Company: LASE
Filing Date: 2025-06-24
Form Type: 10-K
Source: 0001641172-25-016194
Chunk: 454

Company: Laser Photonics Corp
Filing Date: 2025-06-24
Form: 10-K
Item: Item 1B
Chunk 454
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 sales strategies, we’re able to accelerate growth, build lasting customer relationships, and
deliver tailored solutions that meet the evolving needs of diverse market segments.

40

All
orders are received on a revolving bases in accordance with the Company’s standard Terms and Conditions of Sale. Orders are not
cancelable. Orders typically consist of multiple units. Payment terms are typically net 120 days from transferring the ownership of equipment
to the distributor. Revenue is recognized on a “piece by piece” equipment basis after the appropriate transfer of the equipment’s
ownership to the distributor. Payments are made by the distributor to the Company when the distributor collects funds from its regional
customers or when they have funds available to reduce the outstanding balance. The Company allocates payments in accordance with its
accounting practices. Detailed aging is accounted for in the Company’s MRP system – DBA Manufacturing keeping records of
all equipment units ever manufactured with coordinating serial numbers. Higher level account-related data with payment history is recorded
in the Company’s QuickBooks accounting software.

Cost
of Sales. Our cost of sales includes the cost of raw materials and components for manufacturing laser systems and consists of different
electronic and optical components such as optical generators, scan heads, connector assemblies and wires, edge seal and adhesives, junction
boxes, and other items, such as raw aluminum and aluminum extrusions, steel for tilt brackets and frames, subassemblies, miscellaneous
materials, chemicals, support and low cost common parts and components, like tie wraps, insulating tape, shrink wraps, terminals, etc.
We are vertically integrated and currently manufacture all critical components for our products as well as assemble finished products.
Our cost of sales also includes direct labor, manufacturing overhead (such as engineering labor), equipment maintenance, quality and
production control, procurement costs, and warranty costs. Cost of sales does not include depreciation of manufacturing plant and equipment,
nor does it include facility-related expenses (such as rent and utilities).

Overall,
we expect our cost of goods sold to continue to decrease over the next several years due to an increase in worldwide capacity in fiber
laser parts and components, and availability of optical generators, an increase in unit output per production line, and more efficient
absorption of fixed costs driven by economies of scale. This expected decrease in cost for laser technology would be partially offset
during periods in which we underutilize manufacturing capacity.

Sales
and marketing. Our sales and marketing expenses consist primarily of costs related to compensation, trade shows, professional and technical
conferences