Company: LASE
Filing Date: 2025-06-24
Form Type: 10-K
Source: 0001641172-25-016194
Chunk: 198

Company: Laser Photonics Corp
Filing Date: 2025-06-24
Form: 10-K
Item: Item 1
Chunk 198
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.S. Government’s annual budget and appropriation process, which is influenced by a wide
range of factors, including geopolitical developments, macroeconomic conditions, and the strategic priorities of the administration and
Congress. While overall defense spending has risen in recent years to address emerging global threats and modernization needs, future
budget levels will continue to reflect a complex balance of domestic and international priorities, as well as the broader fiscal health
of the U.S. economy.

19

The
Budget Control Act (BCA) of 2011, along with subsequent budget agreements, imposed discretionary spending caps on both defense and non-defense
programs from FY2012 through FY2021, ushering in a decade of relative fiscal austerity. These caps operated under a “principle
of parity,” requiring proportional cuts across both categories. With the expiration of the BCA, federal budgeting has entered a
new phase, where non-defense discretionary (NDD) spending has more flexibility to grow without necessarily triggering equal increases
in defense funding.

Under
the current administration, there is heightened emphasis on domestic investment, including infrastructure, advanced manufacturing, and
clean energy, which may shift federal funding priorities away from certain defense initiatives. In parallel, ongoing debates over the
national debt, deficit reduction, and federal spending limits—including discussions surrounding the debt ceiling—create continued
uncertainty in the budgeting process.

As
a result, while we remain optimistic about opportunities in defense-related MRO and modernization programs, we acknowledge that budgetary
constraints and shifting fiscal priorities could result in the reduction, delay, or cancellation of funding for some contracts—particularly
those with unobligated balances. Such developments could adversely affect our operations, financial performance, and growth outlook.

Significant
reduction in defense spending could have long-term consequences for our size and structure. In addition, reduction in government priorities
and requirements could impact the funding, or the timing of funding, of our programs, which could negatively impact our results of operations
and financial condition. In addition, we are involved in U.S. Government programs, which are classified by the U.S. Government and our
ability to discuss these programs, including any risks and disputes and claims associated with and our performance under such programs,
could be limited due to applicable security restrictions.

Our
financial performance is dependent on our ability to perform on our current and future expected U.S. Government contracts, which are
subject to termination for convenience, which could harm our financial performance.

We
believe that our financial performance will