Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
☐ | Smaller reporting company | |||||
Emerging growth company |
Page |
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PART I. FINANCIAL INFORMATION |
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Item 1. |
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3 |
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5 |
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6 |
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7 |
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8 |
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Item 2. |
14 |
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Item 3. |
21 |
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Item 4. |
21 |
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Item 1. |
23 |
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Item 1A. |
23 |
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Item 2. |
23 |
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Item 3. |
23 |
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Item 4. |
23 |
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Item 5. |
23 |
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Item 6. |
23 |
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24 |
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31.1 |
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31.2 |
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32 |
ITEM 1 |
– FINANCIAL STATEMENTS |
August 31, |
February 28, |
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2022 |
2022 |
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(unaudited) |
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Assets |
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Current assets |
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Cash and cash equivalents |
$ |
$ | ||||||
Accounts receivable, less allowance for doubtful accounts of $ |
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Employee retention credit refund receivable |
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Inventories, net |
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Contract assets |
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Prepaid expenses and other current assets |
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Total current assets |
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Property, plant, and equipment |
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Buildings |
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Machinery and equipment |
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Accumulated depreciation |
( |
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Net property, plant, and equipment |
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Right of use assets under operating leases |
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Intangible assets, net |
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Other noncurrent assets |
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Total assets |
$ |
$ | ||||||
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August 31, |
February 28, |
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2022 |
2022 |
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(unaudited) |
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Liabilities and Shareholders’ Equity |
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Current liabilities |
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Accounts payable |
$ |
$ | ||||||
Accrued liabilities |
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Contract liabilities |
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Note payable to officers and directors, current (Note 6) |
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Current maturities of financing lease obligations |
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Current operating lease liabilities |
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Total current liabilities |
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Finance lease obligations less current maturities |
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Long-term operating lease liabilities |
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Total liabilities |
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Shareholders’ Equity |
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Preferred stock, - |
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Common stock, - |
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Additional paid-in capital |
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Retained earnings |
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Treasury stock, shares at cost; |
( |
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( |
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Total shareholders’ equity |
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Total liabilities and shareholders’ equity |
$ |
$ | ||||||
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Three Months Ended August 31, |
Six Months Ended August 31, |
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2022 |
2021 |
2022 |
2021 |
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Net sales |
$ |
$ | $ |
$ | ||||||||||||
Cost of goods sold |
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Gross profit |
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Operating expenses |
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Selling and delivery |
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General and administrative |
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Operating loss |
( |
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( |
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( |
) | ||||||||
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Other income (expense) |
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Interest income (expense), net |
( |
) |
( |
) | ( |
) |
( |
) | ||||||||
Gain on sale of equipment, net |
— |
— | — | |||||||||||||
Gain on extinguishment of PPP loans |
— |
— |
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Other, net |
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Income (loss) before income taxes |
( |
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( |
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Income tax expense |
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Net income (loss) |
$ |
$ | $ |
( |
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$ | ( |
) | ||||||||
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Net income (loss) per share - basic |
$ |
$ | $ |
( |
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$ | ( |
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Net income (loss) per share - diluted |
$ |
$ | $ |
( |
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$ | ( |
) | ||||||||
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Basic weighted average shares outstanding |
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Diluted weighted average shares outstanding |
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Common Shares* |
Share Amount |
Additional Paid-in Capital |
Retained Earnings |
Treasury Stock |
Total Shareholders’ Equity |
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For the Three Months Ended August 31, 2022 |
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Balance, May 31, 2022 (unaudited) |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
Net income |
— | — | — | — | ||||||||||||||||||||
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Balance, August 31, 2022 (unaudited) |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
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For the Six Months Ended August 31, 2022 |
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Balance, February 28, 2022 (audited) |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
Net loss |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
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Balance, August 31, 2022 (unaudited) |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
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For the Three Months Ended August 31, 2021 |
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Balance, May 31, 2021 (unaudited) |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
Net income |
— | — | — | — | ||||||||||||||||||||
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Balance, August 31, 2021 (unaudited) |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
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For the Six Months Ended August 31, 2021 |
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Balance, February 28, 2021 (audited) |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
Net loss |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
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Balance, August 31, 2021 (unaudited) |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
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* | Common shares are shown net of Treasury Shares |
Six Months Ended August 31, |
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2022 |
2021 |
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Operating Activities |
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Net loss |
$ |
( |
) |
$ | ( |
) | ||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |
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Depreciation expense |
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Amortization of intangible assets |
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Provision for doubtful accounts |
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Provision for inventory reserve |
( |
) | ||||||
Gain on disposal of equipment |
( |
) |
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Gain on extinguishment of PPP loans |
( |
) | ||||||
Other |
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Changes in working capital items: |
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Accounts receivable |
( |
) |
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Inventories |
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Prepaid expenses and other assets |
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Contract assets |
( |
) |
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Employee retention credit refund receivable |
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Contract liabilities |
( |
) | ||||||
Accounts payable and accrued liabilities |
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Net cash provided by (used in) operating activities |
( |
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( |
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Investing Activities |
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Capital expenditures |
( |
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( |
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Proceeds from sale of equipment |
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Net cash provided by (used in) investing activities |
( |
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( |
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Financing Activities |
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Repayments of long-term debt |
( |
) | ||||||
Repayments on lease financing |
( |
) |
( |
) | ||||
Proceeds from loans with officers and directors |
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Net cash provided by (used in) financing activities |
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Net change in cash and cash equivalents |
( |
) |
( |
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Cash and cash equivalents, beginning of year |
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Cash and cash equivalents, end of period |
$ |
$ | ||||||
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August 31, 2022 |
February 28, 2022 |
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Working capital |
$ |
$ | ||||||
Liquid assets |
$ |
$ |
August 31, |
February 28, |
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2022 |
2022 |
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Raw materials |
$ |
$ |
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Work-in-process |
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Finished goods |
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$ |
$ |
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August 31, 2022 |
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Assets |
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Operating lease right-of-use |
$ | |||
Liabilities |
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Current portion of operating lease liabilities |
$ | |||
Noncurrent portion of operating lease liabilities |
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Total operating lease liabilities |
$ | |||
August 31, 2022 |
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Weighted average remaining lease term |
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Weighted average discount rate |
% |
FY2023 |
$ | |||
FY2024 |
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FY2025 |
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Total operating lease payments |
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Less imputed interest |
( |
) | ||
Total operating lease liabilities |
$ | |||
August 31, 2022 |
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Financing lease right-of-use |
$ | |||
Current portion of financing lease liabilities |
$ | |||
Noncurrent portion of financing lease liabilities |
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Total financing lease liabilities |
$ | |||
Fiscal Year |
Amount |
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2023 |
$ | |||
2024 |
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Total finance lease payments |
$ | |||
Less imputed interest |
( |
) | ||
Total finance lease liabilities |
$ | |||
Six Months |
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Ended August 31, |
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2022 |
2021 |
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Cash paid for: |
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Interest |
$ |
$ |
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Net Income (Loss) |
Weighted Average Common Shares Outstanding |
Earnings (Loss) Per Share |
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Three months ended August 31, 2022 |
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Basic |
$ | $ | |
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Effect of dilution: |
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Options |
— | — | ||||||||||
Diluted |
$ | $ | ||||||||||
Three months ended August 31, 2021 |
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Basic |
$ | |
$ | |||||||||
Effect of dilution: |
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Options |
— | — | ||||||||||
Diluted |
$ | $ | ||||||||||
Net Income (Loss) |
Weighted Average Common Shares Outstanding |
Earnings (Loss) Per Share |
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Six months ended August 31, 2022 |
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Basic |
$ | ( |
) | $ | ( |
) | ||||||
Effect of dilution: |
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Options |
— | — | — | |||||||||
Diluted |
$ | ( |
) | $ | ( |
) | ||||||
Six months ended August 31, 2021 |
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Basic |
$ | ( |
) | $ | ( |
) | ||||||
Effect of dilution: |
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Options |
— | — | — | |||||||||
Diluted |
$ | ( |
) | $ | ( |
) | ||||||
• |
Simulation and Training Products – |
• |
Cyber Secure Products – |
• |
Data Display CRTs – |
• |
Other Computer Products – |
August 31, 2022 |
February 28, 2022 |
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Working capital |
$ |
194 |
$ |
509 |
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Liquid assets |
$ |
241 |
$ |
245 |
Three Months |
Six Months |
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Ended August 31, |
Ended August 31, |
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2022 |
2021 | 2022 |
2021 | |||||||||||||
Net Sales |
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Simulation and Training (VDC Display Systems) |
56.5 |
% |
56.4 | % | 65.8 |
% |
55.4 | |||||||||
Data Display CRT (Lexel and Data Display) |
20.7 |
11.4 | 18.4 |
12.0 | ||||||||||||
Cyber Secure Products (AYON Cyber Security) |
10.1 |
16.9 | 5.6 |
13.9 | ||||||||||||
Other Computer Products (Unicomp) |
12.7 |
15.3 | 10.2 |
18.7 | ||||||||||||
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Total net sales |
100.0 |
% |
100.0 | % | 100.0 |
% |
100.0 | |||||||||
Costs and expenses |
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Cost of goods sold |
74.0 |
% |
97.3 | % | 74.6 |
% |
88.9 | |||||||||
Selling and delivery |
6.6 |
6.5 | 5.8 |
7.5 | ||||||||||||
General and administrative |
43.1 |
47.4 | 35.7 |
50.4 | ||||||||||||
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123.7 |
% |
151.2 | % | 116.1 |
% |
146.8 | ||||||||||
Operating loss |
(23.7 |
)% |
(51.2 | )% | (16.1 |
)% |
(46.8 | ) | ||||||||
Interest income (expense), net |
(0.2 |
)% |
(0.2 | )% | (0.2 |
)% |
(0.4 | ) | ||||||||
Other income (expense), net |
27.2 |
60.0 | 11.5 |
31.7 | ||||||||||||
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Income (loss) before income taxes |
3.3 |
% |
8.6 | % | (4.8 |
)% |
(15.5 | ) | ||||||||
Income tax expense |
— |
— | — |
— | ||||||||||||
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Net income (loss) |
3.3 |
% |
8.6 | % | (4.8 |
)% |
(15.5 | ) | ||||||||
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|
August 31, 2022 |
February 28, 2022 |
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Working capital |
$ |
194 |
$ | 509 | ||||
Liquid assets |
$ |
241 |
$ | 245 |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3. | Defaults upon Senior Securities |
Item 4. | Submission of Matters to a Vote of Security Holders |
Item 5. | Other information |
Item 6. | Exhibits |
VIDEO DISPLAY CORPORATION | ||||||
October 17, 2022 | By: | /s/ Ronald D. Ordway | ||||
Ronald D. Ordway | ||||||
Chief Executive Officer | ||||||
October 17, 2022 | By: | /s/ Gregory L. Osborn | ||||
Gregory L. Osborn | ||||||
Chief Financial Officer |