Company: LASE
Filing Date: 2025-06-24
Form Type: 10-K
Source: 0001641172-25-016194
Chunk: 236

Company: Laser Photonics Corp
Filing Date: 2025-06-24
Form: 10-K
Item: Item 1
Chunk 236
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 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, travel, facilities, depreciation of equipment used for demonstration purposes and other 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