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Shanghai investment cash boosts LightPath

22 Jan 2015

Optics firm wants to invest in the expansion of its own Chinese operations.

Florida-headquartered optics manufacturer LightPath Technologies has finally completed a sale of its common stock to the Shanghai-based investment group Pudong Science and Technology.

A Cayman Islands affiliate of the Chinese group, going by the full name of Pudong Science & Technology Investment (Cayman) Co. Ltd., now owns just under 15 per cent of the Nasdaq-listed firm, which has two manufacturing sites in China and another in Orlando. Prior to the latest sales of securities, it had owned 9.4 percent, but the increase in its shareholding has required a time-consuming approval process involving the US government.

LightPath received gross proceeds of just over $1.3 million in return for the stock sale – something that should boost its cash position significantly at a time when it is looking to expand production. As of September 30th last year, LightPath listed $787,000 in cash and equivalents on its balance sheet.

New equipment
“LightPath intends to use the proceeds of the sale to provide working capital in support of its continued growth, particularly new product development, sales and marketing of its infrared product line, and capital expenditures related to acquisition of new equipment,” reported the company in a US Securities & Exchange Commission (SEC) filing dated January 21.

LightPath CEO Jim Gaynor said: “Pudong Investment has proven to be a long-term supporter of LightPath and understands the magnitude of our future growth potential. This investment will better position us to implement our strategic growth initiatives.”

Xudong Zhu, chairman of the investment vehicle’s Shanghai parent firm, added: "LightPath is a leading high-tech company in the optical molded lens industry and holds core technologies in products and solutions such as visible light aspheric lens, infrared aspheric lens, fiber collimator and gradient index lens.

“We are delighted to increase our investment in LightPath and hope we can help introduce LightPath's commercial technologies and products to China's market and resources through this investment, supporting the long-term growth of LightPath. This investment further demonstrates our investment strategy to go global from China and our commitment to be a leading international institutional investor.”

Backlog growing
In its most recent financial results, reported in November, LightPath posted a widening net loss of $579,000 after quarterly sales dipped 7 per cent year-on-year to $2.6 million.

However, Gaynor also revealed a sharp increase in bookings for lenses, especially in Asia, as the company’s 12-month backlog swelled by 25 per cent.

"Our revenue in the first quarter of fiscal 2015 was less than our projections, [but] our focused segments of precision molded optics in the Asian market and infrared experienced growth,” the CEO said at the time, adding that he was hopeful of gaining the necessary US government approval to sanction the Pudong investment.

However, the total raised through the securities sale does appear to be lower than LightPath had been hoping for. In its “10-K” annual report filing to the SEC dated September 4, 2014, the initial purchase price had been set at $1.62 per share, with an agreement that the lowest price payable would be $1.40 per share – the amount eventually paid.

The largest shareholder in Lightpath at the time of that filing was Cupertino, California, based Berg & Berg Enterprises, with 18.9 per cent of the company’s stock.

LightPath will be among the 1200-plus exhibitors at the SPIE Photonics West conference and trade expo being held at San Francisco's Moscone Center next month, showcasing products including its molded glass aspheric, infrared and "GRADIUM" graded-index lenses.

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