LIGHTPATH TECHNOLOGIES INC

1. Organization and History

LightPath Technologies, Inc. (“LightPath”, the “Company”, “we”, “us” or “our”) was incorporated in Delaware in1992. It was the successor to LightPath Technologies Limited Partnership formed in1989, and its predecessor, Integrated Solar Technologies Corporation formed in1985. The Company completed its initial public offering during fiscal year1996. On* April 14, 2000,the Company acquired Horizon Photonics, Inc. (“Horizon”). On September 20, 2000,the Company acquired Geltech, Inc. (“Geltech”). In November 2005,we formed LightPath Optical Instrumentation (Shanghai) Co., Ltd (“LPOI”), a wholly-owned subsidiary located in Jiading, People’s Republic of China. 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 in1998* under the Laws of the Republic of Latvia (“ISP Latvia”).

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 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. Visimid’s facility is located in Plano, Texas.

In* February 2025,we acquiredG5* Infrared LLC, a New Hampshire limited liability company (“G5 Infrared”).G5 Infrared is a vertically-integrated manufacturer of infrared camera systems and imaging solutions, specializing in advanced thermal imaging technology and long-range mission-critical detection solutions.G5 Infrared’s existing revenue and future growth pipeline are driven by established multi-year contracts and multiple defense programs of record in shipboard long-range surveillance, border security, and counter unmanned aerial systems (“C-UAS”) systems, as well as recurring federal, naval, and law enforcement programs. Additionally,G5 Infrared is a provider of infrared coatings, including for materials such as LightPath’s BlackDiamond (“BlackDiamond”) glass.G5 Infrared operates from a manufacturing facility in Hudson, New Hampshire. We believe that this acquisition strengthens LightPath’s position as a leader in infrared imaging by expanding the Company’s portfolio to include cooled infrared cameras. Management believes that the combination of LightPath andG5 Infrared creates a more robust, vertically-integrated solutions provider.

In* January 2026,*we acquired the assets of Amorphous Materials, Inc. through our newly-formed, wholly-owned subsidiary, Amorphous Materials LLC (“AML”). AML specializes in infrared glass fabrication, and operates from a manufacturing facility in Garland, Texas. We believe that this acquisition further strengthens LightPath's position as a leader in infrared imaging by expanding our materials portfolio and glass fabrication capabilities.

LightPath is a manufacturer of optical components, assemblies and sub-systems, including precision molded glass aspheric optics, infrared optics, thermal imaging assemblies, cameras and modules, 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, and integrated products such as infrared cameras that leverage those capabilities. LightPath products are incorporated into a variety of applications by customers in many industries, including defense products, border security, perimeter security, 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.

2. Significant Accounting Policies

Consolidated Financial Statements** **include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Management estimates.** **Management makes estimates and assumptions during the preparation of the Company’s Consolidated Financial Statements that affect amounts reported in the Consolidated Financial Statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes available, which, in turn, could impact the amounts reported and disclosed herein.

Cash and cash equivalents consist of cash in the bank and cash equivalents with maturities of90 days or less when purchased. The Company maintains its cash accounts in various institutions, generally with high credit ratings. The Company’s domestic cash accounts are maintained in several financial institutions, and balances* mayexceed Federal insured limits at times. The Company’s foreign cash accounts arenot* insured.

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 net30 days. If the Company’s actual collection experience changes, revisions to its allowance* may*be required. After all attempts to collect a receivable have failed, the receivable is written off against the allowance.

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Inventories*,*** **which consist principally of raw materials, tooling, work-in-process and finished lenses, collimators and assemblies, are stated at the lower of cost or net realizable value, on afirst-in,first-out basis. Inventory costs include materials, labor and manufacturing overhead. Acquisition of goods from our vendors has a purchase burden added to cover customs, shipping and handling costs. Fixed costs related to excess manufacturing capacity are expensed when incurred. The Company looks at the following criteria for parts to consider for the inventory allowance: (i) items that havenot been sold intwo years and (ii) items that havenot been purchased intwo years. These items, as identified, are allowed for at100%, as well as allowing50% for other items deemed to be slow moving within the lasttwelve months and allowing25% for items deemed to have low material usage within the lastsix months. Items of which we have excess supply are also reserved at25% to100%, depending on usage rates. The parts identified are adjusted for recent order and quote activity to determine the final inventory allowance.

Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the related assets ranging fromone toten years. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful lives of the related assets using the straight-line method. Construction in process represents the accumulated costs of assetsnot yet placed in service.

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. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. The Company didnot record any impairment of long-lived assets during the fiscal years ended* June 30, 2026and2025*. Assets to be disposed of would be separately presented in the Consolidated Balance Sheet and reported at the lower of the carrying amount or fair value less costs to sell and wouldno longer be depreciated. 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 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. Purchased intangible assets are carried at cost, less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets, generallytwo tofifteen years. 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. Amortizable intangible assets consist primarily of customer relationships, developed technology and tradenames. When determining the fair value of our intangible assets, estimates and assumptions about future expected revenue and remaining useful lives are used.

Goodwill is tested for impairment on an annual basis, as of each fiscal year end, and during the period between annual tests if events or changes in circumstances indicate that the carrying value of goodwill* maynot* be recoverable. The Company* mayassess goodwill for impairment using either a qualitative or quantitative approach. The qualitative approach consists of a weighting of several qualitative factors, including, butnot* limited to, macroeconomic conditions (including global trade factors), industry and market considerations, the recent and projected financial performance of the reporting unit, changes in the Company's enterprise market value and other relevant factors to determine whether it is more likely thannot that the fair value of the reporting unit is less than its carrying amount, including goodwill. This assessment* mayrequire significant judgments, including the estimation of future cash flows and an assessment of market and industry dependent risks. If the Company determines the qualitative factors indicate that the fair value of the reporting unit is greater than its carrying amount, a quantitative goodwill impairment test isnot* necessary. If the Company determines that it is more likely thannot that the fair value of the reporting unit is less than its carrying amount, then the quantitative goodwill impairment test is performed. Impairment loss is recorded to the extent that the carrying value of the reporting unit exceeds its assessed fair value,not to exceed the carrying value of the goodwill of the reporting unit. The Company reviews its amortizable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset* maynot* be recoverable. When evaluating amortizable intangible assets for potential impairment, the Companyfirst determines if there are any indicators of impairment and if the carrying amount of the amortizable intangible assets mightnot be recoverable. If there are indicators of impairment, then the Company performs a recoverability test by comparing the carrying value of the assets to the estimated future undiscounted cash flows. If the estimated undiscounted cash flows are less than the carrying value of the assets, the Company calculates an impairment loss. The impairment loss calculation compares the carrying value of its assets to the assets’ estimated fair value. The Company didnot record any impairment of goodwill or amortizable intangible assets during the fiscal years ended* June 30, 2026* or2025.

Leases. The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities and operating lease liabilities on the Company’s Consolidated Balance Sheet. Finance leases are included in property, plant and equipment, current portion of long-term debt and long-term debt, net of current portion on the Consolidated Balance Sheets.

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Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases donot provide an implicit rate, the Company uses an estimate of its incremental borrowing rate based on observed market data and other information available at the lease commencement date. The operating lease ROU assets also include any lease payments made and exclude lease incentives. Lease terms* mayinclude options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. The Company doesnot* record leases on the Consolidated Balance Sheet with an initial term ofone year or less. The Company doesnot separate lease and non-lease components but rather accounts for each separate component as a single lease component for all underlying classes of assets. Variable lease payments are expensed as incurred and arenot included within the operating lease ROU asset and lease liability calculation. Variable lease payments primarily include reimbursements of costs incurred by lessors for common area maintenance and utilities. Lease expense for minimum operating lease payments is recognized on a straight-line basis over the lease term.

Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are computed on the basis of differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based upon enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances have been established to reduce deferred tax assets to the amount expected to be realized.

The Company hasnot recognized a liability for uncertain tax positions. A reconciliation of the beginning and ending amount of unrecognized tax benefits or penalties hasnot been provided since there has beenno unrecognized benefit or penalty. If there were an unrecognized tax benefit or penalty, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.

The Company files United States (“U.S.”) Federal income tax returns, as well as tax returns in various states and foreign jurisdictions. Open tax years subject to examination by the Internal Revenue Service (“IRS”) generally remain open forthree years from the filing date. Tax years subject to examination by the state jurisdictions generally remain open for up tofour years from the filing date. In Latvia, tax years subject to examination remain open for up tofive years from the filing date and, in China, tax years subject to examination remain open for up toten years from the filing date.

Our cash and cash equivalents totaled approximately $93.2 million at* June 30, 2026*. Of this amount, approximately 4% 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. Historically, we considered unremitted earnings held by our foreign subsidiaries to be permanently reinvested. However, during fiscal2020, we began declaring intercompany dividends to remit a portion of the earnings of our foreign subsidiaries to the U.S. parent company. We 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.

With respect to the funds generated by our foreign subsidiaries in China, the retained earnings of the legal entity must equal at least50% of the registered capital before any funds can be repatriated. During fiscal years2026 and2025, we repatriated approximately $0.2 million and $1.2 million, respectively, from LPOIZ. As of* June 30, 2026*, LPOIZ had approximately $0.7 million in retained earnings available for repatriation, based on earnings accumulated through* December 31, 2025,the end of the most recent statutory tax year, that remained undistributed as of June 30, 2026*. LPOI didnot have any earnings available for repatriation as of the date of merger with LPOIZ.

Beginning in fiscal year2019, earnings from the Company’s non-U.S. subsidiaries were subject to the global intangible low-taxed income (“GILTI”) inclusion pursuant to U.S. income tax rules. See Note9, Income Taxes, to these Consolidated Financial Statements for additional information.

Revenue recognition – See Note4, Revenue, to these Consolidated Financial Statements for additional information.

**Cost of goods sold **consists primarily of raw materials and purchased components, direct manufacturing labor, and allocated manufacturing overhead. Manufacturing overhead includes production-related personnel costs, facility and equipment costs, depreciation, quality assurance, procurement, production control, and manufacturing engineering costs. Cost of goods sold also includes provisions for excess and obsolete inventory and inventory valuation adjustments are expensed as incurred.

VAT** is computed on the gross sales price on all sales of the Company’s products sold in the People’s Republic of China and Latvia. The VAT rates range up to 21%, depending on the type of products sold. The VAT maybe offset by VAT paid by the Company on raw materials and other materials included in the cost of producing or acquiring its finished products. The Company recorded VAT receivables and payables on a net basis in the accompanying Consolidated Financial Statements. These amounts werenot significant as of June 30, 2026and2025.

New product development costs are expensed as incurred.

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Stock-based compensation is measured at grant date, based on the fair value of the award, and is recognized as an expense over the employee’s requisite service period. We estimate the fair value of each restricted stock unit or stock option as of the date of grant using the Black-Scholes-Merton pricing model. Our directors, officers, and key employees were granted stock-based compensation through our Amended and Restated Omnibus Incentive Plan, as amended (the “Omnibus Plan”), through* October 2018and after that date, the2018* Stock and Incentive Compensation Plan (the “SICP”). Most options granted under the Omnibus Plan and the SICP vest ratably overtwo tofour years and generally haveten-year contract lives. The volatility rate is based on historical trends in common stock closing prices and the expected term was determined based primarily on historical experience of previously outstanding awards. The interest rate used is the U.S. Treasury interest rate for constant maturities. The likelihood of meeting targets for option grants that are performance based are evaluated each quarter. If it is determined that meeting the targets is probable, then the compensation expense will be amortized over the remaining vesting period.

Fair value of financial instruments. The Company accounts for financial instruments in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification Topic820, “Fair Value Measurements and Disclosures” (“ASC820”), which provides a framework for measuring fair value and expands required disclosure about fair value measurements of assets and liabilities. ASC820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describesthree levels of inputs that* may*be used to measure fair value:

Level1 - Quoted prices in active markets for identical assets or liabilities.

Level2 - Inputs other than quoted prices included within Level1 that are either directly or indirectly observable.

Level3 - Unobservable inputs that are supported by little orno market activity, therefore requiring an entity to develop its own assumptions about the inputs that market participants would use in pricing.

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

The respective carrying value of accounts receivable, accounts payable and accrued liabilities recorded on the Consolidated Balance Sheets approximated their fair values. Fair values were assumed to approximate carrying values for these financial instruments since they are short term in nature and they are receivable or payable on demand.

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

The Company valued certain financial instruments issued in connection with the acquisition ofG5 Infrared using Level3 fair value measurements, including warrants, Series G Convertible Preferred stock and the Acquisition Notes (as defined below). See Note8, Stockholders’* Equity*, to these Consolidated Financial Statements for additional information regarding the valuation of the acquisition financing.

In connection with the acquisitions ofG5 Infrared and AML, the Company also valued the earnout liabilities and the intangible assets acquired using Level3 fair value methods. See Note3, Acquisitions, to these Consolidated Financial Statements for additional information.

Other than as disclosed above, the Company doesnot have any other financial or non-financial assets or liabilities that would be characterized as Level1, Level2 or Level3 instruments.

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 (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 (loss) hastwo 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.

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Business segments. The Company operates principally inone reportable business segment. See Note17, Segment Reporting, to these Consolidated Financial Statements for additional information.

Recent accounting pronouncements

In* November 2024,the FASB issued ASU2024*-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic220-40): Disaggregation of Income Statement Expenses (“ASU2024-03”) which requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses included in each expense caption on the face of the income statement at interim and annual reporting periods. ASU2024-03 is effective for annual reporting periods beginning after* December 15, 2026,and interim reporting periods beginning after December 15, 2027,and should be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements. We are evaluating the impact of ASU2024*-03 and expect the standard will only impact our disclosures withno material impact on our operating results, financial position, or cash flows.

There areno other new accounting pronouncements issued by the FASB that arenot yet effective for the Company for the year ended* June 30, 2026* that are expected to have a material impact on the Consolidated Financial Statements.

Recently Adopted Accounting Pronouncements

In* December 2023,the FASB issued ASU2023*-09, Income Taxes (Topic740): Improvements to Income Tax Disclosures (“ASU2023-09”) which requires disaggregated income tax disclosures on an annual basis, including information on our effective income tax rate reconciliation and income taxes paid. The Company adopted ASU2023-09 effective* July 1, 2025,and applied the guidance on a prospective basis. The adoption of ASU2023*-09 didnot have a material impact on the Company’s consolidated financial statements, but resulted in expanded income tax disclosures.

3. Acquisitions

On* January 20, 2026,the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”), by and among the Company, AML, a Delaware limited liability company and wholly-owned subsidiary of the Company (“Buyer”), Amorphous Materials, Inc., a Texas corporation (“Seller”) and other parties thereto, pursuant to which, subject to the terms and conditions set forth in the Asset Purchase Agreement, Buyer agreed to acquire substantially all of the assets (collectively, the “Assets”) and assume and acquire certain of the rights and liabilities of Seller (collectively, the “Liabilities” and such acquisition of Assets and assumption of the Liabilities together, the “Transaction”) relating to Seller’s business of compounding and melting a broad range of Chalcogenide glasses forthird*-party manufacturers. The Transaction closed on* January 21, 2026 (*the “AML Acquisition Date”).

Aggregate consideration payable by the Company to Seller under the Asset Purchase Agreement in connection with the Transaction willnot exceed $10.0 million and consists of (i) a cash payment of $7.0 million that was paid at closing (the “Cash Consideration”) and (ii) contingent consideration that willnot exceed $3.0 million (the “Contingent Consideration”). The Contingent Consideration, if earned, is payable in shares of the Company's Class A common stock, $0.01 par value, ("Common Stock"), to be issued in up tosix tranches of $500,000 each divided by the LPTH Stock Price (as calculated pursuant to the Asset Purchase Agreement) upon the achievement of certain milestones set forth in the Asset Purchase Agreement (each, a "Contingent Consideration Payment").

We accounted for the acquisition of AML using the acquisition method of accounting, which required us to measure identifiable assets acquired and liabilities assumed in the acquiree at their fair values as of the AML Acquisition Date, with the excess of the consideration transferred over those fair values recorded as goodwill.

As of* January 20, 2026,Seller satisfied thefirst* milestone contemplated by the Contingent Consideration Payments and received an aggregate of 39,897 shares of Class A Common Stock (or approximately $544,000 at fair value, determined by multiplying the number of shares issued by the fair value of the Class A Common Stock on the AML Acquisition Date). The remaining estimated potential earnout was accrued based on athird-party valuation and was recorded in Accrued liabilities based on its fair value as of the AML Acquisition Date. On* March 10, 2026and June 4, 2026following the achievement of additional milestones, an additional 43,621 and 30,838 shares of Class A Common Stock were issued, respectively, (or approximately $483,000 and $543,000 at fair value as of the issuance dates, respectively). Fair value adjustments of $0.7 million for the year June 30, 2026are included in “Change in fair value of acquisition liabilities” in the accompanying Consolidated Statement of Comprehensive Income (Loss). The remaining potential earnout is estimated at $1.4 million and is included in Accrued liabilities in the accompanying Consolidated Balance Sheet as of June 30, 2026.*

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As of the AML Acquisition Date, the preliminary fair value of the aggregate consideration was approximately $9.2 million which consisted of (i) the Cash Consideration, (ii)39,897 shares of Class A Common Stock (or approximately $544,000 at fair value, determined by multiplying the number of shares issued by $13.64 per share, which was the closing price on the AML Acquisition Date), and (iii) potential earnout consideration subject to achievement offive additional technical milestones, as defined in the Asset Purchase Agreement. As of the AML Acquisition Date, the fair value of consideration transferred consisted of the following:

We determined the fair value of assets acquired and liabilities assumed by using available market information and various valuation methods that require judgement related to estimates. Our preliminary fair value estimates and assumptions to measure the assets acquired and liabilities assumed were subject to change as we obtained additional information during the measurement period. We completed our accounting for the acquisition during the fiscal quarter ended* June 30, 2026.*The following table summarizes the allocation of the fair value of consideration transferred to assets acquired and liabilities assumed as of the AML Acquisition Date and the adjustments recognized during the measurement period:

Measurement period adjustments include fair value adjustments during the fiscal quarter ended* June 30, 2026,*related to accrued liabilities for employee benefits. The net impact of the aforementioned adjustments were offset by a net working capital adjustment, resulting onno change to goodwill.

Intangible assets – All intangible assets acquired in the acquisition of AML are subject to amortization. The fair value of identifiable intangible assets acquired as of the AML Acquisition Date is as follows:

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Goodwill– The $5.6 million of goodwill recognized is attributable to AML’s assembled workforce and expected synergies related to the expansion of our infrared glass portfolio and manufacturing capabilities. The acquired goodwill is expected to be deductible for Federal income tax purposes. See Note7, Goodwill and Intangible Assets, in these Notes to the accompanying Consolidated Financial Statements for further information.

The Company’s Consolidated Financial Statements reflect the financial results of AML beginning on the AML Acquisition Date. Revenue generated by AML from the AML Acquisition date through* June 30, 2026*is approximately $2.2 million and is included in our infrared components product group, with a net loss of $0.2 million, including amortization of intangible assets.

For the year ended* June 30, 2026,*we incurred approximately $0.3 million in acquisition costs which are included in the accompanying Consolidated Statements of Comprehensive Income in the line item entitled “Selling, general and administrative.”

Unaudited consolidated pro forma information is provided below, in combination with the acquisition ofG5 Infrared.

G5 Infrared

On* February 18, 2025 (the“G5* Acquisition Date”), the Company acquiredG5 Infrared pursuant to a Membership Interest Purchase Agreement (the*“G5* MIPA”) by and among the Company,G5 Infrared, theG5 Infrared members through the purchase from the members thereof of all of the issued and outstanding membership interests ofG5 Infrared (collectively, the “Sellers”), and Kenneth R. Greenslade, solely in his capacity as Sellers’ Representative.

G5 Infrared is a vertically-integrated manufacturer of infrared camera systems and imaging solutions, and also provides infrared coatings.G5 Infrared operates from a manufacturing facility in Hudson, New Hampshire. The Company acquiredG5 Infrared to expand the Company’s portfolio to include cooled infrared cameras.

Net assets and results of operations ofG5 Infrared are reflected in our financial results commencing on theG5 Acquisition Date. Revenue generated byG5 Infrared is included in our infrared and assemblies and modules product groups.

We accounted for the acquisition ofG5 Infrared using the acquisition method of accounting, which required us to measure identifiable assets acquired and liabilities assumed in the acquiree at their fair values as of theG5 Acquisition Date, with the excess of the consideration transferred over those fair values recorded as goodwill.

The fair value of the aggregate consideration was approximately $27.1 million which consisted of (i) $20.3 million in cash, (ii)1,972,501 shares of the Company’s Class A Common Stock and (iii) potential earnout consideration paid annually in fiscal years2026 and2027 subject to achievement of certain revenue and EBITDA targets set forth in theG5 MIPA. As of theG5 Acquisition Date, the preliminary estimate of fair value of consideration transferred consisted of the following:

The fair value of the equity portion of the consideration was determined by multiplying the number of shares issued,1,972,501, by the fair value of the Class A Common Stock on theG5 Acquisition Date, which was $2.47. The initial cash consideration at closing was subject to a net working capital adjustment, which was settled in* June 2025.TheG5* MIPA also included a provision for a clawback amount ifG5 Infrared’s actual revenue for the2024 calendar year was less than $17.3 million. This clawback amount was settled in* June 2025*and is reflected in the determination of the purchase price.

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Earnout payments of an aggregate of up to $23.0 million of additional consideration* maybe paid annually in fiscal years2026* and2027 subject to achievement of certain minimum EBITDA and revenue targets for theone andtwo-year periods beginning on thefirst full calendar month commencing after theG5 Acquisition Date, as set forth in theG5 MIPA. If the targets are achieved during the respective periods, LightPath will (i) issue an aggregate number of shares of Class A Common Stock equal to 30% of the earnout payment divided by the average close price for theten trading days immediately prior to thefirst anniversary of the earnout commencement date, as defined in theG5 MIPA, and (ii) pay additional cash consideration in an amount equal to 70% of the earnout payment, in each case to the formerG5 Infrared members. The earnout is considered contingent consideration and is accounted for as a liability initially measured at fair value, with changes during each reporting period recognized in earnings. The portion of the earnout that will be settled in stock will also be accounted for as a liability since the achievement of targets adjusts the number of shares to be issued at settlement based on a variable other than the Company’s Class A Common Stock, and therefore it doesnot meet the criteria in ASC480, Distinguishing Liabilities from Equity. The fair value of the earnout in the accompanying Consolidated Balance Sheet is calculated using a Monte Carlo valuation method, which involves assumptions of revenue and EBITDA forecasts, discount rates and revenue volatility. The earnout liability is subject to fair value measurement each reporting period.

During the year ended* June 30, 2026,thefirst* earnout period ended and based on the targets achieved, thefirst earnout payment was made to theG5 Sellers for $7.3 million in cash and $3.2 million in shares of Class A Common Stock (297,445 shares, or $3.6 million at fair value as of the issuance date). On* April 16, 2026,we executed a side letter agreement with theG5* Sellers which set the yeartwo earnout payment amount and accelerated the payment timeline. Pursuant to the agreement, the earnout amount will be $9 million, comprised of $6.3 million in cash and $2.7 million in shares of Class A Common Stock, to be paid after* January 1, 2027and on or before January 15, 2027.As of June 30, 2026*, the earnout liability was adjusted to $9.0 million. Fair value adjustments of $15.0 million and $1.4 million for the years ended* June 30, 2026and2025* are included in “Change in fair value of acquisition liabilities” in the accompanying Consolidated Statement of Comprehensive Income (Loss).

We determined the fair value of assets acquired and liabilities assumed by using available market information and various valuation methods that require judgement related to estimates. Our preliminary fair value estimates and assumptions to measure the assets acquired and liabilities assumed were subject to change as we obtained additional information during the measurement period. We completed our accounting for the acquisition during the fiscal quarter ended* June 30, 2025.The following table summarizes the allocation of the fair value of consideration transferred to assets acquired and liabilities assumed as of theG5* Acquisition Date and the adjustments recognized during the measurement period:

Measurement period adjustments include fair value adjustments during the fiscal quarter ended* June 30, 2025,*primarily related to refined assumptions in the valuation of the earnout consideration, and intangible assets such as backlog, customer relationships and developed technology intangible assets. Deferred tax liabilities were adjusted for the revised intangible asset values, and for the refined tax rate apportionment calculation. The net impact of the aforementioned adjustments resulted in an increase to goodwill.

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Intangible assets–All intangible assets acquired in the acquisition ofG5 Infrared are subject to amortization. The fair value of identifiable intangible assets acquired as of theG5 Acquisition Date is as follows:

The fair value of intangible assets is estimated using the multi-period excess earnings approach for acquired customer relationships and the relief from royalty method for the acquired trade names and developed technology. All of these level3 fair value methods are income-based valuation approaches, which require judgment to estimate appropriate discount rates, revenue forecasts, useful lives, royalty rates related to the tradenames and developed technology intangible assets, and profitability assumptions related to customer relationships. The acquired intangible assets arenot expected to be deductible for New Hampshire state income tax purposes, which resulted in a deferred tax liability of $1.1 million.

Goodwill– The $7.0 million of goodwill recognized is attributable toG5 Infrared’s market presence, the assembled workforce and established operating infrastructure. The acquired goodwill is expected to be deductible for Federal income tax purposes. See Note7, Goodwill and Intangible Assets, in these Notes to these Consolidated Financial Statements for further information.

Acquisition costs have been expensed as incurred. In connection with the acquisition ofG5 Infrared, we recorded acquisition costs of $1.1 million for the year ended* June 30, 2025,*which were included in the “Selling, general and administrative expenses” line item in our Consolidated Statements of Operations.

Unaudited supplemental pro forma information

The following table presents unaudited pro forma financial results of the operations acquired withG5 Infrared and AML. The pro forma results include adjustments to remove costs directly attributable to the acquisition, such as transaction-related costs and the loss on extinguishment of debt (as described in Note14, Loans Payable, to these Consolidated Financial Statements). The pro forma results were prepared as if the acquisition ofG5 Infrared was completed on thefirst day of our fiscal2024, * July 1, 2023,and as if the acquisition of AML was completed on thefirst* day of our fiscal year2025, * July 1, 2024.The pro forma results donot* include any integration synergies and arenot necessarily indicative of our results of operations that actually would have been obtained had the acquisition ofG5 Infrared been completed for the period presented, or which* may*be realized in the future.

F-16

Vismid Technologies

In* July 2023,the Company acquired Visimid. The purchase price included certain installment payments of restricted stock, of which 112,323 and 382,253 shares were issued during the years ended June 30, 2026and2025,* respectively, and an earnout which is contingent upon the award and completion of a specific customer contract. The balance of the estimated potential earnout isnot material and is included in Accrued liabilities in the accompanying Consolidated Balance Sheet as of* June 30, 2026*. Certain of the acquisition liabilities are subject to fair value adjustments, for which $0.1 million of expense was recorded during the fiscal year ended* June 30, 2025,*and is included in the “Change in fair value of acquisition liabilities” in the accompanying Consolidated Statement of Comprehensive Income (Loss).

4. Revenue

Product Revenue

The Company manufactures infrared imaging cameras, optical assemblies, optical components and infrared materials. Optical components include precision molded glass aspheric optics, molded and diamond-turned infrared aspheric lenses, and other optical elements produced using other fabrication techniques. The Company designs, develops, manufactures, and distributes optical systems, assemblies and components utilizing advanced optical manufacturing processes, multidisciplinary engineering and manufacturing technologies, and assembly and integration services. The Company also provides engineering services and performs research and development for optical solutions for a wide range of optics markets.

Revenue Recognition

Revenue is generally recognized upon transfer of control, including the risks and rewards of ownership, of products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company generally bears all costs, risk of loss, or damage and retains title to the goods up to the point of transfer of control of products to customers. Shipping and handling costs are included in the cost of goods sold. Revenue is presented net of sales taxes and any similar assessments.

F-17

Customary payment terms are granted to customers, based on credit evaluations. The Company doesnot have any contracts where revenue is recognized, but the customer payment is contingent on a future event. Deferred revenue is recorded when cash payments are received or due in advance of the Company’s performance. Deferred revenue was $1.1 million and $0.5 million as of* June 30, 2026and2025*, respectively, and is included in accrued liabilities in the accompanying Consolidated Balance Sheets.

Nature of Products

Revenue from the sale of optical components, assemblies and modules is recognized upon transfer of control, including the risks and rewards of ownership, to the customer. The performance obligations for the sale of optical components and assemblies are satisfied at a point in time. 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 hasone longer-term order with a defense customer which includes both product development and hardware deliverables where similar revenue recognition criteria are applied.

We categorize our products intofour product groups: (i) infrared components, (ii) visible components, (iii) assemblies and modules, and (iv) engineering services.

Revenue by product group for the fiscal years ended* June 30, 2026and2025* was as follows, with certain fiscal year2025 amounts reclassified from infrared components to assemblies and modules to conform to current classification:

5. Inventories, net

The components of inventories include the following:

During fiscal years2026 and2025, the Company evaluated all allowed items and disposed of approximately $0.4 million and $0.1 million, respectively, of inventory parts and wrote them off against the allowance for obsolescence.

The value of tooling in raw materials, net of the related allowance for obsolescence, was approximately $0.8 million and $1.1 million at* June 30, 2026and2025*, respectively.

F-18

6. Property and Equipment, net

Property and equipment consist of the following:

Depreciation and amortization expense related to property and equipment was $3.2 million and $2.7 million for the fiscal years ended* June 30, 2026and2025*, respectively.

7. Goodwill and Intangible Assets

In connection with various acquisitions, the Company identified intangible assets, which were recorded at fair value and are being amortized on a straight-line basis over their useful lives. 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 the respective companies. See Note3, Acquisitions, to these consolidated financial statements, for more information.

Changes in the carrying amount of goodwill were as follows:

We assess goodwill for impairment annually during thefourth quarter or under certain circumstances more frequently, such as when events or circumstances indicate there* maybe impairment. The Company performed a qualitative assessment during itsfourth* quarter in2026 and determined it wasnot more likely thannot that goodwill was impaired. The Company didnot record any impairment of goodwill or amortizable intangible assets during the fiscal years ended* June 30, 2026or2025.*

Intangible assets were comprised of the following:

F-19

Future amortization of identifiable intangible assets is as follows:

8. Stockholders’** Equity**

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 Class A 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:

Of the 100,000,000 shares of common stock authorized, the Board of Directors has previously designated 94,500,000 shares authorized as Class A Common Stock. The stockholders of Class A Common Stock are entitled toone vote for each share held. The remaining 5,500,000 shares of authorized common stock were designated as Class E-1 common stock, Class E-2 common stock, or Class E-3 common stock, all previously outstanding shares of which have been previously redeemed or converted into shares of Class A Common Stock.

Acquisition Financing

In conjunction with the financing of the acquisition ofG5 Infrared, the Company designated a new series of preferred stock, Series G Convertible Preferred Stock, which is convertible into shares of Class A Common Stock. Concurrent with the entry into theG5 MIPA on* February 13, 2025,we entered into (i) a Securities Purchase Agreement (the “Securities Purchase Agreement”) by and among the Company and North Run Capital, AIGH Investment Partners, LP, WVP Emerging Manager Offshore Fund LLC, the Lytton-Kambara Foundation and Alice W. Lytton Family LLC (collectively, the “Series G Purchasers”), (ii) a Class A Common Securities Purchase Agreement (the “Class A SPA”) by and between the Company and Lytton-Kambara Foundation (the “Class A Purchaser”), and (iii) andtwo* senior secured promissory notes in an aggregate principal amount of $5.2 million (the “Acquisition Notes”) for total proceeds of approximately $32.2 million, inclusive of the conversion of the bridge promissory note (the “Bridge Note”) (see Note14, Loans Payable), and before deducting offering expenses of $2.2 million incurred by the Company, which was used to fund, in part, the cash consideration payable in connection with the acquisition ofG5 Infrared. Pursuant to the Securities Purchase Agreement, the Series G Purchasers purchased from the Company (i) an aggregate of approximately 24,956 shares of Series G Convertible Preferred Stock, (ii) warrants to purchase an aggregate of 4,352,774 shares of Class A Common Stock, with an exercise price of $2.58 per share (the “Series G Purchasers Warrants”), and (iii) the Acquisition Notes, which are convertible into shares of Series G Convertible Preferred Stock limited to failure to achieve a certain EBITDA threshold (see Note14, Loans Payable). The Securities Purchase Agreement closed on* February 18, 2025.*

F-20

At the closing of the Securities Purchase Agreement, the Company and the Series G Purchasers entered into a registration rights agreement, pursuant to which the Company agreed to register the shares of Class A Common Stock issuable upon the conversion of the Series G Convertible Preferred Stock (including those shares of Series G Convertible Preferred Stock that are issuable upon the conversion of the Acquisition Notes) and the Series G Purchasers Warrants (collectively, the “Registrable Securities”) under the Securities Act of1933, as amended. The Company filed a registration statement covering the resale of such Registrable Securities on* May 2, 2025,which became effective on May 12, 2025.*

On* June 16, 2025,the Company’s stockholders approved a proposal authorizing the issuance of shares of Class A Common Stock upon the conversion of the Series G Convertible Preferred Stock or the Series G Purchasers Warrants to the extent such issuances would result in an aggregate number of shares of Class A Common Stock exceeding 19.99% of the total shares of Class A Common Stock issued and outstanding as of theG5* Acquisition Date, in accordance with the rules and regulations of the Nasdaq Stock Market, LLC.

On* February 13, 2025,the Company also entered into the Class A SPA with the Class A Purchaser, pursuant to which the Class A Purchaser purchased from the Company: (i)455,192 shares of Class A Common Stock at a purchase price of approximately $2.15 per share, and warrants to purchase 37.5% of the number of shares, or 170,697 shares of Class A Common Stock, with an exercise price of $2.58 per share (the “Class A Purchaser's Warrants”); and (ii)232,258 shares of Class A Common Stock at a purchase price of approximately $2.15 per share. The Class A Purchaser and its affiliate, Alice W. Lytton Family LLC, (collectively, the “Lytton Buyers”) were also among the Series G Purchasers in the Securities Purchase Agreement, and the Class A Purchaser was also the Lender of our Bridge Promissory Note (see Note14,* Loans Payable). In connection with the closing of Securities Purchase Agreement and the Class A SPA, the Company received $1.5 million in cash from the Lytton Buyers, and the remaining consideration was exchanged for the outstanding principal and accrued interest of the Bridge Note as of* February 18, 2025 (see Note14,* Loans Payable). The Class A SPA closed on* February 18, 2025.*

The aggregate gross proceeds of $32.2 million were allocatedfirst to the instruments issued in exchange for the Bridge Promissory Note outstanding, at fair value, as the instruments were issued in exchange for the Bridge Promissory Note outstanding, which was accounted for as an extinguishment as further detailed in Note14, Loans Payable. Those instruments included Class A Common Stock, Class A Purchaser’s Warrants, Series G Purchaser Warrants, Series G Convertible Preferred Stock, and the Acquisition Note issued to the Lytton Buyers*.*The remaining proceeds were allocated to the remaining instruments as follows: (i) to the remaining Series G Purchasers Warrants at fair value as the Purchasers Warrants were initially recorded as liabilities, and (ii) the remaining proceeds, to the remaining Series G Convertible Preferred Stock, and Acquisition Notes issued on a relative fair value basis, by investor.

Warrants – The Company issued 4,352,774 Series G Purchasers Warrants in connection with the Securities Purchase Agreement and 170,697 Class A Purchaser’s Warrants in connection with the Class A SPA (collectively, the “Warrants”). The exercise price of the Warrants is $2.58 (the “Exercise Price”). The Exercise Price and the number of underlying shares of Class A Common Stock is subject to proportional adjustment in the event of customary stock splits, stock dividends, combinations or similar events. The Warrants became exercisable upon the issuance date and will expire on thesix-year anniversary of issuance. A holder* may**not* exercise any portion of the Warrants, to the extent that after giving effect to such issuance exercise, either (i) the holder (together with the holder’s affiliates and any other persons acting as a group together with the holder or any of the holder’s affiliates would beneficially own in excess of 19.99%, or, if elected be such holder, a lesser percentage of the number of shares of the Class A Common Stock outstanding immediately after giving effect to the issuance of shares of Class A Common Stock issuable upon exercise of the Warrant, or (ii) the aggregate number of shares of Class A Common Stock issued upon exercise of the Warrant, the exercise of any other Warrants issued pursuant to the Securities Purchase Agreement, and upon conversion of Series G Convertible Preferred Stock, exceeds 6,055,606 shares, as adjusted to reflect any share splits, reverse share splits or similar recapitalizations that occur after the issuance date (the “Exchange Cap”).

The Series G Purchasers Warrants were initiallynot indexed to the Company’s own stock due to the Exchange Cap, as shareholder approval isnot an input for determining the fair value of a fixed-for-fixed option on the Class A Common Stock. As such, the Series G Purchasers Warrants were initially classified as liabilities on the Consolidated Balance Sheets, with subsequent changes in the fair value of the warrant recorded in the change in fair value of warrant liability in other income (expense) in the Consolidated Statements of Comprehensive Income (Loss). On* June 16, 2025,*the Purchasers Warrants were reclassified from liabilities to equity as a result of the action taken at a special meeting of the stockholders, which removed the Exchange Cap. The Class A Purchaser’s Warrants are indexed to the Company's own stock, and meet the criteria for equity classification. The Warrants are valued using the Black-Scholes-Merton pricing model, which includes assumptions of expected volatility.

During the year ended* June 30, 2026,all Series G Purchasers Warrants and Class A Purchaser's Warrants were exercised, by means of "cashless exercise" as defined in the respective warrant agreements. As of June 30, 2026,*no warrants were outstanding.

Series G Convertible Preferred Stock – Based on an analysis of the Series G Convertible Preferred Stock, it was concluded that they are more akin to an equity-type instrument. Economic characteristics and risks of an equity-linked conversion option are clearly and closely related to an equity-type host; thus, the conversion option embedded in the Series G Convertible Preferred Stock donot require bifurcation or liability classification under ASC815, Derivatives and Hedging. It also doesnot meet the definition of being mandatorily redeemable under ASC480-10-20 because it doesnot embody an unconditional obligation to redeem the instrument. The Series G Convertible Preferred Stock is redeemable at the option of the holder after the5 year Guaranteed Term, thus, it should be classified as mezzanine equity, outside of permanent equity. The Series G Convertible Preferred Stock was valued using a Binomial Lattice Model which considers the ability of the Investor to convert the instrument into common stock at any time, and for the Company's call option and the Investor's put option which are available after5 years. The model incorporates transaction details such as stock price, contractual conversion price, dividend yield, discount rates, expected volatility, market credit spread, estimated yield and investor exercise behavior. The Series G Convertible Preferred Stock bears dividends at a per annum rate of 6.5%. The Company elected to recognize any redemption value changes immediately as they occur and adjust the carrying amount to equal the redemption value at each reporting period.

During the year ended* June 30, 2026,certain holders of Series G Convertible Preferred Stock elected "optional conversion," as defined in the certificate of designations. A total of 18,464 shares of Series G Convertible Preferred Stock, which have a stated value of $1,000 per share, were converted into 8,692,097 shares of Class A Common Stock at a conversion price of $2.15 per share. As a result of the conversion, we reclassified $25.3 million from temporary equity to common stock and additional paid-in capital. Following the conversions,6,492 shares of Series G Convertible Preferred Stock remained issued and outstanding as of June 30, 2026.*

F-21

Promissory Notes – The Acquisition Notes are convertible into shares of Series G Convertible Preferred Stock limited to failure to achieve a certain EBITDA threshold, and were recorded at fair value based on several probability weighted Binomial Lattice Models which considered the following outcomes: (i) the Company's EBITDA for the year ended* December 31, 2025would be less than approximately $4.9 million the (the “EBITDA target”) which would cause automatic conversion of the Notes into shares of Series G Convertible Preferred Stock at a price of $1,000 per share; (ii) the Company would choose to redeem the Acquisition Notes at a premium of 102% prior to thetwo* year maturity date, or (iii) the Acquisition Notes would be repaid at maturity. The models incorporate transaction details such as stock price, contractual conversion price, dividend yield, discount rate, expected volatility, estimated yield, and the probability the Company will meet the EBITDA target. The Acquisition Notes were redeemed by the Company on* December 31, 2025.Refer to Note14,* Loans Payable, for further information regarding the Acquisition Notes.

Offering costs – The $2.0 million of estimated direct and incremental offering costs recorded in connection with the Acquisition Financing were allocated based on the relative fair values of the warrants, Class A Common Stock, Series G Convertible Preferred Stock and the Acquisition Notes that comprise the offering. Issuance costs were allocated as follows: (i) $1.6 million allocated to the Series G Convertible Preferred Stock and the Class A Common Stock issued in conjunction with the Acquisition Financing were recorded as a reduction to temporary equity; (ii) $0.3 million allocated to the warrants were expensed, as the warrants were determined to be classified as a liability, initially; and (iii) $0.3 million allocated to the Acquisition Notes, which are deferred and will be expensed over the term of the Acquisition Notes using the effective interest method. The Acquisition Notes were redeemed by the Company on* December 31, 2025.Refer to Note14,* Loans Payable, for further information regarding the Acquisition Notes.

Offerings of Common Stock

On* December 12, 2025,we entered into an underwriting agreement (the “Underwriting Agreement”) with Canaccord Genuity LLC and Craig-Hallum Capital Group LLC, as representatives of the several underwriters named therein (the “Underwriters”), relating to an underwritten public offering (the “DecemberOffering”) of 7,750,000 shares of Common Stock, at a public offering price of $7.75 per share. Pursuant to the terms of the Underwriting Agreement, the Company granted, and the Underwriters exercised, a30*-day option to purchase up to an additional 1,162,500 shares of Common Stock in the Offering at the public offering price. The* DecemberOffering closed on December 15, 2025,*with net proceeds of $65.2 million after deducting underwriting discounts and commissions and other offering expenses paid by the Company.

On* June 1, 2026,we entered into a securities purchase agreement with a selling stockholder, North Run Strategic Opportunities Fund I, LP (“North Run”) and certain institutional investors for the purchase and sale of an aggregate of 7,142,800 shares of Class A Common Stock at an offering price of $14.00 per share, consisting of 3,571,400 shares of Class A Common Stock sold by the Company and 3,571,400 shares of Class A Common Stock sold by North Run (the "JuneOffering"), resulting in gross proceeds to us of approximately $50.0 million. The JuneOffering closed on June 3, 2026,*with net proceeds of $47.1 million after deducting underwriting discounts and commissions and other offering expenses paid by the Company.

9. Income Taxes

For financial reporting purposes, income (loss) before income taxes includes the following components:

The components of the provision for income taxes are as follows:

F-22

The table below provides the updated requirements of ASU2023-09 for the year ended* June 30, 2026.See section Recent Accounting Pronouncements for additional details on the adoption of ASU2023*-09.

The reconciliation of income tax computed at the U.S. federal statutory rates to the total income tax provision is as follows:

As previously disclosed for the year ended* June 30, 2025,prior to the adoption of ASU2023*-09, the reconciliation of income tax computed at the U.S. federal statutory rates to the total income tax provision is as follows:

F-23

Cash Paid for Income Taxes

Cash taxes paid by the Company during the year ended* June 30, 2026*were as follows:

Income Tax Law of the People’s Republic of China

The Company’s Chinese subsidiary, LPOIZ, is governed by the Income Tax Law of the People’s Republic of China concerning the privately run and foreign invested enterprises, which are generally subject to tax at a statutory rate of 25% on income reported in the statutory financial statements after appropriate tax adjustments. For both the years ended* June 30, 2026and2025*, the tax rate for LPOIZ was 15%, in accordance with an incentive program for technology companies. The net deferred tax liability for LPOIZ is approximately $0.1 million and $0.2 million as of* June 30, 2026and2025*, 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. However, during fiscal year2020, the Company began declaring intercompany dividends to remit a portion of the historical earnings of its foreign subsidiaries to the U.S. parent company. It is still the Company’s intent to reinvest a significant portion of the more recent earnings generated by its foreign subsidiaries, however the Company also plans to repatriate a portion of the historical earnings of its subsidiaries. Based on its previous intent, the Company hadnot historically provided for future Chinese withholding taxes on the related earnings. However, during fiscal year2020 the Company began to accrue for these taxes on the portion of historical earnings that it intends to repatriate.

During the years ended* June 30, 2026and2025*, the Company declared and paid intercompany dividends of $0.2 million and $1.1 million, respectively, from LPOIZ, payable to the Company as its parent company. Accordingly, the Company paid and recorded income tax expense for Chinese withholding taxes of approximately $0.02 million and $0.1 million associated with these dividends during fiscal years2026 and2025, respectively. Accrued and unpaid withholding taxes were less than $0.1 million as of both* June 30, 2026and2025*. Other than these withholding taxes, these intercompany dividends haveno impact on the Consolidated Financial Statements. We also paid Chinese withholding taxes of $0.04 million and $0.03 on payments from LPOIZ to LightPath for administrative services rendered during fiscal years2026 and2025, respectively.

Law of Corporate Income Tax of Latvia

The Company’s Latvian subsidiary, ISP Latvia, is governed by the Law of Corporate Income Tax of Latvia. Until* December 31, 2017,ISP Latvia was subject to a statutory income tax rate of 15%. Effective January 1, 2018,the Republic of Latvia enacted tax reform with the following key provisions: (i) corporations areno* longer subject to income tax, but are instead subject to a distribution tax on distributed profits (or deemed distributions, as defined), and (ii) the tax rate was changed to 20%; however, distribution amounts arefirst divided by0.8 to arrive at the taxable amount of profit, resulting in an effective tax rate of 25%. As a transitional measure, distributions made from earnings prior to* January 1, 2018,distributed prior to December 31, 2019,arenot* subject to tax if declared prior to* December 31, 2019.ISP Latvia has declared an intercompany dividend to be paid to ISP, its U.S. parent company, for the full amount of earnings accumulated prior to January 1, 2018.Distributions of this dividend will be from earnings prior to January 1, 2018and, therefore, willnot* be subject to tax. The Company currently doesnot intend to distribute any current earnings generated after* January 1, 2018.*If, in the future, the Company changes such intention, distribution taxes, if any, will be accrued as profits are generated.

F-24

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities are as follows as of* June 30, 2026and2025*, with certain fiscal year2025 amounts reclassified from those previously reported to conform to current classification:

In assessing the potential future recognition of deferred tax assets, management considers whether it is more likely thannot that some portion or all of the deferred tax assets willnot be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. The Company’s largest deferred tax asset is related to its U.S. federal net operating loss (“NOL”) carryforwards. As of* June 30, 2026,the Company has federal NOL carryforwards of approximately $42.0 million, of which $14.0 million expire from2027* to2034. Federal NOL carryforwards generated after2021 of $28.0 million are carried forward indefinitely and are subject to an 80% limitation on taxable income. The Company also has state NOL carryforwards of approximately $33.3 million, of which $14.7 million begin expiring in2027 and approximately $18.6 million have an indefinite life.

Based on the weight of the available evidence, management has provided for a valuation allowance against the deferred tax assets of approximately $17.8 million at* June 30, 2026*, an increase of approximately $3.8 million as compared to* June 30, 2025*. 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. The U.S. net deferred tax asset of approximately $0.1 million results from federal and state tax credits with indefinite carryover periods. State income tax expense disclosed on the effective tax rate reconciliation above includes state deferred taxes that are offset by a full valuation allowance.

The utilization of the Company’s NOL carryforwards* maybe subject to a U.S. federal limitation due to the “change in ownership provisions” under Section382* of the Internal Revenue Code and other similar limitations in various state jurisdictions. Such limitations* mayresult in a reduction of the amount of NOL carryforwards in future years and possibly the expiration of certain NOL carryforwards before their utilization. The Company has performed a Sec.382 study and concluded that there isno* limitation under Section382 as of* June 30, 2026*.

At* June 30, 2026*, in addition to NOL carryforwards, the Company also has research and development and other credit carryforwards of approximately $1.9 million, which will expire from2026 through2045.

The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examinations by federal, foreign, and state and local jurisdictions, where applicable. There are currentlyno pending tax examinations. The Company isno longer subject to U.S. federal and state tax examinations for fiscal years through* June 2021,nor to corporate tax examination for through calendar year2014* in China, and for fiscal years through* June 2017in Latvia. To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may*still be adjusted upon examination by the Internal Revenue Service and state and local tax authorities to the extent utilized in a future period.

F-25

As required by the uncertain tax position guidance in ASCNo. 740, Income Taxes, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely thannot sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than50% likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company applied the uncertain tax position guidance to all tax positions for which the statute of limitations remained open. The Company hasnot recognized a liability for uncertain tax positions. The Company’s conclusions regarding uncertain tax positions* may*be subject to review and adjustment at a later date based upon ongoing analysis of or changes in tax laws, regulations and interpretations thereof as well as other factors.

On* July 4, 2025,the One Big Beautiful Bill was enacted (“OBBBA”), introducing significant and wide-ranging changes to the U.S. federal tax system. Significant components include restoration of100%* accelerated tax depreciation on qualifying property including expansion to cover qualified production property. Another major aspect incudes the return to immediate expensing of domestic research and experimental expenditures (“R&E”) which in some cases* mayinclude retroactive application back to2021* for businesses with gross receipts of less than*$31* million or accelerated tax deductions of R&E that was previously capitalized for larger businesses. The legislation also reinstates EBITDA-based interest deductions for tax purposes and makes several business tax incentives permanent. Less favorable business provisions include limitations on tax deductions for charitable contributions.

The OBBBA modified the U.S. International Tax provisions for Global Intangible Low-Taxed Income (“GILTI”), Foreign-Derived Intangible Income (“FDII”), and the Base-erosion Anti-abuse Tax (“BEAT”) effective for tax years starting after* December 31, 2025.The tax rate on GILTI, now renamed to Net CFC Tested Income (“NCTI”), is now12.6%.* The FDII rules, now renamed to Foreign Derived Deduction Eligible Income (“FDDEI”), now carry a14% tax rate on FDDEI eligible income. The OBBB Act increases the BEAT rate from10% to10.5%.

The Company is currently assessing the potential impact of this legislation on its future financial position, results of operations, and cash flows. In accordance with U.S. GAAP, the effects will be recognized in the period of enactment.

10. Compensatory Equity Incentive Plan and Other Equity Incentives

Share-based payment arrangements— The Company’s directors, officers, and key employees were granted stock-based compensation under the Omnibus Plan, through* October 2018and after that date, the SICP. Such stock-based compensation mayinclude, 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. To date, our stockholders approved an aggregate of 13,715,625 shares of our Class A Common Stock for issuance pursuant to awards granted thereunder. As of June 30, 2026*,2,302,750 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.

The LightPath Technologies, Inc. Employee Stock Purchase Plan (“2014 ESPP”) was adopted by the Company’s Board of Directors on* October 30, 2014and approved by the Company’s stockholders on January 29, 2015.The2014* ESPP expired on* January 29, 2025.A new Employee Stock Purchase Plan (“2025* ESPP”) was approved by the stockholders on* June 16, 2025with thefirst* offering period beginning* July 1, 2025.The2025* ESPP permits employees to purchase Class A Common Stock through payroll deductions, which* may**not* exceed 15% of an employee’s compensation, at a pricenot less than 85% of the market value of the Class A Common Stock on specified dates (* June 30and December 31).Inno* 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 of12 months and 4,000 shares on any purchase date within an offering period ofsix months. This discount of approximately $2,500 and $400 for each of the fiscal years ended* June 30, 2026and2025*, respectively, is included in the selling, general and administrative expense in the accompanying Consolidated Statements of Comprehensive Income (Loss), which represents the value of the discount given to the employees purchasing stock under the respective ESPP plans.

F-26

These plans are summarized below:

Grant Date Fair Values and Underlying Assumptions; Contractual Terms—The Company estimates the fair value of each equity option as of the date of grant, using the Black-Scholes-Merton pricing model. The fair value of the2014 ESPP and2025 ESPP shares is based on the amount of the discount the employee obtained at the date of the purchase transaction.

Most stock options granted vest ratably overtwo tofour years and are generally exercisable forten years. The assumed forfeiture rates used in calculating the fair value of RSU grants was 0%, and the assumed forfeiture rates used in calculating the fair value of options for performance and service conditions were 20% for each of the years ended* June 30, 2026and2025*. The volatility rate and expected term are based onseven-year historical trends in Class A Common Stock closing prices and actual forfeitures. The interest rate used is the U.S. Treasury interest rate for constant maturities.

The Company estimated the fair value of each stock award as of the date of grant using the following assumptions:

Restricted Stock Awards

RSAs are granted primarily to our executive officers, employees and consultants, and typically vest over aone tothree year period from the date of grant, although some* may*vest immediately upon grant. The stock underlying RSAs is issued upon vesting.

Restricted Stock Units

RSUs are granted primarily to our directors, although RSU awards* mayalso be made to executive officers, employees and consultants. RSUs typically vest over aone tofour year period from the date of grant, although some may*vest immediately upon grant.

The Company issues new shares of Class A Common Stock upon the exercise of stock options and upon vesting of RSUs and RSAs, unless the recipient has elected to defer receipt of shares under the applicable IRS rules.

F-27

Information Regarding Current Share-Based Payment Awards—** A summary of the activity for share-based payment awards in the years ended June 30, 2026and2025 is presented below:

The intrinsic and fair values for share-based payment awards exercised and vested in the years ended* June 30, 2026and2025* are presented below:

The intrinsic values of share-based payment awards outstanding and exercisable as of* June 30, 2026and2025* are presented below:

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As of* June 30, 2026*, there was approximately $20.8 million 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. The expected compensation cost to be recognized is as follows:

There wasno unrecognized compensation expense related to the Company’s2014 ESPP, as all purchases were settled in* January 2025.Unrecognized compensation expense related to the Company's2025* ESPP was approximately $7,000 as of* June 30, 2026.*

Acceleration of Vesting—** *The Company doesnot generally accelerate the vesting of any stock options, RSUs or RSAs, however in the case of retirements, the Board of Directors may*accelerate vesting, which would accelerate expense recognition.

Financial Statement Effects and Presentation—** The following table shows total stock-based compensation expense for the years ended June 30, 2026and2025, which is included in selling, general and administrative expenses in the accompanying Consolidated Statements of Comprehensive Income (Loss):

11. Earnings (Loss) Per Share

Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of Class A Common Stock outstanding during each period presented. The computation of diluted earnings (loss) per share further assumes the potential dilutive effect of potential Class A Common Stock using the treasury-stock method and if-converted method, as applicable. During periods in which the average market price of the Class A Common Stock is above the applicable conversion price of the Company's convertible notes, the impact of conversion would be dilutive and such dilutive effect is reflected in diluted EPS. As a result, in periods where the average market price of the Class A Common Stock is above the conversion price, under the if-converted method, the Company calculates the number of shares issuable under the terms of the convertible notes based on the average market price of the stock during the period, and includes that number in the total diluted shares outstanding for the period. The Warrants and the Series G Convertible Preferred Stock are participating securities as the holders of such instruments participate in the event a dividend is paid on Class A Common Stock, however the holders donot have a contractual obligation to share in the Company’s losses. As such, losses are attributed entirely to common stockholders. The computations for basic and diluted earnings (loss) per share of Class A Common Stock are described in the following table:

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The following weighted-average potential dilutive shares werenot included in the computation of diluted earnings per share, as their effects would be anti-dilutive. Potential dilutive shares for the Series G Convertible Preferred Stock, warrants and convertible notes were calculated based on the Exchange Cap in effect for the respective periods:

12. Defined Contribution Retirement Plans

The Company provides retirement benefits to its U.S.-based employees throughtwo defined contribution retirement plans. These benefits are offered under the LightPath Technologies Inc.401(k) plan (the “LightPath Plan”) and theG5 Infrared, LLC401(k) Plan (the*“G5* Plan”). The LightPath Plan and theG5 Plan are defined401(k) contribution plans, administered bythird parties, that all U.S. employees, over the age of18, are eligible to participate in afterone month of employment. Under the LightPath Plan, the Company matches 100% of thefirst 2% of employee contributions. Under theG5 Plan, the Company matches 100% of thefirst 4% of employee contributions. The Company made matching contributions under these plans of approximately $0.4 million and $0.2 million during the years ended* June 30, 2026and2025*, respectively. As of* January 1, 2026,*the plans were merged.

13. Leases

The Company has operating leases for its manufacturing and office space. The Company has a lease agreement for its corporate headquarters and manufacturing facility in Orlando, Florida (the “Orlando Lease”). The Orlando Lease expires on* March 31, 2034.Minimum rental rates for the extension term were established based on annual increases of approximatelythree* percent (3%). Additionally, there isone five-year extension option exercisable by the Company. The minimum rental rates for such additional extension option will be determined at the time an option is exercised and will be based on a “fair market rental rate,” as determined in accordance with the Orlando Lease, as amended.

As of* June 30, 2026*, the Company, through its wholly-owned subsidiary,G5 Infrared, has a lease agreement for a manufacturing and office facility in Hudson, New Hampshire, which expires* December 31, 2031.The Company’s wholly-owned subsidiary, Visimid, has a lease agreement for a manufacturing and office facility in Plano, Texas, which commenced September 1, 2025for afive-year term. The prior facility was relocated to this larger facility, and the lease of the prior facility, which was set to expire October 31, 2026,was terminated in March 2026*pursuant to a mutual agreement with the lessor.

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The Company’s wholly-owned subsidiary, LPOIZ, has a lease agreement for a manufacturing and office facility in Zhenjiang, China, which expires* December 31, 2027.The Company, through ISP’s wholly-owned subsidiary ISP Latvia, hastwo lease agreements for a manufacturing and office facility in Riga, Latvia, which leases expire December 31, 2030.*

The Company’s facility leases are classified as operating leases. The operating leases for facilities are non-cancelable, expiring in2026 to2034. 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, 2026*, the Company also has obligations undereighteen finance lease agreements, entered into during fiscal years2023 through2026, with terms ranging from three tofive years. The finance leases are for computer and manufacturing equipment. The finance leases for equipment in Riga, Latvia include financial covenants specific to ISP Latvia.

The Company’s operating lease ROU assets and the related lease liabilities are initially measured at the present value of future lease payments over the lease term. Two of our operating leases include renewal options, which werenot included in the measurement of the operating lease ROU assets and related lease liabilities. As most of the Company’s leases donot provide an implicit rate, the Company used its collateralized incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. Currently,none of the Company’s leases include variable lease payments that are dependent on an index or rate. The Company is responsible for payment of certain real estate taxes, insurance and other expenses on certain of its leases. These amounts are generally considered to be variable and arenot included in the measurement of the ROU asset and lease liability. The Company generally accounts for non-lease components, such as maintenance, separately from lease components. The Company’s lease agreements donot contain any material residual value guarantees or material restricted covenants. Leases with a term of12 months or less arenot recorded on the Consolidated Balance Sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term.

The components of lease expense were as follows:

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Supplemental balance sheet information related to leases was as follows:

Lease term and discount rate information related to leases was as follows:

Supplemental cash flow information:

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Future maturities of lease liabilities were as follows as of* June 30, 2026*:

14. Loans Payable

As of* June 30, 2026*, loans payable consisted ofone third-party equipment loan. During the year ended* June 30, 2026*, the Acquisition Notes were redeemed and the2020 Equipment Loan (as defined below) was paid in full. The Bridge Note (as defined below) was extinguished during the year ended* June 30, 2025.*

Acquisition Notes

On* February 18, 2025,in connection with the closing of the Securities Purchase Agreement (see Note3,* Acquisition ofG5* Infrared*), we issued the Acquisition Notes. The Acquisition Notes accrue interest at the rate between 10-12% per annum (12% as of* June 30, 2026*), based on the ratio of indebtedness to EBITDA of the Company, unless an event of default (as defined in the Acquisition Notes) occurs, at which time the Acquisition Notes would accrue interest at 15% per annum. The Company determined the embedded features related to the payment of variable interest and upon an event of default are clearly and closely related to the Acquisition Notes, and are thereforenot bifurcated from the Acquisition Notes. At* June 30, 2025,the net carrying value of the convertible promissory notes is $4.6 million, including unamortized debt discount and issuance costs of $0.6 million, and had an effective interest rate of 5.7%. The estimated fair value (Level3*) of the convertible promissory notes approximates its book value as of* June 30, 2025.*

The Acquisition Notes would have matured on* February 18, 2027,thesecond* anniversary of the issuance date, but were redeemed by the Company on* December 31, 2025,prior to the maturity date, at a redemption price equal to the portion of principal so redeemed plus all accrued and unpaid interest thereon. Pursuant to the terms of the Acquisition Notes, since the funds used for redemption werenot* generated internally by Company operations, the redemption amount was multiplied by 102%. We recorded a loss on extinguishment of debt of $0.5 million during the year ended* June 30, 2026,*based on the difference between the carrying value of the debt being extinguished and the redemption amount.

The Acquisition Notes were automatically convertible into shares of Series G Convertible Preferred Stock, which were in turn convertible into Conversion Shares, if the EBITDA reported by the Company for the calendar year ending* December 31, 2025,is less than approximately $4.9 million, which are in turn convertible into Conversion Shares (the “Automatic Note Conversion”). The Series G Convertible Preferred Stock would have been convertible into Class A Common Stock. The Company determined that the Automatic Note Conversion didnot* require bifurcation from the Acquisition Notes as the Automatic Note Conversion (i) is indexed to the Company’s own stock, (ii) is settled in shares,not cash, and (iii) is only exercisable into a fixed number of shares at a fixed exercise price of $1,000 per share once it is triggered to convert and the conversion price can only be adjusted for standard antidilution provisions.

The Acquisition Notes included customary affirmative and negative covenants and events of default. Additionally, the Acquisition Notes included financial covenants requiring the Company to maintain a Total Leverage Ratio (as defined in the Acquisition Notes) ofnot greater than 4.00:1:00 and a Fixed Charge Covered Ratio (as defined in the Acquisition Notes) of greater than 1.20:1.00 for each fiscal quarter beginning with the fiscal quarter ending* December 31, 2025.*

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Bridge Note

On* August 6, 2024,we entered into the Bridge Note with Lytton-Kambara Foundation (the “Lender” and also the “Class A Purchaser”) pursuant to which the Lender extended a loan to the Company in the principal amount of $3.0 million (the “Loan”). The Loan is subject to an original issue discount of 7%. After deducting the original issue discount, fees paid to our placement agent, and certain expenses, the Company received net proceeds of $2.7 million. The Bridge Note was unsecured, bore interest at the rate of 12.5% per annum and had a 1-year term, maturing on August 6, 2025 (*the “Maturity Date”), at which time the entire principal amount of the Bridge Note and all accrued but unpaid interest would have been due and payable in full.

The Bridge Note and related accrued interest were settled on* February 18, 2025,in conjunction with financing for the acquisition ofG5* Infrared and the closing of the Securities Purchase Agreement and Class A SPA (see Note8, Stockholders' Equity) with the Lytton Buyers. The Bridge Note and $1.5 million of cash was exchanged for: (i)687,750 shares of Class A Common Stock at a purchase price of approximately $2.15 per share issued in connection with the Class A Common Securities Purchase Agreement; (ii) approximately 1,957 shares of Series G Convertible Preferred Stock issued in connection with the Securities Purchase Agreement; (iii) warrants to purchase 512,091 shares of Class A Common Stock, with an exercise price of $2.58 per share, of which 170,697 were issued in connection with the Class A SPA and 341,394 were issued in connection with the Securities Purchase Agreement and (iii) an Acquisition Note in an aggregate principal amount of approximately $1.2 million issued in connection with the Securities Purchase Agreement. The exchange of the Bridge Note was accounted for as a debt extinguishment as the Conversion Option on the Acquisition Notes is substantive, the warrants, preferred stock, and common stock are equity classified and an exchange of debt for equity other than through an existing conversion feature is accounted for as an extinguishment. The loss on extinguishment of $0.4 million was computed as the difference between (i) the carrying value of the Bridge Note and (ii) the fair value of the new instruments issued, including the Acquisition Note, the Series G Convertible Preferred Stock, Class A Common Stock, and Warrants. Prior to closing of the Securities Purchase Agreement and Class A SPA, the Lytton Buyers owned a de minimis amount the Company’s equity and therefore the loss wasnot an in-substance capital transaction and was recognized as a loss on extinguishment of debt in the accompanying consolidated statements of comprehensive income (loss).

Equipment Loans

In* December 2020,ISP Latvia entered into an equipment loan with athird* party (the*“2020* Equipment Loan”), which is also a customer. The2020 Equipment Loan is collateralized by certain equipment. The initial advance under the2020 Equipment Loan was 225,000 EUR (or approximately USD $0.3 million), payable in equal installments over 60 months, the proceeds of which were used to make a prepayment to a vendor for equipment to be delivered at a future date. The2020 Equipment Loan bears interest at a fixed rate of 3.3%. An additional 225,000 EUR (or approximately USD $0.3 million) was drawn in* September 2021,which proceeds were paid to the vendor for the equipment, payable in equal installments over 52 months. The2020* Equipment Loan was paid in full as of* December 31, 2025.*

In* May 2023,ISP Latvia entered into an equipment loan with athird* party financial institution (the*“2023* Equipment Loan”). The2023 Equipment Loan is collateralized by certain equipment. The initial advances under the2023 Equipment Loan totaled 260,258 EUR (or approximately USD $0.3 million), the proceeds of which were used to make prepayments to a vendor for equipment to be delivered at a future date. The final advance for the final payment to the equipment vendor was 132,674 EUR (or approximately USD $0.1 million). The2023 Equipment Loan is payable over 48 months, with monthly installments beginning* January 1, 2024.The2023* Equipment Loan bears interest at thesix-month EURIBOR rate, plus 2.84% (5.20% as of* June 30, 2026*).

Future maturities of loans payable are as follows:

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15. Contingencies

Legal

The Company from time to time is involved in various legal actions arising in the normal course of business. Management, after reviewing with legal counsel all of these actions and proceedings, believes that the aggregate losses, if any, willnot have a material adverse effect on the Company’s financial position or results of operations.

Potential Impact of Economic Conditions in China

Due to our operations in China, our business, results of operations, financial condition and prospects* maybe 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.

In addition, China’s export limitations on Germanium and Gallium,two materials that are commonly used in infrared optical components, are becoming increasingly disruptive to our business with adverse impacts. The initial restrictions imposed in* July 2023required all international customers to provide an end user statement for approval before receiving an export license. Following that announcement, supply of Germanium was disrupted, thoughnot* completely stopped. This also resulted in significant price increases in the cost of Germanium material. Following these restrictions we proactively canceled a number of customer orders for Germanium, to reduce our exposure in case of a supply disruption.

Then, in* December 2024,China imposed additional restrictions applicable to exports to the United States, including a prohibition on exports of dual-use items to U.S. military users or for military uses and a policy under which exports of specified gallium- and germanium-related dual-use items to the United States would generallynot* be licensed. In* November 2025,China suspended the latter U.S.-specific restriction through November 27, 2026.However, the underlying export-license requirements remain in effect, the restrictions applicable to U.S. military users and military end uses remain in place, and China may*reinstate, extend, or modify its U.S.-specific restrictions.

As a purchaser of Germanium, we cannot provide any assurance that we will be able to obtain adequate supplies of Germanium, or that the timing or costs of obtaining such raw materials will be acceptable to us. We have taken proactive steps to minimize the orders we accept for Germanium products and therefore minimize our exposure to this risk, and are actively working with our customers to redesign their systems to use our BlackDiamond materials instead of Germanium-based materials. Additionally, we are actively collaborating with our customers to ensure those redesigned systems are tested and qualified as replacements for legacy Germanium-based systems. In some cases, such as complex defense and airborne systems, the re-qualification of such redesigned systems is a lengthy process that can take up totwo years. In other systems such as commercial systems and also some specific defense systems, this is a faster process, that takes several months.

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Beginning in* February 2025,the U.S. imposed additional tariffs on imports from China, and China imposed retaliatory tariffs and other measures on certain goods imported from the U.S. Since that time, the United States and China have increased, reduced, suspended, replaced, and otherwise modified various tariff and non-tariff measures, including through bilateral negotiations. We utilize a number of strategies intended to mitigate the impact of tariffs and other trade restrictions. However, given the uncertainty regarding the current tariffs, as well as the potential for additional trade actions by the U.S. or other countries in the future, any future impact on our operations and financial results is uncertain and these impacts could be more significant than those we have experienced in the past. Further, we can provideno* assurance that the strategies we implemented to mitigate the impact of such tariffs or other trade actions will continue to be successful. To the extent that our supply chain, costs, sales, or profitability are negatively affected by the tariffs or other trade actions, our business, financial condition, and results of operations* may*be materially adversely affected.

Impact of Ongoing Wars

In* February 2022,Russian military forces invaded Ukraine. This war has led to ongoing sanctions on Russia, which have had continuing impacts on our supply chain of raw materials, particularly Germanium. 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. Our sales to customers in this region have since stabilized, however, it is still possible that this war could have a negative impact on our business as a result of the overall 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.

16. Foreign Operations

Assets and liabilities denominated in non-U.S. currencies are translated at rates of exchange prevailing on the balance sheet date, and revenues and expenses are translated at average rates of exchange for the period. Gains or losses on the translation of the financial statements of a non-U.S. operation, where the functional currency is other than the U.S. dollar, are reflected as a separate component of equity, which was a cumulative gain of approximately $1.3 million and $1.0 million as of* June 30, 2026and2025*, respectively. During the years ended* June 30, 2026and2025*, we also recognized net foreign currency transaction losses of approximately $0.1 million and $0.1 million, respectively, included in the accompanying consolidated statements of comprehensive income (loss) in the line item entitled “Other income, net.”

Revenues by geographic area, based on shipping destination, for the fiscal years ended* June 30, 2026and2025* as follows:

Long-lived assets by geographic area as of* June 30, 2026and2025* are as follows:

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17. Segment Reporting

The Company hasone reportable operating segment, the optics segment that is managed on a consolidated basis. The optics segment designs and manufactures products at locations in the U.S., Europe and Asia and manages the business activities on a consolidated basis. Our Chief Operating Decision Maker (“CODM”) is the chief executive officer. The chief operating decision maker assesses performance for the optics segment and decides how to allocate resources based on consolidated net loss that also is reported on the consolidated statements of comprehensive income (loss) as consolidated net loss. The types of products and services from which the optics segments derives its revenues is described in Note4, Revenue. The accounting policies of the optics segment are the same as those described in Note2, Significant Accounting Policies, to these Consolidated Financial Statements. The measure of segment assets is reported on the consolidated balance sheet as total assets. See Note4, Revenue for detail about revenue by product and service group, and Note16, Foreign Operations, for geographic information. See Note18, Supplier and Customer Concentrations, for information about major customers.

The CODM uses consolidated net loss to evaluate income generated from segment assets, and to determine whether to invest in new capabilities related to this segment. The CODM monitors budget to actual results for revenue, gross profit, operating expenses and net loss on a consolidated basis. The CODM reporting package includes non-operating items to reconcile to net income. The following table represents the financial information regularly reviewed by the CODM, in addition to the Consolidated Financial Statements. Interest expense is reported on consolidated statements of comprehensive income (loss) as interest expense, net; depreciation and amortization expense, stock-based compensation expense, and total expenditures for long-lived assets are reported on the consolidated statement of cash flows.

18. Supplier and Customer Concentrations

The Company utilizes a number of glass compositions in manufacturing its molded glass aspheres and lens array products. 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 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. 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. In2023, China began imposing export restrictions on Germanium and has continued to increase those restrictions over time, as further described in Note15, Contingencies, to these Consolidated Financial Statements. 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 beno assurance in this regard.

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In fiscal year2026, the Company had sales tothree customers that comprised an aggregate of approximately 37% of its annual revenue, and 44% of its* June 30, 2026* accounts receivable. Sales to these customers as a percentage of our fiscal year2026 revenue includeone customer at 24%, another customer at 7%, and thethird customer at 6%. One of these customers comprised 27% of accounts receivable, asecond customer comprised 8% of accounts receivable and athird customer comprised 9% of the accounts receivable balance as of* June 30, 2026*. In fiscal year2025, the Company had sales tothree customers that comprised an aggregate of approximately 23% of its annual revenue, and 28% of its* June 30, 2025* accounts receivable. Sales to these customers as a percentage of our fiscal year2025 revenue includeone customer at 9%, another customer at 7%, and thethird customer at 6%. One of these customers comprised 11% of accounts receivable, asecond customer comprised 3% of accounts receivable and athird customer comprised 1% of the accounts receivable balance as of* June 30, 2025*. For fiscal year2025, it should be noted thatone of those customers is aG5 Infrared customer, and doesnot reflect a full year of revenue and therefore has a higher concentration of accounts receivable than revenue. The loss of any of these customers, or a significant reduction in sales to any such customer, would adversely affect the Company’s revenues.

In fiscal year2026,48% of the Company’s net revenue was derived from sales outside of the U.S., with 97% of foreign sales derived from customers in Europe and Asia. In fiscal year2025,38% of the Company’s net revenue was derived from sales outside of the U.S., with 91% of foreign sales derived from customers in Europe and Asia.

19. Subsequent Event

On* July 23, 2026,the Company and LPOIZ entered into an equity transfer agreement (the “ETA”) with Hengtu Optical Technology Co., Ltd. (the “Purchaser”), and Mr. Leo Zheng (the “Purchaser Representative”). The Purchaser is owned by the Purchaser Representative and certain members of the Company’s current management team. Pursuant to the ETA, and subject to the terms and conditions set forth therein, the Company agreed to sell and transferone hundred* percent (100%) of its interest in LPOIZ to the Purchaser (the “LPOIZ Transaction”) for payment of cash consideration of $4,500,000 (the “Purchase Price”). The Purchase Price is payable in fullno later than thefifth anniversary of the closing of the LPOIZ Transaction, with the Purchaser required to pay at least $500,000 per year, together with financing interest in an amount equal tofour percent (4%) of the principal amount of each Purchase Price installment, all in accordance with the ETA. In addition, if the Purchaser fails to pay any amount due under the Agreement when due, the Purchaser shall pay damages on the overdue amount at an annual rate ofseven percent (7%).

The ETA further provides that during the period commencing on the closing date of the LPOIZ Transaction and ending of the later of (i) the date on which the Purchase Price has been paid in full and (ii) thefifth anniversary of the closing date of the LPOIZ Transaction (such period, the “Restricted Period”), the Company shall have the right to designate an observer at all meetings of the board of directors, shareholders or other governing bodies of LPOIZ. The Purchaser has also agreed that, during the Restricted Period, (a) a change of control of the Company (as defined in the ETA) shallnot occur; (b) the Company shallnot sell, dispose of or otherwise transfer all or substantially all of its assets (including without limitation intellectual property) and/or business to anythird party, except for the sale of inventory and products in the ordinary course of business consistent with past practice and the ETA; and (c) if there is any direct or indirect change in the ownership of LPOIZ or the Purchaser, the Purchaser shall provide a written notice to the Company immediately, and any new direct or indirect shareholder shall execute an acknowledgment in form and substance satisfactory to the Company acknowledging and agreeing to the post-closing restrictions and other applicable terms of the ETA.

Subject to the terms and conditions of the ETA, LPOIZ will receive from the Company certain limited rights and licenses to use specified trademarks in specified territories, including certain transitional trademark rights and afive-year license relating to specified marks. The ETA also provides LPOIZ with certain rights to use product drawings, tooling, molds, process documentation, technology, know-how and related technical support in connection with LPOIZ’s business following the closing. The rights and licenses are subject to the scope, duration, territory, quality control, confidentiality, payment, default and termination provisions set forth in the ETA, and the Company and its affiliates retain ownership of their intellectual property except to the extent expressly provided therein.

Additionally, pursuant to the ETA, during thefirst five years following the closing of the LPOIZ Transaction (the “Exclusive Supply Term”), LPOIZ shall continue to supply products to the Company in a manner consistent with past practice, applicable specifications and agreed upon quality requirements. The purchase price of such products to be supplied by LPOIZ to the Company shall continue to be cost plusten percent (10%) following the closing of the LPOIZ Transaction; provided that for every payment by the Purchaser of*$1,000,000* of the principal portion of the remaining balance of the Purchase Price, the cost plus markup percentage for products supplied to the Company shall automatically increase byfive percent (5%) (e.g., upon payment of*$2,000,000* in principal of the Purchase Price, the purchase price for products supplied to the Company will be cost plustwenty percent (20%). Upon full payment of the principal amount of the Purchase Price, the purchase price shall be fixed at cost plusthirty percent (30%) and shallnot be further adjusted unless otherwise agreed by the parties in writing.

The ETA contains certain mutual post-closing covenants restricting each party’s ability to sell, market or distribute specified products in specified territories during the Exclusive Supply Term.

The LPOIZ Transaction is expected to close in* September**2026.*

End of Consolidated Financial Statements

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