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WARRANTS

12 Months Ended

Feb. 28, 2013

On November 14, 2011, MBM entered into consulting agreement with Burnham Hill Advisors LLC and warrants were issued to purchase 220,000 shares of common stock at $0.68 per share. The fair value of these warrants was determined to be $149,999, as calculated using the Black-Scholes model. Assumption used in the Black-Scholes model included: (1) a discount rate of 0.91%; (2) an expected term of 5 years; (3) an expected volatility of 403%; and (4) zero expected dividends.

On January 31, 2012, MBM granted 1,497,122 warrants together with shares of common stock issued on January 31, 2012 exercisable at $0.91 per share and expiring on January 31, 2017. On February 27, 2012, the Company also granted 216,250 warrants together with shares of common stock exercisable at $1.40 per share and expiring on February 27, 2016.

Immediately prior to the Share Exchange, PVSO issued 350,000 warrants exercisable at $1.40 per share.

On October 4, 2012 we issued 150,000 warrants to a consultant exercisable at $1.50 per share. The fair value of these warrants was determined to be $149,995, as calculated using the Black-Scholes model. Assumption used in the Black-Scholes model included: (1) a discount rate of 0.63%; (2) an expected term of 4 years; (3) an expected volatility of 420%; and (4) zero expected dividends.

During the year ended February 28, 2013, we issued 220,000 warrants together with shares of common stock issued on May 1, 2012 exercisable at $1.40 per share and expiring on May 1, 2016. These warrants vest immediately.

During the year ended February 28, 2013, we issued 78,700 warrants together with convertible notes exercisable at $3.00 expiring between January and February 2017. The fair value of these warrants was determined to be $78,694, as calculated using the Black-Scholes model. Assumption used in the Black-Scholes model included: (1) a discount rate of 0.82%; (2) an expected term of 4 years; (3) an average expected volatility of 410%; and (4) zero expected dividends.

The following table summarizes common stock warrants issued and outstanding:

	Warrants		Weighted average exercise price		Aggregate intrinsic value		Weighted average remaining contractual life (years)

Outstanding at February 28, 2011		-	$	-	$	-		-
Granted by MetaStat		1,933,372		0.94		4,953,038		3.80
Granted by PVSO		350,000		1.40		735,000		4.00
Outstanding at February 29, 2012		2,283,372	$	1.01	$	5,688,038		3.83
Granted by MetaStat		448,700		1.71		826,850		3.46
Outstanding at February 28, 2013		2,732,072	$	1.13	$	6,514,888		3.77

Warrants exercisable at February 28, 2013 are:

Exercise prices		Number of shares		Weighted average remaining life (years)		Exercisable number of shares
$	0.68		220,000		3.71		220,000
$	0.91		1,497,122		3.93		1,497,122
$	1.40		786,250		3.49		216,250
$	1.50		150,000		3.60		150,000
$	3.00		78,700		3.97		78,700