LASE 10-Q Quarterly Report March 31, 2021 | Alphaminr
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LASE 10-Q Quarter ended March 31, 2021

Balance Sheet
Cash Flow
Income Statement
10-Q 1 lpc_10q.htm FORM 10-Q lpc_10q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
☒   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2021
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________ to __________________
Commission File Number:  ______________
Laser Photonics Corporation
(Exact name of registrant as specified in its charter)
Delaware
84-3628771
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
1101 N. Keller Road, Suite G
Orlando, FL
32810
(Address of Principal Executive Offices)
Zip Code
(407) 804 1000
Registrant’s Telephone Number, Including Area Code
Not Applicable
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE

COMMON STOCK, $0.001 PAR VALUE

Title of each class
TradingSymbol(s)
Name of each exchange on which registered
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒     No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒·   No ●☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
Accelerated filer
☐
Non-accelerated filer
☒
Smaller reporting company
☒
Emerging growth company
☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)  Yes ☐     No ☒
As of March 31, 2021, the registrant had 3,561,316 shares of common stock, par value $.001 per share, issued and outstanding.


TABLE OF CONTENTS
Page No.

Certifications
3
PART I – FINANCIAL INFORMATION
ITEM 1. F INANCIAL STATEMENTS
LASER PHOTONICS CORPORATION
CONDENCED BALANCE SHEETS
March 31,
2021
December 31,
2020
ASSETS
Current Assets
Cash and Cash Equivalents
380,772
326,713
Accounts Receivable
618,131
756,095
Inventory
1,988,298
2,169,627
Total Current Assets
2,987,201
3,252,435
Total Fixed Assets
811,848
849,027
Intangible Assets
3,187,275
3,184,280
Operating lease right-of-use
153,166
196,299
TOTAL ASSETS
7,139,490
7,482,041
LIABILITIES & EQUITY
Liabilities
Current Liabilities
Accounts Payable
18,263
53,016
Deferred Revenue
196,833
779,128
Lease liability Current Portion
138,066
181,199
Sales Tax Payable
0
12,665
Total Current Liabilities
353,162
1,026,008
Long Term Liabilities
ICT Investments Loan
876,309
926,768
Lease liability - less current
43,855
43,855
PPP Loan
397,500
198,750
Total Long Term Liabilities
1,317,664
1,169,373
Total Liabilities
1,670,826
2,195,381
Equity
Total Capital Stock
5,291,615
5,291,615
Retained Earnings
(4,955 )
(15,636 )
Net Income
182,003
10,681
Total Equity
5,468,663
5,286,660
TOTAL LIABILITIES & EQUITY
7,139,489
7,482,041
See accompanying notes to financial statements
4
LASER PHOTONICS CORPORATION
STATEMENTS OF O PERATION
(UNAUDITED)
Three months ended
March 31, 2021
March 31, 2020
Ordinary Income/Expense
Income
976,025
177,925
Cost of Goods Sold
352,037
57,320
Gross Profit
623,988
120,605
Expense
Depreciation Expense
39,930
6,602
G&A Expense
105,295
37,002
Payroll Expenses
253,560
189,491
Rent Expense
43,133
43,162
Tax
68
0
Total Expense
441,986
276,257
Net Income
182,002
(155,652 )
Net income (loss) per share
0
(0 )
Weighted average shares
29,270,502
2,661,316
EBITDA
238,241
(145,985 )
See accompanying notes to financial statements
5
LASER PHOTONICS CORPORATION
STATEMENTS OF C ASH FLOWS
(UNAUDITED)
Jan - Mar 21
Jan - Mar 20
OPERATING ACTIVITIES
Net Income
182,003.21
-155,650.99
Adjustments to reconcile Net Income to net cash provided by operations:
Accounts Receivable
137,963.75
-201,835.00
Equipment Parts Inventory
-18,508.14
-314,035.40
Finished Goods Inventory
71,883.00
Sales Demo Inventory
184,900.00
Work in process Inventory
-56,946.00
-86,530.46
Accounts Payable
-34,752.75
37,602.11
Deferred Revenue
-582,295.05
356,725.00
Lease liability Current Portion
-43,133.00
Sales Tax Payable
-12,665.38
Net cash provided by Operating Activities
-171,550.36
-363,724.74
INVESTING ACTIVITIES
Accumulated Depreciation
39,929.73
6,602.34
Equipment and Furniture: Machinery & Equipment: CNC Mill
-2,750.00
Equipment and Furniture: Machinery & Equipment
0.00
-158,456.00
Intangible Assets: Operational Software & Website
-2,995.00
Operating lease right-of-use
43,133.00
Net cash provided by Investing Activities
77,317.73
-151,853.66
FINANCING ACTIVITIES
ICT Investments Loan: Note 2
-50,245.00
ICT Investments Loan: Note1
-213.87
399,347.21
Capital Stock
158,456.00
PPP Loan
198,750.00
Net cash provided by Financing Activities
148,291.13
557,803.21
Net cash increase for period
54,058.50
42,224.81
Cash at beginning of period
326,713.39
0.00
Cash at end of period
380,771.89
42,224.81
See accompanying notes to financial statements
6
LASER PHOTONICS CORPORATION
STATEMENTS OF SHAREHOLDERS' EQUITY
(UNAUDITED)
Common Stock
Additional
Accumulated
Stockholders'
Shares
Amount
Paid-In Capital
(Deficit/Income)
Equity
BALANCE JANUARY 1ST 2020
-
-
$ -
$ -
$ 489,870
Shares issued for cash
$ 2,661,316
$ 26,613
$ 478,893
Net loss for year ended December 31, 2019
$ (15,636 )
January 1 - December 31st, 2020
-
-
$ -
$ -
Shares issued for cash
$ 26,609,186
$ 266,092
$ 4,520,018
Income for period ended December 31st, 2020
$ 10,681
BALANCE DECEMBER 31st, 2020
$ 29,270,502
$ 292,705
$ 4,998,911
$ (4,955 )
$ 5,286,661
January 1 - March 31st, 2021
-
-
$ -
$ -
Shares issued for cash
$ -
$ -
$ -
Income for period ended March 31st, 2021
$ 182,003
BALANCE DECEMBER 31st, 2020
$ 29,270,502
$ 292,705
$ 4,998,911
$ 177,048
$ 5,468,664
See accompanying notes to financial statements
7
LASER PHOTONICS CORPORATION
NOTES TO F INANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION
Laser Photonics Corporation was formed under the laws of Wyoming on November 8, 2019. We changed our domicile to Delaware on March 5, 2021. We are a vertically integrated manufacturing company for photonics based industrial products and solutions, primarily disruptive laser cleaning 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.
The Company’s accounting year end is December 31.
Basis of Presentation
These financial statements are presented in United States dollars and have been prepared in accordance with United States generally accepted accounting principles.
Impact of the Novel Coronavirus
On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally.
The COVID 19 outbreak could have a continued material adverse impact on economic and market conditions and trigger a period of global economic slowdown, which is expected to depress our asset values, including long-lived assets, intangible assets, etc.
Although we cannot estimate the length or gravity of the impact of the COVID-19 outbreak at this time, if the pandemic continues, it may have a material adverse effect on our results of future operations, financial position, and liquidity in fiscal year 2021.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at dates of the financial statements and the reported amounts of revenue and expenses during the periods. Actual results could differ from these estimates. Our significant estimates and assumptions include depreciation and the fair value of our stock, stock-based compensation, debt discount and the valuation allowance relating to the Company’s deferred tax assets.
Cash and Cash Equivalents
Cash and cash equivalents consist of highly liquid investments with an original maturity of three months or less at the date of purchase.  Cash and cash equivalents are carried at cost, which approximates fair value.
As of March 31, 2021, the Company had $380,772 of cash.
8
Accounts Receivable
Trade accounts receivable are recorded net of allowance for expected uncollectible accounts. The Company extends credit to its customers in the normal course of business and performs on-going credit evaluations of its customers. All accounts, or portions thereof, that are deemed uncollectible are written off to bad debt expense, as incurred. In addition, most sales orders are not accepted without a substantial deposit. As of March 31, 2021, our ledger had $618,131 as an allowance/ provision for collectible accounts.
Inventory
Inventories are stated at the lower of cost or net realizable value using the first-in first-out (FIFO) method. We have four principal categories of inventory:
Sales demonstration inventory -Sales demonstration inventory represents completed product used to support our sales force for demonstrations and held for sale. Sales demonstration inventory is held in our demo facilities or by our sales representatives for up to three years, at which time it would be refurbished and transferred to finished goods as used equipment, stated at the lower of cost or net realizable value. We expect these refurbished units to remain in finished goods inventory and sold within 12 months at prices that produce reduced gross margins.
Equipment parts inventory - This inventory represents components and raw materials that are currently in the process of being converted to a certifiable lot of saleable product through the manufacturing and/or equipment assembly process. Inventories include parts and components that may be specialized in nature and subject to rapid obsolescence. The Company periodically reviews the quantities and carrying values of inventories to assess whether the inventories are recoverable. Because of the Company's vertical integration, a significant or sudden decrease in sales activity could result in a significant change in the estimates of excess or obsolete inventory valuation. The costs associated with provisions for excess quantities, technological obsolescence, or component rejections are charged to cost of sales as incurred.
Work in process inventory - Work in process inventory consists of inventory that is partially manufactured or not fully assembled as of the date of these financial statements.  This equipment, machines, parts, frames, lasers and assemblies are items not ready for use or resale.  Costs are accumulated as work in process until sales ready items are compete when it is moved to finished goods inventory.  Amounts in this account represent items at various stages of completion at the date of these financial statements.
Finished goods inventory - Finished goods inventory consists of purchased inventory that were fully manufactured, assembled or in salable condition. Finished goods inventory is comprised of items that are complete and ready for commercial application without further cost other that delivery and setup. Finished goods inventory includes demo and other equipment, lasers, software, machines, parts or assemblies.
At March 31, 2021 and March 31, 2020, respectively, our inventory consisted of the following:
March 31,
2021
March 31,
2020
Inventory
Equipment Parts Inventory
705,877
314,035
Finished Goods Inventory
109,570
0
Sales Demo Inventory
1,096,664
495,150
Work in process Inventory
76,187
86,530
Total Inventory
1,988,298
1,139,776
Fixed Assets - Plant Machinery and Equipment
Property and equipment are recorded at cost.  Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period.
9
Machinery and Equipment
Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. The Company uses other depreciation methods (generally accelerated) for tax purposes where appropriate. The estimated useful lives for significant property and equipment categories are as follows:
Category
Economic Useful Life
Office furniture and fixtures
3-5 years
Machinery and equipment
5-7 years
Intangible Assets
7-12 years
March 31,
2021
March 31,
2020
Capital Assets
Equipment and Furniture
Accumulated Depreciation
(66,339 )
(6,602 )
Machinery & Equipment
797,695
158,456
Office and Computer Equipment
8,420
Office Furniture
31,029
0
R&D Equipment
31,053
0
Vehicles
9,989
0
Total Capital Assets
811,868
151,854
As of March 31, 2021, we recorded $811,868 of capital assets net of depreciation. Fixed assets as of March 31, 2020, were recorded at $151,854.
Intangible Assets
Intangible assets consist primarily of capitalized equipment design documentation, software costs for equipment manufactured for sale, research and development, as well as certain patent, trademark and license costs. Capitalized software and equipment design documentation development costs are recorded in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 86, “Accounting for the Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed,” with costs amortized using the straight-line method over a ten-year period. Patent, trademark and license costs are amortized using the straight-line method over their estimated useful lives of 12 years. On an ongoing basis, management reviews the valuation of intangible assets to determine if there has been impairment by comparing the related assets’ carrying value to the undiscounted estimated future cash flows and/or operating income from related operations.
Intangible Assets
December
2020
December
2019
Customer Relationships
211,000
0.00
Equipment Design Documentation
2,675,000.00
0.00
Operational Software & Website
298,280
0.00
Total Intangible Assets
3,184,280
0.00
As of December 31, 2020, the Company had $3,184,279 of intangible property.
Long-Lived Assets
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 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.
10
Liabilities
Our liabilities consist of current liabilities .
March 31,
2021
December 31,
2019
Current Liability
622,738
5,280
Long Term Liability
746,162
0
Total Liabilities
1,368,900
5,280
As of March 31, 2021, and December 31, 2019, our total liabilities were recorded at $1,349,783 and $5,280, respectively.
Current Liabilities
Our current liabilities consist of accounts payable and deferred revenue.
Sales Tax Liability
Sales tax liability is created when Company sells equipment and services to another entity located in the State of Florida. Currently the sales tax rate in the Company’s County place of business is 6.5%. As of March 31, 2021, our sales tax liability was recorded at $12,566 compared to $0 recorded at December 31, 2019.
Long Term Liabilities
March 31,
2021
March 31,
2020
(Unaudited)
Long Term Liabilities
PPP Loan
397,500
0
Lease Liability less Current
43,855
0
Notes
876,309
399,347
Total Long Term Liabilities
1,317,664
399,347
Our long term liabilities include PPP loans from Axiom Bank, promissory notes to ICT Investments, and long term lease liability. The notes to ICT may be prepaid in whole or in part. As of March 31, 2021, the unpaid principal amount of the notes was $876,309.
Accounts Payable
As of March 31, 2021, and March 31, 2020, our Account Payables were recorded at $18,263 and $42,882, respectively.
Deferred Revenue
The Company requires deposits on most sales orders. These deposits are recorded as deferred revenue until such time as the revenue recognition criteria for that project are order is completed. As of March 31, 2021, our deferred revenue was recorded at $196,833 in comparison to $356,725 recorded at March 31, 2020.
11
Liquidity and Capital Resources
For the three months ended March 31, 2021, the Company’s liquidity needs were met through the financing activity.
The following is a summary of the Company’s cash flows provided by (used in) operating, investing and financing activities:
For three Months ending March 31,
2021
2020
Net cash provided by Operating Activities
(171,550 )
(363,725 )
Net cash provided by Investing Activities
(77,317 )
(151,853 )
Net cash provided by Financing Activities
148,291
557,803
As of March 31, 2021, the Company had $ 380,772 in cash, $ 2,606,429 in current assets (without cash and cash equivalents) and $353,162 in current liabilities.
As a result, on March 31, 2021, the Company had $3,014,811 in total working capital, comparing to $2,553,140 of total working capital for the same period of 2020.
Three Months ended March 31,
2021
2020
Cash and Cash Equivalents
380,772
326,713
Working Capital (excluding cash and cash equivalents)
2,634,039
2,226,427
Total Working Capital
3,014,811
2,553,140
Net Loss per Share
Basic loss per share is calculated by dividing the loss attributable to stockholders by the weighted-average number of shares outstanding for the period. 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 the earnings (loss) of the Company. Diluted loss per share is computed by dividing the loss available to stockholders by the weighted average number of shares outstanding for the period and dilutive potential shares outstanding unless such dilutive potential shares would result in anti-dilution.
Revenue Recognition
Under Topic 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. 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. We only apply the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. 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. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.
Refunds and returns, which are minimal, are recorded as a reduction of revenue. 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.
Promissory Notes
In January 2020, the Company issued a promissory note to ICT in the principal amount of $439,990 bearing 6% annual interest with a maturity date of January 31, 2023. This note may be prepaid in whole or in part. As of December 31st, 2020, the unpaid principal amount of the Note was $236,627.
In October 2020, the Company issued a promissory note 2 to ICT in the principal amount of $745,438 bearing 6% annual interest with a maturity date of December 31, 2023. This Note may be prepaid in whole or in part. As of December 31st, 2020, the unpaid principal amount of the Note was $639,682.
12
Fair Value of Financial Instruments
The Company applies the accounting guidance under Financial Accounting Standards Board (“FASB”) ASC 820-10, “Fair Value Measurements”, as well as certain related FASB staff positions. This guidance defines fair value as the price that would be received from m selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact business and considers assumptions that marketplace participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.
The guidance also establishes a fair value hierarchy for measurements of fair value as follows:
☐
Level 1 - quoted market prices in active markets for identical assets or liabilities.
☐
Level 2 - inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
☐
Level 3 - unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The carrying amount of the Company's financial instruments approximates their fair value as of March 31, 2020, due to the short-term nature of these instruments.
Tax Loss Carryforwards
The Company recognizes deferred tax assets and liabilities for the tax effects of differences between the financial statement and tax basis of assets and liabilities. A valuation allowance is established to reduce the deferred tax assets if it is more likely than not that a deferred tax asset will not be realized.
Off-Balance Sheet Arrangements
During the quarter ended March 31, 2021, we did not engage in any off-balance sheet arrangements as defined in item 303(a)(4) of the SEC’s Regulation S-K.
We do not have 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 that are material to investors.
Recent Accounting Pronouncements
In June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation”. The update removes all incremental financial reporting requirements from GAAP for development stage entities, including the removal of Topic 915 from the FASB Accounting Standards Codification. In addition, the update adds an example disclosure in Risks and Uncertainties (Topic 275) to illustrate one way that an entity that has not begun planned principal operations could provide information about the risks and uncertainties related to the company’s current activities. Furthermore, the update removes an exception provided to development stage entities in Consolidations (Topic 810) for determining whether an entity is a variable interest entity-which may change the consolidation analysis, consolidation decision, and disclosure requirements for a company that has an interest in a company in the development stage. The update is effective for the annual reporting periods beginning after December 15, 2014, including interim periods therein. Early application with the first annual reporting period or interim period for which the entity’s financial statements have not yet been issued (Public business entities) or made available for issuance (other entities). The Company adopted this pronouncement for the year ended December 31, 2014.
In June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-12, “Compensation – Stock Compensation ( Topic 718 ); Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period”. The amendments in this ASU apply to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. For all entities, the amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. Entities may apply the amendments in this ASU either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. If retrospective transition is adopted, the cumulative effect of applying this Update as of the beginning of the earliest annual period presented in the financial statements should be recognized as an adjustment to the opening retained earnings balance at that date. Additionally, if retrospective transition is adopted, an entity may use hindsight in measuring and recognizing the compensation cost. This updated guidance is not expected to have a material impact on our results of operations, cash flows or financial condition. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.
13
In August 2014, the FASB issued Accounting Standards Update “ASU” 2014-15 on “Presentation of Financial Statements Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments in this Update provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.
All other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable.

NOTE 3 – RELATED PARTY TRANSACTIONS
There were no related party transactions recorded in three months ended March 31 2021.
NOTE 4 – STOCKHOLDERS' DEFICIT
As of March 31, 2021, the Company did not have a stockholder deficit. Stockholder equity as of March 31, 2021, was $628,547.
NOTE 5 – COMMITMENTS AND CONTINGENCIES
The Company has committed to ICT Investments to sublease 18,000 SF of manufacturing space with the monthly cost of $14,377.50 per months. The sub lease commitment expires on October 20, 2021.
NOTE 6 – ADVANCES
During its operations in the quarter ended March 31, 2021, the Company did not accrue any costs which were not paid through the cash proceeds or the sale of capital stock.
NOTE 7 – SUBSEQUENT EVENTS
None.
14
ITEM 2. M ANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited financial statements and the notes to those financial statements appearing elsewhere 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. In light of 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.
Corporation Information
Laser Photonics Corporation was formed under the laws of Wyoming on November 8, 2019. We changed our domicile to Delaware on March 5, 2021. We are a vertically integrated manufacturing company for photonics based industrial products and solutions, primarily disruptive laser cleaning 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.

Our principal executive offices are located at 1101 N Keller Rd, Orlando FL, 32810, and our telephone number is (407) 804 1000. Our website address is www.laserphotonics.com. The Company’s annual reports, quarterly reports, current reports on Form 8-K and amendments to such reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”), and other information related to the Company, are available, free of charge, on that website as soon as we electronically file those documents with, or otherwise furnish them to, the SEC. The Company’s website and the information contained therein, or connected thereto, are not and are not intended to be incorporated into this Quarterly Report on Form 10-Q.
The Company’s accounting year end is December 31.
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 the laser equipment. As a result, we are developing a group of standardized laser cutting equipment that we have named the Laser Tower™ material processing family of equipment that we believe represents a new generation of high power laser cutting systems that will be affordable to more than a million small and mid- size companies.
Critical Accounting Policies
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts in the accompanying consolidated financial statements and related notes. These estimates and assumptions have a significant impact on our financial statements. Actual results could differ materially from those estimates. Critical accounting policies are those that require the most subjective and complex judgments, often employing the use of estimates about the effect of matters that are inherently uncertain. Our significant accounting policies are disclosed in Note 1 to the Financial Statements included in this Quarterly Report on Form 10-Q. However, we do not believe that there are any alternative methods of accounting for our operations that would have a material effect on our financial statements.
CORONAVIRUS AID, RELIEF AND ECONOMIC SECURITY ACT
On March 27, 2020, the U.S. Government enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The CARES Act includes various income and payroll tax provisions. The Company has analyzed the tax provisions of the CARES Act and determined they could have a significant financial impact on our financial statements.
On April 27, 2020, the Company received a First Draw loan in the amount of $198,750 pursuant to the Paycheck Protection Program (the “PPP”) under the CARES Act, and on March 26, 2021, the Company received a Second Draw loan from Axiom Bank, N.A., headquartered in Central Florida, in the amount of $198,750 pursuant to the Paycheck Protection Program (the “PPP”) under the CARES Act. The total aggregate amount of PPP Loans received by the company by March 31, 2021 was $397,500. Under the terms of the PPP, PPP loans and accrued interest are forgivable after eight weeks as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the eight-week period. The Company intends to use the loan proceeds for purposes consistent with the PPP and anticipates that a majority of the loan amount will be forgiven, but no assurance can be given that the Company will not take actions that could cause the Company to be ineligible for forgiveness of some portion of the loan. The unforgiven portion of the loan is payable over two years at an interest rate of 1%, with a deferral of payments for the first six months.
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Liquidity and Capital Resources
For the three months ended March 31, 2021, our liquidity needs were met through revenues received from sales and the financial support of the ICT affiliated companies.
For the three months ended March 31, 2021, the Company’s liquidity needs were met through the financing activity.
The following is a summary of the Company’s cash flows provided by (used in) operating, investing and financing activities:
For three Months ending March 31,
2021
2020
OPERATING ACTIVITIES
Net Income
182,003.21
-155,650.99
Net cash provided by Operating Activities
-171,550.36
-363,724.74
Net cash provided by Investing Activities
77,317.73
-151,853.66
Net cash provided by Financing Activities
148,291.13
557,803.21
Net cash increase for period
54,058.50
42,224.81
Cash at beginning of period
326,713.39
0.00
Cash at end of period
380,771.89
42,224.81
As of March 31, 2021, the Company had $ 380,772 in cash, $ 2,606,429 in Current assets (without cash and cash equivalents) and $353,162 in current liabilities.
As a result, on March 31, 2021, the Company had $3,014,811 in total working capital, compared to $2,553,140 of total working capital for the same period in 2020.
Three Months ended March 31,
2021
2020
Cash and Cash Equivalents
380,772
326,713
Working Capital (excluding cash and cash equivalents)
2,634,039
2,226,427
Total Working Capital
3,014,811
2,553,140
We will have to meet all the financial disclosure and reporting requirements associated with being a publicly reporting company. Our management will have to spend additional time on policies and procedures to make sure it is compliant with various regulatory requirements, especially that of Section 404 of the Sarbanes-Oxley Act of 2002. This additional corporate governance time required of management could limit the amount of time our management has to implement our business plan and may delay our anticipated growth plans.
Quantitative and Qualitative Disclosures About Market Risk.
We have not utilized any derivative financial instruments such as futures contracts, options and swaps, forward foreign exchange contracts or interest rate swaps and futures. We believe that adequate controls are in place to monitor any hedging activities. We do not have any borrowings and, consequently, we are not affected by changes in market interest rates. We do not currently have any sales or own assets and operate facilities in countries outside the United States and, consequently, we are not affected by foreign currency fluctuations or exchange rate changes. Overall, 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.
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Promissory Notes
In January 2020, the Company issued a promissory note to ICT in the principal amount of $439,990 bearing 6% annual interest with a maturity date of January 31, 2023. This Note may be prepaid in whole or in part. As of March 31, 2021, the unpaid principal amount of the Note was $337,457.
Lease Liability
As of March 31, 2021, the amount of the recorded lease liability less the current portion was $43,855.
The original maturity date of our facility operating lease is November 1, 2021. However, due to the impact of COVID 19, we reached an agreement with the landlord to defer two monthly payments to the end of the lease. Those lease liabilities were booked as deferred lease payments under long term liabilities.
The maturity amounts of our lease liabilities are as follows:
Year Ending December 31
Operating leases
2021
$ 138,067
2022
$ 15,100
Deferred rent
$ 28,755
Total lease payments
$ 181,922
Less imputed interest
$ -
Total
$ 181,922
As of
3/31/2021
Operating leases:
Operating lease right-of-use asset
$ 153,167
Current operating lease liability
$ 138,067
Operating lease liability - less current portion
$ 43,855
Total operating lease liability
$ 181,922
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Off-Balance Sheet Arrangements
We have not entered into 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.
Results of Operations
For the three months ended March 31, 2021
Revenues
We generate revenues through sales of our laser blasting and laser cleaning products, particularly with introduction of new models covering the whole range of Roughing, Conditioning and Finishing laser systems, including laser blasting systems cabinets 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 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.
Sales of our products are generally recognized upon shipment, provided that no obligations remain and collection of the receivable is reasonably assured.
During the three months ended March 31, 2021, we recognized revenue of $976,025, as compared to $177,925 in revenue recognized during the same period in 2020, an increase of $798,099. The increase is primarily due to increase of Roughing high power 2000CTH model unit sales in the first quarter of 2021, and increased recognition and approval of Laser blasting by leading US Agencies and Industries.
Three Months ended
March 31,
2021
March 31,
2020
Revenue
976,025
177,925
Our rent expenses for the three months ended March 31, 2021 totaled $43,133 as compared to $43,162for the same period in 2020.
Our payroll expenses for the three months ended March 31, 2021 totaled $253,560 as compared to $189,491 for the same period in 2020 increased by $64,068 due to hiring more personnel mainly for system assembly operation.
In the three months ended March 31, 2021, our net income was $182,003 compared to net Loss of $(155,651) in the same period of 2020.
We are entering into laser equipment sales agreements with customers for specific equipment based upon purchase orders and our standard terms and conditions of sale.
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 largest sales were to AMMO, Blue Origin, SPX, Illumina, and Excet c/o Naval Research Laboratory.
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Revenue Recognition
We generate revenue from the production and sale of laser equipment, OEM Laser Products and Service and Repair. We recognize revenue according to ASC 606. When the customer obtains control over the promised equipment or services, we record revenue in the amount of consideration that we receive or can expect to receive in exchange for those goods and services. The Company applies the following five-step model to determine revenue recognition:
●
Identification of a contract with a customer
●
Identification of the performance obligations in the contact
●
determination of the transaction price
●
allocation of the transaction price to the separate performance allocation
●
recognition of revenue when performance obligations are satisfied
The Company only applies the five-step model when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception and once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. Our contracts contain a single performance obligation and the entire transaction price is allocated to the single performance obligation. We recognize as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Accordingly, we recognize revenues (net) when the customer obtains control of the Company’s product, which typically occurs upon shipment of the product.
The Company recorded revenues when the following criteria were met: (i) persuasive evidence of an arrangement existed; (ii) delivery had occurred; (iii) the price to the customer was fixed or determinable; and (iv) collection of the sales price was reasonably assured.  Delivery occurred when goods were shipped and title and risk of loss were passed to the customer.  Revenue was deferred in all instances where the earnings process was incomplete.  The Company recognized revenue from distribution sales when all contingencies were satisfied and upon persuasive evidence of a sale to end users until such time that historical sell through ratios had been developed.  Payments received before all of the relevant criteria for revenue recognition were satisfied were recorded as deferred revenue in the accompanying balance sheets.  Revenues and costs of revenues from consulting contracts were recognized during the period in which the service was performed.  All revenues were reported net of any sales discounts or taxes.
The Company also applies the percentage-of-completion method to certain arrangements covered under ASC 360, when the sale has been consummated, when we have transferred the usual risks and rewards of ownership to the buyer, the initial or continuing investment criteria have been met, we have the ability to estimate our costs and progress toward completion, and other revenue recognition criteria have been met. Such estimates include significant judgment. Depending on the value of the initial and continuing payment commitment by the buyer, we may align our revenue recognition and release of project assets to cost of sales with the receipt of payment from the buyer for sales arrangements accounted for under ASC 360.
The Company recognizes revenue from contracts when specific progress defined by contract terms are met, or when the contract has been completed to specifications. The Company recognizes revenue for product when shipped. Contracts or purchase orders, according to the terms and conditions of the sale, are not cancellable and deposits are not refundable unless the Company cannot perform on the contract. The Company has no obligation to provide upgrades, enhancements, or customer support subsequent to the sale, other than warranty.
Refunds and returns, which are minimal, are recorded as a reduction of revenue. Unshipped product on received purchase orders by customers prior to our satisfying the above criteria are recorded as deferred revenue in the balance sheets.
All revenues were reported net of any sales discounts or taxes.
Cost of Goods Sold
Our cost of goods sold includes the cost of raw materials and components for manufacturing laser systems, OEM laser modules, consists of different electronic and optical components such as optical generators, scan heads, tempered glass, protective back sheet, semiconductor laser cells, 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. Our cost of goods sold does not includes direct labor for the manufacturing and manufacturing overhead such as engineering, equipment maintenance, quality and production control, and procurement costs. Cost of goods sold dose not includes depreciation of manufacturing plant and equipment and facility-related expenses. In addition, we accrue warranty costs to our cost of sales.
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. This expected decrease in cost for laser technology would be partially offset during periods in which we underutilize manufacturing capacity.
As of March 31, 2021, we recorded our cost of goods sold at $214,227 for the three-month period.
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Gross Profit
Gross profit 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-up of production on new products.
For the three months ending March 31, 2021 and 2020, we recorded gross profit of $623,988 and $120,606, respectively.
Operating Expenses
Selling, General and Administrative
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. Over time, we expect selling, general and administrative expense to decline as a percentage of net sales as our net sales increase.
Our business has certain of its own dedicated administrative key functions, such as accounting, legal, finance, project finance, human resources, procurement, and marketing. Costs for such functions are recorded and included within selling, general and administrative costs for our systems segment. Our corporate key functions consist primarily of company-wide corporate tax, corporate treasury, corporate accounting/finance, corporate legal, investor relations, corporate communications, and executive management functions.
March 31,
2021
March 31,
2020
Expense
Depreciation Expense
39,930
6,602
G&A Expense
105,295
37,002
Payroll Expenses
253,560
189,491
Rent Expense
43,133
43,162
Tax
68
0
Total Expense
441,986
276,257
For the three months ending March 31, 2021 and 2020, we recorded our total expense as $441,986 and $276,257 accordingly.
Research and Development
Research and development expenses consist primarily of salaries and personnel-related costs, the cost of products, materials, and outside services used in our process, and product research and development activities. We acquire equipment for general use in further process developments and record the depreciation of this equipment as research and development expense.
We maintain a number of programs and activities to improve our technology and processes in order to enhance the performance and reduce the costs of our Cleaning Laser modules.
All our R&D expenses for the period of three months ending March 31 2021 were expensed and not booked as a separate line item. We intent to establish a separate accounting for R&D expenses in the near future.
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Facility
We are leasing our manufacturing facility from ICT with monthly payments and recording those expenses as rent expense. On January 1, 2020, we entered a sub-lease with ICT Investments for 18,000 sf of manufacturing space at a rate of $14,377 per month.
For the three and six months ended March 31, 2021, we recorded our rent expense of $43,133 and $86,294, respectively.
Our facility is currently equipped with three of our latest advanced laser cleaning demonstration models. It has a materials stock room, ramp and high dock in the warehouse with loading and moving equipment. It also has a machine shop, electronic assembly, and equipment assembly area.
Foreign Currency Gain (Loss)
Foreign currency gain (loss) consists of gains and losses resulting from conducting transactions denominated in currencies other than our functional currencies. As of March 31, 2021, we have not incurred any foreign currency gain (loss).
Interest Expense, Net
Interest expense, net of amounts capitalized, 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.
Income Tax Expense
Income taxes are imposed on our income by taxing authorities in the various jurisdictions in which we operate, principally the United States.
Critical Accounting Polices and Estimates
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at dates of the financial statements and the reported amounts of revenue and expenses during the periods. Actual results could differ from these estimates. Our significant estimates and assumptions include depreciation and the fair value of our stock, stock-based compensation, debt discount and the valuation allowance relating to the Company’s deferred tax assets.
Recent Accounting Pronouncements
In February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements to enable users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. ASU No. 2018-11, Leases (Topic 842): Targeted Improvements was issued by the FASB in July 2018 and allows for a cumulative-effect adjustment transition method of adoption. The new guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those years.
We adopted ASU 2016-02 effective as of January 1, 2020 utilizing the cumulative-effect adjustment transition method of adoption, which resulted in the recognition on our balance sheet as of March 31, 2021 of $282,565 of right-of-use assets for operating leases.
The adoption of ASU 2016-02 also required us to include any initial direct costs, which are incremental costs that would not have been incurred had the lease not been obtained, in the right-of-use assets. The recognition of these costs in connection with our adoption of this guidance did not have a material impact on our financial statements.
Amounts related to our reporting segment information for the three and six months ended March 31, 2021 have been restated throughout this Quarterly Report on Form 10-Q to reflect the changes in our reporting segments.
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In June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation”. The update removes all incremental financial reporting requirements from GAAP for development stage entities, including the removal of Topic 915 from the FASB Accounting Standards Codification. In addition, the update adds an example disclosure in Risks and Uncertainties (Topic 275) to illustrate one way that an entity that has not begun planned principal operations could provide information about the risks and uncertainties related to the company’s current activities. Furthermore, the update removes an exception provided to development stage entities in Consolidations (Topic 810) for determining whether an entity is a variable interest entity-which may change the consolidation analysis, consolidation decision, and disclosure requirements for a company that has an interest in a company in the development stage. The update is effective for the annual reporting periods beginning after December 15, 2014, including interim periods therein. Early application with the first annual reporting period or interim period for which the entity’s financial statements have not yet been issued (Public business entities) or made available for issuance (other entities). The Company adopted this pronouncement for the year ended December 31, 2014.
In June 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-12, “Compensation – Stock Compensation ( Topic 718 ); Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period”. The amendments in this ASU apply to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. For all entities, the amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. Entities may apply the amendments in this ASU either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. If retrospective transition is adopted, the cumulative effect of applying this Update as of the beginning of the earliest annual period presented in the financial statements should be recognized as an adjustment to the opening retained earnings balance at that date. Additionally, if retrospective transition is adopted, an entity may use hindsight in measuring and recognizing the compensation cost. This updated guidance is not expected to have a material impact on our results of operations, cash flows or financial condition. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.
In August 2014, the FASB issued Accounting Standards Update “ASU” 2014-15 on “Presentation of Financial Statements Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments in this Update provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.
All other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable.
Off-Balance Sheet Arrangements
As of March 31, 2021, we did not have any off-balance sheet arrangements.
Subsequent Events
The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q and determined that there have been no events that have occurred that would require adjustments to our disclosures in the consolidated financial statements.
ITEM 3. Q UANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).
We have not utilized any derivative financial instruments such as futures contracts, options and swaps, forward foreign exchange contracts or interest rate swaps and futures. We believe that adequate controls are in place to monitor any hedging activities. We do not have any borrowings and, consequently, we are not affected by changes in market interest rates. We do not currently have any sales or own assets and operate facilities in countries outside the United States and, consequently, we are not affected by foreign currency fluctuations or exchange rate changes. Overall, 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.
22
ITEM 4. C ONTROLS AND PROCEDURES
Disclosures Control and Procedures
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:
●
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;
●
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
●
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.
As of March 31, 2021, our President evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q. Disclosure controls and procedure include, without limitations, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure. Our management is responsible for monitoring the process pursuant to which information is gathered and analyze such information to determine the extent to which such information requires disclosure in the reports filed with the Securities and Exchange Commission. Based on such evaluation, our President has concluded that as of March 31, 2021, the Company’s disclosure controls and procedures were effective.
Changes in internal controls over financial reporting
There was no change in our internal controls over financial reporting that occurred during the period covered by this Report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
This quarterly report does not include an attestation report of the Company’s registered independent public accounting firm regarding internal control over financial reporting.  Management’s report was not subject to attestation by the Company’s registered independent public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this quarter report on Form 10-Q.
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P ART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
We are not involved in any legal proceedings, including routine litigation arising in the normal course of business that we believe will have a material adverse effect on our business, financial condition or results of operations.
ITEM 1A. RISK FACTORS
Not applicable to a smaller reporting company.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On January 1, 2020, the Company purchased from ICT Investments certain capital manufacturing equipment valued at $158,456 which the Company will use in its business in exchange for 900,000 shares of its common stock.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.

ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXIBITS.
Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive and financial officer
Section 1350 Certification of principal executive officer and principal financial and accounting officer
101*
XBRL data files of Financial Statements and Notes contained in this Quarterly Report on Form 10-Q.
* In accordance with Regulation S-T, the Interactive Data Files in Exhibit 101 to the Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed.”
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S IGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Laser Photonics Corporation
By:
/s/ Wayne Tupuola
Name:
Wayne Tupuola
Title:
President
(Principal Executive and Financial Officer)
Date: May 24, 2021
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TABLE OF CONTENTS