3. COMMON STOCK PURCHASE WARRANTS

6 Months Ended

Aug. 31, 2015

Notes to Financial Statements

COMMON STOCK PURCHASE WARRANTS

NOTE 3:   COMMON STOCK PURCHASE WARRANTS

Common Stock

During the six month period ended August 31, 2015, 115,000 shares of restricted common stock were issued to employees and officers of the Company. Additionally, 100,000, 20,000, and 10,000 shares of restricted common stock were issued to TAM, vendors, and TAM's trustee, respectively. The shares were fully vested upon issuance. The value recorded in the accompanying condensed consolidated financial statements was based on the estimated fair value of the stock on the date of the grant and aggregated $83,000.

During the six month period ended August 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 condensed 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 $67,200 and $134,200 for the three and six month periods ended August 31, 2015, respectively, and $88,175 and $176,350 for the three and six month periods ended August 31, 2014, respectively.  All outstanding warrants are expected to be vested in December 2015.

A summary of warrant activity for the six months ended August 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 August 31, 2015		6,407,221			0.21
Vested at August 31, 2015		5,766,498			0.21
Exercisable at August 31, 2015		5,766,498			0.21

The following table summarizes significant ranges of outstanding warrants as of August 31, 2015:

		Warrants Outstanding				Warrants Exercisable
			Weighted	Weighted			Weighted
			Average	Average			Average
Exercise		Number	Remaining	Exercise		Number	Exercise
Price		Outstanding	Life (Years)	Price		Outstanding	Price
	$0.21	6,407,221	5.29		$0.21	5,766,498		$0.21