Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Nov. 30, 2017 | Jan. 11, 2018 | |
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 | Nov. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --02-28 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 26,640,313 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Jan. 11, 2018 | Feb. 28, 2017 |
ASSETS | ||
Cash and cash equivalents | $ 1,776,482 | $ 732,112 |
Accounts receivable, net of allowance for doubtful accounts and sales returns of $6,080 and $47,600, respectively | 756,766 | 905,507 |
Related party receivables | 28,922 | 27,200 |
Inventory, net | 975,373 | 1,421,871 |
Prepaid expenses, deposits, and other current assets | 241,649 | 282,560 |
Total current assets | 3,779,192 | 3,369,250 |
Property and equipment, net | 127,267 | 164,997 |
Other current assets | 74,848 | 81,310 |
Total assets | 3,981,307 | 3,615,557 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 322,820 | 476,415 |
Customer deposits | 130,058 | 99,677 |
Capital lease obligation, current portion | 5,277 | 4,047 |
Total current liabilities | 458,155 | 580,139 |
Long term Liabilities: | ||
Capital lease obligation, net of current | 10,481 | 14,744 |
Total liabilities | 468,636 | 594,883 |
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 issued and outstanding at November 30, 2017 and February 28, 2017, respectively | 26,641 | 26,641 |
Additional paid-in capital | 8,944,368 | 8,944,368 |
Accumulated deficit | (5,428,658) | (5,920,655) |
Less treasury stock at cost | (29,680) | (29,680) |
Total Stockholders' Equity | 3,512,671 | 3,020,674 |
Total liabilities and stockholders' equity | $ 3,981,307 | $ 3,615,557 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Jan. 11, 2018 | Feb. 28, 2017 |
CURRENT ASSETS | ||
Net of allowance for doubtful accounts | $ 6,080 | $ 47,600 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, authorized shares | 6,000,000 | 6,000,000 |
Preferred stock, issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Preferred stock, par value | $ 0 | $ 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized shares | 50,000,000 | 50,000,000 |
Common stock, issued shares | 26,640,313 | 26,640,313 |
Common stock, outstanding shares | 26,640,313 | 26,640,313 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2017 | Nov. 30, 2016 | Nov. 30, 2017 | Nov. 30, 2016 | |
Condensed Consolidated Statements Of Income | ||||
Sales | $ 1,629,324 | $ 1,257,844 | $ 3,829,465 | $ 2,885,212 |
Cost of sales | 858,765 | 1,003,395 | 2,014,064 | 1,950,312 |
Gross profit | 770,559 | 254,449 | 1,815,401 | 934,900 |
OPERATING EXPENSES | ||||
Selling, General, and Administrative Expenses | 507,325 | 523,029 | 1,262,269 | 2,144,063 |
Depreciation and Amortization | 16,040 | 19,821 | 51,094 | 62,651 |
Total operating expenses | 523,365 | 542,850 | 1,313,363 | 2,206,714 |
Income (Loss) from Operations | 247,194 | (288,401) | 502,038 | (1,271,814) |
OTHER INCOME (EXPENSE) | ||||
Interest income | 7 | 23 | ||
Interest expense | (576) | (621) | (3,850) | (1,624) |
Other income | (1,068) | (142) | 11,163 | |
Total other income (expense) | (576) | (1,682) | (3,992) | 9,562 |
Income (loss) before income tax benefit (expense) | 246,618 | (290,083) | 498,046 | (1,262,252) |
Income tax benefit (expense) | 5,853 | (6,051) | 385,211 | |
Net income (loss) | $ 246,618 | $ (284,230) | $ 491,995 | $ (877,041) |
DILUTED INCOME (LOSS) PER SHARE | $ 0.01 | $ (0.01) | $ 0.02 | $ (0.03) |
BASIC WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING | 26,574,313 | 26,574,313 | 26,574,313 | 26,574,313 |
DILUTED WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING | 26,574,313 | 26,574,313 | 26,574,313 | 26,574,313 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Nov. 30, 2017 | Nov. 30, 2016 | |
CASH FLOW FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ 491,995 | $ (877,041) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 51,094 | 62,651 |
Loss on disposal of assets | 5,586 | |
Stock-based compensation | 117,500 | |
Provision for doubtful accounts and sales returns | (41,520) | (103,652) |
Deferred tax expense (benefit) | (391,485) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 190,261 | (531,850) |
Related party receivables | (1,722) | 12,225 |
Inventory | 446,498 | 519,922 |
Prepaid expenses, deposits and other assets | 47,375 | (85,647) |
Accounts payable and accrued expenses | (153,595) | (99,916) |
Income taxes payable | (252,414) | |
Customer deposits | 30,381 | 105,962 |
Net Cash Provided By (Used In) Operating Activities | 1,060,767 | (1,518,159) |
CASH FLOW FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (13,364) | (25,582) |
Net Cash Used In Investing Activities | (13,364) | (25,582) |
CASH FLOW FROM FINANCING ACTIVITIES: | ||
Repayment of capital lease obligation | (3,033) | (8,269) |
Repurchase of treasury stock | (17,400) | |
Net Cash Used in Financing Activities | (3,033) | (25,669) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 1,044,370 | (1,569,410) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 732,112 | 2,062,873 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 493,463 | |
Cash paid for: | ||
Interest | 3,850 | 1,624 |
Income taxes | $ 252,414 |
1. CONDENSED FINANCIAL STATEMEN
1. CONDENSED FINANCIAL STATEMENTS | 9 Months Ended |
Nov. 30, 2017 | |
Notes to Financial Statements | |
CONDENSED FINANCIAL STATEMENTS | NOTE 1: CONDENSED FINANCIAL STATEMENTS The accompanying condensed consolidated financial statements have been prepared by Seychelle Environmental Technologies, Inc., and subsidiaries (the "Company" or "Seychelle") 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 November 30, 2017, and for all periods presented herein, have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended February 28, 2017. The results of operations for the periods ended November 30, 2017 and 2016 are not necessarily indicative of the operating results for the full fiscal years. The summary of significant accounting policies of the Company is presented to assist in understanding the Company's consolidated financial statements. The consolidated financial statements and notes are representations of the Company's management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of these condensed consolidated financial statements and the February 28, 2017 consolidated financials included in the Form 10-K filed on June 14, 2017. The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. |
2. MANAGEMENT'S PLAN
2. MANAGEMENT'S PLAN | 9 Months Ended |
Nov. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
MANAGEMENT'S PLAN | NOTE 2: MANAGEMENT'S PLAN As of November 30, 2017, the Company had $1,776,482 in cash and cash equivalents, $756,766 in accounts receivable and a backlog of $400,699 in unshipped product. This year, Seychelle has expanded its sales efforts in the following international markets; Mexico, Sri Lanka, Vietnam, South Korea, Australia, New Zealand, Japan and China. Managements intends to expand marketing activities in international markets and E-commerce. In addition, Seychelle continues to manage cost in line with current revenue. |
3. BASIC INCOME (LOSS) PER SHAR
3. BASIC INCOME (LOSS) PER SHARE | 9 Months Ended |
Nov. 30, 2017 | |
Earnings Per Share [Abstract] | |
BASIC INCOME (LOSS) PER SHARE | NOTE 3: BASIC INCOME (LOSS) PER SHARE Basic income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during each period presented. Diluted income (loss) per share is determined using the weighted average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. In periods when losses are reported, the weighted average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. The dilutive effect of outstanding stock options and warrants is reflected in diluted earnings per share by application of the treasury stock method. The denominator for diluted income (loss) per share for the periods ended November 30, 2017 and 2016, respectively, did not include 6,407,221 warrants as they would have been anti-dilutive. For the nine months ended November 30, 2017 2016 Numerator: Net income (loss) available to common shareholders $ 491,995 $ (877,041 ) Weighted average shares – basic 26,574,313 26,574,313 Net income (loss) per share – basic $ 0.02 $ (0.03 ) 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 $ (0.03 ) For the three months ended November 30, 2017 2016 Numerator: Net income (loss) available to common shareholders $ 246,618 $ (284,230 ) Weighted average shares – basic 26,574,313 26,574,313 Net income (loss) per share – basic $ 0.01 $ (0.01 ) Dilutive effect of common stock equivalents: Warrants - - Weighted average shares – diluted 26,574,313 26,574,313 Net income (loss) per share – diluted $ 0.01 $ (0.01 ) |
4. COMMON STOCK
4. COMMON STOCK | 9 Months Ended |
Nov. 30, 2017 | |
Notes to Financial Statements | |
COMMON STOCK | NOTE 4: COMMON STOCK During the nine month period ended November 30, 2016, 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. No shares were issued to employees during the current fiscal year. |
5. INVENTORY
5. INVENTORY | 9 Months Ended |
Nov. 30, 2017 | |
Notes to Financial Statements | |
INVENTORY | NOTE 5: INVENTORY The Company's inventory consisted of the following at November 30, 2017 and February 28, 2017: November 30, 2017 February 28, 2017 Raw materials $ 716,182 $ 1,034,406 Finished goods 259,191 387,465 Net inventory $ 975,373 $ 1,421,871 |
6. CONCENTRATIONS
6. CONCENTRATIONS | 9 Months Ended |
Nov. 30, 2017 | |
Notes to Financial Statements | |
CONCENTRATIONS | NOTE 6: CONCENTRATIONS Sales to one customer accounted for 33% and 32% of sales for the three and nine month periods ended November 30, 2017, respectively. Accounts receivable from one customer amounted to $583,779 or approximately 89% of accounts receivable as of November 30, 2017. Sales to one customer accounted for 38% and 37%, respectively, of sales for the three and nine month period ended November 30, 2016. Accounts receivable from this customer amounted to $518,242 or 59% of accounts receivable as of November 30, 2016. |
7. INCOME TAXES
7. INCOME TAXES | 9 Months Ended |
Nov. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 7: INCOME TAXES We recorded a provision for income taxes of $0 for the quarter ended November 30, 2017, related to federal and state taxes, based on the Company's expected annual effective tax rate and utilization of net operating loss carried forward. The Company expects its effective tax rate for the 2018 fiscal year to be different from the federal statutory rate due primarily to a change in the income tax valuation allowance. Management evaluated the need for a full valuation allowance at the end of the quarter ended November 30, 2017. Management evaluated both positive and negative evidence. The weight of negative factors and level of economic uncertainty in our current business continues to support the conclusion that the realization of our deferred tax assets does not meet the "more likely than not" standard. Therefore, a full valuation allowance remains against the net deferred tax assets. Our federal income tax returns are open to audit under the statute of limitations for the fiscal years ended February 2014 through 2017. We are subject to income tax in California and various other state taxing jurisdictions. Our state income tax returns are open to audit under the statute of limitations for the fiscal years ended February 2014 through 2017. |
8. RELATED PARTY TRANSACTIONS
8. RELATED PARTY TRANSACTIONS | 9 Months Ended |
Nov. 30, 2017 | |
Notes to Financial Statements | |
RELATED PARTY TRANSACTIONS | NOTE 8: RELATED PARTY TRANSACTIONS During the three month periods ended November 30, 2017 and 2016, the Company incurred consulting fees to related parties in the amounts of $0 and $12,350, respectively. During the nine month periods ended November 30, 2017 and 2016, the Company incurred consulting fees to related parties in the amounts of $0 and $49,090 respectively. These fees from TAM Irrevocable Trust ("TAM") were related to consulting services from TAM, in which Cari Beck is trustee. Ms. Beck is a current Board member of the Company, as well as daughter of Carl Palmer, Chief Executive Officer and Board member of the Company. These amounts are included as a component of selling, general and administrative expenses on the condensed consolidated statements of operations. All amounts due to TAM have been paid in full. During the three months ended November 30, 2017 and 2016, TAM purchased, on behalf of the Company, $0 and $61,884, respectively, of raw materials from a vendor with which it already had a business relationship. During the nine months ended November 30, 2017 and 2016, TAM purchased, on behalf of the Company, $0 and $86,734, respectively, of raw materials from the same vendor. The Company utilizes the services of an individual, who is a related party, to source materials and provide the manufacturing of component parts with third-party vendors in China. For the three months ended November 30, 2017 and 2016, purchases facilitated through the related party accounted for approximately 27% and 16% of total Company raw materials purchases. For the nine months ended November 30, 2017 and 2016, purchases facilitated through the related party accounted for approximately 22% and 33%, respectively, of total Company raw material purchases. As of November 30, 2017 and February 28, 2017, the Company had receivables from employees of approximately $26,750 and $27,200. These amounts are being repaid through direct payroll withdrawals. |
9. COMMITMENTS AND CONTINGENCIE
9. COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Nov. 30, 2017 | |
Notes to Financial Statements | |
COMMITMENTS AND CONTINGENCIES | NOTE 9: COMMITMENTS AND CONTINGENCIES 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 $19,000. |
10. SUBSEQUENT EVENTS
10. SUBSEQUENT EVENTS | 9 Months Ended |
Nov. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 10: SUBSEQUENT EVENTS Management has evaluated subsequent events from November 30, 2017 through the date the condensed consolidated financial statements were issued, and has concluded that no subsequent events have occurred that would require recognition or disclosure in these condensed consolidated financial statements. |
3. BASIC INCOME (LOSS) PER SH16
3. BASIC INCOME (LOSS) PER SHARE (Tables) | 9 Months Ended |
Nov. 30, 2017 | |
Earnings Per Share [Abstract] | |
Basic and Diluted income (loss) per share | The denominator for diluted income (loss) per share for the periods ended November 30, 2017 and 2016, respectively, did not include 6,407,221 warrants as they would have been anti-dilutive. For the nine months ended November 30, 2017 2016 Numerator: Net income (loss) available to common shareholders $ 491,995 $ (877,041 ) Weighted average shares – basic 26,574,313 26,574,313 Net income (loss) per share – basic $ 0.02 $ (0.03 ) 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 $ (0.03 ) For the three months ended November 30, 2017 2016 Numerator: Net income (loss) available to common shareholders $ 246,618 $ (284,230 ) Weighted average shares – basic 26,574,313 26,574,313 Net income (loss) per share – basic $ 0.01 $ (0.01 ) Dilutive effect of common stock equivalents: Warrants - - Weighted average shares – diluted 26,574,313 26,574,313 Net income (loss) per share – diluted $ 0.01 $ (0.01 ) |
5. INVENTORY (Tables)
5. INVENTORY (Tables) | 9 Months Ended |
Nov. 30, 2017 | |
Inventory Tables | |
Inventory | November 30, 2017 February 28, 2017 Raw materials $ 716,182 $ 1,034,406 Finished goods 259,191 387,465 Net inventory $ 975,373 $ 1,421,871 |
3. BASIC INCOME (LOSS) PER SH18
3. BASIC INCOME (LOSS) PER SHARE (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2017 | Nov. 30, 2016 | Nov. 30, 2017 | Nov. 30, 2016 | |
Numerator: | ||||
Net (loss) income available to common shareholders | $ 26,574,313 | $ 26,574,313 | $ 26,574,313 | $ 26,574,313 |
Weighted average shares, basic | 0.01 | (0.01) | 0.02 | (0.03) |
Dilutive effect of common stock equivalents: | ||||
Warrants | ||||
Weighted average shares, diluted | 26,574,313 | 26,574,313 | 26,574,313 | 26,574,313 |
Net income (loss) per share - diluted | $ 0.01 | $ (0.01) | $ 0.02 | $ (0.03) |
4. COMMON STOCK (Details)
4. COMMON STOCK (Details) | 9 Months Ended |
Nov. 30, 2017USD ($)shares | |
Common Stock Purchase Warrants Details | |
Number of restricted common shares issued to employee | shares | 250,000 |
Value/expense of restricted common shares issued to employee | $ | $ 117,500 |
5. INVENTORY (Details)
5. INVENTORY (Details) - USD ($) | Jan. 11, 2018 | Feb. 28, 2017 |
Inventory Details | ||
Raw materials | $ 716,182 | $ 1,034,406 |
Finished goods | 259,191 | 387,465 |
Inventory, Net | $ 975,373 | $ 1,421,871 |
2. MANAGEMENT'S PLAN (Details N
2. MANAGEMENT'S PLAN (Details Narrative) - USD ($) | Aug. 31, 2017 | Feb. 28, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Cash | $ 1,292,183 | $ 732,112 |
Accounts receivable | 596,744 | |
Backlog of unshipped product | $ 379,346 | $ 465,000 |
4.COMMON STOCK AND WARRANTS (De
4.COMMON STOCK AND WARRANTS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2017 | Nov. 30, 2016 | Nov. 30, 2017 | Nov. 30, 2016 | |
Common Stock Purchase Warrants Details Narrative | ||||
Expense charged to operations for warrants | $ 0 | $ 67,200 | $ 0 | $ 134,200 |
6. CONCENTRATIONS (Details Narr
6. CONCENTRATIONS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2017 | Nov. 30, 2016 | Nov. 30, 2017 | Nov. 30, 2016 | |
Concentrations Details Narrative | ||||
Percentage of sales attributable to one customer | 33.00% | 38.00% | 32.00% | 37.00% |
Accounts receivable from one customer | $ 583,779 | $ 518,242 | $ 583,779 | $ 518,242 |
Percentage of accounts receivable attributable to one customer | 89.00% | 59.00% | 89.00% | 59.00% |
8. RELATED PARTY TRANSACTIONS (
8. RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2017 | Nov. 30, 2016 | Nov. 30, 2017 | Nov. 30, 2016 | |
Related Party Transactions Details Narrative | ||||
Payments to Irrevocable Trust for consulting services in which Cari Beck is a trustee as well as the daughter of the Company's President | $ 0 | $ 12,350 | $ 0 | $ 49,090 |
Raw materials purchesed by TAM on behalf of the company | $ 0 | $ 61,884 | $ 0 | $ 86,734 |
Percent source matierials purchased manufacturing | 27.00% | 16.00% | 22.00% | 33.00% |
Receivables due from employees | $ 26,750 | $ 27,200 | $ 26,750 | $ 27,200 |
7. INCOME TAXES (Details Narrat
7. INCOME TAXES (Details Narrative) | 3 Months Ended |
Nov. 30, 2017USD ($) | |
Income Tax Disclosure [Abstract] | |
Provision for income taxes | $ 0 |
Net operating loss | $ 0 |
9. COMMITMENTS AND CONTINGENC26
9. COMMITMENTS AND CONTINGENCIES (Details) | 9 Months Ended |
Nov. 30, 2017USD ($) | |
Commitments And Contingencies Details | |
Aproximate lease payments per month | $ 19,000 |
Lease term | 5 years |