What changed in this filing

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Item 1. Financial Statements

2026-08-12 compared with 2026-05-14 · 220 added, 178 removed, 317 unchanged (56% of the section changed)

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thousands, except share amounts)

June 30, 2026

December 31, 2025

Current assets

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Contract assets

Amount held in escrow

Current assets of discontinued operations

Assets held for sale – equipment

Assets held for sale

Other current assets

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Accrued expenses

Income taxes payable

Contract liabilities

Current maturities of long-term debt

Current liabilities of discontinued operations

Contract liabilities

Total current liabilities

Security deposit

Total liabilities

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Stockholders’ equity:

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

6,937,338 issued and outstanding at March 31, 2026 and December 31, 2025

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

issued and outstanding 6,946,703 and 6,937,338 at June 30, 2026 and December 31, 2025, respectively

Additional paid-in capital

Accumulated deficit

Retained earnings (accumulated deficit)

Total stockholders’ equity

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Three months ended

Six months ended

Cost of revenue

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Interest expense

Rental income, net of expenses

Total other income, net

Loss from continuing operations before income taxes

Loss from continuing operations before

Income tax expense

Net loss from continuing operations

Discontinued operations:

Income from discontinued operations

Transaction costs on disposal of discontinued operations

Income from discontinued operations, net of taxes

Income from discontinued operations, net of income taxes (Note 2)

Net income (loss)

Net income (loss) per share of common stock – basic and diluted

Loss from continuing operations per common share

Income from discontinued operations per common share

Net income (loss) per common share

Loss from continuing operations

Income from discontinued operations

Net income (loss)

Weighted-average number of common shares outstanding - basic and diluted

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

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thousands, except share amounts)

months ended March 31, 2026 and 2025

Paid-in Capital

months ended June 30, 2026 and 2025

Retained Earnings

Balance at April 1, 2026

Stock-based compensation

Balance at June 30, 2026

Balance at April 1, 2025

Stock-based compensation

Balance at June 30, 2025

months ended June 30, 2026 and 2025

Retained Earnings

Balance at January 1, 2026

Stock-based compensation

Balance at March 31, 2026

Balance at June 30, 2026

Balance at January 1, 2025

Stock-based compensation

Balance at March 31, 2025

Balance at June 30, 2025

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

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Consolidated Statements of Cash Flows

Three Months Ended

Six months ended

Cash flows from operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash used in

operating activities:

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Stock-based compensation

Depreciation and amortization

Gain on disposition of SDC, net of income taxes

Gain on sale of equipment

Changes in assets and liabilities:

Provision for bad debts

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

Accounts receivable

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Contract liabilities

Security deposit

Net cash used in operating activities

Cash flows from investing activities:

Proceeds from disposition of SDC

Proceeds from assets held for sale and sale of equipment

Investment in captive insurance company

Purchases of property and equipment

Investment in captive insurance company

Net cash provided by (used in) investing activities

Cash flows from financing activities

Repayments of long-term debt

Payments of long-term debt

Net cash used in financing activities

Net decrease in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

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Interest paid

Non-cash activity – amount held in escrow

Non-cash activity – accrued income taxes on gain on sale of SDC

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

EQUIPMENT CORPORATION AND SUBSIDIARIES

to Condensed Consolidated Financial Statements

BASIS OF PRESENTATION

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The operating results for the

three months ended March 31, 2026 are not necessarily indicative of the results that can be expected for the year ending December 31,

three and six months ended June 30, 2026 are not necessarily indicative of the results that can be expected for the year ending December

condensed consolidated balance sheet as of December 31, 2025 has been derived from the audited consolidated financial statements at such

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These reclassifications had no effect on net loss.

March 31, 2026, the Company had $ 8.2 million in cash and cash equivalents.

The Company also received net proceeds of approximately $ 14.8

million in April 2026 upon the sale of the SDC business division.

June 30, 2026, the Company had $ 23.5 million in cash and cash equivalents.

The Company anticipates that the existing cash and cash equivalents

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DISCONTINUED OPERATIONS

March 23, 2026, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with a buyer to

sell its SDC business division.

On April 1, 2026, the Company completed the transaction whereby substantially all the assets related

to SDC were sold.

aggregate consideration paid to the Company in connection with the transaction was $ 16.9 million and is subject to customary post-closing

At the closing, $ 0.9 million of the purchase price was placed in escrow to secure post-closing adjustments and indemnification

obligations in accordance with the Asset Purchase Agreement.

The Asset Purchase Agreement contains customary representations, warranties,

covenants and indemnification provisions.

The net cash proceeds from the sale of SDC received by the Company in April 2026, after payment

of transaction costs and employee related liabilities, were $ 14.8 million, increasing the Company’s cash balance at the time to

approximately $ 23 million.

March 23, 2026, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with a buyer to sell

its SDC business division.

On April 1, 2026, the Company completed the transaction whereby substantially all the assets related to SDC

DISCONTINUED OPERATIONS (continued)

aggregate consideration paid to the Company in connection with the transaction was $ 17.4

At closing, $ 0.9

million of the purchase price was placed in escrow to secure post-closing adjustments and indemnification obligations in accordance

with the Asset Purchase Agreement.

The Asset Purchase Agreement contains customary representations, warranties, covenants and

indemnification provisions.

The net cash proceeds from the sale of SDC received by the Company in April 2026, after payment of

transaction costs and employee related liabilities, were $ 15.7

The Company expects to pay approximately $ 0.7 million in estimated income taxes related to the gain on the sale of SDC in

the third quarter of 2026.

The net gain on the sale of SDC, including related income tax expense, was $ 13.5

Company retained ownership of its Saugerties, New York facility and entered into a lease agreement with the buyer of SDC, pursuant to

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Accordingly, the financial results of SDC are reflected in the condensed consolidated financial statements as

discontinued operations for all periods presented and the SDC assets and liabilities are considered held for sale as of March 31, 2026.

following table represents the amounts of assets and liabilities of the discontinued operations of SDC (in thousands):

discontinued operations for all periods presented.

following table represents the gain on the disposition of SDC, net of income taxes, for the six months ended June 30, 2026 (in thousands):

OF GAIN ON THE DISPOSITION OF DISCONTINUED OPERATIONS

Sales proceeds received

Amount held in escrow

Total sales price

Net assets transferred to buyer

Transaction expenses

Income tax expense

Gain on disposition of SDC, net of income taxes

following table represents the amounts of assets and liabilities of the discontinued operations of SDC as of December 31, 2025 (in thousands):

SCHEDULE OF AMOUNTS OF ASSETS AND LIABILITIES OF

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Other noncurrent assets

Accounts payable

Accrued expenses

Contract liabilities

Total liabilities

DISCONTINUED OPERATIONS (continued)

following table represents statements of operations information for the discontinued operations of SDC (in thousands):

ended March 31,

Three months ended June 30,

Six months ended June 30,

Cost of revenue

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Income from discontinued operations

Transaction costs on disposal of discontinued operations

Income from discontinued operations, net of taxes

Gain on disposition of SDC, net of income taxes

Income from discontinued operations, net of income taxes

significant components included in the accompanying condensed consolidated statements of cash flow for the discontinued operations of

SDC are as follows (in thousands):

ended March 31,

ended June 30,

Net cash provided by operating activities

Net cash used in investing activities

Net cash provided by (used in) investing activities

Net cash provided by financing activities

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

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

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

Under ASC 606 , the Company

follows a five-step model to:

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

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

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

(1) identify the contract with the customer;

(2) identify the performance obligations in the contract;

(2) identify the performance obligations

in the contract;

(3) determine the transaction price for the contract;

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

and (5) recognize

revenue using one of the following two methods:

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

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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

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

months from commencement of order acceptance.

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

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

the performance obligation.

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

the Company recognizes revenue based on point in time.

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

These system sales

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

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

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

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

revenue based on point in time.

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

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to complete the projects.

In making such estimates, significant judgment is required to evaluate

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

If the estimated total

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

loss becomes known and can be reasonably estimated.

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

three months ended March 31, 2026 and 2025.

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

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

If the estimated total costs on any contract are greater than

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

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

months ended June 30, 2026 and 2025.

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

contract liabilities on our consolidated balance sheet.

Under typical payment terms for our contracts accounted for over time, amounts

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

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

contract liabilities on our condensed consolidated balance sheet.

Under typical payment terms for our contracts accounted for over time,

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

of contractual milestones.

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

These contract liabilities

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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.

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

the amount billed to the customer.

Also, advanced payments and

deposits provide us 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 represent revenue recognized that exceeds the

amount billed to the customer.

liabilities include advance payments and billings in excess of revenue recognized.

The Company typically receives down payments upon

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

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

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

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

any system equipment sales where the equipment would have an alternative use or where the contract provisions of the contract preclude

the use of over time revenue recognition, revenue is recognized at the point in time when control of the equipment is transferred to

the customer.

For the three months ended March 31, 2026 and 2025, all system equipment sales were recorded over time by using an input

method except for one contract that was entered during 2024 and was not recognized as revenue using over time revenue recognition until

July 2025 when a contract modification was entered into with the customer to change certain contract provisions.

any system equipment sales where the equipment would have an alternative use or where the contract provisions of the contract

preclude the use of over time revenue recognition, revenue is recognized at the point in time when control of the equipment is

transferred to the customer.

For the three and six months ended June 30, 2026 and 2025, all system equipment sales were recorded

over time by using an input method except for one contract that was entered into during 2024 and was not recognized as revenue using

over time revenue recognition until July 2025 when a contract modification was entered into with the customer to change certain

contract provisions.

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

net realizable value.

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

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

revenue is recognized.

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

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

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

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

Indirect costs

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

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

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

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separately in the consolidated statements of cash flows, or otherwise disclosed, for all periods presented.

Issued Accounting Standards

Accounting Standards

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

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and cash equivalents

Company had cash and cash equivalents of $ 8.2 million and $ 8.7 million at March 31, 2026 and December 31, 2025, respectively.

Company had cash and cash equivalents of $ 23.5 million and $ 8.7 million at June 30, 2026 and December 31, 2025, respectively.

invests excess cash in U.S.

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

Cash equivalents were $ 7.9 million and $ 8.2 million at March 31, 2026 and December 31, 2025, respectively.

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

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

Cash equivalents consisting of U.S.

treasury securities were $ 23.3 million and $ 8.2 million at June 30, 2026 and December 31,

2025, respectively.

Company’s cash balances are held in United States financial institutions, which from time to time may exceed the Federal Deposit

Insurance Corporation limit.

There were no amounts at risk at March 31, 2026 and December 31, 2025.

There were no amounts at risk at June 30, 2026 and December 31, 2025.

Company routinely assesses the financial strength of its customers .

In accordance with the “expected credit loss”

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

the Company does not expect to collect.

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

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

model of ASC 326, the carrying amount of accounts receivable is reduced by a valuation allowance that reflects the best estimate of the

amounts the Company does not expect to collect.

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

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

conditions and reasonable supportable forecasts .

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history, current economic trends and reasonable supportable forecasts.

receivable is presented net of an allowance for credit losses of $ 15,000 as of both March 31, 2026 and December 31, 2025.

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 credit losses could be material to our results of operations and

financial condition.

receivable is presented net of an allowance for credit losses of $ 15,000 and $ 30,000 as of June 30, 2026 and December 31, 2025, respectively.

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

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 credit losses could

be material to our results of operations and financial condition.

CONCENTRATION OF CREDIT RISK (continued)

March 31, 2026, the accounts receivable balance included amounts from four customers that totaled 25.7 %, 18.1 %, 14.4 % and 11.6 % of total

accounts receivable.

As of December 31, 2025 , the accounts receivable balance included amounts

from two customers that totaled 57.0 % and 28.2 % of total accounts receivable.

June 30, 2026, the accounts receivable balance included amounts from two customers that represented 53.2 % and 27.3 % of total accounts

As of December 31, 2025, the accounts receivable balance includes amounts from two customers that represented 57.0 % and 28.2 %

of total accounts receivable.

concentration

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

During the three months ended March 31, 2026, three customers

exceeded 10 % of revenues, representing 27.2 %, 21.7 % and 17.3 % of revenues, and during the three months ended March 31, 2025, three customers

exceeded 10 % of revenues, representing 54.0 %, 18.4 % and 11.7 % of revenues

During the three months ended June 30, 2026, two

customers represented 50.9 %

of revenues, and during the six months ended June 30, 2026, three customers represented 39.4 %, 20.9 %,

the three months ended June 30, 2025, three customers represented 34.9 %, 21.0 % and 11.8 % of revenues, and during the six months ended

June 30, 2025, three customers represented 47.3 %, 21.3 % and 10.9 % of revenues.

REVENUE RECOGNITION

following table represents a disaggregation of revenue for the three months ended March 31, 2026 and 2025 (in thousands):

following table represents a disaggregation of revenue for the three and six months ended June 30, 2026, and 2025 (in thousands):

SCHEDULE OF DISAGGREGATION OF REVENUE

Point in time

Three months ended March 31, 2026

Three months ended June 30, 2026

Point in time

Three months ended March 31, 2025

Three months ended June 30, 2025

Point in time

Six months ended June 30, 2026

Point in time

REVENUE RECOGNITION (continued)

Point in time

Six months ended June 30, 2025

Point in time

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

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that manufacture aircraft engines.

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

The industrial end market consists of various end customers in diverse industries.

The research market

principally represents customers that are universities and other research institutions.

Company has unrecognized contract revenue of approximately $ 2.6 million at March 31, 2026, which it expects to substantially recognize

as revenue over time within the next eighteen months.

principally represents customers such as universities and other research institutions.

Company has unrecognized contract revenue of approximately $ 2.7 million at June 30, 2026 which it expects to substantially recognize

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

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

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

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

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

to estimate costs.

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

The Company recorded a cumulative catch up adjustment of $ 0.3 million to increase revenue during the three months ended March 31, 2026

as a result of a contract modification.

REVENUE RECOGNITION (continued)

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

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

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

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

assets and liabilities

assets and contract liabilities on input method type contracts in progress are summarized as follows as of March 31, 2026 (in thousands):

assets and contract liabilities on input method type contracts in progress are summarized as follows as of June 30, 2026 (in thousands):

SCHEDULE OF COST AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS

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liability in excess of contract assets

Included in accompanying condensed consolidated balance sheets

under the following captions (in thousands):

Included in accompanying condensed consolidated balance sheet as of June 30, 2026 under the following captions:

Contract assets

Contract liabilities

the contract liability balances at December 31, 2025 and 2024, $ 0.2 million and $ 1.3 million was recognized as revenue during the three

months ended March 31, 2026 and 2025, respectively.

the contract liability balances at December 31, 2025 and 2024, $ 0.3 million and $ 2.1 million was recognized as revenue during the six

months ended June 30, 2026 and 2025, respectively.

Contract assets and contract liabilities at December 31, 2024 were $ 2.1 million and

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SCHEDULE OF INVENTORIES, NET

June 30, 2026

December 31, 2025

Raw materials

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EARNINGS PER SHARE

calculation of basic and diluted weighted average common shares outstanding for the three months ended March 31, 2026 and 2025 is as

calculation of basic and diluted weighted average common shares outstanding for the three and six months ended June 30, 2026 and 2025

is as follows:

SCHEDULE OF BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

ended March 31,

Basic weighted average common shares

Dilutive effect of stock options

Dilutive effect of unvested restricted stock

Three months ended June 30,

Six months ended June 30,

Basic weighted average common shares outstanding

Dilutive effect of options and unvested restricted stock

Diluted weighted average shares outstanding

EARNINGS PER SHARE (continued)

As the result of the losses from

continuing operations for the three months ended March 31, 2026 and 2025, all stock options and unvested restricted stock were

excluded from the computation diluted per share amounts for the loss from continuing operations, income from discontinued operations

and net income (loss).

the three and six months ended June 30, 2026 and 2025, all stock options were excluded in the computation of diluted earnings per share

because their effect was antidilutive.

STOCK-BASED COMPENSATION EXPENSE

following table summarizes stock options awards for the three months ended March 31, 2026:

Company recorded stock-based compensation for the three and six months ended June 30, 2026 and 2025, respectively, that were included

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

SCHEDULE OF STOCK BASED COMPENSATION

Three months ended June 30,

Six months ended June 30,

Cost of revenue

Research and development

General and administrative

STOCK-BASED COMPENSATION EXPENSE (continued)

compensation related to discontinued operations were $ 0

for the three months ended June 30, 2026 and 2025, respectively, and $ 13,000

for the six months ended June 30, 2026 and 2025, respectively.

Stock-based compensation expense for three months ended June 30, 2026 and 2025 included

and $ 50,000 ,

respectively, and for the six month periods June 30, 2026 and 2025 included $ 100,000

and $ 100,000 ,

respectively, related to restricted stock awards that directors are entitled to receive pursuant to the Director Compensation Plan.

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

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

following table summarizes stock options awards through June 30, 2026:

OF STOCK OPTIONS AWARDS

Outstanding at January 1, 2026

Outstanding at March 31, 2026

following table summarizes information about the outstanding and exercisable options at March 31, 2026 by ranges of exercise prices:

Outstanding at June 30, 2026

following table summarizes information about the outstanding and exercisable options at June 30, 2026 by ranges of exercise prices:

SCHEDULE OF OUTSTANDING AND EXERCISABLE OPTIONS RANGES OF EXERCISE PRICES

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13.01 - 16.00

of March 31, 2026, there was $ 0.6 million of unrecognized compensation costs related to stock options expected to be recognized over

a weighted average period of 0.9 years.

STOCK-BASED COMPENSATION EXPENSE (continued)

Company recorded stock-based compensation expense for the three months ended March 31, 2026 and 2025, respectively, that were included

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

SCHEDULE OF STOCK BASED COMPENSATION

ended March 31,

Cost of revenue

Research and development

General and administrative

related to discontinued operations were $ 12,000 and $ 15,000 for the three months ended March 31, 2026 and 2025, respectively.

compensation expense included $ 50,000

for both three months ended March 31,

2026 and 2025, related to restricted stock awards that directors elected to receive pursuant to

the Director Compensation plan.

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

amount of $ 40,000 ,

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

of March 31, 2026 and December 31, 2025, the Company has provided a full valuation allowance against its net deferred tax assets.

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

deferred tax assets may not be realized in the future.

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

net deferred tax assets, which have been fully reserved for, on a quarterly basis, reviewing our economic models, including projections

of future operating results.

of June 30, 2026, there was $ 0.4 million of unrecognized compensation costs related to stock options expected to be recognized over a

weighted average period of 0.7 years.

the three and six months ended June 30, 2026, the Company recorded income tax expense of $ 0.7 million that was related to the gain on

the divestiture of SDC.

As of June 30, 2026 and December 31, 2025, the Company has provided a full valuation allowance against its net

deferred tax asset.

This was based on management’s assessment, including the last four years of operating losses, that it is more

likely than not that the net deferred tax asset may not be realized in the future.

Management continues to evaluate for potential utilization

of the Company’s net deferred tax asset, which has been fully reserved for, on a quarterly basis, reviewing our economic models,

including projections of future operating results.

SEGMENT REPORTING

the sale of the Company’s SDC business in 2026 and the cessation of its MesoScribe business in 2024, the Company has one reportable

segment consisting of its CVD Equipment division that manufactures chemical vapor deposition, physical vapor transport, thermal process and related equipment.

segment consisting of its CVD Equipment division that manufactures chemical vapor deposition, physical vapor transport, thermal process

and related equipment.

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

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

The CODM considers budget-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.

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

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Consolidated total revenue

Six months ended

United States

North America, excluding US

Europe, Middle East and Africa

Consolidated total revenue

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

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

What changed 10-Q

Item 1. Financial Statements