3. COMMON STOCK PURCHASE WARRANTS

6 Months Ended

Aug. 31, 2013

Notes to Financial Statements

COMMON STOCK PURCHASE WARRANTS

NOTE 3:   COMMON STOCK PURCHASE WARRANTS

Common Stock

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

Warrants

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

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

				Weighted-
				Average
	Warrants			Exercise
	Outstanding			Price
Outstanding at February 28, 2013		8,467,221			0.21
Granted		-			-
Exercised		-			-
Forfeited		(30,000	)		0.21
Outstanding at August 30, 2013		8,437,221			0.21
Vested at August 30, 2013		3,374,888			0.21
Exercisable at August 30, 2013		3,374,888			0.21

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

		Warrants Outstanding				Warrants Exercisable
			Weighted	Weighted			Weighted
			Average	Average			Average
Exercise Price		Number	Remaining	Exercise		Number	Exercise
		Outstanding	Life (Years)	Price		Outstanding	Price
$	0.21	8,437,221	7.29	$	0.21	3,374,888	$	0.21