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Foreign Operations

6 Months Ended

Dec. 31, 2024

13. Foreign Operations

Assets and liabilities denominated in non-U.S. currencies are translated at rates of exchange prevailing on the balance sheet date, and revenues and expenses are translated at average rates of exchange for the period. Gains or losses on the translation of the financial statements of a non-U.S. operation, where the functional currency is other than the U.S. dollar, are reflected as a separate component of equity, which was a cumulative gain of approximately $330,000 and $510,000 as of December 31, 2024 and June 30, 2024, respectively. We also recognized net foreign currency transaction gains of $40,000 and $4,000 during the three months ended December 31, 2024 and 2023, respectively. During the six months ended December 31, 2024 and 2023, we recognized net foreign currency transaction gains of $4,000 and $29,000, respectively, included in the unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) in the line item entitled “Other income (expense), net.”

Our cash, cash equivalents and restricted cash totaled approximately $3.2 million at December 31, 2024. Of this amount, approximately 60% was held by our foreign subsidiaries in China and Latvia. These foreign funds were generated in China and Latvia as a result of foreign earnings. With respect to the funds generated by our foreign subsidiaries in China, the retained earnings of the respective subsidiary must equal at least 50% of its registered capital before any funds can be repatriated through dividends. As of December 31, 2024, LPOIZ had approximately $1.2 million in retained earnings available for repatriation, based on earnings accumulated through December 31, 2024, the end of the most recent statutory tax year, that remained undistributed as of December 31, 2024.

Revenues from foreign countries for the six months ended December 31, 2024 and 2023 are as follows:

	Six Months Ended December 31,
	2024		2023
Revenues:
United States	$	10,628,649	$	8,640,498
Europe		2,589,988		4,521,846
China		1,324,301		1,217,955
Other Asian countries		482,518		614,037
Rest of world		799,754		398,549
	$	15,825,210	$	15,392,885

Long-lived assets located in foreign countries as of December 31, 2024 and June 30, 2024 are as follows:

	December 31, 2024		June 30, 2024
Long-lived assets:
United States	$	23,372,056	$	24,989,477
Latvia		4,517,296		4,961,741
China		2,290,539		2,615,410
	$	30,179,891	$	32,566,628