WARRANTY RESERVE

3 Months Ended

May 31, 2013

Notes to Financial Statements

WARRANTY RESERVE

The Company accrues for estimated future warranty costs by establishing a reserve of 2% of fiscal year wind turbine sales and tower sales. The reserve is reduced over the five year warranty period as follows:

Year 1	0.1%
Year 2	0.3%
Year 3	0.4%
Year 4	0.5%
Year 5	0.7%
Total Warranty Reserve as a % of Sales	2.0%

Warranty reserve balances were as follows at May 31, 2013 and February 28, 2013:

	May 31, 2013		February 28, 2013
FY 2011	$	9,140	$	16,223
FY 2012		39,881		55,063
FY 2013		64,509		79,343
FY 2014		1,947
Reserve balance		115,477	$	150,629