Company: CPSH
Filing Date: 2025-03-17
Form Type: 10-K
Source: 0001437749-25-008029
Chunk: 11

Company: CPS TECHNOLOGIES CORP/DE/
Filing Date: 2025-03-17
Form: 10-K
Item: Item 1A
Chunk 11
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 need to continue to attract and retain product development, materials and manufacturing engineers to work with our direct sales force to technically qualify and perform on new sales opportunities and orders, and to demonstrate our products.

We may also incur increased operating expenses and be required to divert the attention of our senior executives to search for replacements. The integration of any new personnel could disrupt our ongoing operations.

Business or economic disruptions or global health concerns could seriously harm our business.

Broad-based business, economic disruptions or global health concerns could adversely affect our business and the sale of our products. For example, in December 2019 an outbreak of a novel strain of the coronavirus disease (COVID-19) originated in Wuhan, China, and spread to a number of other countries, including the United States. Initially, this outbreak resulted in extended shutdowns of certain businesses in the Wuhan region and had ripple effects to businesses around the world. While the impact of this pandemic has largely subsided, a resurgence of this virus or another could have an impact on our business. Although the Company remained open throughout the COVID-19 pandemic, complete or partial government shutdowns of many businesses, schools, bars and restaurants did occur. The Russian invasion of Ukraine and the conflict in Israel and Gaza could also adversely affect our business in spite of the immaterial amount of direct business we have done in these regions in the past. We cannot presently predict the scope and severity of any future business shutdowns or disruptions to us, but if we or any of the third parties with whom we engage, including our customers, suppliers and other third parties, were to experience extended shutdowns or other business disruptions, our ability to conduct our business could be materially and negatively impacted, and could have a material adverse effect on our business and our results of operation and financial condition.

Changes in trade policy could seriously impact our business.

Most of our raw materials are domestically sourced by CPS. However, some of those raw materials may originate in countries other than the United States. Should tariffs be imposed on any of these countries of origin, our vendors would likely increase their price to us to cover the cost of these tariffs. We may not be able to pass these cost increases on to our customers in a timely manner, therefore eroding our margins. A significant portion of our business is exported to customers outside the United States. Should their countries impose tariffs on US goods, including ours, we could find ourselves at a competitive disadvantage in relation to our competitors, some of whom are located outside the United States.

Acquisitions can result in an increase in