Company: LASE
Filing Date: 2025-08-15
Form Type: 10-Q
Source: 0001641172-25-024367
Chunk: 22

Company: Laser Photonics Corp
Filing Date: 2025-08-15
Form: 10-Q
Item: Part I, Item 1
Chunk 22
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 the timing of orders received from customers, the shipment, installation and acceptance of products at our customers’
facilities. Net sales can be affected by the time taken to qualify our products for use in new applications in the end markets that we
serve. Our sales cycle varies substantially, ranging from a period of a few weeks to as long as one year or more, but is typically several
months. The adoption of our products by a new customer or qualification in a new application can lead to an increase in net sales for
a period which may then slow until we penetrate new markets or obtain new customers.

15

Our
business depends substantially upon capital expenditures by end users, particularly by manufacturers using our products for materials
processing, which includes general manufacturing, automotive including electric vehicles (EV), other transportation, aerospace, heavy
industry, consumer, semiconductor, pharmaceutical, and electronics. Although applications within materials processing are broad, the
capital equipment market in general is cyclical and historically has experienced sudden and severe downturns. For the foreseeable future,
our operations will continue to depend upon capital expenditures by end users of materials processing equipment and will be subject to
the broader fluctuations of capital equipment spending.

Gross
margin. Our total gross margin in any period can be significantly affected by several factors, including net sales, production volumes,
competitive factors, product mix, and by other factors such as changes in foreign exchange rates relative to the U.S. Dollar. Many of
these factors are not under our control. The following are examples of factors affecting gross margin:

●
As our products mature, we can experience additional competition which tends to decrease average selling prices and affects gross margin.

●
Our gross margin can be significantly affected by product mix. Within each of our product categories, the gross margin is generally higher
for devices with greater average power. These higher power products often have better performance, more difficult specifications to attain
and fewer competing products in the marketplace.

Selling
and Marketing expenses. In the first quarter of 2025, we invested in Selling and Marketing costs to support continued growth in the
Company. As the secular shift to laser blasting technology matures, our sales growth becomes more susceptible to the cyclical trends
typical of capital equipment manufacturers. Accordingly, our future management of and investments in selling and marketing expenses will
also be influenced by these trends, although we may still invest in selling and marketing functions to support sales sustainability even
in economic down cycles.

Research
and development expenses. We plan to continue to invest in research