Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☐ NO No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES ☐ NO No ☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YESYes ☒    NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer”, “accelerated filer”, “non-accelerated filer,”  “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 in the Exchange Act). YES ☐ NO ☒.

As of September 9, 2019,2022, the number of shares of the registrant’s Class A Common Stock outstanding was 25,827,265.

InNovember 2005,we formedLightPath Optical Instrumentation (Shanghai) Co., Ltd (“LPOI”), a wholly-owned subsidiary, located in Jiading, People’s Republic of China.  The LPOI facility (the “Shanghai Facility”) is primarily used for sales and support functions.

As part of our product development and research and development efforts, we have over 50 employees with engineering and related advanced degrees located in our facilities in the United States, China and Latvia.  Our facilities in Orlando, Florida and Zhenjiang, China are located in or near industrial technology campuses with substantial access to optical industry constituencies, including a major product capabilities: molded optics, thermal imaging opticsuniversity.  This enables us and custom designed optics. Product management is principally a portfolio management process that analyzes products withinour staff to remain on the product capability areas as defined above. This function will facilitate choosing investment prioritiescutting edge of industry design trends and ensuring successful product life cycle management. We have also defined, but not filled, the position of Senior Vice President, Strategic Business Assessment. This person will be responsible to strategically align LighPath’s competencies with strategic industry revenue opportunities, and will manage the product management function.

There is a product manager for each of our marketing efforts by our capabilities (i.e.,major product capabilities: molded optics, thermal imaging optics and custom optics), and then by industry. We currently servedesigned optics.  Product management is principally a portfolio management process that analyzes products within the following major markets: defense and security, optical systems and components, datacom/telecom, information technology,product capability areas as defined above.  This function facilitates choosing investment priorities to help strategically align our competencies with strategic industry revenue opportunities.  Over the long term, this function will also help ensure successful product life sciences, machine vision and production technology. Customers in each of these markets may select the best optical technologies that suit their needs from our entire suite of products, availing us to cross-selling opportunities, particularly where we can leverage our knowledge base against our expanding design library. Within our product groups, we have various applications that serve our major markets. For example, our infrared products can be used for gas sensing devices, spectrometers, night vision systems, advanced driver-assistance systems (“ADAS”), thermal weapon gun sights, and infrared counter measure systems, among others.

PMO Product Group.Aspheric lenses are known for their optimal performance.  Aspheric lenses simplify and shrink optical systems by replacing several conventional lenses.  However, aspheric lenses can be difficult and costly to machine.  Our glass molding technology enables the production of both low and high volumes of aspheric optics, while still maintaining the highest quality at an affordable price.  Molding is the most consistent and economical way to produce aspheres and we have perfected this method to offer the most precise molded aspheric lenses available.

Infrared Product Group.Group. Our infrared product group is comprised of both molded and turned infrared lenses and assemblies using a variety of infrared glass materials.  Advances in chalcogenide materials have enabled compression molding for MWIRmid-wave (“MWIR”), and LWIRlong-wave (“LWIR”), optics in a process similar to precision molded lenses. Our molded infrared optics technology enables high performance, cost-effective infrared aspheric lenses that do not rely on traditional diamond turning or lengthy polishing methods. Utilizing precision molded aspheric optics significantly reduces the number of lenses required for typical thermal imaging systems and the cost to manufacture these lenses. Molding is an excellent alternative to traditional lens processing methods particularly where volume and repeatability is required.

Specialty Product Group.Group.We haveoffer a growing group of custom specialty optics products and assemblies that take advantage of our unique technologies and capabilities. These products include custom optical designs, mounted lenses, optical assemblies, and collimator assemblies.  Collimator assemblies are utilized in applications involving light detection and ranging (“LIDAR”) technology for advanced driver assistance systems and autonomous vehicles, such as forklifts and other automated warehouse equipment.  This continues to be an emerging market with long-term growth potential for us.  We also expect growth from defense communicationsmedical programs and commercial optical sub-assemblies.

Marketing.  Extensive product diversity and varying levels of product maturity characterize the optics industry.  Product marketsverticals range from consumer (e.g., AR/VR, cameras, cell phones, gaming, and copiers) to industrial (e.g., lasers, data storage, and infrared imaging), from products where the lenses are the central feature (e.g., telescopes, microscopes, and lens systems) to products incorporating lens components (e.g., 3D printing, machine vision, LIDAR, robotics and semiconductor production equipment) and communications (e.g., various optics are required for bandwidth expansionfiber and improved data transfer for the optical network)laser based). As a result, we market our products across a wide variety of customer groups, including laser systems manufacturers, laser OEMs,OEM’s, infrared-imaging systems vendors, automotive OEMs, industrial laser tool manufacturers, telecommunications equipment manufacturers, medical instrumentation manufacturers and industrial measurement equipment manufacturers, government defense agencies, and research institutions worldwide.

Sales Model.Model & Structure.To align the organization to better serve our new solution strategy and for specific goalsaccountability of our key corporate objectives, we have made organizational changes designed to ensure customer satisfaction and accountability, we created the position of Chief Operating Officer with the responsibility for all operations, engineering, and sales and marketing. Thisoperational efficiency.  Our organizational structure includes a product management function that enables the close coordination of supply with demand.demand to help us leverage our core offerings and coordinate our engineering development efforts that will leverage and expand our portfolio of capabilities.  We have also createdtransitioned from a business unit focus to a unified global direct sales team that promotes the overall company portfolio and is standardized on a problem solving, needs analysis process.  The team recently went through Sandler Training to help with this shift and to empower action with improved communication techniques.  We have added technical program managers and product life cycle management function(“PLCM”) to managebetter support the portfolio of productsnew customized customer programs and define the best growth opportunities for LightPath. Our Sales and Marketing organization will be led by the Vice President of Global Sales and Marketing.

Sales Team & Channel. We have aligned our sales engineering efforts to be account based and application focused. We have taken a more proactive approach to our direct selling efforts to increase our customer engagement, especially within Europe, where we recently transitioned away from working exclusively through a distributor.  We have expanded our inside sales and application engineering organization to better support our regional sales forces that market and sell our products directly to customers in North America, Europe and China. We also have a master distributor in Europe. We have formalized relationships with 15 industrial, laser, and optoelectronics distributors and channel partners located in the United States (“U.S.”) and various foreign countries to assist in the distribution of our products in highly specific target markets. We also have reseller arrangementsstandard product offerings with the top three producttwo catalog companies in the world for optics and opto-electronics market.photonics which increases our exposure to new revenue opportunities.  In addition, we also maintaincontinue to enhance our own product catalog and internet websites (www.lightpath.comandwww.ispoptics.com) as vehicleswebsite (www.lightpath.com), which is our main communication vehicle for broader promotion of our products.company, our value-add capabilities, our growing chalcogenide material portfolio, and similarly have optimized our social media assets.  We make use of digital and print media advertisements in various trade magazines andplus participate in appropriate domesticmany key industry associations and foreignglobal trade shows.

Our key differentiator is our products.

PMO Product Group. Group.Our PMO products compete with conventional lenses and optical components manufactured byfrom companies such as Asia Optical Co., Inc., Anteryon BV, Rochester Precision Optics, and Sunny Optical Technology (Group) Company Limited.  Aspheric lens system manufacturers include Panasonic Corporation, Alps Electric Co., Ltd., Hoya Corporation, as well as newerother competitors from China and Taiwan, such as E-Pin Optical Industry Co., Ltd., and Kinik Company.

We believe our low cost, high volume lens businessthat the market shift towards the use of synthetic materials in infrared products represents a significant opportunity for us, and we continue to invest in further pushing the limits of both molding of infrared components, as well as the glass manufacturing technology combined with our recently added traditional polishing and diamond turning capabilities enables us to compete withproducts.  We believe this process will create significant differentiators and value in this industry segment, and will further change the other manufacturersdynamics of traditional infrared lens by offering the best technology fit at a competitive price.

Facilities. Our manufacturing is largely performed in our combined 38,00062,000 square feet of production facilities in Orlando, Florida, (the “Orlando Facility”), in LPOIZ’s combined 55,000 square feet of production facilities in Zhenjiang, China, and in ISP Latvia’s 23,00029,000 square feet of production facilities in Riga, Latvia.  LPOI sales and support functions occupy a 1,900 square foot facility in Shanghai. ISP previously had an approximately 13,000 square foot facility in Irvington, New York that functioned as its operations headquarters, providing manufacturing capabilities, optical coatings, optical and mechanical design, assembly and testing, as well as some engineering, administrative and sales functions. During fiscal 2019, we added manufacturing space near our existing Orlando Facility, and relocated the manufacturing operations of ISP’s Irvington Facility to our existing Orlando Facility and Riga Facility, which is expected to result in substantial cost savings. Some of the manufacturing operations previously performed in the Irvington Facility were transitioned to our Zhenjiang Facility.

LPOIZ’s Zhenjiang Facility features a precision glass molding manufacturing area, clean room, machine shop, dicing area, and thin film coating chambers for anti-reflective coatings on both visible and infrared optics and related metrology equipment.

For more information regarding our facilities, please seeItem 2. Propertiesin this Annual Report on Form 10-K.

Subcontractors and Strategic Alliances.  Alliances.We believe that low-cost manufacturing is crucial to our long-term success.  In that regard, we generally use subcontractors in our production process to accomplish certain processing steps requiring specialized capabilities.  For example, we presently use a number of qualified subcontractors for fabricating, polishing, and coating certain lenses, as necessary.  We have taken steps to protect our proprietary methods of repeatable high-quality manufacturing by patent disclosures and internal trade secret controls.

Suppliers.We utilize a number of glass compositions in manufacturing our molded glass aspheres and lens array products.  These glasses or equivalents are available from a large number of suppliers, including CDGM Glass Company Ltd., Ohara Corporation, and Sumita Optical Glass, Inc.  Base optical materials, used in both infrared glass and collimator products, are manufactured and supplied by a number of optical and glass manufacturers. ISP utilizes major infrared material suppliers located around the globe for a broad spectrum of infrared crystal and glass.  The development of our manufacturing capability for BD6 glass provides a low-cost internal source for infrared glass.  We believe that a satisfactory supply of such production materials will continue to be available, at reasonable or, in some cases, increased prices, although there can be no assurance in this regard.

The following is a discussion of the primary factors that may affect the operations and/or financial performance of our business.  Refer to the section entitled Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report on Form 10-K for an additional discussion of these and other related factors that affect our operations and/or financial performance.

Our business, results of operations, financial condition, cash flows, and the stock price of our Class A common stock can be adversely affected by pandemics, epidemics, or other public health emergencies, such as the recent outbreak of COVID-19.  Our business, results of operations financial condition, cash flows, and the stock price of our Class A common stock can be adversely affected by pandemics, epidemics, or other public health emergencies, such as the recent global outbreak of COVID-19.  In March 2020, the World Health Organization (the “WHO”) declared COVID-19 as a pandemic.  The COVID-19 pandemic resulted in governments around the world implementing measures to help control the spread of the virus, including “stay at home” orders, travel restrictions, business curtailments, school closures, and other measures.  These restrictions significantly impacted economic conditions in the U.S. in 2020 and continued into 2021.  Beginning in the spring of 2021, we have seen some restrictions lift as vaccines have become more available.

We are considered an “essential business,” as a critical supplier to both the medical and defense industries.  To date, we have continued to operate our manufacturing facilities consistent with government guidelines and state and local orders; however, the outbreak of COVID-19 and any preventive or protective actions taken by governmental authorities may have a material adverse effect on our operations, supply chain, customers, and transportation networks, including business shutdown or disruptions.  The extent to which COVID-19 may adversely impact our business depends on future developments, which are highly uncertain and unpredictable, depends upon the severity and duration of the outbreak and the effectiveness of actions taken globally to contain or mitigate its effect.  Any resulting financial impact cannot be estimated reasonably at this time, but may materially adversely affect our business, results of operations, financial condition, and cash flows.  Even after the COVID-19 pandemic has subsided, we may experience materially adverse impacts to our business due to any resulting economic recession or depression.  Additionally, concerns over the economic impact of COVID-19 have caused extreme volatility in financial and other capital markets, which has and may continue to adversely impact our stock price and our ability to access capital markets.  To the extent the COVID-19 pandemic may adversely affect our business and financial results, it may also have the effect of heightening many of the other risks described in this Annual Report on Form 10-K.

We have a history of losses.We reported net losses of $3.5 million and $3.2 million for fiscal years 2022 and 2021, respectively, and although we reported net income of $0.9 million for fiscal year 2020, we incurred a net loss of $2.7 million for fiscal 2019 and although we reported net income of $1.1 million and $7.7 million for fiscal 2018 and 2017, respectively, we have a history of losses prior to fiscal 2016.year 2019.  As of June 30, 2019,2022, we had an accumulated deficit of approximately $197.9$203.8 million.  We may incur losses in the future if we do not achieve sufficient revenue to return tomaintain profitability, or if we continue to incur unusual costs.  We expect revenue to grow by generating additional sales through promotion of our infrared products, with a focus on engineered solutions, and continued cost reduction efforts for our precision molded products, and we expect to achieve significant cost savings as a result of closing the Irvington Facility,across all product groups, but we cannot guarantee such improvement or growth.

We are dependent on a few key customers, and the loss of any key customer could cause a significant decline in our revenues. In fiscal 2019, year 2022, we had sales to three customers that comprised an aggregate of approximately 32%35% of our annual revenue, with one customer at 17%19% of our sales, another customer at 8%9% of our sales, and the third customer at 7% of our sales.  In fiscal 2018, year 2021, we had sales to three customers that comprised an aggregate of approximately 28%38% of our annual revenue, with one customer at 16%18% of our sales, another customer at 7%10% of our sales, and the third customer at 5%10% of our sales.  In bothThe third customer lost a significant bid in 2021 which adversely affected our sales in fiscal 2019 and 2018, these top three customers include a distributor, which actually represents sales to numerous customers.year 2022.  Our current strategy isof providing the domain expertise and the extensive “know how” in optical design, fabrication, production and testing technologies will allow our customers to leveragefocus on their own development efforts, without needing to develop subject matter expertise in optics.  By providing the bridge into the optical solution world, we partner with our broader portfolio of productscustomers on a long term basis, create value to expand our customer base usingcustomers, and capture that value through the capabilities gained as a result oflong-term supply relationships we develop. However the ISP acquisition. However, we continue to diversify our business in order to minimize our sales concentration risk. The loss of any of these customers, or a significant reduction in sales to any such customer, would adversely affect our revenues.

We may be affected by political and other risks as a result of our sales to international customers and/or our sourcing of materials from international suppliers.In fiscal 2019, 62%year 2022, 61% of our net revenue was derived from sales outside of the U.S., with 94%95% of our foreign sales derived from customers in Europe and Asia.  In fiscal 2018, 58%year 2021, 68% of our net revenue was derived from sales outside of the U.S., with 84%95% of our foreign sales derived from customers in Europe and Asia.  Our international sales will be limited, and may even decline, if we cannot establish relationships with new international distributors, maintain relationships with our existing international distributions, maintain and expand our foreign operations, expand international sales, and develop relationships with international service providers.  Additionally, our international sales may be adversely affected if international economies weaken.  We are subject to the following risks, among others:

As a U.S. corporation with international operations, we are subject to the U.S. Foreign Corrupt Practices Act and other similar foreign anti-corruption laws, as well as other laws governing our operations.  If we fail to comply with these laws, we could be subject to civil or criminal penalties, other remedial measures, and legal expenses, which could adversely affect our business, financial condition, and results of operations.Our operations are subject to anti-corruption laws, including the U.S. Foreign Corrupt Practices Act (“FCPA”), and other foreign anti-corruption laws that apply in countries where we do business.  The FCPA and these other laws generally prohibit us and our employees and intermediaries from offering, promising, authorizing or making payments to government officials or other persons to obtain or retain business or gain some other business advantage.  In addition, we cannot predict the nature, scope, or effect of future regulatory requirements to which our international operations might be subject or the manner in which existing laws might be administered or interpreted.  Operations outside of the U.S. may be affected by changes in trade production laws, policies, and measures, and other regulatory requirements affecting trade and investment.

International tariffs, including tariffs applied to goods traded between the U.S. and China, could materially and adversely affect our business and results of operations.  TheIn recent years, the U.S. government has made statements and takentook certain actions that have led to, and may lead to, further changes to U.S. and international trade policies, including recently imposedthe imposition of tariffs affecting certain products exported by a number of U.S. trading partners, including China.  The institution of trade tariffs both globally and between the U.S. and China specifically carries the risk of negatively impacting China’s overall economic condition, which could have negative repercussions for us.  Furthermore, imposition of tariffs could cause a decrease in the sales of our products to customers located in China or other customers selling to Chinese end users, which would directly impact our business.

Our future growth is partially dependent on our market penetration efforts.Our future growth is partially dependent on our market penetration efforts, which include diversifying our sales and offering to high-volume, low-costprovide complete optical applicationssolutions such as assemblies to existing and other new market and product opportunities in multiple industries.markets.  While we believe our existing productswe are commercially viable,able to provide such engineered solutions, we anticipate the need to educategain the customer’s trust in providing more than the optical components markets in order to generate market demand and market feedback may require us to further refine these products.component, a process that can sometimes take months, if not years.  Expansion of our product lines and sales into new markets will require significant investment in equipment, facilities, and materials.  There can be no assurance that any proposed products will be successfully developed, demonstrate desirable optical performance, be capable of being produced in commercial quantities at reasonable costs, or be successfully marketed.

We rely, in large part, on key business and sales relationships for the successful commercialization of our products, which, if not developed or maintained, will have an adverse impact on achieving market awareness and acceptance and will result in a loss of business opportunities.To achieve wide market awareness and acceptance of our products and technologies, as part of our business strategy, we will attempt to enter into a variety of business relationships with other companies that will incorporate our technologies into their products and/or market products based on our technologies.  The successful commercialization of our products and technologies will depend in part on our ability to meet obligations under contracts with respect to the products and related development requirements.  The failure of these business relationships will limit the commercialization of our products and technologies, which will have an adverse impact on our business development and our ability to generate revenues.

If we do not expand our sales and marketing organization, our revenues may not increase.  The sale of our products requires prolonged sales and marketing efforts targeted at several key departments within our prospective customers’ organizations and often involves our executives, personnel, and specialized systems and applications engineers working together.  Currently, our direct sales and marketing organization is somewhat limited.  We believe we will need to continue to strengthen our sales and marketing organization in order to increase market awareness and sales of our products.  There is significant competition for qualified personnel, and we might not be able to hire the kind and number of sales and marketing personnel and applications engineers we need.  If we are unable to continue to expand our sales operations particularly in China,globally, we may not be able to continue to increase market awareness or sales of our products, which would adversely affect our revenues, results of operations, and financial condition.

If we are unable to develop and successfully introduce new and enhanced products that meet the needs of our customers, our business may not be successful.  Our future success depends, in part, on our ability to anticipate our customers’ needs and develop products that address those needs.  Introduction of new products and product enhancements will require that we effectively transfer production processes from research and development to manufacturing, and coordinate our efforts with the efforts of our suppliers to rapidly achieve efficient volume production.  If we fail to effectively transfer production processes, develop product enhancements, or introduce new products that meet the needs of our customers as scheduled, our net revenues may decline, which would adversely affect our results of operations and financial condition.

If we are unable to effectively compete, our business and operating results could be negatively affected.  We face substantial competition in the optical markets in which we operate.  Many of our competitors are large public and private companies that have longer operating histories and significantly greater financial, technical, marketing, and other resources than we have.  As a result, these competitors are able to devote greater resources than we can to the development, promotion, sale, and support of their products.  In addition, the market capitalization and cash reserves of several of our competitors are much larger than ours, and, as a result, these competitors are better positioned than we are to exploit markets, develop new technologies, and acquire other companies in order to gain new technologies or products.  We also compete with manufacturers of conventional spherical lens products and aspherical lens products, producers of optical quality glass, and other developers of gradient lens technology, as well as telecommunications product manufacturers. In both the optical lens and communications markets, we are competing against, among others, established international companies, especially in Asia.  Many of these companies also are primary customers for optical and communication components, and, therefore, have significant control over certain markets for our products.  There can be no assurance that existing or new competitors will not develop technologies that are superior to or more commercially acceptable than our existing and planned technologies and products or that competition in our industry will not lead to reduced prices for our products.  If we are unable to successfully compete with existing companies and new entrants to the markets we compete in, our business, results of operations, and financial condition could be adversely affected.

We anticipate further reductions in the average selling prices of some of our products over time, and, therefore, must increase our sales volumes, reduce our costs, and/or introduce higher margin products to reach and maintain consistent profitable results.  We have experienced decreases in the average selling prices of some of our products over the last ten years, including most of our passive component products.  We anticipate that as certain products in the optical component and module market become more commodity-like, the average selling prices of our products will decrease in response to competitive pricing pressures, new product introductions by us or our competitors, or other factors.  We attempt to offset anticipated decreases in our average selling prices by increasing our sales volumes and/or changing our product mix.  If we are unable to offset anticipated future decreases in our average selling prices by increasing our sales volumes or changing our product mix, our net revenues and gross margins will decline, increasing the projected cash needed to fund operations.  To address these pricing pressures, we must develop and introduce new products and product enhancements that will generate higher margins, continue to reduce costs, and/or change our product mix in order to generate higher margins.  If we cannot maintain or improve our gross margins, our financial position, and results of operations may be harmed. 

Because of our limited product offerings, our ability to generate additional revenues may be limited without additional growth.  We organized our business based on three product groups: PMOs, infrared products, and specialty products.  In fiscal 2019,year 2022, sales of PMO products represented approximately 42% of our net revenues, sales of infrared products represented approximately 51%53% of our net revenues, and sales of specialty products represented 5% of our revenues.  In the future, we expect a larger percentage ofgrowth in both our revenues to be generated from sales of ourPMO and infrared products.product groups.  Continued and expanding market acceptance of these products, particularly our BD6-based infrared products, is critical to our future success.  There can be no assurance that our current or new products will achieve market acceptance at the rate at which we expect, or at all, which could adversely affect our results of operations and financial condition.

We may need additional capital to sustain our operations in the future, and may need to seek further financing, which we may not be able to obtain on acceptable terms or at all, which could affect our ability to implement our business strategies.  We have limited capital resources.  Our operations have historically been largely funded from the proceeds of equity financings with some level of debt financing as well as cash flow from operations.  In recent years we have generated sufficient capital to fund our operations and necessary investments.  Accordingly, in future years, we anticipate only requiring additional capital to support acquisitions that would further expand our business and product lines.  We may not be able to obtain additional financing when we need it on terms acceptable to us, or at all.

Litigation may adversely affect our business, financial condition, and results of operations.  From time to time in the normal course of business operations, we may become subject to litigation that may result in liability material to our financial statements as a whole or may negatively affect our operating results if changes to our business operations are required.  The cost to defend such litigation may be significant and is subject to inherent uncertainties.  Insurance may not be available at all or in sufficient amounts to cover any liabilities with respect to these or other matters.  There also may be adverse publicity with litigation that could negatively affect customer perception of our business, regardless of whether the allegations are valid or whether we are ultimately found liable.  An adverse result in any such matter could adversely impact our operating results or financial condition.  Additionally, any litigation to which we are subject could also require significant involvement of our senior management and may divert management’s attention from our business and operations.

We are exposed to fluctuations in currency exchange rates that could negatively impact our financial results and cash flows.  We execute all foreign sales from our U.S.-based facilities and inter-company transactions in U.S. dollars in order to partially mitigate the impact of foreign currency fluctuations.  However, a portion of our international revenues and expenses are denominated in foreign currencies.  Accordingly, we experience the risks of fluctuating currencies and corresponding exchange rates.  In fiscal years 20192022 and 2018, 2021, we recognized a net losslosses of approximately $436,000$3,000 and a net gain of $141,000$1,000 on foreign currency transactions, respectively.  Any such fluctuations that result in a less favorable exchange rate could adversely affect a portion of our revenues and expenses, which could negatively impact our results of operations and financial condition.

A significant portion of our cash is generated and held outside of the U.S.  The risks of maintaining significant cash abroad could adversely affect our cash flows and financial results.During fiscal 2019,year 2022, greater than 50% of our cash was held abroad.  WeHistorically, we generally considerconsidered unremitted earnings of our subsidiaries operating outside of the U.S. to be indefinitely reinvested and it is notreinvested.  During fiscal year 2020, we began declaring intercompany dividends to remit a portion of the earnings of our current intentforeign subsidiaries to change this position. Cashus.  Remaining cash held outside of the U.S. is primarily used for the ongoing operations of the business in the locations in which the cash is held.  Certain countries, such as China, have monetary laws that limit our ability to utilize cash resources in China for operations in other countries.  Before any funds can be repatriated, the retained earnings in Chinaof the legal entity must equal at least 150%50% of theits registered capital.  As of June 30, 2019, we2022, LPOIZ had approximately $3.9 million in retained earnings in Chinaavailable for repatriation, and LPOI did not have any earnings available for repatriation, based on earnings accumulated through December 31, 2021, the end of $3.3 million and we need to have retained earningsthe most recent statutory tax year, that remained undistributed as of $11.3 million before repatriation will be allowed.June 30, 2022.  This limitation may affect our ability to fully utilize our cash resources for needs in the U.S. or other countries and may adversely affect our liquidity.  Further, since repatriation of such cash is subject to limitations and may be subject to significant taxation, we cannot be certain that we will be able to repatriate such cash on favorable terms or in a timely manner.  If we incur operating losses and/or require cash that is held in international accounts for use in our operations based in the U.S., a failure to repatriate such cash in a timely and cost-effective manner could adversely affect our business and financial results.

Our business may be materially affected by changes to fiscal and tax policies.  Potentially negative or unexpected tax consequences of these policies, or the uncertainty surrounding their potential effects, could adversely affect our results of operations and the price of our Class A common stock.The U.S. Tax Cuts and Jobs Act of 2017 (the “TCJA”) was approved by the U.S. Congress on December 20, 2017 and signed into law on December 22, 2017.  This legislation makesmade significant changes to the U.S. Internal Revenue Code of 1986, as amended (the “IRC”).  Such changes include a reduction in the corporate tax rate from 35% to 21%,limitation on the deductibility of interest expense and performance basedperformance-based incentive compensation, and implementation of a modified territorial tax system, including a provision that requirescompanies to include theirglobal intangible low-taxed income (GILTI) and its effect on our U.S. taxable income (effectively, non-U.S. income in excess of a deemed return on tangible assets of non-U.S. corporations), among other changes.

Our future success depends on our key executive officers and our ability to attract, retain, and motivate qualified personnel.  Our future success largely depends upon the continued services of our key executive officers, management team, and other engineering, sales, marketing, manufacturing, and support personnel.  If one or more of our key employees are unable or unwilling to continue in their present positions, we may not be able to replace them readily, if at all.  Additionally, we may incur additional expenses to recruit and retain new key employees.  If any of our key employees joins a competitor or forms a competing company, we may lose some or a significant portion of our customers.  Because of these factors, the loss of the services of any of these key employees could adversely affect our business, financial condition, and results of operations.

We depend on single or limited source suppliers for some of the key materials or process steps in our products, making us susceptible to supply shortages, poor performance, or price fluctuations.  We currently purchase several key materials, or have outside vendors perform process steps, such as lens coatings, used in or during the manufacture of our products from single or limited source suppliers.  We may fail to obtain required materials or services in a timely manner in the future, or could experience delays as a result of evaluating and testing the products or services of potential alternative suppliers.  The decline in demand in the telecommunications equipment industry may have adversely impacted the financial condition of certain of our suppliers, some of whom have limited financial resources.  We have in the past, and may in the future, be required to provide advance payments in order to secure key materials from financially limited suppliers.  Financial or other difficulties faced by these suppliers could limit the availability of key components or materials.  For example, increasing labor costs in China has increased the risk of bankruptcy for suppliers with operations in China, and has led to higher manufacturing costs for us and the need to identify alternate suppliers.  Additionally, financial difficulties could impair our ability to recover advances made to these suppliers.  Any interruption or delay in the supply of any of these materials or services, or the inability to obtain these materials or services from alternate sources at acceptable prices and within a reasonable amount of time, would impair our ability to meet scheduled product deliveries to our customers and could cause customers to cancel orders, thereby negatively affecting our business, financial condition, and results of operation.

We face product liability risks, which could adversely affect our business.  The sale of our optical products involves the inherent risk of product liability claims by others.  We do not currently maintain product liability insurance coverage.  Product liability insurance is expensive, subject to various coverage exclusions, and may not be obtainable on terms acceptable to us if we decide to procure such insurance in the future.  Moreover, the amount and scope of any coverage may be inadequate to protect us in the event that a product liability claim is successfully asserted.  If a claim is asserted and successfully litigated by an adverse party, our financial position and results of operations could be adversely affected.

Business interruptions could adversely affect our business.  We manufacture our products at manufacturing facilities located in Orlando, Florida,Florida; Riga, Latvia,Latvia; and Zhenjiang, China.  Our revenues are dependent upon the continued operation of these facilities.  The Orlando Facility is subject to two leases, one that expires in AprilNovember 2022 and the other in November 2022.2032. The Riga Facility is subject to a lease that expirestwo leases which expire in December 2022,2030, and the Zhenjiang Facility is subject to three leasesone lease that expireexpires in December 2021, March 2022, and June 2022.2024.  Our operations are vulnerable to interruption by fire, hurricane winds and rain, earthquakes, electric power loss, telecommunications failure, and other events beyond our control.  We do not have detailed disaster recovery plans for our facilities and we do not have a backup facility, other than our other facilities, or contractual arrangements with any other manufacturers in the event of a casualty to or destruction of any facility or if any facility ceases to be available to us for any other reason.  If we are required to rebuild or relocate either of our manufacturing facilities, a substantial investment in improvements and equipment would be necessary.  We carry only a limited amount of business interruption insurance, which may not sufficiently compensate us for losses that may occur.

Our failure to accurately forecast material requirements could cause us to incur additional costs, have excess inventories, or have insufficient materials to manufacture our products.  Our material requirements forecasts are based on actual or anticipated product orders.  It is very important that we accurately predict both the demand for our products and the lead times required to obtain the necessary materials.  Lead times for materials that we order vary significantly and depend on factors, such as specific supplier requirements, the size of the order, contract terms, and the market demand for the materials at any given time.  If we overestimate our material requirements, we may have excess inventory, which would increase our costs.  If we underestimate our material requirements, we may have inadequate inventory, which could interrupt our manufacturing and delay delivery of our products to our customers.  Any of these occurrences would negatively impact our results of operations.  Additionally, in order to avoid excess material inventories, we may incur cancellation charges associated with modifying existing purchase orders with our vendors, which, depending on the magnitude of such cancellation charges, may adversely affect our results of operations.

If we do not achieve acceptable manufacturing yields our operating results could suffer.  The manufacture of our products involves complex and precise processes.  Our manufacturing costs for several products are relatively fixed, and, thus, manufacturing yields are critical to the success of our business and our results of operations.  Changes in our manufacturing processes or those of our suppliers could significantly reduce our manufacturing yields.  In addition, we may experience manufacturing delays and reduced manufacturing yields upon introducing new products to our manufacturing lines. The occurrence of unacceptable manufacturing yields or product yields could adversely affect our financial condition and results of operations.

If our customers do not qualify our manufacturing lines for volume shipments, our operating results could suffer.  Our manufacturing lines have passed our qualification standards, as well as our technical standards.  However, our customers may also require that our manufacturing lines pass their specific qualification standards, and that we be registered under international quality standards, beyond our ISO 9001:2015 certification.  This customer qualification process determines whether our manufacturing lines meet the customers’ quality, performance, and reliability standards.  Generally, customers do not purchase our products, other than limited numbers of evaluation units, prior to qualification of the manufacturing line for volume production.  We may be unable to obtain customer qualification of our manufacturing lines or we may experience delays in obtaining customer qualification of our manufacturing lines.  If there are delays in the qualification of our products or manufacturing lines, our customers may drop the product from a long-term supply program, which would result in significant lost revenue opportunity over the term of each such customer’s supply program, or our customers may purchase from other manufacturers.  The inability to obtain customer qualification of our manufacturing lines, or the delay in obtaining such qualification, could adversely affect our financial condition and results of operations.

Russia’s ongoing conflict with Ukraine has disrupted the global economy. Our business, financial condition, and results of operations could be adversely affected by continued disruption and global consequences stemming from the conflict. Although we have no direct operations in Russia or Ukraine, the broader consequences of this conflict have negatively affected, and are expected to continue to negatively affect, the global economy, including the imposition of sanctions, cyber incidents or information technology failures, supply disruptions, increases in inflation rates, increase in energy costs, changes to foreign currency exchange rates, constraints, volatility, or disruption in financial markets, the availability of raw materials, supplies, freight, and labor, and uncertainty about economic and global stability. Historically, we have sourced germanium from suppliers located in Russia and China. We have, and intend to continue, sourcing germanium from suppliers located in China through the continuation of the Russian-Ukraine conflict and the Russian trade embargo.  Though we do not anticipate any challenges from sourcing germanium solely from suppliers in China, we cannot provide any assurances that we will be able to obtain adequate supplies in the future or, if adequate supplies are available, that the timing or costs of obtaining such raw materials will be acceptable to us. Further, some of our target marketsmajor customers in Europe may be directly impacted by the Russian-Ukraine conflict, which could impact the amount and jurisdictions in which we operate,frequency of orders they place with us, as well as impact the timing and adversely change tax benefits or liabilities in these or other jurisdictions. In addition, BREXIT could leadability to legal uncertainty and potentially divergent national laws and regulations as the United Kingdom determines which European Union lawspay for products ordered from us. Any material impacts to replace or replicate. BREXIT also may create global economic uncertainty, which may cause our customers and potential customers to monitor their costs and reduce their budgets for either our products or other products that incorporate our products. Any of these effects of BREXIT, among others, could materially adversely affecthave a material adverse effect on our business business opportunities, results of operations, financial condition, and cash flows.

If we are unable to protect and enforce our intellectual property rights, we may be unable to compete effectively. We believe that our intellectual property rights are important to our success and our competitive position, and we rely on a combination of patent, copyright, trademark, and trade secret laws and restrictions on disclosure to protect our intellectual property rights.  Although we have devoted substantial resources to the establishment and protection of our intellectual property rights, the actions taken by us may be inadequate to prevent imitation or improper use of our products by others or to prevent others from claiming violations of their intellectual property rights by us.

We do not have patent protection for our formulas and processes, and a loss of ownership of any of our formulas and processes would negatively impact our business. We believe that we own our formulas and processes.  However, we have not sought, and do not intend to seek, patent protection for all of our formulas and processes.  Instead, we rely on the complexity of our formulas and processes, trade secrecy laws, and employee confidentiality agreements.  However, we cannot assure you that other companies will not acquire our confidential information or trade secrets or will not independently develop equivalent or superior products or technology and obtain patent or similar rights.  Although we believe that our formulas and processes have been independently developed and do not infringe the patents or rights of others, a variety of components of our processes could infringe existing or future patents, in which event we may be required to modify our processes or obtain a license.  We cannot assure you that we will be able to do so in a timely manner or upon acceptable terms and conditions and the failure to do either of the foregoing would negatively affect our business, results of operations, financial condition, and cash flows.

We may become involved in intellectual property disputes and litigation, which could adversely affect our business.  We anticipate, based on the size and sophistication of our competitors and the history of rapid technological advances in our industry that several competitors may have patent applications in progress in the U.S. or in foreign countries that, if issued, could relate to products similar to ours.  If such patents were to be issued, the patent holders or licensees may assert infringement claims against us or claim that we have violated other intellectual property rights.  These claims and any resulting lawsuits, if successful, could subject us to significant liability for damages and invalidate our proprietary rights.  The lawsuits, regardless of their merits, could be time-consuming and expensive to resolve and would divert management time and attention.  Any potential intellectual property litigation could also force us to do one or more of the following, any of which could harm our business and adversely affect our financial condition and results of operations:

For additional information regarding our facilities, please seeItem 1. Businessin this Annual Report on Form 10-K.  For additional information regarding leases, see Note 13, Lease Commitments,12, Leases, to the Notes to the Consolidated Financial Statements to this Annual Report on Form 10-K.

We have never declared or paid any cash dividends on our Class A common stock and do not intend to pay any cash dividends in the foreseeable future. We currently intend to retain all future earnings in order to finance the operation and expansion of our business. In addition, thethe payment of dividends, if any, in the future, will depend on our earnings, capital requirements, financial conditions, and other relevant factors.

We believe we have adequate financial resources to sustain our current and anticipated operations in the coming year.  We have established milestones that will be tracked to ensure that as funds are expended we are achieving results before additional funds are committed.  We anticipate sales growth in future years, primarily from infrared products. We structured our sales teamthe engineered solutions we plan to enhance our incremental organic growth position for our core aspheric lens business, prime our operations for the anticipated high growth of our new infrared products, and allow for the integration of strategic acquisitions. We are also seeing a substantial increase in revenue-generating opportunities and broader market applications as a result of our investments in technologies that decreased our lens production costs and expanded our production capacity.

Despite these challenges to winning more “annuity” business, we nevertheless believe we can be successful in procuring this business because of our unique capabilities in optical design engineering that we make available on the merchant market, a market that we believe is underserved in this area of service offering.  Additionally, we believe that we offer value to some customers as a source of supply in the U.S. should they be unwilling to commit to purchase their supply of a critical component from foreign merchant production sources.  For information regarding revenue recognition related to our various revenue streams, refer to Critical Accounting Policies and Estimates in this Annual Report on Form 10-K.

Similarly, we manage our accounts receivable to minimize investment in working capital.  We measure the quality of receivables by the proportions of the total that are at various increments past due from our normally extended terms, which are generally 30 days.  The most important aggregate measure of accounts receivable is the quarter’s ending balance of net accounts receivable expressed as a number of days’ worth of the quarter’s net revenues, also known as “days sales outstanding,” or “DSO.”  It is calculated by dividing the quarter’s ending net accounts receivable by the quarter’s net revenues, multiplied by 365 and divided by 4.  Generally, a lower DSO measure equates to a lesser investment in accounts receivable and, therefore, more efficient use of capital.  The table below shows our DSO for the preceding eight fiscal quarters: