Sono-Tek (SOTK) 10-Q 17 Jan 23 2023 Q3 Quarterly report Financial data

Cover

Cover - shares	9 Months Ended
	Nov. 30, 2022	Jan. 13, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Nov. 30, 2022
Document Fiscal Period Focus	Q3
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		15,742,074

Condensec Consolidated Balance

Condensec Consolidated Balance Sheets - USD ($)	Nov. 30, 2022	Feb. 28, 2022
Current Assets:
Cash and cash equivalents	$ 3,176,037	$ 4,840,558
Marketable securities	8,073,293	5,867,990
Accounts receivable (less allowance of $56,123)	1,441,196	1,092,505
Inventories	3,260,411	2,373,242
Prepaid expenses and other current assets	150,631	323,304
Total current assets	16,101,568	14,497,599
Land	250,000	250,000
Buildings, net	1,579,688	1,621,878
Equipment, furnishings and building improvements, net	1,042,927	939,306
Intangible assets, net	61,867	76,015
Deferred tax asset	447,894	240,736
TOTAL ASSETS	19,483,944	17,625,534
Current Liabilities:
Accounts payable	1,152,679	684,511
Accrued expenses	1,693,311	1,804,028
Customer deposits	1,748,648	1,167,968
Income taxes payable	204,361	58,874
Total current liabilities	4,798,999	3,715,381
Deferred tax liability	197,716	168,840
Total liabilities	4,996,715	3,884,221
Stockholders’ Equity
Common stock, $.01 par value; 25,000,000 shares authorized, 15,742,073 and 15,729,175 shares issued and outstanding, respectively	157,421	157,292
Additional paid-in capital	9,483,417	9,310,287
Accumulated earnings	4,846,391	4,273,734
Total stockholders’ equity	$ 14,487,229	$ 13,741,313

Condensec Consolidated Balanc_2

Condensec Consolidated Balance Sheets (Parenthetical) - USD ($)	Nov. 30, 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	15,742,073	15,729,175
Common stock, shares outstanding	15,742,073	15,729,175

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income - USD ($)	3 Months Ended		9 Months Ended
	Nov. 30, 2022	Nov. 30, 2021	Nov. 30, 2022	Nov. 30, 2021
Income Statement [Abstract]
Net Sales	$ 3,586,165	$ 4,419,401	$ 11,401,029	$ 12,134,336
Cost of Goods Sold	1,761,797	2,260,874	5,574,035	6,077,645
Gross Profit	1,824,368	2,158,527	5,826,994	6,056,691
Operating Expenses
Research and product development costs	520,187	417,300	1,543,310	1,243,513
Marketing and selling expenses	792,710	845,362	2,359,430	2,349,607
General and administrative costs	407,990	405,280	1,262,670	1,181,502
Total Operating Expenses	1,720,887	1,667,942	5,165,410	4,774,622
Operating Income	103,481	490,585	661,584	1,282,069
Interest and Dividend Income	38,803	2,367	64,725	13,367
Net unrealized loss on marketable securities	(9,231)		(40,256)
Paycheck Protection Program Loan Forgiveness				1,005,372
Income Before Income Taxes	133,053	492,952	686,053	2,300,808
Income Tax Expense	28,155	116,783	113,396	314,063
Net Income	$ 104,898	$ 376,169	$ 572,657	$ 1,986,745
Basic Earnings Per Share	$ 0.01	$ 0.02	$ 0.04	$ 0.13
Diluted Earnings Per Share	$ 0.01	$ 0.02	$ 0.04	$ 0.13
Weighted Average Shares - Basic	15,738,180	15,622,721	15,733,284	15,541,247
Weighted Average Shares - Diluted	15,773,370	15,654,936	15,764,351	15,572,424

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Stockholders' Equity - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Ending balance, Shares	15,452,656
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
Net income			1,266,752	1,266,752
Cashless exercise of stock options	$ 499	(499)
Cashless exercise of stock options, Shares	49,901
Ending balance, value at May. 31, 2021	$ 155,026	9,086,132	2,997,913	12,239,071
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
Proceeds from exercise of stock options				8,775
Ending balance, value at Nov. 30, 2021	$ 156,997	9,163,979	3,717,906	13,038,882
Ending balance, Shares	15,502,557
Beginning balance, value at May. 31, 2021	$ 155,026	9,086,132	2,997,913	12,239,071
Beginning balance, Shares at May. 31, 2021	15,502,557
Stock based compensation expense		19,080		19,080
Net income			343,824	343,824
Cashless exercise of stock options	$ 287	(287)
Cashless exercise of stock options, Shares	28,728
Ending balance, value at Aug. 31, 2021	$ 155,313	9,104,925	3,341,737	12,601,975
Ending balance, Shares	15,531,285
Beginning balance, Shares at Aug. 31, 2021	15,531,285
Stock based compensation expense		51,963		51,963
Net income			376,169	376,169
Cashless exercise of stock options	$ 1,609	(1,609)
Cashless exercise of stock options, Shares	160,934
Proceeds from exercise of stock options	$ 75	8,700		8,775
Proceeds from exercise of stock options (shares)	7,500
Ending balance, value at Nov. 30, 2021	$ 156,997	9,163,979	3,717,906	13,038,882
Ending balance, Shares	15,699,719
Ending balance, Shares	15,729,175
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
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
Proceeds from exercise of stock options
Proceeds from exercise of stock options (shares)				12,898
Ending balance, value at Nov. 30, 2022	$ 157,421	9,483,417	4,846,391	$ 14,487,229
Ending balance, Shares	15,729,175
Beginning balance, value at May. 31, 2022	$ 157,292	9,379,656	4,579,370	14,116,318
Beginning balance, Shares at May. 31, 2022	15,729,175
Stock based compensation expense		43,032		43,032
Net income			162,123	162,123
Cashless exercise of stock options	$ 56	(56)
Cashless exercise of stock options, Shares	5,553
Ending balance, value at Aug. 31, 2022	$ 157,348	9,422,632	4,741,493	14,321,473
Ending balance, Shares	15,734,728
Beginning balance, Shares at Aug. 31, 2022	15,734,728
Stock based compensation expense		60,858		60,858
Net income			104,898	104,898
Cashless exercise of stock options	$ 73	(73)
Cashless exercise of stock options, Shares	7,345
Proceeds from exercise of stock options (shares)				7,345
Ending balance, value at Nov. 30, 2022	$ 157,421	$ 9,483,417	$ 4,846,391	$ 14,487,229
Ending balance, Shares	15,742,073

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$ 572,657	$ 1,986,745
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	366,238	333,729
Stock based compensation expense	173,259	92,680
Inventory reserve	(14,854)	(3,919)
Paycheck Protection Program Loan Forgiveness		(1,005,372)
Unrealized loss on marketable securities	40,256
Deferred tax expense	(178,281)	23,718
(Decrease) Increase in:
Accounts receivable	(348,693)	194,342
Inventories	(872,315)	(184,738)
Prepaid expenses and other current assets	172,673	11,460
Accounts payable and accrued expenses	357,451	(431,934)
Customer deposits	580,680	729,130
Income taxes payable	145,487	66,400
Net Cash Provided by Operating Activities	994,558	1,812,241
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment, furnishings and leasehold improvements	(413,521)	(284,798)
(Purchase) Sale of marketable securities - net	(2,245,558)	1,213,508
Net Cash (Used in) Provided by Investing Activities	(2,659,079)	928,710
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options		8,775
Net Cash Provided by Financing Activities		8,775
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(1,664,521)	2,749,726
CASH AND CASH EQUIVALENTS
Beginning of period	4,840,558	4,084,078
End of period	3,176,037	6,833,804
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid
Income Taxes Paid	$ 159,490	$ 224,002

BUSINESS DESCRIPTION

BUSINESS DESCRIPTION	9 Months Ended
	Nov. 30, 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/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	9 Months Ended
	Nov. 30, 2022
Accounting Policies [Abstract]
SIGNIFICANT ACCOUNTING POLICIES	NOTE 2: SIGNIFICANT ACCOUNTING POLICIES Consolidation 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 November 30, 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 – November 30, 2022 $ 7,921,225 $ 152,068 $ — $ 8,073,293 Marketable Securities – February 28, 2022 $ 5,716,338 $ 151,652 $ — $ 5,867,990 Marketable Securities include mutual funds, certificates of deposit and US Treasury securities, totaling $8,073,293 and $5,867,990 that are considered to be highly liquid and easily tradeable as of November 30, 2022 and February 28, 2022, respectively. Mutual funds and 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. Income Taxes Inventories 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 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 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 manufacture electronic parts that we include in our products.

REVENUE RECOGNITION

REVENUE RECOGNITION	9 Months Ended
	Nov. 30, 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 are primarily 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 November 30, 2022, the Company had received $ 1,749,000 5,000 At February 28, 2022, the Company had received $ 1,168,000 1,114,000 The Company’s sales revenue by product line is as follows: Schedule of Revenue Recognition - Sales Revenue by Product Line Three Months Ended Nine Months Ended 2022 % of total 2022 % of total 2021 % of total 2021 % of total Fluxing Systems $ 252,000 7% $ 104,000 2% $ 960,000 8% $ 579,000 5% Integrated Coating Systems 193,000 5% 60,000 1% 787,000 7% 780,000 6% Multi-Axis Coating Systems 1,493,000 42% 2,721,000 62% 4,962,000 44% 6,692,000 55% OEM Systems 503,000 14% 637,000 15% 1,819,000 16% 1,808,000 15% Other 1,145,000 32% 897,000 20% 2,873,000 25% 2,275,000 19% TOTAL $ 3,586,000 $ 4,419,000 $ 11,401,000 $ 12,134,000

INVENTORIES

INVENTORIES	9 Months Ended
	Nov. 30, 2022
Inventory Disclosure [Abstract]
INVENTORIES	NOTE 4: INVENTORIES Inventories consist of the following: Schedule of Inventory, Current November 30, February 28, 2022 2022 Raw materials and subassemblies $ 1,875,277 $ 1,250,589 Finished goods 648,725 779,533 Work in process 736,409 343,120 Net inventories $ 3,260,411 $ 2,373,242 The Company maintains an allowance for slow moving inventory for raw materials and finished goods. The recorded allowances at November 30, 2022 and February 28, 2022, totaled $ 312,807 327,661

STOCK OPTIONS

STOCK OPTIONS	9 Months Ended
	Nov. 30, 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 2,500,000 245,745 83,816 During the three months ended November 30, 2022, 9,723 7,345 During the nine months ended November 30, 2022, 16,973 12,898

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION	9 Months Ended
	Nov. 30, 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 nine months ended November 30, 2022, the Company granted options to acquire 23,225 5.50 5.96 16,500 5.50 three ten 3.34 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 Nine Months Ended Expected Life 5 8 Risk free interest rate 2.82 3.93 Expected volatility 55.02 62.01 Expected dividend yield 0 Total compensation related to non-vested options not yet recognized as of November 30, 2022 was $ 337,000 three For the three and nine months ended November 30, 2022 and 2021, net income and earnings per share reflect the actual deduction for stock-based compensation expense. For the three months ended November 30, 2022 and 2021, the Company recognized approximately $ 61,000 52,000 173,000 93,000

EARNINGS PER SHARE

EARNINGS PER SHARE	9 Months Ended
	Nov. 30, 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 Nine Months Ended Three Months Ended 2022 2021 2022 2021 Numerator for basic and diluted earnings per share $ 572,657 $ 1,986,745 $ 104,898 $ 376,169 Denominator for basic earnings per share – weighted average 15,733,284 15,541,247 15,738,180 15,622,721 Effects of dilutive securities Stock options for employees and directors 31,067 31,177 35,190 32,215 Denominator for diluted earnings per share 15,764,351 15,572,424 15,773,370 15,654,936 Basic earnings per share $ 0.04 $ 0.13 $ 0.01 $ 0.02 Diluted earnings per share $ 0.04 $ 0.13 $ 0.01 $ 0.02

REVOLVING LINE OF CREDIT

REVOLVING LINE OF CREDIT	9 Months Ended
	Nov. 30, 2022
Debt Disclosure [Abstract]
REVOLVING LINE OF CREDIT	NOTE 8: REVOLVING LINE OF CREDIT The Company has a $ 1,500,000 7.00 3.25 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 November 30, 2022, $ 5,000 no 1,495,000

CUSTOMER CONCENTRATIONS AND FOR

CUSTOMER CONCENTRATIONS AND FOREIGN SALES	9 Months Ended
	Nov. 30, 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 Nine Months Ended Three Months Ended 2022 2021 2022 2021 Asia Pacific (APAC) $ 2,367,000 $ 4,754,000 $ 834,000 $ 1,901,000 Europe, Middle East, Asia (EMEA) 2,557,000 2,723,000 731,000 1,287,000 Latin America 1,301,000 888,000 436,000 243,000 $ 6,225,000 $ 8,365,000 $ 2,001,000 $ 3,431,000 In the first nine months of fiscal 2023 and fiscal 2022, sales to foreign customers accounted for approximately $ 6,225,000 8,365,000 55 69 During the third quarter of fiscal 2023 and fiscal 2022, sales to foreign customers accounted for approximately $ 2,001,000 3,431,000 56 78 The Company had two customers which accounted for 14 21 41 The Company had three customers which accounted for 27 48 41

SIGNIFICANT ACCOUNTING POLICI_2

SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Nov. 30, 2022
Accounting Policies [Abstract]
Consolidation	Consolidation
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 November 30, 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 – November 30, 2022 $ 7,921,225 $ 152,068 $ — $ 8,073,293 Marketable Securities – February 28, 2022 $ 5,716,338 $ 151,652 $ — $ 5,867,990 Marketable Securities include mutual funds, certificates of deposit and US Treasury securities, totaling $8,073,293 and $5,867,990 that are considered to be highly liquid and easily tradeable as of November 30, 2022 and February 28, 2022, respectively. Mutual funds and 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.
Income Taxes	Income Taxes
Inventories	Inventories
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
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
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 manufacture electronic parts that we include in our products.

SIGNIFICANT ACCOUNTING POLICI_3

SIGNIFICANT ACCOUNTING POLICIES (Tables)	9 Months Ended
	Nov. 30, 2022
Accounting Policies [Abstract]
Schedule of 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 November 30, 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 – November 30, 2022 $ 7,921,225 $ 152,068 $ — $ 8,073,293 Marketable Securities – February 28, 2022 $ 5,716,338 $ 151,652 $ — $ 5,867,990

REVENUE RECOGNITION (Tables)

REVENUE RECOGNITION (Tables)	9 Months Ended
	Nov. 30, 2022
Revenue from Contract with Customer [Abstract]
Schedule of Revenue Recognition - Sales Revenue by Product Line	The Company’s sales revenue by product line is as follows: Schedule of Revenue Recognition - Sales Revenue by Product Line Three Months Ended Nine Months Ended 2022 % of total 2022 % of total 2021 % of total 2021 % of total Fluxing Systems $ 252,000 7% $ 104,000 2% $ 960,000 8% $ 579,000 5% Integrated Coating Systems 193,000 5% 60,000 1% 787,000 7% 780,000 6% Multi-Axis Coating Systems 1,493,000 42% 2,721,000 62% 4,962,000 44% 6,692,000 55% OEM Systems 503,000 14% 637,000 15% 1,819,000 16% 1,808,000 15% Other 1,145,000 32% 897,000 20% 2,873,000 25% 2,275,000 19% TOTAL $ 3,586,000 $ 4,419,000 $ 11,401,000 $ 12,134,000

INVENTORIES (Tables)

INVENTORIES (Tables)	9 Months Ended
	Nov. 30, 2022
Inventory Disclosure [Abstract]
Schedule of Inventory, Current	Inventories consist of the following: Schedule of Inventory, Current November 30, February 28, 2022 2022 Raw materials and subassemblies $ 1,875,277 $ 1,250,589 Finished goods 648,725 779,533 Work in process 736,409 343,120 Net inventories $ 3,260,411 $ 2,373,242

STOCK-BASED COMPENSATION (Table

STOCK-BASED COMPENSATION (Tables)	9 Months Ended
	Nov. 30, 2022
Equity [Abstract]
Schedule of weighted-average Black-Scholes assumptions	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 Nine Months Ended Expected Life 5 8 Risk free interest rate 2.82 3.93 Expected volatility 55.02 62.01 Expected dividend yield 0

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	9 Months Ended
	Nov. 30, 2022
Earnings Per Share [Abstract]
Schedule of Computation of basic and diluted 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 Nine Months Ended Three Months Ended 2022 2021 2022 2021 Numerator for basic and diluted earnings per share $ 572,657 $ 1,986,745 $ 104,898 $ 376,169 Denominator for basic earnings per share – weighted average 15,733,284 15,541,247 15,738,180 15,622,721 Effects of dilutive securities Stock options for employees and directors 31,067 31,177 35,190 32,215 Denominator for diluted earnings per share 15,764,351 15,572,424 15,773,370 15,654,936 Basic earnings per share $ 0.04 $ 0.13 $ 0.01 $ 0.02 Diluted earnings per share $ 0.04 $ 0.13 $ 0.01 $ 0.02

CUSTOMER CONCENTRATIONS AND F_2

CUSTOMER CONCENTRATIONS AND FOREIGN SALES (Tables)	9 Months Ended
	Nov. 30, 2022
Risks and Uncertainties [Abstract]
Schedule of 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 Nine Months Ended Three Months Ended 2022 2021 2022 2021 Asia Pacific (APAC) $ 2,367,000 $ 4,754,000 $ 834,000 $ 1,901,000 Europe, Middle East, Asia (EMEA) 2,557,000 2,723,000 731,000 1,287,000 Latin America 1,301,000 888,000 436,000 243,000 $ 6,225,000 $ 8,365,000 $ 2,001,000 $ 3,431,000

Schedule of Significant Account

Schedule of Significant Accounting Policies - Fair values of financial assets of the Company (Details) - USD ($)	Nov. 30, 2022	Feb. 28, 2022
Marketable Securities	$ 8,073,293	$ 5,867,990
Fair Value, Inputs, Level 1 [Member]
Marketable Securities	7,921,225	5,716,338
Fair Value, Inputs, Level 2 [Member]
Marketable Securities	152,068	151,652
Fair Value, Inputs, Level 3 [Member]
Marketable Securities

Schedule of Revenue Recognition

Schedule of Revenue Recognition - Sales Revenue by Product Line (Details) - USD ($)	3 Months Ended		9 Months Ended
	Nov. 30, 2022	Nov. 30, 2021	Nov. 30, 2022	Nov. 30, 2021
Disaggregation of Revenue [Line Items]
Sales revenue	$ 3,586,165	$ 4,419,401	$ 11,401,029	$ 12,134,336
Fluxing Systems
Disaggregation of Revenue [Line Items]
Sales revenue	$ 252,000	$ 104,000	$ 960,000	$ 579,000
[custom:SalesRevenuePercent]	7%	2%	8%	5%
Integrated Coating Systems
Disaggregation of Revenue [Line Items]
Sales revenue	$ 193,000	$ 60,000	$ 787,000	$ 780,000
[custom:SalesRevenuePercent]	5%	1%	7%	6%
Multi-Axis Coating Systems
Disaggregation of Revenue [Line Items]
Sales revenue	$ 1,493,000	$ 2,721,000	$ 4,962,000	$ 6,692,000
[custom:SalesRevenuePercent]	42%	62%	44%	55%
OEM Systems
Disaggregation of Revenue [Line Items]
Sales revenue	$ 503,000	$ 637,000	$ 1,819,000	$ 1,808,000
[custom:SalesRevenuePercent]	14%	15%	16%	15%
Other Product Line
Disaggregation of Revenue [Line Items]
Sales revenue	$ 1,145,000	$ 897,000	$ 2,873,000	$ 2,275,000
[custom:SalesRevenuePercent]	32%	20%	25%	19%
Total Product Line
Disaggregation of Revenue [Line Items]
Sales revenue	$ 3,586,000	$ 4,419,000	$ 11,401,000	$ 12,134,000

REVENUE RECOGNITION (Details Na

REVENUE RECOGNITION (Details Narrative) - USD ($)	9 Months Ended
	Nov. 30, 2022	Feb. 28, 2022
Revenue from Contract with Customer [Abstract]
Cash deposits	$ 1,749,000	$ 1,168,000
Letter of credit	5,000
Revenue recognized	$ 1,114,000

Schedule of Inventory, Current

Schedule of Inventory, Current (Details) - USD ($)	Nov. 30, 2022	Feb. 28, 2022
Inventory Disclosure [Abstract]
Raw materials and subassemblies	$ 1,875,277	$ 1,250,589
Finished goods	648,725	779,533
Work in process	736,409	343,120
Net inventories	$ 3,260,411	$ 2,373,242

INVENTORIES (Details Narrative)

INVENTORIES (Details Narrative) - USD ($)	Nov. 30, 2022	Feb. 28, 2022
Inventory Disclosure [Abstract]
Allowance for slow moving inventory	$ 312,807	$ 327,661

STOCK OPTIONS (Details Narrativ

STOCK OPTIONS (Details Narrative) - shares	3 Months Ended		9 Months Ended
	Nov. 30, 2022	Nov. 30, 2021	Nov. 30, 2022
Accumulated Other Comprehensive Income (Loss) [Line Items]
Options exercised	7,345		12,898
Common Stock [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Options exercised, net cashless basis	9,723		16,973
Options exercised		7,500
2013 Stock Incentive Plan ("2013 Plan")
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stock options shares available for grants	2,500,000		2,500,000
Stock options, outstanding	245,745		245,745
Stock options, vested			83,816

Schedule of weighted-average Bl

Schedule of weighted-average Black-Scholes assumptions (Details)	9 Months Ended
	Nov. 30, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Risk free interest rate, minimum	2.82%
Risk free interest rate, maximum	3.93%
Expected volatility, minimum	55.02%
Expected volatility, maximum	62.01%
Expected dividend yield	0%
Share-Based Payment Arrangement, Option [Member] | Minimum [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Expected life (in years)	5 years
Share-Based Payment Arrangement, Option [Member] | Maximum [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Expected life (in years)	8 years

STOCK-BASED COMPENSATION (Detai

STOCK-BASED COMPENSATION (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Nov. 30, 2022	Nov. 30, 2021	Nov. 30, 2022	Nov. 30, 2021
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options granted	35,190	32,215	31,067	31,177
Compensation expense yet to be recognized	$ 337,000		$ 337,000
Period for compensation expense to be recognized				3 years
Stock-based compensation expense	$ 61,000	$ 52,000	$ 173,000	$ 93,000
Share-Based Payment Arrangement, Option [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options granted			23,225
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			$ 5.96
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
Options, expiration period			10 years
Weighted average grant date fair value, per share			$ 3.34

Schedule of Computation of basi

Schedule of Computation of basic and diluted earnings per share (Details) - USD ($)	3 Months Ended		9 Months Ended
	Nov. 30, 2022	Nov. 30, 2021	Nov. 30, 2022	Nov. 30, 2021
Earnings Per Share [Abstract]
Numerator for basic and diluted earnings per share	$ 104,898	$ 376,169	$ 572,657	$ 1,986,745
Denominator for basic earnings per share – weighted average	15,738,180	15,622,721	15,733,284	15,541,247
Effects of dilutive securities
Stock options for employees and directors	35,190	32,215	31,067	31,177
Denominator for diluted earnings per share	15,773,370	15,654,936	15,764,351	15,572,424
Basic earnings per share	$ 0.01	$ 0.02	$ 0.04	$ 0.13
Diluted earnings per share	$ 0.01	$ 0.02	$ 0.04	$ 0.13

REVOLVING LINE OF CREDIT (Detai

REVOLVING LINE OF CREDIT (Details Narrative) - USD ($)	9 Months Ended	12 Months Ended
	Nov. 30, 2022	Feb. 28, 2022
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Revolving line of credit	$ 1,500,000	$ 1,500,000
Interest rate	7%	3.25%
Revolving credit line 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.
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 under the line of credit	0
Unused portion of credit line	$ 1,495,000

Schedule of Customer Concentrat

Schedule of Customer Concentrations and Foreign Sales (Details) - USD ($)	3 Months Ended		9 Months Ended
	Nov. 30, 2021	Nov. 30, 2020	Nov. 30, 2021	Nov. 30, 2020
Total sales	$ 2,001,000	$ 3,431,000	$ 6,225,000	$ 8,365,000
Asia Pacific [Member]
Total sales	834,000	1,901,000	2,367,000	4,754,000
EMEA [Member]
Total sales	731,000	1,287,000	2,557,000	2,723,000
Latin America [Member]
Total sales	$ 436,000	$ 243,000	$ 1,301,000	$ 888,000

CUSTOMER CONCENTRATIONS AND F_3

CUSTOMER CONCENTRATIONS AND FOREIGN SALES (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Nov. 30, 2022	Nov. 30, 2021	Nov. 30, 2022	Nov. 30, 2021	Feb. 28, 2022
Concentration Risk [Line Items]
Sales revenue	$ 3,586,165	$ 4,419,401	$ 11,401,029	$ 12,134,336
Foreign Customers | Revenue Benchmark [Member]
Concentration Risk [Line Items]
Sales revenue	$ 2,001,000	$ 3,431,000	$ 6,225,000	$ 8,365,000
Sales revenue, percent	56%	78%	55%	69%
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Two Customers [Member]
Concentration Risk [Line Items]
Concentration percentage	21%		14%
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Threer Customers [Member]
Concentration Risk [Line Items]
Concentration percentage			27%
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Six Customers [Member]
Concentration Risk [Line Items]
Concentration percentage	48%
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Five Customers [Member]
Concentration Risk [Line Items]
Concentration percentage			41%
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Three Customers [Member]
Concentration Risk [Line Items]
Concentration percentage					41%