4.COMMON STOCK AND WARRANTS

6 Months Ended

Aug. 31, 2016

Notes to Financial Statements

COMMON STOCK AND WARRANTS

NOTE 4:   COMMON STOCK AND WARRANTS

Common Stock

During the six month period ended August 31, 2016, 250,000 shares of fully vested restricted common stock were issued by the Company to an employee.  The shares were valued at the closing price of the Company's common stock at date of grant for a total expense of $117,500.

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. All such 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.

Warrants

The Company had previously granted warrants to selected members of management and determined the estimated value of warrants granted using the Black-Scholes option pricing model. The warrants became fully vested during the year ended February 29, 2016.  The amount of the expense charged to operations for these warrants was $0 and $67,200 for the three months ended August 31, 2016 and 2015, respectively.  The amount of expense charged to operations for these warrants was $0 and $134,200 for the six months ended August 31, 2016 and 2015, respectively.

A summary of warrant activity for the six months ended August 31, 2016 is as follows:

			Weighted-
			Average
	Warrants		Exercise
	Outstanding		Price
Outstanding at February 29, 2016		6,407,221		0.21
Granted		-		-
Exercised		-		-
Forfeited		-		0.21
Outstanding at August 31, 2016		6,407,221		0.21
Vested at August 31, 2015		6,407,221		0.21
Exercisable at August 31, 2015		6,407,221		0.21

The following table summarizes significant ranges of outstanding warrants as of August 31, 2016:

		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	4.29		$0.21	6,407,221		$0.21