Pronouncements
In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments in this ASU provide that in developing reasonable and supportable forecasts as part of estimating expected credit losses for current accounts receivable and current contract assets, all entities may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. The amendments in this ASU are effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with updates to be applied on a prospective basis. The Company adopted ASU 2025-05 as of January 1, 2026. The adoption of ASU 2025-05 did not have a material impact on the Company’s financial statements.
Revision to Previously Issued Financial Statements
During the preparation of the Company’s interim
condensed consolidated financial statements as of and for the three months ended March 31, 2026, the Company identified an immaterial classification error related to the presentation of long-term debt obligations on the consolidated balance sheet as of December 31, 2025. Specifically, Long-Term Debt Obligations - Related Party, previously reported as $1,268,732 should have been $862,237, with the remaining $406,495 should have been classified within Long-Term Debt Obligations. Accordingly, the Company revised the December 31, 2025 presentation to reclassify $406,495 from Long-Term Debt Obligations - Related Party to Long-Term Debt Obligations, as noted on the condensed consolidated balance sheet herein. The revision had no effect on total liabilities, stockholders’ equity, results of operations, cash flows, or basic and diluted loss per share.
| 6 |
| --- |
SYNTEC
OPTICS HOLDINGS, INC.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note3 — Disaggregated Revenues
The following table disaggregates revenue by revenue recognition methodologies for the three months ended March 31:
Schedule of Disaggregated Revenues
| Three Months Ended March 31, | ||||
|---|---|---|---|---|
| 2026 | 2025 | |||
| Products | $ | 6,460,593 | $ | 6,920,222 |
| Custom Tooling | 23,889 | 118,820 | ||
| Non-Recurring Engineering | 28,884 | 30,000 | ||
| Total | $ | 6,513,366 | $ | 7,069,042 |
Syntec Optics’ management periodically reviews its revenues by its consumer, communication, medical, and defense end-markets. The purpose of this analysis is to determine its end market mix and identify trends. The following table disaggregates revenue as outlined above for the three months ended March 31:
| Three<br> Months Ended March 31, | ||||
|---|---|---|---|---|
| 2026 | 2025 | |||
| Communication | $ | 1,844,262 | $ | 1,861,378 |
| Consumer | 1,593,688 | 1,163,289 | ||
| Defense | 1,556,286 | 1,558,502 | ||
| Medical | 1,519,130 | 2,485,873 | ||
| Total | $ | 6,513,366 | $ | 7,069,042 |
| 7 |
| --- |
SYNTEC
OPTICS HOLDINGS, INC.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note4 — Inventory
Inventory consists of the following at March 31, 2026 and December 31, 2025:
Schedule of Inventory
| 2026 | 2025 | |||
|---|---|---|---|---|
| Raw Materials | $ | 364,404 | $ | 360,280 |
| Work-in-Process | 7,823,916 | 7,956,924 | ||
| Finished Goods | 195,947 | 151,311 | ||
| Inventory gross | 8,384,267 | 8,468,515 | ||
| Less: Reserve for Obsolescence | 585,870 | 583,572 | ||
| Inventory | $ | 7,798,397 | $ | 7,884,943 |
Note5 — Property and Equipment
Property and equipment consists of the following at March 31, 2026 and December 31, 2025:
Schedule of Property and Equipment
| 2026 | 2025 | |||
|---|---|---|---|---|
| Machinery and Equipment | $ | 35,045,729 | $ | 34,541,704 |
| Building and Leasehold Improvements | 5,483,617 | 5,483,616 | ||
| Land | 130,000 | 130,000 | ||
| Office Furniture and Equipment | 2,295,749 | 2,295,748 | ||
| Tooling | 169,408 | 169,307 | ||
| Vehicles | 24,059 | 24,059 | ||
| Property and Equipment Gross | 43,148,562 | 42,644,434 | ||
| Less: Accumulated Depreciation | 34,011,413 | 33,471,731 | ||
| Property and Equipment, Net | $ | 9,137,149 | $ | 9,172,703 |
Depreciation
expenses were $539,682 and $710,804 for the three months ended March 31, 2026 and 2025, respectively.
| 8 |
| --- |
SYNTEC
OPTICS HOLDINGS, INC.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note6 — Line of Credit
The
Company has a line of credit available in the amount of $7,500,000 with M&T Bank (the “Credit Agreement”). Borrowings may be made against the line of credit as Secured Overnight Financing Rate (“SOFR”) Loans. The weighted average rate on outstanding borrowings as of March 31, 2026 was 7.31%. As of March 31, 2026 and December 31, 2025, the Company had $6,763,863 outstanding under the line of credit facility, for both periods.
The Credit Agreement contains customary covenants and restrictions on the Company’s ability to engage in certain activities and financial covenants requiring the Company to maintain certain financial ratios. As of March 31, 2026, the Company was not in compliance with certain financial covenants under its Amended and Restated Credit Agreement with M&T Bank, including the minimum fixed charge coverage ratio of 1.10:1.00 and the maximum total leverage ratio of 4.75:1.00.
On May 5, 2026, the Company made a $2.0
million payment on the line of credit, reducing the balance to $4.8 million.
On May 13, 2026, the Company made a payment of approximately $4.8 million on the line of credit, reducing the balance to zero.
On May 13, 2026, the Company received a waiver
letter with M&T Bank related to the Company’s noncompliance with certain financial covenants under its Amended and Restated Credit Agreement as of March 31, 2026, including the minimum Fixed Charge Coverage Ratio and maximum Total Leverage Ratio, as well as certain mandatory prepayment provisions related to the Company’s April 2026 equity offering. In connection with the waiver, the Company paid down the outstanding balance on its line of credit to zero as of May 13, 2026 and paid a waiver fee of $50,000.
Pursuant to the waiver letter, the Company is required to maintain a minimum of $7.5 million of liquidity invested with M&T Bank. In addition, the previous minimum Fixed Charge Coverage Ratio and maximum Total Leverage Ratio financial covenants were removed from the Credit Agreement, and the maturity date of the Company’s $7.5 million revolving credit facility was extended to June 30, 2027.
Note7 — Long-Term Debt
Long-term debt consists of the following at March 31, 2026 and December 31, 2025:
Schedule of Long Term Debt Maturities
| 2025 | |||
|---|---|---|---|
| The Company entered into a 863,607 mortgage note payable, securitized by the Company’s<br> real estate and cross-collateralized with all Company assets, with M&T Bank, requiring monthly installments of 7,389, including<br> interest at a fixed rate of 6.13%. The note matures in February 2029. | 789,074 | $ | 799,052 |
| The Company entered into a 1,064,000 term note payable with the U.S. Small Business Administration,<br> requiring monthly installments of 6,652, including fees and interest at a fixed rate of 2.22%. The note matures in June 2036. The<br> note is secured by certain assets of the Company and a personal guaranty of the Company’s stockholder. | 603,369 | 616,440 | |
| On November 13, 2025, the Company entered into a 1,268,732<br> Stockholder Loan, the proceeds of which were applied to pay down the M&T term notes above. The note is subject to an M&T<br> Bank subordination agreement which may limit any repayments. The note amortization calls for monthly payments of 40,031.03<br> at 6.95%<br> effective annual rate and matures on October<br> 31, 2028. On February 28, 2026, the Company borrowed an additional 200,000<br> from the same stockholder with identical terms, other than the second loan matures on January<br> 31, 2029. | 1,468,733 | 1,268,732 | |
| Total Long-Term Debt | 2,861,176 | 2,684,224 | |
| Less: Unamortized Debt Issuance Costs | 50,921 | 55,091 | |
| Long-Term Debt, Less Unamortized Debt Issuance Costs | 2,810,255 | 2,629,133 | |
| Less: Current Maturities | 558,116 | 499,853 | |
| Long-Term Debt | 2,252,139 | $ | 2,129,280 |
All values are in US Dollars.
At March 31, 2026, the future debt maturities are as follows:
Schedule of Long Term Future Debt Maturities
| December 31, 2026 | $ | 413,981 |
|---|---|---|
| 2027 | 590,334 | |
| 2028 | 733,808 | |
| 2029 | 105,525 | |
| 2030 | 109,886 | |
| Thereafter | 907,642 | |
| Total | $ | 2,861,176 |
| 9 |
| --- |
SYNTEC
OPTICS HOLDINGS, INC.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note8 — Retirement Plan
The Company maintains a 401(k) retirement plan covering eligible employees of the Company and its affiliates. Under the plan, participants may defer up to 6% of their annual compensation, with Syntec Optics matching 50% of employee contributions. Total contributions for the Company for the three months ended March 31, 2026 and 2025 amounted to $42,000 and $49,000, respectively.
Note9 — Income Taxes
The income tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made.
The effective income tax rate was (32.5%)
and 20.3
% for the three months ended March 31, 2026 and 2025, respectively.
Note10 — Leases
During 2024, the Company entered into finance lease agreements for equipment utilized in its manufacturing facility.
The components of operating and finance lease costs are as follows for the three months ended March 31:
Schedule of Operating Lease and Finance Lease Costs
| Three<br> Months Ended March 31, | ||||
|---|---|---|---|---|
| 2026 | 2025 | |||
| Operating lease cost | $ | - | $ | - |
| Finance Lease Cost: | ||||
| Amortization of assets | 82,156 | 82,157 | ||
| Interest on liabilities | 34,514 | 41,764 | ||
| Total lease cost | $ | 116,670 | $ | 123,921 |
Supplemental cash flow information related to leases are as follows for the three months ended March 31:
Schedule of Cash Flow Information Related To Leases
| Three<br> Months Ended March 31, | ||||
|---|---|---|---|---|
| 2026 | 2025 | |||
| Cash paid for amounts included in measurement of lease obligations: | ||||
| Operating cash flows from operating leases | $ | - | $ | - |
| Operating cash flows from finance leases | 34,514 | 41,764 | ||
| Financing cash flows from finance leases | $ | 94,098 | $ | 28,165 |
The following table summarizes weighted average remaining lease term and discount rates as of March 31, 2026, and December 31, 2025:
Schedule of Weighted Average Remaining Lease Term
| March 31, 2026 | December 31, 2025 | |||||
|---|---|---|---|---|---|---|
| Weighted average remaining lease term (years) | ||||||
| Operating leases | N/A | N/A | ||||
| Finance leases | 3.76 | 4.00 | ||||
| Weighted average discount rate | ||||||
| Operating leases | N/A | N/A | ||||
| Finance leases | 8.4 | % | 8.4 | % |
Future maturities of our lease liabilities are as follows as of March 31, 2026:
Schedule of Future Maturities of Lease Liabilities
| 2026 remainder of year | $ | 385,143 | |
|---|---|---|---|
| 2027 | 513,525 | ||
| 2028 | 513,525 | ||
| 2029 | 513,524 | ||
| Thereafter | - | ||
| Total Undiscounted Lease Obligations | 1,925,717 | ||
| Less: Imputed Interest | (250,705 | ) | |
| Present Value of Lease Obligations | $ | 1,675,012 |
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SYNTEC
OPTICS HOLDINGS, INC.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note11 — Warrants
The following tables presents a roll-forward of the Company’s warrants from December 31, 2025 to March 31, 2026:
Schedule of Warrant
| Common Stock<br> Warrants | ||
|---|---|---|
| Warrants outstanding, December 31, 2025 | 14,107,989 | |
| Warrants exercised | - | |
| Warrants outstanding, March 31, 2026 | 14,107,989 |
Note12 — (Loss) Income Per Share
The following table sets forth the information needed to compute basic and diluted (loss) income per share for the three months ended March 31, 2026 and 2025:
Schedule of Basic And Diluted (Loss) Income Per Share
| 2026 | 2025 | ||||
|---|---|---|---|---|---|
| Three Months Ended <br>March 31, | |||||
| 2026 | 2025 | ||||
| Basic and diluted net (loss) income per share: | |||||
| Numerator: | |||||
| Net (loss) income | $ | (897,857 | ) | $ | 323,665 |
| Basic and diluted net (loss) income per share | $ | (0.02 | ) | $ | 0.01 |
| Denominator | |||||
| Weighted-average shares outstanding | 36,953,087 | 36,920,226 | |||
| Diluted Shares | 36,953,087 | 36,920,226 |
Note13 — Significant Customers
For
the three months ended March 31, 2026, the Company generated 53% of revenues from three customers. These three customers are in different end-markets utilizing diverse manufacturing capabilities from the Company. The outstanding accounts receivable due from these customers were approximately $2.5 million as of March 31, 2026.
For
the three months ended March 31, 2025, the Company generated 46% of revenues from three customers. The outstanding accounts receivable due from these customers were approximately $3.3 million as of March 31, 2025.
Note14 — Segment reporting
The Company operates as one operating segment. The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer, who reviews the financial statements on a consolidated basis. The CODM uses the Company’s long-range plan to allocate resources. The CODM makes decisions on resource allocation, assessments of performance, and monitors budget versus actual results using consolidated loss from operations.
Significant expenses within loss from operations, as well as within net loss, include general and administrative expenses, and other expenses which are each separately presented on the Company’s Consolidated Statements of Operations and Comprehensive Loss.
Note15 — Subsequent Events
On April 30, 2026, the Company completed an underwritten
public offering of 2,857,142 shares of its common stock at a public offering price of $7.00 per share. The gross proceeds from the offering were approximately $20.0 million, before deducting underwriting discounts, commissions and other offering expenses. Net proceeds to the Company were approximately $18.6 million.
The offering was conducted pursuant to the Company’s Registration Statement on Form S-1 (File No. 333-295335), which was declared effective by the Securities and Exchange Commission on April 28, 2026.
The Company granted the underwriter a 30-day option
to purchase up to an additional 428,571 shares of common stock at the public offering price, less underwriting discounts and commissions.
On May 1, 2026, the underwriter in the aforementioned
April 30 transaction chose to exercise its option to purchase an additional 428,571 shares of common stock. Net proceeds to the Company were approximately $2.8 million.
On May 5, 2026, the Company made a $2.0 million payment on the line
of credit, reducing the balance to $4,763,863.
On May 13, 2026, the Company made a payment of approximately $4.8 million on the line of credit, reducing the balance to zero.
On May 13, 2026, the Company received a waiver letter with M&T Bank related to the Company’s noncompliance with certain financial covenants under its Amended and Restated Credit Agreement as of March 31, 2026, including the minimum Fixed Charge Coverage Ratio and maximum Total Leverage Ratio, as well as certain mandatory prepayment provisions related to the Company’s April 2026 equity offering.
In connection with the waiver letter, the Company repaid the outstanding balance on its revolving line of credit to zero as of May 13, 2026, paid a waiver fee of $50,000, and agreed to maintain minimum liquidity of $7.5 million invested with M&T Bank. The Company’s revolving credit facility availability of $7.5 million remains in place and the maturity date was extended to June 30, 2027.
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Item2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The information in this Management’s Discussion and Analysis should be read in conjunction with the accompanying unaudited condensed financial statements and notes.
CautionaryNote Regarding Forward-Looking Statements
This report includes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions are intended to identify forward-looking statements. All statements other than statements of historical facts contained in this report, including among others, our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth are forward-looking statements. Our actual results and financial condition may differ materially from those express or implied in such forward-looking statements. Therefore, you should not rely on any of these forward-looking statements.
For a further list and description of various risks, relevant factors and uncertainties that could cause future results or events to differ materially from those expressed or implied in our forward-looking statements, see the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections in this report, our Annual Report on Form 10-K and 10-K/A for the fiscal year ended December 31, 2025 and our other filings with the Securities and Exchange Commission (the “SEC”). All forward-looking statements in this report are made only as of the date hereof or as indicated and represent our views as of the date of this report. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise, except as required by law.
Overview
Syntec Optics is vertically integrated from design and component manufacturing for lens system assembly to imaging module integration for system solutions. Making our own tools, molding, and nanomachining allows close interaction and recut ability, enabling special techniques to hold tolerances up to sub-micron level. Syntec Optics has assembled a world class design for manufacturability team to augment its production team with deep expertise to fully leverage our vertical integration from component making to optics and electronics assembly. Syntec Optics has steadily developed variety of other complementary manufacturing techniques to provide a wide suite of horizontal capabilities including thin films deposition coatings, glass molding, polymer molding, tool-making, mechanicals manufacturing, and nanomachining.
Syntec Optics became a leader in the industry by pioneering polymer-based optics and then subsequently adding glass optics and optics made from other materials including crystals and metals. Polymer-based optics provide numerous advantages compared to incumbent glass-based optics. Polymer-based optics are smaller, lower weight, lower cost, and offer very high-performance optical solutions. For all these reasons, Syntec Optics is able to deliver products to our clients that are lighter, smaller, and suitable for cutting edge technology products, including the newly evolving silicon photonics industry.
Our designs and assembly processes are developed in-house in the United States. In 2016, Syntec Optics expanded its manufacturing facility to nearly 90,000 square feet, allowing us to increase our production capacity and offer additional advanced manufacturing processes under one roof which provide us the ability to increase sales to existing customers and increase penetration of our end-markets. Our facility provides a streamlined, partially autonomous production process for our current customers, which comprises optical assembly, electro-optics assembly, polymer optics molding, glass optics molding, opto-mechanical assembly, nanomachining and thin films coating. Our facility also provides the ability to expand the number of advanced manufacturing processes to handle increased volumes of existing and new customer orders.
Syntec Optics focuses on four end markets of defense, medical, consumer, and communications all with several mission-critical applications with strong tailwinds.
In the last three years Syntec Optics launched low weight night vision optics and hybrid light-weight magnifiers and thermal clips in the defense end market. Syntec Optics also announced biomedical mirrors for sensing in the medical end market. Rounding out new product launches, in the communication end market, Syntec Optics launched microlens arrays and low earth satellite optics.
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KeyFactors Affecting Our Operating Results
Our financial position and results of operations depend to a significant extent on the following factors:
EndMarket Consumers
The demand for our products ultimately depends on demand from customers in our current end markets. We generate sales through (1) Tier 1 suppliers and (2) through OEMs.
An increasing proportion of our sales has been and is expected to continue to be derived from sales to defense. biomedical and industrial/consumer OEMs, driven by continued efforts to develop and expand sales to OEMs with whom we have longstanding relationships. Future OEM sales will be subject to risks and uncertainties, including the number of defense, biomedical and industrial/consumer products these OEMs manufacture and sell, which in turn may be driven by the expectations these OEMs have around end market demand.
Demand from end markets is impacted by a number of factors, including travel restrictions (global pandemics or geo-political conflicts), fuel costs and energy demands (including an increasing trend towards the use of green energy), as well as overall macro-economic conditions. Sales of our optics and photonics enabled components and sub-components have also benefited from the increased global conflict, the United States dynamic relationships with other world powers that may have a conflicting view with western-style democracy, the movement towards reshoring of advanced manufacturing, biomedical components and sub-components needed to support physicians in their battle against global pandemics, and the increased global demand for high-fidelity data communications on all corners of the globe.
Syntec Optics plans to further consolidate and add bolt-on acquisitions for inorganic growth in the fragmented photonics industry by expanding our portfolio of existing U.S.-based advanced manufacturing processes of making thin-film coated glass, crystal, and/or polymer components and their housings, which are ultimately assembled into high performance hybrid electro-optics sub-systems. By doing so, Syntec Optics plans to grow to the new end markets of communications and sensing. Syntec Optics entered the communications end market in 2023. Syntec Optics is currently engaged as a supplier for a U.S. Department of Commerce’s National Institute of Standards and Technology (“NIST”) funded research and development project for the sensing end market. The communication end market is characterized by the use of optics and photonics for data transmittal and reception of information, including, for example, satellite communications and other associated applications. The sensing end-market is characterized by the use of optics and photonics to detect scattered light or light with an altered refractive index due to the presence of a medium within a wide range of potential applications, including, for example, disease detection and other associated applications.
Supply
We currently rely on strategically selected electronics, highly engineered polymers and aluminum manufacturers located in the United States to manufacture our highly specialized optic and photonics enabled components and sub-components, and we intend to continue to rely on these suppliers going forward. Our close working relationships with our Unites States based suppliers, reflected in our ability to (x) increase our purchase order volumes (qualifying us for related volume-based discounts) and (y) order and receive delivery of raw materials in anticipation of required demand, has helped us moderate increased supply-related costs associated with inflation and to avoid potential shipment delays. To mitigate against potential adverse production events, we opted to build our inventory of key raw materials. In connection with these stockpiling activities, we experienced an increase in prepaid inventory compared to prior periods as suppliers required upfront deposits in response to supply chain disruptions.
As a result of the active steps we have taken to manage our inventory levels, we have not been subject to the shortages or price impacts that have been present for manufacturers of optic and photonic enabled components or sub-components.
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Productand Customer Mix
Our sales consist of sales of highly specialized optic and photonic enabled components and sub-components. These products are sold to different customer types (e.g., OEMs and Tier 1 manufacturers) and at different prices and involve varying levels of costs. In any particular period, changes in the mix and volume of particular products sold and the prices of those products relative to other products will impact our average selling price and our cost of goods sold. The price of our products may also increase as a result of increases in the cost of components due to inflation, labor and raw materials. In addition, revenues from these larger customers may fluctuate from time to time based on these customers’ business needs and customer experience, the timing of which may be affected by market conditions or other factors outside of our control. These customers have a broad product purchase mix across various departments of Syntec Optics. Syntec Optics supplies several mission critical components and sub-components to these customers that are not tied to a single application, customer initiative, or purchase order. We expect sales to increase as we further advance our full-system design expertise and product offerings and customers increasingly demand more sophisticated systems, rather than drop-in replacements. In addition to the impacts attributable to the general sales mix across our products, our results of operations are impacted by the relative margins of products sold. As we continue to introduce new products at varying price points, our overall gross margin may vary from period to period as a result of changes in product and customer mix.
ProductionCapacity
All of our design, advanced manufacturing and assembly currently takes place at our nearly 90,000 square foot headquarters and manufacturing facility located in Rochester, New York. We currently operate optical, opto-mechanical and electro-optical assembly lines in addition to molding, nanomachining, testing and thin-film production lines. Consistent with our operating history, we plan to continue to automate additional aspects of our advanced manufacturing operations. Our existing facility has the capacity to add additional production lines and construct and operate pilot production lines for new components and sub-components, all designed to maximize the capacity of our manufacturing facility. Although our automation efforts are expected to reduce our costs of goods, we may not fully recognize the anticipated savings when planned and could experience additional costs or disruptions to our production activities.
Competition
We compete with traditional glass optic manufacturers and electro-optic manufacturers, who primarily either import their products or components or manufacture products under a private label. As we continue to expand into new markets, develop new products and move towards production of our polymer based and glass-polymer based optic hybrids and photonics enabled components and sub-components, we will experience competition with a wider range of companies. These competitors may have greater resources than we do and may be able to devote greater resources to the development of their current and future technologies. Our competitors may be able to source materials and components at lower costs, which may require us to evaluate measures to reduce our own costs, lower the price of our products or increase sales volumes in order to maintain our expected levels of profitability.
Researchand Development
Our research and development are primarily focused on the advanced manufacturing of polymer and glass-polymer based optic and photonics enabled components and sub-components. The next stage in our technical development is to construct our products to optimize performance, lower weight and increase longevity to meet and exceed industry standards for our target end markets. Ongoing testing and optimizing of more complicated systems and sub-systems for our existing end markets will assist us in increasing penetration in our current end markets and expanding into targeted end markets.
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Componentsof Results of Operations
NetSales
Net sales are primarily generated from the sale of our optics and photonics enabled components and sub-components to OEMs.
Costof Goods Sold
Cost of goods sold includes the cost of raw materials and other components of our optic and photonic enabled components and sub-components, labor, overhead, utilities, and depreciation and amortization.
GrossProfit
Gross profit, calculated as net sales less cost of goods sold, may vary between periods and is primarily affected by various factors including average selling prices, product costs, product mix, customer mix and production volumes.
OperatingExpenses
Generaland Administrative
General and administrative costs include personnel-related expenses attributable to our executive, finance, human resources, selling and marketing, and information technology organizations, certain facility costs, office related depreciation, and fees for professional services.
TotalOther Income (Expense)
Other income (expense) consists primarily of interest expense and debt issuance costs.
Resultsof Operations
Comparisonsfor the Three Months Ended March 31, 2026 and 2025
The following table sets forth our results of operations for the three months ended March 31, 2026 and 2025, respectively. This data should be read together with our financial statements and related notes included elsewhere in this Quarterly Report and is qualified in its entirety by reference to such financial statements and related notes.
| Three Months Ended<br><br><br><br>March 31,<br>2026 | % of Net Sales | Three Months Ended<br><br><br><br>March 31,<br>2025 | % of Net Sales | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net Sales | $ | 6,513,366 | 100 | % | $ | 7,069,042 | 100 | % | ||||
| Cost of Goods Sold | 5,552,574 | 85 | % | 4,760,424 | 67 | % | ||||||
| Gross Profit | 960,792 | 15 | % | 2,308,618 | 33 | % | ||||||
| General and Administrative Expenses | 1,736,839 | 27 | % | 1,780,166 | 25 | % | ||||||
| (Loss) Income from Operations | (776,047 | ) | -12 | % | 528,452 | 7 | % | |||||
| Other (Expense) Income | ||||||||||||
| Other (Expense) Income | 69,300 | 1 | % | 5,697 | 0 | % | ||||||
| Interest Expense, Including Amortization of Debt Issuance Costs | (191,110 | ) | -3 | % | (200,896 | ) | -3 | % | ||||
| Total Other Expense | (121,810 | ) | -2 | % | (195,199 | ) | -3 | % | ||||
| (Loss) Income Before Benefit From Provision for Income Taxes | (897,857 | ) | -14 | % | 333,253 | 5 | % | |||||
| Provision for (Benefit From) Income Taxes | - | 0 | % | 9,588 | 0 | % | ||||||
| Net (Loss) Income | $ | (897,857 | ) | -14 | % | $ | 323,665 | 5 | % |
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NetSales
Net sales decreased by $0.6 million, or 8%, to $6.5 million for the three months ended March 31, 2026, as compared to $7.1 million for the three months ended March 31, 2025. This decrease was primarily due to decreases in medical markets of $1.0 million, partially offset by an increase in the consumer market of $0.4 million.
Costof Goods Sold
Cost of revenue increased by $0.8 million, to $5.6 million for the three months ended March 31, 2026, as compared to $4.8 million for the three months ended March 31, 2025. This increase was primarily due to an increase in material costs, particularly for aluminum.
GrossProfit
Gross profit decreased by 58%, to $1.0 million for the three months ended March 31, 2026, as compared to $2.3 million for the three months ended March 31, 2025. This decrease was primarily due to the decrease in revenue and the increase in costs of goods sold, as detailed above.
Generaland Administrative Expenses
General and administrative expenses remained flat, decreasing slightly by 2% for the quarter ended March 31, 2026, as compared to the same period for 2025.
TotalOther Expenses
Other expenses improved to an expense of $0.1 million for the three months ended March 31, 2026, from an expense of $0.2 million for the three months ended March 31, 2025.
IncomeTax Expense (Benefit)
Income tax expense (benefit) remained flat, with no material change when comparing the three months ended March 31, 2026 and 2025.
Net(loss) Income
We experienced a loss of $0.9 million for the three months ended March 31, 2026, as compared to income of $0.3 million for the same three month period ended in 2025. This increase in net loss was primarily due to a decline in sales of $0.6 million, and an increase in cost of goods sold of $0.8 million.
CriticalAccounting Estimates
Our condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these condensed consolidated financial statements requires us to make judgments and estimates that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions or conditions. On a recurring basis, we evaluate our judgments and estimates in light of changes in circumstances, facts, and experience. The effects of material revisions in an estimate, if any, will be reflected in the consolidated financial statements prospectively from the date of the change in the estimate.
We believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our unaudited condensed consolidated financial statements.
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InventoryValuation
We periodically review physical inventory for excess, obsolete, and potentially impaired items and reserves. Any such inventory is written down to net realizable value. The reserve estimate for excess and obsolete inventory is dependent on expected future use and requires management judgement.
IncomeTaxes
We account for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities using enacted rates. The effect of a change in tax rates on deferred taxes is recognized in income in the period that includes the enactment date.
We recognize the financial statement effect of an uncertain income tax position when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. Recognized income tax positions are measured at the largest amount that is greater than 50% likely to be realized. A valuation allowance is recorded to reduce deferred income tax assets to an amount, which in the opinion of management is more likely than not to be realized.
Management judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities, and any valuation allowance recorded against our deferred tax assets. We consider factors such as the cumulative income or loss in recent years; reversal of deferred tax liabilities; projected future taxable income exclusive of temporary differences; the character of the income tax asset, including income tax positions; tax planning strategies and the period over which we expect the deferred tax assets to be recovered in the determination of the valuation allowance. In the event that actual results differ from these estimates, or we adjust our estimates in the future, we may need to adjust our valuation allowance, which could materially impact our financial position and results of operations.
Non-GAAPFinancial Measures
This Quarterly Report includes a non-generally accepted account principles within the United States (“U.S. GAAP”) measure that we use to supplement our results presented in accordance with U.S. GAAP. EBITDA is defined as earnings before interest and other income, tax and depreciation and amortization. Adjusted EBITDA is calculated as EBITDA adjusted for non-recurring items, and business combination expenses. Adjusted EBITDA is a performance measure that we believe is useful to investors and analysts because it illustrates the underlying financial and business trends relating to our core, recurring results of operations and enhances comparability between periods.
Adjusted EBITDA is not a recognized measure under U.S. GAAP and is not intended to be a substitute for any U.S. GAAP financial measure and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry. Investors should exercise caution in comparing our non-GAAP measure to any similarly titled measure used by other companies. This non-GAAP measure excludes certain items required by U.S. GAAP and should not be considered as an alternative to information reported in accordance with U.S. GAAP.
AdjustedEBITDA
We define adjusted EBITDA, a non-GAAP financial measure, as net earnings (loss) before interest and other expenses, net, income tax expense, depreciation and amortization, as adjusted to exclude non-recurring items. We utilize adjusted EBITDA as an internal performance measure in the management of our operations because we believe the exclusion of these non-cash and non-recurring charges allow for a more relevant comparison of our results of operations to other companies in our industry and is in accordance with the Non-GAAP Financial Measures Compliance & Disclosure Interpretations (Reference Question 102.03).
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The Company has identified several non-recurring items included in our non-GAAP adjusted EBITDA financial measure. These items encompass management fees, professional & transaction fees, technology start-up costs, optical molding evaluation expenses, glass molding evaluation expenses, and executive transition expenses.
The table below presents our adjusted EBITDA, reconciled to net income for the three months ended March 31, 2026 and 2025.
NON-GAAP
RECONCILIATION OF EBITDA
FOR
THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025
| 2026 | 2025 | ||||
|---|---|---|---|---|---|
| Net (Loss) Income | $ | (897,857 | ) | $ | 323,665 |
| Stock-Based Compensation Expense BOD (1) | 75,000 | - | |||
| Depreciation | 539,682 | 710,804 | |||
| Amortization of Debt Issuance Costs | 4,170 | 2,416 | |||
| Interest Expenses | 159,714 | 201,956 | |||
| Taxes | - | 9,588 | |||
| Non-Recurring Items | |||||
| Executive Transition (2) | - | 113,944 | |||
| One-time Contract exit costs | - | 4,675 | |||
| Non-recurring property damage | 23,211 | 21,261 | |||
| Adjusted EBITDA | $ | (96,080 | ) | $ | 1,388,309 |
In the quarters ended March 31, 2026 and 2025:
| (1) | Stock-based<br>compensation was issued to independent Board members. |
|---|---|
| (2) | A<br>succession plan was required for the transition of the CEO at 2024 year-end. |
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Liquidityand Capital Resources
Overview
The Company’s primary sources of liquidity are cash generated from operations and borrowings under its revolving credit facility with M&T Bank. The Company uses cash to fund working capital requirements, capital expenditures, and debt service obligations.
As of March 31, 2026, the Company had $6,763,863 outstanding under its $7.5 million revolving credit facility, providing approximately $736,137 of remaining availability, subject to borrowing base and covenant compliance requirements. The revolving credit facility matures in November 2026.
On April 30, 2026, subsequent to the end of the quarter, the Company completed an underwritten public offering of 2,857,142 shares of its common stock at a public offering price of $7.00 per share, generating gross proceeds of approximately $20.0 million and net proceeds of approximately $18.6 million. The Company intends to use the proceeds to support working capital, capital expenditures, and to optimize its capital structure, including potential repayment of indebtedness.
On May 1, 2026, the underwriter in the aforementioned April 30 transaction chose to exercise its option to purchase an additional 428,571 shares of common stock. Net proceeds to the Company were approximately $2.8 million.
This financing significantly enhances the Company’s liquidity position and financial flexibility and is expected to support ongoing operations, growth initiatives, and strategic investments.
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CapitalRequirements
The Company expects that cash generated from operations together with availability under its revolving credit facility and the proceeds received from the public stock offering, will be sufficient to fund operations, working capital needs, and contractual obligations for at least the next twelve months.
Subsequent to March 31, 2026, the Company completed a public equity offering resulting in aggregate net proceeds of approximately $21.5 million, including the underwriter’s exercised over-allotment option. The Company utilized a portion of the proceeds to repay the outstanding balance under its revolving line of credit with M&T Bank to zero, which management expects will reduce future cash interest expense. The Company’s $7.5 million revolving credit facility remains available through June 30, 2027, providing additional financial flexibility and available liquidity for working capital requirements, capital expenditures, organic growth initiatives and potential strategic opportunities. In addition, management continues to implement operational efficiency and cost reduction initiatives intended to improve gross profit and EBITDA in future periods.
CashFlow — Three Months Ended March 31, 2026 and 2025
SYNTEC
OPTICS HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
FOR
THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025
| 2026 | 2025 | |||||
|---|---|---|---|---|---|---|
| Net Cash Provided By Operating Activities | $ | 469,611 | $ | 299,290 | ||
| Net Cash Used in Investing Activities | (294,325 | ) | (214,731 | ) | ||
| Net Cash Provided By (Used in) Financing Activities | 82,854 | (142,442 | ) | |||
| Net Increase (Decrease) in Cash | 258,140 | (57,883 | ) | |||
| Cash - Beginning | 358,867 | 598,787 | ||||
| Cash - Ending | $ | 617,007 | $ | 540,904 |
OperatingActivities
Net cash provided by operating activities was $0.5 million for the three months ended March 31, 2026, as compared to net cash provided by operating activities of $0.3 million for the three months ended March 31, 2025. The primary drivers of the changes for the three month period ended March 31, 2026 include net changes from operating assets of $0.6 million, changes from depreciation and amortization, stock-based compensation and allowance of $0.7 million, offset by net loss of $0.9 million.
InvestingActivities
Net cash used in investing activities was $0.3 million for the three months ended March 31, 2026, as compared to net cash used in investing activities of $0.2 million for the three months ended March 31, 2025. The net cash used in investing activities increased primarily due to the purchase of a single machine for approximately $0.4 million related to a new customer in 2026 that did not take place in 2025.
FinancingActivities
Net cash provided by financing activities was $0.1 million for the three months ended March 31, 2026, as compared to net cash used in financing activities of $0.1 million for the three months ended March 31, 2025. The primary driver of this change was the increase in debt borrowings from a related party in the first quarter of 2026 of $0.2 million.
Item3. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to market risks from changes in interest rates, which could affect our operating results, financial position and cash flows. We manage our exposure to these market risks through our regular operating and financing activities.
InterestRates
Our exposure to market risk associated with changes in interest rates relates primarily to our borrowings under our Senior Credit Facilities. We had approximately $6.8 million of outstanding variable rate debt as of March 31, 2026. A 100 basis point increase in interest rates at March 31, 2026 would increase our annual pre-tax interest expense by approximately $0.068 million.
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Item4. Controls and Procedures
Evaluationof Disclosure Controls and Procedures
As required by Rule 13a-15 under the Exchange Act, we have carried out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Report. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Based on the evaluation of our disclosure controls and procedures as of March 31, 2026, our Chief Executive Officer and our Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were not effective due to the following identified material weaknesses:
| 1. | We<br> lack documentation of formal internal control process and controls including lack of review of journal entries and segregation of<br> duties. |
|---|---|
| 2. | We<br> lack timely reconciliation controls in the areas of accounts payable, accrued legal expenses, and provision for income taxes. |
| 3. | We<br> lack controls related to identification and disclosure of related party transactions. |
| 4. | We<br> lack controls related to evaluation of non-routine transactions including financial instruments. |
| 5. | We<br> lack the necessary information technology (“IT”) general controls infrastructure in the areas of user access and program<br> change-management due to insufficient documentation and training, and inadequate IT risk assessment process. Additionally, we lack<br> controls around the review of SOC-1 reports and lack of cyber security related controls. |
RemediationPlans and Status
As disclosed in the section titled “Evaluation of Internal Controls and Procedures,” we have identified certain control deficiencies. To address these issues, we have designed and are in the process of implementing the following remediation initiatives, which are aligned with the COSO framework:
| ● | Enhance<br> corporate governance through increased oversight by the Audit Committee, including additional reviews of internal control improvements<br> and financial statements prior to publication (Control Environment; Monitoring Activities). |
|---|---|
| ● | Design<br> and implement internal control flowcharts to strengthen segregation of duties (Control Activities; Risk Assessment). |
| ● | Increase<br> staffing levels and competencies to enable appropriate separation of duties (Control Environment; Control Activities). |
| ● | Implement<br> a formal checklist, review process, and controls over all journal entries and modifications to trial balances (Control Activities;<br> Information & Communication). |
| ● | Hire<br> additional experienced accounting and reporting professionals to prepare and approve consolidated financial statements and footnote<br> disclosures in accordance with U.S. GAAP (Control Environment; Control Activities). |
| ● | Engage<br> outside professional support to assist with SEC reporting requirements and special circumstances to ensure timely and accurate filings<br> (Control Environment; Information & Communication). |
| ● | Establish<br> a formal quarterly attestation process for managers and accounting staff to reinforce and monitor the use of control processes and<br> workflows (Monitoring Activities; Information & Communication). |
| ● | Implement<br> a formalized system for tracking control measures to reduce complexity and improve management’s review of control effectiveness<br> (Monitoring Activities; Information & Communication). |
| 20 |
| --- |
While the Company has initiated these remediation efforts, not all measures have been fully implemented as of the date of this filing. We will continue to enhance our internal control framework, employ additional procedures, and utilize appropriate tools and resources to ensure that our consolidated financial statements are presented fairly, in all material respects.
The Company believes these remediation measures will significantly strengthen its internal control environment and provide the foundation to remediate the identified material weaknesses in future reporting periods.
Management’sReport on Internal Control over Financial Reporting
This Report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of the Company’s registered public accounting firm due to a transition period established by rules of the SEC for newly public companies. Additionally, our auditors will not be required to formally opine on the effectiveness of our internal control over financial reporting pursuant to Section 404 until we are no longer an “emerging growth company” as defined in the JOBS Act.
Changesin Internal Control over Financial Reporting
Other than the material weaknesses and remediation efforts mentioned above, there were no changes in our internal controls over financial reporting that occurred during the quarter ended March 31, 2026 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| 21 |
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PART
II - OTHER INFORMATION
Item1. Legal Proceedings
We may be subject to legal proceedings, investigations and claims incidental to the conduct of our business from time to time. We are not currently a party to any material litigation or other legal proceedings brought against us. We are also not aware of any legal proceeding, investigation or claim, or other legal exposure that has a more than remote possibility of having a material adverse effect on our business, financial condition or results of operations.
Item1A. Risk Factors
The Company’s risk factors are described in Part I, Item 1A, “Risk Factors”, of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025. The risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial position, or future results of operations. The risk factors should be read together with, the risk factors described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Item2. Unregistered Sales of Equity Securities and Use of Proceeds
None
Item3. Defaults Upon Senior Securities
None
Item4. Mine Safety Disclosures
Not Applicable
Item5. Other Information
None
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| --- |
Item6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
| 23 |
| --- |
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| SYNTEC OPTICS HOLDINGS, INC | ||
|---|---|---|
| Date:<br> May 15, 2026 | By: | /s/ Al Kapoor |
| Name: | Al<br> Kapoor | |
| Title: | Chairman<br> and Chief Executive Officer | |
| (Principal<br> Executive Officer) | ||
| Date:<br> May 15, 2026 | By: | /s/ Dean Rudy |
| Name: | Dean<br> Rudy | |
| Title: | Chief<br> Financial Officer | |
| (Principal<br> Accounting Officer and Financial Officer) |
| 24 |
| --- |
EXHIBIT31.1
CERTIFICATION
CERTIFICATIONOF CHIEF EXECUTIVE OFFICER
PURSUANTTO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Al Kapoor, certify that:
| 1. | I have reviewed this quarterly<br> report on Form 10-Q of Syntec Optics Holdings, Inc.; |
|---|---|
| 2. | Based on my knowledge,<br> this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements<br> made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this<br> report; |
| 3. | Based on my knowledge,<br> the unaudited condensed financial statements, and other financial information included in this report, fairly present in all material<br> respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in<br> this report; |
| 4. | The registrant’s<br> other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined<br> in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
| a) | Designed such disclosure<br> controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material<br> information relating to the registrant, is made known to us by others within those entities, particularly during the period in which<br> this report is being prepared; and |
| --- | --- |
| b) | (Paragraph omitted pursuant<br> to SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313); |
| c) | Evaluated the effectiveness<br> of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness<br> of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report<br> any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent<br> fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is<br> reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s<br> other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,<br> to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the<br> equivalent functions): |
| --- | --- |
| a) | All significant deficiencies<br> and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely<br> affect the registrant’s ability to record, process, summarize and report financial information; and |
| --- | --- |
| b) | Any fraud, whether or not<br> material, that involves management or other employees who have a significant role in the registrant’s internal control over<br> financial reporting. |
Date: May 15, 2026
| By: | /s/ Al Kapoor |
|---|---|
| Name: | Al Kapoor |
| Title: | Chairman and Chief Executive Officer |
| (Principal Executive Officer) |
EXHIBIT31.2
CERTIFICATION
CERTIFICATIONOF CHIEF FINANCIAL OFFICER
PURSUANTTO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Dean Rudy, certify that:
| 1. | I have reviewed this quarterly<br> report on Form 10-Q of Syntec Optics Holdings, Inc.; |
|---|---|
| 2. | Based on my knowledge,<br> this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements<br> made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this<br> report; |
| 3. | Based on my knowledge,<br> the unaudited condensed financial statements, and other financial information included in this report, fairly present in all material<br> respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in<br> this report; |
| 4. | The registrant’s<br> other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined<br> in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
| a) | Designed such disclosure<br> controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material<br> information relating to the registrant, is made known to us by others within those entities, particularly during the period in which<br> this report is being prepared; and |
| --- | --- |
| b) | (Paragraph omitted pursuant<br> to SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313); |
| c) | Evaluated the effectiveness<br> of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness<br> of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report<br> any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent<br> fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is<br> reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s<br> other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,<br> to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the<br> equivalent functions): |
| --- | --- |
| a) | All significant deficiencies<br> and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely<br> affect the registrant’s ability to record, process, summarize and report financial information; and |
| --- | --- |
| b) | Any fraud, whether or not<br> material, that involves management or other employees who have a significant role in the registrant’s internal control over<br> financial reporting. |
Date: May 15, 2026
| By: | /s/ Dean Rudy |
|---|---|
| Name: | Dean Rudy |
| Title: | Chief Financial Officer |
| (Principal Accounting Officer and Financial Officer) |
EXHIBIT32.1
CERTIFICATION
CERTIFICATIONPURSUANT TO
18U.S.C. SECTION 1350
ASADOPTED PURSUANT TO
SECTION906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Syntec Optics Holdings, Inc. (the “Company”) on Form 10-Q for the quarterly period ended March 31, 2026, as filed with the Securities and Exchange Commission (the “Report”), I, Al Kapoor, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as added by §906 of the Sarbanes-Oxley Act of 2002, that:
| 1. | The Report fully complies with the requirements of<br> Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
|---|---|
| 2. | To my knowledge, the information<br> contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company<br> as of and for the period covered by the Report. |
Dated: May 15, 2026
| By: | /s/ Al Kapoor |
|---|---|
| Name: | Al Kapoor |
| Title: | Chairman and Chief Executive Officer |
| (Principal Executive Officer) |
EXHIBIT32.2
CERTIFICATION
CERTIFICATIONPURSUANT TO
18U.S.C. SECTION 1350
ASADOPTED PURSUANT TO
SECTION906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Syntec Optics Holdings, Inc. (the “Company”) on Form 10-Q for the quarterly period ended March 31, 2026, as filed with the Securities and Exchange Commission (the “Report”), I, Dean Rudy, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as added by §906 of the Sarbanes-Oxley Act of 2002, that:
| 1. | The Report fully complies<br> with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
|---|---|
| 2. | To my knowledge, the information<br> contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company<br> as of and for the period covered by the Report. |
Dated: May 15, 2026
| By: | /s/ Dean Rudy |
|---|---|
| Name: | Dean Rudy |
| Title: | Chief Financial Officer |
| (Principal Accounting Officer and Financial Officer) |