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 March 31, 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 Small Business Issuer 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
(Issuer'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)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act 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]
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 4,733,500 shares of Common
Stock, $0.01 par value at May 14, 2008.
-------------------------------------------------------------------------------
CVD EQUIPMENT CORPORATION AND SUBSIDIARY
Index
Part I - Financial Information
Item 1 - Financial Statements (Unaudited)
Consolidated Balance Sheets at March 31, 2008 (Unaudited) and December 31, 2007 2
Consolidated Statements of Operations (Unaudited) for the three 3
months ended March 31, 2008 and 2007
Consolidated Statements of Cash Flows (Unaudited) for the three months 4
ended March 31, 2008 and 2007
Notes to Unaudited Consolidated Financial Statements 5
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of 11
Operations
Item 3 - Quantitative and Qualitative Disclosures About Market 14
Risk
Item 4T - Controls and Procedures 14
Part II - Other Information 15
Item 1 - Legal Proceedings 15
Item 2 - Changes in Securities and Use of Proceeds 15
Item 3 - Defaults Upon Senior Securities 15
Item 4 - Submission of Matters to a Vote of Security Holders 15
Item 5 - Other Information 15
Item 6 - Exhibits and Reports Filed on Form 8-K 15
Signatures 16
Exhibit Index 17
Certification of Chief Executive Officer 18
Certification of Chief Financial Officer 19
Certification of Chief Executive Officer pursuant to U.S.C. Section 1350 20
Certification of Chief Financial Officer pursuant to U.S.C. Section 1350 21
PART 1 - FINANCIAL INFORMATION
Item 1 - Financial Statements
CVD EQUIPMENT CORPORATION AND SUBSIDIARY
Consolidated Balance Sheets
March 31, 2008
(Unaudited) December 31, 2007
------------------ -----------------
ASSETS
Current Assets:
Cash and cash equivalents $ 3,201,479 $ 5,110,447
Accounts receivable, net 2,054,600 1,769,265
Investment 251,130 251,130
Cost and estimated earnings in excess
of billings on uncompleted contracts 2,971,222 1,847,288
Inventories 3,046,696 3,015,635
Deferred income taxes - current 92,299 90,774
Other current assets 395,087 379,360
---------------- -----------------
Total Current Assets 12,012,513 12,463,899
Property, plant and equipment, net 7,111,007 5,055,727
Deferred income taxes - non-current 322,453 266,077
Other assets 676,966 1,114,637
Intangible assets, net 78,552 106,566
---------------- -----------------
Total Assets $ 20,201,492 $ 19,006,906
================ =================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt $ 273,753 $ 222,193
Accounts payable 694,818 517,934
Accrued expenses 802,280 1,245,819
Accrued professional fees - related party 12,500 116,165
Deferred revenue 56,181 47,444
---------------- -----------------
1,839,532 2,149,555
Long-term debt, net of current portion 4,073,878 2,678,421
---------------- -----------------
Total liabilities 5,913,410 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
March 31, 2008 and 4,718,500 at December 31, 2007 47,335 47,185
Additional paid-in-capital 9,682,526 9,592,728
Retained earnings 4,558,221 4,539,017
---------------- -----------------
Total Stockholders' Equity 14,288,082 14,178,930
---------------- -----------------
Total liabilities and stockholders' equity $ 20,201,492 $ 19,006,906
================ -----------------
The accompanying notes are an integral part of the consolidated financial
statements.
2
CVD EQUIPMENT CORPORATION AND SUBSIDIARY
Consolidated Statements of Operations
(Unaudited)
Three Months Ended
March 31,
2008 2007
---- ----
Revenue $ 4,043,499 $ 3,811,277
Cost of revenue 2,826,648 2,555,330
--------- ---------
Gross profit 1,216,851 1,255,947
Operating expenses
Selling and shipping 181,531 278,310
General and administrative 1,019,653 763,226
Related party - professional fees 12,500 10,000
--------- ---------
Total operating expenses 1,213,684 1,051,536
Operating income 3,167 204,411
Other income (expense)
Interest income 37,591 27
Interest expense (40,884) (53,473)
Other income 7,888 5,094
--------- ---------
Total other income (expense) 4,595 (48,352)
Income before income taxes 7,762 156,059
Income tax benefit (expense) 11,442 (59,650)
--------- ---------
Net income $ 19,204 $ 96,409
============= ===========
Basic income per common share $ 0.00 $ 0.03
============= ===========
Diluted income per common share $ 0.00 $ 0.03
============= ===========
Weighted average common shares outstanding
basic income per share 4,732,016 3,284,589
Effect of potential common share issuance:
Stock options 34,229 129,203
--------- ---------
Weighted average common shares outstanding
diluted income per share 4,766,245 3,413,792
===-========= ===========
The accompanying notes are an integral part of the consolidated financial
statements.
3
CVD EQUIPMENT CORPORATION AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended
March 31,
2008 2007
---------- --------
Cash flows from operating activities
Net income $ 19,204 $ 96,409
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Stock-based compensation expense 68,947 41,661
Depreciation and amortization 125,642 105,150
Deferred tax provision (57,901) (58,062)
Bad debt provision (1,952) (2,000)
Changes in operating assets and liabilities:
Accounts receivable (283,383) 423,050
Cost in excess of billings on uncompleted contracts (1,123,934) (568,955)
Inventory (31,061) 87,613
Other current assets (15,729) 10,540
Other assets
Accounts payable 176,885 (6,520)
Accrued expenses (593,663) (61,619)
Deferred revenue 8,737 (212,250)
----------------- -------------
Net cash (used in) operating activities (1,661,749) (144,983)
----------------- -------------
Cash flows from investing activities:
Capital expenditures (2,140,547) (210,633)
Deposits 425,312 13,766
----------------- --------------
Net cash (used in) investing activities (1,715,235) (196,867)
----------------- --------------
Cash flows from financing activities:
Repayments on bank line of credit - net - (5,000)
Proceeds from loans 1,500,000 139,510
Payments of long-term debt (52,983) (61,499)
Net proceeds from stock options exercised 21,000 84,000
---------------- -------------
Net cash provided by financing activities 1,468,017 157,011
---------------- -------------
Net (decrease) in cash and cash equivalents (1,908,967) (184,839)
Cash and cash equivalents at beginning of period 5,110,447 257,341
---------------- -------------
Cash and cash equivalents at end of period $ 3,201,479 $ 72,502
================ =============
Supplemental disclosure of cash flow
information
Income Taxes paid $ 491,850 $ 101,447
Interest paid $ 46,476 $ 52,776
The accompanying notes are an integral part of the consolidated financial
statements.
4
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 months ended March 31, 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 the
Company's 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.
Intercompany transactions have been eliminated in consolidation.
Certain reclassifications have been made to prior period financial statements to
conform to the current year presentation.
5
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:
March 31, 2008 December 31, 2007
-------------- -----------------
(Unaudited)
Costs incurred on uncompleted contracts $ 2,574,232 $1,887,022
Estimated earnings 2,789,334 2,158,386
------------ ----------
5,363,566 4,045,408
Billings to date (2,392,344) (2,198,120)
----------- -----------
Costs and estimated earnings in excess of
billings on uncompleted contracts $ 2,971,222 $1,847,288
============ ===========
6
CVD EQUIPMENT CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 4: INVENTORIES
Inventories consist of the following:
March 31, 2008 December 31, 2007
-------------- -----------------
(Unaudited)
Raw materials $1,098,913 $ 1,077,756
Work-in-process 1,743,642 1,733,738
Finished goods 204,141 204,141
--------------- -----------------
$3,046,696 $ 3,015,635
=============== =================
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 adoption of SFAS No. 157 did not have a material impact on our fair value
measurements.
7
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.
Fair Value Measurement at Reporting Date Using
Quoted Prices in
Active Markets
for Identical Significant Other Significant
Assets Observable Inputs Unobservable Inputs
Description March 31, 2008 Level (1) Level (2) Level (3)
----------- -------------- --------- --------- ---------
Equity Investment $251,130 $ --- $ --- $251,130
Total Assets $251,130 $ --- $ --- $251,130
======== ========
Liabilities $ --- $ --- $ --- $ ---
Total Liabilities $ --- $ --- $ --- $ ---
NOTE 6: BAD DEBTS
Accounts receivables are presented net of an allowance for doubtful accounts of
$10,636 and $12,588 as of March 31, 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 June 1, 2007 the Company entered into a three year Revolving Credit Agreement
with North Fork Bank, permitting it to borrow on a revolving basis amounts up to
$2,000,000 until June 1, 2010, at which time it will be subject to renewal. The
loan bears interest on any unpaid principal balance at a rate to be elected by
the Company, which shall be equal to either (i) the LIBOR Rate plus 2.50% or
(ii) the bank's prime rate plus 1/4 of 1%. This agreement contains certain
financial and other covenants, with which we were in compliance with at March
31, 2008. The prime rate was 5.25% and 7.25% on March 31, 2008 and December 31,
2007 respectively and the Company did not have any outstanding amounts on the
facility. Borrowings are collateralized by the Company's assets. The Company had
no borrowings outstanding as of March 31, 2008 and December 31, 2007.
8
CVD EQUIPMENT CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
On April 22, 2008, the Company entered into a three year Modified and Restated
Revolving Credit Agreement with Capital One, N.A. 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.
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 months ended March 31, 2008 and March 31, 2007, the Company
recorded into selling and general administrative expense approximately $69,000
and $42,000 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.
The majority of the Company's state and all of the federal net operating loss
(NOL'S) carry forwards have been utilized through March 31, 2008. For the three
months ended March 31, 2008, the Company recorded a current income tax expense
of approximately $46,000, which related to various federal, state and local
taxes.
9
CVD EQUIPMENT CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 9: INCOME TAXES
The (benefit) expense for income taxes includes the following:
Three Months Ended March 31,
2008 2007
----- -----
(Unaudited) (Unaudited)
Current:
Federal $ 30,642 $ 108,921
State 15,817 8,791
------------------ -------------
Total Current Provision 46,459 117,712
Deferred:
Federal (45,710) (73,677)
State (12,191) 15,615
------------------ -------------
Total Deferred (Benefit) (57,901) (58,062)
------------------ -------------
$ (11,442) $ 59,650
------------------ -------------
10
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
Revenue
-------
Revenue for the three month period ended March 31, 2008 was $4,043,499 compared
to $3,811,277 for the three month period ended March 31, 2007, an increase of
6.1%, as the Company continues to experience an increasing demand for its
products.
Gross Profit
------------
The Company generated a gross profit of approximately $1,217,000 for a gross
profit margin of 30.1% for the three months ended March 31, 2008 compared to a
gross profit of approximately $1,256,000 for a gross profit margin of 33.0% for
the three months ended March 31, 2007. The decrease is primarily attributable to
an increase in engineering and production personnel necessitated by the
increased orders received by the Company, the expansion plans with our First
Nano laboratory and new product development in the Nanomaterials, Solar, Energy
and Semiconductor fields.
11
Selling, General and Administrative Expenses
--------------------------------------------
Selling and shipping expenses for the three months ended March 31, 2008 and 2007
were $181,531 and $278,310 respectively, representing a 34.8% decrease versus
the prior period. This decrease is primarily attributable to a reduction in
sales commissions during the current period. Sales concluded in this period were
primarily the result of efforts by our direct sales personnel and therefore not
subject to outside sales commissions. The Company incurred approximately
$1,032,000 of general and administrative expenses during the quarter ended March
31, 2008, representing an increase of 33.5% or approximately $259,000 compared
to the approximately $773,000 of general and administrative expenses incurred in
the quarter ended March 31, 2007. From January 2000 through March 2006, the
Company was a member of the Manufacturing Industry Workers' Compensation
Self-Insurance Trust Fund (Fund). The Company is no longer a member. 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 of the findings of a forensic audit performed on the
Fund, 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. In addition, the Company
also incurred increased payroll and benefit costs, stock-based compensation and
other professional fees as well, during the period ended March 31, 2008.
Operating Income
----------------
As a result of the foregoing factors, operating income was approximately $3,000
for the three months ended March 31, 2008 a decrease of $201,000 compared to
approximately $204,000 for the same period one year ago.
Interest Expense, Net
---------------------
Interest income for the three months ended March 31, 2008 was approximately
$38,000 compared to $0 for the three months ended March 31, 2007. This is a
result of the temporary investment of certain net capital proceeds from last
year's sale of the Company's common stock. Interest expense for the three months
ended March 31, 2008 decreased by 23.5% to $40,884 compared to $53,473 during
the three months ended March 31, 2007. The primary source of this interest
expense is from the mortgages on the two buildings that we have owned. The
Company did not utilize its Revolving Credit Facility during the three months
ended March 31, 2008.
Other Income
------------
Other income during the quarter ended March 31, 2008 was approximately $8,000
compared to approximately $5,000 for the corresponding period one year ago.
12
Net Income
----------
The Company reported net income of approximately $19,000 for the quarter ended
March 31, 2008 compared to net income of approximately $96,000 for the quarter
ended March 31, 2007. This decrease was primarily due to approximately $200,000
of expenses incurred from an increase in engineering and production personnel
necessitated by the increased orders received by the Company and the expensing
of $160,000 of additional workers' compensation contributions for the years 2000
through 2006.
Liquidity and Capital Resources
-------------------------------
As of March 31, 2008, the Company had aggregate working capital of approximately
$10,173,000 and cash and cash equivalents of $3,201,000 compared to $10,314,000
and $5,110,000 at December 31, 2007, a decrease of $141,000 and $1,909,000
respectively. This decrease in cash was primarily the result of funding the
uncompleted contracts, which increased by approximately $1,124,000, an increase
in accounts receivable of approximately $283,000 and a reduction of accrued
expenses which primarily consisted of income tax payments of $580,000.
Accounts receivable as of March 31, 2008 was $2,055,000 compared to $1,769,000
as of December 31, 2007. This increase is attributable to the timing of
shipments and customer payments.
As of March 31, 2008 the Company's backlog was approximately $3,364,000, a
decrease of $1,723,000 or 33.9% 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.
The Company believes that based on its historical growth rate its cash, cash
equivalents and available credit facilities 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 which 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.
13
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Item 4T. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief
Financial Officer, conducted an evaluation of the effectiveness of the design
and operation of our disclosure controls and procedures, as required by Exchange
Act Rule 13a-15, as of the end of the period covered by this report. Based upon
that evaluation, the Chief Executive Officer and Chief Financial Officer have
concluded that our disclosure controls and procedures were effective to insure
that information required to be disclosed by us in reports that we file or
submit under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified by the SEC's rules and forms.
Changes in Internal Controls
There were no significant changes in the Company's internal controls over
financial reporting that occurred during the three months ended March 31, 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.
14
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
15
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 15th day of May 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)
16
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
17