LightPath Technologies Awarded Phase 2 Funding in U.S. Defense Department Partnership to Qualify Additional Germanium Substitutes

Rhea-AI Summary

LightPath Technologies (NASDAQ: LPTH) has been awarded Phase 2 funding by the U.S. Department of Defense to qualify additional BlackDiamond (BD) chalcogenide glasses as substitutes for germanium. This follows the successful Phase 1 qualification of three proprietary BD glasses, which have already replaced germanium in several defense programs. The Phase 2 funding of approximately $0.5 million will cover the qualification of six more materials to MRL-9 (Material Readiness Level).

LightPath's BD materials offer superior performance to germanium in infrared imaging systems, addressing supply chain concerns due to Chinese export restrictions. The materials exhibit unique properties, including a negative thermo-optic coefficient and multi-spectral capabilities, enabling better performance and reduced size, weight, and cost in defense systems.

Positive

• Awarded Phase 2 funding of $0.5 million from U.S. Department of Defense
• Successful Phase 1 qualification led to replacement of germanium in several defense programs
• BlackDiamond materials offer superior performance to germanium in infrared imaging systems
• Addresses supply chain concerns due to Chinese export restrictions on germanium
• New materials designed into multiple programs of record
• Potential for expanded use cases and new cutting-edge designs

Negative

• None.

Insights

Defense Technology Analyst

This news is highly impactful for LightPath Technologies and the defense industry. The Phase 2 funding of $0.5 million from the DoD for qualifying additional BlackDiamond materials is a significant milestone. It addresses critical supply chain concerns related to Germanium, which has seen a 65% price increase since January 2023 due to Chinese export restrictions.

The successful qualification of new BlackDiamond materials in Phase 1 has already led to their inclusion in several programs of record, completely replacing Germanium. This demonstrates the material's viability and potential for widespread adoption in defense applications. The unique properties of these materials, such as negative thermo-optic coefficients and multi-spectral capabilities, offer significant advantages over traditional Germanium-based systems.

For investors, this development signals strong growth potential in LightPath's defense sector business. The company's proprietary technology addresses a critical need in the industry, potentially leading to increased contracts and revenue streams from defense customers. The ongoing partnership with the DoD also enhances LightPath's credibility and market position in the defense optics sector.

Materials Science Expert

The qualification of LightPath's BlackDiamond materials as a Germanium substitute is a significant technological advancement. These chalcogenide glasses offer superior performance in infrared imaging systems, addressing both supply chain vulnerabilities and technical limitations of Germanium-based optics.

Key advantages include:

• Athermalization capabilities due to negative thermo-optic coefficients
• Multi-spectral functionality across all four infrared bands
• Potential for reduced size, weight and cost in optical systems

The ongoing qualification process to MRL-9 (Material Readiness Level 9) is crucial, as it signifies the highest level of material readiness for defense applications. This could open doors for widespread adoption in various defense programs, potentially disrupting the current Germanium-dominated market.

From an investor perspective, LightPath's exclusive license for these materials from the Naval Research Laboratories provides a strong competitive advantage and intellectual property protection, which could translate into long-term market leadership in defense optics.

Strategic Defense Partnership Follows Successful Phase 1 Qualification of Additional LightPath Proprietary BlackDiamond™ Material Variants

ORLANDO, Fla., Oct. 3, 2024 /PRNewswire/ -- LightPath Technologies, Inc. (NASDAQ: LPTH) ("LightPath," the "Company," or "we"), a leading global, vertically integrated provider of thermal imaging cores, custom optical assemblies, photonics and infrared solutions for the industrial, commercial, defense, telecommunications, and medical industries, today announced the U.S. Department of Defense ("DoD") via the Defense Logistics Agency, Strategic Materials ("DLA") has awarded Phase 2 funding to support the qualification of additional LightPath Black Diamond ("BD") chalcogenide glasses as substitute to germanium.

Qualification is a process in which suppliers demonstrate that their materials meet the required specifications and performance standards (MRL, Material Readiness Level) set by the DLA for use in defense applications. DLA qualification funding is made in two phases. The first phase of $250,000, which commenced in July 2023, was earmarked explicitly for 3 of LightPath's proprietary Black Diamond glasses, licensed exclusively from the US Naval Research Laboratories (NRL) as a substitute for Germanium. In this phase, LightPath completed qualification of new materials, which are now designed into several programs of record, and have completely replaced Germanium in those programs.

The second phase covers the remaining six materials with funding totaling approximately $0.5 million, which will qualify the materials to MRL-9 (Material Readiness Level), an important milestone for prospective defense customers. These materials are all in addition to LightPath's BD6 material which is already fully qualified and field deployed in multiple systems.

LightPath's proprietary BlackDiamond materials can uniquely be used instead of Germanium in infrared imaging systems while concurrently offering superior performance, which addresses end-customer supply chain concerns given the Chinese export restrictions on Germanium announced in 2023. China controls the majority of the global market for Germanium, with the U.S. relying chiefly on imported Germanium for domestic use, driving an approximate 65% increase in the price of Germanium since January 2023.

"We initiated Phase One of this qualification program with the DLA after multiple stakeholders inside the DoD realized the urgent need to find replacements for Germanium," said Sam Rubin, President and Chief Executive Officer of LightPath. "Phase One was significant success, resulting in the qualification of new proprietary BlackDiamond materials. These materials are now designed into multiple programs of record and demonstrate significant additional value beyond simply replacing Germanium."

"These new materials exhibit unique properties such as a negative thermo-optic coefficient, an important attribute for making systems athermalized, enabling the design of devices that are unaffected by temperature changes. These are also true multi-spectral materials that can uniquely be used across all four infrared imaging bands without the need for a separate camera for each spectral band, as is the case with the legacy systems used today. Due to the inherently superior qualities of our BD materials, customers have been able to achieve better performance alongside reduced size, weight and total systems cost as compared to legacy Germanium-based systems.

"In Phase Two, LightPath will continue working with DLA to qualify additional BD glasses to be included in DoD systems. Additional qualification of BD glasses will expand the potential use cases of our proprietary materials, leading to new, cutting-edge designs, similar to the example demonstrated by 'Mantis', our multi-spectral camera. We look forward to progressing our ongoing partnership as we seek to qualify our newest proprietary BD materials with the DLA," concluded Rubin.

About LightPath Technologies

LightPath Technologies, Inc. (NASDAQ:LPTH) is a leading global, vertically integrated provider of optics, photonics and infrared solutions for the industrial, commercial, defense, telecommunications, and medical industries. LightPath designs and manufactures proprietary optical and infrared components including molded glass aspheric lenses and assemblies, custom molded glass freeform lenses, infrared lenses and thermal imaging assemblies, fused fiber collimators, and proprietary Black Diamond™ ("BD") chalcogenide-based glass lenses. LightPath also offers custom optical assemblies, including full engineering design support. The Company is headquartered in Orlando, Florida, with manufacturing and sales offices in Dallas Texas, Latvia and China.

LightPath's wholly-owned subsidiary, Visimid Technologies, was acquired in July 2023, and specializes in the design and development of customized infrared cameras, for the industrial and defense industries. Such customized cameras are often sold together with customized optical assemblies from LightPath.

LightPath's wholly-owned subsidiary, ISP Optics Corporation, manufactures a full range of infrared products from high-performance MWIR and LWIR lenses and lens assemblies. ISP's infrared lens assembly product line includes athermal lens systems used in cooled and un-cooled thermal imaging cameras. Manufacturing is performed in-house to provide precision optical components including spherical, aspherical and diffractive coated infrared lenses.

For more information on LightPath and its businesses, please visit www.lightpath.com.

Forward-Looking Statements

This press release includes statements that constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "forecast," "guidance," "plan," "estimate," "will," "would," "project," "maintain," "intend," "expect," "anticipate," "prospect," "strategy," "future," "likely," "may," "should," "believe," "continue," "opportunity," "potential," and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements are based on information available at the time the statements are made and/or management's good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or suggested by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the impact of varying demand for the Company products; the ability of the Company to obtain needed raw materials and components from its suppliers; actions governments, businesses, and individuals take in response to the pandemic, including restrictions on onsite commercial interactions; general economic uncertainty in key global markets and a worsening of global economic conditions or low levels of economic growth; geopolitical tensions, the Russian-Ukraine conflict, and the Hamas/Israel war; the effects of steps that the Company could take to reduce operating costs; the inability of the Company to sustain profitable sales growth, convert inventory to cash, or reduce its costs to maintain competitive prices for its products; circumstances or developments that may make the Company unable to implement or realize the anticipated benefits, or that may increase the costs, of its current and planned business initiatives; and those factors detailed by LightPath Technologies, Inc. in its public filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K and Quarterly Reports on 10-Q. Should one or more of these risks, uncertainties, or facts materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by the forward-looking statements contained herein. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Except as required under the federal securities laws and the rules and regulations of the Securities and Exchange Commission, we do not have any intention or obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

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SOURCE LightPath Technologies

FAQ

What is the purpose of the Phase 2 funding awarded to LightPath Technologies (LPTH)?

The Phase 2 funding of approximately $0.5 million is to support the qualification of six additional BlackDiamond chalcogenide glasses as substitutes for germanium in defense applications, aiming to reach MRL-9 (Material Readiness Level).

How does LightPath's BlackDiamond material compare to germanium in infrared imaging systems?

LightPath's BlackDiamond materials offer superior performance to germanium, with unique properties such as a negative thermo-optic coefficient and multi-spectral capabilities. This enables better performance, reduced size, weight, and total system cost compared to legacy germanium-based systems.

What was the outcome of the Phase 1 qualification for LightPath Technologies (LPTH)?

The Phase 1 qualification, which commenced in July 2023 with $250,000 funding, successfully qualified three proprietary BlackDiamond glasses. These materials have now been designed into several programs of record and have completely replaced germanium in those programs.

How does the development of BlackDiamond materials by LightPath (LPTH) address supply chain concerns?

LightPath's BlackDiamond materials address supply chain concerns arising from Chinese export restrictions on germanium announced in 2023. China controls the majority of the global germanium market, and the restrictions have led to a 65% price increase since January 2023.