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Item 9A. Controls and Procedures

2021-09-28 compared with 2020-09-24 · 516 added, 545 removed, 246 unchanged (81% of the section changed)

AND PROCEDURES.

Management’s Evaluation of Disclosure Controls and

Our Chief Executive Officer and our Chief

Financial Officer evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by

this Annual Report on Form 10-K.

Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded

that our disclosure controls and procedures, including internal control over financial reporting, were not effective, as of June

30, 2020, to ensure the information we are required to disclose in reports that we file or submit under the Securities Exchange

Act of 1934, as amended (i) is recorded, processed, summarized, and reported within the time periods specified in Securities and

Exchange Commission rules and forms, and (ii) is accumulated and communicated to our management, including our Chief Executive

Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Our disclosure

controls and procedures are intended to be designed to provide reasonable assurance that such information is accumulated and communicated

to our management.

Management’s Annual Report

on Internal Control Over Financial Reporting

Our disclosure controls and procedures

include components of our internal control over financial reporting.

In designing and evaluating our disclosure controls and procedures,

management recognizes that any controls, no matter how well designed and operated, can provide only reasonable, but not absolute,

assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, with

our Company have been detected.

CONTROLS AND PROCEDURES.

Management’s Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and our Chief Financial

Officer evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Annual Report

on Form 10-K.

Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure

controls and procedures, including internal control over financial reporting, were not effective, as of June 30, 2021, to ensure the information

we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934, as amended (i) is recorded, processed,

summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms, and (ii) is accumulated

and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely

decisions regarding required disclosure.

Our disclosure controls and procedures are intended to be designed to provide reasonable assurance

that such information is accumulated and communicated to our management.

Management’s Annual Report on Internal

Control Over Financial Reporting

Our disclosure controls and procedures include

components of our internal control over financial reporting.

In designing and evaluating our disclosure controls and procedures, management

recognizes that any controls, no matter how well designed and operated, can provide only reasonable, but not absolute, assurance that

misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, with our Company have been

A “material weakness”

as a significant deficiency, or a combination of significant deficiencies, that results in more than a remote likelihood that a

material misstatement of the annual or interim financial statements will not be prevented or detected.

is defined as

a significant deficiency, or a combination of significant deficiencies, that results in more than a remote likelihood that a material

misstatement of the annual or interim financial statements will not be prevented or detected.

A “significant deficiency”

is a control deficiency, or a combination of control deficiencies, that adversely affects a company’s ability to initiate,

authorize, record, process or report external financial data reliably in accordance with generally accepted accounting principles

such that there is more than a remote likelihood that a misstatement of the annual or interim financial statements that is more

than inconsequential will not be prevented or detected.

a control deficiency, or a combination of control deficiencies, that adversely affects a company’s ability to initiate, authorize,

record, process or report external financial data reliably in accordance with generally accepted accounting principles such that there

is more than a remote likelihood that a misstatement of the annual or interim financial statements that is more than inconsequential will

not be prevented or detected.

Under the supervision and with the participation

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of our internal control over financial reporting as of June 30, 2021.

In making this assessment, management used the criteria set

forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control —

Framework (2013).

Based on our evaluation, our management concluded that our internal control over financial reporting was

not effective as of June 30, 2020.

In making this assessment, management used the criteria set forth

by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control —

Integrated Framework

Based on our evaluation, our management concluded that our internal control over financial reporting was not effective as

of June 30, 2021.

The following is a description of two material

1 unchanged sentence

Segregation of Duties :

As previously

disclosed in our Annual Reports on Form 10-K for the fiscal years ended June 30, 2008-2019, our management identified a control

deficiency during the 2008 fiscal year because we lacked sufficient staff to segregate accounting duties.

We believe the control

deficiency resulted primarily because we have the equivalent of one and one-half persons performing all accounting-related on-site

As a result, we did not maintain adequate segregation of duties within our critical financial reporting applications, the

related modules and financial reporting processes.

This control deficiency could result in a misstatement of balance sheet and

income statement accounts in our interim or annual consolidated financial statements that would not be detected.

Accordingly, management

has determined that this control deficiency constitutes a material weakness.

As previously disclosed

in our Annual Reports on Form 10-K for the fiscal years ended June 30, 2008-2020, our management identified a control deficiency during

the 2008 fiscal year because we lacked sufficient staff to segregate accounting duties.

We believe the control deficiency resulted primarily

because we have the equivalent of six persons performing all accounting-related on-site duties at two locations.

As a result, we did not

maintain adequate segregation of duties within our critical financial reporting applications, the related modules and financial reporting

This control deficiency could result in a misstatement of balance sheet and income statement accounts in our interim or annual

consolidated financial statements that would not be detected.

Accordingly, management has determined that this control deficiency constitutes

a material weakness.

To address and remediate the material weakness

in internal control over financial reporting described above, beginning with the quarter ended September 30, 2008, we instituted

a procedure whereby our Chief Executive Officer, our Chief Financial Officer and other members of our Board of Directors perform

a higher level review of the quarterly and annual reports on Form 10-Q and Form 10-K prior to filing.

We believe that the step outlined above

strengthens our internal control over financial reporting and mitigates the material weakness described above.

As part of our 2020

assessment of internal control over financial reporting, our management has evaluated this additional control and has determined

that it is operating effectively.

in internal control over financial reporting described above, beginning with the quarter ended September 30, 2008, we instituted a procedure

whereby our Chief Executive Officer, our Chief Financial Officer and other members of our Board of Directors perform a higher level review

of the quarterly and annual reports on Form 10-Q and Form 10-K prior to filing.

We believe that the step outlined above strengthens

our internal control over financial reporting and mitigates the material weakness described above.

As part of our 2021 assessment of internal

control over financial reporting, our management has evaluated this additional control and has determined that it is operating effectively.

Inventory Valuation :

As previously

disclosed in our Annual Reports on Form 10-K for the fiscal years ended June 30, 2009-2019, we reported a material weakness with

respect to the valuation of our inventories.

Specifically, the amounts used to value our inventory at June 30, 2009 with respect

to overhead rates and purchased items were often inconsistent with the supporting documentation, due to year-to-year changes in

overhead rates and costs of purchased items that were not properly reflected in inventory valuation.

Accordingly, management had

determined that this control deficiency constituted a material weakness as of June 30, 2009.

One audit adjustment of approximately

$58,000 to our audited financial statements as of June 30, 2011 was necessary as a result of this condition.

As previously disclosed

in our Annual Reports on Form 10-K for the fiscal years ended June 30, 2009-2020, we reported a material weakness with respect to the

valuation of our inventories.

Specifically, the amounts used to value our inventory at June 30, 2009 with respect to overhead rates and

purchased items were often inconsistent with the supporting documentation, due to year-to-year changes in overhead rates and costs of

purchased items that were not properly reflected in inventory valuation.

Accordingly, management had determined that this control deficiency

constituted a material weakness as of June 30, 2009.

One audit adjustment of approximately $58,000 to our audited financial statements

as of June 30, 2011 was necessary as a result of this condition.

To address and remediate the material weakness

in internal control over financial reporting described above, beginning in the quarter ended September 30, 2009 and continuing

through the year ended June 30, 2020, we implemented procedures to improve our inventory controls and documentation surrounding

inventory valuation for overhead rates, and performed procedures to ensure that the pricing of inventory items was consistent with

the supporting documentation.

We believe that the step outlined above strengthens our internal control over financial reporting

and mitigates the material weakness described above.

We intend to continue to remediate material

weaknesses and enhance our internal controls but cannot guarantee that our efforts will result in remediation of our material weaknesses

or that new issues will not be exposed in this process.

Changes in Internal Control over

Financial Reporting

There was no change in our internal control

over financial reporting that occurred during the fourth quarter of our fiscal year covered by this Annual Report on Form 10-K

that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

in internal control over financial reporting described above, beginning in the quarter ended September 30, 2009 and continuing through

the year ended June 30, 2021, we implemented procedures to improve our inventory controls and documentation surrounding inventory valuation

for overhead rates, and performed procedures to ensure that the pricing of inventory items was consistent with the supporting documentation.

We believe that the step outlined above strengthens our internal control over financial reporting and mitigates the material weakness

described above.

We intend to continue to remediate material weaknesses

and enhance our internal controls but cannot guarantee that our efforts will result in remediation of our material weaknesses or that

new issues will not be exposed in this process.

Changes in Internal Control over Financial

There was no change in our internal control over

financial reporting that occurred during the fourth quarter of our fiscal year covered by this Annual Report on Form 10-K that has materially

affected, or is reasonably likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

DIRECTORS, EXECUTIVE OFFICERS AND

CORPORATE GOVERNANCE.

Identification of Directors

Set forth below is certain information

with respect to the individuals who are our directors as of September 20, 2020.

Set forth below is certain information with respect

to the individuals who are our directors as of September 21, 2021.

Position(s) or Office(s) Held

2 unchanged sentences

Board Composition.

Directors is divided into three classes that are as nearly equal in number as possible, with each class serving for a staggered

term of office.

Our Board of Directors

is divided into three classes that are as nearly equal in number as possible, with each class serving for a staggered term of office.

Only one class is elected each year.

Each director serves a three-year term and until his or her successor has

been duly elected and qualified.

Each director serves a three-year term and until his or her successor has been duly elected and qualified.

Our Board currently consists of four directors.

Our Class I director is Peter H.

Class II director is Andrew J.

Our Class II director is Andrew J.

Our Class III directors are Joseph N.

Forkey and Richard B.

Biographies and Qualifications of Our

The biographies of our directors and certain information regarding each director’s experience, attributes,

skills and/or qualifications that led to the conclusion that the individual should be serving as a director of our Company are

Forkey has served as our

Chief Executive Officer, President and Treasurer since February 8, 2011.

Forkey has been a member of our Board of Directors

He served as our Chairman of our Board of Directors from February 2011 to July 2014.

He served as our Executive

Vice President and Chief Scientific Officer from April 2006 to February 2011, and held the position of our Chief Scientist from

September 2003 to April 2006.

Since joining us, he has been involved in general technical and management activities of our Company,

as well as investigations of opportunities that leverage our newly developed technologies.

Biographies and Qualifications of Our Directors.

The biographies of our directors and certain information regarding each director’s experience, attributes, skills and/or qualifications

that led to the conclusion that the individual should be serving as a director of our Company are as follows:

Forkey has served as our Chief Executive

Officer, President and Treasurer since February 8, 2011.

Forkey has been a member of our Board of Directors since 2006.

as our Chairman of our Board of Directors from February 2011 to July 2014.

He served as our Executive Vice President and Chief Scientific

Officer from April 2006 to February 2011, and held the position of our Chief Scientist from September 2003 to April 2006.

Since joining

us, he has been involved in general technical and management activities of our Company, as well as investigations of opportunities that

leverage our newly developed technologies.

Forkey holds B.A.

degrees in Mathematics

and Physics from Cornell University, and a Ph.D.

degrees in Mathematics and Physics from Cornell University, and a Ph.D.

in Mechanical and Aerospace Engineering from Princeton University.

Prior to joining

Forkey spent seven years at the University of Pennsylvania Medical School as a postdoctoral fellow and research staff member.

Forkey is a valuable member of our Board due to his depth of scientific, operating, strategic, transactional, and senior management

experience in our industry.

Prior to joining us, Dr.

Forkey spent seven years at the University

of Pennsylvania Medical School as a postdoctoral fellow and research staff member.

Forkey is a valuable member of our Board due to

his depth of scientific, operating, strategic, transactional, and senior management experience in our industry.

Additionally, Dr.

Forkey has held positions of increasing responsibility at our Company and holds an

intimate knowledge of our Company due to his longevity in the industry and with us.

Miclot was appointed to our Board on

March 2, 2016.

Miclot has more than 35 years of leadership experience with medical device suppliers and brings substantial

global industry knowledge to our Company.

Since January 2017, Mr.

Miclot was the Vice Chairman and Director of WishBone Medical,

Inc., a pediatric orthopedic company dedicated to the unmet needs of children suffering from

orthopedic challenges and President from October 2017 to January 2019.

He is on several Advisory Boards including ODT, Orthopedic

Design & Technology, since December 2005 and Indiana University Alumni Association since October 2016.

From October 2015 to

January 2018, Mr.

Miclot served as President, CEO and Director of Micro Machine Co., a supplier of medical products for the orthopedic

and spinal industries.

has held positions of increasing responsibility at our Company and holds an intimate knowledge of our Company due to his longevity in

the industry and with us.

Miclot was appointed to our Board on March

Miclot has more than 35 years of leadership experience with medical device suppliers and brings substantial global industry

knowledge to our Company.

Since September 2020, Mr.

Miclot was President of Electromedical Products International, Inc., a medical device

company treating Anxiety, Insomnia, Depression and Pain.

Miclot was the President and Vice Chairman and Director of WishBone Medical,

Inc., a pediatric orthopedic company dedicated to the unmet needs of children suffering from orthopedic

challenges from October 2017 to January 2019.

He has been on the Indiana University Alumni Association Advisory Board since October

From October 2015 to January 2018, Mr.

Miclot served as President, CEO and Director of Micro Machine Co., a supplier of medical

products for the orthopedic and spinal industries.

Prior to joining Micro Machine Co., from May 2013 to September 2014, Mr.

Miclot was Executive Vice President

of MicroTechnologies, Inc., a medical device supplier.

Miclot was General Manager and Senior Vice President of ArthroCare Corporation

from June 2009 to March 2013.

Executive Vice President of MicroTechnologies, Inc., a medical device supplier.

Miclot was General Manager and Senior Vice President

of ArthroCare Corporation from June 2009 to March 2013.

From January 2008 to March 2009, Mr.

Miclot was President, CEO and Director of Ascension Orthopedics,

Miclot was President, CEO and Director of

Ascension Orthopedics, Inc.

He was Vice President of Marketing for the orthopedic global business unit at Orthofix, Inc.

from April 2007 to January 2008,

and from March 1994 to April 2007, he served as Senior Vice President with Symmetry Medical Inc., a medical device supplier and

was also the Investor Relations Officer, after the NYSE IPO in December 2004 until April 2007.

from April 2007

to January 2008, and from March 1994 to April 2007, he served as Senior Vice President with Symmetry Medical Inc., a medical device supplier

and was also the Investor Relations Officer, after the NYSE IPO in December 2004 until April 2007.

Miclot has a BA degree in Speech

and Hearing and a MA degree in Audiology from Indiana University and an MBA from the Lake Forest Graduate School of Management,

earned in 1991.

and Hearing and a MA degree in Audiology from Indiana University and an MBA from the Lake Forest Graduate School of Management, earned

Professor Richard B.

Miles was appointed

to our Board of Directors in November 2005.

He was a member of the Mechanical and Aerospace Engineering faculty at Princeton University

from 1972 until 2013, at which time he retired from his Princeton academic appointment and became Professor Emeritus and Senior

From 1980 to 1996 he served as Chairman of Engineering Physics at Princeton.

In 2017 he joined Texas A&M University

and was appointed TEES Eminent Professor of Aerospace Engineering.

In 2019 he was named Distinguished University Professor.

is a member of the National Academy of Engineering and a senior member of the National Academy of Inventors.

He serves on the Board

of Directors of the Hertz Foundation and the Board of Trustees of Pacific University, Oregon and is a Fellow of the Optical Society

of America (OSA), the American Physical Society (APS) and the American Institute Aeronautics and Astronautics (AIAA).

Miles is a valuable member of our Board due to his depth of scientific experience and familiarity with the field of our technologies,

insight into the academic community, and familiarity with the latest developments and innovations in science and technology.

Woodward was appointed to our Board

effective July 9, 2014 and as chairman of the Board in connection with the sale and purchase agreement we entered into in July

Woodward is the founder of MHW Capital Management, LLC, or MHW, a position he has held since September 2005.

MHW specializes

in large equity investments in public companies implementing operating strategies to significantly improve their profitability.

Miles was appointed to our

Board of Directors in November 2005.

He was a member of the Mechanical and Aerospace Engineering faculty at Princeton University from

1972 until 2013, at which time he retired from his Princeton academic appointment and became Professor Emeritus and Senior Scholar.

1980 to 1996 he served as Chairman of Engineering Physics at Princeton.

In 2017 he joined Texas A&M University and was appointed TEES

Eminent Professor of Aerospace Engineering.

In 2019 he was named Distinguished University Professor and O’Donnell Foundation Chair

He is a member of the National Academy of Engineering and a Fellow of the National Academy of Inventors.

He serves on the Board of

Directors of the Hertz Foundation and the Board of Trustees of Pacific University, Oregon and is a Fellow of the Optical Society of America

(OSA) and the American Institute Aeronautics and Astronautics (AIAA).

Professor Miles is a valuable member of our Board due to his depth

of scientific experience and familiarity with the field of our technologies, insight into the academic community, and familiarity with

the latest developments and innovations in science and technology.

Woodward was appointed to our Board effective

July 9, 2014 and as chairman of the Board in connection with the sale and purchase agreement we entered into in July 2014.

is the founder of MHW Capital Management, LLC, or MHW, a position he has held since September 2005.

MHW specializes in large equity investments

in public companies implementing operating strategies to significantly improve their profitability.

From 1996 to 2005, Mr.

Woodward was the Managing Director for Regan Fund Management, LLC.

He served as the President and Chief

Executive Officer and Director of Cartesian, Inc.

from June 2015 to July 2018, and currently serves as Chairman of the Board and

Chairman of the Audit Committee for TSS, Inc., and as the CEO of Innoative Power, LLC.

Woodward holds a BA in economics from

Colgate University and a Masters of International Affairs with a concentration in international economics and finance from Columbia

the Managing Director for Regan Fund Management, LLC.

He served as the President and Chief Executive Officer and Director of Cartesian,

from June 2015 to July 2018, and currently serves as Chairman of the Board and Chairman of the Audit Committee for TSS, Inc., and

as the CEO of Innoative Power, LLC.

Woodward holds a BA in economics from Colgate University and a Masters of International Affairs

with a concentration in international economics and finance from Columbia University.

He is also a Chartered Financial Analyst.

Identification of Executive Officers

Set forth below is certain information

with respect to the individuals who are our executive officers as of September 20, 2020.

Set forth below is certain information with respect

to the individuals who are our executive officers as of September 20, 2021.

Position(s) or Office(s) Held

1 unchanged sentence

Chief Financial Officer and Secretary

Biographies and Qualifications of Our

Executive Officers.

The biographies of our executive officers and certain information regarding each officer’s experience,

attributes, skills and/or qualifications that led to the conclusion that the individual should be serving as an executive officer

of our Company are as follows:

Forkey’s full biography,

please refer to the section entitled “Biographies and Qualifications of Our Directors.”

Biographies and Qualifications of Our Executive

The biographies of our executive officers and certain information regarding each officer’s experience, attributes,

skills and/or qualifications that led to the conclusion that the individual should be serving as an executive officer of our Company are

Forkey’s full biography, please

refer to the section entitled “Biographies and Qualifications of Our Directors.”

Habhegger started with us in September 2019

as Director of Finance and became our Chief Financial Officer and Secretary effective December 1, 2019.

Prior to joining our

Company, he was the Director of Financial Planning and Analysis of SmartBear Software, Inc.

from 2015 to August 2019 and of AgaMatrix,

from 2010 to 2015.

From 2005 to 2009 he was the Chief Financial Officer of Weather Services International, now The Weather

Company, where he led the implementation of the PeopleSoft financial system and the SalesLogix CRM solution and the financial due

diligence for two large acquisitions.

He earned his Bachelor of Science in Finance from Western International University in 1994

and an MBA in Global Management from the University of Phoenix in 2005.

Prior to joining our Company,

he was the Director of Financial Planning and Analysis of SmartBear Software, Inc.

from 2015 to August 2019 and of AgaMatrix, Inc.

2010 to 2015.

From 2005 to 2009 he was the Chief Financial Officer of Weather Services International, now The Weather Company, where he

led the implementation of the PeopleSoft financial system and the SalesLogix CRM solution and the financial due diligence for two large

acquisitions.

He earned his Bachelor of Science in Finance from Western International University in 1994 and an MBA in Global Management

from the University of Phoenix in 2005.

Other Involvement in Certain Legal Proceedings

None of our directors or executive officers

has been involved in any bankruptcy or criminal proceedings, nor have there been any judgments or injunctions brought against any

of our directors or executive officers during the last ten years that we consider material to the evaluation of the ability and

integrity of any director or executive officer.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING

Section 16(a) of the Securities Exchange

Act of 1934, as amended, requires our directors, executive officers and persons who own more than 10% of a registered class of

our securities to file reports of beneficial ownership and changes in beneficial ownership with the Securities and Exchange Commission

on Forms 3 (Initial Statement of Beneficial Ownership), 4 (Statement of Changes of Beneficial Ownership of Securities) and 5 (Annual

Statement of Beneficial Ownership of Securities).

Officers, directors and greater than 10% beneficial owners are required by SEC

regulations to furnish us with copies of all Section 16(a) forms they file.

None of our directors or executive officers has

been involved in any bankruptcy or criminal proceedings, nor have there been any judgments or injunctions brought against any of our directors

or executive officers during the last ten years that we consider material to the evaluation of the ability and integrity of any director

or executive officer.

DELINQUENT SECTION 16(a) REPORTS

Section 16(a) of the Securities Exchange Act of

1934, as amended, requires our directors, executive officers and persons who own more than 10% of a registered class of our securities

to file reports of beneficial ownership and changes in beneficial ownership with the Securities and Exchange Commission on Forms 3 (Initial

Statement of Beneficial Ownership), 4 (Statement of Changes of Beneficial Ownership of Securities) and 5 (Annual Statement of Beneficial

Ownership of Securities).

Officers, directors and greater than 10% beneficial owners are required by SEC regulations to furnish us with

copies of all Section 16(a) forms they file.

Based solely upon a review of reports provided

to us by our officers and directors, we believe that, during the fiscal year ended June 30, 2020, no person required to file reports

under Section 16(a) of the Securities Exchange Act of 1934 failed to file such reports on a timely basis during such fiscal year,

except that we are aware that Dolphin Offshore Partners LP which owns approximately 20% of our common stock based on available

public records as of September 17, 2020 has not filed a Form 3 to date.

Dolphin Offshore Partners LP is not affiliated with our

to us by our officers and directors, we believe that, during the fiscal year ended June 30, 2021, no person required to file reports under

Section 16(a) of the Securities Exchange Act of 1934 failed to file such reports on a timely basis during such fiscal year, except for

four reports by four of our employees, including our Chief Executive Officer, Dr.

Forkey, our Chief Financial Officers, Daniel Habhegger,

and Divaker Mangadu, for one transaction each, filed late by one day each.

We are also aware that Dolphin Offshore Partners LP which owns

approximately 20% of our common stock based on available public records as of September 21, 2021 has not filed a Form 3 to date.

Offshore Partners LP is not affiliated with our Company.

Code of Ethics

We adopted a Corporate Code of Ethics and

Conduct that applies to all employees, officers and directors of our Company, including our principal executive officer, principal

financial officer and principal accounting officer or controller, or persons performing similar functions, a copy of which was

filed as Exhibit 14.1 to our Annual Report on Form 10-K for the Fiscal Year Ended June 30, 2008 with the Securities and

Exchange Commission on September 28, 2008.

A copy of our Corporate Code of Ethics and Conduct can be obtained free of charge

by contacting our Secretary, c/o Precision Optics Corporation, Inc., 22 East Broadway, Gardner, Massachusetts 01440.

We adopted a Corporate Code of Ethics and Conduct

that applies to all employees, officers and directors of our Company, including our principal executive officer, principal financial officer

and principal accounting officer or controller, or persons performing similar functions, a copy of which was filed as Exhibit 14.1

to our Annual Report on Form 10-K for the Fiscal Year Ended June 30, 2008 with the Securities and Exchange Commission on September 28,

A copy of our Corporate Code of Ethics and Conduct can be obtained free of charge by contacting our Secretary, c/o Precision Optics

Corporation, Inc., 22 East Broadway, Gardner, Massachusetts 01440.

Procedure for Nominating Directors

There have been no material changes to

the procedures by which security holders may recommend nominees to our Board of Directors.

The Board of Directors will consider

candidates for director positions that are recommended by any of our stockholders.

Any such recommendation should be provided

to our Secretary.

The recommended candidate should be submitted to us in writing addressed to our Secretary, c/o Precision

Optics Corporation, Inc., 22 East Broadway, Gardner, Massachusetts 01440.

The recommendation should include the following

There have been no material changes to the procedures

by which security holders may recommend nominees to our Board of Directors.

The Board of Directors will consider candidates

for director positions that are recommended by any of our stockholders.

Any such recommendation should be provided to our Secretary.

recommended candidate should be submitted to us in writing addressed to our Secretary, c/o Precision Optics Corporation, Inc., 22 East

Broadway, Gardner, Massachusetts 01440.

The recommendation should include the following information:

name of candidate;

address, phone and fax number of candidate;

a statement signed by the candidate certifying

that the candidate wishes to be considered for nomination to our Board of Directors and stating why the candidate believes

that he or she would be a valuable addition to our Board of Directors;

a summary of the candidate’s work experience for

the prior five years and the number of shares of our stock beneficially owned by the candidate.

The Board will evaluate the recommended

candidate and shall determine whether or not to proceed with the candidate in accordance with our procedures.

We reserve the right

to change our procedures at any time to comply with the requirements of applicable laws.

address, phone

and fax number of candidate;

a statement signed by the candidate certifying that the candidate wishes to be considered for nomination

to our Board of Directors and stating why the candidate believes that he or she would be a valuable addition to our Board of Directors;

a summary of the candidate’s work experience for the prior five years and the number of shares of our stock beneficially owned by

the candidate.

The Board will evaluate the recommended candidate

and shall determine whether or not to proceed with the candidate in accordance with our procedures.

We reserve the right to change our

procedures at any time to comply with the requirements of applicable laws.

Committees of the Board of Directors

1 unchanged sentence

for establishing broad corporate policies and reviewing our overall performance rather than day-to-day operations.

The Board’s

primary responsibility is to oversee management of our Company and, in so doing, serve the best interests of our Company and our

stockholders.

Our Board of Directors has the ability

to establish, or disband, such committees as necessary or appropriate to serve the needs of our Company.

In February 2012, our

Board of Directors made the determination to restructure and unanimously voted to disband its committees, including its Audit Committee.

Our full Board of Directors performs all of the functions normally designated to an audit committee, compensation committee and

nominating committee.

The Board’s primary

responsibility is to oversee management of our Company and, in so doing, serve the best interests of our Company and our stockholders.

Our Board of Directors has the ability to establish,

or disband, such committees as necessary or appropriate to serve the needs of our Company.

In February 2012, our Board of Directors made

the determination to restructure and unanimously voted to disband its committees, including its Audit Committee.

Our full Board of Directors

performs all of the functions normally designated to an audit committee, compensation committee and nominating committee.

Audit Committee and Audit Committee Financial Expert

As of February 2012, the Board of Directors

no longer has a separately designated audit committee.

Now, the functions of the audit committee are conducted by the entire Board,

whose members are named above.

As of February 2012, the Board of Directors no

longer has a separately designated audit committee.

The functions of the audit committee are conducted by the entire Board, whose members

are named above.

We do not currently have an “audit committee financial expert,”

as defined in Item 407(d)(5)(ii)

of Regulation S-K.

We believe that each member of our Board

is financially literate and possesses sufficient experience, both professionally and by virtue of his service on our Board, to

be fully capable of discharging his duties as a member of our Board performing audit committee functions.

EXECUTIVE COMPENSATION.

as defined in Item 407(d)(5)(ii) of Regulation S-K.

We believe that each member of our Board is financially

literate and possesses sufficient experience, both professionally and by virtue of his service on our Board, to be fully capable of discharging

his duties as a member of our Board performing audit committee functions.

COMPENSATION.

Executive Compensation

2 unchanged sentences

for our fiscal years ended June 30, 2021, and 2020 awarded to, earned by, or paid to our Principal Executive Officer, our most highly

compensated executive officer and our most highly compensated employees, all of which are referred to herein as the “Named

Executive Officers”.

Summary Executive Compensation Table

for the Fiscal Years Ended June 30, 2020 and 2019

compensated executive officer and our most highly compensated employees, all of which are referred to herein as the “Named Executive

Officers”.

Summary Executive Compensation Table for the

Fiscal Years Ended June 30, 2021 and 2020

Name and Principal Position

8 unchanged sentences

A discussion of the assumptions used in calculating the amounts in this column may be found in the Notes to our audited consolidated financial statements for the year ended June 30, 2021 set forth in this Annual Report on Form 10-K.

These amounts do not represent the actual amounts paid to or realized by the directors during the fiscal year ended June 30, 2020.

These amounts do not represent the actual amounts paid to or realized by the executives during the fiscal years presented.

Represents the aggregate grant date fair value of stock option awards granted in the respective fiscal year as computed in accordance with FASB ASC Topic 718, Compensation —

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These amounts do not represent the actual amounts paid to or realized by the directors during the fiscal year ended June 30, 2020.

On August 2, 2018, we awarded Dr.

Forkey 300,000 shares of common stock for services performed through June 30, 2018.

As of June 30, 2020, all 300,000 shares have been issued to Dr.

On August 2, 2018, we granted Dr.

Forkey stock options to purchase up to 350,000 shares of our common stock at an exercise price of $0.73 per share.

The options vested as follows:

(i) one–half of the options vest if we achieve revenues of $1.5 million or higher for two consecutive fiscal quarters, based on the reported revenues in our Form 10-Ks or 10-Qs;

and (ii) one-half of the options vested if our common stock was trading at $1.00 per share or higher for fifteen consecutive trading days.

In the event of a change of control all unvested options will vest.

As of June 30, 2020, all 350,000 options are vested.

These amounts do not represent the actual amounts paid to or realized by the executives during the fiscal years presented.

We granted Dr.

Forkey a stock option to purchase up to 150,000 shares of our common stock at an exercise price of $1.68 per share, the closing price of our common stock on June 4, 2021.

75,000 options vested on the date of grant, and provided Dr.

Forkey remains eligible under the plan on the future vesting date, the remaining 75,000 options vest on June 4, 2022.

We granted Mr.

Habhegger a stock option to purchase up to 80,000 shares of our common stock at an exercise price of $1.68 per share, the closing price of our common stock on June 4, 2021.

40,000 options vested on the date of grant, and provided Mr.

Habhegger remains eligible under the plan on the future vesting date, the remaining 40,000 options vest on June 4, 2022.

We granted Mr.

Habhegger a stock option to purchase up to 100,000 shares of our common stock at an exercise price of $1.42 per share, the closing price of our common stock on September 9, 2019.

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We granted Mr.

Mangadu a stock option to purchase up to 25,000 shares of our common stock at an exercise price of $1.68 per share, the closing price of our common stock on June 4, 2021.

12,500 options vested on the date of grant, and provided Mr.

Mangadu remains eligible under the plan on the future vesting date, the remaining 12,500 options vest on June 4, 2022.

We granted Mr.

Mangadu a stock option to purchase up to 100,000 shares of our common stock at an exercise price of $1.30 per share, the closing price of our common stock on September 5, 2019.

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Agreement with Dr.

On July 27, 2018, our Board of Directors

approved a new compensation agreement with our Chief Executive Officer, Dr, Joseph Forkey effective August 2, 2018.

the agreement, we agreed to pay Dr.

On July 27, 2018, our Board of Directors approved

a new compensation agreement with our Chief Executive Officer, Dr, Joseph Forkey effective August 2, 2018.

Pursuant to the agreement,

we agreed to pay Dr.

Forkey a base salary of $200,000 per year beginning retroactively on July 1, 2018.

October 1, 2019, our Board of Directors approved an increase of Dr.

Effective October 1, 2019, our

Board of Directors approved an increase of Dr.

Forkey’s base salary to $250,000 per year.

2, 2018, we also granted Dr.

Forkey a stock option to purchase up to 350,000 shares of our common stock at an exercise price of

$0.73 per share.

The options vested as follows:

(i) one–half of the options vest if we achieved revenues of $1.5 million

or higher for two consecutive fiscal quarters, based on the reported revenues in our Form 10-Ks or 10-Qs;

and (ii) one-half of

the options vested if our common stock was trading at $1.00 per share or higher for fifteen consecutive trading days.

of a change of control all unvested options will vest.

As of June 30, 2020, all 350,000 options are vested.

On August 2, 2018, we also granted Dr.

Forkey a stock option to purchase up to 350,000 shares of our common stock at an exercise price of $0.73 per share.

The options vested

(i) one–half of the options vest if we achieved revenues of $1.5 million or higher for two consecutive fiscal quarters,

based on the reported revenues in our Form 10-Ks or 10-Qs;

and (ii) one-half of the options vested if our common stock was trading at

$1.00 per share or higher for fifteen consecutive trading days.

In the event of a change of control all unvested options will vest.

of June 30, 2020, all 350,000 options are vested.

We also granted Dr.

Forkey 300,000 shares of common stock at a rate of 50,000 shares per fiscal quarter retroactively starting January 1, 2017 and

through the quarter ended June 30, 2018.

As of June 30, 2020, all 300,000 of such shares have been issued to Dr.

Forkey 300,000 shares of common stock at a rate of 50,000 shares

per fiscal quarter retroactively starting January 1, 2017 and through the quarter ended June 30, 2018.

As of June 30, 2020, all 300,000

of such shares have been issued to Dr.

Agreement with Mr.

Effective December 1, 2019 we entered

into an employment agreement with Mr.

Habhegger to serve as our Chief Financial Officer and Secretary pursuant to which we agreed

Habhegger a base salary of $170,000 per year.

Effective December 1, 2019 we entered into an

employment agreement with Mr.

Habhegger to serve as our Chief Financial Officer and Secretary pursuant to which we agreed to pay Mr.

a base salary of $170,000 per year.

In the event that Mr.

Habhegger is terminated within six months

of a change of control he will receive six months’

Habhegger is terminated within six months of a change of control he will receive

six months’

notice or pay in lieu of notice at his then current salary rate.

Agreement with Mr.

In connection with the acquisition of the

Ross Optical division we entered into an employment agreement on July 1, 2019 with Divaker (Divi) Mangadu to serve as President

of Ross Optical Industries (a division of Precision Optics Corporation).

The agreement covers a period of five years unless terminated

sooner under certain conditions by the parties and may be renewed beyond the initial and subsequent terms for additional one-year

Mangadu was also granted a stock option to purchase up to 100,000 shares of our common stock at an exercise price

of $1.30 per share, the closing price of our common stock on September 5, 2019.

Mangadu remains eligible under the

plan on these dates, the options vest on September 5, 2020, 2021 and 2023 in amounts of 33,000, 33,000 and 34,000 options, respectively.

Mangadu is terminated without cause by the Company during the initial five year term of the agreement, he shall receive

a lump-sum $75,000 cash severance payment and all unexercised stock options shall vest immediately and be exercisable for the remainder

of their term.

Mangadu is terminated without cause subsequent to the initial five-year term, he shall receive a lump-sum

cash severance payment equal to one-half his then current annual salary.

The agreement also provides that for a period of five

years after July 1, 2019 Mr.

Mangadu agrees not to compete with the Company, solicit employees, vendors or customers for purposes

that do not directly benefit the Company or to interfere in any way with the Company’s relationship with any vendors or customers.

Apart from the agreements described above,

we have no other employment contracts in place with any Named Executive Officer or any compensatory plan or arrangement with respect

to any Named Executive Officer where such plan or arrangement will result in payments to such Named Executive Officer upon or following

his resignation, or other termination of employment with us and our subsidiaries, or as a result of a change-in-control of our

Company or a change in the Named Executive Officers’

In connection with the acquisition of the Ross

Optical division we entered into an employment agreement on July 1, 2019 with Divaker (Divi) Mangadu to serve as President of Ross Optical

Industries (a division of Precision Optics Corporation).

The agreement covers a period of five years unless terminated sooner under certain

conditions by the parties and may be renewed beyond the initial and subsequent terms for additional one-year periods.

also granted a stock option to purchase up to 100,000 shares of our common stock at an exercise price of $1.30 per share, the closing

price of our common stock on September 5, 2019.

Mangadu remains eligible under the plan on these dates, the options vest

on September 5, 2020, 2021 and 2023 in amounts of 33,000, 33,000 and 34,000 options, respectively.

Mangadu is terminated without

cause by the Company during the initial five year term of the agreement, he shall receive a lump-sum $75,000 cash severance payment and

all unexercised stock options shall vest immediately and be exercisable for the remainder of their term.

Mangadu is terminated

without cause subsequent to the initial five-year term, he shall receive a lump-sum cash severance payment equal to one-half his then

current annual salary.

The agreement also provides that for a period of five years after July 1, 2019 Mr.

Mangadu agrees not to compete

with the Company, solicit employees, vendors or customers for purposes that do not directly benefit the Company or to interfere in any

way with the Company’s relationship with any vendors or customers.

Apart from the agreements described above, we

have no other employment contracts in place with any Named Executive Officer or any compensatory plan or arrangement with respect to any

Named Executive Officer where such plan or arrangement will result in payments to such Named Executive Officer upon or following his resignation,

or other termination of employment with us and our subsidiaries, or as a result of a change-in-control of our Company or a change in the

Named Executive Officers’

responsibilities following a change-in-control.

Outstanding Equity Awards at Fiscal Year-End Table for the

Fiscal Year Ended June 30, 2020

The following table shows grants of options

outstanding on June 30, 2020, the last day of our fiscal year, to each of the Named Executive Officers included in the Summary

Executive Compensation Table.

Outstanding Equity Awards at Fiscal Year-End Table for the Fiscal

Year Ended June 30, 2021

The following table shows grants of options outstanding

on June 30, 2021, the last day of our fiscal year, to each of the Named Executive Officers included in the Summary Executive Compensation

Number of securities

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Divaker Mangadu

_______________________

The options were granted on September 9, 2019 with vesting of one-third of the options on each of the dates September 9, 2020, 2021, and 2022, respectively, subject to the holders’

eligibility under the Option Plan on each of those dates.

The options were granted on September 5, 2019 with vesting of one-third of the options on each of the dates September 5, 2020, 2021, and 2022, respectively, subject to the holders’

eligibility under the Option Plan on each of those dates.

The options were granted on June 4, 2021 with vesting of one-half of the options on the grant date and one-half on June 4, 2022, subject to the holders’

eligibility under the Equity Incentive Plan on that date.

Profit Sharing and 401(k) Plan

We have a defined contribution 401(k) profit

sharing plan.

We have a defined contribution 401(k) profit sharing

Employer profit sharing and matching contributions to the plan are discretionary.

No employer profit sharing contributions

were made to the plan in fiscal years 2020 and 2019.

No employer matching contributions were made to the plan in fiscal years 2020

No employer profit sharing contributions were

made to the plan in fiscal years 2021 and 2020.

No employer matching contributions were made to the plan in fiscal years 2021 and 2020.

Director Compensation

The following table sets forth cash amounts

and the value of other compensation paid to our directors, but does not include the compensation of Dr.

Forkey, our Chief

Executive Officer, President, and Treasurer, as his compensation is reflected in the Summary Executive Compensation Table.

the fiscal year ended June 30, 2020, our Board of Directors determined that Dr.

Forkey was our employee director and,

therefore, would not earn any fees related to service on our Board.

Director Compensation Table for the

Fiscal Year Ended June 30, 2020

Name of Director

Fees earned or

_______________________

Under our director compensation plan, each director received $250 per board or committee meeting that the director attended.

In December 2019 the Company’s board of directors approved annual grants of common stock options each year beginning in December 2019 of 20,000 and 30,000 options to each non-management board members and the Chairman, respectively.

The Options shall be immediately exercisable.

The board of directors also approved that each non-management, non-Chairman board member shall receive $5,000 annually paid in quarterly amounts of $1,250.

The following table sets forth cash amounts and

the value of other compensation paid to our directors, but does not include the compensation of Dr.

Forkey, our Chief Executive

Officer, President, and Treasurer, as his compensation is reflected in the Summary Executive Compensation Table.

During the fiscal year

ended June 30, 2021, our Board of Directors determined that Dr.

Forkey was our employee director and, therefore, would not earn

any fees related to service on our Board.

Director Compensation Table for the Fiscal

Year Ended June 30, 2021

Fees earned or paid in cash

Option awards

Under our director compensation plan, each non-management, non-Chairman board member shall receive $5,000 annually paid in quarterly amounts of $1,250.

The board of directors also approved that each.

We also reimburse our directors for travel expenses.

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In March 2019 the Company’s board of directors approved the payment of $10,000 per quarter to Mr.

Woodward for the performance of certain management services beginning retroactively for the quarter ended December 31, 2018.

As of June 30, 2020, the following stock options were outstanding

for each of our directors:

Woodward for the performance of certain management services.

On November 16, 2020, 20,000 options to purchase the Company’s common stock were granted to Mr.

Moclot and Dr.

Miles and 30,000 to Mr.

Woodward at an exercise price of $1.40 per share.

The options are exercisable at the date of grant and expire on November 16, 2031.

As of June 30, 2021, the following outstanding

stock options were held by each of our directors:

Miclot –

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113,600, Peter H.

Woodward –

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The following tables set forth information

regarding our common stock owned as of the close of business on September 20, 2020 by the following persons:

(i) each person who

is known by us to own beneficially more than 5% of our common stock, (ii) each of our directors who beneficially owns our common

stock, (iii) each of our Named Executive Officers who beneficially own our common stock and (iv) all executive officers and directors,

as a group, who beneficially own our common stock.

The information on beneficial ownership in the table and footnotes thereto is

based upon data furnished to us by, or on behalf of, the persons listed in the table.

We have determined beneficial ownership

in accordance with the rules of the SEC.

Except as indicated by the footnotes below, we believe, based on the information furnished

to us, that the persons and entities named in the table below have sole voting and investment power with respect to all shares

of common stock that they beneficially own, subject to applicable community property laws.

In computing the number of shares of common stock beneficially

owned by a person and the percentage ownership of that person, we deemed outstanding shares of common stock subject to options

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL

OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The following tables set forth information regarding

our common stock owned as of the close of business on September 20, 2021 by the following persons:

(i) each person who is known by us

to own beneficially more than 5% of our common stock, (ii) each of our directors who beneficially owns our common stock, (iii) each of

our Named Executive Officers who beneficially own our common stock and (iv) all executive officers and directors, as a group, who beneficially

own our common stock.

The information on beneficial ownership in the table and footnotes thereto is based upon data furnished to us by,

or on behalf of, the persons listed in the table.

We have determined beneficial ownership in accordance

with the rules of the SEC.

Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the

persons and entities named in the table below have sole voting and investment power with respect to all shares of common stock that they

beneficially own, subject to applicable community property laws.

In computing the number of shares of common stock

beneficially owned by a person and the percentage ownership of that person, we deemed outstanding shares of common stock subject to options

held by that person or group that are currently exercisable or exercisable within 60 days after September 20, 2021.

deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person or group.

Stockholders Known by Us to Own Over

5% of Our Common Stock

We did not deem these

shares outstanding, however, for the purpose of computing the percentage ownership of any other person or group.

Stockholders Known by Us to Own Over 5% of

Our Common Stock

Amount of beneficial ownership (1)

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Services, Inc.

Salas on December 27, 2017 for

this information.

Dolphin Offshore Partners, L.P.,

a Delaware limited partnership, is an investment manager.

Dolphin Mgmt.

Services, Inc., a Delaware corporation, is the managing

general partner of Dolphin Offshore Partners, L.P.

Salas is the President, sole shareholder and controlling person of

Salas on December 27, 2017 for this

Dolphin Offshore Partners, L.P., a Delaware

limited partnership, is an investment manager.

Dolphin Mgmt.

Services, Inc., a Delaware corporation, is the managing general partner of

Dolphin Offshore Partners, L.P.

Salas is the President, sole shareholder and controlling person of Dolphin Mgmt.

Services, Inc.

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Salas each may be deemed to have shared power to vote or direct the vote, and dispose or direct the disposition, of all such shares of common stock.

We relied, in part, on a Form 4 filed with the SEC by Stuart Sternberg on February 5, 2020, for this information.

We relied, in part, on a Schedule 13G/A filed with the SEC by Stuart Sternberg on February 26, 2021, for this information.

We relied, in part, on a Schedule 13D/A filed jointly with the SEC on July 5, 2019 by Sandra F.

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for this information.

Hershey Management I, LLC, a

Delaware limited liability company, is the investment advisor of Hershey Strategic Capital, LP, a Delaware limited partnership.

Hershey Strategic Capital GP, LLC, a Delaware limited liability company, is the general partner of Hershey Strategic Capital, LP.

Adam Hershey is the sole managing member of both Hershey Management I, LLC and Hershey Strategic Capital GP, LLC.

As the investment

advisor, Hershey Management I, LLC has the voting and dispositive power with respect to all of the shares of common stock owned

by Hershey Strategic Capital, LP.

Hershey Management I, LLC, a Delaware

limited liability company, is the investment advisor of Hershey Strategic Capital, LP, a Delaware limited partnership.

Hershey Strategic

Capital GP, LLC, a Delaware limited liability company, is the general partner of Hershey Strategic Capital, LP.

Adam Hershey is the sole

managing member of both Hershey Management I, LLC and Hershey Strategic Capital GP, LLC.

As the investment advisor, Hershey Management

I, LLC has the voting and dispositive power with respect to all of the shares of common stock owned by Hershey Strategic Capital, LP.

On July 9, 2014, Richard E.

Forkey resigned as a director and Hershey Strategic Capital, LP designated

Forkey resigned as a director and Hershey Strategic Capital, LP designated Peter H.

Woodward and Dr.

Schwartz to our Board of Directors and such designees were so appointed.

Hershey Strategic Capital, LP

beneficially owns 986,480 shares of common stock.

Hershey Strategic Capital, LP is managed by Adam Hershey, and in such capacity,

Hershey holds the power to vote and direct the disposition of all shares of common stock owned by Hershey Strategic Capital,

Hershey Management I disclaims beneficial ownership in the shares.

We relied, in part, on a Form

4 filed with the SEC on December 1, 2016 by Peter H.

Woodward, on a Schedule 13D/A jointly filed with the SEC on November 3, 2015

by MHW Partners, L.P., MHW Capital, LLC, MHW Capital Management, LLC, and on a Form 4 filed with the SEC by Peter H.

December 31, 2019, for this information.

Hershey Strategic Capital, LP beneficially

owns 986,480 shares of common stock.

Hershey Strategic Capital, LP is managed by Adam Hershey, and in such capacity, Mr.

Hershey holds

the power to vote and direct the disposition of all shares of common stock owned by Hershey Strategic Capital, LP.

Hershey Management

I disclaims beneficial ownership in the shares.

We relied, in part, on a Form 4 filed

with the SEC on December 1, 2016 by Peter H.

Woodward, on a Schedule 13D/A jointly filed with the SEC on November 3, 2015 by MHW Partners,

L.P., MHW Capital, LLC, MHW Capital Management, LLC, on a Form 4 filed with the SEC by Peter H.

Woodward on December 31, 2019, and on

a Form 4 filed with the SEC by Peter H.

Woodward on November 16, 2020 for this information..

MHW Partners, L.P.

is a Delaware

limited partnership.

is a Delaware limited

MHW Capital, LLC is a Delaware limited liability company.

MHW Capital Management, LLC is a Delaware limited

liability company.

MHW Capital Management, LLC is a Delaware limited liability company.

MHW Capital, LLC is the general partner of MHW Partners, L.P.

Woodward is the principal of MHW Capital Management,

LLC and MHW Capital, LLC and in such capacity, Mr.

Woodward holds the power to vote and direct the disposition of all shares of

common stock owned by MHW Partners, L.P.

Woodward is the principal of MHW Capital Management, LLC and MHW Capital,

LLC and in such capacity, Mr.

Woodward holds the power to vote and direct the disposition of all shares of common stock owned by MHW Partners,

MHW Partners, L.P., MHW Capital, LLC, MHW Capital Management, LLC and Mr.

Woodward share

the power to vote and direct the disposition of all shares of common stock owned by MHW Partners, L.P.

Woodward is a citizen

of the United States and our current Chairman of our Board of Directors.

Woodward share the power to vote and direct the disposition

of all shares of common stock owned by MHW Partners, L.P.

Woodward is a citizen of the United States and our current Chairman of our

Board of Directors.

MHW Partners, L.P.

beneficially owns 674,013 shares of common stock, and 150,000 shares that may be acquired upon the exercise of outstanding stock options by Mr.

The options vested in three installments:

90,000 options vested in three installments:

one-third vested immediately on the date of grant;

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The options have an exercise price of $0.73 and expire on May 18, 2025.

The remaining 30,000 options became immediately exercisable upon their grant on December 6, 2019, have an exercise price of $1.50 per share, and expire on December 6, 2019.

30,000 options became immediately exercisable upon their grant on December 6, 2019, have an exercise price of $1.50 per share, and expire on December 6, 2029.

The remaining 30,000 options became immediately exercisable upon their grant on November 16, 2020, have an exercise price of $1.40 per share, and expire on November 16, 2030.

However, the aggregate number of shares of common stock into which such warrants and options are exercisable, and which MHW Partners, L.P.

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All directors and executive officers as a group

* Percentage of shares beneficially owned

does not exceed one percent of issued and outstanding shares of stock.

* Percentage of shares beneficially owned does

not exceed one percent of issued and outstanding shares of stock.

_______________________

(1) Unless otherwise stated, the address of each beneficial

owners listed on the table is c/o Precision Optics Corporation, Inc., 22 East Broadway, Gardner, MA 01440.

(2) Represents shares with respect to which each beneficial

owner listed has or will have, upon acquisition of such shares upon exercise or conversion of options, warrants, conversion privileges

or other rights exercisable within 60 sixty days, sole voting and investment power.

(3) As of September 20, 2020, we had 13,191,789 shares of our

common stock issued and outstanding.

Percentages are calculated on the basis of the amount of issued and outstanding common stock

plus, for each person or group, any securities that such person or group has the right to acquire within 60 days of September

20, 2020 pursuant to options, warrants, conversion privileges or other rights.

Forkey is a member of our Board of Directors and serves

as our Chief Executive Officer, President and Treasurer.

Forkey’s beneficial ownership consists of (a) 333,620 shares

of common stock held in joint ownership with his wife, Heather Forkey, with whom he shares voting and dispositive control, and

(b) 500,000 shares of common stock that may be acquired upon the exercise of outstanding stock options.

Unless otherwise stated, the address of each beneficial owners listed on the table is c/o Precision Optics Corporation, Inc., 22 East Broadway, Gardner, MA 01440.

Represents shares with respect to which each beneficial owner listed has or will have, upon acquisition of such shares upon exercise or conversion of options, warrants, conversion privileges or other rights exercisable within 60 sixty days, sole voting and investment power.

As of September 20, 2021, we had 13,282,476 shares of our common stock issued and outstanding.

Percentages are calculated on the basis of the amount of issued and outstanding common stock plus, for each person or group, any securities that such person or group has the right to acquire within 60 days of September 20, 2021 pursuant to options, warrants, conversion privileges or other rights.

Forkey is a member of our Board of Directors and serves as our Chief Executive Officer, President and Treasurer.

Forkey’s beneficial ownership consists of (a) 333,620 shares of common stock held in joint ownership with his wife, Heather Forkey, with whom he shares voting and dispositive control, and (b) 650,000 shares of common stock that may be acquired upon the exercise of outstanding stock options.

Peter Woodward is the Chairman of our Board of Directors.

Woodward is the managing member and general partner of MHW Partners and in such capacity, Mr.

Woodward holds the power to

vote and direct the disposition of all shares of common stock owned by MHW Partners.

On September 28, 2012, MHW Partners purchased

222,223 shares of our common stock, and warrants to purchase up to 168,386 shares of our common stock at an exercise price of

$1.11 per share, subject to adjustment and a call provision if certain market price targets are reached, and an expiration date

of September 28, 2017.

Woodward holds the power to vote and direct the disposition of all shares of common stock owned by MHW Partners.

On September 28, 2012, MHW Partners purchased 222,223 shares of our common stock, and warrants to purchase up to 168,386 shares of our common stock at an exercise price of $1.11 per share, subject to adjustment and a call provision if certain market price targets are reached, and an expiration date of September 28, 2017.

On July 2, 2014, MHW Partners purchased 125,000 shares of common stock.

On October 19, 2015, MHW Partners

purchased 100,000 shares of common stock.

On November 22, 2016 MHW Partners purchased 156,667 shares of common stock, and warrants

to purchase 78,333 shares of common stock at an exercise at a variable exercise price subject to the Companies achievement of

certain performance criteria.

On October 19, 2015, MHW Partners purchased 100,000 shares of common stock.

On November 22, 2016 MHW Partners purchased 156,667 shares of common stock, and warrants to purchase 78,333 shares of common stock at an exercise at a variable exercise price subject to the Companies achievement of certain performance criteria.

Woodward exercised the 78,333 November 22, 2016 warrants on October 16, 2017 at $0.01 per share.

Woodward’s beneficial ownership consists of (a) 674,013 shares of common stock held through MHW Partners, L.P., and

(b) 120,000 shares of common stock which may be acquired upon the exercise of outstanding stock options.

Woodward’s beneficial ownership consists of (a) 674,013 shares of common stock held through MHW Partners, L.P., and (b) 150,000 shares of common stock which may be acquired upon the exercise of outstanding stock options.

Miles is a member of our Board of Directors.

beneficial ownership consists of (a) 15,112 shares of common stock, and (b) 94,400 shares of common stock that may be acquired

upon the exercise of outstanding stock options.

beneficial ownership consists of (a) 15,112 shares of common stock, and (b) 113,600 shares of common stock that may be acquired upon the exercise of outstanding stock options.

Andrew Miclot is a member of our Board of Directors.

Miclot’s beneficial ownership consists of 80,000 shares that may be acquired upon the exercise of outstanding stock

Habhegger became our Chief Financial Officer and Secretary

effective December 1, 2019.

Habhegger’s beneficial ownership consists of 100,000 shares of common stock that may be

acquired upon the exercise of outstanding stock options.

Mangadu became our President, Ross Optical Division

upon our acquisition of Ross Optical, Inc.

Miclot’s beneficial ownership consists of 100,000 shares that may be acquired upon the exercise of outstanding stock options.

Habhegger became our Chief Financial Officer and Secretary effective December 1, 2019.

Habhegger’s beneficial ownership consists of 180,000 shares of common stock that may be acquired upon the exercise of outstanding stock options.

Mangadu became our President, Ross Optical Division upon our acquisition of Ross Optical, Inc.

effective July 1, 2019.

Mangadu’s beneficial ownership consists of

100,000 shares of common stock that may be acquired upon the exercise of outstanding stock options.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

Mangadu’s beneficial ownership consists of 125,000 shares of common stock that may be acquired upon the exercise of outstanding stock options.

CERTAIN RELATIONSHIPS

AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

Certain Relationships and Related Transactions

Since the beginning of the last fiscal

year we had the following related party transactions.

Transactions with Officers and Directors

In March 2019 our board of directors approved

the payment of $10,000 per quarter to our Chairman of the Board for the performance of services to the Company beginning retroactively

for the quarter ended December 31, 2018.

The agreement has no maturity date and $20,000 was paid prior to June 30, 2019, $10,000

is included in accounts payable at June 30, 2019, and $10,000 was paid for each of the four quarters of fiscal year ending June

Transactions with Stockholders Known

by the Company to Own 5% or More of the Company’s Common Stock

At June 30, 2019, we received payments

for common stock subscriptions totaling $925,000 at $1.25 per share.

On July 1, 2019, we received $950,000 and closed the private

Since the beginning of the last fiscal year ended

June 30, 2021 we had the following related party transactions.

At June 30, 2019, we had received payments for

common stock subscriptions totaling $925,000 at $1.25 per share.

On July 1, 2019 we received an additional $25,000 and closed the private

placement on that date by issuing 760,000 unregistered common shares.

The placement proceeds were used to partially fund the business

acquisition of the Ross Optical division closed on July 1, 2019 with an effective date of June 1, 2019.

In conjunction with the

placement, we also entered into a registration rights agreement with the investors requiring submission of a registration statement

with the Securities and Exchange Commission within 120 days of the placement.

Such registration statement was filed on October

29, 2019 and made effective by the SEC on November 27, 2019.

Sandra Pessin acquired 200,000 shares in this placement for $250,000

or $1.25 per share, and at that time Ms.

Pessin was an owner of more than 5% of the Company’s outstanding common stock.

On April 14, 2020 closed on a private placement

by issuing 200,000 unregistered shares of our common stock at $1.25 per share or $250,000 to be used for general working capital

In conjunction with the placement, we also entered into a registration rights agreement with the investors requiring

submission of a registration statement with the Securities and Exchange Commission within 120 days of the placement.

A registration

statement for this private placement was filed with the SEC on August 14, 2020.

Hershey Strategic Capital, LP acquired 20,000 shares

in this placement for $25,000 or $1.25 per share, and at that time Hershey Strategic Capital, LP was an owner of more than 5% of

the Company’s outstanding common stock.

acquisition of the Ross Optical division.

In compliance with the registration rights agreement entered into with the investors, on October

29, 2019 we filed a registration statement for the shares with the Securities and Exchange Commission which became effective on November

Sandra Pessin acquired 200,000 shares in this placement for $250,000 or $1.25 per share, and at that time Ms.

an owner of more than 5% of our outstanding common stock.

On April 14, 2020 we sold 200,000 shares of common

stock for cash at $1.25 per share or $250,000 to be used for general working capital needs.

In compliance with the registration rights

agreement entered into with the investors, on August 14, 2020 we filed a registration statement for the shares with the Securities and

Exchange Commission which became effective on November 4, 2020.

Hershey Strategic Capital, LP acquired 20,000 shares in this placement

for $25,000 or $1.25 per share, and at that time Hershey Strategic Capital, LP was an owner of more than 5% of our outstanding common

Director Independence

3 unchanged sentences

Miclot were “independent”

under the standards of independence set forth in the Nasdaq Listing Rules and the rules under the Securities Exchange Act of 1934.

PRINCIPAL ACCOUNTING FEES AND SERVICES.

Independent Registered Public Accounting

Our principal and sole independent

registered public accounting firm for the fiscal years ending June 30, 2020 and 2019 is Stowe & Degon LLC, referred

The following table presents fees for professional audit services and other services rendered by Stowe, for the

fiscal years ended June 30, 2020 and 2019:

as defined under the

standards of independence set forth in the Nasdaq Listing Rules and the rules under the Securities Exchange Act of 1934.

ACCOUNTING FEES AND SERVICES.

Independent Registered Public Accounting Firm

Our principal and sole independent registered

public accounting firm for the fiscal years ending June 30, 2021 and 2020 is Stowe & Degon LLC, referred to as Stowe.

The following

table presents fees for professional audit services and other services rendered by Stowe, for the fiscal years ended June 30, 2021

Audit Fees (1)

Audit Related Fees (2)

Business Acquisition Related Fees (3)

Total Audit and Audit Related Fees

3 unchanged sentences

Audit-related fees are comprised of fees for assurance and related attestation services that are reasonably related to the performance of the audit of our annual financial statements, or the review thereof, and fees for due diligence services.

Business acquisition related fees relate to audit, assurance and related attestation services relating to our acquisition of the Ross Optical division in June 2019.

Tax fees for fiscal 2021 and 2020 are comprised of fees for professional services performed with respect to corporate tax compliance, tax return preparation and filing, tax planning and tax advice.

Pre-Approval Policies

Under the direction of our Chief Executive

Officer, our Board of Directors pre-approves all services provided by our independent registered public accounting firm.

the above services and fees were reviewed and approved by the Board of Directors either before or after the respective services

were rendered.

The Board of Directors has considered the nature and amount of fees billed by Stowe and believes that the provision

of services for activities unrelated to the audit is compatible with maintaining the firm’s independence.

Under the direction of our Chief Executive Officer,

our Board of Directors pre-approves all services provided by our independent registered public accounting firm.

100% of the above services

and fees were reviewed and approved by the Board of Directors either before or after the respective services were rendered.

of Directors has considered the nature and amount of fees billed by Stowe and believes that the provision of services for activities unrelated

to the audit is compatible with maintaining the firm’s independence.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

Documents filed as part of this report

The following documents are filed as part of this Annual Report

Documents filed as part of this

The following documents are filed as part of this Annual Report on

FINANCIAL STATEMENTS

The following documents are filed in Part II, Item 8

of this Annual Report on Form 10-K:

The following documents are filed in Part II, Item 8 of

this Annual Report on Form 10-K:

Report of Independent Registered Public Accounting Firm

3 unchanged sentences

Equity for the years ended June 30, 2021 and 2020

Consolidated Statements of Cash Flows for the

years ended June 30, 2020 and 2019

Consolidated Statements of Cash Flows for the years ended June 30, 2021 and 2020

Notes to Consolidated Financial Statements

FINANCIAL STATEMENT SCHEDULES

All financial statement schedules have been omitted as they

are not required, not applicable, or the required information is otherwise included.

The exhibits listed below are filed with or incorporated by

reference in this report.

Asset Purchase Agreement between the Company and Optometrics Corporation, dated January 18, 2008 (included as Exhibit 2.1 to the Form 8-K filed January 25, 2008 and incorporated herein by reference).

Articles of Organization of Precision Optics Corporation, Inc., as amended (included as Exhibit 3.1 to the Form SB-2 filed March 16, 2007, and incorporated herein by reference).

Bylaws of Precision Optics Corporation, Inc.

(included as Exhibit 3.2 to the Form S-1 filed December 18, 2008, and incorporated herein by reference).

Articles of Amendment to the Articles of Organization of Precision Optics Corporation, Inc., dated November 25, 2008 and effective December 11, 2008 (included as Exhibit 3.1 to the Form 8-K filed December 11, 2008, and incorporated herein by reference).

Amended and Restated Bylaws of Precision Optics Corporation, Inc.

(included as Exhibit 3.1 to the Current Report on Form 8-K filed July 11, 2014, and incorporated herein by reference).

Precision Optics Corporation, Inc.

2011 Equity Incentive Plan, dated October 13, 2011 (included as Exhibit 10.2 to Form S-8 filed October 14, 2011, and incorporated herein by reference.)

Precision Optics Corporation, Inc.

Amended 2011 Equity Incentive Plan, dated October 14, 2011, as amended on April 16, 2015 (included as Exhibit 10.1 to the Company’s Registration Statement on Form S-8 filed April 20, 2015, and incorporated herein by reference).

Consulting Agreement with Donald A.

Major dated June 15, 2016 (included as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 23, 2016, and incorporated herein by reference).

Compensation Agreement, by and among Precision Optics Corporation, Inc.

All financial statement schedules have been omitted as they are not

required, not applicable, or the required information is otherwise included.

The exhibits listed below are filed with or incorporated by reference

in this report.

Purchase Agreement between the Company and Optometrics Corporation, dated January 18, 2008 (included as Exhibit 2.1 to the Form 8-K

filed January 25, 2008 and incorporated herein by reference).

of Organization of Precision Optics Corporation, Inc., as amended (included as Exhibit 3.1 to the Form SB-2 filed March 16, 2007,

and incorporated herein by reference).

of Precision Optics Corporation, Inc.

(included as Exhibit 3.2 to the Form S-1 filed December 18, 2008, and incorporated herein by

of Amendment to the Articles of Organization of Precision Optics Corporation, Inc., dated November 25, 2008 and effective December

11, 2008 (included as Exhibit 3.1 to the Form 8-K filed December 11, 2008, and incorporated herein by reference).

and Restated Bylaws of Precision Optics Corporation, Inc.

(included as Exhibit 3.1 to the Current Report on Form 8-K filed July 11,

2014, and incorporated herein by reference).

Optics Corporation, Inc.

2011 Equity Incentive Plan, dated October 13, 2011 (included as Exhibit 10.2 to Form S-8 filed October 14,

2011, and incorporated herein by reference.)

Optics Corporation, Inc.

Amended 2011 Equity Incentive Plan, dated October 14, 2011, as amended on April 16, 2015 (included as Exhibit

10.1 to the Company’s Registration Statement on Form S-8 filed April 20, 2015, and incorporated herein by reference).

Agreement, by and among Precision Optics Corporation, Inc.

and Joseph N.

Forkey, dated August 2, 2018 (included as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 3, 2018, and incorporated herein by reference).

Form of Securities Purchase Agreement by and among the Company and the Investors, dated October 16, 2018 (included as Exhibit 10.1 to the Form 8-K filed on October 18, 2018, and incorporated herein by reference).

Form of Registration Rights Agreement by and among the Company and the Investors, dated October 16, 2018 (included as Exhibit 10.2 to the Form 8-K filed on October 18, 2018, and incorporated herein by reference).

Forkey, dated August 2, 2018 (included as Exhibit 10.1 to

the Company’s Current Report on Form 8-K filed on August 3, 2018, and incorporated herein by reference).

10.4&dagger;+

Asset Purchase Agreement dated July 1, 2019, between Precision Optics Corporation, Inc.

Purchase Agreement dated July 1, 2019, between Precision Optics Corporation, Inc.

and Ross Optical Industries, Inc.

and the shareholders (included as Exhibit 10.1 to the Form 8-K filed on July 8, 2019, and incorporated herein by reference).

Form of Purchase Agreement, by and among Precision Optics Corporation, Inc.

and several Investors, dated July 1, 2019 (included as Exhibit 10.2 to the Form 8-K filed on July 8, 2019, and incorporated herein by reference).

Form of Registration Rights Agreement, by and among Precision Optics Corporation, Inc.

and several Investors, dated July 1, 2019 (included as Exhibit 10.3 to the Form 8-K filed on July 8, 2019, and incorporated herein by reference).

Employment Agreement, by and among Precision Optics Corporation.

and Divaker Mangadu, dated July 1, 2019 (included as Exhibit 10.4 to the Form 8-K filed on July 8, 2019, and incorporated herein by reference).

10.11&dagger;

Employment agreement, by and among Precision Optics Corporation, Inc.

and Jeff DiRubio, dated April 26, 2019 (included as Exhibit 10.16 to the annual report on Form 10-K filed on September 26, 2019, and incorporated herein by reference).

Lease Agreement, by and among Precision Optics Corporation, Inc.

and the shareholders

(included as Exhibit 10.1 to the Form 8-K filed on July 8, 2019, and incorporated herein by reference).

of Purchase Agreement, by and among Precision Optics Corporation, Inc.

and several Investors, dated July 1, 2019 (included as Exhibit

10.2 to the Form 8-K filed on July 8, 2019, and incorporated herein by reference).

of Registration Rights Agreement, by and among Precision Optics Corporation, Inc.

and several Investors, dated July 1, 2019 (included

as Exhibit 10.3 to the Form 8-K filed on July 8, 2019, and incorporated herein by reference).

Agreement, by and among Precision Optics Corporation.

and Divaker Mangadu, dated July 1, 2019 (included as Exhibit 10.4 to the

Form 8-K filed on July 8, 2019, and incorporated herein by reference).

agreement, by and among Precision Optics Corporation, Inc.

and Jeff DiRubio, dated April 26, 2019 (included as Exhibit 10.16 to the

annual report on Form 10-K filed on September 26, 2019, and incorporated herein by reference).

Agreement, by and among Precision Optics Corporation, Inc.

and Texzona Industries Ltd.

dated July 1, 2019 (included as Exhibit 10.17 to the annual report on Form 10-K filed on September 26, 2019, and incorporated herein by reference).

Employment Offer Letter Daniel S.

Habhegger, dated December 2, 2019 (included as Exhibit 10.18 to the quarterly report on Form 10-Q filed on February 13, 2020, and incorporated herein by reference).

Form of Securities Purchase Agreement, by and among Precision Optics Corporation, Inc.

and several Investors, dated April 14, 2020 (included as Exhibit 10.1 to the current report on Form 8-K filed on May 7, 2020, and incorporated herein by reference).

Form of Registration Rights Agreement, by and among Precision Optics Corporation, Inc.

and several Investors, dated April 14, 2020 (included as Exhibit 10.2 to the current report on Form 8-K filed on May 7, 2020, and incorporated herein by reference).

Precision Optics Corporation, Inc.

Corporate Code of Ethics and Conduct (included as Exhibit 14.1 to the Form 10-K filed September 28, 2008, and incorporated herein by reference).

Subsidiaries of the Registrant (included as Exhibit 21.1 to the Form 10-K filed September 26, 2008, and incorporated herein by reference).

dated July 1, 2019 (included as Exhibit 10.17

to the annual report on Form 10-K filed on September 26, 2019, and incorporated herein by reference).

Offer Letter Daniel S.

Habhegger, dated December 2, 2019 (included as Exhibit 10.18 to the quarterly report on Form 10-Q filed on

February 13, 2020, and incorporated herein by reference).

of Securities Purchase Agreement, by and among Precision Optics Corporation, Inc.

and several Investors, dated April 14, 2020 (included

as Exhibit 10.1 to the current report on Form 8-K filed on May 7, 2020, and incorporated herein by reference).

of Registration Rights Agreement, by and among Precision Optics Corporation, Inc.

and several Investors, dated April 14, 2020 (included

as Exhibit 10.2 to the current report on Form 8-K filed on May 7, 2020, and incorporated herein by reference).

Optics Corporation, Inc.

Corporate Code of Ethics and Conduct (included as Exhibit 14.1 to the Form 10-K filed September 28, 2008,

and incorporated herein by reference).

of the Registrant (included as Exhibit 21.1 to the Form 10-K filed September 26, 2008, and incorporated herein by reference).

Consent of Independent Registered Public Accounting Firm.

3 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 .

XBRL Instance Document

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Extension Calculation Linkbase Document

XBRL Taxonomy Extension Definition Linkbase Document

XBRL Taxonomy Extension Label Linkbase Document

XBRL Taxonomy Extension Presentation Linkbase Document

XBRL Instance

XBRL Taxonomy Extension Schema

XBRL Taxonomy Extension Calculation Linkbase

XBRL Taxonomy Extension Definition Linkbase

XBRL Taxonomy Extension Label Linkbase

XBRL Taxonomy Extension Presentation Linkbase

Filed herewith.

1 unchanged sentence

The Company will furnish copies of any such information to the SEC upon request.

The schedules to agreement have been omitted from this filing pursuant to Item 601(a)(5) of

Regulation S-K.

The schedules to agreement have been omitted from this filing pursuant to Item 601(a)(5) of Regulation S-K.

The Company will furnish copies of any such schedules to the SEC upon request.

Copies of above exhibits not contained

herein are available to any stockholder, upon written request to:

Chief Financial Officer, Precision Optics Corporation, Inc.,

22 East Broadway, Gardner, MA 01440.

Copies of above exhibits not contained herein

are available to any stockholder, upon written request to:

Chief Financial Officer, Precision Optics Corporation, Inc., 22 East Broadway,

Gardner, MA 01440.

FORM 10-K SUMMARY.

Pursuant to the requirements of Section 13

or 15(d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,

thereunto duly authorized.

or 15(d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto

duly authorized.

PRECISION OPTICS CORPORATION, INC.

6 unchanged sentences

Chief Financial Officer

(Principal Financial Officer and Principal Accounting

(Principal Financial Officer and Principal Accounting Officer)

Pursuant to the requirements of the Securities

Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities

and on the dates indicated.

Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and

on the dates indicated.

/s/ Joseph N.

13 unchanged sentences

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 9A. Controls and Procedures