UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

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

For the quarter ended June 30, 2025

☐ 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: 001-41034

SYNTEC OPTICS HOLDINGS, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

87-0816957

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

515 Lee Rd.

Rochester, NY 14606

(Address of principal executive offices and zip code)

(585) 464-9336

(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
Common stock, par value $0.0001 per share	OPTX	The Nasdaq Capital Market
Redeemable warrants, exercisable for shares of common stock at an exercise price of $11.50 per share	OPTXW	The Nasdaq Capital Market

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 for 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 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 ☒

As of October 3, 2025, there were 36,920,226 shares of Class A common stock, par value $0.0001 per share, issued and outstanding.

SYNTEC OPTICS HOLDINGS, INC.

FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2024

TABLE OF CONTENTS

	Page
Part I. FINANCIAL INFORMATION	1
Item 1. Interim Unaudited Condensed Consolidated Financial Statements	1
Condensed Consolidated Balance Sheets as of June 30, 2025 (Unaudited) and December 31, 2024	1
Condensed Consolidated Statements of Operations for the Three and Six Months ended June 30, 2025 and 2024 (Unaudited)	2
Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2025 and 2024 (Unaudited)	3
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024 (Unaudited)	4
Notes to Condensed Consolidated Financial Statements (Unaudited)	5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk	16
Item 4. Controls and Procedures	17
Part II. OTHER INFORMATION	18
Item 1. Legal Proceedings	18
Item 1A. Risk Factors	18
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 3. Defaults Upon Senior Securities	18
Item 4. Mine Safety Disclosures	18
Item 5. Other Information	18
Item 6. Exhibits	18
SIGNATURES	19

PART I - FINANCIAL INFORMATION

Item 1. Interim Unaudited Condensed Consolidated Financial Statements

Syntec Optics Holdings, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

JUNE 30, 2025 AND DECEMBER 31, 2024

	2025 (unaudited)		2024

ASSETS
Current Assets
Cash	$	287,085	$	598,787
Accounts Receivable, Net		6,038,305		5,739,205
Inventory		7,992,617		6,953,278
Income Tax Receivable		-		9,794
Prepaid Expenses and Other Assets		321,301		596,589

Total Current Assets		14,639,308		13,897,653

Property and Equipment, Net		10,385,435		11,668,859
Deferred Tax Asset		270,360		439,942

Total Assets	$	25,295,103	$	26,006,454

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities
Accounts Payable	$	1,854,077	$	2,706,392
Accrued Expenses		821,676		814,600
Deferred Revenue		33,993		36,512
Line of Credit		6,763,863		6,263,863
Current Maturities of Debt Obligations		482,973		467,742
Current Maturities of Finance Lease Obligations		340,492		284,002

Total Current Liabilities		10,297,074		10,573,111

Long-Term Liabilities
Long-Term Debt Obligations		2,372,985		2,614,812
Long-Term Finance Lease Obligations		1,611,218		1,784,449

Total Long-Term Liabilities		3,984,203		4,399,261

Total Liabilities		14,281,277		14,972,372

Commitments and Contingencies		-		-

Stockholders’ Equity
CL A Common Stock, Par value $.0001 per share; 121,000,000 authorized; 36,920,226 issued and outstanding as of June 30, 2025; 36,688,266 issued and outstanding as of December 31, 2024;		3,692		3,669
Common stock value		3,692		3,669
Additional Paid-In Capital		2,377,181		2,377,204
Retained Earnings		8,632,953		8,653,209

Total Stockholders’ Equity		11,013,826		11,034,082

Total Liabilities and Stockholders’ Equity		25,295,103		26,006,454

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

Syntec Optics Holdings, Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024


	Three Months Ended						Six Months Ended
	June 30, 2025			June 30, 2024			June 30, 2025			June 30, 2024

Net Sales	$	6,559,455		$	7,006,000		$	13,628,497		$	13,261,908

Cost of Goods Sold		4,961,489			4,831,673			9,721,913			10,380,138

Gross Profit		1,597,966			2,174,327			3,906,584			2,881,770

General and Administrative Expenses		1,744,216			2,015,783			3,524,382			4,130,326

Income (Loss) from Operations		(146,250	)		158,544			382,202			(1,248,556	)

Other Income (Expense)
Interest Expense, Including Amortization of Debt Issuance Costs		(208,969	)		(167,242	)		(409,865	)		(327,109	)
Other Income		11,298			319,623			16,995			338,972

Total Other (Expense)		(197,671	)		152,381			(392,870	)		11,863

Income (Loss) Before Provision for (Benefit) Income Taxes		(343,921	)		310,925			(10,668	)		(1,236,693	)

Provision (Benefit) for Income Taxes		-			29,082			9,588			(309,393	)

Net (Loss) Income	$	(343,921	)	$	281,843		$	(20,256	)	$	(927,300	)

Net Income (Loss) per Common Share
Basic and diluted	$	(0.01	)	$	0.01		$	(0.00	)	$	(0.03	)

Weighted Average Number of Common Shares Outstanding
Basic and diluted		36,920,226			36,688,266			36,920,226			36,688,266

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

SYNTEC OPTICS HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

					Additional
	Common Stock				Paid-In			Retained
	Shares		Amount		Capital			Earnings			Total

Balances, January 1, 2025		36,688,266	$	3,669	$	2,377,204		$	8,653,209		$	11,034,082

Net Income		-		-		-			323,665			323,665

Stock-Based Compensation		231,960		23		(23	)		-			-

Balances, March 31, 2025		36,920,226		3,692		2,377,181			8,976,874			11,357,747

Net Loss		-		-		-			(343,921	)		(343,921	)

Balances, June 30, 2025		36,920,226	$	3,692	$	2,377,181		$	8,632,953		$	11,013,826

					Additional
	Common Stock				Paid-In		Retained
	Shares		Amount		Capital		Earnings			Total

Balances, January 1, 2024		36,688,266	$	3,669	$	1,927,204	$	11,132,869		$	13,063,742

Net Loss		-		-		-		(1,209,143	)		(1,209,143	)

Balances, March 31, 2024		36,688,266		3,669		1,927,204		9,923,726			11,854,599
Balances		36,688,266		3,669		1,927,204		9,923,726			11,854,599

Net Income		-		-		-		281,843			281,843
Net Income (Loss)		-		-		-		281,843			281,843

Balances, June 30, 2024		36,688,266	$	3,669	$	1,927,204	$	10,205,569		$	12,136,442
Balances		36,688,266	$	3,669	$	1,927,204	$	10,205,569		$	12,136,442

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

Syntec Optics Holdings, Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2024

	2025			2024
Cash Flows From Operating Activities
Net Loss	$	(20,256	)	$	(927,300	)
Adjustments to Reconcile Loss to Net Cash (Used In)
Provided By Operating Activities:
Adjustments to Reconcile (Loss) Income to Net Cash (Used In) Provided By Operating Activities:
Depreciation and Amortization		1,387,427			1,385,606
Amortization of Debt Issuance Costs		4,834			4,387
Gain on Disposal of Property and Equipment		-			(309,000	)
Change in Allowance for Expected Credit Losses		75,727			(24,395	)
Change in Reserve for Obsolescence		(18,881	)		291,576
Deferred Income Taxes		-			(357,994	)
(Increase) Decrease in:
Accounts Receivable		(374,827	)		885,368
Inventory		(1,020,458	)		(1,958,557	)
Decrease in Federal Income Tax Receivable		179,376			-
Prepaid Expenses and Other Assets		275,288			57,309
Increase (Decrease) in:
Accounts Payables and Accrued Expenses		(344,470	)		(993,406	)
Federal Income Tax Payable		-			(318,240	)
Deferred Revenue		(2,519	)		280,763

Net Cash Provided By (Used In) Operating Activities		141,241			(1,983,883	)

Cash Flows From Investing Activities
Purchases of Property and Equipment		(604,772	)		(254,767	)
Proceeds from Disposal of Property and Equipment		-			309,000

Net Cash (Used in) Provided in Investing Activities		(604,772	)		54,233

Cash Flows From Financing Activities
(Repayments) Borrowing on Line of Credit, Net		500,000			(273,729	)
Borrowing on Debt Obligations		-			1,100,388
Repayments on Debt Obligations		(231,430	)		(224,775	)
Repayments on Finance Lease Obligations		(116,741	)		-

Net Cash Provided By Financing Activities		151,829			601,884

Net Decrease in Cash		(311,702	)		(1,327,766	)

Cash - Beginning		598,787			2,158,245

Cash - Ending	$	287,085		$	830,479

Supplemental Cash Flow Disclosures:

Cash Paid for Interest	$	409,579		$	276,809

Cash Paid for Taxes	$	-		$	537,510

Supplemental Disclosures of Non-Cash Investing Activities:

Assets Acquired and Included in Accounts Payable and Accrued Expenses	$	40,362		$	651,736

Issuance of restricted stock from stock-based compensation	$	23		$	-

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

SYNTEC OPTICS HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Description of Organization and Business Operations

Nature of Business

Syntec Optics Holdings, Inc. (the “Company” or “Syntec Optics”) is a vertically integrated manufacturer of optics and photonics components and sub-systems – from opto-mechanicals to optical elements of various geometries, diamond turned optics – both prototype and production, and optical systems including optics assembly, electro-optics assembly, design, and coating. Sales are made to customers in the United States and Europe in defense, medical, and consumer end-markets. The Company has one reporting segment as its operating segments meet the requirements for aggregation.

Note 2 — Summary of Significant Accounting Policies

The Company has provided a discussion of significant accounting policies, estimates and judgements in its 2024 Annual Report. There have been no changes to the Company’s significant accounting policies since December 31, 2024.

Basis of Presentation

The accompanying interim unaudited condensed consolidated financial statements have been prepared by the Company in United States (“U.S.”) dollars and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”), the instructions to Form 10-Q and the provisions of Regulation S-X pertaining to interim financial statements. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted. The interim unaudited condensed consolidated financial statements and notes included in this report should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. In the opinion of management, these interim unaudited condensed consolidated financial statements include all adjustments and accruals of a normal and recurring nature necessary to fairly state the results of the interim periods presented. The results for interim periods are not necessarily indicative of results to be expected for the full year or for any future periods.

SYNTEC OPTICS HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 3 — Disaggregated Revenues

The following table disaggregates revenue by revenue recognition methodologies for the three and six months ended June 30:

Schedule of Disaggregated Revenues


	Three Months Ended June 30				Six Months Ended June 30
	2025		2024		2025		2024

Products	$	6,347,882	$	6,947,620	$	13,268,104	$	13,198,323
Custom Tooling		89,573		15,443	$	208,393		19,648
Non-Recurring Engineering		122,000		42,937		152,000		43,937

Total	$	6,559,455	$	7,006,000	$	13,628,497	$	13,261,908

Syntec Optics’ management periodically reviews its revenues by its consumer, communication, medical, and defense end-markets. The purpose of this analysis is to determine its end market mix and identify trends. The following table disaggregates revenue as outlined above for the three and six months ended June 30:


	Three Months Ended June 30				Six Months Ended June 30
	2025		2024		2025		2024

Communication	$	945,307	$	626,549	$	2,806,685	$	2,683,811
Consumer		1,522,032		2,525,120		2,685,322		3,763,105
Defense		1,409,932		1,227,483		2,968,434		2,420,798
Medical		2,682,184		2,626,848		5,168,057		4,394,195

Total	$	6,559,455	$	7,006,000	$	13,628,497	$	13,261,908
Disaggregated Revenues	$	6,559,455	$	7,006,000	$	13,628,497	$	13,261,908

SYNTEC OPTICS HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 4 — Inventory

Inventory consists of the following at June 30, 2025 and December 31, 2024:

Schedule of Inventory

	2025		2024

Raw Materials	$	599,731	$	487,405
Work-in-Process		7,748,686		6,815,425
Finished Goods		233,515		153,353
Inventory gross		8,581,932		7,456,183
Less: Reserve for Obsolescence		589,315		502,905

Inventory	$	7,992,617	$	6,953,278

Note 5 — Property and Equipment

Property and equipment consists of the following at June 30, 2025 and December 31, 2024:

Schedule of Property and Equipment

	2025		2024

Machinery and Equipment	$	34,528,631	$	34,430,556
Building and Leasehold Improvements		5,483,617		5,483,616
Land		130,000		130,000
Office Furniture and Equipment		2,295,749		2,295,749
Tooling		169,308		163,381
Vehicles		24,059		24,059
Property and Equipment, Gross		42,631,364		42,527,361
Less: Accumulated Depreciation		32,245,929		30,858,502

Property and Equipment, Net	$	10,385,435	$	11,668,859

Depreciation expenses were approximately $676,600 and $675,200 for the three months ended June 30, 2025 and 2024, respectively, and $1,387,427 and $1,385,606 for the six months ended June 30, 2025 and 2024, respectively.

SYNTEC OPTICS HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 6 — Line of Credit

The Company has a line of credit available in the amount of $8,000,000 with M&T Bank (the “Credit Agreement”). Borrowings may be made against the line of credit as Secured Overnight Financing Rate (“SOFR”) Loans. The weighted average rate on outstanding borrowings as of June 30, 2025 was 7.31%. As of both June 30, 2025 and December 31, 2024, the Company had $6,763,863 and $6,263,863, respectively, outstanding under the line of credit facility.

The Credit Agreement contains customary covenants and restrictions on the Company’s ability to engage in certain activities and financial covenants requiring the Company to maintain certain financial ratios. At June 30, 2025, the Company was in compliance with the minimum fixed charge coverage ratio, the maximum total leverage ratio, and the minimum EBITDA requirement as defined in the Credit Agreement. It is our expectation to file future 10-K and 10-Q filings in a timely manner.

Note 7 — Long-Term Debt

Long-term debt consists of the following at June 30, 2025 and December 31, 2024:

Schedule of Long Term Debt Maturities

	2025		2024

The Company entered into a Line of Credit agreement which has a maturity date of November 8, 2026. See details in note 6.	$	6,763,863	$	6,263,863
The Company entered into a $863,607 mortgage note payable, securitized by the Company’s real estate and cross-collateralized with all Company assets, with M&T Bank, requiring monthly installments of $7,389, including interest at a fixed rate of 6.13%. The note matures in February 2029.	$	816,188	$	836,815

The Company entered into a $236,781 term note payable with M&T Bank, requiring monthly principal installments of $3,385, plus interest at a fixed rate of 6.05%. The note matures in March 2029.		184,359		205,829

The Company entered into a $1,775,000 term note payable with M&T Bank, requiring monthly principal installments of $34,886 plus interest at a fixed rate of 6.59%. The note matures in November 2028.		1,272,970		1,436,662

The Company entered into a $1,064,000 term note payable with the U.S. Small Business Administration, requiring monthly installments of $6,652, including fees and interest at a fixed rate of 2.22%. The note matures in June 2036. The note is secured by certain assets of the Company and a personal guaranty of the Company’s stockholder.		642,365		668,006

Total Long-Term Debt		2,915,882		3,147,312

Less: Unamortized Debt Issuance Costs		59,924		64,758

Long-Term Debt, Less Unamortized Debt Issuance Costs		2,855,958		3,082,554

Less: Current Maturities		482,973		467,742

Long-Term Debt	$	2,372,985	$	2,614,812

At June 30, 2025, the future debt maturities are as follows:


December 31, 2025 (remainder of year)	$	353,808
2026		497,991
2027		529,310
2028		492,668
2029		117,261
Thereafter		924,844
Total	$	2,915,882

SYNTEC OPTICS HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 8 — Retirement Plan

The Company maintains a 401(k) retirement plan covering eligible employees of the Company and its affiliate. Under the plan, participants may defer a percentage of their annual compensation, with Syntec Optics matching 50% of employee contributions not to exceed 6% of annual compensation. Total contributions for the Company for the three months ended June 30, 2025 and 2024 amounted to $45,000 and $50,000, respectively, and for the six months ended June 30, 2025 and 2024 were approximately $93,000 and $95,000, respectively.

Note 9 — Income Taxes

The income tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made.

The effective income tax rate was 20.3% and 25.0% for the six months ended June 30, 2025 and 2024, respectively.

Note 10 — Leases

During 2024, the Company entered into finance lease agreements for equipment utilized in its manufacturing facility.

The components of operating and finance lease costs are as follows for the three months ended June 30:

	2025		2024		2025		2024
	Three Months ended June 30				Six Months ended June 30
	2025		2024		2025		2024
Finance Lease Cost:
Amortization of assets	$	82,157	$	-	$	164,314	$	-
Interest on liabilities		40,073		-		81,837		-

Total lease cost	$	122,230	$	-	$	246,151	$	-

Supplemental cash flow information related to leases are as follows for the three months ended June 30:

	2025		2024		2025		2024
	Three Months ended June 30				Six Months ended June 30
	2025		2024		2025		2024
Cash paid for amounts included in measurement of lease obligations:
Operating cash flows from operating leases	$	-	$	-	$	-	$	-
Operating cash flows from finance leases	$	40,073	$	-	$	81,837	$	-
Financing cash flows from finance leases	$	88,576	$	-	$	115,300	$	-

The following table summarizes weighted average remaining lease term and discount rates as of June 30, 2025, and December 31, 2024:

	2025			2024
Weighted average remaining lease term (years)
Operating leases		N/A			N/A
Finance leases		4.51			5.00
Weighted average discount rate
Operating leases		N/A			N/A
Finance leases		8.4	%		8.4	%

Future maturities of our lease liabilities are as follows as of June 30, 2025:


2025 remainder of year	$	256,762
2026		513,525
2027		513,525
2028		513,525
2029		513,525
Thereafter		128,380
Total Undiscounted Lease Obligations		2,439,242
Less: Imputed Interests		487,532

Present Value of Lease Obligations	$	1,951,710

SYNTEC OPTICS HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 11 — Warrants

The following tables presents a roll-forward of the Company’s warrants from December 31, 2024 to June 30, 2025:

Schedule of Warrant

	Common Stock Warrants

Warrants outstanding, December 31, 2024, 2025		14,107,989
Warrants exercised		-
Warrants outstanding, June 30, 2025		14,107,989

Note 12 — Income (Loss) Per Share

The following table sets forth the information needed to compute basic and diluted (loss) earnings per share for the three and six months ended June 30, 2025 and 2024:

	2025			2024		2025			2024
	Three months ended June 30,					Six months ended June 30,
	2025			2024		2025			2024
Basic and diluted net income (loss) per share
Numerator:
Net (loss) income	$	(343,921	)	$	281,843	$	(20,256	)	$	(927,300	)

Denominator
Weighted-average shares outstanding		36,920,226			36,688,266		36,920,226			36,688,266
Basic and diluted net (loss) income per share	$	(0.01	)	$	0.01	$	(0.00	)	$	(0.03	)

Note that there were no potentially dilutive shares that were excluded from the weighted-average share calculation as of June 30, 2025 and 2024.

Note 13 — Significant Customers

For the three months ended June 30, 2025, the Company generated 43% of revenues from three customers. For the six months ended June 30, 2025, the Company generated 41% of revenues from three customers. These three customers are in different end-markets utilizing diverse manufacturing capabilities from the Company. The outstanding accounts receivable due from these customers were approximately $2.8 million as of June 30,2025

For the three and six months ended June 30, 2024, the Company generated 53% of revenues from three customers. The outstanding accounts receivable due from these customers were approximately $3.5 million as of June 30, 2024.

Note 14 Segment reporting

The Company operates as one operating segment. The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer, who reviews the financial statements on a consolidated basis. The CODM uses the Company’s long-range plan to allocate resources. The CODM makes decisions on resource allocation, assessments of performance, and monitors budget versus actual results using consolidated loss from operations.

Significant expenses within loss from operations, as well as within net loss, include general and administrative expenses, and other expenses which are each separately presented on the Company’s Consolidated Statements of Operations and Comprehensive Loss.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The information in this Management’s Discussion and Analysis should be read in conjunction with the accompanying unaudited condensed financial statements and notes.

Cautionary Note Regarding Forward-Looking Statements

This report includes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions are intended to identify forward-looking statements. All statements other than statements of historical facts contained in this report, including among others, our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth are forward-looking statements. Our actual results and financial condition may differ materially from those express or implied in such forward-looking statements. Therefore, you should not rely on any of these forward-looking statements.

For a further list and description of various risks, relevant factors and uncertainties that could cause future results or events to differ materially from those expressed or implied in our forward-looking statements, see the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections in this report, our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and our other filings with the Securities and Exchange Commission (the “SEC”). All forward-looking statements in this report are made only as of the date hereof or as indicated and represent our views as of the date of this report. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise, except as required by law.

Overview

Syntec Optics is vertically integrated from design and component manufacturing for lens system assembly to imaging module integration for system solutions. Making our own tools, molding, and nanomachining allows close interaction and recut ability, enabling special techniques to hold tolerances up to sub-micron level. Syntec has assembled a world class design for manufacturability team to augment its production team with deep expertise to fully leverage our vertical integration from component making to optics and electronics assembly. Syntec Optics has steadily developed variety of other complementary manufacturing techniques to provide a wide suite of horizontal capabilities including thin films deposition coatings, glass molding, polymer molding, tool-making, mechanicals manufacturing, and nanomachining.

Syntec became a leader in the industry by pioneering polymer-based optics and then subsequently adding glass optics and optics made from other materials including crystals and metals. Polymer-based optics provide numerous advantages compared to incumbent glass-based optics. Polymer-based optics are smaller, lower weight, lower cost, and offer very high-performance optical solutions. For all these reasons, Syntec is able to deliver products to our clients that are lighter, smaller, and suitable for cutting edge technology products, including the newly evolving silicon photonics industry.

Our designs and assembly processes are developed in-house in the United States. In 2016, Syntec Optics expanded its manufacturing facility to nearly 90,000 square-feet, allowing us to increase our production capacity and offer additional advanced manufacturing processes under one roof which provide us the ability to increase sales to existing customers and increase penetration of our end-markets. Our facility provides a streamlined, partially autonomous production process for our current customers, which comprises optical assembly, electro-optics assembly, polymer optics molding, glass optics molding, opto-mechanical assembly, nanomachining and thin films coating. Our facility also provides availability to expand the number of advanced manufacturing processes to handle increased volumes of existing and new customer orders.

Syntec Optics focuses on four end markets of defense, medical, consumer, and communications all with several mission-critical applications with strong tailwinds.

In 2023, Syntec Optics launched low weight night vision optics and further, announced hybrid light-weight magnifier and thermal clip on in the defense end market. Also, in 2023, Syntec Optics announced biomedical mirrors for sensing in the medical end market. Rounding out new product launches for 2023, in the communication end market, Syntec Optics launched microlens arrays and low earth satellite optics.

Key Factors Affecting Our Operating Results

Our financial position and results of operations depend to a significant extent on the following factors:

End Market Consumers

The demand for our products ultimately depends on demand from customers in our current end markets. We generate sales through (1) Tier 1 suppliers and (2) through OEMs.

An increasing proportion of our sales has been and is expected to continue to be derived from sales to defense. biomedical and industrial/consumer OEMs, driven by continued efforts to develop and expand sales to OEMs with whom we have longstanding relationships. Future OEM sales will be subject to risks and uncertainties, including the number of defense, biomedical and industrial/consumer products these OEMs manufacture and sell, which in turn may be driven by the expectations these OEMs have around end market demand.

Demand from end markets is impacted by a number of factors, including travel restrictions (global pandemics or geo-political conflicts), fuel costs and energy demands (including an increasing trend towards the use of green energy), as well as overall macro-economic conditions. Sales of our optics and photonics enabled components and sub-components have also benefited from the increased global conflict, the United States dynamic relationships with other world powers that may have a conflicting view with western-style democracy, the movement towards reshoring of advanced manufacturing, biomedical components and sub-components needed to support physicians in their battle against global pandemics, and the increased global demand for high-fidelity data communications on all corners of the globe.

Syntec Optics plans to further add bolt-on acquisitions for inorganic growth in the fragmented photonics industry by expanding our portfolio of our existing, U.S.-based, advanced manufacturing processes of making thin-film coated glass, crystal, or polymer components and their housings, which are ultimately assembled into high performance hybrid electro-optics sub-systems. By doing so, Syntec Optics plans to grow to the new end markets of communications and sensing. Syntec Optics entered the communications end market in 2023. Syntec Optics is currently engaged as a supplier for a U.S. Department of Commerce’s National Institute of Standards and Technology (NIST) funded research and development project for the sensing end market. The communication end market is characterized by the use of optics and photonics for data transmittal and reception of information, including, for example, satellite communications and other associated applications. The sensing end-market is characterized by the use of optics and photonics to detect scattered light or light with an altered refractive index due to the presence of a medium within a wide range of potential applications, including, for example, disease detection and other associated applications.

Supply

We currently rely on strategically selected electronics, highly engineered polymers and aluminum manufacturers 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, reflected in our ability to (x) increase our purchase order volumes (qualifying us for related volume-based discounts) and (y) order and receive delivery of raw materials in anticipation of required demand, 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 build 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.

As a result of the active steps we have taken to manage our inventory levels, we have not been subject to the shortages or price impacts that have been present for manufacturers of optic and photonic enabled components or sub-components.

Product and Customer Mix

Our sales consist of sales of highly specialized optic and photonic enabled components and sub-components. These products are sold to different customer types (e.g., OEMs and Tier 1 manufacturers) and at different prices and involve varying levels of costs. In any particular period, changes in the mix and volume of particular products sold and the prices of those products relative to other products will impact our average selling price and our cost of goods sold. The price of our products may also increase as a result of increases in the cost of components due to inflation, labor and raw materials. In addition, revenues from these larger customers may fluctuate from time to time based on these customers’ business needs and customer experience, the timing of which may be affected by market conditions or other factors outside of our control. These customers have a broad product purchase mix across various departments of Syntec Optics. Syntec Optics supplies several mission critical components and sub-components to these customers that are not tied to a single application, customer initiative, or purchase order. We expect sales to increase as we further advance our full-system design expertise and product offerings and customers increasingly demand more sophisticated systems, rather than drop-in replacements. In addition to the impacts attributable to the general sales mix across our products, our results of operations are impacted by the relative margins of products sold. As we continue to introduce new products at varying price points, our overall gross margin may vary from period to period as a result of changes in product and customer mix.

Production Capacity

All of our design, advanced manufacturing and assembly currently takes place at our nearly 90,000 square foot headquarters and manufacturing facility located in Rochester, New York. We currently operate optical, opto-mechanical and electro-optical assembly lines in addition to molding, nanomachining, testing and thin-film production lines. Consistent with our operating history, we plan to continue to automate additional aspects of our advanced manufacturing operations. Our existing facility has the capacity to add additional production lines and construct and operate pilot production lines for new components and sub-components, all designed to maximize the capacity of our manufacturing facility. Although our automation efforts are expected to reduce our costs of goods, we may not fully recognize the anticipated savings when planned and could experience additional costs or disruptions to our production activities.

Competition

We compete with traditional glass optic manufacturers and electro-optic manufacturers, who primarily either import their products or components or manufacture products under a private label. As we continue to expand into new markets, develop new products and move towards production of our polymer based and glass-polymer based optic hybrids and photonics enabled components and sub-components, we will experience competition with a wider range of companies. These competitors may have greater resources than we do and may be able to devote greater resources to the development of their current and future technologies. Our competitors may be able to source materials and components at lower costs, which may require us to evaluate measures to reduce our own costs, lower the price of our products or increase sales volumes in order to maintain our expected levels of profitability.

Research and Development

Our research and development are primarily focused on the advanced manufacturing of polymer and glass-polymer based optic and photonics enabled components and sub-components. The next stage in our technical development is to construct our products to optimize performance, lower weight and increase longevity to meet and exceed industry standards for our target end markets. Ongoing testing and optimizing of more complicated systems and sub-systems for our existing end markets will assist us in increasing penetration in our current end markets and expanding into targeted end markets.

Components of Results of Operations

Net Sales

Net sales are primarily generated from the sale of our optics and photonics enabled components and sub-components to OEMs.

Cost of Goods Sold

Cost of goods sold includes the cost of raw materials and other components of our optic and photonic enabled components and sub-components, labor, overhead, utilities, and depreciation and amortization.

Gross Profit

Gross profit, calculated as net sales less cost of goods sold, may vary between periods and is primarily affected by various factors including average selling prices, product costs, product mix, customer mix and production volumes.

Operating Expenses

General and Administrative

General and administrative costs include personnel-related expenses attributable to our executive, finance, human resources, selling and marketing, and information technology organizations, certain facility costs, office related depreciation, and fees for professional services.

Total Other Income (Expense)

Other income (expense) consists primarily of interest expense and debt issuance costs.

Results of Operations

Comparisons for the Three Months Ended and Six Months Ended June 30, 2025 and 2024

The following table sets forth our results of operations for the three months ended June 30, 2025 and 2024, respectively. This data 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.

	Three Months Ended
	June 30, 2025			% Net Sales			June 30, 2024			% Net Sales
Net Sales	$	6,559,455			100	%	$	7,006,000			100	%
Cost of Goods Sold		4,961,489			76	%		4,831,673			69	%
Gross Profit		1,597,966			24	%		2,174,327			31	%
General and Administrative Expenses		1,744,216			27	%		2,015,783			29	%
(Loss) Income from Operations		(146,250	)		-2	%		158,544			2	%
Other Income (Expense)
Interest Expense, Including Amortization of Debt Issuance Costs		(208,969	)		-3	%		(167,242	)		-2	%
Other Income		11,298			0	%		319,623			5	%
Total Other Income (Expense), Net		(197,671	)		-3	%		152,381			2	%
(Loss) Income Before Provision for (Benefit) Income Taxes		(343,921	)		-5	%		310,925			4	%
Provision (Benefit) for Income Taxes		-			0	%		29,082			0	%
Net (Loss) Income	$	(343,921	)		-5	%	$	281,843			4	%

	Six Months Ended
	June 30, 2025			% Net Sales			June 30, 2024			% Net Sales
Net Sales	$	13,628,497			100	%	$	13,261,908			100	%
Cost of Goods Sold		9,721,913			71	%		10,380,138			78	%
Gross Profit		3,906,584			29	%		2,881,770			22	%
General and Administrative Expenses		3,524,382			26	%		4,130,326			31	%
Income (Loss) from Operations		382,202			3	%		(1,248,556	)		-9	%
Other Income (Expense)
Interest Expense, Including Amortization of Debt Issuance Costs		(409,865	)		-3	%		(327,109	)		-2	%
Other Income		16,995			0	%		338,972			3	%
Total Other (Expense)		(392,870	)		-3	%		11,863			0	%
Loss Before Provision for (Benefit) Income Taxes		(10,668	)		0	%		(1,236,693	)		-9	%
Provision (Benefit) for Income Taxes		9,588			0	%		(309,393	)		-2	%
Net Loss	$	(20,256	)		0	%	$	(927,300	)		-7	%

Net Sales

Net sales decreased by $0.4 million, or 6.4%, to $6.6 million for the three months ended June 30, 2025, as compared to $7.0 million for the three months ended June 30, 2024. This decrease was primarily due to decreases in consumer markets of $1.0 million partially offset by increases in communications markets of $0.3 million and in defense of $0.2 million.

Net sales increased by $0.4 million, or 2.8%, to $13.6 million for the six months ended June 30, 2025, as compared to $13.3 million for the six months ended June 30, 2024. This increase was primarily due to an increase of $1.4 million spread across the defense, medical and communication end markets, offset by a decrease in the consumer market of $1.0 million.

Cost of Goods Sold

Cost of revenue increased by $0.2 million, to $5.0 million for the three months ended June 30, 2025, as compared to $4.8 million for the three months ended June 30, 2024. This increase was primarily due to an increase of in material costs. For six months ending June 30, 2025 the cost of revenue decreased by $0.7 million driven by decreases in manufacturing overhead costs partially offset by an increase in material costs.

Gross Profit

Gross profit decreased by $0.6 million, or 26.5%, to $1.6 million for the three months ended June 30, 2025, as compared to $2.2 million for the three months ended June 30, 2024. This decrease was primarily due to the decrease in revenue and the increase in costs of goods sold. For the six months ending June 30, 2025 gross profit increased by $1.0 million driven by both the volume increase and the reductions in manufacturing overhead costs.

General and Administrative Expenses

General and administrative expenses decreased by $0.3 million, or 13.5%, to $1.7 million for the three months ended June 30, 2025, as compared to $2.0 million for the three months ended June 30, 2024. This decrease was primarily due to an approximately $0.04 million decrease in computer and supplies, a $0.13 million decrease in professional fees, a $0.02 million reduction in health care costs and a $0.07 million savings in advertising and marketing expenses. For the six months ending June 30, 2025 general and administrative expenses of $3.5 million were down $0.6 million from 2024 driven by a $0.4 million decrease in outside services and consulting, $0.1 million decrease in insurance costs, and a $0.1 million decrease in travel expenses.

Total Other Income (Loss)

Other income (expense) decreased by $0.35 million or (230%) to a $0.2 million expense for the three months ended June 30, 2025. This decrease was primarily due to a book gain on the sale of assets in 2024. Other expenses for the six months ended June 30, 2025 of $0.4 million increased by $0.4 million for primarily the same reason.

Income Tax Expense (Benefit)

Income tax expense decreased by $0.03 million, to zero for the three months ended June 30, 2025, as compared to $0.03 million for the three months ended June 30, 2024. This decrease was primarily due to the decrease in net income. For the six months ended June 30, 2025 income tax expense of $0.09 million compared to an income tax benefit of $0.3 million in 2024. The increase in income tax expense was driven by the increased profitability.

Net Income (Loss)

Net loss decreased by $0.6 million, or 222%, to $0.3 million for the three months ended June 30, 2025, as compared to a $0.3 million net income for the three months ended June 30, 2024. This decrease was primarily due to a decline in sales of $0.4 million, an increase in cost of goods sold of $0.1 million, an increase in interest expense of $0.42 million and a reduction of other income of $0.3 million, offset by a decrease in general and administrative expenses of $0.2 million and an increase in other income (expense) of $0.03 million.

For the six months ended June 30, 2025, Net loss decreased by $0.9 million to $0.02 million as compared to $0.9 million net loss in 2024. The decrease was driven by a $1.0 million increase in gross profit and a $0.6 million decrease in general and administrative costs, partially offset by a $0.4 million reduction in other expenses and a $0.3 million increase in income tax expense.

Critical Accounting Estimates

Our condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these condensed consolidated financial statements requires us to make judgments and estimates that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions or conditions. On a recurring basis, we evaluate our judgments and estimates in light of changes in circumstances, facts, and experience. The effects of material revisions in an estimate, if any, will be reflected in the consolidated financial statements prospectively from the date of the change in the estimate.

We believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.

Inventory Valuation

We periodically review physical inventory for excess, obsolete, and potentially impaired items and reserves. Any such inventory is written down to net realizable value. The reserve estimate for excess and obsolete inventory is dependent on expected future use and requires management judgement.

Income Taxes

We account for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities using enacted rates. The effect of a change in tax rates on deferred taxes is recognized in income in the period that includes the enactment date.

We recognize the financial statement effect of an uncertain income tax position when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. Recognized income tax positions are measured at the largest amount that is greater than 50% likely to be realized. A valuation allowance is recorded to reduce deferred income tax assets to an amount, which in the opinion of management is more likely than not to be realized.

Management judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities, and any valuation allowance recorded against our deferred tax assets. We consider factors such as the cumulative income or loss in recent years; reversal of deferred tax liabilities; projected future taxable income exclusive of temporary differences; the character of the income tax asset, including income tax positions; tax planning strategies and the period over which we expect the deferred tax assets to be recovered in the determination of the valuation allowance. In the event that actual results differ from these estimates, or we adjust our estimates in the future, we may need to adjust our valuation allowance, which could materially impact our financial position and results of operations.

Non-GAAP Financial Measures

This Quarterly Report includes a non-generally accepted account principles within the United States (“U.S. GAAP”) measure that we use to supplement our results presented in accordance with U.S. GAAP. EBITDA is defined as earnings before interest and other income, tax and depreciation and amortization. Adjusted EBITDA is calculated as EBITDA adjusted for non-recurring items, and business combination expenses. Adjusted EBITDA is a performance measure that we believe is useful to investors and analysts because it illustrates the underlying financial and business trends relating to our core, recurring results of operations and enhances comparability between periods.

Adjusted EBITDA is not a recognized measure under U.S. GAAP and is not intended to be a substitute for any U.S. GAAP financial measure and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry. Investors should exercise caution in comparing our non-GAAP measure to any similarly titled measure used by other companies. This non-GAAP measure excludes certain items required by U.S. GAAP and should not be considered as an alternative to information reported in accordance with U.S. GAAP.

Adjusted EBITDA

We define adjusted EBITDA, a non-GAAP financial measure, as net earnings (loss) before interest and other expenses, net, income tax expense, depreciation and amortization, as adjusted to exclude non-recurring items. We utilize adjusted EBITDA as an internal performance measure in the management of our operations because we believe the exclusion of these non-cash and non-recurring charges allow for a more relevant comparison of our results of operations to other companies in our industry and is in accordance with the Non-GAAP Financial Measures Compliance & Disclosure Interpretations (Reference Question 102.03).

The Company has identified several non-recurring items included in our non-GAAP adjusted EBITDA financial measure. These items encompass management fees, professional & transaction fees, technology start-up costs, optical molding evaluation expenses, glass molding evaluation expenses, and executive transition expenses.

The table below presents our adjusted EBITDA, reconciled to net income for the three and six months ended June 30, 2025 and 2024.

NON-GAAP RECONCILIATION OF EBITDA

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

	Three Months Ended					Six Months Ended
	June 30, 2025			June 30, 2024		June 30, 2025			June 30, 2024
Net (Loss) Income	$	(343,921	)	$	281,843	$	(20,256	)	$	(927,300	)
Depreciation & Amortization		676,623			692,194		1,387,427			1,389,993
Debt Issuance Costs		2,418			-		4,834			-
Interest Expenses		207,623			164,828		409,579			322,722
Taxes		-			29,082		9,588			(309,393	)
Non-Recurring Items
Executive Transition		135,246			-		249,189			-
One time Contract exit costs		11,750			-		21,063			-
Non-recurring property damage		-			-		21,261			-
Professional & Transaction Fees		-			-		-			25,265
Technology Start-up Costs		-			-		-			165,034
Optical Molding Evaluation Expenses		-			-		-			38,104
Glass Molding Evaluation Expenses		-			-		-			68,392
Adjusted EBITDA	$	689,739		$	1,167,947	$	2,082,685		$	772,817

Liquidity and Capital Resources

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 June 30, 2025, our principal sources of liquidity were cash totaling $0.3 million and a line of credit with $1.7 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 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Cash Flow — Six Months Ended June 30, 2025 and 2024

	Six Months ending June 30
	2025			2024
Net Cash Provided by Operating Activities	$	141,241		$	(1,983,883	)
Net Cash Used in Investing Activities	$	(604,772	)	$	54,233
Net Cash used in Financing Activities	$	151,829		$	601,884

Operating Activities

Net cash provided by operating activities was $0.14 million for the six months ended June 30, 2025, as compared to net cash used by operating activities of $1.98 million for the six months ended June 30, 2024. The primary drivers for the year-over-year change were a $0.9 million net improvement in net income as well as other favorable changes to balance sheet accounts including accounts receivable, and inventory.

Investing Activities

Net cash used by investing activities was $0.6 million for the six months ended June 30, 2025, as compared to net cash provided by investing activities of $0.5 million for the six months ended June 30, 2024. The net cash used in investing activities increased due to decrease in payment of capital expenditures of $0.3 million and a sale of equipment in 2024 of $0.3 million.

Financing Activities

Net cash provided by financing activities was $0.15 million for the six months ended June 30, 2025, as compared to net cash provided in financing activities of $0.60 million for the six months ended June 30, 2024. The primary drivers for the year-over-year change was lower net new borrowing on credit facilities.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Our primary market risk exposure is interest rate sensitivity. During the six months ended June 30, 2025, there have been no material changes to the information included under Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15 under the Exchange Act, we have carried out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Report. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our Company’s reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Based on the evaluation of our disclosure controls and procedures as of June 30, 2025, our Chief Executive Officer and our Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were not effective due to the following identified material weaknesses:

	1.	We lack documentation of formal internal control process and controls including lack of review of journal entries.
	2.	We lack necessary corporate accounting resources to maintain adequate segregation of duties.
	3.	We lack timely reconciliation controls in the areas of classification of revenue, accounts payable, accrued legal expenses, provision for income taxes, and inventory.
	4.	We lack controls related to proper cut-off of costs of goods sold and general and administrative expenses.
	5.	We lack control related to identification and disclosure of related party transactions.
	6.	We lack control related to proper fair value methodology utilized for valuation of complex financial instrument in connection with contingent earnout arrangement.
	7.	We lack the necessary information technology (“IT”) general controls infrastructure in the areas of user access and program change-management due to insufficient documentation and training, and inadequate IT risk assessment process. Additionally, we lack controls around the review of SOC-1 reports and lack of cyber security related controls.
	8.	We lack control related to the evaluation and calculation of finance leases in accordance with Accounting Standards Codification 842-20-25-1a.
	9.	We lack control related to identification of stock-based compensation agreements and related accounting for and disclosure of such agreements.

Remediation Plans and Status

As disclosed in the section titled “Evaluation of Internal Controls and Procedures,” we have identified certain control deficiencies. To address these issues, we have designed and are in the process of implementing the following remediation initiatives, which are aligned with the COSO framework:

	●	Enhance corporate governance through increased oversight by the Audit Committee, including additional reviews of internal control improvements and financial statements prior to publication (Control Environment; Monitoring Activities).
	●	Design and implement internal control flowcharts to strengthen segregation of duties (Control Activities; Risk Assessment).
	●	Increase staffing levels and competencies to enable appropriate separation of duties (Control Environment; Control Activities).
	●	Implement a formal checklist, review process, and controls over all journal entries and modifications to trial balances (Control Activities; Information & Communication).
	●	Hire additional experienced accounting and reporting professionals to prepare and approve consolidated financial statements and footnote disclosures in accordance with U.S. GAAP (Control Environment; Control Activities).
	●	Engage outside professional support to assist with SEC reporting requirements and special circumstances to ensure timely and accurate filings (Control Environment; Information & Communication).
	●	Establish a formal quarterly attestation process for managers and accounting staff to reinforce and monitor the use of control processes and workflows (Monitoring Activities; Information & Communication).
	●	Implement a formalized system for tracking control measures to reduce complexity and improve management’s review of control effectiveness (Monitoring Activities; Information & Communication).

While the Company has initiated these remediation efforts, not all measures have been fully implemented as of the date of this filing. We will continue to enhance our internal control framework, employ additional procedures, and utilize appropriate tools and resources to ensure that our consolidated financial statements are presented fairly, in all material respects.

The Company believes these remediation measures will significantly strengthen its internal control environment and provide the foundation to remediate the identified material weaknesses in future reporting periods.

Management’s Report on Internal Control over Financial Reporting

This Report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of the Company’s registered public accounting firm due to a transition period established by rules of the SEC for newly public companies. Additionally, our auditors will not be required to formally opine on the effectiveness of our internal control over financial reporting pursuant to Section 404 until we are no longer an “emerging growth company” as defined in the JOBS Act.

Changes in Internal Control over Financial Reporting

Other than the material weaknesses and remediation efforts mentioned above, there were no changes in our internal controls over financial reporting that occurred during the quarter ended June 30, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We may be subject to legal proceedings, investigations and claims incidental to the conduct of our business from time to time. We are not currently a party to any material litigation or other legal proceedings brought against us. We are also not aware of any legal proceeding, investigation or claim, or other legal exposure that has a more than remote possibility of having a material adverse effect on our business, financial condition or results of operations.

Item 1A. 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, 2024. The risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 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, 2024.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not Applicable

Item 5. Other Information

None

Item 6. Exhibits

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

No.		Description of Exhibit
3.1*		Certificate of Incorporation of the Registrant, dated October 31, 2023
3.2*		By laws of the Registrant, dated October 31, 2023
31.1*		Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

*	Filed herewith.

**	Furnished.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	SYNTEC OPTICS HOLDINGS, INC

Date: October 3, 2025	By:	/s/ Al Kapoor
	Name:	Al Kapoor
	Title:	Chairman and Chief Executive Officer
		(Principal Executive Officer)

Date: October 3, 2025	By:	/s/ Dean Rudy
	Name:	Dean Rudy
	Title:	Chief Financial Officer
		(Principal Accounting Officer and Financial Officer)

SEC Form 10-Q filed by Syntec Optics Holdings Inc.