LASE Corp. (LASE) Q3 2026 Earnings Call Transcript

Gross Margin — negative 39%, an improvement of 8 percentage points year over year.
• Operating Expenses — $1.8 million, a 34% reduction from $2.8 million in the third quarter of 2025 primarily due to lower general and administrative costs.
• Net Loss — $2.5 million, a 46% improvement versus the $4.7 million loss in the prior year period.
• Cash and Short-term Investments — $7.6 million as of Sept. 30, 2026, representing the highest quarter-end balance since Sept. 2023.
• Equity Financing — $19.6 million in net proceeds raised from equity offerings and warrant transactions during the first nine months of 2026.
• Debt Repayment — $6.4 million in third-party and related party notes repaid during the first nine months of 2026.
• Operating Cash Use — $7.4 million for the first nine months of 2026, with $2.7 million used in the third quarter.
• Year-to-Date Net Sales — $3.9 million compared to $5.8 million in the prior year, reflecting declines in laser cleaning and affiliate sales.
• Laser Cleaning Sales Decline — $1.1 million decrease in products and services contributed to the first half revenue decline.
• Affiliate Net Sales — decreased by $0.8 million during the first nine months of 2026.
• Net Interest Expense — declined 86% year over year following significant debt repayments in 2026.
• Market Strategy — management established a long-term focus on four sectors: defense, pharmaceutical, semiconductor, and industrial.
• Defense Product Introduction — the company plans to introduce the Quantum Bullet Laser Shield Anti-Drone (LSAD) system in late Nov. 2026.
• C2 Integration — the company completed integration of the Quantum Bullet line with the Anduril Lattice command and control platform.
• Pharmaceutical Segment — CMS Laser has orders for next-generation UV marking and anti-counterfeit systems expected to generate revenue in the coming year.
• Industrial Relocation — Beamer Laser manufacturing was relocated from Michigan and integrated into the Lake Mary facility.
• Semiconductor Shipments — the company shipped its first systems utilizing proprietary molecular-level material splitting technology.

Need a quote from a Motley Fool analyst? Email [email protected] • CFO Peterman stated, “substantial doubt remains about our ability to continue as a going concern over the year following the issuance of our third quarter financial statements,” reflecting the assessment disclosed in the company’s 10-Q filing.
• Peterman warned that gross margin and operating cash flow performance still need significant work despite improvements in other metrics.
• Nikitin stated, “this market is still in its infancy, and revenue at this stage is unpredictable,” regarding the emerging counter-drone and directed energy sector.

LASE Corp. reported a 25% increase in quarterly net sales and a 46% reduction in net loss as the company implemented a strategic reevaluation of its core markets and consolidated its Florida operations. Management indicated that the company is transitioning from being a volume manufacturer of industrial laser equipment to focusing on high-return technologies in the research and development and commercialization stages. The strategy prioritizes four sectors: defense, pharmaceutical, semiconductor, and industrial, with a particular focus on developing directed energy systems to replace or complement kinetic weapons. The company also integrated its three core brands—CMS Laser, Laser Photonics, and Beamer Laser—under a unified corporate identity following its name change and acquisition of the LASE.com domain.
• The company integrated its Quantum Bullet anti-drone platform with the Anduril Lattice command and control system to support multi-layered air defense applications.
• Executive Chairman Nikitin stated, “I believe the next major advancement will come from our ability to control laser energy with extraordinary precision, potentially beyond what conventional industrial laser systems can achieve in certain applications.”
• Management indicated that CMS Laser is expanding its pill drilling technology into anti-counterfeit systems for the growing GLP-1 and personalized medication markets.
• The company shipped its first semiconductor systems utilizing proprietary molecular-level material splitting technology, which is intended to replace traditional diamond saws and mechanical tools.
• CFO Peterman stated that the near-term financial goal is to reach operating cash flow breakeven through cost structure optimization and improved production capacity utilization.
• The company consolidated its Orlando and Maitland facilities into the Lake Mary, Florida, location to streamline manufacturing and integrate the Beamer Laser product line.
• Quantum Bullet: The company’s brand name for its directed energy defense platform and anti-drone products.
• C2: Command and Control, the exercise of authority and direction by a designated commander over assigned forces.
• Anduril Lattice: An artificial intelligence-driven software platform used for the command and control of autonomous systems and sensors.
• GLP-1: Glucagon-like peptide-1, a class of medication used for treating type 2 diabetes and obesity that requires specialized pharmaceutical processing.
• Q-switch: An optical component used in lasers to produce high-intensity pulsed light energy.
• Group 1 and Group 2 Drones: Military classifications for small unmanned aircraft systems based on their weight and operating altitude.

Operator: Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the LASE Corp third quarter 2026 earnings conference call. During today’s presentation, all parties will be in a listen-only mode. This conference is being recorded today, Thursday, November 12, 2026. The press release accompanying this conference call was issued before the market opened this morning. On our call today are LASE Founder and Executive Chairman, Dmitriy Nikitin, and Chief Financial Officer, Tim Peterman.

Before we get started, I’d like to note that some of the statements on this call will be forward-looking statements that reflect management’s current expectations about future operating and financial results, including statements regarding the development, testing, launch, commercialization of the company’s directed energy products, the timing and outcome of U.S. government evaluations, potential customer orders, the conversion of the company’s order backlog into revenue, and the company’s strategy, liquidity, and capital resources. Although management believes their expectations and assumptions are reasonable, they remain subject to significant risks and uncertainties. Actual results for future periods may differ materially from what is stated or implied during today’s call.

For more information, please refer to the company’s forward-looking statement section in today’s press release and the risk factors disclosed in the company’s most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q filed with the SEC. At this time, I’d like to turn the call over to LASE Founder and Executive Chairman, Dmitriy Nikitin. Dmitriy, the floor is yours.

Dmitriy Nikitin: Thank you, Lucas, and good morning to our investors. We appreciate you taking time to learn more about our company. Since this is my first discussion with shareholders, I want to begin today by discussing something much bigger than lasers or even the defense industry. I want to draw your attention to quantum mechanics, which is the core of every modern technology, including industrial lasers, directed energy weapons, semiconductors, quantum computing, and pharmaceuticals, and is the driver to our growth strategy. I want to make a few statements. We conducted a strategic reevaluation of our markets and established a long-term strategy that focuses the company with a razor-sharp precision on four of them: defense, pharmaceutical, semiconductor, and industrial.

Quantum technology is the cornerstone for all of four. In defense market, all the future wars will be fought with the directed energy, not with kinetic missiles. The battleground will extend into space, and the targets will be military communication and surveillance systems. If a target can be identified and located, its destruction will be imminent. In a pharmaceutical, GLP-1 therapies derive from advanced DNA and gene research, evolving into slow-release personalized medication in form of pills and capsules, and that evolution is driven by quantum laws. Semiconductor AI chips are all high-density electronic and photonic architecture and require methods that process materials at the molecular level, replacing mechanical tools with quantum technologies.

Lastly, manufacturing and robotics of the future is headed toward additive manufacture, not subtractive, built on the laws and principles of quantum mechanics. All those processes and technologies follow the laws of quantum mechanics, processing at the speed of light, quantum precision at the molecular and atomic level, and quantum-level energy conversion, storage, and discharge. Quantum computing today is taking shape, and together with AI, is about to bring dramatic change to the planet. Every business sector associated with quantum computing and components will experience unprecedented growth. We are shaping the company to be in those business sectors.

We define the core competency of our business as our ability to develop the most advanced product from a conceptual idea through every step of their life cycle, all the way to the revenue-generating stage. We do not intend to be just a volume manufacturer of well-developed industrial laser equipment. We intend to focus on high-growth, high-return products and technologies that are currently in the R&D and commercialization stages. I have been building towards this future for more than 25 years.

I was personally involved in developing and licensing a number of patent-protected technologies and systems, equipment for zero-width cutting of semiconductors at the quantum level, specialized electronic material processing equipment for space exploration projects, and telecommunication fiber, a laser-based landmine sweeping system, and the world’s first high-power fiber laser cutting machine. What is different today is that over the past five years, we have seen an accelerating convergence of quantum technologies with material science, unlocking vast business opportunities in defense, pharmaceutical, industrial, mainly AI and robotics, semiconductor, and quantum component markets, including emerging inexpensive laser counter-drone or C-UAS weapons for Group 1 and Group 2 drones.

I believe the next major advancement will come from our ability to control laser energy with extraordinary precision, potentially beyond what conventional industrial laser systems can achieve in certain applications, and directed to produce highly specific effects on materials, electronics, and physical system that range in size from small drones to a military landmine. Just imagine a 200-gallon barrel suspended in the air and filled with water from a garden hose. It may take 30 minutes to fill the barrel, but you can empty it in a split second, creating a huge energy impact from 200 gallons of water released all at once. This is what happens in the nonlinear crystal inside a quantum device called Q-switch.

It accumulates optical energy and then suddenly discharges it, creating extremely high photon energy level on target that lead to its complete destruction. There are records of clouds being discharged by creating plasma tunnels, of lasers being used to defeat moving objects, and even of highly energetic particle beams creating a massive-like explosion effect on the target surfaces. Unlike conventional impact technologies, which rely on the kinetic energy of moving physical objects to produce an effect, directed energy systems use concentrated electromagnetic energy. Lasers are one example, but the field also includes high-power microwaves, particle beams, and other electromagnetic technologies. We call our directed energy platform Quantum Bullet.

We believe the military conflicts of the future will be conducted with Quantum Bullets replacing kinetic weapons. Over the next five years, I expect directed energy systems to become an increasingly important and pervasive part of modern defense, complementing and, in certain applications, replacing conventional kinetic weapons. The convergence of those technologies could create opportunities difficult to imagine today, and that possibility is what brings me to the vision here at LASE Corp. The future definitely will come, and we intend to be there. Where is LASE today as a business, and why do I believe we are uniquely positioned to capture this opportunity?

Today, we develop advanced laser solutions, serving three established and one emerging markets: pharmaceuticals, semiconductor, and industrial manufacturing, and defense. These businesses represent more than commercial opportunities. They are enabling us to build scalable applications of the underlying technologies and engineering capabilities that we believe will shape the future of directed energy. The third quarter was another period of consolidating our recent acquisitions of product lines and operating companies into one cohesive operation. We completed the relocation of the Beamer Laser product line from Michigan to Florida and its integration into our enterprise resource planning system. We also finished adapting our Lake Mary facility to the needs of our operation and consolidated our Orlando and Maitland facilities into one location.

Most of our products are now at the revenue-generating stage, and our recent purchase orders reflect that. They include Laser Photonics robotic laser cleaning cells, Beamer Laser industrial marking systems, automatic semiconductor wafer marking systems, and in particular, CMS Laser proprietary laser pill drillers for slow release and personalized medication. Starting with pharmaceutical and medical. Since its acquisition and integration, CMS Laser has performed well, supported by its long history of innovation in slow-release or smart pill medications. We are expanding its leading CO2 pill drillers into next-generation UV marking and anti-counterfeit systems for pills, capsules, and liquid gel medication. We have orders in hand from prominent customers that we expect to translate into the revenue of the next year.

We strongly believe the global move toward GLP-1 and personalized slow-release medication is a significant opportunity for CMS Laser, which pioneered this technology two decades ago, and that investment in this area offers attractive growth and strong return on capital for LASE and its shareholders. Moving to semiconductor. This business is beginning to take shape, and we have shipped our first system to customers. Our core competency here is a proprietary exclusive licensed technology for splitting materials on the molecular level. It produces zero-width cutting of brittle materials such as electronic glass for flat panel display industry, optical filters, scanners, infrared camera window, and glass wafers.

In semiconductor wafers, it enables high-speed laser singulation of silicon wafers into individual chip with a narrow heat-affected zone. We believe that in future, all high-density electronics will be separated by methods that work at the molecular and quantum level, not by the diamond saws and scribe-and-break methods widely used today. We intend to take full advantage of our exclusive knowledge and experience in this area and to advance this product from industrial prototype stage to commercial applications and revenue. Now to industrial and robotics. With the Beamer Laser product line relocated and manufacturing restarted in Lake Mary, we are seeing strong booking of individual laser cutting systems.

We also design, manufacture, deliver, and install, and the robotic laser system for manufacture of data center equipment. This brings me to a defense. We have identified counter-drone as a market with an explosive potential, and one where we have accumulated extensive knowledge, experience, and capabilities. Small drones have a big problem, and the economics are simple. Defending against a drone that costs a few hundred dollars with a missile that costs millions is not sustainable. As we advance our capabilities in laser physics, AI-driven computer vision, advanced targeting, tracking, and dynamic focusing using the NVIDIA Jetson Orin chip, near-diffraction-limited energy delivery optics, precision control, and advanced material science.

These innovations together form the part of the technological foundation on our roadmap towards a scalable, affordable, directed energy Quantum Bullet line of product. We have invested heavily in the core development of inexpensive, modular, laser-based anti-drone systems, and we will introduce our first generation Quantum Bullet Laser Shield Anti-Drone, or LSAD system, at I/ITSEC at the end of this month. We believe competing systems lack the key ingredients of an effective directed energy system against group one and group two drones: affordability, quick deployment, field repairability, and flexible configuration. Modern counter-UAS systems, you know, might be scalable and truly modular, tailored to specific tactical requirements, and able to operate from any available power source, including batteries.

Protecting government assets is different from protecting military assets, particularly in active conflict areas. This system should be able to operate as a part of modern multi-layered command and control, or C2, platform, but also be deployed quickly and operate independently without being networked into one. That became possible when the Pentagon introduced the concept of perimeter protection, under which the decision to destroy an intruding drone is made locally by the commanding officer. That single policy decision replaced a slew of complicated technical requirements and made our technological solution a viable business. As a milestone, we have completed the integration of our Quantum Bullet product line with a multi-layered air defense C2 Anduril Lattice platform.

The system can operate in the hunting mode through the C2 integration or fully and independently as a perimeter protection laser weapon. This market is still in its infancy, and revenue at this stage is unpredictable, but we believe our technology, our vision, our cooperation with leading defense contractors, and our prior experience in directed energy laser systems, combined with decades of experience in laser system manufacturing, give us a solid foundation. We believe our experience in AI-enabled machine vision, at-a-distance optical removal, and the precision beam control and steering used in our laser cleaning product will allow us to take a leading position in this market. But what makes LASE particular different is not simply our technology.

It is our strategic freedom to pursue technologies that we believe could disrupt established defense business model built around conventional kinetic weapons. Companies such as Lockheed Martin and other major defense contractors have extraordinary engineering capabilities and resources, but they also have enormous investments in conventional weapon platforms, missile systems, and technologies that directed energy laser weapons could eventually disrupt. We do not face the same legacy business considerations. We do not depend on selling the weapons that our future technologies may replace. We can focus our engineering capital and strategic priorities on developing the next generation of directed energy laser weapons.

Our ambition is not to follow the evolution of directed energy, it is to help lead it with our Quantum Bullet platform. It is important for management to have a vision for the future, but the ability to execute that mission is what ultimately creates value for shareholders, and execution begins with trust. Over the past 60 days, we have taken significant steps to strengthen the foundation of LASE. Since assuming my role as Executive Chairman, I have made improving accountability, transparency, and corporate governance a central priority.

We have strengthened our financial and accounting leadership with experienced and highly qualified personnel, added experienced board members, and worked closely with the board to improve our governing principles, internal controls, board committee charters, financial reporting process, and corporate governance practices. We have also made significant improvements to our investor relationship website in terms of compliance, visibility, and transparency. We simplified our corporate identity by changing our name to LASE Corp., which prepares the company to operate under three brands: CMS Laser Photonics, and Beamer Laser, and through a service agreement with our affiliate, FONON Technologies.

We also acquired the LASE.com domain, and we expect that the company name, stock symbol, and web address that all read LASE will make our marketing more effective and make it easier for investors, customers, and partners to understand who we are and where we are going. This is only the beginning. Our commitment is to deliver timely and accurate SEC filings, maintain strong board oversight, communicate transparently with our shareholders, and establish the financial discipline necessary to support sustainable growth. We will continue this work in the fourth quarter, bring the company to the next level of accountability, transparency, corporate governance, and compliance with SEC and NASDAQ trading requirements.

We understand that investors’ confidence is earned through actions, not promises. Our objective is to build a company where the quality of our governance and financial reporting matches our ambitions in our technology. We have a vision for the future of directed energy. We have technological foundation to pursue it, and we are building the organization, discipline, and accountability necessary to execute it. That is how we intend to earn your trust, create long-term shareholder value, and bring our vision for Quantum Bullet to market. With that, I’ll turn the call over to Tim to discuss our financial performance, the improvements we are making, and our efforts to strengthen the balance sheet.

Tim Peterman: Thank you, Dmitriy, and good morning, everyone. Made solid progress this quarter on three financial fronts. We grew net sales, narrowed our net loss, and strengthened our balance sheet. That said, our gross margin and operating cash flow performance still need significant work. I’ll first walk through our third quarter results, and then I’ll explain our fourth quarter priorities. Third quarter net sales were $1.1 million, up 25% from $0.9 million a year ago. This was the first quarter of year-over-year sales growth since the fourth quarter of 2025. Better execution in production contributed to this increase, and although gross margin improved by 8 percentage points, it was still negative 39%.

For the first nine months of 2026, net sales were $3.9 million compared with $5.8 million last year. Our third quarter net sales growth only partially offset the first half net sales decline, which was primarily driven by a $1.1 million decrease in laser cleaning products and services and a $0.8 million decline in affiliate net sales. Our third quarter operating expenses were $1.8 million, a reduction of 34% from $2.8 million the year before, driven primarily by general and administrative expenses, partially offset by increases in marketing and research and development. Net interest expense declined 86% year-over-year following our 2026 debt repayments.

Our third quarter net loss of $2.5 million was a 46% improvement from the $4.7 million net loss in 2025. Turning to the balance sheet, we ended September with $7.6 million in cash and short-term investments. That was the highest reported quarter-end balance of cash and short-term investments since September 2023 and was the primary driver of our $11 million improvement in working capital in 2026 September compared to prior year. For the first nine months of 2026, we raised $19.6 million in net proceeds from equity offerings and warrant transactions and repaid $6.4 million in third-party and related party notes.

We used $7.4 million of cash in operations during that first nine months, $4.7 million in the first half, and $2.7 million in the third quarter of 2026. I want to close my comments today with this thought. I joined LASE in September, and Dmitriy joined as Executive Chairman in October. We have made solid progress in a short period of time, but we are really just getting started. As we disclosed in the 10-Q, we have not yet changed the company’s view that substantial doubt remains about our ability to continue as a going concern over the year following the issuance of our third quarter financial statements. Our near-term goal is to reach operating cash flow breakeven.

During the fourth quarter, our plan is to focus on establishing a cost structure that is optimized for our level of sales while improving the utilization of our production capacity and establishing more accountable sales processes that are operated by talented sales teams. We plan to do this while strengthening our internal controls and our external reporting processes. In terms of our guidance, we expect to continue to serve our established pharmaceutical, semiconductor, and industrial markets while allocating increasing resources toward defense-related opportunities. Management remains focused on improving operating performance, maintaining financial discipline, strengthening corporate governance, and building a more transparent relationship with our shareholders. Thank you for your time today. Dmitriy, back to you.

Dmitriy Nikitin: Thank you, Tim. Looking ahead, our priorities are clear. First, introduce Quantum Bullet at I/ITSEC trade show later this month and work to convert our engagement with U.S. and allied defense customers into programs and orders. Second, grow our revenue-generating businesses and convert our order book into deliveries and revenue. Third, advance the next generation of technologies with clear gates and disciplined investments. Fourth, integrate our acquisitions and product line into one coherent organization supported by financial controls and governance of a well-run public company. I have spent more than three decades taking laser technologies from an idea to product that customers depend on.

I believe LASE has the technology, the heritage, and the team to do that again in directed energy and to build durable value for our shareholders along the way. To our employees in Lake Mary and across our brands, thank you for your hard work during a period of significant change. To our shareholders, thank you for your patience and your support. To those who will attend I/ITSEC trade show, we look forward to seeing you in Orlando.

Operator: Ladies and gentlemen, this does conclude today’s teleconference. If you have any further questions, you can reach the company’s investor relations at [email protected] or alternatively at [email protected]. With that, I’d like to thank you all for your participation. You may now disconnect your lines at this time, and have a wonderful day.…Read more by Motley Fool Transcribing