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 |
A |
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(State or other jurisdiction of |
(I.R.S. Employer | |
incorporation or organization) |
Identification No.) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Large accelerated filer |
☐ |
Accelerated filer |
☐ | |||
☐ |
Smaller reporting company |
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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. |
15 |
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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 |
November 30, |
February 28, |
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2021 |
2021 |
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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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Inventories |
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Contract assets |
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Employee retention credit refund receivable |
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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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Construction in progress |
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Machinery and equipment |
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Accumulated depreciation |
( |
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( |
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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 |
$ |
$ | ||||||
November 30, |
February 28, |
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2021 |
2021 |
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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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Customer deposits |
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Note payable |
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Note payable to officer and director |
— | |||||||
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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PPP related loans, noncurrent |
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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 November 30, |
Nine Months Ended November 30, |
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2021 |
2020 |
2021 |
2020 |
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Net sales |
$ |
$ | $ |
$ |
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Cost of goods sold |
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Gross (loss) profit |
( |
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( |
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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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Other income (expense) |
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Interest expense, net |
( |
) |
( |
) | ( |
) |
( |
) | ||||||||
Investment gains, net |
— |
— |
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Gain on extinguishment of PPP loans |
— |
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Gain on sale of assets |
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— |
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— |
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Employee retention credit income |
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— |
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— |
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Other, net |
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(Loss) income before income taxes |
( |
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( |
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Income tax expense |
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Net (loss) income |
$ |
( |
) |
$ | $ |
( |
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$ | ||||||||
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Net (loss) income per share - basic |
$ |
( |
) |
$ | $ |
( |
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$ | ||||||||
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Net (loss) income per share - diluted |
$ |
( |
) |
$ | $ |
( |
) |
$ | ||||||||
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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 November 30, 2021 |
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Balance, August 31, 2021 (unaudited) |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
Net loss |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
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Balance, November 30, 2021 (unaudited) |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
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For the Nine Months Ended November 30, 2021 |
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Balance, February 28, 2021 (audited) |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
Net loss |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
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Balance, November 30, 2021 (unaudited) |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
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For the Three Months Ended November 30, 2020 |
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Balance, August 31, 2020 (unaudited) |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
Net income |
— | — | — | — | ||||||||||||||||||||
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Balance, November 30, 2020 (unaudited) |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
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For the Nine Months Ended November 30, 2020 |
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Balance, February 29, 2020 (audited) |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
Net income |
— | — | — | — | ||||||||||||||||||||
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Balance, November 30, 2020 (unaudited) |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
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* |
Common shares are shown net of Treasury Shares |
Nine Months Ended November 30, |
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2021 |
2020 |
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Operating Activities |
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Net (loss) income |
$ |
( |
) | $ | ||||
Adjustments to reconcile net (loss) income to net cash used in 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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Inventory related charges |
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Realized/unrealized gain on investments |
— |
( |
) | |||||
Gain on sale of assets |
— |
( |
) | |||||
Gain on extinguishment of PPP loans |
( |
) |
( |
) | ||||
Other, net |
( |
) |
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Changes in working capital items: |
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Accounts receivable |
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Inventories |
( |
) | ||||||
Prepaid expenses and other assets |
( |
) |
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Contract assets |
( |
) | ||||||
Employee retention credit refund receivabl e |
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( |
) |
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Customer deposits |
( |
) |
( |
) | ||||
Accounts payable and accrued liabilities |
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Net cash used in operating activities |
( |
) |
( |
) | ||||
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Investing Activities |
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Capital expenditures |
( |
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— | |||||
Proceeds from sale of assets |
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— |
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Purchases of investments |
— |
( |
) | |||||
Proceeds from sale of investments |
— |
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Net cash (used in) provided by investing activities |
( |
) |
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Financing Activities |
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Repayments of notes payable to officers and directors |
— |
( |
) | |||||
Repayments of note payable |
( |
) |
— | |||||
Repayments on lease financing |
( |
) |
— | |||||
Proceeds from loans with officers and directors |
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Proceeds from PPP related loans |
— |
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Change in marginal float |
— |
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Net cash provided by financing activities |
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Net change in cash and cash equivalents |
( |
) |
( |
) | ||||
Cash and cash equivalents, beginning of year |
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Cash and cash equivalents, end of period |
$ |
$ | ||||||
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November 30, 2021 |
February 28, 2021 |
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Working capital |
$ |
$ | ||||||
Liquid assets |
$ |
$ |
November 30, |
February 28, |
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2021 |
2021 |
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Raw materials |
$ |
$ |
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Work-in-process |
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Finished goods |
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Reserves for obsolescence |
( |
) | ||||||
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$ |
$ |
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November 30, 2021 |
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Assets |
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Operating lease right-of-use |
$ | |||
Liabilities |
||||
Current portion of operating lease liabilities |
$ | |||
Noncurrent portion of operating lease liabilities |
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Total operating lease liabilities |
$ | |||
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|
November 30, 2021 |
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Weighted average remaining lease term |
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Weighted average discount rate |
% |
FY2022 |
$ | |||
FY2023 |
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FY2024 |
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FY2025 |
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Total operating lease payments |
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Less imputed interest |
( |
) | ||
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Total operating lease liabilities |
$ | |||
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FY2022 |
$ | |||
FY2023 |
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Total |
$ | |||
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|
November 30, |
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Financing lease right-of-use |
$ | |||
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Current portion of financing lease liabilities |
$ | |||
Noncurrent portion of financing lease liabilities |
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Total financing lease liabilities |
$ | |||
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Fiscal Year |
Amount |
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2022 |
$ | |||
2023 |
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2024 |
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Total finance lease payments |
$ | |||
Less imputed interest |
( |
) | ||
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Total finance lease liabilities |
$ | |||
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Nine Months |
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Ended November 30, |
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2021 |
2020 |
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Cash paid for: |
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Interest |
$ |
$ |
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Non-cash activity: |
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Note receivable paid directly to officer |
$ |
— |
$ |
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Note payable to officer |
$ |
— |
$ |
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Forgiveness of PPP loans (Note 5 ) |
|
$ |
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$ |
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Equipment finance lease (Note 6 ) |
|
$ |
— |
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$ |
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Imputed interest expense |
$ |
— |
$ |
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Imputed interest income |
$ |
— |
$ |
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Net (Loss) Income |
Weighted Average Common Shares Outstanding |
(Loss) Earnings Per Share |
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Three months ended November 30, 2021 |
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Basic |
$ | ( |
) | $ | ( |
) | ||||||
Effect of dilution: |
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Options |
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Diluted |
$ | ( |
) | $ | ( |
) | ||||||
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Three months ended November 30, 2020 |
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Basic |
$ | $ | ||||||||||
Effect of dilution: |
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Options |
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Diluted |
$ | $ | ||||||||||
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Net (Loss) Income |
Weighted Average Common Shares Outstanding |
(Loss) Earnings Per Share |
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Nine months ended November 30, 2021 |
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Basic |
$ | ( |
) |
$ | ( |
) | ||||||
Effect of dilution: |
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Options |
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Diluted |
$ | ( |
) | $ | ( |
) | ||||||
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Nine months ended November 30, 2020 |
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Basic |
$ | $ | ||||||||||
Effect of dilution: |
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Options |
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Diluted |
$ | $ | ||||||||||
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• | Simulation and Training Products |
• | Cyber Secure Products – |
• | Data Display CRTs– |
• | Other Computer Products – |
November 30, 2021 |
February 28, 2021 |
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Working capital |
$ |
1,527 |
$ | 3,601 | ||||
Liquid assets |
$ |
215 |
$ | 293 |
Three Months |
Nine Months |
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Ended November 30, |
Ended November 30, |
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2021 |
2020 | 2021 |
2020 | |||||||||||||
Net Sales |
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Simulation and Training (VDC Display Systems) |
63.8 |
% |
77.9 | % | 57.9 |
% |
58.4 | |||||||||
Data Display CRT (Lexel and Data Display) |
15.9 |
7.1 | 13.2 |
14.7 | ||||||||||||
Broadcast and Control Centers (AYON Visual) |
— |
— | — |
— | ||||||||||||
Cyber Secure Products (AYON Cyber Security) |
1.7 |
2.6 | 10.3 |
16.3 | ||||||||||||
Other Computer Products (Unicomp) |
18.6 |
12.4 | 18.6 |
10.6 | ||||||||||||
Total net sales |
100.0 |
% |
100.0 | % | 100.0 |
% |
100.0 |
Costs and expenses |
||||||||||||||||
Cost of goods sold |
134.3 |
% |
66.9 | % | 102.6 |
% |
76.2 | |||||||||
Selling and delivery |
7.8 |
4.4 | 7.6 |
7.0 | ||||||||||||
General and administrative |
60.5 |
33.1 | 53.4 |
33.0 | ||||||||||||
202.6 |
% |
104.4 | % | 163.6 |
% |
116.2 | ||||||||||
Operating loss |
(102.6 |
)% |
(4.4 | )% | (63.6 |
)% |
(16.2 | ) | ||||||||
Interest expense, net |
(0.4 |
)% |
(0.1 | )% | (0.3 |
)% |
(0.4 | ) | ||||||||
Other income (expense), net |
53.2 |
70.2 | 38.2 |
26.4 | ||||||||||||
Income (loss) before income taxes |
(49.9 |
)% |
65.7 | % | (25.8 |
)% |
9.8 | |||||||||
Income tax expense |
— |
— | — |
— | ||||||||||||
Net income (loss) |
(49.9 |
)% |
65.7 | % | (25.8 |
)% |
9.8 | |||||||||
November 30, 2021 |
February 28, 2021 |
|||||||
Working capital |
$ |
1,527 |
$ | 3,601 | ||||
Liquid assets |
$ |
215 |
$ | 293 |
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 | ||||||
January 14, 2022 | By: | /s/ Ronald D. Ordway | ||||
Ronald D. Ordway | ||||||
Chief Executive Officer |
January 14, 2022 | By: | /s/ Gregory L. Osborn | ||||
Gregory L. Osborn | ||||||
Chief Financial Officer |