What changed in this filing

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Item 1. Business

2025-09-29 compared with 2024-09-30 · 172 added, 170 removed, 113 unchanged (75% of the section changed)

We have been a developer and manufacturer of advanced

optical instruments since 1982.

Our proprietary medical instrumentation line, unique custom design and manufacturing capabilities, and

expert engineering and development has generated traditional proprietary endoscopes and endocouplers as well as other custom imaging and

illumination products for our customers’ use in minimally invasive surgical procedures.

We design and manufacture 3D endoscopes

and very small Microprecision lenses, assemblies and complete medical devices to meet the surgical community’s continuing demand

for smaller, disposable, and more enhanced imaging systems for minimally invasive surgery.

We have been a developer and manufacturer of

advanced optical instruments since 1982, and we operate primarily in two key market segments:

medical devices and advanced defense/aerospace products.

Within our proprietary optical and imaging technology, our unique custom designs, expert manufacturing

capabilities, and advanced engineering and development capabilities have generated traditional endoscopes and endocouplers, digital

imaging endoscopes using CMOS sensor technology, some designed and manufactured for single-use, as well as other, more advanced,

custom imaging and illumination products for our customers’ use in minimally invasive surgical procedures.

We design and

manufacture ultra-high precision endoscopes and very small Microprecision lenses, assemblies and complete medical devices to meet

the surgical community’s continuing demand for smaller, disposable, and more enhanced imaging systems for minimally invasive

We also apply our unique technologies to applications in the Defense / Aerospace markets including applications

supporting satellite network communications.

To support these two critical market categories,

our business operations are conducted in four areas:

systems manufacturing, engineering and product development, Ross Optical components

and assemblies, and our micro-optics laboratory.

Our systems manufacturing operations assemble and manufacture components and systems

for both medical device and advanced aerospace customers who choose to outsource these services based on our ability to handle high complexity

components, specific optical technologies, micro-optical assemblies and other advanced manufacturing challenges.

Our engineering and product

development team assesses specific customer product needs, designs devices to solve those needs, and creates manufacturing processes that

enable higher volume production of these devices and assemblies that can then be executed by our manufacturing operations group.

Effective June 1, 2019, we acquired the operating

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of El Paso, Texas.

As Ross Optical Industries we also operate as a supplier of custom optical

components and assemblies for military and defense, medical and various other industrial applications.

All products sold by us under the

Ross Optical name include a custom or catalog optic, which is sourced through our extensive domestic and worldwide network of optical

fabrication suppliers.

Most systems make use of optical lenses, prisms, mirrors and windows and range from individual optical components

to complex mechano-optical assemblies.

Products often include thin film optical coatings applied using our in-house coating department.

This acquisition expanded our optics components and assemblies’ business.

As Ross Optical Industries we operate as a supplier of custom optical components and assemblies for military and defense, medical and

various other industrial applications.

All products sold by us under the Ross Optical name include a custom or catalog optic, which is

sourced through our extensive domestic and worldwide network of optical fabrication suppliers.

Most systems make use of optical lenses,

prisms, mirrors and windows and range from individual optical components to complex mechano-optical assemblies.

Products often include

thin film optical coatings applied using our in-house coating department.

Effective October 1, 2021, we acquired the operating

assets of Lighthouse Imaging, LLC of Windham, Maine.

Our Lighthouse Imaging division supplements our operations as a manufacturer of advanced

optical imaging systems and accessories and has provided further expertise in electrical engineering and development of end-to-end medical

visualization devices.

Product development competencies at Lighthouse Imaging include Systems, Optical, Mechanical, Electrical and Process

Development Engineering.

Our product development team has extensive experience developing visualization systems that are used in a variety

of clinical applications.

Lighthouse Imaging is an industry leader in chip-on-tip visualization systems.

During the fiscal year ended June 30, 2024, approximately

44% our business was from engineering services primarily relating to the design of medical device optical assemblies, 44% from the sale

of both internally manufactured and purchased optical components, and 12% from the manufacture of optical assemblies and sub-assemblies.

During the fiscal year ended June 30, 2023, approximately 32% our business was from engineering services primarily relating to the design

of medical device optical assemblies, 50% from the sale of both internally manufactured and purchased optical components, and 18% from

the manufacture of optical assemblies and sub-assemblies primarily for medical device instrument applications.

We generally expect revenue

increases over time as the engineering design phase is completed and products transition to the commercial phase, leveraging our unique

manufacturing capabilities.

Much of the technology we have developed for making smaller medical devices is also used in defense and aerospace

systems where smaller size and weight is crucial.

assets of Lighthouse Imaging, LLC of Windham, Maine,which expanded our electrical engineering capabilities in the development of end-to-end

medical visualization devices.

The acquisition represented a vertical integration of our established product development capabilities

with a team with extensive experience developing visualization systems that we believe provides our customers with single-source value-added

development services and product offerings.

The operations of Lighthouse Imaging have been integrated with other operations of the company,

which continue under the POC brand, so that the company now operates with single systems manufacturing and engineering departments, each

of which includes historical POC and Lighthouse Imaging resources.

During the fiscal year ended June 30, 2025,

approximately 43% of our business was from systems manufacturing, 26% was from engineering services primarily relating to the design of

medical device optical assemblies, 20% was from Ross Optical, and 11% from our micro-optics laboratory.

During the fiscal year ended June

30, 2024, approximately 45% of our business was from engineering services primarily relating to the design of medical device optical assemblies,

19% from systems manufacturing, 22% from Ross Optical, and 14% from our micro-optics laboratory.

We generally expect revenue to increase

over time as the engineering design phase of new product programs is completed and products transition to the commercial phase, leveraging

our unique manufacturing capabilities.

Much of the technology we have developed for making smaller medical devices is also used in defense

and aerospace systems where smaller size and weight is crucial.

We incorporated in Massachusetts in December 1982,

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Principal Products and Services

We have been manufacturing medical products such as

endoscopes and endocouplers since our formation in 1982.

We have been manufacturing medical products such

as endoscopes and endocouplers since our formation in 1982.

In 1985 we introduced a proprietary product line of endocouplers.

We also design

and manufacture custom optical medical devices to satisfy our customers’ specific requirements, incorporating various optical technologies,

servicing a variety of minimally invasive surgical and diagnostic procedures, using both reusable and single-use medical devices.

to medical devices, we also manufacture and sell components and assemblies specially designed for defense/aerospace and industrial uses.

The acquisition of the assets of Ross Optical Industries

in 2019 expanded our optics components and assemblies business.

All products supplied by Ross Optical include a custom or catalog optic,

sourced through Ross Opticals’ extensive domestic and worldwide network of optical fabrication suppliers.

Most systems make use

of optical lenses, prisms, mirrors, and windows and range from individual optical components to complex mechano-optical assemblies.

often include thin film optical coatings that are applied by the Ross Optical division’s in-house coating department.

The acquisition of the assets of Lighthouse Imaging

LLC in 2021 expanded our electrical engineering capabilities in the development of end-to-end medical visualization devices.

Product development

competencies acquired include systems, optical, mechanical, electrical and process development engineering.

The acquisition represented

a vertical integration of our established product development capabilities with a team with extensive experience developing visualization

systems that we believe provides our customers with single-source value-added development services and product offerings.

design and manufacture custom optical medical devices to satisfy our customers’ specific requirements, incorporating various optical

technologies, servicing a variety of minimally invasive surgical and diagnostic procedures, using both reusable and single-use medical

In addition to medical devices, we also manufacture and sell components and assemblies specially designed for defense/aerospace

and industrial uses.

Microprecision™ Lenses and Micro Medical

While the size of endoscopes has gradually decreased over time, we believe the widespread use of very small endoscopes, with

diameters of one millimeter or smaller, has been limited due in part to the limitations of traditional lens fabrication methods to combine

smaller sizes with acceptable image quality at reasonable manufacturing costs.

We believe our Microprecision™ optics technology

provides a solution to this challenge.

diameters of a couple millimeters or smaller, has been limited due in part to the limitations of traditional lens fabrication methods

to combine smaller sizes with acceptable image quality at reasonable manufacturing costs.

We believe our Microprecision™ optics

technology provides a solution to this challenge.

Combined with recent advances by our supply chain partners in complementary metal-oxide-semiconductor,

or CMOS, image sensor fabrication techniques, our Microprecision™ lenses and proprietary manufacturing techniques enable the manufacture

of micro medical cameras at previously unobtainable prices with sizes on the order of one millimeter or less, characteristics that make

them perfectly suited for medical applications.

We believe the technology developed to support the design, fabrication and manufacturing

of Microprecision™ lenses and associated assemblies can also be used to satisfy the needs of defense and aerospace systems that

require small size and weight.

We are currently engaged in development projects to

design and produce even smaller CMOS based camera modules together with customized illumination using various technologies to match the

needs of the medical device endoscopes.

We have now completed and are currently designing, disposable versions of our camera modules and

assemblies designed for single use, reducing the risk of contamination from repeated use.

We believe these on-going improvements are significant

to the continued evolution and acceptance of our Microprecision™ technology platform.

3D Endoscopes:

Our 3D endoscopes provide next

generation optical imaging for minimally invasive surgical procedures that utilize hand-held rigid endoscopes by using the brain’s

natural ability to perceive depth, which is the third dimension, by viewing one’s environment through two eyes.

Utilizing our proprietary

technology to provide independent images to right and left eyes, surgeons can view the operative field with 3D perception.

or CMOS, image sensor fabrication techniques, our Microprecision™ lens technology and proprietary design and manufacturing techniques

enable the manufacture of micro medical cameras and digital endoscopes at previously unobtainable prices, with sizes on the order of a

couple millimeters or less and image quality superior to most previously available endoscopes, characteristics that make them perfectly

suited for medical imaging applications, particularly single-use or disposable endoscopes.

We believe the technology developed to support

the design, fabrication and manufacturing of Microprecision™ lenses and associated assemblies can also be used to satisfy the needs

of defense and aerospace systems that require small size and weight, particularly those required for satellite network communications.

The Unity Platform .

In January 2025, we

launched our Unity Imaging Platform (“Unity”), comprising a standard baseline CMOS endoscopic system with customization

options based on existing or newly designed modular sub-components.

Unity represents the culmination of many years of research, development,

and collaboration with key industry players.

By leveraging insights from many previous projects, Unity incorporates proven design architectures

to meet the unique needs of today’s medical imaging devices.

Customers benefit from a modular, adaptable solution that simplifies

every stage of the development process, from prototyping to production using the latest technologies.

The consolidation of common design

elements offers flexible, modular architecture, appropriate for both re-usable and single-use endoscopic systems.

Unity provides customers

with a functional video pipeline early in the development process.

This accelerates their system integration efforts and allows them

to gather feedback from stakeholders much sooner, ultimately shortening the time to market and enhancing overall project efficiency.

Unity is the embodiment of our on-going improvements to the evolution and acceptance of our Microprecision™ and digital imaging

technology platforms.

Competition and Markets

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resources than we have, may seek to produce products or services that compete directly with ours.

While our resources are more limited than those of

some of our competitors, we believe that we compete successfully in this market through product quality, price, delivery and innovation

While our resources are more limited than those

of some of our competitors, we believe that we compete successfully in this market through product quality, price, delivery and innovation

tailored to our customers’ specifications.

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To this end, we intend to continue to aggressively

support and augment our internal engineering, research and development resources and to aggressively pursue patent protection for existing

and new technology.

We believe that our unique technical capabilities in the areas of Microprecision™ optics, micro medical cameras

and illumination, as well as 3D endoscopes, currently represent competitive advantages for us in the minimally invasive surgical device

The competitive advantage of our Ross Optical division

is its ability to provide difficult-to-find optics, and, increasingly, to provide a broader range of services based on its ability to

source optics worldwide, augmented by its ability to provide thin-film coatings and assembly.

support and augment our internal engineering, research and development resources and to pursue patent protection for existing and new

We believe that our unique technical capabilities in the areas of Microprecision™ optics, micro medical cameras, digital

imaging, and illumination represent competitive advantages for us in the minimally invasive surgical device market.

The competitive advantage of our Ross Optical

division is its ability to quickly provide design-for-manufacturability feedback and to provide difficult-to-find optics, and, increasingly,

to provide a broader range of services based on its ability to source optics worldwide, augmented by its ability to provide thin-film

coatings and assembly.

Market Opportunities

Microprecision™ Lenses and Micro Medical

We design custom camera module assemblies with the combined objectives of low cost, small size, range of optical specifications

and high image quality required by our customer’s precise medical device specifications.

By enabling the production of millimeter

sized and smaller cameras with low manufacturing costs, we believe our Microprecision™ technology opens the possibility to replace

existing re-sterilizable endoscopes with a single-use alternative.

The small size of our Microprecision™ lenses and micro medical

cameras combined with our proprietary illumination techniques can provide visualization for existing procedures that are currently performed

blind or with sub-optimal imaging, and we believe can facilitate the development of new surgical procedures that are currently impractical

without sub-millimeter visualization instrumentation.

3D Endoscopes and Robotic Surgery Systems :

3D endoscopes have been used for many years as part of robotic surgery systems partly because the market price of robotic surgery systems

is high enough to support the cost of a high-quality custom 3D display.

Competition amongst medical device companies in 3D robotic surgery

systems has increased.

Various companies are now pursuing less expensive, procedure specific robotic systems.

We believe our experience

and expertise in 3D endoscopes for medical applications will benefit companies in this area.

We design custom camera module assemblies with

the combined objectives of low cost, small size, range of optical specifications and high image quality required by our customer’s

precise medical device specifications.

By enabling the production of millimeter sized cameras with low manufacturing costs and high image

quality, we believe our Microprecision™ and digital imaging technologies open the possibility to replace existing re-sterilizable

endoscopes with single-use alternatives.

The small size of our Microprecision™ lenses and micro medical cameras combined with our

proprietary illumination techniques can provide visualization for existing procedures that are currently performed blind or with sub-optimal

imaging, and we believe can facilitate the development of new surgical procedures that are currently impractical without millimeter-sized

visualization instrumentation.

Sales and Marketing

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device projects requiring surgery-grade visualization, as well as defense, aerospace and other industrial applications, from sub-millimeter

sized devices and 3D endoscopy, including single-use products and assemblies.

We market directly to established medical device companies

primarily in the United States that we believe could benefit from our advanced endoscopy visualization systems.

Through this direct marketing,

referrals, attendance at trade shows and a presence in online professional association websites, we have expanded our on-going pipeline

of projects to established medical device companies as well as to emerging medical device companies, and to a growing number of major

defense / aerospace companies.

We expect our revenues and customer base to continue to expand as development projects transition to production

orders and new customer projects enter the development phase.

sized devices and Ultra HD Precision systems, including single-use products and assemblies.

We market directly to established medical

device companies primarily in the United States that we believe could benefit from our advanced endoscopy visualization systems.

direct marketing, referrals, attendance at trade shows and an online presence with our corporate websites as well as professional association

websites, we continually seek to expand our on-going pipeline of projects to established medical device companies as well as to emerging

medical device companies, and to a growing number of major defense / aerospace companies.

Due to our expertise and growing OEM trends

of outsourcing complex projects, we expect our revenues and customer base to continue to expand as development projects transition to

production orders and new customer projects enter the development phase.

International Business

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basis in the medical products area particularly and to our profitability generally.

We have an expanded network of overseas suppliers

of various types and sizes of optical components and assemblies that enhance our ability to meet the material demands of our customers’

unique optical and medical device designs.

We have an expanded network of domestic and overseas

suppliers of various types and sizes of optical components and assemblies that enhance our ability to meet the material demands of our

customers’ unique optical and medical device designs.

Research and Development

We believe that our future success depends, to a large

degree, on our ability to continue to conceive and develop new optical products and technologies to enhance the performance characteristics

We believe that our future success depends, to

a large degree, on our ability to continue to conceive and develop new optical products and technologies to enhance the performance characteristics

and methods of manufacture of existing and new products.

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contracts and customer purchase orders, research and development expenses are incurred on our own proprietary products and technology,

such as Microprecision™ optics, micro medical cameras and 3D endoscopes.

Accordingly, we treat engineering expenses not consumed

in customer contracted development and our investment of funds and resources in internal product and intellectual property development

as research and development expense in the accompanying statement of operations.

such as Microprecision™ optics and the Unity platform.

Accordingly, we treat engineering expenses not consumed in customer contracted

development and our investment of funds and resources in internal product and intellectual property development as research and development

expense in the accompanying statement of operations.

Raw Materials and Principal Suppliers

A key raw material component for our products is precision

grade optical glass, which we obtain from a few suppliers, principally SCHOTT North America, Inc.

A key raw material component for our products

is precision-grade optical glass, which we obtain from a few suppliers, principally SCHOTT North America, Inc.

and Ohara Corporation.

obtain CMOS sensors used in the development of endoscope products for our customers from various suppliers such as OmniVision Technologies,

We believe that while the number of sources of supply is limited for the CMOS sensors with the specifications used in medical device

endoscopes we develop;

the manufacturing capacities of those suppliers is adequate to meet our demand in the next twelve months.

obtain CMOS sensors used in the development and manufacture of endoscope products for our customers from various suppliers such as OmniVision

Technologies, Inc.

We believe that while the number of sources of supply is limited for the precision-grade optical glass and CMOS sensors

with the specifications used in the products we produce, the manufacturing capacities of those suppliers are adequate to meet our demand

in the next twelve months.

Patents and Trademarks

We rely, in part, upon patents, trade secrets and

proprietary knowledge as well as personnel policies and employee confidentiality agreements concerning inventions and other creative efforts

to develop and maintain our competitive position.

We plan to file for patents, copyrights and trademarks in the United States and in other

appropriate countries to protect our intellectual property rights to the greatest extent practicable.

We currently hold rights to various

United States patents, and have patent applications pending, including applications for our new generation of micro medical cameras.

current patent portfolio includes patents, rights to patents and patent applications that cover various aspects of our technology in the

following areas:

We rely, in part, upon patents, trade secrets

and proprietary knowledge as well as personnel policies and employee confidentiality agreements concerning inventions and other creative

efforts to develop and maintain our competitive position.

We plan to file for patents, copyrights and trademarks in the United States

and in other appropriate countries to protect our intellectual property rights to the greatest extent practicable.

We currently hold rights

to various United States patents, and have patent applications pending, including applications for our new generation of micro medical

Our current patent portfolio includes patents, rights to patents and patent applications that cover various aspects of our technology

in the following areas:

Medical devices;

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Microprecision™ lenses and micro medical cameras;

Defense products.

Defense/aerospace products.

The patents contained in our current patent portfolio

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We intend to continue to innovate and

extend our technological capabilities in the areas of 3-D endoscopy Microprecision™ optics, micro medical cameras, and related illumination

techniques, and to aggressively pursue patent protection for such developments.

As of June 30, 2024, we had 84 employees, 83 of which

were full-time employees.

There were 41 employees in manufacturing, 22 in engineering/research and development, 9 in sales and marketing,

and 12 in finance and administration.

extend our technological capabilities in the areas of Microprecision™ optics, digital imaging, micro medical cameras, related illumination

techniques, and associated design and manufacturing technology and to aggressively pursue patent protection for such developments.

As of June 30, 2025, we had 90 employees, all

of which were full-time employees.

There were 51 employees in manufacturing, 18 in engineering/research and development, 8 in sales and

marketing, and 13 in finance and administration.

We are not a party to any collective bargaining agreements.

We believe our relations with our employees

are very good.

During the fiscal year ended June 30, 2024, we sold

product and services to 325 customers with one product development customer accounting for 19.1% of total revenues and with one optical

components customer accounting for 13.8% of our total revenues.

We believe our relations

with our employees are very good.

During the fiscal year ending June 30, 2025, we

sold products and services to 278 customers with one customer accounting for approximately 22% of total revenues and another customer

accounting for 20% of our total revenues.

The loss of these customers would have a material impact on our business.

For the fiscal year ended June 30, 2023, we sold products and services to 361 customers and one customer accounted for 11.4% of our total

revenues for that year.

For the fiscal year

ended June 30, 2024, we sold products and services to 325 customers with one product development customer accounting for approximately

19% of total revenues and another customer accounting for approximately 14% of our total revenues for that year.

Two customer accounts receivable balances accounted

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of hazardous materials in our operations, and as such, compliance does not entail significant expense to us.

We do not believe the costs

associated with our compliance with environmental laws are material.

Government Regulations

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suspension of production, or the imposition of various other penalties.

We previously notified the FDA of our intent to market

our endoscopes, image couplers, beamsplitters, adapters and video ophthalmoscopes, and the FDA has determined that we may market such

devices, subject to the general control provisions of the Food, Drug and Cosmetic Act.

We obtained this FDA permission without the need

to undergo a lengthy and expensive approval process due to the FDA’s determination that such devices met the regulatory standard

We previously notified the FDA of our intent to

market our endoscopes, image couplers, beamsplitters, adapters and video ophthalmoscopes, and the FDA has determined that we may market

such devices, subject to the general control provisions of the Food, Drug and Cosmetic Act.

We obtained this FDA permission without the

need to undergo a lengthy and expensive approval process due to the FDA’s determination that such devices met the regulatory standard

of being substantially equivalent to existing FDA-approved devices.

In the future, we plan to market additional medical

In the future, we may market additional medical

devices that may require the FDA’s permission to market such products.

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Conformity with ISO 13485 conveys our commitment to maintaining a robust QMS specifically

for medical device manufacturing, and consistent quality and regulatory compliance, which is essential helping our customers achieve compliance

with the EU MDR and other international regulatory standards.

Our failure to comply with ISO 13485 or other applicable regulatory requirements

would jeopardize our ability to sell our products to certain customers who place their product on the EU and other international markets.

for medical device manufacturing, and consistent quality and regulatory compliance, which is essential to helping our customers achieve

compliance with the EU MDR and other international regulatory standards.

Our failure to comply with ISO 13485 or other applicable regulatory

requirements would jeopardize our ability to sell our products to certain customers who place their product on the EU and other international

Available Information

Our website is www.poci.com.

We make available on

our website, free of charge, copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K

and amendments to those reports, as soon as reasonably practicable after we electronically file or furnish such materials to the U.S.

We make available

on our website, free of charge, copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on

Form 8-K and amendments to those reports, as soon as reasonably practicable after we electronically file or furnish such materials

Securities and Exchange Commission (SEC).

Our website and the information contained therein or connected thereto are not intended to be

incorporated into this report.

The SEC maintains an Internet site that contains reports,

proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov.

Our website and the information contained therein or connected thereto are not intended

to be incorporated into this report.

The SEC maintains an Internet site that contains

reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov.

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

What changed 10-K

Item 1. Business