Annual report pursuant to Section 13 and 15(d)

STATEMENTS OF CASH FLOWS

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STATEMENTS OF CASH FLOWS (USD $)
 12 Months Ended
Feb. 29, 2012
Feb. 28, 2011
CASH FLOWS FROM OPERATING ACTIVITIES    
Net income $ 815,893 $ 704,085
Adjustments to reconcile net income to net cash from operating activities:    
Stock based compensation    12,511
Stock based -incentives    6,970
Depreciation and amortization 103,981 65,774
Deferred capital gain - building lease (22,480) (22,480)
Decrease in deferred tax 167,004 487,343
Changes in operating assets and liabilities:    
Increase in accounts receivable (170,821) (58,946)
Increase in inventory (499,256) (33,616)
Increase in prepaid expense (75,965) (45,326)
Increase in accounts payable 41,419 77,391
Increase in accrued payroll and related taxes 20,356 8,540
Increase (decrease) in accrued expense 82,470 (47,410)
Increase in accrued income tax liability 98,000   
Decrease in warranty liability    (72,188)
Decrease in accrued interest    (54,183)
NET CASH PROVIDED BY OPERATING ACTIVITIES 560,601 1,028,465
CASH FLOWS FROM INVESTING ACTIVITIES    
Payments for property and equipment (236,235) (200,522)
Payments for patents    (450)
Purchase of certificates of deposit (102,829) (152,399)
NET CASH USED IN INVESTING ACTIVITIES (339,064) (353,371)
CASH FLOWS FROM FINANCING ACTIVITIES    
Proceeds from issuing common stock 121,500   
Payments to note payable to related parties (39,010) (136,744)
Payments on note payable (1,929) (29,483)
Excess tax benefits from share - based payment arrangements 132,875   
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 213,436 (166,227)
NET INCREASE IN CASH AND CASH EQUIVALENTS 434,973 508,867
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 1,322,250 813,383
CASH AND CASH EQUIVALENTS, END OF YEAR 1,757,223 1,322,250
Cash paid during the years for:    
Interest 31,540 36,392
Taxes 89,644   
NON - CASH FINANCING AND INVESTING ACTIVITIES    
Issuance of common stock as incentives    6,970
Conversion of preferred stock to common stock    $ 100,000