Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Feb. 29, 2016 | May 31, 2016 | Aug. 31, 2015 | |
Document And Entity Information | |||
Entity Registrant Name | AMERICAN COMMERCE SOLUTIONS Inc | ||
Entity Central Index Key | 949,982 | ||
Document Type | 10-K | ||
Document Period End Date | Feb. 29, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --02-29 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 1,157,812,573 | ||
Entity Public Float | $ 757,899 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Feb. 29, 2016 | Feb. 28, 2015 |
CURRENT ASSETS: | ||
Cash | $ 36,370 | $ 44,697 |
Accounts receivable | $ 165,004 | 101,507 |
Accounts receivable, factored | 10,389 | |
Inventories | $ 191,147 | 288,441 |
Note receivable, related party | 1,009,792 | 1,009,792 |
Due from related party | 893,714 | 803,585 |
Other receivables | 7,039 | $ 6,103 |
Prepaid expenses | 10,193 | |
Total Current Assets | 2,313,259 | $ 2,264,514 |
Property and equipment, net of accumulated depreciation of $3,135,344 and $2,976,631, respectively | 2,380,718 | 2,518,990 |
OTHER ASSETS: | ||
Investment in equity securities, available for sale | 65,300 | 59,364 |
Total Other Assets | 65,300 | 59,364 |
TOTAL ASSETS | 4,759,277 | 4,842,868 |
CURRENT LIABILITIES: | ||
Accounts payable, including related party payables of $12,404 and $645, respectively | 101,013 | 76,157 |
Accrued expenses, including related party balances of $4,044 and $10,000, respectively | 72,059 | 44,018 |
Accrued interest, including related party balances of $2,321 and $48,692, respectively | 319,852 | 344,413 |
Current portion of notes payable | 652,296 | 248,251 |
Total Current Liabilities | $ 1,145,220 | 712,839 |
LONG-TERM LIABILITIES: | ||
Notes payable, net of current portion | 434,904 | |
Notes payable, related party, net of current portion | $ 298,634 | 373,024 |
Due to stockholders | 1,833,809 | 1,601,910 |
Total Long-Term Liabilities | 2,132,443 | 2,409,838 |
Total Liabilities | $ 3,277,663 | $ 3,122,677 |
STOCKHOLDERS' EQUITY | ||
Preferred stock; $0; 5,000,000 shares authorized: Series A; cumulative and convertible; $0.001 par value; 600 shares authorized 102 shares issued and outstanding; liquidating preference $376,125 | ||
Preferred stock; $0; 5,000,000 shares authorized: Series B; cumulative and convertible; $0.001 par value; 3,950 shares authorized 3,944 shares issued and outstanding; liquidating preference $3,944,617 | $ 3 | $ 3 |
Common stock, $0.002 par value; 1,500,000,000 shares authorized; 1,157,812,573 and 1,157,812,573 shares issued and 1,157,290,573 and 1,157,290,573 shares outstanding, respectively | 2,315,626 | 2,315,626 |
Additional paid-in capital | 19,063,073 | 19,063,073 |
Stock subscription receivable | (10,000) | (10,000) |
Accumulated other comprehensive loss | 33,222 | 27,286 |
Accumulated deficit | (19,654,784) | (19,410,271) |
Total | 1,747,140 | 1,985,717 |
Treasury stock at cost; 522,000 shares of common stock | (265,526) | (265,526) |
Total Stockholders' Equity | 1,481,614 | 1,720,191 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 4,759,277 | $ 4,842,868 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Feb. 29, 2016 | Feb. 28, 2015 |
CURRENT ASSETS: | ||
Accumulated depreciation | $ 3,135,344 | $ 2,976,631 |
CURRENT LIABILITIES: | ||
Accounts payable, related party | 12,404 | 645 |
Accrued expenses, related party | 4,044 | 10,000 |
Accrued interest, related party | $ 2,321 | $ 48,692 |
STOCKHOLDERS' EQUITY | ||
Preferred stock shares authorized | 5,000,000 | 5,000,000 |
Series A; cumulative and convertible stock, par value | $ 0.001 | $ 0.001 |
Series A; cumulative and convertible Preferred stock, authorized | 600 | 600 |
Series A; cumulative and convertible stock, issued | 102 | 102 |
Series A; cumulative and convertible stock, outstanding | 102 | 102 |
Series A; cumulative and convertible stock, liquidating preference | $ 376,125 | $ 376,125 |
Series B; cumulative and convertible stock, par value | $ 0.001 | $ 0.001 |
Series B; cumulative and convertible Preferred stock, authorized | 3,950 | 3,950 |
Series B; cumulative and convertible stock, issued | 3,944 | 3,944 |
Series B; cumulative and convertible stock, outstanding | 3,944 | 3,944 |
Series B; cumulative and convertible stock, liquidating preference | $ 3,944,617 | $ 3,944,617 |
Common stock, par value | $ 0.002 | $ 0.002 |
Common stock, share authorized | 1,500,000,000 | 1,500,000,000 |
Common stock, share issued | 1,157,812,573 | 1,157,812,573 |
Common stock, share outstanding | 1,157,290,573 | 1,157,290,573 |
Treasury stock | 522,000 | 522,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) | 12 Months Ended | |
Feb. 29, 2016 | Feb. 28, 2015 | |
REVENUE: | ||
Net sales | $ 2,053,256 | $ 2,239,355 |
Total | 2,053,256 | 2,239,355 |
COST OF GOODS SOLD | 1,000,383 | 1,077,373 |
GROSS MARGIN | 1,052,873 | 1,161,982 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 1,307,875 | 1,323,467 |
LOSS FROM OPERATIONS | (255,002) | (161,485) |
OTHER INCOME (EXPENSE) | ||
Gain on extinguishment of debt | 56,051 | 13,500 |
Other income (expense) | 4,942 | 29,080 |
Interest expense | (81,210) | (90,360) |
Interest income | 30,706 | 24,354 |
TOTAL OTHER EXPENSE (INCOME) | 10,489 | (23,426) |
NET LOSS | (244,513) | (184,911) |
OTHER COMPREHENSIVE INCOME (LOSS): | ||
Unrealized loss on fair value of investment | 5,936 | 27,286 |
COMPREHENSIVE LOSS | $ (238,577) | $ (157,625) |
NET (LOSS) INCOME PER COMMON SHARE, BASIC AND DILUTED | $ 0 | $ 0 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED | 1,157,812,573 | 1,145,789,302 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Preferred Stock | Common Stock | Additional Paid-In Capital | Stock Subscription Receivable | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Treasury Stock | Total |
Beginning Balance, Shares at Feb. 28, 2014 | 3,944 | 1,036,243,946 | ||||||
Beginning Balance, Amount at Feb. 28, 2014 | $ 3 | $ 2,072,489 | $ 19,017,210 | $ (10,000) | $ (19,225,360) | $ (265,526) | $ 1,588,816 | |
Unrealized gain on investment | $ 27,286 | 27,286 | ||||||
Issuance of shares of common stock in conversion of debt, Shares | 117,647,058 | |||||||
Issuance of shares of common stock in conversion of debt, Amount | $ 235,294 | $ 64,706 | 300,000 | |||||
Issuance of shares of common stock in conversion of liability, Shares | 3,921,569 | |||||||
Issuance of shares of common stock in conversion of liability, Amount | $ 7,843 | 2,157 | 10,000 | |||||
Reverse capital contribution | $ (21,000) | (21,000) | ||||||
Net loss | $ (184,911) | (184,911) | ||||||
Ending Balance, Shares at Feb. 28, 2015 | 3,944 | 1,157,812,573 | ||||||
Ending Balance, Amount at Feb. 28, 2015 | $ 3 | $ 2,315,626 | $ 19,063,073 | $ (10,000) | $ 27,286 | $ (19,410,271) | $ (265,526) | 1,720,191 |
Unrealized gain on investment | $ 5,936 | $ 5,936 | ||||||
Issuance of shares of common stock in conversion of debt, Shares | ||||||||
Issuance of shares of common stock in conversion of debt, Amount | ||||||||
Issuance of shares of common stock in conversion of liability, Shares | ||||||||
Issuance of shares of common stock in conversion of liability, Amount | ||||||||
Net loss | $ (244,513) | $ (244,513) | ||||||
Ending Balance, Shares at Feb. 29, 2016 | 3,944 | 1,157,812,573 | ||||||
Ending Balance, Amount at Feb. 29, 2016 | $ 3 | $ 2,315,626 | $ 19,063,073 | $ (10,000) | $ 33,222 | $ (19,654,784) | $ (265,526) | $ 1,481,614 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Feb. 29, 2016 | Feb. 28, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (244,513) | $ (184,911) |
Adjustments to reconcile net loss to net cash and cash equivalents used by operating activities: | ||
Depreciation | $ 162,612 | 195,475 |
Amortization of loan costs | 3,082 | |
Investment received for services | (27,500) | |
Gain on extinguishment of debt and liability | $ (56,051) | (13,500) |
Loss on disposal of equipment | 570 | |
(Increase) decrease in: | ||
Accounts receivables | $ (63,497) | (18,355) |
Inventories | 97,294 | $ 30,907 |
Prepaid expenses | (10,193) | |
Other assets | (936) | $ 3,383 |
Increase (decrease) in: | ||
Accounts payable and accrued expenses | 84,387 | (15,799) |
Net cash used by operating activities | (30,897) | (26,648) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Increase in due from related party | (90,129) | (79,795) |
Acquisition of property and equipment | (24,340) | (59,805) |
Net cash used by investing activities | (114,469) | (139,600) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Decrease (increase) in due from factor | 10,389 | 8,801 |
Proceeds from notes payable and long-term debt | 135,816 | 291,848 |
Principal payments on notes payable | (241,065) | (329,835) |
Increase (decrease) in due to stockholders | 231,899 | 232,400 |
Net cash provided by financing activities | 137,039 | 203,214 |
Net (decrease) increase in cash and cash equivalents | (8,327) | 36,966 |
Cash and cash equivalents, beginning of period | 44,697 | 7,731 |
Cash and cash equivalents, end of period | 36,370 | 44,697 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash paid for interest | $ 49,720 | 51,714 |
NON-CASH FINANCING AND INVESTING ACTIVITIES: | ||
Conversion of liability to equity | 300,000 | |
Conversion of debt to equity | 10,000 | |
Unrealized gain on investment | $ 5,936 | 27,286 |
Reversal of capital contribution | $ 21,000 |
BACKGROUND INFORMATION
BACKGROUND INFORMATION | 12 Months Ended |
Feb. 29, 2016 | |
Notes to Financial Statements | |
Note 1. BACKGROUND INFORMATION | American Commerce Solutions, Inc., located and operating in West Central Florida, was incorporated in Rhode Island in 1991 under the name Jaque Dubois, Inc., and was re-incorporated in Delaware in 1994. In July 1995, Jaque Dubois, Inc. changed its name to JD American Workwear, Inc. In December 2000, the stockholders voted at the annual stockholders meeting to change the name of JD American Workwear, Inc. to American Commerce Solutions, Inc. (the "Company"). In August 2012, the Company was reincorporated in Florida. The Company is primarily a holding company with a wholly owned subsidiary; International Machine and Welding, Inc. which is engaged in the machining and fabrication of parts used in heavy industry, and parts sales and service for heavy construction equipment. |
GOING CONCERN
GOING CONCERN | 12 Months Ended |
Feb. 29, 2016 | |
Notes to Financial Statements | |
Note 2. GOING CONCERN | The Company has incurred substantial operating losses since inception resulting in an accumulated deficit. Additionally, the Company is in default on several notes payable. These factors raise substantial doubt about the Company's ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon its ability to reverse negative operating trends, raise additional capital, and obtain debt financing. Management has revised its business strategy to include expansion into other lines of business through the acquisition of other companies in exchange for the Company's stock to facilitate manufacturing contracts under negotiation. In conjunction with the anticipated new contracts, management is currently negotiating new debt and equity financing, the proceeds from which would be used to settle outstanding debts at more favorable terms, to finance operations, and to complete additional business acquisitions. However, there can be no assurance that the Company will be able to raise capital, obtain debt financing, or improve operating results sufficiently to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary if the Company is unable to continue as a going concern. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Feb. 29, 2016 | |
Notes to Financial Statements | |
Note 3. SIGNIFICANT ACCOUNTING POLICIES | The significant accounting policies followed are: Principles of Consolidation The accompanying consolidated financial statements include the activity of the Company and its wholly owned subsidiary, International Machine and Welding. All intercompany transactions have been eliminated in consolidation. Use of Estimates 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 amount 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 period. Actual results could differ from those estimates. Cash and Cash Equivalents For the purpose of the financial statements cash equivalents include all highly liquid investments with maturity of three months or less. Cash and cash equivalents were $44,697 and $7,731 at February 29, 2016 and February 28, 2015, respectively. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of accounts receivable, notes receivable, and related party notes. Customer Concentration The Company generates a significant amount of revenues from sales and services provided to three different industries. The construction industry accounted for approximately 22% of revenues in fiscal 2016 compared to 22% in fiscal 2015 while the industrial and mining industries accounted for approximately 28% and 49% in fiscal 2016 compared to 26% and 51% in fiscal 2015, respectively, of the total revenues. Although the Company does not rely on a single customer, during the year ended February 29, 2016, one of the Company's customers accounted for approximately 42% of total revenues. This customer was Mosaic Company. Accounts Receivable Trade. Accounts receivable consist of billed and uncollected services or products. The Company records an allowance for doubtful accounts to allow for any amounts that may not be recoverable, which is based on an analysis of the Company's prior collection experience, customer credit worthiness, and current economic trends. Based on management's review of accounts receivable, no allowance for doubtful accounts is considered necessary at February 29, 2016 or February 28, 2015. The Company does not charge significant amounts of interest on past due receivables. Factored. The Company accounts for its factoring of accounts receivable by selling and assigning all rights, title, and interest to certain of the Company's accounts receivable. The Company receives 80% of all approved invoices sold to the Factoring Company, who assumes the credit risk. Based on the Factoring Company's collections of these invoices the Company may receive additional consideration of up to 18%. The Company records the 80% as payment against the invoices sold and records 20% as an amount due from Factoring Company. Once the invoice exceeds 120 days outstanding, the remaining 20% of the receivable is recorded as expense. The Company terminated the factoring of accounts receivable on January 25, 2016. Inventory The Company follows FASB ASC 330, "Inventory". Property and Equipment The Company follows ASC 360, Property, Plant, and Equipment, Building and improvements 15 - 39 years Machine and equipment 5 -30 years Office furniture and equipment 5 - 10 years Trucks and vehicles 5 - 7 years Maintenance and repairs are charged to operations when incurred. Betterments and renewals are capitalized. When property and equipment are sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and any gain or loss is included in operations. Notes Payable Direct costs incurred with the issuance of notes payable are deferred and amortized over the life of the guaranty. For the years ended February 29, 2016 and February 28, 2015, the Company incurred amortization expense of $0 and $3,082, respectively. Shipping and Handling The Company records amounts billed to customers for shipping and handling costs as sales revenue. Costs incurred by the Company for shipping and handlings are included in cost of sales. Revenue Recognition In accordance with ASC 605, Revenue Recognition Amounts collected on behalf of governmental authorities for sales taxes and other similar taxes are reported on a net basis. Revenue derived from the sale of products not yet completed and delivered is deferred and recognized as revenue once the product has been delivered to the customer. Long-lived Assets Long-lived assets (which excludes goodwill and other indefinite-lived intangible assets) are assessed for impairment IAW ASC 360, Property and equipment when an indicator of impairment exists. The Company periodically evaluates whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, the Company uses market quotes, if available or an estimate of the future undiscounted net cash flows of the related asset or asset group over the remaining life in measuring whether or not the asset values are recoverable. There have been no significant impairments of long-lived assets during the years ended February 29, 2016 and February 28, 2015. Financial Instruments The Company's balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization. ASC 820 Fair Value Measurements and Disclosures defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity's own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: ● Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. ● Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. ● Level 3 - Inputs that are both significant to the fair value measurement and unobservable. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of February 29, 2016. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accounts receivable, other current assets, accounts payable, accrued compensation and accrued expenses. The fair value of the Company's notes payable is estimated based on current rates that would be available for debt of similar terms which is not significantly different from its stated value. Commitments and Contingencies The Company follows ASC 450-20 , Loss Contingencies Deferred Income Taxes and Valuation Allowance The Company accounts for income taxes under ASC 740 Income Taxes No deferred tax assets or liabilities were recognized as of February 29, 2016 and February 28, 2015. Share-based Expense ASC 718, Compensation Stock Compensation The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity Based Payments to Non-Employees. Share-based expense for each of the years ended February 29, 2016 and February 28, 2015 was $0. Earnings (Loss) per Share The Company records stock as issued at the time consideration is received or the obligation is incurred. The Company computes basic and diluted earnings per share amounts in accordance with ASC Topic 260, Earnings per Share The Company does not have any potentially dilutive instruments as of February 29, 2016 and, thus, anti-dilution issues are not applicable. Related Parties The Company follows ASC 850, Related Party Disclosures, Recent Pronouncements From time to time, new accounting pronouncements are issued that we adopt as of the specified effective date. We believe that the impact of recently issued standards that are not yet effective may have an impact on our results of operations and financial position. ASU Update 2014-09 Revenue from Contracts with Customers ASU Update 2014-15 Presentation of Financial Statements Going Concern In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest: Simplifying the Presentation of Debt Issuance Cost. In July 2015- FASB issued ASU 2015-11, Inventory In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes, In February 2016, the FASB issued ASU 2016-02, Leases, The amendments in ASU 2016-02 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earlies comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. The Company is evaluating the potential impact of ASU 2016-02 on its Consolidated Financial Statements. |
ACCOUNTS RECEIVABLE, FACTORED
ACCOUNTS RECEIVABLE, FACTORED | 12 Months Ended |
Feb. 29, 2016 | |
Notes to Financial Statements | |
Note 4. ACCOUNTS RECEIVABLE, FACTORED | During the years ended February 29, 2016 and February 28, 2015, the Company factored receivables of approximately $214,200 and $477,800, respectively. In connection with the factoring agreement, the Company incurred fees of approximately $6,800 and $14,700 during the years ended February 29, 2016 and February 28, 2015, respectively. Any and all of the Company's indebtedness and obligations to the Factoring Company is guaranteed by two stockholders and collateralized by the Company's inventory and fixed assets. The Company terminated the factoring of accounts receivable on January 25, 2016. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Feb. 29, 2016 | |
Notes to Financial Statements | |
Note 5. INVENTORIES | Inventories consist of the following: February 29, 2016 February 28, 2015 Work-in process $ 14,445 $ 17,888 Finished goods 176,702 270,553 Raw materials Total inventories $ 191,147 $ 288,441 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Feb. 29, 2016 | |
Notes to Financial Statements | |
Note 6. PROPERTY AND EQUIPMENT | Property and equipment consist of the following: February 29, 2016 February 28, 2015 Land $ 186,045 $ 186,045 Building and improvements 2,814,744 2,814,744 Machinery and equipment 2,265,910 2,249,671 Office furniture and equipment 58,317 57,527 Trucks and automobiles 191,046 187,634 5,516,062 5,495,621 Less accumulated depreciation 3,135,344 2,976,631 $ 2,380,718 $ 2,518,990 Depreciation expense for the years ended February 29, 2016 and February 28, 2015 was $162,612 and $195,475, respectively. |
INVESTMENTS IN EQUITY SECURITIE
INVESTMENTS IN EQUITY SECURITIES | 12 Months Ended |
Feb. 29, 2016 | |
Investments In Equity Securities | |
Note 7. INVESTMENTS IN EQUITY SECURITIES | Investments in equity securities as of February 29, 2016 and February 28, 2015 are summarized based on the primary industry of the investee in the table below: Cost Basis Umealized Gains Umealized Fair Value February 29, 2016 Commercial, industrial other $ 32,078 $ 33,222 $ - $ 65,300 February 28, 2015 Commercial, industrial other $ 32,078 $ 27,286 $ - $ 59,364 |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Feb. 29, 2016 | |
Notes to Financial Statements | |
Note 8. NOTES PAYABLE | Notes payable consist of: February 29, 2016 February 28, 2015 Notes payable to the parents of the former president of the Company, stockholders; 10% interest, past maturity. $ 185,291 * $ 185,291 Notes payable to the parents and sister of the former president of the Company; stockholders; 10% interest; past maturity. 31,697 * 31,697 Note payable; related party; 8% interest; due May 2017; secured by common stock 298,634 351,955 Note payable; related party; 6% interest; due May 2017; secured by common stock - 21,069 Note payable to a financial institution; 6.0% interest; monthly principal and interest payments of $4,865; collateralized by fixed assets; due June 24, 2016 435,308 466,167 950,930 1,056,179 Less current portion (652,296 ) (248,251 ) $ 298,634 $ 807,928 Notes payable $ 652,296 $ 683,155 Notes payable, related parties 298,634 373,024 $ 950,930 $ 1,056,179 *As of February 29, 2016, the notes payable listed above include notes in default totaling $216,988. The aggregate principal maturing in subsequent years is: Year Ending February 28, 2017 652,296 2018 298,634 2019 2020 2021 Thereafter $ 950,930 At February 29, 2016 and February 28, 2015, the above notes payable to related parties in the amount of $298,634 and $373,024, respectively, are not necessarily indicative of the terms and amounts that would have been incurred had comparable agreements been made with independent parties. |
EQUITY
EQUITY | 12 Months Ended |
Feb. 29, 2016 | |
Notes to Financial Statements | |
Note 9. EQUITY | Preferred Stock - Series A Holders of Series A convertible preferred stocks vote on a converted basis with the common stockholders on all matters to be brought to a vote of the stockholders. Each share of Series A convertible preferred stock can be converted into 1,289 shares of common stock. Dividends are payable in kind at the Company's option at a rate of ten percent annually. Payments of annual dividends have been deferred by the Company's Board of Directors on the outstanding Series A shares because of losses sustained by the Company. As of February 29, 2016, preferred dividends in arrears amounted to $118,377 or $1,161 per share. Preferred Stock - Series B The Series B convertible preferred stock has rights to receive cumulative six percent in kind dividends in preference to the payment of dividends on all other shares of capital stock of the Company. No dividends may be declared or paid on any other shares of stock until the full amount of the cumulative dividends on the Series B preferred stock has been paid. Each share of Series B convertible preferred stock can be converted into 1,000 shares of common stock. Cumulative dividends amounted to $4,075,255 at February 29, 2016. Dividends may be paid in stock at a conversion rate of $1.00 per share. For the years ended February 29, 2016 and February 28, 2015, no dividends were paid with additional shares of preferred stock. Holders of Series B preferred stock vote on a converted basis with the common stockholders on all matters to be brought to a vote of the stockholders. The Series B preferred stockholders are entitled to elect one director out of the seven authorized directors of the Company's board. Common Stock The following transactions with our officer's and a related party, in the aggregate amount of $310,000 and 121,568,627 shares of common stock, were reported in Form S8 as filed with the Securities and Exchange Commission on May 1, 2014: During the year ended February 28, 2015, two executives who are stockholders of the Company deferred $232,400 of compensation earned during this period. The balance due to stockholders at February 29, 2016 and February 28, 2015, totaled $1,833,809 and $1,601,910, respectively. The amounts are unsecured, non-interest bearing, and have no specific repayment terms; however, the Company does not expect to repay these amounts within the next year. During the year ended February 28, 2015, the Company issued a total of 58,823,529 shares of common stock to each of the executives valued at $0.0051, in exchange for the reduction $300,000 of deferred compensation. In April 2014, the Company exchanged $10,000 of debt due to the related party for 3,921,569 shares of common stock. The shares were valued at $0.0051 per share. The Company issued 10,000,000 shares to an unrelated company in good faith negotiation of a potential acquisition. Shares issued were valued at $21,000, or $0.0021 per share, the fair market value at the date of the exchange. Based on an analysis of the transaction, the acquisition was never executed and therefore, the Company has written off the $21,000. Certain notes to related parties have conversion features, whereby, at the holder's option, the notes may be converted, in whole or in part upon written notice, into the Company's common shares at a discount to the fair market value. The Company considered the value of the beneficial conversion features of the notes, and when deemed material, recorded the beneficial conversion value as deferred financing costs and amortized the amount over the period of the loan, charging interest expense. The convertible notes are to related parties, who have the majority of the voting rights. The related parties have waived their conversion rights since the inception of these notes until such time that the Company's market price of shares rise sufficiently or the Company amends the capital structure (through a reverse split or increase in the authorized shares) or combination of all factors, whereby a conversion of any single note, or portion thereof, will not exceed the authorized shares of the Company. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Feb. 29, 2016 | |
Notes to Financial Statements | |
Note 10. INCOME TAXES | The Company has incurred significant operating losses since its inception and, therefore, no tax liabilities have been incurred for the periods presented. As of February 29, 2016, the amount of unused tax losses available to carry forward and apply against taxable income in future years totaled approximately $19,655,000. The loss carry forwards began expiring in 2008. Due to the Company's continued losses, management has established a valuation allowance equal to the amount of deferred tax asset because it is more likely than not that the Company will not realize this benefit. Temporary differences giving rise to the deferred tax assets, are as follows: February 29, 2016 February 28, 2015 Unused operating loss carryforwards $ 7,873,700 $ 7,791,000 Valuation allowance (7,873,700 ) (7,791,000 ) $ $ The valuation allowance increased by $82,700 during the year ended February 29, 2016. Differences between the federal benefits computed at a statutory rate and the Company's effective tax rate and provision are as follows for the years ended February 29, 2016 and February 28, 2015. 2016 2015 Statutory benefit $ (74,000 ) $ (62,800 ) State tax benefit, net of federal effect (8,700 ) (9,200 ) Nondeductible expenses Increase in deferred income tax valuation allowance 82,700 72,000 $ $ The Internal Revenue Code contains provisions that may limit the net operating loss carry forwards available for use in any given year if significant changes in ownership interest of the Company occur. We are subject to income tax audits by the Internal Revenue Service for the years 2014 2016. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Feb. 29, 2016 | |
Notes to Financial Statements | |
Note 11. RELATED PARTY TRANSACTIONS | During the years ended February 29, 2016 and February 28, 2015, two executives who are stockholders of the Company deferred $231,899 and $232,400, respectively, of compensation earned during the year. The balance due to stockholders at February 29, 2016 and February 28, 2015, totaled $1,833,809 and $1,601,910, respectively. The amounts are unsecured, non-interest bearing, and have no specific repayment terms; however, the Company does not expect to repay these amounts within the next year. During the year ended February 28, 2015, the Company issued 58,823,529 shares of common stock in settlement of $300,000 of deferred compensation to each of the two executives. The stock was valued at $0.0051. Note receivable, related party balance at February 29, 2016 and February 28, 2015 is $1,009,792 is due on demand and can be settled by the related party through the issuance of common stock and therefore, no allowance is considered necessary. Due from related party balance at February 29, 2016 and February 28, 2015 is $893,714 and $803,585, respectively, is due on demand and can be settled by the return of the Company's common stock by the two executives and therefore, no allowance is considered necessary. In April 2014, the Company exchanged $10,000 of debt due to the related parties for 3,921,569 shares of common stock. The shares were valued at $0.0051 per share. The above amounts are not necessarily indicative of the amounts that would have been incurred had comparable transactions been entered into with independent parties. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Feb. 29, 2016 | |
Notes to Financial Statements | |
Note 12. SEGMENT INFORMATION | The Company had two reportable segments during 2016 and 2015; manufacturing and other. For the years ended February 29, 2016 and February 28, 2015 the Company has included segment reporting. For the year ended February 29, 2016, information regarding operations by segment is as follows: Manufacturing Other (a) Total Continuing Operations Revenue $ 2,053,256 $ 2,053,256 Interest expense $ 56,255 24,955 81,210 Depreciation $ 162,612 162,612 Net income (loss) $ 66,400 (310,913 ) (244,513 ) Property and equipment, net of accumulated depreciation $ 2,380,718 - 2,380,718 Segment assets $ 3,047,208 1,712,069 4,759,277 For the year ended February 28, 2015, information regarding operations by segment is as follows: Manufacturing Other (a) Total Continuing Operations Revenue $ 2,239,335 - $ 2,239,355 Interest expense $ 63,031 27,329 90,360 Depreciation $ 195,475 - 195,475 Net income (loss) $ 133,233 (318,144 ) (184,911 ) Property and equipment, net of accumulated depreciation $ 2,518,990 - 2,518,990 Segment assets $ 3,224,955 1,617,913 4,842,868 (a) The "other" segment is mainly related to the holding company expenses and general overhead, as well as the stock based compensation awards. Segment 1, manufacturing, consists of International Machine and Welding, Inc. and derives its revenues from machining operations, sale of parts and service. The manufacturing segment, International Machine and Welding, Inc. has a broad and diverse base of customers. The segment does have a significant customer which accounts for 42% of total sales; the loss of this customer would have a material adverse effect on the segment. Also, this segment generates a significant amount of revenues from sales and services provided to three different industries. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Feb. 29, 2016 | |
Notes to Financial Statements | |
Note 13. SUBSEQUENT EVENTS. | On March 31, 2016, the Company executed a letter agreement pursuant to which the Company acquired Best Way Auto & Truck Rental, Inc. as a wholly owned subsidiary from 3 Sisters Trust. We have agreed to issue 342,709,427 shares of our common stock (a combination of treasury shares and unissued shares), plus an additional number of shares to be determined to provide 3 Sisters Trust with not less than 51% of the issued and outstanding shares of our common stock; provided that the shares to be issued will result in the issue of our entire authorized shares. In connection with the acquisition of Best Way Auto & Truck Rental, Inc., we will divest our interest in International Machine & Welding, Inc., heretofore our sole wholly owned subsidiary, in a transaction with our directors, Daniel Hefner and Robert Maxwell, the terms of which are to be determined. Also, in connection with the acquisition of Best Way Auto & Truck Rental, Inc., our indebtedness to International Machine & Welding, Inc. and to our related parties will be eliminated. On April 13, 2016, Best Way Auto and Truck Rental, Inc., was approved for a credit line of $1.6 million from Fleet Way Leasing Company in Feasterville, PA for the purchase of 70 new vehicles for the Company's rental fleet. This line of credit is based on a 24-month term. Negotiations continue to increase the line to $3.5 million to finance a total of 145 vehicles. On April 27, 2016, Best Way Auto and Truck Rental, Inc., has received an additional $5 million credit line from Fleet Way Leasing Company in Feasterville, PA for use in purchasing an additional 180 vehicles for their new locations, which are scheduled to open in May. On April 25, 2016, the Company appointed William Stamps and Harry Willner to the board of directors. There are no arrangements between the Company and Mr. Stamps or Mr. Willner pursuant to which they were selected as a director, nor have they been named to any committees of the board of directors. Mr. Stamps and Mr. Willner are the CEO and General Manager, respectively, of Fleetway Leasing and Sales Company. Management has evaluated subsequent events through the date the financial statements were issued. Based on our evaluation no other events have occurred requiring adjustment or disclosure. |
SIGNIFICANT ACCOUNTING POLICI20
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Feb. 29, 2016 | |
Significant Accounting Policies Policies | |
Principles of Consolidation | The accompanying consolidated financial statements include the activity of the Company and its wholly owned subsidiary, International Machine and Welding. All intercompany transactions have been eliminated in consolidation. |
Use of Estimates | 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 amount 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 period. Actual results could differ from those estimates. |
Cash and Cash Equivalents | For the purpose of the financial statements cash equivalents include all highly liquid investments with maturity of three months or less. Cash and cash equivalents were $44,697 and $7,731 at February 29, 2016 and February 28, 2015, respectively. |
Concentration of Credit Risk | Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of accounts receivable, notes receivable, and related party notes. |
Customer Concentration | The Company generates a significant amount of revenues from sales and services provided to three different industries. The construction industry accounted for approximately 22% of revenues in fiscal 2016 compared to 22% in fiscal 2015 while the industrial and mining industries accounted for approximately 28% and 49% in fiscal 2016 compared to 26% and 51% in fiscal 2015, respectively, of the total revenues. Although the Company does not rely on a single customer, during the year ended February 29, 2016, one of the Company's customers accounted for approximately 42% of total revenues. This customer was Mosaic Company. |
Accounts Receivable | Trade. Accounts receivable consist of billed and uncollected services or products. The Company records an allowance for doubtful accounts to allow for any amounts that may not be recoverable, which is based on an analysis of the Company's prior collection experience, customer credit worthiness, and current economic trends. Based on management's review of accounts receivable, no allowance for doubtful accounts is considered necessary at February 29, 2016 or February 28, 2015. The Company does not charge significant amounts of interest on past due receivables. Factored. The Company accounts for its factoring of accounts receivable by selling and assigning all rights, title, and interest to certain of the Company's accounts receivable. The Company receives 80% of all approved invoices sold to the Factoring Company, who assumes the credit risk. Based on the Factoring Company's collections of these invoices the Company may receive additional consideration of up to 18%. The Company records the 80% as payment against the invoices sold and records 20% as an amount due from Factoring Company. Once the invoice exceeds 120 days outstanding, the remaining 20% of the receivable is recorded as expense. The Company terminated the factoring of accounts receivable on January 25, 2016. |
Inventory | The Company follows FASB ASC 330, "Inventory". |
Property and Equipment | The Company follows ASC 360, Property, Plant, and Equipment, Building and improvements 15 - 39 years Machine and equipment 5 -30 years Office furniture and equipment 5 - 10 years Trucks and vehicles 5 - 7 years Maintenance and repairs are charged to operations when incurred. Betterments and renewals are capitalized. When property and equipment are sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and any gain or loss is included in operations. |
Notes Payable | Direct costs incurred with the issuance of notes payable are deferred and amortized over the life of the guaranty. For the years ended February 29, 2016 and February 28, 2015, the Company incurred amortization expense of $0 and $3,082, respectively. |
Shipping and Handling | The Company records amounts billed to customers for shipping and handling costs as sales revenue. Costs incurred by the Company for shipping and handlings are included in cost of sales. |
Revenue Recognition | In accordance with ASC 605, Revenue Recognition Amounts collected on behalf of governmental authorities for sales taxes and other similar taxes are reported on a net basis. Revenue derived from the sale of products not yet completed and delivered is deferred and recognized as revenue once the product has been delivered to the customer. |
Long-lived Assets | Long-lived assets (which excludes goodwill and other indefinite-lived intangible assets) are assessed for impairment IAW ASC 360, Property and equipment when an indicator of impairment exists. The Company periodically evaluates whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, the Company uses market quotes, if available or an estimate of the future undiscounted net cash flows of the related asset or asset group over the remaining life in measuring whether or not the asset values are recoverable. There have been no significant impairments of long-lived assets during the years ended February 29, 2016 and February 28, 2015. |
Financial Instruments | The Company's balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization. ASC 820 Fair Value Measurements and Disclosures defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity's own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: ● Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. ● Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. ● Level 3 - Inputs that are both significant to the fair value measurement and unobservable. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of February 29, 2016. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accounts receivable, other current assets, accounts payable, accrued compensation and accrued expenses. The fair value of the Company's notes payable is estimated based on current rates that would be available for debt of similar terms which is not significantly different from its stated value. |
Commitments and Contingencies | The Company follows ASC 450-20 , Loss Contingencies |
Deferred Income Taxes and Valuation Allowance | The Company accounts for income taxes under ASC 740 Income Taxes No deferred tax assets or liabilities were recognized as of February 29, 2016 and February 28, 2015. |
Share-based Expense | ASC 718, Compensation Stock Compensation The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity Based Payments to Non-Employees. Share-based expense for each of the years ended February 29, 2016 and February 28, 2015 was $0. |
Earnings (Loss) per Share | The Company records stock as issued at the time consideration is received or the obligation is incurred. The Company computes basic and diluted earnings per share amounts in accordance with ASC Topic 260, Earnings per Share The Company does not have any potentially dilutive instruments as of February 29, 2016 and, thus, anti-dilution issues are not applicable. |
Related Parties | The Company follows ASC 850, Related Party Disclosures, |
Recent Pronouncements | From time to time, new accounting pronouncements are issued that we adopt as of the specified effective date. We believe that the impact of recently issued standards that are not yet effective may have an impact on our results of operations and financial position. ASU Update 2014-09 Revenue from Contracts with Customers ASU Update 2014-15 Presentation of Financial Statements Going Concern In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest: Simplifying the Presentation of Debt Issuance Cost. In July 2015- FASB issued ASU 2015-11, Inventory In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes, In February 2016, the FASB issued ASU 2016-02, Leases, The amendments in ASU 2016-02 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earlies comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. The Company is evaluating the potential impact of ASU 2016-02 on its Consolidated Financial Statements. |
SIGNIFICANT ACCOUNTING POLICI21
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Feb. 29, 2016 | |
Significant Accounting Policies Tables | |
Property and Equipment | Building and improvements 15 - 39 years Machine and equipment 5 -30 years Office furniture and equipment 5 - 10 years Trucks and vehicles 5 - 7 years |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Feb. 29, 2016 | |
Inventories Tables | |
Inventories | February 29, 2016 February 28, 2015 Work-in process $ 14,445 $ 17,888 Finished goods 176,702 270,553 Raw materials Total inventories $ 191,147 $ 288,441 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Feb. 29, 2016 | |
Property And Equipment Tables | |
Property and equipment | February 29, 2016 February 28, 2015 Land $ 186,045 $ 186,045 Building and improvements 2,814,744 2,814,744 Machinery and equipment 2,265,910 2,249,671 Office furniture and equipment 58,317 57,527 Trucks and automobiles 191,046 187,634 5,516,062 5,495,621 Less accumulated depreciation 3,135,344 2,976,631 $ 2,380,718 $ 2,518,990 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 12 Months Ended |
Feb. 29, 2016 | |
Notes Payable Tables | |
Notes payable | February 29, 2016 February 28, 2015 Notes payable to the parents of the former president of the Company, stockholders; 10% interest, past maturity. $ 185,291 * $ 185,291 Notes payable to the parents and sister of the former president of the Company; stockholders; 10% interest; past maturity. 31,697 * 31,697 Note payable; related party; 8% interest; due May 2017; secured by common stock 298,634 351,955 Note payable; related party; 6% interest; due May 2017; secured by common stock - 21,069 Note payable to a financial institution; 6.0% interest; monthly principal and interest payments of $4,865; collateralized by fixed assets; due June 24, 2016 435,308 466,167 950,930 1,056,179 Less current portion (652,296 ) (248,251 ) $ 298,634 $ 807,928 Notes payable $ 652,296 $ 683,155 Notes payable, related parties 298,634 373,024 $ 950,930 $ 1,056,179 |
Aggregate principal maturing | Year Ending February 28, 2017 652,296 2018 298,634 2019 2020 2021 Thereafter $ 950,930 |
INVESTMENTS IN EQUITY SECURIT25
INVESTMENTS IN EQUITY SECURITIES (Tables) | 12 Months Ended |
Feb. 29, 2016 | |
Investments In Equity Securities Tables | |
Summary of the Company's Investments in equity securities | Cost Basis Umealized Gains Umealized Fair Value February 29, 2016 Commercial, industrial other $ 32,078 $ 33,222 $ - $ 65,300 February 28, 2015 Commercial, industrial other $ 32,078 $ 27,286 $ - $ 59,364 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Feb. 29, 2016 | |
Income Taxes Tables | |
Temporary differences giving rise to the deferred tax assets | February 29, 2016 February 28, 2015 Unused operating loss carryforwards $ 7,873,700 $ 7,791,000 Valuation allowance (7,873,700 ) (7,791,000 ) $ $ |
Federal benefits computed at a statutory rate and the Company's effective tax rate and provision | 2016 2015 Statutory benefit $ (74,000 ) $ (62,800 ) State tax benefit, net of federal effect (8,700 ) (9,200 ) Nondeductible expenses Increase in deferred income tax valuation allowance 82,700 72,000 $ $ |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Feb. 29, 2016 | |
Segment Information Tables | |
Segment Information | For the year ended February 29, 2016, information regarding operations by segment is as follows: Manufacturing Other (a) Total Continuing Operations Revenue $ 2,053,256 $ 2,053,256 Interest expense $ 56,255 24,955 81,210 Depreciation $ 162,612 162,612 Net income (loss) $ 66,400 (310,913 ) (244,513 ) Property and equipment, net of accumulated depreciation $ 2,380,718 - 2,380,718 Segment assets $ 3,047,208 1,712,069 4,759,277 For the year ended February 28, 2015, information regarding operations by segment is as follows: Manufacturing Other (a) Total Continuing Operations Revenue $ 2,239,335 - $ 2,239,355 Interest expense $ 63,031 27,329 90,360 Depreciation $ 195,475 - 195,475 Net income (loss) $ 133,233 (318,144 ) (184,911 ) Property and equipment, net of accumulated depreciation $ 2,518,990 - 2,518,990 Segment assets $ 3,224,955 1,617,913 4,842,868 (a) The "other" segment is mainly related to the holding company expenses and general overhead, as well as the stock based compensation awards. |
SIGNIFICANT ACCOUNTING POLICI28
SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended |
Feb. 29, 2016 | |
Building and improvements [Member] | |
Estimated useful life of property and equipment | 15 - 39 years |
Machinery and equipment [Member] | |
Estimated useful life of property and equipment | 5 -30 years |
Office furniture and equipment [Member] | |
Estimated useful life of property and equipment | 5 - 10 years |
Trucks and vehicles [Member] | |
Estimated useful life of property and equipment | 5 - 7 years |
SIGNIFICANT ACCOUNTING POLICI29
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 28, 2014 | |
Cash and cash equivalents | $ 36,370 | $ 44,697 | $ 7,731 |
Amortization expense | 3,082 | 0 | |
Share-based expense | $ 0 | $ 0 | |
Construction Industry [Member] | |||
Revenue percentage in customer concentrations | 22.00% | 22.00% | |
Industrial [Member] | |||
Revenue percentage in customer concentrations | 28.00% | 26.00% | |
Mining Industries [Member] | |||
Revenue percentage in customer concentrations | 49.00% | 51.00% | |
Single Customer of Mosaic [Member] | |||
Revenue percentage in customer concentrations | 42.00% |
ACCOUNTS RECEIVABLE, FACTORED (
ACCOUNTS RECEIVABLE, FACTORED (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 29, 2016 | Feb. 28, 2015 | |
Accounts Receivable Factored Details Narrative | ||
Factored Receivables | $ 214,200 | $ 477,800 |
Factoring agreement fees | $ 6,800 | $ 14,700 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Feb. 29, 2016 | Feb. 28, 2015 |
Inventories Details | ||
Work-in process | $ 14,445 | $ 17,888 |
Finished goods | $ 176,702 | $ 270,553 |
Raw materials | ||
Total inventories | $ 191,147 | $ 288,441 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Feb. 29, 2016 | Feb. 28, 2016 | Feb. 28, 2015 |
Gross Property and equipment | $ 5,516,062 | $ 5,495,621 | |
Less accumulated depreciation | 3,135,344 | 2,976,631 | |
Net Property and equipment | $ 2,380,718 | 2,518,990 | |
Land [Member] | |||
Gross Property and equipment | $ 186,045 | 186,045 | |
Building and improvements [Member] | |||
Gross Property and equipment | 2,814,744 | 2,814,744 | |
Machinery and equipment [Member] | |||
Gross Property and equipment | 2,265,910 | 2,249,671 | |
Office furniture and equipment [Member] | |||
Gross Property and equipment | 58,317 | 57,527 | |
Trucks and automobiles [Member] | |||
Gross Property and equipment | $ 191,046 | $ 187,634 |
PROPERTY AND EQUIPMENT (Detai33
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 29, 2016 | Feb. 28, 2015 | |
Property And Equipment Details Narrative | ||
Depreciation | $ 162,612 | $ 195,475 |
INVESTMENTS IN EQUITY SECURIT34
INVESTMENTS IN EQUITY SECURITIES (Details) - Commercial, Industrial Other [Member] - USD ($) | 12 Months Ended | |
Feb. 29, 2016 | Feb. 28, 2015 | |
Cost Basis | $ 32,078 | $ 32,078 |
Umealized Gains | $ 33,222 | $ 27,286 |
Umealized Losses | ||
Fair Value | $ 65,300 | $ 59,364 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | Feb. 29, 2016 | Feb. 28, 2015 | |
Notes payable non current | $ 950,930 | $ 1,056,179 | |
Less current portion | (652,296) | (248,251) | |
Notes payable, gross | 298,634 | 807,928 | |
Notes payable | 652,296 | 683,155 | |
Notes payable, related parties | 298,634 | 373,024 | |
Total | 950,930 | 1,056,179 | |
Notes payable to the parents of the former president of the Company [Member] | |||
Notes payable non current | 185,291 | [1] | 185,291 |
Notes payable to the parents and sister of the former president of the Company [Member] | |||
Notes payable non current | 31,697 | [1] | 31,697 |
Note payable related party [Member] | |||
Notes payable non current | $ 298,634 | 351,955 | |
Note payable related party One [Member] | |||
Notes payable non current | 21,069 | ||
Note Payable to Financial Institution [Member] | |||
Notes payable non current | $ 435,308 | $ 466,167 | |
[1] | of February 29, 2016, the notes payable listed above include notes in default totaling $216,988. |
NOTES PAYABLE (Details 1)
NOTES PAYABLE (Details 1) | Feb. 28, 2015USD ($) |
Notes Payable Details 1 | |
2,017 | $ 652,296 |
2,018 | $ 298,634 |
2,019 | |
2,020 | |
2,021 | |
Thereafter | |
Total | $ 950,930 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | Feb. 29, 2016 | Feb. 28, 2015 |
Notes Payable Details Narrative | ||
Notes in default | $ 216,988 | |
Notes payable to related parties | $ 298,634 | $ 373,024 |
EQUITY (Details Narrative)
EQUITY (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2015 | Feb. 29, 2016 | |
Balance due to Stockholders | $ 1,601,910 | $ 1,833,809 |
Common stock issued for deferred compensation | 58,823,529 | |
Common stock issued for deferred compensation, executives valued | $ 0.0051 | |
Common stock issued for deferred compensation amount | $ 300,000 | |
Series A Preferred Stock [Member] | ||
Preferred dividends in arrears amount | $ 118,377 | |
Preferred dividends in arrears amount per share | $ 1,161 | |
Series B Preferred Stock [Member] | ||
Cumulative dividends amount | $ 4,075,255 | |
Cumulative dividends amount per share | $ 1 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | Feb. 29, 2016 | Feb. 28, 2015 |
Income Taxes Details | ||
Unused operating loss carryforwards | $ 7,873,700 | $ 7,177,800 |
Valuation allowance | $ (7,873,700) | $ (7,791,000) |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | 12 Months Ended | |
Feb. 29, 2016 | Feb. 28, 2015 | |
Income Taxes Details 1 | ||
Statutory benefit | $ (74,000) | $ (62,800) |
State tax benefit, net of federal effect | $ (8,700) | $ (9,200) |
Nondeductible expenses | ||
Increase in deferred income tax valuation allowance | $ 82,700 | $ 72,000 |
Total |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 12 Months Ended |
Feb. 29, 2016USD ($) | |
Income Taxes Details Narrative | |
Unused tax losses available to carry forward | $ 19,655,000 |
Unused tax losses available to carry forward expiration dates | Loss carry forwards began expiring in 2008 |
Valuation allowance increased | $ 82,700 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2015 | Feb. 29, 2016 | |
Related Party Transactions Details Narrative | ||
Deferred compensation | $ 232,400 | $ 231,899 |
Balance due to Stockholders | $ 1,601,910 | 1,833,809 |
Common stock issued for deferred compensation | 58,823,529 | |
Common stock issued for deferred compensation, executives valued | $ 0.0051 | |
Common stock issued for deferred compensation amount | $ 300,000 | |
Note receivable, related party | 1,009,792 | 1,009,792 |
Due from related party | $ 803,585 | $ 893,714 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) | 12 Months Ended | |
Feb. 29, 2016 | Feb. 28, 2015 | |
Revenue | $ 2,053,256 | $ 2,239,355 |
Interest expense | 81,210 | 90,360 |
Depreciation | 162,612 | 195,475 |
Net income (loss) | (244,513) | (184,911) |
Property and equipment, net of accumulated depreciation | 2,380,718 | 2,518,990 |
Segment assets | 4,759,277 | 4,842,868 |
Manufacturing [Member] | ||
Revenue | 2,053,256 | 2,239,335 |
Interest expense | 56,255 | 63,031 |
Depreciation | 162,612 | 195,475 |
Net income (loss) | 66,400 | 133,233 |
Property and equipment, net of accumulated depreciation | 2,380,718 | 2,518,990 |
Segment assets | 3,047,208 | $ 3,224,955 |
Others [Member] | ||
Revenue | ||
Interest expense | 24,955 | $ 27,329 |
Depreciation | ||
Net income (loss) | $ (310,913) | $ (318,144) |
Property and equipment, net of accumulated depreciation | ||
Segment assets | $ 1,712,069 | $ 1,617,913 |