CVD EQUIPMENT CORP

Current report

Item 1A. Risk Factors.

Current report

Our restructuring and decision to discontinue pursuing new equipment system orders involve significant risks and may adversely affect our operations, financial condition and results of operations.

Current report

In September 2026, we implemented a restructuring plan pursuant to which we discontinued the pursuit of new system orders for our CVD equipment business and reduced our workforce. Following these actions, our remaining operations are focused primarily on completing our existing equipment system backlog, satisfying warranty and other customer obligations, and supporting our ongoing spare parts, quartz and services businesses.

Current report

Our ability to successfully execute this transition depends on a number of factors, including our ability to retain personnel with the technical knowledge and skills necessary to complete existing customer projects, obtain required materials and components, achieve customer acceptance, satisfy warranty and other contractual obligations, collect amounts due from customers and maintain appropriate operational and administrative capabilities. The reduction in our workforce may result in the loss of institutional knowledge, increased responsibilities for remaining employees and difficulties maintaining the personnel and resources necessary to support our operations. If we are unable to retain sufficient personnel or other resources, we may experience delays, increased costs, operational disruptions or difficulties fulfilling our obligations to customers.

Current report

Because we have discontinued pursuing new equipment system orders, our future equipment system revenue will increasingly depend upon successful completion and recognition of revenue from our existing backlog. As the backlog for equipment system orders is completed, our equipment-related revenue will decline significantly and our spare parts, quartz and services businesses may not generate sufficient revenue or profitability to offset such declines in equipment system revenue. The failure to acquire new sources of revenue, including new business lines or products, could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Current report

We recorded restructuring and impairment charges in connection with these actions and may incur additional restructuring, impairment, employee-related, contractual or other charges as we complete the restructuring and continue to evaluate our operations. We may also fail to achieve the anticipated cost savings or other benefits of the restructuring, or such benefits may be less than anticipated. Any of these circumstances could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Current report

Our efforts to monetize our real estate and other assets and pursue strategic alternatives may not be successful and could subject us to additional risks and uncertainties.

Current report

Our Board of Directors continues to evaluate strategic alternatives intended to enhance shareholder value, including potential opportunities to monetize the Company’s real estate assets and pursue business opportunities consistent with our available financial resources and strategic objectives. In October 2026, we engaged CBRE, Inc. to market for sale our owned real estate properties located in Central Islip and Saugerties, New York.

Current report

There can be no assurance that these marketing efforts will result in the sale of either property, that any sale will be completed within an anticipated timeframe or that the terms or net proceeds from any transaction will be acceptable to us. Market conditions, interest rates, property-specific considerations, due diligence findings, financing availability and other factors could adversely affect the timing, valuation or feasibility of a potential transaction. We may also incur professional fees and other costs in connection with these efforts regardless of whether a transaction is completed.

Current report

In addition, the evaluation and pursuit of strategic alternatives may require significant attention from our Board of Directors and management and may result in additional legal, advisory and other expenses. Any acquisition, investment, new business opportunity or other strategic transaction we pursue could involve additional risks, including the use of our available cash resources, integration and execution risks, the assumption of liabilities or obligations, and the possibility that the anticipated benefits of the transaction may not be realized.

Current report

If we are unable to monetize our assets on acceptable terms, successfully identify and execute other strategic opportunities, or effectively deploy the proceeds from our asset sales, our ability to enhance shareholder value may be adversely affected. There can be no assurance that our strategic initiatives will result in any transaction or ultimately produce the anticipated benefits.

Current report

Our future business strategy depends in part on our ability to preserve and effectively deploy our available financial resources, and we may require additional financing in the future.

Current report

Following the sale of our SDC business in April 2026, we retained net cash proceeds of approximately $15.6 million after transaction costs, employee-related liabilities and income taxes. We expect to use these proceeds to enhance our financial flexibility while we evaluate strategic opportunities, our facilities and potential acquisitions of other product lines or businesses.

Current report

Our available financial resources may be reduced by operating losses, costs associated with completing our remaining equipment backlog, warranty and other customer obligations, restructuring costs, capital expenditures, taxes, professional fees and other expenditures. The amount and timing of these expenditures may be difficult to predict, particularly as we complete our restructuring and evaluate strategic alternatives.

Current report

There can be no assurance that we will identify opportunities to deploy our capital on terms that enhance shareholder value or that investments or acquisitions we pursue will achieve their intended results. If our existing financial resources are insufficient to satisfy our future requirements, we may seek additional financing. Additional financing may not be available when required or may be available only on unfavorable terms. Our inability to preserve our liquidity, appropriately deploy our capital or obtain financing if needed could materially adversely affect our business, financial condition, results of operations and ability to pursue strategic opportunities.