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OPTXW Syntec Optics Holdings Inc

0.1386
-0.004 (-2.81%)
Last Updated: 14:44:52
Delayed by 15 minutes
Name Symbol Market Type
Syntec Optics Holdings Inc NASDAQ:OPTXW NASDAQ Equity Warrant
  Price Change % Change Price Bid Price Offer Price High Price Low Price Open Price Traded Last Trade
  -0.004 -2.81% 0.1386 0.125 0.145 0.1455 0.12 0.135 15,680 14:44:52

Form 10-Q - Quarterly report [Sections 13 or 15(d)]

14/11/2024 8:52pm

Edgar (US Regulatory)


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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(MARK ONE)

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

 

For the quarter ended September 30, 2024

 

OR

 

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

 

For the transition period from to

 

Commission file number: 001-41034

 

SYNTEC OPTICS HOLDINGS, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

Delaware   87-0816957

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

515 Lee Rd.

Rochester, NY 14606

(Address of principal executive offices and zip code)

 

(585) 464-9336

(Registrant’s telephone number including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common stock, par value $0.0001 per share   OPTX   The Nasdaq Capital Market
Redeemable warrants, exercisable for shares of common stock at an exercise price of $11.50 per share   OPTXW   The Nasdaq Capital Market

 

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company
  Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

 

As of November 13, 2024, there were 36,688,266 shares of Class A common stock, par value $0.0001 per share, issued and outstanding.

 

 

 

 
 

 

SYNTEC OPTICS HOLDINGS, INC.

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

TABLE OF CONTENTS

 

  Page
Part I. FINANCIAL INFORMATION 1
Item 1. Interim Unaudited Condensed Consolidated Financial Statements 1
Condensed Consolidated Balance Sheets as of September 30, 2024 (Unaudited) and December 31, 2023 1
Condensed Consolidated Statements of Operations for the Three and Nine Months ended September 30, 2024 and 2023 (Unaudited) 2
Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited) 3
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and September 30, 2023 (Unaudited) 4
Notes to Condensed Consolidated Financial Statements (Unaudited) 5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 14
Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk 20
Item 4. Controls and Procedures 21
Part II. OTHER INFORMATION 22
Item 1. Legal Proceedings 22
Item 1A. Risk Factors 22
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 22
Item 3. Defaults Upon Senior Securities 22
Item 4. Mine Safety Disclosures 22
Item 5. Other Information 22
Item 6. Exhibits 22
SIGNATURES 23

 

 
 

 

PART I - FINANCIAL INFORMATION

 

Item 1. Interim Unaudited Condensed Consolidated Financial Statements

 

SYNTEC OPTICS HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2024 AND DECEMBER 31, 2023

 

   2024 (unaudited)   2023 
         
ASSETS          
           
Current Assets          
Cash  $476,784   $2,158,245 
Accounts Receivable, Net   5,821,986    6,800,064 
Inventory   7,560,983    5,834,109 
Prepaid Expenses and Other Assets   344,442    359,443 
           
Total Current Assets   14,204,195    15,151,861 
           
Property and Equipment, Net   12,437,352    11,101,052 
           
Deferred Income Taxes   420,261    - 
           
Intangible Assets, Net   250,000    295,000 
           
Total Assets  $27,311,808   $26,547,913 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
           
Current Liabilities          
Accounts Payable  $2,492,383   $3,042,315 
Accrued Expenses   1,224,587    1,071,257 
Federal Income Tax Payable   92,127    370,206 
Deferred Revenue   82,813    - 
Line of Credit   6,063,863    6,537,592 
Current Maturities of Debt Obligations   461,510    362,972 
Current Maturities of Finance Lease Obligations   181,327    - 
           
Total Current Liabilities   10,598,610    11,384,342 
           
Long-Term Liabilities          
Long-Term Debt Obligations   2,698,386    2,024,939 
Long-Term Finance Lease Obligations   1,891,659    - 
Deferred Income Taxes   -    74,890 
           
Total Long-Term Liabilities   4,590,045    2,099,829 
           
Total Liabilities   15,188,655    13,484,171 
           
Commitments and Contingencies (Note 16)        - 
           
Stockholder’s Equity          
CL A Common Stock, Par value $.0001 per share; 121,000,000 authorized; 36,688,266 issued and outstanding as of September 30, 2024; 36,688,266 issued and outstanding as of December 31, 2023   3,669    3,669 
Additional Paid-In Capital   1,927,204    1,927,204 
Retained Earnings   10,192,280    11,132,869 
           
Total Stockholder’s Equity   12,123,153    13,063,742 
           
Total Liabilities and Stockholder’s Equity  $27,311,808   $26,547,913 

 

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

 

1
 

 

SYNTEC OPTICS HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

 

                 
   Three Months Ended   Nine Months Ended 
   September 30, 2024   September 30, 2023   September 30, 2024   September 30, 2023 
                 
Net Sales  $7,866,355   $6,600,525   $21,128,263   $21,177,257 
                     
Cost of Goods Sold   6,032,635    4,756,467    16,412,773    15,244,863 
                     
Gross Profit   1,833,720    1,844,058    4,715,490    5,932,394 
                     
General and Administrative Expenses   1,727,480    1,314,885    5,857,806    4,442,117 
                     
Income (Loss) from Operations   106,240    529,173    (1,142,316)   1,490,277 
                     
Other Income (Expense)                    
Interest Expense, Including Amortization of Debt Issuance Costs   (206,069)   (185,292)   (533,178)   (446,875)
Other Income   8,575    21,107    347,547    70,914 
                     
Total Other Income (Expense), Net   (197,494)   (164,185)   (185,631)   (375,961)
                     
Income (Loss) Before Provision for (Benefit) Income Taxes   (91,254)   364,988    (1,327,947)   1,114,316 
                     
Provision (Benefit) for Income Taxes   (77,965)   11,008    (387,358)   139,549 
                     
Net Income (Loss)  $(13,289)  $353,980   $(940,589)  $974,767 
                     
Net Income (Loss) per Common Share                    
Basic and diluted  $(0.00)  $0.01   $(0.03)  $0.03 
                     
Weighted Average Number of Common Shares Outstanding                    
Basic and diluted   36,688,266    31,600,000    36,688,266    31,600,000 

 

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

 

2
 

 

SYNTEC OPTICS HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER’S EQUITY

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024

 

                     
   Common Stock   Additional
Paid-In
   Retained     
   Shares   Amount   Capital   Earnings   Total 
                     
Balances, June 30, 2024   36,688,266   $3,669   $1,927,204   $10,205,569   $12,136,442 
                          
Net Income   -    -    -    (13,289)   (13,289)
                          
Balances, September 30, 2024   36,688,266   $3,669   $1,927,204   $10,192,280   $12,123,153 

 

SYNTEC OPTICS HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER’S EQUITY

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024

 

   Common Stock   Additional
Paid-In
   Retained     
   Shares   Amount   Capital   Earnings   Total 
                     
Balances, December 31, 2023   36,688,266   $3,669   $1,927,204   $11,132,869   $13,063,742 
                          
Net Loss   -    -    -    (940,589)   (940,589)
                          
Balances, September 30, 2024   36,688,266   $3,669   $1,927,204   $10,192,280   $12,123,153 

 

SYNTEC OPTICS HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER’S EQUITY

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2023

 

   Common Stock   Additional
Paid-In
   Retained     
   Shares   Amount   Capital   Earnings   Total 
                     
Balances, June 30, 2023   31,600,000   $3,160   $237,692   $9,777,223   $10,018,075 
                          
Net Income       -     -     353,980    353,980 
                          
Balances, September 30, 2023   31,600,000   $3,160   $237,692   $10,131,203   $10,372,055 

 

SYNTEC OPTICS HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER’S EQUITY

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023

 

   Common Stock   Additional
Paid-In
   Retained     
   Shares   Amount   Capital   Earnings   Total 
                     
Balances, December 31, 2022   31,600,000   $3,160   $237,692   $9,218,501   $9,459,353 
                          
Distributions       -     -     (62,065)   (62,065)
                          
Net Income       -     -     974,767    974,767 
Balances, September 30, 2023   31,600,000   $3,160   $237,692   $10,131,203   $10,372,055 

 

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

 

3
 

 

SYNTEC OPTICS HOLDINGS, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

 

   2024   2023 
Cash Flows From Operating Activities          
Net (Loss) Income  $(940,589)  $974,767 
Adjustments to Reconcile (Loss) Income to Net Cash (Used In)          
Provided By Operating Activities:          
Depreciation and Amortization   2,122,999    2,096,335 
Amortization of Debt Issuance Costs   6,806    5,758 
Gain on Disposal of Property and Equipment   (309,000)   - 
Change in Allowance for Expected Credit Losses   132,764    (51,706)
Change in Reserve for Obsolescence   283,196    16,299 
Deferred Income Taxes   (495,151)   (536,090)
(Increase) Decrease in:          
Accounts Receivable   845,314    (504,372)
Inventory   (2,010,070)   (1,831,660)
Prepaid Expenses and Other Assets   15,001    193,379 
Increase (Decrease) in:          
Accounts Payables and Accrued Expenses   (1,022,602)   523,455 
Federal Income Tax Payable   (278,079)   528,411 
Deferred Revenue   82,813    (309,735)
           
Net Cash (Used In) Provided By Operating Activities   (1,566,598)   1,104,841 
           
Cash Flows From Investing Activities          
Purchases of Property and Equipment   (628,229)   (979,630)
Proceeds from Disposal of Property and Equipment   309,000    - 
           
Net Cash Used in Investing Activities   (319,229)   (979,630)
           
Cash Flows From Financing Activities          
(Repayments) Borrowing on Line of Credit, Net   (473,729)   147,076 
Borrowing on Debt Obligations   1,100,388    - 
Repayments on Debt Obligations   (335,209)   (633,081)
Repayments on Finance Lease Obligations   (87,084)   - 
Distributions   -    (62,065)
           
Net Cash Provided By (Used in) Financing Activities   204,366    (548,070)
           
Net Decrease in Cash   (1,681,461)   (422,859)
           
Cash - Beginning   2,158,245    526,182 
           
Cash - Ending  $476,784   $103,323 
           
Supplemental Cash Flow Disclosures:          
           
Cash Paid for Interest  $459,994   $451,580 
           
Cash Paid for Taxes  $568,143   $118,616 
           
Supplemental Disclosures of Non-Cash Investing Activities:          
           
Assets Acquired and Included in Accounts Payable and Accrued Expenses  $626,000   $680,337 
Finance Lease Liability Incurred  $2,160,070  

$

- 

 

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

 

4
 

 

SYNTEC OPTICS HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Note 1 — Description of Organization and Business Operations

 

Nature of Business

 

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

 

On November 7, 2023, a merger transaction between OmniLit Acquisition Corporation (“OLIT”), Syntec Optics, Inc. (“Legacy Syntec”), and Optics Merger Sub, Inc. (“Merger Sub”) was completed pursuant to which Merger Sub was merged with and into Legacy Syntec, with Legacy Syntec surviving the merger. As a result of the merger, Legacy Syntec became a wholly owned subsidiary of New Syntec.

 

Although New Syntec was the legal acquirer of Legacy Syntec in the merger, Legacy Syntec is deemed to be the accounting acquirer, and the historical financial statements of Legacy Syntec became the basis for the historical financial statements of New Syntec upon the closing of the merger. New Syntec together with its wholly owned subsidiary, Syntec Optics, Inc., is referred to hereinafter as the “Company.”

 

Furthermore, the historical financial statements of Legacy Syntec became the historical financial statements of the Company upon the consummation of the merger. As a result, the financial statements included in this Quarterly Report reflect (i) the historical operating results of Legacy Syntec prior to the merger; (ii) the combined results of OLIT and Legacy Syntec following the close of the merger; (iii) the assets and liabilities of Legacy Syntec at their historical cost and (iv) the Legacy Syntec’s equity structure for all periods presented, as affected by the recapitalization presentation after completion of the merger.

 

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SYNTEC OPTICS HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Note 2 — Summary of Significant Accounting Policies

 

The Company has provided a discussion of significant accounting policies, estimates and judgements in its 2023 Annual Report. There have been no changes to the Company’s significant accounting policies since December 31, 2023.

 

Basis of Presentation

 

The accompanying interim unaudited condensed consolidated financial statements have been prepared by the Company in United States (“U.S.”) dollars and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”), the instructions to Form 10-Q and the provisions of Regulation S-X pertaining to interim financial statements. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted. The interim unaudited condensed consolidated financial statements and notes included in this report should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. In the opinion of management, these interim unaudited condensed consolidated financial statements include all adjustments and accruals of a normal and recurring nature necessary to fairly state the results of the interim periods presented. The results for interim periods are not necessarily indicative of results to be expected for the full year or for any future periods.

 

Principles of Consolidation

 

The accompanying interim unaudited condensed consolidated financial statements include the accounts of Syntec Optics Holdings, Inc. and its wholly owned subsidiary, Syntec Optics. The interim unaudited condensed consolidated financial statements also include the accounts of ELR Associates, LLC (“ELR”), a variable interest entity wherein the Company is the primary beneficiary. Syntec Optic’s variable interest in ELR is the result of providing a guaranty of payment for ELR’s mortgage on the manufacturing facility used exclusively by Syntec Optics. All significant intercompany accounts and transactions have been eliminated in consolidation.

 

Recently Adopted Accounting Pronouncements

 

In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) 2016-13 – Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This update requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Since June 2016, the FASB issued clarifying updates to the new standard including changing the effective date for smaller reporting companies. The guidance is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2016-13 on January 1, 2023. The adoption of ASU 2016-13 did not have a material impact on its interim unaudited condensed consolidated financial statements.

 

Recent Accounting Pronouncements

 

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 clarifies or improves financial reporting by requiring disclosure of incremental segment information. The amendments require disclosure, on an annual and interim basis for all public entities, of significant segment expenses included in segment profit or loss, an amount and description of “other segment items” included in segment profit or loss, and an explanation of how reported segment profit or loss is assessed and allocated. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the timing and impacts of the adoption of this ASU.

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity’s 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 will be effective for the annual period ending December 31, 2025. The Company is currently evaluating the timing and impacts of adoption of this ASU.

 

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SYNTEC OPTICS HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Note 3 — 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 Company’s 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, and (“Custom Tooling”) (iii) non-recurring engineering services (“Non-Recurring Engineering’). The Company’s 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.

 

7
 

 

SYNTEC OPTICS HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Note 3 — 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 Company’s 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 January 1, 2024 and 2023 was $6,800,064 and $5,925,724, 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 January 1, 2024 and 2023 were $-0- and $348,095, respectively. Revenue recognized from amounts included in deferred revenue at the beginning of the period was $-0- and $18,750 for the three months ended September 30, 2024 and 2023, respectively and $-0- and $460,865 for the nine months ended September 30, 2024 and 2023, respectively. The Company does not have any contract assets.

 

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 September 30, 2024 or December 31, 2023.

 

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 three and nine months ended September 30:

 

Schedule of Disaggregated Revenues

                 
   Three Months Ended   Nine Months Ended 
   September 30, 2024   September 30, 2023   September 30, 2024   September 30, 2023 
                 
Products  $7,807,975   $6,257,407   $20,690,178   $18,529,993 
Custom Tooling   15,443    211,350    394,148    1,325,411 
Non-Recurring Engineering   42,937    131,768    43,937    1,321,853 
                     
Total  $7,866,355   $6,600,525   $21,128,263   $21,177,257 

 

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

 

                 
   Three Months Ended   Nine Months Ended 
   September 30, 2024   September 30, 2023   September 30, 2024   September 30, 2023 
                 
Consumer  $961,058   $1,646,128   $3,644,868   $5,056,648 
Communication   2,305,316    492,439    6,068,421    1,950,826 
Defense   2,021,659    1,961,166    4,442,457    6,467,556 
Medical   2,578,322    2,500,792    6,972,517    7,702,227 
                     
Total  $7,866,355   $6,600,525   $21,128,263   $21,177,257 

 

8
 

 

SYNTEC OPTICS HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Note 4 — Inventory

 

Inventory consists of the following at September 30, 2024 and December 31, 2023:

 

Schedule of Inventory

   2024   2023 
         
Raw Materials  $636,870   $1,144,322 
Work-in-Process   7,214,241    4,818,156 
Finished Goods   309,688    188,251 
Inventory gross   8,160,799    6,150,729 
Less: Reserve for Obsolescence   599,816    316,620 
           
Inventory  $7,560,983   $5,834,109 

 

Note 5 — Property and Equipment

 

Property and equipment consists of the following at September 30, 2024 and December 31, 2023:

 

Schedule of Property and Equipment

   2024   2023 
         
Machinery and Equipment  $34,564,371   $32,466,641 
Building and Leasehold Improvements   5,478,631    5,096,436 
Land   130,000    130,000 
Office Furniture and Equipment   2,295,749    2,292,995 
Tooling   103,310    103,310 
Vehicles   24,059    24,059 
Assets Not Placed in Service   7,020    260,000 
Property and Equipment, Gross    42,603,140    40,373,441 
Less: Accumulated Depreciation   30,165,788    29,272,389 
           
Property and Equipment, Net  $12,437,352   $11,101,052 

 

Depreciation expenses were approximately $722,000 and $692,000 for the three months ended September 30, 2024 and 2023, respectively and $2,078,000 and $2,096,000 for the nine months ended September 30, 2024 and 2023, respectively.

 

Note 6 — Intangible Assets

 

Intangible assets consist of the following at September 30, 2024 and December 31, 2023:

 

Schedule of Intangible Assets

   2024   2023 
         
Licenses  $300,000   $300,000 
Total identifiable intangible assets   300,000    300,000 
Less: Accumulated Amortization   50,000    5,000 
           
Intangible Assets, Net  $250,000   $295,000 

 

Amortization expense for acquired finite-lived intangibles was $15,000 and $-0- for the three months ended September 30, 2024 and 2023, respectively and $45,000 and $-0- for the nine months ended September 30, 2024 and 2023. Expected future amortization expense of acquired finite-lived intangible assets as of September 30, 2024, is as follows:

 

Schedule of Expected Future Amortization Expenses of Acquired Finite-Lived Intangible Assets

      
December 31, 2024  $15,000 
2025   60,000 
2026   60,000 
2027   60,000 
2028   55,000 
      
Total  $250,000 

 

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SYNTEC OPTICS HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Note 7 — Line of Credit

 

The Company has a line of credit available in the amount of $10,000,000 with M&T Bank (the “Credit Agreement”). Borrowings may be made against the line of credit as Secured Overnight Financing Rate (SOFR) Loans. The weighted average rate on outstanding borrowings as of September 30, 2024 was 7.31%. As of September 30, 2024 and December 31, 2023, the Company had $6,063,863 and $6,537,592, respectively, outstanding under the line of credit facility.

 

The Credit Agreement contains customary covenants and restrictions on the Company’s ability to engage in certain activities and financial covenants requiring the Company to maintain certain financial ratios. At September 30, 2024, the Company was not in compliance with the minimum fixed charge coverage ratio and maximum total leverage ratio as defined in the Credit Agreement.  On November 12, 2024, the Company obtained a waiver with respect to the Credit Agreement, pursuant to which the sections of the agreement mentioned above are waived for the period ending September 30, 2024. The waiver document is also subject to a forthcoming amendment to the credit agreement which will reduce our available line of credit from $10,000,000 to $8,000,000, increase our applicable interest margin from 2.25% to 3.00% and may include other amendments desired by the lender.

 

Note 8 — Long-Term Debt

 

Long-term debt consists of the following at September 30, 2024 and December 31, 2023:

 

   2024   2023 
         
The Company entered into a $863,607 mortgage note payable 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.  $845,931   $- 
           
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.   216,320    - 
           
The Company entered into a $1,775,000 term note payable with M&T Bank, requiring monthly principal installments of $34,886 plus interest at a fixed rate of 6.59%. The note matures in November 2028.   1,489,935    1,722,626 
           
The Company entered into a $1,064,000 term note payable with the U.S. Small Business Administration, requiring monthly installments of $6,652, including fees and interest at a fixed rate of 2.22%. The note matures in June 2036. The note is secured by certain assets of the Company and a personal guaranty of the Company’s stockholder.   680,719    718,441 
           
Total Long-Term Debt   3,232,905    2,441,067 
           
Less: Unamortized Debt Issuance Costs   73,009    53,156 
           
Long-Term Debt, Less Unamortized Debt Issuance Costs   3,159,896    2,387,911 
           
Less: Current Maturities   461,510    362,972 
           
Long-Term Debt  $2,698,386   $2,024,939 

 

At September 30, 2024, the future debt maturities are as follows:

 

      
December 31, 2024 (remainder of year)  $112,563 
2025   468,611 
2026   497,991 
2027   529,310 
2028   490,302 
Thereafter   1,134,128 
      
Total  $3,232,905 

 

10
 

 

SYNTEC OPTICS HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Note 9 — Retirement Plan

 

The Company maintains a 401(k) retirement plan covering eligible employees of the Company and its affiliate. Under the plan, participants may defer a percentage of their annual compensation, with Syntec Optics matching 50% of employee contributions not to exceed 6% of annual compensation. Total contributions for the Company for the three months ended September 30, 2024 and 2023 amounted to $52,000 and $40,000, respectively, and for the nine months ended September 30, 2024 and 2023 were approximately $147,000 and $135,000, respectively.

 

Note 10 — Income Taxes

 

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

 

The effective income tax rate was 29.17% and 12.52% for the nine months ended September 30, 2024 and 2023, respectively. The effective tax rate for the nine months ended September 30, 2024 and 2023 does not include any discrete tax benefits.

 

Note 11 — Leases

 

During 2024, the Company has entered into finance lease agreements for equipment utilized in its manufacturing facility. During 2022, the Company signed a five-year vehicle operating lease. As of December 31, 2023, the operating lease has been paid off.

 

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

 

   September 30, 2024   September 30, 2023   September 30, 2024   September 30, 2023 
  Three Months Ended   Nine Months Ended 
   September 30, 2024   September 30, 2023   September 30, 2024   September 30, 2023 
Operating lease cost  $-   $4,236   $-   $12,708 
Finance Lease Cost:                    
Amortization of assets   43,794    -    43,794    - 
Interest on liabilities   33,007    -    33,007    - 
                     
Total lease cost  $76,801   $4,236   $76,801   $12,708 

 

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

 

   September 30, 2024   September 30, 2023   September 30, 2024   September 30, 2023 
   Three Months Ended   Nine Months Ended 
   September 30, 2024   September 30, 2023   September 30, 2024   September 30, 2023 
Cash paid for amounts included in measurement of lease obligations:                    
Operating cash flows from operating leases  $           -   $      4,236   $           -   $   12,708 
Operating cash flows from finance leases   33,007    -    33,007    - 
Financing cash flows from finance leases   87,084    -    87,084    - 

 

The following table summarizes weighted average remaining lease term and discount rates as of September 30, 2024, and December 31, 2023:

 

   2024   2023 
Weighted average remaining lease term (years)          
Operating leases   N/A    N/A 
Finance leases   5.25    N/A 
Weighted average discount rate          
Operating leases   N/A    N/A 
Finance leases   8.40%   N/A 

 

11
 

 

Future maturities of our lease liabilities are as follows as of September 30:

 

      
2024 (remainder of year)  $6,596 
2025   432,009 
2026   513,525 
2027   513,525 
2028   513,525 
Thereafter   513,506 
Total Undiscounted Lease Obligations   2,492,686 
Less: Imputed Interests   419,700 
      
Present Value of Lease Obligations  $2,072,986 

 

Note 12 — Warrants

 

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 Company’s 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 for the nine months ended September 30, 2024 or 2023.

 

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 Company’s warrants from January 1, 2024 to September 30, 2024:

 

   Common Stock Warrants 
     
Warrants outstanding, January 1, 2024   14,107,989 
Warrants exercised   - 
Assumed in merger   14,107,989 
Exercised subsequent to merger   - 
Warrants outstanding, September 30, 2024   14,107,989 

 

The following tables presents a roll-forward of the Company’s warrants from January 1, 2023 to September 30, 2023:

 

   Common Stock Warrants 
     
**Warrants outstanding, January 1, 2023   - 
Assumed in merger   14,107,989 
Exercised subsequent to merger   - 
Warrants outstanding, September 30, 2023   14,107,989 

 

12
 

 

SYNTEC OPTICS HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

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 September 30, 2024 and December 31, 2023, there were 36,688,266 shares issued and outstanding and no dividends on common stock had been declared by the Company.

 

As of September 30, 2024 and December 31, 2023, the Company had reserved shares of common stock for issuance as follows:

 

   2024   2023 
         
Common stock outstanding   36,688,266    36,688,266 
Warrants outstanding   14,107,989    14,107,989 
Contingent earnout shares   26,000,000    26,000,000 
Shares available for future issuance (1)   4,773,971    4,773,971 
Total   81,570,226    81,570,226 

 

(1) Refer to Stock Incentive Plan amendment at Note 19

 

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 2,773,972 shares of the Syntec Optics common stock (“Common Stock”) will initially be reserved for issuance under the 2023 Incentive Plan, and additional shares will become available for issuance under the 2023 Incentive Plan each year as described below under “Aggregate Share Limit.” Our Board of Directors and stockholders have approved the 2023 Incentive Plan at the annual meeting held on October 31, 2023.

 

The Company 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. 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.

 

As of September 30, 2024, there were 4,773,971 shares of unissued authorized and available for future awards under the plans.

 

Note 15 — Income (Loss) Per Share

 

The following table sets forth the information needed to compute basic and diluted (loss) earnings per share for the three and nine months ended September 30, 2024 and 2023:

 

   September 30, 2024   September 30, 2023   September 30, 2024   September 30, 2023 
   Three Months Ended   Nine Months Ended 
   September 30, 2024   September 30, 2023   September 30, 2024   September 30, 2023 
Basic and diluted net income (loss) per share                    
Numerator:                    
Net income (loss)  $(13,289)  $353,980   $(940,589)  $974,767 
                     
Denominator                    
Weighted-average shares outstanding   36,688,266    31,600,000    36,688,266    31,600,000 
Basic and diluted net income (loss) per share  $(0.00)  $0.01   $(0.03)  $0.03 

 

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 Company’s financial position or results of operations.

 

Note 17 — Significant Customers

 

For the three months ended September 30, 2024, the Company generated 53% of revenues from three customers. These three customers are in different end-markets utilizing diverse manufacturing capabilities from the Company. The outstanding accounts receivable due from these customers were approximately $3,622,000 as of September 30, 2024.

 

For the three months ended September 30, 2023, the Company generated 41% of revenues from two customers. These two customers are in different end-markets utilizing diverse manufacturing capabilities from the Company. The outstanding accounts receivable due from these customers were approximately $3,148,000 as of September 30, 2023.

 

For the nine months ended September 30, 2024, the Company generated 53% of revenues from three customers. These three customers are in different end-markets utilizing diverse manufacturing capabilities from the Company. The outstanding accounts receivable due from these customers were approximately $3,622,000 as of September 30, 2024.

 

For the nine months ended September 30, 2023, the Company generated 41% of revenues from two customers. These two customers are in different end-markets utilizing diverse manufacturing capabilities from the Company. The outstanding accounts receivable due from these customers were approximately $3,148,000 as of September 30, 2023.

 

Note 18 — Subsequent Events

 

The Company evaluated subsequent events and transactions that occurred after the interim balance sheet date up to the date that the accompanying interim unaudited condensed consolidated financial statements were issued. Based upon the review, other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the interim unaudited condensed consolidated financial statements.

 

On October 1, 2024, a payment of $310,000 became due related to the acquisition of equipment and an intangible asset recorded on the balance sheet as of September 30, 2024. This payment was not made by the due date due to ongoing negotiations with the counterparty regarding certain terms of the contract.

 

The contract stipulates that if the payment is not made, the counterparty has the right to reclaim the rights to both the equipment and intangible asset. However, management is in discussions with the counterparty and believes that the payment will be made in the near future without consequence to the rights of the equipment or intangible asset.

 

As of the date of this filing, management does not believe that an impairment of the equipment or intangible asset is necessary, and no adjustments have been made to the carrying value of the assets on the balance sheet. Management will continue to monitor the situation and will assess the implications on the financial statements as additional information becomes available.

 

13
 

 

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

 

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

 

Cautionary Note Regarding Forward-Looking Statements

 

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

 

For a further list and description of various risks, relevant factors and uncertainties that could cause future results or events to differ materially from those expressed or implied in our forward-looking statements, see the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections in this report, our Annual Report on Form 10-K for the fiscal year ended December 31, 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.

 

Overview

 

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

 

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

 

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

 

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

 

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

 

The Business Combination

 

On November 7, 2023, or the Closing Date, we consummated the Business Combination. Pursuant to the Business Combination Agreement, Merger Sub merged with and into Legacy Syntec, with Legacy Syntec surviving the merger and becoming a wholly-owned direct subsidiary of OmniLit. Thereafter, Merger Sub ceased to exist and OmniLit was renamed Syntec Optics Holdings, Inc. Legacy Syntec is deemed the accounting acquirer, which means that Legacy Syntec’s financial statements for previous periods will be disclosed in our future periodic reports filed with the SEC. Following the Business Combination, our business is the business of Legacy Syntec.

 

The Business Combination was accounted for as a reverse recapitalization. Under this method of accounting, OmniLit was treated as the acquired company for financial statement reporting purposes.

 

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Key Factors Affecting Our Operating Results

 

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

 

End Market Consumers

 

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

 

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

 

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

 

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

 

Supply

 

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

 

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

 

Product and Customer Mix

 

Our sales consist of sales of highly specialized optic and photonic enabled components and sub-components. These products are sold to different customer types (e.g., OEMs and Tier 1 manufacturers) and at different prices and involve varying levels of costs. In any particular period, changes in the mix and volume of particular products sold and the prices of those products relative to other products will impact our average selling price and our cost of goods sold. The price of our products may also increase as a result of increases in the cost of components due to inflation, labor and raw materials. The Company generated 53% of revenues for the nine months ended September 30, 2024 from three customers and 41% of revenues for the nine months ended September 30, 2023 from two customers. 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.

 

15
 

 

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, and information technology organizations, certain facility costs, and fees for professional services.

 

Total Other Income (Expense)

 

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

 

Results of Operations

 

Comparisons for the three months ended September 30, 2024 and 2023

 

The following table sets forth our results of operations for the three months ended September 30, 2024 and 2023, 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, 2024   % Net Sales   September 30, 2023   % Net Sales 
     
Net Sales   7,866,355    100%   6,600,525    100%
Cost of Goods Sold   6,032,635    77%   4,756,467    72%
Gross profit   1,833,720    23%   1,844,058    28%
General and administrative   1,727,480    22%   1,314,885    20%
Income From Operations   106,240    1%   529,173    8%
Other Income (Expense), Net                    
Other Income   8,575    0%   21,107    0%
Interest Income (Expense)   (206,069)   (3)%   (185,292)   (3)%
Total Other Income (Expense), Net   (197,494)   (3)%   (164,185)   (2)%
Income Before Taxes   (91,254)   (1)%   364,988    6%
Provision for Income Tax   (77,965)   (1)%   11,008    0%
Net Income  $(13,289)   (0)%  $353,980    5%

 

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Net Sales

 

Net sales increased by $1.3 million, or 19.2%, to $7.9 million for the three months ended September 30, 2024, as compared to $6.6 million for the three months ended September 30, 2023. This increase was primarily due to a increase of $2.0 million spread across the communication, defense and medical end markets offset by a decrease of $0.7 million in the consumer end market.

 

Cost of Goods Sold

 

Cost of revenue increased by $1.3 million, or 26.8%, to $6.0 million for the three months ended September 30, 2024, as compared to $4.8 million for the three months ended September 30, 2023. This decrease was primarily due to an increase of $0.4 million in payroll costs and $0.9 million in material and subcontractor costs.

 

Gross Profit

 

Gross profit decreased by $0.01 million, or 0.6%, to $1.8 million for the three months ended September 30, 2024, as compared to $1.8 million for the three months ended September 30, 2023. This decrease was primarily due to an increase in cost of goods sold as a percent of revenue.

 

General and Administrative Expenses

 

General and administrative expenses increased by $0.4 million, or 31.4%, to $1.7 million for the three months ended September 30, 2024, as compared to $1.3 million for the three months ended September 30, 2023. This increase was primarily due to an approximately $0.4 million increase in increase in salaries and wages.

 

Total Other Income (Loss)

 

Other income (expense) increased by $0.03 million, or 20.3%, to ($0.20) million for the three months ended September 30, 2024, as compared to other income (expense) of ($0.16) million for the three months ended September 30, 2023. This increase was primarily due to a decrease in other income of $0.1 due to an insurance reimbursement in the prior period as well as $0.02 million increase in interest expense.

 

Income Tax Expense (Benefit)

 

Income tax expense decreased by $0.09 million, or 808.3%, to ($0.08) million for the three months ended September 30, 2024, as compared to $0.01 million for the three months ended September 30, 2023. This decrease was primarily due to the decrease in net income.

 

Net Income (Loss)

 

Net income (loss) decreased by $0.4 million, or 103.8%, to $0.02 million for the three months ended September 30, 2024, as compared to $0.35 million for the three months ended September 30, 2023. This decrease was primarily due to an increase in cost of goods sold of $1.3 million, and an increase in general and administrative expenses of $0.4 million, offset by an increase in sales of $1.3 million.

 

Comparisons for the nine months ended September 30, 2024 and 2023

 

The following table sets forth our results of operations for the nine months ended September 30, 2024 and 2023, 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.

 

   Nine Months Ended 
   September 30, 2024   % Net Sales   September 30, 2023   % Net Sales 
     
Net Sales   21,128,263    100%   21,177,257    100%
Cost of Goods Sold   16,412,773    78%   15,244,863    72%
Gross profit   4,715,490    22%   5,932,394    28%
General and administrative   5,857,806    28%   4,442,117    21%
(Loss) Income From Operations   (1,142,316)   (5)%   1,490,277    7%
Other Income (Expense), Net                    
Other Income   347,547    2%   70,914    0%
Interest Income (Expense)   (533,178)   (3)%   (446,875)   (2)%
Total Other Income (Expense), Net   (185,631)   (1)%   (375,961)   (2)%
(Loss) Income Before Taxes   (1,327,947)   (6)%   1,114,316    5%
(Benefit from) Provision for Income Tax   (387,358)   (2)%   139,549    1%
Net (Loss) Income  $(940,589)   (4)%  $974,767    5%

 

Net Sales

 

Net sales decreased by $0.05 million, or 0.2%, to $21.1 million for the nine months ended September 30, 2024, as compared to $21.2 million for the nine months ended September 30, 2023. This decrease was primarily due to a decrease of $4.2 million spread across the medical, consumer and defense end markets offset by an increase of $4.1 million in the communications end market.

 

Cost of Goods Sold

 

Cost of revenue increased by $1.2 million, or 7.7%, to $16.4 million for the nine months ended September 30, 2024, as compared to $15.2 million for the nine months ended September 30, 2023. This increase was primarily due to a $1.1 million increase in payroll costs and $0.1 million increase in material and subcontracted costs.

 

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Gross Profit

 

Gross profit decreased by $1.2 million, or 20.5%, to $4.7 million for the nine months ended September 30, 2024, as compared to $5.9 million for the nine months ended September 30, 2023. This decrease was primarily due to the decrease in revenue and the increase in cost of goods sold.

 

General and Administrative Expenses

 

General and administrative expenses increased by $1.4 million, or 31.9%, to $5.9 million for the nine months ended September 30, 2024, as compared to $4.4 million for the nine months ended September 30, 2023. This increase was primarily due to an approximately $0.4 million increase in salaries and wages, $0.7 million in professional fees, $0.2 million in research and development expenses, and $0.1 million in advertising expenses.

 

Total Other Income (Loss)

 

Other income (expense) decreased by $0.2 million, or 50.6%, to ($0.2) million for the nine months ended September 30, 2024, as compared to other income (expense) of ($0.4) million for the nine months ended June 30, 2023. This decrease was primarily due to the sale of machinery and equipment of $0.3 million offset by increased interest expense of ($0.09) million due to increased rates for the debt facilities.

 

Income Tax Expense (Benefit)

 

Income tax expense (benefit) decreased by ($0.5) million, or 377.6%, to ($0.39) million for the nine months ended September 30, 2024, as compared to $0.14 million for the nine months ended September 30, 2023. This increase was primarily due to the increase in net loss.

 

Net Income (Loss)

 

Net income decreased by $1.9 million, or 196.5%, to ($0.9) million for the nine months ended September 30, 2024, as compared to $1.0 million for the nine months ended September 30, 2023. This decrease was primarily due to an increase in cost of goods sold of $1.3 million and an increase in general and administrative expenses of $1.5 million, offset by a decrease in other income (expense) of $0.2 million and a decrease in provision for income tax of $0.5 million.

 

Critical Accounting Estimates

 

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

 

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

 

Inventory Valuation

 

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

 

Warrants

 

We account for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to our own ordinary share, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

 

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in-capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations.

 

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Income Taxes

 

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

 

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

 

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

 

Non-GAAP Financial Measures

 

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

 

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

 

Adjusted EBITDA

 

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

 

The company has identified several non-recurring items included in our non-GAAP adjusted EBITDA financial measure. These items encompass management fees, professional & transaction fees, technology start-up costs, optical molding evaluation expenses, glass molding evaluation expenses, and executive transition expenses. Notably, several projects were concluded during the three months ended September 30, 2024, while some expenses were incurred in prior periods. The company evaluated these projects and retroactively adjusted prior periods to account for these expenses. This retroactive adjustment is reflected in the nine months ended September 30, 2024, below.

 

The table below presents our adjusted EBITDA, reconciled to net income for the three and nine months ended September 30, 2024 and 2023.

 

NON-GAAP RECONCILIATION OF EBITDA

FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

 

   Three Months Ended   Nine Months Ended 
   September 30, 2024   September 30, 2023   September 30, 2024   September 30, 2023 
Net (Loss) Income  $(13,289)  $353,980   $(940,589)  $974,767 
Depreciation & Amortization   739,812    692,716    2,129,805    2,102,093 
Interest Expenses   203,650    184,358    526,372    441,115 
Taxes   (77,965)   11,008    (387,358)   139,549 
Non-Recurring Items                    
Other Income - Sale of Equipment & Accessories   -    -    -    (10,068)
Discount Income   -    -    -    192 
Non-Recurring Contributions, Management Fees & Expenses   

-

    

(2,404

)   -    210,112 
Non-Recurring Professional & Transaction Fees   -    55,444    174,500    213,500 
Technology Start-up Costs   22,275    -    272,067    - 
Non-Recurring Optical Molding Evaluation Expenses   77,386    -    187,734    - 
Non-Recurring Glass Molding Evaluation Expenses   28,240    -    130,196    - 
Non-Recurring Executive Transition Expense   122,374    -    122,374    - 
Adjusted EBITDA  $1,102,483   $1,295,104   $2,215,101   $4,071,261 

 

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Liquidity and Capital Resources

 

Liquidity describes the ability of a company to generate sufficient cash flows to meet the cash requirements of its business operations, including working capital needs, debt service, acquisitions, contractual obligations and other commitments. We assess liquidity in terms of our cash flows from operations and their sufficiency to fund our operating and investing activities. As of September 30, 2024, our principal sources of liquidity were cash totaling $0.5 million and a line of credit with $3.9 million available.

 

Significant factors affecting the management of our ongoing cash requirements are the adequacy of available bank lines of credit and our ability to attract long-term capital with satisfactory terms. The sources of our liquidity are subject to all of the risks of our business and could be adversely affected by, among other factors, risks associated with events outside of our control, such as economic consequences of global pandemics and geopolitical conflicts, monetary policy changes in the U.S. and other countries and their impact on the global financial markets, supply chain disruptions and electronics and other material shortages, a decrease in demand for our products, our ability to integrate current and future acquisitions, deterioration in certain financial ratios, availability of borrowings under our revolving credit facility, and other market changes in general. See “Risks Relating to Syntec Optics’ Financial Position and Capital Requirements” included in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

 

Cash Flow — Nine months ended September 30, 2024 and 2023

 

   Nine Months Ended 
   September 30, 
   2024   2023 
Net Cash (Used in) Provided by Operating Activities  $(1,566,598)  $1,104,841 
Net Cash Used in Investing Activities   (319,229)   (979,630)
Net Cash Provided by (Used in) Financing Activities   204,366    (548,070)

 

Operating Activities

 

Net cash used in operating activities was $1.6 million for the nine months ended September 30, 2024, as compared to net cash provided by operating activities of $1.1 million for the nine months ended September 30, 2023. The primary drivers for the year-over-year change include an increase in net loss of $1.9 million, a decrease in federal income tax payable of $0.8 million, a decrease in accounts payable and accrued expenses of $1.6 million, offset by a decrease in accounts receivable of $1.3 million and an increase in deferred revenue of $0.4 million.

 

Investing Activities

 

Net cash used in investing activities was $0.3 million for the nine months ended September 30, 2024, as compared to net cash used in investing activities of $1.0 million for the nine months ended September 30, 2023. The net cash used in investing activities decreased primarily due to a decrease in capital expenditures of $0.4 million and an increase in proceeds from sale of equipment of $0.3 million.

 

Financing Activities

 

Net cash provided by financing activities was $0.2 million for the nine months ended September 30, 2024, as compared to net cash used in financing activities of $0.5 million for the nine months ended September 30, 2023. The primary drivers for the year-over-year change include an increase in borrowing of debt obligations of $1.1 million, a decrease in repayments on debt obligations of $0.3 million, offset by an increase in repayments on the line of credit of $0.6 million, and an increase in repayments on finance lease obligations of $0.1 million.

 

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

 

Our primary market risk exposure is interest rate sensitivity. During the nine months ended September 30, 2024, there have been no material changes to the information included under Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

 

20
 

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

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

 

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Based on the evaluation of our disclosure controls and procedures as of September 30, 2024, our Chief Executive Officer and our Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were not effective due to the following identified material weaknesses:

 

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

 

The Company is instituting controls and procedures that we expect will improve the effectiveness of the Company’s disclosure controls and procedures.

 

Management’s Report on Internal Control over Financial Reporting

 

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

 

Changes in Internal Control over Financial Reporting

 

Other than the material weaknesses and remediation efforts mentioned above, there were no changes in our internal controls over financial reporting that occurred during the quarter ended September 30, 2024 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

21
 

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

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

 

Item 1A. Risk Factors

 

The Company’s risk factors are described in Part I, Item 1A, “Risk Factors”, of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. The risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial position, or future results of operations. The risk factors should be read together with, the risk factors described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

 

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

 

None

 

Item 3. Defaults Upon Senior Securities

 

None

 

Item 4. Mine Safety Disclosures

 

Not Applicable

 

Item 5. Other Information

 

None

 

Item 6. Exhibits

 

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

 

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

 

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

 

* Filed herewith.
   
** Furnished.

 

22
 

 

SIGNATURES

 

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

 

  OMNILIT ACQUISITION CORP.
     
Date: November 14, 2024 By: /s/ Al Kapoor
  Name: Al Kapoor
  Title: Chairman and Chief Executive Officer
    (Principal Executive Officer)
     
Date: November 14, 2024 By: /s/ Dean Rudy
  Name: Dean Rudy
  Title: Chief Financial Officer
    (Principal Accounting Officer and Financial Officer)

 

23

 

Exhibit 3.1

 

SECOND AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

OMNILIT ACQUISITION CORP.

 

The present name of the Corporation is “OmniLit Acquisition Corp.” The corporation was incorporated under the name “OmniLit Acquisition Corp.” by the filing of its original certificate of incorporation with the Secretary of State of the State of Delaware on May 20, 2021. This Second Amended and Restated Certificate of Incorporation (this “Amended and Restated Certificate”), which both restates and further amends the provisions of the corporation’s amended and restated certificate of incorporation (the “Certificate”), was duly adopted in accordance with the provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware, as amended from time to time (the “DGCL”). The text of the Certificate is hereby restated and amended in its entirety to read as follows:

 

ARTICLE I

NAME

 

The name of the corporation is Syntec Optics Holdings, Inc. (the “Corporation”).

 

ARTICLE II

AGENT FOR SERVICE OF PROCESS

 

The address of the Corporation’s registered office in the State of Delaware is 16192 Coastal Highway, in the City of Lewes, County of Sussex, State of Delaware, 19958. The name of its registered agent at such address is Harvard Business Services, Inc.

 

ARTICLE III

PURPOSE

 

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL.

 

ARTICLE IV

AUTHORIZED STOCK

 

Section 4.1 Authorized Capital Stock. The total number of shares of all classes of capital stock, each with a par value of $0.0001 per share, which the Corporation is authorized to issue is 121,000,000 shares (the “Common Stock”), consisting of: 121,000,000 shares of Class A Common Stock (the “Class A Common Stock).

 

The number of authorized shares of Common Stock (including the Class A Common Stock) may be increased or decreased (but not below the number of shares thereof then-outstanding) by the affirmative vote of the holders of a majority of the voting power of all of the then-outstanding shares of the capital stock of the Corporation entitled to vote thereon, irrespective of the provisions of Section 242(b)(2) of the DGCL, and no vote of the holders of the Common Stock voting separately as a class (and/or the Class A Common Stock voting separately as a series) shall be required therefore.

 

Section 4.2 Rights of Class A Common Stock.

 

(a) Voting Rights. As of the Closing, the Company would have authorized Class A Common Stock. Class A shares will be entitled to one vote per share.

 

(b) Dividends and Distribution Rights. Shares of Class A Common Stock shall be treated equally, identically and ratably, on a per share basis, with respect to any dividends or distributions as may be declared and paid from time to time by the Board of Directors of the Corporation (the “Board of Directors”) out of any assets of the Corporation legally available therefor; provided, however, that in the event a dividend is paid in the form of shares of Class A Common Stock (or rights to acquire such shares), then holders of Class A Common Stock shall receive shares of Class A Common Stock (or rights to acquire such shares, as the case may be), with holders of shares of Class A Common Stock receiving, on a per share basis, an identical number of shares of Class A Common Stock, as applicable.

 

 

 

 

(c) Subdivisions, Combinations or Reclassifications. Shares of Class A Common Stock may not be subdivided, combined or reclassified unless the shares of another class are concurrently therewith proportionately subdivided, combined or reclassified in a manner that maintains the same proportionate equity ownership between the holders of the outstanding Class A Common Stock on the record date for such subdivision, combination or reclassification; provided, however, that shares of one such class may be subdivided, combined or reclassified in a different or disproportionate manner if such subdivision, combination or reclassification is approved in advance by the affirmative vote of the holders of a majority of the then-outstanding shares of Class A Common Stock, each voting as a class.

 

(d) Liquidation, Dissolution or Winding Up of the Corporation. Holders of Class A Common Stock will be entitled to receive ratably, on a per share basis, all assets of the Corporation available for distribution to its stockholders unless disparate or different treatment of the shares of such class with respect to distributions upon any such liquidation, dissolution or winding up is approved in advance by the affirmative vote of the holders of a majority of the then-outstanding shares of Class A Common Stock; provided, that for the avoidance of doubt, consideration to be paid or received by a holder of Class A Common Stock pursuant to any employment, consulting, severance or similar services arrangement shall not be deemed to be assets of the Corporation available for distribution to its stockholders for the purpose of this Section (d).

 

(e) Merger or Consolidation. In the case of any distribution or payment made or other consideration paid in respect, or upon conversion or exchange, of the shares of Class A Common Stock upon the merger or consolidation of the Corporation with or into any other entity, or in the case of any other transaction having an effect on stockholders substantially similar to that resulting from a merger or consolidation, such distribution or payment shall be made, or other consideration shall be paid, ratably on a per share basis among the holders of the Class A Common Stock; that for the avoidance of doubt, consideration to be paid or received by a holder of Class A Common Stock in connection with any such merger, consolidation or other transaction pursuant to any employment, consulting, severance or similar services arrangement shall not be deemed to be consideration paid in respect, or upon conversion or exchange, of shares of Class A Common Stock for the purpose of this Section (e).

 

(f) Determinations by the Board of Directors. In case of an ambiguity in the application of any provision set forth in this Section 4 or in the meaning of any term or definition set forth in this Section 4, the Board of Directors, but not a committee thereof, shall have the power to determine, in its sole discretion, the application of any such provision or any such term or definition with respect to any situation based on the facts believed in good faith by it. A determination of the Board of Directors in accordance with the preceding sentence shall be conclusive and binding on the stockholders of the Corporation. Such determination shall be evidenced in a writing adopted by the Board of Directors, and such writing shall be made available for inspection by any holder of capital stock of the Corporation at the principal executive offices of the Corporation.

 

ARTICLE V

DEFINITIONS

 

Section 5.1 Definitions.

 

(a) Family Member” shall mean with respect to any natural person who is a Qualified Stockholder, the spouse, domestic partner or similarly statutorily recognized life partner, parents, grandparents, lineal descendants, siblings and lineal descendants of siblings of such Qualified Stockholder. Lineal descendants shall include adopted persons, but only so long as they are adopted while a minor.

 

(b) Closing Date” shall mean the closing date of the business combination.

 

(c) Option” shall mean rights, options, restricted stock units or warrants to subscribe for, purchase or otherwise acquire Class A Common Stock.

 

 

 

 

(d) Parent” of an entity shall mean any entity that directly or indirectly owns or controls a majority of the voting power of the voting securities of such entity or is otherwise entitled to elect a majority of the members of the board of directors, or entitled to appoint or act as the governing body, of such entity.

 

(e) Permitted Entity” shall mean with respect to a Qualified Stockholder: (i) a Permitted Trust solely for the benefit of (A) such Qualified Stockholder, (B) one or more Family Members of such Qualified Stockholder, or (C) any other Permitted Entity of such Qualified Stockholder; or (ii) any general partnership, limited partnership, limited liability company, corporation or other entity exclusively owned by (A) such Qualified Stockholder, (B) one or more Family Members of such Qualified Stockholder, or (C) any other Permitted Entity of such Qualified Stockholder.

 

(f) Permitted Foundation” shall mean with respect to a Qualified Stockholder: a trust or private non-operating foundation that is tax-exempt under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”), so long as such Qualified Stockholder has dispositive power and Voting Control with respect to the shares of Class B Common Stock held by such trust or organization and the Transfer to such trust does not involve any payment of cash, securities, property or other consideration (other than an interest in such trust or organization) to such Qualified Stockholder.

 

(g) Permitted IRA” shall mean an Individual Retirement Account, as defined in Section 408(a) of the Code, or a pension, profit sharing, stock bonus or other type of plan or trust of which a Qualified Stockholder is a participant or beneficiary and which satisfies the requirements for qualification under Section 401 of the Code; provided that in each case such Qualified Stockholder has sole dispositive power and exclusive Voting Control with respect to the shares of Class B Common Stock held in such account, plan or trust.

 

(h) Permitted Transfer” shall mean, and be restricted to, any Transfer of a share of Class A Common Stock:

 

(i) by a Qualified Stockholder to (A) one or more Family Members of such Qualified Stockholder, (B) any Permitted Entity of such Qualified Stockholder, (C) any Permitted Foundation of such Qualified Stockholder, or (D) any Permitted IRA of such Qualified Stockholder; or

 

(ii) by a Permitted Entity, Permitted Foundation or Permitted IRA of a Qualified Stockholder to (A) such Qualified Stockholder or one or more Family Members of such Qualified Stockholder, or (B) any other Permitted Entity, Permitted Foundation or Permitted IRA of such Qualified Stockholder.

 

(i) Permitted Transferee” shall mean a transferee of shares of Class A Common Stock received in a Permitted Transfer.

 

(j) Permitted Trust” shall mean a bona fide trust where each trustee is (i) a Qualified Stockholder, (ii) a Family Member of such Qualified Stockholder, (iii) a professional in the business of providing trustee services, including private professional fiduciaries, trust companies and bank trust departments, or (iv) an individual who may be removed and replaced at the sole discretion of a Qualified Stockholder or a Family Member of such Qualified Stockholder.

 

(k) Qualified Stockholder” shall mean: (i) the record holder of a share of Class A Common Stock as of the Closing Date; (ii) the initial record holder of any shares of Class A Common Stock that are originally issued by the Corporation after the Closing Date pursuant to the exercise, settlement, exchange or conversion of any Option or Convertible Security that, in each case, was outstanding as of the Closing Date; (iii) each natural person who, prior to the Closing Date, transferred shares of capital stock of the Corporation (or a company that combined with the Corporation or a subsidiary of the Corporation) to a Permitted Entity, Permitted Foundation or Permitted IRA that is or becomes a Qualified Stockholder; (iv) each natural person who transferred shares of, or equity awards for, Class A Common Stock (including any Option exercisable or Convertible Security exchangeable for or convertible into shares of Class A Common Stock) to a Permitted Entity, Permitted Foundation or Permitted IRA that is or becomes a Qualified Stockholder; and (v) a Permitted Transferee.

 

 

 

 

(l) Transfer” of a share of Class A Common Stock shall mean any direct or indirect sale, assignment, transfer, conveyance, hypothecation or other transfer or disposition of such share or any legal or beneficial interest in such share, whether or not for value and whether voluntary or involuntary or by operation of law, including, without limitation, a transfer of a share of Class A Common Stock to a broker or other nominee (regardless of whether there is a corresponding change in beneficial ownership), in each case after 11:59 p.m. Eastern Time on the Closing Date, or the transfer of, or entering into a binding agreement with respect to, Voting Control over such share by proxy or otherwise; provided, however, that the following shall not be considered a “Transfer”:

 

(i) the granting of a proxy to officers or directors of the Corporation at the request of the Board of Directors in connection with actions to be taken at an annual or special meeting of stockholders;

 

(ii) entering into a voting trust, agreement or arrangement (with or without granting a proxy) solely with stockholders who are holders of Class A Common Stock that (A) is disclosed either in a Schedule 13D filed with the Securities and Exchange Commission or in writing to the Secretary of the Corporation, (B) either has a term not exceeding one (1) year or is terminable by the holder of the shares subject thereto at any time and (C) does not involve any payment of cash, securities, property or other consideration to the holder of the shares subject thereto other than the mutual promise to vote shares in a designated manner;

 

(iii) entering into a voting trust, agreement or arrangement (with or without granting a proxy) pursuant to a written agreement to which the Corporation is a party;

 

(iv) the pledge of shares of Class A Common Stock by a stockholder that creates a mere security interest in such shares pursuant to a bona fide loan or indebtedness transaction for so long as such stockholder continues to exercise Voting Control over such pledged shares; provided, however, that a foreclosure on such shares or other similar action by the pledgee (including the exercise of any proxy authority granted to such pledgee pursuant to such pledge) shall constitute a Transfer unless such foreclosure or similar action qualifies as a Permitted Transfer;

 

(v) the fact that, as of the Closing Date or at any time after the Closing Date, the spouse of any holder of Class A Common Stock possesses or obtains an interest in such holder’s shares of Class A Common Stock arising solely by reason of the application of the community property laws of any jurisdiction, so long as no other event or circumstance shall exist or have occurred that constitutes a Transfer of such shares of Class A Common Stock;

 

(vi) entering into a trading plan pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with a broker or other nominee; provided, however, that a sale of such shares of Class A Common Stock pursuant to such plan shall constitute a “Transfer” at the time of such sale;

 

(vii) any redemption, exercise of right of first refusal, purchase or acquisition by the Corporation of a share of Class A Common Stock or any issuance or reissuance by the Corporation of a share of Class A Common Stock; or

 

(viii) entering into a support, voting, tender or similar agreement or arrangement (in each case, with or without the grant of a proxy) in connection with a liquidation, dissolution or winding upon of the Corporation (whether voluntary or involuntary), a merger or consolidation of the Corporation with or into any other entity or any other transaction having an effect on stockholders substantially similar to that resulting from a merger or consolidation, a sale, lease, exclusive license or other disposition of all or substantially all of the assets of the Corporation, or a transaction or series of related transactions to which the Corporation is a party in which shares of the Corporation are transferred such that in excess of fifty percent (50%) of the Corporation’s voting power is transferred, or in connection with consummating the actions or transactions contemplated thereby (including, without limitation, tendering or voting shares of Class A Common Stock in connection with such a transaction, the consummation of such a transaction or the sale, assignment, transfer, conveyance, hypothecation or other transfer or disposition of shares of Class A Common Stock or any legal or beneficial interest in shares of Class A Common Stock in connection with such a transaction); provided that any sale, tender, assignment, transfer, conveyance, hypothecation or other transfer or disposition of Class A Common Stock or any legal or economic interest therein pursuant to such a transaction, or any grant of a proxy over Class A Common Stock with respect to such a transaction without specific instructions as to how to vote such Class A Common Stock, in each case, will constitute a “Transfer” of such Class A Common Stock unless such transaction was approved by the Board of Directors prior to the taking of such action.

 

A Transfer shall also be deemed to have occurred with respect to a share of Class A Common Stock beneficially held by (A) an entity that is a Permitted Entity, Permitted Foundation or Permitted IRA, if there occurs any act or circumstance that causes such entity to no longer be a Permitted Entity, Permitted Foundation or Permitted IRA or (B) an entity that is a Qualified Stockholder, if, in either case, there occurs a transfer on a cumulative basis, from and after the Closing Date, of a majority of the voting power of the voting securities, or securities that otherwise entitle a party to elect a majority of the members of the board of directors or governing body, of such entity or any direct or indirect Parent of such entity, other than a transfer to parties that are, as of the Closing Date, holders of voting securities of any such entity or Parent of such entity.

 

 

 

 

(m) Voting Control” shall mean, with respect to a share of Class A Common Stock, the power (whether exclusive or shared) to vote or direct the voting of such share by proxy, voting agreement or otherwise.

 

Section 5.2 Determinations by the Board of Directors. In case of an ambiguity in the application of any provision set forth in this Article V or in the meaning of any term or definition set forth in this Article V, the Board of Directors (but not a committee thereof), shall have the power to determine, in its sole discretion, the application of any such provision or any such term or definition with respect to any situation based on the facts believed in good faith by it. A determination of the Board of Directors in accordance with the preceding sentence shall be conclusive and binding on the stockholders of the Corporation. Such determination shall be evidenced in a writing adopted by the Board of Directors, and such writing shall be made available for inspection by any holder of capital stock of the Corporation at the principal executive offices of the Corporation.

 

ARTICLE VI

amendment of BYLAWS

 

The Board of Directors shall have the power to adopt, amend or repeal the Bylaws. Any adoption, amendment or repeal of the Bylaws by the Board of Directors shall require the approval of a majority of the Whole Board. For purposes of this Amended and Restated Certificate, the term “Whole Board” shall mean the total number of authorized directors whether or not there exist any vacancies in previously authorized directorships. The stockholders shall also have power to adopt, amend or repeal the Bylaws; provided, however, that, notwithstanding any other provision of this Amended and Restated Certificate or any provision of law that might otherwise permit a lesser or no vote, but in addition to any vote of the holders of any class or series of stock of the Corporation required by applicable law or by this Amended and Restated Certificate, the affirmative vote of the holders of at least two-thirds (2/3) of the voting power of all of the then-outstanding shares of the capital stock of the Corporation entitled to vote thereon, voting together as a single class, shall be required for the stockholders to adopt, amend or repeal any provision of the Bylaws, provided, further, that, in the case of any proposed adoption, amendment or repeal of any provisions of the Bylaws that is approved by at least two-thirds (2/3) of the Whole Board and submitted to the stockholders for adoption thereby, then only the affirmative vote of the holders of a majority of the voting power of all of the then-outstanding shares of the capital stock of the Corporation entitled to vote thereon, voting together as a single class, shall be required to adopt, amend or repeal any such provision of the Bylaws.

 

ARTICLE VII

MATTERS RELATING TO THE BOARD OF DIRECTORS

 

Section 7.1 Director Powers. Except as otherwise provided by the DGCL or this Amended and Restated Certificate, the business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.

 

Section 7.2 Terms; Removal; Number of Directors; Vacancies and Newly Created Directorships.

 

(a) The directors shall be divided, with respect to the time for which they severally hold office, into three classes as nearly equal in size as is practicable, designated as Class I, Class II and Class III, respectively (the “Classified Board”). The Board of Directors is authorized to assign members of the Board of Directors already in office to such classes of the Classified Board. The initial term of office of the Class I directors shall expire at the Corporation’s first annual meeting of stockholders following the Closing Date, the initial term of office of the Class II directors shall expire at the Corporation’s second annual meeting of stockholders following the Closing Date, and the initial term of office of the Class III directors shall expire at the Corporation’s third annual meeting of stockholders following the Closing Date. At each annual meeting of stockholders following the Closing Date, directors elected to succeed those directors of the class whose terms then expire shall be elected for a term of office expiring at the third succeeding annual meeting of stockholders after their election.

 

 

 

 

(b) Each director shall hold office until the annual meeting at which such director’s term expires and until such director’s successor is duly elected and qualified, or until such director’s earlier death, resignation, disqualification or removal. Any director may resign at any time upon notice to the Corporation given in writing or by any electronic transmission.

 

(c) No director may be removed from the Board of Directors except for cause and only by the affirmative vote of the holders of at least two-thirds (2/3) of the voting power of all of the then-outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.

 

(d) The total number of directors constituting the Whole Board shall be fixed from time to time exclusively by resolution adopted by a majority of the Whole Board. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any director. In the event of any increase or decrease in the authorized number of directors, (a) each director then serving as such shall continue as a director of the class of which he or she is a member and (b) the newly created or eliminated directorship resulting from such increase or decrease shall be apportioned by the Board of Directors among the classes of directors so as to make all classes as nearly equal in number as is practicable.

 

(e) Any vacancy occurring in the Board of Directors for any cause, and any newly created directorship resulting from any increase in the authorized number of directors, shall be filled only by the affirmative vote of a majority of the directors then in office, even if less than a quorum, or by a sole remaining director, and shall not be filled by the stockholders. Any director elected in accordance with the preceding sentence shall hold office for a term expiring at the annual meeting of stockholders at which the term of office of the class to which the director has been assigned expires and until such director’s successor shall have been duly elected and qualified, or until such director’s earlier death, resignation, disqualification or removal.

 

(f) In case of an ambiguity in the application of any provision set forth in this Section 2 of Article VII or in the meaning of any term or definition set forth in this Section 2 of Article VII (including any such term used in any other provision of this Amended and Restated Certificate), the Board of Directors, or a committee thereof, shall have the power to determine, in its sole discretion, the application of any such provision or any such term or definition with respect to any situation based on the facts believed in good faith by it. A determination of the Board of Directors (or a committee thereof, as applicable) in accordance with the preceding sentence shall be conclusive and binding on the stockholders of the Corporation. Such determination shall be evidenced in a writing adopted by the Board of Directors (or a committee thereof, as applicable), and such writing shall be made available for inspection by any holder of capital stock of the Corporation at the principal executive offices of the Corporation.

 

Section 7.3 Vote by Ballot. Election of directors need not be by written ballot unless the Bylaws shall so provide

 

ARTICLE VIII

DIRECTOR LIABILITY

 

Section 8.1 Limitation of Director Liability. To the fullest extent permitted by law, no director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. Without limiting the effect of the preceding sentence, if the DGCL is hereafter amended to authorize the further elimination or limitation of the liability of a director, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended.

 

Section 8.2 Change in Rights. Neither any amendment nor repeal of this Article VIII, nor the adoption of any provision of this Amended and Restated Certificate inconsistent with this Article VIII, shall eliminate, reduce or otherwise adversely affect any limitation on the personal liability of a director of the Corporation existing at the time of such amendment, repeal or adoption of such an inconsistent provision.

 

 

 

 

ARTICLE IX

MATTERS RELating to stockholders

 

Section 9.1 No Action by Written Consent of Stockholders. No action shall be taken by the stockholders of the Corporation except at a duly called annual or special meeting of stockholders and no action shall be taken by the stockholders of the Corporation by written consent in lieu of a meeting.

 

Section 9.2 Special Meeting of Stockholders. Special meetings of the stockholders of the Corporation may be called only by the Chairperson of the Board of Directors, the Chief Executive Officer, or the Board of Directors acting pursuant to a resolution adopted by a majority of the Whole Board, and may not be called by the stockholders or any other person or persons.

 

Section 9.3 Advance Notice of Stockholder Nominations and Business Transacted at Special Meetings. Advance notice of stockholder nominations for the election of directors of the Corporation and of business to be brought by stockholders before any meeting of stockholders of the Corporation shall be given in the manner provided in the Bylaws. Business transacted at special meetings of stockholders shall be limited to the purpose or purposes stated in the notice of meeting.

 

ARTICLE X

SEVERABILITY

 

If any provision of this Amended and Restated Certificate shall be held to be invalid, illegal, or unenforceable, then such provision shall nonetheless be enforced to the maximum extent possible consistent with such holding and the remaining provisions of this Amended and Restated Certificate (including without limitation, all portions of any section of this Amended and Restated Certificate containing any such provision held to be invalid, illegal, or unenforceable, which is not invalid, illegal, or unenforceable) shall remain in full force and effect.

 

ARTICLE XI

AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION

 

Section 11.1 General. The Corporation reserves the right to amend or repeal any provision contained in this Amended and Restated Certificate in the manner prescribed by the laws of the State of Delaware and all rights conferred upon stockholders are granted subject to this reservation; provided, however, that, notwithstanding any provision of this Amended and Restated Certificate (including any Certificate of Designation) or any provision of law that might otherwise permit a lesser vote or no vote (but subject to Section 2 of Article IV hereof), but in addition to any vote of the holders of any class or series of the stock of the Corporation required by law or by this Amended and Restated Certificate (including any Certificate of Designation), and subject to Sections 1 and 2.1 of Article IV, the affirmative vote of the holders of at least two-thirds (2/3) of the voting power of all of the then-outstanding shares of the capital stock of the Corporation entitled to vote thereon, voting together as a single class, shall be required to amend or repeal, or adopt any provision inconsistent with, this Section 1 of this Article XI, Sections 1.2 and 2 of Article IV, or Article V, Article VI, Article VII, Article VIII, Article IX, Article X or Article XII (the “Specified Provisions”); provided, further, that, if two-thirds (2/3) of the Whole Board has approved such amendment or repeal of, or any provision inconsistent with, the Specified Provisions, then only the affirmative vote of the holders of a majority of the voting power of all of the then-outstanding shares of the capital stock of the Corporation entitled to vote thereon, voting together as a single class (in addition to any other vote of the holders of any class or series of stock of the Corporation required by law or by this Amended and Restated Certificate, including any Certificate of Designation), shall be required to amend or repeal, or adopt any provision inconsistent with, the Specified Provisions.

 

(a) directly or indirectly, whether by amendment, or through merger, recapitalization, consolidation or otherwise, amend or repeal, or adopt any provision of this Amended and Restated Certificate inconsistent with, or otherwise alter, any provision of this Amended and Restated Certificate relating to the voting, conversion or other rights, powers, preferences, privileges or restrictions of the Class A Common Stock; or

 

 

 

 

(b) authorize, or issue any shares of, any class or series of capital stock of the Corporation having the right to more than one (1) vote for each share thereof.

 

Section 11.2 Changes to or Inconsistent with Section 3 of Article IV. Notwithstanding any other provision of this Amended and Restated Certificate (including any Certificate of Designation) or any provision of law that might otherwise permit a lesser vote or no vote, but in addition to any vote of the holders of any class or series of the stock of the Corporation required by law or by this Amended and Restated Certificate (including any Certificate of Designation), the affirmative vote of the holders of Class A Common Stock representing at least seventy-five percent (75%) of the voting power of all of the then-outstanding shares of Class A Common Stock shall be required to amend or repeal, or to adopt any provision inconsistent with, Section 3 of Article IV or this Section 2 of this Article XI.

 

ARTICLE XII

CHOICE OF FORUM; EXCLUSIVE FORUM

 

Section 12.1 Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware) shall, to the fullest extent permitted by law, be the sole and exclusive forum for: (i) any derivative action or proceeding brought on behalf of the Corporation; (ii) any action asserting a claim that is based upon a breach of a fiduciary duty owed by, or other wrongdoing by, any current or former director, officer, stockholder, employee or agent of the Corporation to the Corporation or the Corporation’s stockholders; (iii) any action asserting a claim against the Corporation or any current or former director, officer, stockholder, employee or agent of the Corporation arising pursuant to any provision of the DGCL, this Amended and Restated Certificate or the Bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; (iv) any action to interpret, apply, enforce or determine the validity of this Restated Certificate of Incorporation or the Bylaws; (v) any action asserting a claim against the Corporation governed by the internal affairs doctrine; or (vi) any action asserting an “internal corporate claim” as that term is defined in Section 115 of the DGCL.

 

Section 12.2 If any action the subject matter of which is within the scope of Section 12.1 immediately above is filed in a court other than a court located within the State of Delaware (a “Foreign Action”) in the name of any stockholder, such stockholder shall be deemed to have consented to: (i) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce Section 12.1 immediately above (an “FSC Enforcement Action”); and (ii) having service of process made upon such stockholder in any such FSC Enforcement Action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder.

 

Section 12.3 Any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Corporation shall be deemed to have notice of and to have consented to the provisions of this Article XII. Failure to enforce the foregoing provisions of this Article XII would cause the Corporation irreparable harm, and the Corporation shall be entitled to equitable relief, including injunctive relief and specific performance, to enforce the foregoing provisions.

 

Section 12.4 Deemed Notice. Any person or entity purchasing or otherwise acquiring or holding any interest in any security of the Corporation shall be deemed to have notice of and consented to this Article XII.

 

[Signature Page Follows]

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed and acknowledged this Amended and Restated Certificate of Incorporation this 31st day of October, 2023.

 

  OmniLit Acquisition Corp.
     
  By: /s/ Al Kapoor
  Name: Al Kapoor
  Title: Chief Executive Officer

 

[Signature Page to Amended and Restated Certificate of Incorporation]

 

 

 

 

Exhibit 3.2

 

OMNILIT ACQUISITION CORP.

 

(a Delaware corporation)

 

RESTATED BYLAWS

 

As Adopted October 31, 2023 and

 

As Effective October 31, 2023

 

ARTICLE I

 

STOCKHOLDERS

 

Section 1.1: Annual Meetings. If required by applicable law, an annual meeting of stockholders shall be held for the election of directors at such date and time as the Board of Directors (the “Board”) of OmniLit Acquisition Corp. (the “Corporation”) shall each year fix. The meeting may be held either at a place, within or without the State of Delaware as permitted by the Delaware General Corporation Law (the “DGCL”), or by means of remote communication as the Board in its sole discretion may determine. Any proper business may be transacted at the annual meeting.

 

Section 1.2: Special Meetings. Special meetings of stockholders for any purpose or purposes shall be called in the manner set forth in the Amended and Restated Certificate of Incorporation of the Corporation (as the same may be amended and/or restated from time to time, the “Certificate of Incorporation”). The special meeting may be held either at a place, within or without the State of Delaware, or by means of remote communication as the Board in its sole discretion may determine. Business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of the meeting.

 

Section 1.3: Notice of Meetings. Notice of all meetings of stockholders shall be given in writing or by electronic transmission in the manner provided by applicable law (including, without limitation, as set forth in Section 6.1.1 of these Bylaws) stating the date, time and place, if any, of the meeting, the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and the record date for determining the stockholders entitled to vote at the meeting (if such date is different from the record date for determining the stockholders entitled to notice of the meeting). In the case of a special meeting, such notice shall also set forth the purpose or purposes for which the meeting is called. Unless otherwise required by applicable law or the Certificate of Incorporation, notice of any meeting of stockholders shall be given not less than ten (10), nor more than sixty (60), days before the date of the meeting to each stockholder of record entitled to vote at such meeting as of the record date for determining the stockholders entitled to notice of the meeting.

 

Section 1.4: Adjournments. Notwithstanding Section 1.5 of these Bylaws, the chairperson of the meeting shall have the power to adjourn the meeting to another time, date and place (if any) regardless of whether a quorum is present, at any time and for any reason. Any meeting of stockholders, annual or special, may be adjourned from time to time, and notice need not be given of any such adjourned meeting if the time, date and place (if any) thereof and the means of remote communication (if any) by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken; provided, however, that if the adjournment is for more than thirty (30) days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If, after the adjournment, a new record date for determination of stockholders entitled to vote is fixed for the adjourned meeting, the Board shall fix as the record date for determining stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote at the adjourned meeting, and shall give notice of the adjourned meeting to each stockholder of record as of the record date so fixed for notice of such adjourned meeting. At the adjourned meeting, the Corporation may transact any business that might have been transacted at the original meeting. To the fullest extent permitted by law, if a quorum is present at the original meeting, it shall also be deemed present at the adjourned meeting. To the fullest extent permitted by law, the Board may postpone, reschedule or cancel at any time and for any reason any previously scheduled special or annual meeting of stockholders before it (or any adjournment) is to be held, regardless of whether any notice or public disclosure with respect to any such meeting (or adjournment) has been sent or made pursuant to Section 1.3 hereof or otherwise, in which case notice shall be provided to the stockholders of the new date, time and place, if any, of the meeting as provided in Section 1.3 above.

 

 

 

 

Section 1.5: Quorum. Except as otherwise required by applicable law or as provided by the Certificate of Incorporation or these Bylaws, at each meeting of stockholders the holders of a majority of the voting power of the shares of stock issued and outstanding and entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum for the transaction of business; provided, however, that where a separate vote by a class or classes or series of stock is required by applicable law or the Certificate of Incorporation, the holders of a majority of the voting power of the shares of such class or classes or series of the stock issued and outstanding and entitled to vote on such matter, present in person or represented by proxy at the meeting, shall constitute a quorum entitled to take action with respect to the vote on such matter. If a quorum shall fail to attend any meeting, the chairperson of the meeting or, if directed to be voted on by the chairperson of the meeting, the holders of a majority of the voting power of the shares entitled to vote who are present in person or represented by proxy at the meeting may adjourn the meeting. Shares of the Corporation’s stock belonging to the Corporation (or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation are held, directly or indirectly, by the Corporation), shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of the Corporation or any other corporation to vote any shares of the Corporation’s stock held by it in a fiduciary capacity and to count such shares for purposes of determining a quorum. A quorum, once established at a meeting, shall not be broken by the withdrawal of enough votes to leave less than a quorum, including, to the fullest extent permitted by law, at any adjournment thereof (unless a new record date is fixed for the adjourned meeting).

 

Section 1.6: Organization. Meetings of stockholders shall be presided over by (a) such person as the Board may designate, or (b) in the absence of such a person, the Chairperson of the Board, or (c) in the absence of such person, the Lead Independent Director, or, (d) in the absence of such person, the Chief Executive Officer of the Corporation, or (e) in the absence of such person, the President of the Corporation, or (f) in the absence of such person, by a Vice President. The Secretary of the Corporation shall act as secretary of the meeting, but in such person’s absence the chairperson of the meeting may appoint any person to act as secretary of the meeting.

 

Section 1.7: Voting; Proxies. Each stockholder of record entitled to vote at a meeting of stockholders may authorize another person or persons to act for such stockholder by proxy. Such a proxy may be prepared, transmitted and delivered in any manner permitted by applicable law. Except as may be required in the Certificate of Incorporation, directors shall be elected by a plurality of the votes cast by the holders of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. At all meetings of stockholders at which a quorum is present, unless a different or minimum vote is required by applicable law, rule or regulation applicable to the Corporation or its securities, the rules or regulations of any stock exchange applicable to the Corporation, the Certificate of Incorporation or these Bylaws, in which case such different or minimum vote shall be the applicable vote on the matter, every matter other than the election of directors shall be decided by the affirmative vote of the holders of a majority of the voting power of the shares of stock entitled to vote on such matter that are present in person or represented by proxy at the meeting and are voted for or against the matter (or if there are two or more classes or series of stock entitled to vote as separate classes, then in the case of each class or series, the holders of a majority of the voting power of the shares of stock of that class or series present in person or represented by proxy at the meeting voting for or against such matter).

 

Section 1.8: Fixing Date for Determination of Stockholders of Record. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall, unless otherwise required by law, not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If the Board so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at 5:00 p.m. Eastern Time on the day next preceding the day on which notice is given, or, if notice is waived, at 5:00 p.m. Eastern Time on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance herewith at the adjourned meeting.

 

 

 

 

In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix, in advance, a record date, which shall not precede the date upon which the resolution fixing the record date is adopted by the Board and which shall not be more than sixty (60) days prior to such action. If no such record date is fixed by the Board, then the record date for determining stockholders for any such purpose shall be at 5:00 p.m. Eastern Time on the day on which the Board adopts the resolution relating thereto.

 

Section 1.9: List of Stockholders Entitled to Vote. The Corporation shall prepare, at least ten (10) days before every meeting of stockholders, a complete list of stockholders entitled to vote at the meeting (provided, however, if the record date for determining the stockholders entitled to vote is less than ten (10) days before the date of the meeting, the list shall reflect the stockholders entitled to vote as of the tenth (10th) day before the meeting date), arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Nothing herein shall require the Corporation to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, for a period of at least ten (10) days prior to the meeting, (a) on a reasonably accessible electronic network as permitted by applicable law (provided that the information required to gain access to the list is provided with the notice of the meeting), or (b) during ordinary business hours, at the principal place of business of the Corporation. If the meeting is held at a location where stockholders may attend in person, a list of stockholders entitled to vote at the meeting shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be examined by any stockholder who is present at the meeting. If the meeting is held solely by means of remote communication, then the list shall be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access the list shall be provided with the notice of the meeting. Except as otherwise provided by law, the stock ledger shall be the only evidence as to who are the stockholders entitled to examine the list of stockholders required by this Section 1.9 or to vote in person or by proxy at any meeting of stockholders.

 

Section 1.10: Inspectors of Elections.

 

1.10.1 Applicability. Unless otherwise required by the Certificate of Incorporation or by applicable law, the following provisions of this Section 1.10 shall apply only if and when the Corporation has a class of voting stock that is: (a) listed on a national securities exchange; (b) authorized for quotation on an interdealer quotation system of a registered national securities association; or (c) held of record by more than two thousand (2,000) stockholders. In all other cases, observance of the provisions of this Section 1.10 shall be optional, and at the discretion of the Board.

 

1.10.2 Appointment. The Corporation shall, in advance of any meeting of stockholders, appoint one or more inspectors of election to act at the meeting and make a written report thereof. The Corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the chairperson of the meeting shall appoint one or more inspectors to act at the meeting.

 

1.10.3 Inspector’s Oath. Each inspector of election, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of such inspector’s ability.

 

1.10.4 Duties of Inspectors. At a meeting of stockholders, the inspectors of election shall (a) ascertain the number of shares outstanding and the voting power of each share, (b) determine the shares represented at a meeting and the validity of proxies and ballots, (c) count all votes and ballots, (d) determine and retain for a reasonable period of time a record of the disposition of any challenges made to any determination by the inspectors, and (e) certify their determination of the number of shares represented at the meeting, and their count of all votes and ballots. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of the duties of the inspectors.

 

1.10.5 Opening and Closing of Polls. The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting. No ballot, proxies or votes, nor any revocations thereof or changes thereto, shall be accepted by the inspectors after the closing of the polls unless the Court of Chancery upon application by a stockholder shall determine otherwise.

 

 

 

 

1.10.6 Determinations. In determining the validity and counting of proxies and ballots, the inspectors shall be limited to an examination of the proxies, any envelopes submitted with those proxies, any information provided in connection with proxies pursuant to Section 211(a)(2)b.(i) of the DGCL, or in accordance with Sections 211(e) or 212(c)(2) of the DGCL, ballots and the regular books and records of the Corporation, except that the inspectors may consider other reliable information for the limited purpose of reconciling proxies and ballots submitted by or on behalf of banks, brokers, their nominees or similar persons which represent more votes than the holder of a proxy is authorized by the record owner to cast or more votes than the stockholder holds of record. If the inspectors consider other reliable information for the limited purpose permitted herein, the inspectors at the time they make their certification of their determinations pursuant to this Section 1.10 shall specify the precise information considered by them, including the person or persons from whom they obtained the information, when the information was obtained, the means by which the information was obtained and the basis for the inspectors’ belief that such information is accurate and reliable.

 

Section 1.11: Conduct of Meetings. The Board may adopt by resolution such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board, the chairperson of any meeting of stockholders shall have the right and authority to convene and (for any reason) to recess and/or adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairperson, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board or prescribed by the chairperson of the meeting, may include, without limitation, the following: (a) the establishment of an agenda or order of business for the meeting; (b) rules and procedures for maintaining order at the meeting and the safety of those present; (c) limitations on attendance at or participation in the meeting to stockholders entitled to vote at the meeting, their duly authorized and constituted proxies or such other persons as the chairperson of the meeting shall determine; (d) restrictions on entry to the meeting after the time fixed for the commencement thereof; (e) limitations on the time (if any) allotted to questions or comments by participants; (f) restricting the use of audio/video recording devices and cell phones; and (g) complying with any state and local laws and regulations concerning safety and security. The chairperson of any meeting of stockholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall, if the facts warrant, determine and declare to the meeting that a matter or business was not properly brought before the meeting and if such chairperson should so determine, such chairperson shall so declare to the meeting and any such matter or business not properly brought before the meeting shall not be transacted or considered. Unless and to the extent determined by the Board or the chairperson of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

 

Section 1.12: Notice of Stockholder Business; Nominations.

 

1.12.1 Annual Meeting of Stockholders.

 

(a) Nominations of persons for election to the Board and the proposal of other business to be considered by the stockholders may be made at an annual meeting of stockholders only: (i) pursuant to the Corporation’s notice of such meeting (or any supplement thereto), (ii) by or at the direction of the Board or any committee thereof or (iii) by any stockholder of the Corporation who was a stockholder of record at the time of giving of the notice provided for in this Section 1.12 (the “Record Stockholder”), who is entitled to vote at such meeting and who complies with the notice and other procedures set forth in this Section 1.12 in all applicable respects. For the avoidance of doubt, the foregoing clause (iii) shall be the exclusive means for a stockholder to make nominations or propose business (other than business included in the Corporation’s proxy materials pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (such act, and the rules and regulations promulgated thereunder, the “Exchange Act”)), at an annual meeting of stockholders, and such stockholder must fully comply with the notice and other procedures set forth in this Section 1.12 to bring such nominations or other business properly before an annual meeting.

 

(b) For nominations or other business to be properly brought before an annual meeting by a Record Stockholder pursuant to Section 1.12.1(a):

 

(i) the Record Stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and have provided any updates or supplements to such notice at the times and in the forms required by this Section 1.12;

 

(ii) such other business (other than the nomination of persons for election to the Board) must otherwise be a proper matter for stockholder action;

 

 

 

 

(iii) if the Proposing Person (as defined below) has provided the Corporation with a Solicitation Notice (as defined below), such Proposing Person must, in the case of a proposal other than the nomination of persons for election to the Board, have delivered a proxy statement and form of proxy to holders of at least the percentage of the Corporation’s voting shares required under applicable law to carry any such proposal, or, in the case of a nomination or nominations, have delivered a proxy statement and form of proxy to holders of a percentage of the Corporation’s voting shares reasonably believed by such Proposing Person to be sufficient to elect the nominee or nominees proposed to be nominated by such Record Stockholder, and must, in either case, have included in such materials the Solicitation Notice; and

 

(iv) if no Solicitation Notice relating thereto has been timely provided pursuant to this Section 1.12, the Proposing Person proposing such business or nomination must not have solicited a number of proxies sufficient to have required the delivery of such a Solicitation Notice under this Section 1.12.

 

To be timely, a Record Stockholder’s notice must be delivered to the Secretary at the principal executive offices of the Corporation not later than 5:00 p.m. Eastern Time on the ninetieth (90th) day nor earlier than 5:00 p.m. Eastern Time on the one hundred and twentieth (120th) day prior to the first anniversary of the preceding year’s annual meeting (except in the case of the Corporation’s first annual meeting following its initial public offering, for which such notice shall be timely if delivered in the same time period as if such meeting were a special meeting governed by Section 1.12.3 of these Bylaws); provided, however, that in the event that the date of the annual meeting is more than thirty (30) days before or more than seventy (70) days after such anniversary date, or if no annual meeting was held in the preceding year, notice by the Record Stockholder to be timely must be so delivered (A) no earlier than 5:00 p.m. Eastern Time on the one hundred and twentieth (120th) day prior to such annual meeting and (B) no later than 5:00 p.m. Eastern Time on the later of the ninetieth (90th) day prior to such annual meeting or 5:00 p.m. Eastern Time on the tenth (10th) day following the day on which Public Announcement (as defined below) of the date of such meeting is first made by the Corporation. In no event shall an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for providing the Record Stockholder’s notice.

 

(c) As to each person whom the Record Stockholder proposes to nominate for election or reelection as a director, in addition to the matters set forth in paragraph (e) below, such Record Stockholder’s notice shall set forth:

 

(i) the name, age, business address and residence address of such person;

 

(ii) the principal occupation or employment of such nominee;

 

(iii) the class, series and number of any shares of stock of the Corporation that are beneficially owned or owned of record by such person or any Associated Person (as defined in Section 1.12.4(c));

 

(iv) the date or dates such shares were acquired and the investment intent of such acquisition;

 

(v) all other information relating to such person that would be required to be disclosed in solicitations of proxies for election of directors in an election contest (even if an election contest is not involved), or would be otherwise required, in each case pursuant to and in accordance with Section 14(a) (or any successor provision) under the Exchange Act and the rules and regulations thereunder;

 

(vi) such person’s written consent (A) to being named in the Corporation’s proxy statement as a nominee, (B) to the public disclosure of information regarding or related to such person provided to the Corporation by such person or otherwise pursuant to this Section 1.12 and (C) to serving as a director, if elected;

 

(vii) whether such person meets the independence requirements of the stock exchange upon which the Corporation’s Class A Common Stock is primarily traded;

 

(viii) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three (3) years, and any other material relationships, between or among such Proposing Person or any of its respective affiliates and associates, on the one hand, and each proposed nominee, and his or her respective affiliates and associates, on the other hand, including all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if the Proposing Person or any of its respective affiliates and associates were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant; and

 

 

 

 

(ix) a completed and signed questionnaire, representation and agreement required by Section 1.12.2 of these Bylaws.

 

(d) As to any business other than the nomination of a director or directors that the Record Stockholder proposes to bring before the meeting, in addition to the matters set forth in paragraph (e) below, such Record Stockholder’s notice shall set forth:

 

(i) a brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the Bylaws, the text of the proposed amendment), the reasons for conducting such business at the meeting and any material interest in such business of such Proposing Person, including any anticipated benefit to any Proposing Person therefrom; and

 

(ii) a description of all agreements, arrangements and understandings between or among any such Proposing Person and any of its respective affiliates or associates, on the one hand, and any other person or persons, on the other hand, (including their names) in connection with the proposal of such business by such Proposing Person;

 

(e) As to each Proposing Person giving the notice, such Record Stockholder’s notice shall set forth:

 

(i) the current name and address of such Proposing Person, including, if applicable, their name and address as they appear on the Corporation’s stock ledger, if different;

 

(ii) the class or series and number of shares of stock of the Corporation that are directly or indirectly owned of record or beneficially owned by such Proposing Person, including any shares of any class or series of the Corporation as to which such Proposing Person has a right to acquire beneficial ownership at any time in the future;

 

(iii) whether and the extent to which any derivative interest in the Corporation’s equity securities (including without limitation any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the Corporation or with a value derived in whole or in part from the value of any class or series of shares of the Corporation, whether or not such instrument or right shall be subject to settlement in the underlying class or series of shares of the Corporation or otherwise, and any cash-settled equity swap, total return swap, synthetic equity position or similar derivative arrangement (any of the foregoing, a “Derivative Instrument”), as well as any rights to dividends on the shares of any class or series of shares of the Corporation that are separated or separable from the underlying shares of the Corporation) or any short interest in any security of the Corporation (for purposes of this Bylaw a person shall be deemed to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any increase or decrease in the value of the subject security, including through performance-related fees) is held directly or indirectly by or for the benefit of such Proposing Person, including without limitation whether and the extent to which any ongoing hedging or other transaction or series of transactions has been entered into by or on behalf of, or any other agreement, arrangement or understanding (including without limitation any short position or any borrowing or lending of shares) has been made, the effect or intent of which is to mitigate loss to or manage risk or benefit of share price changes for, or to increase or decrease the voting power of, such Proposing Person with respect to any share of stock of the Corporation (any of the foregoing, a “Short Interest”);

 

(iv) any proportionate interest in shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such Proposing Person or any of its respective affiliates or associates is a general partner or, directly or indirectly, beneficially owns an interest in a general partner of such general or limited partnership;

 

(v) any direct or indirect material interest in any material contract or agreement with the Corporation, any affiliate of the Corporation or any Competitor (as defined below) (including, in any such case, any employment agreement, collective bargaining agreement or consulting agreement);

 

(vi) any significant equity interests or any Derivative Instruments or Short Interests in any Competitor held by such Proposing Person and/or any of its respective affiliates or associates;

 

(vii) any other material relationship between such Proposing Person, on the one hand, and the Corporation, any affiliate of the Corporation or any Competitor, on the other hand;

 

 

 

 

(viii) all information that would be required to be set forth in a Schedule 13D filed pursuant to Rule 13d-1(a) or an amendment pursuant to Rule 13d-2(a) if such a statement were required to be filed under the Exchange Act and the rules and regulations promulgated thereunder by such Proposing Person and/or any of its respective affiliates or associates;

 

(ix) any other information relating to such Proposing Person that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies or consents by such Proposing Person in support of the business proposed to be brought before the meeting pursuant to Section 14(a) (or any successor provision) under the Exchange Act and the rules and regulations thereunder;

 

(x) such Proposing Person’s written consent to the public disclosure of information provided to the Corporation pursuant to this Section 1.12;

 

(xi) a complete written description of any agreement, arrangement or understanding (whether oral or in writing) (including any knowledge that another person or entity is Acting in Concert (as defined in Section 1.12.4(c)) with such Proposing Person) between or among such Proposing Person, any of its respective affiliates or associates and any other person Acting in Concert with any of the foregoing persons;

 

(xii) a representation that the Record Stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business or nomination;

 

(xiii) a representation whether such Proposing Person intends (or is part of a group that intends) to deliver a proxy statement or form of proxy to holders of, in the case of a proposal, at least the percentage of the Corporation’s voting shares required under applicable law to carry the proposal or, in the case of a nomination or nominations, a sufficient number of holders of the Corporation’s voting shares to elect such nominee or nominees (an affirmative statement of such intent being a “Solicitation Notice”); and

 

(xiv) any proxy, contract, arrangement, or relationship pursuant to which the Proposing Person has a right to vote, directly or indirectly, any shares of any security of the Corporation.

 

The disclosures to be made pursuant to the foregoing clauses (ii), (iii), (iv) and (vi) shall not include any information with respect to the ordinary course business activities of any broker, dealer, commercial bank, trust company or other nominee who is a Proposing Person solely as a result of being the stockholder directed to prepare and submit the notice required by these Bylaws on behalf of a beneficial owner.

 

(f) A stockholder providing written notice required by this Section 1.12 shall update such notice in writing, if necessary, so that the information provided or required to be provided in such notice is true and correct in all material respects as of (i) the record date for determining the stockholders entitled to notice of the meeting and (ii) 5:00 p.m. Eastern Time on the tenth (10th) business day prior to the meeting or any adjournment or postponement thereof. In the case of an update pursuant to clause (i) of the foregoing sentence, such update shall be received by the Secretary of the Corporation at the principal executive office of the Corporation not later than five (5) business days after the record date for determining the stockholders entitled to notice of the meeting, and in the case of an update and supplement pursuant to clause (ii) of the foregoing sentence, such update and supplement shall be received by the Secretary of the Corporation at the principal executive office of the Corporation not later than eight (8) business days prior to the date for the meeting, and, if practicable, any adjournment or postponement thereof (and, if not practicable, on the first practicable date prior to the date to which the meeting has been adjourned or postponed). For the avoidance of doubt, the obligation to update as set forth in this paragraph shall not limit the Corporation’s rights with respect to any deficiencies in any notice provided by a stockholder, extend any applicable deadlines hereunder or enable or be deemed to permit a stockholder who has previously submitted notice hereunder to amend or update any proposal or nomination or to submit any new proposal, including by changing or adding nominees, matters, business and/or resolutions proposed to be brought before a meeting of the stockholders.

 

(g) Notwithstanding anything in Section 1.12 or any other provision of the Bylaws to the contrary, any person who has been determined by a majority of the Whole Board to have violated Section 2.11 of these Bylaws or a Board Confidentiality Policy (as defined below) while serving as a director of the Corporation in the preceding five (5) years shall be ineligible to be nominated to serve as a member of the Board, absent a prior waiver for such nomination approved by two-thirds of the Whole Board.

 

 

 

 

1.12.2 Submission of Questionnaire, Representation and Agreement. To be eligible to be a nominee of any stockholder for election or reelection as a director of the Corporation, the person proposed to be nominated must deliver (in accordance with the time periods prescribed for delivery of notice under Section 1.12 of these Bylaws) to the Secretary at the principal executive offices of the Corporation a completed and signed questionnaire in the form required by the Corporation (which form the stockholder shall request in writing from the Secretary of the Corporation and which the Secretary shall provide to such stockholder within ten days of receiving such request) with respect to the background and qualification of such person to serve as a director of the Corporation and the background of any other person or entity on whose behalf, directly or indirectly, the nomination is being made and a signed representation and agreement (in the form available from the Secretary upon written request) that such person: (a) is not and will not become a party to (i) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the Corporation or (ii) any Voting Commitment that could limit or interfere with such person’s ability to comply, if elected as a director of the Corporation, with such person’s fiduciary duties under applicable law, (b) is not and will not become a party to any Compensation Arrangement (as defined below) that has not been disclosed therein, (c) if elected as a director of the Corporation, will comply with all informational and similar requirements of applicable insurance policies and laws and regulations in connection with service or action as a director of the Corporation, (d) if elected as a director of the Corporation, will comply with all corporate governance, conflict of interest, stock ownership requirements, confidentiality and trading policies and guidelines of the Corporation publicly disclosed from time to time, (e) if elected as a director of the Corporation, will act in the best interests of the Corporation and its stockholders and not in the interests of individual constituencies, (f) consents to being named as a nominee in the Corporation’s proxy statement pursuant to Rule 14a-4(d) under the Exchange Act and any associated proxy card of the Corporation and agrees to serve if elected as a director and (g) intends to serve as a director for the full term for which such individual is to stand for election.

 

1.12.3 Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of such meeting. Nominations of persons for election to the Board may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of such meeting (a) by or at the direction of the Board or any committee thereof or (b) provided that the Board has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who is a stockholder of record at the time of giving of notice of the special meeting, who shall be entitled to vote at the meeting and who complies with the notice and other procedures set forth in this Section 1.12.3 in all applicable respects. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board, any such stockholder may nominate a person or persons (as the case may be), for election to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder’s notice required by Section 1.12.1(b) of these Bylaws shall be delivered to the Secretary of the Corporation at the principal executive offices of the Corporation (i) no earlier than the one hundred and twentieth (120th) day prior to such special meeting and (ii) no later than 5:00 p.m. Eastern Time on the later of the ninetieth (90th) day prior to such special meeting or the tenth (10th) day following the day on which Public Announcement is first made of the date of the special meeting and of the nominees proposed by the Board to be elected at such meeting. In no event shall an adjournment or postponement of a special meeting commence a new time period (or extend any time period) for providing such notice.

 

1.12.4 General.

 

(a) Except as otherwise expressly provided in any applicable rule or regulation promulgated under the Exchange Act, only such persons who are nominated in accordance with the procedures set forth in this Section 1.12 shall be eligible to be elected at a meeting of stockholders and serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 1.12. Except as otherwise provided by law or these Bylaws, the chairperson of the meeting shall have the power and duty to determine whether a nomination or any other business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 1.12 and, if any proposed nomination or business is not in compliance herewith, to declare that such defective proposal or nomination shall be disregarded. Notwithstanding the foregoing provisions of this Section 1.12, unless otherwise required by law, if the stockholder (or a Qualified Representative of the stockholder (as defined below)) does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or proposed business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation.

 

 

 

 

(b) Notwithstanding the foregoing provisions of this Section 1.12, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth herein. Nothing in this Section 1.12 shall be deemed to affect any rights of (i) stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (ii) the holders of any series of Common Stock to elect directors pursuant to any applicable provisions of the Certificate of Incorporation.

 

(c) For purposes of these Bylaws the following definitions shall apply:

 

(i) a person shall be deemed to be “Acting in Concert” with another person if such person knowingly acts (whether or not pursuant to an express agreement, arrangement or understanding) in concert with, or toward a common goal relating to the management, governance or control of the Corporation in substantial parallel with, such other person where (A) each person is conscious of the other person’s conduct or intent and this awareness is an element in their decision-making processes and (B) at least one additional factor suggests that such persons intend to act in concert or in substantial parallel, which such additional factors may include, without limitation, exchanging information (whether publicly or privately), attending meetings, conducting discussions or making or soliciting invitations to act in concert or in substantial parallel; provided that a person shall not be deemed to be Acting in Concert with any other person solely as a result of the solicitation or receipt of revocable proxies or consents from such other person in response to a solicitation made pursuant to, and in accordance with, Section 14(a) (or any successor provision) of the Exchange Act by way of a proxy or consent solicitation statement filed on Schedule 14A. A person Acting in Concert with another person shall be deemed to be Acting in Concert with any third party who is also Acting in Concert with such other person;

 

(ii) “affiliate” and “associate” shall have the meanings ascribed thereto in Rule 405 under the Securities Act of 1933, as amended (the “Securities Act”); provided, however, that the term “partner” as used in the definition of “associate” shall not include any limited partner that is not involved in the management of the relevant partnership;

 

(iii) “Associated Person” shall mean with respect to any subject stockholder or other person (including any proposed nominee) (A) any person directly or indirectly controlling, controlled by or under common control with such stockholder or other person, (B) any beneficial owner of shares of stock of the Corporation owned of record or beneficially by such stockholder or other person, (C) any associate of such stockholder or other person, and (D) any person directly or indirectly controlling, controlled by or under common control or Acting in Concert with any such Associated Person;

 

(iv) “Compensation Arrangement” shall mean any direct or indirect compensatory payment or other financial agreement, arrangement or understanding with any person or entity other than the Corporation, including any agreement, arrangement or understanding with respect to any direct or indirect compensation, reimbursement or indemnification in connection with candidacy, nomination, service or action as a nominee or as a director of the Corporation;

 

(v) “Competitor” shall mean any entity that provides products or services that compete with or are alternatives to the principal products produced or services provided by the Corporation or its affiliates;

 

(vi) “Proposing Person” shall mean (A) the Record Stockholder providing the notice of business proposed to be brought before an annual meeting or nomination of persons for election to the Board at a stockholder meeting, (B) the beneficial owner or beneficial owners, if different, on whose behalf the notice of business proposed to be brought before the annual meeting or nomination of persons for election to the Board at a stockholder meeting is made, and (C) any Associated Person on whose behalf the notice of business proposed to be brought before the annual meeting or nomination of persons for election to the Board at a stockholder meeting is made;

 

(vii) “Public Announcement” shall mean disclosure in a press release reported by a national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act; and

 

(viii) to be considered a “Qualified Representative” of a stockholder, a person must be a duly authorized officer, manager, trustee or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as a proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction thereof, at the meeting. The Secretary of the Corporation, or any other person who shall be appointed to serve as secretary of the meeting, may require, on behalf of the Corporation, reasonable and appropriate documentation to verify the status of a person purporting to be a “Qualified Representative” for purposes hereof.

 

 

 

 

Section 1.13: Delivery to the Corporation. Whenever this Article I requires one or more persons (including a record or beneficial owner of stock) to deliver a document or information to the Corporation or any officer, employee or agent thereof (including any notice, request, questionnaire, revocation, representation or other document or agreement), the Corporation shall not be required to accept delivery of such document or information unless the document or information is in writing (and not in an electronic transmission) and delivered by hand (including, without limitation, overnight courier service) or by certified or registered mail, return receipt requested.

 

ARTICLE II

 

BOARD OF DIRECTORS

 

Section 2.1: Number; Qualifications. The total number of directors constituting the Whole Board shall be fixed from time to time in the manner set forth in the Certificate of Incorporation and the term “Whole Board” shall have the meaning specified in the Certificate of Incorporation. No decrease in the authorized number of directors constituting the Whole Board shall shorten the term of any incumbent director. Directors need not be stockholders of the Corporation.

 

Section 2.2: Election; Resignation; Removal; Vacancies. Election of directors need not be by written ballot. Each director shall hold office until the annual meeting at which such director’s term expires and until such director’s successor is elected and qualified or until such director’s earlier death, resignation, disqualification or removal. Any director may resign by delivering a resignation in writing or by electronic transmission to the Corporation at its principal office or to the Chairperson of the Board, the Chief Executive Officer, or the Secretary. Such resignation shall be effective upon delivery unless it is specified to be effective at a later time or upon the happening of an event. Directors may be removed only as provided by the Certificate of Incorporation and applicable law. All vacancies occurring in the Board and any newly created directorships resulting from any increase in the authorized number of directors shall be filled in the manner set forth in the Certificate of Incorporation.

 

Section 2.3: Regular Meetings. Regular meetings of the Board may be held at such places, within or without the State of Delaware, and at such times as the Board may from time to time determine. Notice of regular meetings need not be given if the date, times and places thereof are fixed by resolution of the Board.

 

Section 2.4: Special Meetings. Special meetings of the Board may be called by the Chairperson of the Board, the Chief Executive Officer, the Lead Independent Director or a majority of the members of the Board then in office and may be held at any time, date or place, within or without the State of Delaware, as the person or persons calling the meeting shall fix. Notice of the time, date and place of such meeting shall be given, orally, in writing or by electronic transmission (including electronic mail), by or at the direction of the person or persons calling the meeting to all directors at least four (4) days before the meeting if the notice is mailed, or at least twenty-four (24) hours before the meeting if such notice is given by telephone, hand delivery, telegram, telex, mailgram, facsimile, electronic mail or other means of electronic transmission; provided, however, that if, under the circumstances, the Chairperson of the Board, the Lead Independent Director or the Chief Executive Officer calling a special meeting deems that more immediate action is necessary or appropriate, notice may be delivered on the day of such special meeting. Unless otherwise indicated in the notice, any and all business may be transacted at a special meeting.

 

Section 2.5: Remote Meetings Permitted. Members of the Board, or any committee of the Board, may participate in a meeting of the Board or such committee by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to conference telephone or other communications equipment shall constitute presence in person at such meeting.

 

Section 2.6: Quorum; Vote Required for Action. At all meetings of the Board, a majority of the Whole Board shall constitute a quorum for the transaction of business. If a quorum shall fail to attend any meeting, a majority of those present may adjourn the meeting to another place, date or time. Except as otherwise provided herein or in the Certificate of Incorporation, or required by law, the vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board.

 

 

 

 

Section 2.7: Organization. Meetings of the Board shall be presided over by (a) the Chairperson of the Board, or (b) in the absence of such person, the Lead Independent Director, or (c) in such person’s absence, by the Chief Executive Officer, or (d) in such person’s absence, by a chairperson chosen by the Board at the meeting. The Secretary shall act as secretary of the meeting, but in such person’s absence the chairperson of the meeting may appoint any person to act as secretary of the meeting.

 

Section 2.8: Unanimous Action by Directors in Lieu of a Meeting. Any action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may be taken without a meeting if all members of the Board or such committee, as the case may be, consent thereto in writing or by electronic transmission. After an action is taken, the consent or consents shall be filed with the minutes of proceedings of the Board or committee, as applicable. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

 

Section 2.9: Powers. Except as otherwise provided by the Certificate of Incorporation or the DGCL, the business and affairs of the Corporation shall be managed by or under the direction of the Board.

 

Section 2.10: Compensation of Directors. Members of the Board, as such, may receive, pursuant to a resolution of the Board, fees and other compensation for their services as directors, including without limitation their services as members of committees of the Board.

 

Section 2.11: Confidentiality. Each director shall maintain the confidentiality of, and shall not share with any third party person or entity (including third parties that originally sponsored, nominated or designated such director (the “Sponsoring Party”)), any non-public information learned in their capacities as directors, including communications among Board members in their capacities as directors. The Board may adopt a board confidentiality policy further implementing and interpreting this bylaw (a “Board Confidentiality Policy”). All directors are required to comply with this bylaw and any such Board Confidentiality Policy unless such director or the Sponsoring Party for such director has entered into a specific written agreement with the Corporation, in either case as approved by the Board, providing otherwise with respect to such confidential information.

 

Section 2.12: Emergency Bylaws. This Section 2.12 shall be operative during any emergency condition as contemplated by Section 110 of the DGCL (an “Emergency”), notwithstanding any different or conflicting provisions in these Bylaws, the Certificate of Incorporation or the DGCL. In the event of any Emergency, or other similar emergency condition, the director or directors in attendance at a meeting of the Board or a standing committee thereof shall constitute a quorum. Such director or directors in attendance may further take action to appoint one or more of themselves or other directors to membership on any standing or temporary committees of the Board as they shall deem necessary and appropriate. Except as the Board may otherwise determine, during any Emergency, the Corporation and its directors and officers, may exercise any authority and take any action or measure contemplated by Section 110 of the DGCL.

 

ARTICLE III

 

COMMITTEES

 

Section 3.1: Committees. The Board may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting of such committee who are not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in place of any such absent or disqualified member. Any such committee, to the extent provided in a resolution of the Board, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers that may require it; but no such committee shall have the power or authority in reference to the following matters: (a) approving, adopting, or recommending to the stockholders any action or matter (other than the election or removal of members of the Board) expressly required by the DGCL to be submitted to stockholders for approval or (b) adopting, amending or repealing any bylaw of the Corporation.

 

 

 

 

Section 3.2: Committee Rules. Each committee shall keep records of its proceedings and make such reports as the Board may from time to time request. Unless the Board otherwise provides, each committee designated by the Board may make, alter and repeal rules for the conduct of its business. In the absence of such rules, each committee shall conduct its business in the same manner as the Board conducts its business pursuant to Article II of these Bylaws. Except as otherwise provided in the Certificate of Incorporation, these Bylaws or the resolution of the Board designating the committee, any committee may create one or more subcommittees, each subcommittee to consist of one or more members of the committee, and may delegate to any such subcommittee any or all of the powers and authority of the committee.

 

ARTICLE IV

 

OFFICERS; CHAIRPERSON; LEAD INDEPENDENT DIRECTOR

 

Section 4.1: Generally. The officers of the Corporation shall consist of a Chief Executive Officer (who may be the Chairperson of the Board or the President), a President, a Secretary and a Treasurer and may consist of such other officers, including, without limitation, a Chief Financial Officer, and one or more Vice Presidents, as may from time to time be appointed by the Board. All officers shall be elected by the Board; provided, however, that the Board may empower the Chief Executive Officer of the Corporation to appoint any officer other than the Chief Executive Officer, the President, the Chief Financial Officer or the Treasurer, and such empowerment can be revoked from the Chief Executive Officer of the Corporation at the discretion of the Board at any time. Except as otherwise provided by law, by the Certificate of Incorporation or these Bylaws, each officer shall hold office until such officer’s successor is duly elected and qualified or until such officer’s earlier resignation, death, disqualification or removal. Any number of offices may be held by the same person. Any officer may resign by delivering a resignation in writing or by electronic transmission to the Corporation at its principal office or to the Chairperson of the Board, the Chief Executive Officer, or the Secretary. Such resignation shall be effective upon delivery unless it is specified to be effective at some later time or upon the happening of some later event. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise may be filled by the Board and the Board may, in its discretion, leave unfilled, for such period as it may determine, any offices. Each such successor shall hold office for the unexpired term of such officer’s predecessor and until a successor is duly elected and qualified or until such officer’s earlier resignation, death, disqualification or removal.

 

Section 4.2: Chief Executive Officer. Subject to the control of the Board and such supervisory powers, if any, as may be given by the Board, the powers and duties of the Chief Executive Officer of the Corporation are:

 

(a) to act as the general manager and, subject to the control of the Board, to have general supervision, direction and control of the business and affairs of the Corporation; and

 

(b) to affix the signature of the Corporation to all deeds, conveyances, mortgages, guarantees, leases, obligations, bonds, certificates and other papers and instruments in writing which have been authorized by the Board or which, in the judgment of the Chief Executive Officer, should be executed on behalf of the Corporation; to sign certificates for shares of stock of the Corporation (if any); and, subject to the direction of the Board, to have general charge of the property of the Corporation and to supervise and control all officers, agents and employees of the Corporation.

 

Section 4.3: Chairperson of the Board. Subject to the provisions of Section 2.7 of these Bylaws, the Chairperson of the Board shall have the power to preside at all meetings of the Board and shall have such other powers and duties as provided in these Bylaws and as the Board may from time to time prescribe. The Chairperson of the Board may or may not be an officer of the Corporation.

 

Section 4.4: Lead Independent Director. The Board may, in its discretion, elect a lead independent director from among its members that are Independent Directors (as defined below) (such director, the “Lead Independent Director”). The Lead Independent Director shall preside at all Board meetings at which the Chairperson of the Board is not present and shall exercise such other powers and duties as may from time to time be assigned to him or her by the Board or as prescribed by these Bylaws. For purposes of these Bylaws, “Independent Director” has the meaning ascribed to such term under the rules of the exchange upon which the Corporation’s Class A Common Stock is primarily traded.

 

Section 4.5: President. The person holding the office of Chief Executive Officer shall be the President of the Corporation unless the Board shall have designated one individual as the President and a different individual as the Chief Executive Officer of the Corporation. Subject to the provisions of these Bylaws and to the direction of the Board, and subject to the supervisory powers of the Chief Executive Officer (if the Chief Executive Officer is an officer other than the President), and subject to such supervisory powers and authority as may be given by the Board to the Chairperson of the Board, and/or to any other officer, the President shall have the responsibility for the general management and control of the business and affairs of the Corporation and the general supervision and direction of all of the officers, employees and agents of the Corporation (other than the Chief Executive Officer, if the Chief Executive Officer is an officer other than the President) and shall perform all duties and have all powers that are commonly incident to the office of President or that are delegated to the President by the Board.

 

 

 

 

Section 4.6: Chief Financial Officer. The person holding the office of Chief Financial Officer shall be the Treasurer of the Corporation unless the Board shall have designated another officer as the Treasurer of the Corporation. Subject to the direction of the Board and the Chief Executive Officer, the Chief Financial Officer shall perform all duties and have all powers that are commonly incident to the office of Chief Financial Officer, or as the Board or the Chief Executive Officer may from time to time prescribe.

 

Section 4.7: Treasurer. The person holding the office of Treasurer shall have custody of all monies and securities of the Corporation. The Treasurer shall make such disbursements of the funds of the Corporation as are authorized and shall render from time to time an account of all such transactions. The Treasurer shall also perform such other duties and have such other powers as are commonly incident to the office of Treasurer, or as the Board or the Chief Executive Officer may from time to time prescribe.

 

Section 4.8: Vice President. Each Vice President shall have all such powers and duties as are commonly incident to the office of Vice President or that are delegated to him or her by the Board or the Chief Executive Officer. A Vice President may be designated by the Board to perform the duties and exercise the powers of the Chief Executive Officer or President in the event of the Chief Executive Officer’s or President’s absence or disability.

 

Section 4.9: Secretary. The Secretary shall issue or cause to be issued all authorized notices for, and shall keep, or cause to be kept, minutes of all meetings of the stockholders and the Board. The Secretary shall have charge of the corporate minute books and similar records and shall perform such other duties and have such other powers as are commonly incident to the office of Secretary, or as the Board or the Chief Executive Officer may from time to time prescribe.

 

Section 4.10: Delegation of Authority. Notwithstanding any provision hereof, the Board may from time to time delegate the powers or duties of any officer of the Corporation to any other officers or agents of the Corporation.

 

Section 4.11: Removal. Any officer of the Corporation shall serve at the pleasure of the Board and may be removed at any time, with or without cause, by the Board; provided that if the Board has empowered the Chief Executive Officer to appoint any officer of the Corporation, then such officer may also be removed by the Chief Executive Officer. Such removal shall be without prejudice to the contractual rights of such officer, if any, with the Corporation.

 

ARTICLE V

 

STOCK

 

Section 5.1: Certificates; Uncertificated Shares. The shares of capital stock of the Corporation shall be uncertificated shares; provided, however, that the resolution of the Board that the shares of capital stock of the Corporation shall be uncertificated shares shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation (or the transfer agent or registrar, as the case may be). Notwithstanding the foregoing, the Board may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be certificated shares. Every holder of stock represented by certificates shall be entitled to have a certificate signed by, or in the name of the Corporation, by any two authorized officers of the Corporation (it being understood that each of the Chairperson of the Board, the Vice-Chairperson of the Board, the Chief Executive Officer, the President, any Vice President, the Treasurer, any Assistant Treasurer, the Secretary, and any Assistant Secretary shall be an authorized officer for such purpose), representing the number of shares registered in certificate form. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were an officer, transfer agent or registrar at the date of issue.

 

 

 

 

Section 5.2: Lost, Stolen or Destroyed Stock Certificates; Issuance of New Certificates or Uncertificated Shares. The Corporation may issue a new certificate of stock or uncertificated shares in the place of any certificate previously issued by it, alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or such owner’s legal representative, to give the Corporation a bond sufficient to indemnify it, against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.

 

Section 5.3: Other Regulations. Subject to applicable law, the Certificate of Incorporation and these Bylaws, the issue, transfer, conversion and registration of shares represented by certificates and of uncertificated shares shall be governed by such other regulations as the Board may establish.

 

ARTICLE VI

 

NOTICES

 

Section 6.1: Notice.

 

6.1.1 Form and Delivery. Except as otherwise required by law, notice may be given in writing directed to a stockholder’s mailing address as it appears on the records of the Corporation and shall be given: (a) if mailed, when notice is deposited in the U.S. mail, postage prepaid; and (b) if delivered by courier service, the earlier of when the notice is received or left at such stockholder’s address. So long as the Corporation is subject to the Securities and Exchange Commission’s proxy rules set forth in Regulation 14A under the Exchange Act, notice shall be given in the manner required by such rules. To the extent permitted by such rules, or if the Corporation is not subject to Regulation 14A, notice may be given by electronic transmission directed to the stockholder’s electronic mail address, and if so given, shall be given when directed to such stockholder’s electronic mail address unless the stockholder has notified the Corporation in writing or by electronic transmission of an objection to receiving notice by electronic mail or such notice is prohibited by Section 232(e) of the DGCL. If notice is given by electronic mail, such notice shall comply with the applicable provisions of Sections 232(a) and 232(d) of the DGCL. Notice may be given by other forms of electronic transmission with the consent of a stockholder in the manner permitted by Section 232(b) of the DGCL and shall be deemed given as provided therein.

 

6.1.2 Affidavit of Giving Notice. An affidavit of the Secretary or an Assistant Secretary or of the transfer agent or other agent of the Corporation that the notice has been given in writing or by a form of electronic transmission shall, in the absence of fraud, be prima facie evidence of the facts stated therein.

 

Section 6.2: Waiver of Notice. Whenever notice is required to be given under any provision of the DGCL, the Certificate of Incorporation or these Bylaws, a written waiver of notice, signed by the person entitled to notice, or waiver by electronic transmission by such person, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors or members of a committee of directors need be specified in any waiver of notice.

 

ARTICLE VII

 

INTERESTED DIRECTORS

 

Section 7.1: Interested Directors. No contract or transaction between the Corporation and one or more of its members of the Board or officers, or between the Corporation and any other corporation, partnership, association or other organization in which one or more of its directors or officers are members of the board of directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board or committee thereof that authorizes the contract or transaction, or solely because his, her or their votes are counted for such purpose, if: (a) the material facts as to his, her or their relationship or interest and as to the contract or transaction are disclosed or are known to the Board or the committee, and the Board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; (b) the material facts as to his, her or their relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (c) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified by the Board, a committee thereof, or the stockholders.

 

Section 7.2: Quorum. Interested directors may be counted in determining the presence of a quorum at a meeting of the Board or of a committee which authorizes a contract or transaction described in Section 7.1 of this Article VII.

 

 

 

 

ARTICLE VIII

 

INDEMNIFICATION

 

Section 8.1: Right to Indemnification. To the fullest extent permitted by applicable law, as the same exists or may hereafter be amended, the Corporation shall indemnify and hold harmless each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “proceeding”), by reason of the fact that he or she is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, other enterprise or nonprofit entity, including service with respect to an employee benefit plan (hereinafter an “Indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent, or in any other capacity while serving as a director, officer, employee or agent, against all liability and loss suffered and expenses (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement) reasonably incurred by such Indemnitee in connection with such proceeding; provided, however, that, except as provided in Section 8.3 with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify an Indemnitee in connection with a proceeding (or part thereof) initiated by such Indemnitee only if such proceeding (or part thereof) was authorized by the Board.

 

Section 8.2: Right to Advancement of Expenses. In addition to the right to indemnification conferred in Section 8.1, an Indemnitee shall also have the right to be paid by the Corporation to the fullest extent not prohibited by applicable law the expenses (including, without limitation, attorneys’ fees) incurred in defending or otherwise participating in any such proceeding in advance of its final disposition (hereinafter an “advancement of expenses”); provided, however, that, if the DGCL requires, an advancement of expenses incurred by an Indemnitee in his or her capacity as a director or officer of the Corporation (and not in any other capacity in which service was or is rendered by such Indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon the Corporation’s receipt of an undertaking (hereinafter an “undertaking”), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined that such Indemnitee is not entitled to be indemnified under this Article VIII or otherwise.

 

Section 8.3: Right of Indemnitee to Bring Suit. If a claim under Section 8.1 or Section 8.2 is not paid in full by the Corporation within 60 days after a written claim therefor has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be 20 days, the Indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Indemnitee shall also be entitled to be paid the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by an Indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (b) in any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final judicial decision from which there is no further right to appeal (hereinafter a “final adjudication”) that, the Indemnitee has not met any applicable standard for indemnification set forth in the DGCL. Neither the failure of the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including a determination by its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) that the Indemnitee has not met such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, shall be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article VIII or otherwise shall be on the Corporation.

 

 

 

 

Section 8.4: Non-Exclusivity of Rights. The rights provided to any Indemnitee pursuant to this Article VIII shall not be exclusive of any other right, which such Indemnitee may have or hereafter acquire under applicable law, the Certificate of Incorporation, these Bylaws, an agreement, a vote of stockholders or disinterested directors, or otherwise.

 

Section 8.5: Insurance. The Corporation may maintain insurance, at its expense, to protect itself and/or any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.

 

Section 8.6: Indemnification of Other Persons. This Article VIII shall not limit the right of the Corporation to the extent and in the manner authorized or permitted by law to indemnify and to advance expenses to persons other than Indemnitees. Without limiting the foregoing, the Corporation may, to the extent authorized from time to time by the Board, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation and to any other person who is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan, to the fullest extent of the provisions of this Article VIII with respect to the indemnification and advancement of expenses of Indemnitees under this Article VIII.

 

Section 8.7: Amendments. Any repeal or amendment of this Article VIII by the Board or the stockholders of the Corporation or by changes in applicable law, or the adoption of any other provision of these Bylaws inconsistent with this Article VIII, will, to the extent permitted by applicable law, be prospective only (except to the extent such amendment or change in applicable law permits the Corporation to provide broader indemnification rights to Indemnitees on a retroactive basis than permitted prior thereto), and will not in any way diminish or adversely affect any right or protection existing hereunder in respect of any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision; provided, however, that amendments or repeals of this Article VIII shall require the affirmative vote of the stockholders holding at least 66.7% of the voting power of all outstanding shares of capital stock of the Corporation.

 

Section 8.8: Certain Definitions. For purposes of this Article VIII, (a) references to “other enterprise” shall include any employee benefit plan; (b) references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; (c) references to “serving at the request of the Corporation” shall include any service that imposes duties on, or involves services by, a person with respect to any employee benefit plan, its participants, or beneficiaries; and (d) a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interest of the Corporation” for purposes of Section 145 of the DGCL.

 

Section 8.9: Contract Rights. The rights provided to Indemnitees pursuant to this Article VIII shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be a director, officer, agent or employee and shall inure to the benefit of the Indemnitee’s heirs, executors and administrators.

 

 

 

 

ARTICLE IX

 

MISCELLANEOUS

 

Section 9.1: Fiscal Year. The fiscal year of the Corporation shall be determined by resolution of the Board.

 

Section 9.2: Seal. The Board may provide for a corporate seal, which may have the name of the Corporation inscribed thereon and shall otherwise be in such form as may be approved from time to time by the Board.

 

Section 9.3: Form of Records. Any records administered by or on behalf of the Corporation in the regular course of its business, including its stock ledger, books of account and minute books, may be kept on or by means of, or be in the form of any other information storage device, method or one or more electronic networks or databases (including one or more distributed electronic networks or databases), electronic or otherwise, provided that the records so kept can be converted into clearly legible paper form within a reasonable time and otherwise comply with the DGCL. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect such records pursuant to any provision of the DGCL.

 

Section 9.4: Reliance Upon Books and Records. A member of the Board, or a member of any committee designated by the Board shall, in the performance of such person’s duties, be fully protected in relying in good faith upon the books and records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of the Corporation’s officers or employees, or committees of the Board, or by any other person as to matters the member reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.

 

Section 9.5: Certificate of Incorporation Governs. In the event of any conflict between the provisions of the Certificate of Incorporation and Bylaws, the provisions of the Certificate of Incorporation shall govern.

 

Section 9.6: Severability. If any provision of these Bylaws shall be held to be invalid, illegal, unenforceable or in conflict with the provisions of the Certificate of Incorporation, then such provision shall nonetheless be enforced to the maximum extent possible consistent with such holding and the remaining provisions of these Bylaws (including without limitation, all portions of any section of these Bylaws containing any such provision held to be invalid, illegal, unenforceable or in conflict with the Certificate of Incorporation, that are not themselves invalid, illegal, unenforceable or in conflict with the Certificate of Incorporation) shall remain in full force and effect.

 

Section 9.7: Time Periods. In applying any provision of these Bylaws which requires that an act be done or not be done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used (unless otherwise specified herein), the day of the doing of the act shall be excluded, and the day of the event shall be included.

 

ARTICLE X

 

AMENDMENT

 

Notwithstanding any other provision of these Bylaws, any alteration, amendment or repeal of these Bylaws, and any adoption of new Bylaws, shall require the approval of the Board or the stockholders of the Corporation as expressly provided in the Certificate of Incorporation.

 

CERTIFICATE OF ADOPTION OF BYLAWS
OF
OMNILIT ACQUISITION CORP.

 

The undersigned certifies that he is the duly elected, qualified and Secretary of OmniLit Acquisition Corp., a Delaware corporation (the “Corporation”), and that the foregoing bylaws were adopted as the bylaws of the Corporation on October 31, 2023, by the Board of Directors of the Corporation.

 

IN WITNESS WHEREOF, the undersigned has executed this certificate effective as of October 31, 2023.

 

  /s/ Robert O Nelson II
  Robert O Nelson II, Secretary

 

 

 

 

EXHIBIT 31.1

 

CERTIFICATION

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Al Kapoor, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of Syntec Optics Holdings, Inc.;
   
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
3. Based on my knowledge, the unaudited condensed financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
   
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

 

  a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and
     
  b) (Paragraph omitted pursuant to SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313);
     
  c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 14, 2024

 

  By: /s/ Al Kapoor
  Name: Al Kapoor
  Title: Chairman and Chief Executive Officer
    (Principal Executive Officer)

 

 

 

 

EXHIBIT 31.2

 

CERTIFICATION

 

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Dean Rudy, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of Syntec Optics Holdings, Inc.;
   
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
3. Based on my knowledge, the unaudited condensed financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
   
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

 

  a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and
     
  b) (Paragraph omitted pursuant to SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313);
     
  c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 14, 2024

 

  By: /s/ Dean Rudy
  Name: Dean Rudy
  Title: Chief Financial Officer
    (Principal Accounting Officer and Financial Officer)

 

 

 

 

EXHIBIT 32.1

 

CERTIFICATION

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Syntec Optics Holdings, Inc. (the “Company”) on Form 10-Q for the quarterly period ended September 30, 2024, as filed with the Securities and Exchange Commission (the “Report”), I, Al Kapoor, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as added by §906 of the Sarbanes-Oxley Act of 2002, that:

 

  1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
     
  2. To my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.

 

Dated: November 14, 2024

 

  By: /s/ Al Kapoor
  Name: Al Kapoor
  Title: Chairman and Chief Executive Officer
    (Principal Executive Officer)

 

 

 

 

EXHIBIT 32.2

 

CERTIFICATION

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Syntec Optics Holdings, Inc. (the “Company”) on Form 10-Q for the quarterly period ended September 30, 2024, as filed with the Securities and Exchange Commission (the “Report”), I, Dean Rudy, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as added by §906 of the Sarbanes-Oxley Act of 2002, that:

 

  1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
     
  2. To my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.

 

Dated: November 14, 2024

 

  By: /s/ Dean Rudy
  Name: Dean Rudy
  Title: Chief Financial Officer
    (Principal Accounting Officer and Financial Officer)

 

 

 

v3.24.3
Cover - $ / shares
9 Months Ended
Sep. 30, 2024
Nov. 13, 2024
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Sep. 30, 2024  
Document Fiscal Period Focus Q3  
Document Fiscal Year Focus 2024  
Current Fiscal Year End Date --12-31  
Entity File Number 001-41034  
Entity Registrant Name SYNTEC OPTICS HOLDINGS, INC.  
Entity Central Index Key 0001866816  
Entity Tax Identification Number 87-0816957  
Entity Incorporation, State or Country Code DE  
Entity Address, Address Line One 515 Lee Rd.  
Entity Address, City or Town Rochester  
Entity Address, State or Province NY  
Entity Address, Postal Zip Code 14606  
City Area Code (585)  
Local Phone Number 464-9336  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company true  
Elected Not To Use the Extended Transition Period false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   36,688,266
Entity Listing, Par Value Per Share $ 0.0001  
Common stock, par value $0.0001 per share    
Title of 12(b) Security Common stock, par value $0.0001 per share  
Trading Symbol OPTX  
Security Exchange Name NASDAQ  
Redeemable warrants, exercisable for shares of common stock at an exercise price of $11.50 per share    
Title of 12(b) Security Redeemable warrants, exercisable for shares of common stock at an exercise price of $11.50 per share  
Trading Symbol OPTXW  
Security Exchange Name NASDAQ  
v3.24.3
Condensed Consolidated Balance Sheets - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Current Assets    
Cash $ 476,784 $ 2,158,245
Accounts Receivable, Net 5,821,986 6,800,064
Inventory 7,560,983 5,834,109
Prepaid Expenses and Other Assets 344,442 359,443
Total Current Assets 14,204,195 15,151,861
Property and Equipment, Net 12,437,352 11,101,052
Deferred Income Taxes 420,261
Intangible Assets, Net 250,000 295,000
Total Assets 27,311,808 26,547,913
Current Liabilities    
Accounts Payable 2,492,383 3,042,315
Accrued Expenses 1,224,587 1,071,257
Federal Income Tax Payable 92,127 370,206
Deferred Revenue 82,813
Line of Credit 6,063,863 6,537,592
Current Maturities of Debt Obligations 461,510 362,972
Current Maturities of Finance Lease Obligations 181,327
Total Current Liabilities 10,598,610 11,384,342
Long-Term Liabilities    
Long-Term Debt Obligations 2,698,386 2,024,939
Long-Term Finance Lease Obligations 1,891,659
Deferred Income Taxes 74,890
Total Long-Term Liabilities 4,590,045 2,099,829
Total Liabilities 15,188,655 13,484,171
Commitments and Contingencies (Note 16)  
Stockholder’s Equity    
Additional Paid-In Capital 1,927,204 1,927,204
Retained Earnings 10,192,280 11,132,869
Total Stockholder’s Equity 12,123,153 13,063,742
Total Liabilities and Stockholder’s Equity 27,311,808 26,547,913
Common Class A [Member]    
Stockholder’s Equity    
Common Stock Value $ 3,669 $ 3,669
v3.24.3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares
Sep. 30, 2024
Dec. 31, 2023
Common stock, shares outstanding 36,688,266 36,688,266
Common Class A [Member]    
Common stock, par value $ 0.0001 $ 0.0001
Common stock, shares authorized 121,000,000 121,000,000
Common stock, shares issued 36,688,266 36,688,266
Common stock, shares outstanding 36,688,266 36,688,266
v3.24.3
Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Income Statement [Abstract]        
Net Sales $ 7,866,355 $ 6,600,525 $ 21,128,263 $ 21,177,257
Cost of Goods Sold 6,032,635 4,756,467 16,412,773 15,244,863
Gross Profit 1,833,720 1,844,058 4,715,490 5,932,394
General and Administrative Expenses 1,727,480 1,314,885 5,857,806 4,442,117
Income (Loss) from Operations 106,240 529,173 (1,142,316) 1,490,277
Other Income (Expense)        
Interest Expense, Including Amortization of Debt Issuance Costs (206,069) (185,292) (533,178) (446,875)
Other Income 8,575 21,107 347,547 70,914
Total Other Income (Expense), Net (197,494) (164,185) (185,631) (375,961)
Income (Loss) Before Provision for (Benefit) Income Taxes (91,254) 364,988 (1,327,947) 1,114,316
Provision (Benefit) for Income Taxes (77,965) 11,008 (387,358) 139,549
Net Income (Loss) $ (13,289) $ 353,980 $ (940,589) $ 974,767
Net Income (Loss) per Common Share        
Net income (loss) per common share, basic $ (0.00) $ 0.01 $ (0.03) $ 0.03
Net income (loss) per common share, diluted $ (0.00) $ 0.01 $ (0.03) $ 0.03
Weighted Average Number of Common Shares Outstanding        
Weighted average number of common shares outstanding, basic 36,688,266 31,600,000 36,688,266 31,600,000
Weighted average number of common shares outstanding, diluted 36,688,266 31,600,000 36,688,266 31,600,000
v3.24.3
Condensed Consolidated Statements of Changes in Stockholder's Equity (Unaudited) - USD ($)
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Total
Balances at Dec. 31, 2022 $ 3,160 $ 237,692 $ 9,218,501 $ 9,459,353
Balance, shares at Dec. 31, 2022 31,600,000      
Net Income (Loss) 974,767 974,767
Distributions (62,065) (62,065)
Balances at Sep. 30, 2023 $ 3,160 237,692 10,131,203 10,372,055
Balance, shares at Sep. 30, 2023 31,600,000      
Balances at Jun. 30, 2023 $ 3,160 237,692 9,777,223 10,018,075
Balance, shares at Jun. 30, 2023 31,600,000      
Net Income (Loss) 353,980 353,980
Balances at Sep. 30, 2023 $ 3,160 237,692 10,131,203 10,372,055
Balance, shares at Sep. 30, 2023 31,600,000      
Balances at Dec. 31, 2023 $ 3,669 1,927,204 11,132,869 13,063,742
Balance, shares at Dec. 31, 2023 36,688,266      
Net Income (Loss) (940,589) (940,589)
Balances at Sep. 30, 2024 $ 3,669 1,927,204 10,192,280 12,123,153
Balance, shares at Sep. 30, 2024 36,688,266      
Balances at Jun. 30, 2024 $ 3,669 1,927,204 10,205,569 12,136,442
Balance, shares at Jun. 30, 2024 36,688,266      
Net Income (Loss) (13,289) (13,289)
Balances at Sep. 30, 2024 $ 3,669 $ 1,927,204 $ 10,192,280 $ 12,123,153
Balance, shares at Sep. 30, 2024 36,688,266      
v3.24.3
Consolidated Statements of Cash Flows (Unaudited) - USD ($)
9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Cash Flows From Operating Activities    
Net (Loss) Income $ (940,589) $ 974,767
Adjustments to Reconcile (Loss) Income to Net Cash (Used In) Provided By Operating Activities:    
Depreciation and Amortization 2,122,999 2,096,335
Amortization of Debt Issuance Costs 6,806 5,758
Gain on Disposal of Property and Equipment (309,000)
Change in Allowance for Expected Credit Losses 132,764 (51,706)
Change in Reserve for Obsolescence 283,196 16,299
Deferred Income Taxes (495,151) (536,090)
(Increase) Decrease in:    
Accounts Receivable 845,314 (504,372)
Inventory (2,010,070) (1,831,660)
Prepaid Expenses and Other Assets 15,001 193,379
Increase (Decrease) in:    
Accounts Payables and Accrued Expenses (1,022,602) 523,455
Federal Income Tax Payable (278,079) 528,411
Deferred Revenue 82,813 (309,735)
Net Cash (Used In) Provided By Operating Activities (1,566,598) 1,104,841
Cash Flows From Investing Activities    
Purchases of Property and Equipment (628,229) (979,630)
Proceeds from Disposal of Property and Equipment 309,000
Net Cash Used in Investing Activities (319,229) (979,630)
Cash Flows From Financing Activities    
(Repayments) Borrowing on Line of Credit, Net (473,729) 147,076
Borrowing on Debt Obligations 1,100,388
Repayments on Debt Obligations (335,209) (633,081)
Repayments on Finance Lease Obligations (87,084)
Distributions (62,065)
Net Cash Provided By (Used in) Financing Activities 204,366 (548,070)
Net Decrease in Cash (1,681,461) (422,859)
Cash - Beginning 2,158,245 526,182
Cash - Ending 476,784 103,323
Supplemental Cash Flow Disclosures:    
Cash Paid for Interest 459,994 451,580
Cash Paid for Taxes 568,143 118,616
Supplemental Disclosures of Non-Cash Investing Activities:    
Assets Acquired and Included in Accounts Payable and Accrued Expenses 626,000 680,337
Finance Lease Liability Incurred $ 2,160,070
v3.24.3
Description of Organization and Business Operations
9 Months Ended
Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Description of Organization and Business Operations

Note 1 — Description of Organization and Business Operations

 

Nature of Business

 

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

 

On November 7, 2023, a merger transaction between OmniLit Acquisition Corporation (“OLIT”), Syntec Optics, Inc. (“Legacy Syntec”), and Optics Merger Sub, Inc. (“Merger Sub”) was completed pursuant to which Merger Sub was merged with and into Legacy Syntec, with Legacy Syntec surviving the merger. As a result of the merger, Legacy Syntec became a wholly owned subsidiary of New Syntec.

 

Although New Syntec was the legal acquirer of Legacy Syntec in the merger, Legacy Syntec is deemed to be the accounting acquirer, and the historical financial statements of Legacy Syntec became the basis for the historical financial statements of New Syntec upon the closing of the merger. New Syntec together with its wholly owned subsidiary, Syntec Optics, Inc., is referred to hereinafter as the “Company.”

 

Furthermore, the historical financial statements of Legacy Syntec became the historical financial statements of the Company upon the consummation of the merger. As a result, the financial statements included in this Quarterly Report reflect (i) the historical operating results of Legacy Syntec prior to the merger; (ii) the combined results of OLIT and Legacy Syntec following the close of the merger; (iii) the assets and liabilities of Legacy Syntec at their historical cost and (iv) the Legacy Syntec’s equity structure for all periods presented, as affected by the recapitalization presentation after completion of the merger.

 

 

SYNTEC OPTICS HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

v3.24.3
Summary of Significant Accounting Policies
9 Months Ended
Sep. 30, 2024
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

Note 2 — Summary of Significant Accounting Policies

 

The Company has provided a discussion of significant accounting policies, estimates and judgements in its 2023 Annual Report. There have been no changes to the Company’s significant accounting policies since December 31, 2023.

 

Basis of Presentation

 

The accompanying interim unaudited condensed consolidated financial statements have been prepared by the Company in United States (“U.S.”) dollars and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”), the instructions to Form 10-Q and the provisions of Regulation S-X pertaining to interim financial statements. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted. The interim unaudited condensed consolidated financial statements and notes included in this report should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. In the opinion of management, these interim unaudited condensed consolidated financial statements include all adjustments and accruals of a normal and recurring nature necessary to fairly state the results of the interim periods presented. The results for interim periods are not necessarily indicative of results to be expected for the full year or for any future periods.

 

Principles of Consolidation

 

The accompanying interim unaudited condensed consolidated financial statements include the accounts of Syntec Optics Holdings, Inc. and its wholly owned subsidiary, Syntec Optics. The interim unaudited condensed consolidated financial statements also include the accounts of ELR Associates, LLC (“ELR”), a variable interest entity wherein the Company is the primary beneficiary. Syntec Optic’s variable interest in ELR is the result of providing a guaranty of payment for ELR’s mortgage on the manufacturing facility used exclusively by Syntec Optics. All significant intercompany accounts and transactions have been eliminated in consolidation.

 

Recently Adopted Accounting Pronouncements

 

In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) 2016-13 – Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This update requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Since June 2016, the FASB issued clarifying updates to the new standard including changing the effective date for smaller reporting companies. The guidance is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2016-13 on January 1, 2023. The adoption of ASU 2016-13 did not have a material impact on its interim unaudited condensed consolidated financial statements.

 

Recent Accounting Pronouncements

 

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 clarifies or improves financial reporting by requiring disclosure of incremental segment information. The amendments require disclosure, on an annual and interim basis for all public entities, of significant segment expenses included in segment profit or loss, an amount and description of “other segment items” included in segment profit or loss, and an explanation of how reported segment profit or loss is assessed and allocated. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the timing and impacts of the adoption of this ASU.

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity’s 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 will be effective for the annual period ending December 31, 2025. The Company is currently evaluating the timing and impacts of adoption of this ASU.

 

 

SYNTEC OPTICS HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

v3.24.3
Revenue Recognition
9 Months Ended
Sep. 30, 2024
Revenue from Contract with Customer [Abstract]  
Revenue Recognition

Note 3 — 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 Company’s 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, and (“Custom Tooling”) (iii) non-recurring engineering services (“Non-Recurring Engineering’). The Company’s 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.

 

 

SYNTEC OPTICS HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Note 3 — 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 Company’s 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 January 1, 2024 and 2023 was $6,800,064 and $5,925,724, 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 January 1, 2024 and 2023 were $-0- and $348,095, respectively. Revenue recognized from amounts included in deferred revenue at the beginning of the period was $-0- and $18,750 for the three months ended September 30, 2024 and 2023, respectively and $-0- and $460,865 for the nine months ended September 30, 2024 and 2023, respectively. The Company does not have any contract assets.

 

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 September 30, 2024 or December 31, 2023.

 

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 three and nine months ended September 30:

 

Schedule of Disaggregated Revenues

                 
   Three Months Ended   Nine Months Ended 
   September 30, 2024   September 30, 2023   September 30, 2024   September 30, 2023 
                 
Products  $7,807,975   $6,257,407   $20,690,178   $18,529,993 
Custom Tooling   15,443    211,350    394,148    1,325,411 
Non-Recurring Engineering   42,937    131,768    43,937    1,321,853 
                     
Total  $7,866,355   $6,600,525   $21,128,263   $21,177,257 

 

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

 

                 
   Three Months Ended   Nine Months Ended 
   September 30, 2024   September 30, 2023   September 30, 2024   September 30, 2023 
                 
Consumer  $961,058   $1,646,128   $3,644,868   $5,056,648 
Communication   2,305,316    492,439    6,068,421    1,950,826 
Defense   2,021,659    1,961,166    4,442,457    6,467,556 
Medical   2,578,322    2,500,792    6,972,517    7,702,227 
                     
Total  $7,866,355   $6,600,525   $21,128,263   $21,177,257 

 

 

SYNTEC OPTICS HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

v3.24.3
Inventory
9 Months Ended
Sep. 30, 2024
Inventory Disclosure [Abstract]  
Inventory

Note 4 — Inventory

 

Inventory consists of the following at September 30, 2024 and December 31, 2023:

 

Schedule of Inventory

   2024   2023 
         
Raw Materials  $636,870   $1,144,322 
Work-in-Process   7,214,241    4,818,156 
Finished Goods   309,688    188,251 
Inventory gross   8,160,799    6,150,729 
Less: Reserve for Obsolescence   599,816    316,620 
           
Inventory  $7,560,983   $5,834,109 

 

v3.24.3
Property and Equipment
9 Months Ended
Sep. 30, 2024
Property, Plant and Equipment [Abstract]  
Property and Equipment

Note 5 — Property and Equipment

 

Property and equipment consists of the following at September 30, 2024 and December 31, 2023:

 

Schedule of Property and Equipment

   2024   2023 
         
Machinery and Equipment  $34,564,371   $32,466,641 
Building and Leasehold Improvements   5,478,631    5,096,436 
Land   130,000    130,000 
Office Furniture and Equipment   2,295,749    2,292,995 
Tooling   103,310    103,310 
Vehicles   24,059    24,059 
Assets Not Placed in Service   7,020    260,000 
Property and Equipment, Gross    42,603,140    40,373,441 
Less: Accumulated Depreciation   30,165,788    29,272,389 
           
Property and Equipment, Net  $12,437,352   $11,101,052 

 

Depreciation expenses were approximately $722,000 and $692,000 for the three months ended September 30, 2024 and 2023, respectively and $2,078,000 and $2,096,000 for the nine months ended September 30, 2024 and 2023, respectively.

 

v3.24.3
Intangible Assets
9 Months Ended
Sep. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets

Note 6 — Intangible Assets

 

Intangible assets consist of the following at September 30, 2024 and December 31, 2023:

 

Schedule of Intangible Assets

   2024   2023 
         
Licenses  $300,000   $300,000 
Total identifiable intangible assets   300,000    300,000 
Less: Accumulated Amortization   50,000    5,000 
           
Intangible Assets, Net  $250,000   $295,000 

 

Amortization expense for acquired finite-lived intangibles was $15,000 and $-0- for the three months ended September 30, 2024 and 2023, respectively and $45,000 and $-0- for the nine months ended September 30, 2024 and 2023. Expected future amortization expense of acquired finite-lived intangible assets as of September 30, 2024, is as follows:

 

Schedule of Expected Future Amortization Expenses of Acquired Finite-Lived Intangible Assets

      
December 31, 2024  $15,000 
2025   60,000 
2026   60,000 
2027   60,000 
2028   55,000 
      
Total  $250,000 

 

 

SYNTEC OPTICS HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

v3.24.3
Line of Credit
9 Months Ended
Sep. 30, 2024
Line of Credit Facility [Abstract]  
Line of Credit

Note 7 — Line of Credit

 

The Company has a line of credit available in the amount of $10,000,000 with M&T Bank (the “Credit Agreement”). Borrowings may be made against the line of credit as Secured Overnight Financing Rate (SOFR) Loans. The weighted average rate on outstanding borrowings as of September 30, 2024 was 7.31%. As of September 30, 2024 and December 31, 2023, the Company had $6,063,863 and $6,537,592, respectively, outstanding under the line of credit facility.

 

The Credit Agreement contains customary covenants and restrictions on the Company’s ability to engage in certain activities and financial covenants requiring the Company to maintain certain financial ratios. At September 30, 2024, the Company was not in compliance with the minimum fixed charge coverage ratio and maximum total leverage ratio as defined in the Credit Agreement.  On November 12, 2024, the Company obtained a waiver with respect to the Credit Agreement, pursuant to which the sections of the agreement mentioned above are waived for the period ending September 30, 2024. The waiver document is also subject to a forthcoming amendment to the credit agreement which will reduce our available line of credit from $10,000,000 to $8,000,000, increase our applicable interest margin from 2.25% to 3.00% and may include other amendments desired by the lender.

 

v3.24.3
Long-Term Debt
9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Long-Term Debt

Note 8 — Long-Term Debt

 

Long-term debt consists of the following at September 30, 2024 and December 31, 2023:

 

   2024   2023 
         
The Company entered into a $863,607 mortgage note payable 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.  $845,931   $- 
           
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.   216,320    - 
           
The Company entered into a $1,775,000 term note payable with M&T Bank, requiring monthly principal installments of $34,886 plus interest at a fixed rate of 6.59%. The note matures in November 2028.   1,489,935    1,722,626 
           
The Company entered into a $1,064,000 term note payable with the U.S. Small Business Administration, requiring monthly installments of $6,652, including fees and interest at a fixed rate of 2.22%. The note matures in June 2036. The note is secured by certain assets of the Company and a personal guaranty of the Company’s stockholder.   680,719    718,441 
           
Total Long-Term Debt   3,232,905    2,441,067 
           
Less: Unamortized Debt Issuance Costs   73,009    53,156 
           
Long-Term Debt, Less Unamortized Debt Issuance Costs   3,159,896    2,387,911 
           
Less: Current Maturities   461,510    362,972 
           
Long-Term Debt  $2,698,386   $2,024,939 

 

At September 30, 2024, the future debt maturities are as follows:

 

      
December 31, 2024 (remainder of year)  $112,563 
2025   468,611 
2026   497,991 
2027   529,310 
2028   490,302 
Thereafter   1,134,128 
      
Total  $3,232,905 

 

 

SYNTEC OPTICS HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

v3.24.3
Retirement Plan
9 Months Ended
Sep. 30, 2024
Retirement Benefits [Abstract]  
Retirement Plan

Note 9 — Retirement Plan

 

The Company maintains a 401(k) retirement plan covering eligible employees of the Company and its affiliate. Under the plan, participants may defer a percentage of their annual compensation, with Syntec Optics matching 50% of employee contributions not to exceed 6% of annual compensation. Total contributions for the Company for the three months ended September 30, 2024 and 2023 amounted to $52,000 and $40,000, respectively, and for the nine months ended September 30, 2024 and 2023 were approximately $147,000 and $135,000, respectively.

 

v3.24.3
Income Taxes
9 Months Ended
Sep. 30, 2024
Income Tax Disclosure [Abstract]  
Income Taxes

Note 10 — Income Taxes

 

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

 

The effective income tax rate was 29.17% and 12.52% for the nine months ended September 30, 2024 and 2023, respectively. The effective tax rate for the nine months ended September 30, 2024 and 2023 does not include any discrete tax benefits.

 

v3.24.3
Leases
9 Months Ended
Sep. 30, 2024
Leases  
Leases

Note 11 — Leases

 

During 2024, the Company has entered into finance lease agreements for equipment utilized in its manufacturing facility. During 2022, the Company signed a five-year vehicle operating lease. As of December 31, 2023, the operating lease has been paid off.

 

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

 

   September 30, 2024   September 30, 2023   September 30, 2024   September 30, 2023 
  Three Months Ended   Nine Months Ended 
   September 30, 2024   September 30, 2023   September 30, 2024   September 30, 2023 
Operating lease cost  $-   $4,236   $-   $12,708 
Finance Lease Cost:                    
Amortization of assets   43,794    -    43,794    - 
Interest on liabilities   33,007    -    33,007    - 
                     
Total lease cost  $76,801   $4,236   $76,801   $12,708 

 

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

 

   September 30, 2024   September 30, 2023   September 30, 2024   September 30, 2023 
   Three Months Ended   Nine Months Ended 
   September 30, 2024   September 30, 2023   September 30, 2024   September 30, 2023 
Cash paid for amounts included in measurement of lease obligations:                    
Operating cash flows from operating leases  $           -   $      4,236   $           -   $   12,708 
Operating cash flows from finance leases   33,007    -    33,007    - 
Financing cash flows from finance leases   87,084    -    87,084    - 

 

The following table summarizes weighted average remaining lease term and discount rates as of September 30, 2024, and December 31, 2023:

 

   2024   2023 
Weighted average remaining lease term (years)          
Operating leases   N/A    N/A 
Finance leases   5.25    N/A 
Weighted average discount rate          
Operating leases   N/A    N/A 
Finance leases   8.40%   N/A 

 

 

Future maturities of our lease liabilities are as follows as of September 30:

 

      
2024 (remainder of year)  $6,596 
2025   432,009 
2026   513,525 
2027   513,525 
2028   513,525 
Thereafter   513,506 
Total Undiscounted Lease Obligations   2,492,686 
Less: Imputed Interests   419,700 
      
Present Value of Lease Obligations  $2,072,986 

 

v3.24.3
Warrants
9 Months Ended
Sep. 30, 2024
Warrants  
Warrants

Note 12 — Warrants

 

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 Company’s 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 for the nine months ended September 30, 2024 or 2023.

 

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 Company’s warrants from January 1, 2024 to September 30, 2024:

 

   Common Stock Warrants 
     
Warrants outstanding, January 1, 2024   14,107,989 
Warrants exercised   - 
Assumed in merger   14,107,989 
Exercised subsequent to merger   - 
Warrants outstanding, September 30, 2024   14,107,989 

 

The following tables presents a roll-forward of the Company’s warrants from January 1, 2023 to September 30, 2023:

 

   Common Stock Warrants 
     
**Warrants outstanding, January 1, 2023   - 
Assumed in merger   14,107,989 
Exercised subsequent to merger   - 
Warrants outstanding, September 30, 2023   14,107,989 

 

 

SYNTEC OPTICS HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

v3.24.3
Common Stock
9 Months Ended
Sep. 30, 2024
Equity [Abstract]  
Common Stock

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 September 30, 2024 and December 31, 2023, there were 36,688,266 shares issued and outstanding and no dividends on common stock had been declared by the Company.

 

As of September 30, 2024 and December 31, 2023, the Company had reserved shares of common stock for issuance as follows:

 

   2024   2023 
         
Common stock outstanding   36,688,266    36,688,266 
Warrants outstanding   14,107,989    14,107,989 
Contingent earnout shares   26,000,000    26,000,000 
Shares available for future issuance (1)   4,773,971    4,773,971 
Total   81,570,226    81,570,226 

 

(1) Refer to Stock Incentive Plan amendment at Note 19

 

v3.24.3
Stock-based Compensation
9 Months Ended
Sep. 30, 2024
Share-Based Payment Arrangement [Abstract]  
Stock-based Compensation

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 2,773,972 shares of the Syntec Optics common stock (“Common Stock”) will initially be reserved for issuance under the 2023 Incentive Plan, and additional shares will become available for issuance under the 2023 Incentive Plan each year as described below under “Aggregate Share Limit.” Our Board of Directors and stockholders have approved the 2023 Incentive Plan at the annual meeting held on October 31, 2023.

 

The Company 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. 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.

 

As of September 30, 2024, there were 4,773,971 shares of unissued authorized and available for future awards under the plans.

 

v3.24.3
Income (Loss) Per Share
9 Months Ended
Sep. 30, 2024
Net Income (Loss) per Common Share  
Income (Loss) Per Share

Note 15 — Income (Loss) Per Share

 

The following table sets forth the information needed to compute basic and diluted (loss) earnings per share for the three and nine months ended September 30, 2024 and 2023:

 

   September 30, 2024   September 30, 2023   September 30, 2024   September 30, 2023 
   Three Months Ended   Nine Months Ended 
   September 30, 2024   September 30, 2023   September 30, 2024   September 30, 2023 
Basic and diluted net income (loss) per share                    
Numerator:                    
Net income (loss)  $(13,289)  $353,980   $(940,589)  $974,767 
                     
Denominator                    
Weighted-average shares outstanding   36,688,266    31,600,000    36,688,266    31,600,000 
Basic and diluted net income (loss) per share  $(0.00)  $0.01   $(0.03)  $0.03 

 

v3.24.3
Commitments and Contingencies
9 Months Ended
Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

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 Company’s financial position or results of operations.

 

v3.24.3
Significant Customers
9 Months Ended
Sep. 30, 2024
Risks and Uncertainties [Abstract]  
Significant Customers

Note 17 — Significant Customers

 

For the three months ended September 30, 2024, the Company generated 53% of revenues from three customers. These three customers are in different end-markets utilizing diverse manufacturing capabilities from the Company. The outstanding accounts receivable due from these customers were approximately $3,622,000 as of September 30, 2024.

 

For the three months ended September 30, 2023, the Company generated 41% of revenues from two customers. These two customers are in different end-markets utilizing diverse manufacturing capabilities from the Company. The outstanding accounts receivable due from these customers were approximately $3,148,000 as of September 30, 2023.

 

For the nine months ended September 30, 2024, the Company generated 53% of revenues from three customers. These three customers are in different end-markets utilizing diverse manufacturing capabilities from the Company. The outstanding accounts receivable due from these customers were approximately $3,622,000 as of September 30, 2024.

 

For the nine months ended September 30, 2023, the Company generated 41% of revenues from two customers. These two customers are in different end-markets utilizing diverse manufacturing capabilities from the Company. The outstanding accounts receivable due from these customers were approximately $3,148,000 as of September 30, 2023.

 

v3.24.3
Subsequent Events
9 Months Ended
Sep. 30, 2024
Subsequent Events [Abstract]  
Subsequent Events

Note 18 — Subsequent Events

 

The Company evaluated subsequent events and transactions that occurred after the interim balance sheet date up to the date that the accompanying interim unaudited condensed consolidated financial statements were issued. Based upon the review, other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the interim unaudited condensed consolidated financial statements.

 

On October 1, 2024, a payment of $310,000 became due related to the acquisition of equipment and an intangible asset recorded on the balance sheet as of September 30, 2024. This payment was not made by the due date due to ongoing negotiations with the counterparty regarding certain terms of the contract.

 

The contract stipulates that if the payment is not made, the counterparty has the right to reclaim the rights to both the equipment and intangible asset. However, management is in discussions with the counterparty and believes that the payment will be made in the near future without consequence to the rights of the equipment or intangible asset.

 

As of the date of this filing, management does not believe that an impairment of the equipment or intangible asset is necessary, and no adjustments have been made to the carrying value of the assets on the balance sheet. Management will continue to monitor the situation and will assess the implications on the financial statements as additional information becomes available.

v3.24.3
Summary of Significant Accounting Policies (Policies)
9 Months Ended
Sep. 30, 2024
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

 

The accompanying interim unaudited condensed consolidated financial statements have been prepared by the Company in United States (“U.S.”) dollars and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”), the instructions to Form 10-Q and the provisions of Regulation S-X pertaining to interim financial statements. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted. The interim unaudited condensed consolidated financial statements and notes included in this report should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. In the opinion of management, these interim unaudited condensed consolidated financial statements include all adjustments and accruals of a normal and recurring nature necessary to fairly state the results of the interim periods presented. The results for interim periods are not necessarily indicative of results to be expected for the full year or for any future periods.

 

Principles of Consolidation

Principles of Consolidation

 

The accompanying interim unaudited condensed consolidated financial statements include the accounts of Syntec Optics Holdings, Inc. and its wholly owned subsidiary, Syntec Optics. The interim unaudited condensed consolidated financial statements also include the accounts of ELR Associates, LLC (“ELR”), a variable interest entity wherein the Company is the primary beneficiary. Syntec Optic’s variable interest in ELR is the result of providing a guaranty of payment for ELR’s mortgage on the manufacturing facility used exclusively by Syntec Optics. All significant intercompany accounts and transactions have been eliminated in consolidation.

 

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

 

In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) 2016-13 – Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This update requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Since June 2016, the FASB issued clarifying updates to the new standard including changing the effective date for smaller reporting companies. The guidance is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2016-13 on January 1, 2023. The adoption of ASU 2016-13 did not have a material impact on its interim unaudited condensed consolidated financial statements.

 

Recent Accounting Pronouncements

Recent Accounting Pronouncements

 

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 clarifies or improves financial reporting by requiring disclosure of incremental segment information. The amendments require disclosure, on an annual and interim basis for all public entities, of significant segment expenses included in segment profit or loss, an amount and description of “other segment items” included in segment profit or loss, and an explanation of how reported segment profit or loss is assessed and allocated. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the timing and impacts of the adoption of this ASU.

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity’s 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 will be effective for the annual period ending December 31, 2025. The Company is currently evaluating the timing and impacts of adoption of this ASU.

v3.24.3
Revenue Recognition (Tables)
9 Months Ended
Sep. 30, 2024
Revenue from Contract with Customer [Abstract]  
Schedule of Disaggregated Revenues

The following table disaggregates revenue by revenue recognition methodologies as outlined above for the three and nine months ended September 30:

 

Schedule of Disaggregated Revenues

                 
   Three Months Ended   Nine Months Ended 
   September 30, 2024   September 30, 2023   September 30, 2024   September 30, 2023 
                 
Products  $7,807,975   $6,257,407   $20,690,178   $18,529,993 
Custom Tooling   15,443    211,350    394,148    1,325,411 
Non-Recurring Engineering   42,937    131,768    43,937    1,321,853 
                     
Total  $7,866,355   $6,600,525   $21,128,263   $21,177,257 

 

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

 

                 
   Three Months Ended   Nine Months Ended 
   September 30, 2024   September 30, 2023   September 30, 2024   September 30, 2023 
                 
Consumer  $961,058   $1,646,128   $3,644,868   $5,056,648 
Communication   2,305,316    492,439    6,068,421    1,950,826 
Defense   2,021,659    1,961,166    4,442,457    6,467,556 
Medical   2,578,322    2,500,792    6,972,517    7,702,227 
                     
Total  $7,866,355   $6,600,525   $21,128,263   $21,177,257 
v3.24.3
Inventory (Tables)
9 Months Ended
Sep. 30, 2024
Inventory Disclosure [Abstract]  
Schedule of Inventory

Inventory consists of the following at September 30, 2024 and December 31, 2023:

 

Schedule of Inventory

   2024   2023 
         
Raw Materials  $636,870   $1,144,322 
Work-in-Process   7,214,241    4,818,156 
Finished Goods   309,688    188,251 
Inventory gross   8,160,799    6,150,729 
Less: Reserve for Obsolescence   599,816    316,620 
           
Inventory  $7,560,983   $5,834,109 
v3.24.3
Property and Equipment (Tables)
9 Months Ended
Sep. 30, 2024
Property, Plant and Equipment [Abstract]  
Schedule of Property and Equipment

Property and equipment consists of the following at September 30, 2024 and December 31, 2023:

 

Schedule of Property and Equipment

   2024   2023 
         
Machinery and Equipment  $34,564,371   $32,466,641 
Building and Leasehold Improvements   5,478,631    5,096,436 
Land   130,000    130,000 
Office Furniture and Equipment   2,295,749    2,292,995 
Tooling   103,310    103,310 
Vehicles   24,059    24,059 
Assets Not Placed in Service   7,020    260,000 
Property and Equipment, Gross    42,603,140    40,373,441 
Less: Accumulated Depreciation   30,165,788    29,272,389 
           
Property and Equipment, Net  $12,437,352   $11,101,052 
v3.24.3
Intangible Assets (Tables)
9 Months Ended
Sep. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Intangible Assets

Intangible assets consist of the following at September 30, 2024 and December 31, 2023:

 

Schedule of Intangible Assets

   2024   2023 
         
Licenses  $300,000   $300,000 
Total identifiable intangible assets   300,000    300,000 
Less: Accumulated Amortization   50,000    5,000 
           
Intangible Assets, Net  $250,000   $295,000 
Schedule of Expected Future Amortization Expenses of Acquired Finite-Lived Intangible Assets

Schedule of Expected Future Amortization Expenses of Acquired Finite-Lived Intangible Assets

      
December 31, 2024  $15,000 
2025   60,000 
2026   60,000 
2027   60,000 
2028   55,000 
      
Total  $250,000 
v3.24.3
Long-Term Debt (Tables)
9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Schedule of Long Term Debt Maturities

Long-term debt consists of the following at September 30, 2024 and December 31, 2023:

 

   2024   2023 
         
The Company entered into a $863,607 mortgage note payable 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.  $845,931   $- 
           
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.   216,320    - 
           
The Company entered into a $1,775,000 term note payable with M&T Bank, requiring monthly principal installments of $34,886 plus interest at a fixed rate of 6.59%. The note matures in November 2028.   1,489,935    1,722,626 
           
The Company entered into a $1,064,000 term note payable with the U.S. Small Business Administration, requiring monthly installments of $6,652, including fees and interest at a fixed rate of 2.22%. The note matures in June 2036. The note is secured by certain assets of the Company and a personal guaranty of the Company’s stockholder.   680,719    718,441 
           
Total Long-Term Debt   3,232,905    2,441,067 
           
Less: Unamortized Debt Issuance Costs   73,009    53,156 
           
Long-Term Debt, Less Unamortized Debt Issuance Costs   3,159,896    2,387,911 
           
Less: Current Maturities   461,510    362,972 
           
Long-Term Debt  $2,698,386   $2,024,939 
Schedule of Long Term Future Debt Maturities

At September 30, 2024, the future debt maturities are as follows:

 

      
December 31, 2024 (remainder of year)  $112,563 
2025   468,611 
2026   497,991 
2027   529,310 
2028   490,302 
Thereafter   1,134,128 
      
Total  $3,232,905 
v3.24.3
Leases (Tables)
9 Months Ended
Sep. 30, 2024
Leases  
Schedule of Operating Lease and Finance Lease Costs

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

 

   September 30, 2024   September 30, 2023   September 30, 2024   September 30, 2023 
  Three Months Ended   Nine Months Ended 
   September 30, 2024   September 30, 2023   September 30, 2024   September 30, 2023 
Operating lease cost  $-   $4,236   $-   $12,708 
Finance Lease Cost:                    
Amortization of assets   43,794    -    43,794    - 
Interest on liabilities   33,007    -    33,007    - 
                     
Total lease cost  $76,801   $4,236   $76,801   $12,708 
Schedule of cash flow information related to leases

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

 

   September 30, 2024   September 30, 2023   September 30, 2024   September 30, 2023 
   Three Months Ended   Nine Months Ended 
   September 30, 2024   September 30, 2023   September 30, 2024   September 30, 2023 
Cash paid for amounts included in measurement of lease obligations:                    
Operating cash flows from operating leases  $           -   $      4,236   $           -   $   12,708 
Operating cash flows from finance leases   33,007    -    33,007    - 
Financing cash flows from finance leases   87,084    -    87,084    - 
Schedule of Weighted Average Remaining Lease Term

The following table summarizes weighted average remaining lease term and discount rates as of September 30, 2024, and December 31, 2023:

 

   2024   2023 
Weighted average remaining lease term (years)          
Operating leases   N/A    N/A 
Finance leases   5.25    N/A 
Weighted average discount rate          
Operating leases   N/A    N/A 
Finance leases   8.40%   N/A 
Schedule of Future Maturities of Lease Liabilities

Future maturities of our lease liabilities are as follows as of September 30:

 

      
2024 (remainder of year)  $6,596 
2025   432,009 
2026   513,525 
2027   513,525 
2028   513,525 
Thereafter   513,506 
Total Undiscounted Lease Obligations   2,492,686 
Less: Imputed Interests   419,700 
      
Present Value of Lease Obligations  $2,072,986 
v3.24.3
Warrants (Tables)
9 Months Ended
Sep. 30, 2024
Warrants  
Schedule of Warrant

The following tables presents a roll-forward of the Company’s warrants from January 1, 2024 to September 30, 2024:

 

   Common Stock Warrants 
     
Warrants outstanding, January 1, 2024   14,107,989 
Warrants exercised   - 
Assumed in merger   14,107,989 
Exercised subsequent to merger   - 
Warrants outstanding, September 30, 2024   14,107,989 

 

The following tables presents a roll-forward of the Company’s warrants from January 1, 2023 to September 30, 2023:

 

   Common Stock Warrants 
     
**Warrants outstanding, January 1, 2023   - 
Assumed in merger   14,107,989 
Exercised subsequent to merger   - 
Warrants outstanding, September 30, 2023   14,107,989 
v3.24.3
Common Stock (Tables)
9 Months Ended
Sep. 30, 2024
Equity [Abstract]  
Schedule of Reserved shares of common stock

As of September 30, 2024 and December 31, 2023, the Company had reserved shares of common stock for issuance as follows:

 

   2024   2023 
         
Common stock outstanding   36,688,266    36,688,266 
Warrants outstanding   14,107,989    14,107,989 
Contingent earnout shares   26,000,000    26,000,000 
Shares available for future issuance (1)   4,773,971    4,773,971 
Total   81,570,226    81,570,226 

 

(1) Refer to Stock Incentive Plan amendment at Note 19
v3.24.3
Income (Loss) Per Share (Tables)
9 Months Ended
Sep. 30, 2024
Net Income (Loss) per Common Share  
Schedule of Basic And Diluted (loss) Earnings Per Share

The following table sets forth the information needed to compute basic and diluted (loss) earnings per share for the three and nine months ended September 30, 2024 and 2023:

 

   September 30, 2024   September 30, 2023   September 30, 2024   September 30, 2023 
   Three Months Ended   Nine Months Ended 
   September 30, 2024   September 30, 2023   September 30, 2024   September 30, 2023 
Basic and diluted net income (loss) per share                    
Numerator:                    
Net income (loss)  $(13,289)  $353,980   $(940,589)  $974,767 
                     
Denominator                    
Weighted-average shares outstanding   36,688,266    31,600,000    36,688,266    31,600,000 
Basic and diluted net income (loss) per share  $(0.00)  $0.01   $(0.03)  $0.03 
v3.24.3
Schedule of Disaggregated Revenues (Details) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Disaggregation of Revenue [Line Items]        
Total $ 7,866,355 $ 6,600,525 $ 21,128,263 $ 21,177,257
Consumer [Member]        
Disaggregation of Revenue [Line Items]        
Total 961,058 1,646,128 3,644,868 5,056,648
Communication [Member]        
Disaggregation of Revenue [Line Items]        
Total 2,305,316 492,439 6,068,421 1,950,826
Defense [Member]        
Disaggregation of Revenue [Line Items]        
Total 2,021,659 1,961,166 4,442,457 6,467,556
Medical [Member]        
Disaggregation of Revenue [Line Items]        
Total 2,578,322 2,500,792 6,972,517 7,702,227
Products [Member]        
Disaggregation of Revenue [Line Items]        
Total 7,807,975 6,257,407 20,690,178 18,529,993
Custom Tooling [Member]        
Disaggregation of Revenue [Line Items]        
Total 15,443 211,350 394,148 1,325,411
Non-Recurring Engineering [Member]        
Disaggregation of Revenue [Line Items]        
Total $ 42,937 $ 131,768 $ 43,937 $ 1,321,853
v3.24.3
Revenue Recognition (Details Narrative) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Jan. 01, 2024
Dec. 31, 2023
Jan. 01, 2023
Revenue from Contract with Customer [Abstract]              
Accounts receivable net $ 5,821,986   $ 5,821,986   $ 6,800,064 $ 6,800,064 $ 5,925,724
Deferred revenue         $ 0   $ 348,095
Revenue 0 $ 18,750 0 $ 460,865      
Capitalized contract cost $ 0   $ 0     $ 0  
v3.24.3
Schedule of Inventory (Details) - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Inventory Disclosure [Abstract]    
Raw Materials $ 636,870 $ 1,144,322
Work-in-Process 7,214,241 4,818,156
Finished Goods 309,688 188,251
Inventory gross 8,160,799 6,150,729
Less: Reserve for Obsolescence 599,816 316,620
Inventory $ 7,560,983 $ 5,834,109
v3.24.3
Schedule of Property and Equipment (Details) - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Property, Plant and Equipment [Line Items]    
Property and Equipment, Gross  $ 42,603,140 $ 40,373,441
Less: Accumulated Depreciation 30,165,788 29,272,389
Property and Equipment, Net 12,437,352 11,101,052
Machinery and Equipment [Member]    
Property, Plant and Equipment [Line Items]    
Property and Equipment, Gross  34,564,371 32,466,641
Land, Buildings and Improvements [Member]    
Property, Plant and Equipment [Line Items]    
Property and Equipment, Gross  5,478,631 5,096,436
Land [Member]    
Property, Plant and Equipment [Line Items]    
Property and Equipment, Gross  130,000 130,000
Office Equipment [Member]    
Property, Plant and Equipment [Line Items]    
Property and Equipment, Gross  2,295,749 2,292,995
Tooling [Member]    
Property, Plant and Equipment [Line Items]    
Property and Equipment, Gross  103,310 103,310
Vehicles [Member]    
Property, Plant and Equipment [Line Items]    
Property and Equipment, Gross  24,059 24,059
Assets Not Placed in Service [Member]    
Property, Plant and Equipment [Line Items]    
Property and Equipment, Gross  $ 7,020 $ 260,000
v3.24.3
Property and Equipment (Details Narrative) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Property, Plant and Equipment [Abstract]        
Depreciation and amortization $ 722,000 $ 692,000 $ 2,078,000 $ 2,096,000
v3.24.3
Schedule of Intangible Assets (Details) - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]    
Licenses $ 300,000 $ 300,000
Total identifiable intangible assets 300,000 300,000
Less: Accumulated Amortization 50,000 5,000
Intangible Assets, Net $ 250,000 $ 295,000
v3.24.3
Schedule of Expected Future Amortization Expenses of Acquired Finite-Lived Intangible Assets (Details) - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]    
December 31, 2024 $ 15,000  
2025 60,000  
2026 60,000  
2027 60,000  
2028 55,000  
Intangible Assets, Net $ 250,000 $ 295,000
v3.24.3
Intangible Assets (Details Narrative) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]        
Amortization expense of intangible assets $ 15,000 $ 0 $ 45,000 $ 0
v3.24.3
Line of Credit (Details Narrative) - USD ($)
9 Months Ended
Nov. 12, 2024
Sep. 30, 2024
Dec. 31, 2023
Line of Credit Facility [Line Items]      
Outstanding line of credit   $ 6,063,863 $ 6,537,592
Credit Agreement [Member]      
Line of Credit Facility [Line Items]      
Outstanding line of credit   6,063,863 $ 6,537,592
Credit Agreement [Member] | Subsequent Event [Member] | Maximum [Member]      
Line of Credit Facility [Line Items]      
Line of credit $ 10,000,000    
Line of credit, Interest margin 3.00%    
Credit Agreement [Member] | Subsequent Event [Member] | Minimum [Member]      
Line of Credit Facility [Line Items]      
Line of credit $ 8,000,000    
Line of credit, Interest margin 2.25%    
M&T Bank [Member] | Credit Agreement [Member]      
Line of Credit Facility [Line Items]      
Line of credit available amount   $ 10,000,000  
Line of credit interest rate   7.31%  
v3.24.3
Schedule of Long Term Debt Maturities (Details) - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Short-Term Debt [Line Items]    
Total Long-Term Debt $ 3,232,905 $ 2,441,067
Less: Unamortized Debt Issuance Costs 73,009 53,156
Long-Term Debt, Less Unamortized Debt Issuance Costs 3,159,896 2,387,911
Less: Current Maturities 461,510 362,972
Long-Term Debt 2,698,386 2,024,939
M&T Bank Term Note Payable [Member] | Notes Payable 1 [Member]    
Short-Term Debt [Line Items]    
Total Long-Term Debt 845,931
M&T Bank Term Note Payable [Member] | Notes Payable 2 [Member]    
Short-Term Debt [Line Items]    
Total Long-Term Debt 216,320
M&T Bank Term Note Payable [Member] | Notes Payable 3 [Member]    
Short-Term Debt [Line Items]    
Total Long-Term Debt 1,489,935 1,722,626
US Small Business Administration Term Note Payable [Member] | Notes Payable 4 [Member]    
Short-Term Debt [Line Items]    
Total Long-Term Debt $ 680,719 $ 718,441
v3.24.3
Schedule of Long Term Debt Maturities (Details) (Parenthetical)
9 Months Ended
Sep. 30, 2024
USD ($)
M&T Bank Term Note Payable [Member] | Notes Payable 1 [Member]  
Short-Term Debt [Line Items]  
Debt instrument face value $ 863,607
Principal installments $ 7,389
Interest rate percentage 6.13%
Maturity description The note matures in February 2029
M&T Bank Term Note Payable [Member] | Notes Payable 2 [Member]  
Short-Term Debt [Line Items]  
Debt instrument face value $ 236,781
Principal installments $ 3,385
Interest rate percentage 6.05%
Maturity description The note matures in March 2029
M&T Bank Term Note Payable [Member] | Notes Payable 3 [Member]  
Short-Term Debt [Line Items]  
Debt instrument face value $ 1,775,000
Principal installments $ 34,886
Interest rate percentage 6.59%
Maturity description The note matures in November 2028
US Small Business Administration Term Note Payable [Member] | Notes Payable 4 [Member]  
Short-Term Debt [Line Items]  
Debt instrument face value $ 1,064,000
Principal installments $ 6,652
Interest rate percentage 2.22%
Maturity description The note matures in June 2036
v3.24.3
Schedule of Long Term Future Debt Maturities (Details) - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Debt Disclosure [Abstract]    
December 31, 2024 (remainder of year) $ 112,563  
2025 468,611  
2026 497,991  
2027 529,310  
2028 490,302  
Thereafter 1,134,128  
Total $ 3,232,905 $ 2,441,067
v3.24.3
Retirement Plan (Details Narrative) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Retirement Benefits [Abstract]        
Retirement contribution, description     Under the plan, participants may defer a percentage of their annual compensation, with Syntec Optics matching 50% of employee contributions not to exceed 6% of annual compensation.  
Retirement contribution amount $ 52,000 $ 40,000 $ 147,000 $ 135,000
v3.24.3
Income Taxes (Details Narrative)
9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Income Tax Disclosure [Abstract]    
Effective income tax rate 29.17% 12.52%
v3.24.3
Schedule of Operating Lease and Finance Lease Costs (Details) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Leases        
Operating lease cost $ 4,236 $ 12,708
Finance Lease Cost:        
Amortization of assets 43,794 43,794
Interest on liabilities 33,007 33,007
Total lease cost $ 76,801 $ 4,236 $ 76,801 $ 12,708
v3.24.3
Schedule of cash flow information related to leases (Details) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Leases        
Operating cash flows from operating leases $ 4,236 $ 12,708
Operating cash flows from finance leases 33,007 33,007
Financing cash flows from finance leases $ 87,084 $ 87,084
v3.24.3
Schedule of Weighted Average Remaining Lease Term (Details)
Sep. 30, 2024
Leases  
Finance leases - Weighted average remaining lease term 5 years 3 months
Finance leases - Weighted average discount rate 8.40%
v3.24.3
Schedule of Future Maturities of Lease Liabilities (Details)
Sep. 30, 2024
USD ($)
Leases  
2024 (remainder of year) $ 6,596
2025 432,009
2026 513,525
2027 513,525
2028 513,525
Thereafter 513,506
Total Undiscounted Lease Obligations 2,492,686
Less: Imputed Interests 419,700
Present Value of Lease Obligations $ 2,072,986
v3.24.3
Schedule of Warrant (Details) - shares
9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Warrants outstanding, beginning balance 14,107,989  
Warrants outstanding, ending balance 14,107,989  
Common Stock [Member]    
Warrants outstanding, beginning balance 14,107,989
Warrant exercised  
Assumed in merger   14,107,989
Warrant exercised subsequent to merger  
Warrants outstanding, ending balance 14,107,989 14,107,989
v3.24.3
Warrants (Details Narrative) - $ / shares
Sep. 30, 2024
Dec. 31, 2023
Sep. 30, 2023
Dec. 31, 2022
Class of warrant or right outstanding 14,107,989 14,107,989    
Common Stock [Member]        
Warrant to purchase share 1      
Warrant exercise price $ 11.50      
Warrant price 0.01      
Share price $ 18.00      
Class of warrant or right outstanding 14,107,989 14,107,989 14,107,989
v3.24.3
Schedule of Reserved shares of common stock (Details) - shares
Sep. 30, 2024
Dec. 31, 2023
Equity [Abstract]    
Common stock outstanding 36,688,266 36,688,266
Warrants outstanding 14,107,989 14,107,989
Contingent earnout shares 26,000,000 26,000,000
Shares available for future issuance [1] 4,773,971 4,773,971
Total 81,570,226 81,570,226
[1] Refer to Stock Incentive Plan amendment at Note 19
v3.24.3
Common Stock (Details Narrative) - $ / shares
Sep. 30, 2024
Dec. 31, 2023
Class of Stock [Line Items]    
Common stock, shares outstanding 36,688,266 36,688,266
Common Class A [Member]    
Class of Stock [Line Items]    
CommonStock, shares authorized 121,000,000 121,000,000
Common stock, par value $ 0.0001 $ 0.0001
Common stock, shares issued 36,688,266 36,688,266
Common stock, shares outstanding 36,688,266 36,688,266
v3.24.3
Stock-based Compensation (Details Narrative) - shares
9 Months Ended
Sep. 30, 2024
Dec. 31, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Number of shares issued 2,000,000  
Performance based earnout description 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 $50.6 million based on the 2025 financial audit statement.  
Unissued authorized [1] 4,773,971 4,773,971
2023 Equity Incentive Plan [Member] | Maximum [Member]    
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Common Stock, Capital Shares Reserved for Future Issuance 2,773,972  
[1] Refer to Stock Incentive Plan amendment at Note 19
v3.24.3
Schedule of Basic And Diluted (loss) Earnings Per Share (Details) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Net Income (Loss) per Common Share        
Net income (loss) $ (13,289) $ 353,980 $ (940,589) $ 974,767
Weighted-average shares outstanding 36,688,266 31,600,000 36,688,266 31,600,000
Basic net income (loss) per share $ (0.00) $ 0.01 $ (0.03) $ 0.03
Diluted net income (loss) per share $ (0.00) $ 0.01 $ (0.03) $ 0.03
v3.24.3
Significant Customers (Details Narrative) - Revenue Benchmark [Member] - Customer Concentration Risk [Member] - Three Customers [Member] - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Concentration Risk [Line Items]        
Revenue percentage 53.00% 41.00% 53.00% 41.00%
Accounts receivable $ 3,622,000 $ 3,148,000 $ 3,622,000 $ 3,148,000
v3.24.3
Subsequent Events (Details Narrative)
Oct. 01, 2024
USD ($)
Subsequent Event [Member]  
Subsequent Event [Line Items]  
Payment on acquisition of equipment $ 310,000

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