DigitalTown (DGTW) 10-Q 15 Oct 13 2013 Q2 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Aug. 31, 2013	Oct. 14, 2013
Document And Entity Information
Entity Registrant Name	Digitaltown, Inc.
Entity Central Index Key	1065598
Document Type	10-Q
Document Period End Date	31-Aug-13
Amendment Flag	FALSE
Current Fiscal Year End Date	-26
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		29,182,275
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2013

Balance_Sheets_Unaudited

Balance Sheets (Unaudited) (USD $)	Aug. 31, 2013	Feb. 28, 2013
Current assets:
Cash	$6,667	$3,606
Accounts receivable		6,783
Current portion of prepaid domain name renewal fees	88,775	47,656
Prepaid expenses	1,354	5,674
Total current assets	96,796	96,119
Prepaid domain name renewal fees, net of current portion
Property and equipment, net	12,963	17,247
Intangible assets, net	952,165	1,002,876
Total assets	1,061,924	1,116,242
Current liabilities:
Accounts payable	232,698	225,052
Accounts payable - related party	19,495	7,445
Notes payable - third party (in default)	150,000
Notes payable - related party	47,650	49,000
Deferred revenue	9,114	9,114
Accrued interest	109	991
Accrued payroll	1,374	11,547
Deferred officer compensation	303,135	152,309
Total current liabilities	763,575	455,458
Stockholders equity:
Common stock, $0.01 par value, 2,000,000,000 shares authorized, 29,182,275 and 29,160,599 shares issued and outstanding at August 31, 2013 and February 28, 2013, respectively	$291,819	$291,602
Additional paid-in-capital	27,425,099	26,826,042
Subscriptions receivable	-821,854	-978,854
Accumulated deficit	-26,596,715	-25,478,006
Total stockholders equity	298,349	660,784
Total liabilities and stockholders equity	$1,061,924	$1,116,242

Balance_Sheets_Parenthetical

Balance Sheets (Parenthetical)	Aug. 31, 2013	Feb. 28, 2013
Statement of Financial Position [Abstract]
Common Stock, $0.01 par value, shares authorized	2,000,000,000	2,000,000,000
Common Stock, $0.01 par value, shares issued and outstanding	29,182,275	29,160,599

Statements_of_Operations_Unaud

Statements of Operations (Unaudited) (USD $)	3 Months Ended		6 Months Ended
	Aug. 31, 2013	Aug. 31, 2012	Aug. 31, 2013	Aug. 31, 2012
Income Statement [Abstract]
Revenues	$253	$13,166	$562	$21,139
Cost of revenues	78,435	135,883	159,632	255,259
Gross profit (loss)	-78,182	-122,717	-159,070	-234,120
Operating expenses:
Selling, general and administrative expenses	366,114	271,891	934,299	720,340
Loss from operations	-444,296	-394,608	-1,093,369	-954,460
Other income (expense)
Interest expense	-10,201		-25,614
Other income	275	469	275	174,866
Total other income (expense)	-9,926	469	-25,339	174,866
Net loss before income tax	-454,222	-394,139	-1,118,708	-779,594
Income tax provision
Net loss	($454,222)	($394,139)	($1,118,708)	($779,594)
Net loss per common share - basic and diluted	($0.02)	($0.01)	($0.04)	($0.03)
Weighted average common shares outstanding - basic and diluted	29,164,604	29,147,621	29,162,602	29,129,805

Statements_of_Cash_Flows_Unaud

Statements of Cash Flows (Unaudited) (USD $)	6 Months Ended
	Aug. 31, 2013	Aug. 31, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	($1,118,708)	($779,594)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	4,284	6,425
Amortization of website development costs	54,685	57,259
Interest paid with Warrants	4,410
Stock-based compensation expense	560,958	130,309
Stock issued for director fees and executive compensation	13,655	17,613
Gain from sale of domain name		-174,300
Amortization of debt discount	20,251
Accounts receivable	6,783	1,793
Prepaid domain name renewal fees	-41,119	82,503
Prepaid expense	4,320	6,250
Accounts payable	7,401	102,794
Accounts payable - related parties	12,295
Accrued interest	109
Accrued payroll	-11,164	418
Deferred officer compensation	150,826	15,866
Deferred revenue		14,299
Net cash used in operating activities	-331,015	-518,365
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		-4,526
Purchase of intangible asset - website development	-3,486	-1,872
Purchases of intangible assets – domain names	-488	-22,311
Proceeds from sale of domain name		175,000
Net cash used in investing activities	-3,974	146,291
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable - third party	150,000
Payments on notes payable - related party	-1,350
Payments received on stockholder subscription receivables	157,000	130,000
Proceeds from issuance of stock		75,000
Net cash provided by financing activities	305,650	205,000
Net change in cash and cash equivalents	-29,339	-167,074
Cash and cash equivalents, beginning of period	36,006	221,904
Cash and cash equivalents, end of period	6,667	54,830
Debt discount on notes payable - third party	$20,251

Note_1_Basis_of_Presentation

Note 1 - Basis of Presentation	3 Months Ended
	Aug. 31, 2013
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Note 1 - Basis of Presentation	Note 1. Basis of Presentation
	The accompanying unaudited consolidated financial information has been prepared by DigitalTown, Inc. (the “Company”) in accordance with accounting principles generally accepted in the United States of America for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (SEC).  Accordingly, it does not include all of the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of this financial information have been included.  Financial results for the interim period presented are not necessarily indicative of the results that may be expected for the fiscal year as a whole or any other interim period.  This financial information should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended February 28, 2013.

Note_2_Nature_of_Business_and_

Note 2 - Nature of Business and Summary of Significant Accounting Policies	3 Months Ended
	Aug. 31, 2013
Accounting Policies [Abstract]
Note 2 - Nature of Business and Summary of Significant Accounting Policies	Note 2. Nature of Business and Summary of Significant Accounting Policies:
	Nature of Business and Going Concern
	The Company was founded in 1982 under the laws of the State of Minnesota as Command Small Computer Learning Center, Inc., a computer training company and operated under several different names in the computer hardware and training sector. In 2005, the Company began acquiring domain names. On March 1, 2007, the Company changed its name to DigitalTown, Inc. and began developing a business plan to develop a platform to monetize the domain names. The Company’s headquarters are located at 11974 Portland Avenue, Burnsville, MN 55337, and its telephone and facsimile numbers are (952) 890-2362 and (952) 890-7451, respectively. The Company's Internet address is www.digitaltown.com. The Company is traded in the over-the-counter market under the ticker DGTW.
	The Company’s consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has a working capital deficit, recurring losses, and negative cash flows from operations. These matters raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of this uncertainty.
	At August 31, 2013, the Company had an accumulated deficit of $26,596,715.  Subsequent to August 31, 2013, the Company has received cash proceeds totaling approximately $72,000 from its stock subscription receivable. The Company anticipates that expected future proceeds from its stock subscription receivable, additional financing through the sale of its common stock or other equity-based securities, and additional sales of existing domain names will be sufficient to meet its working capital and capital expenditure needs through at least August 31, 2014.  In the event that we are unable to obtain additional capital in the future, we would be forced to further reduce operating expenses and/or cease operations altogether.
	Principles of Consolidation
	The Company files consolidated financial statements that include its wholly-owned subsidiaries Tiger Media and The School Network, Inc. All material intercompany accounts and transactions have been eliminated in consolidation.
	Use of Estimates
	The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from those estimates.
	Accounts Receivable
	Accounts receivable arose from the sale of and commission earned from display advertising. The Company evaluates collectability of accounts receivable based on a combination of factors including the age of the receivable or a specific customer’s inability to meet its financial conditions. In these circumstances, the Company records an allowance to reduce the receivable to an amount it deems collectible. The Company has determined that an allowance for doubtful accounts is not necessary as of August 31, 2013.
	Revenue Recognition
	The Company recognizes revenue when the following four criteria have been met:
	Persuasive evidence that an agreement exists
	Delivery has occurred
	The price is fixed and determinable
	Collectability is reasonably assured
	The Company recognizes revenue from the sale of display advertising appearing on specific pages of individual spirit sites within DigitalTown’s network. Display advertising is sold by the Company directly to local merchants and placed by the Company on specific pages of individual spirit sites targeted by the local merchant. The terms of these sales are for a fixed monthly amount for a period ranging from three months to one year. The Company has also entered into certain third party agreements which allow display advertising to be placed on individual spirit sites within DigitalTown’s network. Per these agreements, the Company receives commissions based on a percentage of the per click or per-impression revenue generated by these ads. The Company recognizes these commissions received as revenue.
	Deferred Revenue
	Deferred revenue is comprised of contractual billings in excess of recognized revenue and payments received in advance of revenue recognition from customers for which services have not been delivered.
	Intangible Assets – Domain Names/Website Development Costs
	Domain name costs are accounted for in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC 350-50) guidance pertaining to Intangibles-Goodwill and Other, Website Development Costs. Certain modules and components of the Company’s overall website development are ready for their intended use and the Company’s resulting websites are currently operational. Accordingly, the annual domain name renewal fees are currently being amortized over one year and the purchase of any new domain names are the only amounts being capitalized. Previously, during the infrastructure development stage of its websites, the Company capitalized the purchase of new domain names and the annual domain name renewal fees. Additionally, since the ownership of each domain name can be renewed for a nominal renewal fee each year prior to their expiration date, the useful lives of the domain names are deemed to be indefinite and no amortization of the capitalized costs for the domain names will be recorded.
	Website development costs are accounted for in accordance with the FASB Accounting Standards Codification (ASC 350-40) guidance pertaining to Intangibles-Goodwill and Other, Internal-Use Software which requires that all internal and external costs incurred to develop the internal-use software necessary to operate the websites be capitalized. The guidance further states, amortization should begin when an individual module or component of the overall internal-use software is ready for its intended use. The cost of such module or component will be amortized on a straight-line basis over its estimated useful life, as determined by the Company, after taking into account the effects of obsolescence, technology, competition and other economic factors. The Company has components of its website development that are operational and are being amortized on a straight-line basis over a three year life.
	Impairment of Long-Lived Assets
	Long-lived assets, such as property and equipment and intangible assets – domain names/website development costs are reviewed for impairment whenever changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset.
	Income Taxes
	Deferred tax assets (net of any valuation allowance) and liabilities resulting from temporary differences, net operating loss carry-forwards and tax credit carry-forwards are recorded using an asset-and-liability method. Deferred taxes relating to temporary differences and loss carry-forwards are measured using the tax rate expected to be in effect when they are reversed or are realized. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be ultimately realized. The Company has recorded a full valuation allowance against its net deferred tax asset due to the uncertainty of realizing the related future benefits.
	The Company accounts for income taxes pursuant to Financial Accounting Standards Board guidance. This guidance prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s adoption of these provisions specifically related to uncertain tax positions resulted in no cumulative effect adjustment. The Company believes its income tax filing positions and deductions will be sustained upon examination and, accordingly, no reserves or related accruals for interest and penalties have been recorded at August 31, 2013 and February 28, 2013. In accordance with the guidance, the Company has adopted a policy under which, if required to be recognized in the future, interest related to the underpayment of income taxes will be classified as a component of interest expense and any related penalties will be classified in operating expenses in the statements of operations. The Company has three open years of tax returns subject to examination.
	Stock-Based Compensation
	The Company measures and recognizes compensation expense for all stock-based payment awards made to employees, directors and consultants on a straight-line basis over the respective vesting period of the awards. The compensation expense for the Company's stock-based payments is based on estimated fair values at the time of the grant of the portion of stock-based payment awards that are ultimately expected to vest.
	The Company estimates the fair value of stock-based payment awards on the date of grant using the Black-Scholes option pricing model. This option pricing model involves a number of assumptions, including the expected lives of stock options, the volatility of the public market price for the Company's common stock and interest rates.
	Recently Issued Accounting Pronouncements
	In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to improve the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in the ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. The new amendments will require an organization to:
	-Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income - but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period; and
	-Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense.
	The amendments apply to all public and private companies that report items of other comprehensive income. Public companies are required to comply with these amendments for all reporting periods (interim and annual). The amendments are effective for reporting periods beginning after December 15, 2012, for public companies. Early adoption is permitted. The adoption of ASU No. 2013-02 is not expected to have a material impact on our financial position or results of operations.
	In January 2013, the FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, which clarifies which instruments and transactions are subject to the offsetting disclosure requirements originally established by ASU 2011-11. The new ASU addresses preparer concerns that the scope of the disclosure requirements under ASU 2011-11 was overly broad and imposed unintended costs that were not commensurate with estimated benefits to financial statement users. In choosing to narrow the scope of the offsetting disclosures, the Board determined that it could make them more operable and cost effective for preparers while still giving financial statement users sufficient information to analyze the most significant presentation differences between financial statements prepared in accordance with U.S. GAAP and those prepared under IFRSs. Like ASU 2011-11, the amendments in this update will be effective for fiscal periods beginning on, or after January 1, 2013. The adoption of ASU 2013-01 is not expected to have a material impact on our financial position or results of operations.
	In October 2012, the FASB issued ASU 2012-04, “Technical Corrections and Improvements” in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 is not expected to have a material impact on our financial position or results of operations.
	In August 2012, the FASB issued ASU 2012-03, “Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)” in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs pursuant to the issuance of SAB No. 114. The adoption of ASU 2012-03 is not expected to have a material impact on our financial position or results of operations.
	In July 2012, the FASB issued ASU 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” in Accounting Standards Update No. 2012-02. This update amends ASU 2011-08,Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles - Goodwill and Other - General Intangibles Other than Goodwill. The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. The adoption of ASU 2012-02 is not expected to have a material impact on our financial position or results of operations.

Note_3_Intangible_Assets

Note 3 Intangible Assets	3 Months Ended
	Aug. 31, 2013
Accounting Policies [Abstract]
Note 3 Intangible Assets	Note 3. Intangible Assets
	Intangible assets, net are as follows:
		August 31,	February 28,
		2013	2013
	Domain names	$        860,673	$      860,185
	Website development costs	366,166	362,680
	Less: accumulated amortization	-274,674	-219,989
	Intangible assets, net	$        952,165	$   1,002,876
	During the six months ended August 31, 2013, the Company capitalized $488 in additional domain name purchases. Since the useful life of the domain names is deemed to be indefinite, no amortization has been recorded.
	During the six months ended August 31, 2013, the Company incurred $139,175 of annual domain name renewal fees and recorded them as prepaid domain name renewal fees and expensed $98,056 on a straight line basis, to cost of revenues in the Company’s consolidated statement of operations for the six months ended August 31, 2013. At August 31, 2013, the Company had $88,775 of prepaid domain name renewal fees which will be amortized over future periods.
	During the six months ended August 31, 2013, the Company capitalized $3,486 of website development costs. The Company has a total recorded cost of $366,166 at August 31, 2013 and it has determined that $351,458 pertain to a component that is ready for its intended use and have an estimated useful life of three years. During the six months ended August 31, 2013, the Company recorded $54,685 of website development amortization expense pertaining to these components to cost of revenues in the Company’s consolidated statement of operations.

Note_4_Deferred_Officer_Compen

Note 4 Deferred Officer Compensation	3 Months Ended
	Aug. 31, 2013
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Note 4 Deferred Officer Compensation	Note 4. Deferred Officer Compensation
	Richard Pomije, Secretary, Treasurer and Chairman and David Pomije, CEO and a Director of the Company, have elected to forego a portion of their salary at various times due to the Company’s limited operating funds. These amounts do not accrue interest and are due and payable as funds become available in the future.  During the three months ended August 31, 2013, the Company recorded $55,769 of deferred officer compensation and made payments of $6,000 to Richard Pomije and recorded $37,500 of deferred officer compensation for David Pomije. During the six months ended August 31, 2013, the Company recorded $125,576 of deferred officer compensation and made payments of $31,000 to Richard Pomije and recorded $56,250 of deferred officer compensation for David Pomije. The total balance at August 31, 2013, and February 28, 2013, were $303,135 and $152,309, respectively.

Note_5_Stockholders_Equity

Note 5 Stockholders Equity	3 Months Ended
	Aug. 31, 2013
Equity [Abstract]
Note 5 Stockholders Equity	Note 5. Stockholders’ Equity
	Stock Transactions
	On August 15, 2013, the Company issued 21,676 restricted common shares at $0.63 per share, valued at $13,656, to four directors and the Company’s contract CFO for payment of director fees, executive compensation and consulting fees. The restricted common shares were valued based at the market price on the grant date.
	Stock Warrants
	As of August 31, 2013, the Company had 26,668 warrants outstanding with an exercise price of $4.00 and 90,000 with an exercise price of $0.75. The $4.00 warrants expire two years from their date of issuance and the $0.75 warrants expire one year from their date of issuance. The weighted average remaining exercise period as of August 31, 2013 for the $4.00 warrants is 0.21 years and for the $0.75 warrants is 0.63 years.
	On April 1, 2013, the Company issued 75,000 stock purchase warrants to a stockholder of the Company to purchase 75,000 shares of the Company’s stock for $0.75 per share for a term of one year. The warrants were issued in lieu of interest on an unsecured promissory note for a working capital loan of $150,000, which was due in full on June 30, 2013; but remains outstanding as of August 31, 2013. The Company utilized the following key assumptions in computing the fair value of the warrants using the Black-Scholes pricing model:
		April 1,
		2013
	Weighted-average volatility	137%
	Expected dividends	None
	Expected term (in years)	1
	Weighted-average risk-free interest rate	0.14%
	Weighted-average fair value of options granted	$0.27
	The total fair value of the warrants granted by the Company on April 1, 2013 was $20,251, which was recorded as a loan discount and will be amortized to interest expense over the term of the loan. During the three and six months ended August 31, 2013, the Company amortized $6,750 and $20,251 of the discount to interest expense and at August 31, 2013 the discount had a remaining balance of $0.
	On June 30, 2013, the Company failed to make its $150,000 payment due on its unsecured promissory note with a stockholder of the Company. Per the terms of the agreement, if the Company is in default for more than five days, it is required to issue an additional 10,000 warrants to the stockholder as a late payment fee. On July 5, 2013, the Company issued 10,000 stock purchase warrants to the stockholder allowing for the purchase of 10,000 shares of the Company's stock at $0.75 per share for a term of one year. The agreement further requires the Company to issue an additional 5,000 warrants to the stockholder each month that the note is in default, up to a maximum of 75,000 total additional warrants. On August 5, 2013 the note remained in default and the Company issued 5,000 stock purchase warrants to the stockholder allowing for the purchase of 5,000 shares of the Company's stock at $0.75 per share for a term of one year. The note remained in default at August 31, 2013. The 15,000 warrants issued as late payment penalties during July and August 2013, were valued at $4,410 and were charged to interest expense during the three months ended August 31, 2013.
	On July 16, 2013, the Company issued 50,000 stock purchase warrants to a consultant of the Company to purchase 50,000 shares of the Company’s stock for $0.68 per share for a term of ten years. The Company utilized the following key assumptions in computing the fair value of the warrants using the Black-Scholes pricing model:
		July 16,
		2013
	Weighted-average volatility	144%
	Expected dividends	None
	Expected term (in years)	10
	Weighted-average risk-free interest rate	2.55%
	Weighted-average fair value of options granted	$0.67
	The total fair value of the warrants granted by the Company on July 16, 2013 was $33,310, which was recorded as stock based compensation as the warrants vested immediately.
	Other
	On December 3, 2010, the Company signed a drawdown equity financing agreement (“Drawdown Agreement”) with Auctus Private Equity Fund, LLC (“Auctus”). In connection with the Drawdown Agreement, in April 2011, the Company registered 3,000,000 shares of common stock with the SEC under the Securities Act of 1933 and at its discretion, has the right to sell up to the registered shares of common stock to Auctus over a thirty six month period for maximum aggregated consideration of up to $10,000,000, subject to the following terms and conditions.
		·	The maximum advance amount available to the Company is limited to the greater of $150,000 or 200% of the average daily volume based on the 10 days preceding the Company’s notice requesting a draw.
		·	Auctus’ purchase price per common share will be 94% of the lowest closing volume weighted average price (“VWAP”) of the Company’s common stock during the five trading days immediately following the Company’s delivery of notice to Auctus.
		·	At its option, the Company can establish a floor price under which Auctus may not sell the shares. The floor price shall be 75% of the closing VWAP for the 10 days prior to the notice requesting a draw. Auctus must cease selling any shares purchased in connection with the Drawdown Agreement if the price falls below the established floor price. The Company, at its discretion, may waive the floor price and allow Auctus to sell its shares below the floor price.
		·	In no event can the number of shares owned by Auctus exceed 4.99% of the then outstanding shares of the Company’s common stock. As of August 31, 2013, this would translate into maximum ownership by Auctus of approximately 1,456,000 shares of the Company’s common stock.
	During the fiscal year ended February 29, 2012, the Company issued 1,000 shares for total proceeds of $2,108 in connection with the drawdown agreement.
	During the fiscal year ended February 28, 2013, the Company did not utilize the drawdown agreement.
	During the six months ended August 31, 2013, the Company did not utilize the drawdown agreement.

Note_6_Stock_Options

Note 6 Stock Options	3 Months Ended
	Aug. 31, 2013
Other Liabilities Disclosure [Abstract]
Note 6 Stock Options	Note 6. Stock Options
	The Company has one stock option plan called The 2006 Employee Stock and Option Plan. As of August 31, 2013, an aggregate of 7,000,000 shares of common stock may be granted under this plan as determined by the Board of Directors. The stock options may be granted to directors, officers, employees, consultants and advisors of the Company. Options granted under this plan are non-qualified stock options and have exercise prices and vesting terms established by the Board of Directors at the time of each grant. Vesting terms of the outstanding options range from immediate to four years from the grant date anniversary. The terms of the options range from five to ten years from the date of grant.
	For the six months ended August 31, 2013, the Company granted stock options allowing for the purchase of up to an aggregate of 2,000,000 shares of common stock. On April 26, 2013, the Company granted 2,000,000 options to an officer/director with a term of 10 years and the options vest as follows: 500,000 on April 16, 2013, 500,000 on April 16, 2014, 500,000 on April 16, 2015 and 500,000 on April 16, 2016. The fair value of the Company’s stock options have been estimated using the Black-Scholes pricing model, which requires assumptions as to expected dividends, the options expected life, volatility and risk-free interest rate at the time of the grant. The value of the portion of the award that is ultimately expected to vest is recognized as expense on a straight-line basis over the requisite vesting periods in the Company’s consolidated statements of operations.
	For stock options granted during the six months ended August 31, 2013, we utilized the following key assumptions in computing fair value using the Black-Scholes option-pricing model:
		April 16,
		2013
	Weighted-average volatility	138%
	Expected dividends	None
	Expected term (in years)	5.75
	Weighted-average risk-free interest rate	0.71%
	Weighted-average fair value of options granted	$0.59
	The total fair value of the stock options granted by the Company for the six months ended August 31, 2013 was $1,170,073.
	Total stock compensation expense for all option grants was $143,859 and $26,041 for the three months ended August 31, 2013 and 2012, respectively, and $527,648 and $130,309 for the six months ended August 31, 2013 and 2012, respectively. This expense is included in selling, general and administrative expense. As of August 31, 2013, the Company has not recorded any tax benefit from this non-cash expense due to the Company having a full valuation allowance against its deferred tax assets. The compensation expense impacted the three months ended August 31, 2013 and 2012 basic (loss) per common share by $ (0.005) and $(0.001), respectively, and the six months ended August 31, 2013 and 2012 basic (loss) per common share by $(0.018) and $(0.004), respectively. There remains $743,804 of total unrecognized compensation expense, which is expected to be recognized over future periods through April 30, 2016.
	The following table summarizes information about the Company’s stock options:
		Number of Options	Weighted Average Exercise Price	Weighted Average Remaining Contract Life (years)		Aggregate Intrinsic Value (1)
	Outstanding - February 28, 2013	4,410,000	$  1.221		-	-
	Granted	2,000,000	0.7		-	-
	Canceled or expired	-675,000	2.08		-	-
	Exercised	-	-		-	-
	Outstanding – August 31, 2013	5,735,000	$  0.938		8.34	-
	Exercisable at August 31, 2013	3,785,000	$  1.022		7.82	-
		-1	The intrinsic value of an option is the amount by which the fair value of the underlying stock exceeds its exercise price.

Note_7_Related_Party_Transacti

Note 7 Related Party Transactions	3 Months Ended
	Aug. 31, 2013
Related Party Transactions [Abstract]
Note 7 Related Party Transactions	Note 7. Related Party Transactions
	Lease with Director/Stockholder
	Since December 16, 2006, the Company has leased from Jeffrey L. Mills, a director and stockholder of the Company, approximately 2,650 square feet of space used for offices and operations equipment storage at 11974 Portland Avenue, Burnsville, Minnesota. In November 2011, the Company entered into a three year lease renewal through December 15, 2014 at a monthly rent of $2,650 for the period of December 16, 2011 to December 15, 2012, $2,750 for the period of December 16, 2012 to December 15, 2013 and $2,850 for the period of December 16, 2013 to December 15, 2014 with the option to renew the lease for an additional term of one year at a monthly rent of $3,500. Mr. Mills invoiced the Company $8,250 and $7,950 for the three months ended August 31, 2013 and 2012, respectively, and $16,500 and $15,900 for the six months ended August 31, 2013 and 2012, respectively. At August 31, 2013 and February 28, 2013, the Company owed Mr. Mills $19,250 and $5,500, respectively, pertaining to the lease.
	Minimum lease payments at August 31, 2013 are as follows:
	FY 2014	$     16,800
	FY 2015	25,650
		$     42,450
	Accounts Payable
	The Company had Accounts payable balances due to related parties of $19,495 at August 31, 2013, which consisted of $245 due to Richard Pomije and $19,250 due to Jeff Mills. The balance at February 28, 2013 was $7,445 which consisted of $1,945 due to Richard Pomije and $5,500 due to Jeff Mills.
	Notes Payable – Related Party
	On March 25, 2008, the Company signed an unsecured promissory note with Jeff Mills, a director and stockholder of the Company, for a working capital loan of $145,000, due on demand at an annual interest rate of 6.5%. In August 2010, the annual interest rate increased to 7.5%. The outstanding balance of the loan at August 31, 2013 was $48,235. For the three months ended August 31, 2013 and 2012, the Company made principal payments of $487 and $0, respectively, and interest expense incurred on this loan was $934 and $0, respectively. For the six months ended August 31, 2013 and 2012, the Company made principal payments of $1,350 and $0, respectively, and interest expense incurred on this loan was $1,838 and $0, respectively. Accrued interest at August 31, 2013 and February 28, 2013 was $109 and $991, respectively.

Note_8_Notes_Payable

Note 8 Notes Payable	3 Months Ended
	Aug. 31, 2013
Debt Disclosure [Abstract]
Note 8 Notes Payable	Note 8. Notes Payable
	Notes Payable – Third Party
	On April 1, 2013, the Company signed an unsecured promissory note with a stockholder of the Company, for a non interest bearing working capital loan of $150,000, due in full on June 30, 2013. In lieu of interest on the loan, the Company issued the stockholder 75,000 warrants to purchase the Company’s stock at $0.75 per share. The warrants were issued on March 27, 2013 and have a term of one year. If the Company defaults in payment by more than five days, the stockholder receives an additional 10,000 warrants under the same terms as the original warrants. Each additional month that the Company is in default, the stockholder receives an additional 5,000 warrants under the same terms as the original warrants, up to a maximum of 75,000 additional warrants. The Company recorded a discount of $20,251 on April 1, 2013 and amortized $20,251 of the discount and recorded it as interest expense on its consolidated statement of operations for the six months ended August 31, 2013. The discount balance at August 31, 2013 was $0. The Company evaluated the warrants for derivative features noting none.
	On June 30, 2013, the Company failed to make its $150,000 payment due on its unsecured promissory note with a stockholder of the Company. Per the terms of the agreement, if the Company is in default for more than five days, it is required to issue an additional 10,000 warrants to the stockholder as a late payment fee. On July 5, 2013, the Company issued 10,000 stock purchase warrants to the stockholder allowing for the purchase of 10,000 shares of the Company's stock at $0.75 per share for a term of one year. The agreement further requires the Company to issue an additional 5,000 warrants to the stockholder each month that the note is in default, up to a maximum of 75,000 total additional warrants. On August 5, 2013 the note remained in default and the Company issued 5,000 stock purchase warrants to the stockholder allowing for the purchase of 5,000 shares of the Company's stock at $0.75 per share for a term of one year. The 15,000 warrants issued as late payment penalties during July and August 2013, were valued at $4,410 and were charged to interest expense during the three months ended August 31, 2013.
	As of October 15, 2013, the Company had not made the payment and remained in default on the note.
	Notes Payable - Related Party
	On March 25, 2008, the Company signed an unsecured promissory note with Jeff Mills, a director and stockholder of the Company, for a working capital loan of $145,000, due on demand at an annual interest rate of 6.5%. In August 2010, the annual interest rate increased to 7.5%. The outstanding balance of the loan at August 31, 2013 was $48,235. For the three months ended August 31, 2013, and 2012, the Company made principal payments of $487 and $0, respectively, and interest expense incurred on this loan was $934 and $0, respectively. For the six months ended August 31, 2013, and 2012, the Company made principal payments of $1,350 and $0, respectively, and interest expense incurred on this loan was $1,838 and $0, respectively. Accrued interest at August 31, 2013, and February 28, 2013 was $109 and $991, respectively.

Note_9_Commitments_and_Conting

Note 9 Commitments and Contingencies	3 Months Ended
	Aug. 31, 2013
Commitments and contingencies
Note 9 Commitments and Contingencies	Note 9. Commitments and Contingencies
	The Company is exposed to asserted and un-asserted claims encountered in the normal course of business. In the opinion of management, the resolution of these matters will not have a material adverse effect on the Company's financial position or results of operations.
	On August 22, 2011, the Company entered into a nine month agreement with Enable Consulting, LLC (“Enable”) to complete the design and development of the Company’s Sales Center Application. The Company committed up to $66,000 for the development and maintenance support of this software application through May 31, 2012. On June 27, 2012, the Company signed an amendment to its existing contract with Enable to establish payment terms for the remaining balance due Enable of $36,000 and prioritize the remaining unresolved maintenance items which Enable was to have completed by August 15, 2012. The Company paid $13,500 on June 29, 2012. As of August 31, 2013, the maintenance items remain unresolved and the Company has a balance due Enable of $22,500, which is included in accounts payable.
	On December 8, 2010, the Company entered into a five year strategic partnership agreement with the National Interscholastic Athletic Administrators Association (“NIAAA”). The NIAAA and DigitalTown will work together to establish a national, standardized system for recording schedules, scores, rosters and statistics for interscholastic sports teams and individual students. Pursuant to the agreement, the Company has committed to pay the expenses related to this strategic partnership; however any expenses in excess of $5,000 must be preapproved by the Company. The Company has committed to deposit $50,000 for such expenses for the first fiscal year of the contract which the Company has paid as of February 29, 2012. In addition, as of August 31, 2013, the Company has paid $20,000 of the $50,000 due for the second fiscal year of the contract and the balance due of $30,000 is included in accounts payable. In addition, the Company has committed to donate 25% of the annual net sponsorship revenue in the scheduling and stats areas of its websites, with a total annual donation cap of $3,000,000, to yet to be named program funds that promote youth activities and the NIAAA.  Lastly, the Company has committed to a minimal revenue share of $100,000 per year with the future launch of its beta 3 software. As of August 31, 2013, the Company has not yet launched its beta 3 software nor has it generated any net sponsorship revenue.

Common_Stock_Subscriptions_Rec

Common Stock Subscriptions Receivable	3 Months Ended
	Aug. 31, 2013
Equity [Abstract]
Common Stock Subscriptions Receivable	Note 10. Common Stock Subscriptions Receivable
	As of August 31, 2013, the Company has the following stock subscription agreements outstanding all of which are due from a related party:
	2005 Agreements
	Material terms of the subscription agreements received by the Company on December 30, 2005 for 4,733,333 restricted common shares at $0.75 per share (total value of $3,550,000) are as follows:
		·	Payment is due in full in 60 months.
		·	At 24 months, the Company can demand at its option, monthly 1/36 payments on the subscription agreement.
		·	The Company has the option to charge simple annual interest of up to 4%.
		·	The Company will provide downside protection of up to 30% of the stock price upon conversion.
	The outstanding balance owed on the 2005 subscription agreements at August 31, 2013 is $0.
	2007 Agreements
	On October 5, 2007, the Company received subscriptions for 1,300,000 restricted common shares at $2.50 per share (total value of $3,250,000). Significant terms of the original subscription agreement are as follows:
		·	The price per share of $2.50 was based on the closing price on October 4, 2007.
		·	At 24 months, 1/36 payments are due monthly.
		·	The Company, at its option, may call up to 1/12 of the gross receivable per month if the preceding 30 day average trading price is at or above $7.00 a share with minimum trading volume of 5,000 shares per day.
		·	If the purchaser sells these common shares, the purchaser shall be entitled to an amount equal to 200% of the original purchase price of each share and the Company shall be entitled to 50% of any additional net sales proceeds from the stock sale.
	On February 25, 2010, due to the economic downturn and the market value decline of the Company’s stock, which was trading below $2.50 per share, the Company amended the pricing terms of the subscription agreements received by the Company on October 5, 2007. The amendment changed the following significant terms of the subscription agreement:
	The parties agree that the Initial Pricing terms in the Confidential Binding Term Sheet dated October 5, 2007 of the Agreement will be amended to state as follows:
		1	The Subscriber offers to purchase shares of the Company for $0.75 per share. After the price adjustment, the revised total value of this subscription agreement is $975,000.
	The following other provisions of the Initial Pricing and Final Pricing terms in the Confidential Binding Term Sheet dated October 5, 2007 of the Agreement will be deleted, and are not enforceable by either party:
		·	Beginning October 5, 2009, and 1/36 payments are due each month thereafter on the 5th of every month.
		·	The Company at its option may call up to 1/12 of the (gross) receivable note per month if the preceding 30 day average trading price is at or above $7.00 a share. Minimum trading volume must be 5,000 shares a day.
		·	As total consideration for the purchase and sale of the Company’s stock, purchaser shall ultimately pay to the Company the following amount (the “Purchase Price”):
		A.	Purchaser shall first be entitled to an amount equal to 200% of the face amount of each share.
		B.	After the purchaser receives the amount in A above, the Company shall be entitled to 50% of any additional net sales proceeds of the stock. Net sales proceeds shall mean the gross proceeds received from the sale of the stock, less reasonable brokerage commissions.
		C.	Final adjusted net sales proceeds will be wired to the Company within 7 days from the final settlement of the sale of stock sold.
	The outstanding balance owed on the revised 2007 subscription agreements at August 31, 2013 is $521,854.
	2010 Agreement
	Material terms of the subscription agreement received by the Company on June 22, 2010, for 400,000 restricted common shares at $0.75 per share (total value of $300,000) are as follows:
		·	Payment is due in full in 60 months.
		·	At 24 months, the Company can demand at its option, monthly 1/36 payments on the subscription agreement.
		·	The Company has the option to charge simple annual interest of up to 4%.
		·	The Company will provide downside protection of up to 30% of the stock price upon conversion.
	The outstanding balance owed on the 2010 subscription agreement at August 31, 2013 is $300,000.
	Summary
	For the six months ended August 31, 2013, the Company received stock subscription payments of $157,000 and as of August 31, 2013, the Company had related party stock subscriptions receivable aggregating $821,854 for the 2007 and 2010 agreements.
	The following tables summarize information about the stock subscription receivable:
	Receivable balance at February 29, 2008	$    5,030,795
	Cash collected	-523,832
	Receivable balance at February 28, 2009	4,506,963
	Cash collected	-337,500
	2007 Subscription agreement pricing revised (1)	-2,275,000
	Receivable balance at February 28, 2010	1,894,463
	New subscription agreement (2)	300,000
	Cash collected	-771,809
	Receivable balance at February 28, 2011	1,422,654
	Cash collected	-123,000
	Receivable balance at February 29, 2012	1,299,654
	Cash collected	-320,800
	Receivable balance at February 28, 2013	978,854
	Cash collected	-68,000
	Receivable balance at May 31, 2013	910,854
	Cash Collected	-89,000
	Receivable balance at August 31, 2013	$      821,854
	Summary of outstanding subscriptions:
	2005 subscriptions	$                  -
	2007 subscriptions	521,854
	2010 subscriptions	300,000
		$      821,854
		-1	Amendment to the terms of the subscription agreements received by the Company on October 5, 2007 for 1,300,000 restricted common shares reducing the price paid per share from $2.50 to $0.75.
		-2	New subscription agreement received on June 22, 2010.
	The Company did not exercise its rights, per the 2005 subscription agreements, to demand monthly 1/36 payments or to charge up to 4% interest on the subscription amounts outstanding and they did not provide any “downside protection” to the subscribers. The “downside protection” in the terms for the 2005 subscription agreements required the Company to reimburse the subscription holder up to 30% of the $.75 purchase price, or $0.225, if the market price of the stock was below $0.75 when converted. The protection could have been provided in additional shares if necessary. The subscription agreements did not define the term “when converted.” The Company took the position that if at the time that a purchaser made a payment in full for the shares under a 2005 subscription agreement and the closing price of the shares of the Company’s stock is less than $0.75, the shareholder would have been entitled to up to 30% additional shares, depending on the trading share price. As of April 2012, the 2005 subscription agreements were paid for in their entirety and any potential downside protection ceased.

Note_11_Earnings_Loss_Per_Shar

Note 11 Earnings (Loss) Per Share	3 Months Ended
	Aug. 31, 2013
Accounting Policies [Abstract]
Note 11 Earnings (Loss) Per Share	Note 11. Earnings (Loss) Per Share
	The Company computes earnings per share using two different methods, basic and diluted, and presents per share data for all periods in which statements of operations are presented. Basic earnings per share are computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding. Diluted earnings per share are computed by dividing net income (loss) by the weighted average number of common stock and common stock equivalents outstanding.
	The following tables provide a reconciliation of the numerators and denominators used in calculating basic and diluted earnings (loss) per share for the three and six month periods ended August 31, 2013 and 2012:
		Three months ended
		August 31,
		2013	2012
	Basic earnings (loss) per share calculation:
	Net loss to common shareholders	$          (454,222)	$         (349,139)
	Weighted average of common shares outstanding	29,164,604	29,147,621,
	Basic net loss per share	$                (0.02)	$               (0.01)
	Diluted earnings (loss) per share calculation:
	Net loss to common shareholders	$         (454,222)	$        (394,139)
	Weighted average of common shares outstanding	29,164,604	29,147,621
	Stock options (1)	-	-
	Warrants (2)	-	-
	Diluted weighted average common shares outstanding	29,164,604	29,147,621
	Diluted net loss per share	$                   (0.02)	$               (0.01)
		Six months ended
		August 31,
		2013	2012
	Basic earnings (loss) per share calculation:
	Net loss to common shareholders	$          (1,118,708)	$         (779,594)
	Weighted average of common shares outstanding	29,162,602	29,129,805
	Basic net loss per share	$                (0.04)	$               (0.03)
	Diluted earnings (loss) per share calculation:
	Net loss to common shareholders	$         (1,118,708)	$        (779,594)
	Weighted average of common shares outstanding	29,162,602	29,129,805
	Stock options (1)	-	-
	Warrants (2)	-	-
	Diluted weighted average common shares outstanding	29,162,602	29,129,805
	Diluted net loss per share	$                   (0.04)	$               (0.03)
	(1)	At August 31, 2013 and 2012, there were outstanding stock options equivalent of 5,735,000 and 4,570,000 common shares, respectively.  The stock options are anti-dilutive at August 31, 2013 and 2012 and therefore have been excluded from diluted earnings (loss) per share.
	(2)	At August 31, 2013 and 2012, there were outstanding warrants equivalent to 116,668 and 1,092,410 common shares, respectively.   The warrants are anti-dilutive at August 31, 2013 and 2012 and therefore have been excluded from diluted earnings (loss) per share.

Note_12_Supplemental_disclosur

Note 12 Supplemental disclosure of Cash Flow Information	3 Months Ended
	Aug. 31, 2013
Supplemental Cash Flow Elements [Abstract]
Note 12 Supplemental disclosure of Cash Flow Information	Note 12. Supplemental Disclosure of Cash Flow Information
		Six months ended
		August 31,
		2013	2012
	Non-cash flow information:
	Cash paid for interest	$     1,838	-
	Non-cash investing and financing activities:
	Debt discount on loan – stockholder	$   20,251	-

Note_13_Subsequent_Events

Note 13 Subsequent Events	3 Months Ended
	Aug. 31, 2013
Subsequent Events [Abstract]
Note 13 Subsequent Events	Note 13. Subsequent Events
	The Company has collected approximately $72,000 of its stock subscription receivables during the period from September 1, 2013 to October 15, 2013.

Note_2_Nature_of_Business_and_1

Note 2 - Nature of Business and Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Aug. 31, 2013
Accounting Policies [Abstract]
Nature of Business and Going Concern	Nature of Business and Going Concern
	The Company was founded in 1982 under the laws of the State of Minnesota as Command Small Computer Learning Center, Inc., a computer training company and operated under several different names in the computer hardware and training sector. In 2005, the Company began acquiring domain names. On March 1, 2007, the Company changed its name to DigitalTown, Inc. and began developing a business plan to develop a platform to monetize the domain names. The Company’s headquarters are located at 11974 Portland Avenue, Burnsville, MN 55337, and its telephone and facsimile numbers are (952) 890-2362 and (952) 890-7451, respectively. The Company's Internet address is www.digitaltown.com. The Company is traded in the over-the-counter market under the ticker DGTW.
	The Company’s consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has a working capital deficit, recurring losses, and negative cash flows from operations. These matters raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of this uncertainty.
	At August 31, 2013, the Company had an accumulated deficit of $26,596,715.  Subsequent to August 31, 2013, the Company has received cash proceeds totaling approximately $72,000 from its stock subscription receivable. The Company anticipates that expected future proceeds from its stock subscription receivable, additional financing through the sale of its common stock or other equity-based securities, and additional sales of existing domain names will be sufficient to meet its working capital and capital expenditure needs through at least August 31, 2014.  In the event that we are unable to obtain additional capital in the future, we would be forced to further reduce operating expenses and/or cease operations altogether.
Principles of Consolidation	Principles of Consolidation
	The Company files consolidated financial statements that include its wholly-owned subsidiaries Tiger Media and The School Network, Inc. All material intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates	Use of Estimates
	The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from those estimates.
Accounts Receivable	Accounts Receivable
	Accounts receivable arose from the sale of and commission earned from display advertising. The Company evaluates collectability of accounts receivable based on a combination of factors including the age of the receivable or a specific customer’s inability to meet its financial conditions. In these circumstances, the Company records an allowance to reduce the receivable to an amount it deems collectible. The Company has determined that an allowance for doubtful accounts is not necessary as of August 31, 2013.
Revenue Recognition	Revenue Recognition
	The Company recognizes revenue when the following four criteria have been met:
	Persuasive evidence that an agreement exists
	Delivery has occurred
	The price is fixed and determinable
	Collectability is reasonably assured
	The Company recognizes revenue from the sale of display advertising appearing on specific pages of individual spirit sites within DigitalTown’s network. Display advertising is sold by the Company directly to local merchants and placed by the Company on specific pages of individual spirit sites targeted by the local merchant. The terms of these sales are for a fixed monthly amount for a period ranging from three months to one year. The Company has also entered into certain third party agreements which allow display advertising to be placed on individual spirit sites within DigitalTown’s network. Per these agreements, the Company receives commissions based on a percentage of the per click or per-impression revenue generated by these ads. The Company recognizes these commissions received as revenue.
Deferred Revenue	Deferred Revenue
	Deferred revenue is comprised of contractual billings in excess of recognized revenue and payments received in advance of revenue recognition from customers for which services have not been delivered.
Intangible Assets b Domain Names/Website Development Costs	Intangible Assets – Domain Names/Website Development Costs
	Domain name costs are accounted for in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC 350-50) guidance pertaining to Intangibles-Goodwill and Other, Website Development Costs. Certain modules and components of the Company’s overall website development are ready for their intended use and the Company’s resulting websites are currently operational. Accordingly, the annual domain name renewal fees are currently being amortized over one year and the purchase of any new domain names are the only amounts being capitalized. Previously, during the infrastructure development stage of its websites, the Company capitalized the purchase of new domain names and the annual domain name renewal fees. Additionally, since the ownership of each domain name can be renewed for a nominal renewal fee each year prior to their expiration date, the useful lives of the domain names are deemed to be indefinite and no amortization of the capitalized costs for the domain names will be recorded.
	Website development costs are accounted for in accordance with the FASB Accounting Standards Codification (ASC 350-40) guidance pertaining to Intangibles-Goodwill and Other, Internal-Use Software which requires that all internal and external costs incurred to develop the internal-use software necessary to operate the websites be capitalized. The guidance further states, amortization should begin when an individual module or component of the overall internal-use software is ready for its intended use. The cost of such module or component will be amortized on a straight-line basis over its estimated useful life, as determined by the Company, after taking into account the effects of obsolescence, technology, competition and other economic factors. The Company has components of its website development that are operational and are being amortized on a straight-line basis over a three year life.
Impairment of Long-Lived Assets	Impairment of Long-Lived Assets
	Long-lived assets, such as property and equipment and intangible assets – domain names/website development costs are reviewed for impairment whenever changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset.
Income Taxes	Income Taxes
	Deferred tax assets (net of any valuation allowance) and liabilities resulting from temporary differences, net operating loss carry-forwards and tax credit carry-forwards are recorded using an asset-and-liability method. Deferred taxes relating to temporary differences and loss carry-forwards are measured using the tax rate expected to be in effect when they are reversed or are realized. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be ultimately realized. The Company has recorded a full valuation allowance against its net deferred tax asset due to the uncertainty of realizing the related future benefits.
	The Company accounts for income taxes pursuant to Financial Accounting Standards Board guidance. This guidance prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s adoption of these provisions specifically related to uncertain tax positions resulted in no cumulative effect adjustment. The Company believes its income tax filing positions and deductions will be sustained upon examination and, accordingly, no reserves or related accruals for interest and penalties have been recorded at August 31, 2013 and February 28, 2013. In accordance with the guidance, the Company has adopted a policy under which, if required to be recognized in the future, interest related to the underpayment of income taxes will be classified as a component of interest expense and any related penalties will be classified in operating expenses in the statements of operations. The Company has three open years of tax returns subject to examination.
Stock-Based Compensation	Stock-Based Compensation
	The Company measures and recognizes compensation expense for all stock-based payment awards made to employees, directors and consultants on a straight-line basis over the respective vesting period of the awards. The compensation expense for the Company's stock-based payments is based on estimated fair values at the time of the grant of the portion of stock-based payment awards that are ultimately expected to vest.
	The Company estimates the fair value of stock-based payment awards on the date of grant using the Black-Scholes option pricing model. This option pricing model involves a number of assumptions, including the expected lives of stock options, the volatility of the public market price for the Company's common stock and interest rates.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements
	In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to improve the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in the ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. The new amendments will require an organization to:
	-Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income - but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period; and
	-Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense.
	The amendments apply to all public and private companies that report items of other comprehensive income. Public companies are required to comply with these amendments for all reporting periods (interim and annual). The amendments are effective for reporting periods beginning after December 15, 2012, for public companies. Early adoption is permitted. The adoption of ASU No. 2013-02 is not expected to have a material impact on our financial position or results of operations.
	In January 2013, the FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, which clarifies which instruments and transactions are subject to the offsetting disclosure requirements originally established by ASU 2011-11. The new ASU addresses preparer concerns that the scope of the disclosure requirements under ASU 2011-11 was overly broad and imposed unintended costs that were not commensurate with estimated benefits to financial statement users. In choosing to narrow the scope of the offsetting disclosures, the Board determined that it could make them more operable and cost effective for preparers while still giving financial statement users sufficient information to analyze the most significant presentation differences between financial statements prepared in accordance with U.S. GAAP and those prepared under IFRSs. Like ASU 2011-11, the amendments in this update will be effective for fiscal periods beginning on, or after January 1, 2013. The adoption of ASU 2013-01 is not expected to have a material impact on our financial position or results of operations.
	In October 2012, the FASB issued ASU 2012-04, “Technical Corrections and Improvements” in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 is not expected to have a material impact on our financial position or results of operations.
	In August 2012, the FASB issued ASU 2012-03, “Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)” in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs pursuant to the issuance of SAB No. 114. The adoption of ASU 2012-03 is not expected to have a material impact on our financial position or results of operations.
	In July 2012, the FASB issued ASU 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” in Accounting Standards Update No. 2012-02. This update amends ASU 2011-08,Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles - Goodwill and Other - General Intangibles Other than Goodwill. The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. The adoption of ASU 2012-02 is not expected to have a material impact on our financial position or results of operations.

Note_3_Intangible_Assets_Table

Note 3 Intangible Assets (Tables)	3 Months Ended
	Aug. 31, 2013
Accounting Policies [Abstract]
Intangible assets		August 31,	February 28,
		2013	2013
	Domain names	$        860,673	$      860,185
	Website development costs	366,166	362,680
	Less: accumulated amortization	-274,674	-219,989
	Intangible assets, net	$        952,165	$   1,002,876