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Liquidity
12 Months Ended
Feb. 28, 2013
Liquidity [Abstract]  
Liquidity

2. Liquidity

The Company incurred a net loss of approximately $3.7 million, which resulted in a net decrease in cash of approximately $3.6 million from $3.9 million at February 29, 2012 to $0.3 million at February 28, 2013.

The Company has limited working capital and access to credit. The Company had $40 thousand of remaining availability on its credit facility at February 28, 2013. In addition, while the Company’s financing agreement with its lender does not contain explicit financial covenants, the Agreement allows the Company’s lender significant latitude to restrict, reduce or eliminate the Company’s access to credit or require the Company to repay any and all amounts outstanding under the Agreement. If its lender restricts, reduces or eliminates the Company’s access to credit, or requires immediate repayment of the amounts outstanding under the agreement, the Company would be required to pursue additional or alternative sources of liquidity such as equity financings, a new debt agreement with other creditors, or liquidate assets. However, the Company cannot assure that any such additional sources of liquidity would be available on reasonable terms, if at all.

The Company’s financial statements for the fiscal year ended February 28, 2013 were prepared assuming the Company would continue as a going concern; however, the Company’s declining revenues, recurring losses, weakened financial position and reduced liquidity raise substantial doubt about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company’s board of directors decided in January 2013 that the Company should consider its strategic alternatives to preserve and maximize shareholder value, which ultimately culminated in the approval on May 17, 2013 of the Agreement and Plan of Merger which, subject to shareholder approval, would allow for the outstanding shares of the Company to be purchased for $3.45 per share or approximately $4.5 million.

Due to the Company’s declining revenues, recurring losses, limited liquidity and weakened financial position, the Company may not be able to operate long enough to execute that planned transaction.