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CVV CVD Equipment Corp

3,09

-0,01 (-0,32%)

23 Nov 2024 - Fermé

Retardé de 15 minutes

Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

	For the quarterly period ended June 30, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from ____ to _____

Commission file number: 1-16525

CVD EQUIPMENT CORPORATION

(Name of Registrant in Its Charter)

New York		11-2621692
State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

355 South Technology Drive Central Islip, New York 11722

(Address of principal executive offices)

(631) 981-7081
(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		CVV		NASDAQ Capital Market

Indicate by check whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act).

	Large accelerated filer ☐	Accelerated filer ☐
	Non-accelerated filer ☒	Smaller reporting company ☒	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 6,881,838 shares of Common Stock, $0.01 par value at August 13, 2024.

CVD EQUIPMENT CORPORATION AND SUBSIDIARIES

Index

Part I - Financial Information

	Item 1 –	Condensed Consolidated Financial Statements (Unaudited)

		Condensed Consolidated Balance Sheets at June 30, 2024 and December 31, 2023	3

		Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2024 and 2023	4

		Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2024 and 2023	5

		Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023	6

		Notes to Condensed Consolidated Financial Statements	7

	Item 2 –	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
	Item 3 –	Quantitative and Qualitative Disclosures About Market Risk	31
	Item 4 –	Controls and Procedures	31

Part II - Other Information

	Item 1 –	Legal Proceedings	32
	Item 1A –	Risk Factors	32
	Item 2 –	Unregistered Sales of Equity Securities and Use of Proceeds	32
	Item 3 –	Defaults Upon Senior Securities	32
	Item 4 –	Mine Safety Disclosures	32
	Item 5 –	Other Information	32
	Item 6 –	Exhibits	32

Signatures			33

2

PART 1 – FINANCIAL INFORMATION

Item 1 – Financial Statements

CVD EQUIPMENT CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands, except share amounts)

(Unaudited)

		June 30, 2024				December 31, 2023
ASSETS
Current assets
Cash and cash equivalents		$	10,031			$	14,025
Accounts receivable, net of allowance for credit losses			4,951				1,906
Contract assets			1,554				1,604
Inventories			4,658				4,454
Other current assets			592				852
Total current assets			21,786				22,841

Property, plant and equipment, net			12,041				12,166
Other assets			18				18
Total assets		$	33,845			$	35,025

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable		$	1,601			$	1,203
Accrued expenses			1,736				1,765
Current maturities of long-term debt			84				81
Contract liabilities			5,098				4,908
Deposit from purchaser of MesoScribe assets-Note 11			597				597
Total current liabilities			9,116				8,554

Long-term debt, net of current portion			225				268

Total liabilities			9,341				8,822

Stockholders’ equity:
Common stock - $0.01 par value – 20,000,000 shares authorized; issued and outstanding 6,825,338 at June 30, 2024 and 6,824,511 at December 31, 2023			68				68
Additional paid-in capital			29,229				28,695
Accumulated deficit			(4,793	)			(2,560	)
Total stockholders’ equity			24,504				26,203

Total liabilities and stockholders’ equity		$	33,845			$	35,025

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

3

CVD EQUIPMENT CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(in thousands, except per share and share amounts)

(Unaudited)

		2024				2023				2024				2023
		Three months ended								Six months ended
		June 30,								June 30,
		2024				2023				2024				2023

Revenue		$	6,345			$	5,069			$	11,267			$	13,764
Cost of revenue			4,736				3,681				8,799				9,943

Gross profit			1,609				1,388				2,468				3,821

Operating expenses
Research and development			665				559				1,410				1,161
Selling and shipping			426				428				845				847
General and administrative			1,416				1,360				2,739				2,960
Loss on disposition of Tantaline			-				162				-				162
Impairment charge			-				111				-				111

Total operating expenses			2,507				2,620				4,994				5,241

Operating loss			(898	)			(1,232	)			(2,526	)			(1,420	)

Other income (expense):
Interest income			145				107				302				227
Interest expense			(4	)			(6	)			(10	)			(12	)
Foreign exchange income			-				15				-				43
Other income (expense)			(4	)			13				1				20
Total other income, net			137				129				293				278

Loss before income tax			(761	)			(1,103	)			(2,233	)			(1,142	)

Income tax expense			-				10				-				11

Net loss		$	(761	)		$	(1,113	)		$	(2,233	)		$	(1,153	)

Loss per common share - basic		$	(0.11	)		$	(0.16	)		$	(0.33	)		$	(0.17	)
Loss per common share - diluted		$	(0.11	)		$	(0.16	)		$	(0.33	)		$	(0.17	)

Weighted average common shares
Basic			6,816,956				6,778,754				6,813,127				6,776,035
Diluted			6,816,956				6,778,754				6,813,127				6,776,035

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

4

CVD EQUIPMENT CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(in thousands, except share amounts)

(Unaudited)

Three months ended June 30, 2024 and 2023

		Shares				Par Value				Capital				Earnings				Total
		Common stock								Additional paid-in				(Accumulated Deficit) Retained
		Shares				Par Value				Capital				Earnings				Total

Balance at April 1, 2024			6,824,511			$	68			$	28,962			$	(4,032	)		$	24,998
Net loss			-				-				-				(761	)			(761	)
Stock-based compensation			827				-				267				-				267
Balance at June 30, 2024			6,825,338			$	68			$	29,229			$	(4,793	)		$	24,504

Balance at April 1, 2023			6,778,438			$	67			$	27,920			$	1,580			$	29,567
Net loss			-				-				-				(1,113	)			(1,113	)
Stock-based compensation			-				-				262				-				262
Exercise of stock options and issuance of shares			625				-				3				-				3
Balance at June 30, 2023			6,779,063			$	67			$	28,185			$	467			$	28,719

Six months ended June 30, 2024 and 2023

		Common stock								Additional paid-in				(Accumulated Deficit) Retained
		Shares				Par Value				Capital				Earnings				Total

Balance at January 1, 2024			6,824,511			$	68			$	28,695			$	(2,560	)		$	26,203
Net loss			-				-				-				(2,233	)			(2,233	)
Stock-based compensation			827				-				534				-				534
Balance at June 30, 2024			6,825,338			$	68			$	29,229			$	(4,793	)		$	24,504

Balance at January 1, 2023			6,760,938			$	67			$	27,712			$	1,620			$	29,399
Balance			6,760,938			$	67			$	27,712			$	1,620			$	29,399
Net loss			-				-				-				(1,153	)			(1,153	)
Stock-based compensation			-				-				397				-				397
Exercise of stock options and issuance of shares			18,125				-				76				-				76
Balance at June 30, 2023			6,779,063			$	67			$	28,185			$	467			$	28,719
Balance			6,779,063			$	67			$	28,185			$	467			$	28,719

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

5

CVD EQUIPMENT CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

		2024				2023
		Six months ended
		June 30,
		2024				2023
Cash flows from operating activities:
Net loss		$	(2,233	)		$	(1,153	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation			534				397
Depreciation and amortization			307				392
Loss on disposition of Tantaline			-				162
Impairment charge			-				111
Changes in assets and liabilities, net of effects of disposition of Tantaline:
Accounts receivable			(3,045	)			1,592
Contract assets			50				(781	)
Inventories			(204	)			(1,616	)
Other current assets			260				231
Accounts payable			398				(57	)
Accrued expenses			(29	)			(770	)
Contract liabilities			190				659
Net cash used in operating activities			(3,772	)			(833	)

Cash flows from investing activities:
Purchases of property and equipment			(182	)			(225	)
Net cash used in connection with disposition of Tantaline			-				(312	)
Net cash used in investing activities			(182	)			(537	)

Cash flows from financing activities
Payments of long-term debt			(40	)			(38	)
Proceeds from exercise of stock options			-				76
Net cash (used in) provided by financing activities			(40	)			38

Net decrease in cash and cash equivalents			(3,994	)			(1,332	)

Cash and cash equivalents at beginning of period			14,025				14,365

Cash and cash equivalents at end of period		$	10,031			$	13,033

Supplemental disclosure of cash flow information:

Income taxes paid		$	3			$	11
Interest paid		$	10			$	12

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

6

CVD EQUIPMENT CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 1:

BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements for CVD Equipment Corporation and Subsidiaries (collectively “the Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. They do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary in order to make the interim financials not misleading have been included and all such adjustments are of a normal recurring nature. The operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results that can be expected for the year ending December 31, 2024.

The condensed consolidated balance sheet as of December 31, 2023 has been derived from the audited consolidated financial statements at such date, as filed on Form 10-K with the SEC on March 28, 2024, but does not contain all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with that report.

All material intercompany balances and transactions have been eliminated in consolidation.

Reclassifications

Certain reclassifications have been made to the prior period condensed consolidated financial statements to conform to the current period presentation. These reclassifications had no effect on net loss.

Liquidity

At June 30, 2024, the Company had $10.0 million in cash and cash equivalents. The Company anticipates that the existing cash and cash equivalents balance together with potential future income from operations, collections of existing accounts receivable, revenue from its existing backlog of products as of this filing date, the sale of inventory on hand, deposits and down payments against significant orders will be adequate to meet its working capital and capital equipment requirements, and its anticipated cash needs over the next 12 months from the date of issuance of these condensed consolidated financial statements

7

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition

In 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; (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:

Over time

The 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 acceptance. For systems sales that meet the criteria to recognize revenue over time, the Company recognizes revenue over time by using an input method based on costs incurred as it depicts the Company’s progress toward satisfaction of the performance obligation. For system sales that do not meet the criteria to recognize revenue over time based on the contract provisions, the Company recognizes revenue based on point in time as discussed below.

Under this method, revenue arising from fixed price contracts is recognized as work is performed based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligations. Incurred costs include all direct material and labor costs and those indirect costs related to contract performance, such as supplies, tools, repairs and depreciation costs. Contract material costs are included in incurred costs when the project materials have been purchased or moved to work in process, and installed, as required by the project’s engineering design. Cost based input methods of revenue recognition require the Company to make estimates of costs 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 and six months ended June 30, 2024 and 2023.

The 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 milestones.

8

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Under ASC 606, payments received from customers in excess of revenue recognized to-date results in a contract liability. These contract liabilities are not considered to represent a significant financing component of the contract because we believe these cash advances and deposits are generally used to meet working capital demands which can be higher in the earlier stages of a contract. Also, advanced payments and deposits provide us with some measure of assurance that the customer will perform on its obligations under the contract.

Contract assets include unbilled amounts typically resulting from system sales under contracts and represents revenue recognized that exceeds the amount billed to the customer.

Contract liabilities include advance payments and billings in excess of revenue recognized. The Company typically receives down payments upon receipt of orders and progress payments as the system is manufactured.

Contract assets and contract liabilities are classified as current as these contracts in progress are expected to be substantially completed within the next twelve months.

Point in time

For non-system sales of products and services, revenue is recognized at the point in time when control of the promised products or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products or services (the transaction price). A performance obligation is a promise in a contract to transfer a distinct product or service to a customer and is the unit of account under ASC 606, “Revenue from Contracts with Customers”.

For 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, 2024 and 2023, all system equipment sales were recorded over time by using an input method except for one system equipment contract in the second quarter of 2023 where the revenue was to be recognized at the point in time when the equipment was transferred to the customer. Subsequent to June 30, 2023, this one system equipment contract was modified such that the revenue under this contract would be recognized over time using an input method based on the revised contract provisions and the fact that the equipment does not have an alternative use.

9

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Inventories

Inventories (raw materials, work-in-process and finished goods) are valued at the lower of cost (determined on the first-in, first-out method) or net realizable value. Work-in-process and finished goods inventory reflect all accumulated production costs, which are comprised of direct production costs and overhead, and is reduced by amounts recorded in cost of sales as the related revenue is recognized. Indirect costs relating to long-term contracts, which include expenses such as general and administrative, are charged to expense as incurred and are not included in our cost of sales or work-in-process and finished goods inventory.

Obsolete inventory or inventory in excess of management’s estimated usage requirement is written down to its estimated net realizable value if less than cost. The Company evaluates usage requirements by analyzing historical usage, anticipated demand, alternative uses of materials and other qualitative factors. Unanticipated changes in demand for the Company’s products may require a write down of inventory, which would be reflected in cost of sales in the period the revision is made.

Product Warranty

The Company typically provides standard warranty coverage on its systems for one year from the date of final acceptance or fifteen months from the date of shipment by providing labor and parts necessary to repair the systems during the warranty period. The Company records the estimated warranty cost when revenue is recognized on the related system. Warranty cost is included in “Cost of revenue” in the condensed consolidated statements of operations. The estimated warranty cost is based on the Company’s historical cost. The Company updates its warranty estimates based on actual costs incurred.

Recent Accounting Standards

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this update expand annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. This update is effective for our annual report for fiscal year 2025, and interim periods thereafter, with early adoption permitted, and will be applied retrospectively to all prior periods presented in the financial statements. We are currently evaluating the impact of this ASU on our Consolidated Financial Statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures. The amendments further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. This ASU is effective for our annual report for fiscal year 2026, with early adoption permitted, and should be applied either prospectively or retrospectively. We are currently evaluating the timing of adoption and impact of this ASU on our Consolidated Financial Statements and related disclosures.

10

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

The Company believes there is no additional new accounting guidance adopted, but not yet effective, that is relevant to the readers of our financial statements. However, there are numerous new proposals under development which, if and when enacted, may have a significant impact on our financial reporting.

NOTE 3: CONCENTRATION OF CREDIT RISK

Cash and cash equivalents

The Company had cash and cash equivalents of $10.0 million and $14.0 million at June 30, 2024 and December 31, 2023, respectively. The Company invests excess cash in U.S. treasury bills, certificates of deposit or deposit accounts, all with maturities of less than three months. Cash equivalents consisting of U.S. treasury bills were $9.8 million and $12.1 million at June 30, 2024 and December 31, 2023, respectively.

The Company places most of its temporary cash investments in the United States with financial institutions, which from time to time may exceed the Federal Deposit Insurance Corporation limit. The amount at risk at June 30, 2024 and December 31, 2023 was $0.1 million and $1.5 million, respectively.

Accounts receivable

The Company sells products and services to various companies across several industries in the ordinary course of business. The Company performs ongoing credit evaluations to assess the probability of accounts receivable collection based on a number of factors, including past transaction experience, evaluation of their credit history and review of the invoicing terms of the contract to determine the financial strength of its customers.

Accounts receivable are presented net of an allowance for credit losses of approximately $36,000 at both June 30, 2024 and December 31, 2023. The allowance is based on prior experience and management’s evaluation of the collectability of accounts receivable. 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.

11

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 3: CONCENTRATION OF CREDIT RISK (continued)

At June 30, 2024, the accounts receivable balance included amounts from two customers that represented 35.7% and 10.5% of total accounts receivable. As of December 31, 2023, the accounts receivable balance includes amounts from three customers that represented 37.6%, 13.0% and 12.8% of total accounts receivable.

Sales concentration

Revenue from a single customer in any one period can exceed 10% of our total revenues. During the three months ended June 30, 2024, one customer exceeded 10% of revenues, representing 35.2% of revenues, and during the six months ended June 30, 2024, one customer exceeded 10%, representing 32.8% of revenues.

During the three months ended June 30, 2023, four customers exceeded 10% of revenues, representing 16.1%, 15.6%, 11.0% and 10.2% of revenues, and during the six months ended June 30, 2023, two customers exceeded 10%, representing 21.0% and 15.8% of revenues.

NOTE 4: REVENUE RECOGNITION

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

SCHEDULE OF DISAGGREGATION OF REVENUE

		Over time				Point in time				Total
		Three months ended June 30, 2024
		Over time				Point in time				Total
Energy		$	239			$	12			$	251
Aerospace			2,694				179				2,873
Industrial			1,542				300				1,842
Research			1,174				205				1,379
Total		$	5,649			$	696			$	6,345

		Over time				Point in time				Total
		Three months ended June 30, 2023
		Over time				Point in time				Total
Energy		$	760			$	38			$	798
Aerospace			-				604				604
Industrial			1,085				915				2,000
Research			1,184				483				1,667
Total		$	3,029			$	2,040			$	5,069

12

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 4: REVENUE RECOGNITION (continued)

		Over time				Point in time				Total
		Six months ended June 30, 2024
		Over time				Point in time				Total
Energy		$	239			$	30			$	269
Aerospace			4,496				494				4,990
Industrial			2,801				774				3,575
Research			2,035				398				2,433
Total		$	9,571			$	1,696			$	11,267

		Over time				Point in time				Total
		Six months ended June 30, 2023
		Over time				Point in time				Total
Energy		$	3,276			$	52			$	3,328
Aerospace			264				855				1,119
Industrial			4,756				1,127				5,883
Research			2,456				978				3,434
Total		$	10,752			$	3,012			$	13,764

The energy market includes customers involved in the manufacture of silicon carbide wafers and batteries. Aerospace market includes customers that manufacture aircraft engines. Industrial end market consists of various end customers in diverse industries. Research market principally represents customers such as universities and other research institutions.

The Company has unrecognized contract revenue of approximately $21.6 million at June 30, 2024, which it expects to substantially recognize as revenue within the next twelve months based on over time revenue recognition.

Judgment is required to evaluate assumptions including the amount of net contract revenues and the total estimated costs to determine our progress towards contract completion and to calculate the corresponding amount of revenue to recognize.

Changes 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 condensed consolidated statements of operations.

13

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 4: REVENUE RECOGNITION (continued)

Contract assets and liabilities

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


Costs incurred on contracts in progress		$	11,009
Estimated earnings			5,609
			16,618
Billings to date			(19,589	)
Net cost in excess of billings			(2,971	)

Deferred revenue related to non-system contracts			(573	)
		$	(3,544	)
Included in accompanying condensed consolidated balance sheet as of June 30, 2024 under the following captions (in thousands):
Contract assets		$	1,554
Contract liabilities		$	5,098

Of the contract liability balances at December 31, 2023 and 2022 of $4.6 million and $4.1 million, respectively, $2.7 million and $2.6 million was recognized as revenue during the six months ended June 30, 2024 and 2023, respectively.

NOTE 5: INVENTORIES

SCHEDULE OF INVENTORIES

Inventories consist of:
		June 30, 2024				December 31, 2023

Raw materials		$	2,231			$	2,351
Work-in-process			1,612				1,248
Finished goods			815				855
Total		$	4,658			$	4,454

Included in our inventories (raw materials, work-in-process and finished goods) are approximately $1.8 million related to PVT 150 systems that were purchased in anticipation of future orders. In the event that such orders do not materialize, the Company would incur a charge to reduce the carrying value of such inventory to market. Such a charge may be material to the Company’s financial position and future results of operations.

14

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 6: LONG-TERM DEBT

In September 2022, the Company entered into a loan agreement to fund the acquisition of machinery. The loan amount of $432,000, is payable in 60 equal monthly installments of $8,352 and secured by equipment. The interest rate is 6%.

NOTE 7: EARNINGS PER SHARE

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

		2024				2023				2024				2023
		Three months ended June 30,								Six months ended June 30,
		2024				2023				2024				2023

Basic weighted average common shares outstanding			6,816,956				6,778,754				6,813,127				6,776,035
Dilutive effect of options and unvested restricted stock			-				-				-				-
Diluted weighted average shares outstanding			6,816,956				6,778,754				6,813,127				6,776,035

At June 30, 2024, stock options to purchase 838,125 shares of common stock were outstanding and 416,875 were exercisable. At June 30, 2023, stock options to purchase 599,500 shares of common stock were outstanding and 297,500 were exercisable.

For the three and six months ended June 30, 2024 and 2023, all stock options were excluded in the computation of diluted earnings per share because their effect was antidilutive.

NOTE 8: STOCK-BASED COMPENSATION EXPENSE

The Company recorded stock-based compensation for the three and six months ended June 30, 2024 and 2023, respectively, that were included in the following line items in our condensed consolidated statements of operations (in thousands):

		2024				2023				2024				2023
		Three months ended June 30,								Six months ended June 30,
		2024				2023				2024				2023

Cost of revenue		$	38			$	41			$	76			$	60
Research and development			47				45				94				65
Selling			27				31				54				42
General and administrative			155				145				310				230
Total		$	267			$	262			$	534			$	397

15

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 8: STOCK-BASED COMPENSATION EXPENSE (continued)

Stock-based compensation expense for three months ended June 30, 2024 and 2023 included $57,423 and 40,000, respectively, and for the six month periods June 30, 2024 and 2023 included $103,736 and $80,000, respectively, related to restricted stock awards that directors are entitled to receive pursuant to the Director Compensation Plan. Under this plan each of the Company’s independent directors is entitled to an Annual Equity Retainer in the amount of $40,000, to be granted on the date of the Company’s annual meeting of shareholders.

For the six months ended June 30, 2024, the Company granted 5,000 stock options, vesting 25% per year over four years, with a ten-year life. The Company determined the weighted average fair value of stock options granted was $3.30 and is based upon weighted average assumptions below.

Stock price		$	4.75
Exercise price		$	4.75
Dividend yield			0	%
Expected volatility			77	%
Risk-free interest rate			4.12	%
Expected life (in years)			6.00

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

SCHEDULE OF STOCK OPTIONS AWARDS

						Weighted
		Stock Option				Average
		Awards				Exercise
		(in shares)				Price

Outstanding at January 1, 2024			846,875				8.20
Granted			5,000				4.75
Forfeited			(13,750	)			7.94
Outstanding at June 30, 2024			838,125			$	8.18

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

		Options Outstanding																Options Exercisable
						Weighted				Weighted												Weighted
Exercise						Average				Average												Average
Price		Number				Remaining				Exercise				Intrinsic				Number				Exercise				Intrinsic
Range		Outstanding				Contractual				Price				Value				Exercisable				Price				Value
$4.00-7.00			459,625				7.4			$	4.55			$	-				217,250			$	4.45			$	-
$7.01-10.00			20,000				3.8			$	8.07			$	-				20,000			$	8.07			$	-
$10.01-13.00			130,000				3.2			$	10.62			$	-				122,500			$	10.55			$	-
$13.01-16.00			228,500				8.7			$	14.11			$	-				57,125			$	14.11			$	-

16

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 8: STOCK-BASED COMPENSATION EXPENSE (continued)

As of June 30, 2024, there was $2.0 million of unrecognized compensation costs related to stock options expected to be recognized over a weighted average period of 1.8 years.

NOTE 9: INCOME TAXES

As of June 30, 2024 and December 31, 2023, the Company has provided a full valuation allowance against its net deferred tax assets. This was based on management’s assessment, including the last four years of operating losses, that it is more likely than not that the net deferred tax assets may not be realized in the future. Management continues to evaluate for potential utilization of the Company’s net deferred tax asset, which has been fully reserved for, on a quarterly basis, reviewing our economic models, including projections of future operating results.

NOTE 10: SEGMENT REPORTING

The Company operates through three segments: CVD Equipment, Stainless Design Concepts (“SDC”) and CVD Materials. The CVD Equipment segment manufactures and sells chemical vapor deposition, physical vapor transport and similar equipment. The SDC segment designs and manufactures ultra-high purity gas and chemical delivery control systems. The CVD Materials segment provides material coatings for aerospace, medical, electronic and other applications and is not considered a core business of the Company. The Company evaluates performance based on several factors, of which the primary financial measure is income (loss) before taxes.

The Company’s corporate administration activities are reported in the “Corporate” column. These activities primarily include expenses related to certain corporate officers and support staff, expenses related to the Company’s Board of Directors, stock option expense for options and shares of restricted stock granted to corporate administration employees and board members, certain consulting expenses, investor and shareholder relations activities, and all of the Company’s legal, auditing and professional fees.

Elimination entries included in the “Eliminations” column represent intersegment revenues and cost of revenues that are eliminated in consolidation. Intersegment sales by the SDC segment to the CVD Equipment segment for the three months ended June 30, 2024 and 2023 were $132,000 and $138,000, respectively and $147,000 and $266,000 for the six months ended June 30, 2024 and 2023, respectively. There were no intersegment sales by the CVD Equipment segment to the SDC segment during the three and six months ended June 30, 2024. Intersegment sales by the CVD Equipment segment to the SDC segment for the three months and six months ended June 30, 2023 were $64,000.

17

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 10: SEGMENT REPORTING (continued)

The following table presents certain information regarding the Company’s segments as of and for the three months ended June 30, 2024 and 2023 (in thousands):

SCHEDULE OF SEGMENTS

2024

		CVD Equipment				SDC				CVD Materials				Eliminations				Corporate				Consolidated
Assets		$	29,368			$	4,310			$	222			$	(55	)		$	-			$	33,845

Revenue		$	4,107			$	2,315			$	55			$	(132	)		$	-			$	6,345
Operating (loss) income			(729	)			714				(45	)			(8	)			(830	)			(898	)
Pretax (loss) income			(743	)			714				(45	)			(8	)			(679	)			(761	)
Depreciation and amortization		$	141			$	13			$	-			$	-			$	-			$	154
Purchase of property, plant & equipment		$	101			$	4			$	-			$	-			$	-			$	105

2023

		CVD Equipment				SDC				CVD Materials				Eliminations				Corporate				Consolidated
Assets		$	32,139			$	4,189			$	483			$	(28	)		$	-			$	36,783

Revenue		$	3,134			$	1,795			$	342			$	(202	)		$	-			$	5,069
Operating (loss) income			(445	)			363				*(224)				(28	)			(898	)			(1,232	)
Pretax (loss) income			(445	)			364				*(203)				(28	)			(791	)			(1,103	)
Depreciation and amortization		$	136			$	12			$	79			$	-			$	-			$	227
Purchase of property, plant & equipment		$	78			$	-			$	-			$	-			$	-			$	78

*

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

18

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 10: SEGMENT REPORTING (continued)

The following table presents certain information regarding the Company’s segments as of and for the six months ended June 30, 2024 and 2023 (in thousands):

2024

		CVD Equipment				SDC				CVD Materials				Eliminations				Corporate				Consolidated

Revenue		$	7,054			$	4,246			$	114			$	(147	)		$	-			$	11,267
Operating (loss) income			(2,173	)			1,346				(71	)			10				(1,638	)			(2,526	)
Pretax (loss) Income			(2,188	)			1,346				(71	)			10				(1,330	)			(2,233	)
Depreciation and amortization		$	283			$	24			$	-			$	-			$	-			$	307
Purchase of property, plant & equipment		$	178			$	4			$	-			$	-			$	-			$	182

2023

		CVD Equipment				SDC				CVD Materials				Eliminations				Corporate				Consolidated

Revenue		$	8,979			$	4,107			$	1,009			$	(331	)		$	-			$	13,764
Operating (loss) income			(267	)			994				(143	)*			(28	)			(1,976	)			(1,420	)
Pretax (loss) Income			(265	)			996				(95	)*			(28	)			(1750	)			(1,142	)
Depreciation and amortization		$	267			$	24			$	101			$	-			$	-			$	392
Purchase of property, plant & equipment		$	215			$	10			$	-			$	-			$	-			$	225

*

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

NOTE 11: MESOSCRIBE SUBSIDIARY

On August 8, 2023, the Company entered into a Purchase and License Agreement (the “Agreement”) with a third-party. Pursuant to the Agreement, the Company will sell certain proprietary assets relating to its plasma spray technology and material deposition system and grant a non-exclusive license to use certain of the Company’s related intellectual property as more fully described in the Agreement, for an aggregate purchase price of $0.9 million. The purchase price is payable in several installments and contingent upon certain performance metrics and other milestones.

The Company will continue to fulfill remaining orders for MesoScribe products through the end of 2024 at which time it plans to cease the remaining operations of MesoScribe and dispose of any remaining equipment. During the three and six months ended June 30, 2023, the Company recorded an impairment charge of $0.1 million for certain equipment of MesoScribe based on its decision to cease the remaining operations by the end of 2024.

The Company received payments under the Agreement in the amount of $0.6 million which has been reflected as “deposit from purchaser” in the accompanying consolidated balance sheet as of March 31, 2024 and December 31, 2023. The Company expects the transaction to be completed in 2024 with the acceptance of the equipment by the purchaser.

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

The total assets and total liabilities of the MesoScribe subsidiary were $0.2 million and $0.7 million, respectively, as of both June 30, 2024 and December 31, 2023.

19

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Except for historical information contained herein, this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contains forward–looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. These statements involve known and unknown risks and uncertainties that may cause our actual results or outcomes to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements are based on various factors and are derived utilizing numerous important assumptions and other important factors that could cause actual results to differ materially from those in the forward-looking statements. Important assumptions and other factors that could cause actual results to differ materially from those in the forward-looking statements, include, but are not limited to:

	●	uncertainty as to our future profitability;

	●	competition in our existing and potential future product lines of business, including our PVT150 / PVT200 systems;

	●	uncertainty as to our ability to develop new products for the high power electronics market including our plan to develop a PVT200 to grow silicon carbide crystals for 200 mm wafers;

	●	our ability to obtain financing on acceptable terms if and when needed;

	●	our ability to attract and retain key personnel and employees; and

	●	uncertainty as to our ability to adequately obtain raw materials and on commercially reasonable terms.

Other factors and assumptions not identified above were also involved in the derivation of these forward-looking statements and the failure of such assumptions to be realized as well as other factors may also cause actual results to differ materially from those projected. We assume no obligation to update these forward-looking statements to reflect actual results, changes in assumptions, or changes in other factors affecting such forward-looking statements. Past performance is no guaranty of future results.

You should not place undue reliance on any forward-looking statements, which speak only as of the dates they are made. When used with this Report, the words “believes” “anticipates”, “expects”, “estimates”, “plans”, “intends”, “will” and similar expressions are intended to identify forward-looking statements.

20

Executive Summary

We have served the advanced materials markets with chemical vapor and thermal process equipment for over 40 years. CVD designs, develops, and manufactures a broad range of chemical vapor deposition, gas control, and other state-of-the-art equipment and process solutions used to develop and manufacture materials and coatings for industrial applications and research. To learn more about CVD’s systems and offerings, visit www.cvdequipment.com.

During the three and six months ended June 30, 2024 and 2023:

	●	Revenue increased by $1.3 million or 25.2% for the second quarter as compared to the prior year period due to increases in revenues from aerospace contracts in progress and our SDC segment offset in part by lower revenues for PVT150 systems and spare parts.

	●	Gross margin increased by $0.2 million or 15.9% in the second quarter as compared to the prior period quarter due to higher revenues that was offset by lower gross profit margins on contracts in progress.

	●	Total bookings for the second quarter of 2024 were approximately $3.2 million as compared to $13.0 million in the prior year period.

	●	Total bookings for the first half of 2024 were $16.9 million as compared to $15.8 million in the first half of 2023.

	●	Bookings in 2024 included a $10.0 million multisystem order from an industrial customer that will be used to deposit a silicon carbide protective coating on OEM components.

	●	Bookings in 2023 included $8.7 million of multiple systems orders from an aerospace customer and a battery nanomaterial production system of $1.8 million.

	●	During the first quarter of 2024, we received an order from an additional customer for our new PVT200 system that will be used to grow silicon carbide crystals for the manufacture of 200 mm wafers.

	●	Increased our backlog from $18.4 million at December 31, 2023 to $24.0 million at June 30, 2024.

	●	Cash balance at June 30, 2024 was $10.0 million as compared to $14.0 million at December 31, 2023

Business Update

Our core strategy is to focus on growth market applications in end markets related to the “electrification of everything,” aerospace and industrial applications. The phrase “electrification of everything” refers to the shift from fossil fuels to the use of electricity to power devices, buildings, electric vehicles (“EVs”), and many other applications. With respect to aerospace, our systems are being used by our customers to produce ceramic matrix composite materials (“CMCs”) that will be used in next generation gas turbine jet engines with the objective of reducing jet fuel consumption and contributing to the decarbonization of that industry.

21

Our current strategy yielded multisystem orders of PVT150 equipment in 2023 and 2022 that was delivered to one company that manufactures silicon carbide wafers. Although we continue to invest in our vision for the “electrification of everything,” we have observed lower-than-anticipated industrywide electric vehicle adoption rates which may reduce demand for silicon carbide and impact sales of our PVT systems.

In February 2024, we received an order from an additional customer for our new PVT200 system used to grow silicon carbide crystals for the manufacture of 200 mm wafers. This represents our second customer for our PVT equipment. This customer plans to evaluate our equipment for potential additional purchases of PVT equipment. We have also received orders from OneD Battery Materials in 2023, a company that is engaged in providing battery nanomaterials.

Both technologies are essential for the support of the EV market. These systems should provide us with standard product offering to continue to support the EV focused market as well as energy storage, power conversion and power transmission. We plan to expand our product offerings in the power electronics market to build off the introduction of the PVT150 and PVT200 systems. We are also evaluating our ability to provide other equipment used in the manufacturing process of silicon carbide wafers.

During 2022, we also received an order from an aerospace company for a production chemical vapor infiltration (CVI) system that will be used to manufacture CMCs for gas turbine jet engines. In 2023, we received an order from the same aerospace company for an additional three CVI systems.

In February 2024, we received a multisystem order from an industrial customer for approximately $10 million that will be used for depositing a silicon carbide protective coating on OEM components.

We have generally gained new customers through our industry reputation, as well as limited print advertising and trade show attendance. We have increased the number of trade shows and industry conferences. In addition, we added to our sales and marketing team in 2022 and expanded our sales team in early 2023.

Historically, our orders have fluctuated based on end user market conditions, adoption of our new products and acceptance of our products. The order rate as well as other factors in our manufacturing process ultimately impacts the timing of revenue recognition, whether accounted for over time or at a point in time. Accordingly, orders received from customers and the corresponding revenue recognized may fluctuate from quarter to quarter. The sales cycle for our equipment is typically six months, but can range up to twelve to eighteen months, depending on the application and product stage of the equipment. The order cycle to manufacture and test a system also will vary from six to eighteen months for our CVD Equipment segment and two to twelve months for our SDC segment, depending on system complexity and magnitude of the system.

22

Results of Operations

Three Months Ended June 30, 2024 and 2023

The following table presents revenue and expense line items reported in our condensed consolidated statements of operations for the three months ended June 30, 2024 and 2023 and the period-over-period dollar and percentage changes for those line items (in thousands, except percentages).

		Three months ended June 30
		2024				2023				Change				Percent
Revenue		$	6,345			$	5,069			$	1,276				25.2	%
Cost of revenue			4,736				3,681				1,055				28.7	%

Gross profit			1,609				1,388				221				15.9	%
Gross profit percentage			25.4	%			27.4	%

Operating expenses:
Research and development			665				559				106				18.9	%
Selling			426				428				(2	)			0.5	%
General and administrative			1,416				1,360				56				4.1	%
Loss on disposition of Tantaline			-				162				(162	)			*
Impairment charge			-				111				(111	)			*

Total operating expenses			2,507				2,620				(113	)			(4.3	%)

Operating loss			(898	)			(1,232	)			334				27.1	%

Other income (expense):
Interest income			145				107				38				35.5	%
Interest expense			(4	)			(6	)			2				*
Foreign exchange income			-				15				(15	)			*
Other income (expense)			(4	)			13				(17	)			*
Total other income, net			137				129				8				6.2	%

Loss before income taxes			(761	)			(1,103	)			342				31.0	%

Income tax expense			-				10				10				*

Net loss		$	(761	)		$	(1,113	)		$	352				31.6	%
Revenue (net of intersegment sales)
CVD Equipment		$	4,107			$	3,134			$	973				31.0	%
SDC			2,315				1,795				520				29.0	%
CVD Materials			55				342				(287	)			(83.9	%)
Intersegment sales elimination			(132	)			(202	)			70				34.7	%

Total		$	6,345			$	5,069			$	1,276				25.2	%

* Not meaningful

23

Revenue

Our revenue for the three months ended June 30, 2024 was $6.3 million compared to $5.1 million for the three months ended June 30, 2023, an increase of 25.2%.

The increase in revenue versus the prior year period was primarily attributable to higher revenue of $1.0 million from our CVD Equipment segment, a $0.5 million increase in revenue from our SDC segment, offset by a $0.3 million decrease from our CVD Materials segment. Revenue from one aerospace customer for the three months ended June 30, 2024 represented 35.2% of our total revenues and 54.3% of CVD Equipment segment revenues.

The revenue contributed by the CVD Equipment segment for the three months ended June 30, 2024 of $4.1 million represented 64.8% of overall revenue as compared to $3.1 million or 61.8% of overall revenue for the three months ended June 30, 2023. The increase in revenues of $1.0 million or 31.0%% resulted principally due to increases in revenues from aerospace contracts in progress offset in part by lower revenue for PVT150 systems and spare parts.

The revenue contributed by the SDC segment for the three months ended June 30, 2024 of $2.3 million represented 36.5% of overall revenue as compared to $1.8 million or 35.4% of overall revenue for the three months ended June 30, 2023. Revenue for our SDC segment increased by $0.5 million or 30.0% due to higher demand for SDC’s gas and chemical delivery system products as compared to the prior period.

The revenue contributed by the CVD Materials segment for the three months ended June 30, 2024 of $55,000 represented 0.9% of our overall revenue as compared to $0.3 million or 6.7% of overall revenue for the three months ended June 30, 2023. The decrease of $0.3 million or 83.9% was principally due to the disposition of Tantaline in May 2023 and the wind down of MesoScribe’s operations.

Our order backlog at June 30, 2024 was approximately $24.0 million as compared to December 31, 2023 of $18.4 million. Our backlog at June 30, 2024 consists of approximately $21.6 million related to remaining performance obligations of contracts in progress and not yet started that will be recognized over time with the balance of approximately $2.4 million representing other orders received from customers. Historically, our revenues and orders have fluctuated based on changes in order rate as well as other factors in our manufacturing process that impact the timing of revenue recognition. Accordingly, orders received from customers and revenue recognized may fluctuate from quarter to quarter.

24

Gross Profit

Gross profit for the three months ended June 30, 2024 was $1.6 million, with a gross profit margin of 25.4%, compared to a gross profit of $1.4 million and a gross profit margin of 27.4% for the three months ended June 30, 2023. The increase in gross profit of $0.2 million was primarily due to higher revenues that was offset by a contract mix with lower gross margins as compared to the prior period.

Research and Development

For the three months ended June 30, 2024, research and development expenses were $0.7 million, or 10.5% of revenue as compared to $0.6 million, or 11.0% for the three months ended June 30, 2023, an increase of $0.1 million or 18.9%. The increase in 2024 was due principally to a reduction of bonus accruals in the prior period quarter and a recruitment fee for a new engineer in the current quarter.

General engineering support and expenses related to the development of more standardized products and value-added development of existing products are reflected as part of research and development expense. General engineering support and expenses are charged to costs of goods sold when work is performed directly on a customer order.

Selling

Selling expenses were $0.4 million or 6.7% of the revenue for the three months ended June 30, 2024 as compared to $0.4 million or 8.4% for the three months ended June 30, 2023. There were no significant changes in selling expenses as compared to the prior period quarter.

General and Administrative

General and administrative expenses for the three months ended June 30, 2024 were $1.4 million or 22.3% of revenue compared to $1.4 million or 26.8% of revenue for the three months ended June 30, 2023, an increase of $56,000 or 5.7%. The increase in 2024 was due principally to a reduction of bonus accruals in the prior period quarter offset by increases in consulting and recruitment fees in the current quarter.

During the three months ended June 30, 2023, the Company revised its estimated bonus accrual. This resulted in an adjustment of $0.2 million to reverse a portion of the 2024 bonus that was accrued as of March 31, 2023. The impact of this reversal on general administrative expense was a reduction of $0.1 million. The impact of this reversal also resulted in reductions of expenses for cost of revenue of $41,000, research and development of $56,000 and selling expenses of $24,000 during the three months ended June 30, 2023.

Loss on Disposition of Tantaline

This item represents the net loss on the sale of our Tantaline subsidiary including professional fees in the three months ended June 30, 2023.

Impairment Charge

This item represents the loss on the impairment of certain assets of MesoScribe based on the decision at June 30, 2023 to dispose of the subsidiary.

Other Income (Expense), Net

Other income (expense), net was $0.1 million for both the three months ended June 30, 2024 and 2023. Other income is principally interest income on treasury bills.

Income Taxes

We continue to evaluate the potential utilization of our deferred tax asset, which has been fully reserved for, on a quarterly basis, by reviewing our economic models, including projections of future operating results.

25

Six Months Ended June 30, 2024 versus June 30, 2023

The following table presents revenue and expense line items reported in our condensed consolidated statements of operations for the six months ended June 30, 2024 and 2023 and the period-over-period dollar and percentage changes for those line items (in thousands, except percentages).

		Six months ended June 30
		2024				2023				Change				Percent
Revenue		$	11,267			$	13,764			$	(2,497	)			(18.1	%)
Cost of revenue			8,799				9,943				(1,144	)			(11.5	%)

Gross profit			2,468				3,821				(1,353	)			(35.4	%)
Gross profit percentage			21.9	%			27.8	%

Operating expenses:
Research and development			1,410				1,161				249				21.4	%
Selling			845				847				(2	)			(0.2	%)
General and administrative			2,739				2,960				(221	)			(7.5	%)
Loss on disposition of Tantaline			-				162				(162	)			*
Impairment charge			-				111				(111	)			*

Total operating expenses			4,994				5,241				(247	)			(4.7	%)

Operating loss			(2,526	)			(1,420	)			(1,106	)			(77.9	%)

Other income (expense):
Interest income			302				227				75				33.0	%
Interest expense			(10	)			(12	)			2				*
Foreign exchange income			-				43				(43	)			*
Other income			1				20				(19	)			*
Total other income, net			293				278				15				5.4	%

Loss before income taxes			(2,223	)			(1,142	)			(1,091	)			(95.1	%)

Income tax expense			-				11				(11	)			*

Net loss		$	(2,223	)		$	(1,153	)		$	(1,080	)			(93.2	)
Revenue (net of intersegment sales)
CVD Equipment		$	7,054			$	8,979			$	(1,925	)			(21.4	%)
SDC			4,246				4,107				139				3.4	%
CVD Materials			114				1,009				(895	)			(88.7	%)
Intersegment sales elimination			(147	)			(331	)			184				(55.6	%)

Total		$	11,267			$	13,764			$	(2,497	)			(18.1	%)

* Not meaningful

26

Revenue

Our revenue for the six months ended June 30, 2024 was $11.3 million compared to $13.8 million for the six months ended June 30, 2023, a decrease of 18.1%.

The decrease in revenue versus the prior year period was primarily attributable to lower revenues of $1.9 million from our CVD Equipment segment and $0.9 million from our CVD Materials segment, offset by a $0.1 million increase in revenue from our SDC segment,

Revenue from one aerospace customer for the six months ended June 30, 2024 represented 32.8% of our total revenues and 52.3% of CVD Equipment segment revenues.

The revenue contributed by the CVD Equipment segment for the six months ended June 30, 2024 of $7.1 million represented 62.6% of overall revenue as compared to $9.0 million or 65.2% of overall revenue for the six months ended June 30, 2023. The decrease in revenues of $1.9 million or 21.4%% resulted principally due to lower PVT150 systems and revenue from spares and parts offset by increases in revenues from aerospace contracts in progress.

The revenue contributed by the SDC segment for the six months ended June 30, 2024 of $4.2 million represented 37.7% of overall revenue as compared to $4.1 million or 29.8% of overall revenue for the six months ended June 30, 2023. Revenue for our SDC segment increased by $0.1 million or 3.4% due to slightly higher demand for SDC’s gas and chemical delivery system products as compared to the prior period.

The revenue contributed by the CVD Materials segment for the six months ended June 30, 2024 of $0.1 million represented 1.0% of our overall revenue as compared to $1.0 million or 7.3% of overall revenue for the six months ended June 30, 2023. The decrease of $0.9 million was principally due to the disposition of Tantaline in May 2023 and the wind down of MesoScribe’s operations.

27

Gross Profit

Gross profit for the six months ended June 30, 2024 was $2.5 million, with a gross profit margin of 21.9%, compared to a gross profit of $3.8 million and a gross profit margin of 27.8% for the six months ended June 30, 2023. The decrease in gross profit of $1.4 million was primarily the result of lower revenue and a contract mix with lower gross margins as compared to the prior period.

Research and Development

For the six months ended June 30, 2024, research and development expenses were $1.4 million, or 12.5% of revenue as compared to $1.2 million, or 8.4% for the six months ended June 30, 2023, an increase of $0.2 million or 21.4%. The increase in 2024 was the result of lower costs allocated to cost of revenue and a recruitment fee for a new engineer in the current year period.

General engineering support and expenses related to the development of more standardized products and value-added development of existing products are reflected as part of research and development expense. General engineering support and expenses are charged to costs of goods sold when work is performed directly on a customer order.

Selling

Selling expenses were $0.8 million or 7.5% of the revenue for the six months ended June 30, 2024 as compared to $0.8 million or 6.2% for the six months ended June 30, 2023. There were no significant changes in selling expenses as compared to the prior period.

General and Administrative

General and administrative expenses for the six months ended June 30, 2024 were $2.7 million or 24.3% of revenue compared to $3.0 million or 21.5% of revenue for the six months ended June 30, 2023, a decrease of $0.2 million. The decrease in expenses was principally due to lower salaries of $0.1 million due to sale of Tantaline, lower bonuses and commissions of $0.1 million and lower professional fees of $0.1 million, offset by higher stock-based compensation expense of $0.1 million.

Loss on disposition of Tantaline

This item represents the net loss on the sale of our Tantaline subsidiary including professional fees.

Impairment Charge

This item represents the loss on the impairment of certain assets of MesoScribe based on the decision to dispose of the subsidiary.

28

Other Income (Expense), Net

Other income (expense), net was $0.3 million for both six month periods ended June 30, 2024 and 2023. Other income is principally interest income on treasury bills.

Income Taxes

We continue to evaluate the potential utilization of our deferred tax asset, which has been fully reserved for, on a quarterly basis, by reviewing our economic models, including projections of future operating results.

Liquidity and Capital Resources

As of June 30, 2024, aggregate working capital was $12.7 million as compared to aggregate working capital of $14.3 million at December 31, 2023. Cash and cash equivalents at June 30, 2024 and December 31, 2023 were $10.0 million and $14.0 million, respectively.

Net cash used in operating activities for the six months ended June 30, 2024 was $3.8 million. This decrease was principally due to the net loss of $2.2 million, an increase in accounts receivable of $3.0 million, offset by an increase in accounts payable of $0.4 million and non-cash items of $0.8 million.

Net cash used in investing activities for the three months ended June 30, 2024 consisted of capital expenditures of $0.2 million related to purchases of equipment, building improvements and software.

Net cash used in financing activities for the three months ended June 30, 2024 consisted of repayments of $40,000 for an equipment loan.

We believe that our cash and cash equivalent positions and our projected cash flow from operations will be sufficient to meet our working capital and capital expenditure requirements for the next twelve months from the filing of this Form 10-Q. We will continue to assess our operations and take actions anticipated to maintain our operating cash to support the working capital needs.

Critical Accounting Estimates

This discussion and analysis of the Company’s financial condition and results of operations is based on the Company’s consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America, or U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods. In accordance with U.S. GAAP, the Company bases its estimates on historical experience and on various other assumptions the Company believes are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

29

We consider an accounting estimate to be critical if: (1) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (2) changes in the estimate that are reasonably likely to occur from period to period, or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations.

We believe that of our significant accounting policies, which are described in the notes to the consolidated financial statements, the following accounting policies involve a greater degree of judgments, estimates and assumptions and are considered critical accounting estimates.

Revenue Recognition

We design, manufacture, and sell custom chemical vapor deposition equipment through contractual agreements. These system sales require us to deliver functioning equipment that is generally completed within two to eighteen months from commencement of order acceptance. We recognize revenue over time by using an input method based on costs incurred as it depicts our progress toward satisfaction of the performance obligation. Under this method, revenue arising from fixed price contracts is recognized as work is performed based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligations.

Incurred costs include all direct material and labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs and depreciation costs. Contract material costs are included in incurred costs when the project materials have been purchased or moved to work-in-process as required by the project’s engineering design. Cost based input methods of revenue recognition require us to make estimates of costs 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, we recognize the entire estimated loss in the period the loss becomes known and can be reasonably estimated.

There exist many inherent risks and uncertainties in estimating revenues, expenses and progress toward completion, particularly on larger or longer-term contracts. Changes in estimates of the total sales, related costs, and progress toward completion on such contracts may significantly impact the estimated gross margins, or losses may need to be recognized in future periods. Any such resulting changes in margins or contract losses could be material to our results of operations and financial condition.

30

Inventory Valuation

Inventories (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. Obsolete inventory or inventory in excess of management’s estimated usage requirement is written down to its estimated net realizable value if less than cost. The Company evaluates usage requirements by analyzing historical usage, anticipated demand, alternative uses of materials, and other qualitative factors. Unanticipated changes in demand for the Company’s products may require a write down of inventory, which would be reflected in cost of sales in the period the revision is made. Any such charge could be material to our results of operations and financial condition.

Long-Lived Assets

Long-lived assets consist primarily of property, plant and equipment. Long-lived assets are reviewed for impairment whenever events or circumstances indicate their carrying value may not be recoverable. When such events or circumstances arise, an estimate of the future undiscounted cash flows produced by the asset, or the appropriate grouping of assets, is compared to the asset’s carrying value to determine if impairment exists pursuant to the requirements of ASC 360-10-35, “Impairment or Disposal of Long-Lived Assets.” If the asset is determined to be impaired, the impairment loss is measured on the excess of it carrying value over its fair value. Assets to be disposed of are reported at the lower of their carrying value or net realizable value. In the future, if we determine that our long-lived assets are impaired, we would be required to recognize a charge in our financial statements at the time of such determination. Any such charge could be material to our results of operations and financial condition.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4.

Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 13d-15(e) under the Exchange Act of 1934, as amended, (the “Exchange Act”)). As required by Rule 13a-15(b) under the Exchange Act, our management, under the direction of our Chief Executive Officer and Chief Financial Officer, reviewed and performed an evaluation of the effectiveness of design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q (the “Report”).

Based on that review and evaluation, our Chief Executive Officer and Chief Financial Officer, along with others in our management, have determined that as of the end of the period covered by this Report on Form 10-Q the disclosure controls and procedures were effective to provide reasonable assurance that such information is accumulated and communicated to our management, including our principal executive and financial officers, as appropriate to allow timely decisions regarding disclosures.

Changes in Internal Controls

There were no changes in our internal controls over financial reporting as defined in Rule 13a-15(f) or Rule 15d-15(f) under the Exchange Act that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the internal controls over financial reporting.

Limitations on the Effectiveness of Controls

We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control systems are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

31

CVD EQUIPMENT CORPORATION

PART II

OTHER INFORMATION

Item 1.

Legal Proceedings.

None.

Item 1A.

Risk Factors.

There have been no other material changes to the risk factors disclosed in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 28, 2024.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3.

Defaults Upon Senior Securities.

None.

Item 4.

Mine Safety Disclosures.

Not applicable.

Item 5.

Other Information.

None.

Item 6.	Exhibits

31.1*	Certification of Emmanuel Lakios, Chief Executive Officer, dated August 13, 2024

31.2*	Certification of Richard Catalano, Chief Financial Officer, dated August 13, 2024

32.1*	Certification of Emmanuel Lakios, Chief Executive Officer, dated August 13, 2024, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2*	Certification of Richard Catalano, Chief Financial Officer, dated August 13, 2024, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.1**	Inline XBRL Instance.

101.SCH**	Inline XBRL Taxonomy Extension Schema.

101.CAL**	Inline XBRL Taxonomy Extension Calculation.

101.DEF**	Inline XBRL Taxonomy Extension Definition.

101.LAB**	Inline XBRL Taxonomy Extension Labels.

101.PRE**	Inline XBRL Taxonomy Extension Presentation.

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

* Filed herewith.

** Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not to be filed or part of a registration statement of prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under these sections.

32

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, this 13^th day of August 2024.

	CVD EQUIPMENT CORPORATION

	By:	/s/ Emmanuel Lakios
		Emmanuel Lakios
		President and Chief Executive Officer
		(Principal Executive Officer)

	By:	/s/ Richard Catalano
		Richard Catalano
		Executive Vice President and
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

33

Exhibit 31.1

Certifications of Principal Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Emmanuel Lakios, certify that:

	1.	I have reviewed this quarterly report on Form 10-Q of CVD Equipment Corporation;

	2.	Based upon my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

	3.	Based upon my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

	4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b.	Designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrants’ board of directors (or persons performing the equivalent functions):

	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: August 13, 2024

/s/ Emmanuel Lakios
President and Chief Executive Officer

Exhibit 31.2

Certifications of Principal Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Richard Catalano, certify that:

	1.	I have reviewed this quarterly report on Form 10-Q of CVD Equipment Corporation;

	2.	Based upon my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

	3.	Based upon my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

	4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b.	Designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrants’ board of directors (or persons performing the equivalent functions):

	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Dated: August 13, 2024

/s/ Richard Catalano
Richard Catalano
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)

Exhibit 32.1

Certification of Principal Executive Officer

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

I, Emmanuel Lakios, President and Chief Executive Officer of CVD Equipment Corporation, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge, the quarterly report on Form 10-Q for the period ending June 30, 2024 of CVD Equipment Corporation (the “Form 10-Q”) fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934 and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of CVD Equipment Corporation.

Dated: August 13, 2024	/s/ Emmanuel Lakios
	Emmanuel Lakios
	President and Chief Executive Officer
	(Principal Executive Officer)

Exhibit 32.2

Certification of Principal Financial Officer

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

I, Richard Catalano, Chief Financial Officer of CVD Equipment Corporation, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge, the quarterly report on Form 10-Q for the period ending June 30, 2024 of CVD Equipment Corporation (the “Form 10-Q”) fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934 and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of CVD Equipment Corporation.

Dated: August 13, 2024	/s/ Richard Catalano
	Richard Catalano
	Executive Vice President and
	Chief Financial Officer
	(Principal Financial Officer)

Cover - $ / shares	6 Months Ended
Cover - $ / shares	Jun. 30, 2024	Aug. 13, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2024
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--12-31
Entity File Number	1-16525
Entity Registrant Name	CVD EQUIPMENT CORPORATION
Entity Central Index Key	0000766792
Entity Tax Identification Number	11-2621692
Entity Incorporation, State or Country Code	NY
Entity Address, Address Line One	355 South Technology Drive
Entity Address, City or Town	Central Islip
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	11722
City Area Code	(631)
Local Phone Number	981-7081
Title of 12(b) Security	Common Stock
Trading Symbol	CVV
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		6,881,838
Entity Listing, Par Value Per Share	$ 0.01

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Current assets
Cash and cash equivalents	$ 10,031	$ 14,025
Accounts receivable, net of allowance for credit losses	4,951	1,906
Contract assets	1,554	1,604
Inventories	4,658	4,454
Other current assets	592	852
Total current assets	21,786	22,841
Property, plant and equipment, net	12,041	12,166
Other assets	18	18
Total assets	33,845	35,025
Current liabilities
Accounts payable	1,601	1,203
Accrued expenses	1,736	1,765
Current maturities of long-term debt	84	81
Contract liabilities	5,098	4,908
Deposit from purchaser of MesoScribe assets-Note 11	597	597
Total current liabilities	9,116	8,554
Long-term debt, net of current portion	225	268
Total liabilities	9,341	8,822
Stockholders’ equity:
Common stock - $0.01 par value – 20,000,000 shares authorized; issued and outstanding 6,825,338 at June 30, 2024 and 6,824,511 at December 31, 2023	68	68
Additional paid-in capital	29,229	28,695
Accumulated deficit	(4,793)	(2,560)
Total stockholders’ equity	24,504	26,203
Total liabilities and stockholders’ equity	$ 33,845	$ 35,025

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	20,000,000	20,000,000
Common stock, shares issued	6,825,338	6,824,511
Common stock, shares outstanding	6,825,338	6,824,511

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Statement [Abstract]
Revenue	$ 6,345	$ 5,069	$ 11,267	$ 13,764
Cost of revenue	4,736	3,681	8,799	9,943
Gross profit	1,609	1,388	2,468	3,821
Operating expenses
Research and development	665	559	1,410	1,161
Selling and shipping	426	428	845	847
General and administrative	1,416	1,360	2,739	2,960
Loss on disposition of Tantaline		162		162
Impairment charge		111		111
Total operating expenses	2,507	2,620	4,994	5,241
Operating loss	(898)	(1,232)	(2,526)	(1,420)
Other income (expense):
Interest income	145	107	302	227
Interest expense	(4)	(6)	(10)	(12)
Foreign exchange income		15		43
Other income (expense)	(4)	13	1	20
Total other income, net	137	129	293	278
Loss before income tax	(761)	(1,103)	(2,233)	(1,142)
Income tax expense		10		11
Net loss	$ (761)	$ (1,113)	$ (2,233)	$ (1,153)
Loss per common share - basic	$ (0.11)	$ (0.16)	$ (0.33)	$ (0.17)
Loss per common share - diluted	$ (0.11)	$ (0.16)	$ (0.33)	$ (0.17)
Weighted average common shares
Basic	6,816,956	6,778,754	6,813,127	6,776,035
Diluted	6,816,956	6,778,754	6,813,127	6,776,035

Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance at Dec. 31, 2022	$ 67	$ 27,712	$ 1,620	$ 29,399
Balance, shares at Dec. 31, 2022	6,760,938
Net loss			(1,153)	(1,153)
Stock-based compensation		397		397
Exercise of stock options and issuance of shares		76		76
Exercise of stock options and issuance of shares, shares	18,125
Balance at Jun. 30, 2023	$ 67	28,185	467	28,719
Balance, shares at Jun. 30, 2023	6,779,063
Balance at Mar. 31, 2023	$ 67	27,920	1,580	29,567
Balance, shares at Mar. 31, 2023	6,778,438
Net loss			(1,113)	(1,113)
Stock-based compensation		262		262
Exercise of stock options and issuance of shares		3		3
Exercise of stock options and issuance of shares, shares	625
Balance at Jun. 30, 2023	$ 67	28,185	467	28,719
Balance, shares at Jun. 30, 2023	6,779,063
Balance at Dec. 31, 2023	$ 68	28,695	(2,560)	26,203
Balance, shares at Dec. 31, 2023	6,824,511
Net loss			(2,233)	(2,233)
Stock-based compensation		534		534
Stock-based compensation, shares	827
Balance at Jun. 30, 2024	$ 68	29,229	(4,793)	24,504
Balance, shares at Jun. 30, 2024	6,825,338
Balance at Mar. 31, 2024	$ 68	28,962	(4,032)	24,998
Balance, shares at Mar. 31, 2024	6,824,511
Net loss			(761)	(761)
Stock-based compensation		267		267
Stock-based compensation, shares	827
Balance at Jun. 30, 2024	$ 68	$ 29,229	$ (4,793)	$ 24,504
Balance, shares at Jun. 30, 2024	6,825,338

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Cash flows from operating activities:
Net loss	$ (2,233)	$ (1,153)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	534	397
Depreciation and amortization	307	392
Loss on disposition of Tantaline		162
Impairment charge		111
Changes in assets and liabilities, net of effects of disposition of Tantaline:
Accounts receivable	(3,045)	1,592
Contract assets	50	(781)
Inventories	(204)	(1,616)
Other current assets	260	231
Accounts payable	398	(57)
Accrued expenses	(29)	(770)
Contract liabilities	190	659
Net cash used in operating activities	(3,772)	(833)
Cash flows from investing activities:
Purchases of property and equipment	(182)	(225)
Net cash used in connection with disposition of Tantaline		(312)
Net cash used in investing activities	(182)	(537)
Cash flows from financing activities
Payments of long-term debt	(40)	(38)
Proceeds from exercise of stock options		76
Net cash (used in) provided by financing activities	(40)	38
Net decrease in cash and cash equivalents	(3,994)	(1,332)
Cash and cash equivalents at beginning of period	14,025	14,365
Cash and cash equivalents at end of period	10,031	13,033
Supplemental disclosure of cash flow information:
Income taxes paid	3	11
Interest paid	$ 10	$ 12

BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

BASIS OF PRESENTATION

NOTE 1:

BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements for CVD Equipment Corporation and Subsidiaries (collectively “the Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. They do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary in order to make the interim financials not misleading have been included and all such adjustments are of a normal recurring nature. The operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results that can be expected for the year ending December 31, 2024.

The condensed consolidated balance sheet as of December 31, 2023 has been derived from the audited consolidated financial statements at such date, as filed on Form 10-K with the SEC on March 28, 2024, but does not contain all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with that report.

All material intercompany balances and transactions have been eliminated in consolidation.

Reclassifications

Certain reclassifications have been made to the prior period condensed consolidated financial statements to conform to the current period presentation. These reclassifications had no effect on net loss.

Liquidity

At June 30, 2024, the Company had $10.0 million in cash and cash equivalents. The Company anticipates that the existing cash and cash equivalents balance together with potential future income from operations, collections of existing accounts receivable, revenue from its existing backlog of products as of this filing date, the sale of inventory on hand, deposits and down payments against significant orders will be adequate to meet its working capital and capital equipment requirements, and its anticipated cash needs over the next 12 months from the date of issuance of these condensed consolidated financial statements

Notes to Condensed Consolidated Financial Statements

(Unaudited)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition

In 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; (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:

Over time

The 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 acceptance. For systems sales that meet the criteria to recognize revenue over time, the Company recognizes revenue over time by using an input method based on costs incurred as it depicts the Company’s progress toward satisfaction of the performance obligation. For system sales that do not meet the criteria to recognize revenue over time based on the contract provisions, the Company recognizes revenue based on point in time as discussed below.

Under this method, revenue arising from fixed price contracts is recognized as work is performed based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligations. Incurred costs include all direct material and labor costs and those indirect costs related to contract performance, such as supplies, tools, repairs and depreciation costs. Contract material costs are included in incurred costs when the project materials have been purchased or moved to work in process, and installed, as required by the project’s engineering design. Cost based input methods of revenue recognition require the Company to make estimates of costs 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 and six months ended June 30, 2024 and 2023.

The 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 milestones.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Under ASC 606, payments received from customers in excess of revenue recognized to-date results in a contract liability. These contract liabilities are not considered to represent a significant financing component of the contract because we believe these cash advances and deposits are generally used to meet working capital demands which can be higher in the earlier stages of a contract. Also, advanced payments and deposits provide us with some measure of assurance that the customer will perform on its obligations under the contract.

Contract assets include unbilled amounts typically resulting from system sales under contracts and represents revenue recognized that exceeds the amount billed to the customer.

Contract liabilities include advance payments and billings in excess of revenue recognized. The Company typically receives down payments upon receipt of orders and progress payments as the system is manufactured.

Contract assets and contract liabilities are classified as current as these contracts in progress are expected to be substantially completed within the next twelve months.

Point in time

For non-system sales of products and services, revenue is recognized at the point in time when control of the promised products or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products or services (the transaction price). A performance obligation is a promise in a contract to transfer a distinct product or service to a customer and is the unit of account under ASC 606, “Revenue from Contracts with Customers”.

For 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, 2024 and 2023, all system equipment sales were recorded over time by using an input method except for one system equipment contract in the second quarter of 2023 where the revenue was to be recognized at the point in time when the equipment was transferred to the customer. Subsequent to June 30, 2023, this one system equipment contract was modified such that the revenue under this contract would be recognized over time using an input method based on the revised contract provisions and the fact that the equipment does not have an alternative use.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Inventories

Inventories (raw materials, work-in-process and finished goods) are valued at the lower of cost (determined on the first-in, first-out method) or net realizable value. Work-in-process and finished goods inventory reflect all accumulated production costs, which are comprised of direct production costs and overhead, and is reduced by amounts recorded in cost of sales as the related revenue is recognized. Indirect costs relating to long-term contracts, which include expenses such as general and administrative, are charged to expense as incurred and are not included in our cost of sales or work-in-process and finished goods inventory.

Obsolete inventory or inventory in excess of management’s estimated usage requirement is written down to its estimated net realizable value if less than cost. The Company evaluates usage requirements by analyzing historical usage, anticipated demand, alternative uses of materials and other qualitative factors. Unanticipated changes in demand for the Company’s products may require a write down of inventory, which would be reflected in cost of sales in the period the revision is made.

Product Warranty

The Company typically provides standard warranty coverage on its systems for one year from the date of final acceptance or fifteen months from the date of shipment by providing labor and parts necessary to repair the systems during the warranty period. The Company records the estimated warranty cost when revenue is recognized on the related system. Warranty cost is included in “Cost of revenue” in the condensed consolidated statements of operations. The estimated warranty cost is based on the Company’s historical cost. The Company updates its warranty estimates based on actual costs incurred.

Recent Accounting Standards

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this update expand annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. This update is effective for our annual report for fiscal year 2025, and interim periods thereafter, with early adoption permitted, and will be applied retrospectively to all prior periods presented in the financial statements. We are currently evaluating the impact of this ASU on our Consolidated Financial Statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures. The amendments further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. This ASU is effective for our annual report for fiscal year 2026, with early adoption permitted, and should be applied either prospectively or retrospectively. We are currently evaluating the timing of adoption and impact of this ASU on our Consolidated Financial Statements and related disclosures.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

The Company believes there is no additional new accounting guidance adopted, but not yet effective, that is relevant to the readers of our financial statements. However, there are numerous new proposals under development which, if and when enacted, may have a significant impact on our financial reporting.

CONCENTRATION OF CREDIT RISK

6 Months Ended

Jun. 30, 2024

Risks and Uncertainties [Abstract]

CONCENTRATION OF CREDIT RISK

NOTE 3: CONCENTRATION OF CREDIT RISK

Cash and cash equivalents

The Company had cash and cash equivalents of $10.0 million and $14.0 million at June 30, 2024 and December 31, 2023, respectively. The Company invests excess cash in U.S. treasury bills, certificates of deposit or deposit accounts, all with maturities of less than three months. Cash equivalents consisting of U.S. treasury bills were $9.8 million and $12.1 million at June 30, 2024 and December 31, 2023, respectively.

The Company places most of its temporary cash investments in the United States with financial institutions, which from time to time may exceed the Federal Deposit Insurance Corporation limit. The amount at risk at June 30, 2024 and December 31, 2023 was $0.1 million and $1.5 million, respectively.

Accounts receivable

The Company sells products and services to various companies across several industries in the ordinary course of business. The Company performs ongoing credit evaluations to assess the probability of accounts receivable collection based on a number of factors, including past transaction experience, evaluation of their credit history and review of the invoicing terms of the contract to determine the financial strength of its customers.

Accounts receivable are presented net of an allowance for credit losses of approximately $36,000 at both June 30, 2024 and December 31, 2023. The allowance is based on prior experience and management’s evaluation of the collectability of accounts receivable. 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.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 3: CONCENTRATION OF CREDIT RISK (continued)

At June 30, 2024, the accounts receivable balance included amounts from two customers that represented 35.7% and 10.5% of total accounts receivable. As of December 31, 2023, the accounts receivable balance includes amounts from three customers that represented 37.6%, 13.0% and 12.8% of total accounts receivable.

Sales concentration

Revenue from a single customer in any one period can exceed 10% of our total revenues. During the three months ended June 30, 2024, one customer exceeded 10% of revenues, representing 35.2% of revenues, and during the six months ended June 30, 2024, one customer exceeded 10%, representing 32.8% of revenues.

During the three months ended June 30, 2023, four customers exceeded 10% of revenues, representing 16.1%, 15.6%, 11.0% and 10.2% of revenues, and during the six months ended June 30, 2023, two customers exceeded 10%, representing 21.0% and 15.8% of revenues.

REVENUE RECOGNITION

6 Months Ended

Jun. 30, 2024

Revenue from Contract with Customer [Abstract]

REVENUE RECOGNITION

NOTE 4: REVENUE RECOGNITION

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

SCHEDULE OF DISAGGREGATION OF REVENUE

		Over time				Point in time				Total
		Three months ended June 30, 2024
		Over time				Point in time				Total
Energy		$	239			$	12			$	251
Aerospace			2,694				179				2,873
Industrial			1,542				300				1,842
Research			1,174				205				1,379
Total		$	5,649			$	696			$	6,345

		Over time				Point in time				Total
		Three months ended June 30, 2023
		Over time				Point in time				Total
Energy		$	760			$	38			$	798
Aerospace			-				604				604
Industrial			1,085				915				2,000
Research			1,184				483				1,667
Total		$	3,029			$	2,040			$	5,069

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 4: REVENUE RECOGNITION (continued)

		Over time				Point in time				Total
		Six months ended June 30, 2024
		Over time				Point in time				Total
Energy		$	239			$	30			$	269
Aerospace			4,496				494				4,990
Industrial			2,801				774				3,575
Research			2,035				398				2,433
Total		$	9,571			$	1,696			$	11,267

		Over time				Point in time				Total
		Six months ended June 30, 2023
		Over time				Point in time				Total
Energy		$	3,276			$	52			$	3,328
Aerospace			264				855				1,119
Industrial			4,756				1,127				5,883
Research			2,456				978				3,434
Total		$	10,752			$	3,012			$	13,764

The energy market includes customers involved in the manufacture of silicon carbide wafers and batteries. Aerospace market includes customers that manufacture aircraft engines. Industrial end market consists of various end customers in diverse industries. Research market principally represents customers such as universities and other research institutions.

The Company has unrecognized contract revenue of approximately $21.6 million at June 30, 2024, which it expects to substantially recognize as revenue within the next twelve months based on over time revenue recognition.

Judgment is required to evaluate assumptions including the amount of net contract revenues and the total estimated costs to determine our progress towards contract completion and to calculate the corresponding amount of revenue to recognize.

Changes 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 condensed consolidated statements of operations.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 4: REVENUE RECOGNITION (continued)

Contract assets and liabilities

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


Costs incurred on contracts in progress		$	11,009
Estimated earnings			5,609
			16,618
Billings to date			(19,589	)
Net cost in excess of billings			(2,971	)

Deferred revenue related to non-system contracts			(573	)
		$	(3,544	)
Included in accompanying condensed consolidated balance sheet as of June 30, 2024 under the following captions (in thousands):
Contract assets		$	1,554
Contract liabilities		$	5,098

Of the contract liability balances at December 31, 2023 and 2022 of $4.6 million and $4.1 million, respectively, $2.7 million and $2.6 million was recognized as revenue during the six months ended June 30, 2024 and 2023, respectively.

INVENTORIES

6 Months Ended

Jun. 30, 2024

Inventory Disclosure [Abstract]

NOTE 5: INVENTORIES

SCHEDULE OF INVENTORIES

Inventories consist of:
		June 30, 2024				December 31, 2023

Raw materials		$	2,231			$	2,351
Work-in-process			1,612				1,248
Finished goods			815				855
Total		$	4,658			$	4,454

Included in our inventories (raw materials, work-in-process and finished goods) are approximately $1.8 million related to PVT 150 systems that were purchased in anticipation of future orders. In the event that such orders do not materialize, the Company would incur a charge to reduce the carrying value of such inventory to market. Such a charge may be material to the Company’s financial position and future results of operations.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

LONG-TERM DEBT

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

NOTE 6: LONG-TERM DEBT

In September 2022, the Company entered into a loan agreement to fund the acquisition of machinery. The loan amount of $432,000, is payable in 60 equal monthly installments of $8,352 and secured by equipment. The interest rate is 6%.

EARNINGS PER SHARE

6 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

EARNINGS PER SHARE

NOTE 7: EARNINGS PER SHARE

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

		2024				2023				2024				2023
		Three months ended June 30,								Six months ended June 30,
		2024				2023				2024				2023

Basic weighted average common shares outstanding			6,816,956				6,778,754				6,813,127				6,776,035
Dilutive effect of options and unvested restricted stock			-				-				-				-
Diluted weighted average shares outstanding			6,816,956				6,778,754				6,813,127				6,776,035

At June 30, 2024, stock options to purchase 838,125 shares of common stock were outstanding and 416,875 were exercisable. At June 30, 2023, stock options to purchase 599,500 shares of common stock were outstanding and 297,500 were exercisable.

For the three and six months ended June 30, 2024 and 2023, all stock options were excluded in the computation of diluted earnings per share because their effect was antidilutive.

STOCK-BASED COMPENSATION EXPENSE

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION EXPENSE

NOTE 8: STOCK-BASED COMPENSATION EXPENSE

The Company recorded stock-based compensation for the three and six months ended June 30, 2024 and 2023, respectively, that were included in the following line items in our condensed consolidated statements of operations (in thousands):

		2024				2023				2024				2023
		Three months ended June 30,								Six months ended June 30,
		2024				2023				2024				2023

Cost of revenue		$	38			$	41			$	76			$	60
Research and development			47				45				94				65
Selling			27				31				54				42
General and administrative			155				145				310				230
Total		$	267			$	262			$	534			$	397

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 8: STOCK-BASED COMPENSATION EXPENSE (continued)

Stock-based compensation expense for three months ended June 30, 2024 and 2023 included $57,423 and 40,000, respectively, and for the six month periods June 30, 2024 and 2023 included $103,736 and $80,000, respectively, related to restricted stock awards that directors are entitled to receive pursuant to the Director Compensation Plan. Under this plan each of the Company’s independent directors is entitled to an Annual Equity Retainer in the amount of $40,000, to be granted on the date of the Company’s annual meeting of shareholders.

For the six months ended June 30, 2024, the Company granted 5,000 stock options, vesting 25% per year over four years, with a ten-year life. The Company determined the weighted average fair value of stock options granted was $3.30 and is based upon weighted average assumptions below.

Stock price		$	4.75
Exercise price		$	4.75
Dividend yield			0	%
Expected volatility			77	%
Risk-free interest rate			4.12	%
Expected life (in years)			6.00

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

SCHEDULE OF STOCK OPTIONS AWARDS

						Weighted
		Stock Option				Average
		Awards				Exercise
		(in shares)				Price

Outstanding at January 1, 2024			846,875				8.20
Granted			5,000				4.75
Forfeited			(13,750	)			7.94
Outstanding at June 30, 2024			838,125			$	8.18

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

		Options Outstanding																Options Exercisable
						Weighted				Weighted												Weighted
Exercise						Average				Average												Average
Price		Number				Remaining				Exercise				Intrinsic				Number				Exercise				Intrinsic
Range		Outstanding				Contractual				Price				Value				Exercisable				Price				Value
$4.00-7.00			459,625				7.4			$	4.55			$	-				217,250			$	4.45			$	-
$7.01-10.00			20,000				3.8			$	8.07			$	-				20,000			$	8.07			$	-
$10.01-13.00			130,000				3.2			$	10.62			$	-				122,500			$	10.55			$	-
$13.01-16.00			228,500				8.7			$	14.11			$	-				57,125			$	14.11			$	-

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 8: STOCK-BASED COMPENSATION EXPENSE (continued)

As of June 30, 2024, there was $2.0 million of unrecognized compensation costs related to stock options expected to be recognized over a weighted average period of 1.8 years.

INCOME TAXES

6 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

NOTE 9: INCOME TAXES

As of June 30, 2024 and December 31, 2023, the Company has provided a full valuation allowance against its net deferred tax assets. This was based on management’s assessment, including the last four years of operating losses, that it is more likely than not that the net deferred tax assets may not be realized in the future. Management continues to evaluate for potential utilization of the Company’s 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

6 Months Ended

Jun. 30, 2024

Segment Reporting [Abstract]

SEGMENT REPORTING

NOTE 10: SEGMENT REPORTING

The Company operates through three segments: CVD Equipment, Stainless Design Concepts (“SDC”) and CVD Materials. The CVD Equipment segment manufactures and sells chemical vapor deposition, physical vapor transport and similar equipment. The SDC segment designs and manufactures ultra-high purity gas and chemical delivery control systems. The CVD Materials segment provides material coatings for aerospace, medical, electronic and other applications and is not considered a core business of the Company. The Company evaluates performance based on several factors, of which the primary financial measure is income (loss) before taxes.

The Company’s corporate administration activities are reported in the “Corporate” column. These activities primarily include expenses related to certain corporate officers and support staff, expenses related to the Company’s Board of Directors, stock option expense for options and shares of restricted stock granted to corporate administration employees and board members, certain consulting expenses, investor and shareholder relations activities, and all of the Company’s legal, auditing and professional fees.

Elimination entries included in the “Eliminations” column represent intersegment revenues and cost of revenues that are eliminated in consolidation. Intersegment sales by the SDC segment to the CVD Equipment segment for the three months ended June 30, 2024 and 2023 were $132,000 and $138,000, respectively and $147,000 and $266,000 for the six months ended June 30, 2024 and 2023, respectively. There were no intersegment sales by the CVD Equipment segment to the SDC segment during the three and six months ended June 30, 2024. Intersegment sales by the CVD Equipment segment to the SDC segment for the three months and six months ended June 30, 2023 were $64,000.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 10: SEGMENT REPORTING (continued)

The following table presents certain information regarding the Company’s segments as of and for the three months ended June 30, 2024 and 2023 (in thousands):

SCHEDULE OF SEGMENTS

2024

		CVD Equipment				SDC				CVD Materials				Eliminations				Corporate				Consolidated
Assets		$	29,368			$	4,310			$	222			$	(55	)		$	-			$	33,845

Revenue		$	4,107			$	2,315			$	55			$	(132	)		$	-			$	6,345
Operating (loss) income			(729	)			714				(45	)			(8	)			(830	)			(898	)
Pretax (loss) income			(743	)			714				(45	)			(8	)			(679	)			(761	)
Depreciation and amortization		$	141			$	13			$	-			$	-			$	-			$	154
Purchase of property, plant & equipment		$	101			$	4			$	-			$	-			$	-			$	105

2023

		CVD Equipment				SDC				CVD Materials				Eliminations				Corporate				Consolidated
Assets		$	32,139			$	4,189			$	483			$	(28	)		$	-			$	36,783

Revenue		$	3,134			$	1,795			$	342			$	(202	)		$	-			$	5,069
Operating (loss) income			(445	)			363				*(224)				(28	)			(898	)			(1,232	)
Pretax (loss) income			(445	)			364				*(203)				(28	)			(791	)			(1,103	)
Depreciation and amortization		$	136			$	12			$	79			$	-			$	-			$	227
Purchase of property, plant & equipment		$	78			$	-			$	-			$	-			$	-			$	78

*

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

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 10: SEGMENT REPORTING (continued)

The following table presents certain information regarding the Company’s segments as of and for the six months ended June 30, 2024 and 2023 (in thousands):

2024

		CVD Equipment				SDC				CVD Materials				Eliminations				Corporate				Consolidated

Revenue		$	7,054			$	4,246			$	114			$	(147	)		$	-			$	11,267
Operating (loss) income			(2,173	)			1,346				(71	)			10				(1,638	)			(2,526	)
Pretax (loss) Income			(2,188	)			1,346				(71	)			10				(1,330	)			(2,233	)
Depreciation and amortization		$	283			$	24			$	-			$	-			$	-			$	307
Purchase of property, plant & equipment		$	178			$	4			$	-			$	-			$	-			$	182

2023

		CVD Equipment				SDC				CVD Materials				Eliminations				Corporate				Consolidated

Revenue		$	8,979			$	4,107			$	1,009			$	(331	)		$	-			$	13,764
Operating (loss) income			(267	)			994				(143	)*			(28	)			(1,976	)			(1,420	)
Pretax (loss) Income			(265	)			996				(95	)*			(28	)			(1750	)			(1,142	)
Depreciation and amortization		$	267			$	24			$	101			$	-			$	-			$	392
Purchase of property, plant & equipment		$	215			$	10			$	-			$	-			$	-			$	225

*

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

MESOSCRIBE SUBSIDIARY

6 Months Ended

Jun. 30, 2024

Discontinued Operations and Disposal Groups [Abstract]

MESOSCRIBE SUBSIDIARY

NOTE 11: MESOSCRIBE SUBSIDIARY

On August 8, 2023, the Company entered into a Purchase and License Agreement (the “Agreement”) with a third-party. Pursuant to the Agreement, the Company will sell certain proprietary assets relating to its plasma spray technology and material deposition system and grant a non-exclusive license to use certain of the Company’s related intellectual property as more fully described in the Agreement, for an aggregate purchase price of $0.9 million. The purchase price is payable in several installments and contingent upon certain performance metrics and other milestones.

The Company will continue to fulfill remaining orders for MesoScribe products through the end of 2024 at which time it plans to cease the remaining operations of MesoScribe and dispose of any remaining equipment. During the three and six months ended June 30, 2023, the Company recorded an impairment charge of $0.1 million for certain equipment of MesoScribe based on its decision to cease the remaining operations by the end of 2024.

The Company received payments under the Agreement in the amount of $0.6 million which has been reflected as “deposit from purchaser” in the accompanying consolidated balance sheet as of March 31, 2024 and December 31, 2023. The Company expects the transaction to be completed in 2024 with the acceptance of the equipment by the purchaser.

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

The total assets and total liabilities of the MesoScribe subsidiary were $0.2 million and $0.7 million, respectively, as of both June 30, 2024 and December 31, 2023.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	Jun. 30, 2024
Accounting Policies [Abstract]
Revenue Recognition	Revenue Recognition In 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; (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: Over time The 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 acceptance. For systems sales that meet the criteria to recognize revenue over time, the Company recognizes revenue over time by using an input method based on costs incurred as it depicts the Company’s progress toward satisfaction of the performance obligation. For system sales that do not meet the criteria to recognize revenue over time based on the contract provisions, the Company recognizes revenue based on point in time as discussed below. Under this method, revenue arising from fixed price contracts is recognized as work is performed based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligations. Incurred costs include all direct material and labor costs and those indirect costs related to contract performance, such as supplies, tools, repairs and depreciation costs. Contract material costs are included in incurred costs when the project materials have been purchased or moved to work in process, and installed, as required by the project’s engineering design. Cost based input methods of revenue recognition require the Company to make estimates of costs 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 and six months ended June 30, 2024 and 2023. The 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 milestones. Notes to Condensed Consolidated Financial Statements (Unaudited) NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Under ASC 606, payments received from customers in excess of revenue recognized to-date results in a contract liability. These contract liabilities are not considered to represent a significant financing component of the contract because we believe these cash advances and deposits are generally used to meet working capital demands which can be higher in the earlier stages of a contract. Also, advanced payments and deposits provide us with some measure of assurance that the customer will perform on its obligations under the contract. Contract assets include unbilled amounts typically resulting from system sales under contracts and represents revenue recognized that exceeds the amount billed to the customer. Contract liabilities include advance payments and billings in excess of revenue recognized. The Company typically receives down payments upon receipt of orders and progress payments as the system is manufactured. Contract assets and contract liabilities are classified as current as these contracts in progress are expected to be substantially completed within the next twelve months. Point in time For non-system sales of products and services, revenue is recognized at the point in time when control of the promised products or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products or services (the transaction price). A performance obligation is a promise in a contract to transfer a distinct product or service to a customer and is the unit of account under ASC 606, “Revenue from Contracts with Customers”. For 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, 2024 and 2023, all system equipment sales were recorded over time by using an input method except for one system equipment contract in the second quarter of 2023 where the revenue was to be recognized at the point in time when the equipment was transferred to the customer. Subsequent to June 30, 2023, this one system equipment contract was modified such that the revenue under this contract would be recognized over time using an input method based on the revised contract provisions and the fact that the equipment does not have an alternative use. Notes to Condensed Consolidated Financial Statements (Unaudited) NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Inventories	Inventories Inventories (raw materials, work-in-process and finished goods) are valued at the lower of cost (determined on the first-in, first-out method) or net realizable value. Work-in-process and finished goods inventory reflect all accumulated production costs, which are comprised of direct production costs and overhead, and is reduced by amounts recorded in cost of sales as the related revenue is recognized. Indirect costs relating to long-term contracts, which include expenses such as general and administrative, are charged to expense as incurred and are not included in our cost of sales or work-in-process and finished goods inventory. Obsolete inventory or inventory in excess of management’s estimated usage requirement is written down to its estimated net realizable value if less than cost. The Company evaluates usage requirements by analyzing historical usage, anticipated demand, alternative uses of materials and other qualitative factors. Unanticipated changes in demand for the Company’s products may require a write down of inventory, which would be reflected in cost of sales in the period the revision is made.
Product Warranty	Product Warranty The Company typically provides standard warranty coverage on its systems for one year from the date of final acceptance or fifteen months from the date of shipment by providing labor and parts necessary to repair the systems during the warranty period. The Company records the estimated warranty cost when revenue is recognized on the related system. Warranty cost is included in “Cost of revenue” in the condensed consolidated statements of operations. The estimated warranty cost is based on the Company’s historical cost. The Company updates its warranty estimates based on actual costs incurred.
Recent Accounting Standards	Recent Accounting Standards In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this update expand annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. This update is effective for our annual report for fiscal year 2025, and interim periods thereafter, with early adoption permitted, and will be applied retrospectively to all prior periods presented in the financial statements. We are currently evaluating the impact of this ASU on our Consolidated Financial Statements and related disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures. The amendments further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. This ASU is effective for our annual report for fiscal year 2026, with early adoption permitted, and should be applied either prospectively or retrospectively. We are currently evaluating the timing of adoption and impact of this ASU on our Consolidated Financial Statements and related disclosures. Notes to Condensed Consolidated Financial Statements (Unaudited) NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) The Company believes there is no additional new accounting guidance adopted, but not yet effective, that is relevant to the readers of our financial statements. However, there are numerous new proposals under development which, if and when enacted, may have a significant impact on our financial reporting.

REVENUE RECOGNITION (Tables)

6 Months Ended

Jun. 30, 2024

Revenue from Contract with Customer [Abstract]

SCHEDULE OF DISAGGREGATION OF REVENUE

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

SCHEDULE OF DISAGGREGATION OF REVENUE

		Over time				Point in time				Total
		Three months ended June 30, 2024
		Over time				Point in time				Total
Energy		$	239			$	12			$	251
Aerospace			2,694				179				2,873
Industrial			1,542				300				1,842
Research			1,174				205				1,379
Total		$	5,649			$	696			$	6,345

		Over time				Point in time				Total
		Three months ended June 30, 2023
		Over time				Point in time				Total
Energy		$	760			$	38			$	798
Aerospace			-				604				604
Industrial			1,085				915				2,000
Research			1,184				483				1,667
Total		$	3,029			$	2,040			$	5,069

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 4: REVENUE RECOGNITION (continued)

		Over time				Point in time				Total
		Six months ended June 30, 2024
		Over time				Point in time				Total
Energy		$	239			$	30			$	269
Aerospace			4,496				494				4,990
Industrial			2,801				774				3,575
Research			2,035				398				2,433
Total		$	9,571			$	1,696			$	11,267

		Over time				Point in time				Total
		Six months ended June 30, 2023
		Over time				Point in time				Total
Energy		$	3,276			$	52			$	3,328
Aerospace			264				855				1,119
Industrial			4,756				1,127				5,883
Research			2,456				978				3,434
Total		$	10,752			$	3,012			$	13,764

SCHEDULE OF COST AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS

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


Costs incurred on contracts in progress		$	11,009
Estimated earnings			5,609
			16,618
Billings to date			(19,589	)
Net cost in excess of billings			(2,971	)

Deferred revenue related to non-system contracts			(573	)
		$	(3,544	)
Included in accompanying condensed consolidated balance sheet as of June 30, 2024 under the following captions (in thousands):
Contract assets		$	1,554
Contract liabilities		$	5,098

Of the contract liability balances at December 31, 2023 and 2022 of $4.6 million and $4.1 million, respectively, $2.7 million and $2.6 million was recognized as revenue during the six months ended June 30, 2024 and 2023, respectively.

INVENTORIES (Tables)

6 Months Ended

Jun. 30, 2024

Inventory Disclosure [Abstract]

SCHEDULE OF INVENTORIES

SCHEDULE OF INVENTORIES

Inventories consist of:
		June 30, 2024				December 31, 2023

Raw materials		$	2,231			$	2,351
Work-in-process			1,612				1,248
Finished goods			815				855
Total		$	4,658			$	4,454

EARNINGS PER SHARE (Tables)

6 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

SCHEDULE OF BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

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

		2024				2023				2024				2023
		Three months ended June 30,								Six months ended June 30,
		2024				2023				2024				2023

Basic weighted average common shares outstanding			6,816,956				6,778,754				6,813,127				6,776,035
Dilutive effect of options and unvested restricted stock			-				-				-				-
Diluted weighted average shares outstanding			6,816,956				6,778,754				6,813,127				6,776,035

STOCK-BASED COMPENSATION EXPENSE (Tables)

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

SCHEDULE OF STOCK BASED COMPENSATION EXPENSE

		2024				2023				2024				2023
		Three months ended June 30,								Six months ended June 30,
		2024				2023				2024				2023

Cost of revenue		$	38			$	41			$	76			$	60
Research and development			47				45				94				65
Selling			27				31				54				42
General and administrative			155				145				310				230
Total		$	267			$	262			$	534			$	397

SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS

Stock price		$	4.75
Exercise price		$	4.75
Dividend yield			0	%
Expected volatility			77	%
Risk-free interest rate			4.12	%
Expected life (in years)			6.00

SCHEDULE OF STOCK OPTIONS AWARDS

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

SCHEDULE OF STOCK OPTIONS AWARDS

						Weighted
		Stock Option				Average
		Awards				Exercise
		(in shares)				Price

Outstanding at January 1, 2024			846,875				8.20
Granted			5,000				4.75
Forfeited			(13,750	)			7.94
Outstanding at June 30, 2024			838,125			$	8.18

SCHEDULE OF OUTSTANDING AND EXERCISABLE OPTIONS RANGES OF EXERCISE PRICES

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

		Options Outstanding																Options Exercisable
						Weighted				Weighted												Weighted
Exercise						Average				Average												Average
Price		Number				Remaining				Exercise				Intrinsic				Number				Exercise				Intrinsic
Range		Outstanding				Contractual				Price				Value				Exercisable				Price				Value
$4.00-7.00			459,625				7.4			$	4.55			$	-				217,250			$	4.45			$	-
$7.01-10.00			20,000				3.8			$	8.07			$	-				20,000			$	8.07			$	-
$10.01-13.00			130,000				3.2			$	10.62			$	-				122,500			$	10.55			$	-
$13.01-16.00			228,500				8.7			$	14.11			$	-				57,125			$	14.11			$	-

SEGMENT REPORTING (Tables)

6 Months Ended

Jun. 30, 2024

Segment Reporting [Abstract]

SCHEDULE OF SEGMENTS

The following table presents certain information regarding the Company’s segments as of and for the three months ended June 30, 2024 and 2023 (in thousands):

SCHEDULE OF SEGMENTS

2024

		CVD Equipment				SDC				CVD Materials				Eliminations				Corporate				Consolidated
Assets		$	29,368			$	4,310			$	222			$	(55	)		$	-			$	33,845

Revenue		$	4,107			$	2,315			$	55			$	(132	)		$	-			$	6,345
Operating (loss) income			(729	)			714				(45	)			(8	)			(830	)			(898	)
Pretax (loss) income			(743	)			714				(45	)			(8	)			(679	)			(761	)
Depreciation and amortization		$	141			$	13			$	-			$	-			$	-			$	154
Purchase of property, plant & equipment		$	101			$	4			$	-			$	-			$	-			$	105

2023

		CVD Equipment				SDC				CVD Materials				Eliminations				Corporate				Consolidated
Assets		$	32,139			$	4,189			$	483			$	(28	)		$	-			$	36,783

Revenue		$	3,134			$	1,795			$	342			$	(202	)		$	-			$	5,069
Operating (loss) income			(445	)			363				*(224)				(28	)			(898	)			(1,232	)
Pretax (loss) income			(445	)			364				*(203)				(28	)			(791	)			(1,103	)
Depreciation and amortization		$	136			$	12			$	79			$	-			$	-			$	227
Purchase of property, plant & equipment		$	78			$	-			$	-			$	-			$	-			$	78

*

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

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 10: SEGMENT REPORTING (continued)

The following table presents certain information regarding the Company’s segments as of and for the six months ended June 30, 2024 and 2023 (in thousands):

2024

		CVD Equipment				SDC				CVD Materials				Eliminations				Corporate				Consolidated

Revenue		$	7,054			$	4,246			$	114			$	(147	)		$	-			$	11,267
Operating (loss) income			(2,173	)			1,346				(71	)			10				(1,638	)			(2,526	)
Pretax (loss) Income			(2,188	)			1,346				(71	)			10				(1,330	)			(2,233	)
Depreciation and amortization		$	283			$	24			$	-			$	-			$	-			$	307
Purchase of property, plant & equipment		$	178			$	4			$	-			$	-			$	-			$	182

2023

		CVD Equipment				SDC				CVD Materials				Eliminations				Corporate				Consolidated

Revenue		$	8,979			$	4,107			$	1,009			$	(331	)		$	-			$	13,764
Operating (loss) income			(267	)			994				(143	)*			(28	)			(1,976	)			(1,420	)
Pretax (loss) Income			(265	)			996				(95	)*			(28	)			(1750	)			(1,142	)
Depreciation and amortization		$	267			$	24			$	101			$	-			$	-			$	392
Purchase of property, plant & equipment		$	215			$	10			$	-			$	-			$	-			$	225

*

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

BASIS OF PRESENTATION (Details Narrative) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Accounting Policies [Abstract]
Cash and cash equivalents	$ 10,031	$ 14,025

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Accounting Policies [Abstract]
Contract assets, impairment loss	$ 0	$ 0	$ 0	$ 0
Standard product warranty description			The Company typically provides standard warranty coverage on its systems for one year from the date of final acceptance or fifteen months from the date of shipment by providing labor and parts necessary to repair the systems during the warranty period. The Company records the estimated warranty cost when revenue is recognized on the related system. Warranty cost is included in “Cost of revenue” in the condensed consolidated statements of operations. The estimated warranty cost is based on the Company’s historical cost. The Company updates its warranty estimates based on actual costs incurred.

CONCENTRATION OF CREDIT RISK (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Concentration Risk [Line Items]
Cash and cash equivalents	$ 10,031,000		$ 10,031,000		$ 14,025,000
Uninsured amount	100,000		100,000		1,500,000
Allowance for doubtful accounts	$ 36,000		$ 36,000		$ 36,000
Accounts Receivable [Member] \| One Customer [Member] \| Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk, percentage			35.70%		37.60%
Accounts Receivable [Member] \| Two Customers [Member] \| Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk, percentage			10.50%		13.00%
Accounts Receivable [Member] \| Three Customers [Member] \| Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk, percentage					12.80%
Revenue Benchmark [Member] \| One Customer [Member] \| Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	35.20%	16.10%	32.80%	21.00%
Revenue Benchmark [Member] \| Two Customers [Member] \| Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk, percentage		15.60%		15.80%
Revenue Benchmark [Member] \| Three Customers [Member] \| Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk, percentage		11.00%
Revenue Benchmark [Member] \| Four Customers [Member] \| Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk, percentage		10.20%
US Treasury Bill Securities [Member]
Concentration Risk [Line Items]
Cash equivalents	$ 9,800,000		$ 9,800,000		$ 12,100,000

SCHEDULE OF DISAGGREGATION OF REVENUE (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Disaggregation of Revenue [Line Items]
Total	$ 6,345	$ 5,069	$ 11,267	$ 13,764
Energy [Member]
Disaggregation of Revenue [Line Items]
Total	251	798	269	3,328
Aerospace [Member]
Disaggregation of Revenue [Line Items]
Total	2,873	604	4,990	1,119
Industrial [Member]
Disaggregation of Revenue [Line Items]
Total	1,842	2,000	3,575	5,883
Research [Member]
Disaggregation of Revenue [Line Items]
Total	1,379	1,667	2,433	3,434
Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Total	5,649	3,029	9,571	10,752
Transferred over Time [Member] \| Energy [Member]
Disaggregation of Revenue [Line Items]
Total	239	760	239	3,276
Transferred over Time [Member] \| Aerospace [Member]
Disaggregation of Revenue [Line Items]
Total	2,694		4,496	264
Transferred over Time [Member] \| Industrial [Member]
Disaggregation of Revenue [Line Items]
Total	1,542	1,085	2,801	4,756
Transferred over Time [Member] \| Research [Member]
Disaggregation of Revenue [Line Items]
Total	1,174	1,184	2,035	2,456
Transferred at Point in Time [Member]
Disaggregation of Revenue [Line Items]
Total	696	2,040	1,696	3,012
Transferred at Point in Time [Member] \| Energy [Member]
Disaggregation of Revenue [Line Items]
Total	12	38	30	52
Transferred at Point in Time [Member] \| Aerospace [Member]
Disaggregation of Revenue [Line Items]
Total	179	604	494	855
Transferred at Point in Time [Member] \| Industrial [Member]
Disaggregation of Revenue [Line Items]
Total	300	915	774	1,127
Transferred at Point in Time [Member] \| Research [Member]
Disaggregation of Revenue [Line Items]
Total	$ 205	$ 483	$ 398	$ 978

SCHEDULE OF COST AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Revenue from Contract with Customer [Abstract]
Costs incurred on contracts in progress	$ 11,009
Estimated earnings	5,609
Costs and estimated earnings on uncompleted contracts	16,618
Billings to date	(19,589)
Net cost in excess of billings	(2,971)
Deferred revenue related to non-system contracts	(573)
Contract liability in excess of contract assets	(3,544)
Contract assets	1,554	$ 1,604
Contract liabilities	$ 5,098	$ 4,908

REVENUE RECOGNITION (Details Narrative) - USD ($) $ in Millions	6 Months Ended		12 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023	Dec. 31, 2022
Revenue from Contract with Customer [Abstract]
Unrecognized contract revenue	$ 21.6
Contract liability	$ 2.7	$ 2.6	$ 4.6	$ 4.1

SCHEDULE OF INVENTORIES (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Inventory Disclosure [Abstract]
Raw materials	$ 2,231	$ 2,351
Work-in-process	1,612	1,248
Finished goods	815	855
Total	$ 4,658	$ 4,454

INVENTORIES (Details Narrative) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Inventory [Line Items]
Inventories	$ 4,658	$ 4,454
PVT 150 Systems [Member]
Inventory [Line Items]
Inventories	$ 1,800

LONG-TERM DEBT (Details Narrative) - Loan Agreement to Fund Machinery Acquisition [Member]	1 Months Ended
	Sep. 30, 2022 USD ($)
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Loan principal amount	$ 432,000
Loan payment term	60
Loan, monthly installment amount	$ 8,352
Loan interest rate	6.00%

SCHEDULE OF BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Earnings Per Share [Abstract]
Basic weighted average common shares outstanding	6,816,956	6,778,754	6,813,127	6,776,035
Dilutive effect of options and unvested restricted stock
Diluted weighted average shares outstanding	6,816,956	6,778,754	6,813,127	6,776,035

EARNINGS PER SHARE (Details Narrative) - shares	Jun. 30, 2024	Dec. 31, 2023	Jun. 30, 2023
Earnings Per Share [Abstract]
Stock option outstanding	838,125	846,875	599,500
Stock option exercisable	416,875		297,500

SCHEDULE OF STOCK BASED COMPENSATION EXPENSE (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total	$ 267	$ 262	$ 534	$ 397
Cost of Revenue [Member]
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total	38	41	76	60
Research and Development Expense [Member]
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total	47	45	94	65
Selling Expense [Member]
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total	27	31	54	42
General and Administrative Expense [Member]
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total	$ 155	$ 145	$ 310	$ 230

SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS (Details)	6 Months Ended
SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS (Details)	Jun. 30, 2024 $ / shares
Share-Based Payment Arrangement [Abstract]
Stock price	$ 4.75
Exercise price	$ 4.75
Dividend yield	0.00%
Expected volatility	77.00%
Risk-free interest rate	4.12%
Expected life (in years)	6 years

SCHEDULE OF STOCK OPTIONS AWARDS (Details)	6 Months Ended
SCHEDULE OF STOCK OPTIONS AWARDS (Details)	Jun. 30, 2024 $ / shares shares
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding [Roll Forward]
Stock option awards outstanding, beginning balance \| shares	846,875
Stock option awards, granted \| shares	5,000
Stock option awards, forfeited \| shares	(13,750)
Stock option awards outstanding, ending balance \| shares	838,125
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
Weighted average exercise price outstanding, beginning balance \| $ / shares	$ 8.20
Weighted average exercise price, granted \| $ / shares	4.75
Weighted average exercise price, forfeited \| $ / shares	7.94
Weighted average exercise price outstanding, ending balance \| $ / shares	$ 8.18

SCHEDULE OF OUTSTANDING AND EXERCISABLE OPTIONS RANGES OF EXERCISE PRICES (Details)	6 Months Ended
	Jun. 30, 2024 USD ($) $ / shares shares
Exercise Price Range One [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise price range, lower limit	$ 4.00
Exercise price range, upper limit	$ 7.00
Number of options outstanding \| shares	459,625
Number of options outstanding, weighted average remaining contractual term	7 years 4 months 24 days
Number of options outstanding, weighted average exercise price	$ 4.55
Number of options outstanding, intrinsic value \| $
Number of options exercisable \| shares	217,250
Number of options exercisable, weighted average exercise price	$ 4.45
Number of options exercisable, intrinsic value \| $
Exercise Price Range Two [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise price range, lower limit	$ 7.01
Exercise price range, upper limit	$ 10.00
Number of options outstanding \| shares	20,000
Number of options outstanding, weighted average remaining contractual term	3 years 9 months 18 days
Number of options outstanding, weighted average exercise price	$ 8.07
Number of options outstanding, intrinsic value \| $
Number of options exercisable \| shares	20,000
Number of options exercisable, weighted average exercise price	$ 8.07
Number of options exercisable, intrinsic value \| $
Exercise Price Range Three [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise price range, lower limit	$ 10.01
Exercise price range, upper limit	$ 13.00
Number of options outstanding \| shares	130,000
Number of options outstanding, weighted average remaining contractual term	3 years 2 months 12 days
Number of options outstanding, weighted average exercise price	$ 10.62
Number of options outstanding, intrinsic value \| $
Number of options exercisable \| shares	122,500
Number of options exercisable, weighted average exercise price	$ 10.55
Number of options exercisable, intrinsic value \| $
Exercise Price Range Four [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise price range, lower limit	$ 13.01
Exercise price range, upper limit	$ 16.00
Number of options outstanding \| shares	228,500
Number of options outstanding, weighted average remaining contractual term	8 years 8 months 12 days
Number of options outstanding, weighted average exercise price	$ 14.11
Number of options outstanding, intrinsic value \| $
Number of options exercisable \| shares	57,125
Number of options exercisable, weighted average exercise price	$ 14.11
Number of options exercisable, intrinsic value \| $

STOCK-BASED COMPENSATION EXPENSE (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock based compensation expenses	$ 267,000	$ 262,000	$ 534,000	$ 397,000
Stock option granted			5,000
Weighted average fair value of stock options granted			$ 4.75
Directors [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Annual equity retainer amount	40,000		$ 40,000
Restricted Stock [Member] \| Director [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock based compensation expenses	57,423	$ 40,000	$ 103,736	$ 80,000
Share-Based Payment Arrangement, Option [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock option granted			5,000
Stock option vesting percentage			25.00%
Vesting period			4 years
Expiration period			10 years
Weighted average fair value of stock options granted			$ 3.30
Unrecognized compensation costs	$ 2,000,000.0		$ 2,000,000.0
Unrecognized compensation costs, recoginition period			1 year 9 months 18 days

SCHEDULE OF SEGMENTS (Details) - USD ($)

3 Months Ended

6 Months Ended

Jun. 30, 2024

Jun. 30, 2023

Jun. 30, 2024

Jun. 30, 2023

Dec. 31, 2023

Segment Reporting Information [Line Items]

$ 33,845,000

$ 36,783,000

$ 33,845,000

$ 36,783,000

$ 35,025,000

6,345,000

5,069,000

11,267,000

13,764,000

Operating (loss) income

(898,000)

(1,232,000)

(2,526,000)

(1,420,000)

Pretax (loss) income

(761,000)

(1,103,000)

(2,233,000)

(1,142,000)

Depreciation and amortization

154,000

227,000

307,000

392,000

Purchase of property, plant & equipment

105,000

78,000

182,000

225,000

Operating Segments [Member] | CVD Equipment [Member]

Segment Reporting Information [Line Items]

29,368,000

32,139,000

29,368,000

32,139,000

4,107,000

3,134,000

7,054,000

8,979,000

Operating (loss) income

(729,000)

(445,000)

(2,173,000)

(267,000)

Pretax (loss) income

(743,000)

(445,000)

(2,188,000)

(265,000)

Depreciation and amortization

141,000

136,000

283,000

267,000

Purchase of property, plant & equipment

101,000

78,000

178,000

215,000

Operating Segments [Member] | SDC [Member]

Segment Reporting Information [Line Items]

4,310,000

4,189,000

4,310,000

4,189,000

2,315,000

1,795,000

4,246,000

4,107,000

Operating (loss) income

714,000

363,000

1,346,000

994,000

Pretax (loss) income

714,000

364,000

1,346,000

996,000

Depreciation and amortization

13,000

12,000

24,000

24,000

Purchase of property, plant & equipment

4,000

4,000

10,000

Operating Segments [Member] | CVD Materials [Member]

Segment Reporting Information [Line Items]

222,000

483,000

222,000

483,000

55,000

342,000

114,000

1,009,000

Operating (loss) income

(45,000)

(224,000)

^[1]

(71,000)

(143,000)

^[2]

Pretax (loss) income

(45,000)

(203,000)

^[1]

(71,000)

(95,000)

^[2]

Depreciation and amortization

79,000

101,000

Purchase of property, plant & equipment

Intersegment Eliminations [Member]

Segment Reporting Information [Line Items]

(55,000)

(28,000)

(55,000)

(28,000)

(132,000)

(202,000)

(147,000)

(331,000)

Operating (loss) income

(8,000)

(28,000)

10,000

(28,000)

Pretax (loss) income

(8,000)

(28,000)

10,000

(28,000)

Depreciation and amortization

Purchase of property, plant & equipment

Intersegment Eliminations [Member] | CVD Equipment [Member]

Segment Reporting Information [Line Items]

(132,000)

(138,000)

(147,000)

(266,000)

Intersegment Eliminations [Member] | SDC [Member]

Segment Reporting Information [Line Items]

0

64,000

0

64,000

Segment Reporting, Reconciling Item, Corporate Nonsegment [Member]

Segment Reporting Information [Line Items]

Operating (loss) income

(830,000)

(898,000)

(1,638,000)

(1,976,000)

Pretax (loss) income

(679,000)

(791,000)

(1,330,000)

(1,750,000)

Depreciation and amortization

Purchase of property, plant & equipment

[1]	Includes loss on sale of Tantaline of $0.2 million and impairment charge related to MesoScribe fixed assets of $0.1 million.
[2]	Includes loss on sale of Tantaline of $0.2 million and impairment charge related to MesoScribe fixed assets of $0.1 million.

SCHEDULE OF SEGMENTS (Details) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Defined Benefit Plan Disclosure [Line Items]
Asset impairment charges		$ 111		$ 111
Meso Scribe Technologies Inc [Member]
Defined Benefit Plan Disclosure [Line Items]
Asset impairment charges		100		100
Tantaline Subsidiary [Member]
Defined Benefit Plan Disclosure [Line Items]
Loss on sale of assets		$ 200		$ 200

SEGMENT REPORTING (Details Narrative)	3 Months Ended		6 Months Ended
SEGMENT REPORTING (Details Narrative)	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($) Segment	Jun. 30, 2023 USD ($)
Segment Reporting Information [Line Items]
Number of operating segments \| Segment			3
Revenue from contract with customer, including assessed tax	$ 6,345,000	$ 5,069,000	$ 11,267,000	$ 13,764,000
Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Revenue from contract with customer, including assessed tax	(132,000)	(202,000)	(147,000)	(331,000)
Intersegment Eliminations [Member] \| CVD Equipment [Member]
Segment Reporting Information [Line Items]
Revenue from contract with customer, including assessed tax	(132,000)	(138,000)	(147,000)	(266,000)
Intersegment Eliminations [Member] \| SDC [Member]
Segment Reporting Information [Line Items]
Revenue from contract with customer, including assessed tax	$ 0	$ 64,000	$ 0	$ 64,000

MESOSCRIBE SUBSIDIARY (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
MESOSCRIBE SUBSIDIARY (Details Narrative) - USD ($)	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Mar. 31, 2024	Dec. 31, 2023	Aug. 08, 2023
Asset impairment charges		$ 111,000		$ 111,000
Deposits from purchaser of equipment	597,000		597,000			$ 597,000
Revenues	6,345,000	5,069,000	11,267,000	13,764,000
Net loss	(761,000)	(1,113,000)	(2,233,000)	(1,153,000)
Assets	33,845,000	36,783,000	33,845,000	36,783,000		35,025,000
Liabilities	9,341,000		9,341,000			8,822,000
Meso Scribe Technologies Inc [Member]
Aggregate purchase price							$ 900,000
Asset impairment charges		$ 100,000		$ 100,000
Deposits from purchaser of equipment					$ 600,000	600,000
Revenues	55,000		100,000
Net loss	(45,000)		(100,000)
Assets	200,000		200,000			200,000
Liabilities	$ 700,000		$ 700,000			$ 700,000

CVD Equipment (NASDAQ:CVV)
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De Oct 2024 à Nov 2024

Plus de graphiques de la Bourse CVD Equipment

CVD Equipment (NASDAQ:CVV)
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De Nov 2023 à Nov 2024

Plus de graphiques de la Bourse CVD Equipment

Actualités CVD Equipment Corp

Form 10-Q - Quarterly report [Sections 13 or 15(d)]
Mercredi 13 Novembre 2024 ( il y a 1 semaine) • Edgar (US Regulatory)

Form 8-K - Current report
Mercredi 13 Novembre 2024 ( il y a 1 semaine) • Edgar (US Regulatory)

CVD Equipment Corporation Reports Third Quarter 2024 Financial Results
Mercredi 13 Novembre 2024 ( il y a 1 semaine) • Business Wire

CVD Equipment Corporation to Report Third Quarter 2024 Financial Results on November 13, 2024
Mercredi 6 Novembre 2024 ( il y a 2 semaines) • Business Wire

Form 4 - Statement of changes in beneficial ownership of securities
Lundi 26 Août 2024 ( il y a 3 mois) • Edgar (US Regulatory)

Form 10-Q - Quarterly report [Sections 13 or 15(d)]
Mardi 13 Août 2024 ( il y a 3 mois) • Edgar (US Regulatory)

Form 8-K - Current report
Mardi 13 Août 2024 ( il y a 3 mois) • Edgar (US Regulatory)

CVD Equipment Corporation Reports Second Quarter 2024 Financial Results
Mardi 13 Août 2024 ( il y a 3 mois) • Business Wire

Form 8-K - Current report
Lundi 12 Août 2024 ( il y a 3 mois) • Edgar (US Regulatory)

Form 4 - Statement of changes in beneficial ownership of securities
Lundi 12 Août 2024 ( il y a 3 mois) • Edgar (US Regulatory)

Form 4 - Statement of changes in beneficial ownership of securities
Lundi 12 Août 2024 ( il y a 3 mois) • Edgar (US Regulatory)

Form 4 - Statement of changes in beneficial ownership of securities
Lundi 12 Août 2024 ( il y a 3 mois) • Edgar (US Regulatory)

Plus d'articles sur CVD Equipment Corp

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