Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Feb. 28, 2019 | May 28, 2019 | Aug. 31, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | SONO TEK CORP | ||
Entity Central Index Key | 0000806172 | ||
Document Type | 10-K | ||
Document Period End Date | Feb. 28, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --02-28 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 34,185,178 | ||
Entity Common Stock, Shares Outstanding | 15,197,563 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Feb. 28, 2019 | Feb. 28, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 3,144,123 | $ 2,016,464 |
Marketable Securities | 2,365,706 | 4,405,900 |
Accounts receivable (less allowance of $46,000) | 1,397,891 | 774,778 |
Inventories, net | 1,658,016 | 1,354,083 |
Prepaid expenses and other current assets | 395,005 | 139,406 |
Total current assets | 8,960,741 | 8,690,631 |
Land | 250,000 | 250,000 |
Buildings, net | 1,731,547 | 1,807,339 |
Equipment, furnishings and leasehold improvements, net | 802,932 | 498,401 |
Intangible assets, net | 122,941 | 136,576 |
Deferred tax asset | 332,017 | 396,387 |
TOTAL ASSETS | 12,200,178 | 11,779,334 |
Current Liabilities: | ||
Accounts payable | 585,694 | 652,863 |
Accrued expenses | 632,706 | 893,192 |
Customer deposits | 1,149,558 | 344,098 |
Current maturities of long term debt | 162,816 | 156,119 |
Income taxes payable | 6,272 | 84,621 |
Total current liabilities | 2,537,046 | 2,130,893 |
Deferred tax liability | 370,757 | 385,384 |
Long term debt, less current maturities | 707,715 | 870,532 |
Total liabilities | 3,615,518 | 3,386,809 |
Commitments and Contingencies | ||
Stockholders' Equity | ||
Common stock | 151,976 | 149,864 |
Additional paid-in capital | 8,929,607 | 8,901,171 |
Accumulated deficit | (496,923) | (760,115) |
Accumulated other comprehensive income (loss) | 101,605 | |
Total stockholders' equity | 8,584,660 | 8,392,525 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 12,200,178 | $ 11,779,334 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Feb. 28, 2019 | Feb. 28, 2018 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 46,000 | $ 46,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, authorized | 25,000,000 | 25,000,000 |
Common stock, issued shares | 15,197,563 | 14,986,367 |
Common stock, outstanding shares | 15,197,563 | 14,986,367 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Income Statement [Abstract] | ||
Net Sales | $ 11,609,599 | $ 11,008,444 |
Cost of Goods Sold | 6,361,353 | 5,711,951 |
Gross Profit | 5,248,246 | 5,296,493 |
Operating Expenses | ||
Research and product development | 1,324,766 | 1,280,308 |
Marketing and selling | 2,686,382 | 2,516,461 |
General and administrative | 1,154,611 | 1,118,107 |
Total Operating Expenses | 5,165,759 | 4,914,876 |
Operating Income (Loss) | 82,487 | 381,617 |
Other Income (Expense): | ||
Interest Expense | (39,977) | (46,117) |
Interest and Dividend Income | 136,677 | 91,459 |
Realized gain on sale of marketable securities | 73,699 | 11,208 |
Net unrealized loss on marketable securities | (100,184) | |
Other Income | 28,732 | 21,896 |
Income Before Income Taxes | 181,434 | 460,063 |
Income Tax (Benefit) Expense | 19,847 | 91,856 |
Net Income | 161,587 | 368,207 |
Other Comprehensive Income (Loss) | ||
Net unrealized gain on marketable securities | 59,355 | |
Comprehensive Income | $ 161,587 | $ 427,562 |
Basic Earnings Per Share | $ 0.01 | $ 0.02 |
Diluted Earnings Per Share | $ 0.01 | $ 0.02 |
Weighted Average Shares - Basic | 15,107,778 | 14,968,450 |
Weighted Average Shares - Diluted | 15,218,913 | 15,095,123 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Income | $ 161,587 | $ 368,207 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 332,147 | 399,526 |
Stock based compensation expense | 30,548 | 41,728 |
Inventory reserve | 66,000 | 104,601 |
Unrealized loss on marketable securities | 100,184 | |
Deferred tax expense | 49,743 | (33,558) |
(Increase) Decrease in: | ||
Accounts receivable | (623,113) | 376,023 |
Inventories | (369,933) | (118,000) |
Prepaid expenses and other assets | (255,599) | (12,130) |
(Decrease) Increase in: | ||
Accounts payable and accrued expenses | (327,655) | 340,739 |
Customer deposits | 805,460 | 265,196 |
Income taxes payable | (78,349) | 70,002 |
Net Cash (Used In) Provided by Operating Activities | (108,980) | 1,802,334 |
CASH FLOW FROM INVESTING ACTIVITIES: | ||
Purchase of equipment, furnishings and leasehold improvements | (547,251) | (189,245) |
Sale of marketable securities | 1,940,010 | |
Purchase of marketable securities | (2,004,360) | |
Net Cash Provided By (Used In) Investing Activities | 1,392,759 | (2,193,605) |
CASH FLOW FROM FINANCING ACTIVITIES: | ||
Proceeds from exercise of options | 210 | |
Repayment of long term debt | (156,120) | (149,698) |
Net Cash (Used In) Financing Activities | (156,120) | (149,488) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 1,127,659 | (540,759) |
CASH AND CASH EQUIVALENTS | ||
Beginning of year | 2,016,464 | 2,557,223 |
End of year | 3,144,123 | 2,016,464 |
SUPPLEMENTAL CASH FLOW DISCLOSURE: | ||
Interest paid | 39,977 | 46,117 |
Income Taxes Paid | $ 28,178 | $ 59,494 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders Equity - USD ($) | Common Stock Par Value $.01 | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total |
Beginning balance (shares) at Feb. 28, 2017 | 14,961,076 | ||||
Beginning balance at Feb. 28, 2017 | $ 149,611 | $ 8,859,486 | $ 42,250 | $ (1,128,322) | $ 7,923,025 |
Exercise of stock options (shares) | 25,291 | ||||
Exercise of stock options | $ 253 | (43) | 210 | ||
Stock based compensation expense | 41,728 | 41,728 | |||
Unrealized gain on marketable securities | 59,355 | 59,355 | |||
Net Income | 368,207 | 368,207 | |||
Ending balance (shares) at Feb. 28, 2018 | 14,986,367 | ||||
Ending balance at Feb. 28, 2018 | $ 149,864 | 8,901,171 | 101,605 | (760,115) | 8,392,525 |
Reclassification of unrealized gain on marketable securities upon adoption of ASU 2016-01 | $ (101,605) | 101,605 | |||
Exercise of stock options (shares) | 211,196 | ||||
Exercise of stock options | $ 2,112 | (2,112) | |||
Stock based compensation expense | 30,548 | 30,548 | |||
Net Income | 161,587 | 161,587 | |||
Ending balance (shares) at Feb. 28, 2019 | 15,197,563 | ||||
Ending balance at Feb. 28, 2019 | $ 151,976 | $ 8,929,607 | $ (496,923) | $ 8,584,660 |
Business Description
Business Description | 12 Months Ended |
Feb. 28, 2019 | |
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 protect, strengthen or smooth 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 and also provide patented nozzles and generators for manufacturers’ equipment. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Feb. 28, 2019 | |
Notes to Financial Statements | |
Significant Accounting Policies | NOTE 2: SIGNIFICANT ACCOUNTING POLICIES Advertising Expenses - Allowance for doubtful accounts - Cash and Cash Equivalents - Concentration of Credit Risk - The Company had one customer, which accounted for 8% of sales during fiscal 2018. Two customers accounted for 22% of the outstanding accounts receivables at February 28, 2018. Consolidation Earnings Per Share - Equipment, Furnishings and Leasehold Improvements Fair Value of Financial Instruments - Level 1: Quoted prices in active markets. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. The fair values of financial assets of the Company were determined using the following categories at February 28, 2019 and 2018, respectively: Quoted Prices in Active Markets (Level 1) February 28, 2019 2018 Marketable Securities $ 2,365,706 $ 4,405,900 Marketable Securities include mutual funds, certificates of deposit and US Treasury securities, totaling $2,365,706 and $4,405,900 that are considered to be highly liquid and easily tradeable as of February 28, 2019 and 2018, respectively. These securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within the Company’s fair value hierarchy. The Company’s marketable securities are considered to be available-for-sale investments as defined under ASC 320 “Investments – Debt and Equity Securities.” As of February 28, 2019, certain of the Company’s marketable securities were in an unrealized gain position. Unrealized gains and losses are principally due to changes in the fair value of the Company’s investments held as available-for-sale. Because the Company has the ability and intent to hold the securities for the foreseeable future as classified as available-for-sale, the Company does not deem these unrealized gains or losses to be other than temporary. Net unrealized gains at February 28, 2019 are $1,422. Income Taxes Intangible Assets - Inventories - Land and Buildings – Long-Lived Assets - Management Estimates - Marketable Securities New Accounting Pronouncements In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01 requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. ASU 2016-01 is effective for all entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company has evaluated the potential impact this standard may have on the consolidated financial statements, the fair value of the securities from the prior year has been reclassified to Retained Earnings from Other Accumulated Comprehensive Income. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either operating or financing, with such classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 is effective for fiscal years and interim periods within those years beginning after December 15, 2018, and early adoption is permitted. The adoption of ASU 2016-02 will have no material impact on the Company’s financial statements. In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220), “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income”. ASU 2018-02 was issued to allow the reclassification from accumulated other comprehensive income to retained earnings for the stranded tax effect resulting from the Tax Cuts and Jobs Act enacted on December 22, 2017. The Tax Cuts and Jobs Act, among other things, reduced the corporate tax rate from 35% to 21%, which required the re-evaluation of any deferred tax assets and liabilities at the lowered tax rate which potentially could leave a disproportionate tax effect in accumulated other comprehensive income. ASU 2018-02 allows for the election to reclassify these stranded tax effects to retained earnings. ASU 2018-02 is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period for public business entities for reporting periods for which financials statements have not yet been issued. The adoption of ASU 2018-02 will have no material impact on the Company’s financial statements. Other than ASU No. ASU 2016-01, ASU 2016-02 and ASU 2018-02 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 Reclassifications – Research and Product Development Expenses - Shipping and Handling Costs – |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Feb. 28, 2019 | |
Notes to Financial Statements | |
Revenue Recognition | NOTE 3: REVENUE RECOGNITION In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “ Revenue from Contracts with Customers” (Topic 606) The new revenue standard is principle based and interpretation of those principles may vary from company to company based on their unique circumstances. It is possible that interpretation, industry practice, and guidance may evolve as companies and the accounting profession work to implement this new standard. The implementation of the standard did not have a material impact on the financial statements. A majority of the Company’s sales revenue is derived primarily from short term contracts with customers, which, on average, are in effect for less than twelve months. Sales revenue from manufactured equipment transferred at a single point in time accounts for a majority of the Company’s revenue. Sales revenue is recognized when control of the Company’s manufactured equipment is transferred to its customers, in an amount that reflects the consideration the Company expects to receive based upon the agreed transaction price. The Company’s performance obligations are satisfied when it’s 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. At February 28, 2019, the Company had received $1,150,000 in cash deposits, and had issued Letters of Credit in the amount of $808,000 to secure these cash deposits. The Company was utilizing $808,000 of its available credit line to collateralize these letters of credit. |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Feb. 28, 2019 | |
Notes to Financial Statements | |
Stock Based Compensation | NOTE 4: STOCK-BASED COMPENSATION The Company adopted ASC 718, “Share Based Payments.” which requires companies to expense the value of employee stock options and similar awards. During fiscal 2019, the Company granted options to acquire 35,000 shares to employees exercisable at prices from $2.47 to $2.55 and options for 20,000 shares to a member of the board of directors with an exercise price of $3.00. The options vest annually over three years and expire in ten years. The fiscal 2019 options had a weighted average grant date fair value of $0.90 per share. During fiscal 2018, the Company granted options to acquire 110,000 shares to an officer, at an exercise price of $1.06 and options for 20,000 shares exercisable at prices from $1.15 to $1.67 to employees of the Company. The fiscal 2018 options had a weighted average grant date fair value of $0.18 per share. The weighted-average fair value of options has been estimated on the date of grant using the Black-Scholes options-pricing model. The weighted-average Black-Scholes assumptions are as follows: Fiscal Year Ended February 28, 2019 2018 Expected life 8 years 2-8 years Risk free interest rate 2.47% - 2.98% 1.79% - 2.32% Expected volatility 24.82% - 28.24% 12.65% - 22.24% Expected dividend yield 0% 0% In computing the impact, the fair value of each option is estimated on the date of grant based on the Black-Scholes options-pricing model utilizing certain assumptions for a risk-free interest rate; volatility; and expected remaining lives of the awards. The assumptions used in calculating the fair value of share-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and the Company uses different assumptions, the Company’s stock-based compensation expense could be materially different in the future. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. In estimating the Company’s forfeiture rate, the Company analyzed its historical forfeiture rate, the remaining lives of unvested options, and the number of vested options as a percentage of total options outstanding. If the Company’s actual forfeiture rate is materially different from its estimate, or if the Company reevaluates the forfeiture rate in the future, the stock-based compensation expense could be significantly different from what the Company has recorded in the current period. For the years ended February 28, 2019 and 2018, net income and earnings per share reflect the actual deduction for stock-based compensation expense. The impact of applying ASC 718 approximated $30,548 and $41,728 in additional compensation expense for the years then ended, respectively. Such amount is included in general and administrative expenses on the statement of operations. The expense for stock-based compensation is a non-cash expense item. |
Inventories
Inventories | 12 Months Ended |
Feb. 28, 2019 | |
Notes to Financial Statements | |
Inventories | NOTE 5: INVENTORIES Inventories consist of the following: February 28, 2019 2018 Raw materials and subassemblies $ 873,483 $ 673,969 Finished goods 571,640 395,410 Work in process 483,271 489,082 Total 1,928,394 1,558,461 Less: Allowance (270,378 ) (204,378 ) Net inventories $ 1,658,016 $ 1,354,083 |
Buildings, Equipment, Furnishin
Buildings, Equipment, Furnishings and Leasehold Improvements | 12 Months Ended |
Feb. 28, 2019 | |
Property, Plant and Equipment [Abstract] | |
Buildings, Equipment, Furnishings and Leasehold Improvements | NOTE 6: BUILDINGS, EQUIPMENT, FURNISHINGS AND LEASEHOLD IMPROVEMENTS Equipment, furnishings and leasehold improvements consist of the following: February 28, February 28, 2019 2018 Buildings $ 2,250,000 $ 2,250,000 Laboratory equipment 1,140,821 1,082,051 Machinery and equipment 1,211,778 872,598 Leasehold improvements 473,560 413,529 Tradeshow and demonstration equipment 1,086,916 1,070,860 Furniture and fixtures 1,044,222 971,011 Totals 7,207,297 6,660,049 Less: Accumulated depreciation (4,672,818 ) (4,354,309 ) $ 2,534,479 $ 2,305,740 Depreciation expense for the years ended February 28, 2019 and 2018 was $324,381 and $382,777, respectively. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Feb. 28, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | NOTE 7: ACCRUED EXPENSES Accrued expenses consist of the following: February 28, 2019 2018 Accrued compensation $ 284,587 $ 362,405 Estimated warranty costs 62,500 64,050 Accrued commissions 100,114 194,934 Professional fees 65,049 64,928 Other accrued expenses 120,456 206,875 $ 632,706 $ 893,192 |
Revolving Line of Credit
Revolving Line of Credit | 12 Months Ended |
Feb. 28, 2019 | |
Notes to Financial Statements | |
Revolving Line of Credit | NOTE 8: REVOLVING LINE OF CREDIT The Company has a $1,500,000 revolving line of credit at prime which was 5.50% at February 28, 2019 and 4.50% at February 28, 2018. 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 February 28, 2019, $808,000 of the Company’s credit line was being utilized to collateralize letters of credit issued to customers that have remitted cash deposits to the Company on existing orders. The letters of credit expire in 2020. As of February 28, 2019, there were no outstanding borrowings under the line of credit and the unused portion of the credit line was $692,000 as of February 28, 2019. |
Long Term Debt
Long Term Debt | 12 Months Ended |
Feb. 28, 2019 | |
Notes to Financial Statements | |
Long Term Debt | NOTE 9: LONG-TERM DEBT Long-term debt consists of the following: February 28, 2019 2018 Note payable, bank, collateralized by land and buildings, payable in monthly installments of principal and interest of $16,358 through January 2024 with an interest rate of 4.15% and a 10-year term. 870,531 1,026,651 Total long-term debt 870,531 1,026,651 Due within one year 162,816 156,119 Due after one year $ 707,715 $ 870,532 Long-term debt is payable as follows: Fiscal Year ending February 28, 2020 162,816 2021 169,716 2022 177,081 2023 184,677 2024 176,241 $ 870,531 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Feb. 28, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 10: COMMITMENTS AND CONTINGENCIES The Company did not have any material commitments or contingencies as of February 28, 2019. |
Income Taxes
Income Taxes | 12 Months Ended |
Feb. 28, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 11: INCOME TAXES The annual provision (benefit) for income taxes differs from amounts computed by applying the maximum U.S. Federal income tax rate of 21% to pre-tax income as follows: February 28, 2019 2018 Expected federal income tax $ 38,101 $ 156,421 State tax, net of federal 11,430 24,383 Research and development tax credits (19,588 ) (57,994 ) Under accrual of prior year state taxes — 40,793 Change in recapture tax rate from 39.3% to 27.3% — 15,343 Permanent timing difference 2,272 33,107 Change in valuation allowances (36,425 ) (159,300 ) Other adjustments 24,057 39,103 Income tax expense $ 19,847 $ 91,856 The deferred tax asset and liability are comprised of the following: February 28, 2019 2018 Deferred tax asset Inventory $ 74,000 $ 104,800 Allowance for accounts receivable 13,000 18,100 Accrued expenses and other 37,000 111,200 Research tax credits 208,000 208,300 Valuation allowance — (46,000 ) Deferred tax asset – Long Term 332,000 396,400 Deferred tax liability Intangible asset amortization (25,000 ) (25,000 ) Building and leasehold depreciation (346,000 ) (360,400 ) Deferred tax liability – Long Term $ (371,000 ) $ (385,400 ) At February 28, 2019 and 2018, the Company had $208,000 of research and development tax credits being carried forward. Deferred income taxes have been provided by temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. To the extent allowed by GAAP, the Company provides a valuation allowance against the deferred tax assets for amounts when the realization is uncertain. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cut and Jobs Act (the “Tax Act”). The Tax Act establishes new tax laws that affects 2018 and future years, including a reduction in the U.S. federal corporate tax rate to 21%, effective March 1, 2018. Tax returns for the prior three years are subject to examination by the IRS. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Feb. 28, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 12: STOCKHOLDERS’ EQUITY Stock Options Under the 2003 Stock Incentive Plan, as amended (the "2003 Plan"), until May 2013, options were available to be granted to officers, directors, consultants and employees of the Company and its subsidiaries to purchase up to 1,500,000 of the Company's common shares. As of February 28, 2019, there were 100,000 options outstanding under the 2003 Plan, under which no additional options may be granted. Under the 2013 Stock Incentive Plan, option prices must be at least 100% of the fair market value of the common stock at time of grant. For qualified employees, except under certain circumstances specified in the plan or unless otherwise specified at the discretion of the Board of Directors, no option may be exercised prior to one year after date of grant, with the balance becoming exercisable in cumulative installments over a three-year period during the term of the option, and terminating at a stipulated period of time after an employee's termination of employment. During fiscal 2019, the Company granted options to acquire 35,000 shares to employees exercisable at prices from $2.47 to $2.55 and options for 20,000 shares to a member of the board of directors with an exercise price of $3.00. The options vest annually over three years and expire in ten years. During fiscal 2018, the Company granted options to acquire 110,000 shares to an officer, at an exercise price of $1.06 and options for 20,000 shares exercisable at prices from $1.15 to $1.67 to employees of the Company. A summary of the activity of both plans for fiscal 2019 and fiscal 2018 is as follows: Weighted Average Stock Options Exercise Price $ Fair Value Outstanding Exercisable Outstanding Exercisable Vested Balance - February 29, 2017 839,600 395,405 $ 0.91 $ 0.89 $ 0.32 Granted 130,000 1.12 Exercised (57,500 ) (0.84 ) Cancelled — — Balance - February 28, 2018 912,100 425,400 $ 0.96 $ 0.92 $ 0.35 Granted 55,000 $ 2.66 Exercised (371,100 ) (0.96 ) Cancelled (8,000 ) (1.12 ) Balance - February 28, 2019 588,000 171,000 $ 1.10 $ 0.85 $ 0.34 The intrinsic value of the Company’s options exercised during fiscal 2019 and fiscal 2018 was $111,218 and $19,250, respectively. Information, at date of issuance, regarding stock option grants for fiscal 2019: Shares Weighted Average Exercise Price Weighted Average Fair Value Year ended February 28, 2019: Exercise price exceeds market price — — — Exercise price equals market price 55,000 $ 2.66 $ .90 Exercise price is less than market price — — — The aggregate intrinsic value of the Company’s outstanding options at February 28, 2019 and 2018 was $169,608 and $233,776, respectively. The following table summarizes information about stock options outstanding and exercisable at February 28, 2019: Weighted Average Number Remaining Life Exercise Number Outstanding in Years Price Exercisable Range of exercise prices: $0.61 95,000 3.69 $ 0.61 95,000 $0.91 to $0.97 243,500 7.34 $ 0.91 2,500 $1.05 26,000 4.98 $ 1.05 26,000 $1.06 110,000 8.22 $ 1.06 — $1.07 to $1.67 58,500 7.08 $ 1.27 47,500 $2.47 to $2.55 35,000 9.80 $ 2.50 — $3.00 20,000 9.71 $ 3.00 — Total Options: 588,000 171,000 |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Feb. 28, 2019 | |
Notes to Financial Statements | |
Earnings Per Share | NOTE 13: EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share: February 28, 2019 2018 Numerator for basic and diluted earnings per share $ 161,587 $ 368,207 Denominator for basic earnings per share - weighted average 15,107,778 14,968,450 Effects of dilutive securities: Stock options for employees, directors and outside consultants 111,135 126,673 Denominator for diluted earnings per share 15,218,913 15,095,123 Basic Earnings Per Share – Weighted Average $ 0.01 $ 0.02 Diluted Earnings Per Share – Weighted Average $ 0.01 $ 0.02 |
Other Comprehensive Income (Los
Other Comprehensive Income (Loss) | 12 Months Ended |
Feb. 28, 2019 | |
Equity [Abstract] | |
Other Comprehensive Income (Loss) | NOTE 14: OTHER COMPREHENSIVE INCOME (LOSS) The Company adopted ASU 2016-01, “Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities” as of March 1, 2018. Among other requirements, ASU 2016-01 requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. As a result of the adoption of ASU 2016-01, the Company has reclassified the accumulated unrealized gains from Other Accumulated Comprehensive Income to Retained Earnings at March 1, 2018. For fiscal 2019, the unrealized loss on the marketable securities during the year has been disclosed as a separate line item on the Income Statement. For fiscal 2019, the net unrealized loss on the Company’s available-for-sale marketable securities was approximately $100,000. As of February 28, 2019, the unrealized gain on the Company’s available-for-sale marketable securities was approximately $1,000. |
Other Income
Other Income | 12 Months Ended |
Feb. 28, 2019 | |
Other Income and Expenses [Abstract] | |
Other Income | NOTE 15: OTHER INCOME Included in other income is the net revenue related to the rental of the Company’s real estate. For fiscal 2019, the Company’s rental revenue was $84,000, expenses were $61,000 and the net profit was $23,000. For fiscal 2018, the Company’s rental revenue was $78,000, expenses were $59,000 and the net profit was $19,000. |
Significant Customers and Forei
Significant Customers and Foreign Sales | 12 Months Ended |
Feb. 28, 2019 | |
Segment Reporting [Abstract] | |
Significant Customers and Foreign Sales | NOTE 16: SIGNIFICANT CUSTOMERS AND FOREIGN SALES Export sales to customers located outside the United States were approximately as follows: February 28, 2019 2018 Asia Pacific (APAC) 3,659,000 2,464,000 Europe, Middle East, Asia (EMEA) 2,729,000 2,617,000 Latin America 1,172,000 1,112,000 $ 7,560,000 $ 6,193,000 During fiscal 2019 and fiscal 2018, sales to foreign customers accounted for approximately $7,560,000 and $6,193,000, or 65% and 56% respectively, of total revenues. One customer accounted for 14% of the Company’s sales for fiscal 2019. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Feb. 28, 2019 | |
Notes to Financial Statements | |
Subsequent Events | NOTE 17: SUBSEQUENT EVENTS The Company has evaluated subsequent events for disclosure purposes. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Feb. 28, 2019 | |
Notes to Financial Statements | |
Advertising Expenses | Advertising Expenses - |
Allowance for doubtful accounts | Allowance for doubtful accounts - |
Cash and Cash Equivalents | Cash and Cash Equivalents - |
Concentration of Credit Risk | Concentration of Credit Risk - The Company had one customer, which accounted for 8% of sales during fiscal 2018. Two customers accounted for 22% of the outstanding accounts receivables at February 28, 2018. |
Consolidation | Consolidation |
Earnings Per Share | Earnings Per Share - |
Equipment, Furnishings and Leasehold Improvements | Equipment, Furnishings and Leasehold Improvements |
Fair Value of Financial Instruments | Fair Value of Financial Instruments - Level 1: Quoted prices in active markets. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. The fair values of financial assets of the Company were determined using the following categories at February 28, 2019 and 2018, respectively: Quoted Prices in Active Markets (Level 1) February 28, 2019 2018 Marketable Securities $ 2,365,706 $ 4,405,900 Marketable Securities include mutual funds, certificates of deposit and US Treasury securities, totaling $2,365,706 and $4,405,900 that are considered to be highly liquid and easily tradeable as of February 28, 2019 and 2018, respectively. These securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within the Company’s fair value hierarchy. The Company’s marketable securities are considered to be available-for-sale investments as defined under ASC 320 “Investments – Debt and Equity Securities.” As of February 28, 2019, certain of the Company’s marketable securities were in an unrealized gain position. Unrealized gains and losses are principally due to changes in the fair value of the Company’s investments held as available-for-sale. Because the Company has the ability and intent to hold the securities for the foreseeable future as classified as available-for-sale, the Company does not deem these unrealized gains or losses to be other than temporary. Net unrealized gains at February 28, 2019 are $1,422. |
Income Taxes | Income Taxes |
Intangible Assets | Intangible Assets - |
Inventories | Inventories - |
Land and Buildings | Land and Buildings – |
Long-Lived Assets | Long-Lived Assets - |
Management Estimates | Management Estimates - |
Marketable Securities | Marketable Securities |
New Accounting Pronouncements | New Accounting Pronouncements In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01 requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. ASU 2016-01 is effective for all entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company has evaluated the potential impact this standard may have on the consolidated financial statements, the fair value of the securities from the prior year has been reclassified to Retained Earnings from Other Accumulated Comprehensive Income. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either operating or financing, with such classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 is effective for fiscal years and interim periods within those years beginning after December 15, 2018, and early adoption is permitted. The adoption of ASU 2016-02 will have no material impact on the Company’s financial statements. In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220), “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income”. ASU 2018-02 was issued to allow the reclassification from accumulated other comprehensive income to retained earnings for the stranded tax effect resulting from the Tax Cuts and Jobs Act enacted on December 22, 2017. The Tax Cuts and Jobs Act, among other things, reduced the corporate tax rate from 35% to 21%, which required the re-evaluation of any deferred tax assets and liabilities at the lowered tax rate which potentially could leave a disproportionate tax effect in accumulated other comprehensive income. ASU 2018-02 allows for the election to reclassify these stranded tax effects to retained earnings. ASU 2018-02 is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period for public business entities for reporting periods for which financials statements have not yet been issued. The adoption of ASU 2018-02 will have no material impact on the Company’s financial statements. Other than ASU No. ASU 2016-01, ASU 2016-02 and ASU 2018-02 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 |
Reclassifications | Reclassifications – |
Research and Product Development Expenses | Research and Product Development Expenses - |
Shipping and Handling Costs | Shipping and Handling Costs – |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Feb. 28, 2019 | |
Notes to Financial Statements | |
Weighted-average Black-Scholes assumptions | Fiscal Year Ended February 28, 2019 2018 Expected life 8 years 2-8 years Risk free interest rate 2.47% - 2.98% 1.79% - 2.32% Expected volatility 24.82% - 28.24% 12.65% - 22.24% Expected dividend yield 0% 0% |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Feb. 28, 2019 | |
Inventories Tables Abstract | |
Inventories | February 28, 2019 2018 Raw materials and subassemblies $ 873,483 $ 673,969 Finished goods 571,640 395,410 Work in process 483,271 489,082 Total 1,928,394 1,558,461 Less: Allowance (270,378 ) (204,378 ) Net inventories $ 1,658,016 $ 1,354,083 |
Buildings, Equipment, Furnish_2
Buildings, Equipment, Furnishings and Leasehold Improvements (Tables) | 12 Months Ended |
Feb. 28, 2019 | |
Property, Plant and Equipment [Abstract] | |
Equipment, furnishings and leasehold improvements | February 28, February 28, 2019 2018 Buildings $ 2,250,000 $ 2,250,000 Laboratory equipment 1,140,821 1,082,051 Machinery and equipment 1,211,778 872,598 Leasehold improvements 473,560 413,529 Tradeshow and demonstration equipment 1,086,916 1,070,860 Furniture and fixtures 1,044,222 971,011 Totals 7,207,297 6,660,049 Less: Accumulated depreciation (4,672,818 ) (4,354,309 ) $ 2,534,479 $ 2,305,740 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Feb. 28, 2019 | |
Payables and Accruals [Abstract] | |
Accrued expenses | February 28, 2019 2018 Accrued compensation $ 284,587 $ 362,405 Estimated warranty costs 62,500 64,050 Accrued commissions 100,114 194,934 Professional fees 65,049 64,928 Other accrued expenses 120,456 206,875 $ 632,706 $ 893,192 |
Long Term Debt (Tables)
Long Term Debt (Tables) | 12 Months Ended |
Feb. 28, 2019 | |
Long Term Debt - Long-term Debt Payables | |
Long-term debt | February 28, 2019 2018 Note payable, bank, collateralized by land and buildings, payable in monthly installments of principal and interest of $16,358 through January 2024 with an interest rate of 4.15% and a 10-year term. 870,531 1,026,651 Total long-term debt 870,531 1,026,651 Due within one year 162,816 156,119 Due after one year $ 707,715 $ 870,532 |
Long-term debt payables | Fiscal Year ending February 28, 2020 162,816 2021 169,716 2022 177,081 2023 184,677 2024 176,241 $ 870,531 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Feb. 28, 2019 | |
Income Tax Disclosure [Abstract] | |
Income tax reconciliation | February 28, 2019 2018 Expected federal income tax $ 38,101 $ 156,421 State tax, net of federal 11,430 24,383 Research and development tax credits (19,588 ) (57,994 ) Under accrual of prior year state taxes — 40,793 Change in recapture tax rate from 39.3% to 27.3% — 15,343 Permanent timing difference 2,272 33,107 Change in valuation allowances (36,425 ) (159,300 ) Other adjustments 24,057 39,103 Income tax expense $ 19,847 $ 91,856 |
Deferred tax asset and liability components | February 28, 2019 2018 Deferred tax asset Inventory $ 74,000 $ 104,800 Allowance for accounts receivable 13,000 18,100 Accrued expenses and other 37,000 111,200 Research tax credits 208,000 208,300 Valuation allowance — (46,000 ) Deferred tax asset – Long Term 332,000 396,400 Deferred tax liability Intangible asset amortization (25,000 ) (25,000 ) Building and leasehold depreciation (346,000 ) (360,400 ) Deferred tax liability – Long Term $ (371,000 ) $ (385,400 ) |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Feb. 28, 2019 | |
Equity [Abstract] | |
Summary of stock options | Weighted Average Stock Options Exercise Price $ Fair Value Outstanding Exercisable Outstanding Exercisable Vested Balance - February 29, 2017 839,600 395,405 $ 0.91 $ 0.89 $ 0.32 Granted 130,000 1.12 Exercised (57,500 ) (0.84 ) Cancelled — — Balance - February 28, 2018 912,100 425,400 $ 0.96 $ 0.92 $ 0.35 Granted 55,000 $ 2.66 Exercised (371,100 ) (0.96 ) Cancelled (8,000 ) (1.12 ) Balance - February 28, 2019 588,000 171,000 $ 1.10 $ 0.85 $ 0.34 |
Stock option grants | Shares Weighted Average Exercise Price Weighted Average Fair Value Year ended February 28, 2019: Exercise price exceeds market price — — — Exercise price equals market price 55,000 $ 2.66 $ .90 Exercise price is less than market price — — — |
Stock options outstanding and exercisable | Weighted Average Number Remaining Life Exercise Number Outstanding in Years Price Exercisable Range of exercise prices: $0.61 95,000 3.69 $ 0.61 95,000 $0.91 to $0.97 243,500 7.34 $ 0.91 2,500 $1.05 26,000 4.98 $ 1.05 26,000 $1.06 110,000 8.22 $ 1.06 — $1.07 to $1.67 58,500 7.08 $ 1.27 47,500 $2.47 to $2.55 35,000 9.80 $ 2.50 — $3.00 20,000 9.71 $ 3.00 — Total Options: 588,000 171,000 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Feb. 28, 2019 | |
Earnings Per Share - Denominator For Calculation Of Diluted Earnings Per Share | |
Computation of basic and diluted earnings per share | February 28, 2019 2018 Numerator for basic and diluted earnings per share $ 161,587 $ 368,207 Denominator for basic earnings per share - weighted average 15,107,778 14,968,450 Effects of dilutive securities: Stock options for employees, directors and outside consultants 111,135 126,673 Denominator for diluted earnings per share 15,218,913 15,095,123 Basic Earnings Per Share – Weighted Average $ 0.01 $ 0.02 Diluted Earnings Per Share – Weighted Average $ 0.01 $ 0.02 |
Significant Customers and For_2
Significant Customers and Foreign Sales (Tables) | 12 Months Ended |
Feb. 28, 2019 | |
Segment Reporting [Abstract] | |
Export sales to customers located outside the United States | February 28, 2019 2018 Asia Pacific (APAC) 3,659,000 2,464,000 Europe, Middle East, Asia (EMEA) 2,729,000 2,617,000 Latin America 1,172,000 1,112,000 $ 7,560,000 $ 6,193,000 |
Significant Accounting Polici_3
Significant Accounting Policies - Fair values of financial assets of the Company (Details) - USD ($) | Feb. 28, 2019 | Feb. 28, 2018 |
Marketable Securities | $ 2,365,706 | $ 4,405,900 |
Quoted Prices in Active Markets (Level 1) | ||
Marketable Securities | $ 2,365,706 | $ 4,405,900 |
Significant Accounting Polici_4
Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Advertising expense | $ 246,681 | $ 280,348 |
Bad debt expense | $ 0 | $ 0 |
Concentration of Credit Risk | The Company had one customer, which accounted for 14% of sales during fiscal 2019. Two customers accounted for 41% of the outstanding accounts receivables at February 28, 2019. | The Company had one customer, which accounted for 8% of sales during fiscal 2018. Two customers accounted for 22% of the outstanding accounts receivables at February 28, 2018 |
Marketable securities including mutual funds | $ 2,365,706 | $ 4,405,900 |
Net unrealized gains | 1,422 | |
Accumulated amortization of patents | 160,433 | $ 149,654 |
Annual Amortization Expense of Intangible Assets For the Next Five Years | ||
Annual amortization expense this year | 11,000 | |
Annual amortization expense year two | 11,000 | |
Annual amortization expense year three | 11,000 | |
Annual amortization expense year four | 11,000 | |
Annual amortization expense year five | $ 11,000 | |
Buildings | ||
Annual Amortization Expense of Intangible Assets For the Next Five Years | ||
Property, plant and equipment, estimated useful lives | 40 Years | |
Domestic Patents | ||
Useful life of intangible assets | 17 years | |
Foreign Patents | ||
Useful life of intangible assets | 12 years |
Revenue Recognition (Details Na
Revenue Recognition (Details Narrative) | 12 Months Ended |
Feb. 28, 2019USD ($) | |
Proceeds in cash deposits | $ 1,150,000 |
Letter of Credit | |
Letter of credit | $ 808,000 |
Letter of credit, collateral description | The Company was utilizing $808,000 of its available credit line to collateralize these letters of credit. |
Stock-Based Compensation - Weig
Stock-Based Compensation - Weighted-average Black-Scholes assumptions (Details) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Expected life (in years) | 8 years | |
Risk free interest rate, minimum | 2.47% | 1.79% |
Risk free interest rate, maximum | 2.98% | 2.32% |
Expected volatility, minimum | 24.82% | 12.65% |
Expected volatility, maximum | 28.24% | 22.24% |
Expected dividend yield | 0.00% | 0.00% |
Employee Stock Options | Minimum | ||
Expected life (in years) | 2 years | |
Employee Stock Options | Maximum | ||
Expected life (in years) | 8 years |
Stock Based Compensation (Detai
Stock Based Compensation (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Options granted | 55,000 | 130,000 |
Options, exercisable price | $ 2.66 | $ 1.12 |
Additional stock-based compensation expense as a result of applying ASC 718 | $ 30,548 | $ 41,728 |
Officer | ||
Options granted | 110,000 | |
Options, exercisable price | $ 1.06 | |
Employee Stock Options | ||
Options granted | 35,000 | 20,000 |
Options, vesting period | 3 years | |
Options, expiration period | 10 years | |
Weighted average grant date fair value, per share | $ .90 | $ 0.18 |
Employee Stock Options | Minimum | ||
Options, exercisable price | 2.47 | 1.15 |
Employee Stock Options | Maximum | ||
Options, exercisable price | $ 2.55 | $ 1.67 |
Member of Board of Directors | ||
Options granted | 20,000 | |
Options, exercisable price | $ 3 | |
Options, vesting period | 3 years | |
Options, expiration period | 10 years | |
Weighted average grant date fair value, per share | $ .90 |
Inventories (Details)
Inventories (Details) - USD ($) | Feb. 28, 2019 | Feb. 28, 2018 |
Inventories Tables Abstract | ||
Raw materials | $ 873,483 | $ 673,969 |
Finished goods | 571,640 | 395,410 |
Work in process | 483,271 | 489,082 |
Total | 1,928,394 | 1,558,461 |
Less: Allowance | 270,378 | 204,378 |
Net inventories | $ 1,658,016 | $ 1,354,083 |
Buildings, Equipment, Furnish_3
Buildings, Equipment, Furnishings and Leasehold Improvements - Equipment, furnishings and leasehold improvements (Details) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Equipment, furnishings and leasehold improvements | $ 7,207,297 | $ 6,660,049 |
Less: accumulated decpreciation | 4,672,818 | 4,354,309 |
Equipment, furnishings and leasehold improvements, net | 2,534,479 | 2,305,740 |
Depreciation Expense | 324,381 | 382,777 |
Buildings | ||
Equipment, furnishings and leasehold improvements | 2,250,000 | 2,250,000 |
Laboratory Equipment | ||
Equipment, furnishings and leasehold improvements | 1,140,821 | 1,082,051 |
Machinery and Equipment | ||
Equipment, furnishings and leasehold improvements | 1,211,778 | 872,598 |
Leasehold improvements | ||
Equipment, furnishings and leasehold improvements | 473,560 | 413,529 |
Tradeshow and Demonstration Equipment | ||
Equipment, furnishings and leasehold improvements | 1,086,913 | 1,070,860 |
Furniture and Fixtures | ||
Equipment, furnishings and leasehold improvements | $ 1,044,222 | $ 971,011 |
Accrued expenses (Details)
Accrued expenses (Details) - USD ($) | Feb. 28, 2019 | Feb. 28, 2018 |
Payables and Accruals [Abstract] | ||
Accrued compensation | $ 284,587 | $ 362,405 |
Estimated warranty costs | 62,500 | 64,050 |
Accrued commissions | 100,114 | 194,934 |
Professional fees | 65,049 | 64,928 |
Other accrued expenses | 120,456 | 206,875 |
Total accrued expenses | $ 632,706 | $ 893,192 |
Revolving Line of Credit (Detai
Revolving Line of Credit (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Letter of Credit | ||
Line of credit | $ 808,000 | |
Line of credit, maturity date | Feb. 29, 2020 | |
Unused credit line | $ 692,000 | |
Revolving Line of Credit | ||
Line of credit description | The revolving credit line is collateralized by the Company's accounts receivable and inventory. The revolving credit line is payable on demand and must be retired for a 30-day period, once annually. If the Company fails to perform the 30-day annual pay down or if the bank elects to terminate the credit line, the bank may, at its option, convert the outstanding balance to a 36-month term note with payments including interest in 36 equal installments. | The revolving credit line is collateralized by the Company's accounts receivable and inventory. The revolving credit line is payable on demand and must be retired for a 30-day period, once annually. If the Company fails to perform the 30-day annual pay down or if the bank elects to terminate the credit line, the bank may, at its option, convert the outstanding balance to a 36-month term note with payments including interest in 36 equal installments. |
Line of credit | $ 1,500,000 | $ 1,500,000 |
Prime rate | 5.50% | 4.50% |
Long-term debt (Details)
Long-term debt (Details) - USD ($) | Feb. 28, 2019 | Feb. 28, 2018 |
Long-term debt | $ 870,531 | $ 1,026,651 |
Due within one year | 162,816 | 156,119 |
Due after one year | 707,715 | 870,532 |
Note payable, bank, collateralized by land and buildings, payable in monthly installments of principal and interest of $16,358 through January 2024. Interest rate 4.15%. 10 year term. | ||
Long-term debt | $ 870,531 | $ 1,026,651 |
Long Term Debt - Long-term debt
Long Term Debt - Long-term debt payables (Details) - USD ($) | Feb. 28, 2019 | Feb. 28, 2018 |
Fiscal Year ending February 28, | ||
2020 | $ 162,816 | |
2021 | 169,716 | |
2022 | 177,081 | |
2023 | 184,677 | |
2024 | 176,241 | |
Total | $ 870,531 | $ 1,026,651 |
Income Taxes - Income tax recon
Income Taxes - Income tax reconciliation (Details) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Income tax (benefit) reconciliation: | ||
Expected federal income tax | $ 38,101 | $ 156,421 |
State tax, net of federal | 11,430 | 24,383 |
Research and development tax credits | (19,588) | (57,994) |
Under (Overaccrual) of prior year state taxes | 40,793 | |
Change in recapture tax rate from 39.3% to 27.3% | 15,343 | |
Permanent timing difference | 2,272 | 33,107 |
Change in valuation allowances | (36,425) | (159,300) |
Other adjustments | 24,057 | 39,103 |
Income tax expense (benefit) | $ 19,847 | $ 91,856 |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax asset and liability components (Details) - USD ($) | Feb. 28, 2019 | Feb. 28, 2018 |
Deferred tax asset | ||
Inventory | $ 74,000 | $ 186,800 |
Allowance for accounts receivable | 13,000 | 18,100 |
Accrued expenses and other | 37,000 | 111,200 |
Research tax credits | 208,000 | 208,300 |
Valuation allowance | (4,600) | |
Deferred tax asset - Long Term | 332,000 | 396,400 |
Deferred tax liability | ||
Intangible asset amortization | (25,000) | (25,000) |
Building and leasehold depreciation | (346,000) | (360,400) |
Deferred tax liability - Long Term | $ (371,000) | $ (385,400) |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Income Tax Disclosure [Abstract] | ||
Federal income tax rate | 21.00% | 34.00% |
Research and development tax credits | $ 208,000 | $ 208,300 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of stock options (Details) - $ / shares | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Shares | ||
Outstanding at beginning of period (in shares) | 912,100 | 839,600 |
Exercisable at beginning of period (in shares) | 425,400 | 395,405 |
Granted (in shares) | 55,000 | 130,000 |
Exercised (in shares) | (371,100) | (57,500) |
Cancelled (in shares) | (8,000) | |
Outstanding at end of period (in shares) | 588,000 | 912,100 |
Exercisable at end of period (in shares) | 171,000 | 425,400 |
Weighted Average Exercise Price | ||
Outstanding at beginning of period (in dollars per share) | $ 0.96 | $ 0.91 |
Granted (in dollars per share) | 2.66 | 1.12 |
Exercised (in dollars per share) | (0.96) | (0.84) |
Cancelled (in dollars per share) | (1.12) | |
Outstanding at end of period (in dollars per share) | 1.10 | 0.96 |
Exercisable at beginning of period (in dollars per share) | 0.92 | 0.89 |
Exercisable at end of period (in dollars per share) | 0.85 | 0.92 |
Fair value vested at beginning of period (in dollars per share) | 0.35 | 0.32 |
Fair value vested at end of period (in dollars per share) | $ 0.34 | $ 0.35 |
Stockholders' Equity - Stock op
Stockholders' Equity - Stock option grants (Details) - $ / shares | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Information, at date of issuance, regarding stock option grants | ||
Weighted Average Exercise Price | $ 2.66 | $ 1.12 |
Exercise Price Equals Market Price | ||
Information, at date of issuance, regarding stock option grants | ||
Shares | 55,000 | |
Weighted Average Exercise Price | $ 2.66 | |
Weighted Average Fair Value | $ .90 |
Stockholders' Equity - Stock _2
Stockholders' Equity - Stock options outstanding and exercisable (Details) - $ / shares | 12 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2017 | |
Number Outstanding | 588,000 | 912,100 | 839,600 |
Weighted Average Exercise Price | $ 0.85 | $ 0.92 | $ 0.89 |
Number Exercisable | 171,000 | 425,400 | 395,405 |
Employee Stock Options | Exercise Price Range $0.61 | |||
Range of exercise prices | 0.61 | ||
Number Outstanding | 95,000 | ||
Weighted-Average Remaining Life in Years | 3 years 9 months | ||
Weighted Average Exercise Price | $ 0.61 | ||
Number Exercisable | 95,000 | ||
Employee Stock Options | Exercise Price Range $0.91 to $0.97 | |||
Range of exercise prices, low end (in dollars per share) | $ 0.91 | ||
Range of exercise prices, high end (in dollars per share) | $ 0.97 | ||
Number Outstanding | 243,500 | ||
Weighted-Average Remaining Life in Years | 7 years 4 months | ||
Weighted Average Exercise Price | $ 0.91 | ||
Number Exercisable | 2,500 | ||
Employee Stock Options | Exercise Price Range $1.05 | |||
Range of exercise prices | 1.05 | ||
Number Outstanding | 26,000 | ||
Weighted-Average Remaining Life in Years | 4 years 11 months | ||
Weighted Average Exercise Price | $ 1.05 | ||
Number Exercisable | 26,000 | ||
Employee Stock Options | Exercise Price Range $1.06 | |||
Range of exercise prices | 1.06 | ||
Number Outstanding | 110,000 | ||
Weighted-Average Remaining Life in Years | 8 years 3 months | ||
Weighted Average Exercise Price | $ 1.06 | ||
Number Exercisable | |||
Employee Stock Options | Exercise Price Range $1.07 to $1.67 | |||
Range of exercise prices, low end (in dollars per share) | $ 1.07 | ||
Range of exercise prices, high end (in dollars per share) | $ 1.67 | ||
Number Outstanding | 58,500 | ||
Weighted-Average Remaining Life in Years | 7 years 1 month | ||
Weighted Average Exercise Price | $ 1.27 | ||
Number Exercisable | 47,500 | ||
Employee Stock Options | Exercise Price Range $2.47 to $2.55 | |||
Range of exercise prices, low end (in dollars per share) | $ 2.47 | ||
Range of exercise prices, high end (in dollars per share) | $ 2.55 | ||
Number Outstanding | 35,000 | ||
Weighted-Average Remaining Life in Years | 9 years 10 months | ||
Weighted Average Exercise Price | $ 2.50 | ||
Number Exercisable | |||
Employee Stock Options | Exercise Price Range $3.00 | |||
Range of exercise prices | 3 | ||
Number Outstanding | 20,000 | ||
Weighted-Average Remaining Life in Years | 9 years 9 months | ||
Weighted Average Exercise Price | $ 3 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Stock option shares granted | 55,000 | 130,000 |
Weighted Average Exercise Price | $ 2.66 | $ 1.12 |
Iintrinsic value of the Company's options exercised | $ 111,218 | $ 19,250 |
Aggregate intrinsic value of the Company's outstanding options | $ 169,608 | $ 233,776 |
Officer | ||
Stock option shares granted | 110,000 | |
Weighted Average Exercise Price | $ 1.06 | |
Employee Stock Options | ||
Stock option shares granted | 35,000 | 20,000 |
Option vesting description | Options vest annually over three years | |
Expiration of options | Feb. 28, 2029 | |
Employee Stock Options | Minimum | ||
Weighted Average Exercise Price | $ 2.47 | $ 1.15 |
Employee Stock Options | Maximum | ||
Weighted Average Exercise Price | $ 2.55 | $ 1.67 |
Member of Board of Directors | ||
Stock option shares granted | 20,000 | |
Weighted Average Exercise Price | $ 3 | |
Option vesting description | Options vest annually over three years | |
Expiration of options | Feb. 28, 2029 | |
2013 Stock Incentive Plan | ||
Stock options shares available for purchase | 2,500,000 | |
Stock options outstanding | 488,000 | |
Description of option prices | Under the 2013 Stock Incentive Plan, option prices must be at least 100% of the fair market value of the common stock at time of grant. For qualified employees, except under certain circumstances specified in the plan or unless otherwise specified at the discretion of the Board of Directors, no option may be exercised prior to one year after date of grant, with the balance becoming exercisable in cumulative installments over a three year period during the term of the option, and terminating at a stipulated period of time after an employee's termination of employment. | |
Expiration of options | Feb. 28, 2023 | |
2003 Stock Incentive Plan | ||
Stock options shares available for purchase | 1,500,000 | |
Stock options outstanding | 100,000 |
Earnings Per Share - The denomi
Earnings Per Share - The denominator for the calculation of diluted earnings per share (Details) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Earnings Per Share - Denominator For Calculation Of Diluted Earnings Per Share | ||
Numerator for basic and diluted earnings per share | $ 161,587 | $ 368,207 |
Denominator for basic earnings per share - weighted average | 15,107,778 | 14,968,450 |
Effects of dilutive securities: | ||
Stock options for employees, directors and outside consultants | 111,135 | 126,673 |
Denominator for diluted earnings per share | 15,218,913 | 15,095,123 |
Basic Earnings Per Share - Weighted Average | $ 0.01 | $ 0.02 |
Diluted Earnings Per Share - Weighted Average | $ 0.01 | $ 0.02 |
Other Comprehensive Income (L_2
Other Comprehensive Income (Loss) (Details Narrative) | 12 Months Ended |
Feb. 28, 2019USD ($) | |
Other Comprehensive Income Loss Details Narrative Abstract | |
Unrealized loss on available-for-sale securities, during the period, approximate | $ (100,000) |
Unrealized gain on available-for-sale securities, approximate | $ 1,000 |
Other Income (Details Narrative
Other Income (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Net rental revenue | $ 161,587 | $ 368,207 |
Other Income | ||
Rental revenue | 84,000 | 78,000 |
Rental expenses | 61,000 | 59,000 |
Net rental revenue | $ 23,000 | $ 19,000 |
Significant Customers and For_3
Significant Customers and Foreign Sales - Export sales to customers located outside the United States (Details) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Export sales to customers located outside the United States | ||
Total sales | $ 7,560,000 | $ 6,193,000 |
Significant customers and foreign sales | ||
Percent of total revenues | 65.00% | 56.00% |
One Customer | ||
Significant customers and foreign sales | ||
Percent of total revenues | 14.00% | |
Asia Pacific | ||
Export sales to customers located outside the United States | ||
Total sales | $ 3,659,000 | $ 2,464,000 |
Europe, Middle East, Asia | ||
Export sales to customers located outside the United States | ||
Total sales | 2,729,000 | 2,617,000 |
Latin America | ||
Export sales to customers located outside the United States | ||
Total sales | $ 1,172,000 | $ 1,112,000 |