LIGHTPATH TECHNOLOGIES INC

We report our historical results in accordance with GAAP; however, our management also assesses business performance and makes business decisions regarding our operations using certain non-GAAP financial measures. We believe these non-GAAP financial measures provide useful information to management and investors that is supplementary to our financial condition and results of operations computed in accordance with GAAP; however, we acknowledge that our non-GAAP financial measures have a number of limitations. As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies use.

EBITDA and Adjusted EBITDA

EBITDA and Adjusted EBITDA are non-GAAP financial measures used by management, lenders, and certain investors as a supplemental measure in the evaluation of some aspects of a corporation’s financial position and core operating performance. Investors sometimes use EBITDA, as it allows for some level of comparability of profitability trends between those businesses differing as to capital structure and capital intensity by removing the impacts of depreciation and amortization. EBITDA also does not include changes in major working capital items, such as receivables, inventory and payables, which can also indicate a significant need for, or source of, cash. Since decisions regarding capital investment and financing and changes in working capital components can have a significant impact on cash flow, EBITDA is not necessarily a good indicator of a business’s cash flows. We use EBITDA for evaluating the relative underlying performance of our core operations and for planning purposes. We calculate EBITDA by adjusting net income to exclude net interest expense, income tax expense or benefit, depreciation and amortization, thus the term “Earnings Before Interest, Taxes, Depreciation and Amortization” and the acronym “EBITDA.”

We also calculate an adjusted EBITDA, which excludes: (1) the effect of the non-cash income or expense associated with the mark-to-market adjustments, related to the warrants; and (2) the loss on extinguishment of debt. The fair value of the warrants is re-measured each reporting period until the warrants are either exercised or expired (which expiration occurs on February 18, 2031). Each reporting period, the change in the fair value of the warrants is either recognized as a non-cash expense or non-cash income. The change in the fair value of the warrants is not impacted by our actual operations but was instead strongly tied to the change in the market value of our Class A Common Stock. Management uses adjusted EBITDA to evaluate our underlying operating performance and for planning and forecasting future business operations.

We believe EBITDA and Adjusted EBITDA are helpful for investors to better understand our underlying business operations. The following table adjusts net loss to EBITDA and Adjusted EBITDA for the three and nine months ended March 31, 2025 and 2024:

Our adjusted EBITDA for the quarter ended March 31, 2025 was a loss of approximately $2.0 million, compared to $1.5 million for the same quarter of the prior fiscal year. The decrease in adjusted EBITDA in the third quarter of fiscal 2025 was primarily attributable to increased SG&A, including $0.7 million of non-recurring expenses related to the acquisition of G5 Infrared, and new product development costs.

Our adjusted EBITDA for the nine months ended March 31, 2025 was a loss of approximately $3.9 million, compared to $2.4 million for the same period of the prior fiscal year. The decrease in adjusted EBITDA in the first nine months of fiscal 2025 was primarily attributable to the increased SG&A costs, including $1.3 million of non-recurring expenses related to the acquisition of G5 Infrared.