Income Taxes

12 Months Ended

Feb. 28, 2019

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 11 – INCOME TAXES

The Company did not record any income tax expense due to the net loss during the year ended February 28, 2019 and the income recorded during the year ended February 28, 2018 that was offset by net operating loss carryforwards. The actual tax benefit differs from the expected tax benefit computed by applying the combined United States corporate tax rate and the State of California tax rate of 6% to loss before income taxes as follows for the years ended February 28, 2019 and February 28, 2018:

	2019		2018
Current:	$		$
Federal		-		-
State		800		800
Total		800		800
Deferred
Federal		-		-
State		-		-
Total		-		-
Total Income Tax Provision
	$	800	$	800

The provision for income tax is included with other expense in the accompanying consolidated financial statements.

	2019			2018
Expected tax benefit		21.0	%		21.0	%
State income taxes, net of federal benefit		6.0			6.0
Changes in valuation allowance		(27.0	)		(27.0	)
Total		-%			-	%

The following table summarizes the significant components of our deferred tax asset at February 28, 2019 and February 28, 2018:

	2019			2018
Deferred tax asset
Primarily relating to net operating loss carry-forwards, but also reserves for inventory and accounts receivable, stock-based compensation and other		53,000,000			66,000,000
Valuation allowance		(53,000,000	)		(66,000,000	)
Net deferred tax asset	$	-		$	-

We recorded an allowance of 100% for deferred tax assets due to the uncertainty of its realization.

At February 28, 2019, we had operating loss carry-forwards of approximately $253,000,000 for federal purposes, which expire through 2039, and $43,000,000 for state purposes, which expire through 2039.

We follow FASB ASC 740 related to uncertain tax positions. Under FASB ASC 740, the impact of an uncertain tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. At February 28, 2019 and February 28, 2018, we have no unrecognized tax benefits.

Our continuing practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of February 28, 2019, and February 28, 2018, we have no accrued interest and penalties related to uncertain tax positions.

We are subject to taxation in the U.S. and California. Our tax years for 2013 and forward are subject to examination by our tax authorities. We are not currently under examination by any tax authority.

The Company has failed to file its’ California tax returns for the years ended February 28, 2015 thru February 28, 2018 due to its’ inability to pay the minimum franchise tax payment.