Company: LASE
Filing Date: 2025-06-24
Form Type: 10-K
Source: 0001641172-25-016194
Chunk: 241

Company: Laser Photonics Corp
Filing Date: 2025-06-24
Form: 10-K
Item: Item 1
Chunk 241
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 are recognized as customer deposits and
included in liabilities on the balance sheet. Customer deposits are recognized as revenue when control over the ordered equipment is
transferred to the customer.

All
revenues are reported net of any sales discounts or taxes.

Other
Revenue Recognition Matters related to Distributors

Distributors
generally have no right to return unsold equipment. However, in limited circumstances, if the company determines that distributor stock
is morally aging beyond the company’s new model releases, it may accept returns and provide the distributor with credit against
their trading account at the company’s discretion under its warranty policy. This situation may also arise if the business climate
suddenly changes in the distributor’s country of operation, and the company determines that older and aged equipment can no longer
be sold in a specific geographical area, requiring equipment stock to be upgraded to modern models and capabilities. The company may
also be obligated, in the event of default by a distributor, to accept returns of unsold laser equipment under its repurchase commitment
to equipment financing providers or directly to the distributor. The repurchase commitment is on an individual piece of equipment basis
with a term from the date it is financed by the lending institution through the payment date by the distributor, generally not exceeding
36 months.

The
company has excluded sales and other taxes assessed by a governmental authority in connection with revenue-producing activities from
the determination of the transaction price for all contracts. The company has not adjusted net sales for the effects of significant repurchase
financing activity (e.g., customer default with a financial institution, repurchasing, or warranty replacement) because the period between
the transfer of the equipment title and the customer’s payment may exceed 24 months of the equipment warranty period and occur
within the maturity of the equipment financial agreement between the customer or distributor and the financial institution.

Inventory.
Inventory is stated at the lower level of 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. As ofn December