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): November 1, 2023

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 November 1, 2023, the Company issued a press release announcing its financial results for the quarter ended September 30, 2023. 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 November 1, 2023 of CPS Technologies Corp. announcing its financial results for the quarter ended September 30, 2023
99.2	Financial results for the quarter ended September 30, 2023
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: November 3, 2023	/s/ Charles K. Griffith, Jr. Charles K. Griffith Jr. Chief Financial Officer

Exhibit 99.1

FOR RELEASE: IMMEDIATE

CPS Technologies Corporation Announces Third Quarter 2023 Financial Results

Revenue of $6.3 Million; Company Remains on Track for Record Year

Norton, Massachusetts – November 1, 2023 – CPS Technologies Corporation (NASDAQ:CPSH) (“CPS” or the “Company”) today announced financial results for the fiscal third quarter ended September 30, 2023.

Third Quarter Highlights

●

Revenue of $6.3 million for the third quarter of 2023 versus $6.7 million in the prior-year period, reflecting a shift in certain orders into the fourth quarter, as previously discussed

●

Gross margin of 19.7 percent versus 27.9 percent in the third quarter of 2022, primarily due to lower revenue year-over-year

●

Operating profit of $0.1 million for the quarter ended September 30, 2023, compared to $0.7 million in the prior-year period

●

Company recently announced a new contract, valued at approximately $7.7 million, to provide power module components and related solutions to a European customer, as well as the Company’s first SBIR grant funded by the Department of Energy

“As anticipated, revenue during the period was negatively impacted by certain shipments being delayed into the fourth quarter, which is looking to be particularly strong,” said Brian Mackey, President and CEO. “I’m excited that we remain in solid shape to finish fiscal 2023 with a record-setting performance, setting the stage for continued success going forward. We recently announced two major wins for CPS that will positively impact fiscal 2024, including a new SBIR award, complemented by a $7.7 million contract with one of our larger customers.

“Now with three months under my belt at CPS, I am upbeat about the future of the Company, as we focus on R&D investment and business development initiatives to drive higher returns and top line expansion. CPS provides unique, cutting-edge solutions across many fast-growing industries, and we are well positioned to take the Company to the next level in terms of both size and scope. I look forward to executing on a strategic plan that accelerates growth, improves operating performance, and enhances value for our shareholders.”

Results of Operations

CPS reported revenue of $6.3 million for the third quarter of fiscal 2023 versus $6.7 million in the prior-year period, reflecting order timing. Gross profit was to $1.2 million, or 19.7 percent of revenue, versus $1.9 million, or 27.9 percent of revenue, in the fiscal 2022 third quarter. The lower gross margin year-over-year reflects lower overall sales.

Operating profit was $0.1 million in the fiscal 2023 third quarter, compared with $0.7 million in the prior-year period. Reported net income was $0.2 million, or $0.01 per diluted share, versus $1.0 million, or $0.07 per diluted share, in the quarter ended October 1, 2022.

Page 2

Conference Call

The Company will be hosting its third quarter 2023 earnings call at 9:00 am on Thursday, November 2. Those interested in participating in the conference call should dial the following:

Call in Number: 1-844-943-2942

Participant Passcode: 230366

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 energy management components that facilitate the electrification of the economy. Our products and intellectual property include critical pieces of the technology puzzle for electric trains and subway cars, wind turbines, hybrid vehicles, electric vehicles, the smart electric grid, 5G infrastructure, and others. CPS' armor products provide exceptional ballistic protection and environmental durability at a very light weight. CPS also assembles housings and packages for hybrid circuits. CPS is committed to innovation and to supporting our customers in building solutions to this planet's problems.

Safe Harbor

Statements made in this document that are not historical facts or which apply prospectively, including those relating to 2023 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 (Unaudited)

	Fiscal Quarters Ended						Nine Months Ended
	September 30,			October 1,			September 30,			October 1,
	2023			2022			2023			2022
Revenues:
Product sales	$	6,285,041		$	6,748,117		$	20,803,447		$	20,471,574
Total Revenues		6,285,041			6,748,117			20,803,447			20,471,574

Cost of product sales		5,049,177			4,864,876			15,126,621			14,796,206
Gross Profit		1,235,864			1,883,241			5,676,826			5,675,368

Selling, general and administrative expense		1,105,227			1,174,581			4,121,099			3,750,131
Operating income (loss)		130,637			708,660			1,555,727			1,925,237

Interest income (expense), net		78,181			(1,892	)		176,325			(6,245	)
Other income (expense), net		(1,228	)		645,594			(4,130	)		649,628
Net income (loss) before income tax expense		207,590			1,352,362			1,727,922			2,568,620
Income tax provision (benefit)		36,509			364,497			497,137			706,211	)
Net income	$	171,081		$	987,865		$	1,230,785		$	1,862,409
Net income per basic common share	$	0.01		$	0.07		$	0.08		$	0.13
Weighted average number of basic common shares outstanding		14,517,364			14,434,468			14,487,873			14,417,995
Net income per diluted common share	$	0.01		$	0.07		$	0.08		$	0.13
Weighted average number of diluted common shares outstanding		14,636,241			14,686,476			14,632,591			14,683,632

Page 4

CPS TECHNOLOGIES CORP.
Balance Sheets (Unaudited)

	September 30,			December 31,
	2023			2022
ASSETS

Current assets:
Cash and cash equivalents	$	8,778,856		$	8,266,753
Accounts receivable-trade, net		5,006,451			3,777,975
Accounts receivable-other		17.043			685,668
Inventories, net		4,827,957			4,875,901
Prepaid expenses and other current assets		337,476			211,242
Total current assets		18,967,783			17,817,539
Property and equipment:
Production equipment		11,195,993			10,770,427
Furniture and office equipment		952,883			952,883
Leasehold improvements		985,649			985,649
Total cost		13,134,525			12,708,959

Accumulated depreciation and amortization		(11,810,209	)		(11,446,901	)
Construction in progress		206,693			64,910
Net property and equipment		1,531,009			1,326,968
Right-of-use lease asset		367,000			466,000
Deferred taxes, net		1,645,467			2,069,436
Total assets	$	22,511,259		$	21,679,943

	October 1,			December 31,
	2022			2022
LIABILITIES AND STOCKHOLDERS` EQUITY

Current liabilities:
Note payable, current portion		57,457			43,711
Accounts payable		2,151,127			1,836,865
Accrued expenses		1,067,293			820,856
Deferred revenue		1,675,086			2,521,128
Lease liability, current portion		159,000			157,000
Total current liabilities		5,109,963			5,379,560
Note payable less current portion		8,655			54,847
Deferred revenue-long term		31,277			231,020
Long term lease liability		208,000			309,000
Total liabilities		5,357,895			5,974,427

Commitments (note 4)

Stockholders` equity:
Common stock, $0.01 par value, authorized 20,000,000 shares; issued 14,601487 and 14,460,486, respectively; outstanding 14,519,215 and 14,450,470, respectively; at September 30, 2023 and December 31, 2022;		146,015			144,605
Additional paid-in capital		40,151,794			39,726,851
Accumulated deficit		(22,894,307	)		(24,125,092	)
Less cost of 82,272 and 10,016 common shares repurchased, respectively; at September 30, 2023 and December 31, 2022		(250,138	)		(40,848	)
Total stockholders` equity		17,153,364			15,705,516
Total liabilities and stockholders` equity	$	22,511,259		$	21,679,943

Exhibit 99.2

CPS TECHNOLOGIES CORP.

Statements of Operations (Unaudited)

	Fiscal Quarters Ended						Nine Months Ended
	September 30,			October 1,			September 30,			October 1,
	2023			2022			2023			2022
Revenues:
Product sales	$	6,285,041		$	6,748,117		$	20,803,447		$	20,471,574
Total Revenues		6,285,041			6,748,117			20,803,447			20,471,574

Cost of product sales		5,049,177			4,864,876			15,126,621			14,796,206
Gross Profit		1,235,864			1,883,241			5,676,826			5,675,368

Selling, general and administrative expense		1,105,227			1,174,581			4,121,099			3,750,131
Operating income (loss)		130,637			708,660			1,555,727			1,925,237

Interest income (expense), net		78,181			(1,892	)		176,325			(6,245	)
Other income (expense), net		(1,228	)		645,594			(4,130	)		649,628
Net income (loss) before income tax expense		207,590			1,352,362			1,727,922			2,568,620
Income tax provision (benefit)		36,509			364,497			497,137			706,211	)
Net income	$	171,081		$	987,865		$	1,230,785		$	1,862,409
Net income per basic common share	$	0.01		$	0.07		$	0.08		$	0.13
Weighted average number of basic common shares outstanding		14,517,364			14,434,468			14,487,873			14,417,995
Net income per diluted common share	$	0.01		$	0.07		$	0.08		$	0.13
Weighted average number of diluted common shares outstanding		14,636,241			14,686,476			14,632,591			14,683,632

CPS TECHNOLOGIES CORP.
Balance Sheets (Unaudited)

	September 30,			December 31,
	2023			2022
ASSETS

Current assets:
Cash and cash equivalents	$	8,778,856		$	8,266,753
Accounts receivable-trade, net		5,006,451			3,777,975
Accounts receivable-other		17.043			685,668
Inventories, net		4,827,957			4,875,901
Prepaid expenses and other current assets		337,476			211,242
Total current assets		18,967,783			17,817,539
Property and equipment:
Production equipment		11,195,993			10,770,427
Furniture and office equipment		952,883			952,883
Leasehold improvements		985,649			985,649
Total cost		13,134,525			12,708,959

Accumulated depreciation and amortization		(11,810,209	)		(11,446,901	)
Construction in progress		206,693			64,910
Net property and equipment		1,531,009			1,326,968
Right-of-use lease asset		367,000			466,000
Deferred taxes, net		1,645,467			2,069,436
Total assets	$	22,511,259		$	21,679,943

	October 1,			December 31,
	2022			2022
LIABILITIES AND STOCKHOLDERS` EQUITY

Current liabilities:
Note payable, current portion		57,457			43,711
Accounts payable		2,151,127			1,836,865
Accrued expenses		1,067,293			820,856
Deferred revenue		1,675,086			2,521,128
Lease liability, current portion		159,000			157,000
Total current liabilities		5,109,963			5,379,560
Note payable less current portion		8,655			54,847
Deferred revenue-long term		31,277			231,020
Long term lease liability		208,000			309,000
Total liabilities		5,357,895			5,974,427

Commitments (note 4)

Stockholders` equity:
Common stock, $0.01 par value, authorized 20,000,000 shares; issued 14,601487 and 14,460,486, respectively; outstanding 14,519,215 and 14,450,470, respectively; at September 30, 2023 and December 31, 2022;		146,015			144,605
Additional paid-in capital		40,151,794			39,726,851
Accumulated deficit		(22,894,307	)		(24,125,092	)
Less cost of 82,272 and 10,016 common shares repurchased, respectively; at September 30, 2023 and December 31, 2022		(250,138	)		(40,848	)
Total stockholders` equity		17,153,364			15,705,516
Total liabilities and stockholders` equity	$	22,511,259		$	21,679,943

Document And Entity Information	Nov. 01, 2023
Document Information [Line Items]
Entity, Registrant Name	CPS TECHNOLOGIES CORP.
Document, Type	8-K
Document, Period End Date	Nov. 01, 2023
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