LightPath Technologies says it has raised approximately USD2,929,000 through the sale of 8% convertible debentures to a group of institutional and private investors for growth in China.

LightPath's CEO Jim Gaynor stated, "We are pleased that in this difficult financial environment we were able to complete our offering. The proceeds will help us continue to fuel our marketing efforts and increase our growth in China. We will be announcing our interim financial results for the fourth quarter in August and final results are planned for the second half of September. We anticipate that those results will reflect continued progress on our expanding revenue base and sustained reductions in our fixed overhead structure as well as our variable costs."

LightPath will utilize some of the proceeds to make an undefined modest investment in the imaging consumer market for cell phones and digital cameras in China. The investment will be for an optical design team, sales staff and manufacturing equipment. The personnel and equipment will all be deployed in China to continue to expand. Fve directors of the board as well as two of LightPath's senior executives have invested in this financing. The company says in the future it will have the opportunity to further leverage technology and manufacturing expertise in China with a Chinese partner.

The debentures are immediately convertible into 1,901,948 shares of common stock. Investors also received warrants to purchase up to 950,974 shares of the company's common stock. The warrants are exercisable for a period of five years beginning on August 1, 2008 with 65% of the warrants priced at USD1.68 per share and 35% of the warrants priced at USD1.89 per share. If all of the warrants were exercised, LightPath would receive additional proceeds in the amount of USD1,645,184. Interest on the debentures is payable quarterly commencing on October 1, 2008. The interest due on October 1, 2008 was prepaid by the company on August 1, 2008 by issuing shares of common stock in payment of such interest. The remaining interest payments may be paid in cash or in LightPath common stock.

Investors who participated in LightPath's July 2007 common stock private placement equity were offered an incentive to invest in the current offering. Four investors from the 2007 offering participated in the current offering and as a result LightPath reduced the exercise price of the warrants they received in the 2007 offering from USD5.50 per share to USD2.61 per share. Additionally, such investors were issued 73,228 incentive shares.


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