SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: November 30, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File No.: 0-16035
SONO-TEK CORPORATION
(Exact name of registrant as specified in its charter)
New York 14-1568099
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
2012 Rt. 9W, Milton, NY 12547
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone no., including area code: (845) 795-2020
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO _____
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Outstanding as of
Class January 9, 2003
Common Stock, par value $.01 per share 9,200,159
SONO-TEK CORPORATION
INDEX
Part I - Financial Information Page
Item 1 - Consolidated Financial Statements: 1 - 3
Consolidated Balance Sheets - November 30, 2002 (Unaudited) and
February 28, 2002 1
Consolidated Statements of Operations - Nine Months and Three Months Ended
November 30, 2002 and 2001 (Unaudited) 2
Consolidated Statements of Cash Flows - Nine Months and Three Months Ended
November 30, 2002 and 2001 (Unaudited) 3
Notes to Consolidated Financial Statements 4 - 6
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations 7 - 10
Item 3 - Quantitative and Qualitative Disclosure About Market Risk 11
Part II - Other Information 12
Signatures and Certifications 13 - 16
16
SONO-TEK CORPORATION
CONSOLIDATED BALANCE SHEETS
ASSETS
November 30, February 28,
2002 2002
Current Assets Unaudited Audited
Cash and cash equivalents $ 164,974 $ 453,215
Accounts receivable (less allowance of
$12,894 and $25,000 at November 30 and
February 28, respectively) 492,628 380,092
Inventories (Note 2) 769,807 768,711
Prepaid expenses and other current assets 49,748 68,395
--------- ----------
Total current assets 1,477,157 1,670,413
--------- ----------
Equipment, furnishings and leasehold
improvements (less accumulated depreciation
of $622,129 and $573,547 at November 30
and February 28, respectively) 101,086 141,509
Intangible assets, net:
Patents and patents pending (Note 1) 27,507 20,187
Deferred financing fees 13,027 18,355
---------- ----------
Total intangible assets 40,534 38,542
Other assets 8,042 7,667
---------- ----------
TOTAL ASSETS $1,626,819 $1,858,130
========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities:
Accounts payable $204,580 $280,548
Accrued expenses 237,734 257,968
Revolving Line of Credit 312,000 344,000
Current maturities of long term
loans-related parties (Note3) 106,852 87,203
Current maturities of long term debt 12,115 22,686
Current maturities of subordinated loans 85,738 60,000
Current maturities of subordinated
mezzanine debt 306,956 118,060
---------- -----------
Total current liabilities 1,265,975 1,170,465
Subordinated mezzanine debt 509,732 643,813
Long term debt, less current maturities 217,081 282,050
Subordinated loans 58,364 90,000
Other long-term liabilities 95,064 98,759
Estimated future costs of
discontinued operations - 167,404
--------- ---------
Total liabilities 2,146,216 2,723,283
--------- ---------
Commitments and Contingencies - -
Put Warrants (Note 4) 188,223 188,223
Stockholders' Equity (Note 6)
Common stock, $.01 par value;
25,000,000 shares authorized,
9,200,159 shares issued and outstanding
at November 30 and February 28, respectively 92,002 91,055
Additional paid-in capital 6,033,160 6,016,107
Accumulated deficit (6,832,782) (6,889,716)
---------- -----------
Total stockholders' deficiency (707,620) (782,554)
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $1,682,819 $1,858,130
========== ==========
See notes to consolidated financial statements.
SONO-TEK CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Nine Months Ended Three Months Ended
November 30, November 30,
Unaudited Unaudited
2002 2001 2002 2001
---------------------- ---------------------
Net Sales $2,234,027 $2,700,783 $748,036 $1,026,452
Cost of Goods Sold 987,894 987,538 301,136 314,959
----------- ----------- --------- -----------
Gross Profit 1,246,132 1,713,245 446,900 711,493
----------- --------- --------- ---------
Operating Expenses
Research and product
development costs 262,800 280,920 99,628 95,468
Marketing and
selling expenses 433,318 484,286 150,277 155,461
General and
administrative costs 411,863 448,032 123,745 155,660
--------- ---------- ------- --------
Total Operating Expenses1,107,981 1,213,238 373,650 406,589
---------- ---------- ------- -------
Operating Income 138,151 500,007 73,250 304,904
Interest Expense (168,432) (178,182) (53,104) (63,161)
Loss from Affiliate - (9,858) - -
Interest and Other Income 90,300 5,693 2,407 2,716
---------- ---------- --------- ---------
Income from Continuing
Operations Before
Income Taxes 60,019 317,660 22,553 244,459
Income Tax Expense 3,085 0 2,020 0
----------- ------------ --------- --------
Income from Continuing
Operations 56,934 317,600 20,533 244,459
(Loss) Earnings from
Discontinued Operations - (631,616) - 237,614
-------- -------- ---------- -------
Net Income (Loss) 56,934 $(313,956) $20,533 $482,073
======== ========== ======= ========
Basic Earnings (Loss)
Per Share
Earnings from
continuing operations $0.01 $ 0.03 $0.00 $0.03
(Loss) Earnings from
discontinued operations 0.00 (0.06) 0.00 0.02
---- ------- ---- ----
Net Earnings (Loss) $0.01 $(0.03) $0.00 $0.05
===== ======= ===== =====
Diluted Earnings (Loss)
Per Share (Note 7)
Earnings from
continuing operations $0.01 $ 0.03 $0.00 $0.03
(Loss) Earnings from
discontinued operations 0.00 (0.06) 0.00 0.02
---- ------- ---- ----
Net Earnings (Loss) $0.01 $(0.03) $0.00 $0.05
===== ======= ===== =====
Weighted Average
Shares - Basic 9,136,771 9,093,494 9,200,159 9,095,801
========= ========= ========= =========
Weighted Average
Shares - Diluted 10,331,578 9,950,087 10,779,137 9,207,228
========== ========= ========== =========
See notes to consolidated financial statements.
SONO-TEK CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended November 30,
Unaudited
2002 2001
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ 56,934 $(313,956)
Adjustments to reconcile net income to netcash
provided by (used in) operating activities:
Loss from discontinued operations 0 631,616
Depreciation and amortization 57,384 59,505
Imputed interest expense 54,815 48,027
Provision for doubtful accounts (12,106) (79,347)
Non-cash charge for issuance of warrants 0 1,797
(Increase) Decrease in:
Accounts receivable (100,430) 151,378
Inventories (1,096) 137,951
Prepaid expenses and other current assets 18,647 44,862
Decrease in:
Accounts payableand accrued expenses (96,202) (503,054)
-------- ----------
Net Cash (Used In)Provided By
Continuing Operations (22,054) 178,779
Net Cash (Used In) Provided By
Discontinued Operations (167,403) 296,260
--------- ---------
Net Cash (Used In) Provided By Operating Activities (189,457) 475,039
--------- --------
CASH FLOW FROM INVESTING ACTIVITIES:
Patent Application Costs (10,795) 0
Purchase) Sale of equipment and furnishings (8,159) 2,763
Deposits (375) 1,501
----------- --------
Net Cash (Used In)Provided By Investing Activities (19,329) 4,264
---------- --------
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from subordinated mezzanine debt 0 300,000
Proceeds from issuance of stock 18,000 2,875
Repayments of loans - related parties (44,385) (173,521)
Repayments of bank loans payable (49,375) (22,321)
Other Long-term liabilities paid (3,695) 0
---------- ----------
Net Cash (Used In) Provided By Continuing Operations (79,455) 107,033
Net Cash Used In Discontinued Operations 0 (231,159)
----------- ---------
Net Cash Used In Financing Activities (79,455) (124,126)
----------- ---------
NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS (288,241) 355,177
CASH AND CASH EQUIVALENTS
Beginning of period 453,215 3,232
--------- ---------
End of period $164,974 358,409
======== =======
SUPPLEMENTAL DISCLOSURE:
Interest paid $135,676 $88,973
======== =======
See notes to consolidated financial statements.
SONO-TEK CORPORATION
Notes to Consolidated Financial Statements
Nine Months Ended November 30, 2002 and 2001
NOTE 1: SIGNIFICANT ACCOUNTING POLICIES
Consolidation - The accompanying consolidated financial statements of Sono-Tek
Corporation, a New York Corporation (the "Company"), include the accounts of the
Company and its wholly owned subsidiary, Sono-Tek Cleaning Systems, Inc., a New
Jersey Corporation ("SCS"), which the Company acquired on August 3, 1999 (the
"Acquisition"). On April 23, 2001, the Company adopted a plan to discontinue the
operations of the cleaning and drying systems segment, which includes SCS and
Serec. These operations were discontinued and were classified as discontinued
operations. All significant intercompany accounts and transactions are
eliminated in consolidation.
Interim Reporting - The attached summary consolidated financial information does
not include all disclosures required to be included in a complete set of
financial statements prepared in conformity with accounting principles generally
accepted in the United States of America. Such disclosures were included with
the financial statements of the Company at February 28, 2002, and included in
its report on Form 10-KSB. Such statements should be read in conjunction with
the data herein. The financial information reflects all adjustments which, in
the opinion of management, are necessary for a fair presentation of the results
for the interim periods presented. The results for such interim periods are not
necessarily indicative of the results to be expected for the year.
Patent and Patent Pending Costs - Cost of patent applications are deferred and
charged to operations over seventeen years for domestic patents and twelve years
for foreign patents. However, if it appears that such costs are related to
products which are not expected to be developed for commercial application
within the reasonably foreseeable future, or are applicable to geographic areas
where the Company no longer requires patent protection, they are written off to
operations. The accumulated amortization is $64,612 and $61,138 at November 30,
2002 and February 28, 2002, respectively. During the nine months ended November
30, 2002, the Company incurred $10,795 of costs related to the documentation and
filing fees for a new patent.
NOTE 2: INVENTORIES
Inventories at November 30, 2002 are comprised of:
Finished goods $430,324
Work in process 134,260
Consignment 5,437
Raw materials and subassemblies 416,580
---------
Total 986,601
Less: Allowance (216,794)
--------
Net inventories $769,807
========
NOTE 3: RELATED PARTY TRANSACTIONS
Short term loans - related parties - At Fiscal Year End 2002, loans from
directors and former officers in the amount of $286,084 plus accrued interest of
$62,728 were formalized into four-year notes bearing interest at 5% on the
unpaid balance. Repayments of these notes commenced on March 31, 2002 and were
stopped as of August 31, 2002. Payments of $31,942 of principal and interest,
which were due in the period from August 31, 2002 to November 30, 2002, were
deferred for a six-month period. During the nine months ended November 30, 2002,
$6,964 of interest and $36,335 of principal were repaid on these notes.
Certain of the Company's directors, an officer and an affiliate are participants
with Norwood in its subordinated mezzanine financing (see Note 4).
NOTE 4: SUBORDINATED MEZZANINE DEBT
On April 30, 2001, Norwood amended the Norwood Note and Warrant Purchase
Agreement to increase the Note to $850,000 and the Warrant shares to 2,077,777.
The monthly principal payments to commence in October 2001 are $23,612 per month
and the balance sheet reflects this monthly rate in reporting the related
current maturities. Principal payments for the three months ended November 30,
2002 in the amount of $70,836 have been deferred in accordance with an agreement
with Norwood. The additional Warrant shares are valued at $188,223 and are
accounted for as a discount and are being imputed as additional interest expense
over the term of the loan.
Certain of the Company's directors, an officer and an affiliate are participants
with Norwood in its subordinated mezzanine financing (see Note 3).
NOTE 5: DEFERRAL OF PAYMENTS
The Company, in order to conserve its cash assets, has deferred payment of
certain of its obligations at November 30, 2002. Such deferrals were:
Current maturities of subordinated mezzanine debt $70,836
Current maturities of long-term loans - related parties 26,916
Current maturities of subordinated loans 11,885
Incentive compensation 14,454
Interest 5,026
-----
Total $129,117
NOTE 6: COMMON STOCK ISSUANCE
During September 2002 the Company issued 18,000 shares of common stock to one of
its outside professional as payment for services rendered. These shares were
issued at fair market value.
NOTE 7: EARNINGS (LOSS) PER SHARE
The denominators for the calculation of diluted earnings per share for the six
and three month periods ended November 30, 2002and 2001 are calculated as
follows:
9 Months 9 Months 3 Months 3 Months
11/30/02 11/30/01 11/30/02 11/30/01
Denominator for basic
earnings per share 9,136,771 9,093,494 9,200,159 9,095,801
Dilutive effect of warrants 1,129,501 856,593 550,000 111,427
Dilutive effect of stock options 65,305 - 28,978 -
--------- --------- ---------- ---------
1,194,806 856,593 578,978 111,427
--------- ------- ---------- ---------
Denominator for dilutive earnings
per share 10,331,578 9,950,087 9,779,137 9,207,228
========== ======== ========= =========
NOTE 8: NEW ACCOUNTING DEVELOPMENTS
In June 2002, the Financial accounting Standards Board issued SFAS No. 146,
"Accounting for Costs Associated with Exit or Disposal Activities". The Company
is reviewing the requirements and implications of adopting such standards by
December 31, 2002. This Statement addresses financial reporting for costs
associated with exit or disposal activities and nullifies Emerging Task Force
(EITF) Issue No. 94-3, "Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred
in a Restructuring)." The Company does not believe adopting such standards will
have a material effect on the presentation of the financial statements.
SONO-TEK CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Forward-Looking Statements
Certain statements made in this report may constitute "forward-looking
statements" within the meaning of the Federal Securities Laws. Such
forward-looking statements include statements regarding the intent, belief or
current expectations of the Company and its management and involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, among other things, the
following:
- - the Company's ability to respond to competition in its markets;
- - general economic conditions in the Company's markets; and
- - various other factors discussed in the Annual Report on Form 10-KSB.
The Company undertakes no obligation to update publicly any forward-looking
statement.
Liquidity and Capital Resources
The Company has experienced sluggish sales in the nine month period ended
November 30, 2002. These reduced sales are attributable to the economic slowdown
that is affecting the capital goods segment of the economy, and more
specifically the electronics industry, which has been our main business. As a
result, we have used more than half our cash reserves over the past nine months.
We have taken steps to preserve our remaining working capital by meeting with
existing lenders to restructure agreements to defer the payment of principal on
certain outstanding loans for the next six months. A total of $129,117 of
payments due in the period from August 31, 2002 to November 30, 2002, were
deferred for a period of six months. These were comprised of loan principal and
interest payments of $114,663 and incentive compensation payments to officers
and key management employees of $14,454. We believe these measures will allow us
to maintain adequate working capital until the economy has recovered and our
electronic industry sales return to normal levels. The Company continues to see
developing opportunities for its technology in newer markets such as biomedical
and defense.
The Company's working capital decreased $288,766 from a working capital of
$499,948 at February 28, 2002 to $211,182 at November 30, 2002. The decrease in
working capital was a result of a decrease in cash of $288,000, an increase in
the current maturities of debt of $224,000, a decrease in prepaid expenses of
$19,000, that was offset by increases in accounts receivable of $113,000,
decrease in accounts payable and accrued expenses of $96,000 and repayments of
short-term borrowings of $32,000. The stockholders' deficiency decreased $74,934
from $782,554 at February 28, 2002 to $707,620 at November 30, 2002. The
decrease in stockholders' deficiency was the result of the net profit of $56,934
for the nine months ended November 30, 2002 and $18,000 of the common stock
issued to one of the Company's outside professionals for services rendered.
Accounts receivable at November 30, 2002 increased $112,536 or 30% from February
28, 2002 due to higher sales levels in the last month of current fiscal period.
Accounts payable decreased $75,968 as compared to February 28, 2002 due to the
reduced purchasing activity and payments made to vendors during the nine months
ended November 30, 2002.
Accrued expenses decreased $20,234 principally due to a reduction in accrued
payroll expenses of $36,000, a reduction of accrued interest of $16,000 due to
payments made, offset by an increases in accrued commissions of $6,000, accrued
professional fees of $10,000 and accrued marketing expenses of $15,000.
The estimated future costs of discontinued operations were reduced $167,404 due
to obligations paid or settled in the nine months ended November 30, 2002.
The Company currently has a $350,000 line of credit with a bank. The loan is
collateralized by accounts receivable, inventory and all other personal property
of the Company and is guaranteed by the former Chief Executive Officer of the
Company. As of November 30, 2002 the outstanding balance was $312,000.
Results of Continuing Operations
For the nine months ended November 30, 2002, the Company's sales decreased
$466,756 to $2,234,027 as compared to $2,700,783 for the nine months ended
November 30, 2001. The decrease was the result of a decrease in nozzle sales of
$47,000, a decrease in fluxer sales of $107,000, a decrease in sales of other
products of $359,000, partially offset by an increase in cleaning system spare
part sales of $47,000.
For the three months ended November 30, 2002, the Company's sales decreased
$278,416 to $748,036 as compared to $1,026,452 for the three months ended
November 30, 2001. The decrease was the result of a decrease in fluxer sales of
$100,000, a decrease in sales of other products of $224,000, a decrease in
cleaning system spare part sales of $7,000, partially offset by an increase in
nozzle sales of $52,000.
The Company's gross profit decreased $467,113 to $1,246,132 for the nine months
ended November 30, 2002 from $1,713,245 for the nine months ended November 30,
2001. The decrease was primarily a result of reduced sales of the Company's
products. The gross profit margin was 55.8% of sales for the nine months ended
November 30, 2002 as compared to 63.4% of sales for the nine months ended
November 30, 2001. The change in margin occurred as the result of the changing
mix of products in each period.
The Company's gross profit decreased $264,593 to $446,900 for the three months
ended November 30, 2002 from $711,493 for the three months ended November 30,
2001. The decrease was primarily a result of reduced sales of the Company's
products. The gross profit margin was 59.7% of sales for the three months ended
November 30, 2002 as compared to 69.3% of sales for the three months ended
November 30, 2001. The change in margin occurred as the result of the changing
mix of products in each period.
Research and product development costs decreased $18,120 to $262,800 for the
nine months ended November 30, 2002 from $280,920 for the nine months ended
November 30, 2001. The decrease was a result of decreased compensation, fringe
benefits and travel expenses of $68,000 due to a smaller engineering staff,
partially offset by an increase of $52,000 for engineering materials in the
current year's period.
Research and product development costs increased $4,160 to $99,628 for the three
months ended November 30, 2002 from $95,468 for the three months ended November
30, 2001. The increase was a result of an increase of 19,000 for engineering
materials, partially offset by a $15,000 decrease in compensation, fringe
benefits and travel expenses due to a smaller engineering staff.
Marketing and selling costs decreased $50,968to $433,318 for the nine months
ended November 30, 2002 from $484,286 for the nine months ended November 30,
2001. The decrease was a result of decreases in commissions of $48,000, travel
costs of $17,000, professional fees of $12,000 and facilities and utilities
costs of $4,000, that were offset by increases in advertising of $4,000 and
increased personnel costs of $26,000.
Marketing and selling costs decreased $5,184 to $150,277 for the three months
ended November 30, 2002 from $155,461 for the three months ended November 30,
2001. The decrease was a result of decreases in commissions of $19,000,
professional fees of $4,000 and trade shows and advertising costs of $2,000 that
were offset by increased personnel and travel costs of $18,000.
General and administrative costs decreased $36,169 to $411,863 for the nine
months ended November 30, 2002 from $448,032 for the nine months ended November
30, 2001. The decrease was a result of a decrease of $12,000 in facilities and
utility costs, a reduction of $8,000 in bank fees, reduced travel and
entertainment of $7,000, reduced professional fees of $3,000, and reduced
license fees of $6,000.
General and administrative costs decreased $31,885 to $123,745 for the three
months ended November 30, 2002 from $155,660 for the three months ended November
30, 2001. The decrease was a result of reduced salary and fringe costs of
$41,000, a decrease of $5,000 in facilities and utility costs, and reduced
license fees of $13,000 offset by increased legal and accounting fees of $14,000
and an increase Director and Officer insurance premiums of $9,000.
Interest expense decreased $9,750 to $168,432 for nine months ended November 30,
2002 from $178,182 for the nine months ended November 30, 2001. The decrease is
primarily due to reduced interest of on related party and bank loans.
Interest expense decreased $10,057 to $53,104 for the three months ended
November 30, 2002 from $63,161 for the three months ended November 30, 2001. The
decrease is primarily due to reduced interest on related party and bank loans.
Interest and other income increased $84,607 to $90,300 for the nine months ended
November 30, 2002 from $5,693 for the nine months ended November 30, 2001. The
increase is primarily due to settlements income of $79,000 with former vendors
and sales representatives, and a reduction of the accrual for future rent
expense of $6,000.
The Company's profit from continuing operations decreased $260,666 from $317,600
or $.03 per share for the nine months ended November 30, 2001 to a profit of
$56,934 or $0.005 per share for the nine months ended November 30, 2002. For the
three months ended November 30, 2002 the Company had income from continuing
operations of $20,533 as compared to $244,459 for the three months ended
November 30, 2001.
Results of Discontinued Operations
The Company discontinued its cleaning and drying segment during the quarter
ended May 31, 2001. The Company's loss from discontinued operations was $631,616
for the nine month period ended November 30, 2001 and a profit of $237,614 for
the three months ended November 30, 2001. At February 28, 2001 the discontinued
operation had residual goodwill of $477,377. This goodwill was based on the
residual profits on open contracts at February 28, 2001, the assumed value of
the residual spares business, and the value that was assumed could be realized
from the sale of the business. During the quarter ended May 31, 2001, one major
customer canceled the balance of his order, it was determined that the business
could not be sold and the value of the spares business was deemed to be
overstated. Accordingly, the goodwill was considered impaired and was written
off. The increase in the loss was due to the impairment of goodwill of $477,377,
an increase in the inventory raw material obsolescence reserve of $39,246, a
reserve of $89,812 for work in process inventory, plus the lack of sales to
support the necessary amount of overhead. All major accounts of this operation
were resolved during fiscal year ended February 28, 2002, accordingly, there was
no impact of discontinued operations on the nine and three month periods ended
November 30, 2002.
New Accounting Developments
In June 2002, the Financial accounting Standards Board issued SFAS No. 146,
"Accounting for Costs Associated with Exit or Disposal Activities". The Company
is reviewing the requirements and implications of adopting such standards by
December 31, 2002. This Statement addresses financial reporting for costs
associated with exit or disposal activities and nullifies Emerging Task Force
(EITF) Issue No. 94-3, "Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred
in a Restructuring)." The Company does not believe adopting such standards will
have a material effect on the presentation of the financial statements.
SONO-TEK CORPORATION
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to market risk related to changes in interest rates. The
interest rate on the Company's debt is based on fluctuations in the prime rates.
If the prime rate increased by 1 percentage point from the levels at February
28, 2002, the negative effect on the Company's results of operations would
approximate $3,000 and $1,000 for the nine and three month periods ended
November 30, 2002, respectively.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities and Use of Proceeds.
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
99.1 CEO Certification
99.2 Treasurer Certification
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: January 13, 2003
SONO-TEK CORPORATION
(Registrant)
/s/ Christopher L. Coccio
By: ____________________________________
Christopher L. Coccio
Chief Executive Officer and President
CERTIFICATION
I, Christopher L. Coccio, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Sono-Tek
Corporation;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstance
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for the periods presented in
this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:
a) Designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period this quarterly report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and
c) Presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation
Date:
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of the registrant's board of directors (or persons
performing the equivalent functions):
a) All significant deficiencies in the design or operation of
internal controls which could adversely effect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and
b) Any fraud, whether or not material; that involves
management or other employees who have a significant role
in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: January 13, 2003
/s/ Christopher L. Coccio
Christopher L. Coccio
Chief Executive Officer and President
CERTIFICATION
I, J. Duncan Urquhart, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Sono-Tek Corporation;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstance
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for the periods presented in
this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:
a) Designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period this quarterly report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and
d) Presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation
Date:
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of the registrant's board of directors (or persons
performing the equivalent functions):
c) All significant deficiencies in the design or operation of
internal controls which could adversely effect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and
d) Any fraud, whether or not material; that involves
management or other employees who have a significant role
in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: January 13, 2003
/s/ J. Duncan Urquhart
J. Duncan Urquhart
Treasurer
Exhibit 99.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Sono-Tek Corporation on Form 10QSB
for the period ended November 30, 2002 as filed with the Securities and Exchange
Commission on the date hereof (the "Report"). I, Christopher L. Coccio, Chief
Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as
adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that: (1) The
Report fully complies with the requirements of section 13(a) and 15(d) of the
Securities Exchange Act of 1934; and (2) The information contained in the Report
fairly presents, in all material respects, the Financial condition and result of
operations of the Company. 3) The Report fully complies with the requirements of
section 13(a) and 15(d)of the Securities Exchange Act of 1934; and (4) The
information contained in theReport fairly presents, in all material respects,
the Financial condition and result of operations of the Company.
/s/ Christopher L. Coccio
Christopher L. Coccio
Chief Executive Officer and President
Exhibit 99.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Sono-Tek Corporation on Form 10QSB
for the period ended November 30, 2002 as filed with the Securities and Exchange
Commission on the date hereof (the "Report"), I, J. Duncan Urquhart, Treasurer
of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to
ss. 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies
with the requirements of section 13(a) and 15(d) of the Securities Exchange Act
of 1934; and (2) The information contained in the Report fairly presents, in all
material respects, the Financial condition and result of operations of the
Company. 3) The Report fully complies with the requirements of section 13(a) and
15(d)of the Securities Exchange Act of 1934; and (4) The information contained
in theReport fairly presents, in all material respects, the Financial condition
and result of operations of the Company.
/s/ J. Duncan Urquhart
J. Duncan Urquhart
Treasurer