SYNTEC OPTICS HOLDINGS, INC. 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended September 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-41034 SYNTEC OPTICS HOLDINGS, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 87-0816957 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 515 Lee Rd. Rochester , NY 14606 (Address of principal executive offices and zip code) (585) 464-9336 (Registrant’s telephone number including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common stock, par value $0.0001 per share OPTX The Nasdaq Capital Market Redeemable warrants, exercisable for shares of common stock at an exercise price of $11.50 per share OPTXW The Nasdaq Capital Market Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☒ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ As of November 11, 2025, there were 36,920,226 shares of Class A common stock, par value $ 0.0001 per share, issued and outstanding. SYNTEC OPTICS HOLDINGS, INC. FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2024 TABLE OF CONTENTS Page Part I. FINANCIAL INFORMATION 1 Item 1. Interim Unaudited Condensed Consolidated Financial Statements 1 Condensed Consolidated Balance Sheets as of September 30, 2025 (Unaudited) and December 31, 2024 1 Condensed Consolidated Statements of Operations for the Three and Nine Months ended September 30, 2025 and 2024 (Unaudited) 2 Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited) 3 Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 (Unaudited) 5 Notes to Condensed Consolidated Financial Statements (Unaudited) 6 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 12 Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk 17 Item 4. Controls and Procedures 18 Part II. OTHER INFORMATION 19 Item 1. Legal Proceedings 19 Item 1A. Risk Factors 19 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 19 Item 3. Defaults Upon Senior Securities 19 Item 4. Mine Safety Disclosures 19 Item 5. Other Information 19 Item 6. Exhibits 19 SIGNATURES 20 PART I - FINANCIAL INFORMATION Item 1. Interim Unaudited Condensed Consolidated Financial Statements Syntec Optics Holdings, Inc. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 2025 AND DECEMBER 31, 2024 2025 (unaudited) 2024 ASSETS Current Assets Cash $ 577,924 $ 598,787 Accounts Receivable, Net 5,820,942 5,739,205 Inventory 7,921,931 6,953,278 Income Tax Receivable - 9,794 Prepaid Expenses and Other Assets 245,116 596,589 Total Current Assets 14,565,913 13,897,653 Property and Equipment, Net 9,739,651 11,668,859 Deferred Tax Asset 270,360 439,942 Total Assets $ 24,575,924 $ 26,006,454 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities Accounts Payable $ 2,359,987 $ 2,706,392 Accrued Expenses 1,017,347 814,600 Deferred Revenue 20,363 36,512 Line of Credit 6,763,863 6,263,863 Current Maturities of Debt Obligations 1,455,415 467,742 Current Maturities of Finance Lease Obligations 347,425 284,002 Total Current Liabilities 11,964,400 10,573,111 Long-Term Liabilities Long-Term Debt Obligations 1,287,926 2,614,812 Long-Term Finance Lease Obligations 1,513,905 1,784,449 Total Long-Term Liabilities 2,801,831 4,399,261 Total Liabilities 14,766,231 14,972,372 Commitments and Contingencies - - Stockholders’ Equity CL A Common Stock, Par value $ .0001 per share; 121,000,000 authorized; 36,920,226 issued and outstanding as of September 30, 2025; 36,688,266 issued and outstanding as of December 31, 2024; 3,692 3,669 Common stock value 3,692 3,669 Additional Paid-In Capital 2,602,181 2,377,204 Retained Earnings 7,203,820 8,653,209 Total Stockholders’ Equity 9,809,693 11,034,082 Total Liabilities and Stockholders’ Equity $ 24,575,924 $ 26,006,454 The accompanying notes are an integral part of the unaudited condensed consolidated financial statements. 1 Syntec Optics Holdings, Inc. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Three Months Ended Nine Months Ended September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Net Sales $ 6,950,220 $ 7,866,355 $ 20,578,717 $ 21,128,263 Cost of Goods Sold 6,095,861 6,032,635 15,817,774 16,412,773 Gross Profit 854,359 1,833,720 4,760,943 4,715,490 General and Administrative Expenses 2,072,962 1,727,480 5,597,344 5,857,806 (Loss) Income from Operations ( 1,218,603 ) 106,240 ( 836,401 ) ( 1,142,316 ) Other Income (Expense) Interest Expense, Including Amortization of Debt Issuance Costs ( 214,425 ) ( 206,069 ) ( 624,290 ) ( 533,178 ) Other Income 3,895 8,575 20,890 347,547 Total Other (Expense) ( 210,530 ) ( 197,494 ) ( 603,400 ) ( 185,631 ) Income (Loss) Before Provision for (Benefit) Income Taxes ( 1,429,133 ) ( 91,254 ) ( 1,439,801 ) ( 1,327,947 ) Provision (Benefit) for Income Taxes - ( 77,965 ) 9,588 ( 387,358 ) Net Loss $ ( 1,429,133 ) $ ( 13,289 ) $ ( 1,449,389 ) $ ( 940,589 ) Net Loss per Common Share Basic and diluted $ ( 0.04 ) $ ( 0.00 ) $ ( 0.04 ) $ ( 0.03 ) Weighted Average Number of Common Shares Outstanding Basic and diluted 36,920,226 36,688,266 36,920,226 36,688,266 The accompanying notes are an integral part of the unaudited condensed consolidated financial statements. 2 SYNTEC OPTICS HOLDINGS, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 Additional Common Stock Paid-In Retained Shares Amount Capital Earnings Total Balances, January 1, 2025 36,688,266 $ 3,669 $ 2,377,204 $ 8,653,209 $ 11,034,082 Net Income - - - 323,665 323,665 Stock-Based Compensation 231,960 23 ( 23 ) - - Balances, March 31, 2025 36,920,226 3,692 2,377,181 8,976,874 11,357,747 Net Loss - - - ( 343,921 ) ( 343,921 ) Balances, June 30, 2025 36,920,226 3,692 2,377,181 8,632,953 11,013,826 Net Loss - - - ( 1,429,133 ) ( 1,429,133 ) Stock-Based Compensation - - 225,000 - 225,000 Balances, September 30, 2025 36,920,226 $ 3,692 $ 2,602,181 $ 7,203,820 $ 9,809,693 3 SYNTEC OPTICS HOLDINGS, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 Additional Common Stock Paid-In Retained Shares Amount Capital Earnings Total Balances, January 1, 2024 36,688,266 $ 3,669 $ 1,927,204 $ 11,132,869 $ 13,063,742 Balances 36,688,266 $ 3,669 $ 1,927,204 $ 11,132,869 $ 13,063,742 Net Loss - - - ( 1,209,143 ) ( 1,209,143 ) Balances, March 31, 2024 36,688,266 3,669 1,927,204 9,923,726 11,854,599 Balances 36,688,266 3,669 1,927,204 9,923,726 11,854,599 Net Income - - - 281,843 281,843 Balances, June 30, 2024 36,688,266 3,669 1,927,204 10,205,569 12,136,442 Balances 36,688,266 $ 3,669 $ 1,927,204 $ 10,205,569 $ 12,136,442 Net Loss - - - ( 13,289 ) ( 13,289 ) Net Income (Loss) - - - ( 13,289 ) ( 13,289 ) Balances, September 30, 2024 36,688,266 $ 3,669 $ 1,927,204 $ 10,192,280 $ 12,123,153 Balances 36,688,266 $ 3,669 $ 1,927,204 $ 10,192,280 $ 12,123,153 The accompanying notes are an integral part of the unaudited condensed consolidated financial statements. 4 Syntec Optics Holdings, Inc. UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 2025 2024 Cash Flows From Operating Activities Net Loss $ ( 1,449,389 ) $ ( 940,589 ) Adjustments to Reconcile Loss to Net Cash (Used In) Provided By Operating Activities: Adjustments to Reconcile Loss to Net Cash (Used In) Provided By Operating Activities: Depreciation and Amortization 2,033,935 2,122,999 Amortization of Debt Issuance Costs 7,250 6,806 Stock-Based Compensation 225,000 - Gain on Disposal of Property and Equipment - ( 309,000 ) Change in Allowance for Expected Credit Losses 21,571 132,764 Change in Reserve for Obsolescence ( 6,499 ) 283,196 Deferred Income Taxes - ( 495,151 ) (Increase) Decrease in: Accounts Receivable ( 103,308 ) 845,314 Inventory ( 962,154 ) ( 2,010,070 ) Federal Income Tax Receivable 179,376 - Prepaid Expenses and Other Assets 351,473 15,001 Increase (Decrease) in: Accounts Payables and Accrued Expenses 395,423 ( 1,022,602 ) Federal Income Tax Payable - ( 278,079 ) Deferred Revenue ( 16,149 ) 82,813 Net Cash Provided By (Used In) Operating Activities 676,529 ( 1,566,598 ) - Cash Flows From Investing Activities Purchases of Property and Equipment ( 643,808 ) ( 628,229 ) Proceeds from Disposal of Property and Equipment - 309,000 Net Cash Used in Investing Activities ( 643,808 ) ( 319,229 ) Cash Flows From Financing Activities (Repayments) Borrowing on Line of Credit, Net 500,000 ( 473,729 ) Borrowing on Debt Obligations - 1,100,388 Repayments on Debt Obligations ( 346,463 ) ( 335,209 ) Repayments on Finance Lease Obligations ( 207,121 ) ( 87,084 ) Net Cash (Used in) Provided By Financing Activities ( 53,584 ) 204,366 Net Decrease in Cash ( 20,863 ) ( 1,681,461 ) Cash - Beginning 598,787 2,158,245 Cash - Ending $ 577,924 $ 476,784 Supplemental Cash Flow Disclosures: Cash Paid for Interest $ 622,197 $ 459,994 - Cash Paid for Taxes $ - $ 568,143 Supplemental Disclosures of Non-Cash Investing Activities: Assets Acquired and Included in Accounts Payable and Accrued Expenses $ 2,050 $ 626,000 Issuance of restricted stock from stock-based compensation $ 23 $ - The accompanying notes are an integral part of the unaudited condensed consolidated financial statements. 5 SYNTEC OPTICS HOLDINGS, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 1 — Description of Organization and Business Operations Nature of Business Syntec Optics Holdings, Inc. (the “Company” or “Syntec Optics”) is a vertically integrated manufacturer of optics and photonics components and sub-systems – from opto-mechanicals to optical elements of various geometries, diamond turned optics – both prototype and production, and optical systems including optics assembly, electro-optics assembly, design, and coating. Sales are made to customers in the United States and Europe in defense, medical, and consumer end-markets. The Company has one reporting segment as its operating segments meet the requirements for aggregation. Note 2 — Summary of Significant Accounting Policies The Company has provided a discussion of significant accounting policies, estimates and judgements in its 2024 Annual Report. There have been no changes to the Company’s significant accounting policies since December 31, 2024. Basis of Presentation The accompanying interim unaudited condensed consolidated financial statements have been prepared by the Company in United States (“U.S.”) dollars and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”), the instructions to Form 10-Q and the provisions of Regulation S-X pertaining to interim financial statements. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted. The interim unaudited condensed consolidated financial statements and notes included in this report should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. In the opinion of management, these interim unaudited condensed consolidated financial statements include all adjustments and accruals of a normal and recurring nature necessary to fairly state the results of the interim periods presented. The results for interim periods are not necessarily indicative of results to be expected for the full year or for any future periods. 6 SYNTEC OPTICS HOLDINGS, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 3 — Disaggregated Revenues The following table disaggregates revenue by revenue recognition methodologies for the three and nine months ended September 30: Schedule of Disaggregated Revenues 2025 2024 2025 2024 Three Months Ended September 30 Nine Months Ended September 30 2025 2024 2025 2024 Products $ 6,734,332 $ 7,807,975 $ 20,002,436 $ 20,690,178 Custom Tooling 82,720 15,443 291,113 394,148 Non-Recurring Engineering 133,168 42,937 285,168 43,937 Total $ 6,950,220 $ 7,866,355 $ 20,578,717 $ 21,128,263 Syntec Optics’ management periodically reviews its revenues by its consumer, communication, medical, and defense end-markets. The purpose of this analysis is to determine its end market mix and identify trends. The following table disaggregates revenue as outlined above for the three and nine months ended September 30: 2025 2024 2025 2024 Three Months Ended September 30 Nine Months Ended September 30 2025 2024 2025 2024 Communication $ 942,856 $ 961,058 $ 3,749,541 $ 3,644,868 Consumer 1,698,611 2,305,316 4,383,933 6,068,421 Defense 1,813,805 2,021,659 4,782,239 4,442,457 Medical 2,494,948 2,578,322 7,663,004 6,972,517 Total $ 6,950,220 $ 7,866,355 $ 20,578,717 $ 21,128,263 Revenues $ 6,950,220 $ 7,866,355 $ 20,578,717 $ 21,128,263 7 SYNTEC OPTICS HOLDINGS, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 4 — Inventory Inventory consists of the following at September 30, 2025 and December 31, 2024: Schedule of Inventory 2025 2024 Raw Materials $ 680,000 $ 487,405 Work-in-Process 7,581,251 6,815,425 Finished Goods 253,997 153,353 Inventory gross 8,515,248 7,456,183 Less: Reserve for Obsolescence 593,317 502,905 Inventory $ 7,921,931 $ 6,953,278 Note 5 — Property and Equipment Property and equipment consists of the following at September 30, 2025 and December 31, 2024: Schedule of Property and Equipment 2025 2024 Machinery and Equipment $ 34,529,355 $ 34,430,556 Building and Leasehold Improvements 5,483,617 5,483,616 Land 130,000 130,000 Office Furniture and Equipment 2,295,749 2,295,749 Tooling 169,308 163,381 Vehicles 24,059 24,059 Property and Equipment, Gross 42,632,088 42,527,361 Less: Accumulated Depreciation 32,892,437 30,858,502 Property and Equipment, Net $ 9,739,651 $ 11,668,859 Depreciation expenses were $ 646,506 and $ 722,393 for the three months ended September 30, 2025 and 2024, respectively, and $ 2,033,935 and $ 2,077,999 for the nine months ended September 30, 2025 and 2024, respectively. 8 SYNTEC OPTICS HOLDINGS, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 6 — Line of Credit The Company has a line of credit available in the amount of $ 8,000,000 with M&T Bank (the “Credit Agreement”). Borrowings may be made against the line of credit as Secured Overnight Financing Rate (“SOFR”) Loans. The weighted average rate on outstanding borrowings as of September 30, 2025 was 7.31 %. As of September 30, 2025 and December 31, 2024, the Company had $ 6,763,863 and $ 6,263,863 , respectively, outstanding under the line of credit facility. The Credit Agreement contains customary covenants and restrictions on the Company’s ability to engage in certain activities and financial covenants requiring the Company to maintain certain financial ratios. As of September 30, 2025, the Company was not in compliance with certain financial covenants under its Amended and Restated Credit Agreement with M&T Bank, including the minimum fixed charge coverage ratio of 1.10:1.00 and the maximum total leverage ratio of 4.75:1.00. On November 12, 2025, the Company received a written waiver from M&T Bank for these covenant defaults. The waiver requires the Company to (i) repay approximately $ 1.3 million of outstanding term and equipment debt, which is included as part of the long-term debt, by November 14, 2025; (ii) execute subordination agreements on shareholder loans prohibiting repayment without lender consent; and (iii) reduce the revolving credit line commitment from $ 8.0 million to $ 7.5 million. The impact to the unamortized debt issuance cost in Note 7 was immaterial. The Company remains in good standing under the Credit Agreement and continues to classify the debt as a liability under ASC 470. Management expects to comply with all modified terms and covenants on a go-forward basis. Note 7 — Long-Term Debt Long-term debt consists of the following at September 30, 2025 and December 31, 2024: Schedule of Long Term Debt Maturities 2025 2024 The Company entered into a $ 863,607 mortgage note payable, securitized by the Company’s real estate and cross-collateralized with all Company assets, with M&T Bank, requiring monthly installments of $ 7,389 , including interest at a fixed rate of 6.13 %. The note matures in February 2029 . $ 808,746 $ 836,815 The Company entered into a $ 236,781 term note payable with M&T Bank, requiring monthly principal installments of $ 3,385 , plus interest at a fixed rate of 6.05 %. The note matures in March 2029 . This note was paid off on November 12, 2025. See Financial Statement Note 15 Subsequent Events, for additional details. 173,379 205,829 The Company entered into a $ 1,775,000 term note payable with M&T Bank, requiring monthly principal installments of $ 34,886 plus interest at a fixed rate of 6.59 %. The note matures in November 2028 . T his note was paid off on November 12, 2025. See Financial Statement Note 15 Subsequent Events, for additional details. 1,189,285 1,436,662 The Company entered into a $ 1,064,000 term note payable with the U.S. Small Business Administration, requiring monthly installments of $ 6,652 , including fees and interest at a fixed rate of 2.22 %. The note matures in June 2036 . The note is secured by certain assets of the Company and a personal guaranty of the Company’s stockholder. 629,439 668,006 Total Long-Term Debt 2,800,849 3,147,312 Less: Unamortized Debt Issuance Costs 57,508 64,758 Long-Term Debt, Less Unamortized Debt Issuance Costs 2,743,341 3,082,554 Less: Current Maturities 1,455,415 467,742 Long-Term Debt $ 1,287,926 $ 2,614,812 At September 30, 2025, the future debt maturities are as follows: Schedule of Long Term Future Debt Maturities December 31, 2025 (remainder of year) $ 1,358,907 2026 93,663 2027 97,425 2028 101,375 2029 105,525 Thereafter 1,043,954 Total $ 2,800,849 9 SYNTEC OPTICS HOLDINGS, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 8 — Retirement Plan The Company maintains a 401(k) retirement plan covering eligible employees of the Company and its affiliate. Under the plan, participants may defer a percentage of their annual compensation, with Syntec Optics matching 50% of employee contributions not to exceed 6% of annual compensation . Total contributions for the Company for the three months ended September 30, 2025 and 2024 amounted to $ 47,000 and $ 52,000 , respectively, and for the nine months ended September 30, 2025 and 2024 were approximately $ 140,000 and $ 147,000 , respectively. Note 9 — Income Taxes The income tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. The effective income tax rate was 20.3 % and 29.2 % for the nine months ended September 30, 2025 and 2024, respectively. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as expensing of U.S. research expenditures and eligible capital expenditures, the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The impacts of the OBBBA are reflected in our results for the quarter ended September 30, 2025, and there was no impact to the Company’s income tax expense or effective income tax rate. Note 10 — Leases During 2024, the Company entered into finance lease agreements for equipment utilized in its manufacturing facility. The components of operating and finance lease costs are as follows for the three and nine months ended September 30: Schedule of Operating Lease and Finance Lease Costs 2025 2024 2025 2024 Three Months ended September 30 Nine Months ended September 30 2025 2024 2025 2024 Finance Lease Cost: Amortization of assets $ 82,157 $ 43,794 $ 246,471 $ 43,794 Interest on liabilities 38,258 33,007 120,095 33,007 Total lease cost $ 120,415 $ 76,801 $ 366,566 $ 76,801 Supplemental cash flow information related to leases are as follows for the three and nine months ended September 30: Schedule of Cash Flow Information Related To Leases 2025 2024 2025 2024 Three Months ended September 30 Nine Months ended September 30 2025 2024 2025 2024 Cash paid for amounts included in measurement of lease obligations: Operating cash flows from operating leases $ - $ - $ - $ - Operating cash flows from finance leases $ 38,258 $ 33,007 $ 120,095 $ 33,007 Financing cash flows from finance leases $ 90,379 $ 87,084 $ 205,679 $ 87,084 The following table summarizes weighted average remaining lease term and discount rates as of September 30, 2025, and December 31, 2024: Schedule of Weighted Average Remaining Lease Term 2025 2024 Weighted average remaining lease term (years) Operating leases N/A N/A Finance leases 4.25 5.00 Weighted average discount rate Operating leases N/A N/A Finance leases 8.4 % 8.4 % Future maturities of our lease liabilities are as follows as of September 30, 2025: Schedule of Future Maturities of Lease Liabilities 2025 remainder of year $ 128,381 2026 513,525 2027 513,525 2028 513,525 2029 513,524 Thereafter - Total Undiscounted Lease Obligations 2,182,480 Less: Imputed Interests 321,150 Present Value of Lease Obligations $ 1,861,330 10 SYNTEC OPTICS HOLDINGS, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 11 — Warrants The following tables presents a roll-forward of the Company’s warrants from December 31, 2024 to September 30, 2025: Schedule of Warrant Common Stock Warrants Warrants outstanding, December 31, 2024 14,107,989 Warrants exercised - Warrants outstanding, September 30, 2025 14,107,989 Note 12 — Loss Per Share The following table sets forth the information needed to compute basic and diluted loss per share for the three and nine months ended September 30, 2025 and 2024: Schedule of Basic And Diluted (Loss) Earnings Per Share 2025 2024 2025 2024 Three Months ended September 30, Nine Months ended September 30, 2025 2024 2025 2024 Basic and diluted net loss per share Numerator: Net loss $ ( 1,429,133 ) $ ( 13,289 ) $ ( 1,449,389 ) $ ( 940,589 ) Denominator Weighted-average shares outstanding 36,920,226 36,688,266 36,920,226 36,688,266 Basic and diluted net loss per share $ ( 0.04 ) $ ( 0.00 ) $ ( 0.04 ) $ ( 0.03 ) Note that there were no potentially dilutive shares that were excluded from the weighted-average share calculation as of September 30, 2025 and 2024. Note 13 — Significant Customers For the three months ended September 30, 2025, the Company generated 48 % of revenues from three customers. For the nine months ended September 30, 2025, the Company generated 42 % of revenues from three customers. These three customers are in different end-markets utilizing diverse manufacturing capabilities from the Company. The outstanding accounts receivable due from these customers were approximately $ 3.0 million as of September 30, 2025. For the three and nine months ended September 30, 2024, the Company generated 53 % of revenues from three customers. The outstanding accounts receivable due from these customers were approximately $ 3.6 million as of September 30, 2024. Note 14 Segment reporting The Company operates as one operating segment. The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer, who reviews the financial statements on a consolidated basis. The CODM uses the Company’s long-range plan to allocate resources. The CODM makes decisions on resource allocation, assessments of performance, and monitors budget versus actual results using consolidated loss from operations. Significant expenses within loss from operations, as well as within net loss, include general and administrative expenses, and other expenses which are each separately presented on the Company’s Consolidated Statements of Operations and Comprehensive Loss. Note 15 Subsequent Events On October 10, 2025, the Company received a letter from The Nasdaq Stock Market, confirming that the Company is now in compliance with Listing Rule 5250(c)(1), and the matter of the delinquent filings, which was previously disclosed in an 8-K filing dated April 23, 2025, is now considered closed. On November 12, 2025, the Company received a waiver letter from its senior lender, M&T Bank, related to the Company’s noncompliance with (i) the minimum Fixed Charge Coverage Ratio of 1.10:1.00 and (ii) the maximum Total Leverage Ratio of 4.75:1.00 as of September 30, 2025 (each as defined in the Amended and Restated Credit Agreement dated November 30, 2024, as amended). The lender waived the identified defaults, subject to (among other conditions) (a) repayment of certain term and equipment loans and (b) execution of documentation satisfactory to the lender, including subordination of any shareholder loans, and (c) a reduction of the revolving credit availability from $ 8.0 million to $ 7.5 million. As a result, the Company reclassified $ 964,993 of the term and equipment loans, from long term debt to current debt. On November 12, 2025, the Company repaid $ 1.3 million on two loans to M&T Bank as required by the waiver letter using both internally provided funds and $ 1.1 million obtained from a stockholder loan. The final terms of that stockholder loan, as well as the subordination agreement with M&T Bank, will be approved and finalized before December 28, 2025 as outlined in the bank’s waiver letter. The stockholder loan is from the Company’s majority stockholder and Chief Executive Officer. The terms of the stockholder agreement are expected to include an interest rate similar to the loans that were paid off. The amortization period will be 35 months, similar to the remaining number of payments on the loans that were paid off. Pursuant to the waiver letter, the revolving line of credit availability has been reduced to $ 7.5 million. 11 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The information in this Management’s Discussion and Analysis should be read in conjunction with the accompanying unaudited condensed financial statements and notes. Cautionary Note Regarding Forward-Looking Statements This report includes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions are intended to identify forward-looking statements. All statements other than statements of historical facts contained in this report, including among others, our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth are forward-looking statements. Our actual results and financial condition may differ materially from those express or implied in such forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. For a further list and description of various risks, relevant factors and uncertainties that could cause future results or events to differ materially from those expressed or implied in our forward-looking statements, see the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections in this report, our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and our other filings with the Securities and Exchange Commission (the “SEC”). All forward-looking statements in this report are made only as of the date hereof or as indicated and represent our views as of the date of this report. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise, except as required by law. Overview Syntec Optics is vertically integrated from design and component manufacturing for lens system assembly to imaging module integration for system solutions. Making our own tools, molding, and nanomachining allows close interaction and recut ability, enabling special techniques to hold tolerances up to sub-micron level. Syntec has assembled a world class design for manufacturability team to augment its production team with deep expertise to fully leverage our vertical integration from component making to optics and electronics assembly. Syntec Optics has steadily developed variety of other complementary manufacturing techniques to provide a wide suite of horizontal capabilities including thin films deposition coatings, glass molding, polymer molding, tool-making, mechanicals manufacturing, and nanomachining. Syntec became a leader in the industry by pioneering polymer-based optics and then subsequently adding glass optics and optics made from other materials including crystals and metals. Polymer-based optics provide numerous advantages compared to incumbent glass-based optics. Polymer-based optics are smaller, lower weight, lower cost, and offer very high-performance optical solutions. For all these reasons, Syntec is able to deliver products to our clients that are lighter, smaller, and suitable for cutting edge technology products, including the newly evolving silicon photonics industry. Our designs and assembly processes are developed in-house in the United States. In 2016, Syntec Optics expanded its manufacturing facility to nearly 90,000 square-feet, allowing us to increase our production capacity and offer additional advanced manufacturing processes under one roof which provide us the ability to increase sales to existing customers and increase penetration of our end-markets. Our facility provides a streamlined, partially autonomous production process for our current customers, which comprises optical assembly, electro-optics assembly, polymer optics molding, glass optics molding, opto-mechanical assembly, nanomachining and thin films coating. Our facility also provides availability to expand the number of advanced manufacturing processes to handle increased volumes of existing and new customer orders. Syntec Optics focuses on four end markets of defense, medical, consumer, and communications all with several mission-critical applications with strong tailwinds. In 2023, Syntec Optics launched low weight night vision optics and further, announced hybrid light-weight magnifier and thermal clip on in the defense end market. Also, in 2023, Syntec Optics announced biomedical mirrors for sensing in the medical end market. Rounding out new product launches for 2023, in the communication end market, Syntec Optics launched microlens arrays and low earth satellite optics. 12 Key Factors Affecting Our Operating Results Our financial position and results of operations depend to a significant extent on the following factors: End Market Consumers The demand for our products ultimately depends on demand from customers in our current end markets. We generate sales through (1) Tier 1 suppliers and (2) through OEMs. An increasing proportion of our sales has been and is expected to continue to be derived from sales to defense. biomedical and industrial/consumer OEMs, driven by continued efforts to develop and expand sales to OEMs with whom we have longstanding relationships. Future OEM sales will be subject to risks and uncertainties, including the number of defense, biomedical and industrial/consumer products these OEMs manufacture and sell, which in turn may be driven by the expectations these OEMs have around end market demand. Demand from end markets is impacted by a number of factors, including travel restrictions (global pandemics or geo-political conflicts), fuel costs and energy demands (including an increasing trend towards the use of green energy), as well as overall macro-economic conditions. Sales of our optics and photonics enabled components and sub-components have also benefited from the increased global conflict, the United States dynamic relationships with other world powers that may have a conflicting view with western-style democracy, the movement towards reshoring of advanced manufacturing, biomedical components and sub-components needed to support physicians in their battle against global pandemics, and the increased global demand for high-fidelity data communications on all corners of the globe. Syntec Optics plans to grow to the new end markets of communications and sensing. Syntec Optics entered the communications end market in 2023. Syntec Optics is currently engaged as a supplier for a U.S. Department of Commerce’s National Institute of Standards and Technology (NIST) funded research and development project for the sensing end market. The communication end market is characterized by the use of optics and photonics for data transmittal and reception of information, including, for example, satellite communications and other associated applications. The sensing end-market is characterized by the use of optics and photonics to detect scattered light or light with an altered refractive index due to the presence of a medium within a wide range of potential applications, including, for example, disease detection and other associated applications. Supply We currently rely on strategically selected electronics, highly engineered polymers and aluminum manufacturers located in the United States to manufacture our highly specialized optic and photonics enabled components and sub-components, and we intend to continue to rely on these suppliers going forward. Our close working relationships with our Unites States based suppliers, reflected in our ability to (x) increase our purchase order volumes (qualifying us for related volume-based discounts) and (y) order and receive delivery of raw materials in anticipation of required demand, has helped us moderate increased supply-related costs associated with inflation and to avoid potential shipment delays. To mitigate against potential adverse production events, we opted to build our inventory of key raw materials. In connection with these stockpiling activities, we experienced an increase in prepaid inventory compared to prior periods as suppliers required upfront deposits in response to supply chain disruptions. As a result of the active steps we have taken to manage our inventory levels, we have not been subject to the shortages or price impacts that have been present for manufacturers of optic and photonic enabled components or sub-components. Product and Customer Mix Our sales consist of sales of highly specialized optic and photonic enabled components and sub-components. These products are sold to different customer types (e.g., OEMs and Tier 1 manufacturers) and at different prices and involve varying levels of costs. In any particular period, changes in the mix and volume of particular products sold and the prices of those products relative to other products will impact our average selling price and our cost of goods sold. The price of our products may also increase as a result of increases in the cost of components due to inflation, labor and raw materials. In addition, revenues from these larger customers may fluctuate from time to time based on these customers’ business needs and customer experience, the timing of which may be affected by market conditions or other factors outside of our control. These customers have a broad product purchase mix across various departments of Syntec Optics. Syntec Optics supplies several mission critical components and sub-components to these customers that are not tied to a single application, customer initiative, or purchase order. We expect sales to increase as we further advance our full-system design expertise and product offerings and customers increasingly demand more sophisticated systems, rather than drop-in replacements. In addition to the impacts attributable to the general sales mix across our products, our results of operations are impacted by the relative margins of products sold. As we continue to introduce new products at varying price points, our overall gross margin may vary from period to period as a result of changes in product and customer mix. Production Capacity All of our design, advanced manufacturing and assembly currently takes place at our nearly 90,000 square foot headquarters and manufacturing facility located in Rochester, New York. We currently operate optical, opto-mechanical and electro-optical assembly lines in addition to molding, nanomachining, testing and thin-film production lines. Consistent with our operating history, we plan to continue to automate additional aspects of our advanced manufacturing operations. Our existing facility has the capacity to add additional production lines and construct and operate pilot production lines for new components and sub-components, all designed to maximize the capacity of our manufacturing facility. Although our automation efforts are expected to reduce our costs of goods, we may not fully recognize the anticipated savings when planned and could experience additional costs or disruptions to our production activities. 13 Competition We compete with traditional glass optic manufacturers and electro-optic manufacturers, who primarily either import their products or components or manufacture products under a private label. As we continue to expand into new markets, develop new products and move towards production of our polymer based and glass-polymer based optic hybrids and photonics enabled components and sub-components, we will experience competition with a wider range of companies. These competitors may have greater resources than we do and may be able to devote greater resources to the development of their current and future technologies. Our competitors may be able to source materials and components at lower costs, which may require us to evaluate measures to reduce our own costs, lower the price of our products or increase sales volumes in order to maintain our expected levels of profitability. Research and Development Our research and development are primarily focused on the advanced manufacturing of polymer and glass-polymer based optic and photonics enabled components and sub-components. The next stage in our technical development is to construct our products to optimize performance, lower weight and increase longevity to meet and exceed industry standards for our target end markets. Ongoing testing and optimizing of more complicated systems and sub-systems for our existing end markets will assist us in increasing penetration in our current end markets and expanding into targeted end markets. Components of Results of Operations Net Sales Net sales are primarily generated from the sale of our optics and photonics enabled components and sub-components to OEMs. Cost of Goods Sold Cost of goods sold includes the cost of raw materials and other components of our optic and photonic enabled components and sub-components, labor, overhead, utilities, and depreciation and amortization. Gross Profit Gross profit, calculated as net sales less cost of goods sold, may vary between periods and is primarily affected by various factors including average selling prices, product costs, product mix, customer mix and production volumes. Operating Expenses General and Administrative General and administrative costs include personnel-related expenses attributable to our executive, finance, human resources, selling and marketing, and information technology organizations, certain facility costs, office related depreciation, and fees for professional services. Total Other Income (Expense) Other income (expense) consists primarily of interest expense and debt issuance costs. Results of Operations Comparisons for the Three and Nine Months Ended September 30, 2025 and 2024 The following table sets forth our results of operations for the three months ended September 30, 2025 and 2024, respectively. This data should be read together with our financial statements and related notes included elsewhere in this Quarterly Report and is qualified in its entirety by reference to such financial statements and related notes. Three Months Ended September 30, 2025 % Net Sales September 30, 2024 % Net Sales Net Sales $ 6,950,220 100 % $ 7,866,355 100 % Cost of Goods Sold 6,095,861 88 % 6,032,635 77 % Gross Profit 854,359 12 % 1,833,720 23 % General and Administrative Expenses 2,072,962 30 % 1,727,480 22 % (Loss) Income from Operations (1,218,603 ) -18 % 106,240 1 % Other (Expense) Income Interest Expense, Including Amortization of Debt Issuance Costs (214,425 ) -3 % (206,069 ) -3 % Other Income 3,895 0 % 8,575 0 % Total Other (Expense) Income, Net (210,530 ) -3 % (197,494 ) -3 % Loss Before Provision for (Benefit) Income Taxes (1,429,133 ) -21 % (91,254 ) -1 % Provision (Benefit) for Income Taxes - 0 % (77,965 ) -1 % Net Loss $ (1,429,133 ) -21 % $ (13,289 ) 0 % Nine Months Ended September 30, 2025 % Net Sales September 30, 2024 % Net Sales Net Sales $ 20,578,717 100 % $ 21,128,263 100 % Cost of Goods Sold 15,817,774 77 % 16,412,773 78 % Gross Profit 4,760,943 23 % 4,715,490 22 % General and Administrative Expenses 5,597,344 27 % 5,857,806 28 % Loss from Operations (836,401 ) -4 % (1,142,316 ) -5 % Other (Expense) Income Interest Expense, Including Amortization of Debt Issuance Costs (624,290 ) -3 % (533,178 ) -3 % Other Income 20,890 0 % 347,547 2 % Total Other Expense (603,400 ) -3 % (185,631 ) -1 % Loss Before Provision for (Benefit) Income Taxes (1,439,801 ) -7 % (1,327,947 ) -6 % Provision (Benefit) for Income Taxes 9,588 0 % (387,358 ) -2 % Net Loss $ (1,449,389 ) -7 % $ (940,589 ) -4 % 14 Net Sales Net sales decreased by $0.9 million, or 11%, to $7.0 million for the three months ended September 30, 2025, as compared to $7.9 million for the three months ended September 30, 2024. This decrease was primarily due to decreases in consumer markets of $0.6 million, decrease of $0.2 million in the defense market, and $0.1 in the medical market. Net sales decreased by approximately $0.5 million, or 3%, to $20.6 million for the nine months ended September 30, 2025, as compared to $21.1 million for the nine months ended September 30, 2024. This decrease was primarily due to a decrease of $1.7 million in the consumer market, partially offset by increases in the defense market of $0.3 million, an increase in the medical market of $0.7 million, and an increase in the communication market of $0.1 million. Cost of Goods Sold Cost of revenue increased by $0.1 million, to $6.1 million for the three months ended September 30, 2025, as compared to $6.0 million for the three months ended September 30, 2024. This increase was primarily due to an increase of in material costs. For the nine months ended September 30, 2025, the cost of revenue decreased by $0.6 million driven by decreases in manufacturing overhead costs partially offset by an increase in material costs. Gross Profit Gross profit decreased by 54%, to $0.9 million for the three months ended September 30, 2025, as compared to $1.8 million for the three months ended September 30, 2024. This decrease was primarily due to the decrease in revenue and the increase in costs of goods sold. The increase in costs of goods sold was driven by an increase in labor expenses in 2025, and an increase in materials cost, particularly for aluminum. For the nine months ended September 30, 2025, gross profit increased slightly to $4.8 million from $4.7 million, for the nine months ended September 30, 2024. General and Administrative Expenses General and administrative expenses increased by $0.3 million, or 20%, to $2.1 million for the three months ended September 30, 2025, as compared to $1.7 million for the three months ended September 30, 2024. This increase was primarily due to an increase in management fees related to compensation of independent board members and audit fees related to the completion of the 2024 audit. For the nine months ended September 30, 2025, general and administrative expenses of $5.6 million were down $0.3 million from 2024, driven by decreases in outside consulting fees, decreases in research and development expenses, reduction of sales wages, and a reduction in general and administrative bonuses, with the various expense improvements partially offset by increases in management fees to independent board members, higher audit fees related to the completion of the 2024 audit, and an increase in management expense in the manufacturing area. Total Other (Expenses) Income Other (expenses) income remained unchanged at $0.2 million expense for both of the three months ended September 30, 2025 and September 30, 2024. Other expenses for the nine months ended September 30, 2025 of $0.6 million increased by $0.4 million, due to a $0.3 million reduction of other income attributed to the sale of an asset in 2024. Income Tax Expense (Benefit) Income tax expense (benefit) decreased by $0.1 million, to zero for the three months ended September 30, 2025, as compared to ($0.1) million for the three months ended September 30, 2024. For the nine months ended September 30, 2025, income tax provision of $0.0 million compared to an income tax benefit of $0.4 million in 2024. Net Income (Loss) Net loss increased by $1.4 million to $1.4 million for the three months ended September 30, 2025, as compared to a $0.0 million net income for the three months ended September 30, 2024. This increase was primarily due to a decline in sales of $0.9 million, an increase in cost of goods sold of $0.1 million, an increase in general and administrative expenses of $0.3. For the nine months ended September 30, 2025, net loss increased by $0.5 million to $1.4 million as compared to $0.9 million net loss in 2024. The increase was driven by a $0.5 million decrease in sales from $21.1 million to $20.6 million, a decrease in other income of $0.4 million, and change in the tax benefit provision of $0.4 million, with the negative drivers being partially offset by a reduction in cost of goods sold of $0.6 million, as well as a decrease in general and administrative expenses of $.3 million, and other minor changes. Critical Accounting Estimates Our condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these condensed consolidated financial statements requires us to make judgments and estimates that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions or conditions. On a recurring basis, we evaluate our judgments and estimates in light of changes in circumstances, facts, and experience. The effects of material revisions in an estimate, if any, will be reflected in the consolidated financial statements prospectively from the date of the change in the estimate. We believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements. Inventory Valuation We periodically review physical inventory for excess, obsolete, and potentially impaired items and reserves. Any such inventory is written down to net realizable value. The reserve estimate for excess and obsolete inventory is dependent on expected future use and requires management judgement. 15 Income Taxes We account for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities using enacted rates. The effect of a change in tax rates on deferred taxes is recognized in income in the period that includes the enactment date. We recognize the financial statement effect of an uncertain income tax position when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. Recognized income tax positions are measured at the largest amount that is greater than 50% likely to be realized. A valuation allowance is recorded to reduce deferred income tax assets to an amount, which in the opinion of management is more likely than not to be realized. Management judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities, and any valuation allowance recorded against our deferred tax assets. We consider factors such as the cumulative income or loss in recent years; reversal of deferred tax liabilities; projected future taxable income exclusive of temporary differences; the character of the income tax asset, including income tax positions; tax planning strategies and the period over which we expect the deferred tax assets to be recovered in the determination of the valuation allowance. In the event that actual results differ from these estimates, or we adjust our estimates in the future, we may need to adjust our valuation allowance, which could materially impact our financial position and results of operations. Non-GAAP Financial Measures This Quarterly Report includes a non-generally accepted account principles within the United States (“U.S. GAAP”) measure that we use to supplement our results presented in accordance with U.S. GAAP. EBITDA is defined as earnings before interest and other income, tax and depreciation and amortization. Adjusted EBITDA is calculated as EBITDA adjusted for non-recurring items, and business combination expenses. Adjusted EBITDA is a performance measure that we believe is useful to investors and analysts because it illustrates the underlying financial and business trends relating to our core, recurring results of operations and enhances comparability between periods. Adjusted EBITDA is not a recognized measure under U.S. GAAP and is not intended to be a substitute for any U.S. GAAP financial measure and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry. Investors should exercise caution in comparing our non-GAAP measure to any similarly titled measure used by other companies. This non-GAAP measure excludes certain items required by U.S. GAAP and should not be considered as an alternative to information reported in accordance with U.S. GAAP. Adjusted EBITDA We define adjusted EBITDA, a non-GAAP financial measure, as net earnings (loss) before interest and other expenses, net, income tax expense, depreciation and amortization, as adjusted to exclude non-recurring items. We utilize adjusted EBITDA as an internal performance measure in the management of our operations because we believe the exclusion of these non-cash and non-recurring charges allow for a more relevant comparison of our results of operations to other companies in our industry and is in accordance with the Non-GAAP Financial Measures Compliance & Disclosure Interpretations (Reference Question 102.03). The Company has identified several non-recurring items included in our non-GAAP adjusted EBITDA financial measure. These items encompass management fees, professional & transaction fees, technology start-up costs, optical molding evaluation expenses, glass molding evaluation expenses, and executive transition expenses. The table below presents our adjusted EBITDA, reconciled to net income for the three and nine months ended September 30, 2025 and 2024. NON-GAAP RECONCILIATION OF EBITDA FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Net Loss $ (1,429,133 ) $ (13,289 ) $ (1,449,389 ) $ (940,589 ) Depreciation & Amortization 646,508 739,812 2,033,935 2,129,805 Stock-Based Compensation 225,000 - 225,000 - Debt Issuance Costs 2,416 - 7,250 - Interest Expenses 212,618 203,650 622,197 526,372 Taxes - (77,965 ) 9,588 (387,358 ) Non-Recurring Items Executive Transition 329,972 122,374 579,161 122,374 One-time Contract exit costs - - 21,063 - Non-recurring property damage - - 21,261 - Professional & Transaction Fees - - - 174,500 Technology Start-up Costs - 22,275 - 272,067 Optical Molding Evaluation Expenses - 77,386 - 187,734 Glass Molding Evaluation Expenses - 28,240 - 130,196 Adjusted EBITDA $ (12,619 ) $ 1,102,483 $ 2,070,066 $ 2,215,101 16 Liquidity and Capital Resources Liquidity describes the ability of a company to generate sufficient cash flows to meet the cash requirements of its business operations, including working capital needs, debt service, acquisitions, contractual obligations and other commitments. We assess liquidity in terms of our cash flows from operations and their sufficiency to fund our operating and investing activities. As of September 30, 2025, our principal sources of liquidity were cash totaling $0.6 million and a line of credit with $0.7 million available. The Company maintains a credit facility with M&T Bank consisting of a revolving line of credit and term loans under an Amended and Restated Credit Agreement dated November 30, 2024, as amended on March 25, 2025. The facility contains customary financial covenants, including a minimum fixed charge coverage ratio and a maximum total leverage ratio. The line of credit is included in the calculation of these ratios. As of September 30, 2025, the Company was not in compliance with these financial covenants. On November 12, 2025, M&T Bank provided a formal written waiver of the covenant defaults. As a condition of the waiver, the Company agreed to (i) repay certain term and equipment loans aggregating approximately $1.3 million by November 14, 2025; (ii) execute subordination agreements on shareholder loans prohibiting repayment without lender consent;; and (iii) reduce total availability under the revolving credit line from $8.0 million to $7.5 million. To facilitate the required paydowns under the waiver, the Company has obtained approximately $1.5 million of financing from a related party (the Company’s majority stockholder and Chief Executive Officer) in the form of a debt agreement. Following these actions, the Company remains in good standing with M&T Bank and continues to have full access to its $7.5 million revolving credit facility, subject to customary borrowing-base provisions. Management believes that these modifications strengthen the Company’s liquidity position and expects to maintain compliance with all amended covenants through the remainder of 2025. Significant factors affecting the management of our ongoing cash requirements are the adequacy of available bank lines of credit and our ability to attract long-term capital with satisfactory terms. The sources of our liquidity are subject to all of the risks of our business and could be adversely affected by, among other factors, risks associated with events outside of our control, such as economic consequences of global pandemics and geopolitical conflicts, monetary policy changes in the U.S. and other countries and their impact on the global financial markets, supply chain disruptions and electronics and other material shortages, a decrease in demand for our products, our ability to integrate current and future acquisitions, deterioration in certain financial ratios, availability of borrowings under our revolving credit facility, and other market changes in general. See “Risks Relating to Syntec Optics’ Financial Position and Capital Requirements” included in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. Cash Flow — Nine Months Ended September 30, 2025 and 2024 Nine Months Ending September 30 2025 2024 Net Cash Provided By (Used In) Operating Activities $ 676,529 $ (1,566,598 ) Net Cash Used in Investing Activities $ (643,808 ) $ (319,229 ) Net Cash (Used by) Provided By Financing Activities $ (53,584 ) $ 204,366 Operating Activities Net cash provided by operating activities was $0.7 million for the nine months ended September 30, 2025, as compared to net cash used in operating activities of $1.6 million for the nine months ended September 30, 2024. The primary drivers for the year over year change include an increase in the net loss of $0.5 million, the one time gain on sale of asset in 2024 of $0.3 million, a reduction in deferred income tax of $0.5 million, an inventory increase of $1.0 million, a change in year over year accounts receivable of $0.9 million, and an increase in accounts payable of $1.6 million. Investing Activities Net cash used in investing activities was $0.6 million for the nine months ended September 30, 2025, as compared to net cash used in investing activities of $0.3 million for the nine months ended September 30, 2024. The net cash used in investing activities increased primarily due to a one-time disposal of assets in 2024 that did not take place in 2025. Financing Activities Net cash used in financing activities was $0.1 million for the nine months ended September 30, 2025, as compared to net cash provided by financing activities of $0.2 million for the nine months ended September 30, 2024. The primary drivers of this change was a decrease in the debt borrowings in 2025 of $0.6 million, partially offset by a decrease in the debt repayments of $0.3 million. Item 3. Quantitative and Qualitative Disclosures about Market Risk Our primary market risk exposure is interest rate sensitivity. During the nine months ended September 30, 2025, there have been no material changes to the information included under Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. 17 Item 4. Controls and Procedures Evaluation of Disclosure Controls and Procedures As required by Rule 13a-15 under the Exchange Act, we have carried out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Report. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer. Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our Company’s reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Based on the evaluation of our disclosure controls and procedures as of September 30, 2025, our Chief Executive Officer and our Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were not effective due to the following identified material weaknesses: 1. We lack documentation of formal internal control process and controls including lack of review of journal entries. 2. We lack necessary corporate accounting resources to maintain adequate segregation of duties. 3. We lack timely reconciliation controls in the areas of classification of revenue, accounts payable, accrued legal expenses, provision for income taxes, and inventory. 4. We lack controls related to proper cut-off of costs of goods sold and general and administrative expenses. 5. We lack control related to identification and disclosure of related party transactions. 6. We lack control related to proper fair value methodology utilized for valuation of complex financial instrument in connection with contingent earnout arrangement. 7. We lack the necessary information technology (“IT”) general controls infrastructure in the areas of user access and program change-management due to insufficient documentation and training, and inadequate IT risk assessment process. Additionally, we lack controls around the review of SOC-1 reports and lack of cyber security related controls. 8. We lack control related to the evaluation and calculation of finance leases in accordance with Accounting Standards Codification 842-20-25-1a. 9. We lack control related to identification of stock-based compensation agreements and related accounting for and disclosure of such agreements. 10. We lack control related to the evaluation of debt covenants and classification of debt between current and non-current liabilities. Remediation Plans and Status As disclosed in the section titled “Evaluation of Internal Controls and Procedures,” we have identified certain control deficiencies. To address these issues, we have designed and are in the process of implementing the following remediation initiatives, which are aligned with the COSO framework: ● Enhance corporate governance through increased oversight by the Audit Committee, including additional reviews of internal control improvements and financial statements prior to publication (Control Environment; Monitoring Activities). ● Design and implement internal control flowcharts to strengthen segregation of duties (Control Activities; Risk Assessment). ● Increase staffing levels and competencies to enable appropriate separation of duties (Control Environment; Control Activities). ● Implement a formal checklist, review process, and controls over all journal entries and modifications to trial balances (Control Activities; Information & Communication). ● Hire additional experienced accounting and reporting professionals to prepare and approve consolidated financial statements and footnote disclosures in accordance with U.S. GAAP (Control Environment; Control Activities). ● Engage outside professional support to assist with SEC reporting requirements and special circumstances to ensure timely and accurate filings (Control Environment; Information & Communication). ● Establish a formal quarterly attestation process for managers and accounting staff to reinforce and monitor the use of control processes and workflows (Monitoring Activities; Information & Communication). ● Implement a formalized system for tracking control measures to reduce complexity and improve management’s review of control effectiveness (Monitoring Activities; Information & Communication). While the Company has initiated these remediation efforts, not all measures have been fully implemented as of the date of this filing. We will continue to enhance our internal control framework, employ additional procedures, and utilize appropriate tools and resources to ensure that our consolidated financial statements are presented fairly, in all material respects. The Company believes these remediation measures will significantly strengthen its internal control environment and provide the foundation to remediate the identified material weaknesses in future reporting periods. Management’s Report on Internal Control over Financial Reporting This Report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of the Company’s registered public accounting firm due to a transition period established by rules of the SEC for newly public companies. Additionally, our auditors will not be required to formally opine on the effectiveness of our internal control over financial reporting pursuant to Section 404 until we are no longer an “emerging growth company” as defined in the JOBS Act. Changes in Internal Control over Financial Reporting Other than the material weaknesses and remediation efforts mentioned above, there were no changes in our internal controls over financial reporting that occurred during the quarter ended September 30, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 18 PART II - OTHER INFORMATION Item 1. Legal Proceedings We may be subject to legal proceedings, investigations and claims incidental to the conduct of our business from time to time. We are not currently a party to any material litigation or other legal proceedings brought against us. We are also not aware of any legal proceeding, investigation or claim, or other legal exposure that has a more than remote possibility of having a material adverse effect on our business, financial condition or results of operations. Item 1A. Risk Factors The Company’s risk factors are described in Part I, Item 1A, “Risk Factors”, of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024. The risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial position, or future results of operations. The risk factors should be read together with, the risk factors described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds None Item 3. Defaults Upon Senior Securities None Item 4. Mine Safety Disclosures Not Applicable Item 5. Other Information None Item 6. Exhibits The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q. No. Description of Exhibit 31.1* Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2* Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1** Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2** Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101.INS Inline XBRL Instance Document 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) * Filed herewith. ** Furnished. 19 SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SYNTEC OPTICS HOLDINGS, INC Date: November 13, 2025 By: /s/ Al Kapoor Name: Al Kapoor Title: Chairman and Chief Executive Officer (Principal Executive Officer) Date: November 13, 2025 By: /s/ Dean Rudy Name: Dean Rudy Title: Chief Financial Officer (Principal Accounting Officer and Financial Officer) 20