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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, 2024

 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

 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 June 28, 2024, based on the closing price of $3.05
for shares of the registrant's common stock as reported by the Nasdaq Capital Market, was approximately $ 111.899 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 October 3, 2025, there were 36,920,226
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 2025 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, 2024, 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," "Syntec", 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 original equipment manufacturers ("OEMs") who
rely on opto-electronics, light enabled devices, and intelligence that require high-precision and reliability. Ultimately, our
vertically integrated advanced manufacturing platform of various different but complimentary technologies 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, biomedical, and communications 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
opto-electronic system solutions. Making our own housings, mold tools, molding parts, 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. For defense applications, lighter weight optics are critical
advantage. For example, less weight can reduce on helmet equipment can reduce neck trauma for army soldiers' helmets or less
equipment weight is beneficial for air force pilots. For biomedical applications, biocompatible polymer-based optics are considered
safer. For satellite communications, the use of lighter weight metal and polymer optics reduces installation costs.

 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 most recent Industry Report (2022), 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. Today Syntec Optics light-enables products with a wide variety of
materials from aluminum, crystals, glass, and polymers, Syntec's ground-breaking work in polymer-based
optics starting in 2000 created 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.

Optics added glass optics in 2018, leveraging its expertise in molding technology. Certain glasses can be molded for visible and near
IR spectrum. Glass molding has also emerged as a leading technology to address growing needs in mid wave infrared and long wave infrared,
especially with growing limitations on availability of Germanium.

 Syntec Optics has offered
aluminum or other metal precision-machined and nano-machined opto-mechanicals since 2000. Optical components often require
thin-films coating. Syntec Optics developed unique coating technologies by 2014 to forward integrate.

 In the year
2000, Syntec Optics developed capabilities to assembly its components into sub-system both integrating optics as well as adding
electronics to the optics.

 Addressable
Markets

 Optics
and Photonics Industry Report 2024 estimated that in 2023, the manufacturing sector contributed ~27% of global gross domestic product
("GDP") annually, or an estimated $28.3 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 $16
trillion annually, and represents roughly 15% of the world's economy. This 15% 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 $2.3 trillion in 2023. 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 2024 Industry Report valued the 2023 photonics-enabled products and services at $2.39
trillion – an increase of 40% over the ten-year period, and a compound annual growth (CAGR) rate of 4.3%, from 2012 to 2023,
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 2024 Industry Report estimated revenue growth for six of the top areas based on CAGR from 2012 to 2023. These
areas are listed below, as examples of verticals that we intend to focus on:

 Optical
Communications (+11%), Widespread global adoption of cloud-based services is driving an expansion of telecom infrastructure in
developing economies resulting in significant growth of the optical communications and networking markets.

 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 (+7%), 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 (+7%), 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
 (+9%), 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 (+6%), 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. In 1999 Syntec brought precision machining capabilities into the company with the addition of Wordingham, Technologies, enabling
broader capabilities for integrated optical assemblies. 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.

 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 technology will also be used in the 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 with in-house lower cost glass molded glass. Often in cameras or optics
sub-systems, glass and polymer elements are combined for a lower cost solution with durability 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 DNA sequencing, laser cutting,
thermal imaging, retinal eye scanning, military applications 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, 2024 and as of December 31, 2023, 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 to legal proceedings, investigations and claims incidental to the conduct of our business from time to time. We are not
currently a party to any material litigation or other legal proceedings brought against us. We are also not aware of any legal proceeding,
investigation or claim, or other legal exposure that has a more than remote possibility of having a material adverse effect on our business,
financial condition or results of operations.

 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, 2024, we have 159 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.

 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.

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 in Note 14. 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. No such awards have been made as of October 3, 2025.

 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 in November 2023 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
existing revolving credit facility decreased the line of credit from $10,000,000 to $8,000,000 with a maturity date of 3 years from
closing. The interest rate decreased from 310 basis points to 300 basis points added to the 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 of 7 years from closing. At the time of refinancing, the mortgage
facility was paid off from the new open line of credit until a new mortgage facility was set up with a 7-year maturity from closing
and the same interest rate option.

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

 As
the result of defaults on the loan covenant calculations for the quarterly periods ended June 30 2024 and September 30, 2024,
on November 29, 2024 the Company's credit agreement dated November 8, 2023 was amended. The bank waived certain criteria,
including a minimum fixed charge coverage ratio and a maximum total leverage ratio, subject to certain modifications of the
agreement, specifically, a reduction of the revolving line of credit to $8,000,000 and a reduction of the equipment loan amount to
$3,000,000. The modified interest margin rate margin was adjusted to 3.00%. The leverage ratio was modified to be no greater than
5.25 for 1Q 2025, no greater than 5.0 for 2Q 2025, no greater than 4.75 for 3Q 2025, no greater than 4.25 for 4Q 2025, and no
greater than 3.50 after that. The fixed charge ratio was suspended for 1Q 2025 and no less than 1.10: 1.00 after that. As of
December 31, 2024 the Company was not in compliance with the loan covenants and received a waiver letter from the lender.

 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.

 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
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 48% for the year ended December 31, 2024. 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.

 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, 2024, we had approximately $9.3 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 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.

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.

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 for a 10 year period and has provisions for two extensions of 5 years each. The Company has exercised the first extension
(to July 2030), 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 $29,050 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". At December 31, 2024, there were approximately
330 holders of record of our common stock and 140 holders of record of our public warrants. As of October 2, 2025, there
were approximately 301 holders of record of our common stock and 138 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
6A. Unregistered Sales of Equity Securities and Use of Proceeds

 None

 Item
6B. Defaults Upon Senior Securities

 None

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

 Cautionary
Note Regarding Forward-Looking Statements

 This
report includes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the Private Securities Litigation Reform Act of 1995. The words "believe," "may,"
"estimate," "continue," "anticipate," "intend," "should," "plan,"
"could," "target," "potential," "is likely," "will," "expect"
and similar expressions are intended to identify forward-looking statements. All statements other than statements of historical facts
contained in this report, including among others, our strategy, future operations, future financial position, future revenue, projected
costs, prospects, plans, objectives of management and expected market growth are forward-looking statements. Our actual results and financial
condition may differ materially from those expressed or implied in such forward-looking statements. Therefore, you should not rely on any
of these forward-looking statements.

 For
a further list and description of various risks, relevant factors and uncertainties that could cause future results or events to differ
materially from those expressed or implied in our forward-looking statements, see the "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations" sections in this report, our Annual Report on Form 10-K
for the fiscal year ended December 31, 2021, and our other filings with the Securities and Exchange Commission (the "SEC").
All forward-looking statements in this report are made only as of the date hereof or as indicated and represent our views as of the date
of this report. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible
for us to predict all of them. We undertake no obligation to publicly update or revise any forward-looking statements, whether as the
result of new information, future events or otherwise, except as required by law.

 Overview

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 up 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
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 the ability to expand the number of advanced manufacturing processes to handle increased volumes of existing and new customer
orders.

Optics focuses on four end markets of defense, medical, consumer, and communications all with several mission-critical applications with
strong tailwinds.

 In
2023 and 2024, Syntec Optics launched low weight night vision optics and hybrid light-weight magnifiers and
thermal clips in the defense end market. Syntec Optics also announced biomedical mirrors for sensing in the medical end
market. Rounding out new product launches, in the communication end market, Syntec Optics launched microlens arrays and low
earth satellite optics.

 The
Business Combination

 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.

 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 restrictions (global pandemics or geo-political conflicts), 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 in their battle against global
pandemics, and the increased global demand for high-fidelity data communications on all corners of the globe.

Optics plans to further consolidate and add bolt-on acquisitions for inorganic growth in the fragmented photonics industry by expanding
our portfolio of existing U.S.-based advanced manufacturing processes of making thin-film coated glass, crystal, and/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 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 accounted for 48% of revenues for the year ended December 31, 2024. 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.

 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.

Expenses

 General
and Administrative

 General
and administrative costs include personnel-related expenses attributable to our executive, finance, human resources, selling and
marketing, and information technology organizations, certain facility costs, office-related depreciation, 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, 2024 and 2023

 The
following table sets forth our results of operations for the years ended December 31, 2024 and 2023. 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.

 CONSOLIDATED
STATEMENTS OF OPERATIONS

 FOR
THE YEARS ENDED DECEMBER 31, 2024 AND 2023

 2024

 %
 of Net Sales

 2023

 %
 of Net Sales

 Net Sales

 $
 28,449,941

 %

 $
 29,441,180

 %

 Cost
 of Goods Sold

 22,747,615

 %

 21,520,189

 %

 Gross Profit

 5,702,326

 %

 7,920,991

 %

 General
 and Administrative Expenses

 8,278,720

 %

 6,379,879

 %

 (Loss) Income from Operations

 (2,576,394
)

 -9
 %

 1,541,112

 %

 Other Income (Expense)

 Other

 346,835

 %

 370,914

 %

 Interest
 Expense, Including Amortization of Debt Issuance Costs

 (764,934
)

 -3
 %

 (654,765
)

 -2
 %

 Total
 Other (Expense)

 (418,099
)

 -1
 %

 (283,851
)

 -1
 %

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

 (2,994,493
)

 -11
 %

 1,257,261

 %

 (Benefit
 From) Provision for Income Taxes

 (514,832
)

 -2
 %

 (719,172
)

 -2
 %

 Net
 (Loss) Income

 $
 (2,479,661
)

 -9
 %

 $

 %

 Net
Sales

 Net
sales decreased by $1 million, or 3.4% to $28.4 million for the year ended December 31, 2024, as compared to $29.4 million for the year
ended December 31, 2023. Decreases in Consumer industry ($0.6 million), Defense industry ($1.0 million), and Medical industry ($0.4 million) were partially offset by a $1.0 million increase
in the communications industry.

 Cost
of Goods Sold

 Cost of goods sold
increased by $1.2 million, or 6%, to $22. 7 million for the year ended December 31, 2024, as compared to $21.5 million
for the year ended December 31, 2023. This increase was primarily due to payroll costs (up $1.0 million) and material/ subcontractor
expenses (up $0.2 million). The increases in labor were driven by additions to metrology staffing as well as direct labor for increased parts
production.

 Gross Profit

 Gross profit
decreased by $2.2 million, or 28%, to $5.7 million for the year ended December 31, 2024, as compared to $7.9 million for the year ended
December 31, 2023. This decrease was primarily due to an increase in cost of goods sold as a percentage of revenue.

 General and Administrative
Expenses

 General and
administrative expenses increased by $1.9 million, or 30%, to $8.3 million for the year ended December 31, 2024, as compared to $6.4
million for the year ended December 31, 2023. This increase was primarily due to increases in salaries and wages (up $1.0 million),
stock-based compensation to non-employee directors (up $0.5 million), insurance costs (up $0.3 million), research and development expenses (up $0.1 million),
and building maintenance (up $0.1 million).

 Total Other Income

 Other income (expense)
decreased by $0.1 million, or 12% to ($0.4) million for the year ended December 31, 2024, as compared to other income of ($0.3)
million for the year ended December 31, 2023. The gain from sale of machinery and equipment was $0.3 million, offset by higher interest
expense of $0.1 million and elevated rates for the debt facilities.

 Income Tax Expense (Benefit
from)

tax expense (benefit) decreased by $0.2 million, or 28%, to ($0.5) million for the year ended December 31, 2024, as compared to ($0.7)
million for the year ended December 31, 2023, primarily due to reduced taxable income.

 Net Income (Loss)

 Net income decreased by $4.5
million to ($2.5) million for the year ended December 31, 2024, as compared to $2.0 million for the year ended December 31, 2023. This
change was primarily due to a decrease in sales of $1.0 million, an increase in cost of goods sold of $1.2 million, an increase in general and administrative
expenses of $1.9 million, an increase in other income (expense) of $0.1 million, and a decrease in provision for income taxes of $0.2 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. 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
Company has identified several non-recurring items included in our non-GAAP adjusted EBITDA financial measure. These items encompass
management fees, professional & transaction fees, technology start-up costs, optical molding evaluation expenses, glass molding evaluation
expenses, and executive transition expenses. In identifying these non-GAAP items the company additionally ensured that the expenses were not required to generate
revenue, that they were not related in any way to revenues or marketing expenses, and that they excluded items that could be described
as up front milestone or process expenses.

 The
table below presents our adjusted EBITDA, reconciled to net income for the years ended December 31, 2024 and 2023.

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

 NON-GAAP
RECONCILIATION OF EBITDA

 FOR
THE YEARS ENDED DECEMBER 31, 2024 AND 2023

 2024

 2023

 Net (Loss) Income

 $
 (2,479,661
)

 $

 Stock-Based Compensation expense

 450,000

 -

 Depreciation & Amortization

 2,765,713

 2,769,284

 Amortization of Debt Issuance Costs

 9,222

 12,451

 Interest Expenses

 738,010

 642,314

 Taxes

 (514,832
)

 (719,172
)

 Non-Recurring Items

 Anomalous Executive Transition expenses

 379,389

 -

 Nonrecurring professional Fees

 174,500

 -

 Technology Start-up Costs

 344,496

 -

 Optical Molding Evaluation Expenses

 201,908

 -

 Glass Molding Evaluation Expenses

 130,196

 -

 Sale of Equipment & Accessories

 -

 (10,068
)

 Transaction Filing Fees

 -

 344,752

 Management Fees & Expenses

 -

 318,334

 Adjusted EBITDA

 $
 2,198,941

 $
 5,334,328

 In
the years ended December 31, 2024 and 2023:

 A
 succession plan was required for the transition of the CEO at 2024 year-end.

 In
 both 2023 and 2024, Syntec recorded professional and transaction filing fees, as well as
 management fees and expenses related to its IPO filing with NASDAQ in November 2024. This
 includes audit and regulation fees.

 Unique
 technology costs relate to digital imaging, as well as delivery of innovative solutions for
 distribution of new products to customers that we provided in the year ended December 31,2024.

 Optical
 and glass molding for special products produced on-demand production for key partners requiring
 components using ultra-precision glass pressing.

 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, 2024, our principal
sources of liquidity were cash totaling $0.6 million and a line of credit with $3.8 million available.

 Significant
factors affecting the management of our ongoing cash requirements are the adequacy of available bank lines of credit and our ability
to attract long-term capital with satisfactory terms. The sources of our liquidity are subject to all of the risks of our business and
could be adversely affected by, among other factors, risks associated with events outside of our control, such as economic consequences
of global pandemics and geopolitical conflicts, monetary policy changes in the U.S. and other countries and their impact on the global
financial markets, supply chain disruptions and electronics and other material shortages, a decrease in demand for our products, our
ability to integrate current and future acquisitions, deterioration in certain financial ratios, availability of borrowings under our
revolving credit facility, and other market changes in general. See "Risks Relating to Syntec Optics' Financial Position
and Capital Requirements" included in Item 1A.

 Cash
Flow — Year ended December 31, 2024 and 2023

 SYNTEC OPTICS HOLDINGS, INC.

 UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS

 FOR
THE YEARS ENDED DECEMBER 31, 2024 AND 2023

 2024

 2023

 Net Cash (Used In) Provided By Operating Activities

 $
 (942,830
)

 $
 2,792,222

 Net Cash Used in Investing Activities

 (930,866
)

 (1,921,181
)

 Net Cash Provided By Financing Activities

 314,238

 761,023

 Net (Decrease) Increase in Cash

 (1,559,458
)

 1,632,064

 Cash - Beginning

 526,182

 Cash - Ending

 $
 598,787

 $

 Supplemental Cash Flow Disclosures:

 Cash Paid for Interest

 $
 738,010

 $
 652,778

 Cash Paid for Taxes

 $
 568,143

 $
 283,561

 Supplemental Disclosures of Non-Cash Investing Activities:

 Assets Acquired and Included in Accounts Payable and Accrued Expenses

 $
 198,584

 $
 642,547

 Issuance of finance lease for acquisition of equipment

 $
 2,160,070

 $
 -

 De-recognition of PPE and Intangible Asset transaction

 $
 560,000

 $
 -

Activities

 Net
cash used in operating activities was ($0.9) million for the year ended December 31, 2024, as compared to net cash provided by operating
activities of $2.8 million for the year ended December 31, 2023.

 The
primary drivers for the year-over-year change include a decrease in net income of $(4.5) million and additional funds provided of
$0.8 million in balance sheet accounts including: accounts payable and accrued expense changes of $(2.3) million, changes in
prepaid expenses of $(0.6) million, and changes in federal tax payable of $(0.5) million partially offset by changes in accounts
receivable of $2.0 million, changes in inventory of $1.0 million, changes in deferred income taxes of $0.7 million and other
operating asset and liability changes of $0.5 million including reduced grant revenue, reserves and allowances.

 Investing
Activities

 Net
cash used in investing activities was $0.9 million for the year ended December 31, 2024, as compared to $1.9 million for the year
ended December 31, 2023. The net cash used in investing activities decreased primarily due to an decrease in capital expenditures of
$0.7 million and an increase in proceeds from sale of equipment of $0.3 million.

 Financing
Activities

 Net
cash provided by financing activities was $0.3 million for the year ended December 31, 2024. Net cash provided by financing activities
was $0.8 million for the year ended December 31, 2023.

 The
primary drivers for the year-over-year change include a decrease in borrowings of debt obligations of $0.6 million, an increase in
repayment of finance lease obligations of $0.1 million, an increase in net repayments on Line of credit of $0.4 million, a decrease
in funds from OLIT Trust of $1.9 million, and a decrease in repayments on debt obligations of $2.5 million.

 Quantitative
and Qualitative Disclosures about Market Risk

 Our
primary market risk exposure is interest rate sensitivity. See Part II, Item 7A, "Quantitative and Qualitative Disclosures About
Market Risk."

 Critical
Accounting Estimates

 Our
condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United
States. The preparation of these condensed consolidated financial statements requires us to make judgments and estimates that affect
the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities in our financial
statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable
under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions or conditions.
On a recurring basis, we evaluate our judgments and estimates in light of changes in circumstances, facts, and experience. The effects
of material revisions in an estimate, if any, will be reflected in the consolidated financial statements prospectively from the date
of the change in the estimate.

 We
believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our
financial statements.

 We
periodically review physical inventory for excess, obsolete, and potentially impaired items and reserves. Any such inventory is written
down to net realizable value. The reserve estimate for excess and obsolete inventory is dependent on expected future use and requires
management judgement.

 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, 2024, our reserve was approximately $0.5 million compared to $0.3 million
as of December 31, 2023.

Taxes

 We
account for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized
for the future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities using enacted
rates. The effect of a change in tax rates on deferred taxes is recognized in income in the period that includes the enactment date.

 We
recognize the financial statement effect of an uncertain income tax position when it is more likely than not, based on the technical
merits, that the position will be sustained upon examination. Recognized income tax positions are measured at the largest amount that
is greater than 50% likely to be realized. A valuation allowance is recorded to reduce deferred income tax assets to an amount, which
in the opinion of management is more likely than not to be realized.

 Management
judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities, and any valuation allowance
recorded against our deferred tax assets. We consider factors such as the cumulative income or loss in recent years; reversal of deferred
tax liabilities; projected future taxable income exclusive of temporary differences; the character of the income tax asset, including
income tax positions; tax planning strategies and the period over which we expect the deferred tax assets to be recovered in the determination
of the valuation allowance. In the event that actual results differ from these estimates, or we adjust our estimates in the future, we
may need to adjust our valuation allowance, which could materially impact our financial position and results of operations.

 Recent
Accounting Pronouncements

 In November
2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 clarifies
or improves financial reporting by requiring disclosure of incremental segment information. The amendments require disclosure, on an
annual and interim basis for all public entities, of significant segment expenses included in segment profit or loss, an amount and description
of "other segment items" included in segment profit or loss, and an explanation of how reported segment profit or loss is
assessed and allocated. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023,
and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. See note 18 for more details.

 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.
ASU 2023-09 will be applied prospectively with the option for retrospective application for all prior periods presented.
The Company is currently evaluating the impact of adopting this guidance on the Company's current financial position, results of
operations or financial statement disclosures.

 In November 2024, the FASB issued ASU 2024-03, Income
Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses
("ASU 2024-03"). ASU 2024-03 requires additional disclosure of specific types of expenses included in the expense captions
presented on the face of the income statement as well as disclosures about selling expenses. ASU 2024-03 is effective for fiscal years
beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. ASU 2024-03 may
be applied prospectively with the option for retrospective application for all prior periods presented. The Company is currently evaluating
the impact of adopting this guidance on the Company's current financial position, results of operations or financial statement disclosures.

 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.

 Item
7A. Quantitative and Qualitative Disclosures about Market Risk

 On July
16, 2024, the Company entered into four separate lease agreements with a vendor for a total of 6 pieces of machinery. In reviewing the
lease agreements, the Company has determined that all 4 lease agreements are finance leases.

 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, 2024. A 100 basis point increase in interest rates
at December 31, 2024 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, 2024 and 2023, 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 Internal 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, 2024, 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 classification of revenue, accounts payable, accrued legal expenses, provision
 for income taxes, and inventory.

 4.

 We
 lack controls related to proper cut-off of costs of goods sold and general and administrative expenses.

 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.

 8.
 We
 lack control related to the evaluation and calculation of finance leases in accordance with
 Accounting Standards Codification 842-20-25-1a.

 9.
 We lack control related to identification of stock-based compensation agreements
and related accounting for and disclosure of such agreements.

 Remediation Plans and
Status

 As
disclosed in the section titled "Evaluation of Internal Controls and Procedures," we have identified certain control deficiencies.
To address these issues, we have designed and are in the process of implementing the following remediation initiatives, which are aligned
with the COSO framework:

 Enhance
 corporate governance through increased oversight by the Audit Committee, including additional
 reviews of internal control improvements and financial statements prior to publication (Control
 Environment; Monitoring Activities).

 Design
 and implement internal control flowcharts to strengthen segregation of duties (Control Activities;
 Risk Assessment).

 Increase
 staffing levels and competencies to enable appropriate separation of duties (Control Environment;
 Control Activities).

 Implement
 a formal checklist, review process, and controls over all journal entries and modifications
 to trial balances (Control Activities; Information & Communication).

 Hire
 additional experienced accounting and reporting professionals to prepare and approve consolidated
 financial statements and footnote disclosures in accordance with U.S. GAAP (Control Environment;
 Control Activities).

 Engage
 outside professional support to assist with SEC reporting requirements and special circumstances
 to ensure timely and accurate filings (Control Environment; Information & Communication).

 Establish
 a formal quarterly attestation process for managers and accounting staff to reinforce and
 monitor the use of control processes and workflows (Monitoring Activities; Information &
 Communication).

 Implement
 a formalized system for tracking control measures to reduce complexity and improve management's
 review of control effectiveness (Monitoring Activities; Information & Communication).

 While
the Company has initiated these remediation efforts, not all measures have been fully implemented as of the date of this filing. We will
continue to enhance our internal control framework, employ additional procedures, and utilize appropriate tools and resources to ensure
that our consolidated financial statements are presented fairly, in all material respects.

 The
Company believes these remediation measures will significantly strengthen its internal control environment and provide the foundation
to remediate the identified material weaknesses in future reporting periods.

 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 year ended December 31, 2024 that materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.

 Item
9B. Other Information

 No t
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 2025 Annual Meeting of Stockholders, or Proxy Statement,
to be filed with the SEC.

 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).

 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 3rd day of October, 2025.

 By:

 /s/
 Al Kapoor

 Chairman
 and Chief Executive Officer

 (Principal
 Executive Officer)

 By:

 /s/ Dean Rudy

 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/
 Dean Rudy

 Chief
 Financial Officer

 Dean Rudy

 (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)

 Consolidated
 Balance Sheets as of December 31, 2024 and 2023

 Consolidated
 Statements of Operations for the years ended December 31, 2024 and 2023

 Consolidated
 Statements of Changes in Stockholders' Equity for the years ended December 31, 2024 and 2023

 Consolidated
 Statements of Cash Flows for the years ended December 31, 2024 and 2023

 Notes
 to Consolidated Financial Statements

 F- 1

 Report
of Independent Registered Public Accounting Firm

 To
the Stockholders and Board of Directors of

Optics Holdings, Inc.

 Opinion
on the Financial Statements

 We
have audited the accompanying consolidated balance sheets of Syntec Optics Holdings, Inc. and subsidiaries (the
"Company") as of December 31, 2024 and 2023, the related consolidated statements of operations, changes in
stockholders' equity, and cash flows for each of the two years in the period ended December 31, 2024, 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, 2024 and 2023, and the results of its operations and its cash flows for
each of the two years in the period ended December 31, 2024, 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 audits. 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 audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits 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 audits,
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
audits 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 audits 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 audits provide
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

 CONSOLIDATED
BALANCE SHEETS

 2024

 2023

 2024

 2023

 ASSETS

 Current

 Cash

 $
 598,787

 $

 Receivable, Net

 5,739,205

 6,800,064

 6,953,278

 5,834,109

 Prepaid
 Expenses and Other Assets

 596,589

 359,443

 Income Tax Receivable

 9,794

 -

 Total
 Current Assets

 13,897,653

 15,151,861

 and Equipment, Net

 11,668,859

 11,101,052

 Intangible
 Assets, Net

 -

 295,000

 Deferred Tax Asset

 439,942

 -

 Total

 $
 26,006,454

 $
 26,547,913

 LIABILITIES
 AND STOCKHOLDERS' EQUITY

 Current
 Liabilities

 Payable

 $
 2,706,392

 $
 3,042,315

 Accrued
 Expenses

 814,600

 1,071,256

 Income Tax Payable

 -

 370,206

 Revenue

 36,512

 -

 Line of Credit

 6,263,863

 6,537,592

 Current
 Maturities of Debt Obligations

 467,742

 362,972

 Current
 Maturities of Finance Lease Obligations

 284,002

 -

 Total
 Current Liabilities

 10,573,111

 11,384,341

 Liabilities

 Debt Obligations

 2,614,812

 2,024,939

 Finance Lease Obligations

 1,784,449

 -

 Income Tax

 -

 74,890

 Total
 Long-Term Liabilities

 4,399,261

 2,099,829

 Total
 Liabilities

 14,972,372

 13,484,170

 Commitments and Contingencies

 -

 -

 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, 2024; 36,688,266
 issued and outstanding as of December 31, 2023

 3,669

 3,669

 Common Stock Value

 3,669

 3,669

 Additional
 Paid-In Capital

 2,377,204

 1,927,204

 Retained
 Earnings

 8,653,209

 11,132,870

 Total
 Stockholder's Equity

 11,034,082

 13,063,743

 Total
 Liabilities and Stockholder's Equity

 $
 26,006,454

 $
 26,547,913

 See
Notes to Consolidated Financial Statements.

 F- 3

 CONSOLIDATED STATEMENTS OF OPERATIONS

 FOR
THE YEARS ENDED DECEMBER 31, 2024 AND 2023

 2024

 2023

 Net
 Sales

 $
 28,449,941

 $
 29,441,180

 Cost
 of Goods Sold

 22,747,615

 21,520,189

 Gross
 Profit

 5,702,326

 7,920,991

 General
 and Administrative Expenses

 8,278,720

 6,379,879

 (Loss) from Operations

 ( 2,576,394
)

 1,541,112

 Other
 Income (Expense)

 Other

 346,835

 370,914

 Interest Expense, Including Amortization of Debt Issuance Costs

 ( 764,934
)

 ( 654,765
)

 Total
 Other (Expense)

 ( 418,099
)

 ( 283,851
)

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

 ( 2,994,493
)

 1,257,261

 Provision (Benefit) for Income Taxes

)

 ( 719,172
)

 Net Income (Loss)

 $
)

 $

 Net Income (Loss) per Common Share

 Basic and diluted

 $
 ( 0.07

)

 $
 0.06

 Weighted Average Number of Common Shares Outstanding

 Basic and diluted

 32,366,725

 See
Notes to Consolidated Financial Statements.

 F- 4

 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

 FOR THE
YEARS ENDED DECEMBER 31, 2024 AND 2023

 Shares

 Amount

 Capital

 Earnings

 Total

 Additional

 Stock

 Paid-In

 Retained

 Shares

 Amount

 Capital

 Earnings

 Total

 Balances,
 January 1, 2023

 36,600,000

 $
 3,160

 $
 237,692

 $
 9,218,501

 $
 9,459,353

 Distributions

 ( 62,065
)

 ( 62,065
)

 Reverse Capitalization, Net of Transaction costs

 5,088,266

 1,689,512

 -

 1,690,021

 Net Income

 -

 -

 Balances, December 31, 2023

 3,669

 1,927,204

 11,132,870

 13,063,743

 Balance

 3,669

 1,927,204

 11,132,870

 13,063,743

 Stock-Based Compensation

 -

 -

 450,000

 -

 450,000

 Net
 Loss

 -

 -

)

)

 Net
 Income Loss

 -

 -

)

)

 Balances,
 December 31, 2024

 $
 3,669

 $
 2,377,204

 $
 8,653,209

 $
 11,034,082

 Balance

 $
 3,669

 $
 2,377,204

 $
 8,653,209

 $
 11,034,082

 See
Notes to Consolidated Financial Statements.

 F- 5

CONSOLIDATED STATEMENTS OF CASH FLOWS

 FOR THE
YEARS ENDED DECEMBER 31, 2024 AND 2023

 2024

 2023

 Cash
 Flows From Operating Activities

 Net
 (Loss) Income

 $
)

 $

 Adjustments
 to Reconcile (Loss) Income to Net Cash (Used In)

 Provided
 By Operating Activities:

 Adjustments
 to Reconcile (Loss) Income to Net Cash (Used In) Provided
 By Operating Activities:

 and Amortization

 2,765,713

 2,769,284

 Amortization
 of Debt Issuance Costs

 15,057

 12,451

 Stock-Based Compensation

 450,000

 -

 Grant
 Revenue Income

 -

 ( 300,000
)

 Gain
 on Disposal of Property and Equipment

 ( 309,000
)

 -

 Change
 in Allowance for Expected Credit Losses

 ( 121,767
)

 ( 25,820
)

 Change
 in Reserve for Obsolescence

 186,285

 124,911

 Income Taxes

)

 ( 1,199,214
)

 (Increase)
 Decrease in:

 Receivable

 1,182,626

 ( 848,520
)

 ( 1,305,454
)

 ( 2,332,660
)

 Prepaid
 Expenses and Other Assets

 ( 237,146
)

 340,298

 Increase
 (Decrease) in:

 Payables and Accrued Expenses

 ( 231,163
)

 2,493,826

 Income Tax Payable

 ( 380,000

)

 129,328

 Revenue

 36,512

 ( 348,095
)

 Net
 Cash (Used In) Provided By Operating Activities

 ( 942,830
)

 2,792,222

 Cash
 Flows From Investing Activities

 Purchases
 of Property and Equipment

 ( 1,239,866
)

 ( 1,921,181
)

 Proceeds
 from Disposal of Property and Equipment

 309,000

 -

 Net
 Cash Used in Investing Activities

 ( 930,866
)

 ( 1,921,181
)

 Cash
 Flows From Financing Activities

 (Repayments)
 Borrowing on Line of Credit, Net

 ( 273,729
)

 137,592

 Borrowing on Debt Obligations

 1,100,388

 1,745,573

 Repayments
 on Debt Obligations

 ( 420,802
)

 ( 2,908,502
)

 Repayments
 on Finance Lease Obligations

 ( 91,619
)

 -

 Cash
 proceeds from OLIT

 -

 45,946

 Net
 proceeds from OLIT Trust

 -

 1,802,479

 Distributions

 -

 ( 62,065
)

 Net
 Cash Provided By Financing Activities

 314,238

 761,023

 Net
 Decrease in Cash

 ( 1,559,458
)

 1,632,064

 Cash
 - Beginning

 526,182

 Cash
 - Ending

 $
 598,787

 $

 Supplemental
 Cash Flow Disclosures:

 Cash
 Paid for Interest

 $
 738,010

 $
 652,778

 Cash
 Paid for Taxes

 $
 568,143

 $
 283,561

 Supplemental
 Disclosures of Non-Cash Investing Activities:

 Acquired and Included in Accounts Payable and Accrued Expenses

 $
 198,584

 $
 642,547

 Issuance of finance lease for acquisition of equipment

 $
 2,160,070

 $
 -

 De-recognition of PPE and Intangible Asset transaction

 $
 560,000

 $
 -

 See
Notes to Consolidated Financial Statements.

 F- 6

 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.

 On
November 7, 2023, a merger transaction between OmniLit Acquisition Corporation ("OLIT"), Syntec Optics, Inc. ("Legacy
Syntec"), and Optics Merger Sub, Inc. ("Merger Sub") was completed pursuant to which Merger Sub was merged with and
into Legacy Syntec, with Legacy Syntec surviving the merger. As a result of the merger, Legacy Syntec became a wholly owned subsidiary
of New Syntec.

 Although
New Syntec was the legal acquirer of Legacy Syntec in the merger, Legacy Syntec is deemed to be the accounting acquirer, and the historical
financial statements of Legacy Syntec became the basis for the historical financial statements of New Syntec upon the closing of the
merger. New Syntec together with its wholly owned subsidiary, Syntec Optics, Inc., is referred to hereinafter as the "Company."

 Furthermore,
the historical financial statements of Legacy Syntec became the historical financial statements of the Company upon the consummation
of the merger. As a result, the financial statements included in this Quarterly Report reflect (i) the historical operating results of
Legacy Syntec prior to the merger; (ii) the combined results of OLIT and Legacy Syntec following the close of the merger; (iii) the assets
and liabilities of Legacy Syntec at their historical cost and (iv) the Legacy Syntec's equity structure for all periods presented,
as affected by the recapitalization presentation after completion of the merger.

 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
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 $ 2.3
million and $ 2.1
million and total liabilities consisting of current
liabilities and long-term debt of $ 1.8
million and $ 0.7
million as of December 31, 2024 and 2023, respectively.
ELR had net income of $ 0.2
million and $ 0.4
million for the years ended December 31, 2024
and 2023.

 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- 7

 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, 2024 and 2023 there were amounts due from three customers that totaled approximately 54 %
and 67 %
respectively, of accounts receivable. The outstanding accounts receivable due from these customers at December 31, 2024 and 2023 were
approximately $ 3.2 million and $ 4.5
million respectively.

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, 2024 and 2023 amounted to approximately $ 117 thousand and $ 239 thousand, respectively. The Company had no significant
write offs in the current or prior year. The Company evaluates the receivables by portfolio segment including the general receivables
and those identified for separate treatment. Losses on general receivables are estimated at historical losses amounting to 0.03% for
under 30 days, 0.05% for 30-60 days, 1.03% for 60-90 days, and 10.2% for over 90 days aged. Balances identified for special treatment
are evaluated individually.

 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.

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

of Property and Equipment Estimated Useful Lives

 Years

 Machinery
 and Equipment

 Building
 and Leasehold Improvements

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

 Office
 Furniture and Equipment

 - 5

 Tooling

 - 10

 Vehicles

 Long-Lived

 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, 2024 and 2023, no impairment charges were recorded.

 F- 8

 NOTES

 Note
1 Nature of Business and Significant Accounting Policies - Continued

 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-cancellable 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 right of use ("ROU") assets or lease liabilities 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.

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 a contra liability 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, 2024 and 2023 were approximately
$ 229 thousand and
$ 188 thousand,
respectively.

 F- 9

 NOTES

 Note
1 Nature of Business and Significant Accounting Policies - Continued

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 does not have any material unrecognized tax benefit as of December 31, 2024 or 2023.
The Company recognizes interest accrued and penalties related to unrecognized tax benefits in tax expense. During the years ended December
31, 2024 and 2023, the Company recognized no interest and penalties. The Company files U.S. federal tax returns and tax returns in various
states.

(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, 2024 and 2023.

 Stock-Based
Compensation

 The Company recognizes stock-based compensation expense for equity awards, such as restricted stock units, in accordance
with ASC 718. Equity-classified awards are measured at grant-date fair value and expensed over the service period.

 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- 10

 NOTES

 Note
1 Nature of Business and Significant Accounting Policies - Continued

 Recently
Adopted Accounting Pronouncements

 In
November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU
2023-07 clarifies or improves financial reporting by requiring disclosure of incremental segment information. The amendments require
disclosure, on an annual and interim basis for all public entities, of significant segment expenses included in segment profit or
loss, an amount and description of "other segment items" included in segment profit or loss, and an explanation of how
reported segment profit or loss is assessed and allocated. The amendments in ASU 2023-07 are effective for fiscal years beginning
after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. See
note 18 for more details.

 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. ASU 2023-09 will be applied prospectively with the option for retrospective application for
all prior periods presented. The Company is currently evaluating the impact of adopting this guidance on the Company's current
financial position, results of operations or financial statement disclosures.

 In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive
Income-Expense Disaggregation Disclosures (Subtopic
220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"). ASU
2024-03 requires additional disclosure of specific types of expenses included in the expense captions presented on the face of the income
statement as well as disclosures about selling expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026,
and interim periods beginning after December 15, 2027, with early adoption permitted. ASU 2024-03 may be applied prospectively with the
option for retrospective application for all prior periods presented. The Company is currently evaluating the impact of adopting this
guidance on the Company's current financial position, results of operations or financial statement disclosures.

 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,
("Custom Tooling") and (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- 11

 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 December 31, 2024 and 2023 was $ 5.7 million and $ 6.8 million
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 December 31, 2024
and 2023 were $ 0.04 million - and
$ 0, respectively.

 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, 2024 or 2023.

 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

 2024

 2023

 Products

 $
 27,663,086

 $
 25,736,915

 Custom
 Tooling

 536,668

 1,382,620

 Non-Recurring
 Engineering

 250,187

 2,321,645

 Total

 $
 28,449,941

 $
 29,441,180

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:

 2024

 2023

 Communication

 $
 8,036,808

 $
 7,026,621

 Consumer

 4,655,954

 5,321,371

 Defense

 6,507,553

 7,457,372

 Medical

 9,249,626

 9,635,816

 Total

 $
 28,449,941

 $
 29,441,180

 The Company has one significant customer located
in the UK (outside of the US). Sales for this UK customer amounted to $ 4.8
million in 2023 and $ 4.9
million in 2024. No
other significant sales were outside of the US.

 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- 12

 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

 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)

 31,600,000

 Total
 shares of common stock immediately after the merger

 (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.

 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- 13

 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. 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;
(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
accounting treatment of the Contingent Earnout Shares have been recognized at fair value upon the closing of the merger and classified
in stockholders' equity.

 Note
4 Inventory

consists of the following at December 31:

of Inventory

 2024

 2023

 Raw
 Materials

 $
 487,405

 $
 1,144,322

 Work-in-Process

 6,815,425

 4,818,156

 Finished
 Goods

 153,353

 188,251

 gross

 7,456,183

 6,150,729

 Less:
 Reserve for Obsolescence

 502,905

 316,620

 $
 6,953,278

 $
 5,834,109

 The
Company experienced a significant increase in the Reserve for Obsolescence due to incremental risk in one particular customer which was
assessed at a higher rate because of market instability.

 F- 14

 NOTES

 Note
5 Property and Equipment

and equipment consists of the following at December 31:

of Property and Equipment

 2024

 2023

 Machinery
 and Equipment

 $
 34,430,556

 $
 32,466,641

 Building
 and Leasehold Improvements

 5,483,616

 5,096,436

 Land

 130,000

 130,000

 Office
 Furniture and Equipment

 2,295,749

 2,292,995

 Tooling

 163,381

 103,310

 Vehicles

 24,059

 24,059

 Not Placed in Service

 -

 260,000

 and Equipment, Gross

 42,527,361

 40,373,441

 Less: Accumulated

 30,858,502

 29,272,389

 and Equipment, Net

 $
 11,668,859

 $
 11,101,052

expenses were approximately $ 2,766,000 and
$ 2,769,000 for
the years ended December 31, 2024 and 2023, respectively.

 F- 15

 NOTES

 Note
6 Line of Credit

 The
Company has a line of credit available in the amount of $ 8,000,000.
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, 2024 was 7.63 %.
As of December 31, 2024 and 2023, the Company had $ 6,263,863 and $ 6,537,592,
respectively, outstanding under the line of credit facility.

 The
Credit Agreement contains 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 September 30, 2024, the Company was not in compliance with the
minimum fixed charge coverage ratio and maximum total leverage ratio as defined in the Credit Agreement. On November 12, 2024, the Company
obtained a waiver with respect to the Credit Agreement, pursuant to which the sections of the agreement mentioned above are waived for
the period ending September 30, 2024.

 As
the result of defaults on the loan covenant calculations for the quarterly periods ended June 30, 2024 and September 30, 2024, on
November 29, 2024, the Company's credit agreement dated November 8, 2023 was amended. The bank waived certain criteria,
including a minimum fixed charge coverage ratio and a maximum total leverage ratio, subject to certain modifications of the
agreement, specifically, a reduction of the revolving line of credit to $ 8,000,000 and
a reduction of the equipment loan amount to $ 3,000,000.
As a result of these reduced credit limits the company reduced the size of the deferred financing costs. The modified interest
margin rate margin was adjusted to 3.00 %. The
leverage ratio was modified to be no greater than 5.25 for 1Q 2025, no greater than 5.0 for 2Q 2025, no greater than 4.75 for 3Q
2025, no greater than 4.25 for 4Q 2025, and no greater than 3.50 after that. The fixed charge ratio was suspended for 1Q 2025 and no
less than 1.10 to 1.00 after that. As of
December 31, 2024, the Company was not in compliance with the loan covenants and received a waiver letter from the lender, dated
March 21, 2025.

 F- 16

 NOTES

 Note
 7 Long-Term Debt

 Long-term
debt consists of the following at December 31, 2024 and 2023:

of Long Term Debt Maturities

Debt Maturities

 2024

 2023

 The
 Company entered into a $ 863,607 mortgage note payable, securitized by the Company's real estate and cross-collateralized with all Company assets, with M&T Bank, requiring monthly installments of $ 7,389, including interest
 at a fixed rate of 6.13 %. The note matures in February 2029.

 836,815

 -

 The
 Company entered into a $ 236,781 term note payable with M&T Bank, requiring monthly principal installments of $ 3,385, plus interest
 at a fixed rate of 6.05 %. The note matures in March 2029.

 205,829

 -

 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 a fixed rate of 6.59 %. The note matures in November 2028.

 1,436,662

 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.

 668,006

 718,441

 Total
 Long-Term Debt

 3,147,312

 2,441,067

 Less:
 Unamortized Debt Issuance Costs

 64,758

 53,156

 Debt, Less Unamortized Debt Issuance Costs

 3,082,554

 2,387,911

 Less:
 Current Maturities

 467,742

 362,972

 Debt

 $
 2,614,812

 $
 2,024,939

 At
December 31, 2024, the future debt maturities are as follows:

of Long Term Future Debt Maturities

 December
 31, 2025

 $
 468,610

 2026

 497,991

 2027

 529,309

 2028

 492,667

 2029

 117,248

 Thereafter

 1,041,487

 Total

 $
 3,147,312

 F- 17

 NOTES

 Note
8 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, 2024 and 2023 amounted to $ 196,198
and $ 179,970, respectively.

 Note
9 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

 2024

 2023

 Current:

 $
 -

 $
 407,485

 State

 -

 72,557

 Total
 current income taxes

 -

 480,042

 Non - current:

 $
)

 $
 ( 1,199,214
)

 State

 Tax (Benefit) Provision

)

 ( 1,199,214
)

 Total

 $
)

 $
 ( 719,172
)

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

 2024

 2023

 Tax Assets (Liabilities):

 NYS Investment Tax Credit

 $
 1,565,784

 $
 1,402,438

 MA R&D Credit

 684,621

 628,371

 Lease Liability

 434,052

 -

 Allowance
 for Current Expected Credit Losses

 24,602

 55,732

 Net Operating Loss

 241,766

 -

 Unamortized
 Startup Costs

 400,371

 476,876

 Amortization
 on Intangibles

 Section
 174 Capitalization

 1,032,715

 1,100,698

 Reserve

 105,610

 73,857

 Accrued Management Fees

 -

 -

 Accrued
 Vacation

 15,003

 16,905

 Business Interest Limitation

 134,976

 -

 Valuation
 Allowance

 ( 2,250,405
)

 ( 2,030,809
)

 Tax Assets

 2,389,795

 1,724,845

 Tax Liabilities:

 -

 -

 Right of Use Asset

 ( 456,550

)

 -

 ( 1,493,303
)

 ( 1,799,735
)

 Tax Liabilities:

 ( 1,949,853
)

 ( 1,799,735
)

 Tax Assets (Liabilities), Net

 $
 439,942

 $
 ( 74,890
)

 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

 2024

 2023

 Statutory
 Income Tax Rate

 21.00
 %

 21.00
 %

 Increase
 (Decrease) In Tax Provision Resulting From:

 State
 Income Taxes, Net of Federal Benefit

 0.00
 %

 11.79
 %

 Special Deductions

 ( 0.80
)%

 ( 7.05
)%

 Credits

 0.00
 %

 ( 39.28
)%

 Tax Prior Year (Over) Under Accrual

 0.00
 %

 ( 20.05
)%

 State
 Tax Rate Change

 0.00
 %

 18.22
 %

 State
 Tax Credits

 8.65
 %

 ( 29.33
)%

 State
 Deferred Taxes

 0.00
 %

 ( 15.62
)%

 Change
 in Valuation Allowance

 ( 8.65
)%

 ( 25.32
)%

 Transaction
 Costs

 0.00
 %

 2.49
 %

 Pass
 Through Entity

 0.29
 %

 25.09
 %

 Other,
 Net

 ( 0.22
)%

 0.87
 %

 Effective Tax Rate

 20.28
 %

 ( 57.20
)%

 The
tax returns of the Company are open for three years from the date of filing. At the report date, the statute of limitations for federal
and state tax returns are open for the Company for 2023, 2022, and 2021.

 The Company has federal and state net operating loss carryforwards
totaling approximately $ 1.151 million at December 31, 2024. 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- 18

 NOTES

 Note
9 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, among 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 $ 2,250,405 and $ 2,030,809 at December 31, 2024 and
2023, 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, 2024, the Company has $ 1,565,784 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 $ 684,621 of Massachusetts State Research and Development credit carryforwards, expiring in various
years through 2037 that the Company has recorded a valuation allowance against.

 Note
10 Leases

 During
2024, the Company entered into lease agreements for equipment utilized in its manufacturing facility. The Company has determined
that the lease agreements are finance leases. There is a $ 1 buyout option at the end of the lease term which makes it reasonably certain that the Company will exercise this option and purchase the machinery and the details of the purchase
option are in line with the criteria of a finance lease.

 The ROU asset is grouped with
property and equipment. The asset is amortized on a straight-line basis over the life of the underlying asset rather than
the lease term due to the purchase options in the lease. The amortization expense is grouped with the depreciation expense of
the Company's other property and equipment. The initial recognition of the finance lease liability was recorded based on the
present value of future payments. The interest expense is calculated using the incremental borrowing rate of the Company, and is
grouped in the interest expense line on the statement of operations.

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

 Schedule of Operating Lease and Finance Lease Costs

 2024

 2023

 lease cost

 $
 -

 $
 -

 Finance
 Lease Cost:

 Amortization
 of assets

 126,343

 -

 Interest
 on liabilities

 66,454

 -

 Total
 lease cost

 $
 192,797

 $
 -

 There
were no variable payments or material short-term rentals for the years ended December 31, 2024 and 2023.

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

 Schedule of Cash Flow Information Related To Leases

 2024

 2023

 Cash
 paid for amounts included in measurement of lease obligations:

 cash flows from operating leases

 $
 -

 $
 15,532

 cash flows from finance leases

 66,454

 -

 Financing
 cash flows from finance leases

 95,080

 -

 F- 19

 NOTES

 Note
10 Leases – Continued

 The
following table summarizes weighted average remaining lease term and discount rates as of December 31, 2024 and 2023:

 Schedule of Weighted Average Remaining Lease Term

 2024

 2023

 Weighted
 average remaining lease term (years)

 leases

 0 n/a

 0 n/a

 Finance
 leases

 5.00

 N/A

 Weighted average
 discount rate

 leases

 0 n/a

 0 n/a

 Finance
 leases

 8.4
 %

 N/A

 Future
maturities of our lease liabilities are as follows as of December 31:

 Schedule of Future Maturities of Lease Liabilities

 2025

 $
 432,009

 2026

 513,525

 2027

 513,525

 2028

 513,525

 2029

 513,524

 Thereafter

 -

 Total
 Undiscounted Lease Obligations

 2,486,108

 Less:
 Imputed Interests

 417,657

 Present
 Value of Lease Obligations

 $
 2,068,451

 Note
11 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, 2024
and 2023, the management fee expense was $- 0 - and $ 318,334 respectively. As of December 31, 2024 and 2023, unpaid management fees
to the majority stockholder amounted to $- 0 - and $- 0 -.

 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, 2024 and 2023.

 Note
12 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, 2024.

 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, 2024 to December 31, 2024:

 Schedule of Warrant

 Stock Warrants

 outstanding, January 1, 2024

 exercised

 -

 Assumed
 in merger

 Exercised
 subsequent to merger

 -

 outstanding, December 31, 2024

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

 Stock Warrants

 **Warrants outstanding,
 January 1, 2023

 -

 Assumed
 in merger

 Exercised
 subsequent to merger

 -

 outstanding, December 31, 2024

 **

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

 F- 20

 NOTES

 Note
13 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 both December 31, 2024 and
2023, there were 36,688,266
 shares issued and outstanding retroactively adjusted
and no dividends on common stock had been declared by the Company.

 As
of December 31, 2024 and 2023, the Company had reserved shares of common stock for issuance as follows:

 Schedule of Reserved Shares of Common Stock

 2024

 2023

 stock outstanding

 outstanding

 Contingent earnout
 shares

 26,000,000

 26,000,000

 Shares
 available for future issuance (1)

 4,773,971

 4,773,971

 Total

 81,570,226

 81,570,226

 (1)

 Refer
 to Stock Incentive Plan Note 14

 Note
14 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 could become available for issuance under
the 2023 Incentive Plan.

 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,
to be issued as restricted stock units or incentive equity grants pursuant to the Incentive Plan. 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 statements. No such awards have been made as of December 31, 2024.

 As
of December 31, 2024, there were 4,542,011 shares of unissued authorized and available for future awards under the plans.

 On December 20, 2024, at the Company's
annual stockholders meeting, the stockholders approved authorizing the grant of restricted stock units ("RSUs") to the Company's
non-employee directors. As a result, the three non-employee directors were granted a total of $ 450,000
in RSUs. These RSUs were fully vested upon grant and amounted to a total of 231,960 shares based on a grant date fair value of $1.94 per share, the closing price
on December 19, 2024.

 In accordance with ASC 718,
Compensation—Stock Compensation, the Company determined that the grant date for these awards was December 20, 2024, the date of
stockholder approval. The total compensation expense of $ 450,000 was recognized in selling, general, and administrative expenses in the
Company's consolidated statement of operations for the year ended December 31, 2024, with a corresponding credit to additional paid-in
capital – stock compensation. The impact on cash flows is reflected in the operating section of our cash flow statement.

 The RSUs will be settled by the
issuance of common shares under the Company's 2023 Equity Incentive Plan. Although the shares were not issued until the first
quarter of 2025, the shares were granted in 2024 and such subsequent issuance represents only a reclassification within equity (to
common stock at par value and additional paid-in capital in excess of par).

 F- 21

 NOTES

 Note
15 Income (Loss) Per Common Share

 The
following table sets forth the information needed to compute basic and diluted (loss) earnings per common share for the years ended
December 31, 2024 and 2023:

 Schedule of Basic And Diluted (Loss) Earnings Per Share

 2024

 2023

 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

 $
 ( 0.07
)

 $
 0.06

 Note
16 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
17 Significant Customers

 For
the years ended December 31, 2024 and 2023, the Company generated 48 %
and 67 % respectively of revenues from the
same three customers in each year. 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 $ 3,188,832 and
$ 4,506,000,
respectively.

 Note
18 Segment reporting

 The
Company operates as one operating segment. The Company's chief operating decision maker ("CODM") is its Chief
Executive Officer, who reviews the financial statements on a consolidated basis. The CODM uses the Company's long-range plan
to allocate resources. The CODM makes decisions on resource allocation, assessments of performance, and monitors budget versus
actual results using consolidated loss from operations.

 Significant expenses within loss from operations,
as well as within net loss, include general and administrative expenses, and other expenses which are each separately presented on the
Company's Consolidated Statements of Operations and Comprehensive Loss.

 Note
19 Subsequent Event

 On
March 21, 2025, a board member resigned from his position as the Board of Directors (the "Board") of Syntec Optics
Holdings, Inc. (the "Company"). His resignation was due to a disagreement with the Company on matters relating to the
Company's operation, policies and practices. The resignation was accepted by the Board on March 25, 2025. Subsequently, Syntec
Optics signed an agreement with the executive which included a mutual release, the cost of which was accrued into the 2024
Form 10-K effective December 31, 2024 in the amount of $ 0.2 million.

 On
April 16, 2025, Syntec received a Delinquency Compliance Plan Alert letter from NASDAQ because Syntec missed the filing deadline for
its 2024 10-K. On May 9, 2025, the Company received a letter from NASDAQ requesting certain information regarding its 8-K and
8-K(A) filings. This information was provided to NASDQ on May 25, 2025. On May 28, 2025, the Company received an additional delinquency
submission letter from NASDAQ because the Company missed the deadline to file its 10-Q for quarter ending March 31, 2025. Both delinquency
letters required that Syntec provide a recover plan for review by NASDAQ by June 16, 2025. The Company filed this plan and the plan
was accepted by NASDAQ.

 On
July 4, 2025, the One Big Beautiful Bill Act, commonly referred to as "OBBBA", was signed into law as Public Law No. 119-21,
enacting sweeping reforms to domestic and international taxation. This legislation includes several provisions of significance to domestic
manufacturing companies with R&D expenditures:

 OBBBA
restores full immediate tax deductibility for domestic research and experimental expenses incurred in 2025 and beyond. This reverses
the five-year amortization requirement previously mandated under the Tax Cuts and Jobs Act. The law also permits taxpayers to accelerate
unamortized domestic R&D expenditures incurred from January 1, 2022, through December 31, 2024, over one or two years, potentially
resulting in adjustments to prior-year tax filings.

 The
law enshrines 100% first-year bonus depreciation for qualified tangible personal property placed into service after January 19, 2025,
including qualified production property (QPP) used in manufacturing facilities, potentially offering accelerated write-offs of capital
investments.

 Under
U.S. GAAP, R&D costs incurred are expensed as incurred per ASC 730. The immediate tax expensing afforded by OBBBA may reduce book-tax
timing differences, simplify tax accounting, and align taxable income more closely with reported financial results.

 OBBBA
is expected to create favorable opportunities to accelerate tax benefits associated with R&D expenditures and capital investment.
The Company is currently evaluating the law and will estimate potential future tax impacts, including (i) accelerated research tax credits,
(ii) possible impacts to deferred tax assets, and (iii) potential adjustments to recent tax returns to take advantage of retroactive
provisions. While the impact on financial results is not currently considered material, management continues to assess the overall effect
on our tax position, effective tax rate projections, and cash flows.

 F- 22