Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Feb. 28, 2019 | May 24, 2019 | Aug. 31, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | SEYCHELLE ENVIRONMENTAL TECHNOLOGIES INC /CA | ||
Entity Central Index Key | 0001056757 | ||
Document Type | 10-K | ||
Document Period End Date | Feb. 28, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --02-28 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,886,303 | ||
Entity Common Stock, Shares Outstanding | 26,640,313 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Feb. 28, 2019 | Feb. 28, 2018 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 2,078,122 | $ 2,075,833 |
Accounts receivable, net of allowance for doubtful accounts of $4,614 and $8,617 respectively | 352,818 | 829,790 |
Related party receivable | 31,472 | 35,007 |
Inventory, net | 972,497 | 998,296 |
Prepaid expenses, deposits, and other current assets | 129,049 | 159,980 |
Total current assets | 3,563,958 | 4,098,906 |
PROPERTY AND EQUIPMENT, NET | 118,154 | 135,539 |
OTHER ASSETS | ||
Other assets | 66,670 | 66,670 |
Total assets | 3,748,782 | 4,301,115 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 267,641 | 441,866 |
Customer deposits | 30,567 | 163,184 |
Capital lease obligations, current portion | 5,938 | 5,402 |
Total current liabilities | 304,146 | 610,452 |
LONG-TERM LIABILITIES | ||
Capital lease obligation, net of current portion | 3,182 | 9,082 |
Total long-term liabilities | 3,182 | 9,082 |
Total liabilities | 307,328 | 619,534 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, 6,000,000 shares authorized, none issued or outstanding | 0 | 0 |
Common stock $0.001 par value, 50,000,000 shares authorized, 26,640,313 shares issued and outstanding | 26,641 | 26,641 |
Additional paid-in capital | 8,944,368 | 8,944,368 |
Accumulated deficit | (5,499,875) | (5,259,748) |
Less treasury stock at cost (60,000 shares) | (29,680) | (29,680) |
Total stockholders' equity | 3,441,454 | 3,681,581 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 3,748,782 | $ 4,301,115 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Feb. 28, 2019 | Feb. 28, 2018 |
CURRENT ASSETS | ||
Net of allowance for doubtful accounts | $ 4,614 | $ 8,617 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, authorized shares | 6,000,000 | 6,000,000 |
Preferred stock, issued shares | 0 | 0 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, outstanding shares | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized shares | 50,000,000 | 50,000,000 |
Common stock, issued shares | 26,640,313 | 26,640,313 |
Common stock, outstanding shares | 26,640,313 | 26,640,313 |
Treasury shares | 66,000 | 66,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Condensed Consolidated Statements Of Income | ||
SALES | $ 3,153,429 | $ 5,279,377 |
COST OF SALES | 1,633,430 | 2,802,565 |
GROSS PROFIT | 1,519,999 | 2,476,812 |
OPERATING EXPENSES | ||
Selling, general and administrative expenses | 1,563,498 | 1,614,885 |
legal expenses | 140,098 | 162,425 |
Depreciation and Amortization | 55,040 | 60,232 |
Total operating expenses | 1,758,636 | 1,837,542 |
(LOSS) INCOME FROM OPERATIONS | (238,637) | 639,270 |
Interest expense | (1,919) | (4,394) |
Other income | 429 | 32,728 |
Total other (expense) income | (1,490) | 28,334 |
(LOSS) INCOME BEFORE PROVISION FOR INCOME TAXES | (240,127) | 667,604 |
Provision for income taxes | 0 | (6,697) |
NET (LOSS) INCOME | $ (240,127) | $ 660,907 |
NET (LOSS) INCOME PER SHARE - BASIC | $ (0.01) | $ 0.02 |
NET (LOSS) INCOME PER SHARE - DILUTED | $ (0.01) | $ 0.02 |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING BASIC | 26,574,313 | 26,574,313 |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING DILUTED | 26,574,313 | 26,574,313 |
NET REVENUE FROM RELATED PARTIES | $ 1,063,987 | $ 659,998 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Begnning Balance, Shares at Feb. 28, 2017 | 26,640,313 | 66,000 | |||
Begnning Balance, Amount at Feb. 28, 2017 | $ 26,641 | $ (29,680) | $ 8,944,368 | $ (5,920,655) | $ 3,020,674 |
Net income (loss) | 660,907 | 660,907 | |||
Ending Balance, Shares at Feb. 28, 2018 | 26,640,313 | 66,000 | |||
Ending Balance, Amount at Feb. 28, 2018 | $ 26,641 | $ (29,680) | 8,944,368 | (5,259,748) | 3,681,581 |
Net income (loss) | (240,127) | (240,127) | |||
Ending Balance, Shares at Feb. 28, 2019 | 26,640,313 | 66,000 | |||
Ending Balance, Amount at Feb. 28, 2019 | $ 26,641 | $ (29,680) | $ 8,944,368 | $ (5,499,875) | $ 3,441,454 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
CASH FLOW FROM OPERATING ACTIVITIES: | ||
Net (loss) income | $ (240,127) | $ 660,907 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation and amortization | 55,040 | 60,232 |
Provision for doubtful accounts | 19,233 | 37,911 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 457,739 | 37,806 |
Related party receivable | 3,535 | (7,807) |
Inventory | 25,800 | 423,575 |
Prepaid expenses, deposits and other current assets | 30,931 | 137,220 |
Accounts payable and accrued expenses | (174,224) | (34,549) |
Customer deposits | (132,617) | 63,507 |
Net Cash Provided by Operating Activities | 45,310 | 1,378,802 |
CASH FROM INVESTING ACTIVITIES: | ||
Additions to property and equipment | (37,655) | (30,774) |
Net Cash Used in Investing Activities | (37,655) | (30,774) |
CASH FROM FINANCING ACTIVITIES: | ||
Repayment of capital lease obligation | (5,366) | (4,307) |
Net Cash Used in Financing Activities | (5,366) | (4,307) |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 2,289 | 1,343,721 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 2,075,833 | 732,112 |
CASH AND CASH EQUIVALENTS AT END OF YEAR | 2,078,122 | 2,075,833 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||
CASH PAID DURING THE YEAR FOR FOR INTEREST | $ 1,919 | $ 4,395 |
1 ORGANIZATION AND DESCRIPTION
1 ORGANIZATION AND DESCRIPTION OF BUSINESS | 12 Months Ended |
Feb. 28, 2019 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1: ORGANIZATION AND DESCRIPTION OF BUSINESS Organization Seychelle Environmental Technologies, Inc. was incorporated under the laws of the State of Nevada on January 23, 1998 as a change in domicile to Royal Net, Inc., a Utah corporation that was originally incorporated on January 24, 1986. Royal Net, Inc. changed its state of domicile to Nevada and its name to Seychelle Environmental Technologies, Inc. effective in January 1998. Seychelle Water Technologies, Inc., and Fill 2 Pure International, Inc., both wholly owned subsidiaries, were formed as corporations in February 1997 and April 2013, respectively, under the laws of the state of Nevada for the purpose of marketing. Seychelle Environmental Technologies, Inc. and it’s subsidiaries are collectively herein referred to as “Seychelle” or the “Company” Description of Business The Company designs, assembles and distributes water filtration systems. These systems include portable water bottles, canteens, pumps, home-use pitchers, and related water filtration products that can be filled from nearly any available source of fresh water. |
2. SIGNIFICANT ACCOUNTING POLIC
2. SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Feb. 28, 2019 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2: SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies of the Company is presented to assist in understanding the Company's consolidated financial statements. The consolidated financial statements and notes are representations of the Company's management, which is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles in the United States of America and have been consistently applied in the preparation of the consolidated financial statements herein as of and for the years ended February 28, 2019 and 2018. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. Principles of Consolidation The Company is presently comprised of Seychelle Environmental Technologies, Inc., a Nevada corporation, with two wholly-owned subsidiaries, Seychelle Water Technologies, Inc., and Fill 2 Pure International, Inc., also Nevada corporations. All significant intercompany transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of the consolidated financial statements in conformity with generally accepted accounting principles in the United States, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates made in preparing the consolidated financial statements include inventory reserves, the allowance for doubtful accounts receivable and the deferred income tax valuation allowance. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers highly liquid investments with original maturities of three months or less to be cash equivalents. The Company maintains its cash and cash equivalents in bank deposit accounts which at times may exceed federally insured limits of $250,000. The Company has not experienced any losses related to this concentration of risk. Deposits exceeded insured limits by approximately $1,828,000 as of February 28, 2019. Accounts Receivable The Company performs periodic credit evaluations of its customers' financial condition and does not require collateral. Trade receivables generally are due in 30 days. An allowance for doubtful accounts is recorded when it is probable that all or a portion of a trade receivable balance will not be collected. Revenue Recognition We derive our revenue primarily from product sales. We determine revenue recognition through the following steps: (1) identification of the contract with a customer; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; (5) recognition of revenue when, or as, we satisfy a performance obligation. The Company's performance obligations consist solely of product shipped to customers. Revenue from product sales is recognized upon transfer of control of promised products to customers in an amount that reflects the consideration we expect to receive in exchange for these products. Revenue is recognized net of returns and any taxes collected from customers. We offer standard contractual terms in our purchase orders. In addition, we use the practical expedient related to commissions paid since they would be amortized in less than one year. Inventory Inventory is stated at the lower of cost or net realizable value. Cost is determined on a first-in, first-out basis. Inventory is comprised of raw materials and finished goods. Raw materials consist of fittings, caps and other components necessary to assemble the Company's finished goods. Finished goods consist of water bottles and other filtration systems that are available for shipment to customers. Finished goods and work in process include the costs of materials, labor and an allocation of overhead. Total overhead allocated to inventory as of February 28, 2019 and 2018 amounted to approximately $200,000 and $68,000, respectively. At each balance sheet date, the Company evaluates its ending inventory for excess quantities and obsolescence. This evaluation includes an analysis of sales levels by product type. Among other factors, the Company considers current product configurations, historical and forecasted demand, market conditions and product life cycles when determining the net realizable value of the inventory. Provisions are made to reduce excess or obsolete inventories to their estimated net realizable values. Once established, write-downs are considered permanent adjustments to the cost basis of the excess or obsolete inventory. The Company's inventory is reduced by excess and obsolete inventory reserve, which amounted to approximately $126,000 and $185,000 as of February 28, 2019 and 2018, respectively. Property and Equipment Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the depreciable assets. The estimated useful lives used in determining depreciation are three to five years for tooling, five years for computers and vehicles, and five to seven years for furniture and equipment. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the respective asset. Management evaluates useful lives regularly in order to determine recoverability. Maintenance and repairs are charged to expense as incurred; additions and betterments are capitalized. Upon retirement or sale, the cost and related accumulated depreciation of the disposed assets are removed, and any resulting gain or loss is recorded. Fully depreciated assets are not removed from the accounts until physical disposition. Long-Lived Assets The carrying value of long-lived assets, such as property and equipment, are evaluated when indicators of impairment are present. Impairment is assessed when the undiscounted future cash flows estimated to be generated by those assets are less than the assets' carrying amount. If the carrying value of the long-lived asset is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. No indicators of impairment existed during fiscal years ended, February 28, 2019 and 2018. Customer Deposits Customer deposits represent advance payments received for products and are recognized as a liability. Fair Value of Financial Instruments For certain financial instruments, including accounts receivable, accounts payable and accrued expenses, the carrying amounts approximate fair value due to their relatively short maturities. Cost of Sales Cost of sales is comprised primarily of the cost of purchased product, as well as labor, inbound freight costs, allocated overhead costs and other material costs required to complete products, including inventory markdowns due to excess and obsolete inventory. Shipping and Handling All amounts billed to customers relating to shipping and handling are reported as a component of sales. Costs incurred by the Company for shipping and handling, including transportation costs paid to third party shippers, are reported as a component of cost of sales. Sales Tax The Company collects sales tax in various jurisdictions. Upon collection from customers, it records the amount as a payable to the related jurisdiction. On a periodic basis, it files a sales tax return with the jurisdictions and remits the amount indicated on the return. Advertising Advertising costs are expensed as incurred. Total advertising expenses amounted to approximately $135,000 and $30,000 for the fiscal years ended February 28, 2019 and 2018, respectively, and recorded as selling, general and administrative expenses in the accompanying consolidated statements of operations. Research and Development Research and development costs are expensed as incurred and amounted to approximately $4,600 and $6,100 for the fiscal years ended February 28, 2019 and 2018, respectively. These costs are included in selling, general and administrative expenses in the accompanying consolidated statements of operations. Stock-Based Compensation The Company follows FASB ASC Topic 718, Compensation – Stock Compensation The fair value of options and warrants is calculated using the Black-Scholes option-pricing model. This model was developed to estimate the fair value of freely tradable, fully transferable options without vesting restrictions. As such, the values derived from using that model can differ significantly from other methods of valuing the Company's stock based compensation arrangements. The Black-Scholes model also requires subjective assumptions, including future stock price volatility and expected time to exercise, which greatly affect the calculated values. These factors could change in the future, affecting the determination of stock based compensation expense in future periods. Income Taxes The Company utilizes the asset and liability method of accounting for income taxes. The asset and liability method require that the current or deferred tax consequences of all events recognized in the consolidated financial statements be measured by applying the provisions of enacted tax laws to determine the amount of taxes payable or refundable currently or in future years. Deferred tax assets are reviewed for recoverability and the Company records a valuation allowance to reduce its deferred tax assets when it is more likely than not that all or some portion of the deferred tax assets will not be recovered. The Company also follows ASC 740-10-25, which provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprise's financial statements in accordance with ASC 740, " Accounting for Income Taxes" (Loss) Income Per Common Share For the year ended February 28, February 28, 2019 2018 Numerator: Net (loss) income available to common shareholders $ (240,127) $ 660,907 Weighted average shares – basic 26,574,313 26,574,313 Net (loss) income per share – basic $ (0.01) $ 0.02 Dilutive effect of common stock equivalents: Warrants - - Weighted average shares – diluted 26,574,313 26,574,313 Net (loss) income per share – diluted $ (0.01) $ 0.02 For the year ended February 28, 2019 and 2018, 6,407,221 potential common shares issuable upon the exercise of outstanding warrants have been excluded from the computation of diluted earnings per share because their inclusion would be anti-dilutive since the warrants are not "in the money". Concentrations The Company utilizes the services of two individuals, one of which is a related party and one of which is a third-party in China to source materials and the manufacturing of component parts with third-party vendors in China. As of February 28, 2019 and 2018, the Company had deposits for inventory purchases in China of approximately $66,237 and $3,067, respectively. For the year ended February 28, 2019, we had two customers that accounted for 30% and 28% (or 58%) of our total sales. As of February 28, 2018, we had three customers that accounted for 33%, 12% and 11% (or 56%) of our total sales. One of these customers accounted for 80% and 33% of net accounts receivable as of February 28, 2019 and 2018, respectively. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Updated ("ASU") 2014-09, Revenue from Contracts with Customers, issued as a new Topic, ASC Topic 606 ("ASU 2014-09"). The new revenue recognition standard provides a give-step analysis of transactions to determine when and how revenue is recognized. The premise of the standard is that a Company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 can be adopted by the Company either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company has adopted the guidance beginning in fiscal 2019 using the modified retrospective approach. The impact of adopting the standard on our consolidated financial statements and related disclosures was not material. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)," Management does not believe any other recently issued but not yet effective accounting pronouncements, if adopted, would have a material effect on the Company's present or future consolidated financial statements. |
3 INVENTORY
3 INVENTORY | 12 Months Ended |
Feb. 28, 2019 | |
Notes to Financial Statements | |
INVENTORY | NOTE 3: INVENTORY The Company's inventory consisted of the following: February 28, 2019 February, 28 2018 Raw materials $ 382,658 $ 860,424 Finished goods 589,839 137,872 Net inventory $ 972,497 $ 998,296 |
4 PROPERTY AND EQUIPMENT
4 PROPERTY AND EQUIPMENT | 12 Months Ended |
Feb. 28, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 4: PROPERTY AND EQUIPMENT The following is a summary of property and equipment: February 28, February 28, 2019 2018 Tooling $ 424,578 $ 408,453 Equipment 84,647 63,117 Computer equipment 63,520 63,520 572,745 535,090 Less: accumulated depreciation and amortization (454,591 ) (399,551 ) Total $ 118,154 $ 135,539 Fixed assets outside the United States included approximately $367,123 and $350,998 in tooling and equipment, at cost, located in various third party locations which manufacture the Company's component parts at February 28, 2019 and February 28, 2018, respectively. Depreciation expense included in operating expenses were $55,040 and $60,232 for the fiscal years ended February 28, 2019 and 2018, respectively. |
5 CAPITAL LEASE OBLIGATION
5 CAPITAL LEASE OBLIGATION | 12 Months Ended |
Feb. 28, 2019 | |
Debt Disclosure [Abstract] | |
CAPITAL LEASE OBLIGATION | NOTE 5: CAPITAL LEASE OBLIGATIONS The Company leases certain equipment under leases classified as capital leases. The leased equipment carried a cost of $26,000 and $26,000 as of February 28, 2019 and 2018, respectively and is depreciated on a straight-line basis over 5 years. Total accumulated depreciation related to the leased equipment was $13,000 and $13,000 as of February 28, 2019 and 2018, respectively. Obligations outstanding consisted of the following: February 28, 2019 February 28, 2018 Capital lease for equipment requiring monthly payments of principal and Interest of $546 through August 2020 bearing interest at an annual rate of 9.5% $ 10,266 $ 16,914 Total capital lease obligations, principal and interest 10,266 16,914 Less amount representing interest (1,146 ) (2,430 ) Total capital lease obligations, principal 9,120 14,484 Less current portion (5,938 ) (5,402 ) Long term portion $ 3,182 $ 9,802 Future maturities of the capital lease obligation as of February 28, 2019 are: Fiscal Year Ending February 28, Amount 2020 $ 5,938 2021 3,182 Total $ 9,120 |
6 RELATED PARTY TRANSACTIONS
6 RELATED PARTY TRANSACTIONS | 12 Months Ended |
Feb. 28, 2019 | |
Notes to Financial Statements | |
RELATED PARTY TRANSACTIONS | NOTE 6: RELATED PARTY TRANSACTIONS During the fiscal year ended February 28, 2018, TAM Trust purchased, on behalf of the Company, approximately $132,000 of raw materials from a vendor with which it already had a business relationship. The Company paid commission to a related party for sourcing raw materials with third-party vendors in China. The Company paid approximately $47,000 and $63,000 in direct commissions to the related party during the fiscal years ended February 28, 2019 and 2018, respectively. The Company had advanced amounts to employees of approximately $26,000 and $28,600 as of February 28, 2019 and 2018, respectively. These amounts are being repaid through direct payroll withdrawals. The Company had receivables from stockholders of approximately $5,000 and $6,000 as of February 28, 2019 and 2018, respectively. The Company had sales to two companies related to a member of the Board of Directors. Specifically, the two companies were Sovereign Earth, LLC and Amazon Seychelle. Sales to Sovereign Earth, LLC (dba Revolve) were $899,000 and $636,000 for the fiscal years ended February 28, 2019 and 2018, respectively and sales to Amazon Seychelle totaled $165,000 and $24,000 for 2019 and 2018 respectively. Pursuant to the agreement with the Company, Sovereign Earth, LLC is the sole and exclusive seller of the certain Seychelle products in specified Amazon world markets. |
7 EQUITY TRANSACTIONS
7 EQUITY TRANSACTIONS | 12 Months Ended |
Feb. 28, 2019 | |
Equity [Abstract] | |
EQUITY TRANSACTIONS | NOTE 7: EQUITY TRANSACTIONS Restricted Stock Grants None Warrants A summary of warrant activity for the fiscal years ended February 28, 2019 and February 28, 2018 is shown below. Weighted- Average Warrants Exercise Outstanding Price Outstanding at March 1, 2017 6,407,221 0.21 Granted - - Exercised - - Outstanding at February 28, 2018 6,407,221 0.21 Granted - - Exercised - - Outstanding at February 28, 2019 6,407,221 0.21 Vested at February 28, 2019 6,407,221 0.21 Exercisable at February 28, 2019 6,407,221 0.21 The following table summarizes significant ranges of outstanding warrants as of February 28, 2019: Warrants Outstanding Warrants Exercisable Weighted Weighted Weighted Average Average Average Remaining Exercise Number Exercise Exercise Price Number Life (Years) Price Outstanding Price $0.21 6,407,221 1.79 $0.21 6,407,221 $0.21 As of February 28, 2019 and 2018 the total outstanding warrants had an intrinsic value of $0. |
8 INCOME TAXES
8 INCOME TAXES | 12 Months Ended |
Feb. 28, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 8: INCOME TAXES Income tax expense (benefit) consists of the following: Current Deferred Total Year ended February 28, 2019: U.S. federal $ - - - State - - - Total income tax expense (benefit) $ - - - Year ended February 28 2018: U.S. federal $ (2,970 ) - (2,970) State 9,667 - 9,667 Total income tax expense $ 6,697 - 6,697 The income tax expense (benefit) differs from the expected amount of income tax expense (benefit) determined by applying a combined U.S. federal and state income tax rate of 27% to pretax (loss) income for the years ended February 28, 2019 and 2018 as follows: 2019 2018 Expected tax (benefit) provision $ (50,427 ) $ 212,520 State Income tax (benefit) provision (13,082 ) 40,088 Other (838 ) 28,468 Change in tax rate - 282,408 Permanent differences 930 1,215 Change in valuation allowance 63,417 (558,002 ) Income tax provision $ - $ 6,697 Deferred tax assets are as follows: February 28, 2019 February 28, 2018 Deferred tax assets: NOL carryforwards $ 231,649 $ 158,318 Depreciation (15,715 ) (23,600 ) Reserves and accrued expenses 48,674 70,171 Stock compensation - - Other 410,315 406,293 Valuation allowance (674,924 ) (611,182 ) Net deferred tax assets $ - $ - Tax Cuts and Jobs Act On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the "TCJA"). The TCJA makes broad and complex changes to the U.S. tax code, including, but not limited to, reducing the U.S. statutory corporate income tax rate from 35 percent to 21 percent, effective January 1, 2018. U.S. GAAP requires that deferred income tax assets and liabilities be remeasured at the income tax rate expected to apply when those temporary differences reverse, and that the effects of any change to such income tax rate be recognized in the period when the change was enacted. In connection with the Company's initial analysis of the impact of the TCJA, the Company recorded a discrete net tax expense of $282,408 in the year ended February 28, 2018. This net expense is primarily due to the remeasurement of the Company's existing deferred tax assets and liabilities. Due to the Company having a full valuation allowance related to their deferred taxes, the $282,408 discrete tax expense associated with the remeasurement was equally offset by the valuation allowance causing an overall net zero impact on the Company's current tax rate. The SEC staff issued Staff Accounting Bulletin No. 118 ("SAB 118"), which provides guidance on accounting for the tax effects of the TCJA. SAB 118 provides a measurement period that should not extend beyond one year from the TCJA enactment date for companies to complete the accounting under ASC 740. To the extent that a company's accounting for certain income tax effects of the TCJA is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. The valuation allowance for deferred tax assets as of February 28, 2019 and 2018, $674,924 and $611,182, respectively. The net change in the total valuation allowance was an increase of $63,417 and $558,002 for the years ended February 28, 2019 and 2018, respectively. In assessing the realization of deferred tax assets, management considers whether it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax-planning strategies in making this assessment. It was determined that it was more likely than not that a full valuation allowance was necessary as of February 28, 2019. At February 28, 2019, the Company had unused net operating loss carryovers of approximately $770,000 and $1,198,000 for federal and state tax purposes, respectively, which expire beginning in 2038. Note that any federal net operating loss carryovers from 2018 have an indefinite carryforward period. This was part of the legislation passed as part of the TCJA. The Company includes interest and penalties, if any, arising from the underpayment of income taxes in the consolidated statements of operations in the provision for income taxes. As of February 28, 2019 the Company had no accrued interest or penalties related to uncertain tax positions. The tax years that remain subject to examination by major taxing jurisdictions are fiscal years 2015 through 2018 for federal purposes and fiscal years 2014 through 2018 for state purposes. |
9 COMMITMENTS AND CONTINGENCIES
9 COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Feb. 28, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 9: COMMITMENTS AND CONTINGENCIES The Company entered into a lease agreement on one facility for its corporate offices, inventory and production at 22 Journey in Aliso Viejo, CA for a term of 5 years at a monthly rental of approximately $19,000, and such amounts are included in the table below. Future minimum base lease payments are as follows: Fiscal Year Ending February 28, Amount 2020 $ 253,908 2021 259,000 2022 109,000 Total $ 621,908 Legal Proceedings There is a pending legal action named Rolling Tides, LLC vs. Carl Palmer, Seychelle Environmental Technologies, Inc., and other defendants. The case was brought in the Superior Court of the State of California, County of Orange. The action alleges certain fraudulent transfers occurred from Seychelle to the various defendants. The plaintiffs have refused to identify any such transfers by date or amount. The matter is in discovery and trial is set for August, 2019. All the defendants have denied the allegations of the complaint, and are vigorously defending the matter. It is not likely that the case will be settled without trial. The Company believes that the case has no merit. Licenses The Company has historically entered into licensing agreements with third-parties for product proprietary rights, patent and trademark ownership, and use of product name. In return, the Company agrees to pay licensing fees and/or royalties on sales of those products. During the fiscal years ended February 28, 2019 and 2018, the Company paid $13,296 and $22,651, respectively, in royalties and licensing fees under these agreements. |
10 GEOGRAPHIC AREAS
10 GEOGRAPHIC AREAS | 12 Months Ended |
Feb. 28, 2019 | |
Segment Reporting [Abstract] | |
GEOGRAPHIC AREAS | NOTE 10: GEOGRAPHIC AREAS The Company sells its products throughout the United States and internationally. Geographic sales information for the fiscal years ended February 28, 2019 and 2018 is as follows: 2019 2018 United States $ 3,129,556 $ 5,130,357 Asia - 105,568 United Kingdom 20,806 - Canada 2,467 40,291 Other countries 600 3,161 Total $ 3,153,429 $ 5,279,377 _____________ (1) Sales are based on the country of residence of the customer. Long lived assets at February 28, 2019 are in the following geographic areas: United States China Total Property and equipment, net $ 57,167 $ 60,987 $ 118,154 Other assets 66,670 - 66,670 Total $ 123,837 $ 60,987 $ 184,824 Long lived assets at February 28, 2018 are in the following geographic areas: United States China Total Property and equipment, net $ 57,264 $ 78,275 $ 135,539 Other assets 66,670 - 66,670 Total $ 123,934 $ 78,275 $ 202,209 |
11 SUBSEQUENT EVENTS
11 SUBSEQUENT EVENTS | 12 Months Ended |
Feb. 28, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 11: SUBSEQUENT EVENTS Management has evaluated events subsequent to February 28, 2019 through the date the accompanying consolidated financial statements were filed with the Securities and Exchange Commission for transactions and other events that may require adjustment of and/or disclosure in such financial statements. Based on its review, except for the following, no material events were identified that require adjustment to the financial statements. Effective March 8, 2019, Mr. Carl Palmer resigned from his position as President, Treasurer, CEO and CFO but remains as a Board Member. At that date, Mrs. Cari Beck became the President, CEO, CFO, Treasurer and HR Manager. Ms. Lena Smith becaame the Secretary of Seychelle. |
2. SIGNIFICANT ACCOUNTING POL_2
2. SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Feb. 28, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. |
Principles of Consolidation | Principles of Consolidation The Company is presently comprised of Seychelle Environmental Technologies, Inc., a Nevada corporation, with two wholly-owned subsidiaries, Seychelle Water Technologies, Inc., and Fill 2 Pure International, Inc., also Nevada corporations. All significant intercompany transactions and balances have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with generally accepted accounting principles in the United States, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates made in preparing the consolidated financial statements include inventory reserves, the allowance for doubtful accounts receivable and the deferred income tax valuation allowance. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers highly liquid investments with original maturities of three months or less to be cash equivalents. The Company maintains its cash and cash equivalents in bank deposit accounts which at times may exceed federally insured limits of $250,000. The Company has not experienced any losses related to this concentration of risk. Deposits exceeded insured limits by approximately $1,828,000 as of February 28, 2019. |
Accounts Receivable | Accounts Receivable The Company performs periodic credit evaluations of its customers' financial condition and does not require collateral. Trade receivables generally are due in 30 days. An allowance for doubtful accounts is recorded when it is probable that all or a portion of a trade receivable balance will not be collected. |
Revenue Recognition | Revenue Recognition We derive our revenue primarily from product sales. We determine revenue recognition through the following steps: (1) identification of the contract with a customer; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; (5) recognition of revenue when, or as, we satisfy a performance obligation. The Company's performance obligations consist solely of product shipped to customers. Revenue from product sales is recognized upon transfer of control of promised products to customers in an amount that reflects the consideration we expect to receive in exchange for these products. Revenue is recognized net of returns and any taxes collected from customers. We offer standard contractual terms in our purchase orders. In addition, we use the practical expedient related to commissions paid since they would be amortized in less than one year. |
Inventory | Inventory Inventory is stated at the lower of cost or net realizable value. Cost is determined on a first-in, first-out basis. Inventory is comprised of raw materials and finished goods. Raw materials consist of fittings, caps and other components necessary to assemble the Company's finished goods. Finished goods consist of water bottles and other filtration systems that are available for shipment to customers. Finished goods and work in process include the costs of materials, labor and an allocation of overhead. Total overhead allocated to inventory as of February 28, 2019 and 2018 amounted to approximately $200,000 and $68,000, respectively. At each balance sheet date, the Company evaluates its ending inventory for excess quantities and obsolescence. This evaluation includes an analysis of sales levels by product type. Among other factors, the Company considers current product configurations, historical and forecasted demand, market conditions and product life cycles when determining the net realizable value of the inventory. Provisions are made to reduce excess or obsolete inventories to their estimated net realizable values. Once established, write-downs are considered permanent adjustments to the cost basis of the excess or obsolete inventory. The Company's inventory is reduced by excess and obsolete inventory reserve, which amounted to approximately $126,000 and $185,000 as of February 28, 2019 and 2018, respectively. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the depreciable assets. The estimated useful lives used in determining depreciation are three to five years for tooling, five years for computers and vehicles, and five to seven years for furniture and equipment. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the respective asset. Management evaluates useful lives regularly in order to determine recoverability. Maintenance and repairs are charged to expense as incurred; additions and betterments are capitalized. Upon retirement or sale, the cost and related accumulated depreciation of the disposed assets are removed, and any resulting gain or loss is recorded. Fully depreciated assets are not removed from the accounts until physical disposition. |
Long-Lived Assets | Long-Lived Assets The carrying value of long-lived assets, such as property and equipment, are evaluated when indicators of impairment are present. Impairment is assessed when the undiscounted future cash flows estimated to be generated by those assets are less than the assets' carrying amount. If the carrying value of the long-lived asset is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. No indicators of impairment existed during fiscal years ended, February 28, 2019 and 2018. |
Customer Deposits | Customer Deposits Customer deposits represent advance payments received for products and are recognized as a liability. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments For certain financial instruments, including accounts receivable, accounts payable and accrued expenses, the carrying amounts approximate fair value due to their relatively short maturities. |
Cost of Sales | Cost of Sales Cost of sales is comprised primarily of the cost of purchased product, as well as labor, inbound freight costs, allocated overhead costs and other material costs required to complete products, including inventory markdowns due to excess and obsolete inventory. |
Shipping and Handling | Shipping and Handling All amounts billed to customers relating to shipping and handling are reported as a component of sales. Costs incurred by the Company for shipping and handling, including transportation costs paid to third party shippers, are reported as a component of cost of sales. |
Sales Tax | Sales Tax The Company collects sales tax in various jurisdictions. Upon collection from customers, it records the amount as a payable to the related jurisdiction. On a periodic basis, it files a sales tax return with the jurisdictions and remits the amount indicated on the return. |
Advertising | Advertising Advertising costs are expensed as incurred. Total advertising expenses amounted to approximately $135,000 and $30,000 for the fiscal years ended February 28, 2019 and 2018, respectively, and recorded as selling, general and administrative expenses in the accompanying consolidated statements of operations. |
Research and Development | Research and Development Research and development costs are expensed as incurred and amounted to approximately $4,600 and $6,100 for the fiscal years ended February 28, 2019 and 2018, respectively. These costs are included in selling, general and administrative expenses in the accompanying consolidated statements of operations. |
Stock-Based Compensation | Stock-Based Compensation The Company follows FASB ASC Topic 718, Compensation – Stock Compensation The fair value of options and warrants is calculated using the Black-Scholes option-pricing model. This model was developed to estimate the fair value of freely tradable, fully transferable options without vesting restrictions. As such, the values derived from using that model can differ significantly from other methods of valuing the Company's stock based compensation arrangements. The Black-Scholes model also requires subjective assumptions, including future stock price volatility and expected time to exercise, which greatly affect the calculated values. These factors could change in the future, affecting the determination of stock based compensation expense in future periods. |
Income Taxes | Income Taxes The Company utilizes the asset and liability method of accounting for income taxes. The asset and liability method require that the current or deferred tax consequences of all events recognized in the consolidated financial statements be measured by applying the provisions of enacted tax laws to determine the amount of taxes payable or refundable currently or in future years. Deferred tax assets are reviewed for recoverability and the Company records a valuation allowance to reduce its deferred tax assets when it is more likely than not that all or some portion of the deferred tax assets will not be recovered. The Company also follows ASC 740-10-25, which provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprise's financial statements in accordance with ASC 740, " Accounting for Income Taxes" |
(Loss) Income Per Common Share | (Loss) Income Per Common Share For the year ended February 28, February 28, 2019 2018 Numerator: Net (loss) income available to common shareholders $ (240,127) $ 660,907 Weighted average shares – basic 26,574,313 26,574,313 Net (loss) income per share – basic $ (0.01) $ 0.02 Dilutive effect of common stock equivalents: Warrants - - Weighted average shares – diluted 26,574,313 26,574,313 Net (loss) income per share – diluted $ (0.01) $ 0.02 For the year ended February 28, 2019 and 2018, 6,407,221 potential common shares issuable upon the exercise of outstanding warrants have been excluded from the computation of diluted earnings per share because their inclusion would be anti-dilutive since the warrants are not "in the money". |
Concentrations | Concentrations The Company utilizes the services of two individuals, one of which is a related party and one of which is a third-party in China to source materials and the manufacturing of component parts with third-party vendors in China. As of February 28, 2019 and 2018, the Company had deposits for inventory purchases in China of approximately $66,237 and $3,067, respectively. For the year ended February 28, 2019, we had two customers that accounted for 30% and 28% (or 58%) of our total sales. As of February 28, 2018, we had three customers that accounted for 33%, 12% and 11% (or 56%) of our total sales. One of these customers accounted for 80% and 33% of net accounts receivable as of February 28, 2019 and 2018, respectively. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Updated ("ASU") 2014-09, Revenue from Contracts with Customers, issued as a new Topic, ASC Topic 606 ("ASU 2014-09"). The new revenue recognition standard provides a give-step analysis of transactions to determine when and how revenue is recognized. The premise of the standard is that a Company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 can be adopted by the Company either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company has adopted the guidance beginning in fiscal 2019 using the modified retrospective approach. The impact of adopting the standard on our consolidated financial statements and related disclosures was not material. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)," Management does not believe any other recently issued but not yet effective accounting pronouncements, if adopted, would have a material effect on the Company's present or future consolidated financial statements. |
2. SIGNIFICANT ACCOUNTING POL_3
2. SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Feb. 28, 2019 | |
Accounting Policies [Abstract] | |
(Loss) Income Per Common Share | For the year ended February 28, February 28, 2019 2018 Numerator: Net (loss) income available to common shareholders $ (240,127) $ 660,907 Weighted average shares – basic 26,574,313 26,574,313 Net (loss) income per share – basic $ (0.01) $ 0.02 Dilutive effect of common stock equivalents: Warrants - - Weighted average shares – diluted 26,574,313 26,574,313 Net (loss) income per share – diluted $ (0.01) $ 0.02 |
3 INVENTORY (Tables)
3 INVENTORY (Tables) | 12 Months Ended |
Feb. 28, 2019 | |
Inventory Tables | |
Inventory | The Company's inventory consisted of the following: February 28, 2019 February, 28 2018 Raw materials $ 382,658 $ 860,424 Finished goods 589,839 137,872 Net inventory $ 972,497 $ 998,296 |
4 PROPERTY AND EQUIPMENT (Table
4 PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Feb. 28, 2019 | |
Property, Plant and Equipment [Abstract] | |
Summary of property and equipment | The following is a summary of property and equipment: February 28, February 28, 2019 2018 Tooling $ 424,578 $ 408,453 Equipment 84,647 63,117 Computer equipment 63,520 63,520 572,745 535,090 Less: accumulated depreciation and amortization (454,591 ) (399,551 ) Total $ 118,154 $ 135,539 |
5 CAPITAL LEASE OBLIGATION (Tab
5 CAPITAL LEASE OBLIGATION (Tables) | 12 Months Ended |
Feb. 28, 2019 | |
Debt Disclosure [Abstract] | |
Outstanding obligations | Obligations outstanding consisted of the following: February 28, 2019 February 28, 2018 Capital lease for equipment requiring monthly payments of principal and Interest of $546 through August 2020 bearing interest at an annual rate of 9.5% $ 10,266 $ 16.914 Total capital lease obligations, principal and interest 10,266 16.914 Less amount representing interest (1,146 ) (2,430 ) Total capital lease obligations, principal 9,120 14,484 Less current portion (5,938 ) (5,402 ) Long term portion $ 3,182 $ 9,802 |
Future maturities of the capital lease obligation | Future minimum base lease payments are as follows: Fiscal Year Ending February 28, Amount 2020 $ 253,908 2021 259,000 2022 109,000 Total $ 621,908 |
7 EQUITY TRANSACTIONS (Tables)
7 EQUITY TRANSACTIONS (Tables) | 12 Months Ended |
Feb. 28, 2019 | |
Equity [Abstract] | |
Summary of warrant activity | A summary of warrant activity for the fiscal years ended February 28, 2019 and February 28, 2018 is shown below. Weighted- Average Warrants Exercise Outstanding Price Outstanding at March 1, 2017 6,407,221 0.21 Granted - - Exercised - - Outstanding at February 28, 2018 6,407,221 0.21 Granted - - Exercised - - Outstanding at February 28, 2019 6,407,221 0.21 Vested at February 28, 2019 6,407,221 0.21 Exercisable at February 28, 2019 6,407,221 0.21 |
Summary of significant ranges of outstanding warrants as of February 28, 2014 | The following table summarizes significant ranges of outstanding warrants as of February 28, 2019: Warrants Outstanding Warrants Exercisable Weighted Weighted Weighted Average Average Average Remaining Exercise Number Exercise Exercise Price Number Life (Years) Price Outstanding Price $0.21 6,407,221 1.79 $0.21 6,407,221 $0.21 |
8 INCOME TAXES (Tables)
8 INCOME TAXES (Tables) | 12 Months Ended |
Feb. 28, 2019 | |
Income Tax Disclosure [Abstract] | |
Income tax expense (benefit) | Income tax expense (benefit) consists of the following: Current Deferred Total Year ended February 28, 2019: U.S. federal $ - - - State - - - Total income tax expense (benefit) $ - - - Year ended February 28 2018: U.S. federal $ (2,970 ) - (2,970) State 9,667 - 9,667 Total income tax expense $ 6,697 - 6,697 |
Expected income tax expense | The income tax expense (benefit) differs from the expected amount of income tax expense (benefit) determined by applying a combined U.S. federal and state income tax rate of 27% to pretax (loss) income for the years ended February 28, 2019 and 2018 as follows: 2019 2018 Expected tax (benefit) provision $ (50,427 ) $ 212,520 State Income tax (benefit) provision (13,082 ) 40,088 Other (838 ) 28,468 Change in tax rate - 282,408 Permanent differences 930 1,215 Change in valuation allowance 63,417 (558,002 ) Income tax provision $ - $ 6,697 |
Deferred tax assets | Deferred tax assets are as follows: February 28, 2019 February 28, 2018 Deferred tax assets: NOL carryforwards $ 231,649 $ 158,318 Depreciation (15,715 ) (23,600 ) Reserves and accrued expenses 48,674 70,171 Stock compensation - - Other 410,315 406,293 Valuation allowance (674,924 ) (611,182 ) Net deferred tax assets $ - $ - |
9 COMMITMENTS AND CONTINGENCI_2
9 COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Feb. 28, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum base lease payments | Future minimum base lease payments are as follows: Fiscal Year Ending February 28, Amount 2020 $ 253,908 2021 259,000 2022 109,000 Total $ 621,908 |
10 GEOGRAPHIC AREAS (Tables)
10 GEOGRAPHIC AREAS (Tables) | 12 Months Ended |
Feb. 28, 2019 | |
Segment Reporting [Abstract] | |
Geographic sales information | Geographic sales information for the fiscal years ended February 28, 2019 and 2018 is as follows: 2019 2018 United States $ 3,129,556 $ 5,130,357 Asia - 105,568 United Kingdom 20,806 - Canada 2,467 40,291 Other countries 600 3,161 Total $ 3,153,429 $ 5,279,377 _____________ (1) Sales are based on the country of residence of the customer. |
Long lived assets in geographic areas 2019 | Long lived assets at February 28, 2019 are in the following geographic areas: United States China Total Property and equipment, net $ 57,167 $ 60,987 $ 118,154 Other assets 66,670 - 66,670 Total $ 123,837 $ 60,987 $ 184,824 |
Long lived assets in geographic areas 2018 | Long lived assets at February 28, 2018 are in the following geographic areas: United States China Total Property and equipment, net $ 57,264 $ 78,275 $ 135,539 Other assets 66,670 - 66,670 Total $ 123,934 $ 78,275 $ 202,209 |
2. SIGNIFICANT ACCOUNTING POL_4
2. SIGNIFICANT ACCOUNTING POLICIES - Earnings per share (Details ) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Numerator: | ||
Net income (loss) available to common shareholders | $ (240,127) | $ 660,907 |
Weighted average shares - basic | 26,574,313 | 26,574,313 |
Net income (loss) per share - basic | $ (0.01) | $ 0.02 |
Dilutive effect of common stock equivalents: | ||
Warrants | 0 | 0 |
Weighted average shares - diluted | 26,574,313 | 26,574,313 |
Net income (loss) per share - diluted | $ (0.01) | $ 0.02 |
2. SIGNIFICANT ACCOUNTING POL_5
2. SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
FDIC insured limit | $ 250,000 | |
Deposits exceeded insured limits | 1,828,000 | |
Total overhead allocated to inventory | 200,000 | $ 68,000 |
Obsolete inventory | 126,000 | 185,000 |
Impairment charges | 0 | 0 |
Advertising costs | 135,000 | 30,000 |
Research and development costs | $ 4,600 | $ 6,100 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 6,407,221 | 6,407,221 |
Deposits for inventory purchases in China | $ 66,237 | $ 3,067 |
Sales Revenue, Net [Member] | First Customer | ||
Concentrations | 30.00% | 33.00% |
Sales Revenue, Net [Member] | Second Customer | ||
Concentrations | 28.00% | 12.00% |
Sales Revenue, Net [Member] | Third Customer | ||
Concentrations | 11.00% | |
Accounts Receivable [Member] | One Customer | ||
Concentrations | 80.00% | 33.00% |
3 INVENTORY (Details)
3 INVENTORY (Details) - USD ($) | Feb. 28, 2019 | Feb. 28, 2018 |
Inventory Details | ||
Raw materials | $ 382,658 | $ 860,424 |
Finished goods | 589,839 | 137,872 |
Inventory, Net | $ 972,497 | $ 998,296 |
4 PROPERTY AND EQUIPMENT - Summ
4 PROPERTY AND EQUIPMENT - Summary of property and equipment (Details) - USD ($) | Feb. 28, 2019 | Feb. 28, 2018 |
Property, Plant and Equipment [Abstract] | ||
Tooling | $ 424,578 | $ 408,453 |
Equipment | 84,647 | 63,117 |
Computer equipment | 63,520 | 63,520 |
Total of property and equipment | 572,745 | 535,090 |
Less: accumulated depreciation and amortization | (454,591) | (399,551) |
Total | $ 118,154 | $ 135,539 |
4 PROPERTY AND EQUIPMENT (Detai
4 PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | Feb. 28, 2019 | Feb. 28, 2018 |
Fixed Assets outside USA | ||
Tooling and equipment located in China | $ 367,123 | $ 350,998 |
Depreciation expense for assets located outside USA | $ 55,040 | $ 60,232 |
5 CAPITAL LEASE OBLIGATION - Ou
5 CAPITAL LEASE OBLIGATION - Outstanding obligations (Details) - USD ($) | Feb. 28, 2019 | Feb. 28, 2018 |
Debt Disclosure [Abstract] | ||
Capital lease for equipment requiring monthly payments of principal and Interest of $546 through August 2020 bearing interest at an annual rate of 9.5% | $ 10,266 | $ 16,914 |
Total capital lease obligations, principal and interest | 10,266 | 16,914 |
Less amount representing interest | (1,146) | (2,430) |
Total capital lease obligations, principal | 9,120 | 14,484 |
Less current portion | (5,938) | (5,402) |
Long term portion | $ 3,182 | $ 9,082 |
5 CAPITAL LEASE OBLIGATION - Fu
5 CAPITAL LEASE OBLIGATION - Future maturities of the capital lease obligation (Details) | Feb. 28, 2019USD ($) |
Debt Disclosure [Abstract] | |
2020 | $ 5,938 |
2021 | 3,182 |
Total | $ 9,120 |
5 CAPITAL LEASE OBLIGATION (Det
5 CAPITAL LEASE OBLIGATION (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Debt Disclosure [Abstract] | ||
Leased equipment | $ 26,000 | $ 26,000 |
Accumulated depreciation related to leased equipment | $ 13,000 | $ 13,000 |
Useful Life | 5 years |
6 RELATED PARTY TRANSACTIONS (D
6 RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Advances to employees | $ 26,000 | $ 28,600 |
TAM purchase of raw materials on behalf of the comapany | 132,000 | |
Direct commissions to related party | 47,000 | 63,000 |
Receivable from stockholders | 5,000 | 6,000 |
Revenue from related party | 1,063,987 | 659,998 |
Sovereign Earth, LLC | ||
Revenue from related party | 899,000 | 636,000 |
Amazon Seychelle | ||
Revenue from related party | $ 165,000 | $ 24,000 |
7 EQUITY TRANSACTIONS - Summary
7 EQUITY TRANSACTIONS - Summary of warrant activity (Details) - $ / shares | 12 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2017 | |
Warrants Outstanding | |||
Outstanding at beginning | 6,407,221 | 6,407,221 | |
Granted | 0 | 0 | |
Exercised | 0 | 0 | |
Outstanding at end | 6,407,221 | 6,407,221 | |
Vested | 6,407,221 | ||
Exercisable | 6,407,221 | ||
Weighted-Average Exercise Price | |||
Outstanding at beginning | $ 0.21 | $ 0.21 | |
Granted | 0 | 0 | |
Exercised | 0 | 0 | |
Outstanding at end | 0.21 | 0.21 | |
Vested | 0.21 | ||
Exercisable | $ 0.21 | $ 0.21 | $ 0.21 |
7 EQUITY TRANSACTIONS - Summa_2
7 EQUITY TRANSACTIONS - Summary of significant ranges of outstanding warrants as of February 28, 2014 (Details) - $ / shares | 12 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2017 | |
Equity [Abstract] | |||
Execise price | $ 0.21 | ||
Number of warrants outstanding | 6,407,221 | ||
Weighted average remaining life in years | 1 year 7 months 20 days | ||
Weighted Average Execise price | $ 0.21 | $ 0.21 | $ 0.21 |
Warrants Exercisable | |||
Number outstanding | 6,407,221 | ||
Weighted average exercise price | $ 0.21 | $ 0.21 | $ 0.21 |
7 EQUITY TRANSACTIONS (Details
7 EQUITY TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Equity [Abstract] | ||
Intrinsic value of total outstanding warrants | $ 0 | $ 0 |
8 INCOME TAXES (Components of I
8 INCOME TAXES (Components of Income Tax) (Details) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Current: | ||
U.S. federal | $ 0 | $ (2,970) |
State | 0 | 9,667 |
Total current income tax expense (benefit) | 0 | 6,697 |
Deferred: | ||
U.S. federal | 0 | 0 |
State | 0 | 0 |
Total deferred Income tax expense (benefit) | 0 | 0 |
Total | ||
Federal | 0 | (2,970) |
State | 0 | 9,667 |
Total current and deferred tax expense (benifet) | $ 0 | $ 6,697 |
8 INCOME TAXES (Effective Incom
8 INCOME TAXES (Effective Income Tax Rate Reconciliation) (Details) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Income Tax Disclosure [Abstract] | ||
Expected tax (benefit) provision | $ (50,427) | $ 212,520 |
State Income tax (benefit) provision | (13,082) | 40,088 |
Other | (838) | 28,468 |
Change in tax rate | 0 | 282,408 |
Permanent differences | 930 | 1,215 |
Change in valuation allowance | 63,417 | (558,002) |
Income tax provision | $ 0 | $ 6,697 |
8 INCOME TAXES (Deferred Tax As
8 INCOME TAXES (Deferred Tax Assets) (Details) - USD ($) | Feb. 28, 2019 | Feb. 28, 2018 |
Deferred tax assets: | ||
NOL carryforwards | $ 231,649 | $ 158,318 |
Depreciation | (15,715) | (23,600) |
Reserves and accrued expenses | 48,674 | 70,171 |
Stock compensation | 0 | 0 |
Other | 410,315 | 406,293 |
Valuation allowance | (674,924) | (611,182) |
Net deferred tax assets | $ 0 | $ 0 |
8 INCOME TAXES (Details Narrati
8 INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Income Tax Disclosure [Abstract] | ||
Net change in the total valuation allowance | $ 63,417 | $ (558,002) |
Valuation allowance for deferred tax assets | 674,924 | $ 611,182 |
Net operating loss carryovers federal | 770,000 | |
Net operating loss carryovers state | 1,198,000 | |
Discrete net tax expense | $ 282,408 | |
U.S. federal and state income tax rate | 27.00% | 27.00% |
Expiration date | Dec. 31, 2038 | |
Statutory corporate income tax rate | 21.00% | 35.00% |
9 COMMITMENTS AND CONTINGENCI_3
9 COMMITMENTS AND CONTINGENCIES - Future minimum base lease payments (Details) | Feb. 28, 2018USD ($) |
FUTURE MINIMUM BASE LEASE PAYMENTS | |
2020 | $ 253,908 |
2021 | 259,000 |
2022 | 109,000 |
Total | $ 621,908 |
9 COMMITMENTS AND CONTINGENCI_4
9 COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Total rent expense | $ 19,000 | |
Royalties and licensing fees | $ 13,296 | $ 22,651 |
10 GEOGRAPHIC AREAS - Geographi
10 GEOGRAPHIC AREAS - Geographic sales information (Details) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Revenues | $ 3,153,429 | $ 5,279,377 |
United States [Member] | ||
Revenues | 3,129,556 | 5,130,357 |
Asia [Member] | ||
Revenues | 0 | 105,568 |
United Kingdom [Member] | ||
Revenues | 20,806 | 0 |
Canada [Member] | ||
Revenues | 2,467 | 40,291 |
Other countries [Member] | ||
Revenues | $ 600 | $ 3,161 |
10 GEOGRAPHIC AREAS - Long live
10 GEOGRAPHIC AREAS - Long lived assets in geographic areas (Details) - USD ($) | Feb. 28, 2019 | Feb. 28, 2018 |
Property and equipment, net | $ 118,154 | $ 135,539 |
United States [Member] | ||
Property and equipment, net | 57,167 | 57,264 |
Other assets | 66,670 | 66,670 |
Total | 123,837 | 123,934 |
China [Member] | ||
Property and equipment, net | 60,987 | 78,275 |
Other assets | 0 | 0 |
Total | 60,987 | 78,275 |
Assets, Total [Member] | ||
Property and equipment, net | 118,154 | 135,539 |
Other assets | 66,670 | 66,670 |
Total | $ 184,824 | $ 202,209 |