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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the period ended June 29, 2024

or

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from               to            

 

Commission file number             0-16088

 

CPS TECHNOLOGIES CORP.

(Exact Name of Registrant as Specified in its Charter)

 

Delaware
(State or Other Jurisdiction
of Incorporation or Organization)

04-2832509
(I.R.S. Employer
Identification No.)

  

111 South Worcester Street
Norton MA
(Address of principal executive offices)

02766-2102
(Zip Code)

 

(508) 222-0614
Registrant’s Telephone Number, including Area Code:

 

CPS Technologies Corp.

111 South Worcester Street

Norton, MA 02766-2102

Former Name, Former Address and Former Fiscal Year if Changed since Last Report

 

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

 

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

 

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

 

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

                    

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

 

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15U.S.C. 7262(b)) by the registered public firm that prepared or issued its audit report.

☐Yes ☒ No

 

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

Yes ☒ No

 

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

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 par value

CPSH

NASDAQ Capital Markets

 

APPLICABLE ONLY TO CORPORATE ISSUERS:

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. Number of shares of common stock outstanding as of July 24,2024: 14,525,960.

 

 

  

 

PART I FINANCIAL INFORMATION

 

ITEM 1 FINANCIAL STATEMENTS (Unaudited)

 

CPS TECHNOLOGIES CORP.

Balance Sheets (Unaudited)

 

   

June 29,

   

December 30,

 
   

2024

   

2023

 

ASSETS

               
                 

Current assets:

               

Cash and cash equivalents

  $ 6,306,244     $ 8,813,626  

Marketable securities, at fair value

    758,701       -  

Accounts receivable-trade, net

    4,064,293       4,389,155  

Accounts receivable-other

    198,348       83,191  

Inventories, net

    4,121,678       4,581,930  

Prepaid expenses and other current assets

    366,655       276,349  
                 

Total current assets

    15,815,919       18,144,251  
                 

Property and equipment:

               

Production equipment

    9,940,480       11,271,982  

Furniture and office equipment

    891,921       952,883  

Leasehold improvements

    873,730       985,649  
                 

Total cost

    11,706,131       13,210,514  
                 

Accumulated depreciation and amortization

    (10,068,557 )     (11,936,004 )

Construction in progress

    496,331       281,629  
                 

Net property and equipment

    2,133,905       1,556,139  
                 

Right-of-use lease asset

    261,000       332,000  

Deferred taxes, net

    1,877,302       1,569,726  
                 

Total assets

  $ 20,088,126     $ 21,602,116  

 

See accompanying notes to financial statements.

 

(continued)

 

 

 

CPS TECHNOLOGIES CORP.

Balance Sheets (Unaudited)

(concluded)

 

  

June 29,

  

December 30,

 
  

2024

  

2023

 

LIABILITIES AND STOCKHOLDERS` EQUITY

        
         

Current liabilities:

        

Note payable, current portion

 $31,885  $46,797 

Accounts payable

  2,587,874   2,535,086 

Accrued expenses

  671,853   1,075,137 

Deferred revenue

  65,578   251,755 

Lease liability, current portion

  160,000   160,000 
         

Total current liabilities

  3,517,190   4,068,775 
         

Note payable less current portion

  -   8,090 

Deferred revenue – long term

  31,277   31,277 

Long term lease liability

  101,000   172,000 
         

Total liabilities

  3,649,467   4,280,142 
         

Commitments and contingencies (note 6)

          
         

Stockholders` equity:

        

Common stock, $0.01 par value, authorized 20,000,000 shares; issued 14,601,487 shares; outstanding 14,519,215 shares at each June 29, 2024 and December 30, 2023

  146,015   146,015 

Additional paid-in capital

  40,386,335   40,180,893 

Accumulated other comprehensive income

  8,701   - 

Accumulated deficit

  (23,852,254)  (22,754,796)

Less cost of 82,272 common shares repurchased at each June 29, 2024 and December 30, 2023

  (250,138)  (250,138)
         

Total stockholders` equity

  16,438,659   17,321,974 
         

Total liabilities and stockholders` equity

 $20,088,126  $21,602,116 

 

See accompanying notes to financial statements.

 

 

 

 

CPS TECHNOLOGIES CORP.

Statements of Operations and Other Comprehensive Income (Unaudited)

 

  

Three Months Ended

  

Six Months Ended

 
  

June 29,

  

July 1,

  

June 29,

  

July 1,

 
  

2024

  

2023

  

2024

  

2023

 

Revenues:

                

Product sales

 $5,030,313  $7,418,138  $10,942,947  $14,518,405 
                 

Total revenues

  5,030,313   7,418,138   10,942,947   14,518,405 
                 

Cost of product sales

  5,260,305   5,221,879   10,266,629   10,077,444 
                 

Gross margin

  (229,992)  2,196,259   676,318   4,440,961 
                 

Selling, general, and administrative expense

  1,084,995   1,465,349   2,250,917   3,015,871 
                 

Income (loss) from operations

  (1,314,987)  730,910   (1,574,599)  1,425,090 
                 

Interest income (expense), net

  90,851   79,652   170,021   95,242 
                 

Net income (loss) before income tax

  (1,224,136)  810,562   (1,404,578)  1,520,332 

Income tax provision (benefit)

  (269,832)  210,058   (307,120)  460,628 
                 

Net income (loss)

 $(954,304) $600,503  $(1,097,458) $1,059,704 

Other comprehensive income

                

    Net unrealized gains on available for sale securities

  8,701   --   8,701   -- 

Total other comprehensive income

  8,701   --   8,701   -- 
                 
Total comprehensive income (loss)  (945,603)  600,503   (1,088,757)  1,059,704)

 

                

Net income (loss) per basic common share

 $(0.07) $0.04  $(0.08) $0.07 
                 

Weighted average number of basic common shares outstanding

  14,519,215   14,493,970   14,519,215   14,473,128 
                 

Net income (loss) per diluted common share

 $(0.07) $0.04  $(0.08) $0.07 
                 

Weighted average number of diluted common shares outstanding

  14, 519,215   14,621,929   14,519,215   14,630,765 

 

 

See accompanying notes to financial statements.

 

 

 

 

CPS TECHNOLOGIES CORP.
STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED JUNE 29, 2024 AND JULY 1, 2023

 

   

Common Stock

                                         
                                                         
   

Number of

shares

issued

   

Par Value

   

Additional

paid-in

capital

   

Accumulated

other comprehensive

income

   

Accumulated

deficit

   

Stock

repurchased

   

Total

stockholders'

equity

 

Balance at March 30, 2024

    14,601,487     $ 146,015     $ 40,341,855     $ -     $ (22,897,950 )   $ (250,138 )   $ 17,339,782  

Share-based compensation expense

    -       -       44,480       -       -       -       44,480  

Other comprehensive income

    -       -       -       8,701       -       -       8,701  

Net loss

    -       -       -       -       (954,304 )     -       (954,304 )

Balance at June 29, 2024

    14,601,487     $ 146,015     $ 40,386,335     $ 8,701     $ (23,852,254 )   $ (250,138 )   $ 16,438,659  

 

   

Common Stock

                                         
   

Number of

shares

issued

   

Par Value

   

Additional

paid-in

capital

   

Accumulated

other comprehensive

income

   

Accumulated

deficit

   

Stock

repurchased

   

Total

stockholders'

equity

 

Balance at December 30, 2023

    14,601,487     $ 146,015     $ 40,180,893     $ -     $ (22,754,796 )   $ (250,138 )   $ 17,321,974  

Share-based compensation expense

    -       -       205,442       -       -       -       205,442  

Other comprehensive income

    -       -       -       8,701       -       -       8,701  

Net loss

    -       -       -       -       (1,097,458 )     -       (1,097,458 )

Balance at June 29, 2024

    14,601,487     $ 146,015     $ 40,386,335     $ 8,701     $ (23,852,254 )   $ (250,138 )   $ 16,438,659  

 

   

Common Stock

   

Additional

                   

Total

 
   

Number of

           

paid-in

   

Accumulated

   

Stock

   

stockholders'

 
   

shares issued

   

Par Value

   

capital

   

deficit

   

repurchased

   

equity

 

Balance at April 1, 2023

    14,467,487     $ 144,675     $ 39,867,507     $ (23,665,891 )   $ (41,638 )   $ 16,304,653  

Share-based compensation expense

    -       -       17,316       -       -       17,316  

Employee option exercises

    79,000       790       93,630       -       (70,300 )     24,120  

Net income

    -       -       -       600,503       -       600,503  

Balance at July 1, 2023

    14,546,487     $ 145,465     $ 39,978,453     $ (23,065,388 )   $ (111,938 )   $ 16,946,592  

 

   

Common Stock

   

Additional

                   

Total

 
   

Number of

           

paid-in

   

Accumulated

   

Stock

   

stockholders'

 
   

shares issued

   

Par Value

   

capital

   

deficit

   

repurchased

   

equity

 

Balance at December 31, 2022

    14,460,486     $ 144,605     $ 39,726,851     $ (24,125,092 )   $ (40,848 )   $ 15,705,516  

Share-based compensation expense

    -       -       147,757       -       -       147,757  

Employee options Exercised

    86,001       860       103,845       -       (71,090 )     33,615  

Net income

    -       -       -       1,059,704       -       1,059,704  

Balance at July 1, 2023

    14,546,487     $ 145,465     $ 39,978,453     $ (23,065,388 )   $ (111,938 )   $ 16,946,592  

 

See accompanying notes to financial statements.

 

 

 

 

CPS TECHNOLOGIES CORP.

Statements of Cash Flows (Unaudited)

 

   

Six Months Ended

 
   

June 29,

   

July 1,

 
   

2024

   

2023

 
                 

Cash flows from operating activities:

               

Net income (loss)

  $ (1,097,458 )   $ 1,059,704  

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

               

Depreciation and amortization

    237,954       252,969  

Share-based compensation

    205,442       147,757  
                 

Changes in:

               

Accounts receivable-trade

    324,862       (1,296,584 )

Accounts receivable-other

    (115,157 )     611,028  

Inventories

    460,252       62,148  

Prepaid expenses and other current assets

    (90,306 )     (77,073 )

Accounts payable

    52,788       522,667  

Accrued expenses

    (403,284 )     40,658  

Deferred taxes

    (307,576 )     405,404  

Deferred revenue

    (186,177 )     (892,803 )
                 

Net cash provided by (used in) operating activities

    (918,660 )     835,875  
                 

Cash flows from investing activities:

               

Purchases of property and equipment

    (815,720 )     (433,579 )

Purchase of marketable securities

    (750,000 )     -  
                 

Net cash used in investing activities

    (1,565,720 )     (433,579 )
                 

Cash flows from financing activities:

               

Proceeds from exercise of employee stock options, net of repurchases

    -       33,615  

Payments on note payable

    (23,002 )     (21,439 )
                 

Net cash provided by (used in) financing activities

    (23,002 )     12,176  
                 

Net increase (decrease) in cash and cash equivalents

    (2,507,382 )     414,472  
                 

Cash and cash equivalents at beginning of period

    8,813,626       8,266,753  
                 

Cash and cash equivalents at end of period

  $ 6,306,244     $ 8,681,225  
                 

Supplemental disclosures of cash flows information:

               

Cash paid for interest

    1,465       2,902  
                 

Supplemental disclosures of non-cash activity:

               

Net exercise of stock options

    -       71,090  

 

See accompanying notes to financial statements.

 

 

 

CPS TECHNOLOGIES CORP.
Notes to Financial Statements
(Unaudited)

 

 

(1)     Nature of Business

CPS Technologies Corporation (the “Company” or “CPS”) provides advanced material solutions to the electronics, power generation, automotive and other industries. The Company’s primary advanced material solution is metal-matrix composites which are a combination of metal and ceramic. 

 

CPS also assembles housings and packages for hybrid circuits. These housings and packages may include components made of metal-matrix composites or they may include components made of more traditional materials such as aluminum, copper-tungsten, etc.

 

Using its proprietary MMC technology, the Company also produces light-weight armor, particularly for extreme environments and heavy threat levels.

 

The Company also engages in research and development, in some cases government funded and in others internally funded, focused on developing new products in response to customer requirements. These products expand our offerings in existing markets and enable penetration into new markets.

 

The Company sells into several end markets including the wireless communications infrastructure market, high-performance microprocessor market, motor controller market, and other microelectronic and defense markets. 

  

 

(2)     Summary of Significant Accounting Policies

As permitted by the rules of the Securities and Exchange Commission applicable to quarterly reports on Form 10-Q, these notes are condensed and do not contain all disclosures required by generally accepted accounting principles.

 

The accompanying financial statements are unaudited. In the opinion of management, the unaudited financial statements of CPS reflect all normal recurring adjustments which are necessary to present fairly the financial position and results of operations for such periods.

 

The Company’s balance sheet at December 30, 2023 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

 

For further information, refer to the financial statements and footnotes thereto included in the Registrant’s Annual Report on Form 10-K for the year ended December 30, 2023 and in CPS’s other SEC reports, which are accessible on the SEC’s website at www.sec.gov and the Company’s website at www.cpstechnologysolutions.com.

 

The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

 

 

(3)     Marketable Securities

           Investments consist of U.S. Treasury Bills with maturities up to one year. Since it is not management’s intention to hold these debt securities until the maturity dates, these have been classified as available-for-sale (“AFS”) and are recorded on the balance sheet at fair value, with changes in fair value recorded as a component of other comprehensive income.

 

 

(4)     Fair value of Marketable Securities

ASC 820, Fair Value Measurements (“ASC 820”) states that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The three-tiered fair value hierarchy, which prioritizes which inputs should be used in measuring fair value, is comprised of: (Level I) observable inputs such as quoted prices in active markets; (Level II) inputs other than quoted prices in active markets that are observable either directly or indirectly and (Level III) unobservable inputs for which there is little or no market data. The fair value hierarchy requires the use of observable market data when available in determining fair value. CPS’ marketable securities consist solely of US Government bonds with a maturity of 12 months or less and which fall under level II of the fair value hierarchy. The value of these bonds as of June 29, 2024 was $758,701. CPS held no investments in marketable securities as of December 30, 2023. 

 

    

June 29, 2024

December 30, 2023

Cost basis

   

$  750,000

--

Unrealized gain

   

$      8,701

--

Total fair value

   

$  758,701

--

 

 

  
 

(5)     Net Income Per Common and Common Equivalent Share

Basic net income per common share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per common share is calculated by dividing net income by the sum of the weighted average number of common shares plus additional common shares that would have been outstanding if potential dilutive common shares had been issued for granted stock options and stock purchase rights. Common stock equivalents are excluded from the diluted calculations when a net loss is incurred as they would be anti-dilutive.  Had there been a profit in Q2 2024, the dilutive effect would have been 29,254 shares.

 

The following table presents the calculation of both basic and diluted EPS:

 

  

Three Months Ended

  

Six Months Ended

 
  

June 29,

  

July 1,

  

June 29,

  

July 1,

 
  

2024

  

2023

  

2024

  

2023

 

Basic EPS Computation:

                

Numerator:

                

Net income (loss)

 $(954,304) $600,503  $(1,097,458) $1,059,704 
                 

Denominator:

                

Weighted average

                

Common shares

                

Outstanding

  14,519,215   14,493,970   14,519,215   14,473,128 
                 

Basic EPS

 $(0.07) $0.04  $(0.08) $0.07 
                 

Diluted EPS Computation:

                

Numerator:

                

Net income (loss)

 $(954,304) $600,503  $(1,097,458) $1,059,704 
                 

Denominator:

                

Weighted average

                

Common shares

                

Outstanding

  14,519,215   14,493,970   14,519,215   14,473,128 

Dilutive effect of stock options

  -   127,959   -   157,637 
                 

Total Shares

  14,519,215   14,621,929   14,519,215   14,630,765 
                 

Diluted EPS

 $(0.07) $0.04  $(0.08) $0.07 

  

 

(6)     Commitments & Contingencies

 

Commitments

 

Operating Leases

The Company has one real estate lease expiring in February 2026. CPS also has a few other leases for equipment which are minor in nature and are generally short-term in duration. None of these equipment leases have been capitalized as the Company elected an accounting policy for short-term leases, which allows lessees to avoid recognizing right-of-use assets and liabilities for leases with terms of 12 months or fewer.

 

The real estate lease expiring in 2026 (the “Norton facility lease”) is included as a right-of-use lease asset and corresponding lease liability on the balance sheet. This asset and liability was recognized based on the present value of lease payments over the lease term using the Company’s incremental borrowing rate at commencement date. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

 

 

 

The Norton facility lease comprises approximately 38 thousand square feet. The lease is triple net lease wherein the Company is responsible for payment of all real estate taxes, operating costs and utilities. The Company also has an option to renew the lease starting in March 2026 through February 2032. Annual rental payments range from $160 thousand to $165 thousand through maturity.

 

The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s capitalized operating lease as of June 29, 2024:

 

(Dollars in Thousands)

 

June 29, 2024

 

Maturity of capitalized lease liabilities

 

Lease payments

 
     

2024

 $83 

2025

  165 

2026

  28 

Total undiscounted operating lease payments

 $276 

Less: Imputed interest

  (15)

Present value of operating lease liability

 $261 

 

 

Balance Sheet Classification

    

Current lease liability

 $160 

Long-term lease liability

  101 

Total operating lease liability

 $261 
     

Other Information

    

Remaining lease term for capitalized operating lease (months)

  20 

Discount rate for capitalized operating leases

  6.6%

 

Operating Lease Costs and Cash Flows

Operating lease cost and cash paid was $41 thousand during the second quarter of 2024 and $82 thousand for the six months ended June 29, 2024. These costs are related to its long-term operating lease. All other short-term leases were immaterial.

 

Finance Leases

The company does not have any finance leases.

  

 

(7)     Share-Based Payments

The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. That cost is recognized over the period during which an employee is required to provide services in exchange for the award, the requisite service period (usually the vesting period). The Company provides an estimate of forfeitures at initial grant date. Reductions in compensation expense associated with the forfeited options are estimated at the date of grant, and this estimated forfeiture rate is adjusted periodically based on actual forfeiture experience. The company uses the Black-Scholes option pricing model to determine the fair value of the stock options granted.

 

 

 

During the quarter ended June 29, 2024, no stock options were granted to employees under the Company’s 2020 Equity Incentive Plan Stock Incentive Plan (the “Plan”) and no stock options were granted to outside directors during the quarter ended June 29, 2024. During the quarter ended July 1, 2023, a total of 60,000 stock options were granted to employees under the Company’s 2020 Equity Incentive Plan Stock Incentive Plan (the “Plan”) and no stock options were granted to outside directors during the quarter ended July 1, 2023, issued at a weighted average price of $2.66 per share.

 

During the three and six months ended June 29, 2024, there were no options exercised and corresponding shares issued. During the three and six months ended July 1, 2023, there were 79,000 and 86,001 options exercised and corresponding shares issued at a weighted average price of $1.20 and $1.22, respectively. 

 

During the three and six months ended June 29, 2024, the Company did not repurchase any shares for employees to facilitate their exercise of stock options. During the three and six months ended July 1, 2023, the Company repurchased 24,642 and 24,927 shares, respectively, for employees to facilitate their exercise of stock options. 

 

There were also 1,097,900 options outstanding at a weighted average price of $2.61 with a weighted average remaining term of 6.81 years as of June 29, 2024, and there were 610,000 options exercisable at a weighted average price of $2.45 with a weighted average remaining term of 5.09 years as of June 29, 2024. The Plan, as amended, is authorized to issue 1,500,000 shares of common stock. As of June 29, 2024, there were 638,300 shares available for future grants under the 2020 Plan and 236,200 shares outstanding under the 2009 Plan.


           As of June 29, 2024, there was $648 thousand of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan; that cost is expected to be recognized over a weighted average period of 2.93 years.

 

During the three and six months ended June 29, 2024, the Company recognized $44,480 and $205,442, respectively, as shared-based compensation expense related to previously granted shares under the Plan.

 

During the three and six months ended July 1, 2023, the Company recognized $17,316 and $147,757, respectively, as shared-based compensation expense related to previously granted shares under the Plan.

  

 

(8)     Inventories

Inventories consist of the following:

 

  

June 29,

  

December 30,

 
  

2024

  

2023

 
         

Raw materials

 $2,567,758  $2,861,333 

Work in process

  1,579,991   1,493,582 

Finished goods

  393,889   537,975 
         

Total inventory

  4,541,638   4,892,890 
         

Reserve for obsolescence

  (419,960)  (310,960)
         

Inventories, net

 $4,121,678  $4,581,930 

 

 

  
 

(9)      Accrued Expenses

Accrued expenses consist of the following:

 

  

June 29,

  

December 30,

 
  

2024

  

2023

 
         

Accrued legal and accounting

 $67,846  $86,000 

Accrued payroll and related expenses

  246,953   649,201 
Accrued product returns  288,000   288,000 

Accrued other

  69,054   51,936 
         
  $671,853  $1,075,137 

  

 

(10)     Line of Credit

In May 2023, the Company terminated its $3.0 million revolving line of credit (LOC) with Massachusetts Business Development Corporation (BDC). A new LOC in the amount of $3.0 million was entered into with Rockland Trust Company. The LOC is secured by the accounts receivable and other assets of the Company and has an interest rate of the National Prime Rate as published by the Wall Street Journal (8.5% at June 29, 2024). On June 29, 2024, the Company had $0 of borrowings under this LOC and its borrowing base at the time would have permitted an additional $3.0 million to have been borrowed. The line of credit remains in effect until terminated by mutual agreement of both parties.

  

 

(11)     Note Payable         

In March 2020, the Company acquired inspection equipment for a price of $208 thousand. The full amount was financed through a 5 year note payable with a third-party equipment finance company.   The note is collateralized by the equipment and is being paid in monthly installments of $4 thousand, consisting of principal plus interest at a rate of 6.47%.

 

The aggregate maturities of the notes payable based on the payment terms of the agreement are as follows: 

 

Remaining in:

 

Payments due by period

 

FY 2024

 $23,795 

FY 2025

 $8,090 

Total

  31,885 

 

Total interest expense on notes payable during 2024 was $1,465.

  

 

(12)   Income Taxes

A valuation allowance against deferred tax assets is required to be established or maintained when it is "more likely than not" that all or a portion of deferred tax assets will not be realized.  Management has determined that a valuation allowance is not needed as it expects that the deferred tax asset will be fully utilized.

 

For the three and six months ended June 29, 2024 the deferred tax asset was increased $40,256 and $307,576 for the estimated tax benefit on Q2 and year to date net losses, respectively 

 

 

  
 

ITEM 2

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

 

The following discussion and analysis of financial condition and results of operations is based upon and should be read in conjunction with the financial statements of the Company and notes thereto included in this report and the Company’s Annual Report on Form 10-K for the year ended December 30, 2023 and in CPS’s other SEC reports, which are accessible on the SEC’s website at www.sec.gov and the Company’s website at www.cpstechnologysolutions.com.

 

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements that involve a number of risks and uncertainties. There are a number of factors that could cause the Company’s actual results to differ materially from those forecasted or projected in such forward-looking statements. This includes the impact of the Russian invasion of Ukraine and other conflicts and potential conflicts throughout the world and the impact of a strong dollar on the prices the Company charges to foreign customers, which are discussed in Item 3 of this report. Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof. The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements which may be made to reflect events or changed circumstances after the date hereof or to reflect the occurrence of unanticipated events.

 

Critical Accounting Estimates

The critical accounting estimates utilized by the Company in preparation of the accompanying financial statements are set forth in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 30, 2023, under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. There have been no material changes to these policies since December 30, 2023.

 

Overview

Products we provide include baseplates for motor controllers used in high-speed electric trains, subway cars, wind turbines, and hybrid and electric vehicles. We provide baseplates and housings used in radar, satellite and avionics applications. We provide lids and heat spreaders used with high performance integrated circuits for use in internet switches and routers. We provide baseplates and housings used in modules built with Wide Band Gap Semiconductors like Silicon Carbide (“SiC”) and Gallium Nitride (“GaN”), collectively Metal Matrix Composites (“MMC”). CPS also assembles housings and packages for hybrid circuits. These housings and packages may include MMC components; they may include components made of more traditional materials such as aluminum, cold rolled steel and Kovar. Using its proprietary MMC technology, the Company also produces light-weight vehicle armor, particularly for extreme environments and heavy threat levels. In addition the Company engages in research and development activities with the goal of developing new products that address challenging customer requirements. These activities typically leverage the company’s extensive knowledge base in the development and volume manufacturing of advanced materials.

 

CPS’s products are custom rather than catalog items. They are made to customers’ designs and are used as components in systems built and sold by our customers. At any point in time our product mix will consist of some products with on-going production demand, and some products which are in the prototyping or evaluation stages at our customers. The Company seeks to have a portfolio of products which include products in every stage of the technology adoption lifecycle at our customers. CPS’ growth is dependent upon the level of demand for those products already in production, as well as its success in achieving new "design wins" for future products.

 

As a manufacturer of highly technical and custom products, the Company incurs fixed costs needed to support the business, but which do not vary significantly with changes in sales volume. These costs include the fixed costs of applications such as engineering, tooling design and fabrication, process engineering, and others. Accordingly, particularly given our current size, changes in sales volume generally result in even greater changes in financial performance on a percentage basis as fixed costs are spread over a larger or smaller base. Sales volume is therefore a key financial metric used by management.

 

The Company believes the underlying demand for MMC, housings for hybrid circuits and our proprietary armor solution is growing as the electronics and other industries seek higher performance, higher reliability, and reduced costs. CPS believes that the Company is well positioned to offer our solutions to current and new customers as these demands grow.

 

 

 

CPS was incorporated in Massachusetts in 1984 as Ceramics Process Systems Corporation and reincorporated in Delaware in April 1987 through a merger into a wholly-owned Delaware subsidiary organized for purposes of the reincorporation. In July 1987, CPS completed our initial public offering of 1.5 million shares of our Common Stock. In March 2007, we changed our name from Ceramics Process Systems Corporation to CPS Technologies Corporation.

 

Results of Operations for the Second Fiscal Quarter of 2024 (Q2 2024) Compared to the Second Fiscal Quarter of 2023 (Q2 2023); (all $ in 000s)

 

Revenues totaled $5,030 in Q2 2024 compared with $7,418 generated in Q2 2023, a decrease of 32%. This decrease was mainly due to the completion of the armor contract for the US Navy in Q2 2024 as compared to 2023. In addition, one of the Company’s major customers in 2023 significantly reduced their purchases in Q2 due to their having excess inventory that they are in the process of working down.

 

Gross loss in Q2 2024 totaled $230 or -5% of sales. This compares with gross profit in Q2 2023 of $2,196 or 30% of sales. This percentage decrease was due to several factors including the impact of fixed costs on significantly lower revenues, as well as abnormally low production yield levels in some of our hermetic package products.

 

Selling, general and administrative (SG&A) expenses totaled $1,085 in Q2 2024 compared with SG&A expenses of $1,465 in Q2 2023. This decrease was primarily due to the reduction in variable compensation as a result of weaker results from operations in Q2 2024 as compared to Q2 2023. In addition, the Company was able to reduce its outside consulting costs.

 

The Company experienced an operating loss of $1,315 in Q2 2024 compared with an operating profit of $731 in Q2 2023, a decrease of 280%. This decrease was a result of the decreased gross margin, partially offset by the decrease in SG&A expenses.

 

Results of Operations for the First Six Months of 2024 Compared to the First Six Months of 2023 (all $ in 000s)

 

Total revenue was $10,943 in the first half of 2024, a 25% decrease compared with total revenue of $14,518 in the first half of 2023. This decrease was mainly due to the completion of our armor order for the US Navy in 2024 as compared to 2023. In addition, one of the Company’s major customers in 2023 significantly reduced their purchases in both Q1 and Q2 due to their having excess inventory that they are in the process of working down.

 

Gross margin in the first six months of 2024 totaled $676 or 6% of sales. In the first six months of 2023 gross margin totaled $4,441 or 31% of sales. This decrease was due to the decrease in revenue and the decreased coverage of our fixed costs, as well as the increased costs incurred by the Company in non-revenue producing activities, designed to increase revenue in the future, including fiber reinforced aluminum and new armor configurations. .

 

Selling, general and administrative (SG&A) expenses were $2,251 during the first six months of 2024, down 25% compared with SG&A expenses of $3,016 in the first six months of 2023. Decreased variable compensation accruals due to lower 2024 profitability as well as reduced commission and consulting expenses were the primary reasons for this decrease.

 

 

 

During the first half of 2024, the Company had net interest income of $170. This compares with interest income of $95 realized during the first half of 2023. The increase in interest income is primarily due to higher interest rates.

 

In the first six months of 2024 the Company had an operating loss of $1,575 compared with operating income $1,425 in the same period last year. The net loss for the first six months of 2024 totaled $1,097 versus operating income of $1,060 in the first six months of 2023.

 

CPS does not rely on raw materials from Ukraine, Russia, Israel or Gaza. As a result, we do not believe that the Russian invasion of Ukraine or the conflict in Israel and Gaza will have a direct impact on our results. Nevertheless, there could be an indirect impact regarding supply chain and inflationary issues as a result of these conflicts.

 

Inflation has had an impact on our costs. Thus far, we have been able to pass along these increases to our customers, but there is no guarantee that we will be able to continue this in the future. In addition, there is often a lag between when the costs increase and when we can adjust customer prices. Some of our larger customers will have pricing agreements, typically for one year, and we must wait for those agreements to end before making any pricing adjustments. Further, several of our larger customers buy from our major competitor in Japan. The devaluation of the Japanese yen related to the US dollar has made it more difficult for us to increase our prices in an amount necessary to fully make up for higher costs.

 

These factors combine to create a higher degree of uncertainty regarding future financial performance.

 

Liquidity and Capital Resources (all $ in 000s unless noted)

The Company’s liquid assets at June 29, 2024 consist of cash and cash equivalents of $6,306 and marketable debt securities with a fair value of $759. This compares to cash and cash equivalents at December 30, 2023 of $8,814 and no marketable debt securities held at December 30, 2023.  The decrease in cash was due primarily to a decrease in working capital, higher expenditures for capital equipment acquired to improve future performance as well as the operating losses incurred in 2024.

 

Accounts receivable at June 29, 2024 totaled $4,263 compared with $4,472 at December 30, 2023. Days Sales Outstanding (DSO) increased from 60 days at the end of 2023 to 77 days at the end of Q2 2024. The increase in DSO was due to several large payments due at the end of Q2 2024 being delayed to the beginning of Q3 2024, as well as significantly higher sales volumes at the end of Q2 2024 as compared to the beginning of Q2 2024. The accounts receivable balances at December 30, 2023, and June 29, 2024 were both net of an allowance for doubtful accounts of $10.

 

 

 

Inventories totaled $4,122 at June 29, 2024 compared with inventory totaling $4,582 at December 30, 2023. The inventory turnover in the most recent four quarters ending Q2 2024 was 4.6 times (based on a 5 quarter end average) compared with 4.3 times averaged during the four quarters of 2023.

 

The Company expects it will continue to be able to fund its operations for the remainder of 2024 from operations and existing cash balances.

 

The Company continues to sell to a limited number of customers and the loss of any one of these customers could cause the Company to require additional external financing. Failure to generate sufficient revenues, raise additional capital or reduce certain discretionary spending could have a material adverse effect on the Company’s ability to achieve its business objectives.

 

Management believes that existing cash balances will be sufficient to fund our cash requirements for the foreseeable future. However, there is no assurance that we will be able to generate sufficient revenues or reduce certain discretionary spending in the event that planned operational goals are not met such that we will be able to meet our obligations as they become due.

 

Contractual Obligations (all $ in 000s unless otherwise noted)

 

In May 2023, the Company terminated its $3.0 million revolving line of credit (LOC) with Massachusetts Business Development Corporation (BDC). A new LOC in the amount of $3.0 million was entered into with Rockland Trust Company. The LOC is secured by the accounts receivable and other assets of the Company and has an interest rate of the National Prime Rate as published by the Wall Street Journal. On June 29, 2024, the Company had $0 of borrowings under this LOC and its borrowing base at the time would have permitted an additional $3.0 million to have been borrowed.

 

In March 2020, the company acquired a scanning acoustic microscope for a price of $208 thousand. The full amount was financed through a 5 year note payable with a financing company. The note is collateralized by the microscope and is being paid in monthly installments of $4 thousand, consisting of principal plus interest at a rate of 6.47%

 

The Company has one real estate lease expiring in February 2026. CPS also has a few other leases for equipment which are minor in nature and are generally short-term in duration. None of these have been capitalized. (Note 4, Leases)  

 

 

 

 

ITEM 3

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

 

The Company is not significantly exposed to the direct impact of interest rate changes or foreign currency fluctuations. Nevertheless, one of the Company’s major competitors is located in Japan. The relative strength of the US dollar versus the Japanese yen can have a negative impact on the Company’s ability to raise prices when necessary to offset increasing costs. The Company has not used derivative financial instruments.

 

Although CPS has not been directly impacted by the war in Ukraine, potential supply chain disruptions and its impact on energy costs are areas where we could be impacted in the future.

 

Inflation is an area where we have seen some impact on our business. We have seen significant price increases in commodity raw materials, such as aluminum, as well as increases in other costs of doing business. As we receive new orders we have been able to pass on most of these costs to our customers. In the case of longer term pricing agreements, we have been able to pass on some of these costs through surcharges and in other ways to mitigate the impact on our profit. As inflation continues, our ability to continue to absorb higher costs by raising customer prices cannot be guaranteed.

 

ITEM 4

CONTROLS AND PROCEDURES

 

 

(a)      The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-14(c) and 15d - 14(c) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Form 10-Q (the “Evaluation Date”). Based on such evaluation, such officers have concluded that, as of the Evaluation Date, 1) the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in reports the Company files under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and 2) the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure.

 

(b)     Changes in Internal Controls. There has been no change in our internal control over financial reporting that occurred during our most recent fiscal quarter that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.

 

 

 

PART II OTHER INFORMATION

 

ITEM 1

LEGAL PROCEEDINGS

 

 

None.  The potential claim mentioned in form 10-Q dated March 30, 2024 has been fully resolved.

 

ITEM 1A

RISK FACTORS

 

 

There have been no material changes to the risk factors as discussed in our 2023 Form 10-K.

 

ITEM 2

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. 

 

 

None.

 

ITEM 3

DEFAULTS UPON SENIOR SECURITIES

 

 

None.

 

ITEM 4

MINE SAFETY DISCLOSURES

 

 

Not applicable.

 

ITEM 5

OTHER INFORMATION

 

 

Not applicable.

 

ITEM 6

EXHIBITS:

 

 

(a)

Exhibits:

 

 

Exhibit 31.1 Certification Of President and Chief Executive Officer Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 302 Of The Sarbanes-Oxley Act Of 2002

 

Exhibit 31.2 Certification Of Chief Financial Officer Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 302 Of The Sarbanes-Oxley Act Of 2002

 

Exhibit 32.1 Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 Of The Sarbanes-Oxley Act Of 2002

 

101.INS Inline XBRL Instance Document

 

101.SCH Inline XBRL Taxonomy Extension Schema Document

 

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document

 

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document

 

101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document

 

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document

 

104 Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101)

 

 

 

SIGNATURES

 

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

 

CPS TECHNOLOGIES CORPORATION

(Registrant)

 

Date: August 2, 2024

/s/Brian T. Mackey

Brian T. Mackey

President and Chief Executive Officer

 

Date: August 2, 2024

/s/ Charles K. Griffith Jr.

Charles K. Griffith Jr.

Chief Financial Officer

 

 

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Brian T. Mackey, certify that:

 

I have reviewed this quarterly report on Form 10-Q;

Based on my knowledge, this quarterly 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 quarterly report;

Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report;

The registrant`s other certifying officers 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 quarterly 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 quarterly report based on such evaluation (the "Evaluation Date"); and

 

d) Disclosed in this quarterly report any change in the registrant`s internal control over financial reporting that occurred during the registrant`s most recent fiscal quarter that has materially affected or is reasonably like to materially affect, the registrant`s internal control over financial reporting.

 

The registrant`s other certifying officers 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 information; and

 

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

 

Date: August 2, 2024
/s/ Brian T. Mackey
Brian T. Mackey
President and Chief Executive Officer

 

 

 

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Charles K. Griffith Jr., certify that:

 

I have reviewed this quarterly report on Form 10-Q;

Based on my knowledge, this quarterly 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 quarterly report;

Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report;

The registrant`s other certifying officers 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 quarterly 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 quarterly report based on such evaluation (the "Evaluation Date"); and

 

d) Disclosed in this quarterly report any change in the registrant`s internal control over financial reporting that occurred during the registrant`s most recent fiscal quarter that has materially affected or is reasonably like to materially affect, the registrant`s internal control over financial reporting.

 

The registrant`s other certifying officers 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 information; and

 

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

 

Date: August 2, 2024
/s/ Charles K. Griffith Jr.
Charles K. Griffith Jr.
Chief Financial Officer

 

 

 

 

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of CPS Technologies Corporation (the "Company") on Form 10-Q for the three month period ended June 29, 2024 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Brian T. Mackey, President and Chief Executive Officer of the Company, and I, Charles K. Griffith Jr., Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

 

The Report 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 Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: August 2, 2024
/s/ Brian T. Mackey
Brian T. Mackey
President and Chief Executive Officer

 

Date: August 2, 2024
/s/ Charles K. Griffith Jr.
Charles K. Griffith Jr.
Chief Financial Officer

 

 
v3.24.2.u1
Document And Entity Information - shares
6 Months Ended
Jun. 29, 2024
Jul. 24, 2024
Document Information [Line Items]    
Entity Central Index Key 0000814676  
Entity Registrant Name CPS TECHNOLOGIES CORP/DE/  
Amendment Flag false  
Current Fiscal Year End Date --12-28  
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2024  
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Jun. 29, 2024  
Document Transition Report false  
Entity File Number 0-16088  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 04-2832509  
Entity Address, Address Line One 111 South Worcester Street  
Entity Address, City or Town Norton  
Entity Address, State or Province MA  
Entity Address, Postal Zip Code 02766-2102  
City Area Code 508  
Local Phone Number 222-0614  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Title of 12(b) Security Common Stock, $0.01 par value  
Trading Symbol CPSH  
Security Exchange Name NASDAQ  
Entity Common Stock, Shares Outstanding   14,525,960
v3.24.2.u1
Balance Sheets (Current Period Unaudited) - USD ($)
Jun. 29, 2024
Dec. 30, 2023
Current assets:    
Cash and cash equivalents $ 6,306,244 $ 8,813,626
Marketable securities, at fair value 758,701 0
Accounts receivable-trade, net 4,064,293 4,389,155
Accounts receivable-other 198,348 83,191
Inventories, net 4,121,678 4,581,930
Prepaid expenses and other current assets 366,655 276,349
Total current assets 15,815,919 18,144,251
Property and equipment:    
Production equipment 9,940,480 11,271,982
Furniture and office equipment 891,921 952,883
Leasehold improvements 873,730 985,649
Total cost 11,706,131 13,210,514
Accumulated depreciation and amortization (10,068,557) (11,936,004)
Construction in progress 496,331 281,629
Net property and equipment 2,133,905 1,556,139
Right-of-use lease asset 261,000 332,000
Deferred taxes, net 1,877,302 1,569,726
Total assets 20,088,126 21,602,116
LIABILITIES AND STOCKHOLDERS` EQUITY    
Common stock, $0.01 par value, authorized 20,000,000 shares; issued 14,601,487 shares; outstanding 14,519,215 shares at each June 29, 2024 and December 30, 2023 146,015 146,015
Additional paid-in capital 40,386,335 40,180,893
Accumulated other comprehensive income 8,701 0
Accumulated deficit (23,852,254) (22,754,796)
Less cost of 82,272 common shares repurchased at each June 29, 2024 and December 30, 2023 (250,138) (250,138)
Total stockholders` equity 16,438,659 17,321,974
Total liabilities and stockholders` equity 20,088,126 21,602,116
Current liabilities:    
Note payable, current portion 31,885 46,797
Accounts payable 2,587,874 2,535,086
Accrued expenses 671,853 1,075,137
Deferred revenue 65,578 251,755
Current lease liability 160,000 160,000
Total current liabilities 3,517,190 4,068,775
Note payable less current portion 0 8,090
Deferred revenue – long term 31,277 31,277
Long-term lease liability 101,000 172,000
Total liabilities 3,649,467 4,280,142
Commitments and contingencies (note 6)
v3.24.2.u1
Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares
Jun. 29, 2024
Dec. 30, 2023
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, authorized (in shares) 20,000,000 20,000,000
Common stock, issued (in shares) 14,601,487 14,601,487
Common stock, outstanding (in shares) 14,519,215 14,519,215
Treasury stock, shares (in shares) 82,272 82,272
v3.24.2.u1
Statements of Operations and Other Comprehensive Income (Unaudited) - USD ($)
3 Months Ended 6 Months Ended
Jun. 29, 2024
Jul. 01, 2023
Jun. 29, 2024
Jul. 01, 2023
Product sales $ 5,030,313 $ 7,418,138 $ 10,942,947 $ 14,518,405
Total revenues 5,030,313 7,418,138 10,942,947 14,518,405
Cost of product sales 5,260,305 5,221,879 10,266,629 10,077,444
Gross margin (229,992) 2,196,259 676,318 4,440,961
Selling, general, and administrative expense 1,084,995 1,465,349 2,250,917 3,015,871
Income (loss) from operations (1,314,987) 730,910 (1,574,599) 1,425,090
Interest income (expense), net 90,851 79,652 170,021 95,242
Net income (loss) before income tax (1,224,136) 810,562 (1,404,578) 1,520,332
Income tax provision (benefit) (269,832) 210,058 (307,120) 460,628
Net income (loss) (954,304) 600,503 (1,097,458) 1,059,704
Net unrealized gains on available for sale securities 8,701   8,701  
Total other comprehensive income 8,701   8,701  
Total comprehensive income (loss) $ (945,603) $ 600,503 $ (1,088,757) $ 1,059,704
Net income (loss) per basic common share (in dollars per share) $ (0.07) $ 0.04 $ (0.08) $ 0.07
Weighted average number of basic common shares outstanding (in shares) 14,519,215 14,493,970 14,519,215 14,473,128
Net income (loss) per diluted common share (in dollars per share) $ (0.07) $ 0.04 $ (0.08) $ 0.07
Weighted average number of diluted common shares outstanding (in shares) 14,519,215 14,621,929 14,519,215 14,630,765
v3.24.2.u1
Statements of Stockholders' Equity (Unaudited) - USD ($)
Common Stock [Member]
Additional Paid-in Capital [Member]
AOCI Attributable to Parent [Member]
Retained Earnings [Member]
Treasury Stock, Common [Member]
Total
Balance (in shares) at Dec. 31, 2022 14,460,486          
Balance at Dec. 31, 2022 $ 144,605 $ 39,726,851   $ (24,125,092) $ (40,848) $ 15,705,516
Share-based compensation expense 0 147,757   0 0 147,757
Net income (loss) $ 0 0   1,059,704 0 $ 1,059,704
Employee option exercises (in shares) 86,001         86,001
Employee option exercises $ 860 103,845   0 (71,090) $ 33,615
Balance (in shares) at Jul. 01, 2023 14,546,487          
Balance at Jul. 01, 2023 $ 145,465 39,978,453   (23,065,388) (111,938) 16,946,592
Balance (in shares) at Apr. 01, 2023 14,467,487          
Balance at Apr. 01, 2023 $ 144,675 39,867,507   (23,665,891) (41,638) 16,304,653
Share-based compensation expense 0 17,316   0 0 17,316
Net income (loss) $ 0 0   600,503 0 $ 600,503
Employee option exercises (in shares) 79,000         79,000
Employee option exercises $ 790 93,630   0 (70,300) $ 24,120
Balance (in shares) at Jul. 01, 2023 14,546,487          
Balance at Jul. 01, 2023 $ 145,465 39,978,453   (23,065,388) (111,938) 16,946,592
Balance (in shares) at Dec. 30, 2023 14,601,487          
Balance at Dec. 30, 2023 $ 146,015 40,180,893 $ 0 (22,754,796) (250,138) 17,321,974
Share-based compensation expense 0 205,442 0 0 0 205,442
Other comprehensive income 0 0 8,701 0 0 8,701
Net income (loss) $ 0 0 0 (1,097,458) 0 $ (1,097,458)
Employee option exercises (in shares)           0
Balance (in shares) at Jun. 29, 2024 14,601,487          
Balance at Jun. 29, 2024 $ 146,015 40,386,335 8,701 (23,852,254) (250,138) $ 16,438,659
Balance (in shares) at Mar. 29, 2024 14,601,487          
Balance at Mar. 29, 2024 $ 146,015 40,341,855 0 (22,897,950) (250,138) 17,339,782
Share-based compensation expense 0 44,480 0 0 0 44,480
Other comprehensive income 0 0 8,701 0 0 8,701
Net income (loss) $ 0 0 0 (954,304) 0 (954,304)
Balance (in shares) at Jun. 29, 2024 14,601,487          
Balance at Jun. 29, 2024 $ 146,015 $ 40,386,335 $ 8,701 $ (23,852,254) $ (250,138) $ 16,438,659
v3.24.2.u1
Statements of Cash Flows (Unaudited) - USD ($)
6 Months Ended
Jun. 29, 2024
Jul. 01, 2023
Cash flows from operating activities:    
Net income (loss) $ (1,097,458) $ 1,059,704
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:    
Depreciation and amortization 237,954 252,969
Share-based compensation 205,442 147,757
Changes in:    
Accounts receivable-trade 324,862 (1,296,584)
Accounts receivable-other (115,157) 611,028
Inventories 460,252 62,148
Prepaid expenses and other current assets (90,306) (77,073)
Accounts payable 52,788 522,667
Accrued expenses (403,284) 40,658
Deferred taxes (307,576) 405,404
Deferred revenue (186,177) (892,803)
Net cash provided by (used in) operating activities (918,660) 835,875
Cash flows from investing activities:    
Purchases of property and equipment (815,720) (433,579)
Purchase of marketable securities (750,000) 0
Net cash used in investing activities (1,565,720) (433,579)
Cash flows from financing activities:    
Proceeds from exercise of employee stock options, net of repurchases 0 33,615
Payments on note payable (23,002) (21,439)
Net cash provided by (used in) financing activities (23,002) 12,176
Net increase (decrease) in cash and cash equivalents (2,507,382) 414,472
Cash and cash equivalents at beginning of period 8,813,626 8,266,753
Cash and cash equivalents at end of period 6,306,244 8,681,225
Supplemental disclosures of cash flows information:    
Cash paid for interest 1,465 2,902
Supplemental disclosures of non-cash activity:    
Net exercise of stock options $ 0 $ 71,090
v3.24.2.u1
Note 1 - Nature of Business
6 Months Ended
Jun. 29, 2024
Notes to Financial Statements  
Business Description and Basis of Presentation [Text Block]

(1)     Nature of Business

CPS Technologies Corporation (the “Company” or “CPS”) provides advanced material solutions to the electronics, power generation, automotive and other industries. The Company’s primary advanced material solution is metal-matrix composites which are a combination of metal and ceramic. 

 

CPS also assembles housings and packages for hybrid circuits. These housings and packages may include components made of metal-matrix composites or they may include components made of more traditional materials such as aluminum, copper-tungsten, etc.

 

Using its proprietary MMC technology, the Company also produces light-weight armor, particularly for extreme environments and heavy threat levels.

 

The Company also engages in research and development, in some cases government funded and in others internally funded, focused on developing new products in response to customer requirements. These products expand our offerings in existing markets and enable penetration into new markets.

 

The Company sells into several end markets including the wireless communications infrastructure market, high-performance microprocessor market, motor controller market, and other microelectronic and defense markets. 

  

v3.24.2.u1
Note 2 - Summary of Significant Accounting Policies
6 Months Ended
Jun. 29, 2024
Notes to Financial Statements  
Significant Accounting Policies [Text Block]

(2)     Summary of Significant Accounting Policies

As permitted by the rules of the Securities and Exchange Commission applicable to quarterly reports on Form 10-Q, these notes are condensed and do not contain all disclosures required by generally accepted accounting principles.

 

The accompanying financial statements are unaudited. In the opinion of management, the unaudited financial statements of CPS reflect all normal recurring adjustments which are necessary to present fairly the financial position and results of operations for such periods.

 

The Company’s balance sheet at December 30, 2023 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

 

For further information, refer to the financial statements and footnotes thereto included in the Registrant’s Annual Report on Form 10-K for the year ended December 30, 2023 and in CPS’s other SEC reports, which are accessible on the SEC’s website at www.sec.gov and the Company’s website at www.cpstechnologysolutions.com.

 

The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

v3.24.2.u1
Note 3 - Marketable Securities
6 Months Ended
Jun. 29, 2024
Notes to Financial Statements  
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

(3)     Marketable Securities

           Investments consist of U.S. Treasury Bills with maturities up to one year. Since it is not management’s intention to hold these debt securities until the maturity dates, these have been classified as available-for-sale (“AFS”) and are recorded on the balance sheet at fair value, with changes in fair value recorded as a component of other comprehensive income.

v3.24.2.u1
Note 4 - Fair Value of Marketable Securities
6 Months Ended
Jun. 29, 2024
Notes to Financial Statements  
Fair Value Disclosures [Text Block]

(4)     Fair value of Marketable Securities

ASC 820, Fair Value Measurements (“ASC 820”) states that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The three-tiered fair value hierarchy, which prioritizes which inputs should be used in measuring fair value, is comprised of: (Level I) observable inputs such as quoted prices in active markets; (Level II) inputs other than quoted prices in active markets that are observable either directly or indirectly and (Level III) unobservable inputs for which there is little or no market data. The fair value hierarchy requires the use of observable market data when available in determining fair value. CPS’ marketable securities consist solely of US Government bonds with a maturity of 12 months or less and which fall under level II of the fair value hierarchy. The value of these bonds as of June 29, 2024 was $758,701. CPS held no investments in marketable securities as of December 30, 2023. 

 

    

June 29, 2024

December 30, 2023

Cost basis

   

$  750,000

--

Unrealized gain

   

$      8,701

--

Total fair value

   

$  758,701

--

 

v3.24.2.u1
Note 5 - Net Income Per Common and Common Equivalent Share
6 Months Ended
Jun. 29, 2024
Notes to Financial Statements  
Earnings Per Share [Text Block]

(5)     Net Income Per Common and Common Equivalent Share

Basic net income per common share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per common share is calculated by dividing net income by the sum of the weighted average number of common shares plus additional common shares that would have been outstanding if potential dilutive common shares had been issued for granted stock options and stock purchase rights. Common stock equivalents are excluded from the diluted calculations when a net loss is incurred as they would be anti-dilutive.  Had there been a profit in Q2 2024, the dilutive effect would have been 29,254 shares.

 

The following table presents the calculation of both basic and diluted EPS:

 

  

Three Months Ended

  

Six Months Ended

 
  

June 29,

  

July 1,

  

June 29,

  

July 1,

 
  

2024

  

2023

  

2024

  

2023

 

Basic EPS Computation:

                

Numerator:

                

Net income (loss)

 $(954,304) $600,503  $(1,097,458) $1,059,704 
                 

Denominator:

                

Weighted average

                

Common shares

                

Outstanding

  14,519,215   14,493,970   14,519,215   14,473,128 
                 

Basic EPS

 $(0.07) $0.04  $(0.08) $0.07 
                 

Diluted EPS Computation:

                

Numerator:

                

Net income (loss)

 $(954,304) $600,503  $(1,097,458) $1,059,704 
                 

Denominator:

                

Weighted average

                

Common shares

                

Outstanding

  14,519,215   14,493,970   14,519,215   14,473,128 

Dilutive effect of stock options

  -   127,959   -   157,637 
                 

Total Shares

  14,519,215   14,621,929   14,519,215   14,630,765 
                 

Diluted EPS

 $(0.07) $0.04  $(0.08) $0.07 

  

v3.24.2.u1
Note 6 - Commitments and Contingencies
6 Months Ended
Jun. 29, 2024
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]

(6)     Commitments & Contingencies

 

Commitments

 

Operating Leases

The Company has one real estate lease expiring in February 2026. CPS also has a few other leases for equipment which are minor in nature and are generally short-term in duration. None of these equipment leases have been capitalized as the Company elected an accounting policy for short-term leases, which allows lessees to avoid recognizing right-of-use assets and liabilities for leases with terms of 12 months or fewer.

 

The real estate lease expiring in 2026 (the “Norton facility lease”) is included as a right-of-use lease asset and corresponding lease liability on the balance sheet. This asset and liability was recognized based on the present value of lease payments over the lease term using the Company’s incremental borrowing rate at commencement date. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

 

The Norton facility lease comprises approximately 38 thousand square feet. The lease is triple net lease wherein the Company is responsible for payment of all real estate taxes, operating costs and utilities. The Company also has an option to renew the lease starting in March 2026 through February 2032. Annual rental payments range from $160 thousand to $165 thousand through maturity.

 

The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s capitalized operating lease as of June 29, 2024:

 

(Dollars in Thousands)

 

June 29, 2024

 

Maturity of capitalized lease liabilities

 

Lease payments

 
     

2024

 $83 

2025

  165 

2026

  28 

Total undiscounted operating lease payments

 $276 

Less: Imputed interest

  (15)

Present value of operating lease liability

 $261 

 

 

Balance Sheet Classification

    

Current lease liability

 $160 

Long-term lease liability

  101 

Total operating lease liability

 $261 
     

Other Information

    

Remaining lease term for capitalized operating lease (months)

  20 

Discount rate for capitalized operating leases

  6.6%

 

Operating Lease Costs and Cash Flows

Operating lease cost and cash paid was $41 thousand during the second quarter of 2024 and $82 thousand for the six months ended June 29, 2024. These costs are related to its long-term operating lease. All other short-term leases were immaterial.

 

Finance Leases

The company does not have any finance leases.

  

v3.24.2.u1
Note 7 - Share-based Payments
6 Months Ended
Jun. 29, 2024
Notes to Financial Statements  
Share-Based Payment Arrangement [Text Block]

(7)     Share-Based Payments

The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. That cost is recognized over the period during which an employee is required to provide services in exchange for the award, the requisite service period (usually the vesting period). The Company provides an estimate of forfeitures at initial grant date. Reductions in compensation expense associated with the forfeited options are estimated at the date of grant, and this estimated forfeiture rate is adjusted periodically based on actual forfeiture experience. The company uses the Black-Scholes option pricing model to determine the fair value of the stock options granted.

 

During the quarter ended June 29, 2024, no stock options were granted to employees under the Company’s 2020 Equity Incentive Plan Stock Incentive Plan (the “Plan”) and no stock options were granted to outside directors during the quarter ended June 29, 2024. During the quarter ended July 1, 2023, a total of 60,000 stock options were granted to employees under the Company’s 2020 Equity Incentive Plan Stock Incentive Plan (the “Plan”) and no stock options were granted to outside directors during the quarter ended July 1, 2023, issued at a weighted average price of $2.66 per share.

 

During the three and six months ended June 29, 2024, there were no options exercised and corresponding shares issued. During the three and six months ended July 1, 2023, there were 79,000 and 86,001 options exercised and corresponding shares issued at a weighted average price of $1.20 and $1.22, respectively. 

 

During the three and six months ended June 29, 2024, the Company did not repurchase any shares for employees to facilitate their exercise of stock options. During the three and six months ended July 1, 2023, the Company repurchased 24,642 and 24,927 shares, respectively, for employees to facilitate their exercise of stock options. 

 

There were also 1,097,900 options outstanding at a weighted average price of $2.61 with a weighted average remaining term of 6.81 years as of June 29, 2024, and there were 610,000 options exercisable at a weighted average price of $2.45 with a weighted average remaining term of 5.09 years as of June 29, 2024. The Plan, as amended, is authorized to issue 1,500,000 shares of common stock. As of June 29, 2024, there were 638,300 shares available for future grants under the 2020 Plan and 236,200 shares outstanding under the 2009 Plan.


           As of June 29, 2024, there was $648 thousand of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan; that cost is expected to be recognized over a weighted average period of 2.93 years.

 

During the three and six months ended June 29, 2024, the Company recognized $44,480 and $205,442, respectively, as shared-based compensation expense related to previously granted shares under the Plan.

 

During the three and six months ended July 1, 2023, the Company recognized $17,316 and $147,757, respectively, as shared-based compensation expense related to previously granted shares under the Plan.

  

v3.24.2.u1
Note 8 - Inventories
6 Months Ended
Jun. 29, 2024
Notes to Financial Statements  
Inventory Disclosure [Text Block]

(8)     Inventories

Inventories consist of the following:

 

  

June 29,

  

December 30,

 
  

2024

  

2023

 
         

Raw materials

 $2,567,758  $2,861,333 

Work in process

  1,579,991   1,493,582 

Finished goods

  393,889   537,975 
         

Total inventory

  4,541,638   4,892,890 
         

Reserve for obsolescence

  (419,960)  (310,960)
         

Inventories, net

 $4,121,678  $4,581,930 

 

v3.24.2.u1
Note 9 - Accrued Expenses
6 Months Ended
Jun. 29, 2024
Notes to Financial Statements  
Accounts Payable and Accrued Liabilities Disclosure [Text Block]

(9)      Accrued Expenses

Accrued expenses consist of the following:

 

  

June 29,

  

December 30,

 
  

2024

  

2023

 
         

Accrued legal and accounting

 $67,846  $86,000 

Accrued payroll and related expenses

  246,953   649,201 
Accrued product returns  288,000   288,000 

Accrued other

  69,054   51,936 
         
  $671,853  $1,075,137 

  

v3.24.2.u1
Note 10 - Line of Credit
6 Months Ended
Jun. 29, 2024
Notes to Financial Statements  
Debt Disclosure [Text Block]

(10)     Line of Credit

In May 2023, the Company terminated its $3.0 million revolving line of credit (LOC) with Massachusetts Business Development Corporation (BDC). A new LOC in the amount of $3.0 million was entered into with Rockland Trust Company. The LOC is secured by the accounts receivable and other assets of the Company and has an interest rate of the National Prime Rate as published by the Wall Street Journal (8.5% at June 29, 2024). On June 29, 2024, the Company had $0 of borrowings under this LOC and its borrowing base at the time would have permitted an additional $3.0 million to have been borrowed. The line of credit remains in effect until terminated by mutual agreement of both parties.

  

v3.24.2.u1
Note 11 - Note Payable
6 Months Ended
Jun. 29, 2024
Notes to Financial Statements  
Long-Term Debt [Text Block]

(11)     Note Payable         

In March 2020, the Company acquired inspection equipment for a price of $208 thousand. The full amount was financed through a 5 year note payable with a third-party equipment finance company.   The note is collateralized by the equipment and is being paid in monthly installments of $4 thousand, consisting of principal plus interest at a rate of 6.47%.

 

The aggregate maturities of the notes payable based on the payment terms of the agreement are as follows: 

 

Remaining in:

 

Payments due by period

 

FY 2024

 $23,795 

FY 2025

 $8,090 

Total

  31,885 

 

Total interest expense on notes payable during 2024 was $1,465.

  

v3.24.2.u1
Note 12 - Income Taxes
6 Months Ended
Jun. 29, 2024
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

(12)   Income Taxes

A valuation allowance against deferred tax assets is required to be established or maintained when it is "more likely than not" that all or a portion of deferred tax assets will not be realized.  Management has determined that a valuation allowance is not needed as it expects that the deferred tax asset will be fully utilized.

 

For the three and six months ended June 29, 2024 the deferred tax asset was increased $40,256 and $307,576 for the estimated tax benefit on Q2 and year to date net losses, respectively 

 

v3.24.2.u1
Insider Trading Arrangements
6 Months Ended
Jun. 29, 2024
Insider Trading Arr Line Items  
Material Terms of Trading Arrangement [Text Block]

ITEM 5

OTHER INFORMATION

 

 

Not applicable.

Rule 10b5-1 Arrangement Adopted [Flag] false
Non-Rule 10b5-1 Arrangement Adopted [Flag] false
Rule 10b5-1 Arrangement Terminated [Flag] false
Non-Rule 10b5-1 Arrangement Terminated [Flag] false
v3.24.2.u1
Note 4 - Fair Value of Marketable Securities (Tables)
6 Months Ended
Jun. 29, 2024
Notes Tables  
Fair Value Measurements, Recurring and Nonrecurring [Table Text Block]
    

June 29, 2024

December 30, 2023

Cost basis

   

$  750,000

--

Unrealized gain

   

$      8,701

--

Total fair value

   

$  758,701

--

v3.24.2.u1
Note 5 - Net Income Per Common and Common Equivalent Share (Tables)
6 Months Ended
Jun. 29, 2024
Notes Tables  
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]
  

Three Months Ended

  

Six Months Ended

 
  

June 29,

  

July 1,

  

June 29,

  

July 1,

 
  

2024

  

2023

  

2024

  

2023

 

Basic EPS Computation:

                

Numerator:

                

Net income (loss)

 $(954,304) $600,503  $(1,097,458) $1,059,704 
                 

Denominator:

                

Weighted average

                

Common shares

                

Outstanding

  14,519,215   14,493,970   14,519,215   14,473,128 
                 

Basic EPS

 $(0.07) $0.04  $(0.08) $0.07 
                 

Diluted EPS Computation:

                

Numerator:

                

Net income (loss)

 $(954,304) $600,503  $(1,097,458) $1,059,704 
                 

Denominator:

                

Weighted average

                

Common shares

                

Outstanding

  14,519,215   14,493,970   14,519,215   14,473,128 

Dilutive effect of stock options

  -   127,959   -   157,637 
                 

Total Shares

  14,519,215   14,621,929   14,519,215   14,630,765 
                 

Diluted EPS

 $(0.07) $0.04  $(0.08) $0.07 
v3.24.2.u1
Note 6 - Commitments and Contingencies (Tables)
6 Months Ended
Jun. 29, 2024
Notes Tables  
Lessee, Operating Lease, Liability, to be Paid, Maturity [Table Text Block]

(Dollars in Thousands)

 

June 29, 2024

 

Maturity of capitalized lease liabilities

 

Lease payments

 
     

2024

 $83 

2025

  165 

2026

  28 

Total undiscounted operating lease payments

 $276 

Less: Imputed interest

  (15)

Present value of operating lease liability

 $261 

Balance Sheet Classification

    

Current lease liability

 $160 

Long-term lease liability

  101 

Total operating lease liability

 $261 
     

Other Information

    

Remaining lease term for capitalized operating lease (months)

  20 

Discount rate for capitalized operating leases

  6.6%
v3.24.2.u1
Note 8 - Inventories (Tables)
6 Months Ended
Jun. 29, 2024
Notes Tables  
Schedule of Inventory, Current [Table Text Block]
  

June 29,

  

December 30,

 
  

2024

  

2023

 
         

Raw materials

 $2,567,758  $2,861,333 

Work in process

  1,579,991   1,493,582 

Finished goods

  393,889   537,975 
         

Total inventory

  4,541,638   4,892,890 
         

Reserve for obsolescence

  (419,960)  (310,960)
         

Inventories, net

 $4,121,678  $4,581,930 
v3.24.2.u1
Note 9 - Accrued Expenses (Tables)
6 Months Ended
Jun. 29, 2024
Notes Tables  
Schedule of Accrued Liabilities [Table Text Block]
  

June 29,

  

December 30,

 
  

2024

  

2023

 
         

Accrued legal and accounting

 $67,846  $86,000 

Accrued payroll and related expenses

  246,953   649,201 
Accrued product returns  288,000   288,000 

Accrued other

  69,054   51,936 
         
  $671,853  $1,075,137 
v3.24.2.u1
Note 11 - Note Payable (Tables)
6 Months Ended
Jun. 29, 2024
Notes Tables  
Schedule of Maturities of Long-Term Debt [Table Text Block]

Remaining in:

 

Payments due by period

 

FY 2024

 $23,795 

FY 2025

 $8,090 

Total

  31,885 
v3.24.2.u1
Note 4 - Fair Value of Marketable Securities (Details Textual)
Jun. 29, 2024
USD ($)
Investments, Fair Value Disclosure $ 758,701
v3.24.2.u1
Note 4 - Fair Value of Marketable Securities - Marketable Securities Purchased (Details)
6 Months Ended
Jun. 29, 2024
USD ($)
Cost basis $ 750,000
Unrealized gain 8,701
Total fair value $ 758,701
v3.24.2.u1
Note 5 - Net Income Per Common and Common Equivalent Share (Details Textual) - shares
3 Months Ended 6 Months Ended
Jun. 29, 2024
Jul. 01, 2023
Jun. 29, 2024
Jul. 01, 2023
Weighted Average Number of Shares Outstanding, Diluted, Adjustment (in shares) 0 127,959 0 157,637
Scenario, Plan [Member]        
Weighted Average Number of Shares Outstanding, Diluted, Adjustment (in shares) 29,254      
v3.24.2.u1
Note 5 - Net Income Per Common and Common Equivalent Share - Table of Both Basic and Diluted EPS (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 29, 2024
Jun. 29, 2024
Jul. 01, 2023
Jun. 29, 2024
Jul. 01, 2023
Basic EPS Computation:          
Net income (loss) $ (954,304) $ (954,304) $ 600,503 $ (1,097,458) $ 1,059,704
Outstanding (in shares)   14,519,215 14,493,970 14,519,215 14,473,128
Basic EPS (in dollars per share)   $ (0.07) $ 0.04 $ (0.08) $ 0.07
Diluted EPS Computation:          
Net income (loss) $ (954,304) $ (954,304) $ 600,503 $ (1,097,458) $ 1,059,704
Outstanding (in shares)   14,519,215 14,493,970 14,519,215 14,473,128
Dilutive effect of stock options (in shares)   0 127,959 0 157,637
Total Shares (in shares)   14,519,215 14,621,929 14,519,215 14,630,765
Diluted EPS (in dollars per share)   $ (0.07) $ 0.04 $ (0.08) $ 0.07
v3.24.2.u1
Note 6 - Commitments and Contingencies (Details Textual)
ft² in Thousands, $ in Thousands
3 Months Ended 6 Months Ended
Jun. 29, 2024
USD ($)
ft²
Jun. 29, 2024
USD ($)
ft²
Area of Real Estate Property (Square Foot) | ft² 38 38
Norton Facility [Member]    
Operating Lease, Expense $ 41 $ 82
Minimum [Member]    
Lessee, Operating Lease, Annual Rent Payments   160
Maximum [Member]    
Lessee, Operating Lease, Annual Rent Payments   $ 165
v3.24.2.u1
Note 6 - Commitments & Contingencies - Maturity of Capitalized Lease Liabilities (Details) - USD ($)
Jun. 29, 2024
Dec. 30, 2023
2024 $ 83,000  
2025 165,000  
2026 28,000  
Total undiscounted operating lease payments 276,000  
Less: Imputed interest (15,000)  
Present value of operating lease liability 261,000  
Current lease liability 160,000 $ 160,000
Long-term lease liability 101,000 $ 172,000
Total operating lease liability $ 261,000  
Remaining lease term for capitalized operating lease (months) (Month) 20 months  
Discount rate for capitalized operating leases 6.60%  
v3.24.2.u1
Note 7 - Share-based Payments (Details Textual) - USD ($)
3 Months Ended 6 Months Ended
Jun. 29, 2024
Jul. 01, 2023
Jul. 01, 2023
Jun. 29, 2024
Jul. 01, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period (in shares) 0   79,000 0 86,001
Share-Based Compensation Arrangements by Share-Based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price (in dollars per share)     $ 1.2   $ 1.22
Stock Repurchased During Period, Shares (in shares) 0   24,642 0 24,927
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number (in shares) 1,097,900     1,097,900  
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Exercise Price (in dollars per share) $ 2.61     $ 2.61  
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term (Year) 6 years 9 months 21 days        
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Number (in shares) 610,000     610,000  
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Weighted Average Exercise Price (in dollars per share) $ 2.45     $ 2.45  
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term (Year) 5 years 1 month 2 days        
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized (in shares) 1,500,000     1,500,000  
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount $ 648     $ 648  
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)       2 years 11 months 4 days  
Share-Based Payment Arrangement, Expensed and Capitalized, Amount $ 44,480 $ 17,316   $ 205,442 $ 147,757
The 2020 Equity Incentive Plan [Member]          
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant (in shares) 638,300     638,300  
The 2009 Stock Incentive Plan [Member]          
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number (in shares) 236,200     236,200  
Employees [Member]          
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period (in shares) 0 60,000      
Outside Directors [Member]          
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period (in shares) 0 0      
Share-Based Compensation Arrangements by Share-Based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price (in dollars per share)   $ 2.66      
v3.24.2.u1
Note 8 - Inventories - Inventories (Details) - USD ($)
Jun. 29, 2024
Dec. 30, 2023
Raw materials $ 2,567,758 $ 2,861,333
Work in process 1,579,991 1,493,582
Finished goods 393,889 537,975
Total inventory 4,541,638 4,892,890
Reserve for obsolescence (419,960) (310,960)
Inventories, net $ 4,121,678 $ 4,581,930
v3.24.2.u1
Note 9 - Accrued Expenses - Accrued Expenses (Details) - USD ($)
Jun. 29, 2024
Dec. 30, 2023
Accrued legal and accounting $ 67,846 $ 86,000
Accrued payroll and related expenses 246,953 649,201
Accrued product returns 288,000 288,000
Accrued other 69,054 51,936
Accounts Payable and Accrued Liabilities, Current $ 671,853 $ 1,075,137
v3.24.2.u1
Note 10 - Line of Credit (Details Textual) - Revolving Credit Facility [Member] - USD ($)
$ in Thousands
6 Months Ended
Jun. 29, 2024
May 01, 2023
May 31, 2020
Massachusetts Business Development Corporation [Member]      
Line of Credit Facility, Maximum Borrowing Capacity     $ 3,000
Long-term Line of Credit, Total $ 0    
Line of Credit Facility, Remaining Borrowing Capacity $ 3,000    
Rockland Trust Company [Member]      
Line of Credit Facility, Maximum Borrowing Capacity   $ 3,000  
Line of Credit Facility, Interest Rate During Period 8.50%    
v3.24.2.u1
Note 11 - Note Payable (Details Textual) - USD ($)
1 Months Ended 6 Months Ended
Sep. 30, 2019
Mar. 31, 2020
Jun. 29, 2024
Interest Expense, Debt     $ 1,465
Massachusetts Business Development Corporation [Member] | Revolving Credit Facility [Member]      
Debt Instrument, Termination Period (Year) 3 years    
Microscope Note Payable [Member]      
Debt Instrument, Term (Year)   5 years  
Debt Instrument, Periodic Payment, Total   $ 4,000  
Debt Instrument, Interest Rate, Stated Percentage   6.47%  
Sonoscan Ultrasound Microscope [Member]      
Property, Plant and Equipment, Gross, Ending Balance   $ 208,000  
v3.24.2.u1
Note 11 - Note Payable - Note Payable Maturities (Details)
Jun. 29, 2024
USD ($)
FY 2024 $ 23,795
FY 2025 8,090
Total $ 31,885
v3.24.2.u1
Note 12 - Income Taxes (Details Textual) - USD ($)
3 Months Ended 6 Months Ended
Jun. 29, 2024
Jun. 29, 2024
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount $ 40,256 $ 307,576

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