Cover
Cover - shares | 6 Months Ended | |
Aug. 31, 2022 | Oct. 14, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q/A | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Aug. 31, 2022 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2023 | |
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 | Common Stock, $0.01 par value per share | |
Trading Symbol | SOTK | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 15,737,501 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Aug. 31, 2022 | Feb. 28, 2022 |
Current Assets: | ||
Cash and cash equivalents | $ 4,309,057 | $ 4,840,558 |
Marketable securities | 6,347,854 | 5,867,990 |
Accounts receivable (less allowance of $56,123) | 1,977,510 | 1,092,505 |
Inventories, net | 2,773,834 | 2,373,242 |
Prepaid expenses and other current assets | 261,753 | 323,304 |
Total current assets | 15,670,008 | 14,497,599 |
Land | 250,000 | 250,000 |
Buildings, net | 1,593,751 | 1,621,878 |
Equipment, furnishings and building improvements, net | 986,335 | 939,306 |
Intangible assets, net | 66,583 | 76,015 |
Deferred tax asset | 229,679 | 240,736 |
TOTAL ASSETS | 18,796,356 | 17,625,534 |
Current Liabilities: | ||
Accounts payable | 967,963 | 684,511 |
Accrued expenses | 1,499,963 | 1,804,028 |
Customer deposits | 1,778,752 | 1,167,968 |
Income taxes payable | 62,576 | 58,874 |
Total current liabilities | 4,309,254 | 3,715,381 |
Deferred tax liability | 165,629 | 168,840 |
Total liabilities | 4,474,883 | 3,884,221 |
Stockholders’ Equity | ||
Common stock, $.01 par value; 25,000,000 shares authorized, 15,734,728 and 15,729,175 shares issued and outstanding, respectively | 157,348 | 157,292 |
Additional paid-in capital | 9,422,632 | 9,310,287 |
Accumulated earnings | 4,741,493 | 4,273,734 |
Total stockholders’ equity | 14,321,473 | 13,741,313 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 18,796,356 | $ 17,625,534 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) | May 31, 2022 | Feb. 28, 2022 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful receivables | $ 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 | 15,734,728 | 15,729,175 |
Common stock, shares outstanding | 15,734,728 | 15,729,175 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2022 | Aug. 31, 2021 | Aug. 31, 2022 | Aug. 31, 2021 | |
Income Statement [Abstract] | ||||
Net Sales | $ 3,763,329 | $ 4,070,467 | $ 7,814,864 | $ 7,714,935 |
Cost of Goods Sold | 1,867,716 | 1,996,468 | 3,812,238 | 3,816,771 |
Gross Profit | 1,895,613 | 2,073,999 | 4,002,626 | 3,898,164 |
Operating Expenses | ||||
Research and product development costs | 506,490 | 412,397 | 1,023,123 | 826,213 |
Marketing and selling expenses | 776,858 | 739,603 | 1,566,720 | 1,504,245 |
General and administrative costs | 434,687 | 473,423 | 854,680 | 776,222 |
Total Operating Expenses | 1,718,035 | 1,625,423 | 3,444,523 | 3,106,680 |
Operating Income | 177,578 | 448,576 | 558,103 | 791,484 |
Interest and Dividend Income | 18,507 | 7,640 | 25,922 | 11,000 |
Net unrealized loss on marketable securities | (19,172) | (31,025) | ||
Paycheck Protection Program Loan Forgiveness | 1,005,372 | |||
Income Before Income Taxes | 176,913 | 456,216 | 553,000 | 1,807,856 |
Income Tax Expense | 14,790 | 112,392 | 85,241 | 197,280 |
Net Income | $ 162,123 | $ 343,824 | $ 467,759 | $ 1,610,576 |
Basic Earnings Per Share | $ 0.01 | $ 0.02 | $ 0.03 | $ 0.10 |
Diluted Earnings Per Share | $ 0.01 | $ 0.02 | $ 0.03 | $ 0.10 |
Weighted Average Shares - Basic | 15,732,550 | 15,507,484 | 15,730,862 | 15,500,952 |
Weighted Average Shares - Diluted | 15,775,156 | 15,602,359 | 15,770,544 | 15,613,930 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Feb. 28, 2021 | $ 154,527 | $ 9,064,994 | $ 1,731,161 | $ 10,950,682 |
Beginning balance, Shares at Feb. 28, 2021 | 15,452,656 | |||
Stock based compensation expense | 21,637 | 21,637 | ||
Cashless exercise of stock options | $ 499 | (499) | ||
Cashless exercise of stock options, Shares | 49,901 | |||
Net Income | 1,266,752 | 1,266,752 | ||
Ending balance, value at May. 31, 2021 | $ 155,026 | 9,086,132 | 2,997,913 | 12,239,071 |
Ending balance, Shares at May. 31, 2021 | 15,502,557 | |||
Stock based compensation expense | 19,080 | 19,080 | ||
Cashless exercise of stock options | $ 287 | (287) | ||
Cashless exercise of stock options, Shares | 28,728 | |||
Net Income | 343,824 | 343,824 | ||
Ending balance, value at Aug. 31, 2021 | $ 155,313 | 9,104,925 | 3,341,737 | 12,601,975 |
Ending balance, Shares at Aug. 31, 2021 | 15,531,285 | |||
Beginning balance, value at Feb. 28, 2022 | $ 157,292 | 9,310,287 | 4,273,734 | 13,741,313 |
Beginning balance, Shares at Feb. 28, 2022 | 15,729,175 | |||
Stock based compensation expense | 69,369 | 69,369 | ||
Net Income | 305,636 | 305,636 | ||
Ending balance, value at May. 31, 2022 | $ 157,292 | 9,379,656 | 4,579,370 | 14,116,318 |
Ending balance, Shares at May. 31, 2022 | 15,729,175 | |||
Stock based compensation expense | 43,032 | 43,032 | ||
Cashless exercise of stock options | $ 56 | (56) | ||
Cashless exercise of stock options, Shares | 5,553 | |||
Net Income | 162,123 | 162,123 | ||
Ending balance, value at Aug. 31, 2022 | $ 157,348 | $ 9,422,632 | $ 4,741,493 | $ 14,321,473 |
Ending balance, Shares at Aug. 31, 2022 | 15,734,728 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 6 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Income | $ 467,759 | $ 1,610,576 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 234,771 | 224,233 |
Stock based compensation expense | 112,401 | 40,717 |
Inventory reserve | (10,854) | (24,919) |
Paycheck Protection Program Loan Forgiveness | (1,005,372) | |
Unrealized loss on marketable securities | 31,025 | |
Deferred tax expense | 7,846 | 1,167 |
(Decrease) Increase in: | ||
Accounts receivable | (885,005) | 275,468 |
Inventories | (389,738) | (287,830) |
Prepaid expenses and other current assets | 61,551 | 27,101 |
Accounts payable and accrued expenses | (20,613) | (563,094) |
Customer deposits | 610,784 | 750,243 |
Income taxes payable | 3,702 | 148,622 |
Net Cash Provided by Operating Activities | 223,629 | 1,196,912 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of equipment, furnishings and leasehold improvements | (244,237) | (147,230) |
(Purchase) Sale of marketable securities - net | (510,893) | 1,009,346 |
Net Cash (Used in) Provided by Investing Activities | (755,130) | 862,116 |
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (531,501) | 2,059,028 |
CASH AND CASH EQUIVALENTS | ||
Beginning of period | 4,840,558 | 4,084,078 |
End of period | 4,309,057 | 6,143,106 |
SUPPLEMENTAL CASH FLOW DISCLOSURE: | ||
Interest paid | ||
Income Taxes Paid | $ 158,693 | $ 47,488 |
BUSINESS DESCRIPTION
BUSINESS DESCRIPTION | 6 Months Ended |
Aug. 31, 2022 | |
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 add functional properties, protect or strengthen surfaces on parts and components for the microelectronics/electronics, alternative energy, medical, industrial and emerging research & development and other markets. We design and manufacture custom-engineered ultrasonic coating systems incorporating our patented technology, in combination with strong applications engineering knowledge, to assist our customers in achieving their desired coating solutions. 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 unaudited 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, 2022 (“fiscal year 2022”) contained in the Company’s 2022 Annual Report on Form 10-K filed with the SEC on May 24, 2022. The Company’s current fiscal year ends on February 28, 2023 (“fiscal 2023”). |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Aug. 31, 2022 | |
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 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 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 August 31, 2022 and February 28, 2022, respectively: Schedule of Significant Accounting Policies - Fair values of financial assets of the Company Level 1 Level 2 Level 3 Total Marketable Securities – August 31, 2022 $ 6,196,030 $ 151,824 $ — $ 6,347,854 Marketable Securities – February 28, 2022 $ 5,716,338 $ 151,652 $ — $ 5,867,990 Marketable Securities include certificates of deposit and US Treasury securities that are considered to be highly liquid and easily tradeable totaling $ 6,347,854 5,867,990 Income Taxes Intangible Assets - 17 12 197,585 192,490 11,000 Inventories - Land and Buildings straight-line method Long-Lived Assets - No Management Estimates - New Accounting Pronouncements Other than Accounting Standards Update 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 Research and Product Development Expenses - Revenue Recognition • Identification of the contract, or contracts, with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, performance obligations are satisfied Stock-Based Compensation ASC 718 requires the recognition of the fair value of stock compensation expense to be recognized over the vesting term of such award. The Company accounts for forfeitures as they occur. Uncertainties - We have encountered challenges in our supply of various materials and components, and electronic components in particular, due to well-documented shortages and constraints in the global supply chain. Lead times for ordered components may vary significantly, and some components used to manufacture our products are provided by a limited number of sources. We have experienced lengthened lead times throughout our supply chain as a result of supply chain constraints and material shortages that have occurred in the recent months, and may continue through fiscal year 2023. This has been exacerbated by the recent resurgence of the COVID-19 pandemic in certain parts of China, which has resulted in the temporary closure of manufacturing facilities, including those that make electronic parts like those that we included in our products, in certain parts of China. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 6 Months Ended |
Aug. 31, 2022 | |
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. At August 31, 2022, the Company had received $ 1,779,000 5,000 At February 28, 2022, the Company had received $ 1,168,000 1,103,000 The Company’s sales revenue by product line is as follows: Schedule of Revenue Recognition - Sales Revenue by Product Line Three Months Ended August 31, Six Months Ended August 31, 2022 % of total 2021 % of total 2022 % of total 2021 % of total Fluxing Systems $ 399,000 11% $ 117,000 3% $ 707,000 9% $ 476,000 6% Integrated Coating Systems 425,000 11% 565,000 14% 594,000 8% 720,000 9% Multi-Axis Coating Systems 1,491,000 40% 1,891,000 46% 3,470,000 44% 3,970,000 52% OEM Systems 762,000 20% 845,000 21% 1,316,000 17% 1,171,000 15% Other 686,000 18% 652,000 16% 1,728,000 22% 1,378,000 18% TOTAL $ 3,763,000 $ 4,070,000 $ 7,815,000 $ 7,715,000 |
INVENTORIES
INVENTORIES | 6 Months Ended |
Aug. 31, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 4: INVENTORIES Inventories consist of the following: Schedule of Inventory, Current August 31, February 28, 2022 2022 Raw materials and subassemblies $ 1,560,366 $ 1,439,465 Finished goods 872,011 918,318 Work in process 658,264 343,120 Total 3,090,641 2,700,903 Less: Allowance (316,807 ) (327,661 ) Net inventories $ 2,773,834 $ 2,373,242 |
STOCK OPTIONS
STOCK OPTIONS | 6 Months Ended |
Aug. 31, 2022 | |
Equity [Abstract] | |
STOCK OPTIONS | NOTE 5: STOCK OPTIONS Under the 2013 Stock Incentive Plan ("2013 Plan"), options can be granted to officers, directors, consultants and employees of the Company and its subsidiaries to purchase up to 2,500,000 10 230,215 82,305 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 5,000 During the three and six months ended August 31, 2022, 7,250 5,553 |
STOCK BASED COMPENSATION
STOCK BASED COMPENSATION | 6 Months Ended |
Aug. 31, 2022 | |
Equity [Abstract] | |
STOCK BASED COMPENSATION | NOTE 6: STOCK BASED COMPENSATION The Company accounts for stock based compensation under ASC 718, “Share Based Payments.” which requires companies to expense the value of employee stock options and similar awards. During the six months ended August 31, 2022, the Company granted options to acquire 2,972 5.50 5.80 16,500 5.50 3 10 3.04 The weighted-average fair value of options are estimated on the date of grant using the Black-Scholes options-pricing model. The weighted-average Black-Scholes assumptions are as follows: Schedule of weighted-average Black-Scholes assumptions Six Months Ended Expected Life 5 8 Risk free interest rate 2.82 3.02 Expected volatility 55.02 61.42 Expected dividend yield 0 Total compensation related to non-vested options not yet recognized as of August 31, 2022 was $ 322,000 3 For the three and six months ended August 31, 2022 and 2021, net income and earnings per share reflect the actual deduction for stock-based compensation expense. For the three months ended August 31, 2022 and 2021, the Company recognized approximately $ 43,000 19,000 112,000 41,000 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Aug. 31, 2022 | |
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: Schedule of Computation of basic and diluted earnings per share Six Months Ended Three Months Ended 2022 2021 2022 2021 Numerator for basic and diluted earnings per share $ 467,759 $ 1,610,576 $ 162,123 $ 343,824 Denominator for basic earnings per share – weighted average 15,730,862 15,500,952 15,732,550 15,507,484 Effects of dilutive securities Stock options for employees, directors and outside consultants 39,682 112,978 42,606 94,875 Denominator for diluted earnings per share 15,770,544 15,613,930 15,775,156 15,602,359 Basic Earnings Per Share $ 0.03 $ 0.10 $ 0.01 $ 0.02 Diluted Earnings Per Share $ 0.03 $ 0.10 $ 0.01 $ 0.02 |
REVOLVING LINE OF CREDIT
REVOLVING LINE OF CREDIT | 6 Months Ended |
Aug. 31, 2022 | |
Debt Disclosure [Abstract] | |
REVOLVING LINE OF CREDIT | NOTE 8: REVOLVING LINE OF CREDIT The Company has a $ 1,500,000 5.50 3.25 The revolving credit line is collateralized by the Company’s accounts receivable and inventory As of August 31, 2022, $ 5,000 no 1,495,000 |
CUSTOMER CONCENTRATIONS AND FOR
CUSTOMER CONCENTRATIONS AND FOREIGN SALES | 6 Months Ended |
Aug. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
CUSTOMER CONCENTRATIONS AND FOREIGN SALES | NOTE 9: CUSTOMER CONCENTRATIONS AND FOREIGN SALES Export sales to customers located outside the United States and Canada were approximately as follows: Schedule of Customer Concentrations and Foreign Sales Six Months Ended Three Months Ended 2022 2021 2022 2021 Asia Pacific (APAC) $ 1,533,000 $ 2,853,000 $ 827,000 $ 1,631,000 Europe, Middle East, Asia (EMEA) 1,826,000 1,436,000 836,000 593,000 Latin America 865,000 645,000 447,000 293,000 $ 4,224,000 $ 4,934,000 $ 2,110,000 $ 2,517,000 During first half of fiscal 2023 and fiscal 2022, sales to foreign customers accounted for approximately $ 4,224,000 4,934,000 54 64 During second quarter of fiscal 2023 and fiscal 2022, sales to foreign customers accounted for approximately $ 2,110,000 2,517,000 56 62 The Company had three customers which accounted for 17 24 40 The Company had two customers which accounted for 26 47 41 |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Aug. 31, 2022 | |
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 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 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 August 31, 2022 and February 28, 2022, respectively: Schedule of Significant Accounting Policies - Fair values of financial assets of the Company Level 1 Level 2 Level 3 Total Marketable Securities – August 31, 2022 $ 6,196,030 $ 151,824 $ — $ 6,347,854 Marketable Securities – February 28, 2022 $ 5,716,338 $ 151,652 $ — $ 5,867,990 Marketable Securities include certificates of deposit and US Treasury securities that are considered to be highly liquid and easily tradeable totaling $ 6,347,854 5,867,990 |
Income Taxes | Income Taxes |
Intangible Assets | Intangible Assets - 17 12 197,585 192,490 11,000 |
Inventories | Inventories - |
Land and Buildings | Land and Buildings straight-line method |
Long-Lived Assets | Long-Lived Assets - No |
Management Estimates | Management Estimates - |
New Accounting Pronouncements | New Accounting Pronouncements Other than Accounting Standards Update 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 |
Research and Product Development Expenses | Research and Product Development Expenses - |
Revenue Recognition | Revenue Recognition • Identification of the contract, or contracts, with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, performance obligations are satisfied |
Stock-Based Compensation | Stock-Based Compensation ASC 718 requires the recognition of the fair value of stock compensation expense to be recognized over the vesting term of such award. The Company accounts for forfeitures as they occur. |
Uncertainties | Uncertainties - We have encountered challenges in our supply of various materials and components, and electronic components in particular, due to well-documented shortages and constraints in the global supply chain. Lead times for ordered components may vary significantly, and some components used to manufacture our products are provided by a limited number of sources. We have experienced lengthened lead times throughout our supply chain as a result of supply chain constraints and material shortages that have occurred in the recent months, and may continue through fiscal year 2023. This has been exacerbated by the recent resurgence of the COVID-19 pandemic in certain parts of China, which has resulted in the temporary closure of manufacturing facilities, including those that make electronic parts like those that we included in our products, in certain parts of China. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Aug. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Significant Accounting Policies - Fair values of financial assets of the Company | Schedule of Significant Accounting Policies - Fair values of financial assets of the Company Level 1 Level 2 Level 3 Total Marketable Securities – August 31, 2022 $ 6,196,030 $ 151,824 $ — $ 6,347,854 Marketable Securities – February 28, 2022 $ 5,716,338 $ 151,652 $ — $ 5,867,990 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 6 Months Ended |
Aug. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue Recognition - Sales Revenue by Product Line | Schedule of Revenue Recognition - Sales Revenue by Product Line Three Months Ended August 31, Six Months Ended August 31, 2022 % of total 2021 % of total 2022 % of total 2021 % of total Fluxing Systems $ 399,000 11% $ 117,000 3% $ 707,000 9% $ 476,000 6% Integrated Coating Systems 425,000 11% 565,000 14% 594,000 8% 720,000 9% Multi-Axis Coating Systems 1,491,000 40% 1,891,000 46% 3,470,000 44% 3,970,000 52% OEM Systems 762,000 20% 845,000 21% 1,316,000 17% 1,171,000 15% Other 686,000 18% 652,000 16% 1,728,000 22% 1,378,000 18% TOTAL $ 3,763,000 $ 4,070,000 $ 7,815,000 $ 7,715,000 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Aug. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Schedule of Inventory, Current August 31, February 28, 2022 2022 Raw materials and subassemblies $ 1,560,366 $ 1,439,465 Finished goods 872,011 918,318 Work in process 658,264 343,120 Total 3,090,641 2,700,903 Less: Allowance (316,807 ) (327,661 ) Net inventories $ 2,773,834 $ 2,373,242 |
STOCK BASED COMPENSATION (Table
STOCK BASED COMPENSATION (Tables) | 6 Months Ended |
Aug. 31, 2022 | |
Equity [Abstract] | |
Schedule of weighted-average Black-Scholes assumptions | Schedule of weighted-average Black-Scholes assumptions Six Months Ended Expected Life 5 8 Risk free interest rate 2.82 3.02 Expected volatility 55.02 61.42 Expected dividend yield 0 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Aug. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of basic and diluted earnings per share | Schedule of Computation of basic and diluted earnings per share Six Months Ended Three Months Ended 2022 2021 2022 2021 Numerator for basic and diluted earnings per share $ 467,759 $ 1,610,576 $ 162,123 $ 343,824 Denominator for basic earnings per share – weighted average 15,730,862 15,500,952 15,732,550 15,507,484 Effects of dilutive securities Stock options for employees, directors and outside consultants 39,682 112,978 42,606 94,875 Denominator for diluted earnings per share 15,770,544 15,613,930 15,775,156 15,602,359 Basic Earnings Per Share $ 0.03 $ 0.10 $ 0.01 $ 0.02 Diluted Earnings Per Share $ 0.03 $ 0.10 $ 0.01 $ 0.02 |
CUSTOMER CONCENTRATIONS AND F_2
CUSTOMER CONCENTRATIONS AND FOREIGN SALES (Tables) | 6 Months Ended |
Aug. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
Schedule of Customer Concentrations and Foreign Sales | Schedule of Customer Concentrations and Foreign Sales Six Months Ended Three Months Ended 2022 2021 2022 2021 Asia Pacific (APAC) $ 1,533,000 $ 2,853,000 $ 827,000 $ 1,631,000 Europe, Middle East, Asia (EMEA) 1,826,000 1,436,000 836,000 593,000 Latin America 865,000 645,000 447,000 293,000 $ 4,224,000 $ 4,934,000 $ 2,110,000 $ 2,517,000 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Aug. 31, 2022 | Feb. 28, 2022 |
Marketable Securities | $ 6,347,854 | $ 5,867,990 |
Fair Value, Inputs, Level 1 [Member] | ||
Marketable Securities | 6,196,030 | 5,716,338 |
Fair Value, Inputs, Level 2 [Member] | ||
Marketable Securities | 151,824 | 151,652 |
Fair Value, Inputs, Level 3 [Member] | ||
Marketable Securities |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 6 Months Ended | ||
Aug. 31, 2022 | Aug. 31, 2021 | Feb. 28, 2022 | |
Marketable securities | $ 6,347,854 | $ 5,867,990 | |
Accumulated amortization of patents | 197,585 | $ 192,490 | |
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 | ||
Impairment losses | $ 0 | $ 0 | |
Domestic Patents | |||
Useful life of intangible assets | 17 years | ||
Foreign Patents | |||
Useful life of intangible assets | 12 years | ||
Equipment and Furnishings | |||
Estimated useful lives | three to five years | ||
Depreciation methods | straight-line method |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2022 | Aug. 31, 2021 | Aug. 31, 2022 | Aug. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Sales revenue | $ 3,763,329 | $ 4,070,467 | $ 7,814,864 | $ 7,714,935 |
Fluxing Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales revenue | $ 399,000 | $ 117,000 | $ 707,000 | $ 476,000 |
Sales revenue, percent | 11% | 3% | 9% | 6% |
Integrated Coating Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales revenue | $ 425,000 | $ 565,000 | $ 594,000 | $ 720,000 |
Sales revenue, percent | 11% | 14% | 8% | 9% |
Multi-Axis Coating Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales revenue | $ 1,491,000 | $ 1,891,000 | $ 3,470,000 | $ 3,970,000 |
Sales revenue, percent | 40% | 46% | 44% | 52% |
OEM Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales revenue | $ 762,000 | $ 845,000 | $ 1,316,000 | $ 1,171,000 |
Sales revenue, percent | 20% | 21% | 17% | 15% |
Other Product Line | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales revenue | $ 686,000 | $ 652,000 | $ 1,728,000 | $ 1,378,000 |
Sales revenue, percent | 18% | 16% | 22% | 18% |
Total Product Line | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales revenue | $ 3,763,000 | $ 4,070,000 | $ 7,815,000 | $ 7,715,000 |
REVENUE RECOGNITION (Details Na
REVENUE RECOGNITION (Details Narrative) - USD ($) | 6 Months Ended | |
Aug. 31, 2022 | Feb. 28, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
Cash deposits | $ 1,779,000 | $ 1,168,000 |
Letter of credit | 5,000 | |
Revenue recognized | $ 1,103,000 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Aug. 31, 2022 | Feb. 28, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials and subassemblies | $ 1,560,366 | $ 1,439,465 |
Finished goods | 872,011 | 918,318 |
Work in process | 658,264 | 343,120 |
Total | 3,090,641 | 2,700,903 |
Less: Allowance | (316,807) | (327,661) |
Net inventories | $ 2,773,834 | $ 2,373,242 |
STOCK OPTIONS (Details Narrativ
STOCK OPTIONS (Details Narrative) | 3 Months Ended | 6 Months Ended |
Aug. 31, 2022 shares | Aug. 31, 2022 shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Options exercised | 7,250 | 5,553 |
2013 Stock Incentive Plan ("2013 Plan") | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Stock options shares available for grants | 2,500,000 | 2,500,000 |
Options, expiration period | 10 years | |
Stock options, outstanding | 230,215 | 230,215 |
Stock options, vested | 82,305 | |
2003 Stock Incentive Plan ("2003 Plan") | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Stock options shares available for grants | 1,500,000 | 1,500,000 |
Stock options, outstanding | 5,000 | 5,000 |
STOCK BASED COMPENSATION (Detai
STOCK BASED COMPENSATION (Details) | 6 Months Ended |
Aug. 31, 2022 | |
Expected dividend yield | 0% |
Minimum [Member] | |
Expected life (in years) | 5 years |
Risk free interest rate | 2.82% |
Expected volatility | 55.02% |
Maximum [Member] | |
Expected life (in years) | 8 years |
Risk free interest rate | 3.02% |
Expected volatility | 61.42% |
STOCK BASED COMPENSATION (Det_2
STOCK BASED COMPENSATION (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2022 | Aug. 31, 2021 | Aug. 31, 2022 | Aug. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Options granted | 42,606 | 94,875 | 39,682 | 112,978 |
Compensation related to non-vested options not yet recognized | $ 322,000 | $ 322,000 | ||
Vesteing period | 3 years | |||
Stock-based compensation expense | $ 43,000 | $ 19,000 | $ 112,000 | $ 41,000 |
Share-Based Payment Arrangement, Option [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Options granted | 2,972 | |||
Share-Based Payment Arrangement, Option [Member] | Minimum [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Options, exercisable price | $ 5.50 | |||
Share-Based Payment Arrangement, Option [Member] | Maximum [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Options, exercisable price | $ 5.80 | |||
Share-Based Payment Arrangement, Nonemployee [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Options granted | 16,500 | |||
Options, exercisable price | $ 5.50 | |||
Employees And Directors [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Options, vesting period | 3 years | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Expiration Period | 10 years | |||
Weighted average grant date fair value, per share | $ 3.04 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2022 | Aug. 31, 2021 | Aug. 31, 2022 | Aug. 31, 2021 | |
Earnings Per Share [Abstract] | ||||
Numerator for basic and diluted earnings per share | $ 162,123 | $ 343,824 | $ 467,759 | $ 1,610,576 |
Denominator for basic earnings per share – weighted average | 15,732,550 | 15,507,484 | 15,730,862 | 15,500,952 |
Effects of dilutive securities | ||||
Stock options for employees, directors and outside consultants | 42,606 | 94,875 | 39,682 | 112,978 |
Denominator for diluted earnings per share | 15,775,156 | 15,602,359 | 15,770,544 | 15,613,930 |
Basic Earnings Per Share | $ 0.01 | $ 0.02 | $ 0.03 | $ 0.10 |
Diluted Earnings Per Share | $ 0.01 | $ 0.02 | $ 0.03 | $ 0.10 |
REVOLVING LINE OF CREDIT (Detai
REVOLVING LINE OF CREDIT (Details Narrative) - USD ($) | 6 Months Ended | |
Aug. 31, 2022 | Feb. 28, 2022 | |
Line of Credit Facility [Line Items] | ||
Outstanding borrowings | $ 5,000 | |
Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Revolving line of credit | $ 1,500,000 | |
Interest rate | 5.50% | 3.25% |
Revolving credit line collateral | 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 | $ 5,000 | |
Outstanding borrowings | 0 | |
Unused portion of credit line | $ 1,495,000 |
CUSTOMER CONCENTRATIONS AND F_3
CUSTOMER CONCENTRATIONS AND FOREIGN SALES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2022 | Aug. 31, 2021 | Aug. 31, 2022 | Aug. 31, 2021 | |
Total sales | $ 2,110,000 | $ 2,517,000 | $ 4,224,000 | $ 4,934,000 |
Asia Pacific [Member] | ||||
Total sales | 827,000 | 1,631,000 | 1,533,000 | 2,853,000 |
EMEA [Member] | ||||
Total sales | 836,000 | 593,000 | 1,826,000 | 1,436,000 |
Latin America [Member] | ||||
Total sales | $ 447,000 | $ 293,000 | $ 865,000 | $ 645,000 |
CUSTOMER CONCENTRATIONS AND F_4
CUSTOMER CONCENTRATIONS AND FOREIGN SALES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Aug. 31, 2022 | Aug. 31, 2021 | Aug. 31, 2022 | Aug. 31, 2021 | Feb. 28, 2022 | |
Concentration Risk [Line Items] | |||||
Sales revenue | $ 3,763,329 | $ 4,070,467 | $ 7,814,864 | $ 7,714,935 | |
Revenue Benchmark [Member] | Foreign Customers | |||||
Concentration Risk [Line Items] | |||||
Sales revenue | $ 2,110,000 | $ 2,517,000 | $ 4,224,000 | $ 4,934,000 | |
Sales revenue, percent | 56% | 62% | 54% | 64% | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Seven Customers [Member] | |||||
Concentration Risk [Line Items] | |||||
Outstanding accounts receivables, percent | 17% | ||||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Four Customers [Member] | |||||
Concentration Risk [Line Items] | |||||
Outstanding accounts receivables, percent | 24% | ||||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Five Customers [Member] | |||||
Concentration Risk [Line Items] | |||||
Outstanding accounts receivables, percent | 47% | ||||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Two Customers [Member] | |||||
Concentration Risk [Line Items] | |||||
Outstanding accounts receivables, percent | 26% | ||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Five Customers [Member] | |||||
Concentration Risk [Line Items] | |||||
Outstanding accounts receivables, percent | 40% | ||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Three Customers [Member] | |||||
Concentration Risk [Line Items] | |||||
Outstanding accounts receivables, percent | 41% |