UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K/A

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)

October 19, 2004

PHOTONIC PRODUCTS GROUP, INC.

(Exact name of registrant as specified in its charter)

New Jersey

(State or other jurisdiction of incorporation)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

o  Written communications pursuant to Rule 425 under the Securities Act

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

On October 25, 2004, Photonic Products Group, Inc. (the “Company”) filed a Current Report on Form 8-K relating to its acquisition of MRC Precision Metal Optics, Inc., in which the Company indicated its intention to submit the financial statements and pro forma financial information prescribed by Rule 3-05 of Regulation S-X and Article 11 of Regulation S-X, respectively, not later than 71 days from the due date thereof in accordance with Subsection (a)(4) of Item 9.01 of Form 8-K.  This Amendment to that Current Report is being filed to provide that financial information. 

The Company hereby amends and restates its Current Report on Form 8-K filed with the SEC on October 25, 2004, as follows:

Item 1.01 Entry into a Material Definitive Agreement and

Item 2.01 Completion of Acquisition or Disposition of Assets.

On October 19, 2004, the Company entered into a definitive stock purchase agreement with Frank E. Montone to acquire all of the issued and outstanding stock of MRC Precision Metal Optics, Inc., a Florida corporation (“MRC”) and closed on such transaction on the same date.  MRC is principally engaged in the business of producing precision optics and assemblies principally for customers in the domestic and foreign commercial, aerospace and military markets.  A summary of the assets and liabilities of MRC is as follows:

The purchase price for MRC’s stock was $525,000.00 plus earn-out payments of up to $300,000.00 payable over five years.  The purchase price was paid by the combination of a cash payment and the issuance of a note in the principal sum of $175,000 bearing interest at 6% per annum.  Mr. Montone also received an employment agreement and agreed to a covenant not to compete.  The Company intends to operate MRC as a subsidiary at MRC’s current facilities in Sarasota, Florida, with Mr. Montone remaining as the president of MRC.

Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired:

(i)  Report of Holtz Rubenstein Reminick LLP, Registered Independent Certified Public Accountants

(ii)  Balance sheet of MRC Precision Metal Optics, Inc. as of December 31, 2003 and September 30, 2004 (unaudited)

(iii)  Statements of Operations of MRC Precision Metal Optics, Inc. for the year ended December 31, 2003 and the Nine Months ended September 30, 2004 and September 30, 2003 (unaudited)

(iv)  Statements of Cash Flows of MRC Precision Metal Optics, Inc. for the year ended December 31, 2003 and the Nine Months ended September 30, 2004 and September 30, 2003 (unaudited)

(v)  Notes to Financial Statements

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(b) Pro Forma Financial Information:

(i)  Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2004 (unaudited)

(ii)  Pro Forma Condensed Consolidated Statement of Operations for the Nine Months ended September 30, 2004 (unaudited)

(iii) Pro Forma Condensed Consolidated Statement of Operations for the Year Ended December 31, 2003 (unaudited)

(iv)  Notes to Pro Forma Condensed Consolidated Financial Statements (unaudited)

(c) Exhibits:

*   Previously filed.

** Filed herewith.

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SIGNATURE

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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Report of Independent Registered Public Accounting Firm

To the Board of Directors

MRC Precision Metal Optics, Inc.

Sarasota, Florida

We have audited the accompanying balance sheet of MRC Precision Metal Optics, Inc. as of December 31, 2003 and the related statements of operations and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of MRC Precision Metal Optics, Inc. as of December 31, 2003 and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

As described in Note 14, as of October 19, 2004, the Company was acquired by another company.

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Balance sheet of MRC Precision Metal Optics, Inc. as of December 31, 2003 and September 30, 2004 (unaudited)

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Statements of Operations of MRC Precision Metal Optics, Inc. for the year ended December 31, 2003 and the Nine Months ended September 30, 2004 and September 30, 2003 (unaudited)

F-3

Statements of Cash Flows of MRC Precision Metal Optics, Inc. for the year ended December 31, 2003 and the Nine Months ended September 30, 2004 and September 30, 2003 (unaudited)

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NOTES TO FINANCIAL STATEMENTS

Year Ended December 31, 2003 and for the Nine Months Ended September 30, 2004 (Unaudited) and 2003 (Unaudited)

1.              Summary of Significant Accounting Policies

Description of business - MRC Precision Metal Optics, Inc. (the “Company”) designs and manufactures precision metal optics, custom optics and various items utilizing the optics. The Company’s products are manufactured and sold under contract to governmental agencies and commercial customers.

Allowance for doubtful accounts - Management must make estimates of the uncollectability of account receivables. Management specifically analyzes accounts receivable and analyzes historical bad debts, customer concentrations, customer credit-worthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. As of December 31, 2003 and September 30, 2004, management does not believe any allowance is required.

Inventory - Inventories are valued at the lower of cost or market on a first-in first-out basis.

Property and equipment and depreciation - Property and equipment are recorded at cost, which includes expenditures for additions and major betterments. Maintenance, repairs and minor renewals are expensed as incurred. Depreciation is computed primarily on the straight-line method based on the estimated useful lives of the assets.

Statement of cash flows - For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.

During 2003, the Company entered into a capital lease obligation to finance equipment approximating $84,000.

Revenue recognition - The Company records revenue for long-term manufacturing contracts under the completed contract method. Contracts are considered completed upon shipment of all products required under the terms of the contract to the customer. Excess of accumulated costs over related billings and excess of accumulated billings over related costs are recorded on the balance sheet until shipment of goods.

Income taxes - The Company is an S Corporation and is not subject to federal and state corporate income tax. Therefore, no provision for income taxes related to the operations of the Company is reflected in the financial statements.

Use of estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Comprehensive income (loss) - Other comprehensive income (loss) refers to revenues, expenses, gains, and losses that under generally accepted accounting principles are included in comprehensive income (loss), but are excluded from net income (loss) as these amounts are record directly as an adjustment to stockholder’s equity (deficiency). Other comprehensive income (loss) approximates net loss for the year ended December 31, 2003 and nine months ended September 30, 2004 and 2003.

Advertising - The Company charges advertising costs to expense, as incurred. Advertising costs expensed during the year ended December 31, 2003 and nine months ended September 30, 2004 and 2003 were insignificant.

Shipping and handling costs - The Company includes shipping and handling costs in cost of goods sold.

Interim financial statement - The unaudited financial statements for the nine months ended September 30, 2004

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and 2003 reflect all adjustments, consisting only of normal recurring accruals, which are, in the opinion of management, necessary for a fair statement of the results for the period. The results of operations are not necessarily indicative of the results expected for the fiscal year.

2.              Factored Accounts Receivable

The Company sells certain of its accounts receivable under a factoring arrangement. Under this agreement, all receivables are sold with recourse and are subject to a 2.5% fee plus a usage fee equal to prime plus 2% on uncollected balances minus the 12.5% reserve. During 2003, the Company sold receivables with recourse to a factoring agent approximating $2,221,000 and paid servicing fees approximating $75,000, which are included in general and administrative expenses.

During the nine months ended September 30, 2004 and 2003, the Company sold receivables with recourse to a factoring agent approximating $2,167,000 and $1,521,000 and paid servicing fees approximating $69,000 and $51,000, respectively, which are included in general and administrative expenses.

3.              Concentration of Credit Risks

For the year ended December 31, 2003, two customers accounted for 28% and 37%, respectively, of net sales. Amounts from these customers, included in factored accounts receivable at December 31, 2003, approximated $94,000 and $40,000 respectively.

For the nine months ended September 30, 2004, two customers accounted for 28% and 26%, respectively, of net sales.

For the nine months ended September 30, 2003, two customers accounted for 30% and 25%, respectively, of net sales.

For the year ended December 31, 2003, three vendors accounted for 28%, 13% and 11%, respectively, of net purchases. Amounts due to these vendors, included in accounts payables at December 31, 2003, approximated $42,000, $43,000 and $12,000 respectively.

For the nine months ended September 30, 2004, three vendors accounted for 12%, 30% and 13%, respectively, of net purchases.

For the nine months ended September 30, 2003, three vendors accounted for 28%, 14% and 8%, respectively, of net purchases.

4.              Inventories

Inventories consist of the following:

5.              Property and Equipment

Property and equipment, at cost, is summarized as follows:

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6.     Notes Payable

As of December 31, 2003, the Company has two notes payable to third parties that are past due approximating $200,000, bearing interest at rates ranging from 5.5% to 10.5%. As further described in Note 13, these notes were included in the liabilities assumed by the Photonic Products Group, Inc. in October 2004.

7.     Long-Term Debt

Long-term debt consists of:

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Aggregate annual long-term debt maturities are as follows:

8.     Capital Leases

Capital leases consist of the following:

Aggregate annual long-term debt maturities are as follows:

Capital lease obligations are collateralized by equipment with cost and related accumulated depreciation approximating $1,109,000 and $202,000, respectively at December 31, 2003.

9.     Related Party Loans

The Company has an $88,000 note payable to its stockholder, bearing interest at 10.50%. The note will be repaid at $5,000 a month when the Company has a profit for at least six months.

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10.  Payroll Tax Liability

As of December 31, 2003 and September 30, 2004, the Company owed the Internal Revenue Service delinquent payroll taxes approximating $86,000 and $55,000, respectively, which is included in accounts payable. In June 2004, the Company entered into an installment agreement whereby it will pay $8,000 per month until the liability is satisfied.

11.  Commitments

Lease - The Company leases office and warehouse space under a noncancellable operating lease expiring August 31, 2006. The minimum annual rental payments are as follows:

Rent expense approximated to $231,000, $173,000 and $173,000 the year ended December 31, 2003 and nine months ended September 30, 2004 and 2003, respectively.

Litigation matters -The Company is involved in various routine litigation matters which arose through the normal course of business. Management believes that the resolution of these matters will not have a material adverse effect on the Company’s financial position or results of operations.

12.  Fair Value of Financial Instruments

The methods and assumptions used to estimate the fair value of the following classes of financial instruments for:

Current Assets and Current Liabilities: The carrying amount of current assets and liabilities approximate their fair value. The fair value of the Company’s long-term debt was estimated using a discounted cash flow analysis, based on the Company’s assumed incremental borrowing rates for similar types of borrowing arrangements. The carrying amount of fixed rate debt at December 31, 2003 approximates fair value.

13.  Subsequent Event

On October 19, 2004 the Company entered into an agreement with Photonic Products Group, Inc. to sell all of the issued and outstanding stock of MRC Precision Metal Optics, Inc.

The Company sold its stock for $525,000. In addition, the Company’s stockholder is entitled to earn-out payments of up to $300,000 payable over five years. Proceeds from the sale were a combination of a cash payment and the issuance of a note in the principal sum of $175,000 bearing interest at 6% per annum. The Company’s stockholder also received an employment agreement and agreed to a covenant not to compete.

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Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2004 (unaudited)

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Pro Forma Condensed Consolidated Statement of Operations for the Nine Months ended September 30, 2004 (unaudited)

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Pro Forma Condensed Consolidated Statement of Operations for the Year Ended December 31, 2003 (unaudited)