UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
Form 10-QSB
(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, 2005
[ ] 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
Incorporation or Organization) Identification No.)
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 Exchange Act during the past 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 an accelerated filer (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: 3,119,800 shares
of Common Stock, $0.01 par value at August 8, 2005.
__________________________________________________________________________
CVD EQUIPMENT CORPORATION AND SUBSIDIARY
Index
Part I - Financial Information
Item 1 - Financial Statements (Unaudited)
Consolidated Balance Sheets at June 30, 2005 (Unaudited)
and December 31, 2004 2
Comparative Consolidated Statements of Operations (Unaudited)
for the three and six months ended June 30, 2005 and 2004 3
Comparative Consolidated Statements of Cash Flows (Unaudited)
for the six months ended June 30, 2005 and 2004 4
Notes to Unaudited Consolidated Financial Statements 5
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
Item 3 - 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
June 30, 2005
(Unaudited) December 31, 2004
-------------- -----------------
ASSETS
Current Assets:
Cash and cash equivalents $ 133,428 $ 171,463
Accounts receivable, net 2,510,417 2,375,257
Cost in excess of billings on uncompleted contracts 37,087 1,110,362
Inventories 2,036,495 1,823,453
Other current assets 101,342 110,743
-------------- -----------------
Total current assets 4,818,769 5,591,278
Property, plant and equipment, net 5,036,205 5,153,017
Deferred income taxes 509,084 300,743
Other assets 507,429 398,587
Intangible assets, net 102,850 109,558
-------------- -----------------
Total assets $10,974,337 $ 11,553,183
============== =================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt $ 217,341 $ 213,394
Short-term notes payable 150,000 850,000
Accounts payable 550,307 725,706
Accrued expenses 808,032 584,443
Accrued professional fees - related party 35,000 41,626
Customer deposits --- 298,152
Deferred revenue 54,489 ---
-------------- -----------------
Total current liabilities 1,815,169 2,713,321
Long-term debt, net of current portion 3,031,563 3,140,628
-------------- -----------------
Total liabilities 4,846,732 5,853,949
-------------- -----------------
Commitments and contingencies --- ---
Stockholders' Equity
Common stock, par value $.01 per share, authorized 10,000,000 shares;
issued and outstanding, 3,119,800 shares at June 30, 2005 and
3,039,100 shares at December 31, 2004 31,198 30,391
Additional paid-in capital 3,035,442 2,902,149
Retained earnings 3,060,965 2,766,694
-------------- -----------------
Total stockholders' equity 6,127,605 5,699,234
-------------- -----------------
Total liabilities and stockholders' equity $10,974,337 $ 11,553,183
============== =================
See notes to the consolidated financial statements
2
CVD EQUIPMENT CORPORATION AND SUBSIDIARY
Consolidated Statements of Operations
(Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
2005 2004 2005 2004
-------------- -------------- -------------- --------------
Revenue: $ 3,008,563 $ 1,726,598 $ 5,406,633 $ 3,918,533
Cost of Revenue 1,794,337 1,171,066 3,421,064 2,773,131
-------------- -------------- -------------- --------------
Gross profit 1,214,226 555,532 1,985,569 1,145,402
-------------- -------------- -------------- --------------
Operating expenses
Selling and shipping 166,848 164,715 336,964 309,693
General and administrative 606,906 574,755 1,138,170 1,043,687
Related party - professional fees 25,000 12,500 35,000 25,000
-------------- -------------- -------------- --------------
Total operating expenses 798,754 751,970 1,510,134 1,378,380
Operating income (loss) 415,472 (196,438) 475,435 (232,978)
-------------- -------------- -------------- --------------
Other income (expense)
Interest income 82 236 708 345
Interest expense (56,495) (53,999) (119,038) (110,866)
Other income 10,154 7,885 14,334 9,900
-------------- -------------- -------------- --------------
Total other (expense) (46,259) (45,878) (103,996) (100,621)
Income (loss) before income taxes 369,213 (242,316) 371,439 (333,599)
Income tax provision $ (76,035) (800) $ (77,168) (1,120)
-------------- -------------- -------------- --------------
Net income (loss) $ 293,178 $ (243,116) $ 294,271 $ (334,719)
============== ============== ============== ==============
Basic income (loss) per common share $ 0.09 $ (0.08) $ 0.10 (0.11)
============== ============== ============== ==============
Diluted income (loss) per common share $ 0.09 $ (0.08) $ 0.09 (0.11)
============== ============== ============== ==============
Weighted average common shares outstanding
basic income (loss) per share 3,100,180 3,039,100 3,069,809 3,039,100
Effect of potential common share issuance:
Stock options 145,176 --- 46,828 ---
-------------- -------------- -------------- --------------
Weighted average common shares outstanding
diluted income (loss) per share 3,245,356 3,039,100 3,116,637 3,039,100
============== ============== ============== ==============
See notes to the consolidated financial statements
3
CVD EQUIPMENT CORPORATION AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended
June 30
2005 2004
-------------- --------------
Cash flows from operating activities
Net income (loss) 294,271 $ (334,719)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation and amortization 177,684 178,518
Deferred tax benefit (208,341) ---
Bad debt provision (393) (3,691)
Changes in operating assets and liabilities:
Accounts receivable (134,767) 915,597
Cost in excess of billings on uncompleted contracts 1,073,275 34,297
Inventory (213,042) (392,990)
Other current assets 9,401 (43,223)
Other assets (133,790) (121,005)
Accounts payable (175,399) 28,960
Accrued expenses 216,963 238,336
Customer deposits (298,152) ---
Billing in excess of costs on uncompleted contracts 0 (174,068)
Deferred revenue 54,489 ---
-------------- --------------
Net cash provided by operating activities 662,199 326,012
-------------- --------------
Cash flows from investing activities:
Capital expenditures (29,216) (23,009)
-------------- --------------
Net cash used in investing activities (29,216) (23,009)
-------------- --------------
Cash flows from financing activities:
Proceeds from short-term borrowings 400,000 575,000
Payments of short-term borrowings (1,100,000) (575,000)
Proceeds from long-term debt 0 26,460
Payments of long-term debt (105,118) (94,995)
Net proceeds from stock options exercised 134,100 ---
-------------- --------------
Net cash used in financing activities (671,018) (68,535)
-------------- --------------
Net (decrease) increase in cash and cash equivalents (38,035) 234,468
Cash and cash equivalents at beginning of period 171,463 321,490
-------------- --------------
Cash and cash equivalents at end of period $ 133,428 $ 555,958
============== ==============
See notes to consolidated financial statements
4
CVD EQUIPMENT CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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-QSB and Item 310(b) of Regulation S-B.
Accordingly, 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, 2005 are not necessarily indicative of the results that
can be expected for the year ending December 31, 2005.
The balance sheet as of December 31, 2004 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,
2004 Form 10-KSB.
For further information, please refer to the consolidated financial
statements and footnotes thereto included in the Company's Annual Report
of Form 10-KSB for the year ended December 31, 2004.
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
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.
Cash and Cash Equivalents
The Company considers all highly liquid financial instruments purchased
with an original maturity of three months or less at the date of
purchase to be cash equivalents.
New Accounting Pronouncements
In May 2005, The Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 154 "Accounting Changes and Error
Corrections" ("SFAS 154"). SFAS 154 changes the requirements for the
accounting for and reporting of a change in accounting principle. SFAS
154 requires that the cumulative effect of voluntarily changing to a new
accounting principle be applied retroactively to prior period financial
statements. Prior to the effective date of SFAS 154, the cumulative
effect of voluntarily changing to a new accounting principle was
included in the operating results of the period in which such change was
adopted. SFAS 154 is effective for fiscal years beginning after December
15, 2005. The Company expects that the adoption of SFAS 154 will not
have a significant impact on its financial statements.
6
CVD EQUIPMENT CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3: UNCOMPLETED CONTRACTS
Costs, estimated earnings and billings on uncompleted contracts are
summarized as follows:
June 30, 2005 December 31, 2004
----------------- -----------------
Costs incurred on uncompleted contracts $ 118,217 $ 1,142,057
Estimated earnings 144,488 1,084,166
----------------- -----------------
262,705 2,226,223
Billings to date (225,618) (1,115,861)
----------------- -----------------
$ 37,087 $ 1,110,362
----------------- -----------------
Included in accompanying balance sheets
Under the following captions:
Costs and estimated earnings in excess
of billings on uncompleted contracts $ 37,087 $ 1,110,362
Billings in excess of costs and estimate
earnings on uncompleted contracts 0 0
----------------- -----------------
$ 37,087 $ 1,110,362
----------------- -----------------
NOTE 4: ACQUISITION OF ASSETS
On May 26, 2005, the Company purchased from First Nano, Inc. certain of
their Nanotechnology process development and equipment assets. The
purchase was made with cash funds from the Company and the assumption of
certain liabilities, both of which are considered to be insignificant to
the overall operations of the business. First Nano develops solutions
for single and multiwall nanotube and nanowire synthesis and
manufactures chemical vapor deposition process equipment suitable for
the synthesis of a variety of carbon nanotubes, one-dimensional and
nanostructures and nanomaterials.
7
CVD EQUIPMENT CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5: INVENTORY
Inventories consist of the following:
June 30, 2005 December 31, 2004
----------------- -----------------
Raw materials $ 688,494 $ 628,934
Work-in-process 839,807 686,325
Finished goods 508,194 508,194
----------------- -----------------
$ 2,036,495 $ 1,823,453
----------------- -----------------
NOTE 6: BAD DEBTS
The Company records an allowance for uncollectible amounts based on a
review of the collectibility of its accounts receivable. Management
determines the adequacy of this allowance by analyzing historical bad
debts, continually evaluating individual customer's receivables and
considering the customer's financial condition and current economic
conditions. If the financial condition of the customers were to
deteriorate, resulting in an impairment of their ability to make
payments, additional allowances could be required.
NOTE 7: SHORT TERM BORROWINGS
June 30, 2005 December 31, 2004
----------------- -----------------
$ 150,000 $ 850,000
On June 1, 2005, the Company and its bank renewed its one year line of
credit facility. The Company may borrow on a revolving basis amounts up
to $1,000,000 or the availability under the borrowing base formula. The
borrowing base shall not exceed 75% of eligible accounts receivable,
defined as accounts receivable not aged more than ninety days from
invoice date. Interest is payable on any unpaid principal balance at the
bank's prime rate plus 3/4 of 1%. The prime rate was 6.25% and 5.25% and
the amount outstanding on the facility was $150,000 and $850,000 on June
30, 2005 and December 31, 2004 respectively. Borrowings are
collateralized by the Company's assets
8
CVD EQUIPMENT CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8: STOCK OPTION PLANS
The Company accounts for the stock option plans under the recognition
and measurement principles of APB Opinion No. 25, Accounting for Stock
Issued to Employees, and related interpretations. The following table
illustrates the effect on net income and earnings per share if the
Company had applied the fair value recognition provisions of FASB
Statement No. 123, accounting for Stock-based Compensation, to stock-
based employee compensation.
Three months ended June 30, Six months ended June 30,
2005 2004 2005 2004
------------ ------------ ------------ ------------
Net income (loss), as reported $ 293,178 $ (243,116) $ 294,271 $ (334,719)
Add: Stock-based employee
compensation expense included in
reported net income, net of
related tax effects --- --- --- ---
Deduct: Total stock-based employee
compensation expense determined
under fair value based method for
all awards, net of related tax effects (1,673) (18,625) (4,328) (37,249)
------------ ------------ ------------ ------------
Pro forma net income (loss) $ 291,505 $ (261,741) $ 289,943 $ (371,968)
------------ ------------ ------------ ------------
Earnings (loss) per share:
Basic-as reported $ 0.09 $ (0.08) $ 0.10 $ (0.11)
------------ ------------ ------------ ------------
Basic-pro forma $ 0.09 $ (0.09) $ 0.09 $ (0.12)
------------ ------------ ------------ ------------
Diluted-as reported $ 0.09 $ (0.08) $ 0.09 $ (0.11)
------------ ------------ ------------ ------------
Diluted-pro forma $ 0.09 $ (0.09) $ 0.09 $ (0.12)
------------ ------------ ------------ ------------
9
CVD EQUIPMENT CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9: INCOME TAXES
The provision (benefit) for income taxes includes the following:
Three Months Ended June 30, Six Months Ended June 30,
2005 2005
-------------- --------------
Current:
Federal $ 246,577 $ 246,577
State 37,799 38,932
-------------- --------------
Total Current Provision 284,376 285,509
Deferred:
Federal (160,769) (160,769)
State (47,572) (47,572)
-------------- --------------
Total Deferred (Benefit) (208,341) (208,341)
-------------- --------------
$ 76,035 $ 77,168
-------------- --------------
The Company has federal and state net operating loss carry forwards of
approximately $966,000 at June 30, 2005. For the six months ended June 30,
2005, the Company recorded a current income tax expense of approximately
$77,000, which related to various federal, state and local taxes. The
current income tax provision was reduced by approximately $238,000 as a
result of the use of available net operating losses.
10
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The following discussion and analysis should be read in conjunction with
the consolidated financial statements and accompanying notes filed as
part of this report.
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 for the three month period ended June 30, 2005 was $3,008,563
compared to $1,726,598 for the three month period ended June 30, 2004,
an increase of 74.2%. This resulted from an increase in sales that began
during the second half of 2004.
Revenue for the six months ended June 30, 2005 was approximately
$5,407,000 representing an increase of approximately $1,488,000 or 38%
over the revenue of $3,919,000 earned during the six months ended June
30, 2004. This is a result of an increase in sales that began during the
latter half of 2004.
The Company's gross profit increased to approximately $1,214,000 during
the three months ended June 30, 2005, an increase of approximately
$658,000 or 118.3% compared to the gross profit of approximately
$556,000 for three months ended June 30, 2004. This increase is
11
attributable to the Company's ability to absorb the fixed costs incurred
due to the increased revenues in addition to the Company's ability to
reduce the direct costs incurred in manufacturing the product lines.
The Company generated a gross profit of approximately $1,986,000 and a
gross profit margin of 36.7% for the six months ended June 30, 2005
compared to a gross profit of approximately $1,145,000 and a gross
profit margin of 29.2% for the six months ended June 30, 2004 as a
result of the Company's ability to more readily absorb those fixed costs
through greater revenues and continuous cost reductions in the product
lines.
Selling and shipping expenses for the three and six months ended June
30, 2005 were $166,848 and $336,964, respectively. This represents a
marginal 1.3% increase over the same three month period one year ago and
an 8.8% increase over the same six month period one year ago. The
increase is a result of the increase in costs associated with trade
shows.
The Company incurred approximately $632,000 of general and
administrative expenses during the quarter ended June 30, 2005,
representing an increase of 7.6% or approximately $45,000 compared to
the approximately $587,000 of general and administrative expenses
incurred in the quarter ended June 30, 2004. This increase is a result
of various increases in employee benefit costs, building and general
insurance costs in addition to those ancillary costs associated with the
acquisition of certain assets from First Nano, Inc..
General and administrative expenses for the six months ended June 30,
2005 were approximately $1,173,000 compared to approximately $1,069,000
incurred during the six months ended June 30, 2004, an increase of 9.7%.
This increase is also attributable to the increases experienced in
employee benefit costs, building and general insurance costs and those
costs incurred as a result of the acquisition of certain assets from
First Nano, Inc.
Interest expense for the three and six months ended June 30, 2005
increased to $56,495 and $119,038, respectively compared to $53,999 and
$110,866 for the three and six months ended June 30, 2004. This
represents an increase of 4.6% and 7.4% for the three and six months
ended June 30, 2004 as a result of increased borrowing by the Company at
higher interest rates on its short-term revolving credit line.
The Company has federal and state net operating loss carry forwards of
approximately $966,000 at June 30, 2005. For the six months ended June
30, 2005, the Company recorded a current income tax expense of
approximately $77,000, which related to various federal, state and local
taxes. The current income tax provision was reduced by approximately
$238,000 as a result of the use of available net operating losses. We
also re-evaluated the deferred tax asset valuation allowance and further
reduced the provision by approximately $208,000, which was recorded as a
tax benefit.
As a result of the foregoing factors, for the three and six months ended
June 30, 2005, the Company earned approximately $293,000 and $294,000,
respectively compared to net losses of
12
approximately $243,000 and $335,000 for the same periods, respectively,
one year ago. The increase is primarily attributable to both the
increase in revenues during the current period and the cost reductions
achieved in manufacturing.
Liquidity and Capital Resources
As of June 30, 2005, the Company had an aggregate working capital of
approximately $3,004,000 compared to $2,878,000 at December 31, 2004 an
increase of $126,000. This increase was the result of the following: our
net income, after adding back depreciation and amortization, increased
working capital by approximately $472,000. The increase in working
capital also included approximately $134,000 in net proceeds from the
exercise of stock options. These increases were partially offset by an
investment in capitalized software of $125,000 and by an additional
$29,000 for the acquisition of equipment. The remaining decrease in
working capital of $326,000 was due to changes in other current assets
and liabilities.
Accounts receivable as of June 30, 2005 was $2,510,417 compared to
$2,375,257 as of December 31, 2004. This increase is attributable to
timing of customer payments and increased billings.
As of June 30, 2005 the Company's backlog was approximately $2,560,000,
an increase of $130,000 or 5.3% compared to $2,430,000 at December 31,
2004. The 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.
On June 1, 2005 the Company and its bank renewed its one year line of
credit facility. The Company may borrow on a revolving basis amounts up
to the lesser of $1,000,000 or the availability under the borrowing base
formula. The borrowing base shall not exceed 75% of eligible accounts
receivable, defined as accounts receivable not aged more than ninety
days from invoice date. Interest is payable on any unpaid principal
balance at the bank's prime rate plus 3/4 of 1%. As of June 30, 2005,
$150,000 was outstanding on this facility compared to $850,000 at
December 31, 2004. Borrowings are collateralized by the Company's
assets.
The Company believes that 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, future
growth, including potential acquisitions, may require additional
funding, and from time to time the Company may need to raise capital
through additional equity or debt financing.
13
Item 3. 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 six months ended June
30, 2005 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 11th day of August 2005.
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
Exhibit 31.1
Certifications Pursuant to Rule 13A-14 or 15D-14 of the Securities Exchange
Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
I, Leonard A. Rosenbaum, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of CVD Equipment
Corporation;
2. Based on 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 on 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. 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
c. 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 11, 2005
/s/ Leonard A. Rosenbaum
---------------------------
President, Chief Executive Officer and Director
18
Exhibit 31.2
Certifications Pursuant to Rule 13A-14 or 15D-14 of the Securities exchange
act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
I, Glen R. Charles, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of CVD Equipment
Corporation;
2. Based on 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 on 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. 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
c. 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 11, 2005
/s/ Glen R. Charles
----------------------
Chief Financial Officer
19
Exhibit 32.1
Certification of Principal Executive Officer
Pursuant to U.S.C. Section 1350
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
I, Leonard A. Rosenbaum, President and Chief Executive Officer of CVD
Equipment Corporation, hereby certify, to my knowledge, that the quarterly
report on Form 10-QSB for the period ending June 30, 2005 of CVD Equipment
Corporation (the "Form 10-QSB") 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-QSB fairly presents, in all material
respects, the financial condition and results of operations of CVD Equipment
Corporation.
Dated: August 11, 2005 /s/ Leonard A. Rosenbaum
Leonard A. Rosenbaum
Chief Executive Officer
(Principal Executive Officer)
20
Exhibit 32.2
Certification of Principal Financial Officer
Pursuant to U.S.C. Section 1350
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
I, Glen R. Charles, Chief Financial Officer of CVD Equipment Corporation,
hereby certify, to my knowledge, that the quarterly report on Form 10-QSB
for the period ending June 30, 2005 of CVD Equipment Corporation (the "Form
10-QSB") 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-QSB fairly presents, in all material respects, the financial
condition and results of operations of CVD Equipment Corporation.
Dated: August 11, 2005 /s/ Glen R. Charles
Glen R. Charles
Chief Financial Officer
(Principal Financial Officer)
21