Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Feb. 28, 2021 | May 18, 2021 | Aug. 31, 2020 | |
Document And Entity Information | |||
Entity Registrant Name | SONO TEK CORP | ||
Entity Central Index Key | 0000806172 | ||
Document Type | 10-K | ||
Document Period End Date | Feb. 28, 2021 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --02-28 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 55,312,174 | ||
Entity Common Stock, Shares Outstanding | 15,502,558 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Interactive Data Current | Yes | ||
State of Incorporation | NY | ||
File Number | 000-16035 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Feb. 28, 2021 | Feb. 29, 2020 |
Current Assets: | ||
Cash and cash equivalents | $ 4,084,078 | $ 3,659,551 |
Marketable Securities | 4,563,470 | 4,219,240 |
Accounts receivable (less allowance of $56,123 and $71,000, respectively) | 1,757,802 | 929,701 |
Inventories, net | 2,611,106 | 2,381,891 |
Prepaid expenses and other current assets | 151,316 | 153,698 |
Total current assets | 13,167,772 | 11,344,081 |
Land | 250,000 | 250,000 |
Buildings, net | 1,575,135 | 1,654,061 |
Equipment, furnishings and leasehold improvements, net | 1,075,190 | 1,212,578 |
Intangible assets, net | 95,456 | 106,291 |
Deferred tax asset | 259,838 | 176,314 |
TOTAL ASSETS | 16,423,391 | 14,743,325 |
Current Liabilities: | ||
Accounts payable | 1,294,483 | 668,721 |
Accrued expenses | 1,750,916 | 1,613,409 |
Customer deposits | 1,166,541 | 1,648,690 |
Current maturities of long term debt | 169,716 | |
Income taxes payable | 53,567 | 70,621 |
Total current liabilities | 4,265,507 | 4,171,157 |
Deferred tax liability | 205,562 | 251,761 |
Long term debt, less current maturities | 1,001,640 | 538,000 |
Total liabilities | 5,472,709 | 4,960,918 |
Stockholders' Equity | ||
Common stock | 154,527 | 153,482 |
Additional paid-in capital | 9,064,994 | 9,018,406 |
Accumulated earnings | 1,731,161 | 610,519 |
Total stockholders' equity | 10,950,682 | 9,782,407 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 16,423,391 | $ 14,743,325 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Feb. 28, 2021 | Feb. 29, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 56,123 | $ 71,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, authorized | 25,000,000 | 25,000,000 |
Common stock, issued shares | 15,452,656 | 15,348,180 |
Common stock, outstanding shares | 15,452,656 | 15,348,180 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income - USD ($) | 12 Months Ended | |
Feb. 28, 2021 | Feb. 29, 2020 | |
Income Statement [Abstract] | ||
Net Sales | $ 14,832,877 | $ 15,354,619 |
Cost of Goods Sold | 7,835,837 | 8,041,378 |
Gross Profit | 6,997,040 | 7,313,241 |
Operating Expenses | ||
Research and product development | 1,644,598 | 1,427,543 |
Marketing and selling | 2,789,880 | 3,403,133 |
General and administrative | 1,222,101 | 1,367,073 |
Total Operating Expenses | 5,656,579 | 6,197,749 |
Operating Income (Loss) | 1,340,461 | 1,115,492 |
Other Income (Expense): | ||
Interest Expense | (39,843) | (33,038) |
Interest and Dividend Income | 22,558 | 101,592 |
Other Income | 24,691 | 29,401 |
Income Before Income Taxes | 1,347,867 | 1,213,447 |
Income Tax Expense | 227,225 | 106,005 |
Net Income | $ 1,120,642 | $ 1,107,442 |
Basic Earnings Per Share | $ 0.07 | $ 0.07 |
Diluted Earnings Per Share | $ 0.07 | $ 0.07 |
Weighted Average Shares - Basic | 15,428,411 | 15,302,367 |
Weighted Average Shares - Diluted | 15,672,253 | 15,359,088 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated (Deficit) Earnings | Total |
Beginning balance (shares) at Feb. 28, 2019 | 15,197,563 | |||
Beginning balance at Feb. 28, 2019 | $ 151,976 | $ 8,929,607 | $ (496,923) | $ 8,584,660 |
Stock based compensation expense | 90,305 | 90,305 | ||
Exercise of stock options (shares) | 150,617 | |||
Exercise of stock options | $ 1,506 | (1,506) | ||
Net Income | 1,107,442 | 1,107,442 | ||
Ending balance (shares) at Feb. 29, 2020 | 15,348,180 | |||
Ending balance at Feb. 29, 2020 | $ 153,482 | 9,018,406 | 610,519 | 9,782,407 |
Stock based compensation expense | 47,633 | 47,633 | ||
Exercise of stock options (shares) | 104,476 | |||
Exercise of stock options | $ 1,045 | (1,045) | ||
Net Income | 1,120,642 | 1,120,642 | ||
Ending balance (shares) at Feb. 28, 2021 | 15,452,656 | |||
Ending balance at Feb. 28, 2021 | $ 154,527 | $ 9,064,994 | $ 1,731,161 | $ 10,950,682 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Feb. 28, 2021 | Feb. 29, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Income | $ 1,120,642 | $ 1,107,442 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 463,076 | 406,731 |
Stock based compensation expense | 47,633 | 90,305 |
Bad debt expense | 25,000 | |
Inventory reserve | 91,000 | (77,098) |
Deferred tax expense | (129,723) | 36,707 |
(Increase) Decrease in: | ||
Accounts receivable | (828,100) | 443,190 |
Inventories | (305,790) | (646,777) |
Prepaid expenses and other assets | 2,382 | 241,307 |
(Decrease) Increase in: | ||
Accounts payable and accrued expenses | 763,269 | 1,063,730 |
Customer deposits | (482,149) | 499,132 |
Income taxes payable | (17,054) | 64,349 |
Net Cash Provided by Operating Activities | 725,186 | 3,254,018 |
CASH FLOW FROM INVESTING ACTIVITIES: | ||
Purchase of equipment, furnishings and leasehold improvements | (344,353) | (722,241) |
Patent costs paid | (6,000) | |
Capital expenditure grant proceeds | 100,000 | |
Purchase of marketable securities | (344,230) | (1,853,534) |
Net Cash (Used In) Investing Activities | (594,583) | (2,575,775) |
CASH FLOW FROM FINANCING ACTIVITIES: | ||
Proceeds from note payable - bank | 1,001,640 | |
Repayment of long term debt | (707,716) | (162,815) |
Net Cash Provided By (Used In) Financing Activities | 293,924 | (162,815) |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 424,527 | 515,428 |
CASH AND CASH EQUIVALENTS | ||
Beginning of year | 3,659,551 | 3,144,123 |
End of year | 4,084,078 | 3,659,551 |
SUPPLEMENTAL CASH FLOW DISCLOSURE: | ||
Interest paid | 39,843 | 33,038 |
Income Taxes Paid | $ 374,004 | $ 4,948 |
Business Description
Business Description | 12 Months Ended |
Feb. 28, 2021 | |
Accounting Policies [Abstract] | |
Business Description | NOTE 1: BUSINESS DESCRIPTION Sono-Tek Corporation (the “Company”, “Sono-Tek”, “We” or “Our”) was incorporated in New York on March 21, 1975. We are the world leader in the design and manufacture of ultrasonic coating systems for applying precise, thin film coatings to protect, strengthen or smooth surfaces on parts and components for the microelectronics/electronics, alternative energy, medical, industrial and emerging research & development/other markets. We design and manufacture custom-engineered ultrasonic coating systems and also provide patented nozzles and generators for manufacturers’ equipment. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Feb. 28, 2021 | |
Notes to Financial Statements | |
Significant Accounting Policies | NOTE 2: SIGNIFICANT ACCOUNTING POLICIES Advertising Expenses - Accounts Receivable, net- Cash and Cash Equivalents - Consolidation Earnings Per Share - Equipment, Furnishings and Leasehold Improvements Fair Value of Financial Instruments - Fair Value Measurement The carrying amounts of financial instruments reported in the accompanying consolidated financial statements for current assets and current liabilities approximate the fair value because of the immediate or short-term maturities of the financial instruments. The valuation hierarchy is composed of three levels. The classification within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The levels within the valuation hierarchy are described below: Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. The fair values of financial assets of the Company were determined using the following categories at February 28, 2021 and February 29, 2020, respectively: Level 1 Level 2 Level 3 Total Marketable Securities – February 28, 2021 $ 4,261,927 $ 301,543 $ — $ 4,563,470 Marketable Securities – February 29, 2020 $ 3,565,629 $ 653,611 $ — $ 4,219,240 Marketable Securities include certificates of deposit and US Treasury securities, totaling $4,563,470 and $4,219,240 that are considered to be highly liquid and easily tradeable as of February 28, 2021 and February 29, 2020, respectively. US Treasury securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 and certificates of deposit are classified as Level 2 within the Company’s fair value hierarchy. The Company’s marketable securities are considered to be trading securities as defined under ASC 320 “Investments – Debt and Equity Securities.” Grant Proceeds – The Company has concluded that this grant is not within the scope of ASC 606, as it does not meet the definition of a contract with a “customer”. The Company has further concluded that Subtopic 958-605, Not-for-Profit-Entities-Revenue Recognition also does not apply, as the Company is a business entity and the grant is from a public utility. Grants and related receivables are recognized when there is reasonable assurance that the grant will be received, and all attaching conditions will be complied with. The Company has applied the grant proceeds against the cost of the capitalized improvements applicable to the grant, reducing the carrying value and the related depreciation expense going forward. Income Taxes Intangible Assets - Inventories - Land and Buildings – Long-Lived Assets - Management Estimates - New Accounting Pronouncements Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes In June 2016, the FASB issued ASU 2016-13 - Financial Instruments-Credit Losses-Measurement of Credit Losses on Financial Instruments. Codification Improvements to Topic 326, Financial Instruments – Credit Losses, have been released in November 2018 (2018-19), November 2019 (2019-10 and 2019-11) and a January 2020 Update (2020-02) that provided additional guidance on this Topic. This guidance replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For SEC filers meeting certain criteria, the amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. For SEC filers that meet the criteria of a smaller reporting company (including this Company) and for non-SEC registrant public companies and other organizations, the amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early adoption will be permitted for all organizations for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is currently in the process of its analysis of the impact of this guidance on its consolidated financial statements and does not expect the adoption of this guidance to have a material impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (ASC 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 removes certain disclosures, modifies certain disclosures and adds additional disclosures. The ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2019. Early adoption is permitted. The Company adopted the new standard on March 1, 2020, and the adoption did not have a material impact on its consolidated financial statements. Other than Accounting Standards Update (“ASU”) 2019-12, ASU 2016-13 and ASU 2018-13 discussed above, all new accounting pronouncements issued but not yet effective have been deemed to be not applicable to the Company. Hence, the adoption of these new accounting pronouncements, once effective, is not expected to have an impact on the Company. Product Warranty Reclassifications – Research and Product Development Expenses - Revenue Recognition - The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, the core principle of which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. Shipping and Handling Costs – Stock-Based Compensation Uncertainties - |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Feb. 28, 2021 | |
Notes to Financial Statements | |
Revenue Recognition | NOTE 3: REVENUE RECOGNITION A majority of the Company’s sales revenue is derived primarily from short term contracts with customers, which, on average, are in effect for less than twelve months. Sales revenue from manufactured equipment transferred at a single point in time accounts for a majority of the Company’s revenue. Sales revenue is recognized when control of the Company’s manufactured equipment is transferred to its customers in an amount that reflects the consideration the Company expects to receive based upon the agreed transaction price. The Company’s performance obligations are satisfied when its customers take control of the purchased equipment, which is based on the contract terms. Based on prior experience, the Company reasonably estimates its sales returns and warranty reserves. Sales are presented net of discounts and allowances. Discounts and allowances are determined when a sale is negotiated. The Company does not grant its customers or independent representatives the ability to return equipment nor does it grant price adjustments after a sale is complete. The Company does not capitalize any sales commission costs related to the acquisition of a contract. All commissions related to a performance obligation that are satisfied at a point in time are expensed when the customer takes control of the purchased equipment. The Company applies the practical expedient in paragraph ASC 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one-year or less. They apply the transition practical expedient in paragraph ASC 606-10-65-1(f)(3) and does not disclose the amount of the transaction price allocated to the remaining performance obligations and an explanation of when we expect to recognize that amount as revenue. At February 28, 2021, the Company had received $1,167,000 in cash deposits, and had issued Letters of Credit in the amount of $849,000 to secure these cash deposits. At February 28, 2021, the Company was utilizing $849,000 of its available credit line to collateralize these letters of credit. At February 29, 2020, the Company had received $1,649,000 in cash deposits for customer orders. During the year ended February 28, 2021 the Company recognized $1,567,000 of these deposits as revenue. At February 28, 2019, the Company had received $1,150,000 in cash deposits for customer orders. During the year ended February 29, 2020 the Company recognized $1,108,000 of these deposits as revenue. The Company’s sales revenue, by product line is as follows: Twelve Months Ended February 28, February 29, 2021 % of total 2020 % of total Fluxing Systems $ 798,000 5% $ 906,000 6% Integrated Coating Systems 4,219,000 28% 3,599,000 23% Multi-Axis Coating Systems 5,614,000 38% 6,866,000 45% OEM Systems 1,582,000 11% 1,384,000 9% Other 2,620,000 18% 2,600,000 17% TOTAL $ 14,833,000 $ 15,355,000 |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Feb. 28, 2021 | |
Notes to Financial Statements | |
Stock Based Compensation | NOTE 4: STOCK-BASED COMPENSATION Stock Options Under the 2003 Stock Incentive Plan, as amended (the "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 February 28, 2021, there were 47,500 options outstanding under the 2003 Plan, under which no additional options may be granted. Under the 2013 Stock Incentive Plan, option prices must be at least 100% of the fair market value of the common stock at time of grant. For qualified employees, except under certain circumstances specified in the plan or unless otherwise specified at the discretion of the Board of Directors, no option may be exercised prior to one year after date of grant, with the balance becoming exercisable in cumulative installments over a three-year period during the term of the option, and terminating at a stipulated period of time after an employee's termination of employment. During fiscal 2021, the Company granted options to acquire 60,500 shares to employees exercisable at prices ranging from $3.70 to $4.45 and options to acquire 20,000 shares to the non-employee members of the board of directors with an exercise price of $3.70. The options granted to employees and directors vest over three years and expire in ten years. The options granted by the Company during fiscal 2021 had a combined weighted average grant date fair value of $2.20 per share. During fiscal 2020, the Company granted options to acquire 17,500 shares to employees exercisable at prices ranging from $2.10 to $2.65, options to acquire 20,000 shares to the non-employee members of the board of directors with an exercise price of $2.65 and options for 200,000 shares to an officer and director exercisable at prices of ranging from $2.45 to $2.65. The options granted to employees and directors vest over three years and expire in ten years. The options granted to the officer vested upon grant and expire in ten years. The options granted by the Company during fiscal 2020 had a combined weighted average grant date fair value of $0.34 per share. A summary of the activity of both plans for fiscal 2021 and fiscal 2020 is as follows: Weighted Average Stock Options Exercise Price $ Remaining Outstanding Exercisable Outstanding Exercisable Term - Years Balance - February 28, 2019 588,000 171,000 $ 1.10 $ 0.85 4.70 Granted 237,500 2.55 Exercised (231,333 ) (0.88 ) Cancelled (2,500 ) (1.17 ) Balance - February 29, 2020 591,667 339,250 $ 1.77 $ 2.03 7.59 Granted 80,500 $ 4.05 Exercised (161,208 ) (1.05 ) Cancelled (2,500 ) (2.55 ) Balance - February 28, 2021 508,459 333,500 $ 2.35 $ 2.17 6.99 The aggregate intrinsic value of the Company’s vested and exercisable options at February 28, 2021 was $692,490 . For the years ended February 28, 2021 and February 29, 2020, the Company recognized $47,633 and $90,305 in stock based compensation expense for the years then ended, respectively. Such amounts are included in general and administrative expenses on the statement of operations. Total compensation expense related to non-vested options not yet recognized as of February 28, 2021 was $185,000 and will be recognized on a straight-line basis through January 2024. The amount of future stock option compensation expense could be affected by any future option grants or by any forfeitures. During the year ended February 28, 2021, the Company had net settlement exercises of stock options, whereby, the optionee did not pay cash for the options but instead received the number of shares equal to the difference between the exercise price and the market price on the date of exercise. Net settlement exercises during the year ended February 28, 2021 resulted in 104,476 shares issued and 56,732 options cancelled in the settlement of shares issued. Determining the appropriate fair value of the stock-based awards requires the input of subjective assumptions, including the fair value of the Company’s common stock, and for stock options, the expected life of the option, and the expected stock price volatility. The Company uses the Black-Scholes option pricing model to value its stock option awards. The assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and management uses different assumptions, stock-based compensation expense could be materially different for future awards. The expected term of the options is estimated based on the Company’s historical exercise rate. The expected life of awards that vest immediately use the contractual maturity since they are vested when issued. For stock price volatility, the Company uses its expected volatility of the price of the Company’s common stock based on historical activity. The risk-free interest rate is based on U.S. Treasury notes with a term approximating the expected life of the option at the grant-date. The weighted-average fair value of options has been estimated on the date of grant using the Black-Scholes options-pricing model. The weighted-average Black-Scholes assumptions are as follows: Fiscal Year Ended February 28, February 29, Expected life 5 - 8 years 1 - 8 years Risk free interest rate 0.46% - 0.78% 1.58% - 2.05% Expected volatility 48.88% - 58.63% 27.46% - 32.24% Expected dividend yield 0% 0% For the years ended February 28, 2021 and February 29, 2020, net income and earnings per share reflect the actual deduction for stock-based compensation expense. The impact of applying ASC 718 was $47,633 and $90,305 in additional compensation expense for the years then ended, respectively. Such amount is included in general and administrative expenses on the statement of operations. The expense for stock-based compensation is a non-cash expense item. |
Inventories
Inventories | 12 Months Ended |
Feb. 28, 2021 | |
Notes to Financial Statements | |
Inventories | NOTE 5: INVENTORIES Inventories consist of the following: February 28, February 29, Raw materials and subassemblies $ 1,081,591 $ 967,089 Finished goods 786,785 752,999 Work in process 1,027,010 855,083 Total 2,895,386 2,575,171 Less: Allowance (284,280 ) (193,280 ) Net inventories $ 2,611,106 $ 2,381,891 |
Buildings, Equipment, Furnishin
Buildings, Equipment, Furnishings and Leasehold Improvements | 12 Months Ended |
Feb. 28, 2021 | |
Property, Plant and Equipment [Abstract] | |
Buildings, Equipment, Furnishings and Leasehold Improvements | NOTE 6: BUILDINGS, EQUIPMENT, FURNISHINGS AND LEASEHOLD IMPROVEMENTS Equipment, furnishings and leasehold improvements consist of the following: February 28, February 29, 2021 2020 Buildings $ 2,250,000 $ 2,250,000 Laboratory equipment 1,399,826 1,418,903 Machinery and equipment 1,548,415 1,400,419 Leasehold improvements 642,671 632,021 Tradeshow and demonstration equipment 1,137,346 1,139,693 Furniture and fixtures 1,156,495 1,088,502 Totals 8,134,753 7,929,538 Less: Accumulated depreciation (5,484,428 ) (5,062,899 ) $ 2,650,325 $ 2,866,639 Depreciation expense for the years ended February 28, 2021 and February 29, 2020 was $427,650 and $390,082, respectively. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Feb. 28, 2021 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | NOTE 7: ACCRUED EXPENSES Accrued expenses consist of the following: February 28, February 29, Accrued compensation $ 568,213 $ 585,875 Estimated warranty costs 565,700 339,275 Accrued commissions 127,342 332,745 Professional fees 100,559 74,492 Other accrued expenses 389,102 281,022 $ 1,750,916 $ 1,613,409 |
Revolving Line of Credit
Revolving Line of Credit | 12 Months Ended |
Feb. 28, 2021 | |
Notes to Financial Statements | |
Revolving Line of Credit | NOTE 8: REVOLVING LINE OF CREDIT The Company has a $1,500,000 revolving line of credit which accrues interest at the prime rate which was 3.25% at February 28, 2021 and 4.75% at February 29, 2020. The revolving credit line is collateralized by the Company’s accounts receivable and inventory. The revolving credit line 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 February 28, 2021, $849,000 of the Company’s credit line was being utilized to collateralize letters of credit issued to customers that have remitted cash deposits to the Company on existing orders. The letters of credit expire at various times in the fiscal year ending February 28, 2022. As of February 28, 2021, there were no outstanding borrowings under the line of credit and the unused portion of the credit line was $651,000 as of February 28, 2021. |
Long Term Debt
Long Term Debt | 12 Months Ended |
Feb. 28, 2021 | |
Notes to Financial Statements | |
Long Term Debt | NOTE 9: LONG-TERM DEBT Long-term debt consists of the following: February 28, February 29, Note payable, bank, collateralized by land and buildings, payable in monthly installments of principal and interest of $16,358 through January 2024 with an interest rate of 4.15% and a 10-year term. $ — $ 707,716 Note Payable, bank, unsecured, Paycheck Protection Program funding, initially scheduled to be payable in monthly installments of principal and interest of $56,370 through April 2022. Interest rate 1%. 2-year term. Under the terms of the CARE Act, forgiveness for all or a portion of the loan may be granted based upon use of the loan proceeds for eligible payroll and related payroll costs and other qualified expenses. The Company has applied for forgiveness of this obligation. Under the Paycheck Protection Program Flexibility Act, payments of principal and interest shall be deferred until the date that the Small Business Administration remits the forgiveness amount to the Company’s lender or determines that some or all of the PPP loan is not eligible for forgiveness. If all or a portion of the loan is not forgiven, the unforgiven balance and accrued interest shall be payable during the remainder of the term of the loan. This loan was forgiven in its entirety by the SBA in April 2021. 1,001,640 — Total long-term debt 1,001,640 707,716 Due within one year 169,716 Due after one year $ 1,001,640 $ 538,000 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Feb. 28, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 10: COMMITMENTS AND CONTINGENCIES Other than the letters of credit discussed in Notes 3 and 8, the Company did not have any material commitments or contingencies as of February 28, 2021. |
Income Taxes
Income Taxes | 12 Months Ended |
Feb. 28, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 11: INCOME TAXES The annual provision (benefit) for income taxes differs from amounts computed by applying the maximum U.S. Federal income tax rate of 21% to pre-tax income as follows: February 28, February 29, Expected federal income tax $ 283,052 $ 254,898 State tax, net of federal 27,102 19,758 Research and development tax credits (105,320 ) (213,521 ) Permanent differences 12,719 29,632 Other 9,672 15,238 Income tax expense $ 227,225 $ 106,005 In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and projections for future taxable income over periods in which the deferred tax assets are deductible. Management believes it is more likely than not that the Company will realize the benefits of these deductible differences. Management does not believe that there are significant uncertain tax positions in 2021. There are no interest and penalties related to uncertain tax positions in 2021 The deferred tax asset and liability are comprised of the following: February 28, February 29, Deferred tax asset Inventory $ 66,000 $ 41,000 Allowance for accounts receivable 13,000 15,000 Accrued expenses and other 181,000 94,000 Research tax credits — 27,000 Deferred tax asset – Long Term $ 260,000 $ 177,000 Deferred tax liability Building and leasehold depreciation (206,000 ) (252,000 ) Deferred tax liability – Long Term $ (206,000 ) $ (252,000 ) |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Feb. 28, 2021 | |
Notes to Financial Statements | |
Earnings Per Share | NOTE 13: EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share: February 28, February 29, Numerator for basic and diluted earnings per share $ 1,120,642 $ 1,107,442 Denominator for basic earnings per share - weighted average 15,428,411 15,302,367 Effects of dilutive securities: Stock options for employees, directors and outside consultants 243,842 56,721 Denominator for diluted earnings per share 15,672,253 15,359,088 Basic Earnings Per Share – Weighted Average $ 0.07 $ 0.07 Diluted Earnings Per Share – Weighted Average $ 0.07 $ 0.07 |
Customer Concentrations and For
Customer Concentrations and Foreign Sales | 12 Months Ended |
Feb. 28, 2021 | |
Segment Reporting [Abstract] | |
Customer Concentrations and Foreign Sales | NOTE 14: CUSTOMER CONCENTRATIONS AND FOREIGN SALES Export sales to customers located outside the United States and Canada were approximately as follows: February 28, February 29, Asia Pacific (APAC) 4,171,000 4,817,000 Europe, Middle East, Asia (EMEA) 4,287,000 4,512,000 Latin America 1,220,000 1,520,000 $ 9,678,000 $ 10,849,000 During fiscal 2021 and fiscal 2020, sales to foreign customers accounted for approximately $9,678,000 and $10,849,000, or 65% and 71% respectively, of total revenues. The Company had three customers which accounted for 28% of sales during fiscal 2021. Two customers accounted for 64% of the outstanding accounts receivables at February 28, 2021. The Company had three customers which accounted for 30% of sales during fiscal 2020. Three customers accounted for 67% of the outstanding accounts receivables at February 29, 2020. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Feb. 28, 2021 | |
Notes to Financial Statements | |
Subsequent Events | NOTE 14: SUBSEQUENT EVENTS Paycheck Protection Program Loan During fiscal 2021, the Company entered into a loan transaction pursuant to which the Company received proceeds of $1,001,640 (the “PPP Loan”) under the Paycheck Protection Program (“PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying companies and is administered by the U.S. Small Business Administration (the “SBA”). The PPP Loan was evidenced by a promissory note (the “Note”), between the Company and M&T Bank (the “Bank”). The Note had a two-year term, accrued interest at the rate of 1.0% per annum, and was prepayable at any time without payment of any premium. No payments of principal or interest were due during the six-month period beginning on the date of the Note (the “Deferral Period”). Beginning on the seventh month following the date of the Note, the Company was required to make 18 monthly payments of principal and interest in the amount of $56,370. Under the terms of the CARES Act, PPP loan recipients can apply for and be granted forgiveness for all or a portion of loan granted under the PPP, with such forgiveness to be determined, subject to limitations, based on the use of the loan proceeds for payment of payroll costs and any payments of mortgage interest, rent, and utilities. However, at least 75 percent of the PPP Loan proceeds must be used for eligible payroll costs. The terms of any forgiveness may also be subject to further requirements in any regulations and guidelines the SBA may adopt. The Company applied for forgiveness of the PPP Loan in December 2020. On April 1, 2021, the Company received notice from the Bank that the Bank had received confirmation from the SBA that the application for forgiveness of the PPP Loan had been approved. The loan forgiveness request in the amount of $1,001,640 was applied to the Company’s entire outstanding PPP Loan balance with the Bank. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Feb. 28, 2021 | |
Notes to Financial Statements | |
Advertising Expenses | Advertising Expenses - |
Allowance for doubtful accounts | Accounts Receivable, net- |
Cash and Cash Equivalents | Cash and Cash Equivalents - |
Consolidation | Consolidation |
Earnings Per Share | Earnings Per Share - |
Equipment, Furnishings and Leasehold Improvements | Equipment, Furnishings and Leasehold Improvements |
Fair Value of Financial Instruments | Fair Value of Financial Instruments - Fair Value Measurement The carrying amounts of financial instruments reported in the accompanying consolidated financial statements for current assets and current liabilities approximate the fair value because of the immediate or short-term maturities of the financial instruments. The valuation hierarchy is composed of three levels. The classification within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The levels within the valuation hierarchy are described below: Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. The fair values of financial assets of the Company were determined using the following categories at February 28, 2021 and February 29, 2020, respectively: Level 1 Level 2 Level 3 Total Marketable Securities – February 28, 2021 $ 4,261,927 $ 301,543 $ — $ 4,563,470 Marketable Securities – February 29, 2020 $ 3,565,629 $ 653,611 $ — $ 4,219,240 Marketable Securities include certificates of deposit and US Treasury securities, totaling $4,563,469 and $4,219,240 that are considered to be highly liquid and easily tradeable as of February 28, 2021 and February 29, 2020, respectively. US Treasury securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 and certificates of deposit are classified as Level 2 within the Company’s fair value hierarchy. The Company’s marketable securities are considered to be trading securities as defined under ASC 320 “Investments – Debt and Equity Securities.” |
Grant Proceeds | Grant Proceeds – The Company has concluded that this grant is not within the scope of ASC 606, as it does not meet the definition of a contract with a “customer”. The Company has further concluded that Subtopic 958-605, Not-for-Profit-Entities-Revenue Recognition also does not apply, as the Company is a business entity and the grant is from a public utility. Grants and related receivables are recognized when there is reasonable assurance that the grant will be received, and all attaching conditions will be complied with. The Company has applied the grant proceeds against the cost of the capitalized improvements applicable to the grant, reducing the carrying value and the related depreciation expense going forward. |
Income Taxes | Income Taxes |
Intangible Assets | Intangible Assets - |
Inventories | Inventories - |
Land and Buildings | Land and Buildings – |
Long-Lived Assets | Long-Lived Assets - |
Management Estimates | Management Estimates - |
New Accounting Pronouncements | New Accounting Pronouncements Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes In June 2016, the FASB issued ASU 2016-13 - Financial Instruments-Credit Losses-Measurement of Credit Losses on Financial Instruments. Codification Improvements to Topic 326, Financial Instruments – Credit Losses, have been released in November 2018 (2018-19), November 2019 (2019-10 and 2019-11) and a January 2020 Update (2020-02) that provided additional guidance on this Topic. This guidance replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For SEC filers meeting certain criteria, the amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. For SEC filers that meet the criteria of a smaller reporting company (including this Company) and for non-SEC registrant public companies and other organizations, the amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early adoption will be permitted for all organizations for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is currently in the process of its analysis of the impact of this guidance on its consolidated financial statements and does not expect the adoption of this guidance to have a material impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (ASC 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 removes certain disclosures, modifies certain disclosures and adds additional disclosures. The ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2019. Early adoption is permitted. The Company adopted the new standard on March 1, 2020, and the adoption did not have a material impact on its consolidated financial statements. Other than Accounting Standards Update (“ASU”) 2019-12, ASU 2016-13 and ASU 2018-13 discussed above, all new accounting pronouncements issued but not yet effective have been deemed to be not applicable to the Company. Hence, the adoption of these new accounting pronouncements, once effective, is not expected to have an impact on the Company. |
Product Warranty | Product Warranty |
Reclassifications | Reclassifications – |
Research and Product Development Expenses | Research and Product Development Expenses - |
Revenue Recognition | Revenue Recognition - The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, the core principle of which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. |
Shipping and Handling Costs | Shipping and Handling Costs – |
Stock-Based Compensation | Stock-Based Compensation |
Uncertainties | Uncertainties - |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Feb. 28, 2021 | |
Notes to Financial Statements | |
Fair values of financial assets of the Company | Level 1 Level 2 Level 3 Total Marketable Securities – February 28, 2021 $ 4,261,927 $ 301,543 $ — $ 4,563,470 Marketable Securities – February 29, 2020 $ 3,565,629 $ 653,611 $ — $ 4,219,240 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Feb. 28, 2021 | |
Revenue Recognition Tables Abstract | |
Sales revenue by product line | Twelve Months Ended February 28, February 29, 2021 % of total 2020 % of total Fluxing Systems $ 798,000 5% $ 906,000 6% Integrated Coating Systems 4,219,000 28% 3,599,000 23% Multi-Axis Coating Systems 5,614,000 38% 6,866,000 45% OEM Systems 1,582,000 11% 1,384,000 9% Other 2,620,000 18% 2,600,000 17% TOTAL $ 14,833,000 $ 15,355,000 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Feb. 28, 2021 | |
Notes to Financial Statements | |
Summary of stock options | Weighted Average Stock Options Exercise Price $ Remaining Outstanding Exercisable Outstanding Exercisable Term Balance - February 28, 2019 588,000 171,000 $ 1.10 $ 0.85 Granted 237,500 2.55 Exercised (231,333 ) (0.88 ) Cancelled (2,500 ) (1.17 ) Balance - February 29, 2020 591,667 339,250 $ 1.77 $ 2.03 Granted 80,500 $ 4.05 Exercised (161,208 ) (1.05 ) Cancelled (2,500 ) (2.55 ) Balance - February 28, 2021 508,459 333,500 $ 2.35 $ 2.17 6 Years |
Weighted-average Black-Scholes assumptions | Fiscal Year Ended February 28, February 29, Expected life 5 - 8 years 1 - 8 years Risk free interest rate 0.46% - 0.78% 1.58% - 2.05% Expected volatility 48.88% - 58.63% 27.46% - 32.24% Expected dividend yield 0% 0% |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Feb. 28, 2021 | |
Inventories Tables Abstract | |
Inventories | February 28, February 29, Raw materials and subassemblies $ 1,081,591 $ 967,089 Finished goods 786,785 752,999 Work in process 1,027,010 855,083 Total 2,895,386 2,575,171 Less: Allowance (284,280 ) (193,280 ) Net inventories $ 2,611,106 $ 2,381,891 |
Buildings, Equipment, Furnish_2
Buildings, Equipment, Furnishings and Leasehold Improvements (Tables) | 12 Months Ended |
Feb. 28, 2021 | |
Property, Plant and Equipment [Abstract] | |
Equipment, furnishings and leasehold improvements | February 28, February 29, 2021 2020 Buildings $ 2,250,000 $ 2,250,000 Laboratory equipment 1,399,826 1,418,903 Machinery and equipment 1,548,415 1,400,419 Leasehold improvements 642,671 632,021 Tradeshow and demonstration equipment 1,137,346 1,139,693 Furniture and fixtures 1,156,495 1,088,502 Totals 8,134,753 7,929,538 Less: Accumulated depreciation (5,484,428 ) (5,062,899 ) $ 2,650,325 $ 2,866,639 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Feb. 28, 2021 | |
Payables and Accruals [Abstract] | |
Accrued expenses | February 28, February 29, Accrued compensation $ 568,213 $ 585,875 Estimated warranty costs 565,700 339,275 Accrued commissions 127,342 332,745 Professional fees 100,559 74,492 Other accrued expenses 389,102 281,022 $ 1,750,916 $ 1,613,409 |
Long Term Debt (Tables)
Long Term Debt (Tables) | 12 Months Ended |
Feb. 28, 2021 | |
Long Term Debt Tables Abstract | |
Long-term debt | February 28, February 29, Note payable, bank, collateralized by land and buildings, payable in monthly installments of principal and interest of $16,358 through January 2024 with an interest rate of 4.15% and a 10-year term. $ — $ 707,716 Note Payable, bank, unsecured, Paycheck Protection Program funding, initially scheduled to be payable in monthly installments of principal and interest of $56,370 through April 2022. Interest rate 1%. 2-year term. Under the terms of the CARE Act, forgiveness for all or a portion of the loan may be granted based upon use of the loan proceeds for eligible payroll and related payroll costs and other qualified expenses. The Company has applied for forgiveness of this obligation. Under the Paycheck Protection Program Flexibility Act, payments of principal and interest shall be deferred until the date that the Small Business Administration remits the forgiveness amount to the Company’s lender or determines that some or all of the PPP loan is not eligible for forgiveness. If all or a portion of the loan is not forgiven, the unforgiven balance and accrued interest shall be payable during the remainder of the term of the loan. This loan was forgiven in its entirety by the SBA in April 2021. 1,001,640 — Total long-term debt 1,001,640 707,716 Due within one year 169,716 Due after one year $ 1,001,640 $ 538,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Feb. 28, 2021 | |
Income Tax Disclosure [Abstract] | |
Income tax reconciliation | February 28, February 29, Expected federal income tax $ 283,052 $ 254,898 State tax, net of federal 27,102 19,758 Research and development tax credits (105,320 ) (213,521 ) Permanent timing difference 12,719 29,632 Change in valuation allowances 9,672 15,238 Income tax expense $ 227,225 $ 106,005 |
Deferred tax asset and liability components | February 28, February 29, Deferred tax asset Inventory $ 66,000 $ 41,000 Allowance for accounts receivable 13,000 15,000 Accrued expenses and other 181,000 94,000 Research tax credits — 27,000 Deferred tax asset – Long Term $ 260,000 $ 177,000 Deferred tax liability Building and leasehold depreciation (206,000 ) (252,000 ) Deferred tax liability – Long Term $ (206,000 ) $ (252,000 ) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Feb. 28, 2021 | |
Earnings Per Share - Denominator For Calculation Of Diluted Earnings Per Share | |
Computation of basic and diluted earnings per share | February 28, February 29, Numerator for basic and diluted earnings per share $ 1,120,642 $ 1,107,442 Denominator for basic earnings per share - weighted average 15,428,411 15,302,367 Effects of dilutive securities: Stock options for employees, directors and outside consultants 243,842 56,721 Denominator for diluted earnings per share 15,672,253 15,359,088 Basic Earnings Per Share – Weighted Average $ 0.07 $ 0.07 Diluted Earnings Per Share – Weighted Average $ 0.07 $ 0.07 |
Customer Concentrations and F_2
Customer Concentrations and Foreign Sales (Tables) | 12 Months Ended |
Feb. 28, 2021 | |
Segment Reporting [Abstract] | |
Export sales to customers located outside the United States | February 28, February 29, Asia Pacific (APAC) 4,171,000 4,817,000 Europe, Middle East, Asia (EMEA) 4,287,000 4,512,000 Latin America 1,220,000 1,520,000 $ 9,678,000 $ 10,849,000 |
Significant Accounting Polici_4
Significant Accounting Policies - Fair values of financial assets of the Company (Details) - USD ($) | Feb. 28, 2021 | Feb. 29, 2020 |
Marketable Securities | $ 4,563,470 | $ 4,219,240 |
Quoted Prices in Active Markets (Level 1) | ||
Marketable Securities | 4,261,927 | 3,565,629 |
Fair Value Inputs (Level 2) | ||
Marketable Securities | 301,543 | 653,611 |
Fair Value Inputs (Level 3) | ||
Marketable Securities |
Significant Accounting Polici_5
Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2021 | Feb. 29, 2020 | |
Advertising expense | $ 78,206 | $ 297,297 |
Concentration of Credit Risk | 71.00% | |
Marketable securities including mutual funds | 4,563,470 | $ 4,219,240 |
Grant receivable | 100,000 | |
Energy efficiency related improvements | 580,000 | |
Capital expenditure grant proceeds | 100,000 | |
Accumulated amortization of patents | 181,922 | $ 171,210 |
Annual Amortization Expense of Intangible Assets For the Next Five Years | ||
Annual amortization expense this year | 11,000 | |
Annual amortization expense year two | 11,000 | |
Annual amortization expense year three | 11,000 | |
Annual amortization expense year four | 11,000 | |
Annual amortization expense year five | $ 11,000 | |
Domestic Patents | ||
Useful life of intangible assets | 17 years | |
Foreign Patents | ||
Useful life of intangible assets | 12 years | |
Equipment and Furnishings | ||
Annual Amortization Expense of Intangible Assets For the Next Five Years | ||
Property, plant and equipment, estimated useful lives | Three to Five Years | |
Depreciation method used for equipment and furnishings | Straight-Line Method | |
Buildings | ||
Annual Amortization Expense of Intangible Assets For the Next Five Years | ||
Property, plant and equipment, estimated useful lives | 40 Years | |
Depreciation method used for equipment and furnishings | Straight-Line Method | |
Sales | Customer | ||
Concentration of Credit Risk | 28.00% | 30.00% |
Accounts Receivable | Customer | ||
Concentration of Credit Risk | 64.00% | 67.00% |
Revenue Recognition - Sales Rev
Revenue Recognition - Sales Revenue by Product Line (Details) - USD ($) | 12 Months Ended | |
Feb. 28, 2021 | Feb. 29, 2020 | |
Sales revenue | $ 14,832,877 | $ 15,354,619 |
Fluxing Systems | ||
Sales revenue | $ 798,000 | $ 906,000 |
Sales revenue, percent | 5.00% | 6.00% |
Integrated Coating Systems | ||
Sales revenue | $ 4,219,000 | $ 3,599,000 |
Sales revenue, percent | 28.00% | 23.00% |
Multi-Axis Coating Systems | ||
Sales revenue | $ 5,614,000 | $ 6,866,000 |
Sales revenue, percent | 38.00% | 45.00% |
OEM Systems | ||
Sales revenue | $ 1,582,000 | $ 1,384,000 |
Sales revenue, percent | 11.00% | 90.00% |
Other | ||
Sales revenue | $ 2,620,000 | $ 2,600,000 |
Sales revenue, percent | 18.00% | 17.00% |
Revenue Recognition (Details Na
Revenue Recognition (Details Narrative) - USD ($) | 12 Months Ended | ||
Feb. 28, 2021 | Feb. 29, 2020 | Feb. 28, 2019 | |
Proceeds in cash deposits | $ 1,167,000 | $ 1,649,000 | $ 1,150,000 |
Revenue recognized | 1,567,000 | $ 1,108,000 | |
Letter of Credit | |||
Letter of credit | $ 849,000 | ||
Letter of credit, collateral description | The Company was utilizing $849,000 of its available credit line to collateralize these letters of credit. |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Options (Details) - $ / shares | 12 Months Ended | |
Feb. 28, 2021 | Feb. 29, 2020 | |
Shares | ||
Outstanding at beginning of period (in shares) | 591,667 | 588,000 |
Exercisable at beginning of period (in shares) | 339,250 | 171,000 |
Granted (in shares) | 80,500 | 237,500 |
Exercised (in shares) | (161,208) | (231,333) |
Cancelled (in shares) | (2,500) | (2,500) |
Outstanding at end of period (in shares) | 508,459 | 591,667 |
Exercisable at end of period (in shares) | 333,500 | 339,250 |
Weighted Average Exercise Price | ||
Outstanding at beginning of period (in dollars per share) | $ 1.77 | $ 1.10 |
Granted (in dollars per share) | 4.05 | 2.55 |
Exercised (in dollars per share) | (1.05) | (0.88) |
Cancelled (in dollars per share) | (2.55) | (1.17) |
Outstanding at end of period (in dollars per share) | 2.35 | 1.77 |
Exercisable at beginning of period (in dollars per share) | 2.03 | 0.85 |
Exercisable at end of period (in dollars per share) | 2.17 | 2.03 |
Fair value vested at beginning of period (in dollars per share) | 0.35 | 0.34 |
Fair value vested at end of period (in dollars per share) | $ 0.38 | $ 0.35 |
Weighted average remaining term outstanding | 6 years 11 months | 7 years 6 months |
Stock-Based Compensation - Weig
Stock-Based Compensation - Weighted-average Black-Scholes assumptions (Details) | 12 Months Ended | |
Feb. 28, 2021 | Feb. 29, 2020 | |
Risk free interest rate, minimum | 0.46% | 1.58% |
Risk free interest rate, maximum | 0.78% | 2.05% |
Expected volatility, minimum | 48.88% | 27.46% |
Expected volatility, maximum | 58.63% | 32.24% |
Expected dividend yield | 0.00% | 0.00% |
Employee Stock Options | Minimum | ||
Expected life (in years) | 5 years | 1 year |
Employee Stock Options | Maximum | ||
Expected life (in years) | 8 years | 8 years |
Stock Based Compensation (Detai
Stock Based Compensation (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2021 | Feb. 29, 2020 | |
Options granted | 80,500 | 237,500 |
Options, exercisable price | $ 4.05 | $ 2.55 |
Weighted average grant date fair value, per share | $ 2.20 | $ 0.34 |
Additional stock-based compensation expense as a result of applying ASC 718 | $ 47,633 | $ 90,305 |
Compensation expense yet to be recognized | $ 185,000 | |
Period for compensation expense to be recognized | 3 years | |
Options cancelled in settlement of shares issued | 56,732 | |
Aggregate intrinsic value of vested and exercisable options | $ 692,490 | |
Common Stock | ||
Exercise of stock options (shares) | 104,476 | 150,617 |
Employee Stock Options | ||
Options granted | 60,500 | 17,500 |
Options, vesting period | 3 years | |
Options, expiration period | 10 years | |
Employee Stock Options | Minimum | ||
Options, exercisable price | $ 3.70 | $ 2.10 |
Employee Stock Options | Maximum | ||
Options, exercisable price | $ 4.45 | $ 2.65 |
Non-Employee Member of Board of Directors Stock Options | ||
Options granted | 20,000 | 20,000 |
Options, exercisable price | $ 3.70 | $ 2.65 |
Options, vesting period | 3 years | 3 years |
Options, expiration period | 10 years | 10 years |
Officer and Director Stock Options | ||
Options granted | 200,000 | |
Options, vesting period | 0 years | |
Options, expiration period | 10 years | |
Officer and Director Stock Options | Minimum | ||
Options, exercisable price | $ 2.45 | |
Officer and Director Stock Options | Maximum | ||
Options, exercisable price | $ 2.65 | |
2013 Stock Incentive Plan | ||
Stock options shares available for purchase | 2,500,000 | |
Stock options outstanding | 460,959 | |
Description of option prices | Under the 2013 Stock Incentive Plan, option prices must be at least 100% of the fair market value of the common stock at time of grant. For qualified employees, except under certain circumstances specified in the plan or unless otherwise specified at the discretion of the Board of Directors, no option may be exercised prior to one year after date of grant, with the balance becoming exercisable in cumulative installments over a three year period during the term of the option, and terminating at a stipulated period of time after an employee's termination of employment. | |
Options, expiration period | 10 years | |
2003 Stock Incentive Plan | ||
Stock options shares available for purchase | 1,500,000 | |
Stock options outstanding | 47,500 |
Inventories (Details)
Inventories (Details) - USD ($) | Feb. 28, 2021 | Feb. 29, 2020 |
Inventories Tables Abstract | ||
Raw materials | $ 1,081,591 | $ 967,089 |
Finished goods | 786,785 | 752,999 |
Work in process | 1,027,010 | 855,083 |
Total | 2,895,386 | 2,575,171 |
Less: Allowance | (284,280) | (193,280) |
Net inventories | $ 2,611,106 | $ 2,381,891 |
Buildings, Equipment, Furnish_3
Buildings, Equipment, Furnishings and Leasehold Improvements - Equipment, furnishings and leasehold improvements (Details) - USD ($) | 12 Months Ended | |
Feb. 28, 2021 | Feb. 29, 2020 | |
Equipment, furnishings and leasehold improvements | $ 8,134,753 | $ 7,929,538 |
Less: accumulated decpreciation | (5,484,428) | (5,062,899) |
Equipment, furnishings and leasehold improvements, net | 2,650,325 | 2,866,639 |
Depreciation Expense | 427,650 | 390,082 |
Buildings | ||
Equipment, furnishings and leasehold improvements | 2,250,000 | 2,250,000 |
Laboratory Equipment | ||
Equipment, furnishings and leasehold improvements | 1,399,826 | 1,418,903 |
Machinery and Equipment | ||
Equipment, furnishings and leasehold improvements | 1,548,415 | 1,400,419 |
Leasehold improvements | ||
Equipment, furnishings and leasehold improvements | 642,671 | 632,021 |
Tradeshow and Demonstration Equipment | ||
Equipment, furnishings and leasehold improvements | 1,137,346 | 1,139,693 |
Furniture and Fixtures | ||
Equipment, furnishings and leasehold improvements | $ 1,156,495 | $ 1,088,502 |
Accrued expenses (Details)
Accrued expenses (Details) - USD ($) | Feb. 28, 2021 | Feb. 29, 2020 |
Payables and Accruals [Abstract] | ||
Accrued compensation | $ 568,213 | $ 585,875 |
Estimated warranty costs | 565,700 | 339,275 |
Accrued commissions | 127,342 | 332,745 |
Professional fees | 100,559 | 74,492 |
Other accrued expenses | 389,102 | 281,022 |
Total accrued expenses | $ 1,750,916 | $ 1,613,409 |
Revolving Line of Credit (Detai
Revolving Line of Credit (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2021 | Feb. 29, 2020 | |
Letter of Credit | ||
Line of credit description | Credit line was being utilized to collateralize letters of credit issued to customers that have remitted cash deposits to the Company on existing orders. | |
Line of credit | $ 849,000 | |
Line of credit, maturity date | Feb. 28, 2022 | |
Unused credit line | $ 651,000 | |
Revolving Line of Credit | ||
Line of credit description | The revolving credit line is collateralized by the Company's accounts receivable and inventory. The revolving credit line 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. | The revolving credit line is collateralized by the Company's accounts receivable and inventory. The revolving credit line 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. |
Line of credit | $ 1,500,000 | $ 1,500,000 |
Prime rate | 3.25% | 4.75% |
Long-term debt (Details)
Long-term debt (Details) - USD ($) | 12 Months Ended | |
Feb. 28, 2021 | Feb. 29, 2020 | |
Long-term debt | $ 1,001,640 | $ 707,716 |
Due within one year | 169,716 | |
Due after one year | 1,001,640 | 538,000 |
Unsecured Debt | ||
Long-term debt | 1,001,640 | |
Monthly installments | $ 56,370 | |
Interest rate | 1.00% | |
Maturity | Apr. 30, 2022 | |
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 | $ 707,716 |
Income Taxes - Income tax recon
Income Taxes - Income tax reconciliation (Details) - USD ($) | 12 Months Ended | |
Feb. 28, 2021 | Feb. 29, 2020 | |
Income tax (benefit) reconciliation: | ||
Expected federal income tax | $ 283,052 | $ 254,898 |
State tax, net of federal | 27,102 | 19,758 |
Research and development tax credits | (105,320) | (213,521) |
Permanent differences | 12,719 | 29,632 |
Other adjustments | 9,672 | 15,238 |
Income tax expense | $ 227,225 | $ 106,005 |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax asset and liability components (Details) - USD ($) | Feb. 28, 2021 | Feb. 29, 2020 |
Deferred tax asset | ||
Inventory | $ 66,000 | $ 41,000 |
Allowance for accounts receivable | 13,000 | 15,000 |
Accrued expenses and other | 181,000 | 94,000 |
Research tax credits | 27,000 | |
Deferred tax asset - Long Term | 260,000 | 177,000 |
Deferred tax liability | ||
Building and leasehold depreciation | (206,000) | (252,000) |
Deferred tax liability - Long Term | $ (206,000) | $ (252,000) |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 12 Months Ended |
Feb. 28, 2021 | |
Income Tax Disclosure [Abstract] | |
Federal income tax rate | 21.00% |
Earnings Per Share - The denomi
Earnings Per Share - The denominator for the calculation of diluted earnings per share (Details) - USD ($) | 12 Months Ended | |
Feb. 28, 2021 | Feb. 29, 2020 | |
Earnings Per Share - Denominator For Calculation Of Diluted Earnings Per Share | ||
Numerator for basic and diluted earnings per share | $ 1,120,642 | $ 1,107,442 |
Denominator for basic earnings per share - weighted average | 15,428,411 | 15,302,367 |
Effects of dilutive securities: | ||
Stock options for employees, directors and outside consultants | 243,842 | 56,721 |
Denominator for diluted earnings per share | 15,672,253 | 15,359,088 |
Basic Earnings Per Share - Weighted Average | $ 0.07 | $ 0.07 |
Diluted Earnings Per Share - Weighted Average | $ 0.07 | $ 0.07 |
Customer Concentration and Fore
Customer Concentration and Foreign Sales - Export sales to customers located outside the United States (Details) - USD ($) | 12 Months Ended | |
Feb. 28, 2021 | Feb. 29, 2020 | |
Export sales to customers located outside the United States | ||
Total sales | $ 9,678,000 | $ 10,849,000 |
Significant customers and foreign sales | ||
Percent of total revenues | 71.00% | |
One Customer | ||
Significant customers and foreign sales | ||
Percent of total revenues | 14.00% | |
Three Customers | ||
Significant customers and foreign sales | ||
Percent of total revenues | 30.00% | |
Asia Pacific (APAC) | ||
Export sales to customers located outside the United States | ||
Total sales | $ 4,171,000 | $ 4,817,000 |
Europe, Middle East, Asia (EMEA) | ||
Export sales to customers located outside the United States | ||
Total sales | 4,287,000 | 4,512,000 |
Latin America | ||
Export sales to customers located outside the United States | ||
Total sales | $ 1,220,000 | $ 1,520,000 |
Customer Concentration and Fo_2
Customer Concentration and Foreign Sales (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2021 | Feb. 29, 2020 | |
Sales revenue | $ 14,832,877 | $ 15,354,619 |
Concentration of Credit Risk | 71.00% | |
Sales | Foreign Customers | ||
Sales revenue | $ 9,678,000 | $ 10,849,000 |
Sales revenue, percent | 65.00% | 71.00% |
Sales | Customer | ||
Concentration of Credit Risk | 28.00% | 30.00% |
Accounts Receivable | Customer | ||
Concentration of Credit Risk | 64.00% | 67.00% |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event - SBA's Payroll Protection Program | Apr. 02, 2021USD ($) |
Subsequent Event [Line Items] | |
Proceeds received through a loan funded under the PPP, description | During fiscal 2021, we entered into a loan transaction pursuant to which we received proceeds of $1,001,640 (the “PPP Loan”) under the Paycheck Protection Program (“PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying companies and is administered by the U.S. Small Business Administration (the “SBA”). The Note had a two-year term, accrued interest at the rate of 1.0% per annum, and was prepayable at any time without payment of any premium. No payments of principal or interest were due during the six-month period beginning on the date of the Note (the “Deferral Period”). Beginning on the seventh month following the date of the Note, we were required to make 18 monthly payments of principal and interest in the amount of $56,370. The Company applied for forgiveness of the PPP Loan in December 2020. |
Forgiveness of debt | $ 1,001,640 |