<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549
                                    FORM 10-Q


   (x)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
                                EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 1998
                                               ------------------
                                      OR

        ( )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
                        SECURITIES EXCHANGE ACT OF 1934

                  For the transition period from           to
                                                -----------  ------------
                          Commission File Number 0-11365
                                                 -------

                            LASER PHOTONICS, INC.
                            ---------------------
            (exact name of registrant as specified in its charter)

             Delaware                                    59-2058100
             --------                                    ----------
     (State or other jurisdiction of                  (I.R.S. Employer
      incorporation or organization)                 Identification No.)

6865 Flanders Drive, Suite G, San Diego, CA                 92121
--------------------------------------------                -----
  (Address of principal executive offices)                (Zip Code)

      Registrant's telephone number, including area code  (619) 455-7030
                                                          --------------
                                       N/A
                                       ---
    (Former name, former address and former fiscal year, if changed since 
                                   last report)

             APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
                  PROCEEDING DURING THE PRECEDING FIVE YEARS

 Indicate by check mark whether the registrant (1) has filed all documents and 
   reports required to be filed by Section 12, 13, or 15(d) of the Securities 
     Exchange Act of 1934 subsequent to the distribution of securities under 
                            a plan confirmed by a court.

                                 Yes X    No
                                    ---     ---

  As of September 30, 1998, 9,295,694 shares of Common Stock, par value $.01 
                           per share, were outstanding.

<PAGE>


                                     INDEX
                                     -----
<TABLE>
<CAPTION>

                                                                                      Page
                                                                                    Number
                                                                                    ------
PART I   FINANCIAL INFORMATION
         <S>                                                                             <C>
         Item 1  Financial Statements:
                 Condensed Consolidated Balance Sheets
                 as of September 30, 1998 and December 31, 1997...................       3

                 Condensed Consolidated Statements of Operations for the
                 Three and Nine Months ended September 30, 1998 and 1997..........       4

                 Condensed Consolidated Statements of Cash Flow for the
                 Nine Months ended September 30, 1998 and 1997....................       5

                 Notes to Condensed Consolidated Financial Statements.............       6

         Item 2  Management's Discussion and Analysis
                 of Financial Condition and Results of Operations.................       7


PART II  OTHER INFORMATION

                 Exhibits and Reports of Form 8-K.................................       8

                 Signatures.......................................................       9

</TABLE>

                                       2
 
<PAGE>

                        PART I  FINANCIAL INFORMATION
                         Item 1  FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets
LASER PHOTONICS, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>


ASSETS                                                           SEPTEMBER 30, 1998      December 31, 1997 *
                                                                     (UNAUDITED)
<S>                                                              <C>                     <C>
CURRENT ASSETS
    Cash and cash equivalents                                     $    488,045              $ 1,225,932 
    Accounts receivable, net                                           176,788                  343,465
    Inventory                                                        1,114,662                  951,209
    Prepaid expenses                                                    51,221                   91,463
                                                                  ------------              -----------
        TOTAL CURRENT ASSETS                                         1,830,716                2,612,069

PROPERTY AND EQUIPMENT, net                                            213,342                  141,432

PREPAID LICENSE FEE, net                                             3,583,333                3,958,333 
OTHER                                                                  163,189                  100,515
GOODWILL, NET                                                          606,194                  995,955
                                                                  ------------              -----------

TOTAL ASSETS                                                      $  6,396,774              $ 7,808,304
                                                                  ------------              -----------
                                                                  ------------              -----------

LIABILITIES AND SHAREHOLDERS' EQUITY 

CURRENT LIABILITIES
    Notes Payable - Current portion                               $    455,001              $   610,004
    Convertible notes payable                                        1,000,000                    -
    Accounts payable                                                   996,763                  859,559
    Accrued payroll and related expenses                               436,303                  400,222
    Other accrued liabilities                                          550,661                  588,086  
    Due to officers                                                     46,722                   43,722  
    Customer deposits                                                  266,538                    -   
    Deferred revenue                                                     -                       95,000 
                                                                  ------------              -----------
        TOTAL CURRENT LIABILITIES                                    3,751,988                2,596,593 

NOTES PAYABLE, LESS CURRENT PORTION                                    282,559                  282,559

SHAREHOLDERS' EQUITY 
    Common stock                                                        92,957                   92,471
    Additional paid-in-capital                                      14,977,704               14,625,564
    Accumulated Deficit                                            (12,708,434)              (9,788,883)
                                                                  ------------              -----------
        TOTAL SHAREHOLDERS' EQUITY                                   2,362,227                4,929,152
                                                                  ------------              -----------

                                                                  $  6,396,774              $ 7,808,304
                                                                  ------------              -----------
                                                                  ------------              -----------

</TABLE>

* Condensed from audited financial statements.

        THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED 
                     CONSOLIDATED FINANCIAL STATEMENTS.

                                       3

<PAGE>

Condensed Consolidated Statements of Operations
LASER PHOTONICS, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>

                                                     Nine months ended                 Three months ended
-------------------------------------------------------------------------------------------------------------------------------
                                            SEPTEMBER 30,      September 30,     SEPTEMBER 30,     September 30,
                                                1998               1997               1998              1997    
                                             (UNAUDITED)        (Unaudited)       (UNAUDITED)       (Unaudited)

<S>                                         <C>                <C>               <C>               <C>
REVENUES
  Sales                                      $ 1,795,578         $2,340,699      $   422,310       $  667,122
  Other                                           95,000            336,693              -            336,693
                                             -----------        -----------      -----------       ----------
    Total revenues                             1,890,578          2,677,392          422,310        1,003,815
                                             -----------        -----------      -----------       ----------

COSTS AND EXPENSES
  Cost of Sales                                1,214,736          1,601,569          422,119          507,118
  Selling, General & Administrative            1,905,341          1,566,973          683,815          884,803
  Research & Development                         461,168            323,758           27,859          101,909
  Depreciation and Amortization                  815,407            512,857          277,947          169,180
                                             -----------        -----------      -----------       ----------
    Total costs and expenses                   4,396,652          4,005,157        1,411,740        1,663,010
                                             -----------        -----------      -----------       ----------

LOSS FROM OPERATIONS                          (2,506,074)        (1,327,765)        (989,430)        (659,195)

  Interest Expense                               418,901            289,804          331,889          106,882
  Other expenses (income), net                    (5,424)           147,663            7,367           71,063
                                             -----------        -----------      -----------       ----------

NET LOSS                                     $(2,919,551)       $(1,765,232)     $(1,328,686)      $ (837,140)
                                             -----------        -----------      -----------       ----------
                                             -----------        -----------      -----------       ----------

BASIC & DILUTED LOSS PER SHARE               $     (0.31)       $     (0.28)     $     (0.14)      $    (0.13)
                                             -----------        -----------      -----------       ----------
                                             -----------        -----------      -----------       ----------


Weighted Average Shares                        9,286,265          6,253,359        9,295,694        6,367,378
                                             -----------        -----------      -----------       ----------
                                             -----------        -----------      -----------       ----------
</TABLE>


        THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED 
                    CONSOLIDATED FINANCIAL STATEMENTS.



                                       4
<PAGE>

Condensed Consolidated Statements of Cash Flows
LASER PHOTONICS, INC.

<TABLE>
<CAPTION>

                                                                           Nine months ended
-----------------------------------------------------------------------------------------------------------
                                                              SEPTEMBER 30,  1998       September 30, 1997
                                                                  (UNAUDITED)              (unaudited)
<S>                                                           <C>                       <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net Loss                                                       $(2,919,551)               $(1,765,232)
  Adjustments to reconcile net loss to net cash used in 
    operating activities:
    Depreciation and Amortization                                    815,407                    512,857
    Allowance for doubtful accounts                                   (3,000)                     -
    Stock issued to pay legal fees                                    20,000                     95,625
    Non cash compensation expense                                      -                        560,958
    Non cash interest expense                                          -                        150,000
    Interest related to beneficial conversion features 
      of notes payable                                               296,875                      -
  Changes in operating assets and liabilities:
    Current assets                                                   (22,473)                    (1,649)
    Current liabilities                                              310,398                   (280,885)
                                                                 -----------                -----------
      NET CASH USED IN OPERATING ACTIVITIES                       (1,502,344)                  (728,326)
                                                                 -----------                -----------

CASH FLOWS FROM INVESTING ACTIVITIES
  Capital expenditures                                              (116,291)                   (23,462)
  Proceeds from sale of asset                                          -                         61,939
  Deferred income                                                      -                        363,307
  Advances from related parties                                        -                         18,268
                                                                 -----------                -----------
      NET CASH PROVIDED BY (USED IN)  INVESTING ACTIVITIES          (116,291)                   420,052
                                                                 -----------                -----------

CASH FLOWS FROM FINANCING ACTIVITIES 
  Principal payments on debt                                        (155,003)                     -
  Proceeds from issuance of convertible notes payable              1,000,000                      -
  Proceeds from issuance of common stock                              35,751                    724,375
                                                                 -----------                -----------
      NET CASH PROVIDED BY FINANCING ACTIVITIES                      880,748                    724,375
                                                                 -----------                -----------

NET INCREASE (DECREASE) IN CASH AND CASH 
  EQUIVALENTS                                                       (737,887)                   416,101

CASH AND CASH EQUIVALENTS, beginning of period                     1,225,932                      -
                                                                 -----------                -----------

CASH AND CASH EQUIVALENTS, end of period                         $   488,045                $   416,101
                                                                 -----------                -----------
                                                                 -----------                -----------
</TABLE>

       THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED 
                   CONSOLIDATED FINANCIAL STATEMENTS.

                                       5

<PAGE>

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                     LASER PHOTONICS, INC. AND SUBSIDIARIES
                               September 30, 1998

1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The condensed consolidated balance sheets as of September 30, 1998 and the 
related condensed consolidated statements of operations and cash flow for the 
three and nine months ended September 30, 1998 and 1997, and cash flows for 
the nine months ended September 30, 1998 and 1997 have been prepared by the 
Company without audit. In the opinion of management, the condensed 
consolidated financial statements contain all adjustments, consisting only of 
normal recurring accruals, necessary to present fairly the financial position 
of Laser Photonics, Inc. and subsidiaries as of September 30, 1998, the 
results of their operations for the three and nine months ended September 30, 
1998 and 1997 and cash flows for the nine months ended September 30, 1998 and 
1997. The results of operations for the three and nine months ended September 
30, 1998 are not necessarily indicative of the results to be expected for the 
entire fiscal year ending December 31, 1998.

Certain information and footnote disclosures normally included in financial 
statements prepared in accordance with generally accepted accounting 
principles have been condensed or omitted. It is suggested that these 
condensed consolidated financial statements be read in conjunction with the 
consolidated financial statements and notes thereto included in the Company's 
report on Form 10-K for the year ended December 31, 1997. 

Certain reclassifications have been made to the prior year's condensed 
consolidated financial statements to conform with  the current presentation. 
Such reclassifications had no effect on net loss.

2.  INVENTORY

Inventory consists of the following:

<TABLE>
<CAPTION>
                                   September 30,          December 31,
                                       1998                  1997
                                   -------------          ------------
        <S>                        <C>                    <C>
        Raw Materials               $  464,769              $435,583
        Work in Process                564,717               435,854
        Finished Goods                  85,176                79,772
                                    ----------              --------
        TOTAL INVENTORY             $1,114,662              $951,209
                                    ----------              --------
                                    ----------              --------
</TABLE>

3.  ASSETS HELD FOR SALE


On April 8, 1998, the Company entered into a letter of intent to sell certain 
assets, subject to the assumption of certain liabilities, to a third party. 
The completion of the transaction was subject to numerous items, including 
but not limited to, the final identification of specific assets and 
liabilities to be transferred and the execution of a final written agreement. 
The proposed sales price was $1,300,000, which would result in an approximate 
gain of $300,000 to the Company. An agreement was not reached and the Company 
is not planning on further pursuing the sale with this buyer.

4.  CONVERTIBLE NOTES PAYABLE

During July and August, 1998, the Company's 76% owned subsidiary, AccuLase, 
Inc. issued $1,000,000 in 10% Convertible Promissory Notes. Interest is 
payable annually and may be paid in cash or in the Company's common 

                                       6

<PAGE>

               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                     LASER PHOTONICS, INC. AND SUBSIDIARIES
                               September 30, 1998

stock at the Company's option. The entire principal is due in one payment on 
or before December 31, 1998. All outstanding balances under the Notes are 
guaranteed by the Company. The holders of the Notes may convert any or all 
balances outstanding into the Company's common stock at a conversion price of 
$2.00 per share at any time. All balances outstanding at December 31, 1998 
automatically convert into shares of the Company's common stock at a 
conversion price of $2.00 per share. At the date of issuance the conversion 
price was less than the market price resulting in a beneficial conversion 
feature in the amount of $296,875 which is included in interest expense at 
September 30, 1998.

     Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                              AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Revenues for the nine months ended September 30, 1998 decreased by $786,814 
to $1,890,578 compared to $2,677,392 in the prior period. The decrease was 
due to a decrease in sales of scientific and medical lasers from the 
Company's Florida and Massachusetts operations offset by the final milestone 
payment in the amount of $600,000 pursuant to the Baxter Agreement which 
included the sale of two excimer lasers. Revenues for the three months ended 
September 30, 1998 were $422,310 compared to $1,003,815 for the three months 
ended September 30, 1997. The decrease was due to a decrease in sales of 
scientific and medical lasers from the Company's Florida and Massachusetts 
operations. 

Gross margins were 35.7% for the nine months ended September 30, 1998 
compared to 40.2% for the nine months ended September 30, 1997 and 0.1% for 
the three months ended September 30, 1998 compared to 49.5% for the three 
months ended September 30, 1997. The decrease in gross margins was due to the 
increase in labor costs as a percentage of sales.

Operating expenses increased by $778,328 for the nine months ended September 
30, 1998 compared to the nine months ended September 30, 1997 due to 
increases in consulting and professional fees, D & O insurance, marketing 
expenses and increased funding of research and development activities. 
Operating expenses decreased by $166,271 for the three months ended September 
30, 1998 compared to the three months ended September 30, 1997 due to a 
reduction in staff.

Interest expense increased by $129,097 for the nine months ended September 
30, 1998 compared to the nine months ended September 30, 1997 and by $225,007 
for the three months ended September 30, 1998 compared to the three months 
ended September 30, 1997. The increase was the result of the recognition of a 
beneficial conversion feature on the convertible notes payable of $296,875 
offset by the purchase of a subsidiary's note payable through the issuance of 
common stock during the year ended December 31, 1997.

Net loss increased to $2,919,551 for the nine months ended September 30, 1998 
compared to $1,765,232 for the nine months ended September 30, 1997 and to 
$1,328,686 for the three months ended September 30, 1998 compared to $837,140 
for the three months ended September 30, 1997. The increase in the net loss 
was due to the increases in operating expenses and decreases in revenues.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 1998, the Company had cash and cash equivalents of 
$488,045 which is a decrease of $737,887 since December 31, 1997. The Company 
has utilized cash generated from the sale of common stock, from 

                                       7

<PAGE>


the Baxter agreement during 1997 and the issuance of the convertible notes 
payable to fund marketing activities, increased research and development 
activities, investments in inventory to support anticipated sales of excimer 
lasers to Baxter and to pay off certain liabilities.

Capital expenditures in the nine months ended September 30, 1998 of $116,291 
related to purchases of equipment and the construction of a laser to be used 
as a demonstration model.

Cash flows provided by financing activities for the nine months ended 
September 30, 1998 of $880,748 was due to the issuance of $1,000,000 of 
convertible notes payable and proceeds from the issuance of common stock 
offset by principal payments on debt.

YEAR 2000

The Year 2000 Issue is the result of computer programs being written using 
two digits rather than four to define the applicable year. Any of the 
Company's, or its suppliers' and customers' computer programs that have 
date-sensitive software may recognize a date using "00" as the year 1900 
rather than the year 2000. This could result in system failures or 
miscalculations causing disruptions of operations including, among other 
things, a temporary inability to process transactions, send invoices, or 
engage in similar normal business activities.

The Company has developed plans to address issues related to the impact on 
its computer systems of the year 2000. Financial and operational systems have 
been assessed and plans have been developed to address systems modification 
requirements. The financial impact of making the required systems changes is 
not expected to be material to the Company's consolidated financial position, 
liquidity or results of operations.

Neither the Company nor its subsidiaries has initiated formal communications 
with significant suppliers and large customers to determine the extent to 
which those third parties' failure to remedy their own Year 2000 Issues would 
materially effect the Company and its subsidiaries. The Company has not 
received any indications from its suppliers and large customers that the Year 
2000 Issue may materially effect their ability to conduct business and the 
Company has no current plans to formally undertake such an assessment.

                        PART II.   OTHER INFORMATION

<TABLE>
<CAPTION>
    <S>                                                                              <C>
    ITEM 1   Legal Proceedings:  See December 31, 1997 10-K
         
    ITEM 2   Changes in Securities                                                   None
         
    ITEM 3   Defaults Upon Senior Securities                                         None
         
    ITEM 4   Submission of Matters to Vote of
             Security Holders                                                        None
         
    ITEM 5   Other Information                                                       None
         
    ITEM 6   Exhibits and Reports on Form 8-K

             a) Exhibits
                    27.1                                          Financial Data Schedule

             b) Reports on Form 8-K                                                  None
</TABLE>


                                       8

<PAGE>


SIGNATURES TO FORM 10-Q
Pursuant to the requirements of the Securities Exchange Act of 1934, the 
registrant has caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.

                                       LASER PHOTONICS, INC.
                                       ---------------------
                                           (Registrant)




Date:    November 18, 1998             By: /s/ Raymond A. Hartman
                                           ---------------------------
                                            Raymond A. Hartman
                                            Chief Executive Officer



Date:    November 18, 1998             By: /s/ Chaim Markheim
                                           ---------------------------
                                            Chaim Markheim
                                            Chief Financial Officer












                                                  9