NOTES PAYABLE - RELATED PARTY

12 Months Ended

Feb. 29, 2012

NOTES PAYABLE - RELATED PARTY [Abstract]

NOTES PAYABLE - RELATED PARTY

NOTE 7 - NOTES PAYABLE - RELATED PARTY

At February 29, 2012 the balance consists of $10,425,000 of unsecured notes payable plus accrued interest of $2,137,743 to a member of our Board of Directors, payable on demand, bearing interest at a rate of 10% per annum. During the years ended February 29, 2012 and February 28, 2011, interest amounting to $944,632 and $739,911 respectively, was incurred on these notes and is included in accrued interest. Also consists of a $360,000 unsecured convertible note payable to our CEO entered into in March 2010. The note was for 120 days, carried an interest rate of 10% and was convertible into shares of our common stock at a price of $0.75 per share. During the year ended February 29, 2012, the note payable plus accrued interest of $45,496 was converted into 540,661 shares of common stock. Also consists of a $50,000 unsecured convertible note payable to our President at February 29, 2012. The note was for 120 days, carried an interest rate of 10% and was convertible into shares of our common stock at a price of $0.75 per share. During the period ended February 29, 2012, the note payable plus accrued interest of $11,331 was converted into 81,775 shares of common stock.

The beneficial conversion feature on the note to the CEO was $72,000 which was recorded as debt discount during the year ended February 28, 2011. The debt discount was amortized over the term of the note and charged to interest expense. During the year ended February 28, 2011, $72,000 was expensed.