ITEM 1 FINANCIAL STATEMENTS (Unaudited)
−Removed: CPS TECHNOLOGIES CORP.
−Removed: Condensed Balance Sheets (Unaudited)
+Added: Condensed CPS TECHNOLOGIES CORP.
+Added: Balance Sheets (Unaudited)
+Added: June 27, 2026
Current assets:
13 unchanged sentences
Net property and equipment
−Removed: Net intangible assets
+Added: Intangible assets, net
Right-of-use lease asset
12 unchanged sentences
Stockholders’ equity:
−Removed: Common stock, $ 0.01 par value, authorized 20,000,000 shares;
+Added: Common stock, $ 0.01 par value, authorized 25,000,000 and 20,000,000 shares;
issued 19,605,017 and 18,132,767 shares;
−Removed: outstanding 18,006,963 and 17,988,634 shares at each March 28, 2026 and December 27, 2025
−Removed: Preferred stock, no shares issued or outstanding
+Added: outstanding 19,387,942 and 17,988,634 shares at each June 27, 2026 and December 27, 2025
Additional paid-in capital
1 unchanged sentence
Accumulated deficit
−Removed: Less cost of 144,804 and 144,133 common shares repurchased at each March 28, 2026 and December 27, 2025
+Added: Less cost of 217,075 and 144,133 common shares repurchased at each June 27, 2026 and December 27, 2025
Total stockholders’ equity
2 unchanged sentences
CPS TECHNOLOGIES CORP.
−Removed: Condensed Statements of Operations and Other Comprehensive Income (Loss)
−Removed: Fiscal Quarters Ended
+Added: Condensed Statements of Operations and Other Comprehensive Income (Loss) (Unaudited)
+Added: Three Months Ended
+Added: Six Months Ended
Product sales
1 unchanged sentence
Selling, general, and administrative expenses
−Removed: Operating income (loss)
+Added: Income (loss) from operations
Other income, net
−Removed: Income (loss) before income taxes
+Added: Net income (loss) before income taxes
Income tax provision (benefit)
Net income (loss)
−Removed: Other comprehensive income
−Removed: Net unrealized gains (losses) on available for sale securities
+Added: Other comprehensive income (loss)
+Added: Net unrealized gains (loss) on available for sale securities
Reclassification adjustment for gains included in net income
−Removed: Total other comprehensive income
+Added: Total other comprehensive income (loss)
Comprehensive income (loss)
6 unchanged sentences
CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)
−Removed: FOR THE THREE MONTHS ENDED MARCH 28, 2026 AND MARCH 29, 2025
−Removed: comprehensive income (loss)
−Removed: stockholders’
+Added: FOR THE THREE AND SIX MONTHS ENDED JUNE 27, 2026 AND JUNE 28, 2025
+Added: Number of shares issued
+Added: Additional paid-in capital
+Added: Accumulated other comprehensive loss
+Added: Accumulated deficit
+Added: Stock repurchased
+Added: Total stockholders’ equity
+Added: Balance at March 28, 2026
+Added: Share-based compensation expense
+Added: Other comprehensive income
+Added: Employee option exercises
+Added: Issuance of common stock
+Added: Balance at June 27, 2026
+Added: Number of shares issued
+Added: Additional paid-in capital
+Added: Accumulated other comprehensive income (loss)
+Added: Accumulated deficit
+Added: Stock repurchased
+Added: Total stockholders’ equity
Balance at December 27, 2025
Share-based compensation expense
−Removed: Net unrealized gains on available for sale securities
+Added: Other comprehensive loss
Employee option exercises
+Added: Issuance of common stock
+Added: Balance at June 27, 2026
+Added: Number of shares issued
+Added: Additional paid-in capital
+Added: Accumulated other comprehensive income
+Added: Accumulated deficit
+Added: Stock repurchased
+Added: Total stockholders’ equity
Balance at March 29, 2025
+Added: Share-based compensation expense
+Added: Other comprehensive income
+Added: Balance at June 28, 2025
+Added: Number of shares issued
+Added: Additional paid-in capital
+Added: Accumulated other comprehensive income
+Added: Accumulated deficit
+Added: Stock repurchased
+Added: Total stockholders’ equity
Balance at December 28, 2024
2 unchanged sentences
Reclassification adjustment for gains included in net income
−Removed: Balance at March 29,2025
+Added: Balance at June 28, 2025
See accompanying notes to condensed financial statements.
1 unchanged sentence
Condensed Statements of Cash Flows (Unaudited)
−Removed: Fiscal Quarters Ended
+Added: Six Months Ended
Cash flows from operating activities:
3 unchanged sentences
Share-based compensation
−Removed: Deferred taxes
Realized gain on sale of marketable securities
+Added: Deferred taxes
Accounts receivable-trade
13 unchanged sentences
Proceeds from employee stock options
+Added: Proceeds from issuance of common stock
Payments on note payable
8 unchanged sentences
CPS TECHNOLOGIES CORP.
−Removed: Notes to Condensed Financial Statements
+Added: Notes to Financial Statements
(1) Nature of Business
−Removed: CPS Technologies Corporation (the “Company” or “CPS”) provides advanced material solutions to the electronics, power generation, automotive and other industries.
+Added: 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.
4 unchanged sentences
These products expand our offerings in existing markets and enable penetration into new markets.
−Removed: 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.
+Added: The Company sells into several end markets including the wireless communications infrastructure market, high-performance microprocessor market, motor controller, and other microelectronics and defense markets.
( 2 ) Summary of Significant Accounting Policies
18 unchanged sentences
Investments consist of U.S.
−Removed: Treasury Bills with maturities up to one year.
−Removed: Since it is not currently managements 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.
+Added: Treasury Bills and US Government Bonds with maturities up to one year.
+Added: Since it is not currently managements 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 (loss).
(6) Fair value of Marketable Securities
5 unchanged sentences
The fair value hierarchy requires the use of observable market data when available in determining fair value.
−Removed: CPS’ marketable securities consist solely of US Government bonds and treasury bills with a maturity of 12 months or less and which fall under Level II of the fair value hierarchy.
−Removed: The value of these securities as of March 28, 2026 was $ 6,797,952 and, as of December 27, 2025, was $ 8,769,363 .
+Added: CPS’s marketable securities consist solely of US Treasury Bills and US Government bonds with a maturity of 12 months or less and which fall under Level II of the fair value hierarchy.
+Added: The value of these US Treasury Bills and US Government bonds as of June 27, 2026 was $ 3,801,426 and was $ 8,769,363 as of December 27, 2025.
+Added: June 27, 2026
+Added: December 27, 2025
Unrealized gain (loss)
3 unchanged sentences
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.
−Removed: Had there been a profit in Q1 2026, the dilutive effect would have been 364,994 shares.
Common stock equivalents are excluded from the diluted calculations when a net loss is incurred as they would be anti-dilutive.
+Added: Had there been a profit year to date in 2026, the dilutive effect would have been 379,047 shares.
+Added: Common stock equivalents are excluded from the diluted calculations when a net loss is incurred as they would be anti-dilutive.
The following table presents the calculation of both basic and diluted EPS:
Three Months Ended
+Added: Six Months Ended
Basic EPS Computation:
Net income (loss)
−Removed: Weighted average common shares outstanding
+Added: Weighted average
+Added: Common shares
Diluted EPS Computation:
7 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.
−Removed: The real estate lease expiring in 2028 (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.
+Added: The real estate lease expiring in 2028 (the “Norton facility lease”) is included as a right-of-use lease asset and corresponding lease liability (current and non-current portions) 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.
4 unchanged sentences
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.
−Removed: Annual rental payments range from $ 152 thousand to $ 165 thousand through maturity.
−Removed: 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 28, 2026
+Added: Annual rental payments are $ 169 thousand through maturity.
+Added: 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 27, 2026:
(Dollars in Thousands)
Maturity of capitalized lease liabilities
+Added: Lease payments
Remaining 2026
7 unchanged sentences
Other Information
−Removed: Weighted-average remaining lease term for capitalized operating leases (in months)
−Removed: Weighted-average discount rate for capitalized operating leases
+Added: Remaining lease term for capitalized operating lease (months)
+Added: Discount rate for capitalized operating leases
Operating Lease Costs and Cash Flows
−Removed: Operating lease cost and cash paid was $ 42 thousand during the first quarter of 2026.
−Removed: This cost is related to its long-term operating lease.
+Added: Operating lease cost and cash paid was $ 42 thousand during the second quarter of 2026 and $ 84 thousand for the six months ended June 27, 2026.
+Added: 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.
−Removed: During the quarters ended March 28, 2026 and March 29, 2025, a total of 0 and 115,000 stock options, respectively, were granted to employees under the Company’s 2020 Equity Incentive Plan (the “Plan”) and a total of 0 and 75,000 stock options, respectively, were granted to outside directors during the quarters ended March 28, 2026 and March 29, 2025.
−Removed: During the quarters ended March 28, 2026 and March 29, 2025, there were 19,000 and 0 options exercised, respectively.
−Removed: During the quarters ended March 28, 2026 and March 29, 2025, there were 0 and 45,000 options expired and 2,750 and 0 options forfeited, respectively.
−Removed: During the quarters ended March 28, 2026 and March 29, 2025, the Company repurchased 671 and 0 shares, respectively for employees to facilitate their exercise of stock options.
−Removed: There were also 1,046,050 options outstanding at a weighted average price of $ 2.49 with a weighted average remaining contractual term of 6.8 years as of March 28, 2026 and there were 680,475 shares exercisable at a weighted average price of $ 2.47 with a weighted average remaining term of 6.3 years.
−Removed: There were 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.
+Added: During the quarter ended June 27, 2026, 99,600 stock options were granted to employees under the Company’s 2020 Equity Incentive Plan Stock Incentive Plan (the “Plan”) and 37,500 stock options were granted to outside directors.
+Added: For the six months ended June 27, 2026 a total of 99,600 stock options and 37,500 stock options were granted to employees and directors, respectively.
+Added: During the quarter ended June 28, 2025, no stock options were granted to employees under the Plan and no stock options were granted to outside directors.
+Added: 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.
+Added: During the three and six months ended June 27, 2026, there were 253,250 and 272,250 options exercised and corresponding shares issued at a weighted average price of $ 2.37 and $ 2.28 .
+Added: During the three and six months ended June 28, 2025, there were no options exercised and corresponding shares issued.
+Added: During the three and six months ended June 27, 2026, the Company repurchased 72,271 and 72,942 shares for employees to facilitate their exercise of stock options.
+Added: 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.
+Added: There were also 929,900 options outstanding at a weighted average price of $ 2.80 with a weighted average remaining contractual term of 7.31 years as of June 27, 2026, and there were 476,925 options exercisable at a weighted average price of $ 2.73 with a weighted average remaining term of 6.67 years.
+Added: There were 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 June 28, 2025 and there were 594,100 shares exercisable at a weighted average price of $ 2.40 with a weighted average remaining term of 6.49 years.
The Plan, as amended, is authorized to issue 1,500,000 shares of common stock.
−Removed: As of March 28, 2026, there were 418,370 shares available for future grants.
−Removed: As of March 28, 2026, there was $ 418 thousand of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Plan;
+Added: As of June 27, 2026, there were 281,270 shares available for future grants under the 2020 Plan and 49,200 shares outstanding under the 2009 Plan.
+Added: 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.
+Added: As of June 27, 2026, there was $ 582 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 2.30 years.
−Removed: During the quarters ended March 28, 2026 and March 29, 2025, the Company recognized approximately $ 48 thousand and $ 122 thousand, respectively, as shared-based compensation expense related to previously granted shares under the Plan.
+Added: During the three and six months ended June 27, 2026, the Company recognized $ 174,845 and $ 223,094 , respectively, as shared-based compensation expense related to previously granted shares under the Plan.
+Added: 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.
(10) Inventories
3 unchanged sentences
Finished goods
−Removed: Gross inventory
+Added: Total inventory
Reserve for obsolescence
6 unchanged sentences
Total accrued expenses
−Removed: ( 12 ) Revolving Line of Credit
−Removed: In May 2023, the Company entered into a line of credit (LOC) in the amount of $ 3.0 million with Rockland Trust Company.
−Removed: 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 ( 6.75 % at March 28, 2026).
−Removed: On March 28, 2026 and March 29, 2025, the Company had $ 0 of borrowings under this LOC and its borrowing base at the time would have permitted an additional $ 2.7 million and $ 3.0 million, respectively, to have been borrowed.
−Removed: The LOC remains in effect until terminated per mutual agreement by both parties.
−Removed: Total interest expense for Q1 2026 was $ 0 and was $ 0 for Q1 2025.
+Added: ( 12 ) Line of Credit
+Added: The Company has a $ 3.0 million revolving line of credit (LOC) with Rockland Trust Company.
+Added: 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 ( 6.75 % at June 27, 2026) .
+Added: On June 27, 2026 and 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.
+Added: The line of credit remains in effect until terminated per mutual agreement by both parties.
+Added: Total interest expense in Q1 and Q2 of 2026 was $ 0 and it was $ 0 for Q1 and Q2 of 2025.
+Added: (13) Segment Reporting
+Added: The Company views its operations and manages its business as one segment.
+Added: The Company produces and sells advanced material solutions, primarily metal matrix composites, to assemblers of high density electronics and other specialty components and subassemblies.
+Added: The Company also assembles housings and packages for hybrid circuits, selling to the same customers mentioned above.
+Added: These customers represent a single market or segment with similar stringent and well-defined requirements.
+Added: The Company’s customers, in turn, sell the components and subassemblies which incorporate the products into many different end markets, however, these end markets are two to three levels removed from the Company.
+Added: The Company also sells armor strike faces to armor manufacturers, using the same manufacturing process used in its other product solutions.
+Added: The Company makes operating decisions and assesses financial performance only for the Company as a whole and does not make operating decisions or assess financial performance by the end markets which ultimately use the products.
+Added: Our chief operating decision maker (CODM) is Brian Mackey, our President and CEO.
+Added: The Company's CODM regularly reviews financial information presented and does not evaluate the Company's operating segment using asset or liability information.
+Added: Instead, the CODM uses revenue, gross margin, and net income or loss to allocate operating and capital resources and assess performance by comparing actual results to historical results and previously forecasted financial information.
+Added: The following table presents segment information for the Company's single reporting segment:
+Added: June 27, 2026
+Added: June 28, 2025
+Added: June 27, 2026
+Added: June 28, 2025
+Added: Product sales
+Added: Cost of product sales
+Added: Selling, general, and administrative expenses
+Added: Income (loss) from operations
+Added: Other income, net
+Added: Income (loss) before income taxes
+Added: Income tax provision (benefit)
+Added: Net income (loss)
( 14 ) 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.
−Removed: The Company believes that it is “more likely than not ” that the Company will be able to fully utilize the deferred tax asset.
−Removed: For the first quarter of 2026 the deferred tax asset was increased $ 84 for the estimated tax benefit on Q1 net operating loss.
−Removed: (14) Enactment of the One Big Beautiful Bill Act
+Added: Management has determined that a valuation allowance is not needed as it expects that the deferred tax asset will be fully utilized.
+Added: For the three and six months ended June 27, 2026 the deferred tax asset increased by $ 150,106 and $ 232,812 for the estimated tax benefit on Q2 and year to date net operating losses, respectively.
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.
4 unchanged sentences
This change may materially impact the Company’s deferred tax assets and current tax expense depending on the volume of qualifying expenditures.
−Removed: In Q1 2026 the Company expensed $ 216,914 and in 2025, the Company expensed $ 867,657 of unamortized Section 174 R&E expenditures
It is anticipated that the unamortized Section 174 R&E expenditures at Q2 2026 will be expensed as follows (subject to further analyses and discussions):
1 unchanged sentence
Expense 12.5% of 2022-2024
−Removed: Expense 12.5% of 2022-2024
Enhancement of Section 179 Expensing:
10 unchanged sentences
However, the full effect of these provisions will depend on the Company's future capital expenditures, R&E activities, financing arrangements, and international operations.
−Removed: (15) Segment Reporting
−Removed: The Company views its operations and manages its business as one segment.
−Removed: The Company produces and sells advanced material solutions, primarily metal matrix composites, to assemblers of high density electronics and other specialty components and subassemblies.
−Removed: The Company also assembles housings and packages for hybrid circuits, selling to the same customers mentioned above.
−Removed: These customers represent a single market or segment with similar stringent and well-defined requirements.
−Removed: The Company’s customers, in turn, sell the components and subassemblies which incorporate the products into many different end markets, however, these end markets are two to three levels removed from the Company.
−Removed: The Company also sells armor strike faces to armor manufacturers, using the same manufacturing process used in its other product solutions.
−Removed: The Company makes operating decisions and assesses financial performance only for the Company as a whole and does not make operating decisions or assess financial performance by the end markets which ultimately use the products.
−Removed: Our chief operating decision maker (CODM) is Brian Mackey, our President and CEO.
−Removed: The Company's CODM regularly reviews financial information presented and does not evaluate the Company's operating segment using asset or liability information.
−Removed: Instead, the CODM uses revenue, gross margin, and net income or loss to allocate operating and capital resources and assess performance by comparing actual results to historical results and previously forecasted financial information.
−Removed: The following table presents segment information for the Company's single reporting segment:
−Removed: Product sales
−Removed: Cost of product sales
−Removed: Selling, general, and administrative expenses
−Removed: Income (loss) from operations
−Removed: Other income, net
−Removed: Income (loss) before income tax
−Removed: Income tax provision (benefit)
−Removed: Net income (loss)
+Added: ( 15 ) Equity Capital Raise
+Added: On May 27, 2026, the Company filed with the Secretary of State of Delaware a Certificate of Amendment of the Company’s Restated Certificate of Incorporation, effective as the same date.
+Added: The amendment increased the number of shares of common stock that the Company is authorized to issue from 20,000,000 to 25,000,000 .
+Added: On May 27, 2026, the Company entered into securities purchase agreements with certain institutional investors for the sale by the Company of 1,200,000 shares of common stock, par value $0.01 per share, in a registered direct offering (the “Offering”), at a purchase price of $ 8.00 per share.
+Added: The Offering was priced at-the-market under Nasdaq rules.
+Added: The closing of the Offering occurred on May 29, 2026.
+Added: The net proceeds to the Company were $ 8,977,000 .
MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
5 unchanged sentences
Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof.
−Removed: 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.
+Added: The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements which may be made.
Critical Accounting Policies
14 unchanged sentences
The Company seeks to have a portfolio of products which include products in every stage of the technology adoption lifecycle at our customers.
−Removed: CPS’ growth is dependent upon the level of demand for those products already in production, as well as its success in achieving new "design wins" for future products.
+Added: CPS’s growth is dependent upon the level of demand for those products already in production, as well as its success in achieving new "design wins" for future products.
As a manufacturer of highly technical and custom products, the Company incurs fixed costs needed to support the business, but which do not vary significantly with changes in sales volume.
4 unchanged sentences
CPS believes that the Company is well positioned to offer our solutions to current and new customers as these demands grow.
−Removed: CPS was incorporated in Massachusetts in 1984 as Ceramics Process Systems Corporation and reincorporated in Delaware in April 1987 through a merger into a wholly-owned Delaware subsidiary organized for purposes of the reincorporation.
−Removed: In July 1987, CPS completed our initial public offering of 1.5 million shares of our Common Stock.
−Removed: In March 2007, we changed our name from Ceramics Process Systems Corporation to CPS Technologies Corporation.
−Removed: Results of Operations for the First Fiscal Quarter of 2026 (Q1 2026) Compared to the First Fiscal Quarter of 2025 (Q1 2025);
+Added: Results of Operations for the Second Fiscal Quarter of 2026 (Q2 2026) Compared to the Second Fiscal Quarter of 2025 (Q2 2025);
(all $ in 000 ’ s)
−Removed: Revenues totaled $7,029 in Q1 2026 compared with $7,506 in Q1 2025, a decrease of 6%.
−Removed: The major factor contributing to this decrease is the reduction in demand from one of our major customers.
−Removed: As announced in Q4 2025, CPS received a large order from this customer covering the twelve month period beginning October 2025.
−Removed: Through Q1 the customer has taken well less than half of the quantities ordered.
−Removed: CPS has continued to produce their products at the higher rate, both so we can meet there needs if their demand increases without putting undue stress on our production line, and in anticipation of our potential move to a larger facility, allowing us to continue to meet their needs during the move.
−Removed: Gross margin in Q1 2026 totaled $607 or 9% of sales.
−Removed: This compares with gross margin in Q1 2025 totaled $1,231 or 16% of sales.
−Removed: This decrease was primarily due to the impact of lower sales volumes on fixed costs, the impact of the price of gold, billed at $1,019 at approximately a 0% margin, and increased R&D spending on our margins.
−Removed: Selling, general and administrative (SG&A) expenses totaled $1,130 in Q1 2026 compared with SG&A expenses of $1,101 in Q1 2025, a 3% increase year over year.
−Removed: This increase was primarily due to fees associated with the Company’s CFO search, in anticipation of the future retirement of the current CFO, and higher foreign exchange costs this year as compared to last year.
−Removed: The Company had an operating loss of $523 in Q1 2026 compared with operating income of $130 in Q1 2025.
−Removed: This decrease was a result of the decreased gross margin discussed above.
−Removed: The net after tax loss was $294 in Q1 2026 compared to after tax income of $96 in Q1 2025.
−Removed: CPS does not rely on raw materials from Ukraine, Russia, Iran, Israel or Gaza.
−Removed: As a result, we do not believe that the Russian invasion of Ukraine or the conflicts in Middle East will have a direct impact on our results.
−Removed: Most of our raw materials are sourced domestically.
−Removed: In some cases, our suppliers may be sourcing these materials from a foreign source.
−Removed: To date, we have not seen any significant cost increases that we believe are attributable to tariffs, however this could change in the future.
+Added: Revenues totaled $8,309 in Q2 2026 compared with $8,078 generated in Q2 2025, an increase of 3%.
+Added: The increase was primarily driven by higher demand for components used in the semiconductor capital equipment and defense supply chains.
+Added: This growth was partially offset by lower order volumes from certain customers that use baseplates in power electronics, following significant growth in demand from those customers in 2025.
+Added: Gross profit in Q2 2026 totaled $1,229 or 15% of sales.
+Added: This compares with a gross profit in Q2 2025 of $1,336 or 17% of sales.
+Added: Excluding the impact of higher gold plating costs, underlying gross margin performance remained consistent with the prior year.
+Added: Increases in gold costs are passed through to customers without a corresponding markup, resulting in approximately equal increases in both sales and cost of sales.
+Added: As a result, while gross profit dollars are largely unaffected, the gross profit percentage declines.
+Added: Selling, general and administrative (SG&A) expenses totaled $1,487 in Q2 2026 compared with SG&A expenses of $1,199 in Q2 2025.
+Added: The increase was primarily attributable to higher stock-based compensation expense resulting from grants to directors that vested immediately during the second quarter of 2026.
+Added: In 2025 these options were granted during the first quarter.
+Added: The remaining increase was primarily due to higher marketing expenses and one-time legal costs.
+Added: The Company reported an operating loss of ($259) in Q2 2026, compared with operating income of $137 in Q2 2025.
+Added: The change was primarily attributable to the increase in SG&A expenses discussed above.
+Added: Other income, consisting primarily of interest income, increased to $146 during Q2 2026 from $19 during Q2 2025, reflecting higher interest earned on the proceeds from two recent capital issues.
+Added: Together with the income tax benefit recognized on the operating loss, this resulted in net income of $38 for Q2 2026, compared with $104 in Q2 2025.
+Added: Results of Operations for the First Six Months of 2026 Compared to the First Six Months of 2025 (all $ in 000s)
+Added: Total revenue was $15,338 in the first half of 2026, a $247 decline compared with total revenue of $15,585 in the first half of 2025.
+Added: This decline happened in Q1 2026 which saw a reduction in demand from one major customer which has started to be recovered in Q2 2026.
+Added: Gross profit in the first six months of 2026 totaled $1,836 or 12% of sales, compared with $2,567, or 16% of sales, for the first six months of 2025.
+Added: The decrease in gross margin percentage was partly attributable to higher gold prices, which increased 40% compared with the first half of 2025.
+Added: As previously mentioned, these higher gold costs without a corresponding markup caused the gross profit percentage to decline without a material impact on gross profit dollars.
+Added: We also saw increases in other material costs that were partially offset by improved labor and overhead costs compared with the prior year.
+Added: Selling, general and administrative (SG&A) expenses were $2,617 during the first six months of 2026, up $316 compared with SG&A expenses of $2,301 in the first six months of 2025.
+Added: These increases relate to the previously mentioned business development and legal costs during Q2 as well as the new CFO search and higher foreign exchange costs in Q1.
+Added: The higher material and SG&A costs resulted in an operating loss of ($781) in 2026 compared with an operating profit of $267 in 2025.
+Added: During the first half of 2026, the Company had net other income of $292 This consists primarily of interest income and compares with net other income of $70 realized during the first half of 2025.
+Added: The increase in net other income is due to funds placed on investment from the capital raise in the last quarter of 2025 and the end of May 2026.
+Added: In the first six months of 2026 the Company had a net loss of ($256) compared with net income of $200 in the same period last year.
+Added: CPS does not rely on raw materials from Ukraine, Russia, Israel or Gaza.
+Added: 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.
+Added: 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.
−Removed: 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.
+Added: 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.
−Removed: Wages have also been impacted by inflation.
−Removed: We have instituted a combination of wage increases as well as more competitive benefits in order to retain the personnel making up our workforce.
−Removed: The factors mentioned above, including inflation and tariffs, create elevated uncertainty regarding future financial performance.
+Added: Further, several of our larger customers buy from our major competitor in Japan.
+Added: The impact of the fluctuation of foreign exchange rates can create situations where our pricing to foreign customers can be more or less competitive as compared to our Japanese competitor.
+Added: We are beginning to see an impact of tariffs on our cost structure.
+Added: 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.
+Added: While the overall impact of these costs increases is relatively small, they are still enough to impact our margins.
+Added: 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.
+Added: These factors combine to create a higher degree of uncertainty regarding future financial performance.
Liquidity and Capital Resources (all $ in 000 ’ s unless noted)
−Removed: The Company’s cash and cash equivalents at March 28, 2026 totaled $5,724, with marketable securities of $6,798.
−Removed: This compares to cash and cash equivalents at December 27, 2025 of $4,466 and marketable securities of $8,769.
−Removed: The change in cash and securities is predominantly due to our increased inventory, purchases of fixed assets and reduction of accrued expenses, offset by a reduction in accounts receivable.
−Removed: Trade accounts receivable at March 28, 2026 totaled $3,789 compared with $5,245 at December 27, 2025.
+Added: The Company’s liquid assets at June 27, 2026 consist of cash and cash equivalents of $15,355 and marketable debt securities with a fair value of $3,801.
+Added: This compares to cash and cash equivalents at December 27, 2025 of $4,466 and $8,769 marketable debt securities.
+Added: The increase in liquidity came from a capital raise on May 29, 2026 involving the issuance of 1,200,000 shares of common stock for net proceeds of $8,997.
+Added: Accounts receivable at June 27, 2026 totaled $4,942 compared with $5,245 at December 27, 2025.
Days sales outstanding (DSO) decreased from 61 days at the end of 2025 to 42 days at the end of Q2 2026.
−Removed: The reason for this decrease is that one of our major customers who historically pays monthly the first week of each month made their April payment early, at the end of March.
−Removed: The accounts receivable balances at December 27, 2025, and March 28, 2026 were both net of an allowance for credit losses of $10.
−Removed: Inventories totaled $7,144 at March 28, 2026 compared with inventory totaling $5,598 at December 27, 2025.
+Added: The decrease in DSO was primarily due to the timing and mix of sales and related customer collections during the period.
+Added: The accounts receivable balances at June 27, 2026 and December 27, 2025 are both net of an allowance for credit losses of $10.
+Added: Inventories totaled $8,649 at June 27, 2026 compared with inventory totaling $5,598 at December 27, 2025.
The inventory turnover in the most recent four quarters ending Q2 2026 was 6.6 times (based on a 5 quarter end average) compared with 5.4 times averaged during the four quarters of 2025.
−Removed: Due to reduced demand from a major customer and the pending move, the Company has been increasing its inventory levels.
+Added: Finished goods inventory increased primarily due to the planned build of inventory for products supported by long-term customer orders.
+Added: The additional inventory is intended to maintain continuity of customer supply during the Company’s planned facility relocation and associated production transition.
The Company expects it will continue to be able to fund its operations for the remainder of 2026 from operations and existing cash balances.
4 unchanged sentences
Contractual Obligations (all $ in 000 ’ s unless otherwise noted)
−Removed: The Company maintains a $3.0 million revolving line of credit (LOC) with Rockland Trust Company.
−Removed: 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.
−Removed: On March 28, 2026, the Company had $0 of borrowings under this LOC and its borrowing base at the time would have permitted the full $2.7 million to have been borrowed.
−Removed: The LOC remains in effect until terminated per mutual agreement by both parties.
+Added: The Company has a line of credit (LOC) in the amount of $3.0 million with Rockland Trust Company.
+Added: 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 6/27/2026).
+Added: On June 27, 2026, 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.
+Added: In March 2020, the Company acquired a scanning acoustic microscope for a price of $208 thousand.
+Added: The full amount was financed through a 5 year note payable with a financing company.
+Added: This note was paid in full in the first quarter of 2025.
The Company has one real estate lease expiring in February 2028.
1 unchanged sentence
None of these have been capitalized.
−Removed: (Note 6, Commitments and Contingencies)
+Added: (Note 8, Leases)
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.