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WARRANTS

3 Months Ended

May 31, 2014

For the three months ended May 31, 2013, the Company issued 70,000 warrants in connection with the issuance of Convertible Notes referenced in Note 5 below. These warrants were issued between March 1, 2013 and May 14, 2013, are exercisable at $3.00 per share and expire between March 1, 2017 and May 14, 2017. These warrants vest immediately. The warrants do not contain any provision that would require liability treatment, therefore they were classified as equity in the Condensed Consolidated Balance Sheet.

For the three months ended May 31, 2014, the Company issued 50,000 warrants in connection with the issuance of Convertible Notes referenced in Note 5 below. These warrants were issued between March 4, 2014 and May 27, 2014, are exercisable at $1.50 per share and expire between March 4, 2019 and May 27, 2019. These warrants vest immediately. The warrants do not contain any provision that would require liability treatment, therefore they were classified as equity in the Condensed Consolidated Balance Sheet.

In connection with the issuance of the Convertible Notes referenced in Note 5 below, the Company issued placement agent warrants to purchase an aggregate of 8,480 shares of common stock. These placement agent warrants are exercisable at $2.50 per share, have a term of 5 years and a cashless exercise feature and vest immediately. The fair value of these warrants was determined to be $25,498, as calculated using the Black-Scholes model. Average assumptions used in the Black-Scholes model included: (1) a discount rate of 0.74%; (2) an expected term of 5 years; (3) an expected volatility of 134%; and (4) zero expected dividends.

The following table summarizes common stock purchase warrants issued and outstanding:

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

Outstanding at February 28, 2014		3,146,355	$	1.24	$	807,096		2.97
Granted		50,000	$	1.80		-		4.87
Exercised		-		-		-		-
Forfeited		-		-		-		-
Expired		-		-		-		-

Outstanding at May 31, 2014		3,196,355	$	1.25	$	480,842		2.75

Warrants exercisable at May 31, 2014 are:

Exercise prices		Number of shares		Weighted average remaining life (years)		Exercisable number of shares
$	0.68		220,000		2.46		220,000
$	0.91		1,497,124		2.67		1,497,124
$	1.40		786,250		2.24		786,250
$	1.50		175,000		2.01		1,750,000
$	2.10		472,001		3.67		472,001
$	2.50		25,980		3.62		25,980
$	3.00		20,000		2.67		20,000