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

Company: CPS TECHNOLOGIES CORP/DE/
Filing Date: 2025-03-17
Form: 10-K
Item: Item 1A
Chunk 10
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 foreign based competitors.

Several of our major competitors are located outside of the United States. The relative strength of the U. S. dollar compared to such competitors’ respective local currencies makes our products more expensive to our customers relative to our competitors’ prices. Such circumstances could result in a reduction in product pricing (and profitability) in order to maintain or grow our current levels of business. If we are unable or unwilling to reduce pricing of our products to the level necessary to maintain current business levels, we could see an overall reduction in revenue.

Our dependence on outside vendors to perform particular steps in our manufacturing process could negatively impact us should those vendors be unable or unwilling to provide such service at a reasonable cost.

Several of our major customers require that we use only vendors approved by them for certain steps, typically plating, of our manufacturing process before the finished product can be shipped to the customer and recognized as revenue. In some cases these vendors are sole sourced, i. e., one vendor is the only vendor approved for that process. If that vendor raises their price to us, we may not be able to pass that increase on to our customer, eroding our margins. If we are able to pass along these increases, that could negatively impact our sales volumes if our customer shifts some of their purchases to a lower priced competitor. If a sole sourced vendor is unable to process our product fast enough to meet our customer’s demand, or if they do not process our product at all, our expected revenue could be negatively affected despite our ability to produce enough to meet that demand.

Our success is highly dependent on managerial contributions of key individuals and we may be unable to retain these individuals or recruit others.

We depend on our senior executives and certain key managers as well as engineering, research and development, sales, marketing and manufacturing personnel, who are critical to our business. While we have employment agreements with certain executives, none of these agreements would prevent any such person from leaving the Company. Furthermore, larger competitors may be able to offer more generous compensation packages to our executives and key employees, and therefore we risk losing key personnel to those competitors. If we were to lose the services of any of our key personnel, or if we fail to attract and train qualified personnel, our engineering, product development, manufacturing and sales efforts could be slowed. In particular, we have, from time to time, experienced difficulty in hiring and retaining skilled engineers with appropriate qualifications to support our growth strategy. Our success depends on our ability to identify, hire, train and retain qualified engineering personnel. Specifically, we