NOTES PAYABLE (Tables)

6 Months Ended

Aug. 31, 2014

Notes to Financial Statements

Schedule of Notes Payable Table

	August 31, 2014		February 28, 2014
Note payable dated August 6, 2012. The Company entered into a purchase order (PO) financing agreement which provided $1,500,000 in debt financing. This agreement also enabled us to receive a portion of the funds owed by customers in advance of when the customer is required to pay the balance (usually prior to shipment or delivery).  We will be required to submit customer orders as collateral for the funds received under the agreement.  Once the products are shipped and the end customer pays the remaining balance, those funds are then used to pay back the amount of the particular PO financed.  The amount repaid is then available for us to borrow against other of our accounts receivable.  The agreement calls for a 16% annual interest rate on any funds outstanding.  As additional consideration for the financing agreement, we issued the financing party warrants to purchase up to 600,000 shares of our common stock, exercisable at any time during the 24 months from the date of issue, at an exercise price of $0.35 per share. As required by ASC 470-20, the Company valued the warrant and recorded a debt discount to market available at the time of issuance. The discount is amortized over the life of the loan. The note was amended in March 2013 to include the outstanding accrued interest to date. Under the new terms, interest remains at 16%, and monthly payments are due as follows: month 1 - $275,000; month 4 and 5 - $30,000; months 6–11 - $60,000; and month 12 - $105,000.   On August 21, 2014, the note principal was paid in full and all accrued interest was waived by the lender.	$	0	$	1,105,000
Notes payable due within five days of receipt by Company, in whole or in part, portion of funds collected on collateral sales order, or, Company may submit a new collateral sales order with value equal to or in excess of principal outstanding. Borrowings were originally due December 31, 2012, but notes were combined on April 1, 2013 under a simple promissory note due October 1, 2014. Under the new terms, the interest rate is 10% per annum, and monthly payments are due as follows: April 15, 2013 - month 1 - $160,000; months 2-5 - $20,000; months 6–10 - $80,000; month 11 - $20,000; and month 12 – all accrued interest. Under the new terms, outstanding accrued interest was added to principal as of the amendment date. On August 21, 2014, the note principal was paid in full and all accrued interest was waived by the lender.		0		382,153
On April 3, 2013, the Company entered into a new credit facility, which provided up to $6,500,000 in debt financing.  The agreement calls for a 10% annual interest rate on any funds outstanding.  As of May 31, 2014, the available credit was increased three times to a total of $11,033,000. As additional consideration for the original financing agreement and the increases in available credit, the financing parties were issued warrants to purchase up to 12,715,000 shares of our common stock, exercisable at any time during four years from the date of issuance, at an exercise price of $0.35 per share. As required by ASC 470-20, the Company valued the warrants and recorded a debt discount to market available at the time of issuance. The discounts are amortized over the life of the loan. As of May 31, 2014, $1,126,008 has been amortized and the balance is shown net of a $743,927 remaining debt discount.  On August 21, 2014, the note principal and all accrued interest was paid in full.		0		8,070,237

On August 21, 2014, the Company entered into a new term loan with Wells Fargo Bank, which provided $15,000,000 in debt financing.  The agreement calls for a Libor + 3% annual interest rate on funds outstanding. The loan matures on February 21, 2016 and monthly principal payments of $178,572 start on February 1, 2015.		15,000,000		0
Totals		15,000,000		9,557,390
Less: current maturities		1,250,004		(9,557,390	)
Long-term portion	$	13,749,996	$	0

Schedule of Future maturities of Note and Loan Debt

FY 2015	$	178,572
FY 2016	$	15,682,110
Thereafter		0
Total	$	15,860,682