UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2022~~2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-10647

PRECISION OPTICS CORPORATION, INC.

(Exact name of registrant as specified in its charter)

Massachusetts	04-2795294
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

22 East Broadway, Gardner, Massachusetts 01440-3338

(Address of principal executive offices) (Zip Code)

(978) 630-1800

(Registrants telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None.

Securities registered pursuant to Section 12(g) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	~~PEYE~~POCI	~~OTCQB~~The Nasdaq Stock Market LLC

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 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. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

The number of shares outstanding of the issuers common stock, par value $0.01 per share, at May ~~16, 2022~~15, 2023 was ~~16,915,089~~5,640,995 shares.

PRECISION OPTICS CORPORATION, INC.

Table of Contents

	Page
PART I FINANCIAL INFORMATION	3
Item 1. Financial Statements	3
Consolidated Balance Sheets at March 31, ~~2022~~2023 and June 30, ~~2021~~2022	3
Consolidated Statements of Operations for the Three and Nine Months Ended March 31, ~~2022~~2023 and ~~2021~~2022	4
Consolidated Statements of Stockholders’ Equity for the ~~Three and~~ Nine Months Ended March 31, ~~2022~~2023 and ~~2021~~2022	5
Consolidated Statements of Cash Flows for the ~~Three and~~ Nine Months Ended March 31, ~~2022~~2023 and ~~2021~~2022	6
Notes to Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	1516
Item 3. Quantitative and Qualitative Disclosures About Market Risk	1920
Item 4. Controls and Procedures	1920

PART II OTHER INFORMATION	2021
Item 1. Legal Proceedings	2021
Item 1A. Risk Factors	2021
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	2021
Item 3. Defaults Upon Senior Securities	2021
Item 4. Mine Safety Disclosures (Not applicable.)	2021
Item 5. Other Information	2021
Item 6. Exhibits	22

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

March 31,
2022 June 30,
2021
ASSETS
Current Assets:
Cash and cash equivalents $ 831,585 $ 861,650
Accounts receivable, net of allowance for doubtful accounts of $253,633 at March 31, 2022 and $251,383 at June 30, 2021 3,347,692 1,878,755
Inventories 2,965,220 1,885,395
Prepaid expenses 318,551 150,635
Total current assets 7,463,048 4,776,435

Fixed Assets:
Machinery and equipment 3,196,585 3,084,511
Leasehold improvements 812,283 792,723
Furniture and fixtures 216,810 178,640
Total Fixed Assets 4,225,678 4,055,874
Less: Accumulated depreciation and amortization 3,599,491 3,461,622
Net fixed assets 626,187 594,252

Operating lease right-to-use asset 140,607 61,247
Patents, net 212,952 141,702
Goodwill 8,824,210 687,664

TOTAL ASSETS $ 17,267,004 $ 6,261,300

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Current portion of capital lease obligation $ 40,102 $ 38,347
Current maturities of long-term debt 367,714 0
Current portion of acquisition earn out liability 898,855 166,667
Accounts payable 2,538,040 1,205,149
Customer advances 1,018,275 450,084
Accrued compensation and other 862,496 589,616
Operating lease liability 45,405 61,247
Total current liabilities 5,770,887 2,511,110

Capital lease obligation, net of current portion 122,096 152,397
Long-term debt, net of current maturities 2,053,070 0
Acquisition earn out liability, net of current portion 697,408 166,666
Operating lease liability, net of current portion 95,202 0

Stockholders’ Equity:
Common stock, $0.01 par value: 50,000,000 shares authorized; issued and outstanding 16,887,840 shares at March 31, 2022 and 13,282,476 at June 30, 2021 168,878 132,825
Additional paid-in capital 56,723,154 50,464,280
Accumulated deficit (48,363,691 ) (47,165,978 )
Total stockholders’ equity 8,528,341 3,431,127

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 17,267,004 $ 6,261,300

March 31, June 30,
2023 2022
ASSETS
Current Assets:
Cash and cash equivalents $ 612,095 $ 605,749
Accounts receivable, net of allowance for doubtful accounts of $74,593 at March 31, 2023 and $44,135 at June 30, 2022 4,389,907 2,663,872
Inventories 2,959,732 3,079,938
Prepaid expenses 307,663 213,448
Total current assets 8,269,397 6,563,007

Fixed Assets:
Machinery and equipment 3,225,483 3,215,412
Leasehold improvements 794,894 786,112
Furniture and fixtures 233,547 219,999
Total fixed assets 4,253,924 4,221,523
Less—Accumulated depreciation and amortization 3,809,303 3,651,843
Net fixed assets 444,621 569,680

Operating lease right-to-use asset 399,007 517,725
Patents, net 249,408 229,398
Goodwill 8,824,210 8,824,210

TOTAL ASSETS $ 18,186,643 $ 16,704,020

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Current portion of financing lease obligation $ 42,397 $ 40,705
Current maturities of long-term debt 371,429 367,714
Current portion of acquisition earn out liabilities 571,838 166,667
Accounts payable 2,649,248 2,239,175
Contract liabilities 1,387,806 905,113
Accrued compensation and other 1,305,678 716,702
Operating lease liability 166,316 150,565
Total current liabilities 6,494,712 4,586,641

Financing lease obligation, net of current portion 79,701 111,691
Long-term debt, net of current maturities and debt issuance costs 1,681,642 1,961,141
Acquisition earn out liability, net of current portion – 705,892
Operating lease liability, net of current portion 232,691 367,160

Stockholders’ Equity:
Common stock, $0.01 par value: 50,000,000 shares authorized; issued and outstanding – 5,640,995 shares at March 31, 2023 and 5,638,302 June 30, 2022 56,410 56,383
Additional paid-in capital 57,784,369 57,009,506
Accumulated deficit (48,142,882 ) (48,094,394 )
Total stockholders’ equity 9,697,897 8,971,495

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 18,186,643 $ 16,704,020
The accompanying notes are an integral part of these consolidated interim financial statements.
3

PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED
~~March~~MARCH 31, ~~2022~~2023 AND ~~2021~~2022
(UNAUDITED)

Three Months
Ended March 31, Nine Months
Ended March 31, Three Months
Ended March 31, Nine Months
Ended March 31,
2022 2021 2022 2021 2023 2022 2023 2022
Revenues $ 4,651,352 $ 2,458,290 $ 10,884,737 $ 8,001,641 $ 5,048,065 $ 4,651,352 $ 16,020,327 $ 10,884,737

Cost of goods sold 2,923,143 1,640,266 7,397,914 5,353,999 3,311,967 2,923,143 10,045,316 7,397,914
Gross profit 1,728,209 818,024 3,486,823 2,647,642 1,736,098 1,728,209 5,975,011 3,486,823

Research and development expenses, net 214,898 146,063 433,248 443,609 206,375 214,898 660,518 433,248
Selling, general and administrative expenses 1,574,432 927,979 3,974,824 2,671,176 2,022,991 1,574,432 5,338,498 3,974,824
Business acquisition expenses 0 0 172,174 0 – – – 172,174
Total operating expenses 1,789,330 1,074,042 4,580,246 3,114,785 2,229,366 1,789,330 5,999,016 4,580,246

Operating loss (61,121 ) (256,018 ) (1,093,423 ) (467,143 )
Operating income (loss) (493,268 ) (61,121 ) (24,005 ) (1,093,423 )

Other income (expense)
Interest expense (52,778 ) (666 ) (104,290 ) (2,202 ) (48,124 ) (52,778 ) (167,443 ) (104,290 )
Gain on forgiveness of bank note 0 808,962 0 808,962
Gain on revaluation of contingent earn-out liability 142,960 – 142,960 –

Net income (loss) $ (113,899 ) $ 552,278 $ (1,197,713 ) $ 339,617 $ (398,432 ) $ (113,899 ) $ (48,488 ) $ (1,197,713 )

Income (loss) per share:
Basic $ (0.01 ) $ 0.04 $ (0.08 ) $ 0.03
Fully diluted $ (0.01 ) $ 0.04 $ (0.08 ) $ 0.02
Basic and fully diluted $ (0.07 ) $ (0.02 ) $ (0.01 ) $ (0.23 )

Weighted average common shares outstanding:
Basic 16,803,040 13,243,595 15,545,869 13,208,805
Fully diluted 16,803,040 14,068,459 15,545,869 13,841,700
Basic and fully diluted 5,640,473 5,600,953 5,639,015 5,181,896

The accompanying notes are an integral part of these consolidated interim financial statements.

4

PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
FOR THE NINE MONTHS ENDED
~~MaRCH~~march 31, ~~2022~~2023 AND ~~2021~~2022
(UNAUDITED)

Nine Month Period Ended March 31, 2022
Number of
Shares Common
Stock Additional
Paid-in
Capital
Common
Stock
Subscribed
Accumulated
Deficit Total
Stockholders’
Equity

Balance, July 1, 2021 13,282,476 $ 132,825 $ 50,464,280 $ – $ (47,165,978 ) $ 3,431,127
Stock-based compensation – – 160,071 – – 160,071
Proceeds from private placement of common stock subscribed, net of estimated issuance costs of $10,000 – – (10,000 ) 1,030,000 – 1,020,000
Net loss – – – – (576,801 ) (576,801 )
Balance, September 30, 2021 13,282,476 132,825 50,614,351 1,030,000 (47,742,779 ) 4,034,397
Stock-based compensation – – 330,451 – – 330,451
Proceeds from private placement of common stock 937,500 9,375 1,490,625 (1,030,000 ) – 470,000
Issuance of common stock in business acquisition 2,500,000 25,000 4,800,000 – – 4,825,000
Proceeds from exercise of stock option 15,000 150 16,500 – – 16,650
Exercise of stock options net of 1,435 shares withheld 2,625 26 (26 ) – – –
Issuance of common stock for employee services 9,095 91 19,909 – – 20,000
Net loss – – – – (507,013 ) (507,013 )
Balance, December 31, 2021 16,746,696 167,467 57,271,810 0 (48,249,792 ) 9,189,485
Correction of error in valuation of stock issued in business acquisition – – (825,000 ) – – (825,000 )
Stock-based compensation – – 231,115 – – 231,115
Proceeds from exercise of stock options 43,200 432 46,208 – – 46,640
Exercise of stock options net of 96,056 shares withheld 97,944 979 (979 ) – – –
Net loss – – – – (113,899 ) (113,899 )
Balance, March 31, 2022 16,887,840 $ 168,878 $ 56,723,154 $ 0 $ (48,363,691 ) $ 8,528,341
Nine Month Period Ended March 31, 2021
Number of
Shares Common
Stock Additional
Paid-in
Capital
Common
Stock
Subscribed
Accumulated
Deficit Total
Stockholders’
Equity

Balance, July 1, 2020 13,191,789 $ 131,918 $ 49,702,986 $ 0 $ (47,063,143 ) $ 2,771,761
Stock-based compensation – – 71,146 – – 71,146
Net income – – – – 793 793
Balance, September 30, 2020 13,191,789 131,918 49,774,132 0 (47,062,350 ) 2,843,700
Stock-based compensation – – 157,079 – – 157,079
Net loss – – – – (213,454 ) (213,454 )
Balance, December 31, 2020 13,191,789 131,918 49,931,211 0 (47,275,804 ) 2,787,325
Stock-based compensation – – 86,027 – – 86,027
Proceeds from exercise of stock options 72,000 720 27,551 – – 28,271
Net income – – – – 552,278 552,278
Balance, March 31, 2021 13,263,789 $ 132,638 $ 50,044,789 $ 0 $ (46,723,526 ) $ 3,453,901

Nine Month Period Ended March 31, 2023
Number of
Shares Common
Stock Additional
Paid-in
Capital Common
Stock
Subscribed Accumulated
Deficit Total
Stockholders’
Equity
Balance, July 1, 2022 5,638,302 $ 56,383 $ 57,009,506 $ – $ (48,094,394 ) $ 8,971,495
Stock-based compensation – – 74,990 – – 74,990
Net loss – – – – (158,724 ) (158,724 )
Balance, September 30, 2022 5,638,302 56,383 57,084,496 – (48,253,118 ) 8,887,761
Stock-based compensation – – 244,786 – – 244,786
Net Income – – – – 508,668 508,668
Balance, December 31, 2022 5,638,302 56,383 57,329,282 – (47,744,450 ) 9,641,215
Stock-based compensation – – 450,014 – – 450,014
Proceeds from exercise of stock option 2,000 20 5,080 – – 5,100
Exercise of stock options net of 307 shares withheld 693 7 (7 ) – – –
Net loss – – – – (398,432 ) (398,432 )
Balance, March 31, 2023 5,640,995 $ 56,410 $ 57,784,369 $ – $ (48,142,882 ) $ 9,697,897

Nine Month Period Ended March 31, 2022
Number of
Shares Common
Stock Additional
Paid-in
Capital Common
Stock
Subscribed Accumulated
Deficit Total
Stockholders’
Equity
Balance, July 1, 2021 4,427,432 $ 44,274 $ 50,552,831 $ – $ (47,165,978 ) $ 3,431,127
Stock-based compensation – – 160,071 – – 160,071
Proceeds from private placement of common stock subscribed, net of estimated issuance costs of $10,000 – – (10,000 ) 1,030,000 – 1,020,000
Net loss – – – – (576,801 ) (576,801 )
Balance, September 30, 2021 4,427,432 44,274 50,702,902 1,030,000 (47,742,779 ) 4,034,397
Stock-based compensation – – 330,451 – – 330,451
Proceeds from private placement of common stock 312,500 3,125 1,496,875 (1,030,000 ) – 470,000
Issuance of common stock in business acquisition 833,333 8,333 4,816,667 – – 4,825,000
Proceeds from exercise of stock option 5,000 50 16,600 – – 16,650
Exercise of stock options net of 478 shares withheld 875 9 (9 ) – – –
Issuance of common stock for employee services 3,031 30 19,970 – – 20,000
Net loss – – – – (507,013 ) (507,013 )
Balance, December 31, 2021 5,582,171 55,821 57,383,456 – (48,249,792 ) 9,189,485
Correction of error in valuation of stock issued in business acquisition – – (825,000 ) – – (825,000 )
Stock-based compensation – – 231,115 – – 231,115
Proceeds from exercise of stock options 14,400 144 46,496 – – 46,640
Exercise of stock options net of 32,018 shares withheld 32,648 327 (327 ) – – –
Net loss – – – – (113,899 ) (113,899 )
Balance, March 31, 2022 5,629,219 $ 56,292 $ 56,835,740 $ – $ (48,363,691 ) $ 8,528,341

The accompanying notes are an integral part of these consolidated interim financial statements.

5

PRECISION OPTICS CORPORATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED
~~MARCH~~mARCH 31, ~~2022~~2023 AND ~~2021~~2022
(UNAUDITED)

Nine Months Ended
March 31, Nine Months Ended
March 31,
2022 2021 2023 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (1,197,713 ) $ 339,617
Net Loss $ (48,488 ) $ (1,197,713 )
Adjustments to Reconcile Net Loss to Net Cash Used In Operating Activities -
Gain on revaluation of contingent earn-out liability (142,960 ) –
Depreciation and amortization 137,869 104,379 157,460 173,887
Stock-based compensation expense 741,637 314,252 769,790 741,637
Gain on forgiveness of bank note 0 (808,962 )
Non-cash interest expense 8,906 –
Changes in Operating Assets and Liabilities, net of effects of business acquisition -
Non-cash interest expense 36,018 0
Accounts receivable, net (791,959 ) (52,344 ) (1,726,035 ) (791,959 )
Inventories, net (623,817 ) 247,963 120,206 (623,817 )
Due from related party 84,210 0 – 84,210
Prepaid expenses (85,791 ) 1,551 (94,215 ) (85,791 )
Accounts payable 1,118,149 (41,394 ) 410,073 1,118,149
Customer advances (258,487 ) (184,175 ) 482,693 (258,487 )
Accrued compensation and other (40,083 ) 3,693 588,976 (40,083 )
Net Cash Used In Operating Activities (879,967 ) (75,420 )
Net Cash Provided By (Used In) Operating Activities 526,406 (879,967 )

CASH FLOWS FROM INVESTING ACTIVITIES:
Additional patent costs (23,098 ) (40,307 ) (20,010 ) (23,098 )
Purchases of property and equipment (59,562 ) (49,160 )
Acquisition of businesses (421,729 ) (166,667 )
Purchases of fixed assets (32,401 ) (59,562 )
Acquisition of business – (421,729 )
Net Cash Used In Investing Activities (504,389 ) (256,134 ) (52,411 ) (504,389 )

CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of capital lease obligations (28,546 ) (49,569 )
Payment of financing lease obligation (30,298 ) (28,546 )
Payments of long-term debt (154,453 ) 0 (275,784 ) (154,453 )
Payment of debt issuance costs (26,000 ) 0 – (26,000 )
Payment of acquisition earn-out liability (166,667 ) –
Gross proceeds from private placement of common stock 1,500,000 0 – 1,500,000
Gross proceeds from exercise of stock options 63,290 28,271 5,100 63,290
Net Cash Provided By (Used in) Financing Activities 1,354,291 (21,298 )
Net Cash (Used In) Provided By Financing Activities (467,649 ) 1,354,291

NET DECREASE IN CASH AND CASH EQUIVALENTS (30,065 ) (352,852 )
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 6,346 (30,065 )
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 861,650 1,134,697 605,749 861,650

CASH AND CASH EQUIVALENTS, END OF PERIOD $ 831,585 $ 781,845 $ 612,095 $ 831,585

SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
Offering costs included in accrued compensation and other $ 10,000 $ 0 $ – $ 10,000
Issuance of common stock for services $ – $ –
Acquisition of business financed with long-term debt $ 2,600,000 $ 0 $ – $ 2,600,000
Acquisition of Manufacturing Equipment Under Capital Lease $ 0 $ 161,977

The accompanying notes are an integral part of these consolidated interim financial statements.

6

PRECISION OPTICS CORPORATION, INC.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Operations

The accompanying consolidated financial statements include the accounts of Precision Optics Corporation, Inc. and its wholly-owned subsidiaries (the ~~Company)~~“Company”). 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 third quarter and nine months of the Company’s fiscal year ~~2022.~~2023. These consolidated financial statements do not include all disclosures associated with annual consolidated financial statements and, accordingly, should be read in conjunction with footnotes contained in the Company’s consolidated financial statements for the year ended June 30, ~~2021,~~2022, together with the Report of Independent Registered Public Accounting Firm filed under cover of the Company’s ~~2021~~2022 Annual Report on Form 10-K, filed with the Securities and Exchange Commission on September ~~28, 2021.~~27, 2022.
Reclassifications
Certain reclassifications have been made to conform the prior period consolidated financial statements to the current period.
Reverse Stock Split
The Company’s Board of Directors authorized a reverse split of the Company’s outstanding shares of common stock within a stated range of 1:1.5 to 1:3, which was subsequently approved by stockholders holding more than a majority of the outstanding shares of Common Stock at the Company’s Annual Meeting on April 8, 2022. The Company effected the reverse stock split on a one-for-three basis on November 1, 2022 as reported by the Company on Form 8-K filed with the Securities and Exchange Commission on November 2, 2022.
As a result of the reverse stock split, every three shares of issued and outstanding common stock were automatically combined into one issued and outstanding share of common stock, without any change in the par value per share or the number of the Company’s authorized shares. The reverse stock split reduced the number of shares of common stock outstanding from 16,915,089 on November 1, 2022 to approximately 5,638,302 shares, after reduction for the elimination of fractional shares.
Unless otherwise noted, all prior year share amounts and per share calculations throughout this Form 10-Q have been restated to reflect the impact of this 1:3 reverse stock split and to provide data on a comparable basis. Such restatements include calculations regarding the Company’s weighted-average shares, and earnings per share, as well as disclosures regarding the Company’s stock-based compensation plans.
7

Use of Estimates

The preparation of these consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

~~Revision of the Second Quarter 2022 Unaudited Consolidated Financial Statements~~
The Company identified an error in the valuation of 2,500,000 shares of common stock issued on October 4, 2021 in the business acquisition described in Note 2 resulting in an $825,000 overstatement of Additional Paid-In Capital and Goodwill in the December 31, 2021 balance sheet presented in the quarterly report on Form 10-Q for the quarter ended December 31, 2021. This change does not impact the number of shares issued as part of the transaction; it only changes the imputed value of the common stock issued. The financial statements for the prior interim fiscal quarter ended December 31, 2021 have been revised by an $825,000 adjustment to the opening balance of Additional Paid-In Capital in the accompanying Statement of Stockholders Equity for the quarter ended March 31, 2022, and by an adjustment of Goodwill at the acquisition date as described in Note 2. No profit and loss accounts in the current or prior interim periods are affected by this revision.
Income (Loss) Per Share

Basic income (loss) per share is computed by dividing net income or net loss by the weighted average number of shares of common stock outstanding during the period. Diluted income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period, plus the number of potentially dilutive securities outstanding during the period such as stock options. For the three and nine months ended March 31, 2023 and 2022, the effect of such securities was antidilutive and not included in the fully diluted calculation because of the net loss generated during those periods.

7
The following is the calculation of income (loss) per share for the three and nine months ended March 31, ~~2022~~2023 and ~~2021:~~2022:
Schedule of earnings per share
Three Months
Ended March 31, Nine Months
Ended March 31, Three Months
Ended March 31, Nine Months
Ended March 31,
2022 2021 2022 2021 2023 2022 2023 2022
Net Income (Loss) - Basic and Diluted $ (113,899 ) $ 552,278 $ (1,197,713 ) $ 339,617 $ (398,432 ) $ (113,899 ) $ (48,488 ) $ (1,197,713 )

Weighted Average Shares Outstanding
Basic 16,803,040 13,243,595 15,545,869 13,208,805
Fully Diluted 16,803,040 14,068,459 15,545,869 13,841,700
Basic and Fully Diluted 5,640,473 5,600,953 5,639,015 5,181,896

Income (Loss) Per Share
Basic $ (0.01 ) $ 0.04 $ (0.08 ) $ 0.03
Fully Diluted $ (0.01 ) $ 0.04 $ (0.08 ) $ 0.02
Basic and Fully Diluted $ (0.07 ) $ (0.02 ) $ (0.01 ) $ (0.23 )

The number of shares issuable upon the exercise of outstanding stock options that were excluded from the computation as their effect was antidilutive was ~~2,817,500~~1,058,630 for the three and nine months ended March 31, ~~2022,~~2023, respectively, and ~~15,000~~939,166 ~~and~~ ~~260,000~~ for the three and nine months ended March 31, ~~2021, respectively.~~2022.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

In assessing the likelihood of utilization of existing deferred tax assets, management has considered historical results of operations and the current operating environment. Based on this evaluation, a full valuation reserve has been provided for the deferred tax assets.

8
Goodwill and Patents

Long-lived assets such as goodwill and patents are capitalized when acquired and reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable. Impairment of the carrying value of long-lived assets such as goodwill and patents would be indicated if the best estimate of future undiscounted cash flows expected to be generated by the asset grouping is less than its carrying value. If an impairment is indicated, any loss is measured as the difference between estimated fair value and carrying value and is recognized in operating income or loss. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. ~~NaN~~No such impairments of goodwill or patents have been estimated by management as of March 31, ~~2022.~~2023.

2. REVISION OF THE FIRST AND SECOND QUARTER FISCAL YEAR 2023 UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
During the third quarter of fiscal year 2023, the Company identified errors in the accrual of certain costs for the fiscal quarters ended September 30, 2022 and December 31, 2022, which resulted in an understatement of accounts payable and costs of goods sold for those two quarters. The corrections of these errors impacted the unaudited condensed consolidated financial statements for the first and second quarters of fiscal year 2023. The Company assessed the applicable guidance issued by the Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB) and concluded these misstatements were not material, individually or in the aggregate, to its unaudited condensed consolidated financial statements for the aforementioned interim periods. However, because of the significance of these items, and to facilitate comparisons among periods, the Company decided to revise the previously issued first and second quarter unaudited condensed consolidated financial information by increasing accounts payable and cost of goods sold by $85,213 and 125,752 in the quarters ended September 30, 2022 and December 31, 2022, respectively. These quarterly and year to date financial statements will be revised in subsequent filings with the Securities and Exchange Commission that include such statements, including when the first and second quarter Form 10-Q’s are filed for fiscal year 2024.
Accumulated deficit at January 1, 2023 in the accompanying statement of stockholders’ equity for the quarter ended March 31, 2023 was made larger by $210,965 due to the effects of the increased expense accruals for the first and second quarters of fiscal year 2023.
The following are selected line items from the financial statements illustrating the effect of the error corrections for the quarters ended September 30, 2022 and December 31, 2022:
Schedule of error corrections Quarter Ended September 30, 2022
As Previously Reported Adjustment(1) As Revised
Revenues $ 5,085,301 $ – $ 5,085,301
Cost of goods sold 3,360,647 85,213 3,445,860
Gross Profit 1,724,654 (85,213 ) 1,639,441
Operating loss (16,589 ) (85,213 ) (101,802 )
Net loss (73,511 ) (85,213 ) (158,724 )
Net loss per share, basic and fully diluted (0.01 ) (0.02 ) (0.03 )
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Quarter Ended December 31, 2022
As Previously Reported Adjustment(1) As Revised
Revenues $ 5,886,961 $ – $ 5,886,961
Cost of goods sold 3,161,737 125,752 3,287,489
Gross Profit 2,725,224 (125,752 ) 2,599,472
Operating income 696,817 (125,752 ) 571,065
Net income 634,420 (125,752 ) 508,668
Net income per share, basic 0.11 (0.02 ) 0.09
Net income per share, fully diluted 0.11 (0.02 ) 0.09
(1) The errors in each of the two fiscal quarters resulted from the omission of invoices from a small identifiable group of outside contractors used for certain services relating to research and development activities. In addition to the above adjustments, trade accounts payable will be increased in future filings by $85,213 and $210,965 as of September 30, 2022 and December 31, 2022, respectively.
3. BUSINESS ACQUISITION

On October 4, 2021, the Company ~~entered into an asset purchase agreement to acquire~~acquired substantially all of the assets of Lighthouse Imaging, LLC, of Windham, Maine, a medical optics and digital imaging business operating as ~~described~~a designer and manufacturer of advanced optical imaging systems and accessories with a strong expertise in ~~Forms 8-K~~electrical engineering and ~~8-K/A that the Company filed with the Securities and Exchange Commission on October 8, 2021 and December 20, 2021, respectively.~~development of end-to-end medical visualization devices. The ~~aggregate cash purchase price consisted of $2,855,063~~ ~~in cash at closing, $1,500,000~~ ~~as earn-out consideration over the subsequent two year period, and~~ ~~2,500,000~~ ~~unregistered shares of common stock issued to the seller at closing. The effective date of the acquisition was October 4, 2021, and the~~ actual results of operations of the Lighthouse division ~~since that date~~ are included in the accompanying consolidated financial statements as of, and for the three and nine months ended, March 31, ~~2022.~~
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~~The Company financed~~2023, and for the ~~cash portion of the acquisition by securing a $2,600,000~~ ~~term loan from Main Street Bank on October 4, 2021, and by selling~~ ~~937,500~~ ~~shares of its common stock for $1,500,000~~ ~~of gross proceeds in a private placement closed on October 1, 2021.~~ six months ended March 31, 2022.

The purchase price for Lighthouse Imaging included $1,500,000 as potential earn-out consideration over the subsequent two year period, contingent on the Lighthouse division meeting specified annual gross profit targets. The Lighthouse division did not meet the target for the first $750,000 portion of the earn-out, and the contingent liability associated with that portion was reversed and recognized as other income in the fiscal quarter ended June 30, 2022.
The second $750,000 portion of the earn-out contingent liability was renegotiated in March 2023 and adjusted to $600,000 in return for modifications to the target level of gross profit for the second earnout period. The $150,000 reduction in the contingent earn-out liability was recognized as other income in the fiscal quarter ended March 31, 2023. The second portion of the contingent earn-out liability of $600,000 will be paid ~~at a rate of~~ ~~$750,000 per annum from October 1, 2021 to September 30, 2023~~if ~~certain levels~~the adjusted target level of gross profit ~~are~~is earned by the Lighthouse ~~division.~~
~~Purchase Price Allocation and Goodwill~~
~~The total purchase price of $8,990,670~~ ~~as previously disclosed in the quarterly report on Form 10-Q~~division for the ~~quarter ended December 31, 2021 has been restated for a revision of the valuation of the common stock issued to the sellers as described in Note 1.~~ ~~Revision of the Second Quarter~~period from October 1, 2022 ~~Unaudited Consolidated Financial Statements.~~ The allocation of the revised purchase price is preliminary and subject to change based on future payments made for the earn-out contingent liability. Any unearned portions of the earn-out liability will be recognized in earnings. The acquired assets including the revised Goodwill, contingent consideration and assumed liabilities at the effective date of acquisition include the following:
Schedule of acquired assets, contingent consideration and assumed liabilities
At Acquisition Effective Date October 4, 2021 Amount
Trade accounts receivable, net $ 676,977
Inventories 456,008
Other current assets 82,125
Fixed assets 110,243
Patents 48,153
Total Assets Acquired 1,373,506

Accounts payable 214,742
Customer advances 826,679
Accrued compensation and other 302,961
Total Liabilities Assumed 1,344,382
Net assets acquired 29,124
Goodwill 8,136,546
Total Purchase Price-Initial and Contingent Consideration $ 8,165,670
~~Consolidated Pro Forma Results~~through September 30, 2023.

Consolidated unaudited actual and pro forma results of operations for the Company are presented below assuming that the acquisition of the Lighthouse division had occurred on July 1, ~~2020.~~2021. Pro forma operating results include net adjustments resulting from the acquisition transaction during the three ~~and nine~~ months ended ~~March 31, 2022 and~~September 30, 2021.
Schedule of consolidated pro forma results
Three Months
Ended March 31, Nine Months
Ended March 31,
2022 2021 2022 2021
(Actual) (Pro Forma) (Pro Forma) (Pro Forma)
Revenues $ 4,651,352 $ 3,600,498 $ 12,329,074 $ 11,597,530
Net income (loss) (113,899 ) 593,668 (1,140,418 ) 382,681
Net income (loss) per share
Basic $ (0.01 ) $ (0.04 ) $ (0.07 ) $ (0.02 )
Fully diluted $ (0.01 ) $ (0.03 ) $ (0.07 ) $ (0.02 )
Schedule of consolidated pro forma results
Three Months
Ended March 31, Nine Months
Ended March 31,
2023 2022 2023 2022
(Actual) (Actual) (Actual) (Pro Forma)
Revenues $ 5,048,065 $ 4,651,352 $ 16,020,327 $ 12,329,074
Net loss (398,432 ) (113,899 ) (48,488 ) (1,140,418 )
Net loss per share:
Basic and fully diluted $ (0.07 ) $ (0.02 ) $ (0.01 ) $ (0.20 )

Pro forma financial information is not necessarily indicative of the Company’s actual results of operations if the acquisition had been completed at the date indicated, nor is it necessarily an indication of future operating results. Amounts do not include any operating efficiencies or cost saving that the Company believes may be achievable.

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3.4. INVENTORIES

Inventories are stated at the lower of cost (first-in, first-out) or market and consisted of the following:
Schedule of inventory
March 31,
2022 June 30,
2021 March 31,
2023 June 30,
2022
Raw Materials $ 1,292,861 $ 626,255 $ 1,402,292 $ 1,414,996
Work-In-Progress 426,771 453,117 393,078 518,251
Finished Goods 1,245,588 806,023 1,164,362 1,146,691
Total Inventories $ 2,965,220 $ 1,885,395 $ 2,959,732 $ 3,079,938

4.5. BANK FINANCING ACTIVITIES

Bank Line of Credit

On October 4, 2021, the Company entered into a Loan Agreement with Main Street Bank of Marlborough, Massachusetts, which provided for a $2,600,000 Term Loan and a $250,000 Revolving Line of Credit Loan ~~Facility.~~Facility, which was increased to $500,000 effective May 17, 2022. The ~~$250,000~~$500,000 line of credit is due on demand and had ~~zero~~no borrowings outstanding at March 31, ~~2022.~~2023. Borrowings under the line of credit bear interest payable monthly at the prime lending rate plus 1.5% per annum, or 9.50% as of March 31, 2023, and shall not be less than 4.75% per ~~annum~~.annum. Borrowings under the line of credit are limited to the borrowing base comprised of a percentage of eligible accounts receivable and inventory and are secured by all the assets of the Company.

Long-Term Debt

Long-term debt consists of the following at March 31, ~~2022:~~2023:
Schedule of long-term debt
Amount Amount
Term Loan Note payable to Main Street Bank with monthly principal payments of $30,952.38 plus interest at the prime lending rate plus 1.5% per annum. Secured by all assets of the Company, and subject to certain periodic reporting to the bank, an annual minimum debt service coverage ratio of 1.20:1, and other conditions. The Term Loan Note matures on October 15, 2028. $ 2,445,238
Term Loan Note payable to Main Street Bank with monthly principal payments of $30,952 plus interest at the rate of 7.00% as of March 31, 2023 is secured by all assets of the Company, and subject to certain periodic reporting to the bank, an annual minimum EBITDA plus stock based compensation to debt service coverage ratio of 1.20:1 commencing with the fiscal year ending June 30, 2023, and other conditions. The Term Loan Note matures on October 15, 2028. $ 2,073,808

Less current maturities (367,714 ) (371,429 )
Less debt issuance costs, net of accumulated amortization of $1,548 (24,454 )
Less debt issuance costs, net of accumulated amortization of $2,789 (20,737 )
Long-term debt, net of current portion of debt issuance costs $ 2,053,070 $ 1,681,642

At March 31, ~~2022~~2023 principal payments due on the Term Loan Note payable are as follows:
Schedule of future minimum note payable
Schedule of principal payments due term loan note payable
Fiscal Year Ending June 30:
2022 $ 92,857
2023 371,429 $ 92,856
2024 371,429 371,429
2025 371,429 371,429
2026 371,429 371,429
2027 371,429
Thereafter 866,665 495,236

$ 2,445,238
Total long term debt $ 2,073,808

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5.6.
LEASE OBLIGATIONS

In March 2021 the Company entered into a five-year ~~capital~~financing lease in the amount of $161,977 for manufacturing equipment. In January 2020, the Company entered into a five-year ~~capital~~financing lease ~~in the amount of~~for $47,750 for manufacturing equipment. The net book value of fixed assets under ~~capital~~financing lease obligations as of March 31, ~~2022~~2023 is $~~156,640~~114,695.

On July 1, 2019 the Company entered into a three-year operating lease for its facility in El Paso, Texas, and in February 2022 the Company entered into an extension of the lease for an additional three years through June 2025. Remaining minimum lease payments at March 31, ~~2022~~2023 total $~~150,504~~101,928. Total rent expense including base rent and common area expenses was $~~15,705~~15,973 and $~~21,438~~15,705 during the three months ended March 31, 2023 and 2022, respectively.
On October 4, 2021 the Company assumed the remaining term of the Windham, Maine lease as part of the Lighthouse acquisition. The lease expires on July 31, 2025. Remaining minimum lease payments at March 31, 2023 total $321,365. Total rent expense including base rent and ~~2021, respectively.~~ common area expenses was $36,495 during the three months ended March 31, 2023.
Included in the accompanying balance sheet at March 31, ~~2022~~2023 is a right-of-use asset of $~~140,607~~399,007 and current and long-term right-of-use operating lease liabilities of $~~45,405~~166,316 and $~~95,202~~232,691, respectively.

At March 31, ~~2022~~2023 future minimum lease payments under the ~~capital~~financing lease and operating lease obligations are as follows:
Future minimum lease payments
Fiscal Year Ending June 30: Capital Leases Operating Lease Financing Leases Operating Lease
2022 $ 12,155 $ 15,705
2023 48,619 43,828 $ 12,155 $ 45,389
2024 48,619 44,924 48,619 182,652
2025 43,917 46,047 43,917 183,775
2026 28,006 0 28,028 11,477
Total Minimum Payments 181,316 $ 150,504 132,719 $ 423,293
Less: amount representing interest 19,118 10,621
Present value of minimum lease payments 162,198 122,098
Less: current portion 40,102 42,397
$ 122,096 $ 79,701

The Company’s operating leases for its Gardner, Massachusetts office, production and storage spaces plus an equipment lease ~~as well as the Windham, Maine office and production space~~ have expired and are continuing on a month-to-month tenant at will basis. Rent expense on these operating leases was $~~222,112~~150,862 and $~~124,848~~152,078 for the nine months ended March 31, 2023 and 2022, ~~and 2021,~~ respectively.
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6.7. STOCK-BASED COMPENSATION

Stock Options

The following table summarizes stock-based compensation expense for the three and nine months ended March 31, ~~2022~~2023 and ~~2021:~~2022:
Schedule of stock-based compensation expense
Three Months
Ended March 31, Nine Months
Ended March 31, Three Months
Ended March 31, Nine Months
Ended March 31,
2022 2021 2022 2021 2023 2022 2023 2022
Cost of Goods Sold $ 34,712 $ 11,233 $ 91,542 $ 33,699 $ 9,556 $ 34,712 $ 25,410 $ 91,542
Research and Development 70,237 19,435 164,036 55,795 41,140 70,237 122,198 164,036
Selling, General and Administrative 126,166 55,359 466,059 224,758 399,318 126,166 622,182 466,059
Stock Based Compensation Expense $ 231,115 $ 86,027 $ 721,637 $ 314,252 $ 450,014 $ 231,115 $ 769,790 $ 721,637

No compensation has been capitalized because such amounts would have been immaterial.
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The following tables summarize stock option activity for the nine months ended March 31, ~~2022:~~2023:
Schedule of stock option activity
Options Outstanding Options Outstanding
Number of
Shares Weighted Average
Exercise Price Weighted Average
Contractual Life Number of
Shares Weighted Average
Exercise Price Weighted Average
Contractual Life
Outstanding at July 1, 2021 2,578,200 $ 1.13 6.73 years
Outstanding at June 30, 2022 904,626 $ 4.00 7.08 years
Exercised (255,700 ) $ 1.10 (3,000 ) 2.55 –
Granted 584,500 $ 1.74 179,003 6.03 –
Cancelled (89,500 ) $ 0.99 (21,999 ) 5.84 –
Outstanding at March 31, 2022 2,817,500 $ 1.35 7.35 years
Outstanding at March 31, 2023 1,058,630 $ 4.31 6.79 years
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Information related to the stock options outstanding as of March 31, ~~2022~~2023 is as follows:
Schedule of stock options outstanding by exercise price range Schedule of stock options outstanding by exercise price range Schedule of stock options outstanding by exercise price range
Range of
Exercise Prices Range of
Exercise Prices Number of
Shares Weighted-
Average
Remaining
Contractual Life
(years) Weighted-
Average
Exercise Price Exercisable
Number of
Shares Exercisable
Weighted-
Average
Exercise Price Range of
Exercise Prices Number of
Shares Weighted-
Average
Remaining
Contractual Life
(years) Weighted-
Average
Exercise Price Exercisable
Number of
Shares Exercisable
Weighted-
Average
Exercise Price
$ 0.48 60,000 4.00 $ 0.48 60,000 $ 0.48 1.44 20,000 3.00 $ 1.44 20,000 $ 1.44
$ 0.50 80,000 4.22 $ 0.50 80,000 $ 0.50 1.50 26,666 3.22 $ 1.50 26,666 $ 1.50
$ 0.55 15,000 6.01 $ 0.55 15,000 $ 0.55 1.65 5,000 5.01 $ 1.65 5,000 $ 1.65
$ 0.70 100,000 6.35 $ 0.70 100,000 $ 0.70 2.10 33,333 5.35 $ 2.10 33,333 $ 2.10
$ 0.73 670,000 4.81 $ 0.73 670,000 $ 0.73 2.19 208,996 3.92 $ 2.19 208,996 $ 2.19
$ 0.85 6,000 0.76 $ 0.85 6,000 $ 0.85 2.70 12,000 1.19 $ 2.70 12,000 $ 2.70
$ 0.90 36,000 2.19 $ 0.90 36,000 $ 0.90 3.75 15,000 6.97 $ 3.75 15,000 $ 3.75
$ 1.25 45,000 7.97 $ 1.25 30,000 $ 1.25 3.90 146,325 6.20 $ 3.90 146,325 $ 3.90
$ 1.30 441,000 7.20 $ 1.30 291,520 $ 1.30 4.20 23,332 7.64 $ 4.20 23,332 $ 4.20
$ 1.40 70,000 8.64 $ 1.40 70,000 $ 1.40 4.26 33,333 6.45 $ 4.26 33,333 $ 4.26
$ 1.42 100,000 7.45 $ 1.42 66,667 $ 1.42 4.35 1,666 7.94 $ 4.35 1,666 $ 4.35
$ 1.45 5,000 8.94 $ 1.45 1,667 $ 1.45 4.50 23,332 6.69 $ 4.50 23,332 $ 4.50
$ 1.50 70,000 7.69 $ 1.50 70,000 $ 1.50 5.04 179,997 8.18 $ 5.04 179,997 $ 5.04
$ 1.68 540,000 9.18 $ 1.68 270,000 $ 1.68 5.43 10,000 8.51 $ 5.43 10,000 $ 5.43
$ 2.00 140,000 9.36 $ 2.00 0 $ 0 5.61 10,000 9.12 $ 5.61 – $ –
$ 2.09 249,500 9.86 $ 2.09 0 $ 0 5.85 58,336 8.76 $ 5.85 2,780 $ 5.85
$ 2.26 190,000 9.64 $ 2.26 90,000 $ 2.26 5.93 4,000 9.78 $ 5.93 4,000 $ 5.93
$ 1.35 2,817,500 7.35 $ 1.35 1,856,854 $ 1.10 6.00 29,997 7.97 $ 6.00 10,000 $ 6.00
$ 6.26 90,000 9.75 $ 6.26 90,000 $ 6.26
$ 6.27 80,653 8.86 $ 6.27 26,884 $ 6.27
$ 6.78 46,664 8.64 $ 6.78 35,554 $ 6.78
1.44–6.78 1,058,630 6.79 $ 4.31 908,198 $ 4.02

The aggregate intrinsic value of the Company’s in-the-money outstanding and exercisable options as of March 31, ~~2022~~2023 was $~~1,913,350~~2,623,768 and $~~1,689,898~~2,515,877, respectively.

7. ~~SALE OF STOCK IN OCTOBER 2021~~

~~On October 1, 2021, the Company entered into agreements with accredited investors for the sale and purchase of~~ ~~937,500~~ unregistered shares of its common stock, $0.01 par value at a purchase price of $1.60 per share. The Company used the net proceeds from this placement to partially fund the October 4, 2021, acquisition of the operating assets of Lighthouse Imaging, LLC with an effective date of October 4, 2021.

In conjunction with the placement, the Company also entered into a registration rights agreement with the investors, whereby it is obligated to file a registration statement with the Securities and Exchange Commission on or before 120 calendar days after October 4, 2021 to register the resale by the investors of 937,500 shares of its common stock purchased in the placement. The registration statement was filed on January 31, 2022 and became effective on February 11, 2022.
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8. ~~ISSUANCE OF COMMON STOCK IN BUSINESS ACQUISITION~~
~~On October 4, 2021, the Company issued~~ ~~2,500,000~~ ~~unregistered shares of its common stock to the sellers of Lighthouse Imaging, LLC, valued on that date at $1.60~~ ~~per share or $4,000,000, as shown in the accompanying statement of stockholders’ equity for the nine months ended March 31, 2022.~~
In conjunction with the issuance, the Company agreed to use reasonable efforts to effectuate within a reasonable period after the October 4, 2021 business acquisition date a registration statement with the Securities and Exchange Commission to register the resale by the sellers of 2,500,000 shares of its common stock issued in the business acquisition.
9. REVENUE RECOGNITION

Revenues are recognized as the performance obligations to deliver products or services are satisfied and are recorded based on the amount of consideration the Company expects to receive in exchange for satisfying the performance obligations. Most of the Company’s products and services are marketed to medical device companies ~~almost exclusively~~with over 93% of all revenues to customers in the United States. Products and services are primarily transferred to customers at a point in time based upon when services are performed or product is shipped.
~~Revenues represent the amount of consideration the Company expects to receive from customers in exchange for transferring products and services.~~ Other selling costs to obtain and fulfill contracts are expensed as incurred due to the short-term nature of a majority of its ~~revenues.~~contracts. The Company extends terms of payment to its customers based on commercially reasonable terms for the markets of its customers, while also considering their credit quality. Shipping and handling costs charged to customers are included in ~~revenues.~~revenue.
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The Company disaggregates revenues by product and service types as it believes it best depicts how the nature, amount, timing and uncertainty of revenues and cash flows are affected by economic factors. Technology rights revenue represents amounts paid by customers for rights to use the Company’s intellectual property including product designs, patents, and know-how to manufacture and commercialize their products under specified contractual conditions. Revenues are comprised of the following for the three and nine months ended March ~~2022~~31, 2023 and ~~2021:~~2022:
Schedule of disaggregation of revenues
Three Months
Ended March 31, Nine Months
Ended March 31, Three Months
Ended March 31, Nine Months
Ended March 31,
2022 2021 2022 2021 2023 2022 2023 2022
Engineering Design Services $ 1,532,414 $ 549,636 $ 3,659,667 $ 1,986,856 $ 1,400,780 $ 1,532,414 $ 4,745,358 $ 3,659,667
Optical Components 1,927,963 1,456,213 4,873,294 4,330,511 2,609,983 1,927,963 7,842,804 4,873,294
Medical Device Products and Assemblies 1,190,975 452,441 2,351,776 1,684,274 1,037,302 1,190,975 2,832,165 2,351,776
Technology Rights – – 600,000 –
Total Revenues $ 4,651,352 $ 2,458,290 $ 10,884,737 $ 8,001,641 $ 5,048,065 $ 4,651,352 $ 16,020,327 $ 10,884,737
Contract Assets and Liabilities

The nature of the Company’s products and services does not generally give rise to contract assets as it typically does not incur costs to fulfill a contract before a product or service is provided to a customer. The Company’s costs to obtain contracts are typically in the form of sales commissions paid to employees. The Company has elected to expense sales commissions associated with obtaining a contract as incurred as the amortization period is generally less than one year. These costs have been recorded in selling, general and administrative expenses. As of March 31, ~~2022,~~2023, there were no contract assets recorded in the Company’s Consolidated Balance Sheets.

The Company’s contract liabilities arise from unearned revenue received from customers at inception of contracts or where the timing of billing for services precedes satisfaction of our performance obligations. The Company generally satisfies performance obligations within one year from the contract inception date.

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Contract liabilities, which were recorded as customer advances in the Company’s Consolidated Balance Sheets, and unearned revenue are comprised of the following:
Schedule of contract liabilities
Three Months
Ended March 31, Nine Months
Ended March 31, Three Months
Ended March 31, Nine Months
Ended March 31,
2022 2021 2022 2021 2023 2022 2023 2022
Contract Liabilities, Beginning of Period $ 1,137,470 $ 151,877 $ 450,084 $ 417,059 $ 794,981 $ 1,137,470 $ 905,113 $450,084
Assumed in Business Acquisition 0 0 826,679 0 – – – 826,679
Unearned Revenue Received from Customers 774,316 442,681 1,388,700 614,384 1,020,669 774,316 1,917,775 1,388,700
Revenue Recognized (893,511 ) (361,674 ) (1,647,188 ) (798,559 ) (427,844 ) (893,511 ) (1,435,082 ) (1,647,188)
Contract Liabilities, End of Period $ 1,018,275 $ 232,884 $ 1,018,275 $ 232,884 $ 1,387,806 $ 1,018,275 $ 1,387,806 $1,018,275

~~10.~~9. COVID-19 PANDEMIC

The COVID-19 world-wide pandemic that began during the quarter ended March 31, 2020 and the domestic and international impact of policy decisions being made in major countries around the world has had, and could continue to have, an adverse impact on the Company’s sources of supply, current and future orders from its customers, collection of amounts owed to the Company from its customers, its internal operating procedures, and the Company’s overall financial condition. Given the uncertainty surrounding the continuation of economic impacts both domestically and abroad, the Company cannot predict with certainty at this time what the future impact of COVID-19 and resulting business and economic policies in the US and abroad will be on its up-coming quarterly fiscal operating results.

1415

Item 2. ~~Managements~~Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and notes to those statements included elsewhere in this Quarterly Report on Form 10-Q for the quarter ended March 31, ~~2022~~2032 and with our audited consolidated financial statements for the year ended June 30, ~~2021~~2022 included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on September ~~28, 2021.~~27, 2022.

This Quarterly Report on Form 10-Q contains forward-looking statements. When used in this report, the words anticipate, suggest, estimate, plan, project, continue, ongoing, potential, expect, predict, believe, intend, may, will, should, could, would and similar expressions are intended to identify forward-looking statements. You should not place undue reliance on these forward-looking statements. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including the risks described in this report, the risks described in our Annual Report on Form 10-K for the year ended June 30, ~~2021~~2022 and other reports we file with the Securities and Exchange Commission. Although we believe the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are made. We do not intend to update any of the forward-looking statements after the date of this report to conform these statements to actual results or to changes in our expectations, except as required by law.

Overview

We have been a developer and manufacturer of advanced optical instruments since 1982. Our medical instrumentation line includes traditional endoscopes and endocouplers as well as other custom imaging and illumination products for use in minimally invasive surgical procedures. Much of our recent development efforts have been targeted at the development of next generation endoscopes. We selectively execute internal research and development programs to develop next generation capabilities for designing and manufacturing 3D endoscopes and very small Microprecision^TM lenses, anticipating future requirements as the surgical community continues to demand smaller and more enhanced imaging systems for minimally invasive surgery.

As Ross Optical Industries of El Paso, Texas 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 companies. 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 that are applied using our in-house coating department.

As Lighthouse Imaging of Windham, Maine we also operate as a manufacturer of advanced optical imaging systems and accessories. We have a strong 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.

Approximately ~~34%~~30% our business during the nine months ended March 31, ~~2022~~2023 is from engineering services ~~primarily~~(primarily relating to the design of medical device optical ~~assemblies, 45%~~assemblies), 49% from the sale of both internally manufactured and purchased optical components, and ~~21%~~18% from the manufacture of optical assemblies and sub-assemblies ~~primarily~~(primarily for medical device instrument ~~applications.~~applications). Our proprietary medical instrumentation line, unique custom design and manufacturing capabilities, and expert electrical engineering and development ~~has~~services have generated orders for traditional proprietary endoscopes and endocouplers as well as ~~other~~for custom imaging and illumination products for ~~our customers’~~ use in minimally invasive surgical procedures. We design and manufacture 3D endoscopes and very small Microprecision^TM 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.
15

We are registered to the ISO 9001:2015 and ISO 13485:2016 Quality Standards and comply with the FDA Good Manufacturing Practices and the European Union Medical Device Directive for CE marking of our medical products.

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Our internet websites are www.poci.com, www.rossoptical.com, and www.lighthouseoptics.com. Information on our websites is not intended to be integrated into this report. Investors and others should note that we announce material financial information using our company websites (www.poci.com; www.rossoptical.com; www.lighthouseoptics.com), our investor relations website, SEC filings, press releases, public conference calls and webcasts. Information about Precision Optics, our business, and our results of operations may also be announced by social media posts on our Ross Optical and Lighthouse LinkedIn pages (www.linkedin.com/company/ross-optical-industries/) (https://www.linkedin.com/company/lighthouse-imaging-corporation/) and Twitter feed (http://twitter.com/rossoptical) and on our Lighthouse Facebook page (https://www.facebook.com/lighthouseoptics/).

The information that we post on these social media channels could be deemed to be material information. Therefore, we encourage investors, the media, and others interested in Precision Optics to review the information that we post on these social media channels. These social media channels may be updated from time to time on Precision ~~Optics~~Optics’ investor relations website. The information on, or accessible through, our websites and social media channels is not incorporated by reference in this Quarterly Report on Form 10-Q.

The markets in which we do business are highly competitive and include both foreign and domestic competitors. Many of our competitors are larger and have substantially greater resources than we do. Furthermore, other domestic or foreign companies, some with greater financial resources than we have, may seek to produce products or services that compete with ours. We routinely outsource specialized production efforts as required to obtain the most cost-effective production. Over the years we have developed extensive experience collaborating with other optical specialists worldwide.

We believe that our future success depends to a large degree on our ability to develop new optical products and services to enhance the performance characteristics and methods of manufacture of existing products. Accordingly, we expect to continue to seek and obtain product-related design and development contracts with customers and to selectively invest our own funds on research and development, particularly in the areas of Microprecision^TM optics, micro medical cameras, illumination, single-use endoscopes and 3D endoscopes.

Current sales and marketing activities are intended to broaden awareness of the benefits of our new technology platforms and our successful application of these new technologies to medical device projects requiring surgery-grade visualization 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 significant medical device companies as well as well-funded emerging technology companies. We expect our customer pipeline to continue to expand as development projects transition to production orders and new customer projects enter the development phase. ~~Our Ross Optical division markets through existing customers and trade shows, in addition to proactive online marketing strategies executed primarily through its website.~~

General

This management’s discussion and analysis of financial condition and results of operations is based upon our unaudited consolidated financial statements, which have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

There have been no significant changes in our critical accounting policies as disclosed in the Notes to our Financial Statements contained in our Annual Report on Form 10-K for the year ended June 30, ~~2021~~2022 filed with the Securities and Exchange Commission on September ~~28, 2021.~~27, 2022.
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Results of Operations

Our total revenues for the quarter ended March 31, ~~2022,~~2023, were ~~$4,651,352,~~$5,048,065, as compared to ~~$2,458,290~~$4,651,352 for the same period in the prior year, an increase of ~~$2,193,062,~~$396,713, or ~~89.2%~~8.5%, primarily due to an increase in component revenue to a large defense contractor. Other fluctuations in revenue categories were considered customary during the quarter ended March 31, 2023 when compared to the same quarter of the prior fiscal year.
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Our total revenues for the nine months ended March 31, 2023 were $16,020,327, as compared to $10,884,737 for the same period in the prior year, an increase of $5,135,590, or 47.2% due in part to the inclusion of the Lighthouse division since its acquisition on October 4, 2021, increases in component sales in the El Paso and Gardner locations, an increase in ~~medical devise manufacturing revenue. Excluding~~engineering revenues, and one-time technology rights revenue in the ~~effect~~quarter ended December 31, 2022.
Our two largest customers accounted for 13.0% and 8.4% of ~~the Lighthouse acquisition, engineering~~our revenue ~~experienced a slight quarter-over-quarter decrease while production revenue was up 106% and component revenue increased 32% from~~during the quarter ended March 31, ~~2021 to 2022.~~
~~Our total revenues for the nine months ended March 31, 2022 were $10,884,737, as compared to $8,001,641 for the same period in the prior year, an increase~~2023, and 8.0% and 13.1%, respectively, of ~~$2,883,096, or 36.0% primarily due to inclusion of the Lighthouse division since its acquisition on October 4, 2021. Excluding the effect of the Lighthouse acquisition, engineering~~our revenue during the nine months ended March 31, ~~2022 decreased approximately $287,000 compared to~~2023. One of our two largest customers is a defense/aerospace company and the ~~same period of the prior year due primarily to~~other is a ~~change in mix of engineering projects. Component~~medical device company. We generated revenues ~~increased approximately $543,000~~from 318 unique customers during the nine months ended March 31, ~~2022 compared to the same period~~2023, and no other customer represented over 10% of ~~the prior year, and production~~our revenue ~~increased approximately $161,000 over the same period as production on some products began to return to pre-pandemic levels.~~
~~Our largest customer~~ during the three and nine months ended March 31, 2022 accounted for 10.9% and 9.0%, respectively, of our revenue and represented manufacturing assembly revenues for a medical diagnostic system. We generated revenues from 193 unique customers during the nine months ended March 31, 2022, and one single customer accounted for slightly more than 10% or more of our revenue for the quarter and no single customer accounted for 10% or more of our revenue for the nine months ended March 31, 2022 or the fiscal year ended June 30, 2021.2023.

The COVID-19 world-wide pandemic that began during the quarter ended March 31, 2020 and the domestic and international impact of policy decisions being made in major countries around the world has had, and could continue to have, an adverse impact on our sources of supply, current and future orders from our customers, collection of amounts owed to us from our customers, our internal operating procedures, and our overall financial condition. Given the uncertainty surrounding the continuation of economic impacts both domestically and abroad, we cannot predict with certainty at this time what the future impact of COVID-19 and resulting business and economic policies in the US and abroad will be on our up-coming quarterly fiscal operating results.

Gross profit for the quarter ended March 31, ~~2022~~2023 was ~~$1,728,209,~~$1,736,098, compared to ~~$818,024~~$1,728,209 for the same period in the prior year, an increase of ~~$910,185, or 111.3%.~~$7,889. Gross profit for the quarter ended March 31, ~~2022~~2023 as a percentage of our revenues was ~~37.2%~~34.4%, an ~~increase~~decrease from the gross profit percentage of ~~33.3%~~37.2% for the same period in the prior year. Gross profit for the nine months ended March 31, ~~2022~~2023 was ~~$3,486,823,~~$5,975,011 as compared to ~~$2,647,642~~$3,486,823 for the same period in the prior year, an increase of ~~$839,181~~$2,488,188 or ~~31.7%~~71.4%. Gross profit for the nine months ended March 31, ~~2022~~2023 as a percentage of our revenues was ~~32.0%~~37.3%, ~~a decrease~~an increase from the gross profit percentage of ~~33.1%~~32.0% for the same period in the prior year. Quarterly gross profit and gross profit percentage depend on a number of factors, including overall sales volume, facility utilization, product sales mix, the costs of engineering services, and production start-up costs and challenges in connection with new products, the effects of COVID-19 pandemic policy decisions on various economies and our suppliers and customers, as well as the effects on production efficiencies due to the augmented policies we have incorporated into our operations as a result of the COVID-19 pandemic.

Our gross ~~margin~~profit on individual engineering projects is dependent on a number of factors and is expected to fluctuate from quarter to quarter based on the number of new engineering projects, the nature and status of engineering projects, unanticipated cost over-runs, design challenges and changes, start-up production activities, or other customer-imposed project changes or delays. Our increase in gross ~~margin~~profit dollars during ~~the quarter~~nine months ended March 31, ~~2022~~2023 compared to the same periods in the previous years was primarily due to inclusion of the Lighthouse division since its acquisition on October 4, 2021, ~~an increase~~Other fluctuations in ~~medical devise manufacturing revenue,~~gross profit dollars and ~~improved efficiencies~~margins in ~~engineering projects, which is partially offset by inclusion~~the quarter and nine months ended March 31, 2023 when compared to the same periods of the ~~Lighthouse division engineering and production revenues at overall margins lower than~~prior fiscal year are considered customary considering the ~~Ross Optical division revenues. The remainder of our production, engineering and component revenues resulted in margins within our targeted range with reasonably expected fluctuations.~~factors impacting variability as previously described.
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Research and development expenses were ~~$214,898~~$206,375 for the quarter ended March 31, ~~2022,~~2023, compared to ~~$146,063~~$214,898 for the same period in the prior year, a decrease of $8,523, or 4.0%. Research and development expenses were $660,518 for the nine months ended March 31, 2023, compared to $433,248 for the same period in the prior year, an increase of ~~$68,835,~~$227,270, or ~~47.1%. Research and development expenses were $433,248 for the nine months ended March 31, 2022, compared to $443,609 for the same period in the prior year, a decrease of $10,361, or 2.3%~~52.5%. In-house research and development and certain internal functions not directly related to customer engagements are classified as research and development expenses with the majority of our engineering, research and development activities being consumed in revenue generating engagements with our customers for the development of their products. During the ~~quarter and~~ nine months ended March 31, ~~2022 we had an increase in research and development costs due to the inclusion of the Lighthouse division offset by a greater amount of our engineering personnel time consumed in customer focused~~2023 compared to the same periods of the prior ~~fiscal year.~~year we had an increase in personnel, and an increase in research and development costs incurred in the development of internal research and development efforts and projects.

Selling, general and administrative expenses were ~~$1,574,432~~$2,022,991 for the quarter ended March 31, ~~2022,~~2023, compared to ~~$927,979~~$1,574,432 for the same period in the prior year, an increase of ~~$646,453,~~$448,559, or ~~69.7%~~28.4%. Selling, general and administrative expenses were ~~$3,974,824~~$5,338,498 for the nine months ended March 31, ~~2022,~~2023, compared to ~~$2,671,176~~$3,974,824 for the same period in the prior year, an increase of ~~$1,303,648,~~$1,363,674, or ~~48.8%~~34.3%. The increase in selling, general and administrative expense in the three months ended March 31, 2023 compared to the same period of the prior fiscal year was primarily the result of increased compensation due to expanded headcount, incentive bonuses and sales commissions resulting from increased revenues, increased sales conference and show costs, and increased stock based compensation. The increase in selling, general and administrative expenses in the ~~three and~~ nine months ended March 31, ~~2022~~2023 compared to the same periods of the prior fiscal year was primarily due to inclusion of the Lighthouse division since its acquisition onin October, 4, 2021, plus increased ~~stock-based~~ compensation due to expanded headcount, incentive bonuses and ~~marketing related expenses.~~sales commissions resulting from increased revenues, and increased sales conference and show costs.

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Liquidity and Capital Resources

We have sustained recurring net losses from operations for several years. During the quarter ended and nine months ended March 31, 2023 we incurred operating losses of $493,268 and 24,005, respectively. During the years ended June 30, 2022 and 2021 we ~~had a net loss~~incurred operating losses of ~~$1,197,713~~$1,513,890 and ~~used cash in operating activities of $879,967.~~$905,583, respectively. At March 31, ~~2022,~~2023, cash was ~~$831,585,~~$612,095, accounts receivables were ~~$3,347,692~~$4,389,907 and current liabilities were ~~$5,770,887,~~$6,494,885, including ~~$1,018,275~~$1,387,806 of customer advances received for future order deliveries.

Although our revenue and gross margin have increased, ~~due to the acquisition of the Lighthouse division,~~ our operating expenses have also increased, and we continue to experience pricing pressure from our customers and challenges in engineering projects and production orders that can result in cost over-runs and depressed gross margins. We also experience added uncertainty related to our vendors ability to supply materials and our customers future order levels as a result of the economic impact the COVID-19 world-wide pandemic and related jurisdictional policies and regulations and lingering supply-chain issues. Consequently, critical to our ability to maintain our financial condition is achieving and maintaining a level of quarterly revenues that generate break even or better financial performance as well as timely collection of accounts receivable from our customers. We believe profitable operating results can be achieved through a combination of revenue levels, realized gross ~~margins~~profits and controlling operating expense increases, all of which are subject to periodic fluctuations resulting from sales mix and the stage of completion of varying engineering service projects as they progress towards and into production level revenues.

We have traditionally funded working capital needs through product sales, management of working capital components of our business, cash received from public and private offerings of our common stock, warrants to purchase shares of our common stock or convertible notes, manufacturing equipment leases, and by customer advances paid against purchase orders by our customers and recorded in the current liabilities section of the accompanying financial statements. We have incurred year to year and quarter to quarter operating losses during our efforts to develop current products including Microprecision^TM optical elements, micro medical camera assemblies and 3D endoscopes. Our management believes that the opportunities represented by these technical capabilities and related products have the potential to generate sales increases to achieve breakeven and profitable results.

OnIn connection with our October 4, 2021 ~~we acquired the assets~~acquisition of Lighthouse Imaging, ~~LLC as described in note 2. Business Acquisition to the accompanying financial statements in this Form 10-Q. To finance the cash portion of the acquisition price~~ we entered into a $2,600,000 bank term loan, and sold shares of our common stock for gross proceeds of $1,500,000. We also secured a $250,000 bank line of credit from the same bank onin October 4, 2021 for working capital needs, ~~upon~~ which was increased to $500,000 in May 2022. There were no borrowings ~~are~~ outstanding ason the line of ~~December~~credit at March 31, ~~2021.~~2023.
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Capital equipment expenditures and additional patent costs during the nine months ended March 31, ~~2022~~2023 were ~~$82,660.~~$52,411. Future capital equipment and patent expenditures will be dependent upon future sales and success of on-going research and development efforts.

Contractual cash commitments for the fiscal periods subsequent to March 31, ~~2022,~~2023, are summarized as follows:

Fiscal 2022 Thereafter Total
Capital lease for equipment, including interest $ 12,155 $ 171,161 $ 183,316
Minimum operating lease payments - Ross Optical division $ 15,705 $ 134,799 $ 150,504
Fiscal 2023 Thereafter Total
Financing lease for equipment, including interest $ 12,155 $ 120,564 $ 132,719
Minimum operating lease payments $ 45,389 $ 377,904 $ 423,293

We have contractual cash commitments related to open purchase orders as of March 31, ~~2022~~2023 of approximately ~~$1,263,003.~~$2,923,320.

Off-Balance Sheet Arrangements

We currently have no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

As a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this Item.

Item 4. Controls and Procedures.

~~Managements~~Management’s Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and our Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures ~~including~~were not effective as of March 31, 2023, because of a material weakness in our internal controls over financial reporting described below. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, ~~were effective as~~such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.
Material Weakness Identified; Remedial Steps Being Taken
During our review of the results for the fiscal quarter ended March 31, 2023, errors were identified in the Company’s accruals of costs associated with services provided by third-party contractors on certain development projects. Those errors caused an understatement of costs of goods sold for the quarters ended September 30, 2022 and December 31, 2022, for which we have concluded such error is not material to ~~ensure~~those previously reported financial statements. However, because of the significance of these items, and to facilitate comparisons among periods, the Company decided to revise the previously issued first and second quarter unaudited condensed consolidated financial information ~~we are required~~by increasing accounts payable and cost of goods sold by $85,213 and $125,752 in the quarters ended September 30, 2022 and December 31, 2022, respectively. Such quarterly and year to ~~disclose~~date financial statements will be revised in ~~reports that we file or submit under~~subsequent filings with the ~~Securities Exchange Act of 1934, as amended (i) is recorded, processed, summarized, and reported within the time periods specified in~~ Securities and Exchange Commission ~~rules~~that include such statements.
To address and ~~forms,~~remediate the material weakness in internal control over financial reporting described above, we have implemented processes to improve our accounts payable controls and ~~(ii) is accumulated~~documentation for the recognition of costs incurred for services performed by outside contractors and ~~communicated~~matching those costs, when applicable, to fiscal periods in which those services are billed to our ~~management, including~~customers. Specifically, we have implemented procedures to document the receipt of non-physical work product by our outside contractors, accrue for services performed by outside contractors when vendor invoices for such services have not yet been received, and to review billings to customers to ensure related contractor billings are expensed in the same period. Our Chief Executive Officer and our Chief Financial Officer ~~as appropriate~~will monitor such accruals in future quarters to ~~allow timely decisions regarding required disclosure. Our disclosure controls and procedures are intended to be designed to provide reasonable assurance~~confirm that ~~such information is accumulated and communicated to our management. Based on this evaluation, our management concluded~~these steps have properly remediated the material weakness in the timing of third-party expense accruals. We believe that the steps outlined above strengthen our internal control over financial reporting ~~was effective as of March 31, 2022.~~and mitigate the material weakness described above.

Changes in Internal Control over Financial Reporting

~~There was~~Except for the material weakness disclosed above, there has been no change in our internal control over financial reporting that occurred during the ~~second~~ quarter of our fiscal year covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

Our Company, on occasion, may be involved in legal matters arising in the ordinary course of our business. While management believes that such matters are currently insignificant, matters arising in the ordinary course of business for which we are or could become involved in litigation may have a material adverse effect on our business, financial condition or results of operations. We are not aware of any pending or threatened litigation against us or our officers and directors in their capacity as such that could have a material impact on our operations or finances.

Item 1A. Risk Factors.

There have been no material changes from the risk factors previously disclosed in our annual report on Form 10-K for the fiscal year ended June 30, ~~2021,~~2022, as filed with the Securities and Exchange Commission on September ~~28, 2021.~~27, 2022.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

~~We did not issue unregistered securities during the quarter ended March 31, 2022.~~None

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

~~Frequency of Say on Pay~~
As previously reported on Form 8-K, in a non-binding advisory vote on the frequency of future say on pay votes held at the 2022 annual meeting on April 8, 2022, 7,877,182 shares voted for one year, 84,778 shares voted for two years, 41 shares voted for three years, and 5,045 shares abstained. On May 13, 2022, our board of directors has considered the outcome of this advisory vote and has determined, as was recommended with respect to this proposal by our board of directors in the proxy statement for the 2022 annual meeting, that we will hold future say on pay votes on an annual basis until the occurrence of the next advisory vote on the frequency of say on pay votes. The next advisory vote regarding the frequency of say on pay votes is required to occur no later than our 2028 annual meeting of stockholders.
~~Election to Waive Application of Mandatory Staggered Board Provision in Massachusetts General Laws Section 8.06(b)~~
On May 13, 2022, our board elected to be exempt from the provisions of Section 8.06(b) of the Massachusetts General Laws and to declassify the current board. Section 8.06(b) of the Massachusetts General Laws provides that the board of every public Massachusetts corporation shall be staggered by dividing the number of directors into three groups, as nearly equal in number as possible; the term of office of those of the first group, ''Class I Directors'', to continue until the first annual meeting following the date such public corporation becomes subject to this subsection and until their successors are elected and qualified; the term of office of those of the second group, ''Class II Directors'', to continue until the second annual meeting following the date the public corporation becomes subject to this subsection and until their successors are elected and qualified; and the term of office of those of the third group, ''Class III Directors'', to continue until the third annual meeting following the date such public corporation becomes subject to this subsection and until their successors are elected and qualified. Accordingly, and in accordance with our bylaws, prior to the waiver our board was staggered into three classes of directors.Not applicable.

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~~Amendments of the Bylaws~~
~~On May 13, 2022, our board adopted an amendment to our amended and restated bylaws. Previously, our bylaws had not been amended since 2014.~~
~~The material changes to our bylaws comprise the following:~~
- ~~Annual meeting of stockholders~~
~~We made several clarifying changes, such as specifying that a majority of the board can call special meetings of stockholders and that such meetings can be postponed or rescheduled by the board.~~
Under the new bylaws, notice of meetings of stockholders must now be given at least ten days nor more than 60 days before the meeting, instead of at least seven days before the meeting. The notice may now also explicitly be given by electronic means. If the stockholders meeting is rescheduled or adjourned, the new bylaws clarify that no new notice need be given, unless the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting. The new bylaws state, that if a quorum initially is present at any meeting of stockholders, the stockholders may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum, but if quorum is not present at least initially, no business other than the adjournment may be transacted.
We added a provision that a stockholder may revoke any proxy that is not irrevocable by attending the meeting and voting in person, by filing with the secretary an instrument in writing revoking the proxy or by granting another duly executed proxy bearing a later date.
~~We also added a new provision giving the board or the presiding officer at the meeting the power to appoint an inspector of election.~~
Further, we added a new provision regarding stockholder proposals and nominations, specifically who can make such proposals, what information must be submitted, when and where to direct such proposals.
- ~~Board of Directors~~
Regarding the composition of the board, we dropped the maximum number of seats on the board leaving the decision up to the board. Further, the power to decrease or increase the board and to fill vacancies now rests solely with the board and not with the shareholders or the board alternatively. We further decided to declassify the board and have all directors stand for election at each annual meeting of stockholders. Notices for board meeting can now be transmitted electronically instead of by telegram. In addition, we added a provision to clarify that the board has the power to fix its remuneration, which may include reimbursement of expenses, salaries or attendance fees and can comprise cash or equity. The new bylaws also explicitly authorize us to purchase and maintain D&O insurance.
- ~~Officers~~
We updated the outdated terms of clerk and assistant clerk to secretary and assistant secretary, respectively. Further, we specified that the board has the power to elect the officers from time to time and deleted the dated reference to the incorporators or an election after each annual meeting. Thus, the tenure of each officers extends until the board has chosen, elected and qualified a successor.
- ~~Shares~~
Regarding stock certificates, the new bylaws state that shares may be uncertificated or represented by certificate, as before, and removed the entitlement for stockholders to request certificates. Further, in order to replace lost, destroyed or stolen certificates, the bylaws specify that we may now request documentation, indemnification or security to protect against claims.
- ~~Amendments of the Bylaws~~
~~The new bylaws removed the prohibition that the directors may not provide for indemnification of the board or amend the section on amendments to the bylaws.~~

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Item 6. Exhibits.

Exhibit Description

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

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

3.2 Bylaws of Precision Optics Corporation, Inc. (included as Exhibit 3.2 to the Form S-1 filed December 18, 2008, and incorporated herein by reference).

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

3.4 Amended and Restated Bylaws of Precision Optics Corporation, Inc. (included as Exhibit 3.1 to the Current Report on Form 8-K filed July 11, 2014, and incorporated herein by reference).

3.5*3.5
Amendment to the Amended and Restated Bylaws of Precision Optics Corporation, Inc. effective May 13, ~~2022.~~2022 (included as exhibit 3.5 to the Form 10-Q filed May 16, 2022, and incorporated herein by reference).
3.6 Articles of Amendment to the Articles of Organization of Precision Optics Corporation, Inc., dated October 24, 2022; and Articles of Amendment to the Articles of Organization of Precision Optics Corporation, Inc., dated October 26, 2022 (included as Exhibit 3.1 to the Form 8-K filed November 2, 2022, and incorporated herein by reference).
3.7 Articles of Amendment to the Articles of Organization of Precision Optics Corporation, Inc., dated October 27, 2022 (included as Exhibit 3.2 to the Form 8-K filed November 2, 2022, and incorporated herein by reference).

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

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

10.3 Compensation Agreement, by and among Precision Optics Corporation, Inc. and Joseph N. Forkey, dated August 2, 2018 (included as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 3, 2018, and incorporated herein by reference).

~~10.4+~~10.4†+ Asset Purchase Agreement dated July 1, 2019, between Precision Optics Corporation, Inc. and Ross Optical Industries, Inc. and the shareholders (included as Exhibit 10.1 to the Form 8-K filed on July 8, 2019, and incorporated herein by reference).

10.5 Form of Purchase Agreement, by and among Precision Optics Corporation, Inc. and several Investors, dated July 1, 2019 (included as Exhibit 10.2 to the Form 8-K filed on July 8, 2019, and incorporated herein by reference).

10.6 Form of Registration Rights Agreement, by and among Precision Optics Corporation, Inc. and several Investors, dated July 1, 2019 (included as Exhibit 10.3 to the Form 8-K filed on July 8, 2019, and incorporated herein by reference).
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10.7 Employment Agreement, by and among Precision Optics Corporation. Inc. and Divaker Mangadu, dated July 1, 2019 (included as Exhibit 10.4 to the Form 8-K filed on July 8, 2019, and incorporated herein by reference).
22
~~10.8~~10.8† Employment agreement, by and among Precision Optics Corporation, Inc. and Jeff DiRubio, dated April 26, 2019 (included as Exhibit 10.16 to the annual report on Form 10-K filed on September 26, 2019, and incorporated herein by reference).

10.9+ Lease Agreement, by and among Precision Optics Corporation, Inc. and Texzona Industries Ltd. dated July 1, 2019 (included as Exhibit 10.17 to the annual report on Form 10-K filed on September 26, 2019, and incorporated herein by reference).

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

10.11 Form of Securities Purchase Agreement, by and among Precision Optics Corporation, Inc. and several Investors, dated April 14, 2020 (included as Exhibit 10.1 to the current report on Form 8-K filed on May 7, 2020, and incorporated herein by reference).

10.12 Form of Registration Rights Agreement, by and among Precision Optics Corporation, Inc. and several Investors, dated April 14, 2020 (included as Exhibit 10.2 to the current report on Form 8-K filed on May 7, 2020, and incorporated herein by reference).

~~10.13+~~10.13†+ Asset Purchase Agreement, dated October 4, 2021, by and among Precision Optics Corporation, Inc. and Lighthouse Imaging, LLC and Anania & Associates Investment Company, LLC (included as Exhibit 10.1 to the current report on Form 8-K filed on October 8, 2021, and incorporated herein by reference).

10.14 Form of Securities Purchase Agreement, by and among Precision Optics Corporation, Inc. and several Investors, dated October 4, 2021 (included as Exhibit 10.2 to the current report on Form 8-K filed on October 8, 2021, and incorporated herein by reference).

10.15 Form of Registration Rights Agreement, by and among Precision Optics Corporation, Inc. and several Investors, dated October 4, 2021 (included as Exhibit 10.3 to the current report on Form 8-K filed on October 8, 2021, and incorporated herein by reference).

10.16+ Loan Agreement dated October 4, 2021, by and among Precision Optics Corporation, Inc. and Main Street Bank (included as Exhibit 10.4 to the current report on Form 8-K filed on October 8, 2021, and incorporated herein by reference).

10.17 $250,000 Revolving Line of Credit Note dated October 4, 2021 (included as Exhibit 10.5 to the current report on Form 8-K filed on October 8, 2021, and incorporated herein by reference)..

10.18 $2,600,000 Term Loan Note dated October 4, 2021 (included as Exhibit 10.6 to the current report on Form 8-K filed on October 8, 2021, and incorporated herein by reference).

10.19 Security Agreement dated October 4, 2021, by and among Precision Optics Corporation, Inc. and Main Street Bank (included as Exhibit 10.7 to the current report on Form 8-K filed on October 8, 2021, and incorporated herein by reference).

10.20 Director side letter agreement dated October 4, 2021 (included as Exhibit 10.8 to the current report on Form 8-K filed on October 8, 2021, and incorporated herein by reference).

10.21 Precision Optics Corporation, Inc. 2022 Equity Incentive Plan (included as Appendix B to the ~~Proxy Statement~~proxy statement on Form ~~DEF-14A~~DEF14A filed on February 24, 2022, and incorporated herein by reference).
23
10.22
Employment offer letter dated January 5, 2023 between Precision Optics Corporation, Inc. and Daniel S. Habhegger (included as Exhibit 10.1 to the current report on Form 8-K filed on January 5, 2023, and incorporated herein by reference).
10.23
Employment offer letter dated January 5, 2023 between Precision Optics Corporation, Inc. and E. Kevin Dahill (included as Exhibit 10.2 to the current report on Form 8-K filed on January 5, 2023, and incorporated herein by reference).

14.1 Precision Optics Corporation, Inc. Corporate Code of Ethics and Conduct (included as Exhibit 14.1 to the Form 10-K filed September 28, 2008, and incorporated herein by reference).
23
21.1 Subsidiaries of the Registrant (included as Exhibit 21.1 to the Form 10-K filed September 26, 2008, and incorporated herein by reference).
31.1* Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2* Certification of the ~~Chief~~Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1* Certification of Officers pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

~~101.INS~~101.INS* Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
~~101.SCH~~101.SCH* Inline XBRL Taxonomy Extension Schema Document
~~101.CAL~~101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document
~~101.DEF~~101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document
~~101.LAB~~101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document
~~101.PRE~~101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document
~~104~~104*
Cover Page Interactive Data File ~~(formatted in iXBRL, and included in exhibit 101).~~(embedded within the Inline XBRL document)

* Filed ~~herewith.~~Herewith.
† Certain portions of the agreement have been omitted to preserve the confidentiality of such information. The Company will furnish copies of any such information to the SEC upon request.
+ The schedules to agreement have been omitted from this filing pursuant to Item 601(a)(5) of Regulation S-K.  The Company will furnish copies of any such schedules to the SEC upon request.

Copies of above exhibits not contained herein are available to any stockholder, upon written request to: Chief Financial Officer, Precision Optics Corporation, Inc., 22 East Broadway, Gardner, MA 01440.

24

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

PRECISION OPTICS CORPORATION, INC.

Date: May ~~16, 2022~~15, 2023 By: /s/ Joseph N. Forkey
Joseph N. Forkey

Chief Executive Officer
(Principal Executive Officer)

Date: May ~~16, 2022~~15, 2023 By: /s/ ~~Daniel S. Habhegger~~
~~Daniel S. Habhegger~~E. Kevin Dahill

E. Kevin Dahill
Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)

25


	March 31, 2022			June 30, 2021
ASSETS
Current Assets:
Cash and cash equivalents	$	831,585		$	861,650
Accounts receivable, net of allowance for doubtful accounts of $253,633 at March 31, 2022 and $251,383 at June 30, 2021		3,347,692			1,878,755
Inventories		2,965,220			1,885,395
Prepaid expenses		318,551			150,635
Total current assets		7,463,048			4,776,435

Fixed Assets:
Machinery and equipment		3,196,585			3,084,511
Leasehold improvements		812,283			792,723
Furniture and fixtures		216,810			178,640
Total Fixed Assets		4,225,678			4,055,874
Less: Accumulated depreciation and amortization		3,599,491			3,461,622
Net fixed assets		626,187			594,252

Operating lease right-to-use asset		140,607			61,247
Patents, net		212,952			141,702
Goodwill		8,824,210			687,664

TOTAL ASSETS	$	17,267,004		$	6,261,300

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Current portion of capital lease obligation	$	40,102		$	38,347
Current maturities of long-term debt		367,714			0
Current portion of acquisition earn out liability		898,855			166,667
Accounts payable		2,538,040			1,205,149
Customer advances		1,018,275			450,084
Accrued compensation and other		862,496			589,616
Operating lease liability		45,405			61,247
Total current liabilities		5,770,887			2,511,110

Capital lease obligation, net of current portion		122,096			152,397
Long-term debt, net of current maturities		2,053,070			0
Acquisition earn out liability, net of current portion		697,408			166,666
Operating lease liability, net of current portion		95,202			0

Stockholders’ Equity:
Common stock, $0.01 par value: 50,000,000 shares authorized; issued and outstanding 16,887,840 shares at March 31, 2022 and 13,282,476 at June 30, 2021		168,878			132,825
Additional paid-in capital		56,723,154			50,464,280
Accumulated deficit		(48,363,691	)		(47,165,978	)
Total stockholders’ equity		8,528,341			3,431,127

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	17,267,004		$	6,261,300


	March 31,			June 30,
	2023			2022
ASSETS
Current Assets:
Cash and cash equivalents	$	612,095		$	605,749
Accounts receivable, net of allowance for doubtful accounts of $74,593 at March 31, 2023 and $44,135 at June 30, 2022		4,389,907			2,663,872
Inventories		2,959,732			3,079,938
Prepaid expenses		307,663			213,448
Total current assets		8,269,397			6,563,007

Fixed Assets:
Machinery and equipment		3,225,483			3,215,412
Leasehold improvements		794,894			786,112
Furniture and fixtures		233,547			219,999
Total fixed assets		4,253,924			4,221,523
Less—Accumulated depreciation and amortization		3,809,303			3,651,843
Net fixed assets		444,621			569,680

Operating lease right-to-use asset		399,007			517,725
Patents, net		249,408			229,398
Goodwill		8,824,210			8,824,210

TOTAL ASSETS	$	18,186,643		$	16,704,020

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Current portion of financing lease obligation	$	42,397		$	40,705
Current maturities of long-term debt		371,429			367,714
Current portion of acquisition earn out liabilities		571,838			166,667
Accounts payable		2,649,248			2,239,175
Contract liabilities		1,387,806			905,113
Accrued compensation and other		1,305,678			716,702
Operating lease liability		166,316			150,565
Total current liabilities		6,494,712			4,586,641

Financing lease obligation, net of current portion		79,701			111,691
Long-term debt, net of current maturities and debt issuance costs		1,681,642			1,961,141
Acquisition earn out liability, net of current portion		–			705,892
Operating lease liability, net of current portion		232,691			367,160

Stockholders’ Equity:
Common stock, $0.01 par value: 50,000,000 shares authorized; issued and outstanding – 5,640,995 shares at March 31, 2023 and 5,638,302 June 30, 2022		56,410			56,383
Additional paid-in capital		57,784,369			57,009,506
Accumulated deficit		(48,142,882	)		(48,094,394	)
Total stockholders’ equity		9,697,897			8,971,495

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	18,186,643		$	16,704,020


	Three Months Ended March 31,						Nine Months Ended March 31,						Three Months Ended March 31,						Nine Months Ended March 31,
	2022			2021			2022			2021			2023			2022			2023			2022
Revenues	$	4,651,352		$	2,458,290		$	10,884,737		$	8,001,641		$	5,048,065		$	4,651,352		$	16,020,327		$	10,884,737

Cost of goods sold		2,923,143			1,640,266			7,397,914			5,353,999			3,311,967			2,923,143			10,045,316			7,397,914
Gross profit		1,728,209			818,024			3,486,823			2,647,642			1,736,098			1,728,209			5,975,011			3,486,823

Research and development expenses, net		214,898			146,063			433,248			443,609			206,375			214,898			660,518			433,248
Selling, general and administrative expenses		1,574,432			927,979			3,974,824			2,671,176			2,022,991			1,574,432			5,338,498			3,974,824
Business acquisition expenses		0			0			172,174			0			–			–			–			172,174
Total operating expenses		1,789,330			1,074,042			4,580,246			3,114,785			2,229,366			1,789,330			5,999,016			4,580,246

Operating loss		(61,121	)		(256,018	)		(1,093,423	)		(467,143	)
Operating income (loss)														(493,268	)		(61,121	)		(24,005	)		(1,093,423	)

Other income (expense)
Interest expense		(52,778	)		(666	)		(104,290	)		(2,202	)		(48,124	)		(52,778	)		(167,443	)		(104,290	)
Gain on forgiveness of bank note		0			808,962			0			808,962
Gain on revaluation of contingent earn-out liability														142,960			–			142,960			–

Net income (loss)	$	(113,899	)	$	552,278		$	(1,197,713	)	$	339,617		$	(398,432	)	$	(113,899	)	$	(48,488	)	$	(1,197,713	)

Income (loss) per share:
Basic	$	(0.01	)	$	0.04		$	(0.08	)	$	0.03
Fully diluted	$	(0.01	)	$	0.04		$	(0.08	)	$	0.02
Basic and fully diluted													$	(0.07	)	$	(0.02	)	$	(0.01	)	$	(0.23	)

Weighted average common shares outstanding:
Basic		16,803,040			13,243,595			15,545,869			13,208,805
Fully diluted		16,803,040			14,068,459			15,545,869			13,841,700
Basic and fully diluted														5,640,473			5,600,953			5,639,015			5,181,896


	Nine Month Period Ended March 31, 2022
	Number of Shares		Common Stock		Additional Paid-in Capital			Common Stock Subscribed			Accumulated Deficit			Total Stockholders’ Equity

Balance, July 1, 2021		13,282,476	$	132,825	$	50,464,280		$	–		$	(47,165,978	)	$	3,431,127
Stock-based compensation		–		–		160,071			–			–			160,071
Proceeds from private placement of common stock subscribed, net of estimated issuance costs of $10,000		–		–		(10,000	)		1,030,000			–			1,020,000
Net loss		–		–		–			–			(576,801	)		(576,801	)
Balance, September 30, 2021		13,282,476		132,825		50,614,351			1,030,000			(47,742,779	)		4,034,397
Stock-based compensation		–		–		330,451			–			–			330,451
Proceeds from private placement of common stock		937,500		9,375		1,490,625			(1,030,000	)		–			470,000
Issuance of common stock in business acquisition		2,500,000		25,000		4,800,000			–			–			4,825,000
Proceeds from exercise of stock option		15,000		150		16,500			–			–			16,650
Exercise of stock options net of 1,435 shares withheld		2,625		26		(26	)		–			–			–
Issuance of common stock for employee services		9,095		91		19,909			–			–			20,000
Net loss		–		–		–			–			(507,013	)		(507,013	)
Balance, December 31, 2021		16,746,696		167,467		57,271,810			0			(48,249,792	)		9,189,485
Correction of error in valuation of stock issued in business acquisition		–		–		(825,000	)		–			–			(825,000	)
Stock-based compensation		–		–		231,115			–			–			231,115
Proceeds from exercise of stock options		43,200		432		46,208			–			–			46,640
Exercise of stock options net of 96,056 shares withheld		97,944		979		(979	)		–			–			–
Net loss		–		–		–			–			(113,899	)		(113,899	)
Balance, March 31, 2022		16,887,840	$	168,878	$	56,723,154		$	0		$	(48,363,691	)	$	8,528,341

	Nine Month Period Ended March 31, 2021
	Number of Shares		Common Stock		Additional Paid-in Capital		Common Stock Subscribed		Accumulated Deficit			Total Stockholders’ Equity

Balance, July 1, 2020		13,191,789	$	131,918	$	49,702,986	$	0	$	(47,063,143	)	$	2,771,761
Stock-based compensation		–		–		71,146		–		–			71,146
Net income		–		–		–		–		793			793
Balance, September 30, 2020		13,191,789		131,918		49,774,132		0		(47,062,350	)		2,843,700
Stock-based compensation		–		–		157,079		–		–			157,079
Net loss		–		–		–		–		(213,454	)		(213,454	)
Balance, December 31, 2020		13,191,789		131,918		49,931,211		0		(47,275,804	)		2,787,325
Stock-based compensation		–		–		86,027		–		–			86,027
Proceeds from exercise of stock options		72,000		720		27,551		–		–			28,271
Net income		–		–		–		–		552,278			552,278
Balance, March 31, 2021		13,263,789	$	132,638	$	50,044,789	$	0	$	(46,723,526	)	$	3,453,901


			Nine Month Period Ended March 31, 2023
	Number of Shares		Common Stock		Additional Paid-in Capital			Common Stock Subscribed			Accumulated Deficit			Total Stockholders’ Equity
Balance, July 1, 2022		5,638,302	$	56,383	$	57,009,506		$	–		$	(48,094,394	)	$	8,971,495
Stock-based compensation		–		–		74,990			–			–			74,990
Net loss		–		–		–			–			(158,724	)		(158,724	)
Balance, September 30, 2022		5,638,302		56,383		57,084,496			–			(48,253,118	)		8,887,761
Stock-based compensation		–		–		244,786			–			–			244,786
Net Income		–		–		–			–			508,668			508,668
Balance, December 31, 2022		5,638,302		56,383		57,329,282			–			(47,744,450	)		9,641,215
Stock-based compensation		–		–		450,014			–			–			450,014
Proceeds from exercise of stock option		2,000		20		5,080			–			–			5,100
Exercise of stock options net of 307 shares withheld		693		7		(7	)		–			–			–
Net loss		–		–		–			–			(398,432	)		(398,432	)
Balance, March 31, 2023		5,640,995	$	56,410	$	57,784,369		$	–		$	(48,142,882	)	$	9,697,897

			Nine Month Period Ended March 31, 2022
	Number of Shares		Common Stock		Additional Paid-in Capital			Common Stock Subscribed			Accumulated Deficit			Total Stockholders’ Equity
Balance, July 1, 2021		4,427,432	$	44,274	$	50,552,831		$	–		$	(47,165,978	)	$	3,431,127
Stock-based compensation		–		–		160,071			–			–			160,071
Proceeds from private placement of common stock subscribed, net of estimated issuance costs of $10,000		–		–		(10,000	)		1,030,000			–			1,020,000
Net loss		–		–		–			–			(576,801	)		(576,801	)
Balance, September 30, 2021		4,427,432		44,274		50,702,902			1,030,000			(47,742,779	)		4,034,397
Stock-based compensation		–		–		330,451			–			–			330,451
Proceeds from private placement of common stock		312,500		3,125		1,496,875			(1,030,000	)		–			470,000
Issuance of common stock in business acquisition		833,333		8,333		4,816,667			–			–			4,825,000
Proceeds from exercise of stock option		5,000		50		16,600			–			–			16,650
Exercise of stock options net of 478 shares withheld		875		9		(9	)		–			–			–
Issuance of common stock for employee services		3,031		30		19,970			–			–			20,000
Net loss		–		–		–			–			(507,013	)		(507,013	)
Balance, December 31, 2021		5,582,171		55,821		57,383,456			–			(48,249,792	)		9,189,485
Correction of error in valuation of stock issued in business acquisition		–		–		(825,000	)		–			–			(825,000	)
Stock-based compensation		–		–		231,115			–			–			231,115
Proceeds from exercise of stock options		14,400		144		46,496			–			–			46,640
Exercise of stock options net of 32,018 shares withheld		32,648		327		(327	)		–			–			–
Net loss		–		–		–			–			(113,899	)		(113,899	)
Balance, March 31, 2022		5,629,219	$	56,292	$	56,835,740		$	–		$	(48,363,691	)	$	8,528,341


	Nine Months Ended March 31,						Nine Months Ended March 31,
	2022			2021			2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(1,197,713	)	$	339,617
Net Loss							$	(48,488	)	$	(1,197,713	)
Adjustments to Reconcile Net Loss to Net Cash Used In Operating Activities -
Gain on revaluation of contingent earn-out liability								(142,960	)		–
Depreciation and amortization		137,869			104,379			157,460			173,887
Stock-based compensation expense		741,637			314,252			769,790			741,637
Gain on forgiveness of bank note		0			(808,962	)
Non-cash interest expense								8,906			–
Changes in Operating Assets and Liabilities, net of effects of business acquisition -
Non-cash interest expense		36,018			0
Accounts receivable, net		(791,959	)		(52,344	)		(1,726,035	)		(791,959	)
Inventories, net		(623,817	)		247,963			120,206			(623,817	)
Due from related party		84,210			0			–			84,210
Prepaid expenses		(85,791	)		1,551			(94,215	)		(85,791	)
Accounts payable		1,118,149			(41,394	)		410,073			1,118,149
Customer advances		(258,487	)		(184,175	)		482,693			(258,487	)
Accrued compensation and other		(40,083	)		3,693			588,976			(40,083	)
Net Cash Used In Operating Activities		(879,967	)		(75,420	)
Net Cash Provided By (Used In) Operating Activities								526,406			(879,967	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Additional patent costs		(23,098	)		(40,307	)		(20,010	)		(23,098	)
Purchases of property and equipment		(59,562	)		(49,160	)
Acquisition of businesses		(421,729	)		(166,667	)
Purchases of fixed assets								(32,401	)		(59,562	)
Acquisition of business								–			(421,729	)
Net Cash Used In Investing Activities		(504,389	)		(256,134	)		(52,411	)		(504,389	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of capital lease obligations		(28,546	)		(49,569	)
Payment of financing lease obligation								(30,298	)		(28,546	)
Payments of long-term debt		(154,453	)		0			(275,784	)		(154,453	)
Payment of debt issuance costs		(26,000	)		0			–			(26,000	)
Payment of acquisition earn-out liability								(166,667	)		–
Gross proceeds from private placement of common stock		1,500,000			0			–			1,500,000
Gross proceeds from exercise of stock options		63,290			28,271			5,100			63,290
Net Cash Provided By (Used in) Financing Activities		1,354,291			(21,298	)
Net Cash (Used In) Provided By Financing Activities								(467,649	)		1,354,291

NET DECREASE IN CASH AND CASH EQUIVALENTS		(30,065	)		(352,852	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS								6,346			(30,065	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		861,650			1,134,697			605,749			861,650

CASH AND CASH EQUIVALENTS, END OF PERIOD	$	831,585		$	781,845		$	612,095		$	831,585

SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
Offering costs included in accrued compensation and other	$	10,000		$	0		$	–		$	10,000
Issuance of common stock for services							$	–		$	–
Acquisition of business financed with long-term debt	$	2,600,000		$	0		$	–		$	2,600,000
Acquisition of Manufacturing Equipment Under Capital Lease	$	0		$	161,977

Schedule of earnings per share
	Three Months Ended March 31,					Nine Months Ended March 31,					Three Months Ended March 31,						Nine Months Ended March 31,
	2022			2021		2022			2021		2023			2022			2023			2022
Net Income (Loss) - Basic and Diluted	$	(113,899	)	$	552,278	$	(1,197,713	)	$	339,617	$	(398,432	)	$	(113,899	)	$	(48,488	)	$	(1,197,713	)

Weighted Average Shares Outstanding
Basic		16,803,040			13,243,595		15,545,869			13,208,805
Fully Diluted		16,803,040			14,068,459		15,545,869			13,841,700
Basic and Fully Diluted												5,640,473			5,600,953			5,639,015			5,181,896

Income (Loss) Per Share
Basic	$	(0.01	)	$	0.04	$	(0.08	)	$	0.03
Fully Diluted	$	(0.01	)	$	0.04	$	(0.08	)	$	0.02
Basic and Fully Diluted											$	(0.07	)	$	(0.02	)	$	(0.01	)	$	(0.23	)

Schedule of error corrections	Quarter Ended September 30, 2022
	As Previously Reported			Adjustment(1)			As Revised
Revenues	$	5,085,301		$	–		$	5,085,301
Cost of goods sold		3,360,647			85,213			3,445,860
Gross Profit		1,724,654			(85,213	)		1,639,441
Operating loss		(16,589	)		(85,213	)		(101,802	)
Net loss		(73,511	)		(85,213	)		(158,724	)
Net loss per share, basic and fully diluted		(0.01	)		(0.02	)		(0.03	)

	Quarter Ended December 31, 2022
	As Previously Reported		Adjustment(1)			As Revised
Revenues	$	5,886,961	$	–		$	5,886,961
Cost of goods sold		3,161,737		125,752			3,287,489
Gross Profit		2,725,224		(125,752	)		2,599,472
Operating income		696,817		(125,752	)		571,065
Net income		634,420		(125,752	)		508,668
Net income per share, basic		0.11		(0.02	)		0.09
Net income per share, fully diluted		0.11		(0.02	)		0.09

Schedule of acquired assets, contingent consideration and assumed liabilities
At Acquisition Effective Date October 4, 2021	Amount
Trade accounts receivable, net	$	676,977
Inventories		456,008
Other current assets		82,125
Fixed assets		110,243
Patents		48,153
Total Assets Acquired		1,373,506

Accounts payable		214,742
Customer advances		826,679
Accrued compensation and other		302,961
Total Liabilities Assumed		1,344,382
Net assets acquired		29,124
Goodwill		8,136,546
Total Purchase Price-Initial and Contingent Consideration	$	8,165,670

Schedule of consolidated pro forma results
	Three Months Ended March 31,						Nine Months Ended March 31,
	2022			2021			2022			2021
	(Actual)			(Pro Forma)			(Pro Forma)			(Pro Forma)
Revenues	$	4,651,352		$	3,600,498		$	12,329,074		$	11,597,530
Net income (loss)		(113,899	)		593,668			(1,140,418	)		382,681
Net income (loss) per share
Basic	$	(0.01	)	$	(0.04	)	$	(0.07	)	$	(0.02	)
Fully diluted	$	(0.01	)	$	(0.03	)	$	(0.07	)	$	(0.02	)

Schedule of inventory
	March 31, 2022		June 30, 2021		March 31, 2023		June 30, 2022
Raw Materials	$	1,292,861	$	626,255	$	1,402,292	$	1,414,996
Work-In-Progress		426,771		453,117		393,078		518,251
Finished Goods		1,245,588		806,023		1,164,362		1,146,691
Total Inventories	$	2,965,220	$	1,885,395	$	2,959,732	$	3,079,938

Schedule of long-term debt
	Amount			Amount
Term Loan Note payable to Main Street Bank with monthly principal payments of $30,952.38 plus interest at the prime lending rate plus 1.5% per annum. Secured by all assets of the Company, and subject to certain periodic reporting to the bank, an annual minimum debt service coverage ratio of 1.20:1, and other conditions. The Term Loan Note matures on October 15, 2028.	$	2,445,238
Term Loan Note payable to Main Street Bank with monthly principal payments of $30,952 plus interest at the rate of 7.00% as of March 31, 2023 is secured by all assets of the Company, and subject to certain periodic reporting to the bank, an annual minimum EBITDA plus stock based compensation to debt service coverage ratio of 1.20:1 commencing with the fiscal year ending June 30, 2023, and other conditions. The Term Loan Note matures on October 15, 2028.				$	2,073,808

Less current maturities		(367,714	)		(371,429	)
Less debt issuance costs, net of accumulated amortization of $1,548		(24,454	)
Less debt issuance costs, net of accumulated amortization of $2,789					(20,737	)
Long-term debt, net of current portion of debt issuance costs	$	2,053,070		$	1,681,642

Schedule of future minimum note payable
Schedule of principal payments due term loan note payable
Fiscal Year Ending June 30:
2022	$	92,857
2023		371,429	$	92,856
2024		371,429		371,429
2025		371,429		371,429
2026		371,429		371,429
2027				371,429
Thereafter		866,665		495,236

	$	2,445,238
Total long term debt			$	2,073,808

Future minimum lease payments
Fiscal Year Ending June 30:	Capital Leases		Operating Lease		Financing Leases		Operating Lease
2022	$	12,155	$	15,705
2023		48,619		43,828	$	12,155	$	45,389
2024		48,619		44,924		48,619		182,652
2025		43,917		46,047		43,917		183,775
2026		28,006		0		28,028		11,477
Total Minimum Payments		181,316	$	150,504		132,719	$	423,293
Less: amount representing interest		19,118				10,621
Present value of minimum lease payments		162,198				122,098
Less: current portion		40,102				42,397
	$	122,096			$	79,701

Schedule of stock-based compensation expense
	Three Months Ended March 31,				Nine Months Ended March 31,				Three Months Ended March 31,				Nine Months Ended March 31,
	2022		2021		2022		2021		2023		2022		2023		2022
Cost of Goods Sold	$	34,712	$	11,233	$	91,542	$	33,699	$	9,556	$	34,712	$	25,410	$	91,542
Research and Development		70,237		19,435		164,036		55,795		41,140		70,237		122,198		164,036
Selling, General and Administrative		126,166		55,359		466,059		224,758		399,318		126,166		622,182		466,059
Stock Based Compensation Expense	$	231,115	$	86,027	$	721,637	$	314,252	$	450,014	$	231,115	$	769,790	$	721,637

Schedule of stock option activity
	Options Outstanding					Options Outstanding
	Number of Shares			Weighted Average Exercise Price	Weighted Average Contractual Life	Number of Shares			Weighted Average Exercise Price	Weighted Average Contractual Life
Outstanding at July 1, 2021	2,578,200		$	1.13	6.73 years
Outstanding at June 30, 2022						904,626		$	4.00	7.08 years
Exercised	(255,700	)	$	1.10		(3,000	)		2.55	–
Granted	584,500		$	1.74		179,003			6.03	–
Cancelled	(89,500	)	$	0.99		(21,999	)		5.84	–
Outstanding at March 31, 2022	2,817,500		$	1.35	7.35 years
Outstanding at March 31, 2023						1,058,630		$	4.31	6.79 years

Schedule of stock options outstanding by exercise price range	Schedule of stock options outstanding by exercise price range											Schedule of stock options outstanding by exercise price range
Range of Exercise Prices	Range of Exercise Prices	Number of Shares		Weighted- Average Remaining Contractual Life (years)		Weighted- Average Exercise Price		Exercisable Number of Shares		Exercisable Weighted- Average Exercise Price		Range of Exercise Prices	Number of Shares		Weighted- Average Remaining Contractual Life (years)		Weighted- Average Exercise Price		Exercisable Number of Shares		Exercisable Weighted- Average Exercise Price
$	0.48		60,000		4.00	$	0.48		60,000	$	0.48	1.44		20,000		3.00	$	1.44		20,000	$	1.44
$	0.50		80,000		4.22	$	0.50		80,000	$	0.50	1.50		26,666		3.22	$	1.50		26,666	$	1.50
$	0.55		15,000		6.01	$	0.55		15,000	$	0.55	1.65		5,000		5.01	$	1.65		5,000	$	1.65
$	0.70		100,000		6.35	$	0.70		100,000	$	0.70	2.10		33,333		5.35	$	2.10		33,333	$	2.10
$	0.73		670,000		4.81	$	0.73		670,000	$	0.73	2.19		208,996		3.92	$	2.19		208,996	$	2.19
$	0.85		6,000		0.76	$	0.85		6,000	$	0.85	2.70		12,000		1.19	$	2.70		12,000	$	2.70
$	0.90		36,000		2.19	$	0.90		36,000	$	0.90	3.75		15,000		6.97	$	3.75		15,000	$	3.75
$	1.25		45,000		7.97	$	1.25		30,000	$	1.25	3.90		146,325		6.20	$	3.90		146,325	$	3.90
$	1.30		441,000		7.20	$	1.30		291,520	$	1.30	4.20		23,332		7.64	$	4.20		23,332	$	4.20
$	1.40		70,000		8.64	$	1.40		70,000	$	1.40	4.26		33,333		6.45	$	4.26		33,333	$	4.26
$	1.42		100,000		7.45	$	1.42		66,667	$	1.42	4.35		1,666		7.94	$	4.35		1,666	$	4.35
$	1.45		5,000		8.94	$	1.45		1,667	$	1.45	4.50		23,332		6.69	$	4.50		23,332	$	4.50
$	1.50		70,000		7.69	$	1.50		70,000	$	1.50	5.04		179,997		8.18	$	5.04		179,997	$	5.04
$	1.68		540,000		9.18	$	1.68		270,000	$	1.68	5.43		10,000		8.51	$	5.43		10,000	$	5.43
$	2.00		140,000		9.36	$	2.00		0	$	0	5.61		10,000		9.12	$	5.61		–	$	–
$	2.09		249,500		9.86	$	2.09		0	$	0	5.85		58,336		8.76	$	5.85		2,780	$	5.85
$	2.26		190,000		9.64	$	2.26		90,000	$	2.26	5.93		4,000		9.78	$	5.93		4,000	$	5.93
$	1.35		2,817,500		7.35	$	1.35		1,856,854	$	1.10	6.00		29,997		7.97	$	6.00		10,000	$	6.00
$												6.26		90,000		9.75	$	6.26		90,000	$	6.26
$												6.27		80,653		8.86	$	6.27		26,884	$	6.27
$												6.78		46,664		8.64	$	6.78		35,554	$	6.78
												1.44–6.78		1,058,630		6.79	$	4.31		908,198	$	4.02

Schedule of disaggregation of revenues
	Three Months Ended March 31,				Nine Months Ended March 31,				Three Months Ended March 31,				Nine Months Ended March 31,
	2022		2021		2022		2021		2023		2022		2023		2022
Engineering Design Services	$	1,532,414	$	549,636	$	3,659,667	$	1,986,856	$	1,400,780	$	1,532,414	$	4,745,358	$	3,659,667
Optical Components		1,927,963		1,456,213		4,873,294		4,330,511		2,609,983		1,927,963		7,842,804		4,873,294
Medical Device Products and Assemblies		1,190,975		452,441		2,351,776		1,684,274		1,037,302		1,190,975		2,832,165		2,351,776
Technology Rights										–		–		600,000		–
Total Revenues	$	4,651,352	$	2,458,290	$	10,884,737	$	8,001,641	$	5,048,065	$	4,651,352	$	16,020,327	$	10,884,737

Schedule of contract liabilities
	Three Months Ended March 31,						Nine Months Ended March 31,						Three Months Ended March 31,						Nine Months Ended March 31,
	2022			2021			2022			2021			2023			2022			2023			2022
Contract Liabilities, Beginning of Period	$	1,137,470		$	151,877		$	450,084		$	417,059		$	794,981		$	1,137,470		$	905,113		$450,084
Assumed in Business Acquisition		0			0			826,679			0			–			–			–		826,679
Unearned Revenue Received from Customers		774,316			442,681			1,388,700			614,384			1,020,669			774,316			1,917,775		1,388,700
Revenue Recognized		(893,511	)		(361,674	)		(1,647,188	)		(798,559	)		(427,844	)		(893,511	)		(1,435,082	)	(1,647,188)
Contract Liabilities, End of Period	$	1,018,275		$	232,884		$	1,018,275		$	232,884		$	1,387,806		$	1,018,275		$	1,387,806		$1,018,275

	Fiscal 2022		Thereafter		Total
Capital lease for equipment, including interest	$	12,155	$	171,161	$	183,316
Minimum operating lease payments - Ross Optical division	$	15,705	$	134,799	$	150,504

	Fiscal 2023		Thereafter		Total
Financing lease for equipment, including interest	$	12,155	$	120,564	$	132,719
Minimum operating lease payments	$	45,389	$	377,904	$	423,293

Exhibit		Description

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

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

3.2		Bylaws of Precision Optics Corporation, Inc. (included as Exhibit 3.2 to the Form S-1 filed December 18, 2008, and incorporated herein by reference).

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

3.4		Amended and Restated Bylaws of Precision Optics Corporation, Inc. (included as Exhibit 3.1 to the Current Report on Form 8-K filed July 11, 2014, and incorporated herein by reference).

3.5*3.5		Amendment to the Amended and Restated Bylaws of Precision Optics Corporation, Inc. effective May 13, ~~2022.~~2022 (included as exhibit 3.5 to the Form 10-Q filed May 16, 2022, and incorporated herein by reference).
3.6		Articles of Amendment to the Articles of Organization of Precision Optics Corporation, Inc., dated October 24, 2022; and Articles of Amendment to the Articles of Organization of Precision Optics Corporation, Inc., dated October 26, 2022 (included as Exhibit 3.1 to the Form 8-K filed November 2, 2022, and incorporated herein by reference).

3.7		Articles of Amendment to the Articles of Organization of Precision Optics Corporation, Inc., dated October 27, 2022 (included as Exhibit 3.2 to the Form 8-K filed November 2, 2022, and incorporated herein by reference).

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

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

10.3		Compensation Agreement, by and among Precision Optics Corporation, Inc. and Joseph N. Forkey, dated August 2, 2018 (included as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 3, 2018, and incorporated herein by reference).

~~10.4+~~10.4†+		Asset Purchase Agreement dated July 1, 2019, between Precision Optics Corporation, Inc. and Ross Optical Industries, Inc. and the shareholders (included as Exhibit 10.1 to the Form 8-K filed on July 8, 2019, and incorporated herein by reference).

10.5		Form of Purchase Agreement, by and among Precision Optics Corporation, Inc. and several Investors, dated July 1, 2019 (included as Exhibit 10.2 to the Form 8-K filed on July 8, 2019, and incorporated herein by reference).

10.6		Form of Registration Rights Agreement, by and among Precision Optics Corporation, Inc. and several Investors, dated July 1, 2019 (included as Exhibit 10.3 to the Form 8-K filed on July 8, 2019, and incorporated herein by reference).

~~10.8~~10.8†		Employment agreement, by and among Precision Optics Corporation, Inc. and Jeff DiRubio, dated April 26, 2019 (included as Exhibit 10.16 to the annual report on Form 10-K filed on September 26, 2019, and incorporated herein by reference).

10.9+		Lease Agreement, by and among Precision Optics Corporation, Inc. and Texzona Industries Ltd. dated July 1, 2019 (included as Exhibit 10.17 to the annual report on Form 10-K filed on September 26, 2019, and incorporated herein by reference).

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

10.11		Form of Securities Purchase Agreement, by and among Precision Optics Corporation, Inc. and several Investors, dated April 14, 2020 (included as Exhibit 10.1 to the current report on Form 8-K filed on May 7, 2020, and incorporated herein by reference).

10.12		Form of Registration Rights Agreement, by and among Precision Optics Corporation, Inc. and several Investors, dated April 14, 2020 (included as Exhibit 10.2 to the current report on Form 8-K filed on May 7, 2020, and incorporated herein by reference).

~~10.13+~~10.13†+		Asset Purchase Agreement, dated October 4, 2021, by and among Precision Optics Corporation, Inc. and Lighthouse Imaging, LLC and Anania & Associates Investment Company, LLC (included as Exhibit 10.1 to the current report on Form 8-K filed on October 8, 2021, and incorporated herein by reference).

10.14		Form of Securities Purchase Agreement, by and among Precision Optics Corporation, Inc. and several Investors, dated October 4, 2021 (included as Exhibit 10.2 to the current report on Form 8-K filed on October 8, 2021, and incorporated herein by reference).

10.15		Form of Registration Rights Agreement, by and among Precision Optics Corporation, Inc. and several Investors, dated October 4, 2021 (included as Exhibit 10.3 to the current report on Form 8-K filed on October 8, 2021, and incorporated herein by reference).

10.16+		Loan Agreement dated October 4, 2021, by and among Precision Optics Corporation, Inc. and Main Street Bank (included as Exhibit 10.4 to the current report on Form 8-K filed on October 8, 2021, and incorporated herein by reference).

10.17		$250,000 Revolving Line of Credit Note dated October 4, 2021 (included as Exhibit 10.5 to the current report on Form 8-K filed on October 8, 2021, and incorporated herein by reference)..

10.18		$2,600,000 Term Loan Note dated October 4, 2021 (included as Exhibit 10.6 to the current report on Form 8-K filed on October 8, 2021, and incorporated herein by reference).

10.19		Security Agreement dated October 4, 2021, by and among Precision Optics Corporation, Inc. and Main Street Bank (included as Exhibit 10.7 to the current report on Form 8-K filed on October 8, 2021, and incorporated herein by reference).

10.20		Director side letter agreement dated October 4, 2021 (included as Exhibit 10.8 to the current report on Form 8-K filed on October 8, 2021, and incorporated herein by reference).

10.21		Precision Optics Corporation, Inc. 2022 Equity Incentive Plan (included as Appendix B to the ~~Proxy Statement~~proxy statement on Form ~~DEF-14A~~DEF14A filed on February 24, 2022, and incorporated herein by reference).

10.22		Employment offer letter dated January 5, 2023 between Precision Optics Corporation, Inc. and Daniel S. Habhegger (included as Exhibit 10.1 to the current report on Form 8-K filed on January 5, 2023, and incorporated herein by reference).

10.23		Employment offer letter dated January 5, 2023 between Precision Optics Corporation, Inc. and E. Kevin Dahill (included as Exhibit 10.2 to the current report on Form 8-K filed on January 5, 2023, and incorporated herein by reference).

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

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

31.1*		Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of the ~~Chief~~Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of Officers pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

~~101.INS~~101.INS*		Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

~~101.SCH~~101.SCH*		Inline XBRL Taxonomy Extension Schema Document

~~101.CAL~~101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document

~~101.DEF~~101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document

~~101.LAB~~101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document

~~101.PRE~~101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document

~~104~~104*		Cover Page Interactive Data File ~~(formatted in iXBRL, and included in exhibit 101).~~(embedded within the Inline XBRL document)

	PRECISION OPTICS CORPORATION, INC.

Date: May ~~16, 2022~~15, 2023	By:	/s/ Joseph N. Forkey
		Joseph N. Forkey
		Chief Executive Officer (Principal Executive Officer)


Date: May ~~16, 2022~~15, 2023	By:	/s/ ~~Daniel S. Habhegger~~
		~~Daniel S. Habhegger~~E. Kevin Dahill
		E. Kevin Dahill Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)