Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

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

Cautionary Note Regarding Forward-Looking Statements

This report includes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Private Securities Litigation Reform Act of 1995. The words "believe," "may," "estimate," "continue," "anticipate," "intend," "should," "plan," "could," "target," "potential," "is likely," "will," "expect" and similar expressions are intended to identify forward-looking statements. All statements other than statements of historical facts contained in this report, including, among others, our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth, are forward-looking statements. Our actual results and financial condition may differ materially from those 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 "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections in this report, our Annual Report on Form 10-K and 10-K/A for the fiscal year ended December 31, 2025 and our other filings with the Securities and Exchange Commission (the "SEC"). All forward-looking statements in this report are made only as of the date hereof or as indicated and represent our views as of the date of this report. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise, except as required by law.

Overview

Syntec Optics is vertically integrated from design and component manufacturing for lens system assembly to imaging module integration for system solutions. Making our own tools, molding, and nanomachining allows close interaction and recut ability, enabling special techniques to hold tolerances up to the sub-micron level. Syntec Optics 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 a 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 Optics 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 Optics 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 provides us with 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 the end markets of Space Tech, Defense Tech, Life Sciences, AI Data Center / Power, and others including Scientific Instruments. 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 Tech end market. More recently, in the same market, we have entered the AI-driven military augmented reality (AR) wearables field, enhancing situational awareness for warfighters.

Syntec Optics also announced biomedical mirrors for sensing in the Life Sciences end market. Rounding out new product launches, in the Space Tech end market, Syntec Optics launched microlens arrays and low earth satellite optics. This includes incorporating its high-precision photonics into critical orbital safety components, enhancing collision avoidance in space, a growing concern as space traffic continues to increase.

Key Factors Affecting Our Operating Results

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

End Market Consumers

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

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

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

Syntec Optics plans to further 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. Syntec Optics entered the Space Tech end market in 2023. Syntec Optics is currently engaged as a supplier for a U.S. Department of Commerce's National Institute of Standards and Technology ("NIST") funded research and development project for the sensing end market. The Space Tech 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 Life Sciences end-market includes the use of optics and photonics to detect scattered light or light with an altered refractive index due to the presence of a medium within a wide range of potential applications, including, for example, disease detection and other associated applications.

Supply

We currently rely on strategically selected electronics, highly engineered polymers and aluminum manufacturers located in the United States to manufacture our highly specialized optic and photonics enabled components and sub-components, and we intend to continue to rely on these suppliers going forward. Our close working relationships with our Unites States-based suppliers, reflected in our ability to (x) increase our purchase order volumes (qualifying us for related volume-based discounts) and (y) order and receive delivery of raw materials in anticipation of required demand, have helped us moderate increased supply-related costs associated with inflation and to avoid potential shipment delays. To mitigate against potential adverse production events, we opted to build our inventory of key raw materials.

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

Product and Customer Mix

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

Production Capacity

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

Competition

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

Research and Development

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

Components of Results of Operations

Net Sales

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

Cost of Goods Sold

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

Gross Profit

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

Operating Expenses

General and Administrative

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

Total Other Income (Expense)

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

Results of Operations

Comparisons for the Three and Nine Months Ended September 30, 2026 and 2025

The following tables set forth our results of operations for the three and nine months ended September 30, 2026 and 2025, respectively. This data should be read together with our financial statements and related notes included elsewhere in this Quarterly Report and is qualified in its entirety by reference to such financial statements and related notes.

		Three Months Ended
		September 30, 2026				% of Net Sales				September 30, 2025				% of Net Sales
Net Sales		$	8,542,554				100	%		$	6,950,220				100	%
Cost of Goods Sold			6,599,592				77	%			6,095,861				88	%
Gross Profit			1,942,962				23	%			854,359				12	%
General and Administrative Expenses			1,730,807				20	%			2,072,962				30	%
(Loss) Income from Operations			212,155				2	%			(1,218,603	)			-18	%
Other (Expense) Income
Other Income (Expense)			(18,500	)			0	%			1,162				0	%
Interest Income			124,008				1	%			2,733				0	%
Interest Expense, Including Amortization of Debt Issuance Costs			(71,089	)			-1	%			(214,425	)			-3	%
Total Other Expense			34,419				0	%			(210,530	)			-3	%
(Loss) Income Before Provision for (Benefit From) Income Taxes			246,574				3	%			(1,429,133	)			-21	%
Provision for (Benefit From) Income Taxes			-				0	%			-				0	%
Net (Loss) Income		$	246,574				3	%		$	(1,429,133	)			-21	%

		Nine Months Ended
		September 30, 2026				% of Net Sales				September 30, 2025				% of Net Sales
Net Sales		$	23,329,778				100	%		$	20,578,717				100	%
Cost of Goods Sold			18,282,960				78	%			15,817,774				77	%
Gross Profit			5,046,818				22	%			4,760,943				23	%
General and Administrative Expenses			5,289,322				23	%			5,597,344				27	%
(Loss) Income from Operations			(242,504	)			-1	%			(836,401	)			-4	%
Other (Expense) Income
Other Income (Expense)			49,248				0	%			9,124				0	%
Interest Income			203,742				1	%			11,766				0	%
Interest Expense, Including Amortization of Debt Issuance Costs			(405,532	)			-2	%			(624,290	)			-3	%
Total Other Expense			(152,542	)			-1	%			(603,400	)			-3	%
(Loss) Income Before Provision for (Benefit From) Income Taxes			(395,046	)			-2	%			(1,439,801	)			-7	%
Provision for (Benefit From) Income Taxes			-				0	%			9,588				0	%
Net (Loss) Income		$	(395,046	)			-2	%		$	(1,449,389	)			-7	%

Net Sales

Net sales increased by $1.6 million, or 23%, to $8.5 million for the three months ended September 30, 2026, as compared to $6.9 million for the three months ended September 30, 2025. This increase was primarily due to increases in the areas of Defense Tech and Space Tech, as detailed in Note 3 to the financial statements. This included approximately $1.0M of tooling revenue for Defense Tech as we have made significant progress towards commercialization of several new product arrays. For the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, sales increased from $20.6 million in 2025 to $23.3 million in 2026. Sales increased significantly in the same two areas of Defense Tech and Space Tech, while down somewhat in the areas of AI Data Center and Life Sciences. This decrease in Life Sciences was due to a shipping hold to one particular customer in the first quarter, as described in our first quarter 10-Q. Shipments to that customer were back to normal in the second quarter. Sales into AI/Data Center were down as shown in Note 3 as a result of product line transition timing with our major customer's business line. This area is expected to rebound with new product launches in early 2027. Sales in the others including Scientific Instruments category dropped slightly over the comparison periods, but did not have a significant impact.

Cost of Goods Sold

Cost of goods sold increased by $0.5 million, to $6.6 million for the three months ended September 30, 2026, as compared to $6.1 million, for the three months ended September 30, 2025. This increase was lower than the increase in sales, due to the revenue mix for the third quarter containing a high percentage of highly profitable Tooling revenue. Cost of goods sold increased by $2.5 million, to $18.3 million for the nine months ended September 30, 2026, as compared to $15.8 million for the nine months ended September 30, 2025. This increase was primarily due to an increase in material costs, particularly for aluminum.

Gross Profit

Gross profit increased by 127%, to $1.9 million for the three months ended September 30, 2026, as compared to $0.9 million, for the three months ended September 30, 2025. This increase was directly related to the significant increase in revenue combined with a minimal increase in cost of goods sold for the comparison periods. For the nine months ended September 30, 2026 compared to the same nine-month period in 2025, gross profits increased $0.2 million from $4.8 million in 2025 to $5.0 million in 2026. The increase was helped by the highly profitable tooling revenue in the third quarter of 2026, but somewhat offset by the increasing material cost for aluminum.

General and Administrative Expenses

General and administrative expenses decreased $0.3 million for the quarter ended September 30, 2026, as compared to the same period for 2025. For the nine months ended September 30, 2026 as compared to the same nine month period in 2025, the same decrease of $0.3 million was experienced, indicating most of the year to date reduction occurred in the third quarter. This was primarily due to reduced accounting fees, as well as timing of the recognition of certain expenses.

Total Other Income (Expense)

This category improved by $0.2 million for the three months ended September 30, from an expense of $0.2 million for the three months ended September 30, 2025, to a nominal amount of income just over zero for the three months ended September 30, 2026. For the nine months ended September 30, expenses decreased from $0.6 million in 2025 to $0.2 million in 2026. In both comparison periods, the improvement was primarily due to the debt reductions and the increase in interest earned on our larger cash balance.

Income Tax Expense (Benefit)

Income tax expense (benefit) remained flat, with no material change when comparing the three and nine months ended September 30, 2026 and 2025.

Net Income (Loss)

We experienced income of $0.2 million for the three months ended September 30, 2026, as compared to a loss of $1.4 million for the same three-month period ended in 2025. This turnaround from a loss to positive income was primarily due to the improvement in gross profit as detailed above, and in particular improved revenue. For the nine-month period ended September 30, 2026, we experienced a loss of $0.4 million, as compared to a loss of $1.4 million for the same period in 2025. This improvement in year-to-date earnings in 2026 was attributable to the items mentioned above, in particular improved revenue coupled with a reduction in General and Administrative expenses.

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 unaudited condensed consolidated financial statements.

Revenue Recognition

The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers. Substantially all of the Company's revenue is generated from the manufacture and sale of precision optics and photonics products and is recognized at a point in time when control of the product transfers to the customer, which is generally upon shipment based on the applicable contractual terms.

Management is required to exercise judgment in evaluating customer contracts to determine the appropriate timing of revenue recognition, including the identification of performance obligations, assessment of transfer of control, and evaluation of contract modifications or other customer-specific arrangements. While most product sales involve a single performance obligation satisfied upon shipment, certain non-recurring engineering ("NRE"), tooling, and development arrangements may require additional analysis under ASC 606 to determine the appropriate performance obligations and timing of revenue recognition.

For certain NRE arrangements, management must determine whether revenue should be recognized at a point in time or over time. When the applicable criteria under ASC 606 are met, including situations where the Company's performance does not create an asset with an alternative use and the Company has an enforceable right to payment for performance completed to date, revenue is recognized over time using a cost-to-cost input method based on costs incurred relative to total estimated project costs. This methodology requires significant judgment regarding estimated costs to complete, and changes in such estimates may result in cumulative catch-up adjustments to revenue.

These judgments and estimates are based on contract terms, historical experience, and other factors that management believes are reasonable under the circumstances. Changes in facts, circumstances, or assumptions could affect the amount and timing of revenue recognized and may have a material impact on the Company's results of operations and financial condition.

Inventory Valuation

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

Income Taxes

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

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

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

Non-GAAP Financial Measures

This Quarterly Report includes a non-GAAP financial measure that we use to supplement our results presented in accordance with accounting principles generally accepted in the United States ("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 income (loss) before interest income, interest expense, net of income tax expense, depreciation and amortization, and stock-based compensation expense 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 allows a more relevant comparison of our results of operations to other companies in our industry and is in accordance with the Non-GAAP Financial Measures Compliance & Disclosure Interpretations (Reference Question 102.03).

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

The table below presents our adjusted EBITDA, reconciled to net income for the three and nine months ended September 30, 2026 and 2025.

NON-GAAP RECONCILIATION OF EBITDA

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2026 AND 2025

		Three Months Ended								Nine Months Ended
		September 30, 2026				September 30, 2025				September 30, 2026				September 30, 2025
Net Income (Loss)		$	246,574			$	(1,429,133	)		$	(395,046	)		$	(1,449,389	)
Stock-Based Compensation Expense BOD (1)			75,000				225,000				225,000				225,000
Depreciation			548,191				646,508				1,620,355				2,033,935
Amortization of Debt Issuance Costs			-				2,416				12,416				7,250
Interest Income			(124,008	)			(2,733	)			(203,742	)			(11,766	)
Interest Expense			71,089				212,009				393,116				617,040
Taxes			-				-				-				9,588
Non-Recurring Items							-								-
Executive Transition (2)			-				329,972				-				579,161
One-time Contract exit costs			-				-				-				21,063
Non-recurring property damage			-				-				23,211				21,261
Incremental auditor transition costs			35,400				-				35,400				-
Adjusted EBITDA		$	852,246			$	(15,961	)		$	1,710,710			$	2,053,143

In the quarters ended September 30, 2026 and 2025:

(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.

Liquidity and Capital Resources

Overview

The Company continues to generate positive cash flows from operations.

During the second quarter of 2026, the Company generated approximately $21 million in net proceeds from a public stock offering. The Company used a portion of the proceeds generated, approximately $7 million, to repay some of its indebtedness. The Company has approximately $14 million of cash as of September 30, 2026.

The ongoing positive generation of cash from operations, combined with the invested funds, is expected to support ongoing operations, growth initiatives, and strategic investments.

Capital Requirements

The Company expects that cash generated from operations, together with the proceeds received from the public stock offering in the second quarter, will be sufficient to fund operations, working capital needs, and contractual obligations for at least the next twelve months.

Cash Flow - Nine Months Ended September 30, 2026 and 2025

SYNTEC OPTICS HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2026 AND 2025

		2026				2025
Net Cash Provided By Operating Activities		$	1,290,712			$	676,529
Net Cash Used in Investing Activities			(1,643,914	)			(643,808	)
Net Cash Provided (Used) By Financing Activities			14,352,204				(53,584	)
Net Increase (Decrease) in Cash			13,999,002				(20,863	)
Cash - Beginning			358,867				598,787
Cash - Ending		$	14,357,869			$	577,924
Supplemental Cash Flow Disclosures:
Cash Paid for Interest		$	370,586			$	622,197
Cash Paid for Taxes		$	-			$	-
Supplemental Disclosures of Non-Cash Investing Activities:
Assets Acquired and Included in Accounts Payable and Accrued Expenses		$	233,062			$	2,050
Issuance of finance lease for acquisition of equipment		$	7			$	23

Operating Activities

Net cash provided by operating activities was $1.3 million for the nine months ended September 30, 2026, as compared to net cash provided by operating activities of $0.7 million for the nine months ended September 30, 2025. The primary drivers of operating cash flows for the nine months ended September 30, 2026 included depreciation of $1.6 million, partially offset by a decrease in accounts payable of $0.9 million, a decrease in inventory of $0.5 million, and a decrease in prepaids balance of $0.3 million.

Investing Activities

Net cash used in investing activities was $1.6 million for the nine months ended September 30, 2026, as compared to net cash used in investing activities of $0.6 million for the nine months ended September 30, 2025. The net cash used in investing activities increased primarily due to the purchase or downpayments on several large machines; one for approximately $0.7 million, two for approximately $0.3 million each, and several smaller but significant purchases.

Financing Activities

Net cash provided by financing activities was $14.3 million for the nine months ended September 30, 2026, as compared to net cash used by financing activities of $0.1 million for the nine months ended September 30, 2025. The primary driver of this change was the aforementioned public stock offering, generating $21.4 million net, partially offset by the line of credit paydown of $6.8 million, and other debt related activity totaling $0.3 million.