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What changed in LGL GROUP INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of LGL GROUP INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+135 added−141 removedSource: 10-K (2025-03-31) vs 10-K (2024-04-01)

Top changes in LGL GROUP INC's 2024 10-K

135 paragraphs added · 141 removed · 113 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

35 edited+8 added−7 removed47 unchanged
Biggest changeWe seek to invest available cash and cash equivalents and marketable securities in liquid investments with a view to enhancing returns as we continue to assess further acquisitions of, or investments in, operating businesses. As of December 31, 2023, we had Cash and cash equivalents and Marketable securities with a fair market value of approximately $40,733.
Biggest changeWe seek to invest available cash and cash equivalents (which includes only investments in money market funds that are registered as management investment companies in reliance on Rule 2a-7 under the Investment Company Act of 1940, as amended (the "Investment Company Act")) and marketable securities in liquid investments with a view to enhancing returns as we continue to assess further acquisitions of, or investments in, operating businesses.
Lynch Interactive owned all of Lynch's cable, telecommunications, PCS, and broadcasting operations as well as a 55% interest in The Morgan Group, Inc. • Spinnaker continued deleveraging itself by buying back a significant amount of its senior debt at a gain. 2000 M-tron Industries, Inc. was preparing for an IPO, but was held back due to changing market conditions. 2001 Lynch spins off The Morgan Group, Inc. and Tremont Advisors to shareholders.
Lynch Interactive owned all of Lynch's cable, telecommunications, PCS, and broadcasting operations as well as a 55% interest in The Morgan Group, Inc. • Spinnaker continued deleveraging itself by buying back a significant amount of its senior debt at a gain. 2000 M-tron Industries, Inc. was preparing for an IPO, but was held back due to changing market conditions. 2001 Lynch spins off Morgan and Tremont Advisors to shareholders.
This acquisition set the stage for the development of M-tron Industries, Inc.'s orientation toward the avionics, space, and defense industries. 2007 The Company sold the assets of Lynch Systems, Inc. to Olivotto Glass Technologies, S.P.A., a glassware machinery manufacturer based in Milan, Italy. 2014 M-tron Industries, Inc. purchased filter product line assets from Trilithic, Inc. 2016 The Company acquired the assets of Precise Time and Frequency, LLC. 2019 The direct investing business was launched (renamed the Merchant Investment segment in 2023) 2021 LGL Systems Acquisition Corporation completed its business combination with IronNet Cybersecurity, Inc. 2022 The Company completed the tax-free spin-off M-tron Industries, Inc. to shareholders. 2023 The Company launched Lynch Capital International, LLC to facilitate the Merchant Investment business. 3 Table of Contents MtronPTI Separation On October 7, 2022, the separation of MtronPTI was completed and MtronPTI became an independent, publicly traded company trading on the NYSE American under the stock symbol "MPTI." The Separation was achieved through LGL’s distribution (the "Distribution") of 100% of the shares of MtronPTI's common stock to holders of LGL's common stock as of the close of business on the record date of September 30, 2022.
This acquisition set the stage for the development of M-tron Industries, Inc.'s orientation toward the avionics, space, and defense industries. 2007 The Company sold the assets of Lynch Systems, Inc. to Olivotto Glass Technologies, S.P.A., a glassware machinery manufacturer based in Milan, Italy. 2014 M-tron Industries, Inc. purchased filter product line assets from Trilithic, Inc. 2016 The Company acquired the assets of Precise Time and Frequency, LLC. 2019 The direct investing business was launched (renamed the Merchant Investment segment in 2023) 2021 LGL Systems Acquisition Corporation completed its business combination with IronNet Cybersecurity, Inc. 2022 The Company completed the tax-free spin-off M-tron Industries, Inc. to shareholders. 2023 The Company launched Lynch Capital International, LLC to facilitate the Merchant Investment business. 3 Table of Contents MtronPTI Separation On October 7, 2022, the separation of MtronPTI was completed and MtronPTI became an independent, publicly traded company trading on the NYSE American under the stock symbol "MPTI." The Separation was achieved through LGL Group’s distribution (the "Distribution") of 100% of the shares of MtronPTI's common stock to holders of LGL's common stock as of the close of business on the record date of September 30, 2022.
LGL Systems and any related activity was accounted for under the equity method of accounting in the Company’s financial statements for the year ending December 31, 2022. However, beginning in June 2023, the Company consolidated LGL Systems as it was deemed to be the primary beneficiary.
LGL Systems and any related activity was accounted for under the equity method of accounting in the Company’s financial statements for the year ending December 31, 2023. However, beginning in June 2023, the Company consolidated LGL Systems as it was deemed to be the primary beneficiary.
As a result of these transactions, the Company determined it was the primary beneficiary of LGL Systems and was therefore required to consolidate LGL Systems. As of June 2023, the Company recorded $1.9 million of non-controlling interests in LGL Systems on its consolidated balance sheets. Government Regulations As a supplier to certain U.S.
As a result of these transactions, the Company determined it was the primary beneficiary of LGL Systems and was therefore required to consolidate LGL Systems. As of June 2023, the Company recorded $1.9 million of non-controlling interests in LGL Systems on its consolidated balance sheets. 6 Table of Contents Government Regulations As a supplier to certain U.S.
We expect to fill substantially all of our 2023 order backlog in 2024, but cannot provide assurances as to what portion of the order backlog will be fulfilled in a given year.
We expect to fill substantially all of our 2024 order backlog in 2025, but cannot provide assurances as to what portion of the order backlog will be fulfilled in a given year.
This outstanding short-term performance, coupled with the long-term stability and accuracy of the external GNS reference signals, which can be from GPS, Galileo, Glonass or QZSS, provides the user excellent all-around performance that is highly cost-effective. When two or more computers are involved, accurate time keeping is a challenge especially when the computers are in different locations.
This outstanding short-term performance, coupled with the long-term stability and accuracy of the external GNS reference signals, which can be from GPS, Galileo, GLONASS or Quasi-Zenith Satellite System ("QZSS"), provides the user excellent all-around performance that is highly cost-effective. When two or more computers are involved, accurate time keeping is a challenge especially when the computers are in different locations.
Human Capital Management As of December 31, 2023, the Company’s executives were based in Orlando, Florida; Greenwich, Connecticut; and Chicago, Illinois. We employed seven full-time manufacturing and engineering employees located in Wakefield, Massachusetts, two corporate and investment employees located in Greenwich, Connecticut, and one corporate and investment employee in Chicago, Ilinois.
Human Capital Management As of December 31, 2024, the Company’s executives were based in Orlando, Florida; Greenwich, Connecticut; and Chicago, Illinois. We employed seven full-time manufacturing and engineering employees located in Wakefield, Massachusetts; two corporate and investment employees located in Greenwich, Connecticut; and one corporate and investment employee in Chicago, Illinois.
Seasonality Our business is not seasonal, although shipment schedules may be affected by the production schedules of our customers, or their contract manufacturers based on regional practices or customs. Order Backlog Our order backlog was $143 and $360 as of December 31, 2023 and 2022, respectively. The backlog of unfilled orders includes amounts based on purchase orders.
Seasonality Our business is not seasonal, although shipment schedules may be affected by the production schedules of our customers, or their contract manufacturers based on regional practices or customs. Order Backlog Our order backlog was $336 and $143 as of December 31, 2024 and 2023, respectively. The backlog of unfilled orders includes amounts based on purchase orders.
The Company’s Chief Accounting Officer and Controller are employed through certain service level agreements in place. None of the Company's employees are represented by a labor union and the Company considers its relationships with employees to be good. We believe the Company's success depends on its ability to attract, develop, and retain key personnel.
The Company’s Controller is employed through certain service level agreements in place. None of the Company's employees are represented by a labor union and the Company considers its relationships with employees to be good. We believe the Company's success depends on its ability to attract, develop, and retain key personnel.
Refer to Note 7 - Variable Interest Entities in the accompanying Notes to the Consolidated Financial Statements included in Item 8.
Refer to Note 6 - Variable Interest Entities in the accompanying Notes to the Consolidated Financial Statements included in Item 8.
The skills, experience and industry knowledge of key members of our Board of Directors, employees, and contractors significantly benefit our operations and performance. The Company's Board of Directors and management oversee various employee and contractor initiatives.
The skills, experience and industry knowledge of key members of our Board of Directors, employees, and contractors significantly benefit our operations and performance. The Company's Board of Directors and management oversee various employee and contractor initiatives. Available Information The Company’s Internet address is www.lglgroup.com .
PTF's products include Frequency and Time Reference Standards; radio frequency ("RF"), digital, and optical time code distribution amplifiers; redundancy auto switches; and network time protocol ("NTP") servers, all of which are used in a wide range of applications worldwide.
PTF's products include Frequency and Time Reference Standards; radio frequency ("RF"), digital, and optical time code distribution amplifiers; redundancy auto switches; and network time protocol ("NTP") servers, all of which are used in a wide range of applications worldwide. 4 Table of Contents PTF's Frequency and Time Reference Standards include quartz Frequency Standards, global positioning system ("GPS") / global navigation system ("GNS") Frequency and Time Standards and rubidium atomic Frequency Standards.
International Revenues In 2023, our international revenues were $675, or 39.1%, of total sales compared to $460, or 27.8%, of total sales in 2022. In both 2023 and 2022, these revenues were derived primarily from customers in Europe and Canada. We avoid significant currency exchange risk by transacting and settling substantially all of our international sales in United States dollars.
In both 2024 and 2023, these revenues were derived primarily from customers in Europe and Canada. We avoid significant currency exchange risk by transacting and settling substantially all of our international sales in United States dollars.
As of December 31, 2023, LGL had investments (currently classified as Cash and cash equivalents and Marketable securities) with a fair value of $40,733, of which $23,513 was held within the Merchant Investment business.
As of December 31, 2024, LGL Group had investments (currently classified within Cash and cash equivalents and Marketable securities) with a fair value of $41,202, of which $24,609 was held within the Merchant Investment business.
As a holding company, we believe that the cash flow and asset coverage from our subsidiaries will allow us to maintain a strong balance sheet and ample liquidity over time.
The Company has had a long history of owning and operating various businesses in the precision engineering, manufacturing and services sectors. As a holding company, we believe that the cash flow and asset coverage from our subsidiaries will allow us to maintain a strong balance sheet and ample liquidity over time.
We maintain our executive offices at 2525 Shader Road, Orlando, Florida 32804. Our telephone number is (407) 298-2000. Our Internet address is www.lglgroup.com . Our common stock and warrants are traded on the NYSE American ("NYSE") under the symbols "LGL" and "LGL WS," respectively.
We maintain our executive offices at 2525 Shader Road, Orlando, Florida 32804. Our telephone number is (407) 298-2000. Our common stock and warrants are traded on the NYSE American ("NYSE") under the symbols "LGL" and "LGL WS," respectively. LGL Group’s business strategy is primarily focused on growth through expanding new and existing operations across diversified industries.
Rather, we believe that our technological position depends primarily on the technical competence and creative ability of our engineering and technical staff in areas of product design and manufacturing processes, including our staff’s ability to customize products to meet difficult specifications, as well as proprietary know-how and information. 6 Table of Contents Merchant Investment Segment Overview The Merchant Investment segment is comprised of various investment vehicles in which we have a shareholder, partner, or general partner interest, and through which LGL Group invests its capital.
Rather, we believe that our technological position depends primarily on the technical competence and creative ability of our engineering and technical staff in areas of product design and manufacturing processes, including our staff’s ability to customize products to meet difficult specifications, as well as proprietary know-how and information.
The Company accounts for its Marketable securities under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 321, Investments - Equity Securities ("ASC 321"), and as such, its Marketable securities are reported at fair value on its Consolidated Balance Sheets. 4 Table of Contents Our Businesses Electronic Instruments Segment Overview Our Electronics Instruments segment is comprised of PTF, which designs, manufactures, and markets for sale time and frequency instruments.
The Company accounts for its Marketable securities under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 321, Investments - Equity Securities ("ASC 321"), and as such, its Marketable securities are reported at fair value on its Consolidated Balance Sheets.
The MtronPTI high-quality quartz oscillators utilized within the PTF instruments deliver outstanding phase noise and short-term stability performance for applications where low noise is paramount.
The de facto standard for many highly demanding applications, such as satellite communications, is PTF's range of GPS/GNS disciplined quartz frequency and time standards. The MtronPTI high-quality quartz oscillators utilized within the PTF instruments deliver outstanding phase noise and short-term stability performance for applications where low noise is paramount.
Products PTF's products range from simple, low-cost time and frequency solutions to premium products designed to deliver maximum performance for the most demanding applications.
PTF is housed in a well-equipped, modern, facility and staffed by a highly dedicated and experienced team of time and frequency professionals. Products PTF's products range from simple, low-cost time and frequency solutions to premium products designed to deliver maximum performance for the most demanding applications.
The table below presents the concentration of the Company's customers for the year ended December 31, 2023: Revenue (in thousands) $ % Customer 1 $ 399 23.1 % Customer 2 236 13.7 % Customer 3 128 7.4 % Customer 4 103 6.0 % Top 4 largest customers 866 50.2 % All other (a) 862 49.8 % Total sales $ 1,728 100.0 % (a) Comprised of approximately 36 customers This spread of revenue over a broad customer base reduces the vulnerability of the company to any customer suffering from a market downturn, or other debilitating issue including insolvency. 5 Table of Contents Competition We design, manufacture and market products for the generation, synchronization and control of time and frequency in many cases insuring optimal utilization of allocated spectrum.
The table below presents the concentration of the Company's customers for the year ended December 31, 2024: Revenue (in thousands) $ % Customer 1 $ 310 13.9 % Customer 2 261 11.7 % Customer 3 219 9.8 % Customer 4 166 7.5 % Top 4 largest customers 956 43.0 % All other (a) 1,270 57.0 % Total sales $ 2,226 100.0 % (a) Comprised of approximately 38 customers This spread of revenue over a broad customer base reduces the vulnerability of the company to any customer suffering from a market downturn, or other debilitating issue including insolvency.
Availability of Financial Information Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports filed with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act are available free of charge on our website, www.lglgroup.com , under the "Investors - SEC Filings" caption, as soon as reasonable practicable after we electronically file them with, or furnish them to, the SEC.
The Company makes available, free of charge through its website, copies of the Company’s Annual Reports on Form 10–K, Quarterly Reports on Form 10–Q, Current Reports on Form 8–K and any amendments to those reports filed or furnished pursuant to Section 13(a) of the Exchange Act, as soon as reasonably practicable after those reports are filed with or furnished to the SEC.
We focus on businesses with existing growth potential which through helping improve their capabilities, teaming up portfolio companies for strategic expansions and transforming the businesses through merger and acquisition opportunities. The Company’s objective is to deliver long-term investment growth to our shareholders, maximizing shareholder value.
This approach allows for LGL Group to be creative and nimble with no pre-determined exit timetable. We focus on businesses with existing growth potential which through helping improve their capabilities, teaming up portfolio companies for strategic expansions and transforming the businesses through merger and acquisition opportunities.
Where possible, the sales team endeavors to gain qualification of specific products from Systems Integrators, confirming suitability for use in a specific system design. Through direct contact with our clients and through our representative network, we are able to understand the needs of the customers, and then provide custom configurations to meet those requirements in a highly cost-efficient solution.
Through direct contact with our clients and through our representative network, we are able to understand the needs of the customers, and then provide custom configurations to meet those requirements in a highly cost-efficient solution. International Revenues In 2024, our international revenues were $962, or 43.2%, of total sales compared to $675, or 39.1%, of total sales in 2023.
This includes developing businesses and positioning them as independent entities to enhance shareholder value and alignment. We provide our products and services through our Electronic Instruments and Merchant Investment businesses. Activities not related to our business segments such as our corporate operations, corporate-level assets and financial obligations are included in Corporate.
The Company’s objective is to deliver long-term investment growth to our shareholders, maximizing shareholder value. This includes developing businesses and positioning them as independent entities to enhance shareholder value and alignment. We provide our products and services through our Electronic Instruments and Merchant Investment businesses.
Since its inception, PTF has developed a comprehensive portfolio of time and frequency instruments complemented by a wide range of ancillary products such as distribution amplifiers and redundancy auto switches. PTF is housed in a well-equipped, modern, facility and staffed by a highly dedicated and experienced team of time and frequency professionals.
LGL Group acquired PTF in September 2016, reinforcing our position as a broad-based supplier of highly engineered products for the generation of time and frequency references for synchronization and control. Since its inception, PTF has developed a comprehensive portfolio of time and frequency instruments complemented by a wide range of ancillary products such as distribution amplifiers and redundancy auto switches.
Raw Materials Generally, most raw materials used in the production of our products are available in adequate supply from a number of sources and the prices of these raw materials are relatively stable.
Raw Materials Generally, most raw materials used in the production of our products have been available in adequate supply from multiple sources, and their prices have remained relatively stable. However, the current implementation of tariffs could significantly impact the cost structure of manufacturing operations.
Marketing and Sales Marketing efforts are supported by outsourcing to independent contractors and include the company web site, targeted monthly marketing emails, and exhibiting at relevant shows and conferences. We have a highly skilled team of domestic sales representatives and international distributors who market and sell our products.
These advancements in the signal distribution products reflect a commitment to innovation and excellence, positioning the products at the forefront of the industry. 5 Table of Contents Marketing and Sales Marketing efforts are supported by outsourcing to independent contractors and include the company web site, targeted monthly marketing emails, and exhibiting at relevant shows and conferences.
Our approach is to establish long term partnerships utilizing the resources of our organization to facilitate a full cycle of advice and investment to augment investments in conjunction with broader capital syndication. This approach allows for LGL Group to be creative and nimble with no pre-determined exit time table.
As of December 31, 2024, we had Cash and cash equivalents and Marketable securities with a fair market value of approximately $41,602. Our approach is to establish long term partnerships utilizing the resources of our organization to facilitate a full cycle of advice and investment to augment investments in conjunction with broader capital syndication.
Our Electronic Instruments segment derives revenues principally from net sales of various products. Our Merchant Investment business derives revenues from investment income and gains and losses from investment transactions as well as fee income on any syndicated investments. On October 7, 2022, we completed the spin-off of M-tron Industries, Inc. ("MtronPTI") (the "Spin-off" or the "Separation").
Activities not related to our business segments such as our corporate operations, corporate-level assets and financial obligations are included in Corporate. Our Electronic Instruments segment derives revenues principally from net sales of various products. Our Merchant Investment business derives revenues from investment income and gains and losses from investment transactions as well as fee income on any syndicated investments.
LGL's stockholders of record received one-half share of MtronPTI's common stock for every share of LGL's common stock. LGL retained no ownership interest in the MtronPTI business following the Separation. The historical financial results of the MtronPTI business for periods prior to the distribution date are reflected in the Company's consolidated financial statements as discontinued operations.
LGL Group's stockholders of record received one-half share of MtronPTI's common stock for every share of LGL Group's common stock. LGL Group retained no ownership interest in the MtronPTI business following the Separation. Our Segments We report our financial results in two segments: Electronic Instruments and Merchant Investment.
There are a number of domestic and international manufacturers who are capable of providing custom-designed products comparable in quality and performance to our products. Our competitive strategy begins with our focus on niche markets where precise specification, the ability to provide custom configurations, and reliability are the major requirements.
Our competitive strategy begins with our focus on niche markets where precise specification, the ability to provide custom configurations, and reliability are the major requirements. Product Development For new products, we focus on developing products targeted at relatively new, albeit established, markets, minimizing the need for market pioneering and education.
Continued identification of alternative supply sources or other mitigations are important in minimizing disruption to our supply chain. Intellectual Property We have no patents, trademarks or licenses that are considered to be significant to our business or operations.
These tariffs may lead to increased costs, eroding margins, which could lead to adjustments in pricing to maintain profitability. Intellectual Property We have no patents, trademarks or licenses that are considered to be significant to our business or operations.
The industries PTF serves include computer networking, satellite ground stations, electric utilities, broadcasting, telecommunication systems, and metrology. LGL Group PTF's assets in September 2016 through a business acquisition, reinforcing our position as a broad-based supplier of highly engineered products for the generation of time and frequency references for synchronization and control.
Our Businesses Electronic Instruments Segment Overview Our Electronics Instruments segment is comprised of PTF, which designs, manufactures, and markets for sale time and frequency instruments. The industries PTF serves include computer networking, satellite ground stations, electric utilities, broadcasting, telecommunication systems, and metrology.
Removed
LGL’s business strategy is primarily focused on growth through expanding new and existing operations across diversified industries. The LGL Group Inc.'s engineering and design origins date back to the early part of the last century. In 1917, Lynch Glass Machinery Company, the predecessor of LGL, was formed, and emerged in the late 1920s as a successful manufacturer of glass-forming machinery.
Added
On October 7, 2022, we completed the spin-off of M-tron Industries, Inc. ("MtronPTI") (the "Spin-off" or the "Separation").
Removed
The Company was then renamed Lynch Corporation ("Lynch") and was incorporated in 1928 under the laws of the State of Indiana. In 1946, Lynch was listed on the 'New York Curb Exchange,' the predecessor to the NYSE American. The Company has had a long history of owning and operating various businesses in the precision engineering, manufacturing and services sectors.
Added
Competition We design, manufacture and market products for the generation, synchronization and control of time and frequency in many cases insuring optimal utilization of allocated spectrum. There are a number of domestic and international manufacturers who are capable of providing custom-designed products comparable in quality and performance to our products.
Removed
For further information on the Separation, refer to Note 3 – Discontinued Operations in the accompanying notes to the Consolidated Financial Statements included in Item 8. Financial Statements and Supplementary Data of this Report. Our Segments We report our financial results in two segments: Electronic Instruments and Merchant Investment.
Added
Currently, the signal distribution products, which represent approximately 40% of our Net sales, are undergoing a comprehensive upgrade to enhance their overall functionality and efficiency. This development integrates cutting-edge technology, ensuring the products remain competitive and meet the evolving needs of the industry.
Removed
PTF's Frequency and Time Reference Standards include quartz Frequency Standards, global positioning system ("GPS") / global navigation system ("GNS") Frequency and Time Standards and rubidium atomic Frequency Standards. The de facto standard for many highly demanding applications, such as satellite communications, is PTF's range of GPS/GNS disciplined quartz frequency and time standards.
Added
At the same time, the development reduces manufacturing costs through improved design ensuring cost-effective production while maintaining high quality standards.
Removed
Product Development For new products, the company focuses on developing products targeted at relatively new, albeit established, markets, minimizing the need for market pioneering and education. The latest product developments target the new but rapidly growing Precision Time Protocol ("PTP") market utilizing ethernet networks for transmission of highly accurate time and frequency reference signals.
Added
We have a highly skilled team of domestic sales representatives and international distributors who market and sell our products. Where possible, the sales team endeavors to gain qualification of specific products from Systems Integrators, confirming suitability for use in a specific system design.
Removed
However, some raw materials, including printed circuit boards, integrated circuits and certain metals including steel and aluminum are subject to greater supply fluctuations and price volatility, as experienced in recent years. In general, we have been able to include some cost increases in our pricing, but in some cases our margins were adversely impacted.
Added
Merchant Investment Segment Overview The Merchant Investment segment is comprised of various investment vehicles in which we have a shareholder, partner, or general partner interest, and through which LGL Group invests its capital.
Removed
Changes in global economic and geopolitical conditions has caused disrupted supply chains and the ability to obtain components and raw materials around the world for most companies, including us. On occasion, one or more of the components used in our products have become unavailable resulting in unanticipated redesign and/or delays in shipments.
Added
Information on or accessible through our website is not deemed to be incorporated into this Report. Website references in this Report are merely textual references.
Added
The contents of our website are not incorporated by reference into this Report or in any other report or document we file with the Securities and Exchange Commission (the "SEC"), and any references to our website are intended to be inactive textual references only. 7 Table of Contents

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

41 edited+10 added−8 removed197 unchanged
Biggest changeRisks Related to Our Business and Industry • Macroeconomic fluctuations may harm our business, results of operations and stock price. • Inflation and changing interest rates may adversely affect our financial condition and results of operations. • We are currently dependent on a single line of manufacturing business. • Our financial results vary significantly from period to period. • Our order backlog may not be indicative of future revenues. • Our future rate of growth and profitability are highly dependent on the development and growth of the communications, networking, aerospace, defense, instrumentation and industrial markets, which are cyclical. • The market share of our customers in the communications, networking, aerospace, defense, instrumentation and industrial markets may change over time, reducing the potential value of our relationships with our existing customer base. • The loss or decrease in sales among one of our top customers, or a material change in the terms on which they are willing to buy from us, could have a substantial negative impact on our sales and operating results. • We may make acquisitions that are not successful, or we may fail to integrate acquired businesses into our operations properly. • If we are unable to introduce innovative products, demand for our products may decrease. • Our markets are highly competitive, and we may lose business to larger and better-financed competitors. • Our success depends on our ability to retain key management and technical personnel and attracting, retaining, and training new technical personnel. • We purchase certain key components and raw materials from single or limited sources and could lose sales if these sources fail to fulfill our needs for any reason. • As a supplier to U.S.
Biggest changeThis risk may be magnified due to concentration of investments and investments in undervalued securities. • We may not be able to identify suitable investments, and our investments may not result in favorable returns or may result in losses. • The Merchant Investment business may make investments in companies we do not control. • The use of leverage in investments by the Merchant Investment business may pose a significant degree of risk and may enhance the possibility of significant loss in the value of the investments in the Merchant Investment business. • The possibility of increased regulation could result in additional burdens on our Merchant Investment business. • The ability to hedge investments successfully is subject to numerous risks. • The Merchant Investment business may invest in distressed securities, as well as bank loans, asset backed securities and mortgage-backed securities. • The Merchant Investment business may invest in companies that are based outside of the United States, which may expose the Merchant Investment business to additional risks not typically associated with investing in companies that are based in the United States. • The Merchant Investment business' investments are subject to numerous additional risks. 8 Table of Contents Risks Related to Our Business and Industry • Macroeconomic fluctuations may harm our business, results of operations and stock price. • Changes in United States trade policies, including the imposition of tariffs and retaliatory tariffs, may adversely impact our business, financial condition, and results of operations. • Inflation and changing interest rates may adversely affect our financial condition and results of operations. • We are currently dependent on a single line of manufacturing business. • Our financial results vary significantly from period to period. • Our order backlog may not be indicative of future revenues. • Our future rate of growth and profitability are highly dependent on the development and growth of the communications, networking, aerospace, defense, instrumentation and industrial markets, which are cyclical. • The market share of our customers in the communications, networking, aerospace, defense, instrumentation and industrial markets may change over time, reducing the potential value of our relationships with our existing customer base. • The loss or decrease in sales among one of our top customers, or a material change in the terms on which they are willing to buy from us, could have a substantial negative impact on our sales and operating results. • We may make acquisitions that are not successful, or we may fail to integrate acquired businesses into our operations properly. • If we are unable to introduce innovative products, demand for our products may decrease. • Our markets are highly competitive, and we may lose business to larger and better-financed competitors. • Our success depends on our ability to retain key management and technical personnel and attracting, retaining, and training new technical personnel. • We purchase certain key components and raw materials from single or limited sources and could lose sales if these sources fail to fulfill our needs for any reason. • As a supplier to U.S.
Our business, financial condition, operating results and cash flows may be adversely affected by changes in global economic conditions and geopolitical risks, including credit market conditions, trade policies, levels of consumer and business confidence, commodity prices and availability, inflationary pressure, exchange rates, levels of government spending and deficits, political conditions, global pandemics, and other challenges that could affect the global economy including impacts associated with the continuing developments in the Russian war against Ukraine, sanctions which have been announced by the United States and other countries against Russia, conflicts in Israel and the Middle East, and attacks on cargo ships in the Red Sea, which have caused significant uncertainty, adding to continuing concerns about global trade flows, supply chain disruptions, higher transportation costs, higher inflation and increases in interest rates in the markets in which we operate.
Our business, financial condition, operating results and cash flows may be adversely affected by changes in global economic conditions and geopolitical risks, including credit market conditions, trade policies, tariffs, levels of consumer and business confidence, commodity prices and availability, inflationary pressure, exchange rates, levels of government spending and deficits, political conditions, global pandemics, and other challenges that could affect the global economy including impacts associated with the continuing developments in the Russian war against Ukraine, sanctions which have been announced by the United States and other countries against Russia, conflicts in Israel and the Middle East, and attacks on cargo ships in the Red Sea, which have caused significant uncertainty, adding to continuing concerns about global trade flows, supply chain disruptions, higher transportation costs, higher inflation and increases in interest rates in the markets in which we operate.
There can be no assurance that adverse developments with respect to such risks will not materially adversely affect the Merchant Investment business’s investments that are held in certain countries or the returns from these investments. 13 Table of Contents The Merchant Investment business ’ s investments are subject to numerous additional risks including those described below. • Generally, there are few limitations set forth in the governing documents of the Merchant Investment business on the execution of its investment activities, which are subject to the sole discretion of our management and the Investment Committee of the Board of Directors. • The Merchant Investment business may buy or sell (or write) both call options and put options, and when it writes options, it may do so on a covered or an uncovered basis.
There can be no assurance that adverse developments with respect to such risks will not materially adversely affect the Merchant Investment business’s investments that are held in certain countries or the returns from these investments. 14 Table of Contents The Merchant Investment business ’ s investments are subject to numerous additional risks including those described below. • Generally, there are few limitations set forth in the governing documents of the Merchant Investment business on the execution of its investment activities, which are subject to the sole discretion of our management and the Investment Committee of the Board of Directors. • The Merchant Investment business may buy or sell (or write) both call options and put options, and when it writes options, it may do so on a covered or an uncovered basis.
As a result, we may structure transactions in a less advantageous manner than if we did not have Investment Company Act concerns, or we may avoid otherwise economically desirable transactions due to those concerns. 9 Table of Contents Risks Relating to Liquidity and Capital Requirements We are a holding company and depend on the businesses of our subsidiaries to satisfy our obligations.
As a result, we may structure transactions in a less advantageous manner than if we did not have Investment Company Act concerns, or we may avoid otherwise economically desirable transactions due to those concerns. 10 Table of Contents Risks Relating to Liquidity and Capital Requirements We are a holding company and depend on the businesses of our subsidiaries to satisfy our obligations.
Additionally, future returns may be affected by additional risks, including risks of the industries and businesses in which a particular fund invests. 10 Table of Contents The Merchant Investment business ’ s investment strategy involves numerous and significant risks, including the risk that we may lose some or all of our investments in the Merchant Investment business.
Additionally, future returns may be affected by additional risks, including risks of the industries and businesses in which a particular fund invests. 11 Table of Contents The Merchant Investment business ’ s investment strategy involves numerous and significant risks, including the risk that we may lose some or all of our investments in the Merchant Investment business.
Our operating income was derived from PTF, whose future rate of growth and profitability are highly dependent on the development and growth of demand for our products in the communications, networking, aerospace, defense, instrumentation and industrial markets, which are cyclical, as well as net investment income from investments held by the Company.
Our operating income was derived from PTF, whose future rate of growth and profitability are highly dependent on the development and growth of demand for our products in the communications, networking, aerospace, defense, instrumentation and industrial markets, which can be cyclical, as well as net investment income from investments held by the Company.
In 2023 and 2022, the majority of our revenues were derived from sales to manufacturers of equipment for the defense, aerospace, instrumentation and industrial markets for frequency and timing synchronization instruments and peripheral equipment, including indirect sales through distributors. During 2024, we expect a significant portion of our revenues to continue to be derived from sales to these manufacturers.
In 2024 and 2023, the majority of our revenues were derived from sales to manufacturers of equipment for the defense, aerospace, instrumentation and industrial markets for frequency and timing synchronization instruments and peripheral equipment, including indirect sales through distributors. During 2025, we expect a significant portion of our revenues to continue to be derived from sales to these manufacturers.
If any of the foregoing were to occur, the values of the investments by the Merchant Investment business could decrease and our Merchant Investment business revenues could suffer as a result. 11 Table of Contents The use of leverage in investments by the Merchant Investment business may pose a significant degree of risk and may enhance the possibility of significant loss in the value of the investments in the Merchant Investment business.
If any of the foregoing were to occur, the values of the investments by the Merchant Investment business could decrease and our Merchant Investment business revenues could suffer as a result. 12 Table of Contents The use of leverage in investments by the Merchant Investment business may pose a significant degree of risk and may enhance the possibility of significant loss in the value of the investments in the Merchant Investment business.
In addition, our suppliers may be impacted by compliance with environmental regulations including RoHS and Waste Electrical and Electronic Equipment ("WEEE"), which could disrupt the supply of components or raw materials or cause additional costs for us to implement new components or raw materials into our manufacturing processes. 16 Table of Contents As a supplier to U.S.
In addition, our suppliers may be impacted by compliance with environmental regulations including RoHS and Waste Electrical and Electronic Equipment ("WEEE"), which could disrupt the supply of components or raw materials or cause additional costs for us to implement new components or raw materials into our manufacturing processes. As a supplier to U.S.
If interest rates start to decline, the returns generated by our investments in U.S. Treasuries could be adversely impacted. We are currently dependent on a single line of manufacturing business.
If interest rates continue to decline, the returns generated by our investments in U.S. Treasuries could be adversely impacted. We are currently dependent on a single line of manufacturing business.
As a result, our ability to persuade these OEMs to utilize our products in customer designs could be reduced and, in the absence of a manufacturer’s specification of our products, the prices that we can charge for them may be subject to greater competition. Future changes in our environmental liability and compliance obligations may increase costs and decrease profitability.
As a result, our ability to persuade these OEMs to utilize our products in customer designs could be reduced and, in the absence of a manufacturer’s specification of our products, the prices that we can charge for them may be subject to greater competition. 18 Table of Contents Future changes in our environmental liability and compliance obligations may increase costs and decrease profitability.
The effect of any future regulatory change on the Merchant Investment business and the Merchant Investment business could be substantial and adverse. 12 Table of Contents The ability to hedge investments successfully is subject to numerous risks.
The effect of any future regulatory change on the Merchant Investment business and the Merchant Investment business could be substantial and adverse. 13 Table of Contents The ability to hedge investments successfully is subject to numerous risks.
In addition, these potential tax liabilities may discourage, delay or prevent a change of control of us. 19 Table of Contents The distribution of MtronPTI common stock may not qualify for tax-free treatment . There is a risk that the Distribution may not qualify for tax-free treatment and, accordingly, will be a taxable transaction to the Company’s stockholders.
In addition, these potential tax liabilities may discourage, delay or prevent a change of control of us. The distribution of MtronPTI common stock may not qualify for tax-free treatment . There is a risk that the Distribution may not qualify for tax-free treatment and, accordingly, will be a taxable transaction to the Company’s stockholders.
We cannot be certain whether we will generate sufficient revenues or sufficiently manage expenses to sustain profitability. Further, our returns on our cash and investments may not be sufficient to cover operating losses from PTF. Our order backlog may not be indicative of future revenues.
We cannot be certain whether we will generate sufficient revenues or sufficiently manage expenses to sustain profitability. Further, our returns on our cash and investments may not be sufficient to cover operating losses from PTF. 16 Table of Contents Our order backlog may not be indicative of future revenues.
There can be no assurance that the market price of our common stock will exceed $4.75 per share at any time, on the expiration date of the warrants, November 16, 2025, or at any other time the warrants may be exercised.
There can be no assurance that the market price of our common stock will exceed $4.75 per share on November 16, 2025, the expiration date of the warrants, or at any other time the warrants may be exercised prior to such date.
As a result of the Separation, Marc Gabelli serves as special advisor to the Chairman of the Board of Directors of MtronPTI and serves as Chairman of the Board of Directors and co-Chief Executive Officer of the Company and Michael J.
As a result of the Separation, Marc Gabelli serves as special advisor to the Chairman of the Board of Directors of MtronPTI and serves as Chairman of the Board of Directors and co-Chief Executive Officer of the Company.
Any of these difficulties could have a material adverse effect on our business, financial condition, results of operations and cash flows. If we are unable to introduce innovative products, demand for our products may decrease.
Any of these difficulties could have a material adverse effect on our business, financial condition, results of operations and cash flows. 17 Table of Contents If we are unable to introduce innovative products, demand for our products may decrease.
Consequently, it may be more challenging for investors to analyze our results of operations and financial prospects. Risks Related to the Separation We may be unable to achieve some or all of the expected benefits of the Separation, and the Separation may adversely affect our business.
Consequently, it may be more challenging for investors to analyze our results of operations and financial prospects. 20 Table of Contents Risks Related to the Separation We may be unable to achieve some or all of the expected benefits of the Separation, and the Separation may adversely affect our business.
Before the Separation, the warrants had an exercise price of $12.50 per share and only become exercisable on the earlier of (i) the expiration date, November 16, 2025, and (ii) such date that the 30-day volume weighted average price per share ("VWAP") of our common stock was greater than or equal to $17.50.
The warrants to purchase shares of our common stock are "European style warrants." Before the Separation, the warrants had an exercise price of $12.50 per share and only become exercisable on the earlier of (i) the expiration date, November 16, 2025, and (ii) such date that the 30-day volume weighted average price per share ("VWAP") of our common stock was greater than or equal to $17.50.
The Merchant Investment business may also invest in credit default swaps. Risks Related to Our Business and Industry Macroeconomic fluctuations may harm our business, results of operations and stock price.
The Merchant Investment business may also invest in credit default swaps. 15 Table of Contents Risks Related to Our Business and Industry Macroeconomic fluctuations may harm our business, results of operations and stock price.
Our officers, directors and 10% or greater stockholders have significant voting power and may vote their shares in a manner that is not in the best interest of other stockholders. Our officers, directors and 10% or greater stockholders control approximately 37.5% of the voting power represented by our outstanding shares of common stock as of March 15, 2024.
Our officers, directors and 10% or greater stockholders have significant voting power and may vote their shares in a manner that is not in the best interest of other stockholders. Our officers, directors and 10% or greater stockholders control approximately 37.3% of the voting power represented by our outstanding shares of common stock as of March 14, 2025.
Risks Related to the Separation • We may be unable to achieve some or all of the expected benefits of the Separation, and the Separation may adversely affect our business. • The Separation could result in substantial tax liability to us and our stockholders. • The distribution of MtronPTI common stock may not qualify for tax-free treatment. • As a result of the Separation, certain of our directors and officers may have actual or potential conflicts of interest because of their positions or relationships with MtronPTI.
Risks Related to the Separation • We may be unable to achieve some or all of the expected benefits of the Separation, and the Separation may adversely affect our business. • The Separation could result in substantial tax liability to us and our stockholders. • The distribution of MtronPTI common stock may not qualify for tax-free treatment. • As a result of the Separation, certain of our directors and officers may have actual or potential conflicts of interest because of their positions or relationships with MtronPTI. 9 Table of Contents Risks Related to Our Structure We have engaged, and in the future may engage, in transactions with our affiliates.
Inflation in the United States decreased from 6.5% as of December 31, 2022 to 3.4% as of December 31, 2023, which is still above the U.S. Federal Reserve's long-term target of 2.0%.
Inflation in the United States decreased from 6.5% as of December 31, 2023 to 2.9% as of December 31, 2024, which is still above the U.S. Federal Reserve's long-term target of 2.0%.
Although inflation is expected to continue to decrease in 2024, the continued higher inflation may have an adverse impact on our manufacturing cost of sales along with engineering, selling and administrative expenses, as these costs could increase at a rate higher than our revenue. The U.S.
Inflation is expected to remain elevated in 2025 and the continued higher inflation may have an adverse impact on our Manufacturing cost of sales along with Engineering, selling and administrative expenses, as these costs could increase at a rate higher than our revenue. The U.S.
As of December 31, 2023, we had investments in Cash and cash equivalents and Marketable securities with a fair market value of $40,733, which may be accessed on short notice to satisfy our liquidity needs.
As of December 31, 2024, we had investments in Cash and cash equivalents and Marketable securities with a fair market value of $41,602, which may be accessed on short notice to satisfy our liquidity needs.
Risks Related to Our Securities The price of our common stock has fluctuated considerably and is likely to remain volatile, in part due to the limited market for our common stock. From January 1, 2023 through December 31, 2023, the high and low closing prices for our common stock were $6.14 and $3.96, respectively.
Risks Related to Our Securities The price of our common stock has fluctuated considerably and is likely to remain volatile, in part due to the limited market for our common stock. From January 1, 2024 through December 31, 2024, the high and low closing prices for our common stock were $6.58 and $5.05, respectively.
This concentration of ownership may not be in the best interests of all of our stockholders. The warrants to purchase shares of our common stock may not have any value. The warrants to purchase shares of our common stock are "modified European style warrants".
This concentration of ownership may not be in the best interests of all of our stockholders. 19 Table of Contents The warrants to purchase shares of our common stock may not have any value.
Risks Related to Our Structure We have engaged, and in the future may engage, in transactions with our affiliates. We have engaged, and in the future may engage, in transactions with our affiliates.
We have engaged, and in the future may engage, in transactions with our affiliates.
There is no guarantee that any processes, procedures and internal controls we have implemented or will implement will prevent cyber intrusions, which could have a negative impact on our financial results, operations, business relationships or confidential information. 17 Table of Contents Significant legal proceedings may adversely affect our business, results of operations, or financial condition.
There is no guarantee that any processes, procedures and internal controls we have implemented or will implement will prevent cyber intrusions, which could have a negative impact on our financial results, operations, business relationships or confidential information.
Federal Reserve raised the federal funds rate a total of four times throughout 2023, resulting in a range from 5.25% to 5.50% as of December 31, 2023. However, it is expected that the U.S. Federal Reserve will hold the federal funds rate steady or start to decrease it during 2024 to, among other things, control inflation.
Federal Reserve decreased the federal funds rate a total of three times throughout 2024, resulting in a range from 4.25% to 4.50% as of December 31, 2024. However, it is expected that the U.S. Federal Reserve will continue to decrease the federal funds rate steady during 2025 to, among other things, control inflation.
Ferrantino serves as Chief Executive Officer and as a director of MtronPTI and also as a director of the Company. Such dual roles could create, or appear to create, potential conflicts of interest when the Company and MtronPTI’s officers and directors face decisions that could have different implications for the two companies.
Such dual roles could create, or appear to create, potential conflicts of interest when the Company and MtronPTI’s officers and directors face decisions that could have different implications for the two companies.
A significant percentage of our sales has been, and is expected to be, concentrated among a relatively small number of customers. In 2023, the Company’s largest and second largest customers accounted for $399, or 23.1%, and $236, or 13.7%, respectively, of the Company’s net sales.
A significant percentage of our sales has been, and is expected to be, concentrated among a relatively small number of customers. In 2024, the Company’s two largest customers accounted for $310, or 13.9%, and $261, or 11.7%, respectively, of the Company’s Net sales.
Once the warrants become exercisable, they may be exercised in accordance with the terms of the warrant agreement until their expiration.
The warrants became exercisable on March 4, 2025, and may be exercised in accordance with the terms of the warrant agreement until their expiration.
If the warrants only become exercisable on the expiration date and the market price of our common stock on such date does not exceed $4.75 per share, the warrants will be of no value.
If the market price of our common stock on such date does not exceed $4.75 per share, the warrants will be of no value. An active trading market for the warrants to purchase shares of our common stock may not be sustained.
Summary Risk Factors Risks Relating to Our Structure • We have engaged, and in the future may engage, in transactions with our affiliates. • We are subject to the risk of becoming an investment company under the Investment Company Act. • We may structure transactions in a less advantageous manner to avoid becoming subject to the Investment Company Act. 7 Table of Contents Risks Relating to Liquidity and Capital Requirements • We are a holding company and depend on the businesses of our subsidiaries to satisfy our obligations. • We have made significant investments and negative performance of those investments may result in a significant decline in the value and could impact our cash flows.
Risks Relating to Liquidity and Capital Requirements • We are a holding company and depend on the businesses of our subsidiaries to satisfy our obligations. • We have made significant investments and negative performance of those investments may result in a significant decline in the value and could impact our cash flows.
Government audit or investigation. • Our products are complex and may contain errors or design flaws, which could be costly to correct. • Communications and network infrastructure equipment manufacturers increasingly rely upon contract manufacturers, thereby diminishing our ability to sell our products directly to those equipment manufacturers. • Future changes in our environmental liability and compliance obligations may increase costs and decrease profitability. • We rely on information technology systems to conduct our business, and disruption, failure or security breaches of these systems could adversely affect our business and results of operations. • Cybersecurity risks and cyber incidents may adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively impact our financial results. • Significant legal proceedings may adversely affect our business, results of operations, or financial condition. 8 Table of Contents Risks Related to Our Securities • The price of our common stock has fluctuated considerably and is likely to remain volatile, in part due to the limited market for our common stock. • Our officers, directors and 10% or greater stockholders have significant voting power and may vote their shares in a manner that is not in the best interest of other stockholders. • The warrants to purchase shares of our common stock may not have any value. • An active trading market for the warrants to purchase shares of our common stock may not be sustained. • Holders of the warrants to purchase shares of our common stock will have no rights as a common stockholder until such holders exercise their warrants and acquire shares of our common stock. • Adjustments to the exercise price of the warrants, or the number of shares of common stock for which the warrants are exercisable, following certain corporate events may not fully compensate warrant holders for the value they would have received if they held the common stock underlying the warrants at the time of such events. • As a smaller reporting company, we are subject to scaled disclosure requirements that may make it more challenging for investors to analyze our results of operations and financial prospects.
Risks Related to Our Securities • The price of our common stock has fluctuated considerably and is likely to remain volatile, in part due to the limited market for our common stock. • Our officers, directors and 10% or greater stockholders have significant voting power and may vote their shares in a manner that is not in the best interest of other stockholders. • The warrants to purchase shares of our common stock may not have any value. • An active trading market for the warrants to purchase shares of our common stock may not be sustained. • Holders of the warrants to purchase shares of our common stock will have no rights as a common stockholder until such holders exercise their warrants and acquire shares of our common stock. • Adjustments to the exercise price of the warrants, or the number of shares of common stock for which the warrants are exercisable, following certain corporate events may not fully compensate warrant holders for the value they would have received if they held the common stock underlying the warrants at the time of such events. • As a smaller reporting company, we are subject to scaled disclosure requirements that may make it more challenging for investors to analyze our results of operations and financial prospects.
In 2022, the Company’s largest and second largest customers accounted for $312, or 18.9%, and $195, or 11.8%, respectively, of the Company’s net sales. We anticipate that this concentration of sales among these customers will continue in the future.
In 2023, the Company’s two largest customers accounted for $399, or 23.1%, and $236, or 13.7%, respectively, of the Company’s Net sales. We anticipate that this concentration of sales among these customers will continue in the future.
Similarly, credit restrictions may adversely affect our supplier base and increase the potential for one or more of our suppliers to experience financial distress. 14 Table of Contents Inflation and changing interest rates may adversely affect our financial condition and results of operations.
Similarly, credit restrictions may adversely affect our supplier base and increase the potential for one or more of our suppliers to experience financial distress. Changes in United States trade policies, including the imposition of tariffs and retaliatory tariffs, may adversely impact our business, financial condition, and results of operations.
For the years ended December 31, 2023 and 2022, we had a net income of approximately $269 and a net loss of $2,992, respectively. This fluctuation was a result of the sales of our investment in IronNet, Inc. in 2022, which resulted in significant net losses.
For the years ended December 31, 2024 and 2023, we had net income of approximately $432 and $269, respectively. This fluctuation was a result of higher Net sales and Net investment income partially offset by higher expenses.
There is no assurance that such activity may occur, that the Company will have appropriate insurance for such an occurrence, or that its Board will endorse such activity. There is no assurance that any SPAC will be successful with IPO, that any SPAC or SPV will complete a business combination, or that any business combination will be successful.
There is no assurance that any SPAC will be successful with IPO, that any SPAC or SPV will complete a business combination, or that any business combination will be successful.
If these customers lose market share to other equipment manufacturers in the communications, networking, aerospace, defense, instrumentation and industrial markets with whom we do not have similar relationships, our ability to maintain revenue, margin or operating performance may be adversely affected. 15 Table of Contents The loss or decrease in sales among one of our top customers, or a material change in the terms on which they are willing to buy from us, could have a substantial negative impact on our sales and operating results.
We have developed long-term relationships with our existing customers, including pricing contracts, custom designs and approved vendor status. If these customers lose market share to other equipment manufacturers in the communications, networking, aerospace, defense, instrumentation and industrial markets with whom we do not have similar relationships, our ability to maintain revenue, margin or operating performance may be adversely affected.
Removed
This risk may be magnified due to concentration of investments and investments in undervalued securities. • We may not be able to identify suitable investments, and our investments may not result in favorable returns or may result in losses. • The Merchant Investment business may make investments in companies we do not control. • The use of leverage in investments by the Merchant Investment business may pose a significant degree of risk and may enhance the possibility of significant loss in the value of the investments in the Merchant Investment business. • The possibility of increased regulation could result in additional burdens on our Merchant Investment business. • The ability to hedge investments successfully is subject to numerous risks. • The Merchant Investment business may invest in distressed securities, as well as bank loans, asset backed securities and mortgage-backed securities. • The Merchant Investment business may invest in companies that are based outside of the United States, which may expose the Merchant Investment business to additional risks not typically associated with investing in companies that are based in the United States. • The Merchant Investment business' investments are subject to numerous additional risks.
Added
Summary Risk Factors Risks Relating to Our Structure • We have engaged, and in the future may engage, in transactions with our affiliates. • We are subject to the risk of becoming an investment company under the Investment Company Act. • We may structure transactions in a less advantageous manner to avoid becoming subject to the Investment Company Act.
Removed
The Company invested $6.1 million in LGL Systems, the sponsor of LGL I, a NYSE-listed SPAC trading under the symbol "DFNS" which later completed a business combination with IronNet Cybersecurity, Inc. and began trading on the NYSE under the symbol "IRNT." The Company may form additional SPVs to facilitate the acquisition of companies in the future, which may be material to the Company.
Added
Government audit or investigation. • Our products are complex and may contain errors or design flaws, which could be costly to correct. • Communications and network infrastructure equipment manufacturers increasingly rely upon contract manufacturers, thereby diminishing our ability to sell our products directly to those equipment manufacturers. • Future changes in our environmental liability and compliance obligations may increase costs and decrease profitability. • We rely on information technology systems to conduct our business, and disruption, failure or security breaches of these systems could adversely affect our business and results of operations. • Cybersecurity risks and cyber incidents may adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively impact our financial results.
Removed
We have developed long-term relationships with our existing customers, including pricing contracts, custom designs and approved vendor status.
Added
The Company has in the past and in the future may form SPVs to facilitate the acquisition of companies, which may be material to the Company. There is no assurance that such activity may occur, that the Company will have appropriate insurance for such an occurrence, or that its Board will endorse such activity.
Removed
LGL Group, our subsidiaries, and their respective officers and directors may be subject to legal action in the ordinary course of our manufacturing and investment operations brought by holders of LGL Group securities, customers, employees, partners, investors, or others. Some of these legal proceedings may be brought on behalf of a class.
Added
During the first Trump Administration from 2017 to 2021, certain tariffs and retaliatory tariffs, as well as other trade restrictions, were imposed on various products and materials. President Trump again has signaled that his new Administration will impose tariffs and retaliatory tariffs against U.S. trading partners.
Removed
Plaintiffs may seek large or indeterminate amounts of damage, including compensatory, liquidated, treble and/or punitive damages. Our reserves for litigation may be inadequate and insurance coverage may not be available or may be declined for certain matters.
Added
During his election campaign, President Trump indicated that he would impose a 25% tariff against all goods imported from Canada and Mexico, a 60% tariff on goods from China, and a blanket tariff of 10% to 20% on other imports to the U.S.
Removed
It is therefore inherently difficult to predict the size or scope of potential future losses arising from them, and developments in these matters could have a material adverse impact on our consolidated financial condition or our consolidated results of operations.
Added
On February 1, 2025, President Trump issued an Executive Order imposing tariffs at various levels on imports from Canada, Mexico, and China. The newly imposed tariffs have resulted in immediate threats of retaliatory tariffs against U.S. goods and resulted in discussions with the countries which have delayed many of the U.S. imposed tariffs while discussion with each trading partner continue.
Removed
There can be no assurance that the 30-day VWAP of our common stock will be greater than or equal to $6.65 at any time prior to the expiration date of the warrants, November 16, 2025. As a result, the warrants may become exercisable only on the expiration date.
Added
The above and other potential tariffs and trade restrictions may cause the prices of our vendors' products to increase, which could reduce demand for such products, or reduce our vendors' margins, and adversely impact their revenues, financial results, and ability to service debt. This in turn could adversely affect our financial condition and results of operations.
Removed
If the warrants may be exercised only on the expiration date and the holder thereof does not exercise its warrants on that date, such warrants will expire and be of no value. 18 Table of Contents An active trading market for the warrants to purchase shares of our common stock may not be sustained.
Added
In addition, to the extent changes in the political environment have a negative impact on us or on the markets in which we operate our business, our results of operations and financial condition could be materially and adversely impacted in the future.
Added
At this time, it remains unclear what the U.S. government or foreign governments will or will not do with respect to additional tariffs that may be imposed or international trade agreements and policies. Inflation and changing interest rates may adversely affect our financial condition and results of operations.
Added
The loss or decrease in sales among one of our top customers, or a material change in the terms on which they are willing to buy from us, could have a substantial negative impact on our sales and operating results.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changePTF leases approximately 3,600 square feet of office and manufacturing space in Wakefield, Massachusetts.
Biggest changePTF’s operations, which comprise our Electronic Instruments segment, are located in Wakefield, Massachusetts, where PTF leases approximately 3,600 square feet of office and manufacturing space.
Item 2. Properties The Company’s principal executive offices are located in Orlando, Florida and services are provided to LGL by MtronPTI staff under the Amended and Restated Transitional Administrative and Management Services Agreement with MtronPTI. PTF’s operations, which comprise our Electronic Instruments segment, are located in Wakefield, Massachusetts.
Item 2. Properties The Company’s principal executive offices are located in Orlando, Florida and services are provided to LGL Group by MtronPTI staff under the Amended and Restated Transitional Administrative and Management Services Agreement with MtronPTI.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeMine Safety Disclosures Not applicable. 21 Table of Contents PART II
Biggest changeMine Safety Disclosures Not applicable. 22 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 21 PART II Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 22 Item 6. Reserved 22 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 23 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 28 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 22 PART II Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 23 Item 6. Reserved 23 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 24 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 29 Item 8.
Financial Statements and Supplementary Data 28 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 29 Item 9A. Controls and Procedures 29
Financial Statements and Supplementary Data 29 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 30 Item 9A. Controls and Procedures 30

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePurchases of Equity Securities by the Issuer or Affiliated Purchaser The following table sets forth information with respective to shares of common equity purchased by the Company during the three months ended December 31, 2023: Total Number of Shares Purchased (1) Weighted Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Program (1) Maximum Number (or Approximate Dollar Value) of Shares that May Yet to be Purchased Under the Plan or Programs October 1, 2023 - October 31, 2023 — $ — — 458,416 November 1, 2023 - November 30, 2023 — — — 458,416 December 1, 2023 - December 31, 2023 — — — 458,416 Total — — (1) On August 29, 2011, our Board authorized an expansion of its previously announced share repurchase program.
Biggest changePurchases of Equity Securities by the Issuer or Affiliated Purchaser The following table sets forth information with respective to shares of common equity purchased by the Company during the three months ended December 31, 2024: Total Number of Shares Purchased (1) Weighted Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Program (1) Maximum Number (or Approximate Dollar Value) of Shares that May Yet to be Purchased Under the Plan or Programs October 1, 2024 - October 31, 2024 — $ — — 458,416 November 1, 2024 - November 30, 2024 — — — 458,416 December 1, 2024 - December 31, 2024 — — — 458,416 Total — — (1) On August 29, 2011, our Board increased the total number of shares authorized for repurchase under the Company’s existing share repurchase program to 797,491 shares, of which 540,000 shares were available to be repurchased, at such times, amounts and prices as the Company shall deem appropriate.
Item 5. Market for the Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Unless otherwise stated, all dollar amounts are in thousands. Market for Common Equity Our common stock and warrants are traded on the NYSE, under the symbols "LGL" and "LGL WS," respectively.
Item 5. Market for the Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Unless otherwise stated, all dollar amounts are in thousands. Market for Common Equity Our common stock and warrants are traded on the NYSE American, under the symbols "LGL" and "LGL WS," respectively.
This number of holders of record also does not include holders whose shares or warrants may be held in trust by other entities. Recent Sales of Unregistered Securities The Company did not sell any equity securities during the three months and year ended December 31, 2023 that were not registered under the Securities Act.
This number of holders of record also does not include holders whose shares or warrants may be held in trust by other entities. Recent Sales of Unregistered Securities The Company did not sell any equity securities during the three months and year ended December 31, 2024 that were not registered under the Securities Act.
The share repurchase program has no time limits and may be suspended or discontinued at any time. To date, the Company has repurchased a total of 81,584 shares of common stock under this program at a cost of $580, which shares are currently held in treasury.
The share repurchase program has no time limits and may be suspended or discontinued at any time. As of December 31, 2024, the Company has repurchased a total of 81,584 shares of common stock under this program at a cost of $580, which shares are currently held in treasury.
Holders of Common Stock and Warrants As of March 15, 2023, we had approximately 1,300 holders of record of our common stock and approximately 800 holders of record of our warrants.
Holders of Common Stock and Warrants As of March 14, 2025, we had approximately 1,270 holders of record of our common stock and approximately 740 holders of record of our warrants.
No cash dividends have been paid to our stockholders since January 30, 1989, and none are expected to be paid for the foreseeable future.
No cash dividends have been paid to our stockholders since January 30, 1989, and none are expected to be paid for the foreseeable future. Warrants LGL Group has approximately 5.25 million "European Style" warrants outstanding, exercisable at a 5 for 1 ratio into LGL Group common stock.
The exercise price was adjusted from $12.50 to $4.75 and the trigger price was adjusted from $17.50 to $6.65. Assuming that all warrants are exercised, the net proceeds from the exercise of the warrants will be $4,995.
On March 6, 2025, we announced that the warrants became exercisable through November 16, 2025, the expiration date. Assuming that all warrants are exercised, the net proceeds from the exercise of the warrants will be $4,995.
Removed
This authorization increased the total number of shares authorized and available for repurchase under the Company’s existing share repurchase program to 540,000 shares, at such times, amounts and prices as the Company shall deem appropriate.
Removed
Warrants LGL has approximately 5.25 million "European Style" warrants outstanding, exercisable at a 5 for 1 ratio into LGL shares only at the earlier of (i) the expiration of the warrant term, which is November 16, 2025, or (ii) subject to a date acceleration if triggered only after the average volume weighted average price ("VWAP") of LGL common stock for 30 consecutive trading days is greater than or equal to the acceleration trigger price.
Removed
The distribution of MtronPTI shares was a qualifying dilutive event that required an adjustment, with the exercise price of the warrants and the trigger price for the potential acceleration of the exercise date for its warrants adjusted using the calculation provided within the warrant agreement.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

25 edited+4 added−10 removed31 unchanged
Biggest changeMerchant Investment The following table presents income from continuing operations of our Merchant Investment segment for the periods indicated: Year Ended December 31, (in thousands) 2023 2022 Revenues: Net investment income $ 869 $ — Total revenues 869 — Expenses: Engineering, selling and administrative 216 — Total expenses 216 — Income from continuing operations before income taxes $ 653 $ — 2023 Compared to 2022 Income from Continuing Operations Before Income Taxes Income from continuing operations increased $653 from $0 in 2022 to $653 in 2023 due to the commencement of operations of Lynch Capital International, LLC in June 2023. 25 Table of Contents Corporate The following table presents income from continuing operations of Corporate for the periods indicated: Year Ended December 31, (in thousands) 2023 2022 Revenues: Net investment income $ 697 $ 413 Net gains (losses) 384 (4,747 ) Total revenues 1,081 (4,334 ) Expenses: Engineering, selling and administrative 1,240 2,175 Total expenses 1,240 2,175 Loss from continuing operations before income taxes $ (159 ) $ (6,509 ) 2023 Compared to 2022 Loss from Continuing Operations Before Income Taxes Loss from continuing operations before income taxes decreased $6,350, or 97.6%, from $6,509 in 2022 to $159 in 2023.
Biggest changeMerchant Investment The following table presents income from continuing operations of our Merchant Investment segment for the periods indicated: Year Ended December 31, (in thousands) 2024 2023 Revenues: Net investment income $ 1,228 $ 869 Total revenues 1,228 869 Expenses: Engineering, selling and administrative 381 216 Total expenses 381 216 Income from continuing operations before income taxes $ 847 $ 653 2024 Compared to 2023 Income from Continuing Operations Before Income Taxes Income from continuing operations before income taxes increased $194 from $653 in 2023 to $847 in 2024 due to an increase in Net investment income driven by higher balances invested in United States Treasury money market funds in 2024 partially offset by higher corporate-level expenses allocated to the Merchant Investment segment. 26 Table of Contents Corporate The following table presents income from continuing operations of Corporate for the periods indicated: Year Ended December 31, (in thousands) 2024 2023 Revenues: Net investment income $ 843 $ 697 Net (losses) gains (5 ) 384 Total revenues 838 1,081 Expenses: Engineering, selling and administrative 1,229 1,240 Total expenses 1,229 1,240 Loss from continuing operations before income taxes $ (391 ) $ (159 ) 2024 Compared to 2023 Loss from Continuing Operations Before Income Taxes Loss from continuing operations before income taxes increased $232, or 145.9%, from $159 in 2023 to $391 in 2024 primarily due to a $389, or 101.3%, decrease in Net gains (losses) from $384 in 2023 to ($5) in 2024 driven by mark-to-market movements on Marketable securities in 2024 versus realized gains on the related sales of mutual fund investments in 2023 partially offset by a $146, or 20.9%, increase in Net investment income from $697 in 2023 to $843 in 2024 driven by higher balances invested in United States Treasury money market funds.
We believe that the Electronic Instruments business maintain adequate financial resources to meet the actual required payments under these obligations. Completion of Spin-Off of MtronPTI from LGL On October 7, 2022 (the "Distribution Date"), at 12:01 a.m. Eastern Time, the spin-off of MtronPTI was completed (the "Spin-off" or the "Separation").
We believe that the Electronic Instruments business maintain adequate financial resources to meet the actual required payments under these obligations. Completion of Spin-Off of MtronPTI from LGL Group On October 7, 2022 (the "Distribution Date"), at 12:01 a.m. Eastern Time, the spin-off of MtronPTI was completed (the "Spin-off" or the "Separation").
The Separation of MtronPTI was achieved through LGL’s distribution of 100% of the shares of MtronPTI common stock to holders of LGL common stock as of the close of business on the record date of September 30, 2022. LGL stockholders of record received one-half share of Mtron common stock for every share of LGL common stock.
The Separation of MtronPTI was achieved through LGL’s distribution of 100% of the shares of MtronPTI common stock to holders of LGL common stock as of the close of business on the record date of September 30, 2022. LGL stockholders of record received one-half share of MtronPTI common stock for every share of LGL common stock.
In connection with the Separation, MtronPTI entered into several agreements with LGL that, among other things, effect the Separation and provide a framework for its relationship with LGL after the Separation, including (i) an Amended and Restated Separation and Distribution Agreement which provides for, among other things, the mechanics for effecting the Distribution as well as certain ongoing responsibilities of MtronPTI and LGL subsequent to the Distribution, (ii) an Amended and Restated Transitional Administrative and Management Services Agreement with MtronPTI, which, among other things, specifies that LGL will provide MtronPTI, and MtronPTI will provide LGL, with certain administrative and management services for up to a twelve-month period after the Distribution, and (iii) an Amended and Restated Tax Indemnity and Sharing Agreement, which, among other things, contains certain agreements and covenants related to tax matters involving LGL and MtronPTI and covers time periods before and after the Distribution.
In connection with the Separation, MtronPTI entered into several agreements with LGL that, among other things, effect the Separation and provide a framework for its relationship with LGL after the Separation, including (i) an Amended and Restated Separation and Distribution Agreement which provides for, among other things, the mechanics for effecting the Distribution as well as certain ongoing responsibilities of MtronPTI and LGL subsequent to the Distribution, (ii) an Amended and Restated Transitional Administrative and Management Services Agreement with MtronPTI, which, among other things, specifies that LGL will provide MtronPTI, and MtronPTI will provide LGL, with certain administrative and management services, and (iii) an Amended and Restated Tax Indemnity and Sharing Agreement, which, among other things, contains certain agreements and covenants related to tax matters involving LGL and MtronPTI and covers time periods before and after the Distribution.
Trends and Uncertainties We are not aware of any material trends or uncertainties, other than the global economic conditions affecting our industry generally, that may reasonably be expected to have a material impact, favorable or unfavorable, on our revenues or income other than those listed in Part I, Item 1A, Risk Factors, of this Annual Report on Form 10-K.
Trends and Uncertainties We are not aware of any material trends or uncertainties, other than the global economic conditions affecting our industry generally, that may reasonably be expected to have a material impact, favorable or unfavorable, on our revenues or income other than those listed in Part I, Item 1A, Risk Factors, of this Report .
Our ability to generate and maintain sufficient liquidity and capital depends on the profitability of the businesses, timing of cash flows, general economic conditions and access to the capital markets and the other sources of liquidity and capital described herein. As of December 31, 2023 and 2022, Cash and cash equivalents were $40,711 and $21,507, respectively.
Our ability to generate and maintain sufficient liquidity and capital depends on the profitability of the businesses, timing of cash flows, general economic conditions and access to the capital markets and the other sources of liquidity and capital described herein. As of December 31, 2024 and 2023, Cash and cash equivalents were $41,585 and $40,711, respectively.
Investing Activities Cash provided by investing activities was $18,819 in 2023 compared to cash used in investing activities of $5,833 in 2022, an increase of $24,652 primarily due to the sale of the Company's investments in marketable securities, including IrontNet, Inc. and mutual fund investments during Q1 and Q2 2023 at a gain as well as the consolidation of non-controlling interests related to LGL Systems Acquisition Holding Company, LLC.
Investing Activities Cash provided by investing activities was $0 in 2024 compared to $18,819 in 2023, a decrease of $18,819 primarily due to the sale of the Company's investments in marketable securities, including IrontNet, Inc. and mutual fund investments during Q1 and Q2 2023 at a gain as well as the consolidation of non-controlling interests related to LGL Systems Acquisition Holding Company, LLC.
Contractual Obligations The following table summarizes contractual obligations in total, and by remaining maturity: Payments due by Period (in thousands) Total Payments 2024 2025 Leases $ 79 $ 64 $ 15 Total $ 79 $ 64 $ 15 Leases Leases relate to our Electronic Instruments business and represent the future minimum lease payments under our operating leases.
Contractual Obligations The following table summarizes contractual obligations in total, and by remaining maturity: Payments due by Period (in thousands) Total Payments 2025 2026 2027 2028 2029 Leases $ 380 $ 76 $ 76 $ 76 $ 76 $ 76 Total $ 380 $ 76 $ 76 $ 76 $ 76 $ 76 Leases Leases relate to our Electronic Instruments business and represent the future minimum lease payments under our operating leases.
The increase was partially offset by: • Deferred income tax expense (benefit) decreased $1,598 from ($1,516) in 2022 to $82 in 2023. 26 Table of Contents Our working capital metrics and ratios were as follows: As of December 31, (in thousands) 2023 2022 Current assets $ 41,566 $ 39,340 Less: Current liabilities 474 587 Working capital $ 41,092 $ 38,753 Current ratio 87.7 67.0 Management continues to focus on efficiently managing working capital requirements to match operating activity levels and will seek to deploy the Company’s working capital where it will generate the greatest returns.
The increase was partially offset by: • Deferred income tax expense (benefit) decreased $26 from $82 in 2023 to $56 in 2024; and • Net change in operating assets and liabilities decreased $111 from $345 in 2023 to $234 in 2024. 27 Table of Contents Our working capital metrics and ratios were as follows: As of December 31, (in thousands) 2024 2023 Current assets $ 42,642 $ 41,566 Less: Current liabilities 904 474 Working capital $ 41,738 $ 41,092 Current ratio 47.2 87.7 Management continues to focus on efficiently managing working capital requirements to match operating activity levels and will seek to deploy the Company’s working capital where it will generate the greatest returns.
Net Income Attributable to Non-Controlling Interests Net income attributable to non-controlling interests increased $48 from $0 in 2022 to $48 in 2023 primarily due to the consolidation of LGL Systems in June 2023, which has minority shareholders. 24 Table of Contents Results of Operations - Operating Segments Electronic Instruments The following table presents income from continuing operations of our Electronic Instruments segment for the periods indicated: Year Ended December 31, (in thousands) 2023 2022 Revenues: Net sales $ 1,728 $ 1,655 Total revenues 1,728 1,655 Expenses: Manufacturing cost of sales 796 837 Engineering, selling and administrative 780 715 Total expenses 1,576 1,552 Income from continuing operations before income taxes $ 152 $ 103 2023 Compared to 2022 Income from Continuing Operations Before Income Taxes Income from continuing operations before income taxes increased $49, or 47.6%, from $103 in 2022 to $152 in 2023.
Net Income Attributable to Non-Controlling Interests Net income attributable to non-controlling interests increased $42 from $48 in 2023 to $90 in 2024 primarily due to higher income from LGL Systems. 25 Table of Contents Results of Operations - Operating Segments Electronic Instruments The following table presents income from continuing operations of our Electronic Instruments segment for the periods indicated: Year Ended December 31, (in thousands) 2024 2023 Revenues: Net sales $ 2,226 $ 1,728 Total revenues 2,226 1,728 Expenses: Manufacturing cost of sales 1,047 796 Engineering, selling and administrative 936 780 Total expenses 1,983 1,576 Income from continuing operations before income taxes $ 243 $ 152 2024 Compared to 2023 Income from Continuing Operations Before Income Taxes Income from continuing operations before income taxes increased $91, or 59.9%, from $152 in 2023 to $243 in 2024.
We expect to fill a substantial portion of our order backlog as of December 31, 2023 in 2024, but cannot provide assurances as to what portion of the order backlog will be fulfilled in a given year.
Order backlog is adjusted quarterly to reflect project cancellations, deferrals, revised project scope and cost, and sales of subsidiaries, if any. We expect to fill a substantial portion of our order backlog as of December 31, 2024 in 2025, but cannot provide assurances as to what portion of the order backlog will be fulfilled in a given year.
As a result, we have increased the prices we charge our customers. 23 Table of Contents Results of Operations - Consolidated The following table presents our Consolidated Statements of Operations for the periods indicated: Year Ended December 31, (in thousands, except share data) 2023 2022 $ Change % Change Revenues: Net sales $ 1,728 $ 1,655 $ 73 4.4 % Net investment income 1,566 413 1,153 279.0 % Net gains (losses) 384 (4,747 ) 5,131 108.1 % Total revenues 3,678 (2,679 ) 6,357 237.3 % Expenses: Manufacturing cost of sales 796 837 (41 ) -4.9 % Engineering, selling and administrative 2,236 2,890 (654 ) -22.6 % Total expenses 3,032 3,727 (695 ) -18.6 % Income (loss) from continuing operations before income tax expense 646 (6,406 ) 7,052 110.1 % Income tax expense (benefit) 301 (1,529 ) 1,830 119.7 % Net income (loss) from continuing operations 345 (4,877 ) 5,222 107.1 % (Loss) income from discontinued operations, net of tax (28 ) 1,885 (1,913 ) -101.5 % Net income (loss) 317 (2,992 ) 3,309 110.6 % Less: Net income attributable to non-controlling interests 48 — 48 n/m Net income (loss) attributable to LGL Group common stockholders $ 269 $ (2,992 ) $ 3,357 112.2 % 2023 Compared to 2022 Total Revenues Total revenues increased $6,357, or 237.3%, from ($2,679) in 2022 to $3,678 in 2023.
As a result, we may increase the prices we charge our customers. 24 Table of Contents Results of Operations - Consolidated The following table presents our Consolidated Statements of Operations for the periods indicated: Year Ended December 31, (in thousands, except share data) 2024 2023 $ Change % Change Revenues: Net sales $ 2,226 $ 1,728 $ 498 28.8 % Net investment income 2,071 1,566 505 32.2 % Net (losses) gains (5 ) 384 (389 ) -101.3 % Total revenues 4,292 3,678 614 16.7 % Expenses: Manufacturing cost of sales 1,047 796 251 31.5 % Engineering, selling and administrative 2,546 2,236 310 13.9 % Total expenses 3,593 3,032 561 18.5 % Income from continuing operations before income tax expense 699 646 53 8.2 % Income tax expense 177 301 (124 ) -41.2 % Net income from continuing operations 522 345 177 51.3 % Income (loss) from discontinued operations, net of tax — (28 ) 28 100.0 % Net income 522 317 205 64.7 % Less: Net income attributable to non-controlling interests 90 48 42 87.5 % Net income attributable to LGL Group common stockholders $ 432 $ 269 $ 163 60.6 % 2024 Compared to 2023 Total Revenues Total revenues increased $614, or 16.7%, from $3,678 in 2023 to $4,292 in 2024.
Gross Margin Gross margin (Net sales less Manufacturing cost of sales as a percentage of Net sales) increased 450 basis points from 49.4% in 2022 to 53.9% in 2023 primarily due to shift in product mix within the Electronic Instruments segment that had lower costs (and higher margins).
Gross Margin Gross margin (Net sales less Manufacturing cost of sales as a percentage of Net sales) decreased 90 basis points from 53.9% in 2023 to 53.0% in 2024 primarily due to several contracts with lower margin products within the Electronic Instruments segment.
Cash Flow Activity The following table presents the cash flow activity for the periods indicated: As of December 31, (in thousands) 2023 2022 Cash and cash equivalents, beginning of year $ 21,507 $ 29,016 Cash provided by (used in) operating activities 385 (817 ) Cash provided by (used in) investing activities 18,819 (5,833 ) Cash used in financing activities — (859 ) Net change in cash and cash equivalents 19,204 (7,509 ) Cash and cash equivalents, end of year $ 40,711 $ 21,507 Operating Activities Cash provided by operating activities was $385 in 2023 compared to cash used in operating activities of $817 in 2022, an increase of $1,202 primarily due to the following: • Net income (loss) increased $3,309 from ($2,992) in 2022 to $317 in 2023; • Net gains (losses) increased $5,131 from ($4,747) in 2022 to $384 in 2023 related to the sale of IronNet, Inc. at a loss in 2022 and the sales of related party mutual fund investments in 2023; and • Net change in operating assets and liabilities increased $2,347 from ($2,002) in 2022 to $345 in 2023.
Cash Flow Activity The following table presents the cash flow activity for the periods indicated: As of December 31, (in thousands) 2024 2023 Cash and cash equivalents, beginning of year $ 40,711 $ 21,507 Cash provided by operating activities 874 385 Cash provided by investing activities — 18,819 Net change in cash and cash equivalents 874 19,204 Cash and cash equivalents, end of year $ 41,585 $ 40,711 Operating Activities Cash provided by operating activities was $874 in 2024 compared to $385 in 2023, an increase of $489 primarily due to the following: • Net income increased $205 from $317 in 2023 to $522 in 2024; and • Net gains (losses) decreased $389 from $384 in 2023 to ($5) in 2024 related to mark-to-market movements on Marketable securities in 2024 versus realized gains from sales of mutual fund investments in 2023.
Please see the full text of the Agreements, filed as Exhibits 2.1, 10.3, and 10.4, respectively, to this Report on Form 10-K. See Note 3 – Discontinued Operations in the accompanying Notes to the Consolidated Financial Statements included in Item 8.
Please see the full text of the Agreements, filed as Exhibits 2.1, 10.3, and 10.4, respectively, to this Report on Form 10-K. 28 Table of Contents Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States.
The following items contributed to the overall decrease: • a $41, or 4.9%, decrease in Manufacturing cost of sales from $837 in 2022 to $796 in 2023 primarily due to several contracts for lower cost distribution products within the Electronic Instruments segment; and • a $654, or 22.6%, decrease in Engineering, selling and administrative from $2,890 in 2022 to $2,236 in 2023 primarily due to lower salaries and wages, share-based compensation expenses, and professional services and other consulting fees within the Corporate segment in 2023 compared to 2022.
The following items contributed to the overall increase: • a $251, or 31.5%, increase in Manufacturing cost of sales from $796 in 2023 to $1,047 in 2024 primarily due to several contracts with higher cost products within the Electronic Instruments segment; and • a $310, or 13.9%, increase in Engineering, selling and administrative from $2,236 in 2023 to $2,546 in 2024 primarily due to higher salaries, wages, and benefits within the Electronic Instruments and Corporate segments in 2024 compared to 2023.
Total Expenses Total expenses decreased $695, or 18.6%, from $3,727 in 2022 to $3,032 in 2023.
Total Expenses Total expenses increased $561, or 18.5%, from $3,032 in 2023 to $3,593 in 2024.
Treasury money market funds within the Merchant Investment and Corporate segments; and • a $5,131, or 108.1%, increase in Net gains (losses) from ($4,747) in 2022 to $384 in 2023 primarily due to realized gains on the related sales of mutual fund investments in 2023 versus realized losses on the sale of IronNet, Inc. in 2022 within the Corporate segment.
The increase was partially offset by a $389, or 101.3%, decrease in Net gains (losses) from $384 in 2023 to ($5) in 2024 primarily due to mark-to-market movements on Marketable securities in 2024 versus realized gains on the related sales of mutual fund investments in 2023 within the Corporate segment.
The backlog of unfilled orders includes amounts based on purchase orders, which we have determined are firm orders likely to be fulfilled primarily in the next 12 months. Order backlog is adjusted quarterly to reflect project cancellations, deferrals, revised project scope and cost, and sales of subsidiaries, if any.
Backlog As of December 31, 2024, our order backlog was $336, a increase of $193, compared to $143 as of December 31, 2023 primarily due to the timing and size of orders. The backlog of unfilled orders includes amounts based on purchase orders, which we have determined are firm orders likely to be fulfilled primarily in the next 12 months.
Federal Reserve raised the federal funds rate a total of four times throughout 2023, resulting in a range from 5.25% to 5.50% as of December 31, 2023. However, it is expected that the U.S. Federal Reserve will hold the federal funds rate steady or start to decrease it during 2024 to, among other things, control inflation.
Changing Interest Rates The U.S. Federal Reserve decreased the federal funds rate a total of three times throughout 2024, resulting in a range from 4.25% to 4.50% as of December 31, 2024. Through the date of filing of this Report, the U.S. Federal Reserve has maintained the federal funds rate between 4.25% to 4.50%. It is expected that the U.S.
The following items contributed to the overall increase: • a $73, or 4.4%, increase in Net sales from $1,655 in 2022 to $1,728 in 2023 primarily due to additional contracts won within the Electronic Instruments segment; • a $1,153, or 279.0%, increase in Net investment income from $413 in 2022 to $1,566 in 2023 primarily due to the redeployment of capital from investments in mutual funds into higher yielding U.S.
The following items contributed to the overall increase: • a $498, or 28.8%, increase in Net sales from $1,728 in 2023 to $2,226 in 2024 primarily due to additional contracts won within the Electronic Instruments segment; and • a $505, or 32.2%, increase in Net investment income from $1,566 in 2023 to $2,071 in 2024 primarily due to higher balances invested in United States Treasury money market funds within the Merchant Investment and Corporate segments.
Although inflation is expected to continue to decrease in 2024, the continued higher inflationary conditions may have an adverse impact on our manufacturing cost of sales along with engineering, selling and administrative expenses, as these costs could increase at a rate higher than our revenue. The U.S.
The increase in tariffs could have an adverse impact on Manufacturing cost of goods as these costs could increase at a higher rate than our revenues.
Income from Discontinued Operations, Net of Tax Income from discontinued operations decreased $1,913, or 101.5%, from $1,885 in 2022 to $28 in 2023 primarily due to the Separation of MtronPTI in October 2022 while remaining Separation costs were included in 2023.
Income from Discontinued Operations, Net of Tax Income (loss) from discontinued operations increased $28, or 100.0%, from ($28) in 2023 to $0 in 2024 primarily due to Separation costs incurred 2023.
The increase was partially offset by: • a $65, or 9.1%, increase in Engineering, selling and administrative from $715 in 2022 to $780 in 2023 primarily due to salary increases and bonuses accruals in 2023 partially offset by a temporary staff reduction.
The increase was partially offset by: • a $251, or 31.5%, increase in Manufacturing cost of sales from $796 in 2023 to $1,047 in 2024 primarily due to several contracts with higher cost products; and • a $156, or 20.0%, increase in Engineering, selling and administrative from $780 in 2023 to $936 in 2024 primarily due to higher salaries and benefits.
The following items contributed to the overall increase: • a $73, or 4.4%, increase in Net sales from $1,655 in 2022 to $1,728 in 2023 primarily due to additional contracts won in 2023; and • a $41, or 4.9%, decrease in Manufacturing cost of sales from $837 in 2022 to $796 in 2023 primarily due to several contracts for lower cost distribution products.
The increase was primarily driven by a $498, or 28.8%, increase in Net sales from $1,728 in 2023 to $2,226 in 2024 primarily due to additional contracts won in 2024.
Removed
Discontinued Operations In accordance with FASB ASC Topic 205, Presentation of Financial Statements ("ASC 205"), Subtopic 20 - Discontinued Operations, the Company determined that MtronPTI met the conditions for a discontinued operation and was recorded as such in the consolidated financial statements.
Added
For a discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022, refer to Part II, Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on April 1, 2024, which is available free of charge on the SEC's website at https://www.sec.gov and on our website at www.lglgroup.com.
Removed
The Company reports financial results for discontinued operations separately from continuing operations in order to distinguish the financial impact of the potential disposal transaction from ongoing operations. Prior financial information has been updated to reflect the required presentation for discontinued operations under ASC 205-20.
Added
Federal Reserve will continue to decrease the federal funds rate during 2025 to, among other things, control inflation; however, the timing of any future changes remains unclear. If interest rates continue to decline, the returns generated by our investments in U.S. Treasuries could be adversely impacted.
Removed
Refer to Note 3 – Discontinued Operations in the accompanying Notes to the Consolidated Financial Statements included in Item 8. Financial Statements and Supplementary Data of this Report for further details.
Added
Tariffs The current U.S. federal administration has proposed or imposed tariffs on certain products entering the United States imported from other countries. Additionally, foreign governments have imposed retaliatory tariffs on products exported from the United States.
Removed
Inflation and Changing Interest Rates Inflation in the United States decreased from 6.5% as of December 31, 2022 to 3.4% as of December 31, 2023, which is still above the U.S. Federal Reserve's long-term target of 2.0%.
Added
Income Tax Expense Income tax expense decreased $124, or 41.2%, from $301 in 2023 to $177 in 2024 primarily due to return-to-provision true ups in 2024 partially offset by the increase in Income from continuing operations discussed above.
Removed
Backlog As of December 31, 2023, our order backlog was $143, a decrease of $217, compared to $360 as of December 31, 2022 primarily due a large contract received in Q4 2022 that did not recur in Q4 2023.
Removed
Income Tax Expense (Benefit) Income tax expense (benefit) increased $1,830, or 119.7%, from ($1,529) in 2022 to $301 in 2023 primarily due to the increase in Net gains in 2023 compared Net losses in 2022.
Removed
The following items contributed to the overall decrease: • a $284, or 68.7%, increase in Net investment income from $413 in 2022 to $697 in 2023 primarily due to the redeployment of capital from investments in mutual funds into money market mutual funds invested in U.S.
Removed
Treasuries with higher yields; and • a $5,131, or 108.1%, increase in Net gains (losses) from ($4,747) in 2022 to $384 in 2023 primarily due to realized gains on the sales of related party mutual fund investments in 2023 versus realized losses on the sales of IronNet, Inc. in 2022. • a $935, or 43.0%, decrease in Engineering, selling and administrative from $2,175 in 2022 to $1,240 in 2023 primarily due to lower salaries and wages, share-based compensation expenses, and professional services and other consulting fees in 2023 compared to 2022.
Removed
Financing Activities Cash provided by financing activities was $0 in 2023 compared to cash used in financing activities of $859 in 2022, an increase of $859 primarily due to the Separation of MtronPTI and the payment of taxes related to the net share settlement of equity awards partially offset by the exercise of stock options during 2022, which did not occur in 2023.
Removed
Financial Statements and Supplementary Data of this Report. for further details of the transaction. 27 Table of Contents Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States.

Other LGL 10-K year-over-year comparisons