What changed in this filing

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Item 1. Financial Statements

2024-08-13 compared with 2024-05-13 · 260 added, 219 removed, 223 unchanged (68% of the section changed)

3 unchanged sentences

thousands, except share amounts)

June 30, 2024

December 31, 2023

Current assets

Cash and cash

Accounts receivable, net

of allowance for credit losses

Cash and cash equivalents

Accounts receivable, net of allowance for credit losses

Contract assets

2 unchanged sentences

Property, plant and equipment, net

LIABILITIES AND STOCKHOLDERS’

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

1 unchanged sentence

Accrued expenses

Current maturities of long-term

Deposit from purchaser

of MesoScribe assets-Note 11

Current maturities of long-term debt

Contract liabilities

Deposit from purchaser of MesoScribe assets-Note 11

Total current liabilities

1 unchanged sentence

Total liabilities

Contingencies – Note 12

Stockholders’ equity:

Common stock - $ 0.01 par

value – 20,000,000 shares authorized;

6,824,511 issued and outstanding at March 31, 2024 and December 31, 2023

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

issued and outstanding 6,825,338 at June 30, 2024 and 6,824,511 at December 31, 2023

Additional paid-in capital

6 unchanged sentences

thousands, except per share and share amounts)

Months Ended March 31,

Three months ended

Six months ended

Cost of revenue

1 unchanged sentence

Research and development

and administrative

Selling and shipping

General and administrative

Loss on disposition of Tantaline

Impairment charge

Total operating expenses

4 unchanged sentences

Foreign exchange income

Total other income,

Loss before income taxes

Other income (expense)

Total other income, net

Loss before income tax

Income tax expense

1 unchanged sentence

Loss per common share - diluted

Weighted average common shares outstanding:

Weighted average common shares

accompanying notes are an integral part of these condensed consolidated financial statements

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thousands, except share amounts)

months ended March 31, 2024 and 2023

months ended June 30, 2024 and 2023

at April 1, 2024

at June 30, 2024

at April 1, 2023

of stock options and

issuance of shares

at June 30, 2023

months ended June 30, 2024 and 2023

Balance at January 1, 2024

Stock-based compensation

Balance at March 31, 2024

Balance at June 30, 2024

Balance at January 1, 2023

Stock-based compensation

Exercise of stock options and issuance

Balance at March 31, 2023

Exercise of stock options and

issuance of shares

Balance at June 30, 2023

accompanying notes are an integral part of these condensed consolidated financial statements.

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Consolidated Statements of Cash Flows

Months Ended March 31,

Six months ended

Cash flows from operating activities:

Adjustments to reconcile

net loss to net cash used in operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Stock-based compensation

Depreciation and amortization

Changes in assets and liabilities:

Loss on disposition of Tantaline

Impairment charge

Changes in assets and liabilities, net of effects of disposition of Tantaline:

Accounts receivable

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Accrued expenses

Net cash used in operating

Contract liabilities

Net cash used in operating activities

Cash flows from investing activities:

of property and equipment

Net cash used in investing

Purchases of property and equipment

Net cash used in connection with disposition of Tantaline

Net cash used in investing activities

Cash flows from financing activities

Repayments of long-term

from exercise of stock options

Net cash (used in) provided

by financing activities

Payments of long-term debt

Proceeds from exercise of stock options

Net cash (used in) provided by financing activities

Net decrease in cash and cash equivalents

Cash and cash equivalents

at beginning of period

Cash and cash equivalents

at end of period

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Supplemental disclosure of cash flow information:

Income taxes paid

Interest paid

accompanying notes are an integral part of these condensed consolidated financial statements

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The operating results for the

three months ended March 31, 2024 are not necessarily indicative of the results that can be expected for the year ending December 31,

three and six months ended June 30, 2024 are not necessarily indicative of the results that can be expected for the year ending December

condensed consolidated balance sheet as of December 31, 2023 has been derived from the audited consolidated financial statements at such

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These reclassifications had no effect on net loss.

March 31, 2024, the Company had $ 11.9 million in cash and cash equivalents.

June 30, 2024, the Company had $ 10.0 million in cash and cash equivalents.

The Company anticipates that the existing cash and cash equivalents

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the date of issuance of these condensed consolidated financial statements

to Condensed Consolidated Financial Statements

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606 -

Revenue from Contracts with Customers (“ASC 606 ” ), the Company records revenue in an amount that reflects the consideration

to which the Company expects to be entitled in exchange for goods or services promised to its customers.

Under ASC 606 , the Company

follows a five-step model to:

accordance with FASB ASC 606 - Revenue from Contracts with Customers (“ASC 606”), the Company records revenue in an amount

that reflects the consideration to which the Company expects to be entitled in exchange for goods or services promised to its customers.

Under ASC 606, the Company follows a five-step model to:

(1) identify the contract with the customer;

(2) identify the performance obligations in the contract;

(2) identify the performance obligations

in the contract;

(3) determine the transaction price for the contract;

(4) allocate the transaction price to the performance obligations;

and (5) recognize

revenue using one of the following two methods:

Company designs, manufactures and sells custom chemical vapor deposition, thermal process equipment and other equipment through contractual

These system sales require the Company to deliver functioning equipment that is generally completed within two to eighteen

months from commencement of order acceptance.

For systems sales that meet the criteria to recognize revenue over time, the Company recognizes

revenue over time by using an input method based on costs incurred as it depicts the Company’s progress toward satisfaction of

the performance obligation.

For system sales that do not meet the criteria to recognize revenue over time based on the contract provisions,

the Company recognizes revenue based on point in time.

the over time method, revenue arising from fixed price contracts is recognized as work is performed based on the ratio of costs incurred

to date to the total estimated costs at completion of the performance obligations.

Incurred costs include all direct material and labor

costs and those indirect costs related to contract performance, such as supplies, tools, repairs and depreciation costs.

and (5) recognize revenue using one of the following two methods:

Company designs, manufactures and sells custom chemical vapor deposition equipment through contractual agreements.

These system sales

require the Company to deliver functioning equipment that is generally completed within two to eighteen months from commencement of order

For systems sales that meet the criteria to recognize revenue over time, the Company recognizes revenue over time by using

an input method based on costs incurred as it depicts the Company’s progress toward satisfaction of the performance obligation.

For system sales that do not meet the criteria to recognize revenue over time based on the contract provisions, the Company recognizes

revenue based on point in time as discussed below.

this method, revenue arising from fixed price contracts is recognized as work is performed based on the ratio of costs incurred to date

to the total estimated costs at completion of the performance obligations.

Incurred costs include all direct material and labor costs

and those indirect costs related to contract performance, such as supplies, tools, repairs and depreciation costs.

Contract material

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to complete the projects.

In making such estimates, significant judgment is required to evaluate

assumptions related to the costs to complete the projects, including materials, labor and other system costs.

If the estimated total

costs on any contract are greater than the net contract revenues, the Company recognizes the entire estimated loss in the period the

loss becomes known and can be reasonably estimated.

There were no material impairment losses recognized on contract assets during the

three months ended March 31, 2024 and 2023.

In making such estimates, significant judgment is required to evaluate assumptions related to the costs to

complete the projects, including materials, labor and other system costs.

If the estimated total costs on any contract are greater than

the net contract revenues, the Company recognizes the entire estimated loss in the period the loss becomes known and can be reasonably

There were no material impairment losses recognized on contract assets during the three

and six months ended June 30, 2024 and 2023 .

timing of revenue recognition, billings and collections results in accounts receivables, unbilled receivables or contract assets and

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are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals or upon achievement of contractual

to Condensed Consolidated Financial Statements

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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The Company typically receives down payments upon

receipt of order and progress payments as the system is manufactured.

receipt of orders and progress payments as the system is manufactured.

assets and contract liabilities are classified as current as these contracts in progress are expected to be substantially completed within

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the customer.

For the three months ended March 31, 2024 and 2023, all system equipment sales were recorded over time by using an input

For the three and six months ended June 30, 2024 and 2023, all system equipment sales were recorded over time by using

an input method except for one system equipment contract in the second quarter of 2023 where the revenue was to be recognized at the

point in time when the equipment was transferred to the customer.

Subsequent to June 30, 2023, this one system equipment contract was

modified such that the revenue under this contract would be recognized over time using an input method based on the revised contract

provisions and the fact that the equipment does not have an alternative use.

to Condensed Consolidated Financial Statements

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(raw materials, work-in-process and finished goods) are valued at the lower of cost (determined on the first-in, first-out method) or

net realizable value.

Work-in-process and finished goods inventory reflect all accumulated production

costs, which are comprised of direct production costs and overhead, and is reduced by amounts recorded in cost of sales as the related

revenue is recognized.

Indirect costs relating to long-term contracts, which include expenses such as general and administrative, are

charged to expense as incurred and are not included in our cost of sales or work-in-process and finished goods inventory.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

inventory or inventory in excess of management’s estimated usage requirement is written down to its estimated net realizable value

if less than cost.

The Company evaluates usage requirements by analyzing historical usage, anticipated demand, alternative uses of materials,

and other qualitative factors.

Unanticipated changes in demand for the Company’s products may require a write down of inventory,

which would be reflected in cost of sales in the period the revision is made.

Work-in-process and finished goods inventory reflect all accumulated production costs, which are comprised of direct

production costs and overhead, and is reduced by amounts recorded in cost of sales as the related revenue is recognized.

Indirect costs

relating to long-term contracts, which include expenses such as general and administrative, are charged to expense as incurred and are

not included in our cost of sales or work-in-process and finished goods inventory.

Obsolete inventory or inventory in excess of management’s estimated usage requirement is written down to its estimated net realizable

value if less than cost.

The Company evaluates usage requirements by analyzing historical usage, anticipated demand, alternative uses

of materials and other qualitative factors.

Unanticipated changes in demand for the Company’s products may require a write down

of inventory, which would be reflected in cost of sales in the period the revision is made.

Company typically provides standard warranty coverage on its systems for one year from the date of final acceptance or fifteen months

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Accounting Standards

December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, “ Income Taxes (Topic 740):

Improvements to Income Tax Disclosures ,” which requires public business entities to disclose additional information in specified

categories with respect to the reconciliation of the effective tax rate to the statutory rate for federal, state, and foreign income

It also requires greater detail about individual reconciling items in the rate reconciliation to the extent the impact of those

items exceeds a specified threshold.

In addition to new disclosures associated with the rate reconciliation, the ASU requires information

pertaining to taxes paid (net of refunds received) to be disaggregated for federal, state, and foreign taxes and further disaggregated

for specific jurisdictions to the extent the related amounts exceed a quantitative threshold.

The ASU also describes items that need

to be disaggregated based on their nature, which is determined by reference to the item’s fundamental or essential characteristics,

such as the transaction or event that triggered the establishment of the reconciling item and the activity with which the reconciling

item is associated.

The ASU eliminates the historic requirement that entities disclose information concerning unrecognized tax benefits

having a reasonable possibility of significantly increasing or decreasing in the 12 months following the reporting date.

effective for annual periods beginning after December 15, 2024.

Early adoption is permitted for annual financial statements that have

not yet been issued or made available for issuance.

This ASU should be applied on a prospective basis;

however, retrospective application

is permitted.

We are currently evaluating the impact that ASU 2023 – 09 may have on our consolidated financial statements.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segments ,”

which aims to improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for

all public entities to enable investors to develop more decision-useful financial analyses.

Currently, Topic 280 requires that a public

entity disclose certain information about its reportable segments.

For example, a public entity is required to report a measure of segment

profit or loss that the CODM uses to assess segment performance and make decisions about allocating resources.

Topic 280 also requires

other specified segment items and amounts, such as depreciation, amortization, and depletion expense, to be disclosed under certain circumstances.

The amendments in this ASU do not change or remove those disclosure requirements and do not change how a public entity identifies its

operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments.

This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December

Early adoption is permitted.

We are currently evaluating the impact that ASU 2023 – 07 may have on our consolidated financial

Improvements to Reportable Segment Disclosures .

The amendments in this update expand annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures

about significant segment expenses.

This update is effective for our annual report for fiscal year 2025, and interim periods thereafter,

with early adoption permitted, and will be applied retrospectively to all prior periods presented in the financial statements.

currently evaluating the impact of this ASU on our Consolidated Financial Statements and related disclosures.

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvement to Income Tax Disclosures .

The amendments

further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income

taxes paid by jurisdiction.

This ASU is effective for our annual report for fiscal year 2026, with early adoption permitted, and should

be applied either prospectively or retrospectively.

We are currently evaluating

the timing of adoption and impact of this ASU on our Consolidated Financial Statements and related disclosures.

to Condensed Consolidated Financial Statements

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Company believes there is no additional new accounting guidance adopted, but not yet effective, that is relevant to the readers of our

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and cash equivalents

Company had cash and cash equivalents of $ 11.9 million and $ 14.0 million at March 31, 2024 and December 31, 2023, respectively.

Company had cash and cash equivalents of $ 10.0 million and $ 14.0 million at June 30, 2024 and December 31, 2023, respectively.

invests excess cash in U.S.

treasury bills, certificates of deposit or deposit accounts, all with maturities of less than three months.

Cash equivalents were $ 11.1 million and $ 12.1 million at March 31, 2024 and December 31, 2023, respectively.

Company places most of its temporary cash investments with financial institutions, which from time to time may exceed the Federal Deposit

Insurance Corporation limit.

The amount at risk at March 31, 2024 and December 31, 2023 was $ 0.3 million and $ 1.5 million, respectively.

Cash equivalents consisting of U.S.

treasury bills were $ 9.8 million and $ 12.1 million at June 30, 2024 and December 31, 2023, respectively.

Company places most of its temporary cash investments in the United States with financial institutions, which from time to time may exceed

the Federal Deposit Insurance Corporation limit.

The amount at risk at June 30, 2024 and December 31, 2023 was $ 0.1 million and $ 1.5

million, respectively.

Company sells products and services to various companies across several industries in the ordinary course of business.

The Company performs

ongoing credit evaluations to assess the probability of accounts receivable collection based on a number of factors, including past transaction

experience, evaluation of their credit history and review of the invoicing terms of the contract to determine the financial strength

of its customers.

receivable are presented net of an allowance for credit losses of approximately $ 36,000 at both June 30, 2024 and December 31, 2023.

The allowance is based on prior experience and management’s evaluation of the collectability of accounts receivable.

of credit losses requires consideration of historical loss experience, including the need to adjust for changing business conditions,

and judgments about the probable effects of relevant observable data, including present economic conditions such as delinquency rates

and the financial health of specific customers.

Future changes to the estimated allowance for credit losses could be material to our

results of operations and financial condition.

to Condensed Consolidated Financial Statements

CONCENTRATION OF CREDIT RISK (continued)

Company routinely assesses the financial strength of its customers .

In accordance with the “expected credit loss”

model, the carrying amount of accounts receivable is reduced by a valuation allowance that reflects the best estimate of the amounts

the Company does not expect to collect.

In addition to reviewing delinquent accounts receivable, the Company consider many factors in

estimating our reserve, including types of customers and their credit worthiness, experience and historical data adjusted for current

conditions and reasonable supportable forecasts .

The Company records an allowance for credit losses based upon a specific review

of all significant outstanding invoices.

For those invoices not specifically reviewed, provisions are provided based upon the collection

history, current economic trends and reasonable supportable forecasts.

receivable is presented net of an allowance for credit losses of $ 36,000 as of both March 31, 2024 and December 31, 2023.

allowance is based on prior experience and management’s evaluation of future economic conditions.

Measurement of credit losses

requires consideration of historical loss experience, including the need to adjust for changing business conditions, and judgments about

the probable effects of relevant observable data, including present economic conditions such as delinquency rates and the financial health

of specific customers.

Future changes to the estimated allowance for doubtful accounts could be material to our results of operations

and financial condition.

March 31, 2024, the accounts receivable balance included an amount from one customer that totaled 67.2 % of total accounts receivable.

As of December 31, 2023, the accounts receivable balance includes amounts from three customers

that represented 37.6 %, 13.0 % and 12.8 % of total accounts receivable .

June 30, 2024, the accounts receivable balance included amounts from two customers that represented 35.7 % and 10.5 % of total accounts

As of December 31, 2023, the accounts receivable balance includes amounts from three customers that represented 37.6 %, 13.0 %

and 12.8 % of total accounts receivable.

concentration

from a single customer in any one period can exceed 10% of our total revenues.

During the three months ended March 31, 2024, two customers

exceeded 10% of revenues, representing 29.6 % and 13.1 % of revenues, and during the three months ended March 31, 2023, three customers

exceeded 10%, representing 28.3 %, 15.9 % and 10.6 % of revenues.

During the three months ended June 30, 2024, one customer

exceeded 10% of revenues, representing 35.2 % of revenues, and during the six months ended June 30, 2024, one customer exceeded 10%, representing

32.8 % of revenues.

the three months ended June 30, 2023, four customers exceeded 10% of revenues, representing 16.1 %, 15.6 %, 11.0 % and 10.2 % of revenues,

and during the six months ended June 30, 2023, two customers exceeded 10%, representing 21.0 % and 15.8 % of revenues.

REVENUE RECOGNITION

following table represents a disaggregation of revenue for the three months ended March 31, 2024 and 2023 (in thousands):

following table represents a disaggregation of revenue for the three and six months ended June 30, 2024, and 2023 (in thousands):

SCHEDULE OF DISAGGREGATION OF REVENUE

months ended March 31, 2024

months ended March 31, 2023

Point in time

Three months ended June 30, 2024

Point in time

Three months ended June 30, 2023

Point in time

to Condensed Consolidated Financial Statements

REVENUE RECOGNITION (continued)

Point in time

Six months ended June 30, 2024

Point in time

Six months ended June 30, 2023

Point in time

energy market includes customers involved in the manufacture of silicon carbide wafers and batteries.

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Industrial end market consists of various end customers in diverse industries.

The research market

principally represents customers that are universities and other research institutions.

Company has unrecognized contract revenue of approximately $ 24.8 million at March 31, 2024, which it expects to substantially recognize

as revenue within the next eighteen months.

Research market principally

represents customers such as universities and other research institutions.

Company has unrecognized contract revenue of approximately $ 21.6 million at June 30, 2024, which it expects to substantially recognize

as revenue within the next twelve months based on over time revenue recognition.

is required to evaluate assumptions including the amount of net contract revenues and the total estimated costs to determine our progress

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(ii) product cost forecast changes, (iii) cost related change orders or add-ons, or (iv) changes in other information used to estimate

Changes in estimates may have a material effect on the Company’s consolidated statements of operations.

Changes in estimates may have a material effect on the Company’s condensed consolidated statements of operations.

to Condensed Consolidated Financial Statements

REVENUE RECOGNITION (continued)

assets and liabilities

assets and contract liabilities on input method type contracts in progress are summarized as follows as of March 31, 2024 (in thousands):

Schedule of Cost and Estimated Earnings in Excess of Billings

Costs incurred

on contracts in progress

assets and contract liabilities on input method type contracts in progress are summarized as follows as of June 30, 2024 (in thousands):

OF COST AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS

Costs incurred on contracts in progress

Estimated earnings

Costs and estimated earnings

on uncompleted contracts

Billings to date

Net cost in excess of billings

revenue related to non-system contracts and a system contract to be recognized at point in

liability in excess of contract assets

in accompanying condensed consolidated balance sheets under the following captions (in thousands):

Deferred revenue related to non-system contracts

Contract liability in excess of contract assets

in accompanying condensed consolidated

sheet as of June 30, 2024 under the following captions (in thousands):

Contract assets

Contract liabilities

the contract liability balances at December 31, 2023 and 2022 of $ 4.6 million and $ 4.1 million, respectively, $ 2.7 million and $ 2.6 million

was recognized as revenue during the three months ended March 31, 2024 and 2023, respectively.

INVENTORIES, NET

Schedule of Inventories, Net

was recognized as revenue during the six months ended June 30, 2024 and 2023, respectively.

SCHEDULE OF INVENTORIES

Inventories consist of:

June 30, 2024

December 31, 2023

Raw materials

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Finished goods

in our inventories (raw materials, work-in-process and finished goods) are approximately $ 1.8 million related to PVT 150 systems that

were purchased in anticipation of future orders.

In the event that such orders do not materialize, the Company would incur a charge to

reduce the carrying value of such inventory to market.

Such a charge may be material to the Company’s financial position and future

results of operations.

to Condensed Consolidated Financial Statements

LONG-TERM DEBT

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EARNINGS PER SHARE

calculation of basic and diluted weighted average common shares outstanding for the three months ended March 31, 2024 and 2023 is as

calculation of basic and diluted weighted average common shares outstanding for the three and six months ended June 30, 2024 and 2023

is as follows:

SCHEDULE OF BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

months ended March 31,

Basic weighted average common shares outstanding

Effect of potentially

dilutive share-based awards

Three months ended

Six months ended

Basic weighted average common shares

Dilutive effect of options and unvested

restricted stock

Diluted weighted average shares outstanding

March 31, 2024, stock options to purchase 841,875 shares of common stock were outstanding and 395,625 were exercisable.

June 30, 2024, stock options to purchase 838,125 shares of common stock were outstanding and 416,875 were exercisable.

At June 30, 2023,

stock options to purchase 599,500 shares of common stock were outstanding and 297,500 were exercisable.

the three months ended March 31, 2024 and 2023, 841,875 and 899,500 of stock options, respectively, were not included in the computation

of diluted earnings per share because their effect was antidilutive.

the three and six months ended June 30, 2024 and 2023, all stock options were excluded in the computation of diluted earnings per share

because their effect was antidilutive.

STOCK-BASED COMPENSATION EXPENSE

Company recorded stock-based compensation for the three months ended March 31, 2024 and 2023, respectively, that were included in the

following line items in our condensed consolidated statements of operations (in thousands):

of Stock Based Compensation expense

months ended March 31,

Company recorded stock-based compensation for the three and six months ended June 30, 2024 and 2023, respectively, that were included

in the following line items in our condensed consolidated statements of operations (in thousands):

SCHEDULE OF STOCK BASED COMPENSATION EXPENSE

Three months ended

Six months ended

Cost of revenue

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General and administrative

to Condensed Consolidated Financial Statements

STOCK-BASED COMPENSATION EXPENSE (continued)

compensation expense included $ 50,000 and $ 40,000 for the three months ended March 31, 2024 and 2023, respectively, related to restricted

stock awards that directors elected to receive pursuant to

the Director Compensation plan.

Under this plan, each of the five independent directors is entitled to an Annual Equity Retainer in the

amount of $ 40,000 , to be granted on the date of the Company’s annual meeting of shareholders.

the three months ended March 31, 2024, the Company granted 5,000 stock options, vesting 25 % per year over four years , with a ten-year

compensation expense for three months ended June 30, 2024 and 2023 included $ 57,423 and 40,000 , respectively, and for the six month periods

June 30, 2024 and 2023 included $ 103,736 and $ 80,000 , respectively, related to restricted stock awards that directors are entitled to

receive pursuant to the Director Compensation Plan.

Under this plan each of the Company’s independent directors is entitled to an Annual Equity Retainer in the amount of $ 40,000 ,

to be granted on the date of the Company’s annual meeting of shareholders.

the six months ended June 30, 2024, the Company granted 5,000 stock options, vesting 25 % per year over four years , with a ten-year life.

The Company determined the weighted average fair value of stock options granted was $ 3.30 and is based upon weighted average assumptions

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Expected life (in years)

following table summarizes stock options awards for the three months ended March 31, 2024:

following table summarizes stock options awards through June 30, 2024:

SCHEDULE OF STOCK OPTIONS AWARDS

Outstanding at January 1, 2024

Outstanding at March

following table summarizes information about the outstanding and exercisable options at March 31, 2024 by ranges of exercise prices:

Outstanding at June 30, 2024

following table summarizes information about the outstanding and exercisable options at June 30, 2024 by ranges of exercise prices:

SCHEDULE OF OUTSTANDING AND EXERCISABLE OPTIONS RANGES OF EXERCISE PRICES

Options Outstanding

Options Exercisable

$ 4.00 - 7.00

$ 7.01 - 10.00

$ 10.01 - 13.00

$ 13.01 - 16.00

to Condensed Consolidated Financial Statements

STOCK-BASED COMPENSATION EXPENSE (continued)

of March 31, 2024, there was $ 2.2 million of unrecognized compensation costs related to stock options expected to be recognized over

a weighted average period of 2.0 years.

of March 31, 2024 and December 31, 2023, the Company has provided a full valuation allowance against its net deferred tax assets.

was based on management’s assessment, including operating losses in recent years, that it is more likely than not that the net

deferred tax assets may not be realized in the future.

of June 30, 2024, there was $ 2.0 million of unrecognized compensation costs related to stock options expected to be recognized over a

weighted average period of 1.8 years.

of June 30, 2024 and December 31, 2023, the Company has provided a full valuation allowance against its net deferred tax assets.

was based on management’s assessment, including the last four years of operating losses, that it is more likely than not that the

net deferred tax assets may not be realized in the future.

Management continues to evaluate for potential utilization of the Company’s

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CVD Equipment, Stainless Design Concepts (“SDC”) and CVD Materials.

Equipment segment manufactures and sells chemical vapor deposition, physical vapor transport and similar equipment.

The SDC segment designs

and manufactures ultra-high purity gas and chemical delivery control systems.

The CVD Materials segment provides material coatings for

aerospace, medical, electronic and other applications and is not considered a core business of the Company.

The Company evaluates

performance based on several factors, of which the primary financial measure is income (loss) before taxes.

The CVD Equipment

segment manufactures and sells chemical vapor deposition, physical vapor transport and similar equipment.

The SDC segment designs and

manufactures ultra-high purity gas and chemical delivery control systems.

The CVD Materials segment provides material coatings for aerospace,

medical, electronic and other applications and is not considered a core business of the Company.

The Company evaluates performance based

on several factors, of which the primary financial measure is income (loss) before taxes.

Company’s corporate administration activities are reported in the “Corporate” column.

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consolidation.

Intersegment sales for the three months ended March 31, 2024 and 2023 by the SDC segment to the CVD Equipment segment

were $ 15,000 and $ 129,000 , respectively.

Intersegment sales by the SDC segment to the CVD Equipment segment for the three months ended June 30, 2024 and 2023 were

$ 132,000 and $ 138,000 , respectively and $ 147,000 and $ 266,000 for the six months ended June 30, 2024 and 2023, respectively.

no intersegment sales by the CVD Equipment segment to the SDC segment during the three and six months ended June 30, 2024.

sales by the CVD Equipment segment to the SDC segment for the three months and six months ended June 30, 2023 were $ 64,000 .

to Condensed Consolidated Financial Statements

SEGMENT REPORTING (continued)

following table presents certain information regarding the Company’s segments as of and for the three months ended March 31, 2024

following table presents certain information regarding the Company’s segments as of and for the three months ended June 30, 2024

and 2023 (in thousands):

8 unchanged sentences

Purchase of property, plant & equipment

* Includes loss on

sale of Tantaline of $ 0.2 million and impairment charge related to MesoScribe fixed assets of $ 0.1 million.

to Condensed Consolidated Financial Statements

SEGMENT REPORTING (continued)

following table presents certain information regarding the Company’s segments as of and for the six months ended June 30, 2024

and 2023 (in thousands):

Operating (loss) income

Pretax (loss)

Depreciation and amortization

Purchase of property, plant & equipment

Operating (loss) income

Pretax (loss)

Depreciation and amortization

Purchase of property, plant & equipment

* Includes loss on

sale of Tantaline of $ 0.2 million and impairment charge related to MesoScribe fixed assets of $ 0.1 million.

MESOSCRIBE SUBSIDIARY

7 unchanged sentences

remaining operations of MesoScribe and dispose of any remaining equipment.

Company received payments under the Agreement in the amount of $ 0.6 million which has been reflected as “deposit from purchaser”

in the accompanying consolidated balance sheet as of March 31, 2024 and December 31, 2023.

The Company expects the transaction to be

completed in 2024 with the acceptance of the equipment by the purchaser.

revenues and net loss of MesoScribe were $ 59,000 and ($ 25,000 ) for the three months ended March 31, 2024.

total assets and total liabilities of the MesoScribe subsidiary were $ 0.2 million and $ 0.7 million, respectively, as of March 31, 2024

and $ 0.2 million and $ 0.7 million, respectively, as of December 31, 2023.

RISKS AND UNCERTAINTIES

Company currently operates in a challenging economic environment as the global economy continues to confront the remaining impacts from

the pandemic, geopolitical conflicts, inflationary pressures, and adverse supply chain disruptions.

The specific impacts on the Company

have included:

geopolitical developments across Europe and Asia (including the war in Ukraine) have and may continue to restrict the

Company’s ability to procure raw materials and components such as nickel and integrated circuits, as well as impact the

Company’s ability to sell its products into China, Russia and other Eastern European and Asian regions.

chain disruptions have led to much longer lead times to acquire raw materials for production and has led to inflationary pressures

in both materials and labor.

These supply chain disruptions have impacted the Company’s ability to recognize revenue timelier

as it delays the Company’s manufacturing processes.

management has initiated actions to mitigate the potential negative impacts to its revenue and profitability, the Company is unable to

predict the impact that the above uncertainties may have on its future results of operations and cash flows.

During the three and six months ended June 30, 2023, the Company

recorded an impairment charge of $ 0.1 million for certain equipment of MesoScribe based on its decision to cease the remaining operations

by the end of 2024.

The Company received payments under the Agreement in the amount of $ 0.6 million

which has been reflected as “deposit from purchaser” in the accompanying consolidated balance sheet as of March 31, 2024 and

December 31, 2023.

The Company expects the transaction to be completed in 2024 with the acceptance of the equipment by the purchaser.

revenue and net loss were $ 55,000 and ($ 45,000 ) , respectively, for the three months ended June 30, 2024 and $ 0.1 million and ($ 0.1 ) million,

respectively, for the six months ended June 30, 2024.

total assets and total liabilities of the MesoScribe subsidiary were $ 0.2 million and $ 0.7 million, respectively, as of both June 30,

2024 and December 31, 2023.

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