EQUITY

12 Months Ended

Feb. 29, 2012

Notes to Financial Statements

NOTE 5 - EQUITY

As referenced in Note 3, the Company issued 3,290,570 shares of common stock for the partial compensation due to the Licensors pursuant to the License Agreement. The Company accounted for this as a research and development expense valued at $74,786

During the year ended February 29, 2012, the Company sold 3,934,112 shares of common stock for total proceeds of $2,810,145 of which the Company received $1,945,145 and the remaining $865,000 was received subsequent to February 29, 2012. The Company has disclosed the balance as a subscription receivable on its balance sheet.

During February 2012, the Company issued an aggregate of 160,158 shares of common stock to the Licensors in connection with the anti-dilution rights to maintain a certain ownership percentage in the Company. The shares were valued at $72,799.

On February 27, 2012, we entered into the Exchange Agreement with MBM by issuing 18,369,421 shares of our common stock in exchange for the MBM Shares. Immediately prior to the Share Exchange, we had 840,000 shares outstanding which have been recorded as recapitalization of shareholders on MetaStat’s books at par.

The Company has authorized 150,000,000 shares of common stock, par value $0.0001 per share, and 20,074,422 shares of common stock issued and outstanding as of February 29, 2012.

The Company has authorized 10,000,000 shares of preferred stock, par value $0.0001 per share, and 0 shares of preferred stock issued and outstanding as of February 29, 2012.