<PAGE>
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-KSB

              [X] Annual Report Pursuant to Section 13 or 15(d) of
                      the Securities Exchange Act of 1934
  For the year ended                        Commission File Number 1-16525
  December 31, 2003

                           CVD EQUIPMENT CORPORATION
             (Exact name of registrant as specified in its charter)

                New York                        11-2621692
          --------------------              ------------------
       (State or other jurisdiction         (I.R.S. Employer
        of incorporation or organization)   Identification No.)

                             1860 Smithtown Avenue
                           Ronkonkoma, New York 11779
                    (Address of principal executive office)

  Registrant's telephone number, including area code (631) 981-7081

  Securities registered pursuant to Section 12(b) of the Act:   NONE

  Securities registered pursuant to Section 12(g) of the Act:

                         Common Stock, Par value $0.01
                                (Title of class)

  Indicated by check mark whether the Registrant (1) has filed all reports
  to be filed by Section 13 or 15(d) of the Securities and Exchange Act of
  1934 during the preceding 12 months (or for such shorter period that the
  Registrant was required to file such reports), and (2) has been subject to
  such filing requirements for the past 90 days.

  Yes  X        No

  Indicate by check mark if disclosure of delinquent filers pursuant to Item
  405 of Regulation S-K is not contained herein, and will not be contained
  to the best of registrant's knowledge, in definitive proxy or information
  statements incorporated by reference in Part III of this Form 10-KSB. X

  The aggregate market value of the common stock held by non-affiliates as
  of March 26, 2004 was $2,578,305

  The Registrant's revenues for 2003 were $ 9,787,939

  The number of shares outstanding of common stock, as of March 26, 2004 was
  3,039,100


  <PAGE> 2

                                     PART I

  Item 1.         Business

  Unless otherwise set forth herein, when we use the term 'we' or any
  derivation thereof, we mean CVD Equipment Corporation, a New York
  corporation.

  CVD Equipment Corporation (the "Company") was incorporated under the laws
  of New York State in October 1982. CVD is a manufacturer of UHVCVD, MOCVD,
  PECVD, LPE, VPE, RTP, Etch, Gas and Chemical Delivery Systems, Belt
  Furnaces, Rework Station products and services for the Semiconductor,
  Telecommunications, Wireless, Optoelectronics, MEMS, Solar Power and
  Surface Mount Technology markets.

  We conduct our operations through three divisions, CVD, SDC/ECS and
  Conceptronic/RI. Each division operates reasonably autonomously on a day-
  to-day basis with its own operating manager and with sales and
  administration being handled by corporate managers. Yet there is an
  overall corporate coordination in the day-to-day administration of the
  business, in setting policy and consistently applying procedures.

  Our Company designs, develops, manufactures, markets, installs and
  services equipment primarily for the semiconductor industry. Our products
  include (1) both batch and single wafer systems used for depositing, rapid
  thermal processing, annealing, diffusion and etching of semiconductor
  films, (2) gas and liquid flow control systems, (3) ultra high purity gas
  and chemical piping delivery systems, (4) standard and custom quartzware
  and (5) reflow furnaces and rework stations for surface mounting of
  components onto printed circuit boards. We also provide equipment
  consulting and refurbishing of semiconductor processing equipment. Our
  products are generally manufactured as standard products or customized to
  the particular specifications of each of our customers.

  Semiconductor components are the fundamental electronic building blocks
  used in modern electronic equipment and systems. These components are
  classified as either discrete devices (such as transistors) or integrated
  circuits (in which a number of transistors and other elements are combined
  to form a more complicated electronic circuit). In an integrated circuit,
  these elements are formed on a small "chip" of silicon or gallium
  arsenide, which is then encapsulated in an epoxy, ceramic or metal package
  having lead wires for connection to a circuit board. Our products are used
  in the manufacture and mounting of these components.

  CVD Division

  Our CVD division designs and manufactures both standard and custom
  equipment for the semiconductor industry. CVD's equipment, with its
  leading edge technology, is utilized for silicon, silicon germanium,
  silicon carbide and gallium arsenide processes. These processes are
  paramount in the semiconductor, optoelectronic and wireless communications
  arena.

  SDC/ECS Division

  In December 1998, we purchased at public auction, the inventory, tangible
  assets, intangible assets and intellectual property of Stainless Design
  Corporation, Saugerties, New York for $672,095. We formed a new 100% owned
  subsidiary called Stainless Design Concepts, Ltd. ("SDC"). In April, 1999,
  SDC was merged into the Company as a wholly owned division.

  SDC designs and manufactures in their Class 100 cleanroom, ultra high
  purity gas and chemical delivery control systems for the semiconductor
  industry.

  <PAGE> 3

  In November, 1999, we formed another division called Equipment Consulting
  Services ("ECS").
  ECS complements SDC by providing equipment consulting and the refurbishing
  of semiconductor equipment. The field service group provides for contract
  maintenance, high purity fab and equipment installations and equipment
  removal. During the fourth quarter 2002, the Company combined the
  operations of SDC and ECS and they are currently being reported under SDC.
  The startup of our SDC/ECS division provided new products for CVD to offer
  to the semiconductor industry and also improved the manufacturing of gas
  and chemical delivery systems used in most CVD products.

  Conceptronic/RI Division

  In December 2001, we acquired the assets of the Surface Mount Technology
  division of Research Inc., known as Research International ("RI") for
  $750,000. Research International is a manufacturer of Surface Mount
  Technology (SMT) reflow furnaces.

  In June 2002, we purchased substantially all of the assets of Conceptronic
  Inc.'s Surface Mount Technology business for $1,239,000. Conceptronic
  specializes in solder reflow furnaces and rework stations for the printed
  circuit board and chip scale package industries.

  The startup of our Research International and Conceptronic divisions
  provided a base for CVD to generate new and enhanced standard and custom
  furnace products to the semiconductor and Surface Mount Technology markets
  based on technology that existed at CVD and was purchased as part of the
  acquisition of assets.

  Principal Products

  Chemical Vapor Deposition (CVD) - is a process which passes a gaseous
  compound over a target material surface that is heated to such a degree
  that the compound decomposes and deposits a desired layer onto substrate
  material. The process is accomplished by combining appropriate gases in a
  reaction chamber, of the kind produced by the Company, at elevated
  temperatures (typically 300-1,500 degrees Celsius). Our Chemical Vapor
  Deposition Systems are complete and include all necessary instrumentation,
  subsystems and components. The systems include mass flow controllers,
  bellows valves, stainless steel lines and fittings. We provide such
  standard systems and also specifically engineered products for particular
  customer applications. Some of the standard systems we offer are for
  Silicon, Silicon-Germanium, Silicon Dioxide, Silicon Nitride,
  Polysillicon, Liquid Phase Epitaxial and Metalorganic Chemical Vapor
  Deposition.

  Our CVD systems are available in a variety of models that can be used in
  production and laboratory research. All models can be offered with total
  system automation, a microprocessor control system by which the user can
  measure, predict and regulate gas flow, temperature, pressure and chemical
  reaction rates, thus controlling the process in order to enhance the
  quality of the materials produced. The Company's standard microprocessor
  control system is extremely versatile and capable of supporting the
  Company's complete product line and most custom system requirements. The
  Company's CVD systems range in price from $100,000 to $2,500,000.

  Rapid Thermal Processing (RTP) - is used to heat semiconductor materials
  to elevated temperatures of 1,000 degrees Celsius at rapid rates of up to
  200 degrees Celsius per second. Our RTP systems are offered for implant
  activation, oxidation, silicide formation and many other processes. We
  offer systems that can operate both at atmospheric or reduced pressures. A
  specific model of our RTP system is used for Thermal Desorption
  Spectroscopy which allows the semiconductor process

  <PAGE> 4

  engineer the ability to analyze the deposited films between the many process
  steps used in the complex fabrication process. Our RTP systems generally
  range in price from $75,000 to $350,000.

  Annealing and Diffusion Furnaces - are used for diffusion, oxidation,
  implant anneal, solder reflow and other processes. The systems are
  normally operated at atmospheric pressure with gaseous atmospheres related
  to the process. An optional feature of the system allows for the heating
  element to be moved away from the process chamber allowing the wafers to
  rapidly cool  or be heated in a controlled environment. Our cascade
  temperature control system enables more precise control of the wafers. The
  systems are equipped with an automatic process controller, permitting
  automatic process sequencing and monitoring with safety alarm provisions.
  Our Annealing and Diffusion Furnace systems generally range in price from
  $75,000 to $650,000.

  Gas and Liquid Control Systems - Our standard and custom designed gas and
  liquid control systems encompassing (1) gas cylinder storage cabinets, (2)
  custom gas and chemical delivery systems, (3) gas and liquid valve
  manifold boxes (VMB's) and (4) gas isolation boxes (GIB's) to provide safe
  storage and handling of pressurized gases and chemicals. System design
  allows for automatic or manual control from both a local and remote
  location. The price range for our Gas and Liquid Control Systems are from
  $20,000 to $350,000.

  Ultra High Purity Gas and Chemical Piping and Delivery Systems - We
  provide field installation of ultra high purity piping systems within a
  semiconductor plant for the distribution of gases and chemicals to the
  assorted process tools. As part of field service, we also offer repair
  service on customer equipment.

  Quartzware - We provide standard and custom fabricated quartzware used in
  the Company's equipment and other customer tools.

  Reflow Furnaces and Rework Stations - We provide a standard line of
  equipment and parts for the printed circuit board and chip scale package
  industries.

  Markets and Marketing

  During 2003, sales were made by a staff of six employees and twenty five
  sales representatives whose activities were supported by a staff of twelve
  application engineers. The Company continues to work on expanding our
  product offerings.

  The Company's web sites continue to see increased traffic. We have focused
  our efforts on being in the top listings on many search engines in order
  to increase the number of "hits" to our web sites.

  The Company's products are used in research and production applications by
  the semiconductor industry. We sell our products primarily to
  semiconductor manufacturers, institutions involved in electronic research
  such as universities, government and industrial laboratories and to
  electronic assembly manufacturers. We have both an international and
  domestic customer base in excess of 300 customers. For the twelve months
  ended December 31, 2003 and December 31, 2002, 26% and 25% of our revenues
  respectively were derived from foreign exports. Sales to a single customer
  in any one year can exceed 10% of our total sales however, we are not
  dependent on any single customer. In 2003 and 2002, one customer
  represented 12% and 11% of our total sales respectively. In 2003, one
  other customer represented 13.4% of our total sales. In 2002, another
  customer represented 12% of our total sales.

  <PAGE> 5

  Warranties

  We warrant our equipment for a period of twelve to twenty four months
  after shipment, depending on the product, and pass along any warranties
  from original manufacturers of components used in our products. We provide
  for our own equipment servicing with in-house field service personnel.
  Warrantee costs have been historically insignificant.
  Competition

  Our business is subject to intense competition. We are aware of other
  competitors that offer a substantial number of products comparable to
  ours. Many of our competitors (including customers who may elect to
  manufacture systems for internal use) have financial, marketing and other
  resources greater than ours. To date, we have been able to compete in
  markets that include these competitors, primarily on the basis of price,
  technical performance, quality and delivery.

  Sources of Supply

  We do not manufacture many components used in producing our products. They
  are purchased from unrelated third-party manufacturers of such equipment.
  We do not have any supply contracts covering these components. We are not
  dependent on a principal or major supplier and alternate suppliers are
  available. We do not use a large amount of raw or difficult to obtain
  materials that could cause a problem in production of our equipment.

  We have our own fully equipped machine shop to fabricate in house, the
  most complex designed parts of our equipment. We recently invested in
  additional CNC machines for the machine shop, thus further increasing
  efficiencies while significantly reducing costs in production. Similarly,
  our own quartz shop is capable of meeting our quartzware needs.

  Materials procured from the outside and/or manufactured internally undergo
  a rigorous quality control process to ensure that the parts meet or exceed
  the most stringent specifications. All equipment, upon final assembly,
  undergoes a final series of complete testing to ensure maximum product
  performance.

  Backlog

  As of December 31, 2003 our order backlog was $1,738,269 compared to
  $3,816,877 at December 31 2002. The exceptionally high backlog at December
  31, 2002 was primarily attributable to the work slowdown in the fourth
  quarter of 2002 when the CVD and Conceptronic divisions relocated to its
  new facility. Included in the backlog are all accepted purchase orders.
  Order backlog is usually a reasonable management tool to indicate expected
  revenues and projected profits, however it does not provide an assurance
  of future achievement or profits as order cancellations or delays are
  possible.

  Patents, Copyrights and License Agreements

  We believe that while patents are useful and will be used at times in the
  future, they are not critical or valuable in many cases on an individual
  basis. We believe the collective value of the intangible property of the
  Company is comprised of blueprints, specifications, technical processes,
  cumulative employee knowledge, experience, copyrights and patents.

  <PAGE> 6

  Research and Development

  We continue to concentrate our efforts on several research and development
  projects. We develop and customize equipment for industry and government,
  university and industry research laboratories around the world. Our
  research, design and development of equipment, which remains proprietary
  to us, is used to improve our existing products and develop new products
  for customers. The amount spent on research and development was $273,000
  and $372,000 for the years ended December 31, 2003 and December 31, 2002
  respectively.

  Government Regulations
  The Company knows of no government requirements for approval of the sale
  of their products or services except in some export cases. At that time,
  we apply for the appropriate export, license. As of December 31, 2003,
  there were no pending government approvals for an export license.

  We know of no existing or probable governmental regulations that would have a
  serious effect on our business.

  We have and will continue to comply with any and all environmental laws that
  are applicable to our business.

  Insurance

  Our products are used in connection with explosive, flammable, corrosive
  and toxic gases. There are potential exposures to personal injury as well
  as property damage, particularly if operated without regard to the design
  limits of the systems and components.

  Although, we believe that our insurance coverage is adequate, we did not
  renew out product liability insurance on August 11, 2003 due to a
  significant increase in premium and in light of our historical experience
  of not sustaining product liability claims of any consequence. We will
  reinstate product liability insurance when it is determined to be cost
  effective to do so. We endeavor to minimize our product liability exposure
  by engineering safety devices for our products and carefully monitoring
  incidents involving our products to determine where safety improvements
  may be made and by conducting training programs in connection with our
  products.

  Employees

  At December 31, 2003, we had 86 employees, 82 of which were full time
  personnel and four worked part time.  We had 37 people in manufacturing,
  18 in engineering (including research and development and efforts related
  to product improvement), seven in field service, three in marketing and 21
  in general management and administration.

  Item 2.         Description of Property.

  We maintain our headquarters at 1860 Smithtown Avenue, Ronkonkoma, New
  York, where we own a 50,000 square foot manufacturing facility which was
  purchased in November, 2002. Our CVD and Conceptronic divisions operate
  out of this facility. Our SDC division operates out of a 22,000 square
  foot manufacturing facility situated on five acres of land which we
  purchased in December 1998 and is located at 1117 Kings Highway,
  Saugerties, New York.


  <PAGE> 7

  Item 3.         Legal Proceedings.

  On September 24, 1999 the Company was named in a lawsuit filed by
  Precisionflow Technologies, Inc., in the United States District for the
  Northern District of New York. The nature of this legal proceeding focused
  on a purported comment made by CVD's President Leonard Rosenbaum
  concerning the intellectual property obtained in the purchase of assets of
  Stainless Design Corporation. On November 10, 1999, the Company responded
  with a counterclaim for unauthorized use of our intellectual property. It
  is legal counsel's belief that the lawsuit against CVD is without merit as
  comments made by Leonard Rosenbaum were truthful and that our counter-suit
  will be successful as CVD has valid copyrights that were utilized without
  our authorization. The plaintiff is seeking monetary damages and
  injunctive relief, however, the Company considers its potential exposure
  to be negligible and covered by insurance. Further, the claim against CVD
  does not assert any ownership claim over our intellectual property.
  Therefore, we do not anticipate any impact above the levels already being
  experienced. The Company is also seeking monetary damages and injunctive
  relief in its counter-suit. All pre-trial disclosure has been completed
  and the case is currently pending decisions on motions and cross motions
  for summary judgement. No trial date has been set.

  In May 2002, the Company instituted a new action against Precisionflow
  Technologies, Inc., in the United States District for the Northern
  District of New York also seeking injunctive relief and monetary damages
  based upon additional copyright violations. A motion by Precisionflow
  Technologies, Inc. to dismiss this action has been pending since June
  2002.

  Item 4.         Submission of Matters to a Vote of Security Holders.

  At our annual meeting of stockholders, which was held on August 5, 2003 our
  stockholders:

  (1) Elected these four nominees for directors to serve for a term of one (1)
       year; Leonard Rosenbaum, Martin Teitelbaum, Alan H. Temple and Conrad
       Gunther.

  (2) Ratified the appointment of Albrecht, Viggiano, Zureck & Company, P.C.,
       as our independent auditors and public accountants for the year ended
       December 31, 2003.



  PART II

  Item 5.         Market for Registrant's Common Equity and Related
  Stockholder Matters.

  The principal market for our common stock which is traded under the symbol
  CVV is the American Stock Exchange. The following table sets forth, for
  the periods indicated, the high and low sales prices of our common stock
  on the American Stock Exchange.

  <PAGE> 8
  <TABLE>
  <CAPTION>
                                          High                    Low
  <S>                                     <C>                     <C>
  Year Ended December 31, 2003
  1st Quarter............                 $1.62                   $0.82
  2nd Quarter............                  1.35                    1.00
  3rd Quarter............                  1.95                    1.03
  4th Quarter............                  1.48                    1.10



                                          High                    Low
  Year Ended December 31, 2002:
  1st Quarter.............                $3.10                   $2.30
  2nd Quarter.............                 2.95                    2.10
  3rd Quarter.............                 2.29                    1.54
  4th Quarter.............                 1.99                    0.62
  </TABLE>

  As of March 3, 2004, there were approximately 97 holders of record and
  approximately 470 beneficial owners of our common stock. On March 2, 2004,
  the closing sales price of our common stock as reported on the American
  Stock Exchange was $1.80.

  Dividend Policy
  We have never paid a dividend on our common stock and we do not anticipate
  paying dividends on the common stock at the present time. We currently
  intend to retain earnings, if any, for use in our business. There can be
  no assurance that we will ever pay dividends on our common stock. Our
  dividend policy with respect to the common stock is within the discretion
  of the Board of  Directors and its policy with respect to dividends in the
  future will depend on numerous factors, including earnings, financial
  requirements and general business conditions.

  Equity Compensation Plan Information

  The following table provides information about shares of our common stock
  that may be issued upon the exercise of options under all of our existing
  compensation plans as of December 31, 2003.
  <TABLE>
  <CAPTION>
                          Number of securities
                          to be issued upon               Weighted-average
                          exercise of                     exercise price of               Number securities
                          outstanding options,            outstanding options,            remaining available
                          warrants and rights             warrants and rights             for future issuance

  Plan Category                       (a)                         (b)                             (c)
  <S>                        <C>                             <C>                             <C>
  Equity compensation
  plans approved by
  security holders (1)         365,400                         $ 1.69                          214,250
  Equity compensation
  plans not approved by
  security holders                0                               0                               0

          Total                365,400                         $ 1.69                          214,250
  <PAGE> 9
  <FN>
  (1) Reflects aggregate options outstanding under our Non-Qualified Stock
  Option Plans

  On June 3, 1996 we issued options to purchase an aggregate of 84,000
  shares of our common stock at an exercise price of $1.25 per share to our
  directors.

  On April 15, 1998 we issued options to purchase an aggregate of 140,000
  shares of our common stock at an exercise price of $1.51 per share to
  certain of our employees.

  On July 16, 1999 we issued options to purchase an aggregate 52,500 shares
  of our common stock at an exercise price of $1.00 per share to certain of
  our employees.

  On February 2, 2000 we issued options to purchase an aggregate 242,000
  shares of our common stock at an exercise price of $1.75 per share to
  certain of our employees.

  On May 7, 2000 we issued options to purchase an aggregate 40,000 shares of
  our common stock at an exercise price of $2.00 per share to certain of our
  employees.

  On August 1, 2000 we issued options to purchase an aggregate of 40,000
  shares of our common stock at an exercise price of $2.00 per share to our
  directors.

  On October 26, 2000 we issued options to purchase an aggregate of 3,500
  shares of our common stock at an exercise price of $3.25 per share to one
  of our employees.

  On April 1, 2003 we issued options to purchase an aggregate of 12,500
  shares of our common stock at an exercise price of  $3.88 per share to one
  of our employees.

  On September 23, 2003 we issued options to purchase an aggregate of 75,000
  shares of our common stock at an exercise price of $1.40 per share to our
  directors.
  </TABLE>

  Item 6.         Management's Discussion and Analysis of Financial
  Condition and Results of
                          Operations.

  Except for historical information contained herein, this "Management's
  Discussion and Analysis of Financial Condition and Results of Operations"
  contains forward -looking statements within the meaning of the U.S,
  Private Securities Litigation Reform Act of 1995, as amended. These
  statements involve known and unknown risks and uncertainties that may
  cause our actual results or outcomes to be materially different from any
  future results, performance or achievements expressed or implied by such
  forward-looking statements. These forward-looking statements were based on
  various factors and were derived utilizing numerous important assumptions
  and other important factors that could cause actual results to differ
  materially from those in the forward-looking statements. Important
  assumptions and other factors that could cause actual results to differ
  materially from those in the forward-looking statements, include but are
  not limited to: competition in the Company's existing and potential future
  product lines of business; The Company's ability to obtain financing on
  acceptable terms if and when needed; uncertainty as to the Company's
  future profitability, uncertainty as to the future profitability of
  acquired businesses or product lines, uncertainty as to any future
  expansion of the Company. Other factors and assumptions not identified
  above were also involved in the derivation of these forward-looking
  statements and the failure of such assumptions to be realized as well as
  other factors may also cause actual results to differ materially from
  those projected. The Company assumes no obligation to update these
  forward-looking statements to reflect actual results, changes in
  assumptions or changes in other factors affecting such forward-looking
  statements.

  <PAGE> 10

  CVD Equipment Corporation designs, develops, manufactures, markets,
  installs and services equipment primarily for the semiconductor industry.
  The Company's products and services include (1) batch and single wafer
  systems used for depositing, rapid thermal processing, annealing,
  diffusion and etching of semiconductor films; (2) gas and liquid flow
  control systems, (3) ultra high purity gas and chemical piping delivery
  systems; (4) standard and custom quartzware, and (5) reflow furnaces and
  rework stations for surface mounting of components onto printed circuit
  boards. We also provide equipment consulting and refurbishing of
  semiconductor processing equipment. The Company's products are generally
  manufactured as standard products or customized to the particular
  specifications of its customers.


  Results of Operations

  Revenue for the year ended December 31, 2003 was approximately $9,788,000
  compared to approximately $9,242,000 for the year ended December 31, 2002,
  representing an increase of $546,000 or 5.9%. This increase can be
  attributed to the inclusion of a full year's worth of revenue generated by
  the Company's Conceptronic division, which was acquired in the beginning
  of the third quarter of 2002. However, due to the overall softness in the
  economy, which has caused existing and potential customers to reduce or
  delay their capital expenditures, our primary source of revenue, the
  manufacture of customized CVD equipment and gas and chemical delivery
  systems was negatively impacted.

  Cost of revenue increased for the year ended December 31, 2003 to
  approximately $7,484,000 from approximately $6,205,000 for the year ended
  December 31, 2002 representing an increase of approximately $1,279,000 or
  20.6%. Correspondingly, the gross profit for the current year decreased to
  approximately $2,304,000 from $3,037,000. The gross profit margin
  decreased from 32.9% in the year ended December 31, 2002 to 23.5% in the
  year ended December 31, 2003. This decrease is a result of the greater
  contribution of sales made from the Conceptronic line of products which
  presently carry a lower gross profit margin percentage than the CVD
  division. Additionally, due to the soft economic climate, SDC's sales were
  negatively impacted, resulting in less than optimum operating efficiencies
  and lower gross profit margins We are currently working on improving the
  gross profit margins in the Conceptronic division through the re-
  engineering of the product line.

  Selling and shipping expenses were approximately $740,000 in the year
  ended December 31, 2003 compared to $903,000 in the year ended December
  31, 2002 representing a decrease of 18.1%.  The decrease is attributable
  to a reduction in the sales staff during the current year as well as a
  reduction in commissions and royalties. The use of distributors to sell
  the products of the Conceptronic division has resulted in a reduction in
  selling costs for the Company. Correspondingly, product sales to
  distributors are sold at a reduced rate, further explaining the reduction
  in gross profit during the current year as compared to the same period one
  year ago.

  General and administrative expenses were approximately $2,164,000 during
  the year ended December 31, 2003. This was a decrease of approximately
  $303,000 or 12.3% compared to approximately $2,467,000 during the year
  ended December 31, 2002. The decrease is attributable to a reduction in
  staff as the Conceptronic division was assimilated into the Company.

  Interest income decreased in the year ended December 31, 2003 to $1,243
  compared to $25,221 in the year ended December 31, 2002 as a result of
  less funds available for investing due to the acquisition of Conceptronic
  and the purchase of the new building during 2002.

  <PAGE> 11

  Interest expense increased to approximately $209,000 in the year ended
  December 31, 2003 compared to approximately $139,000 in the year ended
  December 31, 2002 due to the increase our average outstanding debt as a
  result of the mortgage on the new building purchased in 2002.

  Other income decreased to approximately $310,000 during the year ended
  December 31, 2003 compared to approximately $543,000 during the year ended
  December 31, 2002. This is a result of the reduction in cash received on
  the collection of accounts receivable exceeding the $369,000 recorded as
  part of the purchase of the assets, which was a nonrecurring event.


  Liquidity and Capital Resources

  As of December 31, 2003, we had aggregate working capital of approximately
  $2,857,000 compared to aggregate working capital of $3,229,000 at
  December 31, 2002 and had available cash and cash equivalents of
  approximately $321,000 compared to approximately $324,000 in cash and cash
  equivalents at December 31, 2002. The cash used for capital expenditures
  and for financing activities marginally exceeded the cash provided from
  operations.

  Accounts receivable, net of allowance for doubtful accounts decreased by
  approximately $33,000 or less than 2% in the year ended December 31, 2002
  compared to the year ended December 31, 2003.

  Inventory as of December 31, 2003 was approximately $1,426,000
  representing a decrease of approximately $597,000 or 29.5% compared to the
  inventory balance as of December 31, 2002. The decrease in inventory was
  comprised of a decrease in raw materials of approximately $445,000, a
  decrease in work in process of approximately $159,000 and an increase in
  finished goods of approximately $7,000. Accounts payable at December 31,
  2003 was approximately $417,000 or 44.4% below the balance at December 31,
  2002. This decrease is attributed to the unusually high balance at
  December 31, 2002 due to the higher than usual volume of purchases made at
  the end of the year. This was required in order to make up for the time
  lost during the temporary plant shut down at the beginning of the fourth
  quarter due to the relocation of the Conceptronic and CVD divisions.
  Additionally, we incurred payables associated with the purchase of the new
  building at December 31, 2002.

  We have a line of credit with a bank permitting the Company to borrow up
  to $1,000,000 until June 1, 2004, at which time it is subject to renewal.
  Interest is payable on any unpaid principal balance at the bank's prime
  rate plus 3/4 of 1%. As of December 31, 2003 and 2002, there was no balance
  outstanding on this facility. However, at December 31, 2002 we had
  $350,000 of the credit line utilized to secure a letter of credit.
  Borrowings are collateralized by our assets.

  We received from General Electric Capital Corporation a $2,700,000
  mortgage, secured by the real property, building and improvements, to
  finance and improve the new facility in Ronkonkoma, New York. As of
  December 31, 2003, we were not in compliance with the debt service ratio
  financial covenant of the agreement. General Electric Capital Corporation
  has waived this default. The mortgage is payable in equal monthly
  installments of $22,285 including interest at 5.67% per annum; pursuant to
  an Industrial Development bond purchase agreement with the town of Islip
  Industrial Development Agency. The final payment is due March 2017.

  A note payable in the amount of $350,000 was issued for the acquisition of
  the assets for Surface Mount Technology business. Interest was provided at
  5.5% per annum. The note was paid in full in July, 2003.

  <PAGE> 12

  The Company believes that its cash and cash equivalents, cash flow from
  operations and available credit facilities will be sufficient to meet its
  working capital and investment requirements for the next twelve months.
  However, future growth, including potential acquisitions, may require
  additional funding and from time to time we may need to raise capital
  through additional equity or debt financing.

  Item 7.         Financial Statements and Supplementary Data.

  The consolidated financial statements and supplementary data required in
  this item are set forth on the pages indicated in Item 15(a)(1).


  Item 8.         Changes in and Disagreements with Accountants on
                  Accounting and Financial Disclosure.

  None

  Item 9.         Report of the Audit Committee.

  We have reviewed and discussed the audited financial statements for the
  year ended December 31, 2003 with the Company's management and have
  discussed with Albrecht, Viggiano, Zureck & Company, P.C. the matters
  required to be discussed by Statement on Auditing Standards No. 61,
  Communication with Audit Committees. In addition, we have received from
  Albrecht, Viggiano, Zureck & Company, P.C. the written disclosures and the
  letter required by the Independence Standards Board Standard No. 1,
  Independence Discussions with Audit Committees, and we have discussed with
  Albrecht, Viggiano, Zureck & Company, P.C. their independence.

  Based on these reviews and discussions, we recommended to the Board of
  Directors that the audited financial statements be included in our Annual
  Report on Form 10-KSB for the year ended December 31, 2003.

                              THE AUDIT COMMITTEE

     Conrad Gunther, Alan H. Temple, Bruce T. Swan and Martin J. Teitelbaum

  Item 9A.        Controls and Procedures.

  Evaluation of Disclosure Controls and Procedures.       In response to the
  requirements of the Sarbanes-Oxley Act of 2002, as of the end of the
  period covering this report, the evaluation date, our Chief Executive
  Officer and Chief Financial Officer carried out an evaluation of the
  effectiveness of our "disclosure controls and procedures" (as defined in
  the Securities Exchange Act of 1934 Rules 13a-15(e) and15d-15(e)). Based
  on that evaluation, these officers concluded that, as of the evaluation
  date, our disclosure controls and procedures were adequate and effective
  to ensure that material information relating to us and our consolidated
  subsidiaries was made known to them by others within those entities,
  particularly during the period in which this report was being prepared.

  Changes in Internal Controls.   There were no changes in our internal
  controls over the financial reporting, identified in connection with the
  evaluation of such internal controls that occurred during our last fiscal
  quarter, that have materially affected, or are reasonably likely to
  materially affect, our internal controls over financial reporting.

  <PAGE> 13

  PART III

  Item 10.                Our Directors and Executive Officers

  Board of Directors

  Our Certificate of Incorporation and Bylaws provide for our business to be
  managed by or under the direction of the Board of Directors. Under our
  Certificate of Incorporation and Bylaws, the number of directors is fixed
  from time to time by the board of Directors. The Board of Directors
  currently consists of five members. Directors are elected for a period of
  one year and thereafter serve, subject to the bylaws, until the next
  annual meeting at which their successors are duly elected by the
  stockholders.
  <TABLE>
  <CAPTION>
  Name                        Age      Position(s) with the Company
  -----------------------    ------    --------------------------------------------
  <S>                        <C>       <S>
  Leonard A. Rosenbaum         58      Director, Chief Executive Officer, President
  Alan H. Temple Jr.           70      Director
  Martin J. Teitelbaum         54      Director, Assistant Secretary
  Conrad Gunther               57      Director
  Bruce T. Swan                71      Director
  Glen R. Charles              50      Chief Financial Officer, Secretary
  </TABLE>

  Leonard Rosenbaum
  -----------------

  Leonard Rosenbaum founded the Company in 1982 and has been its President,
  Chief Executive Officer and a Director since that date. From 1971 until
  the time of his affiliation with the Company in 1982, Mr. Rosenbaum was
  President, Director and principal stockholder of Nav-Tec Industries, a
  manufacturer of semiconductor processing equipment similar to the type of
  equipment presently manufactured by the Company. From 1966 to 1971, Mr.
  Rosenbaum was employed by a division of General Instrument, a manufacturer
  of semiconductor materials and equipment.

  Alan H. Temple
  --------------

  Alan H. Temple Jr. has been the President of Harrison Homes Inc, a
  building and consulting firm located in Pittsford, New York since 1977

  Martin J. Teitelbaum
  --------------------

  Martin Teitelbaum is an attorney, who since 1988, has conducted his own
  private practice, the Law Offices of Martin J. Teitelbaum. Prior to
  establishing his own firm, from 1977 to 1987, Mr. Teitelbaum was a partner
  in the law firm of Guberman and Teitelbaum. Mr. Teitelbaum became a member
  of the Board of Directors for the Company in 1985. From September, 1986
  until December, 1986, he served as corporate secretary and served again as
  corporate secretary from August, 1997 to February 1998. Since January,
  1987 he has served as the assistant secretary. Mr. Teitelbaum serves as
  general counsel to the Company.

  Conrad Gunther
  --------------

  Conrad Gunther was elected to the Board of Directors at the annual meeting
  in 2000. In January 2002, Mr. Gunther formed First City Capital Corp. with
  his 50% partner. First City was organized as a financial consulting firm
  providing loan and equity placement services. There are no other

  <PAGE> 14

  employees in the Company and the firm has yet to generate any revenue. In
  July 2000, Mr. Gunther formed E-Billsolutions, Inc. to provide credit card
  processing to high risk merchants. These merchants are internet, mail order
  and telephone order businesses selling products such as prepaid telephone
  cards, sunlamps and coffee through "infomercials" or through inbound
  telemarketing. They are unable to qualify for traditional credit card
  processing. Mr. Gunther is the sole employee of E-Billsolutions, Inc..
  From 1995 until December 2000, Mr. Gunther was the managing director at
  the Allied Group, an insurance brokerage firm. Prior to that time, he was
  Executive Vice President of both North Fork Bank and European American
  Bank. Mr. Gunther was also a Director of Reliance Bancorp until its sale
  in 2000 to North Fork Bank.

  Bruce T. Swan
  -------------

  Bruce Swan was appointed a member of the Board of Directors on September
  23, 2003. Mr. Swan has extensive banking, export and international credit
  experience. Mr. Swan has held the positions of Deputy Manager at Brown
  Brothers Harriman and Co., Assistant Treasurer at Standard Brands
  Incorporated, Assistant Treasurer at Monsanto Corporation, Vice President
  and Treasurer at AM International Inc. and President and Founder of Export
  Acceptance Company. Mr. Swan has served as an adjunct faculty member of
  New York University's Stern School of Business Administration.

  Glen R. Charles
  ---------------

  Mr. Charles has been the Chief Financial Officer and Secretary of the
  Company since January 2004. Prior to Mr. Charles employment with the
  Company, he was the Director of Financial Reporting for Jennifer
  Convertibles, Inc., a publicly held company traded on the American Stock
  Exchange. Jennifer Convertibles, Inc. is the owner and licensor of the
  largest group of sofabed specialty  retail stores in the United States. From
  1994 to 2002, he was the Chief Financial Officer of Trans Global Services,
  Inc., a publicly held Nasdaq traded company, which is a provider of
  temporary technical services to the aerospace, aircraft, electronics and
  telecommunications markets. Mr. Charles also had his own business in the
  private practice of accounting.

  THE BOARD AND ITS COMMITTEES

  Committees and Meetings

  Our directors are elected at the Annual Meeting of Stockholders and hold
  office until their successors are elected and qualified. Our officers are
  appointed by the Board of Directors and serve at the pleasure of the Board
  of Directors. [We currently do not have a nominating committee.]

  The Board of Directors held 5 meetings during the 2003 fiscal year. None
  of the directors attended fewer than 75% of the number of meetings of the
  Board of Directors or any committee of which he is a member held during
  the period in which he served as a director or committee member, as
  applicable.

  Compensation and Option Committee.  The Board of Directors serves as the
  Compensation and Option Committee. Leonard Rosenbaum abstains from any
  matters involving his executive compensation.

  Audit Committee.  The Board of Directors has a separately-designated
  standing Audit Committee that consists of Conrad Gunther, Alan H. Temple,
  Bruce T. Swan and Martin J. Teitelbaum. During the fiscal year ended
  December 31, 2003, the Audit Committee held five meetings. The Audit
  Committee is empowered to review the engagement of our independent public
  accountants and the independence of the public accounting firm. The Audit
  Committee also reviews the audit and non audit fees of the

  <PAGE> 15

  independent public accountants and the results of their audit. Furthermore,
  the committee reviews the adequacy of our internal control procedures, the
  structure of our financial organization and the implementation of our
  financial and accounting policies. Messrs. Gunther, Temple and Swan are
  "independent" as defined in Section 121(B) of the American Stock Exchange
  original listing requirements. The Board of Directors has adopted and
  amended a written charter for the Audit Committee.

  Audit Committee Financial Experts

  Under new SEC rules, companies are required to disclose whether their
  audit committees have an "audit committee financial expert" as defined in
  Item 401(h) of Regulation S-K under the Securities Exchange Act of 1934
  and whether that expert is "independent" as that term is used in Item
  7(d)(3)(iv) of Schedule 14A under the Exchange Act. The Board of Directors
  has determined that Conrad Gunther is an"audit committee financial expert"
  and is also "independent".

  Code of Ethics

  A corporate code of ethics that applies to our principal executive officer,
  principal financial officer, principal accounting officer or controller, or
  persons performing similar functions is in the process of being prepared

  Item 11.        Executive Compensation

  Summary Compensation Table
  The following table sets forth compensation paid for the years ending
  December 31, 2003, 2002 and 2001, or such shorter period as such employees
  were employed by us, to those persons who were either (a) the chief
  executive officer as of December 31, 2003 or (b) one of our four other
  most highly compensated executive officers or executive employees as of
  December 31, 2003 whose total annual salary and other compensation
  exceeded $100,000 (collectively with the Chief Executive Officer, the
  "Named Executive Officers").
  <TABLE>
  <CAPTION>
                                  Annual Compensation              Long -term Compensation
                                                                    Awards         Payouts
                                                                      Securities
  Name and principal                                                 Underlying
  position                        Year       Salary       Bonus        options/
  -----------------------        ------    ----------    -------    -------------  --------
  <S>                            <C>       <C>           <C>        <C>            <C>
                                           $             $          #
    (a)                           (b)       (c)                      (g)
  Leonard A. Rosenbaum           2003       165,645                  15,000(1)
    President and Chief          2002       165,478       20,000       0
    Executive Officer            2001       170,434                    0

  <FN>
  ________________
  (1) On September 23, 2003, Mr. Rosenbaum was granted options to purchase
  15,000 shares of our common stock at $1.40 per share.
  </TABLE>

  The company is the owner of a life insurance policy on the life of Leonard
  Rosenbaum in the amount of $2,000,000. The Company is the sole beneficiary
  of said policy.

  <PAGE> 16

  Item 12.    Security Ownership of Certain Beneficial Owners and Management

  The following table sets forth, as of March 4, 2004, information regarding
  the beneficial ownership of our common stock by (a) each person who is
  known to us to be the owner of more than five percent of our common stock,
  (b) each of our directors, (c) each of the named executive officers, and
  (d) all directors and executive officers and executive employees as a
  group.
  <TABLE>
  <CAPTION>
                                               Amounts and Nature of      Percent of Class
  Name and Address of Beneficial Owner        Beneficial Ownership (1)          (%)
  ----------------------------------------    ------------------------    ----------------
  <S>                                         <C>                         <C>
  Leonard A. Rosenbaum                              1,307,950 (2)               43.0
  Alan H. Temple Jr.                                  203,500 (3)                6.7
  Martin J. Teitelbaum                                 33,500 (4)                1.1
  Conrad Gunther                                        7,500 (5)                0.2
  All directors and executive officers and
  executive employees as a group (four (4)
  persons)                                          1,552,450                   51.1
  <FN>
  (1) All of such shares are owned directly with sole voting and investment
      power, unless otherwise noted below.

  (2) Includes 7,500 shares of our common stock underlying exercisable options
      which are currently exercisable options, but does not include 17,500
      shares of common stock which are not currently exercisable.

  (3) Includes an aggregate of 21,000 shares held by Mr. Temple's wife, as
      to which he disclaims beneficial interest and 7,500 shares of our
      common stock underlying exercisable options. Does not include 17,500
      shares of our common stock which are not currently exercisable.

  (4) Includes 2,000 shares held by Mr. Teitelbaum's wife and beneficial
      ownership thereof is disclaimed by Mr. Teitelbaum and 7,500 shares of
      our common stock underlying exercisable options. Does not include
      17,500 shares of our common stock underlying options which are not
      currently exercisable.

  (5) Includes 7,500 shares of our common stock underlying exercisable
      options. Does not include 17,500 shares of our common stock underlying
      options which are not currently exercisable.
  </TABLE>

  Section 16(A) Beneficial Ownership Reporting Compliance

  The rules of the Securities and Exchange Commission require us to disclose
  late filings of reports of stock ownership and changes in stock ownership
  by our directors, officers and ten percent stockholders. To our knowledge,
  based solely on our review of (a) the copies of such reports and
  amendments thereto furnished to us and (b) written representations that no
  other reports were required, during our fiscal year ended December 31,
  2003, all of the filings for our officers, directors and ten percent
  stockholders were made on a timely basis.

  Item 13.        Certain Relationships and Related Transactions

  During 2003, the Company incurred approximately $41,000 in legal fees to
  Martin J. Teitelbaum, a director of the Company and principal attorney for
  the law offices of Martin J. Teitelbaum.

  <PAGE> 17

  Item 14.        Principal Accounting Fees and Services

  The following table presents fees for professional audit services rendered
  by Albrecht, Viggiano, Zureck and Company. P.C. for the audit of our
  annual financial statements for the years ended December 31, 2003 and
  December 31, 2002 and fees billed for other services rendered by Albrecht,
  Viggiano, Zureck and Company, P.C. during those periods.
  <TABLE>
  <CAPTION>
                                     2003          2002
                                   --------      --------
  <S>                              <C>           <C>
  Audit fees: (1)                  $57,000       $50,350

  Audit related fees: (2)            3,675         4,710

  Tax fees: (3)                      3,000         3,000

  Total                            $63,675       $58,060
  <FN>
  (1) Audit fees consisted of audit work performed in the preparation and
  review of our annual financial statements and review of financial
  statements included in our quarterly reports filed with the Securities
  and Exchange Commission.
  (2) Audit related fees consisted principally of assistance in connection
  with the interpretation of comment letters we received from the SEC
  regarding our annual statement for fiscal year 2002 and quarterly
  statements for March 31, 2003, June 30, 2003 and September 30, 2003.
  (3) Tax fees consisted principally of tax preparation, compliance,
  advisory and planning services.
  </TABLE>

  PART IV

  Item 15.    Exhibits, Financial Statement Schedules and Reports on form 8-K.

  (a)     (1) Financial Statements
                The financial statements required by this item are submitted
                 in a separate section beginning on Page F-3 of this report.

          (2) Financial Statement Schedules
                Schedules have been omitted because of the absence of
                 conditions under which they are required or because the
                 required information is included in the financial statements
                 or notes thereto.

  (3)     Exhibits

  3.1 Certificate of Amendment dated October 12, 1982 of Certificate of
       Corporation incorporated  herein by reference to Exhibit 3.1 to our
       Registration No. 2-97210-NY.

  3.2 Certificate of Amendment dated April 25, 1985 of Certificate of
       Corporation incorporated  herein by reference to Exhibit 3.1 to our
       Registration No. 2-97210-NY.

  3.3 Certificate of Amendment dated August 12, 1985 of Certificate of
       Corporation incorporated herein by reference to Exhibit 3.1 to our
       Registration No. 2-97210-NY.

  10.1 Form of Non-Qualified Stock Option Agreement with certain directors,
       officers and employees of CVD Equipment Corporation incorporated herein
       by reference to our Registration Statement on Form S-8 No. 33-30501,
       filed August 15, 1989.

  <PAGE> 18

  10.2 Purchase at public auction the inventory, tangible assets, intangible
  assets and intellectual property of Stainless Design Corporation
  incorporated  herein by reference to our Form 8-K filed on December 31,
  1998.

  10.3 Purchase a 22,000 square foot facility from Kidco Realty incorporated
       herein by  reference to our Form 8-K filed on December 31, 1998.

  10.4 Purchase a 50,000 square foot facility from Arrow Electronics
       incorporated herein by reference to our Form 8-K filed on November 12,
       2001.

  10.5 Purchase substantially all of the assets of Research Inc.'s Surface
       Mount Technology business incorporated herein by reference to our Form
       8-K filed on November 12, 2001.

  10.6 Purchase substantially all of the assets of Conceptronic Inc.'s Surface
       Mount Technology business incorporated herein by reference to our Form
       8-K filed on July 1, 2002.

  23.1 Consent of Albrecht, Viggiano Zureck & Company, P.C. *

  31.1 Certification of Chief Executive Officer. *

  31.2 Certification of Chief Financial Officer. *

  32.1 Certification of Principal Executive Officer pursuant to U.S.C. Section
       1350. *

  32.2 Certification of Principal Financial Officer pursuant to U.S.C. Section
       1350. *
  * Filed herewith

  (b)   Reports on Form 8-K.
        (1) On October 2, 2003 we filed a current report on Form 8-K
            announcing the appointment of Bruce T. Swan as a member of the
            Board of Directors.

  (c)   Exhibits.
        See (a) (3) above.

  (d)   Financial Statement Schedules.
        See (a) (2) above

  <PAGE> 19
                                   SIGNATURES

  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.

                           CVD EQUIPMENT CORPORATION

                           By: /s/ Leonard A. Rosenbaum
                               -------------------------
                           Name:  Leonard A. Rosenbaum
                           Title: President and Chief Executive Officer

  Pursuant to the requirements of the Securities Exchange Act of 1934, this
  report has been signed below by the following persons on behalf of the
  registrant and in the capacities and on the dates indicated below.
  <TABLE>
  <CAPTION>
          NAME                                    POSITION                          DATE
  -------------------------  -----------------------------------------------    --------------
  <S>                        <S>                                                <S>
  /s/ Leonard A Rosenbaum    President, Chief Executive Officer and Director    March 30, 2004
  ------------------------
  Leonard A. Rosenbaum       (Principal Executive Officer)

  /s/ Alan H. Temple Jr.     Director                                           March 30, 2004
  ------------------------
  Alan H. Temple Jr.

  /s/ Martin J. Teitelbaum   Director and Assistant Secretary                   March 30, 2004
  ------------------------
  Martin J. Teitelbaum

  /s/ Conrad Gunther         Director                                           March 30, 2004
  ------------------------
  Conrad Gunther

  /s/ Bruce T. Swan          Director                                           March 30, 2004
  ------------------------
  Bruce T. Swan

  /s/  Glen R. Charles       Chief Financial Officer and Secretary              March 30, 2004
  ------------------------
  Glen R. Charles            (Principal Financial and Accounting Officer)

  </TABLE>

  <PAGE> 20

                                                                  Exhibit 31.1
  Certifications Pursuant to Rule 13A-14 or 15D-14 of the Securities Exchange
  Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
                                      2002

  I, Leonard A. Rosenbaum, certify that:

  1. I have reviewed this annual report on Form 10-KSB  of  CVD Equipment
       Corporation;

  2. Based upon my knowledge, this quarterly report does not contain any
       untrue statement of a material fact or omit to state a material fact
       necessary to make the statements made, in light of the circumstances
       under which such statements were made, not misleading with respect to
       the period covered by this annual report.

  3. Based upon my knowledge, the financial statements, and other financial
       information included in this annual report, fairly present in all
       material respects the financial condition, results of operations and
       cash flows of the registrant as of, and for, the periods presented in
       this annual report.

  4. The registrant's other certifying officer and I are responsible for
       establishing and maintaining disclosure controls and procedures (as
       defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
       have:

            a. Designed such disclosure controls and procedures to ensure that
            material information relating to the registrant, including its
            consolidated subsidiaries, is made known to us by others within
            those entities, particularly during the period in which this
            annual report is being prepared;
            b. Evaluated the effectiveness of the registrant's disclosure
            controls and procedures as of a date within 90 days prior to the
            filing date of this annual report (the "Evaluation Date"); and
            c. Presented in this annual report our conclusions about the
            effectiveness of the disclosure controls and procedures based on
            our evaluation as of the Evaluation Date.

  5. The registrant's other certifying officer and I have disclosed, based on
       our most recent evaluation, to the registrant's auditors and the audit
       committee of the registrants' board of directors (or persons performing
       the equivalent functions):

            a. All significant deficiencies in the design or operation of
            internal controls which could adversely affect the registrant's
            ability to record, process, summarize and  report financial data
            and have identified for the registrant's auditors any material
            weakness in internal controls; and
            b. Any Fraud, whether or not material, that involves management or
            other employees who have a significant role in the registrant's
            internal controls.

  6. The registrant's other certifying officer and I have indicated in this
       annual report whether or not there were significant changes in internal
       controls or in other factors that could significantly affect internal
       controls subsequent to the date of our most recent evaluation,
       including any corrective actions with regard to significant
       deficiencies and material weaknesses.

    Dated: March 30, 2004

    /s/ Leonard A. Rosenbaum
  ----------------------------------------
    President, Chief Executive Officer and Director

  <PAGE> 21

                                                                  Exhibit 31.2
  Certifications Pursuant to Rule 13A-14 or 15D-14 of the Securities Exchange
  Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
                                      2002

  I, Glen R. Charles, certify that:

  1. I have reviewed this annual report on Form 10-KSB  of  CVD Equipment
       Corporation;

  2. Based upon my knowledge, this annual report does not contain any untrue
       statement of a material fact or omit to state a material fact necessary
       to make the statements made, in light of the circumstances under which
       such statements were made, not misleading with respect to the period
       covered by this annual report.

  3. Based upon my knowledge, the financial statements, and other financial
       information included in this annual report, fairly present in all
       material respects the financial condition, results of operations and
       cash flows of the registrant as of, and for, the periods presented in
       this annual report.

  4. The registrant's other certifying officer and I are responsible for
       establishing and maintaining disclosure controls and procedures (as
       defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
       have:

            a. Designed such disclosure controls and procedures to ensure that
            material information relating to the registrant, including its
            consolidated subsidiaries, is made known to us by others within
            those entities, particularly during the period in which this
            annual report is being prepared;
            b.  Evaluated the effectiveness of the registrant's disclosure
            controls and procedures as of a date within 90 days prior to the
            filing date of this annual report (the "Evaluation Date"); and
            c. Presented in this annual report our conclusions about the
            effectiveness of the disclosure controls and procedures based on
            our evaluation as of the Evaluation Date.

  5. The registrant's other certifying officer and I have disclosed, based on
       our most recent evaluation, to the registrant's auditors and the audit
       committee of the registrants' board of directors (or persons performing
       the equivalent functions):

            a. All significant deficiencies in the  design or operation of
            internal controls which could adversely affect the registrant's
            ability to record, process, summarize and  report financial data
            and have identified for the registrant's auditors any material
            weakness in internal controls; and
            b. Any Fraud, whether or not material, that involves management or
            other employees who have a significant role in the registrant's
            internal controls.

  6. The registrant's other certifying officer and I have indicated in this
       annual report whether or not there were significant changes in internal
       controls or in other factors that could significantly affect internal
       controls subsequent to the date of our most recent evaluation,
       including any corrective actions with regard to significant
       deficiencies and material weaknesses.

    Dated: March 30, 2004

    /s/ Glen R. Charles
  ----------------------------------------
    Chief Financial Officer

  <PAGE> 22

                                                                  Exhibit 32.1

                  Certification of Principal Executive Officer
                        Pursuant to U.S.C. Section 1350
        As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
                                      2002



  I, Leonard A. Rosenbaum, President and Chief Executive Officer of CVD
  Equipment Corporation, hereby certifies, to my knowledge, that the annual
  report on Form 10-KSB for the period ending December 31, 2003 of CVD
  Equipment Corporation (the "Form 10-KSB") fully complies with the
  requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of
  1934 and the information contained in the Form 10-KSB fairly presents, in
  all material respects, the financial condition and results of operations
  of CVD Equipment Corporation.


  Dated: March 30, 2004   /s/  Leonard A. Rosenbaum
                          --------------------------
                          Leonard A. Rosenbaum
                          Chief Executive Officer
                          (Principal Executive Officer)

  <PAGE> 23


                                                                  Exhibit 32.2

                  Certification of Principal Financial Officer
                        Pursuant to U.S.C. Section 1350
        As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
                                      2002



  I, Glen R. Charles, Chief Financial Officer of CVD Equipment Corporation,
  hereby certifies, to my knowledge, that the annual report on Form 10-KSB
  for the period ending December 31, 2003 of CVD Equipment Corporation (the
  "Form 10-KSB") fully complies with the requirements of Section 13 (a) or
  15 (d) of the Securities Exchange Act of 1934 and the information
  contained in the Form 10-KSB fairly presents, in all material respects,
  the financial condition and results of operations of CVD Equipment
  Corporation.


  Dated: March 30, 2004   /s/  Glen R. Charles
                          ---------------------
                          Glen R. Charles
                          Chief Financial Officer
                          (Principal Financial Officer)


  <PAGE> 24








                 CVD EQUIPMENT CORPORATION, INC AND SUBSIDIARY
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
  <TABLE>
  <CAPTION>

                                                                     Page No.
                                                                    ----------
  <S>                                                               <S>
  INDEPENDENT AUDITORS' REPORT                                           F-3


  FINANCIAL STATEMENTS:

  Consolidated Balance Sheets as of December 31, 2003 and 2002           F-4

  Consolidated Statements of Operations
    for the Years Ended December 31, 2003 and 2002                       F-5

  Consolidated Statements of Stockholders' Equity for the Years Ended
    December 31, 2003 and 2002                                           F-6

  Consolidated Statements of Cash Flows for the Years Ended
    December 31, 2003 and 2002                                           F-7

  Notes to Consolidated Financial Statements                             F-8

  </TABLE>

  <PAGE> 25

                                      F-3

  A L B R E C H T ,  V I G G I A N O ,  Z U R E C K
          &  C O M P A N Y ,  P . C .
                                                 CERTIFIED PUBLIC ACCOUNTANTS
                                                             25 SUFFOLK COURT
                                                         HAUPPAUGE, NY  11788
                                                               (631) 434-9500



                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------

  To the Board of Directors and Stockholders
  CVD Equipment Corporation
  Ronkonkoma, New York


  We have audited the accompanying consolidated balance sheets of CVD
  Equipment Corporation and Subsidiary (the "Company") as of December 31,
  2003 and 2002, and the related consolidated statements of operations,
  stockholders' equity, and cash flows for the years then ended.  These
  financial statements are the responsibility of the Company's
  management. Our responsibility is to express an opinion on these
  financial statements based on our audits.

  We conducted our audits in accordance with auditing standards generally
  accepted in the United States of America.  Those standards require that
  we plan and perform the audit to obtain reasonable assurance about
  whether the consolidated financial statements are free of material
  misstatement.  An audit includes examining, on a test basis, evidence
  supporting the amounts and disclosures in the consolidated financial
  statements.  An audit also includes assessing the accounting principles
  used and significant estimates made by management, as well as evaluating
  the overall financial statement presentation.  We believe that our audits
  provide a reasonable basis for our opinion.

  In our opinion, the consolidated financial statements referred to above
  present fairly, in all material respects, the financial position of CVD
  Equipment Corporation and Subsidiary as of December 31, 2003 and 2002 and
  their results of operations and its cash flows for the years then ended,
  in conformity with accounting principles generally accepted in the United
  States of America.




  Hauppauge, New York
  February 20, 2004


  <PAGE> 26

                                      F-4

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                          CONSOLIDATED BALANCE SHEETS
                           December 31, 2003 and 2002
  <TABLE>
  <CAPTION>
                                                               2003            2002
                                                           ------------    ------------
  <S>                                                      <C>             <C>
  ASSETS
  Current Assets
    Cash and cash equivalents                              $   321,490     $   323,537
    Accounts receivable, net                                 1,819,744       1,852,794
    Costs and estimated earnings in excess of billings
     on uncompleted contracts                                  575,734         783,646
    Inventories                                              1,425,851       2,023,487
    Other current assets                                        74,247         194,232
                                                           ------------    ------------
                                    Total Current Assets     4,217,066       5,177,696

  Property, plant and equipment, net                         5,400,032       5,630,375

  Deferred income taxes                                        440,362         344,074

  Other assets                                                 144,458         138,974

  Intangible assets, net                                       122,977         136,393
                                                           ------------    ------------
                                            Total Assets   $10,324,895     $11,427,512
                                                           ============    ============

  LIABILITIES AND STOCKHOLDERS' EQUITY
  Current Liabilities
    Current maturities of long-term debt                   $   177,381     $   177,124
    Short-term note payable                                      -0-           350,000
    Accounts payable                                           520,525         938,056
    Accrued expenses                                           488,011         336,702
    Billings in excess of costs on uncompleted contracts       174,068         146,387
                                                           ------------    ------------

                               Total Current Liabilities     1,359,985       1,948,269
  Long-term debt, net of current portion                     3,336,400       3,513,783
                                                           ------------    ------------

                                                             4,696,385       5,462,052
                                                           ------------    ------------
  Commitments and Contingencies
  Stockholders' Equity
    Common stock - $0.01 par value - 10,000,000 shares
     authorized; 3,039,100 shares issued and outstanding
     at December 31, 2003 and 2002.                             30,391          30,391
    Additional paid-in capital                               2,902,149       2,902,149
    Retained earnings                                        2,695,970       3,032,920
                                                           ------------    ------------
                              Total Stockholders' Equity     5,628,510       5,965,460
                                                           ------------    ------------

              Total Liabilities and Stockholders' Equity   $10,324,895     $11,427,512
                                                           ============    ============
  <FN>
                 See notes to consolidated financial statements
  </TABLE>

  <PAGE> 27
                                      F-5

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                     Years ended December 31, 2003 and 2002

  <TABLE>
  <CAPTION>
                                                               2003            2002
                                                           ------------    ------------
  <S>                                                      <C>             <C>
  Revenue
    Revenue on completed contracts                         $ 9,065,679     $ 7,800,317
    Revenue on uncompleted contracts                           722,260       1,441,491
                                                           ------------    ------------

                                                             9,787,939       9,241,808
                                                           ------------    ------------
  Costs of revenue
    Costs on completed contracts                             7,180,226       5,440,484
    Costs on uncompleted contracts                             303,771         764,799
                                                           ------------    ------------
                                                             7,483,997       6,205,283
                                                           ------------    ------------

  Gross profit                                               2,303,942       3,036,525
                                                           ------------    ------------

  Operating expenses
    Selling and shipping                                       740,266         903,016
    General and administrative                               2,164,181       2,467,074
                                                           ------------    ------------

  Total operating expenses                                   2,904,447       3,370,090
                                                           ------------    ------------

  Operating loss                                              (600,505)       (333,565)
                                                           ------------    ------------

  Other Income (expense)
    Interest income                                              1,243          25,221
    Interest expense                                          (208,944)       (139,343)
    Gain on sale of fixed assets                                 -0-             2,500
    Other income                                               310,042         543,527
                                                           ------------    ------------
  Total other income, net                                      102,341         431,905
                                                           ------------    ------------

    (Loss) income before income tax benefit                   (498,164)         98,340
  Income Tax Benefit                                           161,214          69,862

  Net (loss) income                                        $  (336,950)    $   168,202
                                                           ============    ============


  Basic (loss) income per common share                     $    (0.11)     $     0.06
  Diluted (loss) income per common share                   $    (0.11)     $     0.05

  Weighted average common shares outstanding
    basic income per share                                   3,039,100       3,036,530

  Effect of potential common share issuance:
    Stock options                                                 0             88,203
                                                           ------------    ------------
  Weighted average common shares outstanding
    diluted income per share                                 3,039,100       3,124,733

  <FN>
                 See notes to consolidated financial statements
  </TABLE>

  <PAGE> 28
                                      F-6

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                     Years ended December 31, 2003 and 2002
  <TABLE>
  <CAPTION>
                                               Additional                         Total
                                  Common          Paid-In        Retained
                               Stockholders'
                                  Stock           Capital        Earnings         Equity
                               ------------    ------------    ------------    ------------
  <S>                          <C>             <C>             <C>             <C>
  Balance as of
    December 31, 2001          $    30,323     $ 2,892,416     $ 2,864,718     $ 5,787,457

  Compensatory stock options            68           9,733                           9,801

  Net income                                                       168,202         168,202
                               ------------    ------------    ------------    ------------

  Balance as of
    December 31, 2002               30,391       2,902,149       3,032,920       5,965,460

  Net loss                                                        (336,950)       (336,950)
                               ------------    ------------    ------------    ------------

  Balance as of
    December 31, 2003          $    30,391     $ 2,902,149     $ 2,695,970     $ 5,628,510
                               ============    ============    ============    ============

  <FN>
                 See notes to consolidated financial statements
  </TABLE>

  <PAGE> 29
                                      F-7

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                     Years ended December 31, 2003 and 2002
  <TABLE>
  <CAPTION>
                                                               2003            2002
                                                           ------------    ------------
  <S>                                                      <C>             <C>
  Cash flows from operating activities
    Net (loss) income                                      $  (336,950)    $   168,202
    Adjustments to reconcile net (loss) income to net
     cash provided by (used in) operating activities:
      Deferred benefit provision                               (96,288)        (75,451)
      Depreciation and amortization                            351,579         294,721
      Gain on sale of fixed assets                               -0-            (2,500)
      Bad debt provision                                         1,241          (8,447)
      Changes in operating assets and liabilities:
        Accounts receivable                                     31,808        (632,110)
        Costs and estimated earnings in excess
          of billings on uncompleted contracts                 207,912        (425,624)
        Inventory                                              597,636      (1,194,447)
        Other current assets                                   119,985        (173,963)
        Other assets                                           (45,902)        118,007
        Accounts payable                                      (417,529)        784,724
        Accrued expenses                                       151,307         (41,529)
        Billings in excess of costs
          on uncompleted contracts                              27,681         146,387
                                                           ------------    ------------

  Net cash provided by (used in) operating activities          592,480      (1,042,030)
                                                           ------------    ------------

  Cash flows from investing activities
    Capital expenditures                                       (67,403)     (1,980,912)
    Proceeds from sale of fixed assets                           -0-             2,500
                                                           ------------    ------------

                Net cash used in investing activities          (67,403)     (1,978,412)
                                                           ------------    ------------

  Cash flows from financing activities
    Proceeds from the exercise of options                        -0-             9,801
    Payments of long-term debt                                (177,124)       (133,222)
    Payments of short-term debt                             (1,374,000)          -0-
    Proceeds of long-term debt                               1,024,000       1,106,250
                                                           ------------    ------------

  Net cash (used in) provided by financing activities         (527,124)        982,829
                                                           ------------    ------------

  Net decrease in cash and cash equivalents                     (2,047)     (2,037,613)

  Cash and cash equivalents at beginning of year               323,537       2,361,150
                                                           ------------    ------------

  Cash and cash equivalents at end of year                 $   321,490     $   323,537
                                                           ------------    ------------


  <FN>
                 See notes to consolidated financial statements
  </TABLE>

  <PAGE> 30
                                      F-8

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002

  Note 1 - Business Description

  CVD Equipment Corporation and Subsidiary (the "Company"), a New York
  corporation, was organized and commenced operations in October 1982.  Its
  principal business activities include the manufacturing of chemical vapor
  deposition equipment, customized gas control systems, and a line of
  furnaces, all of which are used primarily to produce semiconductors and
  other electronic components.  The Company engages in business throughout
  the United States and the world.

  Note 2 - Summary of Significant Accounting Policies

  Principles of Consolidation

  The consolidated financial statements include the accounts of CVD
  Equipment Corporation and its wholly-owned subsidiary.  In December
  1998, a subsidiary, Stainless Design Concepts, Ltd., was formed as a
  New York corporation.  In April 1999, this subsidiary was merged into
  CVD Equipment Corporation.  The Company has one inactive subsidiary,
  CVD Materials Corporation as of December 31, 2003 and 2002.  All
  significant intercompany accounts and transactions have been eliminated
  in consolidation.

  Use of Estimates

  The preparation of financial statements in conformity with accounting
  principles generally accepted in the United States of America requires
  management to make estimates and assumptions that affect the reported
  amounts of assets and liabilities and disclosure of contingent assets and
  liabilities at the date of the financial statements and the reported
  amounts of revenues and expenses during the reporting period.  Actual
  results could differ from those estimates.  Estimates are used when
  accounting for certain items such as long-term contracts, allowance for
  doubtful accounts, depreciation and amortization, taxes and warranties.

  Revenue and Income Recognition

  In December 1999, the SEC released Staff Accounting Bulletin No. 101
  ("SAB No. 101"), "Revenue Recognition in Financial Statements", providing
  the staff's views in applying accounting principles generally accepted in
  the United States to certain revenue recognition issues.  The Company
  adopted SAB No. 101, as amended in the fourth quarter of 2000 as
  required.  The adoption of SAB No. 101 did not have a material effect on
  the Company's consolidated financial position, results of operations or
  cash flows.

  The Company recognizes revenues and income using the percentage-of-
  completion method for complex major products while revenues from other
  products are recorded when such products are accepted and shipped.
  Profits on contracts for complex major products are recorded on the basis
  of the Company's estimates of the percentage-of-completion of individual
  contracts, commencing when progress reaches a point where experience is
  sufficient to estimate final results with reasonable accuracy.  Under
  this method, revenues are recognized based on costs incurred to date
  compared with total estimated costs.

  <PAGE> 31
                                      F-9

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002

  Note 2 - Summary of Significant Accounting Policies (continued)

  Revenue and Income Recognition (continued)
  The asset, "Costs and estimated earnings in excess of billings on
  uncompleted contracts," represents revenues recognized in excess of
  amounts billed.

  The liability, "Billings in excess of costs on uncompleted contracts,"
  represents amounts billed in excess of revenues earned.

  Inventories

  Inventories are valued at the lower of cost or market.  The Company uses
  a cost system which approximates the first-in, first-out method.

  Reclassifications

  Certain items have been reclassified in the 2002 financial statements
  to conform to the 2003 presentation.  These reclassifications have no
  effect on the net income previously reported.

  Income Taxes

  Deferred tax assets and liabilities are determined based on the
  estimated future tax effects of temporary differences between the
  financial statements and tax bases of assets and liabilities, as
  measured by the current enacted tax rates.  Deferred tax expense
  (benefit) is the result of changes in the deferred tax assets and
  liabilities.  A valuation allowance is not considered necessary by
  management since it is more likely than not that the deferred tax asset
  will be realized.  An allowance may be necessary in the future based on
  changes in economic conditions.

  Property, Plant and Equipment

  Property, plant and equipment are stated at cost, net of accumulated
  depreciation and amortization.  Expenditures for maintenance and repairs
  are charged against operations as incurred.  The cost of certain labor
  and overhead which is expected to benefit future periods, has been
  capitalized and amortized.  Depreciation and amortization are computed by
  the straight-line method for financial purposes over the following
  estimated useful lives:
  <TABLE>
  <CAPTION>
                                                             Estimated
                                                             Useful Life
                                                             ------------
                          <S>                                <C>

                          Buildings                          39 years
                          Building improvements              39 years
                          Machinery and equipment             8 years
                          Capitalized labor and overhead      3 years
                          Furniture and fixtures              8 years
                          Computer equipment                  5 years
                          Transportation equipment            3 years
  </TABLE>

  <PAGE> 32
                                      F-10

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002

  Note 2 - Summary of Significant Accounting Policies (continued)

  Impairment losses on long-lived assets, such as equipment and
  improvements, are recognized when events or changes in circumstances
  indicate that the undiscounted cash flows estimated to be generated by
  such assets are less than their carrying value and, accordingly, all or a
  portion of such carrying value may not be recoverable.  Impairment losses
  are then measured by comparing the fair value of assets to their carrying
  amounts.

  Software Capitalization

  The Company follows Statement of Position 98-1, Accounting for Costs of
  Computer Software Developed or Obtained for Internal Use.  This
  standard requires certain direct development costs associated with
  internal-use software to be capitalized including external direct costs
  of material and services and payroll costs for employees devoting time
  to the software projects.  These costs totaled $55,408 and $57,931 for
  the years ended December 31, 2003 and 2002, respectively, and are
  included in Other Assets.  All software is amortized straight-line over
  its useful life of three years.  Amortization expense related to
  software totaled $31,111 and $19,014 for the years ended December 31,
  2003 and 2002, respectively.

  Intangible Assets

  The cost of intangible assets is being amortized on a straight-line basis
  over their useful lives ranging from 5 to 15 years.  Amortization expense
  recorded by the Company in 2003 and 2002 totaled $13,416 and $8,948,
  respectively.

  Bad Debts

  Accounts receivables are presented net of an allowance for doubtful
  accounts of $19,258 and $18,057 as of December 31, 2003 and 2002,
  respectively.  The allowance is based on prior experience and
  management's evaluation of the collectibility of accounts receivable.
  Management believes the allowance is adequate.  However, further
  additions may be necessary based on changes in economic conditions.

  Product Warranty

  The Company records warranty costs as incurred and does not provide for
  possible future costs.  Management estimates such costs not to be
  material based on prior experience. However, it is reasonably possible
  that this estimate may change in the future.

  Advertising Costs

  The Company expenses advertising costs which are not expected to benefit
  future periods. Advertising expenses included in selling and shipping
  expenses were $16,143 and $21,139 in 2003 and 2002, respectively.  The
  Company capitalizes certain advertising costs included in Other Assets,
  totaling $63,849, to develop a web site and to print brochures expected
  to be used in the future. Capitalized advertising costs are amortized
  straight-line over three years.  Amortization expense related to
  advertising costs totaled $1,428 and $11,729 in 2003 and 2002,
  respectively.

  <PAGE> 33

                                      F-11

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002

  Note 2 - Summary of Significant Accounting Policies (continued)

  Interest Capitalization

  The Company follows the policy of capitalizing interest as a component of
  the cost of property, plant and equipment constructed for its own use.
  This amount is included in building improvements.  During the years ended
  December 31, 2003 and 2002, the Company capitalized interest of
  approximately $-0- and $77,000, respectively.

  Income Per Share

  Basic net (loss) income per common share is computed by dividing the net
  (loss) income by the weighted average number of share of common stock
  outstanding during each period.  Diluted income per share for 2002
  reflects the dilutive effect of the assumed exercise of options.
  Potentially dilutive share (12,620) related to the exercise of stock
  options were excluded from the diluted loss per share calculation for the
  year ended December 31, 2003, because their effects would have been
  antidilutive.


  Cash and Cash Equivalents

  The Company considers all highly liquid financial instruments purchased
  with an original maturity of three months or less at the date of
  purchase to be cash equivalents.

  Concentration of Credit Risk

  Financial instruments that potentially subject the Company to
  concentrations of credit risk consist primarily of cash, cash
  equivalents, and accounts receivable.  The Company places its cash
  equivalents with high credit-quality financial institutions and invests
  its excess cash primarily in money market instruments.  The Company has
  established guidelines relative to credit ratings and maturities that
  seek to maintain safety and liquidity.  The Company sells products and
  services to various companies across several industries in the ordinary
  course of business.  The Company routinely assesses the financial strength
  of its customers and maintains allowances for anticipated losses.  See Note
  15 for concentration details.

  <PAGE> 34

                                      F-12

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002

  Note 2 - Summary of Significant Accounting Policies (continued)


  Fair Value of Financial Instruments

  The carrying amounts of financial instruments including cash and cash
  equivalents, accounts receivable, other assets, accounts payable and
  accrued expenses, approximate fair value due to the relatively short
  maturity of these instruments.  The fair value of securities available-
  for-sale is estimated based on quoted market prices.  The carrying value
  of long-term debt approximates fair value based on borrowing rates
  currently available for loans with similar terms and maturities.

  Stock-Based Compensation

  The Company accounts for stock-based employee compensation under
  Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock
  Issued to Employees", and related interpretations.  The Company has
  adopted the disclosure-only provisions of Statement of Financial
  Accounting Standards ("SFAS") No. 123, "Accounting for Stock-based
  Compensation" and SFAS No. 148, "Accounting for Stock-Based Compensation
  - Transition and Disclosure", which was released in December 2002 as an
  amendment of SFAS No. 123.  No stock-based employee compensation cost is
  reflected in net income (loss), as all options granted under the plans
  had an exercise price at least equal to the market value of the
  underlying common stock on the date of grant.

  Shipping and Handling

  It is the Company's policy to include freight in total sales.  The amount
  included in sales was $48,288 and $18,784 for the years ended December
  31, 2003 and 2002, respectively.  Included in selling and shipping is
  $91,516 and $49,708 for shipping and handling costs for 2003 and 2002,
  respectively.

  Recently Issued Accounting Standards

  In June 2001, the FASB issued SFAS No. 143. Accounting for Asset
  Retirement Obligations.  SFAS No. 143 applies to the accounting and
  reporting obligation associated with the retirement of tangible long-
  lived assets and the associated asset retirement costs.  This Statement
  applies to legal obligations associated with the retirement of long-
  lived assets that result from the acquisition, construction,
  development and/or the normal operation of long-lived assets, except
  for certain obligations of lessees.  The adoption of the Statement is
  required for fiscal years beginning after June 15, 2002.  The adoption
  of SFAS No. 143 is not expected to have a material impact on the
  Company's consolidated financial statements.

  In July 2001, the Financial Accounting Standards Board ("FASB") issued
  Statement No. 141, "Business Combinations" ("SFAS 141") and No. 142
  "Goodwill and Other Intangible Assets" ("SFAS 142").  SFAS No. 141
  provides new guidance on the accounting for a business combination at
  the date a business combination is completed.  Specifically, it
  requires use of the purchase method of accounting for all business
  combinations initiated after June 30, 2001,

  <PAGE> 35

                                      F-13

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002

  Note 2 - Summary of Significant Accounting Policies (continued)
           Recently Issued Accounting Standards (continued)

  thereby eliminating use of the pooling-of-interest method.  SFAS No.
  142 establishes new
  guidance on how to account for goodwill and intangible assets after a
  business combination is completed.  Among other things, it requires
  that goodwill and certain other intangible assets will no longer be
  amortized and will be tested for impairment at least annually and
  written down only when impaired. This statement applies to existing
  goodwill and intangible assets, beginning with
  fiscal years starting after December 15, 2001.  The Company has adopted
  SFAS No.141 and No.142 effective January 1, 2002 but it does not have a
  material impact on the Company's financial position, results of
  operations, or cash flows.

  In August 2002, the FASB issued Statement of Financial Accounting
  Standards No. 144, "Accounting for the Impairment or Disposal of Long-
  Lived Assets", ("SFAS 144").  This standard supersedes SFAS 121,
  "Accounting for the Impairment or Long- Lived Assets to Be Disposed
  Of," and provides a single accounting model for long-lived assets to be
  disposed of.  This standard significantly changes the criteria that
  would have to be met to classify an asset as held-for-sale.  This
  distinction is important because assets to be disposed of are stated at
  the lower of their fair values or carrying amounts and depreciation is
  no longer recognized.  The new rules will also supersede the provisions
  of APB Opinion 30, "Reporting the Results of Operations - Reporting the
  Effects of Disposal of a Segment of a Business, and Extraordinary,
  Unusual and Infrequently Occurring Events and Transactions, " ("APB
  30") with regard to reporting the effects of a disposal of a segment of
  a business and will require expected future operating losses from
  discontinued operations to be displayed in discontinued operations in
  the period in which the losses are incurred, rather than as of the
  measurement date as presently required by APB 30.  This statement is
  effective for fiscal years beginning after December 15, 2001.  The
  Company does not expect that the adoption of SFAS 144 will have a
  material impact on its operations or financial position.

  In April 2002, the FASB issued Statement No. 145 ("SFAS 145")
  "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB
  Statement No. 13, and Technical Corrections," which supersedes FASB
  issued Statement No. 4, "Reporting Gains and Losses from Extinguishment
  of Debt," FASB issued Statement No. 44," Accounting for Intangible
  Assets of Motor Carriers," and FASB issued Statement No. 64,
  "Extinguishment of Debt Made to Satisfy Sinking-Fund Requirements."

  This statement also amends FASB issued Statement No. 13, "Accounting
  for Leases," to eliminate as inconsistency between the required
  accounting for sale-leaseback transactions and the required accounting
  for certain lease modifications that have economic effects that are
  similar to sale-leaseback transactions.  This statement also amends
  other existing pronouncements to make various technical corrections,
  clarify meanings or describe the applicability under changed
  conditions.  SFAS 145 requires gains and losses from the extinguishment
  of debt to be classified as extraordinary items only if they meet the
  criteria in Accounting Principal Board Opinion No. 30, "Reporting the
  Results of Operations-Reporting the Effects of Disposal of a Segment of
  a Business and extraordinary, unusual and infrequently occurring events
  and transactions."  This statement also requires lease modifications
  that have economic effects similar to sale-leaseback transactions to be
  accounted for in the same manner as sale-leaseback transactions.  The
  provisions in SFAS 145 relating to sale-leaseback transactions are
  effective as of May 15, 2002.

  <PAGE> 36

                                      F-14

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002

  Note 2 - Summary of Significant Accounting Policies (continued)
           Recently Issued Accounting Standards (continued)

  The remaining provisions in SFAS 145 will be effective for the Company
  beginning in fiscal 2003.  The Company does not expect the provisions of
  SFAS 145 to have a material impact, if any, on the Company's consolidated
  financial statements.

  In July 2002, the FASB issued Statement No. 146 ("SFAS 146"),
  "Accounting for Costs Associated with Exit or Disposal Activities."
  SFAS No. 146 nullifies the guidance in EITF Issue No. 94-3, "Liability
  Recognition for Certain Employee Termination Benefits and Other Costs
  to Exit an Activity (including Certain Costs Incurred in a
  Restructuring)."  Under EITF No. 94-3, an entity recognized a liability
  for an exit cost on the date that the entity committed itself to an
  exit plan.  In SFAS No. 146, the FASB acknowledges that an entity's
  commitment to a plan does not, by itself, create a present obligation
  to the other parties that meets the definition of a liability and
  requires that a liability for a cost that is associated with an exit or
  disposal activity be recognized when the liability is incurred.  It
  also establishes that fair value is the objective for the initial
  measurement of the liability.  SFAS No. 146 will be effective for exit
  or disposal activities that are initiated after December 31, 2002.  The
  adoption of this standard is not expected to have a material effect on
  the financial position or results of operations of the Company.

  In November 2002, the FASB issued FASB Interpretation No. 45 ("FIN
  45"), "Guarantor's Accounting and Disclosure Requirements for
  Guarantees, Including Indirect Guarantees of Indebtedness of Others."
  FIN 45 requires the accounting for and disclosure of guarantees and
  clarifies the requirements of SFAS No. 5, "Accounting for
  Contingencies."  The disclosure requirements of this interpretation are
  effective for periods ending after December 15, 2002 and for accounting
  for guarantees for periods beginning after December 15, 2002.  The
  adoption of the disclosure requirements of this standard as of December
  31, 2002 had no impact on the Company's financial position or results
  of operations.

  In December 2002, the FASB issued Statement No. 148 ("SFAS 148"),
  "Accounting for Stock-Based Compensation-Transition and Disclosure."
  SFAS No. 148 is effective for fiscal years ending after December 15,
  2002 and amends SFAS No. 123 to provide for alternative methods of
  transition to a voluntary change to the fair value based method of
  accounting for stock-based employee compensation.  In addition, SFAS
  No. 148 amends the disclosure requirements of SFAS No. 123 to require
  prominent disclosure in both annual and interim financial statements
  about the method of accounting for stock-based employee compensation
  and the effect of the method used on reported results.  The Company has
  accounted for stock-based employee compensation using the intrinsic
  value method under APB No. 25.

  In January 2003, the FASB issued FASB Interpretation No. 46 ("FIN 46"),
  "Consolidation of Variable Interest Entities.  FIN 46 clarifies the
  application of Accounting Research Bulletin No. 51, "Consolidated
  Financial Statements", to certain entities in which equity investors do
  not have the characteristics of a controlling financial interest or do
  not have sufficient equity at risk for the entity to finance its
  activities without additional subordinated financial support from other
  parties.  The Company is required to adopt the provision of FIN 46 for
  variable interest entities created after January 31, 2003.  The
  adoption of FIN 46 is not expected to have a material impact on the
  Company's consolidated financial statements.

  <PAGE> 37

                                      F-15

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002

  Note 2 - Summary of Significant Accounting Policies (continued)
           Recently Issued Accounting Standards (continued)

  In April 2003, the FASB issued Statement No. 149 (SFAS No.149),
  "Amendment of Statement No. 133 on Derivative Instruments and Hedging
  Activities."  SFAS No. 149 amends and clarifies accounting for
  derivative instruments, including certain derivative instruments
  embedded in other contracts, and for hedging activities under SFAS No.
  133 and is effective for contracts entered into or modified after June
  30, 2003.  The adoption of SFAS No. 149 is not expected to have a
  material impact on its consolidated financial statements.

  In May 2003, the FASB issued Statement No. 150 (SFAS No. 150) "Accounting
  for Certain Financial Instruments with Characteristics of Both
  Liabilities and Equity."  SFAS No. 150 established standards for how an
  issuer classifies and measures certain financial instruments with
  characteristics of both liabilities and equity. This statement requires
  that an issuer classify a financial instrument that is within its scope
  as a liability (or an asset in some circumstances).  Many of those
  instruments were previously classified as equity.  SFAS No. 150 is
  effective for financial statements entered into or modified after May 31,
  2003 and otherwise is effective at the beginning of the first interim
  period beginning after June 15, 2003.  The adoption of SFAS No. 150 is
  not expected to have a material impact on its consolidated financial
  statements.

  In December 2003, the FASB amended Statement No. 132 (SFAS No. 132)
  "Employers' Disclosures about Pensions and Other Postretirement
  Benefits", and amendment of FASB Statements No. 87, 88 and 106.  SFAS 132
  improves financial statement disclosure for defined benefit plans and
  requires that companies provide more details about their plan assets,
  benefit obligations, cash flows, benefit costs and other relevant
  information.  SFAS No. 132 is effective for fiscal years ending after
  December 15, 2003, and for quarters beginning after December 15, 2003.
  The adoption of SFAS No. 132 is not expected to have a material impact on
  its consolidated financial statements.

  Note 3- Supplemental Cash Flow Information
  <TABLE>
  <CAPTION>
                                                               2003            2002
                                                           ------------    ------------
  <S>                                                      <C>             <C>
  Cash paid during the year for:
    Income taxes, net of refunds                           $   (61,621)    $   268,422
    Interest                                                   208,944         194,412

  Non-cash operating and financing:
    Acquisition of property and equipment                  $     -0-       $ 3,818,900
    Less: loan proceeds                                          -0-        (1,837,988)
                                                           ------------    ------------

    Net cash outlay                                        $     -0-       $ 1,980,912
                                                           ============    ============


  </TABLE>

  <PAGE> 38

                                      F-16

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002

  Note 4 - Uncompleted Contracts

  Costs, estimated earnings, and billings on uncompleted contracts are
  summarized as follows:
  <TABLE>
  <CAPTION>
                                                               2003            2002
                                                           ------------    ------------
  <S>                                                      <C>             <C>
          Costs incurred on uncompleted contracts          $   303,772     $   764,799
          Estimated earnings                                   951,894         676,692
                                                           ------------    ------------
                                                             1,255,666       1,441,491
          Billings to date                                    (854,000)       (804,232)
                                                           ------------    ------------
                                                           $   401,666     $   637,259
                                                           ============    ============

  Included in accompanying balance sheets
    under the following captions:

          Costs and estimated earnings in excess
            of billings on uncompleted contracts           $   575,734     $   783,646
          Billings in excess of costs and estimated
            earnings on uncompleted contracts                 (174,068)       (146,387)
                                                           ------------    ------------
                                                           $   401,666     $   637,259
                                                           ============    ============
  </TABLE>
  Note 5 - Inventory

  Inventories consist of the following:
  <TABLE>
  <CAPTION>
                                                               2003            2002
                                                           ------------    ------------
  <S>                                                      <C>             <C>
          Raw materials                                    $   777,893     $ 1,223,019
          Work-in-process                                      108,350         267,679
          Finished goods                                       539,608         532,789
                                                           ------------    ------------
                                                           $ 1,425,851     $ 2,023,487
                                                           ============    ============
  </TABLE>

  Note 6 - Property, Plant and Equipment
  Major classes of property, plant and equipment consist of the following:
  <TABLE>
  <CAPTION>
                                                               2003            2002
                                                           ------------    ------------
  <S>                                                      <C>             <C>
          Land                                             $   760,000     $   760,000
          Buildings                                          2,815,839       2,815,839
          Building Improvements                              1,372,505       1,373,624
          Machinery and equipment                            1,222,587       1,181,851
          Capitalized labor and overhead                       216,602         216,602
          Furniture and fixtures                               214,903         214,921
          Computer equipment                                   193,063         180,991
          Transportation equipment                              74,709          74,709
                                                           ------------    ------------
                                                             6,870,208       6,818,537
          Accumulated depreciation and amortization         (1,470,176)     (1,188,162)
                                                           ------------    ------------
                                                           $ 5,400,032     $ 5,630,375
  Depreciation and amortization expense                    $   297,747     $   249,030
                                                           ============    ============


  </TABLE>

  <PAGE> 39
                                      F-17

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002

  Note 7 - Intangible Assets

  Intangible assets consist of the following:

  <TABLE>
  <CAPTION>
                                                               2003            2002
                                                           ------------    ------------
  <S>                                                      <C>             <C>
          Licensing Agreement                              $    10,000     $    10,000
          Patents and Copyrights                                32,019          32,019
          Intellectual Property                                100,000         100,000
          Other                                                 21,492          21,492
                                                           ------------    ------------

                                                               163,511         163,511

          Accumulated Amortization                             (40,534)        (27,118)
                                                           ------------    ------------

                                                           $   122,977     $   136,393
                                                           ============    ============

          Amortization Expense                             $    13,416     $     8,948
                                                           ============    ============
  </TABLE>
  Note 8 - Acquisition of Assets

  On June 17, 2002, the Company purchased additional assets for the Surface
  Mount Technology (SMT) business.  The allocation of the purchase price was
  as follows: $820,000 of inventory, $369,000 of accounts receivable, $25,000
  of intangible assets and $25,000 of fixed assets.  This acquisition was
  recorded as a purchase business combination in accordance with SFAS No. 141,
  "Business Combinations".  Intangible assets recorded associated with this
  acquisition are being amortized over their estimated useful life of 15
  years.

  Note 9 - Financing Arrangements

  The Company has a line of credit  with a bank which allows the Company to
  borrow up to $1,000,000 until June 1, 2004  Interest is payable on any
  unpaid principal balance at the bank's prime rate plus 3/4 of 1%.  As of
  December 31, 2003 and 2002, $-0- was outstanding on this facility.

  <PAGE> 40

                                      F-18

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002


  Note 10- Long-term Debt

  Long-term debt consists of the following:
  <TABLE>
  <CAPTION>
                                                               2003            2002
                                                           ------------    ------------
  <S>                                                      <C>             <C>
  KIDCO REALTY CORP.
     $900,000 purchase money mortgage secured
     by real property, building and
     improvements in Saugerties, New York;
     payable in equal monthly installments of
     $5,988, including interest at 7% per
     annum; entire principal comes due in May
     2009.                                                 $   851,308     $   863,116

  GENERAL ELECTRIC CAPITAL CORPORATION
     $2,700,000 mortgage payable secured by real
     property, building and improvements in Ronkonkoma,
     New York; payable in equal monthly installments of
     $22,285, including interest at 5.67% per annum;
     pursuant to an installment sale agreement with the
     Town of Islip Industrial Development Agency; final
     payment due March 2017.                                 2,476,851       2,600,015

  NORTH FORK BANK
     Sixty month installment note; payable in monthly
     installments of $4,922, including interest at 7.74%
     per annum; final payment due October 2007;
     collateralized by equipment costing $244,239.             185,622         227,776
                                                           ------------    ------------

                                                             3,513,781       3,690,907
          Less:  Current maturities                            177,381         177,124
                                                           ------------    ------------

                                                           $ 3,336,400     $ 3,513,783
                                                           ============    ============

  Future maturities of long-term debt as follows:

          Year ended December 31, 2004        $   177,382
                                  2005            200,031
                                  2006            212,946
                                  2007            207,088
                                  2008            179,394
                            thereafter          2,536,940
                                              ------------

                                              $ 3,513,781
                                              ============

  </TABLE>
  <PAGE> 41

                                      F-19

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002


  Note 11 - Short-term Note Payable

  A note payable in the amount of $350,000 was issued for the acquisition of
  assets for the Company's Surface Mount Technology business.  Interest
  provided at 5.5% per annum.  This note was paid in full in July 2003.


  Note 12 - Income Taxes

  The provision (benefit) for income taxes include the following:
  <TABLE>
  <CAPTION>
                                                               2003            2002
                                                           ------------    ------------
  <S>                                                      <C>             <C>
      Current:
        Federal                                            $   (65,761)    $     -0-
        State                                                      835           5,589
                                                           ------------    ------------

                   Total Current (Benefit) Provision           (64,926)          5,589
                                                           ------------    ------------
      Deferred:
        Federal                                                (77,849)         30,008
        State                                                  (18,439)       (105,459)
                                                           ------------    ------------

                            Total Deferred (Benefit)           (96,288)        (75,451)
                                                           ------------    ------------

                                                           $  (161,214)    $   (69,862)
                                                           ============    ============
  </TABLE>

  The Company has New York State investment tax credit carryforwards of
  $321,185 that may be offset against future state tax liabilities through the
  year 2016 and other state tax credits totaling $119,828 which may be carried
  forward indefinitely.

  The difference between the provision for income taxes at the Company's
  effective income tax rate and the federal statutory rate of 34% is as
  follows:
  <TABLE>
  <CAPTION>
                                                               2003            2002
                                                           ------------    ------------
  <S>                                                      <C>             <C>
        Statutory rate                                         34%             34%
        State taxes, net of Federal Benefits                    7%              7%
        Investment tax credits and other                      (73%)          (112%)
                                                           ------------    ------------

                                          Totals              (32%)           (71%)
                                                           ============    ============
  </TABLE>



  <PAGE> 42

                                      F-20

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002


  The tax effects of temporary differences giving rise to significant
  portions of deferred taxes are as follows:

  <TABLE>
  <CAPTION>
                                                               2003            2002
                                                           ------------    ------------
  <S>                                                      <C>             <C>
        Allowance for doubtful accounts                    $     7,472     $     6,992
        Inventory capitalization                                39,618          73,503
        Deferred revenue                                      (368,573)       (262,015)
        Net operating loss                                     289,570          64,122
        Depreciation and amortization                         (157,462)       (126,144)
        Investment tax credit                                  615,133         575,953
        Other                                                   14,604          11,663
                                                           ------------    ------------

                  Net Deferred Tax Asset                   $   440,362     $   344,074
                                                           ============    ============
  </TABLE>

  Note 13 - Stock Option Plans

  On June 15, 1989, the Company instituted a non-qualified stock option plan
  (the "Plan").  In connection therewith, 700,000 shares of the Company's
  common stock are reserved for issuance pursuant to options that may be
  granted under the Plan through June 30, 2004.  On June 3, 1996, the
  Company issued 84,000 options which expire ten years from the date of
  grant.  None of these options were exercisable until June 3, 1999.  The
  option price was less than the fair market value per share on the date the
  1996 options were granted.  On April 15, 1998, 140,000 options were
  granted to employees under this plan. Options granted in 1998 vest
  straight-line over a four-year period following the date of grant and
  expire five years after the date of grant.  On July 16, 1999, 52,500
  options were granted to employees under this Plan. Options granted in 1999
  vest incrementally over a four-year period following the date of grant and
  expire seven years after the date of grant.  On February 2, 2000, 242,000
  options were granted to employees under this plan.  On May 7, 2000 and
  August 8, 2000, a total of 80,000 options were granted to employees.  On
  October 26, 2000, 3,500 options were granted to employees.  All options
  vest over a four-year period.  All options granted in 2000 expire seven
  years after the date of grant.  The option price for options granted in
  1999 and 2000 is an amount per share of not less than the fair market
  value per share on the date the option is granted.  On April 1, 2003, the
  Company granted 12,500 options to employees under this plan which expire
  April 1, 2008, and on September 23, 2003 granted 75,000 options to
  Directors which expire on September 23, 2010.

  In July 2001, the shareholders approved a non-qualified stock option plan
  covering key employees, officers, directors and other persons that may be
  considered as service providers to the Company.  Options will be awarded
  by the Board of Directors or by a committee appointed by the board.  Under
  the plan, an aggregate of 300,000 shares of common stock, $.01 par value
  of Company are reserved for issuance or transfer upon the exercise of
  options which are granted.  Unless otherwise provided in the option
  agreement options granted under the plan shall become exercisable in 25%
  installments commencing one year from the anniversary date of the grant.

  <PAGE> 43

                                      F-21

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002


  Note 13 - Stock Option Plans (continued)

  The purchase price of the common stock under each option shall be no lower
  than the average bid price per share, calculated on a monthly basis, that
  the Common Stock (as reported by AMEX) traded during the calendar year
  immediately preceding the year in which the option is granted.  The stock
  options generally expire five years after the date of grant.  The stock
  option plan shall terminate on July 22, 2011.  No options have been
  granted under the July 2001 plan.

  A summary of stock option activity related to the Company's Plan is as
  follows:
  <TABLE>
  <CAPTION>

                                  Beginning        Granted        Exercised      Canceled        Ending
                                  Balance           During         During         During         Balance
                                  Outstanding       Period         Period         Period       Outstanding    Exercisable
                                  ------------   ------------   ------------   ------------   ------------   ------------
  <S>                             <C>            <C>            <C>            <C>            <C>            <C>
  Year ended December 31, 2002
  Number of shares                    478,425          -0-            6,775         75,000        396,650        208,300
  Weighted average exercise price
          per share               $     1.67     $     -0-      $     1.45     $     1.80     $     1.65     $     1.57
  Year ended December 31, 2003
  Number of shares                    396,650         87,500          -0-          118,750        365,400        196,290
  Weighted average exercise price
   per share                      $     1.65     $     1.75     $     -0-      $     1.59     $     1.69     $     1.66
  </TABLE>

  The following table summarizes information about the options at December 31,
  2003.
  <TABLE>
  <CAPTION>

                                  Options Outstanding                     Options Exercisable
                        ------------------------------------------   ---------------------------
                                          Weighted      Weighted                      Weighted
                                          Average        Average                      Average
          Exercise        Number        Remaining      Exercisable      Number      Exercisable
          Price         Outstanding       Life            Price       Exercisable      Price
     ----------------   ------------   ------------   ------------   ------------   ------------
     <C>                <C>            <C>            <C>            <C>            <C>
      $0.13 - $1.00        49,500       2.55 years      $ 1.00            49,500    $     1.00
      $1.25 - $1.50        75,000       6.74 years      $ 1.40             -0-      $     -0-
      $1.51 - $1.75       179,900       3.09 years      $ 1.75           107,940    $     1.75
      $2.00 - $2.75        45,000       3.56 years      $ 2.00            33,000    $     2.00
      $3.00 - $3.25         3,500       3.50 years      $ 3.25             2,100    $     3.25
      $3.75 - $4.00        12,500       4.25 years      $ 3.88             3,750    $     3.88
  </TABLE>

  The Company accounts for the stock option plans under the recognition and
  measurement principles of APB Opinion No. 25, "Accounting for Stock Issued
  to Employees, and related interpretations.  The following table
  illustrates the effect on net income and earnings per share if the Company
  had applied the fair value recognition provisions of FASB Statement No.
  123, "Accounting for Stock-Based Compensation", to its stock-based
  employee compensation:


  <PAGE> 44

                                      F-22

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002

  <TABLE>
  <CAPTION>
                                                               2003            2002
                                                           ------------    ------------
  <S>                                                      <C>             <C>
          Net (loss) income, as reported                   $  (336,950)    $   168,202

          Add: Stock-based employee compensation
          expense included in reported net income (loss),
          net of related tax effects                             -0-             5,685

          Deduct: Total stock-based employee
          compensation expense determined under
          fair value based method for all awards, net
          of related tax effects                               (57,985)        (65,506)
                                                           ------------    ------------

          Pro-forma net income (loss)                      $  (394,935)    $   108,381
                                                           ============    ============

          Income (loss) per share:

            Basic-as reported                              $     (.11)     $      .06
                                                           ------------    ------------
            Basic-pro forma                                $     (.13)     $      .04
                                                           ------------    ------------

            Diluted -as reported                           $     (.11)     $      .05
                                                           ------------    ------------
            Diluted -pro forma                             $     (.13)     $      .03
                                                           ------------    ------------
  </TABLE>

  Note 14 - Defined Contribution Plan

  On August 1, 1998, the Company adopted a 401(k) Plan for the benefit of all
  eligible employees.  All employees as of the effective date of the 401(k)
  Plan became eligible.  An employee who became employed after August 1,
  1998, would become a participant after three months of continuous service.

  Participants may elect to contribute from their compensation any amount up
  to the maximum deferral allowed by the Internal Revenue Code.  Employer
  contributions are optional.  During the years ended December 31, 2003 and
  2002, the Company incurred 401(k) administrative costs totaling $2,869 and
  $3,471 respectively.  No employer contribution has been made for 2003 and
  2002.

  Note 15 - Concentration of Credit Risk

  Cash

  The Company places most of its temporary cash investments with one
  financial institution.  Balances normally exceed the Federal Deposit
  Insurance Corporation limit.  The Company has not experienced any loss to
  date as a result of this policy.



  <PAGE> 45

                                      F-23

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002


  Significant Customers

  The Company's sales encompass markets wherein the demands of any one
  customer may vary greatly due to changes in technology.  In 2003, the
  Company had two customers, which represented approximately 25% of sales.
  These customers represented less than 1% of total billed and unbilled
  receivables at December 31, 2003.  In 2002, the Company had two customers,
  which represented approximately 23% of sales.  These customers represented
  19% of total billed and unbilled receivables at December 31, 2002.

  Export Sales

  Export sales to unaffiliated customers represented approximately 26% and
  25% of sales for the years ended December 31, 2003 and 2002, respectively.
  Export sales in 2003 and 2002 were primarily to customers in Asia.  All
  contracts are denominated in U.S. dollars. The Company does not enter into
  any foreign exchange contracts.

  Note 16 - Related Party Transactions

  The general counsel for the Company is also a director.  The Company
  incurred legal fees for his professional services of approximately $41,000
  and $75,000 for the years ended December 31, 2003 and 2002, respectively.
  As of December 31, 2003 and 2002, the Company owed the general counsel
  approximately $41,000 and $75,000, respectively.

  Note 17 - Other Income

  Other income for the years ended December 31, 2003 and 2002 consists of
  approximately $140,000 and $512,000, respectively in cash received on the
  collection of accounts receivable exceeding the $369,000 booked as part of
  the purchase of assets as discussed more fully in Note 8.

  Note 18 - Segment Reporting

  The Company adopted SFAS 131, "Disclosures about Segments of an Enterprise
  and Related Information."  As a result, Stainless Design Concepts ("SDC"),
  which was a subsidiary of the Company as of December 31, 1998, operated as
  a segment of the Company as of December 31, 1999.  SDC is the Company's
  ultra-high purity manufacturing division in Saugerties, New York.  In
  November 1999, a division called Equipment Consulting Services ("ECS") was
  formed.  Operations commenced in January 2000.  ECS is the Company's
  equipment refurbishing division located in Saugerties, New York.  During
  2001, the Company created a division, Research International ("RI"); the
  new division is located at 1860 Smithtown Avenue, Ronkonkoma New York.  RI
  is a manufacturer of Surface Mount Technology equipment.  During the year
  2002, the Company created Conceptronic.  During the fourth quarter 2002,
  the Company combined the operations of SDC and ECS, and Conceptronic and RI
  and now these divisions are being reported under SDC and Conceptronic,
  respectively.  The accounting policies of SDC and Conceptronic are the same
  as those described in the summary of significant accounting policies (see
  Note 2).  The Company evaluates performance based on several factors, of
  which the primary financial measure is earnings before taxes.

  <PAGE> 46

                                      F-24

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002


  The following table presents certain information regarding the Company's
  segments at December 31, 2003 and for the year then ended:
  <TABLE>
  <CAPTION>
                              CVD            SDC        Conceptronic   Eliminations   Consolidated
                          ------------   ------------   ------------   ------------   ------------
  <S>                     <C>            <C>            <C>            <C>            <C>
  Assets                  $ 9,227,303    $ 2,245,712    $ 2,361,457    $(3,509,577)   $10,324,895
                          ============   ============   ============   ============   ============
  Revenue                 $ 3,779,878    $ 2,360,711    $ 4,106,780    $  (459,430)   $ 9,787,939
  Cost of Sales             2,624,428      1,967,713      3,351,286       (459,430)     7,483,997
  Gross Profit              1,155,450        392,998        755,494          -0-        2,303,942
  Interest Income                 586            657          -0-                           1,243
  Interest Expense            170,735         60,044        (21,835)                      208,944
  Depreciation and
    amortization              188,788        140,229         22,562                       351,579
  Capital
    expenditures               47,168         17,413          2,822                        67,403
  Pretax earnings (loss)       87,950       (205,884)      (380,230)                     (498,164)
  </TABLE>

  The following table presents certain information regarding the Company's
  segments at December 31, 2002 and for the year then ended:
  <TABLE>
  <CAPTION>
                              CVD            SDC        Conceptronic   Eliminations   Consolidated
                          ------------   ------------   ------------   ------------   ------------
  <S>                     <C>            <C>            <C>            <C>            <C>
  Assets                  $ 9,104,444    $ 2,633,539    $ 3,219,312    $(3,529,783)   $11,427,512
                          ============   ============   ============   ============   ============
  Revenue                 $ 3,522,634    $ 3,347,722    $ 3,027,232    $  (655,780)   $ 9,241,808
  Cost of Sales             2,484,118      2,498,377      1,878,568       (655,780)     6,205,283
  Gross Profit              1,038,516        849,345      1,148,664          -0-        3,036,525
  Interest Income              24,681            540          -0-                          25,221
  Interest Expense             56,420         60,840         22,083                       139,343
  Depreciation and
    amortization              134,283        147,560         12,878                       294,721
  Capital
    expenditures            3,775,438         10,123         33,339                     3,818,900
  Pretax earnings (loss)      (86,315)      (322,519)       507,174                        98,340
  </TABLE>


  <PAGE> 47

                                      F-25

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2003 and 2002

  Note 19 - Commitments and Contingencies

  Leases

  The Company rented its former headquarters and operations in Ronkonkoma, New
  York under a lease expiring on July 31, 2006.  Rental expense under the
  above operating lease totaled $108,720 and $144,000 for 2003 and 2002,
  respectively.  The Company was able to cancel the lease on October 1, 2003
  for  payments of $60,000.  This amount is included in rent expense for the
  year ended December 31, 2003.

  Legal Proceedings

  On September 24, 1999 the Company was named in a lawsuit.  The nature of
  this legal proceeding focused on the intellectual property obtained during
  the purchase of assets of Stainless Design Corporation.  On November 10,
  1999, the Company responded with a counterclaim.  It is legal counsels'
  belief that the lawsuit against the Company is without merit.  The Company
  considers its potential exposure to be negligible and/or covered by
  insurance. Presently, cross-motions for summary judgment are pending before
  the court.

  In May 2002, the Company instituted a new action against Precisionflow
  Technologies, Inc., in the United States District for the Northern District
  of New York also seeking injunctive relief and monetary damages based upon
  additional copyright violations. A motion by Precisionflow Technologies,
  Inc. to dismiss this action has been pending since June 2002.


  <PAGE> 48
  <TABLE>
  <CAPTION>

                   INDEX TO SUPPLEMENTARY FINANCIAL SCHEDULES



                                                                  Page No.
                                                                 ----------
  <S>                                                            <C>
    Independent Auditors' Report on Supplementary Information....   S-2

    Supplementary Financial Schedules:

       II.   Valuation and qualifying accounts...................   S-3


  </TABLE>

  <PAGE> 49

                                      S-2

  A L B R E C H T ,  V I G G I A N O ,  Z U R E C K
          &  C O M P A N Y ,  P . C .
                                                 CERTIFIED PUBLIC ACCOUNTANTS
                                                             25 SUFFOLK COURT
                                                         HAUPPAUGE, NY  11788
                                                               (631) 434-9500



           INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTARY INFORMATION
           ---------------------------------------------------------


  To the Board of Directors and Stockholders
  CVD Equipment Corporation
  Ronkonkoma, New York


  We have audited and reported separately herein on the consolidated financial
  statements of CVD Equipment Corporation and subsidiary (the "Company") as of
  and for the years ended December 31, 2003 and 2002.

  Our audits were made for the purpose of forming an opinion on the basic
  consolidated financial statements of the Company taken as a whole.  The
  supplementary information included in Form 10-KSB, Schedule II is presented
  for purposes of additional analysis and is not a required part of the basic
  consolidated financial statements.  Such information has been subjected to
  the auditing procedures applied in the audits of the basic consolidated
  financial statements and, in our opinion, is fairly stated in all material
  respects in relation to the basic consolidated financial statements taken as
  a whole.




  Hauppauge, New York
  February 20, 2004

  <PAGE> 50

                                      S-3

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                            FORM 10-KSB, SCHEDULE II
                       VALUATION AND QUALIFYING ACCOUNTS
                     Years ended December 31, 2003 and 2002

  <TABLE>
  <CAPTION>

                                                                Additions
                                                       ---------------------------
                                         Balance at    (1) Charged    (2) Charged                     Balance
                                         Beginning     to Costs and     to Other                       at End
       Deducted from Assets              of Period       Expenses       Accounts      Deductions     of Period
  -----------------------------------   ------------   ------------   ------------   ------------   ------------
  <S>                                   <C>            <C>            <C>            <C>            <C>
  Allowance for net unrealized gains
    (losses) on securities:
      Year ended December 31, 2003      $     -0-                                                   $     -0-

      Year ended December 31, 2002            -0-                                                         -0-

  Allowance for doubtful accounts:
      Year ended December 31, 2003           18,057          1,241                                       19,298

      Year ended December 31, 2002      $    26,504                                       (8,447)   $    18,057



  </TABLE>