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Lightpath Technologies Inc · 424B2 · On 10/31/97

Filed On 10/31/97 · SEC File 333-37443 · Accession Number 950147-97-741

  As Of               Filer                 Filing     On/For/As Docs:Pgs              Issuer               Agent

10/31/97  Lightpath Technologies Inc        424B2                  1:22                                     950147

Prospectus · Rule 424(b)(2)
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 424B2       Prospectus                                            22    160K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (RTF, XML, et al.) Blair & Co Bridge Securityholders Description of Securities Offering, The Plan of Distribution Possible Restrictions on Market-Making Activities in Company's Securities Private Placement Securityholders Risk Factors Selling Securityholders The offering Use of Proceeds
1	1st Page
7	The offering
9	Risk Factors
15	Blair & Co
"	Possible Restrictions on Market-Making Activities in Company's Securities
17	Use of Proceeds
"	Selling Securityholders
19	Plan of Distribution
"	Bridge Securityholders
20	Private Placement Securityholders
21	Description of Securities

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Prospectus                                                                      

LIGHTPATH TECHNOLOGIES, INC.
1,840,000 Units, each consisting of one Share of Class A Common Stock and one 
Redeemable B Warrant, issuable upon the exercise of outstanding Redeemable Class
A Warrants and 1,840,000 Shares of Class A Common Stock issuable upon the 
exercise of Redeemable Class B Warrants underlying such Class A Warrants and
1,840,000 Shares of Class A Common Stock issuable upon the exercise of
outstanding Redeemable Class B Warrants Underlying such Class A Warrants

839,000 Redeemable Class A Warrants to Purchase 839,000 Shares of Class A Common
 Stock and 839,000 Redeemable Class B Warrants to Purchase 839,000 Shares of
Class A Common Stock, and 2,517,000 shares of Class A Common Stock issuable upon
 the exercise of such Class A and Class B Warrants
 And
1,000,000 Shares of Class A Common Stock issuable upon the conversion of Series 
A Preferred Stock and exercise of Redeemable Class C Warrants and Redeemable
Class D Warrants

         Lightpath  Technologies,  Inc., a Delaware corporation (the "Company"),
hereby  offers:  (i)  1,840,000  Units  ("Units")  issuable upon the exercise of
1,840,000 Class A Warrants (the "Class A Warrants"), each unit consisting of one
share of Class A Common Stock, $.01 par value ("Class A Common Stock"),  and one
redeemable  Class B Warrant (the "Class B Warrants");  (ii) 1,840,000  shares of
Class A Common Stock  issuable  upon the exercise of Class B Warrants  which are
presently  outstanding,  and  (iii)  1,840,000  shares  of Class A Common  Stock
issuable upon the exercise of Class B Warrants  underlying the Units. The shares
of Class A Common  Stock and the Class B Warrants  included in the Units will be
immediately  separately  transferable upon issuance and the Units will not trade
as a separate security.  1,600,000 of the outstanding Class A Warrants and Class
B Warrants (collectively, the "IPO Warrants") were issued in connection with the
Company's  initial public  offering  ("IPO") in February 1996 of 1,600,000 Units
("IPO  Units"),  each IPO Unit  consisting of one share of Class A Common Stock,
one  Class A  Warrant  and one  Class B  Warrant.  In  March  1996,  D.H.  Blair
Investment Banking Corp. ("Blair"), as the underwriter of the IPO, exercised its
over-allotment  option to purchase an additional  240,000 IPO Units. The Company
also   registered   in  the  IPO  839,000   Class  A  Warrants   (the   "Selling
Securityholders'  Warrants") on behalf of certain selling  securityholders  (the
"Bridge  Securityholders"),  none of which  have been sold to date by the Bridge
Securityholders.  There are 1,840,000 Class A Warrants outstanding and 1,840,000
Class B Warrants  outstanding as of the date of this  Prospectus  (excluding the
839,000  Warrants  that continue to be held by the Bridge  Securityholders  (the
"Remaining Bridge  Securityholders")  and an option to Blair to purchase 160,000
Units,  each composed  similar to the IPO Units for an exercise price of $6.75 ,
("Unit  Purchase  Option").  Assuming the exercise of all presently  outstanding
Class A Warrants,  there will be 1,840,000 additional Class B Warrants issuable,
for a total of  3,680,000  Class B Warrants.  Each Class A Warrant  entitles the
holder  to  purchase  one  Unit  at an  exercise  price  of  $6.50,  subject  to
adjustment. Each Class B Warrant entitles the holder to purchase, at an exercise
price of $8.75,  subject to adjustment,  one share of Class A Common Stock.  The
Class A Warrants and the Class B Warrants  are  exercisable  until  February 22,
2001.  The  Warrants  are  subject to  redemption  by the  Company  for $.05 per
Warrant,  upon 30 days' written notice,  if the average closing bid price of the
Class A Common  Stock  exceeds  $9.10  per  share  with  respect  to the Class A
Warrants and $12.25 per share with  respect to the Class B Warrants  (subject to
adjustment in each case) for 30 consecutive  business days ending within 15 days
of the date the Warrants are called for redemption.  The Class A Common stock is
one of four classes of the Company's Common Stock: Class A, Class E-1, Class E-2
and Class  E-3 ( which  are  collectively  referred  to  herein  as the  "Common
Stock").                                                                        

         This Prospectus also relates to 839,000  redeemable Class A Warrants of
Lightpath  Technologies,  Inc.,  625,000 of which were issued to investors  upon
conversion of other warrants issued to such investors in a                      
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private  placement  by the Company in November  1995,  and 214,000 of which were
issued to other  investors  (collectively  the  "Bridge  Securityholders")  upon
conversion of certain notes issued by the Company in a private  placement during
the first seven months of 1995. See "Selling  Securityholders."  This Prospectus
also relates to 839,000  Redeemable  Class B Warrants  issuable upon exercise of
the Class A Warrants and 1,678,000  shares of Class A Common Stock issuable upon
exercise  of the Class A Warrants  and Class B Warrants  held or issuable to the
Bridge Securityholders.                                                         

         This  Prospectus  also  relates to  1,000,000  shares of Class A Common
Stock  issuable upon  conversion  of 180 shares of Series A Preferred  Stock and
exercise of 320,000  redeemable  Class C Warrants and 64,000  redeemable Class D
Warrants which were issued to investors in a private placement  completed by the
Company in July 1997 (the "Private Placement  Securityholders" and together with
the Bridge Securityholders , the "Selling Securityholders").                    

         The securities offered by this Prospectus may be sold from time to time
by the holders thereof,  the Selling  Securityholders,  or by their transferees.
All of the Class A  Warrants  became  freely  tradeable  in June  1996,  and the
securities  underlying such Class A Warrants became freely tradeable  commencing
February 22, 1997.  The  distribution  of the  securities  offered hereby may be
effected in one or more transactions that may take place on the over-the-counter
market,   including  ordinary  brokers'   transactions,   privately   negotiated
transactions  or  through  sales  to one or  more  dealers  for  resale  of such
securities as  principals,  at market prices  prevailing at the time of sale, at
prices related to such prevailing  market prices or at negotiated  paces.  Usual
and customary or  specifically  negotiated  brokerage fees or commissions may be
paid by the Selling Securityholders.                                            

         The  Selling  Securityholders  and  intermediaries  through  whom  such
securities  are sold may be deemed  "underwriters"  within  the  meaning  of the
Securities  Act of 1933, as amended (the "Act"),  with respect to the securities
offered,  and  any  profits  realized  or  commissions  received  may be  deemed
underwriting  compensation.  The  Company  has agreed to  indemnify  the Selling
Securityholders  against certain  liabilities,  including  liabilities under the
Act.  The  Company  will  not  receive  any of the  proceeds  from  the  sale of
securities by the Selling Securityholders.                                      

 THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK AND
 SUBSTANTIAL IMMEDIATE DILUTION. SEE "RISK FACTORS" AT PAGE 9.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
 AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION,
 NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
 SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
 ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

------------------

The date of this Prospectus is October 30, 1997.
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 AVAILABLE INFORMATION

         The Company has filed with the Securities and Exchange  Commission (the
"Commission"),  a Registration  Statement on Form S-3, which also  constitutes a
Post-Effective Amendment on Form S-3 to its Registration Statement on Form SB-2,
File No. 33-80119,  ("Registration Statement") under the Securities Act of 1933,
as amended with respect to the securities offered hereby.  Statements  contained
in this Prospectus as to the contents of any contract or other document referred
to are not necessarily  complete. In each instance reference is made to the copy
of such  contract  or other  document  filed as an exhibit  to the  Registration
Statement,  each  such  statement  being  qualified  in  all  respects  by  such
reference.                                                                      

         The  Company  is  subject  to  the  informational  requirements  of the
Securities  Exchange  Act of 1934,  as  amended,  (the  "Exchange  Act")  and in
accordance therewith files reports,  proxy statements and other information with
the Commission.  For further  information with respect to the Company,  reports,
proxy  statements  and other  information  and the  securities  offered  hereby,
reference is made to such reports,  proxy statements and other information,  the
Registration  Statement and the exhibits filed as part thereof. The Registration
Statement  and the  reports  and  other  information  filed  by the  Company  in
accordance  with the Exchange Act can be inspected  and copied at the  principal
office of the Commission at Room 1024,  Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following regional offices of the Commission:
7 World Trade Center,  New York,  New York,  10048 and Citicorp  Center 500 West
Madison Street,  Suite 1400,  Chicago,  IL 60661. Copies of such material may be
obtained from the Public  Reference  Section of the  Commission at its principal
office 450 Fifth Street, N.W., Washington,  D.C. 20549, upon payment of the fees
prescribed by the  Commission.  In addition the  Commission  maintains a website
(http://www.sec.gov)  that contains  reports,  proxy and information  statements
regarding  registrants,  such as the Company,  that file electronically with the
Commission.                                                                     

 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

         The  following  documents  have been filed with the  Commission  by the
Company and are hereby incorporated by reference into this Prospectus:          

i.       The  Company's  Annual  Report on Form 10-KSB for the fiscal year ended
         June  30,   1997.   The  report  of  KPMG  Peat   Marwick  LLP  in  the
         aforementioned  financial statements contains an explanatory  paragraph
         that  states  the  Company's   recurring  losses  from  operations  and
         resulting  continued  dependence  on external  sources of capital raise
         substantial  doubt  about the  entity's  ability to continue as a going
         concern.  The financial  statements do not include any adjustments that
might result from the outcome of that uncertainty.            

ii.      The description of the Company's Class A Common Stock, Class A Warrants
         and Class B Warrants contained in the Company's  Registration Statement
         on Form 8-A filed with the Commission  pursuant to Section 15(d) of the
Exchange Act dated January 13, 1996.                          

iii.     The Company's Proxy Statement  relating to its 1997 Annual Meeting,  as
         filed with the Commission pursuant to Section 14 of the Exchange Act on
September 11, 1997.                                           

All other documents and reports filed pursuant to Sections  13(a),  13(c), 14 or
15(d) of the  Exchange  Act from the date of this  Prospectus  and  prior to the
termination  of the  offering  shall be deemed to be  incorporated  by reference
herein  and shall be deemed to be a part  hereof  from the date of the filing of
such reports and documents.                                                     

         Any  statement   contained  in  a  document   incorporated   or  deemed
incorporated  by reference  herein shall be deemed to be modified or  superseded
for purposes of this Prospectus to the extent that a statement  contained herein
or in any subsequently  filed document that is also deemed to be incorporated by
reference  herein modifies or supersedes  such statement.  Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.                                        

         The Company hereby  undertakes to provide without charge to each person
to whom a Prospectus is delivered upon written or oral request of each person, a
copy of any document  incorporated herein by reference,  (not including exhibits
to the document  that have been  incorporated  herein by  reference  unless such
exhibits are  specifically  incorporated by reference in the document which this
Prospectus  incorporated).  Requests  should be directed to Investor  Relations,
LightPath  Technologies,  Inc., 6820 Academy Parkway East NE,  Albuquerque,  New
Mexico, 87109, telephone (505)342-1100.                                         
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         The  Company  has  agreed  to pay to  Blair  a  solicitation  fee  (the
"Solicitation  Fee") equal to 5% of the exercise  prices in connection  with the
exercise  of  the  IPO  Warrants   under  certain   conditions.   See  "Plan  of
Distribution."  The  exercise  prices of the IPO  Warrants  were  determined  by
negotiation  between the Company and Blair,  and are not necessarily  related to
the Company's asset value, net worth or other criteria of value.                

The  Company's  IPO Units,  Class A Common  Stock,  Class A Warrants and Class B
Warrants  are traded on the Nasdaq  SmallCap  Market  under the  symbols  LPTHU,
LPTHA, LPTHW, LPTHZ,  respectively.  On September 15, 1997 closing prices of the
IPO Units,  Class A Common  Stock,  Class A Warrants  and Class B Warrants  were
$13.25, $7.63, $4.33 and $1.72, respectively.                                   

                                                        · Enlarge/Download Table

-------------------------------------------------------------------------------------------------------
                                      Warrant                  Warrant               Proceeds to       
                                  Exercise Price         Solicitation Fee(1)         the Company       
-------------------------------------------------------------------------------------------------------
                                                                                                       
Per Class A Warrant                    $6.50                    $.33                    $6.17          
Total (2)                     $11,960,000              $   598,000              $11,362,000            
Per Class B Warrant                    $8.75                    $.44                    $8.31          
Total (2)                     $32,200,000              $1,610,000               $30,590,000            
Per Class C Warrant                    $5.63                    $.00                    $5.63          
Total (3)                     $  1,801,600                        -             $  1,801,600           
Per Class D Warrant                    $5.63                    $.00                    $5.63          
Total (3)                     $     360,320                       -             $     360,320          
=======================================================================================================

     (1) Represents  Solicitation  Fees payable to Blair pursuant to the Warrant
         Agreement between the Company and Blair in certain  circumstances.  See
"Plan of Distribution."                                       
     (2) Assumes  the  exercise  of all Class A Warrants  and Class B  Warrants.
       There can be no assurance that any of the Warrants will be exercised.
     (3) Assumes  the  exercise  of all Class C Warrants  and Class D  Warrants.
       There can be no assurance that any of the Warrants will be exercised.
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PROSPECTUS SUMMARY

         The  following  summary  should  be read in  conjunction  with,  and is
qualified  in its  entirety  by the  more  detailed  information  and  financial
statements  (including  the notes  thereto)  incorporated  by reference.  Unless
otherwise  indicated,  the information in this Prospectus assumes no exercise of
any  other   outstanding   warrants  or  options.   This   Prospectus   contains
forward-looking  statements that involve risks and uncertainties.  The Company's
actual  results  may differ  significantly  from the  results  discussed  in the
forward-looking  statements.  Factors that might cause such differences include,
but are not limited to, those discussed in the "Risk Factors."                  

 The Company

         LightPath  Technologies,  Inc.  ("LightPath" or the "Company") produces
GRADIUM(R)  glass and performs  research and development on future GRADIUM glass
applications.  GRADIUM glass is an optical  quality glass  material with varying
refractive  indices,   capable  of  reducing  optical  aberrations  inherent  in
conventional  lenses  and  performing  with a single  lens  tasks  traditionally
performed by multi-element  conventional lens systems. The Company believes that
GRADIUM glass lenses provide  advantages  over  conventional  lenses for certain
applications. By reducing optical aberrations, the Company believes that GRADIUM
glass  lenses  can  provide  sharper  images,  higher  resolution,   less  image
distortion,  a wider  usable  field of view and a smaller  focal spot  size.  By
reducing the number of lenses in an optical  system,  the Company  believes that
GRADIUM  glass  can  provide  more  efficient  light  transmission  and  greater
brightness,  lower production costs, and a simpler,  smaller product.  While the
Company  believes that other  researchers have sought to produce optical quality
lens material with the properties of GRADIUM glass,  the Company is not aware of
any other person or firm that has developed a repeatable  manufacturing  process
for producing such material on a prescribable  basis.  LightPath has been issued
thirteen  patents  and has  pending  filed  patent  applications  related to its
materials  composition,   product  design  and  fabrication  processes  for  the
production  of GRADIUM  glass  products.  The Company  continues  to develop new
GRADIUM glass materials with various  refractive index and dispersion  profiles,
whole  value  added lens  systems  for a variety of  optical  applications,  and
multiplexers and interconnects for the telecommunications field.                

         The Company believes that GRADIUM glass can potentially be marketed for
use in most optics and optoelectronics  products.  In an attempt to more rapidly
establish  initial  sales  volume,  to date the  Company  has  emphasized  laser
products that it believes may have the greatest immediate commercial impact with
the least  initial  investment.  Generally,  optical  designers  can  substitute
GRADIUM glass components from the Company's standard line of products in lieu of
existing conventional laser lens elements. Lasers are presently used extensively
in a broad range of consumer and commercial  products,  including  fiber optics,
robotics,  wafer chip inspection,  bar code reading,  document  reproduction and
audio and video compact disc  machines.  Because  GRADIUM glass can  concentrate
light transmission into a much smaller focal spot than conventional  lenses, the
Company  believes and customers' test results confirm that GRADIUM glass has the
ability to improve laser performance. The Company's growth strategy is to target
key laser market niches and establish  the  necessary  products and  partnership
alliances to sell into Europe and Asia as well as the U.S. market. During fiscal
year 1997, the Company established  relationships with six foreign  distributors
and a Silicon Valley manufacturer representative which relationships the Company
believes will enable it to rapidly  establish a presence in certain  foreign and
domestic markets.  In addition to laser applications,  the Company,  through its
printed and Internet on-line catalog,  provides a standard line of GRADIUM glass
lenses for broad-based sales to optical designers developing  particular systems
for original equipment manufacturers ("OEMs") or in-house products.             

         Because complex optical  systems contain many optical  components,  and
GRADIUM  glass  lenses can be utilized to reduce the number of lens  elements in
such  systems,  the Company  believes that GRADIUM glass lenses can simplify the
design and improve the performance of complex optical systems.  However,  design
and  production of an optical  product is a lengthy  process,  and it could take
years for producers to redesign  complex  optical  systems using GRADIUM  glass,
reconfigure the product  housing,  re-engineer the assembly process and commence
commercial quantity orders for GRADIUM glass components.                        
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         The Company can not predict how long is required for  manufacturers  of
existing  optical  systems to  incorporate  GRADIUM glass into such systems , if
ever. Accordingly,  the Company intends to focus its long-term marketing efforts
on emerging niche industries,  such as multimedia and  telecommunications,  that
are  designing for  next-generation  optical  systems,  and  performance  driven
industries,   such  as  medical  instruments,   that  are  seeking  to  optimize
performance of existing optical products.                                       

         The   Company's   growth   strategy   is  also  to  develop   strategic
relationships with original equipment manufacturers,  ("OEM"'s) that incorporate
or produce optical components. The Company believes OEM relationships may expand
and develop the Company's  technology  base by evolving into more  sophisticated
development efforts and complex products, although there can be no assurances in
this regard.  The  Company's  existing OEM  relationships  have  resulted in the
development  of  prototype   lenses  for  Karl  Storz  GMBH  &  Co.,  a  leading
manufacturer of endoscopes,  camera  television lenses and the optimization of a
high performance riflescope for a gunsight manufacturer.                        

         Optoelectronics  technologies  represent  an overlap of  photonics  and
electronics  and are key enablers of  "Information  Age"  technologies,  such as
fiberoptic  communications,   optical  data  storage,  laser  printers,  digital
imaging, and sensors for machine vision and environmental monitoring. As part of
its growth strategy,  the Company has targeted various  optoelectronic  industry
market niches and is currently developing  additional GRADIUM glass products and
key strategic alliances with technology and marketing partners to design,  build
and sell next generation integrated components and devices. The Company believes
that  GRADIUM  glass can  provide  industry  wide  solutions  to  optoelectronic
problems associated with light gathering, packaging and alignment.              

         Since  its  inception  in 1985  until  June  1996,  the  Company  was a
development  stage  enterprise  that engaged in basic research and  development.
During  fiscal  year 1997,  the  Company's  operational  focus began to shift to
product  development and commercial sales. The Company believes that most of its
product  sales  prior to fiscal  year 1997 have been to persons  evaluating  the
commercial  application  of GRADIUM glass or using the products for research and
development.  During  1997,  numerous  prototypes  for  production  orders  were
completed.  In addition,  catalog sales of standard profiles were received.  The
Company currently offers standard, computer-based profiles of GRADIUM glass that
engineers  can use for  product  design.  The  current  focus  of the  Company's
technology department  development efforts is the expansion of GRADIUM product's
applications  to  the  areas  of   multiplexers   and   interconnects   for  the
telecommunications  field,  the  addition  of the crown  glass  product  line to
supplement  its existing flint  products,  development of acrylic axial gradient
material to extend the range of existing product  applications,  and the upgrade
of proprietary  material  design software and optical design tools to facilitate
product design.  The Company was incorporated in Delaware in 1992. Its corporate
headquarters  are located at 6820 Academy  Parkway East N.E.,  Albuquerque,  New
Mexico,    87109    and   its    telephone    number    is    (505)    342-1100.

         The  Private  Securities  Litigation  Reform  Act of 1995  ("the  Act")
provides a safe harbor for forward  looking  statements  made by or on behalf of
the Company.  All statements,  other than statements of historical facts,  which
address  activities,   events  or  developments  that  the  Company  expects  or
anticipates  will or may occur in the  future,  including  such things as future
capital expenditures,  growth, product development, sales, business strategy and
other  such  matters  are  forward-looking  statements.   These  forward-looking
statements are based largely on the Company's  expectations  and assumptions and
are subject to a number of risks and uncertainties, many of which are beyond the
Company's   control.   Actual   results   could  differ   materially   from  the
forward-looking  statements as a result of a number of factors,  including,  but
not  limited  to,  the  Company's  early  state  of  development,  the  need for
additional  financing,  and  intense  competition  in  various  aspects  of  its
business. In light of these risks and uncertainties,  all of the forward-looking
statements made are qualified by these cautionary statements and there can be no
assurance  that the actual  results or  developments  anticipated by the Company
will be realized.                                                               
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                                                        · Enlarge/Download Table

                                                        The Offering                                                
--------------------------------------------------------------------------------------------------------------------
                                                                                                                    
Securities Offered by the Company:           1,840,000  Units  consisting  of one share of Class A Warrant  and one 
                                             Class B Warrant of the  Company.  Each Class A Warrant is  exercisable 
                                             at any time on or before  February 22 , 2001 to purchase for $6.50 one 
                                             share of  Class A  Common  Stock and one Class B  Warrant,  subject to 
                                             adjustment.  Each  Class  B  Warrant  is  exercisable  any  time on or 
                                             before  February  22 , 2001 to  purchase  one share of Class A  Common 
                                             Stock for $8.75,  subject to  adjustment.  The Warrants are subject to 
                                             redemption  in  certain  circumstances.   The  Class A  Common  Stock, 
                                             Class A  Warrants  and Class B Warrants  will be  separately  tradable 
                                             immediately  upon  issuance.  160,000 Units  issuable upon exercise of 
                                             the Unit  Purchase  Option held by Blair for $6.75 per unit during the 
                                             three year period  commencing  February 22, 1998.  Each Unit  consists 
                                             of one share of Class A Common  Stock,  one  Class A  Warrant  and one 
                                             Class B Warrant of the Company. See "Description of Securities."       

Securities Offered by Selling                839,000 Units  consisting  of one share of Class A Common  Stock;  and 
Securityholders:                             839,000  Class  B  Warrants  issuable  upon  exercise  of the  Class A 
                                             Warrants and 1,678,000  shares of Common Stock  issuable upon exercise 
                                             of the Class A and Class B Warrants                                    

                                             1,000,000  shares of Class A Common Stock issuable upon  conversion of 
                                             Series A Preferred Stock and exercise of outstanding  Class C Warrants 
                                             and Class D Warrants.  Each Class C Warrant is exercisable at any time 
                                             on or  before  July  2000 to  purchase  for $5.63 one share of Class A 
                                             Common  Stock  subject  to   adjustment.   Each  Class  D  Warrant  is 
                                             exercisable  at any time on or before July 2002 to purchase  for $5.63 
                                             one share of Class A Common Stock subject to adjustment.               

                                             180  shares  of  Series  A  Preferred  Stock  has a stated  value  and 
                                             liquidation  preference of $10,000, plus an 8% per annum premium. Each 
                                             share of Series A Preferred  Stock is convertible  into Class A Common 
                                             Stock at the  option of holder,  with  volume  limitations  during the 
                                             first 9  months,  based on its  stated  value at the  conversion  date 
                                             divided by a conversion  price. The conversion price is defined as the 
                                             lesser  of  $5.625  or 85% of the  average  closing  bid  price of the 
                                             Company's  Class A  Common  Stock  for the  five  days  preceding  the 
                                             conversion date.                                                       

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Company's Capitalization
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                                                        · Enlarge/Download Table
                                                                                                                
Common   Stock    Outstanding  June  30,                                                                        
1997(1)(3):                                                                                                     
   Class A Common Stock                   2,766,185 shares(1)(3)                                                

   Class E-1 Common Stock                 1,449,942 shares(2)                                                   

   Class E-2 Common Stock                 1,449,942 shares(2)                                                   

   Class E-3 Common Stock                   966,621 shares(2)                                                   

Use of Proceeds                           The Company intends to use the net proceeds received upon the exercise
                                          of the Warrants,  if any, for general  corporate  purposes and working
                                          capital  to  support   anticipated   growth  including   research  and
                                          development programs and continuing product  development.  See "Use of
                                          Proceeds."  All proceeds  received upon resale of any of the shares of
                                          Common  Stock,  Class A Warrants and Class B Warrants will be received
                                          by the Selling Securityholders.                                       

Risk Factors                              The  securities  offered  hereby  involve  a high  degree  of risk and
                                          immediate  substantial dilution to public investors.  An investment in
                                          the  Units  offered  hereby  should  be  made  only  after  a  careful
                                          consideration  of the  various  risks which may affect the Company and
                                          its operations. See "Risk Factors"                                    

Nasdaq Symbols                            Units - LPTHU                                                         
                                          Class A Common Stock - LPTHA                                          
                                          Class A Warrants - LPTHW                                              
                                          Class B Warrants - LPTHZ                                              

--------                                                                        
(1)  Does not include  outstanding  options at June 30, 1997 to purchase 304,669
     shares of Class A Common  Stock and  149,504  shares of Class E-1,  149,504
     shares of Class E-2 and 99,669  shares of Class E-3 Common  Stock which are
     exercisable  at option  exercise  prices  ranging  from $5.00 to $51.56 per
     share and 145,025 shares of Class A Common Stock reserved for issuance upon
   future grants of options issuable under the Company's stock option plans.
(2)  Each share of  outstanding  Class E-1 Common Stock,  Class E-2 Common Stock
     and Class E-3 Common Stock (collectively,  the "Class E Shares") will, on a
     class basis,  automatically convert into Class A Common Stock if and as the
     Company  attains  certain  earnings  levels  or  the  market  price  of the
     Company's  Class A Common Stock  achieves  certain  targets with respect to
     each of the three separate classes.  The Class E Shares will be redeemed by
     the Company for a nominal  amount if such  earnings  levels or market price
targets are not achieved.                                             
(3)  Does not include an aggregate  of 8,838,000  shares of Class A Common Stock
     issuable upon exercise of (i) the Unit Purchase  Option and the Class A and
     Class B Common Stock Purchase Warrants underlying the Unit Purchase Option;
     (ii) the Class A Warrants  and Class B Warrants  forming  part of the Units
     offered hereby,  (iii) the 839,000 Class A Warrants issued at the IPO; (iv)
     the 839,000 additional Class B Warrants issuable upon exercise of the Class
     A Warrants  referred to in (iii) above,  and (v) the  additional  1,000,000
     shares  of  Class A Common  Stock  issuable  upon  conversion  of  Series A
Preferred Stock and exercise of Class C and Class D Warrants.         
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RISK FACTORS

         An investment in the Securities  offered hereby  involves a high degree
of risk and should  only be made by  investors  who can afford the loss of their
entire  investment.   Prospective  investors,  prior  to  making  an  investment
decision,   should  give  careful  consideration,   in  addition  to  the  other
information   contained  in  the  Disclosure   Documents,   as  defined  in  the
Subscription Agreement, to the following risk factors.                          

         Previously  Development  Stage Company;  Accumulated  Deficit,  Working
Capital  and  Capital  Deficiency;  Limited  Operating  History.  The  Company's
predecessor  commenced  operations  in 1985,  and the Company was a  development
stage company  through June 30, 1996.  Prior to fiscal year 1997,  the Company's
primary  activities  have been basic  research and  development.  The  Company's
current focus is on product development and sales. At June 30, 1997, the Company
had an accumulated  deficit of ($17,212,516).  For the year ended June 30, 1997,
the Company recognized revenues of $673,677 and a net loss of ($2,998,290).  For
the year ended June 30, 1996,  the Company  recognized  revenues of $200,444 and
had a net loss of ($2,914,905).  The Company's products are at an early stage of
development  and the Company  believes  that most of its product  sales prior to
fiscal year 1997 have been to parties  evaluating the commercial  application of
GRADIUM  glass or using the products for research and  development.  During 1997
numerous  prototypes for  production  orders were  completed,  but no commercial
orders have been  received to date.  While the Company has been  engaged in some
marketing   efforts  over  the  past  few  years  that  have  resulted  in  some
collaborative  arrangements  or purchases by parties  considering  incorporating
GRADIUM in their  product  designs,  these efforts have not resulted in material
sales revenues. The Company has continued to operate at a deficit and expects to
continue to operate at a deficit  for fiscal  year 1998 and until such time,  if
ever,  as the Company's  operations  generate  sufficient  revenues to cover its
costs.  The likelihood of the success of the Company must be considered in light
of the delays, uncertainties, difficulties and risks inherent in a new business,
many of which may be beyond the Company's  control.  These include,  but are not
limited to,  unanticipated  problems relating to product  development,  testing,
manufacturing, marketing and competition, and additional costs and expenses that
may exceed  current  estimates.  There can be no assurance  that  revenues  will
increase  significantly  in the  future or that the  Company  will ever  achieve
profitable operations.                                                          

         Independent  Auditor's Report as to Company's  Ability to Continue as a
Going Concern.  The Company has received a report from its independent  auditors
that includes an explanatory  paragraph regarding  uncertainty as to the ability
of the Company to continue as a going  concern.  Among the factors  cited by the
accountants as raising substantial doubt as to the Company's ability to continue
as a going  concern are that the Company was in  development  stage through June
1996, has incurred operating losses, is dependent on external sources of capital
and has a working  capital  deficiency and capital  deficiency.  The Company may
incur losses for the foreseeable  future due to the significant costs associated
with the  development,  manufacturing  and marketing of its GRADIUM products and
due to the continued research and development  activities that will be necessary
to further refine the Company's  technology and products and to develop products
with  additional  applications.  The Company  expects that the proceeds from the
Private Placement will enable it to fund its operations for fiscal year 1998.   

         Anticipation of Operating Losses;  Need for Additional  Financing.  The
Company anticipates  continuing to incur substantial operating losses for fiscal
year 1998 and until such time,  if ever, as the  Company's  operations  generate
sufficient   revenues  to  offset  its  costs.  The  Company  expects  to  incur
substantial  expenses  principally as the result of the various costs associated
with the Company's  continuing  research and  development  efforts to expand its
product line, capital expenditures for scale-up of manufacturing  operations and
implementation  of a sales and  marketing  program  and  distribution  channels,
recruitment  and  training of  personnel  and other  operating  activities.  The
Company's  potential  receipt of  revenues  from  product  sales are  subject to
substantial contingencies,  and there can be no assurances concerning the timing
and  amount  of  future  revenues  from  product  sales,  if  any.  The  Company
anticipates  that product sales and the net proceeds from the Company's  Private
Placement  completed  July 25, 1997 will be  sufficient to finance the Company's
working  capital  requirements  for at least  fiscal  year  1998,  although  the
Company's capital requirements are subject to numerous contingencies  associated
with a  company  in its  early  stages  of  operations.  The  Company's  capital
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requirements  after such period will  depend on the extent  that  GRADIUM  glass
becomes commercially accepted, if at all, and the Company's marketing program is
successful in generating sales  sufficient to sustain its operations.  There can
be no assurance that the Company will generate  sufficient  revenues to fund its
operations.  The Company may be required  to seek  additional  financing  in the
event the proceeds  from its July 1997  private  placement of Series A Preferred
Stock and September  1997 Series B Preferred  Stock are  insufficient  to offset
costs  associated  with  unanticipated  delays,  cost  overruns,   unanticipated
expenses  including  those  associated  with a  company  in an  early  stage  of
development or in the event the Company does not realize  anticipated  revenues.
The Company has no commitments from others to provide such additional  financing
and  there  can be no  assurance  that any  such  additional  financing  will be
available  if  needed  or,  if  available,  will be on terms  acceptable  to the
Company.  In the event such necessary  financing is not obtained,  the Company's
operations  will be materially  adversely  affected and the Company will have to
cease or substantially reduce operations. Any additional equity financing may be
dilutive  to  stockholders,  and debt  financings,  if  available,  may  involve
restrictive covenants.                                                          

         Early  Stage of  Development  of  Proposed  Products;  Need for  Market
Acceptance.  Through June 1996,  the  Company's  primary  activities  were basic
research and  development of glass material  properties.  The Company's  current
line of GRADIUM  products has not been widely sold ( approximately  90 customers
as of June 30,  1997) or  marketed.  While the  Company  believes  its  existing
products are  commercially  viable,  market  feedback may require the Company to
further  refine these  products.  Development  of additional  product lines will
require significant further research,  development,  testing and marketing prior
to commercialization.  In particular, the Company's lens technology will require
substantial  further  refinement  to  develop  products  capable  of  correcting
chromatic  optical  applications,  which is required  for many  optical  product
applications.  There can be no  assurance  that any  proposed  products  will be
successfully developed, demonstrate desirable optical performance, be capable of
being produced in commercial  quantities at reasonable  costs or be successfully
marketed.  In order for its  products  to  achieve  commercial  acceptance,  the
Company must educate the optical  components markets to create product awareness
and  demand,  and,  in large  part,  persuade  potential  customers  to redesign
existing products and retool existing assembly  processes in order to substitute
GRADIUM for existing  materials.  There can be no assurance that the Company can
accomplish the foregoing to the extent necessary to develop market acceptance of
its products.                                                                   

         Uncertainty of Commercialization of the Company's  Technology;  Limited
Number of Potential  Customers Testing the Company's  Technology.  The Company's
existing products have not yet achieved commercial acceptance.  To date, product
revenues received by the Company have been from purchasers  engaged in prototype
development, evaluation of the commercial application of the Company's products,
or other  research and  development  activities,  and purchases have not reached
commercial  quantities.  Although  the  Company is engaged in  negotiations  and
discussions with other potential  customers,  there can be no assurance that any
such  discussions  will lead to development of  commercially  viable products or
significant  revenues for the Company,  if any, or that any existing or products
developed in the future will attain  sufficient  market  acceptance  to generate
significant  revenues.  In order to  persuade  potential  customers  to purchase
GRADIUM products,  the Company will need to overcome industry resistance to, and
suspicion of,  gradient lens  technology  that has resulted from previous failed
attempts  by various  researchers  and  manufacturers  to develop a  repeatable,
consistent process for producing lenses with variable  refractive  indices.  The
Company must also  satisfy  prospective  customers  that it will be able to meet
their demand for quantities of GRADIUM  products,  since the Company will be the
sole  supplier  and  licensor.  The Company does not have an  established  track
record as a manufacturer  and, even after the Company's  February 1996 IPO, does
not have a substantial net worth. There can be no assurance that the Company can
accomplish the foregoing to the extent necessary to develop market acceptance of
its products.  Prospective customers will need to make substantial  expenditures
to redesign products to incorporate  GRADIUM lenses.  There can be no assurances
that potential  customers will view GRADIUM's  benefits as sufficient to warrant
such design expenditures.                                                       

         Dependence  on  Key  Personnel,  Need  for  Additional  Personnel.  The
operations  of the Company  depend to a  significant  extent upon the efforts of
Leslie A.  Danziger,  the  Company's  Chairman of the Board and  President,  who
conceived the Company's  technology and strategic plan and who is               
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substantially  responsible for planning and guiding the Company's direction.  In
addition,  the Company's  success  depends upon the  contributions  of Donald E.
Lawson, the Company's Executive Vice President,  whose  responsibilities for the
Company's operations are very substantial. Each of the foregoing officers has an
employment  agreement  with the Company that provides,  among other things,  for
severance compensation in certain events. The loss of any of these key employees
would  adversely  affect the  Company's  business.  The Company has obtained key
employee life insurance  policies in the amount of $3,000,000 on the life of Ms.
Danziger and $1,000,000 on the life of Mr. Lawson.  The Company had twenty-eight
employees  on June  30,  1997.  The  Company  intends  to hire  at  least  eight
additional  employees in the next twelve months.  Additional personnel will need
to be hired if the Company is able to successfully expand its operations.  There
can be no  assurance  that the  Company  will be able to  identify,  attract and
retain employees with skills and experience necessary and relevant to the future
operations of the Company's business.                                           

         Competition.  The optical  lens and  components  markets are  intensely
competitive  and  numerous  companies,  substantially  all of which have greater
financial and other  resources than the Company,  provide  products and services
that  compete  with those  offered by the  Company.  The Company  competes  with
manufacturers  of  conventional  spherical  lens  products and  aspherical  lens
products,  producers of optical  quality glass and other  developers of gradient
lens  technology  and  products.  In the markets for  conventional  and aspheric
lenses,  the  Company  will be  competing  against,  among  others,  established
international  industry  giants.  Many  of  these  companies  also  are  primary
customers for optical  components,  and therefore have significant  control over
certain  markets  for the  Company's  products.  The  Company  is aware of other
companies that are attempting to develop radial gradient lens technology, and it
is  possible  that  other  companies  of which the  Company is not yet aware are
attempting to develop axial  gradient lens  technology  similar to the Company's
technology.  There can be no assurance that existing or new competitors will not
develop  technologies that are superior to or more commercially  acceptable than
the Company's technology and products.                                          

         Limited  Marketing  and  Sales  Capabilities;  Fragmented  Market.  The
Company's  operating  results  will  depend to a large  extent on its ability to
educate the various  industries  utilizing optical glass about the advantages of
GRADIUM  and to  market  GRADIUM  products  to  the  participants  within  those
industries.  The Company currently has very limited  marketing  capabilities and
experience and will need to hire  additional  sales and marketing  personnel and
develop a sales and marketing program and sales  distribution  channels in order
to achieve and sustain commercial sales of its products. The Company has hired a
sales  staff and used a portion of the  proceeds of the IPO to develop its sales
and marketing program and recruit personnel. In addition,  while the Company has
developed a preliminary  marketing plan, there can be no assurance that the plan
will be  implemented  or, if  implemented,  will succeed in creating  sufficient
levels of customer  demand for the Company's  products.  The markets for optical
lenses and components are highly fragmented. Consequently, the Company will need
to target  particular  market segments in which it believes it may have the most
success.  It may be very  difficult for the Company to penetrate any  particular
market segment, and any attempt will require a substantial,  but unknown, amount
of effort and resources.  The fragmented  nature of the optical  products market
may  impede the  Company's  ability to  achieve  commercial  acceptance  for its
products.  The  Company's  success  will  depend in great part on its ability to
develop and implement a successful marketing and sales program.  There can be no
assurance that any marketing and sales efforts undertaken by the Company will be
successful or will result in any significant sales of the Company's products. If
the sales and  marketing  efforts  implemented  by the  Company do not  generate
expected revenues,  the Company may be required to seek additional  financing or
alter its business plan.                                                        

         Dependence on Patents and Proprietary Technology. The Company's success
will depend,  in part, on its ability to obtain  protection for its products and
technologies  under United States and foreign patent laws, to preserve its trade
secrets,  and to operate  without  infringing  the  proprietary  rights of third
parties.  There can be no  assurance  that patent  applications  relating to the
Company's  products or potential  products  will result in patents being issued,
that any issued patents will afford adequate protection to the Company or not be
challenged,  invalidated,  infringed or circumvented, or that any rights granted
thereunder will afford competitive advantages to the Company. Furthermore, there
can be no assurance that others have not  independently  developed,  or will not
independently  develop,  similar products and/or technologies,  duplicate any of
the Company's product or technologies, or, if patents are                       
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issued to, or licensed by, the Company, design around such patents. There can be
no  assurance  that  patents  owned or licensed by the Company and issued in one
jurisdiction will also issue in any other jurisdiction.  Furthermore,  there can
be no assurance that the Company can adequately preserve proprietary  technology
and processes that it maintains as trade secrets. An inability by the Company to
develop and adequately protect its proprietary technology and other assets could
have a material adverse effect on the Company's  business,  financial  condition
and results of operations.                                                      

         Dependence  on  Others.   The  Company's  strategy  for  the  research,
development and  commercialization  of certain of its products  entails entering
into  various   arrangements  with  corporate   partners,   original   equipment
manufacturers  (OEMs),  licensees and others in order to generate product sales,
license, royalties and other funds adequate for product development. The Company
may also rely on its collaborative partners to conduct research efforts, product
testing  and to  manufacture  and  market  certain  of the  Company's  products.
Although the Company believes that parties to any such  arrangements  would have
an   economic   motivation   to  succeed   in   performing   their   contractual
responsibilities,  the  amount and  timing of  resources  to be devoted to these
activities  may not be within the control of the  Company.  There can also be no
assurance  that  the  Company  will  be  successful  in  establishing  any  such
collaborative  arrangements  or  that,  if  established,  the  parties  to  such
arrangements will assist the Company in commercializing products.  Presently the
Company has entered into a development agreement with an endoscope  manufacturer
pursuant to which it has developed  prototype lenses.  There can be no assurance
that the  endoscope  manufacturer  will  progress to a  production  phase or, if
production  commences,  that the Company will receive significant  revenues from
this relationship.  In 1996, the Company terminated its agreement with a catalog
company to distribute  certain of its products on an exclusive basis.  While the
Company has no  agreement  with the catalog  company with  respect  thereto,  it
anticipates  continuing such relationship on a non-exclusive basis. In 1997, the
Company formalized relationships with six foreign distributors to create markets
for GRADIUM in their respective countries.  There can be no assurance that these
parties,  or any future partners,  will perform their obligations as expected or
that any revenue will be derived from such arrangements.                        

         Limited  Manufacturing  Capability.  Prior to the IPO,  the Company had
minimal experience in manufacturing optical components. In addition, the Company
had limited  resources to manufacture its products.  Proceeds from the Company's
February  1996 IPO were used to expand  its  manufacturing  facilities  and hire
personnel to scale-up production activities.  In March 1996, the Company entered
into a 5 year lease for a new corporate  headquarters  and larger  manufacturing
facility in Albuquerque, New Mexico. Within the 13,300 square foot facility, the
Company established its present  manufacturing  processes.  The Company believes
that  the  present  manufacturing  facilities  are  sufficient  for its  planned
operations over the next several years.  However,  the Company does not have any
experience  manufacturing  products in quantities  sufficient to meet commercial
demand.  If the Company is unable to  manufacture  its  products  in  sufficient
quantities and a timely manner to meet customer demand, the Company's  business,
financial  condition  and results of  operations  will be  materially  adversely
affected.                                                                       

         Product Liability Exposure.  The sale of the Company's optical products
will involve the inherent risk of product  liability claims against the Company.
The Company  currently does not maintain product liability  insurance  coverage,
but intends to procure such insurance in the future. Product liability insurance
is expensive,  subject to various coverage  exclusions and may not be obtainable
by the Company in the future on terms acceptable to the Company.  Moreover,  the
amount and scope of any coverage may be inadequate to protect the Company in the
event  that a product  liability  claim is  successfully  asserted  against  the
Company.                                                                        

         Immediate  and  Substantial  Dilution.  Purchasers  of  certain  of the
securities offered hereby will incur immediate  substantial  dilution in the per
share  net  tangible  book  value of  their  Class A  Common  Stock.  Therefore,
purchasers of the securities offered hereby will bear a proportionately  greater
risk of loss than the Company's current stockholders.                           

         Charge to Income in the Event of Conversion of Class E Common Stock. In
the event any shares of the Company's  Class E Common Stock held by stockholders
who are  officers,  directors,  employees  or  consultants  of the  Company  are
converted  into  shares  of  Class A  Common  Stock,  the  Company  will  record
compensation expense for financial reporting purposes during the period in which
such conversion  occurs.  Therefore,  if the Company attains any of the earnings
thresholds  or the                                                              
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Company's Class A Common Stock meets certain minimum bid prices required for the
conversion of the shares of Class E Common Stock, such conversion will be deemed
additional compensation expense of the Company.  Accordingly,  the Company will,
in the event of the conversion of the Class E Common Stock, recognize during the
period in which the reportable  earnings  thresholds are met or such minimum bid
prices obtained,  what could be a substantial  charge that would have the effect
of  significantly  increasing  the  Company's  reportable  loss or  reducing  or
eliminating  reportable  earnings,  if any, at such time. Such charge will equal
the fair  market  value of such  shares  on the date of  release,  which  may be
substantial.  Although  the amount of  compensation  expense  recognized  by the
Company will not affect the Company's total stockholders'  equity, it may have a
negative effect on the market price of the Company's  securities.  Since Class E
shares  are not  treated as  outstanding  for  purposes  of  earnings  per share
calculations,  the increase in the number of shares of Class A Common Stock upon
conversion  of any  series of Class E Common  Stock will  negatively  affect the
Company's earnings per share.                                                   

         Control by Present Holders of Common Stock; Voting Trust. The Company's
principal  stockholders  beneficially  owned  250,210  shares  of Class A Common
Stock, 1,106,809 shares of the combined Class E Common Stock, representing 9% of
the outstanding  Class A Common Stock, 28% of the combined  outstanding  Class E
Common Stock,  and 20% of the total  combined  voting power of all of the Common
Stock  outstanding at September 12, 1997. In addition,  certain  stockholders of
the Company  holding  approximately  18% of the total  voting power have entered
into a voting trust agreement. Additional stockholders may subsequently join the
voting trust.  Pursuant to the voting trust,  Leslie A. Danziger,  the Company's
Chairman  and  President,  is granted  the  authority  to vote all of the shares
subject to the voting trust on all matters that the Company's  stockholders  are
entitled to vote. Accordingly, Ms. Danziger will likely be able to influence the
election  of the  Company's  directors  and thereby  direct the  policies of the
Company.  The Series A Preferred Stock has no voting rights.  Consequently,  the
holders  thereof  will have no such  rights  until and  unless  such  shares are
converted into Class A Common Stock.                                            

         Future  Sales  of  Common   Stock.   As  of  the   September  15,  1997
approximately   69,000  shares  of  outstanding  Common  Stock  are  "restricted
securities"  as that  term is  defined  under  Rule 144  promulgated  under  the
Securities  Act of 1933, as amended (the  "Securities  Act"),  and under certain
circumstances may be sold without  registration  pursuant to such rule. Although
no significant sales have occurred,  the Company is unable to predict the effect
that sales made under Rule 144, or  otherwise,  may have on the then  prevailing
market  price  of  the  Company's   securities  although  any  future  sales  of
substantial  amounts of securities  pursuant to Rule 144 could adversely  affect
prevailing market prices.                                                       

         Dividends Unlikely.  The Company has not paid any cash dividends on its
Common  Stock  and does not  intend  to  declare  or pay cash  dividends  in the
foreseeable  future.  The  Company  expects  that it will  retain all  available
earnings, if any, to finance and expand its business.                           

         Arbitrary  Determination  of Warrant Exercise Price. The exercise price
of the  warrants  and  other  terms of such  securities  have  been  arbitrarily
established by negotiation  between the Company and one Underwriter with respect
to the Class A and Class B Warrants and with the placement agent with respect to
the  Series A  Preferred  Stock  and Class C and  Class D  Warrants,  and do not
necessarily  bear any  relationship to the Company's  asset value,  net worth or
financial condition of the Company or any generally recognized criteria of value
and should not be regarded as an  indication  of any future  market price of the
Company's securities.                                                           

         Effect of  Outstanding  Options  and  Warrants.  As of the date of this
Prospectus,  the  Company  has  outstanding  (i)  1,840,000  Class A Warrants to
purchase an aggregate of 1,840,000  shares of Class A Common Stock and 1,840,000
Class B Warrants;  (ii) 1,840,000 Class B Warrants to purchase  1,840,000 shares
of Class A Common Stock; (iii) the Selling Securityholders  Warrants to purchase
an  aggregate  of 839,000  shares of Class A Common  Stock and  839,000  Class B
Warrants;  (iv) the Unit  Purchase  Option to purchase an  aggregate  of 240,000
Units;  (v) 1,000,000 shares of Class A Common Stock reserved for the conversion
of Series A Preferred  Stock and exercise of Class C and Class D Warrants;  (vi)
outstanding  options at June 30, 1997 to purchase an aggregate of 304,669 shares
of Class A Common Stock,  149,504  shares of Class E-1,  149,504 shares of Class
E-2 and 99,669  shares of Class E-3 Common Stock and (vii)  1,500,000  shares of
Class A Common Stock reserved for the conversion of Series B Preferred Stock and
exercise of Class E and Class F Warrants.  As of June 30, 1997, the Company also
had an additional  145,025  shares of Class A Common Stock reserved for issuance
under its Omnibus  Incentive Plan and Directors  Stock  Incentive  Plan. For the
respective terms of such                                                        
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Warrants, options and the Unit Purchase Option, the holders thereof are given an
opportunity  to profit from a rise in the market price of the Company's  Class A
Common  Stock  with  a  resulting   dilution  in  the  interests  of  the  other
stockholders.  Further,  the terms on which the  Company  may obtain  additional
financing during that period may be adversely  affected by the existence of such
options and  Warrants.  The holders of the  Company's  outstanding  Warrants may
exercise  them at a time when the  Company  might be able to  obtain  additional
capital  through a new offering of securities on terms more favorable than those
provided therein.                                                               

         Potential Adverse Effect of Redemption of Warrants. Commencing February
22,  1997,  the Class A and Class B Warrants may be redeemed by the Company at a
redemption  price of $.05 per Warrant upon 30 days' notice  provided the average
closing  bid price (as  defined  herein) of the Class A Common  Stock for any 30
consecutive  trading  days  ending  within 15 days of the  notice of  redemption
exceeds $9.10,  in the case of the Class A Warrants,  or $12.25,  in the case of
the Class B Warrants  (subject to  adjustment  in each case).  Redemption of the
Warrants  could force the holders to exercise  the Warrants and pay the exercise
price at a time when it may be disadvantageous for the holders to do so, to sell
the Warrants at the then current market price when they might  otherwise wish to
hold the  Warrants,  or to accept the  redemption  price,  which is likely to be
substantially  less  than  the  market  value  of the  Warrants  at the  time of
redemption.                                                                     

         Possible   Adverse  Effects  of   Authorization   of  Preferred  Stock,
Anti-Takeover Provisions.  The Company's Certificate of Incorporation authorizes
the  issuance of 5,000,000  shares of "blank  check"  Preferred  Stock with such
designations,  rights and  preferences as may be determined from time to time by
the Board of  Directors.  Accordingly,  the  Board of  Directors  is  empowered,
without stockholder approval, to issue additional Preferred Stock with dividend,
liquidation, conversion, voting or other rights which could adversely affect the
voting power or other rights of the holders of the Company's  Common  Stock.  In
the  event of  issuance,  Preferred  Stock  could  be  utilized,  under  certain
circumstances,  as a method of discouraging,  delaying or preventing a change in
control  of the  Company.  The  Company  has  authorized  200 shares of Series A
Preferred Stock and 300 shares of Series B Preferred Stock, of which 180 and 230
shares, respectively, are currently issued and outstanding. Although the Company
has no present  intention to issue any  additional  shares of  Preferred  Stock,
there can be no  assurance  that the Company  will not do so in the  future.  In
addition,  the Company's Certificate of Incorporation  requires a super majority
vote of  stockholders  to approve certain  transactions,  a classified  Board of
Directors and certain other  provisions that may have the effect of discouraging
a change of  control  of the  Company.  Further,  the  Company is subject to the
provisions of Section 203 of the Delaware General Corporation Law which may have
the effect of discouraging  persons from pursuing a  non-negotiated  takeover of
the Company and delaying or preventing certain changes of control.              

         Limitation of Liability of  Directors.  The  Company's  Certificate  of
Incorporation  provides  that  directors of the Company  shall not be personally
liable for monetary  damages to the Company or its  stockholders for a breach of
fiduciary  duty as a  director,  subject to limited  exceptions.  Although  such
limitation of liability does not affect the  availability of equitable  remedies
such as injunctive relief or rescission, the presence of these provisions in the
Certificate  of  Incorporation  could  prevent the recovery of monetary  damages
against directors of the Company.                                               

         Possible  Adverse  Effect on the Liquidity of the Company's  Securities
Due to Securities and Exchange  Commission  Investigation of the IPO Underwriter
and Blair & Co. and Recent  Settlement by Blair & Co. with NASD.  The Securities
and Exchange  Commission  (the  "Commission")  is  conducting  an  investigation
concerning  various business  activities of the Underwriter in the Company's IPO
and D.H.  Blair & Co.,  Inc.,  ("Blair  & Co.") a  selling  group  member  which
distributed a substantial portion of the IPO Units. The Company has been advised
by the Underwriter that the  investigation  has been ongoing since at least 1989
and  that it is  cooperating  with the  investigation.  The  Underwriter  cannot
predict  whether  this  investigation  will  ever  result  in any type of formal
enforcement action against the Underwriter or Blair & Co.                       

         In July 1997,  Blair & Co.,  its Chief  Executive  Officer and its head
trader consented,  without admitting or denying any violations,  to a settlement
with the NASD Regulation, Inc. ("NASDR"), the regulatory oversight subsidiary of
the National Association of Securities Dealers,  Inc. ("NASD") District         
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Business  Conduct  Committee  for District No. 10 to resolve  allegation of NASD
rule and  securities  law  violations  in  connection  with  mark-up and pricing
practices  and  adequacy of  disclosures  to customers  regarding  market-making
activities of Blair & Co. in connection  with certain  securities  issues during
the period  from June 1993  through  May 1995 where  Blair & Co. was the primary
selling group member.  NASDR alleged the firm failed to accurately calculate the
contemporaneous  cost of  securities in instances  where the firm  dominated and
controlled  after-market  trading,  thereby  causing  the  firm  to  charge  its
customers excessive mark-ups.  NASDR also alleged the firm did not make adequate
disclosure to customers  about its  market-making  activities in two issues.  As
part of the  settlement,  Blair & Co. has consented to censure and has agreed to
pay a $2 million fine,  make $2.4 million in  restitution  to retail  customers,
employ  an   independent   consultant   for  two   years  to  review   and  make
recommendations  to  strengthen  the  firm's  compliance  procedures,   and  has
undertaken  for twelve  months not to sell to its  retail  customers  (excluding
banks and other  institutional  investors) more than 60% of the total securities
sold in any securities  offering in which it  participates  as an underwriter or
selling group member.  The Chief Executive  Officer of Blair & Co. has agreed to
settle failure to supervise  charges by consenting to a censure,  the imposition
of a $300,000 fine and a 90-day suspension from associating with any member firm
and has undertaken to take certain requalification examinations.  The settlement
with NASDR does not involve or relate to the  Underwriter,  its chief  executive
officer or any of its other officers or directors.                              

         Blair & Co. currently makes a market in the Company's  securities.  The
Company is unable to predict whether Blair & Co.'s  settlement with the NASDR or
any  unfavorable  resolution  of the  Commission's  investigation  will have any
effect on such firm's ability to make a market in the Company's  securities and,
if so,  whether the  liquidity  or price of the  Company's  securities  would be
adversely affected.                                                             

         Possible   Restrictions  on   Market-Making   Activities  in  Company's
Securities.  Blair & Co. makes a market in the Company's securities.  Regulation
M,  which was  recently  adopted  to replace  Rule  10b-6  under the  Securities
Exchange Act of 1934, as amended (the  "Exchange  Act") may prohibit Blair & Co.
from  engaging in any  market-making  activities  with  regard to the  Company's
securities for the period of up to five business days (or such other  applicable
period as Regulation M may provide) prior to any solicitation by the Underwriter
of the  exercise  of  Class A and  Class  B  Warrants  until  the  later  of the
termination  of such  solicitation  activity  or the  termination  (by waiver or
otherwise) of any right that such  Underwriter may have to receive a fee for the
exercise of Warrants following such solicitation.  As a result,  Blair & Co. may
be unable to  provide  a market  for the  Company's  securities  during  certain
periods while the Warrants are exercisable.  In addition, under applicable rules
and regulations  under the Exchange Act, any person engaged in the  distribution
of the Class A Warrants  issued to the Bridge  Securityholders  and  offered for
sale may not simultaneously  engage in market-making  activities with respect to
any securities of the Company for the applicable  restricted period prior to the
commencement of such distribution.  Accordingly, in the event the Underwriter or
Blair & Co.  engages in a  distribution  of any of the Selling  Securityholders'
Warrants,  neither of such firms will be able to make a market in the  Company's
securities during the applicable  restrictive period. Any temporary cessation of
such  market-making  activities could have an adverse effect on the market price
of the Company's securities.                                                    

         Risk of Low-Priced  Stock.  If the Company's  securities  were delisted
from Nasdaq (See "Risk Factors--Nasdaq  Listing and Maintenance  Requirements"),
they could become  subject to Rule 15g-9 under the Exchange  Act,  which imposes
additional  sales  practice  requirements  on  broker-dealers  which  sell  such
securities  to  persons  other  than   established   customers  and  "accredited
investors"  (generally,  individuals  with net worth in excess of  $1,000,000 or
annual incomes exceeding $200,000, or $300,000 together with their spouses). For
transactions  covered  by  this  rule,  a  broker-dealer  must  make  a  special
suitability  determination  for the purchaser and have received the  purchaser's
written consent to the transaction  prior to sale.  Consequently,  such rule may
adversely affect the ability of broker-dealers to sell the Company's  securities
and may adversely affect the ability of purchasers in the IPO to sell any of the
securities acquired hereby in the secondary market.                             

         The Commission has adopted  regulations which generally define a "penny
stock" to be any non-Nasdaq  equity security that has a market price (as therein
defined)  of less than  $5.00 per share or with an  exercise  price of less than
$5.00 per share, subject to certain exceptions.  For any transaction            
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involving a penny stock, unless exempt, the rules require delivery, prior to any
transaction  in a  penny  stock,  of  a  disclosure  schedule  prepared  by  the
Commission relating to the penny stock market. Disclosure is also required to be
made about  commissions  payable to both the  broker-dealer  and the  registered
representative  and current  quotations  for the  securities.  Finally,  monthly
statements are required to be sent disclosing  recent price  information for the
penny stock held in the account and  information  on the limited market in penny
stocks.                                                                         

         The foregoing  required penny stock  restrictions will not apply to the
Company's  securities if such  securities  are listed on Nasdaq and have certain
price and volume information  provided on a current and continuing basis or meet
certain minimum net tangible assets or average revenue criteria. There can be no
assurance  that the Company's  securities  will qualify for exemption from these
restrictions.  In any event,  even if the Company's  securities were exempt from
such  restrictions,  it would remain subject to Section 15(b)(6) of the Exchange
Act,  which gives the  Commission  the  authority to prohibit any person that is
engaged in unlawful  conduct while  participating  in a distribution  of a penny
stock from  associating  with a broker-dealer or participating in a distribution
of a penny stock,  if the Commission  finds that such a restriction  would be in
the public interest.                                                            

         If the  Company's  securities  were subject to the existing or proposed
rules on penny stocks,  the market liquidity for the Company's  securities could
be severely adversely affected.                                                 

         Non-Registration  in Certain  Jurisdictions  of Shares  Underlying  the
Warrants and Preferred Stock; Need for Current Prospectus.  Although none of the
securities  offered hereby will knowingly be sold to purchasers in jurisdictions
in which such  securities  are not  registered or otherwise  qualified for sale,
purchasers may buy such securities or the components  thereof in the aftermarket
in,  or may move  to,  jurisdictions  in which  the  securities  underlying  the
Warrants and  Preferred  Stock are not so  registered  or  qualified  during the
period that the Warrants are  exercisable or the Preferred Stock is convertible.
In this event,  the Company would be unable to issue shares  and/or  Warrants to
those persons  desiring to exercise  their  Warrants or convert their  Preferred
Stock unless and until the underlying  securities could be qualified for sale in
jurisdictions  in  which  such  purchasers  reside,  or  an  exemption  to  such
qualification  exists in such jurisdiction.  In addition,  investors will not be
able to exercise their Warrants or convert their Preferred Stock,  unless at the
time of exercise  the Company has a current  prospectus  covering  the shares of
Class A Common Stock and Class B Warrants  underlying  the Warrants or Preferred
Stock,  as the case may be. No assurances  can be given that the Company will be
able to effect any required  registration or qualification or maintain a current
prospectus.                                                                     

         Nasdaq Listing and  Maintenance  Requirements,  Risk of Delisting.  The
Units,  Class A Common  Stock  and Class A and Class B  Warrants  are  currently
traded on Nasdaq  SmallCap  Market.  Under the rules for  continued  listing  on
Nasdaq SmallCap Market, a company is required to maintain at least $2,000,000 in
"net tangible  assets"  ("net  tangible  assets"  equals total assets less total
liabilities  and goodwill) or at least  $35,000,000  in total market value or at
least $500,000 in net income in two out of its last three fiscal years,  as well
as at least 500,000 shares in public float, at least  $1,000,000 in market value
of the  public  float and a price of not less than  $1.00  per  share,  and meet
certain corporate  governance  standards.  Upon notice of a deficiency in one or
more of the  maintenance  requirements,  the Company  would be given 90 days (30
days in the case of the number of  market-makers) to comply with the maintenance
standards. Failure of the Company to meet the maintenance requirements of Nasdaq
could result in the Company's  securities  being delisted from Nasdaq,  with the
result that the Company's securities would trade on the OTC Bulletin Board or in
the "pink sheets" maintained by the National Quotation Bureau Incorporated. As a
consequence  of such  delisting,  an investor  could find it more  difficult  to
dispose  of or to  obtain  accurate  quotations  as to the  market  value of the
Company's securities. Among other consequences,  delisting from Nasdaq may cause
a decline in the stock price and difficulty in obtaining future financing.      

         Stock Market Volatility.  There have been periods of extreme volatility
in the  stock  market,  which in many  cases  were  unrelated  to the  operating
performance of, or announcements concerning,  the issuers of the affected stock.
General market price declines or market volatility in the future could adversely
affect  the  price of the  Common  Stock and the  Warrants.  In  certain  cases,
volatility  in the price of a given  security  can  result  from the  short-term
trading  strategies of certain  market  segments.  Such  volatility  can distort
market   value  and  can  be   particularly   severe  in  the  case  of  smaller
capitalization  stocks and  immediately  before or after an important  corporate
event such as a public offering.                                                
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         Risk of  Insufficient  Funds  Available to Effect  Redemptions.  In the
events of conversion of the Series A or Series B Preferred  Stock or exercise of
their  accompanying  Warrants in a manner that would cause an undue  dilution of
its Common Stock,  the Company has the right to redeem such preferred  stock and
warrants for cash. In addition, a Liquidation Event (as defined in the Company's
Certificate of Designation)  may require  redemption of the Series A or Series B
Preferred  Stock  for  cash.  There  can be no  assurance  that in either of the
foregoing  events that the Company will have  adequate  cash to effect such cash
redemptions.                                                                    

 USE OF PROCEEDS

         Holders of Warrants are not  obligated to exercise  their  Warrants and
there can be no assurance that the Warrantholders will choose to exercise all or
any of their Warrants.  In the event that all of the 1,840,000 outstanding Class
A Warrants and all of the 3,680,000  Class B Warrants  outstanding  and issuable
upon the  exercise of the  outstanding  Class A Warrants  (excluding  the Bridge
Securityholders and Unit Purchase Option) are exercised, the net proceeds to the
Company  would  be  approximately   $41,952,000,   after  deducting   applicable
solicitation  fees.  In the event that all of the  320,000  outstanding  Class C
Warrants and all of the 64,000 Class D Warrants  outstanding are exercised,  the
Company would receive additional net proceeds of approximately $2,161,920.      

         The Company intends to use the net proceeds  received upon the exercise
of the  Warrants,  if any,  for general  corporate  purposes,  expansion  of the
manufacturing  facility  and  working  capital  to  support  anticipated  growth
including research and development  programs and continuing product development.
All proceeds from the resale of any  securities  offered hereby will be received
by the respective Selling Securityholders.                                      

 DETERMINATION OF OFFERING PRICE

         This  prospectus  may  be  used  from  time  to  time  by  the  Selling
Securityholders to sell the offered securities. The offering price of such Class
A Common Stock will be determined by the Selling  Securityholders and such sales
may be made in the Nasdaq SmallCap  Market or otherwise,  at prices and at terms
then  prevailing or at prices  related to the then current  market price,  or in
negotiated transactions.                                                        

 SELLING SECURITYHOLDERS

         An aggregate of 839,000  Class A Warrants,  each  exercisable  into one
share of Class A Common  Stock and one Class B  Warrant,  may be  offered by the
Bridge  Securityholders who received their Class A Warrants in connection with a
private  placement  completed by the Company in November  1995.  An aggregate of
320,000  Class C Warrants,  and 64,000 Class D Warrants  converting to one share
each  Class  A  Common   Stock  may  be  offered   by  the   Private   Placement
Securityholders  who purchased  their Class C and Class D Warrants in connection
with a private placement completed by the Company in July 1997.                 

         The following table sets forth certain information with respect to each
Bridge  Securityholder  and each Private Placement  Securityholder  for whom the
Company is registering securities for resale to the public. The Company will not
receive  any of the  proceeds  from  the  sale of these  securities.  Except  as
described below, there are no material  relationships  between any of the Bridge
Securityholders or Private Placement  Securityholder  and the Company,  nor have
any such material relationships existed within the past three years.            

                                                                · Download Table

                                     Number of Warrants Beneficially Owned and
                                     Maximum Number to be sold                
                                 Class A          Class C           Class D   
Selling  Securityholders  -   Warrants (1)      Warrants (2)      Warrants (2)
-------------------------     ------------      ------------      ------------
                                                                              
Magid Abraham                         50,000                                  
William Aden                          35,000                                  
Bruce Barrus                           8,500                                  
Thomas J. & Dorothy M. Biuso          12,500                                  
Burns Family Trust                     1,200                                  
Kenneth & Sherry Cohen                12,500                                  

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                                                        · Enlarge/Download Table
                                                                                            
David B. Cornstein                               25,000                                     
Benjamin Danziger                                21,000                                     
Charles Garcia                                    7,500                                     
Irving L. Goldman                                25,000                                     
Stuart Gruber                                    12,500                                     
Kenneth Hoffer                                   15,000                                     
Herman S. Howard                                 50,000                                     
Michael Jesselson 12/18/80 Trust                 25,000                                     
Jesselson Grandchildren 12/18/80 Trust           50,000                                     
Robert & Eileen Jordan                           12,500                                     
Milton Klein                                     16,000                                     
Guy Knolle                                       17,500                                     
Louis Leeburg                                     7,500                                     
William Leeburg                                  15,000                                     
William Leeburg Profit Sharing Plan              15,000                                     
Lenny Corp                                       12,500                                     
William J. Lipkin                                12,500                                     
Gloria Mavra                                     25,000                                     
Charles Bechert                                   7,500                                     
James S. Mulholland, Sr.                         37,500                                     
Ray & Vita Pliskow                               17,000                                     
Robin Prever                                     25,000                                     
Marc Roberts                                     25,000                                     
Robert Roberts                                    7,500                                     
F.B. Rooke & Sons                                18,000                                     
Alan J. Rubin                                    25,000                                     
Robert & Daniel Ruscutti                         12,500                                     
Anand J. Sathe                                   12,500                                     
Louise Schrier                                   50,000                                     
E. Donald Shapiro                                12,500                                     
Gary J. Strauss                                  12,500                                     
Morris Talansky                                  12,500                                     
Leonard R. and Jane G. Wohletz, Jr.              12,500                                     
Wolfson Equities                                 50,000                                     
Martin Zelman                                    12,500                                     
Cranshire Capital LLP                                              26,667                   
EP Opportunity Fund, LLC                                           62,222                   
Lakeshore International, LTD                                       44,444                   
The Matthew Fund                                                   35,556                   
Keyway Investments, LTD                                            80,000                   
Namax Corp.                                                        17,778                   
G.P.S. Fund, LTD                                                    8,889                   
Legong Investments N.V.                                            44,444                   
Swartz Family Partnership, LP                                                        15,750 
Kendrick Family Partnership, LLP                                                     15,750 
Brad Hathorn                                                                          2,300 
Jerry Harris                                                                          5,450 
Carl Johnson                                                                          2,000 
Davis Holden                                                                          3,000 
Frank Mauro                                                                          15,750 
Chuck Whiteman                                                                        3,000 
Dwight Bronnum                                                                          500 
Robert Hopkins                                                                          500 
                                        ---------------- ----------------- -----------------
                       Total                    839,000           320,000            64,000 
                                        ---------------- ----------------- -----------------

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     (1)  Does not include  shares of Class A Common  Stock and Class B Warrants
          issuable upon exercise of the Class A Warrants and the shares of Class
  A Common Stock issuable upon exercise of the Class B Warrants.
     (2)  Number indicated  denotes shares of Class A Common Stock issuable upon
          exercise of the Class C and Class D Warrants.  Does not include shares
          of Class A Common Stock issuable upon conversion of Series A Preferred
Stock, and held by holder of the Class C Warrants.          

         With the exception of Milton Klein, a director of the Company; Benjamin
Danziger,  the father of Leslie A. Danziger,  Louis Leeburg,  a principal of the
John E. Fetzer  Institute and a principal  stockholder of the Company,  and, the
Burns Family Trust, another principal  stockholder of the Company,  there are no
material  relationships  between  any  of the  Bridge  Securityholders  and  the
Company, nor have any such material  relationships existed within the past three
years.  The  Company  has been  informed  by the  Underwriter  that there are no
agreements between the Underwriter and any Bridge  Securityholder  regarding the
distribution  of  the  Bridge  Securityholders   Warrants  or  their  underlying
securities.                                                                     

         Class D Warrants  were issued to the  placement  agent along with a 10%
placement fee for their  compensation  in connection  with the July 1997 private
placement of Series A Preferred Stock.                                          

PLAN OF DISTRIBUTION

Bridge Securityholders                                                          

         The  shares  of Class A Common  Stock  issuable  upon  exercise  of the
Warrants are being offered directly by the Company pursuant to the terms of such
Warrants. No underwriter is being utilized in connection with this offering. Any
securities  offered hereby for resale shall be offered  directly by such selling
securityholder.                                                                 

         The  Company  has agreed to pay D.H.  Blair  Investment  Banking  Corp.
("Blair") a Solicitation Fee of 5% of the aggregate exercise price of each Class
A and Class B Warrant which is exercised, if (I) the market price of the Class A
Common  Stock on the date of the Warrant is  exercised  is greater than the then
exercise price of the Warrant; (ii) the exercise of the Warrant was solicited by
a member of the NASD; (iii) the Warrant is not held in a discretionary  account;
(iv)  disclosure of compensation  arrangements  was made both at the time of the
offering and at the time of exercise of the Warrant; and (v) the solicitation of
exercise of the Warrants was not in  violation  of  Regulation M as  promulgated
under the Exchange Act or applicable  state  securities laws. Any costs incurred
by the Company in connection  with the exercising of the Warrants shall be borne
by the Company.                                                                 

         Blair acted as the  underwriter  of the  Company's  IPO in February and
March  1996.  Other than the  securities  underlying  the Unit  Purchase  Option
granted to Blair in  connection  with the IPO,  the  Company is not aware of any
other  securities of the Company owned by Blair. In connection with the IPO, the
Company and Blair agreed to indemnify each other against certain  liabilities in
connection with the IPO and this offering including liabilities under the Act.  

         In  connection  with the IPO,  the Company  sold to Blair,  for nominal
consideration,  the Unit Purchase  Option to purchase up to 160,000 IPO Units at
an  exercise  price of $6.75  per IPO Unit.  The Unit  Purchase  Option  and the
underlying  securities  cannot be transferred,  sold, or assigned until February
22, 1998, except to officers of Blair or to any NASD member participating in the
IPO and is exercisable during the period commencing February 22, 1998 and ending
February 22, 2001.                                                              

         The Company  entered into an  agreement  with Blair  providing  for the
payment of a fee to Blair, in the event that Blair  originates a merger or other
acquisition  transaction to which the Company is a party.  The fee is based on a
percentage of the consideration  paid in the transaction  ranging from 7% of the
first $1,000,000 to 2 1/2% of any consideration in excess of $9,000,000.        

         Unless granted an exemption by the Commission  from Regulation M, Blair
will be prohibited from engaging in any market making  activities with regard to
the Company's  securities  for the period from nine business days (or such other
applicable  period as Regulation M may provide) prior to any solicitation of the
exercise of Warrants  until the later of the  termination  of such  solicitation
activity or the                                                                 
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termination (by waiver or otherwise) of any right that Blair may have to receive
a fee for the exercise of Warrants  following  such  solicitation.  As a result,
Blair may be unable to  continue  to make a market in the  Company's  securities
during certain periods while the Warrants are  exercisable.  See "Risk Factors -
Possible Restrictions on Market-Making Activities in Company's Securities".     

         The exercise  prices of the Warrants  were  determined  by  negotiation
between the Company and Blair and are not  necessarily  related to the Company's
asset value, net worth or other established criteria of value.                  

         Blair  acted as a  placement  agent  in  connection  with  the  private
placement  of Bridge Notes and warrants  completed in November  1995.  Blair has
informed  the  Company  that  The  Securities  and  Exchange   Commission   (the
"Commission")  is  conducting  an  investigation   concerning  various  business
activities of the  Underwriter  in the Company's IPO and D.H. Blair & Co., Inc.,
("Blair & Co.") a selling group member which  distributed a substantial  portion
of the IPO Units.  The  Company  has been  advised by the  Underwriter  that the
investigation  has been ongoing  since at least 1989 and that it is  cooperating
with  the   investigation.   The   Underwriter   cannot  predict   whether  this
investigation  will ever result in any type of formal enforcement action against
the  Underwriter  or Blair & Co. See "Risk Factors - Possible  Adverse Effect on
the  Liquidity  of the  Company's  Securities  Due to  Securities  and  Exchange
Commission  Investigation  of the IPO  Underwriter  and Blair & Co.  and  Recent
Settlement by Blair & Co. with NASD".                                           

Private Placement Securityholders                                               

         The Private  Placement  Securities may be sold from time to time by the
Private Placement Securityholders,  or by pledgees, donees, transferees or other
successors in interest. Such sales may be made in the over-the-counter market or
otherwise,  at prices and at terms then  prevailing or at prices  related to the
then current market price, or in negotiated transactions.  The Private Placement
Securities  may be sold in one or more of the following  types of  transactions:
(a) a block trade in which the broker-dealer so engaged will attempt to sell the
Private  Placement  Securities as agent but may position and resell a portion of
the block as  principal  to  facilitate  the  transaction;  (b)  purchases  by a
broker-dealer  as  principal  and resale by such  broker-dealer  for its account
pursuant to this Prospectus; (c) an exchange distribution in accordance with the
rules of such exchange; and (d) ordinary brokerage transactions and transactions
in which the broker  solicits  purchasers.  In effecting  sales,  broker-dealers
engaged  by  the  Private  Placement   Securityholders  may  arrange  for  other
broker-dealers to participate in the resales.                                   

         In connection with distributions of the Private Placement Securities or
otherwise,  the  Private  Placement   Securityholders  may  enter  into  hedging
transactions  with   broker-dealers.   In  connection  with  such  transactions,
broker-dealers may engage in short sales of the Private Placement  Securities in
the  course  of  hedging  the  positions  they  assume  with  Private  Placement
Securityholders.  The Private  Placement  Securityholders  may also sell Private
Placement  Securities  short and redeliver the Private  Placement  Securities to
close out such short positions.  The Private Placement  Securityholders may also
enter into option or other  transactions with  broker-dealers  which require the
delivery to the  broker-dealer of the Private  Placement  Securities,  which the
broker-dealer may resell or otherwise transfer pursuant to this Prospectus.  The
Private  Placement  Securityholders  may also loan or pledge  Private  Placement
Securities  to a  broker-dealer  and the  broker-dealer  may  sell  the  Private
Placement  Securities so loaned or, upon a default, the broker-dealer may effect
sales of the pledged Private Placement Securities pursuant to this Prospectus.  

         Broker-dealers  or  agents  may  receive  compensation  in the  form of
commissions, discounts or concessions from the Private Placement Securityholders
in amounts to be negotiated in connection with the sale. Such broker-dealers and
any other participating broker-dealers may be deemed to be "underwriters" within
the meaning of the  Securities  Act in  connection  with such sales and any such
commission, discount or concession may be deemed to be underwriting discounts or
commissions  under the Securities  Act. In addition,  any securities  covered by
this  Prospectus  which  qualify for sale pursuant to Rule 144 may be sold under
Rule 144 rather than pursuant to this Prospectus.                               
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         All costs, expenses and fees in connection with the registration of the
securities  offered  hereby  will  be  borne  by  the  Company.  Commission  and
discounts, if any, attributable to the sales of the Private Placement Securities
will be borne by the Private  Placement  Securityholders.  The Private Placement
Securityholders   may  agree  to  indemnify  any  broker-dealer  or  agent  that
participates in transactions involving sales of the Private Placement Securities
against certain liabilities,  including liabilities arising under the Securities
Act.  The  Company  and the  Private  Placement  Securityholders  have agreed to
indemnify  certain persons  including  broker-dealers  or agents against certain
liabilities in connection with the offering of the Private Placement Securities,
including   liabilities   arising   under  the   Securities   Act.   Insofar  as
indemnification  for  liabilities  arising  under  the  Securities  Act  may  be
permitted to directors, officers or persons controlling the Company, the Company
has been informed that in the opinion of the Commission such  indemnification is
against  public  policy as  expressed  in the  Securities  Act and is  therefore
unenforceable.                                                                  

 DESCRIPTION OF SECURITIES

         For a description  of the Company's  Class A Common Stock,  the Class A
Warrants and Class B Warrants,  see the Company's Registration Statement on Form
SB-2 dated  December 7, 1995,  filed with the  Commission  and  incorporated  by
reference into this Prospectus.                                                 

         Each Class C Warrant entitles the holder to purchase one Class A Common
Stock at $5.63 per share at any time  through  July  2000.  Each Class D Warrant
entitles  the holder to purchase  one Class A Common Stock at $5.63 per share at
any time through July 2002. For a description of the Class C Warrant and Class D
Warrants see Exhibit 4.7 and Exhibit 4.8 filed herein.                          

 LEGAL MATTERS

         Certain  legal  matters with respect to the Company and the validity of
the  securities  offered  hereby  will be passed upon for the Company by Squire,
Sanders & Dempsey L.L.P., Phoenix, Arizona.                                     

INTEREST OF NAMED EXPERTS AND COUNSEL 

         On October 13, 1997,  James L. Adler,  Jr. was  appointed to serve as a
Director of the Company for a three year term. Mr. Adler is a partner of the law
firm of Squire, Sanders & Dempsey, L.L.P.                                       

EXPERTS 

         The financial  statements  of the Company as of June 30, 1997,  and for
the year then ended,  have been  incorporated by reference in this Prospectus in
reliance upon the report of KPMG Peat Marwick LLP, independent  certified public
accountants,  incorporated by reference  herein,  and upon the authority of said
firm as experts in accounting and auditing.                                     

         The  report  of KPMG  Peat  Marwick  LLP  covering  the June 30,  1997,
financial  statements  contains an  explanatory  paragraph  that states that the
Company's recurring losses from operations and resulting continued dependence on
external sources of capital raise  substantial  doubt about the entity's ability
to continue as a going  concern.  The  financial  statements  do not include any
adjustments that might result from the outcome of that uncertainty.             

         The statements of operations,  stockholders'  equity (deficiency in net
assets),  and cash  flows of the  Company,  for the year  ended  June 30,  1996,
incorporated by reference in this Prospectus, have been audited by Ernst & Young
LLP, independent  auditors, to the extent indicated in their report thereon also
incorporated by reference (which contains an explanatory  paragraph with respect
to going  concern  mentioned  in the Notes to the  financial  statements).  Such
financial statements have been incorporated herein by reference in reliance upon
such report given upon the authority of such firm as experts in  accounting  and
auditing.                                                                       
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         No dealer, salesman or any other person has been authorized to give any
information or to make any  representations  other than those  contained in this
Prospectus in connection with the offer made by this Prospectus and, if given or
made,  such  information and  representations  must not be relied upon as having
been authorized by the Company or the Selling  Securityholders.  This Prospectus
does not constitute an offer to sell or the solicitation of any offer to buy any
security other than the shares of Common Stock offered by this  Prospectus,  nor
does it  constitute an offer to sell or a  solicitation  of any offer to buy the
shares of Common  Stock by anyone in any  jurisdiction  in which  such  offer or
solicitation  is not  authorized,  or in which the person  making  such offer or
solicitation  is not qualified to do so, or to any person to whom it is unlawful
to make such offer or solicitation.  Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any  circumstances,  create any implication
that  information  contained  herein is correct as of any time subsequent to the
date hereof.                                                                    

----------------------
 TABLE OF CONTENTS
                                    Page
                                    ----
Available Information              3
Prospectus Summary                 5
Risk Factors                       9
Use of Proceeds                   17
Determination of Offering Price   17
Selling Securityholders           17
Plan of Distribution              19
Description of Securities         21
Legal Matters                     21
Experts                           21

----------------------

LIGHTPATH TECHNOLOGIES, INC.

1,840,000 Units, each consisting of one Share of Class A Common Stock and one 
Redeemable B Warrant, issuable upon the exercise of outstanding Redeemable Class
A Warrants and 1,840,000 Shares of Class A Common Stock issuable upon the 
exercise of Redeemable Class B Warrants underlying such Class A Warrants and
1,840,000 Shares of Class A Common Stock issuable upon the exercise of
outstanding Redeemable Class B Warrants Underlying such Class A Warrants

839,000 Redeemable Class A Warrants to Purchase 839,000 Shares of Class A Common
Stock and 839,000 Redeemable Class B Warrants to Purchase 839,000 Shares of 
Class A Common Stock, and 2,517,000 shares of Class A Common Stock issuable upon
the exercise of such Class A and Class B Warrants 
 And
1,000,000 Shares of Class A Common Stock issuable upon the conversion of Series 
A Preferred Stock and exercise of Redeemable Class C Warrants and Redeemable
Class D Warrants

----------------------
PROSPECTUS
----------------------
October 30, 1997
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Dates Referenced Herein and Documents Incorporated By Reference

		Referenced-On Page
This 424B2 Filing	Date	First	Last	Other Filings

	12/7/95	21
	1/13/96	3
	6/30/96	9	21	10KSB
	2/22/97	2	14
	6/30/97	3	21	10KSB40
	7/25/97	9
	9/11/97	3		10KSB40, DEF 14A
	9/12/97	13
	9/15/97	4	13
	10/13/97	21		DEF 14A, PRE 14A
	10/30/97	2	22
Filed On / Filed As Of	10/31/97
	11/5/97
	2/22/98	7	19
	2/22/1	1	19

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Lightpath Technologies Inc · 424B2 · On 10/31/97

Filed On 10/31/97 · SEC File 333-37443 · Accession Number 950147-97-741

Prospectus · Rule 424(b)(2)Filing Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated By Reference

Prospectus · Rule 424(b)(2)
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