UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: August 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No.: 000-16035 (Exact name of registrant as specified in its charter) New York 14-1568099 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: May 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No.: 000-16035 (Exact name of registrant as specified in its charter) New York 14-1568099 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 2012 Rt. ...

Financial Data and Key Metrics - Net sales for fiscal year 2022 increased by 16% to $17.1 million compared to $14.8 million in fiscal year 2021 [18] - Gross profit increased by 23% to $8.6 million, with gross profit margin rising by 310 basis points to 50.3% [19] - Operating income grew by 41% to $1.9 million, with operating margin increasing to 11% from 9% in the prior year [19] - Net income was $2.5 million, a 127% increase from $1.1 million in fiscal 2021, driven by higher operating income and PPP loan forgiveness [20] - Cash and cash equivalents increased by $2.1 million to $10.7 million, with no debt on the balance sheet [21] Business Line Performance - Alternative energy market sales grew by 72% to $3.7 million, driven by investments in clean energy sectors such as fuel cells and carbon capture [24] - Medical market sales increased by 29% to $4.3 million, supported by strong demand from China and North America [24] - Electronics market sales rose by 19% to $7.1 million, primarily due to a significant sale of a 6-axis robot in the semiconductor market [25] - Industrial market sales declined by 53% due to the absence of a large textile shipment from the previous year [25] Geographic Performance - 68% of sales originated outside the U.S. and Canada, up from 65% in the prior year [18] - APAC and EMEA regions showed growth ranging from 6% to 27%, while Latin America experienced a 10% decline in sales [29] Strategic Direction and Industry Competition - The company is focusing on expanding its capabilities in roll-to-roll product handling, which addresses approximately 15% of the global coating market [14] - Sono-Tek is targeting growth in microelectronics, clean energy, and medical devices, all of which benefit from its thin-film coating technology [12] - The company is shifting its SIC code to better reflect its technology instrumentation focus, aiding stakeholders in understanding its business [14] Management Commentary on Market Environment and Outlook - Management expects double-digit sales growth for the first quarter and the full fiscal year 2023, driven by strong demand in semiconductors, medical devices, and clean energy [16] - The company is optimistic about the clean energy sector, particularly with government investments in hydrogen and electrolysis programs [26] - Sono-Tek anticipates continued growth in its backlog, which increased by 38% to $5.3 million, driven by product line expansion and full system solution sales [30] Other Important Information - The company paid off its mortgage debt during the year and currently has no debt on its balance sheet [16] - Capital expenditures for fiscal 2022 were $386,000, focused on upgrading manufacturing facilities [21] Q&A Session Summary Question: Market Share and Ultrasonic Coating Equipment Market - The company has seen a shift from R&D-focused machines to larger, more complex production solutions, with 60% of machines now used in production environments [48] - Sono-Tek is focusing on capturing a larger share of the general coating equipment market by addressing customer needs with solutions like roll-to-roll technology [40][41] Question: Fuel Cells and Electrolyzer Markets - The technical requirements for coating equipment in fuel cells and electrolyzers are similar, but the process expertise varies, requiring customized solutions for each application [45] - Fuel cells are in a more mature stage, while carbon capture and electrolyzer applications are still in R&D and pilot phases [47] Question: Customer Diversification - The clean energy sector is seeing an influx of new companies, while the semiconductor and medical markets are dominated by repeat customers from large multinational companies [54][55] Question: Capital Expenditure and Manufacturing Equipment - The company expects a slight increase in CapEx for the coming year, focusing on automation and efficiency improvements to accommodate growth [68][70] - Sono-Tek is investing in advanced manufacturing technologies to maintain its competitive edge in ultrasonic spray systems [71][72]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year ended: February 28, 2022 Commission File Number: 000-16035 (Name of registrant as specified in its charter) Incorporation or Organization) NEW YORK 14-1568099 (State or other Jurisdiction of (IRS Employer Identification Number) 2012 Route 9W, Milton, New York 12547 (Address of Principal Executive Offices) (Zip Code) Registr ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: November 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No.: 000-16035 (Exact name of registrant as specified in its charter) (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) New York 14-1 ...

For the quarterly period ended: August 31, 2021 OR UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☑ 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 Commission File No.: 000-16035 (Exact name of registrant as specified in its charter) New York 14-1568099 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification ...

Financial Data and Key Metrics - Net sales for Q2 2022 were $4.1 million, up 17% YoY, driven by strong international sales, with 62% of sales originating outside the US and Canada [13] - Gross profit increased 28% YoY to $2.1 million, with gross profit margin improving to 51% from 46.6% in the prior year period, a 440 basis point increase [14] - Operating income surged 123% to $449,000, with operating margin rising to 11% from 5.8% in the prior year period [15] - Net income increased 93% to $344,000, with earnings per share of $0.02 compared to $0.01 in the prior year [16] - Cash and cash equivalents increased to $9.7 million, up $1.1 million from the fiscal year-end, with no debt on the balance sheet [16] Business Line Performance - Sales growth was primarily driven by multi-axis coating systems, including systems used for coating electronic diagnostic devices for rapid COVID test kits [19] - OEM sales increased by 264% ($613,000), driven by strong sales from semiconductor and PCB fluxing partners [20] - The electronics market saw a 79% increase in sales, driven by strong demand from China for OEM systems used in the semiconductor market and COVID test kits [20] - The alternative energy market also showed strength, with growing investments in clean energy driving demand for machines used in fuel cells and carbon capture applications [21] Geographic Performance - 62% of sales originated outside the US and Canada, up from 38% in the prior year, with strong sales in APAC, particularly China, as manufacturing operations resumed post-COVID lockdowns [22] - Sales to China included stent coating machines, a new specialty medical device coating system, and strong OEM semiconductor orders [23] - Sales to the US and Canada declined YoY due to the absence of a large float glass coating line shipment, which was present in the prior year [25] Strategic Direction and Industry Competition - The company has shifted towards offering more complex, complete solutions rather than component sales, broadening its addressable market and increasing average selling prices [10] - Demand for Sono-Tek's technology is expected to grow as electronic devices become more miniaturized and the use of implantable medical devices increases globally [10] - The company is focusing on high-tech markets such as semiconductors, medical devices, and clean energy, with significant growth opportunities in these sectors [11] Management Commentary on Operating Environment and Future Outlook - Management highlighted the company's strong balance sheet, with nearly $10 million in cash and zero debt, and expects double-digit sales growth for the fiscal year [11] - The company's backlog reached a record high of $6.3 million, a 45% increase from the previous quarter, driven by expanding product lines and application development labs [27] - Sales growth guidance for the second half of the fiscal year is for double-digit increases over the comparable periods of the prior year, with the fiscal year expected to achieve the highest annual sales in corporate history [29] Other Important Information - The company was approved to uplist its common stock to the NASDAQ Capital Markets in August, increasing visibility and trading volume among institutional investors [12] - CapEx for Q2 was $147,000, with full-year CapEx projected to be between $300,000 and $350,000 [16] Q&A Session Summary Question: Backlog and Order Details - The backlog includes a 6-axis robot system for the semiconductor market, expected to ship in Q4, with $1 million to $1.5 million of the backlog likely to ship in the next fiscal year [32] - Orders in Q2 were solid, with no cancellations, and the backlog reflects strong demand, particularly for larger, high-value machines [33] Question: Sales and Margin Guidance - Gross margins were higher than usual in Q2 due to strong OEM sales, particularly in Asia, but are expected to normalize to the high 40s range in the long term [34] - The company anticipates continued strong demand from OEM customers in Asia, particularly in the semiconductor sector, for at least another quarter [35] Question: Alternative Energy and Roll-to-Roll Technology - The company is leveraging its expertise in fuel cell membrane coating to expand into carbon capture applications, with customers transitioning to higher-volume manufacturing and roll-to-roll technology [37] - A partnership with an industry expert in roll-to-roll technology is helping develop a new coating machine for membranes, with potential applications in fuel cells, carbon capture, and other markets [38] Question: Capacity and Revenue Potential - The company's existing facilities can support sales of up to $23-24 million, with potential to expand to $40 million by utilizing additional buildings in its complex [46] - Employee recruitment and retention are critical, with the company focusing on internships and word-of-mouth referrals to attract and train engineers familiar with its unique technology [47]

Part I – Financial Information [Item 1 – Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201%20%E2%80%93%20Condensed%20Consolidated%20Financial%20Statements) Presents Sono-Tek's unaudited Q1 FY2022 condensed consolidated financial statements, highlighting net income growth and stable financial position [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets slightly decreased as of May 31, 2021, while liabilities significantly dropped due to PPP loan forgiveness, boosting stockholders' equity Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | May 31, 2021 | February 28, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$16,383,149** | **$16,423,391** | | Cash and cash equivalents | $5,793,647 | $4,084,078 | | **Total Liabilities** | **$4,144,078** | **$5,472,709** | | Long term debt | $— | $1,001,640 | | **Total Stockholders' Equity** | **$12,239,071** | **$10,950,682** | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Net sales increased **6%** for Q1 FY2022, with gross profit up **17%**; net income surged to **$1.27 million** due to PPP loan forgiveness, resulting in **$0.08** diluted EPS Condensed Consolidated Statement of Income (Unaudited) | Metric | Three Months Ended May 31, 2021 | Three Months Ended May 31, 2020 | | :--- | :--- | :--- | | Net Sales | $3,644,468 | $3,428,544 | | Gross Profit | $1,824,165 | $1,560,733 | | Operating Income | $342,908 | $184,190 | | Paycheck Protection Program Loan Forgiveness | $1,005,372 | $— | | **Net Income** | **$1,266,752** | **$167,928** | | **Diluted Earnings Per Share** | **$0.08** | **$0.01** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly improved to **$722,005** in Q1 FY2022, with **$987,564** from investing activities, leading to a **$1.71 million** increase in cash Cash Flow Summary (Unaudited) | Activity | Three Months Ended May 31, 2021 | Three Months Ended May 31, 2020 | | :--- | :--- | :--- | | Net Cash Provided By (Used in) Operating Activities | $722,005 | $(395,749) | | Net Cash Provided By Investing Activities | $987,564 | $158,384 | | Net Cash Provided By Financing Activities | $— | $959,761 | | **Net Increase in Cash and Cash Equivalents** | **$1,709,569** | **$722,396** | | **Cash and Cash Equivalents, End of Period** | **$5,793,647** | **$4,381,947** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes detail revenue recognition, product line sales, PPP loan forgiveness, and foreign sales, highlighting Multi-Axis Coating Systems as the largest revenue driver and **66%** foreign sales - The company designs and manufactures ultrasonic coating systems for various markets, including microelectronics, alternative energy, and medical[16](index=16&type=chunk) Sales Revenue by Product Line (Three Months Ended May 31) | Product Line | 2021 Revenue | % of Total | 2020 Revenue | % of Total | | :--- | :--- | :--- | :--- | :--- | | Fluxing Systems | $358,000 | 10% | $344,000 | 10% | | Integrated Coating Systems | $155,000 | 4% | $1,176,000 | 34% | | Multi-Axis Coating Systems | $2,079,000 | 57% | $913,000 | 27% | | OEM Systems | $326,000 | 9% | $422,000 | 12% | | Other | $726,000 | 20% | $574,000 | 17% | | **TOTAL** | **$3,644,000** | | **$3,429,000** | | - In April 2021, the Small Business Administration (SBA) forgave the company's Paycheck Protection Program (PPP) loan in its entirety. A gain of **$1,005,372** was recorded, which is a non-taxable event[57](index=57&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk) - For the first quarter of fiscal 2022, foreign sales accounted for approximately **66%** (**$2,416,000**) of total revenues, a decrease from **78%** in the prior-year period. Three customers accounted for **33%** of sales[60](index=60&type=chunk)[61](index=61&type=chunk) [Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202%20-%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 FY2022 financial results, highlighting **6%** net sales growth, **86%** operating income increase, and **13.7%** backlog growth, driven by strong market demand - The company's growth strategy is to leverage its ultrasonic coating technologies to provide complete machine solutions, shifting from primarily selling nozzles and components. This has increased average selling prices, with some systems reaching over **$1,000,000**[68](index=68&type=chunk)[70](index=70&type=chunk) Q1 FY2022 Financial Highlights (vs. Q1 FY2021) | Metric | Q1 FY2022 | Change vs. Q1 FY2021 | | :--- | :--- | :--- | | Net Sales | $3,644,000 | +6% | | Gross Profit | $1,824,000 | +17% | | Gross Margin | 50.0% | +450 bps | | Operating Income | $343,000 | +86% | | Backlog (at May 31, 2021) | $4,380,000 | +13.7% (from Feb 28, 2021) | [Results of Operations](index=17&type=section&id=Results%20of%20Operations) Total sales for Q1 FY2022 increased **6%** to **$3.64 million**, driven by a **128%** surge in Multi-Axis Coating Systems, improving gross profit margin to **50.0%**, and boosting operating income by **86%** Sales by Product (Three Months Ended May 31) | Product Line | 2021 | 2020 | % Change | | :--- | :--- | :--- | :--- | | Multi-Axis Coating Systems | $2,079,000 | $913,000 | +128% | | Integrated Coating Systems | $155,000 | $1,176,000 | -87% | | Electronics/Microelectronics | $2,258,000 | $2,240,000 | +1% | Sales by Geography (Three Months Ended May 31) | Region | 2021 | 2020 | % Change | | :--- | :--- | :--- | :--- | | U.S. & Canada | $1,228,000 | $756,000 | +62% | | Asia Pacific (APAC) | $1,222,000 | $1,923,000 | -36% | | Europe, Middle East, Asia (EMEA) | $842,000 | $430,000 | +96% | - Gross profit margin increased by **450 basis points** to **50.0%** in Q1 FY2022, primarily due to product mix and decreased warranty and installation costs[75](index=75&type=chunk) - Total operating expenses increased by **8%** (**$104,000**), driven by higher international commission expense, professional fees, and stock-based compensation[76](index=76&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk) [Impact of Covid 19](index=20&type=section&id=Impact%20of%20Covid%2019) The company acknowledges ongoing COVID-19 risks, implementing safety protocols and spending reductions, while monitoring potential adverse impacts on operations, demand, and supply chain - The company implemented changes to protect employees, including social distancing, enhanced cleaning, remote work arrangements, and restricted facility access[89](index=89&type=chunk)[93](index=93&type=chunk) - COVID-19 has impacted the supply chain, and continued disruptions may cause difficulty in sourcing materials or unexpected shortages and delays[90](index=90&type=chunk) - The company has implemented plans to reduce spending, including cuts to capital expenditures, trade show participation, and travel[91](index=91&type=chunk) [Liquidity and Capital Resources](index=21&type=section&id=Liquidity%20and%20Capital%20Resources) Working capital increased to **$9.21 million** at May 31, 2021, with cash and equivalents rising to **$9.28 million**, and operating cash flow turning positive at **$722,000**, boosting equity - Working capital increased to **$9,212,000** at May 31, 2021, from **$8,902,000** at February 28, 2021, mainly due to the period's net income[94](index=94&type=chunk) - Cash generated from operating activities was **$722,000** in Q1 FY2022, compared to cash used of **$396,000** in Q1 FY2021[96](index=96&type=chunk) - Stockholders' Equity increased by **$1,288,000** to **$12,239,000** at May 31, 2021, primarily due to net income of **$1,267,000**[95](index=95&type=chunk) [Item 3 – Quantitative and Qualitative Disclosures about Market Risk](index=23&type=section&id=Item%203%20%E2%80%93%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company does not use financial instruments for speculation and is not subject to material foreign currency or interest rate market risks, as all sales are in U.S. dollars - The company is not subject to material foreign currency exchange rate risk as all sales transactions are completed in US dollars[105](index=105&type=chunk) - Market rate risk from changing interest rates is not considered material, despite holding **$5.8 million** in cash and **$3.5 million** in marketable securities[106](index=106&type=chunk) [Item 4 – Controls and Procedures](index=23&type=section&id=Item%204%20%E2%80%93%20Controls%20and%20Procedures) The CEO and CFO concluded that disclosure controls and procedures were effective as of May 31, 2021, with no material changes to internal controls over financial reporting in Q1 FY2022 - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of May 31, 2021[107](index=107&type=chunk) - No changes in internal controls over financial reporting occurred during the first fiscal quarter of 2022 that materially affected, or are reasonably likely to materially affect, these controls[108](index=108&type=chunk) Part II – Other Information [Item 1. Legal Proceedings](index=24&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no material legal proceedings - None[114](index=114&type=chunk) [Item 1A. Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, this section is not required - Not Required for Smaller Reporting Companies[114](index=114&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.](index=24&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) The company reported no unregistered sales of equity securities - None[114](index=114&type=chunk) [Item 6. Exhibits and Reports](index=24&type=section&id=Item%206.%20Exhibits%20and%20Reports) This section lists the exhibits filed with the Form 10-Q, including CEO/CFO certifications and financial data in Inline XBRL format - Exhibits filed include Rule 13a-14(a)/15d-14(a) Certifications, Section 906 Certifications, and financial information formatted in Inline XBRL[111](index=111&type=chunk)[112](index=112&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year ended: February 28, 2021 Commission File Number: 000-16035 (Name of registrant as specified in its charter) Incorporation or Organization) NEW YORK 14-1568099 (State or other Jurisdiction of (IRS Employer Identification Number) 2012 Route 9W, Milton, New York 12547 (Address of Principal Executive Offices) (Zip Code) Registr ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: November 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No.: 000-16035 (Exact name of registrant as specified in its charter) New York 14-1568099 (State or other jurisdiction of (IRS Employer incorporation or organization) Identificatio ...