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Item 9A. Controls and Procedures

2024-09-19 compared with 2023-09-14 · 830 added, 282 removed, 915 unchanged (55% of the section changed)

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This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting.

Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to rules of the Securities and Exchange Commission (the “SEC”) that permit us to provide only management’s report in this Annual Report.

Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to rules of the SEC that permit us to provide only management’s report in this Annual Report.

Changes in Internal Controls over Financial Reporting

In connection with our continued monitoring and maintenance of our controls procedures as part of the implementation of Section 404 of the Sarbanes-Oxley Act, we continue to review, test, and improve the effectiveness of our internal controls.

In connection with the events that occurred at our Chinese subsidiaries, we have adopted additional policies and procedures designed to improve our internal controls, including, without limitation, revising the reporting structure for our foreign-based finance directors, adopting Codes of Conduct applicable to our subsidiaries’ foreign-based employees, adopting an internal authority approval matrix, and hiring additional staff for our accounting departments at LPOI and LPOIZ to improve segregation of duties, among other items.

In connection with the events that occurred at our Chinese subsidiaries, we adopted additional policies and procedures designed to improve our internal controls, including, without limitation, revising the reporting structure for our foreign-based finance directors, adopting Codes of Conduct applicable to our subsidiaries’ foreign-based employees, adopting an internal authority approval matrix, and hiring additional staff for our accounting department at LPOIZ to improve segregation of duties, among other items.

Other than these modifications, there have not been any significant changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth quarter and since the year ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Directors, Executive Officers and Corporate Governance .

The information required under this item is incorporated herein by reference to our Proxy Statement for our fiscal year 2024 Annual Stockholders’ Meeting to be filed with the SEC not later than 120 days after the end of fiscal year 2023.

Currently, we have six directors with each director serving until his or her successor is elected and qualified.

Our Board is divided into three classes, denoted as Class I, Class II, and Class III, serving staggered three-year terms with one class elected at the annual meeting of stockholders.

The Class II Directors' term expires at the annual meeting of stockholders proposed to be held in fiscal year 2025.

The Class I Directors’ term expires at the annual meeting of stockholders proposed to be held in fiscal year 2026.

The Class III Directors’ term expires at the annual meeting of stockholders proposed to be held in fiscal year 2027.

The table below lists each current director, each such director’s committee memberships as of June 30, 2024, the Chair of each Board committee, and each such director’s class.

Joseph Menaker I

Darcie Peck I

Scott Faris, Chair II

Eric Creviston II

Kim Crider III

Shmuel Rubin III

Committee Chair:

Biographical and Related Information – Directors and Executive Officers

The following is an overview of the biographical information for each of our directors and executive officers, including their age, the year they became directors or officers, their principal occupations or employment for at least the past five years, and certain of their other directorships.

Class II Directors

Scott Faris, 59

Faris has served as a director of the Company since December 2011, and was appointed Chair, effective December 20, 2022.

Faris is an experienced entrepreneur with almost two decades of operating, venture-financing, and commercialization experience, involving more than 20 start-up and emerging-growth technology companies.

In April 2024 Mr.

Faris founded Eqlipse Quantum, a commercialization accelerator focused on launching and financing transformational dual-use quantum enabled companies for critical defense and intelligence requirements..

From October 2021 to April 2024, Mr.

Faris served as Chief Executive Officer of Infleqtion (formerly Cold Quanta, Inc.).

Since September 2016, he had served as Chief Business Officer of Luminar Technologies, Inc., a leading developer of autonomous vehicle systems technologies including Lidar sensor suites.

In June 2013, Mr.

Faris founded Aerosonix, Inc.

(formerly MicroVapor Devices, LLC), a privately held developer and manufacturer of advanced medical devices, and served as its Chief Executive Officer until August 2016 and has served as Chairman of the board of directors since June 2013.

Faris also founded the Astralis Group, a strategy advisor that provides consulting to start-up companies and, since 2004, Mr.

Faris has served as its Chief Executive Officer.

In August 2007, Mr.

Faris founded Planar Energy, a company that developed transformational ceramic solid-state battery technology and products and served as its Chief Executive Officer until June 2013.

Planar Energy is a spin-out of the U.S.

Department of Energy’s National Renewable Energy Laboratory.

From October 2004 to June 2007, Mr.

Faris was a partner with Corporate IP Ventures (formerly known as MetaTech Ventures), an early-stage venture fund specializing in defense technologies.

Faris also previously served as the Chairman and Chief Executive Officer of Waveguide Solutions, a developer of planar optical light wave circuit and micro system products, and as a director and Chief Operating Officer of Ocean Optics, Inc., a precision-optical-component and fiber-optic-instrument spin-out of the University of South Florida.

Faris was also the founder and Chief Executive Officer of Enterprise Corporation, a technology accelerator, served as a director of the Florida Seed Capital Fund and Technology Commercialization at the Center for Microelectronics Research, and the Chairman of the Metro Orlando EDC.

Faris received a Bachelor of Science degree in Management Information Systems from Penn State University in 1988.

Faris’s significant experience in executive management positions at various optical component companies, his experience in the commercialization of optical and opto-electronic component technology, and his background in optics, technology, and venture capital qualify him for service as one of our directors.

Eric Creviston, 60

Creviston has served as one of our directors since March 2021.

He has served as Corporate Vice President and President of Connectivity and Sensors Group for Qorvo, Inc.

(“Qorvo”) since June 2022.

Prior to that, he served as Corporate Vice President and President of Mobile Products for Qorvo since January 2015.

Prior to that, he served as the Corporate Vice President and President of Cellular Products Group for RF Micro Devices, Inc.

(“RFMD”) from August 2007 to January 2015.

From May 2002 to August 2007, he served as Corporate Vice President of Cellular Products Group (previously known as Wireless Products until 2004), for RFMD.

Creviston received a Master’s degree in Electrical and Electronics Engineering from the University of Illinois.

Creviston’s previous experience in various leadership roles in Qorvo and RFMD adds invaluable knowledge to our Board with respect to assessing our business strategies, evaluating operating performance, assessing risks, and evaluating potential merger and acquisition opportunities, all of which qualify him for service as one of our directors.

Joseph Menaker, 67

Menaker was appointed to the Board in November 2018, and prior to that was a consultant to the Board beginning in March 2018, and prior to that was a consultant to us beginning in December 2016.

From 1998 to 2016, he served as President of ISP, and as a director of its wholly owned subsidiary, ISP Latvia, until we acquired ISP in December 2016.

Menaker is a graduate of Latvian State University, where he received his Bachelor and Master of Science degrees in Economics.

Menaker received a Doctor of Philosophy degree in Economics from Leningrad Institute of Finance and Economics.

He co-founded UAV Factory Ltd.

(“UAVF”) in Latvia in 2009 and served as its CEO from January 2017 to January 2021.

Menaker continues to serve as a member of the Board of Directors for UAVF, which became part of Edge Autonomy Holdings.

Edge Autonomy Holdings is a leading manufacturer of unmanned aerial vehicles.

Menaker is also a Board Member of Alpha Unmanned Systems, Spanish Company specializing in the unmanned rotary systems.

He also serves as a board member for Tsal Kaplun Foundation, a non-profit organization.

Menaker’s expertise gained in various roles in financial management, international operations, and manufacturing high tech products and their applications for over thirty years, coupled with his knowledge gained as a researcher and analyst in economics provide invaluable knowledge to our Board and qualify him for service as one of our directors.

Darcie Peck, 66

Peck has served as one of our directors since November 2019.

Peck served as a consultant to the Board beginning in April 2019.

Prior to that she served as a Managing Partner of a start-up employee engagement consultancy firm from June 2017 through February 2019 and she currently works with and advises private companies in short and long term cash, capital planning and strategies.

From May 2013 until February 2016, Ms.

Peck served as the Vice President Finance, Global Services for IMS Health Inc.

(“IMS Health,” now IQVIA Holdings Inc.), a technology and analytics company serving life sciences companies near Danbury, Connecticut.

From November 2009 until May 2013, Ms.

Peck was Vice President Financial Planning and Analysis for IMS Health.

From May 2002 through November 2009, Ms.

Peck was Vice President Finance and Investor Relations for IMS Health.

Prior to that, Ms.

Peck was Vice President Finance, IBM Software Group (a division of International Business Machines Corp., or “IBM”) in Somers, New York from March 2001 to May 2002.

From 1982 through to 2001, she held progressively increasing leadership responsibilities at IBM in finance, including Chief Financial Officer and General Manager of several acquired companies in technology, manufacturing, and computer leasing.

Peck earned a Bachelor of Arts degree in Biology at the University of Rochester and a Master’s degree in Business Administration from New York University Stern Graduate School of Business Administration.

Peck’s expertise in executive leadership, financial and strategic planning, investor relations, international business, general management, business and pricing acumen, and high technology manufacturing process knowledge, uniquely qualifies her for service as one of our directors.

Class III Directors

Kim Crider, 59

Crider is a highly experienced executive and has served as a director on boards for both private and public companies.

She has held executive leadership positions in several multi-billion-dollar enterprises over the past 10 years, with deep expertise in aerospace, cybersecurity, data/AI and information technology.

Crider presently has served as a member of the Board of Directors for the National Cybersecurity Center since July 2021, and for the Catalyst Campus for Technology & Innovation since January 2022.

She also serves as a Board Advisor for Aalyria Technologies, Inc.

a position she has held since January 2022.

Crider served as a member of the Board of Directors of Virgin Orbit National Systems, LLC from April 2022 to August 2023.

Crider is a founding partner and since its inception in May 2023, has served as the Co-Chief Executive Officer of Elara Nova Space Consultancy, LLC, a premier global advisory firm focused on the space sector.

From 2016 to 2021, she was President of Kim Crider & Associates, LLC and Leadership Matters, LLC, specialized consulting firms providing executive consulting and coaching services to CEOs, CIOs, CTOs and other C-Suite leaders across industry sectors.

A retired Major General in the United States Air Force, after serving in progressive leadership roles from 1986-2019, she also served as the first Chief Technology and Innovation Officer for the United States Space Force, Pentagon Washington D.C.

from 2019 to 2021.

Crider earned a Bachelor of Science degree in Electrical Engineering from Duke University in North Carolina, a Master of Business Administration degree from Western New England College in Massachusetts, a Master of Science in Military Studies from Air Command and Staff College in Alabama, a Master of Science in National Resource Strategy from National Defense University in Washington, D.C., and a Graduate Certificate in Organizational Behavior from Harvard University in Massachusetts.

Crider’s expertise in corporate accountability, compliance, special security agreements, CEO transition/succession planning, cybersecurity risk management and oversight, uniquely qualifies her for service as one of our directors.

Shmuel Rubin, 50

President & Chief Executive

Officer, Director

Rubin has served as our President, Chief Executive Officer, and as a Director since March 2020.

Rubin is also Chief Executive Officer and a director of LightPath Optical Instrumentation (Shanghai) Co., Ltd.

(“LPOI”), our wholly-owned subsidiary located in Jiading, People’s Republic of China, LightPath Optical Instrumentation (Zhenjiang) Co., Ltd.

(“LPOIZ”), our wholly-owned subsidiary located in the New City District, of the Jiangsu province of the People’s Republic of China, ISP Optics Corporation (“ISP”), our wholly-owned subsidiary, located in Orlando, Florida, and ISP Optics Latvia SIA (“ISP Latvia”), our wholly-owned subsidiary located in Riga, Latvia.

Prior to joining us, Mr.

Rubin was formerly the General Manager at Thorlabs Inc.

(“Thorlabs”).

Rubin’s prior senior executive role at Thorlabs, he was responsible for Thorlabs’ Imaging Systems Division, a standalone organization with its own sales and marketing, as well as global responsibility for all of Thorlabs’ Life Science activities.

Among the positions he held at Thorlabs, Mr.

Rubin founded and grew Thorlabs’s fast growing operation in China, and spearheaded Thorlabs’ entry and significant growth in the Life Sciences market.

As a member of the senior executive team, Mr.

Rubin led new strategic initiatives for Thorlabs, including new product lines, acquisitions and growth into new markets.

Prior to joining Thorlabs, Mr.

Rubin co-founded Xlight Photonics, an optical communication startup, which was later sold to a telecommunications private equity firm.

Rubin holds a Bachelor of Science degree in Electronic Engineering from Ben Gurion University, a Master of Business Administration degree from New York University, Stern School of Business, and is a graduate of the Executive Education, Program for Leadership Development at Harvard Business School.

Rubin’s significant management experience in the optical industry qualifies him to lead us and our business and serve as one of our directors.

Executive Officers Who Do Not Serve as Directors

Albert Miranda, 57

Chief Financial Officer

Miranda joined the Company in April 2021 and was appointed as our Chief Financial Officer on May 7, 2021.

Miranda was previously employed with Jenoptik North America, Inc.

(“Jenoptik”) for twelve years and held the positions of President and Chief Financial Officer.

Prior to his employment with Jenoptik, he held senior level finance and operational positions in optical products groups within Carl Zeiss AG and served in the finance department for a division of BASF SE.

Miranda received an undergraduate degree in Public Accounting from Pace University in New York.

He attained significant professional experience and management expertise through key functional areas encompassing finance, operations, business development, sales, marketing, human resources, and information technology across a broad group of products and services in demanding and diverse industries including healthcare, defense and security, consumer electronics, automotive, and semiconductors.

Family Relationships

There are no family relationships among our executive officers and directors.

Corporate Codes and Policies

The Board approved an Amended and Restated Code of Business Conduct and Ethics (the “Code”) on April 28, 2016.

The Code applies to all of our employees, officers, and directors, including our principal executive officer, principal financial officer, and principal accounting officer or controller, or persons performing similar functions.

The Board also approved an Amended and Restated Code of Business Conduct and Ethics for Senior Financial Officers (the “Senior Financial Officer Code”), which applies to our Chief Executive Officer, Chief Financial Officer, principal accounting officer, controller, accounting manager, and persons performing similar functions.

Copies of the Code and the Senior Financial Officer Code are available on our website at www.lightpath.com , under the “Investors” tab, or may be obtained free of charge by writing to:

Corporate Secretary, LightPath Technologies, Inc., 2603 Challenger Tech Court, Suite 100, Orlando, Florida 32826.

Insider Trading Policy

Our written Guide for Trading in Securities governs trading activity by directors, officers and employees, was adopted by the Board in 2018.

Employees and directors are prohibited from selling or buying publicly traded options on LightPath stock, or trading in any LightPath stock derivatives.

Additionally, these individuals may not engage in transactions in which they may profit from short-term speculative swings in the value of LightPath stock utilizing “short sales” or “put” or “call” options, and they are prohibited from holding LightPath stock in a margin account or pledging Company securities as collateral for a loan.

Independent Committees

In accordance with the The Nasdaq Capital Market (the “NCM”) and SEC rules, the Board affirmatively determines the independence of each director and director nominee in accordance with guidelines it has adopted, which include all elements of independence set forth in the NCM listing standards.

Based on these standards, the Board has determined that as of the end of fiscal year 2024, each of the following non-employee directors was independent and has no relationship with us, except as one of our directors and stockholders:

Eric Creviston

Joseph Menaker

Based on these standards, the Board determined Shmuel Rubin, currently a Class III Director, is not independent.

All of the members of the Audit, Nominating, and Compensation Committees are independent.

Board Committees

The Board has an Audit Committee (the “Audit Committee”), a Compensation Committee (the “Compensation Committee”), a Nominating and Corporate Governance Committee (the “Nominating Committee”), and a Finance Committee (the “Finance Committee”).

Audit Committee.

The Audit Committee, which as of June 30, 2024, consisted of Darcie Peck (Chair), Dr.

Joseph Menaker, and Kim Crider, met four times during fiscal year 2024.

The meetings included discussions with management and with our independent registered public accounting firm to discuss our interim and annual consolidated financial statements and our annual report, and the effectiveness of our financial and accounting functions and organization.

The Audit Committee acts pursuant to a written charter adopted by the Board, a copy of which is available on our website at www.lightpath.com under the “Investors” and “Governance” tabs.

The Audit Committee’s responsibilities include, among others, engaging and terminating our independent registered public accounting firm, oversight of the independent registered public accounting firm, and determining the compensation for their engagement(s).

The Board has determined that the Audit Committee is comprised entirely of independent members as defined under applicable listing standards set out by the SEC and NCM.

The Board has also determined that all three members of the Audit Committee are “audit committee financial experts” as defined by SEC rules and qualify as independent in accordance with the NCM rules.

Their respective business experience that qualifies each director to be determined as “audit committee financial expert” is described above.

Compensation Committee.

The Compensation Committee, which as of June 30, 2024, consisted of M.

Scott Faris (Chair), Darcie Peck, and S.

Eric Creviston, met once during fiscal year 2024.

The Compensation Committee acts pursuant to a written charter adopted by the Board, a copy of which is available on our website at www.lightpath.com under the “Investors” and “Governance” tabs.

The Compensation Committee is responsible for establishing, implementing, and continually monitoring our compensation policies and philosophy, including administering our 2018 Omnibus Incentive Plan (the “SICP”), pursuant to which incentive awards, including restricted stock units and stock options, are granted to our directors, executive officers, and key employees.

The Compensation Committee is responsible for determining executive compensation, including approving recommendations regarding equity awards to all of our executive officers.

However, the Compensation Committee does rely on the annual reviews made by the Chief Executive Officer with respect to the performance of each of our other executive officers.

The conclusions reached, and recommendations made based on these reviews, including with respect to salary adjustments and annual award amounts, are presented to the Compensation Committee.

The Compensation Committee can exercise its discretion in modifying any recommended adjustments or awards to executive officers.

In the case of the Chief Executive Officer, compensation is determined solely based on the review conducted by the Compensation Committee.

The Compensation Committee also annually reviews director compensation to ensure non-employee directors are adequately compensated for the time expended in fulfilling their duties to us, as well as the skill-level required by us of members of the Board.

After the Compensation Committee completes their annual review, they make recommendations to the Board regarding director compensation.

The Compensation Committee regularly engages compensation consultants to assist with the Compensation Committee’s responsibilities related to our executive compensation program and the director compensation program.

The Compensation Committee plans to engage a consultant every two years to review and make recommendations on the Company’s executive compensation plans.

Finance Committee.

The Finance Committee, which as of June 30, 2024, consisted of S.

Eric Creviston (Chair), Dr.

Joseph Menaker, and M.

Scott Faris met once during fiscal year 2024.

The Finance Committee acts pursuant to a written charter adopted by the Board, a copy of which is available on our website at www.lightpath.com under the “Investors” and “Governance” tabs.

The Finance Committee oversees our financial management, including overseeing our strategic and transactional planning and activities, global financing, capital structure objectives and plans, insurance programs, tax structure, and investment program and policies.

Nominating and Corporate Governance Committee.

The Nominating Committee, which as of June 30, 2024, consisted of M.

Scott Faris (Chair), S.

Eric Creviston, and Darcie Peck, met once during fiscal year 2024.

The Nominating Committee acts pursuant to a written charter adopted by the Board, a copy of which is available on our website at www.lightpath.com under the “Investors” and “Governance” tabs.

The Nominating Committee carries out the responsibilities delegated by the Board relating to our director nominations process and procedures, and developing, maintaining, and monitoring compliance with the Company’s corporate governance policies, guidelines, and activities.

The Nominating Committee determines the qualifications, qualities, skills, and other expertise required to be a director and to develop, and recommend to the Board for its approval, criteria to be considered in selecting nominees for director.

Further, the gender, racial, experience, and skills diversity of the Board is also a factor in our director recruitment process.

However, the Nominating Committee and the Board believe that at this time, it is unnecessary to adopt criteria for the selection of directors.

Instead, the Nominating Committee and the Board believes that the desirable background of a new individual member of the Board may change over time and that a thoughtful, thorough selection process is more important than adopting criteria for directors.

They will also identify, recruit, and screen candidates for the Board, consistent with criteria approved by the Board.

The Nominating Committee and Board is fully open to utilizing whatever methodology is efficient in identifying new, qualified directors when needed, including industry contacts of our directors or professional search firms.

The Nominating Committee also considers any director candidates recommended by our stockholders and any nominations of director candidates validly made by stockholders in accordance with applicable laws, rules, and regulations, and the provisions of our charter documents.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires our directors, executive officers, and any person beneficially owning more than 10% of our common stock to file reports concerning their ownership of our equity securities with the SEC.

Based solely on a review of the forms filed electronically with the SEC during Fiscal 2024 and on written representations that no Form 5 was required to be filed, we believe that, during Fiscal 2024, all of our directors, executive officers, and persons who beneficially owned more than 10% of our common stock timely complied with the Section 16(a) filing requirements.

Executive Compensation.

Named Executive Officers

During fiscal year 2024, our named executive officers were as follows:

Shmuel Rubin, our current President and Chief Executive Officer, and a director;

Albert Miranda, our current Chief Financial Officer.

Compensation Philosophy and Objectives

Our compensation policy is designed to attract and retain qualified key executive officers critical to our achievement of reaching and maintaining profitability and positive cash flow, and subsequently our growth and long-term success.

To attract, retain, and motivate the executive officers to accomplish our business strategy, the Compensation Committee establishes our executive compensation policies and oversees our executive compensation practices.

The Compensation Committee believes that the most effective executive compensation program is one that is designed to recognize the achievement of our specific short-term and long-term goals, and which aligns executives’ interests with those of the stockholders by rewarding performance that meets or exceeds established goals, with the ultimate objective of improving stockholder value.

It is the objective of the Compensation Committee to have a portion of each named executive officer’s compensation contingent upon our performance as well as upon the individual’s personal performance.

Accordingly, each named executive officer’s compensation package is comprised of two elements:

(i) base salary, which reflects individual performance and expertise and (ii) short-term and long-term incentive awards, which are tied to the achievement of certain performance goals that the Compensation Committee establishes from time to time.

The Compensation Committee has structured compensation of our named executive officers to incentivize achievement of our business goals and reward our named executive officers for achieving such goals.

The Compensation Committee also evaluates our compensation program to ensure that we maintain the ability to attract and retain superior employees in key positions and that compensation provided to key employees remains competitive relative to the compensation paid to similarly situated executive officers.

In accordance with the advisory “say-on-frequency” vote of our stockholders at the fiscal year 2017 annual meeting of stockholders, held in January 2017, and as approved by the Board, we will include an annual advisory “say-on-pay” vote in our proxy statement, including the Proxy Statement for the fiscal year 2024 annual meeting of stockholders.

Our next required stockholder advisory “say-on-frequency” vote will occur at our fiscal year 2030 annual meeting of stockholders.

The most recent “say-on-pay” advisory vote occurred at the fiscal year 2023 annual meeting of stockholders, at which our stockholders approved, on an advisory basis, the compensation of our named executive officers.

Setting Executive Compensation

In making compensation decisions, the Compensation Committee relies on the following:

the annual reviews made by the Chief Executive Officer with respect to the performance of each of our other named executive officers;

the annual review conducted by the Compensation Committee with respect to the performance of the Chief Executive Officer;

compensation paid to executive officers of other manufacturing companies similar in size and scope as us and our competitors;

our annual performance with respect to our short-term and long-term strategic plan.

There is no pre-established policy or target for the allocation between either cash and non-cash or short-term and long-term incentive compensation.

Rather, the Compensation Committee annually reviews information to determine the appropriate level and mix of incentive compensation when determining our executive compensation plan.

Based on these factors, the Compensation Committee makes compensation decisions, including salary adjustments, annual short-term cash incentive awards, and long-term equity incentive awards for our named executive officers.

Retirement Benefits

We offer a qualified 401(k) defined contribution plan.

The ability of named executive officers to participate fully in this plan is limited under the requirements of the Internal Revenue Code of 1986, as amended, and the Employment Retirement Income Security Act of 1974, as amended.

We currently match 100% of the first 2% of employee contributions.

Executive Compensation and Risk

Although a substantial portion of the compensation paid to our named executive officers is performance-based, we believe our executive compensation programs do not encourage excessive and unnecessary risk-taking by our named executive officers because these programs are designed to encourage our named executive officers to remain focused on both our short-term and long-term operation and financial goals.

We achieve this balance through a combination of elements in our overall compensation plans, including:

(i) elements that reward different aspects of short-term and long-term performance;

(ii) incentive compensation that rewards performance on a variety of different measures;

and (iii) cash awards and stock option awards, to encourage alignment with the interests of stockholders.

Clawback Policy

The Compensation Committee of the Board has adopted a formal Compensation Clawback Policy, as required by the NASDAQ Listing Standards.

The Clawback Policy provides for the recovery of incentive-based compensation erroneously received by current or former executive officers during the three fiscal years immediately preceding the year in which the company is required to prepare an accounting restatement due to material noncompliance with financial reporting requirements.

The requirements under the Clawback Policy are separate from any recoupment required by the Sarbanes-Oxley Act of 2002.

The Committee also has discretion to seek recovery of any amount that it determines was received otherwise inappropriately by such individuals.

2024 Incentive Program

Our fiscal year 2024 incentive program has two key components:

(i) the Short-Term Incentive (“STI”) program, and (ii) the Long-Term Incentive (“LTI”) program.

The STI program is comprised of awards based on our achievement of specific fiscal year 2024 financial objectives (the “2024 STI Award”).

The LTI program is comprised of (i) an individual RSU award, based on total shareholder return (the “2024 TSR Award”), which is calculated based on the overall change in LPTH stock price per share, as compared to the Russell MicroCap Index, and (ii) retention RSUs that will vest in three equal annual installments (the “2024 Retention RSU Award” and, together with the 2024 LTI TSR Award, the “2024 LTI Awards”).

Our incentive program includes different levels of bonus opportunity based on a participant’s position with the Company.

For fiscal year 2024, Mr.

Rubin was the only “level one” participant, and Mr.

Miranda was a “level two” participant.

Bonus opportunities for Mr.

Rubin and Mr.

Miranda for fiscal year 2024 were calculated by applying designated portions of their respective bonus pool amounts, which were set by the Compensation Committee, to formulas for each of the components of the STI and LTI programs, as applicable.

For both the level one and level two participant, the 2024 STI Award was based on the achievement of corporate financial objectives and personalized goals, with a minimum of 60% of the EBITDA target required to earn any bonus.

The corporate financial objectives are as follows:

(i) EBITDA (which is earnings before income, taxes, depreciation, and amortization) (the “EBITDA Component”);

and (ii) revenue growth over that of the prior fiscal year (the “Revenue Component”).

The EBITDA Component was weighted at 60%, the Revenue Component was weighted at 20%, and the personalized goals were weighted at 20%.

For fiscal year 2024, the bonus pool amounts for the 2024 STI Award for Mr.

Rubin and Mr.

Miranda were set at $193,832 and $98,280, respectively.

The Compensation Committee determined that achievement of the 2024 STI Award would be paid in cash and stock options, with the percentage split of the payout to be determined at the discretion of the Board.

EBITDA Component

In order for the participants to earn a bonus with respect to the EBITDA Component, we had to meet or exceed a minimum EBITDA target established by the Compensation Committee for fiscal year 2024.

Further, we had to meet or exceed at least 60% of that EBITDA target in order to earn any portion of the 2024 STI Award.

For fiscal year 2024, EBITDA was a loss of approximately $3.7 million, which was below the target amount.

The achieved EBITDA also did not meet 60% of the EBITDA target.

Accordingly, Mr.

Rubin and Mr.

Miranda did not earn any portion of the 2024 STI Award.

The 2024 LTI Awards are comprised of two components:

(i) the 2024 Retention RSU Award and (ii) the 2024 TSR Award.

For fiscal year 2024, the bonus pool amounts for the 2024 LTI Award for Mr.

Rubin and Mr.

Miranda were set at $164,980 and $71,626, respectively.

The bonus pool amounts for the 2024 Retention RSU Award and the 2024 TSR Award would each be 50% of the respective bonus pool amount for the 2024 LTI Award.

2024 Retention RSU Award

The 2024 Retention RSU Award was calculated to be $82,490 and $35,813 for Mr.

Rubin and Mr.

Miranda, respectively.

The RSUs were granted on January 31, 2024, based on the closing bid price of $1.37 on that day, with one-third of the RSUs to vest on each of the first, second and third anniversaries of the grant date.

2024 TSR Award

In order to earn the 2024 TSR Award, the TSR calculated for LPTH stock was measured against the Russell MicroCap Index.

TSR is calculated as the overall change in LPTH’s stock price per share from the beginning of fiscal year 2024 to the end of fiscal year 2024, divided by the stock price per share at the beginning of the fiscal year.

The calculated TSR for fiscal year 2024 was less favorable than the change in the Russell MicroCap Index, therefore the 2024 TSR Award was not earned.

2023 Incentive Program

Our fiscal year 2023 incentive program has two key components:

(i) the Short-Term Incentive (“STI”) program, and (ii) the Long-Term Incentive (“LTI”) program.

The STI program is comprised of awards based on our achievement of specific fiscal year 2023 financial objectives (the “2023 STI Award”).

The LTI program is comprised of (i) an individual RSU award, based on total shareholder return (the “2023 TSR Award”), which is calculated based on the overall change in LPTH stock price per share, as compared to the Russell MicroCap Index, and (ii) retention RSUs that will vest in three equal annual installments (the “2023 Retention RSU Award” and, together with the 2023 LTI TSR Award, the “2023 LTI Awards”).

Our incentive program includes different levels of bonus opportunity based on a participant’s position with the Company.

For fiscal year 2023, Mr.

Rubin was the only “level one” participant, and Mr.

Miranda was a “level two” participant.

Bonus opportunities for Mr.

Rubin and Mr.

Miranda for fiscal year 2023 were calculated by applying designated portions of their respective bonus pool amounts, which were set by the Compensation Committee, to formulas for each of the components of the STI and LTI programs, as applicable.

For both the level one and level two participant, the 2023 STI Award was based on the achievement of corporate financial objectives and personalized goals, with a minimum of 60% of the EBITDA target required to earn any bonus.

The corporate financial objectives are as follows:

(i) EBITDA (which is earnings before income, taxes, depreciation, and amortization) (the “EBITDA Component”);

and (ii) revenue growth over that of the prior fiscal year (the “Revenue Component”).

The EBITDA Component was weighted at 60%, the Revenue Component was weighted at 20%, and the personalized goals were weighted at 20%.

For fiscal year 2023, the bonus pool amounts for the 2023 STI Award for Mr.

Rubin and Mr.

Miranda were set at $186,377 and $94,500, respectively.

The Compensation Committee determined that achievement of the 2023 STI Award would be paid in cash and stock options, with the percentage split of the payout to be determined at the discretion of the Board.

EBITDA Component

In order for the participants to earn a bonus with respect to the EBITDA Component, we had to meet or exceed a minimum EBITDA target established by the Compensation Committee for fiscal year 2023.

Further, we had to meet or exceed at least 60% of that EBITDA target in order to earn any portion of the 2023 STI Award.

For fiscal year 2023, EBITDA was a loss of approximately $355,000, which was below the target amount.

The achieved EBITDA also did not meet 60% of the EBITDA target.

Accordingly, Mr.

Rubin and Mr.

Miranda did not earn any portion of the 2023 STI Award.

The 2023 LTI Awards are comprised of two components:

(i) the 2023 Retention RSU Award and (ii) the 2023 TSR Award.

For fiscal year 2023, the bonus pool amounts for the 2023 LTI Award for Mr.

Rubin and Mr.

Miranda were set at $158,635 and $68,871, respectively.

The bonus pool amounts for the 2023 Retention RSU Award and the 2023 TSR Award would each be 50% of the respective bonus pool amount for the 2023 LTI Award.

2023 Retention RSU Award

The 2023 Retention RSU Award was calculated to be $79,318 and $34,436 for Mr.

Rubin and Mr.

Miranda, respectively.

The RSUs were granted on November 17, 2022, based on the closing bid price of $1.18 on that day, with one-third of the RSUs to vest on each of the first, second and third anniversaries of the grant date.

2023 TSR Award

In order to earn the 2023 TSR Award, the TSR calculated for LPTH stock was measured against the Russell MicroCap Index.

TSR is calculated as the overall change in LPTH’s stock price per share from the beginning of fiscal year 2023 to the end of fiscal year 2023, divided by the stock price per share at the beginning of the fiscal year.

The calculated TSR for fiscal year 2023 was more favorable than the change in the Russell MicroCap Index, therefore the 2023 TSR Award was earned.

The 2023 TSR Award was calculated to be $79,318 and $34,436 for Mr.

Rubin and Mr.

Miranda, respectively.

The RSUs were granted on January 31, 2024, following the annual stockholder meeting, based on the closing bid price on that day, with one-third of the RSUs to vest on each of the first, second and third anniversaries of the grant date.

2021 Incentive Program

The 2021 incentive program included a multi-year award with performance targets for fiscal years 2021, 2022 and 2023.

Rubin was eligible for this award, however no points were earned toward this award.

Summary Compensation Table

The following table sets forth certain compensation awarded to, earned by or paid to (i) any individuals serving as our Chief Executive Officer during fiscal year 2024 and (ii) our two other most highly compensated executive officers serving as executive officers at the end of fiscal year 2024 Mr.

Miranda was the only other individual serving as an executive officer at the end of fiscal year 2024.

Incentive Plan

Name and Position

$ 378,092 (4)

President & Chief Executive Officer

$ 360,500 (4)

$ 171,765 (4)

Albert Miranda

$ 243,059 (5)

Chief Financial Officer

$ 231,750 (5)

For valuation assumptions on stock awards refer to Note 10 to the Consolidated Financial Statements of our Annual Report on Form 10-K for fiscal year 2024.

The disclosed amounts reflect the fair value of the RSU awards that were earned during the fiscal years ended June 30, 2024 and 2023 in accordance with FASB ASC Topic 718.

No stock option awards were granted to Mr.

Miranda during the fiscal years ended June 30, 2024 and 2023.

“All Other Compensation,” as defined by SEC rules does not include the amounts that qualify under the applicable de minimis rule for all periods presented.

The de minimis rules does not require reporting of perquisites and other compensation that totals less than $10,000 in the aggregate.

For fiscal year 2024 and 2023, the nature of these compensatory items includes our contribution toward the premium costs for employee and dependent medical, life, and disability income insurances, benefits generally available to our employees, vacation buyout, and the Company’s match on contributions under the 401k plan.

Rubin’s base salary was 79% and 65% of his total compensation for fiscal years 2024 and 2023, respectively.

For fiscal year 2024, Mr.

Rubin was granted an RSU award in connection with the 2024 Retention RSU Award.

For fiscal year 2023, Mr.

Rubin was granted an RSU award in connection with the 2023 Retention RSU Award and was also granted an RSA Award in lieu of an adjustment to his cash compensation.

The amounts in the table reflect the fair value of these awards in accordance with FASB ASC Topic 718.

For additional information with respect to this grant, including the vesting schedules, please see “Discussion of Summary Compensation Table of Named Executive Officers” below.

Miranda’s base salary was 83% and 70% of his total compensation for fiscal years 2024 and 2023, respectively.

For fiscal year 2024 Mr.

Miranda was granted an RSU award in connection with the 2024 Retention RSU Award.

For fiscal year 2023, Mr.

Miranda was granted an RSU award in connection with the 2023 Retention RSU Award and was also granted an RSA Award in lieu of an adjustment to his cash compensation.

The amount in the table reflects the fair value of this award in accordance with FASB ASC Topic 718.

For additional information with respect to these grants, including the vesting schedules, please see “Discussion of Summary Compensation Table of Named Executive Officers” below.

Narrative Discussion of Summary Compensation Table of Named Executive Officers

The following is a narrative discussion of the material information that we believe is necessary to understand the information disclosed in the foregoing Summary Compensation Table.

With respect to fiscal year 2024, each named executive officer received a base salary and certain named executive officers were eligible for a 2024 STI Award, a 2024 Retention RSU Award, and a 2024 TSR Award.

Information on the specific components of executive compensation for fiscal year 2024 can be found above under the heading “2024 Incentive Program.” With respect to fiscal year 2023, each named executive officer received a base salary and certain named executive officers were eligible for a 2023 STI Award, a 2023 Retention RSU Award, and a 2023 TSR Award.

Information on the specific components of executive compensation for fiscal year 2023 can be found above under the heading “2023 Incentive Program.”

Employment Agreements

In connection with Mr.

Rubin’s appointment, the Company entered into an employment agreement with Mr.

Rubin on February 24, 2020 (the “Rubin Employment Agreement”).

The Company and Mr.

Rubin orally agreed that Mr.

Rubin’s appointment as the President and CEO of the Company would be effective on March 9, 2020.

The Agreement does not provide for a specified term of employment and Mr.

Rubin’s employment is on an at-will basis.

Rubin receives an annual base salary of $390,000, payable in equal bi-weekly installments, and is eligible to participate in all of the Company’s bonus, incentive compensation, and performance based compensation plans, including, but not limited to the “SICP”, under which the Company’s executive officers are eligible to earn incentive compensation consisting of cash and/or equity awards based upon the achievement of certain individual and/or Company performance goals set by the Compensation Committee.

The Company’s incentive bonus program includes different levels of bonus opportunity based on a participant’s position with the Company.

For this purpose, Mr.

Rubin is considered a “level one” participant.

Rubin is eligible to participate in the Company’s employee benefit, welfare, and other plans, as may be maintained by the Company from time to time.

The Company also agreed to provide a relocation allowance of up to $50,000 payable by the Company on receipt of relocation expense receipts.

The total period for relocation reimbursement concluded on August 1, 2020.

The Company will provide up to $15,000 in addition to the reimbursed relocation expenses to account for federal income taxes incurred by Mr.

Rubin as a result of the relocation reimbursement.

Rubin was required to reimburse the Company a prorated portion of all expenses paid by the Company if he left the Company for any reason other than death, disability, or discharge without cause within twelve (12) months of his relocation.

Pursuant to the Rubin Employment Agreement, Mr.

Rubin was granted, on a one-time basis, a restricted stock award consisting of 100,000 shares of the Company’s Class A common Stock, par value $0.01 per share, with 50% of the shares of the Class A common stock vesting on the third anniversary of the grant date, and the remaining 50% vesting on the fourth anniversary of the grant date.

The restricted stock award will be in all respects subject to the SICP and any amendments thereto, and conditioned upon Mr.

Rubin’s execution of a restricted stock award agreement evidencing the grant.

Also pursuant to the Rubin Employment Agreement, Mr.

Rubin was granted option to purchase 225,000 shares of the Company’s Class A common stock, having an exercise price per share equal to the greater of (i) $1.37 per share or (ii) 115% of the closing bid price of the Class A common stock as reported on the NCM on the grant date, or February 24, 2020.

Fifty-thousand shares of the Common Stock underlying the stock option will vest on each of the first, second, and third, anniversaries of the grant date, with the remaining seventy-five thousand shares of the Common Stock vesting on the fourth anniversary of the grant date.

The option award will have a ten-year term, subject to earlier expiration as provided in the SICP or the option agreement.

The option award will be in all respects subject to the SICP and any amendments thereto, and conditioned upon Mr.

Rubin’s execution of a stock option agreement evidencing the grant of the option award.

Albert Miranda

In connection with Mr.

Miranda’s appointment, we entered into an employment agreement with Mr.

Miranda on April 19, 2021 (the “Miranda Employment Agreement”).

Pursuant to the Miranda Employment Agreement, Mr.

Miranda served as Vice President of Finance beginning on April 19, 2021 until May 7, 2021, at which time, Mr.

Miranda transitioned into the role of Chief Financial Officer.

The Miranda Employment Agreement does not provide for a specified term of employment and Mr.

Miranda’s employment is on an at-will basis.

Miranda receives an annual base salary of $251,000, payable in equal bi-weekly installments, and is eligible to participate in all of our bonus, incentive compensation, and performance based compensation plans, including, but not limited to, the SICP, under which our executive officers are eligible to earn incentive compensation consisting of cash and/or equity awards based upon the achievement of certain individual and/or performance goals set by the Compensation Committee.

Miranda is eligible to participate in our employee benefit, welfare, and other plans, as may be maintained by us from time to time.

We agreed to provide a relocation allowance of up to $10,000 payable by us on receipt of relocation expense receipts.

The total period for relocation reimbursement concluded six months from the effective date of the Miranda Employment Agreement;

however, exceptions may be granted by the Compensation Committee.

Miranda must reimburse the Company a prorated portion of all expenses paid by us if he leaves us for any reason other than death, disability, or discharge without cause within twelve (12) months of his relocation.

Pursuant to the Miranda Employment Agreement, we granted Mr.

Miranda an option to purchase up to 75,000 shares of Class A common stock, having an exercise price per share equal to the greater of (i) our book value per share on that date or (ii) 115% of the closing bid price of the Class A common stock as reported on the NCM on the grant date.

The stock options will have a four-year vesting period with 25% vesting each year.

The option award will have a ten-year term, subject to earlier expiration as provided in the SICP or the option agreement, as defined below.

The option award will be in all respects subject to the SICP and any amendments thereto, and the option award.

Potential Payments Upon Termination or Change-of-Control

Rubin nor Mr.

Miranda are entitled to any payments upon termination or change-of-control.

Outstanding Equity Awards at Fiscal Year-End

Option Awards

Unexercisable

225,000 -- $ 1.58 50,000 shares/yr for 3 yrs;

75,000 shares on 4th anniversary

11/11/2031 14,138

3 years, 1/3 per year

11/17/2032 44,813

3 years, 1/3 per year

1/31/2034 118,108

3 years, 1/3 per year

Albert Miranda

56,250 18,750 $ 3.02 4/19/2031 25%/yr for 4 yrs

11/11/2031 6,139 $ 7,673

3 years, 1/3 per year

11/17/2032 19,455 $ 24,319

3 years, 1/3 per year

1/31/2034 51,277 $ 64,096

3 years, 1/3 per year

The stock options were issued pursuant to the SICP and have a ten-year life.

The options will terminate 90 days after termination of employment, or in the case of termination due to death or permanent disability, the options will terminate one year after the date of termination.

Director Compensation

The table below summarizes the compensation paid by us to non-employee directors for fiscal year 2024:

Fees Earned or

Scott Faris, Chair

Louis Leeburg

Joseph Menaker

Eric Creviston

Shmuel Rubin, our President and Chief Executive Officer during fiscal year 2024, is not included in this table as he was an employee and, thus, received no compensation for his services as a director.

The compensation received by Mr.

Rubin as an employee is disclosed in the Summary Compensation Table on page 48.

Total fees earned for fiscal year 2024 includes all fees earned, including earned but unpaid fees.

The amounts of unpaid fees for each director as of June 30, 2024, were as follows:

Faris - $41,250, Mr.

Leeburg - $11,000, Ms.

Crider - $18,000, Dr.

Menaker - $27,000, Ms.

Peck - $31,000 and Mr.

Creviston - $30,000.

Leeburg retired during fiscal 2024, and was compensated through the last quarter he served as a director.

The table reflects the fair value amount for RSUs granted for the fiscal year ended June 30, 2024, in accordance with ASC Topic 718.

The directors were entitled to a restricted stock award equal to $60,000.

The Company has a policy of granting performance-related stock options and RSUs at the greater of the closing bid price of our Class A common stock on the grant date or the book value per share of our Class A common stock as of the end of the most recent fiscal quarter.

The fiscal year 2024 director award of 43,796 RSUs was based on the closing bid price of our Class A common stock on the grant date, or $1.37.

Discussion of the Summary Compensation Table of Directors

The following is a discussion of the material information that we believe is necessary to understand the information disclosed in the Summary Compensation Table.

We use a combination of cash and stock-based incentive compensation to attract and retain qualified candidates to serve on our Board.

In setting director compensation, we consider the significant amount of time that directors expend in fulfilling their duties as a director as well as the skill-level required by us of members of our Board.

For fiscal year 2024, the cash and stock-based incentive compensation awarded to directors remained essentially at the same levels set in fiscal year 2023.

For fiscal year 2025, the cash and stock-based incentive compensation awarded to directors is expected to remain at the same levels set in fiscal 2024.

Cash Compensation Paid to Board Members

During fiscal year 2024, directors received a monthly retainer of $3,000 per month.

There are no meeting attendance fees paid unless, by action of the Board, such fees are deemed advisable due to a special project or other effort requiring extra-normal commitment of time and effort.

Additionally, fees are paid to the Chair of the Board and Committee Chairs for their additional responsibilities in overseeing their respective functions.

Due to mid-year director appointments and committee changes, certain fees were pro-rated for fiscal year 2024.

The following table sets forth the annual fees paid to each director for fiscal year 2024:

Louis Leeburg

Joseph Menaker

Eric Creviston

Shmuel Rubin (1)

Rubin did not receive any compensation for his service as a director because he is also an employee.

Stock Option/Restricted Stock Program

All directors are eligible to receive equity incentives under the SICP, including stock options, restricted stock awards, or RSUs.

In fiscal year 2024, the following directors received grants under the SICP:

Name of Director (1)

Restricted Stock Units

Number of Units Granted

Fair Value Per Share

Scott Faris, Chair

Joseph Menaker

Eric Creviston

Rubin did not receive any compensation for his service as a director because he is also an employee.

Security Ownership of Certain Beneficial Owners and Management.

The following table sets forth, as of September 6, 2024, the number and percentage of outstanding shares of our Class A common stock, owned by:

(i) each of our directors (which includes all nominees), (ii) each of the named executive officers, (iii) our directors and executive officers as a group, and (iv) each person known by us to be the beneficial owner of more than 5% of our outstanding Class A common stock.

The number of shares of Class A common stock outstanding as of September 6, 2024 was 39,254,643.

The number of shares beneficially owned by each director, named executive officer, and greater than 5% beneficial owner is determined under SEC rules, and the information is not necessarily indicative of the beneficial ownership for any other purpose.

Under such rules, beneficial ownership includes any shares to which the individual has the sole or shared voting power or investment power and also any shares which the individual has the right to acquire within 60 days of September 6, 2024, through the exercise of any stock option or other right to purchase, such as a warrant.

Unless otherwise indicated, each person has sole investment and voting power (or shares such power with his or her spouse) with respect to the shares set forth in the following table.

In certain instances, the number of shares listed may include, in addition to shares owned directly, shares held by the spouse or children of the person, or by a trust or estate of which the person is a trustee or an executor or in which the person may have a beneficial interest.

The table that follows is based upon information supplied in a questionnaire completed by each named executive officer and director and stockholders beneficially owning greater than 5% of our Class A common stock.

Class A Common Stock

Name and Address (1)

Restricted (2)

Stock Options

Amount of Shares of Class A Common Stock Beneficially Owned

Percent Owned

Scott Faris, Chair

Joseph Menaker, Director

Darcie Peck, Director

Eric Creviston, Director

Kim Crider, Director

Shmuel Rubin, CEO

Albert Miranda, CFO

All directors and executive officers currently holding office as a group (7 persons)

Greater than 5% beneficial owners:

AIGH Capital Management, LLC

AMH Equity, LLC / Leviticus Partners, L.P.

Marathon Micro Fund, LP

Archon Capital Management LLC

*Less than 1%

Except as otherwise noted, each of the parties listed above has sole voting and investment power over the securities listed.

The address for all directors and officers is “in care of” LightPath Technologies, Inc., 2603 Challenger Tech Court, Suite 100, Orlando, Florida 32826.

The address for AIGH Capital Management, LLC, as filed on a Schedule 13G/A filed on February 7, 2024, is 6006 Berkeley Ave, Baltimore, MD 21209.

The address for AMH Equity LLC / Leviticus Partners, L.P., as jointly filed on a Schedule 13G/A filed on February 13, 2024, is 32 Old Mill Road, Great Neck, NY 11023.

The address for Marathon Micro Fund, L.P., as filed on Schedule 13G/A filed on February 3, 2023, is 4 North Park Drive, Suite 106, Hunt Valley, MD 21030.

The address for Archon Capital Management LLC, as filed on Schedule 13G filed on February 13, 2024, is 1100 19th Avenue E, Seattle, Washington 98112.

Historically, restricted stock units (“RSUs”) awarded to our directors vest over three years.

Beginning with the November 2021 grants, RSUs awarded to our directors now vest over one year, to more accurately reflect the period of service.

Except for Darcie Peck and Eric Creviston, all of our directors have elected to defer receipt of the vested shares until after they leave the Board, either by reason of resignation, termination, or otherwise.

For the directors who have elected to defer, the vested shares remain unissued.

All of the directors’ unvested RSUs will vest upon such director’s resignation or termination from the Board.

The amounts of restricted stock set forth above reflects both vested and unvested shares included in the RSU awards.

As of September 6, 2024, the amounts of vested and unissued shares for each director, other than Mr.

Rubin, are as follows:

Faris – 445,205, and Dr.

Menaker – 229,738;

Creviston and Ms.

Crider do not have any vested and unissued shares.

Includes 22,500 shares of Class A common stock, which are held by Ms.

Peck’s husband.

Securities Authorized for Issuance Under Equity Compensation Plans.

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Equity compensation plans not approved by security holders

Represents the number of underlying shares of Class A common stock associated with outstanding stock options and outstanding RSUs and RSAs that have been granted, but not yet issued, pursuant to either the Omnibus Plan or the SICP, as applicable.

Represents weighted-average exercise price of stock options outstanding under the Omnibus Plan or the SICP, as applicable.

The weighted-average exercise price includes the RSU and RSA awards at the issue date stock price.

Certain Relationships and Related Transactions, and Director Independence.

Director Independence

In accordance with the NCM and SEC rules, the Board affirmatively determines the independence of each director and director nominee in accordance with guidelines it has adopted, which include all elements of independence set forth in the NCM listing standards.

Eric Creviston

Joseph Menaker

Based on these standards, the Board determined Shmuel Rubin, currently a Class III Director, is not independent.

All of the members of the Audit, Nominating, and Compensation Committees are independent.

The Board approved an Amended and Restated Code of Business Conduct and Ethics (the “Code”) on April 28, 2016.

Copies of the Code and the Senior Financial Officer Code are available on our website at www.lightpath.com , under the “Investors” tab, or may be obtained free of charge by writing to:

Corporate Secretary, LightPath Technologies, Inc., 2603 Challenger Tech Court, Suite 100, Orlando, Florida 32826.

Related Party Transactions

When we are contemplating entering into any transaction in which any executive officer, director, director nominee, or any family member of the foregoing would have any direct or indirect interest, regardless of the amount involved, the terms of such transaction have to be presented to the Audit Committee (other than any interested director) for approval or disapproval.

Neither the Audit Committee nor the Board have adopted a written policy for reviewing related party transactions but when presented with such transaction, the transaction is discussed by the Audit Committee and documented in its meeting minutes.

The Code also requires our employees, officers, and directors to provide prompt and full disclosure of all potential conflicts of interest to the appropriate person.

These conflicts of interest may be specific to the individual or may extend to his or her family members.

Any officer who has a conflict of interest with respect to any matter is required to disclose the matter to our Chief Executive Officer or, in the case of the Chief Executive Officer, to the Chair of the Audit Committee.

All other employees are required to make prompt and full disclosure of any conflict of interest to his or her immediate supervisor, who will then make prompt and full disclosure to our Chief Executive Officer.

Directors are required to disclose any conflict of interests to the Chair of the Audit Committee and are prohibited from voting on any matter(s) in which they have a conflict of interest.

In addition, directors and executive officers are required to disclose in an annual questionnaire, any current or proposed conflict of interests (including related party transactions).

From the period beginning July 1, 2023 and ending September 16, 2024, there were no current or proposed material related party transactions.

Principal Accountant Fees and Services.

The following table presents fees paid or to be paid for professional audit services rendered by MSL for the audit of our annual financial statements during the years ended June 30, 2024 and 2023, review of financial statements included in our quarterly reports during the years ended June 30, 2024 and 2023, and fees billed for other services rendered:

Fiscal Year 2024

Fiscal Year 2023

Audit Fees (1)

All Other Fees (3)

Total All Fees (4)

Audit Fees consisted of fees billed for professional services rendered for the audit of our annual financial statements and review of the interim financial statements included in quarterly reports, and review of other documents filed with the SEC within those fiscal years.

Tax fees consisted of fees billed for professional services rendered for the preparation and filing of our annual tax returns for fiscal year 2022.

We did not engage MSL to prepare and file our annual tax returns for fiscal year 2023.

All other fees for fiscal year 2024 primarily consist of fees billed for professional services related to the at-the-market equity program.

All Other Fees for fiscal year 2023 consist of fees billed for professional services related to the Prospectus filed on January 12, 2023, and due diligence procedures in connection with an acquisition.

There were no audit-related fees during fiscal year 2024 or fiscal year 2023.

The Audit Committee has adopted policies and procedures to oversee the external audit process including engagement letters, estimated fees and solely pre-approving all permitted audit and non-audit work performed by MSL, as applicable.

The Audit Committee has pre-approved all fees for audit, audit-related and non-audit work performed.

Exhibits, Financial Statement Schedules.

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000-27548) filed with the Securities and Exchange Commission on February 1, 2018, and is incorporated herein by references thereto.

Certificate of Amendment of Certificate of Incorporation of LightPath Technologies, Inc., filed January 31, 2024 with the Secretary of State of Delaware, which was filed as Exhibit 3.1 to our Current Report on Form 8-K (File No:

000-27548) filed with the Securities and Exchange Commission on February 6, 2024, and is incorporated herein by references thereto.

Second Amended and Restated Bylaws of LightPath Technologies, Inc., which was filed as Exhibit 3.1 to our Current Report on Form 8-K (File No:

85 unchanged sentences

000-27548) filed with the Securities and Exchange Commission on May 11, 2023, and is incorporated herein by reference thereto.

Bridge Note dated August 6, 2024 by LightPath Technologies, Inc.

in favor of Lytton-Kambara Foundation which was filed as Exhibit 10.1 to our Current Report on Form 8-K (File No:

000-27548) filed with the Securities and Exchange Commission on August 12, 2024, and is incorporated herein by reference thereto.

Code of Business Conduct and Ethics, which was filed as Exhibit 14.1 to our Current Report on Form 8-K (File No.:

2 unchanged sentences

000-27548) filed with the Securities and Exchange Commission on May 3, 2016, and is incorporated herein by reference thereto.

Guide for Trading in Securities*

Subsidiaries of the Registrant.*

7 unchanged sentences

Section 1350 of Chapter 63 of Title 18 of the United States Code.*

XBRL Instance Document*

XBRL Taxonomy Extension Schema Document*

XBRL Taxonomy Extension Calculation Linkbase Document*

XBRL Taxonomy Extension Definition Linkbase Document*

XBRL Taxonomy Extension Label Linkbase Document*

XBRL Taxonomy Presentation Linkbase Document*

Clawback Policy.*

101.INS XBRL Instance Document*

101.SCH XBRL Taxonomy Extension Schema Document*

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document*

101.DEF XBRL Taxonomy Extension Definition Linkbase Document*

101.LAB XBRL Taxonomy Extension Label Linkbase Document*

101.PRE XBRL Taxonomy Presentation Linkbase Document*

104 The cover page from the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024, formatted in iXBRL.

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Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audits included performing procedures to assess the risks of material misstatement of the consoli-dated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall pre-sentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

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The Company relies on, among other things, past usage, sales experience, recent order and quote activity, future sales forecasts, and its strategic business plan to develop the estimate.

As a result of management’s assessment, the Company recorded an inventory allowance of approximately $1,125,000 as of June 30, 2023.

As a result of management’s assessment, the Company recorded an inventory allowance of approxi-mately $1,225,000 as of June 30, 2024.

Auditing management’s estimate of the inventory allowance involved subjective evaluation and high degree of auditor judgement due to significant assumptions involved in estimating future inventory turnover and sales.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

We obtained an understanding and evaluated the design of internal controls that address the risks of material misstatement relating to recording inventory at the lower of cost or net realizable value.

We obtained an under-standing and evaluated the design of internal controls that address the risks of material misstatement relating to recording inventory at the lower of cost or net realizable value.

We tested the accuracy and completeness of the underlying data used in calculating the inventory allowance, including testing of a sample of inventory usage transactions, and recomputed the allowance calculation.

We also evaluated the Company’s ability to accurately estimate the assumptions used to develop the estimate by comparing historical allowance amounts to the history of actual inventory write-offs.

Furthermore, we reviewed management’s business plan and forecasts of future sales.

Furthermore, we considered management’s business plan and forecasts of future sales.

We have served as the Company’s auditor since 2017.

9 unchanged sentences

Inventories, net

Prepaid expenses and other assets

Prepaid expenses and deposits

Other current assets

Total current assets

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Deferred tax liabilities, net

Accrued liabilities, noncurrent

Finance lease obligation, less current portion

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Class A, $ 0.01 par value, voting;

44,500,000 shares authorized;

94,500,000 and 44,500,000 shares authorized;

39,254,643 and 37,344,739 shares issued and outstanding

13 unchanged sentences

New product development

Amortization of intangibles

(Gain) loss on disposal of property and equipment

Amortization of intangible assets

Loss (gain) on disposal of property and equipment

Total operating expenses

4 unchanged sentences

Interest expense, net

Other income (expense), net

Total other income (expense), net

Other income, net

Total other expense, net

Loss before income taxes

5 unchanged sentences

Foreign currency translation adjustment

( 1,181,027 )

Comprehensive loss

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Employee Stock Purchase Plan

Exercise of Stock Options & RSUs, net

Stock-based compensation on stock options & RSUs

Exercise of Stock Options, RSUs & RSAs, net

Issuance of common stock under public equity placement

Stock-based compensation on stock options, RSAs & RSUs

Foreign currency translation adjustment

1 unchanged sentence

( 4,046,871 )

( 3,542,181 )

Balances at June 30, 2023

4 unchanged sentences

Issuance of common stock under public equity placement

Stock-based compensation on stock options, RSAs & RSUs

Issuance of common stock for acquisition of Visimid

Stock-based compensation on stock options, RSUs & RSAs

Foreign currency translation adjustment

11 unchanged sentences

$ ( 4,046,871 )

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization

Interest from amortization of debt costs

(Gain) loss on disposal of property and equipment

Loss (gain) on disposal of property and equipment

Stock-based compensation on stock options, RSUs & RSAs, net

Provision for doubtful accounts receivable

Provision for credit losses

Change in operating lease assets and liabilities

4 unchanged sentences

( 1,431,440 )

Other receivables

Prepaid expenses and other assets

Other current assets

Prepaid expenses and deposits

Accounts payable and accrued liabilities

( 1,087,746 )

Net cash (used in) provided by operating activities

Net cash provided by (used in) operating activities

( 2,809,523 )

4 unchanged sentences

Proceeds from sale of equipment

Proceeds from sale-leaseback of equipment

Acquisition of Visimid Technologies, net of cash acquired

Net cash used in investing activities

7 unchanged sentences

( 2,459,474 )

( 1,852,256 )

Repayment of finance lease obligations

Net cash provided by (used in) financing activities

Net cash (used in) provided by financing activities

( 1,466,440 )

Effect of exchange rate on cash and cash equivalents

1 unchanged sentence

( 3,664,222 )

Cash and cash equivalents, beginning of period

Cash, cash equivalents and restricted cash, beginning of period

Cash, cash equivalents and restricted cash, end of period

5 unchanged sentences

Equipment deposit paid in restricted stock

Operating right-of-use assets acquired in exchange for operating lease liabilities

The accompanying notes are an integral part of these consolidated financial statements.

LIGHTPATH TECHNOLOGIES, INC.

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (continued)

Organization and History

7 unchanged sentences

In December 2013, we formed LightPath Optical Instrumentation (Zhenjiang) Co., Ltd (“LPOIZ”), a wholly-owned subsidiary located in Zhenjiang, Jiangsu Province, People’s Republic of China.

Effective February 28, 2023, the legal entities of LPOI and LPOIZ were merged, with LPOIZ as the surviving company.

In December 2016, we acquired ISP Optics Corporation, a New York corporation (“ISP”), and its wholly-owned subsidiary, ISP Optics Latvia, SIA, a limited liability company founded in 1998 under the Laws of the Republic of Latvia (“ISP Latvia”).

LightPath is a manufacturer of optical components and higher-level assemblies, including precision molded glass aspheric optics, infrared optics, both molded and diamond-turned, thermal imaging assemblies, and other optical components used in products that manipulate light.

LightPath designs, develops, manufactures, and distributes optical components and sub-system level lens assemblies utilizing advanced optical manufacturing processes.

LightPath products are incorporated into a variety of applications by customers in many industries, including defense products, medical devices, laser aided industrial tools, automotive safety applications, barcode scanners, optical data storage, hybrid fiber coax datacom, telecommunications, machine vision and sensors, among others.

Many of our optical assemblies consist of several products that we manufacture.

In July 2023, we acquired Liebert Consulting LLC, dba Visimid Technologies (“Visimid”).

Visimid is an engineering and design firm specializing in thermal imaging, night vision and IOT applications.

Visimid provides design and consulting services for DoD contractors, commercial and industrial customers, and OEMs for original new products.

Visimid’s core competency is developing and producing custom thermal and night vision cores.

We believe that Visimid’s capabilities are aligned with our strategy to focus on engineered solutions.

Visimid’s facility is located in Plano, TX.

LightPath is a manufacturer of optical components, assemblies and sub-systems, including precision molded glass aspheric optics, infrared optics, thermal imaging assemblies and cores, and other optical components used in products that manipulate light.

LightPath designs, develops and manufactures optical components and sub-system level lens assemblies utilizing advanced optical manufacturing processes.

LightPath products are incorporated into a variety of applications by customers in many industries, including defense products, night vision systems, medical devices, laser aided industrial tools, automotive safety applications, telecommunications, machine vision and sensors, among others.

Many of our optical assemblies and sub-systems consist of several products that we manufacture.

As used herein, the terms “LightPath,” the “Company,” “we,” “us” or “our,” refer to LightPath individually or, as the context requires, collectively with its subsidiaries on a consolidated basis.

9 unchanged sentences

The Company’s foreign cash accounts are not insured.

Restricted cash consists of amounts held in a restricted account as collateral for a loan agreement.

Restricted cash is presented in the Consolidated Balance Sheet as of June 30, 2023, and consists of amounts held in a restricted account as collateral for a loan agreement.

See Note 14, Loans Payable , to these Consolidated Financial Statements for additional information.

Our restricted cash is invested in a money market account.

Cash and cash equivalents and restricted cash presented in the Consolidated Balance Sheet as of June 30, 2023 are combined in the Consolidated Statement of Cash Flows for the year ended June 30, 2023.

Our restricted cash was held in a money market account.

Cash and cash equivalents and restricted cash presented in the Consolidated Balance Sheet as of June 30, 2023 are combined in the Consolidated Statements of Cash Flows for the years ended June 30, 2024 and 2023.

The Company did not have any restricted cash as of June 30, 2024.

Allowance for accounts receivable is calculated by taking 100% of the total of invoices that are over 90 days past due from the due date and 10% of the total of invoices that are over 60 days past due from the due date for U.S.- and Latvia-based accounts and 100% of invoices that are over 120 days past due for Chinese-based accounts.

Accounts receivable are customer obligations due under normal trade terms.

The Company performs continuing credit evaluations of its customers’ financial condition.

Allowance for credit losses is based on the best estimate of the amount of probable credit losses in existing accounts receivable.

The Company determines the allowance based on historical write-off experience and expected future default probabilities based on our ongoing evaluations of our customers’ financial condition.

The allowance consists of an amount identified for specific customers and an amount based on overall estimated exposure.

Accounts receivable are customer obligations due under normal trade terms, which are generally net 30 days.

If the Company’s actual collection experience changes, revisions to its allowance may be required.

14 unchanged sentences

Construction in process represents the accumulated costs of assets not yet placed in service.

As of June 30, 2023, the balance of construction in progress was primarily related to the expansion of our facility in Orlando, Florida.

Long-lived assets , such as property, plant, and equipment and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Long-lived assets , such as property, plant, and equipment and purchased intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to its estimated undiscounted future cash flows expected to be generated by the asset.

3 unchanged sentences

The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the Consolidated Balance Sheet.

Goodwill and Intangible Assets acquired in a business combination are recognized at fair value using generally accepted valuation methods appropriate for the type of intangible asset and reported separately from goodwill.

Goodwill and amortizable intangible assets acquired in a business combination are recognized at fair value using generally accepted valuation methods.

Purchased intangible assets other than goodwill are amortized over their useful lives unless these lives are determined to be indefinite.

2 unchanged sentences

The Company periodically reassesses the useful lives of its intangible assets when events or circumstances indicate that useful lives have significantly changed from the previous estimate.

Definite-lived intangible assets consist primarily of customer relationships, know-how/trade secrets and trademarks.

Amortizable intangible assets consist primarily of customer relationships, know-how/trade secrets and trademarks.

They are generally valued as the present value of estimated cash flows expected to be generated from the asset using a risk-adjusted discount rate.

When determining the fair value of our intangible assets, estimates and assumptions about future expected revenue and remaining useful lives are used.

Goodwill and intangible assets are tested for impairment on an annual basis and during the period between annual tests if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable.

The Company will assess the qualitative factors to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the goodwill impairment analysis.

5 unchanged sentences

Any excess of the goodwill carrying amount over the implied fair value is recognized as an impairment loss, and the carrying value of goodwill is written down to fair value.

The Company did not record any impairment of goodwill or definite-lived intangible assets during the fiscal years ended June 30, 2023 or 2022.

The Company did not record any impairment of goodwill or amortizable intangible assets during the fiscal years ended June 30, 2024 or 2023.

The Company determines if an arrangement is a lease at inception.

5 unchanged sentences

Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options.

The Company does not record leases on the consolidated balance sheet with a term of one year or less.

The Company does not record leases on the consolidated balance sheet with an intial term of one year or less.

The Company does not separate lease and non-lease components but rather accounts for each separate component as a single lease component for all underlying classes of assets.

15 unchanged sentences

Our cash, cash equivalents and restricted cash totaled approximately $ 3.5 million at June 30, 2024.

Of this amount, greater than 25% was held by our foreign subsidiaries in China and Latvia.

Of this amount, less than 50% was held by our foreign subsidiaries in China and Latvia.

These foreign funds were generated in China and Latvia as a result of foreign earnings.

2 unchanged sentences

parent company.

During fiscal year 2020, we began to accrue for the applicable Chinese withholding taxes on the portion of earnings that we intend to repatriate.

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.

1 unchanged sentence

During fiscal years 2024 and 2023, we repatriated approximately $ 1.4 million and $ 1.9 million, respectively, from LPOIZ.

As of June 30, 2023, LPOIZ had approximately $ 2.9 million in retained earnings available for repatriation, and LPOI did not have any earnings available for repatriation, based on earnings accumulated through December 31, 2022, the end of the most recent statutory tax year, that remained undistributed as of June 30, 2023.

During fiscal year 2020 we began to accrue for the applicable Chinese withholding taxes on the portion of earnings that we intend to repatriate.

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 merger with LPOIZ.

Beginning in fiscal year 2019, earnings from the Company’s non-U.S.

29 unchanged sentences

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management.

The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values.

The respective carrying value of financial instruments recorded on the consolidated balance sheets approximated their fair values.

These financial instruments include accounts receivable, accounts payable and accrued liabilities.

1 unchanged sentence

The fair value of the Company’s finance lease obligations and loans payable approximate their carrying values, based upon current rates available to us.

See Note 13, Loans Payable , to these Consolidated Financial Statements for additional information.

See Note 13, Leases and Note 14, Loans Payable , to these Consolidated Financial Statements for additional information.

Management considers these fair value estimates to be level 2 fair value measurements.

1 unchanged sentence

Debt issuance costs are recorded as a reduction to the carrying value of the related notes payable, by the same amount, and are amortized ratably over the term of the related note.

Comprehensive income is defined as the change in equity (net assets) of a business enterprise during a period from transactions and other events and circumstances from non-owner sources.

Comprehensive income (loss) is defined as the change in equity (net assets) of a business enterprise during a period from transactions and other events and circumstances from non-owner sources.

It includes all changes in equity during a period, except those resulting from investments by owners and distributions to owners.

Comprehensive income has two components, net income, and other comprehensive income, and is included on the Consolidated Statements of Comprehensive Income.

Comprehensive income (loss) has two components, net income, and other comprehensive income (loss), and is included on the Consolidated Statements of Comprehensive Income (Loss).

Our other comprehensive income consists of foreign currency translation adjustments made for financial reporting purposes.

Business segments.

As the Company only operates in principally one business segment, no additional reporting is required.

As the Company only operates in principally one reportable business segment, no additional reporting is required.

Recent accounting pronouncements.

There are no new accounting pronouncements issued by the FASB that are not yet effective for the Company for the year ended June 30, 2024 that are expected to have a material impact on the Consolidated Financial Statements.

Acquisition of Visimid Technologies

In July 2023, the Company acquired Visimid, pursuant to a Membership Interest Purchase Agreement dated as of July 25, 2023 (the “Acquisition Date”).

Part of the Company’s growth strategy is to identify appropriate opportunities that would enhance our profitable growth through acquisition.

Visimid is an engineering and design firm specializing in thermal imaging, night vision and internet of things (“IOT”) applications.

Visimid provides design and consulting services for 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.

We believe that Visimid’s capabilities are aligned with our strategy to focus on engineered solutions.

LIGHTPATH TECHNOLOGIES, INC.

Notes to Consolidated Financial Statements (continued)

The Company’s consolidated financial statements reflect the financial results of Visimid beginning on the Acquisition Date.

The purchase price included $ 1 million in cash, $ 1,550,000 of restricted stock, $ 150,000 of assumed bank debt, and an earnout which is contingent upon the award and completion of a specific customer contract.

Of the restricted stock payable as part of the purchase price, $ 150,000 (81,610 shares) was issued at closing, with the balance to be issued in four equal installments of $350,000 each, on January 1, 2024, July 1, 2024, January 1, 2025 and July 1, 2025 .

The number of shares is based on the average closing price of the Company’s Class A common stock, as reported by Bloomberg, for the five trading days prior to each stock issuance.

For the January 1, 2024 installment, 267,176 shares were issued.

The total purchase price, net of cash acquired and including the estimated potential earnout, is approximately $ 2.7 million, based on present values as of the Acquisition Date.

Of this amount, $ 600,000 was paid at closing, cash installments of $ 150,000 and $ 125,000 were paid in October 2023 and January 2024, respectively, per the terms of the purchase agreement, and the remaining cash and stock payments, including the estimated potential earnout, have been accrued and are included in Accrued liabilities and Accrued liabilities, noncurrent in the accompanying consolidated balance sheet as of June 30, 2024.

The estimated fair values of the assets acquired and liabilities assumed were recorded as of the Acquisition Date.

As part of the valuation analysis, the Company identified intangible assets, including customer relationships, customer backlog, trade secrets and trademarks.

The customer backlog, customer relationships, trade secrets and trademarks were determined to have estimated values of approximately $ 464,000 , $ 122,000 , $ 925,000 and $ 442,000 , respectively, and estimated useful lives of 1 year for customer backlog, and 10 years for customer relationships, trade secrets and trademarks.

The estimated fair value of identifiable intangible assets is determined primarily using the “income approach”, which requires a forecast of all future cash flows.

The goodwill recognized is attributable primarily to expected synergies and the assembled workforce of Visimid.

The goodwill is expected to be deductible for income tax purposes.

For the fiscal year ended June 30, 2024, the Company incurred approximately $ 98,000 , in acquisition costs.

These costs are included in the consolidated statements of comprehensive income (loss) in the line item entitled “Selling, general and administrative.” This is in addition to the previously disclosed $ 140,000 in acquisition costs which were recorded during the fiscal year ended June 30, 2023.

Prior to the Acquisition, the Company had a preexisting relationship with Visimid.

The Company contracted Visimid for engineering services and purchased infrared camera cores from Visimid on an arms’ length basis.

The Company had also partnered with Visimid for the development of the Mantis camera.

Product Revenue

The Company manufactures optical components and higher-level assemblies, including precision molded glass aspheric optics, molded and diamond-turned infrared aspheric lenses, and other optical components used to produce products that manipulate light.

The Company manufactures optical components and higher-level assemblies, including precision molded glass aspheric optics, molded and diamond-turned infrared aspheric lenses, and other optical materials used to produce products that manipulate light.

The Company designs, develops, manufactures, and distributes optical components and assemblies utilizing advanced optical manufacturing processes.

The Company also performs research and development for optical solutions for a wide range of optics markets.

The Company also provide engineering services and perform research and development for optical solutions for a wide range of optics markets.

Revenue is derived primarily from the sale of optical components and assemblies.

4 unchanged sentences

Revenue is presented net of sales taxes and any similar assessments.

LIGHTPATH TECHNOLOGIES, INC.

Notes to Consolidated Financial Statements (continued)

Customary payment terms are granted to customers, based on credit evaluations.

1 unchanged sentence

Deferred revenue is recorded when cash payments are received or due in advance of the Company’s performance.

Deferred revenue was not significant as of June 30, 2023 and 2022.

Deferred revenue was $ 725,000 and $ 314,000 as of June 30, 2024 and 2023, respectively, and is included in accrued liabilities in the accompanying consolidated balance sheets.

Nature of Products

1 unchanged sentence

The performance obligations for the sale of optical components and assemblies are satisfied at a point in time.

Product development agreements are generally short term in nature, with revenue recognized upon satisfaction of the performance obligation, and transfer of control of the agreed-upon deliverable.

The Company has organized its products in three groups:

Product development agreements for engineering services are generally short-term in nature, with revenue recognized upon satisfaction of the performance obligation, and transfer of control of the agreed-upon deliverable.

Visimid has one longer-term order with a defense customer which includes both product development and hardware deliverables where similar revenue recognition criteria will be applied.

LIGHTPATH TECHNOLOGIES, INC.

Notes to Consolidated Financial Statements (continued)

The Company previously organized its products in three groups:

precision molded optics (“PMO”), infrared, and specialty products.

Revenues from product development agreements are included in specialty products.

The Company’s revenue by product group for the years ended June 30, 2023 and 2022 was as follows:

Year Ended June 30,

Infrared Products

Specialty Products

Revenues from product development agreements for engineering services were included in specialty products.

With our strategic transition into more value-added solutions, and the addition of Visimid in July 2023, we reorganized our products into four product groups:

infrared components, visible components, assemblies and modules, and engineering services.

Assemblies and modules were previously included in PMO, infrared or specialty products, depending on the lens type.

Revenue by product group for the fiscal years ended June 30, 2024 and 2023 was as follows, with fiscal year 2023 amounts reclassified from those previously reported to conform to current classification:

Infrared components

Visible components

Assemblies and modules

Engineering services

Total revenue

13 unchanged sentences

Property and equipment consist of the following:

Estimated Lives

Estimated Lives (Years)

June 30, 2024

June 30, 2023

Manufacturing equipment

13 unchanged sentences

The excess purchase price over the fair values of all identified assets and liabilities was recorded as goodwill, attributable primarily to expected synergies and the assembled workforce of ISP.

There were no changes in the net carrying value of goodwill during the years ended June 30, 2023 and 2022, and there have been no events or changes in circumstances that indicate the carrying value of goodwill or definite-lived intangible assets may not be recoverable.

The increase in goodwill during the year ended June 30, 2024 was due to the acquisition of Visimid.

See Note 3, Acquisition of Visimid Technologies , to these consolidated financial statements, for more information.

There have been no events or changes in circumstances that indicate the carrying value of goodwill may not be recoverable.

Identifiable intangible assets were comprised of:

Useful Lives (Years)

June 30, 2024

June 30, 2023

Customer relationships

5 unchanged sentences

Total intangible assets, net

Future amortization of identifiable intangibles is as follows:

Future amortization of identifiable intangible assets is as follows:

Fiscal year ending:

3 unchanged sentences

June 30, 2028

June 30, 2029

After June 30, 2029

Stockholders’ Equity

The Company’s authorized capital stock consists of 55,000,000 shares, comprised of 50,000,000 shares of common stock, par value $ 0.01 per share, and 5,000,000 shares of preferred stock, par value $ 0.01 per share.

Effective January 31, 2024, the Company’s authorized capital stock increased from 55,000,000 to 105,000,000 shares, comprised of 100,000,000 shares of common stock, par value $ 0.01 per share, and 5,000,000 shares of preferred stock, par value $ 0.01 per share.

Of the 5,000,000 shares of preferred stock authorized, the Board of Directors has previously designated:

35 unchanged sentences

( 3,331,277 )

( 1,255,273 )

NOL expiration and adjustments

6 unchanged sentences

The Company elected to utilize the payroll tax deferral under the CARES Act, resulting in cash savings of approximately $ 325,000 , accrued as of June 30, 2021.

Half of this amount was remitted on December 31, 2021, with the remainder remitted on December 31, 2022.

Half of this amount was remitted on December 31, 2021, with the remainder remitted on December 31, 2022 and no balance due as of June 30, 2023.

Income Tax Law of the People’s Republic of China

1 unchanged sentence

For both the years ended June 30, 2024 and 2023, the tax rate for LPOIZ was 15 %, in accordance with an incentive program for technology companies.

Prior to fiscal year 2022, no deferred tax provision was recorded for LPOIZ.

However, during the year ended June 30, 2022, as a result of audits performed by the Chinese taxing authorities, and the Chinese subsidiaries’ statutory audits, it was determined that a net deferred tax liability was required.

Accordingly, a net deferred tax liability of approximately $ 541,000 , related to LPOIZ, was recorded in the Company’s Consolidated Financial Statements as of and for the year ended June 30, 2022.

As of June 30, 2023, the net deferred tax liability for LPOIZ is approximately $ 465,000 .

The net deferred tax liability for LPOIZ is approximately $ 415,000 and $ 465,000 as of June 30, 2024 and 2023, respectively, primarily related to timing differences related to accelerated depreciation on fixed assets.

Historically, the Company considered unremitted earnings held by its foreign subsidiaries to be permanently reinvested.

39 unchanged sentences

Intangible assets

( 1,160,000 )

Total deferred tax liabilities

7 unchanged sentences

Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.

In order to fully realize the deferred tax asset, the Company will need to generate future taxable income of approximately $ 37 million prior to the expiration of federal NOL carry-forwards from 2023 through 2037.

Based on the level of historical taxable income, management has provided for a valuation adjustment against the deferred tax assets of approximately $ 11.1 million at June 30, 2023, a decrease of approximately $ 3.3 million as compared to June 30, 2022.

The decrease in the valuation allowance for deferred tax assets as compared to the prior year is primarily the result of the various movements in the current year deferred items.

The Company’s largest deferred tax asset is related to its U.S.

federal NOL carryforwards.

In order to fully realize this deferred tax asset, the Company would need to generate future taxable income of approximately $ 39 million prior to the expiration of the carry-forwards, of which $ 21 million expire from 2025 through 2034 and $ 18 million do not expire.

Based on the level of historical taxable income (loss), management has provided for a valuation adjustment against the deferred tax assets of approximately $ 12.1 million at June 30, 2024, an increase of approximately $ 1.0 million as compared to June 30, 2023.

The increase in the valuation allowance for deferred tax assets as compared to the prior year is primarily the result of the various movements in the current year deferred items.

net deferred tax asset of $ 123,000 results from federal and state tax credits with indefinite carryover periods.

4 unchanged sentences

Share-based payment arrangements — The Company’s directors, officers, and key employees were granted stock-based compensation through the Omnibus Plan, through October 2018 and after that date, the SICP.

The awards include incentive stock options, non-qualified stock options and restricted stock unit (“RSU”) awards.

Such stock-based compensation may include, among other things, incentive stock options, non-qualified stock options, restricted stock awards (“RSAs”) and restricted stock units (“RSUs”).

The SICP is administered by the Compensation Committee of the Board of Directors.

At the Company’s 2018 Annual Stockholders Meeting, our stockholders approved the SICP under which an aggregate of 1,650,870 shares of our Class A common stock were authorized for issuance pursuant to awards granted thereunder.

At the Company’s 2022 Annual Stockholders Meeting, our stockholders authorized an additional 2,100,000 shares of our Class A common stock for issuance pursuant to awards granted thereunder.

As of June 30, 2024, 863,305 shares of Class A common stock were authorized and available for issuance pursuant to awards granted under the SICP.

The Company’s executive officers are eligible to earn incentive compensation consisting of equity-based awards, as well as cash bonuses, based on the achievement of certain individual and/or Company performance goals set by the Compensation Committee.

LIGHTPATH TECHNOLOGIES, INC.

Notes to Consolidated Financial Statements (continued)

The LightPath Technologies, Inc.

2 unchanged sentences

In no event can any participant purchase more than $ 25,000 worth of shares of Class A common stock in any calendar year and an employee cannot purchase more than 8,000 shares on any purchase date within an offering period of 12 months and 4,000 shares on any purchase date within an offering period of six months.

This discount of approximately $ 4,000 and $ 5,000 for fiscal years 2023 and 2022, respectively, is included in the selling, general and administrative expense in the accompanying Consolidated Statements Comprehensive Income (Loss), which represents the value of the 10% discount given to the employees purchasing stock under the 2014 ESPP.

LIGHTPATH TECHNOLOGIES, INC.

Notes to Consolidated Financial Statements (continued)

This discount of approximately $ 4,000 for each of the fiscal years ended June 30, 2024 and 2023, respectively, is included in the selling, general and administrative expense in the accompanying Consolidated Statements Comprehensive Income (Loss), which represents the value of the 10% discount given to the employees purchasing stock under the 2014 ESPP.

These plans are summarized below:

Equity Compensation Arrangement

Outstanding at

June 30, 2023

Available for

Award Shares Authorized

Outstanding at June 30, 2024

Available for Issuance at

June 30, 2024

29 unchanged sentences

June 30, 2022

( 1,068,291 )

Cancelled/Forfeited

June 30, 2023

( 1,068,291 )

Cancelled/Forfeited

5 unchanged sentences

June 30, 2024

LIGHTPATH TECHNOLOGIES, INC.

Notes to Consolidated Financial Statements (continued)

The intrinsic and fair values for share-based payment awards exercised and vested in the years ended June 30, 2024 and 2023 are presented below:

1 unchanged sentence

Intrinsic Value - Exercised

Stock Options

Fair Value - Vested

Stock Options

No stock options were exercised during the years ended June 30, 2023 and 2022.

LIGHTPATH TECHNOLOGIES, INC.

Notes to Consolidated Financial Statements (continued)

The intrinsic values of share-based payment awards outstanding and exercisable as of June 30, 2024 and 2023 are presented below:

1 unchanged sentence

Stock Options

None of the outstanding RSAs were exercisable as of June 30, 2023, and there were no outstanding RSAs as of June 30, 2022.

None of the outstanding RSAs were exercisable as of June 30, 2024 and 2023.

As of June 30, 2024, there was approximately $ 863,000 of total unrecognized compensation cost related to non-vested share-based compensation arrangements, including share options and RSUs, granted under the Omnibus Plan, through October 2018 and after that date, the SICP.

9 unchanged sentences

Unexercisable/Unvested Awards

Stock Options

Stock Options Shares

Weighted-Average Grant Date Fair Values

5 unchanged sentences

Acceleration of Vesting — The Company does not generally accelerate the vesting of any stock options, RSUs or RSAs, however in the case of retirements, the Board of Directors may accelerate vesting.

LIGHTPATH TECHNOLOGIES, INC.

Notes to Consolidated Financial Statements (continued)

Financial Statement Effects and Presentation — The following table shows total stock-based compensation expense for the years ended June 30, 2024 and 2023, which is included in selling, general and administrative expenses in the accompanying Consolidated Statements of Comprehensive Income (Loss):

1 unchanged sentence

Stock options

LIGHTPATH TECHNOLOGIES, INC.

Notes to Consolidated Financial Statements (continued)

Earnings (Loss) Per Share

2 unchanged sentences

The computations for basic and diluted earnings (loss) per share are described in the following table:

Year Ended June 30,

$ ( 8,007,346 )

8 unchanged sentences

The following weighted-average potential dilutive shares were not included in the computation of diluted earnings per share, as their effects would be anti-dilutive:

Year Ended June 30,

Options to purchase common stock

8 unchanged sentences

401(k) plan (the “LightPath Plan”).

The LightPath Plan is adefined 401(k) contribution plan, administered by a third party, that all U.S.

The LightPath Plan is a defined 401(k) contribution plan, administered by a third party, that all U.S.

employees, over the age of 21, are eligible to participate in after three months of employment.

5 unchanged sentences

The Company has operating leases for its manufacturing and office space.

As of June 30, 2022, the Company had two lease agreements for its corporate headquarters and manufacturing facilities in Orlando, Florida.

Through February 2023, the Company had two lease agreements for its corporate headquarters and manufacturing facilities in Orlando, Florida.

The first lease (the “Orlando Lease”) was amended effective April 30, 2021 to expand the space from approximately 26,000 square feet to approximately 58,500 square feet.

9 unchanged sentences

In February 2023, the space was vacated and the Company has no further obligations related to this lease.

As of June 30, 2022, the Company, through its wholly-owned subsidiary, LPOI, had a lease agreement for an office facility in Shanghai, China (the “Shanghai Lease”) for 1,900 square feet.

The Shanghai Lease commenced in October 2015.

During fiscal 2020, the Shanghai Lease was renewed for an additional three-year term, which expired in October 2022 and was not renewed.

As of June 30, 2024, the Company, through its wholly-owned subsidiary, LPOIZ, has a lease agreement for a manufacturing and office facility in Zhenjiang, China for an aggregate of 55,000 square feet (the “Zhenjiang Lease”), which expires December 31, 2024.

Effective June 1, 2024, LPOIZ reduced its facility to 39,500 square feet.

It is management’s intention to renew the lease on the reduced space for at least a one-year term.

At June 30, 2024, the Company, through ISP’s wholly-owned subsidiary ISP Latvia, had two lease agreements for a manufacturing and office facility in Riga, Latvia for an aggregate of 29,000 square feet, which leases expire December 31, 2030.

2 unchanged sentences

The Company includes options to renew (or terminate) in the lease term, and as part of the ROU assets and lease liabilities, when it is reasonably certain that the Company will exercise that option.

At June 30, 2023, the Company also has obligations under five finance lease agreements, entered into during fiscal years 2019 and 2023, with terms ranging from three to five years.

At June 30, 2024, the Company also has obligations under twelve finance lease agreements, entered into during fiscal years 2019 thru 2024, with terms ranging from three to five years.

The leases are for computer and manufacturing equipment.

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the Company recognizes lease expense for these leases on a straight-line basis over the lease term.

The Company received tenant improvement allowances for the Orlando Lease and for Orlando Lease II.

These allowances were used to construct improvements and are included in leasehold improvements and operating lease liabilities.

The balances were amortized over the corresponding lease terms, and were fully amortized as of June 30, 2023.

LIGHTPATH TECHNOLOGIES, INC.

Notes to Consolidated Financial Statements (continued)

The Company received tenant improvement allowances for each of the two leases with respect to its Orlando Facility.

These allowances were used to construct improvements and are included in leasehold improvements and operating lease liabilities and is being amortized over the corresponding lease term.

In August 2023, we completed the construction of additional tenant improvements within the premises subject to our continuing lease for our Orlando Facility, of which the landlord provided $ 2.4 million in tenant improvement allowances.

We funded the balance of the tenant improvement costs of approximately $ 3.7 million.

The components of lease expense were as follows:

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Operating lease assets

Finance lease assets

Property and equipment, net (1)

Total lease assets

Operating leases

Operating lease liabilities, current

Finance leases

Finance lease liabilities, current

Operating leases

Operating lease liabilities, less current portion

Finance leases

Finance lease liabilities, less current portion

Total lease liabilities

Finance lease assets are recorded net of accumulated depreciation of approximately $ 109,000 and $ 72,000 as of June 30, 2024 and 2023, respectively.

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Loans Payable

BankUnited Loans

On February 26, 2019, the Company entered into a Loan Agreement (the “Loan Agreement”) with BankUnited for (i) a revolving line of credit up to maximum amount of $ 2,000,000 (the “Revolving Line”), (ii) a term loan in the amount of up to $ 5,813,500 (“Term Loan”), and (iii) a non-revolving guidance line of credit up to a maximum amount of $ 10,000,000 (the “Guidance Line” and, together with the Revolving Line and Term Loan, the “BankUnited Loans”), as evidenced by promissory notes the Company executed in favor of BankUnited (the “BankUnited Notes”).

On May 6, 2019, the Company entered into that certain First Amendment to Loan Agreement, effective February 26, 2019, with BankUnited (the “Amendment” and, together with the Loan Agreement, the “Amended Loan Agreement”).

The Amendment amended the definition of the fixed charge coverage ratio to more accurately reflect the parties’ understandings at the time the Loan Agreement was executed.

On September 9, 2021, the Company entered into a letter agreement with BankUnited (the “Letter Agreement”).

In accordance with the Letter Agreement, the parties agreed to the following terms, among others:

(i) the Company was granted a waiver of default for its failure to comply with the fixed charge coverage ratio measured on June 30, 2021;

(ii) certain financial covenant requirements were modified;

and (iii) the Guidance Line was terminated.

On November 5, 2021, the Company entered into a letter agreement with BankUnited (the “Second Letter Agreement”).

In accordance with the Second Letter Agreement, the parties agreed to initiate discussions regarding a possible modification, forbearance, or other resolution of the Amended Loan Agreement (as defined below), which resolution would occur on or before December 31, 2021.

On December 20, 2021, the Company entered into the Second Amendment to the Loan Agreement dated February 26, 2019 (the “Second Amendment”), which further amended the Loan Agreement with BankUnited.

In accordance with the Second Amendment, the parties agreed to the following terms, among others:

(i) a maturity date of April 15, 2023 with respect to the Term Loan (as defined in the Amended Loan Agreement);

(ii) an increased monthly payment amount of $100,000 commencing on November 1, 2022;

(iii) beginning on December 20, 2021, each facility would bear interest at BankUnited’s then-prime rate of interest minus fifty (50) basis points, as adjusted from time to time, (iv) the Term Loan would bear a higher interest rate commencing on August 1, 2022;

(v) an exit fee equal to 4 % of the outstanding principal balance of the Term Loan on April 15, 2023 (to the extent the Term Loan would still be outstanding on such date and had not been refinanced with another lender);

and (vi) a fee of $ 50,000 payable upon execution of the Second Amendment.

The Second Amendment also granted us a waiver of compliance for the Financial Covenants (as set forth in the Amended Loan Agreement) for the periods ended December 31, 2021, March 31, 2022 and June 30, 2022.

Based on the waiver, the Company was no longer in default of the Amended Loan Agreement.

On May 11, 2022, the Company entered into the Third Amendment to the Loan Agreement dated February 26, 2019 (the “Third Amendment”;

and, together with the First Amendment, the Letter Agreement and the Second Letter Agreement, the “Amended Loan Agreement”), which further amended the Loan Agreement with BankUnited.

In accordance with the Third Amendment, the parties agreed to the following terms, among others:

(i) an amended maturity date of April 15, 2024 with respect to the Term Loan (as defined in the Amended Loan Agreement);

and (ii) an amended exit fee equal to (a) 2% of the outstanding principal balance of the Term Loan on September 30, 2022, (b) 1% of the outstanding principal balance on December 31, 2022, (c) 1% of the outstanding principal balance on March 31, 2023, and (d) 4 % of the outstanding principal balance on April 15, 2024 (to the extent the Term Loan is still outstanding on the respective dates and has not been refinanced with another lender).

LIGHTPATH TECHNOLOGIES, INC.

Notes to Consolidated Financial Statements (continued)

On February 7, 2023, the Company entered into the Fourth Amendment to the Loan Agreement dated February 26, 2019 (the “Fourth Amendment” and, together with the First Amendment, the Letter Agreement and the Second Letter Agreement, the Second Amendment, and the Third Amendment, the “Amended Loan Agreement”), which further amended the Loan Agreement with BankUnited.

In accordance with the Fourth Amendment, the parties agreed to the following terms, among others:

(i) an amended maturity date of December 31, 2024 with respect to the Term Loan (as defined in the Amended Loan Agreement);

and (ii) an amended exit fee equal to (a) 1 % of the outstanding principal balance on December 31, 2023 and (b) 4 % of the outstanding principal balance on December 31, 2024 (to the extent the Term Loan is still outstanding on the respective dates and has not been refinanced with another lender);

(iii) a principal reduction payment of $ 1,000,000 on or before February 28, 2023;

(iv) commencing on March 1, 2023 and continuing on the first day of each month thereafter until December 31, 2023, monthly payments of $ 75,000 , and commencing on January 1, 2024 and continuing on the first day of each month thereafter until the maturity date, monthly payments of $ 100,000 , with each such payment applied first to interest, costs and expenses and then to principal;

(v) commencing on March 1, 2023, each facility will bear interest at BankUnited’s then prime rate of interest, and (vi) BankUnited has waived compliance with certain financial covenants until December 31, 2023.

On May 9, 2023, the Company entered into the Fifth Amendment to the Loan Agreement dated February 26, 2019 (the “Fifth Amendment”), which further amended the Loan Agreement with BankUnited.

In accordance with the Fifth Amendment, the parties agreed to the following terms, among others:

(i) BankUnited agreed to release its security interest in the collateral securing the BankUnited Loans other than a cash collateral account maintained at BankUnited in the amount of approximately $ 2,457,000 , with a portion of such cash collateral to be released on a quarterly basis equal to 110% of the principal reductions effected during that quarter, and (ii) certain other requirements and restrictions of the Loan Agreement were removed, including, among others, financial covenants, restrictions on acquisitions, and limitations on other financing sources.

The cash collateral is reflected as Restricted Cash in the accompanying balance sheet as of June 30, 2023.

BankUnited Revolving Line

Pursuant to the Amended Loan Agreement, BankUnited agreed to make loan advances to the Company under the Revolving Line up to a maximum aggregate principal amount outstanding not to exceed $ 2,000,000 , which proceeds could have been used for working capital and general corporate purposes.

The Revolving Line expired on February 26, 2022.

No amounts were outstanding under the BankUnited Revolving Line upon its expiration.

BankUnited Term Loan

Pursuant to the Amended Loan Agreement, BankUnited advanced the Company $ 5,813,500 to satisfy in full the amounts owed to Avidbank and to pay the fees and expenses incurred in connection with closing of the BankUnited Loans.

The Term Loan is for a 5 -year term, but co-terminus with the BankUnited Revolving Line should the Revolving Line not be renewed beyond February 26, 2022.

Pursuant to the Fourth Amendment, the maturity date of the Term Loan is December 31, 2024 .

The Term Loan initially bore interest at a per annum rate equal to 2.75 % above the 30-day LIBOR.

Pursuant to the Second Amendment, beginning on December 20, 2021, each facility bore interest at BankUnited’s then-prime rate of interest minus fifty (50) basis points, as adjusted from time to time.

Pursuant to the Fourth Amendment, commencing on March 1, 2023, each facility bears interest at BankUnited’s then prime rate of interest, as adjusted from time to time (8.25% as of June 30, 2023).

Equal monthly principal payments of approximately $ 48,446 , plus accrued interest, were due and payable, in arrears, on the first day of each month during the term.

Pursuant to the Second Amendment, the monthly payment, including principal and interest, increased to $ 100,000 , commencing November 1, 2022.

Pursuant to the Fourth Amendment, commencing on March 1, 2023 and continuing on the first day of each month thereafter until December 31, 2023, monthly payments were reduced to $ 75,000 , and commencing on January 1, 2024 and continuing on the first day of each month thereafter until the maturity date, monthly payments will increase to $ 100,000 , with each such payment applied first to interest, costs and expenses and then to principal.

Upon maturity, all principal and interest shall be immediately due and payable.

LIGHTPATH TECHNOLOGIES, INC.

Notes to Consolidated Financial Statements (continued)

Security and Guarantees

The Company’s obligations under the Amended Loan Agreement were previously collateralized by a first priority security interest (subject to permitted liens) in all of its assets and the assets of the Company’s U.S.

subsidiaries, GelTech, and ISP, pursuant to a Security Agreement granted by GelTech, ISP, and the Company in favor of BankUnited.

The Company’s equity interests in, and the assets of, its foreign subsidiaries were excluded from the security interest.

Pursuant to the Fifth Amendment, the security interest in the certain of the collateral then securing the BankUnited Loans terminated and was replaced by a security interest in a cash collateral account maintained at BankUnited, initially in the amount of approximately $ 2,457,000 , with a portion of such cash collateral to be released on a quarterly basis equal to 110% of the principal reductions effected during that quarter.

In addition, all of the Company’s subsidiaries have guaranteed the Company’s obligations under the Amended Loan Agreement and related documents, pursuant to Guaranty Agreements executed by the Company and its subsidiaries in favor of BankUnited.

General Terms

The Amended Loan Agreement initially contained customary covenants, including, but not limited to:

(i) limitations on the disposition of property;

(ii) limitations on changing the Company’s business or permitting a change in control;

(iii) limitations on additional indebtedness or encumbrances;

(iv) restrictions on distributions;

and (v) limitations on certain investments.

The Amended Loan Agreement also contains certain financial covenants, including obligations to maintain a fixed charge coverage ratio of 1.25 to 1.00 and a total leverage ratio of 4.00 to 1.00 .

The Letter Agreement granted the Company a waiver of default arising prior to the Letter Agreement from its failure to comply with the fixed charge coverage ratio measured on June 30, 2021.

The Second Amendment to the Amended Loan Agreement granted the Company a waiver of compliance for the Financial Covenants (as set forth in the Amended Loan Agreement) through June 30, 2022.

Based on the waivers, the Company was no longer in default of the Amended Loan Agreement.

Pursuant to the Fifth Amendment, certain other requirements and restrictions of the Loan Agreement were removed, including, among others, financial covenants, restrictions on acquisitions, and limitations on other financing sources.

As of June 30, 2023, the Company was in compliance with all required covenants.

We may prepay any or all of the BankUnited Loans in whole or in part at any time, without penalty or premium, other than the exit fees, as discussed above.

Late payments are subject to a late fee equal to five percent (5%) of the unpaid amount.

Amounts outstanding during an event of default accrue interest at a rate of five percent (5%) above the 30-day LIBOR applicable immediately prior to the occurrence of the event of default.

The Amended Loan Agreement contains other customary provisions with respect to events of default, expense reimbursement, and confidentiality.

Financing costs related to the BankUnited Loans were recorded as a discount on debt and are being amortized over the term.

Amortization of approximately $ 59,000 and $ 52,000 for each the years ended June 30, 2023 and 2022, respectively, is included in interest expense.

As of June 30, 2024, loans payable consisted of two equipment loans (as defined below).

As of June 30, 2023, loans payable primarily consisted of the BankUnited Term Loan (as defined below) payable to BankUnited N.A.

(“BankUnited”).

This loan was paid in full in February 2024 and is no longer outstanding as of June 30, 2024.

Equipment Loans

In December 2020, ISP Latvia entered into an equipment loan with a third party (the “2020 Equipment Loan”), which is also a significant customer.

In December 2020, ISP Latvia entered into an equipment loan with a third party (the “2020 Equipment Loan”), which is also a customer.

The 2020 Equipment Loan is subordinate to the BankUnited Loans, and collateralized by certain equipment.

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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.

In May 2023, ISP Latvia entered into an equipment loan with a third party (the “2023 Equipment Loan”).

In May 2023, ISP Latvia entered into an equipment loan with a third party financial institution (the “2023 Equipment Loan”).

The 2023 Equipment Loan is collateralized by certain equipment.

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 2023 Equipment Loan will be payable over 48 months, with monthly installments beginning January 1, 2024.

The final advance for the final payment to the equipment vendor was 132,674 EUR (or USD $ 141,815 ).

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).

BankUnited Term Loan

Since then, we entered into several amendments to the Loan Agreement and pursuant to those amendments and the associated waivers of compliance with certain financial covenants, we have maintained our compliance with all financial and non-financial covenants under the Loan Agreement.

The Guidance Line was terminated on May 6, 2019.

The Revolving Line expired on February 26, 2022 and was not renewed.

On May 9, 2023, the Company entered into the Fifth Amendment to the Loan Agreement dated February 26, 2019 (the “Fifth Amendment”).

In accordance with the Fifth Amendment, the parties agreed to the following terms, among others:

(i) BankUnited agreed to release its security interest in the collateral securing the BankUnited Loans other than a cash collateral account maintained at BankUnited in the amount of approximately $ 2,457,000 , with a portion of such cash collateral to be released on a quarterly basis equal to 110 % of the principal reductions effected during that quarter, and (ii) certain other requirements and restrictions of the Loan Agreement were removed, including, among others, financial covenants, restrictions on acquisitions, and limitations on other financing sources.

The cash collateral is reflected as Restricted Cash in the accompanying balance sheet as of June 30, 2023.

The Term Loan was paid in full in February 2024, the cash collateral was released, and the Company has no further obligations to BankUnited as of June 30, 2024.

LIGHTPATH TECHNOLOGIES, INC.

Notes to Consolidated Financial Statements (continued)

Financing costs related to the BankUnited Loans were recorded as a discount on debt and are being amortized over the term.

Amortization of approximately $ 59,000 for the year ended June 30, 2023 is included in interest expense.

There was no amortization for the year ended June 30, 2024, as all costs were fully amortized in prior periods.

Future maturities of loans payable are as follows:

Equipment Loans

Fiscal year ending:

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June 30, 2028

After June 30, 2027

Total payments

Less current portion

( 1,023,814 )

Non-current portion

The Company generally relies on cash from operations and equity offerings, and commercial debt, to the extent available, to satisfy its liquidity needs and to meet its payment obligations, including payments due under the Term Loan.

The Company has commenced discussions with prospective lenders regarding the refinancing of its debt obligations prior to the maturity date of the Term Loan on December 31, 2024.

There can be no assurance that we will be successful in such refinancing or that such refinancing will be available under reasonable commercial terms.

If the Company is unable to refinance the credit facility with other commercial lenders prior to maturity, it may need to raise additional equity financing, source financing through non-commercial lenders or reduce operating expenses and capital expenditures in order to repay the credit facility and all charges related thereto upon its maturity on December 31, 2024.

In February 2022, the Company filed a shelf registration statement to facilitate the issuance of its Class A common stock, warrants exercisable for shares of its Class A common stock, and/or units up to an aggregate offering price of $ 75.8 million from time to time.

In connection with the filing of the shelf registration statement, the Company also included a prospectus supplement relating to an at-the-market equity program under which the Company may issue and sell shares of its Class A common stock up to an aggregate offering price of $ 25.2 million from time to time, decreasing the aggregate offering price available under its shelf registration statement to $ 50.6 million.

The shelf registration statement was declared effective by the SEC on March 1, 2022.

The Company has not issued any shares of its Class A common stock pursuant to the at-the-market equity program.

On January 12, 2023, the Company entered into a securities purchase agreement (“Purchase Agreement”), pursuant to which the Company agreed to issue and sell in a public offering under the shelf registration statement an aggregate of 9,090,910 shares of the Company’s Class A common stock, par value $ 0.01 per share for a purchase price of $ 1.10 per share and filed a prospectus supplement with the SEC related thereto.

The sale of shares pursuant to the Purchase Agreement closed on January 17, 2023, and resulted in net proceeds of approximately $ 9.2 million after payment of placement agent fees, and certain other costs and expenses of the offering.

Based on the capital raise that was completed in January 2023, the Company does not expect to need additional equity capital for the foreseeable future.

However, there are a number of factors that could result in the need to raise additional funds, including a decline in revenue or a lack of anticipated sales growth, increased material costs, increased labor costs, planned production efficiency improvements not being realized, increases in property, casualty, benefit and liability insurance premiums, and increases in other costs.

In addition, greater than 25 % of the Company’s cash, cash equivalents and restricted cash is held by its foreign subsidiaries and, although the Company regularly repatriates cash, it may not be readily available to repay its liabilities in the U.S.

The Company will also continue efforts to keep costs under control as it seeks renewed sales growth.

The Company’s efforts are directed toward generating positive cash flow and profitability.

If these efforts are not successful, the Company may need to raise additional capital.

Should capital not be available to the Company at reasonable terms, other actions may become necessary in addition to cost control measures and continued efforts to increase sales.

These actions may include the sale of certain product lines, the creation of joint ventures or strategic alliances under which we will pursue business opportunities, the creation of licensing arrangements with respect to our technology, or other alternatives.

LIGHTPATH TECHNOLOGIES, INC.

Notes to Consolidated Financial Statements (continued)

Contingencies

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In April 2021, the Company terminated several employees of its 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.

In connection with such terminations, the Company’s China subsidiaries have engaged in certain legal proceedings with the terminated employees.

The Company has incurred various expenses associated with its investigation into these matters prior and subsequent to the termination of the employees and the associated legal proceedings.

These expenses, which included legal, consulting and other transitional management fees, totaled $ 718,000 during the year ended June 30, 2021.

During the year ended June 30, 2022, approximately $ 400,000 of related expenses were incurred.

Such expenses were recorded as “Selling, general and administrative” expenses in the accompanying Consolidated Statements of Comprehensive Income (Loss).

The Company also identified a further liability in the amount of $ 210,000 , which may be incurred in the future due to the actions of these employees.

This amount has been accrued as of June 30, 2021, pending further investigation, and included in “Other Expense, net” in the accompanying Consolidated Statement of Comprehensive Income (Loss).

During fiscal year 2022 it was determined that LPOIZ would not be responsible for this amount, and the accrual was reversed with the benefit included in “Other income (expense), net” in the accompanying Consolidated Statement of Comprehensive Income (Loss) for the year ended June 30, 2022.

Knowing that employee transitions in international subsidiaries can lead to lengthy legal proceedings that can interrupt the subsidiary’s ability to operate, compounded by the fact that our officers could not travel to China to oversee the transitions because of the travel restrictions imposed by COVID-19, the Company chose to enter into severance agreements with certain of the employees at the time of termination.

In connection with such terminations, the Company’s China subsidiaries engaged in certain legal proceedings with the terminated employees.

The Company incurred various expenses associated with its investigation into these matters prior and subsequent to the termination of the employees and the associated legal proceedings.

These expenses, which included legal, consulting and other transitional management fees, totaled $ 718,000 and $ 400,000 during the years ended June 30, 2021 and 2022, respectively.

During the years ended June 30, 2024 and 2023, expenses incurred related to the legal proceedings were immaterial.

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, net in the accompanying consolidated statements of comprehensive income (loss) for the year ended June 30, 2024.

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.

Knowing that employee transitions in international subsidiaries can lead to lengthy legal proceedings that can interrupt the subsidiary’s ability to operate, the Company chose to enter into severance agreements with certain of the employees at the time of termination.

Pursuant to the severance agreements, LPOIZ and LPOI agreed to pay such employees severance of approximately $ 485,000 in the aggregate, to be paid over a six-month period.

After the execution of the severance agreements, we discovered additional wrongdoing by the terminated employees.

As a result, LPOIZ and LPOI have not yet paid the severance payments and have disputed the employees’ rights to such payments.

However, based on the likelihood that the courts in China will determine that the Company’s subsidiaries will ultimately be obligated to pay these amounts, we have accrued for these payments as of June 30, 2021.

Such expenses were recorded as “Selling, general and administrative” expenses in the accompanying Consolidated Statement of Comprehensive Income (Loss) for the year ended June 30, 2021.

As of June 30, 2022, approximately $430,000 was accrued.

The Chinese Labor Court ruled in favor of the former employees, as expected, and these severance payments were paid out during the first half of fiscal year 2023.

The Company continues to have litigation pending in the Chinese court system related to these matters, but there has been little activity during fiscal year 2023.

As a result, LPOIZ and LPOI did not immediately pay the severance payments and disputed the employees’ rights to such payments.

However, based on the likelihood that the courts in China would determine that the Company’s subsidiaries would ultimately be obligated to pay these amounts, we accrued for these payments as of June 30, 2021.

Such expenses were recorded as “Selling, general and administrative” expenses in the Consolidated Statement of Comprehensive Income (Loss) for the year ended June 30, 2021.

As of June 30, 2022, approximately $ 430,000 remained accrued.

The Chinese Labor Court subsequently ruled in favor of the former employees, as expected, and these severance payments were paid out during the first half of fiscal year 2023.

The Company has transitioned the management of LPOI and LPOIZ to a new management team without any significant detrimental effects on the ability of those subsidiaries to operate.

Management has not experienced any material adverse impact to the business operations of LPOI or LPOIZ as a result of the transition.

The Company expects to incur additional legal fees and consulting expenses in future periods as all legal options and remedies are pursued;

however, such future fees are expected to be at lower levels than have been incurred to date.

Although the Company has taken steps to minimize the business impacts from the termination of the management employees and transition to new management personnel, the Company experienced some short-term adverse impacts on LPOIZ’s and LPOI’s domestic sales in China and results of operations in the three-month period ended June 30, 2021, which continued throughout fiscal year 2022.

The Company has not experienced, nor does management anticipate, any material adverse impact on LPOIZ’s or LPOI’s production and supply of products to its other subsidiaries for their customers.

LIGHTPATH TECHNOLOGIES, INC.

Notes to Consolidated Financial Statements (continued)

The Company’s business, results of operations financial condition, cash flows, and the stock price of its Class A common stock can be adversely affected by pandemics, epidemics, or other public health emergencies, such as the COVID-19 pandemic.

To date, the Company has not experienced any significant direct financial impact of COVID-19 to its business.

However, the COVID-19 pandemic continues to impact economic conditions, particularly in China, which has impacted the short-term and long-term demand from customers and, therefore, has negatively impacted our results of operations, cash flows, and financial position in that region.

Additionally, some areas have had travel restrictions in place, including China until recently.

Even though China’s travel restrictions are no longer in place, those outside of China are required to re-apply for travel visas and approvals which will continue to affect our ability to travel in China.

As a result, some aspects of our operations that depend on travel, such as recruitment of senior positions, and travel of service providers to maintain our production equipment have been, and will continue to be, adversely impacted.

Management is actively monitoring this situation and taking steps to mitigate the impact on our financial condition, liquidity, and results of operations globally.

However, we are not able to precisely estimate the effects of the continuing COVID-19 pandemic on our future results of operations, financial, or liquidity for fiscal 2024 and beyond.

Impact of Russian-Ukraine Conflict

Potential Impact of Economic Conditions in China

Due to our operations in China, our business, results of operations, financial condition and prospects may be influenced to a significant degree by economic, political, legal and social conditions in China.

China’s economy differs from the economies of other countries in many respects, including with respect to the level of development, growth rate, amount of government involvement, control of foreign exchange and allocation of resources.

While China’s economy has experienced significant growth over the past several decades, its growth rate has declined in recent years and may continue to decline.

Deteriorating economic conditions in China generally have led to lower demand for our products in China and thus lower revenues and net income for our subsidiaries in China and the Company overall.

A continuation of China’s current economic conditions or a further slowdown in the economic growth, an economic downturn, a recession, or other adverse economic conditions in China is likely to have a material adverse effect on our business and results of operations in future quarters.

Impact of Ongoing Wars

In February 2022, Russian military forces invaded Ukraine.

This conflict has resulted in significant economic disruption and continues to adversely impact the broader global economy, including certain of our customers and suppliers.

Given the dynamic nature of this situation, the Company cannot reasonably estimate the impact of the Russian-Ukraine conflict on its financial condition, results of operations or cash flows into the foreseeable future.

This war has led to sanctions on Russia, which have had some impacts, though temporary, on our supply chain of raw materials.

Separately, Israel declared war on Hamas in October 2023.

Initially, this resulted in a temporary increase in our sales, as Israel worked to replace electro-optical systems that in some cases use our materials.

However, it is possible that this war will also have a negative impact on our business at some point as a result of the economic impact in Israel.

In addition to the significant defense related market in Israel, we also serve many commercial related applications and work with commercial companies in Israel, and the business of those customers may be negatively impacted by the war over time.

Given the dynamic nature of this situation, we cannot reasonably estimate the impact of either the Russian-Ukraine conflict or the Israel-Hamas war on our financial condition, results of operations or cash flows into the foreseeable future.

Foreign Operations

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dollar, are reflected as a separate component of equity, which was a cumulative gain of approximately $ 510,000 and $ 607,000 as of June 30, 2024 and 2023, respectively.

During the years ended June 30, 2023 and 2022, we also recognized net foreign currency transaction losses of approximately $ 37,000 and $ 3,000 , respectively, included in the Consolidated Statements of Comprehensive Income (Loss) in the line item entitled “Other income (expense), net.”

During the years ended June 30, 2024 and 2023, we also recognized net foreign currency transaction gains of approximately $ 73,000 and losses of approximately $ 37,000 , respectively, included in the Consolidated Statements of Comprehensive Income (Loss) in the line item entitled “Other income, net.”

Revenues from and long-lived assets located in foreign countries are as follows:

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Rest of world

June 30, 2024

June 30, 2023

Long-lived assets:

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These glasses or equivalents are available from a large number of suppliers, including CDGM Glass Company Ltd., Ohara Corporation, and Sumita Optical Glass, Inc.

Base optical materials, used in certain of the Company’s specialty products, are manufactured and supplied by a number of optical and glass manufacturers.

Base optical materials, used in certain of the Company’s products, are manufactured and supplied by a number of optical and glass manufacturers.

The Company also utilizes major infrared material suppliers located around the globe for a broad spectrum of infrared crystal and glass.

The Company believes that a satisfactory supply of such production materials will continue to be available, however, at higher, inflationary prices largely due to the war in the Ukraine, although there can be no assurance in this regard.

Historically, the Company has sourced Germanium from suppliers located in Russia and China.

At the start of the war in Ukraine, all purchases of Germanium from vendors in Russia ceased and the Company has been purchasing Germanium only from vendors in China.

On July 4, 2023, China announced its intentions to impose some export restrictions on Germanium, requiring all international customers to provide an end user statement for approval before receiving an export license.

Since that announcement, supply of Germanium has been disrupted, though not completely stopped.

To date, the Company has mostly been able to purchase the Germanium that has been needed, however the availability, lead time and ability to receive export licenses varies between vendors.

The Company has strategically reduced the level of Germanium-based orders that it accepts, and continues to work with its customers to design in alternative materials such as its BlackDiamond glasses.

The Company believes that a satisfactory supply of such production materials will continue to be available, however, with longer lead times and higher prices for Germanium in particular, although there can be no assurance in this regard.

In fiscal year 2024, the Company had sales to three customers that comprised an aggregate of approximately 25 % of its annual revenue, and 16 % of its June 30, 2024 accounts receivable.

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Sales to these customers as a percentage of our fiscal year 2023 revenue include one customer at 11 %, another customer at 7 %, and the third customer at 6 %.

One of these customers comprised 7 % of accounts receivable, a second customer comprised 6 % of accounts receivable and the other customer had no accounts receivable balance as of June 30, 2022.

One of these customers comprised 12 % of accounts receivable, a second customer comprised 9 % of accounts receivable and a third customer comprised 5 % of the accounts receivable balance as of June 30, 2023.

The loss of any of these customers, or a significant reduction in sales to any such customer, would adversely affect the Company’s revenues.

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In fiscal year 2023, 50 % of the Company’s net revenue was derived from sales outside of the U.S., with 93 % of foreign sales derived from customers in Europe and Asia.

Subsequent Event

In July 2023, the Company acquired Liebert Consulting LLC, dba Visimid Technologies (“Visimid”), pursuant to the Membership Interest Purchase Agreement dated as of July 25, 2023 (the “Acquisition Date”).

Part of the Company’s growth strategy is to identify appropriate opportunities that would enhance our profitable growth through acquisition.

Visimid is an engineering and design firm specializing in thermal imaging, night vision and internet of things (“IOT”) applications.

Visimid provides design and consulting services for Department of Defense (“DoD”) contractors, commercial and industrial customers, and OEMs for original new products.

Visimid’s core competency is developing and producing custom thermal and night vision cores.

The Company believes that Visimid’s capabilities are aligned with our strategy to focus on engineered solutions.

The Company’s consolidated financial statements will reflect the financial results of Visimid beginning on the Acquisition Date.

The purchase price includes $ 1 million in cash, $ 1,550,000 of restricted stock, $ 150,000 of assumed bank debt, and an earnout which is contingent upon the award and completion of a specific customer contract.

Of the restricted stock payable as part of the purchase price, $150,000 (81,610 shares) was issued at closing, with the balance to be issued on four equal installments of $350,000 each on January 1, 2024, July 1, 2024, January 1, 2025 and July 1, 2025 .

The number of shares is based on the average closing price of the Company’s Class a common stock, as reported by Bloomberg, for the five trading days prior to each stock issuance.

For the year ended June 30, 2023, the Company incurred approximately $ 140,000 in acquisition costs which are included in the consolidated statements of comprehensive income in the line item entitled “Selling, general and administrative.”

We generally rely on cash from operations and equity and debt offerings, to the extent available, to satisfy our liquidity needs and to maintain our ability to repay our debt.

On February 16, 2022, we filed a shelf registration statement to facilitate the issuance of our Class A common stock, warrants exercisable for shares of our Class A common stock, and/or units up to an aggregate offering price of $ 75.8 million from time to time.

In connection with the filing of the shelf registration statement, we also included a prospectus supplement relating to an at-the-market equity program under which we may issue and sell shares of our Class A common stock up to an aggregate offering price of $ 25.2 million from time to time, decreasing the aggregate offering price available under the shelf registration statement to $ 50.6 million.

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 sale of shares pursuant to the Purchase Agreement closed on January 17, 2023, and resulted in net proceeds of approximately $9.2 million after payment of placement agent fees, and certain other costs and expenses of the offering .

There are a number of factors that could result in the need to raise additional funds, including a decline in revenue or a lack of anticipated sales growth, increased material costs, increased labor costs, planned production efficiency improvements not being realized, increases in property, casualty, benefit and liability insurance premiums, and increases in other costs.

In addition, we may 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.

LIGHTPATH TECHNOLOGIES, INC.

Notes to Consolidated Financial Statements (continued)

Subsequent Events

Bridge Promissory Note

On August 6, 2024, the Company entered into a bridge promissory note (the “Note”) with Lytton-Kambara Foundation (the “Lender”) pursuant to which the Lender extended a loan to the Company in the principal amount of $ 3,000,000 (the “Loan”).

The Loan is subject to an original issue discount of 7 %.

After deducting the original issue discount, fees paid to the Company’s placement agent, and certain expenses, the Company received net proceeds of $ 2,700,000 .

The Loan bears interest at the rate of 12.5 % per annum and has a 1 -year term, maturing on August 6, 2025 (the “Maturity Date”), at which time the entire principal amount of the Loan and all accrued but unpaid interest is due and payable in full.

The Company may prepay the principal outstanding under the Note at any time prior to the Maturity Date at 105% of the prepaid principal amount plus any unpaid accrued interest.

Upon the consummation of a transaction resulting in a Change of Control (as defined in the Note) the Company is required to repay the holder of the Note in cash an amount equal to 105% of the outstanding principal balance of the Note plus unpaid accrued interest on the original principal .

The Note contains customary representations, warranties and covenants for agreements of this type and provides for customary events of default, including among other things, failure to make payments when due, breaches of representations and warranties, and certain bankruptcy and insolvency events.

Upon an event of default, the Note’s interest rate shall increase to 18% per annum and the Note holder may, at its option, accelerate the Note whereupon the entire principal amount thereof and all accrued but unpaid interest shall be due and payable in full.

The foregoing descriptions of the Note do not purport to be complete and are qualified in their entirety by reference to the Note, a copy of which is filed as an Exhibit to this Annual Report on Form 10-K and is incorporated herein by reference.

End of Consolidated Financial Statements

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September 19, 2024

President & Chief Executive Officer (Principal Executive Officer)

Albert Miranda

President & Chief Executive Officer

Chief Financial Officer

(Principal Executive Officer)

(Principal Financial Officer)

2 unchanged sentences

September 19, 2024

Joseph Menaker

Director (Chairman of the Board)

/s/ LOUIS LEEBURG

Joseph Menaker

ERIC CREVISTON

September 19, 2024

1 unchanged sentence

September 19, 2024

Louis Leeburg

Eric Creviston

/s/ KIMBERLY CRIDER

September 19, 2024

Eric Creviston

Kimberly Crider

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures