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

                                ----------------

                                    Form 10-Q
(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES  EXCHANGE
     ACT OF 1934.

                  For the quarterly period ended June 30, 2008

[ ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934.

                  For the transition period from ____ to _____
                         Commission file number: 1-16525

                            CVD EQUIPMENT CORPORATION
                       (Name of Registrant in Its Charter)

            New York                                     11-2621692
(State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
 Incorporation or Organization)

                              1860 Smithtown Avenue

                           Ronkonkoma, New York 11779
    (Address including zip code of registrant's Principal Executive Offices)

                                 (631) 981-7081

              (Registrant's Telephone Number, Including Area Code)

              Securities registered under Section 12(b) of the Act:
                                      None

              Securities registered under Section 12(g) of the Act:
                          Common Stock, Par value $0.01
                                (Title of class)

     Indicate by check whether the issuer: (1) has filed all reports required to
be filed by Section 13 or 15(d) of the  Securities  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  whether  issuer is a large  accelerated  filer,  an
accelerated filer, a non-accelerated  filer, or a smaller reporting company. See
the definitions of "large accelerated  filer,"  "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act). (check one)

     Large accelerated filer  [ ]                Accelerated filer   [ ]

     Non-accelerated filer    [ ]                Smaller reporting company  [X]

     Indicate  by check mark  whether  issuer is a shell  company (as defined in
Rule 12b-2 of the Exchange Act).
                                                                  Yes [ ] No [X]

     State the number of shares  outstanding of each of the issuer's  classes of
common equity,  as of the latest  practicable  date:  4,749,500 shares of Common
Stock, $0.01 par value at August 12, 2008.

------------------------------------------------------------------------------

<PAGE>

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY

                                      Index

                                                                            Page
Part I - Financial Information

      Item 1 - Financial Statements (Unaudited)

      Consolidated Balance Sheets at June 30, 2008 (Unaudited) and
      December 31, 2007                                                        3

      Consolidated Statements of Operations (Unaudited) for the three
      and  six months ended June 30, 2008 and 2007                             4

      Consolidated Statements of Cash Flows (Unaudited) for the six
      months ended June 30, 2008 and 2007                                      5

      Notes to Unaudited Consolidated Financial Statements                     6

      Item 2 - Management's Discussion and Analysis of Financial
      Condition and Results of Operations                                     13
      Item 3 - Quantitative and Qualitative Disclosures About Market
      Risk                                                                    17
      Item 4T - Controls and Procedures                                       17

Part II - Other Information                                                   18

      Item 1 - Legal Proceedings                                              18
      Item 2 - Changes in Securities and Use of Proceeds                      18
      Item 3 - Defaults Upon Senior Securities                                18
      Item 4 - Submission of Matters to a Vote of Security Holders            18
      Item 5 - Other Information                                              18
      Item 6 - Exhibits and Reports Filed on Form 8-K                         18

Signatures                                                                    19

Exhibit Index                                                                 20
Certification of Chief Executive Officer                                      21
Certification of Chief Financial Officer                                      22
Certification of Chief Executive Officer pursuant to U.S.C. Section 1350      23
Certification of Chief Financial Officer pursuant to U.S.C. Section 1350      24


                                       2
<PAGE>

                         PART 1 - FINANCIAL INFORMATION
                          Item 1 - Financial Statements

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                           Consolidated Balance Sheets
<TABLE>
<CAPTION>

                                                                June 30, 2008
                                                                 (Unaudited)           December 31, 2007*
                                                              ------------------        ------------------
ASSETS
Current Assets:
<S>                                                           <C>                       <C>
     Cash and cash equivalents                                $     3,167,912           $     5,110,447
     Accounts receivable, net                                       2,497,663                 1,769,265
     Investment                                                       251,130                   251,130
     Cost and estimated earnings in excess
     of billings on uncompleted contracts                           3,244,370                 1,847,288
     Inventories                                                    2,890,647                 3,015,635
     Deferred income taxes - current                                  103,488                    90,774
     Other current assets                                             267,960                   379,360
                                                               ----------------          -----------------

     Total Current Assets                                          12,423,170                12,463,899

     Property, plant and equipment, net                             7,473,608                 5,055,727

     Deferred income taxes - non-current                              381,382                   266,077

     Other assets                                                     639,894                 1,114,637

     Intangible assets, net                                            73,968                   106,566
                                                               ----------------         -----------------

   Total Assets                                                $   20,992,022           $   19,006,906
                                                               ================         =================


LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
     Current maturities of long-term debt                      $      279,961           $       222,193
     Accounts payable                                               1,187,441                   517,934
     Accrued expenses                                               1,124,175                 1,245,819
     Accrued professional fees - related party                         17,500                   116,165
     Deferred revenue                                                      --                    47,444
                                                               ----------------         ---------------
                                                                    2,609,077                 2,149,555
Long-term debt, net of current portion                              4,018,743                 2,678,421
                                                               ----------------         ---------------
     Total liabilities                                              6,627,820                 4,827,976
                                                               ----------------         ---------------

Commitments and contingencies                                               -                         -

Stockholders' Equity
     Common stock - $0.01 par value - 10,000,000
     shares authorized; issued and outstanding,
     4,733,500 at June 30, 2008 and 4,718,500 at
     December 31, 2007                                                 47,335                    47,185
     Additional paid-in-capital                                     9,751,472                 9,592,728
     Retained earnings                                              4,565,395                 4,539,017
                                                               ----------------         ---------------
     Total Stockholders' Equity                                    14,364,202                14,178,930
                                                               ----------------         ---------------

Total liabilities and stockholders' equity                      $  20,992,022            $   19,006,906
                                                               ================         ---------------
</TABLE>

o    Derived from audited  financial  statements for the year ended December 31,
     2007 (see  Form  10-KSB  Annual  Report  filed on March  31,  2008 with the
     Securities and Exchange Commission).


The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements

                                       3
<PAGE>

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                      Consolidated Statements of Operations
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                 Three Months Ended                                    Six Months Ended
                                                      June 30,                                              June 30,
                                                        2008                   2007                    2008         2007
                                                       -----                  ----                    ----          ----

<S>                                              <C>                    <C>                      <C>                  <C>
Revenue                                          $  4,268,904               $ 3,071,244          $8,312,403           $ 6,882,521

Cost of revenue                                     3,117,172                 1,899,693           5,943,820             4,455,022
                                                    ---------                 ---------           ---------             ---------

Gross profit                                        1,151,732                 1,171,551           2,368,583             2,427,499

Operating expenses
     Selling and shipping                             203,902                   148,260             385,433               426,570
     General and administrative                       878,190                   780,020           1,897,843             1,543,246
     Related party - professional fees                  5,000                    25,000              17,500                35,000
                                                    ---------                 ---------           ---------             ---------
Total operating expenses                            1,087,092                   953,280           2,300,776             2,004,816
                                                    ---------                 ---------           ---------             ---------

Operating income                                       64,640                   218,271              67,807               422,683

Other income (expense)
     Interest income                                   21,954                        34              59,545                    61
     Interest expense                                 (63,557)                  (52,300)           (104,441)             (105,773)
     Other income                                       5,629                    34,309              13,517                39,403
                                                    ---------                 ---------           ---------             ---------
Total other income (expense)                          (35,974)                  (17,957)            (31,379)              (66,309)
                                                    ---------                 ---------           ---------             ---------

Income before income taxes                             28,666                   200,314              36,428               356,374

Income tax expense                                    (21,492)                  (35,387)            (10,050)              (95,037)
                                                    ---------                 ---------           ---------             ---------

Net income                                       $      7,174                $  164,927           $  26,378          $    261,337
                                                    =========                 =========           =========             =========

Basic income per common share                    $       0.00                $     0.05           $    0.01          $       0.08
                                                    =========                 =========           =========             =========

Diluted income per common share                  $       0.00                $     0.05                0.01          $       0.08
                                                    =========                 =========           =========             =========

Weighted average common shares outstanding
basic income per share                              4,733,500                 3,286,732           4,732,758             3,292,660

Effect of potential common share issuance:
     Stock options                                     31,778                   151,480              33,008               139,432
                                                    ---------                 ---------           ---------             ---------

Weighted average common shares outstanding
diluted income per share                            4,765,278                 3,438,212           4,765,766             3,432,092
                                                    =========                 =========           =========             =========

</TABLE>

The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements

                                       4
<PAGE>

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                      Consolidated Statements of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                        Six Months Ended
                                                                                            June 30,
                                                                                2008                      2007
                                                                           ----------                 --------
Cash flows from operating activities
<S>                                                                        <C>                        <C>
    Net income                                                             $  26,378                  $ 261,337
    Adjustments to reconcile net income to net
    cash provided by (used in)
    operating activities:
    Stock-based compensation expense                                         137,893                     85,268
    Depreciation and amortization                                            250,042                    211,638
    Deferred tax benefit                                                    (128,019)                   (96,628)
    Bad debt provision                                                        17,397                     (2,000)
    Changes in operating assets and liabilities:
    Accounts receivable                                                     (745,795)                   892,566
    Cost and estimated earnings in excess of billings
    on uncompleted contracts                                              (1,397,082)                (1,070,426)
    Inventories                                                              124,988                   (199,170)
    Other current assets                                                     111,400                    (59,951)
    Accounts payable                                                         669,507                    (84,678)
    Accrued expenses                                                        (220,309)                    98,443
    Deferred revenue                                                         (47,444)                  (199,369)
                                                                          -----------                 ---------
    Net cash (used in) operating activities                               (1,201,044)                  (162,970)
                                                                          -----------                 ---------

Cash flows from investing activities:
    Capital expenditures                                                  (2,585,893)                  (388,435)
    Deposits                                                                 425,312                     13,766
                                                                          -----------                 ---------
Net cash (used in) investing activities                                   (2,160,581)                  (374,669)
                                                                          -----------                 ----------


Cash flows from financing activities:
    Proceeds received on bank line of credit - net                                -                    375,000
    Proceeds from real estate and other loans                              2,305,000                    139,510
    Payments of long-term debt                                              (906,910)                  (125,591)
    Net proceeds from stock options exercised                                 21,000                     91,000
                                                                          ----------                  ----------
Net cash provided by financing activities                                  1,419,090                    479,919

Net (decrease) in cash and cash equivalents                               (1,942,535)                   (57,720)

Cash and cash equivalents at beginning of period                           5,110,447                    257,341
                                                                          ----------                  ----------

Cash and cash equivalents at end of period                               $ 3,167,912                  $ 199,621
                                                                          ==========                  ==========


Supplemental disclosure of cash flow
information
Income taxes paid                                                        $  491,495                   $ 104,250
Interest paid                                                            $  114,630                   $ 101,447
</TABLE>

The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements

                                       5
<PAGE>

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE 1:  BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in accordance
with accounting  principles  generally  accepted in the United States of America
for interim  financial  information  and with the  instructions to Form 10-Q and
Article 8 of  Regulation  S-X.  They do not include all of the  information  and
footnotes  required by accounting  principles  generally  accepted in the United
States  of  America  for  complete  financial  statements.  In  the  opinion  of
management, all adjustments (consisting of normal recurring accruals) considered
necessary  in order to make the  interim  financials  not  misleading  have been
included  and  all  such  adjustments  are of a  normal  recurring  nature.  The
operating  results  for the three and six  months  ended  June 30,  2008 are not
necessarily  indicative  of the results that can be expected for the year ending
December 31, 2008.

The balance  sheet as of December  31,  2007 has been  derived  from the audited
financial  statements at such date, but does not include all of the  information
and footnotes required by accounting principles generally accepted in the United
States of America for complete financial statements.

The accounting  policies  followed by the Company are set forth in Note 2 to CVD
Equipment Corporation's ("the Company") consolidated financial statements in the
December 31, 2007 Form 10-KSB.

For further information,  please refer to the consolidated  financial statements
and footnotes thereto included in the Company's Annual Report on Form 10-KSB for
the year ended December 31, 2007.

All material intercompany transactions have been eliminated in consolidation.

Certain reclassifications have been made to prior period financial statements to
conform to the current year presentation.


                                       6
<PAGE>

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE 2:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue and Income Recognition

The Company  recognizes  revenues and income using the  percentage-of-completion
method for custom  production-type  contracts while revenues from other products
are recorded  when such  products  are  accepted and shipped.  Profits on custom
production-type  contracts 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.

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.

NOTE 3:  UNCOMPLETED CONTRACTS

Costs and estimated earnings in excess of billings on uncompleted  contracts are
summarized as follows:
<TABLE>
<CAPTION>

                                                               June 30, 2008   December 31, 2007
                                                               -------------   -----------------
                                                                (Unaudited)

<S>                                                           <C>               <C>
Costs incurred on uncompleted contracts                       $ 2,424,735       $ 1,887,022
Estimated earnings                                              2,605,893         2,158,386
                                                               -------------    ----------------
                                                                5,030,628         4,045,408
Billings to date                                               (1,786,258)       (2,198,120)
                                                               -------------    ----------------
Costs and estimated earnings in excess of
billings on uncompleted contracts                             $ 3,244,370       $ 1,847,288
                                                              ==============    ================
</TABLE>



                                       7
<PAGE>

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE 4:  INVENTORIES

Inventories consist of the following:
<TABLE>
<CAPTION>

                                                                June 30, 2008              December 31, 2007
                                                                -------------              -----------------
                                                                 (Unaudited)

<S>                                                             <C>                            <C>
Raw materials                                                   $1,374,550                     $ 1,077,756
Work-in-process                                                  1,334,694                       1,733,738
Finished goods                                                     181,403                         204,141
                                                                -------------              ------------------

                                                                 $2,890,647                    $ 3,015,635
                                                                =============              ==================
</TABLE>

NOTE 5:  FAIR VALUE MEASUREMENTS

Effective  January 1, 2008, we adopted SFAS 157, Fair Value  Measurements  (SFAS
157).  SFAS 157 clarifies the definition of fair value,  prescribes  methods for
measuring  fair value,  and  establishes a fair value  hierarchy to classify the
inputs used in measuring fair value as follows:

Level 1 - Inputs are  unadjusted  quoted prices in active  markets for identical
assets or liabilities available at the measurement date.

Level 2 - Inputs are unadjusted quoted prices for similar assets and liabilities
in active markets, quoted prices for identical or similar assets and liabilities
in markets that are not active,  inputs other than quoted prices are observable,
and inputs derived from or corroborated by observable market data.

Level 3 - Inputs are  unobservable  inputs which reflect the reporting  entity's
own assumptions on what assumptions the market participants would use in pricing
the asset or liability based on the best available information.

The  Company  measured  the fair  value of the  equity  investment  based on the
combination  of its  best  estimate  of the  fair  value  of the  non-marketable
securities and the equipment.  Based on our analysis, the assigned fair value of
the  Company's  equity  investment  of  approximately  $250,000 at June 30, 2008
appears appropriately stated.

The  adoption  of SFAS No. 157 did not have a material  impact on our fair value
measurements.


                                       8
<PAGE>

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

The following  table  presents our assets and  liabilities  that are measured at
fair  value on a  recurring  basis  and are  categorized  using  the fair  value
hierarchy. The fair value hierarchy has three levels based on the reliability of
the inputs used to determine fair value.
<TABLE>
<CAPTION>

                                    Fair Value Measurement at Reporting Date Using
                                    ----------------------------------------------
                                                    Quoted Prices in
                                                     Active Markets
                                                      for Identical        Significant Other             Significant
                                                         Assets            Observable Inputs         Unobservable Inputs
       Description             June 30, 2008           Level (1)               Level (2)                  Level (3)
       -----------             -------------           ---------               ---------                  ---------

<S>                              <C>             <C>                     <C>                              <C>
Equity investment                $251,130        $            ---        $           ---                  $251,130

Total Assets                     $251,130        $            ---        $           ---                  $251,130
                                 ========                                                                 ========

Liabilities                      $    ---        $            ---        $           ---                  $    ---

Total Liabilities                $    ---        $            ---        $           ---                  $    ---
</TABLE>


NOTE 6:  BAD DEBTS

Accounts  receivables are presented net of an allowance for doubtful accounts of
$29,985 and $12,588 as of June 30, 2008 and December 31, 2007 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,  future  estimates  may change  based on changes in economic
conditions.

NOTE 7:  SHORT TERM BORROWINGS

On April 22, 2008,  the Company  entered into a three year Modified and Restated
Revolving  Credit  Agreement with Capital One, N.A. (the "Bank") as successor to
North Fork Bank,  pursuant to which the Bank has agreed to make revolving  loans
to the Company of up to $5 million  dollars  until May 1, 2011, at which time it
will be  subject to  renewal.  The loan  agreement  amends  and  supersedes  the
Company's  previous $2 million dollar  revolving  credit facility with the Bank.
Interest on the unpaid principal  balance on this facility accrues at either (i)
the LIBOR  rate plus  2.00% or (ii) the  Bank's  prime  rate  minus  .25%.  This
agreement  contains  certain  financial  and  other  covenants.  Borrowings  are
collateralized  by  the  Company's  assets.  The  amount  available  under  this
agreement,  was $4,840,000 as of June 30, 2008. The amount  available  under the
prior  facility  as of June 30, 2007 was  $1,220,000.  As of June 30, 2008 , the
Company is in full compliance with the terms of the Revolving Credit Agreement.


                                       9
<PAGE>
                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


NOTE 8:  STOCK-BASED COMPENSATION EXPENSE

On January  1, 2006,  the  Company  adopted  the  provisions  of SFAS No.  123-R
"Share-Based  Payment"  using the modified  prospective  method.  SFAS No. 123-R
requires  companies  to  recognize  the cost of  employee  services  received in
exchange for awards of equity  instruments  based upon the grant date fair value
of those  awards.  Under the modified  prospective  method of adopting  SFAS No.
123-R, the Company  recognized  compensation  cost for all share-based  payments
granted after  January 1, 2006,  plus any awards  granted to employees  prior to
January  1, 2006  that  remain  unvested  at that  time.  Under  this  method of
adoption, no restatement of prior periods is made.

During  the three and six  months  ended June 30,  2008 and June 30,  2007,  the
Company  recorded  as  part  of  selling  and  general  administrative  expense,
approximately  $69,000 and $138,000 and $44,000 and $85,000 respectively for the
cost  of  employee  and  director  services  received  in  exchange  for  equity
instruments  based  on  the  grant-date  fair  value  of  those  instruments  in
accordance with the provisions of SFAS No. 123-R.

NOTE 9:  INCOME TAXES

The (benefit) expense for income taxes includes the following:

                                                Six Months Ended June 30,

                                                2008                 2007
                                              ---------            ---------
Current:
            Federal                           $ 100,199            $ 166,981
            State                                37,870               24,684
                                              ---------            ---------
                  Total Current Provision       138,069              191,665
         Deferred:
            Federal                             (98,043)             (88,423)
   State                                        (29,976)             ( 8,205)
                                             ----------            ---------
                  Total Deferred (Benefit)     (128,019)             (96,628)
                                             ----------            ---------
                                              $  10,050            $  95,037
                                             ==========            =========

The majority of the Company's  state and all of the federal net  operating  loss
(NOL'S) carry  forwards have been utilized  through June 30, 2008. For the three
and six months ended June 30, 2008,  the Company  recorded a current  income tax
expense of approximately $92,000 and $138,000 respectively,  that was reduced by
a deferred tax benefit of $70,000 and $128,000 respectively.


                                       10
<PAGE>

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE 10: EARNINGS PER SHARE

We have  applied  SFAS No.  128,  "Earnings  Per share" in its  calculation  and
presentation  of earnings per share - "basic" and "diluted".  Basic earnings per
share are  computed by dividing net  earnings  available to common  shareholders
(the   numerator)  by  the  weighted   average  number  of  common  shares  (the
denominator) for the period  presented.  The computation of diluted earnings per
share is similar to basic  earnings per share,  except that the  denominator  is
increased to include the number of additional common shares that would have been
outstanding if the potentially dilutive common shares had been issued.

Stock options to purchase  248,500 shares of common stock were  outstanding  and
121,125  were  exercisable  during the six months  ended  June 30,  2007.  Stock
options to purchase 441,000 shares were outstanding and 234,125 were exercisable
during the six months ended June 30, 2008, However,  during the six months ended
June 30, 2008, only 84,125 were included in the computation of diluted  earnings
per share because the option  exercise  prices were less than the average market
price of our common stock during these periods.

The dilutive  potential  common  shares on warrants and options is calculated in
accordance with the treasury stock method,  which assumes that proceeds from the
exercise of all  warrants  and options are used to  repurchase  common  stock at
market value.  The amount of shares  remaining  after the proceeds are exhausted
represents the potential dilutive effect of the securities.

The following  table sets forth our  computation of basic and diluted net income
per share:
<TABLE>
<CAPTION>

                                                             Three months ended June 30,
                                                             ---------------------------
                                                                 2008             2007
                                                                 ----             ----
Numerator:
Net income used in calculation of basic and diluted
<S>                                                          <C>               <C>
earnings per share                                           $     7,174       $   164,927
                                                             -----------       -----------

Denominator:
Weighted-average common shares outstanding used
in calculation of basic earnings per share                     4,733,500         3,286,732
Effect of dilutive securities:
Stock options and equivalents                                     31,778           151,480
                                                             -----------      ------------
Weighted-average common shares used in calculation
of diluted earnings per share                                  4,765,278         3,438,212
                                                             ===========      =============

Net income per share:
    Basic                                                    $      0.00      $       0.05
    Diluted                                                  $      0.00      $       0.05
</TABLE>



                                       11
<PAGE>

                    CVD EQUIPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE 10: EARNINGS PER SHARE (continued)
<TABLE>
<CAPTION>

                                                                       Six months ended June 30,
                                                                       ---------------------------
                                                                          2008             2007
                                                                          ----             ----
Numerator:
Net income used in calculation of basic and diluted
<S>                                                                    <C>              <C>
earnings per share                                                     $    26,378      $   261,337
                                                                       -----------      -----------

Denominator:
Weighted-average common shares outstanding used
in calculation of basic earnings per share                               4,732,758        3,292,660
Effect of dilutive securities:
Stock options and equivalents                                               33,008          139,432
                                                                       -----------      -----------
Weighted-average common shares used in calculation
of diluted earnings per share                                            4,765,766        3,432,092
                                                                       ===========      ===========

Net income per share:
         Basic                                                         $      0.01     $      0.08
         Diluted                                                       $      0.01     $      0.08
</TABLE>


                                       12
<PAGE>

Item 2.    Management's Discussion and Analysis or Plan of Operation.

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,  uncertainties  and other  factors which may cause the
actual  results,  performance,  or  achievements of the Company 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.

Results of Operations
Three and Six Months Ended June 30, 2008 vs. Three and Six Months Ended June 30,
2007

Revenue

Revenue for the three and six month period ended June 30, 2008 was approximately
$4,269,000 and $8,312,000  respectively as compared to $3,071,000 and $6,883,000
respectively  for the  three and six  month  periods  ended  June 30,  2007,  an
increase  of 39.0% and 20.8%  respectively.  We  attribute  the  increase  to an
increase in selling effort for all of our products. The proceeds received during
the  latter  half of 2007,  as a result  of the sale of our  common  stock,  has
allowed us to hire additional personnel,  and enabled our key personnel to focus
their efforts on selling into our targeted market segments.

Gross Profit

The Company  generated gross profits of approximately  $1,152,000 and $2,369,000
respectively  resulting in gross profit margins of 27.0 % and 28.5% respectively
for the three and six months ended June 30, 2008 as compared to gross profits of
approximately  $1,171,000 and $2,427,000  respectively resulting in gross profit
margins of 38% and 35.3%  respectively  for the three and six months  ended June
30, 2007. The decrease in gross profit is primarily  attributable to an increase
in engineering  and production  personnel to support our increased  orders,  the
expansion of our First Nano laboratory and new product  development costs in the
Nanomaterials, Energy and Semiconductor fields.


                                       13
<PAGE>

Selling, General and Administrative Expenses

Selling and shipping  expenses for the three months ended June 30, 2008 and 2007
were  approximately  $204,000 and $148,000  respectively,  representing  a 37.5%
increase versus the prior period. This increase is primarily  attributable to an
increase in sales  commissions  earned during the current  period for sales that
were concluded through efforts by our outside sales representatives.

Selling  and  shipping  expenses  for the six months  ended  June 30,  2008 were
approximately  $385,000  compared to $427,000  for the six months ended June 30,
2007. This decrease of 9.8% is primarily  attributable to the Company's  reduced
attendance  at trade shows and overall  reduction  in sales  commission  expense
during the six month period.

The  Company  incurred  approximately  $883,000  of general  and  administrative
expenses  during  the  three  months  ended  June  30,  2008,  compared  to  the
approximately  $805,000  incurred  during the three  months ended June 30, 2007.
This represents an increase of 9.7% or approximately  $80,000 which is primarily
attributable to the costs associated with employee  recruitment  efforts,  costs
associated with the new facility purchased earlier this year,  increased payroll
and benefit costs,  general  insurance,  stock-based  compensation  and investor
relations costs which were partially offset with a decrease in legal fees.

The Company  incurred  approximately  $1,915,000  of general and  administrative
expenses   during  the  six  months  ended  June  30,  2008,   compared  to  the
approximately  $1,578,000 of general and administrative expenses incurred in the
six months  ended June 30,  2007,  representing  an  increase  of  approximately
$337,000 or 21.4%.  $168,000 of this  increase can be  attributed  to additional
contributions required as a result of the findings of a forensic audit performed
on the Manufacturing  Industry Workers'  Compensation  Self-Insurance Trust Fund
(the "Fund") of which the Company was a member from  January 2000 through  March
2006. The Company is no longer a member of the Fund. The Fund was established to
enable the  participating  employers to self insure their workers'  compensation
liability  exposure as provided for under the Workers'  Compensation Laws of the
State of New York. Under the terms of the agreement,  the Company is jointly and
severally  liable  for the  expenses  and  obligations  of the  Fund and for the
workers' compensation liability of all participating  employers incurred while a
member.  The Company was advised  that  certain  adjustments  were  necessary to
comply with New York State Workers' Compensation Board regulatory guidelines for
Group Self Insurance Trusts. The contributions  previously charged have not been
adequate  to cover Fund  expenses  including  future  claims.  As a result,  the
Company was advised that additional  contributions of approximately $168,000 are
required,  which the Company  expensed in full during this period.  There may be
additional  contributions  necessary  as a result  of any  outstanding  residual
liability for any given contribution year. The Company is accruing an additional
$5,000 per  quarter  for this  potential  liability.  Additionally,  the Company
incurred increased costs to support our continued sales growth.


                                       14
<PAGE>

Operating Income

As a result of the foregoing factors, operating income was approximately $65,000
and $68,000 for the three and six months ended June 30, 2008 respectively.  This
represents  a  decrease  of 70.2%  and 83.9%  compared  to  operating  income of
$218,000 and $423,000  respectively  for the three and six month  periods  ended
June 30, 2007.

Interest Expense, Net

Interest  income  for  the  three  and  six  months  ended  June  30,  2008  was
approximately $22,000 and $60,000 respectively, compared to $0 for the three and
six months ended June 30, 2007. This is a result of the temporary  investment of
certain net capital  proceeds  from the sale of the  Company's  common  stock in
2007.  Interest  expense  for the three and six months  ended June 30,  2008 was
$64,000  and  $104,000  respectively,  compared  to  approximately  $52,000  and
$106,000 for the three and six months ended June 30, 2007. The primary source of
this interest  expense is from the mortgages on the three buildings that we own.
The  increase  for the three  months  ended June 30, 2008  compared to the three
months  ended June 30, 2007 is  attributable  to the interest on the mortgage on
the building we purchased in February, 2008. As a result of equipment purchases,
the Company has utilized $160,000 of its Revolving Credit Facility and converted
it into term loans.

Other Income

Other  income  during the three  months  ended June 30,  2008 was  approximately
$6,000  compared to  approximately  $34,000 for the three  months ended June 30,
2007.  This was primarily the result of the receipt of $28,000 in 2007 which was
previously written off as uncollectible in 2004.

Other income during the six months ended June 30, 2008 was approximately $14,000
compared to approximately  $39,000 for the corresponding  period one year ago.

Income Taxes

For the three and six months ended June 30, 2008, the Company recorded a current
income tax expense of approximately $92,000 and $138,000 respectively,  that was
reduced by the realization of the deferred tax benefits of approximately $70,000
and $128,000.

Net Income

The  Company  reported  net income of  approximately  $7,000 for the three month
period  ended June 30,  2008  compared  to net income of  $165,000  for the same
period,  in 2007.  This decrease was  primarily  attributable  to  approximately
$200,000 of expenses  incurred from an increase in the number of engineering and
production  personnel  employed by the Company in response to both the increased
orders  received for the Company's  products and the costs  associated  with the
Company's  expansion  growth and new product  development in the  Nanomaterials,
Energy, Solar and Semiconductor fields.


                                       15
<PAGE>

For the six month period ended June 30, 2008, the Company reported net income of
approximately  $26,000  compared  to net income of  $261,000  for the six months
ended June 30, 2007. As previously  discussed,  the decreased net income in 2008
versus 2007 is attributable to the hiring of additional personnel and associated
costs related to our increased order levels,  expansion and product  development
as  well  as  the  audit  assessment  of  $168,000  for  workers'   compensation
contributions for the years 2000 through 2006.

Liquidity and Capital Resources

As of June 30, 2008, the Company had aggregate  working capital of approximately
$9,814,000 and cash and cash  equivalents of $3,168,000  compared to $10,314,000
and  $5,110,000  at December 31,  2007,  a decrease of $500,000  and  $1,942,000
respectively. The decrease in cash and cash equivalents was primarily the result
of funding the uncompleted contracts,  increased by approximately $1,398,000, an
increase in accounts receivable of approximately $746,000 partially offset by an
increase in accounts payable of $670,000.

Accounts  receivable,  net as of  June  30,  2008  was  $2,498,000  compared  to
$1,769,000 as of December 31, 2007.  This increase is attributable to the timing
of shipments and customer payments.

As of June 30,  2008 the  Company's  backlog  was  approximately  $4,017,000,  a
decrease of  $1,070,000  or 21.0%  compared to  $5,087,000 at December 31, 2007.
Timing for  completion  of the backlog  varies  depending  on the  product  mix,
however,  there  is  generally  a one to six  month  lag in the  completion  and
shipping of backlogged  product.  Backlog from quarter to quarter can vary based
on the timing of order placements and shipments.

On April 22, 2008,  the Company  entered into a three year Modified and Restated
Revolving Credit Agreement with Capital One, N.A.,  successor by merger to North
Fork Bank pursuant to which the bank has agreed to make  revolving  loans to the
Company of up to $5 million  until May 1, 2011, at which time it will be subject
to renewal.  The loan agreement amends and supersedes the Company's  previous $2
million  revolving  credit  facility  with  the  Bank.  Interest  on the  unpaid
principal  balance  on this  facility  accrues at either (i) the LIBOR rate plus
2.00% or (ii) the bank's prime rate minus .25%. Borrowings are collateralized by
the Company's assets.

On June 30,  2008,  the Company  entered  into a  Consolidation,  Extension  and
Modification  Agreement and  Consolidated  and Restated  Mortgage note each with
Capital  One,  N.A.  The  agreement  consolidated  various  notes and  mortgages
relating to the property and building in Saugerties, New York into a single note
in the  principal  sum of $805,000 of which  approximately  $17,000  represented
additional  borrowings incurred by the Company.  Principal and interest payments
are to be made in equal consecutive monthly installments of $5,903.27 commencing
on August 1, 2008 and  continuing for 119 months,  with a final balloon  payment
being  due on July 1,  2018  equal  to the  remaining  unpaid  principal  on the
maturity date. The principal sum bears interest at a fixed annual rate of 6.20%.
The Note is secured by a first  priority  mortgage lien on the premises,  all of
the Company's  monies,  deposits or other sums held by the Bank on deposit,  the
Agreement, an assignment of the leases and rents from the premises, a lien on


                                       16
<PAGE>

the  Company's  personal  property,  and  $500,000  of  the  proceeds  of a life
insurance  policy  which is owned by the  Company  and issued on the life of the
Company's Chief Executive Officer, Leonard A. Rosenbaum.

The Company believes that based on its historical growth rate, its cash and cash
equivalents  position  at June 30, 2008 and  available  credit  facilities,  the
Company's  funds at June 30, 2008 will be sufficient to meet its working capital
and investment requirements for the next twelve months.

However, we anticipate the business will grow at a faster rate. This may require
additional  funding.  For this reason,  as well as other reasons that arise from
time to time, we may consider raising capital through equity or debt financings.
Any decision to raise additional  capital,  as well as the  determination of the
appropriate  vehicle  for doing so,  will  depend  on market  conditions,  order
levels, opportunities presented to us and other factors.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4T. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

The Company maintains a system of disclosure controls and procedures (as defined
in Rule 13a-15(e)  under the Exchange Act). As required by Rule 13a-15(b)  under
the  Exchange  Act,  management  of the  Company,  under  the  direction  of the
Company's Chief  Executive  Officer and Chief  Financial  Officer,  reviewed and
performed an  evaluation  of the  effectiveness  of design and  operation of the
Company's disclosure controls and procedures (as defined in Rule 13a-15(e) under
the Exchange Act) as of the end of the period  covered by this Report.  Based on
that review and  evaluation,  the Chief  Executive  Officer and Chief  Financial
Officer,  along with the management of the Company,  have  determined that as of
end of the period covered by this Report, the disclosure controls and procedures
were and are effective.

Changes in Internal Controls

There  were no  significant  changes in the  Company's  internal  controls  over
financial reporting that occurred during the six months ended June 30, 2008 that
have materially  affected,  or are reasonably likely to materially  affect,  the
internal controls over financial reporting.

Limitations on the Effectiveness of Controls

We believe that a control  system,  no matter how well  designed  and  operated,
cannot provide absolute assurance that the objectives of the control systems are
met, and no  evaluation  of controls  can provide  absolute  assurance  that all
control  issues  and  instances  of fraud,  if any,  within a company  have been
detected.


                                       17
<PAGE>

                            CVD EQUIPMENT CORPORATION

                                     PART II

                                OTHER INFORMATION


Item 1.    Legal Proceedings.

               None.

Item 2. Changes in Securities and Use of Proceeds.

               None.

Item 3.    Defaults Upon Senior Securities

               None.

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

               None

Item 5.    Other Information.

               None.

Item 6.    Exhibits and Reports Filed on Form 8-K

           (a) Exhibits filed with this report:

31.1    Certification of Chief Executive Officer

31.2    Certification of Chief Financial Officer

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

32.2    Certification of Chief Financial Officer pursuant to U.S.C. Section 1350


           (b) Reports on Form 8-K

                   None


                                       18
<PAGE>

                                   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, this 14th day of August 2008.

                                            CVD EQUIPMENT CORPORATION

                                            By: /s/ Leonard A. Rosenbaum
                                               --------------------------
                                               Leonard A. Rosenbaum
                                               Chief Executive Officer
                                              (Principal Executive Officer)

                                            By: /s/ Glen R. Charles
                                               --------------------------
                                                  Glen R. Charles
                                                  Chief Financial Officer
                                                 (Principal Financial and
                                                   Accounting Officer)



                                       19
<PAGE>

                                  EXHIBIT INDEX


EXHIBIT
NUMBER       DESCRIPTION

31.1   Certification of Chief Executive Officer *

31.2   Certification of Chief Financial Officer *

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

32.2   Certification of Chief Financial Officer pursuant to U.S.C. Section 1350*

* Filed herewith



                                       20
<PAGE>
                                                                    Exhibit 31.1

                  Certifications of Principal Executive Officer
            Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Leonard A. Rosenbaum, certify that:

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

     2.   Based upon my  knowledge,  this  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 report;

     3.   Based upon my knowledge, the financial statements, and other financial
          information  included in this 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
          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-15(e)  and  15d-15(e))  for the
          registrant and have:

               a.   Designed such disclosure controls and procedures,  or caused
                    such disclosure controls and procedures to be designed under
                    our  supervision,   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
                    report is being prepared; b. Designed such internal controls
                    over financial  reporting,  or caused such internal controls
                    over   financial   reporting   to  be  designed   under  our
                    supervision,  to provide reasonable  assurance regarding the
                    reliability  of financial  reporting and the  preparation of
                    financial  statements  for external  purposes in  accordance
                    with generally accepted accounting principles;  c. Evaluated
                    the  effectiveness of the registrant's  disclosure  controls
                    and procedures and presented in this report our  conclusions
                    about  the  effectiveness  of the  disclosure  controls  and
                    procedures,  as of the  end of the  period  covered  by this
                    report based on such  evaluation;  and d.  Disclosed in this
                    report any change in the registrant's  internal control over
                    financial  reporting that occurred  during the  registrant's
                    most recent fiscal quarter (the  registrant's  fourth fiscal
                    quarter in the case of an annual report) that has materially
                    affected,  or is reasonably likely to materially affect, the
                    registrant's internal control over financial reporting; and

    5.    The registrant's other certifying officer and I have disclosed,  based
          on our most recent  evaluation  of  internal  control  over  financial
          reporting, 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 and material weaknesses in the
                    design or  operation  of  internal  control  over  financial
                    reporting  which are reasonably  likely to adversely  affect
                    the registrant's ability to record,  process,  summarize and
                    report financial information; and
               b.   Any fraud, whether or not material, that involves management
                    or  other  employees  who  have a  significant  role  in the
                    registrant's internal control over financial reporting.

 Dated: August 14, 2008

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



                                       21
<PAGE>
                                                                    Exhibit 31.2

                  Certifications of Principal Financial Officer
            Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Glen R. Charles, certify that:

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

     2.   Based upon my  knowledge,  this  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 report;

     3.   Based upon my knowledge, the financial statements, and other financial
          information  included in this 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
          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-15(e)  and  15d-15(e)  for  the
          registrant and have:

          a.   Designed such disclosure controls and procedures,  or caused such
               disclosure  controls  and  procedures  to be  designed  under our
               supervision,  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 report is being prepared;
          b.   Designed such  internal  controls over  financial  reporting,  or
               caused such  internal  controls  over  financial  reporting to be
               designed under our supervision,  to provide reasonable  assurance
               regarding  the   reliability  of  financial   reporting  and  the
               preparation  of financial  statements  for  external  purposes in
               accordance with generally accepted accounting principles;
          c.   Evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls  and   procedures  and  presented  in  this  report  our
               conclusions  about the  effectiveness of the disclosure  controls
               and  procedures,  as of the  end of the  period  covered  by this
               report based on such evaluation; and
          d.   Disclosed in this report any change in the registrant's  internal
               control  over  financial   reporting  that  occurred  during  the
               registrant's most recent fiscal quarter (the registrant's  fourth
               fiscal  quarter  in  the  case  of an  annual  report)  that  has
               materially  affected,  or  is  reasonably  likely  to  materially
               affect,   the   registrant's   internal  control  over  financial
               reporting; and

     5.   The registrant's other certifying officer and I have disclosed,  based
          on our most recent  evaluation  of  internal  control  over  financial
          reporting, 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  and  material  weaknesses  in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the registrant's
               ability  to  record,  process,  summarize  and  report  financial
               information; 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 over financial reporting.

Dated: August 14, 2008

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


                                       22
<PAGE>

                                                                    Exhibit 32.1

                  Certification of Principal Executive Officer
           Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
                  Section 906 of the Sarbanes-Oxley Act of2002



I, Leonard A. Rosenbaum,  President and Chief Executive Officer of CVD Equipment
Corporation,  hereby  certify,  pursuant to 18 U.S.C.  Section  1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge,
the  quarterly  report on Form 10-Q for the period  ending  June 30, 2008 of CVD
Equipment  Corporation (the "Form 10-Q") 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-Q  fairly  presents,  in  all  material
respects,  the  financial  condition  and results of operations of CVD Equipment
Corporation.


Dated: August 14, 2008                  /s/ Leonard A. Rosenbaum
                                      ------------------------------
                                        Leonard A. Rosenbaum
                                        Chief Executive Officer
                                        (Principal Executive Officer)



                                       23

<PAGE>

                                                                    Exhibit 32.2

                  Certification of Principal Financial Officer
           Pursuant to 18 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
certify,  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that to my knowledge, the quarterly report on
Form 10-Q for the period ending June 30, 2008 of CVD Equipment  Corporation (the
"Form 10-Q") 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-Q fairly  presents,  in all material  respects,  the financial  condition and
results of operations of CVD Equipment Corporation.


Dated: August 14, 2008                  /s/  Glen R. Charles
                                    ---------------------------------
                                    Glen R. Charles
                                    Chief Financial Officer
                                    (Principal Financial Officer)



                                       24