ORLANDO,
Fla., Dec. 17, 2024 /PRNewswire/
-- LightPath Technologies, Inc. (NASDAQ: LPTH) ("LightPath,"
the "Company," or "we"), a leading provider of next-generation
optics and imaging systems for both defense and commercial
applications, today issued a letter to shareholders from its
President and Chief Executive Officer, Sam
Rubin.
Dear Shareholders,
2024 was a transformational year for LightPath, evolving from a
pure component supplier to a leading provider of high-value,
next-generation optics and imaging systems. We began this journey
just over three years ago, and as we move into 2025, we are now
positioned for growth with an accelerating pipeline of customers
across three pillars of growth - proprietary cameras and optics,
solutions for government and defense, and new commercial
applications.
The calendar year was highlighted by momentum across these three
pillars, with a focus on defense driving both near-term orders as
well as development contracts for more lucrative opportunities in
the medium-term. In addition, the launch of several commercial
application-specific variations of our thermal imaging cameras to
drive near-term revenue with healthy margins.
Our Market Opportunity: Meeting Tomorrow's Needs,
Today
As a reminder, our cameras and optics can be leveraged in many
different applications allowing LightPath to deliver solutions to a
diverse market set, including a growing defense and government
segment. Our imaging solutions are able to outperform legacy
solutions in applications including government and defense
applications, automotive lidar, commercial gas monitoring, and
sporting optics. Our first-of-kind uncooled Mantis Camera is the
only solution of its kind that combines the functionality of a Mid
Wavelength Infrared (MWIR) and Long Wavelength Infrared (LWIR)
camera in a single housing.
Our key proprietary technology and product – Black
Diamond™ chalcogenide glass – is the only glass
that enables true multi-spectral imaging, while also reducing the
size, weight and cost of infrared systems and as importantly,
replacing Germanium. This technology is exclusive to LightPath,
sold under exclusive license from the U.S. Naval Research
Laboratory. All our BlackDiamond materials are made in the
USA, in our Orlando facility.
Over the last few years we have invested heavily in the
technology and manufacturing of our BlackDiamond™ glass,
as an alternative to Germanium. Starting from our classic BD6
glass, and through the compositions we have the exclusive license
from NRL for, we have, and continue to, develop a portfolio of
materials that not only provide an alternative to Germanium, but
actually outperform Germanium in some of the most critical aspects
such as (lack of) temperature sensitivity and ease of use in
manufacturing. This decision has proved to be extremely prescient,
as just recently China extended
its previously announced export limitations, and banned germanium
exports to the United States,
creating a critical supply chain issue for the U.S. defense market
that we are uniquely capable of solving.
The U.S. Department of Defense ("DoD") has recognized the clear
strategic need for non-Germanium based imaging solutions, and has
been working with us to accelerate the qualification and adoption
of our new, exclusive materials. As part of those efforts, the DoD,
via the Defense Logistics Agency announced in October expanded
funding to support the qualification of our Black Diamond™ glasses
as a substitute to Germanium for defense applications.
While China announced the first
set of export restriction on Germanium and Gallium in July 2023, it is only now, with the specific
restrictions on sales to the U.S. and to dual-use applications,
that the restrictions will begin to significantly impact our
industry. We have seen an increase in activity shortly after the
December 3rd announcement,
and expect to see much more of this as the true impact to supply
chains settles in. LightPath stands ready to provide our industry
with our alternatives to Germanium for use in Infrared imaging.
Defense Applications: Strengthening Global Security through
Innovation
Emerging Threat Vectors Necessitate Wider Deployment of
Advanced Imaging Systems
As global defense dynamics continue to evolve, governments are
investing in equipping and modernizing their militaries with
advanced weapons systems and their associated missiles that require
thermal or IR imaging across all vehicles (land, sea, air and
space), dramatically increasing demand for infrared systems and
innovations in these technologies. Recent events have exposed how
rapidly smart munitions are depleted in a major conflict, as well
as the supply chain risks of relying on foreign suppliers, driving
significant interest from U.S. and European defense contractors in
our high-performance, thermal and infrared imaging solutions.
To address this opportunity domestically, we invested in growing
capacity and in-house capabilities at our Orlando, Florida facility, which we feel can
comfortably handle any near-term orders that may come our way. In
addition, to better serve the European market, we invested in
vertical integration in our Riga
facility, enabling us to apply for and receive our European Defense
Manufacturing License, qualifying us to produce for European
defense applications from our facility in Riga, Latvia.
While there is an inherent delay between a customer knocking on
our door and our products being used in the field – in the defense
world it could take anywhere from six months for very fast
programs, to 24 months for complex, typically airborne systems from
design-in to initial production. A pipeline of significant
opportunities at different stages all but guarantees continued
significant growth for us in this area.
As a result of our focus on infrared imaging, investment in
technologies and growth of capabilities both organically and
through the acquisition of Visimid over a year ago, we now have a
robust pipeline of opportunities that each alone has the potential
to be transformative to us in terms of magnitude and size. Chief
among them is our missile program with Lockheed Martin, which I'll
discuss in more detail below . Such programs are in stages ranging
from prototypes to design-in, to low rate initial production (LRIP)
to field deployment.
This highly diversified set of opportunities and actual programs
of record includes programs ranging from missile, to airborne, to
mounted and dismounted soldiers, to FPV drones, to naval platforms
and more. If you don't yet, I would encourage to listen in to our
quarterly calls, where I typically provide updates on major
programs and developments.
U.S. Army Missile Program Collaboration with Lockheed
Martin
Our most significant opportunity to date lies in our ongoing
collaboration with Lockheed Martin as part of the U.S. Army missile
program. Among two competing solutions currently under development
and that would be evaluated by the Army, Lockheed Martin's proposed
system integrates LightPath's advanced thermal imaging technology.
If selected, we anticipate an initial order of approximately 10,000
systems, potentially generating between $5,000 and $10,000
of revenue per system. This would represent $50 to $100 million
in initial revenue, a substantial step-change in scale and a major
validation of our strategic focus on higher-value integrated
solutions.
Looking beyond the initial phase, the longer-term potential is
even more transformative. Based on the production volumes of legacy
predecessor programs, we estimate that the total addressable
revenue opportunity could be in the range of $500 million to $1
billion over the life of the program. This would
meaningfully elevate our revenue profile, operational cadence, and
overall market presence as a brand. In the weeks ahead, we will
deliver flight-ready systems for live testing to Lockheed Martin, a
critical milestone that moves us closer to monetizing this
high-value opportunity. In short, this collaboration embodies our
vision of becoming a premier solutions provider in critical
applications and we look fowrard to future announcements on this
front. And while this program is a competitive program in which
both Lockheed and Raytheon are developing their solutions
independently, Lockheed Martin is also integrating our camera
solutions into at least two additional programs of record, which
they have been awarded.
Cameras & Commercial Applications: Driving Innovation in
Legacy Markets
While we see plenty of opportunity in defense applications, our
imaging solutions extend far beyond that sector, delivering value
to an array of commercial markets. From high-temperature furnace
monitoring in heavy industry to the detection of fugitive emissions
in energy and chemical processing, our camera solutions offer an
important tool for process optimization and meet stringent
environmental and regulatory demands. This same approach holds
promising potential for the automotive industry, where advanced
imaging could enhance safety, support driver-assistance systems,
and bolster the transition toward autonomous vehicles.
In September, we continued our transformation into a product
solutions company with the launch of our next-generation
Mantis™ camera, targeting the $500 million global furnace monitoring market.
Moving beyond component-level offerings, this new high-value
solution, priced at $30,000 per unit,
exemplifies the pivot to LightPath 3.0 products. By enabling
precise, real-time monitoring of high-temperature processes in
power plants and other large-scale industrial facilities, the
Mantis camera supports more effective environmental compliance,
helping minimize greenhouse gas emissions and enhance operational
efficiency. As initial orders confirm market traction, this new
product line establishes a strong foundation for near-term revenue
growth.
At the CH4 Connections Conference, LightPath introduced its new
Optical Gas Imaging (OGI) camera platform, an advanced tool
designed to detect and visualize fugitive emissions like methane in
industrial environments. Leveraging a non-germanium lens, this
innovation offers a cost-effective and highly sensitive solution to
meet growing regulatory demands in industries such as oil and gas,
chemical manufacturing, and power generation. With stricter EPA,
EU, and state-level standards driving adoption, our OGI camera
addresses critical gaps in existing technologies by offering an
accessible, long-term monitoring tool that does not rely on
proprietary software. This positions LightPath to capitalize on the
expanding gas sensor market, which totaled $2.5 billion in 2023, with significant upside
expected as global regulations tighten.
Building on the momentum of our methane-focused OGI camera, we
recently introduced a new variant designed to detect ammonia and
sulfur hexafluoride (SF6) emissions in industrial and manufacturing
settings. Utilizing our proprietary non-germanium BlackDiamond™
lens, this latest innovation not only enhances cost-effectiveness
and sensitivity but also insulates customers from supply chain
disruptions caused by geopolitical challenges, such as China's recent ban on germanium exports to the
U.S. The camera addresses critical needs in industries reliant on
SF6, the most potent greenhouse gas, and ammonia, both of which are
subject to stringent federal and state regulations. By expanding
our portfolio of emission detection solutions, we further
strengthen our competitive positioning in the segment while
offering our customers reliable and future-proof technologies.
Building the Leadership Team to Empower Growth
As we continue to evolve into a true solutions provider and
strengthen our position in emerging markets, we are also building a
leadership team and Board that reflects our growth plans. We were
pleased to welcome Dr. Kim Crider,
the former Chief Technology and Innovation Officer for the U.S.
Space Force, to our Board of Directors. Her experience in guiding
national-level technology and innovation initiatives will greatly
inform our strategic direction. Additionally, the appointment of
industry veteran Jason Messerschmidt
as Vice President of Sales brings invaluable sales expertise,
directly supporting our sales team through over a decade spent at
Teledyne FLIR, while the addition of Steven
Garcia as Orlando General Manager reinforces our operational
capabilities, ensuring that our principal production facility in
Florida remains responsive,
efficient, and poised for scale.
These strategic additions not only enhance our capacity to
navigate rapidly evolving market landscapes but also strengthen our
ability to deliver high-value solutions to our customers worldwide.
Collectively, these hires complement our ongoing expansion,
fostering an organizational culture that leverages deep technical
insights, operational excellence, and customer-centric
strategies.
2025 Goals & Final Thoughts
As we look ahead, our priorities center on accelerating momentum
across our three strategic pillars – proprietary camera solutions,
government and defense, and a diverse range of commercial
applications – all leveraging the unique advantages of our Black
Diamond™ technology. In 2025, we plan to deepen our market
presence, deliver on the significant defense opportunities in
progress, and scale our commercial platforms including the Mantis
and OGI cameras.
I firmly believe we have the people, processes, and production
capabilities needed to meet the evolving needs of our customers and
ultimately drive long-term value creation for my fellow
shareholders in the years to come.
Sincerely,
Sam Rubin
President and Chief Executive Officer
LightPath Technologies
About LightPath Technologies
LightPath Technologies, Inc. (NASDAQ: LPTH) is a leading
provider of next-generation optics and imaging systems for both
defense and commercial applications. As a vertically integrated
solutions provider with in-house engineering design support,
LightPath's family of custom solutions range from proprietary
BlackDiamond™ chalcogenide-based glass materials – sold
under exclusive license from the U.S. Naval Research Laboratory –
to complete infrared optical systems and thermal imaging
assemblies. The Company's primary manufacturing footprint is
located in Orlando, Florida with
additional facilities in Texas,
Latvia and China . To learn more, please visit
www.lightpath.com.
Forward-Looking Statements
This press release includes statements that constitute
forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements may be identified by the use of words
such as "forecast," "guidance," "plan," "estimate," "will,"
"would," "project," "maintain," "intend," "expect," "anticipate,"
"prospect," "strategy," "future," "likely," "may," "should,"
"believe," "continue," "opportunity," "potential," and other
similar expressions that predict or indicate future events or
trends or that are not statements of historical matters. These
forward-looking statements are based on information available at
the time the statements are made and/or management's good faith
belief as of that time with respect to future events and are
subject to risks and uncertainties that could cause actual results
to differ materially from those expressed in or suggested by the
forward-looking statements. Factors that could cause or contribute
to such differences include, but are not limited to, the impact of
varying demand for the Company products; the ability of the Company
to obtain needed raw materials and components from its suppliers;
actions governments, businesses, and individuals take in response
to the pandemic, including restrictions on onsite commercial
interactions; general economic uncertainty in key global markets
and a worsening of global economic conditions or low levels of
economic growth; geopolitical tensions, the Russian-Ukraine
conflict, and the Hamas/ Israel
war; the effects of steps that the Company could take to reduce
operating costs; the inability of the Company to sustain profitable
sales growth, convert inventory to cash, or reduce its costs to
maintain competitive prices for its products; circumstances or
developments that may make the Company unable to implement or
realize the anticipated benefits, or that may increase the costs,
of its current and planned business initiatives; and those factors
detailed by LightPath Technologies, Inc. in its public filings with
the Securities and Exchange Commission, including its Annual Report
on Form 10-K and Quarterly Reports on 10-Q. Should one or more of
these risks, uncertainties, or facts materialize, or should
underlying assumptions prove incorrect, actual results may vary
materially from those indicated or anticipated by the
forward-looking statements contained herein. Accordingly, you are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date they are made.
Forward-looking statements should not be read as a guarantee of
future performance or results and will not necessarily be accurate
indications of the times at, or by, which such performance or
results will be achieved. Except as required under the federal
securities laws and the rules and regulations of the Securities and
Exchange Commission, we do not have any intention or obligation to
update publicly any forward-looking statements, whether as a result
of new information, future events, or otherwise.
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SOURCE LightPath Technologies