Company: LASE
Filing Date: 2025-06-24
Form Type: 10-K
Source: 0001641172-25-016194
Chunk: 364

Company: Laser Photonics Corp
Filing Date: 2025-06-24
Form: 10-K
Item: Item 1A
Chunk 364
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 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. Our total gross margin in any period can be significantly affected by total net sales in any period, by competitive factors such
as product mix, and by other factors, some of which are not under our control. For instance, the gross margin for certain specialty products
may be higher because there are fewer or sometimes no equivalent competing products. Further, we expect that some new technologies, products
and systems will have returns above our cost of capital but may have gross margins below our corporate average.

Selling,
general, and administrative expenses. Selling, general and administrative expenses consist primarily of salaries and other personnel-related
costs, professional fees, insurance costs, travel expenses and other selling expenses. We expect selling expenses to increase in the
near term to support the planned growth of our business as we expand our sales and marketing efforts.

Research
and development expenses. Research and development expenses consist primarily of salaries and personnel-related costs, the cost of products,
materials, and outside services used in our process and product research and development activities. We acquire equipment for general
use in further process developments and record the depreciation of this equipment as research and development expense. We maintain several programs and activities to improve our technology and processes to enhance performance and reduce the costs of our cleaning
laser modules.

Goodwill
and long-lived assets impairments. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying value may not be recoverable. Impairment is measured by comparing the carrying value of the long-lived assets to the
estimated undiscounted future cash flow expected to result from use of the assets