What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-03-19 compared with 2024-03-28 · 641 added, 572 removed, 915 unchanged (57% of the section changed)

60 unchanged sentences

the nominee’s industry experience, and the nominee’s general ability to enhance the overall composition of the Board.

Nominating, Governance and Compliance Committee does not have a formal policy on diversity;

however, in recommending directors, the Board

Nominating, Governance and Compliance Committee does not have a formal policy on diversity, however, in recommending directors, the Board

and the Committee consider the specific background and experience of the Board members and other personal attributes in an effort to

1 unchanged sentence

Board of Directors of a company with our size and the nature of our business.

Proceedings Involving Directors

Corporate Governance practices contain several features which we believe will ensure that the Board maintains effective and independent

oversight of management, including the following:

sessions without management and non-independent directors present are a standing Board agenda item.

Executive sessions of the independent

directors are held at any time requested by an independent director and, in any event, are held in connection with at least 100%

of regularly scheduled Board meetings.

Board regularly meets in executive session with the CEO without other members of management present.

Board committee members are independent directors.

The committee chairs have authority to hold executive sessions with management

and non-independent directors present.

our Board has no formal policy with respect to separation of the positions of Chairman and CEO or with respect to whether the Chairman

should be a member of management or an independent director, we believe that the appointment of Mr.

Waldman as Chairman properly facilitates

better communication between the Independent Directors on the one hand and the non-Independent Director and members of management on

the other hand and leads to improved oversight and discussions by the Board as a whole.

The Chief Executive Officer of the Company, Emmanuel

Lakios, is tasked with the responsibility of implementing our corporate strategy, we believe he is best suited for leading discussions

with input from the Chairman, at the Board level, regarding performance relative to our corporate strategy and this discussion accounts

for a significant portion of the time devoted at the Board meetings.

Certificate of Incorporation and Bylaws provide for our Company to be managed by or under the direction of the Board of Directors.

our Certificate of Incorporation and Bylaws, the number of directors is fixed from time to time by the Board of Directors.

of Directors currently consists of six members.

Directors are elected for a period of one year and thereafter serve, subject to the Bylaws,

until the next annual meeting at which their successors are duly elected by the shareholders.

following table sets forth the names, ages and positions with the Company of each of our directors and executive officers, as of March

3 unchanged sentences

Chairman – Nominating, Governance, and Compliance Committee

Chairman - Strategic Planning Committee

Financial Officer, Vice President, Secretary and Treasurer

Chairman – Compensation Committee

Financial Officer, Executive Vice President, Secretary and Treasurer

President and General Manager of SDC

2 unchanged sentences

President of Manufacturing Operations

Lakios was appointed to serve as President and Chief Executive Officer of the Company on January 22, 2021, and on July 15, 2021 was elected

by the shareholders as a member of the Board of Directors.

Lakios joined the Company as Vice President Sales and Marketing in February

Lakios has over 30 years of experience serving the aerospace, semiconductor, data storage and optical device industries and

is the holder of several patents in the field of process equipment and device structure.

From January 2015 through February 2017, Mr.

Lakios was appointed to serve as President and Chief Executive Officer of the Company on January 22, 2021, and on July 15, 2021 was

elected by the shareholders as a member of the Board of Directors.

Lakios joined the Company as Vice President Sales and Marketing

in February 2017.

Lakios has over 30 years of experience serving the aerospace, semiconductor, data storage and optical device industries

and is the holder of several patents in the field of process equipment and device structure.

From January 2015 through February 2017,

Lakios was the President and Chief Executive Officer at Sensor Electronic Technology, Inc., overseeing that company’s transition

10 unchanged sentences

from SUNY Stony Brook in 1984.

Waldman was appointed a member of the Board of Directors on October 5, 2016 and currently serves as Chairman of the Board and Chairman

of the Audit Committee.

Waldman was appointed a member of the Board of Directors on October 5, 2016 and currently serves as Chairman of the Board and

Chairman of the Audit Committee.

Waldman has over 40 years of experience in public accounting.

Waldman is a member of the board of directors of Comtech Telecommunications Corporation since August 2015 and Lead Independent Director

since December 2021.

from December 2021 through March 2024.

He serves as the chairperson of Comtech’s Audit Committee.

Waldman is a member of the board of directors

and Lead Independent Director and Audit Committee Chairperson at APYX Medical Corporation, a Nasdaq-listed advanced energy medical technology

Waldman serves as a Senior Advisor at First Long Island Investors, LLC since 2016 and was previously an Advisor to the accounting

firm of EisnerAmper LLP following his role as Partner-in-Charge of Commercial Audit Practice Development for Long Island.

served as the Managing Partner of the Long Island office of KPMG LLP from 1994 through 2006, the accounting firm where he began his career

Waldman is a member of the

board of directors and Lead Independent Director and Audit Committee Chairperson at APYX Medical Corporation, a Nasdaq-listed advanced

energy medical technology company.

Waldman serves as a Senior Advisor at First Long Island Investors, LLC since 2016 and was previously

an Advisor to the accounting firm of EisnerAmper LLP following his role as Partner-in-Charge of Commercial Audit Practice Development

for Long Island.

Waldman served as the Managing Partner of the Long Island office of KPMG LLP from 1994 through 2006, the accounting

firm where he began his career in 1972.

During his tenure at KPMG, Mr.

Waldman served as audit partner to a number of public and privately held technology companies.

Waldman served as audit partner to a number of public and privately

held technology companies.

Waldman is currently Chairman of the Board of Directors of the Long Island Association and a member of the boards of directors of the

2 unchanged sentences

a member of the board of directors of Northstar/RXR Metro Income, Inc., an SEC registered non-traded real estate investment trust.

Waldman is the current Chairman of the Supervisory Committee of Bethpage Federal Credit Union and previously served as the Chairman of

the Audit Committee of the State University of New York’s (“SUNY”) Board of Trustees, the largest state university

system in the United States.

Waldman previously served as Chairman of the Audit and Finance Committee Board of Trustees of the Long

Island Power Authority (“LIPA”), the second largest government utility in the United States, and as the Chairman of the Board.

Waldman was Chairman of the Supervisory Committee of Bethpage Federal Credit Union and previously served as the Chairman of the Audit

Committee of the State University of New York’s (“SUNY”) Board of Trustees, the largest state university system in

the United States.

Waldman previously served as Chairman of the Audit and Finance Committee Board of Trustees of the Long Island

Power Authority (“LIPA”), the second largest government utility in the United States, and as the Chairman of the Board.

Waldman also served as an adjunct professor at Hofstra University, teaching graduate courses in advanced accounting theory and advanced

6 unchanged sentences

leading public company boards, his extensive relevant industry and financial and accounting expertise.

Ashraf Lotfi is currently a venture partner with Deep Sciences Ventures and serves on the board of Lotus Microsystems, ApS, Xonia Ltd.,

HyperCIM Ltd.

Brill was appointed a Director of the Company on March 5, 2021.

Brill was co-founder and managing partner of Newlight

Management from 1997 to 2019, which managed venture capital funds that focused on early-stage technology companies.

Prior to co-founding

Newlight, Dr.

Brill was a general partner of Poly Ventures, a Long Island based venture capital fund.

Brill is a member of the Board

of Directors of the Long Island Angel Network and one private company.

Brill has also previously served on the Board of Directors

of multiple public and private companies.

Brill has been the CEO of both public and private companies.

Brill served as General

Manager of Harris Corporation’s CMOS Semiconductor Division.

He also held various technical and management positions at IBM’s

semiconductor operation.

Brill holds a Ph.D.

in nuclear physics from Brown University and a B.A.

in Engineering Physics

from Lehigh University.

Brill had previously served on the Company’s Board from April 2018 until October 2019.

Ashraf Lotfi is currently a venture partner with Deep Sciences Ventures and serves on the board of Lotus Microsystems, ApS, Xonia

Ltd., HyperCIM Ltd.

Lotfi previously served as Vice President and a Fellow at Intel Corporation.

Prior to Intel, he was Power Chief Technology

Officer for Altera Corporation serving its Enpirion Power Business as well as the broader Field Programmable Gate Array community.

was acquired by Intel in 2015.

Prior to Altera, he served as President and Chief Executive Officer of Enpirion, Inc., which he founded

Prior to Intel, he was Power Chief

Technology Officer for Altera Corporation serving its Enpirion Power Business as well as the broader Field Programmable Gate Array community.

Altera was acquired by Intel in 2015.

Prior to Altera, he served as President and Chief Executive Officer of Enpirion, Inc., which he

founded in 2002.

Enpirion’s inception, Dr.

11 unchanged sentences

electronics provide a valuable resource to the Board of Directors and Executive Management.

Wasser currently serves as Vice President of Investor Relations and ESG Engagement for Etsy, Inc.

ETSY), the global marketplace

for unique and creative goods.

She is responsible for Etsy’s external shareholder relationships, with a focus on corporate and

financial reporting, driving increased analyst coverage and investor connectivity, effective corporate messaging, strategic investor

targeting, and elevating the company’s ESG messaging with the financial community.

Wasser has led investor and broad internal

and external communications strategies on multiple financial transactions and offerings, and a host of product and technology launches

and marketing initiatives.

Wasser was elected as a member of the Board of Directors on July 13, 2023.

Wasser currently serves as Vice President of Investor

Relations for Etsy, Inc.

ETSY), the global marketplace for unique and creative goods.

She is responsible for Etsy’s external

shareholder relationships, with a focus on corporate and financial reporting, driving increased analyst coverage and investor connectivity,

effective corporate messaging, strategic investor targeting, and governance engagement with the financial community.

Wasser has led

investor and broad internal and external communications strategies on multiple financial transactions and offerings, and a host of product

and technology launches and marketing initiatives.

to joining Etsy in April 2018, Ms.

Wasser led Edelman’s Investor Relations practice in the U.S., and advised boards of directors

Wasser led Edelman’s Investor Relations practice in the U.S.

and advised boards of directors

and senior managements of public companies on strategic communications including investor relations, financial and corporate public relations,

1 unchanged sentence

to joining Edelman in 2015, Ms.

Wasser was Senior Vice President, Investor Relations & Corporate Communications for Veeco Instruments,

Wasser was Senior Vice President, Investor Relations & Corporate Communications for semiconductor

equipment provider Veeco Instruments, Inc.

VECO) for over 15 years.

While at Veeco, Ms.

Wasser created and implemented a global investor relations program to raise

visibility and deepen ownership to reflect business trends.

She led effective communications strategy through positive periods of growth,

over a dozen merger and acquisition transactions, a highly successful secondary equity offering, and new market opportunities.

Wasser created and implemented a global

investor relations program to raise visibility and deepen ownership to reflect business trends.

She led effective communications strategy

through positive periods of growth, over a dozen merger and acquisition transactions, a highly successful secondary equity offering,

and new market opportunities.

to joining Veeco, Ms.

6 unchanged sentences

Wasser serviced clients across the globe and helped grow the firm from four to 80 employees.

Debra has a B.S.

Deb has a B.S.

in Communications

4 unchanged sentences

service of four years on the National Chapter Board, as well as earlier as a Board member of the organizations New York Chapter.

Nielsen was appointed a member of the Board of Directors on October 5, 2016.

Nielsen was the Director of Finance for The

Beechwood Organization until January 2019 and had been responsible for Project and Corporate Finance including Strategic Planning

Initiatives since 2014.

He has been a member of the Board of Directors of Dime Community Bank since its merger on February 1, 2021

with Bridge Bancorp Inc.

In addition, he is Chairman of the Credit Risk Committee and a member of the Audit and Compliance

Prior to the merger, he was a member of the Board of Directors of Bridgehampton National Bank and Bridge Bancorp Inc.,

its Parent holding company since 2013, and served on the Audit Committee, Compensation Committee, Corporate Governance &

Nominating Committee, as well as on the ALCO and Loan Committees and the Compliance BSA & CRA Committee.

Nielsen also served

as a Director of North Fork Bancorporation and its subsidiary North Fork Bank from 2000 to 2006 where he chaired both the

Compensation Committee and Audit Committee as well as having served as Lead Independent Director.

Nielsen is the former CEO of

Reliance Federal Savings Bank and Herald National Bank, and a 45-year veteran of the banking industry.

Nielsen’s extensive

public company, banking and real estate development experience provides a valuable resource to the Board of Directors and Executive

Brill was appointed a Director of the Company on March 5, 2021.

Brill was co-founder and managing partner of Newlight Management

from 1997 to 2019, which managed venture capital funds that focused on early-stage technology companies.

Prior to co-founding Newlight,

Brill was a general partner of Poly Ventures, a Long Island based venture capital fund.

Brill is a member of the Board of Directors

of the Long Island Angel Network and one private company.

Brill has also previously served

on the Board of Directors of multiple public and private companies.

Brill has been the CEO of both public and private companies .

Brill served as General Manager of Harris Corporation’s

CMOS Semiconductor Division.

He also held various technical and management positions at IBM’s semiconductor operation.

holds a Ph.D.

in nuclear physics from Brown University and a B.A.

in Engineering Physics from Lehigh University.

had previously served on the Company’s Board from April 2018 until October 2019.

Africk was appointed as a member of the Board of Directors on May 28, 2024.

Africk is the founder of Searay Capital LLC, a private

investment company.

Africk established Searay Capital in July 2013 after 21 years leading private equity and capital markets investments

for Apollo Global Management.

As a Senior Partner at Apollo, Mr.

Africk was responsible for investments in technology and communications,

and he has 30 years of experience financing, analyzing and investing in public and private companies.

In the last five years, Mr.

has served on the board of directors of ADT Inc., which provides residential and commercial security systems and services.

Additionally,

Africk serves on the Board of Advisors of the University of Pennsylvania School of Engineering and Applied Science.

Africk graduated

from UCLA with a B.A.

in Economics, from the University of Pennsylvania Law School with a J.D., and from the University of Pennsylvania’s

Wharton School of Business with an MBA.

Africk has extensive board experience including previously serving on the board of directors of ADT Inc., and numerous boards of technology

companies while a Senior Partner at Apollo.

Catalano was appointed as the Company’s Vice President and Chief Financial Officer effective as of August 30, 2022.

began his career at KPMG LLP and became an audit partner in 1993.

Throughout his over 35 years as an audit professional at KPMG LLP,

Catalano began his career at KPMG LLP and became an audit partner in 1993.

Throughout his over 35 years as an audit professional at KPMG

Catalano advised a diverse array of clients through private equity financed transactions, merger-related accounting, and filings

6 unchanged sentences

Public Accountant in New York State and received a Bachelor of Business Administration in accounting from Hofstra University.

to his appointment as Vice President and General Manager of SDC, Mr.

Collins is the Vice President and General Manager of SDC, Mr.

Collins served as the General Manager of SDC since 1999.

4 unchanged sentences

Jeffrey Brogan was appointed as Vice President Sales and Marketing for the Company on March 23, 2021.

Previously he was Director of Sales

and Marketing for CVD Materials Corporation since November 2017 with General Management responsibilities of CVD MesoScribe Technologies

Previously he was Director

of Sales and Marketing for CVD Materials Corporation since November 2017 with General Management responsibilities of CVD MesoScribe Technologies

Brogan served as the President and CEO of MesoScribe Technologies, Inc., spearheading its sale to CVD in 2017.

over 20 years of experience in strategic sales and marketing, technology management, and advanced research & development.

has led the development of innovative sensor products, transitioning high performance products to manufacturing using the Company’s

Direct Write MesoPlasma™ printing technology.

He received his PhD in Materials Science and Engineering from Stony Brook University

over 25 years of experience serving aerospace and defense industries with expertise in strategic sales & marketing, technology management,

and advanced Research & Development.

He received his PhD in Materials Science and Engineering from Stony Brook University in 1996.

Shatalov was appointed Vice President of Engineering and Technology in April 2018.

Prior to CVD, Mr.

Shatalov was employed by Sensor

Electronic Technology Inc.

(SETi) a LED company where he held multiple technical and management positions from 2006 thru 2018.

Shatalov became Vice President of Technology responsible for UV LED technology and LED application development at SETi.

has over twenty years of experience in semiconductor research and devices and holds more than 12 U.S.

Shatalov was employed

by Sensor Electronic Technology Inc.

(SETi) a LED company where he held multiple technical and management positions from 2006 through

Shatalov became Vice President of Technology responsible for UV LED technology and LED application development at

Shatalov has over twenty years of experience in semiconductor research and devices and holds more than 12 U.S.

Cheesman was appointed Vice President of Manufacturing Operations in October 2022.

He has over 25 years of management experience in the

semiconductor, medical device and defense equipment sectors.

He has over 25 years of management experience

in the semiconductor, medical device and defense equipment sectors.

Cheesman has held roles of increasing responsibility in engineering,

7 unchanged sentences

certification.

Proceedings Involving Directors

Corporate Governance practices contain several features which we believe will ensure that the Board maintains effective and independent

oversight of management, including the following:

sessions without management and non-independent directors present are a standing Board agenda

Executive sessions of the independent directors are held at any time requested by an

independent director and, in any event, are held in connection with at least 100% of regularly

scheduled Board meetings.

Board regularly meets in executive session with the CEO without other members of management

Board committee members are independent directors.

The committee chairs have authority to

hold executive sessions with management and non-independent directors present.

our Board has no formal policy with respect to separation of the positions of Chairman and CEO or with respect to whether the Chairman

should be a member of management or an independent director, we believe that the appointment of Mr.

Waldman as Chairman properly facilitates

better communication between the Independent Directors on the one hand and the non-Independent Director and members of management on

the other hand and leads to improved oversight and discussions by the Board as a whole.

The Chief Executive Officer of the Company, Emmanuel

Lakios, is tasked with the responsibility of implementing our corporate strategy, we believe he is best suited for leading discussions

with input from the Chairman, at the Board level, regarding performance relative to our corporate strategy and this discussion accounts

for a significant portion of the time devoted at the Board meetings.

Certificate of Incorporation and Bylaws provide for our Company to be managed by or under the direction of the Board of Directors.

our Certificate of Incorporation and Bylaws, the number of directors is fixed from time to time by the Board of Directors.

of Directors currently consists of six members.

Directors are elected for a period of one year and thereafter serve, subject to the Bylaws,

until the next annual meeting at which their successors are duly elected by the shareholders.

have adopted a Corporate Code of Conduct and Ethics that applies to our employees, senior management and Board of Directors, including

2 unchanged sentences

by clicking on “About Us” and then clicking on “Governance.”

Trading Policy

Company has adopted an insider trading policy that governs the purchase, sale and/or other dispositions of our securities by our directors,

officers and employees, as well as their immediate family members and others who may have access to material nonpublic information concerning

the Company, and that is designed to promote compliance with insider trading laws, rules and regulations.

A copy of our Insider Trading

Policy is filed as Exhibit 19 to this Annual Report on Form 10-K.

Board of Directors has an Audit Committee that currently consists of Lawrence J.

Waldman, Chairman, Raymond A.

Nielsen, Robert M.

Debra Wasser (effective July 13, 2023), Ashraf Lotfi (effective August 18, 2023) and Conrad J.

Gunther (until July 13, 2023).

the fiscal year ended December 31, 2023, the Audit Committee held four meetings.

Pursuant to the Audit Committee Charter, the Audit Committee

is directly responsible for the appointment, compensation, retention and oversight of the work of any independent registered public accounting

firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for us, and

each such independent auditor shall report directly to the Committee.

The Audit Committee also reviews with management and the independent

auditors, our annual audited financial statements (including the disclosures under “Management’s Discussion and Analysis

of Financial Condition and Results of Operations”), the scope and results of annual audits and the audit and non-audit fees of

the independent registered public accounting firm.

Waldman, Gunther, Nielsen and Brill and Ms.

Wasser are “independent”

under the requirements of the NASDAQ Stock Market.

Waldman, Chairman, Robert M.

Brill, and Debra Wasser.

During the fiscal year ended December 31, 2024, the Audit Committee held four meetings.

Pursuant to the Audit Committee Charter, the

Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the work of any independent registered

public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services

for us, and each such independent auditor shall report directly to the Committee.

The Audit Committee also reviews with management and

the independent auditors, our annual audited financial statements (including the disclosures under “Management’s Discussion

and Analysis of Financial Condition and Results of Operations”), the scope and results of annual audits and the audit and non-audit

fees of the independent registered public accounting firm.

Waldman and Brill and Ms.

Wasser are “independent” under

the requirements of the NASDAQ Stock Market.

Board of Directors has determined that Mr.

7 unchanged sentences

year ended December 31, 2024, all of the filings for our officers, directors and ten percent shareholders were made on a timely basis.

with the exception of:

(i) a delinquent Form 4 disclosing a single transaction for each of Mr.

Catalano, Dr.

Shatalov, Mr.

Collins, and Mr.

and (ii) a delinquent Form 4 disclosing one transaction for Mr.

Compensation.

2 unchanged sentences

officers,” for the years ended December 31, 2024 and 2023.

principal position

Awards ($) (2)

Other Compensation ($) (3)

Name and principal position

Bonus ($) (1)

Option Awards ($) (2)

Stock Awards ($) (2)

All Other Compensation ($) (3)

Emmanuel Lakios

President and Chief Executive

Richard Catalano (4)

Secretary, Chief Financial

Officer and Executive Vice President

Thomas McNeill (5)

Secretary, Chief Financial Officer

and Executive Vice President

President Sales & Marketing

President and Chief Executive Officer

Richard Catalano Secretary, Chief

Financial Officer and Executive Vice President

Vice President Sales & Marketing

cash bonuses under the Company’s Management Bonus Plan.

4 unchanged sentences

with FASB ASC 718 (Stock Compensation).

The stock options granted in 2022 and 2023 vest 25%

per year over four years and have a ten-year life.

The stock options granted in 2023 vest 25% per year

over four years and have a ten-year life.

There were no stock options granted in 2024 to

the named executive officers

other compensation consists of 1) 401(k) match in 2024 and 2023 of $10,350 and $9,900 for

Emmanuel Lakios, $9,179 and $288 for Richard Catalano, $0 and $4,094 for Thomas McNeill and

$7,863 and $3,053 for Jeffrey Brogan, respectively;

2) severance in 2022 of $104,125 and

accrued and used vacation time in 2022 of $29,470 for Thomas McNeill;

and 3) health insurance

premiums in 2023 and 2022 of 9,622 and $8,895 for Emmanuel Lakios and $18,022 and $0 for

Richard Catalano.

(4) Effective

August 30, 2022, Richard Catalano was appointed Vice President and Chief Financial Officer.

(5) Effective

August 30, 2022, Thomas McNeill resigned as Executive Vice President and Chief Financial

Emmanuel Lakios, $8,514 and $9,179 for Richard Catalano, and $6,930 and $7,863 for Jeffrey

Brogan, respectively;

and 2) health, life and disability insurance premiums in 2024 and 2023

of $10,394 and $9,622 for Emmanuel Lakios, $18,258 and $18,022 for Richard Catalano and $0

and $648 for Jeffrey Brogan.

Agreements and Potential Payments Upon Termination or Change in Control

38 unchanged sentences

contracts between the Company and its directors or any change in control arrangements.

Equity Awards

From time to time, we grant equity awards, including

stock options, to our employees, including our named executive officers.

Historically, we have typically granted new-hire option awards

on, or within the calendar quarter of, a new hire's employment start date and annual refresh employee option grants in the first quarter

of each fiscal year, which refresh grants are typically approved at a regularly scheduled meeting of the Compensation Committee occurring

in such quarter.

Also, non-employee directors receive automatic grants of initial and annual stock option awards, at the time of a director’s

initial appointment or election to the board and at the time of each annual meeting of our stockholders, respectively, pursuant to our

non-employee director compensation policy, as further described under the heading, “2024 Director Compensation” below.

We do not otherwise maintain any written policies

on the timing of awards of stock options, stock appreciation rights, or similar instruments with option-like features.

The Compensation

Committee considers whether there is any material nonpublic information (“MNPI”) about our company when determining the timing

of stock option grants and does no t seek to time the award of stock options in relation to our public disclosure of MNPI .

timed the release of MNPI for the purpose of affecting the value of executive compensation.

During fiscal 2024, the Company did not grant any equity awards to its

named executive officers.

Equity Awards at December 31, 2024

13 unchanged sentences

following table sets forth a summary of the compensation we paid to our non-employee directors in 2024.

Option Awards

Restricted Stock Awards

Andrew Africk

October 11, 2021, the Board of Directors, following the unanimous recommendation of the Board’s Compensation Committee, unanimously

4 unchanged sentences

to Director Compensation, divided into the following pay components:

(i) Annual Board Cash Compensation in the amount of $40,000 and

(ii) an Annual Equity Retainer in the amount of $40,000, to be automatically granted on the date of the Company’s annual meeting

of shareholders.

Additionally, a director serving as a chairman for the Board’s Compensation Committee, Nominating & Governance

Committee, or Strategic Planning Committee is entitled to Chair Compensation in the amount of $10,000.

The director serving as the chairman

for the Board’s Audit Committee is entitled to Chair Compensation in the amount of $25,000.

Furthermore, the director serving as

the Non-Executive Chairman is entitled to Board Leadership Compensation in the amount of $48,000.

(i) Annual Board of Directors cash compensation in the amount of

$40,000 and (ii) an annual equity retainer in the amount of $40,000, to be automatically granted on the date of the Company’s annual

meeting of shareholders.

Additionally, a director serving as a chairman for the Board’s Compensation Committee or Nominating, Governance

and Compliance Committee is entitled to annual chair compensation in the amount of $10,000.

The director serving as the chairman for

the Board’s Audit Committee is entitled to chair compensation in the amount of $25,000.

Furthermore, the director serving as the

Non-Executive Chairman is entitled to Board leadership compensation in the amount of $48,000.

Nielsen retired from the Board of Directors on August 9, 2024 and Andrew Africk was appointed to the Board of Directors on May 28,

Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

5 unchanged sentences

March 19, 2025.

Name and Address of Beneficial

and Nature of Beneficial Ownership (2)

Andrew Africk / ADA Partners LP

Partners, L.P.

Name and Address of Beneficial Owner (1)

Amounts and Nature of Beneficial Ownership (2)

Percent of Class (%)

5% or Greater Shareholder:

Leviticus Partners, L.P.

Directors and Executive Officers:

Andrw Africk / ADA Partners LP

1,303,690 (4)

Emmanuel Lakios

2 unchanged sentences

Warren Cheesman

All directors

and executive officers and executive employees as a group (nine persons)

All directors and executive officers and executive employees as a group (eleven persons)

Less than 1% of the outstanding common stock or less than 1% of the voting power

23 unchanged sentences

Lotfi – 2,825 and Wasser – 2,825.

not include shares to be issued per Director compensation agreement related to the Annual Equity Retainer in the amount of $40,000, to

be determined at the 2024 Annual Meeting of Shareholders.

include shares to be issued per Director compensation agreement related to the Annual Equity

Retainer in the amount of $40,000, to be determined at the 2025 Annual Meeting of Shareholders.

Compensation Plan Information Table

1 unchanged sentence

existing compensation plans as of December 31, 2024.

of securities to be issued upon exercise of outstanding options, warrants and rights (1)

Weighted-average

exercise price of outstanding options, warrants and rights (2)

of securities remaining available for future issuance

Equity compensation plans approved

by security holders

Equity compensation plans not approved by security

Reflects aggregate options outstanding under

our 2007 Share Incentive Plan, 2016 Equity Incentive Plan and 2022 Equity Incentive Plan.

Calculation is exclusive of the value of any

unvested restricted stock awards.

Number of securities to be issued upon exercise of outstanding options, warrants and rights (1)

Weighted-average exercise price of outstanding options, warrants and rights (2)

Number of securities remaining available for future issuance

Plan Category

Equity compensation plans approved by security holders

Equity compensation

plans not approved by security holders

aggregate options outstanding under our 2007 Share Incentive Plan, 2016 Equity Incentive

Plan and 2022 Equity Incentive Plan.

(2) Calculation

is exclusive of the value of any unvested restricted stock awards.

Relationships and Related Transactions, and Director Independence.

1 unchanged sentence

current members of our Board of Directors are Lawrence J.

Waldman, Emmanuel Lakios, Raymond A.

Nielsen, Robert M.

Brill, Debra Wasser

and Ashraf Lotfi.

Waldman, Nielsen, Brill and Lotfi and Ms.

Waldman, Emmanuel Lakios, Andrew Africk, Robert M.

Brill, Debra Wasser and

Ashraf Lotfi.

Waldman, Africk, Brill and Lotfi and Ms.

Wasser have been determined to be “independent” as defined

12 unchanged sentences

Financial Statement Schedules

Certificate of Incorporation dated October 12, 1982 (Incorporated herein by reference to the Company’s Form S-1 filed on July 3, 2007).

Certificate of Amendment of Certificate of Corporation, dated April 25, 1985 (Incorporated herein by reference to the Company’s Form S-1 filed on July 3, 2007).

Certificate of Amendment of Certificate of Corporation, dated August 12, 1985 (Incorporated herein by reference to the Company’s Form S-1 filed on July 3, 2007).

**Certificate of Incorporation, dated October 12, 1982

**Certificate of Amendment of Certificate of Incorporation, dated April 25, 1985.

**Certificate of Amendment of Certificate of Incorporation, dated August 12, 1985.

**Certificate of Amendment of Certificate of Incorporation, dated June 30, 1989.

Certificate of Amendment of the Certificate of Incorporation, dated December 9, 2016 (Incorporated herein by reference the Company’s Current Report on Form 8-K filed on December 14, 2016).

19 unchanged sentences

(Incorporated by reference to the Company’s Quarterly Report on Form 10-Q/A filed with the Commission on March 1, 2022).

of Subsidiaries

of MARCUM, Certified Public Accountants and Advisors, A Professional Corporation (S-8).

19 **Insider Trading Policy

21.1 List of Subsidiaries

23.1 **Consent

of Marcum, LLP, Certified Public Accountants and Advisors, A Professional Corporation (S-8).

13a-14(a)/15d-14(a) Certification of Chief Executive Officer.

13a-14(a)/15d-14(a) Certification of Chief Financial Officer.

32.1 **Section

1350 Certification of Principal Executive Officer.

32.2 **Section

1350 Certification of Principal Financial Officer.

Equipment Corporation Executive Compensation Clawback Policy

Taxonomy Extension Schema

Taxonomy Extension Calculation

Taxonomy Extension Definition

Taxonomy Extension Labels

Taxonomy Extension Presentation

97 CVD Equipment Corporation Executive Compensation Clawback Policy (Incorporated by reference to the Company’s Annual Report on Form 10-K filed with the Commission on March 28, 2024).

XBRL Instance

XBRL Taxonomy Extension Schema

XBRL Taxonomy Extension Calculation

XBRL Taxonomy Extension Definition

XBRL Taxonomy Extension Labels

XBRL Taxonomy Extension Presentation

Management contract or compensatory plan or arrangement required

5 unchanged sentences

its behalf by the undersigned, thereunto duly authorized.

March 19, 2025

EQUIPMENT CORPORATION

2 unchanged sentences

Richard Catalano

President, Chief Financial Officer and Secretary

Vice President, Chief Financial Officer and Secretary

Financial and Accounting Officer

5 unchanged sentences

Chairman of the Board

Andrew Africk

EQUIPMENT CORPORATION AND SUBSIDIARies

TO CONSOLIDATED FINANCIAL STATEMENTS

of Independent Registered Public Accounting Firm (PCAOB ID Number 688 )

Balance Sheets as of December 31, 2023 and 2022

Statements of Operations for the years ended December 31, 2023 and 2022

Statements of Changes in Stockholders’ Equity for the years ended December 31, 2023 and 2022

Statements of Cash Flows for the years ended December 31, 2023 and 2022

to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID Number 688 )

Consolidated Balance Sheets as of December 31, 2024 and 2023

Consolidated Statements of Operations for the years ended December 31, 2024 and 2023

Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2024 and 2023

Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023

Notes to Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Shareholders and Board of Directors of

Equipment Corporation and Subsidiaries

the Stockholders and Board of Directors of

Equipment Corporation

on the Financial Statements

have audited the accompanying consolidated balance sheets of CVD Equipment Corporation and Subsidiaries (the “Company”) as

of December 31, 2023 and 2022, the related consolidated statements of operations, changes in stockholders’ equity and cash flows for each

of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December

31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023,

in conformity with accounting principles generally accepted in the United States of America.

of December 31, 2024 and 2023, the related consolidated statements of operations, changes in stockholders’ equity and cash flows

for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial

statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the

Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period

ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

financial statements are the responsibility of the Company’s management.

48 unchanged sentences

and review contracts to ensure that the recognition of revenue over time was appropriate;

management’s ability to reasonably estimate costs by performing a comparison of the actual costs to prior period estimates,

including evaluating the timely identification of circumstances that may warrant a modification to the estimated costs;

management’s methodologies and the consistency of management’s methodologies over the life of the contracts;

the original estimated costs and profit margins on System Projects by obtaining the original estimates, comparing the actual costs

and profit margins to the original estimates and investigating significant changes;

the estimated costs to complete Systems Projects that were not completed during the year ended December 31, 2023 by comparing the

estimated cost to complete at December 31, 2023 to actual cost incurred subsequent to December 31, 2023.

management’s ability to reasonably estimate costs by performing a comparison of the

actual costs to prior period estimates, including evaluating the timely identification

of circumstances that may warrant a modification to the estimated costs;

management’s methodologies and the consistency of management’s methodologies

over the life of the contracts;

the original estimated costs and profit margins on System Projects by obtaining the original

estimates, comparing the actual costs and profit margins to the original estimates and investigating

significant changes;

the estimated costs to complete Systems Projects that were not completed during the year

ended December 31, 2024 by comparing the estimated cost to complete at December 31, 2024

to actual cost incurred subsequent to December 31, 2024.

have served as the Company’s auditor since 2019.

March 28, 2024

EQUIPMENT CORPORATION AND SUBSIDIARIES

3 unchanged sentences

Current assets:

Cash and cash

Accounts receivable, net

Cash and cash equivalents

Accounts receivable, net of allowance for credit losses

Contract assets

Inventories, net

current assets

Other current assets

Total current assets

Employee retention credit receivable

Property, plant and equipment, net

Intangible assets, net

LIABILITIES AND STOCKHOLDERS’

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

1 unchanged sentence

Accrued expenses

Current maturities of long-term

Deposits from purchasers

of MesoScribe assets – note 15

Current maturities of long-term debt

Deposits from purchasers of MesoScribe assets – note 14

Contract liabilities

Total current liabilities

Long-term debt, net

of current portion

Long-term debt, net of current portion

Total liabilities

Commitments and contingencies (see note 15)

Stockholders’ equity:

Common stock - $ 0.01 par

value – 20,000,000 shares

issued and outstanding 6,824,511 at December 31,

2023 and 6,760,938 at December

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

issued and outstanding 6,881,838 at December 31, 2024 and 6,824,511 at December 31, 2023

Additional paid-in capital

(Accumulated deficit) retained

Total stockholders’

Total liabilities and

stockholders’ equity

accompanying notes are an integral part of the consolidated financial statements

Accumulated deficit

Total stockholders’ equity

Total liabilities and stockholders’ equity

The accompanying notes are an integral part of the consolidated financial

EQUIPMENT CORPORATION AND SUBSIDIARIES

6 unchanged sentences

General and administrative

Loss on disposition of

Total operating expenses

Gain on sales of equipment

Loss on disposition of Tantaline

Impairment charge

Total operating expenses, net

Operating loss

2 unchanged sentences

Interest expenses

Employee retention credits

Foreign exchange income

Total other income,

Total other income, net

Loss before income tax

Income tax (benefit)

Income tax expense (benefit)

Loss per common share:

Weighted average number of shares:

accompanying notes are an integral part of the consolidated financial statements

The accompanying notes are an integral part of the consolidated financial

EQUIPMENT CORPORATION AND SUBSIDIARIES

2 unchanged sentences

thousands, except share amounts)

(Accumulated Deficit) / Retained

Retained Earnings

Balance at January 1, 2023

Stock-based compensation

Exercise of stock options and issuance of shares

Balance at December 31, 2023

Stock-based compensation

Exercise of stock options and

Balance at December 31, 2024

accompanying notes are an integral part of the consolidated financial statements

The accompanying notes are an integral part of the consolidated financial

EQUIPMENT CORPORATION AND SUBSIDIARIES

2 unchanged sentences

Cash flows from operating activities:

Adjustments to reconcile

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

Loss on disposition of

Impairment charge

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

Stock-based compensation

Depreciation and amortization

Changes in operating assets

and liabilities, net of effects of disposition of Tantaline:

Provision for excess and obsolete inventory

Provision for bad debt

Gain on sales of equipment

Loss on disposition of Tantaline

Impairment charge

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

Accounts receivable

Contract assets

Income tax receivable

Employee retention credit

Other current assets

Employee retention credit receivable

Accounts payable

Accrued expenses

Net cash (used in) provided

by operating activities

Contract liabilities

Net cash used in operating activities

Cash flows from investing activities:

Net cash used in disposition

Deposits from purchaser

of MesoScribe assets

Purchases of property and

Capitalized patent costs

Net proceeds from sale

Net cash used in investing

Purchase of property and equipment

Net proceeds from sales of equipment

Net cash used in disposition of Tantaline

Net cash provided by (used in) investing activities

Cash flows from financing activities:

Proceeds from exercise

of stock options

of long-term debt

Net cash used in financing

Payments of long-term debt

Proceeds from exercise of stock options

Net cash used in financing activities

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents

at end of year

Cash and cash equivalents at end of year

Supplemental disclosure of cash flow information:

1 unchanged sentence

Interest paid

Non-cash investing and financing activities:

obtained for new equipment

accompanying notes are an integral part of the consolidated financial statements

Inventory transferred to property, plant and equipment

The accompanying notes are an integral part of the consolidated financial

EQUIPMENT CORPORATION AND SUBSIDIARIES

7 unchanged sentences

applications and research.

Its products are used in production environments as well as research and development centers, both academic

and corporate.

conduct our business through three reportable operating segments:

i) CVD Equipment that supplies chemical vapor deposition, physical

vapor transport and thermal process equipment;

ii) SDC that designs and manufactures ultra-high purity gas and chemical delivery control

and iii) CVD Materials that provide products related to advanced materials and coatings.

The Company’s products are used in production environments as well as research and development centers,

both academic and corporate.

2 - Summary of Significant Accounting Policies

7 unchanged sentences

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 the accompanying Form 10-K.

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

Reclassifications

6 unchanged sentences

intercompany accounts and transactions have been eliminated in consolidation.

EQUIPMENT CORPORATION AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2023 and 2022

2 - Summary of Significant Accounting Policies (continued)

preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires

7 unchanged sentences

for deferred tax assets, estimated lives and impairment considerations of long-lived assets and valuation of stock-based compensation.

EQUIPMENT CORPORATION AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2024 and 2023

2 - Summary of Significant Accounting Policies (continued)

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

27 unchanged sentences

In making such estimates, significant judgment is required to

EQUIPMENT CORPORATION AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2023 and 2022

2 - Summary of Significant Accounting Policies (continued)

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

8 unchanged sentences

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 CONSOLIDATED FINANCIAL STATEMENTS

31, 2024 and 2023

2 - Summary of Significant Accounting Policies (continued)

ASC 606, payments received from customers in excess of revenue recognized to-date results in a contract liability.

These contract liabilities

are not considered to represent a significant financing component of the contract because we believe these cash advances and deposits

are generally used to meet working capital demands which can be higher in the earlier stages of a contract.

Also, advanced payments and

deposits provide us with some measure of assurance that the customer will perform on its obligations under the contract.

are not considered to represent a significant financing component of the contract because the Company believes these cash advances and

deposits are generally used to meet working capital demands which can be higher in the earlier stages of a contract.

Also, advanced payments

and deposits provide the Company with some measure of assurance that the customer will perform on its obligations under the contract.

assets include unbilled amounts typically resulting from system sales under contracts and represents revenue recognized that exceeds

13 unchanged sentences

the customer.

For the year ended December 31, 2023 and 2022, all system equipment sales were recorded over time by using an input method.

For the years ended December 31, 2024 and 2023, all system equipment sales were recorded over time by using an input method

except for a) one contract that was recorded as revenue at the point in time the equipment was transferred to the customer during 2024

and b) one contract that was entered during 2024 and will be recognized as revenue after December 31, 2024 upon transfer of the equipment

to the customer.

EQUIPMENT CORPORATION AND SUBSIDIARIES

29 unchanged sentences

is more likely than not that future tax benefits will not be utilized based on a lack of sufficient positive evidence.

Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) we determine whether

it is more likely than not the tax position will be sustained on examination by taxing authorities based on the technical merits of the

position and (2) for those positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax

benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority.

EQUIPMENT CORPORATION AND SUBSIDIARIES

2 unchanged sentences

2 - Summary of Significant Accounting Policies (continued)

Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) the Company determines

whether it is more likely than not the tax position will be sustained on examination by taxing authorities based on the technical merits

of the position and (2) for those positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount

of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority.

The Company recognizes

potential interest and penalties related to uncertain tax positions in income tax expense.

Company’s policy for global intangible low taxed income (“GILTI”) is to treat such amounts as a period cost when incurred.

4 unchanged sentences

Long-lived assets are reviewed for impairment whenever events or circumstances indicate their carrying

value may not be recoverable.When such events or circumstances arise, an estimate of the future undiscounted cash flows produced by the

asset, or the appropriate grouping of assets, is compared to the asset’s carrying value to determine if impairment exists.If the

asset is determined to be impaired, the impairment loss is measured on the excess of its carrying value over its fair value.

be disposed of are reported at the lower of their carrying value or net realizable value.

value may not be recoverable.

When such events or circumstances arise, an estimate of the future undiscounted cash flows produced by

the asset, or the appropriate grouping of assets, is compared to the asset’s carrying value to determine if impairment exists.

If the asset is determined to be impaired, the impairment loss is measured on the excess of its carrying value over its fair value.

to be disposed of are reported at the lower of their carrying value or net realizable value.

Plant and Equipment

5 unchanged sentences

Depreciation and amortization of all other assets are recorded as operating expenses.

cost of intangible assets is being amortized on a straight-line basis over their estimated initial useful lives which ranged from 5 to

and Development

1 unchanged sentence

into new products.

EQUIPMENT CORPORATION AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2024 and 2023

2 - Summary of Significant Accounting Policies (continued)

earnings per common share is computed by dividing the net income by the weighted average number of shares of common stock outstanding

3 unchanged sentences

upon exercise of common stock options, unvested restricted shares, and warrants.

EQUIPMENT CORPORATION AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2023 and 2022

2 - Summary of Significant Accounting Policies (continued)

common shares issued are calculated using the treasury stock method, which recognizes the use of proceeds that could be obtained upon

9 unchanged sentences

Insurance Corporation limit.

The amount in excess of the limit at both December 31, 2023 and 2022 was $ 1.5 million.

The Company’s

cash in our Denmark subsidiary exceeded the government guarantee limit by approximately $ 0.5 million at December 31, 2022.

The amount in excess of the limit at December 31, 2024 and 2023 was $ 0.4 million and $ 1.5 million, respectively.

Concentration

16 unchanged sentences

history, current economic trends and reasonable supportable forecasts.

Company has accounts receivables from certain customers that exceed 10 %.

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, and as of December 31, 2022, two customers that represented 35.7 %

of total accounts receivable.

EQUIPMENT CORPORATION AND SUBSIDIARIES

2 unchanged sentences

2 - Summary of Significant Accounting Policies (continued)

receivable is presented net of an allowance for credit losses of $ 36,000 as of both December 31, 2023 and 2022.

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.

receivable is presented net of an allowance for credit losses of $ 48,000 , $ 36,000

as of December 31, 2024, 2023 and 2022, respectively.

The 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

Future changes to the estimated allowance for credit losses could be material to our results of operations and financial

The provision for bad debt expense was $ 13,000 and

the years ended December 31, 2024 and 2023, respectively.

Company has accounts receivables from certain customers that exceed 10 % of total accounts receivable.

As of December 31, 2024, the accounts

receivable balance includes amounts from three customers that represented 28.6 %, 14.0 % and 11.9 % of total accounts receivable, and 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.

Concentrations

to a single customer in any one year can exceed 10 % of our total sales.

There were three customers in the year ended December 31, 2023

that represented 14.3 %, 13.5 % and 10.9 % of our revenues, while there was one customer in the year ended December 31, 2022 that represented

29.2 % of our revenues.

The loss of a large customer could have a material adverse effect on the Company’s business and financial

sales to customers represented approximately 17 % of sales for both years ended December 31, 2023 and 2022.

Export sales in both 2023

and 2022 were primarily to customers in Europe and Asia.

All contracts except those entered into by the Company’s subsidiary in

Denmark are denominated in U.S.

There was one customer of the CVD Equipment segment in the year

ended December 31, 2024 that represented 29.5 % of our revenues, while there were three customers of the CVD Equipment segment in the

year ended December 31, 2023 that represented 14.3 %, 13.5 % and 10.9 % of our revenues.

The loss of a large customer could have a material

adverse effect on the Company’s business and financial condition.

sales to customers represented approximately 4.3 % and 17.2 % of sales years ended December 31, 2024 and 2023 respectively.

in both 2024 and 2023 were primarily to customers in Europe and Asia.

All contracts except those entered into by the Company’s

subsidiary in Denmark are denominated in U.S.

The Company has not entered into any foreign exchange contracts.

7 unchanged sentences

the manufacturing and delivery of its products or cause it to carry excess or obsolete inventory and could cause it to redesign its products.

EQUIPMENT CORPORATION AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2024 and 2023

2 - Summary of Significant Accounting Policies (continued)

Value of Financial Instruments

3 unchanged sentences

long-term debt approximates fair value based on prevailing borrowing rates currently available for loans with similar terms and maturities.

EQUIPMENT CORPORATION AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2023 and 2022

2 - Summary of Significant Accounting Policies (continued)

Company records stock-based compensation in accordance with the provisions set forth in ASC 718, “Stock Compensation”.

4 unchanged sentences

risk-free interest rates.

The value of restricted stock awards are based on the fair value on the date of the grant.

is the Company’s policy to include freight charges billed to customers in total revenue.

2 unchanged sentences

Adopted Accounting Standards

June 2016, the FASB issued Accounting Standard Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic

326) , which require that financial assets measured at amortized cost be presented at the net amount expected to be collected.

allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset to present the

net carrying value at the amount expected to be collected.

The income statement reflects the measurement of credit losses for newly recognized

financial assets, as well as the increase or decreases of expected credit losses that have taken place during the period.

The measurement

of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect

the collectability of the reported amount.

The adoption of the ASU 2016-3 as of January 1, 2023 did not have a material impact on the

Company’s financial position.

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

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 2024, and interim periods thereafter,

and was applied retrospectively to the fiscal year 2024 financial statements..

The Company adopted ASU 2023-07 in 2024 and the required

disclosures are included in Note 13.

Issued 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

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.

The Company is currently evaluating the timing of adoption and impact of this ASU

on our consolidated financial statements.

EQUIPMENT CORPORATION AND SUBSIDIARIES

2 unchanged sentences

2 - Summary of Significant Accounting Policies (continued)

significantly

increasing or decreasing in the 12 months following the reporting date.

This ASU is effective for annual periods beginning after December

Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance.

ASU should be applied on a prospective basis;

however, retrospective application is permitted.

We are currently evaluating the impact

that ASU 2023 – 09 will have on our consolidated financial statements.

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, Topic280 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 will have on our consolidated

financial statements.

November 2024, the FASB issued ASU 2024-03, “Disaggregation of Income Statements Expenses (Subtopic 220-40),” to improve

income statement expenses disclosure.

The standard requires more detailed information related to the types of expenses, including (among

other items) the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization included within

each interim and annual income statement’s expense caption, as applicable.

This authoritative guidance can be applied prospectively

or retrospectively and will be effective for financial statements issued for annual periods beginning after December 15, 2026, and interim

reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently

in the process of evaluating the impact of adoption on its consolidated financial statements.

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

2 unchanged sentences

impact on our financial reporting.

following table represents a disaggregation of revenue from contracts by end markets for the years ended December 31, 2024 and 2023 (in

Schedule of Disaggregation of Revenue

Point in time

Year Ended December 31, 2024

Point in time

Year Ended December 31, 2023

Point in time

EQUIPMENT CORPORATION AND SUBSIDIARIES

1 unchanged sentence

31, 2024 and 2023

following table represents a disaggregation of revenue from contracts by end markets for the years ended December 31, 2023 and 2022 (in

of Disaggregation of Revenue

Ended December 31, 2023

Ended December 31, 2022

3 – Revenue (continued)

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

4 unchanged sentences

represents customers that are universities and other research institutions.

Company has unrecognized contract revenue of approximately $ 16.3 million at December 31, 2023, which it expects to recognize as revenue

within the next twelve months.

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

towards contract completion and to calculate the corresponding amount of revenue to recognize.

Company has unrecognized contract revenue of approximately $ 16.4 million at December 31, 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 the Company’s

progress towards contract completion and to calculate the corresponding amount of revenue to recognize.

in estimates for sales of systems occur for a variety of reasons, including but not limited to (i) build accelerations or delays, (ii)

1 unchanged sentence

Changes in estimates may have a material effect on the Company’s consolidated financial position and results of operations.

EQUIPMENT CORPORATION AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2023 and 2022

3 – Revenue (continued)

assets and contract liabilities on input method type contracts in progress are summarized at December 31 as follows (in thousands):

of Cost and Estimated Earnings in Excess of Billings

Costs incurred

on contracts in progress

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-systems contracts

Deferred revenue related to non-systems contracts

liability in excess of contract assets

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

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

Contract assets

Contract liabilities

the contract liability balances at December 31, 2023 and December 31, 2022, $ 4.7

1 unchanged sentence

million was recognized as revenue during the years ended December 31, 2024 and 2023, respectively.

Contract assets at December 31,

2021 were $ 2.5

Contract assets and contract

liabilities at December 31, 2022 were $ 2.2

million and $ 4.0 million, respectively.

EQUIPMENT CORPORATION AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2024 and 2023

4 - Inventories

as of December 31 consist of (in thousands):

of Inventories, net

Schedule of Inventories, net

Raw materials

1 unchanged sentence

Finished goods

EQUIPMENT CORPORATION AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2023 and 2022

in 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 year ended December 31, 2024, the Company recorded a non-cash charge to reduce the net realizable value

of such inventory by approximately $ 1.3 million based on its assessment of the current market for silicon carbide equipment.

of December 31, 2024, the net amount of PVT 150 systems inventory is approximately $ 0.5 million.

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.

5 – Property, Plant and Equipment

classes of property, plant and equipment consist of the following as of December 31 (in thousands):

of Property, Plant and Equipment

Schedule of Property, Plant and Equipment

Buildings and improvements

1 unchanged sentence

Construction in progress

Totals at cost

accumulated depreciation

2 unchanged sentences

expense was $ 0.7 million and $ 0.8 million for the years ended December 31, 2024 and 2023, respectively.

EQUIPMENT CORPORATION AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2024 and 2023

5 – Property, Plant and Equipment (continued)

Company entered into an agreement with the Town of Islip Industrial Development Agency (Islip IDA) in July 2021 under which the Company

5 unchanged sentences

have a material adverse effect on the Company’s financial position and future results of operations and cash flows.

EQUIPMENT CORPORATION AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2023 and 2022

6 – Intangible Assets

assets consisted of the following (in thousands):

of Finite Lived Intangible Assets

expense was $ 0.1 million and $ 0.1 million in years ended December 31, 2023 and 2022, respectively, including costs of abandoned patent

applications.

estimated amortization expense related to intangible assets for each of the five succeeding fiscal years and thereafter as of December

31, 2023 is approximately $ 1,000 per year.

6 – Accrued Expenses

expenses consist of the following as of December 31 (in thousands):

of Accrued Expenses

Schedule of Accrued Expenses

Accrued wages and benefits

Accrued vacation

accrued expenses

EQUIPMENT CORPORATION AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2023 and 2022

Accrued material purchases

Total accrued expenses

7 – Long-term Debt

debt as of December 31 consist of the following (in thousands, except percentages and amounts in notes):

of Long Term Debt

Equipment loan payable in

monthly repayments of $ 8 including interest at 6 % per annum

Schedule of Long Term Debt

Equipment loan payable in monthly repayments of $ 8

including interest at 6 % per annum

current maturities

Long-term debt,

net of current maturities

September 2022 , the Company entered into a loan agreement to fund the acquisition of machinery equipment in the amount of $ 0.4

Long-term debt, net of current maturities

September 2022 , the Company entered into a loan agreement to fund the acquisition of equipment in the amount of $ 0.4 million.

EQUIPMENT CORPORATION AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2024 and 2023

7 – Long-term Debt (continued)

maturities of long-term debt as of December 31, 2024 are as follows (in thousands):

of Maturities of Long Term Debt

Schedule of Maturities of Long Term Debt

8 – Earnings per Share

calculation of basic and diluted weighted average common shares outstanding as of December 31 is as follows (in thousands):

of Basic and Diluted Weighted Average Common Shares Outstanding

Schedule of Basic and Diluted Weighted Average Common Shares Outstanding

Basic weighted average shares outstanding

Effect of potentially

dilutive share-based awards

Effect of potentially dilutive share-based awards

Diluted weighted average shares outstanding

December 31, 2023, stock options to purchase 846,875 shares of common stock were outstanding and 335,375 were exercisable.

31, 2022, stock options to purchase 673,000 shares of common stock were outstanding and 265,000 were exercisable.

December 31, 2023 and 2022, 846,875 and 673,000 stock options, respectively, were not included in the computation of diluted earnings

December 31, 2024 and 2023, all stock options and unvested restricted stock were not included in the computation of diluted earnings

per share because their effect was antidilutive.

9 – Income Taxes

before income taxes are as follows:

Schedule of Loss Before Income Taxes

EQUIPMENT CORPORATION AND SUBSIDIARIES

1 unchanged sentence

31, 2024 and 2023

10 – Income Taxes

before income taxes are as follows:

of Loss Before Income Taxes

9 – Income Taxes (continued)

expense/(benefit) for income taxes for the years ended December 31 includes the following (in thousands):

of Components of Income Tax Expense (Benefit)

Schedule of Components of Income Tax Expense (Benefit)

Total current tax provision

deferred tax provision

Income tax (benefit)

Total deferred tax provision

Income tax expense (benefit)

reconciliation of the federal statutory income tax rate to our effective tax rate for the years ended December 31 is as follows (in thousands):

of Effective Income Tax Rate Reconciliation

Expected provision at federal statutory

tax rate at 21 %

Increase (decrease) in valuation allowance

Schedule of Effective Income Tax Rate Reconciliation

Expected provision at federal statutory tax rate at 21 %

Increase in valuation allowance

State and local taxes

Foreign tax rate differential

US taxation of foreign operations

Federal research and development credits

Change in tax rates

Non-deductible expenses

Disposition of Tantaline

Income tax (benefit)

Income tax expense (benefit)

EQUIPMENT CORPORATION AND SUBSIDIARIES

3 unchanged sentences

tax effects of temporary differences giving rise to significant portions of the net deferred taxes as of December 31 are as follows (in

of Deferred Tax Assets and Liabilities

Schedule of Deferred Tax Assets and Liabilities

Deferred income tax assets:

Net operating

loss carryforwards

Net operating loss carryforwards

R&D tax credit carryforwards

2 unchanged sentences

Intangible assets

Capitalized research and

Capitalized research and development

Deferred income tax assets

valuation allowance

income tax assets, net of valuation allowance

Deferred income tax assets, net of valuation allowance

Deferred incomes tax liability:

Property, plant and equipment

income tax asset, net

Prepaid expenses

Deferred income tax asset, net

assessing the realizability of deferred tax assets, management considers whether it is more likely than not that the deferred tax assets

13 unchanged sentences

be required to reduce our existing valuation allowance resulting in less income tax expense.

the year ended December 31, 2023, the valuation allowance increased by approximately $ 0.7 million from the prior year primarily from

current year operating losses for which no tax benefit was provided.

the year ended December 31, 2024, the valuation allowance increased by approximately $ 0.5

million from the prior year primarily the result of capitalized research and development costs.

EQUIPMENT CORPORATION AND SUBSIDIARIES

14 unchanged sentences

expect that its unrecognized tax benefits will significantly increase or decrease within twelve months.

Company files federal income tax returns and income tax returns in various state and local tax jurisdictions and in Denmark.

Company files federal income tax returns and income tax returns in various state and local tax jurisdictions.

tax years open to examination are 2021 to 2024.

11 unchanged sentences

Based on the analysis,

the Company determined that it was entitled to an ERC of approximately $ 1.5 million related to payroll paid in the first and third quarters

of 2021 under the applicable Internal Revenue Service regulations related to ERCs.

ERCs are not within the scope of ASC 740, Income Taxes , the Company has chosen to account for the ERCs by analogizing to the International

Standard IAS 20, Accounting for Government Grants and Disclosure of Government Assistance.

In accordance with IAS 20, an entity

recognizes government grants only when there is reasonable assurance that the entity will comply with the conditions attached to them

and the grants will be received.

Accordingly, the Company recognized a non-current receivable of $ 1.5 million as of December 31, 2022

and other income of $ 1.5 million for the year ended December 31, 2022.

the Company determined that it was entitled to an ERC of approximately $ 1.5 million and recognized a receivable of $ 1.5 million as of

December 31, 2022.

The Company received the ERC credit in July 2023.

33 unchanged sentences

that were included in the following line items in our Consolidated Statements of Operations (in thousands):

of Stock Based Compensation

Schedule of Stock Based Compensation

Cost of revenue

1 unchanged sentence

General and administrative

Total stock-based compensation

Total stock-based compensation expense

compensation expense in both years included approximately $ 0.2 million related to restricted stock awards pursuant to a Director Compensation

4 unchanged sentences

assumptions as provided below.

of Weighted Average Assumptions

Schedule of Weighted Average Assumptions

Exercise price

5 unchanged sentences

the vesting period and contractual period of the option.

The Company has 846,875 of outstanding stock options under the three plans at

December 31, 2023.

The expected volatility is measured using historical daily price changes of

the Company’s common stock over the respective expected term.

The Company has 823,125 of outstanding stock options under the three

plans at December 31, 2024.

EQUIPMENT CORPORATION AND SUBSIDIARIES

3 unchanged sentences

following table summarizes stock options awards for the years ended December 31, 2024 and 2023:

of Stock Options Awards

Schedule of Stock Options Awards

Exercise Price

Outstanding at December 31, 2022

3 unchanged sentences

Outstanding at December 31, 2024

December 31, 2024 and 2023, stock options to purchase 485,000 and 265,000 , respectively, shares of common stock were exercisable.

following table summarizes information about the outstanding and exercisable options at December 31, 2024:

of Outstanding and Exercisable Options Ranges of Exercise Prices

Schedule of Outstanding and Exercisable Options Ranges of Exercise Prices

Options Outstanding

14 unchanged sentences

following table summarizes restricted stock awards for the years ended December 31, 2024 and 2023:

of Restricted Stock Awards

Schedule of Restricted Stock Awards

Average Grant

Restricted Stock

Unvested outstanding at January 1, 2023

2 unchanged sentences

Forfeited or cancelled

Unvested outstanding

at December 31, 2023

Unvested outstanding at December 31, 2024

fair value of the restricted stock awards is recorded as stock-based compensation expense over the one-year vesting period and totaled

$ 0.17 million $ 0.16 million for the years ending December 31, 2023 and 2022, respectively.

prior years, the Company issued restricted stock units or RSUs.

During the year ended December 31, 2022, 5,500 RSUs vested which had

an intrinsic value of $ 22,745 .

No restricted stock units vested during the year ended December 31, 2023 and there were no RSUs outstanding

as of December 31, 2023 and 2022.

$ 0.2 million for the both years ending December 31, 2024 and 2023, respectively.

12 – Defined Contribution Plan

12 unchanged sentences

31, 2024 and 2023

14 – Segment Reporting

Company operates through three segments:

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

The CVD Equipment

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

SDC manufactures ultra-high

purity gas control systems.

The CVD Materials segment provides material coatings for aerospace, medical, electronic and other applications.

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.

These activities primarily include

expenses related to certain corporate officers and support staff, expenses related to the Company’s Board of Directors, stock option

expense for shares granted to corporate administration employees, certain consulting expenses, investor and shareholder relations activities,

and all of the Company’s legal, auditing and professional fees, and interest expense.

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

consolidation.

Intersegment sales for the year ended December 31, 2023 and 2022 by the SDC segment to the CVD Equipment segment were

$ 439,000 and $ 573,000 , respectively.

Intersegment sales by the CVD Equipment segment to the SDC

segment for the year ended December 31, 2023 were $ 109,000 .

There were no intersegment sales by the CVD Equipment segment to the SDC

segment during the year ended December 31, 2022.

following table presents certain information regarding the Company’s segments as of and for the years ended December 31, 2023 and

December 31, 2022 (in thousands, including amount in notes):

Operating (loss)

Pretax (loss) income (1)

Depreciation and amortization

Purchases of property,

plant & equipment

Operating (loss) income

Pretax (loss) income (2)

Depreciation and amortization

Purchases of property, plant & equipment (3)

Materials segment includes loss on sale of Tantaline of $ 0.2 million and an impairment charge related to MesoScribe fixed assets

of $ 0.1 million.

other income related to ERCs of $ 1,103 , $ 303 and $ 123 for the CVD, SDC and Materials segments, respectively.

$ 0.4 million of purchased equipment financed with a loan

13 - Reportable Segments

Company has determined that it has three reportable segments, organized primarily based on product offerings, as follows:

Equipment – manufactures chemical vapor deposition, physical vapor transport and thermal

process equipment.

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

- provided electronic printing services and products (heaters, antennas, and sensors).

CVD Equipment and SDC also sell spares and parts and provide services related to the equipment each segment sells.

One other business,

Tantaline, did not meet the quantitative threshold for separate reporting and has been reflected as “Other” below.

chief operating decision maker (“CODM”) of the Company is the Company’s chief executive officer.

The CODM assesses

performance and decides how to allocate resources, including employees, financial or capital resources, based on segment net income (loss).

The CODM considers actual-to-actual variances on a quarterly basis when making decisions about allocating capital and other resources

to the segments and to assess the performance for each segment.

results for the reportable segments and other business are prepared on a basis consistent with the internal disaggregation of financial

information to assist the CODM is making internal operating decisions.

income and expenses are excluded from segment net income (loss) and included in the unallocated amounts in the reconciliation of reportable

segment net income (loss) to net loss.

These items are not used by the CODM in allocating resources or evaluating the results of the

segments and include the following:

corporate expenses consisting of employment costs of executives, finance, information technology

and human resources;

board of director fees;

professional fees;

shareholder and investor relations expense;

directors’ and officers’

interest income and income tax expense.

Segment income (loss) from operations may not be consistent with measures used by

other companies.

EQUIPMENT CORPORATION AND SUBSIDIARIES

1 unchanged sentence

31, 2024 and 2023

15 – CVD Materials – Tantaline and MesoScribe Subsidiaries

May 26, 2023, the Company sold its Tantaline subsidiary located in Nordborg, Denmark in exchange for a nominal amount at closing and

an earn-out provision based on any net income that Tantaline may earn during the five-year period ending December 31, 2027.

recorded a loss of $ 0.2 million upon the sale.

Any earn-out amounts will be recognized when and if any such amounts become probable of

decision to sell Tantaline was based on the Company’s ongoing strategy to focus on the equipment business consisting of the CVD

Equipment and SDC segments and reduce its focus on the non-core CVD Materials business.

the loss on disposition of $ 0.2 million, the revenues and net income of Tantaline were $ 0.5 million and $ 0.1 million, respectively, for

the year ended December 31, 2023.

The total assets and total liabilities of the Tantaline subsidiary were $ 1.1 million and $ 0.4 million

as of December 31, 2022.

13 - Reportable Segments (continued)

following provides segment information as described below (in thousands):

Schedule of Segments

For the year ended December 31, 2024

Segment revenue

Cost of revenue

Research & development

General & administrative

Gain on sales of equipment

Impairment charge

Interest expense

Segment net income (loss)

Segment assets

Capital expenditures

Depreciation & amortization

For the year ended December 31, 2023

Segment revenue

Cost of revenue

Research & development

General & administrative

Impairment charge

Interest expense

Segment net income (loss)

Segment assets

Capital expenditures

Depreciation & amortization

EQUIPMENT CORPORATION AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2024 and 2023

13 - Reportable Segments (continued)

following table presents a reconciliation of revenue of reportable segments to consolidated revenue (in thousands):

Schedule of Reconciliation of Revenue of Reportable Segments to Consolidated Revenue

Year ended December 31,

Revenue of reportable segments

Other - Tantaline

Intersegment revenue

Consolidated total revenue

revenues are determined based on similar product sales to external customers of the Company.

following table presents a reconciliation of net income (loss) of reportable segments to consolidated net loss (in thousand):

Schedule of Reconciliation of Net Income (Loss) of Reportable Segments to Consolidated Net Loss

Year ended December 31,

Net income (loss) of reportable segments

Unallocated amounts:

Corporate expenses

Other - Tantaline

Unallocated amounts

Interest income

Income tax (expense) benefit

Consolidated net loss

following table presents a reconciliation of total assets of reportable segments to consolidated total assets (in thousands):

Schedule of Reconciliation of Total Assets of Reportable Segments to Consolidated Total Assets

Year ended December 31,

Total assets of reportable segments

Unallocated amounts:

Cash equivalents

Other current assets

Consolidated total assets

EQUIPMENT CORPORATION AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2024 and 2023

13 - Reportable Segments (continued)

following table presents a revenue by geographic area (in thousands):

Schedule of Revenue by Geographic Area

Year ended December 31,

United States

North America, excluding US

Europe, Middle East and Africa

Consolidated total revenue

geographic reporting, revenues are attributed to the location in which in the customer facility is located.

All of the Company’s

long-lived assets are located in the United States.

14 – MesoScribe and Tantaline

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

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

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 year ended December 31, 2023, the Company recorded

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

upon fulfillment of remaining orders.

There were no impairment charges recorded in 2022.

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

to the Agreement, the Company sold certain proprietary equipment relating to its plasma spray technology and material deposition system

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

Agreement, for an aggregate adjusted purchase price of $ 0.8 million.

The purchase price was payable in several installments and contingent

upon certain performance metrics and other milestones.

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

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

The Company expects the transaction to be completed in 2024 with

the shipment of the equipment to the purchaser.

Company fulfilled remaining orders for MesoScribe products during 2024 at which time it ceased operations of MesoScribe and recorded

a $ 0.7 million gain upon the completion of the sale of the equipment during the year ended December 31, 2024.

During the year ended December

31, 2023, the Company recorded an impairment charge of $ 0.1 million for other equipment of MesoScribe.

revenues and net income of MesoScribe were $ 0.8 million and $ 1.1 million for the year ended December 31, 2024, including the gain on

sale of equipment of $ 0.7 million.

revenues and net income of MesoScribe were $ 0.7 million and $ 33,000 for the year ended December 31, 2023, including the impairment charge

of $ 0.1 million.

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

2023 and $ 0.9 million and $ 0.1 million, respectively, as of December 31, 2022.

EQUIPMENT CORPORATION AND SUBSIDIARIES

1 unchanged sentence

31, 2024 and 2023

14 – MesoScribe and Tantaline (continued)

total assets and total liabilities of the MesoScribe subsidiary were $ 0.6

million and $ 0 ,

respectively, as of December 31, 2024 and $ 0.2

respectively, as of December 31, 2023.

May 26, 2023, the Company sold its Tantaline subsidiary located in Nordborg, Denmark in exchange for a nominal amount at closing and

an earn-out provision based on any net income that Tantaline may earn during the five-year period ending December 31, 2027.

recorded a loss of $ 0.2 million upon the sale.

Any earn-out amounts will be recognized when and if any such amounts become probable of

The Company received a $ 6,000 earn-out payment in 2024 based on the results of Tantaline’s operations for the year ended

December 31, 2023.

the loss on disposition of $ 0.2 million, the revenues and net income of Tantaline were $ 0.5 million and $ 0.1 million, respectively, for

the year ended December 31, 2023.

15 – Risks and Uncertainties

3 unchanged sentences

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.

● Significant

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

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures