LGL GROUP INC

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of The LGL Group, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of The LGL Group, Inc. and its subsidiaries (the "Company") as of December 31, 2023, the related consolidated statement of operations, stockholders’ equity and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 4 to the financial statements, the Company changed the composition of its segment information in 2023. We have also audited the adjustments necessary to retrospectively apply the change in the 2022 segment information as provided in Note 4 and the resulting adjustments to the Company’s 2022 consolidated statement of operations which are discussed in Note 2 and Note 5. In our opinion, such adjustments are appropriate and have been properly applied. We were not engaged to audit, review, or apply any procedures to the Company’s 2022 financial statements other than with respect to the reclassifications and, accordingly, we do not express an opinion or any other form of assurance on the 2022 financial statements as whole.

Change in Accounting Principle

As discussed in Note 4 to the financial statements, the Company changed the manner in which its chief operating decision maker reviews the business to assess performance and allocate resources, resulting in a change in which the Company presents its operating segments. Also, as a result of the change in segment reporting and related information and, as discussed in Note 2 and Note 5 to the financial statements, the Company elected to change its method of accounting to classify interest income and investment (loss) income within revenue as part of the Company’s ongoing major operations in the consolidated statements of operations.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the 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 financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Investment in LGL Systems Acquisition Holding Company, LLC ("LGL Systems") - Refer to Notes 2 and 7 to the Financial Statements

During June 2023, Lynch Capital International, LLC ("Lynch Capital"), a wholly owned subsidiary of the Company, was appointed as sole managing member of LGL Systems Nevada Management Partners LLC ("LGL Nevada"). Concurrently, Lynch Capital invested $1.0 million into LGL Systems, representing 34.8% of the membership interests in LGL Systems, which is controlled by LGL Nevada.

The Company performed a Variable Interest Entity ("VIE") and a Voting Interest Entity ("VOE") analysis for the entities in the organizational structure of the Lynch Capital transaction and concluded LGL Systems was a VIE. Through its detailed analysis of the various decision-making rights and powers that each party possesses, management concluded the Company was the primary beneficiary of LGL Systems and was therefore required to consolidated LGL Systems.

We identified the consolidation analysis as a critical audit matter because the consolidation analysis, specifically the determination of control, involved an interpretation of especially complex accounting principles generally accepted in the United States of America. The evaluation of management's determination of control required an increased extent of effort.

Our audit procedures related to the accounting treatment of the investment in LGL Systems included, among other things, the following:

/s/PKF O'Connor Davies, LLP

We have served as the Company’s auditor since April 26, 2023.

New York, New York

April 1, 2024

PCAOB ID No.127

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of The LGL Group, Inc.

Opinion on the Financial Statements

We have audited, before the effects of the adjustments to retrospectively apply the changes in the Company's disclosures about segments and related information in Note 4 and the change in accounting principle and related information in Note 2 and Note 5, the accompanying consolidated balance sheet of The LGL Group, Inc. and subsidiaries (the Company) as of December 31, 2022, the related consolidated statements of operations, stockholders' equity and cash flows for the year ended December 31, 2022, and the related notes to the consolidated financial statements (collectively, the financial statements). The 2022 financial statements before the effects of the adjustments described in Note 2 are not presented herein. In our opinion, before the effects of the adjustments to retrospectively apply the changes in the Company's disclosures about segments and related information in Note 4 and the change in accounting principle and related information in Note 2 and Note 5, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of their operations and their cash flows for each of the two years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

We were not engaged to audit, review, or apply any procedures to retrospectively apply the changes in the Company's disclosures about segments and related information in Note 4 and the change in accounting principle and related information in Note 2 and Note 5 and, accordingly we do not express an opinion or any other form of assurance about whether such adjustments are appropriate and have been properly applied. Those adjustments were audited by other auditors.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the 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 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 financial statements. We believe that our audits provide a reasonable basis for our opinion.

Emphasis of Matter

As discussed in Note 3 to the consolidated financial statements, on October 7, 2022, the Company completed the separation of its M-tron Industries, Inc. (“MtronPTI”) business into an independent, publicly traded company. As such, MtronPTI’s business line is presented as discontinued operations to distinguish the financial impact of the disposal transaction from ongoing operations. Our opinion is not modified with respect to this matter.

/s/ RSM US LLP

We served as the Company’s auditor from 2011 to 2023.

Orlando, Florida

April 17, 2023