10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: May 31, 2026

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No.: 001-40763

(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)

Issuer's telephone no., including area code: (845) 795-2020

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	SOTK	NASDAQ

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  ☑   No  ☐

Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  ☑   No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. 

Large Accelerated Filer ☐	Accelerated Filer ☐
Non-Accelerated Filer ☑	Smaller reporting company ☑
	Emerging Growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ☐    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 July 6, 2026
Class
Common Stock, par value $.01 per share	15,716,723

SONO-TEK CORPORATION

INDEX

Part I – Financial Information	Page
Item 1 – Condensed Consolidated Financial Statements:	1 – 4
Condensed Consolidated Balance Sheets – May 31, 2026 (Unaudited) and February 28, 2026	1
Condensed Consolidated Statements of Income – Three Months Ended May 31, 2026 and 2025 (Unaudited)	2
Condensed Consolidated Statements of Stockholders' Equity – Three Months Ended May 31, 2026 and 2025 (Unaudited)	3
Condensed Consolidated Statements of Cash Flows – Three Months Ended May 31, 2026 and 2025 (Unaudited)	4
Notes to Unaudited Condensed Consolidated Financial Statements	5 – 12
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations	13 –20
Item 3 – Quantitative and Qualitative Disclosures about Market Risk	20
Item 4 – Controls and Procedures	20
Part II – Other Information	21
Item 1 – Legal Proceedings	21
Item 1A – Risk Factors	21
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds	21
Item 3 – Defaults Upon Senior Securities	21
Item 4 – Mine Safety Disclosures	21
Item 5 – Other Information	21
Item 6 – Exhibits and Reports	21
Signatures and Certifications	22

Item 1 – Condensed Consolidated Financial Statements:

SONO-TEK CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

	May 31, 2026		February 28,
	(Unaudited)		2026
ASSETS
Current Assets:
Cash and cash equivalents	$	8,982,075	$	7,339,403
Marketable securities		7,669,872		7,469,649
Accounts receivable (less allowance of $12,225, respectively)		1,264,932		3,350,953
Inventories		4,063,132		3,923,350
Prepaid expenses and other current assets		659,518		743,295
Total current assets		22,639,529		22,826,650
Land		250,000		250,000
Buildings, equipment, furnishings and leasehold improvements, net		2,138,226		2,173,443
Intangible assets, net		27,892		29,791
Deferred tax asset		809,182		1,141,611
TOTAL ASSETS	$	25,864,829	$	26,421,495
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	935,442	$	1,038,885
Accrued expenses		2,088,229		2,227,401
Customer deposits		2,006,896		3,069,743
Income taxes payable		147,984		255,398
Total current liabilities		5,178,551		6,591,427
Deferred tax liability		75,238		55,909
Total liabilities		5,253,789		6,647,336
Commitments and Contingencies (Note 10)		—		—
Stockholders’ Equity
Common stock, $.01 par value; 25,000,000 shares authorized, 15,716,723 and 15,710,389 issued and outstanding as of May 31, 2026 and February 28, 2026		157,167		157,104
Additional paid-in capital		10,282,508		10,186,858
Accumulated earnings		10,171,365		9,430,197
Total stockholders’ equity		20,611,040		19,774,159
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	25,864,829	$	26,421,495

See notes to unaudited condensed consolidated financial statements.

1 

SONO-TEK CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended May 31,
	2026			2025
Net Sales	$	5,661,159		$	5,132,773
Cost of Goods Sold		2,447,241			2,468,259
Gross Profit		3,213,918			2,664,514
Operating Expenses
Research and product development costs		616,982			668,470
Marketing and selling expenses		1,024,984			858,151
General and administrative costs		674,792			654,525
Total Operating Expenses		2,316,758			2,181,146
Operating Income		897,160			483,368
Interest and Dividend Income		114,624			142,098
Net unrealized (loss) on marketable securities		(26,271	)		(21,923	)
Income Before Income Taxes		985,513			603,543
Income Tax Expense		244,345			118,558
Net Income	$	741,168		$	484,985
Basic Earnings Per Share	$	0.05		$	0.03
Diluted Earnings Per Share	$	0.05		$	0.03
Weighted Average Shares - Basic		15,713,185			15,733,955
Weighted Average Shares - Diluted		15,737,276			15,748,556

See notes to unaudited condensed consolidated financial statements.

2 

SONO-TEK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
THREE MONTHS ENDED MAY 31, 2026 AND 2025

	Common Stock Par Value $.01
	Shares		Amount		Additional Paid – In Capital			Accumulated Earnings		Treasury Stock			Total Stockholders’ Equity
Balance - February 28, 2026		15,710,389	$	157,104	$	10,186,858		$	9,430,197		—		$	19,774,159
Stock-based compensation expense						85,825								85,825
Cashless exercise of stock options		3,934		39		(39	)							—
Proceeds from exercise of stock options		2,400		24		9,864								9,888
Net Income				-		-			741,168		—			741,168
Balance – May 31, 2026 (unaudited)		15,716,723	$	157,167	$	10,282,508		$	10,171,365		—		$	20,611,040
Balance - February 28, 2025		15,751,153	$	157,512	$	10,018,034		$	7,624,516		(7,867	)	$	17,792,195
Stock-based compensation expense						75,163								75,163
Treasury Stock											(79,479	)		(79,479	)
Net Income				-		-			484,985					484,985
Balance – May 31, 2025 (unaudited)		15,751,153	$	157,512	$	10,093,197		$	8,109,501		(87,346	)	$	18,272,864

See notes to unaudited condensed consolidated financial statements.

3 

SONO-TEK CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended May 31,
	2026			2025
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	741,168		$	484,985
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		118,637			153,723
Stock-based compensation expense		85,825			75,163
Inventory write-off		56,671			98,585
Unrealized loss on marketable securities		26,271			21,923
Deferred income tax benefit, net		351,758			(143,356	)
(Increase) Decrease in:
Accounts receivable		2,086,021			(748,916	)
Inventories		(196,453	)		(373,515	)
Prepaid expenses and other assets		83,777			(30,562	)
(Decrease) Increase in:
Accounts payable		(103,443	)		(159,011	)
Accrued expenses		(139,172	)		129,444
Customer deposits		(1,062,847	)		(123,351	)
Income taxes payable		(107,414	)		(307,405	)
Net Cash Provided by (Used in) Operating Activities		1,940,799			(922,293	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment, furnishings and leasehold improvements		(81,521	)		(52,249	)
Sale of marketable securities		299,774			1,364,134
Purchase of marketable securities		(526,268	)		(649,435	)
Net Cash (Used in) Provided by Investing Activities		(308,015	)		662,450
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options		9,888			—
Purchase of treasury stock		—			(79,479	)
Net Cash Provided by (Used in) Financing Activities		9,888			(79,479	)
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS		1,642,672			(339,322	)
CASH AND CASH EQUIVALENTS:
Beginning of period		7,339,403			5,202,361
End of period	$	8,982,075		$	4,863,039
Supplemental Cash Flow Disclosure:
Interest Paid	$	—		$	—
Income Taxes Paid	$	—		$	569,319

See notes to unaudited condensed consolidated financial statements.

4 

SONO-TEK CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED MAY 31, 2026 and 2025

(Unaudited)

NOTE 1: BUSINESS DESCRIPTION

Sono-Tek Corporation (the “Company”, “Sono-Tek”, “We” or “Our”) was incorporated in New York on March 21, 1975. We are the world leader in the design and manufacture of ultrasonic coating systems for applying precise, thin film coatings to add functional properties, protect or strengthen surfaces on parts and components for the microelectronics/electronics, alternative energy, medical, industrial and emerging research & development/other markets. We design and manufacture custom-engineered ultrasonic coating systems incorporating our patented technology, in combination with strong applications engineering knowledge, to assist our customers in achieving their desired coating solutions.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information with the instructions for Form 10-Q and Article 8 of Regulation S-X. Accordingly, the unaudited condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of the Company’s management, all adjustments considered necessary for a fair presentation (consisting of normal recurring adjustments) have been included. The results for the interim periods are not necessarily indicative of what the results will be for the fiscal year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited Consolidated Financial Statements as of and for the fiscal year ended February 28, 2026 (“fiscal year 2026”) contained in the Company’s 2026 Annual Report on Form 10-K filed with the SEC on May 28, 2026. The Company’s current fiscal year ends on February 28, 2027 (“fiscal year 2027”).

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents - Cash and cash equivalents consist of money market mutual funds, short term commercial paper and short-term certificates of deposit with original maturities of 90 days or less. At May 31, 2026, $6,626,383 of the Company's bank deposits exceeded the insured limit provided by the Federal Deposit Insurance Corporation.

Consolidation - The accompanying unaudited condensed consolidated financial statements of the Company include the accounts of the Company and its wholly owned subsidiary, Sono-Tek Industrial Park, LLC (“SIP”) in conformity with generally accepted accounting principles in the United States (“GAAP”). SIP operates as a real estate holding company for the Company’s real estate operations. All intercompany accounts and transactions have been eliminated in consolidation.

Fair Value of Financial Instruments - The Company applies Accounting Standards Codification (“ASC”) 820, Fair Value Measurement (“ASC 820”), which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances.

5 

The carrying amounts of financial instruments reported in the accompanying unaudited condensed consolidated financial statements for current assets and current liabilities approximate the fair value because of the immediate or short-term maturities of the financial instruments.

The valuation hierarchy is composed of three levels. The classification within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The levels within the valuation hierarchy are described below:

Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities.

Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals.

Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities.

The fair values of financial assets of the Company were determined using the following categories at May 31, 2026 and February 28, 2026, respectively:

	Level 1		Level 2		Level 3		Total
Marketable Securities – May 31, 2026	$	7,639,860	$	30,012	$	—	$	7,669,872
Marketable Securities – February 28, 2026	$	7,359,354	$	110,295	$	—	$	7,469,649

Marketable Securities include certificates of deposit and US Treasury securities that are considered to be highly liquid and easily tradeable totaling $7,669,872 and $7,469,649 as of May 31, 2026 and February 28, 2026, respectively. US Treasury securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 and certificates of deposit are classified as Level 2 within the Company’s fair value hierarchy. The Company’s marketable securities are considered to be trading securities as defined under ASC 320 “Investments – Debt and Equity Securities.”

Income Taxes - The Company accounts for income taxes under the asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences of "temporary differences" by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized. The Company uses a recognition threshold and a measurement attribute for financial statement recognition and measurement of tax positions taken or expected to be taken in a return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. As of May 31, 2026 and February 28, 2026, there were no uncertain tax positions.

Inventories - Inventories are stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out (FIFO) method for raw materials, subassemblies and work-in-progress and the specific identification method for finished goods. Management compares the cost of inventory with the net realizable value and, if applicable, an allowance is made for writing down the inventory to its net realizable value, if lower than cost. On an ongoing basis, inventory is reviewed for potential write-down for estimated obsolescence or unmarketable inventory based upon forecasts for future demand and market conditions.

Land and Buildings - Land and buildings are stated at cost. Buildings are being depreciated by use of the straight-line method based on an estimated useful life of forty years.

6 

At May 31, 2026 and February 28, 2026, the Company had land, stated at cost of $250,000.

At May 31, 2026 and February 28, 2026, the Company had buildings, equipment, furnishings and leasehold improvements totaling, $2,138,226 and $2,173,443 respectively, net of accumulated depreciation.

Management Estimates - The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Recent Accounting Pronouncements Not Yet Adopted - In November 2024, the FASB issued ASU 2024-03 – Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which is intended to provide more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation and amortization) included in certain expense captions presented on the consolidated statement of income. The guidance in this ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this ASU will have on its consolidated financial statements and related disclosures.

In March 2025, the FASB issued ASU 2025-05 - Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which clarifies the measurement of expected credit losses for accounts receivable and contract assets arising from revenue transactions within the scope of Topic 606. The amendments require entities to measure expected credit losses for these financial assets using a methodology consistent with the current expected credit loss model while clarifying the interaction between the guidance in Topic 326 and Topic 606. The guidance in this ASU is effective for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years. Early adoption is permitted. The amendments should be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal years of adoption. The Company is currently evaluating the impact that the adoption of ASU 2025-05 will have on its consolidated financial statements and disclosures.

In December 2025, the FASB issued ASU 2025-11 - Interim Reporting (Topic 270): Improvements to Interim Reporting Guidance, which is intended to improve the clarity and organization of the interim reporting guidance in Topic 270. The amendments clarify the scope and presentation requirements for interim financial statements and introduce a general disclosure principle requiring entities to disclose events or transactions occurring since the end of the last annual reporting period that have a material impact on the entity. The guidance also incorporates certain interim disclosure requirements from other Topics into Topic 270 to improve accessibility of the interim reporting guidance. The amendments in this ASU are effective for interim reporting periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2025-11 will have on its consolidated financial statements and disclosures.

Product Warranty - Expected future product warranty expense is recorded when revenue is recognized for product sales.

Revenue Recognition - The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, the core principle of which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps:

7 

• Identification of the contract, or contracts, with a customer

• Identification of the performance obligations in the contract

• Determination of the transaction price

• Allocation of the transaction price to the performance obligations in the contract

• Recognition of revenue when, or as, performance obligations are satisfied

Stock-Based Compensation - The Company currently uses a Black-Scholes option pricing model to calculate the fair value of its stock options. 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 lives of the awards. The Company primarily uses historical data to determine the assumptions to be used in the Black-Scholes model. 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.

ASC 718 requires the recognition of the fair value of stock compensation expense to be recognized over the vesting term of such award. The Company accounts for forfeitures as they occur.

NOTE 3: REVENUE RECOGNITION

The Company’s sales revenue is derived primarily from short term contracts with customers, which are generally in effect for less than twelve months. Sales revenue from manufactured equipment transferred at a single point in time accounts for a majority of the Company’s revenue.

Sales revenue is recognized when control of the Company’s manufactured equipment is transferred to its customers, in an amount that reflects the consideration the Company expects to receive based upon the agreed transaction price. The Company’s performance obligations are satisfied when its customers take control of the purchased equipment, which is based on the contract terms. Based on prior experience, the Company reasonably estimates its sales returns and warranty reserves. Sales are presented net of discounts and allowances. Discounts and allowances are determined when a sale is negotiated. The Company does not grant its customers or independent representatives, the ability to return equipment nor does it grant price adjustments after a sale is complete.

The Company does not capitalize any sales commission costs related to the acquisition of a contract. All commissions related to a performance obligation that are satisfied at a point in time are expensed when the customer takes control of the purchased equipment.

The Company applies the practical expedient in paragraph ASC 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one-year or less. The Company requires cash deposits when an order is placed and subsequent cash deposits before a customer’s equipment is shipped. At the time of shipment, the Company will extend credit terms to its customers. The credit terms do not contain a significant financing component (credit terms over more than one year).

At May 31, 2026, the Company had received approximately $2,007,000 in customer deposits, representing contract liabilities.

At February 28, 2026, the Company had received approximately $3,070,000 in customer deposits, representing contract liabilities. During the three months ended May 31, 2026, the Company recognized $2,379,000 of these deposits as revenue.

8 

The Company’s sales revenue, by product line is as follows:

	Three Months Ended May 31,
	2026		% of total	2025		% of total
Fluxing Systems	$	92,000	2%	$	152,000	3%
In-Line Coating Systems		2,159,000	38%		3,054,000	59%
Multi-Axis Coating Systems		2,075,000	37%		677,000	13%
OEM Systems		231,000	4%		130,000	3%
Spare Parts, Services and Other		1,104,000	20%		1,120,000	22%
TOTAL	$	5,661,000		$	5,133,000

NOTE 4: INVENTORIES

Inventories consist of the following:

	May 31,		February 28,
	2026		2026
Raw materials and subassemblies	$	1,698,898	$	1,931,294
Finished goods		1,191,500		932,866
Work in process		1,172,734		1,059,190
Total	$	4,063,132	$	3,923,350

The Company maintains a valuation allowance for slow moving inventory for raw materials and finished goods. The valuation allowance creates a new cost basis for the inventory, and it is not subsequently marked up through a reduction in the valuation allowance based on any changes in the underlying facts and circumstances. When the valuation allowance is initially recorded, the increase to the allowance is recognized as an increase in cost of sales. The valuation allowance is only reduced if or when the underlying inventory is sold or destroyed, at which time cost of sales recognized would include the previous adjusted cost basis. During the three months ended May 31, 2026 and May 31, 2025, the Company recorded approximately $57,000 and $99,000, respectively in additional allowances for slow moving inventory.

NOTE 5: STOCK BASED COMPENSATION

Stock Options – In May 2023, the Company’s Board of Directors authorized the creation of the 2023 Stock Incentive Plan (the “2023 Plan”) pursuant to which the Company may grant up to 2,500,000 options or shares to officers, directors, employees and consultants of the Company and its subsidiaries. The Company’s shareholders approved the adoption of the 2023 Plan in August 2023. The 2023 Plan replaced the 2013 Stock Incentive Plan (the “2013 Plan”) under which no additional options or shares could be granted after June 2023. At May 31, 2026, 393,183 and 186,660 options were outstanding, respectively, under the 2023 Plan and the 2013 Plan.

The Company accounts for stock based compensation under ASC 718, “Share Based Payments”, which requires companies to expense the value of employee stock options and similar awards. The Company accounts for forfeitures as they occur.

During the three months ended May 31, 2026, the Company granted options to acquire 2,988 shares to an employee at an exercise price of $3.99. Options granted to employees vest over three years and expire ten years from the date of issuance. The options granted during the three months ended May 31, 2026 had a grant date fair value of $2.51 per share.

9 

The weighted-average fair value of options is estimated on the date of grant using the Black-Scholes options-pricing model. The weighted-average Black-Scholes assumptions are as follows:

	Three Months Ended May 31, 2026
Expected Life	8 years
Risk free interest rate	3.92%
Expected volatility	54.85%
Expected dividend yield	0%

For the three months ended May 31, 2026 and 2025 the Company recognized $85,825 and $75,163 in stock based compensation expense, respectively. Such amounts are included in general and administrative expenses on the unaudited condensed consolidated statements of income. Total compensation expense related to non-vested options not yet recognized as of May 31, 2026 was $370,000 and will be recognized over the next three years based on vesting date. The amount of future stock option compensation expense could be affected by any future option grants or by any forfeitures.

The aggregate intrinsic value of the Company’s vested and exercisable options at May 31, 2026 was approximately $183,839.

NOTE 6: EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per share:

	Three Months Ended May 31,
	2026		2025
Numerator for basic and diluted earnings per share	$	741,168	$	484,985
Denominator for basic earnings per share - weighted average		15,713,185		15,733,955
Effects of dilutive securities:
Stock options for employees and directors		24,091		14,601
Denominator for diluted earnings per share		15,737,276		15,748,556
Basic Earnings Per Share	$	0.05	$	0.03
Diluted Earnings Per Share	$	0.05	$	0.03

In the first quarter of fiscal year 2027, 149,425 stock options were excluded from the computation of diluted income per share because the effect of inclusion would have been anti-dilutive.

NOTE 7: REVOLVING LINE OF CREDIT

The Company has a $1,500,000 revolving line of credit at prime which was 6.75% at May 31, 2026 and February 28, 2026. 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. At May 31, 2026, there were no outstanding borrowings under the revolving line of credit.

The Company has a $750,000 equipment line of credit at prime plus 0.50%, which was 7.25% at May 31, 2026. At May 31, 2026, there were no outstanding borrowings under the equipment line of credit.

10 

NOTE 8: CUSTOMER CONCENTRATIONS AND FOREIGN SALES

Export sales to customers located outside the United States and Canada were approximately as follows:

	May 31, 2026		May 31, 2025
Asia Pacific (APAC)		738,000		597,000
Europe, Middle East, Africa (EMEA)		930,000		897,000
Latin America		463,000		96,000
	$	2,131,000	$	1,590,000

During the three months ended May 31, 2026 and 2025, sales to foreign customers accounted for approximately $2,131,000 and $1,590,000, or 38% and 31%, respectively, of total revenues.

The Company had two customers which accounted for 53% of sales during the first quarter of fiscal 2027. Two customers accounted for 43% of the outstanding accounts receivables at May 31, 2026.

The Company had one customer which accounted for 57% of sales during the first quarter of fiscal 2026. Three customers accounted for 61% of the outstanding accounts receivables February 28, 2026.

NOTE 9: SEGMENT DATA

The Company operates in one segment. The chief operating decision maker, who is responsible for allocating resources and assessing performance, has been identified as the Chief Executive Officer (the “CODM”). The CODM assesses the financial performance of the Company and decides how to allocate resources based on Operating income.

The following table presents the Company’s segment data (rounded to the nearest thousand):

	Three Months Ended May 31,
	2026		2025
Net Sales	$	5,661,000	$	5,133,000
Direct Cost of Goods Sold
Materials & Freight		1,887,000		1,872,000
Production Labor		111,000		76,000
Depreciation		34,000		50,000
Other		133,000		119,000
		2,165,000		2,117,000
Service Department
Salaries		146,000		138,000
Travel		51,000		37,000
Outside Installations		-		11,000
Warranty Costs		35,000		98,000
Other		50,000		67,000
		282,000		351,000
Total Cost of Goods & Service	$	2,447,000	$	2,468,000
Gross Profit		3,214,000		2,665,000
Research & Product Development
Salaries		458,000		474,000
Insurance		35,000		35,000
Depreciation		32,000		45,000
R & D Materials		39,000		66,000
Other		53,000		48,000
		617,000		668,000

11 

Marketing and Selling
Salaries		500,000		437,000
Insurance		61,000		47,000
Commissions		227,000		152,000
Travel & Entertainment		29,000		29,000
Advertising / Trade Show		117,000		108,000
Depreciation		22,000		25,000
Other		69,000		60,000
		1,025,000		858,000
General and Administrative
Salaries		294,000		272,000
Insurance		56,000		45,000
Professional Fees		105,000		84,000
Corporate Expenses		90,000		132,000
Stock Based Compensation		86,000		75,000
Depreciation		15,000		17,000
Misc Other		29,000		30,000
		675,000		655,000
Total Operating Expenses		2,317,000		2,181,000
Operating Income		897,000		484,000
Interest Income & Unrealized (Loss)/Gain		88,000		120,000
Income Before Taxes		985,000		604,000
Income Tax Expense		244,000		119,000
Net Income	$	741,000	$	485,000

NOTE 10: COMMITMENTS AND CONTINGENCIES

The Company did not have any material commitments or contingencies as of May 31, 2026.

The Company is subject, from time to time, to claims by third parties under various legal disputes. The defense of such claims, or any adverse outcome relating to any such claims, could have a material adverse effect on the Company’s liquidity, financial condition, and cash flows. As of May 31, 2026, the Company did not have any pending legal actions.

12 

ITEM 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

We discuss expectations regarding our future performance, such as our business outlook, in our annual and quarterly reports, news releases, and other written and oral statements. These “forward-looking statements” are based on currently available competitive, financial and economic data and our operating plans. They are inherently uncertain, and investors must recognize that events could turn out to be significantly different from our expectations and could cause actual results to differ materially. These factors include, among other considerations, general economic and business conditions; political, regulatory, tax, competitive and technological developments affecting our operations or the demand for our products; inflationary and supply chain pressures; the recovery of the Electronics/Microelectronics and Medical markets; rebound of sales to the industrial market in the second quarter of fiscal year 2027; maintenance of increased order backlog; the imposition of tariffs; timely development and market acceptance of new products and continued customer validation of our coating technologies; adequacy of financing; capacity additions, the ability to enforce patents; maintenance of operating leverage; consummation of order proposals; completion of large orders on schedule and on budget; continued sales growth in the medical and alternative energy markets; successful transition from primarily selling ultrasonic nozzles and components to a more complex business providing complete machine solutions and higher value subsystems which are sold at higher average selling prices; and realization of quarterly and annual revenues within the forecasted range of sales guidance.

We undertake no obligation to update any forward-looking statement.

Overview

Founded in 1975, Sono-Tek Corporation is a global leader in designing and manufacturing ultrasonic coating systems that are shaping industries and driving innovation worldwide. Our ultrasonic coating systems are used to apply thin films onto parts used in diverse industries, including microelectronics, alternative energy, medical devices, advanced industrial manufacturing, and research and development sectors worldwide. Sono-Tek’s move into the clean energy sector is showing transformative results in next-gen solar cells, fuel cells, green hydrogen generation, and carbon capture applications as we shape a sustainable future.

Our product line is rapidly evolving, transitioning from R&D to high-volume production machines with significantly higher average selling prices, showcasing our market leadership and adaptability. Over the last decade, we have shifted our business from primarily selling ultrasonic nozzles and components to providing complete machine solutions and higher-value subsystems to original equipment manufacturers (OEMs). This strategy has resulted in significant growth of our average unit selling price, with our larger machines often selling for over $300,000 and system prices sometimes reaching over $1,000,000. Consequently, we have broadened our addressable market and believe we can grow sales on a larger scale. We expect that we will experience wide variations in both order flow and shipments from quarter to quarter.

Our comprehensive suite of thin film coating solutions and application consulting services, provided by our expert applications engineers to guide our customers in developing the complete coating process, ensures unparalleled results for our clients. These solutions help some of the world’s most promising companies achieve technological breakthroughs and bring them to market. In anticipation of customer demands, our significant focus on R&D efforts allows us to keep pace with industry trends while continuously innovating.  We strategically deliver our products through a network of direct sales personnel, carefully chosen independent distributors, and experienced sales representatives located in North America, Latin America, Europe, and Asia. This network ensures efficient market reach across diverse sectors around the globe. Approximately 38% of our sales were generated outside the United States and Canada in the first three months of fiscal year 2027.

13 

We continue to expand our sales capabilities by increasing the size of our direct sales force and adding new distributors and sales representatives. In addition, we have established testing labs at our distribution partner sites in China, Taiwan, Germany, Turkey, Korea, and Japan, while also expanding our first testing lab co-located with our manufacturing facilities in New York. These labs provide significant value for demonstrating the capabilities of our equipment to prospective customers and enable us to develop custom solutions to meet their needs.

Our growth strategy is focused on leveraging our innovative technologies, proprietary know-how, unique talent and experience, and global reach to develop thin-film coating technologies that enable better outcomes for our customers’ products and processes.

First Quarter Fiscal Year 2027 Highlights (compared with the first quarter of fiscal year 2026 unless otherwise noted) We refer to the three-month periods ended May 31, 2026 and 2025 as the first quarter of fiscal year 2027 and fiscal year 2026, respectively.

• Net Sales for the quarter increased 10% to $5,661,000 compared to $5,133,000 in the prior year period, driven by strong shipments to the Medical market, including specialty stent coating systems and Drug-Eluting Balloon coating platforms.  

• Combined equipment and service-related backlog at May 31, 2026 was $7.73 million, compared to backlog of $7.48 million at May 31, 2025, an increase of $250,000 or 3%.  

• Gross Profit increased 21% to $3.21 million, compared to $2.67 million in the prior-year period. Gross profit margin expanded 500 basis points to 57%, up from 52% in the first quarter of fiscal 2026. The improvement reflects an unusually favorable product mix, including increased shipments of high-value medical device coating systems, particularly stent coating and Drug-Eluting Balloon coating platforms. In addition, a concentration of shipments to U.S.-based customers resulted in lower distributor discounts and commission expenses, supporting stronger margin performance.

• Operating income increased 86% or $414,000 to $897,000, compared to $483,000 in the prior year period.  The increase is due to the current period’s increase in gross profit, partially offset by an increase in operating expenses.

• Interest and dividend income decreased to $115,000 for the first quarter of fiscal 2027, compared to $142,000 in the prior year period, due to a slight reduction in interest rates.

• As of May 31, 2026, we had $16.6 million in cash, cash equivalents and marketable securities and no outstanding debt.  This compares to $14.8 million as of February 28, 2026.

14 

Results of Operations

Sales:

Product Sales:

	Three Months Ended May 31,						Change
	2026		% of total	2025		% of total	$			%
Fluxing Systems	$	92,000	2%	$	152,000	3%		(60,000	)	(39%)
In-Line Coating Systems		2,159,000	38%		3,054,000	59%		(895,000	)	(29%)
Multi-Axis Coating Systems		2,075,000	37%		677,000	13%		1,398,000		206%
OEM Systems		231,000	4%		130,000	3%		101,000		78%
Spare Parts, Services and Other		1,104,000	20%		1,120,000	22%		(16,000	)	(1%)
TOTAL	$	5,661,000		$	5,133,000		$	528,000		10%

For the first quarter of fiscal year 2027, In-Line Coating Systems sales decreased $895,000, or 29%, to $2.16 million, impacted by a significant decrease in sales to the clean energy sector for a solar coating customer in the first quarter of fiscal year 2026 that did not repeat in the current quarter. Multi-Axis Coating Systems increased $1.39 million, or 206%, to $2.08 million. OEM Systems increased $101,000, or 78%, to $231,000, driven by strong sales to our fluxer OEM partners, and strong sales to a China-based OEM partners in the semiconductor market. Fluxing Systems decreased 39%, or $60,000, to $92,000. Spare Parts, Services, and Other remained relatively stable at $1.1 million.

Market Sales: 

	Three Months Ended May 31,						Change
	2026		% of total	2025		% of total	$			%
Electronics/Microelectronics	$	863,000	15%	$	943,000	19%		(80,000	)	(8%)
Medical		3,946,000	70%		809,000	16%		3,137,000		388%
Alternative Energy/Clean		319,000	6%		3,248,000	63%		(2,929,000	)	(90%)
Emerging R&D and Other		3,000	0%		14,000	0%		(11,000	)	(79%)
Industrial		530,000	9%		119,000	2%		411,000		345%
TOTAL	$	5,661,000		$	5,133,000		$	528,000		10%

Sales to the Alternative Energy/Clean market decreased $2.93 million, or 90%, to $319,000, impacted by reduced electrolysis demand following government policy shifts, and no solar shipments. Medical market sales increased $3.14 million, or 388%, to $3.95 million led by strong specialty stent coating in the US, and DEB coating system sales in the US, China and Europe. Sales to the Electronics/Microelectronics market declined $80,000, or 8%, to $863,000. Industrial sales increased $411,000, or 345%, to $530,000 influenced by some significant rework orders on older machines that needed upgrades, and an R&D textile coating machine for nano-coatings.

Geographic Sales:

	Three Months Ended
	May 31,				Change
	2026		2025		$			%
U.S. & Canada	$	3,530,000	$	3,543,000	$	(13,000	)	0%
Asia Pacific (APAC)		738,000		597,000		141,000		24%
Europe, Middle East, Africa (EMEA)		930,000		897,000		33,000		4%
Latin America		463,000		96,000		367,000		382%
TOTAL	$	5,661,000	$	5,133,000	$	528,000		10%

15 

In the first quarter of fiscal year 2027, sales to customers in the U.S. and Canada were $3,530,000, essentially flat compared to sales of $3,543,000 in the prior year period. Asia Pacific (APAC) sales grew 24%, or $141,000, to $738,000, influenced by increased sales to China in the medical sector for DEB coating. EMEA sales increased $34,000, or 4%, to $930,000, and Latin America sales increased $367,000, or 382%, to $463,000, influenced by a $242,000 shipment to Costa Rica for a specialty medical device coating application used in advanced cardiac procedures, requiring precise deposition of a functional coating onto complex device geometries.

Gross Profit:

	Three Months Ended May 31,				Change
	2026		2025		$			%
Net Sales	$	5,661,000	$	5,133,000	$	528,000		10%
Cost of Goods Sold		2,447,000		2,468,000		(21,000	)	(1%)
Gross Profit	$	3,214,000	$	2,665,000	$	549,000		21%
Gross Profit %		57%		52%

Gross profit increased $549,000, or 21%, to $3.21 million for the first quarter of fiscal 2027, compared with $2.67 million in the prior-year period. Gross profit percentage improved by 500 basis points, rising to 57% from 52%. The strong gross margin performance during the quarter benefited from an especially favorable product mix, including increased shipments of high-value medical device coating systems, particularly stent coating and Drug-Eluting Balloon coating platforms. Our improved gross margin achieved during the current quarter may vary going forward from quarter to quarter because of changing product mix, which may influence future gross margin performance. In addition, a concentration of shipments to U.S.-based customers resulted in lower distributor discounts and commission expenses, supporting stronger margin performance.

Operating Expenses:

	Three Months Ended
	May 31,				Change
	2026		2025		$			%
Research and product development	$	617,000	$	668,000	$	(51,000	)	(8%)
Marketing and selling	$	1,025,000	$	858,000	$	167,000		19%
General and administrative	$	675,000	$	655,000	$	20,000		3%
Total Operating Expenses	$	2,317,000	$	2,181,000	$	136,000		6%

Research and Product Development:

Research and product development costs decreased in the first quarter of fiscal year 2027 due to a decrease in salary expense, a decrease in research and development materials and a decrease in supplies. These decreases were partially offset by an increase in miscellaneous expenses.

Marketing and Selling:

Marketing and selling expenses increased in the first quarter of fiscal year 2027 due to an increase in salary expense related to our sales application lab, an increase in insurance expense, an increase in trade show expenses and an increase in other miscellaneous expenses. Our sales and marketing costs are variable, and a large portion of the costs are dependent upon trade shows and where geographically our sales are generated. We anticipate that our costs will increase in the future as we increase our trade show presence and the potential change in geographic origin of our sales from our in-house sales team to our external distributors.

16 

In the first quarter of fiscal 2027, we expended approximately $227,000 for commissions as compared with $152,000 in the prior year period, an increase of $75,000. The increase in commission expense during the current period is due to the increase in sales during the period and to increased commission rates for salesmen who had temporarily agreed to lower rates in the prior year period because of higher sales volumes associated with one customer.

We expect our marketing and sales expenses to increase in fiscal 2027 as we invest in additional sales personnel, forward deployed engineering personnel, and programming talent to support new business opportunities, particularly those associated with production systems that have high average sales prices to drive future growth.

General and Administrative:

General and administrative expenses increased in the first quarter of fiscal 2027 due to increases in salary expense, insurance, professional fees and stock-based compensation. These increases were partially offset by a decrease in other corporate expenses.

Operating Income:

In the first quarter of fiscal year 2027, our operating income increased $414,000 to $897,000 compared to $483,000 in the first quarter of fiscal year 2026. The increase is primarily due to the current period’s increase in gross profit.

Interest and Dividend Income and Unrealized Loss:

Interest and dividend income decreased $27,000 to $115,000 in the first quarter of fiscal year 2027 as compared with $142,000 in the prior year period, due to a slight reduction in interest rates. Our present investment policy is to invest excess cash in highly liquid, lower risk US Treasury securities. At May 31, 2026, the majority of our holdings are rated at or above investment grade.

Income Tax Expense:

We recorded an income tax expense of $244,000 for the first quarter of fiscal year 2027 compared with $119,000 for the first quarter of fiscal year 2026. The increase in income tax expense in the current period is due to the increase in income before income taxes offset by the application of available research and development tax credits.

Net Income:

Net income increased by $256,000 to $741,000 in the first quarter of fiscal year 2027 compared with $485,000 in the prior year period. The increase in net income is primarily a result of an increase in gross profit partially offset by an increase in operating expenses and income tax expense.

Liquidity and Capital Resources

Working Capital – Our working capital increased $1,226,000 to $17,461,000 at May 31, 2026 from $16,236,000 at February 28, 2026. The increase in working capital was primarily the result of the current period's net income and non-cash charges partially offset by purchases of equipment.

We aggregate cash, cash equivalents and marketable securities in managing our balance sheet and liquidity. For purposes of the following analysis, the total is referred to as “Cash.” At May 31, 2026 and February 28, 2026, our working capital included: 

	May 31, 2026		February 28, 2026		Cash Increase
Cash and cash equivalents	$	8,982,000	$	7,339,000	$	1,643,000
Marketable securities		7,670,000		7,470,000		200,000
Total	$	16,652,000	$	14,809,000	$	1,843,000

17 

The following table summarizes the accounts and the major reasons for the $1,843,000 increase in “Cash”:

	Impact on Cash		Reason
Net income, after adjustments to reconcile to net cash	$	1,139,000	To reconcile increase in cash.
Accounts receivable decrease		2,086,000	Timing of cash receipts.
Inventories increase		(196,000)	Additional inventory purchases and increase in work in process due to customer requirements.
Customer deposits decrease		(1,063,000)	Decrease due to completed sales.
Accounts payable decrease		(103,000)	Timing of disbursements.
Accrued expenses decrease		(139,000)	Timing of disbursements.
Prepaid and Other Assets increase		84,000	Decreased prepaid expenses.
Income taxes payable decrease		107,000	Timing of disbursements.
Equipment purchases		(82,000)	Equipment and facilities upgrade.
Proceeds from exercise of stock options		10,000	Received from stock options.
Net increase in Cash	$	1,843,000

Stockholders’ Equity – Stockholder’s Equity increased $837,000 from $19,774,000 at February 28, 2026 to $20,611,000 at May 31, 2026. The increase is a result of the current period’s net income of $741,000, proceeds from exercise of stock options of $10,000, and $86,000 in additional equity related to stock-based compensation awards. The details of stock-based compensation awards are explained in Note 5 in our financial statements.

Operating Activities – We generated $1,941,000 of cash in our operating activities in the first quarter of fiscal year 2027 compared with using $922,000 in the prior year period, an increase of $2,863,000. The increase in cash generated by operating activities was the result of a decrease in accounts receivable in the current period, partially offset by a decrease in customer deposits.

Investing Activities – For the first quarter of fiscal year 2027, our investing activities used $308,000 of cash compared with them providing $662,000 for the first quarter of fiscal 2026. For the first quarters of fiscal years 2027 and 2026, we used $82,000 and $52,000, respectively, for the purchase or manufacture of equipment, furnishings and leasehold improvements.

In the first quarter of fiscal year 2027, net purchases of marketable securities used $226,000 of cash compared to net sales of marketable securities generating $715,000 of cash in the prior year period.

Financing Activities – In the first quarter of fiscal year 2027, we received $10,000 for the exercise of stock options. In the first quarter of fiscal year 2026, we used $79,000 of cash for the purchase of treasury stock.

Net Increase in Cash and Cash Equivalents – In the first quarter of fiscal 2027, our cash balance increased $1,643,000 as compared to a decrease of $339,000 in the first quarter of fiscal 2026. In the first quarter of fiscal 2027, our operating activities generated $1,941,000 of cash and our marketable securities used $226,000 of cash. In addition, we used $82,000 for the purchase or manufacture of equipment, furnishings and leasehold improvements and we received $10,000 for the exercise of stock options.

18 

Critical Accounting Estimates

The discussion and analysis of the Company’s financial condition and results of operations are based upon the consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amount of assets and liabilities, revenues and expenses, and related disclosure on contingent assets and liabilities at the date of the financial statements. Actual results may differ from these estimates under different assumptions and conditions.

Management’s estimates and judgments are continually evaluated and are based on historical experience and expectations regarding future events that are believed to be reasonable under the specific circumstances.

Critical accounting estimates are defined as those that are reflective of significant judgments and uncertainties and may potentially result in materially different results under different assumptions and conditions. The Company believes that critical accounting policies are limited to those described below. For a detailed discussion on the application of these and other accounting policies see Note 2 to the Company’s consolidated financial statements included in Form 10-K for the year ended February 28, 2026.

Accounting for Income Taxes

The Company accounts for income taxes under the asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences of “temporary differences” by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized. We use a recognition threshold and a measurement attribute for financial statement recognition and measurement tax positions taken or expected to be taken in a return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. As of May 31, 2026 and May 31, 2025, there were no uncertain tax provisions.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, the core principle of which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services.

Judgment is required when determining at what point in time control of the Company’s manufactured equipment is transferred to its customers. Management’s judgment is based on each customer contract and the transfer of control of the equipment to the customer. The sales revenue to be recorded is based on each contract.

Impact of New Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03 – Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which is intended to provide more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation and amortization) included in certain expense captions presented on the consolidated statement of operations. The guidance in this ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this ASU will have on its consolidated financial statements and related disclosures.

19 

In March 2025, the FASB issued ASU 2025-05 - Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which clarifies the measurement of expected credit losses for accounts receivable and contract assets arising from revenue transactions within the scope of Topic 606. The amendments require entities to measure expected credit losses for these financial assets using a methodology consistent with the current expected credit loss model while clarifying the interaction between the guidance in Topic 326 and Topic 606. The guidance in this ASU is effective for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years. Early adoption is permitted. The amendments should be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal years of adoption. The Company is currently evaluating the impact that the adoption of ASU 2025-05 will have on its consolidated financial statements and disclosures.

In December 2025, the FASB issued ASU 2025-11 - Interim Reporting (Topic 270): Improvements to Interim Reporting Guidance, which is intended to improve the clarity and organization of the interim reporting guidance in Topic 270. The amendments clarify the scope and presentation requirements for interim financial statements and introduce a general disclosure principle requiring entities to disclose events or transactions occurring since the end of the last annual reporting period that have a material impact on the entity. The guidance also incorporates certain interim disclosure requirements from other Topics into Topic 270 to improve accessibility of the interim reporting guidance. The amendments in this ASU are effective for interim reporting periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2025-11 will have on its consolidated financial statements and disclosures.

Other than ASU 2024-03, ASU 2025-05 and ASU 2025-11 discussed above, accounting pronouncements issued but not yet effective have been deemed to be not applicable or the adoption of such accounting pronouncements is not expected to have a material impact on the financial statements of the Company.

ITEM 3 - Quantitative and Qualitative Disclosures about Market Risk

The Company does not issue or invest in financial instruments or derivatives for trading or speculative purposes. Substantially all of the operations of the Company are conducted in the United States, and, as such, are not subject to material foreign currency exchange rate risk. All of our sales transactions are completed in US dollars.

Although the Company's assets included $8,982,000 in cash and $7,670,000 in marketable securities, the market rate risk associated with changing interest rates in the United States is not material.

ITEM 4 – Controls and Procedures

The Company has established and maintains “disclosure controls and procedures” (as those terms are defined in Rules 13a –15(e) and 15d-15(e) under the Securities and Exchange Act of 1934 (the “Exchange Act”). R. Stephen Harshbarger, Chief Executive Officer (principal executive) and Stephen J. Bagley, Chief Financial Officer (principal accounting officer) of the Company, have evaluated the Company’s disclosure controls and procedures as of May 31, 2026. Based on this evaluation, they have concluded that the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and (2) accumulated and communicated to Management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding timely disclosure.

In addition, there were no changes in the Company’s internal controls over financial reporting during the first fiscal quarter of fiscal year 2027 that have materially affected, or are reasonably likely to materially affect, internal controls over financial reporting.

20 

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings
	None
Item 1A.	Risk Factors
	There are no material changes from risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the year ended February 28, 2026.
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds
	None
Item 3.	Defaults Upon Senior Securities
	None
Item 4.	Mine Safety Disclosures
	None
Item 5.	Other Information
	None
Item 6.	Exhibits and Reports
	31.1 – 31.2 – Rule 13a - 14(a)/15d – 14(a) Certification
	32.1 – 32.2 – Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.

101.INS	Inline XBRL Instance Document–the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document
101.SCH	Inline XBRL Taxonomy Extension Schema
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase
104	Cover page formatted as Inline XBRL and contained in Exhibit 101

21 

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: July 8, 2026

	SONO-TEK CORPORATION
	(Registrant)
By:	/s/ R. Stephen Harshbarger
	R. Stephen Harshbarger
	Chief Executive Officer
By:	/s/ Stephen J. Bagley
	Stephen J. Bagley
	Chief Financial Officer

22 

EX-31.2

Exhibit 31.2

RULE 13a-14/15d – 14(a) CERTIFICATION

I, Stephen J. Bagley, Chief Financial Officer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Sono-Tek Corporation;

2. Based on my knowledge, this 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 circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;

4. Sono-Tek Corporation’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d – 15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. Sono-Tek Corporation’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; 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 over financial reporting.

Date:  July 8, 2026	/s/ Stephen J. Bagley
	Stephen J. Bagley
	Chief Financial Officer

EX-32.1

Exhibit 32.1

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 (the “Company”) on Form 10Q for the period ended May 31, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”). I, R. Stephen Harshbarger, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 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.

Date: July 8, 2026

/s/ R. Stephen Harshbarger

R. Stephen Harshbarger

Chief Executive Officer

EX-32.2

Exhibit 32.2

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 (the “Company”) on Form 10Q for the period ended May 31, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”). I, Stephen J. Bagley, Chief Financial Officer, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 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.

Date: July 8, 2026

/s/ Stephen J. Bagley

Stephen J. Bagley

Chief Financial Officer

XML

Cover - shares	3 Months Ended
	May 31, 2026	Jul. 06, 2026
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	May 31, 2026
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2027
Current Fiscal Year End Date	--02-28
Entity File Number	001-40763
Entity Registrant Name	SONO TEK CORP
Entity Central Index Key	0000806172
Entity Tax Identification Number	14-1568099
Entity Incorporation, State or Country Code	NY
Entity Address, Address Line One	2012 Rt. 9W
Entity Address, City or Town	Milton
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	12547
City Area Code	845
Local Phone Number	795-2020
Title of 12(b) Security	Common Stock, $0.01 par value per share
Trading Symbol	SOTK
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		15,716,723

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	May 31, 2026	Feb. 28, 2026
Current Assets:
Cash and cash equivalents	$ 8,982,075	$ 7,339,403
Marketable securities	7,669,872	7,469,649
Accounts receivable (less allowance of $12,225, respectively)	1,264,932	3,350,953
Inventories	4,063,132	3,923,350
Prepaid expenses and other current assets	659,518	743,295
Total current assets	22,639,529	22,826,650
Land	250,000	250,000
Buildings, equipment, furnishings and leasehold improvements, net	2,138,226	2,173,443
Intangible assets, net	27,892	29,791
Deferred tax asset	809,182	1,141,611
TOTAL ASSETS	25,864,829	26,421,495
Current Liabilities:
Accounts payable	935,442	1,038,885
Accrued expenses	2,088,229	2,227,401
Customer deposits	2,006,896	3,069,743
Income taxes payable	147,984	255,398
Total current liabilities	5,178,551	6,591,427
Deferred tax liability	75,238	55,909
Total liabilities	5,253,789	6,647,336
Commitments and Contingencies (Note 10)
Stockholders’ Equity
Common stock, $.01 par value; 25,000,000 shares authorized, 15,716,723 and 15,710,389 issued and outstanding as of May 31, 2026 and February 28, 2026	157,167	157,104
Additional paid-in capital	10,282,508	10,186,858
Accumulated earnings	10,171,365	9,430,197
Total stockholders’ equity	20,611,040	19,774,159
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 25,864,829	$ 26,421,495

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($)	May 31, 2026	Feb. 28, 2026
Statement of Financial Position [Abstract]
Allowance for doubtful receivables	$ 12,225	$ 12,225
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	25,000,000	25,000,000
Common stock, shares issued	15,716,723	15,710,389
Common stock, shares outstanding	15,716,723	15,710,389

XML

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($)	3 Months Ended
	May 31, 2026	May 31, 2025
Income Statement [Abstract]
Net Sales	$ 5,661,159	$ 5,132,773
Cost of Goods Sold	2,447,241	2,468,259
Gross Profit	3,213,918	2,664,514
Operating Expenses
Research and product development costs	616,982	668,470
Marketing and selling expenses	1,024,984	858,151
General and administrative costs	674,792	654,525
Total Operating Expenses	2,316,758	2,181,146
Operating Income	897,160	483,368
Interest and Dividend Income	114,624	142,098
Net unrealized (loss) on marketable securities	(26,271)	(21,923)
Income Before Income Taxes	985,513	603,543
Income Tax Expense	244,345	118,558
Net Income	$ 741,168	$ 484,985
Basic Earnings Per Share	$ 0.05	$ 0.03
Diluted Earnings Per Share	$ 0.05	$ 0.03
Weighted Average Shares - Basic	15,713,185	15,733,955
Weighted Average Shares - Diluted	15,737,276	15,748,556

XML

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Total
Balance - February 28, 2025 at Feb. 28, 2025	$ 157,512	$ 10,018,034	$ 7,624,516	$ (7,867)	$ 17,792,195
Beginning balance, shares at Feb. 28, 2025	15,751,153
Stock-based compensation expense		75,163			75,163
Treasury Stock				(79,479)	(79,479)
Net Income			484,985		484,985
Balance – May 31, 2025 (unaudited) at May. 31, 2025	$ 157,512	10,093,197	8,109,501	(87,346)	18,272,864
Ending balance, shares at May. 31, 2025	15,751,153
Balance - February 28, 2025 at Feb. 28, 2026	$ 157,104	10,186,858	9,430,197		19,774,159
Beginning balance, shares at Feb. 28, 2026	15,710,389
Stock-based compensation expense		85,825			85,825
Cashless exercise of stock options	$ 39	(39)
Cashless exercise of stock options, shares	3,934
Proceeds from exercise of stock options	$ 24	9,864			9,888
Proceeds from exercise of stock options, shares	2,400
Net Income			741,168		741,168
Balance – May 31, 2025 (unaudited) at May. 31, 2026	$ 157,167	$ 10,282,508	$ 10,171,365		$ 20,611,040
Ending balance, shares at May. 31, 2026	15,716,723

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	3 Months Ended
	May 31, 2026	May 31, 2025
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$ 741,168	$ 484,985
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	118,637	153,723
Stock-based compensation expense	85,825	75,163
Inventory write-off	56,671	98,585
Unrealized loss on marketable securities	26,271	21,923
Deferred income tax benefit, net	351,758	(143,356)
(Increase) Decrease in:
Accounts receivable	2,086,021	(748,916)
Inventories	(196,453)	(373,515)
Prepaid expenses and other assets	83,777	(30,562)
Accounts payable	(103,443)	(159,011)
Accrued expenses	(139,172)	129,444
Customer deposits	(1,062,847)	(123,351)
Income taxes payable	(107,414)	(307,405)
Net Cash Provided by (Used in) Operating Activities	1,940,799	(922,293)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment, furnishings and leasehold improvements	(81,521)	(52,249)
Sale of marketable securities	299,774	1,364,134
Purchase of marketable securities	(526,268)	(649,435)
Net Cash (Used in) Provided by Investing Activities	(308,015)	662,450
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options	9,888
Purchase of treasury stock		(79,479)
Net Cash Provided by (Used in) Financing Activities	9,888	(79,479)
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS	1,642,672	(339,322)
CASH AND CASH EQUIVALENTS:
Beginning of period	7,339,403	5,202,361
End of period	8,982,075	4,863,039
Supplemental Cash Flow Disclosure:
Interest Paid
Income Taxes Paid		$ 569,319

XML

Insider Trading Arrangements	3 Months Ended
	May 31, 2026
Insider Trading Arrangements [Line Items]
Rule 10b5-1 Arrangement Adopted [Flag]	false
Non-Rule 10b5-1 Arrangement Adopted [Flag]	false
Rule 10b5-1 Arrangement Terminated [Flag]	false
Non-Rule 10b5-1 Arrangement Terminated [Flag]	false

XML

BUSINESS DESCRIPTION

3 Months Ended

May 31, 2026

Accounting Policies [Abstract]

BUSINESS DESCRIPTION

NOTE 1: BUSINESS DESCRIPTION

Sono-Tek Corporation (the “Company”, “Sono-Tek”, “We” or “Our”) was incorporated in New York on March 21, 1975. We are the world leader in the design and manufacture of ultrasonic coating systems for applying precise, thin film coatings to add functional properties, protect or strengthen surfaces on parts and components for the microelectronics/electronics, alternative energy, medical, industrial and emerging research & development/other markets. We design and manufacture custom-engineered ultrasonic coating systems incorporating our patented technology, in combination with strong applications engineering knowledge, to assist our customers in achieving their desired coating solutions.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information with the instructions for Form 10-Q and Article 8 of Regulation S-X. Accordingly, the unaudited condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of the Company’s management, all adjustments considered necessary for a fair presentation (consisting of normal recurring adjustments) have been included. The results for the interim periods are not necessarily indicative of what the results will be for the fiscal year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited Consolidated Financial Statements as of and for the fiscal year ended February 28, 2026 (“fiscal year 2026”) contained in the Company’s 2026 Annual Report on Form 10-K filed with the SEC on May 28, 2026. The Company’s current fiscal year ends on February 28, 2027 (“fiscal year 2027”).

XML

SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

May 31, 2026

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents - Cash and cash equivalents consist of money market mutual funds, short term commercial paper and short-term certificates of deposit with original maturities of 90 days or less. At May 31, 2026, $6,626,383 of the Company's bank deposits exceeded the insured limit provided by the Federal Deposit Insurance Corporation.

Consolidation - The accompanying unaudited condensed consolidated financial statements of the Company include the accounts of the Company and its wholly owned subsidiary, Sono-Tek Industrial Park, LLC (“SIP”) in conformity with generally accepted accounting principles in the United States (“GAAP”). SIP operates as a real estate holding company for the Company’s real estate operations. All intercompany accounts and transactions have been eliminated in consolidation.

Fair Value of Financial Instruments - The Company applies Accounting Standards Codification (“ASC”) 820, Fair Value Measurement (“ASC 820”), which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances.

The carrying amounts of financial instruments reported in the accompanying unaudited condensed consolidated financial statements for current assets and current liabilities approximate the fair value because of the immediate or short-term maturities of the financial instruments.

The valuation hierarchy is composed of three levels. The classification within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The levels within the valuation hierarchy are described below:

Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities.

Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals.

Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities.

The fair values of financial assets of the Company were determined using the following categories at May 31, 2026 and February 28, 2026, respectively:

	Level 1		Level 2		Level 3		Total
Marketable Securities – May 31, 2026	$	7,639,860	$	30,012	$	—	$	7,669,872
Marketable Securities – February 28, 2026	$	7,359,354	$	110,295	$	—	$	7,469,649

Marketable Securities include certificates of deposit and US Treasury securities that are considered to be highly liquid and easily tradeable totaling $7,669,872 and $7,469,649 as of May 31, 2026 and February 28, 2026, respectively. US Treasury securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 and certificates of deposit are classified as Level 2 within the Company’s fair value hierarchy. The Company’s marketable securities are considered to be trading securities as defined under ASC 320 “Investments – Debt and Equity Securities.”

Income Taxes - The Company accounts for income taxes under the asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences of "temporary differences" by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized. The Company uses a recognition threshold and a measurement attribute for financial statement recognition and measurement of tax positions taken or expected to be taken in a return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. As of May 31, 2026 and February 28, 2026, there were no uncertain tax positions.

Inventories - Inventories are stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out (FIFO) method for raw materials, subassemblies and work-in-progress and the specific identification method for finished goods. Management compares the cost of inventory with the net realizable value and, if applicable, an allowance is made for writing down the inventory to its net realizable value, if lower than cost. On an ongoing basis, inventory is reviewed for potential write-down for estimated obsolescence or unmarketable inventory based upon forecasts for future demand and market conditions.

Land and Buildings - Land and buildings are stated at cost. Buildings are being depreciated by use of the straight-line method based on an estimated useful life of forty years.

At May 31, 2026 and February 28, 2026, the Company had land, stated at cost of $250,000.

At May 31, 2026 and February 28, 2026, the Company had buildings, equipment, furnishings and leasehold improvements totaling, $2,138,226 and $2,173,443 respectively, net of accumulated depreciation.

Management Estimates - The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Recent Accounting Pronouncements Not Yet Adopted - In November 2024, the FASB issued ASU 2024-03 – Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which is intended to provide more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation and amortization) included in certain expense captions presented on the consolidated statement of income. The guidance in this ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this ASU will have on its consolidated financial statements and related disclosures.

In March 2025, the FASB issued ASU 2025-05 - Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which clarifies the measurement of expected credit losses for accounts receivable and contract assets arising from revenue transactions within the scope of Topic 606. The amendments require entities to measure expected credit losses for these financial assets using a methodology consistent with the current expected credit loss model while clarifying the interaction between the guidance in Topic 326 and Topic 606. The guidance in this ASU is effective for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years. Early adoption is permitted. The amendments should be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal years of adoption. The Company is currently evaluating the impact that the adoption of ASU 2025-05 will have on its consolidated financial statements and disclosures.

In December 2025, the FASB issued ASU 2025-11 - Interim Reporting (Topic 270): Improvements to Interim Reporting Guidance, which is intended to improve the clarity and organization of the interim reporting guidance in Topic 270. The amendments clarify the scope and presentation requirements for interim financial statements and introduce a general disclosure principle requiring entities to disclose events or transactions occurring since the end of the last annual reporting period that have a material impact on the entity. The guidance also incorporates certain interim disclosure requirements from other Topics into Topic 270 to improve accessibility of the interim reporting guidance. The amendments in this ASU are effective for interim reporting periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2025-11 will have on its consolidated financial statements and disclosures.

Product Warranty - Expected future product warranty expense is recorded when revenue is recognized for product sales.

Revenue Recognition - The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, the core principle of which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps:

• Identification of the contract, or contracts, with a customer

• Identification of the performance obligations in the contract

• Determination of the transaction price

• Allocation of the transaction price to the performance obligations in the contract

• Recognition of revenue when, or as, performance obligations are satisfied

Stock-Based Compensation - The Company currently uses a Black-Scholes option pricing model to calculate the fair value of its stock options. 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 lives of the awards. The Company primarily uses historical data to determine the assumptions to be used in the Black-Scholes model. 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.

ASC 718 requires the recognition of the fair value of stock compensation expense to be recognized over the vesting term of such award. The Company accounts for forfeitures as they occur.

XML

REVENUE RECOGNITION

3 Months Ended

May 31, 2026

Revenue from Contract with Customer [Abstract]

REVENUE RECOGNITION

NOTE 3: REVENUE RECOGNITION

The Company’s sales revenue is derived primarily from short term contracts with customers, which are generally in effect for less than twelve months. Sales revenue from manufactured equipment transferred at a single point in time accounts for a majority of the Company’s revenue.

Sales revenue is recognized when control of the Company’s manufactured equipment is transferred to its customers, in an amount that reflects the consideration the Company expects to receive based upon the agreed transaction price. The Company’s performance obligations are satisfied when its customers take control of the purchased equipment, which is based on the contract terms. Based on prior experience, the Company reasonably estimates its sales returns and warranty reserves. Sales are presented net of discounts and allowances. Discounts and allowances are determined when a sale is negotiated. The Company does not grant its customers or independent representatives, the ability to return equipment nor does it grant price adjustments after a sale is complete.

The Company does not capitalize any sales commission costs related to the acquisition of a contract. All commissions related to a performance obligation that are satisfied at a point in time are expensed when the customer takes control of the purchased equipment.

The Company applies the practical expedient in paragraph ASC 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one-year or less. The Company requires cash deposits when an order is placed and subsequent cash deposits before a customer’s equipment is shipped. At the time of shipment, the Company will extend credit terms to its customers. The credit terms do not contain a significant financing component (credit terms over more than one year).

At May 31, 2026, the Company had received approximately $2,007,000 in customer deposits, representing contract liabilities.

At February 28, 2026, the Company had received approximately $3,070,000 in customer deposits, representing contract liabilities. During the three months ended May 31, 2026, the Company recognized $2,379,000 of these deposits as revenue.

The Company’s sales revenue, by product line is as follows:

	Three Months Ended May 31,
	2026		% of total	2025		% of total
Fluxing Systems	$	92,000	2%	$	152,000	3%
In-Line Coating Systems		2,159,000	38%		3,054,000	59%
Multi-Axis Coating Systems		2,075,000	37%		677,000	13%
OEM Systems		231,000	4%		130,000	3%
Spare Parts, Services and Other		1,104,000	20%		1,120,000	22%
TOTAL	$	5,661,000		$	5,133,000

XML

INVENTORIES

3 Months Ended

May 31, 2026

Inventory Disclosure [Abstract]

INVENTORIES

NOTE 4: INVENTORIES

Inventories consist of the following:

	May 31,		February 28,
	2026		2026
Raw materials and subassemblies	$	1,698,898	$	1,931,294
Finished goods		1,191,500		932,866
Work in process		1,172,734		1,059,190
Total	$	4,063,132	$	3,923,350

The Company maintains a valuation allowance for slow moving inventory for raw materials and finished goods. The valuation allowance creates a new cost basis for the inventory, and it is not subsequently marked up through a reduction in the valuation allowance based on any changes in the underlying facts and circumstances. When the valuation allowance is initially recorded, the increase to the allowance is recognized as an increase in cost of sales. The valuation allowance is only reduced if or when the underlying inventory is sold or destroyed, at which time cost of sales recognized would include the previous adjusted cost basis. During the three months ended May 31, 2026 and May 31, 2025, the Company recorded approximately $57,000 and $99,000, respectively in additional allowances for slow moving inventory.

XML

STOCK BASED COMPENSATION

3 Months Ended

May 31, 2026

Equity [Abstract]

STOCK BASED COMPENSATION

NOTE 5: STOCK BASED COMPENSATION

Stock Options – In May 2023, the Company’s Board of Directors authorized the creation of the 2023 Stock Incentive Plan (the “2023 Plan”) pursuant to which the Company may grant up to 2,500,000 options or shares to officers, directors, employees and consultants of the Company and its subsidiaries. The Company’s shareholders approved the adoption of the 2023 Plan in August 2023. The 2023 Plan replaced the 2013 Stock Incentive Plan (the “2013 Plan”) under which no additional options or shares could be granted after June 2023. At May 31, 2026, 393,183 and 186,660 options were outstanding, respectively, under the 2023 Plan and the 2013 Plan.

The Company accounts for stock based compensation under ASC 718, “Share Based Payments”, which requires companies to expense the value of employee stock options and similar awards. The Company accounts for forfeitures as they occur.

During the three months ended May 31, 2026, the Company granted options to acquire 2,988 shares to an employee at an exercise price of $3.99. Options granted to employees vest over three years and expire ten years from the date of issuance. The options granted during the three months ended May 31, 2026 had a grant date fair value of $2.51 per share.

The weighted-average fair value of options is estimated on the date of grant using the Black-Scholes options-pricing model. The weighted-average Black-Scholes assumptions are as follows:

	Three Months Ended May 31, 2026
Expected Life	8 years
Risk free interest rate	3.92%
Expected volatility	54.85%
Expected dividend yield	0%

For the three months ended May 31, 2026 and 2025 the Company recognized $85,825 and $75,163 in stock based compensation expense, respectively. Such amounts are included in general and administrative expenses on the unaudited condensed consolidated statements of income. Total compensation expense related to non-vested options not yet recognized as of May 31, 2026 was $370,000 and will be recognized over the next three years based on vesting date. The amount of future stock option compensation expense could be affected by any future option grants or by any forfeitures.

The aggregate intrinsic value of the Company’s vested and exercisable options at May 31, 2026 was approximately $183,839.

XML

EARNINGS PER SHARE

3 Months Ended

May 31, 2026

Earnings Per Share [Abstract]

EARNINGS PER SHARE

NOTE 6: EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per share:

	Three Months Ended May 31,
	2026		2025
Numerator for basic and diluted earnings per share	$	741,168	$	484,985
Denominator for basic earnings per share - weighted average		15,713,185		15,733,955
Effects of dilutive securities:
Stock options for employees and directors		24,091		14,601
Denominator for diluted earnings per share		15,737,276		15,748,556
Basic Earnings Per Share	$	0.05	$	0.03
Diluted Earnings Per Share	$	0.05	$	0.03

In the first quarter of fiscal year 2027, 149,425 stock options were excluded from the computation of diluted income per share because the effect of inclusion would have been anti-dilutive.

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REVOLVING LINE OF CREDIT

3 Months Ended

May 31, 2026

Debt Disclosure [Abstract]

REVOLVING LINE OF CREDIT

NOTE 7: REVOLVING LINE OF CREDIT

The Company has a $1,500,000 revolving line of credit at prime which was 6.75% at May 31, 2026 and February 28, 2026. 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. At May 31, 2026, there were no outstanding borrowings under the revolving line of credit.

The Company has a $750,000 equipment line of credit at prime plus 0.50%, which was 7.25% at May 31, 2026. At May 31, 2026, there were no outstanding borrowings under the equipment line of credit.

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CUSTOMER CONCENTRATIONS AND FOREIGN SALES

3 Months Ended

May 31, 2026

Risks and Uncertainties [Abstract]

CUSTOMER CONCENTRATIONS AND FOREIGN SALES

NOTE 8: CUSTOMER CONCENTRATIONS AND FOREIGN SALES

Export sales to customers located outside the United States and Canada were approximately as follows:

	May 31, 2026		May 31, 2025
Asia Pacific (APAC)		738,000		597,000
Europe, Middle East, Africa (EMEA)		930,000		897,000
Latin America		463,000		96,000
	$	2,131,000	$	1,590,000

During the three months ended May 31, 2026 and 2025, sales to foreign customers accounted for approximately $2,131,000 and $1,590,000, or 38% and 31%, respectively, of total revenues.

The Company had two customers which accounted for 53% of sales during the first quarter of fiscal 2027. Two customers accounted for 43% of the outstanding accounts receivables at May 31, 2026.

The Company had one customer which accounted for 57% of sales during the first quarter of fiscal 2026. Three customers accounted for 61% of the outstanding accounts receivables February 28, 2026.

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SEGMENT DATA

3 Months Ended

May 31, 2026

Segment Reporting [Abstract]

SEGMENT DATA

NOTE 9: SEGMENT DATA

The Company operates in one segment. The chief operating decision maker, who is responsible for allocating resources and assessing performance, has been identified as the Chief Executive Officer (the “CODM”). The CODM assesses the financial performance of the Company and decides how to allocate resources based on Operating income.

The following table presents the Company’s segment data (rounded to the nearest thousand):

	Three Months Ended May 31,
	2026		2025
Net Sales	$	5,661,000	$	5,133,000
Direct Cost of Goods Sold
Materials & Freight		1,887,000		1,872,000
Production Labor		111,000		76,000
Depreciation		34,000		50,000
Other		133,000		119,000
		2,165,000		2,117,000
Service Department
Salaries		146,000		138,000
Travel		51,000		37,000
Outside Installations		-		11,000
Warranty Costs		35,000		98,000
Other		50,000		67,000
		282,000		351,000
Total Cost of Goods & Service	$	2,447,000	$	2,468,000
Gross Profit		3,214,000		2,665,000
Research & Product Development
Salaries		458,000		474,000
Insurance		35,000		35,000
Depreciation		32,000		45,000
R & D Materials		39,000		66,000
Other		53,000		48,000
		617,000		668,000

Marketing and Selling
Salaries		500,000		437,000
Insurance		61,000		47,000
Commissions		227,000		152,000
Travel & Entertainment		29,000		29,000
Advertising / Trade Show		117,000		108,000
Depreciation		22,000		25,000
Other		69,000		60,000
		1,025,000		858,000
General and Administrative
Salaries		294,000		272,000
Insurance		56,000		45,000
Professional Fees		105,000		84,000
Corporate Expenses		90,000		132,000
Stock Based Compensation		86,000		75,000
Depreciation		15,000		17,000
Misc Other		29,000		30,000
		675,000		655,000
Total Operating Expenses		2,317,000		2,181,000
Operating Income		897,000		484,000
Interest Income & Unrealized (Loss)/Gain		88,000		120,000
Income Before Taxes		985,000		604,000
Income Tax Expense		244,000		119,000
Net Income	$	741,000	$	485,000

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

May 31, 2026

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 May 31, 2026.

The Company is subject, from time to time, to claims by third parties under various legal disputes. The defense of such claims, or any adverse outcome relating to any such claims, could have a material adverse effect on the Company’s liquidity, financial condition, and cash flows. As of May 31, 2026, the Company did not have any pending legal actions.

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SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

May 31, 2026

Accounting Policies [Abstract]

Cash and Cash Equivalents

Cash and Cash Equivalents - Cash and cash equivalents consist of money market mutual funds, short term commercial paper and short-term certificates of deposit with original maturities of 90 days or less. At May 31, 2026, $6,626,383 of the Company's bank deposits exceeded the insured limit provided by the Federal Deposit Insurance Corporation.

Consolidation

Consolidation - The accompanying unaudited condensed consolidated financial statements of the Company include the accounts of the Company and its wholly owned subsidiary, Sono-Tek Industrial Park, LLC (“SIP”) in conformity with generally accepted accounting principles in the United States (“GAAP”). SIP operates as a real estate holding company for the Company’s real estate operations. All intercompany accounts and transactions have been eliminated in consolidation.

Fair Value of Financial Instruments

Fair Value of Financial Instruments - The Company applies Accounting Standards Codification (“ASC”) 820, Fair Value Measurement (“ASC 820”), which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances.

The carrying amounts of financial instruments reported in the accompanying unaudited condensed consolidated financial statements for current assets and current liabilities approximate the fair value because of the immediate or short-term maturities of the financial instruments.

The valuation hierarchy is composed of three levels. The classification within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The levels within the valuation hierarchy are described below:

Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities.

Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals.

Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities.

The fair values of financial assets of the Company were determined using the following categories at May 31, 2026 and February 28, 2026, respectively:

	Level 1		Level 2		Level 3		Total
Marketable Securities – May 31, 2026	$	7,639,860	$	30,012	$	—	$	7,669,872
Marketable Securities – February 28, 2026	$	7,359,354	$	110,295	$	—	$	7,469,649

Marketable Securities include certificates of deposit and US Treasury securities that are considered to be highly liquid and easily tradeable totaling $7,669,872 and $7,469,649 as of May 31, 2026 and February 28, 2026, respectively. US Treasury securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 and certificates of deposit are classified as Level 2 within the Company’s fair value hierarchy. The Company’s marketable securities are considered to be trading securities as defined under ASC 320 “Investments – Debt and Equity Securities.”

Income Taxes

Income Taxes - The Company accounts for income taxes under the asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences of "temporary differences" by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized. The Company uses a recognition threshold and a measurement attribute for financial statement recognition and measurement of tax positions taken or expected to be taken in a return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. As of May 31, 2026 and February 28, 2026, there were no uncertain tax positions.

Inventories

Inventories - Inventories are stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out (FIFO) method for raw materials, subassemblies and work-in-progress and the specific identification method for finished goods. Management compares the cost of inventory with the net realizable value and, if applicable, an allowance is made for writing down the inventory to its net realizable value, if lower than cost. On an ongoing basis, inventory is reviewed for potential write-down for estimated obsolescence or unmarketable inventory based upon forecasts for future demand and market conditions.

Land and Buildings

Land and Buildings - Land and buildings are stated at cost. Buildings are being depreciated by use of the straight-line method based on an estimated useful life of forty years.

At May 31, 2026 and February 28, 2026, the Company had land, stated at cost of $250,000.

At May 31, 2026 and February 28, 2026, the Company had buildings, equipment, furnishings and leasehold improvements totaling, $2,138,226 and $2,173,443 respectively, net of accumulated depreciation.

Management Estimates

Management Estimates - The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Recent Accounting Pronouncements Not Yet Adopted

Recent Accounting Pronouncements Not Yet Adopted - In November 2024, the FASB issued ASU 2024-03 – Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which is intended to provide more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation and amortization) included in certain expense captions presented on the consolidated statement of income. The guidance in this ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this ASU will have on its consolidated financial statements and related disclosures.

In March 2025, the FASB issued ASU 2025-05 - Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which clarifies the measurement of expected credit losses for accounts receivable and contract assets arising from revenue transactions within the scope of Topic 606. The amendments require entities to measure expected credit losses for these financial assets using a methodology consistent with the current expected credit loss model while clarifying the interaction between the guidance in Topic 326 and Topic 606. The guidance in this ASU is effective for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years. Early adoption is permitted. The amendments should be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal years of adoption. The Company is currently evaluating the impact that the adoption of ASU 2025-05 will have on its consolidated financial statements and disclosures.

In December 2025, the FASB issued ASU 2025-11 - Interim Reporting (Topic 270): Improvements to Interim Reporting Guidance, which is intended to improve the clarity and organization of the interim reporting guidance in Topic 270. The amendments clarify the scope and presentation requirements for interim financial statements and introduce a general disclosure principle requiring entities to disclose events or transactions occurring since the end of the last annual reporting period that have a material impact on the entity. The guidance also incorporates certain interim disclosure requirements from other Topics into Topic 270 to improve accessibility of the interim reporting guidance. The amendments in this ASU are effective for interim reporting periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2025-11 will have on its consolidated financial statements and disclosures.

Product Warranty

Product Warranty - Expected future product warranty expense is recorded when revenue is recognized for product sales.

Revenue Recognition

Revenue Recognition - The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, the core principle of which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps:

• Identification of the contract, or contracts, with a customer

• Identification of the performance obligations in the contract

• Determination of the transaction price

• Allocation of the transaction price to the performance obligations in the contract

• Recognition of revenue when, or as, performance obligations are satisfied

Stock-Based Compensation

Stock-Based Compensation - The Company currently uses a Black-Scholes option pricing model to calculate the fair value of its stock options. 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 lives of the awards. The Company primarily uses historical data to determine the assumptions to be used in the Black-Scholes model. 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.

ASC 718 requires the recognition of the fair value of stock compensation expense to be recognized over the vesting term of such award. The Company accounts for forfeitures as they occur.

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SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

May 31, 2026

Accounting Policies [Abstract]

Schedule of significant accounting policies - fair values of financial assets of the company

The fair values of financial assets of the Company were determined using the following categories at May 31, 2026 and February 28, 2026, respectively:

	Level 1		Level 2		Level 3		Total
Marketable Securities – May 31, 2026	$	7,639,860	$	30,012	$	—	$	7,669,872
Marketable Securities – February 28, 2026	$	7,359,354	$	110,295	$	—	$	7,469,649

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REVENUE RECOGNITION (Tables)

3 Months Ended

May 31, 2026

Revenue from Contract with Customer [Abstract]

Schedule of revenue recognition - sales revenue by product line

The Company’s sales revenue, by product line is as follows:

	Three Months Ended May 31,
	2026		% of total	2025		% of total
Fluxing Systems	$	92,000	2%	$	152,000	3%
In-Line Coating Systems		2,159,000	38%		3,054,000	59%
Multi-Axis Coating Systems		2,075,000	37%		677,000	13%
OEM Systems		231,000	4%		130,000	3%
Spare Parts, Services and Other		1,104,000	20%		1,120,000	22%
TOTAL	$	5,661,000		$	5,133,000

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INVENTORIES (Tables)

3 Months Ended

May 31, 2026

Inventory Disclosure [Abstract]

Schedule of inventory, current

Inventories consist of the following:

	May 31,		February 28,
	2026		2026
Raw materials and subassemblies	$	1,698,898	$	1,931,294
Finished goods		1,191,500		932,866
Work in process		1,172,734		1,059,190
Total	$	4,063,132	$	3,923,350

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STOCK BASED COMPENSATION (Tables)

3 Months Ended

May 31, 2026

Equity [Abstract]

Schedule of weighted-average black-scholes assumptions

The weighted-average fair value of options is estimated on the date of grant using the Black-Scholes options-pricing model. The weighted-average Black-Scholes assumptions are as follows:

	Three Months Ended May 31, 2026
Expected Life	8 years
Risk free interest rate	3.92%
Expected volatility	54.85%
Expected dividend yield	0%

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EARNINGS PER SHARE (Tables)

3 Months Ended

May 31, 2026

Earnings Per Share [Abstract]

Schedule of computation of basic and diluted earnings per share

The following table sets forth the computation of basic and diluted earnings per share:

	Three Months Ended May 31,
	2026		2025
Numerator for basic and diluted earnings per share	$	741,168	$	484,985
Denominator for basic earnings per share - weighted average		15,713,185		15,733,955
Effects of dilutive securities:
Stock options for employees and directors		24,091		14,601
Denominator for diluted earnings per share		15,737,276		15,748,556
Basic Earnings Per Share	$	0.05	$	0.03
Diluted Earnings Per Share	$	0.05	$	0.03

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CUSTOMER CONCENTRATIONS AND FOREIGN SALES (Tables)

3 Months Ended

May 31, 2026

Risks and Uncertainties [Abstract]

Schedule of customer concentrations and foreign sales

Export sales to customers located outside the United States and Canada were approximately as follows:

	May 31, 2026		May 31, 2025
Asia Pacific (APAC)		738,000		597,000
Europe, Middle East, Africa (EMEA)		930,000		897,000
Latin America		463,000		96,000
	$	2,131,000	$	1,590,000

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SEGMENT DATA (Tables)

3 Months Ended

May 31, 2026

Segment Reporting [Abstract]

Schedule of segment data

The following table presents the Company’s segment data (rounded to the nearest thousand):

	Three Months Ended May 31,
	2026		2025
Net Sales	$	5,661,000	$	5,133,000
Direct Cost of Goods Sold
Materials & Freight		1,887,000		1,872,000
Production Labor		111,000		76,000
Depreciation		34,000		50,000
Other		133,000		119,000
		2,165,000		2,117,000
Service Department
Salaries		146,000		138,000
Travel		51,000		37,000
Outside Installations		-		11,000
Warranty Costs		35,000		98,000
Other		50,000		67,000
		282,000		351,000
Total Cost of Goods & Service	$	2,447,000	$	2,468,000
Gross Profit		3,214,000		2,665,000
Research & Product Development
Salaries		458,000		474,000
Insurance		35,000		35,000
Depreciation		32,000		45,000
R & D Materials		39,000		66,000
Other		53,000		48,000
		617,000		668,000

Marketing and Selling
Salaries		500,000		437,000
Insurance		61,000		47,000
Commissions		227,000		152,000
Travel & Entertainment		29,000		29,000
Advertising / Trade Show		117,000		108,000
Depreciation		22,000		25,000
Other		69,000		60,000
		1,025,000		858,000
General and Administrative
Salaries		294,000		272,000
Insurance		56,000		45,000
Professional Fees		105,000		84,000
Corporate Expenses		90,000		132,000
Stock Based Compensation		86,000		75,000
Depreciation		15,000		17,000
Misc Other		29,000		30,000
		675,000		655,000
Total Operating Expenses		2,317,000		2,181,000
Operating Income		897,000		484,000
Interest Income & Unrealized (Loss)/Gain		88,000		120,000
Income Before Taxes		985,000		604,000
Income Tax Expense		244,000		119,000
Net Income	$	741,000	$	485,000

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Schedule of significant accounting policies - fair values of financial assets of the company (Details) - USD ($)	May 31, 2026	Feb. 28, 2026
Defined Benefit Plan Disclosure [Line Items]
Marketable Securities	$ 7,669,872	$ 7,469,649
Fair Value, Inputs, Level 1 [Member]
Defined Benefit Plan Disclosure [Line Items]
Marketable Securities	7,639,860	7,359,354
Fair Value, Inputs, Level 2 [Member]
Defined Benefit Plan Disclosure [Line Items]
Marketable Securities	30,012	110,295
Fair Value, Inputs, Level 3 [Member]
Defined Benefit Plan Disclosure [Line Items]
Marketable Securities

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SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	May 31, 2026	Feb. 28, 2026
Accounting Policies [Abstract]
Bank deposits exceeding the FDIC insured limit	$ 6,626,383
Marketable securities	7,669,872	$ 7,469,649
Accruals for uncertain tax positions	0	0
Land	250,000	250,000
Buildings, equipment, furnishings and leasehold improvements, net	$ 2,138,226	$ 2,173,443

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Schedule of revenue recognition - sales revenue by product line (Details) - USD ($)	3 Months Ended
	May 31, 2026	May 31, 2025
Disaggregation of Revenue [Line Items]
Sales revenue	$ 5,661,159	$ 5,132,773
Fluxing Systems [Member]
Disaggregation of Revenue [Line Items]
Sales revenue	$ 92,000	$ 152,000
Sales revenue, percent	2.00%	3.00%
In-Line Coating Systems [Member]
Disaggregation of Revenue [Line Items]
Sales revenue	$ 2,159,000	$ 3,054,000
Sales revenue, percent	38.00%	59.00%
Multi-Axis Coating Systems [Member]
Disaggregation of Revenue [Line Items]
Sales revenue	$ 2,075,000	$ 677,000
Sales revenue, percent	37.00%	13.00%
OEM Systems [Member]
Disaggregation of Revenue [Line Items]
Sales revenue	$ 231,000	$ 130,000
Sales revenue, percent	4.00%	3.00%
Spare Parts, Services and Other [Member]
Disaggregation of Revenue [Line Items]
Sales revenue	$ 1,104,000	$ 1,120,000
Sales revenue, percent	20.00%	22.00%
Total [Member]
Disaggregation of Revenue [Line Items]
Sales revenue	$ 5,661,000	$ 5,133,000

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REVENUE RECOGNITION (Details Narrative) - USD ($)	3 Months Ended
	May 31, 2026	Feb. 28, 2026
Revenue from Contract with Customer [Abstract]
Cash deposits	$ 2,007,000	$ 3,070,000
Revenue recognized	$ 2,379,000

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Schedule of inventory, current (Details) - USD ($)	May 31, 2026	Feb. 28, 2026
Inventory Disclosure [Abstract]
Raw materials and subassemblies	$ 1,698,898	$ 1,931,294
Finished goods	1,191,500	932,866
Work in process	1,172,734	1,059,190
Total	$ 4,063,132	$ 3,923,350

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INVENTORIES (Details Narrative) - USD ($)	May 31, 2026	May 31, 2025
Inventory Disclosure [Abstract]
Allowance for slow moving inventory	$ 57,000	$ 99,000

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Schedule of weighted-average black-scholes assumptions (Details)	3 Months Ended
	May 31, 2026
Equity [Abstract]
Expected life (in years)	8 years
Risk free interest rate	3.92%
Expected volatility	54.85%
Expected dividend yield	0.00%

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STOCK BASED COMPENSATION (Details Narrative) - USD ($)	3 Months Ended
	May 31, 2026	May 31, 2025	May 31, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options granted	24,091	14,601
Average grant date fair value, per share	$ 2.51
Stock-based compensation expense	$ 85,825	$ 75,163
Stock option non-vested	370,000
Options vested and exercisable aggregate intrinsic value	$ 183,839
Share-Based Payment Arrangement, Option [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options granted	2,988
Non Employee [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options, exercisable price	$ 3.99
2023 Stock Incentive Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock options shares available for grants			2,500,000
Stock options, outstanding	393,183
2013 Stock Incentive Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock options, outstanding	186,660

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Schedule of computation of basic and diluted earnings per share (Details) - USD ($)	3 Months Ended
	May 31, 2026	May 31, 2025
Earnings Per Share [Abstract]
Numerator for basic and diluted earnings per share	$ 741,168	$ 484,985
Denominator for basic earnings per share - weighted average	15,713,185	15,733,955
Effects of dilutive securities:
Stock options for employees and directors	24,091	14,601
Denominator for diluted earnings per share	15,737,276	15,748,556
Basic Earnings Per Share	$ 0.05	$ 0.03
Diluted Earnings Per Share	$ 0.05	$ 0.03

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EARNINGS PER SHARE (Details Narrative)	3 Months Ended
	May 31, 2026 shares
Earnings Per Share [Abstract]
Anti-dilutive shares	149,425

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REVOLVING LINE OF CREDIT (Details Narrative) - USD ($)	3 Months Ended
	May 31, 2026	Feb. 28, 2026
Line of Credit Facility [Line Items]
Interest rate	7.25%
Revolving line of credit, outstanding borrowings	$ 0
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Revolving line of credit	$ 1,500,000	$ 1,500,000
Interest rate	6.75%	6.75%
Revolving credit line description	The revolving credit line is collateralized by the Company’s accounts receivable and inventory. The revolving credit line is payable on demand and must be retired for a 30-day period, once annually. If the Company fails to perform the 30-day annual pay down or if the bank elects to terminate the credit line, the bank may, at its option, convert the outstanding balance to a 36-month term note with payments including interest in 36 equal installments.
Equipment line of credit [Member]
Line of Credit Facility [Line Items]
Revolving line of credit	$ 750,000
Interest rate	0.50%
Outstanding borrowings under the line of credit	$ 0

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Schedule of customer concentrations and foreign sales (Details) - USD ($)	3 Months Ended
	May 31, 2026	May 31, 2025
Total sales	$ 2,131,000	$ 1,590,000
Asia Pacific [Member]
Total sales	738,000	597,000
EMEA [Member]
Total sales	930,000	897,000
Latin America [Member]
Total sales	$ 463,000	$ 96,000

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CUSTOMER CONCENTRATIONS AND FOREIGN SALES (Details Narrative) - USD ($)	3 Months Ended		12 Months Ended
	May 31, 2026	May 31, 2025	Feb. 28, 2026
Concentration Risk [Line Items]
Sales revenue	$ 5,661,159	$ 5,132,773
Foreign Customers [Member] | Revenue Benchmark [Member]
Concentration Risk [Line Items]
Sales revenue	$ 2,131,000	$ 1,590,000
Sales revenue, percent	38.00%	31.00%
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Two Customer [Member]
Concentration Risk [Line Items]
Concentration percentage	53.00%
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | One Customer [Member]
Concentration Risk [Line Items]
Concentration percentage		57.00%
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Two Customer [Member]
Concentration Risk [Line Items]
Concentration percentage	43.00%
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Three Customer [Member]
Concentration Risk [Line Items]
Concentration percentage			61.00%

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Schedule of segment data (Details) - USD ($)	3 Months Ended
	May 31, 2026	May 31, 2025
Segment Reporting [Line Items]
Net Sales	$ 5,661,159	$ 5,132,773
Gross profit	3,213,918	2,664,514
Research & product development	616,982	668,470
Marketing and selling	1,024,984	858,151
General and administrative	674,792	654,525
Total Operating Expenses	2,316,758	2,181,146
Operating Income	897,160	483,368
Income Before Taxes	985,513	603,543
Income Tax Expense	244,345	118,558
Net Income	741,168	484,985
Operating Segment [Member]
Segment Reporting [Line Items]
Net Sales	5,661,000	5,133,000
Direct cost of goods sold materials & freight	1,887,000	1,872,000
Direct cost of goods sold production labor	111,000	76,000
Direct cost of goods sold depreciation	34,000	50,000
Direct cost of goods sold other	133,000	119,000
Direct cost of goods sold	2,165,000	2,117,000
Service department salaries	146,000	138,000
Service department travel	51,000	37,000
Service department outside installations		11,000
Service department warranty costs	35,000	98,000
Service department other	50,000	67,000
Service department	282,000	351,000
Total cost of goods & service	2,447,000	2,468,000
Gross profit	3,214,000	2,665,000
Research & product development salaries	458,000	474,000
Research & product development insurance	35,000	35,000
Research & product development depreciation	32,000	45,000
Research & product development r & d materials	39,000	66,000
Research & product development other	53,000	48,000
Research & product development	617,000	668,000
Marketing and selling salaries	500,000	437,000
Marketing and selling Insurance	61,000	47,000
Marketing and selling commissions	227,000	152,000
Marketing and selling travel & entertainment	29,000	29,000
Marketing and selling salaries advertising trade show	117,000	108,000
Marketing and selling salaries depreciation	22,000	25,000
Marketing and selling salaries other	69,000	60,000
Marketing and selling	1,025,000	858,000
General and administrative salaries	294,000	272,000
General and administrative insurance	56,000	45,000
General and administrative professional fees	105,000	84,000
General and administrative corporate expenses	90,000	132,000
General and administrative stock based compensation	86,000	75,000
General and administrative depreciation	15,000	17,000
General and administrative depreciation misc other	29,000	30,000
General and administrative	675,000	655,000
Total Operating Expenses	2,317,000	2,181,000
Operating Income	897,000	484,000
Interest Income & Unrealized Gain	88,000	120,000
Income Before Taxes	985,000	604,000
Income Tax Expense	244,000	119,000
Net Income	$ 741,000	$ 485,000