What changed in this filing

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Item 1. Financial Statements

2024-11-13 compared with 2024-08-13 · 227 added, 197 removed, 286 unchanged (60% of the section changed)

3 unchanged sentences

thousands, except share amounts)

June 30, 2024

December 31, 2023

Current assets

Cash and cash equivalents

Accounts receivable, net of allowance for credit losses

Cash and cash

Accounts receivable, net

of allowance for credit losses

Contract assets

Other current assets

current assets

Total current assets

Property, plant and equipment, net

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES AND STOCKHOLDERS’

Current liabilities

1 unchanged sentence

Accrued expenses

Current maturities of long-term debt

Current maturities of long-term

Contract liabilities

Deposit from purchaser of MesoScribe assets-Note 11

Total current liabilities

Long-term debt, net of current portion

from purchaser of MesoScribe assets-Note 11

current liabilities

Long-term debt, net of

current portion

Total liabilities

Stockholders’ equity:

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

Common stock - $ 0.01 par

value – 20,000,000 shares authorized;

issued and outstanding 6,881,838 at September 30, 2024 and 6,824,511 at December 31,

Additional paid-in capital

Accumulated deficit

Total stockholders’ equity

Total liabilities and stockholders’ equity

stockholders’ equity

liabilities and stockholders’ equity

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

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thousands, except per share and share amounts)

Three months ended

Six months ended

Cost of revenue

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Research and development

Selling and shipping

General and administrative

Loss on disposition of Tantaline

Impairment charge

Total operating expenses

Operating loss

Gain on sale of equipment-Note

Loss on disposition of

Total operating expenses, net

Operating income (loss)

Other income (expense):

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Foreign exchange income

Other income (expense)

Total other income, net

Loss before income tax

other income, net

Income (loss) before income tax

Income tax expense

Loss per common share - basic

Loss per common share - diluted

Net income (loss)

Income (loss) per common

share - basic

Income (loss) per common

share - diluted

Weighted average common shares

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thousands, except share amounts)

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

months ended September 30, 2024 and 2023

Balance at July 1, 2024

Stock-based compensation

Balance at September 30, 2024

Balance at July 1, 2023

Stock-based compensation

Exercise of stock options and issuance

Balance at September 30, 2023

months ended September 30, 2024 and 2023

Balance at January 1, 2024

Stock-based compensation

Balance at June 30, 2024

Balance at September 30, 2024

Balance at January 1, 2023

Net income (loss)

Stock-based compensation

Exercise of stock options and

issuance of shares

Balance at June 30, 2023

Exercise of stock options and issuance

Balance at September 30, 2023

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

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Consolidated Statements of Cash Flows

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

Loss on disposition of Tantaline

Gain on sale of equipment

Loss on disposition of

Provision for excess and

obsolete inventory

Impairment charge

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

Changes in assets and liabilities,

net of effects of disposition of Tantaline and sale of equipment:

Accounts receivable

Contract assets

Employee retention credit

Other current assets

Other noncurrent assets

Accounts payable

Accrued expenses

Contract liabilities

Net cash used in operating activities

Net cash used in operating

Cash flows from investing activities:

Purchases of property and equipment

Net cash used in connection with disposition of Tantaline

Net cash used in investing activities

Purchases of property and

Deposits from purchaser

of MesoScribe assets

cash used in connection with disposition of Tantaline

Net cash used in investing

Cash flows from financing activities

Payments of long-term debt

Proceeds from exercise of stock options

Net cash (used in) provided by financing activities

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:

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to Condensed Consolidated Financial Statements

OF PRESENTATION

BASIS OF PRESENTATION

accompanying unaudited condensed consolidated financial statements for CVD Equipment Corporation and Subsidiaries (collectively “the

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The operating results for the

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

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

December 31, 2024.

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.

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

The Company anticipates that the existing cash and cash equivalents

balance together with potential future income from operations, collections of existing accounts receivable, revenue from its existing

backlog of products as of this filing date, the sale of inventory on hand, deposits and down payments against significant orders will

be adequate to meet its working capital and capital equipment requirements, and its anticipated cash needs over the next 12 months from

the date of issuance of these condensed consolidated financial statements

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

The Company anticipates that the existing cash and cash

equivalents balance together with potential future income from operations, collections of existing accounts receivable, revenue from

its existing backlog of products as of this filing date, the sale of inventory on hand, deposits and down payments against significant

orders will be adequate to meet its working capital and capital equipment requirements, and its anticipated cash needs over the next

12 months from the date of issuance of these condensed consolidated financial statements.

EQUIPMENT CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

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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.

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

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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 .

There were no material impairment losses recognized on contract assets during the three and nine months ended September 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

EQUIPMENT CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

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the customer.

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.

For the three and nine months ended September 30, 2024 and 2023, all system equipment sales were recorded over time by

using an input method except for one PVT200 system that was recorded at the point in time when the equipment was transferred to the customer

during the third quarter of 2024.

There was one system equipment contract in 2023 where the revenue was to be recognized based on point

This contract was modified during the three months ended September 30, 2023 such that the revenue under this contract will be

recognized over time using an input method based on the revised contract provisions.

Revenues for the three months ended September 30,

2023 includes $ 0.8 million of revenue that was deferred as of June 30, 2023 and recognized on the date of the contract modification.

EQUIPMENT CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

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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.

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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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)

We are currently evaluating the timing of adoption and impact of this ASU on our

Consolidated Financial Statements and related disclosures.

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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impact on our financial reporting.

EQUIPMENT CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

CONCENTRATION OF CREDIT RISK

and cash equivalents

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.

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

Company invests excess cash in U.S.

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

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.

treasury bills were $ 9.4 million and $ 12.1 million at September 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.

The amount at risk at September 30, 2024 and December 31, 2023 was $ 0 and $ 1.5 million,

respectively.

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

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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.

receivables are presented net of an allowance for credit losses of approximately $ 36,000 at both September 30, 2024 and December 31,

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

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results of operations and financial condition.

EQUIPMENT CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

CONCENTRATION OF CREDIT RISK (continued)

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.

September 30, 2024, the accounts receivable balance included amounts from one customer that represented 17.2 % of total accounts receivable.

As of December 31, 2023, the accounts receivable balance included 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 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

During the three months ended September 30, 2024, two

customers represented 29.1 % and 11.2 %, respectively, of revenues, and during the nine months ended September 30, 2024, one customer represented

31.2 % 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.

the three months ended September 30, 2023, two customers represented 40.3 % and 10.3 % of revenues, respectively, and during the nine months

ended September 30, 2023, three customers represented 16.7 %, 13.9 % and 11.7 % of revenues, respectively.

REVENUE RECOGNITION

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

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

SCHEDULE OF DISAGGREGATION OF REVENUE

Point in time

Three months ended June 30, 2024

Point in time

Three months ended June 30, 2023

Point in time

months ended September 30, 2024

months ended September 30, 2023

EQUIPMENT CORPORATION AND SUBSIDIARIES

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

months ended September 30, 2024

months ended September 30, 2023

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

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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

Company has unrecognized contract revenue of approximately $ 17.0 million at September 30, 2024, which it expects to substantially recognize

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

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

EQUIPMENT CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

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assets and liabilities

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

assets and contract liabilities on input method type contracts in progress are summarized as follows as of September 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

incurred on contracts in progress

Costs and estimated earnings on uncompleted contracts

Net cost in excess of billings

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

revenue related to non-system contracts

Contract liability in excess

of contract assets

Included in accompanying

condensed consolidated balance sheet as of September 30, 2024 under the following captions (in thousands):

the contract liability balances at December 31, 2023 and 2022 of $ 4.6 million and $ 4.0 million, respectively, $ 4.2 million and $ 3.7 million

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

was recognized as revenue during the nine months ended September 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.

EQUIPMENT CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

INVENTORIES (continued)

in our inventories are finished goods and raw materials related to PVT 150 systems that were purchased and built, respectively, in anticipation

of future orders.

During the three months ended September 30, 2024, the Company recorded a non-cash charge to reduce the net realizable

value of such inventory by approximately $ 1.0 million based on its assessment of the current market for silicon carbide equipment.

of September 30, 2024, the net amount of PVT 150 systems inventory is approximately $ 0.7

If future PVT 150 orders do not materialize and if the Company is not otherwise able to sell this inventory, the Company

could incur additional charges to further reduce the carrying value of such inventory to net realizable value.

Such charges may be

material to the Company’s financial position and future results of operations.

LONG-TERM DEBT

September 2022, the Company entered into a loan agreement to fund the acquisition of machinery.

The loan amount of $ 432,000 , is payable

in 60 equal monthly installments of $ 8,352 and secured by equipment.

The loan amount of $ 432,000

is payable in 60

equal monthly installments of $ 8,352

and secured by equipment.

The interest rate is

EARNINGS PER SHARE

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

calculation of basic and diluted weighted average common shares outstanding for the three and nine months ended September 30, 2024 and

2023 is as follows:

SCHEDULE OF BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

Three months ended

Six months ended

Basic weighted average common shares

Dilutive effect of options and unvested

Basic weighted average common shares outstanding

Dilutive effect of unvested

restricted stock

Diluted weighted average shares outstanding

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 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.

September 30, 2024, stock options to purchase 838,125 shares of common stock were outstanding and 493,750 were exercisable.

the three and nine months ended September 30, 2024 and the three and nine months ended September 30, 2023, all stock options were excluded

in the computation of diluted earnings per share because their effect was antidilutive.

EQUIPMENT CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

STOCK-BASED COMPENSATION EXPENSE

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

Company recorded stock-based compensation for the three and nine months ended September 30, 2024 and 2023, 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

months ended Sept.

Cost of revenue

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General and administrative

to Condensed Consolidated Financial Statements

STOCK-BASED COMPENSATION EXPENSE (continued)

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.

compensation expense for three months ended September 30, 2024 and 2023 included $ 50,000 and $ 44,783 , respectively, and for the nine

month periods ended September 30, 2024 and 2023 included $ 153,736 and $ 124,783 , 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 nine months ended September 30, 2024, the Company granted 5,000 stock options, vesting 25 % per year over four years, with a ten-year

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 through June 30, 2024:

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

SCHEDULE OF STOCK OPTIONS AWARDS

Outstanding at January 1, 2024

Outstanding at June 30, 2024

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

Outstanding at September

EQUIPMENT CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

STOCK-BASED COMPENSATION EXPENSE (continued)

following table summarizes information about the outstanding and exercisable options at September 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

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$ 13.01 - 16.00

to Condensed Consolidated Financial Statements

STOCK-BASED COMPENSATION EXPENSE (continued)

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.

of September 30, 2024, there was $ 1.8 million of unrecognized compensation costs related to stock options expected to be recognized over

a weighted average period of 1.3 years.

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

This was based on management’s assessment, including the last six 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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expense for options and shares of restricted stock granted to corporate administration employees and board members, certain consulting

expenses, investor and shareholder relations activities, and all of the Company’s legal, auditing and professional fees.

entries included in the “Eliminations” column represent intersegment revenues and cost of revenues that are eliminated in

consolidation.

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 .

expenses, investor and shareholder relations activities, and all the Company’s legal, auditing and professional fees.

EQUIPMENT CORPORATION AND SUBSIDIARIES

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 June 30, 2024

entries included in the “Eliminations” column represent intersegment revenues and cost of revenues that are eliminated

in consolidation.

Intersegment sales by the SDC segment to the CVD Equipment segment for the three months ended September 2024 and

2023 were $ 151,000

and $ 184,000 ,

respectively and $ 298,000

and $ 450,000

for the nine months ended September 30, 2024 and 2023, respectively.

Intersegment sales by the CVD Equipment segment to the SDC

segment for the three months ended September 30, 2024 and 2023 were $ 5,000

and $ 39,000 ,

respectively and $ 5,000

and $ 104,000

for the nine months ended September 30, 2024 and 2023, respectively.

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

2024 and 2023 (in thousands):

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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.

* Includes a $ 1.0

million non-cash charge to reduce certain inventory to net realizable value – see Note 5.

** Includes gain on

sale of equipment of $ 0.6 million related to MesoScribe – see Note 11.

EQUIPMENT CORPORATION AND SUBSIDIARIES

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

following table presents certain information regarding the Company’s segments as of and for the nine months ended September 30,

2024 and 2023 (in thousands):

Operating (loss) income

Pretax (loss)

Pretax (loss) Income

Depreciation and amortization

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Operating (loss) income

Pretax (loss)

Pretax (loss) Income

Depreciation and amortization

Purchase of property, plant & equipment

* Includes a $ 1.0

million non-cash charge to reduce certain inventory to net realizable value – see Note 5.

** Includes gain on

sale of equipment of $ 0.6 million related to MesoScribe – see Note 11.

*** Includes loss on

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

sale of Tantaline of $ 0.2 million and impairment charge related to MesoScribe fixed assets of $ 0.1 million – see Note 11.

EQUIPMENT CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

MESOSCRIBE SUBSIDIARY

August 8, 2023, the Company entered into a Purchase and License Agreement (the “Agreement”) with a third-party.

to the Agreement, the Company will sell certain proprietary assets relating to its plasma spray technology and material deposition system

to the Agreement, the Company would sell certain proprietary assets relating to its plasma spray technology and material deposition system

and grant a non-exclusive license to use certain of the Company’s related intellectual property as more fully described in the

Agreement, for an aggregate purchase price of $ 0.9 million.

The purchase price is payable in several installments and contingent upon

The purchase price was payable in several installments and contingent upon

certain performance metrics and other milestones.

Company will continue to fulfill remaining orders for MesoScribe products through the end of 2024 at which time it plans to cease the

remaining operations of MesoScribe and dispose of any remaining equipment.

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.

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

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

the three months ended September 30, 2024, the Company and the purchaser amended the agreement to reduce the purchase price to $ 0.8 million

and the purchaser accepted the equipment.

The Company recorded a net gain of sale of equipment of $ 0.6 million for the three and nine

months ended September 30, 2024 representing the purchase price less the net book value of the assets sold.

Company fulfilled its final orders for MesoScribe products during the three months ended September 30, 2024 and recorded revenues of

$ 0.7 million.

The Company has ceased operations of MesoScribe as of September 30, 2024.

revenue and net income (loss) of MesoScribe were $ 0.7 million and $ 1.1 million, respectively, for the three months ended September 30,

2024 (includes final sales and gain on sale of equipment) and $ 0.8 million and $ 1.0 million, respectively, for the nine months ended

September 30, 2024.

total assets and total liabilities of the MesoScribe subsidiary were $ 0.8 million and $ 0.1 million, respectively, as of September 30,

2024 and $ 0.2 million and $ 0.7 million as of December 31, 2023.

the nine months ended September 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 in 2024.

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