Nevada
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33-0836954
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(State or other jurisdiction Of incorporation)
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(IRS Employer File Number)
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22 Journey
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Aliso Viejo, California
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92656
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(Address of principal executive offices)
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(zip code)
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Large accelerated filer ☐
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Accelerated filer ☐
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Non-accelerated filer ☐
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Smaller reporting company ☑
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(Do not check if smaller reporting company)
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Emerging growth company ☐
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Page
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|||||
PART I FINANCIAL INFORMATION
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|||||
Item 1.
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Financial Statements
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3
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|||
Condensed Consolidated Balance Sheets
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3
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||||
Condensed Consolidated Statements of Operations
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4
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Condensed Consolidated Statements of Cash Flows
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5
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Notes to Condensed Consolidated Financial Statements
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6
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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10
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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14
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Item 4.
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Controls and Procedures
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14
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Item 4T.
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Controls and Procedures
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14
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PART II OTHER INFORMATION
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|||||
Item 1.
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Legal Proceedings
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15
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Item 1A.
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Risk Factors
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15
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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15
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Item 3.
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Defaults Upon Senior Securities
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15
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Item 4.
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Submission of Matters to a Vote of Security Holders
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15
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Item 5.
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Other Information
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16
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Item 6.
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Exhibits
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16
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Signatures
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17
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May 31,
2017
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February 28,
2017
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||||||
ASSETS
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||||||||
Current assets:
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||||||||
Cash and cash equivalents
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$
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1,347,250
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$
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732,112
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||||
Accounts receivable, net of allowance for doubtful accounts
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||||||||
of $10,092 and $47,600, respectively
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464,153
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905,507
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||||||
Related party receivables
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27,050
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27,200
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||||||
Inventory, net
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1,166,763
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1,421,871
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||||||
Prepaid expenses, deposits and other current assets
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232,137
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282,560
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||||||
Total current assets
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3,237,353
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3,369,250
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Property and equipment, net
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150,318
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164,997
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||||||
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||||||||
Other assets
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239,487
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81,310
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||||||
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||||||||
Total assets
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$
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3,627,158
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$
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3,615,557
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||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
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||||||||
Current liabilities:
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||||||||
Accounts payable and accrued expenses
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$
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339,940
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$
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476,415
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Income taxes payable
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-
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-
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||||||
Customer deposits
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89,538
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99,677
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||||||
Capital lease obligations, current portion
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5,034
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4,047
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||||||
Total current liabilities
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434,512
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580,139
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Long-term liabilities:
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Capital lease obligations, net of current
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11,989
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14,744
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Total liabilities
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446,501
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594,883
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Stockholders' equity:
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Preferred stock, 6,000,000 shares authorized, none issued or outstanding
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-
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-
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||||||
Common stock $0.001 par value, 50,000,000 shares authorized, 26,640,313
issued and outstanding at May 31, 2017 and February 28, 2017,
respectively
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26,641
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26,641
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||||||
Additional paid-in capital
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8,944,368
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8,944,368
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Accumulated deficit
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(5,760,672
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)
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(5,920,655
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)
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Less treasury stock at cost (66,000 shares at May 31, 2017 and February 28, 2017 respectively)
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(29,680
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)
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(29,680
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)
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Total stockholders' equity
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3,180,657
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3,020,674
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Total liabilities and stockholders' equity
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$
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3,627,158
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$
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3,615,557
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For the Three Months Ended
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May 31,
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May 31,
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2017
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2016
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Sales
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$
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1,208,207
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$
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899,134
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Cost of sales
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663,782
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588,485
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Gross profit
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544,425
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310,649
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Operating Expenses
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Selling, General, and Administrative Expenses
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361,090
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1,002,450
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Depreciation and Amortization
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17,675
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22,051
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Total operating expenses
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378,765
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1,024,501
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Income (Loss) from Operations
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165,660
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(713,852
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)
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Other (Expense) Income
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||||||||
Interest income
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-
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9
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Interest expense
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(1,427
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)
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(615
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)
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Other income
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-
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1,782
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Total other (expense) income
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(1,427
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)
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1,176
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|||||
Income (loss) before provision for income taxes
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164,233
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(712,676
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)
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Income tax (expense) benefit
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(4,252
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)
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285,071
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Net income (loss)
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$
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159,981
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$
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(427,605
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)
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BASIC INCOME (LOSS) PER SHARE
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$
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0.01
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$
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(0.02
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)
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DILUTED INCOME (LOSS) PER SHARE
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$
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0.01
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$
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(0.02
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)
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BASIC WEIGHTED AVERAGE NUMBER OF
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SHARES OUTSTANDING
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26,574,313
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26,580,530
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DILUTED WEIGHTED AVERAGE NUMBER OF
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||||||||
SHARES OUTSTANDING
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26,574,313
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26,580,530
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For The Three Months Ended
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May 31,
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May 31,
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2017
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2016
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OPERATING ACTIVITIES:
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Net income (loss)
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$
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159,981
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$
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(427,605
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)
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Adjustments to reconcile net income (loss) to net cash provided by (used) in operating activities:
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Depreciation and amortization
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17,675
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22,051
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Stock-based compensation
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-
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117,500
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Recovery) for doubtful accounts and sales returns
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(36,434
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)
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(103,569
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)
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Deferred tax benefit
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-
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(285,071
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)
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Changes in operating assets and liabilities:
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Decrease in accounts receivable
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477,789
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28,648
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Decrease (increase) in related party receivables
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150
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(5,204
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)
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Decrease (increase) in inventory
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255,108
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(195,928
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)
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Increase in prepaid expenses, deposits and other assets
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(107,754
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)
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(51,054
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)
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Decrease in accounts payable and accrued expenses
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(136,475
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)
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(299,344
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)
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Increase (decrease) in income taxes payable
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-
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(86,274
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)
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(Decrease) increase in customer deposits
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(10,139
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)
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13,481
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Net Cash Provided by (used in) Operating Activities
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619,901
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(1,272,369
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)
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INVESTING ACTIVITIES:
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Purchase of property and equipment
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(2,995
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)
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(22,578
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)
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Net Cash Used In Investing Activities
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(2,995
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)
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(22,578
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)
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FINANCING ACTIVITIES:
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Repayment of capital lease obligation
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(1,768
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)
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(2,680
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)
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Repurchase of treasury stock
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-
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(17,400
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)
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Net Cash Used in Financing Activities
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(1,768
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)
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(20,080
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)
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
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615,138
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(1,315,027
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)
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CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
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732,112
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2,062,873
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CASH AND CASH EQUIVALENTS AT END OF PERIOD
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$
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1,347,250
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$
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747,846
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Supplemental disclosures of cash flow information:
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Cash paid for:
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Interest
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$
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1,427
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$
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615
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Income taxes
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$
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-
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$
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80,000
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For the three months ended
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May 31,
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2017
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2016
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Numerator:
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Net income (loss) available to common shareholders
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$
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159,981
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$
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(427,605
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)
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Weighted average shares – basic
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26,574,313
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26,580,530
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Net income (loss) per share – basic
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$
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0.01
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$
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(0.02
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)
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Dilutive effect of common stock equivalents:
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Warrants
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-
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-
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Weighted average shares – diluted
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26,574,313
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26,580,530
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Net income (loss) per share – diluted
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$
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0.01
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$
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(0.02
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)
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May 31,
2017
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February 28, 2017
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||||||
Raw materials
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$
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798,960
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$
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956,024
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Finished goods
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367,803
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465,847
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||||||
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1,166,763
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1,421,871
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(1) | the portable water filtration industry is in a state of rapid technological change, which can render the Company's products obsolete or unmarketable; |
(2) | any failure by the Company to anticipate or respond to technological developments or changes in industry standards or customer requirements, or any significant delays in product development or introduction, could have a material adverse effect on the Company's business, operating results and financial condition; |
(3) | the Company's cost of sales may be materially affected by increases in the market prices of the raw materials used in the Company's assembly processes; |
(4) | the Company's dependence on a few customers. Sales to these customers are unpredictable and difficult to estimate, and as such, may result in material fluctuations in sales from period to period. Management believes that if future revenues from its significant customers decline, those revenues can be replaced through the sales to other customers. However, there can be no assurance that this will occur, which could result in an adverse effect on the Company's financial condition or results of operations in the future; |
(4) | the Company's water related product sales could be materially affected by weather conditions and government regulations; |
(5) | the Company is subject to the risks of conducting business internationally; and |
(6) | the industries in which the Company operates are highly competitive. Additional risks and uncertainties are outlined in the Company's filings with the Securities and Exchange Commission, including its most recent fiscal 2017 Annual Report on Form 10-K. |
Three-month period ended May 31, 2017 compared to the corresponding period in 2016
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||||||||||||||||
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Year over
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|||||||||||||||
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2017
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2016
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year change
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%
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||||||||||||
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||||||||||||||||
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||||||||||||||||
Sales
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$
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1,208,207
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$
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899,134
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309,073
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34
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%
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|||||||||
Cost of sales
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663,782
|
588,485
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75,297
|
13
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%
|
|||||||||||
Gross profit
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544,425
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310,649
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233,776
|
75
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%
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|||||||||||
Gross profit %
|
45
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%
|
35
|
%
|
||||||||||||
Selling general and administrative expenses
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361,090
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1,002,450
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(641,360
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)
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(64
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)%
|
||||||||||
Depreciation and amortization expense
|
17,675
|
22,051
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(4,376
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)
|
(20
|
)%
|
||||||||||
Other (expense) income
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(1,427
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)
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1,176
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(2,603
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)
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(221
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)%
|
|||||||||
Income (loss) before provision (benefit) for income taxes
|
164,233
|
(712,676
|
)
|
876,909
|
(123
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)%
|
||||||||||
Provision (benefit) for income taxes
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4,252
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(285,071
|
)
|
289,323
|
(101
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)%
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||||||||||
|
||||||||||||||||
Net income (loss)
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159,981
|
(427,605
|
)
|
587,586
|
(137
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)%
|
||||||||||
Net income (loss) %
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13
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%
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(48
|
)%
|
||||||||||||
Earnings per share – basic and diluted
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$
|
0.01
|
$
|
(0.02
|
)
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● |
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
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● |
provide reasonable assurance that the transactions are recorded as necessary to permit the preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
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● |
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
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(1) |
lack of a functioning audit committee and lack of a majority of outside directors on the Company's Board of Directors capable to oversee the audit function;
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(2) |
inadequate segregation of duties due to limited number of personnel, which makes the reporting process susceptible to management override;
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(3) |
insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of GAAP and SEC disclosure requirements;
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(4) |
ineffective controls over period end financial disclosure and reporting processes; and
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Exhibit No.
|
Description
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|
31.1
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Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) (Section 302 of the Sarbanes-Oxley Act of 2002) | |
31.2
|
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) (Section 302 of the Sarbanes-Oxley Act of 2002) | |
32.1
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C.ss.1350 Section 906 of the Sarbanes-Oxley Act of 2002) | |
32.2 | Certification of the Chief Financial Officer pursuant to 18 U.S.C.ss.1350 Section 906 of the Sarbanes-Oxley Act of 2002) | |
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document*
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|
101.INS
|
XBRL Instance Document
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
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|
101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
Seychelle Environmental Technologies, Inc.
|
|
|
|
|
|
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Date: July 17, 2017
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By:
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/s/ Carl Palmer
|
|
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Carl Palmer
Director, Chief Executive Officer
and Chief Financial Officer
|
|
|
(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Registrant.
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Date: July 17, 2017
|
By:
|
/s/ Carl Palmer
|
|
|
|
Carl Palmer
|
|
|
|
Chief Executive Officer
and Chief Financial Officer
|
|
Date: July 17, 2017
|
By:
|
/s/ Carl Palmer
|
|
|
|
Carl Palmer
|
|
|
|
Chief Executive Officer
and Chief Financial Officer
|
|
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Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
May 31, 2017 |
Jul. 13, 2017 |
|
Document And Entity Information | ||
Entity Registrant Name | SEYCHELLE ENVIRONMENTAL TECHNOLOGIES INC /CA | |
Entity Central Index Key | 0001056757 | |
Document Type | 10-Q | |
Document Period End Date | May 31, 2017 | |
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 | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 26,640,313 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2017 |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) |
May 31, 2017 |
Feb. 28, 2017 |
---|---|---|
CURRENT ASSETS | ||
Net of allowance for doubtful accounts | $ 22,200 | $ 125,800 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, authorized shares | 6,000,000 | 6,000,000 |
Preferred stock, issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Preferred stock, par value | $ 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 |
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) |
3 Months Ended | |
---|---|---|
May 31, 2017 |
May 31, 2016 |
|
Condensed Consolidated Statements Of Income | ||
Sales | $ 1,208,207 | $ 899,134 |
Cost of sales | 663,782 | 588,485 |
Gross profit | 544,425 | 310,649 |
OPERATING EXPENSES | ||
Selling, General, and Administrative Expenses | 361,090 | 1,002,450 |
Depreciation and Amortization | 17,675 | 22,051 |
Total operating expenses | 378,765 | 1,024,501 |
Income (Loss) from Operations | 165,660 | (713,852) |
OTHER INCOME (EXPENSE) | ||
Interest income | 9 | |
Interest expense | (1,427) | (615) |
Other income | 1,782 | |
Total other income | (1,427) | 1,176 |
Income (loss) before provision for income taxes | 164,233 | (712,676) |
Income tax benefit (expense) | (4,252) | 285,071 |
Net income (loss) | $ 159,981 | $ (427,605) |
BASIC INCOME (LOSS) PER SHARE | $ 0.01 | $ (0.02) |
DILUTED INCOME (LOSS) PER SHARE | $ 0.01 | $ (0.02) |
BASIC WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING | 26,574,313 | 26,580,530 |
DILUTED WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING | 26,574,313 | 26,580,530 |
1. CONDENSED FINANCIAL STATEMENTS |
3 Months Ended |
---|---|
May 31, 2017 | |
Notes to Financial Statements | |
CONDENSED FINANCIAL STATEMENTS |
NOTE 1: CONDENSED FINANCIAL STATEMENTS
The accompanying condensed consolidated financial statements have been prepared by Seychelle Environmental Technologies, Inc., and subsidiaries (the "Company") without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at May 31, 2017, and for all periods presented herein, have been made.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company's annual report on Form 10-K for the year ended February 28, 2017. The results of operations for the periods ended May 31, 2017 and 2016 are not necessarily indicative of the operating results for the full fiscal years.
The 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 accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the condensed consolidated financial statements and the February 28, 2017 consolidated financials included in the 10-K filed on June 14, 2017.
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.
|
2. MANAGEMENT'S PLAN |
3 Months Ended |
---|---|
May 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
MANAGEMENT'S PLAN |
NOTE 2: MANAGEMENT'S PLAN
As of February 28, 2017, the Company had $732,112 in cash and a backlog of approximately $465,000 in unshipped product.
As of May 31, 2017, the Company had $1,347,250 in cash and cash equivalents, $622,330 in accounts receivable and a backlog of $325,166 in unshipped product. This year, Seychelle products have expanded its sales efforts in the following international markets; Mexico, Sri Lanka, Vietnam, South Korea, Australia, New Zealand, Japan and China . It's our intention to expand our marketing activities more strongly to the international market and E-commerce. In addition, Seychelle is managing cost in line with current revenue.
|
3. BASIC INCOME (LOSS) PER SHARE |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
May 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BASIC INCOME (LOSS) PER SHARE |
NOTE 3: BASIC INCOME (LOSS) PER SHARE
Basic income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during each period presented. Diluted income (loss) per share is determined using the weighted average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, the weighted average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. The dilutive effect of outstanding stock options and warrants is reflected in diluted earnings per share by application of the treasury stock method.
The denominator for diluted income (loss) per share for the period ended May 31, 2017 did not include warrants as they would have been anti-dilutive. At May 31, 2017 and 2016, 0 and 6,407,221 warrants, respectively, were excluded from the denominator for diluted income (loss) per share.
|
4. COMMON STOCK |
3 Months Ended |
---|---|
May 31, 2017 | |
Notes to Financial Statements | |
COMMON STOCK |
NOTE 4: COMMON STOCK
Common Stock During the quarter ended May 31, 2017 and May 31, 2016, 0 and 250,000 shares respectively of restricted stock were issued by the Company to an employee.
During the three months ended May 31, 2016, the Company repurchased 30,000 shares of common stock at a costs of $17,400. This repurchase was recorded as treasury stock and reflected as a reduction of stockholders' equity on the accompanying condensed consolidated balance sheet.
|
5. INVENTORY |
3 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
May 31, 2017 | |||||||||||||||||||||||||||||||||||||
Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||
INVENTORY |
NOTE 5: INVENTORY
The Company's inventory consisted of the following at May 31, 2017 and February 28, 2017:
|
6. CONCENTRATIONS |
3 Months Ended |
---|---|
May 31, 2017 | |
Notes to Financial Statements | |
CONCENTRATIONS |
NOTE 6: CONCENTRATIONS
Sales to one customer accounted for 33% sales for the three month period ended May 31, 2017. Accounts receivable from this customer accounted to approximately $533,000 or 84% of accounts receivable as of May 31, 2017.
Sales to one customer accounted for 42% of sales for the three month period ended May 31, 2016. Accounts receivable from this customer amounted to $147,373 or 49% of accounts receivable as of May 31, 2016.
|
7. RELATED PARTY TRANSACTIONS |
3 Months Ended |
---|---|
May 31, 2017 | |
Notes to Financial Statements | |
RELATED PARTY TRANSACTIONS |
NOTE 7: RELATED PARTY TRANSACTIONS
During the three month periods ended May 31, 2017 and 2016, the Company incurred $0 and $12,500, respectively, for consulting services from TAM Irrevocable Trust ("TAM"), in which Cari Beck is the trustee and current Board member, as well as a daughter of Carl Palmer, an officer and Board member. These amounts are included as a component of selling, general and administrative expenses on the condensed consolidated statements of operations.
During the three months ended May 31, 2016, TAM purchased on behalf of the Company, $7,740 of raw materials from a vendor with which it already had a business relations. All amounts due to TAM had been paid in full as of May 31, 2016.
The Company utilizes the services of an individual, who is a related party, to source materials and provide the manufacturing of component parts with third-party vendors in China. For the three months ended May 31, 2017 and 2016, purchases facilitated through the related party accounted for approximately 13% and 38%, respectively, of total raw material purchases. The Company paid approximately $14,000 and $900 in direct commissions to the related party consultant during the three months ended May 31, 2017 and 2016, respectively.
As of May 31, 2017 and 2016, the Company had receivables due from its CEO of approximately $0 and $17,000 respectively. In addition, the Company had advanced amounts to employees of approximately $27,050 and $28,000 as of May 31, 2017 and 2016, respectively. These amounts are being repaid through direct payroll withdrawals.
|
8. COMMITMENTS AND CONTINGENCIES |
3 Months Ended |
---|---|
May 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES |
NOTE 8: COMMITMENTS AND CONTINGENCIES
In 2016, 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. The Company sub leases its facility in San Juan Capistrano, CA.
|
9. SUBSEQUENT EVENTS |
3 Months Ended |
---|---|
May 31, 2017 | |
Subsequent Events [Abstract] | |
9. SUBSEQUENT EVENTS |
NOTE 9: SUBSEQUENT EVENTS
Management has evaluated subsequent events from May 31, 2017 through the date the condensed consolidated financial statements were issued, and has concluded that no subsequent events have occurred that would require recognition or disclosure in these condensed consolidated financial statements.
|
10. INCOME TAX |
3 Months Ended |
---|---|
May 31, 2017 | |
Income Tax Disclosure [Abstract] | |
10. INCOME TAX |
NOTE 10: INCOME TAX
The Company expects its effective tax rate for the 2018 fiscal year to be different from the federal statutory rate due primarily to a change in valuation allowance.
We recorded a provision for income taxes of $4,252 for the quarter ended May 31, 2017, related to federal and state taxes, based on the Company's expected annual effective tax rate.
Management evaluated the need for a full valuation allowance at the end of the quarter ended May 31, 2017. Management evaluated both positive and negative evidence. The weight of negative factors and level of economic uncertainty in our current business continued to support the conclusion that the realization of our deferred tax assets does not meet the more likely than not standard. Therefore, a full valuation allowance will remain against the net deferred tax assets.
Our federal income tax returns are open to audit under the statute of limitations for the fiscal years ended February 2014 through 2017. We are subject to income tax in California and various other state taxing jurisdictions. Our state income tax returns are open to audit under the statute of limitations for the fiscal years ended February 2014 through 2017. |
2. BASIC INCOME (LOSS) PER SHARE (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
May 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic and Diluted income (loss) per share |
|
5. INVENTORY (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
May 31, 2017 | |||||||||||||||||||||||||||||||||||||
Inventory Tables | |||||||||||||||||||||||||||||||||||||
Inventory |
The Company's inventory consisted of the following at May 31, 2017 and February 28, 2017:
|
3. BASIC INCOME (LOSS) PER SHARE - Basic and Diluted income (loss) per share (Details) - USD ($) |
3 Months Ended | |
---|---|---|
May 31, 2017 |
May 31, 2016 |
|
Numerator: | ||
Net (loss) income available to common shareholders | $ 159,981 | $ (427,605) |
Weighted average shares, basic | 26,574,313 | 26,580,530 |
Net income (loss) per share - basic | $ 0.01 | $ (0.02) |
Dilutive effect of common stock equivalents: | ||
Warrants | ||
Weighted average shares, diluted | 26,574,313 | 26,580,530 |
Net income (loss) per share - diluted | $ 0.01 | $ (0.02) |
5. INVENTORY (Details) - USD ($) |
May 31, 2017 |
Feb. 28, 2017 |
---|---|---|
Inventory Details | ||
Raw materials | $ 798,960 | $ 956,024 |
Finished goods | 367,803 | 465,847 |
Inventory | $ 1,166,763 | $ 1,421,871 |
2. MANAGEMENT'S PLAN (Details Narrative) - USD ($) |
3 Months Ended | 12 Months Ended |
---|---|---|
May 31, 2017 |
Feb. 28, 2017 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Cash | $ 1,347,250 | $ 732,112 |
Accounts receivable | 622,330 | |
Backlog of unshipped product | $ 325,166 | $ 465,000 |
3. BASIC INCOME (LOSS) PER SHARE (Details Narrative) - shares |
3 Months Ended | |
---|---|---|
May 31, 2017 |
May 31, 2016 |
|
Earnings Per Share [Abstract] | ||
Warrants excluded from the denominator for diluted income (loss) per share | 6,407,221 | 6,407,221 |
6. CONCENTRATIONS (Details Narrative) - USD ($) |
3 Months Ended | |
---|---|---|
May 31, 2017 |
May 31, 2016 |
|
Concentrations Details Narrative | ||
Percentage of sales attributable to one customer | 33.00% | |
Percentage of accounts receivable attributable to one customer | 84.00% | |
Accounts receivable from one customers | $ 533,000 | |
Percentage of sales attributable to one other customer | 42.00% | |
Percentage of accounts receivable attributable to one other customer | 49.00% | |
Accounts receivable from one other customers | $ 147,373 |
7. RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) |
3 Months Ended | |
---|---|---|
May 31, 2017 |
May 31, 2016 |
|
Related Party Transactions Details Narrative | ||
Payments to Irrevocable Trust for consulting services in which Cari Beck is a trustee as well as the daughter of the Company's President | $ 0 | $ 12,500 |
Raw materials purchased | $ 7,740 | |
Percentage of purchases facilitated with third party vendor | 13.00% | 38.00% |
Tooling from vendor | $ 3,500 | |
Direct commissions paid to related party consultant | $ 14,000 | 900 |
Receivables due from CEO | 0 | 17,000 |
Receivables due from employees | $ 27,050 | $ 28,000 |
8. COMMITMENTS AND CONTINGENCIES (Details Narrative) |
3 Months Ended |
---|---|
May 31, 2016
USD ($)
| |
Commitments and Contingencies Disclosure [Abstract] | |
Monthly rental amount for five years | $ 19,000 |
10. INCOME TAX (Details Narrative) |
3 Months Ended |
---|---|
May 31, 2017
USD ($)
| |
Income Tax Disclosure [Abstract] | |
Provision for income taxes | $ 4,252 |
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