Cvd Equipment Corp 10-K for FY2025
Cvd Equipment Corp (CVV)
About this 10-K
Cvd Equipment Corp filed this 10-K on March 30, 2026, covering the fiscal year ended December 31, 2025 (FY2025).
Headline figures
Fiscal year ended December 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $25.79M
- down 4.1% from $26.88M a year earlier
- Net loss
- $1.59M
- compared with a net loss of $1.9M a year earlier
- Diluted EPS
- -$0.23
- compared with -$0.28 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| (Mark One) | |
| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. | |
For
the fiscal year ended
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| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
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As of March 27, 2026, shares of the Registrant’s common stock, $ par value were outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE:
CVD EQUIPMENT CORPORATION
INDEX TO ANNUAL REPORT ON FORM 10-K
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INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS
Except for historical information contained herein, this Annual Report on Form 10-K 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 growth and return to profitability; | |
| ● | uncertainty as to the general state of the silicon carbide wafer end market; | |
| ● | uncertainty as to our ability to generate orders for our equipment division; | |
| ● | competition in our existing and potential future product lines of business, including our PVT150™ / PVT200™ systems and CVI and CVD systems; | |
| ● | uncertainty as to our ability to identify and develop new products for growth markets; | |
| ● | our ability to obtain financing on acceptable terms if and when needed; | |
| ● | our ability to attract and retain key personnel and employees; | |
| ● | our customer’s ability to obtain funding and budget for our systems; | |
| ● | uncertainty as to changes to international trade policies including the possible imposition of tariffs; 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.
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| Item 1. | Description of Business. |
The use of the words “CVD,” “we,” “us,” or “our,” refers to CVD Equipment Corporation, a New York corporation incorporated on October 13, 1982, and its wholly owned subsidiaries, CVD Materials Corporation (including its wholly owned subsidiaries, and CVD MesoScribe Technologies Corporation (“MesoScribe”) and Tantaline CVD Holding ApS (“Tantaline”)), and FAE Holdings 411519R LLC except where the context otherwise requires.
Overview
CVD has served the advanced materials markets with chemical vapor deposition, physical vapor transport and thermal process equipment for over 40 years. We are headquartered in Central Islip, New York with our Stainless Design Concepts (“SDC”) division located in Saugerties, New York.
We design, develop, and manufacture a broad range of equipment used to develop and produce materials and coatings for the aerospace, compound semiconductor, semiconductor, aerospace, battery energy storage markets as well as advanced industrial applications, and research.
We currently conduct our business through two reportable segments: i) CVD Equipment that designs and manufactures chemical vapor deposition, physical vapor transport and thermal process equipment; and ii) SDC that designs and manufactures ultra-high purity gas and chemical delivery control systems. Our MesoScribe reportable segment ceased operations in 2024 and had provided products related to advanced materials and coatings.
Developments
On March 23, 2026, we entered into a definitive agreement under which our SDC business division will be sold to a subsidiary of the Atlas Copco Group. The purchase price amounts to approximately $16.9 million in cash, subject to certain purchase price adjustments. The transaction is expected to close during the second quarter of 2026, subject to customary closing conditions.
We expect to use the proceeds from the transaction to enhance financial flexibility and support initiatives aimed at creating shareholder value. The expected net cash proceeds after payment of transaction expenses and taxes are approximately $15.0 million, of which $900,000 will be held in escrow to cover post-closing adjustments and indemnification obligations under the agreement.
CVD will retain ownership of its Saugerties, New York facility, which will be leased to the acquiring company for an initial term of two years following the closing of the transaction.
On November 6, 2025, our Board of Directors approved a comprehensive strategy to transform the Company in response to the continued fluctuations in our order rates and the recent decline in the bookings of our CVD Equipment segment. As part of this strategy, we intend to transition the operating model for our CVD Equipment business from vertically integrated fabrication to outsourced fabrication of certain components. These actions are expected to reduce our fixed operating costs.
Key initiatives of the plan included a reduction in the CVD Equipment division’s workforce and other expenses, to reduce annual operating costs by approximately $1.8 million. This included outsourcing the fabrication operations for certain components and the implementation of a revised sales strategy utilizing distributors and outside sales representatives to supplement internal sales efforts. Our SDC division will not be impacted by these actions.
The transformation strategy also includes the exploration of strategic alternatives for remaining businesses and product lines, including the potential sale or divestiture of assets or business lines in addition to the sale of SDC.
We completed the workforce reduction plan during the fourth quarter of 2025 and incurred approximately $0.1 million in severance and other charges. In connection with the transformation plan, we incurred non-cash impairment charges of $0.2 million with respect to impairment of machinery and equipment and capitalized software that will no longer be used. The machinery and equipment to be disposed of totaling $0.5 million is reflected as assets held for sale as of December 31, 2025.
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Key Company Strengths
Based on more than 40 years of equipment experience, we use our capabilities in process development, engineering, and manufacturing to transform emerging applications into mainstream manufacturing solutions.
We have built a library of design expertise, know-how and innovative solutions to assist our customers in developing these intricate processes and to accelerate their production and commercialization. This library of equipment design solutions, along with our manufacturing and systems integration facilities, allows us to provide application-specific design, process, and manufacturing solutions to our customers.
Our core competencies in equipment and software design, manufacturing and process development are used to engineer our finished products and to accelerate the commercialization path of our customer base. Our proprietary real-time software allows for rapid configuration, and provides our customers with enabling tools to understand, optimize and repeatedly control their processes. These factors reduce costs, improve quality, and reduce the time it takes between customers’ orders and the shipment of our products. Our Application Laboratory allows customers the option to bring their process tools to our laboratory and to work collaboratively with our scientists and engineers to optimize process performance.
These systems, which we market and sell under the CVD, FirstNano and EasyTube® product names, are sold to commercial companies, universities and research laboratories in the United States and throughout the world.
Key Growth Strategies
Our core strategy is to focus on growth applications in end markets related to aerospace, microelectronics, and industrial 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.
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 engine components. We received additional orders from the same aerospace company for three CVI systems in 2023 and one CVI system in 2024. We anticipate the systems will be field accepted and operational by our customer with the next three to nine months.
Our core strategy is to focus on key related to aerospace, microelectronics and industrial 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 to produce specialty coatings for advanced high temperature environments.
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 and the units are expected to be completed over the next three to six months.
The phrase “electrification of everything” within the microelectronics market refers to the shift from fossil fuels to the use of electricity to power devices, buildings, electric vehicles (“EVs”) and many other applications.
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In October 2025, we received an order for two PVT150™ Physical Vapor Transport Systems (“PVT”) from Stony Brook University (“SBU”) for their new semiconductor research center - onsemi Silicon Carbide Crystal Growth Center. The recently launched research center will enable SBU faculty, scientists, and students to conduct research on silicon carbide crystal growth and other wide band gap (“WBG”) materials and device-enabling technologies critical to improving energy efficiency in power semiconductors and foster the next generation of skilled professionals in this field.
Our PVT reactor design and control system architecture allows for precise process and temperature control enabling run-to-run repeatability and system-to-system matching. The PVT system platform is also being considered to process other WBG materials such as aluminium nitride (“AlN”) to support the development of emerging, high
Our PVT systems may provide us with standard product offerings to continue to support the EV focused market as well as energy storage, power conversion and power transmission. In addition, SiC semiconductors specifically help address the need for high energy efficiency and power density in the AC-DC stage in power supply units for data centers.
We also provide a line of CVD systems which are used to develop and produce material for the anode portion of batteries.
Both technologies are essential for the support of the EV market. These systems may provide us with standard products offering to continue to support the EV focused market as well as energy storage, power conversion and power transmission.
We have observed continued weakness in the demand for our PVT product line and general reduced demand for silicon carbide which has negatively impacted sales of our PVT systems. In addition, the recent global overcapacity of 150 mm and 200 mm silicon carbide wafers has reduced the market for our silicon carbide growth systems.
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 attended in 2025.
Major Target Markets
Our major target markets are aerospace & defense and industrial, microelectronics / high power electronics, and EV battery materials / energy storage.
Aerospace & Defense
CVD is a leading manufacturer of preform CVI and tow-coating systems to manufacture CMCs for aerospace gas turbine jet engine applications. Our customers include two of the leaders in aerospace gas turbine engines.
We continue to engage additional customers in the aerospace market regarding CMCs. During 2022, we received an order for a production CVI system. We received additional orders from the same aerospace company for three CVI systems in 2023 and one additional CVI system in 2024. These systems will be used to manufacture CMCs for aerospace gas turbine jet engines and we anticipate the systems will be field accepted and operational by our customer with the next three to nine months.
We believe our future growth will be derived from production applications in our major target markets. Our legacy product line continues to provide advanced equipment and subsystems to enable development of emerging technology and research applications.
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Microelectronics / High Power Electronics
Demand for silicon carbide wafers to support high power electronics for energy storage and transmission/charging resulted in a multi-system order from a US-based, silicon carbide wafer manufacturer. Through December 31, 2025, we have received and delivered orders for 30 of our PVT150™ physical vapor transport systems from one customer, which planned to use our systems to grow silicon carbide crystals that are made into 150 mm silicon carbide wafers for use in power electronics. In late 2023, we launched our PVT200™ system designed to manufacture silicon carbide crystals for 200 mm wafer and in mid-2024 we received our first order from a second customer. We plan to continue to support the market with our PVT200™ system and possible future product development for the PVT200™ product line. We will continue to monitor the market dynamics for silicon carbide wafers.
EV Battery Materials / Energy Storage
We have experienced interest and demand for nanotechnology materials including carbon nanotubes (CNTs), graphene and silicon nanowires (Si-NWs) to support the development and manufacturing for battery materials used in electric vehicles.
Our major targeted markets are further described as follows (the term “legacy product” refers to products and systems within our product offerings that we have produced in our history):
| Major Target Markets: | Description and Growth Drivers: | CVD Equipment Products and Services: | |||
| Aerospace, Defense and Industrial | Next generation gas turbine jet engines are incorporating CMC material for the hot section or exhaust of the engine to improve fuel efficiency. | Production and R&D Applications: | |||
| Silicon carbide coating is used as a protective barrier in many OEM equipment components used in LED and other applications. | - | Fiber tow coat system. Mass production system for multi-layer coating for CMCs. | |||
| - | Silicon bond coat environmental barrier depositing system. Deposits Si on machined gas turbine jet engine CMC components and other OEM components. | ||||
| - | Chemical Vapor Deposition/ Chemical Vapor Infiltration production coating system for multi-layer CMC coatings on SiC fiber preforms. | ||||
| - | Chemical Vapor Deposition production coating system for high volume low cost deposition of SiC coating. | ||||
Microelectronics / High Power Electronics
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The shift to electrification has the objectives of reducing emissions and reducing dependency on fossil fuels. This has driven the demand for electric vehicle and associated high power electronics used in charging and motor power conversion. The use of SiC in augmented reality glasses is a potential emerging application. | Production Applications: | |||
| - | PVT150™ SiC crystal growth system launched in 2022. | ||||
| - | PVT200™ SiC crystal growth system launched in 2023. | ||||
| - | HVPE400: polycrystalline GaN (legacy product). | ||||
EV Battery Materials / Energy Storage
|
The shift to electrification also requires improvements in energy storage, specifically with the use of novel anode materials. | Production Applications: | |||
| - | PowderCoat-1100 production system launched in 2021 grows Si nanowires on carbon nanoparticles. | ||||
| - | Carbon-150: Single substrate system for CNT growth. Versatile substrate format, on wafer or foil. | ||||
| - | Carbon-300: Multiple substrate batch tube system for CNT growth. Versatile substrate format, on wafer or foil. | ||||
| R&D Applications: | |||||
| - | ET-3000: Versatile CNT growth system for research and development. | ||||
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| Other Markets | CVD Equipment Products: | ||
| - | Universal liquid and gas storage cabinets, management, and delivery systems (SDC segment). | ||
| - | Production MOCVD Super Conducting Tape system. | ||
| - | ET-3000: MOCVD for compound semiconductor R&D. | ||
| - | ET-3000 for graphene. | ||
| - | ET-6000: Multi-Tube Chemical Vapor Deposition Tube furnace (metals, oxides and nitrides). | ||
| - | PowderCoat-300 for powder material R&D (including battery anode). | ||
Bookings
During 2025, bookings of new orders from customers were approximately $13.0 million, representing a decrease of approximately 53.7% compared to 2024 bookings of $28.1 million. The decrease in bookings of $15.1 million was related to decrease in orders for systems in our CVD Equipment segment due in part to macroeconomic issues associated with tariffs, reduction in university funding and the U.S. government shutdown during 2025 and that have continued into 2026.
Segments
CVD Equipment - supplies state-of-the-art chemical vapor deposition and thermal process equipment targeting growth production markets as well as systems for use in research and development. This includes systems marketed under the FirstNano product brand. Utilizing our over 40 years of expertise in the design and manufacture of chemical vapor deposition and thermal process equipment, we provide material processing capability and control at a competitive cost of ownership.
The targeted markets include advanced aerospace materials primarily for gas turbine jet engines, high power electronics (both silicon carbide (SiC) and gallium nitride (GaN)), and nanomaterials used in batteries. The product group also consists of legacy products serving the production and R&D applications such as semiconductors, LEDs, carbon nanotubes, nanowires, solar cells and several other industrial & research applications.
Our developments and opportunities for the carbon composite business come from achievements in our Applications Laboratory. The Applications Laboratory, along with the sales and marketing team continue to explore carbon-based products and applications that can be made from our CNT, infiltrated carbon/CVI and carbon nano fiber technology (CNF). Some applications include CNT and infiltrated carbon/CVI based battery material and CNF capacitors for 5G technology.
To support new emerging applications, we provide equipment to and collaborate with laboratory scientists to bring state-of-the-art processes from the research laboratory into production. CVD Equipment segment provides process development value through our Application Laboratory where our personnel interact directly with the scientists and engineers of our customer base to develop solutions to tomorrow’s challenges today. CVD Equipment segment operates from our 128,000 square feet facility in Central Islip, New York.
SDC - designs and manufactures ultra-high purity gas and chemical delivery control systems for state-of-the-art semiconductor fabrication processes, aerospace, solar cells, LEDs, carbon nanotubes, nanowires, and a number of industrial applications. Our SDC products are sold on a stand-alone basis and are also integrated into certain CVD equipment. This internal supply of chemical and gas delivery systems and components provide a competitive advantage for our CVD Equipment group over its competition. SDC operates from a 22,000 square foot facility fitted with a clean room manufacturing space located in Saugerties, New York.
MesoScribe - consisted of MesoScribe’s direct write printed electronics business. MesoScribe provided MesoPlasma™ printing services and products (heaters, antennas, and sensors) to aerospace, satellite, power generation, defense, and other markets requiring high performance. MesoScribe operations were located at our facility in Central Islip, New York.
On August 8, 2023, we entered into an agreement with a third party to sell certain assets and license certain proprietary information of MesoScribe. We fulfilled remaining orders for MesoScribe products during 2024, completed the sales of the equipment assets and ceased operations as of September 30, 2024.
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Products and Technology
Chemical Vapor Deposition/Infiltration – Chemical vapor deposition is a method of coating or growing material through a chemical disassociation and recombination at elevated temperatures onto or within pores of a substrate material. A single or collection of gases or vapor introduced on to the surface or into pores of a substrate material that is heated to such a degree that the gases decompose and deposits a desired layer onto and or into a substrate material. Chemical vapor infiltration (CVI) is a variant of a chemical vapor deposition process that is performed at low pressures to allow for coating the internal surfaces of a porous material. Using heat and low pressure, precursor vapors penetrate the pores/fiber of the material and deposit to form a conformal coating on the internal surfaces. Both processes are accomplished by combining appropriate gases in a reaction chamber at elevated temperatures (typically 500° to 2,500° Celsius). Our chemical vapor deposition and CVI systems are complete and include all necessary heating techniques, precise control instrumentation, gas delivery and abatement subsystems and components and include state-of-the-art proprietary process control software. We provide both standard and emerging applications for specified products. Some of the standard systems we offer are for SiC, GaN, Aluminum Nitride (AlN), CMCs, silicon (Si), CNT, graphene, silicon nanowires. The systems are sold under the CVD and FirstNano product brands.
Physical Vapor Transport (PVT) – While the PVT150™ was officially launched for production in 2022, we have sold PVT systems in prior years and have pioneered both resistive heating and more effectively inductively heated PVT systems. The PVT150™ system was specifically designed to address the SiC crystal growth market for 150 mm substrates or wafers. Designed to provide enhanced process parameter control, it allows existing and future customers the ability to tightly control and monitor the crystal growth process for 150 mm substrates. A 200 mm version called the PVT200™ was developed during 2023, and the first order was received in February 2024 and delivered in 2024. The crystal growth technique utilized a high temperature furnace to vaporize from seed granular material of SiC and further deposit out in an ordered crystal structure onto substrate wafer. The process takes days to over a week to complete and yield a SiC crystal ready for further processing into wafers.
Rapid Thermal Processing (RTP) – Used to heat semiconductor materials to elevated temperatures of up to 1,200° Celsius at rapid rates of up to 200° Celsius per second. Our RTP systems are offered for implant activation, oxidation, silicide formation and many other processes. We offer systems that can operate both at atmospheric and reduced pressures.
Annealing, Diffusion and Low-Pressure Chemical Vapor Deposition (LPCVD) Furnaces – These furnaces are used for dislocation removal in crystals, dopant diffusion, oxidation, for SiC, Si, SiOx and other applications. The systems are normally operated at atmospheric and/or reduced pressure with gaseous atmospheres related to the process. An optional feature of the system allows for the heating element to be moved away from the process chamber allowing the wafers to rapidly cool or be heated in a controlled environment. Our temperature control system enables more precise control of the wafers. The systems are equipped with an automatic process controller, permitting automatic process sequencing and monitoring with safety alarm provisions.
Ultra-High Purity Gas and Liquid Control Systems – Our standard and custom designed gas and liquid control systems, which encompass gas cylinder storage cabinets, custom gas and chemical delivery systems, gas and liquid valve manifold boxes and gas isolation boxes, provide safe storage and handling of pressurized gases and chemicals. Our system design allows for automatic or manual control from both a local and remote location. These subsystems and components are provided to the general market as well as support the CVD Equipment segment.
Quartzware – The majority of our process equipment solutions, utilize quartz components which we partially manufacturer internally. In addition, the equipment typically requires routine maintenance, consumable and spare parts. One such spare part and consumable which is core to our technology offering is quartz hardware. We provide standard and custom fabricated quartzware used in our equipment and to a lesser extent for other customer tools.
Intellectual Property
Our success is dependent, in part upon the development and protection of our proprietary technology and other proprietary rights. We have historically and continue to protect our proprietary information and intellectual property such as design specifications, blueprints, technical processes, and employee know-how through the use of patents and non-disclosure agreements. In the area of patents, we believe there is value in having protected intellectual property and will continue to file for patent protection of our proprietary technology that we believe has the potential to be incorporated into our products and sold to multiple customers. We also maintain certain trademarks relating to certain of our products and product lines and claim copyright protection for certain proprietary software and documentation.
While patent, copyright and trademark protections for our intellectual property are important to different degrees for our various products and solutions, we believe our future success in highly dynamic markets is most dependent upon the technical competence and creative skills of our personnel and our ability to accelerate the commercialization of next generation intellectual properties. We strive to protect our trade secrets and other proprietary information through non-disclosure agreements with our customers, suppliers, employees and consultants and other security measures.
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Research and Development
We develop new products based on market analysis or by customer request. The technology included in our product development includes mechanical hardware, software and controls systems and overall configuration. Our research and development activities have yielded a wealth of technology from which systems and solutions can be derived from and productized. Together with a number of leading universities and startup companies with whom we partner from time to time, we conduct research on Si deposition for both aerospace Si bond coat and microelectronic applications, SiC growth, the growth and infiltration of carbon nanotubes, graphene and nanowires as well as on selected aerospace manufacturing processes. Our intention is that together with customers and universities, we will leverage our collective expertise in this field, which we believe will allow us to capitalize on commercial opportunities in the future.
Markets and Marketing
We serve multiple emerging and mature global markets including compound semiconductor high power electronics, aerospace, defense, battery energy storage, silicon and other microelectronic and micromechanical devices, semiconductors, universities, and research centers. Due to the highly technical nature of our products, we believe it is essential to engage with customers directly through our sales personnel, our network of domestic and international independent sales representatives, and distributors specializing in the type of equipment, products, and services that we sell. Our primary marketing activities include direct sales engagement, participation in trade associations and trade shows and our internet websites. We expanded our marketing activities through attendance at key tradeshows and online marketing. As part of our transformation strategy announced in November 2025, we revised our sales strategy to use distributors and outside sales representatives to supplement internal sales efforts.
Customers
Our systems and products are used in both production applications and advanced materials research. We market and sell primarily to companies that are engaged in producing aerospace gas turbine jet engine component material, defense, compound semiconductor wafers, battery energy storage, silicon and other microelectronic and micromechanical devices, semiconductor, universities and research centers. We have both a domestic and international customer base.
Given the complexity and magnitude of the systems we sell, revenue from a single customer in any one year can exceed 10% of our total sales. During the year ended December 31, 2025, two customers represented 27.6% and 13.7% of our revenues, while in 2024, one customer represented 29.5% of our revenues. While we believe that our relationships with these customers are generally positive, the loss of a large customer would have to be replaced by others, and our inability to do so could have a material adverse effect on our business and financial condition.
For the year ended December 31, 2025, approximately 5.4% of our revenues were generated by sales to customers outside the U.S., compared to approximately 4.3% for the year ended December 31, 2024.
Competition
We can experience intense direct competition from both domestic and international competitors in all our product segments. Our CVD Equipment product lines, including FirstNano, target multiple markets and both production and research customers. Competition is substantial in both the production applications and research. In production applications, competition comes from larger companies offering enhanced services. In research applications, the competition comes from small companies that compete with us mostly on price. We are aware of other competitors that offer a substantial number of products and services comparable to ours. Many of our competitors (including customers who may elect to manufacture systems for internal use) have financial, marketing and other resources greater than our own. To date, we believe that each of our product and service segments has been able to compete favorably in markets that include these competitors, primarily based on know-how, technical performance, quality, delivery, price and aftermarket support. We continue to focus on products which serve markets that are growing and where we have a technical and commercially competitive advantage.
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CVD Equipment competes with companies located in Asia, Europe, and the US in both the production and research market. In the production and research markets, some of our potential customers built their own equipment. Additionally, there are large established companies who compete with us and pose a competitive risk in the market. Due to budgetary and funding constraints, many customers are price sensitive. We believe that our systems are among the most advanced available for the targeted market and coupled with our engineering and manufacturing capabilities, we believe that we can compete effectively.
SDC’s gas management and chemical delivery control systems are among the most advanced available. We further believe that SDC is differentiated from our competitors through our deep understanding of how the systems in which our products are incorporated are used in field applications. We have gained this understanding as a result of having designed and built complex process gas systems for our CVD Equipment group as well as for a number of the world’s leading semiconductors, aerospace, medical, solar manufacturers, research laboratories and universities.
Sources of Supply
Many of the components used in producing our products are purchased from unrelated suppliers. We have OEM status with our suppliers, but we are not obligated to purchase a pre-determined quantity. We are not dependent on a principal or major supplier and alternate suppliers are available. Historically, subject to lead times, the components and raw materials we used in manufacturing our products were readily obtainable.
Until November 2025, we maintained a fully equipped machine shop that we used to fabricate a significant portion of our metal components in-house. As part of our new strategy, we transitioned our operating model for our CVD Equipment business from vertically integrated fabrication to outsourced fabrication of certain components including metal components. These actions are expected to reduce our fixed operating costs. Our quartz fabrication capability is currently sufficient to meet our quartzware needs.
Materials procured from suppliers and/or manufactured internally undergo a rigorous quality control process to ensure that the parts meet or exceed our requirements and those of our customers. Upon final assembly, all equipment undergoes a final series of complete testing to ensure maximum product performance.
Backlog
As of December 31, 2025, our backlog was approximately $6.6 million, compared to $19.4 million as of December 31, 2024, a decrease of $12.8 million. Our backlog at December 31, 2025 consists of approximately $4.9 million remaining performance obligations for system contracts in progress and not yet started and the balance of approximately $1.7 million represents other non-system orders received from customers. The timing for completion of backlog varies depending on the product mix and can be as long as two years or as short as 30-60 days.
In response to the lower levels of bookings and backlog and as further discussion in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in November 2025, our Board of Directors approved a comprehensive strategy to transform our Company by transition our operating model for our CVD Equipment division from vertically integrated fabrication to outsourced fabrication of certain components to reduce our fixed operating costs.
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There can be no assurance that our backlog will result in actual revenue in any particular period, or at all, or that any contract included in backlog will be profitable. The actual amount and timing of any revenue is subject to various contingencies, many of which are beyond our control, such as cancellations and delays. As a result of these contingencies, we may adjust our backlog if we determine that such orders are no longer firm. In addition to adjustments from these types of contingencies, variations in backlog from time to time are attributable, in part, to changes in sales mix, the timing of contract proposals, the timing of contract awards, and delivery schedules on specific contracts. As a result, we believe our backlog and orders, at any point in time, are not necessarily indicative of the total sales anticipated for any future period.
Government Regulations
We are subject to a variety of federal, state and local government regulations, such as environmental, labor and export control regulations. We believe that we have obtained all necessary permits to operate our business and that we are in material compliance with all laws and regulations applicable to us. These regulations are subject to change, and the effect of these changes could materially impact our business in certain technology areas and regions.
Utilizing our in-house safety team, engineering expertise and consultants as required, we continue to monitor and comply with applicable Environmental Health and Safety regulations at our facilities as well as the installation of equipment at our customer facilities.
With respect to our sales to customers located in China or elsewhere outside the United States, products which (i) are manufactured in the United States, (ii) incorporate controlled U.S. origin parts, technology, or software, or (iii) are based on U.S. technology, are subject to the U.S. Export Administration Regulations (“EAR”). We continue to monitor, review, and maintain ongoing compliance with the EAR with respect to our export sales.
Product Liability
Our products are used in our customers’ manufacturing processes, which in some cases contain explosive, flammable, corrosive, and toxic gases. There are potential exposures to personal injury as well as property damage, particularly if operated without regard to the design limits of the systems and components. Additionally, the end products of some of our customers are used in areas such as aerospace and high-tech devices where safety is of great concern. Management reviews its insurance coverage on an annual basis or more frequently, if appropriate, and we believe we have the types and amounts of insurance coverage that are sufficient for our business.
Human Capital
We consider our employees a vital asset to our business and strive to ensure we foster a work environment of respect, communication, objective orientation, and personal life balance. We believe this results in a higher level of employee satisfaction and hence improved performance and employment longevity. As of December 31, 2025, we had 85 employees. We had 39 employees in manufacturing, 22 in engineering (including research and development and efforts related to product improvement), 4 in field service, 7 in sales and marketing and 13 in general management, maintenance and administration, compared to 118 employees as of December 31, 2024. None of our employees are subject to a collective bargaining agreement. We completed a workforce reduction plan during the fourth quarter of 2025 in response to the continued fluctuations in our order rates and the recent decline in the bookings of our CVD Equipment division.
The implementation of our business strategy depends on our ability to hire, train, and retain qualified and diverse professionals, and we must emphasize employee development and training to do so. We are committed to identifying and developing the talents of our next generation of managers and intend to establish a strong succession-planning program for our critical positions
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Employee Safety
The health and safety of our employees and partners is our highest priority, and this is consistent with our operating philosophy. We maintain strong environmental, health and safety protocols that focus on implementing policies and training programs, as well as performing self-audits to ensure our colleagues and partners leave the workplace safely on a daily basis.
Employee Compensation
Management continues to review our employee compensation programs to better align the compensation of our employees with our objectives, performance, and personal performance, and to provide the proper short-term and long-term incentives to attract, retain and motivate them to achieve superior results. We believe we must offer wages that are competitive and consistent with employee positions, skill levels, experience, and knowledge, and in order to do so we may work with a nationally recognized outside compensation and benefits consulting firm to independently evaluate the effectiveness of our executive and non-executive compensation and benefit programs and to provide benchmarking against our peers within our industry.
Equal Opportunity
We are committed to building and sustaining a culture of equal opportunity that encourages all our employees to reach their full potential. Our CVD team, like the technologies we enable, is a rich combination of diverse individuals coming together to make a material difference for our people, our customers, and the world. As a company that enables tomorrow’s technologies, we recognize that a diverse employee population makes CVD a stronger, more innovative, and a more engaging place to work. We are always striving to attract talented individuals from a diverse candidate pool.
Available Information
Our website address is www.cvdequipment.com and the contents of our website, including our investor relations website, is not incorporated by reference into this filing or any other report we file with or furnish to the SEC. We have no duty to update or revise any forward-looking statements in this Annual Report on Form 10-K or in other reports filed with the SEC, whether as a result of new information, future events or otherwise, unless we are required to do so by law. The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.
| Item 1A. | Risk Factors |
In addition to the other information set forth in this Annual Report on Form 10-K, our shareholders should carefully consider the risk factors described below. The risks set forth below may not be the only risk factors relating to the Company. Any of these factors, many of which are beyond our control, could materially adversely affect our business, financial condition, operating results, cash flow and stock price.
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Risks Related to Sales and Product Development.
Historically, we have maintained a highly concentrated customer base so that changes in ordering patterns, delays or order cancellations could have a material adverse effect on our business and results of operations.
During 2025, two customers represented 27.6% and 13.7% of our total revenues, respectively. The loss of a major customer would have to be replaced by others, and our inability to do so may have a material adverse effect on our business and financial condition. We expect that contracts or orders from a relatively limited number of customers will, at times, continue to account for a substantial portion of our business. The mix and type of customers, and sales to any single customer, may vary significantly from quarter to quarter and from year to year. If any major customer did not place orders, or if they substantially reduced, delayed, or cancelled orders, we may not be able to replace the business in a timely manner or at all, which can and has had a material adverse effect on our results of operations and financial condition.
Our lengthy and variable sales cycle makes it difficult to predict our financial results.
The marketing, sale and manufacture of our products often requires a lengthy sales cycle, ranging from several months to over one year before we can complete production and delivery. The lengthy sales cycle makes forecasting the volume and timing of sales difficult and raises additional risks that customers may cancel or decide not to enter into contracts. The length of the sales cycle depends on the size and complexity of the project, the customer’s in-depth evaluation of our products, and, in some cases, the protracted nature of a bidding process.
Because a significant portion of our operating expenses are fixed, we have and may continue to incur substantial expense before we earn associated revenue. If customer cancellations occur, they could result in the loss of anticipated sales without allowing us sufficient time to reduce our operating expenses.
If any of our customers cancel or fail to accept a large system order, our financial position and results of operations could be materially and adversely affected.
Our backlog includes orders for customized systems including our chemical vapor deposition equipment and furnaces which are built to client specifications. These customized systems can have prices up to several million dollars, depending on the configuration, specific options included and any specific requirements of the customer. Because our orders are subject to cancellation or delay by the customer, our backlog at any point in time is not necessarily representative of actual sales for succeeding periods, nor does our backlog provide any assurance of achievement of revenues or that we will realize a profit from completing these orders. Our financial position and results of operations could be materially and adversely affected should any large system order be cancelled prior to shipment or not be accepted by the customer due to alleged non-conformity with product specifications or otherwise. Likewise, a significant change in the liquidity or financial position of any of our customers that purchase large systems, could have a material impact on the collectability of our accounts receivable and our future operating results. Our backlog does not provide any assurance that we will realize a profit from those orders or indicate in which period revenue will be recognized.
If demand declines for chemical vapor deposition/infiltration, physical vapor transport, gas control and related equipment, or for carbon nanotube and nanowire deposition systems, our financial position and results of operations could be materially adversely affected.
Our products are utilized to develop and manufacture materials and coatings for industrial and research applications that are used in numerous markets including but not limited to power electronics, battery materials, aerospace, nano and advanced electronic components. A significant part of our growth strategy involves continued expansion of the sales of our products for industrial as well as research and development purposes by companies, universities, and government-funded research laboratories. The availability of funds for these purposes may be subject to budgetary and political restrictions, as well as cost-cutting measures by manufacturers in the markets in which we operate.
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If the availability of funds or the demand for capital equipment in the markets in which we operate declines, the demand for our products would also decline and our financial position and results of operations could be harmed.
The demand for our products and the profitability of our products can change significantly from period to period because of numerous factors.
The industries in which we operate are characterized by ongoing factors, including:
| ● | global and regional economic and geopolitical developments and conditions including in Europe, Asia, and Middle East; | |
| ● | governmental budgetary and political constraints; | |
| ● | changes in the capacity utilization and production volume for research and industrial applications in the markets in which we operate; | |
| ● | the profitability and capital resources of manufacturers in the markets in which we operate; | |
| ● | changes in technology; | |
| ● | the availability of funds for research and development; and | |
| ● | the effects of supply chain disruptions. |
For these and other reasons, demand for our products may fluctuate significantly and, consequently, our results of operations for past periods may not necessarily be indicative of future operating results.
Our business might be adversely affected by our dependence on foreign business.
Because a material portion of our revenues are traditionally derived from international customers, our operating results could be negatively affected by a decline in the economies of any of the countries or regions in which we do business. Each region can exhibit unique characteristics, which can cause capital equipment investment patterns to vary significantly from period to period. Periodic local or international economic downturns, trade balance issues and political instability including trade disruptions and the imposition of tariffs, as well as fluctuations in interest and currency exchange rates. Any significant increases in tariffs on a broad array of goods, could negatively affect our business and results of operations.
The majority of our sales to date have been primarily priced in U.S. dollars. While our business has not been materially affected in the past by currency fluctuations, there is a risk that it may be materially adversely affected in the future. Such risks include possible losses due to both currency exchange rate fluctuations and from possible social and political instability.
United States trade policies that restrict imports or increase import tariffs may have a material adverse effect on our business.
There have been significant changes and proposed changes in recent years to U.S. trade policies, tariffs, and treaties affecting imports. Any significant increases in tariffs on a broad array of important goods, could negatively affect our business and results of operations.
In response to the tariffs announced by the U.S., China and other countries have imposed or proposed additional tariffs on certain exports from the United States. There is current uncertainty about the future relationship between the United States and other countries with respect to trade policies, taxes, government regulations, and tariffs and we cannot predict whether, and to what extent, U.S. trade policies will change in the future. A significant proportion of our materials and components are manufactured in China and other regions outside of the United States. Accordingly, such U.S. policy changes have made it and may continue to make it difficult or more expensive for us to obtain certain products manufactured outside the United States, which could affect our revenue and profitability. Any of these factors could depress economic activity and restrict our access to suppliers or customers and could have a material adverse effect on our business, financial condition, and results of operations.
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Our reputation and operating performance may be negatively affected if our products are not timely delivered.
We provide complex products that often require substantial lead-time for design, ordering parts and materials, and for assembly and installation. The time required to design, order parts and materials and to manufacture, assemble and install our products may in turn lead to delays or shortages in the availability of some products. If a product is delayed or is the subject of shortage because of problems with our ability to design, manufacture or assemble the product on a timely basis, obtain necessary materials and components, or if a product or software otherwise fails to meet performance criteria, we may lose revenue opportunities entirely, or experience delays in revenue recognition associated with a product or service. In addition, we may incur higher operating expenses during the period required to correct the problem.
We may not be able to keep pace with the rapid change in the technology we use in our products.
We believe that our continued success in the markets in which we operate depends, in part, on our ability to continually improve existing technologies and to develop and manufacture new products and product enhancements on a timely and cost-effective basis. We must be able to introduce these products and product enhancements into the market in a timely manner, in response to customers’ demands for higher-performance research and assembly equipment, customized to address rapid technological advances in capital equipment designs.
Technological innovations are inherently complex and require long development cycles and appropriate professional staffing. Our future business success depends on our ability to develop and introduce new products, or new uses for existing products that successfully address changing customer needs. Our success also depends on our ability to achieve market acceptance of our new products. To maintain our success in the marketplace, we may have to substantially increase our expenditure on research and development. If we do not develop and introduce new products, technologies or uses for existing products in a timely manner and continually find ways to reduce the cost of developing and producing them in response to changing market conditions or customer requirements, our business could be seriously harmed.
We face significant competition, and we are relatively small in size and have fewer resources in comparison with many of our competitors.
We face significant competition throughout the world, which may increase as certain markets in which we operate continue to evolve. Our future performance depends, in part, upon our ability to continue to compete successfully worldwide. Some of our competitors are diversified companies that have substantially greater financial resources and more extensive research, engineering, manufacturing, marketing and customer service and support capabilities than we can provide. We face competition from companies whose strategy is to provide a broad array of products, some of which compete with the products and services that we offer, as well as companies, universities and research laboratories that have the capacity to design and build their own equipment internally. These competitors may bundle their products and services in a manner that may discourage customers from purchasing our products. In addition, we face competition from smaller emerging processing equipment companies, whose strategy is to provide a portion of the products and services that we offer at often lower prices than ours, using innovative technology to sell products into specialized markets. Loss of competitive position could impair our prices, customer orders, revenue, gross margin, and market share, any of which would negatively affect our financial position and results of operations. Our failure to compete successfully with these other companies would seriously harm our business. There is a risk that larger, better financed competitors will develop and market more advanced products than those we currently offer, or that competitors with greater financial resources may decrease prices, thereby putting us under financial pressure.
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Risks Related to Manufacturing and Supply Chain
Manufacturing interruptions or delays could affect our ability to meet customer demand and lead to higher costs, while the failure to accurately estimate customer demand could result in excess or obsolete inventory.
Our business depends on timely supply of equipment, services and related products that meet the rapidly changing technical and volume requirements of our customers. Some key parts to our products are subject to long lead-times and/or obtainable only from a single supplier or limited group of suppliers. Cyclical industry conditions and the volatility of demand for manufacturing equipment increase capital, technical, operational and other risks for us and for companies throughout our supply chain. Further, these conditions may cause some suppliers to scale back operations, exit businesses, merge with other companies, or file for bankruptcy protection and possibly cease operations. We have also experienced and continue to experience significant disruptions in our supply chain, resulting in delays and higher costs to procure certain components and materials that we utilize in our business.
We may also experience significant interruptions of our manufacturing operations, delays in our ability to deliver products or services, increased costs or customer order cancellations as a result of:
| ● | The failure or inability of suppliers to timely deliver sufficient quantities of quality parts on a cost-effective basis; | |
| ● | Volatility in the availability and cost of materials, including rare earth elements; | |
| ● | Difficulties or delays in obtaining required import or export approvals; | |
| ● | Information technology or infrastructure failures; and | |
| ● | Natural disasters or other events beyond our control (such as earthquakes, floods or storms, regional economic downturns, pandemics, social unrest, political instability, terrorism, or acts of war). |
If a supplier fails to meet our requirements concerning quality, cost, or other performance factors, we may transfer our business to alternative sources, which could entail manufacturing delays, additional costs, or other difficulties. In addition, if we need to rapidly increase our business and manufacturing capacity to meet increases in demand or expedited shipment schedules, this may exacerbate any interruptions in our manufacturing operations and supply chain and the associated effect on our working capital.
Supply chain delays and cost increases that may adversely affect our business, including potential cost increases from the imposition of tariffs.
Geopolitical developments across Europe, Asia and Middle East have and may continue to restrict our ability to procure raw materials and components such as nickel and integrated circuits. We have experienced increased costs on certain components as well as delays in supply chain delivery, which may also impact on our ability to recognize revenue and reduce our gross profit margins, as well as extend our manufacturing lead times and reduce our manufacturing efficiencies. In addition, political and trade tensions have resulted in the imposition of tariffs which may affect our supply chain and the costs of components and materials. Any significant increases in tariffs on components and materials that we purchase could negatively affect our business and results of operations. We have begun placing orders with more lead time to help mitigate the manufacturing delays, as well as assessing other suppliers or components to attempt to mitigate the potential cost impacts. In addition, we are utilizing our in-house flexible manufacturing to attempt to further mitigate both potential schedule delivery delays and material cost increase, as well as increasing sales prices. While we have taken actions to mitigate the potential negative impacts to our revenue and profitability, there can be no assurance of the ultimate impact and the length of time that the supply chain factors, including tariffs, may impact our revenues and profitability.
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Inflation has and may continue to adversely affect our business, financial condition, and results of operations.
Recent global inflation has adversely affected our costs, including the cost of materials, production, and labor. As such, we have had to implement measures to mitigate the negative impacts of inflation on our costs. As the selling prices in our customer contracts are fixed, any increase in the cost of materials, labor and other costs as we manufacture any system would negatively impact our gross margins and results of operations. Longstanding or increased periods of inflation could perpetuate these material adverse effects on our business, financial condition and results of operations.
If our critical suppliers fail to deliver enough quality materials and components in a timely and cost-effective manner, it could negatively affect our business.
We use numerous unrelated suppliers of materials and components. Due to geopolitical developments across Europe and Asia, we are experiencing reduced availability of raw materials and components. In turn, any reduction in the availability of these materials and components may reduce our ability to obtain sufficient amounts in a cost-effective manner. We generally do not have guaranteed supply arrangements with our suppliers. Because of the variability and uniqueness of our customers’ orders, we try to avoid maintaining an extensive inventory of materials and components for manufacturing. While we are not dependent on any principal or major supplier for most of our material and component needs, switching to an alternative supplier may take significant amounts of time and added expense, which could result in a disruption of our operations and adversely affect our business. It is not always practical or even possible to ensure that component parts are available from multiple suppliers; accordingly, we procure some key parts from a single supplier or a limited group of suppliers. At certain times, increases in demand for capital equipment can result in longer lead-times for many important system components, which may cause delays in meeting shipments to our customers. The delay in the shipment of even a few systems could cause significant variations in our quarterly revenue, operating results and the market value of our common stock.
Our manufacturing facilities in Central Islip, New York and Saugerties, New York could be affected due to multiple weather risks, including risks to our Central Islip facility from hurricanes and similar phenomena.
Our manufacturing facilities are in Central Islip, New York and Saugerties, New York and could be affected by multiple weather risks, most notably hurricanes for our Central Islip facility which is located on Long Island, New York. Although we carry property and casualty insurance and business interruption insurance, future possible disruptions of operations or damage to property, plant and equipment due to hurricanes or other weather risks could result in impaired production and affect our ability to meet our commitments to our customers and impair important business relationships, the loss of which could adversely affect our operations and profitability. We do, however, maintain a backup power source at our Central Islip facility.
Risks related to cybersecurity, intellectual property and regulatory compliance
If we are subject to cyberattacks, we could incur substantial costs and, if such attacks are successful, we could incur significant liabilities, reputational harm, and disruption to our operations.
We manage, store, and transmit proprietary information and sensitive data relating to our operations. We may be subject to breaches of the information technology systems we use for these purposes. Experienced computer programmers and hackers may be able to penetrate our network security and misappropriate and/or compromise our confidential information (and/or third-party confidential information), create system disruptions, or cause shutdowns. Computer programmers and hackers also may be able to develop and deploy viruses, worms, and other malicious software programs that attack our systems or our products, or that otherwise exploit any security vulnerabilities.
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While we have an active security training program for all employees during the year, utilize intrusion prevention and detection systems, as well as hardware firewall and virus security, the costs to address the foregoing security problems and security vulnerabilities before or after a cyber-incident could be significant. Our remediation efforts may not be successful and could result in interruptions, delays, or cessation of service, and loss of existing or potential customers, impeding our sales, manufacturing, distribution, or other critical functions. In addition, breaches of our security measures and the unapproved dissemination of proprietary information or sensitive data about us, our customer, or other third parties, could expose us, our customers, or other third parties to a risk of loss or misuse of this information, resulting in litigation and potential liability for us, damage our reputation, or otherwise harm our business.
Our financial position and results of operations may be materially harmed if we are unable to recover our investment in research and development.
The rapid change in technology in our industry requires that we continue to make substantial investments in research and development and selective acquisitions of technologies and products, to enhance the performance and functionality of our product line, to keep pace with competitive products and to satisfy customer demands for improved performance, features and functionality. There can be no assurance that revenue from future products or enhancements will be sufficient to recover the development costs associated with such products, enhancements, or acquisitions, or that we will be able to secure the financial resources necessary to fund future research and development or acquisitions. Research and development costs are typically incurred before we confirm the technical feasibility and commercial viability of a product, and not all development activities result in commercially viable products. In addition, we cannot ensure that products or enhancements will receive market acceptance, or that we will be able to sell these products at prices that are favorable to us. Our business could be seriously harmed if we are unable to sell our products at favorable prices, or if our products are not accepted by the markets in which we operate.
We have made investments in our proprietary technologies. If third parties violate our proprietary rights, or accuse us of infringing upon their proprietary rights, such events could result in a loss of value of some of our intellectual property or costly litigation.
We attempt to protect certain of our intellectual property rights by obtaining patent and trademark protection where we believe it is appropriate to do so. While patent, copyright and trademark protection for our intellectual property may be important, we believe our future success in highly dynamic markets is most dependent upon the technical competence and creative skills of our personnel. We may also attempt to protect our trade secrets and other proprietary information through confidentiality agreements with our customers, suppliers, employees, and consultants, and through other internal security measures. However, these employees, consultants and third parties may breach these agreements, and we may not have adequate remedies for wrongdoing. In addition, the laws of certain territories in which we sell our products may not protect our intellectual property rights to the same extent as do the laws of the United States.
Occasionally, we may receive communications from other parties asserting the existence of patent rights or other intellectual property rights that they believe cover certain of our products, processes, technologies, or information. In addition, it is possible we could have a dispute with a customer concerning the use of intellectual property utilized in their equipment. If such cases arise, we will evaluate our position and consider the available alternatives, which may include seeking licenses to use the technology in question on commercially reasonable terms, developing new alternative technology or defending our position. Nevertheless, we cannot ensure that we will be able to obtain licenses, or, if we are able to obtain licenses, which related terms will be acceptable, or that litigation or other administrative proceedings will not occur. Defending our intellectual property rights through litigation could be very costly. If we cannot negotiate the necessary licenses on commercially reasonable terms or successfully defend our position, our ability to utilize such intellectual property could substantially inhibit our access to certain markets and our ability to compete in these markets which could have a material adverse effect on our financial position and results of operations.
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We may be unable to obtain required export licenses for the sale of our products.
Whether with respect to sales to customers located in China or otherwise, products which (i) are manufactured in the United States, (ii) incorporate controlled U.S. origin parts, technology, or software, or (iii) are based on U.S. technology, are subject to the U.S. Export Administration Regulations (“EAR”) when exported to and re-exported from international jurisdictions, in addition to the local jurisdiction’s export regulations applicable to individual shipments. Licenses or proper license exceptions may be required for the shipment of our products to certain customers or countries. Obtaining an export license or determining whether an export license exception exists often requires considerable effort by us and cooperation from the customer, which can add time to the order fulfillment process. We may be unable to obtain required export licenses or qualify for export license exceptions and, as a result, we may be unable to export products to our customers and/or meet their servicing needs. Non-compliance with the EAR or other applicable export regulations could result in a wide range of penalties including the denial of export privileges, fines, criminal penalties, and the seizure of commodities. If an export regulatory body determines that any of our shipments violate applicable export regulations, we could be fined significant sums and our export capabilities could be restricted, which could have a material adverse impact on our business.
Failure to comply with the United States Foreign Corrupt Practices Act could subject us to penalties and other adverse consequences.
We are subject to the United States Foreign Corrupt Practices Act, which generally prohibits United States companies from engaging in bribery or other prohibited payments to foreign officials for the purpose of obtaining or retaining business. We have agreements with third parties and make sales in countries known to experience corruption, extortion, bribery, pay-offs, theft, and other fraudulent practices. If our employees or other agents are found to have engaged in such practices, we could suffer severe penalties and other consequences that may have a material adverse effect on our business, financial condition, and results of operations.
We are subject to environmental regulations, and our inability or failure to comply with these regulations could adversely affect our business.
We are subject to environmental regulations in connection with our business operations, including regulations related to the development and manufacture of our products and our customers’ use of our products. Our failure or inability to comply with existing or future environmental regulations could result in significant remediation liabilities, the imposition of fines or the suspension or termination of development, manufacturing, or use of certain of our products, or affect the operation of our facilities, use or value of our real property, each of which could damage our financial position and results of operations.
Regulations related to conflict minerals will force us to incur additional expenses, may make our supply chains more complex, and may result in damage to our relationships with customers.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act, the SEC adopted requirements for companies that manufacture products that contain certain minerals and metals known as “conflict minerals”. These rules require public companies to perform diligence and to report annually to the SEC whether such minerals originate from the Democratic Republic of Congo and adjoining countries. The implementation of these requirements could adversely affect the sourcing, availability, and pricing of minerals we use in the manufacture of our products. In addition, we have incurred and will continue to incur additional costs to comply with the disclosure requirements, including costs related to determining the source of any of the relevant minerals used in our products. Given the complexity of our supply chain, we may not be able to ascertain the origins of these minerals used in our products through the due diligence procedures that we implement, which may harm our reputation. We may also face difficulties in satisfying customers who may require that our products be certified as conflict mineral free, which could harm our relationships with these customers and lead to a loss of revenue. These requirements could limit the pool of suppliers that can provide conflict-free minerals, and we may be unable to obtain conflict-free minerals at competitive prices, which could increase our costs and adversely affect our manufacturing operations and our profitability.
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Risks Related to Financial and Accounting Matters
Volatile demand for our products may make it difficult for us to accurately budget our expense levels, which are based in part on our projections of future revenues.
Historically, demand for our equipment and related consumable products have been volatile because of changes in supply and demand, our ability to market and sell our products and other factors in the manufacturing process. Our orders levels tend to be more volatile than our revenue, as any change in demand is reflected immediately in orders booked, which are net of cancellations, while revenue, tends to be recognized over multiple quarters because of procurement and production lead times, and the deferral of certain revenue under our revenue recognition policies. The fiscal period in which we can recognize revenue is also at times subject to the length of time that our customers require to evaluate the performance of our equipment. This could cause our quarterly operating results to fluctuate.
When fluctuations in our order levels and backlog result in lower-than-expected revenue levels, operating results have been and may continue to be materially adversely affected, and cost reduction measures have been and may continue to be necessary for us to remain competitive and financially sound. During a down cycle, we must be able to make timely adjustments to our cost and expense structure to correspond to the prevailing market conditions. In addition, during periods of rapid growth, we must be able to increase manufacturing capacity and the number of our personnel to meet customer demand, which may require additional liquidity. We can provide no assurance that these objectives can be met in a timely manner in response to changes within the industry cycles in which we operate. If we fail to respond to these cyclical changes, our business could be seriously harmed.
We do not have long-term volume production contracts with our customers, and we do not control the timing or volume of orders placed by our customers. Whether and to what extent our customers place orders for any specific products, and the mix and quantities of products included in those orders are factors beyond our control. Insufficient orders would result in under-utilization of our manufacturing facilities and infrastructure and will negatively affect our financial position and results of operations.
We might require additional financing.
Our continuing operating losses may make it difficult for us to obtain financing on commercially reasonable terms, if at all. If adequate financing is not available when required on commercially reasonable terms, if at all, our business and operations may be materially and adversely affected. In addition, we could issue additional common stock, to fund our growth initiatives and operations which could materially dilute the ownership interests of the then existing shareholders.
We may, in the future, identify deficiencies in controls over financial reporting.
While we have concluded that, as of December 31, 2025, our disclosure and reporting controls were effective as included in Part II, Item 9A, there can be no assurance that material weaknesses will not be identified in the future. If we do identify material weaknesses in our internal controls over financial reporting in the future, our ability to analyze, record and report financial information free of material misstatements, and to prepare our financial statements within the time periods specified by the rules and forms of the SEC, may likely be adversely affected.
We have and may continue to be required to take impairment charges on assets.
We are required to assess our long-lived assets, consisting of our property, plant and equipment, for recoverability and impairment whenever there are indicators or impairment, such as an adverse change in business climate.
As part of our long-term strategy, we have pursued acquisitions of other companies or assets, and may pursue future acquisitions of other companies or assets which could potentially increase our assets. Adverse changes in business conditions could materially impact our estimates of future operations and result in impairment charges to these assets.
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If our assets were impaired, our financial condition and results of operations could be materially and adversely affected.
Acquisitions can result in an increase in our operating costs, divert management’s attention away from other operational matters and expose us to other associated risks.
We evaluate potential acquisitions of businesses and technologies, and we consider targeted acquisitions that expand our core competencies to be an important part of our future growth strategy. In the past, we have made acquisitions of other businesses with synergistic products, services and technologies, and plan to continue to do so in the future.
Acquisitions involve numerous risks, which include but are not limited to:
| ● | difficulties and increased costs in connection with the integration of the personnel, operations, technologies, services and products of the acquired companies into our existing facilities and operations; | |
| ● | diversion of management’s attention from other operational matters; | |
| ● | failure to commercialize the acquired technology; | |
| ● | the potential loss of key employees of the acquired companies; | |
| ● | lack of synergy, or inability to realize expected synergies, resulting from the acquisitions; | |
| ● | the risk that the issuance of our common stock, if any, in an acquisition or merger could be dilutive to our shareholders; | |
| ● | the inability to obtain and protect intellectual property rights in key technologies; and | |
| ● | the acquired assets becoming impaired as a result of technological advancements or worse-than-expected performance of the acquired assets. |
Risks Related to Product Liability
We face the risk of product liability claims.
The manufacture and sale of our products, which in operation sometimes involve the use of toxic materials and extreme temperatures and could result in product liability claims. For example, our rapid thermal processing systems used to heat semiconductor materials to temperatures more than 1000º Celsius have certain inherent risks. A failure of our products at a customer site could also result in losses due to interruption of the business operations of our customer. While we regularly evaluate the nature and limits of our insurance coverages, there can be no assurance that our existing policies of insurance will be adequate to protect us from all liabilities that we might incur in connection with the manufacture and sale of our products in the event of a successful product liability claim or series of successful claims against us.
The health and environmental effects of nanotechnology are unknown, and this uncertainty could adversely affect the expansion of our business.
The health and environmental effects of nanotechnology are unknown. There is no scientific agreement on the health effects of nanomaterials in general and carbon nanotubes but some scientists believe that in some cases, nanomaterials may be hazardous to an individual’s health or to the environment.
The science of nanotechnology is based on arranging atoms in such a way as to modify or build materials not made in nature; therefore, the effects are unknown. Future research into the effects of nanomaterials in general, and carbon nanotubes, on health and environmental issues, may have an adverse effect on products incorporating nanotechnology. Since part of our growth strategy is based on sales of research equipment to produce carbon nanotubes and the sale of such materials, the determination that these materials are harmful could adversely affect the expansion of our business.
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Risks Related to our Stock
The price of our common shares is volatile and could decline significantly.
The stock market in general and the market for technology stocks have experienced volatility. If those industry-based market fluctuations continue, the trading price of our common shares could decline significantly independent of the overall market, and shareholders could lose all or a substantial part of their investment. The market price of our common shares could fluctuate significantly in response to several factors, including, among others:
| ● | difficult macroeconomic conditions, unfavorable geopolitical events, and general stock market uncertainties, such as those occasioned by a global liquidity crisis and a failure of large financial institutions; | |
| ● | an offering of our common shares to raise capital; | |
| ● | receipt of large orders or cancellations of orders for our products; | |
| ● | issues associated with the performance and reliability of our products; | |
| ● | actual or anticipated variations in our results of operations; | |
| ● | announcements of financial developments or technological innovations; | |
| ● | changes in recommendations and/or financial estimates by investment research analysis; | |
| ● | strategic transactions, such as acquisitions, divestitures, or spin-offs; | |
| ● | offerings of our securities; | |
| ● | the occurrence of major catastrophic events; and | |
| ● | volatile trading volumes. |
Significant price and value fluctuations have occurred with respect to our publicly traded securities and those of technology companies generally. The price of our common shares is likely to be volatile in the future. In the past, securities class action litigation often has been brought against a company following periods of volatility in the market price of its securities. If similar litigation were pursued against us, it could result in substantial costs and a diversion of management’s attention and resources, which could materially and adversely affect our financial condition, results of operations, and liquidity.
General Risks
Our success is highly dependent on the technical, sales, marketing and managerial contributions of key individuals, including our Chief Executive Officer and President, and we may be unable to retain these individuals or recruit others.
We depend on our senior executives including our Chief Executive Officer and President, and certain key managers as well as, engineering, research and development, sales, marketing and manufacturing personnel, who are critical to our business. Except for our Chief Executive Officer and President, we do not have employment agreements with our key employees. Furthermore, the current labor market remains very competitive and challenging for the acquisition and retention of key employees. Larger competitors may be able to offer more generous compensation packages to our executives and key employees, and therefore we risk losing key personnel to those competitors. If we were to lose the services of any of our key personnel, our engineering, product development, manufacturing and sales efforts could be slowed. We may also incur increased operating expenses and be required to divert the attention of our senior executives to search for their replacements. The integration of any new personnel could disrupt our ongoing operations.
We may not be able to hire or retain the number of qualified personnel, particularly engineering personnel, required for our business, which would harm the development and sales of our products and limit our ability to grow.
Competition in our industry for senior management, technical, sales, marketing and other key personnel is intense and has been made even more challenging in the current labor market. If we are unable to retain our existing personnel, or attract and train additional qualified personnel, our growth may be limited due to a lack of capacity to develop and market our products.
We have, from time to time, had trouble in hiring and retaining skilled engineers with appropriate qualifications to support our growth strategy. Our success depends on our ability to identify, hire, train and retain qualified engineering personnel with experience in equipment design. Specifically, we need to continue to attract and retain mechanical, electrical, software and field service engineers to work with our direct sales force to technically qualify and perform on new sales opportunities and orders, and to demonstrate our products.
In response to the continued fluctuations in our order rates and the recent decline in the bookings of our CVD Equipment division, we have reduced our workforce during 2025. These actions could result in an increase in future employee turnover or otherwise impact our ability to hire and retain qualified personnel.
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| Item 1B. | Unresolved Staff Comments |
None.
| Item 1C. | Cybersecurity |
To manage our material risks from cybersecurity threats and to protect against, detect, and prepare to respond to cybersecurity incidents, we undertake the below listed activities:
| ● | Monitor emerging data protection laws and implement changes to our compliance processes; | |
| ● | Conduct periodic cybersecurity assessments for employees who use our system to evaluate training needs; | |
| ● | Conduct onboarding and cyber security training for all employees on an ongoing basis; | |
| ● | Conduct regular phishing email simulations for all employees; and | |
| ● | Carry cybersecurity risk insurance that protects against the potential losses from a cybersecurity incident. |
Our
incident response plan coordinates the activities that we and our
We describe whether and how risks from cybersecurity threats have or are reasonably likely to affect our financial position, results of operations, and cash flows under the heading “Risk related to cybersecurity, intellectual property and regulatory compliance,” which is included as part of Item 1A. Risk Factors of this Annual Report on Form 10-K, which disclosures are incorporated by reference herein.
| Item 2. | Properties |
Our corporate headquarters, research and development, manufacturing and process coating facilities as of December 31, 2025 are as follows:
| Owned Locations | Size (sf) | Segment | Mortgage/Loan | Principal use | ||||
| Central Islip, NY | 128,000 | CVD Equipment / MesoScribe | No | Corporate headquarters; R&D; Manufacturing | ||||
| Saugerties, NY | 22,000 | SDC | No | Manufacturing; Administration |
| Item 3. | Legal Proceedings. |
Not applicable.
| Item 4. | Mine Safety Disclosures. |
Not applicable.
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PART II
| Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
Market Information for Common Stock
Our common stock is traded on the NASDAQ Capital Market under the symbol “CVV”.
Dividend Policy
We have never paid dividends on our common stock, and we do not anticipate paying dividends on common stock at the present time. We currently intend to retain earnings, if any, for use in our business. There can be no assurance that we will ever pay dividends on our common stock. Our dividend policy with respect to our common stock is within the discretion of the Board of Directors and its policy with respect to dividends in the future will depend on numerous factors, including earnings, financial requirements, and general business conditions.
Stockholders
As of March 27, 2026, there were approximately 46 holders of record and approximately 4,235 beneficial owners of our common stock.
Recent Sales of Unregistered Securities
None.
Issuer Purchases of Equity Securities
None.
| Item 6. | Reserved. |
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| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
You should read the following discussion and analysis in conjunction with our consolidated financial statements and related notes contained elsewhere in this report. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of a variety of factors discussed in this report and those discussed in other documents we file with the SEC. In light of these risks, uncertainties and assumptions, readers are cautioned not to place undue reliance on such forward-looking statements. These forward-looking statements represent beliefs and assumptions as of the date of this report. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change. Past performance does not guarantee future results.
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.
During 2025:
| ● | Revenue decreased by $1.1 million or 4.1% as compared to the prior year due to decreases in revenues from aerospace and industrial contracts in progress in our CVD segment, lower revenues in our SDC segment and the lower revenues related to the ceasing of MesoScribe’s operations. | |
| ● | Gross profit increased by $1.2 million or 20.4% as compared to the prior year due principally to a $1.6 million non-cash charge in 2024 to reduce certain inventory to net realizable value. | |
| ● | Total bookings for 2025 were approximately $13.0 million as compared to $28.1 million in 2024. The decrease in bookings of $15.1 million was related to a decrease in orders for systems in our CVD Equipment segment due in part to macroeconomic issues associated with tariffs, reduction in university funding and the U.S. government shutdown during 2025. | |
| ● | Our backlog declined from $19.4 million to $6.6 million due to the reduction in bookings, a decrease of $12.8 million or 66.0%. | |
| ● | Cash balance at December 31, 2025 was $8.7 million as compared to $12.6 million at December 31, 2024 |
Business Update
On March 23, 2026, we entered into a definitive agreement under which our SDC business division will be sold to a subsidiary of the Atlas Copco Group. The purchase price amounts to approximately $16.9 million in cash, subject to certain purchase price adjustments. The transaction is expected to close during the second quarter of 2026, subject to customary closing conditions.
We expect to use the proceeds from the transaction to enhance financial flexibility and support initiatives aimed at creating shareholder value. The expected net cash proceeds after payment of transaction expenses and taxes are approximately $15.0 million, of which $900,000 will be held in escrow to cover post-closing adjustments and indemnification obligations under the agreement.
CVD will retain ownership of its Saugerties, New York facility, which will be leased to the acquiring company for an initial term of two years following the closing of the transaction.
On November 6, 2025, our Board of Directors approved a comprehensive strategy to transform our Company in response to the continued fluctuations in our order rates and the recent decline in the bookings of our CVD Equipment division. As part of this strategy, we transitioned our operating model for our CVD Equipment business from vertically integrated fabrication to outsourced fabrication of certain components to reduce our fixed operating costs.
The transformation strategy also includes the exploration of strategic alternatives for businesses and product lines, including the potential sale or divestiture of assets or business lines.
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We completed the workforce reduction plan during the fourth quarter of 2025 and incurred approximately $0.1 million in severance and other charges. As of December 31, 2025, the Company classified certain manufacturing equipment as held for sale with a fair value of $0.5 million based on an agreement the Company entered into in January 2026 with a third-party to sell the equipment for this amount. The Company recorded an impairment charge of $0.2 million related to this equipment and related capitalized software during the year ended December 31, 2025.
Our core strategy remains focused on serving key markets related to aerospace, microelectronics/power electronics and industrial 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 to produce specialty coatings for advanced high temperature environments.
In October 2025, we received an order for two PVT150™ units from Stony Brook University (SBU) for their new semiconductor research center - onsemi Silicon Carbide Crystal Growth Center. The recently launched research center will enable SBU faculty, scientists, and students to conduct research on silicon carbide crystal growth and other wide band gap (WBG) materials and device-enabling technologies critical to improving energy efficiency in power semiconductors and foster the next generation of skilled professionals in this field.
Our PVT reactor design and control system architecture allows for precise process and temperature control enabling run-to-run repeatability and system-to-system matching. The PVT system platform is also being considered to process other WBG materials such as aluminum nitride (AlN) to support the development of emerging, high performance semiconductor materials.
Our PVT systems may provide us with standard product offerings to continue to support the EV focused market as well as energy storage, power conversion and power transmission. In addition, SiC semiconductors specifically help address the need for high energy efficiency and power density in the AC-DC stage in power supply units for AI data centers. We plan to evaluate the market conditions and opportunities to expand our product offerings in the power electronics market.
We have generally gained new customers through our industry reputation, as well as print advertising and trade show attendance. We have increased the number of trade shows and industry conferences we attend.
The global economy continues to confront the impacts of recent executive orders by the U.S. federal administration regarding tariffs on imports from various countries including the European Union, Canada, Mexico, and China and the potential impact of actions taken by other countries in response to the announced tariffs. Tariffs may make our products less cost competitive and reduce gross margins. The impact on our business related to these or any other tariffs that may be imposed, is uncertain and depends on multiple factors, including the duration and expansion of current tariffs, future changes to tariff rates, scope or enforcement, retaliatory measures by impacted trade partners, and related inflationary effects.
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Results of Operations
Years Ended December 31, 2025, and 2024
The following table presents revenue and expense line items reported in our Consolidated Statements of Operations for the years ended December 31, 2025, and 2024 and the period-over-period dollar and percentage changes for those line items (in thousands, except percentages).
| December 31, 2025 | December 31, 2024 | Change | Percent | |||||||||||||
| Revenue | $ | 25,786 | $ | 26,876 | $ | (1,090 | ) | (4.1 | %) | |||||||
| Cost of revenue | 18,498 | 20,825 | (2,327 | ) | (11.2 | %) | ||||||||||
| Gross profit | 7,288 | 6,051 | 1,237 | 20.4 | % | |||||||||||
| Operating expenses | ||||||||||||||||
| Research and development | 2,786 | 2,627 | 159 | 6.1 | % | |||||||||||
| Selling | 1,443 | 1,656 | (213 | ) | (12.9 | %) | ||||||||||
| General and administrative | 4,806 | 4,901 | (95 | ) | (1.9 | %) | ||||||||||
| Impairment charges | 163 | - | 163 | * | ||||||||||||
| Gain on sales of equipment | - | (717 | ) | 717 | * | |||||||||||
| Total operating expenses | 9,198 | 8,467 | 731 | 8.6 | % | |||||||||||
| Operating loss | (1,910 | ) | (2,416 | ) | 506 | (20.9 | %) | |||||||||
| Other income (expense): | ||||||||||||||||
| Interest income | 341 | 559 | (218 | ) | (39.0 | %) | ||||||||||
| Interest expense | (13 | ) | (19 | ) | 6 | 31.6 | % | |||||||||
| Other income | - | 2 | (2 | ) | * | |||||||||||
| Total other income, net | 328 | 542 | (214 | ) | (39.5 | %) | ||||||||||
| Loss before income tax | (1,582 | ) | (1,874 | ) | 292 | 15.6 | % | |||||||||
| Income tax expense | 3 | 24 | (21 | ) | * | |||||||||||
| Net loss | $ | (1,585 | ) | $ | (1,898 | ) | $ | 313 | 16.5 | % | ||||||
* Not meaningful
Revenue
December 31, 2025 | December 31, 2024 | Change | Percent | |||||||||||||
| CVD Equipment | $ | 18,079 | $ | 18,288 | $ | (209 | ) | (1.1 | %) | |||||||
| SDC | 7,937 | 8,444 | (507 | ) | (6.0 | %) | ||||||||||
| MesoScribe | 112 | 778 | (666 | ) | (85.6 | %) | ||||||||||
| Intersegment sales elimination | (342 | ) | (634 | ) | 292 | 46.1 | % | |||||||||
| Total | $ | 25,786 | $ | 26,876 | $ | (1,090 | ) | (4.1 | %) | |||||||
Our revenue for the year ended December 31, 2025 was $25.8 million as compared to $26.9 million for the year ended December 31, 2024, a decrease of $1.1 million or 4.1%.
The decrease in revenue versus the prior year period was primarily attributable to lower revenue of $0.2 million from our CVD Equipment segment, a $0.5 million decrease in revenue from our SDC segment and $0.7 million lower MesoScribe revenues which ceased operations in 2024. Revenue from two customers for the year ended December 31, 2025 represented 27.6% and 13.7% of our consolidated revenues and 39.5% and 19.6% of CVD Equipment segment revenues, respectively.
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The revenue contributed by our CVD Equipment segment for the year ended December 31, 2025 of $18.1 million (net of intersegment revenue of $23,000) represented 70.0% of overall revenue as compared to $18.3 million (net of intersegment revenue of $8,000) or 68.0% of overall revenue for the year ended December 31, 2024. The decrease in external revenues of $0.2 million or 1.2% resulted principally from lower system revenues due to lower orders during 2025 offset by higher non-system revenues, principally spare parts.
The revenue contributed by our SDC segment for the year ended December 31, 2025 of $7.6 million (net of intersegment sales of $0.3 million) represented 29.5% of overall revenue as compared to $7.8 million (net of intersegment sales of $0.6 million) or 29.1% of overall revenue for the year ended December 31, 2024. External revenue for our SDC segment decreased by $0.2 million or 2.6%.
The revenue contributed by our MesoScribe segment for the year ended December 31, 2025 of $0.1 represented 0.4% of our overall revenue as compared to $0.8 million or 2.9% of overall revenue for the year ended December 31, 2024. MesoScribe fulfilled its final orders during 2024 and ceased operations. Revenue in 2025 was principally a license fee.
Our order backlog at December 31, 2025 was approximately $6.6 million as compared to December 31, 2024 of $19.4 million. Our order backlog at December 31, 2025 consists of approximately $4.9 million related to remaining performance obligations of contracts in progress and not yet started and the balance of approximately $1.7 million represents other orders received from customers. As of December 31, 2025, one aerospace customer represented 29.4% of our backlog and one industrial customer represented 15.4% of our backlog. Historically, our revenues and orders have fluctuated based on changes in order rate and demand as well as factors in our manufacturing process that impacts the timing of revenue recognition. Accordingly, orders received from customers and revenue recognized may fluctuate from quarter to quarter.
Gross Profit
Gross profit for the year ended December 31, 2025 amounted to $7.3 million, with a gross profit margin of 28.3%, compared to a gross profit of $6.1 million and a gross profit margin of 22.5% for the year ended December 31, 2024. The increase in gross profit of $1.2 million was primarily due to higher gross margin for CVD Equipment due principally to a $1.6 million non-cash charge in 2024 to reduce certain inventory to net realizable value. This was offset by lower gross margins at our SDC and MesoScribe segments due principally to lower revenues.
Research and Development
For the year ended December 31, 2025, research and development expenses were $2.8 million, or 10.8% of revenue as compared to $2.6 million, or 9.8% for the year ended December 31, 2024. The increase was due to less time charged to contracts in progress partially offset by lower personnel costs.
General engineering support and expenses related to the development of more standard 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 $1.4 million or 5.6% of the revenue for the year ended December 31, 2025 as compared to $1.7 million or 6.2% for the year ended December 31, 2024. The decrease was primarily due to lower personnel costs.
General and Administrative
General and administrative expenses for the year ended December 31, 2025 were $4.8 million or 18.6% of revenue compared to $4.9 million or 18.2% of revenue for the year ended December 31, 2024, a decrease of $0.1 million. The decrease in 2025 was due to lower employee compensation and lower professional fees.
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Impairment Charge
At December 31, 2025, we classified certain excess manufacturing equipment as held for sale with a fair value of $0.5 million based on an agreement with a third-party to sell the equipment for this amount. The Company recorded an impairment charge of $0.2 million related to this equipment and related capitalized software during the year ended December 31, 2025.
Gain on Sales of Equipment
During 2024, we recognized a gain of $0.6 million on the sale of equipment related to MesoScribe representing the sale price of $0.8 million less the costs of the equipment sold of $0.2 million. We also recognized a gain of $42,000 on the sale of equipment by our CVD Equipment segment.
Other Income, Net
Other income (expense) consists principally of interest income on U.S. treasury securities and was lower than the prior year quarter due to less funds available for investment and lower interest rates.
Income Taxes
Income tax expense for the years ended December 31, 2025 and 2024, was $3,000 and $24,000 respectively. We continue to evaluate for 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.
Inflation and Supply Chain Matters
We experienced increased costs on certain materials and components as well as delays in supply chain delivery, which may also impact our ability to recognize revenue and reduce our gross profit margins, as well as extend our manufacturing lead times and reduce our manufacturing efficiencies. We have commenced placing orders with more lead time to help mitigate the manufacturing delays, as well as assessing other suppliers or components to attempt to mitigate the potential cost impacts. While we have initiated actions to mitigate the potential negative impacts to our revenue and profitability, there can be no assurance of the ultimate impact and the length of time that the supply chain factors may impact our revenues and profitability.
Inflation has also had an impact on salaries and compensation. To remain competitive in the acquisition and retention of our employees, we have reviewed and adjusted salaries and implemented bonus incentives to mitigate the potential negative impacts of inflation on our employees.
Any significant increases in tariffs on goods that we purchase could negatively affect our business and results of operations by increasing the cost to manufacture our products.
Liquidity and Capital Resources
As of December 31, 2025, we had aggregate working capital of $14.1 million compared to aggregate working capital of $13.8 million at December 31, 2024. Our cash and cash equivalents at December 31, 2025 and 2024 were $8.7 million and $12.6 million, respectively.
Net cash used in operating activities during 2025 was $3.7 million and was principally due to the net loss of $1.6 million and net increase in contract assets and liabilities of $3.5 million, offset by a reduction in inventory of $0.5 million, and non-cash items of $1.6 million.
Net cash used in investing activities for the year ended December 31, 2025 of $0.1 million consisted of purchases of equipment and investment in captive insurance company.
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Net cash used in financing activities for the year ended December 31, 2025 consisted of repayments of $0.1 million 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-K. 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
Use of 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.
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.
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.
We have been engaged in the production and delivery of goods on a continual basis under contractual arrangements for many years. Historically, we have demonstrated an ability to accurately estimate total revenues and total expenses relating to our long-term contracts. However, there exist many inherent risks and uncertainties in estimating revenues, expenses and progress toward completion, particularly on larger or longer-term contracts. If we do not estimate the total sales, related costs, and progress toward completion on such contracts, the estimated gross margins may be significantly impacted, 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.
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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. It is not possible for us to predict the likelihood of any possible future impairments or, if such an impairment were to occur, the magnitude of any impairment.
| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk. |
Not applicable.
| Item 8. | Financial Statements and Supplementary Data. |
The consolidated financial statements required by this item are included in this Annual Report on Form 10-K beginning on page F-1.
| Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. |
None.
| Item 9A. | Controls and Procedures. |
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, management of the Company, 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 December 31, 2025.
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-K, 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.
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Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining effective internal control over financial reporting (as defined in Rule 13a – 15(f) of the Exchange Act). There are inherent limitations to the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding of controls. Accordingly, even effective internal controls can provide only reasonable assurance with respect to financial statement preparation. Further, because of changes in conditions, the effectiveness of internal control may vary over time. We have assessed the effectiveness of our internal controls over financial reporting (as defined in Rule 13a -15(f) of the Exchange Act) as of December 31, 2025. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in “Internal Control – Integrated Framework (2013)”. Management concluded that, as of December 31, 2025, our internal control over financial reporting was effective based on the criteria established by the COSO Internal Control Framework.
This Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to the rules of the Securities and Exchange Commission that permit us to provide only management’s report in this Annual Report on Form 10-K.
Changes in Internal Control Over Financial Reporting
There has not been any change in our internal control over financial reporting (as that term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our year ended December 31, 2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
| Item 9B. | Other Information. |
| Item 9C. | Disclosure Regarding Foreign Jurisdictions That Prevent Inspections. |
Not applicable.
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PART III
| Item 10. | Directors, Executive Officers, and Corporate Governance. |
Background and Experience of Directors
When considering whether directors and nominees have the experience, qualifications, attributes or skills, taken as a whole, to enable the Board of Directors to satisfy its oversight responsibilities effectively in light of our business and structure, the Nominating, Governance and Compliance Committee focused primarily on each person’s background and experience as reflected in the information discussed in each of the directors’ individual biographies set forth immediately below. We believe that our directors provide an appropriate mix of experience and skills relevant to the size and nature of our business. As more specifically described in such person’s individual biographies set forth below, our directors possess relevant and industry-specific experience and knowledge in the engineering, financial and business fields, as the case may be, which we believe enhances the Board’s ability to oversee, evaluate and direct our overall corporate strategy. The Nominating, Governance and Compliance Committee annually reviews and makes recommendations to the Board regarding the composition and size of the Board so that the Board consists of members with the proper expertise, skills, attributes, and personal and professional backgrounds needed by the Board, consistent with applicable regulatory requirements.
The Nominating, Governance and Compliance Committee believes that all directors, including nominees, should possess the highest personal and professional ethics, integrity, and values, and be committed to representing the long-term interests of our shareholders. The Nominating, Governance and Compliance Committee will consider criteria including the nominee’s current or recent experience as a senior executive officer, whether the nominee is independent, as that term is defined in existing independence requirements of the NASDAQ Capital Market and the Securities and Exchange Commission, the business, scientific or engineering experience currently desired on the Board, geography, the nominee’s industry experience, and the nominee’s general ability to enhance the overall composition of the Board.
The Nominating, Governance and Compliance Committee does not have a formal policy on diversity, however, in recommending directors, the Board and the Committee consider the specific background and experience of the Board members and other personal attributes in an effort to provide a diverse mix of capabilities, contributions and viewpoints which the Board believes enables it to function effectively as the Board of Directors of a company with our size and the nature of our business.
The following table sets forth the names, ages and positions with the Company of each of our directors and executive officers, as of March 30, 2026.
| Name | Age | Position(s) with the Company | ||
| Lawrence J. Waldman | 79 | Chairman of the Board of Directors, Chairman-Audit Committee | ||
| Emmanuel Lakios | 64 | Chief Executive Officer, President, Director | ||
| Robert M. Brill | 79 | Director, Chairman – Nominating, Governance, and Compliance Committee | ||
| Ashraf Lotfi | 65 | Director, Chairman – Compensation Committee | ||
| Debra Wasser | 61 | Director | ||
| Andrew Africk | 59 | Director | ||
| Richard A. Catalano | 66 | Chief Financial Officer, Executive Vice President, Secretary and Treasurer | ||
| Kevin R. Collins | 60 | Vice President and General Manager of SDC | ||
| Jeffrey A. Brogan | 56 | Vice President of Sales and Marketing | ||
| Maxim S. Shatalov | 55 | Vice President of Engineering and Technology | ||
| Warren D. Cheesman | 53 | Vice President of Manufacturing Operations |
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Lawrence J. Waldman was appointed a member of the Board of Directors on October 5, 2016 and currently serves as Chairman of the Board and Chairman of the Audit Committee. Mr. Waldman has over 40 years of experience in public accounting.
Mr. Waldman has been a member of the board of directors of Comtech Telecommunications Corporation since August 2015 and Lead Independent Director from December 2021 through March 2024. He serves as the chairperson of Comtech’s Audit Committee. Mr. Waldman is a member of the board of directors and Lead Independent Director and Audit Committee Chairperson at APYX Medical Corporation, a Nasdaq-listed advanced energy medical technology company. Mr. Waldman serves as a Senior Advisor at First Long Island Investors, LLC since 2016 and was previously an Advisor to the accounting firm of EisnerAmper LLP following his role as Partner-in-Charge of Commercial Audit Practice Development for Long Island. Mr. Waldman served as the Managing Partner of the Long Island office of KPMG LLP from 1994 through 2006, the accounting firm where he began his career in 1972. During his tenure at KPMG, Mr. Waldman served as audit partner to a number of public and privately held technology companies.
Mr. Waldman is currently Chairman of the Board of Directors of the Long Island Association and a member of the boards of directors of the Long Island Angel Network and the Advanced Energy Research Center at Stony Brook University. Through October 21, 2018, Mr. Waldman was a member of the board of directors of Northstar/RXR Metro Income, Inc., an SEC registered non-traded real estate investment trust.
Mr. Waldman was Chairman of the Supervisory Committee of Bethpage Federal Credit Union and previously served as the Chairman of the Audit Committee of the State University of New York’s (“SUNY”) Board of Trustees, the largest state university system in the United States. Mr. Waldman previously served as Chairman of the Audit and Finance Committee Board of Trustees of the Long Island Power Authority (“LIPA”), the second largest government utility in the United States, and as the Chairman of the Board. Mr. Waldman also served as an adjunct professor at Hofstra University, teaching graduate courses in advanced accounting theory and advanced auditing. Mr. Waldman is a certified public accountant in New York State. He is a member of the American Institute of Certified Public Accountants and the New York State Society of CPAs. Mr. Waldman holds a Bachelor of Science and a Master of Business Administration from Hofstra University in Hempstead, New York.
Mr. Waldman qualifies to serve as a director and Audit Committee Chairman because of his significant experience leading public company boards, his extensive relevant industry and financial and accounting expertise.
Emmanuel Lakios was appointed to serve as President and Chief Executive Officer of the Company on January 22, 2021, and on July 15, 2021 was elected by the shareholders as a member of the Board of Directors. Mr. Lakios joined the Company as Vice President Sales and Marketing in February 2017. Mr. Lakios has over 30 years of experience serving the aerospace, semiconductor, data storage and optical device industries and is the holder of several patents in the field of process equipment and device structure. From January 2015 through February 2017, Mr. Lakios was the President and Chief Executive Officer at Sensor Electronic Technology, Inc., overseeing that company’s transition from R&D to a leading global commercial UV LED supplier. From 2003 to 2011 he was the Executive Vice President of Field Operations and President and Chief Operating Officer at Imago Scientific, bringing it from pre-revenue to a commercial leadership position in the 3D atomic scale tomography field. Mr. Lakios was previously employed at Veeco Instruments Inc. from 1984 until 2003, where he held several positions, including President of the Process Equipment Group and Executive Vice President of Field Operations. He has been involved in several acquisitions and numerous product line launches. He received his BE in Mechanical Engineering with focus in Material Science from SUNY Stony Brook in 1984.
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Dr. Robert M. Brill was appointed a Director of the Company on March 5, 2021. Dr. Brill was co-founder and managing partner of Newlight Management from 1997 to 2019, which managed venture capital funds that focused on early-stage technology companies. Prior to co-founding Newlight, Dr. Brill was a general partner of Poly Ventures, a Long Island based venture capital fund. Dr. Brill is a member of the Board of Directors of the Long Island Angel Network and one private company. Dr. Brill has also previously served on the Board of Directors of multiple public and private companies. Dr. Brill has been the CEO of both public and private companies. Dr. Brill served as General Manager of Harris Corporation’s CMOS Semiconductor Division. He also held various technical and management positions at IBM’s semiconductor operation. Dr. Brill holds a Ph.D. in nuclear physics from Brown University and a B.A. and a B.S. in Engineering Physics from Lehigh University. Dr. Brill had previously served on the Company’s Board from April 2018 until October 2019.
Dr. Ashraf Lotfi is currently a venture partner with Deep Sciences Ventures and serves on the board of Lotus Microsystems, ApS, Xonia Ltd., HyperCIM Ltd. Dr. Lotfi previously served as Vice President and a Fellow at Intel Corporation. Prior to Intel, he was Power Chief Technology Officer for Altera Corporation serving its Enpirion Power Business as well as the broader Field Programmable Gate Array community. Altera was acquired by Intel in 2015. Prior to Altera, he served as President and Chief Executive Officer of Enpirion, Inc., which he founded in 2002.
From Enpirion’s inception, Dr. Lotfi led its strategic direction with a unique industry-first vision to create the ultimate power converter-on-chip creating ubiquitous DC-DC conversion at the silicon level. In 2013, he led Enpirion’s merger into Altera to realize his vision of highly integrated power management closely coupled to leading-edge digital silicon loads. Prior to founding Enpirion, he was Director of Advanced Power Research at Bell Laboratories.
Dr. Lotfi has a B.S. in Electrical Engineering from Cairo University and an M.S. and PhD. in Electrical Engineering from Virginia Tech.
Dr. Lotfi currently serves on the boards of Lotus Microsystems ApS, Xonai Ltd., HyperCIM Ltd. and his extensive experience in high power electronics provide a valuable resource to the Board of Directors and Executive Management.
Debra Wasser was elected as a member of the Board of Directors on July 13, 2023. Ms. Wasser currently serves as Vice President of Investor Relations for Etsy, Inc. (Nasdaq: NYSE), the global marketplace for unique and creative goods. She is responsible for Etsy’s external shareholder relationships, with a focus on corporate and financial reporting, driving increased analyst coverage and investor connectivity, effective corporate messaging, strategic investor targeting, and governance engagement with the financial community. Ms. Wasser has led investor and broad internal and external communications strategies on multiple financial transactions and offerings, and a host of product and technology launches and marketing initiatives.
Prior to joining Etsy in April 2018, Ms. Wasser led Edelman’s Investor Relations practice in the U.S. and advised boards of directors and senior managements of public companies on strategic communications including investor relations, financial and corporate public relations, transaction communications, crisis communications and leadership positioning. CHANGE
Prior to joining Edelman in 2015, Ms. Wasser was Senior Vice President, Investor Relations & Corporate Communications for semiconductor equipment provider Veeco Instruments, Inc. (Nasdaq: VECO) for over 15 years. While at Veeco, Ms. Wasser created and implemented a global investor relations program to raise visibility and deepen ownership to reflect business trends. She led effective communications strategy through positive periods of growth, over a dozen merger and acquisition transactions, a highly successful secondary equity offering, and new market opportunities.
Prior to joining Veeco, Ms. Wasser was Vice President of Dewe Rogerson Inc. where she ran the firm’s U.S. investor relations client base, focused on healthcare/biotech, high-tech, consumer products, financial services, publishing, and general industry. During her tenure at the firm, Ms. Wasser serviced clients across the globe and helped grow the firm
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from four to 80 employees. Deb has a B.S. in Communications and Business from The State University of New York at Albany.
Ms. Wasser has provided business and communications advice to Boards of Directors of publicly traded and privately held companies for over three decades. She has served on the Board of Directors of NIRI, the Association of Investor Relations Professionals, including the maximum service of four years on the National Chapter Board, as well as earlier as a Board member of the organizations New York Chapter.
Andrew Africk was appointed as a member of the Board of Directors on May 28, 2024. Mr. Africk is the founder of Searay Capital LLC, a private investment company. Mr. Africk established Searay Capital in July 2013 after 21 years leading private equity and capital markets investments for Apollo Global Management. As a Senior Partner at Apollo, Mr. Africk was responsible for investments in technology and communications, and he has 30 years of experience financing, analyzing and investing in public and private companies. In the last five years, Mr. Africk has served on the board of directors of ADT Inc., which provides residential and commercial security systems and services. Additionally, Mr. Africk serves on the Board of Advisors of the University of Pennsylvania School of Engineering and Applied Science. Mr. Africk graduated from UCLA with a B.A. in Economics, from the University of Pennsylvania Law School with a J.D., and from the University of Pennsylvania’s Wharton School of Business with an MBA.
Mr. Africk has extensive board experience including previously serving on the board of directors of ADT Inc., and numerous boards of technology companies while a Senior Partner at Apollo.
Richard A. Catalano was appointed as the Company’s Vice President and Chief Financial Officer effective as of August 30, 2022. Mr. Catalano began his career at KPMG LLP and became an audit partner in 1993. Throughout his over 35 years as an audit professional at KPMG LLP, Mr. Catalano advised a diverse array of clients through private equity financed transactions, merger-related accounting, and filings with the U.S. Securities and Exchange Commission. Towards the later part of his tenure, Mr. Catalano served as the leader of KPMG LLP’s Metro New York Healthcare and Life Sciences Practice and then co-led KPMG’s Global Audit Methodology Group. Mr. Catalano is a Certified Public Accountant in New York State and received a Bachelor of Business Administration in accounting from Hofstra University.
Kevin R. Collins is the Vice President and General Manager of SDC, Mr. Collins served as the General Manager of SDC since 1999. From 1990 to 1999 he was employed by Stainless Design Corp. as Manager of Field Operations and Product Development Advisor. Mr. Collins attended Columbia University School of Engineering and Applied Science.
Dr. Jeffrey Brogan was appointed as Vice President Sales and Marketing for the Company on March 23, 2021. Previously he was Director of Sales and Marketing for CVD Materials Corporation since November 2017 with General Management responsibilities of CVD MesoScribe Technologies Corporation. Dr. Brogan served as the President and CEO of MesoScribe Technologies, Inc., spearheading its sale to CVD in 2017. He has over 25 years of experience serving aerospace and defense industries with expertise in strategic sales & marketing, technology management, and advanced Research & Development. He received his PhD in Materials Science and Engineering from Stony Brook University.
Dr. Maxim S. Shatalov was appointed Vice President of Engineering and Technology in April 2018. Prior to CVD, Mr. Shatalov was employed by Sensor Electronic Technology Inc. (SETi) a LED company where he held multiple technical and management positions from 2006 through 2018. In 2017, Dr. Shatalov became Vice President of Technology responsible for UV LED technology and LED application development at SETi. Dr. Shatalov has over twenty years of experience in semiconductor research and devices and holds more than 170 U.S. patents.
Warren D. Cheesman was appointed Vice President of Manufacturing Operations in October 2022. He has over 25 years of management experience in the semiconductor, medical device and defense equipment sectors. Mr. Cheesman
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has held roles of increasing responsibility in engineering, operations, quality and strategic sourcing, at equipment manufacturers including Veeco Instruments, Air Techniques, and Kongsberg Defense & Aerospace. Mr. Cheesman provides strategic leadership across all divisions related to manufacturing, quality, and continuous improvement initiatives, with emphasis on process improvement, lean manufacturing, risk management, and collaboration. He holds two master of science degrees from Stony Brook University in Technology Management and Materials Science & Engineering, and a Bachelor of Science degree in Mechanical Engineering from Virginia Tech. His academic and professional experience is also complemented by a Six Sigma Black Belt certification.
Legal Proceedings Involving Directors
None.
Board Leadership
Our Corporate Governance practices contain several features which we believe will ensure that the Board maintains effective and independent oversight of management, including the following:
| ● | Executive sessions without management and non-independent directors present are a standing Board agenda item. Executive sessions of the independent directors are held at any time requested by an independent director and, in any event, are held in connection with at least 100% of regularly scheduled Board meetings. | |
| ● | The Board regularly meets in executive session with the CEO without other members of management present. | |
| ● | All Board committee members are independent directors. The committee chairs have authority to hold executive sessions with management and non-independent directors present. |
While our Board has no formal policy with respect to separation of the positions of Chairman and CEO or with respect to whether the Chairman should be a member of management or an independent director, we believe that the appointment of Mr. Waldman as Chairman properly facilitates better communication between the Independent Directors on the one hand and the non-Independent Director and members of management on the other hand and leads to improved oversight and discussions by the Board as a whole. The Chief Executive Officer of the Company, Emmanuel Lakios, is tasked with the responsibility of implementing our corporate strategy, we believe he is best suited for leading discussions with input from the Chairman, at the Board level, regarding performance relative to our corporate strategy and this discussion accounts for a significant portion of the time devoted at the Board meetings.
Our Certificate of Incorporation and Bylaws provide for our Company to be managed by or under the direction of the Board of Directors. Under our Certificate of Incorporation and Bylaws, the number of directors is fixed from time to time by the Board of Directors. The Board of Directors currently consists of six members. Directors are elected for a period of one year and thereafter serve, subject to the Bylaws, until the next annual meeting at which their successors are duly elected by the shareholders.
Code of Ethics
We have adopted a Corporate Code of Conduct and Ethics that applies to our employees, senior management and Board of Directors, including the Chief Executive Officer and Chief Financial Officer. The Corporate Code of Conduct and Ethics is available on our website, www.cvdequipment.com, by clicking on “About Us” and then clicking on “Governance.”
Insider Trading Policy
The
Company has
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Audit Committee
Our Board of Directors has an Audit Committee that currently consists of Lawrence J. Waldman, Chairman, Robert M. Brill, and Debra Wasser. During the fiscal year ended December 31, 2025, the Audit Committee held four meetings. Pursuant to the Audit Committee Charter, the Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the work of any independent registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for us, and each such independent auditor shall report directly to the Committee. The Audit Committee also reviews with management and the independent auditors, our annual audited financial statements (including the disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”), the scope and results of annual audits and the audit and non-audit fees of the independent registered public accounting firm. Messrs. Waldman and Brill and Ms. Wasser are “independent” under the requirements of the NASDAQ Stock Market.
The Board of Directors has determined that Mr. Waldman is an “audit committee financial expert” as that term is defined in the rules and regulations of the Securities and Exchange Commission.
Section 16(a) Beneficial Ownership Reporting Compliance
The rules of the Securities and Exchange Commission require us to disclose late filings of reports of stock ownership and changes in stock ownership by our directors, officers and ten percent shareholders. To our knowledge, based solely on our review of (a) the copies of such reports and amendments thereto furnished to us and (b) written representations that no other reports were required, during our fiscal year ended December 31, 2025, all of the filings for our officers, directors and ten percent shareholders were made on a timely basis.
| Item 11. | Executive Compensation |
Summary Compensation Table
The following table sets forth the compensation of our chief executive officer and chief financial officer, and our “named executive officers,” for the years ended December 31, 2025 and 2024.
| Name and principal position | Year | Salary ($) | Bonus ($) (1) | Option Awards ($) (2) | Stock Awards ($) (2) | All Other Compensation ($) (3) | Total ($) | |||||||||||||||||||||
| Emmanuel Lakios | 2025 | 415,000 | - | - | - | 21,655 | 436,655 | |||||||||||||||||||||
| President and Chief Executive Officer | 2024 | 415,000 | - | - | - | 20,744 | 435,744 | |||||||||||||||||||||
| Richard Catalano Secretary, Chief | 2025 | 297,991 | - | - | - | 29,750 | 327,741 | |||||||||||||||||||||
| Financial Officer and Executive Vice President | 2024 | 283,800 | - | - | - | 26,772 | 310,572 | |||||||||||||||||||||
| Kevin Collins | 2025 | 241,020 | 30,000 | - | - | 27,885 | 298,905 | |||||||||||||||||||||
| Vice President & General Manager - SDC | 2024 | 206,000 | 30,000 | - | - | 26,558 | 262,558 | |||||||||||||||||||||
| (1) | Reflects cash bonuses under the Company’s Management Bonus Plan. Bonuses listed for a particular year represents amounts earned with respect to such year even though all or part of such amounts have been paid during the following year. |
| (2) | These columns represent the grant date fair value of the stock awards as calculated in accordance with FASB ASC 718 (Stock Compensation). There were no stock options granted in 2025 and 2024 to the named executive officers |
| (3) | All other compensation consists of i) 401(k) match in 2025 and 2024 of $10,500 and $10,350 for Emmanuel Lakios, $8,817 and $8,514 for Richard Catalano, and $7,828 and $6,630 for Kevin Collins, respectively; and ii) health, life and disability insurance premiums in 2025 and 2024 of $11,155 and $10,394 for Emmanuel Lakios, $20,933 and $18,258 for Richard Catalano and $20,057 and $19,928 for Kevin Collins. |
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Employment Agreements and Potential Payments Upon Termination or Change in Control
Emmanuel Lakios Employment Agreement
On June 1, 2021, the Company entered into an Employment Agreement with Emmanuel Lakios, the Company’s President and Chief Executive Officer (the “Lakios Agreement”). The term of Mr. Lakios’s employment under the Lakios Agreement commenced as of the effective date thereof and shall continue until terminated in accordance with the terms of the Lakios Agreement. Under the Lakios Agreement, Mr. Lakios will receive an initial annual base salary of $288,000, which shall be reviewed from time to time and may be increased, but not decreased, by the Compensation Committee of the Board of Directors (the “Committee”) in its sole and exclusive discretion. Mr. Lakios shall be entitled to participate in any bonus or incentive plan available to the Company’s senior executives generally, on such terms as the Committee may determine in its discretion.
In the event of the termination of the Lakios Agreement and Mr. Lakios’s employment thereunder, Mr. Lakios or his estate (in the event of his death) shall be entitled to (A) receive any unpaid base salary earned and accrued under the Lakios Agreement prior to the date of termination (and reimbursement for expenses incurred prior to the date of termination), (B) indemnification in accordance with any applicable indemnification plan, program, corporate governance document or other arrangement, and any vested rights pursuant to any insurance plan, benefit plan or retirement plan, and, except in the event of Mr. Lakios’s termination by the Company for Cause (as defined in the Lakios Agreement), (C) treatment of his stock option grants in accordance with the terms of the applicable plan and award agreement.
In the event Mr. Lakios’s employment is terminated as a result of death or disability, Mr. Lakios shall also be entitled to receive a pro rata bonus payment under the Company’s bonus Plan for the year of termination, if applicable.
In the event Mr. Lakios’s employment is terminated by the Company for Cause, Mr. Lakios’s stock option grants, whether vested or unvested, shall immediately terminate and be null and void.
In the event Mr. Lakios’s employment is terminated by the Company without Cause, or by Mr. Lakios for Good Reason (as defined in the Lakios Agreement), Mr. Lakios shall also be entitled to (A) a pro rata bonus for the year of termination, and (B) continued payment of his base salary and the Company’s portion of Mr. Lakios’s then existing medical benefits for the nine (9) month period following the date of termination.
The Lakios Agreement contains customary non-competition, non-solicitation, and confidentiality provisions in favor of the Company.
Other than as set forth above, there are no arrangements for compensation of directors or Named Executive Officers and there are no employment contracts between the Company and its directors or any change in control arrangements.
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Equity Awards
We
do not otherwise maintain any written policies on the timing of awards of stock options, stock appreciation rights, or similar instruments
with option-like features.
Outstanding Equity Awards at December 31, 2025
The following table sets forth the outstanding equity awards held by our named executive officers as of December 31, 2025.
| OPTION AWARDS | STOCK AWARDS | |||||||||||||||||||||||||||||
| Name | Number of Securities Underlying Options Exercisable | Number of Securities Options Unexercisable | Exercise Price | Option Expiration Date | Number of shares or units of stock that have not vested | Market value of shares or units of stock that have not vested | Equity Incentive Plan Awards: Number of unearned shares or units that not vested | Equity Incentive Plan Awards: Market or payout value of unearned shares or units that have not vested | ||||||||||||||||||||||
| Emmanuel Lakios | 37,500 | 37,500 | $ | 14.11 | 3/23/2033 | - | - | - | $ | - | ||||||||||||||||||||
| 56,250 | 18,750 | $ | 5.02 | 8/17/2032 | ||||||||||||||||||||||||||
| 100,000 | - | $ | 4.26 | 6/1/2031 | ||||||||||||||||||||||||||
| 100,000 | - | $ | 10.30 | 2/6/2027 | ||||||||||||||||||||||||||
| Richard Catalano | 12,500 | 12.500 | $ | 14.11 | 3/23/2033 | - | - | - | $ | - | ||||||||||||||||||||
| 15,000 | 5,000 | $ | 5.42 | 8/30/2032 | ||||||||||||||||||||||||||
| Kevin Collins | 7,500 | 7,500 | $ | 14.11 | 3/23/2033 | - | - | - | $ | - | ||||||||||||||||||||
| 11,250 | 3,750 | $ | 5.02 | 8/17/2032 | ||||||||||||||||||||||||||
| 10,000 | - | $ | 4.01 | 7/15/2021 | ||||||||||||||||||||||||||
2025 Director Compensation
The following table sets forth a summary of the compensation we paid to our non-employee directors in 2025.
| Name | Fees Earned or Paid in Cash | Option Awards | Restricted Stock Awards | Total | ||||||||||||
| Lawrence J. Waldman | $ | 113,000 | - | $ | 40,000 | $ | 153,000 | |||||||||
| Robert M. Brill | 50,000 | - | 40,000 | 90,000 | ||||||||||||
| Debra Wasser | 40,000 | - | 40,000 | 80,000 | ||||||||||||
| Ashraf Lotfi | 50,000 | - | 40,000 | 90,000 | ||||||||||||
| Andrew Africk | 40,000 | - | 40,000 | 80,000 | ||||||||||||
On October 11, 2021, the Board of Directors, following the unanimous recommendation of the Board’s Compensation Committee, unanimously approved a director compensation plan, effective October 1, 2021 (the “Plan”). The Plan is based on the recommendations of an independent compensation consultant engaged by the Board’s Compensation Committee. Pursuant to the Plan, each director is entitled to Director Compensation, divided into the following pay components: (i) Annual Board of Directors cash compensation in the amount of $40,000 and (ii) an annual equity retainer in the amount of $40,000, to be automatically granted on the date of the Company’s annual meeting of shareholders. Additionally, a director serving as a chairman for the Board’s Compensation Committee or Nominating, Governance and Compliance Committee is entitled to annual chair compensation in the amount of $10,000. The director serving as the chairman for the Board’s Audit Committee is entitled to chair compensation in the amount of $25,000. Furthermore, the director serving as the Non-Executive Chairman is entitled to Board leadership compensation in the amount of $48,000.
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| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
The following table sets forth, as of March 30, 2026, information regarding the beneficial ownership of our common stock by (a) each person who is known to us to be the owner of more than five percent (5%) of our common stock, (b) each of our directors, (c) each of the named executive officers, and (d) all directors and executive officers and executive employees as a group. For purposes of the table, a person or group of persons is deemed to have beneficial ownership of any shares that such person has the right to acquire within 60 days of March 30, 2026.
| Name and Address of Beneficial Owner (1) | Amounts and Nature of Beneficial Ownership (2) | Percent of Class (%) | ||||||
| Directors and Executive Officers: | ||||||||
| Andrew Africk / ADA Partners LP | 1,314,840 | (4) | 19.0 | |||||
| Emmanuel Lakios | 318,858 | (3) | 4.6 | |||||
| Kevin R. Collins | 112,437 | (3) | 1.2 | |||||
| Lawrence J. Waldman | 91,371 | (4) | 1.3 | |||||
| Jeffrey A. Brogan | 47,019 | (3) | * | |||||
| Robert M. Brill | 44,156 | (4) | * | |||||
| Maxim Shatalov | 42,500 | (3) | * | |||||
| Richard Catalano | 33,750 | (3) | * | |||||
| Warren Cheesman | 22,500 | (3) | * | |||||
| Ashraf Lotfi | 25,961 | (4) | * | |||||
| Debra Wasser | 25,456 | (4) | * | |||||
| All directors and executive officers and executive employees as a group (eleven persons) | 2,078,848 | 30.0 | ||||||
* Less than 1% of the outstanding common stock or less than 1% of the voting power
| (1) | The address of Messrs. Lakios, Waldman, Nielsen, Brogan, Brill, Shatalov, Catalano, Cheesman. Lotfi and Ms. Wasser is c/o CVD Equipment Corporation, 355 South Technology Drive, Central Islip, New York 11722. The address of Mr. Collins is c/o Stainless Design Concepts, 1117 Old Kings Highway, Saugerties, NY 12477. The address of Andrew Africk / ADA Partners is c/o Searay Capital, 111 West 67th Street, New York, NY 10023. |
| (2) | All of such shares are owned directly with sole voting and investment power, unless otherwise noted below. |
| (3) | Does not include unvested options to purchase the following shares of our common stock: Lakios – 37,500; Collins – 7,500; Brogan – 7,500; Shatalov – 7,500; Catalano – 11,250; and Cheesman – 7,500. |
| (4) | Does not include unvested restricted shares of our common stock: Waldman – 2,775; Africk – 2,775; Brill – 2,775; Lotfi – 2,775 and Wasser – 2,775. Does not include shares to be issued per Director compensation agreement related to the Annual Equity Retainer in the amount of $40,000, to be determined at the 2026 Annual Meeting of Shareholders. Mr. Waldman’s ownership includes 15,000 vested and exercisable options to purchase shares of common stock. |
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Equity Compensation Plan Information Table
The following table provides information about shares of our common stock that may be issued upon the exercise of options under all of our existing compensation plans as of December 31, 2025.
| Number of securities to be issued upon exercise of outstanding options, warrants and rights (1) | Weighted-average exercise price of outstanding options, warrants and rights (2) | Number of securities remaining available for future issuance | ||||||||||
| Plan Category | ||||||||||||
| Equity compensation plans approved by security holders | 803,875 | $ | 8.17 | 146,878 | ||||||||
| Equity compensation plans not approved by security holders | — | N/A | — | |||||||||
| Total | 803,875 | $ | 8.17 | 146,878 | ||||||||
| (1) | Reflects aggregate options outstanding under our 2007 Share Incentive Plan, 2016 Equity Incentive Plan and 2022 Equity Incentive Plan. |
| (2) | Calculation is exclusive of the value of any unvested restricted stock awards. |
| Item 13. | Certain Relationships and Related Transactions, and Director Independence. |
Transactions with related persons, promoters and certain control persons.
None.
Director Independence
The current members of our Board of Directors are Lawrence J. Waldman, Emmanuel Lakios, Andrew Africk, Robert M. Brill, Debra Wasser and Ashraf Lotfi. Messrs. Waldman, Africk, Brill and Lotfi and Ms. Wasser have been determined to be “independent” as defined under Rule 4200 of the Nasdaq Stock Market.
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| Item 14. | Principal Accountant Fees and Services. |
The following presents fees for professional audit services rendered by CBIZ CPAs P.C., Certified Public Accountants, the Company’s independent registered public accounting firm for the year ended December 31, 2025 and Marcum, LLP, Certified Public Accountants, the Company’s independent registered public accounting firm for the year ended December 31, 2024.
| 2025 | 2024 | |||||||
| Audit fees | $ | 237,300 | $ | 224,025 | ||||
| Audit-related fees | 29,400 | 25,750 | ||||||
| All other fees | - | - | ||||||
| Total fees | $ | 266,700 | $ | 249,775 | ||||
Audit Fees
Audit fees consisted of the review of the first three quarters and audit of the year-end.
Audit-related Fees
Consisted of the audits of the Company’s defined contribution 401(k) plan.
Audit Committee Approval
The engagement of the Company’s independent registered public accounting firm is pre-approved by the Company’s Audit Committee. The Audit Committee pre-approves all fees billed and all services rendered by the Company’s independent registered public accounting firm.
| 44 |
PART IV
| 45 |
101.INS*** XBRL Instance
101.SCH*** XBRL Taxonomy Extension Schema
101.CAL*** XBRL Taxonomy Extension Calculation
101.DEF*** XBRL Taxonomy Extension Definition
101.LAB*** XBRL Taxonomy Extension Labels
101.PRE*** XBRL Taxonomy Extension Presentation
* Management contract or compensatory plan or arrangement required
** Filed herewith
*** XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
| 46 |
SIGNATURES
In accordance with Section 13 or 15(d) 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.
| DATE: | March 30, 2026 | |
| CVD EQUIPMENT CORPORATION | ||
| By: | /s/ Emmanuel Lakios | |
| Name: | Emmanuel Lakios | |
| Title: | President and Chief Executive Officer | |
| By: | /s/ Richard Catalano | |
| Name: | Richard Catalano | |
| Title: | Executive Vice President, Chief Financial Officer and Secretary | |
| Principal Financial and Accounting Officer |
In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated below.
| NAME | POSITION | DATE | ||
| /s/ Lawrence J. Waldman | Director, Chairman of the Board | March 30, 2026 | ||
| Lawrence J. Waldman | ||||
| /s/ Emmanuel Lakios | President, Chief Executive Officer | March 30, 2026 | ||
| Emmanuel Lakios | (Principal Executive Officer) | |||
| /s/ Andrew Africk | Director | March 30, 2026 | ||
| Andrew Africk | ||||
| /s/ Robert M. Brill | Director | March 30, 2026 | ||
| Robert M. Brill | ||||
/s/ Ashraf Lotfi |
Director | March 30, 2026 | ||
| Ashraf Lotfi | ||||
/s/ Debra Wasser |
Director | March 30, 2026 | ||
| Debra Wasser |
| 47 |
CVD EQUIPMENT CORPORATION AND SUBSIDIARies
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and Board of Directors of
CVD Equipment Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of CVD Equipment Corporation (the “Company”) as of December 31, 2025, the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the year ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, based on our audit, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
We also have audited the adjustments to the 2024 financial statements to retrospectively apply the change in accounting for income taxes as a result of the adoption of Accounting Standards Update No. 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures , as described in Note 2 and 9. In our opinion, such adjustments are appropriate and have been properly applied. We were not engaged to audit, review, or apply any procedures to the 2024 financial statements of the Company other than with respect to the adjustments and, accordingly, we do not express an opinion or any other form of assurance on the 2024 financial statements taken as a whole.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Revenue Recognition – Estimated Total Contract Costs
Description of the Matter
As discussed in Notes 2 and 3 to the consolidated financial statements, the Company recognizes revenue from the sale of systems (“System Projects”) over time by using an input method based on costs incurred as it best depicts the Company’s progress toward satisfaction of the performance obligation. Under this method, revenue arising from such 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. The estimation of these costs requires judgment by the Company given the unique product specifications and requirements for contracts related to the design, development, and manufacture of the system. During the year ended December 31, 2025, the Company recognized approximately $20.8 million of revenue recognized over time.
Subjective judgment is required by management in determining the assumptions in estimating the estimated costs to complete on contracts for which revenue is recognized over time using a cost-to-cost model. Complex auditor judgment was required in evaluating initial cost estimates and expected costs to complete.
How We Addressed the Matter in Our Audit
The primary procedures we performed to address this critical audit matter included the following:
| ● | Obtaining an understanding of management’s process in developing the cost estimates; | |
| ● | Obtain and review contracts to ensure that the recognition of revenue over time was appropriate; | |
| ● | Evaluating management’s ability to reasonably estimate costs by performing a comparison of the actual costs to prior period estimates, including evaluating the timely identification of circumstances that may warrant a modification to the estimated costs; | |
| ● | Evaluate management’s methodologies and the consistency of management’s methodologies over the life of the contracts; | |
| ● | Tested the original estimated costs and profit margins on System Projects by obtaining the original estimates, comparing the actual costs and profit margins to the original estimates and investigating significant changes; and | |
| ● | Tested the estimated costs to complete Systems Projects that were not completed during the year ended December 31, 2025 by comparing the estimated cost to complete at December 31, 2025 to actual cost incurred subsequent to December 31, 2025. |
/s/ CBIZ CPAs P.C.
We have served as the Company’s auditor since 2019 (such date takes into account the acquisition of the attest business of Marcum llp by CBIZ CPAs P.C. effective November 1, 2024).
March 30, 2026
| F-1 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and Board of Directors of
CVD Equipment Corporation
Opinion on the Financial Statements
We have audited, before the effects of the adjustments to retrospectively apply the change in accounting described in Note 2 and 9, the balance sheet of CVD Equipment Corporation as of December 31, 2024, and the related statements of income, changes in shareholders’ equity, and cash flows for the year then ended (the 2024 financial statements before the effects of the adjustments discussed in Note 2 and 9 are not presented herein). The 2024 financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
In our opinion, the 2024 financial statements, before the effects of the adjustments to retrospectively apply the change in accounting described in Note 2 and 9, present fairly, in all material respects, the financial position of CVD Equipment Corporation as of December 31, 2024, and the results of its operations and its cash flows for the year then ended in conformity with U.S. generally accepted accounting principles.
We were not engaged to audit, review, or apply any procedures to the adjustments to retrospectively apply the change in accounting described in Note 2 and 9 and, accordingly, we do not express an opinion or any other form of assurance about whether such adjustments are appropriate and have been properly applied. Those adjustments were audited by CBIZ CPAs P.C..
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ Marcum LLP
We have served as the Company’s auditor from 2019 through 2025.
March 19, 2025
| F-2 |
CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
As of December 31, 2025 and 2024
(in thousands, except share amounts)
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net of allowance for credit losses | ||||||||
| Contract assets | ||||||||
| Inventories | ||||||||
| Assets held for sale | ||||||||
| Other current assets | ||||||||
| Total current assets | ||||||||
| Property, plant and equipment, net | ||||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Current maturities of long-term debt | ||||||||
| Contract liabilities | ||||||||
| Total current liabilities | ||||||||
| Long-term debt, net of current portion | ||||||||
| Total liabilities | ||||||||
| Contingencies (see note 14) | ||||||||
| Stockholders’ equity: | ||||||||
| Common stock - $ par value – shares authorized; issued and outstanding at December 31, 2025 and at December 31, 2024 | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of the consolidated financial statements
| F-3 |
CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
Years ended December 31, 2025 and 2024
(in thousands, except per share amounts)
| 2025 | 2024 | |||||||
| Revenue | $ | $ | ||||||
| Cost of revenue | ||||||||
| Gross profit | ||||||||
| Operating expenses: | ||||||||
| Research and development | ||||||||
| Selling | ||||||||
| General and administrative | ||||||||
| Impairment charges | ||||||||
| Gains on sales of equipment | ( | ) | ||||||
| Total operating expenses, net | ||||||||
| Operating loss | ( | ) | ( | ) | ||||
| Other income (expense): | ||||||||
| Interest income | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Other income | ||||||||
| Total other income, net | ||||||||
| Loss before income tax | ( | ) | ( | ) | ||||
| Income tax expense | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Loss per common share: | ||||||||
| Basic | $ | ( | ) | $ | ( | ) | ||
| Diluted | $ | ( | ) | $ | ( | ) | ||
| Weighted average number of shares: | ||||||||
| Basic | ||||||||
| Diluted | ||||||||
The accompanying notes are an integral part of the consolidated financial statements
| F-4 |
CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders’ Equity
Years ended December 31, 2025 and 2024
(in thousands, except share amounts)
| Shares | Par Value | Capital | Deficit) | Total | ||||||||||||||||
| Common stock | Additional paid-in | Retained Earnings (Accumulated | ||||||||||||||||||
| Shares | Par Value | Capital | Deficit) | Total | ||||||||||||||||
| Balance at January 1, 2024 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Stock-based compensation | ||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Stock-based compensation | ||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
The accompanying notes are an integral part of the consolidated financial statements
| F-5 |
CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years ended December 31, 2025 and 2024
(in thousands)
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock-based compensation | ||||||||
| Depreciation and amortization | ||||||||
| Provision for excess and obsolete inventory | ||||||||
| Provision (recovery) for bad debt | ( | ) | ||||||
| Impairment charges | ||||||||
| Gains on sales of equipment | ( | ) | ||||||
| Changes in operating assets and liabilities | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Contract assets | ( | ) | ( | ) | ||||
| Inventories | ||||||||
| Other assets | ( | ) | ||||||
| Accounts payable | ( | ) | ( | ) | ||||
| Accrued expenses | ( | ) | ||||||
| Contract liabilities | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Investment in captive insurance company | ( | ) | ||||||
| Net proceeds from sales of equipment | ||||||||
| Net cash (used in) provided by investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Payments of long-term debt | ( | ) | ( | ) | ||||
| Net cash used in financing activities | ( | ) | ( | ) | ||||
| Net decrease in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents at beginning of year | ||||||||
| Cash and cash equivalents at end of year | $ | $ | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Income taxes paid | $ | $ | ||||||
| Interest paid | $ | $ | ||||||
| Non-cash investing and financing activities: | ||||||||
| Property, plant and equipment transferred to assets held for sale | $ | $ | ||||||
| Inventory transferred to property, plant and equipment | $ | $ | ||||||
The accompanying notes are an integral part of the consolidated financial statements
| F-6 |
CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
Note 1 – Business Description
CVD Equipment Corporation and its subsidiaries (the “Company”) is a New York corporation. Its principal business activities include designing, developing, and manufacturing a broad range of chemical vapor deposition, physical vapor transport, gas control, and other equipment and process solutions used to develop and manufacture materials and coatings for industrial applications and research. The Company’s products are used in production environments as well as research and development centers, both academic and corporate.
On March 23, 2026, the Company entered into an agreement to sell its SDC business division to a subsidiary of the Atlas Copco Group. See Note 15 – Subsequent Event.
Note 2 - Summary of Significant Accounting Policies
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Liquidity
At
December 31, 2025, the Company had $
Reclassifications
Certain reclassifications have been made to the prior period consolidated financial statements to conform to the current period presentation. These reclassifications had no effect on net loss.
Principles of Consolidation
The consolidated financial statements include the accounts of CVD Equipment Corporation and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
The Company’s significant estimates are the accounting for certain items such as revenues on long-term contracts recognized on the input method, valuation of inventories at the lower of cost or net realizable value; allowance for credit losses; valuation allowances for deferred tax assets, estimated lives and impairment considerations of long-lived assets and valuation of stock-based compensation.
| F-7 |
CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
Note 2 - Summary of Significant Accounting Policies (continued)
Revenue Recognition
In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606 - Revenue from Contracts with Customers (“ASC 606”), the Company records revenue in an amount that reflects the consideration to which the Company expects to be entitled in exchange for goods or services promised to its customers. Under ASC 606, the Company follows a five-step model to: (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, thermal process equipment and other 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.
Under the over time 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 years ended December 31, 2025 and 2024.
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.
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 the Company believes these cash advances and deposits are generally used to meet working capital demands which can be higher in the earlier stages of a contract. Also, advanced payments and deposits provide the Company with some measure of assurance that the customer will perform on its obligations under the contract.
Contract assets include unbilled amounts typically resulting from system sales under contracts and represents revenue recognized that exceeds the amount billed to the customer.
| F-8 |
CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
Note 2 - Summary of Significant Accounting Policies (continued)
Contract liabilities include advance payments and billings in excess of revenue recognized. The Company typically receives down payments upon receipt of order and progress payments as the system is manufactured.
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 years ended December 31, 2025 and 2024, all system equipment sales were recorded over time by using an input method except for a) one contract in 2025 and one contract in 2024 that was recorded as revenue at the point in time the equipment was transferred to the customer and b) one contract that was entered during 2024 and was not recognized as revenue using over time revenue recognition until July 2025 when a contract modification was entered into with the customer to change certain contract provisions.
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
| F-9 |
CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
Note 2 - Summary of Significant Accounting Policies (continued)
Income Taxes
Deferred tax assets and liabilities are determined based on the estimated future tax effects of temporary differences between the financial statements and tax bases of assets and liabilities, as measured by using the future enacted tax rates. Deferred tax expense (benefit) is the result of changes in the deferred tax assets and liabilities. The Company records a valuation allowance against deferred tax assets when it is more likely than not that future tax benefits will not be utilized based on a lack of sufficient positive evidence.
The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) the Company determines whether it is more likely than not the tax position will be sustained on examination by taxing authorities based on the technical merits of the position and (2) for those positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than with the related tax authority. The Company recognizes potential interest and penalties related to uncertain tax positions in income tax expense.
The Company’s policy for global intangible low taxed income (“GILTI”) is to treat such amounts as a period cost when incurred.
Impairment of Long-Lived Assets and Intangibles
Long-lived assets consist primarily of property, plant, and equipment. Intangibles consist of patents, copyrights and intellectual property, licensing agreements and certifications. Long-lived assets are reviewed for impairment whenever events or circumstances indicate their carrying value may not be recoverable. When such events or circumstances arise, an estimate of the future undiscounted cash flows produced by the asset, or the appropriate grouping of assets, is compared to the asset’s carrying value to determine if impairment exists. If the asset is determined to be impaired, the impairment loss is measured on the excess of its carrying value over its fair value. Assets to be disposed of are reported at the lower of their carrying value or net realizable value. See Note 5 for impairment of long-lived assets recorded during the year ended December 31, 2025.
Property, Plant and Equipment
Property,
plant and equipment are recorded at cost. Depreciation is determined on a straight-line basis for buildings and building improvements
over
Research and Development
Research and development costs are expensed as incurred and include charges for the development of new technology and transition of existing technology into new products.
| F-10 |
CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
Note 2 - Summary of Significant Accounting Policies (continued)
Basic earnings per common share is computed by dividing the net income (loss) by the weighted average number of shares of common stock outstanding during each period. When applicable, diluted earnings per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents, consisting of shares that might be adjusted upon exercise of common stock options, unvested restricted shares, and warrants.
Potential common shares issued are calculated using the treasury stock method, which recognizes the use of proceeds that could be obtained upon the exercise of options and warrants in computing diluted earnings per share. It assumes that any proceeds would be used to purchase common stock at the average market price of the common stock during the period.
Cash and Cash Equivalents
The
Company had cash and cash equivalents of $
The
Company places most of its temporary cash investments with financial institutions, which from time to time may exceed the Federal Deposit
Insurance Corporation limit. The amount in excess of the limit at December 31, 2025 and 2024 was $
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, and accounts receivable. The Company places its cash equivalents with financial institutions and invests its excess cash primarily in treasury bills, certificates of deposit or deposit accounts. The Company has established guidelines relative to credit ratings and maturities that seek to maintain stability and liquidity.
The Company routinely assesses the financial strength of its customers. In accordance with the “expected credit loss” model, the carrying amount of accounts receivable is reduced by a valuation allowance that reflects the best estimate of the amounts the Company does not expect to collect. In addition to reviewing delinquent accounts receivable, the Company considers many factors in estimating our reserve, including types of customers and their credit worthiness, experience and historical data adjusted for current conditions and reasonable supportable forecasts. The Company records an allowance for credit losses based upon a specific review of all significant outstanding invoices. For those invoices not specifically reviewed, provisions are provided based upon the collection history, current economic trends and reasonable supportable forecasts.
| F-11 |
CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
Note 2 - Summary of Significant Accounting Policies (continued)
Accounts
receivable is presented net of an allowance for credit losses of $
The
Company has accounts receivables from certain customers that exceed
Sales Concentrations
Revenue
for a single customer in any one year can exceed
Export
sales to customers represented approximately
Fair Value of Financial Instruments
The carrying amounts of financial instruments including cash and cash equivalents, accounts receivable, and accounts payable, approximate fair value due to the relatively short-term maturity of these instruments. The carrying value of long-term debt approximates fair value based on prevailing borrowing rates currently available for loans with similar terms and maturities.
| F-12 |
CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
Note 2 - Summary of Significant Accounting Policies (continued)
The Company records stock-based compensation in accordance with the provisions set forth in ASC 718, “Stock Compensation”. ASC 718 requires companies to recognize the cost of employee services received in exchange for awards of equity instruments based upon the grant date fair value of those awards over the vesting period. The Company uses the Black-Scholes option-pricing model to compute the estimated fair value of option awards and includes assumptions regarding expected volatility, expected option term, dividend yields and risk-free interest rates. The value of restricted stock awards are based on the fair value on the date of the grant.
Shipping and Handling
It
is the Company’s policy to include freight charges billed to customers in total revenue. The amount included in revenue was $
Recently Adopted Accounting Standard
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. The expanded annual disclosures are effective for the year ended December 31, 2025 and were applied retrospectively. See Note 9 – Income Taxes.
Recently Issued Accounting Standards
In November 2024, the FASB issued ASU 2024-03, “Disaggregation of Income Statements Expenses (Subtopic 220-40),” to improve income statement expenses disclosure. The standard requires more detailed information related to the types of expenses, including (among other items) the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization included within each interim and annual income statement’s expense caption, as applicable. This authoritative guidance can be applied prospectively or retrospectively and will be effective for financial statements issued for annual periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently in the process of evaluating the impact of adoption on its consolidated financial statements.
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.
| F-13 |
CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
Note 3 – Revenue
The following table represents a disaggregation of revenue from contracts by end markets for the years ended December 31, 2025 and 2024 (in thousands):
Schedule of Disaggregation of Revenue
| Over time | Point in time | Total | ||||||||||
| Year Ended December 31, 2025 | ||||||||||||
| Over time | Point in time | Total | ||||||||||
| Energy | $ | $ | $ | |||||||||
| Aerospace | ||||||||||||
| Industrial | ||||||||||||
| Research | ||||||||||||
| Total | $ | $ | $ | |||||||||
| Over time | Point in time | Total | ||||||||||
| Year Ended December 31, 2024 | ||||||||||||
| Over time | Point in time | Total | ||||||||||
| Energy | $ | $ | $ | |||||||||
| Aerospace | ||||||||||||
| Industrial | ||||||||||||
| Research | ||||||||||||
| Total | $ | $ | $ | |||||||||
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 that are universities and other research institutions.
The
Company has unrecognized contract revenue of approximately $
Judgment is required to evaluate assumptions including the amount of net contract revenues and the total estimated costs to determine the Company’s progress towards contract completion and to calculate the corresponding amount of revenue to recognize.
Changes in estimates for sales of systems occur for a variety of reasons, including but not limited to (i) build accelerations or delays, (ii) product cost forecast changes, (iii) cost related change orders or add-ons, or (iv) changes
in other information used to estimate costs. Changes in estimates may have a material effect on the Company’s consolidated financial position and results of operations.
| F-14 |
CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
Note 3 – Revenue (continued)
Contract assets and contract liabilities on input method type contracts in progress are summarized for the years ended December 31, 2025 and 2024 as follows (in thousands):
Schedule of Cost and Estimated Earnings in Excess of Billings
| 2025 | 2024 | |||||||
| Costs incurred on contracts in progress | $ | $ | ||||||
| Estimated earnings | ||||||||
| Costs and estimated earnings on uncompleted contracts | ||||||||
| Billings to date | ( | ) | ( | ) | ||||
| Net cost in excess of billings | ( | ) | ||||||
| Deferred revenue related to other contracts | ( | ) | ( | ) | ||||
| Contract liability in excess of contract assets | $ | $ | ( | ) | ||||
| Included in accompanying consolidated balance sheets under the following captions (in thousands): | ||||||||
| Contract assets | $ | $ | ||||||
| Contract liabilities | $ | $ | ||||||
Of
the contract liability balances at December 31, 2024 and December 31, 2023, $
Note 4 - Inventories
Inventories as of December 31 consist of (in thousands):
Schedule of Inventories, net
| 2025 | 2024 | |||||||
| Raw materials | $ | $ | ||||||
| Work-in-process | ||||||||
| Finished goods | ||||||||
| Total | $ | $ | ||||||
During
the year ended December 31, 2024, the Company recorded a non-cash charge to reduce the net realizable value of its inventory by approximately
$
| F-15 |
CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
Note 5 – Property, Plant and Equipment and Assets Held for Sale
Major classes of property, plant and equipment consist of the following as of December 31 (in thousands):
Schedule of Property, Plant and Equipment
| 2025 | 2024 | |||||||
| Land | $ | $ | ||||||
| Buildings and improvements | ||||||||
| Machinery and equipment | ||||||||
| Construction in progress | ||||||||
| Total | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Property, plant and equipment, net | $ | $ | ||||||
Machinery and equipment also include furniture and fixtures and software.
Depreciation
expense was $
During
2025 and 2024, two PVT units were transferred from inventory to property, plant and equipment totaling $
On
November 6, 2025, the Company’s Board of Directors approved a comprehensive strategy to transform the Company in response to the
continued fluctuations in order rates and the recent decline in the bookings of the Company’s CVD Equipment division. As part of
this strategy, the Company transitioned the operating model for the CVD Equipment business from vertically integrated fabrication to
outsourced fabrication of certain components. At December 31, 2025, the Company classified certain excess manufacturing equipment as
held for sale with a fair value of $
The Company entered into an agreement with the Town of Islip Industrial Development Agency (Islip IDA) in July 2021 under which the Company was granted tax incentives whereby the Company agreed to make payments in lieu of all real estate taxes and assessments (PILOT payments). The agreement requires the Company to maintain certain employment levels at its Central Islip, New York facility. The agreement provides for the Islip IDA to recapture tax incentives provided to the Company in certain circumstances. Any recapture of such tax benefits could have a material adverse effect on the Company’s financial position and future results of operations and cash flows.
| F-16 |
CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
Note 6 – Accrued Expenses
Accrued expenses consist of the following as of December 31 (in thousands):
Schedule of Accrued Expenses
| 2025 | 2024 | |||||||
| Accrued wages and benefits | $ | $ | ||||||
| Accrued vacation | ||||||||
| Accrued material purchases | ||||||||
| Other | ||||||||
| Total | $ | $ | ||||||
Note 7 – Long-term Debt
Long-term debt consists of the following as of December 31 (in thousands):
Schedule of Long Term Debt
| 2025 | 2024 | |||||||
| Equipment loan payable | $ | $ | ||||||
| Less: current maturities | ||||||||
| Long-term debt, net of current maturities | $ | $ | ||||||
In
September 2022, the Company entered into a loan agreement to fund the acquisition of equipment in the amount of $
In February 2026, the Company repaid the loan in full in anticipation of selling the equipment as discussed in Note 5. Accordingly, the entire balance as of December 31, 2025 has been classified as a current liability.
Schedule of Basic and Diluted Weighted Average Common Shares Outstanding
| 2025 | 2024 | |||||||
| Basic weighted average shares outstanding | ||||||||
| Effect of potentially dilutive share-based awards | ||||||||
| Diluted weighted average shares outstanding | ||||||||
At December 31, 2025 and 2024, all stock options and unvested restricted stock were not included in the computation of diluted earnings per share because their effect was antidilutive.
| F-17 |
CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
Note 9 – Income Taxes
Loss before income taxes for the years ended December 31, 2025 and 2024 consist of the following (in thousands):
Schedule of Loss Before Income Taxes
| 2025 | 2024 | |||||||
| Domestic | $ | ( | ) | ( | ) | |||
| Foreign | ||||||||
| Total | $ | ( | ) | $ | ( | ) | ||
Significant components of income tax expense for the years ended December 31, 2025 and 2024 consist of the following (in thousands):
Schedule of Components of Income Tax Expense
| 2025 | 2024 | |||||||
| Current: | ||||||||
| Federal | $ | $ | ||||||
| State and local | ||||||||
| Total current tax expense | ||||||||
| Deferred: | ||||||||
| Federal | ||||||||
| State and local | ||||||||
| Total deferred tax expense | ||||||||
| Total income tax expense | $ | $ | ||||||
Income tax paid (net of refunds) were as follows (in thousands):
Schedule of Income Tax Paid Net of Refunds
| 2025 | 2024 | |||||||
| Federal | $ | ( | ) | |||||
| State and local: | ||||||||
| California | ||||||||
| New York | ||||||||
| South Carolina | ||||||||
| Other | ||||||||
| Total income taxes paid, net | $ | $ | ||||||
During
the year ended December 31, 2025, we adopted ASU 2023-09 to enhance the income tax disclosures regarding income taxes paid and the rate
reconciliation disclosure. The provision for income taxes reconciles to the amount computed by applying the U.S. federal statutory rate
of
| F-18 |
CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
Note 9 – Income Taxes (continued)
Schedule of Effective Income Tax Rate Reconciliation
| 2025 | 2024 | |||||||||||||||
| Expected provision at federal statutory tax rate | $ | ( | ) | % | $ | ( | ) | % | ||||||||
| State and local taxes, net of federal effect (1) | ( | %) | ( | %) | ||||||||||||
| Change in valuation allowance | ( | %) | ( | %) | ||||||||||||
| Nontaxable and nondeductible items: | ||||||||||||||||
| Stock-based compensation | ( | %) | ( | %) | ||||||||||||
| Other | ( | %) | ( | %) | ||||||||||||
| Research and development credits | ( | %) | ||||||||||||||
| Other | ( | %) | ||||||||||||||
| Income tax expense | $ | ( | %) | $ | ( | %) | ||||||||||
| (1) |
Deferred income taxes reflect the net tax effects of loss and credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets for federal and state income taxes are as follows (in thousands):
Schedule of Deferred Tax Assets and Liabilities
| 2025 | 2024 | |||||||
| Deferred income tax assets: | ||||||||
| Net operating loss carryforwards | $ | $ | ||||||
| Research and development tax credit carryforwards | ||||||||
| Compensation costs | ||||||||
| Vacation accrual | ||||||||
| Intangible assets | ||||||||
| Capitalized research and development | ||||||||
| Allowance for doubtful accounts | ||||||||
| Inventory capitalization | ||||||||
| Other items | ||||||||
| Deferred income tax assets | ||||||||
| Less: valuation allowance | ( | ) | ( | ) | ||||
| Deferred income tax assets, net of valuation allowance | ||||||||
| Deferred income tax liabilities: | ||||||||
| Property, plant and equipment | ( | ) | ( | ) | ||||
| Prepaid expenses | ( | ) | ( | ) | ||||
| Deferred income tax asset, net | $ | $ | ||||||
| F-19 |
CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
Note 9 – Income Taxes (continued)
As required under ASU 2023-09, the Company has included only the portion of the valuation allowance related to federal deferred tax assets in the “change in valuation allowance” line of the rate reconciliation. The following table presents a reconciliation of the total change in the valuation allowance (in thousands):
Schedule of Change in Valuation Allowance
| 2025 | 2024 | |||||||
| Beginning balance | $ | ( | ) | ( | ) | |||
| Change charged to income tax expense | ( | ) | ( | ) | ||||
| Change charged to currency translation adjustment | ||||||||
| Ending balance | $ | ( | ) | $ | ( | ) | ||
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that the deferred tax assets will be realized. The ultimate realization of deferred tax assets is based on the assessment of available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit the utilization of existing deferred tax assets. The Company considered all positive and negative evidence when determining the amount of the net deferred tax assets that are more likely than not to be realized. This evidence includes, but is not limited to, historical earnings, scheduled reversal of taxable temporary differences, tax planning strategies and projected future taxable income A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the prior three-year period ended December 31, 2025. Such objective evidence limits the ability to consider subjective evidence such as our projections for future growth. Based on this assessment, we maintained a full valuation allowance against our net deferred tax assets as of December 31, 2025, and 2024. If these estimates and assumptions change in the future, we may be required to reduce our existing valuation allowance resulting in less income tax expense.
For
the years ended December 31, 2025 and 2024 , the valuation allowance increased by approximately $
At
December 31, 2025, the Company had $
The
Company applies the applicable authoritative guidance which prescribes a comprehensive model for the manner in which a company should
recognize, measure, present and disclose in its financial statements all material uncertain tax positions that the Company has taken
or expects to take on a tax return. As of December 31, 2025 and 2024, the Company had
On July 4, 2025, “An Act to Provide for Reconciliation Pursuant to Title II of the H. Con. Res. 14” (the Act) was enacted. The Act provides for several corporate tax changes including, but not limited to, restoring full expensing of domestic research and development costs, restoring immediate deductibility of certain capital expenditures, and changes in the computations of U.S. taxation on international earnings. The enacted legislation did not have a material impact on the Company’s effective tax rate for the year ended December 31, 2025.
| F-20 |
CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
A summary of the Company’s Share Incentive Plans are as follows:
2007 Share Incentive Plan
On December 12, 2007, shareholders approved the Company’s 2007 Share Incentive Plan (“2017 Incentive Plan”), in connection therewith, shares of the Company’s common stock are reserved for issuance pursuant to options or restricted stock that may be granted under the 2017 Incentive Plan through December 12, 2017. The Plan expired in December 2017. As of December 31, 2025, there were options outstanding under this plan.
2016 Share Incentive Plan
On December 9, 2016, shareholders approved the Company’s 2016 Share Incentive Plan (“2016 Incentive Plan”), in connection therewith, shares of the Company’s common stock are reserved for issuance pursuant to options or restricted stock that may be granted under the 2016 Incentive Plan through December 9, 2026. As of December 31, 2025, there were options outstanding under this plan.
2022 Share Incentive Plan
On July 14, 2022, shareholders approved the Company’s 2022 Share Incentive Plan (“2022 Incentive Plan”), in connection therewith, shares of the Company’s common stock are reserved for issuance pursuant to options or restricted stock that may be granted under the 2022 Incentive Plan through July 14, 2032. As of December 31, 2025, there were options outstanding under this plan.
Under the 2016 and 2022 Share Incentive Plans, the purchase price of the common stock under each option plan shall be determined by the Committee, provided, however, that such purchase price shall not be less than the fair market value of the shares on the date such option is granted. The stock options generally expire seven to after the date of grant.
As of December 31, 2025, there were shares available for grant under the 2016 Equity Incentive Plan and shares available for grant under the 2022 Equity Incentive Plan.
The Company recorded stock-based compensation of $ million and $ million for the years ended December 31, 2025 and 2024, respectively, that were included in the following line items in our Consolidated Statements of Operations (in thousands):
| 2025 | 2024 | |||||||
| Cost of revenue | $ | $ | ||||||
| Research and development | ||||||||
| Selling | ||||||||
| General and administrative | ||||||||
| Total stock-based compensation expense | $ | $ | ||||||
Stock-based compensation expense in both years included approximately $ million related to restricted stock awards pursuant to the Director Compensation plan discussed below. The Company recognizes forfeitures of stock awards as they occur.
| F-21 |
CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
Note 10 – Stock-Based Compensation (continued)
For the year ended December 31, 2024, the Company granted stock options, vesting % per year over four years, with a ten-year life. The Company determined the fair value of stock options granted based upon weighted average assumptions as provided below.
| Stock price | $ | |||
| Exercise price | $ | |||
| Dividend yield | % | |||
| Expected volatility | % | |||
| Risk-free interest rate | % | |||
| Expected life (in years) |
The expected life is the number of years the Company estimates that the awards will be outstanding based on the simplified method that considers the vesting period and contractual period of the option. The expected volatility is measured using historical daily price changes of the Company’s common stock over the respective expected term. The Company has outstanding stock options under the three plans at December 31, 2025.
Schedule of Stock Options Awards
| Weighted | ||||||||
| Awards
(in Shares) | Average
Exercise Price | |||||||
| Outstanding at December 31, 2023 | $ | |||||||
| Granted | ||||||||
| Expired / cancelled | ( | ) | ||||||
| Exercised | ||||||||
| Outstanding at December 31, 2024 | ||||||||
| Granted | ||||||||
| Expired / cancelled | ( | ) | ||||||
| Exercised | ||||||||
| Outstanding at December 31, 2025 | ||||||||
At December 31, 2025 and 2024, stock options to purchase and , respectively, shares of common stock were exercisable.
Schedule of Outstanding and Exercisable Options Ranges of Exercise Prices
| Options Outstanding | Options Exercisable | |||||||||||||||||||||||||||||
| Weighted | Weighted | Weighted | ||||||||||||||||||||||||||||
| Average | Average | Average | ||||||||||||||||||||||||||||
| Exercise | Number | Remaining | Exercise | Intrinsic | Number | Exercise | Intrinsic | |||||||||||||||||||||||
| Price Range | Outstanding | Contractual | Price | Value | Exercisable | Price | Value | |||||||||||||||||||||||
| $ | - | $ | $ | $ | $ | |||||||||||||||||||||||||
| $ | - | $ | $ | $ | $ | |||||||||||||||||||||||||
| $ | - | $ | $ | $ | $ | |||||||||||||||||||||||||
| $ | - | $ | $ | $ | $ | |||||||||||||||||||||||||
| F-22 |
CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
Note 10 – Stock-Based Compensation (continued)
As of December 31, 2025, there was $ million of unrecognized compensation costs related to stock options expected to be recognized over a weighted average period of years.
Restricted Stock Awards
Pursuant to the Director Compensation plan approved on October 11, 2021, each of the five independent directors is entitled to compensation for an annual equity retainer in the amount of $ per director, to be automatically granted on the date of the Company’s annual meeting of shareholders.
Schedule of Restricted Stock Awards
| Weighted | ||||||||
| Average Grant | ||||||||
| Shares of | Date Fair | |||||||
| Restricted Stock | Value | |||||||
| Unvested outstanding at January 1, 2024 | $ | |||||||
| Granted | ||||||||
| Vested | ( | ) | ||||||
| Forfeited or cancelled | ||||||||
| Unvested outstanding at December 31, 2024 | ||||||||
| Granted | ||||||||
| Vested | ( | ) | ||||||
| Forfeited or cancelled | ||||||||
| Unvested outstanding at December 31, 2025 | $ | |||||||
The fair value of the restricted stock awards is recorded as stock-based compensation expense over the one-year vesting period and totaled $ million for both years ending December 31, 2025 and 2024, respectively.
Note 11 – Defined Contribution Plan
The Company maintains a 401(k) Plan for the benefit of all eligible employees. All employees as of the effective date of the 401(k) Plan became eligible. An employee is eligible to become a participant after three months of continuous service.
Participants may elect to contribute from their compensation any amount up to the maximum deferral allowed by the Internal Revenue Code. Employer contributions are optional.
Effective
July 1, 2022, the Company implemented a matching contribution of
Note 12 - Reportable Segments
The
Company has determined that it has
| F-23 |
CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
Note 12 - Reportable Segments (continued)
| ● | CVD Equipment – manufactures chemical vapor deposition, physical vapor transport and thermal process equipment. |
| ● | SDC - manufactures ultra-high purity gas and chemical delivery control systems. |
| ● | MesoScribe - provided electronic printing services and products (heaters, antennas, and sensors).
|
Both CVD Equipment and SDC also sell spares and parts and provide services related to the equipment each segment sells.
The chief operating decision maker (“CODM”) of the Company is the Company’s chief executive officer. The CODM assesses performance and decides how to allocate resources, including employees, financial or capital resources, based on segment net income (loss). The CODM considers actual-to-actual variances on a quarterly basis when making decisions about allocating capital and other resources to the segments and to assess the performance for each segment.
Financial results for the reportable segments and other business are prepared on a basis consistent with the internal disaggregation of financial information to assist the CODM is making internal operating decisions.
Certain income and expenses are excluded from segment net income (loss) and included in the unallocated amounts in the reconciliation of reportable segment net income (loss) to net loss. These items are not used by the CODM in allocating resources or evaluating the results of the segments and include the following: corporate expenses consisting of employment costs of executives, finance, information technology and human resources; board of director fees; professional fees; shareholder and investor relations expense; directors’ and officers’ insurance; interest income and income tax expense. Segment income (loss) from operations may not be consistent with measures used by other companies.
The following provides segment information as described below (in thousands):
Schedule of Segments
| CVD | SDC | MesoScribe | Total | |||||||||||||
| For the year ended December 31, 2025 | ||||||||||||||||
| CVD | SDC | MesoScribe | Total | |||||||||||||
| Segment revenue | $ | $ | $ | $ | ||||||||||||
| Less: | ||||||||||||||||
| Cost of revenue | ||||||||||||||||
| Research & development | ||||||||||||||||
| Selling | ||||||||||||||||
| General & administrative | ||||||||||||||||
| Impairment | ||||||||||||||||
| Interest expense | ||||||||||||||||
| Segment net income (loss) | $ | ( | ) | $ | $ | $ | ||||||||||
| Segment assets | $ | $ | $ | ( | ) | $ | ||||||||||
| Capital expenditures | $ | $ | $ | $ | ||||||||||||
| Depreciation & amortization | $ | $ | $ | $ | ||||||||||||
| F-24 |
CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
Note 12 - Reportable Segments (continued)
| CVD | SDC | MesoScribe | Total | |||||||||||||
| For the year ended December 31, 2024 | ||||||||||||||||
| CVD | SDC | MesoScribe | Total | |||||||||||||
| Segment revenue | $ | $ | $ | $ | ||||||||||||
| Less: | ||||||||||||||||
| Cost of revenue | ||||||||||||||||
| Research & development | ||||||||||||||||
| Selling | ||||||||||||||||
| General & administrative | ||||||||||||||||
| Gain on sales of equipment | ( | ) | ( | ) | ( | ) | ||||||||||
| Other income | ( | ) | ( | ) | ||||||||||||
| Interest expense | ||||||||||||||||
| Segment net income (loss) | $ | ( | ) | |||||||||||||
| Segment assets | $ | $ | $ | $ | ||||||||||||
| Capital expenditures | $ | $ | $ | $ | ||||||||||||
| Depreciation & amortization | $ | $ | $ | $ | ||||||||||||
The following table presents a reconciliation of revenue of reportable segments to consolidated revenue (in thousands):
Schedule of Reconciliation of Revenue of Reportable Segments to Consolidated Revenue
| 2025 | 2024 | |||||||
| Year ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenue of reportable segments | $ | $ | ||||||
| Intersegment revenue | ( | ) | ( | ) | ||||
| Consolidated total revenue | $ | $ | ||||||
Intersegment revenues are determined based on similar product sales to external customers of the Company.
The following table presents a reconciliation of net income (loss) of reportable segments to consolidated net loss (in thousands):
Schedule of Reconciliation of Net Income (Loss) of Reportable Segments to Consolidated Net Loss
| 2025 | 2024 | |||||||
| Year ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Net income (loss) of reportable segments | $ | $ | ||||||
| Unallocated amounts: | ||||||||
| Corporate expenses | ( | ) | ( | ) | ||||
| Interest income | ||||||||
| Income tax expense | ( | ) | ( | ) | ||||
| Consolidated net loss | $ | ( | ) | $ | ( | ) | ||
| F-25 |
CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
Note 12 - Reportable Segments (continued)
The following table presents a reconciliation of total assets of reportable segments to consolidated total assets (in thousands):
Schedule of Reconciliation of Total Assets of Reportable Segments to Consolidated Total Assets
| 2025 | 2024 | |||||||
| Year ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Total assets of reportable segments | $ | $ | ||||||
| Unallocated amounts: | ||||||||
| Cash equivalents | ||||||||
| Other current assets | ||||||||
| Consolidated total assets | $ | $ | ||||||
The following table presents revenue by geographic area (in thousands):
Schedule of Revenue by Geographic Area
| 2025 | 2024 | |||||||
| Year ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| United States | $ | $ | ||||||
| North America, excluding US | ||||||||
| Europe, Middle East and Africa | ||||||||
| Asia-Pacific | ||||||||
| Consolidated total revenue | $ | $ | ||||||
For geographic reporting, revenues are attributed to the location in which in the customer facility is located. All of the Company’s long-lived assets are located in the United States.
Note 13 – MesoScribe and Tantaline
MesoScribe
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 sold certain proprietary equipment relating to its plasma spray technology and material deposition system
and granted a non-exclusive license to use certain of the Company’s related intellectual property as more fully described in the
Agreement, for an aggregate adjusted purchase price of $
The
Company fulfilled remaining orders for MesoScribe products during 2024 at which time it ceased operations of MesoScribe and recorded
a $
The
revenues and net income of MesoScribe were $
| F-26 |
CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
Note 13 – MesoScribe and Tantaline (continued)
The
revenues and net income of MesoScribe were $
Tantaline
On
May 26, 2023, the Company sold its Tantaline subsidiary located in Nordborg, Denmark in exchange for a nominal amount at closing and
an earn-out provision based on any net income that Tantaline may earn during the five-year period ending December 31, 2027. Any earn-out
amounts will be recognized when and if any such amounts become probable of receipt. To date, the Company has received a $
Note 14 – Risks and Uncertainties
The Company currently operates in a challenging economic environment as the global economy continues to confront the remaining impacts from the pandemic, geopolitical conflicts, inflationary pressures, and adverse supply chain disruptions. The specific impacts on the Company have included:
| ● | Significant geopolitical developments across Europe and Asia (including the war in Ukraine and Iran) have and may continue to restrict the Company’s ability to procure raw materials and components such as nickel and integrated circuits, as well as impact the Company’s ability to sell its products into China, Russia and other Eastern European and Asian regions. |
| ● | Supply chain disruptions have led to much longer lead times to acquire raw materials for production and has led to inflationary pressures in both materials and labor. These supply chain disruptions have impacted the Company’s ability to recognize revenue timelier as it delays the Company’s manufacturing processes. |
The Company relies on suppliers to manufacture many of the components and subassemblies used in its products. Quality or performance failures of the Company’s products or changes in its manufacturers’ financial or business condition could disrupt the Company’s ability to supply quality products to its customers and thereby have a material and adverse effect on its business and operating results. Some of the components and technologies used in the Company’s products are purchased and licensed from a single source or a limited number of sources. The loss of any of these suppliers may cause the Company to incur additional transition costs, result in delays in the manufacturing and delivery of its products or cause it to carry excess or obsolete inventory and could cause it to redesign its products.
While management has initiated actions to mitigate the potential negative impacts to its revenue and profitability, the Company is unable to predict the impact that the above uncertainties may have on its future results of operations and cash flows.
Note 15 – Subsequent Event
On March 23, 2026, the Company entered into an Asset Purchase Agreement (the “APA”) with a subsidiary of the Atlas Copco Group (the “Buyer”) under which the Company agreed to sell to the Buyer all of the assets related to the Company’s SDC business and the Buyer will assume certain specified liabilities, in each case as set forth in the APA (collectively, the “Transaction”). The Company will retain ownership of its Saugerties, New York facility, which will be leased to the Buyer for an initial term of two years following the closing of the transaction.
The
aggregate consideration payable to the Company will be approximately $
At
the closing of the Transaction (the “Closing”), the Buyer will place $
The APA contains customary indemnification provisions pursuant to which the parties agree to indemnify each other for certain matters, including, among other things, breaches of certain representations, warranties and covenants in connection with the Transaction.
The APA contains customary representations, warranties and covenants of the parties, including, among other things, covenants regarding the operations of SDC between signing of the APA and the Closing, delivery of consents and approvals, and employee-related matters. The Closing is also subject to customary closing conditions, including the receipt of necessary third-party consents, the absence of any legal restraint prohibiting the transaction, and the satisfaction of other conditions customary for transactions of this nature.
The Buyer and the Company are required to use their reasonable best efforts to consummate the Transaction which is expected to occur during the second quarter of 2026.
| F-27 |
Exhibit 23.1
Independent Registered Public Accounting Firm’s Consent
We consent to the incorporation by reference in the Registration Statements on Form S-8 [File No. 333-138903, 333-153186, and 333-217439] and Form S-3 [File No. 333-271066] of our report dated March 30, 2026, with respect to the consolidated financial statements of CVD Equipment Corporation included in this Annual Report on Form 10-K for the year ended December 31, 2025.
| /s/ CBIZ CPAs P.C. | |
| Melville, NY | |
| March 30, 2026 |
Exhibit 23.2
Independent Registered Public Accounting Firm’s Consent
We consent to the incorporation by reference in the Registration Statement on Form S-8 [File No. 333-138903, 333-153186, and 333-217439] and Form S-3 [File No. 333-271066] of our report dated March 19, 2025 with respect to the consolidated financial statements of CVD Equipment Corporation and Subsidiaries as of December 31, 2024, which is included in this Annual Report on Form 10-K for the year ended December 31, 2025.
| /s/ Marcum LLP | |
| Melville, NY | |
| March 30, 2026 |
Exhibit 31.1
Certification 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 annual report on Form 10-K 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 control over financial reporting, or caused such internal control 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 registrant’s 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 data; 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: March 30, 2026 | /s/ Emmanuel Lakios |
| President, Chief Executive Officer |
Exhibit 31.2
Certification 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 annual report on Form 10-K 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 control over financial reporting, or caused such internal control 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 registrant’s 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 data; 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: March 30, 2026 | /s/ Richard Catalano |
| Executive Vice President and Chief 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 annual report on Form 10-K for the period ending December 31, 2025 of CVD Equipment Corporation (the “Form 10-K”) 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-K fairly presents, in all material respects, the financial condition and results of operations of CVD Equipment Corporation.
| Dated: March 30, 2026 | /s/ Emmanuel Lakios |
| Emmanuel Lakios | |
| 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 annual report on Form 10-K for the period ending December 31, 2025 of CVD Equipment Corporation (the “Form 10-K”) 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-K fairly presents, in all material respects, the financial condition and results of operations of CVD Equipment Corporation.
| Dated: March 30, 2026 | /s/ Richard Catalano |
| Richard Catalano | |
| Executive Vice President and | |
| Chief Financial Officer | |
| (Principal Financial Officer) |