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What changed in LIGHTPATH TECHNOLOGIES INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of LIGHTPATH TECHNOLOGIES INC's 2024 and 2025 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 2025 report.

+315 added−309 removedSource: 10-K (2025-09-26) vs 10-K (2024-09-19)

Top changes in LIGHTPATH TECHNOLOGIES INC's 2025 10-K

315 paragraphs added · 309 removed · 207 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

68 edited+55 added−46 removed59 unchanged
Biggest changeWe do not depend on one facility and are able to move production in and out of China, which we believe creates a significant advantage by giving us supply chain continuity and an ability to adjust to customers’ geographical preferences. 12 Table of Contents Plastic molded aspheres and hybrid plastic/glass aspheric optics allow for high volume production, but primarily are limited to low-cost consumer products that do not place a high demand on performance (such as plastic lenses in disposable or mobile phone cameras).
Biggest changePlastic molded aspheres and hybrid plastic/glass aspheric optics allow for high volume production, but primarily are limited to low-cost consumer products that do not place a high demand on performance (such as plastic lenses in disposable or mobile phone cameras). Molded plastic aspheres appear in products that stress cost or weight as their measure of success over performance and durability.
During fiscal year 2024, we also formally announced availability of the first of our new materials licensed from the NRL, BDNL-4. BDNL-4 is unique because it has a negative thermo-optic coefficient, an attribute that is key in a-thermalization of optical systems.
During fiscal year 2024, we also formally announced availability of BDNL-4, the first of our new materials licensed from the NRL. BDNL-4 is unique because it has a negative thermo-optic coefficient, an attribute that is key in a-thermalization of optical systems.
The Orlando and Zhenjiang Facilities have anti-reflective and infrared coating equipment to coat our lenses in-house. ISP Latvia’s Riga Facility includes fully vertically integrated manufacturing processes to produce high precision infrared lenses and infrared lens assemblies, CNC grinding, conventional polishing, diamond turning, assemblies and state of the art metrology.
The Orlando and Zhenjiang Facilities have anti-reflective and infrared coating equipment to coat our lenses in-house. ISP Latvia’s Riga Facility includes fully vertically integrated manufacturing processes to produce high precision infrared lenses and infrared lens assemblies, CNC grinding, conventional polishing, diamond turning, assemblies, state of the art metrology, and infrared coatings.
We believe this process will create significant differentiators and value in this industry segment, and will further change the dynamics of this industry segment. Our molded infrared optics competes with products manufactured by Umicore N.V., Rochester Precision Optics, and a number of Asian and European manufacturers.
We believe this process will create significant differentiators and value in this industry, and will further change the dynamics of this industry. Our molded infrared optics competes with products manufactured by Umicore N.V., Rochester Precision Optics, and a number of Asian and European manufacturers.
We continue to enhance our website ( www.lightpath.com ), social media presence, email communications and our position as thought leaders in both optics and thermal imaging through these platforms. Trade Shows. We display our standard products, promote new innovative offerings and meet with industry influencers at a number of conferences each year throughout North America, Europe and Asia.
We continue to enhance our website (www.lightpath.com), social media presence, email communications and our position as thought leaders in both optics and thermal imaging through these platforms. Trade Shows. We display our standard products, promote new innovative offerings and meet with industry influencers and product users at a number of conferences each year throughout North America, Europe and Asia.
The importance of those materials, both from a supply chain liability perspective as well as from a technology leadership perspective has led to some significant collaborations and efforts together with various governmental groups, and in particular with the U.S. DoD. As announced on several separate occasions, LightPath has received funded development contracts from the U.S.
The importance of those materials, both from a supply chain resilience perspective as well as from a technology leadership perspective has led to some significant collaborations and efforts together with various governmental groups, and in particular with the U.S. DoD. As announced on several separate occasions, LightPath has received funded development contracts from the U.S.
Sales Team & Channel. We have aligned our sales engineering efforts to be account based and application focused. We have taken a more proactive approach to our direct selling efforts to increase our customer engagement and allow for expansion of our solutions within current customers by expanding relationships.
We have aligned our sales engineering efforts to be account based and application focused. We have taken a more proactive approach to our direct selling efforts to increase our customer engagement and allow for expansion of our solutions within current customers by expanding relationships.
Continually adding differentiating technologies is key to our strategy and we expect to continue to do so both organically and through acquisitions. Examples of this strategic approach can be found in many of our recent new product lines. We refer to these as LightPath 2.0 and 3.0, as that symbolizes the evolution of the Company.
Continually adding differentiating technologies is key to our strategy and we expect to continue to do so both organically and through acquisitions. 5 Table of Contents Examples of this strategic approach can be found in many of our recent new product lines. We refer to these as LightPath 2.0 and 3.0, as that symbolizes the evolution of the Company.
We incurred expenditures for new product development of approximately $2.4 million and $2.1 million during fiscal years 2024 and 2023, respectively. In some cases, our product and technology development is supported through billing of engineering services, such as non-recurring engineering (“NRE”) fees.
We incurred expenditures for new product development of approximately $3.1 million and $2.4 million during fiscal years 2025 and 2024, respectively. In some cases, our product and technology development is supported through billing of engineering services, such as non-recurring engineering (“NRE”) fees.
As described earlier in regards to product groups, our engineering services and assemblies and modules product groups are tied together, such that one (engineering services) mostly feeds the other group (assemblies and modules). As such, the competition for the two groups are also tied together and we will therefore address both groups together.
As described earlier in regards to product groups, our engineering services and assemblies and modules product groups (which includes cameras) are tied together, such that one (engineering services) mostly feeds the other group (assemblies and modules). As such, the competition for the two groups are also tied together and we will therefore address both groups together.
ISP Latvia’s Riga Facility consists of crystal growth, grinding, polishing, diamond turning, quality control departments and a mechanical shop to provide the departments with the necessary tooling. The grind and polish department has modern CNC equipment, lens centering and conventional equipment to perform spindle, double sided and continuous polishing operations.
ISP Latvia’s Riga Facility consists of grinding, polishing, diamond turning, quality control, infrared coating departments and a mechanical shop to provide the departments with the necessary tooling. The grind and polish department has modern CNC equipment, lens centering and conventional equipment to perform spindle, double sided and continuous polishing operations.
We expect infrared materials to continue to be an important technology in our portfolio · High precision molded lenses. Historically, precision molding of lenses is the key technology we have built upon.
We expect infrared materials to continue to be an important technology in our portfolio. 7 Table of Contents · High precision molded lenses. Historically, precision molding of lenses is the key technology we have built upon.
BD6 offers a lower-cost alternative to germanium, which we expect will benefit the cost structure of some of our current infrared products and allow us to expand our product offerings in response to the markets’ increasing requirement for low-cost infrared optics applications.
BD6 offers a lower-cost alternative to germanium, which is beneficial to the cost structure of some of our current infrared products and we expect it will allow us to continue to expand our product offerings in response to the markets’ increasing requirement for low-cost infrared optics applications.
As described above in Growth Strategy , we take these unique advantages and leverage them to become not only the supplier of choice, but also to be producer of the subsystems and complete imaging solutions, a much larger part of the system then we previously had as a component manufacturer.
As described above in Growth Strategy , we leverage these unique advantages to become not only the supplier of choice for materials and optics, but also to be producer of the subsystems and complete imaging solutions, a much larger part of the system than we previously had as a component manufacturer.
We developed this glass and melt it internally to produce our BlackDiamond glass, which has been trademarked, and is marketed as BD6. Historically, the majority of our thermal imaging products have been germanium-based, which is subject to market pricing and availability.
We also have the ability to manufacture chalcogenide glass from which we produce infrared lenses. We developed this glass and melt it internally to produce our BlackDiamond glass, which has been trademarked, and is marketed as BD6. Historically, the majority of our thermal imaging products have been germanium-based, which is subject to market pricing and availability.
It is estimated that over 67% of the global Germanium supply originates out of China, with Russia being the second largest supplier. Those two countries together control over 90% of the supply of Germanium and Gallium, two critical materials in infrared optics.
Our BlackDiamond materials offer multiple advantages over materials, such as Germanium. It is estimated that over 67% of the global Germanium supply originates out of China, with Russia being the second largest supplier. Those two countries together control over 90% of the supply of Germanium and Gallium, two critical materials in infrared optics.
We believe our facilities and planned expansions are adequate to accommodate our needs over the next year. Production and Equipment.
We believe our facilities and planned expansions are adequate to accommodate our needs over the next year. 12 Table of Contents Production and Equipment.
As a result, we market our products across a wide variety of customer groups, including laser systems manufacturers, laser OEM’s, infrared-imaging systems vendors, automotive OEMs, industrial laser tool manufacturers, telecommunications equipment manufacturers, medical instrumentation manufacturers and industrial measurement equipment manufacturers, government defense agencies, and research institutions worldwide.
As a result, we market our products across a wide variety of customer groups, including defense primes acting both as systems manufacturers and system integrators, laser OEM’s, automotive OEMs, industrial laser tool manufacturers, telecommunications equipment manufacturers, medical instrumentation manufacturers and industrial measurement equipment manufacturers, government defense agencies, and research institutions worldwide.
We have recently incorporated our product management function within our go-to-market team to provide both internal and external support for growth of our thermal imaging product solutions portfolio. We have also transitioned from a business unit focus to a unified global direct sales team that promotes the overall company portfolio and is standardized on a problem solving, needs analysis process.
Our product management function is part of our go-to-market team to provide both internal and external support for growth of our thermal imaging product solutions portfolio. We also have a unified global direct sales team that promotes the overall company portfolio and is standardized on a problem solving, needs analysis process. Sales Team & Channel.
However, aspheric lenses can be difficult and costly to machine. Our glass molding technology enables the production of both low and high volumes of aspheric optics, while still maintaining the highest quality at an affordable price.
Aspheric lenses simplify and shrink optical systems by replacing several conventional lenses. However, aspheric lenses can be difficult and costly to machine. Our glass molding technology enables the production of both low and high volumes of aspheric optics, while still maintaining the highest quality at an affordable price.
We completed the build out of our additional Orlando Facility space in August 2023. In addition to adding equipment or space at our manufacturing facilities, we add work shifts, as needed, to increase capacity and meet forecasted demand. We intend to monitor the capacity at our facilities, and will increase such space as needed.
In addition to adding equipment or space at our manufacturing facilities, we add work shifts, as needed, to increase capacity and meet forecasted demand. We intend to monitor the capacity at our facilities, and will increase such space as needed.
Overall, we anticipate moderate growth for our infrared components, particularly as our germanium alternatives continue to be adopted into new applications and designs. This product group also supports our assemblies and modules product group. Visible Components Product Group. Aspheric lenses are known for their optimal performance. Aspheric lenses simplify and shrink optical systems by replacing several conventional lenses.
Overall, we anticipate moderate growth for our infrared components, particularly as our germanium alternatives continue to be adopted into new applications and designs. This product group also supports our assemblies and modules product group. 9 Table of Contents Visible Components Product Group. Aspheric lenses are known for their optimal performance.
Such an approach builds on our unique, value-added technologies that we currently own, such as infrared materials, optical molding, fabrication, system design, and proprietary manufacturing technologies, along with technologies that we acquired through the Visimid acquisition such as video processing, infrared camera integration and more.
Such an approach builds on our unique, value-added technologies that we currently own, such as infrared materials, optical molding, fabrication, system design, and proprietary manufacturing technologies, along with technologies that we acquired through the Visimid acquisition, such as video processing, and technologies from the G5 Infrared acquisition, such as long range imaging using cooled midwave cameras.
The Riga Facility has a DSP-5 ITAR license and Technical Assistance Agreement in place that allows this facility to manufacture items with ITAR requirements. For more information regarding our facilities, please see
Department of State; included in this registration are the Plano, Texas and Hudson, New Hampshire facilities. The Riga Facility has a DSP-5 ITAR license and Technical Assistance Agreement in place that allows this facility to manufacture items with ITAR requirements. For more information regarding our facilities, please see
Some companies offer such services and the ability to deliver those designed units in production volumes, yet lack the breadth of knowledge and capabilities we have, both on the design side as well as the manufacturing.
Some companies offer such services and the ability to deliver those designed units in production volumes, yet lack the breadth of knowledge and capabilities we have, both on the design side as well as the manufacturing. We are able to leverage our vertical integration and detailed design on all aspects of the camera or assembly.
Along those lines, we continue to focus on developing, acquiring and licensing new, innovative capabilities and technologies in all of our engineering and manufacturing groups, including systems design and testing, optical fabrication of components, material production, optical coatings, and electro mechanical design and production such as the following: · Infrared Imaging Technologies. Our optical solutions strategy focuses around infrared imaging.
Such technologies allow us to develop solutions and sub systems that outperform other solutions in size, weight, power, and cost. 6 Table of Contents Along those lines, we continue to focus on developing, acquiring and licensing new, innovative capabilities and technologies in all of our engineering and manufacturing groups, including systems design and testing, optical fabrication of components, material production, optical coatings, and electro mechanical design and production such as the following: · Infrared Imaging Technologies.
Recent examples of such system level capabilities include our development of a novel, unique approach to shutterless imaging that we can apply to any microbolometer, development of a technology for early detection of flames and fires using a combination of optical technologies and sophisticated image processing algorithms, and, most recently, our integration of AI accelerator hardware directly into the video pipeline of our cameras.
Other recent examples of such system-level capabilities include our development of a novel, unique approach to shutterless imaging that we can apply to microbolometer based cameras, and development of a technology for early detection of flames and fires using a combination of optical technologies and sophisticated image processing algorithms. · Optical Assemblies and Testing .
Additionally, to design the best solution for a customer, we not only need to know what can be produced and how to design it, we also must have unique capabilities that differentiate our solutions. Such technologies allow us to develop solutions and sub systems that outperform other solutions in size, weight, power, and cost.
Additionally, to design the best solution for a customer, we not only need to know what can be produced and how to design it, we also must have unique capabilities that differentiate our solutions.
While the basis to our infrared technology originally centered around infrared materials and optics, it has become more than that. As we evolve from a pure optics company to an integrator and solution provider, our differentiating technologies are evolving. Those differentiating technologies are often times on a system or application level, rather than at the component or material level.
As we evolve from a pure optics company to an integrator and solution provider, our differentiating technologies are evolving. Those differentiating technologies are often at a system or application level, rather than at the component or material level.
ISP Latvia is a manufacturer of high precision optics and offers a full range of infrared products, including catalog and custom infrared optics.
ISP Latvia is a manufacturer of high precision optics and offers a full range of infrared products, including catalog and custom infrared optics. ISP Latvia’s manufacturing facility is located in Riga, Latvia (the “Riga Facility”).
Molding is the most consistent and economical way to produce aspheres and we have perfected this method to offer the most precise molded aspheric lenses available. Assemblies and Modules Product Group.
Molding is the most consistent and economical way to produce aspheres and we have perfected this method to offer the most precise molded aspheric lenses available. Assemblies and Modules Product Group. Our assemblies and modules product group is comprised of both optical assemblies such as lens systems, and cameras, both in the form of camera modules and complete camera systems.
Infrared Components Product Group. Our infrared optical components compete with optical products produced by Janos Technology LLC, Ophir Optronics Solutions Ltd. (a subsidiary of MKS Instruments, Inc.), Clear Align, II-VI, Inc. and a variety of Eastern European and Asian manufacturers. Infrared optical components can be produced using several techniques.
(a subsidiary of MKS Instruments, Inc.), Clear Align, II-VI, Inc. and a variety of Eastern European and Asian manufacturers. Infrared optical components can be produced using several techniques.
This transition, which is occurring both organically and through acquisitions, such as the July 2023 acquisition of Visimid Technologies, is positioning the Company for significant growth and higher profitability in coming years. 5 Table of Contents Understanding the shifts that are happening in the marketplace and the changes that come when a technology, like photonics, moves from being a specialty to being integrated into mainstream industries and applications, we redefined our strategic direction to provide our wide customer base with domain expertise in optics, and became their partner for the optical engine of their systems.
Understanding the shifts that are happening in the marketplace and the changes that come when a technology, like photonics, moves from being a specialty to being integrated into mainstream industries and applications, we redefined our strategic direction to provide our wide customer base with domain expertise in optics, and became their partner for the optical engine of their systems.
Our manufacturing is largely performed in our combined 58,500 square feet of production facilities in Orlando, Florida, in LPOIZ’s combined 55,000 square feet of production facilities in Zhenjiang, China, and in ISP Latvia’s 29,000 square feet of production facilities in Riga, Latvia. Effective June 1, 2024, LPOIZ reduced its facility to 39.500 square feet.
Our manufacturing is largely performed in our combined 58,500 square feet of production facilities in Orlando, Florida, G5 Infrared’s 27,000 square feet of production facilities in Hudson, New Hampshire, LPOIZ’s 39,500 square feet of production facilities in Zhenjiang, China, and ISP Latvia’s 29,000 square feet of production facilities in Riga, Latvia.
The Orlando, Zhenjiang, and Riga Facilities are ISO 9001:2015 certified. The Zhenjiang Facility is also ISO/TS 1649:2009 automotive certified for manufacturing of optical lenses and accessories. The Orlando Facility is International Traffic in Arms Regulations (“ITAR”) compliant and registered with the U.S. Department of State.
The Hudson, New Hampshire facility is ISO9001/AS9100 certified, which is tailored for aerospace, space and defense requirements. The Zhenjiang Facility is also ISO/TS 1649:2009 automotive certified for manufacturing of optical lenses and accessories. The Orlando Facility is International Traffic in Arms Regulations (“ITAR”) compliant and registered with the U.S.
This trend was recently amplified when we began making available our new, exclusive infrared glass materials, which enable customers to design systems that far exceed the performance of existing systems using conventional materials. Often, the new systems requested by customers require us to develop new assembly and testing capabilities.
As our reputation in the assemblies space grew, so did the level of complexity of assemblies and sub-systems customers request of us. This trend was recently amplified when we began making available our new, exclusive infrared glass materials, which enable customers to design systems that far exceed the performance of existing systems using conventional materials.
Our market messaging will look to inspire interest and promote engagement. 10 Table of Contents Sales Model & Structure. To align the organization to better serve our new solution strategy and for accountability of our key corporate objectives, we have made organizational changes designed to ensure customer satisfaction and operational efficiency.
Our market messaging will look to inspire interest and promote engagement. Sales Model & Structure. We have aligned our sales organization to best serve our solution strategy and to provide accountability of our key corporate objectives, while ensuring customer satisfaction and operational efficiency.
Other materials such as BDNL-8 have a thermo optic coefficient that is so close to zero, the standard test equipment cannot even measure it! The combination of providing an alternative to the use of Germanium and Gallium, together with distinct technological advantages, make these materials which we own exclusively, a very desirable and key element in every future infrared system.
The combination of providing an alternative to the use of Germanium and Gallium, together with distinct technological advantages, make these materials which we own exclusively, a very desirable and key element in every future infrared system.
The shift in strategy and product offerings also shifts the price range of our product portfolio and indirectly drives growth in and of itself. Historically, as a pure component Company, the average selling prices (“ASPs”) of those products were measured in single dollars or tens of dollars, whereas with the development of our assemblies product line (i.e.
Historically, as a pure component Company, the average selling prices (“ASPs”) of those products were measured in single dollars or tens of dollars, whereas with the development of our assemblies product line (i.e. LightPath 2.0), ASPs for those products are measured in hundreds of dollars.
Infrared imaging is a growing market, with technology that is evolving at a fast rate, and in which we have distinct advantages, based on our core technologies. Maintaining a technical leadership in infrared imaging and continually evolving and developing our technologies is key to maintaining, and to continue building and developing, a technical leadership, which translates to better products.
Our optical solutions strategy focuses around infrared imaging. Infrared imaging is a growing market, with technology that is evolving at a fast rate, and in which we have distinct advantages, based on our core technologies.
In the longer term, we have identified capabilities and technologies that could be important differentiators, including, for example, optical detectors and active optical components such as lasers, motion systems, and more.
In the longer term, we have identified capabilities and technologies that could be important differentiators, including, for example, optical detectors and active optical components such as lasers, motion systems, and more. The aggregation of such unique technologies is intended to allow us to differentiate our optical solutions and provide customers with products that are tailored exactly to their needs.
We expect this shift to start favorably impacting our financial results in future periods. Organizational Alignment Along with the development of a new strategic direction, we are focused on the execution of a complementary strategic plan.
Organizational Alignment Along with the development of a new strategic direction, we are focused on the execution of a complementary strategic plan.
Such products are available from many vendors, including those that offer a large catalog of standard assemblies, those that offer standard cameras with no customization, and others. In standard products, the competition is very different, and customers must even compromise on performance, or adjust their system requirements to use a standard off the shelf product.
(a subsidiary of MKS Instruments, Inc.), Controp Precision Technologies Ltd., Teledyne FLIR and Clear Align LLC, those that offer standard cameras with no customization, and others. In standard products, the competition is very different, and customers must either compromise on performance, or adjust their system requirements to use a standard off the shelf product.
Optics and photonics require multidisciplinary skills, including physics, mechanical engineering, material sciences, electrical engineering, and chemistry, among others. This is part of what makes using photonics so complicated, and at the same time part of what we see as the opportunity.
This is part of what makes using photonics so complicated, and at the same time part of what we see as the opportunity.
This coating is currently available only at a small number of vendors, and is an example of a capability that we believe gives us a competitive advantage by allowing us to design better optical solutions. 8 Table of Contents New Product Development Consistent with our strategic plan, we have focused our development efforts in fiscal years 2023 and 2024 on products, technologies and capabilities that allow us to provide better solutions using the most optimal technology for each customer and with alignment to customer product lifecycle.
New Product Development Consistent with our strategic plan, we have focused our development efforts in fiscal years 2024 and 2025 on products, technologies and capabilities that allow us to provide better solutions using the most optimal technology for each customer and with alignment to customer product lifecycle.
Knowing that our materials are produced domestically and have a secure supply chain has been driving sales growth in our business and in particular in the defense sector. In addition to providing an alternative to the use of Germanium, the new materials we licensed exclusively from the NRL have unique technical advantages compared to traditional materials.
Knowing that our materials are produced domestically and have a secure supply chain has been driving sales growth in our business and in particular in the defense sector.
As part of our product development and research and development efforts, we have numerous employees with engineering and related advanced degrees located in our facilities in the U.S., China and Latvia. Our facilities in Orlando, Florida, Plano, Texas, and Zhenjiang, China are located in or near industrial technology campuses with substantial access to optical industry constituencies, including a major university.
As part of our product development and research and development efforts, we have numerous employees with engineering and related advanced degrees located in our facilities in the U.S., China and Latvia.
Sam Rubin, joined the Company in 2020, we have been developing a new strategy that will transition the Company from a pure component manufacturer to a supplier of imaging subsystems and systems.
Sam Rubin, joined the Company in 2020, we have been developing a new strategy that will transition the Company from a pure component manufacturer to a supplier of imaging subsystems and systems. Our strategic direction, which is based on our core technological differentiators such as our BlackDiamond glass (“BlackDiamond”) and proprietary molding technologies, significantly increases our value add to customers.
These trade shows provide us an opportunity to further expand our brand, network to enhance business relationships and gain valuable insight into technology trends in our target markets.
In addition to attending industry shows in the U.S., LightPath attends and supports numerous other conferences in the EU as well as Asia. These trade shows provide LightPath with an opportunity to further expand our brand, network to enhance business relationships and gain valuable insight into technological trends in our target markets.
ISP Latvia’s manufacturing facility is located in Riga, Latvia (the “Riga Facility”). 4 Table of Contents Visimid In July 2023, we acquired Liebert Consulting, LLC, dba Visimid Technologies (“Visimid”), an engineering and design firm, specializing in thermal imaging, night vision and internet of things (“IOT”) applications. Visimid provides design and consulting services for U.S.
Visimid In July 2023, we acquired Liebert Consulting, LLC, dba Visimid Technologies (“Visimid”), an engineering and design firm, specializing in thermal imaging, night vision and internet of things (“IOT”) applications. Visimid provides design and consulting services for U.S. Department of Defense (“DoD”) contractors, commercial and industrial customers, and original equipment manufacturers (“OEMs”) for original new products.
Over the last few years LightPath has been investing in developing and commercializing our BlackDiamond glasses (which are labeled with a “BD” prefix) as alternatives to using Germanium. BD2, our first glass, has been in production for nearly 15 years.
Traditionally, infrared applications have only a small number of materials, almost all of which are crystal based, with Germanium being the most commonly used material. Over the last few years LightPath has been investing in developing and commercializing our BlackDiamond glasses (which are labeled with a “BD” prefix) as alternatives to using Germanium.
Molding is an excellent alternative to traditional lens processing methods particularly where volume and repeatability is required. We offer germanium, silicon or zinc selenide aspheres and spherical lenses, which are manufactured by diamond turning. This manufacturing technique allows us to offer larger lens sizes and the ability to use other optical materials that cannot be effectively molded.
Utilizing precision molded aspheric optics significantly reduces the number of lenses required for typical thermal imaging systems and the cost to manufacture these lenses. Molding is an excellent alternative to traditional lens processing methods particularly where volume and repeatability is required. We offer Germanium, silicon or zinc selenide aspheres and spherical lenses, which are manufactured by diamond turning.
Following a two-year effort to transition those new materials into production, we began making available for commercial use some of those new materials, starting with the introduction of BDNL-4 in April 2024. Our BlackDiamond materials offer multiple advantages over materials, such as Germanium, that have been traditionally used up until now. Germanium is a key material used in infrared optics.
In December 2021 we secured an exclusive license from the U.S. government for the Chalcogenide materials that have been developed by the NRL. Following a two-year effort to transition those new materials into production, we began making available for commercial use some of those new materials, starting with the introduction of BDNL-4 in April 2024.
Typically, customers approach us and request that we develop new products or applications utilizing our existing products to fit their particular needs or specifications. The purpose of those engineering services that we offer is not only to provide purely engineering services for a customer, but also to engineer new products which we later manufacture for the customer.
The purpose of those engineering services that we offer is not only to provide purely engineering services for a customer, but also to engineer new products which we later manufacture for the customer. The timing and extent of any such product development requests are unpredictable and outside of our control. Sales and Marketing Marketing .
Molded plastic aspheres appear in products that stress cost or weight as their measure of success over performance and durability. Our low-cost structure allows us to compete with these lenses based on higher performance and durability from our glass lenses at only a small premium in price.
Our low-cost structure allows us to compete with these lenses based on higher performance and durability from our glass lenses at only a small premium in price. We do not compete in the market for plastic lenses unless a glass substitution presents a viable alternative. Manufacturing Facilities .
Our molded infrared optics technology enables high performance, cost-effective infrared aspheric lenses that do not rely on traditional diamond turning or lengthy polishing methods. Utilizing precision molded aspheric optics significantly reduces the number of lenses required for typical thermal imaging systems and the cost to manufacture these lenses.
Advances in chalcogenide materials have enabled compression molding for mid-wave (“MWIR”) and long-wave (“LWIR”) optics in a process similar to precision molded lenses. Our molded infrared optics technology enables high performance, cost-effective infrared aspheric lenses that do not rely on traditional diamond turning or lengthy polishing methods.
Our numerous manufacturing capabilities allow us to meet complex optical challenges that demand more exotic optical substrate materials that are non-moldable, as well as larger size optics. 9 Table of Contents We also have the ability to manufacture chalcogenide glass from which we produce infrared lenses.
This manufacturing technique allows us to offer larger lens sizes and the ability to use other optical materials that cannot be effectively molded. Our numerous manufacturing capabilities allow us to meet complex optical challenges that demand more exotic optical substrate materials that are non-moldable, as well as larger size optics.
LightPath 2.0), ASPs for those products are measured in hundreds of dollars. When we added cameras, subsystems and systems (LightPath 3.0), ASPs for those products are measured in thousands of dollars, and as much as $30,000 for our most advanced and recent version of the Mantis camera.
When we added cameras, subsystems and systems (LightPath 3.0), ASPs for those products are measured in tens of thousands, and sometimes hundreds of thousands of dollars. We expect this shift to start favorably impacting our financial results in future periods.
The diamond turning department has numerous diamond-turning machines accompanied with the latest metrology tools. During fiscal year 2021, we began adding infrared coating capabilities at the Riga Facility, which was completed the second half of fiscal year 2022. The quality control department contains numerous inspection stations with various equipment to perform optical testing of finished optics.
The diamond turning department has numerous diamond-turning machines accompanied with the latest metrology tools. The infrared coating department is equipped with multiple anti-reflective and wear resistant coating chambers. The quality control department contains numerous inspection stations with various equipment to perform optical testing of finished optics. The Orlando, Zhenjiang, and Riga Facilities are ISO 9001:2015 certified.
Our infrared product group is comprised of both molded and turned infrared lenses and assemblies using a variety of infrared glass materials. This product group also includes both conventional and CNC ground and polished lenses. Advances in chalcogenide materials have enabled compression molding for mid-wave (“MWIR”) and long-wave (“LWIR”) optics in a process similar to precision molded lenses.
Our infrared product group is comprised of both molded and turned infrared lenses using a variety of infrared glass materials. This product group also includes revenue from sales of our BlackDiamond glass materials, and G5’s optical component and coating business. This product group includes both conventional and CNC ground and polished lenses.
As we continue our efforts to be viewed as a solutions provider and thought leader in the industries we serve, we continue to participate in these events, exhibiting and educating our current and potential customers. Competition The markets in which we compete are highly competitive and highly fragmented in their needs.
As we continue our efforts to be viewed as a solutions provider and thought leader in the industries we serve, we continue to participate in these events, exhibiting and educating our current and potential customers. 10 Table of Contents Competition As a vertically integrated company, with offerings ranging from raw materials (glass), to semi-finished goods (lenses) and finished goods (assemblies and cameras), we face competition in all of these levels of the supply chain.
While still positioned as a component provider, we expanded our addressable market with the acquisition of ISP, a manufacturer of infrared optical components, in December 2016.
We expanded our addressable market with the acquisition of ISP (as defined below), a manufacturer of infrared optical components, in December 2016. Since 2020, our strategy has been to move up the value chain by producing optical assemblies, modules and simple cameras.
Each such new capability and technique we develop for such projects become another capability and technique we can market and offer to other customers. We expect this will create self-perpetuating development opportunities as our new capabilities and techniques bring in more business that may, again, require continuing development of new techniques. 7 Table of Contents · Materials .
We expect this will create self-perpetuating development opportunities as our new capabilities and techniques bring in more business that may, again, require continuing development of new techniques. · Materials . Materials play an important role in providing design flexibility and allow tradeoffs between optical performance, weight, and performance in varying conditions.
So far in 2024, we have participated in the SHOT Show in Las Vegas, the largest professional event for the sport shooting, hunting and outdoor industry in North America; SPIE Photonics West in San Francisco; SPIE DCS, AUVSI Xponential which promotes emerging technologies supporting autonomous vehicles, drones and robotics; and numerous other conferences in the EU as well as Asia.
So far in 2025, we have participated at the Consumer Electronics Show (CES) and the SHOT Show in Las Vegas. Shot Show is the largest professional event for the sport shooting, hunting and outdoor industry in North America.
The aggregation of such unique technologies is intended to allow us to differentiate our optical solutions and provide customers with products that are tailored exactly to their needs. 6 Table of Contents Technologies We believe that to be the preferred partner to fulfill the photonics needs of our customers, domain expertise and differentiating technologies in photonics are key elements.
Technologies We believe that to be the preferred partner to fulfill the photonics needs of our customers, domain expertise and differentiating technologies in photonics are key elements. Optics and photonics require multidisciplinary skills, including physics, mechanical engineering, material sciences, electrical engineering, and chemistry, among others.
During the first couple of years of implementing our new strategic direction, our team expanded our optical assemblies business and capabilities considerably. As our reputation in this segment grew, so did the level of complexity of assemblies and sub systems customers request of us.
When we began shifting our focus from optical components to solutions, doing more optical assemblies was a natural first step for us. During the first couple of years of implementing our new strategic direction, our team expanded our optical assemblies business and capabilities considerably.
A commonality among these industries is the use of photonics as an enabling technology in their products. Over the last ten years we have witnessed a pivotal shift in the adoption of photonics in new applications.
Over the last ten years we have witnessed a pivotal shift in the adoption of infrared photonics in new applications. In the early days of the technology it was a specialty application, developed by and between optical engineers and required highly specialized technical knowledge.
We are able to leverage our vertical integration and detailed design on all aspects of the camera or assembly. 11 Table of Contents The second type of competition we see is standard products, which can be available to the customer without any customization.
The second type of competition we see is standard products, which can be available to the customer without any customization. Such products are available from many vendors, including those that offer a large catalog of standard assemblies such as Ophir Optronics Solutions Ltd.
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Department of Defense (“DoD”) contractors, commercial and industrial customers, and original equipment manufacturers (“OEMs”) for original new products. Visimid’s core competency is developing and producing custom thermal and night vision cores. Visimid’s facility is located in Plano, Texas. Industry We and our customers support a wide range of industries, including automotive, telecommunications, defense, medical, bio-technology, industrial, consumer goods and more.
Added
The acquisition of Visimid (as defined below) in 2023 and the acquisition of G5 Infrared (as defined below) in 2025 were completed to enhance our abilities on cameras and sensors and speed our movement up the value chain in line with our strategy of value-add infrared systems.
Removed
In the early days of the photonics industry the technology was a specialty, which was both expensive and required highly specialized technical knowledge, leading to low adoption of the technology into industries other than defense and high-end medical applications.
Added
Visimid’s core competency is developing and producing custom thermal and night vision cores. Visimid’s facility is located in Plano, Texas. G5 Infrared In February 2025, we acquired G5 Infrared LLC (“G5 Infrared”), a New Hampshire limited liability company.
Removed
Starting with the commercialization of fiber optic communication, and further driven by significant cost reduction in key technologies such as sensors and lasers, the adoption of the technology into more industries and applications began rapidly growing.
Added
G5 Infrared is a leading vertically-integrated manufacturer of high- performance infrared camera systems and imaging solutions, specializing in advanced thermal imaging technology and long-range mission-critical detection solutions.
Removed
Our new strategic direction, which is based on our core technological differentiators such as our BlackDiamond glass (“BlackDiamond”) and proprietary molding technologies, significantly increases our value add to customers.
Added
G5 Infrared’s existing revenue and future growth pipeline are driven by established multi-year contracts and multiple defense programs of record in shipboard long-range surveillance, border security, and counter unmanned aerial systems (“C-UAS”) systems, as well as recurring federal, naval, and law enforcement programs.
Removed
LightPath 2.0 refers to our assemblies and LightPath 3.0 refers to our cameras and related subsystems and systems. Our Mantis camera represents an innovation in imaging in both mid wave and long wave simultaneously, something made possible by our exclusive BlackDiamond materials licensed from the U.S.
Added
Additionally, G5 Infrared is an industry-leading provider of cutting-edge advanced infrared coatings, including for materials such as LightPath’s BlackDiamond (“BlackDiamond”) glass. G5 Infrared operates from a state-of-the-art manufacturing facility in Hudson, New Hampshire. We believe that this acquisition strengthens LightPath’s position as a leader in infrared imaging by expanding the Company’s portfolio to include cooled infrared cameras.
Removed
Naval Research Laboratories (the “NRL”), and which has opened the door into markets such as fire detection and industrial furnace and boiler inspection. The camera system we are developing as a sub system for Lockheed Martin is based on a unique and proprietary imaging technology.
Added
The combination of LightPath and G5 Infrared creates a more robust, vertically-integrated solutions provider. 4 Table of Contents Industry We and our customers support a wide range of industries, including defense, public safety, industrial, commercial, telecom, medical and more. A commonality among these industries is the use of photonics as an enabling technology in their products.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe successful commercialization of our products and technologies will depend in part on our ability to meet obligations under contracts with respect to the products and related development requirements.
Biggest changeThe successful commercialization of our products and technologies will depend in part on our ability to meet obligations under contracts with respect to the products and related development requirements. The failure of these business relationships will limit the commercialization of our products and technologies, which will have an adverse impact on our business development and our ability to generate revenues.
Any potential intellectual property litigation could also force us to do one or more of the following, any of which could harm our business and adversely affect our financial condition and results of operations: · stop selling, incorporating or using our products that use the disputed intellectual property; · obtain from third parties a license to sell or use the disputed technology, which license may not be available on reasonable terms, or at all; or · redesign our products that use the disputed intellectual property. 22 Table of Contents Item 1B.
Any potential intellectual property litigation could also force us to do one or more of the following, any of which could harm our business and adversely affect our financial condition and results of operations: · stop selling, incorporating or using our products that use the disputed intellectual property; · obtain from third parties a license to sell or use the disputed technology, which license may not be available on reasonable terms, or at all; or · redesign our products that use the disputed intellectual property. 22 Table of Contents
We currently purchase several key materials (including Germanium) or have outside vendors perform process steps, such as lens coatings, used in or during the manufacture of our products from single or limited source suppliers.
We currently purchase several key materials (including Germanium and sensors) or have outside vendors perform process steps, such as lens coatings, used in or during the manufacture of our products from single or limited source suppliers.
Any material impacts to our customers could have a material adverse effect on our business and operating results. We depend on single or limited source suppliers for some of the key materials or process steps in our products, making us susceptible to supply shortages, poor performance, or price fluctuations.
Any material impacts to our customers could have a material adverse effect on our business and operating results. 16 Table of Contents We depend on single or limited source suppliers for some of the key materials or process steps in our products, making us susceptible to supply shortages, poor performance, or price fluctuations.
If we are unable to continue to expand our sales operations globally, we may not be able to continue to increase market awareness or sales of our products, which would adversely affect our revenues, results of operations, and financial condition. If we are unable to effectively compete, our business and operating results could be negatively affected.
If we are unable to continue to expand our sales operations globally, we may not be able to continue to increase market awareness or sales of our products, which would adversely affect our revenues, results of operations, and financial condition. 19 Table of Contents If we are unable to effectively compete, our business and operating results could be negatively affected.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report on Form 10-K for an additional discussion of these and other related factors that affect our operations and/or financial performance. Risks Related to Our Business and Financial Results We have a history of losses.
Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report on Form 10-K for an additional discussion of these and other related factors that affect our operations and/or financial performance. 15 Table of Contents Risks Related to Our Business and Financial Results We have a history of losses.
We are subject to the following risks, among others: · greater difficulty in accounts receivable collection and longer collection periods; · potentially different pricing environments and longer sales cycles; · the impact of recessions in economies outside the U.S.; · the impact of high, sustained inflation; · unexpected changes in foreign regulatory requirements; · the burdens of complying with a wide variety of foreign laws and different legal standards; · certification requirements; · reduced protection for intellectual property rights in some countries; · difficulties in managing the staffing of international operations, including labor unrest and current and changing regulatory environments; · potentially adverse tax consequences, including the complexities of foreign value-added tax systems, restrictions on the repatriation of earnings, and changes in tax rates; · price controls and exchange controls; · government embargoes or foreign trade restrictions; · imposition of duties and tariffs and other trade barriers; · import and export controls; · transportation delays and interruptions; · terrorist attacks and security concerns in general; and · political, social, economic instability and disruptions. 16 Table of Contents Russia’s ongoing conflict with Ukraine may continue to disrupt our supply chain .
We are subject to the following risks, among others: · greater difficulty in accounts receivable collection and longer collection periods; · potentially different pricing environments and longer sales cycles; · the impact of recessions in economies outside the U.S.; · the impact of high, sustained inflation; · unexpected changes in foreign regulatory requirements; · the burdens of complying with a wide variety of foreign laws and different legal standards; · certification requirements; · reduced protection for intellectual property rights in some countries; · difficulties in managing the staffing of international operations, including labor unrest and current and changing regulatory environments; · potentially adverse tax consequences, including the complexities of foreign value-added tax systems, restrictions on the repatriation of earnings, and changes in tax rates; · price controls and exchange controls; · government embargoes or foreign trade restrictions; · imposition of duties and tariffs and other trade barriers; · import and export controls; · transportation delays and interruptions; · terrorist attacks and security concerns in general; and · political, social, economic instability and disruptions.
We manufacture our products at manufacturing facilities located in Orlando, Florida; Riga, Latvia; and Zhenjiang, China. Our revenues are dependent upon the continued operation of these facilities. The Orlando Facility is subject to a lease that expires March 31, 2034.
We manufacture our products at manufacturing facilities located in Orlando, Florida; Hudson, New Hampshire; Riga, Latvia; and Zhenjiang, China. Our revenues are dependent upon the continued operation of these facilities. The Orlando Facility is subject to a lease that expires March 31, 2034. The Hudson, New Hampshire facility lease expires in November 2026.
We may be affected by political and other risks as a result of our sales to international customers and/or our sourcing of materials from international suppliers. In fiscal year 2024, 39% of our net revenue was derived from sales outside of the U.S., with 94% of our foreign sales derived from customers in Europe and Asia.
We may be affected by political and other risks as a result of our sales to international customers and/or our sourcing of materials from international suppliers. In fiscal year 2025, 38% of our net revenue was derived from sales outside of the U.S., with 91% of our foreign sales derived from customers in Europe and Asia.
In fiscal year 2023, we had sales to three customers that comprised an aggregate of approximately 24% of our annual revenue, with one customer at 11% of our sales, another customer at 7% of our sales, and the third customer at 6% of our sales.
In fiscal year 2025, we had sales to three customers that comprised an aggregate of approximately 23% of our annual revenue, with one customer at 9% of our sales, another customer at 7% of our sales, and the third customer at 6% of our sales.
The sale of our products requires prolonged sales and marketing efforts targeted at several key departments within our prospective customers’ organizations and often involves our executives, personnel, and specialized systems and applications engineers working together. Currently, our direct sales and marketing organization is somewhat limited.
If we do not expand our sales and marketing organization, our revenues may not increase. The sale of our products requires prolonged sales and marketing efforts targeted at several key departments within our prospective customers’ organizations and often involves our executives, personnel, and specialized systems and applications engineers working together. Currently, our direct sales and marketing organization is somewhat limited.
We will likely need to raise additional financing to repay our outstanding indebtedness of approximately $4.2 million, as of August 2024, and to fund our current level of operations as well as our strategic plan. Additional financing will be required in order for us to take advantage of acquisition opportunities that we may identify.
We will likely need to raise additional financing to repay our outstanding indebtedness of approximately $5.6 million, as of June 30, 2025, and to fund our current level of operations as well as our strategic plan. Additional financing will be required in order for us to take advantage of acquisition opportunities that we may identify.
In fiscal year 2023, 50% of our net revenue was derived from sales outside of the U.S., with 93% of our foreign sales derived from customers in Europe and Asia.
In fiscal year 2024, 39% of our net revenue was derived from sales outside of the U.S., with 94% of our foreign sales derived from customers in Europe and Asia.
A significant portion of our cash is generated and held outside of the U.S. The risks of maintaining significant cash abroad could adversely affect our cash flows and financial results. During fiscal year 2024, greater than 25% of our cash was held abroad.
A significant portion of our cash is generated and held outside of the U.S. The risks of maintaining significant cash abroad could adversely affect our cash flows and financial results. As of June 30, 2025, approximately 25% of our cash was held abroad.
As of June 30, 2024, LPOIZ had approximately $1.6 million in retained earnings available for repatriation, based on earnings accumulated through December 31, 2023, the end of the most recent statutory tax year, that remained undistributed as of June 30, 2024. LPOI did not have any earnings available for repatriation as of the date of the merger with LPOIZ.
As of June 30, 2025, LPOIZ had approximately $0.4 million in retained earnings available for repatriation, based on earnings accumulated through December 31, 2024, the end of the most recent statutory tax year, that remained undistributed as of June 30, 2025.
In fiscal years 2024 and 2023, we recognized net gains of approximately $73,000 and losses of $37,000 on foreign currency transactions, respectively.
In fiscal years 2025 and 2024, we recognized net losses of approximately $0.1 million and gains of approximately $0.1 million on foreign currency transactions, respectively.
Our business, financial condition, and results of operations could be adversely affected by continued disruption and global consequences stemming from the conflict.
Russia’s ongoing conflict with Ukraine may continue to disrupt our supply chain. Our business, financial condition, and results of operations could be adversely affected by continued disruption and global consequences stemming from the conflict.
Furthermore, imposition of tariffs could cause a decrease in the sales of our products to customers located in China or other customers selling to Chinese end users, which would directly impact our business. It remains unclear how tax or trade policies, tariffs, or trade relations may change or evolve with changes in the U.S. Presidential Administration.
Furthermore, imposition of tariffs could cause a decrease in the sales of our products to customers located in China or other customers selling to Chinese end users, which would directly impact our business.
The institution of trade tariffs both globally and between the U.S. and China specifically carries the risk of negatively impacting China’s overall economic condition, which could have negative repercussions for us.
We are currently unable to predict whether such changes will occur and, if so, the ultimate impact on our business. The institution of trade tariffs both globally and between the U.S. and China specifically carries the risk of negatively impacting China’s overall economic condition, which could have negative repercussions for us.
Perceived or actual changes in U.S. trade policy could trigger retaliatory actions by affected countries, which could impose restrictions on our ability to do business in or with affected countries or prohibit, reduce, or discourage purchases of our products by foreign customers, leading to increased costs of products that contain our components, increased costs of manufacturing our products, and higher prices of our products in foreign markets.
Discussions remain ongoing in respect of certain trade restrictions and tariffs on imports, as well as retaliatory actions by affected countries, which could impose restrictions tariffs enacted in response to such actions, which could prohibit, reduce, or discourage purchases of our products by foreign customers, leading to increased costs of products that contain our components, increased costs of manufacturing our products, and higher prices of our products in foreign markets.
International tariffs, including tariffs applied to goods traded between the U.S. and China, could materially and adversely affect our business and results of operations .
International tariffs, including tariffs applied to goods traded between the U.S. and China, could materially and adversely affect our business and results of operations . The United States has recently enacted and proposed to enact significant new tariffs affecting certain products exported by a number of U.S. trading partners, including China.
Our operations are vulnerable to interruption by fire, hurricane winds and rain, earthquakes, electric power loss, telecommunications failure, and other events beyond our control.
The Riga Facility is subject to two leases which expire in December 2030, and the Zhenjiang Facility is subject to one lease that expires in December 2027. Our operations are vulnerable to interruption by fire, hurricane winds and rain, earthquakes, electric power loss, telecommunications failure, and other events beyond our control.
We may incur losses in the future if we do not achieve sufficient revenue to maintain profitability, or if we continue to incur unusual costs.
We reported net losses for several consecutive fiscal years. As of June 30, 2025, we had an accumulated deficit of approximately $231 million. We may incur losses in the future if we do not achieve sufficient revenue to maintain profitability, or if we continue to incur unusual costs.
In fiscal year 2024, sales of infrared components represented approximately 44% of our net revenues, sales of visible components represented approximately 33% of our net revenues, sales of assemblies and modules represented 14% of our revenues, and engineering services represented 6% of our revenues.
The addition of G5 Infrared in February 2025 further expands our product offerings. In fiscal year 2025, sales of infrared components represented approximately 38% of our net revenues, sales of visible components represented approximately 32% of our net revenues, sales of assemblies and modules represented 21% of our revenues, and engineering services represented 9% of our revenues.
Removed
We reported net losses of $8.0 million, $4.0 million, $3.5 million and $3.2 million for fiscal years 2024, 2023, 2022 and 2021, respectively. As of June 30, 2024, we had an accumulated deficit of approximately $215.8 million.
Added
On December 3, 2024 China further announced an immediate export ban on Germanium, Gallium and antimony to the United States and for any dual use or military use applications. We have taken proactive steps to minimize the orders we accept for Germanium products and therefore minimize our exposure to this risk.
Removed
As a purchaser of Germanium, we are mostly able to purchase the Germanium we need, though the availability of it and ability to receive export licenses varies between vendors. From our customers we know that some of them are able to import Germanium from China, while some get refused for a license.
Added
Additionally, President Trump has directed various federal agencies to further evaluate key aspects of U.S. trade policy and there has been ongoing discussion, commentary and actions regarding potential significant changes to U.S. trade policies, treaties and tariffs.
Removed
Yet, even those that are able to receive a license experience material lead times that are significantly prolonged because of the process to get a license, and prices that as of August 2024, were 60% higher than the same time last year.
Added
In 2025, the Trump administration indicated that the United States would impose retaliatory measures with respect to jurisdictions that have or are likely to put in place tax rules that are extraterritorial or disproportionately affect U.S. companies. The likelihood of these changes being enacted or implemented is unclear.
Removed
In recent years, the U.S. government took certain actions that led to, and may lead to, further changes to U.S. and international trade policies, including the imposition of tariffs affecting certain products exported by a number of U.S. trading partners, including China.
Added
In light of these events, there continues to exist significant uncertainty about the future relationship between the U.S. and other countries with respect to such trade policies, treaties and tariffs.
Removed
The failure of these business relationships will limit the commercialization of our products and technologies, which will have an adverse impact on our business development and our ability to generate revenues. 19 Table of Contents If we do not expand our sales and marketing organization, our revenues may not increase.
Added
These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the United States.
Removed
The Riga Facility is subject to two leases which expire in December 2030, and the Zhenjiang Facility is subject to one lease that expires in December 2024. We intend to renew the lease for the Zhenjiang Facility for at least a one-year term.
Added
Any of these factors could depress economic activity and restrict our access to suppliers or customers and have a material adverse effect on their business, financial condition and results of operations, which in turn would negatively impact us.
Added
We have operations, customers and suppliers in the U.S., China and other countries and regularly import and export goods and services to and from those countries. An increase in tariffs could have a material impact on our costs and on the demand for our products and services.
Added
On September 15, 2025, we announced a private placement pursuant to a securities purchase agreement, whereby we raised $8.0 million in gross proceeds to fund the working capital needs of our existing operations and for general corporate purposes.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe following schedule presents the approximate square footage of our offices and facilities as of June 30, 2024: Location Square Feet Commitment and Use Orlando, Florida 58,500 Leased; 2 suites used for corporate headquarters offices, manufacturing, and research and development Riga, Latvia 29,000 Leased; 3 suites used for administrative offices and manufacturing Zhenjiang, China 39,500 Leased; 1 building used for manufacturing Our territorial sales personnel maintain an office from their homes to serve their geographical territories.
Biggest changeThe following schedule presents the approximate square footage of our offices and facilities as of June 30, 2025: Location Square Feet Commitment and Use Orlando, Florida 58,500 Leased; 2 suites used for corporate headquarters offices, manufacturing, and research and development Hudson, New Hampshire 27,000 Leased; 1 suite used for administrative offices, engineering and manufacturing Plano, Texas 3,000 Leased; 1 suite used for engineering and manufacturing Riga, Latvia 29,000 Leased; 3 suites used for administrative offices and manufacturing Zhenjiang, China 39,500 Leased; 1 building used for manufacturing Our territorial sales personnel maintain an office from their homes to serve their geographical territories.
Cybersecurity Governance Our executive team and Board of Directors are actively involved in overseeing cybersecurity risks. The executive team and the CIO oversee the Company's information security efforts and cybersecurity governance. This team regularly reviews our cybersecurity posture and any significant incidents that have occurred.
Cybersecurity Governance Our executive team and Board of Directors are actively involved in overseeing cybersecurity risks. The executive team and the CIO oversee the Company's information security efforts and cybersecurity governance. This team regularly reviews our cybersecurity posture and any incidents that have occurred.
For additional information regarding our facilities, please see Item 1. Business in this Annual Report on Form 10-K. For additional information regarding leases, see Note 13, Leases , to the Notes to the Consolidated Financial Statements to this Annual Report on Form 10-K. Item 3. Legal Proceedings.
For additional information regarding our facilities, please see Item 1. Business in this Annual Report on Form 10-K. For additional information regarding leases, see Note 13, Leases , to the Notes to the Consolidated Financial Statements to this Annual Report on Form 10-K.
Our corporate headquarters are located in Orlando, Florida and our manufacturing facilities are primarily located in Zhenjiang, China and Riga, Latvia.
Our corporate headquarters office and manufacturing facility is located in Orlando, Florida and our additional manufacturing and office facilities are located in Hudson, New Hampshire, Plano, Texas, Zhenjiang, China and Riga, Latvia.
Removed
From time to time, we are involved in various legal actions arising in the normal course of business. We currently have no material legal proceeding to which we are a party to or to which our properties are subject to and, to the best of our knowledge, no material adverse legal activity is anticipated or threatened.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeMark Type Registered Country Renewal Date LightPath® Service mark Yes United States Pending GRADIUM™ Trademark Yes United States April 29, 2027 Circulight Trademark No - - BLACK DIAMOND Trademark No - - GelTech Trademark No - - Oasis Trademark No - - LightPath® Service mark Yes People’s Republic of China September 13, 2025 ISP Optics® Trademark Yes United States February 12, 2025 Environmental and Governmental Regulation Currently, emissions and waste from our manufacturing processes are at such low levels that no special environmental permits or licenses are required.
Biggest changeMark Type Registered Country Renewal Date LightPath® Wordmark Yes United States October 21, 2027 LightPath® Combination mark Yes United States August 27, 2030 GRADIUM™ Trademark Yes United States April 29, 2027 Circulight Trademark No - - BLACK DIAMOND Trademark No - - GelTech Trademark No - - Oasis Trademark No - - LightPath® Service mark Yes People’s Republic of China September 13, 2025 (Renewal pending) ISP Optics® Wordmark Yes United States August 14, 2034 ISP Optics® Combination mark Yes United States Pending EdgeIR® Trademark Yes United States May 6, 2035 Mantis Trademark Yes Europe December 21, 2032 Mantis Trademark No United States - Environmental and Governmental Regulation Currently, emissions and waste from our manufacturing processes are at such low levels that no special environmental permits or licenses are required.
Major Customers In fiscal year 2024, we had sales to three customers that comprised an aggregate of approximately 25% of our annual revenue with one customer at 12% of our sales, another customer at 7% of our sales, and the third customer at 6% of our sales.
In fiscal year 2024, we had sales to three customers that comprised an aggregate of approximately 25% of our annual revenue with one customer at 12% of our sales, another customer at 7% of our sales, and the third customer at 6% of our sales.
We have used and will continue utilizing part-time support, including interns, temporary employment agencies, and outside consultants, as required from time to time. Any employee additions or terminations over the next twelve months will be dependent upon the actual sales levels realized during fiscal year 2025.
We have used and will continue utilizing part-time support, including interns, temporary employment agencies, and outside consultants, as required from time to time. Any employee additions or terminations over the next twelve months will be dependent upon the actual sales levels realized during fiscal year 2026.
We believe we maintain all necessary permits and are in full compliance with all applicable regulations. 14 Table of Contents To our knowledge, there are currently no U.S. federal, state, or local regulations that restrict the manufacturing and distribution of our products. Certain end-user applications require government approval of the complete optical system, such as U.S.
We believe we maintain all necessary permits and are in full compliance with all applicable regulations. To our knowledge, there are currently no U.S. federal, state, or local regulations that restrict the manufacturing and distribution of our products. Certain end-user applications require government approval of the complete optical system, such as U.S.
We primarily rely upon trade secrets and unpatented proprietary know-how to protect certain process inventions, lens designs, and innovations. We have taken reasonable security measures to protect our trade secrets and proprietary know-how. We are aggressively pursuing patents for new products that provide new features, capabilities or other advantages to our customers.
We primarily rely upon trade secrets and unpatented proprietary know-how to protect certain process inventions, lens designs, and innovations. We have taken reasonable security measures to protect our trade secrets and proprietary know-how. 13 Table of Contents We are aggressively pursuing patents for new products that provide new features, capabilities or other advantages to our customers.
We continue to diversify our business in order to minimize our sales concentration risk. In fiscal year 2024, 39% of our net revenue was derived from sales outside of the U.S., with 94% of our foreign sales derived from customers in Europe and Asia.
We continue to diversify our business in order to minimize our sales concentration risk. In fiscal year 2025, 38% of our net revenue was derived from sales outside of the U.S., with 91% of our foreign sales derived from customers in Europe and Asia.
In fiscal year 2023, 50% of our net revenue was derived from sales outside of the U.S., with 93% of our foreign sales derived from customers in Europe and Asia Employees Our employees are critical in providing our customers the most innovative optic products.
In fiscal year 2024, 39% of our net revenue was derived from sales outside of the U.S., with 94% of our foreign sales derived from customers in Europe and Asia. Employees Our employees are critical to providing our customers with the most innovative optics products.
In addition, certain products require external processing, such as anodizing and metallization. To date, we are not dependent on any of these manufacturers and have found a suitable number of qualified vendors and suppliers for these materials and services. We currently purchase a few key materials from single or limited sources.
To date, we are not dependent on any of these manufacturers and have found a suitable number of qualified vendors and suppliers for these materials and services. We currently purchase a few key materials from single or limited sources.
All employees are given basic safety training for fire, hazardous materials, first aid, physical lifting, and accident prevention. As changes are made to processes and new products are introduced, training is imperative.
All employees are given basic safety training for fire, hazardous materials, first aid, physical lifting, and accident prevention. As changes are made to processes and new products are introduced, training is imperative. All electronic training programs are assigned through a labor management system and completion records are maintained within the same system.
All electronic training programs are assigned through a labor management system and completion records are maintained within the same system. 15 Table of Contents Available Information We maintain a website with the address www.lightpath.com . We are not including the information contained on our website as part of, or incorporating it by reference into, this Form 10-K.
Available Information We maintain a website with the address www.lightpath.com. We are not including the information contained on our website as part of, or incorporating it by reference into, this Form 10-K.
We believe that a satisfactory supply of such production materials will continue to be available, at reasonable or, in some cases, increased prices, although there can be no assurance in this regard. 13 Table of Contents We also rely on local and regional vendors for component materials and services such as housings, fixtures, chemicals and inert gases, specialty ceramics, UV and AR coatings, and other specialty coatings.
We believe that a satisfactory supply of such production materials will continue to be available, at reasonable or, in some cases, increased prices, although there can be no assurance in this regard.
In fiscal year 2023, we had sales to three customers that comprised an aggregate of approximately 24% of our annual revenue with one customer at 11% of our sales, another customer at 7% of our sales, and the third customer at 6% of our sales.
We strive to only use suppliers that source from conflict-free smelters and refiners; however, in the future, we may face difficulties in gathering information regarding our suppliers and the source of any such conflict minerals. 14 Table of Contents Major Customers In fiscal year 2025, we had sales to three customers that comprised an aggregate of approximately 23% of our annual revenue with one customer at 9% of our sales, another customer at 7% of our sales, and the third customer at 6% of our sales.
We employ a diverse group of people with different backgrounds, cultures, education and experience to move the Company and our strategic plan forward.
We employ a diverse group of people with different backgrounds, cultures, education and experience to move the Company and our strategic plan forward. As of June 30, 2025, we had 350 employees globally, including 345 full-time and 5 part-time employees, with 153 employees in the U.S., 98 employees located in Riga, Latvia, and 99 employees located in Zhenjiang, China.
In addition, the implementation of these rules could adversely affect the sourcing, supply, and pricing of materials used in our products. We strive to only use suppliers that source from conflict-free smelters and refiners; however, in the future, we may face difficulties in gathering information regarding our suppliers and the source of any such conflict minerals.
In addition, the implementation of these rules could adversely affect the sourcing, supply, and pricing of materials used in our products.
Removed
As of June 30, 2024, we had 316 employees globally, including 304 full-time and 12 part-time employees, with 99 full-time employees in the U.S., 102 full-time employees located in Riga, Latvia, and 101 full-time employees located in Zhenjiang, China.
Added
We also rely on local and regional vendors for component materials and services such as housings, fixtures, chemicals and inert gases, specialty ceramics, UV and AR coatings, and other specialty coatings. In addition, certain products require external processing, such as anodizing and metallization.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Item 3. Legal Proceedings 24 PART II 25 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 25 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 25 Item 7A. Quantitative and Qualitative Disclosures About Market Risk. 37 Item 8. Financial Statements and Supplementary Data 37
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Item 3. Legal Proceedings. From time to time, we are involved in various legal actions arising in the normal course of business. We currently have no material legal proceeding to which we are a party to or to which our properties are subject to and, to the best of our knowledge, no material adverse legal activity is anticipated or threatened.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHolders As of September 9, 2024, we estimate there were approximately 206 holders of record and approximately 10,293 street name holders of our Class A common stock. Dividends We have never declared or paid any cash dividends on our Class A common stock and do not intend to pay any cash dividends in the foreseeable future.
Biggest changeHolders As of September 18, 2025, we estimate there were approximately 220 holders of record and approximately 10,835 street name holders of our Class A common stock. Dividends We have never declared or paid any cash dividends on our Class A common stock and do not intend to pay any cash dividends in the foreseeable future.
Issuer Purchases of Equity Securities During the year ended June 30, 2024 there were no repurchases of the Company’s Class A common stock by the Company.
Issuer Purchases of Equity Securities During the year ended June 30, 2025 there were no repurchases of the Company’s Class A common stock by the Company.

Item 7. Management's Discussion & Analysis

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

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Biggest changeWe calculate EBITDA by adjusting net income to exclude net interest expense, income tax expense or benefit, depreciation, and amortization, thus the term “Earnings Before Interest, Taxes, Depreciation and Amortization” and the acronym “EBITDA.” 34 Table of Contents The following table adjusts net income to EBITDA for the three months and year ended June 30, 2024 and 2023: (unaudited) Three Months Ended June 30, Year Ended June 30, 2024 2023 2024 2023 Net loss $ (2,353,773 ) $ (808,840 ) $ (8,007,346 ) $ (4,046,871 ) Depreciation and amortization 1,062,559 815,019 4,048,409 3,174,569 Income tax provision (53,912 ) 11,618 67,490 234,034 Interest expense 42,814 54,561 191,862 283,266 EBITDA $ (1,302,312 ) $ 72,358 $ (3,699,585 ) $ (355,002 ) % of revenue -15 % 1 % -12 % -1 % Our EBITDA for the quarter ended June 30, 2024 was a loss of approximately $1.3 million, compared to income of $0.1million for the same period of the prior fiscal year.
Biggest changeThe following table adjusts net income to EBITDA and Adjusted EBITDA for the three months and year ended June 30, 2025 and 2024: (unaudited) Three Months Ended June 30, Year Ended June 30, 2025 2024 2025 2024 Net loss $ (7,055,980 ) $ (2,353,773 ) $ (14,873,182 ) $ (8,007,346 ) Depreciation and amortization 792,488 1,062,559 4,149,240 4,048,409 Income tax provision (122,402 ) (53,912 ) 37,790 67,490 Interest expense 312,967 42,814 1,118,213 191,862 EBITDA $ (6,072,927 ) $ (1,302,312 ) $ (9,567,939 ) $ (3,699,585 ) Stock-based compensation 298,309 216,765 1,043,464 1,019,023 Loss on extinguishment of debt — — 418,502 — Change in fair value of warrant liability 2,224,270 — 1,353,716 — Change in fair value of acquisition liabilities 1,430,000 — 1,560,445 — Foreign exchange (gain) loss 141,583 (31,876 ) 129,882 (72,741 ) Adjusted EBITDA $ (1,978,765 ) $ (1,117,423 ) $ (5,061,930 ) $ (2,753,303 ) % of revenue -16 % -13 % -14 % -9 % Our adjusted EBITDA for the quarter ended June 30, 2025 was a loss of approximately $2.0 million, compared to a loss of $1.1 million for the same period of the prior fiscal year.
However, during fiscal year 2020, we began declaring intercompany dividends to remit a portion of the earnings of our foreign subsidiaries to us, as the U.S. parent company. It is still our intent to reinvest a significant portion of earnings generated by our foreign subsidiaries, however we also plan to repatriate a portion of their earnings.
However, during fiscal year 2020, we began declaring intercompany dividends to remit a portion of the earnings of our foreign subsidiaries to us, as the U.S. parent company. It is still our intent to reinvest a portion of earnings generated by our foreign subsidiaries, however we also plan to repatriate a portion of their earnings.
As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies use. EBITDA.
As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies use. EBITDA and Adjusted EBITDA.
In this latter type of business, we work with customers to help them determine optical specifications and even create certain optical designs for them, including complex multi-component, optical system or sub-system designs that we call “engineered solutions.” This is followed by “sampling” or prototyping small numbers of the product for the customers’ test and evaluation.
In this latter type of business, we work with customers to help them determine optical specifications and then create certain optical designs for them, including complex multi-component, optical system or sub-system designs that we call “engineered solutions.” This is followed by “sampling” or prototyping small numbers of the product for the customers’ test and evaluation.
Amortization is computed over the estimated useful lives of the respective assets, generally two to fifteen years. We periodically reassess the useful lives of intangible assets when events or circumstances indicate that useful lives have significantly changed from the previous estimate. Amortizable intangible assets consist primarily of customer relationships, know-how/trade secrets and trademarks.
Amortization is computed over the estimated useful lives of the respective assets, generally two to fifteen years. We periodically reassess the useful lives of intangible assets when events or circumstances indicate that useful lives have significantly changed from the previous estimate. Amortizable intangible assets consist primarily of customer relationships, know-how/trade secrets and tradenames.
Income tax expense for fiscal years 2024 and 2023 are also offset by deferred income tax benefits from the turnaround of temporary differences, and increased by deferred income tax expense related to certain indefinite lived temporary differences.
Income tax expense for fiscal years 2025 and 2024 are also offset by deferred income tax benefits from the turnaround of temporary differences, and increased by deferred income tax expense related to certain indefinite lived temporary differences.
We face several challenges in doing so: · Maintaining an optical design and new product sampling capability, including a high-quality and responsive optical design engineering staff; · The fact that as our customers take products of this nature into higher volume, commercial production they begin to work seriously to reduce costs – which may lead them to turn to larger producers, domestic or overseas, even if sacrificing quality; and · Our small business mass means that we can only offer a moderate amount of total productive capacity before we reach financial constraints imposed by the need to make additional capital expenditures – in other words, because of our limited cash resources and cash flow, we may not be able to service every opportunity that presents itself in our markets without arranging for such additional capital expenditures.
We face several challenges in doing so: · Maintaining the design and new product development capability, including a high-quality and responsive optical design engineering staff, opto-mechanical engineering, and all related disciplines; · The fact that as our customers take products of this nature into higher volume, commercial production they begin to work seriously to reduce costs – which may lead them to turn to larger producers, domestic or overseas, even if sacrificing quality; and · Our small business mass means that we can only offer a moderate amount of total productive capacity before we reach financial constraints imposed by the need to make additional capital expenditures – in other words, because of our limited cash resources and cash flow, we may not be able to service every opportunity that presents itself in our markets without arranging for such additional capital expenditures.
The initial advance under the 2020 Equipment Loan was 225,000 EUR (or USD $275,000), payable in equal installments over 60 months, the proceeds of which were used to make a prepayment to a vendor for equipment to be delivered at a future date. The 2020 Equipment Loan bears interest at a fixed rate of 3.3%.
The initial advance under the 2020 Equipment Loan was 225,000 EUR (or approximately USD $0.3 million), payable in equal installments over 60 months, the proceeds of which were used to make a prepayment to a vendor for equipment to be delivered at a future date. The 2020 Equipment Loan bears interest at a fixed rate of 3.3%.
Other income, net, for fiscal year 2024 includes a gain of $190,000 for the return of funds previously misappropriated by our former Chinese management team, as a result of the ongoing legal proceedings described in Note 15, Contingencies , in the Consolidated Financial Statements included in this Annual Report on Form 10-K.
Other income, net, for fiscal year 2024 includes a gain of $0.2 million for the return of funds previously misappropriated by our former Chinese management team, as a result of the ongoing legal proceedings described in Note 15, Contingencies , in the Consolidated Financial Statements included in this Annual Report on Form 10-K.
In China, before any funds can be repatriated, the retained earnings of the legal entity must equal at least 50% of the registered capital. During fiscal years 2024 and 2023, we repatriated approximately $1.4 million and $1.9 million, respectively, from LPOIZ.
In China, before any funds can be repatriated, the retained earnings of the legal entity must equal at least 50% of the registered capital. During fiscal years 2025 and 2024, we repatriated approximately $1.2 million and $1.4 million, respectively, from LPOIZ.
In addition, greater than 25% of our cash and cash equivalents was held by our foreign subsidiaries as of June 30, 2024 and, although we regularly repatriate cash, it may not be readily available to repay our liabilities in the U.S. should our cash assets in the U.S. not be sufficient.
In addition, approximately 25% of our cash and cash equivalents was held by our foreign subsidiaries as of June 30, 2025 and, although we regularly repatriate cash, it may not be readily available to repay our liabilities in the U.S. should our cash assets in the U.S. not be sufficient.
Our critical estimates include the allowance for trade receivables, which is made up of allowances for bad debts, allowances for obsolete inventory, valuation of compensation expense on stock-based awards and accounting for income taxes.
Our critical estimates include the allowance for trade receivables, which is made up of allowances for credit losses, allowances for obsolete inventory, valuation of compensation expense on stock-based awards and accounting for income taxes.
EBITDA is a non-GAAP financial measures used by management, lenders, and certain investors as a supplemental measure in the evaluation of some aspects of a corporation’s financial position and core operating performance.
EBITDA and Adjusted EBIDA are non-GAAP financial measures used by management, lenders, and certain investors as a supplemental measure in the evaluation of some aspects of a corporation’s financial position and core operating performance.
Less than 50% of our total cash, cash equivalents and restricted cash was held by our foreign subsidiaries in China and Latvia. Cash and cash equivalents held by our foreign subsidiaries in China and Latvia were generated in-country as a result of foreign earnings. Historically, we considered unremitted earnings held by our foreign subsidiaries to be permanently reinvested.
Approximately 25% of our total cash, cash equivalents and restricted cash was held by our foreign subsidiaries in China and Latvia. Cash and cash equivalents held by our foreign subsidiaries in China and Latvia were generated in-country as a result of foreign earnings. Historically, we considered unremitted earnings held by our foreign subsidiaries to be permanently reinvested.
For additional information regarding the BankUnited Loans and the equipment loans, see Note 14, Loans Payable , to the Notes to the Consolidated Financial Statements to this Annual Report on Form 10-K.
For additional information regarding the Acquisition Notes and the equipment loans, see Note 14, Loans Payable , to the Notes to the Consolidated Financial Statements to this Annual Report on Form 10-K. Equity Financing.
The shelf registration statement was declared effective by the SEC on March 1, 2022. During the year ended June 30, 2024, we issued 585,483 shares of our Class A common stock pursuant to the at-the-market equity program.
The shelf registration statement was declared effective by the Securities and Exchange Commission (the “SEC”) on March 1, 2022. During the year ended June 30, 2024, we issued 585,483 shares of our Class A common stock pursuant to the at-the-market equity program.
We evaluate our total backlog, which includes all firm orders requested by a customer that are reasonably believed to remain in the backlog and be converted into revenues. This includes customer purchase orders and may include amounts under supply contracts if they meet the aforementioned criteria. Generally, a higher total backlog is better for us.
We monitor and evaluate our total backlog, which includes all firm orders requested by a customer that are reasonably believed to remain in the backlog and be converted into revenues. This includes customer purchase orders and may include amounts under supply contracts if they meet the aforementioned criteria.
Items of which we have greater than a two-year supply are also reserved at 25% to 100%, depending on usage rates. The parts identified are adjusted for recent order and quote activity to determine the final inventory allowance.
Items of which we have excess supply are also reserved at 25% to 100%, depending on usage rates. The parts identified are adjusted for recent order and quote activity to determine the final inventory allowance.
The table below shows our DSO for the preceding eight fiscal quarters: Fiscal Quarter Ended DSO (days) Q4-2024 6/30/2024 52 Q3-2024 3/31/2024 55 Q2-2024 12/31/2023 59 Q1-2024 9/30/2023 57 Fiscal Year 2024 Average 56 Q4-2023 6/30/2023 63 Q3-2023 3/31/2023 59 Q2-2023 12/31/2022 52 Q1-2023 9/30/2022 57 Fiscal Year 2023 Average 58 Our average DSO for fiscal year 2024 was 56, compared to 58 for fiscal year 2023.
The table below shows our DSO for the preceding eight fiscal quarters: Fiscal Quarter Ended DSO (days) Q4-2025 6/30/2025 71 Q3-2025 3/31/2025 76 Q2-2025 12/31/2024 65 Q1-2025 9/30/2024 56 Fiscal Year 2025 Average 67 Q4-2024 6/30/2024 52 Q3-2024 3/31/2024 55 Q2-2024 12/31/2023 59 Q1-2024 9/30/2023 57 Fiscal Year 2024 Average 56 Our average DSO for fiscal year 2025 was 67, compared to 56 for fiscal year 2024.
Cash used in financing activities for fiscal year 2024 reflects approximately $2.6 million in principal payments on our loans and finance leases, offset by $279,000 in proceeds from the 2023 Equipment Loan, $806,000 in proceeds from the sale of Class A common stock pursuant to the at-the-market equity program and $40,000 in proceeds from the sale of Class A common stock under the 2014 ESPP.
Cash used in financing activities for fiscal year 2024 reflects approximately $2.6 million in principal payments on our loans and finance leases, offset by $0.3 million in proceeds from the 2023 Equipment Loan, $0.8 million in proceeds from the sale of Class A common stock pursuant to the at-the-market equity program.
We anticipate a moderate level of capital expenditures during fiscal year 2025; however, the total amount expended will depend on sales growth opportunities and other circumstances. Cash Flows – Financing. Net cash used in financing activities was approximately $1.5 million, compared to cash provided by financing activities of approximately $7.5 million in fiscal year 2023.
We anticipate a moderate level of capital expenditures during fiscal year 2026; however, the total amount expended will depend on sales growth opportunities and other circumstances. Cash Flows – Financing. Net cash provided by financing activities was approximately $29.3 million, whereas cash used in financing activities was approximately $1.5 million in fiscal year 2024.
Treasury interest rate for constant maturities. The likelihood of meeting targets for option grants that are performance based are evaluated each quarter. If it is determined that meeting the targets is probable, then the compensation expense will be amortized over the remaining vesting period.
Treasury interest rate for constant maturities. The likelihood of meeting targets for option grants that are performance based are evaluated each quarter. If it is determined that meeting the targets is probable, then the compensation expense will be amortized over the remaining vesting period. As of June 30, 2025, there are no outstanding option grants with performance-based vesting criteria.
Income taxes for fiscal years 2024 and 2023 include Chinese withholding tax expenses of $170,000 and $235,000, respectively, the majority of which are associated with intercompany dividends declared by LPOIZ, payable to us as the parent company.
Income taxes for fiscal years 2025 and 2024 include Chinese withholding tax expenses of $0.2 million and $0.2 million, respectively, the majority of which are associated with intercompany dividends declared by LPOIZ, payable to us as the parent company.
These indicators change from time to time as the opportunities and challenges in the business change. They are mostly non-financial indicators, such as units of shippable output by product line, production yield rates by major product line, and the output and yield data from significant intermediary manufacturing processes that support the production of the finished shippable product.
They are mostly non-financial indicators, such as units of shippable output by product line, production yield rates by major product line, and the output and yield data from significant intermediary manufacturing processes that support the production of the finished shippable product.
We anticipate continued improvement in our cash flows provided by operations in future years, as many of these non-recurring payables are behind us, and as we continue to focus on managing our receivables, payables and inventory, while continuing to grow our sales and improve gross margins, with moderate increases in general, administrative, sales and marketing and new product development costs. 29 Table of Contents Cash Flows – Investing.
We anticipate continued improvement in our cash flows provided by operations in future years and as we continue to focus on managing our receivables, payables and inventory, while continuing to grow our sales and improve gross margins, with moderate increases in general, administrative, sales and marketing and new product development costs. Cash Flows – Investing.
The table below shows our DCSI for the immediately preceding eight fiscal quarters: Fiscal Quarter Ended DCSI (days) Q4-2024 6/30/2024 98 Q3-2024 3/31/2024 98 Q2-2024 12/31/2023 133 Q1-2024 9/30/2023 119 Fiscal Year 2024 Average 112 Q4-2023 6/30/2023 102 Q3-2023 3/31/2023 154 Q2-2023 12/31/2022 120 Q1-2023 9/30/2022 125 Fiscal Year 2023 Average 125 Our average DCSI for fiscal year 2024 was 112, compared to 125 for fiscal year 2023.
The table below shows our DCSI for the immediately preceding eight fiscal quarters: Fiscal Quarter Ended DCSI (days) Q4-2025 6/30/2025 123 Q3-2025 3/31/2025 178 Q2-2025 12/31/2024 107 Q1-2025 9/30/2024 112 Fiscal Year 2025 Average 130 Q4-2024 6/30/2024 98 Q3-2024 3/31/2024 98 Q2-2024 12/31/2023 133 Q1-2024 9/30/2023 119 Fiscal Year 2024 Average 112 Our average DCSI for fiscal year 2025 was 130, compared to 112 for fiscal year 2024.
We believe sales growth has been and continues to be our best indicator of success.
We believe sales growth has been and continues to be a key indicator of success.
However, as previously disclosed we have decided to reduce the amount of optics we produce from Germanium, both to reduce our risk of supply chain disruption, and more importantly, to work with customers to convert their systems to use optics made of our own BlackDiamond materials.
Due to the uncertainty surrounding the global Germanium supply, we decided to reduce the amount of optics we produce from Germanium, both to reduce our exposure to the risk of supply chain disruption, and more importantly, to work with customers to convert their systems to use optics made of our own BlackDiamond materials.
For fiscal year 2024, Selling, General and Administrative (“SG&A”) costs were approximately $12.3 million, an increase of approximately $860,000, or 8%, as compared to the prior fiscal year.
For fiscal year 2025, Selling, General and Administrative (“SG&A”) costs were approximately $15.8 million, an increase of approximately $3.5 million, or 29%, as compared to the prior fiscal year.
Potential dilutive common stock equivalents were excluded from the calculation of diluted shares for fiscal years 2024 and 2023, as their effects would have been anti-dilutive due to the net loss in those periods. Liquidity and Capital Resources At June 30, 2024, we had working capital of approximately $7.5 million and total cash and cash equivalents of approximately $3.5 million.
Potential dilutive common stock equivalents were excluded from the calculation of diluted shares for all periods presented, as their effects would have been anti-dilutive due to net losses in those periods. Liquidity and Capital Resources At June 30, 2025, we had working capital of approximately $11.3 million and total cash and cash equivalents of approximately $4.9 million.
Net loss for fiscal year 2024 was approximately $8.0 million, or $0.21 basic and diluted loss per share, compared to approximately $4.0 million, or $0.13 basic and diluted loss per share, for fiscal year 2023.
Net loss for fiscal year 2025 was approximately $14.9 million, or $0.36 basic and diluted loss per share, compared to approximately $8.0 million, or $0.21 basic and diluted loss per share, for fiscal year 2024.
During fiscal year 2024, we incurred net foreign currency transaction gains of approximately $73,000, compared to net foreign currency transaction losses of $37,000 for fiscal year 2023. Income Taxes. During fiscal year 2024, we recorded income tax expense of approximately $67,000, compared to approximately $234,000 in fiscal year 2023, primarily related to our operations in China.
During fiscal year 2025, we incurred net foreign currency transaction losses of approximately $0.1 million, compared to net foreign currency transaction gains of $0.1 million for fiscal year 2024. Income Taxes. During fiscal year 2025, we recorded income tax expense of approximately $0.1 million, compared to $0.1 million in fiscal year 2024, primarily related to our operations in China.
An additional 225,000 EUR (or USD $267,000) was drawn in September 2021, which proceeds were paid to the vendor for the equipment, payable in equal installments over 52 months. As of June 30, 2024, the outstanding balance on the 2020 Equipment Loan was 138,750 EUR (or USD $148,532).
An additional 225,000 EUR (or approximately USD $0.3 million) was drawn in September 2021, which proceeds were paid to the vendor for the equipment, payable in equal installments over 52 months. As of June 30, 2025, the outstanding balance on the 2020 Equipment Loan was approximately 49,000 EUR (or USD $0.1 million).
Weighted-average common stock shares outstanding were 37,944,935 for both basic and diluted in fiscal year 2024, compared to 31,637,445 for both basic and diluted in fiscal year 2023.
Weighted-average common stock shares outstanding were 40,874,068 for both basic and diluted in fiscal year 2025, compared to 37,944,935 for both basic and diluted in fiscal year 2024.
As of June 30, 2024, LPOIZ had approximately $1.6 million in retained earnings available for repatriation, and LPOI did not have any earnings available for repatriation, based on earnings accumulated through December 31, 2023, the end of the most recent statutory tax year, that remained undistributed as of June 30, 2024.
As of June 30, 2025, LPOIZ had approximately $0.4 million in retained earnings available for repatriation, based on earnings accumulated through December 31, 2024, the end of the most recent statutory tax year, that remained undistributed as of June 30, 2025.
Higher unit production per shift means lower unit cost, and, therefore, improved margins or improved ability to compete, where desirable, for price sensitive customer applications. The data from these reports is used to determine tactical operating actions and changes. We believe that our non-financial production indicators, such as those noted, are proprietary information.
Higher unit production per shift means lower unit cost, and, therefore, improved margins or improved ability to compete, where desirable, for price sensitive customer applications. The data from these reports is used to determine tactical operating actions and changes.
We measure the quality of receivables by the proportions of the total that are at various increments past due from our normally extended terms, which are generally 30 days.
Similarly, we manage our accounts receivable to minimize investment in working capital. We measure the quality of receivables by the proportions of the total that are at various increments past due from our normally extended terms, which are generally 30 days.
Other companies may calculate gross margin in a different manner. 25 Table of Contents Effect of Certain Events Occurring at Our Chinese Subsidiaries In April 2021, we terminated several employees of our China subsidiaries, LPOIZ and LPOI, including the General Manager, the Sales Manager, and the Engineering Manager, after determining that they had engaged in malfeasance and conduct adverse to our interests, including efforts to misappropriate certain of our proprietary technology, diverting sales to entities owned or controlled by these former employees and other suspected acts of fraud, theft and embezzlement.
The following discussions also include use of non-GAAP measures discussed in more detail under the heading “Non-GAAP Financial Measures.” 25 Table of Contents Effect of Certain Events Occurring at Our Chinese Subsidiaries In April 2021, we terminated several employees of our China subsidiaries, LPOIZ and LPOI, including the General Manager, the Sales Manager, and the Engineering Manager, after determining that they had engaged in malfeasance and conduct adverse to our interests, including efforts to misappropriate certain of our proprietary technology, diverting sales to entities owned or controlled by these former employees and other suspected acts of fraud, theft and embezzlement.
Financial indicators that are usually reviewed at the same time include the major elements of the micro-level business cycle: · sales backlog; · revenue by product group; · inventory levels; · accounts receivable levels and quality; · EBITDA; and · other key indicators.
We believe that our non-financial production indicators, such as those noted, are proprietary information. 30 Table of Contents Financial indicators that are usually reviewed at the same time include the major elements of the micro-level business cycle: · sales backlog; · revenue by product group; · inventory levels; · accounts receivable levels and quality; · EBITDA and Adjusted EBITDA; and · other key indicators.
Gross margin for fiscal year 2024 was approximately $8.6 million, a decrease of 22%, as compared to approximately $11.1 million in fiscal year 2023. Total cost of sales was approximately $23.1 million for fiscal year 2024, compared to $21.9 million for fiscal year 2023, an increase of 6%.
Gross margin for fiscal year 2025 was approximately $10.1 million, an increase of 17%, as compared to approximately $8.6 million in fiscal year 2024. Total cost of sales was approximately $27.1 million for fiscal year 2025, compared to $23.1 million for fiscal year 2024, an increase of 17%.
The initial advance under the 2023 Equipment Loan was 128,815 EUR (or USD $141,245), the proceeds of which were used to make a prepayment to a vendor for equipment to be delivered at a future date. The final advance for the final payment to the equipment vendor was 132,674 EUR (or USD $141,815).
The initial advances under the 2023 Equipment Loan totaled 260,258 EUR (or approximately USD $0.3 million), the proceeds of which were used to make prepayments to a vendor for equipment to be delivered at a future date. The final advance for the final payment to the equipment vendor was 132,674 EUR (or approximately USD $0.1 million).
These changes, if any, may require material adjustments to these deferred tax assets, resulting in a reduction in net income or an increase in net loss in the period when such determinations are made, which, in turn, may result in an increase or decrease to our tax provision in a subsequent period. 36 Table of Contents In the ordinary course of global business, there are many transactions and calculations where the ultimate tax outcome is uncertain.
These changes, if any, may require material adjustments to these deferred tax assets, resulting in a reduction in net income or an increase in net loss in the period when such determinations are made, which, in turn, may result in an increase or decrease to our tax provision in a subsequent period.
The fair value of the reporting unit is compared to its carrying amount, and if the carrying amount exceeds its fair value, then an impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, up to the total amount of goodwill allocated to that reporting unit.
The fair value of the reporting unit is compared to its carrying amount, and if the carrying amount exceeds its fair value, then an impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, up to the total amount of goodwill allocated to that reporting unit. 36 Table of Contents Accounting for income taxes requires estimates and judgments in determining income tax expense for financial statement purposes.
Cash provided by operations was approximately $0.5 million for fiscal year 2024, compared to cash used in operations of approximately $2.8 million for fiscal year 2023. The increase in cash flows from operations during fiscal year 2024 is primarily due decreases in accounts receivable and inventory, due to lower sales in fiscal year 2024, as compared to fiscal year 2023.
The cash provided by operations during fiscal year 2024 was primarily due decreases in accounts receivable and inventory, due to lower sales in fiscal year 2024, as compared to fiscal year 2023.
Revenue generated by the infrared components product group was approximately $14.1 million in fiscal year 2024, a decrease of 2%, as compared to the prior fiscal year.
Revenue for fiscal year 2025 was approximately $37.2 million, an increase of 17%, as compared to $31.7 million in fiscal year 2024. Revenue generated by the infrared components product group was approximately $14.3 million in fiscal year 2025, an increase of 2%, as compared to the prior fiscal year.
Some of these uncertainties arise as a consequence of cost reimbursement and royalty arrangements among related entities, which could impact our income or loss in each jurisdiction in which we operate.
In the ordinary course of global business, there are many transactions and calculations where the ultimate tax outcome is uncertain. Some of these uncertainties arise as a consequence of cost reimbursement and royalty arrangements among related entities, which could impact our income or loss in each jurisdiction in which we operate.
We may also identify opportunities for acquisitions and other strategic transactions to expand and further enhance our business that may require that we raise additional capital should we elect to pursue any of such transactions. We intend to continue efforts to keep costs under control as we seek renewed sales growth.
We may also identify opportunities for additional acquisitions and other strategic transactions to expand and further enhance our business that may require that we raise additional capital should we elect to pursue any of such transactions. 29 Table of Contents Cash Flows – Operating.
We also have other policies that we consider key accounting policies, such as our policy for revenue recognition, however, the application of these policies does not require us to make significant estimates or judgments that are difficult or subjective.
We also have other policies that we consider key accounting policies, such as our policy for revenue recognition, however, the application of these policies does not require us to make significant estimates or judgments that are difficult or subjective. 35 Table of Contents Management has discussed the selection of critical accounting policies and estimates with our Board, and the Board has reviewed our disclosure relating to critical accounting policies and estimates in this Annual Report on Form 10-K.
The increase is also attributable to the shares of Class A common stock issued in conjunction with the acquisition of Visimid, as well as the issuance of shares of Class A common stock under the 2014 ESPP and underlying vested RSUs and RSAs.
The increase is also attributable to: (i) the 585,483 shares of Class A Common Stock issued during the second half of fiscal year 2024 pursuant to the at-the-market equity program; (ii) the shares of Class A Common Stock issued in conjunction with the acquisition of Visimid; and (iii) the issuance of shares of Class A Common Stock under the 2014 ESPP and underlying vested RSUs and RSAs.
Other key indicators include various operating metrics, some of which are qualitative and others are quantitative. These indicators change from time to time as the opportunities and challenges in the business change.
We strive to maintain a DSO of less than 60, which we did achieve during fiscal 2025, when calculated on a monthly basis. Other Key Indicators. Other key indicators include various operating metrics, some of which are qualitative and others are quantitative. These indicators change from time to time as the opportunities and challenges in the business change.
Additionally, we believe that we offer value to some customers as a source of supply in the U.S. should they be unwilling to commit to purchase their supply of critical component(s) from foreign sources.
Additionally, we believe that we offer value to some customers as a source of supply in the U.S. should they be unwilling to commit to purchase their supply of critical component(s) from foreign sources. For information regarding revenue recognition related to our various revenue streams, refer to Critical Accounting Policies and Estimates in this Annual Report on Form 10-K.
Demand for infrared products continues to be fueled by interest in lenses made with our proprietary BD6 and our new BDNL-4 materials.
Markets continue to experience growing demand for infrared products used in the industrial, defense and first responder sectors. Demand for infrared products continues to be fueled by interest in lenses made with our BD6 glass and our new BDNL materials.
For additional information regarding this note, see Note 19, Subsequent Events , in the Notes to the Consolidated Financial Statements of this Annual Report on Form 10-K. Equity Financing.
For additional information, refer to Note 3, Acquisitions , to the Notes to the Consolidated Financial Statements to this Annual Report on Form 10-K.
The increase in net loss for fiscal year 2024, as compared to fiscal year 2023, is attributable to the approximately $4.3 million increase in operating loss resulting from lower revenue and gross margin and increased operating expenses.
The increase in net loss for fiscal year 2025, as compared to fiscal year 2024, is partially attributable to the approximately $3.5 million increase in operating loss due to higher operating expenses, partially offset by the increase in gross margin.
With the global supply of germanium currently concentrated in Russia and China, recent global events are generating renewed interest in germanium alternatives such as our proprietary BlackDiamond materials, and other materials we are currently developing under an exclusive license with the Naval Research Lab.
With the global supply of germanium concentrated in Russia and China, recent global events and increases in restrictions on the sourcing of these materials are generating renewed interest in germanium alternatives such as our proprietary BlackDiamond materials, and other materials we are currently developing under an exclusive license with the Naval Research Lab. 31 Table of Contents As we have outlined in our strategic direction, we do not expect to see significant growth in our visible components product group in the near future.
We do not expect to incur additional legal fees or consulting expenses in future periods as we have exhausted nearly all of our legal options and remedies.
We do not expect to recover any further funds or incur additional legal fees or consulting expenses in future periods as we have exhausted nearly all of our legal options and remedies. Results of Operations Operating Results for Fiscal Year Ended June 30, 2025 compared to the Fiscal Year Ended June 30, 2024: Revenue.
Revenue from the visible components product group for the fourth quarter of fiscal year 2024 was $3.2 million, or flat in comparison to the same quarter of the prior fiscal year. By industry, there was a decrease in sales to defense customers due to timing of orders, and an increase in sales through U.S. catalog and distribution channels.
The remaining $0.8 million increase in revenue is primarily due to an increase in sales to defense customers. Revenue from the visible components product group for the fourth quarter of fiscal year 2025 was $2.8 million, or flat in comparison to the same quarter of the prior fiscal year.
The 2023 Equipment Loan is payable over 48 months, with monthly installments beginning January 1, 2024. The 2023 Equipment Loan bears interest at the six-month EURIBOR rate, plus 2.84% (6.39% as of June 30, 2024). 28 Table of Contents BankUnited Loans.
The 2023 Equipment Loan is payable over 48 months, with monthly installments beginning January 1, 2024. The 2023 Equipment Loan bears interest at the six-month EURIBOR rate, plus 2.84% (4.89% as of June 30, 2025). As of June 30, 2025, the outstanding balance on the 2023 Equipment Loan was approximately 263,000 EUR (or USD $0.3 million).
Revenue generated by the infrared components product group for the fourth quarter of fiscal year 2024 was $3.0 million, a decrease of 36%, as compared to the same quarter of the prior fiscal year.
Revenue generated by the infrared components product group for the fourth quarter of fiscal year 2025 was $5.0 million, an increase of 63%, as compared to the same quarter of the prior fiscal year. The fourth quarter of fiscal 2025 includes $1.1 million of G5 Infrared sales of coating services and components.
The decrease in revenue is primarily due to a decrease in sales to customers in the defense industry, as well as a decrease in sales through catalog and distribution channels in the U.S. and in Europe. Sales to customers in the telecommunications industry in China also decreased by approximately 40%.
The increase in revenue is primarily due to sales to defense customers, partially offset by decreases in sales through catalog and distribution channels in the U.S., as well as decreases in sales to commercial and medical customers.
The decrease in revenue is primarily due to a decrease in sales to customers in the defense industry, as well as a decrease in sales through catalog and distribution channels in the U.S. and in Europe. Sales to customers in the telecommunications industry in China also decreased by approximately 40%.
The increase in revenue is primarily due to sales to defense customers, partially offset by decreases in sales through catalog and distribution channels in the U.S., as well as decreases in sales to commercial and medical customers.
Such expenses were recorded as “Selling, general and administrative” expenses in the accompanying Consolidated Statements of Comprehensive Income (Loss). In December 2023, the Company recovered approximately $190,000 in funds that had been recovered by the Chinese authorities, which is included in Other income in the accompanying Consolidated Statements of Comprehensive Income (Loss) for the year ended June 30, 2024.
In connection with such terminations, our China subsidiaries have engaged in certain legal proceedings with the terminated employees. In December 2023, the Company recovered approximately $0.2 million in funds that had been recovered by the Chinese authorities, which is included in “Other income” in the accompanying Consolidated Statements of Comprehensive Income (Loss) for the year ended June 30, 2024.
We execute all foreign sales from our U.S. facilities and inter-company transactions in U.S. dollars, partially mitigating the impact of foreign currency fluctuations.
This gain was largely offset by expenses of $0.2 million associated with an event of default by a sub-tenant of a portion of our Orlando Facility lease. We execute all foreign sales from our U.S. facilities and inter-company transactions in U.S. dollars, partially mitigating the impact of foreign currency fluctuations.
The following table sets forth revenue dollars and units by our three product groups for the three months and year ended June 30, 2024 and 2023: (unaudited) Three Months Ended June 30, Quarter Year Ended June 30, Year-to-date 2024 2023 % Change 2024 2023 % Change Revenue Infrared components $ 3,043,148 $ 4,769,363 -36 % $ 14,089,277 $ 14,392,960 -2 % Visible components 3,178,023 3,189,957 0 % 11,233,737 13,438,814 -16 % Assemblies and modules 1,373,178 1,595,098 -14 % 4,451,165 4,680,354 -5 % Engineering services 1,039,783 130,303 698 % 1,952,013 421,821 363 % Total revenue $ 8,634,132 $ 9,684,721 -11 % $ 31,726,192 $ 32,933,949 -4 % Three months ended June 30, 2024 compared to three months ended June 30, 2023.
The following table sets forth revenue dollars by our three product groups for the three months and year ended June 30, 2025 and 2024: (unaudited) Three Months Ended June 30, Quarter Year Ended June 30, Year-to-date 2025 2024 % Change 2025 2024 % Change Revenue Infrared components $ 4,947,111 $ 3,043,148 63 % $ 14,310,589 $ 14,089,277 2 % Visible components 2,835,474 3,178,023 (11 )% 11,736,549 11,233,737 4 % Assemblies and modules 4,164,932 1,373,178 203 % 7,968,296 4,451,165 79 % Engineering services 262,276 1,039,783 (75 )% 3,187,196 1,952,013 63 % Total revenue $ 12,209,793 $ 8,634,132 41 % $ 37,202,630 $ 31,726,192 17 % Three months ended June 30, 2025 compared to three months ended June 30, 2024.
During fiscal year 2024, we expended approximately $2.2 million for capital equipment, as compared to approximately $3.1 million during fiscal year 2023. We also expended approximately $847,000, net of cash acquired, to acquire Visimid during fiscal year 2024, as disclosed in Note 3, Acquisition of Visimid Technologies , in the Consolidated Financial Statements in this Annual Report on Form 10-K.
During fiscal years 2025 and 2024, we expended approximately $18.5 million and $0.8 million, net, to acquire G5 Infrared and Visimid, respectively, as disclosed in Note 3, Acquisitions , in the Consolidated Financial Statements in this Annual Report on Form 10-K.
Our revenue decreased by 11% in the fourth quarter of fiscal year 2024, as compared to the same quarter of the prior fiscal year, driven by decreases in infrared components and assemblies and modules, partially offset by an increase in engineering services.
Our revenue increased by 41% in the fourth quarter of fiscal year 2025, as compared to the same quarter of the prior fiscal year, primarily driven by increases in infrared components and assemblies and modules resulting from the addition of G5 Infrared revenue since acquisition.
Revenue from assemblies and modules decreased by 14% for the fourth quarter of fiscal 2024, as compared to the same quarter of the prior fiscal year. The majority of the decrease is due to sales of a custom visible lens assembly to a medical customer, for which we have an end of life order in backlog going into fiscal 2025.
The remaining decrease is partially due to the absence of revenue from an end of life order for a custom visible lens assembly which shipped complete in the first quarter of fiscal 2025, and a decrease in sales of infrared camera cores due to timing of an order in the prior year.
Amortization of intangibles increased by $510,000 for fiscal year 2024, as compared to the prior fiscal year, due to the amortization of identifiable intangible assets associated with the Visimid acquisition. See Note 3, Acquisition of Visimid , in the Consolidated Financial Statements included in this Annual Report on Form 10-K, for further information. Other Expense.
See Note 3, Acquisitions , in the Consolidated Financial Statements included in this Annual Report on Form 10-K, for further information. Other Expense. Interest expense, net, was approximately $1.1 million for fiscal year 2025, compared to approximately $0.2 million in the prior fiscal year.
The decrease in average DCSI is driven by the decrease in inventory levels, which aligns with the decrease in sales. We expect DCSI to maintain an average of between 110 to 120. 33 Table of Contents Accounts Receivable Levels and Quality. Similarly, we manage our accounts receivable to minimize investment in working capital.
The increase in average DCSI is driven by the is acquisition of G5 Infrared during the third quarter of fiscal 2025, which increase the inventory balance disproportionately to sales for that quarter. We expect DCSI to return to an average of 110 to 120 days. 33 Table of Contents Accounts Receivable Levels and Quality.
These decreases were partially offset by the addition of Visimid revenue of approximately $397,000. 32 Table of Contents Revenue from engineering services increased $0.9 million, for the fourth quarter of fiscal 2024, as compared to the same quarter of the prior fiscal year.
Revenue from engineering services decreased $0.8 million, for the fourth quarter of fiscal 2025, as compared to the same quarter of the prior fiscal year.
Revenue generated by the visible components product group was approximately $11.2 million for fiscal year 2024, a decrease of 16%, as compared to the prior fiscal year.
The decrease in sales to this customer was partially offset by increases in sales of infrared components to several defense customers in the U.S. and in Europe. Revenue generated by the visible components product group was approximately $11.7 million for fiscal year 2025, an increase of 4%, as compared to the prior fiscal year.
The decrease in EBITDA in the fourth quarter of fiscal year 2024 was primarily attributable to the decrease in revenue and gross margin, coupled with increases in SG&A and Other expenses, net, which expense increases primarily related to non-recurring items, including certain business development initiatives.
The decrease in adjusted EBITDA in the fourth quarter of fiscal year 2025 is primarily attributable to higher SG&A, including non-recurring costs related to the acquisition of G5 Infrared, and new product development expenses, partially offset by the increase in gross margin.
Fiscal year 2024 also reflects proceeds of approximately $365,000 from sale-leasebacks of equipment. During fiscal years 2024 and 2023, our capital expenditures were primarily related to the expansion of our Orlando Facility.
During fiscal year 2025, our capital expenditures were primarily related to expansion of our glass fabrication capacity, as well as metrology and infrared coating equipment, whereas our capital expenditures in fiscal year 2024 were primarily related to the expansion of our Orlando Facility.
These increases are primarily due to the addition of engineering personnel as a result of the Visimid acquisition, as well as an increase in materials and outside services utilized for development projects, including additional product offerings following the MANTIS reference design camera which we began developing in fiscal year 2023. Amortization of Intangibles.
New product development costs were approximately $3.1 million in fiscal year 2025, an increase of approximately $0.7 million, or 28%, as compared to the prior fiscal year. These increases are due to the addition of engineering personnel, as well as an increase in materials and outside services utilized for development projects, primarily for infrared cores and camera systems.
SG&A for fiscal year 2024 includes a number of non-recurring items, particularly as related to certain business development initiatives. Off Balance Sheet Arrangements We do not engage in any activities involving variable interest entities or off balance sheet arrangements.
Off Balance Sheet Arrangements We do not engage in any activities involving variable interest entities or off balance sheet arrangements.
To date, our actual results have been materially consistent with our estimates, and we expect such estimates to continue to be materially consistent in the future. 35 Table of Contents Inventory obsolescence allowance is calculated by reserving 100% for items that have not been sold in two years or that have not been purchased in two years.
The critical accounting policies used by management and the methodology for its estimates and assumptions are as follows: Inventory obsolescence allowance is calculated by reserving 100% for items that have not been sold in two years or that have not been purchased in two years.
Revenue generated by the infrared components product group for fiscal year 2024 was $14.1 million, a decrease of approximately 2%, as compared to the prior fiscal year. The decrease in revenue related to the germanium-based annual contract that was not renewed was mostly offset by an increase in shipments against an annual contract for an international military program.
The acquisition of G5 Infrared contributed to the increases in assemblies and modules, and infrared components. 32 Table of Contents Revenue generated by the infrared components product group for fiscal year 2025 was $14.3 million, an increase of approximately 2%, as compared to the prior fiscal year.
Approximately $1.4 million of this increase is due to the addition of Visimid revenue, primarily driven by Visimid’s contract with Lockheed Martin, where revenue is generally recognized based on the achievement of milestones. The remaining increase is driven by revenue from one of our space-related funded research contracts. 26 Table of Contents Cost of Sales and Gross Margin.
This increase was driven by Visimid’s contract with Lockheed Martin, as well as revenue from one of our space-related funded research contracts. The timing and dollar value of deliverables is not always consistent, which causes revenue for this product group to fluctuate from period to period. Cost of Sales and Gross Margin.
Other income, net, was approximately $79,000 for fiscal year 2024, compared to $25,000 for fiscal year 2023.
Other expense, net, was approximately $0.1 million for fiscal year 2025, compared to other income, net of $0.1 million for fiscal year 2024. Other expense, net, for fiscal year 2025 primarily consists of net foreign exchange losses.
For information regarding revenue recognition related to our various revenue streams, refer to Critical Accounting Policies and Estimates in this Annual Report on Form 10-K. 30 Table of Contents Our Key Performance Indicators Usually on a weekly basis, management reviews several performance indicators. Some of these indicators are qualitative and others are quantitative.
Our Key Performance Indicators Usually on a weekly basis, management reviews several performance indicators. Some of these indicators are qualitative and others are quantitative. These indicators change from time to time as the opportunities and challenges in the business change.

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