LIGHTPATH TECHNOLOGIES INC

As of March 31, 2025, we had working capital of approximately $15.9 million and total cash and cash equivalents of approximately $6.5 million, of which, approximately 25% of our cash and cash equivalents was held by our foreign subsidiaries.

Cash and cash equivalents held by our foreign subsidiaries in China and Latvia were generated in-country as a result of foreign earnings. We routinely declare intercompany dividends to remit a portion of the earnings of our foreign subsidiaries to LightPath, as the U.S. parent company. It is still our intent to reinvest a significant portion of earnings generated by our foreign subsidiaries, however, we may also repatriate a portion of their earnings, and we accrue for these taxes on the portion of earnings that we intend to repatriate. We currently do not intend for our Latvian subsidiary to declare intercompany dividends.

In China, before any funds can be repatriated, the retained earnings of the legal entity must equal at least 50% of the registered capital. As of March 31, 2025, LPOIZ had approximately $0.8 million available for repatriation, based on earnings accumulated through December 31, 2024, the end of the most recent statutory tax year, that remained undistributed as of March 31, 2025.

As of March 31, 2025, loans payable consists of two third-party equipment loans and the Acquisition Notes. See Note 13,Loans Payable, in the unaudited Condensed Consolidated Financial Statements, for further information.

On February 16, 2022, we filed a shelf registration statement to facilitate the issuance of our Class A Common Stock, warrants exercisable for shares of our Class A Common Stock, and/or units up to an aggregate offering price of $75.8 million from time to time. In connection with the filing of the shelf registration statement, we also included a prospectus supplement relating to an at-the-market equity program under which we may issue and sell shares of our Class A Common Stock up to an aggregate offering price of $25.2 million from time to time, decreasing the aggregate offering price available under the shelf registration statement to $50.6 million. The shelf registration statement was declared effective by the SEC on March 1, 2022. During the year ended June 30, 2024, we issued 585,483 shares of our Class A Common Stock pursuant to the at-the-market equity program. No additional shares were issued under this program during fiscal year 2025 before the shelf registration expired on March 1, 2025.

On January 12, 2023, the Company entered into a securities purchase agreement (“Purchase Agreement”), pursuant to which the Company agreed to issue and sell in a public offering under the shelf registration statement an aggregate of 9,090,910 shares of the Company’s Class A Common Stock, par value $0.01 per share for a purchase price of $1.10 per share and filed a prospectus supplement with the SEC related thereto. The sale of shares pursuant to the Purchase Agreement closed on January 17, 2023, and resulted in net proceeds of approximately $9.2 million after payment of placement agent fees, and certain other costs and expenses of the offering.

On February 13, 2025, we announced a strategic acquisition and related financing, including the issuance of Series G Convertible Preferred Stock. For additional information, refer to Note 3,Acquisition of G5 Infrared, in the accompanying unaudited Condensed Consolidated Financial Statements.

There are a number of factors that could result in the need to raise additional funds, including a decline in revenue or a lack of anticipated sales growth, increased material costs, increased labor costs, planned production efficiency improvements not being realized, increases in property, casualty, benefit and liability insurance premiums, and increases in other costs. In addition, we may identify opportunities for additional acquisitions and other strategic transactions to expand and further enhance our business that may require that we raise additional capital should we elect to pursue any of such transactions.

Cash Flows – Operating:

Cash used in operations was approximately $5.4 million for the first nine months of fiscal 2025, compared to cash provided by operations of approximately $0.5 million for the same period of the prior fiscal year. Cash used in operations for the first nine months of fiscal 2025 was primarily due to the net loss, coupled with increases in accounts receivable, inventories and prepaid expenses. Cash provided by operations for the first nine months of fiscal 2024 was largely driven by decreases in accounts receivable and inventory, driven by the timing of sales.

Cash Flows – Investing:

During the first nine months of fiscal 2025, we expended approximately $0.6 million in investments in capital equipment, compared to approximately $1.9 million in the same period of the prior fiscal year. The capital spending in the first nine months of fiscal 2024 was largely driven by the Orlando Facility expansion. As disclosed in Note 11,Leases, in the unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q, we constructed additional tenant improvements in our Orlando Facility subject to our continuing lease, of which the landlord agreed to provide $2.4 million in tenant improvement allowances. We funded the balance of the tenant improvement costs of $3.7 million over fiscal years 2023 and 2024. In the third quarter of fiscal 2025, we expended $20.3 million to acquire G5 Infrared, as disclosed in Note 3,Acquisition of G5 Infrared, in the unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q. During the first nine months of fiscal 2024, we expended approximately $0.9 million to acquire Visimid, net of cash acquired, as disclosed in Note 4,Acquisition of Visimid Technologies, in the unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q. The first nine months of fiscal 2024 also reflected proceeds of approximately $365,000 from sale-leasebacks of equipment.

Cash Flows – Financings:

Net cash provided by financing activities was approximately $29.3 million for the first nine months of fiscal 2025, compared to cash used in financing activities of approximately $2.1 million in the same period of the prior fiscal year. Cash provided by financing activities for the first nine months of fiscal 2025 primarily reflects the Acquisition Financing of $27 million, net of financing costs and the Bridge Note conversion, plus $2.7 million in net proceeds from the Bridge Note, offset by approximately $0.3 million in principal payments on our loans and finance leases and $0.1 million for the final cash payment related to the acquisition of Visimid. Cash used in financing activities for the first nine months of fiscal 2024 included $2.3 million in principal payments on our loans and finance leases, offset by approximately $143,000 in proceeds from the 2023 Equipment Loan, $98,000 in proceeds from the sale of Class A Common Stock pursuant to the at-the-market equity program and $40,000 in proceeds from the sale of Class A Common Stock under the 2014 ESPP.