Company: LASE
Filing Date: 2025-06-24
Form Type: 10-K
Source: 0001641172-25-016194
Chunk: 547

Company: Laser Photonics Corp
Filing Date: 2025-06-24
Form: 10-K
Item: Item 1C
Chunk 547
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 marketing costs.

Selling,
general, and administrative Expenses. Our general and administrative expense consists primarily of compensation and associated costs
for executive management, sales and marketing personnel, outside legal and professional fees, insurance premiums and fees, allocated
facilities costs, and other corporate expenses such as charges and benefits related to the change in allowance for doubtful debt.

Gross
margin. Our total gross margin in any period can be significantly affected by total net sales in any period, by competitive factors,
by product mix, and by other factors such as changes in foreign exchange rates relative to the U.S. Dollar, some of which are not under
our control. Gross margin is affected by numerous factors, including our module average selling prices, foreign exchange rates, the existence
and effectiveness of subsidies and other economic incentives, competitive pressures, market demand, market mix, our manufacturing costs,
product development costs, the effective utilization of our production facilities, and the ramp of production on new products.

Research
and development expenses. Our research and development expenses consist primarily of compensation, development expenses related to the
design of our products and certain components, the cost of materials and components to build prototype devices for testing and facilities
costs. Costs related to product development are recorded as research and development expenses in the period in which they are incurred.
We acquire equipment for general use in further process developments and record the depreciation of this equipment as research and development
expense.

41

We
plan to continue to invest in research and development to improve our existing products and develop new systems and applications technology.
We maintain several programs and activities to improve our technology and processes in order to enhance the performance and reduce the
costs of our laser cleaning modules.

Interest
Expense, Net. Interest expense, net of capitalized amounts, is incurred on various debt financings. We capitalize interest expense into
our property, plant and equipment, project assets, and deferred project costs when such costs qualify for interest capitalization.

Factors
and Trends That Affect Our Operations and Financial Results

In
reading our financial statements, you should be aware of the following factors and trends that our management believes are important
in understanding our financial performance.

Net
sales. Net sales generated in 2024 increased towards the second half of the year driven by the sales of recently purchased of CMS and
the stable sales of traditional products. Sales were unaffected by market pricing pressures, due to our lower prices, quality control,
and proprietary know-how as compared to other laser cleaning companies with competing technologies.

Gross
margin