What changed in this filing

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Item 1. Financial Statements

2024-08-02 compared with 2024-05-07 · 173 added, 98 removed, 241 unchanged (53% of the section changed)

2 unchanged sentences

Balance Sheets (Unaudited)

March 30, 2024

Current assets:

Cash and cash equivalents

$ 8,667,728 $ 8,813,626

Marketable securities, at fair value

Accounts receivable-trade, net

3,848,635 4,389,155

Accounts receivable-other

27,490 83,191

Inventories, net

4,611,460 4,581,930

Prepaid expenses and other current assets

391,953 276,349

Total current assets

17,547,266 18,144,251

Property and equipment:

Production equipment

11,155,183 11,271,982

Furniture and office equipment

952,883 952,883

Leasehold improvements

985,649 985,649

13,093,715 13,210,514

Accumulated depreciation and amortization

( 11,581,885 ) ( 11,936,004 )

Construction in progress

206,250 281,629

Net property and equipment

1,718,080 1,556,139

Right-of-use lease asset (note 4, leases)

297,000 332,000

Deferred taxes

1,609,982 1,569,726

$ 21,172,328 21,602,116

Right-of-use lease asset

Deferred taxes, net

See accompanying notes to financial statements.

CPS TECHNOLOGIES CORP.

Balance Sheets (Unaudited)

LIABILITIES AND STOCKHOLDERS` EQUITY

19 unchanged sentences

3,649,467 4,280,142

Commitments & Contingencies

Commitments and contingencies (note 6)

Stockholders` equity:

1 unchanged sentence

issued 14,601,487 shares;

outstanding 14,519,215 shares at each March 30, 2024 and December 30, 2023

outstanding 14,519,215 shares at each June 29, 2024 and December 30, 2023

146,015 146,015

1 unchanged sentence

40,386,335 40,180,893

Accumulated other comprehensive income

Accumulated deficit

( 23,852,254 ) ( 22,754,796 )

Less cost of 82,272 common shares repurchased at each March 30, 2024 and December 30, 2023

Less cost of 82,272 common shares repurchased at each June 29, 2024 and December 30, 2023

( 250,138 ) ( 250,138 )

5 unchanged sentences

CPS TECHNOLOGIES CORP.

Statements of Operations (Unaudited)

Fiscal Quarters Ended

March 30, 2024

April 1, 2023

Statements of Operations and Other Comprehensive Income (Unaudited)

Three Months Ended

Six Months Ended

Product sales

$ 5,030,313 $ 7,418,138 $ 10,942,947 $ 14,518,405

Total revenues

5,030,313 7,418,138 10,942,947 14,518,405

Cost of product sales

5,260,305 5,221,879 10,266,629 10,077,444

( 229,992 ) 2,196,259 676,318 4,440,961

Selling, general, and administrative expense

Operating income (loss)

Other income, net

Income (loss) before taxes

1,084,995 1,465,349 2,250,917 3,015,871

Income (loss) from operations

( 1,314,987 ) 730,910 ( 1,574,599 ) 1,425,090

Interest income (expense), net

90,851 79,652 170,021 95,242

Net income (loss) before income tax

( 1,224,136 ) 810,562 ( 1,404,578 ) 1,520,332

Income tax provision (benefit)

( 269,832 ) 210,058 ( 307,120 ) 460,628

Net income (loss)

$ ( 954,304 ) $ 600,503 $ ( 1,097,458 ) $ 1,059,704

Other comprehensive income

Net unrealized gains on available for sale securities

8,701 -- 8,701 --

Total other comprehensive income

8,701 -- 8,701 --

Total comprehensive income (loss) ( 945,603 ) 600,503 ( 1,088,757 ) 1,059,704 )

Net income (loss) per basic common share

$ ( 0.07 ) $ 0.04 $ ( 0.08 ) $ 0.07

Weighted average number of basic common shares outstanding

14,519,215 14,493,970 14,519,215 14,473,128

Net income (loss) per diluted common share

$ ( 0.07 ) $ 0.04 $ ( 0.08 ) $ 0.07

Weighted average number of diluted common shares outstanding

14, 519,215 14,621,929 14,519,215 14,630,765

See accompanying notes to financial statements.

CPS TECHNOLOGIES CORPORATION

CPS TECHNOLOGIES CORP.

STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

FOR THE THREE MONTHS ENDED March 30, 2024 AND April 1, 2023

FOR THE THREE AND SIX MONTHS ENDED JUNE 29, 2024 AND JULY 1, 2023

other comprehensive

stockholders'

Balance at December 30, 2023

Share-based compensation expense

Balance at March 30, 2024

Share-based compensation expense

Other comprehensive income

Balance at June 29, 2024

other comprehensive

stockholders'

Balance at December 30, 2023

Share-based compensation expense

Employee options exercises

Other comprehensive income

Balance at June 29, 2024

stockholders'

shares issued

Balance at April 1, 2023

Share-based compensation expense

Employee option exercises

Balance at July 1, 2023

stockholders'

shares issued

Balance at December 31, 2022

Share-based compensation expense

Employee options Exercised

Balance at July 1, 2023

See accompanying notes to financial statements.

1 unchanged sentence

Statements of Cash Flows (Unaudited)

Fiscal Quarters Ended

Six Months Ended

Cash flows from operating activities:

13 unchanged sentences

Purchases of property and equipment

Purchase of marketable securities

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from exercise of employee stock options

Proceeds from exercise of employee stock options, net of repurchases

Payments on note payable

Net cash used in financing activities

Net decrease in cash and cash equivalents

Net cash provided by (used in) financing activities

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

13 unchanged sentences

Using its proprietary MMC technology, the Company also produces light-weight armor, particularly for extreme environments and heavy threat levels.

The Company also engages in research and development, in some cases government funded and in others internally funded, focused on developing new products in response to customer requirements.

These products expand our offerings in existing markets and enable penetration into new markets.

The Company sells into several end markets including the wireless communications infrastructure market, high-performance microprocessor market, motor controller market, and other microelectronic and defense markets.

6 unchanged sentences

The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

( 3 ) Net Income (Loss) Per Common and Common Equivalent Share

Basic net income (loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period.

Diluted net income (loss) per common share is calculated by dividing net income (loss) by the sum of the weighted average number of common shares plus additional common shares that would have been outstanding if potential dilutive common shares had been issued for granted stock options and stock purchase rights.

Had there been a profit in Q1 2024, the dilutive effect would have been 74,285 shares.

( 3 ) Marketable Securities

Investments consist of U.S.

Treasury Bills with maturities up to one year.

Since it is not management’s intention to hold these debt securities until the maturity dates, these have been classified as available-for-sale (“AFS”) and are recorded on the balance sheet at fair value, with changes in fair value recorded as a component of other comprehensive income.

( 4 ) Fair value of Marketable Securities

ASC 820, Fair Value Measurements (“ASC 820” ) states that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability.

The three -tiered fair value hierarchy, which prioritizes which inputs should be used in measuring fair value, is comprised of:

(Level I) observable inputs such as quoted prices in active markets;

(Level II) inputs other than quoted prices in active markets that are observable either directly or indirectly and (Level III) unobservable inputs for which there is little or no market data.

The fair value hierarchy requires the use of observable market data when available in determining fair value.

CPS’ marketable securities consist solely of US Government bonds with a maturity of 12 months or less and which fall under level II of the fair value hierarchy.

The value of these bonds as of June 29, 2024 was $ 758,701 .

CPS held no investments in marketable securities as of December 30, 2023.

June 29, 2024

December 30, 2023

Unrealized gain

Total fair value

( 5 ) Net Income Per Common and Common Equivalent Share

Basic net income per common share is calculated by dividing net income by the weighted average number of common shares outstanding during the period.

Diluted net income per common share is calculated by dividing net income by the sum of the weighted average number of common shares plus additional common shares that would have been outstanding if potential dilutive common shares had been issued for granted stock options and stock purchase rights.

Common stock equivalents are excluded from the diluted calculations when a net loss is incurred as they would be anti-dilutive.

Had there been a profit in Q2 2024, the dilutive effect would have been 29,254 shares.

The following table presents the calculation of both basic and diluted EPS:

Three Months Ended

Six Months Ended

Basic EPS Computation:

1 unchanged sentence

$ ( 954,304 ) $ 600,503 $ ( 1,097,458 ) $ 1,059,704

Weighted average common shares outstanding

Weighted average

Common shares

14,519,215 14,493,970 14,519,215 14,473,128

3 unchanged sentences

$ ( 954,304 ) $ 600,503 $ ( 1,097,458 ) $ 1,059,704

Weighted average common shares outstanding 14,519,215 14,452,284

Weighted average

Common shares

14,519,215 14,493,970 14,519,215 14,473,128

Dilutive effect of stock options

1 unchanged sentence

14,519,215 14,621,929 14,519,215 14,630,765

$ ( 0.07 ) $ 0.04 $ ( 0.08 ) $ 0.07

( 6 ) Commitments & Contingencies

3 unchanged sentences

None of these equipment leases have been capitalized as the Company elected an accounting policy for short-term leases, which allows lessees to avoid recognizing right-of-use assets and liabilities for leases with terms of 12 months or fewer.

The real estate lease expiring in 2026 (the “Norton facility lease”) is included as a right-of-use lease asset and corresponding lease liability (current and noncurrent portions) on the balance sheet.

This asset and liability was recognized on March 30, 2024 based on the present value of lease payments over the lease term using the Company’s incremental borrowing rate at commencement date.

The real estate lease expiring in 2026 (the “Norton facility lease”) is included as a right-of-use lease asset and corresponding lease liability on the balance sheet.

This asset and liability was recognized based on the present value of lease payments over the lease term using the Company’s incremental borrowing rate at commencement date.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

2 unchanged sentences

The Company also has an option to renew the lease starting in March 2026 through February 2032.

The Company is not reasonably certain these extensions will be exercised at this time, and therefore are not included in the lease asset or liability.

Annual rental payments range from $ 160 thousand to $ 165 thousand through maturity.

The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s capitalized operating leases as of March 30, 2024

The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s capitalized operating lease as of June 29, 2024:

(Dollars in Thousands)

June 29, 2024

Maturity of capitalized lease liabilities

Remaining 2024

Lease payments

Total undiscounted operating lease payments

6 unchanged sentences

Other Information

Weighted-average remaining lease term for capitalized operating leases (in months)

Weighted-average discount rate for capitalized operating leases

Remaining lease term for capitalized operating lease (months)

Discount rate for capitalized operating leases

Operating Lease Costs and Cash Flows

Operating lease cost and cash paid was $ 41 thousand during the first quarter of 2024.

This cost is related to its long-term operating lease.

Operating lease cost and cash paid was $ 41 thousand during the second quarter of 2024 and $ 82 thousand for the six months ended June 29, 2024.

These costs are related to its long-term operating lease.

All other short-term leases were immaterial.

7 unchanged sentences

The company uses the Black-Scholes option pricing model to determine the fair value of the stock options granted.

During the quarters ended March 30, 2024 and April 1, 2023, a total of 135,500 and 0 stock options, respectively, were granted to employees under the Company’s 2020 Equity Incentive Plan (the “Plan”) and a total of 75,000 and 50,000 stock options, respectively, were granted to outside directors during the quarters ended March 30, 2024 and April 1, 2023.

During the quarter ended March 30, 2024, there were 0 options exercised.

During the quarter ended April 1, 2023, there were 7,001 options exercised and corresponding shares issued at a weighted average price of $ 1.47 .

During the quarter ended March 30, 2024, the Company repurchased 0 shares for employees to facilitate their exercise of stock options.

During the quarter ended April 1, 2023, the Company repurchased 285 shares for employees to facilitate their exercise of stock options.

There were also 1,097,900 options outstanding at a weighted average price of $ 2.61 with a weighted average remaining contractual term of 7.06 years as of March 30, 2024 and there were 582,800 shares exercisable at a weighted average price of $ 2.44 with a weighted average remaining term of 5.3 years.

There were 1,004,400 options outstanding at a weighted average price of $ 2.51 with a weighted average remaining contractual term of 6.10 years as of April 1, 2023.

During the quarter ended June 29, 2024, no stock options were granted to employees under the Company’s 2020 Equity Incentive Plan Stock Incentive Plan (the “Plan”) and no stock options were granted to outside directors during the quarter ended June 29, 2024 .

During the quarter ended July 1, 2023, a total of 60,000 stock options were granted to employees under the Company’s 2020 Equity Incentive Plan Stock Incentive Plan (the “Plan”) and no stock options were granted to outside directors during the quarter ended July 1, 2023, issued at a weighted average price of $ 2.66 per share.

During the three and six months ended June 29, 2024, there were no options exercised and corresponding shares issued.

During the three and six months ended July 1, 2023, there were 79,000 and 86,001 options exercised and corresponding shares issued at a weighted average price of $ 1.20 and $ 1.22 , respectively.

During the three and six months ended June 29, 2024, the Company did not repurchase any shares for employees to facilitate their exercise of stock options.

During the three and six months ended July 1, 2023, the Company repurchased 24,642 and 24,927 shares, respectively, for employees to facilitate their exercise of stock options.

There were also 1,097,900 options outstanding at a weighted average price of $ 2.61 with a weighted average remaining term of 6.81 years as of June 29, 2024, and there were 610,000 options exercisable at a weighted average price of $ 2.45 with a weighted average remaining term of 5.09 years as of June 29, 2024.

The Plan, as amended, is authorized to issue 1,500,000 shares of common stock.

As of March 30, 2024, there were 638,300 shares available for future grants.

As of March 30, 2024, there was $ 693 thousand of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Plan;

As of June 29, 2024, there were 638,300 shares available for future grants under the 2020 Plan and 236,200 shares outstanding under the 2009 Plan.

As of June 29, 2024, there was $ 648 thousand of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan;

that cost is expected to be recognized over a weighted average period of 2.93 years.

During the quarters ended March 30, 2024 and April 1, 2023, the Company recognized approximately $ 161 thousand and $ 130 thousand, respectively, as shared-based compensation expense related to previously granted shares under the Plan.

During the three and six months ended June 29, 2024, the Company recognized $ 44,480 and $ 205,442 , respectively, as shared-based compensation expense related to previously granted shares under the Plan.

During the three and six months ended July 1, 2023, the Company recognized $ 17,316 and $ 147,757 , respectively, as shared-based compensation expense related to previously granted shares under the Plan.

( 8 ) Inventories

1 unchanged sentence

Raw materials

$ 2,567,758 $ 2,861,333

Work in process

1,579,991 1,493,582

Finished goods

Gross inventory

393,889 537,975

Total inventory

4,541,638 4,892,890

Reserve for obsolescence

( 419,960 ) ( 310,960 )

Inventories, net

$ 4,121,678 $ 4,581,930

( 9 ) Accrued Expenses

1 unchanged sentence

Accrued legal and accounting

$ 67,846 $ 86,000

Accrued payroll and related expenses

246,953 649,201

Accrued product returns 288,000 288,000

Accrued other

Total Accrued Expenses

( 8 ) Revolving Line of Credit

69,054 51,936

$ 671,853 $ 1,075,137

( 10 ) Line of Credit

In May 2023, the Company terminated its $ 3.0 million revolving line of credit (LOC) with Massachusetts Business Development Corporation (BDC).

A new LOC in the amount of $ 3.0 million was entered into with Rockland Trust Company.

The LOC is secured by the accounts receivable and other assets of the Company and has an interest rate of the National Prime Rate as published by the Wall Street Journal ( 8.5 % at March 30, 2024).

On March 30, 2024, the Company had $ 0 of borrowings under this LOC and its borrowing base at the time would have permitted an additional $ 3.0 million to have been borrowed.

The LOC remains in effect until terminated per mutual agreement by both parties.

Total interest expense for Q1 2024 was $ 0 and was $ 0 thousand for Q1 2023.

The LOC is secured by the accounts receivable and other assets of the Company and has an interest rate of the National Prime Rate as published by the Wall Street Journal ( 8.5 % at June 29, 2024) .

On June 29, 2024, the Company had $ 0 of borrowings under this LOC and its borrowing base at the time would have permitted an additional $ 3.0 million to have been borrowed.

The line of credit remains in effect until terminated by mutual agreement of both parties.

( 11 ) Note Payable

1 unchanged sentence

The full amount was financed through a 5 year note payable with a third -party equipment finance company.

The note is collateralized by the equipment and is being paid in monthly installments of $ 4 thousand, consisting of principal plus interest at a fixed rate of 6.47 %.

The note is collateralized by the equipment and is being paid in monthly installments of $ 4 thousand, consisting of principal plus interest at a rate of 6.47 %.

The aggregate maturities of the notes payable based on the payment terms of the agreement are as follows:

Remaining in:

Total interest expense on notes payable during Q1 2024 was $ 825 compared to $ 1,538 in Q1 2023.

Payments due by period

Total interest expense on notes payable during 2024 was $ 1,465 .

( 12 ) Income Taxes

A valuation allowance against deferred tax assets is required to be established or maintained when it is "more likely than not" that all or a portion of deferred tax assets will not be realized.

The Company believes that it is “more likely than not ” that the Company will be able to fully utilize the deferred tax asset.

For the first quarter of 2024 the deferred tax asset was increased $ 40 for the estimated tax benefit on Q1 net loss.

Management has determined that a valuation allowance is not needed as it expects that the deferred tax asset will be fully utilized.

For the three and six months ended June 29, 2024 the deferred tax asset was increased $ 40,256 and $ 307,576 for the estimated tax benefit on Q2 and year to date net losses, respectively

MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

3 unchanged sentences

There are a number of factors that could cause the Company’s actual results to differ materially from those forecasted or projected in such forward-looking statements.

This includes the impact of the Russian invasion of Ukraine and other conflicts and potential conflicts throughout the world, which are discussed in Item 3 of this report.

This includes the impact of the Russian invasion of Ukraine and other conflicts and potential conflicts throughout the world and the impact of a strong dollar on the prices the Company charges to foreign customers, which are discussed in Item 3 of this report.

Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof.

The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements which may be made to reflect events or changed circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Critical Accounting Policies

The critical accounting policies utilized by the Company in preparation of the accompanying financial statements are set forth in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 30, 2023, under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

Critical Accounting Estimates

The critical accounting estimates utilized by the Company in preparation of the accompanying financial statements are set forth in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 30, 2023, under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

There have been no material changes to these policies since December 30, 2023.

7 unchanged sentences

Using its proprietary MMC technology, the Company also produces light-weight vehicle armor, particularly for extreme environments and heavy threat levels.

In addition the Company engages in research and development activities with the goal of developing new products that address challenging customer requirements.

These activities typically leverage the company’s extensive knowledge base in the development and volume manufacturing of advanced materials.

CPS’s products are custom rather than catalog items.

12 unchanged sentences

In March 2007, we changed our name from Ceramics Process Systems Corporation to CPS Technologies Corporation.

Results of Operations for the First Fiscal Quarter of 2024 (Q1 2024) Compared to the First Fiscal Quarter of 2023 (Q1 2023);

Results of Operations for the Second Fiscal Quarter of 2024 (Q2 2024) Compared to the Second Fiscal Quarter of 2023 (Q2 2023);

(all $ in 000 ’ s)

Revenues totaled $5,030 in Q2 2024 compared with $7,418 generated in Q2 2023, a decrease of 32%.

Two factors in particular contributed to this decrease.

One of our largest customers in 2023 significantly reduced their purchases due to their having excess inventory that they are in the process of working down.

Additionally, while we are cautiously optimistic that identified quality issues have been resolved, we continue to run tests which occupy machine time that would otherwise have been spent on production for customers.

Gross margin in Q1 2024 totaled $906 or 15% of sales.

This compares with gross margin in Q1 2023 of $2,245 or 32% of sales.

This decrease was due to the lower sales volumes on fixed costs as well as the aforementioned testing being done on the quality issues.

This decrease was mainly due to the completion of the armor contract for the US Navy in Q2 2024 as compared to 2023.

In addition, one of the Company’s major customers in 2023 significantly reduced their purchases in Q2 due to their having excess inventory that they are in the process of working down.

Gross loss in Q2 2024 totaled $230 or -5% of sales.

This compares with gross profit in Q2 2023 of $2,196 or 30% of sales.

This percentage decrease was due to several factors including the impact of fixed costs on significantly lower revenues, as well as abnormally low production yield levels in some of our hermetic package products.

Selling, general and administrative (SG&A) expenses totaled $1,085 in Q2 2024 compared with SG&A expenses of $1,465 in Q2 2023.

This decrease was due in part to a reduction in variable compensation as well as lower commission expense due to lower revenue numbers and their impact on profitability.

In addition, there are a number of areas in which management has been able to reduce SG&A expenses compared to last year.

This decrease was primarily due to the reduction in variable compensation as a result of weaker results from operations in Q2 2024 as compared to Q2 2023.

In addition, the Company was able to reduce its outside consulting costs.

The Company experienced an operating loss of $1,315 in Q2 2024 compared with an operating profit of $731 in Q2 2023, a decrease of 280%.

This decrease was a result of the decreased gross margin, partially offset by the decrease in SG&A expenses.

Results of Operations for the First Six Months of 2024 Compared to the First Six Months of 2023 (all $ in 000s)

Total revenue was $10,943 in the first half of 2024, a 25% decrease compared with total revenue of $14,518 in the first half of 2023.

This decrease was mainly due to the completion of our armor order for the US Navy in 2024 as compared to 2023.

In addition, one of the Company’s major customers in 2023 significantly reduced their purchases in both Q1 and Q2 due to their having excess inventory that they are in the process of working down.

Gross margin in the first six months of 2024 totaled $676 or 6% of sales.

In the first six months of 2023 gross margin totaled $4,441 or 31% of sales.

This decrease was due to the decrease in revenue and the decreased coverage of our fixed costs, as well as the increased costs incurred by the Company in non-revenue producing activities, designed to increase revenue in the future, including fiber reinforced aluminum and new armor configurations.

Selling, general and administrative (SG&A) expenses were $2,251 during the first six months of 2024, down 25% compared with SG&A expenses of $3,016 in the first six months of 2023.

Decreased variable compensation accruals due to lower 2024 profitability as well as reduced commission and consulting expenses were the primary reasons for this decrease.

During the first half of 2024, the Company had net interest income of $170.

This compares with interest income of $95 realized during the first half of 2023.

The increase in interest income is primarily due to higher interest rates.

In the first six months of 2024 the Company had an operating loss of $1,575 compared with operating income $1,425 in the same period last year.

The net loss for the first six months of 2024 totaled $1,097 versus operating income of $1,060 in the first six months of 2023.

CPS does not rely on raw materials from Ukraine, Russia, Israel or Gaza.

5 unchanged sentences

Some of our larger customers will have pricing agreements, typically for one year, and we must wait for those agreements to end before making any pricing adjustments.

Wage increases are also part of the inflation impact.

We have instituted a combination of wage increases as well as richer benefits, such as the increased 401k match mentioned above, in order to retain the folks making up our workforce.

Further, several of our larger customers buy from our major competitor in Japan.

The devaluation of the Japanese yen related to the US dollar has made it more difficult for us to increase our prices in an amount necessary to fully make up for higher costs.

These factors combine to create a higher degree of uncertainty regarding future financial performance.

Liquidity and Capital Resources (all $ in 000 ’ s unless noted)

The Company’s cash and cash equivalents at March 30, 2024 totaled $8,668.

This compares to cash and cash equivalents at December 30, 2023 of $8,814.

The Company has invested in new equipment to enable us to be more cost effective as well as improving our quality department’s ability to ensure we are shipping better product, going forward.

Accounts receivable at March 30, 2024 totaled $3,876 compared with $4,472 at December 30, 2023.

Days Sales Outstanding (DSO) decreased from 60 days at the end of 2023 to 59 days at the end of Q1 2024.

The accounts receivable balances at December 30, 2023, and March 30, 2024 were both net of an allowance for doubtful accounts of $10.

Inventories totaled $4,611 at March 30, 2024 compared with inventory totaling $4,582 at December 30, 2023.

The Company’s liquid assets at June 29, 2024 consist of cash and cash equivalents of $6,306 and marketable debt securities with a fair value of $759.

This compares to cash and cash equivalents at December 30, 2023 of $8,814 and no marketable debt securities held at December 30, 2023.

The decrease in cash was due primarily to a decrease in working capital, higher expenditures for capital equipment acquired to improve future performance as well as the operating losses incurred in 2024.

Accounts receivable at June 29, 2024 totaled $4,263 compared with $4,472 at December 30, 2023.

Days Sales Outstanding (DSO) increased from 60 days at the end of 2023 to 77 days at the end of Q2 2024.

The increase in DSO was due to several large payments due at the end of Q2 2024 being delayed to the beginning of Q3 2024, as well as significantly higher sales volumes at the end of Q2 2024 as compared to the beginning of Q2 2024.

The accounts receivable balances at December 30, 2023, and June 29, 2024 were both net of an allowance for doubtful accounts of $10.

Inventories totaled $4,122 at June 29, 2024 compared with inventory totaling $4,582 at December 30, 2023.

The inventory turnover in the most recent four quarters ending Q2 2024 was 4.6 times (based on a 5 quarter end average) compared with 4.3 times averaged during the four quarters of 2023.

8 unchanged sentences

The LOC is secured by the accounts receivable and other assets of the Company and has an interest rate of the National Prime Rate as published by the Wall Street Journal.

On March 30, 2024, the Company had $0 of borrowings under this LOC and its borrowing base at the time would have permitted an additional $3.0 million to have been borrowed.

The LOC remains in effect until terminated per mutual agreement by both parties.

On June 29, 2024, the Company had $0 of borrowings under this LOC and its borrowing base at the time would have permitted an additional $3.0 million to have been borrowed.

In March 2020, the company acquired a scanning acoustic microscope for a price of $208 thousand.

The full amount was financed through a 5 year note payable with a financing company.

The note is collateralized by the microscope and is being paid in monthly installments of $4 thousand, consisting of principal plus interest at a fixed rate of 6.47%

The note is collateralized by the microscope and is being paid in monthly installments of $4 thousand, consisting of principal plus interest at a rate of 6.47%

The Company has one real estate lease expiring in February 2026.

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements