3. Acquisitions

On January 20, 2026, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”), by and among the Company, AML, a Delaware limited liability company and wholly-owned subsidiary of the Company (“Buyer”), Amorphous Materials, Inc., a Texas corporation (“Seller”) and other parties thereto, pursuant to which, subject to the terms and conditions set forth in the Asset Purchase Agreement, Buyer agreed to acquire substantially all of the assets (collectively, the “Assets”) and assume and acquire certain of the rights and liabilities of Seller (collectively, the “Liabilities” and such acquisition of Assets and assumption of the Liabilities together, the “Transaction”) relating to Seller’s business of compounding and melting a broad range of Chalcogenide glasses for third-party manufacturers. The Transaction closed on January 21, 2026 (the “AML Acquisition Date”).

Aggregate consideration payable by the Company to Seller under the Asset Purchase Agreement in connection with the Transaction will not exceed $10.0 million and consists of (i) a cash payment of $7.0 million that was paid at closing (the “Cash Consideration”) and (ii) contingent consideration that will not exceed $3.0 million (the “Contingent Consideration”). The Contingent Consideration, if earned, is payable in shares of the Company's Class A common stock, $0.01 par value, ("Common Stock"), to be issued in up to six tranches of $500,000 each divided by the LPTH Stock Price (as calculated pursuant to the Asset Purchase Agreement) upon the achievement of certain milestones set forth in the Asset Purchase Agreement (each, a "Contingent Consideration  Payment").

We accounted for the acquisition of AML using the acquisition method of accounting, which required us to measure identifiable assets acquired and liabilities assumed in the acquiree at their fair values as of the AML Acquisition Date, with the excess of the consideration transferred over those fair values recorded as goodwill.

As of January 20, 2026, Seller satisfied the first milestone contemplated by the Contingent Consideration Payments and received an aggregate of 39,897 shares of Class A Common Stock (or approximately $544,000 at fair value, determined by multiplying the number of shares issued by the fair value of the Class A Common Stock on the AML Acquisition Date). The remaining estimated potential earnout was accrued based on a third-party valuation and was recorded in Accrued liabilities based on its fair value as of the AML Acquisition Date. On March 10, 2026 and June 4, 2026 following the achievement of additional milestones, an additional 43,621 and 30,838 shares of Class A Common Stock were issued, respectively, (or approximately $483,000 and $543,000 at fair value as of the issuance dates, respectively). Fair value adjustments of $0.7 million for the year  June 30, 2026 are included in “Change in fair value of acquisition liabilities” in the accompanying Consolidated Statement of Comprehensive Income (Loss). The remaining potential earnout is estimated at $1.4 million and is included in Accrued liabilities in the accompanying Consolidated Balance Sheet as of June 30, 2026.

As of the AML Acquisition Date, the preliminary fair value of the aggregate consideration was approximately $9.2 million which consisted of (i) the Cash Consideration, (ii) 39,897 shares of Class A Common Stock (or approximately $544,000 at fair value, determined by multiplying the number of shares issued by $13.64 per share, which was the closing price on the AML Acquisition Date), and (iii) potential earnout consideration subject to achievement of five additional technical milestones, as defined in the Asset Purchase Agreement. As of the AML Acquisition Date, the fair value of consideration transferred consisted of the following:

We determined the fair value of assets acquired and liabilities assumed by using available market information and various valuation methods that require judgement related to estimates. Our preliminary fair value estimates and assumptions to measure the assets acquired and liabilities assumed were subject to change as we obtained additional information during the measurement period. We completed our accounting for the acquisition during the fiscal quarter ended June 30, 2026. The following table summarizes the allocation of the fair value of consideration transferred to assets acquired and liabilities assumed as of the AML Acquisition Date and the adjustments recognized during the measurement period:

Measurement period adjustments include fair value adjustments during the fiscal quarter ended June 30, 2026, related to accrued liabilities for employee benefits. The net impact of the aforementioned adjustments were offset by a net working capital adjustment, resulting on no change to goodwill.

Intangible assets – All intangible assets acquired in the acquisition of AML are subject to amortization. The fair value of identifiable intangible assets acquired as of the AML Acquisition Date is as follows:

Goodwill – The $5.6 million of goodwill recognized is attributable to AML’s assembled workforce and expected synergies related to the expansion of our infrared glass portfolio and manufacturing capabilities. The acquired goodwill is expected to be deductible for Federal income tax purposes. See Note 7, Goodwill and Intangible Assets, in these Notes to the accompanying Consolidated Financial Statements for further information.

The Company’s Consolidated Financial Statements reflect the financial results of AML beginning on the AML Acquisition Date. Revenue generated by AML from the AML Acquisition date through June 30, 2026 is approximately $2.2 million and is included in our infrared components product group, with a net loss of $0.2 million, including amortization of intangible assets.

For the year ended June 30, 2026, we incurred approximately $0.3 million in acquisition costs which are included in the accompanying Consolidated Statements of Comprehensive Income in the line item entitled “Selling, general and administrative.”

Unaudited consolidated pro forma information is provided below, in combination with the acquisition of G5 Infrared.

G5 Infrared

On February 18, 2025 (the “G5 Acquisition Date”), the Company acquired G5 Infrared pursuant to a Membership Interest Purchase Agreement (the “G5 MIPA”) by and among the Company, G5 Infrared, the G5 Infrared members through the purchase from the members thereof of all of the issued and outstanding membership interests of G5 Infrared (collectively, the “Sellers”), and Kenneth R. Greenslade, solely in his capacity as Sellers’ Representative.

G5 Infrared is a vertically-integrated manufacturer of infrared camera systems and imaging solutions, and also provides infrared coatings. G5 Infrared operates from a manufacturing facility in Hudson, New Hampshire. The Company acquired G5 Infrared to expand the Company’s portfolio to include cooled infrared cameras.

Net assets and results of operations of G5 Infrared are reflected in our financial results commencing on the G5 Acquisition Date. Revenue generated by G5 Infrared is included in our infrared and assemblies and modules product groups.

We accounted for the acquisition of G5 Infrared using the acquisition method of accounting, which required us to measure identifiable assets acquired and liabilities assumed in the acquiree at their fair values as of the G5 Acquisition Date, with the excess of the consideration transferred over those fair values recorded as goodwill.

The fair value of the aggregate consideration was approximately $27.1 million which consisted of (i) $20.3 million in cash, (ii) 1,972,501 shares of the Company’s Class A Common Stock and (iii) potential earnout consideration paid annually in fiscal years 2026 and 2027 subject to achievement of certain revenue and EBITDA targets set forth in the G5 MIPA. As of the G5 Acquisition Date, the preliminary estimate of fair value of consideration transferred consisted of the following:

The fair value of the equity portion of the consideration was determined by multiplying the number of shares issued, 1,972,501, by the fair value of the Class A Common Stock on the G5 Acquisition Date, which was $2.47. The initial cash consideration at closing was subject to a net working capital adjustment, which was settled in June 2025. The G5 MIPA also included a provision for a clawback amount if G5 Infrared’s actual revenue for the 2024 calendar year was less than $17.3 million. This clawback amount was settled in June 2025 and is reflected in the determination of the purchase price.

Earnout payments of an aggregate of up to $23.0 million of additional consideration may be paid annually in fiscal years 2026 and 2027 subject to achievement of certain minimum EBITDA and revenue targets for the one and two-year periods beginning on the first full calendar month commencing after the G5 Acquisition Date, as set forth in the G5 MIPA. If the targets are achieved during the respective periods, LightPath will (i) issue an aggregate number of shares of Class A Common Stock equal to 30% of the earnout payment divided by the average close price for the ten trading days immediately prior to the first anniversary of the earnout commencement date, as defined in the G5 MIPA, and (ii) pay additional cash consideration in an amount equal to 70% of the earnout payment, in each case to the former G5 Infrared members. The earnout is considered contingent consideration and is accounted for as a liability initially measured at fair value, with changes during each reporting period recognized in earnings. The portion of the earnout that will be settled in stock will also be accounted for as a liability since the achievement of targets adjusts the number of shares to be issued at settlement based on a variable other than the Company’s Class A Common Stock, and therefore it does not meet the criteria in ASC 480, Distinguishing Liabilities from Equity. The fair value of the earnout in the accompanying Consolidated Balance Sheet is calculated using a Monte Carlo valuation method, which involves assumptions of revenue and EBITDA forecasts, discount rates and revenue volatility. The earnout liability is subject to fair value measurement each reporting period.

During the year ended  June 30, 2026, the first earnout period ended and based on the targets achieved, the first earnout payment was made to the G5 Sellers for $7.3 million in cash and $3.2 million in shares of Class A Common Stock (297,445 shares, or $3.6 million at fair value as of the issuance date). On  April 16, 2026, we executed a side letter agreement with the G5 Sellers which set the year two earnout payment amount and accelerated the payment timeline. Pursuant to the agreement, the earnout amount will be $9 million, comprised of $6.3 million in cash and $2.7 million in shares of Class A Common Stock, to be paid after  January 1, 2027 and on or before  January 15, 2027. As of June 30, 2026, the earnout liability was adjusted to $9.0 million. Fair value adjustments of $15.0 million and $1.4 million for the years ended June 30, 2026 and 2025 are included in “Change in fair value of acquisition liabilities” in the accompanying Consolidated Statement of Comprehensive Income (Loss).

We determined the fair value of assets acquired and liabilities assumed by using available market information and various valuation methods that require judgement related to estimates. Our preliminary fair value estimates and assumptions to measure the assets acquired and liabilities assumed were subject to change as we obtained additional information during the measurement period. We completed our accounting for the acquisition during the fiscal quarter ended June 30, 2025. The following table summarizes the allocation of the fair value of consideration transferred to assets acquired and liabilities assumed as of the G5 Acquisition Date and the adjustments recognized during the measurement period:

Measurement period adjustments include fair value adjustments during the fiscal quarter ended June 30, 2025, primarily related to refined assumptions in the valuation of the earnout consideration, and intangible assets such as backlog, customer relationships and developed technology intangible assets. Deferred tax liabilities were adjusted for the revised intangible asset values, and for the refined tax rate apportionment calculation. The net impact of the aforementioned adjustments resulted in an increase to goodwill.

Intangible assets –All intangible assets acquired in the acquisition of G5 Infrared are subject to amortization. The fair value of identifiable intangible assets acquired as of the G5 Acquisition Date is as follows:

The fair value of intangible assets is estimated using the multi-period excess earnings approach for acquired customer relationships and the relief from royalty method for the acquired trade names and developed technology. All of these level 3 fair value methods are income-based valuation approaches, which require judgment to estimate appropriate discount rates, revenue forecasts, useful lives, royalty rates related to the tradenames and developed technology intangible assets, and profitability assumptions related to customer relationships. The acquired intangible assets are not expected to be deductible for New Hampshire state income tax purposes, which resulted in a deferred tax liability of $1.1 million.

Goodwill – The $7.0 million of goodwill recognized is attributable to G5 Infrared’s market presence, the assembled workforce and established operating infrastructure. The acquired goodwill is expected to be deductible for Federal income tax purposes. See Note 7, Goodwill and Intangible Assets, in these Notes to these Consolidated Financial Statements for further information.

Acquisition costs have been expensed as incurred. In connection with the acquisition of G5 Infrared, we recorded acquisition costs of $1.1 million for the year ended June 30, 2025, which were included in the “Selling, general and administrative expenses” line item in our Consolidated Statements of Operations.

Unaudited supplemental pro forma information

The following table presents unaudited pro forma financial results of the operations acquired with G5 Infrared and AML. The pro forma results include adjustments to remove costs directly attributable to the acquisition, such as transaction-related costs and the loss on extinguishment of debt (as described in Note 14, Loans Payable, to these Consolidated Financial Statements). The pro forma results were prepared as if the acquisition of G5 Infrared was completed on the first day of our fiscal 2024, July 1, 2023, and as if the acquisition of AML was completed on the first day of our fiscal year 2025, July 1, 2024. The pro forma results do not include any integration synergies and are not necessarily indicative of our results of operations that actually would have been obtained had the acquisition of G5 Infrared been completed for the period presented, or which may be realized in the future.

Vismid Technologies

In July 2023, the Company acquired Visimid. The purchase price included certain installment payments of restricted stock, of which 112,323 and 382,253 shares were issued during the years ended June 30, 2026 and 2025, respectively, and an earnout which is contingent upon the award and completion of a specific customer contract. The balance of the estimated potential earnout is not material and is included in Accrued liabilities in the accompanying Consolidated Balance Sheet as of June 30, 2026. Certain of the acquisition liabilities are subject to fair value adjustments, for which $0.1 million of expense was recorded during the fiscal year ended June 30, 2025, and is included in the “Change in fair value of acquisition liabilities” in the accompanying Consolidated Statement of Comprehensive Income (Loss).