10q10k10q10k.net

What changed in Laser Photonics Corp's 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of Laser Photonics Corp's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+311 added−360 removedSource: 10-K (2025-06-24) vs 10-K (2024-04-19)

Top changes in Laser Photonics Corp's 2024 10-K

311 paragraphs added · 360 removed · 188 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

39 edited+51 added−99 removed36 unchanged
Biggest changePrimary competitive factors in our markets include: · Price and value · Ability to design, manufacture, and deliver new products on a cost-effective and timely basis. · Ability of our suppliers to produce and deliver components in a timely manner, in the quantity desired and at the budgeted prices · Product performance and reliability · Service support. · Product mix · Ability to meet customer specifications. · Ability to respond quickly to changes in market demand and technology developments. 11 Table of Contents In the materials processing market, the competition is fragmented with a large number of competitors that are small or privately owned or compete with us on a limited geographic, industry, or application specific basis including Trumpf GmbH, Clean Laser GMBH, P-Laser.
Biggest changePrimary competitive factors in our markets include: ● Price and value ● Ability to design, manufacture, and deliver new products on a cost-effective and timely basis. ● Ability of our suppliers to produce and deliver components in a timely manner, in the quantity desired and at the budgeted prices ● Product performance and reliability ● Service support. ● Product mix ● Ability to meet customer specifications. ● Ability to respond quickly to changes in market demand and technology developments.
Various warning labels must be affixed, and certain protective devices installed depending on the class of product. The National Center for Devices and Radiological Health is empowered to seek fines and other remedies for violations of the regulatory requirements. CE Marking We are subject to certain regulations in Europe as administered by the European Commission.
Various warning labels must be affixed, and certain protective devices installed depending on the class of product. The National Center for Devices and Radiological Health is empowered to seek fines and other remedies for violations of regulatory requirements. CE Marking We are subject to certain regulations in Europe as administered by the European Commission.
As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.
As a result of this election, our financial statements may not be comparable to companies that comply with effective public company dates.
We also warrant the owners of our custom laser systems that they are designed and manufactured in accordance with agreed-upon specifications. In resolving claims under both the defects and performance warranties, we have the option of either repairing or replacing the covered laser cleaning equipment.
We also warrant the owners of our custom laser systems that are designed and manufactured in accordance with agreed-upon specifications. In resolving claims under both the defects and performance warranties, we have the option of either repairing or replacing the covered laser cleaning equipment.
Below is the description of abbreviations and definitions used in Laser Photonics Laser Blaster products qualification chart: 9 Table of Contents · Roughing-Rough surface condition for thick material · Mid-Range-Normal level below roughest surface condition for medium material thickness · Finishing-Least amount of roughness on a surface for thin materials · Gauge-indication of a measurement of industrial materials. · Grit-indication of roughness to apply to a surface for preparation prior to coating. · CAML-grade of abrasive media used for the sandblasting industry. · DPI-Dots per inch · LPI-Lines per inch · Laser Grade-Designated choice of laser for best results · Strip Rate in Ft Squared per hour is calculated as follows: 2X (laser power in KW) / (coating thickness in mils, where one mill= .001), X 60 minutes.
Below is the description of abbreviations and definitions used in Laser Photonics Laser Blaster products qualification chart: ● Roughing-Rough surface condition for thick material ● Mid-Range-Normal level below roughest surface condition for medium material thickness ● Finishing-Least amount of roughness on a surface for thin materials ● Gauge-indication of a measurement of industrial materials. ● Grit-indication of roughness to apply to a surface for preparation prior to coating. ● CAML-grade of abrasive media used for the sandblasting industry. ● DPI-Dots per inch ● LPI-Lines per inch ● Laser Grade-Designated choice of laser for best results ● Strip Rate in Ft Squared per hour is calculated as follows: 2X (laser power in KW) / (coating thickness in mils, where one mill= .001), X 60 minutes.
Diversified and Proprietary Technology Platform and Knowhow We were able to secure through our affiliation with ICT Investments a diverse portfolio of knowhow, trade secrets and proprietary technologies. We believe that we possess the design documentation for the largest array of laser-based systems for material processing in North America.
Diversified and Proprietary Technology Platform and Knowhow We were able to secure through our affiliation with ICT Investments a diverse portfolio of know-how, trade secrets and proprietary technologies. We believe that we possess design documentation for the largest array of laser-based systems for material processing in North America.
Non-compliance with quality control measurements could result in loss of business with our customers, fines and penalties. Facility On December 1, 2019, we entered a sub-lease with ICT Investments for 5,000 sf of manufacturing space on a month-to-month basis at $4,050 per month.
Non-compliance with quality control measurements could result in loss of business with our customers, fines and penalties. Facilities On December 1, 2019, we entered a sub-lease with ICT Investments for 5,000 sf of manufacturing space on a month-to-month basis at $4,050 per month.
Our solutions span use cases throughout product lifecycles, from product fabrication to maintenance and repair, as well as aftermarket operations. Our laser blasting solutions are applicable in every industry dealing with materials processing, including automotive, aerospace, healthcare, consumer products, shipbuilding, aerospace, heavy industry, machine manufacturing, nuclear maintenance and de-commissioning and surface coating.
Our solutions span use cases throughout product lifecycles, from product fabrication to maintenance and repair, as well as aftermarket operations. Our laser blasting solutions are applicable in most industries dealing with materials processing, including automotive, aerospace, healthcare, consumer products, shipbuilding, heavy industry, machine manufacturing, nuclear maintenance and de-commissioning and surface coating.
Through our affiliation with ICT, its portfolio companies, and their customers, we have instant access to more than 1,500 high profile Fortune 5000 customer prospects as well as recognition as a global leader in manufacturing premium laser equipment.
Through our affiliation with ICT Investments, its portfolio companies and its customers, we have access to more than 1,500 high profile Fortune 5000 customer prospects as well as recognition as a global leader in manufacturing premium laser equipment.
ITEM 1. BUSINESS OVERVIEW We are pioneering a new generation of laser blasting technologies focused on disrupting the sandblasting and abrasives blasting markets. We offer a full portfolio of integrated laser blasting solutions for corrosion control, rust removal, de-coating, pre- and post-welding, laser cleaning and surface conditioning.
We are pioneering a new generation of laser blasting technologies focused on disrupting the sandblasting and abrasives blasting markets. We offer a full portfolio of integrated laser blasting solutions for corrosion control, rust removal, de-coating, pre-welding and post-welding, laser cleaning and surface conditioning.
We have a marketing and sales budget equal to 10% of our gross sales, and a new product promotional budget of $1.2M for 2024. Product Warranty and Support We offer for sale with our equipment a two-year limited warranty against defects in materials and workmanship under normal use and service conditions following delivery of our equipment to our customers.
We have a marketing and sales budget equal to 10% of our gross sales, and a new product promotional budget of $0.7M for 2025. Product Warranty and Support We offer for sale with our equipment a two-year limited warranty against defects in materials and workmanship under normal use and service conditions following delivery of our equipment to our customers.
We seek to differentiate ourselves from our competitors through superior product pricing, performance, and service. We believe that a global presence and investments in application engineering and support will create competitive advantages in serving multinational and local companies. Promote Awareness Through Training and Education.
We seek to differentiate ourselves from our competitors through superior product pricing, performance and service. We believe that a global presence and investments in application engineering and support will create competitive advantages in serving multinational and local companies. New Product Development .
These laws and regulations, among other things: · require certification and disclosure of all cost or pricing data in connection with certain types of contract negotiations; · impose acquisition regulations, which may change or be replaced over time, that define which costs can be charged to the U.S.
These laws and regulations, among other things: ● require certification and disclosure of all cost or pricing data in connection with certain types of contract negotiations; ● impose specific and unique cost accounting practices that may differ from U.S. generally accepted accounting principles (GAAP); ● impose acquisition regulations, which may change or be replaced over time, that define which costs can be charged to the U.S.
Our facility is currently equipped with three of our latest advanced laser cleaning demonstration models. 13 Table of Contents Laser Blaster Systems Implications of Being an Emerging Growth Company We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and therefore we intend to take advantage of certain exemptions from various public company reporting requirements, including not being required to have our internal controls over financial reporting audited by our independent registered public accounting firm pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments.
The facility is 52,200 total square ft at a cost of $27,700 per month. 13 Table Of Contents Implications of Being an Emerging Growth Company We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and therefore we intend to take advantage of certain exemptions from various public company reporting requirements, including not being required to have our internal controls over financial reporting audited by our independent registered public accounting firm pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments.
We expect to increase sales through an industry recognized expertise in clearly defined markets with substantial sales demand such as rust removal equipment for the shipbuilding industry, laser de-contamination equipment for the nuclear industry and laser blasting cabinets for the general manufacturing industry.
We expect to increase sales through an industry-recognized expertise in clearly defined markets with substantial sales demand such as rust removal equipment for the shipbuilding industry, laser de-contamination equipment for the nuclear industry and laser blasting cabinets for the general manufacturing industry. Broaden Customer Relationships . We expect to develop a globally diversified customer base in a variety of industries.
We also require our customers and business partners to enter into confidentiality agreements before we disclose any sensitive aspects of our modules, technology, or business plans. Employees and Human Capital As of March 1st, 2024, we had 56 full time employees and no part-time employees.
We also require our customers and business partners to enter into confidentiality agreements before we disclose any sensitive aspects of our modules, technology, or business plans. 11 Table Of Contents Employees and Human Capital As of December 31, 2024, we employed 94 full-time team members and had no part-time employees.
It includes a materials stock room, a ramp and high dock, loading and moving equipment, a machine shop, an electronics room, and an equipment assembly area. The monthly rent for this facility is currently $15,549.
The facility is currently equipped with three of our latest advanced laser cleaning demonstration models. It includes a materials stock room, a ramp and high dock, loading and moving equipment, a machine shop, an electronics room, and an equipment assembly area. The monthly rent for this facility is currently $15,549.
Multi-market and Multi-product Approach We intend to develop and manufacture laser systems for a variety of markets to reduce the financial impact that a downturn in any one market would have with an emphasis developing standard systems applicable for a variety of markets and applications.
We intend to develop and manufacture laser systems for a variety of markets to reduce the financial impact that a downturn in any one market would have. Accent on Developing Standard Systems for Specific Markets.
Our Product Platforms Since our founding in 2019, and through IP received from ICT Investments, we have developed an extensive portfolio of products based on proprietary technologies that form the foundation of our laser blasting equipment manufacturing solutions, which are comprised of hardware, equipment design documentation, bills of materials, software, materials, and service practices.
Laser Blasting is effective on small parts and sensitive materials, as well as surfaces of ships, bridges, aircraft, pipelines, large vehicles, and trains, among others. 7 Table Of Contents Our Product Platforms Since our founding in 2019, and through IP received from ICT Investments, we have developed an extensive portfolio of products based on proprietary technologies that form the foundation of our laser blasting equipment manufacturing solutions, which are comprised of hardware, equipment design documentation, bills of materials, software, materials, and service practices.
No single customer has accounted for more than 10% of our total revenue from inception to date. Research, Development and Engineering The principal focus of our research and development activity is the development of our proprietary laser-based cleaning equipment to replace global sand blasting and abrasive blasting applications in a large number of markets discussed below.
Research, Development and Engineering The principal focus of our research and development activity is the development of our proprietary laser-based cleaning equipment to replace global sand blasting and abrasive blasting applications in a large number of markets discussed below.
Our vertically integrated operations allow us to reduce development and advanced laser equipment manufacturing time, offer better prices, control quality, and protect our proprietary knowhow and technology compared to other laser cleaning companies and companies with competing technologies.
Our vertically integrated operations allow us to reduce development and advanced laser equipment manufacturing time, offer better prices, control quality and protect our proprietary knowhow and technology compared to other laser cleaning companies and companies with competing technologies. We initiated our sales effort in December 2019. By December 31, 2024, we had net revenues of $3.415 million.
In January 2020, we expanded the lease with ICT Investments to include the entire facility of 18,000 sf. In October of 2021, a direct lease was signed with the landlord for three years, terminating on October 31, 2024. The facility is currently equipped with three of our latest advanced laser cleaning demonstration models.
In January 2020, we expanded the lease with ICT Investments to include the entire facility of 18,000 sf. In October of 2021, a direct lease was signed with the landlord for three years, terminating on October 31, 2024. In November we entered into a lease amendment that expires December 31, 2025.
The costs associated with these warranty obligations are not expected to be significant and no such costs have been recorded in our financial statements. Competition In the laser cleaning market, the competition is fragmented with a few competitors that are small or privately owned, or which compete with us on a limited geographic, industry, or application specific basis.
The costs associated with these warranty obligations are not expected to be significant and no such costs have been recorded in our financial statements. Competition The laser cleaning market is highly fragmented, with most competitors being small, privately held, or operating within limited geographic regions, specific industries, or niche applications.
Government Contracts and Regulations Our U.S Government business is heavily regulated. We contract with several U.S. Government agencies and entities, principally all branches of the U.S. military. We must comply with, and are affected by, laws and regulations relating to the formation, administration, and performance of U.S. Government contracts.
We must comply with, and are affected by, laws and regulations relating to the formation, administration, and performance of U.S. Government contracts.
In addition, through the expertise and reputation of our officers, Board members and advisors, we have the foundation of our technologically advanced, disruptive laser systems specifically suited for most material processes with specific cleaning requirements and challenges. At our core, we are a company of innovators.
In addition, through the expertise and reputation of our officers, Board members and advisors, we have the foundation of our technologically advanced, disruptive laser systems specifically suited for most material processes with specific cleaning requirements and challenges. 5 Table Of Contents On October 30, 2024, we entered into an Asset Purchase Agreement with Control Micro Systems, Inc.
We also compete with end-users that produce laser technology, as well as with manufacturers of non-laser methods and tools, such as traditional abrasives blasting (referred to as sandblasting), non-laser welding, cutting dies, mechanical cutters, and plasma cutters in the materials processing market.
Our systems are designed and manufactured to fully comply with OSHA, FDA, and CDRH regulations, ensuring that companies receive not only cutting-edge performance but also the highest level of operational safety and reliability. 10 Table Of Contents We also compete with end-users that produce laser technology, as well as with manufacturers of non-laser methods and tools, such as traditional abrasives blasting (referred to as sandblasting), non-laser welding, cutting dies, mechanical cutters, and plasma cutters in the materials processing market.
The key elements of our strategy for growth include the following: New Product Development We intend to target new applications early in the development cycle and drive adoption by leveraging our strong customer relationships, engineering expertise and competitive production costs.
We intend to target new applications early in the development cycle and drive adoption by leveraging our strong customer relationships, engineering expertise and competitive production costs. We intend to continue to stay ahead of the technology curve by researching and developing cutting edge products and technologies for both large and small businesses.
The CleanTech Titan Series Laser Blasting System is a high power, large format laser parts cleaning, rust removal, and surface conditioning system with up to 6′ x12′ working envelope. The industrial, turn-key laser cleaning system operates as a standalone unit or can be easily integrated into a production line environment.
The CleanTech™ Titan Series is a high-power, large-format laser system designed for parts cleaning, rust removal, and surface conditioning, featuring an expansive 6′ x 12′ working area and Flex-Loading options for seamless, continuous operation. This industrial-grade, turn-key solution can operate as a standalone unit or be fully integrated into an existing production line.
Source: Robotic Laser Coating Removal System ESTCP Project WP- 0526 apps.dtic.mil Our current Laser Blasting solutions are as follows: Handheld Laser Blasting™: We offer the widest line of Class IV handheld laser blasting equipment in the world, from 20W (watts) to the 3000W system, including the world’s most powerful production Laser Blaster™ on the market—the Jobsite 2000—to a more powerful JobSite 3000 which debuted during Aviation Week’s MRO Americas 21 trade show in April 2021.
Source: Robotic Laser Coating Removal System ESTCP Project WP- 0526 apps.dtic.mil 8 Table Of Contents Our current Laser Blasting solutions are as follows: Handheld CleanTech Line: We offer the widest range of Class IV handheld laser blasting equipment in the world, spanning from 50W to 3000W, and including the world’s most powerful production laser blaster on the market — the CleanTech Industrial Roughening Laser 3060, delivering average power levels in the 10,000-watt range.
It also reduces concerns over safety for the factory line workers since the robot can perform multiple tasks at the same time when equipped with AI module, 3D scanner and visualizer, vision system and Class 1 Safety shroud or enclosure. 10 Table of Contents Customers Our intent is to establish additional relationships with Fortune 1000 customers primarily within the United States and with select Fortune 1000 customers around the globe and represent a broad array of industries, including automotive, aerospace, healthcare, consumer products, heavy industry, machine design, research, and others.
Customers Our intent is to establish additional relationships with Fortune 1000 customers primarily within the United States and with select Fortune 1000 customers around the globe and represent a broad array of industries, including automotive, aerospace, healthcare, consumer products, heavy industry, machine design, research, and others.
Under the terms of this agreement, we have a perpetual, worldwide, exclusive license to sell the Laser Photonics™ branded equipment for laser cleaning and rust removal.
We have a perpetual, worldwide exclusive license agreement with ICT Investments, LLC (“ICT Investments”), an affiliate of the Company as discussed below, to sell the Laser Photonics™ branded equipment and licenses for laser cleaning and rust removal, in exchange for 3,000,000 shares of common stock.
The CleanTech™ Laser Blaster Cabinet is a self-contained, industrial-grade laser cleaning machine. This system is the only laser cleaning machine in the world that incorporates the exclusive power of a fiber laser with a handheld laser-blasting head inside a fully enclosed 30” x 26” workspace. This system is designed for speed, precision, safety, and flexibility.
Designed for companies of all sizes, this self-contained, industrial-grade laser cleaning machine replaces abrasive blasting and chemical baths, providing a high-precision, environmentally friendly solution for part cleaning and material preparation. What sets the CleanTech™ Laser Blaster Cabinet apart is its exclusive fiber laser technology, paired with a handheld laser-blasting head, all housed within a fully enclosed 30” x 26” workspace.
Marketing and Sales For the year ended December 31, 2023, we employed 8 direct salesmen and 2 distributors in Japan and Australia. 2023 was a year of investments into sales and marketing activity and we invested near $4M in development of sales and marketing operation.
Marketing and Sales For the year ending in December 31, 2024, we employed 8 direct salespeople, 10 global distributors/resellers, and signed two technology partnerships for integration of our Cleantech product line into robotic platforms for both commercial and defense applications. 2023 & 2024 was a year of investments sales and marketing activity, and we invested nearly $4M in development and scaling of sales and marketing operation.
Class I Laser Blasting Systems Our Mega Center and Titan lines of Class I Laser Blasting Systems are designed with mass production in mind. These production line-capable systems are designed with automation control and automated materials-loading capabilities to allow for maximum throughput on assembly lines for high production, high precision environments.
CleanTech™ Class I Laser Blasting Systems Our CleanTech™ MegaCenter, Titan, and Titan Express automated Class I-ready laser blasting systems are purpose-built for mass production environments. Engineered with advanced automation controls and automated material-loading capabilities, these systems deliver maximum throughput for high-volume, high-precision manufacturing operations.
Laser Blasting Cabinet The laser blasting cabinet is configured as a fully enclosed Class 1 workspace designed to replace sandblasting enclosures, along with their noise, dust, media storage, replenishment, and clean-up requirements. The Blasting Cabinet is intended to serve companies of any size that use abrasive blasting or chemical baths to clean parts or prepare materials.
CleanTech™ Laser Blaster Cabinet The CleanTech™ Laser Blaster Cabinet is a fully enclosed, Class 1 laser workspace, engineered as a safer, cleaner, and more efficient alternative to traditional sandblasting enclosures—eliminating the noise, dust, media storage, replenishment, and cleanup associated with abrasive blasting.
Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing, and integrating our existing and new employees, advisors and consultants. Government Regulation Our current and contemplated activities and the products and processes that will result from such activities are subject to substantial government regulation, both in the United States and internationally.
Government Regulation Our current and contemplated activities and the products and processes that will result from such activities are subject to substantial government regulation, both in the United States and internationally. Government Contracts and Regulations Our U.S Government business is heavily regulated. We contract with several U.S. Government agencies and entities, principally all branches of the U.S. military.
We market our products globally through our direct sales force located in the United States and a few sales representatives located in Europe, Japan and South Asia. 4 Table of Contents We have an exclusive license agreement with ICT Investments.
We market our products globally through our direct sales force which is located in the United States.
Some of our competitors are increasing the output power of their fiber lasers to compete with our high-powered, industrial grade products.
Some of these competitors are attempting to close the gap by increasing the output power of their fiber lasers to compete with our high-powered, industrial-grade solutions. However, most competitors do not meet CDRH safety requirements for Class 4 laser systems, making them unlikely to be considered by many companies that prioritize workplace safety and regulatory compliance.
We are developing an even more powerful 4000W handheld system. The CleanTech™ 2000-CTH Jobsite is a 2000W handheld laser cleaning machine and surface preparation system designed to remove rust, paint and other impurities from steel, aluminum, iron, and many more surface types.
The CleanTech 3060 is a high-performance cleaning and surface preparation system, engineered to efficiently remove rust, paint, and other surface contaminants from materials such as steel, aluminum, iron, and a wide range of other substrates.
Removed
We believe that our laser cleaning technology, which we refer to as Laser Blasting™, is one of the most exciting and transformational innovations of our time.
Added
ITEM 1. BUSINESS OVERVIEW We were formed under the law of Wyoming on November 8, 2019. We changed our domicile to Delaware on March 5, 2021.
Removed
It has the capacity to change the way society combats corrosion, nuclear contamination (transmutation), material surface preparation, rust removal, equipment and engine maintenance and repair, as well as myriad number of other industrial processes, currently employing unhealthy, dangerous, and environmentally hazardous old technologies.
Added
We are a vertically integrated manufacturing company for photonics-based industrial products and solutions and, since recently acquiring the assets of Control Micro Systems, Inc., have now expanded the market for our laser products into the large, growing pharmaceutical manufacturing vertical, in what we believe is a recession-resistant sector with significant barriers to entry.
Removed
Our mission is to make laser blasting accessible to operation personnel in every industry involved in any type of material treatment.
Added
We are strategically positioned to drive growth and innovation in the laser technology market by targeting three key customer segments: government entities, Fortune 1000 companies, and medium/small businesses. Each of these segments presents unique opportunities and challenges, and our business model is designed to cater specifically to the needs and growth potential within each category.
Removed
In doing so, we believe we will empower businesses to adopt radical new approach to design, produce, maintain and repair equipment utilizing cleaner, safer, energy efficient and more cost-effective laser-based technologies to outcompete and outperform competitors using obsolete 19th century technologies.
Added
For government agencies, we provide highly specialized laser solutions that meet stringent regulatory and performance standards. This segment benefits from our expertise in delivering reliable, durable, and effective laser systems for various applications, from defense and aerospace to public infrastructure projects.
Removed
With our state-of- the-art technology, small service companies working in high-growth industries can achieve superior financial results that will propel future global economic growth. At this moment, “do no harm” corporate social responsibility initiatives have combined with legislative and social initiatives to safeguard the health of workers, while protecting the environment, and lowering carbon emissions.
Added
Working with government clients not only solidifies our reputation as a trusted provider of advanced laser technology but also paves the way for new contracts and collaborative projects.
Removed
In the case of the world’s largest single market for industrial laser cleaning—the United States—legislative and regulatory crackdown on the use of abrasives blasting, coupled with official government policy requiring government agencies to Buy American products whenever possible are barriers to entry for most companies trying to compete in the industrial laser cleaning equipment market.
Added
One of our current projects is the Laser Shield Anti-Drone System (LSAD), a joint development with our affiliate, Fonon Corporation, to create a laser defense system to serve as an immediate response defense system for addressing the threat of small-scale unmanned aerial systems (UAS) in conflict zones and expeditionary locations.
Removed
By introducing our cleaner, safer, energy efficient, and more cost-effective laser-based technologies to replace antiquated hazard-prone abrasives blasting methods--sandblasting, abrasive blasting, grinding, chemical etching and the use of toxic chemical solvents-- we believe that we are positioned with the right technology, at the right time, and in the right place to provide the solution that will disrupt the abrasives blasting industry.
Added
We successfully completed a test of the LSAD prototype at our Orlando facility. Fortune 1000 companies represent another critical segment, where our laser technology can significantly enhance operational efficiency, precision, and productivity. By addressing the unique challenges of large-scale industrial applications, we position ourselves as an essential partner in the innovation strategies of these corporations.
Removed
In contrast to abrasive cleaning, laser cleaning is a non-contact and non-abrasive process to remove contaminants or impurities on the surface of metals by physically removing the upper layer of the substrate using laser irradiation and where a desired depth can be achieved with a high degree of accuracy and throughput.
Added
Our advanced laser solutions help these clients stay competitive and maintain high-quality standards, driving repeat business and fostering long-term partnerships. 4 Table Of Contents Medium and small businesses represent the third key pillar of our customer base, and we recognize that this segment has unique operational needs, budget considerations, and purchasing behaviors compared to larger enterprises and government agencies.
Removed
We expect to introduce the new laser-based transmutation process into maintenance and decommissioning of nuclear facilities, as studies have shown that metal surfaces in those facilities have been exposed to radiation and that the radioactivity is primarily located in the oxide layer.
Added
To better serve this growing market, we have launched a targeted initiative to expand our outside sales force and equip them with our CleanTech Professional Portable Finishing Laser 1040 (CTPF-1040)—a compact, high-performance laser system designed for versatility, mobility, and ease of use.
Removed
Accordingly, we propose to develop the decontamination of metallic surfaces by laser ablation which consists of ejecting surface contamination using high energy pulses and trapping ablated matter (the impurities removed from the metal’s surface) in a filter to avoid its release into the environment.
Added
This initiative empowers our sales team to bring the CleanTech experience directly to the customer, allowing potential clients to see and feel the benefits of our laser technology in real-time, within their own environments.
Removed
We believe that laser cleaning has many advantages over abrasive cleaning methods such as the minimization of secondary waste, the absence of effluents and the reduction of the exposure of workers to toxic waste through automation of the cleaning process.
Added
For situations involving larger, more complex components—or when customers are unable to send samples to our Customer Experience Center—we have deployed two fully equipped mobile demonstration vans.
Removed
Our potential to capitalize on this significant opportunity set is rooted in our deep experience in, and our commitment to, research and development. Our engineering efforts are led by a team of world-renowned experts in advanced manufacturing, material science and engineering.
Added
These vehicles are outfitted with a range of laser systems and come complete with onboard power generation, compressed air, and full laser safety gear, enabling us to perform live on-site demonstrations, sample processing, and customer training anywhere in the field.
Removed
Our in-house R&D team is led by Igor Vodopiyanov, a PhD particle physicist who served as a lead subject matter expert at the CERN Large Hadron Collider, and who managed the Hadron Calorimeter Calibration and Condition Group of the CMS Collaboration, members of the particle physics community from across the globe in a quest to advance humanity’s knowledge of the very basic laws of our Universe.
Added
By strategically addressing the distinct needs of enterprise, government, and small-to-medium business customers—and leveraging our agile, field-ready sales team to deepen engagement and showcase our technology—we are positioning ourselves for strong, sustainable growth. Our customer-first approach, combined with cutting-edge product innovation and adaptive market strategies, strengthens our reputation as a trusted, forward-thinking leader in the laser technology industry.
Removed
Our announced laser blasting solutions are as follows: Handheld Laser Blasting™: We offer the widest line of Class IV handheld laser blasting equipment in the world, from 20W (watt) to 3000W system, including the world’s most powerful production Laser Blaster™ on the market—the Jobsite 2000—to the even more powerful JobSite 3000 which debuted at Aviation Week’s MRO Americas 21 trade show at the end of April 2021.
Added
On October 18, 2023, we entered into a license agreement with an affiliated company, Fonon Technologies, Inc., which is majority-owned by ICT Investments, for an exclusive, worldwide, nontransferable license for high power turbo piercing (“Cold Cutting”) laser cutting technology and any improvements to such technology to allow us to manufacture, sell, export and import products incorporating such technology in return for our paying a license fee of $350,000 in cash and a one-time grant of 1,000,000 restricted shares of our common stock to ICT Investments.
Removed
We have under development our most powerful laser blasting equipment, our 4000W handheld system. Laser Blasting Cabinet: This affordable and safe solution is configured as a fully enclosed Class 1 workspace, designed to replace sandblasting enclosures, along with their noise, dust, media storage, replenishment, and clean-up requirements.
Added
ICT Investments LLC currently owns approximately 31.13% of the outstanding shares of our common stock and Fonon Corporation currently owns approximately 21.04% of the outstanding shares of our common stock, and collectively are our majority shareholders.
Removed
The Blasting Cabinet is ideal for companies of any size that use abrasive blasting or chemical baths to clean parts or prepare materials. Class I Laser Blasting Systems: Our Mega Center and Titan lines of Class I Laser Blasting Systems are designed with mass production in mind.
Added
Dmitriy Nikitin has voting control of the Company through his ownership of all membership interests of ICT Investments, LLC which is the controlling entity of Fonon Corporation and Fonon Technologies, Inc.
Removed
These production line-capable systems are designed with automation control and automated materials-loading capabilities to allow for maximum throughput on assembly lines for high production/high precision environments. Robotic Laser Blasting Cells with AI: Robots are intended to lighten the workload for us humans. We achieve this with user programmable AI (UPAI) driving our C-Robots.
Added
On May 21, 2024 we entered into a license agreement with Fonon Corporation to receive an exclusive, worldwide, sublicensable license to Fonon’s laser material processing equipment and technology, including all applications of laser cutting, marking, engraving, laser welding, brazing, ablation, laser drilling, semiconductor chip marking, semiconductor and flat panel display laser processing equipment, all other laser material processing equipment documented or existing in a form of knowhow and/or trade secrets in return for 3,000,000 restricted shares of Laser Photonics common stock.
Removed
Line workers can quickly and easily program these precision robots to complete complex and repetitive tasks in high throughput production environments. We initiated our sales effort in December 2019. By December 31, 2023, we had gross sales of $ 4,520,892 and net sales of $ 3,939,473.
Added
ICT Investments, LLC, through its control of Fonon Corporation and Fonon Technologies, Inc., in the aggregate, owns approximately _ 59.19 _% of our common stock and will have the voting power to decide all matters submitted to a vote of our shareholders, including the election of our directors.
Removed
We sell our products globally to end users, and principally to Fortune 1000 companies, as well as to agencies of the U.S. Government.
Added
(“CMS”), a laser company located in Orlando, Florida, that designs and builds turnkey laser material processing systems for marking, cutting, drilling and welding. CMS allows us to expand into the pharmaceutical market for controlled-release medications that are expanding rapidly, driven by the growing need for more effective and patient-friendly drug delivery systems.
Removed
We are led by visionary technologists and a team of proven leaders with experience bringing emerging technologies to market across the hardware, materials, and software sectors.
Added
Controlled-release tablets, which gradually release medication over time, require precision manufacturing techniques to ensure the proper dosage and timing of active ingredient release. Laser technology plays a critical role in creating micro-drilled apertures in these tablets, ensuring accurate and consistent drug release.
Removed
We believe that our technologies have the potential to empower engineers and designers to adopt laser blasting as the only known alternative to sand blasting and to drive new application discovery as well as to provide manufacturers with reliable and high-performance solutions that will facilitate their production capabilities and maintenance, repair, and operations (“MRO”).

… 109 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

74 edited+15 added−13 removed199 unchanged
Biggest changeAs a result of these factors, we could experience award and funding delays on international programs and could incur losses on such programs, which could negatively impact our results of operations and financial condition. 20 Table of Contents We are also subject to a number of other risks including: · The absence in some jurisdictions of effective laws to protect our intellectual property rights; · Multiple and possibly overlapping and conflicting tax laws; · Restrictions on movement of cash; · The burdens of complying with a variety of national and local laws; · Political instability; · Currency fluctuations; · Longer payment cycles; · Restrictions on the import and export of certain technologies; · Price controls or restrictions on exchange of foreign currencies; and · Trade barriers.
Biggest changeWe are also subject to a number of other risks including: ● The absence in some jurisdictions of effective laws to protect our intellectual property rights; ● Multiple and possibly overlapping and conflicting tax laws; ● Restrictions on movement of cash; ● The burdens of complying with a variety of national and local laws; ● Political instability; ● Currency fluctuations; ● Longer payment cycles; ● Restrictions on the import and export of certain technologies; ● Price controls or restrictions on exchange of foreign currencies; and ● Trade barriers. 22 Table Of Contents Our international operations are subject to special U.S. government laws and regulations, such as the Foreign Corrupt Practices Act, and regulations and procurement policies and practices, including regulations to import-export control, which may expose us to liability or impair our ability to compete in international markets.
There is intense competition in our market. There is intense competition amongst manufacturers of crystalline silicon laser modules, thin-film laser modules, solar thermal lasers, and concentrated fiber laser systems. Our management is aware that failure to compete away eventual new entrants will affect overall business prospects and the product itself.
There is intense competition in our market. There is intense competition amongst manufacturers of crystalline silicon laser modules, thin-film laser modules, solar thermal lasers, and concentrated fiber laser systems. Our management is aware that the failure to compete away eventual new entrants will affect overall business prospects and the product itself.
These types of events could disrupt our operations, require significant management attention and resources, and could negatively impact our reputation among our customers and the public, which could have a negative impact on our financial condition, results of operations and liquidity. We are continuously exposed to cyber-attacks and other security threats, including physical break-ins.
These types of events could disrupt our operations, require significant management attention and resources, and could negatively impact on our reputation among our customers and the public, which could have a negative impact on our financial condition, results of operations and liquidity. We are continuously exposed to cyber-attacks and other security threats, including physical break-ins.
Any non-confidential disclosure to or misappropriation by third parties of our confidential or proprietary information could enable competitors to quickly duplicate or surpass our technological achievements, thus eroding our competitive position in our market.
Any non-confidential disclosure or misappropriation by third parties of our confidential or proprietary information could enable competitors to quickly duplicate or surpass our technological achievements, thus eroding our competitive position in our market.
Interference, derivation or other proceedings brought at the USPTO, may be necessary to determine the priority or patentability of inventions with respect to our patent applications or those of our licensors or potential collaborators. Litigation or USPTO proceedings brought by us may fail or may be invoked against us by third parties.
Interference, derivation or other proceedings brought at USPTO, may be necessary to determine the priority or patentability of inventions with respect to our patent applications or those of our licensors or potential collaborators. Litigation or USPTO proceedings brought by us may fail or may be invoked against us by third parties.
Our Chief Executive Officer and Chief Financial Officer will need to certify that our disclosure controls and procedures are effective in ensuring that material information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Our Chief Executive Officer and Chief Financial Officer will need to certify that our disclosure controls and procedures are effective in ensuring that material information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC’s rules and forms.
In addition, during the course of this kind of litigation or proceedings, there could be public announcements of the results of hearings, motions or other interim proceedings or developments or public access to related documents. If investors perceive these results to be negative, the market price for our common stock could be significantly harmed.
In addition, during this kind of litigation or proceedings, there could be public announcements of the results of hearings, motions or other interim proceedings or developments or public access to related documents. If investors perceive these results to be negative, the market price for our common stock could be significantly harmed.
If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability of our patents covering one of our product candidates, we would lose at least part, and perhaps all, of the patent protection on such product candidate. Such a loss of patent protection would harm our business.
If a defendant were to prevail over a legal assertion of invalidity and/or unenforceability of our patents covering one of our product candidates, we would lose at least part, and perhaps all, of the patent protection on such a product candidate. Such a loss of patent protection would harm our business.
A termination for default could eliminate a revenue source, expose us to liability and have an adverse effect on our ability to compete for future contracts and task orders, especially if the customer is an agency of the U.S. Government.
A termination for default could eliminate a revenue source, expose us to liability and have an adverse effect on our ability to compete for future contracts and task orders, especially if the customer is an agency of the U.S.
For example: · we might not have been the first to invent or the first to file the inventions covered by each of our pending patent applications and issued patents; · others may be able to make, use, sell, offer to sell or import products that are similar to our products or product candidates but that are not covered by the claims of our patents; others may independently develop similar or alternative technologies or duplicate any of our technologies; · the proprietary rights of others may have an adverse effect on our business; · any proprietary rights we do obtain may not encompass commercially viable products, may not provide us with any competitive advantages or may be challenged by third parties; 22 Table of Contents · any patents we obtain, or our in-licensed issued patents, may not be valid or enforceable; or · we may not develop additional technologies or products that are patentable or suitable to maintain as trade secrets. · If we or our current licensors or licensees, or any future licensors or licensees, fail to prosecute, maintain and enforce patent protection for our product candidates, our ability to develop and commercialize our product candidates could be harmed and we might not be able to prevent competitors from making, using and selling competing products.
For example: ● we might not have been the first to invent or the first to file the inventions covered by each of our pending patent applications and issued patents; ● others may be able to make, use, sell, offer to sell or import products that are similar to our products or product candidates but that are not covered by the claims of our patents; others may independently develop similar or alternative technologies or duplicate any of our technologies; ● the proprietary rights of others may have an adverse effect on our business; ● any proprietary rights we do obtain may not encompass commercially viable products, may not provide us with any competitive advantages or may be challenged by third parties; ● any patents we obtain, or our in-licensed issued patents, may not be valid or enforceable; or ● we may not develop additional technologies or products that are patentable or suitable to maintain as trade secrets. ● If we or our current licensors or licensees, or any future licensors or licensees, fail to prosecute, maintain and enforce patent protection for our product candidates, our ability to develop and commercialize our product candidates could be harmed and we might not be able to prevent competitors from making, using and selling competing products.
Such shortages have resulted in, and may continue to result in, cost increases for labor, fuel, materials and services, and could continue to cause costs to increase, and also result in the scarcity of certain materials.
Such shortages have resulted in and may continue to result in cost increases for labor, fuel, materials and services, and could continue to cause costs to increase, and result in the scarcity of certain materials.
Significant expenses arising from product liability or warranty claims could have a material adverse effect on our business, financial condition, and operating results. 16 Table of Contents We need to increase the size and scale of our organization, and we may experience difficulties in managing such growth, which might impair our financial performance.
Significant expenses arising from product liability or warranty claims could have a material adverse effect on our business, financial condition, and operating results. 17 Table Of Contents We need to increase the size and scale of our organization, and we may experience difficulties in managing such growth, which might impair our financial performance.
Sales of substantial amounts of shares in the public market, or the perception that such sales could occur, could depress prevailing market prices for the shares. Such sales may also make it more difficult for us to sell equity securities or equity-related securities in the future at a time and price which it deems appropriate. ITEM 1B.
Sales of substantial amounts of shares in the public market, or the perception that such sales could occur, could depress prevailing market prices for the shares. Such sales may also make it more difficult for us to sell equity securities or equity-related securities in the future at a time and price which it deems appropriate.
In the future, we may agree to indemnify our manufacturing partners against certain intellectual property claims brought by third parties. 23 Table of Contents Intellectual property litigation involves many risks and uncertainties, and there is no assurance that we will prevail in any lawsuit brought against us.
In the future, we may agree to indemnify our manufacturing partners against certain intellectual property claims brought by third parties. 26 Table Of Contents Intellectual property litigation involves many risks and uncertainties, and there is no assurance that we will prevail in any lawsuit brought against us.
As a smaller reporting company, we are permitted to comply with scaled-back disclosure obligations in our SEC filings compared to other issuers, including with respect to disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We have elected to adopt the accommodations available to smaller reporting companies.
As a smaller reporting company, we are permitted to comply with scaled-back disclosure obligations in our SEC filings compared to other issuers, including with respect to disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We have elected to adopt the accommodation available to smaller reporting companies.
This exclusive forum provision will apply to other state and federal law claims including actions arising under the Securities Act (although our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder).
This exclusive forum provision will apply to other states and federal law claims including actions arising under the Securities Act (although our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder).
We may incur cost overruns as a result of fixed priced government contracts which would have a negative impact on our operations. As we pursue additional U.S. Government contracts in addition to the one U.S. Government contract we now have for the U.S.
We may incur cost overruns because of fixed priced government contracts which would have a negative impact on our operations. As we pursue additional U.S. Government contracts in addition to the one U.S. Government contract we now have for the U.S.
In the event of extreme prolonged adverse market events, such as a global credit crisis, we could incur significant losses. 21 Table of Contents Inflation has been on the rise and continues to destabilize the global economy.
In the event of extreme prolonged adverse market events, such as a global credit crisis, we could incur significant losses. 23 Table Of Contents Inflation has been on the rise and continues to destabilize the global economy.
Competitive factors in this market are all related to product performance, price, customer service, training platforms, reputation, and sales and marketing effectiveness, all of which are factors upon which we believe we can compete successfully but will need greater financial resources to do so. 15 Table of Contents Future acquisitions may be unsuccessful and may negatively affect operations and financial condition.
Competitive factors in this market are all related to product performance, price, customer service, training platforms, reputation, and sales and marketing effectiveness, all of which are factors upon which we believe we can compete successfully but will need greater financial resources to do so. Future acquisitions may be unsuccessful and may negatively affect operations and financial condition.
As a result, fewer broker-dealers may be willing to make a market in our common stock, reducing a stockholder’s ability to resell shares of our common stock. 28 Table of Contents If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our share price and trading volume could decline.
As a result, fewer broker-dealers may be willing to make a market in our common stock, reducing a stockholder’s ability to resell shares of our common stock. If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our share price and trading volume could decline.
The termination of any of our significant Government contracts or the imposition of fines, damages, suspensions or debarment would adversely affect our business and financial condition. The U.S. Government may adopt new contract rules and regulations or revise its procurement practices in a manner adverse to us at any time.
The termination of any of our significant Government contracts or the imposition of fines, damages, suspensions or debarment would adversely affect our business and financial condition. 20 Table Of Contents The U.S. Government may adopt new contract rules and regulations or revise its procurement practices in a manner adverse to us at any time.
Until we cease to be a smaller reporting company, the scaled-back disclosure in our SEC filings will result in less information about our company being available than for other public companies. 25 Table of Contents Our largest stockholder beneficially owns a significant number of shares of our common stock.
Until we cease to be a smaller reporting company, the scaled-back disclosure in our SEC filings will result in less information about our company being available than for other public companies. Our largest stockholder beneficially owns a significant number of shares of our common stock.
We may need to hire additional financial reporting, internal controls and other financial personnel in order to develop and implement appropriate internal controls and reporting procedures. As a result, we will incur significant legal, accounting and other expenses.
We may need to hire additional financial reporting, internal controls and other financial personnel to develop and implement appropriate internal controls and reporting procedures. As a result, we will incur significant legal, accounting and other expenses.
Our industry has experienced, and we expect it will continue to experience, significant changes to business practices as a result of an increased focus on affordability, efficiencies, and recovery of costs, among other items. U.S. Government agencies may face restrictions or pressure regarding the type and number of services that they may obtain from private contractors.
Our industry has experienced, and we expect it will continue to experience, significant changes to business practices because of an increased focus on affordability, efficiencies, and recovery of costs, among other items. U.S. Government agencies may face restrictions or pressure regarding the type and number of services that they may obtain from private contractors.
The patent applications that we may own or license may fail to result in issued patents in the United States or in other countries. Even if patents do issue on such patent applications, third parties may challenge the validity, enforceability or scope thereof, which may result in such patents being narrowed, invalidated or held unenforceable.
The patent applications that we may own, or license may fail to result in issued patents in the United States or in other countries. Even if patents are issued on such patent applications, third parties may challenge the validity, enforceability or scope thereof, which may result in such patents being narrowed, invalidated or held unenforceable.
In addition, even if we are successful in strengthening our controls and procedures, in the future those controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of our consolidated financial statements. Our stock price may be volatile.
In addition, even if we are successful in strengthening our controls and procedures, in the future those controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of our consolidated financial statements. 32 Table Of Contents Our stock price may be volatile.
These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and therefore stockholders may have difficulty selling their shares. FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our stock.
These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and therefore stockholders may have difficulty selling their shares. 33 Table Of Contents FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our stock.
Further, if we encounter delays in our clinical trials, the period of time during which we or our collaborators could market our product candidates under patent protection would be reduced. The degree of future protection of our proprietary rights is uncertain.
Further, if we encounter delays in our clinical trials, the period of time during which we or our collaborators could market our product candidates under patent protection would be reduced. 24 Table Of Contents The degree of future protection of our proprietary rights is uncertain.
The failure to attract and retain highly competent personnel could seriously harm our business, financial condition, and operational results. Our business depends on experienced and highly skilled technicians and business development personnel, and if we are unable to attract such talent, it will be more difficult for us to manage our business and complete contracts.
The failure to attract and retain highly competent personnel could seriously harm our business, financial condition, and operational results. 16 Table Of Contents Our business depends on experienced and highly skilled technicians and business development personnel, and if we are unable to attract such talent, it will be more difficult for us to manage our business and complete contracts.
Therefore, if we are able to innovate more quickly, we will be better able to defend our pricing power.
Therefore, if we can innovate more quickly, we will be better able to defend our pricing power.
Our international business exposes us to geo-political and economic factors, regulatory requirements and other risks associated with doing business in foreign countries. We intend to engage in additional foreign operations which pose complex management, foreign currency, legal, tax and economic risks, which we may not adequately address.
Government. 21 Table Of Contents Our international business exposes us to geo-political and economic factors, regulatory requirements and other risks associated with doing business in foreign countries. We intend to engage in additional foreign operations which pose complex management, foreign currency, legal, tax and economic risks, which we may not adequately address.
Accordingly, other stockholders are unable to influence management or exercise control over our business. We do not intend to pay cash dividends to our stockholders. We paid a one-time cash dividend for the year ended December 31, 2021 in the amount of $310,280.
Accordingly, other stockholders are unable to influence management or exercise control over our business. 29 Table Of Contents We do not intend to pay cash dividends to our stockholders. We paid a one-time cash dividend for the year ending December 31, 2021, in the amount of $310,280.
In addition, we cannot predict or estimate the amount of additional costs we may incur in order to comply with these requirements. We anticipate that these costs will materially increase our selling, general and administrative expenses. Public company compliance may make it more difficult to attract and retain officers and directors.
In addition, we cannot predict or estimate the amount of additional costs we may incur to comply with these requirements. We anticipate that these costs will materially increase our sales, general and administrative expenses. 31 Table Of Contents Public company compliance may make it more difficult to attract and retain officers and directors.
Foreign Corrupt Practices Act, or the FCPA, and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. and other business entities for the purpose of obtaining or retaining business.
Our international operations are subject to the U.S. Foreign Corrupt Practices Act, or the FCPA, and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. and other business entities for the purpose of obtaining or retaining business.
We have a substantial amount of intangible assets, representing approximately 28% of our total assets as of December 31, 2023. While we amortize our intangible assets, they may be subject to impairment testing.
We have a substantial amount of intangible assets, representing approximately 33% of our total assets as of December 31, 2024. While we amortize our intangible assets, they may be subject to impairment testing.
These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects. 27 Table of Contents Any failure to maintain effective internal controls could adversely impact our ability to report our financial position and results from operations on a timely and accurate basis.
We continue to evaluate steps to remediate our material weaknesses. These remediation measures may be time-consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects. Any failure to maintain effective internal controls could adversely impact on our ability to report our financial position and results from operations on a timely and accurate basis.
We cannot be certain that funding will be available on acceptable terms or at all. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience dilution. Any debt financing, if available, may involve restrictive covenants that may impact on our ability to conduct business or return capital to investors.
To the extent that we raise additional funds by issuing equity securities, our stockholders may experience dilution. Any debt financing, if available, may involve restrictive covenants that may impact on our ability to conduct business or return capital to investors.
We cannot give any assurance that our marketing efforts will be successful. If they are not, revenue may be insufficient to cover our growing fixed costs and we may suffer a reduction in profitability. We have a large amount of intangible assets, and if these assets become impaired, our earnings would be adversely affected.
If they are not, revenue may be insufficient to cover our growing fixed costs and we may suffer a reduction in profitability. We have a large amount of intangible assets, and if these assets become impaired, our earnings would be adversely affected.
A termination arising out of our default could expose us to liability and have a negative impact on our ability to obtain future contracts and orders. Furthermore, on contracts for which we are a subcontractor and not the prime contractor, the U.S.
A termination arising out of our default could expose us to liability and have a negative impact on our ability to obtain future contracts and orders. Furthermore, on contracts for which we are a subcontractor and not the prime contractor, the U.S. Government could terminate the prime contract for convenience or otherwise, irrespective of our performance as a subcontractor.
If we do not obtain or retain a listing on the Nasdaq Capital Market and if the price of our common stock is less than $5.00 per share, our common stock will be deemed a penny stock. Risks Related to our Business and Our Industry We have an extremely limited operating history.
If we do not obtain or retain a listing on the Nasdaq Capital Market and if the price of our common stock is less than $5.00 per share, our common stock will be deemed a penny stock. Risks Related to our Business and Our Industry We may need to raise additional capital.
Government contracts and suspension or debarment from U.S. Government contracting that could adversely affect our financial condition. We must comply with laws and regulations relating to the formation, administration and performance of our one existing and anticipated future U.S. Government contracts, which affect how we do business with our customers and may impose added costs on our business. U.S.
We must comply with laws and regulations relating to the formation, administration and performance of our one existing and anticipated future U.S. Government contracts, which affect how we do business with our customers and may impose added costs on our business. U.S.
Under Delaware law, we may indemnify our directors or officers or other persons who were, are or are threatened to be made a named defendant or respondent in a proceeding because the person is or was our director, officer, employee or agent, if we determine that the person: conducted himself or herself in good faith, reasonably believed, in the case of conduct in his or her official capacity as our director or officer, that his or her conduct was in our best interests, and, in all other cases, that his or her conduct was at least not opposed to our best interests; and in the case of any criminal proceeding, had no reasonable cause to believe that his or her conduct was unlawful.
Under Delaware law, we may indemnify our directors or officers or other persons who were, are or are threatened to be made a named defendant or respondent in a proceeding because the person is or was our director, officer, employee or agent, if we determine that the person: conducted himself or herself in good faith, reasonably believed, in the case of conduct in his or her official capacity as our director or officer, that his or her conduct was in our best interests, and, in all other cases, that his or her conduct was at least not opposed to our best interests; and in the case of any criminal proceeding, had no reasonable cause to believe that his or her conduct was unlawful. 30 Table Of Contents These persons may be indemnified against expenses, including attorneys’ fees, judgments, fines, including excise taxes, and amounts paid in settlement, actually and reasonably incurred, by the person in connection with the proceeding.
An adverse change in government spending policies (including budget cuts at the federal level), budget priorities or revenue levels could cause our public sector customers to reduce their purchases or to terminate or not renew their contracts with us, which could adversely affect our business, results of operations or cash flows.
An adverse change in government spending policies (including budget cuts at the federal level), budget priorities or revenue levels could cause our public sector customers to reduce their purchases or to terminate or not renew their contracts with us, which could adversely affect our business, results of operations or cash flows. 18 Table Of Contents Our business could be adversely affected by the loss of certain vendor partner relationships and the availability of their products.
If we are unable to raise additional capital if required or on acceptable terms, we may have to significantly scale back, delay or discontinue the development and/or commercialization of our laser-based cleaning products, restrict our operations or obtain funds by entering into agreements on unattractive terms.
If we are unable to raise additional capital if required or on acceptable terms, we may have to significantly scale back, delay or discontinue the development and/or commercialization of our laser-based cleaning products, restrict our operations or obtain funds by entering into agreements on unattractive terms. 15 Table Of Contents If our proposed marketing efforts are unsuccessful, we may not earn enough revenue to scale the business profitably.
A contractor’s failure to comply with these regulations and requirements could result in reductions to the value of contracts, contract modifications or termination, and the assessment of penalties and fines and lead to suspension or debarment, for cause, from government contracting or subcontracting for a period of time.
A contractor’s failure to comply with these regulations and requirements could result in reductions to the value of contracts, contract modifications or termination, and the assessment of penalties and fines and lead to suspension or debarment, for cause, from government contracting or subcontracting for a period. In addition, government contractors are also subject to routine audits and investigations by U.S.
There exist material weaknesses in our internal controls as of December 31, 2023 If we cannot provide reliable financial reports or prevent fraud, we may not be able to manage our business as effectively as we would if an effective control environment existed, and our business and reputation with investors may be harmed.
If we cannot provide reliable financial reports or prevent fraud, we may not be able to manage our business as effectively as we would if an effective control environment existed, and our business and reputation with investors may be harmed.
That stockholder’s interests may conflict with other stockholders, who may be unable to influence management and exercise control over our business. Our largest stockholder, Fonon Corporation, that is owned by ICT Investments, owns 51% of our shares of common stock.
That stockholder’s interests may conflict with other stockholders, who may be unable to influence management and exercise control over our business. ICT Investments, via common control of Fonon Corporation and Fonon Technologies combined owns 59.19% of our shares of common stock.
Our failure to comply with applicable laws or regulations or misconduct by any of our employees, subcontractors, agents or business partners could damage our reputation and subject us to fines and penalties, restitution or other damages, loss of security clearance, loss of current and future customer contracts and suspension or debarment from contracting with federal, state or local government agencies, any of which would adversely affect our business, reputation and our future results. 19 Table of Contents We may fail to obtain and maintain necessary security clearances, which may adversely affect our ability to perform on certain anticipated U.S. government contracts and depress our potential revenues.
Our failure to comply with applicable laws or regulations or misconduct by any of our employees, subcontractors, agents or business partners could damage our reputation and subject us to fines and penalties, restitution or other damages, loss of security clearance, loss of current and future customer contracts and suspension or debarment from contracting with federal, state or local government agencies, any of which would adversely affect our business, reputation and our future results.
Violations of these regulations or contractual obligations related to regulatory compliance in connection with the performance of customer contracts could also result in liability for significant monetary damages, fines and/or criminal prosecution, unfavorable publicity and other reputational damage, restrictions on our ability to compete for certain work and allegations by our customers that we have not performed our contractual obligations. 17 Table of Contents As a manufacturer of laser cleaning equipment our future success depends on our ability to effectively balance manufacturing production with market demand and reducing our manufacturing cost per watt.
Violations of these regulations or contractual obligations related to regulatory compliance in connection with the performance of customer contracts could also result in liability for significant monetary damages, fines and/or criminal prosecution, unfavorable publicity and other reputational damage, restrictions on our ability to compete for certain work and allegations by our customers that we have not performed our contractual obligations.
Our ability to stop third parties from using our technology or making, using, selling, offering to sell or importing our products is dependent upon the extent to which we have rights under valid and enforceable patents that cover these activities.
Furthermore, some of our competitors have substantially greater intellectual property portfolios, and resources, than we do. 25 Table Of Contents Our ability to stop third parties from using our technology or making, using, selling, offering to sell or importing our products is dependent upon the extent to which we have rights under valid and enforceable patents that cover these activities.
Our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over financial reporting until the later of our second annual report or the first annual report required to be filed with the Securities and Exchange Commission (the “SEC”) following the date upon which we are no longer an “emerging growth company” as defined in the JOBS Act.
If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and/or warrants and our stock price and price for the warrants may be more volatile. 28 Table Of Contents Our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over financial reporting until the later of our second annual report or the first annual report required to be filed with the Securities and Exchange Commission (the “SEC”) following the date upon which we are no longer an “emerging growth company” as defined in the JOBS Act.
In addition, government contractors are also subject to routine audits and investigations by U.S. Government agencies such as the Defense Contract Audit Agency (DCAA) and Defense Contract Management Agency (DCMA). These agencies review a contractor’s performance under its contracts, cost structure and compliance with applicable laws, regulations and standards.
Government agencies such as the Defense Contract Audit Agency (DCAA) and Defense Contract Management Agency (DCMA). These agencies review a contractor’s performance under its contracts, cost structure and compliance with applicable laws, regulations and standards.
Filing, prosecuting and defending patents on our product candidates in all countries throughout the world would be prohibitively expensive. The requirements for patentability may differ in certain countries, particularly in developing countries. Moreover, our ability to protect and enforce our intellectual property rights may be adversely affected by unforeseen changes in foreign intellectual property laws.
We may not be able to enforce our intellectual property rights throughout the world. Filling, prosecuting and defending patents on our product candidates in all countries throughout the world would be prohibitively expensive. The requirements for patentability may differ in certain countries, particularly in developing countries.
Government, and changes in government defense spending could have adverse consequences on our financial position, results of operations and business. Less than _% of our U.S. revenues in 2023 were from sales and services rendered directly or indirectly to the U.S. Government; however, we expect to grow that to 25% in the next 12 months to two years.
Government, and changes in government defense spending could have adverse consequences on our financial position, results of operations and business. In 2024, less than 18% of our U.S. revenues were derived from sales and services provided directly or indirectly to the U.S. Government.
If our proposed marketing efforts are unsuccessful, we may not earn enough revenue to scale the business profitably. Our success will depend on investment in marketing resources and the successful implementation of our marketing plan. Our marketing plan involves attendance at trade shows, conducting private demonstrations, utilizing promotional materials, and employing advertising campaigns in print and/or broadcast media.
Our success will depend on investment in marketing resources and the successful implementation of our marketing plan. Our marketing plan involves attendance at trade shows, conducting private demonstrations, utilizing promotional materials, and employing advertising campaigns in print and/or broadcast media. We cannot give any assurance that our marketing efforts will be successful.
Our business could be adversely affected by the loss of certain vendor partner relationships and the availability of their products. We purchase products from vendors on a global basis as components to include in our finished laser-based cleaning equipment. In the event we were to lose one of our significant vendor partners, our business could be adversely affected.
We purchase products from vendors on a global basis as components to include in our finished laser-based cleaning equipment. In the event we were to lose one of our significant vendor partners, our business could be adversely affected. We expect to enter joint ventures, teaming and other arrangements, and these activities involve risks and uncertainties.
While we expect that the funds from our IPO will meet our financing requirements for the next two to three years, if, in the future, we are not able to generate sufficient revenues from operations and our capital resources are insufficient to meet future requirements, we may have to raise additional funds to allow us to continue to commercialize, market and sell our products.
If, in the future, we are not able to generate sufficient revenues from operations and our capital resources are insufficient to meet future requirements, we may have to raise additional funds to allow us to continue to commercialize, market and sell our products. We cannot be certain that funding will be available on acceptable terms or at all.
We expect to enter into joint ventures, teaming and other arrangements, and these activities involve risks and uncertainties. We expect to enter into joint ventures, teaming and other arrangements.
We expect to enter joint ventures, teaming and other arrangements.
Government could terminate the prime contract for convenience or otherwise, irrespective of our performance as a subcontractor. 18 Table of Contents Our failure to comply with a variety of complex procurement rules and regulations could result in our being liable for penalties, including termination of our current and anticipated U.S. Government contracts, disqualification from bidding on future U.S.
Our failure to comply with a variety of complex procurement rules and regulations could result in our being liable for penalties, including termination of our current and anticipated U.S. Government contracts, disqualification from bidding on future U.S. Government contracts and suspension or debarment from U.S. Government contracting that could adversely affect our financial condition.
Insofar as indemnification for liabilities under the Securities Act of 1933, as amended – the “Securities Act” – may be permitted to directors, officers or persons controlling us under the above provisions, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. 26 Table of Contents Our bylaws include a forum selection clause, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us, remove current management or to be acquired by a third party.
Insofar as indemnification for liabilities under the Securities Act of 1933, as amended – the “Securities Act” – may be permitted to directors, officers or persons controlling us under the above provisions, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
Moreover, our competitors could counterclaim in any suit to enforce our patents that we infringe their intellectual property. Furthermore, some of our competitors have substantially greater intellectual property portfolios, and resources, than we do.
Moreover, our competitors could counterclaim in any suit to enforce our patents that we infringe their intellectual property.
Many U.S. Government programs require contractors to have security clearances. Depending on the level of required clearance, security clearances can be difficult and time-consuming to obtain.
We may fail to obtain and maintain necessary security clearances, which may adversely affect our ability to perform on certain anticipated U.S. government contracts and depress our potential revenues. Many U.S. Government programs require contractors to have security clearances. Depending on the level of required clearance, security clearances can be difficult and time-consuming to obtain.
It is also possible that we or our current licensors, or any future licensors or licensees, will fail to identify patentable aspects of inventions made during development and commercialization activities before it is too late to obtain patent protection on them. 14 Table of Contents If we are sued for infringing intellectual property rights of third parties, it will be costly and time consuming, and an unfavorable outcome in that litigation could harm our business.
It is also possible that we or our current licensors, or any future licensors or licensees, will fail to identify patentable aspects of inventions made during development and commercialization activities before it is too late to obtain patent protection on them.
Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud.
Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud. There exist material weaknesses in our internal controls as of December 31, 2024.
For example, many foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States.
Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation or other proceedings, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation or other proceedings.
We may not be able, alone or with our licensors or potential collaborators, to prevent misappropriation of our proprietary rights, particularly in countries where the laws may not protect such rights as fully as in the United States. 27 Table Of Contents Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation or other proceedings, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation or other proceedings.
Some of our competitors may be able to sustain the costs of patent-related disputes, including patent litigation, more effectively than we can because they have substantially greater resources.
Some of our competitors may be able to sustain the costs of patent-related disputes, including patent litigation, more effectively than we can because they have substantially greater resources. In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations.
Additionally, laws of some countries outside of the United States do not afford intellectual property protection to the same extent as the laws of the United States. Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions.
Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions. The legal systems of some countries, particularly developing countries, do not favor the enforcement of patents and other intellectual property rights.
Our international business exposes us to geo-political and economic factors, regulatory requirements and other risks associated with doing business in foreign countries. Our success may depend on our ability to obtain and protect the proprietary information on which we base our laser-based cleaning equipment.
Our success may depend on our ability to obtain and protect the proprietary information on which we base our laser-based cleaning equipment.
We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and/or warrants and our stock price and price for the warrants may be more volatile.
We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions.
Government for a portion of our business, which we expect to increase, and changes in government defense spending could have adverse consequences on our financial position, results of operations and business. As a U.S. defense contractor, we are vulnerable to security threats and other disruptions that could negatively impact our business.
ICT Investments owns a majority of our outstanding shares and exerts significant control over business decisions as well as matters subject to stockholder approval. We depend on the U.S. Government for a portion of our business, which we expect to increase, and changes in government defense spending could have adverse consequences on our financial position, results of operations and business.
In that event, the trading price of our securities could decline, and you could lose all or part of your investment. Such risks include, but are not limited to: We have a limited operating history so there is a lack of historical data on which to determine whether we can be a commercially viable company.
In that event, the trading price of our securities could decline, and you could lose all or part of your investment. Such risks include, but are not limited to: We are competing in a highly competitive market and to compete effectively we must be able to adapt to technology changes and to implement innovative technology applications.
The legal systems of some countries, particularly developing countries, do not favor the enforcement of patents and other intellectual property rights. This could make it difficult for us to stop the infringement of our patents or the misappropriation of our other intellectual property rights.
This could make it difficult for us to stop the infringement of our patents or the misappropriation of our other intellectual property rights. For example, many foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties.
Our business with the U.S. Army, Navy and Air Force has been defense related, and our anticipated future revenues from the U.S. Government are expected to result from contracts awarded under various U.S. Government programs, primarily defense-related programs with the Department of Defense (DoD) and other departments and agencies.
However, we anticipate increasing that figure to 25% over the next 12 to 24 months as we expand our engagement with federal agencies. Our work with the U.S. Army, Navy, and Air Force has been primarily defense-related, and we expect future revenues to stem from contracts awarded under a variety of U.S.
Removed
We are competing in a highly competitive market and to compete effectively we must be able to adapt to technology changes and to implement innovative technology applications. ICT Investments owns a majority of our outstanding shares and exerts significant control over business decisions as well as matters subject to stockholder approval. We depend on the U.S.
Added
As a U.S. defense contractor, we are vulnerable to security threats and other disruptions that could negatively impact our business. Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has history of net losses and accumulated deficits.
Removed
With respect to the manufacturing and sale of laser-based cleaning equipment, we are still akin to a start-up company with limited historical sales of our laser-based cleaning products. There is little historical basis with which to make judgments regarding the capabilities of our enterprise to produce a widely commercially accepted product leading to ongoing and growing profitability.
Added
These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding these matters are also described in Note 1.
Removed
Cost cutting including through consolidation and elimination of duplicative organizations and insurance has become a major initiative for DoD. The funding of our programs is subject to the overall U.S. Government budget and appropriation decisions and processes which are driven by numerous factors, including geo-political events and macroeconomic conditions.
Added
The financial statements do not include any adjustments that might result from the outcome of this uncertainty. 14 Table Of Contents Our international business exposes us to geo-political and economic factors, regulatory requirements and other risks associated with doing business in foreign countries.

… 22 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

3 edited+1 added−1 removed10 unchanged
Biggest changeOur IT Manager reports quarterly to the Audit Committee of the Board of Directors on the information security program and related cyber risks and provides an annual update to the Board of Directors on the Company’s overall risk management strategy, which includes addressing cybersecurity risks.
Biggest changeOur IT Manager has primary responsibility for assessing and managing our cybersecurity threat management program, informed by over ten years of experience leading cross-functional organizations in the development and operation of large-scale systems . 35 Table Of Contents Our IT Manager reports quarterly to the Audit Committee of the Board of Directors on the information security program and related cyber risks and provides an annual update to the Board of Directors on the Company’s overall risk management strategy, which includes addressing cybersecurity risks.
Risk Factors, the section titled “Risk Factors—Risks Related to our Business and Our Industry— Internal system or service failures could disrupt our business and impair our ability to effectively provide our services and products to our customers, which could damage our reputation and adversely affect our revenues and profitability .” and “ As a U.S. defense contractor, we are vulnerable to security threats and other disruptions that could negatively impact our business. ” 29 Table of Contents Risk Management Oversight and Governance The Board of Directors has oversight of the Company’s cybersecurity program and has delegated the quarterly assessments and management of cybersecurity risks to the Audit Committee.
Risk Factors, the section titled “Risk Factors—Risks Related to our Business and Our Industry— Internal system or service failures could disrupt our business and impair our ability to effectively provide our services and products to our customers, which could damage our reputation and adversely affect our revenues and profitability .” and “ As a U.S. defense contractor, we are vulnerable to security threats and other disruptions that could negatively impact our business. ” Risk Management Oversight and Governance The Board of Directors has oversight of the Company’s cybersecurity program and has delegated the quarterly assessments and management of cybersecurity risks to the Audit Committee.
Cyber Risk Management and Strategy Under the oversight of the Board of Directors and Audit Committee, we have implemented and maintain a risk management program that includes processes for the systematic identification, assessment, management, and treatment of cybersecurity risks.
Cyber Risk Management and Strategy Under the oversight of the Board of Directors and Audit Committee, we have implemented and maintained a risk management program that includes processes for systematic identification, assessment, management, and treatment of cybersecurity risks.
Removed
Our IT Manager and our IT Administrator oversee our information security program and lead our information security team. Our IT Manager has primary responsibility for assessing and managing our cybersecurity threat management program, informed by over ten years of experience leading cross-functional organizations in the development and operation of large-scale systems.
Added
Our IT Manager and our IT Administrator oversee our information security program and lead our information security team .

Item 2. Properties

Properties — owned and leased real estate

0 edited+4 added−1 removed2 unchanged
Removed
The monthly rent for this space is currently $14,805.
Added
The monthly rent for this space is currently $14,805. On July 1, 2024, we determined that we did not need this facility for our future growth and, since we could not sublet this space, we entered into the Lease Termination Agreement to reduce our lease expense.
Added
Under the terms of the Lease Termination Agreement, we agreed to pay a monthly termination fee of $14,912.14 base rent plus operating expenses for five months, saving us approximately $80,000 in lease payments for 2025.
Added
On July 1, 2024, we entered into a lease agreement for 48,481 square feet of office space at a base monthly rent of $ 50,354.42 with an annual increase of 3%, that has a term of 10.5 years. Upon acquisition of Control Micro Systems in on October 31, 2024 at 4420 Metric Dr. Winter Park Florida.
Added
The lease expires on October 31, 2025. The facility is 52,200 square ft total at a cost of $27,700 per month.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+1 added−2 removed0 unchanged
Biggest changeWe are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, financial condition or cash flows.
Biggest changeITEM 3. LEGAL PROCEEDINGS From time to time, we have been and will continue to be subject to legal proceedings and claims. We are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, results of operations, financial condition, or cash flows.
Removed
ITEM 3. LEGAL PROCEEDINGS From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business.
Added
ITEM 4. MINE SAFETY DISCLOSURES None. 36 Table Of Contents PART II
Removed
Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+6 added−4 removed5 unchanged
Biggest changeSet forth below is information regarding shares of common stock issued, and options granted, from January 1, 2022, to March 15, 2024: On July 24, 2022: 25,000 Incentive Stock Options (‘ISOs’) were issued to Tim Schick, CFA. The options vest over four (4) years and are exercisable at $5.00 per share.
Biggest changeThe remaining planned use of proceeds has not changed since the initial public offering. Recent Sales of Unregistered Securities. Set forth below is information regarding shares of common stock issued, and options granted, from January 1, 2022, to March 10, 2025: On July 24, 2022: 25,000 Incentive Stock Options (‘ISOs’) were issued to Tim Schick, CFA.
The following table provides information about the common stock that may be issued upon the exercise of options, warrants and rights under all of the Company’s existing equity compensation plans as of December 31, 2023.
The following table provides information about the common stock that may be issued upon the exercise of options, warrants and rights under all of the Company’s existing equity compensation plans as of December 31, 2024.
In accordance with the contract we will issue to TraDigital in 2023 350,000 shares of our common stock in full satisfaction of the balance due on our agreement, reflected in Accrued Expenses at December 31, 2022 in the amount of $829,500 ($2.37 per share, the company’s closing stock price on the contract date).
In accordance with the contract we issued to TraDigital in 2023 350,000 shares of our common stock in full satisfaction of the balance due on our agreement, reflected in Accrued Expenses at December 31, 2022 in the amount of $829,500 ($2.37 per share, the company’s closing stock price on the contract date).
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES (a) Market Information. Our common stock is traded on the NASDAQ with the ticker symbol “LASE”. (b) Stockholders. As of April 10, 2024, there were five registered holders of our common stock. (c) Dividends.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES (a) Market Information. Our common stock is traded on the NASDAQ with the ticker symbol “LASE”. (b) Stockholders. As of March 14, 2025, there were nine registered holders of our common stock. (c) Dividends.
Use of Proceeds On October 4, 2022, the Company closed on an IPO in which it issued 3,000,000 additional shares of common stock at an offer price of $5.00 per share.
Use of Proceeds On October 4, 2022, the Company closed on an IPO in which it issued 3,000,000 additional shares of common stock at an offer price of $5.00 per share. The shares trade on the NASDAQ under the ticker symbol, “LASE.” Including this issuance, there were 7,878,419 shares outstanding as of December 31, 2022.
The warrants are exercisable at $6.00 per share, between March 28, 2023, and September 29, 2027: On February 2 nd 2024 17,000 Shares of Common stock were issued to Jade Barnwell, the former Laser Photonics CFO, under the terms of employment. 31 Table of Contents On October 4, 2022, we entered into a marketing agreement with TraDigital Marketing Group.
The warrants are exercisable at $6.00 per share, between March 28, 2023, and September 29, 2027: Christopher Carlin - 72,250 Jonathan Gazdak - 55,250 Rocco Guidicipietro 21,250 Joseph Amato - 21,250 Matt Rista - 10,000 37 Table Of Contents On October 4, 2022, we entered into a marketing agreement with TraDigital Marketing Group.
These were recorded at a fair value based on the market price of the Company’s stock on the date of the agreement. On December 12, 2022: 180,000 warrants were issued to the following members of Alexander Capital, the Underwriter of the IPO.
The options vest over four (4) years and are exercisable at $5.00 per share. These options were cancelled when Tim Schick was terminated as our CFO on March 27, 2023. On December 12, 2022: 180,000 warrants were issued to the following members of Alexander Capital, the Underwriter of the IPO.
Removed
The shares trade on the NASDAQ under the ticker symbol, “LASE.” Including this issuance, there were 7,878,419 shares outstanding as of December 31, 2022.The number of outstanding shares as of December 31, 2023 was 9,253,419 The remaining planned use of proceeds has not changed since the initial public offering. Recent Sales of Unregistered Securities.
Added
On October 18, 2023, we entered into a license agreement with an affiliated company, Fonon Technologies, Inc., which is majority-owned by ICT Investments, for an exclusive, worldwide, nontransferable license for high power turbo piercing (“Cold Cutting”) laser cutting technology and any improvements to such technology to allow us to manufacture, sell, export and import products incorporating such technology in return for our paying a license fee of $350,000 in cash and a one-time grant of 1,000,000 restricted shares of our common stock to ICT Investments.
Removed
These options were cancelled when Tim Schick was terminated as our CFO on March 27, 2023. As part of the his 2023 termination 25,000 shares of common stock were issued as compensation for services to Company former Vice President of Finance Tim Schick in April 2023.
Added
On May 21, 2024 we entered into a license agreement with Fonon Corporation to receive an exclusive, worldwide, sublicensable license to Fonon’s laser material processing equipment and technology, including all applications of laser cutting, marking, engraving, laser welding, brazing, ablation, laser drilling, semiconductor chip marking, semiconductor and flat panel display laser processing equipment, all other laser material processing equipment documented or existing in a form of knowhow and/or trade secrets in return for 3,000,000 restricted shares of our common stock.
Removed
During the year ended December 31, 2023, the Company paid $ 350,000 totaling shares of 1,000,000 to Fonon Technologies, Inc.
Added
On September 6, 2024, 1,500,000 Shares of Common stock were issued under PIPE Offering with Aegis Capital Cop. As Agent. The overall deal raised $3,000,000 gross for the company On September 10, 2024, 61,968 Shares of Common Stock were issued under a Cashless Exercised Warrants for Alexander Capital Specialists, related to the IPO in October 2022.
Removed
(“FTI”), a company controlled by ICT Investments, for a worldwide, exclusive license for all commercial and noncommercial applications of FTI’s know-how and trade secrets for High Power Turbo Piercing (“Cold Cutting”) laser cutting equipment and technology under the terms of a License Agreement dated October 18, 2023.
Added
On October 21, 2024, Warrants were exercised, and 255,000 Shares of Common stock were issued under PIPE Offering with Aegis Capital Cop. As Agent. This resulted in funds to the company of $1,018,164. On October 23, 2024, Warrants were exercised, and 175,000 Shares of Common stock were issued under PIPE Offering with Aegis Capital Cop.
Added
As Agent This resulted in funds to the company of $698,740 On November 26, 2024, Warrants were exercised, and 20,000 Shares of Common stock were issued under PIPE Offering with Aegis Capital Cop. As Agent . This resulted in funds to the company of $79,856.
Added
On January 22, 2025 as a condition of the acquisition of Control Micro Systems Laser Wind Down, Inc was issued 18,692 shares of our common stock for a value of $100,000. On March 6, 2025 Sanjay Adhav issued 65,000 shares of common stock through affiliate company Fonon Technologies as part of Fonon Corp acquisition of Quantum Technologies.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

6 edited+1 added−1 removed11 unchanged
Biggest changeStatement of Operations Data: Year Ended December 31, 2023 2022 Statement of operations data: Net Sales $ 3,939,473 $ 3,894,901 Cost of Sales $ 1,489,458 $ 1,954,328 Gross Profit $ 2,450,015 $ 1,940,573 Operating Expenses $ 6,246,011 $ 4,017,379 Income (Loss) from Operations $ (3,795,996 ) $ (2,076,807 ) Interest Expense $ - $ 24,426 Other (Income) Expense 30,063 7,169 Income Tax Provision $ - $ - Net Income (Loss) $ (3,765,933 ) $ (2,094,064 ) Income (Loss) per Common Share $ (0.45 ) $ (0.37 ) Balance sheet data: December 31, Balance sheet data: 2023 2022 Cash $ 6,201,137 $ 12,181,799 Total Assets 15,164,447 18,583,377 Current Liabilities $ 1,519,964 $ 964,326 Total Liabilities $ 1,682,955 $ 1,451,888 Cash flow data: 2023 2022 Cash flows data: Net cash provided by (used in) operating activities $ -5,470,618 $ -63,376 Net cash provided by (used in) investing activities $ -484,805 $ -689,250 Net cash provided by (used in) financing activities $ -25,240 $ 12,318,676 Net change in cash and cash equivalents $ -5,980,663 $ 11,566,050 32 Table of Contents Other financial data (unaudited) Year Ended December 31, 2023 2022 Other financial data (unaudited): EBITDA(1) $ (3,242,553 ) $ (1,631,806 ) Adjusted EBITDA(2) $ (3,242,553 ) $ 240,313 In addition to providing financial measurements based on generally accepted accounting principles in the United States (GAAP), we provide the following additional financial metrics that are not prepared in accordance with GAAP (non-GAAP): EBITDA and adjusted EBITDA.
Biggest changeStatement of Operations Data: Year Ended December 31, 2024 2023 Statement of operations data: Net Sales $ 3,415,196 $ 3,939,473 Cost of Sales 1,934,150 1,041,697 Gross Profit 1,481,046 2,897,776 Operating Expenses 7,944,389 6,246,011 Income (Loss) from Operations (6,463,343 ) (3,348,235 ) Interest Expense - Other (Income) Expense 3,944,516 30,063 Income Tax Provision - Net Income (Loss) (2,518,827 ) (3,318,172 ) Income (Loss) per Common Share $ (0.22 ) $ (0.37 ) Balance sheet data: December 31, 2024 2023 Balance sheet data: Cash $ 533,871 $ 6,201,137 Total Assets 17,152,147 15,124,087 Current Liabilities 2,573,435 1,031,844 Total Liabilities $ 6,939,854 $ 1,194,835 38 Table Of Contents Cash flow data: Year ended December 31 2024 2023 Net cash provided by Operating Activities $ (9,138,555 ) $ (5,470,567 ) Net cash provided by Investing Activities (977,821 ) (484,855 ) Net cash provided by Financing Activities 4,449,110 (25,240 ) Net cash increase for period (5,667,266 ) (5,980,662 ) Cash at the beginning of period 6,201,137 12,181,799 Cash at end of period $ 533,871 $ 6,201,137 Other financial data (audited) Year Ended December 31, 2024 (Audited) 2023 Restated Other financial data (audited): EBITDA(1) $ 230,976 $ (2,794,791 ) Adjusted EBITDA(2) $ 230,976 $ (2,794,791 ) In addition to providing financial measurements based on generally accepted accounting principles in the United States (GAAP), we provide the following additional financial metrics that are not prepared in accordance with GAAP (non-GAAP): EBITDA and adjusted EBITDA.
ITEM 6. SELECTED FINANCIAL DATA The following selected consolidated financial data should be read in conjunction with, and is qualified by reference to, our conslidated financial statements and related notes and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Annual Report on Form 10-K.
ITEM 6. SELECTED FINANCIAL DATA The following selected consolidated financial data should be read in conjunction with, and is qualified by reference to, our consolidated financial statements and related notes and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Annual Report on Form 10-K.
Accordingly, we believe that these non-GAAP financial measures reflect our ongoing business in a manner that allows for meaningful comparisons and analysis of trends in the business and provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects.
Accordingly, we believe that these non-GAAP financial measures reflect our ongoing business in a manner that allows for meaningful comparisons and analysis of trends in the business and provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and prospects.
Since decisions regarding capital investment and financing and changes in working capital components can have a significant impact on cash flow, EBITDA is not necessarily a good indicator of a business’s cash flows. We use EBITDA for evaluating the relative underlying performance of our core operations and for planning purposes.
Since decisions regarding capital investment and financing and changes in working capital components can have a significant impact on cash flow, EBITDA is not necessarily a good indicator of a business’s cash flow. We use EBITDA for evaluating the relative underlying performance of our core operations and for planning purposes.
The data for the years ended December 31, 2023 and 2022, is derived from our audited financial statements and related notes included elsewhere in this Annual Report on Form 10-K. Our historical results are not necessarily indicative of the results for any future period.
The data for the years ended December 31, 2024, and 2023, is derived from our audited financial statements and related notes included elsewhere in this Annual Report on Form 10-K. Our historical results are not necessarily indicative of the results for any future period.
(3) We believe EBITDA and Adjusted EBITDA are helpful for investors to better understand our underlying business operations.
(3) We believe EBITDA and Adjusted EBITDA are helpful for investors to better understand our underlying business operations. The following table adjusts Net Income (Loss) to EBITDA and Adjusted EBITDA years ended December 31, 2024, and 2023.
Removed
The following table adjusts Net Income (Loss) to EBITDA and Adjusted EBITDA years ended December 31, 2023 and 2022. 33 Table of Contents Year Ended December 31, 2023 2022 Reconciliation of EBITDA: Net Income (Loss) $ (3,765,933 ) $ (2,094,064 ) Add (deduct): $ $ Interest expense $ $ 24,426 Taxes $ $ Other $ $ Depreciation & Amortization $ 523,380 $ 437,832 EBITDA(1) $ (3,242,553 ) $ (1,631,806 ) Other adjustments $ $ 1,872,119 Adjusted EBITDA(2) $ (3,242,553 ) $ 240,313 Reconciliation of Adjusted EITDA 34 Table of Contents
Added
Reconciliation of Adjusted EBITDA Year Ended December 31, 2024 2023 Statement of operations data: Net Sales $ 3,415,196 $ 3,939,474 Cost of Sales 1,934,150 1,041,697 Gross Profit 1,481,046 2,897,777 Operating Expenses 7,944,389 6,246,011 Income (Loss) from Operations (6,463,343 ) (3,348,234 ) Interest Expense - Other (Income) Expense 3,944,516 30,063 Income Tax Provision - Net Income (Loss) (2,518,827 ) (3,318,171 ) Income (Loss) per Common Share $ (0.22 ) $ (0.37 ) 39 Table Of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

57 edited+44 added−51 removed28 unchanged
Biggest changeThe weighted average discount rate used for these leases was 6%. imputed interest on the leasing transactions was less immaterial and the remaining cash payments approximate the recorded liabilities due to the short term nature of the remaining lease term and nature of base rent increases 44 Table of Contents The maturity amounts of our lease liabilities are as follows: Year ending December 31, Operating Leases 2024 $ 434,153 2025 $ 162,990 Total $ 597,143 Off-Balance Sheet Arrangements As of December 31, 2032, we have not entered any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.
Biggest changeThe facility is 52,200 total square ft at a cost of $27,700 per month. 48 Table Of Contents Off-Balance Sheet Arrangements As of December 31, 2024, we have not entered any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.
Payments are made by Distributor to The Company when Distributor collects funds from their regional customers, or then they have funds availability to reduce the outstanding balance. Company allocates payments in accordance with LPC Accounting practices. Detailed aging is accounted in MRP system – DBA Manufacturing keeping records of all equipment units ever manufactured with coordinating serial numbers.
Payments are made by Distributor to The Company when Distributor collects funds from their regional customers, or then they have funds availability to reduce the outstanding balance. The company allocates payments in accordance with LPC Accounting practices. Detailed aging is accounted in MRP system – DBA Manufacturing keeping records of all equipment units ever manufactured with coordinating serial numbers.
Our management must spend additional time on policies and procedures to ensure compliance with various regulatory requirements, especially that of Section 404 of the Sarbanes-Oxley Act of 2002. The additional corporate governance time required of management could limit the amount of attention management can afford to our business plan, and therefore may delay our anticipated growth plans.
Our management must spend additional time on policies and procedures to ensure compliance with various regulatory requirements, especially that of Section 404 of the Sarbanes-Oxley Act of 2002. The additional corporate governance required of management could limit the amount of attention management can afford to our business plan, and therefore may delay our anticipated growth plans.
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. In general, management’s estimates are based on historical experience, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.
We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. In general, management’s estimates are based on historical experience, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.
To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation.
To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation.
At contract inception, once the contract is determined to be within the scope of Topic 606, we assess the goods or services promised within each contract and determine those that are performance obligations and assess whether each promised good or service is distinct.
At contract inception, once the contract is determined to be within the scope of Topic 606, we assess the goods or services promised within each contract and determine those that are performance obligations and assess whether each promised good or service is distinct.
Warranty — We maintain an accrual for warranty claims for units sold that are subject to warranty. Income Taxes and Deferred Taxes — Our annual tax rate is based on our income, statutory tax rates and tax planning opportunities available to us in the various jurisdictions in which we operate. Goodwill and Long-lived assets impairments.
Warranty — We maintain an accrual for warranty claims for units sold that are subject to warranty. Income Taxes and Deferred Taxes — Our annual tax rate is based on our income, statutory tax rates and tax planning opportunities available to us in the various jurisdictions in which we operate. Goodwill and Long-lived assets impairment.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS General The following discussion and analysis of the results of operations and financial condition of the Company for the years ended December 31, 2023 and 2022 should be read in conjunction with our audited consolidated financial statements and related notes and the description of our business and properties included elsewhere herein.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS General The following discussion and analysis of the results of operations and financial condition of the Company for the years ended December 31, 2024, and 2023 should be read in conjunction with our audited consolidated financial statements and related notes and the description of our business and properties included elsewhere herein.
Orders typically consist of multiple units. Payment terms ate 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.
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.
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 expense consists 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.
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.
Diluted earnings/(loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that shared in the earnings/(loss) of the Company.
Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that shared in our earnings (loss).
Gross margin is affected by numerous factors, including our module average selling prices, foreign exchange rates, the existence and effectiveness of subsidies and other economic incentives, competitive pressures, market demand, market mix, our manufacturing costs, product development costs, the effective utilization of our production facilities, and the ramp of production on new products. 37 Table of Contents Research and development expenses.
Gross margin is affected by numerous factors, including our module average selling prices, foreign exchange rates, the existence and effectiveness of subsidies and other economic incentives, competitive pressures, market demand, market mix, our manufacturing costs, product development costs, the effective utilization of our production facilities, and the ramp of production on new products. Research and development expenses.
Payments received by customers prior to our satisfying the above criteria are recorded as unearned income in the combined balance sheets. All revenues were reported net of any sales discounts or taxes. Inventory — Inventory is stated at the lower of cost (first-in, first-out method) or market value.
Payments received by customers prior to our satisfying the above criteria are recorded as unearned income in the combined balance sheets. All revenues were reported net of any sales discounts or taxes. 49 Table Of Contents Inventory — Inventory is stated at the lower cost (first-in, first-out method) or market value.
The company also utilizes various programs to offer volume cash discounts, first customer discounts, or reimburse distributors for certain expenses, mainly associated with warranty, transportation costs, and inventory interest costs incurred by the distributor for limited periods of time, generally up to eighteen months. 38 Table of Contents Repurchase policy.
The company also utilizes various programs to offer volume cash discounts, first customer discounts, or reimburse distributors for certain expenses, mainly associated with warranty, transportation costs, and inventory interest costs incurred by the distributor for limited periods of time, generally up to eighteen months. Repurchase policy.
Our research and development expense consists primarily of compensation, development expenses related to the design of our products and certain components, the cost of materials and components to build prototype devices for testing and facilities costs. Costs related to product development are recorded as research and development expenses in the period in which they are incurred.
Our research and development expenses consist primarily of compensation, development expenses related to the design of our products and certain components, the cost of materials and components to build prototype devices for testing and facilities costs. Costs related to product development are recorded as research and development expenses in the period in which they are incurred.
We acquire equipment for general use in further process developments and record the depreciation of this equipment as research and development expense. We plan to continue to invest in research and development to improve our existing products and develop new systems and applications technology.
We acquire equipment for general use in further process developments and record the depreciation of this equipment as research and development expense. 41 Table Of Contents We plan to continue to invest in research and development to improve our existing products and develop new systems and applications technology.
We maintain a number of programs and activities to improve our technology and processes in order to enhance the performance and reduce the costs of our laser cleaning modules. Interest Expense, Net. Interest expense, net of amounts capitalized, is incurred on various debt financings.
We maintain several programs and activities to improve our technology and 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.
While doing so, we expect to return to profitability in 2024. Therefore, we anticipate minimal long-term liquidity needs to support our organic growth, which we expect to achieve using the proceeds of our recent IPO, exclusively. We must fulfill all of the financial disclosure and reporting requirements of a publicly reporting company.
While doing so, we expect to return to profitability in 2025. Therefore, we anticipate minimal long-term liquidity needs to support our organic growth, which we expect to achieve using the proceeds of our recent IPO, exclusively. We must fulfill all of the financial disclosure and reporting requirements of a public reporting company.
The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Revenue is then recognized for the transaction price allocated to each respective performance obligation when (or as) the performance obligation is satisfied.
The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. 43 Table Of Contents Revenue is then recognized for the amount of the transaction price allocated to each respective performance obligation when (or as) the performance obligation is satisfied.
The combined expense monthly expense is $25,109 In December 2022, we entered into an agreement with 2701 Maitland Building Associates to rent 8,000 sf of additional office space nearby the main facility, for our growing sales and marketing program. The monthly rent for this space is currently $14,805.
The monthly rent for this facility is currently $15,549. In December 2022, we entered into an agreement with 2701 Maitland Building Associates to rent 8,000 sf of additional office space nearby the main facility, for our growing sales and marketing program. The monthly rent for this space is currently $14,805.
If future sales differ from these forecasts, the valuation of excess and obsolete inventory may change and additional inventory provisions may be required. Because of our vertical integration, a significant or sudden decrease in sales could result in a significant change in the estimates of excess or obsolete inventory valuation. On December 31, 2022, we recorded $101,698 in Inventory Obsolescence.
If future sales differ from these forecasts, the valuation of excess and obsolete inventory may change, and additional inventory provisions may be required. Because of our vertical integration, a significant or sudden decrease in sales could result in a significant change in the estimates of excess or obsolete inventory valuation. On December 31, 2024, we recorded $776,638 in Inventory Obsolescence.
LPC Operational Management regular conducts evaluation of unsold equipment in Distributors possession and determined what particular units cannot be sold anymore because of the moral aging. However after the manufacturing upgrade it can be added back to the finished goods inventory and sold as a current model.
LPC Operational Management regular conducts evaluation of unsold equipment in Distributors possession and determines what particular units cannot be sold anymore because of the moral aging. However, after the manufacturing upgrade it can be added back to the finished goods inventory and sold as a current model. Repurchase records can be viewed in the Repurchase History Records folder.
Our vertically integrated operations allow us to reduce development and advanced laser equipment manufacturing time, offer better prices, control quality and protect our proprietary knowhow and technology compared to other laser cleaning companies and companies with competing technologies.
Our vertically integrated operations allow us to reduce development and advanced laser equipment manufacturing time, offer better prices, control quality and protect our proprietary knowhow and technology compared to other laser cleaning companies and companies with competing technologies. Description of Our Gross Sales, Costs and Expenses Gross sales.
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. 36 Table of Contents Service Partner Network.
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.
Cost of sales does not include depreciation of manufacturing plant and equipment and facility-related expenses. 42 Table of Contents Overall, we expect our cost of sales 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.
Overall, we expect our cost of sales 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.
Higher level account related data with payment history is recorded in Company’s Quick Books Accounting software. Distributor Discounts. Distributors and representatives earn various rebates and discounts based on purchase volume commitments and the achievement of certain performance KPIs. The company estimates the amount of discounts based on historical volumes, geographical market, end customer buying potential, and the ordered equipment amount.
Higher level account-related data with payment history is recorded in Company’s Quick Books Accounting software. 42 Table Of Contents Distributor Discounts. Distributors and representatives earn various rebates and discounts based on purchase volume commitments and the achievement of certain performance KPIs.
Description of Our Gross Sales, Costs and Expenses Gross sales. We derive net sales primarily from the growth was driven by increasing demand for our products, partially offset by declines in average sales prices, the introduction of new products, including laser blasting systems and the development of new applications for our products.
We derive net sales primarily from the growth was driven by increasing demand for our products, partially offset by declines in average sales prices, the introduction of new products, including laser blasting systems and the development of new applications for our products. We develop our products to standard specifications and use a common set of components within our product architecture.
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.
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.
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.
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.
We perform our annual goodwill impairment review as of the first day of our fourth quarter, or more frequently if events or circumstances indicate it is more likely than not that the fair value of a reporting unit is less than the carrying amount. 45 Table of Contents Recent Accounting Pronouncements The Company evaluates all Accounting Standard Updates (“ASUs”) issued by the Financial Accounting Standards Board (“FASB”) for consideration of their applicability.
We perform our annual goodwill impairment review as of the first day of our fourth quarter, or more frequently if events or circumstances indicate it is more likely than not that the fair value of a reporting unit is less than the carrying amount.
Year Ended December 31 2023 2022 Cash And Cash Equivalents $ 6,201,137 $ 12,181,799 Working Capital (excluding cash and cash equivalents) $ 1,613,406 $ 575,383 Total Working Capital $ 7,814,543 $ 12,757,182 We anticipate spending an additional $3M over the next 2 years, to increase our sales and marketing efforts, as well as to increase our manufacturing capacity.
Year Ended December 31, 2024 2023 Cash And Cash Equivalents $ 533,871 $ 6,201,137 Working Capital (excluding cash and cash equivalents) 1,557,154 2,061,166 Total Working Capital $ 2,091,025 $ 8,262,303 We anticipate spending an additional $3M over the next 2 years, to increase our sales and marketing efforts, as well as to increase our manufacturing capacity.
On December 31, 2023, and December 31, 2022, respectively, the Company’s inventory consisted of the following: Inventory is stated at the lower of cost (first-in, first-out method) or market value. Inventory includes parts and components that may be specialized in nature and subject to rapid obsolescence. Company maintains a reserve for excess or obsolete inventory items.
Inventory. Inventory is stated at the lower level of cost (first-in, first-out method) or market value. Inventory includes parts and components that may be specialized in nature and subject to rapid obsolescence. We maintain a reserve for excess or obsolete inventory items. Inventories are written off and charged to cost of goods sold when identified as excess or obsolete.
The following table summarizes the significant changes in operating expenses for the years ended December 31, 2023 and 2022 Year Ended December 31, 2023 2022 Operating Expenses: Sales & Marketing $ 1,996,363 $ 1,677,976 General & Administrative 1,902,760 894,521 Depreciation & Amortization 523,380 437,832 Payroll Expenses 1,400,951 887,852 Other Expense 220,298 18,397 Research and Development Cost $ 202,259 $ 100,801 Total Operating Expenses $ 6,246,011 $ 4,017,379 We expect recurring selling expenses to increase in the near term to support the planned growth of our business as we expand our sales and marketing efforts.
The following table summarizes the significant changes in operating expenses for the years ended December 31, 2024, and 2023 Year Ended December 31, 2024 2023 Operating Expenses: Sales & Marketing $ 1,561,506 $ 1,996,363 General & Administrative 2,790,543 2,123,058 Depreciation & Amortization 972,135 523,380 Payroll Expenses 1,430,840 1,400,951 Impairment 932,669 Research and Development Cost 261,911 202,259 Total Operating Expenses $ 7,944,389 $ 6,246,011 We expect recurring selling expenses to increase in the near term to support the planned growth of our business as we expand our sales and marketing efforts.
Sales Pipeline Our Sales Pipeline at the year end of December 31, 2023 has reached $25,5M in industrial products and $25,2M in Military and Government sales what can support the revenue for up to $10M a year.
The net revenue decreased accordingly by $524,278 or 13.30% in the year of 2024 in comparison to 2023. 45 Table Of Contents Sales Pipeline Our Sales Pipeline at the end of December 31, 2024, has reached $41.1M in industrial products and $19.9M in Military and Government sales what can support the revenue for up to $10M a year.
We entered into laser equipment sales agreements with customers for specific equipment based on purchase orders and our standard terms and conditions of sale. All revenues are reported net of any sales discounts or taxes. Under our customer contracts or/and purchase orders, we transfer title and risk of loss to the customer and recognize revenue upon shipment.
Our sales typically are made on a purchase order basis rather than through long-term purchase commitments. We entered into laser equipment sales agreements with customers for specific equipment based on purchase orders and our standard terms and conditions of sale. All revenues are reported net of any sales discounts or taxes.
Gross Profit For the year ended December 31, 2023, we reported gross profit in the amount of $2,480,015, or 62.19% of net sales, as compared to $1,947,741 or 50% net sales, in the year ended December 31, 2022.
Gross Profit For the year ending December 31, 2024, we reported gross profit in the amount of $1,481,046 or 43.37% of net sales, as compared to $2,897,777 or 73.56% net sales, in the year ended December 31, 2023.
However, sales discounts applied in 2023 in the amount of $581.000 in comparison to $123.850 in 2022 reflects the fact of stronger completion on the market and a need for a price adjustment. The net revenue was increase accordingly by $202,400 or 5.4% in the year of 2023 in comparison to 2022.
However, sales discounts applied in 2024 in the amount of $554,602 in comparison to $581,419 in 2023 reflects the fact of stronger completion on the market and a need for a price adjustment.
ASUs not included in our disclosures were assessed and determined to be either not applicable or are not expected to have a material impact on our consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.
Recent Accounting Pronouncements The Company evaluates all Accounting Standard Updates (“ASUs”) issued by the Financial Accounting Standards Board (“FASB”) for consideration of their applicability. ASUs not included in our disclosures were assessed and determined to be either not applicable or are not expected to have a material impact on our consolidated financial statements.
We entered into laser equipment sales agreements with customers for specific equipment based on purchase orders and our standard terms and conditions of sale. Our largest sales were to USSO COM in the amount of $316,000 for the year ended December 31, 2023.
Our sales typically are made on a purchase order basis rather than through long-term purchase commitments. We entered into laser equipment sales agreements with customers for specific equipment based on purchase orders and our standard terms and conditions of sale. Our largest sales were to is E.S FOX LTD for $273,518. for the year ended December 31, 2024.
We develop our products to standard specifications and use a common set of components within our product architectures. Our major products are based upon a common technology platform. We continually enhance these and other products by improving their components and developing new product designs.
Our major products are based upon a common technology platform. We continually enhance these and other products by improving their components and developing new product designs. Sales of our products are generally recognized upon shipment, provided that no obligations remain, and collection of the receivable is reasonably assured.
Major customers. While we would expect to depend on current customers for a large percentage of our annual net sales, the composition of this group can change from year to year. Net sales derived from our current customers as a percentage of our annual net sales were 21.54% in 2023.
In instances where impairment is determined to exist, the Company will write down the asset to its fair value based on the present value of estimated future cash flows. Major customers. While we would expect to depend on current customers for a large percentage of our annual net sales, the composition of this group can change from year to year.
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.
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.
Year Ended December 31, 2023 2022 Net Income/(Loss) $ (3,765,932.00 ) $ (2,094,064.37 ) Net Income/(Loss) per Share $ (0.45 ) $ (0.37 ) Weighted Average Shares Outstanding, Basic 8,394,035 5,687,049 43 Table of Contents Liquidity and Capital Resources The following is a summary of the Company’s cash flows provided by (used in) operating, investing, and financing activities for the years ended December 31, 2023 and 2022: Year ended December 31 2023 2022 Net cash provided by Operating Activities $ (5,470,618 ) $ (63,376 ) Net cash provided by Investing Activities (484,805 ) (689,250 ) Net cash provided by Financing Activities $ (25,240 ) $ 12,318,676 Net cash increase for period $ (5,980,663 ) $ 11,566,050 Cash at the beginning of period $ 12,181,799 $ 615,749 Cash at end of period $ 6,201,136 $ 12,181,799 As of December 31, 2023, the Company had $ 9,334,504 in current assets, comprised of $ 6,201,137 in cash, $ 816,364 in accounts receivable, and $ 2,277,816 in inventory, as compared to $ 13,721,708 in current assets, comprised of $ 12,181,799 in cash, $ 421,362 in accounts receivable, and $ 1,046,020 in inventory, at December 31, 2022.
Year Ended December 31, 2024 2023 Net Income/(Loss) $ (2,518,827 ) $ (3,318,171 ) Net Income/(Loss) per Share $ (0.22 ) $ (0.37 ) Weighted Average Shares Outstanding, Basic 11,631,999 8,934,035 Liquidity and Capital Resources The following is a summary of the Company’s cash flows provided by (used in) operating, investing, and financing activities for the years ended December 31, 2024, and 2023: Year ended December 31 2024 2023 Net cash provided by Operating Activities $ (9,138,555 ) $ (5,470,567 ) Net cash provided by Investing Activities (977,821 ) (484,855 ) Net cash provided by Financing Activities 4,449,110 (25,240 ) Net cash increase for period (5,667,266 ) (5,980,662 ) Cash at the beginning of period 6,201,137 12,181,799 Cash at end of period $ 533,871 $ 6,201,137 47 Table Of Contents As of December 31, 2024, the Company had $ 4,664,460 in current assets, comprised of $ 533,871 in cash, $ 937,605 in accounts receivable, $ 2,338,759 in inventory, $759,658 in Contract Assets and $58,567 in Other Assets, as of December 31, 2023, the Company had $ 9,294,147 in current assets, comprised of $ 6,201,137 in cash, $ 816,364 in accounts receivable, $ 2,237,456 in inventory, and $39,190 in other assets.
As of December 31, 2023, current liabilities totaled $ 1,519,964 as compared to $ 964,326 as of December 31, 2022. As a result, as of December 31, 2023, the Company had $ 7,814,543 in total working capital as compared to $ 12,757,182 at December 31, 2022.
As of December 31, 2024, current liabilities totaled $2,573,435 as compared to $ $ 1,031,844 as of December 31, 2023. As a result, as of December 31, 2024, the Company had $2,091,025 in total working capital as compared to $ 8,262,303 as of December 31, 2023.
We do not hold any obligation to deliver beyond the collection warehouse, and it is the customers' contractual responsibility to ensure their goods reach their destination. Refunds and returns, which are minimal, are recorded as a reduction of revenue. Payments received from customers before satisfying the above criteria are recorded as unearned income on the combined balance sheets.
The recognition of revenues and profits is generally related to costs incurred in providing the services required under the project.Refunds and returns, which are minimal, are recorded as a reduction of revenue. Payments received from customers before satisfying the above criteria are recorded as unearned income on the combined balance sheets.
Inventories are written off and charged to the cost of goods sold when identified as excess or obsolete. If future sales differ from these forecasts, the valuation of excess and obsolete inventory may change, and additional inventory provisions may be required.
If future sales differ from these forecasts, the valuation of excess and obsolete inventory may change, and additional inventory provisions may be required. Because of our vertical integration, a significant or sudden decrease in sales could result in a significant change in the estimates of excess or obsolete inventory valuation.
Impairment is measured by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from use of the assets and their ultimate disposition. In instances where impairment is determined to exist, the Company will write down the asset to its fair value based on the present value of estimated future cash flows.
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 and their ultimate disposition.
Results of Operations 41 Table of Contents Summary of Statements of Operations for the Years Ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Statement of operations data: Net Sales $ 3,939,473 $ 3,894,901 Cost of Sales $ 1,489,458 $ 1,954,328 Gross Profit $ 2,450,015 $ 1,940,573 Operating Expenses $ 6,246,011 $ 4,017,379 Income (Loss) from Operations $ (3,795,996 ) $ (2,076,807 ) Interest Expense $ - $ 24,426 Other (Income) Expense 30,063 7,169 Income Tax Provision $ - $ - Net Income (Loss) $ (3,765,933 ) $ (2,094,064 ) Income (Loss) per Common Share $ (0.45 ) $ (0.37 ) Revenue Jan - Dec 23 Jan - Dec 22 % Change Sales Product Sales $ 4,520,892 $ 3,860,922 17.09 % Sales Discounts $ (581,419 ) $ (123,850 ) 369.46 % Net Sales $ 3,939,473 $ 3,737,073 5.42 % Gross Product Sales was $4,520,892 for the year ended December 31, 2023 as compared to $3,860,922 for the comparable year ended December 31, 2022, representing a 17.09% increase.
Results of Operations Summary of Statements of Operations for the Years Ended December 31, 2024, and 2023: Year Ended December 31, 2024 2023 Statement of operations data: Net Sales $ 3,415,196 $ 3,939,473 Cost of Sales 1,934,150 1,041,697 Gross Profit 1,481,046 2,897,776 Operating Expenses 7,944,389 6,246,011 Income (Loss) from Operations (6,463,343 ) (3,348,235 ) Interest Expense - Other (Income) Expense 3,944,516 30,063 Income Tax Provision - Net Income (Loss) (2,518,827 ) (3,318,172 ) Income (Loss) per Common Share $ (0.22 ) $ (0.37 ) Revenue Year Ended December 31, Jan - Dec 2024 Jan - Dec 2023 Sales Product Sales $ 3,969,798 $ 4,520,892 Sales Discounts (554,602 ) (581,419 ) Net Sales $ 3,415,196 $ 3,939,473 Gross Product Sales were $3,969,798 for the year ended December 31, 2024 as compared to $4,520,892 for the comparable year ended December 31, 2023, representing a 12.19% decrease.
For our products, revenue is generally recognized upon shipment or pickup by the customer. At this stage, the title on the manufactured equipment is transferred to the customer, and the customer is responsible for transportation expenses, insurance, and any transport-related damage to the equipment in transit.
At this stage, the title on the manufactured equipment is transferred to the customer, and the customer is responsible for transportation expenses, insurance, and any transport-related damage to the equipment in transit. We do not hold any obligations to deliver beyond the collection warehouse, and it is the customers’ contractual responsibility to ensure their goods reach their destination.
In October 2021, a lease on 18,000 SF facility was signed with the landlord for three years, terminating on October 31, 2024. The monthly rent for this facility is currently $15,109. The Company entered into a lease for additional 8000 SF of office space adjacent to the original facility for an additional $10,000/ month in October 2023.
In January 2020, we expanded the lease with ICT Investments to include the entire facility of 18,000 sf. In October of 2021, a direct lease was signed with the landlord for three years, terminating on October 31, 2024.
We maintain a number of programs and activities to improve our technology and processes to enhance the 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.
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.
It was determined there was no further reserve required for the year ended December 31 2022. Warranty. We maintain an accrual for warranty claims for units sold that are subject to warranty. 40 Income Taxes and Deferred Taxes.
As ofn December 31, 2024, we have recorded $776,638 for obsolescence. Warranty. We maintain an accrual for warranty claims for units sold that are subject to warranty. 44 Table Of Contents Income Taxes and Deferred Taxes.
In the future, we expect selling, general, and administrative expense to decline as a percentage of net sales, as our net sales grow beyond the fixed costs of the business. Net Loss (Income) Earnings/(Loss) per Share Basic earnings/(loss) per share is calculated by dividing the earnings/(loss) attributable to stockholders by the weighted-average number of shares outstanding for the period.
In the future, we expect selling, general, and administrative expenses to decline as a percentage of net sales, as our net sales grow beyond the fixed costs of the business. 46 Table Of Contents Net Loss (Income) Net loss for the year ending December 31, 2024, was $ 2,518,827 compared to $ 3,318,171 for the year ended December 31, 2023.
The Company’s intangible assets are deemed to have indefinite lives and, accordingly, are not amortized, but are evaluated for impairment at least annually, but more often whenever changes in facts and circumstances occur which may indicate that the carrying value may not be recoverable.
We review our intangible assets and property, plant and equipment for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Goodwill is required to be tested for impairment at least annually.
Over the next 12 months, we anticipate the marginal cost of being a public company to exceed $750,000. Operating Lease Right-Of-Use Assets and Lease Liability Right-of-use assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term.
Over the next 12 months, we anticipate the marginal cost of being a public company to exceed $750,000. Lease Liability On December 1, 2019, we entered a sub-lease with ICT Investments for 5,000 sf of manufacturing space on a month-to -month basis at $4,050 per month.
New customers accounted for 78.46% of our net sales in 2023. We seek to add new customers and to expand our relationships with existing customers. Relationship with distributors. All orders received on revolving bases in accordance with LPC standard Terms and Conditions of Sale. Orders are not cancelable.
Net sales derived from our current customers as a percentage of our annual net sales was 17.42% in 2024. New customers accounted for 82.58% of our net sales in 2024. We seek to add new customers and to expand our relationships with existing customers. Relationship with distributors.
Removed
Overview Laser Photonics is a vertically integrated manufacturing company for photonics based industrial products and solutions, primarily disruptive laser technologies, mainly premier Laser Blasting equipment.
Added
Overview We are a vertically integrated manufacturing company for photonics-based industrial products and solutions and, since recently acquiring the assets of Control Micro Systems, Inc., have now expanded the market for our laser products into a large, growing pharmaceutical manufacturing vertical, in what we believe is a recession-resistant sector with significant barriers to entry.
Removed
We intend to continue to stay ahead of the technology curve by researching and developing cutting edge products and technologies for both large and small businesses.
Added
We are pioneering a new generation of laser blasting technologies focused on disrupting the sandblasting and abrasives blasting markets. We offer a full portfolio of integrated laser blasting solutions for corrosion control, rust removal, de-coating, pre-welding and post-welding, laser cleaning and surface conditioning.
Removed
We view the small companies as an attractive market opportunity since they were previously unable to take advantage of laser processing equipment due to high prices, significant operating costs and the technical complexities of the laser equipment.
Added
Our solutions span use cases throughout product lifecycles, from product fabrication to maintenance and repair, as well as aftermarket operations. Our laser blasting solutions are applicable in most industries dealing with materials processing, including automotive, aerospace, healthcare, consumer products, shipbuilding, heavy industry, machine manufacturing, nuclear maintenance and de-commissioning and surface coating.
Removed
As a result, we are developing a group of standardized laser cleaning equipment that we have named the CleanTech™ laser blaster family of equipment that we believe represents a new generation of high- power laser cleaning and rust removal systems that will be affordable to more than a million small and mid-size companies. 35 Table of Contents Our vertically integrated operations allow us to reduce manufacturing costs, control quality, rapidly develop and integrate advanced products and protect our proprietary technology.
Added
Under our customer contracts or/and purchase orders, we transfer title and risk of loss to the customer and recognize revenue upon shipment. Our customers do not have extended payment terms or rights of return under these contracts.
Removed
Sales of our products are generally recognized upon shipment, provided that no obligations remain and collection of the receivable is reasonably assured. Our sales typically are made on a purchase order basis rather than through long-term purchase commitments.
Added
Our sales channels Sales Channels Overview We generate revenue through a multi-channel sales strategy that includes a Direct Sales team—comprised of Strategic Account Managers and a regionally distributed Outside Sales force—along with a growing network of distributors and resellers.
Removed
Our customers do not have extended payment terms or rights of return under these contracts. Our sales channels We generate Sales through Direct Sales Personnel, Distributors and Representatives, and Service Partner Network. Direct Sales. Distributors and Reps. All orders are received on a revolving bases in accordance with the Company’s standard Terms and Conditions of Sale. Orders are not cancelable.
Added
This integrated approach enables us to maximize market reach, tailor engagement by customer segment, and accelerate the sales cycle across both commercial and government markets. Direct Sales Our Direct Sales team consists of Strategic Account Managers based at our corporate headquarters and a rapidly expanding Outside Sales team positioned in key heavy manufacturing regions across the United States.
Removed
The Company started its Service Partners Network (SPN), as a program to mobilize demonstration units to better connect the customers with the technology and product and to help those interested in starting a mobile laser cleaning service or rental service.
Added
This dual structure allows us to deepen relationships with major strategic accounts, driving broader adoption of our laser systems within large enterprises, while our Outside Sales representatives focus on engaging small and mid-sized businesses.
Removed
The Company believes that the SPN will generate equipment sales and also demonstrate the capabilities of the product and the technology. As part of the SPN, the Company’s Marketing group provides leads to the SPN members at a fee that also helps generate long-term revenue opportunities for both the Company and the other SPN members. Cost of Sales.
Added
These field reps play a critical role in educating customers on the advantages of laser solutions over outdated, hazardous legacy methods—such as sandblasting or chemical cleaning—highlighting the efficiency, safety, and cost-effectiveness of our technology.
Removed
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.
Added
Distributors and Resellers Our distribution and reseller network extends our reach to a wider audience by placing our product line within trusted sales channels that many customers already use and have contracts with.
Removed
Company can elect to purchase back the above unit at 75% of its value, upgrade hardware and software, and add equipment to the Finished Goods Inventory available for sale. Repurchase records can be viewed in Repurchase History Records folder.
Added
This not only increases exposure and accessibility but also streamlines the purchasing process, particularly for customers in the government and enterprise sectors where existing vendor relationships and procurement frameworks are critical.
Removed
This revenue is recognized on a consignment basis and transfer of control is when item is sold to end customer at which time the company recognizes revenue. 39 Table of Contents Inventory. Inventories are stated at a lower cost or net realizable value using the first-in first-out (FIFO) method.
Added
By leveraging both direct and indirect 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 Table Of Contents All orders are received on a revolving bases in accordance with the Company’s standard Terms and Conditions of Sale. Orders are not cancelable.
Removed
The Company has four principal categories of inventory: Sales demonstration inventory -Sales demonstration inventory represents completed product used to support the Company’s sales force for demonstrations and held for sale.

… 72 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

1 edited+0 added−0 removed2 unchanged
Biggest changeOverall, we believe that our exposure to interest rate risk and foreign currency exchange rate changes is not material to our financial condition or results of operations. 46 Table of Contents
Biggest changeOverall, we believe that our exposure to interest rate risk and foreign currency exchange rate changes is not material to our financial condition or results of operations. 50 Table Of Contents

Other LASE 10-K year-over-year comparisons