What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-05-28 compared with 2024-05-23 · 430 added, 322 removed, 937 unchanged (45% of the section changed)

38 unchanged sentences

Adeniyi Lawal, Ph.D.

Mowbray, Ph.D.

Carol O’Donnell

1 unchanged sentence

Strasburg, CPA

Kirk Warshaw, CPA

*Member of the Audit Committee.

The Board of Directors is divided into two classes.

Our Board of Directors is divided into two classes.

The directors

1 unchanged sentence

The terms of the classes are staggered so that only one class of directors is elected at

each annual meeting of the Company.

The terms of Dr.

each annual meeting of our shareholders.

The terms of Mr.

Lawal and Ms.

O’Donnell run until the annual meeting

to be held in 2024, and in each case until their respective successors are duly elected and qualified.

O’Donnell run until the annual

meeting to be held in 2026, and in each case until their respective successors are duly elected and qualified.

The terms of Drs.

Coccio and Riemer and Messrs.

Strasburg and Harshbarger

run until the annual meeting to be held in 2025.

Harshbarger and Warshaw run until the annual meeting to be held in 2025, however, Mr.

Strasburg has notified us that he will not

stand for reelection and will resign effective upon the completion of our next annual meeting of shareholders in August 2025.

Audit Committee

The Company has a separate designated standing Audit Committee established

We have a separate designated standing Audit Committee established

and administered in accordance with SEC rules.

13 unchanged sentences

Compensation Committee of the Board of Directors.

The members of the Compensation Committee are Drs.

Mowbray and Riemer and Mr.

all of whom have been determined by the Board to be independent in accordance with NASDAQ’s requirement for independent director

oversight of executive officer compensation.

The members of the Compensation Committee are Carol O’Donnell (who serves as Chairperson

of the Compensation Committee), Dr.

Riemer and Mr.

Strasburg, whom have been determined by the Board to be independent in accordance with

NASDAQ’s requirement for independent director oversight of executive officer compensation.

Nominating Committee

1 unchanged sentence

may recommend nominees to the Board of Directors.

Family Relationships

There are no family relationships between any of our directors and officers.

Identification of Executive Officers

2 unchanged sentences

Christopher C.

Vice President – Sales and Application Engineering

Chief Operating Officer

Christopher L.

5 unchanged sentences

The foregoing officers are appointed for terms of one year or until

their successors are duly elected and qualified or until terminated by action of the Board of Directors.

their successors are duly appointed and qualified or until terminated by action of the Board of Directors.

There are no arrangements or

6 unchanged sentences

positions as Controller, Chief Financial Officer and Vice President of Finance for companies with up to $45,000,000 in revenues.

earned a Bachelor of Science degree from The State University of NY at Oneonta and an MBA from Marist College.

He was licensed as a CPA

earned a Bachelor of Science degree from The State University of NY at Oneonta and an MBA from Marist University.

He was licensed as a

Bagley served on the OTCQX US Advisory Council from 2019 to 2020.

2 unchanged sentences

CHRISTOPHER C.

CICHETTI was appointed Vice President – Sales

and Application Engineering of the Company in August 2022.

Cichetti joined Sono-Tek in 2005 as an Electrical Engineer and has served

as Application Engineer, Senior Application Engineer, Application Engineering Manager, and Vice President of Application Engineering.

Cichetti has experience in lab testing, process development, project management, and has successfully implemented several successful

OEM relationships with outside vendors.

He is a graduate of Worcester Polytechnic Institute with a major in Computer and Electrical Engineering

and a minor in International Studies.

CICHETTI was appointed Chief Operating Officer in March

From August 2022 until March 2025, Mr.

Cichetti served as Vice President – Sales and Application Engineering of the Company.

Cichetti joined Sono-Tek in 2005 as an Electrical Engineer and has served as Application Engineer, Senior Application Engineer, Application

Engineering Manager, and Vice President of Application Engineering.

Cichetti has experience in lab testing, process development, project

management, and has successfully implemented several successful OEM relationships with outside vendors.

He is a graduate of Worcester

Polytechnic Institute with a major in Computer and Electrical Engineering and a minor in International Studies.

CHRISTOPHER L.

19 unchanged sentences

Key attributes, Experience and Skills:

Coccio brings his strategic vision for our Company to the Board together with his leadership, business experience and investor

relations skills.

Coccio brings

his strategic vision for our Company to the Board together with his leadership, business experience and investor relations skills.

Coccio has an immense knowledge of our Company and its related applications which is beneficial to the Board.

Coccio’s service as Executive Chairman bridges a critical gap between the Company’s management and the Board, enabling the

Board to benefit from management’s perspective on the Company’s business while the Board performs its oversight function.

STEPHEN HARSHBARGER has

been Chief Executive Officer and President of the Company since January 2024 and a Director since 2013.

Coccio’s service

as Executive Chairman bridges a critical gap between the Company’s management and the Board, enabling the Board to benefit from

management’s perspective on the Company’s business while the Board performs its oversight function.

STEPHEN HARSHBARGER has been Chief

Executive Officer and President of the Company since January 2024 and a Director since 2013.

Harshbarger originally joined

Sono-Tek in 1993 and became President in 2012.

Before becoming Chief Executive Officer and

President, Mr.

Harshbarger honed his expertise through various pivotal roles within Sono-Tek, including Sales Engineer, Worldwide Sales

and Marketing Manager, Vice President & Director of Electronics and Advanced Energy (E&AE), and Executive Vice President.

his stewardship, the sales organization flourished, with a global distribution network spanning over 40 countries and boasting a revenue

surge of over 300%.

Harshbarger is a recognized authority in

ultrasonic coating equipment, particularly within the electronics, medical device, and advanced energy sectors.

Prior to his tenure at

Sono-Tek, he played a pivotal role as the Sales and Marketing Manager for Plasmaco Inc., a pioneer in the development of Flat Panel Displays,

where he spearheaded the establishment of their distribution network, participated in venture capital funding, and introduced the first

flat panels to the Wall Street trading floors.

Harshbarger graduated from Bentley University,

with a major in Finance and a minor in Marketing.

Before becoming Chief Executive Officer and President, Mr.

honed his expertise through various pivotal roles within Sono-Tek, including Sales Engineer, Worldwide Sales and Marketing Manager, Vice

President & Director of Electronics and Advanced Energy (E&AE), and Executive Vice President.

Under his stewardship, the sales

organization flourished, with a global distribution network spanning over 40 countries and boasting a revenue surge of over 300%.

Harshbarger is a recognized authority in ultrasonic coating equipment,

particularly within the electronics, medical device, and advanced energy sectors.

Prior to his tenure at Sono-Tek, he played a pivotal

role as the Sales and Marketing Manager for Plasmaco Inc., a pioneer in the development of Flat Panel Displays, where he spearheaded the

establishment of their distribution network, participated in venture capital funding, and introduced the first flat panels to the Wall

Street trading floors.

Harshbarger graduated from Bentley University, with a major in Finance and a minor in Marketing.

Key attributes Experience and Skills:

25 unchanged sentences

Key attributes, Experience and Skills:

Haskell’s training and extensive experience in financial management at both public and private companies provide the Board with

valuable insights.

Haskell’s significant experience in acquisitions and divestitures and investor relations bring strategic

judgment and experience to the Board.

Haskell’s strong operational and business background complement his accounting and finance

experience and are valuable resources to the Board as it exercises its oversight duties and support of the Company’s growth strategies.

training and extensive experience in financial management at both public and private companies provide the Board with valuable insights.

Haskell’s significant experience in acquisitions and divestitures and investor relations bring strategic judgment and experience

to the Board.

Haskell’s strong operational and business background complement his accounting and finance experience and are

valuable resources to the Board as it exercises its oversight duties and support of the Company’s growth strategies.

KUHA joined Sono-Tek in 2007.

Kuha was appointed VP, Manufacturing Operations, Procurement & Logistics in September 2022.

Prior to assuming her present position,

Kuha served as Operations Director, Purchasing Manager, and several other positions within the procurement aspects of Sono-Tek;

extensive expertise in several vital areas of Sono-Tek operations.

Kuha was appointed VP,

Manufacturing Operations, Procurement & Logistics in September 2022.

Prior to assuming her present position, Mrs.

Kuha served as Operations

Director, Purchasing Manager, and several other positions within the procurement aspects of Sono-Tek;

providing extensive expertise in

several vital areas of Sono-Tek operations.

Prior to joining Sono-Tek, Mrs.

Kuha held various

positions in high tech manufacturing companies revolving around purchasing and operations.

She holds an AAS in business from Dutchess

County Community College.

Kuha held various positions in high

tech manufacturing companies revolving around purchasing and operations.

She holds an AAS in business from Dutchess County Community College.

ADENIYI LAWAL became a Director in April 2024.

21 unchanged sentences

Key Attributes, Experience, and Skills:

Lawal’s core expertise is in catalysis, reaction engineering and process intensification with specific application to renewable

His extensive research experience and knowledge of the renewable energy landscape bring valuable insights to the Board on emerging

local and global business opportunities in green energy.

His administrative and leadership experience that has spanned decades is also

of value to the Board.

MOWBRAY has been a Director since August 2003.

been an independent consultant since August 1997.

From September 1992 to August 1997, he was the Manager of the General Electric Company’s

Corporate Research and Development Mechanical Engineering Laboratory.

From 1962 to 1992 he worked for the General Electric Company in

a variety of engineering and managerial positions.

Mowbray received a B.S.

in Aeronautical Engineering from the University of Minnesota

in 1960, a Master of Science in Engineering Mechanics from the University of Minnesota in 1962 and a Ph.D.

from Rensselaer Polytechnic

Institute in Engineering Mechanics in 1968.

Key attributes, Experience and Skills:

Mowbray’s extensive research and managerial experience enables him to bring valuable insights to the Board.

His knowledge of

the Company’s products and the materials sciences technology underlying them has enabled him to contribute to the Company’s

advanced products development and designs.

Mowbray also brings leadership and oversight experience to the Board from his General Electric

management background.

core expertise is in catalysis, reaction engineering and process intensification with specific application to renewable energy.

His extensive

research experience and knowledge of the renewable energy landscape bring valuable insights to the Board on emerging local and global

business opportunities in green energy.

His administrative and leadership experience that has spanned decades is also of value to the

CAROL O’DONNELL has been a Director since November 2018.

1 unchanged sentence

fund managers in 2016 and has served as Chief Executive Officer since 2018.

She also provides consulting services to OpenDeal, Inc., a

financial services company.

Prior to joining Protégé Partners, Ms.

was the Director of Legal and Compliance with DARA Capital US, Inc., a Swiss-owned boutique registered investment advisory and wealth

management firm from 2013 to 2016.

She also served as General Counsel to Boothbay Fund Management LLC, a registered investment adviser,

from December 2019 through May 2021, and was General Counsel and Chief Compliance Officer of each of the Permal Group and Framework Investment

Group from 2004 through 2011 and from 2002 to 2004, respectively.

O’Donnell is admitted to practice law in the States

of New York and Connecticut.

O’Donnell was the Director of Legal and Compliance

with DARA Capital US, Inc., a Swiss-owned boutique registered investment advisory and wealth management firm from 2013 to 2016.

served as General Counsel to Boothbay Fund Management LLC, a registered investment adviser, from December 2019 through May 2021, and was

General Counsel and Chief Compliance Officer of each of the Permal Group and Framework Investment Group from 2004 through 2011 and from

2002 to 2004, respectively.

O’Donnell is a director of Apimeds Pharmaceuticals, Inc., a New York Stock Exchange listed

company (NYSE:

APUS), and a trustee of various family trusts.

O’Donnell is admitted to practice law in the States of New York

and Connecticut.

Key attributes, Experience and Skills:

O’Donnell’s extensive experience as an attorney enables her to bring valuable strategic insights to the Board in the areas

of corporate governance, finance and securities law.

extensive experience as an attorney enables her to bring valuable strategic insights to the Board in the areas of corporate governance,

finance and securities law.

O’Donnell also brings leadership and oversight experience to the Board.

14 unchanged sentences

Key attributes, Experience and Skills:

Riemer’s extensive research and management experience enables him to bring valuable insights to the Board.

His considerable

experience in the biotech, food and pharmaceutical industries bring specific product application insights to the Board.

previous service as Vice President of Food Business Development helps to provide focus to the Board on this important marketing area.

Riemer also brings leadership and oversight experience to the Board.

extensive research and management experience enables him to bring valuable insights to the Board.

His considerable experience in the biotech,

food and pharmaceutical industries bring specific product application insights to the Board.

Riemer’s previous service as Vice

President of Food Business Development helps to provide focus to the Board on this important marketing area.

Riemer also brings leadership

and oversight experience to the Board.

PHILIP STRASBURG, CPA, has been a Director since August 2004.

8 unchanged sentences

Key attributes, Experience and Skills:

Strasburg’s training and extensive experience in auditing provide the Board with valuable insights and skills necessary to lead

the Audit Committee.

Strasburg’s strong operational and business background complement his accounting and finance experience,

and are valuable resources to the Board as it exercises its oversight duties and support of the Company’s growth strategies.

Section 16(a) Beneficial

Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires the

Company's Directors, executive officers and persons who own more than ten percent of the Company's common stock to file with the Securities

and Exchange Commission initial reports of beneficial ownership and reports of changes of beneficial ownership of common stock.

are also required by Securities and Exchange Commission regulations to furnish the Company with copies of all such reports.

on a review of such filings, during the year ended February 29, 2024, all of the Company's Directors and executive officers and holders

of more than ten percent of the Company’s stock have made timely filings of such reports.

Strasburg's training and extensive experience in auditing provide the Board with valuable insights and skills.

Strasburg's strong operational and business background complement his accounting and finance experience, and are valuable resources to the Board as it exercises its oversight duties and support of the Company's growth strategies.

KIRK WARSHAW, CPA, has been a director since May 2025.

40 years of experience in financial and general management across a diverse range of industries.

Since 2015, he has served as the Executive

Chairman of Bogue Machine Company, a state-of-the-art machining operation that produces complex components for both commercial and defense

contractors, and as Chief Executive Officer and Chief Financial Officer of UAV Turbines, a company focused on developing small turbine

engine systems for aerospace and military applications.

Warshaw has also provided advisory services and held interim executive leadership

roles at numerous companies, specializing in financial oversight, corporate restructuring, and strategic growth.

Earlier in his career,

Warshaw worked in public accounting and financial institutions, earning his CPA in 1982.

Key attributes, Experience and Skills:

extensive experience in financial and operational management at both public and private companies provides the Board with valuable insights.

Warshaw’s significant experience in acquisitions and divestitures and strong operational, accounting, and finance background

are valuable resources to the Board as it exercises its oversight duties and support of the Company’s growth strategies.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires our

Directors, executive officers and persons who own more than ten percent of our common stock to file with the Securities and Exchange Commission

initial reports of beneficial ownership and reports of changes of beneficial ownership of common stock.

Such persons are also required

by Securities and Exchange Commission regulations to furnish us with copies of all such reports.

Based solely on a review of such filings,

during the year ended February 28, 2025, all of our Directors and executive officers and holders of more than ten percent of our stock

have made timely filings of such reports.

Code of Ethics

8 unchanged sentences

posting such information on the Company’s website.

Insider Trading Policy

We have adopted an Insider Trading Policy governing the purchase,

sale and/or other dispositions of our securities by directors, officers and employees, and by the Company itself, that are reasonably

designed to promote compliance with insider trading laws, rules and regulations, and any listing standards applicable to us.

the policy is filed as Exhibit 19 to this Annual Report on Form 10-K.

EXECUTIVE COMPENSATION

3 unchanged sentences

Principal Position

Option Awards 1

All Other Compensation 2

Christopher L.

CEO, Executive Chairman

CEO, Executive Chairman and Director

Stephen Harshbarger 4

2 unchanged sentences

Christopher C.

Vice President – Sales Applications

All Other Compensation represents Company contributions to the Company’s

Option awards in the above table are calculated using the Black-Scholes

options pricing model which is further discussed in Note 4 – Stock Based Compensation, in the Company’s consolidated financial

Coccio stepped down as CEO on January 1, 2024 and

became Executive Chairman.

Harshbarger became CEO on January 1, 2024.

Chief Operating Officer

1 Option awards in the above table are calculated using the Black-Scholes options pricing model which is

further discussed in Note 4 – Stock Based Compensation, in the Company’s consolidated financial statements.

2 All Other Compensation represents Company contributions to the Company’s 401K plan.

Coccio stepped down as CEO (Principal Executive Officer) on January 1, 2024 and became Executive Chairman.

Coccio was not a “named executive officer” for purposes of this Table in fiscal 2025.

Harshbarger became CEO (Principal Executive Officer) on January 1, 2024.

Officer Compensation Arrangements

During fiscal 2024, Dr.

Coccio was compensated at the rate of $200,000

per annum, until January 2024, at which time his annual base compensation decreased to $160,000.

During fiscal 2025, Mr.

Harshbarger was compensated at the rate of

$250,000 per annum, until January 2024, at which time his annual base compensation increased to $265,000.

$265,000 per annum.

During fiscal 2025, Mr.

Bagley was compensated at the rate of $185,000

per annum, until January 2024, at which time his annual base compensation increased to $185,000.

During fiscal 2025, Mr.

Cichetti was compensated at the rate of $200,000

per annum, until August 2023, at which time his annual base compensation increased to $185,000 per annum and increased to $200,000 per

annum in January 2024.

In addition, each named officer earned bonus compensation based on

9 unchanged sentences

Expiration Date

Christopher L.

CEO, Executive Chairman and Director

Stephen Harshbarger

2 unchanged sentences

Christopher C.

Vice President – Sales Applications

Coccio stepped down as CEO on January 1, 2024 and became Executive Chairman.

Harshbarger became CEO on January 1, 2024.

Chief Operating Officer

Estimated Payments and Benefits Upon Termination or Change in Control

On September 1, 2007, the Company entered into identical Executive

Agreements with Stephen J.

The Company has entered into Executive Agreements with Stephen J.

Bagley, the Company’s Chief Financial Officer and Christopher L.

Coccio, the Company’s Executive

The Company also entered into an Executive Agreement with R.

Stephen Harshbarger, the Company’s Chief Executive Officer

and President, on March 5, 2008.

The agreements, as subsequently amended, provide that in the event of a change of control of the Company

followed by a termination of the executives’ employment under certain circumstances, the officers shall receive severance payments

equal to two years of the executive’s annual base, commissions and bonus compensation paid by the Company for the previous calendar

Coccio, the Company’s Executive Chairman.

The Company also

entered into an Executive Agreement with R.

Stephen Harshbarger, the Company’s Chief Executive Officer and President.

The agreements,

as amended, provide that in the event of a change of control of the Company followed by a termination of the executives’ employment

under certain circumstances, the officers shall receive severance payments equal to two years of the executive’s annual base, commissions

and bonus compensation paid by the Company for the previous calendar year.

Based on last year’s salary arrangements, if the rights of the

4 unchanged sentences

Severance Agreements

On October 20, 2017, the Company entered into identical Executive

Agreements with Stephen J.

Bagley, Chief Financial Officer, Christopher L.

The Company has entered into severance agreements with Stephen J.

Bagley, Chief Financial Officer, Christopher Cichetti, Chief Operating Officer, Christopher L.

Coccio, Executive Chairman and R.

Stephen Harshbarger Chief

Executive Officer and President.

The agreements provide that in the event of termination of the executive’s employment, other than

for the cause, the officers shall receive severance payments equal to two weeks of compensation for each full year employed by the Company.

Harshbarger Chief Executive Officer and President.

The agreements provide that in the event of termination of the executive’s employment,

other than for the cause, the officers shall receive severance payments equal to two weeks of compensation for each full year employed

by the Company.

Clawback Policy

On November 16, 2023, our

Board adopted an executive compensation recoupment policy consistent with the requirements of the Exchange Act Rule 10D-1 and the Nasdaq

listing standards thereunder, to help ensure that incentive compensation is paid based on accurate financial and operating data, and the

correct calculation of performance against incentive targets.

Our policy addresses recoupment of amounts from performance-based awards

paid to all corporate officers, including awards under our equity incentive plans, in the event of a financial restatement to the extent

that the payout for such awards would have been less, or in the event of fraud, or intentional, willful or gross misconduct that contributed

to the need for a financial restatement.

Our Board has adopted an

executive compensation recoupment policy consistent with the requirements of the Exchange Act Rule 10D-1 and the Nasdaq listing standards

thereunder, to help ensure that incentive compensation is paid based on accurate financial and operating data, and the correct calculation

of performance against incentive targets.

Our policy addresses recoupment of amounts from performance-based awards paid to all corporate

officers, including awards under our equity incentive plans, in the event of a financial restatement to the extent that the payout for

such awards would have been less, or in the event of fraud, or intentional, willful or gross misconduct that contributed to the need for

a financial restatement.

Compensation of Directors

5 unchanged sentences

Incentive Plan

Christopher Coccio

Adeniyi Lawal

Carol O’Donnell

1 unchanged sentence

Joseph Riemer

During fiscal 2025, Dr.

Coccio received a grant of 22,222 options exercisable at $4.12 per share.

At the end of fiscal 2025, Dr.

Coccio held an aggregate of 70,504 stock options.

Represents salary of $160,000 and bonus of $43,000 paid to Dr.

Coccio during fiscal 2025 in connection with his service as Executive Chairman and a Company contribution of $7,400 to the Company’s 401k plan.

During fiscal 2025, Mr.

3 unchanged sentences

During fiscal 2025, Dr.

Mowbray received a grant of 3,676 options exercisable at $4.79 per share.

Lawal received a grant of 5,333 options exercisable at $4.12 per share.

At the end of fiscal 2025, Dr.

Mowbray held an aggregate of 6,700 stock options.

Lawal held an aggregate of 5,333 stock options.

During fiscal 2025, Ms.

25 unchanged sentences

*Eric Haskell

*Adeniyi Lawal

*Carol O’Donnell

*Joseph Riemer

*Adeniyi Lawal

*Kirk Warshaw

All Executive Officers and Directors as a Group

4 unchanged sentences

Adah Nicklin 12

Dawn Cupero 13

The above ownership percentages are based on 15,727,702 shares outstanding as of May 23,

1 unchanged sentence

** Less than 1%

1 Includes 11,479 options currently exercisable issued under the Company’s

Stock Incentive Plans.

2 Includes 11,479 options currently exercisable issued under the Company’s

Stock Incentive Plans.

1 Includes 15,177 options currently exercisable issued under the Company’s Stock Incentive Plans.

2 Includes 17,972 options currently exercisable issued under the Company’s Stock Incentive Plans.

3 Includes 4,000 shares held in the name of Dr.

Coccio’s wife and 39,359

options currently exercisable issued under the Company’s Stock Incentive Plans.

4 Includes 19,496 options currently exercisable issued under the Company’s

Stock Incentive Plans.

5 Includes 16,326 options currently exercisable issued under the Company’s

Stock Incentive Plans.

6 Includes 6,326 options currently exercisable issued under the Company’s

Stock Incentive Plans.

7 Includes 8,326 options currently exercisable issued under the Company’s

Coccio’s wife and 44,476 options currently exercisable issued under the Company’s

Stock Incentive Plans.

4 Includes 27,401 options currently exercisable issued under the Company’s Stock Incentive Plans.

5 Includes 20,344 options currently exercisable issued under the Company’s Stock Incentive Plans.

6 Includes 10,344 options currently exercisable issued under the Company’s Stock Incentive Plans.

7 Includes 12,344 options currently exercisable issued under the Company’s Stock Incentive Plans.

8 Includes 10,000 shares in the name of Mr.

Strasburg’s wife and 3,603

options currently exercisable issued under the Company’s Stock Incentive Plans.

9 The group total includes 118,930 options currently exercisable issued under

the Company’s Stock Incentive Plans.

The group total does not include 72,526 options that are currently unexercisable.

total includes 600 shares and 2,536 currently exercisable options held by Maria Kuha, a Vice President.

10 Emancipation Management LLC, Charles Frumberg and Circle N Advisors share

the power to dispose or to direct the disposition of these shares.

The Company does not consider these holders to be “affiliates”

of the Company.

11 The address of this person is 299 Park Avenue, New York, NY 10171.

12 The address of this person is 1065 Main Street, Suite F, PO Box 336, Fishkill,

Strasburg’s wife and 7,621 options currently exercisable issued under the Company’s

Stock Incentive Plans.

9 The group total includes 159,953 options currently exercisable issued under the Company’s Stock Incentive Plans.

total does not include 152,431 options that are currently unexercisable.

The group total includes 683 shares and 4,274 currently exercisable

options held by Maria Kuha, a Vice President.

10 Emancipation Management LLC, Charles Frumberg and Circle N Advisors share the power to dispose or to direct the disposition of

these shares.

The Company does not consider these holders to be “affiliates” of the Company.

11 The address of this person is 1065 Main Street, Suite F, PO Box 336, Fishkill, NY 12524.

12 The address of this person is 3 Rivers Edge, Newburgh, NY 12550.

14 The address of this person is 3697 Se Doubleton Drive, Stuart, FL 34997.

13 The address of this person is 308 Schubauer Dr, Cary, NC 27513.

Securities Authorized for Issuance Under Equity Compensation Plans:

12 unchanged sentences

reflected in column (a))

Equity compensation plans approved by security holders:

Equity compensation plans

approved by security holders:

Stock Incentive Plan

9 unchanged sentences

As of February 28, 2025, there were 210,770 options outstanding under the 2013 Plan.

2023 Stock Incentive

2023 Stock Incentive Plan

In May 2023, to replace the expiring 2013 Plan, the Company’s

10 unchanged sentences

at a stipulated period of time after an employee's termination of employment.

We do not grant stock option awards in anticipation of the release of material, nonpublic

information or time the release of material, nonpublic information based on equity award grant dates, vesting events, or sale events.

For all stock option awards, the exercise price is the closing price of our common stock on the NASDAQ capital market on the date option

awards are issued.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

4 unchanged sentences

The Company’s

“independent directors” are Donald Mowbray, Eric Haskell, Carol O’Donnell, Philip Strasburg, Joseph Riemer and Adeniyi

“independent directors” are Eric Haskell, Carol O’Donnell, Philip Strasburg, Joseph Riemer, Adeniyi Lawal and Kirk Warshaw.

Christopher L.

3 unchanged sentences

For fiscal 2025 and 2024 the Company paid or accrued fees of approximately

$171,000 and $146,000, respectively, for services rendered by Marcum LLP, its independent auditors.

These fees included audit and review

$185,000 and $171,000, respectively, for services rendered by CBIZ CPAs and Marcum LLP, its independent auditors.

These fees included

audit and review services.

Audit Related Fees - None

10 unchanged sentences

By-laws of the Company as amended.

Description of Securities

Executive Agreement between Sono-Tek Corporation and Stephen J.

32 unchanged sentences

Security Agreement between Sono-Tek Corporation and M&T Bank dated January 17, 2019.

Letter Agreement between Sono-Tek Corporation and Christopher Cichetti dated October 20, 2017.

Insider Trading Policies and Procedures

Code of Ethics.

Subsidiaries of Issuer.

Consent of Marcum LLP

Consent of CBIZ CPAs P.C.

Consent Marcum LLP

Rule 13a-14/15d – 14(a) Certification .

4 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Policy Relating to Recovery of Erroneously Awarded Compensation.

XBRL Instance Document — This instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

8 unchanged sentences

Incorporated herein by reference to the Company’s Current Report on Form 8-K dated March 7, 2019 and filed with the Securities and Exchange Commission on March 13, 2019.

Incorporated herein by reference to the Company’s Registration Statement on Form 8-A12B filed with the Securities and Exchange Commission on August 26, 2021.

Incorporated herein by reference to the Company’s Form 10-QSB for the quarter ended August 31, 2007.

8 unchanged sentences

Incorporated herein by reference to the Company’s Form 10-K for the year ended February 28, 2019.

Incorporated herein by reference to the Company’s Current Report on Form 8-K dated September 24, 2020 and filed with the Securities and Exchange Commission on September 17, 2020.

Filed herewith.

Incorporated herein by reference to the Company’s Current Report on Form 8-K dated September 24, 2020 and filed with the Securities and Exchange Commission on September 17, 2020.

Incorporated herein by reference to the Company’s Current Report on Form 8-K dated November 16, 2023 and filed with the Securities and Exchange Commission on November 17, 2023.

SONO-TEK CORPORATION

1 unchanged sentence

FOR THE YEARS ENDED FEBRUARY 28, 2025 and February 29, 2024

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS

CBIZ CPAs P.C.

(PCAOB ID No:

MARCUM LLP (PCAOB ID No:

7 unchanged sentences

For the Years Ended February 28, 2025 and February 29, 2024

Notes to Consolidated Financial Statements

Notes on Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Sono-Tek Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated

balance sheet of Sono-Tek Corporation (the “Company”) as of February 28, 2025, the related consolidated statements of income,

stockholders’ equity and cash flows for the year ended February 28, 2025, and the related notes (collectively referred to as the

“financial statements”).

In our opinion, based on our audit, the financial statements present fairly, in all material respects,

the financial position of the Company as of February 28, 2025 and the results of its operations and its cash flows for the year ended

February 28, 2025 in conformity with accounting principles generally accepted in the United States of America.

Retrospective Application of a Change in

Accounting Principle

We also have audited the adjustments to

the 2024 financial statements to retrospectively apply the change in accounting principle due to the adoption of Accounting

Standards Update 2023-07, Segment Reporting, as described in Note 2.

In our opinion, such adjustments are appropriate and have

been properly applied.

We were not engaged to audit, review, or apply any procedures to the 2024 financial statements of the Company

other than with respect to the adjustments and, accordingly, we do not express an opinion or any form of assurance on the 2024

financial statements taken as a whole.

Basis for Opinion

These financial statements are the responsibility

of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audit.

are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are

required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and

regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged

to perform, an audit of its internal control over financial reporting.

As part of our audit we are required to obtain an understanding

of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal

control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to

assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that

respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as

evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising

from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,

subjective, or complex judgments.

We determined that there are no critical audit matters.

/s/ CBIZ CPAs P.C.

CBIZ CPAs P.C.

We have served as the Company’s auditor

since 2020 (such date takes into account the acquisition of certain assets of Marcum LLP by CBIZ CPAs P.C.

effective November 1, 2024).

Morristown, New Jersey

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of

1 unchanged sentence

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Sono-Tek

Corporation (the “Company”) as of February 29, 2024 and February 28, 2023, the related consolidated statements of income,

stockholders’ equity and cash flows for each of the two years in the period ended February 29, 2024, and the related notes (collectively

referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects,

the financial position of the Company as of February 29, 2024 and February 28, 2023, and the results of its operations and its cash flows

for each of the two years in the period ended February 29, 2024, in conformity with accounting principles generally accepted in the United

States of America.

We have audited, before the effects of the adjustments to

retrospectively apply the change in accounting described in Note 2, the consolidated balance sheet of Sono-Tek Corporation (the

“Company”) as of February 29, 2024, the related consolidated statements of income, changes in stockholders’ equity

and cash flows for the year ended February 29, 2024, and the related notes (the 2024 financial statements before the effects of the

adjustments discussed in Note 2 are not presented herein).

In our opinion, the February 29, 2024 financial statements, before the

effects of the adjustments to respectively apply the change in accounting described in Note 2, present fairly, in all material

respects, the financial position of the Company as of February 29, 2024, and the results of its operations and its cash flows for

year ended February 29, 2024, in conformity with accounting principles generally accepted in the United States of America.

We were not engaged to audit, review, or apply any procedures to

the adjustments to retrospectively apply the change in accounting principle described in Note 2 and accordingly, we do not express

an opinion or any form of assurance about whether such adjustments are appropriate and have been properly applied.

The adjustments

were audited by CBIZ CPAs P.C.

Basis for Opinion

These financial statements are the responsibility of the Company's

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

Our responsibility is to express an opinion on the Company's financial statements based on our audit.

We are a public accounting

3 unchanged sentences

and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are

free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an

audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free

of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit

of its internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control

over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over

1 unchanged sentence

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material

Our audit included performing procedures to assess the risks of material

misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

1 unchanged sentence

included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included

Our audit also included

evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation

of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period

audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to

accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex

We determined that there are no critical audit matters.

We believe that our audit provides a reasonable basis for our opinion.

/s/ Marcum llp

We have served as the Company’s auditor since 2020.

East Hanover, NJ

We have served as the Company’s auditor from 2020 to 2025.

Morristown, New Jersey

SONO-TEK CORPORATION

3 unchanged sentences

Marketable securities

Accounts receivable (less allowance of $ 12,225 )

Accounts receivable (less allowance for credit losses of $ 12,225 , respectively)

Prepaid expenses and other current assets

14 unchanged sentences

Stockholders’ Equity

Common stock, $ .01

shares authorized, 15,750,880

and 15,742,073

issued and outstanding as of February 29, 2024, and February 28, 2023, respectively

Common stock, $ .01 par value;

25,000,000 shares authorized, 15,751,153 issued and 15,749,037 outstanding as of February 28, 2025, and 15,750,880 issued and outstanding as of February 29, 2024

Additional paid-in capital

Accumulated earnings

Treasury stock, at cost, 2,116 shares

Total stockholders’ equity

11 unchanged sentences

Operating Income

Other Income (Expense):

Other Income:

Interest and dividend income

Net unrealized gain/(loss) on marketable securities

Net unrealized gain on marketable securities

Income before Income Taxes

9 unchanged sentences

Par Value $.01

Treasury Stock

Total Stockholders’

5 unchanged sentences

Cashless exercise of stock options

Treasury stock purchased

Balance - February 28, 2025

7 unchanged sentences

Stock-based compensation expense

Accounts receivable reserve

Inventory reserve

Unrealized (gain) loss on marketable securities

Deferred tax asset, net

Unrealized gain on marketable securities

Deferred income tax benefit, net

(Increase) Decrease in:

6 unchanged sentences

Customer deposits

( 1,006,511 )

Income taxes payable

6 unchanged sentences

( 21,826,042 )

Net Cash Used In Investing Activities

( 2,383,681 )

( 2,810,996 )

NET (DECREASE) IN CASH AND CASH EQUIVALENTS

Net Cash Provided by (Used in) Investing Activities

( 2,383,681 )

CASH FLOWS FROM FINANCING ACTIVITIES

Purchase of treasury stock

Net Cash (Used in) Financing Activities

NET INCREASE/DECREASE IN CASH AND CASH EQUIVALENTS

( 1,219,815 )

19 unchanged sentences

cost of advertising in the period in which the advertising takes place.

Advertising expense for fiscal 2024 and fiscal 2023 was $ 371,000

Advertising expenses for fiscal 2025 and fiscal 2024 were $ 438,000

and $ 371,000 , respectively.

79 unchanged sentences

2025 and February 29, 2024, there were no uncertain tax positions.

Assets - Include costs of patent applications which are deferred and charged to operations over seventeen 17

years for domestic patents and twelve 12

years for foreign patents, which is considered the useful life.

Amortization expense for

the years ended February 29, 2024 and February 28, 2023 was $ 16,434 and $ 18,814 , respectively.

The accumulated amortization

of patents is $ 212,861 and $ 202,681

at February 29, 2024 and February 28, 2023, respectively.

Annual amortization expense of such intangible assets is expected to

be approximately $ 16,000 per

year for the next five years.

Intangible Assets - Include costs of patent applications

which are deferred and charged to operations over seventeen 17 years for domestic patents and twelve 12 years for foreign patents, which

is considered the useful life.

Amortization expense for the years ended February 28, 2025 and February 29, 2024 was $ 10,180 and $ 16,434 ,

respectively.

The accumulated amortization of patents is $ 223,041 and $ 212,861 at February 28, 2025 and February 29, 2024, respectively.

The annual amortization expense of such intangible assets is expected to be approximately $ 10,000 per year for the next four years.

Inventories - Inventories are stated at the lower

26 unchanged sentences

Actual results could differ from those estimates.

New Accounting Pronouncements – In June 2016,

the FASB issued ASU 2016-13 - Financial Instruments-Credit Losses-Measurement of Credit Losses on Financial Instruments.

Improvements to Topic 326, Financial Instruments – Credit Losses, have been released in November 2018 (2018-19), November 2019 (2019-10

and 2019-11) and a January 2020 Update (2020-02) that provided additional guidance on this Topic.

This guidance replaces the current incurred

loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable

and supportable information to inform credit loss estimates.

For SEC filers meeting certain criteria, the amendments in this ASU are effective

for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.

For SEC filers that meet the criteria

of a smaller reporting company (including this Company) and for non-SEC registrant public companies and other organizations, the amendments

in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022.

Early adoption

will be permitted for all organizations for fiscal years, and interim periods within those fiscal years, beginning after December 15,

The Company has adopted ASU 2016-13 as updated and the adoption of this guidance did not have a material impact on the Company’s

consolidated financial statements.

Recent Accounting Pronouncements Not Yet Adopted -

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures.

This ASU requires greater disaggregation

of information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid.

applies to all entities subject to income taxes and is intended to help investors better understand an entity’s exposure to potential

changes in jurisdictional tax legislation and assess income tax information that affects cash flow forecasts and capital allocation decisions.

New Accounting Pronouncements – In November 2023,

the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

The amendments in this

ASU require disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating

officer decision maker (“CODM”), as well as the aggregate amount of other segment items included in the reported measure of

segment profit or loss.

The ASU requires that a public entity disclose the title and position of the CODM and an explanation of how the

CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.

entities are required to provide all annual disclosures currently required by Topic 280 in interim periods, and entities with a single

reportable segment are required to provide all the disclosures required by the amendments in this ASU and existing segment disclosures

in Topic 280.

This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning

after December 15, 2024, with early adoption permitted.

The amendments in this ASU should be applied retrospectively to all prior periods

presented in the financial statements.

The Company has adopted this ASU, and the standard did not have a material impact on the Company’s

consolidated financial statements and related disclosures.

Segment Data, for the Company’s segment disclosure.

Recent Accounting Pronouncements Not Yet Adopted - In

December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures.

This ASU requires greater disaggregation of

information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid.

This ASU applies

to all entities subject to income taxes and is intended to help investors better understand an entity’s exposure to potential changes

in jurisdictional tax legislation and assess income tax information that affects cash flow forecasts and capital allocation decisions.

This ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

3 unchanged sentences

this ASU will have on its consolidated financial statements and related disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

to Reportable Segment Disclosures.

The amendments in this ASU require disclosures, on an annual and interim basis, of significant segment

expenses that are regularly provided to the chief operating officer decision maker (“CODM”), as well as the aggregate amount

of other segment items included in the reported measure of segment profit or loss.

The ASU requires that a public entity disclose the

title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing

segment performance and deciding how to allocate resources.

Public entities will be required to provide all annual disclosures currently

required by Topic 280 in interim periods, and entities with a single reportable segment are required to provide all the disclosures required

by the amendments in this ASU and existing segment disclosures in Topic 280.

This ASU is effective for fiscal years beginning after December

15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The amendments in

this ASU should be applied retrospectively to all prior periods presented in the financial statements.

The Company is currently evaluating

the impact of this standard on its consolidated financial statements and related disclosures, and does not expect the standard will have

a material impact on the Company’s consolidated financial statements and related disclosures.

In November 2024, the FASB issued issued ASU 2024-03 – Income

Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income

Statement Expenses, which is intended to provide more detailed information about specified about specified categories of expenses (purchases

of inventory, employee compensation, depreciation and amortization) included in certain expense captions presented on the consolidated

statement of operations.

The guidance in this ASU is effective for fiscal years beginning after December 15, 2026, and interim periods

within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating the impact the

adoption of this ASU will have on its consolidated financial statements and related disclosures.

Product Warranty - Expected future product warranty

50 unchanged sentences

and does not disclose information about remaining performance obligations that have original expected durations of one-year or less.

At February 29, 2024, the Company had received $ 3,420,000 in cash

deposits, representing contract liabilities, and had issued Letters of Credit in the amount of $ 72,000 to secure these cash deposits.

At February 28, 2025, the Company had received $ 2,413,000 in customer

deposits, representing contract liabilities, and had issued Letters of Credit in the amount of $ 106,000 to secure these customer deposits.

At February 28, 2025, the Company was utilizing $ 106,000 of its available credit line to collateralize these letters of credit.

At February 28, 2023, the Company had received $ 2,838,000 in cash

deposits, representing contract liabilities, and had issued Letters of Credit in the amount of $ 145,000 to secure these cash deposits.

At February 29, 2024, the Company had received $ 3,420,000 in customer

deposits, representing contract liabilities, and had issued Letters of Credit in the amount of $ 72,000 to secure these customer deposits.

At February 29, 2024, the Company was utilizing $ 72,000 of its available credit line to collateralize these letters of credit.

14 unchanged sentences

and 210,770 options outstanding, respectively, under the 2023 Plan and the 2013 Plan.

Under the 2023 Stock Incentive Plan, as amended (the "2023 Plan"),

options can be granted to officers, directors, consultants and employees of the Company and its subsidiaries to purchase up to 2,500,000

shares of the Company's common stock.

Under the 2023 Plan options expire ten 10 years after the date of grant.

During fiscal 2025, the Company granted options to

3 unchanged sentences

shares to the non-employee members of the board of directors with an exercise price of $ 4.12 .

The options granted to employees and directors vest over three 3 years and expire in 10

The options granted by the Company during fiscal 2024 had a combined weighted average grant date fair value of $ 3.11 per

The options granted to employees and directors vest over three 3 years and expire in ten 10 years.

The options granted by the

Company during fiscal 2025 had a combined weighted average grant date fair value of $ 4.13

During fiscal 2024, the Company granted options to

acquire 28,239

shares to employees exercisable at prices ranging from $ 5.45

and options to acquire 16,500

shares to the non-employee members of the board of directors with an exercise price of $ 5.50 .

The options granted to employees and directors vest over three 3 years and expire in 10

acquire 54,813 shares to employees exercisable at prices ranging from $ 4.79 to $ 5.60 and options to acquire 18,380 shares to the

non-employee members of the board of directors with an exercise price of $ 4.79 .

The options granted to employees and directors vest

over 3 three years and expire in 10

The options granted by the Company during fiscal 2024 had a combined weighted average grant date fair value of $ 3.11 per

24 unchanged sentences

shares equal to the difference between the exercise price and the market price on the date of exercise.

Net settlement exercises

during the year ended February 29, 2024 resulted in 8,807 shares of common stock issued.

Cashless exercises during

the year ended February 28, 2025 resulted in 273

shares of common stock issued.

Determining the appropriate fair value of the stock-based awards requires

65 unchanged sentences

was being utilized to collateralize Letters of Credit issued to customers that have remitted cash deposits to the Company on existing

The Letters of Credit expire in April 2024.

The Letters of Credit expire in June 2025.

As of February 28, 2025, there were no outstanding borrowings under the line of credit

2 unchanged sentences

was being utilized to collateralize Letters of Credit issued to customers that have remitted cash deposits to the Company on existing

The Letters of Credit expired in May and July 2023.

As of February 28, 2023, there were no outstanding borrowings under the line

of credit and the unused portion of the credit line was $ 1,355,000 .

The Letters of Credit expired in April 2024.

As of February 29, 2024, there were no outstanding borrowings under the line of credit

and the unused portion of the credit line was $ 1,428,000 .

The annual provision (benefit) for income taxes differs from amounts

6 unchanged sentences

Permanent differences:

Non-Deductible equity based compensation

Income tax expense

4 unchanged sentences

Income tax expense

In assessing the realizability of deferred tax assets, management

considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The ultimate realization

of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences

become deductible.

Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and projections

for future taxable income over periods in which the deferred tax assets are deductible.

Management believes it is more likely than not

that the Company will realize the benefits of these deductible differences.

In assessing the realizability of deferred tax assets,

management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in

which those temporary differences become deductible.

Massachusetts research and development tax credits have been fully reserved as

management does not forsee utilizing such tax credits in the foreseeable future.

Management considers the scheduled reversal of

deferred tax liabilities, projected future taxable income, and projections for future taxable income over periods in which the

deferred tax assets are deductible.

Management believes it is more likely than not that the Company will realize the benefits of

these deductible differences.

The incorporation of the new tax laws for 2023, requires the Company

13 unchanged sentences

Accrued expenses and other

Research & Development tax credits - Massachusetts

Sub-total deferred tax asset

Less valuation allowance – Massachusetts R&D tax credits

Deferred tax asset – Long Term

3 unchanged sentences

$ ( 132,000 )

$ ( 230,000 )

EARNINGS PER SHARE

9 unchanged sentences

Diluted Earnings Per Share – Weighted Average

At February 28, 2025, the total number of stock options excluded from the computation of diluted income per share because the effect of

inclusion would have been anti-dilutive is 192,275 .

CUSTOMER CONCENTRATIONS AND FOREIGN SALES

7 unchanged sentences

for approximately $ 7,998,000 and $ 8,882,000 , or 39 % and 45 % respectively, of total revenues.

For the fiscal years ended February 29, 2024 and February 28, 2023,

no single customer accounted for more than 10% of the Company’s revenues.

Two customers accounted for 26 %

of the outstanding accounts receivables February 29, 2024.

Two customers accounted for 28 %

of the outstanding accounts receivables at February 28, 2023.

The Company had two customers which accounted for 14 % of sales during

Four customers accounted for 44 % of the outstanding accounts receivables at February 28, 2023.

For the fiscal year ended February 28, 2025, one customer accounted

for 11 % of the Company’s revenues.

Two customers accounted for 25 % of the outstanding accounts receivables February 28,

The Company had no single customer accounted for more than 10 % of

sales during fiscal 2024.

Two customers accounted for 26 % of the outstanding accounts receivables at February 29, 2024.

The company operates in one segment.

The chief operating decision maker, who is responsible

for allocating resources and assessing performance, has been identified as the Chief Executive Officer (the “CODM”).

assesses the financial performance of the company and decides how to allocate resources based on Operating income.

The following table presents our segment data (rounded to the nearest thousand):

Schedule of segment

Fiscal Year Ended

Direct Cost of Goods Sold

Materials & Freight

Production Labor

Service Department

Outside Installations

Warranty Costs

Total Cost of Goods & Service

Research & Product Development

R & D Materials

Marketing and Selling

Travel & Entertainment

Advertising / Trade Show

General and Administrative

Salaries and Wages

Depreciation and Amortization

Professional Fees

Corporate Expenses

Stock Based Compensation

Total Operating Expenses

Operating Income

Interest Income & Unrealized Gain

Income Before Taxes

Income Tax Expense

COMMITMENTS AND CONTINGENCIES

Other than the letters of credit discussed in Notes 3 and 8, the Company did not have any

material commitments or contingencies as of February 29, 2024.

Other than the letters of credit discussed in Notes 3 and 8, the Company

did not have any material commitments or contingencies as of February 28, 2025.

The Company is subject, from time to time, to claims by third parties

24 unchanged sentences

Stephen Harshbarger

/s/ Kirk Warshaw

Stephen Harshbarger

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures