Seychelle Environmental (SYEV) 10-Q 10 Jul 15 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	May. 31, 2015	Jul. 06, 2015
Document And Entity Information
Entity Registrant Name	SEYCHELLE ENVIRONMENTAL TECHNOLOGIES INC /CA
Entity Central Index Key	1,056,757
Document Type	10-Q
Document Period End Date	May 31, 2015
Amendment Flag	false
Current Fiscal Year End Date	--02-29
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		26,158,646
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,016

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	May. 31, 2015	Feb. 28, 2015
ASSETS
Cash and cash equivalents	$ 861,669	$ 1,514,534
Accounts receivable, net of allowance for doubtful accounts and sales returns of of $13,400	695,305	284,121
Related party receivable	35,101	12,601
Inventory, net	1,350,689	1,009,491
Deferred tax assets	384,547	629,838
Prepaid expenses, deposits, and other current assets	239,295	174,052
Total current assets	3,566,606	3,624,637
Property and equipment, net	164,277	162,107
Intangible assets, net	152,210	152,643
Deferred tax assets	611,314	611,314
Other assets	15,651	25,491
Total assets	4,510,058	4,576,192
Current Liabilities:
Accounts payable and accrued expenses	$ 238,836	238,009
Accrued legal and settlement fees (Note 8)		532,103
Customer deposits	$ 45,153	119,215
Capital lease obligation, current portion	6,568	5,639
Total current liabilities	290,557	894,966
Long term Liabilities:
Capital lease obligation, net of current	2,659	4,081
Total liabilities	$ 293,216	$ 899,047
STOCKHOLDERS' EQUITY
Preferred stock, 6,000,000 shares authorized, none issued or outstanding
Common stock $0.001 par value, 50,000,000 shares authorized, 25,800,146 issued and outstanding at May 31, 2015 and February 28, 2015	$ 25,914	$ 25,914
Additional paid-in capital	8,524,802	8,457,603
Accumulated deficit	(4,333,874)	(4,806,372)
Total Stockholders' Equity	4,216,842	3,677,145
Total liabilities and stockholders' equity	$ 4,510,058	$ 4,576,192

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	May. 31, 2015	Feb. 28, 2015
CURRENT ASSETS
Net of allowance for doubtful accounts	$ 13,400	$ 13,400
STOCKHOLDERS' EQUITY
Preferred stock, authorized shares	6,000,000	6,000,000
Preferred stock, issued shares	0	0
Preferred stock, outstanding shares	0	0
Preferred stock, par value	$ 0	$ 0
Common stock, par value	$ 0.001	$ 0.001
Common stock, authorized shares	50,000,000	50,000,000
Common stock, issued shares	25,913,646	25,913,646
Common stock, outstanding shares	25,913,646	25,913,646

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	May. 31, 2015	May. 31, 2014
Condensed Consolidated Statements Of Income
Sales	$ 2,347,183	$ 1,107,298
Cost of sales	1,068,030	569,835
Gross profit	1,279,153	537,463
OPERATING EXPENSES
Selling, General, and Administrative Expenses	551,916	634,309
Depreciation and Amortization	9,712	13,759
Total operating expenses	561,628	648,068
Income (Loss) from Operations	717,525	(110,605)
OTHER INCOME (EXPENSE)
Interest income	$ 189	1,660
Interest expense		(269)
Other income	$ 75	8,492
Total other income	264	9,883
Income (loss) before provision for income taxes	717,789	(100,722)
Income tax benefit (expense)	(245,291)	37,994
Net income (loss)	$ 472,498	$ (62,728)
BASIC INCOME (LOSS) PER SHARE	$ 0.02	$ 0
DILUTED INCOME (LOSS) PER SHARE	$ 0.02	$ 0
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
BASIC WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING	25,913,646	25,878,646
DILUTED WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING	26,499,618	25,878,646

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	May. 31, 2015	May. 31, 2014
OPERATING ACTIVITIES:
Net income (loss)	$ 472,498	$ (62,728)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	9,712	13,759
Stock-based compensation	67,199	122,175
Deferred tax expense (benefit)	245,291	(37,994)
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable	(411,184)	6,906
Increase in related party receivable	(22,500)	(7,008)
Increase in inventory	(341,198)	(40,288)
Increase in prepaid expenses, deposits and other assets	(55,403)	(184,558)
Increase (decrease) in accounts payable and accrued expenses	827	$ (27,302)
Increase in income taxes payable	(532,103)
Decrease in accrued legal and settlement fees	(74,062)	$ (31,942)
Net Cash Used In Operating Activities	(640,923)	(248,980)
INVESTING ACTIVITIES:
Purchase of property and equipment	$ (11,449)	(10,755)
Purchase of intangible assets		(434)
Net Cash Used In Investing Activities	$ (11,449)	(11,189)
FINANCING ACTIVITIES:
Repayment of capital lease obligation	(493)	(1,208)
Net Cash Used in Financing Activities	(493)	(1,208)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(652,865)	(261,377)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	1,514,534	2,971,825
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$ 861,669	2,710,448
Cash paid for:
Interest		$ 269
Income taxes

1. CONDENSED FINANCIAL STATEMEN

1. CONDENSED FINANCIAL STATEMENTS	3 Months Ended
	May. 31, 2015
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 The accompanying condensed consolidated financial statements have been prepared by Seychelle Environmental Technologies, Inc., and subsidiaries (the "Company") without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at May 31, 2015, 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, 2015. The results of operations for the periods ended May 31, 2015 and 2014 are not necessarily indicative of the operating results for the full fiscal years. The summary of significant accounting policies of the Company is presented to assist in understanding the Company's consolidated financial statements. The consolidated financial statements and notes are representations of the Company's management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the condensed consolidated financial statements and the February 28, 2015 consolidated financials included in the 10-K filed on May 29, 2015. The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.

2. BASIC INCOME (LOSS) PER SHAR

2. BASIC INCOME (LOSS) PER SHARE	3 Months Ended
	May. 31, 2015
Earnings Per Share [Abstract]
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 period ended May 31, 2014 did not include warrants as they would have been anti-dilutive. At May 31, 2015 and 2014, 5,446,137 and 5,464,694 warrants, respectively, were excluded from the denominator for diluted income (loss) per share. For the three months ended May 31, 2015 2014 Numerator: Net income (loss) available to common shareholders $ 427,498 $ (62,728 ) Weighted average shares – basic 25,913,646 25,878,646 Net income (loss) per share – basic $ 0.02 $ (0.00 ) Dilutive effect of common stock equivalents: Warrants 585,972 - Weighted average shares – diluted 26,499,618 25,878,646 Net income (loss) per share – diluted $ 0.02 $ (0.00 )

3. COMMON STOCK PURCHASE WARRAN

3. COMMON STOCK PURCHASE WARRANTS	3 Months Ended
	May. 31, 2015
Notes to Financial Statements
COMMON STOCK PURCHASE WARRANTS	NOTE 3: COMMON STOCK PURCHASE WARRANTS Common Stock During the quarter ended May 31, 2015, the Company did not issue any shares of common stock. During the three month period ended May 31, 2014, 50,000 shares of restricted stock were issued by the Company to an employee. The shares vest over a two year period, with 17,000 shares vested upon issue. The remaining shares vest 17,000 and 16,000 after one and two years, respectively. The value recorded in the accompanying consolidated financial statements was based on the estimated fair value of the stock on the date of the grant. 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 $67,199 for the three months ended May 31, 2015 and $88,175 for the three months ended May 31, 2014. All outstanding warrants are expected to be vested in December 2015. A summary of warrant activity for the three months ended May 31, 2015 is as follows: Weighted- Average Warrants Exercise Outstanding Price Outstanding at February 28, 2015 8,407,221 0.21 Granted - - Exercised - - Forfeited (2,000,000 ) 0.21 Outstanding at May 31, 2015 6,407,221 0.21 Vested at May 31, 2015 5,446,137 0.21 Exercisable at May 31, 2015 5,446,137 0.21 The following table summarizes significant ranges of outstanding warrants as of May 31, 2015: Warrants Outstanding Warrants Exercisable Weighted Weighted Weighted Average Average Average Number Remaining Exercise Number Exercise Exercise Price Outstanding Life (Years) Price Outstanding Price $0.21 6,407,221 5.54 $0.21 5,446,137 $0.21

4. INVENTORY

4. INVENTORY	3 Months Ended
	May. 31, 2015
Notes to Financial Statements
INVENTORY	NOTE 4: INVENTORY The Company's inventory consisted of the following at May 31, 2015 and February 28, 2015: May 31, 2015 February 28, 2015 Raw materials $ 831,954 $ 536,302 Finished goods 558,735 513,189 1,390,689 1,049,491 Reserve for obsolete and slow moving inventory (40,000 ) (40,000 ) $ 1,350,689 $ 1,009,491

5. LINE OF CREDIT

5. LINE OF CREDIT	3 Months Ended
	May. 31, 2015
Notes to Financial Statements
LINE OF CREDIT	NOTE 5: LINE OF CREDIT As of February 28, 2015, the Company had a line of credit agreement totaling $500,000, with no outstanding borrowings as of February 28, 2015. The line expires on September 1, 2015. During the fourth quarter of the fiscal year ended February 28, 2015, our bank notified us that our line of credit would no longer be accessible by us. This situation is not material to our operations. However, we plan to request that our bank restore our line of credit during the second fiscal quarter.

6. CONCENTRATIONS

6. CONCENTRATIONS	3 Months Ended
	May. 31, 2015
Notes to Financial Statements
CONCENTRATIONS	NOTE 6: CONCENTRATIONS Sales to two customers accounted for 72% of sales for the three month period ended May 31, 2015. Accounts receivable from these two customers amounted to $575,045 or 83% of accounts receivable as of May 31, 2015. Sales to two customers accounted for 57% of sales for the three month period ended May 31, 2014. Accounts receivable from these two customers amounted to $187,633 or 61% of accounts receivable as of May 31, 2014. Accounts receivable from one other customer represented 21% of accounts receivable as of May 31, 2014.

7. RELATED PARTY TRANSACTIONS

7. RELATED PARTY TRANSACTIONS	3 Months Ended
	May. 31, 2015
Notes to Financial Statements
RELATED PARTY TRANSACTIONS	NOTE 7: RELATED PARTY TRANSACTIONS During the three month periods ended May 31, 2015 and 2014, payments totaling $50,000, respectively, 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 three month period ended May 31, 2015, TAM Trust purchased, on behalf of the Company, $185,000 of raw materials, and paid $3,500 for related tooling to a vendor with which it already had a business relationship. The Company reimbursed TAM Trust for these outlays in full during the three months ended May 31, 2015. During the three month period ending May 31, 2014, the Company paid a $100,000 deposit to TAM for a future purchase of intellectual property retained by TAM when the Company was incorporated in 1998. This deposit is included in prepaid expenses, deposits and other current assets on the May 31, 2014 condensed consolidated balance sheet. On June 16, 2014, a final purchase price for this intellectual property of $150,000 was agreed upon. The $100,000 deposit was applied to that purchase price and rights to the intellectual property were transferred to the Company.

8. COMMITMENTS AND CONTINGENCIE

8. COMMITMENTS AND CONTINGENCIES	3 Months Ended
	May. 31, 2015
Notes to Financial Statements
COMMITMENTS AND CONTINGENCIES	NOTE 8: COMMITMENTS AND CONTINGENCIES The Company previously reported that it was involved in a 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. This case has been transferred to the Orange County Superior Court for the State of California with trial date set for September 2015. In January 2012, the Company entered into a contract with a distributor in which it granted exclusive distribution rights for certain new product lines. Subsequently there was a contract dispute that has resulted in a lawsuit titled Archette Wellness Group, dba Functional Water Technologies v. Seychelle Environmental Technologies, brought in the U.S. District Court, for the Central District of California, Southern Division. This case was settled on March 4, 2015, and such amount was fully provided for as of February 28, 2015. Otherwise, as of May 31, 2015, 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.

9. SUBSEQUENT EVENTS

9. SUBSEQUENT EVENTS	3 Months Ended
	May. 31, 2015
Subsequent Events [Abstract]
9. SUBSEQUENT EVENTS	NOTE 9: SUBSEQUENT EVENTS On June 1, 2015, 105,000 shares or restricted common stock were issued to employees and officers of the Company. Additionally, on the same date, 100,000, 20,000, and 10,000 shares of restricted common stock were issued to TAM, vendors, and TAM's trustee, respectively.

2. BASIC INCOME (LOSS) PER SH15

2. BASIC INCOME (LOSS) PER SHARE (Tables)	3 Months Ended
	May. 31, 2015
Earnings Per Share [Abstract]
Basic and Diluted income (loss) per share	For the three months ended May 31, 2015 2014 Numerator: Net income (loss) available to common shareholders $ 427,498 $ (62,728 ) Weighted average shares – basic 25,913,646 25,878,646 Net income (loss) per share – basic $ 0.02 $ (0.00 ) Dilutive effect of common stock equivalents: Warrants 585,972 - Weighted average shares – diluted 26,499,618 25,878,646 Net income (loss) per share – diluted $ 0.02 $ (0.00 )

3. COMMON STOCK PURCHASE WARR16

3. COMMON STOCK PURCHASE WARRANTS (Tables)	3 Months Ended
	May. 31, 2015
Common Stock Purchase Warrants Tables
Summary of warrant activity	Weighted- Average Warrants Exercise Outstanding Price Outstanding at February 28, 2015 8,407,221 0.21 Granted - - Exercised - - Forfeited (2,000,000 ) 0.21 Outstanding at May 31, 2015 6,407,221 0.21 Vested at May 31, 2015 5,446,137 0.21 Exercisable at May 31, 2015 5,446,137 0.21
Significant ranges of outstanding warrants	Warrants Outstanding Warrants Exercisable Weighted Weighted Weighted Average Average Average Number Remaining Exercise Number Exercise Exercise Price Outstanding Life (Years) Price Outstanding Price $0.21 6,407,221 5.54 $0.21 5,446,137 $0.21

4. INVENTORY (Tables)

4. INVENTORY (Tables)	3 Months Ended
	May. 31, 2015
Inventory Tables
Inventory	The Company's inventory consisted of the following at May 31, 2015 and February 28, 2015: May 31, 2015 February 28, 2015 Raw materials $ 831,954 $ 536,302 Finished goods 558,735 513,189 1,390,689 1,049,491 Reserve for obsolete and slow moving inventory (40,000 ) (40,000 ) $ 1,350,689 $ 1,009,491

2. BASIC INCOME (LOSS) PER SH18

2. BASIC INCOME (LOSS) PER SHARE - Basic and Diluted income (loss) per share (Details) - USD ($)	3 Months Ended
	May. 31, 2015	May. 31, 2014
Numerator:
Net Income (Loss) available to common shareholders	$ 427,498	$ (62,728)
Weighted average shares, basic	25,913,646	25,878,646
Net income per share, basic	$ 0.02	$ 0
Dilutive effect of common stock equivalents:
Warrants	585,972
Weighted average shares, diluted	26,499,618	25,878,646
Net income per share, diluted	$ 0.02	$ 0

3. COMMON STOCK PURCHASE WARR19

3. COMMON STOCK PURCHASE WARRANTS (Details) - $ / shares	3 Months Ended
	May. 31, 2015	May. 31, 2014	Feb. 28, 2015
Common Stock Purchase Warrants Details
Restricted shares issued to one employee		50,000
Number of shares vested upon issue		17,000
Number of shares vested after one year		17,000
Number of shares vested after two years		16,000
Warrants Outstanding	8,407,221
Warrants, Forfeited	(2,000,000)
Warrants, Outstanding	6,407,221
Vested	6,407,221
Exercisable	6,407,221
Warrants Weighted Average Exercise Price per Share, Outstanding	$ 0.21
Warrants Weighted Average Exercise Price per Share, Forfeited	0.21
Warrants Weighted Average Exercise Price per Share, Outstanding	0.21
Weighted Average Exercise Price Warrants Vested	0.21		$ 0.21
Weighted Average Exercise Price Warrants Exercisable	$ 0.21		$ 0.21

4. INVENTORY (Details)

4. INVENTORY (Details) - USD ($)	May. 31, 2015	Feb. 28, 2015
Inventory Details
Raw materials	$ 831,954	$ 536,302
Finished goods	558,735	513,189
Inventory	1,390,689	1,049,491
Reserve for obsolete and slow moving inventory	(40,000)	(40,000)
Inventory, Net	$ 1,350,689	$ 1,009,491

2. BASIC INCOME (LOSS) PER SH21

2. BASIC INCOME (LOSS) PER SHARE (Details Narrative) - shares	3 Months Ended
	May. 31, 2015	May. 31, 2014
Earnings Per Share [Abstract]
Warrants excluded from the denominator for diluted income (loss) per share	5,464,694	3,374,888

3. COMMON STOCK PURCHASE WARR22

3. COMMON STOCK PURCHASE WARRANTS (Details Narrative) - USD ($)	3 Months Ended
	May. 31, 2015	May. 31, 2014
Common Stock Purchase Warrants Details Narrative
Expense charged to operations for warrants	$ 67,199	$ 88,175

5. LINE OF CREDIT (Details Narr

5. LINE OF CREDIT (Details Narrative) - May. 31, 2015 - USD ($)	Total
Line Of Credit Details Narrative
Available Line of Credit	$ 500,000
Interest Rate for Line of Credit	4.00%
Company borrowings against line of credit	$ 0
Expiration date of line of credit	Sep. 1, 2015

6. CONCENTRATIONS (Details Narr

6. CONCENTRATIONS (Details Narrative) - USD ($)	3 Months Ended
	May. 31, 2015	May. 31, 2014
Concentrations Details Narrative
Percentage of accounts receivable attributable to Sales to two customers	83.00%	61.00%
Percentage of sales attributable to two customers	72.00%	57.00%
Accounts receivable from two customers	$ 575,045	$ 187,633
Percentage of accounts receivable from one other customer		21.00%

7. RELATED PARTY TRANSACTIONS (

7. RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	3 Months Ended
	May. 31, 2015	May. 31, 2014	Jun. 16, 2014
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	$ 50,000	$ 50,700
Payment to TAM for future purchase of intellectual property retained by TAM	100,000
Final purchase price for this intellectual property			$ 150,000
Raw materials purchased			$ 185,000
Tooling from vendor	$ 3,500

9. SUBSEQUENT EVENTS (Details N

9. SUBSEQUENT EVENTS (Details Narrative)	3 Months Ended
	May. 31, 2015USD ($)
Subsequent Events [Abstract]
Intangible asset capitalization	$ 150,000