# EDGAR Filing Document

**Accession Number:** 0001124796
**File Stem:** 0001124796-25-000154
**Filing Date:** 2025-11
**Character Count:** 123853
**Document Hash:** 2788085d776e9c1fcce7cf8251488c12
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001124796-25-000154.hdr.sgml**: 20251107

**ACCESSION NUMBER**: 0001124796-25-000154

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 84

**CONFORMED PERIOD OF REPORT**: 20250930

**FILED AS OF DATE**: 20251107

**DATE AS OF CHANGE**: 20251107

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** NLIGHT, INC.
- **CENTRAL INDEX KEY:** 0001124796
- **STANDARD INDUSTRIAL CLASSIFICATION:** SEMICONDUCTORS & RELATED DEVICES [3674]
- **ORGANIZATION NAME:** 04 Manufacturing
- **EIN:** 912066376
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38462
- **FILM NUMBER:** 251463228

**BUSINESS ADDRESS:**
- **STREET 1:** 4637 NW 18TH AVENUE
- **CITY:** CAMAS
- **STATE:** WA
- **ZIP:** 98607
- **BUSINESS PHONE:** 360-566-4460

**MAIL ADDRESS:**
- **STREET 1:** 4637 NW 18TH AVENUE
- **CITY:** CAMAS
- **STATE:** WA
- **ZIP:** 98607

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** NLIGHT PHOTONICS CORP
- **DATE OF NAME CHANGE:** 20000925

?xml version='1.0' encoding='ASCII'? lasr-20250930

**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 quarterly period ended September 30, 2025** 

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 **001-38462** 

**________________________________________________________**

**NLIGHT, INC.** 

(Exact name of Registrant as specified in its charter)

**________________________________________________________**

---

| | |
|:---|:---|
| **Delaware** | **91-2066376** |
| (State or other jurisdiction of<br>incorporation or organization) | (I.R.S. Employer<br>Identification Number) |

---

**4637 NW 18**<sup>th</sup> **Avenue** 

**Camas, Washington 98607** 

(Address of principal executive office, including zip code)

**(360) 566-4460** 

(Registrant's telephone number, including area code)

__________________________________________

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

---

| | | |
|:---|:---|:---|
| Title of Each Class | Trading Symbol | Name of Exchange on which Registered |
| **Common Stock, par value <br>$0.0001 per share** | **LASR** | **The Nasdaq Stock Market LLC** |

---

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. &nbsp;&nbsp;&nbsp;&nbsp;Yes ☒&nbsp;&nbsp;&nbsp;&nbsp;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). &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Yes ☒&nbsp;&nbsp;&nbsp;&nbsp;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 the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| 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.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ☐

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

As of November 5, 2025, the Registrant had 50,786,007 shares of common stock outstanding.

------

---

| | |
|:---|:---|
| **TABLE OF CONTENTS** | **TABLE OF CONTENTS** |
|  | Page |
| <u>[Part I. Financial Information](#iff01030735b746b1bd22284c43eacba9_16)</u> | <u>[1](#iff01030735b746b1bd22284c43eacba9_19)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 1. Unaudited Interim Financial Statements](#iff01030735b746b1bd22284c43eacba9_22)</u> | <u>[1](#iff01030735b746b1bd22284c43eacba9_19)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Balance Sheets: September 30, 2025 and December 31, 2024 (unaudited)](#iff01030735b746b1bd22284c43eacba9_31)</u> | <u>[1](#iff01030735b746b1bd22284c43eacba9_31)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Statements of Operations: Three and](#iff01030735b746b1bd22284c43eacba9_37)[Nine](#iff01030735b746b1bd22284c43eacba9_37)[Months Ended September 30, 2025 and 2024 (unaudited)](#iff01030735b746b1bd22284c43eacba9_37)</u> | <u>[2](#iff01030735b746b1bd22284c43eacba9_37)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Statements of Comprehensive Loss:](#iff01030735b746b1bd22284c43eacba9_43)[Three and](#iff01030735b746b1bd22284c43eacba9_37)[N](#iff01030735b746b1bd22284c43eacba9_37)[ine](#iff01030735b746b1bd22284c43eacba9_37)[Months Ended](#iff01030735b746b1bd22284c43eacba9_37)[September](#iff01030735b746b1bd22284c43eacba9_37)[30, 2025 and 2024](#iff01030735b746b1bd22284c43eacba9_37)[(unaudited)](#iff01030735b746b1bd22284c43eacba9_43)</u> | <u>[3](#iff01030735b746b1bd22284c43eacba9_43)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Statements of Stockholders' Equity:](#iff01030735b746b1bd22284c43eacba9_46)[Three and](#iff01030735b746b1bd22284c43eacba9_37)[Nine](#iff01030735b746b1bd22284c43eacba9_37)[Months Ended](#iff01030735b746b1bd22284c43eacba9_37)[September](#iff01030735b746b1bd22284c43eacba9_37)[30, 2025 and 2024](#iff01030735b746b1bd22284c43eacba9_37)[(unaudited)](#iff01030735b746b1bd22284c43eacba9_46)</u> | <u>[4](#iff01030735b746b1bd22284c43eacba9_52)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Consolidated Statements of Cash Flows:](#iff01030735b746b1bd22284c43eacba9_58)[Nine](#iff01030735b746b1bd22284c43eacba9_37)[Mo](#iff01030735b746b1bd22284c43eacba9_37)[nths Ended](#iff01030735b746b1bd22284c43eacba9_37)[Septe](#iff01030735b746b1bd22284c43eacba9_37)[mber](#iff01030735b746b1bd22284c43eacba9_37)[30, 2025 and 2024](#iff01030735b746b1bd22284c43eacba9_37)[(unaudited)](#iff01030735b746b1bd22284c43eacba9_58)</u> | <u>[6](#iff01030735b746b1bd22284c43eacba9_58)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Notes to Consolidated Financial Statements (unaudited)](#iff01030735b746b1bd22284c43eacba9_64)</u> | <u>[7](#iff01030735b746b1bd22284c43eacba9_64)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](#iff01030735b746b1bd22284c43eacba9_220)</u> | <u>[19](#iff01030735b746b1bd22284c43eacba9_220)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 3. Quantitative and Qualitative Disclosures About Market Risk](#iff01030735b746b1bd22284c43eacba9_238)</u> | <u>[28](#iff01030735b746b1bd22284c43eacba9_238)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 4. Controls and Procedures](#iff01030735b746b1bd22284c43eacba9_241)</u> | <u>[28](#iff01030735b746b1bd22284c43eacba9_241)</u> |
| <u>Part II. Other Information</u> | <u>[29](#iff01030735b746b1bd22284c43eacba9_280)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 1. Legal Proceedings](#iff01030735b746b1bd22284c43eacba9_283)</u> | <u>[30](#iff01030735b746b1bd22284c43eacba9_283)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 1A. Risk Factors](#iff01030735b746b1bd22284c43eacba9_286)</u> | <u>[30](#iff01030735b746b1bd22284c43eacba9_286)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 5. Other Information](#iff01030735b746b1bd22284c43eacba9_289)</u> | <u>[31](#iff01030735b746b1bd22284c43eacba9_289)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Item 6. Exhibits](#iff01030735b746b1bd22284c43eacba9_295)</u> | <u>[32](#iff01030735b746b1bd22284c43eacba9_295)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>[Signatures](#iff01030735b746b1bd22284c43eacba9_298)</u> | <u>[33](#iff01030735b746b1bd22284c43eacba9_298)</u> |

---

------

**PART I—FINANCIAL INFORMATION** 

**ITEM 1. FINANCIAL STATEMENTS**

**nLIGHT, Inc.**

Consolidated Balance Sheets

(In thousands)

(Unaudited)

---

| | | |
|:---|:---|:---|
| | **As of** | **As of** |
| | **September 30, 2025** | **December 31, 2024** |
| **Assets** | | |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $81108 | $65829 |
| &nbsp;&nbsp;&nbsp;&nbsp;Marketable securities | 34684 | 34868 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net of allowances of $670 and $1,800 | 49317 | 34895 |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventory | 51457 | 40800 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 11826 | 17697 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current assets | 228392 | 194089 |
| Restricted cash | 320 | 259 |
| Lease right-of-use assets | 10143 | 10822 |
| Property, plant and equipment, net | 44233 | 46937 |
| Intangible assets, net | 436 | 833 |
| Goodwill | 12448 | 12354 |
| Other assets, net | 2721 | 4947 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total assets | $298693 | $270241 |
| **Liabilities and Stockholders' Equity** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Accounts payable | $16899 | $15076 |
| &nbsp;&nbsp;&nbsp;&nbsp; Accrued liabilities | 18987 | 13268 |
| &nbsp;&nbsp;&nbsp;&nbsp; Deferred revenues | 2345 | 3577 |
| &nbsp;&nbsp;&nbsp;&nbsp; Current portion of lease liabilities | 2306 | 2314 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current liabilities | 40537 | 34235 |
| Line of credit | 20000 |  |
| Non-current income taxes payable | 5708 | 5541 |
| Long-term lease liabilities | 9003 | 9819 |
| Other long-term liabilities | 4952 | 4216 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities | 80200 | 53811 |
| Stockholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock - $0.0001 par value; 190,000 shares authorized, 50,784 and 48,948 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively | 16 | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp; Additional paid-in capital | 565150 | 544842 |
| &nbsp;&nbsp;&nbsp;&nbsp; Accumulated other comprehensive loss | (3019) | (3332) |
| &nbsp;&nbsp;&nbsp;&nbsp; Accumulated deficit | (343654) | (325096) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total stockholders' equity | 218493 | 216430 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities and stockholders' equity | $298693 | $270241 |

---

See accompanying notes to consolidated financial statements.

------

**nLIGHT, Inc.**

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| Revenue: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Products | $47608 | $41132 | $124110 | $104960 |
| &nbsp;&nbsp;&nbsp;&nbsp;Development | 19134 | 14997 | 56035 | 46207 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenue | 66742 | 56129 | 180145 | 151167 |
| Cost of revenue: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Products | 28086 | 29286 | 76915 | 76528 |
| &nbsp;&nbsp;&nbsp;&nbsp;Development | 17903 | 14293 | 50221 | 42751 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total cost of revenue | 45989 | 43579 | 127136 | 119279 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit | 20753 | 12550 | 53009 | 31888 |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Research and development | 11534 | 11328 | 33920 | 33723 |
| &nbsp;&nbsp;&nbsp;&nbsp;Sales, general, and administrative | 14785 | 13021 | 38501 | 37372 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restructuring | 1733 |  | 1733 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 28052 | 24349 | 74154 | 71095 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss from operations | (7299) | (11799) | (21145) | (39207) |
| Other income: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest income | 1079 | 421 | 3875 | 1375 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (317) | (27) | (753) | (67) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other (expense) income, net | (64) | 1331 | (108) | 2594 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss before income taxes | (6601) | (10074) | (18131) | (35305) |
| Income tax expense | 273 | 261 | 427 | 525 |
| Net loss | $(6874) | $(10335) | $(18558) | $(35830) |
| Net loss per share, basic and diluted | $(0.14) | $(0.21) | $(0.37) | $(0.75) |
| Shares used in per share calculations, basic and diluted | 50288 | 48133 | 49658 | 47679 |

---

See accompanying notes to consolidated financial statements.

------

**nLIGHT, Inc.**

Consolidated Statements of Comprehensive Loss

(In thousands)

(Unaudited)

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended<br>September 30,** | **Nine Months Ended<br>September 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| Net loss | $(6874) | $(10335) | $(18558) | $(35830) |
| Other comprehensive income (loss), net of tax: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency translation adjustments | (45) | 335 | 1026 | 47 |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in unrealized gains on available-for-sale securities | 16 | (216) | (713) | 42 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comprehensive loss | $(6903) | $(10216) | $(18245) | $(35741) |

---

See accompanying notes to consolidated financial statements.

------

**nLIGHT, Inc.**

Consolidated Statements of Stockholders' Equity

(In thousands)

(Unaudited)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30, 2025** | **Three Months Ended September 30, 2025** | **Three Months Ended September 30, 2025** | **Three Months Ended September 30, 2025** | **Three Months Ended September 30, 2025** | **Three Months Ended September 30, 2025** |
| | **Common stock** | **Common stock** | **Additional paid-in capital** | **Accumulated other comprehensive loss** | **Accumulated deficit** | **Total stockholders' equity** |
| | **Shares** | **Amount** | **Additional paid-in capital** | **Accumulated other comprehensive loss** | **Accumulated deficit** | **Total stockholders' equity** |
| **Balance, June 30, 2025** | 49883 | $16 | $555755 | $(2990) | $(336780) | $216001 |
| Net loss |  |  |  |  | (6874) | (6874) |
| Issuance of common stock pursuant to exercise of stock options | 24 |  | 34 |  |  | 34 |
| Issuance of common stock pursuant to vesting of restricted stock awards and units, net of stock withheld for tax | 877 |  | (1) |  |  | (1) |
| Stock-based compensation |  |  | 9362 |  |  | 9362 |
| Change in unrealized gains on available-for-sale securities |  |  |  | 16 |  | 16 |
| Cumulative translation adjustment, net of tax |  |  |  | (45) |  | (45) |
| **Balance, September 30, 2025** | 50784 | $16 | $565150 | $(3019) | $(343654) | $218493 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** |
| | **Common stock** | **Common stock** | **Additional paid-in capital** | **Accumulated other comprehensive loss** | **Accumulated deficit** | **Total stockholders' equity** |
| | **Shares** | **Amount** | **Additional paid-in capital** | **Accumulated other comprehensive loss** | **Accumulated deficit** | **Total stockholders' equity** |
| **Balance, December 31, 2024** | 48948 | $16 | $544842 | $(3332) | $(325096) | $216430 |
| Net loss |  |  |  |  | (18558) | (18558) |
| Issuance of common stock pursuant to exercise of stock options | 209 |  | 196 |  |  | 196 |
| Issuance of common stock pursuant to vesting of restricted stock awards and units, net of stock withheld for tax | 1471 |  | (3062) |  |  | (3062) |
| Issuance of common stock under the Employee Stock Purchase Plan | 156 |  | 1385 |  |  | 1385 |
| Stock-based compensation |  |  | 21789 |  |  | 21789 |
| Change in unrealized gains on available-for-sale securities |  |  |  | (713) |  | (713) |
| Cumulative translation adjustment, net of tax |  |  |  | 1026 |  | 1026 |
| **Balance, September 30, 2025** | 50784 | $16 | $565150 | $(3019) | $(343654) | $218493 |

---

------

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30, 2024** | **Three Months Ended September 30, 2024** | **Three Months Ended September 30, 2024** | **Three Months Ended September 30, 2024** | **Three Months Ended September 30, 2024** | **Three Months Ended September 30, 2024** |
| | **Common stock** | **Common stock** | **Additional paid-in capital** | **Accumulated other comprehensive loss** | **Accumulated deficit** | **Total stockholders' equity** |
| | **Shares** | **Amount** | **Additional paid-in capital** | **Accumulated other comprehensive loss** | **Accumulated deficit** | **Total stockholders' equity** |
| **Balance, June 30, 2024** | 48099 | $16 | $531822 | $(2507) | $(289799) | $239532 |
| Net loss |  |  |  |  | (10335) | (10335) |
| Issuance of common stock pursuant to exercise of stock options | 105 |  | 84 |  |  | 84 |
| Issuance of common stock pursuant to vesting of restricted stock awards and units, net of stock withheld for tax | 139 |  | (657) |  |  | (657) |
| Stock-based compensation |  |  | 6527 |  |  | 6527 |
| Change in unrealized gains on available-for-sale securities |  |  |  | (216) |  | (216) |
| Cumulative translation adjustment, net of tax |  |  |  | 335 |  | 335 |
| **Balance, September 30, 2024** | 48343 | 16 | 537776 | (2388) | (300134) | 235270 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** |
| | **Common stock** | **Common stock** | **Additional paid-in capital** | **Accumulated other comprehensive loss** | **Accumulated deficit** | **Total stockholders' equity** |
| | **Shares** | **Amount** | **Additional paid-in capital** | **Accumulated other comprehensive loss** | **Accumulated deficit** | **Total stockholders' equity** |
| **Balance, December 31, 2023** | 47266 | $16 | $521184 | $(2477) | $(264304) | $254419 |
| Net loss |  |  |  |  | (35830) | (35830) |
| Issuance of common stock pursuant to exercise of stock options | 247 |  | 221 |  |  | 221 |
| Issuance of common stock pursuant to vesting of restricted stock awards and units, net of stock withheld for tax | 684 |  | (3945) |  |  | (3945) |
| Issuance of common stock under the Employee Stock Purchase Plan | 146 |  | 1355 |  |  | 1355 |
| Stock-based compensation |  |  | 18961 |  |  | 18961 |
| Change in unrealized gains on available-for-sale securities |  |  |  | 42 |  | 42 |
| Cumulative translation adjustment, net of tax |  |  |  | 47 |  | 47 |
| **Balance, September 30, 2024** | 48343 | 16 | 537776 | (2388) | (300134) | 235270 |

---

See accompanying notes to consolidated financial statements.

------

<u>[**Table of Contents**](#iff01030735b746b1bd22284c43eacba9_13)</u>

**nLIGHT, Inc.**

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

---

| | | |
|:---|:---|:---|
| | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| | **2025** | **2024** |
| Cash flows from operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loss | $(18558) | $(35830) |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 9151 | 9356 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization | 1247 | 3403 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reduction in carrying amount of right-of-use assets | 784 | 1367 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for losses on (recoveries of) accounts receivable | (1131) | 1489 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | 21789 | 18961 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes | 101 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on disposal of property, plant and equipment | 190 | 76 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued interest earned on marketable securities | (256) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-cash restructuring charges | 1243 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | (13186) | (2119) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory | (10203) | 3348 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 5914 | 954 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets, net | 1099 | (3351) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 1886 | 4628 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued and other long-term liabilities | 5795 | 2511 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenues | (1247) | (1931) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lease liabilities | (927) | (1546) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-current income taxes payable | 121 | 212 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities | 3812 | 1528 |
| Cash flows from investing activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale of fixed assets | 447 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchases of property, plant and equipment | (7444) | (5313) |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchase of marketable securities | (68697) | (88643) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from maturities and sales of marketable securities | 68425 | 83033 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (7269) | (10923) |
| Cash flows from financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from line of credit | 20000 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from employee stock plan purchases | 1385 | 1355 |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from stock option exercises | 196 | 221 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax payments related to stock award issuances | (3062) | (3945) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) financing activities | 18519 | (2369) |
| Effect of exchange rate changes on cash | 278 | 12 |
| Net increase (decrease) in cash, cash equivalents, and restricted cash | 15340 | (11752) |
| Cash, cash equivalents, and restricted cash, beginning of period | 66088 | 53466 |
| Cash, cash equivalents, and restricted cash, end of period | $81428 | $41714 |
| **Supplemental disclosures:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash paid for interest, net | $740 | $40 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash paid for income taxes | 277 | 302 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating cash outflows from operating leases | 2536 | 3057 |
| &nbsp;&nbsp;&nbsp;&nbsp;Right-of-use assets obtained in exchange for lease liabilities | 1208 | 995 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued purchases of property, equipment and patents | 426 | 415 |
| **Reconciliation of cash, cash equivalents, and restricted cash:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $81108 | $41456 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restricted cash | 320 | 258 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total cash, cash equivalents, and restricted cash | $81428 | $41714 |

---

See accompanying notes to consolidated financial statements.

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**nLIGHT, Inc.**

**Notes to Consolidated Financial Statements**

**Note 1 - Basis of Presentation and New Accounting Pronouncements**

**Basis of Presentation**

The accompanying unaudited consolidated financial statements of nLIGHT, Inc. and our wholly-owned subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). The unaudited financial information reflects, in the opinion of management, all adjustments necessary for a fair presentation of financial position, results of operations, stockholders' equity, and cash flows for the interim periods presented. The results reported for the interim period presented are not necessarily indicative of results that may be expected for the full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024.

**Critical Accounting Policies**

Our critical accounting policies have not materially changed during the nine months ended September 30, 2025, from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.

**New Accounting Pronouncements**

***ASU 2023-09***

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures. This ASU requires enhanced jurisdictional and other disaggregated disclosures for the effective tax rate reconciliation and income taxes paid and is effective for fiscal years beginning after December 15, 2024. This ASU requires additional disclosures and, accordingly, we do not expect the adoption of ASU 2023-09 to have a material effect on our financial position, results of operations or cash flows.

***ASU 2024-03*** 

In November 2024, the FASB issued ASU 2024-03 related to the disaggregation of certain income statement expenses. The amendments in this update require public entities to disclose incremental information related to purchases of inventory, team member compensation and depreciation, which will provide investors the ability to better understand entity expenses and make their own judgments about entity performance. The amendments in this update are effective for fiscal years beginning after December 15, 2026. We plan to adopt this pronouncement and make the necessary updates to our disclosures for the year ending December 31, 2027, and, aside from these disclosure changes, we do not expect the amendments to have a material effect on our financial position, results of operations or cash flows.

**Note 2 - Revenue** 

We recognize revenue upon transferring control of products and services and the amounts recognized reflect the consideration we expect to be entitled to receive in exchange for these products and services. We consider customer purchase orders, which in some cases are governed by master sales agreements, to be the contracts with a customer. As part of our consideration of the contract, we evaluate certain factors, including the customer's ability to pay (or credit risk). For each contract, we consider the promise to transfer products, each of which is distinct, as the identified performance obligations.

We allocate the transaction price to each distinct product based on its relative standalone selling price. Master sales agreements or purchase orders from customers could include a single product or multiple products. Regardless, the contracted price with the customer is agreed to at the individual product level outlined in the customer contract or purchase order. We do not bundle prices; however, we do negotiate with customers on pricing for the same products based on a variety of factors (e.g., level of contractual volume). We have concluded that the prices negotiated with each individual customer are representative of the stand-alone selling price of the product.

We often receive orders with multiple delivery dates that may extend across several reporting periods. We allocate the transaction price of the contract to each delivery based on the product standalone selling price and invoice for each scheduled delivery upon shipment or delivery and recognize revenues for such delivery at that point, when transfer of control has occurred. As scheduled delivery dates are generally within one year, under the optional exemption provided by ASC 606-10-50-14a, revenues allocated to future shipments of partially completed contracts

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are not disclosed as performance obligations for point in time revenue. Further, we recognize, over time, revenue as per ASC 606-10-55-18 (invoice practical expedient) for our cost plus contracts and, accordingly, elect not to disclose information related to those performance obligations under ASC 606-10-50-14b. As of September 30, 2025, we had

$0.2 million of performance obligations relating to firm fixed price contracts that did not qualify for the

aforementioned disclosure exemptions. We expect to recognize 100% of these performance obligations by the end of 2026.

We have elected, per ASC 606-10-25-18B (shipping and handling practical expedient), to recognize shipping and handling services performed after control transfer as fulfillment costs.

Rights of return generally are not included in customer contracts. Accordingly, product revenue is recognized upon transfer of control at shipment or delivery, as applicable. Rights of return are evaluated as they occur.

Revenues recognized at a point in time consist of sales of semiconductor lasers, fiber amplifiers, fiber lasers and other related products. Revenues recognized over time generally consist of development arrangements that are structured based on our costs incurred. For long-term contracts, we estimate the total expected costs to complete the contract and recognize revenue based on the percentage of costs incurred at period end. Typically, revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying our performance obligations. Incurred costs represent work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract costs include labor, materials, subcontractors costs, other direct costs, and indirect costs applicable on government and commercial contracts.

Contract estimates are based on various assumptions to project the outcome of future events that may span several

years. These assumptions include labor productivity and availability, the complexity of the work to be performed, the cost and availability of materials, the performance of subcontractors, and the availability and timing of funding from the customer. Billing under these arrangements generally occurs within one month of the costs being incurred or as milestones are reached.

The following tables represent a disaggregation of revenue from contracts with customers for the periods presented (in thousands):

&nbsp;&nbsp;&nbsp;&nbsp;

*Sales by End Market*

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended<br>September 30,** | **Nine Months Ended<br>September 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| Aerospace and Defense | 45554 | 30278 | 118955 | 79413 |
| Industrial | 9577 | 11588 | 28179 | 36478 |
| Microfabrication | 11611 | 14263 | 33011 | 35276 |
|  | $66742 | $56129 | $180145 | $151167 |

---

*Sales by Geography*

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended<br>September 30,** | **Nine Months Ended<br>September 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| North America | $46682 | $36332 | $127938 | $100696 |
| Asia Pacific | 9280 | 11211 | 27070 | 30322 |
| EMEA<sup>(1)</sup> | 10780 | 8586 | 25137 | 20149 |
|  | $66742 | $56129 | $180145 | $151167 |

---

<sup>(1)</sup> EMEA consists of Europe, the Middle East, and Africa.

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*Sales by Timing of Revenue*

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended<br>September 30,** | **Nine Months Ended<br>September 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| Point in time | $47415 | $41070 | $123869 | $105062 |
| Over time | 19327 | 15059 | 56276 | 46105 |
|  | $66742 | $56129 | $180145 | $151167 |

---

Our contract assets and liabilities were as follows (in thousands):

---

| | | | |
|:---|:---|:---|:---|
| | **Balance Sheet Classification** | **As of** | **As of** |
| | **Balance Sheet Classification** | **September 30, 2025** | **December 31, 2024** |
| Contract assets | Prepaid expenses and <br>other current assets | $9755 | $14510 |
| Contract liabilities | Deferred revenues and other long-term liabilities | 6228 | 6845 |

---

Contract assets generally consist of revenue recognized on an over-time basis where revenue recognition has been met, but the amounts are billed and collected in a subsequent period. In our services contracts, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals, which is generally monthly, or upon the achievement of contractual milestones. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets recorded in prepaid expenses and other current assets on the Consolidated Balance Sheets. However, we sometimes receive advances or deposits from our customers before revenue is recognized, resulting in contract liabilities recorded in deferred revenues on the Consolidated Balance Sheets. Contract liabilities are not a significant financing component as they are generally utilized to pay for contract costs within a one-year period or are used to ensure the customer meets contractual requirements. These assets and liabilities are reported on the Consolidated Balance Sheets on a contract-by-contract basis at the end of each reporting period. For our product revenue, we generally receive cash payments subsequent to satisfying the performance obligation via delivery of the product, resulting in billed accounts receivable. For our contracts, there are no significant gaps between the receipt of payment and the transfer of the associated goods and services to the customer for material amounts of consideration.

During the three and nine months ended September 30, 2025, we recognized revenue of $0.3 million and $2.8 million that was included in the deferred revenues balance at the beginning of the period as the performance obligations under the associated agreements were satisfied.

**Note 3 - Concentrations of Credit and Other Risks** 

The following customers accounted for 10% or more of our revenues for the periods presented:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| U.S. Government\* | 35% | 12% | 36% | 15% |
| Raytheon Technologies | 11% | <sup>(1)</sup> | 10% | 10% |
| KORD Technologies | <sup>(1)</sup> | 19% | <sup>(1)</sup> | 14% |

---

\*Excludes sales to customers who sell our products and services exclusively to the U.S. Government

<sup>(1)</sup> Represents less than 10% of total revenues.

Financial instruments that potentially expose us to concentrations of credit risk consist principally of receivables from customers. As of September 30, 2025 and December 31, 2024, one customer accounted for a total of 17% and two customers accounted for a total of 24%, respectively, of net customer receivables. No other customers accounted for 10% or more of net customer receivables at either date.

**Note 4 - Fair Value of Financial Instruments**

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The carrying amounts of certain of our financial instruments, including cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued liabilities are shown at cost which approximates fair value due to the short-term nature of these instruments. The fair value of our term and revolving loans approximates the carrying value due to the variable market rate used to calculate interest payments.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 1 Inputs: Observable inputs, such as quoted prices (unadjusted) in active markets for identical assets or liabilities at the measurement date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 2 Inputs: Observable inputs, other than Level 1 prices, such as quoted prices in active markets for similar assets and liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 3 Inputs: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Our financial instruments that are carried at fair value consist of Level 1 assets which include highly liquid investments and bank drafts classified as cash equivalents and marketable securities.

Our fair value hierarchy for our financial instruments was as follows (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
| | **Level 1** | **Level 2** | **Level 3** | **Total** |
| **Cash Equivalents:** | | | | |
| &nbsp;&nbsp;&nbsp;&nbsp;Money market securities | $22447 | $— | $— | $22447 |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial paper | 1683 |  |  | 1683 |
|  | 24130 |  |  | 24130 |
| **Marketable Securities:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. treasuries | 34684 |  |  | 34684 |
| Total | $58814 | $— | $— | $58814 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
| | **Level 1** | **Level 2** | **Level 3** | **Total** |
| **Cash Equivalents:** | | | | |
| &nbsp;&nbsp;&nbsp;&nbsp;Money market securities | $20488 | $— | $— | $20488 |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial paper | 1773 |  |  | 1773 |
|  | 22261 |  |  | 22261 |
| **Marketable Securities:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. treasuries | 34868 |  |  | 34868 |
| Total | $57129 | $— | $— | $57129 |

---

***Cash Equivalents***

The fair value of cash equivalents is determined based on quoted market prices for similar or identical securities.

***Marketable Securities***

Marketable securities consist primarily of highly liquid investments with original maturities of greater than 90 days when purchased. We classify our marketable securities as available-for-sale, as they represent investments that are available to be sold for current operations, and value them utilizing a market approach that uses observable inputs without applying significant judgment.

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**Note 5 - Inventory**

Inventory is stated at the lower of average cost (principally standard cost, which approximates actual cost on a first-in, first-out basis) and net realizable value. Inventory includes raw materials and components that may be specialized in nature and subject to obsolescence. On a quarterly basis, we review inventory quantities on hand in comparison to our past consumption, recent purchases, and other factors to determine what inventory quantities, if any, may not be sellable. Based on this analysis, we write down the affected inventory value for estimated excess and obsolescence charges. At the point of loss recognition, a new, lower-cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis.

Inventory consisted of the following (in thousands):

---

| | | |
|:---|:---|:---|
| | **As of** | **As of** |
| | **September 30, 2025** | **December 31, 2024** |
| Raw materials | $25321 | $19165 |
| Work in process and semi-finished goods | 21268 | 17390 |
| Finished goods | 4868 | 4245 |
|  | $51457 | $40800 |

---

**Note 6 - Property, Plant and Equipment**

Property, plant and equipment consisted of the following (in thousands):

---

| | | | |
|:---|:---|:---|:---|
| | | **As of** | **As of** |
| | **Useful life**<br>**(years)** | **September 30, 2025** | **December 31, 2024** |
| Automobiles | 3 | $64 | $64 |
| Computer hardware and software | 3 - 5 | 9988 | 9672 |
| Manufacturing and lab equipment | 2 - 7 | 97356 | 95106 |
| Office equipment and furniture | 5 - 7 | 2130 | 2542 |
| Leasehold and building improvements | 2 - 12 | 34095 | 33104 |
| Buildings | 30 | 9392 | 9392 |
| Land | N/A | 3399 | 3399 |
|  |  | 156424 | 153279 |
| Accumulated depreciation |  | (112191) | (106342) |
|  |  | $44233 | $46937 |

---

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**Note 7 - Intangible Assets and Goodwill**

***Intangible Assets***

The details of definite lived intangible assets were as follows (in thousands):

---

| | | | |
|:---|:---|:---|:---|
| | **Estimated useful life<br>(in years)** | **As of** | **As of** |
| | **Estimated useful life<br>(in years)** | **September 30, 2025** | **December 31, 2024** |
| Development programs | 2 - 4 |  | 7200 |
| Developed technology | 5 | 2959 | 2959 |
|  |  | 2959 | 10159 |
| Accumulated amortization |  | (2523) | (9326) |
|  |  | $436 | $833 |

---

Amortization related to intangible assets was as follows (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| Amortization expense | $99 | $149 | $397 | $671 |

---

Estimated amortization expense for future years is as follows (in thousands):

---

| | |
|:---|:---|
| 2025 | $88 |
| 2026 | 348 |
|  | $436 |

---

***Goodwill*** 

The carrying amount of goodwill by segment was as follows (in thousands):

---

| | | | |
|:---|:---|:---|:---|
| | **Laser Products** | **Advanced Development** | **Totals** |
| **Balance, December 31, 2024** | $2106 | $10248 | $12354 |
| Currency exchange rate adjustment | 94 |  | 94 |
| **Balance, September 30, 2025** | $2200 | $10248 | $12448 |

---

**Note 8 - Line of Credit**

We have a $40.0 million revolving line of credit (LOC) with Banc of California dated September 24, 2018, which is secured by our assets and matures on September 24, 2027. The LOC agreement contains restrictive and financial covenants and bears an unused credit fee of 0.25% on an annualized basis. The interest rate of 6.25% on the LOC at September 30, 2025 is based on the Prime Rate, minus a margin based on our liquidity levels.

During the three months ended March 31, 2025, we drew $20.0 million under the LOC to support working capital and general corporate purposes. We did not make any draws or repayments during the three months ended September 30, 2025. Interest expense on the LOC was $0.3 million and $0.8 million for the three and nine months ended September 30, 2025, respectively. As of September 30, 2025, $20.0 million was outstanding on the LOC and we were in compliance with all covenants. The remaining $20.0 million unused portion of the LOC is available for borrowing.

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**Note 9 - Accrued Liabilities**

Accrued liabilities consisted of the following (in thousands):

---

| | | |
|:---|:---|:---|
| | **As of** | **As of** |
| | **September 30, 2025** | **December 31, 2024** |
| Accrued payroll and benefits | $15061 | $9751 |
| Product warranty, current | 3103 | 2454 |
| Other accrued expenses | 823 | 1063 |
|  | $18987 | $13268 |

---

**Note 10 - Product Warranties** 

We provide warranties on certain products and record a liability for the estimated future costs associated with warranty claims at the time revenue is recognized. The warranty liability is based on historical experience, any specifically identified failures, and our estimate of future costs. The current portion of our product warranty liability is included in the accrued liabilities and the long-term portion is included in Other long-term liabilities in our Consolidated Balance Sheets.

Product warranty liability activity was as follows for the periods presented (in thousands):

---

| | | |
|:---|:---|:---|
| | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| | **2025** | **2024** |
| Product warranty liability, beginning | $3473 | $4469 |
| Warranty charges incurred, net | (2295) | (3492) |
| Provision for warranty charges, net of adjustments | 3091 | 2597 |
| Product warranty liability, ending | 4269 | 3574 |
| Less: current portion of product warranty liability | (3103) | (2440) |
| Non-current portion of product warranty liability | $1166 | $1134 |

---

**Note 11 - Stockholders' Equity and Stock-Based Compensation** 

***Restricted Stock Awards and Units***

Restricted stock unit ("RSU") and restricted stock award ("RSA") activity under our equity incentive plan was as follows:

---

| | | |
|:---|:---|:---|
| | **Number of Restricted Stock Units (Thousands)** | **Weighted-Average Grant Date Fair Value** |
| **Balance, December 31, 2024** | 1904 | $12.99 |
| Granted | 1177 | 15.81 |
| Vested | (1025) | 13.87 |
| Forfeited | (67) | 13.95 |
| **Balance, September 30, 2025** | 1989 | 14.17 |

---

---

| | | |
|:---|:---|:---|
| | **Number of Restricted Stock Awards (Thousands)** | **Weighted-Average Grant Date Fair Value** |
| **Balance, December 31, 2024** | 37 | $33.66 |
| Vested | (37) | 33.66 |
| **Balance, September 30, 2025** |  |  |

---

The total fair value of RSUs and RSAs vested during the nine months ended September 30, 2025, was $15.1 million.

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***Market-Based Performance Restricted Stock Units***

During the three months ended September 30, 2025, the payout factor for our market-based performance restricted stock units ("2022 PRSUs") granted in 2022 was measured. The number of shares that a participant receives is equal to the number of PRSUs granted multiplied by a payout factor ranging from 0% to 200%. The performance criteria that determines the payout factor is our Total Shareholder Return ("TSR") for a performance period of three years beginning on July 1, 2022 relative to the TSR of companies in the Russell 2000 Index. The payout factor for our 2022 PRSUs was measured at 200%. The table below includes details regarding the measurement and vesting of our 2022 PRSUs and subsequent issuance of shares (in thousands, except payout factor):

---

| | |
|:---|:---|
| | **Fiscal Year Granted**<br>**2022** |
| 2022 PRSUs outstanding at measurement date | 359 |
| Performance period | July 1, 2022 - June 30, 2025 |
| Vesting date | August 14, 2025 |
| Payout factor | 200% |
| Number of shares issued | 718 |

---

The total fair value of the 2022 PRSUs vested during the nine months ended September 30, 2025, was $18.8 million.

During the three months ended September 30, 2025, a special grant of market-based performance restricted stock units ("Special 2025 PRSUs") was made that will vest upon meeting certain performance criteria. The number of units earned is based on achievement of specified stock price goals that can be achieved over a 6-year period ("Performance Period") beginning on August 13, 2025 ("Grant Date"). These Special 2025 PRSUs will be earned if nLIGHT's volume-weighted average closing price ("VWAP") over a trailing consecutive 60-day period during the Performance Period meets or exceeds the stock price performance goals below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Approximately 1/3 of the Special 2025 PRSUs will be earned if nLIGHT's VWAP equals or exceeds $30.00;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an additional 1/3 of the Special 2025 PRSUs will be earned if nLIGHT's VWAP equals or exceeds $35.00; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the final 1/3 of the Special 2025 PRSUs will be earned if nLIGHT's VWAP equals or exceeds $40.00.

In total, up to 100% of the Special 2025 PRSUs will be earned if all stock price hurdles are attained. 50% of the earned units will vest on January 3, 2028 and the other 50% will vest on January 3, 2029 subject to continued service through the applicable vesting date.

The Special 2025 PRSU grant information is as follows (in thousands, except weighted-average grant date fair value):

---

| | |
|:---|:---|
| | **Fiscal Year Granted** |
| | **2025** |
| Performance period | August 13, 2025 - August 13, 2031 |
| Weighted-average grant date fair value | $25.44 |
| Number of awards granted | 2157 |

---

The fair value of the Special 2025 PRSUs was measured on the grant date using a Monte Carlo simulation model utilizing several key assumptions, including the following:

---

| | |
|:---|:---|
| | **Fiscal Year Granted** |
| | **2025** |
| Expected share price volatility (nLIGHT) | 63.7% |
| Risk-free rate of return | 3.8% |

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The expense attribution periods for the Special 2025 PRSUs will coincide with the explicit service periods of 2.4 and 3.4 years beginning August 13, 2025 and ending January 3, 2028 and January 3, 2029, respectively. As of September 30, 2025, none of the stock price performance goals for the Special 2025 PRSU grant have been met.

During the three months ended June 30, 2025, we granted the following market-based performance restricted stock units ("2025 PRSUs") under our equity incentive plan (in thousands, except weighted-average grant date fair value):

---

| | |
|:---|:---|
| | **Fiscal Year Granted** |
| | **2025** |
| Performance period | May 9, 2025 - March 31, 2028 |
| Weighted-average grant date fair value | $23.33 |
| Number of awards granted | 505 |

---

The 2025 PRSUs granted during the three months ended June 30, 2025 will vest after the conclusion of the performance period, subject to the participants' continuing service, and are similar in all material aspects to the market-based PRSUs granted in prior years, as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024. The grant date fair value of the 2025 PRSUs was measured using a Monte Carlo simulation model.

As of September 30, 2025, there were approximately 3.6 million PRSU awards outstanding.

***Stock Options***

The following table summarizes our stock option activity during the nine months ended September 30, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Number of Options (Thousands)** | **Weighted-Average Exercise Price** | **Weighted-Average Remaining Contractual Term (Years)** | **Aggregate Intrinsic Value (Thousands)** |
| **Outstanding, December 31, 2024** | 859 | $1.43 | 2.0 | $7783 |
| Options exercised | (209) | 0.94 |  |  |
| Options canceled | (2) | 5.38 |  |  |
| **Outstanding, September 30, 2025** | 648 | 1.57 | 1.6 | 18183 |
| Options exercisable at September 30, 2025 | 648 | 1.57 | 1.6 | 18183 |
| Options vested as of September 30, 2025, and expected to vest after September 30, 2025 | 648 | 1.57 | 1.6 | 18183 |

---

Total intrinsic value of options exercised for the nine months ended September 30, 2025 and 2024, was $2.3 million and $2.7 million, respectively. We received proceeds of $0.2 million and $0.2 million from the exercise of options for the nine months ended September 30, 2025 and 2024, respectively.

***Stock-Based Compensation***

Total stock-based compensation expense was included in our Consolidated Statements of Operations as follows (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| Cost of revenues | $615 | $629 | $1783 | $1829 |
| Research and development | 2560 | 2046 | 6178 | 5834 |
| Sales, general and administrative | 6187 | 3852 | 13828 | 11298 |
|  | $9362 | $6527 | $21789 | $18961 |

---

***Unrecognized Compensation Costs***

As of September 30, 2025, total unrecognized stock-based compensation was $92.1 million, which will be recognized over an average expected recognition period of 2.6 years.

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**Note 12 - Commitments and Contingencies**

***Leases***

See Note 13.

***Legal Matters***

From time to time, we may be subject to various legal proceedings and claims in the ordinary course of business. As of September 30, 2025 we believe these matters will not have a material adverse effect on our consolidated financial statements.

**Note 13 - Leases** 

We lease real estate space under non-cancelable operating lease agreements for commercial and industrial space. Facilities-related operating leases have remaining terms of 0.2 to 9.7 years, and some leases include options to extend up to 10 years. Other leases for automobiles, manufacturing and office and computer equipment have remaining lease terms of 0.1 to 3.1 years. These leases are primarily operating leases; financing leases are not material. We did not include any renewal options in our lease terms for calculating the lease liabilities as we are not reasonably certain we will exercise the options at this time. The weighted-average remaining lease term for the lease obligations was 6 years as of September 30, 2025, and the weighted-average discount rate was 4.3%.

The components of lease expense related to operating leases were as follows (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| Lease expense: |  |  |  |  |
| Operating lease expense | $756 | $943 | $2335 | $2773 |
| Short-term lease expense | 129 | 139 | 246 | 265 |
| Variable and other lease expense | 282 | 273 | 841 | 793 |
|  | $1167 | $1355 | $3422 | $3831 |

---

Future minimum payments under our non-cancelable lease obligations were as follows as of September 30, 2025 (in thousands):

---

| | |
|:---|:---|
| 2025 | $721 |
| 2026 | 2673 |
| 2027 | 2282 |
| 2028 | 1763 |
| 2029 | 1028 |
| Thereafter | 4417 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total minimum lease payments | 12884 |
| Less: interest | (1575) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Present value of net minimum lease payments | 11309 |
| Less: current portion of lease liabilities | (2306) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total long-term lease liabilities | $9003 |

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**Note 14 - Restructuring**

During the three months ended September 30, 2025 we implemented restructuring plans which included headcount reduction in China and the write-down of in-process capital equipment projects related to production capacity that was never placed into service. Restructuring charges were as follows (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| Employee termination costs | $942 | $— | $942 | $— |
| Write-down of long-lived assets | 791 |  | 791 |  |
| Total restructuring charges | $1733 | $— | $1733 | $— |

---

Restructuring accruals and payments were as follows (in thousands):

---

| | |
|:---|:---|
| **Accrued restructuring charges at December 31, 2023** | $— |
| Restructuring charges | 4291 |
| Cash payments | (3107) |
| Non-cash settlements | (63) |
| **Accrual at December 31, 2024** | 1121 |
| Restructuring charges | 1733 |
| Cash payments | (1380) |
| Non-cash settlements | (791) |
| **Accrual at September 30, 2025** | $683 |

---

The restructuring accrual was included as a component of Accrued Liabilities on our Consolidated Balance Sheets. All of the restructuring charges recorded in 2025 were attributable to the Laser Products segment.

**Note 15 - Segment Information** 

We operate in two reportable segments consisting of the Laser Products segment and the Advanced Development segment. We organize our business segments based on the nature of products and services offered.

***Laser Products***

This segment includes high-power semiconductor lasers and fiber lasers that are typically integrated into laser systems or manufacturing tools built by our customers. This segment also includes fiber amplifiers and beam combination and control systems for use in high-energy laser (HEL) systems in directed energy applications, and laser sensing products used in a wide range of defense applications.

***Advanced Development***

This segment focuses on research, design, and prototyping of next-generation laser technologies for the defense industry, including the development of custom high-power fiber lasers and advanced beam combining technologies.

**Selected Financial Data by Business Segment**

Our Chief Executive Officer serves as the chief operating decision maker (CODM) and is responsible for reviewing segment performance and making decisions regarding resource allocation. Our CODM uses metrics such as revenue, gross profit, and gross margin to evaluate each segment's performance by comparing the metrics to historical results and previously forecasted financial information. Our CODM does not evaluate operating segments using asset or liability information. The following table summarizes the operating results by reportable segment for the periods presented (dollars in thousands):

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30, 2025** | **Three Months Ended September 30, 2025** | **Three Months Ended September 30, 2025** | **Three Months Ended September 30, 2025** |
| | **Laser Products** | **Advanced Development** | **Corporate and Other** | **Totals** |
| Revenue | $47608 | $19134 | $— | $66742 |
| Gross profit | $20137 | $1231 | $(615) | $20753 |
| Gross margin | 42.3% | 6.4% | NM\* | 31.1% |

---

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** |
| | **Laser Products** | **Advanced Development** | **Corporate and Other** | **Totals** |
| Revenue | $124110 | $56035 | $— | $180145 |
| Gross profit | $48978 | $5814 | $(1783) | $53009 |
| Gross margin | 39.5% | 10.4% | NM\* | 29.4% |

---

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30, 2024** | **Three Months Ended September 30, 2024** | **Three Months Ended September 30, 2024** | **Three Months Ended September 30, 2024** |
| | **Laser Products** | **Advanced Development** | **Corporate and Other** | **Totals** |
| Revenue | $41132 | $14997 | $— | $56129 |
| Gross profit | $12475 | $704 | $(629) | $12550 |
| Gross margin | 30.3% | 4.7% | NM\* | 22.4% |

---

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** |
| | **Laser Products** | **Advanced Development** | **Corporate and Other** | **Totals** |
| Revenue | $104960 | $46207 | $— | $151167 |
| Gross profit | $30261 | $3456 | $(1829) | $31888 |
| Gross margin | 28.8% | 7.5% | NM\* | 21.1% |

---

\*Not meaningful

Corporate and Other consists of general and administrative overhead costs and unallocated expenses related to stock-based compensation and purchased intangible amortization, which are not used in evaluating the results of, or in the allocation of resources to, our reportable segments.

There have been no material changes to the geographic locations of our long-lived assets, net, based on the location of the assets, as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.

**Note 16 - Net Loss per Share** 

Basic and diluted net loss and the number of shares used for basic and diluted net loss calculations were the same for all periods presented because we were in a loss position.

The following potentially dilutive securities were not included in the calculation of diluted shares as the effect would have been anti-dilutive (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| Restricted stock units and awards | 3523 | 715 | 2616 | 947 |
| Common stock options | 616 | 1082 | 643 | 1177 |
|  | 4139 | 1797 | 3259 | 2124 |

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**ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

***SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS***

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, you can identify forward-looking statements by the following words: "ability," "anticipate," "attempt," "believe," "can be," "continue," "could," "depend," "enable," "estimate," "expect," "extend," "grow," "if," "intend," "likely," "may," "objective," "ongoing," "plan," "possible," "potential," "predict," "project," "propose," "rely," "should," "target," "will," "would" or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words.

These statements involve risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Although we believe that we have a reasonable basis for each forward-looking statement, we caution you that these statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot be certain. Forward-looking statements include, but are not limited to, statements about: our business model and strategic plans; our expectations regarding manufacturing; our future financial performance; demand for our semiconductor and fiber laser solutions; our ability to develop innovative products; our expectations regarding product volumes and the introduction of new products; our technology and new product research and development activities; the impact of new import and export controls; the impact of changes in regulations and customs, tariffs and trade barriers, or the perception that any of them could occur; the impact of inflation; the impact of seasonality; the effect on our business of litigation to which we are or may become a party; and the sufficiency of our existing liquidity sources to meet our cash needs.

You should refer to the "Risk Factors" section of this report for a discussion of other important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this report will prove to be accurate. In addition, statements that "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, which although we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted a thorough inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

**Overview**

&nbsp;&nbsp;&nbsp;&nbsp;

nLIGHT, Inc., headquartered in Camas, Washington, is a leading provider of high-power lasers for mission critical directed energy, optical sensing, and advanced manufacturing applications.

We operate in two reportable segments consisting of the Laser Products segment and the Advanced Development segment.

Revenues increased to $180.1 million in the nine months ended September 30, 2025 compared to $151.2 million in the same period in 2024 due primarily to an increase in both product and development revenue from the Aerospace and Defense end market. We generated a net loss of $18.6 million for the nine months ended September 30, 2025 compared to a net loss of $35.8 million for the same period in 2024.

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**Factors Affecting Our Performance**

***Demand for our Products and Solutions***

Our revenue depends largely on market conditions, competitive pressure, and achievement of design wins. We consider a design win to occur when a customer notifies us that it has selected one of our products to be incorporated into a product or system under development by such customer. In the Aerospace and Defense market, our business also depends in large part on continued investment in laser technology by the U.S. government and its allies, and our ability to continue to successfully develop leading technology in this area and commercialize that technology in the future.

Demand for our products also fluctuates based on market cycles, continuously evolving industry supply chains, trade and tariff terms, as well as evolving competitive dynamics in each of our end-markets. Erosion of average selling prices, or ASPs, of established products is typical in our industry, and the ASPs of our products generally decrease as our products mature. We may also negotiate discounted selling prices from time to time with certain customers that purchase higher volumes, or to penetrate new markets or applications.

***Technology and New Product Development***

We invest heavily in research and development to provide solutions to our current and future customers, and anticipate that we will continue to invest in research and development to achieve our technology and product roadmap. Our product development is targeted to specific sectors of the market where we believe the performance of our products provides a significant benefit to our customers. We believe our close coordination with our customers regarding their future product requirements enhances the efficiency of our research and development expenditures.

***Manufacturing Costs and Gross Margins***

Product gross profit, in absolute dollars and gross margin, may fluctuate from period to period based on product sales mix, sales volumes, changes in ASPs, production volumes, the corresponding absorption of manufacturing overhead expenses, the cost of purchased materials, production costs and manufacturing yields. Product sales mix can affect gross profits due to variations in profitability related to product configurations and cost profiles, customer volume pricing, availability of competitive products in various markets, and new product introductions, among other factors. Even though certain of our products are built offshore by contract manufacturers, capacity utilization affects gross margin because of the fixed cost associated with our U.S.-based manufacturing capabilities. Change in sales and production volumes impact absorption of fixed costs, manufacturing efficiencies and production costs.

Our Development gross profit varies with the type and terms of contracts, contract volume, project mix, changes in the estimated cost of projects at completion, and successful execution on projects during the period. Most of our Development contracts have historically been structured as cost plus fixed fee due to the technical complexity of the research and development services, but we also perform work under fixed price contracts where gross margin can change from period to period based on the estimated cost of the project at completion.

***Seasonality***

Our quarterly revenues can fluctuate with general economic trends, the timing of capital expenditures by our customers, holidays, and general economic trends. In addition, as is typical in our industry, we tend to recognize a larger percentage of our quarterly revenues in the last month of the quarter, which may impact our working capital trends.

***Global Economic Conditions***

We continue to monitor macroeconomic trends, global inflationary pressures, and uncertainties related to international trade policy, including tariff actions and regulatory shifts. The U.S. government implemented a new series of tariffs on imported goods during 2025, prompting retaliatory tariffs by other countries. We currently procure components from China, which are utilized in our U.S. manufacturing operations as well as in products assembled by our contract manufacturer in Thailand.

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A portion of our sales are generated from products manufactured outside the United States and we sell our products globally. Changing trade dynamics, including newly imposed or proposed tariffs and export controls, could disrupt our supply chain and increase input costs. These trade policy developments did not have a material impact on our financial results for the first nine months of 2025. However, if current trends continue or intensify, we may experience increased cost volatility, operational complexity, and broader economic pressures on our customer base that could have a negative impact on revenue and profitability in the future.

**Results of Operations** 

The following table sets forth our operating results as a percentage of revenues for the periods indicated (which may not add up due to rounding):

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| Revenue: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Products | 71.3% | 73.3% | 68.9% | 69.4% |
| &nbsp;&nbsp;&nbsp;&nbsp;Development | 28.7 | 26.7 | 31.1 | 30.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenue | 100.0 | 100.0 | 100.0 | 100.0 |
| Cost of revenue: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Products | 42.1 | 52.2 | 42.7 | 50.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Development | 26.8 | 25.4 | 27.9 | 28.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total cost of revenue | 68.9 | 77.6 | 70.6 | 78.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit | 31.1 | 22.4 | 29.4 | 21.1 |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Research and development | 17.3 | 20.2 | 18.8 | 22.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;Sales, general, and administrative | 22.1 | 23.2 | 21.4 | 24.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restructuring | 2.6 |  | 1.0 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 42.0 | 43.4 | 41.2 | 47.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss from operations | (10.9) | (21.0) | (11.8) | (25.9) |
| Other income: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest income | 1.6 | 0.7 | 2.2 | 0.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (0.5) |  | (0.4) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other (expense) income, net | (0.1) | 2.4 | (0.1) | 1.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss before income taxes | (9.9) | (17.9) | (10.1) | (23.3) |
| Income tax expense | 0.4 | 0.5 | 0.2 | 0.3 |
| Net loss | (10.3)% | (18.4)% | (10.3)% | (23.6)% |

---

***Revenues by End Market***

Our revenues by end market were as follows for the periods presented (dollars in thousands):

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Change** |
| | **2025** | **% of Revenue** | **2024** | **% of Revenue** | $**%** |
| Aerospace and Defense | $45554 | 68.3% | $30278 | 54.0% | 50.5% |
| Industrial | 9577 | 14.3 | 11588 | 20.6 | (17.4) |
| Microfabrication | 11611 | 17.4 | 14263 | 25.4 | (18.6) |
|  | $66742 | 100.0% | $56129 | 100.0% | 18.9% |

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Change** | **Change** |
| | **2025** | **% of Revenue** | **2024** | **% of Revenue** | **Amount** | **%** |
| Aerospace and Defense | $118955 | 66.1% | $79413 | 52.5% | $39542 | 49.8% |
| Industrial | 28179 | 15.6 | 36478 | 24.1 | (8299) | (22.8) |
| Microfabrication | 33011 | 18.3 | 35276 | 23.4 | (2265) | (6.4) |
|  | $180145 | 100.0% | $151167 | 100.0% | $28978 | 19.2% |

---

The increases in revenue from the Aerospace and Defense market for the three and nine months ended September 30, 2025, compared to the same periods in 2024, were driven primarily by increased unit sales of directed energy laser products and progress on existing research and development contracts. The decreases in revenue from the Industrial market for the three and nine months ended September 30, 2025, compared to the same periods in 2024, were primarily the result of decreased unit sales due to lower customer demand and deteriorating market conditions across all regions. The decreases in revenue from the Microfabrication market for the three and nine months ended September 30, 2025 compared to the same periods in 2024 were primarily attributable to a decrease in unit sales of semiconductor lasers.

***Revenues by Segment***

Our revenues by segment were as follows for the periods presented (dollars in thousands):

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Change** |
| | **2025** | **% of Revenue** | **2024** | **% of Revenue** | $**%** |
| Laser Products | $47608 | 71.3% | $41132 | 73.3% | 15.7% |
| Advanced Development | 19134 | 28.7 | 14997 | 26.7 | 27.6 |
|  | $66742 | 100.0% | $56129 | 100.0% | 18.9% |

---

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Change** | **Change** |
| | **2025** | **% of Revenue** | **2024** | **% of Revenue** | **Amount** | **%** |
| Laser Products | $124110 | 68.9% | $104960 | 69.4% | $19150 | 18.2% |
| Advanced Development | 56035 | 31.1 | 46207 | 30.6 | 9828 | 21.3 |
|  | $180145 | 100.0% | $151167 | 100.0% | $28978 | 19.2% |

---

The increases in Laser Products revenue for the three and nine months ended September 30, 2025 compared to the same periods in 2024 were the result of increased revenue from the Aerospace and Defense market as discussed above, partially offset by decreases in revenue from the Industrial and the Microfabrication markets. The increases in Advanced Development revenue for the three and nine months ended September 30, 2025, compared to the same periods in 2024, were driven by progress on existing research and development contracts. All Advanced Development revenue is included in the Aerospace and Defense market.

***Revenues by Geographic Region***

Our revenues by geographic region were as follows for the periods presented (dollars in thousands):

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Change** |
| | **2025** | **% of Revenue** | **2024** | **% of Revenue** | $**%** |
| North America | $46682 | 69.9% | $36332 | 64.7% | 28.5% |
| Asia Pacific | 9280 | 13.9 | 11211 | 20.0 | (17.2) |
| EMEA | 10780 | 16.2 | 8586 | 15.3 | 25.6 |
|  | $66742 | 100.0% | $56129 | 100.0% | 18.9% |

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Change** | **Change** |
| | **2025** | **% of Revenue** | **2024** | **% of Revenue** | **Amount** | **%** |
| North America | $127938 | 71.0% | $100696 | 66.6% | $27242 | 27.1% |
| Asia Pacific | 27070 | 15.0 | 30322 | 20.1 | (3252) | (10.7) |
| EMEA | 25137 | 14.0 | 20149 | 13.3 | 4988 | 24.8 |
|  | $180145 | 100.0% | $151167 | 100.0% | $28978 | 19.2% |

---

Geographic revenue information is based on the location to which we ship our products. The increases in North America revenue for the three and nine months ended September 30, 2025 compared to the same periods in 2024, were due to increased revenue from the Aerospace and Defense market, partially offset by decreased revenue from the Industrial and Microfabrication markets. The decreases in Asia Pacific revenue for the three and nine months ended September 30, 2025 compared to the same periods in 2024 were the result of decreased revenue from the Industrial and Microfabrication markets, which was partially offset by increased revenue from the Aerospace and Defense market. The increases in EMEA revenue for the three and nine months ended September 30, 2025 compared to the same periods in 2024 were primarily due to increased revenue from the Microfabrication market and Aerospace and Defense market, partially offset by decreased revenue from the Industrial market.

***Cost of Revenues and Gross Margin***

Cost of Laser Products revenue consists primarily of manufacturing materials, labor, shipping and handling costs, tariffs and manufacturing-related overhead. We order materials and supplies based on backlog and forecasted demand from our customers. We expense all warranty costs and inventory provisions as cost of revenues.

Cost of Advanced Development revenue consists of materials, labor, subcontracting costs, and an allocation of indirect costs including overhead and general and administrative.

Our gross profit and gross margin were as follows for the periods presented (dollars in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30, 2025** | **Three Months Ended September 30, 2025** | **Three Months Ended September 30, 2025** | **Three Months Ended September 30, 2025** |
| | **Laser Products** | **Advanced Development** | **Corporate and Other** | **Total** |
| Gross profit | $20137 | $1231 | $(615) | $20753 |
| Gross margin | 42.3% | 6.4% | NM\* | 31.1% |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** |
| | **Laser Products** | **Advanced Development** | **Corporate and Other** | **Total** |
| Gross profit | $48978 | $5814 | $(1783) | $53009 |
| Gross margin | 39.5% | 10.4% | NM\* | 29.4% |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30, 2024** | **Three Months Ended September 30, 2024** | **Three Months Ended September 30, 2024** | **Three Months Ended September 30, 2024** |
| | **Laser Products** | **Advanced Development** | **Corporate and Other** | **Total** |
| Gross profit | $12475 | $704 | $(629) | $12550 |
| Gross margin | 30.3% | 4.7% | NM\* | 22.4% |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** |
| | **Laser Products** | **Advanced Development** | **Corporate and Other** | **Total** |
| Gross profit | $30261 | $3456 | $(1829) | $31888 |
| Gross margin | 28.8% | 7.5% | NM\* | 21.1% |

---

\*NM = not meaningful

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The increase in Laser Products gross margin for the three and nine months ended September 30, 2025 compared to the same periods in 2024 were driven primarily by product sales mix including increased sales of directed energy laser products, and the impact of increased production volumes on fixed manufacturing costs due to the overall increase in sales as previously discussed. The first nine months of 2025 also benefited from an increase in duty reclaim and manufacturing yields.

The increase in Advanced Development gross margin for the nine-months ended September 30, 2025 compared to the same period in 2024 was primarily the result of an increase in revenue from fixed priced contracts that carried higher average gross margins than cost-plus fixed fee contracts. The decrease in Advanced Development gross margin for the three-months ended September 30, 2025 compared to the same period in 2024 is attributable to changes in the mix of research and development contracts as most of the revenue for the three months ended September 30, 2025 was from cost-plus fixed fee contracts.

***Operating Expenses*** 

Our operating expenses were as follows for the periods presented (dollars in thousands):

*Research and Development*

---

| | | | |
|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Change** |
| | **2025** | **2024** | $**%** |
| Research and development | $11534 | $11328 | 1.8% |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Change** | **Change** |
| | **2025** | **2024** | **Amount** | **%** |
| Research and development | $33920 | $33723 | $197 | 0.6% |

---

The increases in research and development expense for the three and nine months ended September 30, 2025 compared to the same periods in 2024 were primarily attributable to increases in incentive compensation and increases in stock-based compensation of $0.5 million and $0.3 million for the three and nine months ended September 30, 2025, respectively, partially offset by decreases in employee compensation due to reductions in headcount and decreases in outside services.

*Sales, General and Administrative*

---

| | | | |
|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Change** |
| | **2025** | **2024** | $**%** |
| Sales, general, and administrative | $14785 | $13021 | 13.5% |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Change** | **Change** |
| | **2025** | **2024** | **Amount** | **%** |
| Sales, general, and administrative | $38501 | $37372 | $1129 | 3.0% |

---

The increases in sales, general and administrative expense for the three and nine months ended September 30, 2025, compared to the same periods in 2024, were driven primarily by increases in employee and incentive compensation, and increases in stock-based compensation of $2.3 million and $2.5 million, respectively, partially offset by decreases in bad debt expense, increases in bad debt recoveries, and a higher allocation of costs from sales, general and administrative to development projects.

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*Restructuring*

Restructuring included the following (in thousands):

---

| | | | |
|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Change** |
| | **2025** | **2024** | $**%** |
| Employee termination costs | $942 | $— | NM\* |
| Write-down of long-lived assets | 791 |  | NM\* |
|  | $1733 | $— | NM\* |

---

---

| | | | |
|:---|:---|:---|:---|
| | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Change** |
| | **2025** | **2024** | $**%** |
| Employee termination costs | $942 | $— | NM\* |
| Write-down of long-lived assets | 791 |  | NM\* |
|  | $1733 | $— | NM\* |

---

\*NM = Not meaningful

We implemented restructuring plans in the three months ended September 2025 which resulted in reductions of headcount in China and write-down of certain long-lived assets.

***Interest Income***

---

| | | | |
|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Change** |
| | **2025** | **2024** | $**%** |
| Interest income | $1079 | $421 | 156.3% |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Change** | **Change** |
| | **2025** | **2024** | **Amount** | **%** |
| Interest income | $3875 | $1375 | $2500 | 181.8% |

---

The increases in interest income for the three and nine months ended September 30, 2025, compared to the same periods in 2024, were driven primarily by an increase in income earned from marketable securities and imputed interest on a long-term customer receivable.

Interest income is primarily earned from our marketable securities (U.S. treasuries), recognized using the effective yield method, and cash equivalents (money market securities).

Beginning with the three months ended March 31, 2025, income earned from marketable securities is classified within interest income, net, rather than other income, net. This prospective change in presentation more accurately reflects the nature of the income and has no impact on total net income.

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***Interest expense***

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| | | | |
|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Change** |
| | **2025** | **2024** | $**%** |
| Interest expense | $(317) | $(27) | NM\* |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Change** | **Change** |
| | **2025** | **2024** | **Amount** | **%** |
| Interest expense | $(753) | $(67) | $(686) | NM\* |

---

\*NM = not meaningful

The increases in interest expense for the three and nine months ended September 30, 2025, compared to the same periods in 2024, were driven by interest on the outstanding LOC balance. Interest expense on the line of credit (LOC) was $0.3 million and $0.8 million for the three and nine months ended September 30, 2025, respectively.

***Other Income, net***

---

| | | | |
|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Change** |
| | **2025** | **2024** | $**%** |
| Other (expense) income, net | $(64) | $1331 | (104.8)% |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Change** | **Change** |
| | **2025** | **2024** | **Amount** | **%** |
| Other (expense) income, net | $(108) | $2594 | $(2702) | (104.2)% |

---

Other income, net is primarily attributable to changes in net realized and unrealized foreign exchange transactions resulting from currency rate fluctuations. The prospective classification change for income earned from marketable securities referenced above is the primary factor contributing to the year-over-year variance for other income, net from the same period in 2024.

***Income Tax Expense***

---

| | | | |
|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Change** |
| | **2025** | **2024** | $**%** |
| Income tax expense | $273 | $261 | 4.6% |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Change** | **Change** |
| | **2025** | **2024** | **Amount** | **%** |
| Income tax expense | $427 | $525 | $(98) | 18.7% |

---

We record income tax expense for taxes in our foreign jurisdictions including Finland, Italy, Austria, and South Korea. While our tax expense is largely dependent on the geographic mix of earnings related to our foreign operations, we also record tax expense for uncertain tax positions taken and associated penalties and interest. We consider all available evidence, both positive and negative, in assessing the extent to which a valuation allowance should be applied against our deferred tax assets. Due to the uncertainty with respect to their ultimate realizability, we continue to maintain a full valuation allowance on deferred tax assets in the United States, and a partial valuation allowance in China as of September 30, 2025. Our effective tax rate may vary from period to period based on changes in estimated taxable income or loss by jurisdiction, changes to the valuation allowance, changes to U.S. federal, state or foreign tax laws, future expansion into areas with varying country, state, and local income tax rates and deductibility of certain costs and expenses by jurisdiction.

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On July 4, 2025, the One Big Beautiful Bill Act ("the Act") was signed into law. Some of the tax related provisions of the Act affecting corporations include but are not limited to expensing of domestic research expenses, increasing the limit of the deduction of interest expense deduction to thirty percent of EBITDA, and one hundred percent bonus depreciation on eligible property acquired after January 19, 2025. We are evaluating the impact of the Act on our financial condition and results of operations in future periods. Preliminarily, we do not anticipate a material change to our effective income tax rate or net deferred federal income tax assets as we maintain a full valuation allowance for all U.S. deferred tax assets.

The increase in income tax expense for the three months ended September 30, 2025 compared to the same period in 2024 was driven by an increase in foreign income. The decrease in income tax expense for the nine months ended September 30, 2025 compared to the same period in 2024 was driven by expiring statutes of limitations on unrecognized tax positions in the three months ended June 30, 2025.

**Liquidity and Capital Resources**

We had cash and cash equivalents and restricted cash of $81.4 million and $66.1 million as of September 30, 2025 and December 31, 2024, respectively. In addition, we had marketable securities of $34.7 million and $34.9 million at September 30, 2025 and December 31, 2024, respectively. Our total balance of cash, cash equivalents, restricted cash and marketable securities increased by $15.2 million from December 31, 2024 to September 30, 2025.

For the nine months ended September 30, 2025, our principal sources of liquidity included the draw of $20 million on our LOC and cash collected from customers. We believe our existing sources of liquidity will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months. Our future capital requirements may vary materially from period to period and will depend on many factors, including the timing and extent of spending on research and development efforts, the expansion of sales and marketing activities, the continuing market acceptance of our products and ongoing investments to support the growth of our business. We may in the future enter into arrangements to acquire or invest in complementary businesses, services, technologies and intellectual property rights. From time to time, we may explore additional financing sources which could include equity, equity-linked and debt financing arrangements.

The following table summarizes our cash flows for the periods presented (in thousands):

---

| | | |
|:---|:---|:---|
| | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| | **2025** | **2024** |
| Net cash provided by operating activities | $3812 | $1528 |
| Net cash used in investing activities | (7269) | (10923) |
| Net cash provided by (used in) financing activities | 18519 | (2369) |
| Effect of exchange rate changes on cash | 278 | 12 |
| Net increase (decrease) in cash, cash equivalents and restricted cash | $15340 | $(11752) |

---

***Net Cash Provided by Operating Activities***

During the nine months ended September 30, 2025, net cash provided by operating activities was $3.8 million, which was the result of an $18.6 million net loss and cash used in net working capital of $10.7 million, offset by non-cash expenses totaling $33.1 million related primarily to depreciation, amortization, and stock-based compensation. The cash used in net working capital in the nine months ended September 30, 2025 was driven by a $10.2 million increase in inventory, a $13.2 million increase in accounts receivable and a $1.2 million decrease in deferred revenues. These uses of cash were offset by a $1.9 million increase in accounts payable, a $5.8 million increase in accrued and other long-term liabilities, a $5.9 million decrease in prepaid expense and other assets, net and a $0.9 million decrease in lease liabilities.

***Net Cash Used in Investing Activities***

During the nine months ended September 30, 2025, net cash used in investing activities was $7.3 million, which was driven by the net purchase of marketable securities of $0.3 million and net capital expenditures of $7.0 million.

***Net Cash Provided by Financing Activities***

During the nine months ended September 30, 2025, net cash provided by financing activities was $18.5 million,

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which consisted of a draw of $20.0 million from our LOC and proceeds from stock option exercises and employee stock plan purchases of $1.6 million, partially offset by taxes paid on the net settlement of stock awards of $3.1 million.

***Credit Facilities***

We have a $40.0 million revolving LOC with Banc of California dated September 24, 2018, which is secured by our assets and matures on September 24, 2027. The LOC agreement contains restrictive and financial covenants, including a minimum total cash covenant, and bears an unused credit fee of 0.25% on an annualized basis. The interest rate of 6.25% on the LOC at September 30, 2025 is based on the Prime Rate, minus a margin based on our liquidity levels.

During the nine months ended September 30, 2025, we drew $20.0 million under the LOC to support working capital and general corporate purposes. As of September 30, 2025, $20.0 million was outstanding on the LOC and we were in compliance with all covenants. The remaining $20.0 million unused portion of the LOC is available for borrowing.

**Contractual Obligations**

Other than the draw of $20.0 million on our LOC, there have been no material changes to our contractual obligations as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.

**Inflation**

We do not believe that inflation had a material effect on our business, financial condition or results of operations during the three and nine months ended September 30, 2025. If our costs become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could materially adversely affect our business, financial condition and results of operations.

**ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK** 

For financial market risks related to changes in interest rates and foreign currency exchange rates, reference is made to Item 7A, "Quantitative and Qualitative Disclosures about Market Risk," contained in Part II of our Annual Report on Form 10-K for the year ended December 31, 2024. Other than with respect to the variable interest rate on our LOC due to our draw of $20.0 million on our LOC with Banc of California, our exposure to market risk has not changed materially since December 31, 2024.

We are subject to interest rate risk in connection with the borrowings under our LOC. We have a $40.0 million revolving credit facility. As of September 30, 2025, we had $20.0 million outstanding under the LOC. Borrowings under the LOC bear interest at a per annum rate, depending on certain liquidity thresholds, ranging from the Prime Rate minus 1.0% to the Prime Rate. A 10% increase or decrease in interest rates would result in approximately a $0.1 million change in our obligations under the loan facility.

**ITEM 4. CONTROLS AND PROCEDURES**

**Evaluation of Disclosure Controls and Procedures**

Our management, with the participation of our chief executive officer and our chief financial officer, have evaluated our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, our chief executive officer and our chief financial officer have concluded that, as of such date, our disclosure controls and procedures were, in design and operation, effective.

**Changes in Internal Control over Financial Reporting**

There were no changes in our internal control over financial reporting that occurred during the three months ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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**Limitations on the Effectiveness of Internal Control**

Control systems, including ours, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control systems' objectives are being met. Further, the design of any control systems must reflect the fact that there are resource constraints, and the benefits of all controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Control systems can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based, in part, on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business, but cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial reporting.

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**PART II—OTHER INFORMATION**

**ITEM 1. LEGAL PROCEEDINGS**

For a description of our material pending legal proceedings, see Note 12 - Commitments and Contingencies to our consolidated financial statements included elsewhere in this report.

**ITEM 1A. RISK FACTORS**

For risk factors related to our business, reference is made to Item 1A, "Risk Factors," contained in Part I of our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, except as described below.

***Our inability to manage risks associated with our international customers, operations and supply chain could materially adversely affect our business.***

Our foreign operations and revenues are subject to a number of risks, including the impact of various macroeconomic conditions, unexpected changes in regulatory requirements, certification requirements and environmental and other regulations; reduced protection for intellectual property rights in some countries; potentially adverse tax consequences; political and economic instability; import/export regulations, tariffs and trade barriers; compliance with applicable United States and foreign anti-corruption laws; cultural and management differences; reliance in some jurisdictions on third-party revenues from channel partners; preference for locally produced products; supply chain, shipping, and other logistics complications; and longer accounts receivable collection periods. In particular, the United States has recently enacted new tariffs on a number of countries, including China, and the global economic, political, legal, and regulatory climate is fluid and unpredictable. President Trump has directed various federal agencies to further evaluate key aspects of U.S. trade policy and there has been ongoing discussion and commentary regarding potential significant changes to U.S. trade policies, treaties and tariffs. There continues to exist significant uncertainty about the future relationship between the United States and other countries with respect to such trade policies, treaties and tariffs. These developments, or the perception that any of them could occur, have caused and may continue to cause significant volatility in global financial markets and may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the United States. With manufacturing in the United States and internationally and with a material portion of our revenue derived from foreign customers, we are susceptible to negative impacts from these tariffs or change in trade policies. In addition, new tariffs and other changes in U.S. trade policy could trigger retaliatory actions by affected countries, and certain foreign governments, including the Chinese government (which has imposed retaliatory tariffs on a range of U.S. goods including certain optical and electronic products and components), may impose trade sanctions on certain U.S. manufactured goods. Any of these factors could depress economic activity and restrict our access to third party services as well as disrupt our supply chain, which could materially adversely impact our business.

While we attempt to negotiate prices with suppliers or diversify our supply chain in response to increased tariffs, such efforts may be costly, may not yield immediate results or may be ineffective in fully mitigating the effects of these tariffs. The result of tariffs may include an increase in our prices to our customers, which could reduce the competitiveness of our products and adversely affect our revenue. In addition, if significant tariffs are sustained over a long period, our ability to source products in a cost-effective manner could be impacted, which may have a material adverse effect on our business, financial condition and results of operations.

Our business could also be impacted by international conflicts, terrorist and military activity, civil unrest and public health crisis, which could cause a slowdown in customer orders, lengthen sales cycles, cause customer order cancellations or negatively impact availability of supplies or limit our ability to produce or timely service our installed base of products. Political, economic and monetary instability and changes in governmental regulations or policies, including trade tariffs and protectionism, could materially adversely affect both our ability to effectively operate our foreign offices and the ability of our foreign suppliers to supply us with required materials or services. Any interruption or delay in the supply of our required components, products, materials or services, or our inability to obtain these components, materials, products or services from alternate sources at acceptable prices and within a reasonable amount of time, could impair our ability to meet scheduled product deliveries to our customers and could cause customers to cancel orders. Our failure to manage the foregoing risks associated with our existing and potential future international business operations could materially adversely affect our business, financial condition, results of operations and growth prospects.

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**ITEM 5. OTHER INFORMATION**

*Securities Trading Plans of Directors and Executive Officers*

During our last fiscal quarter, the following director and officer, as defined in Rule 16a-1(f), adopted a "Rule 10b5-1 trading arrangement" as defined in Regulation S-K Item 408, as follows:

On September 15, 2025, Joseph Corso, our Chief Financial Officer, adopted a Rule 10b5-1 trading arrangement providing for the sale from time to time of an aggregate of up to 156,714 shares of our common stock. This trading arrangement, intended to satisfy the affirmative defense in Rule 10b5-1(c), modifies a trading arrangement previously adopted on March 14, 2025. The duration of the trading arrangement is until December 31, 2026, or earlier if all transactions under the trading arrangement are completed.

During our last fiscal quarter ended September 30, 2025, no other director or officer, as defined in Rule 16a-1(f), adopted or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement," each as defined in Regulation S-K Item 408.

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**ITEM 6. EXHIBITS**

(a) Exhibits

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Exhibit<br>Number** | | **Incorporated by Reference** | **Incorporated by Reference** | **Incorporated by Reference** | **Incorporated by Reference** | **Filed<br>Herewith** |
| **Exhibit<br>Number** |<br>**Description** | **Form** | **File No.** | **Exhibit** | **Filing Date** | **Filed<br>Herewith** |
| 10.1 | <u>[2018 Equity Incentive Plan-Form of Restricted Stock Unit Agreement (Performance-Based)](https://www.sec.gov/Archives/edgar/data/1124796/000112479625000125/ex101formofprsuagreement20.htm)</u> | 8-K | 001-38462 | 10.1 | August 15, 2025 |  |
| 10.2 | <u>[Amended and Restated Employment Agreement, dated August 13, 2025, by and between the registrant and Scott Keeney](https://www.sec.gov/Archives/edgar/data/1124796/000112479625000125/ex102skeeney2025amendedceo.htm)</u> | 8-K | 001-38462 | 10.2 | August 15, 2025 |  |
| 31.1 | <u>[Certification of the Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](exhibit311-q3202510xq.htm)</u> |  |  |  |  | X |
| 31.2 | <u>[Certification of the Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](exhibit312-q3202510xq.htm)</u> |  |  |  |  | X |
| 32.1\* | <u>[Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](exhibit321-q3202510xq.htm)</u> |  |  |  |  | X |
| 101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) |  |  |  |  | X |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document |  |  |  |  | X |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. |  |  |  |  | X |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |  |  |  |  | X |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |  |  |  |  | X |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |  |  |  |  | X |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |  |  |  |  | X |

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\* The certifications furnished in Exhibit 32.1 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.

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**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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| | | |
|:---|:---|:---|
| | | **NLIGHT, INC.** |
| | | (Registrant) |
| November 7, 2025 | By: | /s/ SCOTT KEENEY |
| Date |  | Scott Keeney |
|  |  | *President and Chief Executive Officer<br>(Principal Executive Officer)* |
| November 7, 2025 | By: | /s/ JOSEPH CORSO |
| Date |  | Joseph Corso |
|  |  | *Chief Financial Officer<br>(Principal Financial Officer)* |
| November 7, 2025 | By: | /s/ JAMES NIAS |
| Date |  | James Nias |
|  |  | *Chief Accounting Officer<br>(Principal Accounting Officer)* |

---

## Exhibit 31.1

**Exhibit 31.1** 

**NLIGHT, INC.** 

**CERTIFICATION OF CHIEF EXECUTIVE OFFICER**

**PURSUANT TO RULE 13a - 14(a) OR RULE 15d - 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934**

I, Scott Keeney, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.I have reviewed this Quarterly Report on Form 10-Q of nLIGHT, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Based on my knowledge, the 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.The registrant's other certifying officer 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our 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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.The registrant's other certifying officer 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):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 7, 2025 |
| /s/ SCOTT KEENEY |
| Scott Keeney |
| President, Chief Executive Officer and Chairman (Principal Executive Officer) |

---

## Exhibit 31.2

**Exhibit 31.2**

**NLIGHT, INC.** 

**CERTIFICATION OF CHIEF FINANCIAL OFFICER**

**PURSUANT TO RULE 13a - 14(a) OR RULE 15d - 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934**

I, Joseph Corso, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.I have reviewed this Quarterly Report on Form 10-Q of nLIGHT, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Based on my knowledge, the 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.The registrant's other certifying officer 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our 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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.The registrant's other certifying officer 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):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 7, 2025 |
| /s/ JOSEPH CORSO |
| Joseph Corso |
| Chief Financial Officer (Principal Financial Officer) |

---

## Exhibit 32.1

**Exhibit 32.1**

**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 filing of the Quarterly Report on Form 10-Q for the fiscal year ended September 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report") by nLIGHT, Inc. (the "Company"), Scott Keeney, as the Chief Executive Officer of the Company, and Joseph Corso, as the Chief Financial Officer of the Company, each hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 7, 2025

---

| |
|:---|
| /s/ SCOTT KEENEY |
| Scott Keeney |
| President, Chief Executive Officer and Chairman (Principal Executive Officer) |

---

---

| |
|:---|
| /s/ JOSEPH CORSO |
| Joseph Corso |
| Chief Financial Officer (Principal Financial Officer) |

---

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies the Report to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Report), irrespective of any general incorporation language contained in such filing.

<br>