SHAREHOLDERS EQUITY

3 Months Ended

May 31, 2013

SHAREHOLDERS' EQUITY [Abstract]

SHAREHOLDERS' EQUITY

NOTE 8–SHAREHOLDERS' EQUITY

Common Stock

During the three months ended May 31, 2013, $1,330,112 of notes payable and accrued interest were converted into 2,660,225 shares of common stock, 595,451 shares of common stock were issued for services and expenses related to the notes valued at $297,726 and 4,254,250 shares of common stock were issued in exchange for the cancellation of warrants to purchase 5,005,000 shares of  common stock at an exercise price of $0.75 per share which would have expired on September 22, 2016

During the three months ended May 31, 2012, we issued 350,000 shares of Common Stock for services rendered valued at $266,000.

Employee Stock Options

During the three months ended May 31, 2013, there were no stock options granted to employees.

In September, 2006, our Board of Directors adopted the 2006 Employee Stock Option Plan. Activity in this plan is as follows:

	2006 Plan
		Weighted-Average  Exercise Price		Aggregate Intrinsic Value		Number of Options
Outstanding, February 28, 2013		$	0.75-$1.00	$	0.00		8,548,000
Cancelled			-				-
Granted			-				-
Outstanding, May 31, 2013		$	0.75-$1.00	$	0.00		8,548,000

The exercise prices for the options outstanding at May 31, 2013, and information relating to these options is as follows:

Options Outstanding							Exercisable Options
Range of Exercise Price		Number		Weighted Average  Remaining  Life	Weighted Average  Exercise  Price		Weighted Average  Remaining Life	Number	Weighted Average  Exercise  Price
$	0.75-$1.00		8,548,000	6.65 years	$	0.79	6.75 years	8,048,000	$	0.79

Warrants

Activity in issued and outstanding warrants is as follows:

	Number of Shares			Exercise Prices
Outstanding, February 28, 2013		38,783,290		$	0.75-$4.00
Granted		3,368,762		$	0.75
Cancelled		(5,005,000	)	$	0.75
Outstanding, May 31, 2013		37,147,052		$	0.75-$4.00

The exercise prices for the warrants outstanding at May 31, 2013, and information relating to these warrants is as follows:

Range of  Exercise Prices		Stock Warrants Outstanding		Stock Warrants  Exercisable		Weighted- Average Remaining Contractual Life	Weighted- Average  Exercise Price of Warrants  Outstanding		Weighted- Average  Exercise Price of Warrants  Exercisable		Intrinsic  Value
$	0.75		3,368,762		3,368,762	83 months	$	0.75	$	0.75	$	0.00
$	0.75-$1.00		8,756,942		8,756,942	74 months	$	0.81	$	0.81	$	0.00
$	1.00-$1.25		1,220,000		1,220,000	40 months	$	1.03	$	1.03	$	0.00
$	1.00		16,722,787		16,722,787	39 months	$	1.00	$	1.00	$	0.00
$	1.50		155,000		155,000	34 months	$	1.50	$	1.50	$	0.00
$	0.75-1.50		1,109,198		1,109,198	31 months	$	1.17	$	1.17	$	0.00
$	1.50		156,000		156,000	27 months	$	1.50	$	1.50	$	0.00
$	1.50		704,000		704,000	26 months	$	1.50	$	1.50	$	0.00
$	1.50		350,642		350,642	23 months	$	1.50	$	1.50	$	0.00
$	0.75-$2.00		58,000		58,000	19 months	$	1.78	$	1.78	$	0.00
$	2.00		725,721		725,721	16 months	$	2.00	$	2.00	$	0.00
$	0.75-2.00		3,650,000		3,650,000	13 months	$	1.03	$	1.03	$	0.00
$	3.00		170,000		170,000	6 months	$	3.00	$	3.00	$	0.00
			37,147,052		37,147,052