CPSH 10-K & 10-Q changes, risk factors and insider trading
Cps Technologies Corp. · Nasdaq · Pottery & Related Products · CIK 814676 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “The Company’s reliance on aging equipment and capital-intensive processes may require significant ongoing investment and expose it to operational and financial risks.”
New heading “We are considering moving to a larger facility, and the relocation and transition process could be costly, disruptive to our operations, and may adversely affect our ability to manufacture products and achieve expected financial and operational benefits, which could hurt our short-term and long-term results.”
New heading “Fluctuations in the prices and availability of raw materials may adversely affect margins, operating results, and cash flows.”
New heading “We operate in highly competitive markets, have fewer resources than some competitors, and may be subject to future import duties that could adversely affect our business.”
New heading “Our investments in proprietary technologies may lose value if we are unable to adequately protect our intellectual property or if we are accused of infringing the intellectual property rights of third parties, which could result in costly litigation.”
New heading “Claims related to product defects, safety, or performance could result in significant costs, reputational harm, and operational disruption.”
New heading “Compliance with U.S. government requirements for handling controlled unclassified information (CUI) could increase CPS’s operating costs.”
Removed heading “We face significant competition, are relatively small in size and have fewer resources in comparison with some of our competitors.”
Removed heading “Continued growth could result in the need to move or expand our facilities. The costs of such a move or expansion could be significant to our profitability.”
Removed heading “We have made investments in our proprietary technologies. If third parties violate our proprietary rights, or accuse us of infringing upon their proprietary rights, such events could result in a loss of value of some of our intellectual property or costly litigation.”
Largest changes
“We may be subject to product liability, warranty, or recall claims arising from alleged defects, failures to meet specifications, or misuse of its products. Even if products are designed and manufactured in compliance with applicable standards, defects may occur due to design flaws, manufacturing errors, supplier issues, or unforeseen usage conditions. Such claims could lead to litigation, settlements, fines, penalties, or the costs of product recalls and corrective actions.”see in full comparison
“Broad-based business, economic disruptions or global health concerns could adversely affect our business and the sale of our products. For example, in December 2019 an outbreak of a novel strain of the coronavirus disease (COVID-19) originated in Wuhan, China, and spread to a number of other countries, including the United States. Initially, this outbreak resulted in extended shutdowns of certain businesses in the Wuhan region and had ripple effects to businesses around the world. …”see in full comparison
“We have made investments in our proprietary technologies. If third parties violate our proprietary rights, or accuse us of infringing upon their proprietary rights, such events could result in a loss of value of some of our intellectual property or costly litigation.”see in full comparison
“Our investments in proprietary technologies may lose value if we are unable to adequately protect our intellectual property or if we are accused of infringing the intellectual property rights of third parties, which could result in costly litigation.”see in full comparison
“In addition, ongoing geopolitical conflicts, such as the Russia‑Ukraine war and tensions in the Middle East, continue to contribute to uncertainty in global markets, supply chains, and trade flows, even for companies without substantial direct exposure to the affected regions.”see in full comparison
“We face significant competition, are relatively small in size and have fewer resources in comparison with some of our competitors.”see in full comparison
Full comparison: every changed paragraph (76)
An investment in our common stock involves significant risks. The following risk factors should be read together with the other information included in this report, including our financial statements and related notes. The risks described below may not be the only risks that we face. Additional risks and uncertainties that we are unaware of, or that we currently consider immaterial, may also become important factors that could adversely affect our business, financial condition, results of operations, liquidity, or future prospects. Many of these risks are beyond our control and could materially and adversely impact our business, financial condition, operating results, cash flow, and stock price.
The risks set forth below may not be the only risk factors relating to the Company. Any of these factors, many of which are beyond our control, could materially adversely affect our business, financial condition, operating results, cash flow and stock price.
We have a highly concentratedOur customer base sois thathighly concentrated, and any significant changes in ordering patterns, delaysdelays, or order cancellations could havematerially aand materialadversely adverse effect onaffect our business and results of operations.
In 2025, three customers accounted for approximately 64% of our revenue, compared to 58% in 2024. While we maintain positive relationships with these customers, which we believe may support ongoing business sustainability, the loss of any large customer could be difficult to replace. Our inability to replace significant customer business may have a material adverse effect on our financial condition and results of operations.
Three customers accounted for 58% of revenue in 2024 and 60% of revenue in 2023. We believe that our relationships with these customers are positive and may provide us with ongoing continuous sustainability for years to come. However, a large customer, if lost, would be difficult to replace, and our inability to do so may have a material adverse effect on our business and financial condition. We expect that orders from a relatively limitedsmall number of customers will continue to account for a substantial portion of our business. The mixcomposition of our customer base and typethe volume of customers, and sales to any single customer,customer may vary significantly from quarter to quarter and from year to year. If any of our significant customers do not place orders, or they substantially reduce, delaydelay, or cancel orders, we may not be able to replace the lost business in a timely manner or at all, whichpotentially canmaterially have a material adverse effect onaffecting our results of operations and financial condition.results. MajorAdditionally, major customers may also seek, and on occasionoccasionally receive, pricing, paymentpayment, or other commercial terms that are less favorable to usus, andwhich cancould hurtnegatively impact our competitive position.position and profitability.
Our lengthy and variable sales cycle makes it difficult to predictaccurately ourforecast financial results.
The sales cycle for our products is often lengthy,prolonged, ranging from several months to several years. Prospective customers typically conduct extensive evaluations of our products relative to their existing solutions. In many cases potentialcases, customers must evaluate the properties of our product against their current solution. In many cases potential customers mustalso redesign other components of thetheir end product they are makingproducts to fully realize the full benefits of usingour offerings. As a result, the extended sales cycle makes it difficult to predict the timing and volume of sales and increases the risk that customers may delay or cancel the launch of their end products, which could adversely affect demand for our products. The lengthy sales cycle makes forecasting the volume and timing of sales difficult and raises additional risks that customers may cancel or delay introduction of their end-products into the marketplace, thus affecting our demand. The lengthduration of the sales cycle dependsvaries based on the size and complexity of the project,project and the depthlevel of the evaluation of our products conductedrequired by the customers.customer.
Because a significant portion of our operating expenses is fixed, we may incur substantial expense before we earn associated revenue. If customer cancellations occur, they could result in the loss of anticipated sales without allowing us sufficient time to reduce our operating expenses.
Fluctuations in foreign exchange rates cancould negatively impactaffect our ability to competecompetitiveness against foreign basedforeign-based competitors.
Several of our major competitors are located outside of the United States. TheChanges relativein strengththe value of the U.S. dollar comparedrelative to suchthese competitors’ respective local currencies makescan make our products more expensive to ourfor customers relativecompared to ourcompeting competitors’products. prices. Such circumstances could result in a reduction in product pricing (and profitability) in order toTo maintain or grow our currentbusiness, levelswe ofmay business.need to reduce product pricing, which could negatively impact profitability. If we are unable or unwilling to reduceadjust pricingprices of our products to the level necessary to maintain current business levels,sufficiently, we could seeexperience an overalla reduction in overall revenue.
OurWe dependencerely on outside vendors tofor perform particularcertain steps in our manufacturing processprocess, couldand negativelyany impact us should those vendors be unableinability or unwillingunwillingness of these vendors to provide such serviceservices at a reasonable cost.cost could negatively affect our business.
SeveralSome of our major customers require that we use only customer-approved vendors approved by them for certainspecific manufacturing steps, typically plating, of our manufacturing process before the finished product can be shipped to the customer and recognizedrevenue as revenue.recognized. In somecertain casescases, these vendors are solesole-sourced, sourced,meaning i.e.,only one vendor is the only vendor approved for that process. If thata sole-sourced vendor raises their price to us,prices, we may not be ableunable to pass thatthe increase on to our customer, erodingwhich would erode our margins. IfEven if we are able tocan pass along thesethe increases,increase, thathigher costs could negatively impact ourreduce sales volumes if ourthe customer shifts some of their purchases to alower-priced lowercompetitors. pricedAdditionally, competitor. Ifif a sole sourcedsole-sourced vendor cannot process our products quickly enough to meet customer demand, or is unable to process our product fast enough to meet our customer’s demand, or if they do not process our productthem at all, our expected revenue could be negativelyadversely affectedimpacted, despiteeven ourif abilitywe tohave producesufficient enoughinternal toproduction meet that demand.capacity.
Our success isdepends highly dependentheavily on managerialthe contributions of key individualsexecutives and employees, and we may be unable to retain these individualsthem or recruit others.suitable replacements.
We rely on senior executives, key managers, and specialized personnel in engineering, research and development, sales, marketing, and manufacturing who are critical to our business. Although some executives have employment agreements, none prevent them from leaving the Company. Larger competitors may offer more attractive compensation, creating a risk of losing key personnel. Losing such individuals, or failing to attract and train qualified employees, could negatively impact our engineering, product development, manufacturing, and sales efforts.
WeOur dependMMC onbusiness ouris seniorniche, executiveswith few competitors located within the U.S., making it essential to develop key engineering and certainproduction keytalent managersinternally. asExperienced wellemployees ascan engineering,be research and development, sales, marketing and manufacturing personnel, who are criticaldifficult to ourreplace, business. While we have employment agreements with certain executives, none of these agreements would prevent any such person from leaving the Company. Furthermore, larger competitors may be able to offer more generous compensation packages to our executives and key employees, and therefore we risk losing key personnel to those competitors. If we were to lose the services of any of our key personnel, or if we fail to attract and train qualified personnel, our engineering, product development, manufacturing and sales efforts could be slowed. In particular, we have, from time to time, experienced difficulty in hiring and retainingparticularly skilled engineers with appropriatethe qualifications necessary to support our growth strategy. Our success depends on our ability to identify, hire, traintrain, and retain qualified engineering personnel.personnel, Specifically, we need to continue to attract and retainincluding product development, materialsmaterials, and manufacturing engineers towho work with our direct sales force to technically qualify and perform on new salesopportunities, opportunities andexecute orders, and to demonstrate our products.
WeAdditionally, losing key personnel may also incur increasedincrease operating expenses and be required to divert the attention of ourrequire senior executives to searchfocus foron replacements.recruiting, Thewhile the integration of any new personnel could temporarily disrupt our ongoing operations.
The Company’s reliance on aging equipment and capital-intensive processes may require significant ongoing investment and expose it to operational and financial risks.
The Company’s operations depend on specialized equipment and facilities, some of which may be aging or nearing the end of their useful lives. As equipment ages, the risk of breakdowns, unplanned downtime, safety incidents, and reduced efficiency increases, which could disrupt operations and result in higher maintenance and repair costs.
Maintaining and upgrading equipment and facilities can require substantial capital expenditures. We may need to make significant investments to modernize operations, comply with regulatory or environmental requirements, or remain competitive. If we are unable to fund these investments through cash flows, financing, or other sources on acceptable terms, our operational performance and long-term growth prospects could be adversely affected.
We are considering moving to a larger facility, and the relocation and transition process could be costly, disruptive to our operations, and may adversely affect our ability to manufacture products and achieve expected financial and operational benefits, which could hurt our short-term and long-term results.
We are considering a move to a larger facility near our current location in order to support anticipated growth and improve our operational capabilities. The actual costs associated with the relocation may exceed our estimates. These costs may include build-out expenses, equipment relocation, infrastructure upgrades, and other unanticipated expenditures, any of which could place additional strain on our financial resources and adversely affect our results of operations.
The relocation process could disrupt our manufacturing operations and business activities. During the transition period, we may experience temporary reductions in production capacity, inefficiencies, delays in order fulfillment, quality issues, or increased scrap and rework as equipment is moved, installed, calibrated, and validated. We may also be required to demonstrate to customers that we can successfully manufacture products at the new facility. Any delays or difficulties in qualifying the new facility or manufacturing processes could negatively impact customer confidence or result in lost or delayed orders.
In addition, the anticipated benefits of the larger facility may not be realized on the timeline we expect, or at all. If the revenue growth or demand levels that underlie the need for a larger facility do not materialize, we could be left with higher fixed operating costs and reduced operating margins without a corresponding increase in revenue. The move could also divert management’s attention and resources from other strategic or operational priorities.
Any of these factors, individually or in combination, could materially and adversely affect our business, financial condition, results of operations, and cash flows, particularly in the periods immediately following the relocation.
Fluctuations in the prices and availability of raw materials may adversely affect margins, operating results, and cash flows.
We rely on various raw materials and components whose prices may be subject to volatility due to market conditions, geopolitical events, supply disruptions, and broader macroeconomic factors. Significant or sustained increases in raw material costs could increase production expenses and negatively impact profitability, particularly if we are unable to pass these increased costs on to customers through pricing adjustments.
Additionally, shortages or delays in the supply of critical raw materials could disrupt production schedules and increase lead times. Efforts to mitigate these risks, such as long-term supply agreements or the sourcing of alternative materials, may not be fully effective or may introduce additional costs and complexities.
Business orBroad economic disruptions or global health concerns could seriouslymaterially harm our business.
Widespread economic instability and global health events can adversely affect demand for our products and our overall operations. For example, the COVID‑19 pandemic significantly disrupted businesses worldwide, and the possibility of future resurgences of COVID‑19 or similar health crises remains a risk that could slow economic activity and disrupt supply chains.
In addition, ongoing geopolitical conflicts, such as the Russia‑Ukraine war and tensions in the Middle East, continue to contribute to uncertainty in global markets, supply chains, and trade flows, even for companies without substantial direct exposure to the affected regions.
We cannot predict the duration, severity, or full effects of future economic, health, or geopolitical events. Extended shutdowns or disruptions affecting our operations, or those of our customers, suppliers, or other third parties on whom we rely, could materially and adversely affect our business, financial condition, and operating results.
Broad-based business, economic disruptions or global health concerns could adversely affect our business and the sale of our products. For example, in December 2019 an outbreak of a novel strain of the coronavirus disease (COVID-19) originated in Wuhan, China, and spread to a number of other countries, including the United States. Initially, this outbreak resulted in extended shutdowns of certain businesses in the Wuhan region and had ripple effects to businesses around the world. While the impact of this pandemic has largely subsided, a resurgence of this virus or another could have an impact on our business. Although the Company remained open throughout the COVID-19 pandemic, complete or partial government shutdowns of many businesses, schools, bars and restaurants did occur. The Russian invasion of Ukraine and the conflict in Israel and Gaza could also adversely affect our business in spite of the immaterial amount of direct business we have done in these regions in the past. We cannot presently predict the scope and severity of any future business shutdowns or disruptions to us, but if we or any of the third parties with whom we engage, including our customers, suppliers and other third parties, were to experience extended shutdowns or other business disruptions, our ability to conduct our business could be materially and negatively impacted, and could have a material adverse effect on our business and our results of operation and financial condition.
Changes in trade policy could seriouslymaterially impactaffect our business.
MostSome of our raw materials are domestically sourced by CPS. However, some of those raw materials may originate in countriesfrom other thancountries. the United States. ShouldIf tariffs beare imposed on any of these countries of origin,materials, our vendorssuppliers would likelymay increase theirprices, pricewhich to us to cover the cost of these tariffs. Wewe may not be able to pass these cost increases on to our customers inquickly, apotentially timely manner, therefore erodingreducing our profit margins. AAdditionally, a significant portion of our businessproducts isare exportedexported. toIf customers outside the United States. Should theirforeign countries impose tariffs on USU.S. goods, including ours, we could find ourselves atface a competitive disadvantage incompared relationwith to our competitors, some of whom arecompanies located outside the United States.States, which could adversely impact our business and financial results.
Acquisitions can result in anmay increase in our operating costs, divert management’s attention away from other operational matterspriorities, and expose us to other associatedadditional risks.
FromWe time to time, weperiodically evaluate potential acquisitions of businesses andor technologies,technologies and we considerview targeted acquisitions that expand our core competencies to beas an important part of our future growth strategy. We expect that anyWhile acquisitions ofmay otheroffer businessessynergies will have synergisticin products, servicesservices, and technologies.technologies, they involve risks, including:
These risks could materially and adversely affect our business, financial condition, and results of operations.
Acquisitions involve numerous risks, which include but are not limited to:
TheMarket conditions ofin the marketsindustries in which we operate are volatile.volatile, Theand the demand for our products and thetheir profitability of our products can changefluctuate significantly from period to period as a result of numerous factors.significantly.
The industries in which we operateserve are characterizedsubject to constant change, driven by ongoingfactors changes,such includingas:
As a result, our historical operating results may not be indicative of future performance, and periods of lower demand or profitability could materially affect our business.
For these and other reasons, our results of operations for past periods may not necessarily be indicative of future operating results.
Volatile and cyclical demand for our products may make it difficult for us to accurately budget our expense levels,expenses, which are partially based in part on our projections of futureprojected revenues.
Demand for our products can fluctuate significantly due to cyclical industry trends. When revenue falls below expectations, our operating results may be materially affected, and cost reduction measures may be required to maintain competitiveness and financial stability. Conversely, periods of rapid growth may require us to expand manufacturing capacity and hire additional personnel, which could strain liquidity. There is no assurance that we can adjust our cost structure or scale operations quickly enough to respond effectively to these market cycles.
When cyclical fluctuations result in lower-than-expected revenue levels, operating results may be materially adversely affected, and cost reduction measures may be necessary for us to remain competitive and financially sound. During a down cycle, we must be able to make timely adjustments to our cost and expense structure to correspond to the prevailing market conditions. In addition, during periods of rapid growth, we must be able to increase manufacturing capacity and the number of our personnel to meet customer demand, which may require additional liquidity. We can provide no assurance that these objectives can be met in a timely manner in response to changes within the industry cycles in which we operate. If we fail to respond to these cyclical changes, our business could be seriously harmed.
We generally do not typically have long-term volume production contracts with our customers,customers and we do notcannot control the timingtiming, volume, or volumemix of their orders. Lower-than-expected orders placedcan by our customers. Whether andlead to what extent our customers place orders for any specific products, and the mix and quantities of products included in those orders are factors beyond our control. Insufficient orders would result in under-utilization of our manufacturingunderutilized facilities and infrastructureinfrastructure, andwhich willwould negatively affect our financial position and results of operations.
We operate in highly competitive markets, have fewer resources than some competitors, and may be subject to future import duties that could adversely affect our business.
We operate in highly competitive global markets, and some competitors have significantly greater financial and operational resources. These competitors may be able to develop more advanced products or reduce prices, which could place us at a competitive disadvantage. If we are unable to compete effectively, our business and results of operations could be adversely affected.
In addition, our MMC products are currently exported into the European Union (EU) on a duty-free basis. If a European manufacturer begins producing similar products, import duties could be imposed, increasing costs for our EU customers and potentially reducing demand for our products.
We face significant competition, are relatively small in size and have fewer resources in comparison with some of our competitors.
We face significant competition throughout the world, which may increase as certain markets in which we operate continue to evolve. Our future performance depends, in part, upon our ability to continue to compete successfully worldwide. Some of our competitors are diversified companies that have substantially greater financial resources and more extensive research, engineering, manufacturing, marketing and customer service and support capabilities than we can provide. Our failure to compete successfully with these other companies would seriously harm our business. There is a risk that larger, better financed competitors will develop and market more advanced products than those we currently offer, or that competitors with greater financial resources may decrease prices, thereby putting us under financial pressure.
We may experienceface increasing price pressure.pressure, which could adversely affect our margins.
OurHistorically, historical businessour strategy for many of our products has focused onemphasized product performance and customer service rather than competing primarily on offering the lowest price. As a result of budgetary constraints,However, many of our customers are extremelyhighly price sensitivesensitive, when purchasing our products. Recentand inflationary trendspressures couldmay further exacerbateintensify thispricing issue.competition. If we are unable to obtain prices that allow us to continue todifferentiating competeour products based on the basis of product performance and customer service, ourwe may be required to reduce prices to remain competitive, which could result in lower profit margins willand beadversely reduced.affect our financial results.
Manufacturing interruptions or delays could affectimpair our ability to meet customer demand and leadincrease to higheroperating costs.
WeOur manufacturing operations may experiencebe significant interruptions of our manufacturing operations, delays in our abilitysubject to deliverinterruptions, products or services,delays, increased costscosts, or customer order cancellations asdue to a resultvariety of factors, including:
Any of these events could disrupt our operations, delay product deliveries, increase costs, or harm customer relationships, which could materially and adversely affect our business, financial condition, and results of operations.
Our investments in proprietary technologies may lose value if we are unable to adequately protect our intellectual property or if we are accused of infringing the intellectual property rights of third parties, which could result in costly litigation.
Our success depends in part on our proprietary technologies and related intellectual property rights. We use a combination of patents, trademarks, confidentiality agreements, and internal controls to protect our intellectual property; however, these measures may be inadequate or unenforceable. Patent protection is costly and time-consuming, and there is no assurance that our patent applications will result in issued patents or provide meaningful protection. In addition, competitors or other third parties may develop similar or superior technologies or design around our intellectual property.
We may also face claims that our products or technologies infringe the intellectual property rights of others. Resolving such claims may require us to obtain licenses, modify our products, or defend ourselves through litigation, any of which could be expensive, disruptive, and unsuccessful. The laws of certain jurisdictions may offer less protection than those in the United States. Any failure to protect our intellectual property or adverse outcome of an infringement claim could materially and adversely affect our business, financial condition, and results of operations.
Continued growth could result in the need to move or expand our facilities. The costs of such a move or expansion could be significant to our profitability.
Management's Discussion & Analysis (MD&A)
Largest changes
“Total revenue was $32.6 million in 2025, a 54% increase compared with total revenue of $21.1 million in 2024. This increase was primarily due to significant growth in our core business. At the end of August 2024 the Company added a third production shift enabling it to meet this growth. Additionally, a significant portion of our 2024 production efforts went towards the manufacture and testing of parts needed to solve a quality issue with a major customer. Upon resolution in later 2024, this production capacity was again available to make products for sale to customers. …”see in full comparison
Gross profit insee in full comparison20242025 totaled$(0.1)$5.3 million or(1)%16% of sales. This compares with$6.8$(0.1) million, or25%(1)% of sales,generatedinduring 2023.2024. Thedecreaseincrease in margin was primarily due to the impact of thecompletionincreasedofrevenuethe armor contractas described above. As CPS incurs significant fixed costs in its operations,aanreductionincrease in revenue has a significant impact on margin.InAaddition,mitigatingthenfactorgrowthin this increased margin was the impact ofAlSiCrisingbaseplategoldsalesprices. The methodologies inQ4 of 2024 requiredrecovering thehiringincreasedandgoldtrainingcostsofcannewvaryemployeesbyascustomer,wellbutasgenerallythespeakingincurringweofdoadditionalnotexpensesgenerateforathe ramp up of production. A new employee is trained for 2-3 weeks before even beginning their actual workprofit onthetheseshopgoldfloor.costItrecoverycanchargesthenwhichtakereducedaprofitfewmarginmonthsbybeforeaboutthey are fully up to speed.1%.
“The Company’s cash and cash equivalents at December 27, 2025 totaled $4.5, no restricted cash and marketable debt securities with a fair value of $8.8 compared with cash and cash equivalents at December 28, 2024 of $3.3, restricted cash of $85 thousand and marketable debt securities with a fair value of $1.0. This increase was primarily due to the Company’s equity raise partially offset by increases in accounts receivable and inventory needed to support increased revenue. On October 8, 2025 the Company closed an equity raise underwritten by Roth Capital Partners (“Roth”). …”see in full comparison
“Revenues totaled $8.2 million in the fourth quarter of 2025 versus $5.9 million in the fourth quarter of 2024, an increase of 38%. This increase was primarily due to significant growth in our core business. In Q4 of 2024, our third shift was just getting started. Our third shift folks had not yet reached their full level of proficiency resulting in lower production as compared to a fully experienced group. Secondarily, gold represents a significant cost in our hermetic package products. The price of gold increased significantly during the fourth quarter of 2025 over it’s price in 2024. …”see in full comparison
The Company generated operating income of $0.4 million in 2025, compared with an operating loss of $4.4see in full comparisonmillionin2024, compared with operating income of $1.7 in 2023.2024. Thisdecreaseincrease was due almost entirely to thereductionincrease inrevenue and additional expenses due to end of year sales growth,revenue, discussed above. The Company recorded net income of $0.4M in 2025 compared to a net loss of$3.1M$3.1 million in2024 compared to net income of $1.4M in 2023.2024. In20242025 the Company recordedana provision for income taxes of $0.3 million compared to a tax benefit of $1.0 millioncompared to a provision for income taxes $0.6 millionin2023.2024.
see in full comparisonAccountsTrade accounts receivable at December28,27,20242025 totaled$4.9$5.2 compared to$4.4$4.9 at December30,28,2023.2024. Days Sales Outstanding (DSO)increaseddecreased to 61 days at the end of 2025 compared to 75 days at the end of2024 compared to 60 days at the end of 2023.2024. This change was due tocontinuedhigher sales growthof salesthroughout the 4thquarter.quarterThisofresulted2024 as compared to Q3 2024 versus a decline incollections on the earlier lower sales, while the higher latersalesremainedfrominQ3receivables.2025 to Q4 2025. The accounts receivable balances at December28,27,2024,2025, and December30,28,20232024 were both net of an allowance for credit losses of $10 thousand.
Full comparison: every changed paragraph (29)
The Company’s products contribute to the electrification of the green economy. The products we provide include baseplates for motor controllers used in high-speed electric trains, subway cars, wind turbines, and hybrid and electric vehicles.vehicles and the transmission of High Voltage Direct Current (HVDC). We provide hermetic packages used in radar, satellite and avionics applications. We provide lids and heat spreaders used with high performance integrated circuits in internet switches and routers. We provide armor for naval and other military applications.
The Company believes the underlying demand for metal matrix compositesMMCs is growing as the electronics and other industries seek higher performance, higher reliability, and reduced costs. CPS believes that the Company is well positioned to offer our solutions to current and new customers as these demands grow. In 20242025 the Company’s top three customers accounted for 57%64% of revenue and the remaining 43%36% of revenue was derived from 45approximately 43 other customers. In 20232024 the top three customers accounted for 60%58% of revenue and the remaining 40%42% of revenue was derived from approximately 5745 customers.
Financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. As such, the Company is required to make certain estimates, judgments and assumptions that it believes are reasonable based upon the information available. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. CPS’sCPS’ significant accounting policies are presented within Note 2 to the financial statements; the significant accounting policies which management believes are most critical to aid in fully understanding and evaluating its reported financial results include the following:
In determining inventory cost, the Company uses the first-in, first-out method and states inventory at the lower of cost or net realizable value. Virtually, all of the Company’s inventory is customer specific; as a result, if a customer’s order is cancelled, it is unlikely that CPS would be able to sell that inventory to another customer. Likewise, if the Company chooses to manufacture product in advance of anticipated purchase orders and those orders do not materialize, it is unlikely that it would be able to sell that inventory to another customer. The value of CPS’sCPS’ work in process and finished goods is based on the assumption that specific customers will take delivery of specific items of inventory. Raw materials are less unique to specific products. AlSiC raw materials are used for all AlSiC parts and therefore they are continuously in production. Hermetic package and armor raw materials present a mix of raw material items, some of which are used in multiple parts and others in only specific parts. These raw material items are evaluated using the same criteria as the finished goods into which they go and are reserved against when there has been no activity for that finished good in the prior 12 months or expectation of future activity. The Company has not experienced significant losses to date as a result of customer cancellations and has not established a reserve for such cancellations.
The Company typically buys ‘lots’ of components for its hermetic packaging products. Often all the components in a lot are not necessary to complete the order. Annually the companyCompany reviews this unused material and establishes an obsolescencea reserve for the amount it has not used in the prior 12 months and does not expecthave toan useexpectation overof thefuture next three years.activity.
At December 28,27, 2024,2025, the Company’s deferred tax asset and other temporary differences will require taxable income of approximately $12$8.3 million and reversals of existing temporary differences to fully utilize the deferred tax asset, assuming a statutory corporate tax rate of 21%.21% and 6.32% for federal and state taxes respectively.
Results of Operations (all $ in$in millions unless noted)
Total revenue was $32.6 million in 2025, a 54% increase compared with total revenue of $21.1 million in 2024. This increase was primarily due to significant growth in our core business. At the end of August 2024 the Company added a third production shift enabling it to meet this growth. Additionally, a significant portion of our 2024 production efforts went towards the manufacture and testing of parts needed to solve a quality issue with a major customer. Upon resolution in later 2024, this production capacity was again available to make products for sale to customers. Lastly, gold represents a significant cost in our hermetic package products. The price of gold increased significantly especially during the second half of 2025 over it’s price in 2024. The price of gold accounted for $1.9 million of total revenue in 2025 as compared to $0.5 million in 2024.
Total revenue was $21.1 million in 2024, a 24% decrease compared with total revenue of $27.6 million in 2023. This decrease was due primarily to the successful completion of the armor contract in April 2024 compared to a full year of revenue from armor production in 2023, partially offset by increased revenue from AlSiC baseplates.
Gross profit in 20242025 totaled $(0.1)$5.3 million or (1)%16% of sales. This compares with $6.8$(0.1) million, or 25%(1)% of sales, generatedin during 2023.2024. The decreaseincrease in margin was primarily due to the impact of the completionincreased ofrevenue the armor contractas described above. As CPS incurs significant fixed costs in its operations, aan reductionincrease in revenue has a significant impact on margin. InA addition,mitigating thenfactor growthin this increased margin was the impact of AlSiCrising baseplategold salesprices. The methodologies in Q4 of 2024 requiredrecovering the hiringincreased andgold trainingcosts ofcan newvary employeesby ascustomer, wellbut asgenerally thespeaking incurringwe ofdo additionalnot expensesgenerate fora the ramp up of production. A new employee is trained for 2-3 weeks before even beginning their actual workprofit on thethese shopgold floor.cost Itrecovery cancharges thenwhich takereduced aprofit fewmargin monthsby beforeabout they are fully up to speed.1%.
Selling, general and administrative (SG&A) expenses were $4.3$4.8 million during 2024,2025, downup from SG&A expenses of $5.1$4.3 million incurred during 2023.2024. This decreaseincrease was primarily due to athe reductionincrease in variable compensation expense, due to the reductionincrease in revenue and profit year over year,year. asIn welladdition, asthe increased revenue generated a reductionsignificant increase in salariesour paidsales forcommission selling and administrative personnel.expense.
The Company generated operating income of $0.4 million in 2025, compared with an operating loss of $4.4 million in 2024, compared with operating income of $1.7 in 2023.2024. This decreaseincrease was due almost entirely to the reductionincrease in revenue and additional expenses due to end of year sales growth,revenue, discussed above. The Company recorded net income of $0.4M in 2025 compared to a net loss of $3.1M$3.1 million in 2024 compared to net income of $1.4M in 2023.2024. In 20242025 the Company recorded ana provision for income taxes of $0.3 million compared to a tax benefit of $1.0 million compared to a provision for income taxes $0.6 million in 2023.2024.
Revenues totaled $8.2 million in the fourth quarter of 2025 versus $5.9 million in the fourth quarter of 2024, an increase of 38%. This increase was primarily due to significant growth in our core business. In Q4 of 2024, our third shift was just getting started. Our third shift folks had not yet reached their full level of proficiency resulting in lower production as compared to a fully experienced group. Secondarily, gold represents a significant cost in our hermetic package products. The price of gold increased significantly during the fourth quarter of 2025 over it’s price in 2024. The price of gold increased our total revenue by $1.0 million in Q4 2025 as compared to $0.2 million in Q4 2024.
Revenues totaled $5.9 million in the fourth quarter of 2024 versus $6.7 million in the fourth quarter of 2023, a decrease of 12%. This decrease was the result of the completion of our armor contract earlier in 2024, partially offset by an increase in AlSiC baseplate sales.
Gross marginprofit decreasedincreased in the fourth quarter of 20242025 compared with the fourth quarter of 20232024 to $1.2 million from $(0.3) million from $1.1 million. This decreaseincrease was due to lowerhigher revenue asand wellits asfavorable theimpact costson associatedfixed withcosts. theIn productionaddition, rampour upthird describedshift above.was added in late Q3 2024. Its expected operational efficiencies had not yet been achieved in Q4 of 2024.
SG&A expenses totaled $1.3 million during the quarter, compared to $1.0 million in the same quarter of 2024. This increase was primarily due to the increase in variable compensation expense, due to the increase in revenue and profit year over year. In addition, the increased revenue generated a significant increase in our sales commission expense.
SG&A expenses totaled $1.0 million during the quarter, compared to $1.0 million in the same quarter of 2023.
The Company recorded an operating loss of $0.1 million in the fourth quarter of 2025 compared to an operating loss of $1.3 million in the fourth quarter of 2024 compared to operating income of $0.1 million in the fourth quarter of 2023.2024.
The Company recorded net income of $0.0 million in the fourth quarter of 2025 compared to a net loss of $1.0 million in the fourth quarter of 2024 compared to net income of $0.1 million in the fourth quarter of 2023.2024.
Liquidity and Capital Resources (all $ in$in millions unless noted)
The Company’s cash and cash equivalents at December 27, 2025 totaled $4.5, no restricted cash and marketable debt securities with a fair value of $8.8 compared with cash and cash equivalents at December 28, 2024 of $3.3, restricted cash of $85 thousand and marketable debt securities with a fair value of $1.0. This increase was primarily due to the Company’s equity raise partially offset by increases in accounts receivable and inventory needed to support increased revenue. On October 8, 2025 the Company closed an equity raise underwritten by Roth Capital Partners (“Roth”). Roth acquired 3,450,000 shares of the Company’s common stock at a price of $3.00 per share. The net proceeds to the Company were $9,540,025.
The Company’s cash and cash equivalents at December 28, 2024 totaled $3.3, restricted cash of $85 thousand and marketable debt securities with a fair value of $1.0. compared with cash and cash equivalents at December 30, 2023 of $8.8 and no restricted cash or marketable debt securities. This decrease was primarily due to the Company’s losses for the year as well as the increase in receivables of $0.6.
AccountsTrade accounts receivable at December 28,27, 20242025 totaled $4.9$5.2 compared to $4.4$4.9 at December 30,28, 2023.2024. Days Sales Outstanding (DSO) increaseddecreased to 61 days at the end of 2025 compared to 75 days at the end of 2024 compared to 60 days at the end of 2023.2024. This change was due to continuedhigher sales growth of sales throughout the 4th quarter.quarter Thisof resulted2024 as compared to Q3 2024 versus a decline in collections on the earlier lower sales, while the higher later sales remainedfrom inQ3 receivables.2025 to Q4 2025. The accounts receivable balances at December 28,27, 2024,2025, and December 30,28, 20232024 were both net of an allowance for credit losses of $10 thousand.
Inventories decreasedincreased to $5.6 at December 27, 2025 from $4.3 at December 28, 20242024. This increase was almost entirely the result of an increase in work in process (WIP). CPS ships parts to platers in Europe where the parts are plated prior to shipment to the customer. In order to meet the significantly increased demand from $4.6these customers, parts at Decemberthe 30,platers, 2023.which are part of WIP, have increased significantly from 2024 to 2025. The inventory turnover in the four quarters ending 20242025 was 4.85.4 times, up from 4.34.8 times averaged during the four quarters of 20232024 (each based on a 5 point average).
In May 2023 a line of credit (LOC) in the amount of $3.0 million was entered into with Rockland Trust Company. The LOC is secured by the accounts receivable and other assets of the Company and has an interest rate of the National Prime Rate as published by the Wall Street Journal. On December 28,27, 2024,2025, the Company had $0 of borrowings under this LOC and its borrowing base at the time would have permitted an additional $3.0 million to have been borrowed. The LOC was renewed in August 2025 and remains in effect until terminated which can be done by either party.
In March 2020, the Company acquired a scanning acoustic microscope for a price of $208 thousand. The full amount was financed through a 5 year note payable with a financing company. The note is collateralized by the microscope and is being paid in monthly installments of $4 thousand, consisting of principal plus interest at a rate of 6.47%.
As of December 28,27, 2024,2025, the Company had $109$460 thousand of construction in progress and no material outstanding commitments to purchase production equipment.
During 2024,2025, our leasing arrangements consisted of the Norton, MA facility lease. The Norton facility lease was renewed in FebruaryAugust 2021,2025, expires in February 20262028 and is a triple net lease wherein the Company is responsible for payment of all real estate taxes, operating costs and utilities. The Company also has an option to buy the property and a first right of refusal during the term of the lease. Annual rental payments were $165 thousand in 2024.2025.
Recent inflationary trends have had an impact on our profitability. We have had higher than normal wage increases, have implemented other programs to ameliorate the effects of inflation on our employees, such as improvements to our benefit package, and seen price increases from some of our suppliers. We have been able to pass along many of these price increases to our customers, however in some cases we have had to absorb these price increases for a period of time, before being able to pass them along. There can be no assurance that our customers will continue to accept further price increases, that our employees will continue to be satisfied with their wage and benefit increases and that inflation will not further affect our operations or business in the future.
What changed in the latest 10-Q
Risk Factors
There have been no material changes to the risk factors as discussed in our 2025 Form 10-K.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
Largest changes
CPS does not rely on raw materials from Ukraine, Russia,see in full comparisonIran,Israel or Gaza. As a result, we do not believe that the Russian invasion of Ukraine or theconflictsconflict inMiddleIsraelEastand Gaza will have a direct impact on our results.MostNevertheless, there could be an indirect impact regarding supply chain and inflationary issues as a result ofour raw materials are sourced domestically. In some cases, our suppliers may be sourcingthesematerials from a foreign source. To date, we have not seen any significant cost increases that we believe are attributable to tariffs, however this could change in the future.conflicts.
see in full comparisonTheThese factorsmentionedcombineabove, including inflation and tariffs,to createelevateda higher degree of uncertainty regarding future financial performance.
Liquidity and Capital Resources (all $ in 000’s unless noted) The Company’s liquid assets at June 27, 2026 consist of cash and cash equivalentssee in full comparisonatofMarch$15,35528,and2026marketabletotaleddebt$5,724,securities withmarketableasecuritiesfair value of$6,798.$3,801. This compares to cash and cash equivalents at December 27, 2025 of $4,466 and $8,769 marketablesecuritiesdebt securities. The increase in liquidity came from a capital raise on May 29, 2026 involving the issuance of$8,769.1,200,000The change in cash and securities is predominantly due to our increased inventory, purchasesshares offixedcommonassetsstockandforreductionnet proceeds ofaccrued expenses, offset by a reduction in accounts receivable.$8,997.
“We are beginning to see an impact of tariffs on our cost structure. While many of our raw materials are sourced domestically, we are seeing instances where the domestic supplier is able to raise prices due to the impact of tariffs on prices charged by their foreign competitors. While the overall impact of these costs increases is relatively small, they are still enough to impact our margins. Given that our major competitor is from outside the U.S., our ability to pass on these cost increases to our foreign customers is somewhat limited.”see in full comparison
“Gross profit in the first six months of 2026 totaled $1,836 or 12% of sales, compared with $2,567, or 16% of sales, for the first six months of 2025. The decrease in gross margin percentage was partly attributable to higher gold prices, which increased 40% compared with the first half of 2025. As previously mentioned, these higher gold costs without a corresponding markup caused the gross profit percentage to decline without a material impact on gross profit dollars. …”see in full comparison
“Results of Operations for the Second Fiscal Quarter of 2026 (Q2 2026) Compared to the Second Fiscal Quarter of 2025 (Q2 2025); (all $ in 000’s) Revenues totaled $8,309 in Q2 2026 compared with $8,078 generated in Q2 2025, an increase of 3%. The increase was primarily driven by higher demand for components used in the semiconductor capital equipment and defense supply chains. This growth was partially offset by lower order volumes from certain customers that use baseplates in power electronics, following significant growth in demand from those customers in 2025.”see in full comparison
Full comparison: every changed paragraph (26)
This Quarterly Report on Form 10-Q contains forward-looking statements that involve a number of risks and uncertainties. There are a number of factors that could cause the Company’s actual results to differ materially from those forecasted or projected in such forward-looking statements. This includes the impact of the Russian invasion of Ukraine, the war in Iran and other conflicts and potential conflicts, including economic conflicts, throughout the world, which are discussed in Item 3 of this report. Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof. The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements which may be made to reflect events or changed circumstances after the date hereof or to reflect the occurrence of unanticipated events.made.
CPS’s products are custom rather than catalog items. They are made to customers’ designs and are used as components in systems built and sold by our customers. At any point in time our product mix will consist of some products with on-going production demand, and some products which are in the prototyping or evaluation stages at our customers. The Company seeks to have a portfolio of products which include products in every stage of the technology adoption lifecycle at our customers. CPS’CPS’s growth is dependent upon the level of demand for those products already in production, as well as its success in achieving new "design wins" for future products.
Results of Operations for the Second Fiscal Quarter of 2026 (Q2 2026) Compared to the Second Fiscal Quarter of 2025 (Q2 2025); (all $ in 000’s) Revenues totaled $8,309 in Q2 2026 compared with $8,078 generated in Q2 2025, an increase of 3%. The increase was primarily driven by higher demand for components used in the semiconductor capital equipment and defense supply chains. This growth was partially offset by lower order volumes from certain customers that use baseplates in power electronics, following significant growth in demand from those customers in 2025.
Gross profit in Q2 2026 totaled $1,229 or 15% of sales. This compares with a gross profit in Q2 2025 of $1,336 or 17% of sales. Excluding the impact of higher gold plating costs, underlying gross margin performance remained consistent with the prior year. Increases in gold costs are passed through to customers without a corresponding markup, resulting in approximately equal increases in both sales and cost of sales. As a result, while gross profit dollars are largely unaffected, the gross profit percentage declines.
Selling, general and administrative (SG&A) expenses totaled $1,487 in Q2 2026 compared with SG&A expenses of $1,199 in Q2 2025. The increase was primarily attributable to higher stock-based compensation expense resulting from grants to directors that vested immediately during the second quarter of 2026. In 2025 these options were granted during the first quarter. The remaining increase was primarily due to higher marketing expenses and one-time legal costs.
The Company reported an operating loss of ($259) in Q2 2026, compared with operating income of $137 in Q2 2025. The change was primarily attributable to the increase in SG&A expenses discussed above. Other income, consisting primarily of interest income, increased to $146 during Q2 2026 from $19 during Q2 2025, reflecting higher interest earned on the proceeds from two recent capital issues. Together with the income tax benefit recognized on the operating loss, this resulted in net income of $38 for Q2 2026, compared with $104 in Q2 2025.
Results of Operations for the First Six Months of 2026 Compared to the First Six Months of 2025 (all $ in 000s) Total revenue was $15,338 in the first half of 2026, a $247 decline compared with total revenue of $15,585 in the first half of 2025. This decline happened in Q1 2026 which saw a reduction in demand from one major customer which has started to be recovered in Q2 2026.
Gross profit in the first six months of 2026 totaled $1,836 or 12% of sales, compared with $2,567, or 16% of sales, for the first six months of 2025. The decrease in gross margin percentage was partly attributable to higher gold prices, which increased 40% compared with the first half of 2025. As previously mentioned, these higher gold costs without a corresponding markup caused the gross profit percentage to decline without a material impact on gross profit dollars. We also saw increases in other material costs that were partially offset by improved labor and overhead costs compared with the prior year.
CPS was incorporated in Massachusetts in 1984 as Ceramics Process Systems Corporation and reincorporated in Delaware in April 1987 through a merger into a wholly-owned Delaware subsidiary organized for purposes of the reincorporation. In July 1987, CPS completed our initial public offering of 1.5 million shares of our Common Stock. In March 2007, we changed our name from Ceramics Process Systems Corporation to CPS Technologies Corporation.
Results of Operations for the First Fiscal Quarter of 2026 (Q1 2026) Compared to the First Fiscal Quarter of 2025 (Q1 2025); (all $ in 000’s) Revenues totaled $7,029 in Q1 2026 compared with $7,506 in Q1 2025, a decrease of 6%. The major factor contributing to this decrease is the reduction in demand from one of our major customers. As announced in Q4 2025, CPS received a large order from this customer covering the twelve month period beginning October 2025. Through Q1 the customer has taken well less than half of the quantities ordered. CPS has continued to produce their products at the higher rate, both so we can meet there needs if their demand increases without putting undue stress on our production line, and in anticipation of our potential move to a larger facility, allowing us to continue to meet their needs during the move.
Gross margin in Q1 2026 totaled $607 or 9% of sales. This compares with gross margin in Q1 2025 totaled $1,231 or 16% of sales. This decrease was primarily due to the impact of lower sales volumes on fixed costs, the impact of the price of gold, billed at $1,019 at approximately a 0% margin, and increased R&D spending on our margins.
Selling, general and administrative (SG&A) expenses totaledwere $1,130$2,617 induring Q1the 2026first six months of 2026, up $316 compared with SG&A expenses of $1,101$2,301 in Q1the 2025,first asix 3%months increaseof year2025. overThese year.increases This increase was primarily duerelate to feesthe associatedpreviously withmentioned business development and legal costs during Q2 as well as the Company’snew CFO search, in anticipation of the future retirement of the current CFO,search and higher foreign exchange costs thisin year as compared to last year.Q1.
The higher material and SG&A costs resulted in an operating loss of ($781) in 2026 compared with an operating profit of $267 in 2025.
During the first half of 2026, the Company had net other income of $292 This consists primarily of interest income and compares with net other income of $70 realized during the first half of 2025. The increase in net other income is due to funds placed on investment from the capital raise in the last quarter of 2025 and the end of May 2026.
In the first six months of 2026 the Company had a net loss of ($256) compared with net income of $200 in the same period last year.
The Company had an operating loss of $523 in Q1 2026 compared with operating income of $130 in Q1 2025. This decrease was a result of the decreased gross margin discussed above. The net after tax loss was $294 in Q1 2026 compared to after tax income of $96 in Q1 2025.
CPS does not rely on raw materials from Ukraine, Russia, Iran, Israel or Gaza. As a result, we do not believe that the Russian invasion of Ukraine or the conflictsconflict in MiddleIsrael Eastand Gaza will have a direct impact on our results. MostNevertheless, there could be an indirect impact regarding supply chain and inflationary issues as a result of our raw materials are sourced domestically. In some cases, our suppliers may be sourcing these materials from a foreign source. To date, we have not seen any significant cost increases that we believe are attributable to tariffs, however this could change in the future.conflicts.
Inflation has had an impact on our costs. Thus far, we have largely been able to pass along these increases to our customers, but there is no guarantee that we will be able to continue this in the future. In addition, there is often a lag between when the costs increase and when we can adjust customer prices. Some of our larger customers will have pricing agreements, typically for one year, and we must wait for those agreements to end before making any pricing adjustments. WagesFurther, have also been impacted by inflation. We have instituted a combinationseveral of wageour increaseslarger customers buy from our major competitor in Japan. The impact of the fluctuation of foreign exchange rates can create situations where our pricing to foreign customers can be more or less competitive as well as more competitive benefits in ordercompared to retain the personnel making up our workforce.Japanese competitor.
We are beginning to see an impact of tariffs on our cost structure. While many of our raw materials are sourced domestically, we are seeing instances where the domestic supplier is able to raise prices due to the impact of tariffs on prices charged by their foreign competitors. While the overall impact of these costs increases is relatively small, they are still enough to impact our margins. Given that our major competitor is from outside the U.S., our ability to pass on these cost increases to our foreign customers is somewhat limited.
TheThese factors mentionedcombine above, including inflation and tariffs,to create elevateda higher degree of uncertainty regarding future financial performance.
Liquidity and Capital Resources (all $ in 000’s unless noted) The Company’s liquid assets at June 27, 2026 consist of cash and cash equivalents atof March$15,355 28,and 2026marketable totaleddebt $5,724,securities with marketablea securitiesfair value of $6,798.$3,801. This compares to cash and cash equivalents at December 27, 2025 of $4,466 and $8,769 marketable securitiesdebt securities. The increase in liquidity came from a capital raise on May 29, 2026 involving the issuance of $8,769.1,200,000 The change in cash and securities is predominantly due to our increased inventory, purchasesshares of fixedcommon assetsstock andfor reductionnet proceeds of accrued expenses, offset by a reduction in accounts receivable.$8,997.
Trade accountsAccounts receivable at MarchJune 28,27, 2026 totaled $3,789$4,942 compared with $5,245 at December 27, 2025. Days Salessales Outstandingoutstanding (DSO) decreased from 61 days at the end of 2025 to 5142 days at the end of Q1Q2 2026. The reason for this decrease isin thatDSO onewas primarily due to the timing and mix of oursales majorand customersrelated whocustomer historicallycollections pays monthlyduring the first week of each month made their April payment early, at the end of March.period. The accounts receivable balances at June 27, 2026 and December 27, 2025,2025 and March 28, 2026 wereare both net of an allowance for credit losses of $10.
Inventories totaled $7,144$8,649 at MarchJune 28,27, 2026 compared with inventory totaling $5,598 at December 27, 2025. The inventory turnover in the most recent four quarters ending Q1Q2 2026 was 4.96.6 times (based on a 5 quarter end average) compared with 5.4 times averaged during the four quarters of 2025. DueFinished goods inventory increased primarily due to reducedthe demandplanned frombuild aof majorinventory for products supported by long-term customer andorders. The additional inventory is intended to maintain continuity of customer supply during the pendingCompany’s move,planned thefacility Companyrelocation hasand beenassociated increasingproduction its inventory levels.transition.
Contractual Obligations (all $ in 000’s unless otherwise noted) The Company maintainshas a $3.0 million revolving line of credit (LOC) in the amount of $3.0 million with Rockland Trust Company. The LOC is secured by the accounts receivable and other assets of the Company and has an interest rate of the National Prime Rate as published by the Wall Street Journal.Journal (7.5% on 6/27/2026). On MarchJune 28,27, 2026, the Company had $0 of borrowings under this LOC and its borrowing base at the time would have permitted thean fulladditional $2.7$3.0 million to have been borrowed. The LOC remains in effect until terminated per mutual agreement by both parties.
In March 2020, the Company acquired a scanning acoustic microscope for a price of $208 thousand. The full amount was financed through a 5 year note payable with a financing company. This note was paid in full in the first quarter of 2025.
The Company has one real estate lease expiring in February 2028. CPS also has a few other leases for equipment which are minor in nature and are generally short-term in duration. None of these have been capitalized. (Note 6,8, Commitments and ContingenciesLeases)
CPSH insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-07-15 | Cavoli Ivo James |
Option exercise | 37,500 | $2.20 | $82.5K |
| 2026-06-24 | Mackey Brian T |
Option exercise | 10,000 | $2.93 | $29.3K |
| 2026-05-28 | Mackey Brian T |
Option exercise | 10,181 | $1.96 | $20.0K |
| 2026-05-18 | Griffith Charles Kellogg Jr |
Shares withheld for tax | 9,810 | $5.35 | $52.5K |
| 2026-05-18 | Griffith Charles Kellogg Jr |
Option exercise | 24,500 | $2.14 | $52.4K |
| 2026-05-18 | Norwood Ralph M |
Option exercise | 15,000 | $1.49 | $22.4K |
| 2026-05-18 | Norwood Ralph M |
Shares withheld for tax | 4,178 | $5.35 | $22.4K |
| 2026-05-11 | Griffith Charles Kellogg Jr |
Option exercise | 25,000 | $1.55 | $38.8K |
| 2026-05-11 | Griffith Charles Kellogg Jr |
Shares withheld for tax | 8,970 | $4.32 | $38.8K |
| 2026-05-11 | Norwood Ralph M |
Option exercise | 20,000 | $1.56 | $31.2K |
| 2026-05-11 | Norwood Ralph M |
Shares withheld for tax | 7,199 | $4.32 | $31.1K |
Well-known investors holding CPSH (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Two Sigma Investments | 2026-06-30 | 89,072 | $491.7K | 0.0% | New position |
| Renaissance Technologies | 2026-06-30 | 62,058 | $342.6K | 0.0% | Reduced 75% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 65,426 | $244.7K | — | Sold out |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 29,163 | $161.0K | 0.0% | Reduced 1% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 15,228 | $57.0K | — | Sold out |