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What changed in CVD EQUIPMENT CORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of CVD EQUIPMENT CORP'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.

+183 added−173 removedSource: 10-K (2026-03-30) vs 10-K (2025-03-19)

Top changes in CVD EQUIPMENT CORP's 2025 10-K

183 paragraphs added · 173 removed · 140 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

65 edited+22 added−13 removed35 unchanged
Biggest changeKey Company Strengths Based on more than 40 years of equipment experience, we use our capabilities in process development, engineering, and vertical manufacturing to transform emerging applications into mainstream manufacturing solutions. 4 We have built a library of design expertise, know-how and innovative solutions to assist our customers in developing these intricate processes and to accelerate their production and commercialization.
Biggest changeWe have built a library of design expertise, know-how and innovative solutions to assist our customers in developing these intricate processes and to accelerate their production and commercialization. This library of equipment design solutions, along with our manufacturing and systems integration facilities, allows us to provide application-specific design, process, and manufacturing solutions to our customers.
Equal Opportunity We are committed to building and sustaining a culture of equal opportunity that encourages all of our employees to reach their full potential. Our CVD team, like the technologies we enable, is a rich combination of diverse individuals coming together to make a material difference for our people, our customers, and the world.
Equal Opportunity We are committed to building and sustaining a culture of equal opportunity that encourages all our employees to reach their full potential. Our CVD team, like the technologies we enable, is a rich combination of diverse individuals coming together to make a material difference for our people, our customers, and the world.
MesoScribe provided MesoPlasma™ printing services and products (heaters, antennas, and sensors) to aerospace, satellite, power generation, defense, and other markets requiring high performance. MesoScribe operations were located at our main facility in Central Islip, New York. On August 8, 2023, we entered into an agreement with a third party to sell certain assets and license certain proprietary information of MesoScribe.
MesoScribe provided MesoPlasma™ printing services and products (heaters, antennas, and sensors) to aerospace, satellite, power generation, defense, and other markets requiring high performance. MesoScribe operations were located at our facility in Central Islip, New York. On August 8, 2023, we entered into an agreement with a third party to sell certain assets and license certain proprietary information of MesoScribe.
We strive to protect our trade secrets and other proprietary information through non-disclosure agreements with our customers, suppliers, employees and consultants and other security measures. Research and Development We develop new products based on market analysis or by customer request. The technology included in our product development includes mechanical hardware, software and controls systems and overall configuration.
We strive to protect our trade secrets and other proprietary information through non-disclosure agreements with our customers, suppliers, employees and consultants and other security measures. 9 Research and Development We develop new products based on market analysis or by customer request. The technology included in our product development includes mechanical hardware, software and controls systems and overall configuration.
Our legacy product line continues to provide advanced equipment and subsystems to enable development of emerging technology and research applications. Microelectronics / High Power Electronics Demand for silicon carbide wafers to support high power electronics for energy storage and transmission/charging resulted in a multi-system order from a US-based, silicon carbide wafer manufacturer.
Our legacy product line continues to provide advanced equipment and subsystems to enable development of emerging technology and research applications. 6 Microelectronics / High Power Electronics Demand for silicon carbide wafers to support high power electronics for energy storage and transmission/charging resulted in a multi-system order from a US-based, silicon carbide wafer manufacturer.
We fulfilled remaining orders for MesoScribe products during 2024,completed the sales of the equipment assets and ceased operations as of September 30, 2024. Products and Technology Chemical Vapor Deposition/Infiltration – Chemical vapor deposition is a method of coating or growing material through a chemical disassociation and recombination at elevated temperatures onto or within pores of a substrate material.
We fulfilled remaining orders for MesoScribe products during 2024, completed the sales of the equipment assets and ceased operations as of September 30, 2024. 8 Products and Technology Chemical Vapor Deposition/Infiltration – Chemical vapor deposition is a method of coating or growing material through a chemical disassociation and recombination at elevated temperatures onto or within pores of a substrate material.
CVD Equipment group provides process development value through our Application Laboratory where our personnel interact directly with the scientists and engineers of our customer base to develop solutions to tomorrow’s challenges today. CVD Equipment segment operates from our 128,000 square feet facility in Central Islip, New York.
CVD Equipment segment provides process development value through our Application Laboratory where our personnel interact directly with the scientists and engineers of our customer base to develop solutions to tomorrow’s challenges today. CVD Equipment segment operates from our 128,000 square feet facility in Central Islip, New York.
In late 2023, we launched our PVT200 system designed to manufacture silicon carbide crystals for 200 mm wafer and in mid-2024 we received our first order from a second customer. We plan to continue to support the market with our PVT 200 system and possible future product development for the PVT200 product line.
In late 2023, we launched our PVT200™ system designed to manufacture silicon carbide crystals for 200 mm wafer and in mid-2024 we received our first order from a second customer. We plan to continue to support the market with our PVT200™ system and possible future product development for the PVT200™ product line.
We will continue to monitor the market dynamics for silicon carbide wafers. EV Battery Materials / Energy Storage We have experienced increased interest and demand for nanotechnology materials including carbon nanotubes (CNTs), graphene and silicon nanowires (Si-NWs) to support the development and manufacturing for battery materials used in electric vehicles.
We will continue to monitor the market dynamics for silicon carbide wafers. EV Battery Materials / Energy Storage We have experienced interest and demand for nanotechnology materials including carbon nanotubes (CNTs), graphene and silicon nanowires (Si-NWs) to support the development and manufacturing for battery materials used in electric vehicles.
Some applications include CNT and infiltrated carbon/CVI based battery material and CNF capacitors for 5G technology. 8 To support new emerging applications, we provide equipment to and collaborate with laboratory scientists to bring state-of-the-art processes from the research laboratory into production.
Some applications include CNT and infiltrated carbon/CVI based battery material and CNF capacitors for 5G technology. To support new emerging applications, we provide equipment to and collaborate with laboratory scientists to bring state-of-the-art processes from the research laboratory into production.
Our CVD Equipment product lines, including FirstNano, target multiple markets and both production and research customers. Competition is substantial in both the production applications and research. In production application, competition comes from larger companies offering enhanced services. In research applications, the competition comes from small companies that compete with us mostly on price.
Our CVD Equipment product lines, including FirstNano, target multiple markets and both production and research customers. Competition is substantial in both the production applications and research. In production applications, competition comes from larger companies offering enhanced services. In research applications, the competition comes from small companies that compete with us mostly on price.
We have both a domestic and international customer base. 11 Given the complexity and magnitude of the systems we sell, revenue from a single customer in any one year can exceed 10% of our total sales.
We have both a domestic and international customer base. Given the complexity and magnitude of the systems we sell, revenue from a single customer in any one year can exceed 10% of our total sales.
Markets and Marketing We serve multiple emerging and mature global markets including compound semiconductor high power electronics, aerospace, defense, battery energy storage, silicon and other microelectronic and micromechanical devices, semiconductor, universities, and research centers.
Markets and Marketing We serve multiple emerging and mature global markets including compound semiconductor high power electronics, aerospace, defense, battery energy storage, silicon and other microelectronic and micromechanical devices, semiconductors, universities, and research centers.
In addition to adjustments from these types of contingencies, variations in backlog from time to time are attributable, in part, to changes in sales mix, the timing of contract proposals, the timing of contract awards, delivery schedules on specific contracts.
In addition to adjustments from these types of contingencies, variations in backlog from time to time are attributable, in part, to changes in sales mix, the timing of contract proposals, the timing of contract awards, and delivery schedules on specific contracts.
We have gained this understanding as a result of having designed and built complex process gas systems for our CVD Equipment group as well as for a number of the world’s leading semiconductor, aerospace, medical, solar manufacturers, research laboratories and universities. Sources of Supply Many of the components used in producing our products are purchased from unrelated suppliers.
We have gained this understanding as a result of having designed and built complex process gas systems for our CVD Equipment group as well as for a number of the world’s leading semiconductors, aerospace, medical, solar manufacturers, research laboratories and universities. Sources of Supply Many of the components used in producing our products are purchased from unrelated suppliers.
The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. 15
The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.
Through December 31, 2024, we have received and delivered orders for 30 of our PVT150 physical vapor transport systems from one customer, which planned to use our systems to grow silicon carbide crystals that are made into 150 mm silicon carbide wafers for use in power electronics.
Through December 31, 2025, we have received and delivered orders for 30 of our PVT150™ physical vapor transport systems from one customer, which planned to use our systems to grow silicon carbide crystals that are made into 150 mm silicon carbide wafers for use in power electronics.
Our research and development activities over have yielded a wealth of technology from which systems and solutions can be derived from and productized.
Our research and development activities have yielded a wealth of technology from which systems and solutions can be derived from and productized.
Both processes are accomplished by combining appropriate gases in a reaction chamber, of the kind we manufacture, at elevated temperatures (typically 500° to 2,500° Celsius). Our chemical vapor deposition and CVI systems are complete and include all necessary heating techniques, precise control instrumentation, gas delivery and abatement subsystems and components and include state-of-the-art proprietary process control software.
Both processes are accomplished by combining appropriate gases in a reaction chamber at elevated temperatures (typically 500° to 2,500° Celsius). Our chemical vapor deposition and CVI systems are complete and include all necessary heating techniques, precise control instrumentation, gas delivery and abatement subsystems and components and include state-of-the-art proprietary process control software.
R&D Applications: - ET-3000: Versatile CNT growth system for research and development. 7 Other Markets CVD Equipment Products: - Universal liquid and gas storage cabinets, management, and delivery systems (SDC segment). - Production MOCVD Super Conducting Tape system. - ET-3000: MOCVD for compound semiconductor R&D. - ET-3000 for graphene. - ET-6000: Multi-Tube Chemical Vapor Deposition Tube furnace (metals, oxides and nitrides). - PowderCoat-300 for powder material R&D (including battery anode). - TMD: cluster tool for advanced material development.
R&D Applications: - ET-3000: Versatile CNT growth system for research and development. 7 Other Markets CVD Equipment Products: - Universal liquid and gas storage cabinets, management, and delivery systems (SDC segment). - Production MOCVD Super Conducting Tape system. - ET-3000: MOCVD for compound semiconductor R&D. - ET-3000 for graphene. - ET-6000: Multi-Tube Chemical Vapor Deposition Tube furnace (metals, oxides and nitrides). - PowderCoat-300 for powder material R&D (including battery anode).
Export Administration Regulations (“EAR”). We continue to monitor, review, and maintain ongoing compliance with the EAR with respect to our export sales. Product Liability Our products are used in our customers’ manufacturing processes, which in some cases contain explosive, flammable, corrosive, and toxic gases.
We continue to monitor, review, and maintain ongoing compliance with the EAR with respect to our export sales. Product Liability Our products are used in our customers’ manufacturing processes, which in some cases contain explosive, flammable, corrosive, and toxic gases.
Our backlog at December 31, 2024 consists of approximately $17.4 million remaining performance obligations for system contracts in progress and not yet started and the balance of approximately $1.9 million represents other non-system orders received from customers.
Our backlog at December 31, 2025 consists of approximately $4.9 million remaining performance obligations for system contracts in progress and not yet started and the balance of approximately $1.7 million represents other non-system orders received from customers.
For the year ended December 31, 2024, approximately 4.3% of our revenues were generated by sales to customers outside the U.S., compared to approximately 17.2% for the year ended December 31, 2023. Competition We can experience intense direct competition from both domestic and international competitors in all our product segments.
For the year ended December 31, 2025, approximately 5.4% of our revenues were generated by sales to customers outside the U.S., compared to approximately 4.3% for the year ended December 31, 2024. Competition We can experience intense direct competition from both domestic and international competitors in all our product segments.
Human Capital We consider our employees a vital asset to our business and strive to ensure we foster a work environment of respect, communication, objective orientation, and personal life balance. We believe this results in a higher level of employee satisfaction and hence improved performance and employment longevity. On December 31, 2024, we had 118 employees.
Human Capital We consider our employees a vital asset to our business and strive to ensure we foster a work environment of respect, communication, objective orientation, and personal life balance. We believe this results in a higher level of employee satisfaction and hence improved performance and employment longevity. As of December 31, 2025, we had 85 employees.
Overview CVD has served the advanced materials markets with chemical vapor deposition, physical vapor transport and thermal process equipment for over 40 years. We are headquartered in Central Islip, New York with our SDC division located in Saugerties, New York.
Overview CVD has served the advanced materials markets with chemical vapor deposition, physical vapor transport and thermal process equipment for over 40 years. We are headquartered in Central Islip, New York with our Stainless Design Concepts (“SDC”) division located in Saugerties, New York.
We provide both standard and emerging applications specified products. Some of the standard systems we offer are for SiC, GaN, Aluminum Nitride (AlN), CMCs, silicon (Si), CNT, graphene, silicon nanowires.
We provide both standard and emerging applications for specified products. Some of the standard systems we offer are for SiC, GaN, Aluminum Nitride (AlN), CMCs, silicon (Si), CNT, graphene, silicon nanowires. The systems are sold under the CVD and FirstNano product brands.
We conduct our business through three reportable segments: i) CVD Equipment that designs and manufactures chemical vapor deposition, physical vapor transport and thermal process equipment; ii) SDC that designs and manufactures ultra-high purity gas and chemical delivery control systems; and iii) MesoScribe that provided products related to advanced materials and coatings.
We currently conduct our business through two reportable segments: i) CVD Equipment that designs and manufactures chemical vapor deposition, physical vapor transport and thermal process equipment; and ii) SDC that designs and manufactures ultra-high purity gas and chemical delivery control systems. Our MesoScribe reportable segment ceased operations in 2024 and had provided products related to advanced materials and coatings.
The Applications Laboratory, along with the sales and marketing team continue to explore carbon-based products and applications that can be made from our CNT, infiltrated carbon/CVI and carbon nano fiber technology (CNF).
Our developments and opportunities for the carbon composite business come from achievements in our Applications Laboratory. The Applications Laboratory, along with the sales and marketing team continue to explore carbon-based products and applications that can be made from our CNT, infiltrated carbon/CVI and carbon nano fiber technology (CNF).
We also maintain certain trademarks relating to certain of our products and product lines and claim copyright protection for certain proprietary software and documentation. 10 While patent, copyright and trademark protections for our intellectual property are important to different degrees for our various products and solutions, we believe our future success in highly dynamic markets is most dependent upon the technical competence and creative skills of our personnel and our ability to accelerate the commercialization of next generation intellectual properties.
While patent, copyright and trademark protections for our intellectual property are important to different degrees for our various products and solutions, we believe our future success in highly dynamic markets is most dependent upon the technical competence and creative skills of our personnel and our ability to accelerate the commercialization of next generation intellectual properties.
We market and sell primarily to companies that are the engaged in producing aerospace gas turbine jet engine component material, defense, compound semiconductor wafers, battery energy storage, silicon and other microelectronic and micromechanical devices, semiconductor, universities and research centers.
Customers Our systems and products are used in both production applications and advanced materials research. We market and sell primarily to companies that are engaged in producing aerospace gas turbine jet engine component material, defense, compound semiconductor wafers, battery energy storage, silicon and other microelectronic and micromechanical devices, semiconductor, universities and research centers.
Microelectronics / High Power Electronics The shift to electrification has the objectives of reducing emissions and reducing dependency on fossil fuels. This has driven the demand for electric vehicle and associated high power electronics used in charging and motor power conversion.
Microelectronics / High Power Electronics The shift to electrification has the objectives of reducing emissions and reducing dependency on fossil fuels. This has driven the demand for electric vehicle and associated high power electronics used in charging and motor power conversion. The use of SiC in augmented reality glasses is a potential emerging application.
During 2022, we also received an order from an aerospace company for a production chemical vapor infiltration (CVI) system that will be used to manufacture CMCs for gas turbine jet engine components.
During 2022, we also received an order from an aerospace company for a production chemical vapor infiltration (CVI) system that will be used to manufacture CMCs for gas turbine jet engine components. We received additional orders from the same aerospace company for three CVI systems in 2023 and one CVI system in 2024.
To date, we believe that each of our product and service segments has been able to compete favorably in markets that include these competitors, primarily based on know-how, technical performance, quality, delivery, price and aftermarket support. We continue to focus on products, which serve markets that are growing and where we have a technical and commercially competitive advantage.
To date, we believe that each of our product and service segments has been able to compete favorably in markets that include these competitors, primarily based on know-how, technical performance, quality, delivery, price and aftermarket support.
The systems are normally operated at atmospheric and/or reduced pressure with gaseous atmospheres related to the process. An optional feature of the system allows for the heating element to be moved away from the process chamber allowing the wafers to rapidly cool or be heated in a controlled environment. Our temperature control system enables more precise control of the wafers.
An optional feature of the system allows for the heating element to be moved away from the process chamber allowing the wafers to rapidly cool or be heated in a controlled environment. Our temperature control system enables more precise control of the wafers.
We further believe that SDC is differentiated from our competitors through our deep understanding of how the systems in which our products are incorporated are used in field applications.
SDC’s gas management and chemical delivery control systems are among the most advanced available. We further believe that SDC is differentiated from our competitors through our deep understanding of how the systems in which our products are incorporated are used in field applications.
We had 58 employees in manufacturing, 30 in engineering (including research and development and efforts related to product improvement), 5 in field service, 10 in sales and marketing and 15 in general management, maintenance and administration, compared to 128 employees as of December 31, 2023. None of our employees were subject to a collective bargaining agreement.
We had 39 employees in manufacturing, 22 in engineering (including research and development and efforts related to product improvement), 4 in field service, 7 in sales and marketing and 13 in general management, maintenance and administration, compared to 118 employees as of December 31, 2024. None of our employees are subject to a collective bargaining agreement.
We received additional orders from the same aerospace company for three CVI systems in 2023 and one CVI system in 2024. 5 In February 2024, we received a multisystem order from an industrial customer for approximately $10 million that will be used for depositing a silicon carbide protective coating on OEM components and the units are expected to be delivered over 18 to 24 months period.
In February 2024, we received a multisystem order from an industrial customer for approximately $10 million that will be used for depositing a silicon carbide protective coating on OEM components and the units are expected to be completed over the next three to six months.
During the year ended December 31, 2024, one customer represented 29.5% of our revenues, while in 2023 three customers represented 14.3%, 13.5% and 10.9% of our revenues.
During the year ended December 31, 2025, two customers represented 27.6% and 13.7% of our revenues, while in 2024, one customer represented 29.5% of our revenues.
We have OEM status with our suppliers, but we are not obligated to purchase a pre-determined quantity. We are not dependent on a principal or major supplier and alternate suppliers are available.
We have OEM status with our suppliers, but we are not obligated to purchase a pre-determined quantity. We are not dependent on a principal or major supplier and alternate suppliers are available. Historically, subject to lead times, the components and raw materials we used in manufacturing our products were readily obtainable.
Aerospace & Defense CVD is a leading manufacturer of preform CVI and tow-coating systems to manufacture CMCs for aerospace gas turbine jet engine applications. Our customers include two of the leaders in aerospace gas turbine engines. We continue to engage additional customers in the aerospace market regarding CMCs. During 2022, we received an order for a production CVI system.
Our customers include two of the leaders in aerospace gas turbine engines. We continue to engage additional customers in the aerospace market regarding CMCs. During 2022, we received an order for a production CVI system. We received additional orders from the same aerospace company for three CVI systems in 2023 and one additional CVI system in 2024.
Due to budgetary and funding constraints, many customers are price sensitive. We believe that our systems are among the most advanced available for the targeted market and coupled with our vertical integration in engineering and manufacturing, we believe that we can compete effectively. SDC’s gas management and chemical delivery control systems are among the most advanced available.
Additionally, there are large established companies who compete with us and pose a competitive risk in the market. Due to budgetary and funding constraints, many customers are price sensitive. We believe that our systems are among the most advanced available for the targeted market and coupled with our engineering and manufacturing capabilities, we believe that we can compete effectively.
We received additional orders from the same aerospace company for three CVI systems in 2023 and one additional CVI system in 2024. These systems will be used to manufacture CMCs for aerospace gas turbine jet engines. 6 We believe our future growth will be derived from production applications in our major target markets.
These systems will be used to manufacture CMCs for aerospace gas turbine jet engines and we anticipate the systems will be field accepted and operational by our customer with the next three to nine months. We believe our future growth will be derived from production applications in our major target markets.
The systems are sold under the CVD and FirstNano product brands. 9 Physical Vapor Transport (PVT) – While the PVT150 was officially launched for production in 2022, we have sold PVT systems in prior years and have pioneered both resistive heating and more effectively inductively heated PVT systems.
Physical Vapor Transport (PVT) – While the PVT150™ was officially launched for production in 2022, we have sold PVT systems in prior years and have pioneered both resistive heating and more effectively inductively heated PVT systems. The PVT150™ system was specifically designed to address the SiC crystal growth market for 150 mm substrates or wafers.
The timing for completion of backlog varies depending on the product mix and can be as long as two years or as short as 30-60 days. There can be no assurance that our backlog will result in actual revenue in any particular period, or at all, or that any contract included in backlog will be profitable.
The timing for completion of backlog varies depending on the product mix and can be as long as two years or as short as 30-60 days.
Utilizing our in-house safety team, engineering expertise and consultants as required, we continue to monitor and comply with applicable Environmental Health and Safety regulations at our facilities as well as the installation of equipment at our customer facilities. 13 With respect to our sales to customers located in China or elsewhere outside the United States, products which (i) are manufactured in the United States, (ii) incorporate controlled U.S. origin parts, technology, or software, or (iii) are based on U.S. technology, are subject to the U.S.
With respect to our sales to customers located in China or elsewhere outside the United States, products which (i) are manufactured in the United States, (ii) incorporate controlled U.S. origin parts, technology, or software, or (iii) are based on U.S. technology, are subject to the U.S. Export Administration Regulations (“EAR”).
We maintain strong environmental, health and safety protocols that focus on implementing policies and training programs, as well as performing self-audits to ensure our colleagues and partners leave the workplace safely on a daily basis. 14 Employee Compensation Management continues to review our employee compensation programs to better align the compensation of our employees with our objectives, performance, and personal performance, and to provide the proper short-term and long-term incentives to attract, retain and motivate them to achieve superior results.
We maintain strong environmental, health and safety protocols that focus on implementing policies and training programs, as well as performing self-audits to ensure our colleagues and partners leave the workplace safely on a daily basis.
CVD Equipment competes with companies located in Asia, Europe, and the US in both the production and research market. In the production and research markets, some of our potential customers built their own equipment. Additionally, there are large established companies who compete with us and pose a competitive risk in the market.
We continue to focus on products which serve markets that are growing and where we have a technical and commercially competitive advantage. 10 CVD Equipment competes with companies located in Asia, Europe, and the US in both the production and research market. In the production and research markets, some of our potential customers built their own equipment.
The targeted growth production markets include aerospace advanced materials primarily for gas turbine jet engines, high power electronics (both silicon carbide (SiC) and gallium nitride (GaN)), and nanomaterials used in batteries.
The targeted markets include advanced aerospace materials primarily for gas turbine jet engines, high power electronics (both silicon carbide (SiC) and gallium nitride (GaN)), and nanomaterials used in batteries. The product group also consists of legacy products serving the production and R&D applications such as semiconductors, LEDs, carbon nanotubes, nanowires, solar cells and several other industrial & research applications.
Our RTP systems are offered for implant activation, oxidation, silicide formation and many other processes. We offer systems that can operate both at atmospheric and reduced pressures. Annealing, Diffusion and Low-Pressure Chemical Vapor Deposition (LPCVD) Furnaces – These furnaces are used for dislocation removal in crystals, dopant diffusion, oxidation, for SiC, Si, SiOx and other applications.
Annealing, Diffusion and Low-Pressure Chemical Vapor Deposition (LPCVD) Furnaces – These furnaces are used for dislocation removal in crystals, dopant diffusion, oxidation, for SiC, Si, SiOx and other applications. The systems are normally operated at atmospheric and/or reduced pressure with gaseous atmospheres related to the process.
We are committed to identifying and developing the talents of our next generation of managers and intend to establish a strong succession-planning program for our critical positions, including internships for technical and engineering resources from local universities.
We are committed to identifying and developing the talents of our next generation of managers and intend to establish a strong succession-planning program for our critical positions 12 Employee Safety The health and safety of our employees and partners is our highest priority, and this is consistent with our operating philosophy.
This library of equipment design solutions, along with our manufacturing and systems integration facilities, allows us to provide application-specific design, process, and manufacturing solutions to our customers. Our core competencies in equipment and software design, manufacturing and process development are used to engineer our finished products and to accelerate the commercialization path of our customer base.
Our core competencies in equipment and software design, manufacturing and process development are used to engineer our finished products and to accelerate the commercialization path of our customer base. Our proprietary real-time software allows for rapid configuration, and provides our customers with enabling tools to understand, optimize and repeatedly control their processes.
A 200 mm version called the PVT200 was developed during 2023, and the first order was received in February 2024 and delivered in 2024. The crystal growth technique utilized a high temperature furnace to vaporize from seed granular material of SiC and further deposit out in an ordered crystal structure onto substrate wafer.
The crystal growth technique utilized a high temperature furnace to vaporize from seed granular material of SiC and further deposit out in an ordered crystal structure onto substrate wafer. The process takes days to over a week to complete and yield a SiC crystal ready for further processing into wafers.
These systems should provide us with standard product offering to continue to support the EV focused market as well as energy storage, power conversion and power transmission. We are also evaluating our ability to provide other equipment used in the manufacturing process of silicon carbide wafers.
These systems may provide us with standard products offering to continue to support the EV focused market as well as energy storage, power conversion and power transmission. We have observed continued weakness in the demand for our PVT product line and general reduced demand for silicon carbide which has negatively impacted sales of our PVT systems.
Our proprietary real-time software allows for rapid configuration, and provides our customers with enabling tools to understand, optimize and repeatedly control their processes. These factors reduce cost, improve quality, and reduce the time it takes between customers’ orders and the shipment of our products.
These factors reduce costs, improve quality, and reduce the time it takes between customers’ orders and the shipment of our products. Our Application Laboratory allows customers the option to bring their process tools to our laboratory and to work collaboratively with our scientists and engineers to optimize process performance.
The PVT150 system was specifically designed to address the SiC crystal growth market for 150 mm substrates or wafers. Designed to provide enhanced process parameter control it allows existing and future customers the ability to tightly control and monitor the crystal growth process for 150mm substrates.
Designed to provide enhanced process parameter control, it allows existing and future customers the ability to tightly control and monitor the crystal growth process for 150 mm substrates. A 200 mm version called the PVT200™ was developed during 2023, and the first order was received in February 2024 and delivered in 2024.
Materials procured from suppliers and/or manufactured internally undergo a rigorous quality control process to ensure that the parts meet or exceed our requirements and those of our customers. Upon final assembly, all equipment undergoes a final series of complete testing to ensure maximum product performance.
These actions are expected to reduce our fixed operating costs. Our quartz fabrication capability is currently sufficient to meet our quartzware needs. Materials procured from suppliers and/or manufactured internally undergo a rigorous quality control process to ensure that the parts meet or exceed our requirements and those of our customers.
Our primary marketing activities include direct sales engagement, participation in trade associations and trade shows and our internet websites. We expanded our marketing activities through attendance at key tradeshows and online marketing. Customers Our systems and products are used in both production applications and advanced materials research.
Our primary marketing activities include direct sales engagement, participation in trade associations and trade shows and our internet websites. We expanded our marketing activities through attendance at key tradeshows and online marketing. As part of our transformation strategy announced in November 2025, we revised our sales strategy to use distributors and outside sales representatives to supplement internal sales efforts.
These systems, which we market and sell under the CVD, FirstNano and EasyTube® product names, are sold to commercial companies, universities and research laboratories in the United States and throughout the world. Sales of our proprietary standard systems, custom systems and process solutions have been driven by our installed customer base, which includes many Fortune 500 companies.
These systems, which we market and sell under the CVD, FirstNano and EasyTube® product names, are sold to commercial companies, universities and research laboratories in the United States and throughout the world. Key Growth Strategies Our core strategy is to focus on growth applications in end markets related to aerospace, microelectronics, and industrial applications.
We have also received orders from OneD Battery Materials in 2023, a company that is engaged in providing battery nanomaterials. We also provide a line of CVD systems which are used to develop and produce material for the anode portion of batteries. Both technologies are essential for the support of the EV market.
In addition, SiC semiconductors specifically help address the need for high energy efficiency and power density in the AC-DC stage in power supply units for data centers. We also provide a line of CVD systems which are used to develop and produce material for the anode portion of batteries. Both technologies are essential for the support of the EV market.
The phrase “electrification of everything” within the microelectronics market refers to the shift from fossil fuels to the use of electricity to power devices, buildings, electric vehicles (“EVs”) and many other applications. Our strategy yielded multisystem orders of PVT150 equipment that was delivered to one company in 2022 and 2023 that manufactures silicon carbide wafers.
The phrase “electrification of everything” within the microelectronics market refers to the shift from fossil fuels to the use of electricity to power devices, buildings, electric vehicles (“EVs”) and many other applications. 5 In October 2025, we received an order for two PVT150™ Physical Vapor Transport Systems (“PVT”) from Stony Brook University (“SBU”) for their new semiconductor research center - onsemi Silicon Carbide Crystal Growth Center.
We have generally gained new customers through our industry reputation, as well as limited print advertising and trade show attendance. We have increased the number of trade shows and industry conferences we attend in 2024. Major Target Markets Our major target markets are aerospace & defense and industrial, microelectronics / high power electronics, and EV battery materials / energy storage.
In addition, the recent global overcapacity of 150 mm and 200 mm silicon carbide wafers has reduced the market for our silicon carbide growth systems. We have generally gained new customers through our industry reputation, as well as limited print advertising and trade show attendance. We have increased the number of trade shows and industry conferences attended in 2025.
Key Growth Strategies Our core strategy is to focus on growth applications in end markets related to aerospace, microelectronics, and industrial applications.
We anticipate the systems will be field accepted and operational by our customer with the next three to nine months. Our core strategy is to focus on key related to aerospace, microelectronics and industrial applications.
Bookings During 2024, bookings of new orders from customers was approximately $28.1 million, representing an increase of approximately 8.9% compared to 2023 bookings of $25.8 million. The increase in bookings of $2.3 million was related to an increase in aerospace and industrial orders.
Bookings During 2025, bookings of new orders from customers were approximately $13.0 million, representing a decrease of approximately 53.7% compared to 2024 bookings of $28.1 million.
The process takes days to over a week to complete and yield a SiC crystal ready for further processing into wafers. Rapid Thermal Processing (RTP) – Used to heat semiconductor materials to elevated temperatures of up to 1,200 ° Celsius at rapid rates of up to 200° Celsius per second.
Rapid Thermal Processing (RTP) – Used to heat semiconductor materials to elevated temperatures of up to 1,200 ° Celsius at rapid rates of up to 200° Celsius per second. Our RTP systems are offered for implant activation, oxidation, silicide formation and many other processes. We offer systems that can operate both at atmospheric and reduced pressures.
Backlog As of December 31, 2024, our backlog was approximately $19.4 million, compared to $18.4 million as of December 31, 2023, an increase of $1.0 million.
Upon final assembly, all equipment undergoes a final series of complete testing to ensure maximum product performance. Backlog As of December 31, 2025, our backlog was approximately $6.6 million, compared to $19.4 million as of December 31, 2024, a decrease of $12.8 million.
Removed
Developments On August 8, 2023, we entered into an agreement with a third party to sell certain assets and license certain propriety information of our MesoScribe subsidiary. We fulfilled remaining orders for MesoScribe products during 2024 and sold certain equipment resulting in the recognition of a gain on sale of equipment in 2024.
Added
Developments On March 23, 2026, we entered into a definitive agreement under which our SDC business division will be sold to a subsidiary of the Atlas Copco Group. The purchase price amounts to approximately $16.9 million in cash, subject to certain purchase price adjustments.
Removed
On May 26, 2023, we sold our Tantaline subsidiary located in Nordborg, Denmark in exchange for a nominal amount at closing and an earn-out provision based on any net income that Tantaline may earn during the five-year period ending December 31, 2027.
Added
The transaction is expected to close during the second quarter of 2026, subject to customary closing conditions. We expect to use the proceeds from the transaction to enhance financial flexibility and support initiatives aimed at creating shareholder value.
Removed
The decisions to sell our Tantaline subsidiary and close down the operations of MesoScribe were based on our strategy to focus on the equipment business consisting of the CVD Equipment and SDC segments.
Added
The expected net cash proceeds after payment of transaction expenses and taxes are approximately $15.0 million, of which $900,000 will be held in escrow to cover post-closing adjustments and indemnification obligations under the agreement.
Removed
Our Application Laboratory allows customers the option to bring their process tools to our laboratory and to work collaboratively with our scientists and engineers to optimize process performance. To expand our presence into our major target markets, we are developing a line of proprietary standard use products to complement our customized legacy systems.
Added
CVD will retain ownership of its Saugerties, New York facility, which will be leased to the acquiring company for an initial term of two years following the closing of the transaction.
Removed
Historically, we manufactured products for research and development on an application-specific basis to meet an individual customer’s specific research and production requirements. Our proprietary systems leverage the technological expertise that we have developed through designing these custom systems into a broader standardized product line.
Added
On November 6, 2025, our Board of Directors approved a comprehensive strategy to transform the Company in response to the continued fluctuations in our order rates and the recent decline in the bookings of our CVD Equipment segment.
Removed
The standard product line can be configured from a wide range of available options to meet diverse product and budgetary requirements. Manufacturing these standardized systems in higher volumes may provide us the flexibility to reduce both the cost and delivery time of our systems as well as leverage our engineering development cost.
Added
As part of this strategy, we intend to transition the operating model for our CVD Equipment business from vertically integrated fabrication to outsourced fabrication of certain components. These actions are expected to reduce our fixed operating costs.
Removed
The performance and success of our products has historically driven repeat orders from existing customers as well as generated business from new customers. Furthermore, with our proprietary solutions and expanded focus on “ enabling tomorrow’s technologies ” TM we have been developing a new customer base in addition to growing with our existing customers.
Added
Key initiatives of the plan included a reduction in the CVD Equipment division’s workforce and other expenses, to reduce annual operating costs by approximately $1.8 million. This included outsourcing the fabrication operations for certain components and the implementation of a revised sales strategy utilizing distributors and outside sales representatives to supplement internal sales efforts.
Removed
In February 2024, we received an order from an additional customer for our new PVT200 system used to grow silicon carbide crystals for the manufacture of 200 mm wafers. This represents our second customer for our PVT equipment. This customer is evaluating our equipment performance for potential additional purchases of PVT equipment.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisk categories: ● Risks related to sales and product development ● Risks related to manufacturing and supply chain ● Risks related to cybersecurity, intellectual property and regulatory compliance ● Risks related to financial and accounting matters ● Risks related to product liability ● Risks related to our stock ● General risk factors Risks related to sales and product development Historically, we have maintained a highly concentrated customer base so that changes in ordering patterns, delays or order cancellations could have a material adverse effect on our business and results of operations.
Biggest changeHistorically, we have maintained a highly concentrated customer base so that changes in ordering patterns, delays or order cancellations could have a material adverse effect on our business and results of operations. During 2025, two customers represented 27.6% and 13.7% of our total revenues, respectively.
While we have taken actions to mitigate the potential negative impacts to our revenue and profitability, there can be no assurance of the ultimate impact and the length of time that the supply chain factors, including tariffs, may impact our revenues and profitability. Inflation has and may continue to adversely affect our business, financial condition, and results of operations.
While we have taken actions to mitigate the potential negative impacts to our revenue and profitability, there can be no assurance of the ultimate impact and the length of time that the supply chain factors, including tariffs, may impact our revenues and profitability. 17 Inflation has and may continue to adversely affect our business, financial condition, and results of operations.
If customer cancellations occur, they could result in the loss of anticipated sales without allowing us sufficient time to reduce our operating expenses. 16 If any of our customers cancel or fail to accept a large system order, our financial position and results of operations could be materially and adversely affected.
If customer cancellations occur, they could result in the loss of anticipated sales without allowing us sufficient time to reduce our operating expenses. If any of our customers cancel or fail to accept a large system order, our financial position and results of operations could be materially and adversely affected.
Our success depends on our ability to identify, hire, train and retain qualified engineering personnel with experience in equipment design. Specifically, we need to continue to attract and retain mechanical, electrical, software and field service engineers to work with our direct sales force to technically qualify and perform on new sales opportunities and orders, and to demonstrate our products. 28
Our success depends on our ability to identify, hire, train and retain qualified engineering personnel with experience in equipment design. Specifically, we need to continue to attract and retain mechanical, electrical, software and field service engineers to work with our direct sales force to technically qualify and perform on new sales opportunities and orders, and to demonstrate our products.
Our orders tend to be more volatile than our revenue, as any change in demand is reflected immediately in orders booked, which are net of cancellations, while revenue, tends to be recognized over multiple quarters because of procurement and production lead times, and the deferral of certain revenue under our revenue recognition policies.
Our orders levels tend to be more volatile than our revenue, as any change in demand is reflected immediately in orders booked, which are net of cancellations, while revenue, tends to be recognized over multiple quarters because of procurement and production lead times, and the deferral of certain revenue under our revenue recognition policies.
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. 19 Risks related to manufacturing and our supply chain Manufacturing interruptions or delays could affect our ability to meet customer demand and lead to higher costs, while the failure to estimate customer demand accurately could result in excess or obsolete inventory.
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. 16 Risks Related to Manufacturing and Supply Chain Manufacturing interruptions or delays could affect our ability to meet customer demand and lead to higher costs, while the failure to accurately estimate customer demand could result in excess or obsolete inventory.
In turn, any reduction in the availability of these materials and components may reduce our ability to obtain sufficient amounts in a cost-effective manner. We generally do not have guaranteed supply arrangements with our suppliers. Because of the variability and uniqueness of our customer’s orders, we try to avoid maintaining an extensive inventory of materials and components for manufacturing.
In turn, any reduction in the availability of these materials and components may reduce our ability to obtain sufficient amounts in a cost-effective manner. We generally do not have guaranteed supply arrangements with our suppliers. Because of the variability and uniqueness of our customers’ orders, we try to avoid maintaining an extensive inventory of materials and components for manufacturing.
We must be able to introduce these products and product enhancements into the market in a timely manner, in response to customer’s demands for higher-performance research and assembly equipment, customized to address rapid technological advances in capital equipment designs. Technological innovations are inherently complex and require long development cycles and appropriate professional staffing.
We must be able to introduce these products and product enhancements into the market in a timely manner, in response to customers’ demands for higher-performance research and assembly equipment, customized to address rapid technological advances in capital equipment designs. Technological innovations are inherently complex and require long development cycles and appropriate professional staffing.
Any of these factors could depress economic activity and restrict our access to suppliers or customers and could have a material adverse effect on our business, financial condition, and results of operations. 18 Our reputation and operating performance may be negatively affected if our products are not timely delivered.
Any of these factors could depress economic activity and restrict our access to suppliers or customers and could have a material adverse effect on our business, financial condition, and results of operations. 15 Our reputation and operating performance may be negatively affected if our products are not timely delivered.
Our future business success depends on our ability to develop and introduce new products, or new uses for existing products, that successfully address changing customer needs. Our success also depends on our ability to achieve market acceptance of our new products. To maintain our success in the marketplace, we may have to substantially increase our expenditures on research and development.
Our future business success depends on our ability to develop and introduce new products, or new uses for existing products that successfully address changing customer needs. Our success also depends on our ability to achieve market acceptance of our new products. To maintain our success in the marketplace, we may have to substantially increase our expenditure on research and development.
The stock market in general and the market for technology stocks has experienced volatility. If those industry-based market fluctuations continue, the trading price of our common shares could decline significantly independent of the overall market, and shareholders could lose all or a substantial part of their investment.
The stock market in general and the market for technology stocks have experienced volatility. If those industry-based market fluctuations continue, the trading price of our common shares could decline significantly independent of the overall market, and shareholders could lose all or a substantial part of their investment.
Since 2021, we have experienced increased costs on certain components as well as delays in supply chain delivery, which may also impact our ability to recognize revenue and reduce our gross profit margins, as well as extend our manufacturing lead times and reduce our manufacturing efficiencies.
We have experienced increased costs on certain components as well as delays in supply chain delivery, which may also impact on our ability to recognize revenue and reduce our gross profit margins, as well as extend our manufacturing lead times and reduce our manufacturing efficiencies.
The industries in which we operate are characterized by ongoing factors, including: ● global and regional economic developments and conditions including in Europe and Asia; ● governmental budgetary and political constraints; 17 ● changes in the capacity utilization and production volume for research and industrial applications in the markets in which we operate; ● the profitability and capital resources of manufacturers in the markets in which we operate; ● changes in technology; ● the availability of funds for research and development; and ● the effects of supply chain disruptions.
The industries in which we operate are characterized by ongoing factors, including: ● global and regional economic and geopolitical developments and conditions including in Europe, Asia, and Middle East; ● governmental budgetary and political constraints; ● changes in the capacity utilization and production volume for research and industrial applications in the markets in which we operate; ● the profitability and capital resources of manufacturers in the markets in which we operate; ● changes in technology; ● the availability of funds for research and development; and ● the effects of supply chain disruptions.
Since part of our growth strategy is based on sales of research equipment to produce carbon nanotubes and the sale of such materials, the determination that these materials are harmful could adversely affect the expansion of our business. 27 Risk related to our stock The price of our common shares is volatile and could decline significantly.
Since part of our growth strategy is based on sales of research equipment to produce carbon nanotubes and the sale of such materials, the determination that these materials are harmful could adversely affect the expansion of our business. 22 Risks Related to our Stock The price of our common shares is volatile and could decline significantly.
If we are not able to negotiate the necessary licenses on commercially reasonable terms or successfully defend our position, our ability to utilize such intellectual property could substantially inhibit our access to certain markets and our ability to compete in these markets which could have a material adverse effect on our financial position and results of operations. 23 We may be unable to obtain required export licenses for the sale of our products.
If we cannot negotiate the necessary licenses on commercially reasonable terms or successfully defend our position, our ability to utilize such intellectual property could substantially inhibit our access to certain markets and our ability to compete in these markets which could have a material adverse effect on our financial position and results of operations. 19 We may be unable to obtain required export licenses for the sale of our products.
When cyclical fluctuations result in lower-than-expected revenue levels, operating results have been and may continue to be materially adversely affected and cost reduction measures have been and may continue to be necessary for us to remain competitive and financially sound.
When fluctuations in our order levels and backlog result in lower-than-expected revenue levels, operating results have been and may continue to be materially adversely affected, and cost reduction measures have been and may continue to be necessary for us to remain competitive and financially sound.
In the past, we have made acquisitions of other businesses with synergistic products, services and technologies, and plan to continue to do so in the future. 26 Acquisitions involve numerous risks, which include but are not limited to: ● difficulties and increased costs in connection with the integration of the personnel, operations, technologies, services and products of the acquired companies into our existing facilities and operations; ● diversion of management’s attention from other operational matters; ● failure to commercialize the acquired technology; ● the potential loss of key employees of the acquired companies; ● lack of synergy, or inability to realize expected synergies, resulting from the acquisitions; ● the risk that the issuance of our common stock, if any, in an acquisition or merger could be dilutive to our shareholders; ● the inability to obtain and protect intellectual property rights in key technologies; and ● the acquired assets becoming impaired as a result of technological advancements or worse-than-expected performance of the acquired assets.
Acquisitions involve numerous risks, which include but are not limited to: ● difficulties and increased costs in connection with the integration of the personnel, operations, technologies, services and products of the acquired companies into our existing facilities and operations; ● diversion of management’s attention from other operational matters; ● failure to commercialize the acquired technology; ● the potential loss of key employees of the acquired companies; ● lack of synergy, or inability to realize expected synergies, resulting from the acquisitions; ● the risk that the issuance of our common stock, if any, in an acquisition or merger could be dilutive to our shareholders; ● the inability to obtain and protect intellectual property rights in key technologies; and ● the acquired assets becoming impaired as a result of technological advancements or worse-than-expected performance of the acquired assets.
Historically, demand for our equipment and related consumable products have been volatile because of changes in supply and demand, and other factors in the manufacturing process.
Historically, demand for our equipment and related consumable products have been volatile because of changes in supply and demand, our ability to market and sell our products and other factors in the manufacturing process.
For these and other reasons, our results of operations for past periods may not necessarily be indicative of future operating results. Our business might be adversely affected by our dependence on foreign business.
For these and other reasons, demand for our products may fluctuate significantly and, consequently, our results of operations for past periods may not necessarily be indicative of future operating results. Our business might be adversely affected by our dependence on foreign business.
While we have concluded that, as of December 31, 2024, our disclosure and reporting controls were effective as included in Part II, Item 9A, there can be no assurance that material weaknesses will not be identified in the future.
We may, in the future, identify deficiencies in controls over financial reporting. While we have concluded that, as of December 31, 2025, our disclosure and reporting controls were effective as included in Part II, Item 9A, there can be no assurance that material weaknesses will not be identified in the future.
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.
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. 13 Risks Related to Sales and Product Development.
There is current uncertainty about the future relationship between the United States and other countries with respect to trade policies, taxes, government regulations, and tariffs and we cannot predict whether, and to what extent, U.S. trade policies will change in the future, including as a result of changes by the new U.S. presidential administration.
There is current uncertainty about the future relationship between the United States and other countries with respect to trade policies, taxes, government regulations, and tariffs and we cannot predict whether, and to what extent, U.S. trade policies will change in the future.
In addition, if we need to rapidly increase our business and manufacturing capacity to meet increases in demand or expedited shipment schedules, this may exacerbate any interruptions in our manufacturing operations and supply chain and the associated effect on our working capital. 20 Supply chain delays and cost increases that may adversely affect our business, including potential cost increases from the imposition of tariffs.
In addition, if we need to rapidly increase our business and manufacturing capacity to meet increases in demand or expedited shipment schedules, this may exacerbate any interruptions in our manufacturing operations and supply chain and the associated effect on our working capital.
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.
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.
Our failure or inability to comply with existing or future environmental regulations could result in significant remediation liabilities, the imposition of fines or the suspension or termination of development, manufacturing, or use of certain of our products, or affect the operation of our facilities, use or value of our real property, each of which could damage our financial position and results of operations. 24 Regulations related to conflict minerals will force us to incur additional expenses, may make our supply chains more complex, and may result in damage to our relationships with customers.
Our failure or inability to comply with existing or future environmental regulations could result in significant remediation liabilities, the imposition of fines or the suspension or termination of development, manufacturing, or use of certain of our products, or affect the operation of our facilities, use or value of our real property, each of which could damage our financial position and results of operations.
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. 22 Our financial position and results of operations may be materially harmed if we are unable to recoup our investment in research and development.
In addition, breaches of our security measures and the unapproved dissemination of proprietary information or sensitive data about us, our customer, or other third parties, could expose us, our customers, or other third parties to a risk of loss or misuse of this information, resulting in litigation and potential liability for us, damage our reputation, or otherwise harm our business.
While we have an active security training program for all employees during the year, utilize intrusion prevention and detection systems, as well as hardware firewall and virus security, the costs to address the foregoing security problems and security vulnerabilities before or after a cyber-incident could be significant.
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. 18 While we have an active security training program for all employees during the year, utilize intrusion prevention and detection systems, as well as hardware firewall and virus security, the costs to address the foregoing security problems and security vulnerabilities before or after a cyber-incident could be significant.
As part of our long-term strategy, we have pursued acquisitions of other companies or assets, and may pursue future acquisitions of other companies or assets which could potentially increase our assets. Adverse changes in business conditions could materially impact our estimates of future operations and result in impairment charges to these assets.
As part of our long-term strategy, we have pursued acquisitions of other companies or assets, and may pursue future acquisitions of other companies or assets which could potentially increase our assets.
The availability of funds for these purposes may be subject to budgetary and political restrictions, as well as cost-cutting measures by manufacturers in the markets in which we operate.
The availability of funds for these purposes may be subject to budgetary and political restrictions, as well as cost-cutting measures by manufacturers in the markets in which we operate. 14 If the availability of funds or the demand for capital equipment in the markets in which we operate declines, the demand for our products would also decline and our financial position and results of operations could be harmed.
We manage, store, and transmit proprietary information and sensitive data relating to our operations. We may be subject to breaches of the information technology systems we use for these purposes.
We manage, store, and transmit proprietary information and sensitive data relating to our operations. We may be subject to breaches of the information technology systems we use for these purposes. Experienced computer programmers and hackers may be able to penetrate our network security and misappropriate and/or compromise our confidential information (and/or third-party confidential information), create system disruptions, or cause shutdowns.
At certain times, increases in demand for capital equipment can result in longer lead-times for many important system components, which may cause delays in meeting shipments to our customers.
At certain times, increases in demand for capital equipment can result in longer lead-times for many important system components, which may cause delays in meeting shipments to our customers. The delay in the shipment of even a few systems could cause significant variations in our quarterly revenue, operating results and the market value of our common stock.
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.
Acquisitions can result in an increase in our operating costs, divert management’s attention away from other operational matters and expose us to other associated risks. We evaluate potential acquisitions of businesses and technologies, and we consider targeted acquisitions that expand our core competencies to be an important part of our future growth strategy.
These requirements could limit the pool of suppliers that can provide conflict-free minerals, and we may be unable to obtain conflict-free minerals at competitive prices, which could increase our costs and adversely affect our manufacturing operations and our profitability.
These requirements could limit the pool of suppliers that can provide conflict-free minerals, and we may be unable to obtain conflict-free minerals at competitive prices, which could increase our costs and adversely affect our manufacturing operations and our profitability. 20 Risks Related to Financial and Accounting Matters Volatile demand for our products may make it difficult for us to accurately budget our expense levels, which are based in part on our projections of future revenues.
Geopolitical developments across Europe and Asia have and may continue to restrict our ability to procure raw materials and components such as nickel and integrated circuits.
Supply chain delays and cost increases that may adversely affect our business, including potential cost increases from the imposition of tariffs. Geopolitical developments across Europe, Asia and Middle East have and may continue to restrict our ability to procure raw materials and components such as nickel and integrated circuits.
The delay in the shipment of even a few systems could cause significant variations in our quarterly revenue, operating results and the market value of our common stock. 21 Our manufacturing facilities in Central Islip, New York and Saugerties, New York could be affected due to multiple weather risks, including risks to our Central Islip facility from hurricanes and similar phenomena.
Our manufacturing facilities in Central Islip, New York and Saugerties, New York could be affected due to multiple weather risks, including risks to our Central Islip facility from hurricanes and similar phenomena.
We expect that contracts or orders from a relatively limited number of customers will, at times, continue to account for a substantial portion of our business. The mix and type of customers, and sales to any single customer, may vary significantly from quarter to quarter and from year to year.
The loss of a major customer would have to be replaced by others, and our inability to do so may have a material adverse effect on our business and financial condition. We expect that contracts or orders from a relatively limited number of customers will, at times, continue to account for a substantial portion of our business.
In addition, we could issue additional common stock, to fund our growth initiatives and operations which could materially dilute the ownership interests of the then existing shareholders. We may, in the future, identify deficiencies in controls over financial reporting.
If adequate financing is not available when required on commercially reasonable terms, if at all, our business and operations may be materially and adversely affected. In addition, we could issue additional common stock, to fund our growth initiatives and operations which could materially dilute the ownership interests of the then existing shareholders.
Whether and to what extent our customers place orders for any specific products, and the mix and quantities of products included in those orders are factors beyond our control. Insufficient orders would result in under-utilization of our manufacturing facilities and infrastructure and will negatively affect our financial position and results of operations. We might require additional financing.
Insufficient orders would result in under-utilization of our manufacturing facilities and infrastructure and will negatively affect our financial position and results of operations. We might require additional financing. Our continuing operating losses may make it difficult for us to obtain financing on commercially reasonable terms, if at all.
If we fail to respond to these cyclical changes, our business could be seriously harmed. 25 We do not have long-term volume production contracts with our customers, and we do not control the timing or volume of orders placed by our customers.
We do not have long-term volume production contracts with our customers, and we do not control the timing or volume of orders placed by our customers. Whether and to what extent our customers place orders for any specific products, and the mix and quantities of products included in those orders are factors beyond our control.
If the availability of funds or the demand for capital equipment in the markets in which we operate declines, the demand for our products would also decline and our financial position and results of operations could be harmed. The demand for our products and the profitability of our products can change significantly from period to period because of numerous factors.
The demand for our products and the profitability of our products can change significantly from period to period because of numerous factors.
If our assets were impaired, our financial condition and results of operations could be materially and adversely affected. Acquisitions can result in an increase in our operating costs, divert management’s attention away from other operational matters and expose us to other associated risks.
Adverse changes in business conditions could materially impact our estimates of future operations and result in impairment charges to these assets. 21 If our assets were impaired, our financial condition and results of operations could be materially and adversely affected.
Removed
During 2024, one customer represented 29.5% of our total revenues. The loss of a major customer would have to be replaced by others, and our inability to do so may have a material adverse effect on our business and financial condition.
Added
The mix and type of customers, and sales to any single customer, may vary significantly from quarter to quarter and from year to year.
Removed
Experienced computer programmers and hackers may be able to penetrate our network security and misappropriate and/or compromise our confidential information (and or third-party confidential information), create system disruptions, or cause shutdowns.
Added
Our financial position and results of operations may be materially harmed if we are unable to recover our investment in research and development.
Removed
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.
Added
Regulations related to conflict minerals will force us to incur additional expenses, may make our supply chains more complex, and may result in damage to our relationships with customers.
Removed
Risks related to financial and accounting matters 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.
Added
In the past, we have made acquisitions of other businesses with synergistic products, services and technologies, and plan to continue to do so in the future.
Removed
Our continuing operating losses may make it difficult for us to obtain financing on commercially reasonable terms, if at all. If adequate financing is not available when required on commercially reasonable terms, if at all, our business and operations may be materially and adversely affected.
Added
In response to the continued fluctuations in our order rates and the recent decline in the bookings of our CVD Equipment division, we have reduced our workforce during 2025. These actions could result in an increase in future employee turnover or otherwise impact our ability to hire and retain qualified personnel. 23

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe decide whether and how risks from cybersecurity threats have or are reasonably likely to affect our financial position, results of operations, and cash flows under the heading “Risk related to cybersecurity, intellectual property and regulatory compliance,” which is included as part of Item 1A.
Biggest changeWe describe whether and how risks from cybersecurity threats have or are reasonably likely to affect our financial position, results of operations, and cash flows under the heading “Risk related to cybersecurity, intellectual property and regulatory compliance,” which is included as part of Item 1A.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our corporate headquarters, research and development, manufacturing and process coating facilities as of December 31, 2024 are as follows: Owned Locations Size (sf) Segment Mortgage/Loan Principal use Central Islip, NY 128,000 CVD Equipment / MesoScribe No Corporate headquarters; R&D; Manufacturing Saugerties, NY 22,000 SDC No Manufacturing; Administration
Biggest changeItem 2. Properties Our corporate headquarters, research and development, manufacturing and process coating facilities as of December 31, 2025 are as follows: Owned Locations Size (sf) Segment Mortgage/Loan Principal use Central Islip, NY 128,000 CVD Equipment / MesoScribe No Corporate headquarters; R&D; Manufacturing Saugerties, NY 22,000 SDC No Manufacturing; Administration

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 29 Part II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 30 Item 6. [Reserved] 30 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 31 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 39 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 24 Part II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 25 Item 6. [Reserved] 25 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 26 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 32 Item 8.
Financial Statements and Supplementary Data 39 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 39 Item 9A. Controls and Procedures 39 Item 9B. Other Information 40
Financial Statements and Supplementary Data 32 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 32 Item 9A. Controls and Procedures 32 Item 9B. Other Information 33

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeStockholders As of March 18, 2025, there were approximately 55 holders of record and approximately 3,544 beneficial owners of our common stock. Recent Sales of Unregistered Securities None. Issuer Purchases of Equity Securities None.
Biggest changeStockholders As of March 27, 2026, there were approximately 46 holders of record and approximately 4,235 beneficial owners of our common stock. Recent Sales of Unregistered Securities None. Issuer Purchases of Equity Securities None.

Item 7. Management's Discussion & Analysis

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

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Biggest changeDecember 31, 2024 December 31, 2023 Change Percent Revenue $ 26,876 $ 24,109 $ 2,767 11.5 % Cost of revenue 20,545 19,038 1,507 7.9 % Gross profit 6,331 5,071 1,260 24.8 % Operating expenses Research and development 2,627 2,596 31 1.2 % Selling 1,656 1,632 24 1.5 % General and administrative 5,181 5,451 (270 ) (5.0 %) Gain on sales of equipment (717 ) - (717 ) * Loss on disposition of Tantaline - 162 (162 ) * Impairment charge - 111 (111 ) * Total operating expenses 8,747 9,952 (1,205 ) (12.1 %) Operating loss (2,416 ) (4,881 ) 2,465 50.5 % Other income (expense): Interest income 559 577 (18 ) (3.1 %) Interest expense (19 ) (23 ) 4 (17.4 %) Foreign exchange income - 42 (42 ) * Other income 2 91 (89 ) * Total other income, net 542 687 (145 ) (21.1 %) Loss before income tax (1,874 ) (4,194 ) 2,320 (55.3 %) Income tax expense (benefit) 24 (14 ) 38 * Net loss $ (1,898 ) $ (4,180 ) $ 2,282 54.6 % * Not meaningful 33 Revenue December 31, 2024 December 31, 2023 Change Percent CVD Equipment $ 18,288 $ 16,334 $ 1,954 12.0 % SDC 8,444 7,139 1,305 18.3 % MesoScribe 778 722 56 7.8 % Tantaline - 462 (462 ) (100.0 %) Intersegment sales elimination (634 ) (548 ) (86 ) 15.7 % Total $ 26,876 $ 24,109 $ 2,767 11.5 % Our revenue for the year ended December 31, 2024 was $26.9 million compared to $24.1 million for the year ended December 31, 2023, an increase of $2.8 million or 11.5%.
Biggest changeDecember 31, 2025 December 31, 2024 Change Percent Revenue $ 25,786 $ 26,876 $ (1,090 ) (4.1 %) Cost of revenue 18,498 20,825 (2,327 ) (11.2 %) Gross profit 7,288 6,051 1,237 20.4 % Operating expenses Research and development 2,786 2,627 159 6.1 % Selling 1,443 1,656 (213 ) (12.9 %) General and administrative 4,806 4,901 (95 ) (1.9 %) Impairment charges 163 - 163 * Gain on sales of equipment - (717 ) 717 * Total operating expenses 9,198 8,467 731 8.6 % Operating loss (1,910 ) (2,416 ) 506 (20.9 %) Other income (expense): Interest income 341 559 (218 ) (39.0 %) Interest expense (13 ) (19 ) 6 31.6 % Other income - 2 (2 ) * Total other income, net 328 542 (214 ) (39.5 %) Loss before income tax (1,582 ) (1,874 ) 292 15.6 % Income tax expense 3 24 (21 ) * Net loss $ (1,585 ) $ (1,898 ) $ 313 16.5 % * Not meaningful Revenue December 31, 2025 December 31, 2024 Change Percent CVD Equipment $ 18,079 $ 18,288 $ (209 ) (1.1 %) SDC 7,937 8,444 (507 ) (6.0 %) MesoScribe 112 778 (666 ) (85.6 %) Intersegment sales elimination (342 ) (634 ) 292 46.1 % Total $ 25,786 $ 26,876 $ (1,090 ) (4.1 %) Our revenue for the year ended December 31, 2025 was $25.8 million as compared to $26.9 million for the year ended December 31, 2024, a decrease of $1.1 million or 4.1%.
Assets to be disposed of are reported at the lower of their carrying value or net realizable value. It is not possible for us to predict the likelihood of any possible future impairments or, if such an impairment were to occur, the magnitude of any impairment. 38
Assets to be disposed of are reported at the lower of their carrying value or net realizable value. It is not possible for us to predict the likelihood of any possible future impairments or, if such an impairment were to occur, the magnitude of any impairment.
The revenue contributed by our SDC segment for the year ended December 31, 2024 of $7.8 million (net of intersegment sales of $0.6 million) represented 29.1% of overall revenue as compared to $6.7 million (net of intersegment sales of $0.4 million) or 27.8% of overall revenue for the year ended December 31, 2023.
The revenue contributed by our SDC segment for the year ended December 31, 2025 of $7.6 million (net of intersegment sales of $0.3 million) represented 29.5% of overall revenue as compared to $7.8 million (net of intersegment sales of $0.6 million) or 29.1% of overall revenue for the year ended December 31, 2024.
We consider an accounting estimate to be critical if: (1) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (2) changes in the estimate that are reasonably likely to occur from period to period, or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. 37 We consider the following estimates within our significant accounting policies to be critical because of their complexity and the high degree of judgment involved in maintaining them.
We consider an accounting estimate to be critical if: (1) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (2) changes in the estimate that are reasonably likely to occur from period to period, or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations.
Gain on Sales of Equipment During 2024, we recognized a gain of $0.6 million on the sale of equipment related to MesoScribe representing the sale price of $0.8 million less the costs of the equipment sold of $0.2 million.
Gain on Sales of Equipment During 2024, we recognized a gain of $0.6 million on the sale of equipment related to MesoScribe representing the sale price of $0.8 million less the costs of the equipment sold of $0.2 million. We also recognized a gain of $42,000 on the sale of equipment by our CVD Equipment segment.
If we do not estimate the total sales, related costs, and progress toward completion on such contracts, the estimated gross margins may be significantly impacted, or losses may need to be recognized in future periods. Any such resulting changes in margins or contract losses could be material to our results of operations and financial condition.
If we do not estimate the total sales, related costs, and progress toward completion on such contracts, the estimated gross margins may be significantly impacted, or losses may need to be recognized in future periods.
See Note 2 – “Summary of Significant Accounting Policies” of our Consolidated Financial Statements for additional information regarding our accounting policies Revenue Recognition We design, manufacture, and sell custom chemical vapor deposition equipment through contractual agreements. These system sales require us to deliver functioning equipment that is generally completed within two to eighteen months from commencement of order acceptance.
Revenue Recognition We design, manufacture, and sell custom chemical vapor deposition equipment through contractual agreements. These system sales require us to deliver functioning equipment that is generally completed within two to eighteen months from commencement of order acceptance.
Net cash used in operating activities during 2024 was $1.5 million and was principally due to the net loss of $1.9 million and reductions in contract assets and liabilities of $2.4 million, offset by a reduction in inventory of $0.6 million, and non-cash items of $2.6 million including a provision for excess and obsolete inventory of $1.6 million.
Net cash used in operating activities during 2025 was $3.7 million and was principally due to the net loss of $1.6 million and net increase in contract assets and liabilities of $3.5 million, offset by a reduction in inventory of $0.5 million, and non-cash items of $1.6 million.
Our order backlog at December 31, 2024 was approximately $19.4 million as compared to December 31, 2023 of $18.4 million. Our order backlog at December 31, 2024 consists of approximately $17.4 million related to remaining performance obligations of contracts in progress and not yet started and the balance of approximately $1.9 million represents other orders received from customers.
Our order backlog at December 31, 2025 consists of approximately $4.9 million related to remaining performance obligations of contracts in progress and not yet started and the balance of approximately $1.7 million represents other orders received from customers. As of December 31, 2025, one aerospace customer represented 29.4% of our backlog and one industrial customer represented 15.4% of our backlog.
We have commenced placing orders with more lead time to help mitigate the manufacturing delays, as well as assessing other suppliers or components to attempt to mitigate the potential cost impacts. In addition, we are utilizing our in-house flexible manufacturing to attempt to further mitigate both potential schedule delivery delays and material cost increase.
We have commenced placing orders with more lead time to help mitigate the manufacturing delays, as well as assessing other suppliers or components to attempt to mitigate the potential cost impacts.
Long-Lived Assets Long-lived assets consist primarily of property, plant and equipment. Long-lived assets are reviewed for impairment whenever events or circumstances indicate their carrying value may not be recoverable.
Any such resulting changes in margins or contract losses could be material to our results of operations and financial condition. 31 Long-Lived Assets Long-lived assets consist primarily of property, plant and equipment. Long-lived assets are reviewed for impairment whenever events or circumstances indicate their carrying value may not be recoverable.
The revenue contributed by our MesoScribe segment for the year ended December 31, 2024 of $0.8 represented 2.9% of our overall revenue as compared to $0.7 million or 3.0% of overall revenue for the year ended December 31, 2023. MesoScribe fulfilled its final orders during 2024 and ceased operations.
External revenue for our SDC segment decreased by $0.2 million or 2.6%. The revenue contributed by our MesoScribe segment for the year ended December 31, 2025 of $0.1 represented 0.4% of our overall revenue as compared to $0.8 million or 2.9% of overall revenue for the year ended December 31, 2024.
To remain competitive in the acquisition and retention of our employees, we have reviewed and adjusted salaries and implemented bonus incentives to mitigate the potential negative impacts of inflation on our employees.
To remain competitive in the acquisition and retention of our employees, we have reviewed and adjusted salaries and implemented bonus incentives to mitigate the potential negative impacts of inflation on our employees. Any significant increases in tariffs on goods that we purchase could negatively affect our business and results of operations by increasing the cost to manufacture our products.
We have generally gained new customers through our industry reputation, as well as print advertising and trade show attendance. We have increased the number of trade shows and industry conferences we attend. Historically, our orders have fluctuated based on end user market conditions, adoption of our new products and acceptance of our products.
We plan to evaluate the market conditions and opportunities to expand our product offerings in the power electronics market. We have generally gained new customers through our industry reputation, as well as print advertising and trade show attendance. We have increased the number of trade shows and industry conferences we attend.
General and Administrative General and administrative expenses for the year ended December 31, 2024 were $5.2 million or 19.3% of revenue compared to $5.4 million or 22.6% of revenue for the year ended December 31, 2023, a decrease of $0.3 million. The decrease in 2024 was due to lower employee compensation and lower professional fees.
General and Administrative General and administrative expenses for the year ended December 31, 2025 were $4.8 million or 18.6% of revenue compared to $4.9 million or 18.2% of revenue for the year ended December 31, 2024, a decrease of $0.1 million.
The increase in revenue versus the prior year period was primarily attributable to higher revenue of $1.9 million from our CVD Equipment segment and a $1.3 million increase in revenue from our SDC segment, offset by lower Tantaline revenues of $0.5 million that was sold in May 2023.
The decrease in revenue versus the prior year period was primarily attributable to lower revenue of $0.2 million from our CVD Equipment segment, a $0.5 million decrease in revenue from our SDC segment and $0.7 million lower MesoScribe revenues which ceased operations in 2024.
The revenue contributed by our CVD Equipment segment for the year ended December 31, 2024 of $18.3 million represented 68.1% of overall revenue as compared to $16.2 million (net of intersegment sales of $0.1 million) or 67.8% of overall revenue for the year ended December 31, 2023.
Revenue from two customers for the year ended December 31, 2025 represented 27.6% and 13.7% of our consolidated revenues and 39.5% and 19.6% of CVD Equipment segment revenues, respectively. 28 The revenue contributed by our CVD Equipment segment for the year ended December 31, 2025 of $18.1 million (net of intersegment revenue of $23,000) represented 70.0% of overall revenue as compared to $18.3 million (net of intersegment revenue of $8,000) or 68.0% of overall revenue for the year ended December 31, 2024.
The order rate as well as other factors in our manufacturing process ultimately impacts the timing of revenue recognition, whether accounted for over time or at a point in time. Accordingly, orders received from customers and the corresponding revenue recognized may fluctuate from quarter to quarter.
Historically, our revenues and orders have fluctuated based on changes in order rate and demand as well as factors in our manufacturing process that impacts the timing of revenue recognition. Accordingly, orders received from customers and revenue recognized may fluctuate from quarter to quarter.
Net cash provided by investing activities for the year ended December 31, 2024 consisted of proceeds from the sales of equipment of $0.2 million offset by capital expenditures of $0.1 million. Net cash used in financing activities for the year ended December 31, 2024 consisted of repayments of $0.1 million for an equipment loan.
Net cash used in investing activities for the year ended December 31, 2025 of $0.1 million consisted of purchases of equipment and investment in captive insurance company. 30 Net cash used in financing activities for the year ended December 31, 2025 consisted of repayments of $0.1 million for an equipment loan.
The increase in gross profit of $1.3 million was primarily due to higher revenues as well as improved margins on CVD contracts in progress and final MesoScribe sales that was partially offset by a $1.3 million non-cash charge to reduce certain PVT inventory to net realizable value.
The increase in gross profit of $1.2 million was primarily due to higher gross margin for CVD Equipment due principally to a $1.6 million non-cash charge in 2024 to reduce certain inventory to net realizable value. This was offset by lower gross margins at our SDC and MesoScribe segments due principally to lower revenues.
Research and Development For the year ended December 31, 2024, research and development expenses were $2.6 million, or 9.8% of revenue as compared to $2.6 million, or 10.8% for the year ended December 31, 2023. There were no significant changes in research and development expenses as compared to the prior year.
Research and Development For the year ended December 31, 2025, research and development expenses were $2.8 million, or 10.8% of revenue as compared to $2.6 million, or 9.8% for the year ended December 31, 2024. The increase was due to less time charged to contracts in progress partially offset by lower personnel costs.
Selling Selling expenses were $1.7 million or 6.2% of the revenue for the year ended December 31, 2024 as compared to $1.6 million or 6.8% for the year ended December 31, 2023. There were no significant changes in selling expenses as compared to the prior year.
Selling Selling expenses were $1.4 million or 5.6% of the revenue for the year ended December 31, 2025 as compared to $1.7 million or 6.2% for the year ended December 31, 2024. The decrease was primarily due to lower personnel costs.
Accordingly, orders received from customers and revenue recognized may fluctuate from quarter to quarter. 34 Gross Profit Gross profit for the year ended December 31, 2024 amounted to $6.3 million, with a gross profit margin of 23.6%, compared to a gross profit of $5.1 million and a gross profit margin of 21.0% for the year ended December 31, 2023.
Gross Profit Gross profit for the year ended December 31, 2025 amounted to $7.3 million, with a gross profit margin of 28.3%, compared to a gross profit of $6.1 million and a gross profit margin of 22.5% for the year ended December 31, 2024.
Other income is principally interest income on treasury bills. Income Taxes Income tax expense (benefit) for the years ended December 31, 2024 and 2023, was $24,000 and $(14,000) respectively.
Other Income, Net Other income (expense) consists principally of interest income on U.S. treasury securities and was lower than the prior year quarter due to less funds available for investment and lower interest rates. Income Taxes Income tax expense for the years ended December 31, 2025 and 2024, was $3,000 and $24,000 respectively.
Our cash and cash equivalents at December 31, 2024 and 2023 were $12.6 million and $14.0 million, respectively.
Liquidity and Capital Resources As of December 31, 2025, we had aggregate working capital of $14.1 million compared to aggregate working capital of $13.8 million at December 31, 2024. Our cash and cash equivalents at December 31, 2025 and 2024 were $8.7 million and $12.6 million, respectively.
During 2024: ● Revenue increased by $2.8 million or 11.5% as compared to the prior year due to increases in revenues from aerospace and industrial contracts in progress and our SDC segment that was partially offset by lower revenues of spare parts and lower revenues from Tantaline that was sold in May 2023. ● Gross margin increased by $1.3 million or 24.8% as compared to the prior year due to higher revenues and improved margins on contracts in process offset by a $1.3 million non-cash charge to reduce certain PVT inventory to net realizable value. ● Total bookings for 2024 were approximately $28.1 million as compared to $25.8 million in 2023, an increase of $2.3 million or 8.9%. ● Bookings in 2024 included a $10.0 million multisystem order from an industrial customer that will be used to deposit a silicon carbide protective coating on OEM components. ● Bookings in 2024 also included a $3.5 million order from a major aerospace company for the production of CVI systems.
During 2025: ● Revenue decreased by $1.1 million or 4.1% as compared to the prior year due to decreases in revenues from aerospace and industrial contracts in progress in our CVD segment, lower revenues in our SDC segment and the lower revenues related to the ceasing of MesoScribe’s operations. ● Gross profit increased by $1.2 million or 20.4% as compared to the prior year due principally to a $1.6 million non-cash charge in 2024 to reduce certain inventory to net realizable value. ● Total bookings for 2025 were approximately $13.0 million as compared to $28.1 million in 2024.
The increase in external revenues of $2.1 million or 11.3% resulted principally from increases in revenues from aerospace and industrial contracts in progress offset in part by lower revenue for PVT150/200 systems and spare parts.
The decrease in external revenues of $0.2 million or 1.2% resulted principally from lower system revenues due to lower orders during 2025 offset by higher non-system revenues, principally spare parts.
We shipped this unit to the customer in the third quarter of 2024. Both technologies are essential for the support of the EV market. These systems should provide us with standard product offerings to continue to support the EV focused market as well as energy storage, power conversion and power transmission.
Our PVT systems may provide us with standard product offerings to continue to support the EV focused market as well as energy storage, power conversion and power transmission. In addition, SiC semiconductors specifically help address the need for high energy efficiency and power density in the AC-DC stage in power supply units for AI data centers.
The order cycle to manufacture and test a system also will vary from six to eighteen months for our CVD Equipment segment and two to twelve months for our SDC segment, depending on system complexity and magnitude of the system. 32 Results of Operations Years Ended December 31, 2024 and 2023 The following table presents revenue and expense line items reported in our Consolidated Statements of Operations for the years ended December 31, 2024, and 2023 and the period-over-period dollar and percentage changes for those line items (in thousands, except percentages).
The impact on our business related to these or any other tariffs that may be imposed, is uncertain and depends on multiple factors, including the duration and expansion of current tariffs, future changes to tariff rates, scope or enforcement, retaliatory measures by impacted trade partners, and related inflationary effects. 27 Results of Operations Years Ended December 31, 2025, and 2024 The following table presents revenue and expense line items reported in our Consolidated Statements of Operations for the years ended December 31, 2025, and 2024 and the period-over-period dollar and percentage changes for those line items (in thousands, except percentages).
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This is the fifth system purchased by this customer that will be used by our customer to manufacture CMCs for their gas turbine jet engines. ● Our backlog increased from $18.4 million to $19.4 million, an increase of $0.8 million or 4.9%. ● Cash balance at December 31, 2024 was $12.6 million as compared to $14.0 million at December 31, 2023 31 Business Update Our core strategy is to focus on growth end markets in applications related to aerospace, microelectronics including markets related to the “electrification of everything,” and industrial applications.
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The decrease in bookings of $15.1 million was related to a decrease in orders for systems in our CVD Equipment segment due in part to macroeconomic issues associated with tariffs, reduction in university funding and the U.S. government shutdown during 2025. ● Our backlog declined from $19.4 million to $6.6 million due to the reduction in bookings, a decrease of $12.8 million or 66.0%. ● Cash balance at December 31, 2025 was $8.7 million as compared to $12.6 million at December 31, 2024 Business Update On March 23, 2026, we entered into a definitive agreement under which our SDC business division will be sold to a subsidiary of the Atlas Copco Group.
Removed
The phrase “electrification of everything” refers to the shift from fossil fuels to the use of electricity to power devices, buildings, electric vehicles (“EVs”), and many other applications. Our current strategy yielded multisystem orders of PVT150 equipment in 2023 and 2022 that were delivered to one company that planned to use our systems to manufacture silicon carbide wafers.
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The purchase price amounts to approximately $16.9 million in cash, subject to certain purchase price adjustments. The transaction is expected to close during the second quarter of 2026, subject to customary closing conditions. We expect to use the proceeds from the transaction to enhance financial flexibility and support initiatives aimed at creating shareholder value.
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Although we continue to invest in our vision for the “electrification of everything,” we have observed lower-than-anticipated industrywide electric vehicle sales which may reduce demand for silicon carbide and impact sales of our PVT systems. In addition, the current global over capacity of 150 mm silicon carbide wafers has reduced the market for 150 mm silicon carbide growth systems.
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The expected net cash proceeds after payment of transaction expenses and taxes are approximately $15.0 million, of which $900,000 will be held in escrow to cover post-closing adjustments and indemnification obligations under the agreement.
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In February 2024, we received an order from an additional customer for our new PVT200 system used to grow silicon carbide crystals for the manufacture of 200 mm wafers. This represents our second customer for our PVT equipment. This customer plans to evaluate our equipment for potential additional purchases of PVT equipment.
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CVD will retain ownership of its Saugerties, New York facility, which will be leased to the acquiring company for an initial term of two years following the closing of the transaction.
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We plan to evaluate opportunities to expand our product offerings in the power electronics market to build off the introduction of the PVT150 and PVT200 systems. We are also evaluating our ability to provide other equipment used in the manufacturing process of silicon carbide wafers.
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On November 6, 2025, our Board of Directors approved a comprehensive strategy to transform our Company in response to the continued fluctuations in our order rates and the recent decline in the bookings of our CVD Equipment division.
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During 2022, we also received an order from an aerospace company for a production chemical vapor infiltration (CVI) system that will be used to manufacture CMCs for gas turbine jet engines.
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As part of this strategy, we transitioned our operating model for our CVD Equipment business from vertically integrated fabrication to outsourced fabrication of certain components to reduce our fixed operating costs.
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In 2023, we received an order from the same aerospace company for an additional three CVI systems and in November 2024 we received an order from the same aerospace company for an additional CVI system.
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The transformation strategy also includes the exploration of strategic alternatives for businesses and product lines, including the potential sale or divestiture of assets or business lines. 26 We completed the workforce reduction plan during the fourth quarter of 2025 and incurred approximately $0.1 million in severance and other charges.
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In February 2024, we received a multisystem order from an industrial customer for approximately $10.0 million that will be used for depositing a silicon carbide protective coating on OEM components and the units are expected to be delivered over 18 to 24 months period.
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As of December 31, 2025, the Company classified certain manufacturing equipment as held for sale with a fair value of $0.5 million based on an agreement the Company entered into in January 2026 with a third-party to sell the equipment for this amount.
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The sales cycle for our equipment is typically six months, but can range up to twelve to eighteen months, depending on the application and product stage of the equipment.
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The Company recorded an impairment charge of $0.2 million related to this equipment and related capitalized software during the year ended December 31, 2025. Our core strategy remains focused on serving key markets related to aerospace, microelectronics/power electronics and industrial applications.
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Revenue from one aerospace customer for the year ended December 31, 2024 represented 29.5% of our total revenues and 43.4% of CVD Equipment segment revenues.
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In October 2025, we received an order for two PVT150™ units from Stony Brook University (SBU) for their new semiconductor research center - onsemi Silicon Carbide Crystal Growth Center.
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External revenue for our SDC segment increased by $1.1 million or 16.4% due to higher demand for gas delivery system products as compared to the prior period.
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The recently launched research center will enable SBU faculty, scientists, and students to conduct research on silicon carbide crystal growth and other wide band gap (WBG) materials and device-enabling technologies critical to improving energy efficiency in power semiconductors and foster the next generation of skilled professionals in this field.
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As of December 31, 2024, one industrial customer represented 41.8% of our backlog and one aerospace customer represented 27.1% of our backlog. Historically, our revenues and orders have fluctuated based on changes in order rate as well as other factors in our manufacturing process that impacts the timing of revenue recognition.
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Our PVT reactor design and control system architecture allows for precise process and temperature control enabling run-to-run repeatability and system-to-system matching. The PVT system platform is also being considered to process other WBG materials such as aluminum nitride (AlN) to support the development of emerging, high performance semiconductor materials.
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We also recognized a gain of $42,000 on the sale of equipment by our CVD Equipment. 35 Loss on Disposition of Tantaline This expense of $162,000 represents the net loss on the sale of our Tantaline subsidiary including professional fees. This disposition was completed in 2023.
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The global economy continues to confront the impacts of recent executive orders by the U.S. federal administration regarding tariffs on imports from various countries including the European Union, Canada, Mexico, and China and the potential impact of actions taken by other countries in response to the announced tariffs. Tariffs may make our products less cost competitive and reduce gross margins.
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Impairment Charge This expense represents the loss on the impairment of certain assets of MesoScribe based on the decision to wind down its operations made in 2023. Other Income, Net Other income, net was $0.5 million for the year ended December 31, 2024 as compared to other income, net of $0.7 million for the year ended December 31, 2023.
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MesoScribe fulfilled its final orders during 2024 and ceased operations. Revenue in 2025 was principally a license fee. Our order backlog at December 31, 2025 was approximately $6.6 million as compared to December 31, 2024 of $19.4 million.
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Any significant increases in tariffs on goods that we purchase could negatively affect our business and results of operations by increasing the cost to manufacture our products. 36 Liquidity and Capital Resources As of December 31, 2024, we had aggregate working capital of $13.9 million compared to aggregate working capital of $14.3 million at December 31, 2023.
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The decrease in 2025 was due to lower employee compensation and lower professional fees. 29 Impairment Charge At December 31, 2025, we classified certain excess manufacturing equipment as held for sale with a fair value of $0.5 million based on an agreement with a third-party to sell the equipment for this amount.
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The Company recorded an impairment charge of $0.2 million related to this equipment and related capitalized software during the year ended December 31, 2025.

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