OPTX 10-K & 10-Q changes, risk factors and insider trading
Syntec Optics Holdings, Inc. (also OPTXW) · Nasdaq · Optical Instruments & Lenses · CIK 1866816 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Tariffs and trade restrictions could materially and adversely affect our business, results of operations, and financial condition.”
New heading “If we fail to maintain compliance with Nasdaq listing requirements, our securities could be delisted.”
Largest changes
“Syntec Optics’ common stock and warrants are listed on The Nasdaq Stock Market. Nasdaq listing standards require us to satisfy certain corporate governance and financial and liquidity criteria and to file periodic reports with the SEC in a timely manner. In 2025, we received notices from Nasdaq related to our failure to timely file periodic reports and related inquiries regarding certain current report filings. Although we submitted a compliance plan that was accepted by Nasdaq, we cannot assure you that we will remain in compliance with Nasdaq’s continued listing requirements in the future. …”see in full comparison
“If we fail to maintain compliance with Nasdaq listing requirements, our securities could be delisted.”see in full comparison
“Tariffs and trade restrictions could materially and adversely affect our business, results of operations, and financial condition.”see in full comparison
“Trade policy remains highly dynamic and uncertain, and additional tariffs, quotas, import restrictions, retaliatory trade measures, or other barriers could be imposed by the United States or foreign governments at any time. If we are unable to offset the effects of such measures through pricing actions, sourcing changes, operational efficiencies, or other mitigation strategies, our costs could increase and our supply chain could be disrupted. As a result, our sales, gross margins, profitability, and operating results could be materially adversely affected.”see in full comparison
Any failure to implement and maintain effective disclosure controls and procedures and internal control over financial reporting, including the identification of one or more material weaknesses, could cause investors to lose confidence in the accuracy and completeness of Syntec Optics’ financial statements and reports, which would likely have an adverse effect on the market price of Syntec Optics’ common stock. In addition, Syntec Optics could be subject tosee in full comparisonsanctionssanctions, inquiries, orinvestigationsother actions bythe stock exchange on which Syntec Optics’ common stock is listed,Nasdaq, theSECSEC, and other regulatory authorities.
“On February 20, 2026, the United States Supreme Court ruled that the International Emergency Economic Powers Act (“IEEPA”) does not authorize the President to impose tariffs, invalidating certain tariffs previously imposed under that authority. However, tariffs imposed pursuant to other statutory authorities, including Sections 301 and 232 of the Trade Act, remain in effect. In addition, the U.S. …”see in full comparison
Full comparison: every changed paragraph (9)
Tariffs and trade restrictions could materially and adversely affect our business, results of operations, and financial condition.
Changes in U.S. and foreign trade policies have resulted in, and may continue to result in, the imposition of tariffs, import and export restrictions, trade barriers, and other measures that increase the cost of raw materials, components, and finished goods. In 2025, the U.S. administration announced significant tariff increases on imports from various countries. Although the impact of these measures has not been material to date because we have generally been able to pass increased costs on to customers, there can be no assurance that we will be able to continue to do so in the future.
On February 20, 2026, the United States Supreme Court ruled that the International Emergency Economic Powers Act (“IEEPA”) does not authorize the President to impose tariffs, invalidating certain tariffs previously imposed under that authority. However, tariffs imposed pursuant to other statutory authorities, including Sections 301 and 232 of the Trade Act, remain in effect. In addition, the U.S. administration has announced new tariff measures under alternative legal authorities, including a temporary import surcharge under Section 122 of the Trade Act, which is subject to statutory duration limits and may be extended only through congressional action.
Trade policy remains highly dynamic and uncertain, and additional tariffs, quotas, import restrictions, retaliatory trade measures, or other barriers could be imposed by the United States or foreign governments at any time. If we are unable to offset the effects of such measures through pricing actions, sourcing changes, operational efficiencies, or other mitigation strategies, our costs could increase and our supply chain could be disrupted. As a result, our sales, gross margins, profitability, and operating results could be materially adversely affected.
Syntec
Optics is a “controlled company” as defined under the Nasdaq rules because Mr. Kapoor, chairman of the
Syntec Optics
Board, owns more than 50% of the total voting power of all issued and outstanding Syntec Optics Class A Shares.Shares, Forand sotherefore, as
long as Syntec Optics remains a controlled company under that definition, it is permitted to elect to rely, and may rely, on certain
exemptions from Nasdaq corporate governance rules.
Any
failure to implement and maintain effective disclosure controls and procedures and internal control over financial reporting, including
the identification of one or more material weaknesses, could cause investors to lose confidence in the accuracy and completeness of Syntec
Optics’ financial statements and reports, which would likely have an adverse effect on the market price of Syntec Optics’
common stock. In addition, Syntec Optics could be subject to sanctionssanctions, inquiries, or investigationsother actions by the stock exchange on which Syntec Optics’
common stock is listed,Nasdaq, the SECSEC, and other regulatory authorities.
If we fail to maintain compliance with Nasdaq listing requirements, our securities could be delisted.
Syntec Optics’ common stock and warrants are listed on The Nasdaq Stock Market. Nasdaq listing standards require us to satisfy certain corporate governance and financial and liquidity criteria and to file periodic reports with the SEC in a timely manner. In 2025, we received notices from Nasdaq related to our failure to timely file periodic reports and related inquiries regarding certain current report filings. Although we submitted a compliance plan that was accepted by Nasdaq, we cannot assure you that we will remain in compliance with Nasdaq’s continued listing requirements in the future. If Nasdaq delists our securities, we could face significantly reduced liquidity and trading volume, increased volatility, a loss of analyst coverage, reduced ability to access capital markets on acceptable terms (or at all), and a decline in the market price of our securities. Delisting could also trigger defaults or other adverse consequences under certain agreements, increase the costs and burdens of regulatory compliance, and impair our ability to attract and retain employees and business partners.
The
beneficial ownership of Common Stock is based on 36,868,26636,920,226 shares of Common Stock issued and outstanding. Mr. Kapoor owns 30,631,090
shares of Common Stock.Stock, representing 83% of the shares issued and outstanding.
Management's Discussion & Analysis (MD&A)
New heading “Covenant Compliance and Amendments”
New heading “Shareholder Financing”
New heading “Capital Requirements”
Removed heading “The Business Combination”
Removed heading “SYNTEC OPTICS HOLDINGS, INC.”
Largest changes
“Significant factors affecting the management of our ongoing cash requirements are the adequacy of available bank lines of credit and our ability to attract long-term capital with satisfactory terms. The sources of our liquidity are subject to all of the risks of our business and could be adversely affected by, among other factors, risks associated with events outside of our control, such as economic consequences of global pandemics and geopolitical conflicts, monetary policy changes in the U.S. …”see in full comparison
“During 2024 and 2025, the Company experienced periods of non-compliance with certain financial covenants under its Credit Agreement. The Company worked constructively with its lender and obtained amendments and waivers, including a written waiver dated November 12, 2025 related to covenant defaults as of September 30, 2025.”see in full comparison
“Liquidity describes the ability of a company to generate sufficient cash flows to meet the cash requirements of its business operations, including working capital needs, debt service, acquisitions, contractual obligations and other commitments. We assess liquidity in terms of our cash flows from operations and their sufficiency to fund our operating and investing activities. As of December 31, 2024, our principal sources of liquidity were cash totaling $0.6 million and a line of credit with $3.8 million available.”see in full comparison
Full comparison: every changed paragraph (46)
In
2023the andlast 2024,three years Syntec Optics launched low weight night vision optics and hybrid light-weight magnifiers and
thermal clips in
the defense end market. Syntec Optics also announced biomedical mirrors for sensing in the medical end
market. Rounding out new
product launches, in the communication end market, Syntec Optics launched microlens arrays and low
earth satellite
optics.
The
Business Combination
On
November 7, 2023, or the Closing Date, we consummated the Business Combination. Pursuant to the Business Combination Agreement, Merger
Sub merged with and into Legacy Syntec, with Legacy Syntec surviving the merger and becoming a wholly-owned direct subsidiary of OmniLit.
Thereafter, Merger Sub ceased to exist and OmniLit was renamed Syntec Optics Holdings, Inc. Legacy Syntec is deemed the accounting acquirer,
which means that Legacy Syntec’s financial statements for previous periods will be disclosed in our future periodic reports filed
with the SEC. Following the Business Combination, our business is the business of Legacy Syntec.
The
Business Combination was accounted for as a reverse recapitalization. Under this method of accounting, OmniLit was treated as the acquired
company for financial statement reporting purposes.
We
currently rely on strategically selected electronics, highly engineered
polymers and aluminum manufacturers primarily located in the United States
to manufacture our highly specialized optic and photonics enabled
components and sub-components, and we intend to continue to rely on
these suppliers going forward. Our close working relationships with
our Unites States based suppliers, is reflected in our ability to) (x)
increase our purchase order volumes (qualifying us for related volume-based
discounts), and (y) orderordering and receivereceiving delivery of raw materials
in anticipation of required demand, which has helped us moderate increased supply-related
costs associated with inflation and to avoid potential
shipment delays. To mitigate against potential adverse production events, we opted
to buildincrease our inventory of key raw materials. In connection
with these stockpiling activities, we experienced an increase in prepaid
inventory compared to prior periods as suppliers required upfront
deposits in response to supply chain disruptions.
Net
sales decreased by $1$0.4 million, or 3.4%1.3% to $28.4$28.1 million for the year ended December 31, 2024,2025, as compared to $29.4$28.5 million for the
year year
ended December 31, 2023.2024. DecreasesIncreases in Consumer industry ($0.6$1.1 million),million, Defense industry ($1.0$0.3 million),million, and Medical industry ($0.4$1.1 million)
were partially offset by a $1.0$2.9 million increase
decrease in the communications industry.
Cost of goods sold decreased by $1.2 million, or 5%, to $21.5 million for the year ended December 31, 2025, as compared to $22.7 million for the year ended December 31, 2024. This decrease was primarily due to reduction in use of subcontractors ($0.8 million), reduction in repairs and maintenance ($0.1 million), materials decrease ($0.5 million) partially offset by increases in utilities ($0.2 million).
Cost of goods sold
increased by $1.2 million, or 6%, to $22.7 million for the year ended December 31, 2024, as compared to $21.5 million
for the year ended December 31, 2023. This increase was primarily due to payroll costs (up $1.0 million) and material/ subcontractor
expenses (up $0.2 million). The increases in labor were driven by additions to metrology staffing as well as direct labor for increased parts
production.
Gross
profit profit
decreasedincreased by $2.2$0.8 million, or 28%,15%, to $5.7$6.5 million for the year ended December 31, 2024,2025, as compared to $7.9$5.7 million for the year
ended ended
December 31, 2023.2024. This decreaseincrease was primarily due to ana increasedecrease in cost of goods soldsold, aspartially offset by a percentage$0.4 ofmillion revenue.decrease
in sales.
General and administrative
administrative expenses increaseddecreased by $1.9approximately $1.3 million, or 30%,15%, to $8.3$7.0 million for the year ended December 31, 2024,2025, as compared to $6.4$8.3 million
million for the year ended December 31, 2023.2024. This increasedecrease was primarily due to increasesdecreases in salarieswages and wagescommissions (up $1.0 million),
stock-based compensation to non-employee directors (up $0.5$0.6 million), insurancedecreases
in costsR&D (up $0.3$0.4 million), researchdecrease andin developmentbusiness expensesinsurance (up $0.1$0.2 million),
and buildingother maintenancecumulative changes of (up $0.1 million).
Total
Other IncomeExpenses
Other
expenses income (expense)
decreasedincreased by $0.1$0.4 million, or 12% to ($0.4)$0.8 million for the year ended December 31, 2024,2025, as compared to other incomeexpense of ($0.3)$0.4 million
million for the year ended December 31, 2023.2024. TheThere was a gain from the sale of machinery and equipment wasin 2024 of $0.3 million, offsetwhich bydid highernot
exist interest
expensein of $0.1 million and elevated rates for the debt facilities.2025.
Income tax benefit decreased by $1.0 million, to a provision of $0.4 million for the year ended December 31, 2025, as compared to a benefit of $0.5 million for the year ended December 31, 2024, primarily due to reduction of valuation. Refer to Note 9, Income Taxes, for a detailed calculation and explanation for the reduction.
Income
tax expense (benefit) decreased by $0.2 million, or 28%, to ($0.5) million for the year ended December 31, 2024, as compared to ($0.7)
million for the year ended December 31, 2023, primarily due to reduced taxable income.
Net Income (
Loss)
Net income
Loss decreased by $4.5
$0.7 million to ($2.5)$1.8 million for the year ended December 31, 2024,2025, as compared to $2.0$2.5 million for the year ended December
31, 2023.2024. This
change was primarily due to a decrease in sales of $1.0$0.4 million, an increasedecrease in cost of goods sold of $1.2 million, an increasea
decrease in general and administrative
expenses of $1.9$1.2 million, an increase in other income (expense)expenses of $0.1$0.4 million, and a decrease in benefit
from provision for income taxes of $0.2$1.0 million.
Overview
The Company’s primary sources of liquidity are cash generated from operations and borrowings under its revolving credit facility with M&T Bank. The Company uses cash to fund working capital requirements, capital expenditures, and debt service obligations.
As of December 31, 2025, the Company had $6,763,863 outstanding under its $7.5 million revolving credit facility, providing approximately $736,000 of remaining availability, subject to borrowing base and covenant compliance requirements.
The revolving credit facility matures in November 2026.
Covenant Compliance and Amendments
During 2024 and 2025, the Company experienced periods of non-compliance with certain financial covenants under its Credit Agreement. The Company worked constructively with its lender and obtained amendments and waivers, including a written waiver dated November 12, 2025 related to covenant defaults as of September 30, 2025.
In connection with the November 2025 waiver, the Company:
Effective December 31, 2025, the Company entered into a Second Amendment to its Credit Agreement reflecting the reduced commitment. The amendment did not modify the maturity date or covenant thresholds applicable for 2026.
As of December 31, 2025, and through the date of this filing, the Company was in compliance with all financial covenants under its Credit Agreement. Management expects to remain in compliance with the terms of the Credit Agreement for the foreseeable future.
Shareholder Financing
To facilitate repayment of term and equipment debt, the Company entered into a subordinated term note with its majority stockholder in the principal amount of $1,268,732.49. The note matures on October 31, 2028 and is subordinated to the Company’s obligations under its Credit Agreement.
The subordination agreement restricts prepayments and limits interest payments without lender consent, thereby preserving liquidity within the Company.
Capital Requirements
The Company expects that cash generated from operations together with availability under its revolving credit facility will be sufficient to fund operations, working capital needs, and contractual obligations for at least the next twelve months.
Liquidity
describes the ability of a company to generate sufficient cash flows to meet the cash requirements of its business operations, including
working capital needs, debt service, acquisitions, contractual obligations and other commitments. We assess liquidity in terms of our
cash flows from operations and their sufficiency to fund our operating and investing activities. As of December 31, 2024, our principal
sources of liquidity were cash totaling $0.6 million and a line of credit with $3.8 million available.
Significant
factors affecting the management of our ongoing cash requirements are the adequacy of available bank lines of credit and our ability
to attract long-term capital with satisfactory terms. The sources of our liquidity are subject to all of the risks of our business and
could be adversely affected by, among other factors, risks associated with events outside of our control, such as economic consequences
of global pandemics and geopolitical conflicts, monetary policy changes in the U.S. and other countries and their impact on the global
financial markets, supply chain disruptions and electronics and other material shortages, a decrease in demand for our products, our
ability to integrate current and future acquisitions, deterioration in certain financial ratios, availability of borrowings under our
revolving credit facility, and other market changes in general. See “Risks Relating to Syntec Optics’ Financial Position
and Capital Requirements” included in Item 1A.
SYNTEC OPTICS HOLDINGS, INC.
UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
Net cash provided by operating activities was $0.7 million for the year ended December 31, 2025, as compared to net used in operating activities of $0.9 million for the year ended December 31, 2024.
Net
cash used in operating activities was ($0.9) million for the year ended December 31, 2024, as compared to net cash provided by operating
activities of $2.8 million for the year ended December 31, 2023.
The
primary drivers for the year-over-year change include aan decrease improvement
in net incomeloss of $(4.5)$0.7 million and additional funds provided of
$0.8 $0.9 million in balance sheet accounts including: accounts payablepayable, accrued
expense, and accrued expense changes of $(2.3) million, changes in
prepaid expenses of $(0.6)$0.8 million, and changes in federal tax payable of $(0.5)$0.6 million partially offset bymillion, changes in accountsdeferred income tax
receivable of $2.0$1.0 million, changes in inventory of $1.0$0.3 million, and changes from prior year gain on asset disposal of $0.3 million, partially offset
by changes in deferredaccounts income taxesreceivable of $0.7$(1.7) millionmillion, and other
operating asset and liabilitysmaller changes of $0.5$(0.4) million including reduced grant revenue, reserves and allowances.million.
Net
cash used in investing activities was $0.9$0.6 million for the year ended December 31, 2024,2025, as compared to $1.9$0.9 million for the year ended
ended December 31, 2023.2024. The net cash used in investing activities decreased primarily due to ana decrease in capital expenditures of
$0.7 $0.6 million
in 2025 compared to 2024, and an increase in proceeds from sale of equipment of $0.3 million.million 2024, with no such sale of equipment talking place in 2025.
Net
cash providedused byin financing activities was $0.3 million for the year ended December 31, 2024.2025. Net cash provided by financing activities was
was $0.8$0.3 million for the year ended December 31, 2023.2024.
The
primary drivers for the year-over-year change include aan decreaseincrease in borrowings of debt obligations of $0.6$0.2 million, an increase in
repayment of finance lease obligations of $0.1 million, an increase in net repaymentsborrowings on Line of credit of $0.4$0.8 million, aoffset decrease
inby fundsan from OLIT Trust of $1.9 million, and a decreaseincrease in repayments on debt obligations of $2.5$1.3
million, an increase in repayment of finance lease obligations of $0.2 million.
In November
2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 clarifies
or improves financial reporting by requiring disclosure of incremental segment information. The amendments require disclosure, on an
annual and interim basis for all public entities, of significant segment expenses included in segment profit or loss, an amount and description
of “other segment items” included in segment profit or loss, and an explanation of how reported segment profit or loss is
assessed and allocated. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023,
and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. See note 18 for more details.
In December 2023, the
FASB issued Accounting Standards Update (“ASU ”)
2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information
about about
a reporting entity’s effective tax rate reconciliation, as well as information related to income taxes paid to enhance the
transparency transparency
and decision usefulness of income tax disclosures. This ASU will beis effective for the annual period endingended December 31, 2025.2025 and
ASU 2023-09 willshould be applied prospectivelyon a prospective basis with the option forto retrospectiveapply applicationthe standard retrospectively. Early adoption is permitted.
On January 1, 2025, the Company adopted the provisions of ASU 2023-09 on a prospective basis, and the required disclosures have been included
in this Annual Report on Form 10-K for allthe prioryear periodsended presented.
December 31, 2025. The Companyadoption isof currentlyASU evaluating2023-09 thedid not have a material impact of adopting this guidance on
the Company’s current financial position,statements resultsincluded ofin this Annual Report on Form 10-K but did result in additional disclosures
operationsin orthe financialincome statementtax disclosures.footnote.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326). The amendments in this ASU provide that in developing reasonable and supportable forecasts as part of estimating expected credit losses, all entities may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. The amendments in this ASU are effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods with updates to be applied on a prospective basis. The Company is currently evaluating the impact of ASU 2025-05 on its consolidated financial statements.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies the scope of interim reporting and improves the structure of required interim disclosures. The ASU specifies the form and content of interim financial statements, provides a comprehensive list of required interim disclosures, and introduces a disclosure principle requiring entities to describe material events occurring after the most recent annual reporting period. The ASU does not change the fundamental nature or extent of current interim reporting requirements.
ASU 2025-11 is effective for public business entities for interim periods within fiscal years beginning after December 15, 2027, and for all other entities after December 15, 2028, with early adoption permitted. The amendments in this update are to be applied prospectively. The Company is currently evaluating the impact of this guidance on its consolidated financial statements and disclosures.
In December 2025, the FASB issued ASU No. 2025-12, Codification Improvements. The ASU addresses thirty-three items, representing the changes to the Codification that (1) clarify, (2) correct errors, or (3) make minor improvements. Generally, the amendments in this Update are not intended to result in significant changes for most entities. The ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2026. The adoption method of this ASU may vary, on an issue-by-issue basis. Early adoption is permitted. We are currently evaluating the provisions of this ASU and do not expect this ASU to have a material impact on our consolidated financial statements.
What changed in the latest 10-Q
Risk Factors
The Company’s risk factors are described in Part I, Item 1A, “Risk Factors”, of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025. The risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial position, or future results of operations. The risk factors should be read together with, the risk factors described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Recent Developments”
New heading “FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025”
Largest changes
“Subsequent to March 31, 2026, the Company completed a public equity offering resulting in aggregate net proceeds of approximately $21.5 million, including the underwriter’s exercised over-allotment option. The Company utilized a portion of the proceeds to repay the outstanding balance under its revolving line of credit with M&T Bank to zero, which management expects will reduce future cash interest expense. …”see in full comparison
“As of March 31, 2026, the Company had $6,763,863 outstanding under its $7.5 million revolving credit facility, providing approximately $736,137 of remaining availability, subject to borrowing base and covenant compliance requirements. The revolving credit facility matures in November 2026.”see in full comparison
“The Company’s primary sources of liquidity are cash generated from operations and borrowings under its revolving credit facility with M&T Bank. The Company uses cash to fund working capital requirements, capital expenditures, and debt service obligations.”see in full comparison
“In the second quarter of 2026, the Company’s common stock was added to the Russell 3000® Index. Management believes inclusion in the index may increase the Company’s visibility among institutional investors and enhance trading liquidity.”see in full comparison
Full comparison: every changed paragraph (33)
In
the last three years Syntec Optics launched low weight night vision optics and hybrid light-weight magnifiers and thermal clips in the
defense end market. SyntecMore Opticsrecently, alsowe announcedhave biomedical mirrors for sensing inentered the medicalAI-driven endmilitary market.augmented Roundingreality out(AR) newwearables, productenhancing launches,situational awareness
infor the communication end market, Syntec Optics launched microlens arrays and low earth satellite optics.warfighters.
Syntec Optics also announced biomedical mirrors for sensing in the medical end market. Rounding out new product launches, in the communication end market, Syntec Optics launched microlens arrays and low earth satellite optics. This includes incorporating its high-precision photonics into critical orbital safety components, enhancing collision avoidance in space, a growing concern as space traffic continues to increase.
Recent Developments
In the second quarter of 2026, the Company’s common stock was added to the Russell 3000® Index. Management believes inclusion in the index may increase the Company’s visibility among institutional investors and enhance trading liquidity.
Comparisons
for the Three and Six Months Ended MarchJune 31,30, 2026 and 2025
The
following tabletables setsset forth our results of operations for the three and six months ended MarchJune 31,30, 2026 and 2025, respectively. This data
should should
be read together with our financial statements and related notes included elsewhere in this Quarterly Report and is qualified
in its
entirety by reference to such financial statements and related notes.notes .
Net sales increased by $1.7 million, or 26%, to $8.3 million for the three months ended June 30, 2026, as compared to $6.6 million for the three months ended June 30, 2025. This increase was due to increases across all four of our served industries, as detailed in Note 3 to the financial statements. For the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, sales were up from $13.6 million in 2025 to $14.8 million in 2026. Sales were up significantly in three of the four industries served, while year to date sale in the medical industry were down. This decrease in medical was due to a shipping hold to one particular customer in the first quarter, as described in our first quarter 10-Q. Shipments to that customer were back to normal in the second quarter.
Net
sales decreased by $0.6 million, or 8%, to $6.5 million for the three months ended March 31, 2026, as compared to $7.1 million for the
three months ended March 31, 2025. This decrease was primarily due to decreases in medical markets of $1.0 million, partially offset
by an increase in the consumer market of $0.4 million.
Cost
of revenue increased by $0.8$1.1 million, to $5.6$6.1 million for the three months ended MarchJune 31,30, 2026, as compared to $4.8$5.0 million for the three
threemonths ended June 30, 2025. This increase was generally proportionate to the increase in revenue, for the same period. Cost of revenue
increased by $2.0 million, to $11.7 million for the six months ended MarchJune 31,30, 2026, as compared to $9.7 million for the six months ended
June 30, 2025. This increase was primarily due to an increase in material costs, particularly for aluminum.
Gross profit increased by 34%, to $2.1 million for the three months ended June 30, 2026, as compared to $1.6 million for the three months ended June 30, 2025. As a percentage of revenue, this increase was proportionate to the increases in revenue and cost of goods sold for the comparison periods. For the six months ended June 30, 2026 compared to the same six-month period in 2025, gross profits were down from $3.9 million in 2025 to $3.1 million in 2026. The decrease was primarily due to the increase in material cost as described above, combined with the lower performance in the first quarter.
Gross
profit decreased by 58%, to $1.0 million for the three months ended March 31, 2026, as compared to $2.3 million for the three months
ended March 31, 2025. This decrease was primarily due to the decrease in revenue and the increase in costs of goods sold, as detailed above.
General
and administrative expenses remained flat, decreasingincreased slightly by 2%4% for the quarter ended MarchJune 31,30, 2026, as compared to the same period
for 2025. For
the six months ended June 30, 2026 as compared to the same six month period in 2025, these expenses remained flat, increasing just 1%.
Other expenses improved by $0.1 million for the three months ended June 30, from an expense of $0.2 million for the three months ended June 30, 2025, to an expense of $0.1 million for the three months ended June 30, 2026. For the six months ended June 30, expenses decreased from $0.4 million in 2025 to $0.2 million in 2026. In both comparison periods, the improvement was primarily due to the debt reductions and the increase in interest earned on our larger cash balance.
Other
expenses improved to an expense of $0.1 million for the three months ended March 31, 2026, from an expense of $0.2 million for the
three months ended March 31, 2025.
Income
tax expense (benefit) remained flat, with no material change when comparing the three and six months ended MarchJune 31,30, 2026 and 2025.
Net
Income (lossLoss) Income
We
experienced a lossincome of $0.9$0.3 million for the three months ended MarchJune 31,30, 2026, as compared to incomea loss of $0.3 million for the same three-month
three month period ended in 2025. This increaseturnaround infrom neta loss to positive income, was primarily due to athe declineimprovement in salesgross profit as detailed
above. For the six-month period ended June 30, 2026, we experienced a loss of $0.6 million, andas ancompared increaseto nearly zero earnings for the
same period in cost2025. This decrease in year-to-date earnings in 2026 was attributable to the significant loss experienced in the first
quarter of goods2026, soldpartially ofoffset $0.8by million.the positive earnings in the second quarter.
The
table below presents our adjusted EBITDA, reconciled to net income for the three and six months ended MarchJune 31,30, 2026 and 2025.
InFOR
THE theTHREE quarters
endedAND MarchSIX 31,MONTHS ENDED JUNE 30, 2026 andAND 2025:
In the quarters ended June 30, 2026 and 2025:
The Company continues to generate positive cash flows from operations.
The
Company’s primary sources of liquidity are cash generated from operations and borrowings under its revolving credit facility with
M&T Bank. The Company uses cash to fund working capital requirements, capital expenditures, and debt service obligations.
As
of March 31, 2026, the Company had $6,763,863 outstanding under its $7.5 million revolving credit facility, providing approximately $736,137
of remaining availability, subject to borrowing base and covenant compliance requirements. The revolving credit facility matures
in November 2026.
On
April 30, 2026, subsequent
to the end of the quarter, the Company completed an underwritten public offering of 2,857,142 shares of its common stock at a public offering price
price of $7.00 per share, generating gross proceeds of approximately $20.0 million and net proceeds of approximately $18.6 million. The
Company intends to use the proceeds to support working capital, capital expenditures, and to optimize its capital structure, including
potential repayment of indebtedness.
The Company used a portion of the proceeds from both of these transactions to repay some of its indebtedness, approximately $6.8 million, and proceeded to close out its existing line of credit.
This
financing significantly enhances the Company’s liquidity position and financial flexibilityflexibility, and is
expected to support ongoing
operations, growth initiatives, and strategic investments.
The
Company expects that cash generated from operations together with availability under its revolving credit facility and the proceeds
received from the public stock offering, will be sufficient
to fund operations, working capital needs, and contractual obligations
for at least the next twelve months.
Subsequent to March 31, 2026, the Company completed a public equity
offering resulting in aggregate net proceeds of approximately $21.5 million, including the underwriter’s exercised over-allotment
option. The Company utilized a portion of the proceeds to repay the outstanding balance under its revolving line of credit with M&T
Bank to zero, which management expects will reduce future cash interest expense. The Company’s $7.5 million revolving credit facility
remains available through June 30, 2027, providing additional financial flexibility and available liquidity for working capital requirements,
capital expenditures, organic growth initiatives and potential strategic opportunities. In addition, management continues to implement
operational efficiency and cost reduction initiatives intended to improve gross profit and EBITDA in future periods.
Cash
Flow — ThreeSix Months Ended MarchJune 31,30, 2026 and 2025
FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
Net
cash provided by operating activities was $0.5$0.2 million for the threesix months ended MarchJune 31,30, 2026, as compared to net cash provided by operating
activities of $0.3$0.1 million
for the threesix months ended MarchJune 31,30, 2025. The primary drivers of theoperating changescash flows for the threesix month periodmonths ended
June March
31,30, 2026 includeincluded net changes from operating assetsdepreciation of $0.6$1.1 million, changesa fromdecrease depreciationin andaccounts amortization,receivable stock-basedof compensation$1.2 million, an increase in deferred revenue
and allowance of $0.7 million, and a decrease in inventory of $0.3 million. In addition, stock-based compensation, amortization of debt issuance costs,
and changes in allowance for expected credit losses contributed $0.3 million in aggregate. These favorable items were partially offset
by bya net loss of $0.9$0.6 million.million and a decrease in accounts payable and accrued expenses of $0.4 million..
Net
cash used in investing activities
was $0.3$1.1 million for the threesix months ended MarchJune 31,30, 2026, as compared to net cash used in investing
activities of $0.2$0.6 million for
the threesix months ended MarchJune 31,30, 2025. The net cash used in investing activities increased primarily due
to the purchase of atwo single
machinelarge machines for approximately $0.4$0.5 million relatedand to$0.3 amillion neweach, customerplus inseveral 2026smaller that did not take place in 2025.purchases.
Net
cash provided by financing
activities was $0.1$14.6 million for the threesix months ended MarchJune 31,30, 2026, as compared to net cash usedprovided inby financing
activities of $0.1$0.2 million
for the threesix months ended MarchJune 31,30, 2025. The primary driver of this change was the increaseaforementioned inpublic stock
offering, generating $21.4 million net, partially offset by the line of credit paydown of $6.8 million, and other debt borrowings from a related partyactivity
intotaling the first quarter of 2026 of $0.2$0.1 million.
OPTX insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 1 Form 4 filing (1 insider, 2 trade dates, 8,681 shares, about $79.9K) and open-market sales in 0 filings. Net open-market shares: 8,681 (purchases minus sales); net value about $79.9K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-18 | Kapoor Alok |
Gift | 1,000,000 | — | — |
| 2026-08-19 | Manzone Albert |
Open-market purchase | 3,681 | $8.12 | $29.9K |
| 2026-04-14 | Manzone Albert |
Open-market purchase | 5,000 | $10.00 | $50.0K |
Well-known investors holding OPTX (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Millennium Management (Israel Englander) | 2026-06-30 | 30,774 | $383.1K | 0.0% | Reduced 15% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 14,113 | $99.2K | — | Sold out |