Company: LASE
Filing Date: 2025-06-24
Form Type: 10-K
Source: 0001641172-25-016194
Chunk: 828

Company: Laser Photonics Corp
Filing Date: 2025-06-24
Form: 10-K
Item: Item 4
Chunk 828
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 In general, management’s
estimates are based on historical experience, and on various other assumptions that are believed to be reasonable under the facts and
circumstances. Actual results could differ from those estimates made by management. These estimates are based on management’s historical
industry experience and not our historical experience.

Revenue
Recognition- Under Topic 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount
that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition
for arrangements that an entity determines are within the scope of Topic 606, the entity performs the following five steps: (i) identify
the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv)
allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies
a performance obligation. We only apply the five-step model to contracts when it is probable that the entity will collect the consideration
it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined
to be within the scope of Topic 606, we assess the goods or services promised within each contract and determine those that are performance
obligations and assess whether each promised good or service is distinct. We then recognize as revenue the amount of the transaction
price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Refunds and returns,
which are minimal, are recorded as a reduction of revenue. Payments received by customers prior to our satisfying the above criteria
are recorded as unearned income in the combined balance sheets. All revenues were reported net of any sales discounts or taxes.

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Inventory
— Inventory is stated at the lower cost (first-in, first-out method) or market value. Inventory includes parts and components
that may be specialized in nature and subject to rapid obsolescence. We maintain a reserve for excess or obsolete inventory items. Inventories
are written off and charged to cost of goods sold when identified as excess or obsolete. If future sales differ from these forecasts,
the valuation of excess and obsolete inventory may change, and additional inventory provisions may be required. Because of our vertical
integration, a significant or sudden decrease in sales could result in a significant change in the estimates of excess or obsolete inventory
valuation. On December 31,