Commitments And Contingencies

3 Months Ended

May 31, 2012

Commitments and Contingencies Disclosure [Abstract]

Commitments And Contingencies

NOTE 17 – COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases its office and manufacturing facilities under a lease which expires in July, 2013. The lease provides for the payment of taxes and operating costs, such as insurance and maintenance in addition to the base rental payments. The lease is renewable for an additional three year term. Aggregate minimum annual rental payments under the non-cancelable operating lease are as follows:

Year Ended February 28, 2013	$	72,564
February 28, 2014		37,152
Total	$	109,716

Rent expense totaled $77,862 and $72,391 for the three months ended May 31, 2012 and 2011, respectively.

Lawsuits

On February 22, 2012, we were served with a lawsuit by Hobbes & Towne Inc. an employee recruiting firm, seeking damages in the amount of $105,000. The suit was filed on February 22, 2012 in the Court of Common Pleas, Chester County, Pennsylvania. The dispute arises out of an employee recruiting contract for engineering staff. We have answered the suit and intend to vigorously contest the plaintiff’s claims.

On May 21, 2012, the Company was served with a lawsuit by XC Associates, Inc. (XC), which was filed in U.S. District Court, Northern District of New York on May 16, 2012. XC was a vendor we had prepared to bring on as a key supplier of blades in early 2011. After numerous delays in delivering initial product to us, we disengaged from XC as a potential supplier. XC initially claimed we owed a balance of approximately $50,000 for initial tooling. We refused the claim. XC has now filed a suit claiming lost business among other damages, totaling approximately $729,000. We intend to vigorously contest these claims, and may assert counterclaims seeking damages for business disruption caused by XC’s failure to perform. We filed a response on July 6, 2012 seeking complete dismissal of all claims.