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 UNITED
STATES

 SECURITIES
AND EXCHANGE COMMISSION

 Washington,
D.C. 20549

 FORM

 (Mark
One)

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

 For
the fiscal year ended December 31, 2023

 OR

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

 For
the transition period from

 Commission
file number 001-41034

 (Exact
name of registrant as specified in its charter)

 Delaware

 87-0816957

 (State
 or other jurisdiction of

 incorporation
 or organization)

 (I.R.S.
 Employer

 Identification
 No.)

 Lee Rd.

 Rochester,
 New York

 14606

 (Address
 of Principal Executive Offices)

 (Zip
 Code)

 (585) 768-2513

 Registrant's
telephone number, including area code

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

 Title
 of each class

 Trading
 Symbol(s)

 Name
 of each exchange on which registered

 Common
 stock, par value $0.0001 per share

 OPTX

 The
 Nasdaq Capital Market

 Redeemable
 Warrants, exercisable for common stock at an exercise price of $11.50 per share, subject to adjustment

 OPTXW

 The
 Nasdaq Capital Market

 Securities
registered pursuant to Section 12(g) of the Act: None.

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No

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. Yes No

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
 Yes No

by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company"
in Rule 12b-2 of the Exchange Act. (Check one):

 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.

by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to Section 240.10D-1(b).

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

 The
aggregate market value of voting stock held by non-affiliates of the Registrant on December 31, 2023, based on the closing price of $5.03
for shares of the registrant's common stock as reported by the Nasdaq Capital Market, was approximately $ 184.5 million. Shares
of common stock beneficially owned by each executive officer, director, and holder of more than 10% of our common stock have been excluded
in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination
for other purposes.

 As
of May 22, 2024, there were 36,688,266 shares of the registrant's common stock, par value $0.0001 per share, issued and outstanding.

 Documents
incorporated by reference:

 Portions
of the registrant's Proxy Statement relating to the 2024 Annual Meeting of Stockholders, scheduled to be filed with the Securities
and Exchange Commission within 120 days after the end of the registrant's fiscal year ended December 31, 2023, are incorporated
by reference into Part III of this Annual Report on Form 10-K.

 TABLE
OF CONTENTS

 Page

 Part
 I

 Item
 1. Business

 Item
 1A. Risk Factors

 Item
 1B. Unresolved Staff Comments

 Item 1C. Cybersecurity

 Item
 2. Properties

 Item
 3. Legal Proceedings

 Item
 4. Mine Safety Disclosures

 Part
 II

 Item
 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item
 6. [Reserved]

 Item
 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item
 7A. Quantitative and Qualitative Disclosures about Market Risk

 Item
 8. Financial Statements and Supplementary Data

 Item
 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item
 9A. Controls and Procedures

 Item
 9B. Other Information

 Item
 9C. Disclosure Regarding Foreign Jurisdiction that Prevent Inspections

 Part
 III

 Item
 10. Directors, Executive Officers and Corporate Governance

 Item
 11. Executive Compensation

 Item
 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item
 13. Certain Relationships and Related Transactions, and Director Independence

 Item
 14. Principal Accountant Fees and Services

 Part
 IV

 Item
 15. Exhibit and Financial Statement Schedules

 Item
 16. Form 10-K Summary

 SIGNATURES

 i

 CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS

 This
Annual Report on Form 10-K contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 under Section 27A of the Securities Act of 1933, as amended (the " Securities Act "),
and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements with respect to our
beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions and future performance, and involve
known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause our actual results, performance
or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking
statements. All statements other than statements of historical fact are statements that could be forward-looking statements. You can
identify these forward-looking statements through our use of words such as "may," "can," "anticipate,"
"assume," "should," "indicate," "would," "believe," "contemplate,"
"expect," "seek," "estimate," "continue," "plan," "point to,"
"project," "predict," "could," "intend," "target," "potential"
and other similar words and expressions of the future.

 There
are a number of important factors that could cause the actual results to differ materially from those expressed in any forward-looking
statement made by us. These factors include, but are not limited to:

 our
 ability to recognize the anticipated benefits of our recent Business Combination (as defined herein), which may be affected by, among
 other things, the factors listed below;

 our
 ability to successfully increase market penetration into target markets;

 the
 failure of the addressable markets that we intend to target to grow as expected;

 the
 loss of any members of our senior management team or other key personnel;

 the
 loss of any relationships with key suppliers, including suppliers in China;

 the
 loss of any relationships with key customers;

 our
 ability to protect our patents and other intellectual property;

 the
 failure to successfully optimize solid-state cells or to produce commercially viable solid-state cells in a timely manner or at all,
 or to scale to mass production;

 changes
 in applicable laws or regulations;

 our
 ability to maintain the listing of our common stock on the Nasdaq Capital Market and Public Warrants (as defined herein) on the
 Nasdaq Capital Market;

 the
 possibility that we may be adversely affected by other economic, business and/or competitive factors (including an economic slowdown
 or inflationary pressures);

 the
 impact of the COVID-19 pandemic, including any mutations or variants thereof, and its effect on business and financial conditions;

 our
 ability to raise additional capital to fund our inorganic growth;

 our
 ability to generate revenue from future product sales and our ability to maintain profitability;

 the
 accuracy of our projections and estimates regarding our expenses, capital requirements, cash utilization, and need for additional
 financing;

 developments
 relating to our competitors and our industry;

 our
 ability to engage target customers and successfully retain these customers for future orders; and

 our
 current dependence on a single manufacturing facility.

 The
foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or
risk factors that we are faced with that may cause our actual results to differ from those anticipated in such forward-looking statements.
Please see " Part I—Item 1A—Risk Factors " for additional risks which could adversely impact our business
and financial performance.

 All
forward-looking statements are expressly qualified in their entirety by this cautionary notice. You are cautioned not to place undue
reliance on any forward-looking statements, which speak only as of the date of this report or the date of the document incorporated by
reference into this report. We have no obligation, and expressly disclaims any obligation, to update, revise or correct any of the forward-looking
statements, whether as a result of new information, future events or otherwise. We have expressed our expectations, beliefs and projections
in good faith and believe they have a reasonable basis. However, we cannot assure you that our expectations, beliefs or projections will
result or be achieved or accomplished.

 ii

 Part
I

 Item
1. Business

 All
references in this report to "Syntec Optics," the "Company," "we," "us," or
"our" mean Syntec Optics Holdings, Inc. and its subsidiaries unless stated otherwise or the context otherwise
indicates.

 Overview

Optics believes that photon enabled technologies are more than just a trend. Syntec Optics goal is to deliver impactful solutions for optics and
photonics enabled solutions globally. We believe that the innovative design for manufacturing of our optics and photonics enabling products
is ideally suited for the demands of modern OEMs who rely on opto-electronics, light enabled devices, and intelligence that require high-precision
and reliability. Ultimately, our vertically integrated advanced manufacturing platform offers our clients across several end markets
competitively priced and disruptive light-enabled technologies and sub-systems.

Optics was formed more than two decades ago from the aggregation of three advanced manufacturing companies (Wordingham Machine Co., Inc.,
Rochester Tool and Mold, Inc. and Syntec Technologies, Inc.) that were started in the 1980s. In 2000, Syntec Technologies, Inc created
the "doing business as" name of Syntec Optics to unify the three companies' respective offerings under a single trade
name. Wordingham Machine Co., Inc, and Rochester Tool and Mold, Inc. became wholly owned subsidiaries of Syntec Technologies, Inc. in
2018 and the three companies legally merged in December 2022 as Syntec Optics, Inc. Syntec Optics has addressed the optical needs of
customers in defense, consumer, and biomedical industries. Over the past 20 years, Syntec has been based in the Greater Rochester, New
York area, and steadily growing and developing the unifying platform. Our intellectual property is protected with a portfolio of over
4 issued and/or pending patents, with several proprietary trade secrets surrounding our advanced manufacturing techniques. One in five
employees has been with Syntec Optics for over a decade.

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

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

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

had focused on three key end markets of defense, biomedical, and consumer all with several mission-critical applications with strong
tailwinds, then also added communications in 2023. We believe these end markets to be acyclical based upon the company having positive aggregate cash flow for the past
decade in spite of economic downturns. We believe the consistency of revenues over the past decade of operations, independent of the
trends of the general economy, and the mission-critical nature of our product offerings, are our bases that these markets are
acyclical. We believe our platform is well positioned as the foundation for further organic and inorganic growth with quality
earnings and high margin offerings.

 According to the SPIE Optics and Photonics 2022 Industry Report, optics
is currently enabling 11% of the global economy, from smart phone cameras and extended reality devices to low orbit satellite telescopes
to keeping our soldiers safe with night vision devices and patients healthy with intelligent light. This 11% figure represents the estimated
value of the global optics and photonics products relative to annual global gross domestic product. As the world transitions to further
adopt optically and photonically enabled products, we will continue our mission of developing innovative technology to serve these markets
with affordable high-performance products globally. We intend to continue to focus on our core competencies of providing innovative technology,
expanding our brand portfolio and providing affordable, sustainable and accessible optics and photonics enablers, all while being designed
and manufactured in the United States.

 Industry
Background

 For
decades, optics and photonics have been enabling end market products worldwide. Syntec's ground-breaking work in
polymer-based optics starting in 2000 has numerous advantages over the incumbent glass-based optics used in today's markets:

 Cost
 – Possible 50-150x savings over glass

 Lightweight
 – Ideal for head mounted applications

 Design
 flexibilit y – Greater optical surface options

 Bio-compatible
 – Medical field benefits

 Ease
 of assembly – Ability to design in alignment features

 Design
 in features – Eliminate mounting hardware

 Performs
 better than glass – Functional parameters such as clarity, focus, contrast, brightness

 Superior
 scratch resistance – Reduce damage probability

 Upgradability
 – Reduced replacement/retrofit field cost

 Repeatability
 – Same quality & performance every time

 Tailwinds
have propelled Syntec's innovative hybrid optics where outside durable glass elements are unchanged but inside elements of optical
assemblies are changed to polymers providing lighter weight advantage. Soldiers want lower weight on helmets that are now overloaded
with devices.

 Addressable
Markets

 Optics
and Photonics Industry Report 2020 estimated that the manufacturing sector contributes 30% of global gross domestic product ("GDP")
annually, or an estimated $26.3 trillion, and optics and photonics comprise a substantial amount of this market. The optics and photonics
market, the value of light-enabled products and services, is estimated to be between $7 trillion and $10 trillion annually, and represents
roughly 11% of the world's economy. This 11% figure represents the estimated value of the global optics and photonics products
relative to annual global gross domestic product. Within this end-market, it is estimated that global annual revenue for photonics-enabled
products and services had exceeded $2 trillion in 2019. Photonics touches most sectors of our economy including consumer electronics
(barcode scanners, DVD players, TV remote controls), telecommunications (fiber optics, lasers, switches), health (eye surgery, biomedical
instruments, and imaging), industrial (laser cutting and machining), Defense and Security (night vision, infrared cameras, remote sensing,
aiming) and entertainment (holography and cinema projection). We believe accelerating optics and photonics innovation will continue to
drive economic growth and increase its share of the global GDP.

 The
most recent review from the Optics & Photonics 2020 Industry Report valued the 2019 photonics-enabled products and services at $2.02
trillion – an increase of 34% over the seven-year period, and a compound annual growth (CAGR) rate of 4.2%, from 2012 to 2019,
shown below by end market.

 The
potential use of photonics in varied industries is fueling growth of the optics and photonics market. We believe sectors including telecom,
transportation, healthcare, energy, aerospace, security, defense & space exploration, consumer, retail, electronics, food & agriculture,
artificial intelligence software, and robotics are in the early stages of a dramatic transformation of scope and scale due to the unprecedented
developments in advanced manufacturing of optics and photonics products, sub-systems, components, and materials. Continued mobility,
intelligence, automation, sensing, and safety needs will accelerate in years to come, which will create a large market opportunity for
such enabling businesses at the forefront of optics and photonics. The global optics and photonics sectors have experienced demand increasing
use of photonics in various applications.

 The
Optics & Photonics 2020 Industry Report estimated revenue growth for five of the top areas based on CAGR from 2012 to 2019. These areas
are listed below, as examples of verticals that we intend to focus on:

 Sensing,
 monitoring, and control (+10%), autonomous systems and the internet-of-things continued to create demand for a wide variety
 of photonic sensors. Self-driving cars, drones, and other robotics systems utilize a wide range of photonic sensors and imaging systems,
 some of which are increasingly benefiting from embedded artificial intelligence. Developments in the emerging field of quantum technology
 should drive major advances in metrology, sensing, communications, and computing, creating what we believe will be a multitude of
 new opportunities in photonics.

 Advanced
 manufacturing (+8%), gains in this segment were led by lasers for materials processing while robotics and vision technologies
 maintained their momentum as did implementation of 3D printing/additive manufacturing. Photonics-based production tools including
 lasers, optical metrology, and machine vision combined with adoption of rapid prototyping and Industry 4.0 are driving big manufacturing
 changes in industries like aerospace and automobiles.

 Semiconductor
 processing (+8%), driven by demand for optical processing and metrology equipment. Opto-electronics and mobility, integrated
 photonics circuits are beginning to address applications that were typically addressed by integrated electronic circuits. POC Biosensing,
 terabit internet, lidar based radar, and telecom are areas that are being disrupted due to reduced cost, size, weight, and power
 consumption while still improving performance and reliability. Design, develop, and manufacturing processes are similar to micro-electronics.
 Integrated photonics is envisioned to play the role in industry 4.0 what electronic integrated circuits did in industry 3.0.

 BioMedical
 (+13%), growth in diagnostic imaging, digital pathology, in vitro diagnostics, and point-of-care diagnostics led broad-based
 gains across this segment. Food safety testing also saw a significant uptick. Looking ahead, cost-effective photonics-based diagnostic
 and therapeutic biomedical devices are achieving higher market penetration.

 Defense,
 safety, and security (+10%), driven by gains in more than 30 sub-segments combined with substantial upswings in video surveillance,
 perimeter security and sensing, and investment in equipment for directed energy systems. Infrared systems, hyperspectral imaging,
 and laser-based countermeasures are all deployed, while laser weapons are emerging as a real near-term possibility. We believe there
 may be increased demand for aiming, scoping, and targeting using optics and photonics.

 Revolutionary
Advanced Manufacturing Tailwinds

 This
fourth industrial revolution ("Industry 4.0"), which encompasses the internet-of-things and smart manufacturing, marries
physical production and operations with digital technology, machine learning / artificial intelligence and big data to create a more
holistic and connected ecosystem for companies that focus on manufacturing and supply chain management. As Industry 4.0 continues to
bring changes in manufacturing, technological advancements leading to innovative photonics-enabled products, and photonics are improving
manufacturing performance with photonics-enabled technology. We expect Industry 4.0 to transform production by driving faster, more flexible
and more efficient processes which will be monetized by companies through the production of higher-quality goods at reduced costs.

 Beyond
the traditional industrial automation, new transforming products from unmanned aircrafts and driverless cars, smart robots in the operating
rooms and artificial intelligence of organ and tissue imaging, to augmented and virtual reality increasingly require optics and photonics
imagers, sensors, and detectors. We expect this trend to be especially pronounced in the United States, which has seen automation as
a way to be globally competitive in spite of rising wages.

 Optics
and photonics are an integral aspect of the ongoing advancement of traditional manufacturing and industrial practices. Optics and photonics
can reduce cost, size, weight, and power consumption in all spheres of technology that is making us smarter. These include our content,
its context, inter-connection for exchange, and various types of content – from imaging to detection and sensing.

Platform Overview

 Our
unifying platform is a key differentiator. We believe the unifying platform is an aggregation of horizontal and vertical optics and photonics
capabilities that span through the value-chain across materials, spectrum and advanced manufacturing processes. This unifying platform
works by providing customers with several manufacturing capabilities in one location that saves time and reduces logistical burdens and
costs. Adding with the acquisition of Wordingham in 1999 to the base platform of Syntec brought precision machining capabilities for
difficult to manufacture mechanical components for optics and photonics. The acquisition of Rochester Tool and Mold provided control
over making very precise tools for molded polymer components and molded glass components in hybrid systems. Close collaboration of these
acquired entities began in 2000 and then all three acquired companies moved into one building in the city of Rochester by 2016. Investments
from the cash flow and the unification was achieved to offer customers vertical and horizontal integrated critical capabilities under
one-roof for mission critical sub-system solutions with well demonstrated metrology in both clean room optics and electro-optics assemblies.
Thin film coating laboratory and glass molding technique was developed from grounds up organically to further support the optical element
performances. Altogether, such a vertically and horizontal integrated company offers a further unification platform for consolidation
through further acquisition in a fragmented industry of advanced manufacturers for mission critical application of optics and photonics
even beyond biomedical, defense, and consumer end markets.

Optics has built its brand over two decades and is known as a leader to OEMs in optics and photonics sub-systems production. We won the
Accelerator Award in 2004 from Raytheon by meeting the challenge of delivering alpha and beta samples fast and ramping up production
in groundbreaking manufacturing of components and sub-systems for laser guides for missiles. The dome was made from glass-filled polymer
that replaced Sapphire for domes that had to not only meet high optical performance expected from windows, but be light weight, less
expensive and rapidly scale. Ever since, we have ramped up rapidly many devices ranging from blood analyzers for patients in hospitals
to night vison goggles to keep soldiers safe. The brand has been very visible at the pivotal show for optics and photonics solution providers
annually in San Francisco's Photonics West trade show.

 We
currently offer a number of vertically integrated advanced manufacturing processes that deliver to our customers optically enabled products
serving mission critical applications.

 Syntec's
vertical integration strategy delivers many advantages, including greater economies of scale, lower variable production costs, decreased
logistics costs and quality concerns. Advantages of vertical integration specific at Syntec include:

 Positive
differentiation is created.

 Vertical
 integration creates predictability because more information is available to our team internally. There is more access to supply chain
 and production inputs. By being in more control, from start to finish, Syntec can function with stability and adapt quickly to changes
 so that the most effective and profitable results can be achieved.

 Asset
investments can focus on specialization.

 Instead
 of seeking vendors and contractors with specific skill sets, vertical integration allows us to invest into internal assets that can
 specialize in the skill set that is required. This allows us to differentiate ourselves from others within its industry, creating
 a specific brand message and value proposition that resonates consistently with our customer base.

 Transaction
costs are lower throughout the supply chain.

 With
 a high level of vertical integration, we can reduce the transaction costs that occur throughout our supply chain. This is done by
 removing cascaded margins imposed when dealing with suppliers and vendors that are not part of our integrated process.

 Quality
assurance can be built into the system.

 Vertical
 integration allows us to put more eyes on the quality of what is being produced. From the initial supply to the final sale, a better
 Q/A process within our system creates a value proposition that is more reliable. In return, greater customer satisfaction occurs,
 which builds brand loyalty and return revenues.

 It
opens new markets.

 Vertical
 Integration can open new markets to the business. By partnering with or purchasing other vendors, proprietary information, property,
 or technologies can create local access that may have been otherwise unavailable. When this occurs, more profits can be achieved
 with a broader base of business to pursue.

 For
 the years ended December 31, 2023 and 2022, we had $29.4 million and $27.8 million in sales, respectively. Over time, we have increased total sales through a combination of increasing penetration
 of currently served end-markets, adding new end-markets and increasing the number of advanced manufacturing processes within our
 unifying platform.

 Our
Competitive Strengths

 We
believe that we possess the largest share in the markets we operate in, due to our following business strengths, which distinguish us
in this competitive landscape and position us to capitalize on the anticipated continued growth in the optics and photonics enabled market:

 Premier
 Polymer-Based Optics Technology. Each of our innovative optics features custom designed components to enhance optical clarity
 and performance in its particular application or setting. Syntec has assembled a world class optical and opto-mechanical design team
 capable of executing on the most challenging design projects.

 Extensive,
 Growing Patent Portfolio. We have developed and filed patent applications on commercially relevant aspects of our business
 including optical systems and production processes. To date, we have owned three active issued patents, with an additional one patent
 applications pending on manufacturing techniques in the United States.

 Proven
 Go-To-Market Strategy. We have successfully established a direct-to-business platform and have developed strong working relationships
 with Tier 1 manufacturers and major OEMs, custom designing products for new and existing applications.

 Established
 Customer Base with Brand Recognition. We have a growing customer base featuring OEMs, distributors, Tier 1 suppliers across
 diverse end markets and mission critical applications in Defense, Consumer and BioMed. The quality of our products has helped drive
 adoption from additional end markets in low earth satellite communication with visibility for future growth through further expansion
 of our existing relationships.

 High
 Quality Manufacturing Process. Unlike competitors that outsource their manufacturing processes, our optics are designed,
 assembled and tested in the United States, ensuring that our manufacturing process is thoroughly tested, and our optics are of the
 highest quality.

 Drop-In
 Replacement. Our optics modules are largely designed to be "drop-in replacements" for traditional glass-based
 optics, which means that they are designed to fit into existing frames with little or no adjustments. Our target applications are
 enabling mission critical devices in demanding environments. We offer a full line of compatible components and accessories to simplify
 the replacement process and provide customer service to ensure a seamless transition to Low SwaP-C optics. Over their lifetime, our
 optics are significantly cheaper from both an absolute cost and a cost per optic perspective. These lifetime costs, at current costs
 and capacity, will naturally drop as we continue to take advantage of economies of scale.

 Our
Growth Strategy

 We
intend to leverage our competitive strengths, technology leadership and market share position to pursue our growth strategy through the
following:

 Expand
 Product Offerings. In the short-term, our aim is to further diversify our product offerings to give consumers, as well as
 OEMs and distributors, more options for additional applications. This will be accelerated by the expansion of our production capacity
 through organic and inorganic growth.

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

 Commercialize
 Optics and Photonics Enabling Technology. We believe optics and photonics enabling technologies offer significant advantages
 to glass optics and electronics enabled products currently on the market, with the potential to be lighter, smaller, higher-performing
 and cheaper.

 Our
core growth strategy also involves inorganic growth with complementary businesses to augment our existing unifying platform. Syntec plans
to run a disciplined process to arrive at a targeted list of companies it would like to acquire. Selected companies will have a good
management team and ownership that can apply industry findings to build the next great public company that enables light. Such a company
shall serve as a platform to add more diverse end-markets, achieve stable earnings growth, and build an R&D pipeline that brings
sustainable future growth.

 Optics
and photonics companies are not clearly categorized in a small number of SIC codes but Syntec's long-term relationships with companies
led to a list of 100+ SICs where optics and photonics companies live. Quality of earnings, financial reporting, forecasting, controls,
and systems will also be use in selection process for the roll-up.

 Our
Products and Technology

has built a solid foundation over many decades of developing new processes that produce various geometries and shapes of optical
elements used in both visible and IR spectrums. Syntec started with custom polymer optics to find a foothold and then expanded into
various materials for the Biomedical, Defense & Security, and Consumer/Industrial sectors. In 2023 it added communications as an
additional end-market. Syntec is at the forefront of innovation in single point diamond turning and has been pushing the frontiers
of polymer and other materials for use in a wide variety of optics applications and requiring tight tolerances.

 Syntec's
pioneering polymer-based optics provided numerous advantages compared to incumbent products, such as glass-based optics.
Polymer-based optics are smaller sized, lower weight, lower in power consumption, and a high cost-effective optical solution.
Polymer-based optics use polymers throughout the fabrication process which offers high production volume and fast repeatability.
Other advantages of polymers are their high impact resistance; polymers do not split like glass, making this type of optics highly
durable and cost effective in applications such as heads-up displays, goggles, and biomedical disposable optics. Another key
advantage we offer customers is fast prototyping. While advanced molding techniques are used for high volume productions and beta
samples, we use nanomachining of polymers and other materials for quick alpha samples. We further increased the competitive
advantage by providing lower cost by manufacturing in-house lower cost glass molded glass. Often in cameras or optics sub-systems,
glass and polymer elements are combined a lower cost solution yet durable and higher performance.

 Thanks
to their low density or low weight by volume, polymers are well adapted for making cutting-edge-technology products lighter and smaller.
Polymers are between two and half and five times lighter than comparable glass products and are suitable for difficult and sophisticated
refractive, reflective, and diffractive substrates with spherical, aspherical, and cylindrical prescriptions, thus reducing the number
of optical components needed in a given optical system. Molding is the most repeatable, consistent, and economical way to produce complex-shaped
optics in large volume or to integrate them onto a common substrate. Optical-grade polymers exhibit high light transmittance and are
comparable to high-grade glasses. The optical-grade polymer market is growing rapidly; new polymers with low birefringence as well as
higher and more stable refractive indices are available, offering design flexibility not possible with glass optics on their own.

 Customers

 Our
components are used in a variety of applications ranging from biometric, imaging, illumination, scanning, projection, blood analysis,
point of care diagnosis and fingerprint identification. Our components are also used in from DNA sequencing, laser cutting, thermal imaging,
to retinal eye scanning, military and blood analysis. By investing in new technology and reliable equipment Syntec Optics provides low-cost
precision solutions for challenging optical needs.

 We
have deep, long-standing relationships with many of our customers. Our customers primarily utilize our products for defense and security,
optical diagnosis and imaging and projection lenses and heads-up displays. We work directly with customers to ensure compatibility with
existing designs and collaborate on custom design for new applications.

 Defense
 Optics – night vision goggles, missile systems and military LED lighting are just a few examples of the mission critical
 components used by our defense and security customers

 Biophotonics
 – blood gas analyzer, bacteria analyzer and HIV detectors are used in medical procedures

 Communication
 Optics – low earth orbit satellite transmitters, receivers and high-precision mirrors are used in high-speed data transmission
 processes

 We
continue to seek to grow our customer base within our existing segments; however, we also believe that our products are well suited to
address the needs in additional segments, including semiconductor, communication, advanced manufacturing, sensing, lighting Solar-PV,
and displays and we will seek to expand our market share in these segments in the future.

 Facilities

 Our
corporate headquarters is in an approximately 90 thousand square foot facility that we lease in Rochester, New York.
The lease expires in May 2025, and we have the option to extend for an additional five-year period. We believe we will be able to obtain
additional space on commercially reasonable terms.

 Our
manufacturing departments and respective activity is shown below. In addition, the flow of materials and knowledge between departments
for Alpha, Beta, and production are shown in the facilities chart.

 Supplier
Relationships

 We
have a well-established global supply chain that underlies the sourcing of the components of our products, although we source domestically
whenever possible. We follow a lean manufacturing process and align our purchases with customer backlog. We prefer to pre-order in advance
for the year to ensure adequate supply. For nearly all our components, we ensure that we have alternate suppliers available. As a result
of our long-standing relationships with our suppliers, we are able to source materials on favorable terms within reasonable lead-times.

 Sales
and Marketing

 Our
proven sales and marketing strategy has allowed us to penetrate our current end markets efficiently. We use a variety of methods to educate
consumers on the benefits of optics and photonics-enabled technologies and why they are a better investment compared to electronically
enabled technologies found in our target end markets today. Through information found on our website and social media platforms that
educate consumers on the benefits of optics and photonics-enabled technologies, we assist consumers on how they may benefit from the
advanced manufacturing processes and technologies that we offer.

 We
use a multi-pronged sales and marketing strategy to ensure that the Syntec Optics brand is at the forefront of its respective end markets.
We have established strong relationships, particularly in the defense and biomedical industries through participation in trade shows
and other sponsored industry events, which have allowed us to reach customers to ensure we are aware of evolving customer preferences.
We are then able to leverage this customer feedback to collaborate on custom designs for new and existing applications.

 We
value our customer relationships. Our website and our customer service are key elements to our sales strategy. Our website enables customers
to purchase off the shelf optics and provides access to a range of product information, technical benefits, and advanced manufacturing
services. We have a team of experts dedicated to supporting our customers' sales, technical and service needs.

 Competition

is a vertically integrated advanced manufacturer of optics and photonics. At the public company level, competitors may have Syntec's
suite of advanced manufacturing techniques under its corporate umbrella, but not likely under the same roof. This differentiation allows
Syntec to successfully serve OEM and Tier 1 suppliers in the Defense, Biomedical and Consumer/Industrial end markets.

 Advanced
manufacturers in the optics and photonics space enable end-products generally through a combination of materials, electromagnetic spectrum
or processes. Many of Syntec's competitors specialize in aspects of these three areas and may not have in-house capabilities across
all three areas. For example, some of Syntec's competitors specialize in precision motion optics, vision specialists, high-resolution
spectral cameras, electro-optical aerospace systems and or machine vision systems. Syntec can provide solutions to each of these specialty
areas by deploying its highly trained employee base and its patented intellectual property and trade secret processes.

 In
certain instances, Syntec may collaborate on design and development of mission critical sub-components in its competitors' products
given its broad advanced manufacturing capabilities. Syntec is excited to bring its unifying value proposition to the public market.

 Intellectual

 The
success of our business and our technology leadership is supported by our proprietary optics and photonics enabling advanced manufacturing
processes and technologies. We have received patents and filed patent applications in the United States and other jurisdictions to provide
protection for our technology. We rely upon a combination of patent, trademark and trade secret laws in the United States and other jurisdictions,
as well as license agreements and other contractual protections, to establish, maintain and enforce rights in our proprietary technologies.
In addition, we seek to protect our intellectual property rights through non-disclosure and invention assignment agreements with our
employees and consultants and through non-disclosure agreements with business partners and other third parties.

 As
of December 31, 2023 and as of December 31, 2022, we owned three active issued patents and one pending patent applications. The patents and patent applications
cover the United States. We periodically review and update our patent portfolio to protect our products and newly developed
technologies.

 US
Patent 9192298B2 "Contact lens for intraocular pressure measurement" is an active worldwide application patent that is assigned
to and owned by Syntec Optics. The patent was granted November 2015 and expires April 2034.

 US
Patent 10052731B2 "Flycutter having forced air cleaning" is an active worldwide application patent that is assigned to and
owned by Syntec Optics. The patent was granted August 2018 and expires December 2036.

 US
Patent 11383414B2 "Parts degating apparatus using laser" is an active worldwide application patent that is assigned to and
owned by Syntec Optics. The patent was granted July 2022 and expires August 2040.

 US
Patent Provisional 63/449,362 "Imaging Apparatus with Thermal Augmentation" is a provisional United States application. The
provisional patent application was filed on March 2, 2023.

 We
periodically review our development efforts to assess the existence and patentability of new intellectual property. We pursue the registration
of our domain names and trademarks and service marks in the United States and other jurisdictions.

 Government
Regulations

 We
currently operate from a dedicated leased manufacturing facility located in Rochester, New York. We have never owned any facility at
which we operated. Operations at our facilities are subject to a variety of environmental, health and safety regulations, including those
governing the generation, handling, storage, use transportation, and disposal of hazardous materials. To conduct our operations, we have
to obtain environmental, health and safety permits and registrations and prepare plans. We are subject to inspections and possible citations
by federal, state, and local environmental, health, and safety regulators. We have policies in place to assure compliance with our obligations
(for example, machine guarding, hot work, hazardous material management and transportation). We train our employees and conduct audits
of our operations to assess our fulfillment of these policies.

 We
are also subject to laws imposing liability for the clean up and release of hazardous substances. Under the law, we can be liable even
if we did not cause a release on real property that we lease. We believe we have taken commercially reasonable steps to avoid such liability
with respect to our current leased facilities.

 Environmental
Matters

 We
are subject to domestic and foreign environmental laws and regulations governing our operations, including, but not limited to, emissions
into the air and water and the use, handling, disposal and remediation of hazardous substances. A certain risk of environmental liability
is inherent in our production activities, operation of our systems and the disposal of our systems. These laws and regulations govern,
among other things, the generation, use, storage, registration, handling and disposal of chemicals and waste materials, the presence
of specified substances in electrical products, the emission and discharge of hazardous materials into the ground, air or water, the
clean up of contaminated sites, including any contamination that results from spills due to our failure to properly dispose of chemicals
and other waste materials and the health and safety of our employees.

 Export
and Trade Matters

 We
are subject to anti-corruption laws and regulations imposed by governments around the world with jurisdiction over our operations, including
the U.S. Foreign Corrupt Practices Act, as well as the laws of the countries where we do business. We are also subject to various trade
restrictions, including trade and economic sanctions and export controls, imposed by governments around the world with jurisdiction over
our operations. For example, in accordance with trade sanctions administered by the U.S. Department of Treasury's Office of Foreign
Assets Control and export controls administered by the U.S. Department of Commerce, we are prohibited from engaging in transactions involving
certain persons and certain designated countries or territories, including Cuba, Iran, Syria, North Korea and the Crimea Region of Ukraine.
In addition, our systems may be subject to export regulations that can involve significant compliance time and may add additional overhead
cost to our systems. In recent years the United States government has a renewed focus on export matters. For example, the Export Control
Reform Act of 2018 and regulatory guidance thereunder have imposed additional controls and may result in the imposition of further additional
controls, on the export of certain "emerging and foundational technologies." Our current and future systems may be subject
to these heightened regulations, which could increase our compliance costs.

 See
"Risk Factors—We are subject to U.S. and foreign anti-corruption and anti-money laundering laws and regulations and could
face criminal liability and other serious consequences for violations, which could adversely affect our business, financial condition
and results of operations" for additional information about the anti-corruption and anti-money laundering laws that may affect
our business.

 Legal
Proceedings

 We
may be subject from time to time to various claims, lawsuits and other legal and administrative proceedings arising in the ordinary course
of business. Some of these claims, lawsuits and other proceedings may involve highly complex issues that are subject to substantial uncertainties,
and could result in damages, fines, penalties, non-monetary sanctions or relief. We intend to recognize provisions for claims or pending
litigation when we determine that an unfavorable outcome is probable, and the amount of loss can be reasonably estimated. Due to the
inherent uncertain nature of litigation, the ultimate outcome or actual cost of settlement may materially vary from estimates.

 See
"Risk Factors—Any future litigation against us could be costly and time-consuming to defend."

 Employees
and Human Capital Resources

 As
of December 31, 2023, we have 148 employees. We have adopted our Code of Ethics to support and protect our culture, and
we strive to create a workplace culture in line with our values: "Integrity", "Humility", "Innovation",
"Discipline", and "Continuous Improvement" and help our customers "Change the way the world views itself,
one optic at a time." As part of our initiative to retain and develop our talent, we focus on these key areas:

 Safety
 – Employees are regularly educated on safety around their workspaces, and employees participate in volunteer roles
 on a safety committee, and in emergency readiness roles. We have a dedicated safety coordinator who tracks and measures our performance
 and helps us benchmark our safety programs against our peers.

 Diversity,
 Equity & Inclusion – Our culture has benefitted from the diversity of our workforce from the very beginning. Inclusion
 and equity are "baked into the bricks" of our values, which our employees demonstrate every day. Our human resource department
 and all our corporate officers and directors have an open-door policy and are able to constructively communicate with employees to
 resolve issues when they arise.

 Collaboration
 – As we grow, opportunities for cross-functional collaboration may not be as organic as they used to be. We have responded
 to that challenge by staying mindful and acting intentionally to gather cross-functional input on new initiatives and continuous
 improvement efforts.

 Continuous
 Improvement – We apply continuous improvement measure to processes as well as people. We encourage professional development
 of our employees, through ongoing learning, credentialing, and collaboration with their industry peers.

 Attracting
and retaining high quality talent at every level of our business is crucial to our continuing success. We have developed relationships
with the University of Rochester to further our recruitment reach. We provide competitive compensation and benefit packages, including
performance-based compensation that rewards individual and organizational achievements.

 The
Business Combination

 On
November 7, 2023 (the " Closing Date "), Syntec Optics Holdings, Inc., a Delaware corporation (the " Company ")
(f/k/a OmniLit Acquisition Corp. (" OmniLit ")), consummated the previously announced merger (the " Closing ")
pursuant to the Business Combination Agreement, dated May 9, 2023, (the " Business Combination Agreement "), by and
among OmniLit, Optics Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of OmniLit (" Merger Sub "),
and Syntec Optics, Inc., a Delaware corporation (" Legacy Syntec "). OmniLit's stockholders approved the Transactions
(as defined below) at an annual meeting of stockholders held on October 31, 2023 (the " Annual Meeting ").

 Pursuant
to the Business Combination Agreement, Merger Sub merged with and into Legacy Syntec (the " Merger " and, together with
the other transactions contemplated by the Business Combination Agreement, the " Transactions "), with Legacy Syntec
continuing as the surviving corporation in the Merger and a wholly-owned subsidiary of OmniLit. On the Closing Date, the registrant changed
its name from OmniLit Acquisition Corp. to Syntec Optics Holdings, Inc.

 Merger
Consideration

 At
the Closing, by virtue of the Merger and without any action on the part of OmniLit, Merger Sub, Legacy Syntec or the holders of any of
the following securities:

 (a)

 Each
 outstanding share of Legacy Syntec's common stock, par value $0.001 per share (" Legacy Syntec Common Stock "),
 converted into (i) a certain number of shares of the Company's common stock, par value $0.0001 per share (" Common
 Stock "), totaling 31,600,000 shares (including the conversion and assumption of the options to purchase shares of Legacy
 Syntec Common Stock described below), which is equal to (x) $316,000,000 divided by (y) $10.00 (the " Merger Consideration ")
 and (ii) the contingent right to receive Earnout Shares (as defined below) (which may be zero) following the Closing.

 Earnout
Merger Consideration

 In
addition to the Merger Consideration set forth above, additional contingent shares (" Contingent Earnout Shares ") may
be payable to each holder of shares of Legacy Syntec Common Stock in the Merger, subject to achieving specified milestones, up to an
aggregate of 26,000,000 additional shares of Common Stock in three tranches.

 Syntec Optics Holdings, Inc.
will issue 26,000,000 additional shares of Common Stock (the "Contingent Earnout") to Legacy Syntec's existing stockholders
at the Closing, which Contingent Earnout shares will vest upon achievement of the targets set forth in Section 3.4(b) of the Business
Combination Agreement. The Contingent Earnout shares will vest upon the Company's Common Stock achieving the following stock trading
price thresholds (the "Contingent Earnout Trigger Price") following the Closing: one-third (1/3 rd) at $12.50 per
share, one-third (1/3 rd) at $14.00 per share, and one-third (1/3 rd) at $15.50 per share (as adjusted for stock
splits, stock dividends, reorganizations, recapitalizations and the like). The Contingent Earnout shares which remain unvested as of
the date five (5) years from the Closing (the "Earnout Period") will be deemed cancelled and no longer subject to vesting.
The achievement of the Contingent Earnout Trigger Price will be based on either (a) the closing price of the Company's common stock
equaling or exceeding the specified threshold for twenty (20) trading days within any thirty (30)-trading day period following the Closing,
or (b) upon the consummation of a change of control transaction in which the per share price implied in such change of control transaction
is greater than or equal to the applicable threshold. All Contingent Earnout shares will be issued pro rata to Legacy Syntec stockholders
in proportion to their owned shares of Legacy Syntec common stock immediately prior to the Closing.

Optics Holdings, Inc. will issue up to 2,000,000 shares of Common Stock (the " Performance-based-Earnout ") to
members of the management team of the Company from time to time, to the extent determined by the Board of Directors in its sole
discretion, to be issued as restricted stock units or incentive equity grants pursuant to the Incentive Plan described below. The
Performance-based Earnout shares shall be awarded by the Board of Directors based on achieving the following performance thresholds
following the Closing: one-half (1/2) at achieving revenue of $75 million and adjusted EBITDA of $22.6 million based on 2024
financial audited statements, and one-half (1/2) at achieving revenue of $196 million and adjusted EBITDA of $50.6 million based on
the 2025 financial audit statement.

 A
description of the Merger and the terms of the Business Combination Agreement are included in the proxy statement/prospectus, dated October
5, 2023 (the " Proxy Statement/Prospectus ") as filed with the Securities and Exchange Commission (the " SEC ")
in the section entitled " Proposal No. 1 — The Business Combination Proposal " of the Proxy Statement/Prospectus.

 The
foregoing description of the Business Combination Agreement is a summary only and is qualified in its entirety by the full text of the
Business Combination Agreement, a copy of which is attached hereto as Exhibit 2.1, which are incorporated herein by reference.

 Capitalized
terms used but not defined in this Report have the meanings set forth in the Proxy Statement/Prospectus.

 Item
1.01 Entry into a Material Definitive Agreement.

 Debt
Financing

 Loan
Agreement

Optics Holdings, Inc. refinanced its existing loans with a similar structure but more favorable terms. Pursuant to the terms of the
new Credit Agreement with the lender, the proceeds of the refinancing were used (i) to payoff on the Closing Date prior
indebtedness, and (ii) to pay any fees associated with transactions contemplated under the Credit Agreement. The payoff of prior
indebtedness included, (i) payoff for line of credit with the outgoing lender in the amount of approximately $6,092,560, (ii) payoff
for term loan in the amount of approximately $1,109,789, and (iii) payoff for mortgage loan in the amount of approximately $863,607.

 The
new revolving credit facility increased the revolving line of credit from $8,000,000 to $10,000,000 with maturity date 3 years from Closing.
The interest rate decreased from 310 basis points to 225 basis points added to one month term Secured Overnight Financing Rate (SOFR) adjusting daily. The term loan facility
was set at up to $1,775,000 at the same rate option as line of credit and maturity up to 5 years from Closing. An additional facility
for equipment line was added with a $5,000,000 discretionary loan/lease limit with the same interest rate option and maturity 7 years
from Closing. At the time of refinancing, mortgage facility was paid off from the new open line of credit until a new mortgage facility
is set up with 7 year maturity from Closing and same interest rate option.

 Usual
and customary facility of this type, size and purpose also included minimum fixed charge ratio greater than equal to 1.10x along with
maximum leverage ratio of 3.5x (up from 3.0x with the outgoing lender). Usual and customary negative covenants were also included.

 The
foregoing description of the refinancing is a summary only and is qualified in its entirety by the full text of the Credit Agreement,
copies of which are attached hereto as Exhibit 10.12 and are incorporated herein by reference.

 Warrant
Agreements

 The
shares issuable upon exercise of the Warrants have customary registration rights, which are contained in the respective forms of the
Warrants, requiring the Company to file and keep effective a resale registration statement registering the resale of the shares of Common
Stock underlying the Warrants.

 The
foregoing description of the Warrants is a summary only and is qualified in its entirety by reference to the full text of the Warrants,
copies of which are attached hereto as Exhibit 4.4, respectively, and are incorporated herein by reference.

 Related
Agreements

 Concurrently
with the execution of the Business Combination Agreement, OmniLit, Legacy Syntec and the Sponsor entered into a sponsor support agreement,
a copy of which is attached as Exhibit 10.4 and is incorporated herein by reference.

 Indemnification
of Directors and Officers

 On
the Closing Date, in connection with the consummation of the Transactions, the Company entered into indemnification agreements with each
of its directors and executive officers. These agreements, among other things, will require the Company to indemnify the Company's
directors and executive officers for certain expenses, including attorneys' fees, judgments and fines incurred by a director or
executive officer in any action or proceeding arising out of their services as one of the Company's directors or executive officers
or any other company or enterprise to which the person provides services at the Company's request.

 The
foregoing description of the indemnification agreements does not purport to be complete and is qualified in its entirety by reference
to the full text of the form of indemnification agreement, a copy of which is attached hereto as Exhibit 10.7 and is incorporated herein
by reference.

 Registration
Rights Agreement

 On
the Closing Date, in connection with the consummation of the Transactions, the Company entered into the Amended and Restated Registration
Rights Agreement (the " Registration Rights Agreement ") with the Sponsor, OmniLit's officers, directors, initial
stockholders, non-redemption agreement investors (collectively, the " Insiders ") and certain Legacy Syntec stockholders.

 The
foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference
to the full text of the Registration Rights Agreement, a copy of which is attached hereto as Exhibit 4.6 and is incorporated herein
by reference.

 Other
Agreements

 On December 11, 2023,
we entered into an asset purchase agreement (the " APA ") with Molex, a Delaware corporation (" Molex "),
pursuant to which we acquired machinery and equipment from Molex as set forth in the APA for a purchase price of approximately
$560,000, which was the approximated fair market value.

 Recent
Developments

 None.

 Corporate
Information

 The
mailing address of our principal executive office is 515 Lee Rd., Rochester, New York 14606, and our telephone number is (585) 768-2513.

 We
file periodic reports, proxy statements and other information with the SEC. Such reports, proxy statements and other information may
be obtained, free of charge, by visiting the SEC's website at www.sec.gov that contains all of the reports, proxy and information
statements, and other information that we electronically file or furnish to the SEC. We also maintain a website at www.syntecoptics.com
where we make available the proxy statements, press releases, registration statements and reports on Forms 3, 4, 8-K, 10-K and 10-Q that
we (and in the case of Section 16 reports, our insiders) file with the SEC. These forms are made available as soon as reasonably practicable
after such material is electronically filed with or furnished to the SEC. Press releases are also issued via electronic transmission
to provide access to our financial and product news, and we provide notification of and access to voice and internet broadcasts of our
quarterly and annual results. Our website also includes investor presentations and corporate governance materials.

 Item
1A. Risk Factors

 An
investment in our common stock is speculative and involves a high degree of risk including the risk of a loss of your entire
investment. You should carefully consider the risks and uncertainties described below and the other information contained in this report
and our other reports filed with the Securities and Exchange Commission (the "SEC"). The risks set forth below are not the
only ones facing us. Additional risks and uncertainties may exist that could also adversely affect our business, operations and financial
condition. If any of the following risks actually materialize, our business, financial condition and/or operations could suffer. In such
event, the value of our common stock could decline, and you could lose all or a substantial portion of the money that you pay for our
common stock.

 Summary
of Risk Factors

 Risks
Related to Cybersecurity, Technology, Proprietary Techniques and Intellectual Property

 We
rely heavily upon proprietary techniques and intellectual property portfolio. If we are unable to protect our proprietary and intellectual
property rights, our business and competitive position would be harmed.

 We
may not be able to prevent unauthorized use of our proprietary techniques and intellectual property, which could harm our business and
competitive position. We rely upon a combination of the proprietary techniques and intellectual property protections afforded by patent,
copyright, trademark and trade secret laws in the United States and other jurisdictions to establish, maintain and enforce rights in
our proprietary technologies. In addition, we seek to protect our proprietary techniques and intellectual property rights through non-disclosure
and invention assignment agreements with our employees and consultants, and through non-disclosure agreements with business partners
and other third parties. Despite our efforts to protect our proprietary rights, third parties may attempt to copy or otherwise obtain
and use our proprietary techniques and intellectual property. Monitoring unauthorized use of our proprietary techniques and intellectual
property is difficult and costly, and the steps we have taken or will take to prevent unauthorized use may not be sufficient. Any enforcement
efforts we undertake, including litigation, could be time-consuming and expensive and could divert management's attention, which
could harm our business, results of operations and financial condition.

 In
addition, available proprietary techniques and intellectual property laws and contractual remedies in some jurisdictions may afford less
protection than needed to safeguard our proprietary techniques and intellectual property portfolio. Proprietary techniques and intellectual
property laws vary significantly throughout the world. The laws of a number of foreign countries do not protect proprietary techniques
and intellectual property rights to the same extent as do the laws of the United States. Therefore, our proprietary techniques and intellectual
property rights may not be as strong, or as easily enforced, outside of the United States, and efforts to protect against the unauthorized
use of our proprietary techniques and intellectual property rights, technology and other proprietary rights may be more expensive and
difficult to undertake outside of the United States. In addition, while we have filed for and obtained certain proprietary techniques
and intellectual property rights in commercially relevant jurisdictions, we have not sought protection for our proprietary techniques
and intellectual property rights in every possible jurisdiction. Failure to adequately protect our proprietary techniques and intellectual
property rights could result in competitors using our proprietary techniques and intellectual property to make, have made, use, import,
develop, have developed, sell or have sold their own products, potentially resulting in the loss of some of our competitive advantage
and a decrease in our revenue, which would adversely affect our business, prospects, financial condition and operating results.

 Our
website, systems, and the data we maintain may be subject to intentional disruption, security incidents, or alleged violations of laws,
regulations, or other obligations relating to data handling that could result in liability and adversely impact our reputation and future
sales.

 We
expect to face significant challenges with respect to information security and maintaining the security and integrity of our systems,
as well as with respect to the data stored on or processed by these systems. Advances in technology, and an increase in the level of
sophistication, expertise and resources of hackers, could result in a compromise or breach of our systems or of security measures used
in our business to protect confidential information, personal information, and other data.

 The
ability to conduct our business and operations, depend on the continued operation of information technology and communications systems,
some of which we have yet to develop or otherwise obtain the ability to use. Systems used in our business (including third-party data
centers and other information technology systems provided by third parties) are and will be vulnerable to damage or interruption. Such
systems could also be subject to break-ins, sabotage and intentional acts of vandalism, as well as disruptions and security incidents
as a result of non-technical issues, including intentional or inadvertent acts or omissions by employees, service providers, or others.
Some of the systems used in our business will not be fully redundant, and our disaster recovery planning cannot account for all eventualities.
Any data security incidents or other disruptions to any data centers or other systems used in our business could result in lengthy interruptions
in our service.

 Cyberattacks
and security vulnerabilities could lead to reduced revenue, increased costs, liability claims, or harm to our reputation or competitive
position.

 Threats
to IT security can take a variety of forms. Individual and groups of hackers and sophisticated organizations, including state-sponsored
organizations or nation-states, continuously undertake attacks that pose threats to our customers and our IT. These actors may use a
wide variety of methods, which may include developing and deploying malicious software or exploiting vulnerabilities or intentionally
designed processes in hardware, software, or other infrastructure in order to attack our products and services or gain access to our
networks and datacenters, using social engineering techniques to induce our employees, users, partners, or customers to disclose passwords
or other sensitive information or take other actions to gain access to our data or our users' or customers' data, or acting
in a coordinated manner to launch distributed denial of service or other coordinated attacks. Nation-state and state-sponsored actors
can deploy significant resources to plan and carry out attacks. Nation-state attacks against us, our customers, or our partners may intensify
during periods of intense diplomatic or armed conflict, such as the ongoing conflict in Ukraine. Inadequate account security or organizational
security practices may also result in unauthorized access to confidential data. For example, system administrators may fail to timely
remove employee account access when no longer appropriate. Employees or third parties may intentionally compromise our or our users'
security or systems or reveal confidential information. Malicious actors may employ the IT supply chain to introduce malware through
software updates or compromised supplier accounts or hardware.

 Cyberthreats
are constantly evolving and becoming increasingly sophisticated and complex, increasing the difficulty of detecting and successfully
defending against them. We may have no current capability to detect certain vulnerabilities or new attack methods, which may allow them
to persist in the environment over long periods of time. Cyberthreats can have cascading impacts that unfold with increasing speed across
our internal networks and systems. Breaches of our facilities, network, or data security could disrupt the security of our systems and
business applications, impair our ability to provide services to our customers and protect the privacy of their data, result in product
development delays, compromise confidential or technical business information harming our reputation or competitive position, result
in theft or misuse of our intellectual property or other assets, subject us to ransomware attacks, require us to allocate more resources
to improve technologies or remediate the impacts of attacks, or otherwise adversely affect our business. We are also subject to supply
chain cyberattacks where malware can be introduced to a software provider's customers, including us, through software updates.

 In
addition, our internal IT environment continues to evolve. Our business policies and internal security controls may not keep pace with
these changes as new threats emerge, or emerging cybersecurity regulations in jurisdictions worldwide.

 We
may need to defend ourselves against proprietary techniques and intellectual property infringement claims, which may be time-consuming
and could cause us to incur substantial costs.

 Companies,
organizations or individuals, including our current and future competitors, may hold or obtain proprietary techniques and intellectual
property rights that would prevent, limit or interfere with our ability to make, have made, use, import, develop, have developed, sell
or have sold our products, which could make it more difficult for us to operate our business. From time to time, we may receive inquiries
from holders of proprietary techniques and intellectual property rights inquiring whether we are infringing their rights and/or seek
court declarations that they do not infringe upon our proprietary techniques and intellectual property rights. Entities holding proprietary
techniques and intellectual property rights relating to our technology, including, but not limited to, batteries, battery materials,
encapsulated powders, spray deposition of battery materials, and alternator regulators, may bring suits alleging infringement of such
rights or otherwise asserting their rights and seeking licenses. For example, patents and patent applications owned by third parties
may present freedom to operate (" FTO ") questions with regards to the precoated feedstock materials for the spray deposition
process depending on the final material selections that are used, although we believe that Syntec Optics owns a patent application that
pre-dates their patents and patent applications of interest such that Syntec Optics' patent application may act as a basis for
an invalidity position. However, it is possible that a court may not agree that Syntec Optics' patent application invalidates the
patents and patent applications of interest. If we are determined to have infringed upon a third party's proprietary techniques
and intellectual property rights, we may be required to do one or more of the following:

 cease
 using, making, having made, selling, having sold, developing, having developed or importing products that incorporate the infringed
 proprietary techniques and intellectual property rights;

 pay
 substantial damages;

 obtain
 a license from the holder of the infringed proprietary techniques and intellectual property rights, which license may not be available
 on reasonable terms or at all; or

 redesign
 our processes or products, which may result in inferior products or processes.

 In
the event of a successful claim of infringement against us and our failure or inability to obtain a license to or design around the infringed
proprietary techniques and intellectual property rights, our business, prospects, operating results and financial condition could be
materially adversely affected.

 Our
current and future patent applications may not result in issued patents or our patent rights may be contested, circumvented, invalidated
or limited in scope, any of which could have a material adverse effect on our ability to prevent others from commercially exploiting
products similar to ours.

 Our
current and future patent applications may not result in issued patents, which may have a material adverse effect on our ability to prevent
others from commercially exploiting products or technology similar to ours. The outcome of patent applications involves complex legal
and factual questions and the breadth of claims that will be allowed is uncertain. As a result, we cannot be certain that the patent
applications that we file will result in patents being issued, or that our current issued patents, and any patents that may be issued
to us in the future, will afford protection that covers our commercial processes, systems and products or that will afford protection
against competitors with similar products or technology. Numerous prior art patents and pending patent applications owned by others,
as well as prior art non-patent literature, exist in the fields in which we have developed and are developing our technology, which may
preclude our ability to obtain a desired scope of protection in the desired fields. In addition to potential prior art concerns, any
of our existing patents, pending patent applications, or future issued patents or patent applications may also be challenged on the basis
that they are invalid or unenforceable. Furthermore, patent applications filed in foreign countries are subject to laws, rules, and procedures
that differ from those of the United States, and thus we cannot be certain that foreign patent applications related to issued U.S. patents
will be issued.

 Even
if our current or future patent applications succeed and patents are issued, it is still uncertain whether our current or future patents
will be contested, circumvented, invalidated or limited in scope in the future. The rights granted under any issued patents may not provide
us with meaningful protection or competitive advantages, and some foreign countries provide significantly less effective patent enforcement
than the United States. In addition, the claims under our current or future patents may not be broad enough to prevent others from developing
technologies that are similar or that achieve results similar to ours. The proprietary techniques and intellectual property rights of
others could also bar us from licensing and exploiting our current or future patents. In addition, our current or future patents may
be infringed upon or designed around by others and others may obtain patents that we need to license or design around, either of which
would increase costs and may adversely affect our business, prospects, financial condition and operating results.

 Risks
Related to Syntec Optics Being a Public Company

 The
uncertainty in global economic conditions, including as a result of the COVID-19 pandemic and the Russia- Ukraine conflict, could reduce
consumer spending and disrupt our supply chain which could negatively affect our results of operations.

 Our
results of operations are directly affected by the general global economic conditions that impact our main end markets. Generally, worldwide
economic conditions remain uncertain, particularly due to pandemic, the impact of increased interest rates, and inflation.
The uncertainty in global economic conditions can result in substantial volatility, which can affect our business by reducing customer
spending and the prices that our customers may be able or willing to pay for our products, which in turn could negatively impact our
sales and result in a material adverse effect on our business financial condition and results of operations.

 Global
pandemics have caused, and could in the future continue to cause, and other factors could contribute to causing, delays or
disruptions in our supply chain and labor shortages and shutdowns, which would be disruptive to our business operations. For
example, we experienced shortages and workforce slowdowns at our manufacturing facility due to stay-at- home mandates, delays in
shipping finished products to customers and some delays in our receiving products. Any performance failure on the part of any of our
significant suppliers could interrupt our operations, which would have a material adverse effect on our business, financial
condition and results of operations. Furthermore, the severity, magnitude and duration of the current COVID-19 pandemic is
uncertain, rapidly changing and hard to predict. A prolonged or worsened COVID-19 pandemic could cause continued supply disruptions
which could lead to a reduction in manufacturing, lead to extended disruption of economic activity and make it difficult for us to
predict demand for our products. As a result of sanctions imposed in relation to the Russia-Ukraine conflict, gas prices in the
United States have risen to historic levels. Further escalation of the Russia-Ukraine conflict and the subsequent response,
including further sanctions or other restrictive actions, by the United States and/or other countries could also adversely impact
our supply chain, partners or customers. The extent and duration of the situation in Ukraine, resulting sanctions and resulting
future market disruptions are impossible to predict but could be significant. Any such disruptions caused by Russian military action
or other actions (including cyberattacks and espionage) or resulting actual and threatened responses to such activity, boycotts or
changes in consumer or purchaser preferences, sanctions, tariffs or cyberattacks, may impact the global economy and adversely affect
commodity prices.

 Furthermore,
increases in the prices of our inventory, including if our suppliers choose to pass through their increased costs to us, would result
in increased inventory costs, which may result in a decrease in our margins and may have a material adverse effect on our business financial
condition and results of operations. We have historically offset cost increases through careful management of our inventory of supplies,
by ordering six months to a year in advance, and by increasing our purchase order volumes to qualify for volume-based discounts, rather
than increase prices to customers. However, as we have done in 2023, we may increase prices from time to time, which may not be sufficient
to offset material price inflation and which may result in loss of customers if they believe our products are no longer competitively
priced. In addition, if we are required to spend a prolonged period of time negotiating price increases with our suppliers, we may be
further delayed in receiving the inventory necessary to meet our customers' needs and/or implement aspects of our growth strategy.

 The
loss of one or more members of our senior management team, other key personnel or our failure to attract additional qualified personnel
may adversely affect our business and our ability to achieve our anticipated level of growth.

 We
are highly dependent on the talent and services of key technical personnel and losing them would disrupt our business and harm our results
of operations, and we may not be able to successfully attract and retain senior leadership necessary to grow our business.

 Our
future success also depends on our ability to attract and retain other key employees and qualified personnel, and our operations may
be severely disrupted if we lost their services. As we become more well known, there is increased risk that competitors or other companies
will seek to hire our personnel. The failure to attract, integrate, train, motivate, and retain our personnel could impact our ability
to successfully grow our operations and execute our strategy.

 Our
operating and financial results forecast relies in large part upon assumptions and analyses developed by us. If these assumptions or
analyses prove to be incorrect, our actual operating results may be materially different from our forecasted results.

 The
projected financial and operating information appearing elsewhere in this proxy statement/prospectus reflects current estimates of future
performance. Whether actual operating and financial results and business developments will be consistent with our expectations and assumptions
as reflected in our forecasts depends on a number of factors, many of which are outside our control, including:

 increased
 sales to customers with whom the Company has existing relationships;

 increased
 sales with our existing end markets;

 sales
 to additional adjacent end markets;

 the
 successful introduction of new products;

 our
 ability to implement planned automation and expansion efforts;

 continued
 supply from our carefully selected vendors;

 our
 ability to offset vendor price increases and any emerging inflationary price pressures through inventory management, volume-based
 supplier discounts and potential price increases to customers; and

 other
 factors, including our ability to obtain sufficient capital to sustain and grow our business, our ability to manage our growth and
 our ability to retain existing key management, integrate recent hires and attract, retain, and motivate qualified personnel.

 Unfavorable
changes in any of these or other factors, most of which are beyond our control, could materially and adversely affect our business, financial
condition and results of operations.

 If
we fail to manage our growth effectively, we may be unable to execute our business plan, maintain high levels of customer service, or
adequately address competitive challenges.

 We
have experienced significant growth in our business, and our future success depends, in part, on our ability to manage our business as
it continues to expand. If not managed effectively, this growth could result in the over-extension of our operating infrastructure, management
systems and information technology systems. Internal controls and procedures may not be adequate to support this growth. Failure to adequately
manage our growth in our businesses may cause damage to our brand or otherwise have a material adverse effect on our business, financial
condition and results of operations.

 We
may expand our business through acquisitions in the future, and any future acquisition may not be accretive and may negatively affect
our business.

 As
part of our growth strategy, we may make future investments in businesses, new technologies, services and other assets that complement
our business. We could fail to realize the anticipated benefits from these activities or experience delays or inefficiencies in realizing
such benefits. Moreover, an acquisition, investment or business relationship may result in unforeseen operating difficulties and expenditures,
including disruption to our ongoing operations, management distraction, exposure to additional liabilities and increased expenses, any
of which could adversely impact our business, financial condition and results of operations. Our ability to make these acquisitions and
investments could be restricted by the terms of our current and future indebtedness and to pay for these investments we may use cash
on hand, incur additional debt or issue equity securities, each of which may affect our financial condition or the value of our stock
and could result in dilution to our stockholders. Additional debt would result in increased fixed obligations and could also subject
us to covenants or other restrictions that would impede our ability to manage our operations.

 We
have significant customer concentration, with a limited number of customers accounting for a substantial portion of our revenues. Failure
to attract, grow and retain a diverse and balanced customer base could harm our business and operating results.

 We
have a limited number of customers that account for a substantial portion of our revenues, which carries risks. We have a total of
three customers that accounted for 53% and 50% of our revenues for the year ended December 31, 2023 and December 31, 2022, respectively. In
addition, revenues from these larger customers may fluctuate from time to time based on these customers' business needs and
customer experience, the timing of which may be affected by market conditions or other factors outside of our control. These
customers could also potentially pressure us to reduce the prices we charge, which could have an adverse effect on our margins and
financial position and could negatively affect our revenues and results of operations. If any of our large customers terminates
their relationship with us or materially reduces the services they acquire from us, such termination or reduction could negatively
affect our revenues and results of operations.

 Our
ability to attract, grow and retain a diverse and balanced customer base may affect our ability to maximize our revenues. Our ability
to attract customers depends on a variety of factors, including our product offerings. If we are unable to develop or improve our product
offerings, we may fail to develop, grow and retain a diverse and balanced customer base, which would adversely affect our business, financial
condition and results of operations.

 Our
operations are subject to a variety of environmental, health and safety rules that can bring scrutiny from regulatory agencies and increase
our costs.

 Our
operations are subject to environmental, health and safety rules, laws and regulations and we may be subject to additional regulations
as our operations develop and expand. There are significant capital, operating and other costs associated with compliance with these
environmental laws and regulations. While we believe that the policies and programs we have in place are reasonably designed and implemented
to assure compliance with these requirements and to avoid hazardous substance release liability with respect to our facilities, we may
be faced with new or more stringent compliance obligations that could impose substantial costs.

 We
are subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws, and non-compliance
with such laws can subject us to administrative, civil and criminal fines and penalties, collateral consequences, remedial measures and
legal expenses, all of which could adversely affect our business, results of operations, financial condition and reputation.

 We
are subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws and regulations
in various jurisdictions in which we conduct or in the future may conduct activities, including the U.S. Foreign Corrupt Practices Act
(" FCPA "). The FCPA prohibits us and our officers, directors, employees and business partners acting on our behalf,
including agents, from corruptly offering, promising, authorizing or providing anything of value to a "foreign official"
for the purposes of influencing official decisions or obtaining or retaining business or otherwise obtaining favorable treatment. The
FCPA also requires companies to make and keep books, records, and accounts that accurately reflect transactions and dispositions of assets
and to maintain a system of adequate internal accounting controls. A violation of these laws or regulations could adversely affect our
business, results of operations, financial condition and reputation. Our policies and procedures designed to ensure compliance with these
regulations may not be sufficient and our directors, officers, employees, representatives, consultants, agents and business partners
could engage in improper conduct for which we may be held responsible.

 Non-compliance
with anti-corruption, anti-bribery, anti-money laundering or financial and economic sanctions laws could subject us to whistleblower
complaints, adverse media coverage, investigations, and severe administrative, civil and criminal sanctions, collateral consequences,
remedial measures and legal expenses, all of which could materially and adversely affect our reputation, business, financial condition
and results of operation.

 From
time to time, we may be involved in legal proceedings and commercial or contractual disputes, which could have an adverse impact on our
profitability and consolidated financial position.

 We
may be involved in legal proceedings and commercial or contractual disputes that, from time to time, are significant and which may harm
our reputation. These are typically claims that arise in the normal course of business including, without limitation, commercial or contractual
disputes, including warranty claims and other disputes with customers and suppliers; proprietary techniques and intellectual property
matters; personal injury claims; environmental issues; tax matters; and employment matters. It is difficult to predict the outcome or
ultimate financial exposure, if any, represented by these matters, and any such exposure may be material. Regardless of outcome, legal
proceedings can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

 We
must perform additional services and we are subject to financial reporting and other requirements for which our accounting and other
management systems and resources may not be adequate.

 In
connection with becoming a reporting company under the Securities and Exchange Act of 1934 ("the Exchange Act"), we will
become subject to periodic reporting and other obligations. We are working with our independent legal, accounting and financial advisors
to identify those areas in which changes should be made to our financial and management control systems to manage our growth and our
obligations as a public company. These areas include corporate governance, corporate control, internal audit, disclosure controls and
procedures and financial reporting and accounting systems. These reporting and other obligations will place significant demands on our
management, administrative and operational resources, including accounting resources.

 We
anticipate that we will need to hire additional tax, accounting and finance staff. We are reviewing the adequacy of our systems, financial
and management controls, and reporting systems and procedures, and we intend to make any necessary changes. If we are unable to upgrade
our financial and management controls, reporting systems and procedures in a timely and effective fashion, we may not be able to satisfy
our obligations as a public company on a timely basis.

 Environmental,
social and governance matters may cause us to incur additional costs.

 Some
legislatures, government agencies and listing exchanges have mandated or proposed, and others may in the future further mandate, certain
environmental, social and governance (" ESG ") disclosure or performance. For example, the Securities and Exchange Commission
has proposed rules that would mandate certain climate-related disclosures. In addition, we may face reputational damage in the event
our corporate responsibility initiatives or objectives do not meet the standards or expectations of stockholders, prospective investors,
lawmakers, listing exchanges or other stakeholders. Failure to comply with ESG-related laws, exchange policies or stakeholder expectations
could materially and adversely impact the value of our stock and related cost of capital, and limit our ability to fund future growth,
or result in increased investigations and litigation.

 Risks
Related to Syntec Optics' Financial Position and Capital Requirements

 Our
business is capital intensive, and we may not be able to raise additional capital on attractive terms, if at all. Any further indebtedness
we incur may limit our operational flexibility in the future.

 Over
time, we expect that we will need to raise additional funds, including through the issuance of equity, equity-related or debt securities
or by obtaining credit from financial institutions to fund, together with our principal sources of liquidity, ongoing costs, such as
research and development relating to our advanced manufacturing related products, expansion of our facilities, and new strategic investments.
We cannot be certain that additional capital will be available on attractive terms, if at all, when needed, which could be dilutive to
stockholders. If we raise additional funds through the issuance of equity or convertible debt or other equity-linked securities, our
existing stockholders could experience significant dilution. Any equity securities issued may provide for rights, preferences, or privileges
senior to those of common stockholders. If we raise funds by issuing debt securities, these debt securities would have rights, preferences,
and privileges senior to those of common stockholders.

 As
of December 31, 2023, we had approximately $8.9 million in outstanding indebtedness. We may be unable to repay our indebtedness when
due, or we may be unable to refinance our indebtedness on acceptable terms or at all. The incurrence of additional debt could adversely
impact our business, including limiting our operational flexibility by:

 making
 it difficult for us to pay other obligations;

 increasing
 our cost of borrowing from other sources;

 making
 it difficult to obtain favorable terms for any necessary future financing for working capital, capital expenditures, investments,
 acquisitions, debt service requirements, or other purposes;

 restricting
 us from making acquisitions or causing us to make divestitures or similar transactions;

 requiring
 us to dedicate a substantial portion of our cash flow from operations to service and repay our indebtedness, reducing the amount
 of cash flow available for other purposes;

 placing
 us at a competitive disadvantage compared to our less leveraged competitors; and

 limiting
 our flexibility in planning for and reacting to changes in our business.

 Restrictions
imposed by our outstanding indebtedness and any future indebtedness may limit our ability to operate our business and to finance our
future operations or capital needs or to engage in acquisitions or other business activities necessary to achieve growth.

 The
agreements governing our indebtedness restrict us from engaging in specified types of transactions. These restrictive covenants restrict
our ability to, among other things:

 incur
 additional indebtedness; and

 create
 or incur encumbrances or liens.

 Under
the agreements governing our indebtedness, we are also subject to certain financial covenants, including maintaining minimum levels of
Adjusted EBITDA, a minimum fixed charge coverage ratio, and debt service ratio. We cannot guarantee that we will be able to maintain
compliance with these covenants or, if we fail to do so, that we will be able to obtain waivers from the applicable lender(s) and/or
amend the covenants. Even if we comply with all of the applicable covenants, the restrictions on the conduct of our business could adversely
affect our business by, among other things, limiting our ability to take advantage of financing opportunities, mergers, acquisitions,
investments, and other corporate opportunities that may be beneficial to our business.

 A
breach of any of the covenants in the agreements governing our existing or future indebtedness could result in an event of default, which,
if not cured or waived, could trigger acceleration of our indebtedness, and may result in the acceleration of or default under any other
debt we may incur in the future to which a cross-acceleration or cross-default provision applies, which could have a material adverse
effect on our business, financial condition and results of operations. In the event of any default under our existing or future credit
facilities, the applicable lenders could elect to terminate borrowing commitments and declare all borrowings and loans outstanding, together
with accrued and unpaid interest and any fees and other obligations, to be immediately due and payable. In addition, our obligations
under our indebtedness are secured by, among other things, a security interest in our proprietary techniques and intellectual property.
During the existence of an event of default under our credit agreements, the applicable lender could exercise its rights and remedies
thereunder, including by way of initiating foreclosure proceedings against any assets constituting collateral for our obligations under
such credit facility.

 As
a "controlled company" within the meaning of the Nasdaq corporate governance rules, Syntec Optics is permitted to corporate
governance matters that differ significantly from Nasdaq corporate governance listing standards applicable to domestic U.S. companies
or rely on exemptions that are available to a "controlled company"; these practices may afford less protection to shareholders
than they would enjoy if Syntec Optics complied fully with Nasdaq corporate governance listing standards.

Optics is a "controlled company" as defined under the Nasdaq rules because it is expected that Mr. Kapoor, chairman of the
Syntec Optics Board, owns more than 50% of the total voting power of all issued and outstanding Syntec Optics Class A Shares. For so
long as Syntec Optics remains a controlled company under that definition, it is permitted to elect to rely, and may rely, on certain
exemptions from Nasdaq corporate governance rules.

 As
a "controlled company", Syntec Optics is permitted to elect to rely, and may rely, on certain exemptions from corporate governance
rules, including (i) an exemption from the rule that a majority of our board of directors must be independent directors; (ii) an exemption
from the rule that director nominees must be selected or recommended solely by independent directors; and (iii) an exemption from the
rule that the compensation committee must be comprised solely of independent directors.

Optics relies on the exemption available to a "controlled company" for the requirement that a majority of the board of directors
must be comprised of independent directors under Nasdaq Rule 5605(b)(1). Syntec Optics is not required to and will not voluntarily meet
this requirement.

 As
a result, you may not be provided with the benefits of certain corporate governance requirements of Nasdaq applicable to companies that
are subject to these corporate governance requirements.

 We
may issue additional shares of Syntec common stock or other equity securities without your approval, which would dilute your ownership
interests and may depress the market price of your shares.

 We
may issue additional shares of Syntec common stock or other equity securities of equal or senior rank in the future in connection with,
among other things, future acquisitions, repayment of outstanding indebtedness or under our 2023 Incentive Plan, without stockholder
approval, in a number of circumstances.

 Our
issuance of such additional shares of Syntec common stock or other equity securities of equal or senior rank could have the following
effects:

 your
 proportionate ownership interest in Syntec will decrease;

 the
 relative voting strength of each previously outstanding share of common stock may be diminished; or

 the
 market price of our shares of Syntec common stock may decline.

 We
may redeem unexpired public warrants prior to their exercise at a time that is disadvantageous to warrant holders, thereby making their
public warrants worthless.

 We
have the ability to redeem outstanding public warrants at any time after they become exercisable and prior to their expiration, at a
price of $0.01 per warrant, upon a minimum of 30 days' prior written notice of redemption; provided that the last reported sales
price of Syntec common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations
and the like) for any ten Trading Days within a 30 Trading Day period ending three business days prior to the date we send the notice
of redemption to the warrant holders. If and when the warrants become redeemable by us, we may exercise our redemption rights provided
that there is an effective registration statement covering the issuance of the shares of Syntec Optics common stock issuable upon exercise
of the Syntec Optics warrants. Redemption of the outstanding warrants could force the warrant holders to (i) exercise their warrants
and pay the exercise price therefor at a time when it may be disadvantageous for them to do so, (ii) sell their warrants at the then-current
market price when they might otherwise wish to hold their warrants or (iii) accept the nominal redemption price which, at the time the
outstanding public warrants are called for redemption, is likely to be substantially less than the market value of their warrants. If
we call the warrants for redemption as described above, our management will have the option to require all holders that wish to exercise
warrants to do so on a "cashless basis."

Optics will have a classified board of directors

Optics Certificate of Incorporation provides for a classified Board consisting of three classes of directors, with staggered three-year
terms. Only one class of directors will be elected at each annual meeting of our stockholders, with the other classes continuing for
the remainder of their respective three-year terms. This provision may have the effect of delaying a change in control of the Syntec
Optics board of directors. The existence of a classified board of directors could discourage a third party from making a tender offer
or otherwise attempting to obtain control of Syntec Optics as it is more difficult and time consuming for stockholders to replace a majority
of the directors on a classified board of directors.

 Unanticipated
changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect
our financial condition and results of operations.

 We
will be subject to income taxes in the United States, and our tax liabilities will be subject to the allocation of expenses in differing
jurisdictions. Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including:

 changes
 in the valuation of our deferred tax assets and liabilities;

 expected
 timing and amount of the release of any tax valuation allowances;

 tax
 effects of stock-based compensation;

 costs
 related to intercompany restructurings;

 changes
 in tax laws, regulations or interpretations thereof; or

 lower
 than anticipated future earnings in jurisdictions where we have lower statutory tax rates and higher than anticipated future earnings
 in jurisdictions where we have higher statutory tax rates.

 In
addition, we may be subject to audits of our income, sales and other transaction taxes by taxing authorities. Outcomes from these audits
could have an adverse effect on our financial condition and results of operations.

 Risks
Related to Ownership of Syntec Optics' Common Stock

 If
securities or industry analysts do not publish research or reports about Syntec Optics, or publish negative reports, Syntec
Optics' stock price and trading volume could decline.

 The
trading market for Syntec Optics' common stock will depend, in part, on the research and reports that securities or industry analysts
publish about Syntec Optics. Syntec Optics will not have any control over these analysts. If Syntec Optics' financial performance
fails to meet analyst estimates or one or more of the analysts who cover Syntec Optics downgrade its common stock or change their opinion,
Syntec Optics' stock price would likely decline. If one or more of these analysts cease coverage of Syntec Optics or fail to regularly
publish reports on Syntec Optics, it could lose visibility in the financial markets, which could cause Syntec Optics' stock price
or trading volume to decline.

 An
active trading market for Syntec Optics' securities may not be available on a consistent basis to provide stockholders with adequate
liquidity.

Optics common stock and warrants are listed on Nasdaq under the symbols "OPTX" and "OPTXW" respectively, and
trade on that market. However, Syntec Optics cannot assure you that an active trading market for its common stock will be sustained.
Accordingly, Syntec Optics cannot assure you of the liquidity of any trading market, your ability to sell your shares of its common stock
when desired or the prices that you may obtain for your shares.

 Warrants
will become exercisable for Syntec Optics' common stock, which would increase the number of shares eligible for future resale in
the public market and result in dilution to Syntec Optics' stockholders.

 Warrants
will become exercisable for the Company's common stock, which would increase the number of shares eligible for future resale in
the public market and result in dilution to our stockholders. There are 7,187,500 outstanding public warrants to purchase 7,187,500 shares
of common stock at an exercise price of $11.50 per share, which warrants will become exercisable commencing the later of 30 days following
the Closing and 12 months from the closing of the OmniLit IPO, which closed on November 12, 2021. In addition, there will be 6,920,500
private warrants outstanding exercisable for 6,920,500 shares of common stock at an exercise price of $11.50 per share.

 To
the extent such warrants are exercised, additional shares of common stock will be issued, which will result in dilution to the holders
of the Company's common stock and increase the number of shares eligible for resale in the public market. Sales of substantial
numbers of such shares in the public market could adversely affect the market price of the Company's common stock, the impact of
which is increased as the value of our stock price increases.

Optics' operating results may fluctuate significantly, which makes its future operating results
difficult to predict and could cause its operating results to fall below expectations or any guidance it may provide.

Optics' quarterly and annual operating results may fluctuate significantly, which makes it difficult for it to predict its future
operating results. These fluctuations may occur due to a variety of factors, many of which are outside of its control, including, but
not limited to:

 Optics' ability to engage target customers and successfully convert these customers into meaningful orders in the future;

 the
 size and growth of the potential markets for Syntec Optics' products and its ability to serve those markets;

 the
 level of demand for any products, which may vary significantly;

 future
 accounting pronouncements or changes in its accounting policies; and

 macroeconomic
 conditions, both nationally and locally; and

 any
 other change in the competitive landscape of its industry, including consolidation among Syntec Optics' competitors or partners.

 The
cumulative effects of these factors could result in large fluctuations and unpredictability in Syntec Optics' quarterly and annual
operating results. As a result, comparing its operating results on a period- to-period basis may not be meaningful. Investors should
not rely on its past results as an indication of its future performance.

 This
variability and unpredictability could also result in its failing to meet the expectations of industry or financial analysts or investors
for any period. If Syntec Optics' revenue or operating results fall below the expectations of analysts or investors or below any
forecasts Syntec Optics may provide to the market, or if the forecasts it provides to the market are below the expectations of analysts
or investors, the price of Syntec Optics common stock could decline substantially. Such a stock price decline could occur even when it
has met any prior publicly stated revenue or earnings guidance it may provide.

 Changes
in laws, regulations or rules, or a failure to comply with any laws, regulations or rules, may adversely affect Syntec Optics'
business, investments and results of operations.

Optics will be subject to laws, regulations and rules enacted by national, regional, and local governments and Nasdaq. In particular,
Syntec Optics will be required to comply with certain SEC, Nasdaq and other legal or regulatory requirements. Compliance with, and monitoring
of, applicable laws, regulations and rules may be difficult, time consuming and costly. Those laws, regulations or rules and their interpretation
and application may also change from time to time and those changes could have a material adverse effect on Syntec Optics' business,
investments and results of operations. In addition, a failure to comply with applicable laws, regulations or rules, as interpreted and
applied, could have a material adverse effect on Syntec Optics' business and results of operations.

 The
second amended and restated certificate of incorporation will designate specific courts as the exclusive forum for substantially all
stockholder litigation matters, which could limit the ability of Syntec Optics' stockholders to obtain a favorable forum for disputes
with Syntec Optics or its directors, officers or employees.

 The
second amended and restated certificate of incorporation will require, to the fullest extent permitted by law, that derivative actions
brought in Syntec Optics' name, actions against current or former directors, officers or other employees for breach of fiduciary
duty, any action asserting a claim arising pursuant to any provision of the DGCL, the second amended and restated certificate of incorporation
or the Syntec Optics amended and restated bylaws, any action asserting a claim governed by internal affairs doctrine of the State of
Delaware or any other action asserting an "internal corporate claim" (as defined in Section 115 of the DGCL), confers jurisdiction
to the Court of Chancery of the State of Delaware (or, if and only if the Court of Chancery of the State of Delaware does not have subject
matter jurisdiction thereof, any state court located in the State of Delaware or, if and only if all such state courts lack subject matter
jurisdiction, the federal district court for the District of Delaware), unless Syntec Optics consents in writing to the selection of
an alternative forum. This provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act or any
other claim for which the federal courts have exclusive jurisdiction. The second amended and restated certificate of incorporation also
provides that, unless Syntec Optics consents in writing to the selection of an alternative forum, the federal district courts of the
United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities
Act. This provision may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes
with Syntec Optics and Syntec Optics' directors, officers or other employees and may have the effect of discouraging lawsuits against
Syntec Optics' directors, officers and other employees. Furthermore, stockholders may be subject to increased costs to bring these
claims, and the exclusive forum provision could have the effect of discouraging claims or limiting investors' ability to bring
claims in a judicial forum that they find favorable.

 In
addition, the enforceability of similar exclusive forum provisions in other companies' certificates of incorporation has been challenged
in legal proceedings, and it is possible that, in connection with one or more actions or proceedings described above, a court could rule
that this provision in the second amended and restated certificate of incorporation is inapplicable or unenforceable. In March 2020,
the Delaware Supreme Court issued a decision in Salzburg et al. v. Sciabacucchi, which found that an exclusive forum provision
providing for claims under the Securities Act to be brought in federal court is facially valid under Delaware law. We intend to enforce
this provision, but we do not know whether courts in other jurisdictions will agree with this decision or enforce it. If a court were
to find the exclusive forum provision contained in the second amended and restated certificate of incorporation to be inapplicable or
unenforceable in an action, Syntec Optics may incur additional costs associated with resolving such action in other jurisdictions, which
could harm its business, prospects, financial condition and operating results.

 The
second amended and restated certificate of incorporation could discourage another company from acquiring Syntec Optics and may prevent
attempts by its stockholders to replace or remove its management.

 Provisions
in our second amended and restated certificate of incorporation and our amended and restated bylaws to be in effect immediately prior
to the consummation of the Business Combination may discourage, delay or prevent, a merger, acquisition or other change in control of
Syntec Optics that stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium
for their shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of Syntec
Optics common stock, thereby depressing the market price of its common stock. In addition, these provisions may frustrate or prevent
any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace
members of our board of directors. These provisions
provide, among other things, that:

 the
 Syntec Optics board of directors will be divided into three classes, with each class serving staggered three-year terms, which may
 delay the ability of stockholders to change the membership of a majority of our board of directors;

 the
 Syntec Optics board of directors has the exclusive right to expand the size of its board of directors and to elect directors to fill
 a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders
 from being able to fill vacancies on our board of directors;

 Optics stockholders may not act by written consent, which forces stockholder action to be taken at an annual or special meeting of
 stockholders;

 a
 special meeting of stockholders may be called only by a majority of the Syntec Optics board of directors, which may delay the
 ability of Syntec Optics stockholders to force consideration of a proposal or to take action, including the removal of directors;

 the
 second amended and restated certificate of incorporation prohibits cumulative voting in the election of directors, which limits the
 ability of minority stockholders to elect director candidates;

 the
 Syntec Optics board of directors may alter certain provisions of the Syntec Optics amended and restated bylaws without obtaining
 stockholder approval;

 the
 approval of the holders of at least sixty-six and two-thirds percent (66 2 3%) of the Syntec Optics common shares
 entitled to vote at an election of the Syntec Optics board of directors is required to adopt, amend, alter or repeal our amended
 and restated bylaws or amend, alter, change or repeal or adopt any provision of the second amended and restated certificate of incorporation
 inconsistent with the provisions of the Syntec Optics second amended and restated certificate of incorporation regarding the election
 and removal of directors;

 stockholders
 must provide advance notice and additional disclosures to nominate individuals for election to the Syntec Optics board of directors
 or to propose matters that can be acted upon at a stockholders' meeting, which may discourage or deter a potential acquirer
 from conducting a solicitation of proxies to elect the acquirer's own slate of directors or otherwise attempting to obtain
 voting control of the Syntec Optics common stock; and

 the
 Syntec Optics board of directors is authorized to issue shares of preferred stock and to determine the terms of those shares, including
 preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile
 acquirer.

 Moreover,
because Syntec Optics is incorporated in Delaware, it will be governed by the provisions of Section 203 of the DGCL, which prohibits
a person who owns in excess of 15% of the Syntec Optics outstanding voting stock from merging or combining with Syntec Optics for a period
of three years after the date of the transaction in which the person acquired in excess of 15% of the Syntec Optics outstanding voting
stock, unless the merger or combination is approved in a prescribed manner.

Optics will be an emerging growth company and any decision to comply only with certain reduced reporting and disclosure requirements
applicable to emerging growth companies could make Syntec Optics' common stock less attractive to investors.

Optics is an "emerging growth company," as defined in the JOBS Act. For as long as it continues to be an emerging growth
company, Syntec Optics may choose to take advantage of exemptions from various reporting requirements applicable to other public companies
but not to "emerging growth companies," including:

 not
 being required to have an independent registered public accounting firm audit Syntec Optics' internal control over financial
 reporting under Section 404 of the Sarbanes-Oxley Act;

 reduced
 disclosure obligations regarding executive compensation in Syntec Optics' periodic reports and annual report on Form 10-K;
 and

 exemptions
 from the requirements of holding non-binding advisory votes on executive compensation and stockholder approval of any golden parachute
 payments not previously approved.

 As
a result, the stockholders may not have access to certain information that they may deem important. Syntec Optics' status as an
emerging growth company will end as soon as any of the following takes place:

 the
 last day of the fiscal year in which Syntec Optics has at least $1.07 billion in annual revenue;

 the
 date Syntec Optics qualifies as a "large accelerated filer," with at least $700.0 million of equity securities held by
 non-affiliates;

 the
 date on which Syntec Optics has issued, in any three-year period, more than $1.0 billion in non- convertible debt securities; or

 the
 last day of the fiscal year ending after the fifth anniversary of the OmniLit IPO.

 Under
the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards
apply to private companies. Syntec Optics may elect to take advantage of this extended transition period and as a result, its financial
statements may not be comparable with similarly situated public companies.

Optics cannot predict if investors will find Syntec Optics' common stock less attractive if it chooses to rely on any of the exemptions
afforded emerging growth companies. If some investors find Syntec Optics' common stock less attractive because Syntec Optics relies
on any of these exemptions, there may be a less active trading market for Syntec Optics' common stock and the market price of Syntec
Optics' common stock may be more volatile and may decline.

 If
Syntec Optics fails to maintain an effective system of disclosure controls and internal control over financial reporting, Syntec Optics'
ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired, which may adversely
affect investor confidence in Syntec Optics and, as a result, the market price of Syntec Optics common stock.

 As
a public company, Syntec Optics will be required to comply with the requirements of the Sarbanes-Oxley Act, including, among other things,
that Syntec Optics maintain effective disclosure controls and procedures and internal control over financial reporting. Syntec Optics
is continuing to develop and refine its disclosure controls and other procedures that are designed to ensure that information required
to be disclosed by Syntec Optics in the reports that Syntec Optics will file with the SEC is recorded, processed, summarized and reported
within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange
Act is accumulated and communicated to Syntec Optics' management, including Syntec Optics' principal executive and financial
officers and Board of Directors.

Optics will continue to improve its internal control over financial reporting. Syntec Optics will be required to make a formal assessment
of the effectiveness of its internal control over financial reporting and once Syntec Optics ceases to be an emerging growth company,
Syntec Optics will be required to include an attestation report on internal control over financial reporting issued by Syntec Optics'
independent registered public accounting firm. To achieve compliance with these requirements within the prescribed time period, Syntec
Optics will be engaging in a process to document and evaluate Syntec Optics' internal control over financial reporting, which is
both costly and challenging. In this regard, Syntec Optics will need to continue to dedicate internal resources, potentially engage outside
consultants and adopt a detailed work plan to assess and document the adequacy of Syntec Optics' internal control over financial
reporting, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement
process for internal control over financial reporting. There is a risk that Syntec Optics will not be able to conclude, within the prescribed
time period or at all, that Syntec Optics' internal control over financial reporting is effective as required by Section 404 of
the Sarbanes- Oxley Act. Moreover, Syntec Optics' testing, or the subsequent testing by Syntec Optics' independent registered
public accounting firm, may reveal additional deficiencies in Syntec Optics' internal control over financial reporting that are
deemed to be material weaknesses.

 Any
failure to implement and maintain effective disclosure controls and procedures and internal control over financial reporting, including
the identification of one or more material weaknesses, could cause investors to lose confidence in the accuracy and completeness of Syntec
Optics' financial statements and reports, which would likely have an adverse effect on the market price of Syntec Optics'
common stock. In addition, Syntec Optics could be subject to sanctions or investigations by the stock exchange on which Syntec Optics'
common stock is listed, the SEC and other regulatory authorities.

 Insiders
will have substantial influence over Syntec Optics, which could limit your ability to affect the outcome of key transactions, including
a change of control.

 The beneficial ownership of Common Stock is based on 36,868,266 shares of Common Stock issued and outstanding. Mr.
Kapoor owns 30,631,090 shares of Common Stock.

 As
a result, these stockholders, if they act together, will not be able to influence Syntec Optics' management and affairs and
all matters requiring stockholder approval, including the election of directors, amendments of Syntec Optics'
organizational documents and approval of significant corporate transactions. Mr. Kapoor will retain voting and investment discretion
following the business combination given Mr. Kapoor's holdings of approximately 83% the outstanding shares of Syntec
Optics, will be able to influence the corporate decisions without having to act with other stockholders. They may also have
interests that differ from yours and may vote in a way with which you disagree and which may be adverse to your interests. This
concentration of ownership may have the effect of delaying, preventing or deterring a change in control of Syntec Optics and
might affect the market price of Syntec Optics' common stock.

 The
numbers of shares and percentage interests set forth above are based on a number of assumptions, including that: (1) Syntec Optics
Holdings, Inc. does not issue any additional equity securities prior to the Business Combination and no other event occurs that
would change the Merger Consideration from what it would have been as of the date of the initial signing of the Business Combination
Agreement; and (2) there is no exercise of OmniLit's 14,107,989 outstanding warrants at an exercise price of $11.50 per share
(which warrants are not exercisable until 30 days after the completion of the Business Combination). If the actual facts differ from
these assumptions, the numbers of shares and percentage interests set forth above will be different.

 Because
there are no current plans to pay cash dividends on the Syntec Optics common stock for the foreseeable future, you may not receive any
return on investment unless you sell your Syntec Optics common stock at a price greater than what you paid for it.

Optics intends to retain future earnings, if any, for future operations, expansion and debt repayment and there are no current plans
to pay any cash dividends for the foreseeable future. The declaration, amount and payment of any future dividends on shares of Syntec
Optics common stock will be at the sole discretion of the Syntec Optics board of directors. The Syntec Optics board of directors may
take into account general and economic conditions, Syntec Optics' financial condition and results of operations, Syntec Optics'
available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions, implications
of the payment of dividends by Syntec Optics to its stockholders or by its subsidiaries to it and such other factors as the Syntec Optics
board of directors may deem relevant. As a result, you may not receive any return on an investment in Syntec Optics common stock unless
you sell your Syntec Optics common stock for a price greater than that which you paid for it.

 Item
1B. Unresolved Staff Comments

 Not
applicable.

 Item
1C. Cybersecurity

 Risk
Management and Strategy

 We
recognize the importance of protecting information assets such as the personally identifiable information of our employees, and proprietary
business information, and have adopted policies, management oversight, accountability structures, and technology processes designed to
safeguard this information. All of our employees are required to attest annually to our information security policies and participate
in regular security awareness training to protect their information and the Syntec Optics data and systems to which they have access.
These trainings also instruct employees on how to report any potential privacy or data security issues.

 We
have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability
of our critical systems and information. Our cybersecurity risk management program includes a cybersecurity incident response plan. We
design and assess our program based on various cybersecurity frameworks, such as the National Institute of Standards and Technology ("NIST").
We use these cybersecurity frameworks and information security standards as a guide to help us identify, assess, and manage cybersecurity
risks relevant to our business. Our cybersecurity risk management program is integrated into our overall enterprise risk management program,
sharing common methodologies and governance processes across the enterprise risk management program. Specifically, our cybersecurity
risk management program includes:

risk assessments designed to help identify material cybersecurity risks to our critical systems and enterprise information technology
("IT") environment;

an internal security team and an external service provider principally responsible for managing (1) our cybersecurity risk assessment
processes, (2) our security controls, and (3) our response to cybersecurity threats and incidents;

the use of external service providers, where appropriate, to assess, test, or otherwise assist with aspects of our cybersecurity security
controls;

cybersecurity awareness training for our employees, incident response personnel, and senior management on an annual basis as part of
the risk mitigation strategy;

annual testing of the effectiveness of the cybersecurity awareness training;

a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents;

a third-party risk management process for service providers, suppliers, and vendors; and

cybersecurity internal and external penetration testing.

 We
work with third-party service providers to proactively assess our information security program and provide us with an industry view of
the cyberthreat landscape, in addition to monitoring and supporting our control environment and breach notification and response processes.

 As
of the date of this Annual Report on Form 10-K, cybersecurity threats have not materially affected and we believe are not reasonably
likely to materially affect Syntec Optics, including our business strategy, results of operations, or financial condition. Refer to the
risk factor captioned "Cyberattacks and security vulnerabilities could lead to reduced revenue, increased costs, liability claims,
or harm to our reputation or competitive position." in Part I, Item 1A. "Risk Factors" for more information regarding
cybersecurity risks and potential related impacts on Syntec Optics.

 Governance

 We
have a formal information security program, designed to develop and maintain privacy and data security practices to protect Syntec Optics
assets and sensitive third-party information, including personal information. This program is governed by a sub-committee of our Audit
Committee, comprising members of senior management, which meets regularly and reports to the Board of Directors at least annually (the
"Information Security Governance Committee"). Our Audit Committee Chair has a certificate in Cybersecurity Oversight from the Software Engineering Institute at Carnegie Mellon University. Members
of the Information Security Governance Committee oversee communications with the Board of Directors regarding material cybersecurity
incidents and provide the Board with a summary of risks from current cybersecurity threats on a regular basis, as well as updates on
management's information security program oversight and maintenance activities, and any material changes to Syntec Optics'
information security practices and procedures.

 We
take a risk-based approach to cybersecurity and have implemented policies throughout our operations that are designed to address cybersecurity
threats and our response to actual or suspected incidents. In particular, the Information Security Governance Committee is responsible
for the ongoing identification and assessment of reasonably foreseeable cybersecurity threats and based on these assessments, evaluating
and overseeing the implementation of safeguards for limiting such risks, including employee training and compliance, and detection and
prevention mechanisms. If a cybersecurity incident occurs, the Information Security Governance Committee will assemble an incident response
team responsible for the identification, remediation, and post-incident review of such incident, engage outside advisors and notify third
parties as appropriate, and assess the materiality of the nature, scope, and timing of a given incident and whether public disclosure
is required.

 The
CFO, in coordination with the Information Security Governance Committee, is responsible for leading the assessment and management of
cybersecurity risks. The CFO holds a Masters Degree in Information Systems, and provides the Board of Directors as part of the Information
Security Governance Committee's updates discussed above and regularly communicates with the other members of the Information Security
Governance Committee and senior management regarding cybersecurity risks.

 Item
2. Properties

 Our
corporate headquarters is located at 515 Lee RD., Rochester, New York 14606 in an approximately 90,000 square foot manufacturing facility.
The lease for this building was entered into on July 23, 2015 and expires July, 2025, and we have the option to extend for an additional
five-year term. We believe we will be able to obtain additional space, if necessary, on commercially reasonable terms. The current rent
is $28,050 payable monthly.

 Item
3. Legal Proceedings

 From
time to time, we may become involved in litigation or other legal proceedings. We are not currently a party to any litigation or legal
proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business. Regardless of outcome,
litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

 Item
4. Mine Safety Disclosures

 Not
applicable.

 Part
II

 Item
5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Market
Information

 Our
common stock is currently listed on the Nasdaq Capital Market under the symbol "OPTX" and our Public Warrants are currently
listed on the Nasdaq Capital Market under the symbol "OPTXW". As of May 22, 2024, the closing price of our common stock
and warrants was $3.28 and $0.1760, respectively. As of May 22, 2024, there were 330 holders of record of our common stock and 140 holders
of record of our Public Warrants.

 Dividend
Policy

 We
currently intend to retain all available funds and any future earnings to fund the growth and development of our business. We have never
declared or paid any cash dividends on our common stock. We do not intend to pay cash dividends to our stockholders in the foreseeable
future. Investors should not purchase our common stock with the expectation of receiving cash dividends.

 Any
future determination to declare dividends will be made at the discretion of our board of directors and will depend on our financial condition,
operating results, capital requirements, general business conditions, and other factors that our board of directors may deem relevant.

 Item
6. [Reserved]

 Item
7. Management's Discussion and Analysis of Financial Condition and Results of Operations

 As
a result of the completion of the Business Combination, the financial statements of Legacy Syntec are now the financial statements of
us. Prior to the Business Combination, we had no operating assets but, upon consummation of the Business Combination, the business and
operating assets of Legacy Syntec acquired by us became our sole business and operating assets. Accordingly, the financial statements
of Legacy Syntec and their respective subsidiaries as they existed prior to the Business Combination and reflecting the sole business
and operating assets of the Company going forward, are now the financial statements of us.

 All
statements other than statements of historical fact included in this section regarding our financial position, business strategy and
the plans and objectives of management for future operations, are forward- looking statements. When used in this section, words such
as "anticipate," "believe," "estimate," "expect," "intend" and similar expressions,
as they relate to our management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management,
as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those
contemplated by the forward- looking statements as a result of certain factors detailed herein. All subsequent written or oral forward-looking
statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph.

 Some
of the information contained in this discussion and analysis or set forth elsewhere, including information with respect to our plans
and strategy for our business include forward-looking statements that involve risks, uncertainties and assumptions. You should read the
sections titled "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" for a discussion of
important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking
statements contained in the following discussion and analysis.

 Overview

Optics believes that photon enabled technologies are more than just a trend. Our goal is to deliver impactful solutions for optics and
photonics enabled solutions globally. We believe that the innovative design for manufacturing of our optics and photonics enabling products
is ideally suited for the demands of modern OEMs who rely on opto-electronics, light enabled devices, and intelligence that require high-precision
and reliability. Ultimately, our vertically integrated advanced manufacturing platform offers our clients across several end markets
competitively priced and disruptive light-enabled technologies and sub-systems.

Optics was formed more than two decades ago from the aggregation of three advanced manufacturing companies (Wordingham Machine Co., Inc.,
Rochester Tool and Mold, Inc. and Syntec Technologies, Inc.) that were started in the 1980s. In 2000, Syntec Technologies, Inc created
the "doing business as" name of Syntec Optics to unify the three companies' respective offerings under a single trade
name. Wordingham Machine Co., Inc, and Rochester Tool and Mold, Inc. became wholly owned subsidiaries of Syntec Technologies, Inc. in
2018 and the three companies legally merged in December 2022 as Syntec Optics, Inc. Syntec Optics has addressed the optical needs of
customers in defense, consumer, and biomedical industries. Over the past 20 years, Syntec has been based in the Greater Rochester, New
York area, and steadily growing and developing the unifying platform. Our intellectual property is protected with a portfolio of over
4 issued and/or pending patents, with several proprietary trade secrets surrounding our advanced manufacturing techniques. One in five
employees has been with Syntec Optics for over a decade.

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

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

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

is focused on three key end markets of defense, biomedical, and consumer all with several mission-critical applications with strong
tailwinds. In 2023, Syntec expanded into the end-market of communications. We believe these end markets to be acyclical based upon
the company having positive aggregate cash flow for the past decade in spite of economic downturns. We believe the consistency of
revenues over the past decade of operations, independent of the trends of the general economy, and the mission-critical nature of
our product offerings, are our bases that these markets are acyclical. We believe our platform is well positioned as the foundation
for further organic and inorganic growth with quality earnings and high margin offerings.

 Optics
is currently enabling 11% of the global economy, from smart phone cameras and extended reality devices to low orbit satellite telescopes
to keeping our soldiers safe with night vision devices and patients healthy with intelligent light. This 11% figure represents the estimated
value of the global optics and photonics products relative to annual global gross domestic product. As the world transitions to further
adopt optically and photonically enabled products, we will continue our mission of developing innovative technology to serve these markets
with affordable high-performance products globally. We will continue to focus on our core competencies of providing innovative technology,
expanding our brand portfolio and providing affordable, sustainable and accessible optics and photonics enablers, all while being designed
and manufactured in the United States.

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

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

 As
of December 31, 2023, we had cash totaling $2.2 million. Our net income for the year ended December 31, 2023 was $2.0 million and our
net loss for the year ended December 31, 2022 was $0.43 million. As a result of becoming a publicly traded company, we continue to need
to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices.
We expect to incur additional annual expenses as a public company for, among other things, directors' and officers' liability
insurance, director fees and additional internal and external accounting and legal and administrative resources, including increased
audit and legal fees. As discussed under "—Liquidity and Capital Resources" below we do not expect that we will need
to raise additional funds, including through the issuance of equity, equity-related or debt securities or by obtaining additional credit
from financial institutions to fund, together with our principal sources of liquidity, ongoing costs. We may raise additional funds to
support strategic inorganic investments. If such financings are not available, or if the terms of such financings are less desirable
than we expect, we may be forced to take actions to reduce our inorganic growth plans, including not seeking potential acquisition opportunities,
which may adversely affect our business, financial condition and prospects.

 Key
Factors Affecting Our Operating Results

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

 End
Market Consumers

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

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

 Demand
from end markets is impacted by a number of factors, including travel, fuel costs
and energy demands (including an increasing trend towards the use of green energy), as well as overall macro-economic conditions. Sales
of our optics and photonics enabled components and sub-components have also benefited from the increased global conflict, the United
States dynamic relationships with other world powers that may have a conflicting view with western-style democracy, the movement towards
reshoring of advanced manufacturing, biomedical components and sub-components needed to support physicians, and the increased global demand for high-fidelity data communications on all corners of the globe. However, we also
experienced delays and disruptions in our supply chain, as well as labor shortages and shutdowns, which disrupted the production of our
optic and photonics enables components and sub-components and impacted our ability to keep up with customer demand.

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

 Supply

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

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

 Product
and Customer Mix

 Our
sales consist of sales of highly specialized optic and photonic enabled components and sub-components. These products are sold to
different customer types (e.g., OEMs and Tier 1 manufacturers) and at different prices and involve varying levels of costs. In any
particular period, changes in the mix and volume of particular products sold and the prices of those products relative to other
products will impact our average selling price and our cost of goods sold. The price of our products may also increase as a result
of increases in the cost of components due to inflation, labor and raw materials. Three customers who accounted for 53% and 50% of
revenues for the year ended December 31, 2023 and December 31, 2022, respectively. In addition, revenues from these larger customers may fluctuate from time to time based on these customers'
business needs and customer experience, the timing of which may be affected by market conditions or other factors outside of our
control. These customers have a broad product purchase mix across various departments of Syntec Optics. Syntec Optics supplies
several mission critical components and sub-components to these customers that are not tied to a single application, customer
initiative, or purchase order. We expect sales to increase as we further advance our full-system design expertise and product
offerings and customers increasingly demand more sophisticated systems, rather than drop-in replacements. In addition to the impacts
attributable to the general sales mix across our products, our results of operations are impacted by the relative margins of
products sold. As we continue to introduce new products at varying price points, our overall gross margin may vary from period to
period as a result of changes in product and customer mix.

 Production
Capacity

 All
of our design, advanced manufacturing and assembly currently takes place at our nearly 90,000 square foot headquarters and manufacturing
facility located in Rochester, New York. We currently operate optical, opto-mechanical and electro-optical assembly lines in addition
to molding, nanomachining, testing and thin-film production lines. Consistent with our operating history, we plan to continue to automate
additional aspects of our advanced manufacturing operations. Our existing facility has the capacity to add additional production lines
and construct and operate pilot production lines for new components and sub-components, all designed to maximize the capacity of our
manufacturing facility. Although our automation efforts are expected to reduce our costs of goods, we may not fully recognize the anticipated
savings when planned and could experience additional costs or disruptions to our production activities. In Q3 2022, Syntec Optics experienced
a one-time business interruption event where a power company was excavating and accidentally cut an underground power line that supplied
electricity to Syntec Optics and the local community. After repairs were made to Syntec Optics manufacturing equipment, Syntec Optics
regained its full manufacturing capacity.

 Competition

 We
compete with traditional glass optic manufacturers and electro-optic manufacturers, who primarily either import their products or components
or manufacture products under a private label. As we continue to expand into new markets, develop new products and move towards production
of our polymer based and glass-polymer based optic hybrids and photonics enabled components and sub-components, we will experience competition
with a wider range of companies. These competitors may have greater resources than we do and may be able to devote greater resources
to the development of their current and future technologies. Our competitors may be able to source materials and components at lower
costs, which may require us to evaluate measures to reduce our own costs, lower the price of our products or increase sales volumes in
order to maintain our expected levels of profitability.

 Research
and Development

 Our
research and development are primarily focused on the advanced manufacturing of polymer and glass-polymer based optic and photonics enabled
components and sub-components. The next stage in our technical development is to construct our products to optimize performance, lower
weight and increase longevity to meet and exceed industry standards for our target end markets. Ongoing testing and optimizing of more
complicated systems and sub-systems for our existing end markets will assist us in increasing penetration in our current end markets
and expanding into targeted end markets.

 Components
of Results of Operations

 Net
Sales

 Net
sales are primarily generated from the sale of our optics and photonics enabled components and sub-components to OEMs.

 Cost
of Goods Sold

 Cost
of goods sold includes the cost of raw materials and other components of our optic and photonic enabled components and sub-components,
labor, overhead, utilities, and depreciation and amortization.

 Gross
Profit

 Gross
profit, calculated as net sales less cost of goods sold, may vary between periods and is primarily affected by various factors including
average selling prices, product costs, product mix, customer mix and production volumes.

 Operating
Expenses

 General
and Administrative

 General
and administrative costs include personnel-related expenses attributable to our executive, finance, human resources, and information
technology organizations, certain facility costs, and fees for professional services.

 Total
Other Income (Expense)

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

 Results
of Operations

 Comparisons
for the Years Ended December 31, 2023 and 2022

 The
following table sets forth our results of operations for the years ended December 31, 2023 and 2022. This data should be read together
with our financial statements and related notes included elsewhere in this Annual Report, and is qualified in its entirety by reference
to such financial statements and related notes.

 Years ended December 31,

 2023

 % Net Sales

 2022

 % Net Sales

 (in thousands)

 Net Sales

 $
 29,441,180

 %

 27,839,312

 %

 Cost of Goods Sold

 21,520,189

 %

 21,713,220

 %

 Gross profit

 7,920,991

 %

 6,126,092

 %

 General and administrative

 6,379,879

 %

 6,654,326

 %

 Income (Loss) From Operations

 1,541,112

 %

 (528,234
)

 (2
)%

 Other Income (Expense)

 Other Income

 370,914

 %

 274,810

 %

 Interest Income (Expense)

 (654,765
)

 (2
)%

 (335,974
)

 (1
)%

 Total Other Income (Expense)

 (283,851
)

 (1
)%

 (61,164
)

 (0
)%

 Income (Loss) Before Taxes

 1,257,261

 %

 (589,398
)

 (2
)%

 Income Tax Expense (Benefit from)

 (719,172
)

 (2
)%

 (154,829
)

 (1
)%

 Net Income (Loss)

 $

 %

 $
 (434,569
)

 (2
)%

 Net
Sales

 Net
sales increased by $1.6 million, or 5.8%, to $29.4 million for the years ended December 31, 2023, as compared to $27.8 million for
the year ended December 31, 2022. This increase was primarily due to an increase in non-recurring engineering services related to
space communications. Approximately $1.9 million in revenue was an increase in non-recurring engineering services related to space
communications and a decrease of approximately $.3 million across all end markets in product revenue.

 Cost
of Goods Sold

 Cost
of revenue decreased by $0.2 million, or 0.9%, to $21.5 million for the year ended December 31, 2023, as compared to $21.7 million
for the year ended December 31, 2022. This decrease was primarily due to a decrease of $0.2 million of utility costs.

 Gross
Profit

 Gross
profit increased by $1.8 million, or 29.5%, to $7.9 million for the year ended December 31, 2023, as compared to $6.1 million for the
year ended December 31, 2022. This increase was primarily due to the increase in revenue, partially offset by the decrease in cost of goods sold.

 General
and Administrative Expenses

 General
and administrative expenses decreased by $0.3 million, or 4.5%, to $6.4 million for the year ended December 31, 2023, as compared to
$6.7 million for the year ended December 31, 2022. This decrease was primarily due to an approximately $0.1 million decrease in
advertising expenses and decrease of $0.2 million in management fees.

 Total
Other Income (Loss)

 Other
income (expense) decreased by $0.2 million, or 364.1%, to ($0.3) million for the year ended December 31, 2023, as compared to other
income (expense) of ($0.1) million for the year ended December 31, 2022. This decrease was primarily due to interest expense due to increased rates for the debt facilities.

 Income
Tax Expense (Benefit from)

 Income
tax expense (benefit) decreased by ($0.5) million, or 359.8%, to ($0.7) million for the year ended December 31, 2023, as compared to
($0.2) million for the year ended December 31, 2022. This decrease was primarily due to an increase in the benefit from deferred tax
assets.

 Net
Income (Loss)

 Net
income increased by $2.4 million, or 568.1%, to $2.0 million for the year ended December 31, 2023, as compared to ($0.4) million for
the year ended December 31, 2022. This increase was primarily due to an increase in sales of $1.6 million, a temporary reduction in
cost of goods sold of $0.2 million, and a temporary reduction in general and administrative expenses of $0.3 million.

 Non-GAAP
Financial Measures

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

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

 Adjusted
EBITDA

 We
define adjusted EBITDA, a non-GAAP financial measure, as net earnings (loss) before interest and other expenses, net, income tax expense,
depreciation and amortization, as adjusted to exclude non-recurring items such as management fees, contributions, expenses, business
interruption adjustment and transaction expenses. The non-recurring costs included as Contributions, Management Fees, & Expenses
include special donations, owner-related management fees, private-company insurances, and employee policy related expenses, all of which
will not be incurred after the Closing and therefore are non-recurring in nature. Likewise, the transaction costs are non-recurring as
they include legal and accounting fees in connection with the Business Combination which will not be incurred after the Closing. The
business interruption adjustment was related to a one-time event where a power company was excavating and accidentally cut an underground
power line that supplied electricity to Syntec Optics and the local community. After repairs were made to Syntec Optics manufacturing
equipment, Syntec Optics regained its full manufacturing capacity. The business interruption reimbursement represents the reimbursement
with Syntec Optics' insurer for lost revenue and damages as a result of the power outage suffered on August 9, 2022 and is not
net of any insurance reimbursements. Transaction costs represent professional service fees associated with the proposed business combination
and will not occur after the Business Combination. We utilize adjusted EBITDA as an internal performance measure in the management of
our operations because we believe the exclusion of these non-cash and non-recurring charges allow for a more relevant comparison of our
results of operations to other companies in our industry and is in accordance with the Non-GAAP Financial Measures Compliance &
Disclosure Interpretations (Reference Question 102.03).

 The
table below presents our adjusted EBITDA, reconciled to net income for the periods indicated.

 NON-GAAP
RECONCILICATION OF EBITDA

 FOR
THE YEARS ENDED DECEMBER 31, 2023 AND 2022

 2023

 2022

 Net (Loss) Income

 $

 $
 (434,569
)

 Depreciation & Amortization

 2,781,735

 3,151,448

 Interest Expenses

 642,314

 325,127

 Taxes

 (719,172
)

 (154,829
)

 Non-Recurring Items

 Business Interruption Adjustment

 -

 600,292

 Other Income- Sale of Equipment & Accessories

 (10,068
)

 -

 Transaction Filing Fees

 344,752

 102,732

 Non-Recurring Contributions, Management Fees & Expenses

 318,334

 910,088

 Adjusted EBITDA

 $
 5,334,328

 $
 4,500,289

 Liquidity
and Capital Resources

 Liquidity
describes the ability of a company to generate sufficient cash flows to meet the cash requirements of its business operations, including
working capital needs, debt service, acquisitions, contractual obligations and other commitments. We assess liquidity in terms of our
cash flows from operations and their sufficiency to fund our operating and investing activities. As of December 31, 2023, our principal source
of liquidity was cash totaling $2.2 million.

 We
believe that our cash on hand following the Closing will be sufficient to meet our working capital and capital expenditure
requirements for a period of at least twelve months from the date of this Form 10-K. We
may, however, need additional cash if there are material changes to our business conditions or other developments, including
unanticipated delays in production, supply chain challenges, disruptions due to a pandemic, competitive pressures and regulatory
developments. To the extent that our resources are insufficient to satisfy our cash requirements, we may need to seek additional
equity or debt financing. If the financing is not available, or if the terms of financing are less desirable than we expect, we may
be forced to take actions to reduce our capital or operating expenditures, including by not seeking potential acquisition
opportunities, or eliminating redundancies, which may adversely affect our business, operating results, financial condition and
prospects. For more information about risks related to our business, please see the sections entitled " Risk Factors —
Risks Related to Syntec Optics' Existing Operations ".

 In
addition to the foregoing, based on our current assessment, we do not expect any material adverse effect on our long-term liquidity due
to the COVID-19 pandemic. However, we will continue to assess the effect of the pandemic to our operations. The pandemic has in recent
periods moderated in the United States following the availability of vaccines (although vaccination rates often vary by geography, age
and other factors) and increased immunity (including natural immunity from infection). However, the extent to which the COVID-19 pandemic
will affect our business and operations will depend on future developments that are highly uncertain and cannot be predicted with confidence.
These uncertainties include the ultimate geographic spread of the disease (including emergence of new variants against which existing
vaccinations or treatments may be ineffective), the duration of the pandemic and the perceived effectiveness of actions taken in the
United States and other countries to contain and treat the disease. While the potential economic impact of COVID-19 may be difficult
to assess or predict, a widespread pandemic alone or in combination with other events, such as the Russia/Ukraine conflict, could result
in significant disruption of global financial markets and supply chains, reducing our ability to access capital in the future or access
required raw materials and components, which could result in price increases. In addition, a recession or long-term market correction
resulting from the spread of COVID-19 or other events could materially affect our business and the value of our common stock.

 Cash
Flow — Year ended December 31, 2023 and 2022

 Years Ended

 December 31,

 2023

 2022

 Net Cash Provided by Operating Activities

 $
 2,792,222

 $
 1,928,715

 Net Cash Used in Investing Activities

 (1,921,182
)

 (685,428
)

 Net Cash Provided by (Used in) Financing Activities

 761,023

 (3,020,546
)

 Operating
Activities

 Net
cash provided by operating activities was $2.8 million for the year ended December 31, 2023, as compared to net cash provided by operating
activities of $1.9 million for the year ended December 31, 2022. The increase in net cash provided by operating activities was primarily due to an increase in net income of $2.4
million, offset by a decrease in change of assets and liabilities of $0.6 million and a decrease in deferred revenues of $1.0 million.

 Investing
Activities

 Net
cash used in investing activities was $1.9 million for the year ended December 31, 2023, as compared to $0.7 million for the year ended
December 31, 2022. The increase in net cash used in investing activities was primarily due to an increase in capital expenditures.

 Financing
Activities

 Net
cash provided by financing activities was $0.8 million for the year ended December 31, 2023, and was primarily due $1.8 million in funds received from the Omnilit trust, offset by $1.1 million
in payments on debt obligations. Net cash provided by financing activities was $3.0 million for the year ended December 31, 2022, and was primarily due
to payment of line-of-credit and term loans.

 Contractual
Obligations

 Our
estimated future obligations do not consist of either short-term or long-term operating lease liabilities. As of December 31, 2023, we
had no short-term operating lease liabilities and no long-term operating lease liabilities.

 Quantitative
and Qualitative Disclosures about Market Risk

 We
have not experienced any significant losses in such accounts, nor does management believe it is exposed to any significant credit risk.
The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected term of the stock options. We
use an assumed dividend yield of zero as we have never paid dividends and have no current plans to pay any dividends on our common stock.
We account for forfeitures as they occur.

 Critical
Accounting Estimates

 We
prepare our consolidated financial statements in accordance with U.S. GAAP. The preparation of these consolidated financial statements
requires us to make estimates, assumptions and judgments that can significantly impact the amounts we report as assets, liabilities,
revenue, costs and expenses and the related disclosures. We base our estimates on historical experience and other assumptions that we
believe are reasonable under the circumstances. Our actual results could differ significantly from these estimates under different assumptions
and conditions. We believe that the accounting policies discussed below are critical to understanding our historical and future performance
as these policies involve a greater degree of judgment and complexity.

 Revenue
Recognition

 Under
Topic 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the
consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements
that an entity determines are within the scope of Topic 606, the entity performs the following five steps: (i) identify the contract(s)
with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the
transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance
obligation. We only apply the five-step model to contracts when it is probable the entity will collect the consideration it is entitled
to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within
the scope of Topic 606, we assess the goods or services promised within each contract and determines those that are performance obligations
and assesses whether each promised good or service is distinct. We then recognize as revenue the amount of the transaction price that
is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. We exclude from the transaction
price all taxes that are assessed by a governmental authority and imposed on and concurrent with our revenue transactions, and therefore
present these taxes (such as sales tax) on a net basis in operating revenues on the Statement of Income.

 Revenue
is recognized when control of the promised goods is transferred to the customer or distributor, in an amount that reflects the consideration
we expect to be entitled to in exchange for those goods and services. Revenue associated with products holding rights of return are recognized
when we conclude there is no risk of significant revenue reversal in the future periods for the expected consideration in the transaction.
There are no material instances including discounts and refunds where variable consideration is constrained and not recorded at the initial
time of sale. Generally, our revenue is recognized at a point in time for standard promised goods at the time of shipment when title
and risk of loss pass to the customer.

 We
may receive payments at the onset of the contract and before delivery of goods for tooling. In such instances, we record a customer deposit
liability. Payment terms for customers are typically 50% up front and 50% on delivery of first article. We recognize these contract liabilities
as sales after the revenue criteria are met.

 Inventories,
which consist of raw materials, work in process and finished goods, are stated at the lower of cost (weighted average) or net realizable
value, net of reserves for obsolete inventory. We continually analyze our slow moving and excess inventories. Based on historical and
projected sales volumes and anticipated selling prices, we established reserves. Inventory that is in excess of current and projected
use is reduced by an allowance to a level that approximates its estimate of future demand. Products that are determined to be obsolete
are written down to net realizable value. As of December 31, 2023, our reserve was approximately $0.3 million compared to $0.2 million
as of December 31, 2022.

and Equipment

and equipment are stated at cost and is depreciated over the estimated useful lives of the respective assets. The cost of normal maintenance
and repairs is charged to expense as incurred, whereas expenditures, which materially extend useful lives, are capitalized. When depreciable
property is retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts and any gain
or loss is reflected in other income. Depreciation expense for the years ended December 31, 2023 and 2022 was $2.8 million and $3.1
million, respectively. The various classes of property and equipment and estimated useful lives are as follows:

 Years

 Machinery and Equipment

 Building and Leasehold Improvements

 14 - 15 and/or Lesser of Useful Life or Lease Term

 Office Furniture and Equipment

 3 - 5

 Tooling

 3 - 10

 Vehicles

 Recent
Accounting Pronouncements

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

 JOBS
Act Accounting Election

 As
an emerging growth company under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, Syntec Optics can take advantage of
an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay
the adoption of certain accounting standards until those standards would otherwise apply to private companies. Syntec Optics has elected
to avail itself of this exemption from new or revised accounting standards and, therefore, will not be subject to the same new or revised
accounting standards as other public companies that are not emerging growth companies. Syntec Optics intends to rely on other exemptions
provided by the JOBS Act, including without limitation, not being required to comply with the auditor attestation requirements of Section
404(b) of Sarbanes-Oxley. As a result, Syntec Optics' financial statements may not be comparable to companies that comply with
new or revised accounting pronouncements as of public company effective dates.

 Syntec Optics will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary
of the consummation of OmniLit's initial public offering, (ii) the last day of the fiscal year in which Syntec Optics has total
annual gross revenue of at least $1.235 billion, (iii) the last day of the fiscal year in which Syntec Optics is deemed to be a "large
accelerated filer" as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of Syntec Optics'
common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year, or
(iv) the date on which Syntec Optics has issued more than $1.0 billion in non- convertible debt securities during the prior three-year
period.

 Item
7A. Quantitative and Qualitative Disclosures about Market Risk

 We
are exposed to market risks from changes in interest rates, which could affect our operating results, financial position and cash flows.
We manage our exposure to these market risks through our regular operating and financing activities.

 Interest
Rates

 Our
exposure to market risk associated with changes in interest rates relates primarily to our borrowings under our Senior Credit Facilities.
We had approximately $6.5 million of outstanding variable rate debt as of December
31, 2023. A 100 basis point increase in interest rates at December 31, 2023 would increase our annual pre-tax interest expense by approximately
$0.065 million.

 Item
8. Financial Statements and Supplementary Data

 Our
consolidated audited financial statements as of and for the years ended December 31, 2023 and December 31, 2022, together with the
report of the independent registered public accounting firm thereon and the notes thereto, are presented beginning at page
F-2.

 Item
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 None.

 Item
9A. Controls and Procedures

 Evaluation
of Disclosure Controls and Procedures

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

 Disclosure
controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our
reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified
in the SEC's rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information
required to be disclosed in our company's reports filed under the Exchange Act is accumulated and communicated to management, including
our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. In designing and evaluating
the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated,
cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute
assurance that all control issues and instances of fraud, if any, within a company have been detected. Based on the evaluation of our
disclosure controls and procedures as of December 31, 2023, our Chief Executive Officer and our Chief Financial Officer concluded that,
as of such date, our disclosure controls and procedures were not effective due to the following identified material weaknesses:

 1.
 We
 lack documentation of formal internal control process and controls including lack of review
 of journal entries.

 2.
 We
 lack necessary corporate accounting resources to maintain adequate segregation of duties.

 3.
 We
 lack timely reconciliation controls in the areas of accounts payable, accrued legal expenses,
 and inventory.

 4.
 We
 lack controls related to proper cut-off of costs of goods sold and other income from business
 interruption claim.

 5.
 We
 lack control related to identification and disclosure of related party transactions.

 6.
 We
 lack control related to proper fair value methodology utilized for valuation of complex financial
 instrument in connection with contingent earnout arrangement.

 7.
 We
 lack the necessary information technology ("IT") general controls infrastructure
 in the areas of user access and program change-management due to insufficient documentation
 and training, and inadequate IT risk assessment process. Additionally, we lack controls around
 the review of SOC-1 reports and lack of cyber security related controls.

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

 Management's
Report on Internal Control over Financial Reporting

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

 Changes
in Internal Control over Financial Reporting

 Other than the material weaknesses and remediation efforts mentioned above,
there
were no changes in our internal controls over financial reporting that occurred during the quarter ended December 31, 2023 that
materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 Item
9B. Other Information

 Not
applicable.

 Item
9C. Disclosure Regarding Foreign Jurisdiction that Prevent Inspections

 Not
applicable.

 Part
III

 Item
10. Directors, Executive Officers and Corporate Governance

 The
information called for by this item will be set forth in our Proxy Statement for the 2024 Annual Meeting of Stockholders, or Proxy Statement,
to be filed with the SEC within 120 days of the fiscal year ended December 31, 2023, and is incorporated herein by reference.

 Item
11. Executive Compensation

 The
information called for by this item will be set forth in our Proxy Statement and is incorporated herein by reference.

 Item
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 The
information called for by this item will be set forth in our Proxy Statement and is incorporated herein by reference.

 Item
13. Certain Relationships and Related Transactions, and Director Independence

 The
information called for by this item will be set forth in our Proxy Statement and is incorporated herein by reference.

 Item
14. Principal Accountant Fees and Services

 The
information called for by this item will be set forth in our Proxy Statement and is incorporated herein by reference.

 Part
IV

 Item
15. Exhibit and Financial Statement Schedules

 (a)

 The
 following documents are filed as part of this report:

 1.

 Financial
 Statements

 The
list of consolidated financial statements set forth in the accompanying Index to the Consolidated Financial Statements at page F-1 of
this Annual Report on Form 10-K is incorporated herein by reference. Such consolidated financial statements are filed as part of this
Annual Report on Form 10-K.

 2.

 Financial
 Statement Schedules

 All
schedules have been omitted because the required information is either not required, not applicable or because the information required
is included in the consolidated financial statements or notes thereto.

 3.

 Exhibits

 Exhibit No.

 Description

 2.1#

 Agreement and Plan of Merger, dated as of May 9, by and among OmniLit Acquisition Corp., OmniLit Merger Sub, Inc. and Syntec Optics Group, Inc. (included as Annex A to the proxy statement/prospectus).

 3.5

 Form of Second Amended and Restated Certificate of Incorporation (to be effective upon consummation of the Merger) (included as Annex B to the proxy statement/prospectus).

 3.6

 Form of Amended and Restated Bylaws (to be effective upon consummation of the Merger) (included as Annex C to the proxy statement/prospectus).

 4.4

 Warrant Agreement, dated as of November 8, 2021, between OmniLit Acquisition Corp. and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.4 of OmniLit Acquisition Corp.'s Amendment No. 1 to Form S-1 filed with the SEC on November 1, 2021).

 4.6

 Form of Amended and Restated Registration Rights Agreement (to be effective upon consummation of the Merger) (included as Annex D to the proxy statement/prospectus).

 10.4

 Sponsor Support Agreement, dated as of May 9, 2023, by and among OmniLit Sponsor, LLC, Syntec Optics and OmniLit Sponsor, LLC (included as Annex E to the proxy statement/prospectus).

 10.5

 OmniLit Combination 2023 Equity Incentive Plan (included as Annex F to the proxy statement/prospectus).

 10.6

 New Syntec Optics' Employee Stock Purchase Plan (included as Annex G to the proxy statement/prospectus).

 10.7

 Form of Indemnity Agreement. (incorporated by reference to Exhibit 10.7 of OmniLit Acquisition Corp.'s Amendment No. 1 to Form S-1 filed with the SEC on November 1, 2021).

 10.8

 Form of Earnout RSU Award Agreement

 10.12

 Credit Agreement

 21.1

 List of Subsidiaries.

 24*

 Power of Attorney (included on signature page to the Annual Report on Form 10-K).

 31.1*

 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 31.2*

 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 32*

 Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 97.1

 Policy for Recovery of Erroneously Awarded Compensation

 101.INS

 101.SCH

 101.CAL

 101.DEF

 101.LAB

 101.PRE

 104*

 Cover

 *

 Filed
 herewith.

 #

 Portions
 of schedules and exhibits to the agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted
 schedule and/or exhibit will be furnished to the Securities and Exchange Commission upon request.

 Item
16. Form 10-K Summary

 None.

 SIGNATURES

 Pursuant
to the requirements of the Securities Act of 1933, the registrant has duly caused this Annual Report to be signed on its behalf by the
undersigned, thereunto duly authorized, in Rochester, New York, on the 23 rd day of May, 2024.

 By:

 /s/
 Al Kapoor

 Chairman and Chief Executive Officer

 (Principal
 Executive Officer)

 By:

 /s/
 Robert O. Nelson II

 Chief
 Financial Officer

 (Principal
 Financial and Accounting Officer)

 Pursuant
to the requirements of the Securities Act of 1933, this Annual Report has been signed by the following persons in the capacities and
on the dates indicated:

 Signature

 Title

 Date

 /s/
 Al Kapoor

 Chairman and Chief Executive Officer

 Al
 Kapoor

 (Principal Executive Officer)

 /s/
 Robert O. Nelson II

 Chief
 Financial Officer

 Robert
 O. Nelson II

 (Principal
 Financial and Accounting Officer)

 /s/
 Walter A. Bishop

 Director

 Walter
 A. Bishop

 /s/
 Albert A. Manzone

 Director

 Albert
 A. Manzone

 /s/
 Brent D. Rosenthal

 Director

 Brent
 D. Rosenthal

 Item
8. Financial Statements and Supplemental Data

 Report
 of Independent Registered Public Accounting Firm (PCAOB ID# 688)

 Report of Independent Registered Public Accounting Firm (PCAOB ID# 243)

 Consolidated
 Balance Sheets as of December 31, 2023 and 2022

 Consolidated
 Statements of Operations for the years ended December 31, 2023 and 2022

 Consolidated
 Statements of Changes in Stockholders' Equity for the years ended December 31, 2023 and 2022

 Consolidated
 Statements of Cash Flows for the years ended December 31, 2023 and 2022

 Notes
 to Consolidated Financial Statements

 F- 1

 Report
of Independent Registered Public Accounting Firm

 Shareholders
and Board of Directors

Optics Holdings, Inc.

 Rochester,
New York

 Opinion
on the Financial Statements

 We
have audited the accompanying consolidated balance sheet of Syntec Optics Holdings, Inc. and subsidiaries (the
"Company") as of December 31, 2023, the related consolidated statements of operations, changes in stockholders'
equity and cash flows for the period then ended, and the related notes (collectively referred to as the "financial
statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the
Company as of December 31, 2023, and the results of its operations and its cash flows for the year in the period then ended, in
conformity with accounting principles generally accepted in the United States of America.

 Basis
for Opinion

 These
financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's
financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We
conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were
we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an
understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our
audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or
fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides
a reasonable basis for our opinion.

 /s/
 Marcum LLP

 Marcum LLP

 We have served as the Company's auditor since 2023.

 Houston,
Texas

 F- 2

 Report
of Independent Registered Public Accounting Firm

 To
the Shareholder of Syntec Optics, Inc.

 Opinion
on the Financial Statements

 We
have audited, before the effects of the reverse recapitalization described in Note 3, the accompanying consolidated balance sheet of
Syntec Optics Holdings, Inc. and its subsidiaries (previously Syntec Optics, Inc.) (the Company) as of December 31, 2022, the related
consolidated statements of operations, changes in stockholder's equity and cash flows for the year then ended, and the related
notes to the consolidated financial statements (collectively, the financial statements) (the financial statements before the effects
of reverse capitalization as described in Note 3 are not presented herein). In our opinion, the consolidated financial statements present
fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and
its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

 We
were not engaged to audit, review or apply any procedures to the adjustments to retroactively apply the effects of the reverse recapitalization
described in Note 3, accordingly, we do not express an opinion or any other form of assurance about whether such adjustments are appropriate
and have been properly applied. Those adjustments were audited by another independent registered public accounting firm.

 Restatement

 As
discussed in Note 8 (not presented herein) to the financial statements, the originally released financial statements disclosed that there
were no violations of the debt covenants. This disclosure has been revised to state that there was a violation as of December 31, 2022
that was subsequently waived by the lender. As discussed in Note 2 (not presented herein) to the financial statements, the originally
released financial statements have been revised to add disclosure of revenue disaggregated by the end market of the customer. As discussed
in Note 6 (not presented herein) to the financial statements, the originally released financial statements have been revised to present
the loan receivable from the sole shareholder as of December 31, 2021 as a reduction to stockholder's equity rather than an asset
on the balance sheet.

 Basis
for Opinion

 These
financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's
financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We
conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were
we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an
understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our
audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or
fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provide
a reasonable basis for our opinion.

 We
have served as the Company's auditor from 2022 to 2023.

 Freed Maxick CPAs, P.C.

 Rochester,
New York

 May
10, 2023, except for Note 8 (not presented herein) to the financial statements, as to which the date is July 12, 2023, Note 2 (not presented
herein) to the financial statements, as to which the date is September 6, 2023 and Note 6 (not presented herein), as to which the date
is September 27,2023, all appearing as an exhibit in OmniLit Acquisition Corp's Form S-4/A dated September 27, 2023.

 F- 3

 CONSOLIDATED
BALANCE SHEETS

 2023

 2022

 ASSETS

 Current Assets

 Cash

 $
 2,158,245

 526,182

 Accounts Receivable, Net

 6,800,064

 5,925,724

 5,834,109

 3,626,360

 Prepaid Expenses and Other Assets

 359,443

 689,385

 Total Current Assets

 15,151,861

 10,767,651

 Property and Equipment, Net

 11,101,052

 11,624,819

 Operating Lease Right of Use Assets, Net

 -

 63,227

 Intangible Assets, Net

 295,000

 -

 Total Assets

 $
 26,547,913

 $
 22,455,697

 LIABILITIES AND STOCKHOLDER'S EQUITY

 Current Liabilities

 Accounts Payable

 $
 3,042,315

 $
 412,058

 Accrued Expenses

 1,071,257

 539,966

 Federal Income Tax Payable

 370,206

 108,738

 Deferred Revenue

 -

 348,095

 Line of Credit

 6,537,592

 6,400,000

 Current Maturities of Debt Obligations

 362,972

 1,624,851

 Current Maturities of Operating Lease Liabilities

 -

 13,374

 Total Current Liabilities

 11,384,342

 9,447,082

 Long-Term Liabilities

 Long-Term Debt Obligations

 2,024,939

 1,913,538

 Long-Term Operating Lease Liabilities

 -

 49,853

 Due to Related Parties

 -

 11,767

 Deferred Grant Revenue

 -

 300,000

 Deferred Income Taxes

 74,890

 1,274,104

 Total Long-Term Liabilities

 2,099,829

 3,549,262

 Total Liabilities

 13,484,171

 12,996,344

 Commitments and Contingencies (Note 22)

 -

 -

 Stockholder's Equity

 CL A Common Stock, Par value $.0001 per share; 121,000,000 authorized; 36,688,266 issued and outstanding as of December 31, 2023 31,600,000 issued and outstanding as of December 31, 2022

 3,669

 3,160

 Additional Paid-In Capital

 1,927,204

 237,692

 Retained Earnings

 11,132,869

 9,218,501

 Total Stockholder's Equity

 13,063,742

 9,459,353

 Total Liabilities and Stockholder's Equity

 $
 26,547,913

 $
 22,455,697

 See Notes to Consolidated
Financial Statements.

 F- 4

 CONSOLIDATED
STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

 2023

 2022

 Net Sales

 $
 29,441,180

 $
 27,839,312

 Cost of Goods Sold

 21,520,189

 21,713,220

 Gross Profit

 7,920,991

 6,126,092

 General and Administrative Expenses

 6,379,879

 6,654,326

 Income (Loss) from Operations

 1,541,112

 ( 528,234
)

 Other Income (Expense)

 Interest Expense, Including Amortization of Debt Issuance Costs

 ( 654,765
)

 ( 335,974
)

 Other Income

 370,914

 274,810

 Total Other Expense, Net

 ( 283,851
)

 ( 61,164
)

 Income (Loss) Before Provision for (Benefit) Income Taxes

 1,257,261

 ( 589,398
)

 Benefit From Income Taxes

 ( 719,172
)

 ( 154,829
)

 Net Income (Loss)

 $

 $
)

 Net Income (Loss) per Common Share

 Basic and diluted

 $
 0.06

 $
 ( 0.01
)

 Weighted Average Number of Common Shares Outstanding

 Basic and diluted

 32,366,725

 See
Notes to Consolidated Financial Statements.

 F- 5

 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY

 FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

 Shares

 Amount

 Capital

 Earnings

 Stockholder

 Receivable

 Total

 Additional

 Stock

 Common Stock

 Paid-In

 Retained

 Loan to

 Subscription

 Shares

 Amount

 Capital

 Earnings

 Stockholder

 Receivable

 Total

 Balances, January 1, 2022

 3,499

 $

 $
 240,848

 $
 15,615,868

 $
 ( 5,505,957
)

 $
 ( 176,071
)

 $
 10,174,692

 Retroactive application of recapitalization

 31,596,501

 $
 3,156

 $
 ( 3,156
)

 -

 -

 -

 -

 Distributions

 -

 -

 -

 ( 5,962,798
)

 5,505,957

 176,071

 ( 280,770
)

 Net Loss

 -

 -

 -

)

 -

 -

)

 Balances, December 31, 2022

 $
 3,160

 $
 237,692

 $
 9,218,501

 $
 -

 $
 -

 $
 9,459,353

 Balances

 $
 3,160

 $
 237,692

 $
 9,218,501

 $
 -

 $
 -

 $
 9,459,353

 Distributions

 -

 $
 -

 $
 -

 $
 ( 62,065
)

 $
 -

 $
 -

 $
 ( 62,065
)

 Reverse capitalization, net of transaction costs (See Note 3)

 5,088,266

 $

 $
 1,689,512

 -

 -

 -

 $
 1,690,021

 Net Income

 -

 -

 -

 -

 -

 Net Income (loss)

 -

 -

 -

 -

 -

 Balances, December 31, 2023

 36,688,266

 $
 3,669

 $
 1,927,204

 $
 11,132,869

 $
 -

 $
 -

 $
 13,063,742

 Balances

 36,688,266

 $
 3,669

 $
 1,927,204

 $
 11,132,869

 $
 -

 $
 -

 $
 13,063,742

 See Notes to Consolidated Financial Statements.

 F- 6

 CONSOLIDATED
STATEMENTS OF CASH FLOWS

 FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

 2023

 2022

 Cash Flows From Operating Activities

 Net Income (Loss)

 $

 $
)

 Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by Operating Activities:

 Depreciation and Amortization

 2,769,284

 3,140,601

 Amortization of Debt Issuance Costs

 12,451

 10,847

 Grant Revenue Income

 ( 300,000
)

 -

 Change in Allowance for Expected Credit Losses

 ( 25,820
)

 -

 Change in Reserve for Obsolescence

 124,911

 ( 331,881
)

 Deferred Income Taxes

 ( 1,199,214
)

 ( 507,913
)

 (Increase) Decrease in:

 Accounts Receivable

 ( 848,520
)

 ( 756,520
)

 ( 2,332,660
)

 1,267,263

 Federal Income Tax Receivable

 -

 100,000

 Prepaid Expenses and Other Assets

 340,298

 ( 104,407
)

 Increase (Decrease) in:

 Accounts Payables and Accrued Expenses

 2,493,826

 ( 597,709
)

 Federal Income Tax Payable

 129,328

 108,738

 Deferred Revenue

 ( 348,095
)

 34,265

 Net Cash Provided By Operating Activities

 2,792,222

 1,928,715

 Cash Flows From Investing Activities

 Borrowings (Repayments) from Related Parties, Net

 -

 40,837

 Purchases of Property and Equipment

 ( 1,921,182
)

 ( 1,241,637
)

 Proceeds from Disposal of Property and Equipment

 -

 515,372

 Net Cash Used in Investing Activities

 ( 1,921,182
)

 ( 685,428
)

 Cash Flows From Financing Activities

 Borrowings (Repayments) on Line of Credit, Net

 137,592

 ( 1,600,000
)

 Borrowing on Debt Obligations

 1,745,573

 -

 Repayments on Debt Obligations

 ( 2,908,502
)

 ( 917,400
)

 Repayments on Finance Lease Obligations

 -

 ( 222,376
)

 Cash proceeds from OLIT

 45,946

 -

 Net proceeds from OLIT Trust

 1,802,479

 -

 Distributions

 ( 62,065
)

 ( 280,770
)

 Net Cash Provided By (Used in) Financing Activities

 761,023

 ( 3,020,546
)

 Net Increase (Decrease) in Cash

 1,632,063

 ( 1,777,259
)

 Cash - Beginning

 526,182

 2,303,441

 Cash - Ending

 $
 2,158,245

 $
 526,182

 Supplemental Cash Flow Disclosures:

 Cash Paid for Interest

 $
 652,778

 $
 319,056

 Cash Paid for Taxes

 $
 283,561

 $
 159,968

 Supplemental Disclosures of Non-Cash Investing Activities:

 Asset Acquired and Included in Accounts Payable and Accrued Expenses

 $
 642,547

 $
 23,213

 Loan to Stockholder Settled

 $
 -

 $
 5,505,957

 Stock Subscription Receivable Settled

 -

 176,071

 Non-Cash Distributions

 $
 -

 $
 5,682,028

 See Notes to Consolidated Financial Statements.

 F- 7

 NOTES

 Note
1 Nature of Business and Significant Accounting Policies

 Nature
of Business

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

 Basis
of Presentation

 The
accompanying consolidated financial statements 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 U.S. Securities and Exchange Commission
(SEC).

 Principles
of Consolidation

 The
accompanying consolidated financial statements include the accounts of Syntec Optics Holdings, Inc. and its wholly owned subsidiary, Syntec Optics.

 The
consolidated financial statements also include the accounts of ELR Associates, LLC (ELR), a variable interest entity wherein the Company
is the primary beneficiary. Syntec Optic's variable interest in ELR is the result of providing a guaranty of payment for ELR's
mortgage on the manufacturing facility used exclusively by Syntec Optics.

 The
consolidated financial statements include the financial position and result of operations of ELR, consisting principally of cash and
cash equivalents, other assets and property and equipment of approximately $ 2,081,000 and $ 2,149,000 (net of accumulated depreciation)
and liabilities, consisting of long-term debt of approximately $ 694,000 and $ 1,948,000 as of December 31,
2023 and 2022, respectively and net income of approximately $ 383,000 and $ 155,000 for the years ended December 31, 2023 and 2022.

 All
significant intercompany accounts and transactions have been eliminated in consolidation.

 Use
of Estimates

 The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenue and expenses during
the reporting period. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may differ
from those estimates.

 F- 8

 NOTES

 Note
1 Nature of Business and Significant Accounting Policies - Continued

 Cash

 The
Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

 Concentrations
of Credit Risk

 The
Company's financial instruments that are exposed to concentrations of credit risk consist primarily of cash and accounts receivable.
The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced
any losses in such accounts and believes that they are not exposed to any significant credit risk on cash. The Company also routinely
assesses the financial strength of their customers and, consequently, believes that its accounts receivable credit risk exposure is limited.
On December 31, 2023 and 2022 there were amounts due from three customers that totaled approximately 67 % and 66 % respectively, of accounts
receivable. The outstanding accounts receivable due from these customers at December 31, 2023 and 2022 were approximately $ 4,506,000
and $ 3,895,000, respectively.

 Accounts
Receivable

 The
Company grants credit to substantially all customers and carries its accounts receivable at original invoice, net of an allowance for
expected credit losses. On a periodic basis, management evaluates accounts receivable and adjusts the allowance for expected credit losses.
The allowance at December 31, 2023 and 2022 amounted to approximately $ 239,000 and $ 213,000, respectively. Customer balances are written
off when amounts are deemed uncollectible, or credits are issued. The Company generally does not accrue interest on past due balances.

consists of raw materials, work-in-process, finished goods and allocated manufacturing labor and overhead. Inventory is stated at the
lower of cost using the first-in, first-out basis or net realizable value. The Company provides inventory reserves for excess, obsolete,
or slow-moving inventory, based on changes in customer demand, technology developments or other economic factors.

and Equipment Net of Accumulated Deprecation

and equipment is stated at cost and is depreciated over the estimated useful lives of the respective assets. The cost of normal maintenance
and repairs is charged to expense as incurred, whereas expenditures, which materially extend useful lives, are capitalized. When depreciable
property is retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts and any gain
or loss is reflected in other income.

 Depreciation is provided for on the straight-line method over the following estimated useful lives:

 Schedule of Property and Equipment

 Years

 Machinery
 and Equipment

 Building
 and Leasehold Improvements

 14 - 15 and/or Lesser of

 Useful Life or Lease Term

 Office
 Furniture and Equipment

 - 5

 Tooling

 - 10

 Vehicles

 Long-Lived
Assets

 Long-lived
assets, including property and equipment, are stated at cost. The Company reviews its long-lived assets, including right of
use assets, for possible impairment when events or changes in circumstances indicate that their carrying amounts may not be recoverable.
If such events or changes in circumstances are present, the carrying value of the asset is compared to the undiscounted future cash flows
expected to result from the use of the asset and its eventual disposition. If the carrying amount exceeds the undiscounted cash flows,
an impairment loss is measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset. During the
years ended December 31, 2023 and 2022, no impairment charges were recorded.

 F- 9

 NOTES

 Note
1 Nature of Business and Significant Accounting Policies - Continued

 Intangible
Assets

 Intangible
assets are generally stated at cost and if determined to have either an indefinite life or a finite life. If determined to have a finite
life, they are amortized over the estimated useful lives of the respective assets. The Company reviews its intangible assets for possible impairment when events or changes in circumstances indicate
that their carrying amounts may not be recoverable. If such events or changes in circumstances are present, the carrying value of the
asset is compared to the undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. If
the carrying amount exceeds the undiscounted cash flows, an impairment loss is measured as the amount by which the carrying amount of
the asset exceeds the fair value of the asset During the year ended December 31, 2023,
 no impairment charges were recorded.

 Leases

 The
Company determines if an arrangement is or contains a lease at inception. The Company records right-of-use (ROU) assets and lease obligations
for its finance and operating leases, which are initially based on the discounted future minimum lease payments over the term of the
lease.

 The
lease term is defined as the non-cancelable period of the lease plus any options to extend the lease when it is reasonably certain that
it will be exercised. Leases may also include options to terminate the arrangement or options to purchase the underlying asset. For leases
with an initial term of 12 months or less, no ROU assets or lease obligations are recorded on the balance sheet and the Company recognizes
short-term lease expense for these leases on a straight-line basis over the lease term.

 The
Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. None of the
Company's lease agreements include variable rental payments. The Company has elected to separate lease from non-lease components
for all leases.

 Operating
lease expense is recognized on a straight-line basis over the lease term and is included in general and administrative expense. Amortization
expense for finance leases is recognized on a straight-line basis over the lease term and is included in cost of goods sold or general
and administrative expense. Interest expense for finance leases is recognized using the effective interest method. Short-term rentals
and payments associated with non-lease components are expensed as incurred.

 Debt
Issuance Costs

 The
Company defers certain costs incurred in connection with obtaining financing. Costs related to line of credit agreements are recorded
as an asset and are amortized to interest expense over the term of the agreement. Costs related to long-term debt financing are presented
as a direct deduction from the carrying amount of the related debt and amortized over the term of the related debt as additional interest.

 Shipping
and Handling Fees and Costs

 Shipping
and handling fees billed to the customer are recorded in net sales and the related costs incurred for shipping and handling are included
in costs of goods sold.

 Advertising

 Advertising
costs are charged to operations when incurred. Advertising expense for the years ended December 31, 2023 and 2022 were approximately
$ 188,000 and $ 278,000, respectively.

 F- 10

 NOTES

 Note
1 Nature of Business and Significant Accounting Policies - Continued

 Income
Taxes

 The
Company accounts for income taxes with the recognition of estimated income taxes payable or refundable on income tax returns for the
current year and for the estimated future tax effect attributable to temporary differences and carry forwards. Measurement of deferred
income items is based on enacted tax laws, including tax rates, with the measurement of deferred income tax assets being reduced by available
tax benefits not expected to be realized in the immediate future. A valuation allowance is established when it is necessary to reduce
deferred income tax assets to amounts for which realization is likely. In assessing the need for a valuation allowance, management estimates
future taxable income, considering the feasibility of ongoing tax planning strategies and the realizability of tax loss carryforwards
following tax law ordering rules.

 The
Company reviews tax positions taken to determine if it is more likely than not that the position would be sustained upon examination
resulting in an uncertain tax position. The Company did not have any material unrecognized tax benefit as of December 31, 2023 or 2022.
The Company recognizes interest accrued and penalties related to unrecognized tax benefits in tax expense. During the years ended December
31, 2023 and 2022, the Company recognized no interest and penalties. The Company files U.S. federal tax returns and tax returns in various
states.

 Income (Loss)
Per Share

 Basic
income (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during
the period. Diluted income (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased to
include the number of additional common shares that would have been outstanding if the potential common shares had been issued and
if the additional common shares were dilutive. In periods where losses are reported, the weighted-average number of common shares
outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive. The Company did not have any dilutive
shares for the years ended December 31, 2023 and 2022.

 Fair
Value of Financial Instruments

 The
Company follows the fair value measurement guidance required by accounting principles generally accepted in the United States of America
for financial and nonfinancial assets and liabilities. This guidance defines fair value and establishes a framework for measuring fair
value and related disclosure requirements. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques
used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets
or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

 The
carrying amounts of financial instruments, including cash, accounts receivable, accounts payable, accrued expenses and borrowings approximate
fair value, based on their terms or due to the short maturity of these instruments.

 F- 11

 NOTES

 Note
1 Nature of Business and Significant Accounting Policies - Continued

 Recently
Adopted Accounting Pronouncements

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

 Recent Accounting Pronouncements

 In
December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated
information about a reporting entity's effective tax rate reconciliation, as well as information related to income taxes paid to
enhance the transparency and decision usefulness of income tax disclosures. This ASU will be effective for the annual period ending December
31, 2025. The Company is currently evaluating the timing and impacts of adoption of this ASU.

 JOBS
Act Accounting Election

 As
an emerging growth company under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, Syntec Optics can take advantage of
an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay
the adoption of certain accounting standards until those standards would otherwise apply to private companies. Syntec Optics has elected
to avail itself of this exemption from new or revised accounting standards and, therefore, will not be subject to the same new or revised
accounting standards as other public companies that are not emerging growth companies. Syntec Optics intends to rely on other exemptions
provided by the JOBS Act, including without limitation, not being required to comply with the auditor attestation requirements of Section
404(b) of Sarbanes-Oxley. As a result, Syntec Optics' financial statements may not be comparable to companies that comply with
new or revised accounting pronouncements as of public company effective dates.

Optics will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary
of the consummation of OmniLit's initial public offering, (ii) the last day of the fiscal year in which Syntec Optics has total
annual gross revenue of at least $1.235 billion, (iii) the last day of the fiscal year in which Syntec Optics is deemed to be a "large
accelerated filer" as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of Syntec Optics'
common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year, or
(iv) the date on which Syntec Optics has issued more than $1.0 billion in non- convertible debt securities during the prior three-year
period.

 Note
2 Revenue Recognition

 The
Company recognizes revenue in accordance with Accounting Standard Codification 606, Revenue from Contracts with Customers (ASC 606),
which provides a five-step model for recognizing revenue from contracts with customers as follows:

 Identify
 the contract with a customer

 Identify
 the performance obligations in the contract

 Determine
 the transaction price

 Allocate
 the transaction price to the performance obligations in the contract

 Recognize
 revenue when or as performance obligations are satisfied

 The
Company's revenue is primarily derived from three categories of products and services, (i) the production and assembly of molded
plastic optics parts including polymer and glass parts, opto-mechanicals, thin film coating, diamond turned optics and optical systems
including electro-optics assembly, ("Products") (ii) the manufacture of custom tooling used to manufacture molded products,
and ("Custom Tooling") (iii) non-recurring engineering services ("Non-Recurring Engineering'). The Company's
products are marketed and sold primarily to end-user commercial customers throughout the United States and Europe. Sales of products
and services are subject to economic conditions and may fluctuate based on changes in the industry, trade policies and financial markets.

 The
Company assesses the contract term as the period in which the parties to the contract have presently enforceable rights and obligations.
Certain customer contracts may provide for either party to terminate the contract upon written notice.

 Nature
of Products and Services

 Revenue
from the sale of molded plastic, polymer and glass parts, opto-mechanicals, thin film coating, diamond turned optic and optical systems
is recognized upon transfer of control to the customer, which is typically upon shipment. These sales do not meet the criteria for revenue
to be recognized over time. The Company has elected to treat shipping and handling activities related to contracts with customers as
costs to fulfill the promise to transfer the associated equipment and parts and not as a separate performance obligation.

 In
general, the Company recognizes revenue from tooling contracts upon delivery and acceptance by the customer, which signifies successful
completion of the contract.

 Revenue
from non-recurring engineering services is recognized upon completion of the negotiated services. These sales do not meet the criteria
for revenue to be recognized over time. Non-recurring engineering services are one-off items that are unique to programs such as expedite
fees or set-up fees which are billed upon completion of the task with payment terms of 30 - 60 days from date of invoice.

 F- 12

 NOTES

 Note
2 Revenue Recognition – Continued

 Transaction
Price

 The
transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring goods and services
to the customer. Revenue is recorded based on the transaction price, which includes fixed consideration. The Company's contracts
do not include variable consideration.

 Contract
Balances

 The
timing of revenue recognition generally aligns with the right to invoice the customer. The Company records accounts receivable when
it has the unconditional right to issue an invoice and receive payment, regardless of whether revenue has been recognized. The
balance in accounts receivable at January 1, 2023 and 2022 was $ 5,925,724
and $ 5,169,204, respectively. Deferred revenue is recognized on the consolidated balance sheets when cash payments are received in advance of the Company
satisfying its performance obligation. Deferred revenue is recognized as revenue on the consolidated statements of operations when
the Company satisfies its performance obligation to the customer. Balances in deferred revenue at January 1, 2023 and 2022 were
$ 348,095 and $ 313,830,
respectively. Revenue recognized during the years ended December 31, 2023 and 2022 from amounts included in deferred revenue at the
beginning of the period was $ 348,095
and $ 313,830, respectively.
The Company does not have any contract assets.

 Costs
to Obtain a Contract

 The
Company did not incur costs of obtaining contracts expected to benefit longer than one year. As a result, there are no capitalized contract
acquisition costs as of December 31, 2023 or 2022.

 Warranties

 The
buyer shall have thirty (30) days from the date of shipment to inspect and either accept or reject. If goods are rejected, written notice
of rejection and the specific reasons therefore must be sent to the Company within such thirty (30) day period after receipt. Failure
to reject goods or to notify the Company of errors, shortages, or other non-compliance with the agreement within such thirty (30) day
period shall constitute irrevocable acceptance of goods and admission that they fully comply with the agreement.

 Disaggregated
Revenues

 The
following table disaggregates revenue by revenue recognition methodologies as outlined above for the years ended December 31:

of Disaggregated Revenues

 2023

 2022

 Products

 $
 25,736,915

 $
 26,075,627

 Custom Tooling

 1,382,620

 1,390,210

 Non-Recurring Engineering

 2,321,645

 373,475

 Total

 $
 29,441,180

 $
 27,839,312

Optics' management periodically reviews its revenues by its consumer, communication, medical, and defense end-markets. The
purpose of this analysis is to determine its end market mix and identify trends. The following table disaggregates revenue as
outlined above for the years ended December 31:

 2023

 2022

 Consumer

 $
 7,026,621

 $
 8,973,171

 Communication

 5,321,371

 -

 Defense

 7,457,372

 7,410,224

 Medical

 9,635,816

 11,455,917

 Total

 $
 29,441,180

 $
 27,839,312

 F- 13

 NOTES

 NOTE
3 – REVERSE CAPITALIZATION

 Reverse Capitalization

 On
November 7, 2023, Legacy Syntec consummated a merger with OmniLit Acquisition Corp
(OLIT). Legacy Syntec was deemed to be the accounting acquirer in the merger. The determination was primarily based on Legacy
Syntec's stockholders having a majority of the voting power in the combined Company, Legacy Syntec having the ability to
appoint a majority of the Board of Directors of the Company, Legacy Syntec's existing management team comprising the senior
management of the combined Company, Legacy Syntec comprising the ongoing operations of the combined Company and the combined Company
assumed the name "Syntec Optics Holdings, Inc.". Accordingly, for accounting purposes, the merger was treated as the
equivalent of Legacy Syntec issuing stock for the net assets of OLIT, accompanied by a recapitalization. The net assets of OLIT are
stated at historical cost, with no goodwill or other intangible assets recorded.

 In
accordance with guidance applicable to these circumstances, the equity structure has been restated in all comparable periods up to November
7, 2023, to reflect the number of shares of the Company's common stock, $ 0.0001 par value per share, issued to Legacy Syntec's
stockholders in connection with the merger. As such, the shares and corresponding capital amounts and income (loss) per share related to Legacy
Syntec's outstanding common stock prior to the merger have been retroactively restated as shares reflecting the exchange ratio
of 9,031.152 established in the merger. Legacy Syntec's common stock previously classified as temporary equity was retroactively adjusted,
converted into common stock and reclassified to permanent equity as a result of the reverse recapitalization.

 Immediately
before the closing of the merger the funds remaining after such redemptions, totaling approximately $ 3.2 million, became available to finance
transaction expenses and the future operations of Syntec Optics.

 F- 14

 NOTES

 NOTE
3 – REVERSE CAPITALIZATION – Continued

 Upon
the closing of the merger, holders of Legacy Syntec common stock received shares of common stock in an amount determined by application
of the Exchange Ratio. For periods prior to the merger, the reported share and per share amounts have been retroactively converted by
applying the Exchange Ratio. The consolidated assets, liabilities, and results of operations prior to the merger are those of Legacy
Syntec.

 The
following table summarizes the elements of the merger allocated to the Consolidated Statements of Changes in Stockholder's Equity:

of Merge Allocated of Consolidated Statements of Operations

 Amounts

 Cash: OLIT trust

 $
 3,167,479

 Cash: OLIT

 45,946

 Gross Proceeds

 3,213,425

 Net liabilities assumed in merger transaction

 ( 158,404
)

 OLIT transaction costs paid at close

 ( 1,365,000
)

 Net benefit assumed in recapitalization

 $
 1,690,021

 Number of Shares

 Common stock, outstanding prior to merger

 1,348,049

 Less: Redemption of OLIT shares

 ( 1,051,450
)

 OLIT Public Shares

 296,599

 OLIT Sponsor Shares

 4,791,667

 Legacy Syntec shares (1)

 Total shares of common stock immediately after the merger

 36,688,266

 (1)
 - The number of Legacy Syntec shares was determined from The shares of Legacy Syntec outstanding
immediately prior to The closing of The merger converted at The Exchange Ratio. All fractional shares were rounded down.

 Warrants

 As
part of the reverse capitalization transaction, the Company issued public warrants.
Refer to Note 17 for a further description of the warrants.

 Earnout

 The
former holders of shares of Legacy Syntec common stock are entitled to receive their pro rata share of up to 26,000,000
additional shares of common stock (the "Contingent Earnout"). The Company will
issue 26,000,000
additional shares of Common Stock (the "Contingent Earnout") to the Company's existing stockholders at the
Closing, which Contingent Earnout shares will vest upon Syntec Common Stock achieving the following stock trading price thresholds
(the "Contingent Earnout Trigger Price") following the Closing: one-third (1/3 rd) at $ 12.50
per share, one-third (1/3 rd) at $ 14.00
per share, and one-third (1/3 rd) at $ 15.50
per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like). The Contingent Earnout
shares which remain unvested as of the date five (5) years from the Closing (the "Earnout Period") will be deemed
cancelled and no longer subject to vesting.

 F- 15

 NOTES

 NOTE 3 – REVERSE CAPITALIZATION –
Continued

 The
Company accounts for the Contingent Earnout Shares as either equity-classified or liability-classified instruments based on an
assessment of the Contingent Earnout Shares specific terms and applicable authoritative guidance in ASC 480, Distinguishing
Liabilities from Equity (" ASC 480 ") and ASC 815, Derivatives and Hedging (" ASC 815 ") as
defined below. The Company has determined that the Contingent Earnout Shares are indexed to the Company's common stock and are
therefore not precluded from equity classification. Such accounting determination will be assessed at each financial statement
reporting date to determine whether equity classification remains appropriate. If the Contingent Earnout Shares are later determined
to be liability-classified instruments, the Company would recognize subsequent changes in the fair value of such Contingent Earnout
Shares within earnings at each reporting period during the earnout period. The pro forma value of the Contingent Earnout
Consideration was estimated utilizing a Monte Carlo simulation model. The significant assumptions utilized in estimating the fair
value of Contingent Earnout Consideration include the following: (1) our Common Stock price of $ 8.73 -$ 15.76
per share; (2) normal distribution; (3) values assessed after the Earnout Period of five ( 5)
years and; (4) discount rates ranging from 15.5 %- 19.5 %. The preliminary fair value of the Contingent Earnout Shares is $ 177.6 million.

 The
accounting treatment of the Contingent Earnout Shares have been recognized at fair value upon the closing of the merger and
classified in stockholders' equity. Because the merger is accounted for as a reverse recapitalization, the recognition of the
Contingent Earnout Shares has been treated as a deemed dividend and has been recorded within additional-paid-in-capital and has no
net impact on additional paid-in capital.

 Note
4 Other Reimbursements

 On
August 9, 2022, the Company suffered a power outage that interrupted business and resulted in various equipment damage. The Company received
$ 120,000 during Q3 2022 from the insurer Acadia Insurance for repair costs that has been included in other income in the consolidated
statement of operations for the year ended December 31, 2022. The Company has received an additional $ 76,951 for repair costs which was
paid in 2023. In addition, Acadia Insurance has provided guidelines to the Company for an additional interruption loss claim. The
Company has received $ 23,902 in 2023 in relation to the interruption loss claim to date.

 Note
5 Inventory

consists of the following at December 31:

of Inventory

 2023

 2022

 Raw Materials

 $
 1,144,322

 $
 865,499

 Work-in-Process

 4,818,156

 2,705,281

 Finished Goods

 188,251

 247,289

 6,150,729

 3,818,069

 Less: Reserve for Obsolescence

 316,620

 191,709

 $
 5,834,109

 $
 3,626,360

 F- 16

 NOTES

 Note 6 Property and Equipment

and equipment consists of the following at December 31:

of Property and Equipment

 2023

 2022

 Machinery and Equipment

 $
 32,466,641

 $
 30,595,840

 Building and Leasehold Improvements

 5,096,436

 5,082,901

 Land

 130,000

 130,000

 Office Furniture and Equipment

 2,292,995

 2,196,265

 Tooling

 103,310

 103,860

 Vehicles

 24,059

 24,059

 Assets Not Placed in Service

 260,000

 -

 Property and Equipment, Gross

 40,373,441

 38,132,925

 Less: Accumulated Depreciation

 29,272,389

 26,508,106

 Property and Equipment, Net

 $
 11,101,052

 $
 11,624,819

 Depreciation
expenses were approximately $ 2,764,000 and $ 3,141,000 for the years ended December 31, 2023 and 2022, respectively.

 Note 7 Intangible Assets

 Intangible
assets consist of the following at December 31, 2023, and 2022:

of Intangible assets

 2023

 2022

 Licenses (weighted average life of 5 years)

 $
 300,000

 $
 -

 Total identifiable intangible assets

 300,000

 -

 Less: Accumulated Amortization

 5,000

 -

 Intangible Assets, Net

 $
 295,000

 $
 -

 F- 17

 NOTES

 Note 7 Intangible Assets – Continued

 Amortization
expense for acquired finite-lived intangibles was $ 5,000 and $- 0 - for the years ended December 31, 2023, and 2022, respectively. Expected
future amortization expense of acquired finite-lived intangible assets as of December 31, 2023, is as follows:

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

 December 31, 2024

 $
 60,000

 2025

 60,000

 2026

 60,000

 2027

 60,000

 2028

 55,000

 Total

 $
 295,000

 Note
8 Loan to Stockholder

 During
2022, the outstanding loan balance and accrued interest was settled via a non-cash distribution to the stockholder. Since the loan receivable
was to the sole stockholder with no fixed payment terms, it had been classified as a reduction to equity.

 Note
9 Subscription Receivable

loaned $ 300,000
 to a stockholder of Syntec in 1999, the proceeds
of which were used by the stockholder to acquire an outstanding interest in Syntec. Syntec had classified the loan receivable as an offset
to equity with accrued interest income recorded to additional paid-in capital. During 2022, the loan balance and accrued interest amounting
to $ 176,071
 in the aggregate was settled via a non-cash distribution
to the stockholder.

 Note
10 Line of Credit

 The
Company has a line of credit available in the amount of $ 10,000,000 with M&T Bank. Borrowings may be made against the line of credit
as Secured Overnight Financing Rate (SOFR) Loans. The weighted average rate on outstanding borrowings as of December 31, 2023 was 7.63 %.
As of December 31, 2023 and 2022, the Company had $ 6,537,592 and $ 6,400,000, respectively, outstanding under the line of credit facility.

 The
line of credit and term notes contain customary covenants and restrictions on the Company's ability to engage in certain activities
and financial covenants requiring the Company to maintain certain financial ratios. At December 31, 2023 the Company was in compliance
with these financial covenants.

 Note
11 Long-Term Debt

 Long-term
debt consists of the following at December 31, 2023 and 2022:

 F- 18

 NOTES

 Note 11 Long-Term Debt
– Continued

 Long-Term
Debt Maturities

of Long Term Debt Maturities

 2023

 2022

 The Company entered into a $ 2,000,000 term note payable with Citizens Bank, requiring monthly principal installments of $ 33,333 plus interest at the Adjusted LIBOR rate as defined in the credit agreement. The note matured and was paid full in June 2023.

 $
 -

 $
 199,126

 The Company entered into a $ 674,000 term note payable with the U.S. Small Business Administration, requiring monthly installments of $ 6,646, including interest at a fixed rate of 1.87 %. The note matures in September 2026. The note is secured by certain assets of the Company and a personal guaranty of the Company's stockholder. In November 2023, the Company refinanced their debt obligations with another lender and this note was paid in full as a result.

 -

 267,438

 The Company entered into a $ 2,000,000 term note payable with Citizens Bank, requiring monthly principal installments of $ 33,333, plus interest at the Adjusted SOFR rate as defined in the credit agreement. The note matures in July 2026. In November 2023, the Company refinanced their debt obligations with another lender and this note was paid in full as a result.

 -

 1,433,333

 The Company entered into a $ 1,216,712 mortgage note payable with Citizens Bank, requiring monthly principal installments of $ 5,633, plus interest at the Adjusted SOFR rate as defined in the credit agreement. The effective interest rate was 8.41 % at September 30, 2023. The note matures in July 2023. In November 2023, the Company refinanced their debt obligations with another lender and this note was paid in full as a result.

 -

 906,901

 The Company entered into a $ 1,775,000 term note payable with M&T Bank, requiring monthly principal installments of $ 34,886 plus interest at fixed rate of 6.59 %. The note matures in November 2028.

 1,722,626

 -

 The Company entered into a $ 1,064,000 term note payable with the U.S. Small Business Administration, requiring monthly installments of $ 6,652, including fees and interest at a fixed rate of 2.22 %. The note matures in June 2036. The note is secured by certain assets of the Company and a personal guaranty of the Company's stockholder.

 718,441

 767,771

 Total Long-Term Debt

 2,441,067

 3,574,569

 Less: Unamortized Debt Issuance Costs

 53,156

 36,180

 Long-Term Debt, Less Unamortized Debt Issuance Costs

 2,387,911

 3,538,389

 Less: Current Maturities

 362,972

 1,624,851

 Long-Term Debt

 $
 2,024,939

 $
 1,913,538

 At
December 31, 2023, the future debt maturities are as follows:

of Long Term Future Debt Maturities

 December 31, 2024

 $
 362,972

 2025

 385,975

 2026

 410,182

 2027

 436,005

 2028

 391,236

 Thereafter

 454,697

 Total

 $
 2,441,067

 F- 19

 NOTES

 Note
12 Retirement Plan

 The
Company maintains a 401(k) retirement plan covering eligible employees of the Company and its affiliate. Under the plan, participants
may defer up to 84% of their annual compensation, with Syntec matching 50% of employee contributions not to exceed 6% of annual compensation.
Total contributions for the Company for the years ended December 31, 2023 and 2022 amounted to $ 179,970 and $ 170,839, respectively.

 Note
13 Income Taxes

 Following
is a summary of the components giving rise to the income tax benefit for the years ended December 31:

 Schedule Of Income Tax (benefit) Provision

 2023

 2022

 Current:

 Federal

 $
 72,557

 $
 308,738

 State

 407,485

 44,346

 Total
 current income taxes

 480,042

 353,084

 Deferred
 Tax Benefit

 ( 1,199,214
)

 ( 507,913
)

 Total

 $
 ( 719,172
)

 $
 ( 154,829
)

 Deferred
income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financing
reporting purposes and the amount used for income tax purposes. Significant components of our deferred tax assets and liabilities are
as follows as of December 31:

Of Tax Deferred Tax Assets And Liabilities

 2023

 2022

 Deferred
 Tax Assets:

 New
 York State Investment Tax Credit

 $
 1,402,438

 $
 1,295,898

 Massachusetts
 Research and Development Credit

 628,371

 478,564

 Allowance for Current Expected Credit Losses

 55,732

 2,836

 Unamortized Startup Costs

 476,876

 -

 Amortization of Intangible Assets

 -

 Section
 174 Capitalization

 1,100,698

 531,553

 Reserve

 73,857

 41,498

 Accrued
 Management Fees

 -

 5,413

 Accrued Vacation

 16,905

 8,374

 Gain
 on Disposal

 -

 ( 14,157
)

 Valuation
 Allowance

 ( 2,030,809
)

 ( 1,774,462
)

 Deferred Tax Assets:

 $
 1,724,845

 $
 575,517

 Deferred Tax Liabilities:

 Depreciation

 $
 ( 1,799,735
)

 $
 ( 1,849,621
)

 Deferred
 Tax Liabilities, Net

 $
 ( 74,890
)

 $
 ( 1,274,104
)

 The
provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory federal income
tax rate to income from continuing operations before income taxes as follows for the year ended December 31:

 Schedule of Reconciliation of Effective Tax Rate

 2023

 2022

 Statutory Income Tax Rate

 21.00
 %

 21.00
 %

 Increase (Decrease) In Tax Provision Resulting From:

 State
 Income Taxes, Net of Federal Benefit

 11.79
 %

 ( 5.00
)%

 Federal Special Deductions

 ( 7.05
)%

 0.00
 %

 Federal
 Credits

 ( 39.28
)%

 13.90
 %

 Federal Tax Prior Year (Over) Under Accrual

 ( 20.05
)%

 ( 2.50
)%

 State
 Tax Rate Change

 18.22
 %

 ( 9.70
)%

 State
 Tax Credits

 ( 29.33
) %

 17.40
 %

 State Deferred Taxes

 ( 15.62
)%

 3.60
 %

 Change
 in Valuation Allowance

 ( 25.32
) %

 ( 17.40
)%

 Transaction Costs

 2.49
 %

 0.00
 %

 Pass Through Entity

 25.09
 %

 5.50
 %

 Other,
 Net

 0.86
 %

 ( 0.50
)%

 Effective
 Tax Rate

 ( 57.20
)%

 26.30
 %

 The
tax returns of the Company are open for three years form the date of filing. At the report date, the statute of limitations for federal
and state tax returns are open for the Company for 2022, 2021, and 2020.

 Under
the provisions of the Internal Revenue Code, the net operating loss and tax credit carryforwards are subject to review and possible adjustment
by the Internal Revenue Service and state tax authorities. Net operating loss and tax credit carryforwards may become subject to an annual
limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period
in excess of 50 percent, as defined under Sections 382 and 383 of the Internal Revenue Code, respectively, as well as similar state provisions.
This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount
of the annual limitation is determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership
changes may further affect the limitation in future years. The Company has evaluated and concluded that section 382 was not triggered.

 F- 20

 NOTES

 Note 13 Income Taxes - Continued

 The
Company has significant deferred tax assets as a result of temporary differences between the taxable income on its tax return and U.S.
GAAP income, federal and state R&D tax credit carry forwards. A deferred tax asset generally represents future tax benefits to be
received when temporary differences previously reported in the consolidated financial statements become deductible for income tax purposes,
or when tax credit carry forwards are utilized on the Company tax returns. The Company assesses the realizability of its deferred tax
assets and the need for a valuation allowance based on the guidance provided in current financial accounting standards.

 Significant
judgment is required in determining the realizability of the Company's deferred tax assets. The assessment of whether valuation
allowances are required considers, amount other matters, the nature, frequency and severity of any current and cumulative losses, forecasts
of future profitability, the duration of statutory carry forward periods, the Company's experience with loss carry forwards not
expiring unused and tax planning alternatives. In analyzing the need for valuation allowances, the Company first considered its history
of cumulative operating results for income tax purposes over the past several years in each of the tax jurisdictions which it operates,
its recent financial performance, statutory carry forward periods and tax planning alternatives. In addition, the Company considered
both its near-term and long-term financial outlook. After considering all available evidence (both positive and negative), the Company
concluded that recognition of a valuation allowance was required in the amount of $ 2,030,809 and $ 1,774,462 December 31, 2023 and 2022,
respectively.

 New
York state corporate tax reform has resulted in the reduction of the business income base rate for qualified manufacturers in New York
State to 0% beginning in 2014 for Syntec. At December 31, 2023, the Company has $ 1, 402,438 of New York State investment tax credit carryforwards,
expiring in various years through 2037. The credits cannot be utilized unless the New York state tax rate is no longer 0%, and as such,
the Company has recorded a valuation allowance against the full amount of these credit carryforwards (net of the federal benefit). In
addition, the Company has approximately $ 628,371 of Massachusetts State Research and Development credit carryforwards, expiring in various
years through 2037 that the Company has recorded a valuation allowance against.

 Note
14 Leases

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

 The
components of operating and finance lease costs are as follows for the years ended December 31:

of Operating Lease and Finance Lease Costs

 2023

 2022

 Operating lease cost

 $
 -

 $
 12,708

 Finance Lease Cost:

 Amortization of assets

 -

 125,274

 Interest on liabilities

 -

 5,690

 Total lease cost

 $
 -

 $
 143,672

 There
were no variable payments or material short-term rentals for the years ended December 31, 2023.

 Supplemental
cash flow information related to leases are as follows for the years ended December 31:

of cash flow information related to leases

 2023

 2022

 Cash paid for amounts included in measurement of lease obligations:

 Operating cash flows from operating leases

 $
 -

 $
 12,708

 Operating cash flows from finance leases

 -

 5,690

 Financing cash flows from finance leases

 -

 222,376

 Non-cash lease disclosures:

 Operating lease assets obtained in exchange for operating lease liabilities

 -

 72,709

 F- 21

 NOTES

 Note
14 Leases – Continued

 The
following table summarizes weighted average remaining lease term and discount rates as of December 31, 2023 and December 31, 2022:

of Weighted Average Remaining Lease Term

 2023

 2022

 Weighted average remaining lease term (years)

 Operating leases

 N/A

 4.25

 Finance leases

 N/A

 N/A

 Weighted average discount rate

 Operating leases

 N/A

 6.40
 %

 Finance leases

 N/A

 N/A

 There
are no future maturities of our lease liabilities as of December 31, 2023.

 Note
15 Asset Purchase Agreement

 On
December 11, 2023, the Company entered into an asset purchase agreement with Molex, LLC, whereby the Company acquired machinery and intellectual
property assets for a purchase price of $ 560,000.

 Note
16 Related Party Transactions

 Accrued
Management Fees

 The
Company pays a management fee to the majority stockholder for services provided to the Company. For the years ended December 31, 2023
and 2022, the management fee expense was $ 318,334 and $ 500,032 respectively. As of December 31, 2023 and 2022, unpaid management fees
to the majority stockholder amounted to $- 0 - and $ 25,000, respectively and included in the accrued expenses line on the accompanying
consolidated balance sheets.

 Other
Related Party Transactions

 SWI
DISC, Inc. (the DISC) is owned by the majority stockholder of the Company. During 2014, the Company entered into a commission agreement
with the DISC related to the Company's foreign sales. Total commissions under the terms of this agreement amounted to $- 0 - for
the years ended December 31, 2023 and 2022.

 Note
17 Warrants

 In
connection with the merger discussed in Note 3, the Company assumed the outstanding public warrants of OLIT.

 Each
warrant entitles the holder to the right to purchase one share of common stock at an exercise price of $ 11.50 per share. No fractional
shares will be issued upon exercise of the warrants. The Company may elect to redeem the warrants subject to certain conditions, in whole
and not in part, at a price of $ 0.01 per warrant if (i) 30 days' prior written notice of redemption is provided to the holders,
and (ii) the last reported sale price of the Company's common stock equals or exceeds $ 18.00 per share (as adjusted for stock
splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending
on the third business day prior to the date on which the Company sends the notice of redemption to the warrant holders. Upon issuance
of a redemption notice by the Company, the warrant holders have a period of 30 days to exercise for cash, or on a cashless basis. On
the Closing Date, there were 14,107,989 warrants issued and outstanding. The warrants are not precluded from equity classification
and are accounted for as such on the date of issuance, and each balance sheet date thereafter. There was no activity of public warrants
from the closing date through December 31, 2023.

 The
measurements of the warrants after the detachment of the warrants from the Units are classified as Level 1 due to the use of an observable
market quote in an active market under the ticker OPTXW. For periods subsequent to the detachment of the warrants from the Units, the
close price of the warrant price was used as the fair value of the warrants as of each relevant date.

 The
following tables presents a roll-forward of the Company's warrants from January 1, 2023 to December 31, 2023:

of Warrant

 Common Stock Warrants

 **Warrants outstanding, January 1, 2023

 -

 Assumed in merger

 14,107,989

 Exercised subsequent to merger

 -

 Warrants outstanding, December 31, 2023

 14,107,989

 **
 There
 were no warrants issued, exercised and outstanding prior to January 1, 2023

 F- 22

 NOTES

 Note
18 Common Stock

 The
Company is authorized to issue up to 121,000,000 shares of common stock with $ 0.0001 par value. Common stockholders are
entitled to dividends if and when declared by the Board of Directors. As of December 31, 2023 and 2022, there were 36,688,266 and 31,600,000 shares
issued and outstanding retroactively adjusted and no dividends on common stock had been declared by the Company.

 As
of December 31, 2023 and 2022, the Company had reserved shares of common stock for issuance as follows:

of Reserved shares of common stock

 2023

 2022

 Common stock outstanding

 36,688,266

 Warrants outstanding

 14,107,989

 -

 Contingent earnout shares

 26,000,000

 -

 Shares available for future issuance (1)

 4,773,971

 -

 Total

 81,570,226

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

 Note
19 Stock-based Compensation

 In
connection with the merger, shareholders and board members approved the 2023 Equity Incentive Plan (the "2023 Incentive Plan").
Up to 2,773,972 shares of the Syntec Optics common stock (" Common Stock ") will initially be reserved for issuance
under the 2023 Incentive Plan, and additional shares will become available for issuance under the 2023 Incentive Plan each year as described
below under "Aggregate Share Limit." Our Board of Directors and stockholders have approved the 2023 Incentive Plan at the
annual meeting held on October 31, 2023.

 The Company will issue up to 2,000,000 shares of common stock (the " Performance-based-Earnout ")
to members of the management team of the Company from time to time, to the extent determined by the Board of Directors in its sole discretion.

 As of December 31, 2023, there were 4,773,971 shares of unissued authorized
and available for future awards under the plans.

 Note
20 Income (Loss) Per Share

 The
following table sets forth the information needed to compute basic and diluted (loss) earnings per share for the years ended December
31, 2023 and December 31, 2022:

 Schedule of Basic And Diluted (loss) Earnings Per Share

 2023

 2022

 Basic and diluted net income (loss) per share

 Numerator:

 Net income (loss)

 $

 $
)

 Denominator

 Weighted-average shares outstanding

 32,366,725

 Basic and diluted net income (loss) per share

 $
 0.06

 $
 ( 0.01
)

 Note
21 Grant Revenue

 On
July 15, 2015, ELR Associates LLC entered in a building renovation agreement with the City of Rochester. The grant amount was for $ 300,000
and was initially deferred under the terms of the agreement to renovate the facilities and maintain full time equivalent jobs for City
of Rochester residents. As of December 31, 2023, the requirements have been fulfilled and the revenue was recognized in other income
on the consolidated statement of operations.

 Note
22 Commitments and Contingencies

 The
Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. Such matters are subject
to many uncertainties, and outcomes are not predictable with assurance. In the opinion of management, the ultimate disposition of these
matters will not have a material adverse effect on the Company's financial position or results of operations.

 Note
23 Significant Customers

 For
the year ended December 31, 2023, the Company generated 53 % of revenues from three customers. These three customers are in different
end-markets utilizing diverse manufacturing capabilities from the Company. The outstanding accounts receivable due from these customers
were approximately $ 4,506,000 as of December 31, 2023.

 For
the year ended December 31, 2022, the Company generated 50 % of revenues from three customers. These three customers are in different
end-markets utilizing diverse manufacturing capabilities from the Company. The outstanding accounts receivable due from these customers
were approximately $ 3,895,000 as of December 31, 2022.

 Note
24 Subsequent Event

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

 On
March 19, 2024, ELR Associates, LLC entered into a $ 863,607 mortgage note payable to M&T bank for the property. The establishment
of this mortgage note is a reclassification of debt rather than a new issuance as the Company's outstanding borrowings on its line
of credit will be reduced by the amount of the mortgage note. The Company incurred no new net debt obligations as a result of this transaction.

 On
March 19, 2024, the Company borrowed $ 236,781 against their available equipment line of credit. In accordance with the existing credit
agreement, borrowing against the equipment line of credit established a term note obligation for the Company.

 F- 23