Commitments and Contingencies and Supply Source:

12 Months Ended

Feb. 28, 2013

Commitments and Contingencies and Supply Source:

Commitments and Contingencies and Supply Source:

8. Commitments and Contingencies and Supply Source:

In the ordinary course of conducting business, the Company may be a party to legal proceedings and claims.  As of February 28, 2013 the Company does not expect the final outcome of any such matters to have a material adverse effect on its financial position, results of operations, or cash flows.

As described in Note 2, the Company entered a Royalty Agreement with Dr. Burzynski.  Under that agreement, upon FDA approval, the Company is obligated to provide Dr. Burzynski the right to produce antineoplaston products to treat up to 1,000 patients without paying any fees to the Company or the right to purchase antineoplaston products to treat up to 1,000 patients at cost plus 10%.

The Company produced antineoplaston products and treated 59 patients during the year ended February 28, 2013 and 90 patients during the year ended February 29, 2012.  Management estimates the current production facilities have the capacity to produce product to treat approximately 1,500 patients per year.  There is space available at the current site to expand the facility for increased capacity if necessary.

The Company received approximately 87% of the chemicals used in producing Antineoplastons from one supplier during the year ended February 28, 2013 and 89% during the year ended February 29, 2012.  The Company has established additional vendors to supply these chemicals should there be a loss of this supplier.