Cover
Cover - shares | 9 Months Ended | |
Nov. 30, 2023 | Jan. 12, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Nov. 30, 2023 | |
Document Fiscal Period Focus | Q3 | |
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, $0.01 par value per share | |
Trading Symbol | SOTK | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 15,745,206 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Nov. 30, 2023 | Feb. 28, 2023 |
Current Assets: | ||
Cash and cash equivalents | $ 2,981,931 | $ 3,354,601 |
Marketable securities | 9,609,444 | 8,090,000 |
Accounts receivable (less allowance of $12,225) | 1,762,309 | 1,633,866 |
Inventories | 4,252,550 | 3,242,909 |
Prepaid expenses and other current assets | 81,785 | 254,046 |
Total current assets | 18,688,019 | 16,575,422 |
Land | 250,000 | 250,000 |
Buildings, equipment, furnishings and leasehold improvements, net | 2,850,100 | 2,624,996 |
Intangible assets, net | 51,674 | 57,202 |
Deferred tax asset | 842,010 | 667,098 |
TOTAL ASSETS | 22,681,803 | 20,174,718 |
Current Liabilities: | ||
Accounts payable | 1,504,382 | 810,863 |
Accrued expenses | 1,720,020 | 1,427,446 |
Customer deposits | 3,143,009 | 2,838,165 |
Income taxes payable | 248,152 | 381,421 |
Total current liabilities | 6,615,563 | 5,457,895 |
Deferred tax liability | 82,865 | |
Total liabilities | 6,615,563 | 5,540,760 |
Stockholders’ Equity | ||
Common stock, $.01 par value; 25,000,000 shares authorized, 15,745,206 and 15,742,073 shares issued and outstanding, respectively | 157,452 | 157,421 |
Additional paid-in capital | 9,714,301 | 9,566,898 |
Accumulated earnings | 6,194,487 | 4,909,639 |
Total stockholders’ equity | 16,066,240 | 14,633,958 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 22,681,803 | $ 20,174,718 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) | Nov. 30, 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 | 15,745,206 | 15,742,073 |
Common stock, shares outstanding | 15,745,206 | 15,742,073 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Income Statement [Abstract] | ||||
Net Sales | $ 5,690,022 | $ 3,586,165 | $ 14,932,157 | $ 11,401,029 |
Cost of Goods Sold | 2,764,013 | 1,761,797 | 7,428,348 | 5,574,035 |
Gross Profit | 2,926,009 | 1,824,368 | 7,503,809 | 5,826,994 |
Operating Expenses | ||||
Research and product development costs | 776,013 | 520,187 | 2,221,712 | 1,543,310 |
Marketing and selling expenses | 955,017 | 792,710 | 2,700,327 | 2,359,430 |
General and administrative costs | 474,457 | 407,990 | 1,387,006 | 1,262,670 |
Total Operating Expenses | 2,205,487 | 1,720,887 | 6,309,045 | 5,165,410 |
Operating Income | 720,522 | 103,481 | 1,194,764 | 661,584 |
Interest and Dividend Income | 149,666 | 38,803 | 379,949 | 64,725 |
Net unrealized gain/(loss) on marketable securities | 20,176 | (9,231) | 31,031 | (40,256) |
Income Before Income Taxes | 890,364 | 133,053 | 1,605,744 | 686,053 |
Income Tax Expense | 200,195 | 28,155 | 320,896 | 113,396 |
Net Income | $ 690,169 | $ 104,898 | $ 1,284,848 | $ 572,657 |
Basic Earnings Per Share | $ 0.04 | $ 0.01 | $ 0.08 | $ 0.04 |
Diluted Earnings Per Share | $ 0.04 | $ 0.01 | $ 0.08 | $ 0.04 |
Weighted Average Shares - Basic | 15,744,543 | 15,738,180 | 15,743,224 | 15,733,284 |
Weighted Average Shares - Diluted | 15,776,972 | 15,773,370 | 15,775,675 | 15,764,351 |
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 | |||
Stock based compensation expense | 60,858 | 60,858 | ||
Cashless exercise of stock options | $ 73 | (73) | ||
Cashless exercise of stock options, shares | 7,345 | |||
Net income | 104,898 | 104,898 | ||
Ending balance, value at Nov. 30, 2022 | $ 157,421 | 9,483,417 | 4,846,391 | 14,487,229 |
Ending balance, shares at Nov. 30, 2022 | 15,742,073 | |||
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 | |||
Stock based compensation expense | 52,745 | 52,745 | ||
Cashless exercise of stock options | $ 17 | (17) | ||
Cashless exercise of stock options, shares | 1,723 | |||
Net income | 690,169 | 690,169 | ||
Ending balance, value at Nov. 30, 2023 | $ 157,452 | $ 9,714,301 | $ 6,194,487 | $ 16,066,240 |
Ending balance, shares at Nov. 30, 2023 | 15,745,206 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Nov. 30, 2023 | Nov. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Income | $ 1,284,848 | $ 572,657 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 428,345 | 366,238 |
Stock based compensation expense | 147,434 | 173,259 |
Inventory reserve | 41,475 | (14,854) |
Unrealized (gain) loss on marketable securities | (31,031) | 40,256 |
Deferred tax benefit - net | (257,777) | (178,281) |
(Decrease) Increase in: | ||
Accounts receivable | (128,443) | (348,693) |
Inventories | (1,051,116) | (872,315) |
Prepaid expenses and other current assets | 172,261 | 172,673 |
Accounts payable | 372,175 | 468,168 |
Accrued expenses | 292,574 | (110,717) |
Customer deposits | 304,844 | 580,680 |
Income taxes payable | (133,269) | 145,487 |
Net Cash Provided by Operating Activities | 1,442,320 | 994,558 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of equipment, furnishings and leasehold improvements | (326,577) | (413,521) |
Sale of marketable securities | 14,118,735 | 8,591,777 |
Purchase of marketable securities | (15,607,148) | (10,837,335) |
Net Cash Used in Investing Activities | (1,814,990) | (2,659,079) |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (372,670) | (1,664,521) |
CASH AND CASH EQUIVALENTS | ||
Beginning of period | 3,354,601 | 4,840,558 |
End of period | 2,981,931 | 3,176,037 |
SUPPLEMENTAL CASH FLOW DISCLOSURE: | ||
Interest paid | ||
Income Taxes Paid | 712,092 | 159,490 |
Non-cash investing transactions: | ||
Purchases of equipment included in Accounts payable on the balance sheet | $ 321,345 |
BUSINESS DESCRIPTION
BUSINESS DESCRIPTION | 9 Months Ended |
Nov. 30, 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/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 | 9 Months Ended |
Nov. 30, 2023 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2: SIGNIFICANT ACCOUNTING POLICIES Cash and Cash Equivalents - 2,666,264 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, 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 – November 30, 2023 $ 9,259,000 $ 350,000 $ — $ 9,609,000 Marketable Securities – February 28, 2023 $ 7,361,000 $ 729,000 $ — $ 8,090,000 Marketable Securities include mutual funds, certificates of deposit and US Treasury securities, totaling $ 9,609,000 8,090,000 Income Taxes no Inventories Land and Buildings At November 30, 2023 and February 28, 2023, the Company had land stated at cost of $ 250,000 At November 30, 2023 and February 28, 2023, the Company had buildings, equipment, furnishings and leasehold improvements totaling, $ 2,850,100 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 |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Nov. 30, 2023 | |
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, 2023, the Company had received approximately $ 3,143,000 60,294 60,294 At February 28, 2023, the Company had received $ 2,838,000 2,633,000 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 2023 % of total 2022 % of total 2023 % of total 2022 % of total Fluxing Systems $ 62,000 1% $ 252,000 7% $ 503,000 4% $ 960,000 8% Integrated Coating Systems 1,418,000 25% 193,000 5% 2,579,000 17% 787,000 7% Multi-Axis Coating Systems 2,962,000 52% 1,493,000 42% 7,648,000 51% 4,962,000 44% OEM Systems 268,000 5% 503,000 14% 1,078,000 7% 1,819,000 16% Other 980,000 17% 1,145,000 32% 3,124,000 21% 2,873,000 25% TOTAL $ 5,690,000 $ 3,586,000 $ 14,932,000 $ 11,401,000 |
INVENTORIES
INVENTORIES | 9 Months Ended |
Nov. 30, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 4: INVENTORIES Inventories consist of the following: Schedule of Inventory, Current November 30, February 28, 2023 2023 Raw materials and subassemblies $ 2,030,752 $ 1,868,689 Finished goods 975,447 613,915 Work in process 1,246,351 760,305 Net inventories $ 4,252,550 $ 3,242,909 The Company maintains an allowance for slow moving inventory for raw materials and finished goods. The recorded allowances at November 30, 2023 and February 28, 2023, totaled $ 374,000 332,525 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Nov. 30, 2023 | |
Equity [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 5: STOCK-BASED COMPENSATION Stock Options - 2,500,000 247,483 171,704 In August 2023, the Company’s shareholders approved the Company’s 2023 Stock Incentive Plan (the “2023 Plan”) under which 2,500,000 58,810 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, 2023, the Company granted options to acquire 47,830 4.79 5.60 4.79 3 10 3.06 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% 4.39% Expected volatility 55.02% 62.48% Expected dividend yield 0% For the three and nine months ended November 30, 2023 and 2022, net income and earnings per share reflect the actual deduction for stock-based compensation expense. For the three months ended November 30, 2023 and 2022, the Company recognized approximately $ 53,000 61,000 147,000 173,000 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Nov. 30, 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 Nine Months Ended Three Months Ended 2023 2022 2023 2022 Numerator for basic and diluted earnings per share $ 1,284,848 $ 572,657 $ 690,169 $ 104,898 Denominator for basic earnings per share – weighted average 15,743,224 15,733,284 15,744,543 15,738,180 Effects of dilutive securities Stock options for employees and directors 32,451 31,067 32,429 35,190 Denominator for diluted earnings per share 15,775,675 15,764,351 15,776,972 15,773,370 Basic earnings per share $ 0.08 $ 0.04 $ 0.04 $ 0.01 Diluted earnings per share $ 0.08 $ 0.04 $ 0.04 $ 0.01 |
REVOLVING LINE OF CREDIT
REVOLVING LINE OF CREDIT | 9 Months Ended |
Nov. 30, 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 November 30, 2023, $ 60,294 no 1,439,706 |
CUSTOMER CONCENTRATIONS AND FOR
CUSTOMER CONCENTRATIONS AND FOREIGN SALES | 9 Months Ended |
Nov. 30, 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 Nine Months Ended Three Months Ended 2023 2022 2023 2022 Asia Pacific (APAC) $ 1,790,000 $ 2,367,000 $ 681,000 $ 834,000 Europe, Middle East, Asia (EMEA) 3,057,000 2,557,000 1,476,000 731,000 Latin America 1,097,000 1,301,000 112,000 436,000 $ 5,944,000 $ 6,225,000 $ 2,269,000 $ 2,001,000 In the first nine months of fiscal 2024 and fiscal 2023, sales to foreign customers accounted for approximately $ 5,944,000 6,225,000 40% 55% During the third quarter of fiscal 2024 and fiscal 2023, sales to foreign customers accounted for approximately $ 2,269,000 2,001,000 40% 56% The Company had no customers that accounted for more than 10% of sales during the first nine months of fiscal 2024. The Company had one customer which accounted for 13% 25% The Company had two customers which accounted for 14% 21% 44% |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Nov. 30, 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 November 30, 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 November 30, 2023, the Company did not have any pending legal actions. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Nov. 30, 2023 | |
Accounting Policies [Abstract] | |
Cash and Cash Equivalents | Cash and Cash Equivalents - 2,666,264 |
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, 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 – November 30, 2023 $ 9,259,000 $ 350,000 $ — $ 9,609,000 Marketable Securities – February 28, 2023 $ 7,361,000 $ 729,000 $ — $ 8,090,000 Marketable Securities include mutual funds, certificates of deposit and US Treasury securities, totaling $ 9,609,000 8,090,000 |
Income Taxes | Income Taxes no |
Inventories | Inventories |
Land and Buildings | Land and Buildings At November 30, 2023 and February 28, 2023, the Company had land stated at cost of $ 250,000 At November 30, 2023 and February 28, 2023, the Company had buildings, equipment, furnishings and leasehold improvements totaling, $ 2,850,100 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 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Nov. 30, 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 November 30, 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 – November 30, 2023 $ 9,259,000 $ 350,000 $ — $ 9,609,000 Marketable Securities – February 28, 2023 $ 7,361,000 $ 729,000 $ — $ 8,090,000 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Nov. 30, 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 Nine Months Ended 2023 % of total 2022 % of total 2023 % of total 2022 % of total Fluxing Systems $ 62,000 1% $ 252,000 7% $ 503,000 4% $ 960,000 8% Integrated Coating Systems 1,418,000 25% 193,000 5% 2,579,000 17% 787,000 7% Multi-Axis Coating Systems 2,962,000 52% 1,493,000 42% 7,648,000 51% 4,962,000 44% OEM Systems 268,000 5% 503,000 14% 1,078,000 7% 1,819,000 16% Other 980,000 17% 1,145,000 32% 3,124,000 21% 2,873,000 25% TOTAL $ 5,690,000 $ 3,586,000 $ 14,932,000 $ 11,401,000 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Nov. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventories consist of the following: Schedule of Inventory, Current November 30, February 28, 2023 2023 Raw materials and subassemblies $ 2,030,752 $ 1,868,689 Finished goods 975,447 613,915 Work in process 1,246,351 760,305 Net inventories $ 4,252,550 $ 3,242,909 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Nov. 30, 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 Nine 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) | 9 Months Ended |
Nov. 30, 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 Nine Months Ended Three Months Ended 2023 2022 2023 2022 Numerator for basic and diluted earnings per share $ 1,284,848 $ 572,657 $ 690,169 $ 104,898 Denominator for basic earnings per share – weighted average 15,743,224 15,733,284 15,744,543 15,738,180 Effects of dilutive securities Stock options for employees and directors 32,451 31,067 32,429 35,190 Denominator for diluted earnings per share 15,775,675 15,764,351 15,776,972 15,773,370 Basic earnings per share $ 0.08 $ 0.04 $ 0.04 $ 0.01 Diluted earnings per share $ 0.08 $ 0.04 $ 0.04 $ 0.01 |
CUSTOMER CONCENTRATIONS AND F_2
CUSTOMER CONCENTRATIONS AND FOREIGN SALES (Tables) | 9 Months Ended |
Nov. 30, 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 Nine Months Ended Three Months Ended 2023 2022 2023 2022 Asia Pacific (APAC) $ 1,790,000 $ 2,367,000 $ 681,000 $ 834,000 Europe, Middle East, Asia (EMEA) 3,057,000 2,557,000 1,476,000 731,000 Latin America 1,097,000 1,301,000 112,000 436,000 $ 5,944,000 $ 6,225,000 $ 2,269,000 $ 2,001,000 |
Schedule of Significant Account
Schedule of Significant Accounting Policies - Fair values of financial assets of the Company (Details) - USD ($) | Nov. 30, 2023 | Feb. 28, 2023 |
Platform Operator, Crypto-Asset [Line Items] | ||
Marketable Securities | $ 9,609,000 | $ 8,090,000 |
Fair Value, Inputs, Level 1 [Member] | ||
Platform Operator, Crypto-Asset [Line Items] | ||
Marketable Securities | 9,259,000 | 7,361,000 |
Fair Value, Inputs, Level 2 [Member] | ||
Platform Operator, Crypto-Asset [Line Items] | ||
Marketable Securities | 350,000 | 729,000 |
Fair Value, Inputs, Level 3 [Member] | ||
Platform Operator, Crypto-Asset [Line Items] | ||
Marketable Securities | $ 0 | $ 0 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | Nov. 30, 2023 | Feb. 28, 2023 |
Accounting Policies [Abstract] | ||
Bank deposits exceeding the FDIC insured limit | $ 2,666,264 | |
Marketable securities | 9,609,000 | $ 8,090,000 |
Accruals for uncertain tax positions | 0 | 0 |
Land | 250,000 | 250,000 |
Buildings, equipment, furnishings and leasehold improvements, net | $ 2,850,100 | $ 2,624,996 |
Schedule of Revenue Recognition
Schedule of Revenue Recognition - Sales Revenue by Product Line (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Sales revenue | $ 5,690,022 | $ 3,586,165 | $ 14,932,157 | $ 11,401,029 |
Fluxing Systems [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales revenue | $ 62,000 | $ 252,000 | $ 503,000 | $ 960,000 |
Sales revenue, percent | 1% | 7% | 4% | 8% |
Integrated Coating Systems [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales revenue | $ 1,418,000 | $ 193,000 | $ 2,579,000 | $ 787,000 |
Sales revenue, percent | 25% | 5% | 17% | 7% |
Multi-Axis Coating Systems [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales revenue | $ 2,962,000 | $ 1,493,000 | $ 7,648,000 | $ 4,962,000 |
Sales revenue, percent | 52% | 42% | 51% | 44% |
OEM Systems [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales revenue | $ 268,000 | $ 503,000 | $ 1,078,000 | $ 1,819,000 |
Sales revenue, percent | 5% | 14% | 7% | 16% |
Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales revenue | $ 980,000 | $ 1,145,000 | $ 3,124,000 | $ 2,873,000 |
Sales revenue, percent | 17% | 32% | 21% | 25% |
Total [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales revenue | $ 5,690,000 | $ 3,586,000 | $ 14,932,000 | $ 11,401,000 |
REVENUE RECOGNITION (Details Na
REVENUE RECOGNITION (Details Narrative) - USD ($) | 9 Months Ended | |
Nov. 30, 2023 | Feb. 28, 2023 | |
Line of Credit Facility [Line Items] | ||
Cash deposits | $ 3,143,000 | $ 2,838,000 |
Revenue recognized | 2,633,000 | |
Letter of Credit [Member] | ||
Line of Credit Facility [Line Items] | ||
Letter of credit | 60,294 | |
Available credit line | $ 60,294 |
Schedule of Inventory, Current
Schedule of Inventory, Current (Details) - USD ($) | Nov. 30, 2023 | Feb. 28, 2023 |
Inventory Disclosure [Abstract] | ||
Raw materials and subassemblies | $ 2,030,752 | $ 1,868,689 |
Finished goods | 975,447 | 613,915 |
Work in process | 1,246,351 | 760,305 |
Net inventories | $ 4,252,550 | $ 3,242,909 |
INVENTORIES (Details Narrative)
INVENTORIES (Details Narrative) - USD ($) | Nov. 30, 2023 | Feb. 28, 2023 |
Inventory Disclosure [Abstract] | ||
Allowance for slow moving inventory | $ 374,000 | $ 332,525 |
Schedule of weighted-average Bl
Schedule of weighted-average Black-Scholes assumptions (Details) | 9 Months Ended |
Nov. 30, 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 | 9 Months Ended | |||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | Aug. 31, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Options granted | 32,429 | 35,190 | 32,451 | 31,067 | |
Options, vesting period | 3 years | ||||
Stock-based compensation expense | $ 53,000 | $ 61,000 | $ 147,000 | $ 173,000 | |
Share-Based Payment Arrangement, Option [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Options granted | 47,830 | ||||
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, 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 | $ 3.06 | ||||
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 | 171,704 | ||||
Stock Incentive Plan 2023 [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Options granted | 2,500,000 | ||||
Options outstanding | 58,810 |
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, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Numerator for basic and diluted earnings per share | $ 690,169 | $ 104,898 | $ 1,284,848 | $ 572,657 |
Denominator for basic earnings per share – weighted average | 15,744,543 | 15,738,180 | 15,743,224 | 15,733,284 |
Effects of dilutive securities | ||||
Stock options for employees and directors | 32,429 | 35,190 | 32,451 | 31,067 |
Denominator for diluted earnings per share | 15,776,972 | 15,773,370 | 15,775,675 | 15,764,351 |
Basic earnings per share | $ 0.04 | $ 0.01 | $ 0.08 | $ 0.04 |
Diluted earnings per share | $ 0.04 | $ 0.01 | $ 0.08 | $ 0.04 |
REVOLVING LINE OF CREDIT (Detai
REVOLVING LINE OF CREDIT (Details Narrative) - USD ($) | 9 Months Ended | |
Nov. 30, 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] | ||
Letter of credit | $ 60,294 | |
Outstanding borrowings under the line of credit | 0 | |
Unused portion of credit line | $ 1,439,706 |
Schedule of Customer Concentrat
Schedule of Customer Concentrations and Foreign Sales (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Total sales | $ 2,269,000 | $ 2,001,000 | $ 5,944,000 | $ 6,225,000 |
Asia Pacific [Member] | ||||
Total sales | 681,000 | 834,000 | 1,790,000 | 2,367,000 |
EMEA [Member] | ||||
Total sales | 1,476,000 | 731,000 | 3,057,000 | 2,557,000 |
Latin America [Member] | ||||
Total sales | $ 112,000 | $ 436,000 | $ 1,097,000 | $ 1,301,000 |
CUSTOMER CONCENTRATIONS AND F_3
CUSTOMER CONCENTRATIONS AND FOREIGN SALES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | Feb. 28, 2023 | |
Concentration Risk [Line Items] | |||||
Sales revenue | $ 5,690,022 | $ 3,586,165 | $ 14,932,157 | $ 11,401,029 | |
Foreign Customers [Member] | Revenue Benchmark [Member] | |||||
Concentration Risk [Line Items] | |||||
Sales revenue | $ 2,269,000 | $ 2,001,000 | $ 5,944,000 | $ 6,225,000 | |
Sales revenue, percent | 40% | 56% | 40% | 55% | |
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | One Customer [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration percentage | 13% | ||||
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Two Customers [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration percentage | 21% | 14% | |||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | One Customer [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration percentage | 25% | ||||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Four Customers [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration percentage | 44% |