Precision Optics Announces Closing of $5.1 Million Offering of Common Stock to Fund Business Expansion

Rhea-AI Summary

Precision Optics (NASDAQ: POCI) has successfully closed a registered direct offering of common stock, raising $5.1 million in gross proceeds through the sale of 1,272,500 shares at $4.00 per share. The company expects net proceeds of approximately $5.0 million after deducting offering expenses.

The funds will be allocated to three main purposes: repaying certain indebtedness, expanding facilities to support anticipated growth, and general working capital. The offering was conducted under an effective shelf registration statement on Form S-3, which was declared effective on June 14, 2024, with a prospectus supplement filed on February 20, 2025.

Positive

• Secured $5.1 million in gross proceeds from stock offering
• Funds allocated for debt repayment and facility expansion
• Support from both existing and new shareholders

Negative

• Potential shareholder dilution from issuance of 1,272,500 new shares
• Stock offered at $4.00 per share

Insights

Financial Analyst

This $5.1 million capital raise through a registered direct offering represents a significant development for Precision Optics, particularly given their current market capitalization of approximately $27.3 million. The transaction structure offers several key insights:

The offering price of $4.00 per share, representing a 8.3% discount to current market price, is within typical ranges for similar offerings and suggests healthy investor interest. The participation of existing shareholders alongside new investors indicates strong confidence in the company's growth trajectory and management's execution capabilities.

The strategic allocation of proceeds reveals a well-balanced approach to capital deployment:

• Debt reduction will strengthen the balance sheet and reduce interest expenses, improving operational flexibility
• Facility expansion signals robust demand expectations in their core medical and defense/aerospace segments
• Working capital allocation ensures operational liquidity during the expansion phase

The timing of this offering, supported by an existing shelf registration, demonstrates proactive financial planning. For a specialized manufacturer in the precision optics space, where capital equipment and clean room facilities require significant investment, this expansion could be pivotal in capturing additional market share in high-margin medical and defense applications.

The dilution impact from the 1,272,500 new shares needs to be weighed against the growth potential and operational improvements this capital enables. In the context of precision manufacturing for regulated industries, having adequate production capacity is often a prerequisite for securing large contracts, making this expansion potentially important for future revenue growth.

GARDNER, Mass., Feb. 24, 2025 (GLOBE NEWSWIRE) -- Precision Optics Corporation, Inc. (NASDAQ: POCI), a leading designer and manufacturer of advanced optical instruments for the medical and defense/aerospace industries today announced the closing of its registered direct offering of common stock.

The offering consisted of 1,272,500 shares of the Company's common stock at a purchase price of $4.00 per share, resulting in gross proceeds of approximately $5.1 million, and expected net proceeds of approximately $5.0 million after deducting offering expenses. The Company intends to use the net proceeds from the offering to repay certain indebtedness, expand its facilities to support expected growth and related general working capital purposes.

Joseph Forkey, CEO of Precision Optics, commented, “We appreciate the ongoing support of several existing and new shareholders as we plan our capacity expansion to meet the growth we anticipate in coming quarters and years.”

This offering was conducted pursuant to an effective shelf registration statement on Form S-3 (File No. 333-280047) previously filed with the U.S. Securities and Exchange Commission (the “SEC”) and declared effective on June 14, 2024. A prospectus supplement dated February 19, 2025 describing the terms of the offering was filed with the SEC on February 20, 2025 and is available on the SEC’s website located at http://www.sec.gov.

About Precision Optics Corporation
Founded in 1982, Precision Optics is a vertically integrated optics company primarily focused on leveraging its proprietary micro-optics, 3D imaging and digital imaging technologies to the healthcare and defense/aerospace industries by providing services ranging from new product concept through mass manufacture. Utilizing its leading-edge in-house design, prototype, regulatory and fabrication capabilities as well as its Ross Optical division's high volume world-wide sourcing, inspecting and production resources, the Company is able to design and manufacture next-generation product solutions to the most challenging customer requirements. Within healthcare, Precision Optics enables next generation medical device companies around the world to meet the increasing demands of the surgical community who require more enhanced and smaller imaging systems for minimally invasive surgery as well as 3D endoscopy systems to support the rapid proliferation of surgical robotic systems. In addition to these next generation applications, Precision Optics has supplied top tier medical device companies a wide variety of optical products for decades, including complex endocouplers and specialized endoscopes. The Company is also leveraging its technical proficiency in micro-optics to enable leading edge defense/aerospace applications which require the highest quality standards and the optimization of size, weight and power. For more information, please visit www.poci.com.

About Forward-Looking Statements

This press release contains forward-looking statements within the meaning of U.S. federal securities laws. Such forward-looking statements include, but are not limited to, statements regarding expected growth in the coming quarters and years. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. In addition, any statements that refer to projections, forecasts, or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intends," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. The forward-looking statements contained in this press release are based on certain assumptions and analyses made by the management of the Company in light of their respective experience and perception of historical trends, current conditions, and expected future developments and their potential effects on the Company as well as other factors they believe are appropriate in the circumstances. There can be no assurance that future developments affecting the Company will be those anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the control of the parties), or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements, including risks that the closing conditions for this offering will not be achieved, the demand for the Company's products, global supply chains and economic activity in general and other risks and uncertainties identified in the Company's filings with the SEC. Should one or more of these risks or uncertainties materialize or should any of the assumptions being made prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities laws.

Company Contact:
PRECISION OPTICS CORPORATION
22 East Broadway
Gardner, Massachusetts 01440-3338
Telephone: 978-630-1800

Investor Contact:
LYTHAM PARTNERS, LLC
Robert Blum
Telephone: 602-889-9700
poci@lythampartners.com

FAQ

How much did Precision Optics (POCI) raise in their February 2025 stock offering?

Precision Optics raised $5.1 million in gross proceeds through a registered direct offering of common stock, with expected net proceeds of $5.0 million after expenses.

What is the price per share for POCI's February 2025 stock offering?

The offering price was $4.00 per share for 1,272,500 shares of common stock.

How will POCI use the proceeds from their February 2025 stock offering?

The company plans to use the proceeds to repay certain indebtedness, expand facilities to support expected growth, and for general working capital purposes.

When was POCI's shelf registration statement declared effective?

The shelf registration statement on Form S-3 was declared effective by the SEC on June 14, 2024.

How many new shares did POCI issue in their February 2025 offering?

Precision Optics issued 1,272,500 new shares of common stock in the offering.