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REVENUE RECOGNITION
 3 Months Ended
May 31, 2025
Revenue from Contract with Customer [Abstract]  
REVENUE RECOGNITION

NOTE 3: REVENUE RECOGNITION

 

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

 

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

 

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

 

The Company applies the practical expedient in paragraph ASC 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one-year or less.

 

At May 31, 2025, the Company had received approximately $2,290,000 in customer deposits, representing contract liabilities. As of May 31, 2025, $106,000 of the Company’s credit line was being utilized to collateralize letters of credit issued by the Company.

 

At February 28, 2025, the Company had received approximately $2,413,000 in customer deposits, representing contract liabilities, and had issued letters of credit in the amount of $106,000 to secure these cash deposits. During the three months ended May 31, 2025, the Company recognized $1,249,000 of these deposits as revenue.

 

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

 

    Three Months Ended May 31,  
    2025     % of total   2024     % of total
Fluxing Systems   $ 152,000     3%   $ 134,000     2%
Integrated Coating Systems     3,054,000     59%     747,000     15%
Multi-Axis Coating Systems     677,000     13%     2,664,000     53%
OEM Systems     130,000     3%     332,000     7%
Spare Parts, Services and Other     1,120,000     22%     1,154,000     23%
TOTAL   $ 5,133,000         $ 5,031,000