LASE 10-K & 10-Q changes, risk factors and insider trading
Laser Photonics Corp · Nasdaq · Miscellaneous Electrical Machinery, Equipment & Supplies · CIK 1807887 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “We have relationships with ICT Investments and its affiliates that could adversely affect our business, financial condition, liquidity and results of operations.”
Removed heading “We have a large amount of intangible assets, and if these assets become impaired, our earnings would be adversely affected.”
Largest changes
“ICT Investments and its affiliates, Fonon Corporation, Fonon Quantum Technologies, Inc., Fonon Technologies, Inc. (collectively referred to as “Related Entities”), collectively own approximately 34% of our Common Stock and have assisted us with accounting matters, business and financial contacts to facilitate our growth and fund-raising efforts, including acquisition targets such as Control Micro Systems and Beamer Laser, and expertise in various laser technologies, including the advanced laser-based anti-drone system. …”see in full comparison
“We have relationships with ICT Investments and its affiliates that could adversely affect our business, financial condition, liquidity and results of operations.”see in full comparison
“We have a large amount of intangible assets, and if these assets become impaired, our earnings would be adversely affected.”see in full comparison
“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. If we experience any significant impairment to our intangible assets, it may have a material adverse effect on our reported financial results for the period in which the charge is taken and could result in a decrease in the market price of our common stock.”see in full comparison
Full comparison: every changed paragraph (6)
We
have a large amount of intangible assets, and if these assets become impaired, our earnings would be adversely affected.
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. If we experience any significant impairment to our intangible assets,
it may have a material adverse effect on our reported financial results for the period in which the charge is taken and could result
in a decrease in the market price of our common stock.
We have relationships with ICT Investments and its affiliates that could adversely affect our business, financial condition, liquidity and results of operations.
ICT Investments and its affiliates, Fonon Corporation, Fonon Quantum Technologies, Inc., Fonon Technologies, Inc. (collectively referred to as “Related Entities”), collectively own approximately 34% of our Common Stock and have assisted us with accounting matters, business and financial contacts to facilitate our growth and fund-raising efforts, including acquisition targets such as Control Micro Systems and Beamer Laser, and expertise in various laser technologies, including the advanced laser-based anti-drone system. As a result, among the most significant risks are (i) conflicts of interest in compensation paid to the Related Entities since the amount of compensation may exceed what we would otherwise pay in an “arm’s length transaction with an unaffiliated entity, (ii) a risk that termination of, or material adverse change in, the terms of this relationship, could result in a material adverse change to us and our operations and could adversely affect our business, financial condition, liquidity and results of operations: (iii) our failure to correctly identify or disclose the transactions with the Related Entities could result in SEC enforcement proceedings and sanctions, shareholder lawsuits or even criminal charges for fraud, and (iv) the risk of material misstatements in our SEC filings if there are complex related party transactions making it difficult for our auditors to verify the accuracy of our financial reporting.
ICT
Investments, via common control of Fonon CorporationDrone Shield Solutions, Inc. and Fonon Technologies combined owns 59.19%34% of our shares of common
stock. As a
result, ICT Investments is able to: place, elect, or defeat the election of our directors; amend or prevent amendment to
our certificates
of incorporation or bylaws; effect or prevent a merger, sale of assets or other corporate transaction; drive business
decisions and control
expenditures; and control the outcome of any other matter submitted to the stockholders for vote. Accordingly,
other stockholders are
unable to influence management or exercise control over our business.
ICT
Investments through its ownership of Fonon Corporation,Drone Shield Solutions, Inc., holds a large number of our outstanding shares. We can make
no prediction as
to the effect, if any, that sales of shares, or the availability of shares for future sale, will have on the prevailing
market price
of our shares of common stock. 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.
Management's Discussion & Analysis (MD&A)
New heading “The forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events.”
New heading “The “Company,” “we,” “us,” or “our,” are references to the business of Laser Photonics Corporation, a Wyoming corporation.”
New heading “Results of Operations”
New heading “CONSOLIDATED STATEMENTS OF OPERATIONS”
New heading “Other income (expenses)”
New heading “Operating Activities”
New heading “Investing Activities”
New heading “Financing Activities”
Removed heading “Description of Our Gross Sales, Costs and Expenses”
Removed heading “Our sales channels”
Removed heading “Sales Channels Overview”
Removed heading “Distributors and Resellers”
Removed heading “Summary of Statements of Operations for the Years Ended December 31, 2024, and 2023:”
Removed heading “Net Loss (Income)”
Removed heading “Lease Liability”
Removed heading “Off-Balance Sheet Arrangements”
Removed heading “Legal Proceedings”
Removed heading “Critical Accounting Policies and Estimates”
Removed heading “ASC-280 Segment Reporting”
Largest changes
“Distributors generally have no right to return unsold equipment. However, in limited circumstances, if the company determines that distributor stock is morally aging beyond the company’s new model releases, it may accept returns and provide the distributor with credit against their trading account at the company’s discretion under its warranty policy. …”see in full comparison
“Goodwill and long-lived assets impairments. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Impairment is measured by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flow expected to result from use of the assets 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.”see in full comparison
“Goodwill and Long-lived assets impairment. 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. 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.”see in full comparison
“Goodwill and Long-lived assets impairments. 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. 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 an intangible is less than the carrying amount.”see in full comparison
“The forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events.”see in full comparison
“We have a history of reporting net losses. As of the issuance date of the financial statements included in this Annual Report on Form 10-K, management expects that the Company’s existing cash of $1.4 million will last until August 2026. As a result, management has concluded, and our independent registered public accounting firm has agreed with our conclusion that there is a substantial doubt regarding our ability to continue as a going concern for a period of at least 12 months beyond the filing of this Annual Report on Form 10-K. …”see in full comparison
Full comparison: every changed paragraph (150)
General
The
following discussion and analysis of theour financial condition and 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 auditedunaudited consolidatedfinancial
statements and the notes to those financial statements and related notes and the description
of our business and properties includedappearing elsewhere herein.in this Report.
Certain statements in this Report constitute forward-looking statements. These forward-looking statements include statements which involve risks and uncertainties, regarding, among other things, (a) our projected sales, profitability, and cash flows, (b) our growth strategy, (c) anticipated trends in our industry, (d) our future financing plans, and (e) our anticipated needs for, and use of, working capital. They are generally identifiable by use of the words “may,” “will,” “should,” “anticipate,” “estimate,” “plan,” “potential,” “project,” “continuing,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend,” or the negative of these words or other variations on these words or comparable terminology. Considering these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this filing will in fact occur. You should not place undue reliance on these forward-looking statements.
The forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events.
The “Company,” “we,” “us,” or “our,” are references to the business of Laser Photonics Corporation, a Wyoming corporation.
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.
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. 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.
We are a vertically integrated manufacturing Company for photonics based industrial products and solutions, primarily disruptive laser cleaning technologies and applications for the pharmaceutical industry. 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.
In 2024, we acquired 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 is expanding rapidly, driven by the growing need for more effective and patient-friendly drug delivery systems. 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. We believe that there is a significant opportunity to unlock CMS’s growth potential by integrating it into our existing sales and marketing infrastructure, enhancing customer engagement and expanding our market reach to maximize wallet share from current customers and bring new clients on board.
In 2025, we expanded our product portfolio through the acquisition of Beamer Laser Marking Systems, formerly the laser capital equipment division of ARCH Cutting Tools. Beamer’s IR fiber and CO₂ laser marking systems significantly expand our product offering into high-value industrial marking applications such as serialization, UID marking, medical devices, aerospace traceability, automotive components, and firearms compliance. The Beamer acquisition also provides an established customer base and IP portfolio and is expected to enhance our revenue mix in 2026.
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. 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 laser equipment. As a result, we are developing an array of laser cleaning equipment that we have named the CleanTech™ product line, which we believe represents a new generation of high-power laser cleaning systems applicable to numerous material processing operations.
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
develop our products to standard specifications and use a common set of components within our product architecture. 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.
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. 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.
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. 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.
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. 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.
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. 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.
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.
All
orders are received on a revolving bases in accordance with the Company’s standard Terms and Conditions of Sale. Orders are not
cancelable. 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. Payments are made by the distributor to the Company when the distributor collects funds from its regional
customers or when they have funds available to reduce the outstanding balance. The Company allocates payments in accordance with its
accounting practices. Detailed aging is accounted for in the Company’s MRP system – DBA Manufacturing keeping records of
all equipment units ever manufactured with coordinating serial numbers. Higher level account-related data with payment history is recorded
in the Company’s QuickBooks accounting software.
Cost
of Sales. Our cost of sales includes the cost of raw materials and components for manufacturing laser systems and consists of different
electronic and optical components such as optical generators, scan heads, connector assemblies and wires, edge seal and adhesives, junction
boxes, and other items, such as raw aluminum and aluminum extrusions, steel for tilt brackets and frames, subassemblies, miscellaneous
materials, chemicals, support and low cost common parts and components, like tie wraps, insulating tape, shrink wraps, terminals, etc.
We are vertically integrated and currently manufacture all critical components for our products as well as assemble finished products.
Our cost of sales also includes direct labor, manufacturing overhead (such as engineering labor), equipment maintenance, quality and
production control, procurement costs, and warranty costs. Cost of sales does not include depreciation of manufacturing plant and equipment,
nor does it include facility-related expenses (such as rent and utilities).
Overall,
we expect our cost of goods sold to continue to decrease over the next several years due to an increase in worldwide capacity in fiber
laser parts and components, and availability of optical generators, an increase in unit output per production line, and more efficient
absorption of fixed costs driven by economies of scale. This expected decrease in cost for laser technology would be partially offset
during periods in which we underutilize manufacturing capacity.
Sales
and marketing. Our sales and marketing expenses consist primarily of costs related to compensation, trade shows, professional and technical
conferences, travel, facilities, depreciation of equipment used for demonstration purposes and other marketing costs.
Selling,
general, and administrative Expenses. Our general and administrative expense consists primarily of compensation and associated costs
for executive management, sales and marketing personnel, outside legal and professional fees, insurance premiums and fees, allocated
facilities costs, and other corporate expenses such as charges and benefits related to the change in allowance for doubtful debt.
Gross
margin. Our total gross margin in any period can be significantly affected by total net sales in any period, by competitive factors,
by product mix, and by other factors such as changes in foreign exchange rates relative to the U.S. Dollar, some of which are not under
our control. 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. 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 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. We capitalize interest expense into
our property, plant and equipment, project assets, and deferred project costs when such costs qualify for interest capitalization.
Beamer integration and expected synergies. With the Beamer acquisition, the Company expects near-term integration costs related to engineering alignment, supply chain consolidation, and facility relocation. Management anticipates long-term synergies through shared manufacturing resources, cross-selling opportunities, and expanded participation in regulated industries requiring permanent laser marking solutions.
Supply Chain. We are experiencing increased lead times for certain parts and components purchased from third party suppliers; particularly electronic components. We, our customers and our suppliers, continue to face constraints related to supply chain and logistics, including availability of capacity, materials, air cargo space, sea containers and higher freight rates and import duties. Supply chain and logistics constraints are expected to continue for the foreseeable future and could impact on our ability to supply products and our customers’ demand for our product or readiness to accept deliveries. Notwithstanding these effects, we believe we can meet the near-term demand for our products, but the situation is fluid and subject to change.
Net sales. Our net sales have historically fluctuated from year to year. The increase or decrease in sales from a prior year can be affected by the timing of orders received from customers, the shipment, installation and acceptance of products at our customers’ facilities. Net sales can be affected by the time taken to qualify our products for use in new applications in the end markets that we serve. Our sales cycle varies substantially, ranging from a period of a few weeks to as long as one year or more, but is typically several months. The adoption of our products by a new customer or qualification in a new application can lead to an increase in net sales for a period which may then slow until we penetrate new markets or obtain new customers.
Our business depends substantially upon capital expenditures by end users, particularly by manufacturers using our products for materials processing, which includes general manufacturing, automotive including electric vehicles (EV), other transportation, aerospace, heavy industry, consumer, semiconductor, pharmaceutical, and electronics. Although applications within materials processing are broad, the capital equipment market in general is cyclical and historically has experienced sudden and severe downturns. For the foreseeable future, our operations will continue to depend upon capital expenditures by end users of materials processing equipment and will be subject to the broader fluctuations of capital equipment spending.
Gross margin. Our total gross margin in any period can be significantly affected by several factors, including net sales, production volumes, competitive factors, product mix, and by other factors such as changes in foreign exchange rates relative to the U.S. Dollar. Many of these factors are not under our control. The following are examples of factors affecting gross margin:
● As our products mature, we can experience additional competition which tends to decrease average selling prices and affects gross margin.
● Our gross margin can be significantly affected by product mix. Within each of our product categories, the gross margin is generally higher for devices with greater average power. These higher power products often have better performance, more difficult specifications to attain and fewer competing products in the marketplace.
Selling and Marketing expenses. In the first quarter of 2025, we invested in Selling and Marketing costs to support continued growth in the Company. As the secular shift to laser blasting technology matures, our sales growth becomes more susceptible to the cyclical trends typical of capital equipment manufacturers. Accordingly, our future management of and investments in selling and marketing expenses will also be influenced by these trends, although we may still invest in selling and marketing functions to support sales sustainability even in economic down cycles.
Research and development expenses. We plan to continue to invest in research and development to improve our existing laser blasting technology and equipment and develop new products, systems and applications. We believe that these investments will sustain our position as a leader in the laser industry and will support the development of new products that can address new markets and growth opportunities. The amount of research and development expenses we incur may vary from period to period.
Results of Operations
CONSOLIDATED STATEMENTS OF OPERATIONS
Net sales
Net sales for the year ended December 31, 2025 and 2024 was $8.3 million and $3.4 million, respectively. The increase in revenue was due to the recording of a full year of revenue for CMS in 2025, which we acquired on October 30, 2024.
Cost of sales
Cost of sales for the year ended December 31, 2025 and 2024, was $7.1 million and $3.0 million, respectively. The increase in cost of sales was due to the increase in our net sales.
Gross profit for the year ended December 31, 2025 and 2024 was $1.2 million and $0.4 million, respectively. The increase in gross profit was due to our increase in net sales. Our gross margin for the year ended December 31, 2025 and 2024 was 14% and 12%, respectively.
Operating expenses consist of sales and marketing expense, general and administrative expense, research and development expense, and impairment charges. Operating expenses for the year ended December 31, 2025 and 2024 were $14.5 million and $6.9 million accordingly. The increase of $7.6 million was due to the recording of $1.6 million of non-cash stock-based compensation expense, $0.8 million of non-cash stock-based payment for services, and $0.2 million on the impairment of property and equipment, all of which did not occur in the prior year period. Additionally, we recorded an increase of $3.0 million for the impairment of intangible assets over the prior year period. The remaining increase in operating expenses over the prior year period was from a full year of CMS operating expenses in 2025, which we acquired on October 30, 2024, and normal changes in our operating expenses to support our growth.
Operating loss
Operating loss for the year ended December 31, 2025 and 2024 was $13.3 million and $6.5 million, respectively. The increase in operating loss was from increased operating expenses, which was offset by increased gross profit, as discussed above.
Other income (expenses)
Other expenses was $4.2 million for the year ended December 31, 2025, compared to other income of $3.9 million for the prior year period. In the current period, we realized financing costs of $0.7 million related to our notes payable, $3.7 million of interest, offset by the change in fair value of derivative liability of $0.3 million, all of which did not occur in the prior year period. In the prior year period, we recorded a $3.9 million gain on bargain purchase of our acquisition of CMS, and other income of $0.1 million, both of which did not occur in the current year period.
Net loss
Net loss for the year ended December 31, 2025 and 2024 was $17.4 million and $2.5 million, respectively. The increase in net loss was from the change in other income (expenses), increased operating expenses, offset by increased gross profit, as discussed above.
The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of the uncertainty concerning our ability to continue as a going concern.
As reflected in the accompanying financial statements, for the year ended December 31, 2025, the Company recorded a net loss of $17.5 million and used cash in operations of $6.4 million. Cash used in operations was primarily for working capital. As of December 31, 2025, we had a cash balance of $0.7 million.
On February 9, 2026, we conducted a public offering of an aggregate of (i) 7,142,858 shares (the “Shares”) of the Company’s common shares, par value $0.001 per share (the “Common Stock”), at an offering price per Share and associated Warrants of $0.70, (ii) five year Series A-1 Common Stock purchase warrants (the “Series A-1 Warrants”) to purchase up to 7,142,858 shares of Common Stock at an exercise price of $0.70 per share, and (iii) twenty-four month Series A-2 Common Stock purchase warrants (the “Series A-2 Warrants”, and, collectively with the Series A-1 Warrants, the “Warrants”) to purchase up to 7,142,858 shares of Common Stock at an exercise price of $0.70 per share, for aggregate gross proceeds of $5,000,001. In connection with the closing, the Company will issue to H.C. Wainwright & Co., LLC (“Wainwright”) or its designees warrants to purchase up to an aggregate of 500,000 shares of Common Stock at an exercise price of $0.875 per share, which are exercisable immediately upon issuance and have a termination date of February 6, 2031. Additionally, in connection with a note financing conducted by the Company in September 2025, the Company will pay Wainwright a cash fee equal to $147,777.78 and issue to Wainwright or its designees unregistered warrants to purchase up to an aggregate of 57,058 shares of Common Stock at an exercise price of $3.2375 per share, which are exercisable immediately upon issuance and have a termination date of February 6, 2031. The net proceeds received by the Company after commissions, fees, legal expenses, and payment of the cash fee to Wainwright, was $4.1 million.
In February 2026, we made notes payable principal and interest payments of $4.2 million.
What changed in the latest 10-Q
Risk Factors
We could not find a separate Risk Factors item in the latest 10-Q. Some companies leave it out of quarterly reports; see the annual 10-K risk factors and the original filing. Open the filing on SEC.gov.
Management's Discussion & Analysis (MD&A)
Largest changes
Net cash used in operating activities wassee in full comparison$1,842,774$4,735,656 for thethreesix months endedMarchJune31,30, 2026, compared with$1,157,220$2,192,704 for thethreesix months endedMarchJune31,30, 2025. Operating cash outflows during the current period were primarily driven by the Company’s net loss of$2,946,284,$6,224,721, partially offset by non-cash items including depreciation and amortization, stock-based compensation expense, amortization of debt discount and deferred financing costs,changesfinancing costs recognized as additional note principal on default, and the change in fair value of derivativeliabilities, and changes in operating assets andliabilities. Working capital changes included movements in accounts receivable, inventories, contract liabilities, deferred revenue, and accounts payable.
Net cash provided by financing activities was $6,339,922 for the six months ended June 30, 2026, compared with $1,759,915 for the six months ended June 30, 2025. Financing activity during the current period was primarily attributable to net proceeds from the Company’s February 2026 public offering, proceeds received from warrant exercises and the March and April 2026 warrant inducement transactions, and borrowings under financing arrangements. These inflows were partially offset by offering and transaction costs, repayments of outstanding debt obligations, and repayments of related-party borrowings. Financing transactions completed during thesee in full comparisonquarterperiod strengthened liquidity and contributed to the improvement in working capital. The Company continues to require additional liquidity to support operations, strategic initiatives, and working capitalduringrequirements. Management expects to continue evaluating debt and equity financing alternatives to supportthefutureperiod.operations and growth objectives. While management believes additional actions are available to improve liquidity, there can be no assurance that financing will be available on acceptable terms, or at all
“The Company continues to require additional liquidity to support operations, strategic initiatives, and working capital requirements. Management expects to continue evaluating debt and equity financing alternatives to support future operations and growth objectives. While management believes additional actions are available to improve liquidity, there can be no assurance that financing will be available on acceptable terms, or at all.”see in full comparison
Cost of Sales / Gross Profit (Loss). Cost of sales for the three months endedsee in full comparisonMarchJune31,30,20262026, was$1,304,004,$1,653,832, compared to$1,389,791$1,496,304 for the three months endedMarchJune31,30, 2025,representingana decreaseincrease of$85,787,$157,528, or6.2%.10.5%.DespiteGrosstheprofitreductionwasin cost of sales, the significant decline in net sales resulted in a gross loss of $388,451$152,473 for the three months endedMarchJune31,30, 2026, reflecting a gross margin of 8.4%, compared to gross profit of $1,102,671 and a gross margin of 42.4% for the three months ended June 30, 2025. For the six months ended June 30, 2026, cost of sales was $2,957,836, compared to $2,886,096 for the six months ended June 30, 2025, an increase of $71,740, or 2.5%, and the Company recorded a gross loss of $235,978, reflecting a negative gross margin of42.4%,8.7%, compared to gross profit of$900,491$2,003,161 and a gross margin of39.3%41.0% for thethreesix months endedMarchJune31,30, 2025. The deterioration in gross margin was primarily attributable to lower revenue volume and the resulting inability to absorb fixed manufacturing overhead and production costs, reduced production throughput, and changes in productmixmix,duringtogether with integration and facility-transition costs associated with thecurrentBeamerperiod.product line. The improvement from the negative gross margin of 42.4% recorded in the first quarter of 2026 to a positive gross margin of 8.4% in the second quarter reflects higher revenue volume and improved absorption of fixed manufacturing costs. Gross margins may fluctuate from period to period depending on sales volume, manufacturing utilization, customer mix, and timing of productdeliveries..deliveries.
“General and Administrative. General and administrative expenses for the three months ended June 30, 2026, were $1,504,154, compared to $1,542,841 for the three months ended June 30, 2025, a decrease of $38,687, or 2.5%. For the six months ended June 30, 2026, general and administrative expenses were $3,142,987, compared to $3,177,805 for the six months ended June 30, 2025, a decrease of $34,818, or 1.1%. …”see in full comparison
Net Loss. Net loss for the three months endedsee in full comparisonMarchJune31,30,20262026, was$2,946,284,$3,278,437, or $(0.110.08) per basic and dilutedshare and $(0.16) per share attributable to common shareholders after deducting the deemed dividend of $1,512,480,share, compared to net loss of$1,680,723,$1,773,902, or $(0.12) per basic and diluted share, for the three months endedMarchJune31,30, 2025, representing an increase of$1,265,561,$1,504,535, or 84.8%. Net loss for the six months ended June 30, 2026, was $6,224,721, or75%.$(0.19) per basic and diluted share, compared to net loss of $3,454,625, or $(0.24) per basic and diluted share, for the six months ended June 30, 2025, representing an increase of $2,770,096, or 80.2%. The increase in net loss was primarily attributable to lower revenues, negative gross margin performance, andhigher interest expense incurred in connection withtheCompany’s$357,160 registrationoutstandingpaymentdebtarrangementobligations during the quarter,charge, partially offset bythelowergainnetrecognizedinterestfrom the change in fair value of the derivative liability.expense.
Full comparison: every changed paragraph (24)
We
are a vertically integrated manufacturing Company for photonics based industrial products and solutions, primarily disruptive laser cleaning
technologiestechnologies, and applications for the pharmaceutical industry. Our vertically integrated operations allow us to reduce development and
advanced laser equipment manufacturing time, offer better prices, control qualityquality, and protect our proprietary knowhow and technology
compared to other laser cleaning companies and companies with competing technologies.
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. 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 costscosts, and the technical complexities of laser equipment.
As a result, we are developing an array of laser cleaning equipment that we have named the CleanTech™ product line, which we believe
represents a new generation of high-power laser cleaning systems applicable to numerous material processing operations.
Net
sales. Our net sales have historically fluctuated from quarter to quarter. The increase or decrease in sales from a prior quarter
can be affected by the timing of orders received from customers, the shipment, installationinstallation, and acceptance of products at our customers’
facilities. Net sales can be affected by the time taken to qualify our products for use in new applications in the end markets that we
serve. Our sales cycle varies substantially, ranging from a period of a few weeks to as long as one year or more, but is typically several
months. The adoption of our products by a new customer or qualification in a new application can lead to an increase in net sales for
a period which may then slow until we penetrate new markets or obtain new customers.
Research
and development expenses. We plan to continue to invest in research and development to improve our existing laser blasting technology
and equipment and develop new products, systemssystems, and applications. We believe that these investments will sustain our position as a leader
in the laser industry and will support the development of new products that can address new markets and growth opportunities. The amount
of research and development expenses we incur may vary from period to period.
Correction of previously reported amounts. As described in Note 2 to the condensed consolidated financial statements, the Company has corrected its accounting for the consideration transferred in connection with its March 2026 warrant inducement transaction, which was previously reported as a deemed dividend of $1,512,480 in the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2026. That amount is now presented as a cost of the related equity offering charged against additional paid-in capital. The correction has no effect on net loss, basic or diluted net loss per share, total assets, total liabilities, total stockholders’ deficit or cash flows for any period presented.
Revenue.
Net sales for the three months ended MarchJune 31,30, 20262026, were $915,553,$1,806,305, compared to $2,290,282$2,598,975 for the three months ended MarchJune 31,30, 2025,
representing a decrease of $1,374,729,$792,670, or 60%.30.5%. Net sales for the six months ended June 30, 2026, were $2,721,858, compared to $4,889,257
for the six months ended June 30, 2025, a decrease of $2,167,399, or 44.3%. The decrease was primarily attributable to (i) lower equipment
deliveries during the current
period, andperiods, (ii) the timing of customer purchasing decisions, project execution schedules, and revenue recognition
milestones, milestones.and (iii) the absence of affiliate revenue in the current periods compared to $391,818 recognized in the six months ended
June 30, 2025. Second-quarter net sales increased $890,752, or 97.3%, over the first quarter of 2026, reflecting improved equipment delivery
volume as the quarter progressed. Revenue may
fluctuate from period to period based on customer purchasing cycles, project timing, equipment
delivery schedules, and product mix.
Cost
of Sales / Gross Profit (Loss). Cost of sales for the three months ended MarchJune 31,30, 20262026, was $1,304,004,$1,653,832, compared to $1,389,791$1,496,304 for
the three months ended MarchJune 31,30, 2025, representingan a decreaseincrease of $85,787,$157,528, or 6.2%.10.5%. DespiteGross theprofit reductionwas in cost of sales, the significant
decline in net sales resulted in a gross loss of $388,451$152,473 for the three months ended MarchJune 31,30,
2026, reflecting a gross margin of 8.4%, compared to gross profit of $1,102,671 and a gross margin of 42.4% for the three months ended
June 30, 2025. For the six months ended June 30, 2026, cost of sales was $2,957,836, compared to $2,886,096 for the six months ended
June 30, 2025, an increase of $71,740, or 2.5%, and the Company recorded a gross loss of $235,978, reflecting a negative gross margin
of 42.4%,8.7%, compared to gross profit of $900,491$2,003,161 and a gross margin of 39.3%41.0% for the threesix months ended MarchJune 31,30, 2025. The deterioration
in gross margin was primarily attributable to lower revenue volume and the resulting inability to absorb fixed manufacturing overhead
and production costs, reduced production throughput, and changes in product mixmix, duringtogether with integration and facility-transition costs
associated with the currentBeamer period.product line. The improvement from the negative gross margin of 42.4% recorded in the first quarter of 2026
to a positive gross margin of 8.4% in the second quarter reflects higher revenue volume and improved absorption of fixed manufacturing
costs. Gross margins may fluctuate
from period to period depending on sales volume, manufacturing utilization, customer mix, and timing
of product deliveries..deliveries.
Sales
and Marketing. Sales and marketing expenses for the three months ended MarchJune 31,30, 20262026, were $621,454,$817,609, compared to $674,582$338,025 for the
three months ended MarchJune 31,30, 2025, representingan a decreaseincrease of $53,128,$479,584, or 7.9%.141.9%. For the six months ended June 30, 2026, sales and marketing expenses
were $1,439,063, compared to $1,012,606 for the six months ended June 30, 2025, an increase of $426,457, or 42.1%. Sales and marketing
expenses consist primarily of personnel-related
costs, advertising, promotional activities, customer acquisition efforts, travel, and
commercial support functions. The decreaseincrease reflects
lower discretionaryexpanded marketingcommercial headcount and travelpromotional expendituresactivity duringsupporting the period,Beamer consistentproduct
line and the industrial marking and traceability markets, together with theallocated Company’spersonnel ongoingand focusfacility on cost management.costs.
General and Administrative. General and administrative expenses for the three months ended June 30, 2026, were $1,504,154, compared to $1,542,841 for the three months ended June 30, 2025, a decrease of $38,687, or 2.5%. For the six months ended June 30, 2026, general and administrative expenses were $3,142,987, compared to $3,177,805 for the six months ended June 30, 2025, a decrease of $34,818, or 1.1%. General and administrative expenses consist primarily of salaries and personnel-related costs, professional fees, insurance, SEC filing and compliance costs, public company expenses, and corporate overhead. General and administrative expenses remained substantially consistent with the prior-year periods, as increased professional fees incurred in connection with the Company’s capital-raising activities and delayed periodic filings were offset by reductions in other general and administrative costs.
General
and Administrative. General and administrative expenses for the three months ended March 31, 2026 were $1,638,833, compared to $1,634,965
for the three months ended March 31, 2025, remaining substantially consistent with the prior-year period.
Research
and Development Costs. Research and development expense for the three months ended MarchJune 31,30, 20262026, was $127,081,$219,006, compared to $163,469$184,494
for the three months ended MarchJune 31,30, 2025, representingan a decreaseincrease of $36,388,$34,512, or 22.3%.18.7%. For the six months ended June 30, 2026, research and development
expense was $346,087, compared to $347,963 for the six months ended June 30, 2025, substantially consistent with the prior-year period.
Research and development activities remain focused
on enhancing existing laser cleaning technologies and equipment and developing new
products, systems, and applications.applications, including integration of the Beamer laser marking platform. The Company expects
research and development
expenditures to fluctuate based on project timing, product development priorities, and resource allocation.
Operating
Loss. Operating loss for the three months ended MarchJune 31,30, 20262026, was $2,775,819,$2,388,296, compared to $1,572,525$962,688 for the three months ended June
March 31,30, 2025, representing an increase of $1,203,294,$1,425,608, or 76.5%.148.1%. Operating loss for the six months ended June 30, 2026, was $5,164,115, compared to $2,535,213
for the six months ended June 30, 2025, an increase of $2,628,902, or 103.7%. The increase in operating loss was primarily attributable
to lower
revenue and the resulting compression in gross loss during the current period,margin, combined with aincreased significantsales increaseand inmarketing spending, partially offset
by substantially consistent general and administrative expenses
driven by financing-related transaction costs and expanded public company operating costs, partially offset by modest decreases in sales
and marketing and research and development costs.expenses.
Interest
Expenses, Net. Interest expenses,expense, netnet, for the three months ended MarchJune 31,30, 2026 werewas $384,851,$434,789, compared towith $99,000$811,214 for the three
months ended MarchJune 31,30, 2025.2025, a decrease of $376,425, or 46.4%. For the six months ended June 30, 2026, interest expense, net, was $819,640,
compared with $919,412 for the six months ended June 30, 2025, a decrease of $99,772, or 10.9%. The increasedecrease reflects interestthe accruedrepayment onduring
2026 of the Company’s outstandinghigher-cost note obligations, including the NPA Notes, the District 2 Note, the 2025 Term Loans, and related-party
borrowings, partially offset by interest and amortization of debt obligationsdiscount during the
quarter, including notes payable and related partyon borrowings outstanding duringunder the period.2026 Term Loan.
Change
in Fair Value of Derivative Liability The change in fair value of the derivative liability resulted in a loss of $98,193 for the
three months ended June 30, 2026, and a gain of $214,386$116,193 for the three
six months ended MarchJune 31,30, 2026, compared to $nil forin each of the threecorresponding
prior-year months ended March 31, 2025.periods. The gainamounts reflectsreflect a decreasechanges in the estimated
fair value of the Company’s derivative liability associated with
the Hudson financing arrangement, driven by changes in the underlying
valuation inputs during the quarter.periods. The carrying value of the
derivative liability was $222,709 at June 30, 2026, compared to $124,516 at March 31, 2026, and $338,902 at December 31, 2025.
Total
Other Expense. Total other expense for the three months ended MarchJune 31,30, 20262026, was $170,465,$890,142, compared to $108,198$811,214 for the three months
ended MarchJune 31,30, 2025, representing an increase of $62,267,$78,928, or 57.5%.9.7%. For the six months ended June 30, 2026, total other expense was $1,060,607, compared
to $919,412 for the six months ended June 30, 2025, an increase of $141,195, or 15.4%. Other expense duringin the current periodperiods consisted
of net interest
expense of $384,851 on the Company’s outstanding debt obligations,obligations and a $357,160 charge recognized in connection with the registration
payment arrangement entered into as part of the April 2026 warrant inducement, partially offset (for the six-month period) by athe gain of $214,386
recognized from the change
in fair value of the Company’s remaining derivative liability associated with the Hudson financing arrangement. The increase compared
to the prior-year period was primarily attributable to higher interest expense resulting from the Company’s increased borrowing
activity during the quarter, partially offset by the derivative fair value gain.
Net
Loss. Net loss for the three months ended MarchJune 31,30, 20262026, was $2,946,284,$3,278,437, or $(0.110.08) per basic and diluted share and $(0.16) per share
attributable to common shareholders after deducting the deemed dividend of $1,512,480,share, compared to net
loss of $1,680,723,$1,773,902, or $(0.12)
per basic and diluted share, for the three months ended MarchJune 31,30, 2025, representing an increase of $1,265,561,$1,504,535,
or 84.8%. Net loss for the six months ended June 30, 2026, was $6,224,721, or 75%.$(0.19) per basic and diluted share, compared to net loss
of $3,454,625, or $(0.24) per basic and diluted share, for the six months ended June 30, 2025, representing an increase of $2,770,096,
or 80.2%. The increase
in net loss was primarily attributable to lower revenues, negative gross margin performance, and higher interest expense incurred in
connection with the Company’s$357,160
registration outstandingpayment debtarrangement obligations during the quarter,charge, partially offset by thelower gainnet recognizedinterest from the
change in fair value of the derivative liability.expense.
The
following is a summary of the Company’s cash flows provided andby (and used in) operating, investing, and financing activities for
the three-monthsix-month periods ended on MarchJune 31,30, 2026, and MarchJune 31,30, 2025.
As
of MarchJune 31,30, 2026, the Company had cash of $1,627,600,$2,156,631, total current assets of $4,530,096,$4,600,859, and total current liabilities of $8,514,918.$7,708,679.
The Company’s working capital deficit was $3,984,822,$3,107,820, compared with a working capital deficit of $7,344,637 as of December 31,
2025. The improvement in working capital was primarily attributable to financingthe transactionsCompany’s completedFebruary 2026 public offering, proceeds received
from warrant exercises and the March and April 2026 warrant inducement transactions, and the repayment of outstanding debt obligations
during the quarter and subsequent
debt reduction activities.period.
Net
cash used in operating activities was $1,842,774$4,735,656 for the threesix months ended MarchJune 31,30, 2026, compared with $1,157,220$2,192,704 for the threesix months
ended MarchJune 31,30, 2025. Operating cash outflows during the current period were primarily driven by the Company’s net loss of $2,946,284,$6,224,721,
partially offset by non-cash items including depreciation and amortization, stock-based compensation expense, amortization of debt discount
and deferred
financing costs, changesfinancing costs recognized as additional note principal on default, and the change in fair value of derivative liabilities, and changes in operating assets and
liabilities. Working capital changes
included movements in accounts receivable, inventories, contract liabilities, deferred revenue,
and accounts payable.
Net
cash used in investing activities was $97,974 for the threesix months ended MarchJune 31,30, 2026, compared with $22,560 for the threesix months ended
MarchJune 31,30, 2025. Investing activity during the current period primarily consisted of purchases of property and equipment.
Net
cash provided by financing activities was $2,918,009 for the three months ended March 31, 2026, compared with $825,000 for the three
months ended March 31, 2025.
Net
cash provided by financing activities was $6,339,922 for the six months ended June 30, 2026, compared with $1,759,915 for the six months
ended June 30, 2025. Financing
activity during the current period was primarily attributable to net proceeds from the Company’s
February 2026 public offering, proceeds
received from warrant exercises and the March and April 2026 warrant inducement transactions,
and borrowings under financing arrangements. These inflows were
partially offset by offering and transaction costs, repayments of outstanding
debt obligations, and repayments of related-party borrowings.
Financing transactions completed during the quarterperiod strengthened liquidity
and contributed to the improvement in working capital. The Company continues to require additional liquidity to support operations, strategic
initiatives, and working capital duringrequirements. Management expects to continue evaluating debt and equity financing alternatives to support
thefuture period.operations and growth objectives. While management believes additional actions are available to improve liquidity, there can be
no assurance that financing will be available on acceptable terms, or at all
The
Company continues to require additional liquidity to support operations, strategic initiatives, and working capital requirements. Management
expects to continue evaluating debt and equity financing alternatives to support future operations and growth objectives. While management
believes additional actions are available to improve liquidity, there can be no assurance that financing will be available on acceptable
terms, or at all.
As
of MarchJune 31,30, 2026, the Company did not maintain any material off-balance sheet arrangements, including obligations under guarantee contracts,
retained or contingent interests in transferred assets, obligations under certain derivative instruments, or obligations arising from
variable interest entities.
LASE insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 1 Form 4 filing (1 insider, 3 trade dates, 69,000 shares, about $46.9K) and open-market sales in 1 filing (1 insider, 1 trade date, 5,800 shares, about $5.7K). Net open-market shares: 63,200 (purchases minus sales); net value about $41.2K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-04-30 | Lu Qing |
Open-market purchase | 27,000 | $0.75 | $20.2K |
| 2026-04-29 | Lu Qing |
Open-market purchase | 15,000 | $0.64 | $9.6K |
| 2026-04-29 | Lu Qing |
Open-market purchase | 20,000 | $0.63 | $12.6K |
| 2026-04-27 | Lu Qing |
Open-market purchase | 3,500 | $0.61 | $2.1K |
| 2026-04-27 | Lu Qing |
Open-market purchase | 3,500 | $0.65 | $2.3K |
| 2026-04-25 | Lu Qing |
Open-market sale | 2,300 | $0.98 | $2.3K |
| 2026-04-25 | Lu Qing |
Open-market sale | 3,500 | $0.98 | $3.4K |
Well-known investors holding LASE (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Renaissance Technologies | 2026-06-30 | 344,055 | $567.7K | 0.0% | New position |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 17,716 | $29.2K | 0.0% | New position |