LIGHTPATH TECHNOLOGIES INC

Results of Operations

Revenue

Three Months ended September 30, 2026, compared to three months ended September 30, 2025

Revenue for the first quarter of fiscal 2027 was approximately $20.8 million, an increase of approximately $5.7 million, or 38%, as compared to approximately $15.1 million in the same quarter of the prior fiscal year, led by an increase in assemblies and modules of approximately $4.5 million, coupled with smaller increases in infrared components and visible components. Revenue from assemblies and modules continues to grow with strong demand from customers in the defense industry, particularly suppliers of surveillance and counter-UAS assemblies and systems. Refer to "Revenue by Product Group" below for further information.

Gross Profit

In the first quarter of fiscal 2027, gross profit was approximately $8.6 million, an increase of $4.1 million, or 92%, as compared to the same quarter of the prior fiscal year. Total cost of sales was approximately $12.2 million for the first quarter of fiscal 2027, compared to approximately $10.6 million for the same quarter of the prior fiscal year. Gross margin as a percentage of revenue was 41% for the first quarter of fiscal 2027, compared to 30% for the same quarter of the prior fiscal year. The increase in gross margin as a percentage of revenue is primarily driven by the increase in revenue from assemblies and modules, which generally have higher margins.

Selling, General and Administrative

In the first quarter of fiscal 2027, SG&A costs were approximately $8.0 million, an increase of approximately $3.7 million, or 84%, as compared to the same quarter of the prior fiscal year. The increase in SG&A costs is partially due to the addition of $0.2 million in SG&A costs associated with AML during the first quarter of fiscal 2027. In addition, we have increased our sales and marketing spend to promote new products, including personnel costs, travel and tradeshows. We have also increased our spend on information technology to meet heightened security standards as required by our customers. Our SG&A personnel costs have also increased due to filling certain vacant executive roles and accruing for incentive compensation plans for employees, including stock-based compensation.

New Product Development

In the first quarter of fiscal 2027, new product development costs were approximately $2.0 million, an increase of $1.2 million, or 135%, as compared to the same quarter of the prior fiscal year. The increase in new product development costs is primarily driven by additional engineering personnel to support the continued development of cameras and infrared assemblies, and to continue the development and commercialization of additional BlackDiamond glass types.

Change in Fair Value of Acquisition Liabilities.

Change in fair value of acquisition liabilities decreased by $1.1 million for the first quarter of fiscal 2027, as compared to the same period of the prior fiscal year, related to different acquisitions. The $0.2 million for the first quarter of fiscal 2027 related to the earnouts associated with the AML acquisition, whereas the $1.3 million in the first quarter of fiscal 2026 primarily related to the earnouts associated with the G5 Infrared acquisition, where the amounts earned or estimated were greater than the fair values estimated and recorded at the date of acquisition. See Note 3,Acquisition of Amorphous Materials, and Note 4,Acquisition of G5 Infrared, in the unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q, for further information.

Amortization of Intangibles

Amortization of intangibles was nearly flat for the first quarter of fiscal 2027, as compared to the same quarter of the prior fiscal year. The small increase is driven by the amortization of identifiable intangible assets associated with the acquisitions of G5 Infrared and AML, partially offset by a reduction in amortization of intangible assets associated with prior acquisitions as certain intangible assets become fully amortized.

Other Income (Expense)

Interest income, net, was approximately $0.7 million for the first quarter of fiscal 2027, as compared to interest expense, net, of $0.3 million for the same quarter of the prior fiscal year. The prior periods included interest and amortization of loan issuance costs associated with the Acquisition Notes, executed in February 2025. The Acquisition Notes were paid in full on December 31, 2025, following the December Offering (as defined below) which generated net proceeds of $65.2 million. The June Offering (as defined below) generated net proceeds of $47.1 million, further increasing our cash balance. Much of our cash balance is now generating interest income, which is partially offset by the interest expense on equipment loans and finance leases.

Other expense, net, was approximately $0.1 million for the first quarter of fiscal 2027, as compared to other expense, net, of $0.04 million for the same quarter of the prior fiscal year. Other expense or income, net, includes net gains and losses on foreign exchange transactions. We execute all foreign sales from our U.S. facilities and inter-company transactions in U.S. dollars, partially mitigating the impact of foreign currency fluctuations. Assets and liabilities denominated in non-U.S. currencies, primarily the Chinese Yuan and Euro, 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 year.

Income Taxes

Income tax expense was approximately $0.1 million for both the first quarter of fiscal 2027 and 2026. Income tax expense for these periods is primarily related to income taxes from our operations in China, including withholding taxes on payments from LPOIZ to LightPath for administrative services rendered.

Net Loss

Net loss for the first quarter of fiscal 2027 was approximately $1.7 million, or $0.02 basic and diluted loss per share, compared to a net loss of $2.9 million, or $0.07 basic and diluted loss per share, for the same quarter of the prior fiscal year. The decrease in net loss of approximately $1.2 million for the first quarter of fiscal 2027, as compared to the same quarter of the prior fiscal year, was attributable to increased operating income and interest income.

Weighted-average common shares outstanding for the first quarter of fiscal 2027 were 70,010,938, basic and diluted, compared to 43,287,933, basic and diluted, in the same quarter of fiscal 2026. The increase in weighted-average basic common shares was due to: (i) the Class A Common Stock issued upon conversion of Series G Convertible Preferred Stock; (ii) the December Offering (as defined below) of 8,912,500 shares of Class A Common Stock which closed in December 2025; (iii) the June Offering (as defined below) of 3,571,400 shares of Class A Common Stock which closed in June 2026 (iv) the shares of Class A Common Stock issued in conjunction with the acquisitions of G5 Infrared, AML and Visimid; and (v) the issuance of shares of Class A Common Stock underlying vested RSUs and RSAs. Potential dilutive common stock equivalents were excluded from the calculation of diluted shares for all periods presented, as their effects would have been anti-dilutive due to net losses in those periods.