SHAREHOLDERS' EQUITY

3 Months Ended

May 31, 2014

SHAREHOLDERS' EQUITY [Abstract]

SHAREHOLDERS' EQUITY

NOTE 8–SHAREHOLDERS’ EQUITY

Common Stock

During the three months ended May 31, 2014, we issued 2,800,000 shares of Common Stock for services rendered valued at $420,000 and we issued 17,334,533 shares of common stock upon the exercise of warrants for proceeds of $1,773,453.

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.

Employee Stock Options

During the three months ended May 31, 2014, 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, 2014		$0.75-$1.00	$0.00	8,602,333
Cancelled		$0.75		52,000
Granted		-		-
Outstanding, May 31, 2014		$0.75-$1.00	$0.00	8,550,333

The exercise prices for the options outstanding at May 31, 2014, 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

8,550,333

5.65 years

$

0.79

5.75 years

8,183,666

$

0.79

Warrants

Activity in issued and outstanding warrants is as follows:

	Number of Shares	Exercise Prices
Outstanding, February 28, 2014	48,503,720	$0.75-$2.00
Granted	-	-
Exercised	(17,334,540)	$0.10
Cancelled	(217,830)	$0.75
Outstanding, May 31, 2014	30,951,350	$0.75-$2.00

The exercise prices for the warrants outstanding at May 31, 2014, 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	1,082,734	1,082,734	81 months	$0.75	$0.75	$0.00
$0.75	1,000,000	1,000,000	71 months	$0.75	$0.75	$0.00
$0.75-$1.00	5,990,275	5,990,275	66 months	$0.77	$0.77	$0.00
$1.00-$1.25	995,000	995,000	28months	$1.04	$1.04	$0.00
$1.00	16,422,787	16,422,787	27 months	$1.00	$1.00	$0.00
$1.50	105,000	105,000	22 months	$1.50	$1.50	$0.00
$0.75-1.50	909,198	909,198	19 months	$1.14	$1.14	$0.00
$1.50	156,000	156,000	15 months	$1.50	$1.50	$0.00
$1.50	704,000	704,000	14 months	$1.50	$1.50	$0.00
$1.50	350,642	350,642	11 months	$1.50	$1.50	$0.00
$2.00	235,714	235,714	5 months	$2.00	$2.00	$0.00
$0.75-1.50	3,000,000	3,000,000	1 months	$1.00	$1.00	$0.00
	30,951,350	30,951,350