What changed in this filing

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Item 1. Business

2023-09-14 compared with 2022-09-15 · 104 added, 92 removed, 259 unchanged (43% of the section changed)

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Our corporate headquarters is located in Orlando, Florida.

In November 2005, we formed LightPath Optical Instrumentation (Shanghai) Co., Ltd (“LPOI”), a wholly-owned subsidiary, located in Jiading, People’s Republic of China.

The LPOI facility (the “Shanghai Facility”) is primarily used for sales and support functions.

In November 2005, we formed LightPath Optical Instrumentation (Shanghai) Co., Ltd (“LPOI”), a wholly-owned subsidiary, located in Jiading, People’s Republic of China, which is primarily engaged in sales and support functions.

In December 2013, we formed LightPath Optical Instrumentation (Zhenjiang) Co., Ltd.

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ISP Latvia’s manufacturing facility is located in Riga, Latvia (the “Riga Facility”).

In July 2023, we acquired Liebert Consulting, LLC, dba Visimid Technologies (“Visimid”), 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 original equipment manufacturers (“OEMs”) for original new products.

Visimid’s core competency is developing and producing custom thermal and night vision cores.

Visimid’s facility is located in Plano, Texas.

We and our customers support a wide range of industries, including automotive, telecommunications, defense, medical, bio-technology, industrial, consumer goods and more.

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Starting with the commercialization of fiber optic communication, and further driven by significant cost reduction in key technologies such as sensors and lasers, the adoption of the technology into more industries and applications began rapidly growing.

With the accelerated rate of adoption and highly diversified industries and applications utilizing an expanding array of photonics technologies, comes a change in both the needs of the customers and the supply chain, to support those needs.

The accelerated rate of adoption and highly diversified industries and applications utilizing an expanding array of photonics technologies brought a change in both the needs of the customers and the supply chain, to support those needs.

In the past, we and other component suppliers mostly served customers that specialized in photonics.

The large equipment manufacturers (“ OEMs”) focused on component companies as their supply chain for optical parts and minor fabrication and assemblies.

OEMs typically produced their own designs and relied on the supply chain to fulfill their needs without any strategic product planning or collaboration.

The large OEMs focused on component companies as a significant supply source for optical parts and minor fabrication and assemblies.

OEMs typically produced their own designs and relied on their suppliers to fulfill their needs without any strategic product planning, investment or collaboration.

This supply chain was fragmented and consisted of a large number of small companies, many of which had particular specialties in the fabrication process.

As the industry has evolved and sensory, visualization and imaging capabilities have become differentiators, if not a necessity for an expanding array of products in a myriad of industries, the specialized requirements of customers are no longer being adequately addressed.

With the wider adaptation of the technology, and with customers that now possess different expertise in different technologies, the needs are different, as is often the case with a mature supply chain.

In our case, the change has created opportunities to now serve OEM customers for which photonics is only one of several technologies they embed into their product, and that have or are transitioning from a distributed supply chain that would provide all components for the bill of materials (“BOM”) to a highly diversified and fragmented global customer base in which the optical parts of their system are only a part of multiple technologies integrated together.

As a result, the expanding market of original equipment and end market manufacturers are increasingly requiring an ecosystem around them to support their needs for domain knowledge, design, assembly and supply of their optical components.

We refer to this ecosystem as “optical engineered solutions,” and believe we are positioned to serve as a single source, global optical solutions provider with leading engineering and manufacturing capabilities.

This has led to our development of a new strategy and organizational alignment as discussed below, which we have begun to implement in recent months with significant initial success, including a return to double digit annual revenue growth, multiple new product designs and key multinational customer contract wins.

Often times these types of activities are referred to as build-to-print, as the OEM customer would design the lens down to the final manufacturing prints and the vendor would focus on producing according to those prints.

As the industry has evolved and sensory, visualization and imaging capabilities have become differentiators among suppliers and a necessity for delivery of an expanding array of products in a myriad of industries where the specialized requirements of customers are no longer being adequately addressed.

As photonics technology continues to develop, leading to broader adaptation and application across more industries, and with customers now possessing expertise in different technologies, customers’ supply chain needs have evolved.

In our case, the change has created opportunities to now serve OEM customers for which photonics is only one of several technologies they embed into their products.

While in the past our typical customer viewed optics as their specialty and hence they designed all aspects of their systems and outsourced only the component fabrication, this is not the case with our newer customers.

Many of our current and potential customers do not wish or do not have the capability to design and build the optical portion of their products in-house.

As such, the fragmented supply chain that existed in our industry in order to serve customers on the component level, is not relevant for customers that view optics as only a part of their system, and not a core capability or function.

For these customers, LightPath is well positioned to become their solutions partner for their optics needs.

By tapping into the domain knowledge and design, assembly and testing capabilities of solutions providers like LightPath, the customer can avoid making the large investment needed for them to develop those capabilities in-house.

We refer to this ecosystem as “optical engineered solutions,” and believe we are positioned to serve as a single source, global provider of optical solutions with leading engineering and manufacturing capabilities.

This has led to our development of a new strategy and organizational alignment which is further discussed below.

Growth Strategy

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Collectively, our operations lacked synergies, maintained a high cost structure, and lacked a defined path for capitalizing on the industry’s evolution and growth opportunities.

In March of 2020, our Board of Directors (our “Board”) recruited Mr.

In March 2020, our Board of Directors (our “Board”) recruited Mr.

Sam Rubin, an industry veteran with a proven track record for delivering high growth through organic and inorganic means, to assume the role of Chief Executive Officer and to develop and implement a new strategy going forward.

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In our view, as the use of photonics evolves, so do customer needs.

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.

We believe such partnerships can start with us as the supplier.

We have in-house domain expertise in photonics, knowledge and experience in advanced optical technologies, and the necessary manufacturing techniques and capabilities.

We believe we can develop these partnerships by working closely with the customer throughout their design process, designing an optical solution that is 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 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.

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.

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Organizational Alignment

Along with the development of a new strategic direction, we are focused on the execution of such strategic plan.

First, we have taken steps to align the organization with the strategic plan.

Such alignment has been ongoing in all levels of the organization, starting at the leadership level through the creation of a new position, Vice President of Operations, and hiring Peter Grief, an expert at building and scaling manufacturing operations, in April 2022 to fill such position.

We also hired Albert Miranda, who has strong experience in financial management and mergers and acquisitions in the optical industry, as our Chief Financial Officer in May 2022 , to replace our former Chief Financial Officer who retired.

We believe that these actions will enhance our focus on building a strong foundation that is aligned with our strategic plan and create an operation that will be ready to take on significant growth, both organic and inorganic.

We also appointed S.

Eric Creviston, who has extensive experience with wireless and mobile technology and the semiconductor industry, as a new director to our Board.

Along with the development of a new strategic direction, we are focused on the execution of a complementary strategic plan.

First, we have taken steps to align the organization at all levels with the strategic plan.

Starting with a new leadership team that was recruited and put in place following Mr.

Rubin’s appointment as president and Chief Executive Officer (“CEO”), continuing with operational activities, such as refocusing our investments and expansion from a China focus to prioritizing the growth and development of our U.S.

and Latvia operations.

In furtherance of our strategic plan, we recently acquired Visimid in Texas resulting in immediate growth of our development and engineering team and capabilities through the addition of the Visimid team.

To execute our new strategic plan, we also need, among other things, a strong manufacturing and technical organization that provides the domain expertise in photonics from the design of an optical engineered solution tailored for the customer’s needs through the manufacturing, assembly and testing of such a sub-system.

Given the fast pace of advancements in photonics technologies, achieving a sustainable advantage will also depend on having unique capabilities and technologies that allow our team to design and deliver the best tailored solutions.

To support those goals, we began a few different organization-wide efforts, including standardizing and optimizing our processes and systems, taking steps to realigning our organizational structure, such as breaking down our single combined engineering group into the separate engineering functions that are a part of and better support operations, and creating a new product development group that focuses on developing capabilities and technologies that allow us to design and deliver better solutions.

By having a small, focused new product development group, we are able to develop unique technologies that allow us to design solutions that we believe are better than what is otherwise available.

To support those goals, we are pursuing several organization-wide efforts, including standardizing and optimizing our processes and systems, taking steps to realigning our organizational structure, such as breaking down our single combined engineering group into the separate engineering functions that are a part of and better support operations, and creating a new product development group that focuses on developing capabilities and technologies that allow us to design and deliver better solutions.

By having a small, focused new product development group, we are able to develop unique technologies that allow us to design solutions that we believe are better than what is currently offered by other suppliers.

Such unique technologies include developing tailored and optimized optical coatings, and advanced fabrication techniques such as freeform optical components, custom materials not available elsewhere, and cutting edge optical design capabilities.

In the longer term, we have identified capabilities and technologies that could be important differentiators, including, for example, optical detectors and active optical components such as lasers, motion systems, and more.

The collection of many such unique technologies is what will allow us to differentiate our optical solution, and provide the customer with a product that is tailored exactly to their needs.

In addition to all of the organizational alignment initiatives we are implementing, we have also had a leadership transition and operational enhancements at our Chinese subsidiaries.

As discussed in more detail in Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations , we terminated certain of our management employees at our Chinese subsidiaries, LPOIZ and LPOI, in late fiscal year 2021, and transitioned to new management personnel.

These events adversely impacted domestic sales in China beginning in late fiscal year 2021 through fiscal year 2022.

The aggregation of such unique technologies will allow us to differentiate our optical solutions, and provide customers with products that are tailored exactly to their needs.

In addition to the organizational alignment initiatives we are implementing, we have also executed a leadership transition and operational enhancements at our Chinese subsidiaries as discussed in more detail in Item 7.

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

We believe that to be the preferred partner to fulfill the photonics needs of our customers, domain expertise in photonics is the key element.

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Additionally, to design the best solution for a customer, we not only need to know what can be produced and how to design it, we also must have unique capabilities that differentiate our solutions and allow us to design and produce a better solution that is more profitable than what may otherwise be available.

Along those lines, we continue to focus on developing new, innovative capabilities and technologies in all of our engineering and manufacturing groups, including systems design and testing, optical fabrication of components, material production, optical coatings, and electro mechanical design and production.

Among the manufacturing technologies we own are:

Materials play an important role in providing design flexibility and allow tradeoffs between optical performance, weight, and performance in varying conditions.

Traditionally, infrared applications have only a small number of materials, all of which are crystal based, with Germanium being the most commonly used material.

Over the last few years Lightpath has been investing in developing and commercializing our BlackDiamond glass as an alternative to using Germanium.

BD2, our first glass, has been in production for nearly 15 years.

BD6, our second glass, and our flagship material, is produced in volume and fielded in multiple products, both commercial and defense related.

Additionally, in December 2021 we received an exclusive license from the U.S.

government for the Chalcogenide materials that have been developed in the U.S.

Naval Research Laboratories (“NRL”).

In addition to providing alternative to the use of Germanium, the new materials from NRL, which we are now in the process of commercializing, have unique advantages such as enabling multispectral imaging (imaging in two or more wavebands with one camera), and thermal and mechanical characteristics that enable customers to build better, lighter and smaller systems.

As the world looks to transition away from Germanium, in light of the supply chain liability coming from export restrictions and availability of Germanium, our exclusive family of BlackDiamond glass provides customers not only an alternative, but in fact significant advantages over using Germanium.

We believe that this creates a distinctive competitive advantage, which we are leveraging to both enter markets in a more aggressive way (such as defense), and as a stepping stone for our transition from components to solutions.

The importance of these materials and the role they play in providing an alternative to Germanium is also evident in the direct funding and support we are receiving from different government organizations.

As announced on several separate occasions, LightPath has received fundings from the U.S.

Department of Defense, Defense Logistics Agency, European Space Agency, and from the U.S.

Army, to name a few.

Those fundings are all aimed at accelerating the qualification of the materials for use in their respective applications.

Lastly, the importance of the materials and how they align within our strategy can also be seen in our own products, with our first camera product, Mantis, being based on, and enabled by one of those exclusive and unique materials.

High precision molded lenses.

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These include CNC (computer numerical control) grinding and polishing of optical elements, traditional grinding and polishing of lenses, and diamond turning of infrared materials.

Materials play an important role in providing design flexibility and allow tradeoffs between optical performance, weight, and performance in varying conditions.

Traditionally, infrared applications have only a small number of materials, all of which are crystal based.

However, the introduction of synthetic chalcogenide glass in recent years, which allows for synthesizing of different materials, has created a larger library of materials to design with.

We produce four materials:

BD6, our flagship chalcogenide glass;

(ii) BD2, which we have been producing for over 15 years;

(iii) NaCl and (iv) KBr crystals.

We believe that having a larger selection of optical materials will provide us more tools to design better solutions than exists with current materials, and we plan to continue to invest in our materials development.

In addition, through a grant from Space Florida’s Space Foundation and Israel’s Ministry of Science received in August 2021, we are in the process of qualifying our chalcogenide glass for space applications and in particular thermal imaging from space, which is a fast-growing application.

As part of our continued focus on adding unique, value added technologies that will enable us to design and produce better optical systems, we had licensed from US Navy Research Laboratories, on an exclusive basis, their portfolio of Infrared Materials that they have developed in recent years.

We believe this expansion of our portfolio of materials places us in a unique position for the rapidly growing market of infrared imaging.

The exclusive license enables us to develop, use and sell materials that have been specifically developed to improve overall performance, cost, size and weight of infrared systems, and in particular to enable to new application of multi spectral infrared imaging.

Optical coatings .

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In addition to our library of dozens of standard coatings, our coating engineers often design coatings specific for an application, optimizing the performance of the system for a specific customer use.

One of our most known advanced coatings is Diamond Like Carbon (“DLC”), which provides materials such as chalcogenide glass significant environmental protection.

One of our most known advanced coatings is Diamond Like Carbon, which provides materials such as chalcogenide glass significant environmental protection.

This coating is currently available only at a small number of vendors, and is an example of a capability that we believe gives us a competitive advantage by allowing us to design better optical solutions.

Assembly and testing.

In recent years, we have invested significantly in capabilities for sub-system level assemblies and testing in two of our facilities.

Optical assembly and testing.

In recent years, we have invested significantly in capabilities for sub-system level lens assemblies and testing in two of our facilities.

Even more recently, we have added capabilities of active alignment, and extended testing including environmental testing, to support our growing business of optical assemblies and engineered solutions.

We expect to continue to invest in this area as activity grows, particularly in volume manufacturing and testing of assemblies.

Infrared Camera Cores:

While the lens assemblies that are customized for specific use cases or customers are mounted in front of the optical detector, the electronics, hardware and software behind the detector often needs to be customized.

Then all three (electronics, detector and optics) must be assembled and calibrated together to work properly.

Through the acquisition of Visimid in July 2023, LightPath has added to its technology portfolio the capabilities to customize entire imaging cores for cameras.

This includes designing the electronic hardware and software to specific form fit and function for the customer, assembling with LightPath lenses, and calibrating the entire camera core so it can ship ready for the customer to use.

New Product Development

Consistent with our new strategic direction, our development efforts during fiscal years 2021 and 2022 also shifted to focus on developing products, technologies and capabilities that allow us to provide better solutions, using the most fit technology for each customer and with alignment to customer product lifecycle.

This includes developing unique materials, processing techniques, optical coating offerings and more, which allow us to design a better optical system for customers than we believe is available elsewhere or through in-house/captive capabilities.

Examples of such development efforts include our development of the Freeform optics technology, which won us the esteemed industry prism award, the development of new infrared materials, and continuing to stretch and improve our capabilities in all existing technologies, such as optical coating, fabrication and assembly.

Consistent with our strategic plan, we have focused our development efforts in fiscal years 2022 and 2023 on products, technologies and capabilities that allow us to provide better solutions using the most fit technology for each customer and with alignment to customer product lifecycle.

This includes developing unique materials, processing techniques, optical coating offerings and most recently, camera cores with unique capabilities.

An example of such a development is our Mantis, a broadband multispectral camera, and uncooled infrared camera that can image a large range of wavelengths, covering both mid wave and long wave, two wavebands that today require two separate cameras.

The advantage of a camera such as Mantis to the customer is the ability to do, in a cost-effective manner, imaging that today requires an expensive, cryogenically cooled camera.

Mantis’s technology presents opportunities for customers in areas such as industrial process monitoring, flame and fire detection and more.

The adoption rate of existing technology for many of those applications is more limited today because of its high cost.

A new, more cost effective technology such as Mantis is a prime example of enabling a new market as opposed to competing with existing installed bases of competing technology.

This innovation and leveraging our technologies is a pillar of our growth strategy and differentiation.

We generally rely on trade secret protection for technology we develop, but do pursue patents for certain of such technology.

In many cases the benefits of patent protection is offset by the requirement to disclose in detail the processes, and so we intend to apply for a patent only in the case when we believe the patent is enforceable and does not compromise our trade secrets and intellectual properties developed over three decades.

We incurred expenditures for new product development during fiscal years 2022 and 2021 of approximately $2.1 million and $2.2 million, respectively.

In many cases the benefits of patent protection is offset by the requirement to disclose in detail the processes, and so we intend to apply for a patent only the case when we believe the patent is enforceable and does not compromise our trade secrets and intellectual properties developed over three decades.

We incurred expenditures for new product development of approximately $2.1 million during both fiscal years 2023 and 2022.

In some cases our product and technology development is supported through billing of engineering services, such as non-recurring engineering (“NRE”) fees.

In other cases we receive external funding, such as our previously announced funding from Space Florida’s Space Foundation and Israel’s Ministry of Science.

In other cases we receive external funding, such as our previously announced funding from Space Florida’s Space Foundation and Israel’s Ministry of Science, and the U.S.

DoD (via the Defense Logistics Agency).

Our efforts are self-funded in all other cases.

As part of our product development and research and development efforts, we have over 50 employees with engineering and related advanced degrees located in our facilities in the United States, China and Latvia.

Our facilities in Orlando, Florida and Zhenjiang, China are located in or near industrial technology campuses with substantial access to optical industry constituencies, including a major university.

As part of our product development and research and development efforts, we have over 60 employees with engineering and related advanced degrees located in our facilities in the U.S., China and Latvia.

Our facilities in Orlando, Florida, Dallas, Texas, and Zhenjiang, China are located in or near industrial technology campuses with substantial access to optical industry constituencies, including a major university.

This enables us and our staff to remain on the cutting edge of industry design trends and to enter into collaborative engagements.

Product Groups and Markets

Our business is organized into three product groups:

Our revenues are categorized into three product groups:

PMOs, infrared products and specialty products.

These product groups are supported by our major product capabilities:

molded optics, thermal imaging optics, and custom designed optics.

molded optics, thermal imaging optics, and custom designed optics, and the related assemblies.

Our PMO product group consists of visible precision molded optics with varying applications.

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In addition, both product groups offer catalog and custom designed optics.

Our specialty product group is comprised of value-added products, such as optical subsystems, assemblies, collimators, and NRE products, consisting of those products we develop pursuant to product development agreements that we enter into with customers.

Our specialty product group is comprised of other value-added products, such as mounted lenses, optical assemblies, collimators, and NRE products, which consist of those products we develop 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.

Product Groups

There is a product manager for each of our major product capabilities:

molded optics, thermal imaging optics and custom designed optics.

Product management is principally a portfolio management process that analyzes products within the product capability areas as defined above.

This function facilitates choosing investment priorities to help strategically align our competencies with strategic industry revenue opportunities.

Over the long term, this function will also help ensure successful product life cycle management.

The following sections further discuss the various products we offer and certain growth opportunities we anticipate for each such product.

We are re-evaluating our product groups going into fiscal year 2024, with the addition of Visimid in July 2023.

Visimid’s revenue is generally derived from engineering services and infrared camera cores and assemblies.

PMO Product Group.

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Extensive product diversity and varying levels of product maturity characterize the optics industry.

Product verticals range from consumer (e.g., AR/VR, 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 (e.g., fiber and laser based).

Product verticals range from consumer (e.g., AR/VR headset, cameras, cell phones, gaming devices, 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 (e.g., fiber, 5G and satellite laser based).

As a result, we market our products across a wide variety of customer groups, including laser systems manufacturers, laser OEM’s, infrared-imaging systems vendors, automotive OEMs, 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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We have taken a more proactive approach to our direct selling efforts to increase our customer engagement, especially within Europe, where we recently transitioned away from working exclusively through a distributor.

We have expanded our standard product offerings with the top two catalog companies in the world for optics and photonics which increases our exposure to new revenue opportunities.

We have expanded our standard product offerings with the top two catalog companies for optics and photonics in the world which increases our exposure to new revenue opportunities.

In addition, we continue to enhance our website (www.lightpath.com), which is our main communication vehicle for broader promotion of our company, our value-add capabilities, our growing chalcogenide material portfolio, and similarly have optimized our social media assets.

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We display our standard products, promote new innovative offerings and meet with industry influencers at a number of trade shows each year throughout North America, Europe and Asia.

As a result of COVID-19, some of these annual trade shows have been rescheduled or modified into virtual online exchanges.

So far in 2022, we participated in a few virtual shows plus several in person shows which included the SHOT Show in Las Vegas, the largest professional event for the sport shooting, hunting and outdoor industry in North America;

SPIE Photonics West in San Francisco, where LightPath won a PRISM Award which honors the best new optics and photonics products on the market;

SPIE DCS, AUVSI which promotes emerging technologies supporting autonomous vehicles, drones and robotics;

and Laser World of Photonics in Munich.

So far in 2023, we have participated in the SHOT Show in Las Vegas, the largest professional event for the sport shooting, hunting and outdoor industry in North America;

SPIE Photonics West in San Francisco;

SPIE DCS, AUVSI Xponential which promotes emerging technologies supporting autonomous vehicles, drones and robotics;

and Laser World of Photonics in both Munich, Germany and Shanghai, China.

These trade shows provide us an opportunity to further expand our brand, network to enhance business relationships and gain valuable insight into technology trends in our target markets.

The markets in which we compete in are generally highly competitive and highly fragmented.

We compete with manufacturers of conventional spherical lenses and optical components, providers of aspheric lenses and optical components, and producers of optical quality glass.

While the global market for component supply is fragmented and highly competitive, we maintain advantages through our unique technologies that often build on our leadership in precision molded optics, as well as our vertical integration in infrared optics, from raw materials through assemblies and engineered solutions.

Engineered Solutions

The market for non-captive optical engineered solutions is emerging.

As companies such as LightPath begin transitioning their offering from components to engineered solutions, we compete on several fronts:

The market for non-captive optical engineered solutions is emerging and competition will increase as companies such as LightPath begin transitioning their offerings from components to engineered solutions:

Engineered solutions companies.

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This requires customers to have expertise in optical system and component design capabilities, along with knowledge of the most advanced available technologies, however limited the scope of their capabilities or the profitability of their solutions may be.

Our key differentiator is our unique technologies that allow us to design better solutions.

We believe that one of our key differentiators is our unique technologies that allow us to design better solutions.

Optical Components

In our optical components business, the market for optical components generally is highly competitive and highly fragmented.

We compete with manufacturers of conventional spherical lenses and optical components, providers of aspheric lenses and optical components, and producers of optical quality glass.

PMO Product Group.

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Our manufacturing is largely performed in our combined 58,500 square feet of production facilities in Orlando, Florida, in LPOIZ’s combined 55,000 square feet of production facilities in Zhenjiang, China, and in ISP Latvia’s 29,000 square feet of production facilities in Riga, Latvia.

LPOI sales and support functions occupy a 1,900 square foot facility in Shanghai, China.

Our Orlando Facility and LPOIZ’s Zhenjiang Facility feature areas for each step of the manufacturing process, including coating work areas, diamond turning, manufacturing and a clean room for precision glass molding and integrated assembly.

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We are routinely adding additional production equipment at our Orlando, Zhenjiang and Riga Facilities.

In fiscal year 2021, we added additional space in our Riga Facility, and also executed a lease agreement for additional space at our Orlando Facility, which we expect to occupy in mid-fiscal year 2023.

In fiscal year 2021, we added additional space in our Riga Facility, and also executed a lease agreement for additional space at our Orlando Facility.

We completed the build out of our additional Orlando Facility space in August 2023.

In addition to adding equipment or space at our manufacturing facilities, we add work shifts, as needed, to increase capacity and meet forecasted demand.

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Intellectual Property

Our policy is to protect our technology by, among other things, patents, trade secret protection, trademarks, and copyrights.

Our policy is to protect our technology by, among other things, trade secret protection, patents, trademarks, and copyrights.

We primarily rely upon trade secrets and unpatented proprietary know-how to protect certain process inventions, lens designs, and innovations.

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We are aggressively pursuing patents for new products that provide new features, capabilities or other advantages to our customers.

Over the past three years, we have been granted two new patents.

We also have three other patents that relate to the fusing of certain of our lenses that are part of our specialty products group.

These patents expire at various times throughout 2023.

For 2022, we have three new groups of patents being submitted.

The first is for the fabrication of mold tooling and the molding process for acylindrical arrays.

The second is for the molding of large freeform optics, with respect to the proprietary molding equipment.

The third is for the molding of doublets.

Over the past year we have filed 5 new patent applications.

The first filing uses a midwave thermal imaging camera with relay optics and a risley prism scanner for inspection of boilers and furnaces.

The risley prism scanner gives the system the ability to steer the image area within the furnace.

The second filing uses an uncooled broadband camera for flame detection coupled with detection of humans or other low temperature signals within the overall imaging area.

The third filing is for an optical element formed from a moldable material, with a transparent layer of a different material applied to the optical surface for use in resistive heating of the element.

This can be used to provide heating on an optic for de-icing or de-fogging.

The fourth filing combines LWIR Imaging with an extended short wavelength infrared (“eSWIR”) light source to allow for IR imaging and illumination in the same image using a single detector.

The fifth filing is for a single camera that can detect a signaling laser such as a beacon in one wavelength, while imaging the heat emitted from objects in another waveband.

Our means of protecting our proprietary rights may not be adequate and our competitors may independently develop technology or products that are similar to ours or that compete with ours.

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United States

October 22, 2022

United States

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In fiscal year 2022, 61% of our net revenue was derived from sales outside of the U.S., with 95% of our foreign sales derived from customers in Europe and Asia.

As of June 30, 2022, we had 334 employees, of which 329 were full-time equivalent employees, with 108 in the U.S., including 101 located in Orlando, Florida and 7 working remotely from various locations, 98 located in Riga, Latvia, and 128 located in Jiading and Zhenjiang, China.

As of June 30, 2023, we had 327 employees, of which 320 were full-time equivalent employees, with 111 in the U.S., including 106 located in Orlando, Florida and 5 working remotely from various locations, 99 located in Riga, Latvia, and 117 located in Zhenjiang, China.

Of our 320 full-time equivalent employees, we have 32 employees engaged in management, administrative, and clerical functions, 23 employees in new product development, 11 employees in sales and marketing, and 254 employees in production and quality control functions.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business