Revenue Recognition	6 Months Ended
Aug. 31, 2020
Notes to Financial Statements
Revenue Recognition	NOTE 3: REVENUE RECOGNITION A majority of the Company’s sales revenue is derived from short term contracts with customers, which, on average, are in effect for less than twelve months. Sales revenue from manufactured equipment transferred at a single point in time accounts for a majority of the Company’s revenue. Sales revenue is recognized when control of the Company’s manufactured equipment is transferred to its customers, in an amount that reflects the consideration the Company expects to receive based upon the agreed transaction price. The Company’s performance obligations are satisfied when its customers take control of the purchased equipment, as defined by the contract terms. Based on prior experience, the Company reasonably estimates its warranty reserves. Sales are presented net of discounts and allowances. Discounts and allowances are determined when a sale is negotiated. The Company does not grant its customers or independent representatives, the ability to return equipment nor does it grant price adjustments after a sale is complete. The Company does not capitalize any sales commission costs related to the acquisition of a contract. All commissions related to a performance obligation that are satisfied at a point in time are expensed when the customer takes control of the purchased equipment. The Company receives cash deposits for customer orders based upon contract terms. Upon receipt, customer deposits are recorded as a short-term liability. Cash deposits received from customers may not always equal 100% of the contracted revenue for a given contract. In addition to cash deposits, the Company will accept irrevocable standby letters of credit from customers based upon contract terms. The Company also provides negotiated payment terms to its customers. At February 29, 2020, the Company had received $1,649,000 in cash deposits from customers. During the six months ended August 31, 2020, the Company applied 100% of these deposits against customer accounts receivable when the Company's performance obligations were met. At August 31, 2020, the Company had received $988,000 in cash deposits for customer orders and had issued Letters of Credit in the amount of $1,271,000 to secure some of these cash deposits. Subsequent to August 31, 2020, the Company received an additional $618,000 in cash deposits that is secured by the outstanding Letters of Credit.

Revenue Recognition

6 Months Ended

Aug. 31, 2020

NOTE 3: REVENUE RECOGNITION

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

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

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

The Company receives cash deposits for customer orders based upon contract terms. Upon receipt, customer deposits are recorded as a short-term liability. Cash deposits received from customers may not always equal 100% of the contracted revenue for a given contract. In addition to cash deposits, the Company will accept irrevocable standby letters of credit from customers based upon contract terms. The Company also provides negotiated payment terms to its customers. At February 29, 2020, the Company had received $1,649,000 in cash deposits from customers. During the six months ended August 31, 2020, the Company applied 100% of these deposits against customer accounts receivable when the Company's performance obligations were met.

At August 31, 2020, the Company had received $988,000 in cash deposits for customer orders and had issued Letters of Credit in the amount of $1,271,000 to secure some of these cash deposits. Subsequent to August 31, 2020, the Company received an additional $618,000 in cash deposits that is secured by the outstanding Letters of Credit.