What changed in this filing

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Item 1. Financial Statements

2025-02-13 compared with 2024-11-14 · 132 added, 86 removed, 303 unchanged (42% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

September 30,

Current Assets:

Cash and cash equivalents

Accounts receivable, net of allowance for doubtful accounts of $ 103,224 at September 30, 2024 and $ 118,872 at June 30, 2024

Accounts receivable, net of allowance for credit losses of $ 121,901 at December 31, 2024 and $ 118,872 at June 30, 2024

Inventories, net

Prepaid expenses

26 unchanged sentences

50,000,000 shares authorized;

issued and outstanding – 6,350,170 shares at September 30, 2024 and 6,073,939 at June 30, 2024

issued and outstanding – 6,355,534 shares at December 31, 2024 and 6,073,939 at June 30, 2024

Additional paid-in capital

8 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED

SEPTEMBER 30, 2024 AND 2023

Ended September 30,

FOR THE SIX MONTHS ENDED

DECEMBER 31, 2024 AND 2023

Ended December 31,

Cost of Goods Sold

2 unchanged sentences

Total Operating Expenses

Operating Loss

Operating Income (Loss)

( 2,156,962 )

( 1,109,455 )

Interest Expense

Net Income (Loss)

$ ( 969,681 )

$ ( 758,802 )

Loss Per Share:

Basic & Fully Diluted

$ ( 2,280,928 )

$ ( 1,223,217 )

Income (Loss) Per Share:

Basic and Fully Diluted

Weighted Average Common Shares Outstanding:

Basic & Fully Diluted

Basic and Fully Diluted

The accompanying notes are an integral part

2 unchanged sentences

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

FOR THE THREE MONTHS ENDED

FOR THE SIX MONTHS ENDED

31, 2024 AND 2023

Three Month Period Ended September 30, 2024

Period Ended December 31, 2024

Stockholders’

1 unchanged sentence

$ ( 51,190,384 )

Issuance of common stock in registered direct offering

Proceeds from exercise of stock option

Issuance of common stock in registered

direct offering

Proceeds from exercise of stock

Stock-based compensation

3 unchanged sentences

( 52,501,631 )

Three Month Period Ended September 30, 2023

Stock-based compensation

Issuance of common stock for consulting

Balance, December 31, 2024

$ ( 53,471,312 )

Period Ended December 31, 2023

Stockholders’

4 unchanged sentences

( 48,703,422 )

Stock-based compensation

Proceeds from the exercise of stock

Balance, December 31, 2023

$ ( 49,462,224 )

The accompanying notes are an integral part

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED

FOR THE SIX MONTHS ENDED

31, 2024 AND 2023

Ended September 30,

Ended December 31,

Cash Flows from Operating Activities:

Net Income (Loss)

$ ( 2,280,928 )

9 unchanged sentences

Accounts payable

Contract liabilities

Customer advances

Accrued compensation and other

1 unchanged sentence

( 1,105,431 )

( 1,492,824 )

Cash Flows from Investing Activities:

5 unchanged sentences

Payments of long-term debt

Payment of debt modification costs

Payment on revolving line of credit

Proceeds from registered direct sale of common stock, net

Payments of debt issuance costs

Payments on line of credit

Gross proceeds from private placements of common stock

Gross proceeds from the exercise of stock options

Net cash provided by (used in) financing activities

Net increase(decrease) in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

( 1,938,808 )

7 unchanged sentences

Principles of Consolidation and Operations

The accompanying consolidated financial statements

include the accounts of Precision Optics Corporation, Inc.

The accompanying consolidated financial

statements include the accounts of Precision Optics Corporation, Inc.

and its wholly-owned subsidiaries (the “Company”).

All significant

intercompany accounts and transactions have been eliminated in consolidation.

All significant intercompany accounts and transactions have been eliminated in consolidation.

These consolidated financial statements have been

prepared by the Company, without audit, and reflect normal recurring adjustments which, in the opinion of management, are necessary for

a fair statement of the results of the first three months of the Company’s fiscal year 2025.

a fair statement of the results of the first six months of the Company’s fiscal year 2025.

These consolidated financial statements

16 unchanged sentences

plus the number of potentially dilutive securities outstanding during the period such as stock options.

For the three months ended September

30, 2024 and 2023, potentially dilutive securities outstanding have been excluded from the computations of weighted-average shares outstanding

because such securities have an antidilutive impact due to the net loss reported during those periods.

The number of shares issuable upon

the exercise of outstanding stock options that were excluded from the computation of fully dilutive weighted average shares outstanding

was approximately 1,329,236 for the three months ended September 30, 2024 and 1,123,140 for the three months ended September 30, 2023.

For the three months and six months

ended December 31, 2024, potentially dilutive securities outstanding have been excluded from the computations of weighted-average shares

outstanding because such securities have an antidilutive impact due to the net loss reported during those periods.

The number of shares

issuable upon the exercise of outstanding stock options that were excluded from the computation of fully dilutive weighted average shares

outstanding was approximately 1,449,236 for the three and six months ended December 31, 2024.

The following is the calculation of income (loss) per share for the

three months ended September 30, 2024 and 2023:

three months and six months ended December 31, 2024 and 2023:

Schedule of income (loss) per share

Ended September 30,

Ended December 31,

Net Income (Loss) Basic and Fully Diluted

1 unchanged sentence

$ ( 758,802 )

$ ( 2,280,928 )

$ ( 1,223,217 )

Weighted Average Shares Outstanding

Basic & Fully Diluted

Loss Per Share – Basic & Fully Diluted

Basic and Fully Diluted

Income (Loss) Per Share – Basic and Fully Diluted

Significant Customers and Concentration of Credit Risk

Financial instruments that subject the Company

to credit risk consist primarily of cash equivalents and trade accounts receivable.

The Company places its investments with highly rated

financial institutions.

The Company has not experienced any losses on these investments to date.

The allowance for credit losses was $ 121,901 at

December 31, 2024, and $ 773,256 at December 31, 2023.

Schedule of allowance;

for credit losses

Six Months Ended December 31,

Allowance for credit losses, beginning of period

Change in the provision for expected credit losses

Writeoffs charged against the allowance

Allowance for credit losses, end of period

During the six months ended December 31, 2023,

the Company increased the credit loss reserve to cover potential losses due to the non-payment of one engineering customer and subsequently

wrote off the receivable against the reserve during the year ended June 30, 2024.

The Company generally does not require collateral or

other security as a condition of sale, rather it relies on credit approval, balance limitation and monitoring procedures to control credit

risk in trade account financial instruments.

Management believes the allowance for credit losses, which is established based upon review

of specific account balances and historical experience, is adequate at December 31, 2024.

Income taxes are accounted for under the asset

19 unchanged sentences

Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

No such impairments of goodwill or patents have been estimated by management as of September 30, 2024.

No such impairments of goodwill or patents have been estimated by management as of December 31, 2024.

Inventories are stated at the lower of cost (first-in,

1 unchanged sentence

Schedule of inventories

September 30,

Raw Materials

1 unchanged sentence

Finished Goods

Total Inventories

Total Inventories (Net)

The inventory reserve was $ 322,065 and $ 266,843 at December 31, 2024

and June 2024, respectively.

BANK FINANCING ACTIVITIES

10 unchanged sentences

Borrowings under the Revolver

at September 30, 2024 were $ 500,000 , with $ 750,000 remaining available for use.

at December 31, 2024 were $ 900,000 , with $ 350,000 remaining available for use.

The Company’s Loan Agreement with the Lender

contains a minimum annual debt service coverage ratio covenant of 1.2x, for the period ending June 30, 2024.

The Company did not meet

this annual debt service coverage ratio as of such fiscal year end date.

The Company’s Lender has agreed to waive compliance with

such debt service ratio covenant for the period ending June 30, 2024.

In addition to such waiver, the Lender and the Company have entered

into an amendment dated September 30, 2024 to that certain Term Loan dated October 4, 2021, as amended and that certain Promissory Note

dated June 2, 2023 (collectively, the “Notes”) which amendments provide for a six month period of interest only payments from

October 15, 2024 through March 15, 2025 for the Notes.

The Company will begin to pay principal and interest under the Notes beginning

with the payments due on April 15, 2025, with a new amortization schedule for the remaining term for such Notes through their maturity

There were no other changes to or modifications to the Loan Agreement or the Notes.

contains a minimum annual debt service coverage ratio covenant of 1.2x.

The Company did not meet this annual debt service coverage ratio

for the fiscal year ended June 20, 2024.

The Company’s Lender has agreed to waive compliance with such debt service ratio covenant

for the period ending June 30, 2024.

In addition to such waiver, the Lender and the Company have entered into an amendment dated September

30, 2024 to that certain Term Loan dated October 4, 2021, as amended and that certain Promissory Note dated June 2, 2023 (collectively,

the “Notes”) which amendments provide for a six month period of interest only payments from October 15, 2024 through March

15, 2025 for the Notes.

The Company will begin to pay principal and interest under the Notes beginning with the payments due on April

15, 2025, with a new amortization schedule for the remaining term for such Notes through their maturity date.

There were no other changes

to or modifications to the Loan Agreement or the Notes.

Long-Term Debt

Long-term debt consists of the following at September

Long-term debt consists of the following at December

Schedule of long-term debt

8 unchanged sentences

Long-term debt, net of current maturities and debt issuance costs

At September 30, 2024 principal payments due on the Term Loan Note

At December 31, 2024 principal payments due on the Term Loan Notes

payable are as follows:

Schedule of principal payments due on term loan note

Schedule of principal payments due on term loan note payable

Fiscal Year Ending June 30:

1 unchanged sentence

LEASE OBLIGATIONS

In March 2021 the Company entered into a five-year capital lease in

the amount of $ 161,977 for manufacturing equipment.

In January 2020, the Company entered into a five-year capital lease for $ 47,750 for

manufacturing equipment.

The net book value of fixed assets under capital lease obligations as of September 30, 2024 is $ 51,776 .

In March 2021 the Company entered into a five-year

capital lease in the amount of $ 161,977 for manufacturing equipment.

In January 2020, the Company entered into a five-year capital lease

for $ 47,750 for manufacturing equipment.

The net book value of fixed assets under capital lease obligations as of December 31, 2024 is

On July 1, 2019, the Company entered into a three-year

1 unchanged sentence

Remaining minimum lease

payments at September 30, 2024 total $ 34,060 .

Total rent expense including base rent and common area expenses was $ 16,340 and $ 15,973

during the three months ended September 30, 2024 and 2023, respectively.

payments at December 31, 2024 total $ 22,927 .

Total rent expense including base rent and common area expenses was $ 33,281 and $ 36,288 during

the six months ended December 31, 2024 and 2023, respectively.

On October 4, 2021, the Company assumed the remaining

2 unchanged sentences

Remaining minimum lease payments

on September 30, 2024 total $ 112,187 .

Total rent expense including base rent and common area expenses was $ 34,432 during both the three

months ended September 30, 2024 and 2023.

Included in the accompanying balance sheet at September 30, 2024 is a right-of-use asset of

on December 31, 2024 total $ 79,019 .

Total rent expense including base rent and common area expenses was $ 68,864 during both the six months

ended December 31, 2024 and 2023.

Included in the accompanying balance sheet at December 31, 2024 is a right-of-use asset of $ 101,946

and current right-of-use operating lease liabilities of $ 101,946 .

At September 30, 2024 future minimum lease payments

At December 31, 2024 future minimum lease payments

under the capital lease and operating lease obligations are as follows:

10 unchanged sentences

Massachusetts, which are used for offices, production and storage spaces are leased primarily on a tenant-at-will basis.

Rent expense on

these operating leases was $ 51,797 and $ 48,799 for the three months ended September 30, 2024 and 2023, respectively.

on these operating leases was $ 102,540 and $ 97,581 for the six months ended December 31, 2024, and 2023, respectively.

STOCK-BASED COMPENSATION

1 unchanged sentence

The following table summarizes stock-based compensation

expense for the three months ended September 30, 2024 and 2023.

The share amounts and prices shown below reflect adjustment for a 1-for-3

reverse stock split that took effect after the close of business on November 1, 2022.

Schedule of stock-based compensation

Ended September 30,

expense for the three months and six months ended December 31, 2024 and 2023.

The following table summarizes stock-based compensation

expense for the three and six months ended December 31, 2024 and 2023:

Schedule of stock-based compensation expense

Ended December 31,

Cost of Goods Sold

4 unchanged sentences

The following tables summarize stock option activity

for the three months ended September 30, 2024:

for the six months ended December 31, 2024:

Schedule of stock option activity

6 unchanged sentences

Cancelled, forfeited, or expired

Outstanding at September 30, 2024

Outstanding at December 31, 2024

The aggregate intrinsic value of the Company’s

in-the-money outstanding and exercisable options as of September 30, 2024 were $ 1,533,439 and $ 1,511,239 , respectively.

in-the-money outstanding and exercisable options as of December 31, 2024 were $ 1,021,031 and $ 1,011,831 , respectively.

REVENUE RECOGNITION

11 unchanged sentences

the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within the contract

and determine those that are performance obligations and assess whether each promised good or service is distinct based on the contract.

and determines those that are performance obligations and assess whether each promised good or service is distinct based on the contract.

The Company disaggregates revenues by product

and service types as it believes best depicts how the nature, amount, timing and uncertainty of revenues and cash flows are affected by

economic factors.

Revenues are comprised of the following for the three months ended September 30, 2024 and 2023:

and service types as it believes best depicts how the nature, amount, timing and uncertainty of revenues and cash flows are affected

by economic factors.

Revenues are comprised of the following for the three and six months ended December 31, 2024 and 2023:

Schedule of disaggregation of revenues

Ended September 30,

Ended December 31,

Engineering Design Services

1 unchanged sentence

Medical Device Products and Assemblies

Technology Rights

Total Revenues

42 unchanged sentences

These costs have been recorded in selling, general and administrative expenses.

As of September

As of December 31,

2024, there were no contract assets recorded in the Company’s Consolidated Balance Sheets.

6 unchanged sentences

Schedule of contract liabilities

Ended September 30,

Ended December 31,

Contract liabilities, beginning of period

3 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-Q

Item 1. Financial Statements