PART I Item 1. Business 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 acquisitions193031 - 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 integration192324 - 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 chain303132 - 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 dollars33 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, Florida18 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 systems21222324 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 technology26 - 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 LightPath2729 Growth Strategy 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 technologies3031 - Acquisitions like Visimid and G5 Infrared are key to this strategy, adding technologies such as video processing and long-range imaging with cooled midwave cameras31 - 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 dollars33 Organizational Alignment 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 subsystems3435 - 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 cameras37 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 design41 - 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 performance42 - 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)4344 - Optical Assemblies and Testing: Expansion into complex optical assemblies, leveraging BlackDiamond materials for faster lead times and superior performance in defense and security markets42 - 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 components49 - Optical coatings: Capabilities across all facilities for efficient, high-quality anti-reflective, reflective, and protective coatings, including advanced Diamond Like Carbon for environmental protection49 New Product Development 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 systems47 - New products include multispectral cameras like Mantis, and Germanium-free midwave cameras leveraging BlackDiamond materials4951 New Product Development Expenditures | Fiscal Year | Expenditure (Millions) | | :------------ | :--------------------- | | 2025 | $3.1 | | 2024 | $2.4 | Product Groups and Markets 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/modules55 - Infrared Components: Includes molded and turned lenses, BlackDiamond glass materials, and G5's optical component and coating business. Anticipates moderate growth due to Germanium alternatives565860 - 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 Orlando62 - Engineering Services: Focuses on developing new products and applications for customers, often leading to manufacturing contracts63 Sales and Marketing 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 solutions64 - 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 analysis6566 - LightPath participates in numerous trade shows across North America, Europe, and Asia to expand brand presence, network, and gain insights into technological trends6768 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 competitor69 - 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 consistency7071 - 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)747576 - 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 integration787980 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)84172 - Facilities are equipped for various processes including coating, diamond turning, precision glass molding, integrated assembly, CNC grinding, and traditional polishing85888990 - 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 compliant91 - The company uses subcontractors for specialized processing steps and sources materials globally, with internal BD6 glass manufacturing providing a low-cost alternative to Germanium9394 Intellectual Property 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 features9899 - 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 calibration99 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 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-products102 - The company is in compliance with material federal, state, and local laws and regulations, and holds necessary licenses and permits102103 - Subject to Dodd-Frank Act's 'conflict minerals' disclosure requirements, striving to use conflict-free suppliers, which may incur compliance costs and affect material sourcing105106 Major Customers 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 efforts107 International Sales Contribution | Fiscal Year | Net Revenue from Outside U.S. (%) | Foreign Sales from Europe and Asia (%) | | :------------ | :---------------------------- | :--------------------------------- | | 2025 | 38% | 91% | | 2024 | 39% | 94% | 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, China109 - The company offers competitive compensation and benefits, focuses on sourcing top talent, and is committed to diversity and inclusion110111112 Available Information 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 SEC114 Item 1A. Risk Factors 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 indebtedness116132 - International sales (38% of net revenue in FY2025) expose the company to political risks, trade tariffs, and currency fluctuations119124128 - 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 issues120 - 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 fluctuations123 - 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 revenues130 - 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 introductions144145 - 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 litigation156158159160163 - Data breach and breakdown of information and communication technologies pose risks of disruption, unauthorized access, and misappropriation of sensitive data, despite security initiatives161162 Item 1B. Unresolved Staff Comments There are no unresolved staff comments to report - No unresolved staff comments164 Item 1C. Cybersecurity 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 risks165166 - 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 providers171 - 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 Directors167168169 - No cybersecurity risks have been identified to date that could materially impact the company's operations, strategy, financial condition, or overall business performance170 Item 2. Properties 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 globally172 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 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 anticipated174 Item 4. Mine Safety Disclosures This item is not applicable to LightPath Technologies, Inc - Not Applicable175 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 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 - As of September 18, 2025, there were approximately 220 holders of record and 10,835 street name holders of Class A common stock178 - The company has never declared or paid cash dividends and plans to retain all future earnings to finance operations and expansion179 - No repurchases of Class A common stock were made during the fiscal year ended June 30, 2025180 Item 6. [Reserved] This item is reserved and contains no information - Item 6 is reserved181 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 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)188189245246 - 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 expense192195201 - 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 subsidiaries203 Effect of Certain Events Occurring at Our Chinese Subsidiaries 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 fraud184 - 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 expected185 Results of Operations 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 components190191 - 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 upgrades192 - 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 systems193 - 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 Notes195 - 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 liability201 Liquidity and Capital Resources 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 subsidiaries203 - The company repatriated $1.2 million from LPOIZ (China) in FY2025, with $0.4 million in retained earnings available for future repatriation204 - 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 million205211212 - 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 increases218 - 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 - Net cash provided by financing activities was $29.3 million in FY2025, mainly from $29.8 million related to the G5 Infrared acquisition financing222 How We Operate 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 agreements223 - Challenges include maintaining design capabilities, cost reduction pressures from customers, and financial constraints on capital expenditures due to limited cash resources226 Our Key Performance Indicators 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 levels227228 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 $16.6 million by June 30, 2025. The remaining backlog increased 8% due to an industrial customer230 - Demand for infrared products is growing, fueled by interest in BD6 glass and new BDNL materials as alternatives to Germanium, especially given global supply restrictions231233 Revenue by Product Group (Quarterly and Annual) | Product Group | Q4 2025 ($) | 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 days247 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 days249 Non-GAAP Financial Measures 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 results251252 - Adjusted EBITDA excludes stock compensation, loss on debt extinguishment, mark-to-market adjustments for warrants, and foreign exchange gains/losses253 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 margin256 Off Balance Sheet Arrangements 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 arrangements257 Critical Accounting Policies and Estimates 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 taxes258 - Inventory obsolescence allowance is calculated based on sales and purchase history, with reserves ranging from 25% to 100% for slow-moving or excess items260 - 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 met261 - Goodwill and amortizable intangible assets are recognized at fair value in business combinations and tested for impairment annually or when circumstances indicate recoverability issues263264 - 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 income266 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 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 risk269 Item 8. Financial Statements and Supplementary Data 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 15270 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 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 disclosure271 Item 9A. Controls and Procedures 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 effective272 - Management assessed internal control over financial reporting as effective as of June 30, 2025, based on the COSO framework273 - 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 FY2025273 - No significant changes in internal control over financial reporting occurred during the fourth quarter ended June 30, 2025277 Item 9B. Other Information 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, 2025278 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections This item is not applicable to LightPath Technologies, Inc - Not applicable279 PART III Item 10. Directors, Executive Officers and Corporate Governance 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 Statement281 Item 11. Executive Compensation 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 Statement282 Item 12. Security Ownership of Certain Beneficial Owners and Management 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 Statement283 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 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 Statement285 Item 14. Principal Accountant Fees and Services 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 Statement286 PART IV Item 15. Exhibits, Financial Statement Schedules 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 certifications288 - Financial statements are indexed on page F-1 of the report289 Item 16. Form 10-K Summary This item indicates that no Form 10-K Summary is provided - No Form 10-K Summary is provided296 Index to Consolidated Financial Statements Report of Independent Registered Public Accounting Firm – BDO USA, P.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 2023-07299300 - 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 Stock304305309311314 Report of Independent Registered Public Accounting Firm – MSL, P.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 2023-07319 - MSL, P.A. served as the Company's auditor from 2017 to 2024323 Consolidated Financial Statements 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 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 acquisitions325 - Total liabilities also increased substantially from $17.9 million to $31.6 million, reflecting acquisition financing325 - Stockholders' equity decreased from $30.2 million to $15.6 million, despite an increase in common stock shares326 Consolidated Statements of Comprehensive Income (Loss) for the years ended June 30, 2025 and 2024 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 changes328 - Revenue increased by 17% year-over-year, while gross profit also increased by 17%328 Consolidated Statements of Changes in Stockholders' Equity for the years ended June 30, 2025 and 2024 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 FY2025331 - 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)330331 - Accretion of dividends on Series G preferred stock ($14.8 million) and the net loss ($14.9 million) significantly impacted the accumulated deficit331 Consolidated Statements of Cash Flows 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 expenses334 - Investing activities used $19.7 million in FY2025, largely for the G5 Infrared acquisition ($18.5 million)335 - Financing activities provided $29.3 million in FY2025, mainly from the G5 Infrared acquisition financing335 Notes to Consolidated Financial Statements (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 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)337338340 - The company manufactures optical components, assemblies, and sub-systems, including precision molded glass aspheric optics, infrared optics, and thermal imaging cameras, serving diverse applications341 2. Significant Accounting Policies 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 eliminated343 - 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 history348 - Goodwill and amortizable intangible assets are recognized at fair value in business combinations and tested for impairment annually or when circumstances indicate351352 - Operating leases are recognized on the balance sheet as right-of-use assets and liabilities, measured at the present value of future minimum lease payments353355 - Deferred income tax assets and liabilities are computed based on temporary differences, with valuation allowances established against deferred tax assets when realization is uncertain357 - The company operates in one reportable operating segment (optics) and has retrospectively applied ASU 2023-07, Segment Reporting378 - 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 flows379381382 3. Acquisitions 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 strategy383384386 - 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 solutions391392395 - 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 million395 - 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 million399 - 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 million403405 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 ($) | | :----------------- | :------------ | :------------ | | Revenue | 49,733,817 | 48,018,602 | | Income before taxes | (9,520,465) | (5,996,886) | 4. Revenue Revenue is recognized upon transfer of control for products and assemblies at a point in time, while engineering services revenue is recognized as deliverables are met - Revenue is recognized upon transfer of control of products or services, with performance obligations for optical components and assemblies satisfied at a point in time411414 - Product development agreements for engineering services are generally short-term, with revenue recognized upon satisfaction of deliverables414 Revenue by Product Group (FY2025 vs. FY2024) | Product Group | FY2025 ($) | 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 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 FY2025417 - 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 years417 6. Property and Equipment, net 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 FY2024421 - Depreciation and amortization expense for property and equipment was $2.7 million in FY2025, up from $2.4 million in FY2024421 7. Goodwill and Intangible Assets Goodwill increased due to the G5 Infrared acquisition, with total intangible assets, net, rising significantly from $3.7 million in FY2024 to $16.0 million in FY2025 - Goodwill increased due to the G5 Infrared acquisition, with no impairment recorded in FY2025 or FY2024422423 Identifiable Intangible Assets, Net | Intangible Asset | Useful Lives (Years) | June 30, 2025 ($) | 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
LightPath Technologies(LPTH) - 2025 Q4 - Annual Report