What changed in this filing

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Item 1A. Risk Factors

2022-09-27 compared with 2021-09-28 · 60 added, 47 removed, 297 unchanged (26% of the section changed)

6 unchanged sentences

The following information

should be read together and in conjunction with “Forward-Looking Statements,”

“Item 1.

Business,”

Management’s Discussion and Analysis of Financial Condition and Results of Operations,”

our consolidated financial statements

should be read together and in conjunction with “Forward-Looking Statements,” “Item 1.

Business,” “Item

Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our consolidated financial statements

and the accompanying notes thereto.

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and results of operations could be adversely affected.

We may not realize the opportunities from

our acquisition of Lighthouse Imaging, LLC.

In October 2021, we purchased substantially all

the assets of Lighthouse Imaging, LLC, a manufacturer of advanced optical imaging systems and accessories.

With the Lighthouse

acquisition we strengthened our expertise in electrical engineering and development of end-to-end medical visualization devices.

of the Lighthouse acquisition will depend on our ability to realize the anticipated opportunities to expand our product offerings

and our stable of customers.

There is no assurance that we will be able to realize those opportunities.

The COVID-19 world-wide pandemic and the

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At June 30, 2022, our largest customer account receivable balance was 8% of total accounts receivable.

June 30, 2020, our largest customer account receivable balance was 14% of total accounts receivable.

No other customer accounted

form more than 10% of total accounts receivable at June 30, 2021, or 2020.

2021, our largest customer account receivable balance was 16% of total accounts receivable.

No other customer accounted for more than

10% of total accounts receivable at June 30, 2022, or 2021.

In the future, a small number of customers may

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We could suffer unrecoverable losses on

our customers’

accounts receivable, which would adversely affect our financial results.

our customers’ accounts receivable, which would adversely affect our financial results.

At June 30, 2022, our largest customer account

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The loss of Dr.

Forkey’s services could damage our business.

Forkey provides highly valuable contributions

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Forkey or Mr.

We must continue to be able to attract employees

with the scientific and technical skills that our business requires and if we are unable to attract and retain such individuals, our business

could be severely damaged.

Our ability to attract employees with a high degree

of scientific and technical talent is crucial to the success of our business.

There is intense competition for the services of such persons,

and we cannot guarantee that we will be able to attract and retain individuals possessing the necessary qualifications.

If we cannot attract

such individuals, we may not be able to perform the necessary design services for our customers or produce our products causing damage

to our business or an inability to meet customer demand or increase revenues.

We must continue to be able to attract and

retain employees with the scientific and technical skills that our business requires and if we are unable to attract and retain such individuals,

our business could be severely damaged.

Our ability to attract and retain employees with

a high degree of scientific and technical talent is crucial to the success of our business.

There is intense competition for the services

of such persons, and we cannot guarantee that we will be able to attract and retain individuals possessing the necessary qualifications.

If we cannot attract and retain such individuals, we may not be able to perform the necessary design services for our customers or produce

our products causing damage to our business or an inability to meet customer demand or increase revenues.

We are subject to a high degree of regulatory

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state or local agencies or comparable agencies in other countries.

We may lose the FDA’s permission to manufacture

and market our current products or may not obtain the necessary regulatory permission, approvals or licenses for the manufacturing or

2 unchanged sentences

from future legislation or administrative action.

If we lose the FDA’s permission to manufacture and market our current products

or we do not obtain regulatory permission to manufacture and market our future products, our revenues may decline and our business may

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the costs of initial product production in connection with new products;

the timing of new product introductions—both by us and by our competitors;

the timing and level of market acceptance of new products or enhanced versions of our existing products;

our ability to retain existing customers and customers’

continued demand for our products and services;

our customers’

inventory levels, and levels of demand for our customers’

products and services;

our ability to retain existing customers and customers’ continued demand for our products and services;

our customers’ inventory levels, and levels of demand for our customers’ products and services;

competitive pricing pressures.

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period to another.

Some of our competitors are large, well-financed

Many of our competitors are large, well-financed

companies who have research and marketing capabilities that are superior to ours.

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In addition, regulation imposed on market participants generally, such as foreign tariff increases could negatively affect the overall

profitability of Ross Optical’s international business.

These developments could impact Ross Optical’s

profitability of Ross Optical’s international business.

These developments could impact Ross Optical’s

profitability, or even make it uneconomical for Ross Optical to continue to conduct all or certain of its business, or could cause Ross

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our ability to successfully conceive and to develop new products and services to enhance the performance characteristics and methods of manufacture of existing products;

our ability to retain existing customers and customers’

continued demand for our products and services;

our ability to retain existing customers and customers’ continued demand for our products and services;

the timing of our research and development expenditures and of new product introductions;

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price and volume fluctuations in the stock market at large which do not relate to our operating performance.

“Penny stock”

“Penny stock” rules may

make buying or selling our securities difficult which may make our stock less liquid and make it harder for investors to buy and sell

our securities.

Trading in our securities is subject to the SEC’s

“penny stock”

rule and we anticipate that trading in our securities will continue to be subject to the penny stock rules for

Trading in our securities is subject to the SEC’s

“penny stock” rule and we anticipate that trading in our securities will continue to be subject to the penny stock rules for

the foreseeable future.

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securities to persons other than prior customers and accredited investors must, prior to the sale, make a special written suitability

determination for the purchaser and receive the purchaser’s written agreement to execute the transaction.

Unless an exception is

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shares of our common stock issuable upon exercise of stock options outstanding, at a weighted average exercise price of $1.33 per share.

As of June 30, 2021, a total of 731,498 shares of our common stock are reserved for issuance under our 2021 Equity Incentive Plan.

Additionally,

we issued 90,687 shares of our common stock during fiscal year 2021 for stock option exercises, which brought our total common shares

outstanding to 13,282,476 at June 30, 2021.

Moreover, we expect to issue additional shares and options to purchase shares of our common

stock to compensate employees, consultants and directors, and we may issue additional shares to raise capital.

Any such issuances will

have the effect of further diluting the interest of the holders of our securities.

As of June 30, 2022, a total of 206,403 and 1,000,000 shares of our common stock are reserved for issuance under our 2021 and 2022 Equity

Incentive Plans respectively.

Additionally, we issued 195,113 shares of our common stock during fiscal year 2022 for compensation and

stock option exercises, and 3,437,500 shares of our common stock were issued during fiscal 2022 for the Lighthouse acquisition, which

brought our total common shares outstanding to 16,915,089 at June 30, 2022.

Moreover, we expect to issue additional shares and options

to purchase shares of our common stock to compensate employees, consultants and directors, and we may issue additional shares to raise

Any such issuances will have the effect of further diluting the interest of the holders of our securities.

The market price of

our common stock may be volatile, and the value of stockholders’ investment could decline significantly.

The trading price for our

common stock has been, and we expect it to continue to be, volatile.

The price at which our common stock trades depends upon a number

of factors, including our historical and anticipated operating results, our financial situation, announcements of new products by us or

our competitors, our ability or inability to raise the additional capital we may need and the terms on which we raise it, and general

market and economic conditions.

Some of these factors are beyond our control.

Broad market fluctuations may lower the market price of

our common stock and affect the volume of trading in our stock, regardless of our financial condition, results of operations, business

or prospects.

It is impossible to assure you that the market price of our shares of common stock will not fall in the future.

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 1A. Risk Factors