Form 8-K - Current report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

Current Report

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

Date of Report (Date of earliest event reported): July 31, 2024

CPS TECHNOLOGIES CORP.
(Exact Name of Registrant as Specified in its Charter)

Delaware	0-16088	04-2832509
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

111 South Worcester Street, Norton, Massachusetts	02766
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code

508-222-0614

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4( c)) under the Exchange Act (17 CFR 240.13e-4(c)).

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

☐ Emerging growth company

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

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	CPSH	Nasdaq Capital Market

Item 2.02 Results of Operations and Financial Condition

On July 31, 2024, the Company issued a press release announcing its financial results for the quarter and six months ended June 29, 2024. A copy of the press release is attached hereto as Exhibit 99 and is incorporated herein in its entirety by reference.

The information in this Item 2.02, including Exhibit 99.1 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (The “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Cautionary Note Regarding Forward-Looking Statements.
Except for historical information contained in the press release attached as an exhibit hereto, the press release contains forward-looking statements which involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements. Please refer to the cautionary note in the press release regarding these forward-looking statements.

Item 8.01 Other Events

Exhibit 99.2 is incorporated herein in its entirety by reference.

Item 9.01 Financial Statements and Exhibits

EXHIBIT NUMBER	DESCRIPTION
99.1	Press release dated July 31, 2024 of CPS Technologies Corp. announcing its financial results for the quarter and six months ended June 29, 2024
99.2	Financial results for the quarter and six months ended June 29, 2024
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

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

CPS Technologies Corp. (Registrant)
Date: August 1, 2024	/s/ Charles K. Griffith, Jr. Charles K. Griffith Jr. Chief Financial Officer

Exhibit 99.1

FOR RELEASE: IMMEDIATE

CPS Technologies Corporation Announces Second Quarter 2024 Financial Results

Performance Impacted by Contract Completion as Company Focuses on New Business Development

Norton, Massachusetts – July 31, 2024 – CPS Technologies Corporation (NASDAQ:CPSH) (“CPS” or the “Company”) today announced financial results for the fiscal second quarter ended June 29, 2024.

Second Quarter Summary

●

Revenue of $5.0 million for the second quarter of 2024 versus $7.4 million in the prior-year period, reflecting lower overall shipments due to the end of the Company’s HybridTech Armor® contract with Kinetic Protection for the US Navy

●

Gross margin of (4.6) percent versus 29.6 percent in the second quarter of 2023, largely reflecting lower manufacturing efficiencies and impact of fixed costs on lower revenue.

●

Operating loss of $1.3 million for the quarter ended June 29, 2024 compared to an operating profit of $0.7 million in the prior-year period

●

The Company’s recent SBIR Phase II award and ongoing product development initiatives in response to customer requirements point to accelerating wins heading into fiscal 2025

“This quarter’s results reflect the previously-announced completion of our HybridTech® Armor contract with Kinetic Protection, as the Navy’s current needs have been fulfilled after many quarters of delivering our state-of-the-art panels to provide ballistic protection for the U.S. Navy’s fleet of aircraft carriers,” said Brian Mackey, President and CEO. “While this near-term headwind has been well known for quite some time, it does not lessen the impact it has had on our overall performance. Despite the current operating environment, our growth path going forward will be augmented by the continued expansion of our product development pipeline.

“Notably, our latest SBIR contract from the U.S. Navy Air Systems Command, valued at over $1 million, will enable us to continue to develop our novel metal matrix composites for thermal energy storage applications. Our MMCs have been shown to provide cutting-edge thermal energy storage, which supports long-range missile strike capability for the Navy. Potential applications include avionics, weapons, and high-pulse power modules. This new program, along with ongoing efforts to address our customer’s pressing technical challenges, with materials such as fiber reinforced aluminum, or “FRA”, and lightweight radiation shielding material, will continue to enhance company value. Our new Phase II contract, the company’s first in many years, clearly underscores not only our unique capabilities but the successful execution of a long-term growth strategy through expanded product development that addresses critical customer requirements.”

Results of Operations

CPS reported revenue of $5.0 million in the second quarter of fiscal 2024 versus $7.4 million in the prior-year period, reflecting the completion of the Company’s HybridTech Armor® contract with Kinetic Protection, the prime contractor for the US Navy. Gross loss was $0.2 million, or (4.6) percent of revenue, versus a gross profit of $2.2 million, or 29.6 percent of revenue, in the fiscal 2023 second quarter, with the negative variance year-over-year due to the impact of fixed costs on lower overall revenue and reduced production efficiencies due to new product launches.

Page 2

The Company reported an operating loss of $1.3 million in the fiscal 2024 second quarter compared with an operating profit of $0.7 million in the prior-year period. Reported net loss was $1.0 million, or $(0.07) per diluted share, versus net income of $0.6 million, or $0.04 per diluted share, in the quarter ended July 1, 2023.

Conference Call

The Company will be hosting its second quarter 2024 earnings call at 9:00 am tomorrow, August 1, 2024. Those interested in participating in the conference call should dial the following:

Call in Number: 1-844-943-2942

Participant Passcode: 281331

The Company encourages those who wish to participate to call in 10 minutes before the scheduled start time to ensure the operator can connect all participants.

About CPS

CPS is a technology and manufacturing leader in producing high-performance materials solutions for its customers. The company’s products and intellectual property address critical needs in a variety of applications, including electric trains and subway cars, wind turbines, hybrid vehicles, electric vehicles, Navy ships, the smart electric grid, 5G infrastructure and others. CPS hermetic packages can be found in many Aerospace and Satellite applications. CPS’ armor products provide exceptional ballistic protection and environmental durability at very light weight. CPS is committed to innovation and to supporting our customers in building solutions for the transition to clean energy.

Safe Harbor

Statements made in this document that are not historical facts or which apply prospectively, including those relating to 2024 financial results, are forward-looking statements that involve risks and uncertainties. These forward-looking statements are identified by the use of terms and phrases such as "will," "intends," "believes," "expects," "plans," "anticipates" and similar expressions. Investors should not rely on forward looking statements because they are subject to a variety of risks and uncertainties and other factors that could cause actual results to differ materially from the company's expectation. Additional information concerning risk factors is contained from time to time in the company's SEC filings, including its Annual Report on Form 10-K and other periodic reports filed with the SEC. Forward-looking statements contained in this press release speak only as of the date of this release. Subsequent events or circumstances occurring after such date may render these statements incomplete or out of date. The company expressly disclaims any obligation to update the information contained in this release.

CPS Technologies Corporation
111 South Worcester Street
Norton, MA 02766

www.cpstechnologysolutions.com

Investor Relations:

Chris Witty

646-438-9385

cwitty@darrowir.com

Page 3

CPS TECHNOLOGIES CORP.

Statements of Operations and Other Comprehensive Income (Unaudited)

	Three Months Ended					Six Months Ended
	June 29,			July 1,		June 29,			July 1,
	2024			2023		2024			2023
Revenues:
Product sales	$	5,030,313		$	7,418,138	$	10,942,947		$	14,518,405

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

Cost of product sales		5,260,305			5,221,880		10,266,629			10,077,444

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

Selling, general, and administrative expense		1,084,995			1,465,349		2,250,917			3,015,871

Income (loss) from operations		(1,314,987	)		730,910		(1,574,599	)		1,425,090

Interest income (expense), net		90,851			79,652		170,021			95,242

Net income (loss) before income tax		(1,224,136	)		810,562		(1,404,578	)		1,520,332
Income tax provision (benefit)		(269,832	)		210,058		(307,120	)		460,628

Net income (loss)	$	(954,304	)	$	600,503	$	(1,097,458	)	$	1,059,704
Other comprehensive income
Net unrealized gains on available for sale securities		8,701			--		8,701			--
Total other comprehensive income		8,701			--		8,701			--
Total comprehensive income		(945,603	)		--		(1,088,757	)		--

Net income per basic common share	$	(0.07	)	$	0.04	$	(0.08	)	$	0.07

Weighted average number of basic common shares outstanding		14,519,215			14,493,970		14,519,215			14,473,128

Net income per diluted common share	$	(0.07	)	$	0.04	$	(0.08	)	$	0.07

Weighted average number of diluted common shares outstanding		14,519,215			14,621,929		14,519,215			14,630,765

Page 4

CPS TECHNOLOGIES CORP.

Balance Sheets (Unaudited)

	June 29,			December 30,
	2024			2023
ASSETS

Current assets:
Cash and cash equivalents	$	6,306,244		$	8,813,626
Marketable Securities		758,701			--
Accounts receivable-trade, net		4,064,293			4,389,155
Accounts receivable-other		198,348			83,191
Inventories, net		4,121,678			4,581,930
Prepaid expenses and other current assets		366,655			276,349

Total current assets		15,815,919			18,144,251

Property and equipment:
Production equipment		9,940,480			11,271,982
Furniture and office equipment		891,921			952,883
Leasehold improvements		873,730			985,649

Total cost		11,706,131			13,210,514

Accumulated depreciation and amortization		(10,068,557	)		(11,936,004	)
Construction in progress		496,331			281,629

Net property and equipment		2,133,905			1,556,139

Right-of-use lease asset		261,000			332,000
Deferred taxes, net		1,877,302			1,569,726

Total assets	$	20,088,126		$	21,602,116

Page 5

CPS TECHNOLOGIES CORP.

Balance Sheets (Unaudited)

(concluded)

	June 29,			December 30,
	2024			2023
LIABILITIES AND STOCKHOLDERS` EQUITY

Current liabilities:
Note payable, current portion	$	31,885		$	46,797
Accounts payable		2,587,874			2,535,086
Accrued expenses		671,853			1,075,137
Deferred revenue		65,578			251,755
Lease liability, current portion		160,000			160,000

Total current liabilities		3,517,190			4,068,775

Note payable less current portion		--			8,090
Deferred revenue – long term		31,277			31,277
Long term lease liability		101,000			172,000

Total liabilities		3,649,467			4,280,142

Commitments and contingencies (note 6)

Stockholders` equity:
Common stock, $0.01 par value, authorized 20,000,000 shares; issued 14,601,487 shares; outstanding 14,519,215 shares at each June 29, 2024 and December 30, 2023		146,015			146,015
Additional paid-in capital		40,386,335			40,180,893
Accumulated other comprehensive income		8,701			--
Accumulated deficit		(23,852,254	)		(22,754,796	)
Less cost of 82,272 common shares repurchased at each June 29, 2024 and December 30, 2023		(250,138	)		(250,138	)

Total stockholders` equity		16,438,659			17,321,974

Total liabilities and stockholders` equity	$	20,088,126		$	21,602,116

Exhibit 99.2

CPS TECHNOLOGIES CORP.

Statements of Operations and Other Comprehensive Income (Unaudited

	Three Months Ended					Six Months Ended
	June 29,			July 1,		June 29,			July 1,
	2024			2023		2024			2023
Revenues:
Product sales	$	5,030,313		$	7,418,138	$	10,942,947		$	14,518,405

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

Cost of product sales		5,260,305			5,221,880		10,266,629			10,077,444

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

Selling, general, and administrative expense		1,084,995			1,465,349		2,250,917			3,015,871

Income (loss) from operations		(1,314,987	)		730,910		(1,574,599	)		1,425,090

Interest income (expense), net		90,851			79,652		170,021			95,242

Net income (loss) before income tax		(1,224,136	)		810,562		(1,404,578	)		1,520,332
Income tax provision (benefit)		(269,832	)		210,058		(307,120	)		460,628

Net income (loss)	$	(954,304	)	$	600,503	$	(1,097,458	)	$	1,059,704
Other comprehensive income
Net unrealized gains on available for sale securities		8,701			--		8,701			--
Total other comprehensive income		8,701			--		8,701			--
Total comprehensive income		(945,603	)		--		(1,088,757	)		--

Net income per basic common share	$	(0.07	)	$	0.04	$	(0.08	)	$	0.07

Weighted average number of basic common shares outstanding		14,519,215			14,493,970		14,519,215			14,473,128

Net income per diluted common share	$	(0.07	)	$	0.04	$	(0.08	)	$	0.07

Weighted average number of diluted common shares outstanding		14,519,215			14,621,929		14,519,215			14,630,765

Page 2

CPS TECHNOLOGIES CORP.

Balance Sheets (Unaudited)

	June 29,			December 30,
	2024			2023
ASSETS

Current assets:
Cash and cash equivalents	$	6,306,244		$	8,813,626
Marketable Securities		758,701			--
Accounts receivable-trade, net		4,064,293			4,389,155
Accounts receivable-other		198,348			83,191
Inventories, net		4,121,678			4,581,930
Prepaid expenses and other current assets		366,655			276,349

Total current assets		15,815,919			18,144,251

Property and equipment:
Production equipment		9,940,480			11,271,982
Furniture and office equipment		891,921			952,883
Leasehold improvements		873,730			985,649

Total cost		11,706,131			13,210,514

Accumulated depreciation and amortization		(10,068,557	)		(11,936,004	)
Construction in progress		496,331			281,629

Net property and equipment		2,133,905			1,556,139

Right-of-use lease asset		261,000			332,000
Deferred taxes, net		1,877,302			1,569,726

Total assets	$	20,088,126		$	21,602,116

Page 3

CPS TECHNOLOGIES CORP.

Balance Sheets (Unaudited)

(concluded)

	June 29,			December 30,
	2024			2023
LIABILITIES AND STOCKHOLDERS` EQUITY

Current liabilities:
Note payable, current portion	$	31,885		$	46,797
Accounts payable		2,587,874			2,535,086
Accrued expenses		671,853			1,075,137
Deferred revenue		65,578			251,755
Lease liability, current portion		160,000			160,000

Total current liabilities		3,517,190			4,068,775

Note payable less current portion		--			8,090
Deferred revenue – long term		31,277			31,277
Long term lease liability		101,000			172,000

Total liabilities		3,649,467			4,280,142

Commitments and contingencies (note 6)

Stockholders` equity:
Common stock, $0.01 par value, authorized 20,000,000 shares; issued 14,601,487 shares; outstanding 14,519,215 shares at each June 29, 2024 and December 30, 2023		146,015			146,015
Additional paid-in capital		40,386,335			40,180,893
Accumulated other comprehensive income		8,701			--
Accumulated deficit		(23,852,254	)		(22,754,796	)
Less cost of 82,272 common shares repurchased at each June 29, 2024 and December 30, 2023		(250,138	)		(250,138	)

Total stockholders` equity		16,438,659			17,321,974

Total liabilities and stockholders` equity	$	20,088,126		$	21,602,116

Document And Entity Information	Jul. 31, 2024
Document Information [Line Items]
Entity, Registrant Name	CPS TECHNOLOGIES CORP.
Document, Type	8-K
Document, Period End Date	Jul. 31, 2024
Entity, Incorporation, State or Country Code	DE
Entity, File Number	0-16088
Entity, Tax Identification Number	04-2832509
Entity, Address, Address Line One	111 South Worcester Street
Entity, Address, City or Town	Norton
Entity, Address, State or Province	MA
Entity, Address, Postal Zip Code	02766
City Area Code	508
Local Phone Number	222-0614
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity, Emerging Growth Company	false
Title of 12(b) Security	Common Stock
Trading Symbol	CPSH
Security Exchange Name	NASDAQ
Amendment Flag	false
Entity, Central Index Key	0000814676