[PART I](index=3&type=section&id=PART%20I) [Item 1. Business](index=3&type=section&id=Item%201.%20Business) LightPath is transitioning from component supplier to imaging subsystem and system provider, leveraging acquisitions and BlackDiamond materials - LightPath Technologies is transitioning from a pure optical component manufacturer to a supplier of imaging subsystems and systems, driven by **organic growth and strategic acquisitions**[19](index=19&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) - Key acquisitions include **Visimid (July 2023)** for thermal imaging and night vision cores, and **G5 Infrared (February 2025)** for high-performance cooled infrared camera systems and advanced infrared coatings, strengthening vertical integration[19](index=19&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) - The company's strategic direction leverages core technological differentiators such as **BlackDiamond glass and proprietary molding technologies**, aiming for **significant growth and higher profitability** by moving up the value chain[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk) - Average Selling Prices (ASPs) have **significantly increased** with the shift to assemblies (LightPath 2.0) and cameras/systems (LightPath 3.0), from **single/tens of dollars** to **hundreds or even tens/hundreds of thousands of dollars**[33](index=33&type=chunk) [General](index=3&type=section&id=General) LightPath Technologies, Inc. was incorporated in Delaware in 1992 and operates globally with facilities in the United States, China, and Latvia, with corporate headquarters in Orlando, Florida - LightPath Technologies, Inc. was incorporated in **Delaware in 1992** and operates globally with facilities in the **United States, China, and Latvia**, with corporate headquarters in **Orlando, Florida**[18](index=18&type=chunk) [Subsidiaries](index=4&type=section&id=Subsidiaries) LightPath's subsidiaries include LPOIZ, ISP, Visimid (2023), and G5 Infrared (2025), enhancing infrared imaging capabilities - LightPath's subsidiaries include **LPOIZ (China)** for manufacturing, **ISP and ISP Latvia** for infrared optical components, **Visimid (acquired July 2023)** for thermal imaging and night vision design, and **G5 Infrared (acquired February 2025)** for high-performance infrared camera systems[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) [Industry](index=4&type=section&id=Industry) The company serves diverse industries, with infrared photonics shifting from specialty to mainstream, increasing demand for engineered solutions - The company serves diverse industries including **defense, public safety, industrial, commercial, telecom, and medical**, all utilizing photonics as an enabling technology[26](index=26&type=chunk) - There's a **pivotal shift** in infrared photonics adoption, moving from **specialty applications to mainstream integration**, with customers increasingly seeking **'optical engineered solutions'** from suppliers like LightPath[27](index=27&type=chunk)[29](index=29&type=chunk) [Growth Strategy](index=5&type=section&id=Growth%20Strategy) LightPath's strategy is to transition from component manufacturing to imaging subsystems and systems, driven by proprietary technologies and strategic acquisitions - The company's strategy, initiated in 2020, is to **transition from a component manufacturer to a supplier of imaging subsystems and systems**, leveraging **BlackDiamond glass and proprietary molding technologies**[30](index=30&type=chunk)[31](index=31&type=chunk) - Acquisitions like **Visimid and G5 Infrared** are key to this strategy, adding technologies such as **video processing and long-range imaging with cooled midwave cameras**[31](index=31&type=chunk) - This strategic shift has led to a **significant increase in average selling prices (ASPs)** for products, with assemblies (LightPath 2.0) in **hundreds of dollars** and cameras/systems (LightPath 3.0) in **tens to hundreds of thousands of dollars**[33](index=33&type=chunk) [Organizational Alignment](index=6&type=section&id=Organizational%20Alignment) The organization aligns global manufacturing and technical capabilities to support its strategic plan, focusing on photonics expertise for subsystem development - The organization is **aligning its manufacturing and technical capabilities globally** to support the new strategic plan, focusing on **domain expertise in photonics** from design to manufacturing and testing of subsystems[34](index=34&type=chunk)[35](index=35&type=chunk) - Recent acquisitions, such as **G5 Infrared**, have brought new capabilities like **long-range cooled infrared cameras and optical coating services**, leading to collaborative development of new products like **Germanium-free cameras**[37](index=37&type=chunk) [Technologies](index=6&type=section&id=Technologies) LightPath develops innovative technologies across engineering and manufacturing, focusing on infrared imaging with proprietary BlackDiamond materials and precision molding - LightPath focuses on developing, acquiring, and licensing **innovative technologies** across engineering and manufacturing, including **systems design, optical fabrication, material production, optical coatings, and electromechanical design**[41](index=41&type=chunk) - Infrared Imaging Technologies: The company is **expanding its infrared imaging portfolio**, integrating **proprietary BlackDiamond materials** into camera designs to **mitigate supply chain risks associated with Germanium** and improve system performance[42](index=42&type=chunk) - Materials: BlackDiamond glasses (BDNL type) are **exclusive to LightPath**, offering advantages over Germanium (e.g., **U.S.-produced, secure supply chain, multispectral performance, low thermo-optic coefficients**)[43](index=43&type=chunk)[44](index=44&type=chunk) - Optical Assemblies and Testing: **Expansion into complex optical assemblies**, leveraging **BlackDiamond materials** for **faster lead times and superior performance** in defense and security markets[42](index=42&type=chunk) - Precision molded lenses: LightPath maintains a **leadership position in precision molding**, continuously investing in advancements for materials, shapes, and sizes, including **non-symmetric and freeform optical components**[49](index=49&type=chunk) - Optical coatings: Capabilities across all facilities for **efficient, high-quality anti-reflective, reflective, and protective coatings**, including **advanced Diamond Like Carbon** for environmental protection[49](index=49&type=chunk) [New Product Development](index=8&type=section&id=New%20Product%20Development) New product development in FY2024-2025 focused on thermal imaging, including BlackDiamond glass, assemblies, and Germanium-free camera systems - Development efforts in FY2024 and FY2025 focused on **thermal imaging products**, including **BlackDiamond glass, assemblies, and camera systems**[47](index=47&type=chunk) - New products include **multispectral cameras like Mantis**, and **Germanium-free midwave cameras leveraging BlackDiamond materials**[49](index=49&type=chunk)[51](index=51&type=chunk) New Product Development Expenditures | Fiscal Year | Expenditure (Millions) | | :------------ | :--------------------- | | 2025 | $3.1 | | 2024 | $2.4 | [Product Groups and Markets](index=9&type=section&id=Product%20Groups%20and%20Markets) LightPath categorizes products into infrared, visible, assemblies/modules, and engineering services, with G5 Infrared revenue primarily in infrared and assemblies - LightPath categorizes products into four groups: **infrared components, visible components, assemblies and modules, and engineering services**. G5 Infrared's revenue primarily falls under infrared components and assemblies/modules[55](index=55&type=chunk) - Infrared Components: Includes **molded and turned lenses, BlackDiamond glass materials**, and G5's optical component and coating business. Anticipates **moderate growth due to Germanium alternatives**[56](index=56&type=chunk)[58](index=58&type=chunk)[60](index=60&type=chunk) - Assemblies and Modules: Dominated by **infrared cameras and assemblies**, including **uncooled systems** from Texas, **cooled cameras** from New Hampshire (G5 Infrared), and **custom lens assemblies** from Orlando[62](index=62&type=chunk) - Engineering Services: Focuses on **developing new products and applications** for customers, often leading to **manufacturing contracts**[63](index=63&type=chunk) [Sales and Marketing](index=10&type=section&id=Sales%20and%20Marketing) LightPath's global marketing shifts from technical components to end-user solutions, supported by a unified direct sales team and trade show participation - Marketing efforts are **global and unified**, utilizing **digital advertising, social media, and direct marketing**, shifting focus from technical aspects of components to **use cases and end-user benefits of solutions**[64](index=64&type=chunk) - The sales organization is aligned with the **solution strategy**, featuring a **technical project management function** and a **unified global direct sales team** focused on problem-solving and needs analysis[65](index=65&type=chunk)[66](index=66&type=chunk) - LightPath participates in **numerous trade shows across North America, Europe, and Asia** to expand brand presence, network, and gain insights into technological trends[67](index=67&type=chunk)[68](index=68&type=chunk) [Competition](index=11&type=section&id=Competition) LightPath faces competition across the supply chain, leveraging unique technologies, precision molded optics, vertical integration, and BlackDiamond materials as advantages - LightPath faces competition across **all levels of the supply chain** (raw materials, semi-finished goods, finished goods) and sometimes acts as both supplier and competitor[69](index=69&type=chunk) - Competitive advantages include **unique technologies, leadership in precision molded optics, vertical integration in infrared optics**, and the use of **BlackDiamond materials for supply chain risk mitigation and price consistency**[70](index=70&type=chunk)[71](index=71&type=chunk) - In engineered solutions and assemblies, competition comes from **direct competitors offering design-to-production services, standard product vendors, and internal customer engineering groups** (which are declining)[74](index=74&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk) - For infrared components, LightPath competes with traditional fabrication, diamond turning, and other molded optics manufacturers, differentiating with **lower-cost synthetic chalcogenide glass (BD6) and vertical integration**[78](index=78&type=chunk)[79](index=79&type=chunk)[80](index=80&type=chunk) [Manufacturing](index=12&type=section&id=Manufacturing) LightPath operates manufacturing facilities globally in Florida, New Hampshire, China, and Latvia, equipped for various optical processes and holding key certifications - LightPath operates manufacturing facilities in **Orlando, Florida (58,500 sq ft)**, **Hudson, New Hampshire (27,000 sq ft, G5 Infrared)**, **Zhenjiang, China (39,500 sq ft, LPOIZ)**, and **Riga, Latvia (29,000 sq ft, ISP Latvia)**[84](index=84&type=chunk)[172](index=172&type=chunk) - Facilities are equipped for various processes including **coating, diamond turning, precision glass molding, integrated assembly, CNC grinding, and traditional polishing**[85](index=85&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk)[90](index=90&type=chunk) - Certifications include **ISO 9001:2015** (Orlando, Zhenjiang, Riga), **ISO9001/AS9100** (Hudson for aerospace/defense), and **ISO/TS 1649:2009** (Zhenjiang for automotive). U.S. facilities are **ITAR compliant**[91](index=91&type=chunk) - The company uses **subcontractors** for specialized processing steps and **sources materials globally**, with internal BD6 glass manufacturing providing a **low-cost alternative to Germanium**[93](index=93&type=chunk)[94](index=94&type=chunk) [Intellectual Property](index=13&type=section&id=Intellectual%20Property) LightPath protects its technology through trade secrets, patents, trademarks, and copyrights, aggressively pursuing patents for new products and features - LightPath protects its technology through **trade secrets, patents, trademarks, and copyrights**, with a focus on **aggressive patent pursuit** for new products and features[98](index=98&type=chunk)[99](index=99&type=chunk) - Recent patent applications cover innovations in **midwave thermal imaging, flame detection, optical elements with transparent heating layers, LWIR imaging with eSWIR light sources, signaling laser detection, and shutterless calibration**[99](index=99&type=chunk) Registered and Unregistered Marks | 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 | Pending | | EdgeIR® | Trademark | Yes | United States | May 6, 2035 | | Mantis | Trademark | Yes | Europe | December 21, 2032 | | Mantis | Trademark | No | United States | - | [Environmental and Governmental Regulation](index=14&type=section&id=Environmental%20and%20Governmental%20Regulation) LightPath complies with environmental regulations and 'conflict minerals' disclosure, with future growth potentially requiring additional permits - Emissions and waste are currently **low**, requiring **no special environmental permits**, but **future growth may necessitate permits** for increased waste by-products[102](index=102&type=chunk) - The company is in **compliance with material federal, state, and local laws and regulations**, and holds necessary licenses and permits[102](index=102&type=chunk)[103](index=103&type=chunk) - Subject to **Dodd-Frank Act's 'conflict minerals' disclosure requirements**, striving to use **conflict-free suppliers**, which may **incur compliance costs and affect material sourcing**[105](index=105&type=chunk)[106](index=106&type=chunk) [Major Customers](index=15&type=section&id=Major%20Customers) Customer concentration is not static, with international sales contributing significantly, indicating diversification efforts Major Customer Sales Concentration | Fiscal Year | Top 3 Customers (% of Revenue) | Largest Customer (% of Revenue) | Second Largest Customer (% of Revenue) | Third Largest Customer (% of Revenue) | | :------------ | :----------------------------- | :------------------------------ | :------------------------------------ | :----------------------------------- | | 2025 | 23% | 9% | 7% | 6% | | 2024 | 25% | 12% | 7% | 6% | - The company's customer concentration is **not static**, with the largest customer in FY2024 not being among the top three in FY2023, indicating **diversification efforts**[107](index=107&type=chunk) International Sales Contribution | Fiscal Year | Net Revenue from Outside U.S. (%) | Foreign Sales from Europe and Asia (%) | | :------------ | :---------------------------- | :--------------------------------- | | 2025 | 38% | 91% | | 2024 | 39% | 94% | [Employees](index=15&type=section&id=Employees) LightPath had 350 global employees as of June 30, 2025, offering competitive compensation and benefits, and committed to diversity and inclusion - As of June 30, 2025, LightPath had **350 employees globally** (345 full-time, 5 part-time), with **153 in the U.S., 98 in Riga, Latvia, and 99 in Zhenjiang, China**[109](index=109&type=chunk) - The company offers **competitive compensation and benefits**, focuses on **sourcing top talent**, and is committed to **diversity and inclusion**[110](index=110&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk) [Available Information](index=15&type=section&id=Available%20Information) LightPath makes its annual, quarterly, and current reports available free of charge on its website after filing with the SEC - LightPath makes its **annual, quarterly, and current reports**, and amendments, available **free of charge on its website** (www.lightpath.com) after filing with the SEC[114](index=114&type=chunk) [Item 1A. Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) LightPath faces significant risks including a history of net losses and the need for additional capital. International operations expose the company to political, economic, and supply chain disruptions, particularly from China's export restrictions on Germanium and Gallium. Dependence on single/limited suppliers, fluctuating currency exchange rates, and reliance on a few key customers also pose financial risks. The company is vulnerable to intense competition, declining average selling prices for some products, and the need to protect its intellectual property from infringement and data breaches - LightPath has a **history of net losses**, with an **accumulated deficit of approximately $231 million** as of June 30, 2025, and may **require additional capital** to sustain operations and repay indebtedness[116](index=116&type=chunk)[132](index=132&type=chunk) - International sales (**38% of net revenue in FY2025**) expose the company to **political risks, trade tariffs**, and **currency fluctuations**[119](index=119&type=chunk)[124](index=124&type=chunk)[128](index=128&type=chunk) - **China's export ban on Germanium, Gallium, and antimony** to the U.S. (effective **December 3, 2024**) **significantly disrupts the supply chain** for critical infrared optical materials, leading to **price increases and availability issues**[120](index=120&type=chunk) - Dependence on **single or limited source suppliers** for key materials (including Germanium and sensors) and process steps makes the company susceptible to **shortages, poor performance, or price fluctuations**[123](index=123&type=chunk) - The company relies on a **few key customers**, with the **top three comprising 23% of annual revenue in FY2025**, and the loss of any could **significantly impact revenues**[130](index=130&type=chunk) - **Significant competition** in optical markets from **larger companies with greater resources**, coupled with **reductions in average selling prices** for some products, necessitates **increased sales volumes, cost reductions, or higher-margin product introductions**[144](index=144&type=chunk)[145](index=145&type=chunk) - Risks related to intellectual property include the **inability to protect and enforce rights**, potential **loss of ownership of formulas/processes**, and involvement in **costly intellectual property disputes and litigation**[156](index=156&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk)[163](index=163&type=chunk) - **Data breach and breakdown of information and communication technologies** pose risks of **disruption, unauthorized access, and misappropriation of sensitive data**, despite security initiatives[161](index=161&type=chunk)[162](index=162&type=chunk) [Item 1B. Unresolved Staff Comments](index=23&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments to report - **No unresolved staff comments**[164](index=164&type=chunk) [Item 1C. Cybersecurity](index=23&type=section&id=Item%201C.%20Cybersecurity) LightPath has a comprehensive cybersecurity risk management program, integrated into its enterprise risk management framework and guided by the NIST CSF. The program includes incident response, continuous vulnerability management, third-party consultant engagement, employee training, and risk management for third-party providers. The executive team and CIO oversee cybersecurity governance, with regular reporting to the Board of Directors. To date, no cybersecurity risks have been identified that could materially impact the company's operations or financial performance - LightPath has a **comprehensive cybersecurity risk management program**, integrated into its enterprise risk management framework, leveraging **NIST CSF** for identification, prioritization, and management of risks[165](index=165&type=chunk)[166](index=166&type=chunk) - Key components include a **Cybersecurity Incident Response Plan (CIRP)**, **continuous vulnerability management**, engagement of **third-party cybersecurity consultants**, regular employee awareness training, and risk management for third-party providers[171](index=171&type=chunk) - Cybersecurity governance is led by the **CIO and executive team**, with **over 35 years of combined experience**, and the CIO **reports regularly to the executive team and annually to the Board of Directors**[167](index=167&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk) - **No cybersecurity risks** have been identified to date that could **materially impact the company's operations, strategy, financial condition, or overall business performance**[170](index=170&type=chunk) [Item 2. Properties](index=24&type=section&id=Item%202.%20Properties) LightPath's properties are leased office and manufacturing facilities globally, totaling approximately **157,000 square feet**, for corporate, engineering, manufacturing, and R&D - LightPath's primary properties are **leased office and manufacturing facilities across five locations globally**[172](index=172&type=chunk) Facility Locations and Square Footage (as of June 30, 2025) | Location | Square Feet | Commitment and Use | | :-------------------- | :---------- | :------------------------------------------------------ | | Orlando, Florida | 58,500 | Corporate headquarters, manufacturing, R&D | | Hudson, New Hampshire | 27,000 | Administrative offices, engineering, manufacturing | | Plano, Texas | 3,000 | Engineering and manufacturing | | Riga, Latvia | 29,000 | Administrative offices and manufacturing | | Zhenjiang, China | 39,500 | Manufacturing | [Item 3. Legal Proceedings](index=24&type=section&id=Item%203.%20Legal%20Proceedings) LightPath is occasionally involved in legal actions but currently has no material legal proceedings or anticipated adverse legal activity - **No material legal proceedings** are currently active or anticipated[174](index=174&type=chunk) [Item 4. Mine Safety Disclosures](index=24&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to LightPath Technologies, Inc - **Not Applicable**[175](index=175&type=chunk) [PART II](index=25&type=section&id=PART%20II) [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=25&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) LightPath's Class A common stock trades on Nasdaq under 'LPTH', with **220 record holders**. No cash dividends are paid or intended, and no repurchases occurred in FY2025 - LightPath's Class A common stock trades on the **Nasdaq Capital Market** under the symbol **"LPTH"**[177](index=177&type=chunk) - As of September 18, 2025, there were approximately **220 holders of record** and **10,835 street name holders** of Class A common stock[178](index=178&type=chunk) - The company has **never declared or paid cash dividends** and plans to **retain all future earnings** to finance operations and expansion[179](index=179&type=chunk) - **No repurchases** of Class A common stock were made during the fiscal year ended June 30, 2025[180](index=180&type=chunk) [Item 6. [Reserved]](index=25&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information - **Item 6 is reserved**[181](index=181&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) FY2025 revenue increased **17% to $37.2 million**, driven by assemblies and engineering services, but net loss widened to **$14.9 million** due to higher operating and acquisition costs. Working capital is **$11.3 million** Key Financial Highlights (FY2025 vs. FY2024) | Metric | FY2025 (Millions) | FY2024 (Millions) | Change (%) | | :---------------------- | :---------------- | :---------------- | :--------- | | Total Revenue | $37.2 | $31.7 | 17% | | Gross Margin | $10.1 | $8.6 | 17% | | Gross Margin (% Revenue)| 27% | 27% | 0% | | SG&A Costs | $15.8 | $12.3 | 29% | | New Product Dev. Costs | $3.1 | $2.4 | 28% | | Net Loss | $(14.9) | $(8.0) | 86% | | Basic/Diluted EPS | $(0.36) | $(0.21) | 71% | - Revenue growth in FY2025 was primarily driven by a **79% increase in assemblies and modules** (including **$4.0M from G5 Infrared**) and a **63% increase in engineering services** (driven by Visimid's Lockheed Martin contract)[188](index=188&type=chunk)[189](index=189&type=chunk)[245](index=245&type=chunk)[246](index=246&type=chunk) - Increased net loss in FY2025 was due to **higher operating expenses**, including **$1.1M in G5 Infrared SG&A**, **$1.5M in non-recurring acquisition costs**, and a **$1.0M increase in interest expense**[192](index=192&type=chunk)[195](index=195&type=chunk)[201](index=201&type=chunk) - Working capital was approximately **$11.3 million** and total cash and cash equivalents were **$4.9 million** as of June 30, 2025, with **25% of cash held by foreign subsidiaries**[203](index=203&type=chunk) [Effect of Certain Events Occurring at Our Chinese Subsidiaries](index=25&type=section&id=Effect%20of%20Certain%20Events%20Occurring%20at%20Our%20Chinese%20Subsidiaries) LightPath terminated China subsidiary employees in April 2021 due to malfeasance, recovering approximately **$0.2 million** in misappropriated funds in December 2023 - In **April 2021**, LightPath terminated several employees of its China subsidiaries due to **malfeasance, misappropriation of technology, and fraud**[184](index=184&type=chunk) - Approximately **$0.2 million** in misappropriated funds were recovered in **December 2023**, included in 'Other income' for FY2024, with no further recoveries or legal fees expected[185](index=185&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) FY2025 revenue increased **17% to $37.2 million**, driven by assemblies and engineering services, but net loss widened to **$14.9 million** due to higher operating expenses and acquisition costs Revenue by Product Group (FY2025 vs. FY2024) | Product Group | FY2025 (Millions) | FY2024 (Millions) | Change (%) | | :-------------------- | :---------------- | :---------------- | :--------- | | Infrared components | $14.3 | $14.1 | 2% | | Visible components | $11.7 | $11.2 | 4% | | Assemblies and modules| $8.0 | $4.5 | 79% | | Engineering services | $3.2 | $2.0 | 63% | | **Total Revenue** | **$37.2** | **$31.7** | **17%** | - Gross margin remained at **27%** for both fiscal years, favorably impacted by **G5 Infrared revenue and higher-margin assemblies and modules**, but unfavorably by a **$0.5 million increase in inventory reserve charges** for visible components[190](index=190&type=chunk)[191](index=191&type=chunk) - SG&A costs increased by **29% to $15.8 million** in FY2025, primarily due to **$1.1 million from G5 Infrared**, **$1.5 million in non-recurring acquisition costs**, increased sales/marketing spend, and IT infrastructure upgrades[192](index=192&type=chunk) - New product development costs rose **28% to $3.1 million** in FY2025, driven by **additional engineering personnel** and **increased materials/services** for infrared cores and camera systems[193](index=193&type=chunk) - Interest expense, net, increased **significantly to $1.1 million** in FY2025 (from **$0.2 million in FY2024**) due to **financing costs for warrant liability and the Bridge Note/Acquisition Notes**[195](index=195&type=chunk) - A **net loss of $14.9 million** was reported for FY2025, an **increase from $8.0 million in FY2024**, primarily due to **higher operating expenses and non-operating items** like increased interest expense, loss on debt extinguishment, and change in fair value of warrant liability[201](index=201&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, LightPath had **$11.3 million** in working capital and **$4.9 million** in cash, with **25%** held internationally, and **$5.2 million** in Acquisition Notes - As of June 30, 2025, LightPath had **$11.3 million in working capital** and **$4.9 million in cash and cash equivalents**, with approximately **25% held by foreign subsidiaries**[203](index=203&type=chunk) - The company repatriated **$1.2 million from LPOIZ (China)** in FY2025, with **$0.4 million in retained earnings** available for future repatriation[204](index=204&type=chunk) - Loans payable as of June 30, 2025, included **$5.2 million in Acquisition Notes** (**10-12% interest**, **maturing Feb 2027**) and equipment loans totaling approximately **$0.4 million**[205](index=205&type=chunk)[211](index=211&type=chunk)[212](index=212&type=chunk) - Cash used in operations was **$8.3 million in FY2025** (compared to **$0.5 million provided in FY2024**), driven by **net loss, acquisition-related legal/consulting expenses, and inventory increases**[218](index=218&type=chunk) - Net cash used in investing activities was **$19.7 million in FY2025**, primarily for the **G5 Infrared acquisition ($18.5 million)** and **capital equipment ($1.3 million)**[220](index=220&type=chunk) - Net cash provided by financing activities was **$29.3 million in FY2025**, mainly from **$29.8 million related to the G5 Infrared acquisition financing**[222](index=222&type=chunk) [How We Operate](index=29&type=section&id=How%20We%20Operate) LightPath focuses on a 'design win' and 'annuity' model, collaborating with customers on engineered solutions, prototyping, and long-term supply agreements - LightPath focuses on converting business to a **'design win' and 'annuity' model**, involving collaboration with customers on optical specifications and designs (**'engineered solutions'**), followed by **prototyping and long-term supply agreements**[223](index=223&type=chunk) - Challenges include **maintaining design capabilities**, **cost reduction pressures** from customers, and **financial constraints on capital expenditures** due to limited cash resources[226](index=226&type=chunk) [Our Key Performance Indicators](index=29&type=section&id=Our%20Key%20Performance%20Indicators) Management reviews weekly KPIs including shippable output, production yield, sales backlog, revenue by product group, inventory, and accounts receivable - Management reviews qualitative and quantitative performance indicators weekly, including **shippable output, production yield rates, sales backlog, revenue by product group, inventory levels, and accounts receivable levels**[227](index=227&type=chunk)[228](index=228&type=chunk) Quarterly Sales Backlog | Quarter | Total Backlog ($000) | Change From Prior Year End (%) | Change From Prior Quarter End (%) | | :------ | :------------------- | :----------------------------- | :-------------------------------- | | Q1 2024 | $21,303 | (2)% | (2)% | | Q2 2024 | $21,220 | (2)% | 0% | | Q3 2024 | $21,967 | 1% | 4% | | Q4 2024 | $19,268 | (11)% | (12)% | | Q1 2025 | $20,542 | 7% | 7% | | Q2 2025 | $19,767 | 3% | (4)% | | Q3 2025 | $27,423 | 42% | 39% | | Q4 2025 | $37,390 | 94% | 36% | - Backlog increased **significantly in Q3 and Q4 FY2025**, with **G5 Infrared adding $5.6 million** at acquisition and **$16.6 million by June 30, 2025**. The **remaining backlog increased 8%** due to an industrial customer[230](index=230&type=chunk) - Demand for infrared products is **growing**, fueled by interest in **BD6 glass and new BDNL materials as alternatives to Germanium**, especially given **global supply restrictions**[231](index=231&type=chunk)[233](index=233&type=chunk) Revenue by Product Group (Quarterly and Annual) | Product Group | Q4 2025 ($) | Q4 2024 ($) | Q-o-Q Change (%) | FY 2025 ($) | FY 2024 ($) | Y-o-Y Change (%) | | :-------------------- | :---------- | :---------- | :--------------- | :---------- | :---------- | :--------------- | | Infrared components | 4,947,111 | 3,043,148 | 63% | 14,310,589 | 14,089,277 | 2% | | Visible components | 2,835,474 | 3,178,023 | (11)% | 11,736,549 | 11,233,737 | 4% | | Assemblies and modules| 4,164,932 | 1,373,178 | 203% | 7,968,296 | 4,451,165 | 79% | | Engineering services | 262,276 | 1,039,783 | (75)% | 3,187,196 | 1,952,013 | 63% | | **Total revenue** | **12,209,793**| **8,634,132** | **41%** | **37,202,630**| **31,726,192**| **17%** | Days Cost of Sales in Inventory (DCSI) | Fiscal Quarter | Ended | DCSI (days) | | :------------- | :--------- | :---------- | | Q4-2025 | 6/30/2025 | 123 | | Q3-2025 | 3/31/2025 | 178 | | Q2-2025 | 12/31/2024 | 107 | | Q1-2025 | 9/30/2024 | 112 | | **FY 2025 Average**| | **130** | | Q4-2024 | 6/30/2024 | 98 | | Q3-2024 | 3/31/2024 | 98 | | Q2-2024 | 12/31/2023 | 133 | | Q1-2024 | 9/30/2023 | 119 | | **FY 2024 Average**| | **112** | - Average DCSI increased to **130 days in FY2025** from **112 in FY2024**, driven by the **G5 Infrared acquisition**. The company expects DCSI to return to **110-120 days**[247](index=247&type=chunk) Days Sales Outstanding (DSO) | Fiscal Quarter | Ended | DSO (days) | | :------------- | :--------- | :--------- | | Q4-2025 | 6/30/2025 | 71 | | Q3-2025 | 3/31/2025 | 76 | | Q2-2025 | 12/31/2024 | 65 | | Q1-2025 | 9/30/2024 | 56 | | **FY 2025 Average**| | **67** | | Q4-2024 | 6/30/2024 | 52 | | Q3-2024 | 3/31/2024 | 55 | | Q2-2024 | 12/31/2023 | 59 | | Q1-2024 | 9/30/2023 | 57 | | **FY 2024 Average**| | **56** | - Average DSO increased to **67 days in FY2025** from **56 in FY2024**, due to **G5 Infrared's higher concentration of shipments** late in fiscal quarters. The company aims to maintain **DSO below 60 days**[249](index=249&type=chunk) [Non-GAAP Financial Measures](index=33&type=section&id=Non-GAAP%20Financial%20Measures) LightPath uses non-GAAP measures like EBITDA and Adjusted EBITDA to assess performance and aid planning, acknowledging their limitations as substitutes for GAAP - LightPath uses non-GAAP measures like **EBITDA and Adjusted EBITDA** to assess business performance and aid planning, acknowledging their **limitations as substitutes for GAAP results**[251](index=251&type=chunk)[252](index=252&type=chunk) - Adjusted EBITDA excludes **stock compensation, loss on debt extinguishment, mark-to-market adjustments for warrants, and foreign exchange gains/losses**[253](index=253&type=chunk) EBITDA and Adjusted EBITDA (FY2025 vs. FY2024) | Metric | FY2025 (Millions) | FY2024 (Millions) | | :---------------- | :---------------- | :---------------- | | Net loss | $(14.87) | $(8.01) | | EBITDA | $(9.57) | $(3.70) | | Adjusted EBITDA | $(5.06) | $(2.75) | | Adjusted EBITDA % | -14% | -9% | - Adjusted EBITDA loss **increased in FY2025** due to **higher SG&A** (including **$1.5 million in non-recurring G5 Infrared acquisition costs**) and **new product development expenses**, partially offset by **increased gross margin**[256](index=256&type=chunk) [Off Balance Sheet Arrangements](index=34&type=section&id=Off%20Balance%20Sheet%20Arrangements) LightPath does not engage in any activities involving variable interest entities or off-balance sheet arrangements - LightPath **does not engage in any activities involving variable interest entities or off-balance sheet arrangements**[257](index=257&type=chunk) [Critical Accounting Policies and Estimates](index=34&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting estimates include allowances for trade receivables and obsolete inventory, stock-based compensation, income taxes, and goodwill/intangible asset valuation - Critical accounting estimates include **allowances for trade receivables and obsolete inventory**, **valuation of stock-based compensation**, and **accounting for income taxes**[258](index=258&type=chunk) - Inventory obsolescence allowance is calculated based on sales and purchase history, with reserves ranging from **25% to 100%** for slow-moving or excess items[260](index=260&type=chunk) - Revenue is recognized upon **transfer of control** of products or services, with performance obligations for components and assemblies satisfied at a **point in time**, and engineering services recognized as **deliverables are met**[261](index=261&type=chunk) - Goodwill and amortizable intangible assets are recognized at **fair value in business combinations** and **tested for impairment annually** or when circumstances indicate recoverability issues[263](index=263&type=chunk)[264](index=264&type=chunk) - Income tax accounting involves **estimates for tax credits, benefits, deductions, and deferred tax assets/liabilities**, with a **valuation allowance established against deferred tax assets** due to uncertainty of future taxable income[266](index=266&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a Smaller Reporting Company, LightPath Technologies, Inc. is not required to provide quantitative and qualitative disclosures about market risk - LightPath, as a **Smaller Reporting Company**, is **exempt from providing quantitative and qualitative disclosures about market risk**[269](index=269&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=36&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The required financial statements and supplementary data are incorporated by reference from Item 15 of this Annual Report on Form 10-K - Financial statements and supplementary data are **incorporated by reference from Item 15**[270](index=270&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=36&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There have been no changes in or disagreements with accountants on accounting and financial disclosure - **No changes in or disagreements with accountants on accounting and financial disclosure**[271](index=271&type=chunk) [Item 9A. Controls and Procedures](index=37&type=section&id=Item%209A.%20Controls%20and%20Procedures) LightPath's management concluded disclosure controls and internal control over financial reporting were effective as of June 30, 2025, excluding G5 Infrared - As of June 30, 2025, LightPath's CEO and CFO concluded that disclosure controls and procedures were **effective**[272](index=272&type=chunk) - Management assessed internal control over financial reporting as **effective** as of June 30, 2025, based on the **COSO framework**[273](index=273&type=chunk) - The assessment of internal control over financial reporting **excluded G5 Infrared, LLC**, acquired on February 18, 2025, which represented approximately **14% of total assets, 16% of revenue, and 5% of net loss** for FY2025[273](index=273&type=chunk) - **No significant changes** in internal control over financial reporting occurred during the fourth quarter ended June 30, 2025[277](index=277&type=chunk) [Item 9B. Other Information](index=37&type=section&id=Item%209B.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025 - **No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement** during the three months ended June 30, 2025[278](index=278&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=37&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to LightPath Technologies, Inc - **Not applicable**[279](index=279&type=chunk) [PART III](index=37&type=section&id=PART%20III) [Item 10. Directors, Executive Officers and Corporate Governance](index=37&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the fiscal year 2026 Annual Stockholders' Meeting Proxy Statement - Information is **incorporated by reference** from the fiscal year 2026 Annual Stockholders' Meeting Proxy Statement[281](index=281&type=chunk) [Item 11. Executive Compensation](index=37&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the fiscal year 2026 Annual Stockholders' Meeting Proxy Statement - Information is **incorporated by reference** from the fiscal year 2026 Annual Stockholders' Meeting Proxy Statement[282](index=282&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management](index=37&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management) Information on security ownership is incorporated by reference from the fiscal year 2026 Annual Stockholders' Meeting Proxy Statement, with details on equity compensation plans - Information on security ownership is **incorporated by reference** from the fiscal year 2026 Annual Stockholders' Meeting Proxy Statement[283](index=283&type=chunk) Securities Authorized for Issuance Under Equity Compensation Plans (as of FY2025 end) | 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 | 1,923,484 | $1.82 | 4,184,925 | | Equity compensation plans not approved by security holders | — | — | — | [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=38&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the fiscal year 2026 Annual Stockholders' Meeting Proxy Statement - Information is **incorporated by reference** from the fiscal year 2026 Annual Stockholders' Meeting Proxy Statement[285](index=285&type=chunk) [Item 14. Principal Accountant Fees and Services](index=38&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the fiscal year 2026 Annual Stockholders' Meeting Proxy Statement - Information is **incorporated by reference** from the fiscal year 2026 Annual Stockholders' Meeting Proxy Statement[286](index=286&type=chunk) [PART IV](index=38&type=section&id=PART%20IV) [Item 15. Exhibits, Financial Statement Schedules](index=38&type=section&id=Item%2015.%20Exhibits,%20Financial%20Statement%20Schedules) This section lists all documents filed as part of the Annual Report on Form 10-K, including financial statements, corporate governance documents, material contracts, and certifications - This section details the **exhibits and financial statement schedules** filed as part of the Form 10-K, including **corporate governance documents, material contracts, and certifications**[288](index=288&type=chunk) - Financial statements are **indexed on page F-1** of the report[289](index=289&type=chunk) [Item 16. Form 10-K Summary](index=41&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item indicates that no Form 10-K Summary is provided - **No Form 10-K Summary is provided**[296](index=296&type=chunk) [Index to Consolidated Financial Statements](index=41&type=section&id=Index%20to%20Consolidated%20Financial%20Statements) [Report of Independent Registered Public Accounting Firm – BDO USA, P.C.](index=42&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm%20%E2%80%93%20BDO%20USA,%20P.C.) BDO USA, P.C. issued an unqualified opinion on LightPath's FY2025 consolidated financial statements and ASU 2023-07 adjustments, with critical audit matters including acquisition financing, intangible asset valuation, earnout liability, and warrant/preferred stock classification - BDO USA, P.C. provided an **unqualified opinion** on the consolidated financial statements for **FY2025** and on the retrospective application of **ASU 2023-07**[299](index=299&type=chunk)[300](index=300&type=chunk) - Critical audit matters included the **valuation of acquisition financing instruments** (warrants, Acquisition Notes), **valuation of G5 Infrared intangible assets** (tradenames, know-how, customer relationships), **valuation of the earnout liability**, and **classification of warrants and Series G Convertible Preferred Stock**[304](index=304&type=chunk)[305](index=305&type=chunk)[309](index=309&type=chunk)[311](index=311&type=chunk)[314](index=314&type=chunk) [Report of Independent Registered Public Accounting Firm – MSL, P.A.](index=44&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm%20%E2%80%93%20MSL,%20P.A.) MSL, P.A. issued an unqualified opinion on LightPath's FY2024 consolidated financial statements before retrospective accounting changes, serving as auditor from 2017 to 2024 - MSL, P.A. provided an **unqualified opinion** on the consolidated financial statements for **FY2024**, prior to the **retrospective application of ASU 2023-07**[319](index=319&type=chunk) - MSL, P.A. served as the Company's auditor from **2017 to 2024**[323](index=323&type=chunk) [Consolidated Financial Statements](index=45&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's core consolidated financial statements, including Balance Sheets, Statements of Comprehensive Income (Loss), Statements of Changes in Stockholders' Equity, and Statements of Cash Flows for FY2025 and FY2024 [Consolidated Balance Sheets as of June 30, 2025 and 2024](index=45&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20June%2030,%202025%20and%202024) Total assets significantly increased from **$48.1 million** to **$81.5 million** in FY2025 due to acquisitions, while total liabilities also rose, and stockholders' equity decreased Consolidated Balance Sheet Highlights | Asset/Liability/Equity | June 30, 2025 ($) | June 30, 2024 ($) | | :--------------------- | :---------------- | :---------------- | | Cash and cash equivalents | 4,877,036 | 3,480,268 | | Total current assets | 28,373,995 | 15,537,335 | | Total assets | 81,505,766 | 48,086,964 | | Total current liabilities | 17,100,125 | 8,036,348 | | Total liabilities | 31,628,488 | 17,887,299 | | Total stockholders' equity | 15,644,768 | 30,199,665 | - Total assets increased **significantly from $48.1 million in FY2024 to $81.5 million in FY2025**, largely due to acquisitions[325](index=325&type=chunk) - Total liabilities also increased **substantially from $17.9 million to $31.6 million**, reflecting acquisition financing[325](index=325&type=chunk) - Stockholders' equity **decreased from $30.2 million to $15.6 million**, despite an increase in common stock shares[326](index=326&type=chunk) [Consolidated Statements of Comprehensive Income (Loss) for the years ended June 30, 2025 and 2024](index=46&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)%20for%20the%20years%20ended%20June%2030,%202025%20and%202024) Net loss increased to **$14.9 million** in FY2025 from **$8.0 million** in FY2024 due to higher operating expenses and non-operating items, despite a **17%** revenue increase Consolidated Statements of Comprehensive Income (Loss) Summary | Metric | FY2025 ($) | FY2024 ($) | | :------------------------ | :------------ | :------------ | | Revenue, net | 37,202,630 | 31,726,192 | | Gross profit | 10,130,114 | 8,631,246 | | Operating loss | (11,822,881) | (7,826,664) | | Net loss | (14,873,182) | (8,007,346) | | Comprehensive loss | (14,404,432) | (8,103,946) | | Loss per common share (basic/diluted) | (0.36) | (0.21) | - Net loss increased to **$14.9 million in FY2025** from **$8.0 million in FY2024**, primarily due to **higher operating expenses and non-operating items** like interest expense and acquisition-related fair value changes[328](index=328&type=chunk) - Revenue increased by **17% year-over-year**, while gross profit also increased by **17%**[328](index=328&type=chunk) [Consolidated Statements of Changes in Stockholders' Equity for the years ended June 30, 2025 and 2024](index=46&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity%20for%20the%20years%20ended%20June%2030,%202025%20and%202024) Total stockholders' equity decreased from **$30.2 million** to **$15.6 million** in FY2025, impacted by Series G Convertible Preferred Stock issuance, G5 acquisition, and net loss - Total stockholders' equity **decreased from $30.2 million in FY2024 to $15.6 million in FY2025**[331](index=331&type=chunk) - Key changes in equity for FY2025 include the issuance of **Series G Convertible Preferred Stock ($19.5 million)**, **common stock for G5 acquisition ($4.9 million)**, and **common stock under private equity placement ($1.6 million)**[330](index=330&type=chunk)[331](index=331&type=chunk) - **Accretion of dividends on Series G preferred stock ($14.8 million)** and the **net loss ($14.9 million)** significantly impacted the accumulated deficit[331](index=331&type=chunk) [Consolidated Statements of Cash Flows](index=48&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating activities shifted to using **$8.3 million** in FY2025, investing activities used **$19.7 million** (G5 acquisition), and financing activities provided **$29.3 million** (G5 financing) Consolidated Statements of Cash Flows Summary | Cash Flow Activity | FY2025 ($) | FY2024 ($) | | :------------------------ | :------------ | :------------ | | Net cash (used in) provided by operating activities | (8,331,390) | 521,037 | | Net cash used in investing activities | (19,738,323) | (2,665,236) | | Net cash provided by (used in) financing activities | 29,296,277 | (1,466,440) | | Change in cash, cash equivalents and restricted cash | 1,396,768 | (3,664,222) | | Cash, cash equivalents and restricted cash, end of period | 4,877,036 | 3,480,268 | - Operating activities shifted from **providing $0.5 million in FY2024 to using $8.3 million in FY2025**, primarily due to **increased net loss and acquisition-related expenses**[334](index=334&type=chunk) - Investing activities **used $19.7 million in FY2025**, largely for the **G5 Infrared acquisition ($18.5 million)**[335](index=335&type=chunk) - Financing activities **provided $29.3 million in FY2025**, mainly from the **G5 Infrared acquisition financing**[335](index=335&type=chunk) [Notes to Consolidated Financial Statements (continued)](index=49&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(continued)) These notes provide detailed explanations of financial statement figures, covering organization, accounting policies, acquisitions, revenue, inventory, assets, equity, taxes, and other financial disclosures [1. Organization and History](index=49&type=section&id=1.%20Organization%20and%20History) LightPath Technologies, Inc., incorporated in 1992, has expanded through acquisitions like ISP, Visimid (2023), and G5 Infrared (2025), manufacturing optical components and thermal imaging cameras - LightPath Technologies, Inc. was incorporated in **1992** and has expanded through acquisitions, including **ISP (2016), Visimid (July 2023), and G5 Infrared (February 2025)**[337](index=337&type=chunk)[338](index=338&type=chunk)[340](index=340&type=chunk) - The company manufactures **optical components, assemblies, and sub-systems**, including **precision molded glass aspheric optics, infrared optics, and thermal imaging cameras**, serving diverse applications[341](index=341&type=chunk) [2. Significant Accounting Policies](index=50&type=section&id=2.%20Significant%20Accounting%20Policies) Significant accounting policies cover consolidation, inventory valuation, goodwill/intangible asset impairment, operating leases, deferred income taxes, and segment reporting, with new pronouncements under evaluation - Consolidated financial statements include the company and its **wholly-owned subsidiaries**, with all **significant intercompany balances and transactions eliminated**[343](index=343&type=chunk) - Inventories are stated at the **lower of cost or net realizable value** on a **first-in, first-out basis**, with **obsolescence allowances** based on sales and purchase history[348](index=348&type=chunk) - Goodwill and amortizable intangible assets are recognized at **fair value in business combinations** and **tested for impairment annually** or when circumstances indicate[351](index=351&type=chunk)[352](index=352&type=chunk) - Operating leases are recognized on the balance sheet as **right-of-use assets and liabilities**, measured at the **present value of future minimum lease payments**[353](index=353&type=chunk)[355](index=355&type=chunk) - Deferred income tax assets and liabilities are computed based on **temporary differences**, with **valuation allowances established against deferred tax assets** when realization is uncertain[357](index=357&type=chunk) - The company operates in **one reportable operating segment (optics)** and has **retrospectively applied ASU 2023-07, Segment Reporting**[378](index=378&type=chunk) - New accounting pronouncements, **ASU 2023-09 (Income Tax Disclosures) and ASU 2024-03 (Expense Disaggregation)**, are being evaluated but are **not expected to materially impact operating results, financial position, or cash flows**[379](index=379&type=chunk)[381](index=381&type=chunk)[382](index=382&type=chunk) [3. Acquisitions](index=54&type=section&id=3.%20Acquisitions) LightPath acquired Visimid (July 2023 for **$2.7 million**) and G5 Infrared (February 2025 for **$27.1 million**), expanding thermal imaging and cooled infrared camera capabilities, recognizing **$7.0 million** goodwill for G5 - Visimid Technologies was acquired in **July 2023** for approximately **$2.7 million** (net of cash acquired), specializing in **thermal imaging and night vision design**, aligning with LightPath's engineered solutions strategy[383](index=383&type=chunk)[384](index=384&type=chunk)[386](index=386&type=chunk) - G5 Infrared was acquired on **February 18, 2025**, for total consideration of approximately **$27.1 million**, expanding LightPath's portfolio to include **cooled infrared camera systems and imaging solutions**[391](index=391&type=chunk)[392](index=392&type=chunk)[395](index=395&type=chunk) - The G5 Infrared acquisition consideration included **$20.3 million in cash**, **1,972,501 shares of Class A Common Stock ($4.9 million fair value)**, and a **potential earnout of up to $23 million, initially valued at $3.5 million**[395](index=395&type=chunk) - The earnout liability for G5 Infrared, valued using a Monte Carlo method, was **adjusted to $5.0 million** as of June 30, 2025, an **increase of $1.4 million**[399](index=399&type=chunk) - Identifiable intangible assets acquired from G5 Infrared totaled **$13.8 million**, comprising **backlog, know-how, tradename, and customer relationships**, with **goodwill recognized at $7.0 million**[403](index=403&type=chunk)[405](index=405&type=chunk) G5 Infrared Financial Results (Acquisition Date to June 30, 2025) | Metric | Amount (Millions) | | :----------------- | :---------------- | | Revenue | $5.6 | | Loss before income taxes | $(0.4) | Unaudited Pro Forma Financial Results (G5 Infrared Acquisition as of July 1, 2023) | Metric | FY2025 ($) | FY2024 ($) | | :----------------- | :------------ | :------------ | | Revenue | 49,733,817 | 48,018,602 | | Income before taxes | (9,520,465) | (5,996,886) | [4. Revenue](index=57&type=section&id=4.%20Revenue) Revenue is recognized upon transfer of control for products and assemblies at a point in time, while engineering services revenue is recognized as deliverables are met - Revenue is recognized upon **transfer of control** of products or services, with performance obligations for optical components and assemblies satisfied at a **point in time**[411](index=411&type=chunk)[414](index=414&type=chunk) - Product development agreements for engineering services are generally **short-term**, with revenue recognized upon **satisfaction of deliverables**[414](index=414&type=chunk) Revenue by Product Group (FY2025 vs. FY2024) | Product Group | FY2025 ($) | FY2024 ($) | | :-------------------- | :------------ | :------------ | | Infrared components | 14,310,589 | 14,089,277 | | Visible components | 11,736,549 | 11,233,737 | | Assemblies and modules| 7,968,296 | 4,451,165 | | Engineering services | 3,187,196 | 1,952,013 | | **Total revenue** | **37,202,630**| **31,726,192**| [5. Inventories, net](index=58&type=section&id=5.%20Inventories,%20net) Total inventories, net, significantly increased from **$6.6 million** in FY2024 to **$12.9 million** in FY2025, with the obsolescence allowance rising from **$1.2 million** to **$2.0 million** Components of Inventories, Net | Component | June 30, 2025 ($) | June 30, 2024 ($) | | :-------------------- | :---------------- | :---------------- | | Raw materials | 4,507,764 | 3,112,428 | | Work in process | 7,321,779 | 2,333,240 | | Finished goods | 3,053,726 | 2,330,287 | | Allowance for obsolescence | (2,024,431) | (1,224,896) |\ | **Total Inventories, net** | **12,858,838** | **6,551,059** | - Total inventories, net, increased **significantly from $6.6 million in FY2024 to $12.9 million in FY2025**[417](index=417&type=chunk) - The allowance for obsolescence **increased from $1.2 million to $2.0 million**, with approximately **$0.1 million of inventory written off** against the allowance in both fiscal years[417](index=417&type=chunk) [6. Property and Equipment, net](index=58&type=section&id=6.%20Property%20and%20Equipment,%20net) Net property and equipment increased to **$15.9 million** in FY2025 from **$15.2 million** in FY2024, with depreciation and amortization expense rising to **$2.7 million** Property and Equipment, Net | Category | June 30, 2025 ($) | June 30, 2024 ($) | | :------------------------ | :---------------- | :---------------- | | Manufacturing equipment | 24,257,063 | 22,582,429 | | Leasehold improvements | 9,411,482 | 8,964,714 | | Construction in progress | 1,536,968 | 646,217 | | Total property and equipment | 37,053,807 | 33,513,786 | | Less accumulated depreciation and amortization | (21,189,746) | (18,303,174) | | **Total property and equipment, net** | **15,864,061** | **15,210,612** | - Net property and equipment increased to **$15.9 million in FY2025 from $15.2 million in FY2024**[421](index=421&type=chunk) - Depreciation and amortization expense for property and equipment was **$2.7 million in FY2025**, up from **$2.4 million in FY2024**[421](index=421&type=chunk) [7. Goodwill and Intangible Assets](index=58&type=section&id=7.%20Goodwill%20and%20Intangible%20Assets) Goodwill increased due to the G5 Infrared acquisition, with total intangible assets, net, rising significantly from **$3.7 million** in FY2024 to **$16.0 million** in FY2025 - Goodwill **increased due to the G5 Infrared acquisition**, with **no impairment recorded** in FY2025 or FY2024[422](index=422&type=chunk)[423](index=423&type=chunk) Identifiable Intangible Assets, Net | Intangible Asset | Useful Lives (Years) | June 30, 2025 ($) | June 30, 2024 ($) | | :-------------------- | :------------------- | :---------------- | :---------------- | | Customer relationships | 10 - 15 | 8,852,300 | 3,712,300 | | Trade secrets | 8 - 10 | 8,998,304 | 4,197,304 | | Tradenames | 8 - 10 | 7,706,418 | 4,256,418 | | Backlog | 1 | 824,525 | 463,525 | | Total intangible assets | | 26,381,547 | 12,629,547 | | Less accumulated amortization | | (10,393,624) | (8,978,808) | | **Total intangible assets, net** | | **15,987,923** | **3,650,739** | - Total intangible assets, net

Financial Data and Key Metrics Changes - Revenue for Q4 fiscal 2025 increased by 41.4% to $12.2 million compared to $8.6 million in the same quarter of the previous year [28] - Gross profit increased by 6.6% to $2.7 million, representing 22% of total revenues, down from 29.2% in the same quarter of the prior fiscal year [30] - Net loss for Q4 fiscal 2025 totaled $7.1 million, or $0.16 per share, compared to a loss of $2.4 million, or $0.06 per share in the same quarter of the previous year [31] - Adjusted EBITDA loss for Q4 fiscal 2025 was $1.9 million, compared to a loss of $1.1 million for the same period of the prior fiscal year [32] Business Line Data and Key Metrics Changes - Revenue from infrared components was $4.9 million, accounting for 40% of consolidated revenue [29] - Revenue from visible components was $2.8 million, or 23.2% of consolidated revenue [29] - Revenue from assemblies and modules was $4.2 million, or 34.1% of consolidated revenue [29] - Revenue from engineering services was $0.3 million, or 2.1% of consolidated revenue [29] Market Data and Key Metrics Changes - The company reported a record backlog of $90 million, with more than two-thirds attributed to systems and subsystems [10] - Significant orders totaling over $40 million for infrared cameras were announced for delivery in 2026 and 2027, primarily for border surveillance and counter-UAS applications [11][14] - More than $10 million of the backlog is specifically for cameras designed for counter-UAS systems [15] Company Strategy and Development Direction - The company is transitioning from a component manufacturer to focusing on subsystems and systems enabled by its technologies, particularly in infrared imaging [7] - The acquisition of G5 Infrared is a strategic move to enhance capabilities in thermal imaging cameras and address supply chain challenges [9] - The company aims to leverage its proprietary BlackDiamond glass to create value and capture more of the market [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing a 41% quarter-over-quarter growth and a substantial backlog as indicators of success [26] - The ongoing geopolitical tensions and supply chain disruptions have increased demand for alternatives to germanium, positioning the company favorably [18] - Management anticipates significant growth in the coming years, driven by investments in unique materials and technologies [26] Other Important Information - The company received an $8 million strategic investment from Ondas Holdings and Unusual Machines to support manufacturing efforts [25] - The integration of G5 Infrared was completed ahead of schedule and below budget, enhancing operational capabilities [32] Q&A Session Summary Question: How much did G5 contribute to revenue in the June quarter? - G5 contributed $4.2 million to revenue [39] Question: How much does G5 comprise of the $90 million backlog? - Approximately two-thirds of the backlog consists of cameras and assemblies [40] Question: Are you expecting to be sole sourced for the border security opportunity? - The company is in a unique position and may end up providing all the towers along the border [41] Question: Can you elaborate on the expansion of capacity in Visimid? - The facility will support multiple projects beyond the Lockheed contract, including uncooled cameras and other developments [48] Question: What is the expected gross margin improvement timeline? - The company expects to reach close to 30% gross margin soon, with a longer-term goal of 40% as the product mix shifts [64] Question: What is the status of the Lockheed contract decision timeframe? - The formal decision is expected by next fall, but indications may come sooner [67]

Financial Data and Key Metrics Changes - Revenue for Q4 2025 increased by 41.4% to $12.2 million compared to $8.6 million in the same quarter of the previous year [28] - Gross profit increased by 6.6% to $2.7 million, representing 22% of total revenues, down from 29.2% in the prior year due to increased inventory reserve charges [30] - Operating expenses rose by 52% to $7.2 million, attributed to the integration of G5 Infrared and increased sales and marketing expenses [31] - Net loss for Q4 2025 totaled $7.1 million, or $0.16 per share, compared to a loss of $2.4 million, or $0.06 per share, in the same quarter last year [31] - Adjusted EBITDA loss for Q4 2025 was $1.9 million, compared to a loss of $1.1 million in the prior year [32] Business Line Data and Key Metrics Changes - Sales of infrared components were $4.9 million, accounting for 40% of consolidated revenue [29] - Revenue from visible components was $2.8 million, or 23.2% of consolidated revenue [29] - Revenue from assemblies and modules was $4.2 million, or 34.1% of consolidated revenue [29] - Revenue from engineering services was $0.3 million, or 2.1% of consolidated revenue [29] Market Data and Key Metrics Changes - The company reported a backlog of $90 million, with over two-thirds in systems and subsystems, indicating a successful strategic shift [10] - Recent large orders totaling over $40 million for infrared cameras are expected to be delivered in 2026 and 2027, primarily for border surveillance and counter-UAS applications [11][14] - More than $10 million of the backlog is specifically for cameras for counter-UAS systems, reflecting growth in this rapidly expanding market [15] Company Strategy and Development Direction - The company is transitioning from a component manufacturer to focusing on subsystems and systems, particularly in the infrared imaging market [7] - The acquisition of G5 Infrared is a strategic move to enhance capabilities in thermal imaging cameras and leverage proprietary materials [9] - The company aims to capture more value by moving up the supply chain and focusing on engineered solutions rather than just components [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's transformation and the potential for significant growth, supported by a strong backlog and strategic investments [26] - The ongoing geopolitical issues and supply chain constraints are driving demand for the company's proprietary BlackDiamond glass, which serves as an alternative to germanium [18] - Management anticipates margin expansion and improved profitability as the company continues to execute its growth strategy [34] Other Important Information - The company received an $8 million strategic investment from Ondas Holdings and Unusual Machines to support manufacturing efforts [25] - The integration of G5 Infrared was completed ahead of schedule and below budget, enhancing operational capabilities [32] Q&A Session Summary Question: How much did G5 contribute to revenue in the June quarter? - G5 contributed $4.2 million to revenue [39] Question: How much does G5 comprise of the $90 million backlog? - Approximately two-thirds of the backlog consists of cameras and assemblies [40] Question: Are you expecting to be sole sourced for the border security opportunity? - The company is in a unique position and may end up providing all the towers along the border [41] Question: Can you elaborate on the expansion of capacity in Visimid? - The new facility will support various projects beyond just the NGSRI, including uncooled cameras and drone cameras [48] Question: What is the expected gross margin improvement? - Adjusted gross margins could reach 35% quickly, with a long-term target of around 40% [62] Question: What is the timeline for the Lockheed contract decision? - The formal decision is expected by next fall, but indications may come sooner [64]

Financial Data and Key Metrics Changes - Revenue for Q4 2025 increased by 41.4% to $12.2 million compared to $8.6 million in the same quarter of the previous year [28] - Gross profit increased by 6.6% to $2.7 million, representing 22% of total revenues in Q4 2025, down from 29.2% in the same quarter of the prior fiscal year [30] - Net loss for Q4 2025 totaled $7.1 million, or $0.16 per share, compared to a loss of $2.4 million, or $0.06 per share in the same quarter of the previous year [31] - Adjusted EBITDA loss for Q4 2025 was $1.9 million compared to a loss of $1.1 million for the same period of the prior fiscal year [32] Business Line Data and Key Metrics Changes - Sales of infrared components were $4.9 million, accounting for 40% of consolidated revenue [28] - Revenue from visible components was $2.8 million, or 23.2% of consolidated revenue [29] - Revenue from assemblies and modules was $4.2 million, or 34.1% of consolidated revenue [29] - Revenue from engineering services was $0.3 million, or 2.1% of consolidated revenue [29] Market Data and Key Metrics Changes - The company reported a record backlog of $90 million, with more than two-thirds attributed to systems and subsystems [10] - The backlog includes significant orders for infrared cameras, particularly for border surveillance and counter-UAS applications [11][14] Company Strategy and Development Direction - The company is transitioning from a component manufacturer to focusing on subsystems and systems enabled by its technologies, particularly in infrared imaging [7][10] - The acquisition of G5 Infrared is a strategic move to enhance capabilities in thermal imaging cameras and address supply chain challenges [9][10] - The company aims to capture more value by moving up the supply chain and focusing on engineered solutions [8][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing a 41% quarter-over-quarter growth and a substantial backlog as indicators of success [26] - The ongoing geopolitical issues and supply chain constraints are driving interest in the company's proprietary BlackDiamond glass as a substitute for germanium [18] - Management anticipates significant growth opportunities in defense contracts and other markets, with expectations for margin expansion in the coming quarters [33][34] Other Important Information - The company received an $8 million strategic investment from Ondas Holdings and Unusual Machines to support manufacturing efforts [25][34] - The integration of G5 Infrared was completed ahead of schedule and below budget, enhancing operational capabilities [32] Q&A Session Summary Question: Contribution of G5 to revenue in the June quarter - G5 contributed $4.2 million to revenue in the quarter [39] Question: Breakdown of the $90 million backlog - Approximately two-thirds of the backlog consists of cameras and assemblies [40] Question: Expectations for sole sourcing in border security contracts - The company is in a unique position and may end up providing all the towers along the border [41] Question: Expansion of capacity in Visimid - The facility will support various projects beyond the NGSRI, including uncooled cameras and drone cameras [48] Question: Gross margin dynamics - Adjusted gross margin is close to 30%, with expectations to reach 35% quickly [64] Question: Timeline for Lockheed contract decision - The formal decision is expected by next fall, but indications may come sooner [67] Question: Revenue expectations from a leading global technology customer - The customer was initially expected to contribute around $9 million annually, but the current run rate is more than double that [75]

Financial Data and Key Metrics Changes - Revenue for Q4 2025 increased by 41.4% to $12.2 million compared to $8.6 million in the same quarter of the previous year [25] - Gross profit increased by 6.6% to $2.7 million, representing 22% of total revenues, down from 29.2% in the prior year due to increased inventory reserve charges [26] - Net loss for Q4 2025 totaled $7.1 million, or $0.16 per share, compared to a loss of $2.4 million, or $0.06 per share in the same quarter last year [28] - Adjusted EBITDA loss for Q4 2025 was $1.9 million, compared to a loss of $1.1 million in the prior year [29] Business Line Data and Key Metrics Changes - Sales of infrared components were $4.9 million, accounting for 40% of consolidated revenue [25] - Revenue from visible components was $2.8 million, or 23.2% of consolidated revenue [25] - Revenue from assemblies and modules was $4.2 million, or 34.1% of consolidated revenue [25] - Revenue from engineering services was $0.3 million, or 2.1% of consolidated revenue [25] Market Data and Key Metrics Changes - The company reported a record backlog of $90 million, with more than two-thirds in systems and subsystems [9] - Significant orders totaling over $40 million for infrared cameras were announced for delivery in 2026 and 2027, primarily for border surveillance and counter-UAS applications [10][12] - More than $10 million of the backlog is specifically for cameras for counter-UAS systems [13] Company Strategy and Development Direction - The company is transitioning from a component manufacturer to focusing on subsystems and systems enabled by its technologies, particularly in infrared imaging [6][9] - The acquisition of G5 Infrared is a strategic move to enhance capabilities in thermal imaging cameras and address supply chain challenges [8][24] - The company aims to capture more value by moving up the supply chain and focusing on engineered solutions [7][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing a 41% quarter-over-quarter growth and a significant backlog as indicators of success [24] - The ongoing geopolitical issues and supply chain constraints are driving interest in the company's proprietary BlackDiamond glass as a substitute for germanium [17] - Management anticipates margin expansion and continued growth in the coming quarters, with a focus on transforming the company [30][65] Other Important Information - The company received an $8 million strategic investment from Ondas Holdings and Unusual Machines to support manufacturing efforts [24] - The integration of G5 Infrared was completed ahead of schedule and below budget, enhancing operational capabilities [30] Q&A Session Summary Question: Contribution of G5 to revenue in the June quarter - G5 contributed $4.2 million to revenue in the quarter [34] Question: Expectation of being sole sourced for border security - The company is in a unique position and may end up providing all the towers along the border [35] Question: Expansion of capacity in Visimid - The new facility will support various projects beyond just the Lockheed contract [38] Question: Gross margin dynamics - Adjusted gross margin could be close to 30%, with potential to reach 35% quickly [48] Question: Backlog definition and measurement - Backlog consists of real orders, with about 60% expected to ship in fiscal year 2026 [46] Question: Revenue expectations from the $40 million order - The customer was expected to contribute around $9 million annually, but the actual contribution is more than double that [55]

Core Insights - LightPath Technologies, Inc. reported a larger-than-expected loss for the fourth quarter, with losses of 16 cents per share, missing the analyst estimate of 4 cents [1] - The company's quarterly revenue was $12.21 million, slightly beating the Street estimate of $12.2 million and showing a significant increase from $8.63 million in the same period last year [2] - CEO Sam Rubin emphasized the company's strategic shift away from Germanium optics towards proprietary BlackDiamond glass and complete IR camera systems, indicating a focus on key defense verticals [3] Financial Performance - Fourth-quarter loss: 16 cents per share, compared to the expected loss of 4 cents [1] - Quarterly revenue: $12.21 million, exceeding the estimate of $12.2 million and up from $8.63 million year-over-year [2] Stock Performance - LightPath Technologies stock fell by 14.31%, trading at $5.57 in extended trading following the earnings report [3]

Core Insights - LightPath Technologies reported significant growth in demand for Germanium-free optics, particularly from defense and public safety customers, leading to a meaningful backlog increase [4][5][7] Financial Performance - Revenue for Q4 FY2025 increased by 41.4% to $12.2 million compared to $8.6 million in Q4 FY2024 [2][8] - Full-year revenue for FY2025 rose by 17.4% to $37.6 million from $31.7 million in FY2024 [2][14] - Gross profit for Q4 FY2025 was $2.7 million, a 6.6% increase from $2.5 million in Q4 FY2024, representing 22.0% of total revenues [2][9] - Operating expenses surged by 52.0% to $7.2 million in Q4 FY2025, primarily due to the integration of G5 and increased marketing efforts [2][10] - The net loss for Q4 FY2025 was $7.1 million, compared to a loss of $2.4 million in the same quarter of the previous year [2][12] - Adjusted EBITDA loss for Q4 FY2025 was $2.0 million, worsening from a loss of $1.1 million in Q4 FY2024 [2][13] Product and Market Developments - The company secured an initial $18.2 million order for infrared cameras from a leading global technology customer, followed by a $22.1 million follow-on order [5][11] - LightPath launched its first industrial-grade MWIR OGI camera and is actively redesigning its product line to replace Germanium with proprietary BlackDiamond™ material [6][7] - The company is focused on scaling deliveries and converting a robust pipeline into sustainable revenue growth through FY2026 and beyond [7] Strategic Focus - Management emphasized a strategic shift away from Germanium optics towards proprietary BlackDiamond™ solutions, driven by supply chain risks and geopolitical uncertainties [4][6] - The company aims to solidify its position as a vertically-integrated imaging solutions provider, enhancing margins and reducing supply chain risks [7]

[Executive Summary](index=1&type=section&id=Executive%20Summary) LightPath Technologies reported significant revenue growth in Q4 and full year fiscal 2025, driven by robust demand for Germanium-free optics, despite increased net losses and adjusted EBITDA losses due to higher operating expenses and non-cash charges [Financial Highlights (Q4 & FY2025)](index=1&type=section&id=Financial%20Highlights%20(Q4%20%26%20FY2025)) LightPath Technologies reported significant revenue growth in Q4 and full year fiscal 2025, driven by robust demand for Germanium-free optics, despite increased net losses and adjusted EBITDA losses due to higher operating expenses and non-cash charges Q4 & FY2025 Financial Highlights | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change (QoQ) | Year Ended June 30, 2025 | Year Ended June 30, 2024 | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $12.2 million | $8.6 million | 41.4% | $37.6 million | $31.7 million | 17.3% | | Gross Profit | $2.7 million | $2.5 million | 6.6% | $10.1 million | $8.6 million | 17.4% | | Operating Expenses | $7.2 million | $4.7 million | 52.0% | $22.0 million | $16.5 million | 33.4% | | Net Income (Loss) | $(7.1) million | $(2.4) million | -199.8% | $(14.9) million | $(8.0) million | -85.7% | | Adjusted EBITDA* (non-GAAP) | $(2.0) million | $(1.1) million | -77.1% | $(5.1) million | $(2.8) million | -83.8% | [Operational & Strategic Highlights](index=1&type=section&id=Operational%20%26%20Strategic%20Highlights) The company secured significant IR camera orders, a strategic investment, and commenced production of Germanium-free IR camera products, validating its strategy to shift towards BlackDiamond™ glass and higher-value systems - Announced an initial **$18.2 million purchase order** for IR cameras, with a follow-on **$22.1 million purchase order**, expected to be delivered in CY 2026 and CY 2027 respectively[7](index=7&type=chunk) - Secured an **$8.0 million strategic investment** from Ondas Holdings and Unusual Machines to support growth in the drone/UAV sector[7](index=7&type=chunk) - Commenced production of two high-end cooled IR camera products, redesigned from G5 Infrared's original design to utilize LightPath's proprietary BlackDiamond™ Glass in place of Germanium[7](index=7&type=chunk) - Awarded an initial **$2.2 million engineering development model order** for IR cameras by L3Harris Technologies for the Navy's SPEIR Program[7](index=7&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management commentary highlights the validation of strategic shifts towards Germanium-free optics and IR camera systems, driven by accelerating market demand and key orders [Strategic Focus and Market Demand](index=1&type=section&id=Strategic%20Focus%20and%20Market%20Demand) LightPath's CEO highlighted the validation of their strategy to move away from Germanium optics, scale BlackDiamond™ glass into defense verticals, and expand into complete IR camera systems. Geopolitical uncertainty and Chinese export restrictions are accelerating customer demand for Germanium alternatives, favoring LightPath's solutions - Strategy validated by moving away from Germanium optics, scaling BlackDiamond™ glass into defense, and pushing into complete IR camera systems[5](index=5&type=chunk) - Supply chain risk and Chinese critical mineral export restrictions are accelerating customer demand for Germanium alternatives, driving adoption of BlackDiamond™ solution[5](index=5&type=chunk) - Focus on converting market's Germanium supply chain angst into BlackDiamond™-based camera sales to build sustainable, long-term value[9](index=9&type=chunk) [Key Orders and Strategic Investments](index=1&type=section&id=Key%20Orders%20and%20Strategic%20Investments) The company secured substantial orders for IR cameras from a global technology customer and defense contracts, alongside a strategic investment to bolster its position in the drone/UAV sector - Booked an initial **$18.2 million IR camera order** and a follow-on **$22.1 million purchase order** from a leading global technology customer[6](index=6&type=chunk) - Secured a **$2.2 million engineering development model order** from L3Harris for the Navy's SPEIR program[6](index=6&type=chunk) - Added **$9.7 million in cooled-camera orders** for counter UAS applications with an existing defense customer[6](index=6&type=chunk) - Secured an **$8.0 million strategic investment** from Ondas Holdings and Unusual Machines to support growth in the drone/UAV sector[7](index=7&type=chunk) [Product Innovation and Germanium-Free Transition](index=1&type=section&id=Product%20Innovation%20and%20Germanium-Free%20Transition) LightPath launched new industrial-grade MWIR OGI cameras and is actively redesigning G5's product line to replace Germanium with its proprietary BlackDiamond™ material, driven by customer demand for secure supply chains - Launched first industrial-grade MWIR OGI camera and validated its performance in line with EPA processes[7](index=7&type=chunk) - Actively redesigning G5's product line to implement proprietary BlackDiamond™ material in place of Germanium due to intense customer demand for secure supply chains[7](index=7&type=chunk)[8](index=8&type=chunk) - Germanium-free redesigns reduce supply chain risk and shorten time-to-field, expanding reachable market in defense and industrial sectors[9](index=9&type=chunk) [Fourth Quarter Fiscal 2025 Financial Results](index=2&type=section&id=Fourth%20Quarter%20Fiscal%202025%20Financial%20Results) The fourth quarter of fiscal 2025 saw significant revenue growth, but also increased operating expenses, leading to a wider net loss and adjusted EBITDA loss [Revenue Analysis (Q4 FY2025)](index=2&type=section&id=Revenue%20Analysis%20(Q4%20FY2025)) Total revenue for Q4 FY2025 increased significantly by 41.4% year-over-year, primarily driven by strong growth in Assemblies & Modules and Infrared Components Q4 FY2025 Revenue by Product Group | Product Group | Q4 FY2025 Revenue ($ in millions) | Q4 FY2024 Revenue ($ in millions) | % Change | | :--- | :--- | :--- | :--- | | Infrared Components | $4.9 | $3.0 | 63% | | Visible Components | $2.8 | $3.2 | -11% | | Assemblies & Modules | $4.2 | $1.4 | 203% | | Engineering Services | $0.3 | $1.0 | -75% | | **Total Revenue** | **$12.2** | **$8.6** | **41.4%** | [Gross Profit (Q4 FY2025)](index=2&type=section&id=Gross%20Profit%20(Q4%20FY2025)) Gross profit increased by 6.6% in Q4 FY2025, but gross margin as a percentage of revenue decreased due to a significant increase in inventory reserve charges, mainly for visible components Q4 FY2025 Gross Profit | Metric | Q4 FY2025 | Q4 FY2024 | % Change | | :--- | :--- | :--- | :--- | | Gross Profit | $2.7 million | $2.5 million | 6.6% | | Gross Margin % | 22.0% | 29.2% | -7.2 percentage points | - Gross margin percentage decreased primarily due to an approximately **$0.5 million increase in inventory reserve charges**, mainly attributable to visible components[10](index=10&type=chunk) [Operating Expenses (Q4 FY2025)](index=2&type=section&id=Operating%20Expenses%20(Q4%20FY2025)) Operating expenses rose by 52.0% in Q4 FY2025, driven by the integration of G5, increased sales and marketing, higher materials spend for new product development, and an increase in the fair value of acquisition liabilities Q4 FY2025 Operating Expenses | Metric | Q4 FY2025 | Q4 FY2024 | % Change | | :--- | :--- | :--- | :--- | | Operating Expenses | $7.2 million | $4.7 million | 52.0% | - Increase primarily due to: (i) G5 acquisition integration and increased sales/marketing; (ii) higher materials spend for internally-funded new product development; and (iii) a **$1.4 million increase in fair value of acquisition liabilities**[11](index=11&type=chunk) [Net Loss and EPS (Q4 FY2025)](index=2&type=section&id=Net%20Loss%20and%20EPS%20(Q4%20FY2025)) Net loss significantly widened in Q4 FY2025, primarily due to increased non-cash, non-operating expenses related to the G5 acquisition and its financing Q4 FY2025 Net Loss and EPS | Metric | Q4 FY2025 | Q4 FY2024 | % Change | | :--- | :--- | :--- | :--- | | Net Loss | $(7.1) million | $(2.4) million | -199.8% | | Loss per Share (Basic & Diluted) | $(0.16) | $(0.06) | -166.7% | - Change in net loss primarily driven by an increase in certain non-cash, non-operating expenses associated with the G5 acquisition and related financing[12](index=12&type=chunk) [Adjusted EBITDA (Q4 FY2025)](index=2&type=section&id=Adjusted%20EBITDA%20(Q4%20FY2025)) Adjusted EBITDA loss increased substantially in Q4 FY2025 compared to the prior year, reflecting the overall increase in expenses and losses Q4 FY2025 Adjusted EBITDA Loss | Metric | Q4 FY2025 | Q4 FY2024 | % Change | | :--- | :--- | :--- | :--- | | Adjusted EBITDA Loss | $(2.0) million | $(1.1) million | -77.1% | [Full Year Fiscal 2025 Financial Results](index=2&type=section&id=Full%20Year%20Fiscal%202025%20Financial%20Results) Full year fiscal 2025 saw revenue growth across most product groups, but also a significant increase in operating expenses and net loss, leading to a wider adjusted EBITDA loss [Revenue Analysis (FY2025)](index=2&type=section&id=Revenue%20Analysis%20(FY2025)) Full year fiscal 2025 revenue increased by 17.4%, primarily driven by strong growth in Assemblies & Modules and Engineering Services FY2025 Revenue by Product Group | Product Group | FY2025 Revenue ($ in millions) | FY2024 Revenue ($ in millions) | % Change | | :--- | :--- | :--- | :--- | | Infrared Components | $14.3 | $14.1 | 2% | | Visible Components | $11.7 | $11.2 | 4% | | Assemblies & Modules | $8.0 | $4.5 | 79% | | Engineering Services | $3.2 | $2.0 | 63% | | **Total Revenue** | **$37.2** | **$31.7** | **17.4%** | [Gross Profit (FY2025)](index=2&type=section&id=Gross%20Profit%20(FY2025)) Gross profit for fiscal 2025 increased by 17.4%, maintaining a consistent gross margin percentage. This was favorably impacted by product mix but unfavorably by increased inventory reserve charges FY2025 Gross Profit | Metric | FY2025 | FY2024 | % Change | | :--- | :--- | :--- | :--- | | Gross Profit | $10.1 million | $8.6 million | 17.4% | | Gross Margin % | 27.2% | 27.2% | 0.0 percentage points | - Gross margin percentage was favorably impacted by product mix (more revenue from higher-margin assemblies and modules, and engineering services) and unfavorably by an approximately **$0.5 million increase in inventory reserve charges**, primarily related to visible components[14](index=14&type=chunk)[15](index=15&type=chunk) [Operating Expenses (FY2025)](index=3&type=section&id=Operating%20Expenses%20(FY2025)) Operating expenses for fiscal 2025 increased by 33.4%, primarily due to higher legal and consulting fees, increased sales and marketing, higher materials spend for new product development, and an increase in the fair value of acquisition liabilities FY2025 Operating Expenses | Metric | FY2025 | FY2024 | % Change | | :--- | :--- | :--- | :--- | | Operating Expenses | $22.0 million | $16.5 million | 33.4% | - Increase due to: (i) higher legal and consulting fees related to business development and strategic initiatives (including G5 acquisition expenses) and increased sales/marketing; (ii) higher materials spend for internally funded new product development; and (iii) a **$1.4 million increase in fair value of acquisition liabilities**[16](index=16&type=chunk) [Net Loss and EPS (FY2025)](index=3&type=section&id=Net%20Loss%20and%20EPS%20(FY2025)) Net loss for fiscal 2025 significantly increased, driven by higher non-cash, non-operating expenses related to the G5 acquisition and its financing FY2025 Net Loss and EPS | Metric | FY2025 | FY2024 | % Change | | :--- | :--- | :--- | :--- | | Net Loss | $(14.9) million | $(8.0) million | -85.7% | | Loss per Share (Basic & Diluted) | $(0.36) | $(0.21) | -71.4% | - Change in net loss driven by an increase in certain non-cash, non-operating expenses associated with the G5 acquisition and the related financing[17](index=17&type=chunk) [Adjusted EBITDA (FY2025)](index=3&type=section&id=Adjusted%20EBITDA%20(FY2025)) Adjusted EBITDA loss for fiscal 2025 more than doubled compared to the prior fiscal year, reflecting the increased operational and non-operating losses FY2025 Adjusted EBITDA Loss | Metric | FY2025 | FY2024 | % Change | | :--- | :--- | :--- | :--- | | Adjusted EBITDA Loss | $(5.1) million | $(2.8) million | -83.8% | [Company Information & Investor Relations](index=3&type=section&id=Company%20Information%20%26%20Investor%20Relations) This section provides an overview of LightPath Technologies' business, its vertically integrated solutions, global manufacturing presence, and details for the investor conference call [About LightPath Technologies](index=3&type=section&id=About%20LightPath%20Technologies) LightPath Technologies is a leading provider of next-generation optics and imaging systems for defense and commercial applications, offering vertically integrated solutions from proprietary BlackDiamond™ glass to complete IR optical systems, with manufacturing facilities globally - LightPath Technologies is a leading provider of next-generation optics and imaging systems for defense and commercial applications[21](index=21&type=chunk) - Offers vertically integrated solutions, including proprietary BlackDiamond™ chalcogenide-based glass materials and complete IR optical systems[21](index=21&type=chunk) - Primary manufacturing in Orlando, Florida, with additional facilities in Texas, New Hampshire, Latvia, and China[21](index=21&type=chunk) [Earnings Call Details](index=3&type=section&id=Earnings%20Call%20Details) Management hosted an investor conference call on September 25, 2025, to discuss Q4 and full year fiscal 2025 financial results, provide a corporate update, and conduct a Q&A session. A replay was available until October 9, 2025 - Management hosted an investor conference call on **September 25, 2025**, at 5:00 p.m. Eastern time[19](index=19&type=chunk) - The call discussed Q4 and full year fiscal 2025 financial results and provided a corporate update[19](index=19&type=chunk) - A playback of the call was available through **Thursday, October 9, 2025**, via dial-in and webcast replay[20](index=20&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) This section defines non-GAAP financial measures like EBITDA and Adjusted EBITDA, explaining their rationale for providing additional insights into operating results, and includes a detailed reconciliation table [Definition and Rationale](index=3&type=section&id=Definition%20and%20Rationale) The company uses non-GAAP financial measures like EBITDA and Adjusted EBITDA to provide investors with additional insights into operating results, excluding items that may disproportionately impact results. Management believes these measures enhance the ability to analyze underlying business operations and are used for forecasting and planning - EBITDA is calculated by adjusting net income to exclude net interest expense, income tax expense or benefit, depreciation, and amortization[22](index=22&type=chunk) - Adjusted EBITDA further excludes: (1) non-cash income/expense from mark-to-market adjustments related to warrants; and (2) loss on extinguishment of debt[22](index=22&type=chunk) - Management believes these non-GAAP measures provide useful information for understanding period-over-period operating results, analyzing underlying business operations, and are used as guides in forecasting, budgeting, and planning[23](index=23&type=chunk)[24](index=24&type=chunk) [Reconciliation of Non-GAAP Financial Measures](index=4&type=section&id=Reconciliation%20Table) A reconciliation table is provided to bridge GAAP net loss to non-GAAP EBITDA and Adjusted EBITDA for both the fourth quarter and full fiscal year 2025 and 2024, detailing the adjustments made Reconciliation of Non-GAAP Financial Measures | Metric | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Year Ended June 30, 2025 ($) | Year Ended June 30, 2024 ($) | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(7,055,980) | $(2,353,773) | $(14,873,182) | $(8,007,346) | | Depreciation and amortization | 792,488 | 1,062,559 | 4,149,240 | 4,048,409 | | Income tax provision | (122,402) | (53,912) | 37,790 | 67,490 | | Interest expense | 312,967 | 42,814 | 1,118,213 | 191,862 | | **EBITDA** | **$(6,072,927)** | **$(1,302,312)** | **$(9,567,939)** | **$(3,699,585)** | | Stock-based compensation | 298,309 | 216,765 | 1,043,464 | 1,019,023 | | Loss on extinguishment of debt | — | — | 418,502 | — | | Change in fair value of warrant liability | 2,224,270 | — | 1,353,716 | — | | Change in fair value of acquisition liabilities | 1,430,000 | — | 1,560,445 | — | | Foreign exchange (gain) loss | 141,583 | (31,876) | 129,882 | (72,741) | | **Adjusted EBITDA** | **$(1,978,765)** | **$(1,117,423)** | **$(5,061,930)** | **$(2,753,303)** | | % of revenue | -16% | -13% | -14% | -9% | [Forward-Looking Statements and Contact](index=4&type=section&id=Forward-Looking%20Statements%20and%20Contact) This section includes a disclaimer regarding forward-looking statements, outlining inherent risks and uncertainties, and provides contact information for investor relations inquiries [Forward-Looking Statements Disclaimer](index=4&type=section&id=Forward-Looking%20Statements%20Disclaimer) This section contains forward-looking statements regarding future events, financial performance, strategic initiatives, and market conditions. These statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations, and readers are cautioned not to place undue reliance on them - Statements include expectations regarding purchase orders, program awards, financial performance, impact of G5 acquisition, product portfolio performance, demand for Germanium-free products, sustainable revenue growth, government/military projects, and supply chain risk management[28](index=28&type=chunk) - Subject to risks and uncertainties such as need for additional capital, varying product demand, reliance on key customers, raw material availability, international tariffs, political risks, economic uncertainty, geopolitical tensions, and inability to sustain profitable sales growth[28](index=28&type=chunk) - Readers are cautioned not to place undue reliance on these statements, which speak only as of the date they are made, and the company has no obligation to update them[28](index=28&type=chunk)[29](index=29&type=chunk) [Investor Contact Information](index=5&type=section&id=Investor%20Contact%20Information) Investor inquiries can be directed to Lucas A. Zimmerman of MZ Group – MZ North America - Contact: Lucas A. Zimmerman, MZ Group – MZ North America[30](index=30&type=chunk) - Email: LPTH@mzgroup.us, Phone: 949-259-4987[30](index=30&type=chunk) [Condensed Consolidated Financial Statements](index=5&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the company's condensed consolidated balance sheets, statements of comprehensive income (loss), statements of changes in stockholders' equity, and statements of cash flows for fiscal years 2024 and 2025 [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows an increase in total assets from $48.1 million in FY2024 to $81.5 million in FY2025, primarily driven by increases in current assets, intangible assets, and goodwill. Total liabilities also increased significantly from $17.9 million to $31.6 million Key Balance Sheet Figures | Metric | June 30, 2025 ($) | June 30, 2024 ($) | | :--- | :--- | :--- | | Total Assets | $81,505,766 | $48,086,964 | | Total Liabilities | $31,628,488 | $17,887,299 | | Total Stockholders' Equity | $15,644,768 | $30,199,665 | - Significant increases in current assets (cash, receivables, inventories), intangible assets, and goodwill, largely due to acquisitions[32](index=32&type=chunk) - Increase in liabilities driven by accounts payable, accrued liabilities, and loans payable[32](index=32&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) The statement of comprehensive income shows a net loss of $(14.9) million for FY2025, significantly wider than $(8.0) million in FY2024, primarily due to increased operating expenses and other non-operating expenses Key Comprehensive Income (Loss) Figures | Metric | Year Ended June 30, 2025 ($) | Year Ended June 30, 2024 ($) | | :--- | :--- | :--- | | Revenue, net | $37,202,630 | $31,726,192 | | Gross profit | $10,130,114 | $8,631,246 | | Total operating expenses | $21,952,995 | $16,457,910 | | Operating loss | $(11,822,881) | $(7,826,664) | | Net loss | $(14,873,182) | $(8,007,346) | | Comprehensive loss | $(14,404,432) | $(8,103,946) | | Loss per common share (basic & diluted) | $(0.36) | $(0.21) | - Operating loss widened from **$(7.8) million in FY2024 to $(11.8) million in FY2025**[35](index=35&type=chunk) - Other income (expense), net, significantly contributed to the loss, moving from **$(113,192) in FY2024 to $(3,012,511) in FY2025**, largely due to interest expense, loss on extinguishment of debt, and change in fair value of warrant liability[35](index=35&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Stockholders' equity decreased from $30.2 million in FY2024 to $15.6 million in FY2025. This was primarily influenced by the net loss, preferred cumulative dividends, and reclassification of warrant liability, despite new issuances of common and preferred stock Key Stockholders' Equity Changes | Metric | June 30, 2025 ($) | June 30, 2024 ($) | | :--- | :--- | :--- | | Total Stockholders' Equity | $15,644,768 | $30,199,665 | | Accumulated Deficit | $(230,716,757) | $(215,843,575) | | Series G Convertible Preferred Stock | $34,232,510 | — | | Additional Paid-in Capital | $244,953,346 | $245,140,758 | - Issuance of preferred stock under private equity placement contributed **$19.48 million**[38](index=38&type=chunk) - Issuance of common stock for acquisition of G5 contributed **$4.87 million**[38](index=38&type=chunk) - Net loss of **$(14.87) million** and preferred cumulative dividends plus accretion of **$(14.75) million** significantly reduced equity[39](index=39&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flows from operating activities resulted in a net outflow of $(8.3) million in FY2025, a significant change from a net inflow of $0.5 million in FY2024. Investing activities saw a substantial increase in cash used, primarily due to the G5 acquisition, while financing activities provided a large net inflow from new stock and debt issuances Key Cash Flow Figures | Metric | Year Ended June 30, 2025 ($) | Year Ended June 30, 2024 ($) | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(8,331,390) | $521,037 | | Net cash used in investing activities | $(19,738,323) | $(2,665,236) | | Net cash provided by (used in) financing activities | $29,296,277 | $(1,466,440) | | Change in cash, cash equivalents and restricted cash | $1,396,768 | $(3,664,222) | | Cash, cash equivalents and restricted cash, end of period | $4,877,036 | $3,480,268 | - Operating cash flow shifted from positive to negative, largely influenced by the increased net loss and changes in working capital[41](index=41&type=chunk) - Investing cash outflow significantly increased due to the **$18.49 million acquisition of G5**[41](index=41&type=chunk) - Financing cash flow turned strongly positive due to proceeds from preferred stock (**$18.68 million**), warrants (**$4.62 million**), and loans payable (**$6.66 million**)[42](index=42&type=chunk)

Core Insights - LightPath Technologies, Inc. will release its financial results for the fiscal fourth quarter ended June 30, 2025, after market close on September 25, 2025 [1] - An investor conference call is scheduled for September 25, 2025, at 5:00 p.m. Eastern time to discuss the financial results and provide a corporate update [2] - The company is a leading provider of next-generation optics and imaging systems for defense and commercial applications, with a manufacturing footprint in Orlando, Florida, and additional facilities in Texas, New Hampshire, Latvia, and China [4] Financial Results Announcement - Financial results for Q4 FY2025 will be released after market close on September 25, 2025 [1] - The investor conference call will include a Q&A session for participants [2] Company Overview - LightPath Technologies specializes in optics and imaging systems, offering custom solutions including proprietary BlackDiamond™ chalcogenide-based glass materials [4] - The company operates as a vertically integrated solutions provider with in-house engineering design support [4]

Core Insights - LightPath Technologies has secured a total of $40.3 million in advanced infrared camera orders from a leading global technology customer [1] - The recent follow-on purchase order amounts to $22.1 million for delivery in calendar year 2027, following an earlier order of $18.2 million announced on September 3, 2025, for delivery in calendar year 2026 [1] Company Overview - LightPath Technologies is a provider of next-generation optics and imaging systems for both defense and commercial applications [1]