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Item 1. Financial Statements

2025-08-01 compared with 2025-05-02 · 187 added, 89 removed, 248 unchanged (53% of the section changed)

ITEM 1 FINANCIAL STATEMENTS (Unaudited)

PS TECHNOLOGIES CORP.

CPS TECHNOLOGIES CORP.

Balance Sheets (Unaudited)

June 28, 2025

Current assets:

13 unchanged sentences

Net property and equipment

Intangible assets

Right-of-use lease asset

15 unchanged sentences

issued 14,661,487 shares;

outstanding 14,525,960 shares at each March 29, 2025 and December 28, 2024

outstanding 14,525,960 shares at each June 28, 2025 and December 28, 2024

Additional paid-in capital

1 unchanged sentence

Accumulated deficit

Less cost of 135,527 common shares repurchased at each March 29, 2025 and December 28, 2024

Less cost of 135,527 common shares repurchased at each June 28, 2025 and December 28, 2024

Total stockholders’ equity

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CPS TECHNOLOGIES CORP.

Statements of Operations and Other Comprehensive Income (Loss)

Fiscal Quarters Ended

March 29, 2025

March 30, 2024

Statements of Operations and Other Comprehensive Income (Loss) (Unaudited)

Three Months Ended

Six Months Ended

Product sales

1 unchanged sentence

Selling, general, and administrative expenses

Operating income (loss)

Income (loss) from operations

Other income, net

Income (loss) before income taxes

Net income (loss) before income taxes

Income tax provision (benefit)

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STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 29, 2025 AND MARCH 30, 2024

Accumulated other comprehensive income

FOR THE THREE AND SIX MONTHS ENDED JUNE 28, 2025 AND JUNE 29, 2024

comprehensive

stockholders’

Balance at March 29, 2025

Share-based compensation expense

Other comprehensive income

Balance at June 28, 2025

comprehensive

stockholders’

Balance at December 28, 2024

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Reclassification adjustment for gains included in net income

Balance at June 28, 2025

comprehensive

stockholders’

Balance at March 30, 2024

Share-based compensation expense

Other comprehensive income

Balance at June 29, 2024

comprehensive

stockholders’

Balance at December 30, 2023

Share-based compensation expense

Balance at March 30, 2024

Other comprehensive income

Balance at June 29, 2024

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:

Net income (loss)

Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:

Adjustments to reconcile net income (loss) to cash used in operating activities:

Depreciation and amortization

Share-based compensation

Deferred taxes

Realized gain on sale of marketable securities

Deferred taxes

Accounts receivable-trade

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Deferred revenue

Net cash provided by (used in) operating activities

Net cash used in operating activities

Cash flows from investing activities:

Purchases of property and equipment

Acquisition cost of patents and trademarks

Proceeds from sale of marketable securities

Purchases of marketable securities

Purchase of marketable securities

Net cash used in investing activities

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( 1 ) Nature of Business

CPS Technologies Corporation (the “Company” or “CPS”) provides advanced material solutions to the electronics, power generation, automotive and other industries.

CPS Technologies Corporation (the “Company” or “CPS”) provides advanced material solutions to the electronics, power generation, automotive, defense and other industries.

The Company’s primary advanced material solution is metal-matrix composites ("MMC") which are a combination of metal and ceramic.

CPS also assembles housings and packages for hybrid circuits.

These housings and packages may include components made of metal-matrix composites or they may include components made of more traditional materials such as aluminum, copper-tungsten, etc.

These housings and packages may include components made of metal-matrix composites or they may include components made of more traditional materials such as aluminum.

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

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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.

( 2 ) Summary of Significant Accounting Policies

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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 March 29, 2025 was $ 1,039,714 and, as of December 28, 2024, was $ 1,031,001 .

The value of these bonds as of June 28, 2025 was $ 1,044,925 and was $ 1,031,001 as of December 28, 2024.

June 28, 2025

December 28, 2024

Unrealized gain

Total fair value

( 5 ) 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.

(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 and year to date in 2024, the dilutive effect would have been 29,254 shares and 50,607 shares, respectively.

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

Three Months Ended

Six Months Ended

Basic EPS Computation:

Net income (loss)

Weighted average common shares outstanding

Weighted average

Common shares

Diluted EPS Computation:

Net income (loss)

Weighted average common shares outstanding

Weighted average

Common shares

Dilutive effect of stock options

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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.

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.

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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 29, 2025

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 28, 2025:

(Dollars in Thousands)

June 28, 2025

Maturity of capitalized lease liabilities

Remaining 2025

Lease payments

Total undiscounted operating lease payments

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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 2025.

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

Operating lease cost and cash paid was $ 41 thousand during the second quarter of 2025 and $ 83 thousand for the six months ended June 28, 2025.

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

All other short-term leases were immaterial.

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

During the quarters ended March 29, 2025 and March 30, 2024, a total of 115,000 and 135,500 stock options, respectively, were granted to employees under the Company’s 2020 Equity Incentive Plan (the “Plan”) and a total of 75,000 and 75,000 stock options, respectively, were granted to outside directors during the quarters ended March 29, 2025 and March 30, 2024.

During the quarters ended March 29, 2025 and March 30, 2024 , there were 0 options exercised.

During the quarters ended March 29, 2025 and March 30, 2024 , the Company repurchased 0 shares for employees to facilitate their exercise of stock options.

There were also 1,083,300 options outstanding at a weighted average price of $ 2.45 with a weighted average remaining contractual term of 7.6 years as of March 29, 2025 and there were 581,900 shares exercisable at a weighted average price of $ 2.37 with a weighted average remaining term of 6.7 years.

There were 1,097,900 options outstanding at a weighted average price of $ 2.61 with a weighted average remaining contractual term of 7.1 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.

During the quarter ended June 28, 2025, 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 28, 2025 .

For the six months ended June 28, 2025 a total of 115,000 stock options and 75,000 stock options were granted to employees and directors, respectively.

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 .

For the six months ended June 29, 2024 a total of 135,500 stock options and 75,000 stock options were granted to employees and directors, respectively

During the three and six months ended June 28, 2025, there were no options exercised and corresponding shares issued.

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 June 28, 2025, the Company did not repurchase any shares for employees to facilitate their exercise of stock options.

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.

There were also 1,083,300 options outstanding at a weighted average price of $ 2.45 with a weighted average remaining term of 7.36 years as of June 28, 2025, and there were 594,100 options exercisable at a weighted average price of $ 2.40 with a weighted average remaining term of 6.49 years as of June 28, 2025.

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

As of March 29, 2025, there were 466,400 shares available for future grants.

As of March 29, 2025, there was $ 608 thousand of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Plan;

As of June 28, 2025, there were 421,400 shares available for future grants under the 2020 Plan and 141,900 shares outstanding under the 2009 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 28, 2025, there was $ 559 thousand of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Plan;

that cost is expected to be recognized over a weighted average period of 2.41 years.

During the quarters ended March 29, 2025 and March 30, 2024, the Company recognized approximately $ 122 thousand and $ 161 thousand, respectively, as shared-based compensation expense related to previously granted shares under the Plan.

During the three and six months ended June 28, 2025, the Company recognized $ 49,354 and $ 171,540 , 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.

( 8 ) Inventories

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Finished goods

Gross inventory

Total inventory

Reserve for obsolescence

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Accrued payroll and related expenses

Accrued product returns

Accrued other

Total Accrued Expenses

( 10 ) Revolving Line of Credit

In May 2023, the Company entered into a line of credit (LOC) in the amount of $ 3.0 million 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 ( 7.5 % at March 29, 2025).

On March 29, 2025 and 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 2025 was $0 and was $0 for Q1 2024.

( 11 ) 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 2025 the deferred tax asset was decreased $ 84 for the estimated tax on Q1 net income.

( 10 ) Line of Credit

The Company has a $ 3.0 million revolving line of credit (LOC) 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 ( 7.5 % at June 28, 2025) .

On June 28, 2025, 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 and has been extended to August 5, 2025.

(11) Segment Reporting

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The following table presents segment information for the Company's single reporting segment:

March 29, 2025

March 30, 2024

Three Months Ended

Six Months Ended

June 28, 2025

June 29, 2024

June 28, 2025

June 29, 2024

Product sales

Cost of product sales

Gross profit (loss)

Selling, general, and administrative expenses

Income (loss) from operations

Income (loss) before income tax

Other income, net

Income (loss) before income taxes

Income tax provision (benefit)

Net income (loss)

( 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.

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 28, 2025 the deferred tax asset was decreased $ 52,119 and $ 135,828 for the estimated tax provision for Q2 and year to date net income, respectively.

( 13 ) Subsequent Events:

Enactment of the One Big Beautiful Bill Act

On July 4, 2025, the President signed into law the One Big Beautiful Bill Act (Public Law 119-21), which includes significant modifications to the Internal Revenue Code.

The legislation permanently extends and modifies key provisions of the Tax Cuts and Jobs Act of 2017 and introduces new deductions and credits applicable to both individuals and businesses.

Key provisions relevant to the Company include:

Restoration of Immediate Expensing for Domestic Research and Experimental ("R&E") Expenditures:

Effective for tax years beginning after December 31, 2024, domestic R&E expenditures may be immediately expensed under new Section 174A, reversing the prior capitalization and amortization requirement.

This change may materially impact the Company’s deferred tax assets and current tax expense depending on the volume of qualifying expenditures.

It is anticipated that the unamortized Section 174 R&E expenditures at Q2 2025 will be expensed as follows (subject to further analyses and discussions):

Expense remaining unamortized for 2025 and 37.5 % of 2022-2024

Expense 12.5 % of 2022-2024

Enhancement of Section 179 Expensing:

The maximum Section 179 deduction is increased to $2.5 million, with a phase-out threshold beginning at $4 million.

This expansion is expected to accelerate tax deductions for qualifying property and benefit capital investment strategies.

Permanent Reinstatement of 100% Bonus Depreciation:

For qualified property acquired and placed in service after January 19, 2025, the Company may elect full expensing under Section 168(k), which is expected to accelerate tax deductions and reduce taxable income in applicable periods.

Modifications to FDII (now FDDEI):

The deduction under Section 250 for foreign-derived intangible income is reduced to 33.34%, and eligibility criteria are narrowed.

These changes may impact export-related tax incentives and deferred tax projections tied to U.S.-held IP.

The Company is currently evaluating the impact of these provisions on its financial statements and tax positions.

While the changes are not expected to materially affect prior period results, they may influence future effective tax rates, deferred tax balances, and cash tax obligations.

The Company will incorporate these changes into its tax planning and provision calculations for fiscal year 2025 and beyond.

However, the full effect of these provisions will depend on the Company's future capital expenditures, R&E activities, financing arrangements, and international operations.

The Company will incorporate these changes into its tax provision and planning beginning in fiscal year 2025.

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

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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, including economic 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.

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There have been no material changes to these policies since December 28, 2024.

Products we provide include baseplates for motor controllers used in high-speed electric trains, subway cars, wind turbines, and hybrid and electric vehicles.

On July 4, 2025, the One Big Beautiful Bill Act (Public Law 119-21) was enacted, introducing significant changes to the Internal Revenue Code that affect the Company’s tax accounting estimates.

These changes involve a high degree of estimation uncertainty and are reasonably likely to have a material impact on the Company’s financial condition and results of operations.

Key areas of estimation affected include:

Deferred Tax Asset Realizability:

The restoration of immediate expensing for domestic R&E expenditures under new Section 174A and enhanced Section 179 limits may materially alter the timing and magnitude of deductible expenses.

The Company is reassessing the realizability of deferred tax assets tied to prior capitalization regimes and evaluating the sensitivity of future reversals .

International Tax Provisions (NeCTIe and FDDEI):

The restructuring of GILTI and FDII regimes introduces new deduction rates, foreign tax credit limitations, and eligibility criteria.

These changes affect the Company’s assumptions regarding foreign income inclusions, expense allocations, and valuation allowances.

Estimation uncertainty arises from forecasting foreign earnings, tax credit utilization, and jurisdictional tax rates.

Bonus Depreciation and Enhancement of Section 179 Expensing:

The reinstatement of 100% bonus depreciation and enhancement of section 179 requires updated modeling of book-tax differences and deferred balances.

The Company is evaluating the impact on capital expenditure forecasts and financing strategies, which may materially affect deferred tax liabilities and effective tax rate projections.

The Company’s critical accounting estimates related to income taxes are subject to change as further guidance is issued and as the Company refines its tax planning strategies.

Management continues to monitor developments and will update assumptions and disclosures as necessary.

Products we provide include baseplates for power electronics used in high-speed electric trains, subway cars, wind turbines, and hybrid and electric vehicles.

We provide baseplates and housings used in radar, satellite and avionics applications.

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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 2025 (Q1 2025) Compared to the First Fiscal Quarter of 2024 (Q1 2024);

Results of Operations for the Second Fiscal Quarter of 2025 (Q2 2025) Compared to the Second Fiscal Quarter of 2024 (Q2 2024);

(all $ in 000 ’ s)

Revenues totaled $8,079 in Q2 2025 compared with $5,030 generated in Q2 2024, an increase of 61%.

The major factor contributing to this increase is the continued expansion of production capacity to meet growing demand, including the addition of our third shift and the continued improvement of our production associates as they gain more experience.

As announced in Q4 2024, CPS received an order from an existing customer approximately $5 million greater than the same order received in Q4 2023.

Gross margin in Q1 2025 totaled $1,231 or 16% of sales.

This compares with gross margin in Q1 2024 of $906 or 15% of sales.

This increase was primarily due to the impact of higher sales volumes on fixed costs.

Selling, general and administrative (SG&A) expenses totaled $1,101 in Q1 2025 compared with SG&A expenses of $1,166 in Q1 2024, a 6% decrease year over year.

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

The Company experienced operating income of $130 in Q1 2025 compared with an operating loss of $260 in Q1 2024.

This increase was a result of the increased gross margin and by the decrease in SG&A expenses.

In spite of the completion of our armor order for the U.S.

Navy during Q2 2024, growing demand in our other product lines has significantly increased compared to last year.

In September 2024 the Company added a third shift in order to meet this growing demand.

In addition, the company received significantly more funding under the federal government’s Small Business Innovative Research ("SBIR") program in Q2 of 2025 as compared to Q2 2024.

Gross profit in Q2 2025 totaled $1,336 or 17% of sales.

This compares with a gross loss in Q2 2024 of $230 or -5% of sales.

This percentage increase was due to several factors including the impact of fixed costs on significantly higher revenues, as well as abnormally low production yield levels in some of our hermetic package products during Q2 of 2024.

Selling, general and administrative ("SG&A") expenses totaled $1,199 in Q2 2025 compared with SG&A expenses of $1,085 in Q2 2024.

This increase was due to several factors including, the increase in variable compensation as a result of stronger results from operations in Q2 2025 as compared to Q2 2024, the weakening of the U.S.

dollar relative to the Euro and its impact on our costs with European vendors, and increased commission costs due to higher revenue.

The Company experienced an operating profit of $137 in Q2 2025 compared with an operating loss of $1,315 in Q2 2024.

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

Net after tax income was $104 in Q2 2025 compared to an after tax loss of $954 in Q2 2024.

Results of Operations for the First Six Months of 2025 Compared to the First Six Months of 2024 (all $ in 000s)

Total revenue was $15,585 in the first half of 2025, a 42% increase compared with total revenue of $10,943 in the first half of 2024.

In spite of the completion of our armor order for the U.S.

Navy during Q2 2024, growing demand in our other product lines has significantly increased in 2025 compared to last year.

In September 2024 the Company added a third shift in order to meet this growing demand.

In addition, the company received significantly more funding under the federal government’s SBIR program in Q2 of 2025 as compared to Q2 2024.

Gross profit in the first six months of 2025 totaled $2,567 or 16% of sales.

In the first six months of 2024 gross margin totaled $676 or 6% of sales.

Selling, general and administrative (SG&A) expenses were $2,300 during the first six months of 2025, up 2% compared with SG&A expenses of $2,251 in the first six months of 2024.

Increased variable compensation accruals and increased commissions, both due to significantly increased revenue were partially offset by a reduction in accounting and legal fees as well as the cost of a settlement with a former outside consultant in 2024.

During the first half of 2025, the Company had net other income of $70.

This compares with net other income of $170 realized during the first half of 2024.

The decrease in net other income is primarily due to reduced cash balances in the first half of 2025 as compared to 2024.

In the first six months of 2025 the Company had operating income of $267 compared with an operating loss $1,575 in the same period last year.

The net income for the first six months of 2025 totaled $200 versus a net loss of $1,097 in the first six months of 2024.

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

As a result, we do not believe that the Russian invasion of Ukraine or the conflict in Israel and Gaza will have a direct impact on our results.

Most of our raw materials are sourced domestically.

In some cases, our suppliers may be sourcing these materials from a foreign source.

To date, we have not seen any cost increases that we believe are attributable to tariffs, however this could change in the future.

Nevertheless, there could be an indirect impact regarding supply chain and inflationary issues as a result of these conflicts.

Inflation has had an impact on our costs.

Thus far, we have largely been able to pass along these increases to our customers, but there is no guarantee that we will be able to continue this in the future.

Thus far, we have been able to pass along these increases to our customers, but there is no guarantee that we will be able to continue this in the future.

In addition, there is often a lag between when the costs increase and when we can adjust customer prices.

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.

Wages have also been impacted by inflation.

We have instituted a combination of wage increases as well as more competitive benefits in order to retain the personnel making up our workforce.

The factors mentioned above, including inflation and tariffs, create elevated uncertainty regarding future financial performance.

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

The impact of the fluctuation of foreign exchange rates can create situations where our pricing to foreign customers can either more or less competitive as compared to our Japanese competitor.

We are beginning to see an impact of tariffs on our cost structure.

While many of our raw materials are sourced domestically, we are seeing instances where the domestic supplier is able to raise prices due to the impact of tariffs on prices charged by their foreign competitors.

While the overall impact of these cost increases is relatively small, they are still enough to impact our margins.

Given that our major competitor is from outside the U.S., our ability to pass on these cost increases to our foreign customers is somewhat limited.

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 29, 2025 totaled $1,930, with marketable securities of $1,040.

This compares to cash and cash equivalents at December 28, 2024 of $3,281 and marketable securities of $1,031.

The change in cash is predominantly due to our increased accounts receivable which are discussed in more detail below.

Trade accounts receivable at March 29, 2025 totaled $6,303 compared with $4,858 at December 28, 2024.

Days Sales Outstanding (DSO) increased from 76 days at the end of 2024 to 78 days at the end of Q1 2025.

The reason for this increase is that sales dollars per week grew throughout the quarter, resulting in a higher percentage of Q1 sales remaining in accounts receivable than would be expected, had weekly sales been relatively uniform during the quarter.

The accounts receivable balances at December 28, 2024, and March 29, 2025 were both net of an allowance for credit losses of $10.

Inventories totaled $4,813 at March 29, 2025 compared with inventory totaling $4,331 at December 28, 2024.

The Company’s liquid assets at June 29, 2025 consist of cash and cash equivalents of $2,374 and marketable debt securities with a fair value of $1,045.

This compares to cash and cash equivalents at December 28, 2024 of $3,281 and $1,031 marketable debt securities held at December 28, 2024.

While cash is down from the end of 2024, it has moved in a “U” shaped pattern with a reduction to $1.9 million at the end of Q1 2025 now recovering to about $2.4 million at the end of Q2 2025.

We expect this recovery to continue.

Accounts receivable at June 28, 2025 totaled $5,603 compared with $4,858 at December 28, 2024.

Days Sales Outstanding (DSO) decreased from 76 days at the end of 2024 to 67 days at the end of Q2 2025.

The decrease in DSO was due to increasing sales volumes as we neared the end of 2024.

As a result our receivables at the end of 2024 were a higher percentage of than if revenue was spread out evenly during the period.

The accounts receivable balances at December 28, 2024, and June 28, 2025, are both net of an allowance for doubtful accounts of $10.

Inventories totaled $5,198 at June 28, 2025 compared with inventory totaling $4,331 at December 28, 2024.

The inventory turnover in the most recent four quarters ending Q2 2025 was 5.2 times (based on a 5 quarter end average) compared with 4.8 times averaged during the four quarters of 2024.

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Contractual Obligations (all $ in 000 ’ s unless otherwise noted)

The Company maintains a $3.0 million revolving line of credit (LOC) 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.

On March 29, 2025, the Company had $0 of borrowings under this LOC and its borrowing base at the time would have permitted the full $3.0 million to have been borrowed.

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

The Company has a line of credit (LOC) in the amount of $3.0 million 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 (7.5% on 6/28/2025).

On June 28, 2025, 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 was paid in full during the quarter ended March 29, 2025.

This note was paid in full in the first quarter of 2025.

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

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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