What changed in this filing

/stocks — the workspaceLOADING

Item 5. Market for Registrant’s Common Equity

2026-03-03 compared with 2025-03-17 · 59 added, 44 removed, 117 unchanged (47% of the section changed)

29 unchanged sentences

The Company’s products contribute to the electrification of the green economy.

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

The products we provide include baseplates for motor controllers used in high-speed electric trains, subway cars, wind turbines, hybrid and electric vehicles and the transmission of High Voltage Direct Current (HVDC).

We provide hermetic packages used in radar, satellite and avionics applications.

14 unchanged sentences

Sales volume is therefore a key financial metric used by management.

The Company believes the underlying demand for metal matrix composites is growing as the electronics and other industries seek higher performance, higher reliability, and reduced costs.

The Company believes the underlying demand for MMCs is growing as the electronics and other industries seek higher performance, higher reliability, and reduced costs.

CPS believes that the Company is well positioned to offer our solutions to current and new customers as these demands grow.

In 2024 the Company’s top three customers accounted for 57% of revenue and the remaining 43% of revenue was derived from 45 other customers.

In 2025 the Company’s top three customers accounted for 64% of revenue and the remaining 36% of revenue was derived from approximately 43 other customers.

In 2024 the top three customers accounted for 58% of revenue and the remaining 42% of revenue was derived from approximately 45 customers.

3 unchanged sentences

These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented.

CPS’s significant accounting policies are presented within Note 2 to the financial statements;

CPS’ significant accounting policies are presented within Note 2 to the financial statements;

the significant accounting policies which management believes are most critical to aid in fully understanding and evaluating its reported financial results include the following:

22 unchanged sentences

Likewise, if the Company chooses to manufacture product in advance of anticipated purchase orders and those orders do not materialize, it is unlikely that it would be able to sell that inventory to another customer.

The value of CPS’s work in process and finished goods is based on the assumption that specific customers will take delivery of specific items of inventory.

The value of CPS’ work in process and finished goods is based on the assumption that specific customers will take delivery of specific items of inventory.

Raw materials are less unique to specific products.

5 unchanged sentences

Often all the components in a lot are not necessary to complete the order.

Annually the company reviews this unused material and establishes an obsolescence reserve for the amount it does not expect to use over the next three years.

Annually the Company reviews this unused material and establishes a reserve for the amount it has not used in the prior 12 months and does not have an expectation of future activity.

Valuation of deferred tax assets

1 unchanged sentence

The Company considers many factors in assessing whether or not a valuation allowance for its deferred tax asset is warranted.

In light of recent profitability and expected future profitability.

It was determined that a reserve is not needed, as it is more likely than not that the Company would be able to fully utilize its deferred tax asset.

At December 28, 2024, the Company’s deferred tax asset and other temporary differences will require taxable income of approximately $12 million and reversals of existing temporary differences to fully utilize the deferred tax asset, assuming a statutory corporate tax rate of 21%.

In light of recent profitability and expected future profitability, it was determined that a reserve is not needed, as it is more likely than not that the Company would be able to fully utilize its deferred tax asset.

At December 27, 2025, the Company’s deferred tax asset and other temporary differences will require taxable income of approximately $8.3 million and reversals of existing temporary differences to fully utilize the deferred tax asset, assuming a statutory corporate tax rate of 21% and 6.32% for federal and state taxes respectively.

Results of Operations (all $in millions unless noted)

Results of Operations for the year 2025 ( “ 2025 ” ) compared with the year 2024 ( “ 2024 ” ):

Total revenue was $21.1 million in 2024, a 24% decrease compared with total revenue of $27.6 million in 2023.

This decrease was due primarily to the successful completion of the armor contract in April 2024 compared to a full year of revenue from armor production in 2023, partially offset by increased revenue from AlSiC baseplates.

Total revenue was $32.6 million in 2025, a 54% increase compared with total revenue of $21.1 million in 2024.

This increase was primarily due to significant growth in our core business.

At the end of August 2024 the Company added a third production shift enabling it to meet this growth.

Additionally, a significant portion of our 2024 production efforts went towards the manufacture and testing of parts needed to solve a quality issue with a major customer.

Upon resolution in later 2024, this production capacity was again available to make products for sale to customers.

Lastly, gold represents a significant cost in our hermetic package products.

The price of gold increased significantly especially during the second half of 2025 over it’s price in 2024.

The price of gold accounted for $1.9 million of total revenue in 2025 as compared to $0.5 million in 2024.

Gross profit in 2025 totaled $5.3 million or 16% of sales.

This compares with $6.8 million, or 25% of sales, generated during 2023.

The decrease in margin was primarily due to the impact of the completion of the armor contract described above.

As CPS incurs significant fixed costs in its operations, a reduction in revenue has a significant impact on margin.

In addition, then growth of AlSiC baseplate sales in Q4 of 2024 required the hiring and training of new employees as well as the incurring of additional expenses for the ramp up of production.

A new employee is trained for 2-3 weeks before even beginning their actual work on the shop floor.

It can then take a few months before they are fully up to speed.

Selling, general and administrative (SG&A) expenses were $4.3 million during 2024, down from SG&A expenses of $5.1 million incurred during 2023.

This decrease was primarily due to a reduction in variable compensation expense, due to the reduction in revenue and profit year over year, as well as a reduction in salaries paid for selling and administrative personnel.

The Company generated an operating loss of $4.4 million in 2024, compared with operating income of $1.7 in 2023.

This decrease was due almost entirely to the reduction in revenue and additional expenses due to end of year sales growth, discussed above.

The Company recorded a net loss of $3.1M in 2024 compared to net income of $1.4M in 2023.

In 2024 the Company recorded an income tax benefit of $1.0 million compared to a provision for income taxes $0.6 million in 2023.

This compares with $(0.1) million, or (1)% of sales, in 2024.

The increase in margin was primarily due to the impact of the increased revenue as described above.

As CPS incurs significant fixed costs in its operations, an increase in revenue has a significant impact on margin.

A mitigating factor in this increased margin was the impact of rising gold prices.

The methodologies in recovering the increased gold costs can vary by customer, but generally speaking we do not generate a profit on these gold cost recovery charges which reduced profit margin by about 1%.

Selling, general and administrative (SG&A) expenses were $4.8 million during 2025, up from SG&A expenses of $4.3 million incurred during 2024.

This increase was primarily due to the increase in variable compensation expense, due to the increase in revenue and profit year over year.

In addition, the increased revenue generated a significant increase in our sales commission expense.

The Company generated operating income of $0.4 million in 2025, compared with an operating loss of $4.4 in 2024.

This increase was due almost entirely to the increase in revenue, discussed above.

The Company recorded net income of $0.4M in 2025 compared to a net loss of $3.1 million in 2024.

In 2025 the Company recorded a provision for income taxes of $0.3 million compared to a tax benefit of $1.0 million in 2024.

Significant Fourth Quarter Activity in 2025:

Revenues totaled $5.9 million in the fourth quarter of 2024 versus $6.7 million in the fourth quarter of 2023, a decrease of 12%.

This decrease was the result of the completion of our armor contract earlier in 2024, partially offset by an increase in AlSiC baseplate sales.

Gross margin decreased in the fourth quarter of 2024 compared with the fourth quarter of 2023 to $(0.3) million from $1.1 million.

This decrease was due to lower revenue as well as the costs associated with the production ramp up described above.

Revenues totaled $8.2 million in the fourth quarter of 2025 versus $5.9 million in the fourth quarter of 2024, an increase of 38%.

This increase was primarily due to significant growth in our core business.

In Q4 of 2024, our third shift was just getting started.

Our third shift folks had not yet reached their full level of proficiency resulting in lower production as compared to a fully experienced group.

Secondarily, gold represents a significant cost in our hermetic package products.

The price of gold increased significantly during the fourth quarter of 2025 over it’s price in 2024.

The price of gold increased our total revenue by $1.0 million in Q4 2025 as compared to $0.2 million in Q4 2024.

Gross profit increased in the fourth quarter of 2025 compared with the fourth quarter of 2024 to $1.2 million from $(0.3) million.

This increase was due to higher revenue and its favorable impact on fixed costs.

In addition, our third shift was added in late Q3 2024.

Its expected operational efficiencies had not yet been achieved in Q4 of 2024.

SG&A expenses totaled $1.3 million during the quarter, compared to $1.0 million in the same quarter of 2024.

The Company recorded an operating loss of $1.3 million in the fourth quarter of 2024 compared to operating income of $0.1 million in the fourth quarter of 2023.

The Company recorded a net loss of $1.0 million in the fourth quarter of 2024 compared to net income of $0.1 million in the fourth quarter of 2023.

This increase was primarily due to the increase in variable compensation expense, due to the increase in revenue and profit year over year.

In addition, the increased revenue generated a significant increase in our sales commission expense.

The Company recorded an operating loss of $0.1 million in the fourth quarter of 2025 compared to an operating loss of $1.3 million in the fourth quarter of 2024.

The Company recorded net income of $0.0 million in the fourth quarter of 2025 compared to a net loss of $1.0 million in the fourth quarter of 2024.

Liquidity and Capital Resources (all $in millions unless noted)

The Company’s cash and cash equivalents at December 28, 2024 totaled $3.3, restricted cash of $85 thousand and marketable debt securities with a fair value of $1.0.

compared with cash and cash equivalents at December 30, 2023 of $8.8 and no restricted cash or marketable debt securities.

This decrease was primarily due to the Company’s losses for the year as well as the increase in receivables of $0.6.

Accounts receivable at December 28, 2024 totaled $4.9 compared to $4.4 at December 30, 2023.

Days Sales Outstanding (DSO) increased to 75 days at the end of 2024 compared to 60 days at the end of 2023.

This change was due to continued growth of sales throughout the 4 th quarter.

This resulted in collections on the earlier lower sales, while the higher later sales remained in receivables.

The Company’s cash and cash equivalents at December 27, 2025 totaled $4.5, no restricted cash and marketable debt securities with a fair value of $8.8 compared with cash and cash equivalents at December 28, 2024 of $3.3, restricted cash of $85 thousand and marketable debt securities with a fair value of $1.0.

This increase was primarily due to the Company’s equity raise partially offset by increases in accounts receivable and inventory needed to support increased revenue.

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.

Trade accounts receivable at December 27, 2025 totaled $5.2 compared to $4.9 at December 28, 2024.

Days Sales Outstanding (DSO) decreased to 61 days at the end of 2025 compared to 75 days at the end of 2024.

This change was due to higher sales growth throughout the 4 th quarter of 2024 as compared to Q3 2024 versus a decline in sales from Q3 2025 to Q4 2025.

The accounts receivable balances at December 27, 2025, and December 28, 2024 were both net of an allowance for credit losses of $10 thousand.

Inventories decreased to $4.3 at December 28, 2024 from $4.6 at December 30, 2023.

Inventories increased to $5.6 at December 27, 2025 from $4.3 at December 28, 2024.

This increase was almost entirely the result of an increase in work in process (WIP).

CPS ships parts to platers in Europe where the parts are plated prior to shipment to the customer.

In order to meet the significantly increased demand from these customers, parts at the platers, which are part of WIP, have increased significantly from 2024 to 2025.

The inventory turnover in the four quarters ending 2025 was 5.4 times, up from 4.8 times averaged during the four quarters of 2024 (each based on a 5 point average).

9 unchanged sentences

On December 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 LOC remains in effect until terminated which can be done by either party.

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 rate of 6.47%.

As of December 28, 2024, the Company had $109 thousand of construction in progress and no outstanding commitments to purchase production equipment.

The LOC was renewed in August 2025 and remains in effect until terminated which can be done by either party.

As of December 27, 2025, the Company had $460 thousand of construction in progress and no material outstanding commitments to purchase production equipment.

During 2025, our leasing arrangements consisted of the Norton, MA facility lease.

The Norton facility lease was renewed in February 2021, expires in February 2026 and is a triple net lease wherein the Company is responsible for payment of all real estate taxes, operating costs and utilities.

The Norton facility lease was renewed in August 2025, expires in February 2028 and is a 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 buy the property and a first right of refusal during the term of the lease.

3 unchanged sentences

Recent inflationary trends have had an impact on our profitability.

We have had higher than normal wage increases, have implemented other programs to ameliorate the effects of inflation on our employees, such as improvements to our benefit package, and seen price increases from some of our suppliers.

We have had wage increases, have implemented other programs to ameliorate the effects of inflation on our employees, such as improvements to our benefit package, and seen price increases from some of our suppliers.

We have been able to pass along many of these price increases to our customers, however in some cases we have had to absorb these price increases for a period of time, before being able to pass them along.

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-K

Item 5. Market for Registrant’s Common Equity