lpth_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ____________

Commission file number 000-27548

LIGHTPATH TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

Delaware

86-0708398

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

2603 Challenger Tech Ct. Suite 100

Orlando, Florida 32826

(Address of principal executive offices)

(ZIP Code)

(407) 382-4003

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

Class A CommonStock, par value $0.01

LPTH

The Nasdaq Stock Market, LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files). Yes ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

38,022,003 shares of Class A common stock, $0.01 par value, outstanding as of February 5, 2024.

LIGHTPATH TECHNOLOGIES, INC.

Form 10-Q

Index

Item		Page

Cautionary Note Concerning Forward-Looking Statements		3

Part I	Financial Information

Item 1	Financial Statements	4
	Unaudited Condensed Consolidated Balance Sheets	4
	Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)	5
	Unaudited Condensed Consolidated Statement of Changes in Stockholders’ Equity	6
	Unaudited Condensed Consolidated Statements of Cash Flows	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
	Results of Operations	25
	Liquidity and Capital Resources	28
	Contractual Obligations and Commitments	29
	Off-Balance Sheet Arrangements	29
	Critical Accounting Policies and Estimates	30
	Non-GAAP Financial Measures	33
Item 4	Controls and Procedures	34

Part II	Other Information

Item 1	Legal Proceedings	35
Item 1A	Risk Factors	35
Item 2	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	35
Item 3	Defaults Upon Senior Securities	35
Item 4	Mine Safety Disclosures	35
Item 5	Other Information	36
Item 6	Exhibits	37

Signatures		38

Table of Contents

CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS

Certain statements and information in this Quarterly Report on Form 10-Q for the quarter ended December 31, 2023 (the “Quarterly Report”) may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, which address activities, events, or developments that we expect or anticipate will or may occur in the future, including such things as future capital expenditures, growth, product development, sales, business strategy, statements related to the actual and potential effects on our business from rising inflation and interest rates, and other similar matters are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” or other comparable terminology. These forward-looking statements are based largely on our current expectations and assumptions and are subject to a number of risks and uncertainties, many of which are beyond our control. These statements are subject to many risks, uncertainties, and other important factors that could cause actual future results to differ materially from those expressed in the forward-looking statements including, but not limited to, our ability to obtain needed raw materials and components from our suppliers; general economic uncertainty in key global markets and a worsening of global economic conditions or low levels of economic growth; geopolitical tensions, the Russian-Ukraine conflict, and the Hamas/Israel war; the effects of steps that we could take to reduce operating costs; rising inflation and increased interest rates, which diminish capital market cash flow and borrowing power; our inability to sustain profitable sales growth, convert inventory to cash, or reduce our costs to maintain competitive prices for our products; circumstances or developments that may make us unable to implement or realize the anticipated benefits, or that may increase the costs, of our current and planned business initiatives; and those factors detailed by us in our public filings with the Securities and Exchange Commission (the “SEC”), including in Item 1A, Risk Factors, in our Annual Report on Form 10-K for the year ended June 30, 2023. In light of these risks and uncertainties, all of the forward-looking statements made herein are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by us will be realized. We undertake no obligation to update or revise any of the forward-looking statements contained herein.

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

LIGHTPATH TECHNOLOGIES, INC.
Condensed Consolidated Balance Sheets
(unaudited)
	December 31,			June 30,
Assets	2023			2023
Current assets:
Cash and cash equivalents	$	3,536,558		$	4,687,004
Restricted cash		2,345,644			2,457,486
Trade accounts receivable, net of allowance of $23,853 and $18,502		4,708,156			6,634,574
Inventories, net		7,520,444			7,410,734
Prepaid expenses and deposits		478,686			570,293
Other current assets		191,381			—
Total current assets		18,780,869			21,760,091

Property and equipment, net		16,361,049			12,810,930
Operating lease right-of-use assets		7,432,993			9,571,604
Intangible assets, net		4,519,544			3,332,715
Goodwill		6,764,127			5,854,905
Deferred tax assets, net		140,000			140,000
Other assets		66,007			65,939
Total assets	$	54,064,589		$	53,536,184
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,899,032		$	2,574,135
Accrued liabilities		1,990,114			662,242
Accrued payroll and benefits		1,456,777			1,499,896
Operating lease liabilities, current		1,123,276			969,890
Loans payable, current portion		2,138,775			1,023,814
Finance lease obligation, current portion		118,070			103,646
Total current liabilities		9,726,044			6,833,623

Deferred tax liabilities, net		474,395			465,000
Accrued liabilities, noncurrent		919,623			—
Finance lease obligation, less current portion		334,654			341,201
Operating lease liabilities, noncurrent		8,583,630			8,393,248
Loans payable, less current portion		326,507			1,550,587
Total liabilities		20,364,853			17,583,659

Commitments and Contingencies

Stockholders’ equity:
Preferred stock: Series D, $0.01 par value, voting;
500,000 shares authorized; none issued and outstanding		—			—
Common stock: Class A, $0.01 par value, voting;
44,500,000 shares authorized as of December 31, 2023 and June 30, 2023;
37,549,378 and 34,344,739 shares issued and outstanding		375,494			373,447
Additional paid-in capital		243,475,209			242,808,771
Accumulated other comprehensive income		741,301			606,536
Accumulated deficit		(210,892,268	)		(207,836,229	)
Total stockholders’ equity		33,699,736			35,952,525
Total liabilities and stockholders’ equity	$	54,064,589		$	53,536,184

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

LIGHTPATH TECHNOLOGIES, INC.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(unaudited)

	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2023			2022			2023			2022
Revenue, net	$	7,315,637		$	8,472,679		$	15,392,885		$	15,839,580
Cost of sales		5,147,316			5,248,334			10,892,858			10,381,323
Gross margin		2,168,321			3,224,345			4,500,027			5,458,257
Operating expenses:
Selling, general and administrative		2,858,457			3,030,653			5,519,625			5,668,826
New product development		607,747			466,163			1,247,636			1,016,044
Amortization of intangibles		485,446			281,271			766,717			562,542
Loss on disposal of property and equipment		—			2,742			—			2,742
Total operating expenses		3,951,650			3,780,829			7,533,978			7,250,154
Operating loss		(1,783,329	)		(556,484	)		(3,033,951	)		(1,791,897	)
Other income (expense):
Interest expense, net		(53,788	)		(81,241	)		(111,399	)		(151,611	)
Other income (expense), net		199,512			(1,336	)		204,915			25,881
Total other income (expense), net		145,724			(82,577	)		93,516			(125,730	)
Loss before income taxes		(1,637,605	)		(639,061	)		(2,940,435	)		(1,917,627	)
Income tax provision		76,058			55,000			115,604			157,134
Net loss	$	(1,713,663	)	$	(694,061	)	$	(3,056,039	)	$	(2,074,761	)
Foreign currency translation adjustment		259,973			671,125			134,765			(246,704	)
Comprehensive loss	$	(1,453,690	)	$	(22,936	)	$	(2,921,274	)	$	(2,321,465	)
Loss per common share (basic)	$	(0.05	)	$	(0.03	)	$	(0.08	)	$	(0.08	)
Number of shares used in per share calculation (basic)		37,501,683			27,172,226			37,466,714			27,121,583
Loss per common share (diluted)	$	(0.05	)	$	(0.03	)	$	(0.08	)	$	(0.08	)
Number of shares used in per share calculation (diluted)		37,501,683			27,172,226			37,466,714			27,121,583

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

LIGHTPATH TECHNOLOGIES, INC.

Condensed Consolidated Statements of Changes in Stockholders' Equity

(unaudited)

								Accumulated
	Class A				Additional			Other						Total
	Common Stock				Paid-in			Comprehensive			Accumulated			Stockholders’
	Shares		Amount		Capital			Income			Deficit			Equity
Balances at June 30, 2023		37,344,739	$	373,447	$	242,808,771		$	606,536		$	(207,836,229	)	$	35,952,525
Issuance of common stock for:
Employee Stock Purchase Plan		14,607		146		19,573			—			—			19,719
Exercise of Stock Options, RSUs & RSAs, net		14,482		145		(145	)		—			—			—
Issuance of common stock for acquisition of Visimid		81,610		816		149,184			—			—			150,000
Stock-based compensation on stock options, RSUs & RSAs		—		—		240,075			—			—			240,075
Foreign currency translation adjustment		—		—		—			(125,208	)		—			(125,208	)
Net loss		—		—		—			—			(1,342,376	)		(1,342,376	)
Balances at September 30, 2023		37,455,438	$	374,554	$	243,217,458		$	481,328		$	(209,178,605	)	$	34,894,735
Issuance of common stock for:
Exercise of Stock Options, RSUs & RSAs, net		93,940		940		(940	)		—			—			—
Stock-based compensation on stock options, RSUs & RSAs		—		—		258,691			—			—			258,691
Foreign currency translation adjustment		—		—		—			259,973			—			259,973
Net loss		—		—		—			—			(1,713,663	)		(1,713,663	)
Balances at December 31, 2023		37,549,378	$	375,494	$	243,475,209		$	741,301		$	(210,892,268	)	$	33,699,736

Balances at June 30, 2022		27,046,790	$	270,468	$	232,315,003		$	935,125		$	(203,789,358	)	$	29,731,238
Issuance of common stock for:
Employee Stock Purchase Plan		16,287		163		19,707			—			—			19,870
Exercise of Stock Options & RSUs, net		8,852		88		(88	)		—			—			—
Stock-based compensation on stock options & RSUs		—		—		284,598			—			—			284,598
Foreign currency translation adjustment		—		—		—			(917,829	)		—			(917,829	)
Net loss		—		—		—			—			(1,380,700	)		(1,380,700	)
Balances at September 30, 2022		27,071,929	$	270,719	$	232,619,220		$	17,296		$	(205,170,058	)	$	27,737,177
Issuance of common stock for:
Exercise of Stock Options, RSUs & RSAs, net		203,586		2,036		(2,036	)		—			—			—
Stock-based compensation on stock options, RSUs & RSAs		—		—		487,547			—			—			487,547
Foreign currency translation adjustment		—		—		—			671,125			—			671,125
Net loss		—		—		—			—			(694,061	)		(694,061	)
Balances at December 31, 2022		27,275,515	$	272,755	$	233,104,731		$	688,421		$	(205,864,119	)	$	28,201,788

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

LIGHTPATH TECHNOLOGIES, INC.
Condensed Consolidated Stateme

SEC Form 10-Q filed by LightPath Technologies Inc.