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Revenue Recognition

12 Months Ended

Feb. 28, 2021

NOTE 3: REVENUE RECOGNITION

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

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

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

The Company applies the practical expedient in paragraph ASC 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one-year or less. They apply the transition practical expedient in paragraph ASC 606-10-65-1(f)(3) and does not disclose the amount of the transaction price allocated to the remaining performance obligations and an explanation of when we expect to recognize that amount as revenue.

At February 28, 2021, the Company had received $1,167,000 in cash deposits, and had issued Letters of Credit in the amount of $849,000 to secure these cash deposits. At February 28, 2021, the Company was utilizing $849,000 of its available credit line to collateralize these letters of credit.

At February 29, 2020, the Company had received $1,649,000 in cash deposits for customer orders. During the year ended February 28, 2021 the Company recognized $1,567,000 of these deposits as revenue.

At February 28, 2019, the Company had received $1,150,000 in cash deposits for customer orders. During the year ended February 29, 2020 the Company recognized $1,108,000 of these deposits as revenue.

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

	Twelve Months Ended
	February 28,				February 29,
	2021		% of total		2020		% of total
Fluxing Systems	$	798,000		5%	$	906,000		6%
Integrated Coating Systems		4,219,000		28%		3,599,000		23%
Multi-Axis Coating Systems		5,614,000		38%		6,866,000		45%
OEM Systems		1,582,000		11%		1,384,000		9%
Other		2,620,000		18%		2,600,000		17%
TOTAL	$	14,833,000			$	15,355,000