Filed 2026-03-31 · Period ending 2025-12-31 · 46,015 words · SEC EDGAR
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# SYNTEC OPTICS HOLDINGS, INC. (OPTX) — 10-K **Filed:** 2026-03-31 **Period ending:** 2025-12-31 **Accession:** 0001493152-26-014180 **Source:** [SEC EDGAR](https://www.sec.gov/Archives/edgar/data/1866816/000149315226014180/) **Origin leaf:** 6a22906627ce1432e81b6e50886de08e2721c46a50f73798a54fe30501b9ceda **Words:** 46,015 --- ** UNITED STATES** **SECURITIES AND EXCHANGE COMMISSION** **Washington, D.C. 20549** **FORM 10-K** **(Mark One)** | | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | | **For the fiscal year ended December 31, 2025** **OR** | | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | | **For the transition period from** **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, New York | | 14606 | | | (Address of Principal Executive Offices) | | (Zip Code) | | **(585) 768-2513** Registrants 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 common stock at an exercise price of $11.50 per share, subject to adjustment | | OPTXW | | The Nasdaq Capital Market | | Securities registered pursuant to Section 12(g) of the Act: **None**. Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T 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, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one): | 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 has filed a report on and attestation to its managements assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued statements. Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrants executive officers during the relevant recovery period pursuant to Section 240.10D-1(b). Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No The aggregate market value of voting stock held by non-affiliates of the Registrant on June 30, 2025, based on the closing price of $1.34 for shares of the registrants common stock as reported by the Nasdaq Capital Market, was approximately $8,016,116. Shares of common stock beneficially owned by each executive officer, director, and holder of more than 10% of our common stock have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes. As of March 27, 2026, there were 36,994,164 shares of the registrants common stock, par value $0.0001 per share, issued and outstanding. **Documents incorporated by reference:** Portions of the registrants Proxy Statement relating to the 2026 Annual Meeting of Stockholders, scheduled to be filed with the Securities and Exchange Commission within 120 days after the end of the registrants fiscal year ended December 31, 2025, are incorporated by reference into Part III of this Annual Report on Form 10-K. | | | **TABLE OF CONTENTS** | | Page | | | Part I | 1 | | | | | | | Item 1. Business | 1 | | | | | | | Item 1A. Risk Factors | 13 | | | | | | | Item 1B. Unresolved Staff Comments | 27 | | | | | | | Item 1C. Cybersecurity | 27 | | | | | | | Item 2. Properties | 27 | | | | | | | Item 3. Legal Proceedings | 28 | | | | | | | Item 4. Mine Safety Disclosures | 28 | | | | | | | Part II | 28 | | | | | | | Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 28 | | | | | | | Item 6. [Reserved] | 28 | | | | | | | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations | 28 | | | | | | | Item 7A. Quantitative and Qualitative Disclosures about Market Risk | 37 | | | | | | | Item 8. Financial Statements and Supplementary Data | 37 | | | | | | | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 37 | | | | | | | Item 9A. Controls and Procedures | 37 | | | | | | | Item 9B. Other Information | 38 | | | | | | | Item 9C. Disclosure Regarding Foreign Jurisdiction that Prevent Inspections | 38 | | | | | | | Part III | 39 | | | | | | | Item 10. Directors, Executive Officers and Corporate Governance | 39 | | | | | | | Item 11. Executive Compensation | 39 | | | | | | | Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 39 | | | | | | | Item 13. Certain Relationships and Related Transactions, and Director Independence | 39 | | | | | | | Item 14. Principal Accountant Fees and Services | 39 | | | | | | | Part IV | 39 | | | | | | | Item 15. Exhibit and Financial Statement Schedules | 39 | | | | | | | Item 16. Form 10-K Summary | 40 | | | | | | | SIGNATURES | 41 | | | i | | **CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS** This Annual Report on Form 10-K contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 under Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as may, can, anticipate, assume, should, indicate, would, believe, contemplate, expect, seek, estimate, continue, plan, point to, project, predict, could, intend, target, potential and other similar words and expressions of the future. There are a number of important factors that could cause the actual results to differ materially from those expressed in any forward-looking statement made by us. These factors include, but are not limited to: | | | our ability to recognize the anticipated benefits of our recent Business Combination (as defined herein), which may be affected by, among other things, the factors listed below; | | | | | our ability to successfully increase market penetration into target markets; | | | | | the failure of the addressable markets that we intend to target to grow as expected; | | | | | the loss of any members of our senior management team or other key personnel; | | | | | the loss of any relationships with key suppliers, including suppliers in China; | | | | | the loss of any relationships with key customers; | | | | | our ability to protect our patents and other intellectual property; | | | | | the failure to successfully optimize solid-state cells or to produce commercially viable solid-state cells in a timely manner or at all, or to scale to mass production; | | | | | changes in applicable laws or regulations; | | | | | our ability to maintain the listing of our common stock on the Nasdaq Capital Market and Public Warrants (as defined herein) on the Nasdaq Capital Market; | | | | | the possibility that we may be adversely affected by other economic, business and/or competitive factors (including an economic slowdown or inflationary pressures); | | | | | the impact of the COVID-19 pandemic, including any mutations or variants thereof, and its effect on business and financial conditions; | | | | | our ability to raise additional capital to fund our inorganic growth; | | | | | our ability to generate revenue from future product sales and our ability to maintain profitability; | | | | | the accuracy of our projections and estimates regarding our expenses, capital requirements, cash utilization, and need for additional financing; | | | | | developments relating to our competitors and our industry; | | | | | our ability to engage target customers and successfully retain these customers for future orders; and | | | | | our current dependence on a single manufacturing facility. | | The foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or risk factors that we are faced with that may cause our actual results to differ from those anticipated in such forward-looking statements. Please see *Part IItem 1ARisk Factors* for additional risks which could adversely impact our business and financial performance. All forward-looking statements are expressly qualified in their entirety by this cautionary notice. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this report, or the date of the document incorporated by reference into this report. We have no obligation, and expressly disclaims any obligation, to update, revise or correct any of the forward-looking statements, whether as a result of new information, future events or otherwise. We have expressed our expectations, beliefs and projections in good faith and believe they have a reasonable basis. However, we cannot assure you that our expectations, beliefs or projections will result or be achieved or accomplished. | ii | | **Part I** **Item 1. Business** All references in this report to Syntec Optics, Syntec, the Company, we, us, or our mean Syntec Optics Holdings, Inc. and its subsidiaries unless stated otherwise or the context otherwise indicates. **Overview** Syntec Optics believes that photon enabled technologies are more than just a trend. Syntec Optics goal is to deliver impactful solutions for optics and photonics enabled solutions globally. We believe that the innovative design for manufacturing of our optics and photonics enabling products is ideally suited for the demands of modern original equipment manufacturers (OEMs) who rely on opto-electronics, light enabled devices, and intelligence that require high-precision and reliability. Ultimately, our vertically integrated advanced manufacturing platform of various, different but complimentary technologies offers our clients, across several end-markets, competitively priced and disruptive light-enabled technologies and sub-systems. Syntec Optics was formed more than two decades ago from the aggregation of three advanced manufacturing companies (Wordingham Machine Co., Inc., Rochester Tool and Mold, Inc. and Syntec Technologies, Inc.) that were started in the 1980s. In 2000, Syntec Technologies, Inc created the doing business as name of Syntec Optics to unify the three companies respective offerings under a single trade name. Wordingham Machine Co., Inc, and Rochester Tool and Mold, Inc. became wholly owned subsidiaries of Syntec Technologies, Inc. in 2018 and the three companies legally merged in December 2022 as Syntec Optics, Inc. Syntec Optics has addressed the optical needs of customers in defense, consumer, biomedical, and communications industries. Over the past 20 years, Syntec has been based in the Greater Rochester, New York area, and steadily growing and developing the unifying platform. Our intellectual property is protected with a portfolio of over 4 issued and/or pending patents, with several proprietary trade secrets surrounding our advanced manufacturing techniques. One in five employees has been with Syntec Optics for over a decade. Syntec Optics is vertically integrated from design and component manufacturing for lens system assembly to imaging module integration for opto-electronic system solutions. Making our own housings, mold tools, molding parts, and nanomachining allows close interaction and recut ability, enabling special techniques to hold tolerances 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. For defense applications, lighter weight optics are a critical advantage. For example, less weight on helmet equipment can reduce neck trauma for Army soldiers, and less equipment weight is beneficial for Air Force pilots. For biomedical applications, biocompatible polymer-based optics are considered safer. For satellite communications, the use of lighter weight metal and polymer optics reduces installation costs. 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 had focused on three key end-markets of defense, biomedical, and consumer, all with several mission-critical applications with strong tailwinds, then also added communications in 2023. We believe these end-markets to be acyclical based upon the Company having positive aggregate cash flow for the past decade in spite of economic downturns. We believe the consistency of revenues over the past decade from operations, independent of the trends of the general economy, and the mission-critical nature of our product offerings, is our basis that these markets are acyclical. We believe our platform is well positioned as the foundation for further organic and inorganic growth with quality earnings and high margin offerings. According to the SPIE Optics and Photonics most recent Industry Report (2024), optics is currently enabling 15% of the global economy, from smart phone cameras and extended reality devices to low orbit satellite telescopes to keeping our soldiers safe with night vision devices and patients healthy with intelligent light. This 15% figure represents the estimated value of the global optics and photonics products relative to annual global gross domestic product. As the world transitions to further adopt optically and photonically enabled products, we will continue our mission of developing innovative technology to serve these markets with affordable high-performance products globally. We intend to continue to focus on our core competencies of providing innovative technology, expanding our brand portfolio and providing affordable, sustainable and accessible optics and photonics enablers, all while being designed and manufactured in the United States. **Industry Background** For decades, optics and photonics have been enabling end-market products worldwide. Today, Syntec Optics light-enables products with a wide variety of materials from aluminum, crystals, glass, and polymers. Syntecs ground-breaking work in polymer-based optics starting in 2000 created numerous advantages over the incumbent glass-based optics used in todays markets: | | | Cost Possible 50-150x savings over glass | | | | | | | | | | Lightweight Ideal for head mounted applications | | | | | | | | | | Design flexibility Greater optical surface options | | | 1 | | | | | | | | Bio-compatible Medical field benefits | | | | | | | | | | Ease of assembly Ability to design in alignment features | | | | | | | | | | Design in features Eliminate mounting hardware | | | | | | | | | | Performs better than glass Functional parameters such as clarity, focus, contrast, brightness | | | | | | | | | | Superior scratch resistance Reduce damage probability | | | | | | | | | | Upgradability Reduced replacement/retrofit field cost | | | | | | | | | | Repeatability Same quality & performance every time | | Tailwinds have propelled Syntecs innovative hybrid optics where outside durable glass elements are unchanged but inside elements of optical assemblies are changed to polymers providing lighter weight advantage. Soldiers want lower weight on helmets that are now overloaded with devices. Glass is still an important medium, and Syntec Optics added glass optics in 2018, leveraging its expertise in molding technology. Certain glasses can be molded for visible and near IR spectrum. Glass molding has also emerged as a leading technology to address growing needs in mid wave infrared and long wave infrared, especially with growing limitations on availability of Germanium. Syntec Optics has offered aluminum or other metal precision-machined and nano-machined opto-mechanicals since 2000. Optical components often require thin-films coating. Syntec Optics developed unique coating technologies by 2014 to forward integrate. In the year 2000, Syntec Optics developed capabilities to assemble its components into sub-systems, integrating optics as well as adding electronics to the optics. **Addressable Markets** Optics and Photonics Industry Report 2024 estimated that in 2023, the manufacturing sector contributed approximately 27% of global gross domestic product (GDP) annually, or an estimated $28.3 trillion, and optics and photonics comprise a substantial amount of this market. The optics and photonics market, the value of light-enabled products and services, is estimated to be $16 trillion annually, and represents roughly 15% of the worlds economy. This 15% figure represents the estimated value of the global optics and photonics products relative to annual global gross domestic product. Within this end-market, it is estimated that global annual revenue for photonics-enabled products and services had exceeded $2.3 trillion in 2023. Photonics touches most sectors of our economy including consumer electronics (barcode scanners, DVD players, TV remote controls), telecommunications (fiber optics, lasers, switches), health (eye surgery, biomedical instruments, and imaging), industrial (laser cutting and machining), Defense and Security (night vision, infrared cameras, remote sensing, aiming) and entertainment (holography and cinema projection). We believe accelerating optics and photonics innovation will continue to drive economic growth and increase its share of the global GDP. The potential use of photonics in varied industries is fueling growth of the optics and photonics market. We believe sectors including telecom, transportation, healthcare, energy, aerospace, security, defense & space exploration, consumer, retail, electronics, food & agriculture, artificial intelligence software, and robotics are in the early stages of a dramatic transformation of scope and scale due to the unprecedented developments in advanced manufacturing of optics and photonics products, sub-systems, components, and materials. Continued mobility, intelligence, automation, sensing, and safety needs will accelerate in years to come, which will create a large market opportunity for such enabling businesses at the forefront of optics and photonics. The global optics and photonics sectors have experienced demand increasing use of photonics in various applications. The Optics & Photonics 2024 Industry Report estimated revenue growth for six of the top areas based on CAGR from 2012 to 2023. These areas are listed below, as examples of verticals that we intend to focus on: | | | Optical Communications (+11%), Widespread global adoption of cloud-based services is driving an expansion of telecom infrastructure in developing economies resulting in significant growth of the optical communications and networking markets. | | | | | | | | | | Sensing, monitoring, and control (+10%), autonomous systems and the internet-of-things continued to create demand for a wide variety of photonic sensors. Self-driving cars, drones, and other robotics systems utilize a wide range of photonic sensors and imaging systems, some of which are increasingly benefiting from embedded artificial intelligence. Developments in the emerging field of quantum technology should drive major advances in metrology, sensing, communications, and computing, creating what we believe will be a multitude of new opportunities in photonics. | | | 2 | | | | | | | | Advanced manufacturing (+7%), gains in this segment were led by lasers for materials processing while robotics and vision technologies maintained their momentum as did implementation of 3D printing/additive manufacturing. Photonics-based production tools including lasers, optical metrology, and machine vision combined with adoption of rapid prototyping and Industry 4.0 are driving big manufacturing changes in industries like aerospace and automobiles. | | | | | | | | | | Semiconductor processing (+7%), driven by demand for optical processing and metrology equipment. Opto-electronics and mobility, integrated photonics circuits are beginning to address applications that were typically addressed by integrated electronic circuits. POC Biosensing, terabit internet, lidar based radar, and telecom are areas that are being disrupted due to reduced cost, size, weight, and power consumption while still improving performance and reliability. Design, develop, and manufacturing processes are similar to micro-electronics. Integrated photonics is envisioned to play the role in industry 4.0 what electronic integrated circuits did in industry 3.0. | | | | | | | | | | BioMedical (+9%), growth in diagnostic imaging, digital pathology, in vitro diagnostics, and point-of-care diagnostics led broad-based gains across this segment. Food safety testing also saw a significant uptick. Looking ahead, cost-effective photonics-based diagnostic and therapeutic biomedical devices are achieving higher market penetration. | | | | | | | | | | Defense, safety, and security (+6%), driven by gains in more than 30 sub-segments combined with substantial upswings in video surveillance, perimeter security and sensing, and investment in equipment for directed energy systems. Infrared systems, hyperspectral imaging, and laser-based countermeasures are all deployed, while laser weapons are emerging as a real near-term possibility. We believe there may be increased demand for aiming, scoping, and targeting using optics and photonics. | | **Revolutionary Advanced Manufacturing Tailwinds** This fourth industrial revolution (Industry 4.0), which encompasses the internet-of-things and smart manufacturing, marries physical production and operations with digital technology, machine learning / artificial intelligence and big data to create a more holistic and connected ecosystem for companies that focus on manufacturing and supply chain management. As Industry 4.0 continues to bring changes in manufacturing, technological advancements leading to innovative photonics-enabled products, and photonics are improving manufacturing performance with photonics-enabled technology. We expect Industry 4.0 to transform production by driving faster, more flexible and more efficient processes which will be monetized by companies through the production of higher-quality goods at reduced costs. Beyond the traditional industrial automation, new transforming products from unmanned aircraft and driverless cars, smart robots in the operating rooms and artificial intelligence of organ and tissue imaging, to augmented and virtual reality, increasingly require optics and photonics imagers, sensors, and detectors. We expect this trend to be especially pronounced in the United States, which has seen automation as a way to be globally competitive in spite of rising wages. Optics and photonics are an integral aspect of the ongoing advancement of traditional manufacturing and industrial practices. Optics and photonics can reduce cost, size, weight, and power consumption in all spheres of technology that is making us smarter. These include our content, its context, inter-connection for exchange, and various types of content from imaging to detection and sensing. **Syntec Platform Overview** Our unifying platform is a key differentiator. We believe the unifying platform is an aggregation of horizontal and vertical optics and photonics capabilities that span through the value-chain across materials, spectrum and advanced manufacturing processes. This unifying platform works by providing customers with several manufacturing capabilities in one location that saves time and reduces logistical burdens and costs. In 1999 Syntec brought precision machining capabilities into the company with the addition of Wordingham Technologies, enabling broader capabilities for integrated optical assemblies. The acquisition of Rochester Tool and Mold provided control over making very precise tools for molded polymer components and molded glass components in hybrid systems. Close collaboration of these acquired entities began in 2000 and then all three acquired companies moved into one building in the city of Rochester by 2016. Investments from the cash flow and the unification was achieved to offer customers vertical and horizontal integrated critical capabilities under one-roof for mission critical sub-system solutions with well demonstrated metrology in both clean room optics and electro-optics assemblies. Thin film coating laboratory and glass molding technique was developed from grounds up organically to further support the optical element performances. Altogether, such a vertically and horizontal integrated company offers a further unification platform for consolidation through further acquisition in a fragmented industry of advanced manufacturers for mission critical application of optics and photonics even beyond biomedical, defense, and consumer end-markets. Syntec Optics has built its brand over two decades and is known as a leader to OEMs in optics and photonics sub-systems production. The dome was made from glass-filled polymer that replaced Sapphire for domes that had to not only meet high optical performance expected from windows, but be light weight, less expensive and rapidly scale. Ever since, we have ramped up rapidly many devices ranging from blood analyzers for patients in hospitals to night vison goggles to keep soldiers safe. The brand has been very visible at the pivotal show for optics and photonics solution providers annually in San Franciscos Photonics West trade show. | 3 | | | | | We currently offer a number of vertically integrated advanced manufacturing processes that deliver to our customers optically enabled products serving mission critical applications. * Syntecs vertical integration strategy delivers many advantages, including greater economies of scale, lower variable production costs, decreased logistics costs and quality concerns. Advantages of vertical integration specific at Syntec include: **Positive differentiation is created.** | | | Vertical integration creates predictability because more information is available to our team internally. There is more access to supply chain and production inputs. By being in more control, from start to finish, Syntec can function with stability and adapt quickly to changes so that the most effective and profitable results can be achieved. | | **Asset investments can focus on specialization.** | | | Instead of seeking vendors and contractors with specific skill sets, vertical integration allows us to invest into internal assets that can specialize in the skill set that is required. This allows us to differentiate ourselves from others within its industry, creating a specific brand message and value proposition that resonates consistently with our customer base. | | **Transaction costs are lower throughout the supply chain.** | | | With a high level of vertical integration, we can reduce the transaction costs that occur throughout our supply chain. This is done by removing cascaded margins imposed when dealing with suppliers and vendors that are not part of our integrated process. | | **Quality assurance can be built into the system.** | | | Vertical integration allows us to put more eyes on the quality of what is being produced. From the initial supply to the final sale, a better Q/A process within our system creates a value proposition that is more reliable. In return, greater customer satisfaction occurs, which builds brand loyalty and return revenues. | | | 4 | | | | | **It opens new markets.** | | | Vertical Integration can open new markets to the business. By partnering with or purchasing other vendors, proprietary information, property, or technologies can create local access that may have been otherwise unavailable. When this occurs, more profits can be achieved with a broader base of business to pursue. | | **Our Competitive Strengths** We believe that we possess the largest share in the markets we operate in, due to our following business strengths, which distinguish us in this competitive landscape and position us to capitalize on the anticipated continued growth in the optics and photonics enabled market: | | | Premier Polymer-Based Optics Technology. Each of our innovative optics features custom designed components to enhance optical clarity and performance in its particular application or setting. Syntec has assembled a world class optical and opto-mechanical design team capable of executing on the most challenging design projects. | | | | | | | | | | Extensive, Growing Patent Portfolio. We have developed and filed patent applications on commercially relevant aspects of our business including optical systems and production processes. We own three active issued patents, with an additional one patent applications pending on manufacturing techniques in the United States. | | | | | | | | | | Proven Go-To-Market Strategy. We have successfully established a direct-to-business platform and have developed strong working relationships with Tier 1 manufacturers and major OEMs, custom designing products for new and existing applications. | | | | | | | | | | Established Customer Base with Brand Recognition. We have a growing customer base featuring OEMs, distributors, Tier 1 suppliers across diverse end-markets and mission critical applications in Defense, Consumer and BioMed. The quality of our products has helped drive adoption from additional end-markets in low earth satellite communication with visibility for future growth through further expansion of our existing relationships. | | | | | | | | | | High Quality Manufacturing Process. Unlike competitors that outsource their manufacturing processes, our optics are designed, assembled and tested in the United States, ensuring that our manufacturing process is thoroughly tested, and our optics are of the highest quality. | | | | | | | | | | Drop-In Replacement. Our optics modules are largely designed to be drop-in replacements for traditional glass-based optics, which means that they are designed to fit into existing frames with little or no adjustments. Our target applications are enabling mission critical devices in demanding environments. We offer a full line of compatible components and accessories to simplify the replacement process and provide customer service to ensure a seamless transition to Low SwaP-C optics. Over their lifetime, our optics are significantly cheaper from both an absolute cost and a cost per optic perspective. These lifetime costs, at current costs and capacity, will naturally drop as we continue to take advantage of economies of scale. | | **Our Growth Strategy** We intend to leverage our competitive strengths, technology leadership and market share position to pursue our growth strategy through the following: | | | Expand Product Offerings. In the short-term, our aim is to further diversify our product offerings to give consumers, as well as OEMs and distributors, more options for additional applications. This will be accelerated by the expansion of our production capacity through organic and inorganic growth. | | | 5 | | | | | | | | Expand End-markets. Syntec Optics plans to further consolidate 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 entered the communications end-market in 2023. Syntec Optics is currently engaged as a supplier for a U.S. Department of Commerces 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. | | | | | | | | | | Commercialize Optics and Photonics Enabling Technology. We believe optics and photonics enabling technologies offer significant advantages to glass optics and electronics enabled products currently on the market, with the potential to be lighter, smaller, higher-performing and cheaper. | | Our core growth strategy also involves inorganic growth with complementary businesses to augment our existing unifying platform. Syntec plans to run a disciplined process to arrive at a targeted list of companies it would like to acquire. Selected companies will have a good management team and ownership that can apply industry findings to build the next great public company that enables light. Such a company shall serve as a platform to add more diverse end-markets, achieve stable earnings growth, and build an R&D pipeline that brings sustainable future growth. Optics and photonics companies are not clearly categorized in a small number of SIC codes, but Syntecs long-term relationships with companies led to a list of 100+ SICs where optics and photonics companies live. Quality of earnings, financial reporting, forecasting, controls, and systems technology will also be used in the selection process for the roll-up. **Our Products and Technology** Syntec has built a solid foundation over many decades of developing new processes that produce various geometries and shapes of optical elements used in both visible and IR spectrums. Syntec started with custom polymer optics to find a foothold and then expanded into various materials for the Biomedical, Defense & Security, and Consumer/Industrial sectors. In 2023 it added communications as an additional end-market. Syntec is at the forefront of innovation in single point diamond turning and has been pushing the frontiers of polymer and other materials for use in a wide variety of optics applications and requiring tight tolerances. Syntecs pioneering polymer-based optics provided numerous advantages compared to incumbent products, such as glass-based optics. Polymer-based optics are smaller sized, lower weight, lower in power consumption, and a high cost-effective optical solution. Polymer-based optics use polymers throughout the fabrication process which offers high production volume and fast repeatability. Other advantages of polymers are their high impact resistance; polymers do not split like glass, making this type of optics highly durable and cost effective in applications such as heads-up displays, goggles, and biomedical disposable optics. Another key advantage we offer customers is fast prototyping. While advanced molding techniques are used for high volume productions and beta samples, we use nanomachining of polymers and other materials for quick alpha samples. We further increased the competitive advantage by providing lower cost by manufacturing with in-house lower cost glass molded glass. Often in cameras or optics sub-systems, glass and polymer elements are combined for a lower cost solution with durability and higher performance. Thanks to their low density or low weight by volume, polymers are well adapted for making cutting-edge-technology products lighter and smaller. Polymers are between two and half and five times lighter than comparable glass products and are suitable for difficult and sophisticated refractive, reflective, and diffractive substrates with spherical, aspherical, and cylindrical prescriptions, thus reducing the number of optical components needed in a given optical system. Molding is the most repeatable, consistent, and economical way to produce complex-shaped optics in large volume or to integrate them onto a common substrate. Optical-grade polymers exhibit high light transmittance and are comparable to high-grade glasses. The optical-grade polymer market is growing rapidly; new polymers with low birefringence as well as higher and more stable refractive indices are available, offering design flexibility not possible with glass optics on their own. **Customers** Our components are used in a variety of applications ranging from biometric, imaging, illumination, scanning, projection, blood analysis, point of care diagnosis and fingerprint identification. Our components are also used in DNA sequencing, laser cutting, thermal imaging, retinal eye scanning, military applications and blood analysis. By investing in new technology and reliable equipment Syntec Optics provides low-cost precision solutions for challenging optical needs. We have deep, long-standing relationships with many of our customers. Our customers primarily utilize our products for defense and security, optical diagnosis and imaging and projection lenses and heads-up displays. We work directly with customers to ensure compatibility with existing designs and collaborate on custom design for new applications. | | | Defense Optics night vision goggles, missile systems and military LED lighting are just a few examples of the mission critical components used by our defense and security customers | | | | | | | | | | Biophotonics blood gas analyzer, bacteria analyzer and HIV detectors are used in medical procedures | | | | | | | | | | Communication Optics low earth orbit satellite transmitters, receivers and high-precision mirrors are used in high-speed data transmission processes | | We continue to seek to grow our customer base within our existing segments; however, we also believe that our products are well suited to address the needs in additional segments, including semiconductor, communication, advanced manufacturing, sensing, lighting Solar-PV, and displays and we will seek to expand our market share in these segments in the future. **Facilities** Our corporate headquarters is in an approximately 90,000 square foot facility that we lease in Rochester, New York. This facility is leased from ELR Associates, LLC, a fully consolidated variable interest entity of Syntec Optics Holdings Inc. The lease for this building was entered into on July 23, 2015 for a 10-year period and has provisions for two extensions of 5 years each. The Company has exercised the first extension (to July 2030), and we have the option to extend for an additional five-year term. We believe we will be able to obtain additional space on commercially reasonable terms. | 6 | | | | | **Supplier Relationships** We have a well-established global supply chain that underlies the sourcing of the components of our products, although we source domestically whenever possible. We follow a lean manufacturing process and align our purchases with customer backlog. We prefer to pre-order in advance for the year to ensure adequate supply. For nearly all our components, we ensure that we have alternate suppliers available. As a result of our long-standing relationships with our suppliers, we are able to source materials on favorable terms within reasonable lead-times. **Sales and Marketing** Our proven sales and marketing strategy has allowed us to penetrate our current end-markets efficiently. We use a variety of methods to educate consumers on the benefits of optics and photonics-enabled technologies and why they are a better investment compared to electronically enabled technologies found in our target end-markets today. Through information found on our website and social media platforms that educate consumers on the benefits of optics and photonics-enabled technologies, we assist consumers on how they may benefit from the advanced manufacturing processes and technologies that we offer. We use a multi-pronged sales and marketing strategy to ensure that the Syntec Optics brand is at the forefront of its respective end-markets. We have established strong relationships, particularly in the defense and biomedical industries through participation in trade shows and other sponsored industry events, which have allowed us to reach customers to ensure we are aware of evolving customer preferences. We are then able to leverage this customer feedback to collaborate on custom designs for new and existing applications. We value our customer relationships. Our website and our customer service are key elements to our sales strategy. Our website enables customers to purchase off the shelf optics and provides access to a range of product information, technical benefits, and advanced manufacturing services. We have a team of experts dedicated to supporting our customers sales, technical and service needs. **Competition** Syntec is a vertically integrated advanced manufacturer of optics and photonics. At the public company level, competitors may have Syntecs suite of advanced manufacturing techniques under its corporate umbrella, but not likely under the same roof. This differentiation allows Syntec to successfully serve OEM and Tier 1 suppliers in the Defense, Biomedical and Consumer/Industrial end-markets. Advanced manufacturers in the optics and photonics space enable end-products generally through a combination of materials, electromagnetic spectrum or processes. Many of Syntecs competitors specialize in aspects of these three areas and may not have in-house capabilities across all three areas. For example, some of Syntecs competitors specialize in precision motion optics, vision specialists, high-resolution spectral cameras, electro-optical aerospace systems and or machine vision systems. Syntec can provide solutions to each of these specialty areas by deploying its highly trained employee base and its patented intellectual property and trade secret processes. | 7 | | | | | In certain instances, Syntec may collaborate on design and development of mission critical sub-components in its competitors products given its broad advanced manufacturing capabilities. Syntec is excited to bring its unifying value proposition to the public market. **Intellectual Property** The success of our business and our technology leadership is supported by our proprietary optics and photonics enabling advanced manufacturing processes and technologies. We have received patents and filed patent applications in the United States and other jurisdictions to provide protection for our technology. We rely upon a combination of patent, trademark and trade secret laws in the United States and other jurisdictions, as well as license agreements and other contractual protections, to establish, maintain and enforce rights in our proprietary technologies. In addition, we seek to protect our intellectual property rights through non-disclosure and invention assignment agreements with our employees and consultants and through non-disclosure agreements with business partners and other third parties. As of December 31, 2025 and as of December 31, 2024, we owned three active issued patents and one pending patent applications. The patents and patent applications cover the United States. We periodically review and update our patent portfolio to protect our products and newly developed technologies. US Patent 9192298B2 Contact lens for intraocular pressure measurement is an active worldwide application patent that is assigned to and owned by Syntec Optics. The patent was granted in November 2015 and expires in April 2034. US Patent 10052731B2 Flycutter having forced air cleaning is an active worldwide application patent that is assigned to and owned by Syntec Optics. The patent was granted in August 2018 and expires in December 2036. US Patent 11383414B2 Parts degating apparatus using laser is an active worldwide application patent that is assigned to and owned by Syntec Optics. The patent was granted in July 2022 and expires in August 2040. US Patent Provisional 63/449,362 Imaging Apparatus with Thermal Augmentation is a provisional United States application. The provisional patent application was filed on March 2, 2023. We periodically review our development efforts to assess the existence and patentability of new intellectual property. We pursue the registration of our domain names and trademarks and service marks in the United States and other jurisdictions. **Government Regulations** We currently operate from a dedicated leased manufacturing facility located in Rochester, New York. We have never owned any facility at which we operated. Operations at our facilities are subject to a variety of environmental, health and safety regulations, including those governing the generation, handling, storage, use, transportation, and disposal of hazardous materials. To conduct our operations, we have to obtain environmental, health and safety permits and registrations and prepare plans. We are subject to inspections and possible citations by federal, state, and local environmental, health, and safety regulators. We have policies in place to assure compliance with our obligations (for example, machine guarding, hot work, hazardous material management and transportation). We train our employees and conduct audits of our operations to assess our fulfillment of these policies. We are also subject to laws imposing liability for the clean up and release of hazardous substances. Under the law, we can be liable even if we did not cause a release on real property that we lease. We believe we have taken commercially reasonable steps to avoid such liability with respect to our current leased facilities. On July 4, 2025, the One Big Beautiful Bill Act, commonly referred to as OBBBA, was signed into law as Public Law No. 119-21, enacting sweeping reforms to domestic and international taxation. This legislation includes several provisions of significance to domestic manufacturing companies with R&D expenditures: OBBBA restores full immediate tax deductibility for domestic research and experimental expenses incurred in 2025 and beyond. This reverses the five-year amortization requirement previously mandated under the Tax Cuts and Jobs Act. The law also permits taxpayers to accelerate unamortized domestic R&D expenditures incurred from January 1, 2022, through December 31, 2024, over one or two years, potentially resulting in adjustments to prior-year tax filings. The law enshrines 100% first-year bonus depreciation for qualified tangible personal property placed into service after January 19, 2025, including qualified production property (QPP) used in manufacturing facilities, potentially offering accelerated write-offs of capital investments. Under U.S. GAAP, R&D costs incurred are expensed as incurred per ASC 730. The immediate tax expensing afforded by OBBBA may reduce book-tax timing differences, simplify tax accounting, and align taxable income more closely with reported financial results. Where plausible, the Company plans to take advantage of these changes in 2025 and beyond. Presently, the impact is not significant, given our current loss position. | 8 | | | | | **Environmental Matters** We are subject to domestic and foreign environmental laws and regulations governing our operations, including, but not limited to, emissions into the air and water and the use, handling, disposal and remediation of hazardous substances. A certain risk of environmental liability is inherent in our production activities, operation of our systems and the disposal of our systems. These laws and regulations govern, among other things, the generation, use, storage, registration, handling and disposal of chemicals and waste materials, the presence of specified substances in electrical products, the emission and discharge of hazardous materials into the ground, air or water, the clean up of contaminated sites, including any contamination that results from spills due to our failure to properly dispose of chemicals and other waste materials and the health and safety of our employees. **Export and Trade Matters** We are subject to anti-corruption laws and regulations imposed by governments around the world with jurisdiction over our operations, including the U.S. Foreign Corrupt Practices Act, as well as the laws of the countries where we do business. We are also subject to various trade restrictions, including trade and economic sanctions and export controls, imposed by governments around the world with jurisdiction over our operations. For example, in accordance with trade sanctions administered by the U.S. Department of Treasurys Office of Foreign Assets Control and export controls administered by the U.S. Department of Commerce, we are prohibited from engaging in transactions involving certain persons and certain designated countries or territories, including Cuba, Iran, Syria, North Korea and the Crimea Region of Ukraine. In addition, our systems may be subject to export regulations that can involve significant compliance time and may add additional overhead cost to our systems. In recent years the United States government has a renewed focus on export matters. For example, the Export Control Reform Act of 2018 and regulatory guidance thereunder have imposed additional controls and may result in the imposition of further additional controls, on the export of certain emerging and foundational technologies. Our current and future systems may be subject to these heightened regulations, which could increase our compliance costs. See Risk FactorsWe are subject to U.S. and foreign anti-corruption and anti-money laundering laws and regulations and could face criminal liability and other serious consequences for violations, which could adversely affect our business, financial condition and results of operations for additional information about the anti-corruption and anti-money laundering laws that may affect our business. **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. See Risk FactorsAny future litigation against us could be costly and time-consuming to defend. **Employees and Human Capital Resources** As of December 31, 2025, we have 164 employees. We have adopted our Code of Ethics to support and protect our culture, and we strive to create a workplace culture in line with our values: Integrity, Humility, Innovation, Discipline, and Continuous Improvement and help our customers Change the way the world views itself, one optic at a time. As part of our initiative to retain and develop our talent, we focus on these key areas: | | Safety Employees are regularly educated on safety around their workspaces, and employees participate in volunteer roles on a safety committee, and in emergency readiness roles. We have a dedicated safety coordinator who tracks and measures our performance and helps us benchmark our safety programs against our peers. | | | 9 | | | | | | | Collaboration As we grow, opportunities for cross-functional collaboration may not be as organic as they used to be. We have responded to that challenge by staying mindful and acting intentionally to gather cross-functional input on new initiatives and continuous improvement efforts. | | | | | | | | Continuous Improvement We apply continuous improvement measure to processes as well as people. We encourage professional development of our employees, through ongoing learning, credentialing, and collaboration with their industry peers. | | Attracting and retaining high quality talent at every level of our business is crucial to our continuing success. We have developed relationships with the University of Rochester to further our recruitment reach. We provide competitive compensation and benefit packages, including performance-based compensation that rewards individual and organizational achievements. **Earnout Merger Consideration** Additional contingent shares (Contingent Earnout Shares) may be payable to each holder of shares of Legacy Syntec Common Stock in the Merger, subject to achieving specified milestones, up to an aggregate of 26,000,000 additional shares of Common Stock in three tranches. Syntec Optics Holdings, Inc. will issue 26,000,000 additional shares of Common Stock (the Contingent Earnout) to Legacy Syntecs existing stockholders, which Contingent Earnout shares will vest upon achievement of the targets set forth in Section 3.4(b) of the Business Combination Agreement. The Contingent Earnout shares will vest upon the Companys Common Stock achieving the following stock trading price thresholds (the Contingent Earnout Trigger Price) following the Closing: one-third (1/3rd) at $12.50 per share, one-third (1/3rd) at $14.00 per share, and one-third (1/3rd) at $15.50 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like). The Contingent Earnout shares which remain unvested as of the date five (5) years from the Closing (the Earnout Period) will be deemed cancelled and no longer subject to vesting. The achievement of the Contingent Earnout Trigger Price will be based on either (a) the closing price of the Companys common stock equaling or exceeding the specified threshold for twenty (20) trading days within any thirty (30)-trading day period following the Closing, or (b) upon the consummation of a change of control transaction in which the per share price implied in such change of control transaction is greater than or equal to the applicable threshold. All Contingent Earnout shares will be issued pro rata to Legacy Syntec stockholders in proportion to their owned shares of Legacy Syntec common stock immediately prior to the Closing. Syntec Optics Holdings, Inc. will issue up to 2,000,000 shares of Common Stock (the Performance-based-Earnout) to members of the management team of the Company from time to time, to the extent determined by the Board of Directors in its sole discretion, to be issued as restricted stock units or incentive equity grants pursuant to the Incentive Plan described below in Note 14. The Performance-based Earnout shares shall be awarded by the Board of Directors based on achieving the following performance thresholds following the Closing: one-half (1/2) at achieving revenue of $75 million and adjusted EBITDA of $22.6 million based on 2024 financial audited statements, and one-half (1/2) at achieving revenue of $196 million and adjusted EBITDA of $50.6 million based on the 2025 financial audit statement. No such awards have been made as of December 31, 2025. A description of the Merger and the terms of the Business Combination Agreement are included in the proxy statement/prospectus, dated October 5, 2023 (the Proxy Statement/Prospectus) as filed with the Securities and Exchange Commission (the SEC) in the section entitled Proposal No. 1 The Business Combination Proposal* of the Proxy Statement/Prospectus. The foregoing description of the Earnout Merger Consideration is a summary only and is qualified in its entirety by the full text of the Business Combination Agreement, a copy of which is attached hereto as Exhibit 2.1, which are incorporated herein by reference. | 10 | | | | | **Item 1.01 Entry into a Material Definitive Agreement.** *Debt Financing* **Credit Agreement with M&T Bank** On November 8, 2023, Syntec Optics Holdings, Inc. (the Company) entered into an Amended and Restated Credit Agreement (the Credit Agreement) with M&T Bank (the Lender) to refinance its prior indebtedness. Proceeds from the refinancing were used to repay approximately $6.1 million under a prior revolving credit facility, approximately $1.1 million under a prior term loan, approximately $0.9 million under a prior mortgage loan, and to pay related transaction expenses. The Credit Agreement provides for: | | A revolving credit facility with a commitment currently set at $7.5 million and maturing in November 2026; | | | | | | | | | Term and equipment loan facilities (which, as described below, were repaid in November 2025). | | Borrowings under the revolving facility bear interest at a rate equal to one-month Secured Overnight Financing Rate (SOFR) plus an applicable margin of 3.00%. The Credit Agreement contains customary representations and warranties, affirmative and negative covenants, and financial covenants, including a minimum fixed charge coverage ratio and a maximum total leverage ratio. **Covenant Waivers and Amendments** During 2025 and 2024, the Company obtained certain waivers and amendments related to its financial covenants. As previously disclosed, the Company was not in compliance with certain financial covenants during 2024 and received amendments and waivers from the Lender, including modifications to leverage ratio thresholds and temporary suspension of the fixed charge coverage ratio for a specified period. As of September 30, 2025, the Company was not in compliance with certain financial covenants under the Credit Agreement. On November 12, 2025, the Company received a written waiver from M&T Bank with respect to those covenant defaults. In connection with the waiver, the Company agreed to: | | Repay approximately $1.37 million of outstanding term and equipment indebtedness; | | | | | | | | | Reduce the revolving credit commitment from $8.0 million to $7.5 million; and | | | | | | | | | Execute subordination agreements with respect to certain shareholder indebtedness. | | No amendment fees were paid to M&T Bank in connection with the November 2025 waiver or the December 2025 amendment; however, the Company paid a prepayment premium of $63,416 in connection with the repayment of term and equipment debt. Effective December 31, 2025, the Company entered into a Second Amendment to the Amended and Restated Credit Agreement and executed a replacement revolving note reflecting the previously agreed reduction of the revolving credit commitment to $7.5 million. The amendment did not modify the maturity date (November 2026) or the existing financial covenant thresholds applicable for 2026. As of December 31, 2025, and through the date of this filing, the Company is in compliance with the financial covenants under the Restated Credit Agreement. | 11 | | | | | **Repayment of Term and Equipment Debt; Shareholder Note** On November 12, 2025, the Company repaid in full two term and equipment notes with M&T Bank in the aggregate amount of $1,368,732.49. To fund this repayment, the Company entered into a subordinated term note with its majority stockholder in the principal amount of $1,268,732.49 (the Shareholder Note). The Shareholder Note: | | Was issued by Syntec Optics Holdings, Inc.; | | | | | | | | | Bears interest at 6.953% per annum; | | | | | | | | | Amortizes over 35 monthly payments; | | | | | | | | | Matures on October 31, 2028, at which time all remaining principal and accrued interest are due; and | | | | | | | | | Is expressly subordinated to the Companys obligations under the Credit Agreement. | | The Company and the majority stockholder entered into a subordination agreement with M&T Bank. The subordination agreement prohibits prepayments of the Shareholder Note and restricts payments to interest only, subject to prior written approval by M&T Bank, which may be granted or withheld in the Lenders discretion. There are no cross-default provisions between the Shareholder Note and the Credit Agreement. **Outstanding Borrowings and Covenant Status** As of December 31, 2025, the Company had $6,763,863 outstanding under the revolving credit facility. As of December 31, 2025, the Company was in compliance with all applicable financial covenants under the Credit Agreement. **Warrant Agreements** The shares issuable upon exercise of the Warrants have customary registration rights, which are contained in the respective forms of the Warrants, requiring the Company to file and keep effective a resale registration statement registering the resale of the shares of Common Stock underlying the Warrants. The foregoing description of the Warrants is a summary only and is qualified in its entirety by reference to the full text of the Warrants, copies of which are attached hereto as Exhibit 4.4, respectively, and are incorporated herein by reference. *Related Agreements* Concurrently with the execution of the Business Combination Agreement, OmniLit, Legacy Syntec and the Sponsor entered into a sponsor support agreement, a copy of which is attached as Exhibit 10.4 and is incorporated herein by reference. *Indemnification of Directors and Officers* On the Closing Date, in connection with the consummation of the Transactions, the Company entered into indemnification agreements with each of its directors and executive officers. These agreements, among other things, will require the Company to indemnify the Companys directors and executive officers for certain expenses, including attorneys fees, judgments and fines incurred by a director or executive officer in any action or proceeding arising out of their services as one of the Companys directors or executive officers or any other company or enterprise to which the person provides services at the Companys request. The foregoing description of the indemnification agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the form of indemnification agreement, a copy of which is attached hereto as Exhibit 10.7 and is incorporated herein by reference. *Registration Rights Agreement* On the Closing Date, in connection with the consummation of the Transactions, the Company entered into the Amended and Restated Registration Rights Agreement (the Registration Rights Agreement) with the Sponsor, OmniLits officers, directors, initial stockholders, non-redemption agreement investors (collectively, the Insiders) and certain Legacy Syntec stockholders. | 12 | | | | | The foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Registration Rights Agreement, a copy of which is attached hereto as Exhibit 4.6 and is incorporated herein by reference. **Corporate Information** The mailing address of our principal executive office is 515 Lee Rd., Rochester, New York 14606, and our telephone number is (585) 768-2513. We file periodic reports, proxy statements and other information with the SEC. Such reports, proxy statements and other information may be obtained, free of charge, by visiting the SECs website at www.sec.gov that contains all of the reports, proxy and information statements, and other information that we electronically file or furnish to the SEC. We also maintain a website at www.syntecoptics.com where we make available the proxy statements, press releases, registration statements and reports on Forms 3, 4, 8-K, 10-K and 10-Q that we (and in the case of Section 16 reports, our insiders) file with the SEC. These forms are made available as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. Press releases are also issued via electronic transmission to provide access to our financial and product news, and we provide notification of and access to voice and internet broadcasts of our quarterly and annual results. Our website also includes investor presentations and corporate governance materials. **Item 1A. Risk Factors** *An investment in our common stock is speculative and involves a high degree of risk including the risk of a loss of your entire investment. You should carefully consider the risks and uncertainties described below and the other information contained in this report and our other reports filed with the Securities and Exchange Commission (the SEC). The risks set forth below are not the only ones facing us. Additional risks and uncertainties may exist that could also adversely affect our business, operations and financial condition. If any of the following risks actually materialize, our business, financial condition and/or operations could suffer. In such event, the value of our common stock could decline, and you could lose all or a substantial portion of the money that you pay for our common stock.* **Summary of Risk Factors** **Risks Related to Cybersecurity, Technology, Proprietary Techniques and Intellectual Property** **** **We rely heavily upon proprietary techniques and intellectual property portfolio. If we are unable to protect our proprietary and intellectual property rights, our business and competitive position would be harmed.** **** We may not be able to prevent unauthorized use of our proprietary techniques and intellectual property, which could harm our business and competitive position. We rely upon a combination of the proprietary techniques and intellectual property protections afforded by patent, copyright, trademark and trade secret laws in the United States and other jurisdictions to establish, maintain and enforce rights in our proprietary technologies. In addition, we seek to protect our proprietary techniques and intellectual property rights through non-disclosure and invention assignment agreements with our employees and consultants, and through non-disclosure agreements with business partners and other third parties. Despite our efforts to protect our proprietary rights, third parties may attempt to copy or otherwise obtain and use our proprietary techniques and intellectual property. Monitoring unauthorized use of our proprietary techniques and intellectual property is difficult and costly, and the steps we have taken or will take to prevent unauthorized use may not be sufficient. Any enforcement efforts we undertake, including litigation, could be time-consuming and expensive and could divert managements attention, which could harm our business, results of operations and financial condition. In addition, available proprietary techniques and intellectual property laws and contractual remedies in some jurisdictions may afford less protection than needed to safeguard our proprietary techniques and intellectual property portfolio. Proprietary techniques and intellectual property laws vary significantly throughout the world. The laws of a number of foreign countries do not protect proprietary techniques and intellectual property rights to the same extent as do the laws of the United States. Therefore, our proprietary techniques and intellectual property rights may not be as strong, or as easily enforced, outside of the United States, and efforts to protect against the unauthorized use of our proprietary techniques and intellectual property rights, technology and other proprietary rights may be more expensive and difficult to undertake outside of the United States. In addition, while we have filed for and obtained certain proprietary techniques and intellectual property rights in commercially relevant jurisdictions, we have not sought protection for our proprietary techniques and intellectual property rights in every possible jurisdiction. Failure to adequately protect our proprietary techniques and intellectual property rights could result in competitors using our proprietary techniques and intellectual property to make, have made, use, import, develop, have developed, sell or have sold their own products, potentially resulting in the loss of some of our competitive advantage and a decrease in our revenue, which would adversely affect our business, prospects, financial condition and operating results. | 13 | | | | | **Our website, systems, and the data we maintain may be subject to intentional disruption, security incidents, or alleged violations of laws, regulations, or other obligations relating to data handling that could result in liability and adversely impact our reputation and future sales.** **** We expect to face significant challenges with respect to information security and maintaining the security and integrity of our systems, as well as with respect to the data stored on or processed by these systems. Advances in technology, and an increase in the level of sophistication, expertise and resources of hackers, could result in a compromise or breach of our systems or of security measures used in our business to protect confidential information, personal information, and other data. The ability to conduct our business and operations, depend on the continued operation of information technology and communications systems, some of which we have yet to develop or otherwise obtain the ability to use. Systems used in our business (including third-party data centers and other information technology systems provided by third parties) are and will be vulnerable to damage or interruption. Such systems could also be subject to break-ins, sabotage and intentional acts of vandalism, as well as disruptions and security incidents as a result of non-technical issues, including intentional or inadvertent acts or omissions by employees, service providers, or others. Some of the systems used in our business will not be fully redundant, and our disaster recovery planning cannot account for all eventualities. Any data security incidents or other disruptions to any data centers or other systems used in our business could result in lengthy interruptions in our service. **Cyberattacks and security vulnerabilities could lead to reduced revenue, increased costs, liability claims, or harm to our reputation or competitive position.** Threats to IT security can take a variety of forms. Individual and groups of hackers and sophisticated organizations, including state-sponsored organizations or nation-states, continuously undertake attacks that pose threats to our customers and our IT. These actors may use a wide variety of methods, which may include developing and deploying malicious software or exploiting vulnerabilities or intentionally designed processes in hardware, software, or other infrastructure in order to attack our products and services or gain access to our networks and datacenters, using social engineering techniques to induce our employees, users, partners, or customers to disclose passwords or other sensitive information or take other actions to gain access to our data or our users or customers data, or acting in a coordinated manner to launch distributed denial of service or other coordinated attacks. Nation-state and state-sponsored actors can deploy significant resources to plan and carry out attacks. Nation-state attacks against us, our customers, or our partners may intensify during periods of intense diplomatic or armed conflict, such as the ongoing conflict in Ukraine. Inadequate account security or organizational security practices may also result in unauthorized access to confidential data. For example, system administrators may fail to timely remove employee account access when no longer appropriate. Employees or third parties may intentionally compromise our or our users security or systems or reveal confidential information. Malicious actors may employ the IT supply chain to introduce malware through software updates or compromised supplier accounts or hardware. Cyberthreats are constantly evolving and becoming increasingly sophisticated and complex, increasing the difficulty of detecting and successfully defending against them. We may have no current capability to detect certain vulnerabilities or new attack methods, which may allow them to persist in the environment over long periods of time. Cyberthreats can have cascading impacts that unfold with increasing speed across our internal networks and systems. Breaches of our facilities, network, or data security could disrupt the security of our systems and business applications, impair our ability to provide services to our customers and protect the privacy of their data, result in product development delays, compromise confidential or technical business information harming our reputation or competitive position, result in theft or misuse of our intellectual property or other assets, subject us to ransomware attacks, require us to allocate more resources to improve technologies or remediate the impacts of attacks, or otherwise adversely affect our business. We are also subject to supply chain cyberattacks where malware can be introduced to a software providers customers, including us, through software updates. In addition, our internal IT environment continues to evolve. Our business policies and internal security controls may not keep pace with these changes as new threats emerge, or emerging cybersecurity regulations in jurisdictions worldwide. **We may need to defend ourselves against proprietary techniques and intellectual property infringement claims, which may be time-consuming and could cause us to incur substantial costs.** **** Companies, organizations or individuals, including our current and future competitors, may hold or obtain proprietary techniques and intellectual property rights that would prevent, limit or interfere with our ability to make, have made, use, import, develop, have developed, sell or have sold our products, which could make it more difficult for us to operate our business. From time to time, we may receive inquiries from holders of proprietary techniques and intellectual property rights inquiring whether we are infringing their rights and/or seek court declarations that they do not infringe upon our proprietary techniques and intellectual property rights. Entities holding proprietary techniques and intellectual property rights relating to our technology, including, but not limited to, batteries, battery materials, encapsulated powders, spray deposition of battery materials, and alternator regulators, may bring suits alleging infringement of such rights or otherwise asserting their rights and seeking licenses. For example, patents and patent applications owned by third parties may present freedom to operate (*FTO*) questions with regards to the precoated feedstock materials for the spray deposition process depending on the final material selections that are used, although we believe that Syntec Optics owns a patent application that pre-dates their patents and patent applications of interest such that Syntec Optics patent application may act as a basis for an invalidity position. However, it is possible that a court may not agree that Syntec Optics patent application invalidates the patents and patent applications of interest. If we are determined to have infringed upon a third partys proprietary techniques and intellectual property rights, we may be required to do one or more of the following: | | | cease using, making, having made, selling, having sold, developing, having developed or importing products that incorporate the infringed proprietary techniques and intellectual property rights; | | | | | | | | | | pay substantial damages; | | | | | | | | | | obtain a license from the holder of the infringed proprietary techniques and intellectual property rights, which license may not be available on reasonable terms or at all; or | | | | | | | | | | redesign our processes or products, which may result in inferior products or processes. | | In the event of a successful claim of infringement against us and our failure or inability to obtain a license to or design around the infringed proprietary techniques and intellectual property rights, our business, prospects, operating results and financial condition could be materially adversely affected. | 14 | | | | | **Our current and future patent applications may not result in issued patents or our patent rights may be contested, circumvented, invalidated or limited in scope, any of which could have a material adverse effect on our ability to prevent others from commercially exploiting products similar to ours.** **** Our current and future patent applications may not result in issued patents, which may have a material adverse effect on our ability to prevent others from commercially exploiting products or technology similar to ours. The outcome of patent applications involves complex legal and factual questions and the breadth of claims that will be allowed is uncertain. As a result, we cannot be certain that the patent applications that we file will result in patents being issued, or that our current issued patents, and any patents that may be issued to us in the future, will afford protection that covers our commercial processes, systems and products or that will afford protection against competitors with similar products or technology. Numerous prior art patents and pending patent applications owned by others, as well as prior art non-patent literature, exist in the fields in which we have developed and are developing our technology, which may preclude our ability to obtain a desired scope of protection in the desired fields. In addition to potential prior art concerns, any of our existing patents, pending patent applications, or future issued patents or patent applications may also be challenged on the basis that they are invalid or unenforceable. Furthermore, patent applications filed in foreign countries are subject to laws, rules, and procedures that differ from those of the United States, and thus we cannot be certain that foreign patent applications related to issued U.S. patents will be issued. Even if our current or future patent applications succeed and patents are issued, it is still uncertain whether our current or future patents will be contested, circumvented, invalidated or limited in scope in the future. The rights granted under any issued patents may not provide us with meaningful protection or competitive advantages, and some foreign countries provide significantly less effective patent enforcement than the United States. In addition, the claims under our current or future patents may not be broad enough to prevent others from developing technologies that are similar or that achieve results similar to ours. The proprietary techniques and intellectual property rights of others could also bar us from licensing and exploiting our current or future patents. In addition, our current or future patents may be infringed upon or designed around by others and others may obtain patents that we need to license or design around, either of which would increase costs and may adversely affect our business, prospects, financial condition and operating results. **Risks Related to Syntec Optics Being a Public Company** **** **The loss of one or more members of our senior management team, other key personnel or our failure to attract additional qualified personnel may adversely affect our business and our ability to achieve our anticipated level of growth.** **** We are highly dependent on the talent and services of key technical personnel and losing them would disrupt our business and harm our results of operations, and we may not be able to successfully attract and retain senior leadership necessary to grow our business. Our future success also depends on our ability to attract and retain other key employees and qualified personnel, and our operations may be severely disrupted if we lost their services. As we become more well known, there is increased risk that competitors or other companies will seek to hire our personnel. The failure to attract, integrate, train, motivate, and retain our personnel could impact our ability to successfully grow our operations and execute our strategy. | 15 | | | | | **Our operating and financial results forecast relies in large part upon assumptions and analyses developed by us. If these assumptions or analyses prove to be incorrect, our actual operating results may be materially different from our forecasted results.** **** The projected financial and operating information appearing elsewhere in this proxy statement/prospectus reflects current estimates of future performance. Whether actual operating and financial results and business developments will be consistent with our expectations and assumptions as reflected in our forecasts depends on a number of factors, many of which are outside our control, including: | | | increased sales to customers with whom the Company has existing relationships; | | | | | | | | | | increased sales with our existing end markets; | | | | | | | | | | sales to additional adjacent end markets; | | | | | | | | | | the successful introduction of new products; | | | | | | | | | | our ability to implement planned automation and expansion efforts; | | | | | | | | | | continued supply from our carefully selected vendors; | | | | | | | | | | our ability to offset vendor price increases and any emerging inflationary price pressures through inventory management, volume-based supplier discounts and potential price increases to customers; and | | | | | | | | | | other factors, including our ability to obtain sufficient capital to sustain and grow our business, our ability to manage our growth and our ability to retain existing key management, integrate recent hires and attract, retain, and motivate qualified personnel. | | Unfavorable changes in any of these or other factors, most of which are beyond our control, could materially and adversely affect our business, financial condition and results of operations. **If we fail to manage our growth effectively, we may be unable to execute our business plan, maintain high levels of customer service, or adequately address competitive challenges.** **** We have experienced significant growth in our business, and our future success depends, in part, on our ability to manage our business as it continues to expand. If not managed effectively, this growth could result in the over-extension of our operating infrastructure, management systems and information technology systems. Internal controls and procedures may not be adequate to support this growth. Failure to adequately manage our growth in our businesses may cause damage to our brand or otherwise have a material adverse effect on our business, financial condition and results of operations. **We may expand our business through acquisitions in the future, and any future acquisition may not be accretive and may negatively affect our business.** **** As part of our growth strategy, we may make future investments in businesses, new technologies, services and other assets that complement our business. We could fail to realize the anticipated benefits from these activities or experience delays or inefficiencies in realizing such benefits. Moreover, an acquisition, investment or business relationship may result in unforeseen operating difficulties and expenditures, including disruption to our ongoing operations, management distraction, exposure to additional liabilities and increased expenses, any of which could adversely impact our business, financial condition and results of operations. Our ability to make these acquisitions and investments could be restricted by the terms of our current and future indebtedness and to pay for these investments we may use cash on hand, incur additional debt or issue equity securities, each of which may affect our financial condition or the value of our stock and could result in dilution to our stockholders. Additional debt would result in increased fixed obligations and could also subject us to covenants or other restrictions that would impede our ability to manage our operations. | 16 | | | | | **We have significant customer concentration, with a limited number of customers accounting for a substantial portion of our revenues. Failure to attract, grow and retain a diverse and balanced customer base could harm our business and operating results.** **** We have a limited number of customers that account for a substantial portion of our revenues, which carries risks. We have a total of three customers that accounted for 48% for the year ended December 31, 2025. 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 could also potentially pressure us to reduce the prices we charge, which could have an adverse effect on our margins and financial position and could negatively affect our revenues and results of operations. If any of our large customers terminates their relationship with us or materially reduces the services they acquire from us, such termination or reduction could negatively affect our revenues and results of operations. Our ability to attract, grow and retain a diverse and balanced customer base may affect our ability to maximize our revenues. Our ability to attract customers depends on a variety of factors, including our product offerings. If we are unable to develop or improve our product offerings, we may fail to develop, grow and retain a diverse and balanced customer base, which would adversely affect our business, financial condition and results of operations. **Our operations are subject to a variety of environmental, health and safety rules that can bring scrutiny from regulatory agencies and increase our costs.** **** Our operations are subject to environmental, health and safety rules, laws and regulations and we may be subject to additional regulations as our operations develop and expand. There are significant capital, operating and other costs associated with compliance with these environmental laws and regulations. While we believe that the policies and programs we have in place are reasonably designed and implemented to assure compliance with these requirements and to avoid hazardous substance release liability with respect to our facilities, we may be faced with new or more stringent compliance obligations that could impose substantial costs. **We are subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws, and non-compliance with such laws can subject us to administrative, civil and criminal fines and penalties, collateral consequences, remedial measures and legal expenses, all of which could adversely affect our business, results of operations, financial condition and reputation.** **** We are subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws and regulations in various jurisdictions in which we conduct or in the future may conduct activities, including the U.S. Foreign Corrupt Practices Act (*FCPA*). The FCPA prohibits us and our officers, directors, employees and business partners acting on our behalf, including agents, from corruptly offering, promising, authorizing or providing anything of value to a foreign official for the purposes of influencing official decisions or obtaining or retaining business or otherwise obtaining favorable treatment. The FCPA also requires companies to make and keep books, records, and accounts that accurately reflect transactions and dispositions of assets and to maintain a system of adequate internal accounting controls. A violation of these laws or regulations could adversely affect our business, results of operations, financial condition and reputation. Our policies and procedures designed to ensure compliance with these regulations may not be sufficient and our directors, officers, employees, representatives, consultants, agents and business partners could engage in improper conduct for which we may be held responsible. Non-compliance with anti-corruption, anti-bribery, anti-money laundering or financial and economic sanctions laws could subject us to whistleblower complaints, adverse media coverage, investigations, and severe administrative, civil and criminal sanctions, collateral consequences, remedial measures and legal expenses, all of which could materially and adversely affect our reputation, business, financial condition and results of operation. | 17 | | | | | **From time to time, we may be involved in legal proceedings and commercial or contractual disputes, which could have an adverse impact on our profitability and consolidated financial position.** **** We may be involved in legal proceedings and commercial or contractual disputes that, from time to time, are significant and which may harm our reputation. These are typically claims that arise in the normal course of business including, without limitation, commercial or contractual disputes, including warranty claims and other disputes with customers and suppliers; proprietary techniques and intellectual property matters; personal injury claims; environmental issues; tax matters; and employment matters. It is difficult to predict the outcome or ultimate financial exposure, if any, represented by these matters, and any such exposure may be material. Regardless of outcome, legal proceedings can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. **We must perform additional services and we are subject to financial reporting and other requirements for which our accounting and other management systems and resources may not be adequate.** In connection with becoming a reporting company under the Securities and Exchange Act of 1934 (the Exchange Act), we will become subject to periodic reporting and other obligations. We are working with our independent legal, accounting and financial advisors to identify those areas in which changes should be made to our financial and management control systems to manage our growth and our obligations as a public company. These areas include corporate governance, corporate control, internal audit, disclosure controls and procedures and financial reporting and accounting systems. These reporting and other obligations will place significant demands on our management, administrative and operational resources, including accounting resources. We anticipate that we will need to hire additional tax, accounting and finance staff. We are reviewing the adequacy of our systems, financial and management controls, and reporting systems and procedures, and we intend to make any necessary changes. If we are unable to upgrade our financial and management controls, reporting systems and procedures in a timely and effective fashion, we may not be able to satisfy our obligations as a public company on a timely basis. **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. **Risks Related to Syntec Optics Financial Position and Capital Requirements** **Our business is capital intensive, and we may not be able to raise additional capital on attractive terms, if at all. Any further indebtedness we incur may limit our operational flexibility in the future.** Over time, we expect that we will need to raise additional funds, including through the issuance of equity, equity-related or debt securities or by obtaining credit from financial institutions to fund, together with our principal sources of liquidity, ongoing costs, such as research and development relating to our advanced manufacturing related products, expansion of our facilities, and new strategic investments. We cannot be certain that additional capital will be available on attractive terms, if at all, when needed, which could be dilutive to stockholders. If we raise additional funds through the issuance of equity or convertible debt or other equity-linked securities, our existing stockholders could experience significant dilution. Any equity securities issued may provide for rights, preferences, or privileges senior to those of common stockholders. If we raise funds by issuing debt securities, these debt securities would have rights, preferences, and privileges senior to those of common stockholders. | 18 | | | | | As of December 31, 2025, we had approximately $9.4 million in outstanding indebtedness. We may be unable to repay our indebtedness when due, or we may be unable to refinance our indebtedness on acceptable terms or at all. The incurrence of additional debt could adversely impact our business, including limiting our operational flexibility by: | | | making it difficult for us to pay other obligations; | | | | | | | | | | increasing our cost of borrowing from other sources; | | | | | | | | | | making it difficult to obtain favorable terms for any necessary future financing for working capital, capital expenditures, investments, acquisitions, debt service requirements, or other purposes; | | | | | | | | | | restricting us from making acquisitions or causing us to make divestitures or similar transactions; | | | | | | | | | | requiring us to dedicate a substantial portion of our cash flow from operations to service and repay our indebtedness, reducing the amount of cash flow available for other purposes; | | | | | | | | | | placing us at a competitive disadvantage compared to our less leveraged competitors; and | | | | | | | | | | limiting our flexibility in planning for and reacting to changes in our business. | | **Restrictions imposed by our outstanding indebtedness and any future indebtedness may limit our ability to operate our business and to finance our future operations or capital needs or to engage in acquisitions or other business activities necessary to achieve growth.** The agreements governing our indebtedness restrict us from engaging in specified types of transactions. These restrictive covenants restrict our ability to, among other things: | | | incur additional indebtedness; and | | | | | | | | | | create or incur encumbrances or liens. | | Under the agreements governing our indebtedness, we are also subject to certain financial covenants, including maintaining minimum levels of Adjusted EBITDA, a minimum fixed charge coverage ratio, and debt service ratio. We cannot guarantee that we will be able to maintain compliance with these covenants or, if we fail to do so, that we will be able to obtain waivers from the applicable lender(s) and/or amend the covenants. Even if we comply with all of the applicable covenants, the restrictions on the conduct of our business could adversely affect our business by, among other things, limiting our ability to take advantage of financing opportunities, mergers, acquisitions, investments, and other corporate opportunities that may be beneficial to our business. A breach of any of the covenants in the agreements governing our existing or future indebtedness could result in an event of default, which, if not cured or waived, could trigger acceleration of our indebtedness, and may result in the acceleration of or default under any other debt we may incur in the future to which a cross-acceleration or cross-default provision applies, which could have a material adverse effect on our business, financial condition and results of operations. In the event of any default under our existing or future credit facilities, the applicable lenders could elect to terminate borrowing commitments and declare all borrowings and loans outstanding, together with accrued and unpaid interest and any fees and other obligations, to be immediately due and payable. In addition, our obligations under our indebtedness are secured by, among other things, a security interest in our proprietary techniques and intellectual property. During the existence of an event of default under our credit agreements, the applicable lender could exercise its rights and remedies thereunder, including by way of initiating foreclosure proceedings against any assets constituting collateral for our obligations under such credit facility. | 19 | | | | | **As a controlled company within the meaning of the Nasdaq corporate governance rules, Syntec Optics is permitted to corporate governance matters that differ significantly from Nasdaq corporate governance listing standards applicable to domestic U.S. companies or rely on exemptions that are available to a controlled company; these practices may afford less protection to shareholders than they would enjoy if Syntec Optics complied fully with Nasdaq corporate governance listing standards.** 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, and therefore, 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. As a controlled company, Syntec Optics is permitted to elect to rely, and may rely, on certain exemptions from corporate governance rules, including (i) an exemption from the rule that a majority of our board of directors must be independent directors; (ii) an exemption from the rule that director nominees must be selected or recommended solely by independent directors; and (iii) an exemption from the rule that the compensation committee must be comprised solely of independent directors. Syntec Optics relies on the exemption available to a controlled company for the requirement that a majority of the board of directors must be comprised of independent directors under Nasdaq Rule 5605(b)(1). Syntec Optics is not required to and will not voluntarily meet this requirement. As a result, you may not be provided with the benefits of certain corporate governance requirements of Nasdaq applicable to companies that are subject to these corporate governance requirements. **We may issue additional shares of Syntec common stock or other equity securities without your approval, which would dilute your ownership interests and may depress the market price of your shares.** We may issue additional shares of Syntec common stock or other equity securities of equal or senior rank in the future in connection with, among other things, future acquisitions, repayment of outstanding indebtedness or under our 2023 Incentive Plan, without stockholder approval, in a number of circumstances. Our issuance of such additional shares of Syntec common stock or other equity securities of equal or senior rank could have the following effects: | | | your proportionate ownership interest in Syntec will decrease; | | | | | | | | | | the relative voting strength of each previously outstanding share of common stock may be diminished; or | | | | | | | | | | the market price of our shares of Syntec common stock may decline. | | **We may redeem unexpired public warrants prior to their exercise at a time that is disadvantageous to warrant holders, thereby making their public warrants worthless.** We have the ability to redeem outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, upon a minimum of 30 days prior written notice of redemption; provided that the last reported sales price of Syntec common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any ten Trading Days within a 30 Trading Day period ending three business days prior to the date we send the notice of redemption to the warrant holders. If and when the warrants become redeemable by us, we may exercise our redemption rights provided that there is an effective registration statement covering the issuance of the shares of Syntec Optics common stock issuable upon exercise of the Syntec Optics warrants. Redemption of the outstanding warrants could force the warrant holders to (i) exercise their warrants and pay the exercise price therefor at a time when it may be disadvantageous for them to do so, (ii) sell their warrants at the then-current market price when they might otherwise wish to hold their warrants or (iii) accept the nominal redemption price which, at the time the outstanding public warrants are called for redemption, is likely to be substantially less than the market value of their warrants. If we call the warrants for redemption as described above, our management will have the option to require all holders that wish to exercise warrants to do so on a cashless basis. | 20 | | | | | **Syntec Optics will have a classified board of directors** **** Syntec Optics Certificate of Incorporation provides for a classified Board consisting of three classes of directors, with staggered three-year terms. Only one class of directors will be elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year terms. This provision may have the effect of delaying a change in control of the Syntec Optics board of directors. The existence of a classified board of directors could discourage a third party from making a tender offer or otherwise attempting to obtain control of Syntec Optics as it is more difficult and time consuming for stockholders to replace a majority of the directors on a classified board of directors. **Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our financial condition and results of operations.** We will be subject to income taxes in the United States, and our tax liabilities will be subject to the allocation of expenses in differing jurisdictions. Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including: | | | changes in the valuation of our deferred tax assets and liabilities; | | | | | | | | | | expected timing and amount of the release of any tax valuation allowances; | | | | | | | | | | tax effects of stock-based compensation; | | | | | | | | | | costs related to intercompany restructurings; | | | | | | | | | | changes in tax laws, regulations or interpretations thereof; or | | | | | | | | | | lower than anticipated future earnings in jurisdictions where we have lower statutory tax rates and higher than anticipated future earnings in jurisdictions where we have higher statutory tax rates. | | In addition, we may be subject to audits of our income, sales and other transaction taxes by taxing authorities. Outcomes from these audits could have an adverse effect on our financial condition and results of operations. **Risks Related to Ownership of Syntec Optics Common Stock** **If securities or industry analysts do not publish research or reports about Syntec Optics, or publish negative reports, Syntec Optics stock price and trading volume could decline.** The trading market for Syntec Optics common stock will depend, in part, on the research and reports that securities or industry analysts publish about Syntec Optics. Syntec Optics will not have any control over these analysts. If Syntec Optics financial performance fails to meet analyst estimates or one or more of the analysts who cover Syntec Optics downgrade its common stock or change their opinion, Syntec Optics stock price would likely decline. If one or more of these analysts cease coverage of Syntec Optics or fail to regularly publish reports on Syntec Optics, it could lose visibility in the financial markets, which could cause Syntec Optics stock price or trading volume to decline. **An active trading market for Syntec Optics securities may not be available on a consistent basis to provide stockholders with adequate liquidity.** Syntec Optics common stock and warrants are listed on Nasdaq under the symbols OPTX and OPTXW respectively, and trade on that market. However, Syntec Optics cannot assure you that an active trading market for its common stock will be sustained. Accordingly, Syntec Optics cannot assure you of the liquidity of any trading market, your ability to sell your shares of its common stock when desired or the prices that you may obtain for your shares. | 21 | | | | | **Warrants will become exercisable for Syntec Optics common stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to Syntec Optics stockholders.** Warrants will become exercisable for the Companys common stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders. There are 7,187,500 outstanding public warrants to purchase 7,187,500 shares of common stock at an exercise price of $11.50 per share, which warrants will become exercisable commencing the later of 30 days following the Closing and 12 months from the closing of the OmniLit IPO, which closed on November 12, 2021. In addition, there will be 6,920,500 private warrants outstanding exercisable for 6,920,500 shares of common stock at an exercise price of $11.50 per share. To the extent such warrants are exercised, additional shares of common stock will be issued, which will result in dilution to the holders of the Companys common stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market could adversely affect the market price of the Companys common stock, the impact of which is increased as the value of our stock price increases. **Syntec Optics operating results may fluctuate significantly, which makes its future operating results difficult to predict and could cause its operating results to fall below expectations or any guidance it may provide.** Syntec Optics quarterly and annual operating results may fluctuate significantly, which makes it difficult for it to predict its future operating results. These fluctuations may occur due to a variety of factors, many of which are outside of its control, including, but not limited to: | | | Syntec Optics ability to engage target customers and successfully convert these customers into meaningful orders in the future; | | | | | | | | | | the size and growth of the potential markets for Syntec Optics products and its ability to serve those markets; | | | | | | | | | | the level of demand for any products, which may vary significantly; | | | | | | | | | | future accounting pronouncements or changes in its accounting policies; and | | | | | | | | | | macroeconomic conditions, both nationally and locally; and | | | | | | | | | | any other change in the competitive landscape of its industry, including consolidation among Syntec Optics competitors or partners. | | The cumulative effects of these factors could result in large fluctuations and unpredictability in Syntec Optics quarterly and annual operating results. As a result, comparing its operating results on a period- to-period basis may not be meaningful. Investors should not rely on its past results as an indication of its future performance. This variability and unpredictability could also result in its failing to meet the expectations of industry or financial analysts or investors for any period. If Syntec Optics revenue or operating results fall below the expectations of analysts or investors or below any forecasts Syntec Optics may provide to the market, or if the forecasts it provides to the market are below the expectations of analysts or investors, the price of Syntec Optics common stock could decline substantially. Such a stock price decline could occur even when it has met any prior publicly stated revenue or earnings guidance it may provide. | 22 | | | | | **Changes in laws, regulations or rules, or a failure to comply with any laws, regulations or rules, may adversely affect Syntec Optics business, investments and results of operations.** Syntec Optics will be subject to laws, regulations and rules enacted by national, regional, and local governments and Nasdaq. In particular, Syntec Optics will be required to comply with certain SEC, Nasdaq and other legal or regulatory requirements. Compliance with, and monitoring of, applicable laws, regulations and rules may be difficult, time consuming and costly. Those laws, regulations or rules and their interpretation and application may also change from time to time and those changes could have a material adverse effect on Syntec Optics business, investments and results of operations. In addition, a failure to comply with applicable laws, regulations or rules, as interpreted and applied, could have a material adverse effect on Syntec Optics business and results of operations. **The second amended and restated certificate of incorporation will designate specific courts as the exclusive forum for substantially all stockholder litigation matters, which could limit the ability of Syntec Optics stockholders to obtain a favorable forum for disputes with Syntec Optics or its directors, officers or employees.** The second amended and restated certificate of incorporation will require, to the fullest extent permitted by law, that derivative actions brought in Syntec Optics name, actions against current or former directors, officers or other employees for breach of fiduciary duty, any action asserting a claim arising pursuant to any provision of the DGCL, the second amended and restated certificate of incorporation or the Syntec Optics amended and restated bylaws, any action asserting a claim governed by internal affairs doctrine of the State of Delaware or any other action asserting an internal corporate claim (as defined in Section 115 of the DGCL), confers jurisdiction to the Court of Chancery of the State of Delaware (or, if and only if the Court of Chancery of the State of Delaware does not have subject matter jurisdiction thereof, any state court located in the State of Delaware or, if and only if all such state courts lack subject matter jurisdiction, the federal district court for the District of Delaware), unless Syntec Optics consents in writing to the selection of an alternative forum. This provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. The second amended and restated certificate of incorporation also provides that, unless Syntec Optics consents in writing to the selection of an alternative forum, the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. This provision may limit a stockholders ability to bring a claim in a judicial forum that it finds favorable for disputes with Syntec Optics and Syntec Optics directors, officers or other employees and may have the effect of discouraging lawsuits against Syntec Optics directors, officers and other employees. Furthermore, stockholders may be subject to increased costs to bring these claims, and the exclusive forum provision could have the effect of discouraging claims or limiting investors ability to bring claims in a judicial forum that they find favorable. In addition, the enforceability of similar exclusive forum provisions in other companies certificates of incorporation has been challenged in legal proceedings, and it is possible that, in connection with one or more actions or proceedings described above, a court could rule that this provision in the second amended and restated certificate of incorporation is inapplicable or unenforceable. In March 2020, the Delaware Supreme Court issued a decision in *Salzburg et al. v. Sciabacucchi*, which found that an exclusive forum provision providing for claims under the Securities Act to be brought in federal court is facially valid under Delaware law. We intend to enforce this provision, but we do not know whether courts in other jurisdictions will agree with this decision or enforce it. If a court were to find the exclusive forum provision contained in the second amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, Syntec Optics may incur additional costs associated with resolving such action in other jurisdictions, which could harm its business, prospects, financial condition and operating results. | 23 | | | | | **The second amended and restated certificate of incorporation could discourage another company from acquiring Syntec Optics and may prevent attempts by its stockholders to replace or remove its management.** Provisions in our second amended and restated certificate of incorporation and our amended and restated bylaws to be in effect immediately prior to the consummation of the Business Combination may discourage, delay or prevent, a merger, acquisition or other change in control of Syntec Optics that stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of Syntec Optics common stock, thereby depressing the market price of its common stock. In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors. These provisions provide, among other things, that: | | | the Syntec Optics board of directors will be divided into three classes, with each class serving staggered three-year terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors; | | | | | | | | | | the Syntec Optics board of directors has the exclusive right to expand the size of its board of directors and to elect directors to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; | | | | | | | | | | Syntec Optics stockholders may not act by written consent, which forces stockholder action to be taken at an annual or special meeting of stockholders; | | | | | | | | | | a special meeting of stockholders may be called only by a majority of the Syntec Optics board of directors, which may delay the ability of Syntec Optics stockholders to force consideration of a proposal or to take action, including the removal of directors; | | | | | the second amended and restated certificate of incorporation prohibits cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; | | | | | | | | | | the Syntec Optics board of directors may alter certain provisions of the Syntec Optics amended and restated bylaws without obtaining stockholder approval; | | | | | | | | | | the approval of the holders of at least sixty-six and two-thirds percent (66 23%) of the Syntec Optics common shares entitled to vote at an election of the Syntec Optics board of directors is required to adopt, amend, alter or repeal our amended and restated bylaws or amend, alter, change or repeal or adopt any provision of the second amended and restated certificate of incorporation inconsistent with the provisions of the Syntec Optics second amended and restated certificate of incorporation regarding the election and removal of directors; | | | | | | | | | | stockholders must provide advance notice and additional disclosures to nominate individuals for election to the Syntec Optics board of directors or to propose matters that can be acted upon at a stockholders meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirers own slate of directors or otherwise attempting to obtain voting control of the Syntec Optics common stock; and | | | | | | | | | | the Syntec Optics board of directors is authorized to issue shares of preferred stock and to determine the terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer. | | Moreover, because Syntec Optics is incorporated in Delaware, it will be governed by the provisions of Section 203 of the DGCL, which prohibits a person who owns in excess of 15% of the Syntec Optics outstanding voting stock from merging or combining with Syntec Optics for a period of three years after the date of the transaction in which the person acquired in excess of 15% of the Syntec Optics outstanding voting stock, unless the merger or combination is approved in a prescribed manner. | 24 | | | | | **Syntec Optics will be an emerging growth company and any decision to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make Syntec Optics common stock less attractive to investors.** Syntec Optics is an emerging growth company, as defined in the JOBS Act. For as long as it continues to be an emerging growth company, Syntec Optics may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to emerging growth companies, including: | | | not being required to have an independent registered public accounting firm audit Syntec Optics internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act; | | | | | | | | | | reduced disclosure obligations regarding executive compensation in Syntec Optics periodic reports and annual report on Form 10-K; and | | | | | | | | | | exemptions from the requirements of holding non-binding advisory votes on executive compensation and stockholder approval of any golden parachute payments not previously approved. | | As a result, the stockholders may not have access to certain information that they may deem important. Syntec Optics status as an emerging growth company will end as soon as any of the following takes place: | | | the last day of the fiscal year in which Syntec Optics has at least $1.07 billion in annual revenue; | | | | | | | | | | the date Syntec Optics qualifies as a large accelerated filer, with at least $700.0 million of equity securities held by non-affiliates; | | | | | | | | | | the date on which Syntec Optics has issued, in any three-year period, more than $1.0 billion in non- convertible debt securities; or | | | | | | | | | | the last day of the fiscal year ending after the fifth anniversary of the OmniLit IPO. | | Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. Syntec Optics may elect to take advantage of this extended transition period and as a result, its financial statements may not be comparable with similarly situated public companies. Syntec Optics cannot predict if investors will find Syntec Optics common stock less attractive if it chooses to rely on any of the exemptions afforded emerging growth companies. If some investors find Syntec Optics common stock less attractive because Syntec Optics relies on any of these exemptions, there may be a less active trading market for Syntec Optics common stock and the market price of Syntec Optics common stock may be more volatile and may decline. **If Syntec Optics fails to maintain an effective system of disclosure controls and internal control over financial reporting, Syntec Optics ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired, which may adversely affect investor confidence in Syntec Optics and, as a result, the market price of Syntec Optics common stock.** As a public company, Syntec Optics will be required to comply with the requirements of the Sarbanes-Oxley Act, including, among other things, that Syntec Optics maintain effective disclosure controls and procedures and internal control over financial reporting. Syntec Optics is continuing to develop and refine its disclosure controls and other procedures that are designed to ensure that information required to be disclosed by Syntec Optics in the reports that Syntec Optics will file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to Syntec Optics management, including Syntec Optics principal executive and financial officers and Board of Directors. | 25 | | | | | Syntec Optics will continue to improve its internal control over financial reporting. Syntec Optics will be required to make a formal assessment of the effectiveness of its internal control over financial reporting and once Syntec Optics ceases to be an emerging growth company, Syntec Optics will be required to include an attestation report on internal control over financial reporting issued by Syntec Optics independent registered public accounting firm. To achieve compliance with these requirements within the prescribed time period, Syntec Optics will be engaging in a process to document and evaluate Syntec Optics internal control over financial reporting, which is both costly and challenging. In this regard, Syntec Optics will need to continue to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of Syntec Optics internal control over financial reporting, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. There is a risk that Syntec Optics will not be able to conclude, within the prescribed time period or at all, that Syntec Optics internal control over financial reporting is effective as required by Section 404 of the Sarbanes- Oxley Act. Moreover, Syntec Optics testing, or the subsequent testing by Syntec Optics independent registered public accounting firm, may reveal additional deficiencies in Syntec Optics internal control over financial reporting that are deemed to be material weaknesses. 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 sanctions, inquiries, or other actions by Nasdaq, the SEC, 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 Nasdaqs 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. **Insiders will have substantial influence over Syntec Optics, which could limit your ability to affect the outcome of key transactions, including a change of control.** The beneficial ownership of Common Stock is based on 36,920,226 shares of Common Stock issued and outstanding. Mr. Kapoor owns 30,631,090 shares of Common Stock, representing 83% of the shares issued and outstanding. As a result, these stockholders, if they act together, will not be able to influence Syntec Optics management and affairs and all matters requiring stockholder approval, including the election of directors, amendments of Syntec Optics organizational documents and approval of significant corporate transactions. Mr. Kapoor will retain voting and investment discretion following the business combination given Mr. Kapoors holdings of approximately 83% the outstanding shares of Syntec Optics, will be able to influence the corporate decisions without having to act with other stockholders. They may also have interests that differ from yours and may vote in a way with which you disagree and which may be adverse to your interests. This concentration of ownership may have the effect of delaying, preventing or deterring a change in control of Syntec Optics and might affect the market price of Syntec Optics common stock. The numbers of shares and percentage interests set forth above are based on a number of assumptions, including that: (1) Syntec Optics Holdings, Inc. does not issue any additional equity securities prior to the Business Combination and no other event occurs that would change the Merger Consideration from what it would have been as of the date of the initial signing of the Business Combination Agreement; and (2) there is no exercise of OmniLits 14,107,989 outstanding warrants at an exercise price of $11.50 per share (which warrants are not exercisable until 30 days after the completion of the Business Combination). If the actual facts differ from these assumptions, the numbers of shares and percentage interests set forth above will be different. **Because there are no current plans to pay cash dividends on the Syntec Optics common stock for the foreseeable future, you may not receive any return on investment unless you sell your Syntec Optics common stock at a price greater than what you paid for it.** Syntec Optics intends to retain future earnings, if any, for future operations, expansion and debt repayment and there are no current plans to pay any cash dividends for the foreseeable future. The declaration, amount and payment of any future dividends on shares of Syntec Optics common stock will be at the sole discretion of the Syntec Optics board of directors. The Syntec Optics board of directors may take into account general and economic conditions, Syntec Optics financial condition and results of operations, Syntec Optics available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions, implications of the payment of dividends by Syntec Optics to its stockholders or by its subsidiaries to it and such other factors as the Syntec Optics board of directors may deem relevant. As a result, you may not receive any return on an investment in Syntec Optics common stock unless you sell your Syntec Optics common stock for a price greater than that which you paid for it. | 26 | | | | | **Item 1B. Unresolved Staff Comments** Not applicable. **Item 1C. Cybersecurity** **** **Risk Management and Strategy** We recognize the importance of protecting information assets such as the personally identifiable information of our employees, and proprietary business information, and have adopted policies, management oversight, accountability structures, and technology processes designed to safeguard this information. All of our employees are required to attest annually to our information security policies and participate in regular security awareness training to protect their information and the Syntec Optics data and systems to which they have access. These trainings also instruct employees on how to report any potential privacy or data security issues. We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. Our cybersecurity risk management program includes a cybersecurity incident response plan. We design and assess our program based on various cybersecurity frameworks, such as the National Institute of Standards and Technology (NIST). We use these cybersecurity frameworks and information security standards as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business. Our cybersecurity risk management program is integrated into our overall enterprise risk management program, sharing common methodologies and governance processes across the enterprise risk management program. Specifically, our cybersecurity risk management program includes: risk assessments designed to help identify material cybersecurity risks to our critical systems and enterprise information technology (IT) environment; an internal security team and an external service provider principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity threats and incidents; the use of external service providers, where appropriate, to assess, test, or otherwise assist with aspects of our cybersecurity security controls; cybersecurity awareness training for our employees, incident response personnel, and senior management on an annual basis as part of the risk mitigation strategy; annual testing of the effectiveness of the cybersecurity awareness training; a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; a third-party risk management process for service providers, suppliers, and vendors; and cybersecurity internal and external penetration testing. We work with third-party service providers to proactively assess our information security program and provide us with an industry view of the cyberthreat landscape, in addition to monitoring and supporting our control environment and breach notification and response processes. As of the date of this Annual Report on Form 10-K, cybersecurity threats have not materially affected and we believe are not reasonably likely to materially affect Syntec Optics, including our business strategy, results of operations, or financial condition. Refer to the risk factor captioned Cyberattacks and security vulnerabilities could lead to reduced revenue, increased costs, liability claims, or harm to our reputation or competitive position. in Part I, Item 1A. Risk Factors for more information regarding cybersecurity risks and potential related impacts on Syntec Optics. **Governance** **** We have a formal information security program, designed to develop and maintain privacy and data security practices to protect Syntec Optics assets and sensitive third-party information, including personal information. This program is governed by a sub-committee of our Audit Committee, comprising members of senior management, which meets regularly and reports to the Board of Directors at least annually (the Information Security Governance Committee). Our Audit Committee Chair has a certificate in Cybersecurity Oversight from the Software Engineering Institute at Carnegie Mellon University. Members of the Information Security Governance Committee oversee communications with the Board of Directors regarding material cybersecurity incidents and provide the Board with a summary of risks from current cybersecurity threats on a regular basis, as well as updates on managements information security program oversight and maintenance activities, and any material changes to Syntec Optics information security practices and procedures. We take a risk-based approach to cybersecurity and have implemented policies throughout our operations that are designed to address cybersecurity threats and our response to actual or suspected incidents. In particular, the Information Security Governance Committee is responsible for the ongoing identification and assessment of reasonably foreseeable cybersecurity threats and based on these assessments, evaluating and overseeing the implementation of safeguards for limiting such risks, including employee training and compliance, and detection and prevention mechanisms. If a cybersecurity incident occurs, the Information Security Governance Committee will assemble an incident response team responsible for the identification, remediation, and post-incident review of such incident, engage outside advisors and notify third parties as appropriate, and assess the materiality of the nature, scope, and timing of a given incident and whether public disclosure is required. The CFO, in coordination with the Information Security Governance Committee, is responsible for leading the assessment and management of cybersecurity risks. The CFO provides the Board of Directors as part of the Information Security Governance Committees updates discussed above and regularly communicates with the other members of the Information Security Governance Committee and senior management regarding cybersecurity risks. **Item 2. Properties** Our corporate headquarters is located at 515 Lee RD., Rochester, New York 14606 in an approximately 90,000 square foot manufacturing facility. This facility is leased from ELR Associates, LLC, a fully consolidated variable interest entity of Syntec Optics Holdings Inc. The lease for this building was entered into on July 23, 2015 for a 10 year period and has provisions for two extensions of 5 years each. The Company has exercised the first extension (to July 2030), and we have the option to extend for an additional five-year term. We believe we will be able to obtain additional space, if necessary, on commercially reasonable terms. The current rent is $29,050 payable monthly. | 27 | | | | | **Item 3. Legal Proceedings** From time to time, we may become involved in litigation or other legal proceedings. We are not currently a party to any litigation or legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. **Item 4. Mine Safety Disclosures** Not applicable. **Part II** **Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities** **Market Information** Our common stock is currently listed on the Nasdaq Capital Market under the symbol OPTX and our public warrants are currently listed on the Nasdaq Capital Market under the symbol OPTXW. At December 31, 2025, there were approximately 301 holders of record of our common stock and 137 holders of record of our public warrants. As of March 23, 2026, there were approximately 301 holders of record of our common stock and 137 holders of record of our public warrants. **Dividend Policy** We currently intend to retain all available funds and any future earnings to fund the growth and development of our business. We have never declared or paid any cash dividends on our common stock. We do not intend to pay cash dividends to our stockholders in the foreseeable future. Investors should not purchase our common stock with the expectation of receiving cash dividends. Any future determination to declare dividends will be made at the discretion of our board of directors and will depend on our financial condition, operating results, capital requirements, general business conditions, and other factors that our board of directors may deem relevant. **Item 6. [Reserved]** **Item 6A. Unregistered Sales of Equity Securities and Use of Proceeds** None **Item 6B. Defaults Upon Senior Securities** None **Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations** **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 expressed 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 Managements 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, 2021, 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. | 28 | | | | | **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 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 the ability 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 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. 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. **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. | 29 | | | | | Syntec Optics plans to further consolidate and add bolt-on acquisitions for inorganic growth in the fragmented photonics industry by expanding our portfolio of existing U.S.-based advanced manufacturing processes of making thin-film coated glass, crystal, and/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 entered the communications end market in 2023. Syntec Optics is currently engaged as a supplier for a U.S. Department of Commerces 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 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) increase our purchase order volumes (qualifying us for related volume-based discounts), and ordering and receiving delivery of raw materials in anticipation of required demand, which has helped us moderate supply-related costs associated with inflation and to avoid potential shipment delays. To mitigate against potential adverse production events, we opted to increase 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 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. Three customers accounted for 48% of revenues for the year ended December 31, 2025. 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. | 30 | | | | | **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. | 31 | | | | | **Results of Operations** **Comparisons for the Years Ended December 31, 2025 and 2024** The following table sets forth our results of operations for the years ended December 31, 2025 and 2024. This data should be read together with our financial statements and related notes included elsewhere in this Annual Report, and is qualified in its entirety by reference to such financial statements and related notes. **CONSOLIDATED STATEMENTS OF OPERATIONS** **FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024** **** | | | 2025 | | | % of Net Sales | | | 2024 | | | % of Net Sales | | | | | | | | | | | | | | | | | | | Net Sales | | $ | 28,083,985 | | | | 100 | % | | $ | 28,449,941 | | | | 100 | % | | | Cost of Goods Sold | | | 21,554,285 | | | | 77 | % | | | 22,747,615 | | | | 80 | % | | | Gross Profit | | | 6,529,700 | | | | 23 | % | | | 5,702,326 | | | | 20 | % | | | General and Administrative Expenses | | | 7,047,300 | | | | 25 | % | | | 8,278,720 | | | | 29 | % | | | Loss from Operations | | | (517,600 | ) | | | -2 | % | | | (2,576,394 | ) | | | -9 | % | | | Other (Expense) Income | | | | | | | | | | | | | | | | | | | Other (Expense) Income | | | (39,875 | ) | | | 0 | % | | | 346,835 | | | | 1 | % | | | Interest Expense, Including Amortization of Debt Issuance Costs | | | (795,810 | ) | | | -3 | % | | | (764,934 | ) | | | -3 | % | | | Total Other Expense | | | (835,685 | ) | | | -3 | % | | | (418,099 | ) | | | -1 | % | | | Loss Before Benefit From Provision for Income Taxes | | | (1,353,285 | ) | | | -5 | % | | | (2,994,493 | ) | | | -11 | % | | | Provision for (Benefit From) Income Taxes | | | 439,942 | | | | 2 | % | | | (514,832 | ) | | | -2 | % | | | Net Loss | | $ | (1,793,227 | ) | | | -6 | % | | $ | (2,479,661 | ) | | | -10 | % | | **** **** **Net Sales** Net sales decreased by $0.4 million, or 1.3% to $28.1 million for the year ended December 31, 2025, as compared to $28.5 million for the year ended December 31, 2024. Increases in Consumer industry $1.1 million, Defense industry $0.3 million, and Medical industry $1.1 million were offset by a $2.9 million decrease in the communications industry. **Cost of Goods Sold** 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). **Gross Profit** Gross profit increased by $0.8 million, or 15%, to $6.5 million for the year ended December 31, 2025, as compared to $5.7 million for the year ended December 31, 2024. This increase was primarily due to a decrease in cost of goods sold, partially offset by a $0.4 million decrease in sales. **General and Administrative Expenses** General and administrative expenses decreased by approximately $1.3 million, or 15%, to $7.0 million for the year ended December 31, 2025, as compared to $8.3 million for the year ended December 31, 2024. This decrease was primarily due to decreases in wages and commissions ($0.6 million), decreases in R&D ($0.4 million), decrease in business insurance ($0.2 million), and other cumulative changes of ($0.1 million). | 32 | | | | | **Total Other Expenses** Other expenses increased by $0.4 million, to $0.8 million for the year ended December 31, 2025, as compared to other expense of $0.4 million for the year ended December 31, 2024. There was a gain from the sale of machinery and equipment in 2024 of $0.3 million, which did not exist in 2025. **Income Tax Expense (Benefit from)** 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. **Net Loss** Net Loss decreased by $0.7 million to $1.8 million for the year ended December 31, 2025, as compared to $2.5 million for the year ended December 31, 2024. This change was primarily due to a decrease in sales of $0.4 million, an decrease in cost of goods sold of $1.2 million, a decrease in general and administrative expenses of $1.2 million, an increase in other expenses of $0.4 million, and a decrease in benefit from provision for income taxes of $1.0 million. **Non-GAAP Financial Measures** This Annual Report includes a non-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. In identifying these non-GAAP items the company additionally ensured that the expenses were not required to generate revenue, that they were not related in any way to revenues or marketing expenses, and that they excluded items that could be described as up front milestone or process expenses. The table below presents our adjusted EBITDA, reconciled to net income for the years ended December 31, 2025 and 2024. | 33 | | | | | The table below presents our adjusted EBITDA, reconciled to net income for the periods indicated. **NON-GAAP RECONCILIATION OF EBITDA** **FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024** | | | 2025 | | | 2024 | | | | Net Loss | | $ | (1,793,227 | ) | | $ | (2,479,661 | ) | | | Stock-Based Compensation Expense BOD (1) | | | 300,000 | | | | 450,000 | | | | Depreciation & Amortization | | | 2,613,229 | | | | 2,765,713 | | | | Amortization of Debt Issuance Costs | | | 15,501 | | | | 9,222 | | | | Interest Expenses | | | 756,519 | | | | 738,010 | | | | Taxes | | | 439,942 | | | | (514,832 | ) | | | Non-Recurring Items | | | | | | | | | | | | | | | | | | | | | | Executive Transition (2) | | | 579,161 | | | | 379,389 | | | | Nonrecurring Banking Fees (3) | | | 63,416 | | | | | | | | Nonrecurring professional Fees (4) | | | | | | | 174,500 | | | | Technology Start-up Costs (5) | | | | | | | 344,496 | | | | Optical Molding Evaluation Expenses (6) | | | | | | | 201,908 | | | | Glass Molding Evaluation Expenses (6) | | | | | | | 130,196 | | | | One-time Contract exit costs | | | 21,063 | | | | | | | | Non-recurring property damage | | | 21,261 | | | | | | | | | | | | | | | | | | | Adjusted EBITDA | | $ | 3,016,865 | | | $ | 2,198,941 | | | In the years ended December 31, 2025 and 2024: | | (1) | Stock-based compensation was issued to independent Board members. | | | | (2) | A succession plan was required for the transition of the CEO at 2024 year-end. | | | | (3) | Prepayment fees related to early payment of loans. | | | | (4) | In 2024, Syntec recorded professional and transaction filing fees, as well as management fees and expenses related to its IPO filing with NASDAQ in November 2023. This includes audit and regulation fees. | | | | (5) | Unique technology costs relate to digital imaging, as well as delivery of innovative solutions for distribution of new products to customers that we provided in the year ended December 31,2024. | | | | (6) | Optical and glass molding for special products produced on-demand production for key partners requiring components using ultra-precision glass pressing. | | **Liquidity and Capital Resources** **Overview** The Companys 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: | | Repaid approximately $1.37 million of term and equipment debt; | | | | | | | | | Reduced the revolving commitment from $8.0 million to $7.5 million; and | | | | | | | | | Executed subordination agreements with respect to shareholder indebtedness. | | 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 Companys 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. | 34 | | | | | **Cash Flow Year ended December 31, 2025 and 2024** **SYNTEC OPTICS HOLDINGS, INC.** **CONSOLIDATED STATEMENTS OF CASH FLOWS** **FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024** | | | 2025 | | | 2024 | | | | Net Cash Provided By (Used In) Operating Activities | | $ | 672,635 | | | $ | (942,830 | ) | | | Net Cash Used in Investing Activities | | | (644,292 | ) | | | (930,866 | ) | | | Net Cash (Used In) Provided By Financing Activities | | | (268,263 | ) | | | 314,238 | | | | | | | | | | | | | | | Net Decrease in Cash | | | (239,920 | ) | | | (1,559,458 | ) | | | | | | | | | | | | | | Cash - Beginning | | | 598,787 | | | | 2,158,245 | | | | | | | | | | | | | | | Cash - Ending | | $ | 358,867 | | | $ | 598,787 | | | | | | | | | | | | | | | Supplemental Cash Flow Disclosures: | | | | | | | | | | | | | | | | | | | | | | Cash Paid for Interest | | $ | 756,519 | | | $ | 738,010 | | | | | | | | | | | | | | | Cash Paid for Taxes | | $ | - | | | $ | 568,143 | | | | | | | | | | | | | | | Supplemental Disclosures of Non-Cash Investing Activities: | | | | | | | | | | | | | | | | | | | | | | Assets Acquired and Included in Accounts Payable and Accrued Expenses | | $ | 527,219 | | | $ | 198,584 | | | | Issuance of finance lease for acquisition of equipment | | $ | - | | | $ | 2,160,070 | | | | De-recognition of PPE and Intangible Asset transaction | | $ | - | | | $ | 560,000 | | | **Operating Activities** 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. The primary drivers for the year-over-year change include an improvement in net loss of $0.7 million and additional funds provided of $0.9 million in balance sheet accounts including: accounts payable, accrued expense, and changes in prepaid expenses of $0.8 million, changes in federal tax payable of $0.6 million, changes in deferred income tax of $1.0 million, changes in inventory of $0.3 million, and changes from prior year gain on asset disposal of $0.3 million, partially offset by changes in accounts receivable of $(1.7) million, and other smaller changes of $(0.4) million. **Investing Activities** Net cash used in investing activities was $0.6 million for the year ended December 31, 2025, as compared to $0.9 million for the year ended December 31, 2024. The net cash used in investing activities decreased primarily due to a decrease in capital expenditures of $0.6 million in 2025 compared to 2024, and proceeds from sale of equipment of $0.3 million 2024, with no such sale of equipment talking place in 2025. **Financing Activities** Net cash used in financing activities was $0.3 million for the year ended December 31, 2025. Net cash provided by financing activities was $0.3 million for the year ended December 31, 2024. The primary drivers for the year-over-year change include an increase in borrowings of debt obligations of $0.2 million, an increase in net borrowings on Line of credit of $0.8 million, offset by an increase in repayments on debt obligations of $1.3 million, an increase in repayment of finance lease obligations of $0.2 million. **Quantitative and Qualitative Disclosures about Market Risk** Our primary market risk exposure is interest rate sensitivity. See Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk. **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** 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. Inventories, which consist of raw materials, work in process and finished goods, are stated at the lower of cost (weighted average) or net realizable value, net of reserves for obsolete inventory. We continually analyze our slow moving and excess inventories. Based on historical and projected sales volumes and anticipated selling prices, we established reserves. Inventory that is in excess of current and projected use is reduced by an allowance to a level that approximates its estimate of future demand. Products that are determined to be obsolete are written down to net realizable value. As of December 31, 2025, our reserve was approximately $0.6 million compared to $0.5 million as of December 31, 2024. | 35 | | | | | **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. **Recent Accounting Pronouncements** 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 a reporting entitys effective tax rate reconciliation, as well as information related to income taxes paid to enhance the transparency and decision usefulness of income tax disclosures. This ASU is effective for the annual period ended December 31,2025and should be applied on a prospective basis with theoptionto apply the standard retrospectively. Early adoption ispermitted. 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 the year ended December 31, 2025. The adoption of ASU 2023-09 did not have a material impact on the Companys financial statementsincluded inthis Annual Report on Form 10-K but did result inadditionaldisclosures in the income tax footnote. In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (ASU 2024-03). ASU 2024-03 requires additional disclosure of specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. ASU 2024-03 may be applied prospectively with the option for retrospective application for all prior periods presented. The Company is currently evaluating the impact of adopting this guidance on the Companys current financial position, results of operations or financial statement disclosures. In July 2025, the FASB issued ASU 2025-05, Financial InstrumentsCredit 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 mayelecta 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 itsconsolidatedfinancial 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,representingthe changes to the Codification that (1) clarify, (2) correct errors, or (3) make minor improvements.Generally, theamendments 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 ispermitted. We are currently evaluating the provisions of this ASU and do not expect this ASU to have a material impact on ourconsolidatedfinancial statements**.** **JOBS Act Accounting Election** As an emerging growth company under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, Syntec Optics can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. Syntec Optics has elected to avail itself of this exemption from new or revised accounting standards and, therefore, will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. Syntec Optics intends to rely on other exemptions provided by the JOBS Act, including without limitation, not being required to comply with the auditor attestation requirements of Section 404(b) of Sarbanes-Oxley. As a result, Syntec Optics financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. Syntec Optics will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of the consummation of OmniLits initial public offering, (ii) the last day of the fiscal year in which Syntec Optics has total annual gross revenue of at least $1.235 billion, (iii) the last day of the fiscal year in which Syntec Optics is deemed to be a large accelerated filer as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of Syntec Optics common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year, or (iv) the date on which Syntec Optics has issued more than $1.0 billion in non- convertible debt securities during the prior three-year period. | 36 | | | | | **Item 7A. Quantitative and Qualitative Disclosures about Market Risk** On July 16, 2024, the Company entered into four separate lease agreements with a vendor for a total of 6 pieces of machinery. In reviewing the lease agreements, the Company has determined that all 4 lease agreements are finance leases. We are exposed to market risks from changes in interest rates, which could affect our operating results, financial position and cash flows. We manage our exposure to these market risks through our regular operating and financing activities. *Interest Rates* Our exposure to market risk associated with changes in interest rates relates primarily to our borrowings under our Senior Credit Facilities. We had approximately $6.8 million of outstanding variable rate debt as of December 31, 2025. A 100 basis point increase in interest rates at December 31, 2025 would increase our annual pre-tax interest expense by approximately $0.068 million. **Item 8. Financial Statements and Supplementary Data** Our consolidated audited financial statements as of and for the years ended December 31, 2025 and 2024, together with the report of the independent registered public accounting firm thereon and the notes thereto, are presented beginning at page F-2. **Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure** None. **Item 9A. Controls and Procedures** **Evaluation of Internal 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 SECs rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our companys 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 December 31, 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 and segregation of duties. | | | 37 | | | | | | | 2. | We lack timely reconciliation controls in the areas of accounts payable, accrued legal expenses, and provision for income taxes. | | | | 3. | We lack controls related to identification and disclosure of related party transactions. | | | | 4. | We lack controls related to evaluation of non-routine transactions including financial instruments. | | | | 5. | 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. | | **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 managements 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. **Managements Report on Internal Control over Financial Reporting** This Report does not include a report of managements assessment regarding internal control over financial reporting or an attestation report of the Companys 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 year ended December 31, 2024 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. **Item 9B. Other Information** Not applicable. **Item 9C. Disclosure Regarding Foreign Jurisdiction that Prevent Inspections** Not applicable. | 38 | | | | | **Part III** **Item 10. Directors, Executive Officers and Corporate Governance** Director Resignation: On March 21, 2025, a member of the Board of Directors of Syntec Optics Holdings, Inc. (the Company) submitted his resignation from the Board. The resignation was due to a disagreement with the Company regarding matters relating to the Companys operations, policies and practices. The Board accepted the resignation on March 25, 2025. In connection with the resignation, the Company entered into a mutual release agreement with the former director. The cost associated with this agreement was accrued in the Companys financial statements for the year ended December 31, 2024 in the amount of approximately $0.2 million. Other information called for by this item will be set forth in our Proxy Statement for the 2025 Annual Meeting of Stockholders, or Proxy Statement, to be filed with the SEC. **** **Item 11. Executive Compensation** The information called for by this item will be set forth in our Proxy Statement and is incorporated herein by reference. **Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters** The information called for by this item will be set forth in our Proxy Statement and is incorporated herein by reference. **Item 13. Certain Relationships and Related Transactions, and Director Independence** The information called for by this item will be set forth in our Proxy Statement and is incorporated herein by reference. **Item 14. Principal Accountant Fees and Services** The information called for by this item will be set forth in our Proxy Statement and is incorporated herein by reference. **Part IV** **Item 15. Exhibit and Financial Statement Schedules** | (a) | The following documents are filed as part of this report: | | | | | | | 1. | Financial Statements | | The list of consolidated financial statements set forth in the accompanying Index to the Consolidated Financial Statements at page F-1 of this Annual Report on Form 10-K is incorporated herein by reference. Such consolidated financial statements are filed as part of this Annual Report on Form 10-K. | 2. | Financial Statement Schedules | | All schedules have been omitted because the required information is either not required, not applicable or because the information required is included in the consolidated financial statements or notes thereto. | 39 | | | | | | 3. | Exhibits | | | Exhibit No. | | Description | | | | | | | | 2.1# | | Agreement and Plan of Merger, dated as of May 9, by and among OmniLit Acquisition Corp., OmniLit Merger Sub, Inc. and Syntec Optics Group, Inc. (included as Annex A to the proxy statement/prospectus). | | | 3.5 | | Form of Second Amended and Restated Certificate of Incorporation (to be effective upon consummation of the Merger) (included as Annex B to the proxy statement/prospectus). | | | 3.6 | | Form of Amended and Restated Bylaws (to be effective upon consummation of the Merger) (included as Annex C to the proxy statement/prospectus). | | | 4.4 | | Warrant Agreement, dated as of November 8, 2021, between OmniLit Acquisition Corp. and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.4 of OmniLit Acquisition Corp.s Amendment No. 1 to Form S-1 filed with the SEC on November 1, 2021). | | | 4.6 | | Form of Amended and Restated Registration Rights Agreement (to be effective upon consummation of the Merger) (included as Annex D to the proxy statement/prospectus). | | | 10.4 | | Sponsor Support Agreement, dated as of May 9, 2023, by and among OmniLit Sponsor, LLC, Syntec Optics and OmniLit Sponsor, LLC (included as Annex E to the proxy statement/prospectus). | | | 10.5 | | OmniLit Combination 2023 Equity Incentive Plan (included as Annex F to the proxy statement/prospectus). | | | 10.6 | | New Syntec Optics Employee Stock Purchase Plan (included as Annex G to the proxy statement/prospectus). | | | 10.7 | | Form of Indemnity Agreement. (incorporated by reference to Exhibit 10.7 of OmniLit Acquisition Corp.s Amendment No. 1 to Form S-1 filed with the SEC on November 1, 2021). | | | 24* | | Power of Attorney (included on signature page to the Annual Report on Form 10-K). | | | 31.1* | | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | 31.2* | | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | 32* | | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | | 97.1* | | Policy for Recovery of Erroneously Awarded Compensation | | | 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. | | | # | Portions of schedules and exhibits to the agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the Securities and Exchange Commission upon request. | | **Item 16. Form 10-K Summary** None. | 40 | | | | | **SIGNATURES** Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized, in Rochester, New York, on the 31st day of March, 2026. | | SYNTEC OPTICS HOLDINGS, INC. | | | | | | | | | By: | /s/ Al Kapoor | | | | | Chairman and Chief Executive Officer | | | | | (Principal Executive Officer) | | | | | | | | | By: | /s/ Dean Rudy | | | | | Chief Financial Officer | | | | | (Principal Financial and Accounting Officer) | | Pursuant to the requirements of the Securities Act of 1933, this Annual Report has been signed by the following persons in the capacities and on the dates indicated: | Signature | | Title | | Date | | | | | | | | | | /s/ Al Kapoor | | Chairman and Chief Executive Officer | | March 31, 2026 | | | Al Kapoor | | (Principal Executive Officer) | | | | | | | | | | | | /s/ Dean Rudy | | Chief Financial Officer | | March 31, 2026 | | | Dean Rudy | | (Principal Financial and Accounting Officer) | | | | | | | | | | | | /s/ Walter A. Bishop | | Director | | March 31, 2026 | | | Walter A. Bishop | | | | | | | | | | | | | | /s/ Albert A. Manzone | | Director | | March 31, 2026 | | | Albert A. Manzone | | | | | | | | | | | | | | /s/ Brent D. Rosenthal | | Director | | March 31, 2026 | | | Brent D. Rosenthal | | | | | | | 41 | | | | | **Item 8. Financial Statements and Supplemental Data** **SYNTEC OPTICS HOLDINGS, INC.** **INDEX TO CONSOLIDATED FINANCIAL STATEMENTS** | Report of Independent Registered Public Accounting Firm (PCAOB ID# 199) | F-2 | | | Report of Independent Registered Public Accounting Firm (PCAOB ID# 688) | F-3 | | | Consolidated Balance Sheets as of December 31, 2025 and 2024 | F-4 | | | Consolidated Statements of Operations for the Years Ended December 31, 2025 and 2024 | F-5 | | | Consolidated Statements of Changes in Stockholders Equity for the Years Ended December 31, 2025 and 2024 | F-6 | | | Consolidated Statements of Cash Flows for the Years Ended December 31, 2025 and 2024 | F-7 | | | Notes to Consolidated Financial Statements | F-8 | | | F-1 | | **Report of Independent Registered Public Accounting Firm** To the Stockholders and Board of Directors of Syntec Optics Holdings, Inc. **Opinion on the Financial Statements** We have audited the accompanying consolidated balance sheet of Syntec Optics Holdings, Inc. and subsidiaries (the Company) as of December 31, 2025, the related consolidated statements of operations, changes in stockholders equity and cash flows for the year ended December 31, 2025, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. **Basis for Opinion** These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on the Companys financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. /s/ CBIZ CPAs P.C. CBIZ CPAs P.C. We have served as the Companys auditor since 2023 (such date takes into account the acquisition of the attest business of Marcum llp by CBIZ CPAs P.C. effective November 1, 2024). Houston, Texas March 31, 2026 | F-2 | | **Report of Independent Registered Public Accounting Firm** To the Stockholders and Board of Directors of Syntec Optics Holdings, Inc. **Opinion on the Financial Statements** We have audited the accompanying consolidated balance sheet of Syntec Optics Holdings, Inc. and subsidiaries (the Company) as of December 31, 2024, the related consolidated statements of operations, changes in stockholders equity, and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. **Basis for Opinion** These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on the Companys financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. /s/ Marcum LLP Marcum LLP We have served as the Companys auditor from 2023 through 2025. Houston, Texas October 3, 2025 | F-3 | | **SYNTEC OPTICS HOLDINGS, INC.** **CONSOLIDATED BALANCE SHEETS** **DECEMBER 31, 2025 AND 2024** | | | 2025 | | | 2024 | | | | ASSETS | | | | | | | | | | | Current Assets | | | | | | | | | | | Cash | | $ | 358,867 | | | $ | 598,787 | | | | Accounts Receivable, Net | | | 6,241,768 | | | | 5,739,205 | | | | Inventory | | | 7,884,943 | | | | 6,953,278 | | | | Prepaid Expenses and Other Assets | | | 655,827 | | | | 596,589 | | | | Income Tax Receivable | | | - | | | | 9,794 | | | | | | | | | | | | | | | Total Current Assets | | | 15,141,405 | | | | 13,897,653 | | | | | | | | | | | | | | | Property and Equipment, Net | | | 9,172,703 | | | | 11,668,859 | | | | | | | | | | | | | | | Deferred Tax Asset | | | - | | | | 439,942 | | | | | | | | | | | | | | | Total Assets | | $ | 24,314,108 | | | $ | 26,006,454 | | | | | | | | | | | | | | | LIABILITIES AND STOCKHOLDERS EQUITY | | | | | | | | | | | | | | | | | | | | | | Current Liabilities | | | | | | | | | | | Accounts Payable | | $ | 2,691,748 | | | $ | 2,706,392 | | | | Accrued Expenses | | | 683,397 | | | | 814,600 | | | | Federal Income Tax Payable | | | 169,582 | | | | - | | | | Deferred Revenue | | | 66,420 | | | | 36,512 | | | | Line of Credit | | | 6,763,863 | | | | 6,263,863 | | | | Current Maturities of Debt Obligations | | | 93,358 | | | | 467,742 | | | | Current Maturities of Debt Obligations - Related Party | | | 406,495 | | | | - | | | | Current Maturities of Debt Obligations | | | 406,495 | | | | - | | | | Current Maturities of Finance Lease Obligations | | | 354,499 | | | | 284,002 | | | | | | | | | | | | | | | Total Current Liabilities | | | 11,229,362 | | | | 10,573,111 | | | | | | | | | | | | | | | Long-Term Liabilities | | | | | | | | | | | Long-Term Debt Obligations | | | 860,548 | | | | 2,614,812 | | | | Long-Term Debt Obligations - Related Party | | | 1,268,732 | | | | - | | | | Long-Term Debt Obligations | | | 1,268,732 | | | | - | | | | Long-Term Finance Lease Obligations | | | 1,414,611 | | | | 1,784,449 | | | | | | | | | | | | | | | Total Long-Term Liabilities | | | 3,543,891 | | | | 4,399,261 | | | | | | | | | | | | | | | Total Liabilities | | | 14,773,253 | | | | 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 December 31, 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 | | | 2,677,181 | | | | 2,377,204 | | | | Retained Earnings | | | 6,859,982 | | | | 8,653,209 | | | | | | | | | | | | | | | Total Stockholders Equity | | | 9,540,855 | | | | 11,034,082 | | | | | | | | | | | | | | | Total Liabilities and Stockholders Equity | | $ | 24,314,108 | | | $ | 26,006,454 | | | *See Notes to Consolidated Financial Statements.* | F-4 | | **SYNTEC OPTICS HOLDINGS, INC.** **CONSOLIDATED STATEMENTS OF OPERATIONS** **FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024** | | | 2025 | | | 2024 | | | | | | | | | | | | | Net Sales | | $ | 28,083,985 | | | $ | 28,449,941 | | | | | | | | | | | | | | | Cost of Goods Sold | | | 21,554,285 | | | | 22,747,615 | | | | | | | | | | | | | | | Gross Profit | | | 6,529,700 | | | | 5,702,326 | | | | | | | | | | | | | | | General and Administrative Expenses | | | 7,047,300 | | | | 8,278,720 | | | | | | | | | | | | | | | Loss from Operations | | | (517,600 | ) | | | (2,576,394 | ) | | | | | | | | | | | | | | Other (Expense) Income | | | | | | | | | | | Other (Expense) Income | | | (39,875 | ) | | | 346,835 | | | | Interest Expense, Including Amortization of Debt Issuance Costs | | | (795,810 | ) | | | (764,934 | ) | | | Total Other Expense | | | (835,685 | ) | | | (418,099 | ) | | | | | | | | | | | | | | Loss Before Provision for (Benefit) Income Taxes | | | (1,353,285 | ) | | | (2,994,493 | ) | | | | | | | | | | | | | | Provision (Benefit) for Income Taxes | | | 439,942 | | | | (514,832 | ) | | | | | | | | | | | | | | Net Loss | | $ | (1,793,227 | ) | | $ | (2,479,661 | ) | | | | | | | | | | | | | | Net Loss per Common Share | | | | | | | | | | | Basic and diluted | | $ | (0.05 | ) | | $ | (0.07 | ) | | | | | | | | | | | | | | Weighted Average Number of Common Shares Outstanding | | | | | | | | | | | Basic and diluted | | | 36,920,226 | | | | 36,688,266 | | | *See Notes to Consolidated Financial Statements.* | F-5 | | **SYNTEC OPTICS HOLDINGS, INC.** **CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY** **FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024** | | | | | | | | | | | | | | | | | | | | | | | | | | | Additional | | | | | | | | | | | | Common Stock | | | Paid-In | | | Retained | | | | | | | | | Shares | | | Amount | | | Capital | | | Earnings | | | Total | | | | Balances, December 31, 2023 | | | 36,688,266 | | | $ | 3,669 | | | $ | 1,927,204 | | | $ | 11,132,870 | | | $ | 13,063,743 | | | | | | | | | | | | | | | | | | | | | | | | | | | Stock-Based Compensation | | | - | | | | - | | | | 450,000 | | | | - | | | | 450,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | Net Loss | | | - | | | | - | | | | - | | | | (2,479,661 | ) | | | (2,479,661 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | Balances, December 31, 2024 | | | 36,688,266 | | | | 3,669 | | | | 2,377,204 | | | | 8,653,209 | | | | 11,034,082 | | | | | | | | | | | | | | | | | | | | | | | | | | | Balances | | | 36,688,266 | | | $ | 3,669 | | | $ | 2,377,204 | | | $ | 8,653,209 | | | $ | 11,034,082 | | | | | | | | | | | | | | | | | | | | | | | | | | | Stock-Based Compensation | | | 231,960 | | | | 23 | | | | 299,977 | | | | - | | | | 300,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | Net Loss | | | - | | | | - | | | | - | | | | (1,793,227 | ) | | | (1,793,227 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | Balances, December 31, 2025 | | | 36,920,226 | | | $ | 3,692 | | | $ | 2,677,181 | | | $ | 6,859,982 | | | $ | 9,540,855 | | | | Balances | | | 36,920,226 | | | $ | 3,692 | | | $ | 2,677,181 | | | $ | 6,859,982 | | | $ | 9,540,855 | | | *See Notes to Consolidated Financial Statements.* | F-6 | | **SYNTEC OPTICS HOLDINGS, INC.** **CONSOLIDATED STATEMENTS OF CASH FLOWS** **FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024** | | | 2025 | | | 2024 | | | | Cash Flows From Operating Activities | | | | | | | | | | | Net Loss | | $ | (1,793,227 | ) | | $ | (2,479,661 | ) | | | Adjustments to Reconcile Loss to Net Cash (Used In) | | | | | | | | | | | Provided By Operating Activities: | | | | | | | | | | | Adjustments to Reconcile Loss to Net Cash (Used In) Provided By Operating Activities: | | | | | | | | | | | Depreciation and Amortization | | | 2,613,229 | | | | 2,765,713 | | | | Amortization of Debt Issuance Costs | | | 15,501 | | | | 15,057 | | | | Stock-Based Compensation | | | 300,000 | | | | 450,000 | | | | Gain on Disposal of Property and Equipment | | | - | | | | (309,000 | ) | | | Change in Allowance for Expected Credit Losses | | | 15,869 | | | | (121,767 | ) | | | Change in Reserve for Obsolescence | | | 80,667 | | | | 186,285 | | | | Deferred Income Taxes | | | 439,942 | | | | (514,832 | ) | | | (Increase) Decrease in: | | | | | | | | | | | Accounts Receivable | | | (518,432 | ) | | | 1,182,626 | | | | Inventory | | | (1,012,332 | ) | | | (1,305,454 | ) | | | Prepaid Expenses and Other Assets | | | (59,238 | ) | | | (237,146 | ) | | | Increase (Decrease) in: | | | | | | | | | | | Accounts Payables and Accrued Expenses | | | 381,372 | | | | (231,163 | ) | | | Federal Income Tax Payable | | | 179,376 | | | | (380,000 | ) | | | Deferred Revenue | | | 29,908 | | | | 36,512 | | | | Net Cash Provided By (Used In) Operating Activities | | | 672,635 | | | | (942,830 | ) | | | | | | | | | | | | | | Cash Flows From Investing Activities | | | | | | | | | | | Purchases of Property and Equipment | | | (644,292 | ) | | | (1,239,866 | ) | | | Proceeds from Disposal of Property and Equipment | | | - | | | | 309,000 | | | | | | | | | | | | | | | Net Cash Used in Investing Activities | | | (644,292 | ) | | | (930,866 | ) | | | | | | | | | | | | | | Cash Flows From Financing Activities | | | | | | | | | | | Borrowing on Line of Credit, Net | | | 500,000 | | | | (273,729 | ) | | | Borrowing on Debt Obligations | | | - | | | | 1,100,388 | | | | Borrowing on Debt Obligations - Related Parties | | | 1,268,732 | | | | - | | | | Repayments on Debt Obligations | | | (1,737,654 | ) | | | (420,802 | ) | | | Repayments on Finance Lease Obligations | | | (299,341 | ) | | | (91,619 | ) | | | | | | | | | | | | | | Net Cash (Used In) Provided By Financing Activities | | | (268,263 | ) | | | 314,238 | | | | | | | | | | | | | | | Net Decrease in Cash | | | (239,920 | ) | | | (1,559,458 | ) | | | | | | | | | | | | | | Cash - Beginning | | | 598,787 | | | | 2,158,245 | | | | | | | | | | | | | | | Cash - Ending | | $ | 358,867 | | | $ | 598,787 | | | | | | | | | | | | | | | Supplemental Cash Flow Disclosures: | | | | | | | | | | | | | | | | | | | | | | Cash Paid for Interest | | $ | 756,519 | | | $ | 738,010 | | | | | | | | | | | | | | | Cash Paid for Taxes | | $ | - | | | $ | 568,143 | | | | | | | | | | | | | | | Supplemental Disclosures of Non-Cash Investing Activities: | | | | | | | | | | | | | | | | | | | | | | (Decrease) Increase in Assets Acquired and Included in AP | | $ | 527,219 | | $ | 198,584 | | | | Issuance of finance lease for acquisition of equipment | | | | | | $ | 2,160,070 | | | | | | | | | | | | | | | De-recognition of PPE and Intangible Asset transaction | | $ | - | | | $ | 560,000 | | | *See Notes to Consolidated Financial Statements.* | F-7 | | **SYNTEC OPTICS HOLDINGS, INC.** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** **Note 1 Nature of Business and Significant Accounting Policies** *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. *Basis of Presentation* The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). *Principles of Consolidation* The consolidated financial statements include the accounts of Syntec Optics Holdings, Inc. and its wholly owned subsidiary, Syntec Optics. The consolidated financial statements also include the accounts of ELR Associates, LLC (ELR), a variable interest entity (VIE) wherein the Company is the primary beneficiary. Syntec Optics variable interest in ELR is the result of providing a guaranty of payment for ELRs mortgage on the manufacturing facility used exclusively by Syntec Optics. The consolidated financial statements include the financial position and result of operations of ELR, consisting principally of cash and cash equivalents, other assets and property and equipment of $2.5 million and $2.3 million and total liabilities consisting of current liabilities and long-term debt of $1.4 million and $1.8 million as of December 31, 2025 and 2024, respectively. ELR had net income of $0.2 million and $0.2 million for the years ended December 31, 2025 and 2024. As of December 31, 2025 and 2024, there are no VIE assets to settle, only the VIEs obligations, and no liabilities with recourse to VIEs creditors. All significant intercompany accounts and transactions have been eliminated in consolidation. *Use of Estimates* The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenue and expenses during the reporting period. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may differ from those estimates. | F-8 | | **SYNTEC OPTICS HOLDINGS, INC.** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** **Note 1 Nature of Business and Significant Accounting Policies - Continued** *Cash* The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. *Concentrations of Credit Risk* The Companys financial instruments that are exposed to concentrations of credit risk consist primarily of cash and accounts receivable. The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes that they are not exposed to any significant credit risk on cash. The Company also routinely assesses the financial strength of their customers and, consequently, believes that its accounts receivable credit risk exposure is limited. On December 31, 2025 and 2024 there were amounts due from three customers that totaled approximately 59% and 54% respectively, of accounts receivable. The outstanding accounts receivable due from these customers at December 31, 2025 and 2024 were approximately $3.7 million and $3.2 million respectively. *Accounts Receivable* The Company grants credit to substantially all customers and carries its accounts receivable at original invoice, net of an allowance for expected credit losses. On a periodic basis, management evaluates accounts receivable and adjusts the allowance for expected credit losses. The allowance at December 31, 2025 and 2024 amounted to approximately $133 thousand and $117 thousand, respectively. The Company had no significant write offs in the current or prior year. The Company evaluates the receivables by portfolio segment including the general receivables and those identified for separate treatment. Losses on general receivables are estimated at historical losses amounting to 0.03% for under 30 days, 0.05% for 30-60 days, 1.03% for 60-90 days, and 3.0% for over 90 days aged. Balances identified for special treatment are evaluated individually. Customer balances are written off when amounts are deemed uncollectible, or credits are issued. The Company generally does not accrue interest on past due balances. *Inventory* Inventory consists of raw materials, work-in-process, finished goods and allocated manufacturing labor and overhead. Inventory is stated at the lower of cost using the first-in, first-out basis or net realizable value. The Company provides inventory reserves for excess, obsolete, or slow-moving inventory, based on changes in customer demand, technology developments or other economic factors. *Property and Equipment Net of Accumulated Deprecation* Property and equipment is stated at cost and is depreciated over the estimated useful lives of the respective assets. The cost of normal maintenance and repairs is charged to expense as incurred, whereas expenditures, which materially extend useful lives, are capitalized. When depreciable property is retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in other income. Depreciation is provided for on the straight-line method over the following estimated useful lives: Schedule of Property and Equipment Estimated Useful Lives | | | Years | | | Machinery and Equipment | | 7 | | | Building and Leasehold Improvements | | 14 - 15 and/or Lesser of Useful Life or Lease Term | | | Office Furniture and Equipment | | 3 - 5 | | | Tooling | | 3 - 10 | | | Vehicles | | 5 | | *Long-Lived Assets* Long-lived assets, including property and equipment, are stated at cost. The Company reviews its long-lived assets, including right of use assets, for possible impairment when events or changes in circumstances indicate that their carrying amounts may not be recoverable. If such events or changes in circumstances are present, the carrying value of the asset is compared to the undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. If the carrying amount exceeds the undiscounted cash flows, an impairment loss is measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset. During the years ended December 31, 2025 and 2024, no impairment charges were recorded. | F-9 | | **SYNTEC OPTICS HOLDINGS, INC.** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** **Note 1 Nature of Business and Significant Accounting Policies - Continued** *Leases* The Company determines if an arrangement is or contains a lease at inception. The Company records right-of-use (ROU) assets and lease obligations for its finance and operating leases, which are initially based on the discounted future minimum lease payments over the term of the lease. The lease term is defined as the non-cancellable period of the lease plus any options to extend the lease when it is reasonably certain that it will be exercised. Leases may also include options to terminate the arrangement or options to purchase the underlying asset. For leases with an initial term of 12 months or less, no right of use (ROU) assets or lease liabilities are recorded on the balance sheet and the Company recognizes short-term lease expense for these leases on a straight-line basis over the lease term. The Companys lease agreements do not contain any material residual value guarantees or material restrictive covenants. None of the Companys lease agreements include variable rental payments. The Company has elected to separate lease from non-lease components for all leases. Operating lease expense is recognized on a straight-line basis over the lease term and is included in general and administrative expense. Amortization expense for finance leases is recognized on a straight-line basis over the lease term and is included in cost of goods sold or general and administrative expense. Interest expense for finance leases is recognized using the effective interest method. Short-term rentals and payments associated with non-lease components are expensed as incurred. *Debt Issuance Costs* The Company defers certain costs incurred in connection with obtaining financing. Costs related to line of credit agreements are recorded as a contra liability and are amortized to interest expense over the term of the agreement. Costs related to long-term debt financing are presented as a direct deduction from the carrying amount of the related debt and amortized over the term of the related debt as additional interest. *Shipping and Handling Fees and Costs* Shipping and handling fees billed to the customer are recorded in net sales and the related costs incurred for shipping and handling are included in costs of goods sold. *Research and Development* The Company expenses research and development costs as incurred in accordance with ASC 730. Research and development costs are primarily comprised of engineering labor, prototype materials, and third-party consulting and testing services, and are included within selling, general and administrative expenses in the accompanying consolidated statements of operations. Research and development expense totaled approximately $0.6 M and $1.0 M for the years ended December 31, 2025 and 2024, respectively. *Advertising* Advertising costs are charged to operations when incurred. Advertising expense for the years ended December 31, 2025 and 2024 were approximately $148 thousand and $229 thousand, respectively. | F-10 | | **SYNTEC OPTICS HOLDINGS, INC.** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** **Note 1 Nature of Business and Significant Accounting Policies - Continued** *Income Taxes* The Company accounts for income taxes with the recognition of estimated income taxes payable or refundable on income tax returns for the current year and for the estimated future tax effect attributable to temporary differences and carry forwards. Measurement of deferred income items is based on enacted tax laws, including tax rates, with the measurement of deferred income tax assets being reduced by available tax benefits not expected to be realized in the immediate future. A valuation allowance is established when it is necessary to reduce deferred income tax assets to amounts for which realization is likely. In assessing the need for a valuation allowance, management estimates future taxable income, considering the feasibility of ongoing tax planning strategies and the realizability of tax loss carryforwards following tax law ordering rules. The Company reviews tax positions taken to determine if it is more likely than not that the position would be sustained upon examination resulting in an uncertain tax position. The Company does not have any material unrecognized tax benefit as of December 31, 2025 or 2024. The Company recognizes interest accrued and penalties related to unrecognized tax benefits in tax expense. During the years ended December 31, 2025 and 2024, the Company recognized no interest and penalties. The Company files U.S. federal tax returns and tax returns in various states. *Income (Loss) Per Share* Basic income (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted income (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. In periods where losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive. The Company did not have any dilutive shares for the years ended December 31, 2025 and 2024. *Stock-Based Compensation* The Company recognizes stock-based compensation expense for equity awards, such as restricted stock units, in accordance with ASC 718. Equity-classified awards are measured at grant-date fair value and expensed over the service period. *Fair Value of Financial Instruments* The Company follows the fair value measurement guidance required by accounting principles generally accepted in the United States of America for financial and nonfinancial assets and liabilities. This guidance defines fair value and establishes a framework for measuring fair value and related disclosure requirements. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The carrying amounts of financial instruments, including cash, accounts receivable, accounts payable, accrued expenses and borrowings approximate fair value, based on their terms or due to the short maturity of these instruments. *Recently Adopted Accounting Pronouncements* 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 a reporting entitys effective tax rate reconciliation, as well as information related to income taxes paid to enhance the transparency and decision usefulness of income tax disclosures. This ASU is effective for the annual period ended December 31,2025and should be applied on a prospective basis with theoptionto apply the standard retrospectively. Early adoption ispermitted. 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 the year ended December 31, 2025. The adoption of ASU 2023-09 did not have a material impact on the Companys financial statementsincluded inthis Annual Report on Form 10-K but did result inadditionaldisclosures in the income tax footnote. | F-11 | | **SYNTEC OPTICS HOLDINGS, INC.** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** **Note 1 Nature of Business and Significant Accounting Policies - Continued** *Recent Accounting Pronouncements* In November 2024, the FASB issued ASU 2024-03, *Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures*(Subtopic 220-40): *Disaggregation of Income Statement Expenses*(ASU 2024-03). ASU 2024-03 requires additional disclosure of specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. ASU 2024-03 may be applied prospectively with the option for retrospective application for all prior periods presented. The Company is currently evaluating the impact of adopting this guidance on the Companys current financial position, results of operations or financial statement disclosures. In July 2025, the FASB issued ASU 2025-05, Financial InstrumentsCredit 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 mayelecta 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 itsconsolidatedfinancial 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,representingthe changes to the Codification that (1) clarify, (2) correct errors, or (3) make minor improvements.Generally, theamendments 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 ispermitted. We are currently evaluating the provisions of this ASU and do not expect this ASU to have a material impact on ourconsolidatedfinancial statements**.** *JOBS Act Accounting Election* As an emerging growth company under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, Syntec Optics can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. Syntec Optics has elected to avail itself of this exemption from new or revised accounting standards and, therefore, will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. Syntec Optics intends to rely on other exemptions provided by the JOBS Act, including without limitation, not being required to comply with the auditor attestation requirements of Section 404(b) of Sarbanes-Oxley. As a result, Syntec Optics financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. Syntec Optics will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of the consummation of OmniLits initial public offering, (ii) the last day of the fiscal year in which Syntec Optics has total annual gross revenue of at least $1.235 billion, (iii) the last day of the fiscal year in which Syntec Optics is deemed to be a large accelerated filer as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of Syntec Optics common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year, or (iv) the date on which Syntec Optics has issued more than $1.0 billion in non- convertible debt securities during the prior three-year period. **Note 2 Revenue Recognition** The Company recognizes revenue in accordance with Accounting Standard Codification 606, Revenue from Contracts with Customers (ASC 606), which provides a five-step model for recognizing revenue from contracts with customers as follows: | | | Identify the contract with a customer | | | | | Identify the performance obligations in the contract | | | | | Determine the transaction price | | | | | Allocate the transaction price to the performance obligations in the contract | | | | | Recognize revenue when or as performance obligations are satisfied | | The Companys revenue is primarily derived from three categories of products and services, (i) the production and assembly of molded plastic optics parts including polymer and glass parts, opto-mechanicals, thin film coating, diamond turned optics and optical systems including electro-optics assembly, (Products) (ii) the manufacture of custom tooling used to manufacture molded products, (Custom Tooling) and (iii) non-recurring engineering services (Non-Recurring Engineering). The Companys products are marketed and sold primarily to end-user commercial customers throughout the United States and Europe. Sales of products and services are subject to economic conditions and may fluctuate based on changes in the industry, trade policies and financial markets. The Company assesses the contract term as the period in which the parties to the contract have presently enforceable rights and obligations. Certain customer contracts may provide for either party to terminate the contract upon written notice. *Nature of Products and Services* Revenue from the sale of molded plastic, polymer and glass parts, opto-mechanicals, thin film coating, diamond turned optic and optical systems is recognized upon transfer of control to the customer, which is typically upon shipment. These sales do not meet the criteria for revenue to be recognized over time. The Company has elected to treat shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated equipment and parts and not as a separate performance obligation. In general, the Company recognizes revenue from tooling contracts upon delivery and acceptance by the customer, which signifies successful completion of the contract. Revenue from non-recurring engineering services is recognized upon completion of the negotiated services. These sales do not meet the criteria for revenue to be recognized over time. Non-recurring engineering services are one-off items that are unique to programs such as expedite fees or set-up fees which are billed upon completion of the task with payment terms of 30 - 60 days from date of invoice. | F-12 | | **SYNTEC OPTICS HOLDINGS, INC.** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** **Note 2 Revenue Recognition Continued** *Transaction Price* The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring goods and services to the customer. Revenue is recorded based on the transaction price, which includes fixed consideration. The Companys contracts do not include variable consideration. *Contract Balances* The timing of revenue recognition generally aligns with the right to invoice the customer. The Company records accounts receivable when it has the unconditional right to issue an invoice and receive payment, regardless of whether revenue has been recognized. The balance in accounts receivable at December 31, 2025 and 2024 was $6.2 million and $5.7 million respectively. Deferred revenue is recognized on the consolidated balance sheets when cash payments are received in advance of the Company satisfying its performance obligation. Deferred revenue is recognized as revenue on the consolidated statements of operations when the Company satisfies its performance obligation to the customer. Balances in deferred revenue at December 31, 2025 and 2024 were $0.07 million - and $0.04 million , respectively. *Costs to Obtain a Contract* The Company did not incur costs of obtaining contracts expected to benefit longer than one year. As a result, there are no capitalized contract acquisition costs as of December 31, 2025 or 2024. *Warranties* The buyer shall have thirty (30) days from the date of shipment to inspect and either accept or reject. If goods are rejected, written notice of rejection and the specific reasons therefore must be sent to the Company within such thirty (30) day period after receipt. Failure to reject goods or to notify the Company of errors, shortages, or other non-compliance with the agreement within such thirty (30) day period shall constitute irrevocable acceptance of goods and admission that they fully comply with the agreement. *Disaggregated Revenues* The following table disaggregates revenue by revenue recognition methodologies as outlined above for the years ended December 31: Schedule of Disaggregated Revenues | | | 2025 | | | 2024 | | | | | | | | | | | | | Products | | $ | 27,437,210 | | | $ | 27,663,086 | | | | Custom Tooling | | | 303,558 | | | | 536,668 | | | | Non-Recurring Engineering | | | 343,217 | | | | 250,187 | | | | | | | | | | | | | | | Total | | $ | 28,083,985 | | | $ | 28,449,941 | | | 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 years ended December 31: | | | 2025 | | | 2024 | | | | | | | | | | | | | Communication | | $ | 5,178,703 | | | $ | 8,036,808 | | | | Consumer | | | 5,714,682 | | | | 4,655,954 | | | | Defense | | | 6,833,740 | | | | 6,507,553 | | | | Medical | | | 10,356,860 | | | | 9,249,626 | | | | | | | | | | | | | | | Total | | $ | 28,083,985 | | | $ | 28,449,941 | | | The Company has one significant customer located in the UK (outside of the US). Sales for this UK customer amounted to $5.6 million in 2025 and $4.9 million in 2024. No other significant sales were outside of the US. **Note 3 Warrants and Earnout** ** *Warrants* As part of the reverse capitalization transaction related to the merger, the Company issued public warrants. Refer to Note 12 for a further description of the warrants. *Earnout* The former holders of shares of Legacy Syntec common stock are entitled to receive their pro rata share of up to 26,000,000 additional shares of common stock (the Contingent Earnout). The Company will issue 26,000,000 additional shares of Common Stock (the Contingent Earnout) to the Companys existing stockholders at the Closing, which Contingent Earnout shares will vest upon Syntec Common Stock achieving the following stock trading price thresholds (the Contingent Earnout Trigger Price) following the Closing: one-third (1/3rd) at $12.50 per share, one-third (1/3rd) at $14.00 per share, and one-third (1/3rd) at $15.50 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like). The Contingent Earnout shares which remain unvested as of the date five (5) years from the Closing (the Earnout Period) will be deemed cancelled and no longer subject to vesting. | F-13 | | **SYNTEC OPTICS HOLDINGS, INC.** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** **Note 3 Warrants and Earnout Continued** The Company accounts for the Contingent Earnout Shares as either equity-classified or liability-classified instruments based on an assessment of the Contingent Earnout Shares specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity (ASC 480) and ASC 815, Derivatives and Hedging (ASC 815) as defined below. The Company has determined that the Contingent Earnout Shares are indexed to the Companys common stock and are therefore not precluded from equity classification. If the Contingent Earnout Shares are later determined to be liability-classified instruments, the Company would recognize subsequent changes in the fair value of such Contingent Earnout Shares within earnings at each reporting period during the earnout period. The pro forma value of the Contingent Earnout Consideration was estimated utilizing a Monte Carlo simulation model. The significant assumptions utilized in estimating the fair value of Contingent Earnout Consideration include the following: (1) our Common Stock price of $8.73-$15.76; (2) normal distribution; (3) values assessed after the Earnout Period of five (5) years and; (4) discount rates ranging from 15.5%-19.5%. The accounting treatment of the Contingent Earnout Shares have been recognized at fair value upon the closing of the merger and classified in stockholders equity. **Note 4 Inventory** Inventory consists of the following at December 31: Schedule of Inventory | | | 2025 | | | 2024 | | | | | | | | | | | | | Raw Materials | | $ | 360,280 | | | $ | 487,405 | | | | Work-in-Process | | | 7,956,924 | | | | 6,815,425 | | | | Finished Goods | | | 151,311 | | | | 153,353 | | | | Inventory gross | | | 8,468,515 | | | | 7,456,183 | | | | Less: Reserve for Obsolescence | | | 583,572 | | | | 502,905 | | | | | | | | | | | | | | | Inventory | | $ | 7,884,943 | | | $ | 6,953,278 | | | The Company experienced a significant increase in the Reserve for Obsolescence due to incremental risk in one particular customer which was assessed at a higher rate because of market instability. | F-14 | | **SYNTEC OPTICS HOLDINGS, INC.** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** **** **Note 5 Property and Equipment** Property and equipment consists of the following at December 31: Schedule of Property and Equipment | | | 2025 | | | 2024 | | | | | | | | | | | | | Machinery and Equipment | | $ | 34,541,704 | | | $ | 34,430,556 | | | | Building and Leasehold Improvements | | | 5,483,616 | | | | 5,483,616 | | | | Land | | | 130,000 | | | | 130,000 | | | | Office Furniture and Equipment | | | 2,295,748 | | | | 2,295,749 | | | | Tooling | | | 169,307 | | | | 163,381 | | | | Vehicles | | | 24,059 | | | | 24,059 | | | | Property and Equipment, Gross | | | 42,644,434 | | | | 42,527,361 | | | | Less: Accumulated Depreciation | | | 33,471,731 | | | | 30,858,502 | | | | | | | | | | | | | | | Property and Equipment, Net | | $ | 9,172,703 | | | $ | 11,668,859 | | | Depreciation expenses were approximately $2,766,000 and $2,769,000 for the years ended December 31, 2025 and 2024, respectively. | F-15 | | **SYNTEC OPTICS HOLDINGS, INC.** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** **Note 6 Revolving Credit Facility M&T Bank** **** On November 8, 2023, Syntec Optics Holdings, Inc. (the Company) entered into an Amended and Restated Credit Agreement (the Credit Agreement) with M&T Bank to refinance prior indebtedness. The Credit Agreement provides for a revolving credit facility (the Revolving Facility) and previously provided for term and equipment loan facilities. As of December 31, 2025 and 2024, the Revolving Facility has a maximum commitment of $7.5 million and $8.0 million, respectively, and matures in November 2026. Borrowings bear interest at a rate equal to one-month Secured Overnight Financing Rate (SOFR) plus a margin of 3.00%, for both periods. Interest is payable monthly. As of December 31, 2025 and December 31, 2024, outstanding borrowings under the Revolving Facility were $6,763,863 and $6,263,863, respectively. The weighted average interest rate on outstanding borrowings at December 31, 2025 was approximately consistent with market SOFR plus the contractual margin. The Credit Agreement contains customary representations and warranties and affirmative and negative covenants, including financial covenants requiring the Company to maintain a minimum fixed charge coverage ratio and a maximum total leverage ratio. During 2024 and 2025, the Company obtained certain amendments and waivers related to financial covenant compliance. On November 12, 2025, the Company received a written waiver from M&T Bank with respect to certain covenant defaults as of September 30, 2025. In connection with the waiver, the Company agreed to: | | Repay approximately $1.37 million of outstanding term and equipment indebtedness; | | | | | | | | | Reduce the revolving commitment from $8.0 million to $7.5 million; and | | | | | | | | | Execute subordination agreements with respect to shareholder indebtedness. | | The Company paid a prepayment premium of $63,416 in connection with the repayment of term and equipment debt. No amendment fees were paid to the lender in November or December 2025. See further discussion of this debt in Note 7. Effective December 31, 2025, the Company entered into a Second Amendment to the Credit Agreement and executed a replacement revolving note reflecting the reduced commitment. The amendment did not modify the November 2026 maturity date or the applicable covenant thresholds for 2026. As of December 31, 2025, and through the date of this filing, the Company was in compliance with all financial covenants under the Credit Agreement. The Revolving Facility is classified as a current liability as of December 31, 2025 due to its November 2026 contractual maturity. | F-16 | | **SYNTEC OPTICS HOLDINGS, INC.** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** **Note 7 Long-Term Debt** On November 12, 2025, the Company repaid in full two term and equipment notes with M&T Bank in the aggregate amount of $1,368,732. Following repayment, no balances remained outstanding under these facilities at December 31, 2025. **Subordinated Shareholder Note** **** On November 12, 2025, in connection with the repayment of term and equipment debt, the Company entered into a subordinated term note (the Shareholder Note) with its majority stockholder in the principal amount of $1,268,732. The Shareholder Note: | | Bears interest at 6.953% per annum; | | | | | | | | | Amortizes over 35 monthly payments; | | | | | | | | | Matures on October 31, 2028, at which time all remaining principal and accrued interest are due; and | | | | | | | | | Is expressly subordinated to the Companys obligations under the Credit Agreement. | | Pursuant to a subordination agreement executed with M&T Bank, prepayments of the Shareholder Note are prohibited and payments are limited to interest only, subject to prior written approval by M&T Bank. The lender retains sole discretion regarding approval of such payments. There are no cross-default provisions between the Shareholder Note and the Credit Agreement. The Shareholder Note is classified as long-term debt at December 31, 2025, except for the portion contractually due within twelve months, if any. Schedule of Long Term Debt Maturities | | | 2025 | | | 2024 | | | | | | | | | | | | | The Company entered into a $863,607 mortgage note payable, securitized by the Companys 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. | | $ | 799,052 | | | $ | 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. This note was paid off in November of 2025 as part of a modification to the M&T debt package. | | | - | | | | 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. This note was paid off in November of 2025 as part of a modification to the M&T debt package. | | | - | | | | 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 Companys stockholder. | | | 616,440 | | | | 668,006 | | | | | | | | | | | | | | | The Company entered into a $1,268,732 Stockholder Loan, The proceeds of which were applied to pay down the M&T term notes above. The note is subject to an M&T Bank subordination agreement which may limit any repayments. The note amortization calls for monthly payments of $40,031.03 at 6.95% effective annual rate and matures in 10/31/2028. | | | 1,268,732 | | | | - | | | | | | | | | | | | | | | Total Long-Term Debt | | | 2,684,224 | | | 3,147,312 | | | | | | | | | | | | | | | Less: Unamortized Debt Issuance Costs | | | 55,091 | | | | 64,758 | | | | | | | | | | | | | | | Long-Term Debt, Less Unamortized Debt Issuance Costs | | | 2,629,133 | | | | 3,082,554 | | | | | | | | | | | | | | | Less: Current Maturities | | | 499,853 | | | 467,742 | | | | | | | | | | | | | | | Long-Term Debt | | $ | 2,129,280 | | | $ | 2,614,812 | | | At December 31, 2025, the future debt maturities are as follows: Schedule of Long Term Future Debt Maturities | | | | | | | | December 31, 2026 | | $ | 535,615 | | | | 2027 | | | 534,940 | | | | 2028 | | | 489,977 | | | | 2029 | | | 105,275 | | | | 2030 | | | 109,621 | | | | Thereafter | | | 908,796 | | | | Total | | $ | 2,684,224 | | | | F-17 | | **SYNTEC OPTICS HOLDINGS, INC.** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** **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 up to 84% of their annual compensation, with Syntec matching 50% of employee contributions not to exceed 6% of annual compensation. Total contributions for the Company for the years ended December 31, 2025 and 2024 amounted to $187,159 and $196,198, respectively. **Note 9 Income Taxes** Following is a summary of cash paid for income taxes, net of refunds: Schedule of Cash Paid for Income Tax | | | 2025 | | | 2024 | | | | Federal | | $ | (169,582 | ) | | $ | - | | | | State | | | - | | | | - | | | | Foreign | | | - | | | | - | | | | Total | | $ | (169,582 | ) | | $ | - | | | Following is a summary of Loss before provision for (benefit) income taxes Schedule of Loss Before Provision for (Benefit) Income Taxes | | | 2025 | | | 2024 | | | | Domestic | | $ | (1,353,285 | ) | | $ | (2,994,493 | ) | | | Foreign | | | - | | | | - | | | | Total | | $ | (1,353,285 | ) | | $ | (2,994,493 | ) | | Following is a summary of the components giving rise to the income tax benefit for the years ended December 31: Schedule of Income Tax (Benefit) Provision | | | 2025 | | | 2024 | | | | Current: | | | | | | | | | | | Federal | | $ | - | | | $ | - | | | | State | | | - | | | | - | | | | Total current income taxes | | | - | | | | - | | | | Non - current: | | | | | | | | | | | Federal | | | 439,942 | | | | (514,832 | ) | | | State | | | | | | | | | | | Deferred Tax (Benefit) Provision | | | 439,942 | | | | (514,832 | ) | | | | | | | | | | | | | | Total | | $ | 439,942 | | | $ | (514,832 | ) | | Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financing reporting purposes and the amount used for income tax purposes. Significant components of our deferred tax assets and liabilities are as follows as of December 31: **** Schedule of Tax Deferred Tax Assets and Liabilities | | | 2025 | | | 2024 | | | | NYS Investment Tax Credit | | $ | 1,572,262 | | | $ | 1,565,784 | | | | MA R&D Credit | | | 740,871 | | | | 684,621 | | | | Lease Liability | | | 406,638 | | | | 434,052 | | | | Allowance for Current Expected Credit Losses | | | 30,576 | | | | 24,602 | | | | Net Operating Loss | | | 461,055 | | | | 241,766 | | | | Amortized Startup Costs | | | 406,546 | | | | 400,371 | | | | Amortization on Intangibles | | | 766 | | | | 700 | | | | Section 174 Capitalization | | | 796,843 | | | | 1,032,715 | | | | Inventory Reserve | | | 134,137 | | | | 105,610 | | | | Accrued Vacation | | | - | | | | 15,003 | | | | Business Interest Limitation | | | 341,686 | | | | 134,976 | | | | Valuation Allowance | | | (3,188,611 | ) | | | (2,250,405 | ) | | | Deferred Tax Assets | | | 1,702,769 | | | | 2,389,795 | | | | | | | | | | | | | | | Deferred Tax Liabilities: | | | | | | | | | | | Right of Use Asset | | | (435,764 | ) | | | (456,550 | ) | | | Depreciation | | | (1,267,005 | ) | | | (1,493,303 | ) | | | Deferred Tax Liabilities: | | | (1,702,769 | ) | | | (1,949,853 | ) | | | Deferred Tax Assets (Liabilities), Net | | | - | | | | 439,942 | | | The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory federal income tax rate to income from continuing operations before income taxes as follows for the year ended December 31: Schedule of Reconciliation of Effective Tax Rate | | | | | | | | | | | | 2025 | | | | | | | | | | | | | U.S. federal statutory tax rate | | $ | (284,263 | ) | | | 21.00 | % | | | | | | | | | | | | | | State income taxes, net of federal benefit | | $ | - | | | | 0.00 | % | | | Foreign income taxes | | $ | - | | | | 0.00 | % | | | Effects of cross-border tax laws | | $ | - | | | | 0.00 | % | | | Tax credits | | $ | - | | | | 0.00 | % | | | Change in valuation allowance | | $ | 723,235 | | | | (53.43 | )% | | | Nontaxable or nondeductible items | | | | | | | | | | | Federal Special Deductions | | $ | 21,888 | | | | (1.62 | )% | | | Pass through entity - ELR | | $ | (44,924 | ) | | | 3.32 | % | | | Meals and Entertainment | | $ | 2,521 | | | | (0.19 | )% | | | Other Adjustments | | | | | | | | | | | Interest expense true up | | $ | 14,930 | | | | (1.10 | )% | | | Net operating loss true up | | $ | 6,555 | | | | (0.48 | )% | | | Other, Net | | | | | - | | | Total income tax provision (benefit) | | $ | 439,942 | | | | (32.50 | )% | | The Company adopted ASU 2023-09, Improvements to Income Tax Disclosures, effective January 1, 2025 on a prospective basis. Accordingly, prior period disclosures have not been adjusted. Schedule of Income Tax Benefit | | | 2024 | | | | | | | | | | Statutory Income Tax Rate | | | 21.00 | % | | | | | | | | | | Federal Special Deductions | | | (0.68 | )% | | | State Tax Credits | | | 7.33 | % | | | Change in Valuation Allowance | | | (7.33 | )% | | | Pass Through Entity | | | (2.91 | )% | | | Other, Net | | | (0.18 | )% | | | Effective Tax Rate | | | 17.23 | % | | The tax returns of the Company are open for three years from the date of filing. At the report date, the statute of limitations for federal and state tax returns are open for the Company for 2024, 2023, and 2022. The Company has federal and state net operating loss carryforwards totaling approximately $2.765 million at December 31, 2025. Under the provisions of the Internal Revenue Code, the net operating loss and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. Net operating loss and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50 percent, as defined under Sections 382 and 383 of the Internal Revenue Code, respectively, as well as similar state provisions. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. The Company has evaluated and concluded that section 382 was not triggered. | F-18 | | **SYNTEC OPTICS HOLDINGS, INC.** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** **Note 9 Income Taxes - Continued** The Company has significant deferred tax assets as a result of temporary differences between the taxable income on its tax return and U.S. GAAP income, federal and state R&D tax credit carry forwards. A deferred tax asset generally represents future tax benefits to be received when temporary differences previously reported in the consolidated financial statements become deductible for income tax purposes, or when tax credit carry forwards are utilized on the Company tax returns. The Company assesses the realizability of its deferred tax assets and the need for a valuation allowance based on the guidance provided in current financial accounting standards. Significant judgment is required in determining the realizability of the Companys deferred tax assets. The assessment of whether valuation allowances are required considers, among other matters, the nature, frequency and severity of any current and cumulative losses, forecasts of future profitability, the duration of statutory carry forward periods, the Companys experience with loss carry forwards not expiring unused and tax planning alternatives. In analyzing the need for valuation allowances, the Company first considered its history of cumulative operating results for income tax purposes over the past several years in each of the tax jurisdictions which it operates, its recent financial performance, statutory carry forward periods and tax planning alternatives. In addition, the Company considered both its near-term and long-term financial outlook. After considering all available evidence (both positive and negative), the Company concluded that recognition of a valuation allowance was required in the amount of $3,188,611 and $2,250,405 at December 31, 2025 and 2024, respectively. New York state corporate tax reform has resulted in the reduction of the business income base rate for qualified manufacturers in New York State to 0% beginning in 2014 for Syntec. At December 31, 2025, the Company has $1,572,262 of New York State investment tax credit carryforwards, expiring in various years through 2037. The credits cannot be utilized unless the New York state tax rate is no longer 0%, and as such, the Company has recorded a valuation allowance against the full amount of these credit carryforwards (net of the federal benefit). In addition, the Company has approximately $740,871 of Massachusetts State Research and Development credit carryforwards, expiring in various years through 2037 that the Company has recorded a valuation allowance against. **Evaluation of Remaining Deferred Tax Assets** After consideration of valuation allowances recorded against certain state tax credits, the Company had a net deferred tax asset of approximately $0.9 million as of December 31, 2025. Management evaluated the realizability of these remaining deferred tax assets by assessing all available positive and negative evidence in accordance with ASC 740. The Companys assessment included analysis of recent operating results and projections of future taxable income. Results in 2024 and 2025 were adversely affected by management restructuring, severance, experimental R&D, and other onetime costs. Recent trends show that operating performance has stabilized and profitability is projected to improve beginning in 2026. However, the 2024 and 2025 performance remains as strong negative evidence due to the measurable nature of the results. Forecasted future earnings are expected to generate sufficient taxable income to utilize the remaining deferred tax assets. Additional positive evidence considered in managements evaluation included sustained improvement in the Companys market capitalization, strong customer backlog providing revenue visibility, new major defense related customer engagements, and favorable industry conditions supporting future growth. Such additional factors are largely forward-looking in nature and do not rise to the level of objectively verifiable evidence required to overcome the significant negative evidence present. **Legislative and Regulatory Considerations** During 2025, the U.S. government enacted Public Law 119-21 (sometimes referred to as One Big Beautiful Bill) which includes changes to the treatment of research and development expenditures. Due to operating losses incurred in 2024 and 2025, the Company was not able to fully utilize its available research and development deductions or related tax credits, and such unutilized amounts have been reflected in the Companys income tax provision and deferred tax balances. The Company has incorporated the effects of enacted tax law into its assessment in accordance with ASC 740 and will continue to evaluate the impact of this legislation as further guidance becomes available. The enactment of Public Law 119-21 does not alter managements conclusion regarding the realizability of deferred tax assets, as the Companys recent cumulative losses continue to represent significant negative evidence under ASC 740 that outweighs any potential future benefits associated with such legislation. While the Company has concluded that a full valuation allowance is required under ASC 740 based on the weight of objectively verifiable negative evidence, this conclusion is driven by the accounting frameworks emphasis on recent cumulative losses and does not reflect managements expectations regarding the Companys future operating performance or long-term prospects. Management believes that the actions taken to improve operational efficiency, combined with strong customer demand, backlog visibility, and strategic growth initiatives, position the Company for improved profitability in future periods. Accordingly, the valuation allowance reflects the timing and evidentiary requirements of ASC 740 rather than any deterioration in the underlying fundamentals of the business. Accordingly, management has determined that it is more-likely-than-not that the Company will not realize its deferred tax assets. As a result, a full valuation allowance has been recorded against the net deferred tax asset as of the reporting date. This conclusion reflects managements best estimate based on all available evidence and is based upon the requirements of ASC 740. The analysis and resulting valuation allowance are intended to support audit review under PCAOB standards related to accounting estimates, including the evaluation of significant judgments and the weighting of evidence. **Note 10 Leases** During 2024, the Company entered into lease agreements for equipment utilized in its manufacturing facility. The Company has determined that the lease agreements are finance leases. There is a $1 buyout option at the end of the lease term which makes it reasonably certain that the Company will exercise this option and purchase the machinery and the details of the purchase option are in line with the criteria of a finance lease. The ROU asset is grouped with property and equipment. The asset is amortized on a straight-line basis over the life of the underlying asset rather than the lease term due to the purchase options in the lease. The amortization expense is grouped with the depreciation expense of the Companys other property and equipment. The initial recognition of the finance lease liability was recorded based on the present value of future payments. The interest expense is calculated using the incremental borrowing rate of the Company, and is grouped in the interest expense line on the statement of operations. The components of operating and finance lease costs are as follows for the years ended December 31: Schedule of Operating Lease and Finance Lease Costs | | | 2025 | | | 2024 | | | | Operating lease cost | | $ | - | | | $ | - | | | | Finance Lease Cost: | | | | | | | | | | | Amortization of assets | | | 328,627 | | | | 126,343 | | | | Interest on liabilities | | | 156,320 | | | | 66,454 | | | | | | | | | | | | | | | Total lease cost | | $ | 484,947 | | | $ | 192,797 | | | There were no variable payments or material short-term rentals for the years ended December 31, 2025 and 2024. Supplemental cash flow information related to leases are as follows for the years ended December 31: Schedule of Cash Flow Information Related To Leases | | | 2025 | | | 2024 | | | | Cash paid for amounts included in measurement of lease obligations: | | | | | | | | | | | Operating cash flows from operating leases | | $ | - | | | $ | - | | | | Operating cash flows from finance leases | | | 156,320 | | | | 66,454 | | | | Financing cash flows from finance leases | | | 297,900 | | | | 95,080 | | | | F-19 | | **SYNTEC OPTICS HOLDINGS, INC.** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** **Note 10 Leases Continued** The following table summarizes weighted average remaining lease term and discount rates as of December 31, 2025 and 2024: Schedule of Weighted Average Remaining Lease Term | | | 2025 | | | 2024 | | | | Weighted average remaining lease term (years) | | | | | | | | | | | Operating leases | | | n/a | | | | n/a | | | | Finance leases | | | 4.00 | | | | 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 December 31: Schedule of Future Maturities of Lease Liabilities | | | | | | | | 2026 | | $ | 513,525 | | | | 2027 | | | 513,525 | | | | 2028 | | | 513,525 | | | | 2029 | | | 513,524 | | | | Thereafter | | | - | | | | Total Undiscounted Lease Obligations | | | 2,054,099 | | | | Less: Imputed Interests | | | (284,989 | ) | | | | | | | | | | Present Value of Lease Obligations | | $ | 1,769,110 | | | **Note 11 Related Party Transactions** SWI DISC, Inc. (the DISC) is owned by the majority stockholder of the Company. During 2014, the Company entered into a commission agreement with the DISC related to the Companys foreign sales. Total commissions under the terms of this agreement amounted to $-0- for the years ended December 31, 2025 and 2024. On November 12, 2025, in connection with the repayment of term and equipment debt, the Company entered into a subordinated term note (the Shareholder Note) with its majority stockholder in the principal amount of $1,268,732. See Note 7 above for details of the Shareholder Note. **Note 12 Warrants** In connection with the merger discussed in Note 3, the Company assumed the outstanding public warrants of OLIT. Each warrant entitles the holder to the right to purchase one share of common stock at an exercise price of $11.50 per share. No fractional shares will be issued upon exercise of the warrants. The Company may elect to redeem the warrants subject to certain conditions, in whole and not in part, at a price of $0.01 per warrant if (i) 30 days prior written notice of redemption is provided to the holders, and (ii) the last reported sale price of the Companys common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third business day prior to the date on which the Company sends the notice of redemption to the warrant holders. Upon issuance of a redemption notice by the Company, the warrant holders have a period of 30 days to exercise for cash, or on a cashless basis. On the Closing Date, there were 14,107,989 warrants issued and outstanding. The warrants are not precluded from equity classification and are accounted for as such on the date of issuance, and each balance sheet date thereafter. There was no activity of public warrants from the closing date through December 31, 2025. The measurements of the warrants after the detachment of the warrants from the Units are classified as Level 1 due to the use of an observable market quote in an active market under the ticker OPTXW. For periods subsequent to the detachment of the warrants from the Units, the close price of the warrant price was used as the fair value of the warrants as of each relevant date. The following tables presents a roll-forward of the Companys warrants from December 31, 2024 to December 31, 2025: Schedule of Warrants | | | Common Stock Warrants | | | | | | | | | | Warrants outstanding, December 31, 2024 | | | 14,107,989 | | | | Warrants exercised | | | - | | | | Assumed in merger | | | 14,107,989 | | | | Warrants outstanding, December 31, 2025 | | | 14,107,989 | | | The following tables presents a roll-forward of the Companys warrants from December 31, 2023 to December 31, 2024: | | | Common Stock Warrants | | | | | | | | | | Warrants outstanding, December 31, 2023 | | | - | | | | Assumed in merger | | | 14,107,989 | | | | Exercised subsequent to merger | | | - | | | | Warrants outstanding, December 31, 2024 | | | 14,107,989 | | | | F-20 | | **SYNTEC OPTICS HOLDINGS, INC.** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** **Note 13 Common Stock** The Company is authorized to issue up to 121,000,000 shares of common stock with $0.0001 par value. Common stockholders are entitled to dividends if and when declared by the Board of Directors. As of December 31, 2025 and 2024, there were 36,920,226 and 36,688,266 shares issued and outstanding. No dividends on common stock had been declared by the Company. As of December 31, 2025 and 2024, the Company had reserved shares of common stock for issuance as follows: Schedule of Reserved Shares of Common Stock | | | 2025 | | | 2024 | | | | | | | | | | | | | Common Stock Outstanding | | | 36,920,226 | | | | 36,688,266 | | | | Warrants Outstanding | | | 14,107,989 | | | | 14,107,989 | | | | Contingent Earnout Shares | | | 26,000,000 | | | | 26,000,000 | | | | Performance Based Management Earnout | | | - | | | | 2,000,000 | | | | 2023 Equity Incentive Plan Available for Future Issuance | | | 2,542,011 | | | | 2,773,971 | | | | Employee Stock Purchase Plan Available for Future Issuance | | | 1,000,000 | | | | 1,000,000 | | | | Total | | | 80,570,226 | | | | 82,570,226 | | | **Note 14 Stock-based Compensation** In connection with the merger, shareholders and board members approved the 2023 Equity Incentive Plan (the 2023 Incentive Plan). Up to 2,773,971 shares of the Syntec Optics common stock (Common Stock) will initially be reserved for issuance under the 2023 Incentive Plan, and additional shares could become available for issuance under the 2023 Incentive Plan. The Company was obligated to issue up to 2,000,000 shares of common stock (the Performance-based-Earnout) to members of the management team of the Company from time to time, to the extent determined by the Board of Directors in its sole discretion, to be issued as restricted stock units or incentive equity grants pursuant to the Incentive Plan. The Performance-based Earnout shares shall be awarded by the Board of Directors based on achieving the following performance thresholds following the Closing: one-half (1/2) at achieving revenue of $75 million and adjusted EBITDA of $22.6 million based on 2024 financial audited statements, and one-half (1/2) at achieving revenue of $196 million and adjusted EBITDA of $50.6 million based on the 2025 financial audit statements. No such awards have been made as of December 31, 2025. As of December 31, 2025, there were 2,468,073 shares of unissued authorized and available for future awards under the plans. As of December 31, 2024, there were 4,542,011 shares of unissued authorized and available for future awards under the plans. On January 20, 2026, at the Companys annual stockholders meeting, the stockholders approved authorizing the grant of restricted stock units (RSUs) to the Companys non-employee directors. As a result, the three non-employee directors were granted a total of $300,000 in RSUs. These RSUs were fully vested upon grant and amounted to a total of 73,938 shares based on a grant date fair value of $4.0575 per share, calculated using the closing price of the preceding four trading days. In accordance with ASC 718, CompensationStock Compensation, the Company determined that the grant date for these awards was January 20, 2026, the date of stockholder approval. The total stock-based compensation expense of $300,000 was recognized in selling, general, and administrative expenses in the Companys consolidated statement of operations for the year ended December 31, 2025, with a corresponding credit to additional paid-in capital stock compensation. The impact on cash flows is reflected in the operating section of our cash flow statement. For 2024, the stock-based compensation expense was $450,000, and was recognized in selling, general, and administrative expenses. | F-21 | | **SYNTEC OPTICS HOLDINGS, INC.** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** **Note 15 Loss Per Common Share** The following table sets forth the information needed to compute basic and diluted loss per common share for the years ended December 31, 2025 and 2024: Schedule of Basic And Diluted (Loss) Earnings Per Share | | | 2025 | | | 2024 | | | | Basic and diluted net loss per share: | | | | | | | | | | | Numerator: | | | | | | | | | | | Net loss | | $ | (1,793,227 | ) | | $ | (2,479,661 | ) | | | Basic and diluted net loss per share | | $ | (0.05 | ) | | $ | (0.07 | ) | | | | | | | | | | | | | Denominator | | | | | | | | | | | Weighted-average shares outstanding | | | 36,920,226 | | | | 36,688,266 | | | | Diluted Shares | | | 36,920,226 | | | | 36,688,266 | | | For the years ended December 31, 2025 and 2024, the following warrants, contingent earnout shares, performance based management earnout shares, were excluded from the computation of diluted net loss per common share, as the inclusion would have been anti-dilutive. Schedule of Anti-dilutive Shares | | | 2025 | | | 2024 | | | | Anti-dilutive shares excluded from net loss per share | | | | | | | | | | | Warrants Outstanding | | | 14,107,989 | | | | 14,107,989 | | | | Contingent Earnout Shares | | | 26,000,000 | | | | 26,000,000 | | | | Performance Based Management Earnout | | | - | | | | 2,000,000 | | | | Total Anti-dilutive shares excluded from net loss per share | | | 40,107,989 | | | | 42,107,989 | | | **Note 16 Commitments and Contingencies** The Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Companys financial position or results of operations. **Note 17 Significant Customers** For the years ended December 31, 2025 and 2024, the Company generated 42% and 48%, respectively, of revenues from the same three customers in each year. 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 $3,723,079 and $3,188,832, for December 31, 2025 and 2024, respectively. **Note 18 Segment reporting** The Company operates as one operating segment. The Companys chief operating decision maker (CODM) is its Chief Executive Officer, who reviews the financial statements on a consolidated basis. The CODM uses the Companys 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 Companys Consolidated Statements of Operations and Comprehensive Loss. **Note 19 Director Departure and Related Compensation Arrangement** On March 21, 2025, a member of the Board of Directors of Syntec Optics Holdings, Inc. (the Company) submitted his resignation from the Board. The Board accepted the resignation on March 25, 2025. In connection with the resignation, the Company entered into a mutual release agreement with the former director. The cost associated with this agreement was accrued in the Companys financial statements for the year ended December 31, 2024 in the amount of approximately $0.2 million. | F-22 | |