NOTE 8 – SHAREHOLDERS’ EQUITY

Common Stock

During the three months ended May 31, 2015, we did not issue any shares of 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.

Employee Stock Options

During the Three months ended May 31, 2015, 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, 2015		$0.75-$1.00	$	0.00		7,777,000
Cancelled		-				-
Granted		-				-
Outstanding, May 31, 2015		$0.75-$1.00	$	0.00		7,777,000

The exercise prices for the options outstanding at May 31, 2015, 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

7,777,000

4.75 years

0.79

4.75 years

7,777,000

0.79

Warrants

Activity in issued and outstanding warrants is as follows:

	Number of Shares			Exercise Prices
Outstanding, February 28, 2015		37,546,048			$0.10-$1.50
Granted		-			-
Exercised		-			-
Cancelled		(350,642	)	$	1.50
Outstanding, May 31, 2015		37,195,406			$0.10-$1.50

There were no warrants issued in the three months ended May 31,2015.

The exercise prices for the warrants outstanding at May 31, 2015, 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
$0.10-$0.75		18,381,012		18,381,012	71 months	$	0.55	$	0.55	$	0.00
$0.75		1,082,734		1,082,734	69 months	$	0.75	$	0.75	$	0.00
$0.75		1,000,000		1,000,000	59 months	$	0.75	$	0.75	$	0.00
$0.75-$1.00		5,990,275		5,990,275	54 months	$	0.77	$	0.77	$	0.00
$1.00-$1.25		795,000		795,000	16 months	$	1.05	$	1.05	$	0.00
$1.00		8,272,187		8,272,187	14 months	$	1.00	$	1.00	$	0.00
$1.50		105,000		105,000	10 months	$	1.50	$	1.50	$	0.00
$0.75-1.50		709,198		709,198	7 months	$	1.25	$	1.25	$	0.00
$1.50		156,000		156,000	3 months	$	1.50	$	1.50	$	0.00
$1.50		704,000		704,000	2 months	$	1.50	$	1.50	$	0.00

		37,195,406		37,195,406