10q10k10q10k.net

What changed in CPS TECHNOLOGIES CORP/DE/'s 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of CPS TECHNOLOGIES CORP/DE/'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+192 added−171 removedSource: 10-K (2026-03-03) vs 10-K (2025-03-17)

Top changes in CPS TECHNOLOGIES CORP/DE/'s 2025 10-K

192 paragraphs added · 171 removed · 88 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

25 edited+57 added−44 removed0 unchanged
Biggest changeIn addition, the Company had several international patents covering the same subject matter as the U.S. patents. In addition, CPS has applied for patent protection for its nuclear shielding solution. We intend to continue to apply for domestic and foreign patent protection in appropriate cases. In other cases, we believe we are better served by reliance on trade secret protection.
Biggest changeIn other cases, we believe we are better served by reliance on trade secret protection. In all cases, we seek protection for our technological developments to preserve our competitive position. As of December 27, 2025, the Company had 8 United States patents. In addition, the Company had several international patents covering the same subject matter as the U.S. patents.
CPS produces products made of AlSiC in the shapes and configurations required for each application, for example, in the form of lids, substrates, housings, etc. Every product is made to a customer’s specifications. The CPS process technology allows most products to be made to net shape, requiring little or no final machining.
CPS produces products made of AlSiC in the shapes and configurations required for each application, for example, in the form of baseplates, lids, substrates, housings, etc. Every product is made to a customer’s specifications. The CPS process technology allows most products to be made to net shape, requiring little or no final machining.
An important development in power processing is the emergence of wide-band gap semiconductors, particularly SiC semiconductors. SiC chips are more efficient than Si chips and are being used more frequently in power applications. Modules using SiC chips run at higher temperatures, increasing the need for improved thermal management, a need which the Company’s products meet.
An important development in power processing is the emergence of wide-band gap semiconductors, particularly SiC semiconductors. SiC chips are more efficient than Si chips and are being used more frequently in power applications. Modules using SiC chips run at higher temperatures, increasing the need for improved thermal management, a need which the Company's products address.
Some large customers typically give the Company a non-binding forecast of demand for a one-year period and then negotiate a pricing agreement with the Company valid for that one-year period. These and other customers typically issue purchase orders to be shipped on a particular date, or to be drawn against and shipped under releases.
Some large customers typically give the Company a non-binding forecast of demand for a one-year period and then negotiate a pricing agreement for that period. These and other customers typically issue purchase orders to be shipped on a particular date, or to be drawn against and shipped under releases.
We have a number of significant production orders generating revenue, but also have many significant opportunities for new products which could lead to significant production orders in new product lines in the future. Some of these opportunities may come to fruition as early as the next year or two, while others will take longer to develop.
While we have a number of ongoing production orders generating significant revenue, we also have many new product opportunities which could lead to significant production orders in new product lines in the future. Some of these opportunities may come to fruition as early as the next year or two, while others will take longer to develop.
The Company primarily manufactures MMC components comprised of AlSiC. Nevertheless, its proprietary Quickset- Quickcast process technology can be used to produce other MMCs to meet market requirements. For example, CPS combines aluminum with other ceramic or metal components such as ceramic fibers, tungsten and boron carbide.
Although the Company primarily manufactures MMC components comprised of AlSiC, its proprietary Quickset and Quickcast process technologies can be used to produce other MMCs to meet market requirements. For example, CPS combines aluminum with other ceramic or metal components such as ceramic fibers, tungsten and boron carbide.
The Company has a backlog of $26 million as of December 28, 2024. This backlog consists of orders received from customers which are, for the most part, scheduled to ship in 2025. Under certain circumstances, customers may be able to cancel existing orders or extend the period over which orders may be shipped.
The Company has a backlog of $26 million as of December 27, 2025. This backlog consists of orders received from customers which are, for the most part, scheduled to ship in 2026. Under certain circumstances, customers may be able to cancel existing orders or extend the period over which orders are shipped.
During 2024, the Company continued its efforts to increase factory efficiency both in terms of employee training as well as increased automation. None of our employees is covered by a collective bargaining agreement. We consider our relations with our employees to be excellent.
During 2025, the Company continued its efforts to increase factory efficiency both in terms of employee training as well as increased automation. None of our employees are covered by a collective bargaining agreement. We consider our relations with our employees to be excellent.
Using its proprietary MMC technology, the Company also produces light-weight armor. Due to its ability to withstand extreme environments and high threat levels, CPS armor has been selected as the solution for crew served weapons stations on the U.S. Navy’s aircraft carriers.
Using its proprietary MMC technology, the Company also produces lightweight, high performance armor. Due to its ability to withstand extreme environments and high threat levels, the Company's HybridTech Armor® has been selected as the solution for crew served weapons stations on the U.S. Navy’s aircraft carriers.
CPS management believes our business model of providing advanced material solutions to a portfolio of high growth end markets in various stages of the technology adoption lifecycle provides CPS with the opportunity for sustained growth and a diversified customer base.
CPS management believes our business model of providing advanced material solutions to a portfolio of high growth markets provides CPS with the opportunity for sustained growth and a diversified customer base.
The power semiconductors are typically IGBTs and these applications are often referred to as IGBT applications. Our MMC (AlSiC) baseplates have sufficient thermal conductivity to enable removal of heat through the baseplate and have a thermal expansion rate sufficiently similar to the other components in the assembly to ensure reliability over time as the assembly thermally cycles.
Our MMC baseplates have sufficient thermal conductivity to enable removal of heat through the baseplate and have a thermal expansion rate sufficiently similar to the other components in the assembly to ensure reliability over time as the assembly thermally cycles.
The Company also produces housings and heat spreaders for high-performance microprocessors, graphics processing chips, and application-specific integrated circuits. All of these applications involve electrical energy use or energy generation. The Company’s products allow higher performance and improved energy efficiency, particularly in applications in which there is a high cost of failure.
The Company’s products include housings and heat spreaders for high-performance microprocessors, graphics processing chips, and application-specific integrated circuits. The Company’s products allow higher performance and improved energy efficiency, particularly in applications in which there is a high cost of failure. The Company is a fully qualified supplier to many major global electronics OEMs.
Employees As of December 28, 2024, we had 92 permanent full-time employees. 82 were engaged in manufacturing and engineering and 10 in sales and administration, including finance, human resources and general management. We also have approximately 48 manufacturing people working with us through temporary employment agencies.
Employees As of December 27, 2025, we had 117 permanent full-time employees. 107 were engaged in manufacturing and engineering and 10 in sales and administration, including finance, human resources and general management. We also have approximately 33 manufacturing personnel who are employed through temporary employment agencies.
We believe this market will continue to grow as the use of power modules penetrates additional motor applications, and as electric motors themselves penetrate new applications such as hybrid and electric vehicles. Today our primary products for IGBT applications are used in electric trains, subway cars, wind turbines and hybrid and electric vehicles.
We believe this market will continue to grow as the use of power modules penetrates additional motor applications, and as electric motors themselves penetrate new applications such as hybrid and electric vehicles and HVDC converter stations.
In 2022 CPS resumed its participation in the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, sponsored by the US Small Business Administration. These programs provide funding for innovative research and development to domestic small businesses, who maintain certain intellectual property rights.
In 2022 the Company resumed participation in U.S. government Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, through which it has now secured multiple Phase I and Phase II awards, strengthening its intellectual property portfolio. These programs provide funding for innovative research and development to domestic small businesses, who maintain certain intellectual property rights.
The Company’s products are used in high-speed trains, mass transit, hybrid and electric cars, wind-turbines for electricity generation, routers, switches and fiber optic components for internet infrastructure. The Company’s Hermetic Packaging products are used in high reliability communications and power modules for avionics and satellite applications such as the current generation of GPS satellites.
CPS’s components are used in high-speed trains, mass transit, HVDC power systems, electrical infrastructure, internet equipment, electric and hybrid vehicles, wind turbines, satellites, and even NASA Mars rovers. Hermetic Packaging products, the Company’s second product category, are used in high reliability communications and power modules for avionics and satellite applications, including GPS systems.
Typically the ceramic is silicon carbide (SiC), the metal is aluminum (Al), and the composite is aluminum silicon carbide (AlSiC), a metal-matrix composite. CPS can adjust the thermal expansion rate of AlSiC components to match the specific application by modifying the amount of SiC compared to the amount of Al in the component.
Typically, the ceramic is silicon carbide (SiC) and the metal is aluminum (Al), resulting in an aluminum silicon carbide (AlSiC) composite. By adjusting the SiC-to-aluminum ratio, CPS can tailor the thermal expansion of AlSiC components to meet the requirements of each customer’s application.
The CPS AlSiC hermetic package provides tremendous benefits in terms of reduced weight and CTE matching which are extremely important for space-based programs. CPS hermetic packages are used in every current generation GPS satellite, the Mars Perseverance rover as well as many other aerospace applications.
To our knowledge, CPS is the only producer of hermetic packages with AlSiC bases, combining our expertise in hermetic package production with our expertise in MMC production. The CPS AlSiC hermetic package provides tremendous benefits in terms of reduced weight and CTE matching which are extremely important for space-based programs.
In all cases, we seek protection for our technological developments to preserve our competitive position. Backlog and Contracts Virtually 100% of the Company's product sales are custom in that they are based on customers’ drawings and the large majority of these sales are "designed in" and sold over multiple years.
Marketing emphasizes performance, quality, and reliability as critical product differentiators. The majority of the Company's product sales are custom in that they are based on customers’ drawings and the large majority of these sales are "designed in" and sold over multiple years.
Based on customer interest, we anticipate other potential applications for this material, which could result in a faster move into regular production. We continue to work on broadening our armor offerings. The development of STANAG 6 ballistic protection remains a priority. If successful this could lead to the incorporation of CPS armor into ground vehicles.
While this could lead to large production orders for CPS, it will likely take several years of testing before this comes to fruition. Based on customer interest, we anticipate other potential applications for this material, which could result in a faster move into regular production.
In low voltage applications, this is not a problem as the heat being generated is not enough to degrade the reliability of the power module. As voltage levels and the heat related to them go up, MMC baseplates become the preferred solution.
Copper is less expensive than an AlSiC solution, but its rate of thermal expansion is significantly different than that of the silicon semiconductors mounted to the baseplates. In low voltage applications, a copper solution is sufficient as the heat being generated is not enough to degrade the reliability of the power module.
Power semiconductors are a significant portion of the cost of variable speed drives, and the cost of the module housing and thermal management system are also significant; cost reductions of all these components are driving increased use of variable speed drives. We provide baseplates and heat spreaders on which power semiconductors are mounted to produce modules for motor control.
We provide baseplates and heat spreaders on which power semiconductors are mounted to produce modules for motor control. The power semiconductors are typically Insulated Gate Bipolar Transistor, or IGBTs.
Its light weight also makes it an ideal solution for aircraft and other vehicles requiring a high strength to weight ratio. MMCs are a class of materials consisting of a combination of metals and ceramics. Compared to conventional materials, MMCs provide superior thermal conductivity, improved thermal expansion matching, greater stiffness and lighter weight.
Its light weight also makes it an ideal solution for aircraft and other vehicles requiring a high strength to weight ratio. CPS maintains a strong focus on research and development and is actively expanding its product portfolio.
Many of these new product initiatives are for markets not currently served by CPS, and they involve the utilization of our current materials science and manufacturing expertise to address well-defined customer requirements. Our Phase II SBIR for the US Navy involves using our aluminum infiltration process with nitinol for use in thermal energy storage.
While many of these new product initiatives involve the utilization of our current materials science and manufacturing expertise, many of them address large markets which we have not historically served.
Target applications for FRA include helicopter bearing liners, with FRA serving as a replacement for much heavier steel, providing a lighter weight solution that allows for more cargo weight. While this could lead to large production orders to CPS, it will likely take several years of testing before this comes to fruition.
FRA, which CPS is marketing as AlMax, is stronger and more durable than neat aluminum, especially at high temperatures, at only a marginally higher weight. Target applications include helicopter bearing liners, with FRA serving as a replacement for much heavier steel, providing a lighter weight solution.
Removed
Item 1. Business. CPS Technologies Corp. (the ‘Company’ or ‘CPS’) provides advanced material solutions for the transportation, automotive, energy, computing/internet, telecommunications, aerospace and defense markets. CPS products are important elements in electrifying the green economy and in the protection of military personnel around the world. Our primary material solution is metal matrix composites (MMCs).
Added
Item 1. Business. CPS Technologies Corp. (the “Company” or “CPS”) is a Massachusetts-based advanced materials company founded in 1984 (originally as Ceramics Process Systems Corporation) and publicly listed on Nasdaq since 1987.
Removed
We design, manufacture and sell custom MMC components that improve the performance and reliability of systems in the end markets described above. The Company is an important participant in the growing movement towards alternative energy.
Added
Renamed CPS Technologies Corp. in 2007, the Company designs, manufactures, and sells high-performance material solutions for global customers across diverse markets, including transportation, energy, automotive, electronics, telecommunications, aerospace, and defense. CPS possesses significant proprietary expertise in metal matrix composites (MMCs), which are custom-engineered materials that combine metals and ceramics to deliver superior performance properties.
Removed
This makes CPS products very useful for applications in which there is a high cost of failure. These factors, in particular the lighter weight and durability, are among the reasons CPS parts are on the last two Mars Rovers as well as many satellites. CPS is a fully qualified manufacturer for many of the world’s largest electronics OEMs.
Added
Due to these properties, which include improved thermal conductivity, stiffness, durability, lighter weight, and thermal expansion matching compared to conventional materials, the Company's products are well suited for applications with high performance demands.
Removed
The technologies developed by the Company during these programs will further enhance CPS’ intellectual property portfolio. In 2024 CPS received funding for its first two Phase II SBIRs confirming its decision to participate in these programs and further advancing this portfolio.
Added
The Company's strategy is to drive sustained, profitable growth by developing and delivering advanced, high-performance material solutions to a diversified set of global, high-growth end markets. The Company focuses on applications where performance and reliability are critical, and where the cost of failure is often high.
Removed
We believe we have validated this model as we are now supplying customers at all stages of the technology adoption lifecycle. Our products are manufactured by proprietary processes we have developed including the QuicksetTM Injection Molding Process (“Quickset Process”) and the QuickCastTM Pressure Infiltration Process (“QuickCast Process”).
Added
The Company believes its diversified end-market strategy, emphasis on innovation, growing portfolio of market-driven intellectual property (IP), and reputation for quality and reliability position the Company for sustained growth in high-value, technology-driven markets.
Removed
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.
Added
Central to this strategy is leveraging CPS’s proprietary MMC technologies and specialized manufacturing processes (Quickset and QuickCast) to create customized products that are difficult for competitors to replicate. CPS emphasizes technical differentiation, quality, and reliability to maintain strong customer relationships with leading OEMs in electronics, transportation, energy, aerospace, and defense.
Removed
In March 2007, the Company changed its name from Ceramics Process Systems Corporation to CPS Technologies Corp. CPS’ website is http://www.cpstechnologysolutions.com. Overview of Markets and Products Electronics Markets Overview The applications for electronics can typically be characterized as either power processing or signal processing.
Added
In 2024 CPS received funding for its first two Phase II SBIRs. In 2025, CPS received funding for its third Phase II program as well as five new phase I SBIRs.
Removed
Power processing consists of converting the electrical power provided by the power source into the appropriate voltage and amperage needed by the device using the power. Signal processing consists of the myriad ways digital and analog signals are used in computing, communications, and related applications.
Added
Operationally, the Company typically follows a build-to-order, highly customized manufacturing model, supported by ongoing investments in employee training, automation, and process efficiency. CPS also emphasizes regulatory compliance, cybersecurity, and export controls to support its growing presence in defense- and aerospace-related markets.
Removed
In both power processing and signal processing, end-user demand continues to motivate the electronics industry to produce products which: - operate with lower losses and/or at higher speeds; - are smaller in size; and - operate with higher reliability.
Added
Overall, CPS’s strategy is to combine advanced materials science, proprietary processes, disciplined operations, and targeted investment in product development to build a diversified, defensible business positioned for long-term growth in demanding, technology-driven markets. In 2025, our three largest customers accounted for 39%, 13%, and 12% of revenues, respectively.
Removed
While these three requirements result in products of ever-increasing performance, they also create a fundamental challenge for the designer to manage the heat generated by the system operating at higher speeds and/or higher power. Smaller assemblies further concentrate the heat and increase the difficulty of removing it.
Added
In 2025, approximately 81% of our revenues were derived from commercial applications and 19% from defense-related applications. CPS’s website is http://www.cpstechnologysolutions.com.
Removed
This challenge is found at each level in an electronic assembly: at the integrated circuit level, speeds are increasing and line widths are decreasing; at the circuit board level, higher density devices are placed closer together; and at the system level, higher density circuit boards are being assembled closer together.
Added
Products Metal Matrix Composites We design, manufacture and sell custom MMC components that improve the performance and reliability of systems in applications that include high-speed trains, mass transit, hybrid and electric cars, energy infrastructure, High-Voltage Direct Current (HVDC) converter stations, wind-turbines, routers, switches and fiber optic components for internet infrastructure. MMCs are advanced materials formed by combining metals with ceramics.
Removed
Silicon carbide chips are slowly replacing silicon chips due to their higher efficiency. Silicon carbide chips run at higher temperatures than silicon chips, furthering the need for proper thermal management. The designer must resolve the thermal management issues or the system will fail.
Added
Compared to conventional materials, MMCs offer higher thermal conductivity, better thermal expansion matching, increased stiffness, and significantly lower weight. These advantages, in particular the lighter weight and durability, are why CPS components have been used on the last two Mars Rovers, as well as on numerous satellites.
Removed
For every 10 degree Celsius rise in temperature above a threshold level, the reliability of an integrated circuit is decreased by approximately half. In addition, heat usually causes changes in parameters which degrade the performance of both active and passive electronic components.
Added
CPS produces MMCs by combining a ceramic and a metal at the microstructural level, creating materials that efficiently dissipate heat while maintaining a coefficient of thermal expansion closely matched to surrounding components. This compatibility is critical to the long-term reliability of the assembly.
Removed
To resolve thermal management issues, the designer is primarily concerned with two properties of the materials which comprise the system: 1) thermal conductivity, which is the rate at which heat moves through materials, and 2) thermal expansion rate (Coefficient of Thermal Expansion or CTE), which is the rate at which materials expand or contract as temperature changes.
Added
CPS’s MMC products enable higher system performance, improved energy efficiency, and enhanced reliability across a broad range of advanced industrial, electronics, energy, aerospace, and defense applications. CPS’s MMC products are targeted at customers operating in high-performance, high-reliability industries where material properties such as thermal management and durability are critical.
Removed
The designer must ensure that the temperature of an electronic assembly stays within a range that ensures that the expansion rates of the materials in the assembly do not result in a failure due to breaking, delaminating, or related causes.
Added
Hermetic Packaging Products CPS’s hermetic packaging products are designed for high-reliability electronic and power applications in aerospace, defense, space, telecommunications, and advanced electronics. These products leverage CPS’s materials science expertise and precision manufacturing capabilities to protect microelectronics from moisture, contaminants, and harsh operating environments. CPS’s products support mission-critical systems with a high cost of failure.
Removed
CPS combines at the microstructural level a ceramic with a metal to produce a metal matrix composite which has the thermal conductivity needed to remove heat, and a thermal expansion rate which is sufficiently close to other components in the assembly to ensure the assembly is reliable.
Added
Extended reliability, effective environmental sealing, and superior thermal performance are critical product attributes. These products are frequently used for space applications such as satellites, flight applications such as avionics and undersea applications such as torpedoes, submarines and communications buoys. The Company also produces housings and heat spreaders for high-performance microprocessors, graphics processing chips, and application-specific integrated circuits.
Removed
Armor Market Overview Armor has traditionally been comprised of steel panels. As threat levels have increased, the amount of steel required to provide sufficient ballistic protection has become unacceptably heavy and therefore detrimental to a vehicle’s performance. The U.S. military has increasingly used ceramic armor in weight sensitive applications. However, ceramic armor has several limitations, including limited multi-hit capability.
Added
CPS hermetic packages are used in every current generation GPS satellite, the Mars Perseverance rover as well as many other aerospace applications. There are even CPS parts on NASA’s New Horizons mission, currently well beyond Pluto and in the Kuiper Belt! We sell primarily to major microelectronics systems houses in the U.S., Europe and Asia.
Removed
By embedding ceramic armor tiles in a metal matrix, these problems are overcome; the result is armor that is light-weight, has excellent ballistic protection, and environmental durability. The Company’s HybridTech Armor® panels are particularly well suited for extreme environments – the panels do not degrade in salt spray or extreme heat.
Added
Our customers typically purchase prototype and evaluation quantities of our products over a one to three year period before purchasing production volumes. HybridTech Armor ® CPS’s armor products, marketed under the HybridTech Armor® brand, utilize the Company’s proprietary MMC technology to deliver lightweight, high-strength protection capable of withstanding extreme environments and advanced ballistic threats.
Removed
The Company has produced armor panel strikefaces for the U.S. Navy aircraft carrier fleet and expects it will be used in other surface vessel applications in the future. Product Development Overview Since our reengagement in the SBIR/STTR programs, CPS has added significant resources for developing new products.
Added
Designed for defense customers operating across diverse and demanding conditions, the MMC-based armor line addresses mission requirements where reducing weight without compromising protection is critical. Historically, armor systems have relied on steel panels. As ballistic threat levels have increased, the amount of steel required to achieve adequate protection has become prohibitively heavy, negatively impacting platform performance.
Removed
Nitinol allows for significantly better storage than the Navy’s current solution. Similarly, our Phase II SBIR for the Department of Energy to create radiation shielding for the transportation of nuclear micro-reactors involves the infiltration of boron carbide and tungsten with aluminum to create a lightweight solution to this problem, allowing for their safe transportation.
Added
While ceramic armor has been adopted by the U.S. military for weight-sensitive applications, it has notable limitations, including reduced multi-hit capability. CPS’s MMC technology overcomes these challenges by embedding ceramic armor elements within a metal matrix, resulting in a lightweight, durable armor system with excellent ballistic performance (including robust multi-hit capability) that is well suited for demanding operational environments.
Removed
CPS also self-funds a number of product development efforts. In March 2024 we announced our worldwide, exclusive licensing agreement with Triton Systems for their Fiber Reinforced Aluminum (FRA). FRA is stronger and more durable than neat aluminum, especially at high temperatures, at only a marginally higher weight.
Added
HybridTech Armor® is suitable for a wide range of applications, including ground vehicles, naval and amphibious vessels, aircraft, and fixed installations. Compared with traditional armor materials, CPS’s solutions provide superior ballistic protection at significantly reduced weight, along with enhanced durability in harsh environments such as salt spray and extreme heat.
Removed
Similarly, we continue to work on lightweight armor for helicopter flooring which came out of a Phase I SBIR funded by the US Army.
Added
Armor panels are custom engineered to meet specific ballistic threat levels and to integrate seamlessly with vehicle, aircraft, or platform design requirements. From 2021 through 2024, CPS manufactured armor panel strikefaces for the U.S. Navy’s aircraft carrier fleet. These panels are currently being installed on these ships, beginning with the USS Abraham Lincoln.
Removed
Although the US Army did not allocate any Phase II for this program, due to interest from certain helicopter OEMs, CPS has successfully performed ballistic testing on the flooring, which was not part of the funded Phase I effort.
Added
The Company expects this technology to be adopted for additional surface vessel applications in the future. A new Phase I program funded by the U.S. Navy in 2025 provides for the lightweighting of the U.S. Marine Corps Amphibious Combat Vehicle (ACV).
Removed
CPS also has a number of other product development initiatives which may or may not lead to additional business in the future. Specific Markets and Products Motor Controller Applications (Insulated Gate Bipolar Transistor ("IGBT") Applications) The electrification of the economy – particularly the use of electric motors and power modules to control electric motors of all sizes – is growing.
Added
CPS’s HybridTech armor solution offers a potential replacement for the steel panels currently used for ballistic protection on the ACV, which would provide significant weight reduction. Product Development CPS’s product development efforts are focused on leveraging its core materials science expertise and proprietary manufacturing technologies to address clearly defined customer requirements in high-growth markets.
Removed
This growth is the result of several factors including emerging high-power applications which demand power modules such as trains, subways and certain industrial equipment, and cost reductions in power modules which increasingly make variable speed drives cost effective.
Added
Using this methodology, the Company is developing products for new applications while strengthening its intellectual property portfolio. New initiatives are typically built on CPS’s established strengths, such as the design and manufacture of MMCs, enabling the Company to reuse established processes while expanding into new markets.
Removed
Major automobile companies around the world are introducing hybrid electric vehicles (HEVs) and electric vehicles (EVs) at an increasing rate. There are many varieties of HEVs and EVs, but all HEVs and EVs contain an electric motor and one or more motor controller modules.
Added
These materials can provide desirable properties, including low density, high strength and stiffness, low coefficient of thermal expansion, and be either highly conductive or insulating. These properties allow MMCs to function in thermal management applications, as lightweight structures, and as supports that provide high levels of dimensional stability.
Removed
The Company provides baseplates on which motor controller modules are assembled; these baseplates are lighter weight and provide greater reliability than baseplates made from more conventional materials, typically copper. Copper is less expensive than the Company’s MMC solution, but its rate of thermal expansion is significantly different than that of the silicon semiconductors mounted to the baseplates.
Added
CPS follows a solution-driven process for developing new products, often involving close collaboration with the customer. New product ideas are typically based on well-defined customer requirements, often in high-reliability, mission-critical applications. Components often undergo rigorous testing to meet customer specifications.
Removed
Currently, HEV/EV manufacturers who want to save on short term costs are using power modules with copper baseplates, while those who want longer term reliability, such as those in the luxury vehicle market, may use power modules with an MMC (AlSiC) baseplate. Of particular interest is the move to using Silicon Carbide (SiC) semiconductors instead of silicon semiconductors.

… 46 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

32 edited+37 added−34 removed0 unchanged
Biggest changeAcquisitions involve numerous risks, which include but are not limited to: ● difficulties and increased costs in connection with the integration of the personnel, operations, technologies, services and products of the acquired companies into our existing facilities and operations; ● diversion of management’s attention from other operational matters; ● failure to commercialize the acquired technology; ● the potential loss of key employees of the acquired companies; ● lack of synergy, or inability to realize expected synergies, resulting from the acquisitions; ● the risk that the issuance of our common stock, if any, in an acquisition or merger could be dilutive to our shareholders; ● the inability to obtain and protect intellectual property rights in key technologies; and ● the acquired assets becoming impaired as a result of technological advancements or worse-than-expected performance of the acquired assets.
Biggest changeWhile acquisitions may offer synergies in products, services, and technologies, they involve risks, including: ● challenges and higher costs in integrating personnel, operations, technologies, products, and services ● diversion of management’s focus from other operational matters ● failure to successfully commercialize acquired technology ● loss of key employees from acquired companies ● inability to achieve expected synergies ● potential dilution of existing shareholders if our common stock is issued as part of a transaction ● difficulties in obtaining or protecting intellectual property rights, and ● impairment of acquired assets due to technological advances or underperformance.
Several of our major customers require that we use only vendors approved by them for certain steps, typically plating, of our manufacturing process before the finished product can be shipped to the customer and recognized as revenue. In some cases these vendors are sole sourced, i.e., one vendor is the only vendor approved for that process.
Some of our major customers require that we use only customer-approved vendors for specific manufacturing steps, typically plating, before the finished product can be shipped and revenue recognized. In certain cases, these vendors are sole-sourced, meaning only one vendor is approved for that process.
We expect that orders from a relatively limited number of customers will continue to account for a substantial portion of our business. The mix and type of customers, and sales to any single customer, may vary significantly from quarter to quarter and from year to year.
We expect that a relatively small number of customers will continue to account for a substantial portion of our business. The composition of our customer base and the volume of sales to any single customer may vary significantly from quarter to quarter and year to year.
Our success depends on our ability to identify, hire, train and retain qualified engineering personnel. Specifically, we need to continue to attract and retain product development, materials and manufacturing engineers to work with our direct sales force to technically qualify and perform on new sales opportunities and orders, and to demonstrate our products.
Our success depends on our ability to identify, hire, train, and retain qualified engineering personnel, including product development, materials, and manufacturing engineers who work with our sales force to qualify new opportunities, execute orders, and demonstrate our products.
Major customers may also seek, and on occasion receive, pricing, payment or other commercial terms that are less favorable to us and can hurt our competitive position. Our lengthy and variable sales cycle makes it difficult to predict our financial results. The sales cycle for our products is often lengthy, ranging from several months to several years.
Additionally, major customers may seek, and occasionally receive, pricing, payment, or other commercial terms that are less favorable to us, which could negatively impact our competitive position and profitability. Our lengthy and variable sales cycle makes it difficult to accurately forecast financial results. The sales cycle for our products is often prolonged, ranging from several months to several years.
We may experience significant interruptions of our manufacturing operations, delays in our ability to deliver products or services, increased costs or customer order cancellations as a result of: ● the failure or inability of suppliers to timely deliver sufficient quantities of materials and components on a cost-effective basis; ● volatility in the availability and cost of materials; ● unforeseen equipment failures resulting in the need to delay or outsource certain production processes; ● difficulties or delays in obtaining required import or export approvals; ● information technology or infrastructure failures; ● natural disasters or other events beyond our control (such as earthquakes, floods or storms, regional economic downturns, pandemics, social unrest, political instability, terrorism, or acts of war); and ● the effects of a global pandemic on our employees, suppliers and other third-parties upon which we rely.
Our manufacturing operations may be subject to interruptions, delays, increased costs, or customer order cancellations due to a variety of factors, including: ● the failure or inability of suppliers to deliver materials and components in sufficient quantities or on a timely and cost-effective basis, ● volatility in the availability or cost of raw materials and components, ● unexpected equipment failures requiring production delays or the outsourcing of certain manufacturing processes, ● difficulties or delays in obtaining required import or export licenses, permits, or approvals, ● information technology, systems, or infrastructure failures, ● natural disasters or other events beyond our control, such as earthquakes, floods, severe weather, regional economic downturns, pandemics, social unrest, political instability, terrorism, or acts of war, and ● the effects of pandemics or public health emergencies on our employees, suppliers, logistics providers, and other third parties on whom we rely.
The market price of our common shares could fluctuate significantly in response to several factors, including, among others: ● difficult macroeconomic conditions, including inflation, unfavorable geopolitical events, and general stock market uncertainties, such as those occasioned by a global liquidity crisis and a failure of large financial institutions; ● receipt of large orders or cancellations of orders for our products; ● issues associated with the performance and reliability of our products; ● actual or anticipated variations in our results of operations; ● announcements of financial developments or technological innovations; ● changes in recommendations and/or financial estimates by investment research analysis; ● strategic transactions, such as acquisitions, divestitures, or spin-offs; and ● the occurrence of major catastrophic events, including the effects of a possible resurgence of the novel coronavirus (COVID-19).
The trading price of our common shares may fluctuate significantly in response to various factors, including, among others: ● adverse macroeconomic conditions, such as inflation, unfavorable geopolitical events, and general stock market uncertainty, including those associated with global liquidity crises or the failure of large financial institutions, ● the receipt, delay, or cancellation of significant customer orders, ● issues related to the performance, quality, or reliability of our products, ● actual or anticipated variations in our operating results, ● announcements regarding financial performance, business developments, or technological innovations, ● changes in investment analyst recommendations or financial estimates, ● strategic transactions, including acquisitions, divestitures, or spin-offs, and ● the occurrence of major catastrophic events, such as the COVID-19 pandemic.
If any of our significant customers do not place orders, or they substantially reduce, delay or cancel orders, we may not be able to replace the business in a timely manner or at all, which can have a material adverse effect on our results of operations and financial condition.
If any of our significant customers reduce, delay, or cancel orders, we may not be able to replace the lost business in a timely manner or at all, potentially materially affecting our financial results.
If similar litigation were pursued against us, it could result in substantial costs and a diversion of management’s attention and resources, which could materially and adversely affect our financial condition, results of operations, and liquidity.
If such litigation were initiated against us, it could result in substantial costs and a diversion of management’s attention and resources, which could materially and adversely affect our business, financial condition, results of operations, and liquidity. Claims related to product defects, safety, or performance could result in significant costs, reputational harm, and operational disruption.
Our success is highly dependent on managerial contributions of key individuals and we may be unable to retain these individuals or recruit others. We depend on our senior executives and certain key managers as well as engineering, research and development, sales, marketing and manufacturing personnel, who are critical to our business.
Our success depends heavily on the contributions of key executives and employees, and we may be unable to retain them or recruit suitable replacements. We rely on senior executives, key managers, and specialized personnel in engineering, research and development, sales, marketing, and manufacturing who are critical to our business.
We have a highly concentrated customer base so that changes in ordering patterns, delays or order cancellations could have a material adverse effect on our business and results of operations. Three customers accounted for 58% of revenue in 2024 and 60% of revenue in 2023.
Our customer base is highly concentrated, and any significant changes in ordering patterns, delays, or order cancellations could materially and adversely affect our business and results of operations. In 2025, three customers accounted for approximately 64% of our revenue, compared to 58% in 2024.
We believe that our relationships with these customers are positive and may provide us with ongoing continuous sustainability for years to come. However, a large customer, if lost, would be difficult to replace, and our inability to do so may have a material adverse effect on our business and financial condition.
While we maintain positive relationships with these customers, which we believe may support ongoing business sustainability, the loss of any large customer could be difficult to replace. Our inability to replace significant customer business may have a material adverse effect on our financial condition and results of operations.
The relative strength of the U.S. dollar compared to such competitors’ respective local currencies makes our products more expensive to our customers relative to our competitors’ prices. Such circumstances could result in a reduction in product pricing (and profitability) in order to maintain or grow our current levels of business.
Changes in the value of the U.S. dollar relative to these competitors’ local currencies can make our products more expensive for customers compared to competing products. To maintain or grow our business, we may need to reduce product pricing, which could negatively impact profitability.
Significant price fluctuations have occurred with respect to our publicly traded securities. The price of our common shares is likely to be volatile in the future. In the past, securities class action litigation often has been brought against a company following periods of volatility in the market price of its securities.
We have experienced significant volatility in the market price of our publicly traded securities in the past, and we expect that the price of our common shares may continue to be volatile in the future. Periods of stock price volatility have historically led to securities class action litigation against public companies.
Our remediation efforts may not be successful and could result in interruptions, delays, or cessation of service, and loss of existing or potential customers, impeding our sales, manufacturing, distribution, or other critical functions.
Our remediation efforts may be unsuccessful or only partially effective and could result in service interruptions, delays, or temporary cessation of operations, as well as the loss of existing or prospective customers.
If that vendor raises their price to us, we may not be able to pass that increase on to our customer, eroding our margins. If we are able to pass along these increases, that could negatively impact our sales volumes if our customer shifts some of their purchases to a lower priced competitor.
If a sole-sourced vendor raises their prices, we may be unable to pass the increase on to our customer, which would erode our margins. Even if we can pass along the increase, higher costs could reduce sales volumes if the customer shifts some purchases to lower-priced competitors.
If third parties violate our proprietary rights, or accuse us of infringing upon their proprietary rights, such events could result in a loss of value of some of our intellectual property or costly litigation. Our success is dependent in part on our technologies and our other proprietary rights.
Our investments in proprietary technologies may lose value if we are unable to adequately protect our intellectual property or if we are accused of infringing the intellectual property rights of third parties, which could result in costly litigation. Our success depends in part on our proprietary technologies and related intellectual property rights.
Volatile and cyclical demand for our products may make it difficult for us to accurately budget our expense levels, which are based in part on our projections of future revenues. When cyclical fluctuations result in lower-than-expected revenue levels, operating results may be materially adversely affected, and cost reduction measures may be necessary for us to remain competitive and financially sound.
Volatile and cyclical demand for our products may make it difficult to accurately budget expenses, which are partially based on projected revenues. Demand for our products can fluctuate significantly due to cyclical industry trends. When revenue falls below expectations, our operating results may be materially affected, and cost reduction measures may be required to maintain competitiveness and financial stability.
The lengthy sales cycle makes forecasting the volume and timing of sales difficult and raises additional risks that customers may cancel or delay introduction of their end-products into the marketplace, thus affecting our demand.
As a result, the extended sales cycle makes it difficult to predict the timing and volume of sales and increases the risk that customers may delay or cancel the launch of their end products, which could adversely affect demand for our products.
Item 1A. Risk Factors. The risks set forth below may not be the only risk factors relating to the Company. Any of these factors, many of which are beyond our control, could materially adversely affect our business, financial condition, operating results, cash flow and stock price.
Additional risks and uncertainties that we are unaware of, or that we currently consider immaterial, may also become important factors that could adversely affect our business, financial condition, results of operations, liquidity, or future prospects. Many of these risks are beyond our control and could materially and adversely impact our business, financial condition, operating results, cash flow, and stock price.
In addition, breaches of our security measures and the unapproved dissemination of proprietary information or sensitive data about us, our customer, or other third parties, could expose us, our customers, or other third parties to a risk of loss or misuse of this information, result in litigation and potential liability for us, damage our reputation, or otherwise harm our business.
In addition, any breach of our security measures or unauthorized disclosure of proprietary or sensitive information could expose us or our customers to loss or misuse of data, lead to litigation or regulatory actions, damage our reputation, and adversely affect our business, financial condition, and results of operations.
If a sole sourced vendor is unable to process our product fast enough to meet our customer’s demand, or if they do not process our product at all, our expected revenue could be negatively affected despite our ability to produce enough to meet that demand.
Additionally, if a sole-sourced vendor cannot process our products quickly enough to meet customer demand, or is unable to process them at all, our expected revenue could be adversely impacted, even if we have sufficient internal production capacity.
In many cases potential customers must evaluate the properties of our product against their current solution. In many cases potential customers must redesign other components of the end product they are making to realize the full benefits of using our products.
Prospective customers typically conduct extensive evaluations of our products relative to their existing solutions. In many cases, customers must also redesign other components of their end products to fully realize the benefits of our offerings.
Other companies and individuals, including our competitors, may develop technologies that are similar or superior to our technology, or design around the intellectual property that we own or license. Our failure to adequately protect our intellectual property could result in the reduction or elimination of our rights to such intellectual property.
In addition, competitors or other third parties may develop similar or superior technologies or design around our intellectual property. We may also face claims that our products or technologies infringe the intellectual property rights of others.
While we have employment agreements with certain executives, none of these agreements would prevent any such person from leaving the Company. Furthermore, larger competitors may be able to offer more generous compensation packages to our executives and key employees, and therefore we risk losing key personnel to those competitors.
Although some executives have employment agreements, none prevent them from leaving the Company. Larger competitors may offer more attractive compensation, creating a risk of losing key personnel. Losing such individuals, or failing to attract and train qualified employees, could negatively impact our engineering, product development, manufacturing, and sales efforts.
The conditions of the markets in which we operate are volatile. The demand for our products and the profitability of our products can change significantly from period to period as a result of numerous factors.
These risks could materially and adversely affect our business, financial condition, and results of operations. Market conditions in the industries in which we operate are volatile, and the demand for our products and their profitability can fluctuate significantly.
The industries in which we operate are characterized by ongoing changes, including: ● the availability of funds for research and development; ● global and regional economic conditions; ● governmental budgetary and political constraints; and ● changes in technology. For these and other reasons, our results of operations for past periods may not necessarily be indicative of future operating results.
The industries we serve are subject to constant change, driven by factors such as: ● the availability of funding for research and development ● global and regional economic conditions ● government budgetary and political constraints, and ● technological advancements As a result, our historical operating results may not be indicative of future performance, and periods of lower demand or profitability could materially affect our business.
Acquisitions can result in an increase in our operating costs, divert management ’ s attention away from other operational matters and expose us to other associated risks. From time to time, we evaluate potential acquisitions of businesses and technologies, and we consider targeted acquisitions that expand our core competencies to be an important part of our future growth strategy.
We periodically evaluate potential acquisitions of businesses or technologies and view targeted acquisitions that expand our core competencies as an important part of our growth strategy.
If customer cancellations occur, they could result in the loss of anticipated sales without allowing us sufficient time to reduce our operating expenses. Fluctuations in foreign exchange rates can negatively impact our ability to compete against foreign based competitors. Several of our major competitors are located outside of the United States.
The duration of the sales cycle varies based on the size and complexity of the project and the level of evaluation required by the customer. Fluctuations in foreign exchange rates could negatively affect our competitiveness against foreign-based competitors. Several of our major competitors are located outside the United States.
Computer programmers and hackers also may be able to develop and deploy viruses, worms, and other malicious software programs that attack our systems or our products, or that otherwise exploit any security vulnerabilities. The costs of addressing the foregoing security problems and security vulnerabilities before or after a cyber-incident could be significant.
Such attacks may include the introduction of viruses, worms, ransomware, or other malicious software designed to exploit vulnerabilities in our systems or products. Addressing cybersecurity incidents and vulnerabilities, whether before or after an attack, may require significant financial and operational resources.
Our dependence on outside vendors to perform particular steps in our manufacturing process could negatively impact us should those vendors be unable or unwilling to provide such service at a reasonable cost.
If we are unable or unwilling to adjust prices sufficiently, we could experience a reduction in overall revenue. We rely on outside vendors for certain steps in our manufacturing process, and any inability or unwillingness of these vendors to provide services at a reasonable cost could negatively affect our business.
We do not typically have long-term volume production contracts with our customers, and we do not control the timing or volume of orders placed by our customers. Whether and to what extent our customers place orders for any specific products, and the mix and quantities of products included in those orders are factors beyond our control.
We generally do not have long-term production contracts with our customers and cannot control the timing, volume, or mix of their orders. Lower-than-expected orders can lead to underutilized facilities and infrastructure, which would negatively affect our financial position and results of operations.
Removed
The length of the sales cycle depends on the size and complexity of the project, and the depth of the evaluation of our products conducted by the customers. Because a significant portion of our operating expenses is fixed, we may incur substantial expense before we earn associated revenue.
Added
Item 1A. Risk Factors. An investment in our common stock involves significant risks. The following risk factors should be read together with the other information included in this report, including our financial statements and related notes. The risks described below may not be the only risks that we face.
Removed
If we are unable or unwilling to reduce pricing of our products to the level necessary to maintain current business levels, we could see an overall reduction in revenue.
Added
Our MMC business is niche, with few competitors located within the U.S., making it essential to develop key engineering and production talent internally. Experienced employees can be difficult to replace, particularly skilled engineers with the qualifications necessary to support our growth strategy.
Removed
If we were to lose the services of any of our key personnel, or if we fail to attract and train qualified personnel, our engineering, product development, manufacturing and sales efforts could be slowed. In particular, we have, from time to time, experienced difficulty in hiring and retaining skilled engineers with appropriate qualifications to support our growth strategy.
Added
Additionally, losing key personnel may increase operating expenses and require senior executives to focus on recruiting, while the integration of new personnel could temporarily disrupt ongoing operations. The Company ’ s reliance on aging equipment and capital-intensive processes may require significant ongoing investment and expose it to operational and financial risks.
Removed
We may also incur increased operating expenses and be required to divert the attention of our senior executives to search for replacements. The integration of any new personnel could disrupt our ongoing operations. Business or economic disruptions or global health concerns could seriously harm our business.
Added
The Company’s operations depend on specialized equipment and facilities, some of which may be aging or nearing the end of their useful lives. As equipment ages, the risk of breakdowns, unplanned downtime, safety incidents, and reduced efficiency increases, which could disrupt operations and result in higher maintenance and repair costs.
Removed
Broad-based business, economic disruptions or global health concerns could adversely affect our business and the sale of our products. For example, in December 2019 an outbreak of a novel strain of the coronavirus disease (COVID-19) originated in Wuhan, China, and spread to a number of other countries, including the United States.
Added
Maintaining and upgrading equipment and facilities can require substantial capital expenditures. We may need to make significant investments to modernize operations, comply with regulatory or environmental requirements, or remain competitive. If we are unable to fund these investments through cash flows, financing, or other sources on acceptable terms, our operational performance and long-term growth prospects could be adversely affected.
Removed
Initially, this outbreak resulted in extended shutdowns of certain businesses in the Wuhan region and had ripple effects to businesses around the world. While the impact of this pandemic has largely subsided, a resurgence of this virus or another could have an impact on our business.
Added
We are considering moving to a larger facility, and the relocation and transition process could be costly, disruptive to our operations, and may adversely affect our ability to manufacture products and achieve expected financial and operational benefits, which could hurt our short-term and long-term results.
Removed
Although the Company remained open throughout the COVID-19 pandemic, complete or partial government shutdowns of many businesses, schools, bars and restaurants did occur. The Russian invasion of Ukraine and the conflict in Israel and Gaza could also adversely affect our business in spite of the immaterial amount of direct business we have done in these regions in the past.
Added
We are considering a move to a larger facility near our current location in order to support anticipated growth and improve our operational capabilities. The actual costs associated with the relocation may exceed our estimates.
Removed
We cannot presently predict the scope and severity of any future business shutdowns or disruptions to us, but if we or any of the third parties with whom we engage, including our customers, suppliers and other third parties, were to experience extended shutdowns or other business disruptions, our ability to conduct our business could be materially and negatively impacted, and could have a material adverse effect on our business and our results of operation and financial condition.
Added
These costs may include build-out expenses, equipment relocation, infrastructure upgrades, and other unanticipated expenditures, any of which could place additional strain on our financial resources and adversely affect our results of operations. The relocation process could disrupt our manufacturing operations and business activities.
Removed
Changes in trade policy could seriously impact our business. Most of our raw materials are domestically sourced by CPS. However, some of those raw materials may originate in countries other than the United States.
Added
During the transition period, we may experience temporary reductions in production capacity, inefficiencies, delays in order fulfillment, quality issues, or increased scrap and rework as equipment is moved, installed, calibrated, and validated. We may also be required to demonstrate to customers that we can successfully manufacture products at the new facility.
Removed
Should tariffs be imposed on any of these countries of origin, our vendors would likely increase their price to us to cover the cost of these tariffs. We may not be able to pass these cost increases on to our customers in a timely manner, therefore eroding our margins.
Added
Any delays or difficulties in qualifying the new facility or manufacturing processes could negatively impact customer confidence or result in lost or delayed orders. In addition, the anticipated benefits of the larger facility may not be realized on the timeline we expect, or at all.
Removed
A significant portion of our business is exported to customers outside the United States. Should their countries impose tariffs on US goods, including ours, we could find ourselves at a competitive disadvantage in relation to our competitors, some of whom are located outside the United States.
Added
If the revenue growth or demand levels that underlie the need for a larger facility do not materialize, we could be left with higher fixed operating costs and reduced operating margins without a corresponding increase in revenue. The move could also divert management’s attention and resources from other strategic or operational priorities.
Removed
We expect that any acquisitions of other businesses will have synergistic products, services and technologies.
Added
Any of these factors, individually or in combination, could materially and adversely affect our business, financial condition, results of operations, and cash flows, particularly in the periods immediately following the relocation. Fluctuations in the prices and availability of raw materials may adversely affect margins, operating results, and cash flows.
Removed
During a down cycle, we must be able to make timely adjustments to our cost and expense structure to correspond to the prevailing market conditions. In addition, during periods of rapid growth, we must be able to increase manufacturing capacity and the number of our personnel to meet customer demand, which may require additional liquidity.
Added
We rely on various raw materials and components whose prices may be subject to volatility due to market conditions, geopolitical events, supply disruptions, and broader macroeconomic factors. Significant or sustained increases in raw material costs could increase production expenses and negatively impact profitability, particularly if we are unable to pass these increased costs on to customers through pricing adjustments.
Removed
We can provide no assurance that these objectives can be met in a timely manner in response to changes within the industry cycles in which we operate. If we fail to respond to these cyclical changes, our business could be seriously harmed.
Added
Additionally, shortages or delays in the supply of critical raw materials could disrupt production schedules and increase lead times. Efforts to mitigate these risks, such as long-term supply agreements or the sourcing of alternative materials, may not be fully effective or may introduce additional costs and complexities. Broad economic disruptions or global health concerns could materially harm our business.
Removed
Insufficient orders would result in under-utilization of our manufacturing facilities and infrastructure and will negatively affect our financial position and results of operations. We face significant competition, are relatively small in size and have fewer resources in comparison with some of our competitors.
Added
Widespread economic instability and global health events can adversely affect demand for our products and our overall operations. For example, the COVID‑19 pandemic significantly disrupted businesses worldwide, and the possibility of future resurgences of COVID‑19 or similar health crises remains a risk that could slow economic activity and disrupt supply chains.
Removed
We face significant competition throughout the world, which may increase as certain markets in which we operate continue to evolve. Our future performance depends, in part, upon our ability to continue to compete successfully worldwide.
Added
In addition, ongoing geopolitical conflicts, such as the Russia‑Ukraine war and tensions in the Middle East, continue to contribute to uncertainty in global markets, supply chains, and trade flows, even for companies without substantial direct exposure to the affected regions. We cannot predict the duration, severity, or full effects of future economic, health, or geopolitical events.
Removed
Some of our competitors are diversified companies that have substantially greater financial resources and more extensive research, engineering, manufacturing, marketing and customer service and support capabilities than we can provide. Our failure to compete successfully with these other companies would seriously harm our business.
Added
Extended shutdowns or disruptions affecting our operations, or those of our customers, suppliers, or other third parties on whom we rely, could materially and adversely affect our business, financial condition, and operating results. Changes in trade policy could materially affect our business. Some of our raw materials originate from other countries.
Removed
There is a risk that larger, better financed competitors will develop and market more advanced products than those we currently offer, or that competitors with greater financial resources may decrease prices, thereby putting us under financial pressure. We may experience increasing price pressure.
Added
If tariffs are imposed on these materials, our suppliers may increase prices, which we may not be able to pass on to customers quickly, potentially reducing our profit margins. Additionally, a significant portion of our products are exported.
Removed
Our historical business strategy for many of our products has focused on product performance and customer service rather than on offering the lowest price. As a result of budgetary constraints, many of our customers are extremely price sensitive when purchasing our products. Recent inflationary trends could further exacerbate this issue.
Added
If foreign countries impose tariffs on U.S. goods, including ours, we could face a competitive disadvantage compared with companies located outside the United States, which could adversely impact our business and financial results. Acquisitions may increase our operating costs, divert management ’ s attention from other priorities, and expose us to additional risks.
Removed
If we are unable to obtain prices that allow us to continue to compete on the basis of product performance and customer service, our profit margins will be reduced. Manufacturing interruptions or delays could affect our ability to meet customer demand and lead to higher costs.
Added
Conversely, periods of rapid growth may require us to expand manufacturing capacity and hire additional personnel, which could strain liquidity. There is no assurance that we can adjust our cost structure or scale operations quickly enough to respond effectively to these market cycles.
Removed
Continued growth could result in the need to move or expand our facilities. The costs of such a move or expansion could be significant to our profitability. Our ability to meet our customers’ needs including the on-time shipment of products, is paramount to our success.
Added
We operate in highly competitive markets, have fewer resources than some competitors, and may be subject to future import duties that could adversely affect our business. We operate in highly competitive global markets, and some competitors have significantly greater financial and operational resources.
Removed
Our current facility may not be able to adequately handle future growth and our ability to meet the needs of our customers. This could result in our having to relocate to a new facility which could have a material impact on our profitability. We have made investments in our proprietary technologies.
Added
These competitors may be able to develop more advanced products or reduce prices, which could place us at a competitive disadvantage. If we are unable to compete effectively, our business and results of operations could be adversely affected. In addition, our MMC products are currently exported into the European Union (EU) on a duty-free basis.
Removed
We believe that while patents can be useful and may be utilized by us in the future, they are not always necessary or feasible to protect our intellectual property.
Added
If a European manufacturer begins producing similar products, import duties could be imposed, increasing costs for our EU customers and potentially reducing demand for our products. We may face increasing price pressure, which could adversely affect our margins. Historically, our strategy has emphasized product performance and customer service rather than competing primarily on price.
Removed
The process of seeking patent protection is lengthy and expensive, and we cannot be certain that applications will result in issued patents or that issued patents will be of sufficient scope or strength to provide meaningful protection or commercial advantage to us.
Added
However, many of our customers are highly price sensitive, and inflationary pressures may further intensify pricing competition. If we are unable to continue differentiating our products based on performance and service, we may be required to reduce prices to remain competitive, which could result in lower profit margins and adversely affect our financial results.

… 23 more changes not shown on this page.

Item 2. Properties

Properties — owned and leased real estate

3 edited+1 added−0 removed0 unchanged
Biggest changeWhile adequate for current business volumes, continued expected growth of our business may result in the need to move to a larger location, open a second location or expand our footprint at our current location.
Biggest changeContinued expected growth of our business may result in the need to move to a larger location, open a second location or expand our footprint at our current location. The Company is actively pursuing the first option, moving to a larger location.
The lease is a triple net lease wherein the Company is responsible for payment of all real estate taxes, operating costs and utilities. The Company also has an option to buy the property and a first right of refusal during the term of the lease. Annual rental payments for 2024 were $165 thousand.
The lease is a triple net lease wherein the Company is responsible for payment of all real estate taxes, operating costs and utilities. The Company also has an option to buy the property and a first right of refusal during the term of the lease. Annual rental payments for 2025 were $165 thousand.
Item 2. Properties As of December 28, 2024, all of our manufacturing, engineering, sales and administrative operations were located in leased facilities in Norton, Massachusetts. In February 2021, the Company extended the lease for the Norton facility through February 2026. The leased facilities comprise approximately 38 thousand square feet.
Item 2. Properties As of December 27, 2025, all of our manufacturing, engineering, sales and administrative operations were located in leased facilities in Norton, Massachusetts. In August 2025, the Company extended the lease for the Norton facility through February 2028. The leased facilities comprise approximately 38 thousand square feet.
Added
On December 2, 2025 Gifford Investments, the lessor of the Norton facility was placed in receivership under Massachusetts state law. We do not anticipate this will have a negative impact on CPS of any significance.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

1 edited+0 added−0 removed2 unchanged
Biggest changeItem 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities. CPS Technologies Corp. shares trade on The Nasdaq Capital Market under the symbol “CPSH”. On December 28, 2024, we had approximately 70 shareholders of record.
Biggest changeItem 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities. CPS Technologies Corp. shares trade on The Nasdaq Capital Market under the symbol “CPSH”. On December 27, 2025, we had approximately 63 shareholders of record.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

27 edited+9 added−5 removed28 unchanged
Biggest changeThis decrease was due primarily to the successful completion of the armor contract in April 2024 compared to a full year of revenue from armor production in 2023, partially offset by increased revenue from AlSiC baseplates. Gross profit in 2024 totaled $(0.1) million or (1)% of sales. This compares with $6.8 million, or 25% of sales, generated during 2023.
Biggest changeThe price of gold accounted for $1.9 million of total revenue in 2025 as compared to $0.5 million in 2024. Gross profit in 2025 totaled $5.3 million or 16% of sales. This compares with $(0.1) million, or (1)% of sales, in 2024. The increase in margin was primarily due to the impact of the increased revenue as described above.
CPS’s significant accounting policies are presented within Note 2 to the financial statements; the significant accounting policies which management believes are most critical to aid in fully understanding and evaluating its reported financial results include the following: a) Allowance for credit losses The Company performs ongoing monitoring of the status of its receivables based on the payment history and the creditworthiness of our customers, as determined by a review of their current credit information.
CPS’ significant accounting policies are presented within Note 2 to the financial statements; the significant accounting policies which management believes are most critical to aid in fully understanding and evaluating its reported financial results include the following: a) Allowance for credit losses The Company performs ongoing monitoring of the status of its receivables based on the payment history and the creditworthiness of our customers, as determined by a review of their current credit information.
The Company expects it will continue to be able to fund its operations during 2025 from existing cash balances and profits. The Company continues to sell to a limited number of customers and the loss of any one of these customers or vendors could cause the Company to require additional external financing.
The Company expects it will continue to be able to fund its operations during 2026 from existing cash balances and profits. The Company continues to sell to a limited number of customers and the loss of any one of these customers or vendors could cause the Company to require additional external financing.
The value of CPS’s work in process and finished goods is based on the assumption that specific customers will take delivery of specific items of inventory. Raw materials are less unique to specific products. AlSiC raw materials are used for all AlSiC parts and therefore they are continuously in production.
The value of CPS’ work in process and finished goods is based on the assumption that specific customers will take delivery of specific items of inventory. Raw materials are less unique to specific products. AlSiC raw materials are used for all AlSiC parts and therefore they are continuously in production.
Annual rental payments were $165 thousand in 2024. Off-Balance Sheet Arrangements We have no off-balance sheet arrangements. Inflation Recent inflationary trends have had an impact on our profitability.
Annual rental payments were $165 thousand in 2025. Off-Balance Sheet Arrangements We have no off-balance sheet arrangements. Inflation Recent inflationary trends have had an impact on our profitability.
The Company recorded an operating loss of $1.3 million in the fourth quarter of 2024 compared to operating income of $0.1 million in the fourth quarter of 2023. The Company recorded a net loss of $1.0 million in the fourth quarter of 2024 compared to net income of $0.1 million in the fourth quarter of 2023.
The Company recorded an operating loss of $0.1 million in the fourth quarter of 2025 compared to an operating loss of $1.3 million in the fourth quarter of 2024. The Company recorded net income of $0.0 million in the fourth quarter of 2025 compared to a net loss of $1.0 million in the fourth quarter of 2024.
We have had higher than normal wage increases, have implemented other programs to ameliorate the effects of inflation on our employees, such as improvements to our benefit package, and seen price increases from some of our suppliers.
We have had wage increases, have implemented other programs to ameliorate the effects of inflation on our employees, such as improvements to our benefit package, and seen price increases from some of our suppliers.
The Company believes the underlying demand for metal matrix composites 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.
The Company believes the underlying demand for MMCs 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.
The Norton facility lease was renewed in February 2021, expires in February 2026 and is a triple net lease wherein the Company is responsible for payment of all real estate taxes, operating costs and utilities. The Company also has an option to buy the property and a first right of refusal during the term of the lease.
The Norton facility lease was renewed in August 2025, expires in February 2028 and is a triple net lease wherein the Company is responsible for payment of all real estate taxes, operating costs and utilities. The Company also has an option to buy the property and a first right of refusal during the term of the lease.
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.
CPS’ 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.
On December 28, 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 LOC remains in effect until terminated which can be done by either party.
On December 27, 2025, the Company had $0 of borrowings under this LOC and its borrowing base at the time would have permitted an additional $3.0 million to have been borrowed. The LOC was renewed in August 2025 and remains in effect until terminated which can be done by either party.
Liquidity and Capital Resources (all $ in millions unless noted) The Company’s cash and cash equivalents at December 28, 2024 totaled $3.3, restricted cash of $85 thousand and marketable debt securities with a fair value of $1.0. compared with cash and cash equivalents at December 30, 2023 of $8.8 and no restricted cash or marketable debt securities.
Liquidity and Capital Resources (all $in millions unless noted) The Company’s cash and cash equivalents at December 27, 2025 totaled $4.5, no restricted cash and marketable debt securities with a fair value of $8.8 compared with cash and cash equivalents at December 28, 2024 of $3.3, restricted cash of $85 thousand and marketable debt securities with a fair value of $1.0.
The Company had no inventory on consignment at any customers at the end of 2024 or 2023. At December 28, 2024 and December 30, 2023 inventory of, $0.8 and $0.5, respectively, was located at vendor locations pursuant to inventory agreements. The Company funded its operations from its cash balances in 2024.
The Company had no inventory on consignment at any customers at the end of 2025 or 2024. At December 27, 2025 and December 28, 2024 inventory of, $2.3 and $0.8, respectively, was located at vendor locations pursuant to inventory agreements. The Company funded its operations from its cash balances in 2025.
As of December 28, 2024, the Company had $109 thousand of construction in progress and no outstanding commitments to purchase production equipment. During 2024, our leasing arrangements consisted of the Norton, MA facility lease.
As of December 27, 2025, the Company had $460 thousand of construction in progress and no material outstanding commitments to purchase production equipment. During 2025, our leasing arrangements consisted of the Norton, MA facility lease.
The 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 hermetic packages used in radar, satellite and avionics applications. We provide lids and heat spreaders used with high performance integrated circuits in internet switches and routers. We provide armor for naval and other military applications.
The products we provide include baseplates for motor controllers used in high-speed electric trains, subway cars, wind turbines, hybrid and electric vehicles and the transmission of High Voltage Direct Current (HVDC). We provide hermetic packages used in radar, satellite and avionics applications. We provide lids and heat spreaders used with high performance integrated circuits in internet switches and routers.
We provide baseplates and housings used in modules built with Wide Band Gap Semiconductors like SiC and GaN. 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, copper-tungsten, and others. CPS’ products are custom rather than catalog items.
We provide armor for naval and other military applications. We provide baseplates and housings used in modules built with Wide Band Gap Semiconductors like SiC and GaN. 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, copper-tungsten, and others.
Results of Operations (all $ in millions unless noted) Results of Operations for the year 2024 ( “ 2024 ” ) compared with the year 2023 ( “ 2023 ” ): Total revenue was $21.1 million in 2024, a 24% decrease compared with total revenue of $27.6 million in 2023.
Results of Operations (all $in millions unless noted) Results of Operations for the year 2025 ( “ 2025 ” ) compared with the year 2024 ( “ 2024 ” ): Total revenue was $32.6 million in 2025, a 54% increase compared with total revenue of $21.1 million in 2024.
Annually the company reviews this unused material and establishes an obsolescence reserve for the amount it does not expect to use over the next three years. c) Valuation of deferred tax assets Deferred tax assets and liabilities are based on the net tax effects of tax credits, operating loss carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
Annually the Company reviews this unused material and establishes a reserve for the amount it has not used in the prior 12 months and does not have an expectation of future activity. c) Valuation of deferred tax assets Deferred tax assets and liabilities are based on the net tax effects of tax credits, operating loss carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
In 2024 the Company’s top three customers accounted for 57% of revenue and the remaining 43% of revenue was derived from 45 other customers. In 2023 the top three customers accounted for 60% of revenue and the remaining 40% of revenue was derived from approximately 57 customers.
In 2025 the Company’s top three customers accounted for 64% of revenue and the remaining 36% of revenue was derived from approximately 43 other customers. In 2024 the top three customers accounted for 58% of revenue and the remaining 42% of revenue was derived from approximately 45 customers.
At December 28, 2024, the Company’s deferred tax asset and other temporary differences will require taxable income of approximately $12 million and reversals of existing temporary differences to fully utilize the deferred tax asset, assuming a statutory corporate tax rate of 21%.
At December 27, 2025, the Company’s deferred tax asset and other temporary differences will require taxable income of approximately $8.3 million and reversals of existing temporary differences to fully utilize the deferred tax asset, assuming a statutory corporate tax rate of 21% and 6.32% for federal and state taxes respectively.
This change was due to continued growth of sales throughout the 4 th quarter. This resulted in collections on the earlier lower sales, while the higher later sales remained in receivables. The accounts receivable balances at December 28, 2024, and December 30, 2023 were both net of an allowance for credit losses of $10 thousand.
This change was due to higher sales growth throughout the 4 th quarter of 2024 as compared to Q3 2024 versus a decline in sales from Q3 2025 to Q4 2025. The accounts receivable balances at December 27, 2025, and December 28, 2024 were both net of an allowance for credit losses of $10 thousand.
This decrease was primarily due to a reduction in variable compensation expense, due to the reduction in revenue and profit year over year, as well as a reduction in salaries paid for selling and administrative personnel. The Company generated an operating loss of $4.4 million in 2024, compared with operating income of $1.7 in 2023.
This increase was primarily due to the increase in variable compensation expense, due to the increase in revenue and profit year over year. In addition, the increased revenue generated a significant increase in our sales commission expense. The Company generated operating income of $0.4 million in 2025, compared with an operating loss of $4.4 in 2024.
This decrease was due almost entirely to the reduction in revenue and additional expenses due to end of year sales growth, discussed above. The Company recorded a net loss of $3.1M in 2024 compared to net income of $1.4M in 2023.
This increase was due almost entirely to the increase in revenue, discussed above. The Company recorded net income of $0.4M in 2025 compared to a net loss of $3.1 million in 2024. In 2025 the Company recorded a provision for income taxes of $0.3 million compared to a tax benefit of $1.0 million in 2024.
Inventories decreased to $4.3 at December 28, 2024 from $4.6 at December 30, 2023. The inventory turnover in the four quarters ending 2024 was 4.8 times, up from 4.3 times averaged during the four quarters of 2023 (each based on a 5 point average).
In order to meet the significantly increased demand from these customers, parts at the platers, which are part of WIP, have increased significantly from 2024 to 2025. The inventory turnover in the four quarters ending 2025 was 5.4 times, up from 4.8 times averaged during the four quarters of 2024 (each based on a 5 point average).
The decrease in margin was primarily due to the impact of the completion of the armor contract described above. As CPS incurs significant fixed costs in its operations, a reduction in revenue has a significant impact on margin.
As CPS incurs significant fixed costs in its operations, an increase in revenue has a significant impact on margin. A mitigating factor in this increased margin was the impact of rising gold prices.
This decrease was the result of the completion of our armor contract earlier in 2024, partially offset by an increase in AlSiC baseplate sales. Gross margin decreased in the fourth quarter of 2024 compared with the fourth quarter of 2023 to $(0.3) million from $1.1 million.
The price of gold increased our total revenue by $1.0 million in Q4 2025 as compared to $0.2 million in Q4 2024. Gross profit increased in the fourth quarter of 2025 compared with the fourth quarter of 2024 to $1.2 million from $(0.3) million. This increase was due to higher revenue and its favorable impact on fixed costs.
This decrease was primarily due to the Company’s losses for the year as well as the increase in receivables of $0.6. Accounts receivable at December 28, 2024 totaled $4.9 compared to $4.4 at December 30, 2023. Days Sales Outstanding (DSO) increased to 75 days at the end of 2024 compared to 60 days at the end of 2023.
The net proceeds to the Company were $9,540,025. Trade accounts receivable at December 27, 2025 totaled $5.2 compared to $4.9 at December 28, 2024. Days Sales Outstanding (DSO) decreased to 61 days at the end of 2025 compared to 75 days at the end of 2024.
Removed
In addition, then growth of AlSiC baseplate sales in Q4 of 2024 required the hiring and training of new employees as well as the incurring of additional expenses for the ramp up of production. A new employee is trained for 2-3 weeks before even beginning their actual work on the shop floor.
Added
This increase was primarily due to significant growth in our core business. At the end of August 2024 the Company added a third production shift enabling it to meet this growth. Additionally, a significant portion of our 2024 production efforts went towards the manufacture and testing of parts needed to solve a quality issue with a major customer.
Removed
It can then take a few months before they are fully up to speed. Selling, general and administrative (SG&A) expenses were $4.3 million during 2024, down from SG&A expenses of $5.1 million incurred during 2023.
Added
Upon resolution in later 2024, this production capacity was again available to make products for sale to customers. Lastly, gold represents a significant cost in our hermetic package products. The price of gold increased significantly especially during the second half of 2025 over it’s price in 2024.
Removed
In 2024 the Company recorded an income tax benefit of $1.0 million compared to a provision for income taxes $0.6 million in 2023. Significant Fourth Quarter Activity in 2024: Revenues totaled $5.9 million in the fourth quarter of 2024 versus $6.7 million in the fourth quarter of 2023, a decrease of 12%.
Added
The methodologies in recovering the increased gold costs can vary by customer, but generally speaking we do not generate a profit on these gold cost recovery charges which reduced profit margin by about 1%. Selling, general and administrative (SG&A) expenses were $4.8 million during 2025, up from SG&A expenses of $4.3 million incurred during 2024.
Removed
This decrease was due to lower revenue as well as the costs associated with the production ramp up described above. SG&A expenses totaled $1.0 million during the quarter, compared to $1.0 million in the same quarter of 2023.
Added
Significant Fourth Quarter Activity in 2025: Revenues totaled $8.2 million in the fourth quarter of 2025 versus $5.9 million in the fourth quarter of 2024, an increase of 38%. This increase was primarily due to significant growth in our core business. In Q4 of 2024, our third shift was just getting started.
Removed
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%.
Added
Our third shift folks had not yet reached their full level of proficiency resulting in lower production as compared to a fully experienced group. Secondarily, gold represents a significant cost in our hermetic package products. The price of gold increased significantly during the fourth quarter of 2025 over it’s price in 2024.
Added
In addition, our third shift was added in late Q3 2024. Its expected operational efficiencies had not yet been achieved in Q4 of 2024. SG&A expenses totaled $1.3 million during the quarter, compared to $1.0 million in the same quarter of 2024.
Added
This increase was primarily due to the increase in variable compensation expense, due to the increase in revenue and profit year over year. In addition, the increased revenue generated a significant increase in our sales commission expense.
Added
This increase was primarily due to the Company’s equity raise partially offset by increases in accounts receivable and inventory needed to support increased revenue. On October 8, 2025 the Company closed an equity raise underwritten by Roth Capital Partners (“Roth”). Roth acquired 3,450,000 shares of the Company’s common stock at a price of $3.00 per share.
Added
Inventories increased to $5.6 at December 27, 2025 from $4.3 at December 28, 2024. This increase was almost entirely the result of an increase in work in process (WIP). CPS ships parts to platers in Europe where the parts are plated prior to shipment to the customer.

Other CPSH 10-K year-over-year comparisons