What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2026-05-28 compared with 2025-05-28 · 93 added, 53 removed, 865 unchanged (14% of the section changed)

100 unchanged sentences

development laboratory and at our customers’ sites where we can assist in the design and development of customized coating systems.

We are a global business and our geographical sales mix can vary from

year to year depending on the timing of orders from customers.

We are a global business, and our geographical sales mix can vary

from year to year depending on the timing of orders from customers.

In fiscal 2026, 33% of our sales were from outside the U.S.

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To accomplish these objectives, we believe that we must judiciously

deploy our monetary and human capital in order to expand our presence in our targeted markets and create broader offerings for our customers.

deploy our monetary and human capital to expand our presence in our targeted markets and create broader offerings for our customers.

Availability of Raw Materials

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Information Regarding Sales Outside

the United States and Canada and Significant Customers

the United States and Canada

During fiscal 2026 and fiscal 2025, net sales to customers outside

and Canada accounted for approximately $6,963,000, or 33% of total net sales, and $7,998,000, or 39% of total net sales, respectively.

Our international sales could be impacted by changes in trade policies, including the imposition of new tariffs or other trade restrictions.

Our international sales have been impacted by changes in trade policies, including the imposition of new tariffs or other trade restrictions.

As of February 28, 2026, we employed 79 full-time and 10 part-time

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We remain dependent upon

securing new purchase orders in the future in order to sustain and grow our revenues.

Accordingly, there is no assurance that our revenues

and business will grow in the future.

securing new purchase orders in the future to sustain and grow our revenues.

Accordingly, there is no assurance that our revenues and

business will grow in the future.

Our failure to maintain and expand our customer relationships could materially and adversely affect

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accounted for approximately 28% of our net sales.

For the year ended February 29, 2024, our two largest customers accounted for approximately

12% of our net sales.

If we are unable to diversify our customer base, our future results could be heavily dependent on these customers

and distributors.

Our dependence on a limited number of customers and distributors means that the loss of a major customer or distributor

or any reduction in orders by a major customer or distributor would materially reduce our net sales and adversely affect our results of

As we continue our transition from primarily selling ultrasonic nozzles and components to a more complex business providing

complete equipment solutions and higher value subsystems, we expect that sales to relatively few customers will continue to account for

a significant percentage of our net sales for the foreseeable future;

however, these customers or our other customers, may not use our

products at current levels in the future, if at all.

Customer purchase orders may be delayed or cancelled, and order volume levels can

be changed with loss of deposit as the only penalty.

We may not be able to replace cancelled, delayed, or reduced purchase orders with

If any one of these customers reduces its demand for our products, it will likely have a material adverse effect on our operations.

For the year ended February 28, 2025, one customer accounted for approximately 11% of

our net sales.

If we are unable to diversify our customer base, our future results could be heavily dependent on these customers and distributors.

Our dependence on a limited number of customers and distributors means that the loss of a major customer or distributor or any reduction

in orders by a major customer or distributor would materially reduce our net sales and adversely affect our results of operations.

we continue our transition from primarily selling ultrasonic nozzles and components to a more complex business providing complete equipment

solutions and higher value subsystems, we expect that sales to relatively few customers will continue to account for a significant percentage

of our net sales for the foreseeable future;

however, these customers or our other customers, may not use our products at current levels

in the future, if at all.

Customer purchase orders may be delayed or cancelled, and order volume levels can be changed with loss of deposit

as the only penalty.

We may not be able to replace cancelled, delayed, or reduced purchase orders with new orders.

If any one of these

customers reduces its demand for our products, it will likely have a material adverse effect on our operations.

Furthermore, a significant portion of our accounts

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of tariffs and the resulting consequences, may have a material adverse impact on our business and results of operations .

The US government has indicated its intent to

adopt a new approach to trade policy and in some cases to renegotiate, or potentially terminate, certain existing bilateral or multi-lateral

trade agreements.

It has also initiated or is considering the imposition of tariffs on certain foreign goods, including electronic components

and devices, metal alloys, and potentially other parts used in our systems and machinery.

Changes in United States trade policy could

result in one or more of US trading partners adopting responsive trade policies making it more difficult or costly for us to export our

products to those countries.

The US government has adopted a new approach to

trade policy and in some cases to renegotiate, or potentially terminate, certain existing bilateral or multi-lateral trade agreements.

It has also initiated or is considering the imposition of tariffs on certain foreign goods, including electronic components and devices,

metal alloys, and potentially other parts used in our systems and machinery.

Changes in United States trade policy could result in one

or more of US trading partners adopting responsive trade policies making it more difficult or costly for us to export our products to

those countries.

These measures could also result in increased costs for goods imported into the United States.

could require us to increase prices to our customers which may reduce demand, or, if we are unable to increase prices, result in lowering

our margin on products sold.

This in turn could require

us to increase prices to our customers which may reduce demand, or, if we are unable to increase prices, result in lowering our margin

on products sold.

We cannot predict future trade policy or the terms

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of economic uncertainty and capital markets disruption, which has been impacted by geopolitical instability due to ongoing military conflicts

in various regions.

Our business, financial condition and results of operations could be materially adversely affected by any negative

impact on the global economy and capital markets resulting from such conflicts or broader geopolitical tensions.

in various regions, including war with Iran.

Our business, financial condition and results of operations could be materially adversely

affected by any negative impact on the global economy and capital markets resulting from such conflicts or broader geopolitical tensions.

Customers or suppliers may experience cash flow

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war, terrorist activities, severe or prolonged adverse weather conditions and natural disasters as well as health epidemics or pandemics.

Geopolitical instability

and the ongoing military conflict in Iran could adversely affect our business, financial condition, and results of operations.

The ongoing military conflict

between the United States and Iran, which escalated in early 2026, has created significant volatility in global markets and remains a

source of substantial uncertainty.

We are subject to risks associated with this conflict, which may include, but are not limited to:

· Supply Chain and Energy Disruptions:

The closure or restricted passage of the Strait of Hormuz has historically accounted for approximately 20% of the world’s seaborne

oil and liquefied natural gas (LNG) supply.

Continued instability in this region has led to a surge in Brent crude prices (exceeding $110

per barrel in early April 2026) and increased costs for electricity, transportation, and raw materials.

If we are unable to pass these

increased costs to our customers, our profit margins will be negatively impacted.

· Macroeconomic Pressure and Inflation:

The conflict has exacerbated global inflationary pressures, leading to higher interest rates and a potential period of stagflation.

bank policies responding to these conditions may restrict access to capital or increase our borrowing costs, limiting our ability to fund

operations or strategic acquisitions.

· Cybersecurity Threats:

There is an increased

risk of state-sponsored cyberattacks targeting U.S.

critical infrastructure and private sector enterprises.

Any successful breach of our

systems—or the systems of our third-party providers—could result in the theft of intellectual property, disruption of services,

and significant legal or reputational damage.

· Sanctions and Regulatory Compliance:

government and its allies have implemented, and may continue to expand, stringent sanctions and export controls.

Compliance with

these evolving regulations is costly and may prevent us from engaging with certain customers, suppliers, or partners, particularly those

with indirect ties to the region.

· Market Volatility:

Global equity and

bond markets have experienced heightened volatility due to the conflict.

A prolonged war could lead to a sustained "risk-off"

sentiment among investors, potentially depressing our stock price and affecting our ability to raise equity financing.

The extent to which the conflict

impacts our results will depend on future developments, including the duration of hostilities, the potential for regional escalation involving

neighboring states, and the effectiveness of any diplomatic efforts to restore stability.

Any of these factors could have a material adverse

effect on our business, financial condition, and results of operations.

Our success will depend, to a large degree, on the expertise

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on our business.

In order to expand our product offerings

and customer base, we will need to hire additional qualified personnel.

We may not be able to identify such persons, and even if we identify

them, we may not have the funds or ability to employ them, which could have a material adverse effect on our business.

To expand our product offerings and customer

base, we will need to hire additional qualified personnel.

We may not be able to identify such persons, and even if we identify them,

we may not have the funds or ability to employ them, which could have a material adverse effect on our business.

Although we have not experienced any material

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We expect to expand our operations, including

by expanding our internal resources, making possible acquisitions and entering into new markets, and we intend to continue to focus on

rapid growth, including organic growth and possibly acquisitions.

by expanding our internal resources, making possible acquisitions and entering new markets, and we intend to continue to focus on rapid

growth, including organic growth and possibly acquisitions.

The growth of our business could place significant strain on our management,

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Inflationary Pressures and Rising Prices for Goods and Services.

Inflation rose sharply beginning in late 2021

Inflation rose sharply beginning in early 2021

and continued rising through 2022, leveling off in 2023 at rates not seen for over 40 years.

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If our revenues fall below our expectations in

any particular quarter, we may not be able, or it may not be prudent for us, to reduce our expenses rapidly in response to the revenue

shortfall, which can result in us suffering significant operating losses or declines in profit margins in that quarter.

any particular quarter, we may not be able, or it may not be prudent for us, to reduce our expenses rapidly in

response to the revenue shortfall, which can result in us

suffering significant operating losses or declines in profit margins in that quarter.

Due to these factors and the other risks discussed

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and Analysis” section in our proxy statements;

providing only three years of business information;

providing only two years of audited financial statements;

and other “scaled”

disclosure requirements that are less comprehensive than issuers that are not smaller reporting companies.

narrative business disclosure requirements that are less comprehensive than issuers that are not smaller reporting companies.

If we fail to staff our accounting and finance

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fundamentals and prospects of our business.

Major bank failure or sustained

financial market illiquidity, or illiquidity at our clearing, cash management and custodial financial institutions, could adversely affect

our business, financial condition and results of operations.

We face certain risks

in the event of a sustained deterioration of financial market liquidity, as well as in the event of sustained deterioration in the liquidity,

or failure, of our clearing, cash management and custodial financial institutions.

Major bank failure or sustained financial market illiquidity,

or illiquidity at our clearing, cash management and custodial financial institutions, could adversely affect our business, financial condition

and results of operations.

We face certain risks in the event of a sustained

deterioration of financial market liquidity, as well as in the event of sustained deterioration in the liquidity, or failure, of our clearing,

cash management and custodial financial institutions.

In particular:

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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 1. Business