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<SEC-DOCUMENT>0001171520-07-000607.txt : 20071012
<SEC-HEADER>0001171520-07-000607.hdr.sgml : 20071012
<ACCEPTANCE-DATETIME>20071012150155
ACCESSION NUMBER:		0001171520-07-000607
CONFORMED SUBMISSION TYPE:	10QSB
PUBLIC DOCUMENT COUNT:		8
CONFORMED PERIOD OF REPORT:	20070831
FILED AS OF DATE:		20071012
DATE AS OF CHANGE:		20071012

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SONO TEK CORP
		CENTRAL INDEX KEY:			0000806172
		STANDARD INDUSTRIAL CLASSIFICATION:	MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES [3690]
		IRS NUMBER:				141568099
		STATE OF INCORPORATION:			NY
		FISCAL YEAR END:			0228

	FILING VALUES:
		FORM TYPE:		10QSB
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-16035
		FILM NUMBER:		071169444

	BUSINESS ADDRESS:	
		STREET 1:		2012 RT 9W BLDG 3
		CITY:			MILTON
		STATE:			NY
		ZIP:			12547
		BUSINESS PHONE:		8457952020

	MAIL ADDRESS:	
		STREET 1:		2012 RT. 9W, BLDG. 3,
		CITY:			MILTON
		STATE:			NY
		ZIP:			12547
</SEC-HEADER>
<DOCUMENT>
<TYPE>10QSB
<SEQUENCE>1
<FILENAME>eps2664.txt
<DESCRIPTION>SONO-TEK CORPORATION
<TEXT>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

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

                 For the quarterly period ended: August 31, 2007

                                       OR

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

                          Commission File No.: 0-16035


                              SONO-TEK CORPORATION
        (Exact name of small business issuer 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


Indicate by check mark whether the small business issuer (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
small business issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.         YES |X| NO |_|


Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).                                  YES |_| NO |X|


                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:

                                                           Outstanding as of
             Class                                          October 2, 2007
             -----                                          ---------------
Common Stock, par value $.01 per share                        14,360,541
<PAGE>

                              SONO-TEK CORPORATION

                                      INDEX

Part I - Financial Information                                              Page

Item 1 - Consolidated Financial Statements:                              1 - 3

Consolidated Balance Sheets - August 31, 2007 (Unaudited) and
         February 28, 2007                                               1

Consolidated Statements of Income - Six Months and Three Months Ended
         August 31, 2007 and 2006 (Unaudited)                            2

Consolidated Statements of Cash Flows - Six Months Ended
         August 31, 2007 and 2006 (Unaudited)                            3

Notes to Consolidated Financial Statements                               4 - 7

Item 2 - Management's Discussion and Analysis or Plan of Operations      8 - 11

Item 3 - Controls and Procedures                                         12

Part II - Other Information                                              13

Signatures                                                               14
<PAGE>

                              SONO-TEK CORPORATION
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                     ASSETS
                                                                              August 31,
                                                                                 2007               February 28,
Current Assets:                                                               Unaudited                 2007
                                                                            -------------          -------------
<S>                                                                         <C>                    <C>
     Cash and cash equivalents                                              $   2,223,514          $   2,268,976
     Accounts receivable (less allowance of $18,500
       at August 31 and February 28)                                              797,276                946,833
     Inventories                                                                1,566,082              1,406,231
     Prepaid expenses and other current assets                                     27,346                 69,107
     Deferred tax asset                                                           270,000                270,000
                                                                            -------------          -------------
                  Total current assets                                          4,884,218              4,961,147
                                                                            -------------          -------------

Equipment, furnishings and leasehold improvements (less
   accumulated depreciation of $962,611 and $896,773 at
   August 31 and February 28, respectively)                                       299,523                301,360
Intangible assets, net                                                             28,675                 30,744
Other assets                                                                        7,171                  7,171
Deferred tax asset                                                                446,239                411,239
                                                                            -------------          -------------

TOTAL ASSETS                                                                $   5,665,826          $   5,711,661
                                                                            =============          =============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
     Accounts payable                                                       $     225,381          $     209,202
     Accrued expenses                                                             375,774                476,140
     Current maturities of long term debt                                          28,263                 27,373
     Deferred tax liability                                                        16,239                 16,239
                                                                            -------------          -------------
                  Total current liabilities                                       645,657                728,954

Long term debt, less current maturities                                            37,147                 51,506
Deferred tax liability                                                             80,000                 80,000
                                                                            -------------          -------------
                  Total liabilities                                               762,804                860,460
                                                                            -------------          -------------

Commitments and Contingencies                                                          --                     --

Stockholders' Equity
     Common stock, $.01 par value; 25,000,000 shares
       authorized, 14,360,541 shares issued and
       outstanding at August 30 and February 28                                   143,606                143,606
     Additional paid-in capital                                                 8,328,138              8,308,301
     Accumulated deficit                                                       (3,568,722)            (3,600,706)
                                                                            -------------          -------------
                  Total stockholders' equity                                    4,903,022              4,851,201
                                                                            -------------          -------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                  $   5,665,826          $   5,711,661
                                                                            =============          =============
</TABLE>

                See notes to consolidated financial statements.
<PAGE>

                              SONO-TEK CORPORATION

                        CONSOLIDATED STATEMENTS OF INCOME
                                    Unaudited

<TABLE>
<CAPTION>
                                                        Six Months Ended August 31,        Three Months Ended August 31,
                                                      ------------------------------      ------------------------------
                                                           2007              2006              2007              2006
                                                      ------------------------------      ------------------------------

<S>                                                   <C>               <C>               <C>               <C>
Net Sales                                             $  2,647,166      $  3,615,682      $  1,414,523      $  1,833,938
Cost of Goods Sold                                       1,387,884         1,811,978           758,751           858,854
                                                      ------------      ------------      ------------      ------------
                  Gross Profit                           1,259,282         1,803,704           655,772           975,084
                                                      ------------      ------------      ------------      ------------

Operating Expenses
Research and product development costs                     432,827           377,333           205,792           197,823
Marketing and selling expenses                             494,086           660,336           260,042           339,848
General and administrative costs                           385,311           438,795           202,618           219,610
                                                      ------------      ------------      ------------      ------------
                  Total Operating Expenses               1,312,224         1,476,464           668,452           757,281
                                                      ------------      ------------      ------------      ------------

Operating Income (Loss)                                    (52,942)          327,240           (12,680)          217,803

Interest Expense                                            (2,377)           (3,308)           (1,142)           (2,014)
Interest Income                                             47,829            28,874            23,061            15,017
Other Income                                                 5,661             5,861             2,831             3,030
                                                      ------------      ------------      ------------      ------------

Income (Loss) from Operations Before Income Taxes           (1,829)          358,667            12,070           233,836

Income Tax (Benefit)                                       (33,813)               --                --                --
                                                      ------------      ------------      ------------      ------------

Net Income                                            $     31,984      $    358,667      $     12,070      $    233,836
                                                      ============      ============      ============      ============


Basic Earnings Per Share                              $       0.00      $       0.02      $       0.00      $       0.02
                                                      ============      ============      ============      ============

Diluted Earnings Per Share                            $       0.00      $       0.02      $       0.00      $       0.02
                                                      ============      ============      ============      ============

Weighted Average Shares - Basic                         14,360,541        14,359,341        14,360,541        14,360,541
                                                      ============      ============      ============      ============

Weighted Average Shares - Diluted                       14,445,376        14,461,122        14,444,427        14,460,211
                                                      ============      ============      ============      ============
</TABLE>

                See notes to consolidated financial statements.


                                       -2-
<PAGE>

                              SONO-TEK CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                  Six Months Ended August 31,
                                                                                --------------------------------
                                                                                            Unaudited
                                                                                     2007                2006
                                                                                --------------------------------

<S>                                                                             <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net Income                                                                  $    31,984          $   358,667

    Adjustments to reconcile net income to net cash provided by (used in)
       operating activities:
          Depreciation and amortization                                              67,907               40,175
          Provision for doubtful accounts                                                --                7,700
          Stock based compensation expense                                           19,838               36,451
       Gain on sale of equipment                                                         --               17,723
          Decrease (Increase) in:
              Accounts receivable                                                   149,557              (55,241)
              Inventories                                                          (159,851)            (127,529)
              Prepaid expenses and other current assets                              41,761               22,949
              Deferred tax asset                                                    (35,000)                  --
          (Decrease) Increase in:
              Accounts payable and accrued expenses                                 (84,187)             (11,162)
                                                                                -----------          -----------
       Net Cash Provided By Operating Activities                                     32,009              289,733
                                                                                -----------          -----------

CASH FLOW FROM INVESTING ACTIVITIES:
   Patent application costs                                                              --               (4,701)
   Purchase of equipment and furnishings                                            (64,002)             (98,503)
                                                                                -----------          -----------
       Net Cash (Used In) Investing Activities                                      (64,002)            (103,204)
                                                                                -----------          -----------

CASH FLOW FROM FINANCING ACTIVITIES:
   Proceeds from exercise of stock options and warrants                                  --                2,548
   Repayments of notes payable and loans                                            (13,469)             (12,655)
                                                                                -----------          -----------
       Net Cash (Used In) Financing Activities                                      (13,469)             (10,107)
                                                                                -----------          -----------

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                (45,462)             176,422

CASH AND CASH EQUIVALENTS
   Beginning of period                                                            2,268,976            1,740,804
                                                                                -----------          -----------
   End of period                                                                $ 2,223,514          $ 1,917,226
                                                                                ===========          ===========

SUPPLEMENTAL DISCLOSURE:
   Interest paid                                                                $     2,376          $     1,712
                                                                                ===========          ===========
</TABLE>

                See notes to consolidated financial statements.


                                       -3-
<PAGE>

                              SONO-TEK CORPORATION
                   Notes to Consolidated Financial Statements
                    Six Months Ended August 31, 2007 and 2006


NOTE 1: SIGNIFICANT ACCOUNTING POLICIES

Consolidation - The accompanying consolidated financial statements of Sono-Tek
Corporation, a New York Corporation (the "Company"), include the accounts of the
Company and its wholly owned subsidiary, Sono-Tek Cleaning Systems, Inc., a New
Jersey Corporation ("SCS") which the Company acquired on August 3, 1999, whose
operations have been discontinued. There have been no operations of this
subsidiary since Fiscal Year Ended February 28, 2002. All significant
intercompany accounts and transactions are eliminated in consolidation.

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. The Company occasionally has cash
or cash equivalents on hand in excess of the $100,000 insurable limits at a
given bank.

Fair Value of Financial Instruments - The carrying amounts reported in the
balance sheet for cash, receivables, accounts payable and accrued expenses
approximate fair value based on the short-term maturity of these instruments.

Interim Reporting - The attached summary consolidated financial information does
not include all disclosures required to be included in a complete set of
financial statements prepared in conformity with accounting principles generally
accepted in the United States of America. Such disclosures were included with
the financial statements of the Company at February 28, 2007, and included in
its report on Form 10-KSB. Such statements should be read in conjunction with
the data herein.

The financial information reflects all adjustments, normal and recurring, which,
in the opinion of management, are necessary for a fair presentation of the
results for the interim periods presented. The preparation of financial
statements in conformity with generally accepted accounting principles 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 financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates. The results for such interim periods are not necessarily indicative
of the results to be expected for the year.

Intangible Assets - Include cost of patent applications that are deferred and
charged to operations over seventeen years for domestic patents and twelve years
for foreign patents. The accumulated amortization is $56,418 and $54,350 at
August 31, 2007 and February 28, 2007, respectively. Annual amortization expense
of such intangible assets is expected to be $4,272 per year for the next five
years.


                                       -4-
<PAGE>

NOTE 2: INVENTORIES

Inventories at August 31, 2007 are comprised of:

       Finished goods                                      $  781,016
       Work in process                                        471,255
       Consignment                                              9,770
       Raw materials and subassemblies                        508,239
                                                           ----------
                         Total                              1,770,280
       Less: Allowance                                       (204,198)
                                                           ----------
       Net inventories                                     $1,566,082
                                                           ==========

NOTE 3: STOCK OPTIONS AND WARRANTS

Stock Options - Under the 2003 Stock Incentive Plan, as amended ("2003 Plan"),
options can be granted to officers, directors, consultants and employees of the
Company and its subsidiaries to purchase up to 1,500,000 of the Company's common
shares. The 2003 Plan supplemented and replaced the 1993 Stock Incentive Plan
(the "1993 Plan"), under which no further options may be granted. Options
granted under the 1993 Plan expire on various dates through 2013. As of August
31, 2007 there were 111,500 options outstanding under the 1993 Plan and 829,875
options outstanding under the 2003 plan.

Under both the 1993 and 2003 Stock Incentive Plans, option prices must be at
least 100% of the fair market value of the common stock at time of grant. For
qualified employees, except under certain circumstances specified in the plans
or unless otherwise specified at the discretion of the Board of Directors, no
option may be exercised prior to one year after date of grant, with the balance
becoming exercisable in cumulative installments over a three year period during
the term of the option, and terminating at a stipulated period of time after an
employee's termination of employment.

NOTE 4: STOCK BASED COMPENSATION

On March 1, 2006, the Company adopted SFAS No. 123R, "Share Based Payments."
SFAS No. 123R requires companies to expense the value of employee stock options
and similar awards for periods beginning after December 15, 2005, and applies to
all outstanding and vested stock-based awards at a company's adoption date.

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


                                       -5-
<PAGE>

                                                    2007             2006
                                             ----------------------------------
Expected life                                     4 years           4 years
Risk free interest rate                        4.35% - 5.07%      4% - 4.25%
Expected volatility                              39% - 78%            40%
Expected dividend yield                              0%               0%

In computing the impact, the fair value of each option is estimated on the date
of grant based on the Black-Scholes options-pricing model utilizing certain
assumptions for a risk free interest rate; volatility; and expected remaining
lives of the awards. The assumptions used in calculating the fair value of
share-based payment awards represent management's best estimates, but these
estimates involve inherent uncertainties and the application of management
judgment. As a result, if factors change and the Company uses different
assumptions, the Company's stock-based compensation expense could be materially
different in the future. In addition, the Company is required to estimate the
expected forfeiture rate and only recognize expense for those shares expected to
vest. In estimating the Company's forfeiture rate, the Company analyzed its
historical forfeiture rate, the remaining lives of unvested options, and the
amount of vested options as a percentage of total options outstanding. If the
Company's actual forfeiture rate is materially different from its estimate, or
if the Company reevaluates the forfeiture rate in the future, the stock-based
compensation expense could be significantly different from what the Company has
recorded in the current period.

For the six months ended August 31, 2007 and 2006, net income and earnings per
share reflect the actual deduction for stock-based compensation expense. The
impact of applying SFAS 123R approximated $19,838 and $36,451 in additional
compensation expense during the six months ended August 31, 2007 and 2006,
respectively. Such amount is included in general and administrative expenses on
the statement of operations. The expense for stock-based compensation is a
non-cash expense item.


                                      -6-
<PAGE>

NOTE 5: EARNINGS PER SHARE

The denominator for the calculation of diluted earnings per share at August 31,
2007 and 2006 are calculated as follows:

                                               August 31, 2007   August 31, 2006
                                               ---------------   ---------------

Denominator for basic earnings per share          14,360,541        14,359,341

Dilutive effect of stock options                      84,835           101,781
                                                  ----------        ----------

Denominator for diluted earnings per share        14,445,376        14,461,122
                                                  ==========        ==========

NOTE 6: OTHER INCOME

As previously disclosed on Form 8-K, filed on July 5, 2005, the Company
determined that a former employee had misappropriated approximately $250,000 of
the Company's monies, primarily through unauthorized check writing from the
Company's accounts over a period of three calendar years. The Company had
previously expensed substantially all of the misappropriated funds over the
years.

The Company has recovered approximately 70% of these funds to date. The Company
has a note that is being paid down by the former employee. As previously
discussed, the Company can offer no assurances that it will be successful in its
attempts to collect the balance of the remaining restitution.


                                       -7-
<PAGE>

                              SONO-TEK CORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

Forward-Looking Statements

We discuss expectations regarding our future performance, such as our business
outlook, in our annual and quarterly reports, press 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. The following risks are
by no means all inclusive but are designed to highlight what we believe are
important factors to consider when evaluating our trends and future results.

      -     Our ability to respond to competition in national and global
            markets.

      -     General economic conditions in our markets.

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

Overview

Sono-Tek has developed a unique and proprietary series of ultrasonic atomization
nozzles, which are being used in an increasing variety of electronic, medical,
industrial, and nanotechnology applications. These nozzles are electrically
driven and create a fine, uniform, low velocity spray of atomized liquid
particles, in contrast to common pressure nozzles. These characteristics create
a series of commercial applications that benefit from the precise, uniform, thin
coatings that can be achieved. When combined with significant reductions in
liquid waste and less overspray than can be achieved with ordinary pressure
nozzle systems, there is lower environmental impact.

We have a well established position in the electronics industry with our
SonoFlux spray fluxing equipment. It saves customers from 40% to 80% of the
liquid flux required to solder printed circuit boards over more labor intensive
methods, such as foam fluxing. Less flux equates to lower material cost, fewer
chemicals in the workplace, and less clean-up. Also, the SonoFlux equipment
reduces the number of soldering defects, which reduces the amount of rework.

In the past three years, we have focused engineering resources on the medical
device market, with emphasis on providing coating solutions for the new
generation of drug coated stents. We have sold a significant number of
specialized ultrasonic nozzles and MediCoat stent coating systems to large
medical device customers. Sono-Tek's stent coating systems are superior compared
to pressure nozzles in their ability to uniformly coat the very small arterial
stents without creating webs or gaps in the coatings. We also sell a bench-top,
fully outfitted stent coating system to a wide range of customers that are
manufacturing stents and/or applying coatings to be used in developmental
trials. With our success in the medical device market, we have demonstrated that
we can grow new markets by developing new applications with our technology.


                                       -8-
<PAGE>

We have also committed engineering resources to the development of the WideTrack
coating system, a broad based platform for applying a variety of coatings to
moving webs of glass, textiles, plastic, metal, food products and packaging
materials. The WideTrack is a long term product and market development effort.
Thus far, we have made successful inroads with WideTrack systems into the glass,
medical textile (bandages) and solar and fuel cell industries.

We are heavily focused on developing the food industry market. This will require
a continuation of market and technology development in this area in the years
ahead. We believe there is an excellent fit between the food industry and our
spraying and coating technology.

Our new product offering, the SonoDry ultrasonic spray dryer, has shown great
potential since its introduction earlier this year. The product is being well
received on a global basis and we are in the process of completing several sales
of these units. The SonoDry series of spray dryers is of particular importance
to product and process developers in the following industries: Pharmaceuticals
(e.g. for drug actives and intermediates, enzymes and low molecular weight
proteins), Foods (e.g. for nutriceuticals, herbal extracts and flavors) and
Specialty Chemicals (e.g. for fragrances, Cosmetics ingredients and nano-scale
particles).

During the second quarter, our global electronics business continued in a slower
mode when compared to more robust periods. One factor has been the domestic
housing market and its impact on electronics purchases. An additional factor is
that many domestic corporations have moved their manufacturing facilities
offshore. It is approximately 47% below the same period last year. Our quarterly
revenues and net income have been affected by a slow electronics market which
was partially offset by some of our new market initiatives. We are continuing
our work on expanding our geographical markets and the creation of technical
innovations for our products.

Liquidity and Capital Resources

Working Capital - Our working capital increased $7,000 from a working capital of
$4,232,000 at February 28, 2007 to $4,239,000 at August 31, 2007. The Company's
current ratio is 7.56 to 1 at August 31, 2007 as compared to 6.8 to 1 at
February 28, 2007.

Stockholders' Equity - Stockholder's Equity increased $52,000 from $4,851,000 at
February 28, 2007 to $4,903,000 at August 31, 2007. The increase is the result
of net income of $32,000 and an adjustment for stock based compensation expense
of $20,000.

Operating Activities - Our operations provided $32,000 of cash for the six
months ended August 31, 2007, a decrease of $258,000 when compared to the six
months ended August 31, 2006. The decrease is primarily a result of a decrease
in net income for the current period.


                                       -9-
<PAGE>

Investing Activities - We used $64,000 for the purchase of capital equipment
during the six months ended August 31, 2007 compared to the use of $103,000
during the six months ended August 31, 2006.

Financing Activities - For the six months ended August 31, 2007, we used $13,000
in financing activities resulting from the repayment of our notes payable. For
the six months ended August 31, 2006, we used $10,000 in financing activities
resulting from the repayment of notes payable of $12,500 and the proceeds of
stock option exercises of $2,500.

Results of Operations

During the six month period ended August 31, 2007, our sales decreased $969,000
or 27% to $2,647,000 as compared to $3,616,000 for the six months ended August
31, 2006. For the three months ended August 31, 2007, our sales decreased
$419,000 to $1,415,000 as compared to $1,834,000 for the three months ended
August 31, 2006. During the six month period ended August 31, 2007, we continued
to see a decrease in sales of both fluxer units and nozzles when compared to the
six month period ended August 31, 2006. The decrease in sales of these units was
partially offset by sales of our WideTrack units and EVS Systems used for solder
recovery.

Our gross profit decreased $545,000 to $1,259,000 for the six months ended
August 31, 2007 from $1,804,000 for the six months ended August 31, 2006. The
gross profit margin was 48% of sales for the six months ended August 31, 2007 as
compared to 50% of sales for the six months ended August 31, 2006. Our gross
profit decreased $319,000 to $656,000 for the three months ended August 31, 2007
as compared to $975,000 for the three months ended August 31, 2006. The gross
profit margin was 46% of sales for the three months ended August 31, 2007 as
compared to 53% of sales for the three months ended August 31, 2006. The
decrease in the gross profit margin is due to the mix of products sold in the
current quarter.

Research and product development costs increased $56,000 to $433,000 for the six
months ended August 31, 2007 from $377,000 for the six months ended August 31,
2006 and $8,000 to $206,000 for the three months ended August 31, 2007 from
$198,000 for the three months ended August 31, 2006. The increases were
principally due to an increase in engineering personnel in the current periods.
The increases are aimed at the development of new products which will benefit
future periods.

Marketing and selling costs decreased $166,000 to $494,000 for the six months
ended August 31, 2007 from $660,000 for the six months ended August 31, 2006 and
$80,000 to $260,000 for the three months ended August 31, 2007 from $340,000 for
the three months ended August 31, 2006. The decrease was due to decreased
salaries, commissions and travel expenses.

General and administrative costs decreased $54,000 to $385,000 for the six
months ended August 31, 2007 from $439,000 for the six months ended August 31,
2006 and $17,000 to $203,000 for the three months ended August 31, 2007 from
$220,000 for the three months ended August 31, 2006. The decrease was due to
reduced employee salaries and bonuses, bad debt allowance and a reduction
in stock based compensation expense.


                                      -10-
<PAGE>

Critical Accounting Policies

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.

Critical accounting policies 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-KSB for the year ended February 28, 2007.

Accounting for Income Taxes
As part of the process of preparing the Company's consolidated financial
statements, the Company is required to estimate its income taxes. Management
judgment is required in determining the provision on its deferred tax asset. The
Company reduced the valuation reserve for the deferred tax asset resulting from
the net operating losses carried forward due to the Company having demonstrated
consistent profitable operations. In the event that actual results differ from
these estimates, the Company may need to again adjust such valuation reserve.

Stock-Based Compensation
Prior to fiscal year 2007, the Company accounted for employee stock options
under the fair value provisions of SFAS No. 123. On March 1, 2006, the Company
adopted SFAS No. 123R, "Share Based Payments." SFAS No. 123R requires companies
to expense the value of employee stock options and similar awards for periods
beginning after December 15, 2005, and applies to all outstanding and vested
stock-based awards at a company's adoption date. Results from prior periods have
not been restated in the Company's historical financial statements.

Impact of New Accounting Pronouncements

None.


                                      -11-
<PAGE>

                              SONO-TEK CORPORATION
                             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'). Christopher L. Coccio,
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 August 31, 2007. 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 second fiscal quarter of 2008 that have
materially affected, or are reasonably likely to materially affect, internal
controls over financial reporting.


                                      -12-
<PAGE>

                           PART II - OTHER INFORMATION

         Item 1.    Legal Proceedings
                    None

         Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds.
                    None

         Item 3.    Defaults Upon Senior Securities
                    None

         Item 4.    Submission of Matters to a Vote of Security Holders

                    The following matters were voted upon at the Company's
                    annual meeting of shareholders held on August 16, 2007.

                        1.    The election of two (2) directors of the Company
                              to serve until the Company's 2009 annual meeting
                              of shareholders.

                                                    For             Against
                                                    ---             -------
                        Christopher L. Coccio    10,417,702         281,372
                        Philip Strasburg         10,444,591         254,483

                              There were no broker non-votes.

                              Edward J. Handler, Donald F. Mowbray and Samuel
                        Schwartz, who were not standing for re-election,
                        continued to serve as Directors following the annual
                        meeting.

                        2.    The ratification of the appointment of Sherb & Co.
                              as the Company's independent auditors for the
                              fiscal year ending February 29, 2008.

                              For 10,381,620; Against 298,654; Abstained 18,800
                              There were no broker non-votes.

         Item 5.    Other Information
                    None

         Item 6.    Exhibits and Reports
                    (a)   Exhibits

                    10.1 Executive Agreement between Sono-Tek Corporation and
                         Stephen J. Bagley dated September 1, 2007.

                    10.2 Executive Agreement between Sono-Tek Corporation and
                         Christopher L. Coccio dated September 1, 2007.

                    10.3 Executive Agreement between Sono-Tek Corporation and
                         Joseph Riemer dated September 1, 2007.

                    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.


                                      -13-
<PAGE>

                                   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: October 10, 2007

                                      SONO-TEK CORPORATION
                                           (Registrant)


                             By: /s/ Christopher L. Coccio
                                 -------------------------
                                    Christopher L. Coccio
                                   Chief Executive Officer


                             By: /s/ Stephen J. Bagley
                                 -------------------------
                                     Stephen J. Bagley
                                  Chief Financial Officer


                                      -14-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>ex10-1.txt
<TEXT>
                                                                    Exhibit 10.1


            EXECUTIVE AGREEMENT between Sono-Tek Corporation, a New York
corporation (the "Company") and Stephen J. Bagley ("Executive"), dated as of the
1st day of September, 2007.

                              W I T N E S S E T H:

            WHEREAS, Executive is an employee of the Company and is an integral
part of its management; and

            WHEREAS, it is in the best interest of the Company that Executive
continue in the service of the Company without the benefits which would accrue
to Executive pursuant to an employment agreement; and

            WHEREAS, the Company wishes to assure itself of continuity of
management during the critical period of any actual or threatened change in
control of the Company.

            NOW, THEREFORE, it is hereby agreed by and between the parties as
follows:

            1. Employment Status.

            In consideration of the benefits provided to Executive pursuant to
this Executive Agreement, Executive hereby agrees to continue to be employed by
the Company as an employee-at-will without the benefit of an employment
agreement. Nothing expressed or implied herein shall create any right or duty
(on the part of the Company or Executive) to have Executive remain in the
employment of the Company, each reserving all rights to terminate the employment
relationship at any time, with or without "Cause" (as hereinafter defined).

            2. Term.

            The term of this Executive Agreement shall commence on the date
hereof and shall terminate on the earlier to occur of (i) termination of
Executive's employment for whatever reason, unless a Change of Control (as
hereinafter defined) shall have occurred prior to such termination or (ii)
twelve months following written notice of termination of this Executive
Agreement given by the Company or Executive.

            3. Payment Subsequent to Change of Control.

                  a. Except as may otherwise be required in accordance with
Section 8 hereof, in the event that a Change of Control of the Company shall
occur during the time Executive is employed by the Company, there shall be
payable to Executive upon the termination of Executive's employment without
Cause or Executive's Resignation for Good Reason (as hereinafter defined) within
18 months following such Change of Control a lump sum (net of any required tax
or other withholding) equal to one year of Executive's annual base and bonus
compensation paid by the Company for the previous calendar year (or such lesser
<PAGE>

period as Executive shall have been employed by the Company) immediately
preceding the Change of Control as reflected in Executive's Forms W-2 in respect
of such year. Payment made in accordance with this Section 3(a) shall represent
full satisfaction of all of the obligations of the Company under this Executive
Agreement and concurrent with receipt of such payment Executive shall execute a
document satisfactory to the Company to that effect.

                  b. For the purpose of this Executive Agreement, a "Change of
Control" of the Company shall mean any of the following:

                        i.    The sale to a "Non-Affiliate" (as defined below)
                              of all or substantially all of the assets of the
                              Company;

                        ii.   The merger of the Company with or into a
                              Non-Affiliate where immediately following such
                              transaction 50% or more of the outstanding voting
                              stock of the remaining entity is not owned by
                              persons who were shareholders of the Company
                              immediately prior to such transaction;

                        iii.  The acquisition by any person who is not on the
                              date hereof an Affiliate or Major Shareholder (as
                              such terms are defined below) of 50% or more of
                              the issued and outstanding stock of the Company;
                              or

                        iv.   The Board of Directors of the Company shall cease
                              to be a "Qualified Board" (as defined below).

                  c. For purposes of this Executive Agreement:

                        i.    Persons or entities shall be "Affiliates" if one
                              controls the other or if they are under common
                              control. "Control" shall mean the ownership of 50%
                              or more of the issued and outstanding stock of any
                              such entity.

                        ii.   "Major Shareholder" shall mean any person or
                              entity who directly or indirectly currently owns
                              as of the date of this Agreement 25% of the issued
                              and outstanding stock of the Company.

                        iii.  "Qualified Board" shall mean the Board of
                              Directors of the Company which is comprised of no
                              fewer than five persons at least a majority of
                              whose members are currently directors of the
                              Company or shall have been elected or nominated to
                              the Board by a "Qualified Board."

                        iv.   "Cause" shall mean: (1) proven or admitted (A)
                              embezzlement, or (B) material dishonest misuse of
                              the Company funds or assets; (2) an admitted or
                              proven act constituting a felony or misdemeanor
                              (other than minor offenses such as traffic
                              violations) or conviction for such act; (3)


                                        2
<PAGE>

                              continued conduct materially adverse to the
                              interests of the Company which does not cease
                              within thirty (30) days of written notice from the
                              Board of Directors of the Company; (4) repeated
                              material failure by Executive, after written
                              warning by the Board of Directors of the Company,
                              to perform the duties of his or her employment
                              (including without limitation material failure to
                              follow or comply with the reasonable and lawful
                              written directives of the Board of Directors of
                              the Company); or (5) breach of any statutory or
                              common law fiduciary duty of loyalty to the
                              Company which is not cured within thirty (30) days
                              of written notice from the Board of Directors of
                              the Company.

                  d. For purposes of this Executive Agreement "Resignation for
Good Reason" shall be deemed to have occurred if the Executive shall resign from
all of his or her positions as employee, officer, director of the Company, and
its Affiliates within 60 days after the occurrence of any of the following
events:

                        i.    If the Executive is an officer of the Company, the
                              Executive is removed from that post except for the
                              purposes of assuming another post in the Company
                              which other post the Executive accepts.

                        ii.   The imposition on the Executive of a requirement
                              to relocate the site of his or her employment by
                              the Company to a place more than 50 miles from the
                              site of his or her present employment.

                        iii.  A reduction in the Executive's rate of
                              compensation from the Company, which reduction
                              continues after the Executive has protested in
                              writing to the Chief Executive Officer of the
                              Company referring to this Executive Agreement.

                        iv.   A substantial negative change in the duties,
                              responsibilities or supervisory authority of the
                              Executive which change persists for a period of at
                              least 60 days after written protest by the
                              Executive to the Chief Executive Officer of the
                              Company referring to this Executive Agreement.

            4. Notices.

            All notices, requests, demands and other communications provided for
by this Executive Agreement shall be in writing and shall be sufficiently given
if and when mailed in the continental United States by registered or certified
mail or personally delivered to the party entitled thereto at the address stated
below or to such changed address as the addressee may have given by a similar
notice:

To the Company:   Sono-Tek Corporation
                  2012 Route 9W
                  Milton, NY 12547


                                        3
<PAGE>

To the Executive: Stephen J. Bagley
                  128 North Ohioville Road
                  New Paltz, NY 12561

            5. Agreement for Benefit of Executive.

            This Executive Agreement shall be binding upon and shall inure to
the benefit of the Executive, the Executive's heirs and legal representative,
and the Company and its successors.

            6. Amendment or Modification; Waiver.

            No provision of this Executive Agreement may be amended, modified or
waived unless such amendment, modification or waiver shall be authorized by the
Boards of Director of the Company or any authorized committees of the Boards of
Directors and shall be agreed to in writing, signed by the Executive and by an
officer of the Company thereunto duly authorized. Except as otherwise
specifically provided in this Executive Agreement, no waiver by either party
hereto of any breach by the other party hereto of any condition or provision of
this Executive Agreement to be performed by such other party shall be deemed a
waiver of a subsequent breach of such condition or provision or a waiver of a
similar or dissimilar provision or condition at the same or at any prior or
subsequent time.

            7. Governing Law.

            This Agreement shall be governed by and interpreted and construed in
accordance with the internal laws of the State of New York (without reference to
principles of conflicts or choice of law).

            8. Section 409A.

            Notwithstanding anything to the contrary in this Agreement, if the
Company determines (a) that on the date the Executive's employment with the
Company terminates or at such other time that the Company determines to be
relevant, the Executive is a "specified employee" (as such term is defined under
Section 409A of the Internal Revenue Code) of the Company and (b) that any
payments to be provided to the Executive pursuant to this Agreement are or may
become subject to the additional tax under Section 409A(a)(1)(B) of the Code or
any other taxes or penalties imposed under Section 409A of the Code ("Section
409A Taxes") if provided at the time otherwise required under this Agreement,
then such payments shall be delayed until the date (the " Deferred Payment
Date") that is six months after the date of the Executive's "separation from
service" (as such term is defined under Section 409A of the Code) with the
Company, or such shorter period that, as determined by the Company, is
sufficient to avoid the imposition of Section 409A Taxes; it being understood
that any payments so delayed shall become payable in the aggregate on the
Deferred Payment Date. It is the intent of the parties that the provisions of


                                        4
<PAGE>

this Agreement comply with Section 409A of the Code and related regulations and
Department of the Treasury pronouncements. Accordingly, notwithstanding any
provision in this Agreement to the contrary, this Agreement will be interpreted,
applied and to the minimum extent necessary, unilaterally amended by the Company
in its sole discretion, without the consent of Executive, as the Company deems
appropriate for the Agreement to satisfy the requirements of Section 409A and to
avoid the imposition of Section 409A Taxes. Notwithstanding the foregoing, the
Company shall not be liable for any taxes, penalties, interest or other costs
that may arise under Section 409A or otherwise.

            IN WITNESS WHEREOF, the parties hereto have executed this Executive
Agreement as of the day and year first above written.

                              Sono-Tek Corporation


                              By /s/ Christopher L. Coccio
                                 ------------------------
                                 Christopher L. Coccio
                                 Chief Executive Officer


                                 /s/ Stephen J. Bagley
                                 ------------------------
                                 Stephen J. Bagley


                                        5
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>ex10-2.txt
<TEXT>
                                                                    Exhibit 10.2

            EXECUTIVE AGREEMENT between Sono-Tek Corporation, a New York
corporation (the "Company") and Christopher L. Coccio ("Executive"), dated as of
the 1st day of September, 2007.

                              W I T N E S S E T H:

            WHEREAS, Executive is an employee of the Company and is an integral
part of its management; and

            WHEREAS, it is in the best interest of the Company that Executive
continue in the service of the Company without the benefits which would accrue
to Executive pursuant to an employment agreement; and

            WHEREAS, the Company wishes to assure itself of continuity of
management during the critical period of any actual or threatened change in
control of the Company.

            NOW, THEREFORE, it is hereby agreed by and between the parties as
follows:

            1. Employment Status.

            In consideration of the benefits provided to Executive pursuant to
this Executive Agreement, Executive hereby agrees to continue to be employed by
the Company as an employee-at-will without the benefit of an employment
agreement. Nothing expressed or implied herein shall create any right or duty
(on the part of the Company or Executive) to have Executive remain in the
employment of the Company, each reserving all rights to terminate the employment
relationship at any time, with or without "Cause" (as hereinafter defined).

            2. Term.

            The term of this Executive Agreement shall commence on the date
hereof and shall terminate on the earlier to occur of (i) termination of
Executive's employment for whatever reason, unless a Change of Control (as
hereinafter defined) shall have occurred prior to such termination or (ii)
twelve months following written notice of termination of this Executive
Agreement given by the Company or Executive.

            3. Payment Subsequent to Change of Control.

                  a. Except as may otherwise be required in accordance with
Section 8 hereof, in the event that a Change of Control of the Company shall
occur during the time Executive is employed by the Company, there shall be
payable to Executive upon the termination of Executive's employment without
Cause or Executive's Resignation for Good Reason (as hereinafter defined) within
18 months following such Change of Control a lump sum (net of any required tax
or other withholding) equal to one year of Executive's annual base and bonus
compensation paid by the Company for the previous calendar year (or such lesser
period as Executive shall have been employed by the Company) immediately
<PAGE>

preceding the Change of Control as reflected in Executive's Forms W-2 in respect
of such year. Payment made in accordance with this Section 3(a) shall represent
full satisfaction of all of the obligations of the Company under this Executive
Agreement and concurrent with receipt of such payment Executive shall execute a
document satisfactory to the Company to that effect.

                  b. For the purpose of this Executive Agreement, a "Change of
Control" of the Company shall mean any of the following:

                        i.    The sale to a "Non-Affiliate" (as defined below)
                              of all or substantially all of the assets of the
                              Company;

                        ii.   The merger of the Company with or into a
                              Non-Affiliate where immediately following such
                              transaction 50% or more of the outstanding voting
                              stock of the remaining entity is not owned by
                              persons who were shareholders of the Company
                              immediately prior to such transaction;

                        iii.  The acquisition by any person who is not on the
                              date hereof an Affiliate or Major Shareholder (as
                              such terms are defined below) of 50% or more of
                              the issued and outstanding stock of the Company;
                              or

                        iv.   The Board of Directors of the Company shall cease
                              to be a "Qualified Board" (as defined below).

                  c. For purposes of this Executive Agreement:

                        i.    Persons or entities shall be "Affiliates" if one
                              controls the other or if they are under common
                              control. "Control" shall mean the ownership of 50%
                              or more of the issued and outstanding stock of any
                              such entity.

                        ii.   "Major Shareholder" shall mean any person or
                              entity who directly or indirectly currently owns
                              as of the date of this Agreement 25% of the issued
                              and outstanding stock of the Company.

                        iii.  "Qualified Board" shall mean the Board of
                              Directors of the Company which is comprised of no
                              fewer than five persons at least a majority of
                              whose members are currently directors of the
                              Company or shall have been elected or nominated to
                              the Board by a "Qualified Board."

                        iv.   "Cause" shall mean: (1) proven or admitted (A)
                              embezzlement, or (B) material dishonest misuse of
                              the Company funds or assets; (2) an admitted or
                              proven act constituting a felony or misdemeanor


                                        2
<PAGE>

                              (other than minor offenses such as traffic
                              violations) or conviction for such act; (3)
                              continued conduct materially adverse to the
                              interests of the Company which does not cease
                              within thirty (30) days of written notice from the
                              Board of Directors of the Company; (4) repeated
                              material failure by Executive, after written
                              warning by the Board of Directors of the Company,
                              to perform the duties of his or her employment
                              (including without limitation material failure to
                              follow or comply with the reasonable and lawful
                              written directives of the Board of Directors of
                              the Company); or (5) breach of any statutory or
                              common law fiduciary duty of loyalty to the
                              Company which is not cured within thirty (30) days
                              of written notice from the Board of Directors of
                              the Company.

                  d. For purposes of this Executive Agreement "Resignation for
Good Reason" shall be deemed to have occurred if the Executive shall resign from
all of his or her positions as employee, officer, director of the Company, and
its Affiliates within 60 days after the occurrence of any of the following
events:

                        i.    If the Executive is an officer of the Company, the
                              Executive is removed from that post except for the
                              purposes of assuming another post in the Company
                              which other post the Executive accepts.

                        ii.   The imposition on the Executive of a requirement
                              to relocate the site of his or her employment by
                              the Company to a place more than 50 miles from the
                              site of his or her present employment.

                        iii.  A reduction in the Executive's rate of
                              compensation from the Company, which reduction
                              continues after the Executive has protested in
                              writing to the Chief Executive Officer of the
                              Company referring to this Executive Agreement.

                        iv.   A substantial negative change in the duties,
                              responsibilities or supervisory authority of the
                              Executive which change persists for a period of at
                              least 60 days after written protest by the
                              Executive to the Chief Executive Officer of the
                              Company referring to this Executive Agreement.

            4. Notices.

            All notices, requests, demands and other communications provided for
by this Executive Agreement shall be in writing and shall be sufficiently given
if and when mailed in the continental United States by registered or certified
mail or personally delivered to the party entitled thereto at the address stated
below or to such changed address as the addressee may have given by a similar
notice:

To the Company:   Sono-Tek Corporation
                  2012 Route 9W
                  Milton, NY 12547


                                        3
<PAGE>

To the Executive: Christopher L. Coccio
                  29 Watson Ave
                  Milton, NY 12547

            5. Agreement for Benefit of Executive.

            This Executive Agreement shall be binding upon and shall inure to
the benefit of the Executive, the Executive's heirs and legal representative,
and the Company and its successors. 6. Amendment or Modification; Waiver.

            No provision of this Executive Agreement may be amended, modified or
waived unless such amendment, modification or waiver shall be authorized by the
Boards of Director of the Company or any authorized committees of the Boards of
Directors and shall be agreed to in writing, signed by the Executive and by an
officer of the Company thereunto duly authorized. Except as otherwise
specifically provided in this Executive Agreement, no waiver by either party
hereto of any breach by the other party hereto of any condition or provision of
this Executive Agreement to be performed by such other party shall be deemed a
waiver of a subsequent breach of such condition or provision or a waiver of a
similar or dissimilar provision or condition at the same or at any prior or
subsequent time.

            7. Governing Law.

            This Agreement shall be governed by and interpreted and construed in
accordance with the internal laws of the State of New York (without reference to
principles of conflicts or choice of law).

            8. Section 409A.

            Notwithstanding anything to the contrary in this Agreement, if the
Company determines (a) that on the date the Executive's employment with the
Company terminates or at such other time that the Company determines to be
relevant, the Executive is a "specified employee" (as such term is defined under
Section 409A of the Internal Revenue Code) of the Company and (b) that any
payments to be provided to the Executive pursuant to this Agreement are or may
become subject to the additional tax under Section 409A(a)(1)(B) of the Code or
any other taxes or penalties imposed under Section 409A of the Code ("Section
409A Taxes") if provided at the time otherwise required under this Agreement,
then such payments shall be delayed until the date (the " Deferred Payment
Date") that is six months after the date of the Executive's "separation from
service" (as such term is defined under Section 409A of the Code) with the
Company, or such shorter period that, as determined by the Company, is
sufficient to avoid the imposition of Section 409A Taxes; it being understood


                                        4
<PAGE>

that any payments so delayed shall become payable in the aggregate on the
Deferred Payment Date. It is the intent of the parties that the provisions of
this Agreement comply with Section 409A of the Code and related regulations and
Department of the Treasury pronouncements. Accordingly, notwithstanding any
provision in this Agreement to the contrary, this Agreement will be interpreted,
applied and to the minimum extent necessary, unilaterally amended by the Company
in its sole discretion, without the consent of Executive, as the Company deems
appropriate for the Agreement to satisfy the requirements of Section 409A and to
avoid the imposition of Section 409A Taxes. Notwithstanding the foregoing, the
Company shall not be liable for any taxes, penalties, interest or other costs
that may arise under Section 409A or otherwise.

            IN WITNESS WHEREOF, the parties hereto have executed this Executive
Agreement as of the day and year first above written.

                              Sono-Tek Corporation

                              By /s/ Stephen J. Bagley
                                 -----------------------
                                 Chief Financial Officer

                              /s/ Christopher L. Coccio
                              --------------------------
                              Christopher L. Coccio


                                        5
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>4
<FILENAME>ex10-3.txt
<TEXT>
                                                                    Exhibit 10.3

            EXECUTIVE AGREEMENT between Sono-Tek Corporation, a New York
corporation (the "Company") and Joseph Riemer ("Executive"), dated as of the 1st
day of September, 2007.

                              W I T N E S S E T H:

            WHEREAS, Executive is an employee of the Company and is an integral
part of its management; and

            WHEREAS, it is in the best interest of the Company that Executive
continue in the service of the Company without the benefits which would accrue
to Executive pursuant to an employment agreement; and

            WHEREAS, the Company wishes to assure itself of continuity of
management during the critical period of any actual or threatened change in
control of the Company.

            NOW, THEREFORE, it is hereby agreed by and between the parties as
follows:

            1. Employment Status.

            In consideration of the benefits provided to Executive pursuant to
this Executive Agreement, Executive hereby agrees to continue to be employed by
the Company as an employee-at-will without the benefit of an employment
agreement. Nothing expressed or implied herein shall create any right or duty
(on the part of the Company or Executive) to have Executive remain in the
employment of the Company, each reserving all rights to terminate the employment
relationship at any time, with or without "Cause" (as hereinafter defined).

            2. Term.

            The term of this Executive Agreement shall commence on the date
hereof and shall terminate on the earlier to occur of (i) termination of
Executive's employment for whatever reason, unless a Change of Control (as
hereinafter defined) shall have occurred prior to such termination or (ii)
twelve months following written notice of termination of this Executive
Agreement given by the Company or Executive.

            3. Payment Subsequent to Change of Control.

                  e. Except as may otherwise be required in accordance with
Section 8 hereof, in the event that a Change of Control of the Company shall
occur during the time Executive is employed by the Company, there shall be
payable to Executive upon the termination of Executive's employment without
Cause or Executive's Resignation for Good Reason (as hereinafter defined) within
18 months following such Change of Control a lump sum (net of any required tax
<PAGE>

or other withholding) equal to one year of Executive's annual base and bonus
compensation paid by the Company for the previous calendar year (or such lesser
period as Executive shall have been employed by the Company) immediately
preceding the Change of Control as reflected in Executive's Forms W-2 in respect
of such year. Payment made in accordance with this Section 3(a) shall represent
full satisfaction of all of the obligations of the Company under this Executive
Agreement and concurrent with receipt of such payment Executive shall execute a
document satisfactory to the Company to that effect.

                  f. For the purpose of this Executive Agreement, a "Change of
Control" of the Company shall mean any of the following:

                        i.    The sale to a "Non-Affiliate" (as defined below)
                              of all or substantially all of the assets of the
                              Company;

                        ii.   The merger of the Company with or into a
                              Non-Affiliate where immediately following such
                              transaction 50% or more of the outstanding voting
                              stock of the remaining entity is not owned by
                              persons who were shareholders of the Company
                              immediately prior to such transaction;

                        iii.  The acquisition by any person who is not on the
                              date hereof an Affiliate or Major Shareholder (as
                              such terms are defined below) of 50% or more of
                              the issued and outstanding stock of the Company;
                              or

                        iv.   The Board of Directors of the Company shall cease
                              to be a "Qualified Board" (as defined below).

                  g. For purposes of this Executive Agreement:

                        i.    Persons or entities shall be "Affiliates" if one
                              controls the other or if they are under common
                              control. "Control" shall mean the ownership of 50%
                              or more of the issued and outstanding stock of any
                              such entity.

                        ii.   "Major Shareholder" shall mean any person or
                              entity who directly or indirectly currently owns
                              as of the date of this Agreement 25% of the issued
                              and outstanding stock of the Company.

                        iii.  "Qualified Board" shall mean the Board of
                              Directors of the Company which is comprised of no
                              fewer than five persons at least a majority of
                              whose members are currently directors of the
                              Company or shall have been elected or nominated to
                              the Board by a "Qualified Board."

                        iv.   "Cause" shall mean: (1) proven or admitted (A)
                              embezzlement, or (B) material dishonest misuse of
                              the Company funds or assets; (2) an admitted or
                              proven act constituting a felony or misdemeanor
                              (other than minor offenses such as traffic
                              violations) or conviction for such act; (3)


                                        2
<PAGE>

                              continued conduct materially adverse to the
                              interests of the Company which does not cease
                              within thirty (30) days of written notice from the
                              Board of Directors of the Company; (4) repeated
                              material failure by Executive, after written
                              warning by the Board of Directors of the Company,
                              to perform the duties of his or her employment
                              (including without limitation material failure to
                              follow or comply with the reasonable and lawful
                              written directives of the Board of Directors of
                              the Company); or (5) breach of any statutory or
                              common law fiduciary duty of loyalty to the
                              Company which is not cured within thirty (30) days
                              of written notice from the Board of Directors of
                              the Company.

                  h. For purposes of this Executive Agreement "Resignation for
Good Reason" shall be deemed to have occurred if the Executive shall resign from
all of his or her positions as employee, officer, director of the Company, and
its Affiliates within 60 days after the occurrence of any of the following
events:

                        i.    If the Executive is an officer of the Company, the
                              Executive is removed from that post except for the
                              purposes of assuming another post in the Company
                              which other post the Executive accepts.

                        ii.   The imposition on the Executive of a requirement
                              to relocate the site of his or her employment by
                              the Company to a place more than 50 miles from the
                              site of his or her present employment.

                        iii.  A reduction in the Executive's rate of
                              compensation from the Company, which reduction
                              continues after the Executive has protested in
                              writing to the Chief Executive Officer of the
                              Company referring to this Executive Agreement.

                        iv.   A substantial negative change in the duties,
                              responsibilities or supervisory authority of the
                              Executive which change persists for a period of at
                              least 60 days after written protest by the
                              Executive to the Chief Executive Officer of the
                              Company referring to this Executive Agreement.

            4. Notices.

            All notices, requests, demands and other communications provided for
by this Executive Agreement shall be in writing and shall be sufficiently given
if and when mailed in the continental United States by registered or certified
mail or personally delivered to the party entitled thereto at the address stated
below or to such changed address as the addressee may have given by a similar
notice:

To the Company:   Sono-Tek Corporation
                  2012 Route 9W
                  Milton, NY 12547


                                        3
<PAGE>

To the Executive: Joseph Riemer
                  PO Box 43
                  Dorset, VT 05251

            5. Agreement for Benefit of Executive.

            This Executive Agreement shall be binding upon and shall inure to
the benefit of the Executive, the Executive's heirs and legal representative,
and the Company and its successors.

            6. Amendment or Modification; Waiver.

            No provision of this Executive Agreement may be amended, modified or
waived unless such amendment, modification or waiver shall be authorized by the
Boards of Director of the Company or any authorized committees of the Boards of
Directors and shall be agreed to in writing, signed by the Executive and by an
officer of the Company thereunto duly authorized. Except as otherwise
specifically provided in this Executive Agreement, no waiver by either party
hereto of any breach by the other party hereto of any condition or provision of
this Executive Agreement to be performed by such other party shall be deemed a
waiver of a subsequent breach of such condition or provision or a waiver of a
similar or dissimilar provision or condition at the same or at any prior or
subsequent time.

            7. Governing Law.

            This Agreement shall be governed by and interpreted and construed in
accordance with the internal laws of the State of New York (without reference to
principles of conflicts or choice of law).

            8. Section 409A.

            Notwithstanding anything to the contrary in this Agreement, if the
Company determines (a) that on the date the Executive's employment with the
Company terminates or at such other time that the Company determines to be
relevant, the Executive is a "specified employee" (as such term is defined under
Section 409A of the Internal Revenue Code) of the Company and (b) that any
payments to be provided to the Executive pursuant to this Agreement are or may
become subject to the additional tax under Section 409A(a)(1)(B) of the Code or
any other taxes or penalties imposed under Section 409A of the Code ("Section
409A Taxes") if provided at the time otherwise required under this Agreement,
then such payments shall be delayed until the date (the " Deferred Payment
Date") that is six months after the date of the Executive's "separation from
service" (as such term is defined under Section 409A of the Code) with the
Company, or such shorter period that, as determined by the Company, is
sufficient to avoid the imposition of Section 409A Taxes; it being understood


                                        4
<PAGE>

that any payments so delayed shall become payable in the aggregate on the
Deferred Payment Date. It is the intent of the parties that the provisions of
this Agreement comply with Section 409A of the Code and related regulations and
Department of the Treasury pronouncements. Accordingly, notwithstanding any
provision in this Agreement to the contrary, this Agreement will be interpreted,
applied and to the minimum extent necessary, unilaterally amended by the Company
in its sole discretion, without the consent of Executive, as the Company deems
appropriate for the Agreement to satisfy the requirements of Section 409A and to
avoid the imposition of Section 409A Taxes. Notwithstanding the foregoing, the
Company shall not be liable for any taxes, penalties, interest or other costs
that may arise under Section 409A or otherwise.

            IN WITNESS WHEREOF, the parties hereto have executed this Executive
Agreement as of the day and year first above written.

                            Sono-Tek Corporation


                            By /s/ Christopher Coccio
                               -----------------------
                               Christopher L. Coccio
                               Chief Executive Officer


                            /s/ Joseph Riemer
                            --------------------------
                            Joseph Riemer


                                       5
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>5
<FILENAME>ex31-1.txt
<TEXT>
                                                                    Exhibit 31.1


                      RULE 13a-14/15d - 14(a) CERTIFICATION

I, Christopher L. Coccio, Chief Executive Officer, certify that:

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

2.    Based on my knowledge, this quarterly report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this quarterly report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the small business issuer as of, and for the periods presented in
      this quarterly 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 small business issuer 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
            small business issuer, 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 small business issuer'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 small business
            issuer's internal control over financial reporting that occurred
            during the small business issuer's most recent fiscal quarter that
            has materially affected, or is reasonably likely to materially
            affect, the small business issuer'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 small business issuer's auditors and the audit committee
      of the small business issuer's board of directors:

            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 small business
            issuer'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 small business
            issuer's internal controls over financial reporting.


Date: October 10, 2007                 /s/ Christopher L. Coccio
                                       -------------------------
                                       Christopher L. Coccio
                                       Chief Executive Officer
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>6
<FILENAME>ex31-2.txt
<TEXT>
                                                                    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-QSB of Sono-Tek
      Corporation;

2.    Based on my knowledge, this quarterly report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this quarterly report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the small business issuer as of, and for the periods presented in
      this quarterly 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 small business issuer 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
            small business issuer, 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 small business issuer'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 small business
            issuer's internal control over financial reporting that occurred
            during the small business issuer's most recent fiscal quarter that
            has materially affected, or is reasonably likely to materially
            affect, the small business issuer'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 small business issuer's auditors and the audit committee
      of the small business issuer's board of directors:

            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 small business
            issuer'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 small business
            issuer's internal controls over financial reporting.


Date: October 10, 2007                       /s/ Stephen J. Bagley
                                             -----------------------
                                             Stephen J. Bagley
                                             Chief Financial Officer
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>7
<FILENAME>ex32-1.txt
<TEXT>

                                                                    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 10QSB for the period ended August 31, 2007 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"). I, Christopher L.
Coccio, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C.
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: October 10, 2007

/s/ Christopher L. Coccio
- -------------------------
Christopher L. Coccio
Chief Executive Officer

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>8
<FILENAME>ex32-2.txt
<TEXT>

                                                                    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 10QSB for the period ended August 31, 2007 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: October 10, 2007

/s/ Stephen J. Bagley
- ---------------------
Stephen J. Bagley
Chief Financial Officer
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
