Sono-Tek (SOTK) 10-Q 13 Jul 21 2022 Q1 Quarterly report Financial data

Cover

Cover - shares	3 Months Ended
	May 31, 2021	Jul. 09, 2021
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	May 31, 2021
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2022
Current Fiscal Year End Date	--02-28
Entity File Number	000-16035
Entity Registrant Name	Sono Tek Corp
Entity Central Index Key	0000806172
Entity Tax Identification Number	14-1568099
Entity Incorporation, State or Country Code	NY
Entity Address, Address Line One	2012 Rt. 9W
Entity Address, City or Town	Milton
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	12547
City Area Code	(845)
Local Phone Number	795-2020
Title of 12(b) Security	None
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		15,506,699

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	May 31, 2021	Feb. 28, 2021
Current Assets:
Cash and cash equivalents	$ 5,793,647	$ 4,084,078
Marketable securities	3,490,358	4,563,470
Accounts receivable (less allowance of $56,123)	1,168,571	1,757,802
Inventories, net	2,612,220	2,611,106
Prepaid expenses and other current assets	108,456	151,316
Total current assets	13,173,252	13,167,772
Land	250,000	250,000
Buildings, net	1,550,547	1,575,135
Equipment, furnishings and building improvements, net	1,082,634	1,075,190
Intangible assets, net	90,596	95,456
Deferred tax asset	236,120	259,838
TOTAL ASSETS	16,383,149	16,423,391
Current Liabilities:
Accounts payable	1,188,103	1,294,483
Accrued expenses	1,388,606	1,750,916
Customer deposits	1,247,071	1,166,541
Income taxes payable	137,287	53,567
Total current liabilities	3,961,067	4,265,507
Deferred tax liability	183,011	205,562
Long term debt, less current maturities		1,001,640
Total liabilities	4,144,078	5,472,709
Stockholders’ Equity
Common stock, $.01 par value; 25,000,000 shares authorized, 15,502,557 and 15,452,656 shares issued and outstanding, respectively	155,026	154,527
Additional paid-in capital	9,086,132	9,064,994
Accumulated earnings	2,997,913	1,731,161
Total stockholders’ equity	12,239,071	10,950,682
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 16,383,149	$ 16,423,391

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	May 31, 2021	Feb. 28, 2021
Statement of Financial Position [Abstract]
Allowance for doubtful accounts receivable	$ 56,123	$ 56,123
Common stock, par value	$ 0.01	$ 0.01
Common stock shares authorized	25,000,000	25,000,000
Common stock, shares issued	15,502,557	15,452,656
Common stock, shares outstanding	15,502,557	15,452,656

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income - USD ($)	3 Months Ended
	May 31, 2021	May 31, 2020
Income Statement [Abstract]
Net Sales	$ 3,644,468	$ 3,428,544
Cost of Goods Sold	1,820,303	1,867,811
Gross Profit	1,824,165	1,560,733
Operating Expenses
Research and product development costs	413,816	411,424
Marketing and selling expenses	764,642	706,717
General and administrative costs	302,799	258,402
Total Operating Expenses	1,481,257	1,376,543
Operating Income	342,908	184,190
Interest Expense		(8,417)
Interest and Dividend Income	3,360	22,646
Other Income		11,435
Paycheck Protection Program Loan Forgiveness	1,005,372
Income Before Income Taxes	1,351,640	209,854
Income Tax Expense	84,888	41,926
Net Income	$ 1,266,752	$ 167,928
Basic Earnings Per Share	$ 0.08	$ 0.01
Diluted Earnings Per Share	$ 0.08	$ 0.01
Weighted Average Shares - Basic	15,494,421	15,397,779
Weighted Average Shares - Diluted	15,663,772	15,436,758

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Earnings	Total
Balance – February 29, 2020 at Feb. 29, 2020	$ 153,482	$ 9,018,406	$ 610,519	$ 9,782,407
Shares, Outstanding, Beginning Balance at Feb. 29, 2020	15,348,180
Stock based compensation expense		8,097		8,097
Cashless exercise of stock options	$ 748	(748)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period	74,805
Net Income			167,928	167,928
Balance – May 31, 2020 (unaudited) at May. 31, 2020	$ 154,230	9,025,755	778,447	9,958,432
Shares, Outstanding, Ending Balance at May. 31, 2020	15,422,985
Balance – February 29, 2020 at Feb. 28, 2021	$ 154,527	9,064,994	1,731,161	10,950,682
Shares, Outstanding, Beginning Balance at Feb. 28, 2021	15,452,656
Stock based compensation expense		21,637		21,637
Cashless exercise of stock options	$ 499	(499)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period	49,901
Net Income			1,266,752	1,266,752
Balance – May 31, 2020 (unaudited) at May. 31, 2021	$ 155,026	$ 9,086,132	$ 2,997,913	$ 12,239,071
Shares, Outstanding, Ending Balance at May. 31, 2021	15,502,557

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	May 31, 2021	May 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$ 1,266,752	$ 167,928
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	107,553	109,878
Stock based compensation expense	21,637	8,097
Inventory reserve	31,000	18,000
Paycheck Protection Program Loan Forgiveness	(1,005,372)
Deferred tax expense	1,167
(Decrease) Increase in:
Accounts receivable	589,231	(411,916)
Inventories	(32,114)	(148,331)
Prepaid expenses and other current assets	42,860	7,110
Accounts payable and accrued expenses	(464,960)	134,554
Customer deposits	80,530	(322,996)
Income taxes payable	83,721	41,927
Net Cash Provided By (Used in) Operating Activities	722,005	(395,749)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment, furnishings and leasehold improvements	(85,548)	(152,402)
Sale of marketable securities	1,073,112	310,786
Net Cash Provided By Investing Activities	987,564	158,384
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from note payable - bank		1,001,640
Repayment of long-term debt		(41,879)
Net Cash Provided By Financing Activities		959,761
NET INCREASE IN CASH AND CASH EQUIVALENTS	1,709,569	722,396
CASH AND CASH EQUIVALENTS
Beginning of period	4,084,078	3,659,551
End of period	5,793,647	4,381,947
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid		7,210
Taxes Paid

BUSINESS DESCRIPTION

BUSINESS DESCRIPTION	3 Months Ended
	May 31, 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. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information with the instructions for Form 10-Q and Article 8 of Regulation S-X. Accordingly, the condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of the Company’s management, all adjustments considered necessary for a fair presentation (consisting of normal recurring adjustments) have been included. The results for the interim periods are not necessarily indicative of what the results will be for the fiscal year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited Consolidated Financial Statements as of and for the fiscal year ended February 28, 2021 (“fiscal year 2021”) contained in the Company’s 2021 Annual Report on Form 10-K filed with the SEC on May 28, 2021. The Company’s current fiscal year ends on February 28, 2022 (“fiscal 2022”).

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	May 31, 2021
Accounting Policies [Abstract]
SIGNIFICANT ACCOUNTING POLICIES	NOTE 2: SIGNIFICANT ACCOUNTING POLICIES Accounts Receivable, net Cash and Cash Equivalents - Consolidation Earnings Per Share - Equipment, Furnishings and Leasehold Improvements straight-line method three to five years Fair Value of Financial Instruments Fair Value Measurement The carrying amounts of financial instruments reported in the accompanying unaudited condensed 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 May 31, 2021 and February 28, 2021, respectively: Significant Accounting Policies - Fair values of financial assets of the Company Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Marketable Securities – May 31, 2021 $ 3,490,358 $ — $ — $ 3,490,358 Marketable Securities – February 28, 2021 $ 4,261,927 $ 301,543 $ — $ 4,563,470 Marketable Securities include certificates of deposit and US Treasury securities, totaling $ 3,490,358 4,563,470 Income Taxes Intangible Assets - seventeen twelve 184,564 181,922 11,000 Inventories - Land and Buildings straight-line method forty years 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. Other than Accounting Standards Update (“ASU”) 2019-12 and ASU 2016-13 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 Shipping and Handling Costs Stock-Based Compensation Changes in the assumptions to reflect future stock price volatility and future stock award exercise experience could result in a change in the assumptions used to value awards in the future and may result in a material change to the fair value calculation of stock-based awards. ASC 718 requires the recognition of the fair value of stock compensation expense on a straight line basis over the requite service period, based on the terms of the award in net income. The Company accounts for forfeitures as they occur. Although every effort is made to ensure the accuracy of the Company’s estimates and assumptions, significant unanticipated changes in those estimates, interpretations and assumptions may result in recording stock option expense that may materially impact the Company’s financial statements for each respective reporting period. Uncertainties

REVENUE RECOGNITION

REVENUE RECOGNITION	3 Months Ended
	May 31, 2021
Revenue from Contract with Customer [Abstract]
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. The Company applies 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 the Company expects to recognize that amount as revenue. At May 31, 2021, the Company had received $ 1,247,000 618,000 the Company was utilizing $618,000 of its available credit line to collateralize these letters of credit. At February 28, 2021, the Company had received $ 1,167,000 457,000 The Company’s sales revenue, by product line is as follows: Revenue Recognition - Sales Revenue by Product Line Three Months Ended May 31, 2021 % of total 2020 % of total Fluxing Systems $ 358,000 10 $ 344,000 10 Integrated Coating Systems 155,000 4 1,176,000 34 Multi-Axis Coating Systems 2,079,000 57 913,000 27 OEM Systems 326,000 9 422,000 12 Other 726,000 20 574,000 17 TOTAL $ 3,644,000 $ 3,429,000

INVENTORIES

INVENTORIES	3 Months Ended
	May 31, 2021
Inventory Disclosure [Abstract]
INVENTORIES	NOTE 4: INVENTORIES Inventories consist of the following: Inventories - Schedule of Inventory, Current May 31, February 28, 2021 2021 Raw materials and subassemblies $ 1,176,733 $ 1,081,591 Finished goods 613,653 786,785 Work in process 1,137,114 1,027,010 Total 2,927,500 2,895,386 Less: Allowance (315,280 ) (284,280 ) Net inventories $ 2,612,220 $ 2,611,106

STOCK OPTIONS

STOCK OPTIONS	3 Months Ended
	May 31, 2021
Equity [Abstract]
STOCK OPTIONS	NOTE 5: STOCK OPTIONS Stock Options 2,500,000 ten 396,250 285,125 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 47,500 During the three months ended May 31, 2021, 63,334 49,901

STOCK BASED COMPENSATION

STOCK BASED COMPENSATION	3 Months Ended
	May 31, 2021
Equity [Abstract]
STOCK BASED COMPENSATION	NOTE 6: STOCK BASED COMPENSATION The Company adopted ASC 718, “Share Based Payments.” which requires companies to expense the value of employee stock options and similar awards. The weighted-average fair value of options are estimated on the date of grant using the Black-Scholes options-pricing model. For the three months ended May 31, 2021 no 22,000 8,000

EARNINGS PER SHARE

EARNINGS PER SHARE	3 Months Ended
	May 31, 2021
Earnings Per Share [Abstract]
EARNINGS PER SHARE	NOTE 7: EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share: Earnings Per Share - Computation of basic and diluted earnings per share Three Months Ended May 31, 2021 2020 Numerator for basic and diluted earnings per share $ 1,266,752 $ 167,928 Denominator for basic earnings per share - weighted average 15,494,421 15,397,779 Effects of dilutive securities: Stock options for employees, directors and outside consultants 169,351 38,979 Denominator for diluted earnings per share 15,663,772 15,436,758 Basic Earnings Per Share $ 0.08 $ 0.01 Diluted Earnings Per Share $ 0.08 $ 0.01

LONG TERM DEBT

LONG TERM DEBT	3 Months Ended
	May 31, 2021
Debt Disclosure [Abstract]
LONG TERM DEBT	NOTE 8: LONG TERM DEBT Long-term debt consists of the following: Long Term Debt - Schedule of Long-Term Debt May 31, February 28, 2021 2021 Note Payable, bank, unsecured, Paycheck Protection Program funding, initially scheduled to be payable in monthly installments of principal and interest of $ 56,370 1 2 1,005,372 — 1,001,640 Total long-term debt $ — $ 1,001,640

REVOLVING LINE OF CREDIT

REVOLVING LINE OF CREDIT	3 Months Ended
	May 31, 2021
Debt Disclosure [Abstract]
REVOLVING LINE OF CREDIT	NOTE 9: REVOLVING LINE OF CREDIT The Company has a $ 1,500,000 3.25 The revolving credit line is collateralized by the Company’s accounts receivable and inventory. As of May 31, 2021, $ 618,000 882,000

CUSTOMER CONCENTRATIONS AND FOR

CUSTOMER CONCENTRATIONS AND FOREIGN SALES	3 Months Ended
	May 31, 2021
Risks and Uncertainties [Abstract]
CUSTOMER CONCENTRATIONS AND FOREIGN SALES	NOTE 10: CUSTOMER CONCENTRATIONS AND FOREIGN SALES Export sales to customers located outside the United States and Canada were approximately as follows: Customer Concentrations and Foreign Sales - Schedule of Customer Concentrations and Foreign Sales May 31, May 31, Asia Pacific (APAC) 1,222,000 1,923,000 Europe, Middle East, Asia (EMEA) 842,000 430,000 Latin America Latin America 352,000 320,000 $ 2,416,000 $ 2,673,000 Asia Pacific (APAC) Europe, Middle East, Asia (EMEA) During first quarter of fiscal 2022 and fiscal 2021, sales to foreign customers accounted for approximately $ 2,416,000 2,673,000 66 78 The Company had three customers which accounted for 33 54 The Company had three customers which accounted for 46 45 Customers Sales Accounts Receivables

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	May 31, 2021
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 11: COMMITMENTS AND CONTINGENCIES Other than the letters of credit disclosed in Note 9, the Company did not have any material commitments or contingencies as of May 31, 2021.

SIGNIFICANT ACCOUNTING POLICI_2

SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	May 31, 2021
Accounting Policies [Abstract]
Accounts Receivable, net	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 straight-line method three to five years
Fair Value of Financial Instruments	Fair Value of Financial Instruments Fair Value Measurement The carrying amounts of financial instruments reported in the accompanying unaudited condensed 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 May 31, 2021 and February 28, 2021, respectively: Significant Accounting Policies - Fair values of financial assets of the Company Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Marketable Securities – May 31, 2021 $ 3,490,358 $ — $ — $ 3,490,358 Marketable Securities – February 28, 2021 $ 4,261,927 $ 301,543 $ — $ 4,563,470 Marketable Securities include certificates of deposit and US Treasury securities, totaling $ 3,490,358 4,563,470
Income Taxes	Income Taxes
Intangible Assets	Intangible Assets - seventeen twelve 184,564 181,922 11,000
Inventories	Inventories -
Land and Buildings	Land and Buildings straight-line method forty years
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. Other than Accounting Standards Update (“ASU”) 2019-12 and ASU 2016-13 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
Shipping and Handling Costs	Shipping and Handling Costs
Stock-Based Compensation	Stock-Based Compensation Changes in the assumptions to reflect future stock price volatility and future stock award exercise experience could result in a change in the assumptions used to value awards in the future and may result in a material change to the fair value calculation of stock-based awards. ASC 718 requires the recognition of the fair value of stock compensation expense on a straight line basis over the requite service period, based on the terms of the award in net income. The Company accounts for forfeitures as they occur. Although every effort is made to ensure the accuracy of the Company’s estimates and assumptions, significant unanticipated changes in those estimates, interpretations and assumptions may result in recording stock option expense that may materially impact the Company’s financial statements for each respective reporting period.
Uncertainties	Uncertainties

SIGNIFICANT ACCOUNTING POLICI_3

SIGNIFICANT ACCOUNTING POLICIES (Tables)	3 Months Ended
	May 31, 2021
Accounting Policies [Abstract]
Significant Accounting Policies - Fair values of financial assets of the Company	The fair values of financial assets of the Company were determined using the following categories at May 31, 2021 and February 28, 2021, respectively: Significant Accounting Policies - Fair values of financial assets of the Company Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Marketable Securities – May 31, 2021 $ 3,490,358 $ — $ — $ 3,490,358 Marketable Securities – February 28, 2021 $ 4,261,927 $ 301,543 $ — $ 4,563,470

REVENUE RECOGNITION (Tables)

REVENUE RECOGNITION (Tables)	3 Months Ended
	May 31, 2021
Revenue from Contract with Customer [Abstract]
Revenue Recognition - Sales Revenue by Product Line	The Company’s sales revenue, by product line is as follows: Revenue Recognition - Sales Revenue by Product Line Three Months Ended May 31, 2021 % of total 2020 % of total Fluxing Systems $ 358,000 10 $ 344,000 10 Integrated Coating Systems 155,000 4 1,176,000 34 Multi-Axis Coating Systems 2,079,000 57 913,000 27 OEM Systems 326,000 9 422,000 12 Other 726,000 20 574,000 17 TOTAL $ 3,644,000 $ 3,429,000

INVENTORIES (Tables)

INVENTORIES (Tables)	3 Months Ended
	May 31, 2021
Inventory Disclosure [Abstract]
Inventories - Schedule of Inventory, Current	Inventories consist of the following: Inventories - Schedule of Inventory, Current May 31, February 28, 2021 2021 Raw materials and subassemblies $ 1,176,733 $ 1,081,591 Finished goods 613,653 786,785 Work in process 1,137,114 1,027,010 Total 2,927,500 2,895,386 Less: Allowance (315,280 ) (284,280 ) Net inventories $ 2,612,220 $ 2,611,106

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	3 Months Ended
	May 31, 2021
Earnings Per Share [Abstract]
Earnings Per Share - Computation of basic and diluted earnings per share	The following table sets forth the computation of basic and diluted earnings per share: Earnings Per Share - Computation of basic and diluted earnings per share Three Months Ended May 31, 2021 2020 Numerator for basic and diluted earnings per share $ 1,266,752 $ 167,928 Denominator for basic earnings per share - weighted average 15,494,421 15,397,779 Effects of dilutive securities: Stock options for employees, directors and outside consultants 169,351 38,979 Denominator for diluted earnings per share 15,663,772 15,436,758 Basic Earnings Per Share $ 0.08 $ 0.01 Diluted Earnings Per Share $ 0.08 $ 0.01

LONG TERM DEBT (Tables)

LONG TERM DEBT (Tables)	3 Months Ended
	May 31, 2021
Debt Disclosure [Abstract]
Long Term Debt - Schedule of Long-Term Debt	Long-term debt consists of the following: Long Term Debt - Schedule of Long-Term Debt May 31, February 28, 2021 2021 Note Payable, bank, unsecured, Paycheck Protection Program funding, initially scheduled to be payable in monthly installments of principal and interest of $ 56,370 1 2 1,005,372 — 1,001,640 Total long-term debt $ — $ 1,001,640

CUSTOMER CONCENTRATIONS AND F_2

CUSTOMER CONCENTRATIONS AND FOREIGN SALES (Tables)	3 Months Ended
	May 31, 2021
Risks and Uncertainties [Abstract]
Customer Concentrations and Foreign Sales - Schedule of Customer Concentrations and Foreign Sales	Export sales to customers located outside the United States and Canada were approximately as follows: Customer Concentrations and Foreign Sales - Schedule of Customer Concentrations and Foreign Sales May 31, May 31, Asia Pacific (APAC) 1,222,000 1,923,000 Europe, Middle East, Asia (EMEA) 842,000 430,000 Latin America Latin America 352,000 320,000 $ 2,416,000 $ 2,673,000 Asia Pacific (APAC) Europe, Middle East, Asia (EMEA)

Significant Accounting Polici_4

Significant Accounting Policies - Fair values of financial assets of the Company (Details) - USD ($)	May 31, 2021	Feb. 28, 2021
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Marketable Securities, Current	$ 3,490,358	$ 4,563,470
Level 1
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Marketable Securities, Current	3,490,358	4,261,927
Level 2
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Marketable Securities, Current		301,543
Level 3
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Marketable Securities, Current

SIGNIFICANT ACCOUNTING POLICI_5

SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	3 Months Ended
	May 31, 2021	Feb. 28, 2021
Property, Plant and Equipment [Line Items]
Marketable Securities	$ 3,490,358	$ 4,563,470
Accumulated amortization of patents	184,564	$ 181,922
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
Property, Plant and Equipment [Line Items]
Useful life of intangible assets	17 years
Foreign Patents
Property, Plant and Equipment [Line Items]
Useful life of intangible assets	12 years
Equipment and Furnishings
Property, Plant and Equipment [Line Items]
Depreciation methods	straight-line method
Estimated useful lives	three to five years
Building [Member]
Property, Plant and Equipment [Line Items]
Depreciation methods	straight-line method
Estimated useful lives	forty years

Revenue Recognition - Sales Rev

Revenue Recognition - Sales Revenue by Product Line (Details) - USD ($)	3 Months Ended
	May 31, 2021	May 31, 2020
Disaggregation of Revenue [Line Items]
Sales revenue	$ 3,644,468	$ 3,428,544
Fluxing Systems
Disaggregation of Revenue [Line Items]
Sales revenue	$ 358,000	$ 344,000
Sales revenue, percent	10.00%	10.00%
Integrated Coating Systems
Disaggregation of Revenue [Line Items]
Sales revenue	$ 155,000	$ 1,176,000
Sales revenue, percent	4.00%	34.00%
Multi-Axis Coating Systems
Disaggregation of Revenue [Line Items]
Sales revenue	$ 2,079,000	$ 913,000
Sales revenue, percent	57.00%	27.00%
OEM Systems
Disaggregation of Revenue [Line Items]
Sales revenue	$ 326,000	$ 422,000
Sales revenue, percent	9.00%	12.00%
Other Product Line
Disaggregation of Revenue [Line Items]
Sales revenue	$ 726,000	$ 574,000
Sales revenue, percent	20.00%	17.00%
Total Product Line
Disaggregation of Revenue [Line Items]
Sales revenue	$ 3,644,000	$ 3,429,000

REVENUE RECOGNITION (Details Na

REVENUE RECOGNITION (Details Narrative) - USD ($)	3 Months Ended	12 Months Ended
	May 31, 2021	Feb. 28, 2021
Revenue from Contract with Customer [Abstract]
Proceeds in cash deposits	$ 1,247,000	$ 1,167,000
Letter of credit	$ 618,000
Letter of credit, collateral description	the Company was utilizing $618,000 of its available credit line to collateralize these letters of credit.
Revenue recognized	$ 457,000

Inventories - Schedule of Inven

Inventories - Schedule of Inventory, Current (Details) - USD ($)	May 31, 2021	Feb. 28, 2021
Inventory Disclosure [Abstract]
Raw materials and subassemblies	$ 1,176,733	$ 1,081,591
Finished goods	613,653	786,785
Work in process	1,137,114	1,027,010
Total	2,927,500	2,895,386
Less: Allowance	(315,280)	(284,280)
Net inventories	$ 2,612,220	$ 2,611,106

STOCK OPTIONS (Details Narrativ

STOCK OPTIONS (Details Narrative) - shares	3 Months Ended
	May 31, 2021	May 31, 2020	May 31, 2013
Common Stock [Member]
Options exercised, net cashless basis	63,334
Exercise of stock options	49,901	74,805
2013 Stock Incentive Plan ("2013 Plan")
Stock options shares available for grants	2,500,000
Options, expiration period	10 years
Stock options, outstanding	396,250
Stock options, vested	285,125
2003 Stock Incentive Plan ("2003 Plan")
Stock options shares available for grants			1,500,000
Stock options, outstanding		47,500

STOCK BASED COMPENSATION (Detai

STOCK BASED COMPENSATION (Details Narrative) - Share-based Payment Arrangement, Option [Member] - USD ($)	3 Months Ended
	May 31, 2021	May 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options issued	0
Additional stock-based compensation expense as a result of applying ASC 718	$ 22,000	$ 8,000

Earnings Per Share - Computatio

Earnings Per Share - Computation of basic and diluted earnings per share (Details) - USD ($)	3 Months Ended
	May 31, 2021	May 31, 2020
Earnings Per Share [Abstract]
Numerator for basic and diluted earnings per share	$ 1,266,752	$ 167,928
Denominator for basic earnings per share - weighted average	15,494,421	15,397,779
Effects of dilutive securities:
Stock options for employees, directors and outside consultants	169,351	38,979
Denominator for diluted earnings per share	15,663,772	15,436,758
Basic Earnings Per Share	$ 0.08	$ 0.01
Diluted Earnings Per Share	$ 0.08	$ 0.01

Long Term Debt - Schedule of Lo

Long Term Debt - Schedule of Long-Term Debt (Details) - USD ($)	12 Months Ended
	Feb. 28, 2021	May 31, 2021
Debt Instrument [Line Items]
Total long-term debt	$ 1,001,640
Unsecured Debt [Member]
Debt Instrument [Line Items]
Monthly installments of principal and interest	$ 56,370
Interest rate	1.00%
Maturity	2 years
Gain on forgiveness of debt	$ 1,005,372
Total long-term debt	$ 1,001,640

REVOLVING LINE OF CREDIT (Detai

REVOLVING LINE OF CREDIT (Details Narrative) - USD ($)	3 Months Ended	12 Months Ended
	May 31, 2021	Feb. 28, 2021
Line of Credit Facility [Line Items]
Revolving credit line collateral	the Company was utilizing $618,000 of its available credit line to collateralize these letters of credit.
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Revolving line of credit	$ 1,500,000	$ 1,500,000
Interest rate	3.25%	3.25%
Revolving credit line collateral	The revolving credit line is collateralized by the Company’s accounts receivable and inventory.	The revolving credit line is collateralized by the Company’s accounts receivable and inventory.
Letter of Credit [Member]
Line of Credit Facility [Line Items]
Credit line utilized to collateralize letter of credit issued to customers	$ 618,000
Unused portion of credit line	$ 882,000

Customer Concentrations and F_3

Customer Concentrations and Foreign Sales - Schedule of Customer Concentrations and Foreign Sales (Details) - USD ($)	3 Months Ended
	May 31, 2021	May 31, 2020
Total sales	$ 2,416,000	$ 2,673,000
Asia Pacific (APAC)
Total sales	1,222,000	1,923,000
Europe, Middle East, Asia (EMEA)
Total sales	842,000	430,000
Latin America
Total sales	$ 352,000	$ 320,000

CUSTOMER CONCENTRATIONS AND F_4

CUSTOMER CONCENTRATIONS AND FOREIGN SALES (Details Narrative) - USD ($)	3 Months Ended
	May 31, 2021	May 31, 2020
Concentration Risk [Line Items]
Sales revenue	$ 3,644,468	$ 3,428,544
Sales | Foreign Customers
Concentration Risk [Line Items]
Sales revenue	$ 2,416,000	$ 2,673,000
Sales revenue, percent	66.00%	78.00%
Sales | Customers
Concentration Risk [Line Items]
Concentration of Credit Risk	33.00%	46.00%
Accounts Receivables | Customers
Concentration Risk [Line Items]
Concentration of Credit Risk	54.00%	45.00%