Seychelle Environmental (SYEV) 10-Q 11 Oct 13 2014 Q2 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	6 Months Ended
	Aug. 31, 2013	Oct. 08, 2013
Document And Entity Information
Entity Registrant Name	SEYCHELLE ENVIRONMENTAL TECHNOLOGIES INC /CA
Entity Central Index Key	1056757
Document Type	10-Q
Document Period End Date	31-Aug-13
Amendment Flag	FALSE
Current Fiscal Year End Date	-26
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		25,853,646
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2014

Condensed_Consolidated_Balance

Condensed Consolidated Balance Sheets (USD $)	Aug. 31, 2013	Feb. 28, 2013
ASSETS
Cash and cash equivalents	$2,845,422	$2,234,545
Accounts receivable, net of allowance for doubtful accounts and sales returns of $14,500 and $114,591, respectively	335,390	641,635
Inventory, net	650,701	464,998
Deferred tax assets	463,942	463,942
Prepaid expenses, deposits, and other current assets	122,436	125,080
Total current assets	4,417,891	3,930,200
Property and equipment, net	173,205	179,876
Intangible assets, net	5,965	4,995
Deferred tax assets	257,392	257,392
Other assets	8,514	8,514
Total assets	4,862,967	4,380,977
Current Liabilities:
Accounts payable and accrued expenses	105,018	157,253
Customer deposits	283,772	371,327
Income taxes payable	162,182
Capital lease obligations	4,845	4,581
Total current liabilities	555,817	533,161
Long term Liabilities:
Capital lease obligation, net of current	11,456	14,010
Total liabilities	567,273	547,171
STOCKHOLDERS' EQUITY
Preferred stock, 6,000,000 shares authorized, none issued or outstanding
Common stock $0.001 par value, 50,000,000 shares authorized, 25,853,646 and 25,833,646 issued and outstanding at August 31, 2013 and February 28, 2013, respectively	25,854	25,834
Additional paid-in capital	7,894,012	7,715,232
Accumulated deficit	-3,624,172	-3,907,260
Total Stockholders' Equity	4,295,694	3,833,806
Total liabilities and stockholders' equity	$4,862,967	$4,380,977

Condensed_Consolidated_Balance1

Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Aug. 31, 2013	Feb. 28, 2013
CURRENT ASSETS
Net of allowance for doubtful accounts	$14,500	$114,591
STOCKHOLDERS' EQUITY
Preferred stock, authorized shares	6,000,000	6,000,000
Preferred stock, issued shares	0	0
Preferred stock, outstanding shares	0	0
Common stock, par value	$0.00	$0.00
Common stock, authorized shares	50,000,000	50,000,000
Common stock, issued shares	25,853,646	25,833,646

Condensed_Consolidated_Stateme

Condensed Consolidated Statements of Operations (Unaudited) (USD $)	3 Months Ended		6 Months Ended
	Aug. 31, 2013	Aug. 31, 2012	Aug. 31, 2013	Aug. 31, 2012
Condensed Consolidated Statements Of Income
Sales	$1,096,947	$719,810	$2,663,004	$1,617,819
Cost of sales	592,512	341,552	1,365,826	929,757
Gross profit	504,435	378,258	1,297,178	688,062
OPERATING EXPENSES
Selling, General, and Administrative Expenses	352,778	366,262	849,617	833,836
Depreciation and Amortization	13,675	11,271	26,930	22,639
Total operating expenses	366,453	377,533	876,547	856,475
Income (Loss) from Operations	137,982	725	420,631	-168,413
OTHER INCOME (EXPENSE)
Interest income	291	192	514	510
Interest expense	-566	-271	-866	-694
Other income	150		53,681	515
Total other income	-125	-79	53,329	331
Income (loss) before provision for income taxes	137,857	646	473,960	-168,082
Income tax benefit (expense)	-55,083	3,090	-190,872	74,378
Net Income (Loss)	$82,774	$3,736	$283,088	($93,704)
BASIC INCOME (LOSS) PER SHARE	$0	$0	$0.01	$0
DILUTED INCOME (LOSS) PER SHARE	$0	$0	$0.01	$0
BASIC WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING	25,853,646	25,800,146	25,846,146	25,800,146
DILUTED WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING	26,571,641	29,397,367	25,846,146	25,800,146

Condensed_Consolidated_Stateme1

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)	6 Months Ended
	Aug. 31, 2013	Aug. 31, 2012
OPERATING ACTIVITIES:
Net income (loss)	$283,088	($93,704)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	26,930	22,639
Stock-based compensation	178,800	177,608
Gain from sale of property and equipment	-124	-517
Provision for doubtful accounts	-100,091
Increase in inventory reserve	32,751	8,513
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable	406,336	-202,087
(Increase) decrease in inventory	-218,454	177,033
(Increase) decrease in prepaid expenses, deposits and other assets	2,644	-27,917
Increase (decrease) in accounts payable and accrued expenses	-52,235	-62,902
Increase in income taxes payable	162,182
Decrease in restricted cash		146,081
Decrease in customer deposits	-87,555	-23,312
Net Cash Provided By (Used In) Operating Activities	634,272	121,435
INVESTING ACTIVITIES:
Purchase of property and equipment	-20,931	-26,668
Proceeds from sale of property and equipment	1,250	12,000
Purchase of intangible assets	-1,424	-100
Net Cash Provided By (Used In) Investing Activities	-21,105	-14,768
FINANCING ACTIVITIES:
Repayment of notes payable and capital lease obligations	-2,290	-1,765
Net Cash Used in Financing Activities	-2,290	-1,765
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	610,877	104,902
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	2,234,545	1,148,995
CASH AND CASH EQUIVALENTS AT END OF PERIOD	2,845,422	1,253,897
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest	866	694
Income taxes

1_CONDENSED_FINANCIAL_STATEMEN

1. CONDENSED FINANCIAL STATEMENTS	6 Months Ended
	Aug. 31, 2013
Notes to Financial Statements
CONDENSED FINANCIAL STATEMENTS	NOTE 1:    CONDENSED FINANCIAL STATEMENTS
	The accompanying condensed consolidated financial statements have been prepared by Seychelle Environmental Technologies, Inc., and subsidiaries (the “Company”) without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at August 31, 2013, and for all periods presented herein, have been made.
	Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended February 28, 2013.  The results of operations for the periods ended August 31, 2013 and 2012 are not necessarily indicative of the operating results for the full fiscal years.
	The summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the condensed consolidated financial statements and the February 28, 2013 consolidated financials included in the 10-K filed on May 21, 2013.
	The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.

2_BASIC_INCOME_LOSS_PER_SHARE

2. BASIC INCOME (LOSS) PER SHARE	6 Months Ended
	Aug. 31, 2013
Notes to Financial Statements
BASIC INCOME (LOSS) PER SHARE	NOTE 2:    BASIC INCOME (LOSS) PER SHARE
	Basic income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during each period presented.  Diluted income (loss) per share is determined using the weighted average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents.  In periods when losses are reported, the weighted average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive.  The dilutive effect of outstanding stock options and warrants is reflected in diluted earnings per share by application of the treasury stock method.
	The denominator for diluted income (loss) per share for the six-month periods ended August 31, 2013 and 2012 did not include warrants as they would have been anti-dilutive.  The denominator for diluted income (loss) per share for the three-month periods ended August 31, 2013 and 2012 is adjusted to include the effect of dilutive common stock equivalents, consisting of warrants totaling 717,995 and 3,597,221 shares, respectively.

3_COMMON_STOCK_PURCHASE_WARRAN

3. COMMON STOCK PURCHASE WARRANTS

6 Months Ended

Aug. 31, 2013

Notes to Financial Statements

COMMON STOCK PURCHASE WARRANTS

NOTE 3:   COMMON STOCK PURCHASE WARRANTS

Common Stock

During the three-month period ended August 31, 2013, the Company issued 20,000 shares of restricted common stock for services rendered valued at $4,600.  All shares of restricted stock were fully vested upon issuance but not able to be traded on the open market upon issuance.  The values recorded were based on the estimated fair value of the stock on the date of grant.  During the six-month period ended August 31, 2012, the Company did not issue any shares of common stock.

Warrants

The Company has determined the estimated value of warrants granted using the Black-Scholes option pricing model. The amount of the expense charged to operations for warrants was $85,711 and $174,200 for the three and six month periods ended August 31, 2013 and $88,803 and $177,608 for the three and six month periods ended August 31, 2012.  All outstanding warrants are expected to be vested in December 2015.

A summary of warrant activity for the six months ended August 31, 2013 is as follows:

Weighted-

Average

Warrants

Exercise

Outstanding

Price

Outstanding at February 28, 2013

8,467,221

0.21

Granted

-

-

Exercised

-

-

Forfeited

(30,000

)

0.21

Outstanding at August 30, 2013

8,437,221

0.21

Vested at August 30, 2013

3,374,888

0.21

Exercisable at August 30, 2013

3,374,888

0.21

The following table summarizes significant ranges of outstanding warrants as of August 31, 2013:

Warrants Outstanding

Warrants Exercisable

Weighted

Weighted

Weighted

Average

Average

Average

Exercise Price

Number

Remaining

Exercise

Number

Exercise

Outstanding

Life (Years)

Price

Outstanding

Price

$

0.21

8,437,221

7.29

$

0.21

3,374,888

$

0.21

4_INVENTORY

4. INVENTORY	6 Months Ended
	Aug. 31, 2013
Notes to Financial Statements
INVENTORY	NOTE 4:    INVENTORY
	The Company’s inventory consisted of the following at August 31, 2013 and February 28, 2013:
		August 31,			February 28,
		2013			2013
	Raw materials	$	537,354		$	336,966
	Finished goods		194,607			176,541
			731,961			513,507
	Reserve for obsolete and slow moving inventory		(81,260	)		(48,509	)
		$	650,701		$	464,998

5_LINE_OF_CREDIT

5. LINE OF CREDIT	6 Months Ended
	Aug. 31, 2013
Notes to Financial Statements
LINE OF CREDIT	NOTE 5:    LINE OF CREDIT
	As of August 31, 2013, the Company had a line of credit agreement totaling $500,000, with no outstanding borrowings as of August 31, 2013.  The line expires June 30, 2014.

6_CONCENTRATIONS

6. CONCENTRATIONS	6 Months Ended
	Aug. 31, 2013
Notes to Financial Statements
CONCENTRATIONS	NOTE 6:    CONCENTRATIONS
	Sales to two customers accounted for 55% and 52% of sales for the three and six month periods ended August 31, 2013, respectively.  Accounts receivable from five customers amounted to approximately 90% of accounts receivable at August 31, 2013.    Sales to five customers accounted for 64% of sales for the three month period ended August 31, 2012.  Sales to six customers accounted for 55% of sales for the six month period ended August 31, 2012.  Accounts receivable from these six customers accounted for 81% of accounts receivable at August 31, 2012.

7_RELATED_PARTY_TRANSACTIONS

7. RELATED PARTY TRANSACTIONS	6 Months Ended
	Aug. 31, 2013
Notes to Financial Statements
RELATED PARTY TRANSACTIONS	NOTE 7:    RELATED PARTY TRANSACTIONS
	During the three month periods ended August 31, 2013 and 2012, payments totaling $29,510 and $27,400 were made to TAM Irrevocable Trust (“TAM”) for consulting services, in which Cari Beck, is a trustee as well as the daughter of the Company’s President. During the six month periods ended August 31, 2013 and 2012, payments totaling $80,200 and $52,800 were made to TAM.

8_COMMITMENTS_AND_CONTINGENCIE

8. COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Aug. 31, 2013
Notes to Financial Statements
COMMITMENTS AND CONTINGENCIES	NOTE 8:  COMMITMENTS AND CONTINGENCIES
	In the case titled Letty Garcia v. Carl Palmer; Seychelle Environmental Technologies, Inc., et, al., brought in the Superior Court for the State of California, San Diego County District, the issue was an action by the plaintiff, Ms. Garcia, to enforce judgment against Mr. Palmer by levying the assets of Seychelle. The court found against the Company in May 2012 for approximately $157,000.  This amount was reflected in our February 29, 2012 consolidated financial statements. The Company believed that the ruling was incorrect and has filed an appeal. We believe that the appeal will be heard in late 2013 or early 2014, and that the Company will prevail.
	Otherwise, as of August 31, 2013, we know of no other legal proceedings pending or threatened, or judgments entered against the Company or any of our directors or officers in their capacity as such.

3_COMMON_STOCK_PURCHASE_WARRAN1

3. COMMON STOCK PURCHASE WARRANTS (Tables)

6 Months Ended

Aug. 31, 2013

Common Stock Purchase Warrants Tables

Summary of warrant activity

Weighted-

Average

Warrants

Exercise

Outstanding

Price

Outstanding at February 28, 2013

8,467,221

0.21

Granted

-

-

Exercised

-

-

Forfeited

(30,000

)

0.21

Outstanding at August 30, 2013

8,437,221

0.21

Vested at August 30, 2013

3,374,888

0.21

Exercisable at August 30, 2013

3,374,888

0.21

Significant ranges of outstanding warrants

Warrants Outstanding

Warrants Exercisable

Weighted

Weighted

Weighted

Average

Average

Average

Exercise Price

Number

Remaining

Exercise

Number

Exercise

Outstanding

Life (Years)

Price

Outstanding

Price

$

0.21

8,437,221

7.29

$

0.21

3,374,888

$

0.21

4_INVENTORY_Tables

4. INVENTORY (Tables)	6 Months Ended
	Aug. 31, 2013
Inventory Tables
Inventory
	The Company’s inventory consisted of the following at August 31, 2013 and February 28, 2013:
		August 31,			February 28,
		2013			2013
	Raw materials	$	537,354		$	336,966
	Finished goods		194,607			176,541
			731,961			513,507
	Reserve for obsolete and slow moving inventory		(81,260	)		(48,509	)
		$	650,701		$	464,998

3_COMMON_STOCK_PURCHASE_WARRAN2

3. COMMON STOCK PURCHASE WARRANTS (Details) (USD $)	6 Months Ended
	Aug. 31, 2013
Common Stock Purchase Warrants Details
Warrants Outstanding at February 28, 2013	8,467,221
Warrants, Granted
Warrants, Exercised
Warrants, Forfeited	-30,000
Warrants, Outstanding at August 31, 2013	8,437,221
Vested at August 31, 2013	3,374,888
Exercisable at August 31, 2013	3,374,888
Warrants Weighted Average Exercise Price per Share, Forfeited	$0.21
Warrants Weighted Average Exercise Price per Share, Outstanding at August 31, 2013	$0.21
Weighted Average Exercise Price Warrants Vested at August 31, 2013	$0.21
Weighted Average Exercise Price Warrants Exercisable at August 31, 2013	$0.21

4_INVENTORY_Details

4. INVENTORY (Details) (USD $)	Aug. 31, 2013	Feb. 28, 2013
Inventory Details
Raw materials	$537,354	$336,966
Finished goods	194,607	176,541
Inventory	731,961	513,507
Reserve for obsolete and slow moving inventory	-81,260	-48,509
Inventory, Net	$650,701	$464,998

3_COMMON_STOCK_PURCHASE_WARRAN3

3. COMMON STOCK PURCHASE WARRANTS (Details Narrative) (USD $)	3 Months Ended		6 Months Ended
	Aug. 31, 2013	Aug. 31, 2012	Aug. 31, 2013	Aug. 31, 2012
Common Stock Purchase Warrants Details Narrative
Expense charged to operations for warrants	$85,711	$88,803	$174,200	$177,608

5_LINE_OF_CREDIT_Details_Narra

5. LINE OF CREDIT (Details Narrative) (USD $)	3 Months Ended
	Aug. 31, 2013
Line Of Credit Details Narrative
Available Line of Credit	$500,000
Company borrowings against line of credit	$0
Expiration of line of credit	30-Jun-14

6_CONCENTRATIONS_Details_Narra

6. CONCENTRATIONS (Details Narrative)	3 Months Ended		6 Months Ended
	Aug. 31, 2013	Aug. 31, 2012	Aug. 31, 2013	Aug. 31, 2012
Concentrations Details Narrative
Percentage of sales attributable to two customers	55.00%		52.00%
Percentage accounts receivable attributable to Sales to five customers	90.00%
Percentage of sales attributable to five customers		64.00%
Percentage of sales attributable to six customers				55.00%
Percentage accounts receivable attributable to Sales to six customers				81.00%

7_RELATED_PARTY_TRANSACTIONS_D

7. RELATED PARTY TRANSACTIONS (Details Narrative) (USD $)	3 Months Ended		6 Months Ended
	Aug. 31, 2013	Aug. 31, 2012	Aug. 31, 2013	Aug. 31, 2012
Related Party Transactions Details Narrative
Payments to Irrevocable Trust for consulting services in which Cari Beck is a trustee as well as the daughter of the Company's President	$29,510	$27,400	$80,200	$52,800