8 EQUITY TRANSACTIONS

12 Months Ended

Feb. 29, 2016

Equity [Abstract]

EQUITY TRANSACTIONS

NOTE 8:   EQUITY TRANSACTIONS

Restricted Stock Grants

During the year ended February 29, 2016, 225,000 shares of restricted common stock were issued to employees and officers of the Company. Additionally, 200,000, 41,667, 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 consolidated financial statements was based on the estimated fair value of the stock on the date of the grant and aggregated $157,400 for year ended February 29, 2016.

During the year ended February 28, 2015, 60,000 shares of restricted stock were issued by the Company to employees. 50,000 shares vest over a two year period, whereby 17,000 shares vested upon issue, and 17,000 and 16,000 shares vest after one and two years, respectively. The value recorded in the accompanying consolidated financial statements related to the portion vested during the fiscal year, based on the estimated fair value of the stock on the date of the grant, was approximately $16,000. The other 10,000 shares were fully vested upon issuance. The value recorded in the accompanying consolidated financial statements was based on the estimated fair value of the stock on the date of the grant was approximately $3,800.

Our largest customer during the year ended February 29, 2016, has raised concerns regarding the effectiveness of certain of our filters, in particular, the efficacy of fluoride removal. The likelihood of this customer continuing to purchase our product is remote. The loss of business from this customer could have a materially adverse effect on our revenues in the short term and in the long term if these revenues are not replaced by new products and other existing or new customers.

Warrants

A summary of warrant activity for the fiscal years ended February 29, 2016 and February 28, 2015 is shown below.

				Weighted-
				Average
	Warrants			Exercise
	Outstanding			Price
Outstanding at March 1, 2014		8,407,221			0.21
Granted		-			-
Exercised		-			-
Forfeited		-			-
Outstanding at February 28, 2015		8,407,221			0.21
Granted		-			-
Exercised		-			-
Forfeited		(2,000,000	)		-
Outstanding at February 29, 2016		6,407,221			0.21
Vested at February 29, 2016		6,407,221			0.21
Exercisable at February 29, 2016		6,407,221			0.21

 The following table summarizes significant ranges of outstanding warrants as of February 29, 2016:

Warrants Outstanding

Warrants Exercisable

Weighted

Weighted

Weighted

Average

Average

Average

Remaining

Exercise

Number

Exercise

Exercise Price

Number

Life (Years)

Price

Outstanding

Price

$

0.21

6,407,221

4.79

$

0.21

6,407,221

$

0.21

During the year ended February 28, 2011, 8,467,221 warrants were issued to employees and related parties for future services to be rendered, with a vesting term of five (5) years and an exercise price of $0.21.  The fair value of these warrants on the date of grant totaled approximately $1.7 million and was being amortized to income over the vesting period.  The amortization of these warrants was $213,000 and $353,000 during the years ended February 29, 2016 and  February 28, 2015, respectively.  During the year ended February 28, 2014, 60,000 warrants were forfeited upon termination of employment of two employees. During the year ended February 29, 2016, 2,000,000 warrants were forfeited upon termination of employment of one employee.  The value of these warrants was fully amortized during the year ended February 29, 2016.

As of February 29, 2016 and February 28, 2015, the total outstanding warrants had an intrinsic value of $1,858,094 and $0, respectively.