Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

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

For the transition period from ___________ to ____________

Commission file number 000-27548

LIGHTPATH TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

Delaware		86-0708398
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

2603 Challenger Tech Ct. Suite 100

Orlando, Florida 32826

(Address of principal executive offices)

(ZIP Code)

(407) 382-4003

(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
Class A Common Stock, par value $0.01		LPTH		The Nasdaq Stock Market, LLC

_______________________________

Indicate 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 ☐

Indicate 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 (§232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files).

Yes ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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 ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

37,469,716 shares of Class A common stock, $0.01 par value, outstanding as of November 6, 2023.

LIGHTPATH TECHNOLOGIES, INC.

Form 10-Q

Index

Item		Page

Cautionary Note Concerning Forward-Looking Statements		3

Part I	Financial Information

Item 1	Financial Statements
	Unaudited Condensed Consolidated Balance Sheets	4
	Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)	5
	Unaudited Condensed Consolidated Statement of Changes in Stockholders’ Equity	6
	Unaudited Condensed Consolidated Statements of Cash Flows	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
	Results of Operations	26
	Liquidity and Capital Resources	28
	Contractual Obligations and Commitments	30
	Off-Balance Sheet Arrangements	30
	Critical Accounting Policies and Estimates	30
	Non-GAAP Financial Measures	33
Item 4	Controls and Procedures	33

Part II	Other Information

Item 1	Legal Proceedings	34
Item 1A	Risk Factors	34
Item 2	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities
Item 3	Defaults Upon Senior Securities	34
Item 4	Mine Safety Disclosures	34
Item 5	Other Information	34
Item 6	Exhibits	35

Signatures		37

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CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS

Certain statements and information in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 (the “Quarterly Report”) may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, which address activities, events, or developments that we expect or anticipate will or may occur in the future, including such things as future capital expenditures, growth, product development, sales, business strategy, statements related to the actual and potential effects on our business from the coronavirus (“COVID-19”) pandemic or rising inflation and interest rates, and other similar matters are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” or other comparable terminology. These forward-looking statements are based largely on our current expectations and assumptions and are subject to a number of risks and uncertainties, many of which are beyond our control. These statements are subject to many risks, uncertainties, and other important factors that could cause actual future results to differ materially from those expressed in the forward-looking statements including, but not limited to, the continued duration and scope of the COVID-19 pandemic and any impact on the demand for our products; our ability to obtain needed raw materials and components from our suppliers; additional actions governments, businesses, and individuals take in response to the pandemic, including mandatory business closures and restrictions on onsite commercial interactions, particularly at our foreign facilities; the impact of the pandemic and actions taken in response to the pandemic on global and regional economies and economic activity; general economic uncertainty in key global markets and a worsening of global economic conditions or low levels of economic growth; geopolitical tensions, the Russian-Ukraine conflict, and the Hamas/Israel war; the effects of steps that we could take to reduce operating costs; rising inflation and increased interest rates, which diminish capital market cash flow and borrowing power; our inability to sustain profitable sales growth, convert inventory to cash, or reduce our costs to maintain competitive prices for our products; circumstances or developments that may make us unable to implement or realize the anticipated benefits, or that may increase the costs, of our current and planned business initiatives; and those factors detailed by us in our public filings with the Securities and Exchange Commission (the “SEC”), including in Item 1A, Risk Factors, in our Annual Report on Form 10-K for the year ended June 30, 2023. In light of these risks and uncertainties, all of the forward-looking statements made herein are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by us will be realized. We undertake no obligation to update or revise any of the forward-looking statements contained herein.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

LIGHTPATH TECHNOLOGIES, INC.
Condensed Consolidated Balance Sheets
(unaudited)
	September 30,			June 30,
Assets	2023			2023
Current assets:
Cash and cash equivalents	$	4,316,965		$	4,687,004
Restricted cash		2,542,993			2,457,486
Trade accounts receivable, net of allowance of $21,089 and $18,502		5,024,024			6,634,574
Inventories, net		7,503,496			7,410,734
Prepaid expenses and other assets		558,204			570,293
Other receivables		27,083			—
Total current assets		19,972,765			21,760,091

Property and equipment, net		15,593,252			12,810,930
Operating lease right-of-use assets		7,571,878			9,571,604
Intangible assets, net		3,051,444			3,332,715
Goodwill		8,915,637			5,854,905
Deferred tax assets, net		140,000			140,000
Other assets		67,773			65,939
Total assets	$	55,312,749		$	53,536,184
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,907,279		$	2,574,135
Accrued liabilities		1,740,083			662,242
Accrued payroll and benefits		1,478,250			1,499,896
Operating lease liabilities, current		1,016,940			969,890
Loans payable, current portion		1,269,340			1,023,814
Finance lease obligation, current portion		112,352			103,646
Total current liabilities		8,524,244			6,833,623

Deferred tax liabilities, net		467,979			465,000
Accrued liabilities, noncurrent		1,075,000			—
Finance lease obligation, less current portion		340,716			341,201
Operating lease liabilities, noncurrent		8,773,442			8,393,248
Loans payable, less current portion		1,236,633			1,550,587
Total liabilities		20,418,014			17,583,659

Commitments and Contingencies

Stockholders’ equity:
Preferred stock: Series D, $0.01 par value, voting; 500,000 shares authorized; none issued and outstanding		—			—
Common stock: Class A, $0.01 par value, voting; 44,500,000 shares authorized; 37,455,438 and 34,344,739 shares issued and outstanding		374,554			373,447
Additional paid-in capital		243,217,458			242,808,771
Accumulated other comprehensive income		481,328			606,536
Accumulated deficit		(209,178,605	)		(207,836,229	)
Total stockholders’ equity		34,894,735			35,952,525
Total liabilities and stockholders’ equity	$	55,312,749		$	53,536,184

The accompanying notes are an integral part of these condensed consolidated financial statements.

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LIGHTPATH TECHNOLOGIES, INC.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(unaudited)

	Three Months Ended
	September 30,
	2023			2022
Revenue, net	$	8,077,248		$	7,366,901
Cost of sales		5,745,542			5,132,989
Gross margin		2,331,706			2,233,912
Operating expenses:
Selling, general and administrative		2,661,168			2,638,173
New product development		639,889			549,881
Amortization of intangibles		281,271			281,271
Total operating expenses		3,582,328			3,469,325
Operating loss		(1,250,622	)		(1,235,413	)
Other income (expense):
Interest expense, net		(57,611	)		(70,370	)
Other income, net		5,403			27,217
Total other (expense), net		(52,208	)		(43,153	)
Loss before income taxes		(1,302,830	)		(1,278,566	)
Income tax provision		39,546			102,134
Net loss	$	(1,342,376	)	$	(1,380,700	)
Foreign currency translation adjustment		(125,208	)		(917,829	)
Comprehensive loss	$	(1,467,584	)	$	(2,298,529	)
Loss per common share (basic)	$	(0.04	)	$	(0.05	)
Number of shares used in per share calculation (basic)		37,431,748			27,070,949
Loss per common share (diluted)	$	(0.04	)	$	(0.05	)
Number of shares used in per share calculation (diluted)		37,431,748			27,070,949

The accompanying notes are an integral part of these condensed consolidated financial statements.

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LIGHTPATH TECHNOLOGIES, INC.
Condensed Consolidated Statements of Changes in Stockholders' Equity
(unaudited)
								Accumulated
	Class A				Additional			Other						Total
	Common Stock				Paid-in			Comphrehensive			Accumulated			Stockholders’
	Shares		Amount		Capital			Income			Deficit			Equity
Balances at June 30, 2023		37,344,739	$	373,447	$	242,808,771		$	606,536		$	(207,836,229	)	$	35,952,525
Issuance of common stock for:
Employee Stock Purchase Plan		14,607		146		19,573			—			—			19,719
Exercise of Stock Options, RSUs and RSAs, net		14,482		145		(145	)		—			—			—
Issuance of common stock for acquisition of Visimid		81,610		816		149,184			—			—			150,000
Stock-based compensation on stock options, RSUs and RSAs		—		—		240,075			—			—			240,075
Foreign currency translation adjustment		—		—		—			(125,208	)		—			(125,208	)
Net loss		—		—		—			—			(1,342,376	)		(1,342,376	)
Balances at September 30, 2023		37,455,438	$	374,554	$	243,217,458		$	481,328		$	(209,178,605	)	$	34,894,735

Balances at June 30, 2022		27,046,790	$	270,468	$	232,315,003		$	935,125		$	(203,789,358	)	$	29,731,238
Issuance of common stock for:
Employee Stock Purchase Plan		16,287		163		19,707			—			—			19,870
Exercise of Stock Options and RSUs, net		8,852		88		(88	)		—			—			—
Stock-based compensation on stock options and RSUs		—		—		284,598			—			—			284,598
Foreign currency translation adjustment		—		—		—			(917,829	)		—			(917,829	)
Net loss		—		—		—			—			(1,380,700	)		(1,380,700	)
Balances at September 30, 2022		27,071,929	$	270,719	$	232,619,220		$	17,296		$	(205,170,058	)	$	27,737,177

The accompanying notes are an integral part of these condensed consolidated financial statements.

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LIGHTPATH TECHNOLOGIES, INC.
Condensed Consolidated Statements of Cash Flows
(unaudited)
	Three Months Ended September 30,
	2023			2022
Cash flows from operating activities:
Net loss	$	(1,342,376	)	$	(1,380,700	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		813,556			816,334
Interest from amortization of debt costs		—			18,560
Stock-based compensation on stock options, RSUs & RSAs, net		240,075			284,598
Provision for doubtful accounts receivable		19			(12,452	)
Change in operating lease assets and liabilities		24,946			(43,531	)
Deferred taxes		2,979			(29,596	)
Changes in operating assets and liabilities:
Trade accounts receivable		1,399,160			639,725
Other receivables		(27,083	)		(82,391	)
Inventories		144,978			(20,282	)
Prepaid expenses and other assets		13,335			10,874
Accounts payable and accrued liabilities		(129,600	)		(616,494	)
Net cash provided by (used in) operating activities		1,139,989			(415,355	)

Cash flows from investing activities:
Purchase of property and equipment		(955,002	)		(243,393	)
Acquisition of Visimid Technologies, net of cash acquired		(572,141	)		—
Proceeds from sale-leaseback of equipment		364,710			—
Net cash used in investing activities		(1,162,433	)		(243,393	)

Cash flows from financing activities:
Proceeds from sale of common stock from Employee Stock Purchase Plan		19,719			19,870
Payments on loans payable		(206,518	)		(169,902	)
Repayment of finance lease obligations		(27,062	)		(37,079	)
Net cash used in financing activities		(213,861	)		(187,111	)
Effect of exchange rate on cash and cash equivalents		(48,227	)		(363,163	)
Change in cash, cash equivalents and restricted cash		(284,532	)		(1,209,022	)
Cash and cash equivalents and restricted cash, beginning of period		7,144,490			5,507,891
Cash, cash equivalents and restricted cash, end of period	$	6,859,958		$	4,298,869

Supplemental disclosure of cash flow information:
Interest paid in cash	$	58,397		$	48,803
Income taxes paid	$	33,407		$	140,756
Supplemental disclosure of non-cash investing & financing activities:
Purchase of equipment through finance lease arrangements	$	46,688			—

The accompanying notes are an integral part of these condensed consolidated financial statements.

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LIGHTPATH TECHNOLOGIES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

1. Basis of Presentation

References in this document to “the Company,” “LightPath,” “we,” “us,” or “our” are intended to mean LightPath Technologies, Inc., individually, or as the context requires, collectively with its subsidiaries on a consolidated basis.

These unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the requirements of Article 8 of Regulation S-X promulgated under the Exchange Act and, therefore, do not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with our Consolidated Financial Statements and related notes, included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023, filed with the SEC. Unless otherwise stated, references to particular years or quarters refer to our fiscal years ended June 30 and the associated quarters of those fiscal years.

These Condensed Consolidated Financial Statements are unaudited, but include all adjustments, including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly our financial position, results of operations and cash flows for the interim periods presented. The Consolidated Balance Sheet as of June 30, 2023 has been derived from the audited financial statements at that date but does not include all of the information and notes required by generally accepted accounting principles for complete financial statements. Results of operations for interim periods are not necessarily indicative of the results that may be expected for the year as a whole. The unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

2. Significant Accounting Policies

Our significant accounting policies are provided in Note 2, Summary of Significant Accounting Policies, in the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023. There have been no material changes to our significant accounting policies during the three months ended September 30, 2023, from those disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023.

Use of Estimates

Management makes estimates and assumptions during the preparation of our unaudited Condensed Consolidated Financial Statements that affect amounts reported in the unaudited Condensed Consolidated Financial Statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes available, which, in turn, could impact the amounts reported and disclosed herein.

3. Acquisition of Visimid Technologies

In July 2023, the Company acquired Liebert Consulting LLC, dba Visimid Technologies (“Visimid”), pursuant to a Membership Interest Purchase Agreement dated as of July 25, 2023 (the “Acquisition Date”).

Part of the Company’s growth strategy is to identify appropriate opportunities that would enhance our profitable growth through acquisition. Visimid is an engineering and design firm specializing in thermal imaging, night vision and internet of things (“IOT”) applications. Visimid provides design and consulting services for Department of Defense (“DoD”) contractors, commercial and industrial customers, and OEMs for original new products. Visimid’s core competency is developing and producing custom thermal and night vision cores. We believe that Visimid’s capabilities are aligned with our strategy to focus on engineered solutions.

The Company’s unaudited condensed consolidated financial statements reflect the financial results of Visimid beginning on the Acquisition Date. The purchase price included $1 million in cash, $1,550,000 of restricted stock, $150,000 of assumed bank debt, and an earnout which is contingent upon the award and completion of a specific customer contract. Of the restricted stock payable as part of the purchase price, $150,000 (81,610 shares) was issued at closing, with the balance to be issued on four equal installments of $350,000 each on January 1, 2024, July 1, 2024, January 1, 2025 and July 1, 2025. The number of shares is based on the average closing price of the Company’s Class A common stock, as reported by Bloomberg, for the five trading days prior to each stock issuance.

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The total purchase price, net of cash acquired and including the estimated potential earnout, is approximately $2.9 million. Of this amount, $600,000 was paid at closing and the remaining cash and stock payments, including the estimated potential earnout, have been accrued and are included in Accrued liabilities and Accrued liabilities, noncurrent in the accompanying unaudited Condensed Consolidated Balance Sheet as of September 30, 2023.

The estimated fair values of the assets acquired and liabilities assumed were recorded as of the Acquisition Date. The Company is in the process of obtaining third-party valuations of certain intangible assets; thus, the provisional measurements of intangible assets, goodwill and deferred income tax assets are subject to change.

For the three months ended September 30, 2023, the Company incurred approximately $83,000 in acquisition costs which are included in the unaudited Condensed Consolidated Statements of Comprehensive Income in the line item entitled “Selling, general and administrative.” This is in addition to the previously disclosed $140,000 in acquisition costs which were recorded during the three months ended June 30, 2023.

Prior to the Acquisition, the Company had a preexisting relationship with Visimid. The Company contracted Visimid for engineering services and purchased infrared camera cores from Visimid on an arms’ length basis. The Company had also partnered with Visimid for the development of the Mantis camera.

4. Revenue

Product Revenue

We are a manufacturer of optical components and higher-level assemblies, including precision molded glass aspheric optics, molded and diamond-turned infrared optical components, and other optical materials used to produce products that manipulate light. We design, develop, manufacture, and distribute optical components and assemblies utilizing advanced optical manufacturing processes. We also provide engineering services and perform research and development for optical solutions for a wide range of optics markets. Revenue is derived primarily from the sale of optical components and assemblies.

Revenue Recognition

Revenue is generally recognized upon transfer of control, including the risks and rewards of ownership, of products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. We generally bear all costs, risk of loss, or damage and retain title to the goods up to the point of transfer of control of products to customers. Shipping and handling costs are included in the cost of goods sold. We present revenue net of sales taxes and any similar assessments.

Customary payment terms are granted to customers, based on credit evaluations. We currently do not have any contracts where revenue is recognized, but the customer payment is contingent on a future event. We record deferred revenue when cash payments are received or due in advance of our performance. Deferred revenue was not significant as of September 30, 2023 and June 30, 2023, respectively.

Nature of Products

Revenue from the sale of optical components and assemblies is recognized upon transfer of control, including the risks and rewards of ownership, to the customer. The performance obligations for the sale of optical components and assemblies are satisfied at a point in time. Product development agreements for engineering services are generally short-term in nature, with revenue recognized upon satisfaction of the performance obligation, and transfer of control of the agreed-upon deliverable.

We previously organized our products in three groups: precision molded optics (“PMO”), infrared, and specialty products. Revenues from product development agreements for engineering services were included in specialty products. With our strategic transition into more value-added solutions, and the addition of Visimid in July 2023, we reorganized our products into four product groups: infrared components, visible components, assemblies and modules, and engineering services. Assemblies and modules were previously included in PMO, infrared or specialty products, depending on the lens type.

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Revenue by product group for the three months ended September 30, 2023 and 2022 was as follows, with 2022 amounts reclassified from those previously reported to conform to current classification:

	Three Months Ended September 30,
	2023		2022
Infrared components	$	3,834,602	$	3,189,551
Visible components		2,688,335		3,267,658
Assemblies and modules		1,262,039		870,732
Engineering services		292,272		38,960
Total revenue	$	8,077,248	$	7,366,901

5. Inventories

The components of inventories include the following:

	September 30, 2023			June 30, 2023
Raw materials	$	3,125,473		$	2,999,879
Work in process		2,783,997			2,909,439
Finished goods		2,855,851			2,626,106
Allowance for obsolescence		(1,261,825	)		(1,124,690	)
	$	7,503,496		$	7,410,734

The value of tooling in raw materials, net of the related allowance for obsolescence, was approximately $1.4 million and $1.5 million as of September 30, 2023 and June 30, 2023, respectively.

6. Property and Equipment

Property and equipment are summarized as follows:

	Estimated Lives (Years)	September 30, 2023			June 30, 2023
Manufacturing equipment	5 - 10	$	22,214,409		$	22,296,320
Computer equipment and software	3 - 5		1,000,142			973,549
Furniture and fixtures	5		356,398			350,289
Leasehold improvements	5 - 7		8,362,163			2,742,344
Construction in progress			740,599			3,067,896
Total property and equipment			32,673,711			29,430,398
Less accumulated depreciation and amortization			(17,080,459	)		(16,619,468	)
Total property and equipment, net		$	15,593,252		$	12,810,930

7. Goodwill and Intangible Assets

The change in the net carrying amount of goodwill during the three months ended September 30, 2023 was as follows:

Goodwill at June 30, 2023	$	5,854,905
Acquisition of Visimid		3,060,732
Goodwill at September 30, 2023	$	8,915,637

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The increase in goodwill during the three months ended September 30, 2023 was due to the acquisition of Visimid. The Company is in the process of obtaining third-party valuations of certain intangible assets; thus, the provisional measurement of goodwill and intangible assets are subject to change. See Note 3, Acquisition of Visimid Technologies, to these unaudited condensed consolidated financial statements, for more information.

Identifiable intangible assets were comprised of:

	Useful Lives (Years)		September 30, 2023			June 30, 2023
Customer relationships		15	$	3,590,000		$	3,590,000
Trade secrets		8		3,272,000			3,272,000
Trademarks		8		3,814,000			3,814,000
Total intangible assets				10,676,000			10,676,000
Less accumulated amortization				(7,624,556	)		(7,343,285	)
Total intangible assets, net			$	3,051,444		$	3,332,715

Future amortization of identifiable intangibles is as follows:

Fiscal year ending:
June 30, 2024 (remaining nine months)	$	843,812
June 30, 2025		658,398
June 30, 2026		239,334
June 30, 2027		239,334
After June 30, 2027		1,070,566
	$	3,051,444

8. Income Taxes

A summary of our total income tax expense and effective income tax rate for the three months ended September 30, 2023 and 2022 is as follows:

	Three Months Ended September 30,
	2023			2022
Loss before income taxes	$	(1,302,830	)	$	(1,278,566	)
Income tax provision	$	39,546		$	102,134
Effective income tax rate		-3	%		-8	%

The difference between our effective tax rates in the periods presented above and the federal statutory rate is due to the mix of taxable income and losses generated in our various tax jurisdictions, which include the United States (the “U.S.”), the People’s Republic of China, and the Republic of Latvia. For the three months ended September 30, 2023 and 2022, income tax expense was primarily related to income taxes from our operations in China, including accruals for withholding taxes on intercompany dividends declared by LightPath Optical Instrumentation (Zhenjiang) Co., Ltd. (“LPOIZ”), and paid or payable to LightPath, its parent company.

We record net deferred tax assets to the extent we believe it is more likely than not that some portion or all of these assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. We consider the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. As of September 30, 2023 and June 30, 2023, our net deferred tax assets are related to the U.S. jurisdiction and we have provided for a valuation allowance to reduce the net deferred tax assets to the amount we estimate is more-likely-than-not to be realized. Our net deferred tax assets as of September 30, 2023 and June 30, 2023 consist primarily of federal and state tax credits with indefinite carryover periods.

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U.S. Federal and State Income Taxes

Our U.S. federal and state statutory income tax rate is estimated to be 25.5%. Based on our current assessment of the valuation allowance position on our net deferred tax assets, no additional tax expense or benefit is expected to be recorded on pre-tax income or losses generated in the U.S.

Income Tax Law of the People’s Republic of China

Our Chinese subsidiaries, LightPath Optical Instrumentation (Shanghai) Co., Ltd. (“LPOI”) and LPOIZ, are governed by the Income Tax Law of the People’s Republic of China. As of September 30, 2023, LPOI and LPOIZ were subject to statutory income tax rates of 25% and 15%, respectively. The net deferred tax liabilities included in these unaudited Condensed Consolidated Balance Sheets as of September 30, 2023 and June 30, 2023 are related to LPOIZ, and primarily consist of timing differences related to depreciation.

The Company routinely declares intercompany dividends to remit a portion of the earnings of its foreign subsidiaries to the U.S. parent company. The Company also intends to reinvest a portion of the earnings generated by its foreign subsidiaries. The Company accrues withholding taxes on the portion of LPOIZ’s earnings that it intends to repatriate. Accrued and unpaid withholding taxes were approximately $40,000 as of both September 30, 2023 and June 30, 2023. Other than these withholding taxes, these intercompany dividends have no impact on the unaudited condensed consolidated financial statements.

Law of Corporate Income Tax of Latvia

Our Latvian subsidiary, ISP Optics Latvia, SIA (“ISP Latvia”), is governed by the Law of Corporate Income Tax of Latvia. Effective January 1, 2018, the Republic of Latvia enacted tax reform with the following key provisions: (i) corporations are no longer subject to income tax, but are instead subject to a distribution tax on distributed profits (or deemed distributions, as defined) and (ii) the rate of tax was changed to 20%; however, distribution amounts are first divided by 0.8 to arrive at the profit before tax amount, resulting in an effective tax rate of 25%. As a transitional measure, distributions of earnings prior to January 1, 2018 are not subject to tax if declared prior to December 31, 2019. ISP Latvia has declared an intercompany dividend to be paid to ISP Optics Corporation (“ISP”), its U.S. parent company, for the full amount of earnings accumulated prior to January 1, 2018. Distributions of this dividend will be from earnings prior to January 1, 2018 and, therefore, will not be subject to tax. We currently do not intend to distribute any earnings generated after January 1, 2018. If, in the future, we change such intention, we will accrue distribution taxes, if any, as profits are generated.

9. Stock-Based Compensation

Our directors, officers, and key employees are granted stock-based compensation through our Amended and Restated Omnibus Incentive Plan, as amended (the “Omnibus Plan”), through October 2018 and after that date, through our 2018 Stock and Incentive Compensation Plan (the “SICP”). Such stock-based compensation may include, among other things, incentive stock options, non-qualified stock options, restricted stock awards (“RSAs”) and restricted stock units (“RSUs”). The SICP is administered by the Compensation Committee of the Board of Directors. At our 2018 Annual Stockholders Meeting, our stockholders approved the SICP under which an aggregate of 1,650,870 shares of our Class A common stock were authorized for issuance pursuant to awards granted thereunder. At our 2022 Annual Stockholders Meeting, our stockholders authorized an additional 2,100,000 shares of our Class A common stock for issuance pursuant to awards granted thereunder. As of September 30, 2023, 1,625,538 shares of Class A common stock were authorized and available for issuance pursuant to awards granted under the SICP. The Company’s executive officers are eligible to earn incentive compensation consisting of equity-based awards, as well as cash bonuses, based on the achievement of certain individual and/or Company performance goals set by the Compensation Committee.

Stock-based compensation expense is based primarily on the fair value of the award as of the grant date, and is recognized as an expense over the requisite service period.

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The following table shows total stock-based compensation expense for the three months ended September 30, 2023 and 2022, the majority of which is included in selling, general and administrative (“SG&A”) expenses in these unaudited Condensed Consolidated Statements of Comprehensive Income (Loss):

	Three Months Ended September 30,
	2023		2022

Stock options	$	31,478	$	58,765
RSAs		22,387		—
RSUs		186,210		225,833
Total	$	240,075	$	284,598

We also adopted the LightPath Technologies, Inc. Employee Stock Purchase Plan (the “2014 ESPP”). The 2014 ESPP permits employees to purchase Class A common stock through payroll deductions, subject to certain limitations. A discount of approximately $2,000 for each of the three months ended September 30, 2023 and 2022, respectively, is included in SG&A expenses in these unaudited Condensed Consolidated Statements of Comprehensive Income (Loss), which represents the value of the 10% discount given to the employees purchasing stock under the 2014 ESPP.

Grant Date Fair Values and Underlying Assumptions; Contractual Terms

We estimate the fair value of each stock option as of the date of grant, using the Black-Scholes-Merton pricing model. The fair value of 2014 ESPP shares is the amount of the discount the employee obtains at the date of the purchase transaction.

Most stock options granted vest ratably over two to four years and are generally exercisable for ten years. The assumed forfeiture rates used in calculating the fair value of RSA and RSU grants was 0%, and the assumed forfeiture rates used in calculating the fair value of options for performance and service conditions were 20% for each of the three months September 30, 2023 and 2022. The volatility rate and expected term are based on seven-year historical trends in Class A common stock closing prices and actual forfeitures. The interest rate used is the U.S. Treasury interest rate for constant maturities.

No stock options were granted during either of the three-month periods ended September 30, 2023 or September 30, 2022.

Restricted Stock Awards

RSAs are granted primarily to our executive officers, employees and consultants, and typically vest over a one to three year period from the date of grant, although some may vest immediately upon grant. The stock underlying RSAs is issued upon vesting.

Restricted Stock Units

RSUs are granted primarily to our directors, although RSU awards may also be made to executive officers, employees and consultants. RSUs typically vest over a one to four year period from the date of grant, although some may vest immediately upon grant.

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Information Regarding Current Share-Based Compensation Awards

A summary of the activity for share-based compensation awards in the three months ended September 30, 2023 is presented below:

	Stock Options						Restricted Stock Units (RSUs)					Restricted Stock Awards (RSAs)
			Weighted-		Weighted-					Weighted-					Weighted-
			Average		Average					Average					Average
			Exercise		Remaining					Remaining					Remaining
	Shares		Price		Contract		Shares			Contract		Shares			Contract
June 30, 2023		534,462	$	2.03		6.1		1,596,222			1.1		101,733			0.7

Granted		—	$	—				8,000					—
Exercised		—	$	—				(8,000	)				(8,987	)
Cancelled/Forfeited		—	$	—				—					—
September 30, 2023		534,462	$	2.03		5.9		1,596,222			0.9		92,746			0.5

Awards exercisable/
vested as of
September 30, 2023		396,202	$	1.96		5.5		938,817			—		—

Awards unexercisable/
unvested as of
September 30, 2023		138,260	$	2.21		7.1		657,405			0.9		92,746			0.5
		534,462						1,596,222					92,746

As of September 30, 2023, there was approximately $535,000 of total unrecognized compensation cost related to non-vested share-based compensation arrangements (including stock options, RSAs and RSUs) granted. We expect to recognize the compensation cost as follows:

Fiscal Year Ending:	Stock Options		RSAs		RSUs		Total
June 30, 2024 (remaining nine months)		61,959		34,357		230,372		326,688
June 30, 2025		33,885		23,718		130,589		188,192
June 30, 2026		—		—		19,829		19,829
	$	95,844	$	58,075	$	380,790	$	534,709

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10. Earnings (Loss) Per Share

Basic earnings (loss) per share is computed by dividing net income or loss by the weighted-average number of shares of Class A common stock outstanding, during each period presented. Diluted earnings (loss) per share is computed similarly to basic earnings (loss) per share, except that it reflects the potential dilution that could occur if dilutive securities or other obligations to issue shares of Class A common stock were exercised or converted into shares of Class A common stock. The computations for basic and diluted earnings (loss) per share of Class A common stock are described in the following table:

	Three Months Ended September 30,
	2023			2022

Net loss	$	(1,342,376	)	$	(1,380,700	)
Weighted-average common shares outstanding:
Basic number of shares		37,431,748			27,070,949
Effect of dilutive securities:
Options to purchase common stock		—			—
RSUs and RSAs		—			—
Diluted number of shares		37,431,748			27,070,949
Loss per common share:
Basic	$	(0.04	)	$	(0.05	)
Diluted	$	(0.04	)	$	(0.05	)

The following potential dilutive shares were not included in the computation of diluted earnings (loss) per share of Class A common stock, as their effects would be anti-dilutive:

	Three Months Ended September 30,
	2023		2022
Options to purchase common stock		534,462		534,462
RSUs and RSAs		1,689,066		2,061,090
		2,223,528		2,595,552

11. Leases

Our leases primarily consist of operating leases related to our facilities located in Orlando, Florida; Riga, Latvia; Shanghai, China; and Zhenjiang, China, and finance leases related to certain equipment located in Orlando, Florida and Riga, Latvia. The operating leases for facilities are non-cancelable operating leases, with terms at various times through 2034. We typically include options to renew (or terminate) in our lease term, and as part of our right-of-use (“ROU”) assets and lease liabilities, when it is reasonably certain that we will exercise such options. We currently have obligations under seven finance lease agreements, entered into during fiscal years 2019, 2023 and 2024, with terms ranging from three to five years. The leases are for computer and manufacturing equipment.

Our operating lease ROU assets and the related lease liabilities are initially measured at the present value of future lease payments over the lease term. Two of our operating leases include renewal options, which were not included in the measurement of the operating lease ROU assets and related lease liabilities. We previously had two leases on the premises comprising our primary facility in Orlando, Florida (the “Orlando Facility”). The first lease on the premises comprising our Orlando Facility was amended in April 2021, and again in September 2021, to expand the space from approximately 26,000 square feet to approximately 58,500 square feet. The lease term was extended from April 30, 2022, to that certain date that is one hundred twenty-seven (127) months after the date the landlord completes certain work to be done at the leased premises. The landlord’s work was completed in August 2023, and accordingly the lease expires on March 31, 2034. In April 2023, we entered into a sublease for 11,156 square feet of this space, as we do not have a current need for the full 58,500 square feet of space. The sublease is for an initial term of five years, ending in April 2029. The second lease on the premises comprising our Orlando Facility was assigned to a third-party and it was agreed that we would vacate the premises, subject to the assigned lease, on November 30, 2022. In December 2022, we entered into an agreement with the assignee of such lease that extended our right to occupy the subject premises until February 28, 2023, in consideration of payments of rent through February 28, 2023, and other amounts to the assignee. In February 2023, the space was vacated and we have no further obligations related to this lease. Effective in January 2022, the terms of our leases in Zhenjiang, China and Riga, Latvia were extended to December 31, 2024 and 2030, respectively.

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As most of our leases do not provide an implicit rate, we use our collateralized incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. Currently, none of our leases include variable lease payments that are dependent on an index or rate. We are responsible for payment of certain real estate taxes, insurance and other expenses on certain of our leases. These amounts are generally considered to be variable and are not included in the measurement of the ROU assets and the related lease liabilities. We generally account for non-lease components, such as maintenance, separately from lease components. Our lease agreements do not contain any material residual value guarantees or material restricted covenants. Leases with a term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term.

We received tenant improvement allowances for each of our two leases with respect to our Orlando Facility. These allowances were used to construct improvements and are included in leasehold improvements and operating lease liabilities. The balances are being amortized over the corresponding lease terms. In August 2023, we completed the construction of additional tenant improvements within the premises subject to our continuing lease for our Orlando Facility, of which the landlord has agreed to provide $2.4 million in tenant improvement allowances. We are funding the balance of the tenant improvement costs, which we estimate will be approximately $3.8 million, pending final construction invoices.

The components of lease expense were as follows:

	Three Months Ended September 30,
	2023		2022
Operating lease cost	$	205,023	$	231,501
Finance lease cost:
Depreciation of lease assets		19,915		34,111
Interest on lease liabilities		7,536		2,683
Total finance lease cost		27,451		36,794
Total lease cost	$	232,474	$	268,295

Supplemental balance sheet information related to the leases was as follows:

	Classification	September 30, 2023		June 30, 2023
Assets:
Operating lease assets	Operating lease assets	$	7,571,878	$	9,571,604
Finance lease assets	Property and equipment, net⁽¹⁾		637,581		542,105
Total lease assets		$	8,209,459	$	10,113,709

Liabilities:
Current:
Operating leases	Operating lease liabilities, current	$	1,016,940	$	969,890
Finance leases	Finance lease liabilities, current		112,352		103,646

Noncurrent:
Operating leases	Operating lease liabilities, less current portion		8,773,442		8,393,248
Finance leases	Finance lease liabilities, less current portion		340,716		341,201
Total lease liabilities		$	10,243,450	$	9,807,985

⁽¹⁾	Finance lease assets were recorded net of accumulated depreciation of approximately $92,000 and $72,000 as of September 30, 2023 and June 30, 2023, respectively.

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Lease term and discount rate information related to leases was as follows:

Lease Term and Discount Rate	September 30, 2023
Weighted Average Remaining Lease Term (in years)
Operating leases		10.1
Finance leases		4.2

Weighted Average Discount Rate
Operating leases		2.9	%
Finance leases		5.7	%

Supplemental cash flow information:

	Three Months Ended September 30,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash used for operating leases	$	180,077	$	268,580
Operating cash used for finance leases	$	7,536	$	2,683
Financing cash used for finance leases	$	27,062	$	37,079

Future maturities of lease liabilities were as follows as of September 30, 2023:

Fiscal year ending:	Finance Leases			Operating Leases
June 30, 2024 (remaining nine months)	$	106,949		$	794,979
June 30, 2025		130,447			1,125,653
June 30, 2026		108,132			1,097,131
June 30, 2027		89,371			1,125,616
June 30, 2028		82,466			1,154,784
Thereafter		—			6,751,714
Total future minimum payments		517,365			12,049,877
Less imputed interest		(64,297	)		(2,259,495	)
Present value of lease liabilities	$	453,068		$	9,790,382

12. Loans Payable

As of September 30, 2023 and June 30, 2023, loans payable primarily consisted of the BankUnited Term Loan (as defined below) payable to BankUnited N.A. (“BankUnited”). On February 26, 2019, we entered into a Loan Agreement (the “Loan Agreement”) with BankUnited for (i) a revolving line of credit up to a maximum amount of $2,000,000 (the “BankUnited Revolving Line”), (ii) a term loan in the amount of up to $5,813,500 (“BankUnited Term Loan”), and (iii) a non-revolving guidance line of credit up to a maximum amount of $10,000,000 (the “Guidance Line” and, together with the BankUnited Revolving Line and BankUnited Term Loan, the “BankUnited Loans”), which Guidance Line has since been terminated. Each of the BankUnited Loans is evidenced by a promissory note in favor of BankUnited (the “BankUnited Notes”).

On May 6, 2019, we entered into that certain First Amendment to Loan Agreement, effective February 26, 2019, with BankUnited (the “First Amendment”). The First Amendment amended the definition of the fixed charge coverage ratio to more accurately reflect the parties’ understandings at the time the Loan Agreement was executed. On September 9, 2021, we entered into a letter agreement with BankUnited (the “Letter Agreement”). In accordance with the Letter Agreement, the parties agreed to the following terms, among others: (i) we were granted a waiver of default for our failure to comply with the fixed charge coverage ratio measured on June 30, 2021; (ii) certain financial covenant requirements were modified; and (iii) the Guidance Line was terminated.

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On November 5, 2021, we entered into a letter agreement with BankUnited (the “Second Letter Agreement”). In accordance with the Second Letter Agreement, the parties agreed to initiate discussions regarding a possible modification, forbearance, or other resolution of the Amended Loan Agreement (as defined below), which resolution would occur on or before December 31, 2021. On December 20, 2021, we entered into the Second Amendment to the Loan Agreement dated February 26, 2019 (the “Second Amendment”), which further amended the Loan Agreement with BankUnited. In accordance with the Second Amendment, the parties agreed to the following terms, among others: (i) a maturity date of April 15, 2023 with respect to the Term Loan (as defined in the Amended Loan Agreement); (ii) an increased monthly payment amount of $100,000 commencing on November 1, 2022; (iii) beginning on December 20, 2021, each facility would bear interest at BankUnited’s then-prime rate of interest minus fifty (50) basis points, as adjusted from time to time; (iv) the Term Loan would bear a higher interest rate commencing on August 1, 2022; (v) an exit fee equal to 4% of the outstanding principal balance of the Term Loan on April 15, 2023 (to the extent the Term Loan would still be outstanding on such date); and (vi) a fee of $50,000 payable upon execution of the Second Amendment. The Second Amendment also granted us a waiver of compliance for the Financial Covenants (as set forth in the Amended Loan Agreement) for the periods ended December 31, 2021, March 31, 2022 and June 30, 2022. Based on the waiver, we were no longer in default of the Amended Loan Agreement.

On May 11, 2022, we entered into the Third Amendment to the Loan Agreement dated February 26, 2019 (the “Third Amendment”; and, together with the First Amendment, the Letter Agreement and the Second Letter Agreement, the “Amended Loan Agreement”), which further amended the Loan Agreement with BankUnited. In accordance with the Third Amendment, the parties agreed to the following terms, among others: (i) an amended maturity date of April 15, 2024 with respect to the Term Loan (as defined in the Amended Loan Agreement); and (ii) an amended exit fee equal to (a) 2% of the outstanding principal balance of the Term Loan on September 30, 2022, (b) 1% of the outstanding principal balance on December 31, 2022, (c) 1% of the outstanding principal balance on March 31, 2023, and (d) 4% of the outstanding principal balance on April 15, 2024 (to the extent the Term Loan is still outstanding on the respective dates).

On February 7, 2023, we entered into the Fourth Amendment to the Loan Agreement dated February 26, 2019 (the “Fourth Amendment” and, together with the First Amendment, the Letter Agreement and the Second Letter Agreement, the Second Amendment, and the Third Amendment, the “Amended Loan Agreement”), which further amended the Loan Agreement with BankUnited. In accordance with the Fourth Amendment, the parties agreed to the following terms, among others: (i) an amended maturity date of December 31, 2024 with respect to the Term Loan (as defined in the Amended Loan Agreement); (ii) an amended exit fee equal to (a) 1% of the outstanding principal balance on December 31, 2023 and (b) 4% of the outstanding principal balance on December 31, 2024 (to the extent the Term Loan is still outstanding on the respective dates); (iii) a principal reduction payment of $1,000,000 on or before February 28, 2023; (iv) commencing on March 1, 2023 and continuing on the first day of each month thereafter until December 31, 2023, monthly payments of $75,000, and commencing on January 1, 2024 and continuing on the first day of each month thereafter until the maturity date, monthly payments of $100,000, with each such payment applied first to interest, costs and expenses and then to principal; (v) commencing on March 1, 2023, each facility will bear interest at BankUnited’s then prime rate of interest, and (vi) BankUnited waived compliance with certain financial covenants until December 31, 2023.

On May 9, 2023, we entered into the Fifth Amendment to the Loan Agreement dated February 26, 2019 (the “Fifth Amendment”), which further amended the Loan Agreement with BankUnited. In accordance with the Fifth Amendment, the parties agreed to the following terms, among others: (i) BankUnited agreed to release its security interest in the collateral securing the BankUnited Loans other than a cash collateral account maintained at BankUnited, initially in the amount of approximately $2,457,000, with a portion of such cash collateral to be released on a quarterly basis equal to 110% of the principal reductions effected during that quarter, and (ii) certain other requirements and restrictions of the Loan Agreement were removed, including, among others, financial covenants, restrictions on acquisitions, and limitations on other financing sources. The cash collateral is reflected as Restricted Cash in the accompanying unaudited condensed consolidated balance sheets as of September 30, 2023 and June 30, 2023.

BankUnited Revolving Line

Pursuant to the Amended Loan Agreement, BankUnited agreed to make loan advances to us under the Revolving Line up to a maximum aggregate principal amount outstanding not to exceed $2,000,000, which proceeds could have been used for working capital and general corporate purposes. The Revolving Line expired on February 26, 2022. No amounts were outstanding under the BankUnited Revolving Line upon its expiration.

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BankUnited Term Loan

Pursuant to the Amended Loan Agreement, BankUnited advanced the Company $5,813,500 to satisfy in full the amounts owed to Avidbank and to pay the fees and expenses incurred in connection with the closing of the BankUnited Loan. The Term Loan is for a 5-year term, but co-terminus with the BankUnited Revolving Line should the Revolving Line not be renewed beyond February 26, 2022. Pursuant to the Fourth Amendment, the maturity date of the Term Loan is December 31, 2024.

The Term Loan initially bore interest at a per annum rate equal to 2.75% above the 30-day LIBOR. Pursuant to the Second Amendment, beginning on December 20, 2021, each facility bore interest at BankUnited’s then-prime rate of interest minus fifty (50) basis points, as adjusted from time to time. Pursuant to the Fourth Amendment, commencing on March 1, 2023, each facility bears interest at BankUnited’s then prime rate of interest, as adjusted from time to time (8.5% as of September 30, 2023).

Equal monthly principal payments of approximately $48,446, plus accrued interest, were due and payable, in arrears, on the first day of each month during the term. Pursuant to the Second Amendment, the monthly payment, including principal and interest, increased to $100,000, commencing November 1, 2022. Pursuant to the Fourth Amendment, commencing on March 1, 2023 and continuing on the first day of each month thereafter until December 31, 2023, monthly payments were reduced to $75,000, and commencing on January 1, 2024 and continuing on the first day of each month thereafter until the maturity date, monthly payments will increase to $100,000, with each such payment applied first to interest, costs and expenses and then to principal. Upon maturity, all principal and interest shall be immediately due and payable.

Security and Guarantees

Our obligations under the Amended Loan Agreement were previously collateralized by a first priority security interest (subject to permitted liens) in all of our assets and the assets of the Company’s U.S. subsidiaries, GelTech, Inc. (“GelTech”), and ISP, pursuant to a Security Agreement granted by GelTech, ISP, and the Company in favor of BankUnited. The Company’s equity interests in, and the assets of, its foreign subsidiaries were excluded from the security interest. Pursuant to the Fifth Amendment, the security interest in the certain of the collateral then securing the BankUnited Loans terminated and was replaced by a security interest in a cash collateral account maintained at BankUnited, initially in the amount of approximately $2,457,000, with a portion of such cash collateral to be released on a quarterly basis equal to 110% of the principal reductions effected during that quarter. In addition, all of the Company’s subsidiaries have guaranteed the Company’s obligations under the Amended Loan Agreement and related documents, pursuant to Guaranty Agreements executed by the Company and its subsidiaries in favor of BankUnited.

General Terms

The Amended Loan Agreement initially contained customary covenants, including, but not limited to: (i) limitations on the disposition of property; (ii) limitations on changing the Company’s business or permitting a change in control; (iii) limitations on additional indebtedness or encumbrances; (iv) restrictions on distributions; and (v) limitations on certain investments. The Amended Loan Agreement also contains certain financial covenants, including obligations to maintain a fixed charge coverage ratio of 1.25 to 1.00 and a total leverage ratio of 4.00 to 1.00. The Letter Agreement granted us a waiver of default arising prior to the Letter Agreement from its failure to comply with the fixed charge coverage ratio measured on June 30, 2021. The Second Amendment to the Amended Loan Agreement granted us a waiver of compliance for the Financial Covenants (as set forth in the Amended Loan Agreement) through June 30, 2022. Based on the waivers, we were no longer in default of the Amended Loan Agreement. Pursuant to the Fifth Amendment, certain other requirements and restrictions of the Loan Agreement were removed, including, among others, financial covenants, restrictions on acquisitions, and limitations on other financing sources. As of September 30, 2023, we were in compliance with all required covenants.

We may prepay any or all of the BankUnited Loans in whole or in part at any time, without penalty or premium, other than the exit fees, as discussed above. Late payments are subject to a late fee equal to five percent (5%) of the unpaid amount. Amounts outstanding during an event of default accrue interest at a rate of five percent (5%) above BankUnited’s then prime rate of interest, as adjusted from time to time, applicable immediately prior to the occurrence of the event of default. The Amended Loan Agreement contains other customary provisions with respect to events of default, expense reimbursement, and confidentiality.

Financing costs incurred related to the BankUnited Loans were recorded as a discount on debt and amortized over the term. Amortization of approximately $19,000 is included in interest expense for the three-month period ended September 30, 2022. There was no amortization for the three-month period ended September 30, 2023, as all costs have been fully amortized in prior periods.

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In December 2020, ISP Latvia entered into an equipment loan with a third party (the “2020 Equipment Loan”), which party is also a significant customer, and which the 2020 Equipment Loan is subordinate to the BankUnited Loans, and collateralized by certain equipment. The initial advance under the 2020 Equipment Loan was 225,000 EUR (or USD $275,000), payable in equal installments over 60 months, the proceeds of which were used to make a prepayment to a vendor for equipment to be delivered at a future date. An additional 225,000 EUR (or USD $267,000) was drawn in September 2021, which proceeds were paid to the vendor for the equipment, payable in equal installments over 52 months. The 2020 Equipment Loan bears interest at a fixed rate of 3.3%.

In May 2023, ISP Latvia entered into an equipment loan with a third party (the “2023 Equipment Loan”). The 2023 Equipment Loan is collateralized by certain equipment. The initial advance under the 2023 Equipment Loan was 128,815 EUR (or USD $141,245), the proceeds of which were used to make a prepayment to a vendor for equipment to be delivered at a future date. The 2023 Equipment Loan will be payable over 48 months, with monthly installments beginning January 1, 2024. The 2023 Equipment Loan bears interest at the six-month EURIBOR rate, plus 2.84% (6.98% as of September 30, 2023).

In July 2023, the acquisition of Visimid included a promissory note of $150,000 in favor of The American National Bank of Texas (the “ANBTX Note”). In conjunction with the acquisition, Visimid and LightPath agreed to collateralize the ANBTX Note with a certificate of deposit for the same amount. The cash collateral is reflected as Restricted Cash in the accompanying unaudited Condensed Consolidated Balance Sheet as of September 30, 2023. The ANBTX Note bears interest at a fixed rate of 6.15% and has a maturity date of April 14, 2024.

Future maturities of loans payable are as follows:

	BankUnited Term Loan		Equipment Loans		ANBTX Note		Total
Fiscal year ending:
June 30, 2024 (remaining nine months)	$	716,301	$	92,874	$	150,000	$	959,175
June 30, 2025		1,278,395		135,486		—		1,413,881
June 30, 2026		—		77,246		—		77,246
June 30, 2027		—		36,464		—		36,464
After June 30, 2027		—		19,207		—		19,207
Total payments	$	1,994,696	$	361,277	$	150,000		2,505,973
Less current portion								(1,269,340	)
Non-current portion							$	1,236,633

13. Foreign Operations

Assets and liabilities denominated in non-U.S. currencies are translated at rates of exchange prevailing on the balance sheet date, and revenues and expenses are translated at average rates of exchange for the period. Gains or losses on the translation of the financial statements of a non-U.S. operation, where the functional currency is other than the U.S. dollar, are reflected as a separate component of equity, which was a cumulative gain of approximately $481,000 and $607,000 as of September 30, 2023 and June 30, 2023, respectively. We also recognized net foreign currency transaction gains of $25,000 and $23,000 during the three months ended September 30, 2023 and 2022, respectively, included in the unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) in the line item entitled “Other income (expense), net.”

Our cash, cash equivalents and restricted cash totaled approximately $6.9 million at September 30, 2023. Of this amount, greater than 25% was held by our foreign subsidiaries in China and Latvia. These foreign funds were generated in China and Latvia as a result of foreign earnings. With respect to the funds generated by our foreign subsidiaries in China, the retained earnings of the respective subsidiary must equal at least 50% of its registered capital before any funds can be repatriated through dividends. As of September 30, 2023, LPOIZ had approximately $2.7 million in retained earnings available for repatriation, and LPOI did not have any earnings available for repatriation, based on earnings accumulated through December 31, 2022, the end of the most recent statutory tax year, that remained undistributed as of September 30, 2023.

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Revenues from and long-lived assets located in foreign countries are as follows:

	Three Months Ended September 30,
	2023		2022
Revenues:
United States	$	4,293,394	$	2,965,295
Latvia		—		738,612
China		500,138		827,940
Other European countries		2,523,545		2,136,229
Other Asian countries		562,399		449,888
Rest of world		197,772		248,937
	$	8,077,248	$	7,366,901

	September 30, 2023		June 30, 2023
Long-lived assets:
United States	$	27,345,150	$	23,336,063
Latvia		4,954,923		5,282,596
China		3,039,911		3,157,434
	$	35,339,984	$	31,776,093

14. Contingencies

Legal

The Company, from time to time, is involved in various legal actions arising in the normal course of business. Management, after reviewing with legal counsel all of these actions and proceedings, believes that the aggregate losses, if any, will not have a material adverse effect on the Company’s financial position or results of operations.

In April 2021, we terminated several employees of our China subsidiaries, LPOIZ and LPOI, including the General Manager, the Sales Manager, and the Engineering Manager, after determining that they had engaged in malfeasance and conduct adverse to our interests, including efforts to misappropriate certain of our proprietary technology, diverting sales to entities owned or controlled by these former employees and other suspected acts of fraud, theft and embezzlement. In connection with such terminations, our China subsidiaries have engaged in certain legal proceedings with the terminated employees.

We have incurred various expenses associated with the investigation into these matters prior and subsequent to the termination of the employees and the associated legal proceedings. These expenses, which include legal, consulting and other transitional management fees, totaled $718,000 and $400,000 during the years ended June 30, 2021 and 2022, respectively. During the three months ended September 30, 2023 and 2022, respectively, expenses incurred related to the legal proceedings were immaterial.

Knowing that employee transitions in international subsidiaries can lead to lengthy legal proceedings that can interrupt the subsidiary’s ability to operate, compounded by the fact that our officers could not travel to China to oversee the transitions because of the travel restrictions imposed by COVID-19, we chose to enter into severance agreements with certain of the employees at the time of termination. Pursuant to the severance agreements, LPOIZ and LPOI agreed to pay such employees severance of approximately $485,000 in the aggregate, to be paid over a six-month period following the terminations in April 2021. After the execution of the severance agreements, we discovered additional wrongdoing by the terminated employees. As a result, LPOIZ and LPOI have disputed the employees’ rights to such payments and did not immediately begin making the severance payments. However, based on the likelihood that the courts in China will determine that our subsidiaries would ultimately be obligated to pay these amounts, we accrued for these payments as of June 30, 2021 and they remained accrued as of June 30, 2022. Such expenses were recorded as SG&A expenses in the Consolidated Statement of Comprehensive Income (Loss) for the year ended June 30, 2021. In October 2022, the severance amounts were paid to the court in accordance with a court order.

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We have transitioned the management of LPOI and LPOIZ to a new management team without any significant detrimental effects on the ability of those subsidiaries to operate. We have not experienced any material adverse impact to the business operations of LPOI or LPOIZ as a result of the transition. We expect to incur minimal additional legal fees and consulting expenses in future periods as we have exhausted nearly all of our legal options and remedies.

Although we have taken steps to minimize the business impacts from the termination of the management employees and transition to new management personnel, we have experienced some short-term adverse impacts on LPOIZ’s and LPOI’s domestic sales in China and results of operations in the three-month period ended June 30, 2021 and the fiscal year ended June 30, 2022. The Company has not experienced, nor does management anticipate, any material adverse impact on LPOIZ’s or LPOI’s production and supply of products to its other subsidiaries for their customers.

COVID-19

Our business, results of operations financial condition, cash flows, and the stock price of our Class A common stock can be adversely affected by pandemics, epidemics, or other public health emergencies, such as the COVID-19 pandemic and its lasting impacts.

To date, we have not experienced any significant direct financial impact of COVID-19 to our business. However, the COVID-19 pandemic continues to impact economic conditions, particularly in China, which has impacted the short-term and long-term demand from customers and, therefore, has negatively impacted our results of operations, cash flows, and financial position in that region. Additionally, some areas have had travel restrictions in place, including China until recently. Even though China’s travel restrictions are no longer in place, we are required to re-apply for travel visas and approvals which will continue to affect our ability to travel in China. As a result, some aspects of our operations that depend on travel, such as recruitment of senior positions, and travel of service providers to maintain our production equipment have been, and will continue to be, adversely impacted. Management is actively monitoring this situation and taking steps to mitigate the impact on our financial condition, liquidity, and results of operations globally. However, we are not able to precisely estimate the effects of the continuing COVID-19 pandemic on our future results of operations, financial, or liquidity for the remainder of fiscal 2024 or beyond.

Potential Impact of Economic Conditions in China

Due to our operations in China, our business, results of operations, financial condition and prospects may be influenced to a significant degree by economic, political, legal and social conditions in China. China’s economy differs from the economies of other countries in many respects, including with respect to the level of development, growth rate, amount of government involvement, control of foreign exchange and allocation of resources. While China’s economy has experienced significant growth over the past several decades, its growth rate has declined in recent years and may continue to decline. Deteriorating economic conditions in China generally and as a remnant of China’s zero-COVID strategy, have led to lower demand for our products in China and thus lower revenues and net income for our subsidiaries in China and the Company overall. A continuation of China’s current economic conditions or a further slowdown in the economic growth, an economic downturn, a recession, or other adverse economic conditions in China is likely to have a material adverse effect on our business and results of operations in future quarters.

Impact of Russian-Ukraine Conflict

In February 2022, Russian military forces invaded Ukraine. This conflict has resulted in significant economic disruption and continues to adversely impact the broader global economy, including certain of our customers and suppliers. Given the dynamic nature of this situation, we cannot reasonably estimate the impact of the Russian-Ukraine conflict on our financial condition, results of operations or cash flows into the foreseeable future.

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15. Liquidity

We generally rely on cash from operations and equity and debt offerings, to the extent available, to satisfy our liquidity needs and to maintain our ability to repay the BankUnited Term Loan. We have commenced discussions with prospective lenders regarding the refinancing of our debt obligations prior to the maturity date of the BankUnited Term Loan on December 31, 2024. There can be no assurance that we will be successful in such refinancing or that such refinancing will be available under reasonable commercial terms. If we are unable to refinance the credit facility with other commercial lenders prior to maturity, it may need to raise additional equity financing, source financing through non-commercial lenders or reduce operating expenses and capital expenditures in order to repay the credit facility and all charges related thereto upon its maturity on December 31, 2024.

On February 16, 2022, we filed a shelf registration statement to facilitate the issuance of our Class A common stock, warrants exercisable for shares of our Class A common stock, and/or units up to an aggregate offering price of $75.8 million from time to time. In connection with the filing of the shelf registration statement, we also included a prospectus supplement relating to an at-the-market equity program under which we may issue and sell shares of our Class A common stock up to an aggregate offering price of $25.2 million from time to time, decreasing the aggregate offering price available under the shelf registration statement to $50.6 million. The shelf registration statement was declared effective by the SEC on March 1, 2022. We have not issued any shares of our Class A common stock pursuant to the at-the-market equity program.

On January 12, 2023, the Company entered into a securities purchase agreement (“Purchase Agreement”), pursuant to which the Company agreed to issue and sell in a public offering under the shelf registration statement an aggregate of 9,090,910 shares of the Company’s Class A common stock, par value $0.01 per share for a purchase price of $1.10 per share and filed a prospectus supplement with the SEC related thereto. The sale of shares pursuant to the Purchase Agreement closed on January 17, 2023, and resulted in net proceeds of approximately $9.2 million after payment of placement agent fees, and certain other costs and expenses of the offering.

There are a number of factors that could result in the need to raise additional funds, including a decline in revenue or a lack of anticipated sales growth, increased material costs, increased labor costs, planned production efficiency improvements not being realized, increases in property, casualty, benefit and liability insurance premiums, and increases in other costs. In addition, we may identify opportunities for acquisitions and other strategic transactions to expand and further enhance our business that may require that we raise additional capital should we elect to pursue any of such transactions.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s Discussion and Analysis of Financial Condition and Results of Operations is designed to provide a reader of the financial statements with a narrative report on our financial condition, results of operations, and liquidity. This discussion and analysis should be read in conjunction with the attached unaudited Condensed Consolidated Financial Statements and notes thereto and our Annual Report on Form 10-K for the year ended June 30, 2023, including the audited Consolidated Financial Statements and notes thereto. The following discussion contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations, and intentions. Our actual results could differ materially from those discussed in the forward-looking statements. Please also see the cautionary language at the beginning of this Quarterly Report regarding forward-looking statements.

Continual Impact of COVID-19

In March 2020, the WHO declared the outbreak of COVID-19 as a pandemic based on the rapid increase in global exposure. COVID-19 has spread throughout world, including the U.S., and continues to spread as additional variants emerge. As a result of the COVID-19 pandemic, our employees at our facilities in China, Latvia, and the U.S. were subject to stay-at-home orders during a portion of fiscal year 2021, which restrictions have since been lifted as of the date of this Quarterly Report on Form 10-Q. In addition to stay-at-home orders, many jurisdictions also implemented social distancing and other restrictions and measures to slow the spread of COVID-19. These restrictions significantly impacted economic conditions in the U.S. from 2020 to 2022. Beginning in the spring of 2021, restrictions began to lift as vaccines became more available. Despite these stay-at-home orders and other measures and restrictions implemented in the areas in which we operate, as a critical supplier to both the medical and defense industries, we were deemed to be an essential business; thus, regardless of the stay-at-home orders, our workforce was permitted to work from our facilities and our business operations have generally continued to operate as normal.

Introduction

We were incorporated in Delaware in 1992 as the successor to LightPath Technologies Limited Partnership, a New Mexico limited partnership, formed in 1989, and its predecessor, Integrated Solar Technologies Corporation, a New Mexico corporation, formed in 1985. Today, LightPath is a global company with major facilities in the United States, the People’s Republic of China, and the Republic of Latvia.

Our capabilities include precision molded optics, thermal imaging optics, custom designed optics, and the design and manufacturing of optical assemblies and subsystems. These capabilities allow us to manufacture optical components and higher-level assemblies, including precision molded glass aspheric optics, molded and diamond-turned infrared aspheric lenses and other optical materials used to produce products that manipulate light. We design, develop, manufacture and integrate optical components and assemblies utilizing advanced optical manufacturing processes. Product verticals range from consumer (e.g., cameras, cell phones, gaming, and copiers) to industrial (e.g., lasers, data storage, and infrared imaging), from products where the lenses are the central feature (e.g., telescopes, microscopes, and lens systems) to products incorporating lens components (e.g., 3D printing, machine vision, LIDAR, robotics and semiconductor production equipment) and communications. As a result, we market our products across a wide variety of customer groups, including laser systems manufacturers, laser OEMs, infrared-imaging systems vendors, industrial laser tool manufacturers, telecommunications equipment manufacturers, medical instrumentation manufacturers and industrial measurement equipment manufacturers, government defense agencies, and research institutions worldwide.

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Subsidiaries

In November 2005, we formed LPOI, a wholly-owned subsidiary, located in Jiading, People’s Republic of China. LPOI provides sales and support functions. In December 2013, we formed LPOIZ, a wholly-owned subsidiary located in the New City district, of the Jiangsu province, of the People’s Republic of China. LPOIZ’s 55,000 square foot manufacturing facility (the “Zhenjiang Facility”) serves as our primary manufacturing facility in China and provides a lower cost structure for production of larger volumes of optical components and assemblies.

In December 2016, we acquired ISP, and its wholly-owned subsidiary, ISP Latvia. ISP is a vertically integrated manufacturer offering a full range of infrared products from custom infrared optical elements to catalog and high-performance lens assemblies. Since June 2019, ISP’s manufacturing operation has been located at our Orlando Facility. ISP Latvia is a manufacturer of high precision optics and offers a full range of infrared products, including catalog and custom infrared optics. ISP Latvia’s facility in Riga, Latvia (the “Riga Facility”) functions as its manufacturing facility.

In July 2023, we acquired Liebert Consulting LLC, dba Visimid Technologies (“Visimid”). Visimid is an engineering and design firm specializing in thermal imaging, night vision and IOT applications. Visimid provides design and consulting services for DoD contractors, commercial and industrial customers, and OEMs for original new products. Visimid’s core competency is developing and producing custom thermal and night vision cores. We believe that Visimid’s capabilities are aligned with our strategy to focus on engineered solutions. Visimid’s facility is located in Plano, TX.

For additional information, please refer to our Annual Report on Form 10-K for the year ended June 30, 2023.

Product Groups

We previously organized our products in three groups: PMO, infrared, and specialty products. Revenues from product development agreements for engineering services were included in specialty products. With our strategic transition into more value-added solutions, and the addition of Visimid in July 2023, we reorganized our products into four product groups: infrared components, visible components, assemblies and modules, and engineering services. Assemblies and modules were previously included in infrared or specialty products, depending on the lens type.

Our visible components product group consists of visible precision molded optics with varying applications. Our infrared product group is comprised of infrared optical components, including molded, diamond-turned, or polished lenses. Polished lenses include both conventional and CNC (computer numerical control) ground and polished lenses. Between these two product groups, we have the capability to manufacture lenses from very small (with diameters of a sub-millimeter) to over 300 millimeters, and with focal lengths from approximately 0.4 millimeters to over 2,000 millimeters. In addition, both product groups offer both catalog and custom designed optics.

Our assemblies and modules product group is comprised of value-added engineered solutions, such as infrared cameras, infrared imaging modules and cores, optical assemblies, thermal imaging assemblies, and collimators. Products in this category are typically designed for specific customer needs and requirements, and are sold into OEMs that further integrate them into their systems. We design, build, and sell cameras and optical assemblies in markets for defense use, industrial test and measurement, medical devices, sporting, and communications based on our proprietary technologies. Our solutions and assemblies can vary in complexity level from assemblies of lenses that get mounted on a customer’s camera, laser or detector, to complete imaging systems that generate a processed image electronically.

Our engineering services product group represents services we provide pursuant to product development agreements that we enter into with customers. Typically, customers approach us and request that we develop new products or applications utilizing our existing products to fit their particular needs or specifications. The timing and extent of any such product development requests are outside of our control, and the related revenue is recognized upon satisfaction of the performance obligation, and transfer of control of the agreed-upon deliverable. As we continue down the path of strategic shift into highly engineered solutions, we expect this product group to grow in a similar way as our assemblies and modules business. Furthermore, as the engineering effort precedes the product revenue, the revenue from this product group is often, but not always, a lead indicator to the revenue in assemblies and modules product group.

We believe these four product groups better align with our strategic direction and will allow us to better track the results of our focus on engineered solution and assemblies.

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Growth Strategy

The industry is transforming from a fragmented industry with many component manufacturers into a solution-focused industry with the potential for partnerships for solution development and production. Based on the shifts in the marketplace and the changes that come when a technology, like photonics, moves from being a specialty product to being integrated into mainstream industries and applications, we redefined our strategic direction to leverage our strengths and specifically our subject matter expertise in optics, to provide our wide customer base with complete optical and electro-optical solutions, and to become their partner for the optical engine of their systems.

Since 2020, we have focused on developing a strategy and executing a plan that capitalizes on the changing market conditions, creates a unique and long-lasting value to our customers, and utilizes our unique capabilities and differentiators. We intend to use our differentiators to move up the value chain, thereby offering a more comprehensive value proposition to our customers.

Understanding the shifts that are happening in the marketplace and the changes that come when a technology, like photonics, moves from being a specialty to being integrated into mainstream industries and applications, we redefined our strategic direction to provide our wide customer base with domain expertise in optics, and became their partner for the optical engine of their systems. In our view, as the use of photonics evolves, so do customer needs. The industry is transforming from a fragmented industry with a component oriented supply chain, into a solution-focused industry with the potential for partnerships for solution development and production. Over the last couple of years we have worked to align our organization to this strategy, and leverage our in-house domain expertise in photonics, knowledge and experience in advanced optical technologies, and the necessary manufacturing techniques and capabilities. We have been developing these partnerships by working closely with our customers throughout their design process, designing optical solutions that are tailored to their needs, often times using unique technologies that we own, and supplying the customer with a complete optical subsystem to be integrated into their product. Such an approach builds on our unique, value-added technologies that we currently own, such as infrared materials, optical molding, fabrication, system design, and proprietary manufacturing technologies, along with other technologies that we may acquire or develop in the future, to create tailored solutions for our customers.

Our domain expertise and the extensive “know how” in optical design, fabrication, production and testing technologies will allow our customers to focus on their own development efforts, freeing them from the need to develop subject matter expertise in optics. By providing the bridge into the optical solution world, we are able to partner with our customers on a long-term basis, create value for our customers, and capture that value through the long-term supply relationships we seek to develop.

Further information about our strategic direction can be found in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023.

Results of Operations

Revenue

Revenue for the first quarter of fiscal 2024 was approximately $8.1 million, an increase of approximately $0.7 million, or 10%, as compared to approximately $7.4 million in the same period of the prior fiscal year, driven by increases in sales of infrared components, assemblies and modules, and engineering services.

Revenue generated by infrared components was approximately $3.8 million in the first quarter of fiscal 2024, an increase of approximately $0.6 million, or 20%, as compared to approximately $3.2 million in the same period of the prior fiscal year. The increase in revenue is primarily due to an increase in shipments against an annual contract for an international military program. Revenue from the visible components product group for the first quarter of fiscal 2024 was $2.7 million, a decrease of 18%, as compared to the same quarter of the prior fiscal year. The decrease in revenue is primarily due to a decrease in sales to customers in the telecommunications industry in China and a decrease in sales through catalog and distribution channels in the U.S. and in Europe. Revenue from assemblies and modules increased by 45%, as compared to the same period of the prior fiscal year. Approximately one-third of this increase is due to the addition of Visimid product sales; the remaining increase is driven by sales to customers in the defense industry, and increased sales of a custom visible lens assembly to a medical customer, for which we have an end of life order in backlog going into fiscal 2025. Revenue from engineering services increased by $253,000, as compared to the same period of the prior fiscal year. The majority of this increase is due to the addition of Visimid sales. The remaining increase is driven by revenue from one of our space-related funded research contracts.

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Cost of Sales and Gross Margin

Gross margin in the first quarter of fiscal 2024 was approximately $2.3 million, an increase of $98,000, or 4%, as compared to the same period of the prior fiscal year. Total cost of sales was approximately $5.7 million for the first quarter of fiscal 2024, compared to approximately $5.1 million for the same period of the prior fiscal year. Gross margin as a percentage of revenue was 29% for the first quarter of fiscal 2024, compared to 30% for the same period of the prior fiscal year. The decrease in gross margin as a percentage of revenue is due to the decrease in visible components sales, which typically have higher margins than our infrared components product group, which comprised a greater portion of our sales for the first quarter of fiscal 2024.

Selling, General and Administrative

SG&A costs were approximately $2.7 million for the first quarter of fiscal 2024, an increase of approximately $23,000, or 1%, as compared to approximately $2.6 million in the same period of the prior fiscal year. The increase in SG&A costs is primarily due to costs of approximately $83,000 associated with the acquisition of Visimid, which closed in July 2023. These costs were partially offset by a decrease in stock compensation.

New Product Development

New product development costs were approximately $640,000 in the first quarter of fiscal 2024, an increase of approximately $90,000, or 16%, as compared to the same period of the prior fiscal year. The increase is primarily due to materials and outside services utilized for development projects.

Other Income (Expense)

Interest expense, net, was approximately $58,000 for the first quarter of fiscal 2024, as compared to $70,000 for the same period of the prior fiscal year. The decrease in interest expense is primarily due to a decrease in amortization of loan costs of approximately $19,000, as all loan costs have been fully amortized in prior periods. Total debt has decreased 38% as of the quarter ended September 30, 2023, as compared to the quarter ended September 30, 2022, while the interest rate on our largest loan balance has increased from 5% to 8.5% for the same period.

Other income, net, was approximately $5,000 for the first quarter of fiscal 2023, as compared to $27,000 for the same period of the prior fiscal year. Other income and expenses are primarily comprised of net gains and losses on foreign exchange transactions. We execute all foreign sales from our U.S. facilities and inter-company transactions in U.S. dollars, partially mitigating the impact of foreign currency fluctuations. Assets and liabilities denominated in non-United States currencies, primarily the Chinese Yuan and Euro, are translated at rates of exchange prevailing on the balance sheet date, and revenues and expenses are translated at average rates of exchange for the year. We incurred foreign currency transaction gains of $25,000 and $23,000 during the first quarter of fiscal 2024 and 2023, respectively.

Income Taxes

During the first quarter of fiscal 2024, income tax expense was approximately $40,000, compared to $102,000 for the same period of the prior fiscal year. Income tax expense is primarily related to income taxes from our operations in China, including estimated Chinese withholding taxes associated with intercompany dividends declared by LPOIZ and payable to us as its parent company. The decrease is due to lower taxable income in that jurisdiction.

Net Loss

Net loss for the first quarter of fiscal 2024 was approximately $1.3 million, or $0.04 basic and diluted loss per share, compared to $1.4 million, or $0.05 basic and diluted loss per share, for the same quarter of the prior fiscal year.The decrease in net loss of approximately $38,000 for the first quarter of fiscal 2024, as compared to the same period of the prior fiscal year, was primarily attributable to the favorable change in the provision for income taxes.

Weighted-average common shares outstanding were 37,431,748, basic and diluted, in the first quarter of fiscal 2024, compared to 27,070,949, basic and diluted, in the first quarter of fiscal 2023. The increase in the weighted-average basic common shares was due to the sale of an aggregate of 9,090,910 shares of Class A common stock pursuant to a public offering which closed January 17, 2023, as well as the issuance of shares of Class A common stock under the 2014 ESPP and underlying vested RSUs and RSAs.

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Potential Impact of Economic Conditions in China

Due to our operations in China, our business, results of operations, financial condition and prospects may be influenced to a significant degree by economic, political, legal and social conditions in China. China’s economy differs from the economies of other countries in many respects, including with respect to the level of development, growth rate, amount of government involvement, control of foreign exchange and allocation of resources. While China’s economy has experienced significant growth over the past several decades, its growth rate has declined in recent years and may continue to decline. According to the National Bureau of Statistics of China, the annual economic growth rate in China was 6.9% in 2017, 6.8% in 2018, 6.1% in 2019, 2.3% in 2020, 8.1% in 2021, and 3% in 2022. The annual economic growth rate in 2023 is estimated to be 5.1%, although some analysts have indicated that China’s economic growth could be lower. Deteriorating economic conditions in China generally and as a result of China’s zero-COVID strategy, have led to lower demand for the Company’s products in China and thus lower revenues and net income for our subsidiaries in China and the Company overall. A continuation of China’s current economic conditions or a further slowdown in the economic growth, an economic downturn, a recession, or other adverse economic conditions in China is likely to have a material adverse effect on our business and results of operations in future quarters.

Liquidity and Capital Resources

As of September 30, 2023, we had working capital of approximately $11.4 million and total cash, cash equivalents and restricted cash of approximately $6.9 million, of which, greater than 25% of our cash and cash equivalents was held by our foreign subsidiaries.

Cash and cash equivalents held by our foreign subsidiaries in China and Latvia were generated in-country as a result of foreign earnings. We routinely declare intercompany dividends to remit a portion of the earnings of our foreign subsidiaries to us, as the U.S. parent company. It is still our intent to reinvest a significant portion of earnings generated by our foreign subsidiaries, however, we also plan to repatriate a portion of their earnings, and we accrue for these taxes on the portion of earnings that we intend to repatriate.

In China, before any funds can be repatriated, the retained earnings of the legal entity must equal at least 50% of the registered capital. As of September 30, 2023, LPOIZ had approximately $2.7 million available for repatriation and LPOI did not have any earnings available for repatriation, based on earnings accumulated through December 31, 2022, the end of the most recent statutory tax year, that remained undistributed as of September 30, 2023.

Loans payable consists of the BankUnited Term Loan, pursuant to the Amended Loan Agreement, two third-party equipment loans, and the ANBTX Note. As of September 30, 2023, the outstanding balance on the BankUnited Term Loan was approximately $2.0 million, the outstanding balance on the equipment loans was approximately $361,000, and the outstanding balance on the ANBTX Loan was $150,000.

Pursuant to that certain Fourth Amendment to the Loan Agreement dated February 7, 2023, the BankUnited Term Loan, the only remaining BankUnited Loan, matures and is due and payable in full on December 31, 2024. The BankUnited Term Loan bears interest at BankUnited’s then prime rate of interest, as adjusted from time to time (8.5% as of September 30, 2023). Monthly payments of $75,000 are due and payable on the first day of each month, and commencing on January 1, 2024 and continuing on the first day of each month thereafter until the maturity date, monthly payments will increase to $100,000, with each such payment applied first to interest, costs and expenses and then to principal. Upon maturity, all principal and interest shall be immediately due and payable. Pursuant to that certain Fifth Amendment to the Loan Agreement dated May 9, 2023, the security interest in certain collateral securing the Term Loan as of such date terminated and was replaced by a security interest in a cash collateral account maintained at BankUnited, initially in the amount of approximately $2,457,000, with a portion of such cash collateral to be released on a quarterly basis equal to 110% of the principal reductions effected during that quarter. The cash collateral is reflected as Restricted Cash in the accompanying unaudited Condensed Consolidated Balance Sheets as of September 30, 2023 and June 30, 2023. An exit fee equal to 1% of the outstanding principal balance will be due on December 31, 2023 and (b) 4% of the outstanding principal balance on December 31, 2024 (to the extent the Term Loan is still outstanding on the respective dates and has not been refinanced with another lender).

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Cash Flows – Operating:

Cash provided by operations was approximately $1.1 million for the first three months of fiscal 2024, compared to cash used in operations of approximately $415,000 for the same period of the prior fiscal year.Cash provided by operations for the first three months of fiscal 2024 was largely driven by decrease in accounts receivable, as sales were higher in the fourth quarter of fiscal 2023 than in the first quarter of fiscal 2024. Cash used in operations in the first three months of fiscal 2023 reflects a decrease in accounts payable and accrued liabilities during such period resulting from the payment of certain expenses related to previously disclosed events that occurred at our Chinese subsidiaries, which were accrued in prior periods.

Cash Flows – Investing:

During the first three months of fiscal 2024, we expended approximately $955,000 in investments in capital equipment, compared to approximately $243,000 in the same period of the prior fiscal year. We also expended approximately $572,000, net of cash acquired, to acquire Visimid during the first three months of fiscal 2024, as disclosed in Note 3, Acquisition of Visimid Technologies, in the unaudited Condensed Consolidated Financial Statements. The first three months of fiscal 2024 also reflect proceeds of approximately $365,000 from sale-leasebacks of equipment. The spending in the first three months of fiscal 2024 is largely driven by the Orlando Facility expansion, whereas the majority of our capital expenditures during the first three months of fiscal 2023 reflected only maintenance capital expenditures.As disclosed in Note 11, Leases, in the unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q, we constructed additional tenant improvements in our Orlando Facility subject to our continuing lease, of which the landlord agreed to provide $2.4 million in tenant improvement allowances. The balance of the tenant improvement costs is estimated to be $3.8 million. During the first quarter of fiscal 2024, we expended $890,000 toward this project, with the remaining estimated $550,000 expected to be expended during the second quarter of fiscal 2024, pending final construction invoices.

Cash Flows – Financings:

Net cash used in financing activities was approximately $214,000 for the first three months of fiscal 2024, compared to approximately $187,000 in the same period of the prior fiscal year. Cash used in financing activities for the first three months of fiscal 2024 reflects $234,000 in principal payments on our loans and finance leases, offset by approximately $20,000 in proceeds from the sale of Class A common stock under the 2014 ESPP. Cash used in financing activities for the first three months of fiscal 2023 reflects approximately $207,000 in principal payments on our loans and finance leases, offset by approximately $20,000 in proceeds from the sale of Class A common stock under the 2014 ESPP.

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Contractual Obligations and Commitments

As of September 30, 2023, our principal commitments consisted of obligations under operating and finance leases, and debt agreements. No material changes occurred during the first three months of fiscal 2024 in our contractual cash obligations to repay debt or to make payments under operating and finance leases, or in our contingent liabilities as disclosed in our Annual Report on Form 10-K for the year ended June 30, 2023.

Off Balance Sheet Arrangements

We do not engage in any activities involving variable interest entities or off-balance sheet arrangements.

Critical Accounting Policies and Estimates

There have been no material changes to our critical accounting policies and estimates during the three months ended September 30, 2023 from those disclosed in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the year ended June 30, 2023.

How We Operate

We have continuing sales of two basic types: sales via ad-hoc purchase orders of mostly standard product configurations (our “turns” business) and the more challenging and potentially more rewarding business of customer product development. In this latter type of business, we work with customers to help them determine optical specifications and even create certain optical designs for them, including complex, multi-component, integrated designs that we call “engineered solutions.” These engineered solutions are often based on existing reference designs we have demonstrated, that then get further customized to the customer’s specific needs. This is followed by “sampling” small numbers of the product for the customers’ test and evaluation. Thereafter, should a customer conclude that our specification or design is the best solution to their product need; we negotiate and “win” a contract (sometimes called a “design win”) – whether of a “blanket purchase order” type or a supply agreement. The strategy is to create an annuity revenue stream that leverages our engineering capabilities and makes the best use of our production capacity, as compared to the turns business, which is unpredictable and uneven. A key business objective is to convert as much of our business to the design win and annuity model as is possible. We face several challenges in doing so:

	·	Maintaining an optical design and new product design and sampling capability, including a high-quality and responsive optical design engineering staff, and proactive design of reference designs or technology demonstrators;

	·	The fact that as our customers take products of this nature into higher volume, commercial production (for example, in the case of molded optics, this may be volumes over one million pieces per year) they begin to focus on reducing costs – which often leads them to turn to larger or overseas producers, even if sacrificing quality; and

	·	Our small business mass means that we can only offer a moderate amount of total productive capacity before we reach financial constraints imposed by the need to make additional capital expenditures – in other words, because of our limited cash resources and cash flow, we may not be able to service every opportunity that presents itself in our markets without arranging for such additional capital expenditures.

Despite these challenges to winning more “annuity” and “engineered solutions” business, we nevertheless believe we can be successful in procuring this business because of our unique capabilities in optical design engineering and manufacturing. Additionally, we believe that we offer value to some customers as a source of supply in the U.S. should they be unwilling to commit to purchase their supply of a critical component from foreign production sources. For information regarding revenue recognition related to our various revenue streams, refer to Critical Accounting Policies and Estimates in our Annual Report on Form 10-K dated June 30, 2023.

Our Key Performance Indicators:

Typically, on a weekly basis, management reviews a number of performance indicators, both qualitative and quantitative. These indicators change from time to time as the opportunities and challenges in the business change. These indicators are used to determine tactical operating actions and changes. We believe that our non-financial production indicators, such as those noted, are proprietary information.

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Financial indicators that are considered key and reviewed regularly are as follows:

	·	Sales backlog;

	·	Revenue by product group; and

	·	Other key indicators.

These indicators are also used to determine tactical operating actions and changes and are discussed in more detail below. Management continues to evaluate these key indicators as we transition to our new strategic plan, and is implementing certain changes and updates as further described below.

Sales Backlog

We believe our sales growth has been and continues to be our best indicator of success. Our best view into the efficacy of our sales efforts is in our “order book.” Our order book equates to sales “backlog.” It has a quantitative and a qualitative aspect: quantitatively, our backlog’s prospective dollar value and qualitatively, what percent of the backlog is scheduled by the customer for date-certain delivery. We evaluate our total backlog, which includes all firm orders requested by a customer that are reasonably believed to remain in the backlog and be converted into revenues. This includes customer purchase orders and may include amounts under supply contracts if they meet the aforementioned criteria. Generally, a higher total backlog is better for us.

Our total backlog at September 30, 2023 was approximately $21.3 million, a decrease of 7%, as compared to $23.0 million as of September 30, 2022. Compared to the end of fiscal 2023, our total backlog decreased by 2% during the first three months of fiscal 2024. Backlog change rates for the last five fiscal quarters are:

Quarter	Total Backlog ($ 000)		Change From Prior Year End			Change From Prior Quarter End
Q1 2023	$	22,973		29	%		29	%
Q2 2023	$	29,427		66	%		28	%
Q3 2023	$	26,620		50	%		-10	%
Q4 2023	$	21,652		22	%		-19	%
Q1 2024	$	21,303		-2	%		-2	%

The decrease in backlog during the first three months of fiscal 2024 is primarily due shipments against several annual and multi-year contract renewals, which orders were added to the backlog in prior periods. Shipments during the first quarter of fiscal 2024 were partially offset by one significant contract renewal for advanced infrared optics for a critical international military program, which renewal represented a 40% increase in dollar value as compared to the previous order. The timing of multi-year contract renewals are not always consistent and, thus, backlog levels may increase substantially when annual and multi-year orders are received, and decrease as shipments are made against these orders.We anticipate that our existing annual and multi-year contracts will be renewed in future quarters.

Markets continue to experience growing demand for infrared products used in the industrial, defense and first responder sectors. Demand for infrared products continues to be fueled by interest in lenses made with our proprietary BD6 and our new BDNL4 materials. With the global supply of germanium currently concentrated in Russia and China, recent global events are generating renewed interest in germanium alternatives such as our proprietary BD6 material, and other materials we are currently developing under an exclusive license with the Naval Research Lab. As we have outlined in our Strategic direction, we do not expect to see significant growth in our visible components product group in the near future. Competition in that product group has grown substantially over the last few years, and some of our new molding capabilities and technologies such as free-form molded optics, might take longer than anticipated to reach full commercialization, depending on economic conditions and technology trends in the area of AR/VR. However, order bookings for both visible and infrared components and assemblies continue to be slow in China. Domestic sales in China have also been adversely impacted by the economic downturn in China, which continues to negatively impact revenue and bookings in that region.

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Revenue by Product Group

The following table sets forth revenue for our four product groups for the three-month periods ended September 30, 2023 and 2022:

	(unaudited)
	Three Months Ended September 30,
	2023		2022
Revenue
Infrared components	$	3,834,602	$	3,189,551
Visible components		2,688,335		3,267,658
Assemblies and modules		1,262,039		870,732
Engineering services		292,272		38,960
Total revenue	$	8,077,248	$	7,366,901

Three months ended September 30, 2023

Our revenue increased by 10% in the first quarter of fiscal 2024, as compared to the same quarter of the prior fiscal year, driven by increases in sales of infrared components, assemblies and modules, and engineering services.

Revenue generated by the infrared components product group for the first quarter of fiscal 2024 was $3.8 million, an increase of 20%, as compared to same quarter of the prior fiscal year. The increase in revenue is primarily due to an increase in shipments against an annual contract for an international military program. This contract was also renewed during the first quarter of fiscal 2024 for a higher dollar value than the previous contract.

Revenue from the visible components product group for the first quarter of fiscal 2024 was $2.7 million, a decrease of 18%, as compared to the same quarter of the prior fiscal year. The decrease in revenue is primarily due to a decrease in sales to customers in the telecommunications industry in China and a decrease in sales of through catalog and distribution channels in the U.S. and in Europe.

Revenue from assemblies and modules increased by 45%, as compared to the same period of the prior fiscal year. Approximately one-third of this increase is due to the addition of Visimid product sales. The remaining increase is driven by sales to customers in the defense industry, and increased sales of a custom visible lens assembly to a medical customer, for which we have an end of life order in backlog going into fiscal 2025.

Revenue from engineering services increased by $253,000, as compared to the same period of the prior fiscal year. Approximately $175,000 of this increase is due to the addition of Visimid sales. The remaining increase is driven by revenue from one of our space-related funded research contracts.

Other Key Indicators

Other key indicators include various operating metrics, some of which are qualitative and others are quantitative. These indicators change from time to time as the opportunities and challenges in the business change. They are mostly non-financial indicators, such as evaluating the pipeline of sales opportunities, on time delivery trends, production yield rates by major product line, and the output and yield data from significant intermediary manufacturing processes that support the production of the finished shippable product. The data from these reports is used to determine tactical operating actions and changes. Management also assesses business performance and makes business decisions regarding our operations using certain non-GAAP measures. These non-GAAP measures are described in more detail below under the heading “Non-GAAP Financial Measures.”

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Non-GAAP Financial Measures

We report our historical results in accordance with GAAP; however, our management also assesses business performance and makes business decisions regarding our operations using certain non-GAAP financial measures. We believe these non-GAAP financial measures provide useful information to management and investors that is supplementary to our financial condition and results of operations computed in accordance with GAAP; however, we acknowledge that our non-GAAP financial measures have a number of limitations. As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies use.

EBITDA

EBITDA is a non-GAAP financial measure used by management, lenders, and certain investors as a supplemental measure in the evaluation of some aspects of a corporation’s financial position and core operating performance. Investors sometimes use EBITDA, as it allows for some level of comparability of profitability trends between those businesses differing as to capital structure and capital intensity by removing the impacts of depreciation and amortization. EBITDA also does not include changes in major working capital items, such as receivables, inventory and payables, which can also indicate a significant need for, or source of, cash. Since decisions regarding capital investment and financing and changes in working capital components can have a significant impact on cash flow, EBITDA is not necessarily a good indicator of a business’s cash flows. We use EBITDA for evaluating the relative underlying performance of our core operations and for planning purposes. We calculate EBITDA by adjusting net income to exclude net interest expense, income tax expense or benefit, depreciation and amortization, thus the term “Earnings Before Interest, Taxes, Depreciation and Amortization” and the acronym “EBITDA.”

We believe EBITDA is helpful for investors to better understand our underlying business operations. The following table adjusts net loss to EBITDA for the three months ended September 30, 2023 and 2022:

	(unaudited)
	Quarter Ended September 30,
	2023			2022
Net loss	$	(1,342,376	)	$	(1,380,700	)
Depreciation and amortization		813,556			816,334
Income tax provision		39,546			102,134
Interest expense		57,611			70,370
EBITDA	$	(431,663	)	$	(391,862	)
% of revenue		-5	%		-5	%

Our EBITDA for the quarter ended September 30, 2023 was a loss of approximately $432,000, compared to $392,000 for the same period of the prior fiscal year. The decrease in EBITDA in the first quarter of fiscal 2024 was primarily attributable to other income and expenses (non-operating).

Item 4. Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of September 30, 2023, the end of the period covered by this Quarterly Report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2023 in reporting on a timely basis information required to be disclosed by us in the reports we file or submit under the Exchange Act.

There have not been any significant changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the quarter ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II OTHER INFORMATION

Item 1. Legal Proceedings

None

Item 1A. Risk Factors

Our business, operations, and financial condition are subject to various risks and uncertainties. The risk factors described in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K, for the year ended June 30, 2023, should be carefully considered, together with the other information contained or incorporated by reference in this Quarterly Report on Form 10-Q and in our other filings with the SEC in connection with evaluating us, our business, and the forward-looking statements contained in this Quarterly Report on Form 10-Q. During the three months ended September 30, 2023, there have been no material changes from the risk factors previously disclosed under Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K, for the year ended June 30, 2023.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

None

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

None

Item 5. Other Information

During the three months ended September 30, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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Item 6. Exhibits

The following exhibits are filed herewith as a part of this report.

Exhibit Number		Description

3.1.1		Certificate of Incorporation of LightPath Technologies, Inc., filed June 15, 1992 with the Secretary of State of Delaware, which was filed as Exhibit 3.1.1 to our Annual Report on Form 10-K (File No. 000-27548) filed with the Securities and Exchange Commission on September 10, 2020, and is incorporated herein by reference thereto.

3.1.2		Certificate of Amendment to Certificate of Incorporation of LightPath Technologies, Inc., filed October 2, 1995 with the Secretary of State of Delaware, which was filed as Exhibit 3.1.2 to our Annual Report on Form 10-K (File No. 000-27548) filed with the Securities and Exchange Commission on September 10, 2020, and is incorporated herein by reference thereto.

3.1.3		Certificate of Designations of Class A common stock and Class E-1 common stock, Class E-2 common stock, and Class E-3 common stock of LightPath Technologies, Inc., filed November 9, 1995 with the Secretary of State of Delaware, which was filed as Exhibit 3.1.3 to our Annual Report on Form 10-K (File No. 000-27548) filed with the Securities and Exchange Commission on September 10, 2020, and is incorporated herein by reference thereto.

3.1.4		Certificate of Designation of Series A Preferred Stock of LightPath Technologies, Inc., filed July 9, 1997 with the Secretary of State of Delaware, which was filed as Exhibit 3.4 to our Annual Report on Form 10-KSB40 filed with the Securities and Exchange Commission on September 11, 1997, and is incorporated herein by reference thereto.

3.1.5		Certificate of Designation of Series B Stock of LightPath Technologies, Inc., filed October 2, 1997 with the Secretary of State of Delaware, which was filed as Exhibit 3.2 to our Quarterly Report on Form 10-QSB (File No. 000-27548) filed with the Securities and Exchange Commission on November 14, 1997, and is incorporated herein by reference thereto.

3.1.6		Certificate of Amendment of Certificate of Incorporation of LightPath Technologies, Inc., filed November 12, 1997 with the Secretary of State of Delaware, which was filed as Exhibit 3.1 to our Quarterly Report on Form 10-QSB (File No. 000-27548) filed with the Securities and Exchange Commission on November 14, 1997, and is incorporated herein by reference thereto.

3.1.7		Certificate of Designation of Series C Preferred Stock of LightPath Technologies, Inc., filed February 6, 1998 with the Secretary of State of Delaware, which was filed as Exhibit 3.2 to our Registration Statement on Form S-3 (File No. 333-47905) filed with the Securities and Exchange Commission on March 13, 1998, and is incorporated herein by reference thereto.

3.1.8		Certificate of Designation, Preferences and Rights of Series D Participating Preferred Stock of LightPath Technologies, Inc. filed April 29, 1998 with the Secretary of State of Delaware, which was filed as Exhibit 1 to our Registration Statement on Form 8-A (File No. 000-27548) filed with the Securities and Exchange Commission on April 28, 1998, and is incorporated herein by reference thereto.

3.1.9		Certificate of Designation of Series F Preferred Stock of LightPath Technologies, Inc., filed November 2, 1999 with the Secretary of State of Delaware, which was filed as Exhibit 3.2 to our Registration Statement on Form S-3 (File No: 333-94303) filed with the Securities and Exchange Commission on January 10, 2000, and is incorporated herein by reference thereto.

3.1.10		Certificate of Amendment of Certificate of Incorporation of LightPath Technologies, Inc., filed February 28, 2003 with the Secretary of State of Delaware, which was filed as Appendix A to our Proxy Statement (File No. 000-27548) filed with the Securities and Exchange Commission on January 24, 2003, and is incorporated herein by reference thereto.

3.1.11		Certificate of Amendment of Certificate of Incorporation of LightPath Technologies, Inc., filed March 1, 2016 with the Secretary of State of Delaware, which was filed as Exhibit 3.1.11 to our Quarterly Report on Form 10-Q (File No: 000-27548) filed with the Securities and Exchange Commission on November 14, 2016, and is incorporated herein by reference thereto.

3.1.12		Certificate of Amendment of Certificate of Incorporation of LightPath Technologies, Inc., filed October 30, 2017 with the Secretary of State of Delaware, which was filed as Exhibit 3.1 to our Current Report on Form 8-K (File No: 000-27548) filed with the Securities and Exchange Commission on October 31, 2017, and is incorporated herein by reference thereto.

3.1.13		Certificate of Amendment of Certificate of Designations of Class A Common Stock and Class E-1 Common Stock, Class E-2 Common Stock, and Class E-3 Common Stock of LightPath Technologies, Inc., filed October 30, 2017 with the Secretary of State of Delaware, which was filed as Exhibit 3.2 to our Current Report on Form 8-K (File No: 000-27548) filed with the Securities and Exchange Commission on October 31, 2017, and is incorporated herein by reference thereto.

3.1.14		Certificate of Amendment of Certificate of Designation, Preferences and Rights of Series D Participating Preferred Stock of LightPath Technologies, Inc., filed January 30, 2018 with the Secretary of State of Delaware, which was filed as Exhibit 3.1 to our Current Report on Form 8-K (File No: 000-27548) filed with the Securities and Exchange Commission on February 1, 2018, and is incorporated herein by references thereto.

3.2.1		Second Amended and Restated Bylaws of LightPath Technologies, Inc., which was filed as Exhibit 3.1 to our Current Report on Form 8-K (File No: 000-27548) filed with the Securities and Exchange Commission on February 3, 2021, and is incorporated herein by reference thereto.

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31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934*

31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934*

32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 of Chapter 63 of Title 18 of the United States Code*

32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 of Chapter 63 of Title 18 of the United States Code*

101.INS	Inline XBRL Instance Document	*

101.SCH	Inline XBRL Taxonomy Extension Schema Document	*

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document	*

101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document	*

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document	*

101.PRE	Inline XBRL Taxonomy Presentation Linkbase Document	*

104	Cover Page Interactive Data File – formatted in Inline XBRL and contained in Exhibit 101	*

*filed herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	LIGHTPATH TECHNOLOGIES, INC.

Date: November 9, 2023	By:	/s/ Shmuel Rubin
		Shmuel Rubin President and Chief Executive Officer

Date: November 9, 2023	By:	/s/ Albert Miranda
		Albert Miranda Chief Financial Officer

nullnullnullnull

Cover - shares	3 Months Ended
Cover - shares	Sep. 30, 2023	Nov. 06, 2023
Cover [Abstract]
Entity Registrant Name	LIGHTPATH TECHNOLOGIES, INC.
Entity Central Index Key	0000889971
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--06-30
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Sep. 30, 2023
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2024
Entity Common Stock Shares Outstanding		37,469,716
Entity File Number	000-27548
Entity Incorporation State Country Code	DE
Entity Tax Identification Number	86-0708398
Entity Address Address Line 1	2603 Challenger Tech Ct
Entity Address Address Line 2	Suite 100
Entity Address City Or Town	Orlando
Entity Address State Or Province	FL
Entity Address Postal Zip Code	32826
City Area Code	407
Local Phone Number	382-4003
Security 12b Title	Class A Common Stock, par value $0.01
Trading Symbol	LPTH
Security Exchange Name	NASDAQ
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes

Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2023	Jun. 30, 2023
Current assets:
Cash and cash equivalents	$ 4,316,965	$ 4,687,004
Restricted cash	2,542,993	2,457,486
Trade accounts receivable, net of allowance of $21,089 and $18,502	5,024,024	6,634,574
Inventories, net	7,503,496	7,410,734
Prepaid expenses and other assets	558,204	570,293
Other receivables	27,083	0
Total current assets	19,972,765	21,760,091
Property and equipment, net	15,593,252	12,810,930
Operating lease right-of-use assets	7,571,878	9,571,604
Intangible assets, net	3,051,444	3,332,715
Goodwill	8,915,637	5,854,905
Deferred tax assets, net	140,000	140,000
Other assets	67,773	65,939
Total assets	55,312,749	53,536,184
Current liabilities:
Accounts payable	2,907,279	2,574,135
Accrued liabilities	1,740,083	662,242
Accrued payroll and benefits	1,478,250	1,499,896
Operating lease liabilities, current	1,016,940	969,890
Loans payable, current portion	1,269,340	1,023,814
Finance lease obligation, current portion	112,352	103,646
Total current liabilities	8,524,244	6,833,623
Deferred tax liabilities, net	467,979	465,000
Accrued liabilities, noncurrent	1,075,000	0
Finance lease obligation, less current portion	340,716	341,201
Operating lease liabilities, noncurrent	8,773,442	8,393,248
Loans payable, less current portion	1,236,633	1,550,587
Total liabilities	20,418,014	17,583,659
Stockholders' equity:
Preferred stock: Series D, $.01 par value, voting; 500,000 shares authorized; none issued and outstanding	0	0
Common stock: Class A, $.01 par value, voting; 44,500,000 shares authorized; 37,455,438 and 34,344,739 shares issued and outstanding	374,554	373,447
Additional paid-in capital	243,217,458	242,808,771
Accumulated other comprehensive income	481,328	606,536
Accumulated deficit	(209,178,605)	(207,836,229)
Total stockholders' equity	34,894,735	35,952,525
Total liabilities and stockholders' equity	$ 55,312,749	$ 53,536,184

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Sep. 30, 2023	Jun. 30, 2023
Condensed Consolidated Balance Sheets
Allowance For Doubtful Trade Accounts Receivable	$ 21,089	$ 18,502
Preferred Stock: Series D, Par Value	$ 0.01	$ 0.01
Preferred Stock: Series D, Shares Authorized	500,000	500,000
Preferred Stock: Series D, Shares Issued	0	0
Preferred Stock: Series D, Shares Outstanding	0	0
Common Stock: Class A, Par Value	$ 0.01	$ 0.01
Common Stock: Class A, Shares Authorized	44,500,000	44,500,000
Common Stock: Class A, Shares Issued	37,455,438	34,344,739
Common Stock: Class A, Shares Outstanding	37,455,438	34,344,739

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($)	3 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)
Revenue, net	$ 8,077,248	$ 7,366,901
Cost of sales	5,745,542	5,132,989
Gross margin	2,331,706	2,233,912
Operating expenses:
Selling, general and administrative	2,661,168	2,638,173
New product development	639,889	549,881
Amortization of intangibles	281,271	281,271
Total operating expenses	3,582,328	3,469,325
Operating loss	(1,250,622)	(1,235,413)
Other income (expense):
Interest expense, net	(57,611)	(70,370)
Other income, net	5,403	27,217
Total other (expense), net	(52,208)	(43,153)
Loss before income taxes	(1,302,830)	(1,278,566)
Income tax provision	39,546	102,134
Net loss	(1,342,376)	(1,380,700)
Foreign currency translation adjustment	(125,208)	(917,829)
Comprehensive loss	$ (1,467,584)	$ (2,298,529)
Loss per common share (basic)	$ (0.04)	$ (0.05)
Number of shares used in per share calculation (basic)	37,431,748	27,070,949
Loss per common share (diluted)	$ (0.04)	$ (0.05)
Number of shares used in per share calculation (diluted)	37,431,748	27,070,949

Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Total	Class A Common Stock	Additional Paid-In Capital	Accumulated other comprehensive loss	Retained Earnings (Accumulated Deficit)
Balance, shares at Jun. 30, 2022		27,046,790
Balance, amount at Jun. 30, 2022	$ 29,731,238	$ 270,468	$ 232,315,003	$ 935,125	$ (203,789,358)
Employee Stock Purchase Plan, shares		16,287
Employee Stock Purchase Plan, amount	19,870	$ 163	19,707	0	0
Exercise of Stock Options and RSUs, net, shares		8,852
Exercise of Stock Options and RSUs, net, amount	0	$ 88	(88)	0	0
Stock-based compensation on stock options and RSUs	284,598	0	284,598	0	0
Foreign currency translation adjustment	(917,829)	0	0	(917,829)	0
Net loss	(1,380,700)	$ 0	0	0	(1,380,700)
Balance, shares at Sep. 30, 2022		27,071,929
Balance, amount at Sep. 30, 2022	27,737,177	$ 270,719	232,619,220	17,296	(205,170,058)
Balance, shares at Jun. 30, 2023		37,344,739
Balance, amount at Jun. 30, 2023	35,952,525	$ 373,447	242,808,771	606,536	(207,836,229)
Employee Stock Purchase Plan, shares		14,607
Employee Stock Purchase Plan, amount	19,719	$ 146	19,573	0	0
Foreign currency translation adjustment	(125,208)	0	0	(125,208)	0
Net loss	(1,342,376)	$ 0	0	0	(1,342,376)
Exercise of Stock Options, RSUs and RSAs net, shares		14,482
Exercise of Stock Options, RSUs and RSAs net, amount	0	$ 145	(145)	0	0
Issuance of common stock for acquisition of Visimid, shares		81,610
Issuance of common stock for acquisition of Visimid, amount	150,000	$ 816	149,184	0	0
Stock-based compensation on stock options, RSUs and RSAs	240,075	$ 0	240,075	0	0
Balance, shares at Sep. 30, 2023		37,455,438
Balance, amount at Sep. 30, 2023	$ 34,894,735	$ 374,554	$ 243,217,458	$ 481,328	$ (209,178,605)

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities:
Net loss	$ (1,342,376)	$ (1,380,700)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	813,556	816,334
Interest from amortization of debt costs	0	18,560
Stock-based compensation on stock options, RSUs & RSAs, net	240,075	284,598
Provision for doubtful accounts receivable	19	(12,452)
Change in operating lease assets and liabilities	24,946	(43,531)
Deferred taxes	2,979	(29,596)
Changes in operating assets and liabilities:
Trade accounts receivable	1,399,160	639,725
Other receivables	(27,083)	(82,391)
Inventories	144,978	(20,282)
Prepaid expenses and other assets	13,335	10,874
Accounts payable and accrued liabilities	(129,600)	(616,494)
Net cash provided by (used in) operating activities	1,139,989	(415,355)
Cash flows from investing activities:
Purchase of property and equipment	(955,002)	(243,393)
Acquisition of Visimid Technologies, net of cash acquired	572,141	0
Proceeds from sale-leaseback of equipment	364,710	0
Net cash used in investing activities	(1,162,433)	(243,393)
Cash flows from financing activities:
Proceeds from sale of common stock from Employee Stock Purchase Plan	19,719	19,870
Payments on loans payable	(206,518)	(169,902)
Repayment of finance lease obligations	(27,062)	(37,079)
Net cash used in financing activities	(213,861)	(187,111)
Effect of exchange rate on cash and cash equivalents	(48,227)	(363,163)
Change in cash, cash equivalents and restricted cash	(284,532)	(1,209,022)
Cash and cash equivalents and restricted cash, beginning of period	7,144,490	5,507,891
Cash, cash equivalents and restricted cash, end of period	6,859,958	4,298,869
Supplemental disclosure of cash flow information:
Interest paid in cash	58,397	48,803
Income taxes paid	33,407	140,756
Supplemental disclosure of non-cash investing & financing activities:
Purchase of equipment through finance lease arrangements	$ 46,688	$ 0

Basis of Presentation

3 Months Ended

Sep. 30, 2023

Basis of Presentation

Basis Of Presentaion

1. Basis of Presentation

Significant Accounting Policies

3 Months Ended

Sep. 30, 2023

Significant Accounting Policies

Significant Accounting Policies

2. Significant Accounting Policies

Use of Estimates

Acquisition of Visimid Technologies

3 Months Ended

Sep. 30, 2023

Acquisition of Visimid Technologies

Acquisition of Visimid Technologies

3. Acquisition of Visimid Technologies

Revenue

3 Months Ended

Sep. 30, 2023

Revenue

Revenue

4. Revenue

Product Revenue

Revenue Recognition

Nature of Products

Revenue by product group for the three months ended September 30, 2023 and 2022 was as follows, with 2022 amounts reclassified from those previously reported to conform to current classification:

	Three Months Ended September 30,
	2023		2022
Infrared components	$	3,834,602	$	3,189,551
Visible components		2,688,335		3,267,658
Assemblies and modules		1,262,039		870,732
Engineering services		292,272		38,960
Total revenue	$	8,077,248	$	7,366,901

Inventories

3 Months Ended

Sep. 30, 2023

Inventories

Inventories

5. Inventories

The components of inventories include the following:

	September 30, 2023			June 30, 2023
Raw materials	$	3,125,473		$	2,999,879
Work in process		2,783,997			2,909,439
Finished goods		2,855,851			2,626,106
Allowance for obsolescence		(1,261,825	)		(1,124,690	)
	$	7,503,496		$	7,410,734

The value of tooling in raw materials, net of the related allowance for obsolescence, was approximately $1.4 million and $1.5 million as of September 30, 2023 and June 30, 2023, respectively.

Property and Equipment

3 Months Ended

Sep. 30, 2023

Property and Equipment

Property And Equipment

6. Property and Equipment

Property and equipment are summarized as follows:

	Estimated Lives (Years)	September 30, 2023			June 30, 2023
Manufacturing equipment	5 - 10	$	22,214,409		$	22,296,320
Computer equipment and software	3 - 5		1,000,142			973,549
Furniture and fixtures	5		356,398			350,289
Leasehold improvements	5 - 7		8,362,163			2,742,344
Construction in progress			740,599			3,067,896
Total property and equipment			32,673,711			29,430,398
Less accumulated depreciation and amortization			(17,080,459	)		(16,619,468	)
Total property and equipment, net		$	15,593,252		$	12,810,930

Goodwill and Intangible Assets

3 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets

Goodwill And Intangible Assets

7. Goodwill and Intangible Assets

The change in the net carrying amount of goodwill during the three months ended September 30, 2023 was as follows:

Goodwill at June 30, 2023	$	5,854,905
Acquisition of Visimid		3,060,732
Goodwill at September 30, 2023	$	8,915,637

Identifiable intangible assets were comprised of:

	Useful Lives (Years)		September 30, 2023			June 30, 2023
Customer relationships		15	$	3,590,000		$	3,590,000
Trade secrets		8		3,272,000			3,272,000
Trademarks		8		3,814,000			3,814,000
Total intangible assets				10,676,000			10,676,000
Less accumulated amortization				(7,624,556	)		(7,343,285	)
Total intangible assets, net			$	3,051,444		$	3,332,715

Future amortization of identifiable intangibles is as follows:

Fiscal year ending:
June 30, 2024 (remaining nine months)	$	843,812
June 30, 2025		658,398
June 30, 2026		239,334
June 30, 2027		239,334
After June 30, 2027		1,070,566
	$	3,051,444

Income Taxes

3 Months Ended

Sep. 30, 2023

Income Taxes

Income Taxes

8. Income Taxes

A summary of our total income tax expense and effective income tax rate for the three months ended September 30, 2023 and 2022 is as follows:

	Three Months Ended September 30,
	2023			2022
Loss before income taxes	$	(1,302,830	)	$	(1,278,566	)
Income tax provision	$	39,546		$	102,134
Effective income tax rate		-3	%		-8	%

U.S. Federal and State Income Taxes

Income Tax Law of the People’s Republic of China

Law of Corporate Income Tax of Latvia

StockBased Compensation

3 Months Ended

Sep. 30, 2023

StockBased Compensation

Stock-based Compensation

9. Stock-Based Compensation

Stock-based compensation expense is based primarily on the fair value of the award as of the grant date, and is recognized as an expense over the requisite service period.

	Three Months Ended September 30,
	2023		2022

Stock options	$	31,478	$	58,765
RSAs		22,387		—
RSUs		186,210		225,833
Total	$	240,075	$	284,598

Grant Date Fair Values and Underlying Assumptions; Contractual Terms

No stock options were granted during either of the three-month periods ended September 30, 2023 or September 30, 2022.

Restricted Stock Awards

Restricted Stock Units

Information Regarding Current Share-Based Compensation Awards

A summary of the activity for share-based compensation awards in the three months ended September 30, 2023 is presented below:

	Stock Options						Restricted Stock Units (RSUs)					Restricted Stock Awards (RSAs)
			Weighted-		Weighted-					Weighted-					Weighted-
			Average		Average					Average					Average
			Exercise		Remaining					Remaining					Remaining
	Shares		Price		Contract		Shares			Contract		Shares			Contract
June 30, 2023		534,462	$	2.03		6.1		1,596,222			1.1		101,733			0.7

Granted		—	$	—				8,000					—
Exercised		—	$	—				(8,000	)				(8,987	)
Cancelled/Forfeited		—	$	—				—					—
September 30, 2023		534,462	$	2.03		5.9		1,596,222			0.9		92,746			0.5

Awards exercisable/
vested as of
September 30, 2023		396,202	$	1.96		5.5		938,817			—		—

Awards unexercisable/
unvested as of
September 30, 2023		138,260	$	2.21		7.1		657,405			0.9		92,746			0.5
		534,462						1,596,222					92,746

Fiscal Year Ending:	Stock Options		RSAs		RSUs		Total
June 30, 2024 (remaining nine months)		61,959		34,357		230,372		326,688
June 30, 2025		33,885		23,718		130,589		188,192
June 30, 2026		—		—		19,829		19,829
	$	95,844	$	58,075	$	380,790	$	534,709

Earnings (Loss) Per Share

3 Months Ended

Sep. 30, 2023

Earnings (Loss) Per Share

Earnings (loss) Per Share

10. Earnings (Loss) Per Share

	Three Months Ended September 30,
	2023			2022

Net loss	$	(1,342,376	)	$	(1,380,700	)
Weighted-average common shares outstanding:
Basic number of shares		37,431,748			27,070,949
Effect of dilutive securities:
Options to purchase common stock		—			—
RSUs and RSAs		—			—
Diluted number of shares		37,431,748			27,070,949
Loss per common share:
Basic	$	(0.04	)	$	(0.05	)
Diluted	$	(0.04	)	$	(0.05	)

The following potential dilutive shares were not included in the computation of diluted earnings (loss) per share of Class A common stock, as their effects would be anti-dilutive:

	Three Months Ended September 30,
	2023		2022
Options to purchase common stock		534,462		534,462
RSUs and RSAs		1,689,066		2,061,090
		2,223,528		2,595,552

Leases

3 Months Ended

Sep. 30, 2023

Leases

Leases

11. Leases

The components of lease expense were as follows:

	Three Months Ended September 30,
	2023		2022
Operating lease cost	$	205,023	$	231,501
Finance lease cost:
Depreciation of lease assets		19,915		34,111
Interest on lease liabilities		7,536		2,683
Total finance lease cost		27,451		36,794
Total lease cost	$	232,474	$	268,295

Supplemental balance sheet information related to the leases was as follows:

	Classification	September 30, 2023		June 30, 2023
Assets:
Operating lease assets	Operating lease assets	$	7,571,878	$	9,571,604
Finance lease assets	Property and equipment, net⁽¹⁾		637,581		542,105
Total lease assets		$	8,209,459	$	10,113,709

Liabilities:
Current:
Operating leases	Operating lease liabilities, current	$	1,016,940	$	969,890
Finance leases	Finance lease liabilities, current		112,352		103,646

Noncurrent:
Operating leases	Operating lease liabilities, less current portion		8,773,442		8,393,248
Finance leases	Finance lease liabilities, less current portion		340,716		341,201
Total lease liabilities		$	10,243,450	$	9,807,985

⁽¹⁾	Finance lease assets were recorded net of accumulated depreciation of approximately $92,000 and $72,000 as of September 30, 2023 and June 30, 2023, respectively.

Lease term and discount rate information related to leases was as follows:

Lease Term and Discount Rate	September 30, 2023
Weighted Average Remaining Lease Term (in years)
Operating leases		10.1
Finance leases		4.2

Weighted Average Discount Rate
Operating leases		2.9	%
Finance leases		5.7	%

Supplemental cash flow information:

	Three Months Ended September 30,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash used for operating leases	$	180,077	$	268,580
Operating cash used for finance leases	$	7,536	$	2,683
Financing cash used for finance leases	$	27,062	$	37,079

Future maturities of lease liabilities were as follows as of September 30, 2023:

Fiscal year ending:	Finance Leases			Operating Leases
June 30, 2024 (remaining nine months)	$	106,949		$	794,979
June 30, 2025		130,447			1,125,653
June 30, 2026		108,132			1,097,131
June 30, 2027		89,371			1,125,616
June 30, 2028		82,466			1,154,784
Thereafter		—			6,751,714
Total future minimum payments		517,365			12,049,877
Less imputed interest		(64,297	)		(2,259,495	)
Present value of lease liabilities	$	453,068		$	9,790,382

Loans Payable

3 Months Ended

Sep. 30, 2023

Loans Payable

Loans Payable

12. Loans Payable

BankUnited Revolving Line

BankUnited Term Loan

Security and Guarantees

General Terms

Future maturities of loans payable are as follows:

	BankUnited Term Loan		Equipment Loans		ANBTX Note		Total
Fiscal year ending:
June 30, 2024 (remaining nine months)	$	716,301	$	92,874	$	150,000	$	959,175
June 30, 2025		1,278,395		135,486		—		1,413,881
June 30, 2026		—		77,246		—		77,246
June 30, 2027		—		36,464		—		36,464
After June 30, 2027		—		19,207		—		19,207
Total payments	$	1,994,696	$	361,277	$	150,000		2,505,973
Less current portion								(1,269,340	)
Non-current portion							$	1,236,633

Foreign Operations

3 Months Ended

Sep. 30, 2023

Foreign Operations

Foreign Operations

13. Foreign Operations

Revenues from and long-lived assets located in foreign countries are as follows:

	Three Months Ended September 30,
	2023		2022
Revenues:
United States	$	4,293,394	$	2,965,295
Latvia		—		738,612
China		500,138		827,940
Other European countries		2,523,545		2,136,229
Other Asian countries		562,399		449,888
Rest of world		197,772		248,937
	$	8,077,248	$	7,366,901

	September 30, 2023		June 30, 2023
Long-lived assets:
United States	$	27,345,150	$	23,336,063
Latvia		4,954,923		5,282,596
China		3,039,911		3,157,434
	$	35,339,984	$	31,776,093

Contingencies

3 Months Ended

Sep. 30, 2023

Commitments and Contingencies

Contingencies

14. Contingencies

Legal

COVID-19

Potential Impact of Economic Conditions in China

Impact of Russian-Ukraine Conflict

Liquidity

3 Months Ended

Sep. 30, 2023

Liquidity

Liquidity

15. Liquidity

Significant Accounting Policies (Policies)	3 Months Ended
Significant Accounting Policies (Policies)	Sep. 30, 2023
Significant Accounting Policies
Use Of Estimates	Management makes estimates and assumptions during the preparation of our unaudited Condensed Consolidated Financial Statements that affect amounts reported in the unaudited Condensed Consolidated Financial Statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes available, which, in turn, could impact the amounts reported and disclosed herein.

Revenue (Tables)

3 Months Ended

Sep. 30, 2023

Revenue

Disaggregation Of Revenue

	Three Months Ended September 30,
	2023		2022
Infrared components	$	3,834,602	$	3,189,551
Visible components		2,688,335		3,267,658
Assemblies and modules		1,262,039		870,732
Engineering services		292,272		38,960
Total revenue	$	8,077,248	$	7,366,901

Inventories (Tables)

3 Months Ended

Sep. 30, 2023

Inventories

Inventories

	September 30, 2023			June 30, 2023
Raw materials	$	3,125,473		$	2,999,879
Work in process		2,783,997			2,909,439
Finished goods		2,855,851			2,626,106
Allowance for obsolescence		(1,261,825	)		(1,124,690	)
	$	7,503,496		$	7,410,734

Property and Equipment (Tables)

3 Months Ended

Sep. 30, 2023

Property and Equipment

Schedule Of Property And Equipment

	Estimated Lives (Years)	September 30, 2023			June 30, 2023
Manufacturing equipment	5 - 10	$	22,214,409		$	22,296,320
Computer equipment and software	3 - 5		1,000,142			973,549
Furniture and fixtures	5		356,398			350,289
Leasehold improvements	5 - 7		8,362,163			2,742,344
Construction in progress			740,599			3,067,896
Total property and equipment			32,673,711			29,430,398
Less accumulated depreciation and amortization			(17,080,459	)		(16,619,468	)
Total property and equipment, net		$	15,593,252		$	12,810,930

Goodwill and Intangible Assets (Tables)

3 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets

Schdule Of goodwill

Goodwill at June 30, 2023	$	5,854,905
Acquisition of Visimid		3,060,732
Goodwill at September 30, 2023	$	8,915,637

Intangible Assets

	Useful Lives (Years)		September 30, 2023			June 30, 2023
Customer relationships		15	$	3,590,000		$	3,590,000
Trade secrets		8		3,272,000			3,272,000
Trademarks		8		3,814,000			3,814,000
Total intangible assets				10,676,000			10,676,000
Less accumulated amortization				(7,624,556	)		(7,343,285	)
Total intangible assets, net			$	3,051,444		$	3,332,715

Schdule Of Intangible Assets Future Amortization

Fiscal year ending:
June 30, 2024 (remaining nine months)	$	843,812
June 30, 2025		658,398
June 30, 2026		239,334
June 30, 2027		239,334
After June 30, 2027		1,070,566
	$	3,051,444

Income Taxes (Tables)

3 Months Ended

Sep. 30, 2023

Income Taxes

Income Tax Expense And Effective Income Tax Rate

	Three Months Ended September 30,
	2023			2022
Loss before income taxes	$	(1,302,830	)	$	(1,278,566	)
Income tax provision	$	39,546		$	102,134
Effective income tax rate		-3	%		-8	%

StockBased Compensation (Tables)

3 Months Ended

Sep. 30, 2023

StockBased Compensation

Schedule Of Stock-based Compensation Expense

	Three Months Ended September 30,
	2023		2022

Stock options	$	31,478	$	58,765
RSAs		22,387		—
RSUs		186,210		225,833
Total	$	240,075	$	284,598

Summary Of Activity Of Share Based Compensation Awards

	Stock Options						Restricted Stock Units (RSUs)					Restricted Stock Awards (RSAs)
			Weighted-		Weighted-					Weighted-					Weighted-
			Average		Average					Average					Average
			Exercise		Remaining					Remaining					Remaining
	Shares		Price		Contract		Shares			Contract		Shares			Contract
June 30, 2023		534,462	$	2.03		6.1		1,596,222			1.1		101,733			0.7

Granted		—	$	—				8,000					—
Exercised		—	$	—				(8,000	)				(8,987	)
Cancelled/Forfeited		—	$	—				—					—
September 30, 2023		534,462	$	2.03		5.9		1,596,222			0.9		92,746			0.5

Awards exercisable/
vested as of
September 30, 2023		396,202	$	1.96		5.5		938,817			—		—

Awards unexercisable/
unvested as of
September 30, 2023		138,260	$	2.21		7.1		657,405			0.9		92,746			0.5
		534,462						1,596,222					92,746

Schedule Of Share-based Compensation Future Cost To Be Recognized

Fiscal Year Ending:	Stock Options		RSAs		RSUs		Total
June 30, 2024 (remaining nine months)		61,959		34,357		230,372		326,688
June 30, 2025		33,885		23,718		130,589		188,192
June 30, 2026		—		—		19,829		19,829
	$	95,844	$	58,075	$	380,790	$	534,709

Earnings (Loss) Per Share (Tables)

3 Months Ended

Sep. 30, 2023

Earnings (Loss) Per Share

Schedule Of The Computations For Basic And Diluted Earnings (loss) Per Common Share

	Three Months Ended September 30,
	2023			2022

Net loss	$	(1,342,376	)	$	(1,380,700	)
Weighted-average common shares outstanding:
Basic number of shares		37,431,748			27,070,949
Effect of dilutive securities:
Options to purchase common stock		—			—
RSUs and RSAs		—			—
Diluted number of shares		37,431,748			27,070,949
Loss per common share:
Basic	$	(0.04	)	$	(0.05	)
Diluted	$	(0.04	)	$	(0.05	)

Schedule Of Potential Dilutive Shares Were Not Included In The Computation Of Diluted Earnings (loss) Per Common Share

	Three Months Ended September 30,
	2023		2022
Options to purchase common stock		534,462		534,462
RSUs and RSAs		1,689,066		2,061,090
		2,223,528		2,595,552

Leases (Tables)

3 Months Ended

Sep. 30, 2023

Leases

Lease Costs

	Three Months Ended September 30,
	2023		2022
Operating lease cost	$	205,023	$	231,501
Finance lease cost:
Depreciation of lease assets		19,915		34,111
Interest on lease liabilities		7,536		2,683
Total finance lease cost		27,451		36,794
Total lease cost	$	232,474	$	268,295

Supplement Balance Sheet Classification Information

	Classification	September 30, 2023		June 30, 2023
Assets:
Operating lease assets	Operating lease assets	$	7,571,878	$	9,571,604
Finance lease assets	Property and equipment, net⁽¹⁾		637,581		542,105
Total lease assets		$	8,209,459	$	10,113,709

Liabilities:
Current:
Operating leases	Operating lease liabilities, current	$	1,016,940	$	969,890
Finance leases	Finance lease liabilities, current		112,352		103,646

Noncurrent:
Operating leases	Operating lease liabilities, less current portion		8,773,442		8,393,248
Finance leases	Finance lease liabilities, less current portion		340,716		341,201
Total lease liabilities		$	10,243,450	$	9,807,985

Lease Term And Discount Rate

Lease Term and Discount Rate	September 30, 2023
Weighted Average Remaining Lease Term (in years)
Operating leases		10.1
Finance leases		4.2

Weighted Average Discount Rate
Operating leases		2.9	%
Finance leases		5.7	%

Supplemental Lease Information

	Three Months Ended September 30,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash used for operating leases	$	180,077	$	268,580
Operating cash used for finance leases	$	7,536	$	2,683
Financing cash used for finance leases	$	27,062	$	37,079

Future Maturities Of Lease Liabilities

Fiscal year ending:	Finance Leases			Operating Leases
June 30, 2024 (remaining nine months)	$	106,949		$	794,979
June 30, 2025		130,447			1,125,653
June 30, 2026		108,132			1,097,131
June 30, 2027		89,371			1,125,616
June 30, 2028		82,466			1,154,784
Thereafter		—			6,751,714
Total future minimum payments		517,365			12,049,877
Less imputed interest		(64,297	)		(2,259,495	)
Present value of lease liabilities	$	453,068		$	9,790,382

Loans Payable (Tables)

3 Months Ended

Sep. 30, 2023

Loans Payable

Future Maturities Of Loans Payable

	BankUnited Term Loan		Equipment Loans		ANBTX Note		Total
Fiscal year ending:
June 30, 2024 (remaining nine months)	$	716,301	$	92,874	$	150,000	$	959,175
June 30, 2025		1,278,395		135,486		—		1,413,881
June 30, 2026		—		77,246		—		77,246
June 30, 2027		—		36,464		—		36,464
After June 30, 2027		—		19,207		—		19,207
Total payments	$	1,994,696	$	361,277	$	150,000		2,505,973
Less current portion								(1,269,340	)
Non-current portion							$	1,236,633

Foreign Operations (Tables)

3 Months Ended

Sep. 30, 2023

Foreign Operations

Foreign Assets

	Three Months Ended September 30,
	2023		2022
Revenues:
United States	$	4,293,394	$	2,965,295
Latvia		—		738,612
China		500,138		827,940
Other European countries		2,523,545		2,136,229
Other Asian countries		562,399		449,888
Rest of world		197,772		248,937
	$	8,077,248	$	7,366,901

	September 30, 2023		June 30, 2023
Long-lived assets:
United States	$	27,345,150	$	23,336,063
Latvia		4,954,923		5,282,596
China		3,039,911		3,157,434
	$	35,339,984	$	31,776,093

Acquisition of Visimid Technologies (Details Narrative) - Acquisition of Visimid Technologies [Member] - USD ($)	1 Months Ended	3 Months Ended
	Jul. 31, 2023	Sep. 30, 2023	Jun. 30, 2023
Acquisition price of company in cash	$ 1,000,000
Bank debt	150,000
Purchase acquisition of restricted stock	$ 1,550,000
Description of restricted stock installments	the restricted stock payable as part of the purchase price, $150,000 (81,610 shares) was issued at closing, with the balance to be issued on four equal installments of $350,000 each on January 1, 2024, July 1, 2024, January 1, 2025 and July 1, 2025
Purchase price net acquisition cost	$ 2,900,000	$ 83,000	$ 140,000
Acquisition payment amount at the closing period		$ 600,000

Revenue (Details) - USD ($)	3 Months Ended
Revenue (Details) - USD ($)	Sep. 30, 2023	Sep. 30, 2022
Revenues	$ 8,077,248	$ 7,366,901
Infrared Components [Member]
Revenues	3,834,602	3,189,551
Visible Components [Member]
Revenues	2,688,335	3,267,658
Assemblies and Modules [Member]
Revenues	1,262,039	870,732
Engineering Services [Member]
Revenues	$ 292,272	$ 38,960

Inventories (Details) - USD ($)	Sep. 30, 2023	Jun. 30, 2023
Inventories
Raw materials	$ 3,125,473	$ 2,999,879
Work in process	2,783,997	2,909,439
Finished goods	2,855,851	2,626,106
Allowance for obsolescence	1,261,825	1,124,690
Inventories, net	$ 7,503,496	$ 7,410,734

Inventories (Details Narrative) - USD ($)	Sep. 30, 2023	Jun. 30, 2023
Raw materials	$ 3,125,473	$ 2,999,879
Inventory - Tooling
Raw materials	$ 140,000	$ 150,000

Property and Equipment (Details) - USD ($)	3 Months Ended
Property and Equipment (Details) - USD ($)	Sep. 30, 2023	Jun. 30, 2023
Total property and equipment, gross	$ 32,673,711	$ 29,430,398
Less accumulated depreciation and amortization	(17,080,459)	(16,619,468)
Total property and equipment, net	15,593,252	12,810,930
Manufacturing Equipment
Total property and equipment, gross	$ 22,214,409	22,296,320
Manufacturing Equipment \| Minimum [Member]
Estimated life	5 years
Manufacturing Equipment \| Maximum [Member]
Estimated life	10 years
Computer Equipment And Software
Total property and equipment, gross	$ 1,000,142	973,549
Computer Equipment And Software \| Minimum [Member]
Estimated life	3 years
Computer Equipment And Software \| Maximum [Member]
Estimated life	5 years
Furniture And Fixtures
Total property and equipment, gross	$ 356,398	350,289
Estimated life	5 years
Leasehold Improvements
Total property and equipment, gross	$ 8,362,163	2,742,344
Leasehold Improvements \| Minimum [Member]
Estimated life	5 years
Leasehold Improvements \| Maximum [Member]
Estimated life	7 years
Construction In Progress
Total property and equipment, gross	$ 740,599	$ 3,067,896

Goodwill and Intangible Assets (Details)	3 Months Ended
Goodwill and Intangible Assets (Details)	Sep. 30, 2023 USD ($)
Goodwill and Intangible Assets
Goodwill at June 30, 2023	$ 5,854,905
Goodwill at September 30, 2023	8,915,637
Acquisition of Visimid	$ 3,060,732

Goodwill and Intangible Assets (Details 1) - USD ($)	3 Months Ended
Goodwill and Intangible Assets (Details 1) - USD ($)	Sep. 30, 2023	Jun. 30, 2023
Intangible Assets, Gross	$ 10,676,000	$ 10,676,000
Less Accumulated Amortization	(7,624,556)	(7,343,285)
Intangible Assets, Net	3,051,444	3,332,715
Trade Secrets
Intangible Assets, Gross	$ 3,272,000	3,272,000
Useful Life	8 years
Trademark
Intangible Assets, Gross	$ 3,814,000	3,814,000
Useful Life	8 years
Customer Relationships
Intangible Assets, Gross	$ 3,590,000	$ 3,590,000
Useful Life	15 years

Goodwill and Intangible Assets (Details 2) - USD ($)	Sep. 30, 2023	Jun. 30, 2023
Intangible Assets, Net	$ 3,051,444	$ 3,332,715
Intangible Assets [Member]
June 30, 2024 (remaining nine months)	843,812
June 30, 2025	658,398
June 30, 2026	239,334
June 30, 2027	239,334
After June 30, 2027	$ 1,070,566

Income Taxes (Details) - USD ($)	3 Months Ended
Income Taxes (Details) - USD ($)	Sep. 30, 2023	Sep. 30, 2022
Income Taxes
Income (loss) before income taxes	$ (1,302,830)	$ (1,278,566)
Income tax provision	$ 39,546	$ 102,134
Effective income tax rate	(3.00%)	(8.00%)

Income Taxes (Details Narrative) - USD ($)	3 Months Ended
Income Taxes (Details Narrative) - USD ($)	Sep. 30, 2023	Jun. 30, 2023
Effective tax rate	25.00%
Change in statutory income tax rate	20.00%
Unpaid withholding tax	$ 40,000	$ 40,000
CHINA \| L P O I
Statutory income tax rate	25.00%
CHINA \| L P O I Z
Statutory income tax rate	15.00%
U.S. Federal and State
Statutory income tax rate	25.50%

StockBased Compensation (Details) - USD ($)	3 Months Ended
StockBased Compensation (Details) - USD ($)	Sep. 30, 2023	Sep. 30, 2022
Total	$ 240,075	$ 284,598
Restricted Stock Units
Total	22,387	0
Restricted Stock Awards
Total	186,210	225,833
Stock Options
Total	$ 31,478	$ 58,765

StockBased Compensation (Details 1)	3 Months Ended
StockBased Compensation (Details 1)	Sep. 30, 2023 $ / shares shares
Restricted Stock Units
Balance, Beginning, Shares	1,596,222
Granted, Shares	8,000
Exercised, Shares	(8,000)
Balance, Ending, Shares	1,596,222
Exercisable And Vested, Shares	938,817
Unexercisable And Unvested, Shares	657,405
Balance, Beginning	1 year 1 month 6 days
Balance, Ending	10 months 24 days
Exercisable/vested	0 years
Unexercisable/unvesteds	10 months 24 days
Restricted Stock Awards
Balance, Beginning, Shares	101,733
Exercised, Shares	(8,987)
Balance, Ending, Shares	92,746
Unexercisable And Unvested, Shares	92,746
Balance, Beginning	8 months 12 days
Balance, Ending	6 months
Unexercisable/unvesteds	6 months
Stock Options
Balance, Beginning, Shares	534,462
Exercised, Shares	0
Balance, Ending, Shares	534,462
Exercisable And Vested, Shares	396,202
Unexercisable And Unvested, Shares	138,260
Balance Beginning \| $ / shares	$ 2.03
Balance Ending \| $ / shares	2.03
Exercisable And Vested \| $ / shares	1.96
Unexercisable/unvested \| $ / shares	$ 2.21
Balance, Beginning	6 years 1 month 6 days
Balance, Ending	5 years 10 months 24 days
Exercisable/vested	5 years 6 months
Unexercisable/unvesteds	7 years 1 month 6 days

StockBased Compensation (Details 2)	Sep. 30, 2023 USD ($)
Stock Options	$ 95,844
Restricted Stock Units	380,790
Restricted Stock Awards	58,075
Total Unrecognized Compensation Cost	534,709
Year Ending June 30, 2024
Stock Options	61,959
Restricted Stock Units	230,372
Restricted Stock Awards	34,357
Total Unrecognized Compensation Cost	326,688
Year Ending June 30, 2025
Stock Options	33,885
Restricted Stock Units	130,589
Restricted Stock Awards	23,718
Total Unrecognized Compensation Cost	188,192
Year Ending June 30, 2026
Stock Options	0
Restricted Stock Units	19,829
Restricted Stock Awards	0
Total Unrecognized Compensation Cost	$ 19,829

StockBased Compensation (Details Narrative) - USD ($)	3 Months Ended
StockBased Compensation (Details Narrative) - USD ($)	Sep. 30, 2023	Sep. 30, 2022
Discount On Employee Stock Purchase Plan	$ 2,000	$ 2,000
Discount On Employee Stock Purchase Plan, Percentage	10.00%
Total Unrecognized Compensation Cost	$ 534,709
SICP (or Omnibus Plan) \| Class A common stock
Award shares, authorized	1,625,538
SICP (or Omnibus Plan) \| 2018 Annual Stockholders Meeting \| Class A common stock
Award shares, authorized	1,650,870
SICP (or Omnibus Plan) \| 2022 Annual Stockholders Meeting \| Class A common stock
Award shares, authorized	2,100,000
Stock options, RSAs and RSUs
Total Unrecognized Compensation Cost	$ 535,000

Earnings (Loss) Per Share (Details) - USD ($)	3 Months Ended
Earnings (Loss) Per Share (Details) - USD ($)	Sep. 30, 2023	Sep. 30, 2022
Earnings (Loss) Per Share
Net loss	$ (1,342,376)	$ (1,380,700)
Weighted Average Number Of Shares Outstanding
Basic number of shares	37,431,748	27,070,949
Effect of dilutive securities:
Options To Purchase Common Stock	$ 0	$ 0
RSUs and RSAs	$ 0	$ 0
Diluted number of shares	37,431,748	27,070,949
Loss per common share:
Basic	$ (0.04)	$ (0.05)
Diluted	$ (0.04)	$ (0.05)

Earnings (Loss) Per Share (Details 1) - shares	3 Months Ended
Earnings (Loss) Per Share (Details 1) - shares	Sep. 30, 2023	Sep. 30, 2022
Antidilutive Securities	2,223,528	2,595,552
Restricted Stock Units
Antidilutive Securities	1,689,066	2,061,090
Stock Options
Antidilutive Securities	534,462	534,462

Leases (Details) - USD ($)	3 Months Ended
Leases (Details) - USD ($)	Sep. 30, 2023	Sep. 30, 2022
Leases
Operating lease cost	$ 205,023	$ 231,501
Finance lease cost, depreciation of lease assets	19,915	34,111
Finance lease cost, interest on lease liabilities	7,536	2,683
Total finance lease cost	27,451	36,794
Total lease cost	$ 232,474	$ 268,295

Leases (Details 1) - USD ($)	3 Months Ended
Leases (Details 1) - USD ($)	Sep. 30, 2023	Sep. 30, 2022	Jun. 30, 2023
Assets
Operating lease assets	$ 7,571,878		$ 9,571,604
Finance lease assets	637,581		542,105
Total lease assets	8,209,459		10,113,709
Liabilities
Operating leases, current	1,016,940		969,890
Finance leases, current	112,352		103,646
Operating leases, noncurrent	8,773,442		8,393,248
Finance leases, noncurrent	340,716		341,201
Total lease liabilities	$ 10,243,450		$ 9,807,985
Weighted average remaining lease term (in years), operating leases	10 years 1 month 6 days
Weighted average remaining lease term (in years), finance leases	4 years 2 months 12 days
Weighted average discount rate, operating leases	2.90%
Weighted average discount rate, finance leases	5.70%
Operating cash used for operating leases	$ 180,077	$ 268,580
Operating cash used for finance leases	7,536	2,683
Financing cash used for finance leases	$ 27,062	$ 37,079

Leases (Details 2)	Sep. 30, 2023 USD ($)
Finance Lease - Fiscal year ending September 30,
June 30, 2024 (remaining nine months)	$ 106,949
June 30, 2025	130,447
June 30, 2026	108,132
June 30, 2027	89,371
June 30, 2028	82,466
Thereafter	0
Total future minimum payments	517,365
Less imputed interest	(64,297)
Present value of lease liabilities	453,068
Operating Lease - Fiscal Year ending September 30,
June 30, 2024 (remaining nine months)	794,979
June 30, 2025	1,125,653
June 30, 2026	1,097,131
June 30, 2027	1,125,616
June 30, 2028	1,154,784
Thereafter	6,751,714
Total future minimum payments	12,049,877
Less imputed interest	(2,259,495)
Present value of lease liabilities	$ 9,790,382

Leases (Details Narrative) - USD ($)	3 Months Ended
Leases (Details Narrative) - USD ($)	Sep. 30, 2023	Jun. 30, 2023
Leases
Finance Lease Assets, Accumulated Depreciation	$ 92,000	$ 72,000
Lease term	12 years
Operating Lease Expiry Year	2034
Description of leased space	amended in April 2021, and again in September 2021, to expand the space from approximately 26,000 square feet to approximately 58,500 square feet. The lease term was extended from April 30, 2022, to that certain date that is one hundred twenty-seven (127) months after the date the landlord completes certain work to be done at the leased premises. The landlord’s work was completed in August 2023, and accordingly the lease expires on March 31, 2034. In April 2023, we entered into a sublease for 11,156 square feet of this space, as we do not have a current need for the full 58,500 square feet of space. The sublease is for an initial term of five years, ending in April 2029. The second lease on the premises comprising our Orlando Facility was assigned to a third-party and it was agreed that we would vacate the premises, subject to the assigned lease, on November 30, 2022. In December 2022, we entered into an agreement with the assignee of such lease that extended our right to occupy the subject premises until February 28, 2023, in consideration of payments of rent through February 28, 2023, and other amounts to the assignee. In February 2023, the space was vacated and we have no further obligations related to this lease. Effective in January 2022, the terms of our leases in Zhenjiang, China and Riga, Latvia were extended to December 31, 2024 and 2030, respectively
Tenant improvement allowances	$ 2,400,000
Estimated cost of Tenant improvement allowances	$ 3,800,000

Loans Payable (Details) - USD ($)	Sep. 30, 2023	Jun. 30, 2023
Fiscal year ending June 30,
June 30, 2024 (remaining nine months)	$ 959,175
June 30, 2025	1,413,881
June 30, 2026	77,246
June 30, 2027	36,464
After June 30, 2027	19,207
Total Payments	2,505,973
Less current portion	(1,269,340)	$ (1,023,814)
Non-current portion	1,236,633
2020 Equipment Loan
Fiscal year ending June 30,
June 30, 2024 (remaining nine months)	92,874
June 30, 2025	135,486
June 30, 2026	77,246
June 30, 2027	36,464
After June 30, 2027	19,207
Total Payments	361,277
ANBTX Note
Fiscal year ending June 30,
June 30, 2024 (remaining nine months)	150,000
June 30, 2025	0
June 30, 2026	0
June 30, 2027	0
After June 30, 2027	0
Total Payments	150,000
BankUnited Term Loan
Fiscal year ending June 30,
June 30, 2024 (remaining nine months)	716,301
June 30, 2025	1,278,395
June 30, 2026	0
June 30, 2027	0
After June 30, 2027	0
Total Payments	$ 1,994,696

Loans Payable (Details Narrative) - USD ($)		1 Months Ended			3 Months Ended
Loans Payable (Details Narrative) - USD ($)	May 09, 2023	May 31, 2023	Sep. 30, 2021	Dec. 31, 2020	Sep. 30, 2023	Sep. 30, 2022	Feb. 07, 2023	Feb. 26, 2022	Feb. 26, 2019
Total Payments					$ 2,505,973
Interest expense					57,611	$ 70,370
BankUnited [Member]
Revolving Line Maximum Credit Limit									$ 2,000,000
Term Loan									5,813,500
Non Revolving Maximum Credit Limit									$ 10,000,000
Bank United Revolving Line [Member]
Revolving Line Maximum Credit Limit								$ 2,000,000
November 5, 2021 [Member] \| Second Letter Agreement [Member]
Fees Payable					$ 50,000
Interest Rate On Borrowing					4.00%		1.00%
Monthly loan amount payable					$ 100,000
May 11, 2022 [Member] \| Third Amendment [Member]
Amendment Description					an amended maturity date of April 15, 2024 with respect to the Term Loan (as defined in the Amended Loan Agreement); and (ii) an amended exit fee equal to (a) 2% of the outstanding principal balance of the Term Loan on September 30, 2022, (b) 1% of the outstanding principal balance on December 31, 2022, (c) 1% of the outstanding principal balance on March 31, 2023, and (d) 4% of the outstanding principal balance on April 15, 2024 (to the extent the Term Loan is still outstanding on the respective dates)
February 7, 2023 [Member] \| Fourth Amendment [Member]
Principal reduction payment					$ 1,000,000
Monthly loan amount payable					$ 75,000
Interest Rate On Borrowing					4.00%
Fee Paid					$ 100,000
May 9, 2023 [Member] \| Fifth Amendment [Member]
Security interest amount	$ 2,457,000				$ 2,457,000
Interest Rate On Borrowing					110.00%
ANBTX Note
Interest Rate On Borrowing					6.15%
Maturity date					Apr. 14, 2024
Total Payments					$ 150,000
2020 Equipment Loan
Interest Rate On Borrowing					3.30%
Installment Term			52 years	60 months
Advances			$ 267,000	$ 275,000
2023 Equipment Loan
Interest Rate On Borrowing					6.98%
Installment Term		48 years
Advances		$ 141,245
BankUnited Term Loan
Monthly loan amount payable					$ 75,000
Term Loan					$ 5,813,500
Interest Rate On Borrowing					2.75%
Term Loan Tenure					5 years
Maturity date					Dec. 31, 2024
Total Payments					$ 1,994,696
Equal Monthly Principal Payment					$ 48,446
Late payment fee					8.25%
Increase in monthly payment					$ 100,000
Fixed Charge Coverage Ratio					fixed charge coverage ratio of 1.25 to 1.00 and a total leverage ratio of 4.00 to 1.00
Interest expense					$ 19,000
Fee Paid					$ 100,000

Foreign Operations (Details) - USD ($)	3 Months Ended
Foreign Operations (Details) - USD ($)	Sep. 30, 2023	Sep. 30, 2022	Jun. 30, 2023
Revenue, net	$ 8,077,248	$ 7,366,901
Long-lived assets	35,339,984		$ 31,776,093
CHINA
Revenue, net	500,138	827,940
Long-lived assets	3,039,911		3,157,434
LATVIA
Revenue, net	0	738,612
Long-lived assets	4,954,923		5,282,596
Other European countries
Revenue, net	2,523,545	2,136,229
Other Asian countries
Revenue, net	562,399	449,888
Rest of world
Revenue, net	197,772	248,937
United States
Revenue, net	4,293,394	$ 2,965,295
Long-lived assets	$ 27,345,150		$ 23,336,063

Foreign Operations (Details Narrative) - USD ($)	3 Months Ended
Foreign Operations (Details Narrative) - USD ($)	Sep. 30, 2023	Sep. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Gain (loss) On Foreign Currency	$ 25,000	$ 23,000
Cumulative Gain	481,000		$ 607,000
Cash And Cash Equivalents	$ 6,859,958	$ 4,298,869	7,144,490	$ 5,507,891
Percentage Of Amount Held For Foreign Subsidiaries	50.00%
Accumulated earnings	$ (209,178,605)		$ (207,836,229)
L P O I Z
Cash And Cash Equivalents	6,900,000
Accumulated earnings	$ 2,700,000

Contingencies (Details Narrative) - USD ($)	3 Months Ended
Contingencies (Details Narrative) - USD ($)	Sep. 30, 2023	Sep. 30, 2022
Commitments and Contingencies
Contingent Liability Pursuant To Severance Agreements		$ 485,000
Related expenses	$ 718,000	400,000
Legal, consulting and other transitional management fees	$ 718,000	$ 400,000

Liquidity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands		1 Months Ended
	Jan. 12, 2023	Feb. 16, 2022	Sep. 30, 2023	Jun. 30, 2023
Offering Price		$ 7,580
Revised Offering Price		2,520
Decrease in Aggregate Offering Price		$ 5,060
Common stock, par value			$ 0.01	$ 0.01
Common stock, shares Issued			37,455,438	34,344,739
Securities Purchase Agreement
Common stock, par value	$ 0.01
Common stock, shares Issued	9,090,910
Purchase Price, per share	$ 1.10
Description of securities purchase agreement	The sale of shares pursuant to the Purchase Agreement closed on January 17, 2023, and resulted in net proceeds of approximately $9.2 million after payment of placement agent fees, and certain other costs and expenses of the offering