Defence Markets

First quarter in a LONG while the sequential dilution was minimal as well 69.9 to 70.1 $LPTH While not fun to be diluted they at least raised cash at much higher PPS levels, if they need to now it would have been much worse There is still 3M shares outstanding from the Series G owned by North Run but at this point that is only 4% dilution at some point in the future whether near term or long term, Their last milestone to G5 ($9M) WILL hit first few weeks of January 2027 (not the quarter we are currently in but the next) and then barring a new acquisition they will be done with all the historical payouts and diluted. These payouts are higher the better the acquired company did, and while lost in the mix, G5 transformed this company dramatically. $LPTH now trades at 7x trailing sales (77M) in the heart of a bear market for defense. Just over year ago it had 37M in sales; with less share outstanding So it has doubled (literally) its revenue and while not the same valuation due to the share dilution, its hardly been rewarded year over year at this PPS Question from here is are we going into another year of defense bear market or does institutional money rotate back into this group at some point. Not only do we need to allocate money into new programs focused on autonomy to keep up with the Chinese, hell Russians at this point, we need to replenish stocks of things used up in Iran. I am going with the thought the bogeyman of Democrats killing off every major defense program will eventually go away and valuations improve across the group. That said, no company came and made a bid for $LPTH even at $6, or $7 (could take them out at 100% premium and still be below prices of many months earlier this year) so I am uninterested in hearing of that as a catalyst go forward. Lack of retail posts, lack of analyst interest are other things going into favor here. Also everyone has forgotten about NGSRI even as a catalyst which should be here by April May at the latest. (and no that is not going to bring bonkers money in the first few quarters either) but 2028 is going to be about that launch and then we get some space initiatives that will begin to roll out later that year along with all this drone, CUAS, and everything else going bonkers right now. Obviously been a cold winter for defense market and not fun of late but just some general thoughts.

Assemblies and modules the big grower this Q, which is what one wants to see - that's the best margins $LPTH Has creeped now to >50% of the entire business Complete transformation of what the co was 2 years ago $20.8M revenue replaces $15.1M from a year ago, trailing price to sales now 7x. YoY comparables going to start getting tougher because they were growing 70-120% and it's not a private enterprise widget company, it has lumpiness to it due to nature of defense. Now we see next week or two how much @skrubin buys in the open market once black out period ends, as he told @RADHardTech he would be a buyer if he was allowed and that was at higher prices than 'here' in AH.