Company: CPSH
Filing Date: 2025-03-17
Form Type: 10-K
Source: 0001437749-25-008029
Chunk: 6

Company: CPS TECHNOLOGIES CORP/DE/
Filing Date: 2025-03-17
Form: 10-K
Item: Item 1
Chunk 6
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 In 2024, approximately 70% of our revenues were derived from commercial applications and 30% from defense-related applications.

Availability of Raw Materials

We use a variety of raw materials from numerous domestic and foreign suppliers. These materials are primarily aluminum ingots, ceramic powders, chemicals and hermetic assembly components. The raw materials we use are available from domestic and foreign sources and none is believed to be scarce or restricted for national security reasons. We use no conflict metals.

Patents and Trade Secrets

As of December 28, 2024, the Company had 9 United States patents. In addition, the Company had several international patents covering the same subject matter as the U. S. patents. In addition, CPS has applied for patent protection for its nuclear shielding solution.

We intend to continue to apply for domestic and foreign patent protection in appropriate cases. In other cases, we believe we are better served by reliance on trade secret protection. In all cases, we seek protection for our technological developments to preserve our competitive position.

Backlog and Contracts

Virtually 100% of the Company's product sales are custom in that they are based on customers’ drawings and the large majority of these sales are "designed in" and sold over multiple years. Some large customers typically give the Company a non-binding forecast of demand for a one-year period and then negotiate a pricing agreement with the Company valid for that one-year period. These and other customers typically issue purchase orders to be shipped on a particular date, or to be drawn against and shipped under releases. The Company has a backlog of $26 million as of December 28, 2024. This backlog consists of orders received from customers which are, for the most part, scheduled to ship in 2025. Under certain circumstances, customers may be able to cancel existing orders or extend the period over which orders may be shipped. Some of these changes may be significant, which would reduce this backlog or extend the timing of these shipments.

Competition

We have developed and expect to continue to develop products for a number of different end markets, and we will encounter competition from different producers of MMCs, hermetic packages, armor, and other competing materials.

We believe that the principal competitive factors in our end markets today include technical competence, product performance, quality, reliability, price, delivery performance, corporate reputation, and strength of sales and marketing resources. We believe our proprietary processes, reputation, and the price at which we can offer products for sale will enable us to compete successfully in the