Sono-Tek (SOTK) 10-Q 12 Oct 23 2024 Q2 Quarterly report Financial data

Cover

Cover - shares	6 Months Ended
	Aug. 31, 2023	Oct. 11, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Aug. 31, 2023
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2024
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		15,743,483

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Aug. 31, 2023	Feb. 28, 2023
Current Assets:
Cash and cash equivalents	$ 3,454,257	$ 3,354,601
Marketable securities	8,862,146	8,090,000
Accounts receivable (less allowance of $12,225)	1,433,677	1,633,866
Inventories	4,008,271	3,242,909
Prepaid expenses and other current assets	132,094	254,046
Total current assets	17,890,445	16,575,422
Land	250,000	250,000
Buildings, equipment, furnishings and leasehold improvements, net	2,593,229	2,624,996
Intangible assets, net	55,983	57,202
Deferred tax asset	855,396	667,098
TOTAL ASSETS	21,645,053	20,174,718
Current Liabilities:
Accounts payable	1,070,551	810,863
Accrued expenses	1,392,191	1,427,446
Customer deposits	3,394,492	2,838,165
Income taxes payable	464,493	381,421
Total current liabilities	6,321,727	5,457,895
Deferred tax liability		82,865
Total liabilities	6,321,727	5,540,760
Stockholders’ Equity
Common stock, $.01 par value; 25,000,000 shares authorized, 15,743,483 and 15,742,073 shares issued and outstanding as of August 31, 2023 and February 28 2023, respectively	157,435	157,421
Additional paid-in capital	9,661,573	9,566,898
Accumulated earnings	5,504,318	4,909,639
Total stockholders’ equity	15,323,326	14,633,958
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 21,645,053	$ 20,174,718

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($)	Aug. 31, 2023	Feb. 28, 2023
Statement of Financial Position [Abstract]
Allowance for doubtful receivables	$ 12,225	$ 12,225
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	25,000,000	25,000,000
Common stock, shares issued	15,743,483	15,742,073
Common stock, shares outstanding	15,743,483	15,742,073

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Aug. 31, 2023	Aug. 31, 2022	Aug. 31, 2023	Aug. 31, 2022
Income Statement [Abstract]
Net Sales	$ 5,639,117	$ 3,763,329	$ 9,242,135	$ 7,814,864
Cost of Goods Sold	2,838,549	1,867,716	4,664,335	3,812,238
Gross Profit	2,800,568	1,895,613	4,577,800	4,002,626
Operating Expenses
Research and product development costs	789,261	506,490	1,445,699	1,023,123
Marketing and selling expenses	944,526	776,858	1,745,310	1,566,720
General and administrative costs	500,923	434,687	912,549	854,680
Total Operating Expenses	2,234,710	1,718,035	4,103,558	3,444,523
Operating Income	565,858	177,578	474,242	558,103
Interest and Dividend Income	124,293	18,507	230,283	25,922
Net unrealized gain/(loss) on marketable securities	(6,803)	(19,172)	10,855	(31,025)
Income Before Income Taxes	683,348	176,913	715,380	553,000
Income Tax Expense	142,075	14,790	120,701	85,241
Net Income	$ 541,273	$ 162,123	$ 594,679	$ 467,759
Basic Earnings Per Share	$ 0.03	$ 0.01	$ 0.04	$ 0.03
Diluted Earnings Per Share	$ 0.03	$ 0.01	$ 0.04	$ 0.03
Weighted Average Shares - Basic	15,743,069	15,732,550	15,742,571	15,730,862
Weighted Average Shares - Diluted	15,773,665	15,775,156	15,775,032	15,770,544

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, 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
Beginning balance, value at Feb. 28, 2023	$ 157,421	9,566,898	4,909,639	14,633,958
Beginning balance, Shares at Feb. 28, 2023	15,742,073
Stock based compensation expense		48,295		48,295
Net Income			53,406	53,406
Ending balance, value at May. 31, 2023	$ 157,421	9,615,193	4,963,045	14,735,659
Ending balance, Shares at May. 31, 2023	15,742,073
Stock based compensation expense		46,394		46,394
Cashless exercise of stock options	$ 14	(14)
Cashless exercise of stock options, shares	1,410
Net Income			541,273	541,273
Ending balance, value at Aug. 31, 2023	$ 157,435	$ 9,661,573	$ 5,504,318	$ 15,323,326
Ending balance, Shares at Aug. 31, 2023	15,743,483

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Aug. 31, 2023	Aug. 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$ 594,679	$ 467,759
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	278,823	234,771
Stock based compensation expense	94,689	112,401
Inventory reserve	21,618	(10,854)
Unrealized (gain) loss on marketable securities	(10,855)	31,025
Deferred tax expense	(271,163)	7,846
Decrease (Increase) in:
Accounts receivable	200,189	(885,005)
Inventories	(786,980)	(389,738)
Prepaid expenses and other current assets	121,952	61,551
(Decrease) Increase in:
Accounts payable	259,687	283,453
Accrued expenses	(35,254)	(304,066)
Customer deposits	556,327	610,784
Income taxes payable	83,072	3,702
Net Cash Provided by Operating Activities	1,106,784	223,629
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment, furnishings and leasehold improvements	(245,837)	(244,237)
Sale of marketable securities	8,772,633	5,561,776
Purchase of marketable securities	(9,533,924)	(6,072,669)
Net Cash (Used in) Investing Activities	(1,007,128)	(755,130)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	99,656	(531,501)
CASH AND CASH EQUIVALENTS
Beginning of period	3,354,601	4,840,558
End of period	3,454,257	4,309,057
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid
Income Taxes Paid	$ 308,942	$ 158,693

BUSINESS DESCRIPTION

BUSINESS DESCRIPTION	6 Months Ended
	Aug. 31, 2023
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, 2023 (“fiscal year 2023”) contained in the Company’s 2023 Annual Report on Form 10-K filed with the SEC on May 25, 2023 . The Company’s current fiscal year ends on February 29, 2024 (“fiscal 2024”).

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Aug. 31, 2023
Accounting Policies [Abstract]
SIGNIFICANT ACCOUNTING POLICIES	NOTE 2: SIGNIFICANT ACCOUNTING POLICIES Cash and Cash Equivalents - 3,031,739 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 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, 2023 and February 28, 2023, 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, 2023 $ 7,798,000 $ 1,064,000 $ — $ 8,862,000 Marketable Securities – February 28, 2023 $ 7,361,000 $ 729,000 $ — $ 8,090,000 Marketable Securities include certificates of deposit and US Treasury securities that are considered to be highly liquid and easily tradeable totaling $ 8,862,000 8,090,000 Income Taxes no Inventories - Land and Buildings At August 31, 2023 and February 28, 2023, the Company had land stated at cost of $ 250,000 At August 31, 2023 and February 28, 2023, the Company had buildings, equipment, furnishings and leasehold improvements totaling, $ 2,593,229 2,624,996 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 The Company has encountered challenges in procuring supplies 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. The Company experienced lengthened lead times throughout its supply chain as a result of supply chain constraints and material shortages that have occurred through fiscal year 2023.

REVENUE RECOGNITION

REVENUE RECOGNITION	6 Months Ended
	Aug. 31, 2023
Revenue from Contract with Customer [Abstract]
REVENUE RECOGNITION	NOTE 3: REVENUE RECOGNITION 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, 2023, the Company had received approximately $ 3,394,000 At February 28, 2023, the Company had received approximately $ 2,838,000 2,368,000 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, 2023 % of total 2022 % of total 2023 % of total 2022 % of total Fluxing Systems $ 204,000 4% $ 399,000 11% $ 440,000 5% $ 707,000 9% Integrated Coating Systems 853,000 15% 425,000 11% 1,162,000 12% 594,000 8% Multi-Axis Coating Systems 2,923,000 52% 1,491,000 40% 4,686,000 51% 3,470,000 44% OEM Systems 535,000 9% 762,000 20% 810,000 9% 1,316,000 17% Spare Parts, Services and Other 1,124,000 20% 686,000 18% 2,144,000 23% 1,728,000 22% TOTAL $ 5,639,000 $ 3,763,000 $ 9,242,000 $ 7,815,000

INVENTORIES

INVENTORIES	6 Months Ended
	Aug. 31, 2023
Inventory Disclosure [Abstract]
INVENTORIES	NOTE 4: INVENTORIES Inventories consist of the following: Schedule of Inventory, Current August 31, February 28, 2023 2023 Raw materials and subassemblies $ 1,879,394 $ 1,868,689 Finished goods 1,088,848 613,915 Work in process 1,040,029 760,305 Total $ 4,008,271 $ 3,242,909 The Company maintains an allowance for slow moving inventory for raw materials and finished goods. The recorded allowances at August 31, 2023 and February 28, 2023, totaled $ 354,143 332,525

STOCK BASED COMPENSATION

STOCK BASED COMPENSATION	6 Months Ended
	Aug. 31, 2023
Equity [Abstract]
STOCK BASED COMPENSATION	NOTE 5: STOCK BASED COMPENSATION Stock Options - 2,500,000 247,483 158,520 In August 2023, the Company’s shareholders approved the Company’s 2023 Stock Incentive Plan (the “2023 Plan”) under which 2,500,000 23,250 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, 2023, the Company granted options to acquire 9,094 4.79 5.60 18,380 4.79 3 10 2.91 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% 4.39% Expected volatility 55.02% 62.48% Expected dividend yield 0% For the three and six months ended August 31, 2023 and 2022, net income and earnings per share reflect the actual deduction for stock-based compensation expense. For the three months ended August 31, 2023 and 2022, the Company recognized approximately $ 46,000 43,000 95,000 112,000

EARNINGS PER SHARE

EARNINGS PER SHARE	6 Months Ended
	Aug. 31, 2023
Earnings Per Share [Abstract]
EARNINGS PER SHARE	NOTE 6: 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 2023 2022 2023 2022 Numerator for basic and diluted earnings per share $ 594,679 $ 467,759 $ 541,273 $ 162,123 Denominator for basic earnings per share – weighted average 15,742,571 15,730,862 15,743,069 15,732,550 Effects of dilutive securities Stock options for employees, directors and outside consultants 32,461 39,682 30,596 42,606 Denominator for diluted earnings per share 15,775,032 15,770,544 15,773,665 15,775,156 Basic Earnings Per Share $ 0.04 $ 0.03 $ 0.03 $ 0.01 Diluted Earnings Per Share $ 0.04 $ 0.03 $ 0.03 $ 0.01

REVOLVING LINE OF CREDIT

REVOLVING LINE OF CREDIT	6 Months Ended
	Aug. 31, 2023
Debt Disclosure [Abstract]
REVOLVING LINE OF CREDIT	NOTE 7: REVOLVING LINE OF CREDIT The Company has a $ 1,500,000 8.50% 7.75% 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 August 31, 2023, there were no 1,500,000

CUSTOMER CONCENTRATIONS AND FOR

CUSTOMER CONCENTRATIONS AND FOREIGN SALES	6 Months Ended
	Aug. 31, 2023
Risks and Uncertainties [Abstract]
CUSTOMER CONCENTRATIONS AND FOREIGN SALES	NOTE 8: 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 2023 2022 2023 2022 Asia Pacific (APAC) $ 1,109,000 $ 1,533,000 $ 538,000 $ 827,000 Europe, Middle East, Asia (EMEA) 1,581,000 1,826,000 1,155,000 836,000 Latin America 985,000 865,000 747,000 447,000 $ 3,675,000 $ 4,224,000 $ 2,440,000 $ 2,110,000 During the first half of fiscal 2024 and fiscal 2023, sales to foreign customers accounted for approximately $ 3,675,000 4,224,000 40% 54% During the second quarter of fiscal 2024 and fiscal 2023, sales to foreign customers accounted for approximately $ 2,440,000 2,110,000 43% 56% The Company had one customer which accounted for 14% 20% 39% The Company had three customers which accounted for 17% 24% 44%

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Aug. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 9: COMMITMENTS AND CONTINGENCIES The Company did not have any material commitments or contingencies as of August 31, 2023. The Company is subject, from time to time, to claims by third parties under various legal disputes. The defense of such claims, or any adverse outcome relating to any such claims, could have a material adverse effect on the Company’s liquidity, financial condition, and cash flows. As of August 31, 2023, the Company did not have any pending legal actions.

SIGNIFICANT ACCOUNTING POLICI_2

SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Aug. 31, 2023
Accounting Policies [Abstract]
Cash and Cash Equivalents	Cash and Cash Equivalents - 3,031,739
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 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, 2023 and February 28, 2023, 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, 2023 $ 7,798,000 $ 1,064,000 $ — $ 8,862,000 Marketable Securities – February 28, 2023 $ 7,361,000 $ 729,000 $ — $ 8,090,000 Marketable Securities include certificates of deposit and US Treasury securities that are considered to be highly liquid and easily tradeable totaling $ 8,862,000 8,090,000
Income Taxes	Income Taxes no
Inventories	Inventories -
Land and Buildings	Land and Buildings At August 31, 2023 and February 28, 2023, the Company had land stated at cost of $ 250,000 At August 31, 2023 and February 28, 2023, the Company had buildings, equipment, furnishings and leasehold improvements totaling, $ 2,593,229 2,624,996
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 The Company has encountered challenges in procuring supplies 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. The Company experienced lengthened lead times throughout its supply chain as a result of supply chain constraints and material shortages that have occurred through fiscal year 2023.

SIGNIFICANT ACCOUNTING POLICI_3

SIGNIFICANT ACCOUNTING POLICIES (Tables)	6 Months Ended
	Aug. 31, 2023
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 August 31, 2023 and February 28, 2023, 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, 2023 $ 7,798,000 $ 1,064,000 $ — $ 8,862,000 Marketable Securities – February 28, 2023 $ 7,361,000 $ 729,000 $ — $ 8,090,000

REVENUE RECOGNITION (Tables)

REVENUE RECOGNITION (Tables)	6 Months Ended
	Aug. 31, 2023
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 August 31, Six Months Ended August 31, 2023 % of total 2022 % of total 2023 % of total 2022 % of total Fluxing Systems $ 204,000 4% $ 399,000 11% $ 440,000 5% $ 707,000 9% Integrated Coating Systems 853,000 15% 425,000 11% 1,162,000 12% 594,000 8% Multi-Axis Coating Systems 2,923,000 52% 1,491,000 40% 4,686,000 51% 3,470,000 44% OEM Systems 535,000 9% 762,000 20% 810,000 9% 1,316,000 17% Spare Parts, Services and Other 1,124,000 20% 686,000 18% 2,144,000 23% 1,728,000 22% TOTAL $ 5,639,000 $ 3,763,000 $ 9,242,000 $ 7,815,000

INVENTORIES (Tables)

INVENTORIES (Tables)	6 Months Ended
	Aug. 31, 2023
Inventory Disclosure [Abstract]
Schedule of Inventory, Current	Inventories consist of the following: Schedule of Inventory, Current August 31, February 28, 2023 2023 Raw materials and subassemblies $ 1,879,394 $ 1,868,689 Finished goods 1,088,848 613,915 Work in process 1,040,029 760,305 Total $ 4,008,271 $ 3,242,909

STOCK BASED COMPENSATION (Table

STOCK BASED COMPENSATION (Tables)	6 Months Ended
	Aug. 31, 2023
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 Six Months Ended Expected Life 5 8 Risk free interest rate 2.82% 4.39% Expected volatility 55.02% 62.48% Expected dividend yield 0%

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	6 Months Ended
	Aug. 31, 2023
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 Six Months Ended Three Months Ended 2023 2022 2023 2022 Numerator for basic and diluted earnings per share $ 594,679 $ 467,759 $ 541,273 $ 162,123 Denominator for basic earnings per share – weighted average 15,742,571 15,730,862 15,743,069 15,732,550 Effects of dilutive securities Stock options for employees, directors and outside consultants 32,461 39,682 30,596 42,606 Denominator for diluted earnings per share 15,775,032 15,770,544 15,773,665 15,775,156 Basic Earnings Per Share $ 0.04 $ 0.03 $ 0.03 $ 0.01 Diluted Earnings Per Share $ 0.04 $ 0.03 $ 0.03 $ 0.01

CUSTOMER CONCENTRATIONS AND F_2

CUSTOMER CONCENTRATIONS AND FOREIGN SALES (Tables)	6 Months Ended
	Aug. 31, 2023
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 Six Months Ended Three Months Ended 2023 2022 2023 2022 Asia Pacific (APAC) $ 1,109,000 $ 1,533,000 $ 538,000 $ 827,000 Europe, Middle East, Asia (EMEA) 1,581,000 1,826,000 1,155,000 836,000 Latin America 985,000 865,000 747,000 447,000 $ 3,675,000 $ 4,224,000 $ 2,440,000 $ 2,110,000

Schedule of Significant Account

Schedule of Significant Accounting Policies - Fair values of financial assets of the Company (Details) - USD ($)	Aug. 31, 2023	Feb. 28, 2023
Marketable Securities	$ 8,862,000	$ 8,090,000
Fair Value, Inputs, Level 1 [Member]
Marketable Securities	7,798,000	7,361,000
Fair Value, Inputs, Level 2 [Member]
Marketable Securities	1,064,000	729,000
Fair Value, Inputs, Level 3 [Member]
Marketable Securities	$ 0	$ 0

SIGNIFICANT ACCOUNTING POLICI_4

SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	Aug. 31, 2023	Feb. 28, 2023
Accounting Policies [Abstract]
Bank deposits exceeding the FDIC insured limit	$ 3,031,739
Marketable Securities	8,862,000	$ 8,090,000
Accruals for uncertain tax positions	0	0
Land	250,000	250,000
Buildings, equipment, furnishings and leasehold improvements, net	$ 2,593,229	$ 2,624,996

Schedule of Revenue Recognition

Schedule of Revenue Recognition - Sales Revenue by Product Line (Details) - USD ($)	3 Months Ended		6 Months Ended
	Aug. 31, 2023	Aug. 31, 2022	Aug. 31, 2023	Aug. 31, 2022
Disaggregation of Revenue [Line Items]
Sales revenue	$ 5,639,117	$ 3,763,329	$ 9,242,135	$ 7,814,864
Fluxing Systems [Member]
Disaggregation of Revenue [Line Items]
Sales revenue	$ 204,000	$ 399,000	$ 440,000	$ 707,000
Sales revenue, percent	4%	11%	5%	9%
Integrated Coating Systems [Member]
Disaggregation of Revenue [Line Items]
Sales revenue	$ 853,000	$ 425,000	$ 1,162,000	$ 594,000
Sales revenue, percent	15%	11%	12%	8%
Multi-Axis Coating Systems [Member]
Disaggregation of Revenue [Line Items]
Sales revenue	$ 2,923,000	$ 1,491,000	$ 4,686,000	$ 3,470,000
Sales revenue, percent	52%	40%	51%	44%
OEM Systems [Member]
Disaggregation of Revenue [Line Items]
Sales revenue	$ 535,000	$ 762,000	$ 810,000	$ 1,316,000
Sales revenue, percent	9%	20%	9%	17%
SpareParts, Services and Other [Member]
Disaggregation of Revenue [Line Items]
Sales revenue	$ 1,124,000	$ 686,000	$ 2,144,000	$ 1,728,000
Sales revenue, percent	20%	18%	23%	22%
Total [Member]
Disaggregation of Revenue [Line Items]
Sales revenue	$ 5,639,000	$ 3,763,000	$ 9,242,000	$ 7,815,000

REVENUE RECOGNITION (Details Na

REVENUE RECOGNITION (Details Narrative) - USD ($)	6 Months Ended
	Aug. 31, 2023	Feb. 28, 2023
Revenue from Contract with Customer [Abstract]
Cash deposits	$ 3,394,000	$ 2,838,000
Revenue recognized	$ 2,368,000

Schedule of Inventory, Current

Schedule of Inventory, Current (Details) - USD ($)	Aug. 31, 2023	Feb. 28, 2023
Inventory Disclosure [Abstract]
Raw materials and subassemblies	$ 1,879,394	$ 1,868,689
Finished goods	1,088,848	613,915
Work in process	1,040,029	760,305
Total	$ 4,008,271	$ 3,242,909

INVENTORIES (Details Narrative)

INVENTORIES (Details Narrative) - USD ($)	Aug. 31, 2023	Feb. 28, 2023
Inventory Disclosure [Abstract]
Allowance for slow moving inventory	$ 354,143	$ 332,525

Schedule of weighted-average Bl

Schedule of weighted-average Black-Scholes assumptions (Details)	6 Months Ended
	Aug. 31, 2023
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	4.39%
Expected volatility	62.48%

STOCK BASED COMPENSATION (Detai

STOCK BASED COMPENSATION (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Aug. 31, 2023	Aug. 31, 2022	Aug. 31, 2023	Aug. 31, 2022	May 31, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options granted	30,596	42,606	32,461	39,682
Options, vesting period			3 years
Stock-based compensation expense	$ 46,000	$ 43,000	$ 95,000	$ 112,000
Share-Based Payment Arrangement, Option [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options granted			9,094
Share-Based Payment Arrangement, Employee [Member] | Minimum [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options, exercisable price			$ 4.79
Share-Based Payment Arrangement, Employee [Member] | Maximum [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options, exercisable price			$ 5.60
Share-Based Payment Arrangement, Nonemployee [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options granted			18,380
Options, exercisable price			$ 4.79
Employees And Directors [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options, expiration period			10 years
Employees [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Weighted average grant date fair value, per share			$ 2.91
2013 Stock Incentive Plan ("2013 Plan") [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock options shares available for grants					2,500,000
Stock options, outstanding	247,483		247,483
Stock options, vested			158,520
Stock Incentive Plan 2023 [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options granted			2,500,000
Options outstanding			23,250

Schedule of Computation of basi

Schedule of Computation of basic and diluted earnings per share (Details) - USD ($)	3 Months Ended		6 Months Ended
	Aug. 31, 2023	Aug. 31, 2022	Aug. 31, 2023	Aug. 31, 2022
Earnings Per Share [Abstract]
Numerator for basic and diluted earnings per share	$ 541,273	$ 162,123	$ 594,679	$ 467,759
Denominator for basic earnings per share – weighted average	15,743,069	15,732,550	15,742,571	15,730,862
Effects of dilutive securities
Stock options for employees, directors and outside consultants	30,596	42,606	32,461	39,682
Denominator for diluted earnings per share	15,773,665	15,775,156	15,775,032	15,770,544
Basic Earnings Per Share	$ 0.03	$ 0.01	$ 0.04	$ 0.03
Diluted Earnings Per Share	$ 0.03	$ 0.01	$ 0.04	$ 0.03

REVOLVING LINE OF CREDIT (Detai

REVOLVING LINE OF CREDIT (Details Narrative) - USD ($)	6 Months Ended
	Aug. 31, 2023	Feb. 28, 2023
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Revolving line of credit	$ 1,500,000	$ 1,500,000
Interest rate	8.50%	7.75%
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.
Letter of Credit [Member]
Line of Credit Facility [Line Items]
Outstanding borrowings under the line of credit	$ 0
Unused portion of credit line	$ 1,500,000

Schedule of Customer Concentrat

Schedule of Customer Concentrations and Foreign Sales (Details) - USD ($)	3 Months Ended		6 Months Ended
	Aug. 31, 2023	Aug. 31, 2022	Aug. 31, 2023	Aug. 31, 2022
Total sales	$ 2,440,000	$ 2,110,000	$ 3,675,000	$ 4,224,000
Asia Pacific [Member]
Total sales	538,000	827,000	1,109,000	1,533,000
EMEA [Member]
Total sales	1,155,000	836,000	1,581,000	1,826,000
Latin America [Member]
Total sales	$ 747,000	$ 447,000	$ 985,000	$ 865,000

CUSTOMER CONCENTRATIONS AND F_3

CUSTOMER CONCENTRATIONS AND FOREIGN SALES (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Aug. 31, 2023	Aug. 31, 2022	Aug. 31, 2023	Aug. 31, 2022	Feb. 28, 2023
Concentration Risk [Line Items]
Sales revenue	$ 5,639,117	$ 3,763,329	$ 9,242,135	$ 7,814,864
Foreign Customers [Member] | Revenue Benchmark [Member]
Concentration Risk [Line Items]
Sales revenue	$ 2,440,000	$ 2,110,000	$ 3,675,000	$ 4,224,000
Sales revenue, percent	43%	56%	40%	54%
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | One Customers [Member]
Concentration Risk [Line Items]
Concentration percentage	20%		14%
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Three Customers [Member]
Concentration Risk [Line Items]
Concentration percentage				17%
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Four Customers [Member]
Concentration Risk [Line Items]
Concentration percentage		24%
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Three Customers [Member]
Concentration Risk [Line Items]
Concentration percentage			39%
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Four Customers [Member]
Concentration Risk [Line Items]
Concentration percentage					44%