10-K

UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 FORM 10-K

( X ) ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended February 28, 2018

( ) TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to __________________

Commission File No. 0-29373

Seychelle Environmental Technologies, Inc.

(Exact Name of registrant as specified in its charter)

Nevada	33-0836954
(State or other jurisdiction	(IRS Employer File Number)
Of incorporation)
22 Journey
Aliso Viejo, California	92656
(Address of principal executive offices)	(zip code)

(949) 234-1999

(Registrant's telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Exchange Act: None

Securities Registered Pursuant to Section 12(g) of the Exchange Act:

Common Stock, $0.001 per share par value

Indicate by check mark if registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes []   No [X].

Indicate by check mark if registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.  Yes [] No [X].

Indicate by check mark whether the registrant: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.    Yes [X]  No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months or such shorter period that the registrant was required to submit and post such files.  Yes [X]  No [ ]

Check if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained herein to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K. [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [ ]	Smaller reporting company [X]
(Do not check if a smaller reporting company)
	Emerging growth company [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act   [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) : Yes [ ] No [X]

The number of shares outstanding of the registrant's common stock, as of June 7, 2018 was 26,640,313.

The aggregate market value of the voting stock of the Registrant held by non-affiliates as of August 31, 2017 was approximately $1,886,303.

References in this document to "Seychelle", "us," "we," or "Company" refer to Seychelle Environmental Technologies, Inc., a Nevada corporation and our wholly-owned subsidiaries, Seychelle Water Technologies, Inc. and Fill 2 Pure International, Inc., also Nevada corporations.

TABLE OF CONTENTS

PART I	Page
Item 1. Business	3
Item 1A. Risk Factors	7
Item 1B. Unresolved Staff Comments	12
Item 2. Properties	12
Item 3. Legal Proceedings	12
Item 4. Mine Safety Disclosures	12
PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases       of Equity Securities	13
Item 6. Selected Financial Data	14
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations	14
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	19
Item 8. Financial Statements and Supplementary Data	19
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures	20.
Item 9A. Controls and Procedures	20
Item 9B. Other Information	22
PART III
Item 10. Directors, Executive Officers and Corporate Governance	22
Item 11. Executive Compensation	24
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related      Stockholder Matters	26
Item 13. Certain Relationships and Related Transactions, and Director Independence	27
Item 14. Principal Accounting Fees and Services	27
Item 15. Exhibits, Financial Statement Schedules	29
Signatures	31

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FORWARD-LOOKING STATEMENTS

This report includes forward-looking statements within the meaning of Section 27A of the Securities Act (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We have based these statements on our beliefs and assumptions, based on information currently available to us. These forward-looking statements are subject to risks and uncertainties. Forward-looking statements include the information concerning our possible or assumed future results of operations, our total market opportunity and our business plans and objectives set forth under the sections entitled "Business" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."

Forward-looking statements are not guarantees of performance. Our future results and requirements may differ materially from those described in the forward-looking statements. Many of the factors that will determine these results and requirements are beyond our control. In addition to the risks and uncertainties discussed in "Business" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," investors should consider those discussed under "Risk Factors."

These forward-looking statements speak only as of the date of this report. We do not intend to update or revise any forward-looking statements to reflect changes in our business, anticipated results of our operations, strategy or planned capital expenditures, or to reflect the occurrence of unanticipated events.

PART I

ITEM 1. BUSINESS

History of Seychelle

We are a Nevada corporation. Our principal corporate office address is 22 Journey, Aliso Viejo, California 92656. Our telephone number at this address is 949-234-1999.

We were incorporated under the laws of the State of Nevada on January 23, 1998 as a change of 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.

On January 30, 1998, we entered into an Exchange Agreement with Seychelle Water Technologies, Inc., a Nevada corporation (SWT), whereby we exchanged our issued and outstanding capital shares with the shareholders of SWT on a one share for one share basis. We became the parent company and SWT became a wholly owned subsidiary. SWT had been formed in 1997 to market water filtration systems of Aqua Vision International.

Organization

Our 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 (collectively, the Company or Seychelle). We use the trade name "Seychelle Water Filtration Products, Inc." in our commercial operations.

Business of Seychelle

General

Seychelle designs, assembles and distributes unique, state-of-the-art ionic adsorption micron filters specifically for portable filter devices that remove up to 99.99% of all pollutants and contaminants found in any fresh water source as well as increase the alkalinity of the water up a pH level of 9.5. Seychelle water filtration products address a worldwide problem of access to clean drinking water and makes available low-cost, effective filtration products that will meet the need for safe, great tasting, and high quality drinking water.

Seychelle markets its portable water filtration bottles throughout the world to customers such as individuals, dealers, distributors, non-governmental organizations and emergency relief organizations such as the Jimmy Bakker Ministry. In addition, the Company has donated thousands of portable bottles to church groups and missionaries worldwide during the life of the Company.

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In developing countries, many people in rural areas boil their water for drinking and cooking to kill bacteria, but this process does not remove the pyrogens, chemicals, toxins, volatile organic compounds, heavy metals or other pathogens that remain in the water.  The World Health Organization estimates that approximately 2.2 million people, mostly children in developing nations, die annually from water-related diseases.

Business Plan

The management of Seychelle has substantial experience in developing improvements and innovations in the field of bottled water, reverse osmosis, ultra filtration and filter technology. As a result, our products can deliver up to 2 micron absolute filtration for pennies per gallon, with pressure as low as 2 pounds per square inch (PSI). Further, our point of difference filtration systems removes up to 99.99% of pollutants and contaminants most commonly found in fresh drinking water supplies in the five major areas of concern as follows:

AESTHETICS: Taste, chlorine, sand, sediment and odor problems.

BIOLOGICS: Pathogens such as Cryptosporidium, Giardia and E.Coli Bacteria.

CHEMICALS: Pesticides, detergents, toxic chemicals and industrial waste.

DISSOLVED SOLIDS: Heavy metals such as aluminum, asbestos, copper, lead, mercury and chromium 6.

RADIOLOGICAL:  Cesium 134 & 137, Radon, Radium, Uranium, Radioactive Iodine, etc.

New pH Product which increases the alkalinity of source water up to 9.5 pH level or more.

Seychelle filters have been tested by independent and government laboratories. Selected results from the United States are displayed on our Website at www.seychelle.com, but such information included on our website is not incorporated into this filing.  The benefit of such filtration can save lives worldwide as more people become aware of the benefits of using products utilizing Seychelle's proprietary portable water filtration technology.

Principal Products or Services and Their Markets

Current Products

Seychelle has a varied line of portable filter bottles for people on the go. The current products include: Flip-Top and Pull Top bottles, Canteens, Water Pitchers, Pure Water Pump, Stainless Steel bottles, In-Line Filter, Pure Water Bag, Pump N' Pure, Pure Water Pouch and   Pure Water Straws.  They include regular, standard or advanced filters (for virus and bacteria control up to 99.99% reduction). Sizes are from 20 ounces to 42 ounces, and provide up to 150 gallons of pure drinking water from any fresh water source; running or stagnant (such as rivers, lakes, ponds and streams).

New Products

Product design is a constant focus and all products are reviewed annually.

Manufacturing

The Company has determined that the production and assembly of some of our product components in China and Mexico through the use of third-party contract manufacturers at a lower cost than in the U.S. will still maintain equivalent quality standards.  However, our proprietary filter will continue to be manufactured in the U.S.  The assembly of all our products is completed at our facility in Aliso Viejo, California.

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Sales Channels

Sales channels pursued include: retail, missionaries, multi-level marketing, international, OEM and joint ventures. Several distributors sell the Company's portable water filtration products to customers in specific distribution channels; including: retail, multi-national corporations, foundations and sports.

Raw Materials

Seychelle's filters include powdered, activated coconut and other media as components in the porous plastic ionic filter. To date, we believe there is an adequate availability of material for all of our products. We do not expect this situation to change in the near future.

Customers and Competition

Seychelle products compete against companies offering water filtration and bottled water including (1) bottled water, (2) portable water filtration systems and (3) home water treatment systems provided by suppliers (such as independent dealers, distributors, catalogs, internet sellers, etc.) in the form of reverse osmosis systems, distillation, and filtration systems.  Therefore, Seychelle's portable and home filtration products compete in a limited segment of the drinking water market as an alternative to other sources of filtered or purified drinking water.

Seychelle has a negligible share of the world's filtered or purified water market. Our products sell in a niche category of the market - portable filtration bottles that use powder-activated carbon filters that compete with our powder-activated coconut filters with various media called ionic adsorption micron filtration technology (IAMF) which remove many organic and inorganic contaminants that simple activated carbon filters cannot. Most powder activated carbon filters on the market remove Chlorine, sediment and dirt thus improving taste and odor, as well as a handful of other contaminants such as Lead, Mercury, Zinc and Copper. This would include leading brands such as Brita, PUR, General Electric and Culligan, who collectively dominate the home market. In the portable segment of the market, there are hundreds of small companies selling a variety of specialized filters, with no one company having a majority share and no industry data available. We believe that our current share of this market is negligible.

Seychelle sells its products in two ways. First, it sells its own brand to individuals, dealers, distributors, multilevel marketing companies and missionaries on a direct basis. Second, the Company offers specially designed products to the same customers as a private label supplier if purchasers buy in significant volume. In some instances, we may supply only filters for their bottles or hydration backpacks as opposed to complete products.

Currently, the majority of our sales are to customers in the U.S. For the year ended February 28, 2018, we had three U.S. based customers that accounted for 56% of our total sales.  For the year ended February 28, 2017, we had three U.S. based customers that accounted for 53% of our total sales.

Backlog

As of February 28, 2018, and February 28, 2017, we had a backlog of approximately $395,000 and $465,000, respectively in unshipped orders.

Employees

As of February 28, 2018, we had a President and one (1) executive employee managing the Company with five (5) administrative employees supporting that effort.  In assembly, operations and warehousing we had seventeen (17) full-time employees and one (1) part-time employee.

As of February 28, 2017, we had a President and one (1) executive employee managing the Company with six (6) administrative employees supporting that effort.  In assembly, operations and warehousing we had twenty six (26) full-time employees and one (1) part-time employee working to fill orders.

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Proprietary Information and Technology

We previously held two patents, which have expired. The first patent was for the portable water filtration system with the filter cap assembly, Patent # 5,914,045. The second patent, Patent #6,058,971, was for a quick connect diverter valve. 

We have filed and received approval for five trademarks with the United States Patent and Trademark Office which were granted:  Seychelle®, which has been used in commerce since 1997, along with Pres 2 Pure, Fill 2 Pure, pH20 Plus and Aq-RO-matic.

We have a trade name, "Seychelle Water Filtration Products, Inc.," which we use in our commercial operations.

Government Regulation

We are not, as a company, subject to any material governmental regulation or approvals. However, our products are subject to inspection and evaluation by regulatory authorities that have jurisdiction over water quality standards. Such authorities are on the federal, state, and local level, both in the United States and overseas, where we market our products. Most of our products have already been inspected and evaluated by all applicable governmental authorities in the areas in which we operate or plan to operate in the near future. With respect to our current focus of operations, we do not know if governmental regulation will have a material impact on us in the future.

Research and Development

We did not spend a significant amount for research and development activities during the fiscal year ended February 28, 2018.  

Environmental Compliance

At the present time, Seychelle is not subject to any material costs for compliance with any environmental laws. With respect to our current focus of operations, we do not know if environmental compliance will have a material impact on us in the future.  

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ITEM 1A. RISK FACTORS

THE OWNERSHIP AND INVESTMENT IN OUR SECURITIES INVOLVES SUBSTANTIAL RISKS. OUR COMMON SHARES SHOULD BE PURCHASED ONLY BY PERSONS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THESE RISKS RELATING TO OUR COMPANY.

We Have Been Profitable for Six of Our Eight Most Recent Fiscal Years. However, We Cannot Guarantee That We Will Continue to Conduct Profitable Operations. We were profitable for our most recent fiscal year.

We recorded a net loss and negative cash flows from operations for the most recent fiscal year ending February 28, 2017. We had the following (loss) income for the years ending:

	Net Income (Loss)
February 28, 2018	$	660,907
February 28, 2017	$	(2,147,224	)
February 29, 2016	$	1,032,941
February 28, 2015	$	(1,405,909	)
February 28, 2014	$	506,797
February 28, 2013	$	635,883
February 29, 2012	$	197,986
February 28, 2011	$	1,711,790

While we believe that we have had a successful operating history, we cannot guarantee that we will continue to be profitable.  If we do not continue to be profitable, we may go out of business, and an investor could lose their entire investment.

We Have a Significant Dependence on a Few Customers.

During the fiscal year ended February 28, 2018, the Company had three customer who accounted for approximately 33%, 12% and 11% (or 56%) of total sales during the fiscal year ended February 28, 2018.  As of February 28, 2017, the Company had three customers who accounted for approximately 36%, 9% and 8% (or 53%) of total sales during the fiscal year ended February 28, 2017.  One of those customers accounted for approximately 33% and 60% of net accounts receivable as of February 28, 2018 and February 28, 2017, respectively.  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.

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The Water Filtration Business is Subject to Intense Competition and Subject to Numerous Risks. Many of Our Competitors Have Substantially Greater Capabilities and Resources and May be Able to Develop and Commercialize Products Before We Do.

The water filtration business is highly competitive with many companies having access to the same market. Technological competition from larger and more established companies is significant and expected to increase. Most of the companies with which we compete and expect to compete have far greater capital resources and significant research and development staffs, marketing and distribution programs and facilities, and many of them have substantially greater experience in the production and marketing of products. Our ability to compete effectively may be adversely affected by the ability of these competitors to devote greater resources to the sale and marketing of their products than we can. In addition, one or more of our competitors may succeed or may already have succeeded in developing technologies and products that are more effective than any of those we currently offer or are developing. In addition, there can be no guarantee that we will be able to protect our technology from being copied or infringed upon. There can be no assurance that we will have the necessary resources to be competitive. Therefore, investors should consider an investment in us to be an extremely risky venture.

As an Organization, We are Dependent Upon Technology for the Development of Our Products.

We are operating in a business that requires continuing research, development and testing efforts. There can be no assurance that new products will not render our products obsolete or non-competitive at some time in the future.

Our Success as an Organization Depends, in Large Part, Upon Our Ability to Protect Our Intellectual Property Rights. While We Have Several Items of Intellectual Property, Our Two Patents Have Expired.

We hold trademarks and a tradename, but our two patents have expired.  We cannot at this time estimate the financial impact of the expiration of these patents to Seychelle. In general, vigorous protection and pursuit of intellectual property rights or positions characterize our industry, which has resulted in significant and often protracted and expensive litigation. Therefore, our competitors may assert that our technologies or products infringe on their patents or proprietary rights. Problems with patents or other rights could increase the cost of our products or delay or preclude new product development and commercialization by us. If infringement claims against us are deemed valid, we may not be able to obtain appropriate licenses on acceptable terms or at all. Litigation could be costly and time-consuming but may be necessary to protect our technology license positions or to defend against infringement claims.

Our Success is Dependent Upon the Decision Making of Our Directors and Executive Officers.

Our directors and executive officers have made a full commitment to our business. The loss of any or all of these individuals could have a materially adverse impact on our operations because we have no succession plan for any of them. We will depend on our senior executive officers as well as other key personnel.  If any key employee decides to terminate his employment with us, this termination could delay the commercialization of our products or prevent us from sustaining our profitability. Competition for qualified employees is intense among companies in our industry and the loss of qualified employees, or an inability to attract, retain and motivate additional highly skilled employees required for the expansion of our activities, could hinder our ability to successfully develop and maintain marketable products. 

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Our Board of Directors and the Majority of the Shares of the Company is Under the Complete Control of Mr. Carl Palmer.

The Board of Directors is completely under the control of Mr. Carl Palmer. The current Board of Directors consists of Mr. Palmer, his daughter, Mrs. Cari Beck, her husband and Mr. Palmer's son-in-law, Mr. John Beck, Gary Hess and Jenevieve Fisher.

Further, as a result of his control of the majority of the shares of the Company and its Board of Directors, it must be assumed that all final decisions of the Company will ultimately be made solely by Mr. Palmer. The amount of outside input and advice which Mr. Palmer will utilize, including that from the two independent directors, can be expected to be entirely within his sole discretion.

The Acquisition of Other Technologies Could Result In Operating Difficulties, Dilution and Other Harmful Consequences.  

We may selectively pursue strategic acquisitions, any of which could be material to our business, operating results and financial condition.  Future acquisitions could divert management's time and focus from operating our business.  In addition, integrating an acquired technology is risky and may result in unforeseen operating difficulties and expenditures.

The anticipated benefits of future acquisitions, if consummated, may not materialize.  Future acquisitions or dispositions could result in potentially dilutive issuances of our equity securities, including our common stock, the incurrence of debt, contingent liabilities, or write-offs of intellectual properties any of which could harm our financial condition.  Future acquisitions may also require us to obtain additional financing, which may not be available on favorable terms or at all.

We Face Risks Associated With Currency Exchange Rate Fluctuations.  

Although we currently transact business primarily in U.S. dollars, a large portion of our revenues and related cost of goods sold may be determined in foreign currencies if we continue to expand our international operations.  Conducting business in currencies other than U.S. dollars subjects the Company to fluctuations in currency exchange rates that could have a negative impact on our reported operating results.  Fluctuations in the value of the U.S. dollar relative to other currencies may impact our revenue, cost of goods sold and operating gross margin, and result in foreign currency translation gains and losses.  Historically, we have not engaged in exchange rate hedging activities.

Changes to Financial Accounting or Other Standards May Affect Our Operating Results and Cause Us To Change Our Business Practices.    

We prepare our consolidated financial statements in accordance with generally accepted accounting principles, or GAAP, in the United States.  These accounting principles are issued by the Financial Accounting Standards Board (FASB).  The Securities and Exchange Commission also provides interpretation, guidance and principles in the preparation of financial statements.  A change in those policies could have a significant effect on our reported results and may affect our reporting of transactions completed before a change is announced.

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If We Fail in Maintaining Effective Internal Control Over Financial Reporting, The Price of Our Common Stock May be Adversely Affected.  

We are required to establish and maintain appropriate internal control over financial reporting.  Failure to establish those controls, or any failure of those controls once established, could adversely impact our public disclosure regarding our business, financial condition or results of operations.  In addition, our future assessments of internal control over financial reporting may identify additional weaknesses and conditions that need to be addressed in our internal control over financial reporting or other matters that may raise concerns for investors.  Any material weaknesses that needs to be addressed in management's assessment of our internal control over financial reporting or in the report on the effectiveness of our internal controls by our independent registered public accounting firm, when, and if, applicable, may have an adverse impact of our common stock.

If We Fail to Comply with Section 404 of the Sarbanes-Oxley Act of 2002 in a Timely Manner, Our Business Could Be Harmed and Our Stock Price Could Decline.  

Rules adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 require management's annual assessment of our internal control over financial reporting.  The standards that must be met for the management to assess the internal control over financial reporting as effective are complex, and require significant documentation, testing, and possible remediation to meet the detailed standards.  We have incurred significant expenses and we devote resources to Section 404 compliance on an ongoing basis.  In the event that our Chief Executive Officer/Chief Financial Officer determine that our internal control over financial reporting is not effective as defined under Section 404, we cannot predict how regulators will react on how the market prices of our shares will be affected, however, we believe that there is a risk that investor confidence and share value may be negatively impacted.

Maintaining and Improving Our Financial Controls and The Requirements Of Being a Public Company May Strain Our Resources, Divert Management's Attention, and Affect Our Ability to Attract and Retain Qualified Members For Our Board of Directors.  

As a public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934 and the Sarbanes-Oxley Act of 2002.  The requirements of these rules and regulations increase our legal, accounting, and financial compliance costs, make some activities more difficult, time-consuming and costly, and may also place undue strain on our personnel, systems, and resources.  The Sarbanes-Oxley Act of 2002 requires, among other things, that we maintain effective disclosure controls and procedures and internal controls over financial reporting.  Fulfilling this requirement can be difficult to achieve and maintain.

As a result, management's attention may be diverted from other business concerns, which could harm our business, operating results and financial condition.  These efforts also involve substantial costs.

We May be Impacted By the Implementation of Regulatory Requirements as a Result of the Passage of the Dodd-Frank Act.

In July, 2010, Congress enacted the Dodd-Frank Act, which instituted major changes in the regulatory regime for public companies. At the present time, we do not believe that Seychelle will be impacted in a material way by this legislation. However, the implementation of the provisions of the Dodd-Frank Act is subject to regulations which have not yet been written and its statutory provisions have not been the subject of extensive judicial review, so we cannot guarantee that we may not come under its purview at some point in the future and be affected negatively by it.

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Our Articles of Incorporation and Bylaws Could Discourage Acquisition Proposals, Delay a Change in Control, or Prevent Other Transactions.

Provisions of our articles of incorporation and bylaws, as well as provisions of the Nevada Business Corporation Act, may discourage, delay or prevent a change in control of our Company that you as a stockholder may consider favorable and may be in your best interest. Our certificate of incorporation and bylaws contain provisions that:

• authorize the issuance of "blank check" preferred stock that could be issued by our Board of Directors to increase the number of outstanding shares and discourage a takeover attempt;

•  Limit who may call special meetings of stockholders.

Our Stock Price Can Be Volatile.

The future market price of our common stock could fluctuate widely because of:

• future announcements about our Company or our competitors, including the results of testing, technological innovations or new commercial products;

• negative regulatory actions with respect to our potential products or regulatory approvals with respect to our competitors' products;

• changes in government regulations;

• developments in our relationships with our partners including customers, vendors and distributors;

• developments affecting our partners; including customers, vendors and distributors;

• our failure to acquire or maintain proprietary rights to the products we develop;

• litigation; and

• public concern as to the safety of our products.

The stock market has experienced price and volume fluctuations that have particularly affected the market price for many emerging companies. These fluctuations have often been unrelated to the operating performance of these companies. These broad market fluctuations may cause the market price of our common stock to be lower or more volatile than otherwise expected.

Buying Penny Stocks is Very Risky and Speculative. The Applicability of the "Penny Stock Rules" to Broker-dealer Sales of Our Common Stock Will Have a Negative Effect on the Liquidity and Market Price of Our Common Stock.

Trading in our shares is subject to the "penny stock rules" adopted pursuant to Rule 15g-9 of the Securities and Exchange Act of 1934, as amended, which apply to companies that are not listed on an exchange and whose common stock trades at less than $5.00 per share or which have a tangible net worth of less than $5,000,000 or $2,000,000 if we have been operating for three or more years. The penny stock rules impose additional sales practice requirements on broker-dealers which sell such securities to persons other than established customers and institutional accredited investors. For transactions covered by this rule, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser's written consent to the transaction prior to sale. Consequently, the penny stock rules will affect the ability of broker-dealers to sell shares of our common stock and may affect the ability of shareholders to sell their shares in the secondary market, as compliance with such rules may delay and/or preclude certain trading transactions. The rules could also have an adverse effect on the market price of our common stock.

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These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for our common stock. Many brokers may be unwilling to engage in transactions in our common stock because of the added disclosure requirements, thereby making it more difficult for stockholders to dispose of their shares. You will also find it difficult to obtain accurate information about, and/or quotations as to the price of our common stock.

We have added a stock broker to create or maintain a market in our common stock, which could favorably impact the price and liquidity of our securities.

We Do Not Expect to Pay Dividends on Our Common Stock.

We have not paid any cash dividends with respect to our common stock, and it is unlikely that we will pay any dividends on our common stock in the foreseeable future, as we are a growth company.

ITEM 1B. UNRESOLVED STAFF COMMENTS

A smaller reporting company is not required to provide the information in this Item.

ITEM 2. PROPERTIES

The Company has a lease agreement for its corporate offices, inventory and production facility at 22 Journey in Aliso Viejo, Ca.  The lease has a term of 5 years at a monthly rental of approximately $20,000.

We hold trademarks and a tradename, we previously held two patents which are now expired. We currently hold no patents.

ITEM 3. LEGAL PROCEEDINGS

The Company may be, from time to time, involved in legal proceedings in the normal course of business.  The Company is involved in the following legal proceedings as of February 28, 2018 which would be deemed material:

On March 27, 2017, the Company received a Notice of Filing of Discrimination complaint in the Superior Court of the State of California, County of Orange by a former employee.  The Company also received on June 5, 2017, a Request for Entry of Default filed to Superior Court of California, County of Orange by the same employee. The matter is currently set for trial on June 25, 2018.  The case is in the discovery phase.  The Company believes that the complaint is completely without merit and plan to vigorously contest the matter.

Another pending action is 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 early discovery and no trial date is set.  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.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Principal Market or Markets

Our Common Stock began trading in 1997 on the OTC Bulletin Board ("OTCBB").  Since the consummation of trading our common stock, market makers and other dealers have provided bid and ask quotations of our Common Stock under the symbol "SYEV." We were de-listed from the OTCBB in 2002 and were traded on the "Pink Sheets" from December 2002 to March 11, 2008, when we were re-listed on the OTCBB. The table below represents the range of high and low bid quotations of our common stock as reported during the reporting period herein. The following bid price market quotations represent prices between dealers and do not include retail markup, markdown, or commissions; hence, they may not represent factual transactions.  As of June 6, 2018, the common stock had a closing bid price of $0.2201 per share.

Fiscal Year 2018	High Bid			Low Bid
Quarter Ended:
First Quarter May 2017		$	0.15		$	0.15
Second Quarter August 2017		$	0.19		$	0.19
Third Quarter November 2017		$	0.17		$	0.10
Fourth Quarter February 2018		$	0.27		$	0.26

Fiscal Year 2017	High Bid			Low Bid
Quarter Ended:
First Quarter May 2016		$	0.53		$	0.51
Second Quarter August 2016		$	0.20		$	0.20
Third Quarter November 2016		$	0.24		$	0.24
Fourth Quarter February 2017		$	0.17		$	0.17

Approximate Number of Holders of Common Stock

As of February 28, 2018, there were approximately 354 shareholders on record of our common stock.

Dividends

Holders of our common stock are entitled to receive such dividends as may be declared by our Board of Directors. We paid no dividends on our common stock during the periods reported herein nor do we anticipate paying such dividends in the foreseeable future.

- 13 -

ITEM 6. SELECTED FINANCIAL DATA

A smaller reporting company is not required to provide the information in this Item.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion summarizes the significant factors affecting the operating results, financial condition, liquidity and cash flows of the Company and its subsidiaries as of and for the fiscal years ended February 28, 2018 and February 28, 2017.  The discussion and analysis that follows should be read together with the consolidated financial statements of Seychelle Environmental Technologies, Inc. and the notes to the consolidated financial statements included elsewhere in this annual report on Form 10-K.  Except for historical information, the matters discussed in this section are forward looking statements that involve risks and uncertainties and are based upon judgments concerning various factors that are beyond the Company's control.

Application of Critical Accounting Policies and Estimates

Our consolidated financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. These estimates and assumptions are affected by management's application of accounting policies.

Critical accounting policies for us include our accounting for inventory reserves, allowance for doubtful accounts and sales returns reserves, share based payment arrangements and determination of the valuation allowance for deferred tax assets.

Inventory Reserves

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 market value of the inventory.  This requires significant judgments including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for our business, and the period over which cash flows will occur. 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.  

Allowance for Doubtful Accounts and Sales Returns Reserves

The Company analyzes its current accounts receivable portfolio and sales returns in accordance with FASB Accounting Standards Codification (ASC) Topic 605, Revenue Recognition. Estimates for potential uncollectible accounts receivable and sales returns are based on a variety of factors, the age of the receivable, historical payment patterns, and actual return experience of specific products or similar products. The Company also reviews its estimates for product returns based on expected return data communicated to us by customers and historical experience.  Management is able to make reasonable and reliable estimates of its allowance for doubtful accounts and product returns based on our history in this business.

- 14 -

Income Taxes

We account for income taxes using the asset and liability method under which deferred tax assets or liabilities are calculated at the balance sheet date using current tax laws and rates in effect for the year in which the differences are expected to affect taxable income.  Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized.

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 elected to adopt the guidance beginning in fiscal 2019 using the modified retrospective approach. The Company is performing as assessment of the impact of adoption of this guidance, including required disclosures with assistance from an outside subject matter expert. Although our evaluation is not yet finalized, management believes that the impact of adopting the standard on our consolidated financial statements and related disclosures will not be material.

In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)," which will require lessees to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. Lessor accounting is similar to the current model, but updated to align with certain changes to the lessee model and the new revenue recognition standard. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating the potential impact this standard will have on our consolidated financial statements and related disclosures.

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.

Results of Operations

Our summary historical financial data is presented in the following table to aid you in your analysis.  You should read this data in conjunction with this section entitled Management's Discussion and Analysis of Financial Condition and Results of Operations, our consolidated financial statements and the related notes to the consolidated financial statements included elsewhere in this annual report.  The selected financial data below for the fiscal years ended February 28, 2018 and February 28, 2017 are derived from our consolidated financial statements included elsewhere in this annual report.

- 15 -

Fiscal year ended February 28, 2018 compared to the corresponding period in fiscal 2017.

Selected Financial Data

	Years Ended
	February 28,			February 28,						Percentage
	2018			2017			Difference			Change
Sales	$	5,279,377		$	4,378,436		$	900,941			21	%
Cost of sales		2,802,565			3,303,274			(500,709	)		(15	%)
Gross profit		2,476,812			1,075,162			1,401,650			130	%
Gross profit percentage		47	%		25	%		156	%
Selling, general and administrative expenses		1,614,885			2,414,225			(799,340	)		(33	%)
Impairment of intangible assets		-			50,000			(50,000	)		(100	%)
Legal expenses		162,425			374,103			(211,679	)		(57	%)
Depreciation and amortization		60,232			80,781			(20,549	)		(25	%)
Income (loss) from operations		639,270			(1,843,947	)		2,483,217			(135	%)
Interest income		-			28			(28	)		(100	%)
Interest expense		(4,394	)		(1,640	)		(2,754	)		168	%
Other income		32,728			475			32,253			6790	%
Income (loss) before income taxes		667,604			(1,845,084	)		2,512,688			(136	%)
Income (loss) before income taxes percentage		13	%		(42	%)		291	%
Provision for income taxes		(6,697	)		(302,140	)		295,433			(98	%)
Net income (loss)		660,907			(2,147,224	)		2,808,131			(131	%)
Net income (loss) percentage		13	%		(49	%)		356	%
Net income (loss) per share - basic and diluted	$	0.02		$	(0.08	)
Net cash provided by (used in) operating activities		1,369,179			(1,276,231	)
Net cash used in investing activities		(21,151	)		(27,092	)
Net cash used in financing activities		(4,307	)		(27,438	)

Sales.  Sales increased to $5,279,377 during the fiscal year ended February 28, 2018 from $4,378,436 during the year ended February 28, 2017.  The increase of 21% is primarily due to increasing sales of our bottle, portable retail, pitcher products and straw.

Cost of sales and gross profit percentage.  As a percentage of sales, the gross profit margin during the year ended February 28, 2018 increased to 47% from 25% due to Company managing cost in line with revenue.  The product mix and timing of significant sales is always an important factor in the resulting profit margins reported.  The Company believes that the average gross margin percentages overall can decrease to a range around approximately 40% in the foreseeable future.

- 16 -

Legal expenses.  The decrease in legal expenses of $211,679 is due to fees for employment matters/product design and performance not recurring in 2018.

Impairment of intangible assets. The Company did not record any impairment charge during the fiscal year ended February 28, 2018.  The Company recorded an impairment charge of $50,000 the balance of purchased intellectual property from a related party for $150,000 in fiscal year ended February 28, 2017.

Selling, general and administrative. The selling, general and administrative expenses decreased $799,340, or (33%), from prior year. This decrease was a direct result of the decrease in personnel costs incurred in reductions of the Company's management and Board of Directors.

Interest income and expense. Interest income and expense was relatively consistent from year to year.

Other income and expense.  Other income and expense increased $32,253, or 6790%.

Provision for income taxes.   The Company recorded an income tax expense of $6,697 with pretax income of $667,603.  In the fiscal year ended February 28, 2017 the company recorded an income tax provision of $302,140. 

Net Income (loss).  The net income for the year ended February 28, 2018 is $660,907 compared to the net (loss) for the year ended February 28, 2017 of $2,147,224 ($0.02 income per basic share and $0.02 per diluted share).

- 17 -

CONTRACTUAL OBLIGATIONS, COMMITMENTS AND OFF BALANCE SHEET ARRANGEMENTS

The Company has various contractual obligations, which are recorded as liabilities in the consolidated financial statements. Other items, such as certain lease agreements are not recognized as liabilities in our consolidated financial statements but are required to be disclosed. For example, the Company is contractually committed to make certain minimum lease payments to rent its current corporate location.

The following table summarizes our significant contractual obligations on an undiscounted basis as of February 28, 2018 and the future periods in which such obligations are expected to be settled in cash or converted into the Company's common stock. In addition, the table reflects the timing of principal payments on outstanding borrowings. Additional details regarding these obligations are provided in footnotes, as referenced below:

	Total		Less Than 1 Year		1- 3 Years		3-5 Years		More Than 5 Years
Accounts payable and accrued liabilities	$	450,948	$	450,948	$	-	$	-	$	-
Customer deposits		163,184		163,184		-		-		-
Capital lease		5,403		4,047		1,356		-		-
Other contractual commitments (1)		868,816		246,908		512,908		109,000		-
Total contractual obligations	$	1,488,351	$	865,087	$	514,264	$	109,000	$	-
(1) Office lease commitments expiring July 2021 and equipment lease expiring in fiscal year 2020.

Liquidity and capital resources.

Net cash provided by (used in) operating activities. During the fiscal years ended February 28, 2018, the Company had cash provided by operating activities of $1,369,179 compared to cash used in operating activities of $1,276,231 in the comparable prior period. During the year ended February 28, 2018, the Company had a net income of $660,907 compared to year ended February 28, 2017 the Company had a net loss of $2,147,224.

Net cash used in investing activities. The Company spent approximately $21,000 on capital expenditures compared to approximately $27,000 in the comparable prior period.  Cash used in investment during the year ended February 28, 2018 was for the purchase of  additional tooling and molding to increase production capacity and also for shop equipment.

- 18 -

Net cash used in financing activities.  In fiscal 2018 and 2017, the Company repaid $4,307 in capital leases payable. In fiscal 2017, we also repurchased 30,000 shares of common stock for a cost of $17,400.

As of February 28, 2018, the Company has unrestricted cash and cash equivalent of approximately $2,076,000 and a backlog of approximately $395,000 in orders to fill.  

Capital expenditures.

We do not expect any major capital expenditures in fiscal 2018.  However, minor purchases of additional molds or tooling may be needed to expand our product line.  We will be able to fund these purchases from cash on hand and we will not require outside financing.

Employees.

As of February 28, 2018, we had a President and one (1) executive employee with five (5) administrative employees supporting that effort.  In assembly, operations and warehousing we had seventeen (17) full-time employees and one (1) part-time employee.

As of June 8, 2018, our employees consisted of a President and one (1) executive employee with four (4) administrative employees supporting that effort. In assembly, operations and warehousing we had sixteen (16) full-time employees and one (1) part time employee.

Any seasonal aspects

We have not experienced seasonal spikes in our sales as a result of our very limited retail store distribution and our sales are not subject to material seasonal fluctuation.

 Off-Balance Sheet Arrangements: None

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

A smaller reporting company is not required to provide the information in this Item.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

- 19 -

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Seychelle Environmental Technologies, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Seychelle Environmental Technologies, Inc. and its subsidiaries (the Company) as of February 28, 2018 and 2017, the related consolidated statements of operations, stockholders' equity and cash flows for the years then ended, and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of February 28, 2018 and 2017, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Squar Milner LLP

We have served as the Company's auditor since 2016.

Newport Beach, California

June 8, 2018

F-1

SEYCHELLE ENVIRONMENTAL TECHNOLOGIES, INC.

Consolidated Balance Sheets

ASSETS
	February 28,			February 28,
	2018			2017
CURRENT ASSETS
Cash and cash equivalents	$	2,075,833		$	732,112
Accounts receivable, net of allowance for doubtful accounts of $8,617 and $47,600 respectively		829,790			905,507
Related party receivable		35,007			27,200
Inventory, net		998,296			1,421,871
Prepaid expenses, deposits and other current assets		159,980			282,560
Total current assets		4,098,906			3,369,250
PROPERTY AND EQUIPMENT, NET		135,539			164,997
OTHER ASSETS
Other assets		66,670			81,310
TOTAL ASSETS	$	4,301,115		$	3,615,557
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	441,866		$	476,415
Customer deposits		163,184			99,677
Capital lease obligations, current portion		5,402			4,047
Total current liabilities		610,452			580,139
LONG-TERM LIABILITIES
Capital lease obligations, net of current portion		9,082			14,744
Total long-term liabilities		9,082			14,744
Total liabilities		619,534			594,883
Commitments and contingencies (Note 10)
STOCKHOLDERS' EQUITY
Preferred stock, 6,000,000 shares authorized,
none issued or outstanding		-			-
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		(5,259,748	)		(5,920,655	)
Less treasury stock at cost 66,000 shares		(29,680	)		(29,680	)
Total stockholders' equity		3,681,581			3,020,674
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	4,301,115		$	3,615,557

The accompanying notes are an integral part of these consolidated financial statements.

F-2

SEYCHELLE ENVIRONMENTAL TECHNOLOGIES, INC.

Consolidated Statements of Operations

	For the Year Ended
	February 28,			February 28,
	2018			2017
SALES	$	5,279,377		$	4,378,436
COST OF SALES		2,802,565			3,303,274
GROSS PROFIT		2,476,812			1,075,162
Selling, general and administrative expenses		1,614,885			2,414,225
Impairment of intangible assets (Note 5)		-			50,000
Legal expenses		162,425			374,103
Depreciation and amortization		60,232			80,781
Total operating expenses		1,837,542			2,919,109
INCOME (LOSS) FROM OPERATIONS		639,270			(1,843,947	)
Interest income		-			28
Interest expense		(4,394	)		(1,640	)
Other income		32,728			475
Total other income (expense)		28,334			(1,137	)
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES		667,604			(1,845,084	)
Provision  for income taxes		(6,697	)		(302,140	)
NET INCOME (LOSS)	$	660,907		$	(2,147,224	)
NET INCOME (LOSS) PER SHARE
Basic	$	0.02		$	(0.08	)
Diluted	$	0.02		$	(0.08	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
Basic		26,574,313			26,574,313
Diluted		26,574,313			26,574,313

The accompanying notes are an integral part of these consolidated financial statements.

F-3

Consolidated Statements of Stockholders' Equity

For the Years Ended February 28, 2017 and February 29, 2016

	Common Stock Shares		Amount		Treasury Stock Shares		Amount			Additional Paid-In Capital		Accumulated Deficit			Total
Balance at February 28, 2016		26,390,313	$	26,391		36,000	$	(12,280	)	$	8,827,118	$	(3,773,431	)	$	5,067,798
Stock-based compensation		250,000		250		-		-			117,250		-			117,500
Treasury stock at cost		-		-		30,000		(17,400	)		-		-			(17,400	)
Net loss		-		-		-		-			-		(2,147,224	)		(2,147,224	)
Balance at February 28, 2017		26,640,313		26,641		66,000		(29,680	)		8,944,368		(5,920,655	)		3,020,674
Net income		-		-		-		-			-		660,907			660,907
Balance at February 28, 2018		26,640,313	$	26,641		66,000	$	(29,680	)	$	8,944,368	$	(5,259,748	)	$	3,681,581

The accompanying notes are an integral part of these consolidated financial statements.

F-4

SEYCHELLE ENVIRONMENTAL TECHNOLOGIES, INC.

Consolidated Statements of Cash Flows

	February 28, 2018			February 28, 2017
CASH FLOW FROM OPERATING ACTIVITIES:
Net income (loss)	$	660,907		$	(2,147,224	)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization		60,232			80,777
Loss on disposal of assets		-			5,587
Impairment of intangible assets		-			50,000
Stock-based compensation		-			117,500
Provision (recovery of) for doubtful accounts		37,911			(47,063	)
Deferred tax		-			(468,282	)
Increase in valuation allowance on deferred tax assets		-			1,081,998
Changes in operating assets and liabilities:
Accounts receivable		37,806			(634,209	)
Related party receivable		(7,807	)		12,375
Inventory		423,575			1,089,587
Prepaid expenses, deposits and other current assets		137,220			(232,779	)
Accounts payable and accrued expenses		(34,549	)		61,189
Income taxes payable		-			(317,145	)
Customer deposits		63,507			71,458
Net Cash Provided by (Used In) Operating Activities		1,369,802			(1,276,231	)
CASH FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(30,774	)		(27,092	)
Net Cash Used in Investing Activities		(30,774	)		(27,092	)
CASH FROM FINANCING ACTIVITIES:
Purchase of treasury stock		-			(17,400	)
Repayment of capital lease obligations		(4,307	)		(10,038	)
Net Cash Used in Financing Activities		(4,307	)		(27,438	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		1,343,721			(1,330,761	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		732,112			2,062,873
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	2,075,833		$	732,112
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
CASH PAID DURING THE YEAR FOR:
Interest	$	4,395		$	1,640
Income taxes	$	-		$	237,295

The accompanying notes are an integral part of these consolidated financial statements.

F-5

SEYCHELLE ENVIRONMENTAL TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements

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.

Description of Business

The Company designs, assembles and distributes water filtration systems. These systems include portable water bottles, pumps, home-use pitchers, and related water filtration products that can be filled from nearly any available source of fresh water. 

Management's Plan

As of February 28, 2018, the Company had approximately $2,076,000 in cash and cash equivalents and a backlog of approximately $395,000 in unshipped product.

Seychelle has been continuing to develop innovative marketing and product concepts for water purification for the world.  The demand is expanding rapidly due to the health concerns caused by extensive contamination of drinking water by major industrial, agriculture and natural causes.  Seychelle continues to develop new technologies that remove contaminants such as lead, Chromium and others to create products for both here in the U.S. and also around the world to ensure safe drinking water.  With the growing interest for higher alkaline water, referred to as pH, Seychelle now includes a full line of products that meets these demands.

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.

Our cash requirements relate primarily to working capital needed to operate and grow our business, including funding operating expenses, growth in inventory and servicing clients, and continued development and expansion of our products.  Our ability to achieve profitability and meet future liquidity needs and capital requirements will depend upon numerous factors, including the timing and quantity of product orders and shipments; the timing and amount of our operating expenses; the timing and costs of product service requirements; the extent to which our products gain market acceptance; the timing and costs of product development and introductions; the extent of our ongoing and any new research and development programs; and changes in our strategy or our planned activities.

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 and have been consistently applied in the preparation of the consolidated financial statements herein as of and for the years ended February 28, 2018 and February 28, 2017.

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 (collectively, the Company or Seychelle). 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 the allowance for doubtful accounts and sales returns, inventory reserves and the deferred income tax valuation allowance. Actual results could differ from those estimates.

F-6

SEYCHELLE ENVIRONMENTAL TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements

NOTE 2:   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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 $1,826,000 as of February 28, 2018.

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

The Company recognizes revenue when persuasive evidence of an arrangement exists, products are shipped and title has passed, the price to the buyer is fixed or determinable and collectability is reasonably assured.  These criteria are typically met when the product is shipped. Revenue is not recognized at the time of shipment if these criteria are not met.  Certain of the Company's sales include a right for the customer to return the product if they are not satisfied.  The Company has an unconditional return policy for the first 90 days.  Customers may return the product for a full refund, or they may receive a replacement at no charge. The same policy applies to any product sold from the period 91 days after purchase to one year, for any defects in materials or workmanship.  In accordance with FASB ASC Topic 605, Revenue Recognition, the Company makes periodic assessments of return activity and if necessary records a reserve for product returns.

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, 2018 and February 28, 2017 amounted to approximately $68,000 and $234,000, 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 reserve for excess and obsolete inventory amounted to approximately $185,000 and $416,000 as of February 28, 2018 and February 28, 2017, 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.

Intangible Assets

Intangible assets include intellectual property and trademarks. All trademarks are capitalized and amortized over the economic useful lives using the straight-line method.  The Company assesses whether there has been a permanent impairment of the value of intangible assets by considering factors such as expected future product revenues, anticipated product demand and prospects, and other economic factors.

F-7

SEYCHELLE ENVIRONMENTAL TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements

NOTE 2:   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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. The Company recorded an impairment charge for certain intangible assets in the amount of $50,000 for the year ended February 28, 2017.

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 $30,000 and $2,300 for the fiscal years ended February 28, 2018 and February 28, 2017, 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 $6,100 and $1,200 for the fiscal years ended February 28, 2018 and February 28, 2017, respectively. These costs are included in selling, general and administrative expenses in the accompanying consolidated statements of operations.

F-8

SEYCHELLE ENVIRONMENTAL TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements

NOTE 2:   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Stock-Based Compensation

The Company follows FASB ASC Topic 718, Compensation – Stock Compensation, which establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services, primarily focusing on accounting for transactions where an entity obtains services in share based payment transactions. ASC 718 requires entities to measure the cost of services received in exchange for equity instruments, including restricted stock, based on the grant date fair value of the award and to recognize it as compensation expense over the period services are to be provided, usually the vesting period.

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.

The Company's fair value calculations for stock based compensation awards have been based on the following assumptions relates to year end February 28, 2018.

Expected life in years	7
Stock price volatility	244%
Risk free interest rate	2.9%
Expected dividends	None

The assumptions used in the Black-Scholes model referred to above are based upon the following data: (1) The expected life of the option or warrant is estimated by considering the contractual term, the vesting period and the expected exercise date. (2) The expected stock price volatility of the underlying shares over the expected life is based upon historical share price data. (3) The risk free interest rate is based on published U.S. Treasury Department interest rates for the expected life. (4) Expected dividends are based on historical dividend data and expected future dividend activity.

Income Taxes

The Company utilizes the asset and liability method of accounting for income taxes.  The asset and liability method requires 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".  ASC 740-10-25 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  It also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.  

Income (Loss) Per Common Share

Basic net income (loss)  per common share is computed by dividing net (loss) income by the weighted average number of outstanding common shares during each of the periods presented. Diluted net income per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents, assuming the conversion, exercise, or issuance of all potential common stock equivalents unless the effect is to reduce a loss or increase the income per share. If the inclusion of common stock equivalents in the weighted average number of common shares outstanding would be anti-dilutive these items would be omitted from the calculation of net income (loss) per common share. The dilutive effect of outstanding stock options and warrants is reflected in diluted earnings per share by application of the treasury stock method.

F-9

SEYCHELLE ENVIRONMENTAL TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements

NOTE 2:   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

	For the year ended
	February 28,		February 28,
	2018		2017
Numerator:
Net income (loss) available to common shareholders	$	660,907	$	(2,147,224	)
Weighted average shares – basic		26,574,313		26,574,313
Net  income (loss) per share – basic	$	0.02	$	(0.08	)
Dilutive effect of common stock equivalents:
Warrants		-		-
Weighted average shares – diluted		26,574,313		26,574,313
Net income (loss) per share – diluted	$	0.02	$	(0.08	)

For the year ended February 28, 2018 and 2017, 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" price.

Concentrations

The Company utilizes the services of two individuals, one of which is a related party and one of which is third-party, in China to source materials and the manufacturing of component parts with third-party vendors in China. As of February 28, 2018 and February 28, 2017, the Company had deposits for inventory purchases in China of approximately $8,067 and $3,000, respectively.

For the year ended February 28, 2018, we had 3 customers that accounted for 33%, 12% and 11% (or 56%).  As of February 28, 2017 we had three customer that accounted for 36%, 9% and 8% (or 53%) of our total sales.  One of these customers accounted for 33% and 68% as of February 28, 2018 and February 28, 2017 of net accounts receivable.

F-10

SEYCHELLE ENVIRONMENTAL TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements

NOTE 2:   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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 elected to adopt the guidance beginning in fiscal 2019 using the modified retrospective approach. The Company is performing as assessment of the impact of adoption of this guidance, including required disclosures with assistance from an outside subject matter expert. Although its evaluation is not yet finalized, management believes that the impact of adopting the standard on our consolidated financial statements and related disclosures will not be material.

In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)," which will require lessees to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. Lessor accounting is similar to the current model, but updated to align with certain changes to the lessee model and the new revenue recognition standard. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the potential impact this standard will have on its consolidated financial statements and related disclosures.

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.

NOTE 3:   INVENTORY

The Company's inventory consisted of the following at February 28, 2018 and February 28, 2017:

	February 28, 2018		February, 28 2017
Raw materials	$	860,424	$	1,059,482
Finished goods		137,872		362,389
Net inventory	$	998,296	$	421,871

F-11

SEYCHELLE ENVIRONMENTAL TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements

NOTE 4:   PROPERTY AND EQUIPMENT

The following is a summary of property and equipment at February 28, 2018 and February 28, 2017:
	February 28,				February 28,
	2018				2017
Tooling		$	408,453			$	380,529
Equipment			63,117				60,268
Computer equipment			63,520				63,520
Leasehold equipment			-				-
			535,090				504,317
Less: accumulated depreciation and amortization			(399,551	)			(339,320	)
Total		$	135,539			$	164,997

Fixed assets outside the United States included approximately $350,998 and $330,000 in tooling and equipment, at cost, located in various third party locations which manufacture the Company's component parts at February 28, 2018 and February 28, 2017, respectively. Depreciation expense included in operating expenses were $60,232 and $79,434 for the fiscal years ended February 28, 2018 and February 28, 2017, respectively.

NOTE 5:    INTANGIBLE ASSETS

The following is a summary of intangible assets at February 28, 2018 and February 28, 2017:

	February 28,			February 28,
	2018			2017
Intellectual property	$	-		$	-
Trademarks		24,100			24,100
Patents		22,560			22,560
		46,660			46,660
Less: accumulated amortization		(46,660	)		(46,660	)
Total	$	-		$	-

Intangible assets are amortized over their estimated useful economic lives of five years. Amortization expense related to intangibles was approximately $0 and $1,100 during the fiscal years ended February 28, 2018 and February 28, 2017, respectively.  During the year ended February 28, 2017, the Company identified that revenue related to the one specific product for this patent did not materialize and recorded an impairment charge in the amount of $50,000.

We previously held two patents, which have expired.  The first patent was for the portable water filtration system with the filter cap assembly.  The second patent was for a quick connect diverter valve.  We currently hold no patents.

F-12

SEYCHELLE ENVIRONMENTAL TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements

NOTE 6:    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, 2018 and February 28, 2017, and is depreciated on a straight-line basis over 5 years. Total accumulated depreciation related to the leased equipment was $13,000 and $7,800 as of February 28, 2018 and February 28, 2017, respectively. Obligations outstanding as of February 28, 2018 and February 28, 2017 consisted of the following:

		February 28, 2018			February 28, 2017
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%		16,914			22,918
Total capital lease obligations, principal and interest		16,914			22,918
Less amount representing interest		(2,430	)		(4,127	)
Total capital lease obligations, principal		14,484			18,791
Less current portion		(5,402	)		(4,047	)
Long term portion	$	9,802		$	14,744

Future maturities of the capital lease obligation as of February 28, 2018 are:

Fiscal Year Ending
February 28,	Amount
2019		5,402
2020		5,938
2021		3,144
Total	$	14,484

 

NOTE 7:   RELATED PARTY TRANSACTIONS

The Company paid consulting fees to the Company's primary shareholder (the TAM Irrevocable Trust ("TAM Trust"), in which Cari Beck is the trustee and current Board member, as well as a daughter of Carl Palmer, an officer and Board member) totaling $0 and $37,350 during the years ended February 28, 2018 and February 28, 2017, respectively, which are included as a component of selling, general and administrative expenses on the consolidated statements of operations.

During the years ended February 28, 2018 and February 28, 2017, TAM Trust purchased, on behalf of the Company, approximately $132,000 and $77,000, respectively, of raw materials from a vendor with which it already had a business relationship.

The Company paid commission to Carl Palmer's brother-in-law for sourcing raw materials with third-party vendors in China.  The Company paid approximately $63,000 and $18,000 in direct commissions to the related party during the fiscal years ended February 28, 2018 and February 28, 2017, respectively.

The Company had advanced amounts to employees of approximately $28,600 and $27,200 as of February 28, 2018 and February 28, 2017. These amounts are being repaid through direct payroll withdrawals.

The Company had receivable from stockholders of approximately $6,000 and $0 as of February 28,2018 and February 28, 2017, respectively.

The Company had sales to two companies related to a member of the Board of Directors.  Specifically, sales to Sovereign Earth, LLC (dba Revolve) totaled approximately $636,000 and $265,000 for fiscal years February 28, 2018 and February 28, 2017, respectively and sales to Amazon Seychelle totaled approximately $24,000 and $0 for fiscal years February 28, 2018 and February 28, 2017, respectively.  Sovereign Earth, LLC (dba Revolve) shall be the sole and exclusive seller of the following products in worldwide markets, including Amazon World Marketplaces:  amazon.com, amazon.co uk, amazon.de, amazon.fr, amazon.jp, amazon, it, amazon.ca, amazon.cn, amazon.in, and amazon.com.mx for the duration of the agreement:  Generation#1 Filter Pitcher:  All filter iterations (regular, standard, advanced, radiological, extreme, supreme, etc.)

F-13

SEYCHELLE ENVIRONMENTAL TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements

NOTE 8:   EQUITY TRANSACTIONS

Restricted Stock Grants

During the year ended February 28, 2017, 250,000 shares of fully vested restricted common stock were issued by the Company to an employee.  The shares were valued at the closing price of the Company's common stock at the date of the grant for a total expense of $117,500. 

During the year ended February 28, 2017, the Company repurchased 30,000 shares of common stock at a cost of  $17,400.  This repurchase has been recorded as treasury stock and reflected as a reduction of stockholders' equity.

Warrants

A summary of warrant activity for the fiscal years ended February 28, 2018 and February 28, 2017 is shown below.

			Weighted-
			Average
	Warrants		Exercise
	Outstanding		Price
Outstanding at March 1, 2016		6,407,221		0.21
Granted		-		-
Exercised		-		-
Forfeited		-		-
Outstanding at February 28, 2017		6,407,221		0.21
Granted		-		-
Exercised		-		-
Outstanding at February 28, 2018		6,407,221		0.21
Vested at February 28, 2018		6,407,221		0.21
Exercisable at February 28, 2018		6,407,221		0.21

The following table summarizes significant ranges of outstanding warrants as of February 28, 2018:

		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		2.79		$0.21		6,407,221		$0.21

As of February 28, 2018 and February 28, 2017 the total outstanding warrants had an intrinsic value of $0.

F-14

SEYCHELLE ENVIRONMENTAL TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements

NOTE 9:   INCOME TAXES

Income tax expense (benefit) consists of the following:

	Current			Deferred		Total
Year ended February 28, 2018:
U.S. federal	$	(2,970	)		-		(2,970	)
State		9,667			-		9,667
Total income tax expense (benefit)	$	6,697			-		6,697
Year ended February 28 2017:
U.S. federal	$	(261,967	)		501,492		239,525
State		(25,884	)		88,498		62,614
Total income tax expense	$	(287,851	)		589,990		302,139

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 40% to pretax income (loss) for the years ended February 28, 2018 and February 28, 2017 as follows:

	2018			2017
Expected tax (benefit) provision	$	212,520		$	(627,328	)
State Income tax (benefit) provision		40,088			(105,566	)
Other		28,468			(46,965	)
Change in tax rate		282,408			-
Permanent differences		1,215			-
Change in valuation allowance		(558,002	)		1,081,998
Income tax provision	$	6,697		$	302,139

Deferred tax assets are as follows:

	February 28,			February 28,
	2018			2017
Deferred tax assets:
NOL carryforwards	$	158,318		$	379,326
Depreciation		(23,600	)		(80,545	)
Reserves and accrued expenses		70,171			202,471
Stock compensation		-			645,673
Other		406,293			75,728
Valuation allowance		(611,182	)		(1,222,653	)
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.

F-15

SEYCHELLE ENVIRONMENTAL TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements

NOTE 9:   INCOME TAXES (CONTINUED)

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 is 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.
We recorded the effects of the TCJA for year ended February 28, 2018 using our best estimates and the information available to us through the date the financial statements were issued. However, our analysis is ongoing and as such, the income tax effects that we have recorded are provisional.

The valuation allowance for deferred tax assets as of February 28, 2018 and February 28, 2017 $611,182 and $1,222,653, respectively.  The net change in the total valuation allowance was an increase of $558,002 and $1,081,998 for the years ended February 28, 2018 and February 28, 2017, 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, 2018.

At February 28, 2018, the Company had unused net operating loss carryovers of approximately $496,000 and $927,000 for federal and state tax purposes, respectively, which expires beginning in 2037. 

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, 2018 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 2014 through 2017 for federal purposes and fiscal years 2013 through 2017 for state purposes.

NOTE 10:    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
2019	$	246,908
2020		253,908
2021		259,000
2022		109,000
Total	$	868,816

F-16

SEYCHELLE ENVIRONMENTAL TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements

NOTE 10:    COMMITMENTS AND CONTINGENCIES (CONTINUED)

Legal Proceedings

The Company was involved in litigation or legal proceedings as of February 28, 2018.  On March 27, 2017, the Company received a Notice of Filing of Discrimination complaint in the Superior Court of the State of California, County of Orange by a former employee.  The Company also received on June 5, 2017, a Request for Entry of Default filed to Superior Court of California, County of Orange by the same employee. The matter is currently set for trial on June 25, 2018.  The.case is in the discovery phase.  The Company believes that the complaint is completely without merit and plan to vigorously contest the matter.

Another pending action is 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 early discovery and no trial date is set.  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 years ended February 28, 2018 and February 28, 2017, the Company paid $22,651 and $12,500, respectively, in royalties and licensing fees related under these agreements.

NOTE 11:   GEOGRAPHIC AREAS

The Company sells its products throughout the United States and internationally. Geographic sales information for the fiscal years ended February 28, 2018 and February 28, 2017 is as follows:

	2018		2017
United States	$	5,130,357	$	4,099,466
Asia		105,568		158
Greece		-		-
United Kingdom		-		14,944
New Zealand		-		91,971
Australia		-		50,615
Canada		40,291		38,971
Other countries		3,161		82,311
Total	$	5,279,377	$	4,378,436

_____________

(1)    Sales are based on the country of residence of the customer.

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

F-17

SEYCHELLE ENVIRONMENTAL TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements

NOTE 11:   GEOGRAPHIC AREAS (CONTINUED)

Long lived assets at February 28, 2017 are in the following geographic areas:

	United States		China		Total
Property and equipment, net	$	75,909	$	89,088	$	164,997
Other assets		81,310		-		81,310
Total	$	157,219	$	89,088	$	246,307

NOTE 12:   SUBSEQUENT EVENTS

Management has evaluated events subsequent to February 28, 2018 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, no material events were identified that require adjustment to the financial statements or additional disclosure.

F-18

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

We did not have any disagreements on accounting and financial disclosures with our present independent registered public accounting firm during the reporting periods.

ITEM 9A. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file with the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and that such information is accumulated and communicated to our management, including our principal executive and financial officers, as appropriate, to allow for timely decisions regarding required disclosure. As required by Rule 15d-15(b) of the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our management, including our principal executive and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this report.  Based on the foregoing, our principal executive and principal financial officer concluded that our disclosure controls and procedures are not effective to ensure the information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed and reported within the time periods specified in the SEC's rules and forms.

Management's Annual Report on Internal Control over Financial Reporting

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. The Company's internal control over financial reporting is a process designed under the supervision of the Company's Chief Executive Officer and Principal Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company's financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America (US GAAP) and includes those policies and procedures that:

● pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

● 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;

● 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;

● pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

● 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

● 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.

- 20 -

Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company.

Management has used the framework set forth in the report entitled Internal Control-Integrated Framework (2013) published by the Committee of Sponsoring Organizations of the Treadway Commission, known as COSO, to evaluate the effectiveness of our internal control over financial reporting. Based on this assessment, management has concluded that our internal control over financial reporting was not effective as of February 28, 2018.

A material weakness is a deficiency, or combination of deficiencies, that results in more than a remote likelihood that a material misstatement of annual or interim financial statements will not be prevented or detected. In connection with the assessment described above, management identified the following control deficiencies that represent material weaknesses at February 28, 2018:

(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;

(2) inadequate segregation of duties due to limited number of personnel, which makes the reporting process susceptible to management override;

(3) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of GAAP and SEC disclosure requirements;

(4) ineffective controls over period end financial disclosure and reporting processes; and

Management believes that the material weaknesses set forth in items (1) through (4) above did not have an effect on the Company's financial reporting during the year ended February 28, 2018.

We are committed to improving our financial organization. As part of this commitment, we plan to prepare and implement sufficient written policies and checklists which will set forth procedures for accounting and financial reporting with respect to the requirements and application of GAAP and SEC disclosure requirements.

We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that permit us to provide only management's report in this annual report.

Changes in Internal Control over Financial Reporting

There was no change in internal control over financial reporting (as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) during our fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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ITEM 9B. OTHER INFORMATION

NONE

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Our Directors and Executive Officers as of May 29, 2018, their ages and positions held in the Company are as follows:

Carl Palmer	84	Chief Executive Officer ("CEO"), President, Chief Financial Officer and Director
Cari Beck	57	Secretary-Treasurer, HR Manager and Director
John Beck	59	Director
Gary Hess	57	Director
Jenevieve Fisher	47	Director

Our Directors have served and will serve in such capacity until the next annual meeting of our shareholders and until their successors have been elected and qualified. The officers serve at the discretion of our Directors. The Board of Directors as a whole serve as the audit committee.  The Board of Directors has determined that each of its members is able to read and understand fundamental financial statements and has substantial business experience that results in that member's financial sophistication.  Accordingly, our Board of Directors believes that each of its members has sufficient knowledge and experience necessary to fulfill the duties and obligations that an audit committee would have.  Mr. Carl Palmer is the father and father-in-law of Ms. Cari Beck and Mr. John Beck, respectively. Ms. Cari Beck and Mr. John Beck are wife and husband.  Gary Hess and Jenevieve Fisher were elected as Board of Directors effective July 19, 2016.  None of the Directors have been involved in the types of litigation specified in Item 401d of Regulation S-B.

Biographies of Our Executive Officers and Directors

Carl Palmer. Mr. Palmer is the President, Chief Executive Officer (CEO), Chief Financial Officer (CFO) and a Director of the Company. He was the founder of our Company in 1998, innovator of the complete line of Seychelle water filtration products and primary spokesperson worldwide. He is an internationally recognized expert in the field for over 40 years and pioneered the development of the reverse osmosis (RO) home and office pure water business in the U.S. in the late 1970's. That company, Aq-Ro-Matic, was later sold to Coca-Cola in 1973. He developed the cellulose triacetate membrane, a breakthrough technological development in the industry and subsequently, created and sold pure water companies to Coca Cola Los Angeles as noted previously, AMF/Cuno in 1985 and Shaklee in 1989. Also, in the late 1980's Mr. Palmer developed the Best Water reverse osmosis business for Shaklee and sold over $53 million in above-the-counter systems. Carl's 30 years of direct sales experience has led to many significant business relationships, many of which continue today. He is the inventor of thirteen patented products related to water purification. Mr. Palmer received a Bachelor's Degree from Whittier College.

- 22 -

Cari Beck. Secretary-Treasurer, HR Manager and Director. From 1992-2002, Mrs. Beck worked as the production coordinator for Krystal Enterprises, one of the largest limousine manufacturers in the world.  During her time at Krystal Enterprises, Mrs. Beck worked collaboratively with major US auto manufacturers to purchase chassis for limousine production.  She was responsible for coordinating all aspects of production and accounts receivable to ensure timely delivery and satisfaction to the customer.  She was instrumental in coordinating the preparation, organization and set up for all quarterly trade shows.  Mrs. Beck worked directly with the Executive Vice President handling the company's national accounts and maintaining inventory levels on all finished products. During her tenure, Krystal Enterprises grew from a company producing 20 vehicles to 150 monthly. For the past seven years Mrs. Beck has consulted for Seychelle (in her role as the trustee of the TAM Trust), with a focus on manufacturing, assembly and process control. Ms. Beck became a Director in April 2016.

John Beck. Mr. Beck currently holds the position of Vice President of Operations at Grech Motors, a private company.  He has a history of being a part of a team working to help companies grow.  From 1976-1986, Mr. Beck worked for Quality Bowling Corporation where he started as the sixth employee hired and finished his time there as a purchasing agent in a company that had grown to over 40 employees. In 1983, Mr. Beck purchased his first limousine and started a part-time limousine venture that led to a 30-year career with Krystal Enterprises, a private company.  His responsibilities included sales, marketing, and substantial input on design and production.  Over his 30 years at Krystal Enterprises, sales grew from $150,000 a month during the early 1980's to approximately $10 million a month in sales during the late 1990's.  After Krystal Enterprises was sold in 2011, Mr. Beck retired.  Not long after retiring he began consulting and then was hired on as the Vice President of Operations for Grech Motors. Mr. Beck became a Director in May 2016.

Jenevieve Fisher. Ms. Fisher has been devoted, since the age of twenty-two, to helping others negotiate the challenges of dealing with a diagnosis of cancer.  As a cancer survivor of Hodgkin's disease, she has committed herself to bringing health education, encouragement and hope to those living with cancer and their families.  She has been an avid supporter of the American Cancer Society, the Leukemia and Lymphoma Society and the National Childhood Cancer Foundation.  She is also a member of the Society of Children's Book Writers and Illustrators, as well as the Northwest Christian Writer's Association.  She has written and film over one hundred health videos.

Gary Hess. Mr. Hess has sixteen years of experience in the water filtration business.  For the past eleven years, he has managed his own engineering firm, Hess & Associates, which specializes in industrial water reclamation with a focus on removing heavy metals and environmental toxins from process water.  His company services and supports some of the largest military Printed Circuit Board manufacturers in the U.S., treating in excess of 2 million gallons of water per day using proprietary chemistry, procedures and equipment.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's directors and executive officers, and persons who own more than 10% of a registered class of the Company's outstanding equity securities to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Officers, directors and greater than 10% shareholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.

To the Company's knowledge, there were no Section 16(a) filing requirements applicable to its officers, directors or greater than 10% beneficial owners for the fiscal year ended February 28, 2018.

Code of Ethics for Chief Executive Officer and Senior Financial Officers

On May 20, 2006, the Board of Directors of the Company adopted the Code of Ethics for the Chief Executive Officer and Senior Financial Officers.  The Code is designed to deter wrong-doing and promote honest and ethical behavior, full, fair, timely, accurate and understandable disclosure and compliance with applicable governmental laws, rules and regulations.  It is also designed to encourage prompt internal reporting of violations of the Code to an appropriate person and provides for accountability for adherence to the Code.  We will provide to any person without charge, upon written request to our principal executive offices, a copy of our Code.  Any waiver of the Code pertaining to one of our executive officers will be disclosed in a report on Form 8-K filed with the SEC.

Indemnification of Directors and Officers.

The Company's Bylaws provide that it will indemnify its officers and directors to the full extent permitted by Nevada state law. The Company's bylaws likewise provide that it will indemnify and hold harmless its officers and directors for any liability including reasonable costs of defense arising out of any act or omission taken on behalf of the Company, to the full extent allowed by Nevada law, if the officer or director acted in good faith and in a manner the officer or director reasonably believed to be in, or not opposed to, the best interests of the corporation.

- 23 -

In so far as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

Item 11.  EXECUTIVE COMPENSATION

The following table sets forth the Summary Compensation Table for the President and the executive officers at the end of the last three completed fiscal years. Compensation does not include minor business-related and other expenses paid by us.   

SUMMARY COMPENSATION TABLE

											Long Term Compensation
		Annual Compensation									Awards					Payouts
(a)	(b)	(c)			(d)			(e)			(f)			(g)		(h)			(i)
								Other			Restricted			Securities					All
								Annual			Stock			Underlying		LTIP			Other
Fiscal		Salary			Bonus			Compensation			Award(s)			Option/SARs		Payouts			Compensation
Name and Principle Position	Year	($)			($)			($)			($)				(#)	($)			($)
Carl Palmer	2018		$	120,875		$	0.00		$	0.00		$	0.00		0.00		$	0.00		$	0.00
President, CEO, CFO	2017			45,250			0.00			0.00			0.00		0.00			0.00			0.00
Director	2016			45,000			80,000			0.00			0.00		0.00			0.00			0.00
Cari Beck (1)	2018			43,781			0.00			0.00			0.00		0.00			0.00			0.00
HR Manager/Sec-Treasurer	2017			8,219			0.00			0.00			0.00		0.00			0.00			0.00
Director	2016			0.00			0.00			0.00			0.00		0.00			0.00			0.00
James Place(2)	2018			0.00			0.00			0.00			0.00		0.00			0.00			0.00
Former COO and CFO	2017			48,103			0.00			0.00			0.00		0.00			0.00			0.00
2016			$	40,874		$	0.00		$	0.00		$	0.00		0.00		$	0.00		$	0.00

_________________

(1) Elected to Board of Directors during April 2016.

(2) Resigned as an Officer and Director in October, 2016.

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OPTION/SAR GRANTS IN LAST FISCAL YEAR. The Company granted no options during the fiscal year ended February 28, 2018. The Company had no options outstanding as of the fiscal year ended February 28, 2018 and February 28, 2017

AGGREGATED OPTIONS/SARS EXERCISED IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES. There were no outstanding options as of the fiscal year ended February 28, 2018.

EMPLOYMENT CONTRACTS WITH EXECUTIVE OFFICERS.  Effective April 18, 2016, Mr. Carl Palmer entered into an employment agreement with the Company. The term of each agreement is for a period of five years from the date of the employment agreement. Mr. Carl Palmer will be paid the sum of $120,000 per year plus customary employee benefits for the period of the employment agreement. Also effective April 18, 2016, Mr. James Place, a former Officer and Director, entered into an employment agreement with the Company. The term of each agreement is for a period of five years from the date of the employment agreement. Mr. Place will be paid the sum of $60,000 per year plus customary employee benefits for the period of the employment agreement. He also retains his previously issued warrants.

DIRECTOR COMPENSATION. Total Director compensation was $164,656 for FY 2018, $101,572 for FY 2017 and $165,874 for FY 2016. This does not include compensation to Mr. Gary Hess who became a Director in FY 2017 and received a total of $22,651 for FY18 and $12,500 for FY17 under royalty agreement in that year.

The Board of Directors as a whole act as a compensation committee. We have no retirement, pension, sharing, stock option, insurance or other similar programs.

We do not have a separately designated audit, compensation or nominating committee of our Board of Directors.   We are not a "listed company" under SEC rules and are therefore not required to have separate committees comprised of independent directors.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following sets forth the number of shares and warrants of our $0.001 par value common stock beneficially owned by (i) each person who, as of June 7, 2018, was known by us to own beneficially more than five percent (5%) of its common stock; (ii) our individual Directors and (iii) our Officers and Directors as a group. As of June7, 2018 there were a total of 26,640,313 common shares issued and outstanding and 6,407,221 outstanding warrants for a total of 33,047,534 common shares and warrants.

NAME AND ADDRESS	AMOUNT AND NATURE OF	PERCENT OF
OF BENEFICIAL OWNER	BENEFICIAL OWNERSHIP (1)(2)(4)	CLASS
The TAM Irrevocable Trust	15,307,799 (3)	46.72%
4012 S. Rainbow #K111
Las Vegas, NV 80103-2012
Carl Palmer	-	-
251 Jeanell Dr., Ste 3
Carson City, NV 89703
Cari Beck	15,307,799 (3)	46.72%
4435 Pepperdine Pl	110,000	.01%
Yorba Linda, CA 92886
John Beck	15,307,799 (3)	46.72%
4435 Pepperdine Pl
Yorba Linda, CA 92886
All officers and directors as a Group (three persons)	17,172,799	52.42%

_______________

(1)	All ownership is beneficial and of record, unless indicated otherwise.
(2)	Beneficial owners listed above have sole voting and investment power with respect to the shares shown, unless otherwise indicated.
(3)	The TAM  Irrevocable Trust is an irrevocable trust for the benefit of certain family members of Mr. Carl Palmer. Mr. Palmer disclaims any beneficial ownership or interest in this Trust. Cari Beck, his daughter, is the Trustee of the Trust and has total beneficiary rights, including all voting rights and investment power as the Trustee. The Trust is held in her name (50%) as well as that of Lindsay Helvey (25%) and Casey Helvey (25%), both granddaughters.
(4)	There are no other financial instruments, including stock warrants, etc. that are issuable within sixty days from the filing of this document.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The Company paid consulting fees to the Company's primary shareholder (the TAM Irrevocable Trust (TAM Trust), in which Cari Beck is the trustee, as well as a daughter of Carl Palmer, an officer and Board member) totaling $0 and $37,350 during the years ended February 28, 2018 and 2017, respectively, which are included as a component of selling, general and administrative expenses on the consolidated statements of operations.

During the years ended February 28, 2018 and February 28, 2017, TAM Trust purchased, on behalf of the Company, $132,488  and $76,704, respectively, of raw materials from a vendor with which it already had a business relationship.

The Company had advanced amounts to employees of approximately $35,007 and $27,200 as of February 28, 2018 and February 28, 2017. These amounts are being repaid through direct payroll withdrawals

Mr. Gary Hess, a Director, received a total of $22,651 and $12,500 as of February 28,2018 and February 28, 2017, respectively under a royalty agreement based upon his licensing to Seychelle of certain products owned by him.

The Company paid commission to Carl Palmer's brother-in-law for sourcing raw materials with third-party vendors in China.  The Company paid approximately $63,427 and $18,000 in direct commissions to the related party during the fiscal years ended February 28, 2018 and February 28, 2017, respectively.

The Company utilizes the services of two individuals, one of which is a related party and one of which is third-party, in China to source materials and the manufacturing of component parts with third-party vendors in China. As of  February 28, 2018 and February 28, 2017, the Company had deposits for inventory purchases in China of approximately $8,067 and $3,000, respectively.

The Company had receivable from shareholders of $6,407 and $0 as of February 28,2018 and February 28, 2017, respectively.

The Company had sales to two companies related to a member of the Board of Directors.  Specifically, sales to Sovereign Earth, LLC (dba Revolve) totaled approximately $636,000 and $265,000 for fiscal years February 28, 2018 and February 28, 2017, respectively and sales to Amazon Seychelle totaled approximately $24,000 and $0 for fiscal years February 28, 2018 and February 28, 2017, respectively.  Sovereign Earth, LLC (dba Revolve) shall be the sole and exclusive seller of the following products in worldwide markets, including Amazon World Marketplaces:  amazon.com, amazon.co uk, amazon.de, amazon.fr, amazon.jp, amazon, it, amazon.ca, amazon.cn, amazon.in, and amazon.com.mx for the duration of the agreement:  Generation#1 Filter Pitcher:  All filter iterations (regular, standard, advanced, radiological, extreme, supreme, etc.)

ITEM 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES

On August 26, 2016, our Board of Directors voted to dismiss our independent registered public accounting firm, Ramirez Jimenez International CPAs ("RJI"), of Irvine, California and to replace them with Squar Milner LLP ("SM") of Newport Beach, California.  As of that date, SM formally accepted us as a client for the audit of our consolidated financial statements for the fiscal year ending February 28, 2017 which will be included in our annual report to be reported on Form 10-K. RJI has previously rendered opinions on our consolidated financial statements for the fiscal years ended February, 2011 through 2016.

Our Board of Directors does not have an audit committee.  The functions customarily delegated to an audit committee are performed by our full Board of Directors.  Our Board of Directors approves in advance, all services performed by SM and RJI (prior to their dismissal).  Our Board of Directors considers whether the provision of non-audit services is compatible with maintaining the principal accountant's independence.  

The following table sets forth fees billed by RJI and SM during the last two fiscal years for services rendered for the audit of our annual consolidated financial statements and the review of our quarterly financial statements, services by our independent registered public accounting firm that are reasonably related to the performance of the audit or review of our consolidated financial statements and that are not reported as audit fees, services rendered in connection with tax compliance, tax advice and tax planning, and all other fees for services rendered.

	February 28,			February 28,
	2018			2017
Audit fees		$	68,080		$	195,400
Audit related fees			-			-
Tax fees			10,500			12,300
All other fees		$	46,132		$	49,100

Audit fees.  The audit fees in fiscal 2018 and 2017 $68,080 and $195,400, respectively, related to the audit of our consolidated financial statements, and quarterly reviews.

Tax fees.  The tax fee in fiscal 2018 and 2017 $10,500 and $12,300 respectively related to professional services rendered for tax compliance, tax advice and tax planning.

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Exhibits

Exhibit No.	Description
2A*	Plan of Exchange between Seychelle Environmental Technologies, Inc. and Seychelle Water Technologies, Inc. dated January 30, 1998 as filed with Form 10-SB 12 G on February 8, 2000.
3A*	Articles of Incorporation dated January 23, 1998 as filed with Form 10-SB 12 G on February 8, 2000.
3B*	Articles of Merger of Royal Net, Inc. into Seychelle Environmental Technologies, Inc as filed with Form 10-SB 12 G on February 8, 2000.
3C*	Amendment to Articles of Incorporation re: Series "A" Preferred Stock as of January 31, 1998 as filed with Form 10-SB 12 G on February 8, 2000.
3D*	Amendment to Articles of Incorporation re: Series "AA" Preferred Stock as of June 5, 1998 as filed with Form 10-SB 12 G on February 8, 2000.
3E*	Amendment to Articles of Incorporation re: Series "AAA" Preferred Stock as of February 18, 1999 as filed with Form 10-SB 12 G on February 8, 2000.
3F*	Bylaws as filed with Form 10-SB 12 G on February 8, 2000.
10A*	Purchase Agreement with Aqua Vision as filed with Form 10-SB 12 G on February 8, 2000.
10B*	Amended Purchase Agreement with Aqua Vision as filed with Form 10-SB 12 G on February 8, 2000.
10C*	2000 Stock Compensation Plan I, dated July 1, 2000 as filed with Registration Statement on Form S-8 on August 31, 2000.
10D*	2002 Stock Compensation Plan I, dated February 12, 2002 as filed with Registration Statement on Form S-8 on February 27, 2002.
10E*	Purchase Agreement with Aqua Gear as filed with Annual Report on Form 10-K on June 14, 2002.
10F*	Employment Contract with Carl Palmer as filed with Annual Report on Form 10-K on June 14, 2002.
10G*	Management Consulting Contract with Richard Parsons
10H*	Management Consulting Contract with James Place
10I*	Joint Venture Agreement with Huanghua Plastic Co. Ltd. dated September 1, 2005
10J*	ABMS Health Care Pvt. Ltd. Distribution Rights Agreement dated April 1, 2006
10K*	Confident, Inc. Exclusive Distribution Rights Agreement dated January 1, 2006

- 28 -

Exhibit No.	Description
10L*	Continental Technologies. Inc., Purchase Agreement dated April 26, 2006
10M*	Promissory Note to TAM Irrevocable Trust dated May 1, 2001
10N*	Promissory Note to TAM Irrevocable Trust dated February 28, 2002
10O*	Promissory Note to TAM Irrevocable Trust dated February 28, 2003
10P*	Promissory Note to TAM Irrevocable Trust dated November 1, 2003
10Q*	Promissory Note to TAM Irrevocable Trust dated February 28, 2004
10R*	Food For Health Purchase Agreement
10S*	Food For Health Distribution Agreement
10T*	Seychelle Environmental Technologies, Inc. License Agreement with Mr. Gary Hess
10U*	Employment Agreement with Mr. Carl Palmer
10V*	Employment Agreement with Mr. James Place
21*	Subsidiaries
31.1**	Certification of the Chief Executive/Financial Officer pursuant to Rule 13a-14(a) (Section 302 of the Sarbanes Oxley Act of 2002)
32.1**	Certification of the Chief Executive/Financial Officer pursuant to 18 U.S.C.ss.1350 (Section 906 of the Sarbanes-Oxley Act of 2002)
99*	Code of Ethics for Chief Executive Officer and Senior Financial Officers

___________________

*	Previously filed with the Securities and Exchange Commission as indicated and incorporated by reference herein
**	Attached hereto

- 29 -

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	SEYCHELLE ENVIRONMENTAL TECHNOLOGIES, INC.
Date: June 8, 2018	By:	/s/ Carl Palmer
		Carl Palmer Chief Executive Officer and Chief Financial Officer

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Carl Palmer
Carl Palmer, Director	,	June 8, 2018

/s/ John Beck
John Beck, Director	June 8, 2018

/s/ Cari Beck
John Beck, Director	June 8, 2018

- 30 -

EX-31.1

Exhibit 31.1

Certification Pursuant to Section 302

of the Sarbanes-Oxley Act of 2002

I, Carl Palmer, certify that:

1. I have reviewed this annual report on Form 10-K of Seychelle Environmental Technologies, Inc. (the "Registrant);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-a5(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-a5(f)) for the Registrant and have;

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure the material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over   financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or person performing the equivalent functions);

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls over financial reporting.

Date:  June 8, 2018

By:	/s/ Carl Palmer
	Carl Palmer Chief Executive Officer and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of Seychelle Environmental Technologies, Inc. (the "Company") on Form 10-K as filed with the Securities and Exchange Commission (the "Report"), I, Carl Palmer, Chief Executive Officer/Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002, that:

(1)  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 results of operations of the Company.

Date:  June 8, 2018

By:	/s/ Carl Palmer
	Carl Palmer Chief Executive Officer and Chief Financial Officer

XML

Document and Entity Information - USD ($)	12 Months Ended
	Feb. 28, 2018	Jun. 07, 2018	Aug. 31, 2017
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, 2018
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 Public Float			$ 1,886,303
Entity Common Stock, Shares Outstanding		26,574,313
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2018

XML

Consolidated Balance Sheets - USD ($)	Feb. 28, 2018	Feb. 28, 2017
CURRENT ASSETS
Cash and cash equivalents	$ 2,075,833	$ 732,112
Accounts receivable, net of allowance for doubtful accounts of $8,617 and $47,600 respectively	829,790	905,507
Related party receivable	35,007	27,200
Inventory, net	998,296	1,421,871
Prepaid expenses, deposits, and other current assets	159,980	282,560
Total current assets	4,098,906	3,369,250
PROPERTY AND EQUIPMENT, NET	135,539	164,997
OTHER ASSETS
Other assets	66,670	81,310
TOTAL ASSETS	4,301,115	3,615,557
CURRENT LIABILITIES
Accounts payable and accrued expenses	441,866	476,415
Customer deposits	163,184	99,677
Capital lease obligations, current portion	5,402	4,047
Total current liabilities	610,452	580,139
LONG-TERM LIABILITIES
Capital lease obligation, net of current portion	9,082	14,744
Total long-term liabilities	9,082	14,744
Total liabilities	619,534	594,883
STOCKHOLDERS' EQUITY
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	(5,259,748)	(5,920,655)
Less treasury stock at cost (36,000 shares)	(29,680)	(29,680)
Total Stockholders' Equity	3,681,581	3,020,674
Total liabilities and stockholders' equity	$ 4,301,115	$ 3,615,557

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Consolidated Balance Sheets (Parenthetical) - USD ($)	Feb. 28, 2018	Feb. 28, 2017
CURRENT ASSETS
Net of allowance for doubtful accounts	$ 8,617	$ 47,600
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

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Consolidated Statements of Income - USD ($)	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017
Condensed Consolidated Statements Of Income
SALES	$ 5,279,377	$ 4,378,436
COST OF SALES	2,802,565	3,303,274
GROSS PROFIT	2,476,812	1,075,162
OPERATING EXPENSES
Selling, general and administrative expenses	1,614,885	2,414,225
Impairment of intangible assets (Note 5)	0	50,000
legal expenses	162,425	374,103
Depreciation and Amortization	60,232	80,781
Total operating expenses	1,837,542	2,919,109
INCOME (LOSS) FROM OPERATIONS	639,270	(1,843,947)
Interest income		28
Interest expense	(4,394)	(1,640)
Other income	32,728	475
Total other expense	28,334	(1,137)
INCOME (LOSS) BEFORE INCOME TAX BENEFIT (EXPENSE)	667,604	(1,845,084)
Provision for income taxes	(6,697)	(302,140)
NET INCOME (LOSS)	$ 660,907	$ (2,147,224)
NET INCOME (LOSS) PER SHARE - BASIC	$ 0.02	$ (0.08)
NET (LOSS) INCOME PER SHARE - DILUTED	$ 0.02	$ (0.08)
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

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Consolidated Statements of Stockholders' Equity - USD ($)	Common Stock	Treasury Stock	Additional Paid-In Capital	(Accumulated Deficit)	Total
Begnning Balance, Shares at Feb. 29, 2016	26,390,313	36,000
Begnning Balance, Amount at Feb. 29, 2016	$ 26,391	$ (12,280)	$ 8,827,118	$ (3,773,431)	$ 5,067,798
Issuance of common stock for compensation - shares	250,000
Stock based compensation, Amount	$ 250		117,250		117,500
Treasury stock at cost, Shares		30,000
Treasury stock at cost, Amount		$ (17,400)			17,400
Net income				(2,147,224)	(2,147,224)
Ending Balance, Shares at Feb. 28, 2017	26,640,313	66,000
Ending Balance, Amount at Feb. 28, 2017	$ 26,641	$ (29,680)	8,944,368	(5,920,655)	3,020,674
Net income				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

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Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017
CASH FLOW FROM OPERATING ACTIVITIES:
Net income (loss)	$ 660,907	$ (2,147,224)
Adjustments to reconcile net income (loss) to net cash provided by (used in)operating activities:
Depreciation and amortization	60,232	80,777
Loss on disposal of assets		5,587
Impairment of intangible assets		50,000
Stock-based compensation		117,500
Provision (Recovery of) for doubtful accounts	37,911	(47,063)
Deferred tax		(468,282)
Increase in valuation allowance on deferred tax assets		1,081,998
Changes in operating assets and liabilities:
Accounts receivable	37,806	(634,209)
Related party receivable	(7,807)	12,375
Inventory	423,575	1,089,587
Prepaid expenses, deposits and other current assets	137,220	(232,779)
Accounts payable and accrued expenses	(34,549)	61,189
Income taxes payable		(317,145)
Customer deposits	63,507	71,458
Net Cash Provided by (Used In)Operating Activities	1,369,802	(1,276,231)
CASH FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(30,774)	(27,092)
Net Cash Used in Investing Activities	(30,774)	(27,092)
CASH FROM FINANCING ACTIVITIES:
Purchase of treasury stock		(17,400)
Repayment of capital lease obligation	(4,307)	(10,038)
Net Cash Used in Financing Activities	(4,307)	(27,438)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	1,343,721	(1,330,761)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	732,112	2,062,873
CASH AND CASH EQUIVALENTS AT END OF YEAR	2,075,833	732,112
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
CASH PAID DURING THE YEAR FOR FOR INTEREST	4,395	1,640
CASH PAID DURING THE YEAR FOR INCOME TAXES		$ 237,295

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1 ORGANIZATION AND DESCRIPTION OF BUSINESS

12 Months Ended

Feb. 28, 2018

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.

Description of Business

The Company designs, assembles and distributes water filtration systems. These systems include portable water bottles, pumps, home-use pitchers, and related water filtration products that can be filled from nearly any available source of fresh water. 

Management's Plan

As of February 28, 2018, the Company had approximately $2,076,000 in cash and cash equivalents and a backlog of approximately $395,000 in unshipped product.

Seychelle has been continuing to develop innovative marketing and product concepts for water purification for the world.  The demand is expanding rapidly due to the health concerns caused by extensive contamination of drinking water by major industrial, agriculture and natural causes.  Seychelle continues to develop new technologies that remove contaminants such as lead, Chromium and others to create products for both here in the U.S. and also around the world to ensure safe drinking water.  With the growing interest for higher alkaline water, referred to as pH, Seychelle now includes a full line of products that meets these demands.

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.

Our cash requirements relate primarily to working capital needed to operate and grow our business, including funding operating expenses, growth in inventory and servicing clients, and continued development and expansion of our products.  Our ability to achieve profitability and meet future liquidity needs and capital requirements will depend upon numerous factors, including the timing and quantity of product orders and shipments; the timing and amount of our operating expenses; the timing and costs of product service requirements; the extent to which our products gain market acceptance; the timing and costs of product development and introductions; the extent of our ongoing and any new research and development programs; and changes in our strategy or our planned activities.

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2. SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Feb. 28, 2018

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 and have been consistently applied in the preparation of the consolidated financial statements herein as of and for the years ended February 28, 2018 and February 28, 2017.

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 (collectively, the Company or Seychelle). 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 the allowance for doubtful accounts and sales returns, inventory reserves 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 $1,826,000 as of February 28, 2018.

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

The Company recognizes revenue when persuasive evidence of an arrangement exists, products are shipped and title has passed, the price to the buyer is fixed or determinable and collectability is reasonably assured.  These criteria are typically met when the product is shipped. Revenue is not recognized at the time of shipment if these criteria are not met.  Certain of the Company's sales include a right for the customer to return the product if they are not satisfied.  The Company has an unconditional return policy for the first 90 days.  Customers may return the product for a full refund, or they may receive a replacement at no charge. The same policy applies to any product sold from the period 91 days after purchase to one year, for any defects in materials or workmanship.  In accordance with FASB ASC Topic 605, Revenue Recognition, the Company makes periodic assessments of return activity and if necessary records a reserve for product returns.

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, 2018 and February 28, 2017 amounted to approximately $68,000 and $234,000, 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 reserve for excess and obsolete inventory amounted to approximately $185,000 and $416,000 as of February 28, 2018 and February 28, 2017, 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.

Intangible Assets

Intangible assets include intellectual property and trademarks. All trademarks are capitalized and amortized over the economic useful lives using the straight-line method.  The Company assesses whether there has been a permanent impairment of the value of intangible assets by considering factors such as expected future product revenues, anticipated product demand and prospects, and other economic factors.

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. The Company recorded an impairment charge for certain intangible assets in the amount of $50,000 for the year ended February 28, 2017.

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 $30,000 and $2,300 for the fiscal years ended February 28, 2018 and February 28, 2017, 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 $6,100 and $1,200 for the fiscal years ended February 28, 2018 and February 28, 2017, 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, which establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services, primarily focusing on accounting for transactions where an entity obtains services in share based payment transactions. ASC 718 requires entities to measure the cost of services received in exchange for equity instruments, including restricted stock, based on the grant date fair value of the award and to recognize it as compensation expense over the period services are to be provided, usually the vesting period.

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.

The Company's fair value calculations for stock based compensation awards have been based on the following assumptions relates to year end February 28, 2018.

Expected life in years	7
Stock price volatility	244%
Risk free interest rate	2.9%
Expected dividends	None

The assumptions used in the Black-Scholes model referred to above are based upon the following data: (1) The expected life of the option or warrant is estimated by considering the contractual term, the vesting period and the expected exercise date. (2) The expected stock price volatility of the underlying shares over the expected life is based upon historical share price data. (3) The risk free interest rate is based on published U.S. Treasury Department interest rates for the expected life. (4) Expected dividends are based on historical dividend data and expected future dividend activity.

Income Taxes

The Company utilizes the asset and liability method of accounting for income taxes.  The asset and liability method requires 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".  ASC 740-10-25 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  It also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.  

Income (Loss) Per Common Share

Basic net income (loss)  per common share is computed by dividing net (loss) income by the weighted average number of outstanding common shares during each of the periods presented. Diluted net income per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents, assuming the conversion, exercise, or issuance of all potential common stock equivalents unless the effect is to reduce a loss or increase the income per share. If the inclusion of common stock equivalents in the weighted average number of common shares outstanding would be anti-dilutive these items would be omitted from the calculation of net income (loss) per common share. The dilutive effect of outstanding stock options and warrants is reflected in diluted earnings per share by application of the treasury stock method.

	For the year ended
	February 28,		February 28,
	2018		2017
Numerator:
Net income (loss) available to common shareholders	$	660,907	$	(2,147,224	)
Weighted average shares – basic		26,574,313		26,574,313
Net  income (loss) per share – basic	$	0.02	$	(0.08	)
Dilutive effect of common stock equivalents:
Warrants		-		-
Weighted average shares – diluted		26,574,313		26,574,313
Net income (loss) per share – diluted	$	0.02	$	(0.08	)

For the year ended February 28, 2018 and 2017, 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" price.

For the year ended February 28, 2018 and 2017, 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? price.

Concentrations

The Company utilizes the services of two individuals, one of which is a related party and one of which is third-party, in China to source materials and the manufacturing of component parts with third-party vendors in China. As of February 28, 2018 and February 28, 2017, the Company had deposits for inventory purchases in China of approximately $8,067 and $3,000, respectively.

For the year ended February 28, 2018, we had 3 customers that accounted for 33%, 12% and 11% (or 56%).  As of February 28, 2017 we had three customer that accounted for 36%, 9% and 8% (or 53%) of our total sales.  One of these customers accounted for 33% and 68% as of February 28, 2018 and February 28, 2017 of net accounts receivable.

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 elected to adopt the guidance beginning in fiscal 2019 using the modified retrospective approach. The Company is performing as assessment of the impact of adoption of this guidance, including required disclosures with assistance from an outside subject matter expert. Although its evaluation is not yet finalized, management believes that the impact of adopting the standard on our consolidated financial statements and related disclosures will not be material.

In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)," which will require lessees to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. Lessor accounting is similar to the current model, but updated to align with certain changes to the lessee model and the new revenue recognition standard. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the potential impact this standard will have on its consolidated financial statements and related disclosures.

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.

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3 INVENTORY

12 Months Ended

Feb. 28, 2018

Notes to Financial Statements

INVENTORY

NOTE 3:   INVENTORY

The Company's inventory consisted of the following at February 28, 2018 and February 28, 2017:

	February 28, 2018		February, 28 2017
Raw materials	$	860,424	$	1,059,482
Finished goods		137,872		362,389
Net inventory	$	998,296	$	421,871

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4 PROPERTY AND EQUIPMENT

12 Months Ended

Feb. 28, 2018

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

NOTE 4:   PROPERTY AND EQUIPMENT

The following is a summary of property and equipment at February 28, 2018 and February 28, 2017:
	February 28,				February 28,
	2018				2017
Tooling		$	408,453			$	380,529
Equipment			63,117				60,268
Computer equipment			63,520				63,520
Leasehold equipment			-				-
			535,090				504,317
Less: accumulated depreciation and amortization			(399,551	)			(339,320	)
Total		$	135,539			$	164,997

Fixed assets outside the United States included approximately $350,998 and $330,000 in tooling and equipment, at cost, located in various third party locations which manufacture the Company's component parts at February 28, 2018 and February 28, 2017, respectively. Depreciation expense included in operating expenses were $60,232 and $79,434 for the fiscal years ended February 28, 2018 and February 28, 2017, respectively.

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5 INTANGIBLE ASSETS

12 Months Ended

Feb. 28, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

NOTE 5:    INTANGIBLE ASSETS

The following is a summary of intangible assets at February 28, 2018 and February 28, 2017:

	February 28,			February 28,
	2018			2017
Intellectual property	$	-		$	-
Trademarks		24,100			24,100
Patents		22,560			22,560
		46,660			46,660
Less: accumulated amortization		(46,660	)		(46,660	)
Total	$	-		$	-

Intangible assets are amortized over their estimated useful economic lives of five years. Amortization expense related to intangibles was approximately $0 and $1,100 during the fiscal years ended February 28, 2018 and February 28, 2017, respectively.  During the year ended February 28, 2017, the Company identified that revenue related to the one specific product for this patent did not materialize and recorded an impairment charge in the amount of $50,000.

We previously held two patents, which have expired.  The first patent was for the portable water filtration system with the filter cap assembly.  The second patent was for a quick connect diverter valve.  We currently hold no patents.

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6 CAPITAL LEASE OBLIGATION

12 Months Ended

Feb. 28, 2018

Debt Disclosure [Abstract]

CAPITAL LEASE OBLIGATION

NOTE 6:    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, 2018 and February 28, 2017, and is depreciated on a straight-line basis over 5 years. Total accumulated depreciation related to the leased equipment was $13,000 and $7,800 as of February 28, 2018 and February 28, 2017, respectively. Obligations outstanding as of February 28, 2018 and February 28, 2017 consisted of the following:

		February 28, 2018			February 28, 2017
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%		16,914			22,918
Total capital lease obligations, principal and interest		16,914			22,918
Less amount representing interest		(2,430	)		(4,127	)
Total capital lease obligations, principal		14,484			18,791
Less current portion		(5,402	)		(4,047	)
Long term portion	$	9,802		$	14,744

Future maturities of the capital lease obligation as of February 28, 2018 are:

Fiscal Year Ending
February 28,	Amount
2019		5,402
2020		5,938
2021		3,144
Total	$	14,484

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7 RELATED PARTY TRANSACTIONS

12 Months Ended

Feb. 28, 2018

Notes to Financial Statements

RELATED PARTY TRANSACTIONS

NOTE 7:   RELATED PARTY TRANSACTIONS

The Company paid consulting fees to the Company's primary shareholder (the TAM Irrevocable Trust ("TAM Trust"), in which Cari Beck is the trustee and current Board member, as well as a daughter of Carl Palmer, an officer and Board member) totaling $0 and $37,350 during the years ended February 28, 2018 and February 28, 2017, respectively, which are included as a component of selling, general and administrative expenses on the consolidated statements of operations.

During the years ended February 28, 2018 and February 28, 2017, TAM Trust purchased, on behalf of the Company, approximately $132,000 and $77,000, respectively, of raw materials from a vendor with which it already had a business relationship.

The Company paid commission to Carl Palmer's brother-in-law for sourcing raw materials with third-party vendors in China.  The Company paid approximately $63,000 and $18,000 in direct commissions to the related party during the fiscal years ended February 28, 2018 and February 28, 2017, respectively.

The Company had advanced amounts to employees of approximately $28,600 and $27,200 as of February 28, 2018 and February 28, 2017. These amounts are being repaid through direct payroll withdrawals.

The Company had receivable from stockholders of approximately $6,000 and $0 as of February 28,2018 and February 28, 2017, respectively.

The Company had sales to two companies related to a member of the Board of Directors.  Specifically, sales to Sovereign Earth, LLC (dba Revolve) totaled approximately $636,000 and $265,000 for fiscal years February 28, 2018 and February 28, 2017, respectively and sales to Amazon Seychelle totaled approximately $24,000 and $0 for fiscal years February 28, 2018 and February 28, 2017, respectively.  Sovereign Earth, LLC (dba Revolve) shall be the sole and exclusive seller of the following products in worldwide markets, including Amazon World Marketplaces:  amazon.com, amazon.co uk, amazon.de, amazon.fr, amazon.jp, amazon, it, amazon.ca, amazon.cn, amazon.in, and amazon.com.mx for the duration of the agreement:  Generation#1 Filter Pitcher:  All filter iterations (regular, standard, advanced, radiological, extreme, supreme, etc.)

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8 EQUITY TRANSACTIONS

12 Months Ended

Feb. 28, 2018

Equity [Abstract]

EQUITY TRANSACTIONS

NOTE 8:   EQUITY TRANSACTIONS

Restricted Stock Grants

During the year ended February 28, 2017, 250,000 shares of fully vested restricted common stock were issued by the Company to an employee.  The shares were valued at the closing price of the Company's common stock at the date of the grant for a total expense of $117,500. 

During the year ended February 28, 2017, the Company repurchased 30,000 shares of common stock at a cost of  $17,400.  This repurchase has been recorded as treasury stock and reflected as a reduction of stockholders' equity.

Warrants

A summary of warrant activity for the fiscal years ended February 28, 2018 and February 28, 2017 is shown below.

			Weighted-
			Average
	Warrants		Exercise
	Outstanding		Price
Outstanding at March 1, 2016		6,407,221		0.21
Granted		-		-
Exercised		-		-
Forfeited		-		-
Outstanding at February 28, 2017		6,407,221		0.21
Granted		-		-
Exercised		-		-
Outstanding at February 28, 2018		6,407,221		0.21
Vested at February 28, 2018		6,407,221		0.21
Exercisable at February 28, 2018		6,407,221		0.21

The following table summarizes significant ranges of outstanding warrants as of February 28, 2018:

		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		2.79		$0.21		6,407,221		$0.21

As of February 28, 2018 and February 28, 2017 the total outstanding warrants had an intrinsic value of $0.

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9 INCOME TAXES

12 Months Ended

Feb. 28, 2018

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 9:   INCOME TAXES

Income tax expense (benefit) consists of the following:

	Current			Deferred		Total
Year ended February 28, 2018:
U.S. federal	$	(2,970	)		-		(2,970	)
State		9,667			-		9,667
Total income tax expense (benefit)	$	6,697			-		6,697
Year ended February 28 2017:
U.S. federal	$	(261,967	)		501,492		239,525
State		(25,884	)		88,498		62,614
Total income tax expense	$	(287,851	)		589,990		302,139

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 40% to pretax income (loss) for the years ended February 28, 2018 and February 28, 2017 as follows:

	2018			2017
Expected tax (benefit) provision	$	212,520		$	(627,328	)
State Income tax (benefit) provision		40,088			(105,566	)
Other		28,468			(46,965	)
Change in tax rate		282,408			-
Permanent differences		1,215			-
Change in valuation allowance		(558,002	)		1,081,998
Income tax provision	$	6,697		$	302,139

Deferred tax assets are as follows:

	February 28,			February 28,
	2018			2017
Deferred tax assets:
NOL carryforwards	$	158,318		$	379,326
Depreciation		(23,600	)		(80,545	)
Reserves and accrued expenses		70,171			202,471
Stock compensation		-			645,673
Other		406,293			75,728
Valuation allowance		(611,182	)		(1,222,653	)
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.

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 is 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.


We recorded the effects of the TCJA for year ended February 28, 2018 using our best estimates and the information available to us through the date the financial statements were issued. However, our analysis is ongoing and as such, the income tax effects that we have recorded are provisional.

The valuation allowance for deferred tax assets as of February 28, 2018 and February 28, 2017 $611,182 and $1,222,653, respectively.  The net change in the total valuation allowance was an increase of $558,002 and $1,081,998 for the years ended February 28, 2018 and February 28, 2017, 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, 2018.

At February 28, 2018, the Company had unused net operating loss carryovers of approximately $496,000 and $927,000 for federal and state tax purposes, respectively, which expires beginning in 2037. 

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, 2018 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 2014 through 2017 for federal purposes and fiscal years 2013 through 2017 for state purposes.

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10 COMMITMENTS AND CONTINGENCIES

12 Months Ended

Feb. 28, 2018

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 10:    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
2019	$	246,908
2020		253,908
2021		259,000
2022		109,000
Total	$	868,816

Legal Proceedings

The Company was involved in litigation or legal proceedings as of February 28, 2018.  On March 27, 2017, the Company received a Notice of Filing of Discrimination complaint in the Superior Court of the State of California, County of Orange by a former employee.  The Company also received on June 5, 2017, a Request for Entry of Default filed to Superior Court of California, County of Orange by the same employee. The matter is currently set for trial on June 25, 2018.  The.case is in the discovery phase.  The Company believes that the complaint is completely without merit and plan to vigorously contest the matter.

Another pending action is 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 early discovery and no trial date is set.  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 years ended February 28, 2018 and February 28, 2017, the Company paid $22,651 and $12,500, respectively, in royalties and licensing fees related under these agreements.

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11 GEOGRAPHIC AREAS

12 Months Ended

Feb. 28, 2018

Segment Reporting [Abstract]

GEOGRAPHIC AREAS

NOTE 11:   GEOGRAPHIC AREAS

The Company sells its products throughout the United States and internationally. Geographic sales information for the fiscal years ended February 28, 2018 and February 28, 2017 is as follows:

	2018		2017
United States	$	5,130,357	$	4,099,466
Asia		105,568		158
Greece		-		-
United Kingdom		-		14,944
New Zealand		-		91,971
Australia		-		50,615
Canada		40,291		38,971
Other countries		3,161		82,311
Total	$	5,279,377	$	4,378,436

_____________

(1)    Sales are based on the country of residence of the customer.

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

Long lived assets at February 28, 2017 are in the following geographic areas:

	United States		China		Total
Property and equipment, net	$	75,909	$	89,088	$	164,997
Other assets		81,310		-		81,310
Total	$	157,219	$	89,088	$	246,307

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12 SUBSEQUENT EVENTS

12 Months Ended

Feb. 28, 2018

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 12:   SUBSEQUENT EVENTS

Management has evaluated events subsequent to February 28, 2018 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, no material events were identified that require adjustment to the financial statements or additional disclosure.

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2. SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Feb. 28, 2018

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 (collectively, the Company or Seychelle). 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 the allowance for doubtful accounts and sales returns, inventory reserves 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 $1,826,000 as of February 28, 2018.

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

The Company recognizes revenue when persuasive evidence of an arrangement exists, products are shipped and title has passed, the price to the buyer is fixed or determinable and collectability is reasonably assured.  These criteria are typically met when the product is shipped. Revenue is not recognized at the time of shipment if these criteria are not met.  Certain of the Company's sales include a right for the customer to return the product if they are not satisfied.  The Company has an unconditional return policy for the first 90 days.  Customers may return the product for a full refund, or they may receive a replacement at no charge. The same policy applies to any product sold from the period 91 days after purchase to one year, for any defects in materials or workmanship.  In accordance with FASB ASC Topic 605, Revenue Recognition, the Company makes periodic assessments of return activity and if necessary records a reserve for product returns.

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, 2018 and February 28, 2017 amounted to approximately $68,000 and $234,000, 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 reserve for excess and obsolete inventory amounted to approximately $185,000 and $416,000 as of February 28, 2018 and February 28, 2017, 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.

Intangible Assets

Intangible Assets

Intangible assets include intellectual property and trademarks. All trademarks are capitalized and amortized over the economic useful lives using the straight-line method.  The Company assesses whether there has been a permanent impairment of the value of intangible assets by considering factors such as expected future product revenues, anticipated product demand and prospects, and other economic factors.

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. The Company recorded an impairment charge for certain intangible assets in the amount of $50,000 for the year ended February 28, 2017.

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 $30,000 and $2,300 for the fiscal years ended February 28, 2018 and February 28, 2017, 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 $6,100 and $1,200 for the fiscal years ended February 28, 2018 and February 28, 2017, 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, which establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services, primarily focusing on accounting for transactions where an entity obtains services in share based payment transactions. ASC 718 requires entities to measure the cost of services received in exchange for equity instruments, including restricted stock, based on the grant date fair value of the award and to recognize it as compensation expense over the period services are to be provided, usually the vesting period.

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.

The Company's fair value calculations for stock based compensation awards have been based on the following assumptions relates to year end February 28, 2018.

Expected life in years	7
Stock price volatility	244%
Risk free interest rate	2.9%
Expected dividends	None

The assumptions used in the Black-Scholes model referred to above are based upon the following data: (1) The expected life of the option or warrant is estimated by considering the contractual term, the vesting period and the expected exercise date. (2) The expected stock price volatility of the underlying shares over the expected life is based upon historical share price data. (3) The risk free interest rate is based on published U.S. Treasury Department interest rates for the expected life. (4) Expected dividends are based on historical dividend data and expected future dividend activity.

Income Taxes

Income Taxes

The Company utilizes the asset and liability method of accounting for income taxes.  The asset and liability method requires 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".  ASC 740-10-25 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  It also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.  

Income (Loss) Per Common Share

Income (Loss) Per Common Share

Basic net income (loss)  per common share is computed by dividing net (loss) income by the weighted average number of outstanding common shares during each of the periods presented. Diluted net income per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents, assuming the conversion, exercise, or issuance of all potential common stock equivalents unless the effect is to reduce a loss or increase the income per share. If the inclusion of common stock equivalents in the weighted average number of common shares outstanding would be anti-dilutive these items would be omitted from the calculation of net income (loss) per common share. The dilutive effect of outstanding stock options and warrants is reflected in diluted earnings per share by application of the treasury stock method.

	For the year ended
	February 28,		February 28,
	2018		2017
Numerator:
Net income (loss) available to common shareholders	$	660,907	$	(2,147,224	)
Weighted average shares – basic		26,574,313		26,574,313
Net  income (loss) per share – basic	$	0.02	$	(0.08	)
Dilutive effect of common stock equivalents:
Warrants		-		-
Weighted average shares – diluted		26,574,313		26,574,313
Net income (loss) per share – diluted	$	0.02	$	(0.08	)

For the year ended February 28, 2018 and 2017, 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" price.

Concentrations

Concentrations

The Company utilizes the services of two individuals, one of which is a related party and one of which is third-party, in China to source materials and the manufacturing of component parts with third-party vendors in China. As of February 28, 2018 and February 28, 2017, the Company had deposits for inventory purchases in China of approximately $8,067 and $3,000, respectively.

For the year ended February 28, 2018, we had 3 customers that accounted for 33%, 12% and 11% (or 56%).  As of February 28, 2017 we had three customer that accounted for 36%, 9% and 8% (or 53%) of our total sales.  One of these customers accounted for 33% and 68% as of February 28, 2018 and February 28, 2017 of net accounts receivable.

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 elected to adopt the guidance beginning in fiscal 2019 using the modified retrospective approach. The Company is performing as assessment of the impact of adoption of this guidance, including required disclosures with assistance from an outside subject matter expert. Although its evaluation is not yet finalized, management believes that the impact of adopting the standard on our consolidated financial statements and related disclosures will not be material.

In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)," which will require lessees to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Classification will be based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. Lessor accounting is similar to the current model, but updated to align with certain changes to the lessee model and the new revenue recognition standard. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the potential impact this standard will have on its consolidated financial statements and related disclosures.

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.

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2. SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Feb. 28, 2018

Accounting Policies [Abstract]

Stock based compensation awards

The Company's fair value calculations for stock based compensation awards have been based on the following assumptions relates to year end February 28, 2018.

Expected life in years	7
Stock price volatility	244%
Risk free interest rate	2.9%
Expected dividends	None

Earnings per share

	For the year ended
	February 28,		February 28,
	2018		2017
Numerator:
Net income (loss) available to common shareholders	$	660,907	$	(2,147,224	)
Weighted average shares – basic		26,574,313		26,574,313
Net  income (loss) per share – basic	$	0.02	$	(0.08	)
Dilutive effect of common stock equivalents:
Warrants		-		-
Weighted average shares – diluted		26,574,313		26,574,313
Net income (loss) per share – diluted	$	0.02	$	(0.08	)

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3 INVENTORY (Tables)

12 Months Ended

Feb. 28, 2018

Inventory Tables

Inventory

	February 28, 2018		February, 28 2017
Raw materials	$	860,424	$	1,059,482
Finished goods		137,872		362,389
Net inventory	$	998,296	$	421,871

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4 PROPERTY AND EQUIPMENT (Tables)

12 Months Ended

Feb. 28, 2018

Property, Plant and Equipment [Abstract]

Summary of property and equipment

The following is a summary of property and equipment at February 28, 2018 and February 28, 2017:
	February 28,				February 28,
	2018				2017
Tooling		$	408,453			$	380,529
Equipment			63,117				60,268
Computer equipment			63,520				63,520
Leasehold equipment			-				-
			535,090				504,317
Less: accumulated depreciation and amortization			(399,551	)			(339,320	)
Total		$	135,539			$	164,997

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5 INTANGIBLE ASSETS (Tables)

12 Months Ended

Feb. 28, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Intangible Assets

The following is a summary of intangible assets at February 28, 2018 and February 28, 2017:

	February 28,			February 28,
	2018			2017
Intellectual property	$	-		$	-
Trademarks		24,100			24,100
Patents		22,560			22,560
		46,660			46,660
Less: accumulated amortization		(46,660	)		(46,660	)
Total	$	-		$	-

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6 CAPITAL LEASE OBLIGATION (Tables)

12 Months Ended

Feb. 28, 2018

Debt Disclosure [Abstract]

Outstanding obligations

		February 28, 2018			February 28, 2017
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%		16,914			22,918
Total capital lease obligations, principal and interest		16,914			22,918
Less amount representing interest		(2,430	)		(4,127	)
Total capital lease obligations, principal		14,484			18,791
Less current portion		(5,402	)		(4,047	)
Long term portion	$	9,802		$	14,744

Future maturities of the capital lease obligation

Fiscal Year Ending
February 28,	Amount
2019	$	246,908
2020		253,908
2021		259,000
2022		109,000
Total	$	868,816

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8 EQUITY TRANSACTIONS (Tables)

12 Months Ended

Feb. 28, 2018

Equity [Abstract]

Summary of warrant activity

			Weighted-
			Average
	Warrants		Exercise
	Outstanding		Price
Outstanding at March 1, 2016		6,407,221		0.21
Granted		-		-
Exercised		-		-
Forfeited		-		-
Outstanding at February 28, 2017		6,407,221		0.21
Granted		-		-
Exercised		-		-
Outstanding at February 28, 2018		6,407,221		0.21
Vested at February 28, 2018		6,407,221		0.21
Exercisable at February 28, 2018		6,407,221		0.21

Summary of significant ranges of outstanding warrants as of February 28, 2014

		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		2.79		$0.21		6,407,221		$0.21

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9 INCOME TAXES (Tables)

12 Months Ended

Feb. 28, 2018

Income Tax Disclosure [Abstract]

Income tax expense (benefit)

	Current			Deferred		Total
Year ended February 28, 2018:
U.S. federal	$	(2,970	)		-		(2,970	)
State		9,667			-		9,667
Total income tax expense (benefit)	$	6,697			-		6,697
Year ended February 28 2017:
U.S. federal	$	(261,967	)		501,492		239,525
State		(25,884	)		88,498		62,614
Total income tax expense	$	(287,851	)		589,990		302,139

Expected income tax expense

	2018			2017
Expected tax (benefit) provision	$	212,520		$	(627,328	)
State Income tax (benefit) provision		40,088			(105,566	)
Other		28,468			(46,965	)
Change in tax rate		282,408			-
Permanent differences		1,215			-
Change in valuation allowance		(558,002	)		1,081,998
Income tax provision	$	6,697		$	302,139

Deferred tax assets

	February 28,			February 28,
	2018			2017
Deferred tax assets:
NOL carryforwards	$	158,318		$	379,326
Depreciation		(23,600	)		(80,545	)
Reserves and accrued expenses		70,171			202,471
Stock compensation		-			645,673
Other		406,293			75,728
Valuation allowance		(611,182	)		(1,222,653	)
Net deferred tax assets	$	-		$	-

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10 COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Feb. 28, 2018

Commitments and Contingencies Disclosure [Abstract]

Future minimum base lease payments

Fiscal Year Ending
February 28,	Amount
2019	$	246,908
2020		253,908
2021		259,000
2022		109,000
Total	$	868,816

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11 GEOGRAPHIC AREAS (Tables)

12 Months Ended

Feb. 28, 2018

Segment Reporting [Abstract]

Geographic sales information

	2018		2017
United States	$	5,130,357	$	4,099,466
Asia		105,568		158
Greece		-		-
United Kingdom		-		14,944
New Zealand		-		91,971
Australia		-		50,615
Canada		40,291		38,971
Other countries		3,161		82,311
Total	$	5,279,377	$	4,378,436

Long lived assets in geographic areas 2017

	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

Long lived assets in geographic areas 2016

	United States		China		Total
Property and equipment, net	$	75,909	$	89,088	$	164,997
Other assets		81,310		-		81,310
Total	$	157,219	$	89,088	$	246,307

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1 ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Narrative) - USD ($)	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Accounting Policies [Abstract]
Cash and cash equivalents	$ 2,075,833	$ 732,112	$ 2,062,873
Unshipped product	$ 395,000

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2. SIGNIFICANT ACCOUNTING POLICIES - Assumptions (Details)	12 Months Ended
	Feb. 28, 2018
Accounting Policies [Abstract]
Expected life in years	7 years
Stock price volatility	244.00%
Risk free interest rate	2.90%
Expected dividends	0.00%

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2. SIGNIFICANT ACCOUNTING POLICIES - Earnings per share (Details ) - USD ($)	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017
Numerator:
Net income (loss) available to common shareholders	$ 660,907	$ (2,147,224)
Weighted average shares - basic	26,574,313	26,574,313
Net income (loss) per share - basic	$ 0.02	$ (0.08)
Dilutive effect of common stock equivalents:
Warrants
Weighted average shares - diluted	26,574,313	26,574,313
Net income (loss) per share - diluted	$ 0.02	$ (0.08)

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2. SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017
FDIC insured limit	$ 250,000
Deposits exceeded insured limits	1,826,000
Obsolete inventory	185,000	$ 416,000
Advertising costs	30,000	2,300
Research and development costs	$ 6,100	$ 1,200
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	6,407,221	6,407,221
Deposits for inventory purchases in China	$ 8,067	$ 3,000
Sales Revenue, Net [Member] | First Customer
Concentrations	33.00%	36.00%
Sales Revenue, Net [Member] | Second Customer
Concentrations	12.00%	9.00%
Sales Revenue, Net [Member] | Third Customer
Concentrations	11.00%	8.00%
Accounts Receivable [Member] | One Customer
Concentrations	33.00%	68.00%

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3 INVENTORY (Details) - USD ($)	Feb. 28, 2018	Feb. 28, 2017
Inventory Details
Raw materials	$ 860,424	$ 1,059,482
Finished goods	137,872	362,389
Inventory, Net	$ 998,296	$ 1,421,871

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4 PROPERTY AND EQUIPMENT - Summary of property and equipment (Details) - USD ($)	Feb. 28, 2018	Feb. 28, 2017
Property, Plant and Equipment [Abstract]
Tooling	$ 408,453	$ 380,529
Equipment	63,117	60,268
Computer equipment	63,520	63,520
Leasehold equipment	0	0
Total of property and equipment	535,090	504,317
Less: accumulated depreciation and amortization	(399,551)	(339,320)
Total	$ 135,539	$ 164,997

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4 PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	Feb. 28, 2018	Feb. 28, 2017
Fixed Assets outside USA
Tooling and equipment located in China	$ 350,998	$ 330,000
Depreciation expense for assets located outside USA	$ 60,232	$ 79,434

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5 INTANGIBLE ASSETS - Summary of Intangible Assets (Details) - USD ($)	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Intellectual property	$ 0	$ 0
Trademarks	24,100	24,100
Patents	22,560	22,560
Total	46,660	46,660
Less: accumulated amortization	(46,660)	(46,660)
Total after amortization	$ 0	$ 0

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5 INTANGIBLE ASSETS (Details Narrative) - USD ($)	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense related to intangibles	$ 0	$ 1,100
Impairment charge	$ 0	$ 50,000

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6 CAPITAL LEASE OBLIGATION - Outstanding obligations (Details) - USD ($)	Feb. 28, 2018	Feb. 28, 2017
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%	$ 16,914	$ 22,918
Total capital lease obligations, principal and interest	16,914	22,918
Less amount representing interest	(2,430)	(4,127)
Total capital lease obligations, principal	14,484	18,791
Less current portion	(5,402)	(4,047)
Long term portion	$ 9,082	$ 14,744

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6 CAPITAL LEASE OBLIGATION - Future maturities of the capital lease obligation (Details) - USD ($)	Feb. 28, 2022	Feb. 28, 2021	Feb. 29, 2020	Feb. 28, 2019
Debt Disclosure [Abstract]
Future maturities of capital lease obligation	$ 14,484	$ 3,144	$ 5,938	$ 5,402

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6 CAPITAL LEASE OBLIGATION (Details Narrative) - USD ($)	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017
Debt Disclosure [Abstract]
Leased equipment	$ 26,000	$ 26,000
Accumulated depreciation related to leased equipment	$ 13,000	$ 7,800
Useful Life	5 years

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7 RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	12 Months Ended		24 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 28, 2018
Advances to employees	$ 28,600	$ 27,200
TAM purchase of raw materials on behalf of the comapany	132,000	77,000
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	37,350
Direct commissions to related party	63,000	18,000
Receivable from stockholders	6,000	0	$ 6,000
Sovereign Earth, LLC
Revenue from related party	$ 636,000	265,000
Amazon Seychelle
Revenue from related party		$ 0	$ 24,000

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8 EQUITY TRANSACTIONS - Summary of warrant activity (Details) - $ / shares	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Warrants Outstanding
Outstanding at beginning	6,407,221	6,407,221
Granted
Exercised
Forfeited
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
Exercised
Forfeited
Outstanding at end	0.21	$ 0.21
Vested	0.21
Exercisable	$ 0.21	$ 0.21	$ 0.21

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8 EQUITY TRANSACTIONS - Summary of significant ranges of outstanding warrants as of February 28, 2014 (Details) - $ / shares	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Equity [Abstract]
Execise price	$ 0.21
Number of warrants outstanding	6,407,221
Weighted average remaining life in years	2 years 7 months 20 days
Weighted Average Execise price	$ 0.21	$ 0.21	$ 0.21
Warrants Exercisable
Weighted average exercise price	$ 0.21	$ 0.21	$ 0.21
Number outstanding	6,407,221

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8 EQUITY TRANSACTIONS (Details Narrative) - USD ($)	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017
Equity [Abstract]
Number of shares fully vested issued to one employee	250,000
Fair value of warrants on the date of this grant	$ 117,500
Common stock repurchased		$ (17,400)
Common stock repurchased shares		30,000
Intrinsic value of total outstanding warrants	$ 0	$ 0

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9 INCOME TAXES (Components of Income Tax) (Details) - USD ($)	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017
Current:
U.S. federal	$ (2,970)	$ (261,967)
State	9,667	(25,884)
Total current income tax expense (benefit)	6,697	(287,851)
Deferred:
U.S. federal		501,492
State		88,498
Total deferred Income tax expense (benefit)		589,990
Total
Federal	(2,970)	239,525
State	9,667	62,614
Total current and deferred tax expense (benifet)	$ 6,697	$ 302,139

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9 INCOME TAXES (Effective Income Tax Rate Reconciliation) (Details) - USD ($)	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Income Tax Disclosure [Abstract]
Expected tax (benefit) provision	$ 212,520		$ (627,328)
State Income tax (benefit) provision	40,088		(105,566)
Other	28,468		(46,965)
Change in tax rate	282,408		0
Permanent differences	1,215		0
Change in valuation allowance	(558,002)	$ (1,081,998)	1,081,998
Income tax provision	$ 6,697		$ 302,139

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9 INCOME TAXES (Deferred Tax Assets) (Details) - USD ($)	Feb. 28, 2018	Feb. 28, 2017
Deferred tax assets:
NOL carryforwards	$ 158,318	$ 379,326
Depreciation	(23,600)	(80,545)
Reserves and accrued expenses	70,171	202,471
Stock compensation		645,673
Other	406,293	75,728
Valuation allowance	(611,182)	(1,222,653)
Net deferred tax assets

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9 INCOME TAXES (Details Narrative) - USD ($)	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 29, 2016
Income Tax Disclosure [Abstract]
Net change in the total valuation allowance	$ (558,002)	$ (1,081,998)	$ 1,081,998
Valuation allowance for deferred tax assets	611,182	$ 1,222,653
Net operating loss carryovers federal	496,000
Net operating loss carryovers state	927,000
Discrete net tax expense	$ 282,408

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10 COMMITMENTS AND CONTINGENCIES - Future minimum base lease payments (Details Narrative) - USD ($)	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017
Commitments and Contingencies Disclosure [Abstract]
Total rent expense	$ 19,000
Royalties and licensing fees	$ 22,651	$ 12,500

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10 Future minimum base lease payments (Details)	Feb. 28, 2017 USD ($)
FUTURE MINIMUM BASE LEASE PAYMENTS
2019	$ 246,908
2020	253,908
2021	259,000
2022	109,000
Total	$ 868,816

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11 GEOGRAPHIC AREAS - Geographic sales information (Details) - USD ($)	12 Months Ended
	Feb. 28, 2018	Feb. 28, 2017
Water filtration products sold based on the country of residence of the customer	$ 5,279,377	$ 4,378,436
United States [Member]
Water filtration products sold based on the country of residence of the customer	5,130,357	4,099,466
Asia [Member]
Water filtration products sold based on the country of residence of the customer	105,568	158
Greece [Member]
Water filtration products sold based on the country of residence of the customer
United Kingdom [Member]
Water filtration products sold based on the country of residence of the customer		14,944
New Zealand [Member]
Water filtration products sold based on the country of residence of the customer		91,971
Australia [Member]
Water filtration products sold based on the country of residence of the customer		50,615
Canada [Member]
Water filtration products sold based on the country of residence of the customer	40,291	38,971
Other countries [Member]
Water filtration products sold based on the country of residence of the customer	$ 3,161	$ 82,311

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11 GEOGRAPHIC AREAS - Long lived assets in geographic areas (Details) - USD ($)	Feb. 28, 2018	Feb. 28, 2017
Property and equipment, net	$ 135,539	$ 164,997
United States [Member]
Property and equipment, net	57,264	75,909
Other assets	66,670	81,310
Total	123,934	157,219
China [Member]
Property and equipment, net	78,275	89,088
Other assets
Total	78,275	89,088
Assets, Total [Member]
Property and equipment, net	135,539	164,997
Other assets	66,670	81,310
Total	$ 202,209	$ 246,307