What changed in this filing

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Item 1. Financial Statements

2025-10-31 compared with 2025-08-01 · 152 added, 83 removed, 352 unchanged (40% of the section changed)

2 unchanged sentences

Balance Sheets (Unaudited)

June 28, 2025

September 27,

Current assets:

13 unchanged sentences

Net property and equipment

Intangible assets

Net intangible assets

Right-of-use lease asset

14 unchanged sentences

Common stock, $ 0.01 par value, authorized 20,000,000 shares;

issued 14,661,487 shares;

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

issued 14,666,987 and 14,661,487 shares;

outstanding 14,529,277 and 14,525,960 shares at September 27, 2025 and December 28, 2024, respectively

Additional paid-in capital

1 unchanged sentence

Accumulated deficit

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

Less cost of 137,710 and 135,527 common shares repurchased at each September 27, 2025 and December 28, 2024, respectively

Total stockholders’ equity

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Product sales

7 unchanged sentences

Other comprehensive income

Net unrealized gains on available for sale securities

Net unrealized gains (losses) on available for sale securities

Reclassification adjustment for gains included in net income

Total other comprehensive income

Total other comprehensive income (loss)

Comprehensive income (loss)

6 unchanged sentences

STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

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

comprehensive

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 27, 2025 AND SEPTEMBER 28, 2024

other comprehensive income

stockholders’

Balance at March 29, 2025

Balance at June 28, 2025

Share-based compensation expense

Employee option exercises

Other comprehensive loss

Balance at September 27, 2025

other comprehensive income

Balance at June 28, 2025

comprehensive

stockholders’

1 unchanged sentence

Share-based compensation expense

Employee option exercises

Net unrealized gains on available for sale securities

Reclassification adjustment for gains included in net income

Balance at June 28, 2025

comprehensive

Balance at September 27, 2025

other comprehensive income

stockholders’

Balance at March 30, 2024

Balance at June 29, 2024

Share-based compensation expense

Employee option exercises

Other comprehensive income

Balance at June 29, 2024

comprehensive

Balance at September 28, 2024

other comprehensive income

stockholders’

1 unchanged sentence

Share-based compensation expense

Employee option exercises

Other comprehensive income

Balance at June 29, 2024

Balance at September 28, 2024

See accompanying notes to financial statements.

1 unchanged sentence

Statements of Cash Flows (Unaudited)

Six Months Ended

Nine Months Ended

September 27,

September 28,

Cash flows from operating activities:

Net income (loss)

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

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

Depreciation and amortization

8 unchanged sentences

Deferred revenue

Net cash used in operating activities

Net cash provided by (used in) operating activities

Cash flows from investing activities-

9 unchanged sentences

Cash and cash equivalents at beginning of period

Cash and cash equivalents and restricted cash at end of period

Restricted cash at end of period

Cash and cash equivalents at end of period

Supplemental disclosures of cash flows information:

Cash paid for income taxes

Cash paid for interest

Supplemental disclosures of non-cash activity

Disposal of fully depreciated production equipment

Share repurchases as a reduction of stock option exercise proceeds

See accompanying notes to financial statements.

28 unchanged sentences

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 28, 2025 was $ 1,044,925 and was $ 1,031,001 as of December 28, 2024.

June 28, 2025

The value of these bonds as of September 27, 2025 was $ 1,054,079 and was $ 1,031,001 as of December 28, 2024.

September 27, 2025

December 28, 2024

8 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 27,

September 28,

September 27,

September 28,

Basic EPS Computation:

9 unchanged sentences

Operating Leases

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

The Company has one real estate lease now expiring in February 2028.

In August 2025 the Company exercised its option to extend the lease term for two additional years.

CPS also has a few other leases for equipment which are minor in nature and are generally short-term in duration.

1 unchanged sentence

The real estate lease expiring in 2028 (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.

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, for the portion expiring in February 2026, and the option exercise date, for the final two years of the lease.

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

1 unchanged sentence

The lease is triple net lease wherein the Company is responsible for payment of all real estate taxes, operating costs and utilities.

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

The Company also has two, two year options to renew the lease in March 2028 and again in March 2030 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 $ 165 thousand to $ 169 thousand through maturity.

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:

The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s capitalized operating lease as of September 27, 2025:

(Dollars in Thousands)

June 28, 2025

September 27,

Maturity of capitalized lease liabilities

11 unchanged sentences

Operating Lease Costs and Cash Flows

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.

Operating lease cost and cash paid was $ 41 thousand during the third quarter of 2025 and $ 124 thousand for the nine months ended September 27, 2025.

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

8 unchanged sentences

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

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.

During the quarter ended September 27, 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 September 27, 2025 .

For the nine months ended September 27 , 2025 a total of 115,000 stock options and 75,000 stock options were granted to employees and directors, respectively.

During the quarter ended September 28, 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 September 28, 2024 .

For the nine months ended September 28 , 2024 a total of 135,500 stock options and 75,000 stock options were granted to employees and directors, respectively.

During the three and nine months ended September 27, 2025, there were 5,500 options exercised and corresponding shares issued at a weighted average price of $ 1.44 .

During the three and nine months ended September 28, 2024, there were 60,000 options exercised and corresponding shares issued at a weighted average price of $ 1.50 .

During the three and nine months ended September 27, 2025, the Company repurchased 2,183 shares for employees to facilitate their exercise of stock options.

During the three and nine months ended September 28, 2024, the Company repurchased 53,255 shares for employees to facilitate their exercise of stock options.

There were also 1,077,800 options outstanding at a weighted average price of $ 2.45 with a weighted average remaining term of 7.13 years as of September 27, 2025, and there were 635,500 options exercisable at a weighted average price of $ 2.45 with a weighted average remaining term of 6.37 years as of September 27, 2025.

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

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;

As of September 27, 2025, there were 421,400 shares available for future grants under the 2020 Plan and 138,900 shares outstanding under the 2009 Plan.

As of September 28, 2024, there were 626,400 shares available for future grants under the 2020 Plan and 248,400 shares outstanding under the 2009 Plan.

As of September 27, 2025, there was $ 509 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 2.68 years.

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.

During the three and nine months ended September 27, 2025, the Company recognized $ 49,354 and $ 220,894 , respectively, as shared-based compensation expense related to previously granted shares under the Plan.

During the three and nine months ended September 28, 2024, the Company recognized $ 44,480 and $ 249,922 , respectively, as shared-based compensation expense related to previously granted shares under the Plan.

( 8 ) Inventories

Inventories consist of the following:

September 27,

Raw materials

6 unchanged sentences

Accrued expenses consist of the following:

September 27,

Accrued legal and accounting

4 unchanged sentences

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 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 ( 7.25 % at September 27, 2025) .

On September 27, 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, 2026.

12 unchanged sentences

Three Months Ended

Six Months Ended

June 28, 2025

June 29, 2024

June 28, 2025

June 29, 2024

Nine Months Ended

Product Sales

10 unchanged sentences

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:

For the three and nine months ended September 27, 2025 the deferred tax asset was decreased $ 113,601 and $ 249,429 for the estimated tax provision for Q3 and year to date net income, respectively.

( 13 ) Enactment of the One Big Beautiful Bill Act

5 unchanged sentences

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

During Q3 2025, the Company expensed $ 899,728 of unamortized Section 174 R&E 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

16 unchanged sentences

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

(14) Subsequent Events:

Equity capital raise

On October 8, 2025 the Company closed an equity raise underwritten by Roth Capital Partners (“Roth”).

Roth acquired 3,450,000 shares of the Company’s common stock at a price of $ 3.00 per share.

The net proceeds to the Company were $ 9,540,025 .

Had the transaction occurred on the final day of the fiscal quarter, September 27, 2025, the balance sheet would have appeared as follows (changes are italicized):

CPS TECHNOLOGIES CORP.

Balance Sheets (Unaudited)

September 27,

Current assets:

Cash and cash equivalents

Marketable securities, at fair value

Accounts receivable-trade

Accounts receivable-other

Inventories, net

Prepaid expenses and other current assets

Total current assets

Property and equipment:

Production equipment

Furniture and office equipment

Leasehold improvements

Accumulated depreciation and amortization

Construction in progress

Net property and equipment

Net Intangible assets

Right-of-use lease asset

Deferred taxes, net

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Note payable, current portion

Accounts payable

Accrued expenses

Deferred revenue

Lease liability, current portion

Total current liabilities

Deferred revenue – long term

Long term lease liability

Total liabilities

Commitments & Contingencies

Stockholders’ equity:

Common stock, $ 0.01 par value, authorized 20,000,000 shares;

issued 18,116,987 shares and 14,661,487 ;

outstanding 17,979,277 and 14,525,960 shares at September 27, 2025 and December 28, 2024, respectively

Additional paid-in capital

Accumulated other comprehensive income

Accumulated deficit

Less cost of 137,710 and 135,527 common shares repurchased at each September 27, 2025 and December 28, 2024, respectively

Total stockholders’ equity

Total liabilities and stockholders’ equity

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

46 unchanged sentences

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

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

Results of Operations for the Third Fiscal Quarter of 2025 (Q3 2025) Compared to the Third Fiscal Quarter of 2024 (Q3 2024);

(all $ in 000 ’ s)

Revenues totaled $8,804 in Q3 2025 compared with $4,247 generated in Q3 2024, an increase of 107%.

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.

Growing demand in our MMC and hermetic packages 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.

In addition, the company received significantly more funding under the federal government’s Small Business Innovation Research ("SBIR") program in Q3 of 2025 as compared to Q3 2024.

Lastly, significant increases in the price of gold, which costs are billed to our customers, also contributed to this increase.

Gross profit in Q3 2025 totaled $1,503 or 17% of sales.

This compares with a gross loss in Q3 2024 of $523 or -12% 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.

This percentage increase was due to several factors including the impact of fixed costs on significantly higher revenues, as well as training costs for our new third shift employees during Q3 of 2024.

Selling, general and administrative (SG&A) expenses totaled $1,226 in Q3 2025 compared with SG&A expenses of $963 in Q3 2024.

4 unchanged sentences

Net after tax income was $208 in Q3 2025 compared to an after tax loss of $1,043 in Q3 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.

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

Total revenue was $24,388 in the first nine months of 2025, a 61% increase compared with total revenue of $15,190 in the first nine months 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.

Navy during 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.

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

Lastly, significant increases in the price of gold, which costs are billed to our customers, also contributed to this increase.

Gross profit in the first nine months of 2025 totaled $4,070 or 17% of sales.

In the first nine months of 2024 gross margin totaled $153 or 1% of sales.

Selling, general and administrative (SG&A) expenses were $3,527 during the first nine months of 2025, up 10% compared with SG&A expenses of $3,215 in the first nine 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.

During the first nine months of 2025, the Company had net other income of $115.

This compares with net other income of $242 realized during the first nine months of 2024.

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

In the first nine months of 2025 the Company had operating income of $543 compared with an operating loss $3,062 in the same period last year.

The net income for the first nine months of 2025 totaled $408 versus a net loss of $2,140 in the first nine 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.

As a result, we do not believe that the Russian invasion of Ukraine will have a direct impact on our results.

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

7 unchanged sentences

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.

While the overall impact of these costs 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.

1 unchanged sentence

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

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.

The Company’s liquid assets at September 27, 2025 consist of cash and cash equivalents of $3,234 and marketable debt securities with a fair value of $1,054.

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.

We have recovered from our low cash position near the end of Q1 2025 of $1,930.

We expect the trend of cash growth from operations to continue.

Trade accounts receivable at September 27, 2025 totaled $5,400 compared with $4,858 at December 28, 2024.

Days Sales Outstanding (DSO) decreased from 75 days at the end of 2024 to 55 days at the end of Q3 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.

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

The accounts receivable balances at December 28, 2024, and September 27, 2025, are both net of an allowance for doubtful accounts of $10.

Inventories totaled $5,384 at September 27, 2025 compared with inventory totaling $4,331 at December 28, 2024.

The inventory turnover in the most recent four quarters ending Q3 2025 was 5.2 times (based on a 5 quarter end average) compared with 4.8 times averaged during the four quarters of 2024.

On October 8, 2025 the Company closed an equity raise underwritten by Roth Capital Partners (“Roth”).

Roth acquired 3,450,000 shares of the Company’s common stock at a price of $3.00 per share.

The net proceeds to the Company were $9,540,025.

Due to increased customer demand for our core products, the potential growth of our new product lines (AlMax ® fiber reinforced aluminum, radiation shielding, and others), possible new armor orders, and expanding product development efforts, the Company is actively searching for a larger facility near our current location which will enable us to meet these demands.

The proceeds of our equity raise will enable us to pay for the costs to relocate to a different facility, the fit up of the larger facility, and the capital expenditures for the equipment necessary to accommodate this expected growth.

The Company expects it will continue to be able to fund its operations for the remainder of 2025 from operations and existing cash balances.

6 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 (7.25% on 9/27/2025).

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.

On September 27, 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.

6 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