Mail Stop 0306
January 25, 2005
By U.S. Mail and Facsimile to (407) 382-4007
Mr. Monty K. Allen
Chief Financial Officer
Lightpath Technologies, Inc.
2603 Challenger Center Ct. Suite 100
Orlando, Florida 32826
RE: Lightpath Technologies, Inc.
Form 10-K for the fiscal year ended June 30, 2004
Form 10-Q for the quarterly period ended September
30,
2004
File No. 000-27548
Dear Mr. Allen,
We have reviewed your filings and have the following
comments.
We have limited our review to only your financial statements and
related disclosures and will make no further review of your
documents. Where indicated, we think you should revise future
filings
in response to these comments. If you disagree, we will consider
your explanation as to why our comment is inapplicable or a
revision
is unnecessary. Please be as detailed as necessary in your
explanation. In some of our comments, we may ask you to provide
us
with supplemental information so we may better understand your
disclosure. After reviewing this information, we may or may not
raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your
filings.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
Form 10-K for the fiscal year ended June 30, 2004
Item 6. Selected Financial Data - Page 27
1. Revise future filings to describe, or cross reference to a
discussion of factors such as accounting changes, restructurings
and
business combinations or dispositions that materially affect the
comparability of the information reflected in selected financial
data. This comment also applies to the supplementary quarterly
financial data disclosure on page 37. Refer to Items 301 and 302
of
Regulation S-K.
Item 7. Management`s Discussion and Analysis of Financial
Condition
and Results of Operations - Page 28
Year ended June 30, 2004 compared to the year ended June 30, 2003
- -
Page 32
Consolidated Operations
2. You disclose on page 32 that your revenues increased as a
result
of increased demand related to your aspheric lens and isolator
products. In future filings please expand the discussion to
address
the following:
a) Identify and quantify factors responsible for changes in
financial
statement items and explain why those changes occurred.
b) Disclose the extent to which the increases in revenues are
attributable to:
i. increases in prices;
ii. to increases in the volume or amount of goods or services
being
sold; or
iii. to the introduction of new products or services.
c) Tell investors how the new products discussed on pages 6 and 7
affected current revenues or will affect your future revenues.
Refer to Item 303(a)(3)(iii) of Regulation S-K.
3. Additionally, revise future filings to disclose the effects of
offsetting developments or events. We note from page 16 that
average selling prices of some of your products has decreased and
is
expected to further decrease in the future, yet we so no
discussion
in your MD&A.
4. Refer to your discussion of other income and expense on page
33.
Tell us and revise future filings to clearly discuss the nature of
the litigation settlement gain recorded in 2004. Discuss
supplementally your reasons for recording this amount as non-
operating.
Item 14. Principal Accountant Fees and Services - Page 38
5. In future filings revise to disclose audit and non-audit fees
billed during each of the last two fiscal years. Refer to Item 14
of
Form 10-K.
Consolidated Financial Statements
Statement of Cash Flows - Page F-6
6. In light of the statement in footnote (b) to Schedule II on
page
F-22 that you recorded a net reduction to the allowance for
doubtful
accounts of $101,583, tell us why you show a provision for
uncollectible receivables of $101,583 as a positive adjustment to
reconcile net loss to cash used in operating activities on your
statement of cash flows for fiscal 2004. In accordance with SFAS
95,
a negative provision would normally be reflected as a negative
adjustment to reconcile net loss to net cash used in operating
activities. We may have further comment.
Note 2. Summary of Significant Accounting Policies - Page F-8
Revenue - Page F - 9
7. We note that revenue from product sales is generally recognized
when products are shipped to the customer. Describe to us those
situations when revenue from product sales is not recognized at
shipment and tell us how you account for product sales in these
situations.
8. We also note that you recognize revenues from product
development
agreements as milestones are completed. Revise future filings to
identify the types of contract milestones, and explain how they
relate to substantive performance and revenue recognition events.
9. We note from page 6 that you use distributors in certain
markets.
Supplementally and in future filings describe the significant
terms
of your agreement with distributors, including payment, return,
exchange, credits, price protection, allowances and other
significant
matters. Also explain and support why it is appropriate to
recognize
revenue upon shipment of product to distributors. Address the
factors outlined in SFAS 48 and SAB 104 in your response.
General
10. We note from page 4 that you determined that your Optical
Lenses
and Laser Components were no longer reportable segments and you
began
reporting as a single business segment. Supplementally provide us
with the analysis you performed in concluding that each of these
business lines did not meet the criteria for reportable segments
outlined in paragraph 16 of SFAS 131.
11. As a related matter, we note the discussion throughout your
business section of your four major products as well as geographic
territories you serve. Please update your future filings to
include
the enterprise wide disclosures regarding products and services
and
geographic areas required by paragraphs 37 and 38 of SFAS 131.
Form 10-Q for the quarterly period ended September 30, 2004
Note 7. Contingencies - page 11
12. We note the litigation charge of $70,000 reported as a non-
operating expense in the current period. Discuss supplementally
your
reasons for recording this amount as non-operating other expense.
* * * *
Please respond to these comments and provide any requested
supplemental information within 10 business days or tell us when
you
will provide us with a response. Detailed cover letters greatly
facilitate our review. Please file your cover letter on EDGAR.
Please understand that we may have additional comments after
reviewing your responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require.
Since the company and its management are in possession of all
facts
relating to a company`s disclosure, they are responsible for the
accuracy and adequacy of the disclosures they have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that
* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;
* staff comments or changes to disclosure in response to staff
comments in the filings reviewed by the staff do not foreclose the
Commission from taking any action with respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
You may contact Eric Atallah, Staff Accountant at (202) 824-
5266
or me at (202) 942-1984.
Sincerely,
Martin F. James
Senior Assistant Chief
Accountant
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Mr. Monty K. Allen
Lightpath Technologies, Inc.
January 25, 2005
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