LightPath Technologies(LPTH) - 2025 Q1 - Quarterly Report

Financial Performance - Revenue for the three months ended September 30, 2024, was $8,400,381, an increase of 4.0% compared to $8,077,248 for the same period in 2023[10] - Gross profit for the quarter was $2,844,429, representing a gross margin of approximately 33.9%, up from $2,331,706 in the prior year[10] - Operating expenses increased to $4,221,237, a rise of 17.8% from $3,582,328 in the same quarter last year[10] - The net loss for the quarter was $1,622,745, compared to a net loss of $1,342,376 for the same period in 2023, reflecting a deterioration in profitability[10] - The company reported a loss per common share of $0.04 for both basic and diluted shares, consistent with the previous year[10] - The company reported a loss before income taxes of $(1,607,109) for the three months ended September 30, 2024, compared to $(1,302,830) for the same period in 2023[36] - The effective income tax rate for the three months ended September 30, 2024, was -1%, compared to -3% for the same period in 2023[36] - The company reported a net loss of $1,622,745 for the quarter ended September 30, 2024, compared to a net loss of $1,342,376 for the same period in 2023, indicating a year-over-year increase in losses of approximately 20.8%[13] Cash and Liquidity - Cash and cash equivalents increased to $4,280,637 from $3,480,268 as of June 30, 2024, indicating improved liquidity[8] - The company’s cash, cash equivalents, and restricted cash at the end of the period were $4,280,637, down from $6,859,958 at the end of the same period in 2023[14] - Cash flows from operating activities showed a net cash used of $1,700,201 for the quarter ended September 30, 2024, compared to a net cash provided of $1,139,989 for the same period in 2023[13] - As of September 30, 2024, the company had working capital of approximately $7.1 million and total cash and cash equivalents of approximately $4.3 million, with less than 50% held by foreign subsidiaries[115] Assets and Liabilities - Total current assets rose to $16,808,479, up from $15,537,335 at the end of the previous quarter, showing a positive trend in asset management[8] - Total liabilities increased to $18,999,671 from $17,887,299, indicating a rise in financial obligations[8] - Total stockholders' equity as of September 30, 2024, was $29,444,719, a decrease from $35,952,525 as of June 30, 2023, reflecting a decline of about 18%[12] - Total property and equipment, net, decreased to $14,921,499 as of September 30, 2024, from $15,210,612 as of June 30, 2024[33] Acquisition and Growth Strategy - The company acquired Visimid Technologies for a total purchase price of approximately $2.7 million, which includes $1 million in cash and $1,550,000 in restricted stock[22] - The acquisition of Visimid is expected to enhance the company's growth strategy by providing engineering and design services in thermal imaging and IoT applications[21] - The company incurred approximately $238,000 in acquisition costs related to the Visimid acquisition, with $83,000 incurred during the three months ended September 30, 2023[25] - The estimated fair value of identifiable intangible assets from the Visimid acquisition includes customer relationships valued at approximately $122,000 and trade secrets valued at approximately $925,000[24] Revenue Breakdown - Revenue from infrared components decreased by 31.9% to $2,610,884, while revenue from visible components increased by 22.7% to $3,299,878[31] - Revenues from the United States increased to $5.9 million in Q3 2024, up from $4.3 million in Q3 2023, reflecting a growth of 36.6%[72] - Revenue from engineering services surged by $1.1 million, or 378%, in Q1 fiscal 2025, primarily due to a contract with Lockheed Martin[102] - Revenue from visible components increased by approximately $0.6 million, or 23%, to $3.3 million in Q1 fiscal 2025, driven by sales to defense and medical industries[102] Stock and Shareholder Information - The number of shares used in the per share calculation increased to 39,561,480 from 37,431,748, reflecting potential dilution[10] - The company issued 279,553 shares of common stock for the acquisition of Visimid, reflecting the integration of the acquired entity into its operations[12] - As of September 30, 2024, the company had 832,099 shares of Class A common stock authorized and available for issuance under the Stock Incentive Compensation Plan[41] - The company has issued 585,483 shares of Class A common stock under its at-the-market equity program, raising approximately $9.2 million in net proceeds[81] Operating Expenses - Stock-based compensation expense for the three months ended September 30, 2024, was $264,475, compared to $240,075 for the same period in 2023[44] - Total lease costs for the three months ended September 30, 2024, were $320,373, up from $232,474 in the same period of 2023[58] - SG&A costs increased by approximately $609,000, or 23%, to $3.3 million in Q1 fiscal 2025, mainly due to higher legal and consulting fees[104] Future Outlook and Challenges - The company anticipates growth from medical programs and commercial optical sub-assemblies, particularly in the LIDAR technology market for autonomous vehicles[93] - The company expects minimal additional legal fees related to ongoing legal proceedings following the termination of employees in China, with approximately $190,000 recovered from Chinese authorities[75] - The company anticipates that economic conditions in China may adversely affect its business and results of operations in future quarters[76] - The company faces challenges in converting business to an annuity model due to competition and financial constraints imposed by limited cash resources[130]