CVV

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How CVV rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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Risks Related to Sales and Product Development.
Historically, we have maintained a highly concentrated customer base so that changes in ordering patterns, delays or order cancellations could have a material adverse effect on our business and results of operations.
During 2025, two customers represented 27.6% and 13.7% of our total revenues, respectively.
The industries in which we operate are characterized by ongoing factors, including: ● global and regional economic and geopolitical developments and conditions including in Europe, Asia, and Middle East; ● governmental budgetary and political constraints; ● changes in the capacity utilization and production volume for research and industrial applications in the markets in which we operate; ● the profitability and capital resources of manufacturers in the markets in which we operate; ● changes in technology; ● the availability of funds for research and development; and ● the effects of supply chain disruptions.
For these and other reasons, demand for our products may fluctuate significantly and, consequently, our results of operations for past periods may not necessarily be indicative of future operating results.
There is current uncertainty about the future relationship between the United States and other countries with respect to trade policies, taxes, government regulations, and tariffs and we cannot predict whether, and to what extent, U.S. trade policies will change in the future.
We must be able to introduce these products and product enhancements into the market in a timely manner, in response to customers’ demands for higher-performance research and assembly equipment, customized to address rapid technological advances in capital equipment designs.
To maintain our success in the marketplace, we may have to substantially increase our expenditure on research and development.
Risks Related to Manufacturing and Supply Chain Manufacturing interruptions or delays could affect our ability to meet customer demand and lead to higher costs, while the failure to accurately estimate customer demand could result in excess or obsolete inventory.
Geopolitical developments across Europe, Asia and Middle East have and may continue to restrict our ability to procure raw materials and components such as nickel and integrated circuits.
We have experienced increased costs on certain components as well as delays in supply chain delivery, which may also impact on our ability to recognize revenue and reduce our gross profit margins, as well as extend our manufacturing lead times and reduce our manufacturing efficiencies.
We have begun placing orders with more lead time to help mitigate the manufacturing delays, as well as assessing other suppliers or components to attempt to mitigate the potential cost impacts.
In addition, we are utilizing our in-house flexible manufacturing to attempt to further mitigate both potential schedule delivery delays and material cost increase, as well as increasing sales prices.
Because of the variability and uniqueness of our customers’ orders, we try to avoid maintaining an extensive inventory of materials and components for manufacturing.
In addition, breaches of our security measures and the unapproved dissemination of proprietary information or sensitive data about us, our customer, or other third parties, could expose us, our customers, or other third parties to a risk of loss or misuse of this information, resulting in litigation and potential liability for us, damage our reputation, or otherwise harm our business.
Our financial position and results of operations may be materially harmed if we are unable to recover our investment in research and development.
If we cannot negotiate the necessary licenses on commercially reasonable terms or successfully defend our position, our ability to utilize such intellectual property could substantially inhibit our access to certain markets and our ability to compete in these markets which could have a material adverse effect on our financial position and results of operations.
Risks Related to Financial and Accounting Matters Volatile demand for our products may make it difficult for us to accurately budget our expense levels, which are based in part on our projections of future revenues.
Historically, demand for our equipment and related consumable products have been volatile because of changes in supply and demand, our ability to market and sell our products and other factors in the manufacturing process.
Our orders levels tend to be more volatile than our revenue, as any change in demand is reflected immediately in orders booked, which are net of cancellations, while revenue, tends to be recognized over multiple quarters because of procurement and production lead times, and the deferral of certain revenue under our revenue recognition policies.
When fluctuations in our order levels and backlog result in lower-than-expected revenue levels, operating results have been and may continue to be materially adversely affected, and cost reduction measures have been and may continue to be necessary for us to remain competitive and financially sound.
While we have concluded that, as of December 31, 2025, our disclosure and reporting controls were effective as included in Part II, Item 9A, there can be no assurance that material weaknesses will not be identified in the future.
Risks Related to our Stock The price of our common shares is volatile and could decline significantly.
The stock market in general and the market for technology stocks have experienced volatility.
In response to the continued fluctuations in our order rates and the recent decline in the bookings of our CVD Equipment division, we have reduced our workforce during 2025.
These actions could result in an increase in future employee turnover or otherwise impact our ability to hire and retain qualified personnel.

Gone since FY2024

Risk categories: ● Risks related to sales and product development ● Risks related to manufacturing and supply chain ● Risks related to cybersecurity, intellectual property and regulatory compliance ● Risks related to financial and accounting matters ● Risks related to product liability ● Risks related to our stock ● General risk factors Risks related to sales and product development Historically, we have maintained a highly concentrated customer base so that changes in ordering patterns, delays or order cancellations could have a material adverse effect on our business and results of operations.
During 2024, one customer represented 29.5% of our total revenues.
The industries in which we operate are characterized by ongoing factors, including: ● global and regional economic developments and conditions including in Europe and Asia; ● governmental budgetary and political constraints; ● changes in the capacity utilization and production volume for research and industrial applications in the markets in which we operate; ● the profitability and capital resources of manufacturers in the markets in which we operate; ● changes in technology; ● the availability of funds for research and development; and ● the effects of supply chain disruptions.
For these and other reasons, our results of operations for past periods may not necessarily be indicative of future operating results.
There is current uncertainty about the future relationship between the United States and other countries with respect to trade policies, taxes, government regulations, and tariffs and we cannot predict whether, and to what extent, U.S. trade policies will change in the future, including as a result of changes by the new U.S. presidential administration.
We must be able to introduce these products and product enhancements into the market in a timely manner, in response to customer’s demands for higher-performance research and assembly equipment, customized to address rapid technological advances in capital equipment designs.
To maintain our success in the marketplace, we may have to substantially increase our expenditures on research and development.
Risks related to manufacturing and our supply chain Manufacturing interruptions or delays could affect our ability to meet customer demand and lead to higher costs, while the failure to estimate customer demand accurately could result in excess or obsolete inventory.
Geopolitical developments across Europe and Asia have and may continue to restrict our ability to procure raw materials and components such as nickel and integrated circuits.
Since 2021, we have experienced increased costs on certain components as well as delays in supply chain delivery, which may also impact our ability to recognize revenue and reduce our gross profit margins, as well as extend our manufacturing lead times and reduce our manufacturing efficiencies.
We have begun placing orders with more lead time to help mitigate the manufacturing delays, as well as assessing other suppliers or components to attempt to mitigate the potential cost impacts In addition, we are utilizing our in-house flexible manufacturing to attempt to further mitigate both potential schedule delivery delays and material cost increase, as well as increasing sales prices.
Because of the variability and uniqueness of our customer’s orders, we try to avoid maintaining an extensive inventory of materials and components for manufacturing.
In addition, breaches of our security measures and the unapproved dissemination of proprietary information or sensitive data about us, our customer, or other third parties, could expose us, our customers, or other third parties to a risk of loss or misuse of this information, result in litigation and potential liability for us, damage our reputation, or otherwise harm our business.
Our financial position and results of operations may be materially harmed if we are unable to recoup our investment in research and development.
If we are not able to negotiate the necessary licenses on commercially reasonable terms or successfully defend our position, our ability to utilize such intellectual property could substantially inhibit our access to certain markets and our ability to compete in these markets which could have a material adverse effect on our financial position and results of operations.
Risks related to financial and accounting matters Cyclical demand for our products may make it difficult for us to accurately budget our expense levels, which are based in part on our projections of future revenues.
Historically, demand for our equipment and related consumable products have been volatile because of changes in supply and demand, and other factors in the manufacturing process.
Our orders tend to be more volatile than our revenue, as any change in demand is reflected immediately in orders booked, which are net of cancellations, while revenue, tends to be recognized over multiple quarters because of procurement and production lead times, and the deferral of certain revenue under our revenue recognition policies.
When cyclical fluctuations result in lower-than-expected revenue levels, operating results have been and may continue to be materially adversely affected and cost reduction measures have been and may continue to be necessary for us to remain competitive and financially sound.
While we have concluded that, as of December 31, 2024, our disclosure and reporting controls were effective as included in Part II, Item 9A, there can be no assurance that material weaknesses will not be identified in the future.
Risk related to our stock The price of our common shares is volatile and could decline significantly.
The stock market in general and the market for technology stocks has experienced volatility.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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