Lightpath Technologies (LPTH) Announces BD6 DLC Lenses Granted Military Qualification

LightPath Technologies, Inc. (NASDAQ: LPTH), a leading vertically integrated global manufacturer and integrator of proprietary optical and infrared components and high-level assemblies, today announced that its Diamond Like Carbon ("DLC") coating process for its proprietary Black Diamond^TM ("BD6") chalcogenide-based material to manufacture infrared ("IR") lenses has now been qualified for all U.S. military applications.

Sam Rubin, President and Chief Executive Officer of LightPath Technologies, said, "Military qualification of our DLC coating process for BD6 IR lenses is a very important technological and manufacturing milestone for the Company. Commercial production of high durability DLC infrared coatings for optics made at the Company's facilities in Riga, Latvia commenced in early 2021, increasing our capacity for this technology already in place in our Orlando headquarters. The U.S. military qualification, which typically sets the pace globally, for DLC coating required more rigorous testing and was recently approved after a lengthy review process.

"As a result of receiving military qualification, we may now tap into the vast defense market with an even more compelling value proposition. The typical military contract requires high volume production quantities and competitively priced materials, which we believe our molding technology with BD6 glass and now military-qualified coating process allows. There are few, if any, optical technology companies anywhere in the world that can rival our high volume, vertically integrated, end-to-end production capabilities. We are clearly becoming an increasingly important partner for commercial development of engineered solutions for Department of Defense agencies, Defense Industrial Base (DIB), prime contractors and other IR optical imaging businesses."

The receipt of DLC coating military qualification dovetails with the Company's recently secured exclusive optical usage license to manufacture products using the IR patent portfolio developed and owned by the United States Navy's U.S. Naval Research Laboratory ("NRL"). DLC IR coatings can be applied to optics made from materials such as germanium, silicon, and chalcogenides, further bolstering LightPath's reach into the military and defense markets.

The agreement with NRL provides LightPath with access to unique chalcogenide glass compositions to develop more comprehensive optical systems targeting some of the fastest growing IR markets, including the IR imaging market which is expected to grow from $5.8 billion in 2020 to $8.3 billion by 2025¹ and the multispectral imaging market which is estimated to grow from $10.9 billion in 2020 to $17.6 billion by 2025².

LightPath's proprietary BD6 material is an ideal replacement for germanium optics and has many superior characteristics, such as it is lower cost, contains no rare earths, is lighter and has a wider thermal operating range. BD6 glass is a softer material which had previously been a deterrent to its use in applications where exposure to the elements was required, such as many defense use cases. LightPath's recent military qualification of DLC coating resolves this issue by stabilizing the outer surface of the lens and making it essentially impenetrable to external factors.

DLC coatings protect infrared lenses against harsh environmental conditions and are a requirement for many applications that demand resilient coatings that can withstand severe abrasion. Applications such as thermal imaging for military and defense applications benefit from the protections offered by DLC coatings. Other addressable markets include firefighting, space applications, including satellites and drones, IR imaging, multispectral imaging, thermography, medical imaging and related diagnostics, security/surveillance, and freeform optics for augmented and virtual reality (AR and VR) headgear. Through the implementation of LightPath's ongoing new product development and capital investment strategies, optical fabrication, optical assembly, and high-performance coatings can now all be done at a single facility, reducing lead times and expanding coating capacity worldwide to accommodate current and anticipated demand.

LightPath intends to substantially manufacture NRL IR products in the U.S. at the Company's expanding headquarters in Orlando, Florida. Current proprietary BD6 material is being made internally at LightPath's Orlando facilities, alongside multiple molding presses, processing equipment for high efficiency anti-reflective coatings and DLC machines for added lens protection. LightPath is making over 200 kilos per week of chalcogenide glass and may increase its volumetric capacity as demand increases.

LightPath's BD6 glass for IR applications is made from chalcogenide materials which are increasingly replacing germanium and other crystal materials for IR optics due to lower cost. Germanium, in particular, has been subject to rising or volatile pricing due to the material being primarily sourced from China. LightPath began to replace its IR lens raw materials by offering first BD2, and later BD6, a general-purpose chalcogenide glass. Due to BD6 or chalcogenide glass being lighter and more malleable, LightPath is able to mold lenses for higher quantity commercial applications as compared to slower, more labor intensive and more costly diamond turning of lenses made from germanium glass which is a harder substance. The NRL glasses offer a wide range of refractive indices and wavelength dispersion for optimal chromatic correction. In addition, various thermal constants and mechanical properties give optical designers many choices for athermalizing optical designs. NRL glasses are ideally suited for the infrared imaging market which is estimated to grow by over 40% through 2025, which includes thermal imaging cameras operating in the medium wave to long wave IR bands and for applications such as thermography, diagnostics, security and surveillance.

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