7. INCOME TAXES

6 Months Ended

Aug. 31, 2017

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 7:    INCOME TAXES

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 the income tax valuation allowance.

We recorded a provision for income taxes of $1,800 for the quarter ended August 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 August 31, 2017. Management evaluated both positive and negative evidence.  The weight of negative factors and level of economic uncertainty in our current business continues 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 remains 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.