Sono-Tek (SOTK) 10-Q 15 Oct 15 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Aug. 31, 2015	Oct. 13, 2015
Document And Entity Information
Entity Registrant Name	SONO TEK CORP
Entity Central Index Key	806,172
Document Type	10-Q
Document Period End Date	Aug. 31, 2015
Amendment Flag	false
Current Fiscal Year End Date	--02-29
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		14,946,274
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,016

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Aug. 31, 2015	Feb. 28, 2015
Current Assets:
Cash and cash equivalents	$ 2,185,230	$ 2,562,782
Marketable Securities	1,620,261	1,652,485
Accounts receivable (less allowance of $40,000 and $43,047 at August 31 and February 28, respectively)	1,104,714	1,029,250
Inventories, net	2,434,615	2,059,177
Prepaid expenses and other current assets	52,646	94,487
Total current assets	7,397,466	7,398,181
Land	250,000	250,000
Buildings, net	1,972,034	2,015,625
Equipment, furnishings and building improvements, net	732,807	661,411
Intangible and other assets, net	174,609	175,412
Deferred tax asset	90,021	90,021
TOTAL ASSETS	10,616,937	10,590,650
Current Liabilities:
Accounts payable	574,999	584,963
Accrued expenses	667,807	691,937
Customer deposits	412,041	462,168
Current maturities of long term debt	137,642	158,184
Income taxes payable	106,949	229,927
Total current liabilities	1,899,438	2,127,179
Long term debt, less current maturities	1,251,393	1,319,737
Total liabilities	$ 3,150,831	$ 3,446,916
Commitments and Contingencies
Stockholders' Equity
Common stock, $.01 par value; 25,000,000 shares authorized, 14,946,274 and 14,933,107 shares issued and outstanding, at August 31 and February 28, respectively	$ 149,463	$ 149,331
Additional paid-in capital	8,790,788	8,766,160
Accumulated deficit	(1,474,145)	(1,771,757)
Total stockholders' equity	7,466,106	7,143,734
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 10,616,937	$ 10,590,650

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Aug. 31, 2015	Feb. 28, 2015
Statement of Financial Position [Abstract]
Allowance for doubtful accounts receivable	$ 40,000	$ 43,047
Common stock, par value	$ 0.01	$ 0.01
Common stock, authorized	25,000,000	25,000,000
Common stock, issued shares	14,946,274	14,933,107
Common stock, outstanding shares	14,946,274	14,933,107

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2015	Aug. 31, 2014
Income Statement [Abstract]
Net Sales	$ 2,974,673	$ 2,633,727	$ 5,857,570	$ 5,054,426
Cost of Goods Sold	1,485,069	1,331,640	2,994,835	2,604,373
Gross Profit	1,489,604	1,302,087	2,862,735	2,450,053
Operating Expenses
Research and product development costs	332,806	254,983	614,937	490,830
Marketing and selling expenses	592,074	553,846	1,163,701	1,097,694
General and administrative costs	287,503	251,680	544,288	493,264
Rental operations expense	38,787	42,414	78,332	81,574
Total Operating Expenses	1,251,170	1,102,923	2,401,258	2,163,362
Operating Income	238,434	199,164	461,477	286,691
Interest Expense	(14,851)	(16,275)	(30,064)	(32,310)
Interest Income	12,708	7,740	26,395	9,718
Other (expense) income	(40,180)	(2,065)	(54,460)	6,257
Income form Operations Before Income Taxes	196,111	188,564	403,348	270,356
Income Tax Expense	52,521	73,540	105,736	88,689
Net Income	$ 143,590	$ 115,024	$ 297,612	$ 181,667
Basic Earnings Per Share	$ 0.01	$ 0.01	$ 0.02	$ 0.01
Diluted Earnings Per Share	$ 0.01	$ 0.01	$ 0.02	$ 0.01
Weighted Average Shares - Basic	14,944,124	14,713,788	14,938,615	14,711,770
Weighted Average Shares - Diluted	15,046,066	14,876,819	15,033,588	14,859,769

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Aug. 31, 2015	Aug. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$ 297,612	$ 181,667
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	215,792	193,613
Stock based compensation expense	22,085	23,348
Allowance for doubtful accounts	(3,047)	6,000
Inventory reserve	60,000	$ 60,000
Unrealized loss on marketable securities	53,779
(Increase) Decrease in:
Accounts receivable	(72,417)	$ (550,300)
Inventories	(435,436)	(391,388)
Prepaid expenses and other current assets	41,841	134,290
Increase (Decrease) in:
Accounts payable and accrued expenses	(34,094)	59,638
Customer deposits	(50,127)	38,032
Income taxes payable	(122,978)	(38,358)
Net Cash (Used In) Operating Activities	(26,990)	(283,458)
CASH FLOW FROM INVESTING ACTIVITIES:
Patent application and other asset costs	(6,776)	(17,400)
Purchase of equipment and furnishings	(236,021)	(110,552)
Purchase of marketable securities	(21,554)	(509,244)
Net Cash (Used in) Investing Activities	(264,351)	$ (637,196)
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options	2,675
Repayments of notes payable and loans	(88,886)	$ (95,658)
Net Cash (Used In) Financing Activities	(86,211)	(95,658)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(377,552)	(1,016,312)
CASH AND CASH EQUIVALENTS
Beginning of period	2,562,782	3,232,021
End of period	2,185,230	2,215,709
SUPPLEMENTAL DISCLOSURE:
Interest paid	30,064	32,310
Taxes Paid	$ 228,618	$ 127,046

Significant Accounting Policies

Significant Accounting Policies	6 Months Ended
	Aug. 31, 2015
Notes to Financial Statements
Significant Accounting Policies	NOTE 1: SIGNIFICANT ACCOUNTING POLICIES Cash and Cash Equivalents – Consolidation Fair Value of Financial Instruments – Level 1: Quoted prices in active markets. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. The fair values of financial assets of the Company were determined using the following categories at August 31, 2015 and February 28, 2015: Quoted Prices in Active Markets (Level 1) August 31, 2015 February 28, 2015 Marketable Securities $ 1,620,261 $ 1,652,485 Marketable Securities include mutual funds of $1,620,261, which are considered to be highly liquid and easily tradable as of August 31, 2015. These securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within the Company’s fair value hierarchy. Impact of New Accounting Pronouncements Intangible Assets Interim Reporting The financial information reflects all adjustments, normal and recurring, which, in the opinion of management, are necessary for a fair presentation of the results for the interim periods presented. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The results for such interim periods are not necessarily indicative of the results to be expected for the year. Reclassifications –

Inventories

Inventories	6 Months Ended
	Aug. 31, 2015
Notes to Financial Statements
Inventories	NOTE 2: INVENTORIES Inventories consist of the following: August 31, 2015 February 28, 2015 Finished goods $ 607,061 $ 441,026 Work in process 400,682 220,577 Raw materials and subassemblies 1,574,144 1,692,202 Total 2,581,887 2,353,805 Less: Allowance (147,272 ) (294,628 ) Net inventories $ 2,434,615 $ 2,059,177

Stock Options and Warrants

Stock Options and Warrants	6 Months Ended
	Aug. 31, 2015
Equity [Abstract]
Stock Options and Warrants	NOTE 3: STOCK OPTIONS AND WARRANTS Stock Options Under the 2003 Stock Incentive Plan, as amended ("2003 Plan"), until May 2013, options were available to be granted to officers, directors, consultants and employees of the Company and its subsidiaries to purchase up to 1,500,000 of the Company's common shares. As of August 31, 2015, there were 240,500 options outstanding under the 2003 Plan, under which no additional options may be granted.

Stock Based Compensation

Stock Based Compensation	6 Months Ended
	Aug. 31, 2015
Notes to Financial Statements
Stock Based Compensation	NOTE 4: STOCK BASED COMPENSATION The weighted-average fair value of options are estimated on the date of grant using the Black-Scholes options-pricing model. In computing the impact, the fair value of each option is estimated on the date of grant based on the Black-Scholes options-pricing model utilizing certain assumptions for a risk free interest rate; volatility; and expected remaining lives of the awards. The assumptions used in calculating the fair value of share-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and the Company uses different assumptions, the Company’s stock-based compensation expense could be materially different in the future. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. In estimating the Company’s forfeiture rate, the Company analyzed its historical forfeiture rate, the remaining lives of unvested options, and the number of vested options as a percentage of total options outstanding. If the Company’s actual forfeiture rate is materially different from its estimate, or if the Company reevaluates the forfeiture rate in the future, the stock-based compensation expense could be significantly different from what the Company has recorded in the current period. For the six months ended August 31, 2015 and 2014, net income and earnings per share reflect the actual deduction for stock-based compensation expense. The impact of applying ASC 718 approximated $23,000 and $22,000 in additional compensation expense during the six months ended August 31, 2015 and 2014, respectively. Such amounts are included in general and administrative expenses on the statements of income. The expense for stock-based compensation is a non-cash expense item.

Earnings Per Share

Earnings Per Share	6 Months Ended
	Aug. 31, 2015
Notes to Financial Statements
Earnings Per Share	NOTE 5: EARNINGS PER SHARE The denominators for the calculation of diluted earnings per share at August 31, 2015 and 2014 are calculated as follows: Six Months Ended August 31, Three Months Ended August 31, 2015 2014 2015 2014 Denominator for basic earnings per share 14,938,615 14,711,770 14,944,124 14,713,788 Dilutive effect of stock options 94,973 147,999 101,942 163,031 Denominator for diluted earnings per share 15,033,588 14,859,769 15,046,066 14,876,819 Basic Earnings Per Share $ 0.02 $ 0.01 $ 0.01 $ 0.01 Diluted Earnings Per Share $ 0.02 $ 0.01 $ 0.01 $ 0.01

Long Term Debt

Long Term Debt	6 Months Ended
	Aug. 31, 2015
Notes to Financial Statements
Long Term Debt	NOTE 6: LONG TERM DEBT Long-term debt consists of the following: August 31, February 28, 2015 2015 Note payable, bank, collateralized by land and buildings, payable in monthly installments of principal and interest of $16,358 through January 2024. Interest rate 4.15%. 10 year term. $ 1,389,035 $ 1,457,379 Equipment loan, bank, collateralized by related production equipment, payable in monthly installments of principal and interest of $5,158 through June 2015. Interest rate 2.12%. 48 month term. — 20,542 Total long term debt 1,389,035 1,477,921 Due within one year 137,642 158,184 Due after one year $ 1,251,393 $ 1,319,737

Revolving Line of Credit

Revolving Line of Credit	6 Months Ended
	Aug. 31, 2015
Notes to Financial Statements
Revolving Line of Credit	NOTE 7: REVOLVING LINE OF CREDIT The Company has a $750,000 revolving line of credit at prime which was 3.25% at August 31, 2015. The loan is collateralized by all of the assets of the Company, except for the land and buildings. The line of credit is payable on demand and must be retired for a 30 day period once annually. If the Company fails to perform the 30 day annual pay down or if the bank elects to terminate the credit line, the bank may at its option convert the outstanding balance to a 36 month term note with payments including interest in 36 equal installments. As of August 31, 2015, the Company’s outstanding balance was $0, and the unused credit line was $750,000.

Segment Information

Segment Information	6 Months Ended
	Aug. 31, 2015
Notes to Financial Statements
Segment Information	NOTE 8: SEGMENT INFORMATION The Company operates in two segments: ultrasonic spray coating systems, which is the business of developing, manufacturing, selling, installing and servicing ultrasonic spray coating equipment; and real estate operations, which is the business of owning and operating the Sono-Tek Industrial Park. All inter-company transactions are eliminated in consolidation. For the six and three months ended August 31, 2015 and 2014, segment information is as follows: Six Months Ended August 31, 2015 Three Months Ended August 31, 2015 Ultrasonic Rental Real Eliminations Consolidated Ultrasonic Rental Real Eliminations Consolidated Net Sales $ 5,810,820 $ 144,899 $ 98,149 $ 5,857,570 $ 2,952,223 $ 71,524 $ 49,074 $ 2,974,673 Rental Expense $ 98,149 $ 78,332 $ (98,149 ) $ 78,332 $ 49,074 $ 38,787 $ (49,074 ) $ 38,787 Interest Expense $ 75 $ 29,989 $ 30,064 $ — $ 14,851 $ 14,851 Net Income $ 261,110 $ 36,502 $ 297,612 $ 110,853 $ 32,737 $ 143,590 Assets $ 8,132,679 $ 2,484,258 $ 10,616,937 $ 8,132,679 $ 2,484,258 $ 10,616,937 Debt $ — $ 1,389,035 $ 1,389,035 $ — $ 1,389,035 $ 1,389,035 Six Months Ended August 31, 2014 Three Months Ended August 31, 2014 Ultrasonic Rental Real Eliminations Consolidated Ultrasonic Rental Real Eliminations Consolidated Net Sales $ 5,011,376 $ 141,199 $ 98,149 $ 5,054,426 $ 2,609,427 $ 73,374 $ 49,074 $ 2,633,727 Rental Expense $ 98,149 $ 81,574 $ (98,149 ) $ 81,574 $ 49,074 $ 42,414 $ (49,074 ) $ 42,414 Interest Expense $ 833 $ 31,477 $ 32,310 $ 472 $ 15,803 $ 16,275 Net Income $ 154,352 $ 27,315 $ 181,667 $ 100,339 $ 14,685 $ 115,024 Assets $ 7,472,177 $ 2,475,802 $ 9,947,979 $ 7,472,177 $ 2,475,802 $ 9,947,979 Debt $ 51,073 $ 1,523,793 $ 1,574,866 $ 51,073 $ 1,523,793 $ 1,574,866

Significant Accounting Polici14

Significant Accounting Policies (Policies)	6 Months Ended
	Aug. 31, 2015
Notes to Financial Statements
Cash and Cash Equivalents	Cash and Cash Equivalents –
Consolidation	Consolidation
Fair Value of Financial Instruments	Fair Value of Financial Instruments - Level 1: Quoted prices in active markets. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. The fair values of financial assets of the Company were determined using the following categories at August 31, 2015 and February 28, 2015: Quoted Prices in Active Markets (Level 1) August 31, 2015 February 28, 2015 Marketable Securities $ 1,620,261 $ 1,652,485 Marketable Securities include mutual funds of $1,620,261, which are considered to be highly liquid and easily tradable as of August 31, 2015. These securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within the Company’s fair value hierarchy.
Impact of New Accounting Pronouncements	Impact of New Accounting Pronouncements
Intangible Assets	Intangible Assets
Interim Reporting	Interim Reporting The financial information reflects all adjustments, normal and recurring, which, in the opinion of management, are necessary for a fair presentation of the results for the interim periods presented. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The results for such interim periods are not necessarily indicative of the results to be expected for the year.
Reclassifications	Reclassifications –

Significant Accounting Polici15

Significant Accounting Policies (Tables)	6 Months Ended
	Aug. 31, 2015
Notes to Financial Statements
Fair values of financial assets of the Company	Quoted Prices in Active Markets (Level 1) August 31, 2015 February 28, 2015 Marketable Securities $ 1,620,261 $ 1,652,485

Inventories (Tables)

Inventories (Tables)	6 Months Ended
	Aug. 31, 2015
Inventories Tables
Inventories	August 31, 2015 February 28, 2015 Finished goods $ 607,061 $ 441,026 Work in process 400,682 220,577 Raw materials and subassemblies 1,574,144 1,692,202 Total 2,581,887 2,353,805 Less: Allowance (147,272 ) (294,628 ) Net inventories $ 2,434,615 $ 2,059,177

Earnings Per Share (Tables)

Earnings Per Share (Tables)	6 Months Ended
	Aug. 31, 2015
Earnings Per Share Tables
Computation of basic and diluted earnings per share	Six Months Ended August 31, Three Months Ended August 31, 2015 2014 2015 2014 Denominator for basic earnings per share 14,938,615 14,711,770 14,944,124 14,713,788 Dilutive effect of stock options 94,973 147,999 101,942 163,031 Denominator for diluted earnings per share 15,033,588 14,859,769 15,046,066 14,876,819 Basic Earnings Per Share $ 0.02 $ 0.01 $ 0.01 $ 0.01 Diluted Earnings Per Share $ 0.02 $ 0.01 $ 0.01 $ 0.01

Long Term Debt (Tables)

Long Term Debt (Tables)	6 Months Ended
	Aug. 31, 2015
Long Term Debt Tables
Long-term debt	August 31, February 28, 2015 2015 Note payable, bank, collateralized by land and buildings, payable in monthly installments of principal and interest of $16,358 through January 2024. Interest rate 4.15%. 10 year term. $ 1,389,035 $ 1,457,379 Equipment loan, bank, collateralized by related production equipment, payable in monthly installments of principal and interest of $5,158 through June 2015. Interest rate 2.12%. 48 month term. — 20,542 Total long term debt 1,389,035 1,477,921 Due within one year 137,642 158,184 Due after one year $ 1,251,393 $ 1,319,737

Segment Information (Tables)

Segment Information (Tables)	6 Months Ended
	Aug. 31, 2015
Segment Information Tables
Segment information	Six Months Ended August 31, 2015 Three Months Ended August 31, 2015 Ultrasonic Rental Real Eliminations Consolidated Ultrasonic Rental Real Eliminations Consolidated Net Sales $ 5,810,820 $ 144,899 $ 98,149 $ 5,857,570 $ 2,952,223 $ 71,524 $ 49,074 $ 2,974,673 Rental Expense $ 98,149 $ 78,332 $ (98,149 ) $ 78,332 $ 49,074 $ 38,787 $ (49,074 ) $ 38,787 Interest Expense $ 75 $ 29,989 $ 30,064 $ — $ 14,851 $ 14,851 Net Income $ 261,110 $ 36,502 $ 297,612 $ 110,853 $ 32,737 $ 143,590 Assets $ 8,132,679 $ 2,484,258 $ 10,616,937 $ 8,132,679 $ 2,484,258 $ 10,616,937 Debt $ — $ 1,389,035 $ 1,389,035 $ — $ 1,389,035 $ 1,389,035 Six Months Ended August 31, 2014 Three Months Ended August 31, 2014 Ultrasonic Rental Real Eliminations Consolidated Ultrasonic Rental Real Eliminations Consolidated Net Sales $ 5,011,376 $ 141,199 $ 98,149 $ 5,054,426 $ 2,609,427 $ 73,374 $ 49,074 $ 2,633,727 Rental Expense $ 98,149 $ 81,574 $ (98,149 ) $ 81,574 $ 49,074 $ 42,414 $ (49,074 ) $ 42,414 Interest Expense $ 833 $ 31,477 $ 32,310 $ 472 $ 15,803 $ 16,275 Net Income $ 154,352 $ 27,315 $ 181,667 $ 100,339 $ 14,685 $ 115,024 Assets $ 7,472,177 $ 2,475,802 $ 9,947,979 $ 7,472,177 $ 2,475,802 $ 9,947,979 Debt $ 51,073 $ 1,523,793 $ 1,574,866 $ 51,073 $ 1,523,793 $ 1,574,866

Significant Accounting Polici20

Significant Accounting Policies - Fair values of financial assets of the Company (Details) - USD ($)	Aug. 31, 2015	Feb. 28, 2015
Marketable Securities	$ 1,620,261	$ 1,652,485
Quoted Prices in Active Markets (Level 1)
Marketable Securities	$ 1,620,261	$ 1,652,485

Significant Accounting Polici21

Significant Accounting Policies - Fair values of financial assets of the Company (Details Narrative) - USD ($)	Aug. 31, 2015	Feb. 28, 2015
Notes to Financial Statements
Mutual funds	$ 1,620,261	$ 1,652,485

Significant Accounting Polici22

Significant Accounting Policies - Intangible Assets (Details Narrative) - USD ($)	6 Months Ended
	Aug. 31, 2015	Feb. 28, 2015
Accumulated amortization of intangible assets	$ 122,111	$ 116,804
Annual Amortization Expense of Intangible Assets For the Next Five Years
Annual amortization expense this year	9,000
Annual amortization expense year two	9,000
Annual amortization expense year three	9,000
Annual amortization expense year four	9,000
Annual amortization expense year five	$ 9,000
Domestic Patents
Useful life of intangible assets	17 years
Foreign Patents
Useful life of intangible assets	12 years

Inventories (Details)

Inventories (Details) - USD ($)	Aug. 31, 2015	Feb. 28, 2015
Inventories Tables
Finished goods	$ 607,061	$ 441,026
Work in process	400,682	220,577
Raw materials	1,574,144	1,692,202
Total	2,581,887	2,353,805
Less: Allowance	147,272	294,628
Net inventories	$ 2,434,615	$ 2,059,177

Stock Options and Warrants (Det

Stock Options and Warrants (Details Narrative) - shares	6 Months Ended
	Aug. 31, 2015	Aug. 30, 2015
2013 Stock Incentive Plan
Stock options shares available for purchase		2,500,000
Stock options outstanding		254,100
Years until options expire	10 years
2003 Stock Incentive Plan
Stock options shares available for purchase		1,500,000
Stock options outstanding		240,500
Additional stock options to be granted	0

Stock Based Compensation (Detai

Stock Based Compensation (Details Narrative) - USD ($)	6 Months Ended
	Aug. 31, 2015	Aug. 31, 2014
Notes to Financial Statements
Additional stock-based compensation expense as a result of applying ASC 718	$ 22,085	$ 23,348

Earnings Per Share (Details)

Earnings Per Share (Details) - $ / shares	3 Months Ended		6 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2015	Aug. 31, 2014
Earnings Per Share Tables
Denominator for basic earnings per share	14,944,124	14,713,788	14,938,615	14,711,770
Dilutive effect of stock options	101,942	163,031	94,973	147,999
Denominator for diluted earnings per share	15,046,066	14,876,819	15,033,588	14,859,769
Basic Earnings Per Share	$ 0.01	$ 0.01	$ 0.02	$ 0.01
Diluted Earnings Per Share	$ 0.01	$ 0.01	$ 0.02	$ 0.01

Long Term Debt (Details)

Long Term Debt (Details) - USD ($)	Aug. 31, 2015	Feb. 28, 2015
Long-term debt	$ 1,389,035	$ 1,477,921
Due within one year	137,642	158,184
Due after one year	1,251,393	1,319,737
Note payable, bank, collateralized by land and buildings, payable in monthly installments of principal and interest of $16,358 through January 2024. Interest rate 4.15%. 10 year term.
Long-term debt	$ 1,389,035	1,457,379
Equipment loan, bank, collateralized by related production equipment, payable in monthly installments of principal and interest of $5,158 through June 2015. Interest rate 2.12%. 48 month term.
Long-term debt		$ 20,542

Revolving Line of Credit (Detai

Revolving Line of Credit (Details Narrative) - Revolving Line of Credit	6 Months Ended
	Aug. 31, 2015USD ($)
Line of credit description	The Company has a $750,000 revolving line of credit at prime which was 3.25% at August 31, 2015. The line of credit is collateralized by all of the assets of the Company, except for the land and buildings. The line of credit is payable on demand and must be retired for a 30 day period once annually. If the Company fails to perform the 30 day annual pay down or if the bank elects to terminate the credit line, the bank may at its option convert the outstanding balance to a 36 month term note with payments including interest in 36 equal installments.
Outstanding balance	$ 0
Unused credit line	$ 750,000

Segment Information (Details)

Segment Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2015	Aug. 31, 2014	Feb. 28, 2015
Net Sales	$ 2,974,673	$ 2,633,727	$ 5,857,570	$ 5,054,426
Rental Expense	38,787	42,414	78,332	81,574
Interest Expense	14,851	16,275	30,064	32,310
Net Income	143,590	115,024	297,612	181,667
Assets	10,616,937		10,616,937		$ 10,590,650
Debt	1,389,035		1,389,035		$ 1,477,921
Ultrasonic Spraying
Net Sales	2,952,223	2,609,427	5,810,820	5,011,376
Rental Expense	$ 49,074	49,074	98,149	98,149
Interest Expense		472	75	833
Net Income	$ 110,853	100,339	261,110	154,352
Assets	$ 8,132,679	7,472,177	$ 8,132,679	7,472,177
Debt		51,073		51,073
Rental Real Estate Operations
Net Sales	$ 71,524	73,374	$ 144,899	141,199
Rental Expense	38,787	42,414	78,332	81,574
Interest Expense	14,851	15,803	29,989	31,477
Net Income	32,737	14,685	36,502	27,315
Assets	2,484,258	2,475,802	2,484,258	2,475,802
Debt	1,389,035	1,523,793	1,389,035	1,523,793
Eliminations
Net Sales	49,074	49,074	98,149	98,149
Rental Expense	(49,074)	(49,074)	(98,149)	(98,149)
Consolidated
Net Sales	2,974,673	2,633,727	5,857,570	5,054,426
Rental Expense	38,787	42,414	78,332	81,574
Interest Expense	14,851	16,275	30,064	32,310
Net Income	143,590	115,024	297,612	181,667
Assets	10,616,937	9,947,979	10,616,937	9,947,979
Debt	$ 1,389,035	$ 1,574,866	$ 1,389,035	$ 1,574,866