Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Feb. 28, 2014 | Jun. 11, 2014 | Aug. 31, 2013 | |
Document And Entity Information | |||
Entity Registrant Name | MetaStat, Inc. | ||
Entity Central Index Key | 1404943 | ||
Document Type | S-1 | ||
Document Period End Date | 28-Feb-14 | ||
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 Public Float | $73,451,256 | ||
Entity Common Stock, Shares Outstanding | 21,469,431 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2014 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Nov. 30, 2014 | Feb. 28, 2014 | Feb. 28, 2013 |
ASSETS | |||
Cash and cash equivalents | $69,177 | $483,408 | $969,188 |
Other receivable | 20,000 | ||
Prepaid Insurance | 58,802 | 12,073 | |
Deferred financing cost | 60,523 | ||
Marketable securities, at fair value | 80,000 | ||
Other current assets | 885 | ||
Total Current Assets | 208,864 | 576,004 | 969,188 |
Equipment (net of accumulated depreciation of $34,192, $12,396, and $74,450, respectively) | 548,244 | 204,254 | 53,326 |
Refundable deposit | 289,319 | -10,367 | |
TOTAL ASSETS | 1,046,427 | 790,625 | 1,022,514 |
Current Liabilities | |||
Accounts payable | 548,511 | 257,965 | 168,005 |
Accrued expense | 37,190 | ||
Current portion of capital lease | 99,965 | 28,000 | |
Convertible notes (net od discount of $206,636, $71,543, and $0, respectively) | 2,475,717 | 716,957 | |
Accrued interest payable | 137,701 | 1,940 | |
Total current liabilities | 685,666 | ||
Long-term portion of capital lease | 187,683 | ||
TOTAL LIABILITIES | 873,349 | 2,871,383 | 886,902 |
STOCKHOLDERS' (DEFICIT) EQUITY | |||
Series A convertible preferred stock ($0.0001 par value; 1,000,000 shares authorized; 0, 0, and 874,257 shares issued and outstanding, respectively) | 87 | ||
Common stock (Common Stock, $0.0001 par value; 150,000,000 shares authorized; 21,573,899, 21,054,418 and 27,413,181 shares issued and outstanding respectively) | 2,741 | 2,157 | 2,106 |
Additional Paid-in-capital | 17,841,622 | 8,644,760 | 5,495,985 |
Accumulated deficit | -17,671,372 | -10,727,675 | -5,362,479 |
Total (Deficit) Equity | 173,078 | -2,080,758 | 135,612 |
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY | $1,046,427 | $790,625 | $1,022,514 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Nov. 30, 2014 | Feb. 28, 2014 | Feb. 28, 2013 |
Statement of Financial Position [Abstract] | |||
Accumulated depreciation | $74,450 | $34,192 | $12,396 |
Convertible debentures, discount | $0 | $206,636 | $71,543 |
STOCKHOLDERS' EQUITY | |||
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 874,257 | 0 | 0 |
Preferred stock, shares outstanding | 874,257 | 0 | 0 |
Common stock, par value | $0.00 | $0.00 | $0.00 |
Common stock, shares authorized | 150,000,000 | 150,000,000 | 150,000,000 |
Common stock, shares issued | 27,413,181 | 21,573,899 | 21,054,418 |
Common stock, shares outstanding | 27,413,181 | 21,573,899 | 21,054,418 |
Consolidated_Statements_of_Exp
Consolidated Statements of Expenses (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 55 Months Ended | |||
Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | |
Revenue | |||||||
Revenue | |||||||
Total revenue | |||||||
OPERATING EXPENSES | |||||||
General & administrative | 1,080,222 | 794,156 | 2,882,899 | 2,608,123 | 3,526,863 | 2,000,937 | 7,345,295 |
Research & development | 269,560 | 90,261 | 1,002,187 | 422,476 | 824,336 | 516,798 | 2,365,539 |
Total Operating Expenses | 1,349,782 | 884,417 | 3,885,086 | 3,030,599 | 4,351,199 | 2,517,735 | 9,710,834 |
OTHER EXPENSES (INCOME) | |||||||
Interest income | 303 | 27,296 | 79,590 | 90,846 | -82 | -596 | -678 |
Accretion expense | 196,190 | 539,319 | 559,496 | 829,969 | 1,500 | 831,469 | |
Deferred financing costs amortization | 60,523 | 14,159 | 14,159 | ||||
Interest expense | 137,098 | 1,940 | 139,038 | ||||
Loss on extinguishment of debt | 32,853 | 32,853 | 32,853 | ||||
Other income | -20 | -3,159 | -81 | ||||
Brokerage fees and commissions | 23,873 | 23,873 | |||||
Loss on securities held for sale | 33,707 | 33,707 | |||||
Beneficial conversion feature | 2,324,758 | ||||||
Total Other Expenses (Income) | 57,883 | 223,466 | 3,058,611 | 650,261 | 1,013,997 | 2,844 | 1,016,841 |
NET LOSS | ($1,407,665) | ($1,107,883) | ($6,943,697) | ($3,680,860) | ($5,365,196) | ($2,520,579) | ($10,727,675) |
Net loss per share, basic and diluted | ($0.05) | ($0.05) | ($0.29) | ($0.17) | ($0.25) | ($0.12) | |
Weighted average of shares outstanding | 26,694,923 | 21,469,435 | 24,230,086 | 21,413,084 | 21,169,091 | 20,882,199 |
Statements_of_Cash_Flows
Statements of Cash Flows (USD $) | 9 Months Ended | 12 Months Ended | 55 Months Ended | ||
Nov. 30, 2014 | Nov. 30, 2013 | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||||
Net loss | ($6,943,697) | ($3,680,860) | ($5,365,196) | ($2,520,579) | |
Adjustments to reconcile net loss to net cash used in operating activities | |||||
Depreciation | 40,258 | 10,342 | 21,796 | 11,125 | 34,192 |
Amortization of deferred financing costs | 60,523 | 14,159 | 14,159 | ||
Warrants issued for services | 42,993 | 228,689 | 421,681 | ||
Option expense | 367,394 | 1,185,508 | 1,647,572 | 2,258,822 | |
Common stock issued for services | 806,245 | 284,200 | 299,200 | 11,075 | 452,055 |
Accretion of discount | 539,319 | 559,496 | 829,969 | 1,500 | 831,469 |
Loss on securities held for sale | 33,707 | ||||
Beneficial conversion feature | 2,324,759 | ||||
Net changes in operating assets and liabilities: | |||||
Other receivables | 20,000 | -20,000 | -20,000 | ||
Prepaid expenses | 47,111 | 51,186 | 81,766 | 81,766 | |
Other assets | -885 | ||||
Refundable deposit | -278,952 | -4,667 | -10,367 | -10,367 | |
Accounts payable | 251,599 | 72,891 | 89,960 | -123,854 | 257,965 |
Accrued expense | 37,190 | ||||
Accrued interest | 63,712 | 89,537 | 135,761 | 1,940 | 137,701 |
NET CASH USED IN OPERATING ACTIVITIES | -2,631,717 | -1,432,367 | -2,199,534 | -2,395,909 | -6,235,379 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||||
Proceeds from sale of investment | 1,142,926 | ||||
Purchase of equipment | 65,645 | 165,409 | -172,724 | -45,243 | -238,446 |
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | 1,077,281 | -165,409 | -172,724 | -45,243 | -238,446 |
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
Proceeds from issuance of convertible debt | 615,000 | 1,200,000 | |||
Proceeds from equity financing | 750,000 | 880,000 | 3,418,755 | ||
Proceeds from subscription receivables | 865,000 | 865,000 | |||
Payments of convertible debt | -100,000 | ||||
Payments of short-term debt | -93,840 | -83,304 | -93,840 | -93,840 | |
Borrowings on convertible notes | 2,055,000 | 787,000 | 2,842,000 | ||
Payment of financing costs | -74,682 | -74,682 | |||
Payments of capital lease obligation | -30,955 | ||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 1,140,205 | 1,116,696 | 1,886,478 | 2,532,000 | 6,957,233 |
NET INCREASE (DECREASE) IN CASH | -414,231 | -481,080 | -485,780 | 90,848 | 483,408 |
Cash at the beginning of the year | 483,408 | 969,188 | 969,188 | 878,340 | |
Cash at the end of the year | 69,177 | 488,108 | 483,408 | 969,188 | 483,408 |
Interest Paid | 3,278 | 3,278 | |||
Income taxes paid | |||||
Financing of insurance premiums | 93,840 | 93,840 | 93,840 | 93,840 | |
Recapitalization of PVSP shareholders | 8 | ||||
Warrants issued with convertible notes | 357,145 | 71,543 | 428,688 | ||
Beneficial conversion feature in convertible notes | 532,210 | 0 | 532,210 | ||
Common stock and warrants issued for conversion of debt | 3,558,413 | ||||
Capital lease financing for fixed assets | 318,603 | ||||
Securities held-for-sale exchanged for common and preferred shares | 1,000,000 | ||||
Accrued offering costs | 38,950 | ||||
Securities exchanged for preferred shares | 256,633 | ||||
Debt discount | $173,035 | $629,332 |
Statement_of_Equity
Statement of Equity (USD $) | Common Stock | Additional Paid-In Capital | Retained Earnings / Accumulated Deficit | Total |
Beginning Balance, Amount at Jul. 21, 2009 | ||||
Beginning Balance, Shares at Jul. 21, 2009 | ||||
Issue common stock to founders for cash at $.0001 per share, Shares | 1,100,000 | |||
Issue common stock to founders for cash at $.0001 per share, Amount | 110 | -100 | 10 | |
Sale of common stock for cash at $.0018 per share, Shares | 660,000 | |||
Sale of common stock for cash at $.0018 per share, Amount | 66 | 1,134 | 1,200 | |
Sale of common stock for cash at $.023 per share, Shares | 3,410 | |||
Sale of common stock for cash at $.023 per share, Amount | 341 | 77,159 | 77,500 | |
Net loss | -52,071 | -52,071 | ||
Ending Balance, Amount at Feb. 28, 2010 | 517 | 78,193 | -52,071 | 26,639 |
Ending Balance, Shares at Feb. 28, 2010 | 5,170,000 | |||
Sale of common stock for cash at $.023 per share, Shares | 6,055,500 | |||
Sale of common stock for cash at $.023 per share, Amount | 606 | 137,169 | 137,775 | |
Issued common stock for services at $0.023 per share, Shares | 3,290,570 | |||
Issued common stock for services at $0.023 per share, Amount | 329 | 74,457 | 74,786 | |
Sale of common stock for cash at $0.45 per share, Shares | 515,900 | |||
Sale of common stock for cash at $0.45 per share, Amount | 52 | 232,073 | 232,125 | |
Sale of common stock for cash at $0.68 per share, Shares | 212,668 | |||
Sale of common stock for cash at $0.68 per share, Amount | 21 | 144,979 | 145,000 | |
Net loss | -363,175 | -363,175 | ||
Ending Balance, Amount at Feb. 28, 2011 | 15,252 | 666,871 | -415,246 | 253,150 |
Ending Balance, Shares at Feb. 28, 2011 | 15,244,638 | |||
Sale of common stock for cash at $.023 per share, Shares | 80,069 | |||
Sale of common stock for cash at $.023 per share, Amount | 8 | 1,563 | 1,571 | |
Sale of common stock for cash at $0.45 per share, Shares | 103,004 | |||
Sale of common stock for cash at $0.45 per share, Amount | 10 | 47,060 | 47,070 | |
Sale of common stock for cash at $0.68 per share, Shares | 2,781,539 | |||
Sale of common stock for cash at $0.68 per share, Amount | 278 | 1,896,226 | 1,896,504 | |
Subscription receivable, Shares | 865,000 | |||
Subscription receivable, Amount | 87 | 864,913 | 865,000 | |
Warrants expense | 149,999 | 149,999 | ||
Stock option expense | 611,250 | 611,250 | ||
Issued common stock for services at $0.45 per share, Shares | 160,158 | |||
Issued common stock for services at $0.45 per share, Amount | 16 | 72,783 | 72,799 | |
Recapitalization of PVSO shareholders, Shares | 840,000 | |||
Recapitalization of PVSO shareholders, Amount | 84 | -84 | ||
Rounding, Amount | 10 | |||
Net loss | -2,426,654 | -2,426,654 | ||
Ending Balance, Amount at Feb. 29, 2012 | 2,008 | 4,310,581 | -2,841,900 | 1,470,689 |
Ending Balance, Shares at Feb. 29, 2012 | 20,074,418 | |||
Sale of common stock for cash at $1.00 per share, Shares | 880,000 | |||
Sale of common stock for cash at $1.00 per share, Amount | 193 | 879,807 | 880,000 | |
Shares issued for service, Shares | 100,000 | |||
Shares issued for service, Amount | -95 | 11,170 | 11,075 | |
Warrants issued | 149,995 | 149,995 | ||
Debt discount | 71,544 | 71,544 | ||
Warrants expense | 78,694 | 78,694 | ||
Change in estimate for shares issued | -5,806 | -5,806 | ||
Warrants issued with convertible notes | 71,543 | |||
Beneficial conversion feature in convertible notes | 0 | |||
Net loss | -2,520,579 | -2,520,579 | ||
Ending Balance, Amount at Feb. 28, 2013 | 2,157 | 8,644,760 | -10,727,675 | 135,612 |
Ending Balance, Shares at Feb. 28, 2013 | 21,576,899 | |||
Shares issued for service, Shares | 430,013 | |||
Shares issued for service, Amount | 42 | 299,158 | 299,200 | |
Warrants issued | 42,993 | 42,993 | ||
Stock option expense | 1,647,572 | 1,647,572 | ||
Warrants issued in debt modification | 126,381 | 126,381 | ||
Warrants issued with convertible notes | 357,145 | 357,145 | ||
Beneficial conversion feature in convertible notes | 532,210 | 532,210 | ||
Common stock issued in debt modification, Shares | 92,468 | |||
Common stock issued in debt modification, Amount | 9 | 143,316 | 143,325 | |
Net loss | -5,365,196 | -5,365,196 | ||
Ending Balance, Amount at Feb. 28, 2014 | $2,157 | $8,644,760 | ($10,727,675) | ($2,080,758) |
Ending Balance, Shares at Feb. 28, 2014 | 21,576,899 |
DESCRIPTION_OF_BUSINESS_AND_GO
DESCRIPTION OF BUSINESS AND GOING CONCERN | 9 Months Ended | 12 Months Ended |
Nov. 30, 2014 | Feb. 28, 2014 | |
Description Of Business And Going Concern | ||
Note 1. DESCRIPTION OF BUSINESS AND GOING CONCERN | MetaStat, Inc. (“we,” “us,” “our,” the “Company,” or “MetaStat”) is a molecular diagnostic company focused on the development and commercialization of novel diagnostics to provide physicians and patients actionable information regarding the risk of systemic metastasis. We believe cancer treatment strategies can be personalized and outcomes improved through new diagnostic tools that more accurately identify the aggressiveness and metastatic potential of primary tumors. | MetaStat, Inc. (“we,” “us,” “our,” the “Company,” or “MetaStat”) formerly known as Photovoltaic Solar Cells Inc. (“PVSO”) was incorporated on March 28, 2007 under the laws of the State of Nevada. From inception until November of 2008, PVSO’s business plan was to produce and market inexpensive solar cells and in November 2008, our board of directors determined that the implementation of our business plan was no longer financially feasible. At such time, we discontinued the implementation of our prior business plan and pursued an acquisition strategy, whereby we sought to acquire a business. Based on these business activities, until February 27, 2012, we were considered a "blank check" company, with no or nominal assets (other than cash) and no or nominal operations. |
Systemic metastasis, cancer that spreads from a primary tumor through the bloodstream to other areas of the body, is responsible for approximately 90% of all solid tumor cancer related deaths. However, for example, only 30-35% of breast cancer are biologically capable of metastatic spread yet the majority of these patients are treated with aggressive therapies that could be modified or eliminated if the true biologic nature of the disease could be identified. | MetaStat BioMedical, Inc. (“MBM”) formerly known as MetaStat, Inc., our Delaware operating subsidiary, was incorporated in the state of Texas on July 22, 2009, re-incorporated in the State of Delaware on August 26, 2010, and since inception has been a Development Stage Enterprise as defined by the ASC 915-15. During this time MBM has devoted substantially all of its efforts to activities such as acquiring biomedical technology licenses, funding research and development, engaging in organizational activities, and raising capital. MBM was formed to allow cancer patients to benefit from the latest discoveries in how cancer spreads to other organs in the body. | |
We are developing two epigenetic-based diagnostic assays called MetaSite Breast™ and MenaCalc™. Both our MetaSite Breast™ and MenaCalc™ diagnostic product lines are designed to accurately stratify patients based on their individual risk of metastasis and to allow oncologists to better "customize" cancer treatment decisions by positively identifying patients with a high-risk of metastasis who need aggressive therapy and by sparing patients with a low-risk of metastasis from the harmful side effects and expense of chemotherapy. | On February 27, 2012, we consummated a share exchange transaction as more fully described below, whereby we acquired all the outstanding shares of MBM and, MBM became our wholly owned subsidiary. From and after the share exchange, our business has been conducted through our wholly owned subsidiary, MBM, and the discussion of our business is that of our current business which is conducted through MBM. | |
Basis of Presentation | Prior to April 9, 2012, our company name was Photovoltaic Solar Cells, Inc. For the sole purpose of changing our name, on April 9, 2012, we merged with a newly-formed, wholly owned subsidiary incorporated under the laws of Nevada called MetaStat, Inc. As a result of the merger, our corporate name was changed to MetaStat, Inc. In May 2012, we changed the name of our Delaware operating subsidiary to MetaStat BioMedical, Inc. from MetaStat, Inc. | |
The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, MetaStat BioMedical, Inc., a Delaware corporation. All significant intercompany balances and transactions have been eliminated in consolidation. These interim financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”) in the United States consistent with those applied in, and should be read in conjunction with, the Company’s audited consolidated financial statements and related footnotes for the year ended February 28, 2014 included in the Company’s Annual Report on Form 10-K as filed with the United States Securities and Exchange Commission (“SEC”) on June 13, 2014. These financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the Company’s financial position as of November 30, 2014 and its results of operations and cash flows for the interim periods presented and are not necessarily indicative of results for subsequent interim periods or for the full year. These interim financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and allowed by the relevant SEC rules and regulations; however, the Company believes that its disclosures are adequate to ensure that the information presented is not misleading. Certain amounts in prior periods have been reclassified to conform to current presentation. | We are a development stage life sciences company focused on developing and commercializing novel diagnostic technologies and therapeutics for the early and reliable prediction and treatment of systemic metastasis - cancer that spreads from a primary tumor through the bloodstream to other areas of the body. Systemic metastasis is responsible for greater than 90% of all solid tumor cancer related deaths and as such, we believe more accurate risk stratification and effective treatment of metastatic disease and/or the prevention of systemic metastasis is needed to improve patient outcomes. | |
Going Concern | Share Exchange Agreement | |
These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As of November 30, 2014, the Company has an accumulated deficit of $17,671,372. The continuation of the Company as a going concern is dependent upon continued financial support from its shareholders, the ability of the Company to obtain necessary equity and/or debt financing to continue operations, and the attainment of profitable operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The Company cannot make any assurances that additional financings will be completed on a timely basis, on acceptable terms or at all. If the Company is unable to complete a debt or equity offering, or otherwise obtain sufficient financing when and if needed, it would negatively impact it’s business and operations, which could cause the price of its common stock to decline. It could also lead to the reduction or suspension of the Company’s operations and ultimately force the Company to cease operations. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. | On February 27, 2012 (the “Closing Date”), we entered into a Share Exchange Agreement (the “Exchange Agreement”) by and among us, MBM, the holders of all outstanding shares of MBM (the “MBM Shareholders”) and Waterford Capital Acquisition Co IX, LLC, our principal shareholder (the “Company Principal Shareholder”), whereby we acquired all of the outstanding shares of MBM (the “MBM Shares”) from the MBM Shareholders. In exchange, we issued to the MBM Shareholders an aggregate of 18,369,421 shares of our common stock (the “Exchange Shares”), equal to 95.6% of our outstanding shares of common stock after such issuance. As a result of the transactions contemplated by the Exchange Agreement (collectively, the “Share Exchange”), MBM became our wholly owned subsidiary. Pursuant to the Exchange Agreement, we assumed warrants to purchase up to 780,511 shares of MBM’s common stock, with exercise prices ranging between $1.50 and $2.00 per share on a 2.2-for-1 basis, equivalent to 1,717,122 shares of our common stock with exercise prices ranging from $0.68 to $0.91 per share. Immediately prior to the Share Exchange, we converted approximately $336,075 of debt owed to the Company Principal Shareholder into 309,595 shares of our common stock (the “Debt Conversion”) and issued an aggregate of 36,000 shares of our common stock to certain of our officers, directors and consultants in consideration for services rendered to us, leaving 840,000 shares of our common stock outstanding immediately prior to the issuance of the Exchange Shares and showing on our Statement of Stockholders’ Equity as 840,000 shares as ‘recapitalization of PVSO shareholders’. Additionally, immediately prior to the Share Exchange, we issued five-year warrants to purchase up to an aggregate of 350,000 shares of our common stock at an exercise price of $1.40 per share, of which warrants to purchase 337,500 shares were issued for a purchase price of $21,000 and warrants to purchase 12,500 shares were issued for services rendered to us prior to the Share Exchange (the “Warrant Financing”). We used the proceeds of the Warrant Financing to pay off all of our liabilities prior to the Share Exchange. | |
Recent Accounting Pronouncement | On the Closing Date, we assumed MBM’s 2012 Omnibus Securities and Incentive Plan (the “2012 Plan”) and reserved 1,116,789 shares of our common stock for the benefit of our employees, nonemployee directors and consultants. All 507,500 options outstanding under the 2012 Plan were converted, on a 2.2-for-1 basis, into the right to receive options to purchase up to 1,116,500 shares of our common stock with an exercise price of $0.68 per share. On May 21, 2012, we increased the number of authorized and unissued shares of common stock reserved for issuance pursuant to the 2012 Plan to 3,316,789. | |
In June 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) No. 2014-10, “Development Stage Entities (Topic 915), Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, "Consolidation” (“ASU 2014-10”). The amendments in ASU 2014-10 remove the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from GAAP. In addition, the amendments eliminate the requirements for development stage entities to: (i) present inception-to-date information in the statements of income, cash flows, and shareholder equity; (ii) label the financial statements as those of a development stage entity; (iii) disclose a description of the development stage activities in which the entity is engaged; and (iv) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The presentation and disclosure requirements in ASC Topic 915, "Development Stage Entities" are no longer required for interim and annual reporting periods beginning after December 15, 2014, however, early adoption is permitted. The Company has elected to early adopt the presentation and disclosure provisions of ASU 2014-10 for its unaudited condensed consolidated financial statements effective August 31, 2014. | Going Concern | |
In August 2014, the FASB issued ASU No. 2014-15, “ Presentation of Financial Statements-Going Concern” (“ASU 2014-15”), which establishes management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern in connection with preparing financial statements for each annual and interim reporting period. ASU 2014-15 also provides guidance to determine whether to disclose information about relevant conditions and events when there is substantial doubt about an entity’s ability to continue as a going concern. This update is effective for interim and annual reporting periods beginning December 15, 2016; early adoption is permitted. We are currently evaluating the impact that this standard will have on our consolidated financial statements. | These accompanying financial statements have been prepared assuming that the Company will continue as going concern. For the period from July 22, 2009 (inception) to February 28, 2014, the Company has accumulated a deficit of $10,727,675, including a net loss of $5,365,196 for the year ended February 28, 2014, and has not generated revenues or positive cash flows from operations. The continuation of the Company as a going concern is dependent upon continued financial support from its shareholders, the ability of the Company to obtain necessary equity and/or debt financing to continue operations, and the attainment of profitable operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The Company cannot make any assurances that additional financings will be available to it and, if available, completed on a timely basis, on acceptable terms or at all. If the Company is unable to complete a debt or equity offering, or otherwise obtain sufficient financing when and if needed, it would negatively impact its business and operations and could also lead to the reduction or suspension of the Company’s operations and ultimately force the Company to cease operations. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
Summary Of Significant Accounting Policies | |||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Principles of Consolidation | ||||||||
The consolidated financial statements include the accounts of MetaStat, Inc. and its wholly-owned subsidiary, MetasStat BioMedical, Inc. All significant intercompany accounts and transactions have been eliminated in consolidation. | |||||||||
Cash and Cash Equivalents | |||||||||
For purposes of the Statement of Cash Flows, the Company considers all short-term debt securities purchased with maturity of three months or less to be cash equivalents. | |||||||||
The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risks on cash and cash equivalents. | |||||||||
Equipment | |||||||||
Equipment is stated at cost. The cost of equipment is depreciated over the estimated useful lives of the related assets. Depreciation is computed using the straight-line method for financial reporting purposes and accelerated methods for income tax purposes. Expenditures for major renewals or betterments that extend the useful lives of equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. | |||||||||
Long-lived Assets | |||||||||
Long-lived assets are evaluated for impairment whenever events or conditions indicate that the carrying value of an asset may not be recoverable. If the sum of the expected undiscounted cash flows is less than the carrying value of the related asset or group of assets, a loss is recognized for the difference between the fair value and carrying value of the asset or group of assets. There were no events or conditions that indicated that impairment of long-lived assets may have occurred as of February 28, 2014 and 2013. | |||||||||
Deferred Financing Costs | |||||||||
Debt issuance costs are recorded as deferred financing costs and amortized over the maturity period of the related debt instrument using the effective interest method. | |||||||||
Debt Instruments | |||||||||
We analyze debt issuance for various features that would generally require either bifurcation and derivative accounting, or recognition of a debt discount or premium under authoritative guidance. | |||||||||
Detachable warrants issued in conjunction with debt are measured at their relative fair value, if they are determined to be equity instrument, or their fair value, if they are determined to be liability instruments, and recorded as a debt discount. Conversion features that are in the money at the commitment date constitute a beneficial conversion feature that is measured at its intrinsic value and are recognized as debt discount. Debt discount is amortized as accretion expense over the maturity period of the debt using the effective interest method. Contingent beneficial conversion features are recognized when the contingency has been resolved. | |||||||||
Development Stage | |||||||||
The Company complies with Statement of Financial Accounting Standard ASC 915-15 for its characterization of the Company as development stage. | |||||||||
Revenues | |||||||||
We currently do not have any revenues. We expect to derive our revenues from sale of our products which are currently under development. | |||||||||
Net Loss Per Share | |||||||||
Basic net loss per common share is computed based on the weighted average number of common shares outstanding during the period. Restricted shares issued with vesting condition that have not been met at the end of the period are excluded from the computation of the weighted average shares. As of February 28, 2014, 303,153 restricted shares of common stock were excluded from the computation of the weighted average shares. | |||||||||
Diluted net loss per common share is calculated giving effect to all dilutive potential common shares that were outstanding during the period. Diluted potential common shares generally consist of incremental shares issuable upon exercise of stock options and warrants and conversion of outstanding options and warrants and shares issuable from convertible securities. | |||||||||
In computing diluted loss per share for the years ended February 28, 2014 and 2013, no effect has been given to the common shares issuable at the end of the period upon the conversion or exercise of the following securities as their inclusion would have been anti-dilutive: | |||||||||
28-Feb-14 | 28-Feb-13 | ||||||||
Stock options | 2,680,000 | 1,116,500 | |||||||
Warrants | 3,146,355 | 2,732,074 | |||||||
Convertible notes | 1,986,467 | 315,576 | |||||||
Total | 7,812,822 | 4,164,150 | |||||||
Income Taxes | |||||||||
Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to net operating loss carry forwards and temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. These assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse. A valuation allowance is recorded if it more likely than not that some portion or all of the deferred tax assets will not be realized in future periods. | |||||||||
Research and Development Costs | |||||||||
Research and development costs are charged to operations when incurred and are included in operating expenses. Research and development costs consist principally of compensation cost for our employees and consultants that perform our research activities, the fees paid to maintain our licenses and the payments to third parties for clinical trial and additional product development and testing. Research and development costs were $824,336 and $516,798 for the years ended February 28, 2014 and February 28, 2013, respectively, and $2,365,539 for the period from July 22, 2009 (inception) to February 28, 2014. | |||||||||
Use of Estimates | |||||||||
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. | |||||||||
Stock-Based Compensation | |||||||||
We account for share-based payments award issued to employees and members of our Board of Directors by measuring the fair value of the award on the date of grant and recognizing this fair value as stock-based compensation using a straight-line basis over the requisite service period, generally the vesting period. For awards issued to non-employees, the measurement date is the date when the performance is complete or when the award vests, whichever is the earliest. Accordingly, non-employee awards are measured at each reporting period until the final measurement date. The fair value of the award is recognized as stock-based compensation over the requisite service period, generally the vesting period. | |||||||||
For awards with performance conditions that affect their vesting, such as the occurrence of certain transactions or the achievement of certain operating or financial milestones, recognition of fair value of the award occurs when vesting becomes probable. For awards with market condition that affect their vesting, the fair value of the award is recognized as stock-based compensation over the requisite service period, generally the vesting period. | |||||||||
Reclassifications | |||||||||
Certain reclassifications have been made to prior year amounts to conform to the current year presentation. | |||||||||
Recently Issued Accounting Pronouncements | |||||||||
We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow. | |||||||||
LICENSE_AGREEMENT_AND_COMMITME
LICENSE AGREEMENT AND COMMITMENTS | 9 Months Ended | 12 Months Ended | |
Nov. 30, 2014 | Feb. 28, 2014 | ||
Research and Development [Abstract] | |||
LICENSE AGREEMENT AND COMMITMENTS | On October 31, 2014, we provided the Licensee notice to terminate the License Agreement dated January 3, 2012, in connection with the patent application entitled “An In Vivo Quantitative Screening Test For Anti-Metastasis Treatment Efficacy” (the “Third License Agreement”). All obligations pursuant to the Third License Agreement have been satisfied. Management determined that the intellectual property covered by the Third License Agreement was non-essential to its business and not related to its focus on the commercialization of its epigenetic-based diagnostics. | License Agreement | |
The Company entered in to a Patent and Technology License Agreement (the “License Agreement”) with the Albert Einstein College of Medicine of Yeshiva University, Massachusetts Institute of Technology, Cornell University, and the IFO-Regina Elena Cancer Institute (together the “Licensors”) during August 2010. In conjunction with entering into the License Agreement, the Company also entered into a Stock Subscription Agreement (the “Subscription Agreement”) and a Stockholders Agreement (the “Stockholders Agreement”) with the Licensors, which included provisions such as participation rights in future financings, co-sale rights, and certain limited anti-dilution rights. The License Agreement grants the Company a world-wide exclusive license to materials and methods for use in the diagnosis and treatment of metastatic spread of solid tumor cancers. In return, the Company has agreed to grant Company equity to the Licensors, to reimburse the Licensors patent expenses thus far incurred, to pay all future patent expenses, pay a royalty on any sales of product using licensed technology, as well as certain minimum royalties and milestone payments. | |||
Pursuant to the License Agreement, we are also obligated to make the following royalties and payments to the Licensors: | |||
• | Royalty payment of a specified percentage of net sales. | ||
• | Minimum royalty payment of a specified percentage of net sales in case MetaStat pays royalties to unaffiliated third parties for patent rights. | ||
• | Issue 30% of MBM’s outstanding common stock to the Licensors calculated on a fully diluted, as converted basis. Accordingly, on August 26, 2010 MBM issued 3,290,570 common shares valued at $74,786. | ||
• | Non-refundable license fee of $25,000 upon execution of License Agreement. | ||
• | License maintenance fee of $30,000 on each of the first, second, third and fourth anniversary of the License Agreement. The payment may be credited against royalties made during the twelve month period. | ||
• | License maintenance fee of $50,000, and $75,000 on the fifth and sixth anniversaries of the License Agreement, respectively. Each payment may be credited against royalties made during each such twelve month period. | ||
• | License maintenance fee of $100,000 on the seventh and each subsequent anniversary of the License Agreement. Each payment may be credited against royalties made during each such twelve month period. | ||
License payments are expensed as incurred and recorded in research and development expense. | |||
Second License Agreement and Third License Agreement | |||
Additionally, effective in March 2012, we entered into two additional license agreements with Einstein. The second license agreement with Einstein (the “Second License Agreement”) and the third license agreement with Einstein (the “Third License Agreement”) both cover pending patent applications, patent disclosures, cell lines and technology surrounding discoveries in the understanding of the underlying mechanisms of systemic metastasis in solid epithelial cancers. The Second License Agreement and the Third License Agreement both require certain customary payments such as a license signing fee, reimbursement of patent expenses, annual license maintenance fees, milestone payments, and the payment of royalties on sales of products or services covered under such agreements. | |||
Pursuant to the Second License Agreement, we are also obligated to make the following royalties and payments to the Einstein: | |||
• | Royalty payment of a specified percentage of net sales. | ||
• | Minimum royalty payment of a specified percentage of net sales in case MetaStat pays royalties to unaffiliated third parties for patent rights. | ||
• | Non-refundable license fee of $15,000 upon execution of Second License Agreement. | ||
• | License maintenance fee of $12,000 on each of the first and second anniversary of the Second License Agreement. The payment may be credited against royalties made during the twelve month period. | ||
• | License maintenance fee of $30,000, on each of the third, and forth anniversary of the Second License Agreement and $50,000 on the fifth anniversary of the Second License Agreement and $75,000 on the sixth anniversary of the Second License Agreement, respectively. Each payment may be credited against royalties made during each such twelve month period. | ||
• | License maintenance fee of $100,000 on the seventh and each subsequent anniversary of the Second License Agreement. Each payment may be credited against royalties made during each such twelve month period. | ||
Pursuant to the Third License Agreement, we are also obligated to make the following royalties and payments to the Einstein: | |||
• | Royalty payment of a specified percentage of net sales. | ||
• | Minimum royalty payment of a specified percentage of net sales in case MetaStat pays royalties to unaffiliated third parties for patent rights. | ||
• | Non-refundable license fee of $15,000 upon execution of Third License Agreement. | ||
• | License maintenance fee of $12,000 on each of the first and second anniversary of the Third License Agreement. The payment may be credited against royalties made during the twelve month period. | ||
• | License maintenance fee of $30,000, on each of the third, and forth anniversary of the Third License Agreement and $50,000 on the fifth anniversary of the Third License Agreement and $75,000 on the sixth anniversary of the Third License Agreement, respectively. Each payment may be credited against royalties made during each such twelve month period. | ||
• | License maintenance fee of $100,000 on the seventh and each subsequent anniversary of the Third License Agreement. Each payment may be credited against royalties made during each such twelve month period. | ||
License payments are expensed as incurred and recorded in research and development expense. | |||
2014 Alt. Spl. License Agreements | |||
On December 7, 2013, we entered into two separate worldwide exclusive license agreements with M.I.T. and its David H. Koch Institute for Integrative Cancer Research at M.I.T. and its Department of Biology, Einstein, and Montefiore Medical Center (“Montefiore” and, together with M.I.T. and Einstein, the “Alt. Spl. Licensors”). The diagnostic license agreement (the “Alt. Spl. Diagnostic License Agreement”) covers pending patent applications, patent disclosures, and technology surrounding discoveries of alternatively spliced mRNA and protein isoform markers for the diagnosis and prognosis of cancer through the epithelial to mesenchymal transition (“EMT”) in epithelial solid tumor cancers. The therapeutic license agreement (the “Alt. Spl. Therapeutic License Agreement” and, together with the Diagnostic License Agreement, the “2014 Alt. Spl. License Agreements”) covers pending patent applications, patent disclosures, and technology surrounding discoveries of alternatively spliced mRNA and protein isoform markers for the treatment and/or prevention of cancer through the EMT in epithelial solid tumor cancers. The 2014 Alt. Spl. License Agreements call for certain customary payments such as a license signing fee, reimbursement of patent expenses, annual license maintenance fees, milestone payments, and the payment of royalties on sales of products or services covered under the agreement. | |||
Pursuant to the Diagnostic Alt. Splicing Agreement, we are obligated to make the following royalties and payments to the MIT: | |||
• | Royalty payment of a specified percentage of net sales. | ||
• | Minimum royalty payment of a specified percentage of net sales in case MetaStat pays royalties to unaffiliated third parties for patent rights. | ||
• | Non-refundable license fees of $15,000 upon execution of the Therapeutic Alt. Spl. Agreement | ||
• | License Maintenance fee of $10,000, $15,000, $25,000, $37,500, and $50,000 beginning on January 1, 2015 and on the second, third, fourth, and fifth anniversary respectively. Each payment will be credited against royalties made during each such twelve month period. | ||
• | License maintenance fee of $50,000 each year thereafter that the license is in effect. Each payment will be credited against royalties made during each such twelve month period. | ||
Pursuant to the Therapeutic Alt. Splicing Agreement, we are obligated to make the following royalties and payments to the MIT: | |||
• | Royalty payment of a specified percentage of net sales. | ||
• | Minimum royalty payment of a specified percentage of net sales in case MetaStat pays royalties to unaffiliated third parties for patent rights. | ||
• | Non-refundable license fees of $5,000 upon execution of the Therapeutic Alt. Spl. Agreement | ||
• | No license maintenance fees shall be due for as long as the Diagnostic Alt. Spl. License Agreement is in effect. | ||
License payments are expensed as incurred and recorded in research and development expense. | |||
Lease Agreements | |||
Effective as of September 1, 2013, the Company entered into an agreement of lease with Long Island High Technology Incubator, Inc. in connection with the Company’s new drug discovery research facility located in Stony Brook, New York. The term of the lease is for one year, from September 1, 2013 through August 31, 2014, and the rent payable thereunder is $28,000 per year, payable in monthly installments of $2,333. |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
INCOME TAXES | During the fiscal years ended February 28, 2014, and February 28, 2013, MetaStat incurred net losses and, therefore, has no tax liability. | ||||||||
The difference between income taxes at the statutory federal income tax rate and income taxes reported in the statements of operations are attributable to the following: | |||||||||
28-Feb-14 | 28-Feb-13 | ||||||||
Income tax benefit at the federal statutory rate | 34 | % | 34 | % | |||||
Permanent differences | (3.62 | %) | -3.24 | % | |||||
Increase in valuation allowance | (30.38 | %) | (30.76 | %) | |||||
Provision for income tax | 0 | % | 0 | % | |||||
As at February 28, 2014, and February 28, 2013, deferred tax assets (liabilities) consisted of the following: | |||||||||
2014 | 2013 | ||||||||
Net operating loss carryforwards | $ | 2,830,058 | $ | 1,573,290 | |||||
Stock-based compensation | 904,278 | 246,238 | |||||||
3,734,336 | 1,819.53 | ||||||||
Depreciation | -10,273 | -10,273 | |||||||
3,724,063 | 1,809,255 | ||||||||
Less: Valuation allowance | -3,724,063 | (1,809,255 | ) | ||||||
Net deferred tax asset | $ | - | $ | - | |||||
In assessing the realization of deferred tax assets, management determines whether it is more likely than not some, or all, of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the carryforward period as well as the period in which those temporary differences become deductible. Management considers the reversal of taxable temporary differences, projected taxable income and tax planning strategies in making this assessment. Based upon historical losses and the possibility of continued taxable losses over the periods that the deferred tax assets are deductible, management believes it is more likely than not that the Company will not realize the benefits of these deferred tax assets and thus recorded a valuation allowance against the entire net deferred tax asset balance. The valuation allowance increased by $1,914,808 and $1,132,682 in the years ended February 28, 2014 and 2013, respectively. | |||||||||
At February 28, 2014, the cumulative federal and state net operating loss carry-forwards are $7,372,397 and $5,445,159, respectively and, and will expire between 2029 and 2034. | |||||||||
The Internal Revenue Code (“IRC”) limits the amount of net operating loss carryforwards that a company may use in a given year in the event of certain cumulative changes in ownership over a three-year period as described in Section 382 of the IRC. We have not performed a detailed analysis to determine whether an ownership change has occurred. Such a change of ownership could limit our utilization of the net operating losses, and could be triggered by subsequent sales of securities by the Company or its stockholders. | |||||||||
The Company records interest and penalties related to unrecognized tax benefits within income tax expense. The Company had not accrued any interest or penalties related to unrecognized benefits. No amounts were provided for unrecognized tax benefits attributable to uncertain tax positions as of February 28, 2014 and 2013. The Company is no longer subject to Federal income tax assessment for years before 2010. However, since the Company has incurred net operating losses every year since inception, all of its income tax returns are subject to examination and adjustments by the Internal Revenue Service for at least three years following the year in which the tax attributes are utilized. | |||||||||
EQUITY
EQUITY | 9 Months Ended | 12 Months Ended |
Nov. 30, 2014 | Feb. 28, 2014 | |
Equity [Abstract] | ||
EQUITY | Issuance of common stock for services | On February 27, 2012, we entered into the Exchange Agreement with MBM by issuing 18,369,421 shares of our common stock in exchange for the MBM Shares. Immediately prior to the Share Exchange, we had 840,000 shares outstanding which have been recorded as recapitalization of shareholders on MetaStat’s books at par. |
On April 5, 2013, the Company issued 153,013 shares of common stock to members of its scientific advisory board and clinical advisory board vesting upon the listing of the Company’s common stock on a national exchange and achieving certain levels of trading. The Company will measure and record the fair value of the shares when vesting becomes probable, which has not yet occurred. As of November 30, 2014, the Company has not recognized any stock-based compensation expense in connection with these shares. | During the year ended February 29, 2012, the Company sold 865,000 shares of common stock for proceeds of $865,000 which was received subsequent to February 29, 2012. | |
On April 9, 2013, the Company issued 150,000 shares of common stock to a member of its Board of Directors vesting upon the earlier of the Company achieving $5,000,000 in gross sales or a change in control. The Company valued the shares for a total fair value of $375,000 on the grant date. These shares were modified on October 14, 2014, which resulted in them being deemed fully vested then. Prior to the modification, the Company had not recognized any stock compensation expense in connection with these shares as their vesting had not yet become probable. As a result, on the modification date, the Company recorded a stock-based compensation charge of $115,500 equal to the fair value of these shares on the date of the modification. | During the year ended February 28, 2013, the Company sold 880,000 shares of common stock for total proceeds of $880,000. Additionally, the Company issued 100,000 shares of restricted common stock to members of the board of directors for services for a total expense of $5,270. | |
On April 9, 2013, the Company issued 100,000 shares of common stock to an advisor for services that vested immediately. The fair value of the shares amounted to $250,000 on the grant date. The Company recognized $250,000 of stock-based compensation expense related to these shares during the nine months ended November 30, 2013. | During the year ended February 28, 2014, the Company issued 153,013 shares of common stock to members of its scientific advisory board and clinical advisory board vesting upon the listing of the Company’s common stock on a national exchange and achieving certain levels of trading. The Company will measure the fair value of the shares when vesting becomes probable. As of February 28, 2014, the Company has not recognized any expense in connection with these shares. | |
On April 18, 2013, the Company issued 12,000 shares of common stock to a consultant for services that vested immediately. The fair value of the shares amounted to $34,200 on the grant date. The Company recognized $34,200 of stock-based compensation expense related to these shares during the nine months ended November 30, 2013. | During the year ended February 28, 2014, the Company issued 150,000 shares of common stock to a member of its Board of Directors vesting upon the earlier of the Company achieving $5,000,000 in gross sales or a change in control. The Company valued the shares for a total fair value of $375,000 on the grant date. As of February 28, 2014, the Company has not recognized any expense in connection with these shares. | |
On March 2, 2014, the Company issued 50,000 shares of common stock to a consultant for services to be provided over a six-month period and that vested immediately. The fair value of the shares amounted to $67,500 on the grant date. This transaction was initially recorded a prepaid expense and amortized as stock-based compensation over the service period, resulting in $0 and $67,500 recognized during the three and nine months ended November 30, 2014, respectively. | During the year ended February 28, 2014, the Company issued 112,000 shares of common stock to an advisor and a consultant for services that vested immediately. The aggregate grant-date fair value of the shares amounted to $284,200 and was recognized as expense during the year ended February 28, 2014. $187,500 was allocated to research and development expenses and $96,700 was allocated to general and administrative expenses. | |
On June 9, 2014, the Company issued 250,000 shares of common stock to a consultant for services to be provided over a six-month period and that vested immediately. The fair value of the shares amounted to $285,025 on the grant date. $95,000 of stock-based compensation related to these shares were recognized in the three and six months ended August 31, 2014. On October 16, 2014, the Company and the consultant signed a termination agreement whereby each party agreed to terminate all rights and obligations and the consultant agreed to relinquish and cancel the 250,000 shares of common stock. The Company determined that the services were not performed and the stock-based compensation of $95,000 related to these shares was reversed out during the three and nine months ended November 30, 2014, respectively. | During the year ended February 28, 2014, the Company issued 12,000 shares of common stock to a consultant as settlement of an obligation. The fair value of the shares amounted to $15,000. | |
On July 22, 2014, the Company issued 162,500 shares of common stock to members of its Board of Directors that vested immediately. The fair value of the shares amounted to $147,875 on the grant date, which $0 and $147,875 were recorded as a stock-based compensation during the three and nine months ended November 30, 2014, respectively. | During the year ended February 28, 2014, the Company issued 92,468 shares of the Company’s common stock to the holders of an aggregate of $1,387,000 principal amount of 2013 Notes for certain amendments to the 2013 Notes (the “Note Amendments”). See Note 8 for more details on this transaction. | |
On October 14, 2014, the Company modified the vesting term of 100,000 shares of common stock previously issued to certain members of the board of directors in May 2012, which were to vest upon the listing of the Company’s common stock on a national securities exchange. As a result of the modification, these shares were deemed fully vested on the date of modification. Prior to the modification, the Company had not recognized any stock compensation expense in connection with these shares as their vesting had not yet become probable. As a result, on the modification date, the Company recorded a stock-based compensation charge of $77,000 equal to the fair value of these shares on the date of the modification. | ||
On October 14, 2014 the Company issued 310,000 shares of common stock to members of its Board of Directors that vested immediately. The fair value of the shares amounted to $238,700 on the grant date, which was recorded as a stock-based compensation during the three and nine months ended November 30, 2014. | ||
On October 14, 2014 the Company issued 194,805 shares of common stock to members of its Board of Directors that will vest on October 14, 2015. The fair value of the shares amounted to $150,000 on the grant date, of which $19,672 was recognized as stock-based compensation during the three and nine months ended November 30, 2014. | ||
On October 14, 2014 the Company issued 20,000 shares of common stock to a member of management that vest upon the Company’s common stock being listed on a national stock exchange such as the NASDAQ, New York Stock Exchange or NYSE MKT. The fair value of the shares amounted to $15,400 on the grant date. However, as of November 30, 2014, the Company has not recognized any stock compensation expense in connection with these shares and expects to recognize the compensation expense when vesting becomes probable, which has not yet occurred. | ||
Equity Financing | ||
On June 30, 2014, the Company issued 4,714,025 shares of common stock and 500,000 shares of Series A Convertible Preferred Stock, convertible at a 1-to-1 ratio into 500,000 shares of common stock to certain accredited investors that entered into a securities purchase agreement (the “Purchase Agreement”) whereby the Company received aggregate gross proceeds of $5,735,427, of which $4,092,427 represents the automatic conversion of outstanding convertible promissory notes with principal amounts totaling $3,357,000 as referenced in Note 5 below (the “Qualified Financing”). The net proceeds from this transaction amounted to $1,643,000. Included in the net proceeds is the receipt of $100,000 from an investor that was concurrently paid $100,000 for due diligence and legal fees by the Company. Approximately $1,000,000 of these proceeds are expected to be generated from the sale of marketable securities transferred to the Company by an investor (see Note 7). | ||
On July 14, 2014, the Company completed a second closing under the Purchase Agreement whereby the Company issued 188,182 shares of common stock for an aggregate purchase price of $207,000. | ||
On July 14, 2014, the Company completed a second closing under the Purchase Agreement whereby the Company issued 188,182 shares of common stock for an aggregate purchase price of $207,000. | ||
On October 24, 2014 the Company issued 374,257 shares of Series A Convertible Preferred Stock, convertible at a 1-to-1 ratio into 374,257 shares of common stock to a certain accredited investors that entered into a securities purchase agreement in exchange for the transfer to the Company of 1,069,305 freely tradable shares of common stock of Quantum Materials Corp. (QTMM”), a public reporting company which shares of common stock are eligible for quotation on the OTCQB. We recorded the issuance of the Series A Convertible Preferred Stock based on the fair value of the consideration received, which amounted to $256,633. | ||
Series A Convertible Preferred Stock | ||
Pursuant to the Certificate of Designation of Rights and Preferences of the Series A Preferred Stock, the terms of the Series A Preferred Stock are as follows: | ||
Ranking | ||
The Series A Preferred Stock will rank senior to the Common Stock with respect to distributions of assets upon the liquidation, dissolution or winding up of the Company. | ||
Dividends | ||
The Series A Preferred Stock are not entitled to any dividends. | ||
Liquidation Rights | ||
In the event of any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the holders shall be entitled to receive out of the assets of the Company, whether such assets are capital or surplus, for each Preferred Share an amount equal to the fair market value as determined in good faith by the Company’s board of directors. | ||
Voluntary Conversion; Anti-Dilution Adjustments | ||
Each Series A Preferred Stock shall be convertible into one share of Common Stock (the “Conversion Ratio”). The Conversion Ratio is subject to customary adjustments for issuances of shares of Common Stock as a dividend or distribution on shares of the Common Stock, or mergers or reorganizations. | ||
Voting Rights | ||
The Series A Preferred Stock have no voting rights. The Common Stock into which the Series A Preferred Stock is convertible shall, upon issuance, have all of the same voting rights as other issued and outstanding Common Stock, and none of the rights of the Series A Preferred Stock. | ||
Purchase Agreement with Lincoln Park Capital Fund, LLC | ||
On October 10, 2014, we entered into a purchase agreement (the “LPC Purchase Agreement”), together with a registration rights agreement (the “LPC Registration Rights Agreement”), with Lincoln Park Capital Fund, LLC (“LPC”). | ||
Under the terms and subject to the conditions of the LPC Purchase Agreement, we have the right to sell to and LPC is obligated to purchase up to $10 million in shares of our common stock subject to certain limitations, from time to time, over the 24-month period commencing on the date that a registration statement, which the Company agreed to file with the Securities and Exchange Commission (the “SEC”) pursuant to the LPC Registration Rights Agreement, is declared effective by the SEC and a final prospectus in connection therewith is filed. We may direct LPC, at its sole discretion and subject to certain conditions, to purchase up to 30,000 shares of common stock on any business day, provided that at least one business day has passed since the most recent purchase, increasing to up to 100,000 shares, depending upon the closing sale price of the common stock (such purchases, “Regular Purchases”). However, in no event shall a Regular Purchase be more than $500,000. The purchase price of shares of common stock related to the future funding will be based on the prevailing market prices of such shares at the time of sales, but in no event will shares be sold to LPC on a day the common stock closing price is less than the floor price as set forth in the LPC Purchase Agreement. In addition, we may direct LPC to purchase additional amounts as accelerated purchases if on the date of a Regular Purchase the closing sale price of the common stock is not below the threshold price as set forth in the LPC Purchase Agreement. In connection with the LPC Purchase Agreement, the Company issued 200,000 shares of common stock as described above, and may issue up to 400,000 additional shares of common stock pro rata only if and as the $10 million is funded by LPC. The fair value of the 200,000 issued shares amounted to $140,000 on the grant date, which was recorded as a stock-based compensation during the three and nine months ended November 30, 2014 as the Company did not expect to close an offering with LPC within ninety days of the issuance of these shares. | ||
The LPC Purchase Agreement and the LPC Registration Rights Agreement contain customary representations, warranties, agreements and conditions to completing future sale transactions, indemnification rights and obligations of the parties. We have the right to terminate the LPC Purchase Agreement at any time, at no cost or penalty. Actual sales of shares of common stock to LPC under the LPC Purchase Agreement will depend on a variety of factors to be determined by us from time to time, including, among others, market conditions, the trading price of the common stock and determinations by us as to the appropriate sources of funding for us and our operations. There are no trading volume requirements or restrictions under the LPC Purchase Agreement. LPC has no right to require any sales by us, but is obligated to make purchases from us as it directs in accordance with the LPC Purchase Agreement. LPC has covenanted not to cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of our shares. | ||
The net proceeds under the LPC Purchase Agreement to us will depend on the frequency and prices at which we sell shares of our common stock to LPC. We expect that any proceeds received by us from such sales to LPC under the LPC Purchase Agreement will be used for general corporate purposes and working capital requirements. | ||
As of November 30, 2014, we have not filed the registration statement in connection with the LPC Registration Rights Agreement, and have not directed any sales of common stock pursuant to the LPC Purchase Agreement. | ||
STOCK_OPTIONS
STOCK OPTIONS | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||
Nov. 30, 2014 | Feb. 28, 2014 | |||||||||||||||||||||||||||||||||
Stock Options | ||||||||||||||||||||||||||||||||||
STOCK OPTIONS | For the nine months ended November 30, 2013, the Company issued options to purchase 300,000 shares of common stock at $3.25 per share to members of its management team and its Board of Directors. The options vested in four equal installments on each of May 31, 2013, August 31, 2013, November 30, 2013 and February 28, 2014 and expire on April 5, 2023. These options had a total fair value of $632,794 as calculated using the Black-Scholes model. Assumptions used in the Black-Scholes model included: (1) a discount rate of 0.68%; (2) an expected term of 5.25 years; (3) an expected volatility of 129%; and (4) zero expected dividends. During the three and nine months ended November 30, 2013, the Company recognized $158,199 and $474,596 of compensation expense related to these options. During the three and nine months ended November 30, 2014, the Company did not recognize any compensation expense related to these options. | Under our 2012 Plan, which is administrated by the compensation committee of the Board of Directors, we have reserved 3,116,789 shares of common stock available for issuance and we may grant to employees, non-employee directors and consultants, equity incentives in the form of, among other, stock options, restricted stock, and stock appreciation rights. As of February 28, 2014, we had a total of 33,776 shares of common stock that remained available for issuance under the 2012 Plan. | ||||||||||||||||||||||||||||||||
For the nine months ended November 30, 2013, the Company issued options to purchase 523,500 shares of common stock at $3.25 per share to members of its scientific advisory board and clinical advisory board and a consultant. The options vested in four equal installments on each of May 31, 2013, August 31, 2013, November 30, 2013 and February 28, 2014 and expire on April 5, 2023. Compensation expense related to these non-employee options was measured and recognized at each vesting date. The aggregated fair value of the vested options on the third measurement date amounted to $891,512 as calculated using the Black-Scholes model. Assumptions used in the Black-Scholes model included: (1) a discount rate of 2.56%; (2) an expected term of 9.60 years; (3) an expected volatility of 125%; and (4) zero expected dividends. The Company recognized $180,599 and $710,912 in stock option expense for the three and nine months ended November 30, 2013, respectively. During the three and nine months ended November 30, 2014, the Company did not recognize any compensation expense related to these options. | During January 2012, the Company issued options to purchase 1,116,500 shares of common stock at $0.68 per share to its President, members of its scientific advisory board and clinical advisory board, and several consultants involved in the Company’s ongoing research related to cancer. All of the options except 220,000 vest immediately and expire on January 6, 2022. These options that vested immediately have a fair value of $611,250, as calculated using the Black-Scholes model. Assumption used in the Black-Scholes model included: (1) a discount rate of 1.98%; (2) an expected term of 10 years; (3) an expected volatility of 403%; and (4) zero expected dividends. The unvested options were granted to a consultant and vest upon the successful conclusion of the Company’s 500-patient MetaSite Breast trial, as determined by the compensation committee of the Board of Directors in its reasonable discretion. These unvested options will be measured and recognized when vesting is probable. | |||||||||||||||||||||||||||||||||
For the nine months ended November 30, 2014, 220,000 non-employee performance-based stock options vested with a value of $232,000. These options vested based on the completion of a trial and subsequent publication of results on June 3, 2014. The Company recognized $0 and $232,000 in stock option expense for the three and nine months ended November 30, 2014. | During the year ended February 28, 2014, the Company issued options to purchase 300,000 shares of common stock at $3.25 per share to members of its management team and its Board of Directors. The options vest in four equal installments on each of May 31, 2013, August 31, 2013, November 30, 2013 and February 28, 2014 and expire on April 5, 2023. These options have a total fair value of $632,794 as calculated using the Black-Scholes model. Assumptions used in the Black-Scholes model included: (1) a discount rate of 0.68%; (2) an expected term of 5.25 years; (3) an expected volatility of 128.9%; and (4) zero expected dividends. For the year ended February 28, 2014, the Company recognized $632,794 in expense for these options. | |||||||||||||||||||||||||||||||||
For the nine months ended November 30, 2014, an aggregate of 90,000 employee performance-based stock options vested with a value of $127,000. These options vested once certain milestones were completed by the employees, which included the completion of the research plan, lab setup, essential hires and investor presentation for the therapeutics program. The Company recognized $0 and $127,000 in stock option expense for the three and nine months ended November 30, 2014. | During the year ended February 28, 2014, the Company issued options to purchase 523,500 shares of common stock at $3.25 per share to members of its scientific advisory board and clinical advisory board and a consultant. The options vest in four equal installments on each of May 31, 2013, August 31, 2013, November 30, 2013 and February 28, 2014 and expire on April 5, 2023. Compensation expense related to these options was measured at each vesting date. The aggregated fair value of these options on the measurement dates amounted to $872,528 as calculated using the Black-Scholes model. Assumptions used in the Black-Scholes model included: (1) a discount rate of 2.59%; (2) an expected term of 9.48 years; (3) an expected volatility of 123.6%; and (4) zero expected dividends. For the year ended February 28, 2014, the Company recognized $872,528 in expense for these options. | |||||||||||||||||||||||||||||||||
For the nine months ended November 30, 2014, 100,000 stock options issued to certain members of our Board of Directors with an exercise price equal to $3.25 were cancelled in an effort to reduce the fully-diluted share count and increase the number of available stock options. The Company determined that the transaction was not considered to be a modification of these stock-based awards. All stock-based compensation related to these options were recognized in the fiscal year ended February 28, 2014 and have not been reversed. | During the year ended February 28, 2014, the Company issued options to purchase 190,000 shares of common stock at $1.50 per share to employees. The options vest based on certain performance-based milestones and expire on December 16, 2023. These options have a total fair value of $270,274 as calculated using the Black-Scholes model. Assumptions used in the Black-Scholes model included: (1) a discount rate of 1.12%; (2) an expected term of 10 years; (3) an expected volatility of 121.5%; and (4) zero expected dividends. As of February 28, 2014, the Company did not recognize any expense for these options. | |||||||||||||||||||||||||||||||||
For the three and nine months ended November 30, 2014, the Company issued options to purchase 600,000 shares of common stock at $1.10 per share to members of its management team. The options vest upon certain milestones being achieved as follows: (i) 200,000 stock options shall fully vest two years following the date of issuance; (ii) of the remaining 400,000 stock options, one-third shall vest once the Company’s CLIA laboratory is operational, one-third shall vest upon the Company’s first commercial sale, and one-third shall vest upon the Company achieving $25 million in sales for the prior twelve month period. These options had a total fair value of $368,002 as calculated using the Black-Scholes model. Assumptions used in the Black-Scholes model included: (1) a discount rate of 1.66%; (2) an expected term of 5.33 years; (3) an expected volatility of 116%; and (4) zero expected dividends. The Company has recognized $8,393 in stock compensation expense in connection with the tranche with time-vesting condition of these options during the three and nine months ended November 30, 2014. The Company has not recognized any stock based compensation for the tranches with performance-vesting conditions, and expects to recognize the compensation expense when vesting become probable, which has not yet occurred. | During the year ended February 28, 2014, the Company issued options to purchase 550,000 shares of common stock at $1.50 per share to a consultant. 100,000 options vest immediately and 450,000 options vest upon the Company achieving certain performance-based milestones, and expire on December 16, 2023. The options that vested immediately have a total fair value of $142,250 as calculated using the Black-Scholes model. Assumptions used in the Black-Scholes model included: (1) a discount rate of 1.12%; (2) an expected term of 10 years; (3) an expected volatility of 121.5%; and (4) zero expected dividends. For the options with vesting contingent on achieving certain performance-based milestones, the Company will measure the fair value of these options and recognize the compensation expense when vesting becomes probable. For the options that vested immediately, the Company recognized $142,250 in expense during the year ended February 28, 2014. | |||||||||||||||||||||||||||||||||
The following table summarizes common stock options issued and outstanding: | During the year ended February 28, 2014, stock option expense of $1,540,884 and $106,688 was recorded in general and administrative expenses and in research and development expenses, respectively. | |||||||||||||||||||||||||||||||||
Options | Weighted | Aggregate | Weighted | The following table summarizes common stock options issued and outstanding: | ||||||||||||||||||||||||||||||
average | intrinsic | average | ||||||||||||||||||||||||||||||||
exercise | value | remaining | Options | Weighted average exercise price | Aggregate intrinsic value | Weighted average remaining contractual life (years) | ||||||||||||||||||||||||||||
price | contractual | Outstanding at February 28, 2013 | 1,116,500 | $ | 0.68 | - | - | |||||||||||||||||||||||||||
life (years) | Granted | 1,563,500 | $ | 2.42 | - | - | ||||||||||||||||||||||||||||
Outstanding and expected to vest at February 28, 2014 | 2,680,000 | $ | 1.7 | $ | 599,025 | 8.78 | ||||||||||||||||||||||||||||
Outstanding at February 28, 2014 | 2,680,000 | $ | 1.7 | $ | - | - | Exercisable at February 28, 2014 | 1,820,000 | $ | 1.89 | $ | 599,025 | 8.53 | |||||||||||||||||||||
Forfeited | 425,000 | $ | 1.59 | $ | - | - | ||||||||||||||||||||||||||||
Issued | 600,000 | $ | 1.1 | $ | - | - | As of February 28, 2014, 896,500 options are exercisable at $0.68 per share with a weighted average life of 7.86 years, 823,500 options are exercisable at $3.25 with a weighted average life of 9.10 years, and 100,000 options are exercisable at $1.50 with a weighted average life of 9.80 years. Additionally, 220,000 options with an exercise price of $0.68 and a weighted average life of 7.86 years have yet to vest and 640,000 options with an exercise price of $1.50 and a weighted average life of 9.80 years have yet to vest. | |||||||||||||||||||||||||||
Outstanding and expected to vest at November 30, 2014 | 2,855,000 | $ | 1.59 | $ | - | 8.49 | ||||||||||||||||||||||||||||
Exercisable at November 30, 2014 | 1,705,000 | $ | 1.79 | $ | 7.81 | As of February 28, 2014, we had $270,274 of unrecognized compensation related to stock options whose recognition is dependent on certain milestones to be achieved. Additionally, there were 670,000 stock options with a performance vesting condition that were granted to consultants which will be measured and recognized when vesting becomes probable. | ||||||||||||||||||||||||||||
As of November 30, 2014, 841,500 options are exercisable at $0.68 per share with a weighted average life of 7.11 years, 673,500 options are exercisable at $3.25 with a weighted average life of 8.35 years, and 190,000 options are exercisable at $1.50 with a weighted average life of 9.05 years. Additionally, 950,000 options with an exercise price of $1.36 and a weighted average life of 9.40 years have yet to vest. | ||||||||||||||||||||||||||||||||||
As of November 30, 2014, we had $119,607 of unrecognized stock-based compensation expected to be recognized over an average weighted period of 1.9 years and $240,000 of unrecognized stock-based compensation related to employee stock options whose recognition is dependent on certain milestones to be achieved. Additionally, there were 550,000 stock options with a performance vesting condition that were granted to consultants which will be measured and recognized when vesting becomes probable. |
WARRANTS
WARRANTS | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||
Nov. 30, 2014 | Feb. 28, 2014 | |||||||||||||||||||||||||||||||||
Warrants | ||||||||||||||||||||||||||||||||||
WARRANTS | For the nine months ended November 30, 2013, the Company issued 70,000 warrants in connection with the issuance of Convertible Notes referenced in Note 5 below. These warrants were issued between March 1, 2013 and May 14, 2013, are exercisable at $3.00 per share and expire between March 1, 2017 and May 14, 2017. These warrants vested immediately. The warrants do not contain any provision that would require liability treatment, therefore they were classified as equity in the Condensed Consolidated Balance Sheet. | On November 14, 2011, MBM entered into consulting agreement with an advisor and issued warrants to purchase 220,000 shares of common stock at $0.68 per share that vested immediately. The fair value of these warrants was determined to be $149,999, as calculated using the Black-Scholes model. Assumption used in the Black-Scholes model included: (1) a discount rate of 0.91%; (2) an expected term of 5 years; (3) an expected volatility of 403%; and (4) zero expected dividends. | ||||||||||||||||||||||||||||||||
For the nine months ended November 30, 2013, in connection with the issuance of the Convertible Notes referenced in Note 5 below, the Company issued placement agent warrants to purchase an aggregate of 8,480 shares of common stock. These placement agent warrants are exercisable at $2.50 per share, have a term of 5 years and a cashless exercise feature and vested immediately. The fair value of these warrants was determined to be $25,498, as calculated using the Black-Scholes model. Average assumptions used in the Black-Scholes model included: (1) a discount rate of 0.74%; (2) an expected term of 5 years; (3) an expected volatility of 134%; and (4) zero expected dividends. | On January 31, 2012, MBM granted 1,497,124 warrants together with shares of common stock issued on January 31, 2012 exercisable at $0.91 per share and expiring on January 31, 2017. On February 27, 2012, the Company also granted 216,250 warrants together with shares of common stock exercisable at $1.40 per share and expiring on February 27, 2016. | |||||||||||||||||||||||||||||||||
For the nine months ended November 30, 2014, the Company issued 25,000 warrants in connection with the issuance of Convertible Notes referenced in Note 5 below. These warrants were issued on March 4, 2014, are exercisable at $2.10 per share and expire on March 4, 2019. These warrants vested immediately. The warrants do not contain any provision that would require liability treatment, therefore they were classified as equity in the Condensed Consolidated Balance Sheet. | Immediately prior to the Share Exchange, PVSO issued 350,000 warrants exercisable at $1.40 per share. | |||||||||||||||||||||||||||||||||
For the nine months ended November 30, 2014, the Company issued 155,000 warrants in connection with the issuance of Convertible Notes referenced in Note 5 below. These warrants were issued between May 22, 2014 and June 26, 2014, are exercisable at $1.50 per share and expire between May 22, 2019 and June 26, 2019. These warrants vested immediately. The warrants do not contain any provision that would require liability treatment, therefore they were classified as equity in the Condensed Consolidated Balance Sheet. | On October 4, 2012, we issued 150,000 warrants to a consultant exercisable at $1.50 per share. The fair value of these warrants was determined to be $149,995, as calculated using the Black-Scholes model. Assumptions used in the Black-Scholes model included: (1) a discount rate of 0.63%; (2) an expected term of 4 years; (3) an expected volatility of 420%; and (4) zero expected dividends. | |||||||||||||||||||||||||||||||||
For the nine months ended November 30, 2014, the Company issued 3,066,000 warrants in connection with the closing of the Qualified Financing as described in Note 2. These warrants were issued on June 30, 2014, are exercisable at $1.50 per share and expire on June 30, 2018. These warrants vested immediately. The warrants do not contain any provision that would require liability treatment, therefore they were classified as equity in the Condensed Consolidated Balance Sheet. | During the year ended February 28, 2013, we issued 220,000 warrants together with shares of common stock issued on May 1, 2012 exercisable at $1.40 per share and expiring on May 1, 2016. | |||||||||||||||||||||||||||||||||
The following table summarizes common stock purchase warrants issued and outstanding: | During the year ended February 28, 2013, we issued 78,700 detachable warrants with convertible notes. See Note 8 for more details on these transactions. | |||||||||||||||||||||||||||||||||
Warrants | Weighted | Aggregate | Weighted | During the year ended February 28, 2014, the Company entered into a consulting agreement whereby the Company issued to the consultant 17,500 common stock purchase warrants with a term of four years and an exercise price equal to $2.50 per share. The fair value of these warrants was determined to be $17,495, as calculated using the Black-Scholes model. Average assumptions used in the Black-Scholes model included: (1) a discount rate of 1.09%; (2) an expected term of 4 years; (3) an expected volatility of 121%; and (4) zero expected dividends. | ||||||||||||||||||||||||||||||
average | intrinsic | average | ||||||||||||||||||||||||||||||||
exercise | value | remaining | During the year ended February 28, 2014, we issued 295,833 detachable warrants with convertible notes. We also issued 93,468 warrants in connection with an amendment of certain convertible notes during the year ended February 28, 2014. See Note 8 for more details on these transactions. | |||||||||||||||||||||||||||||||
price | contractual | |||||||||||||||||||||||||||||||||
life (years) | In connection with the issuance of convertible notes, the Company issued placement agent warrants to purchase an aggregate of 8,480 shares of common stock. These placement agent warrants are exercisable at $2.50 per share, have a term of 5 years and a cashless exercise feature and vest immediately. The fair value of these warrants was determined to be $25,498, as calculated using the Black-Scholes model. Average assumptions used in the Black-Scholes model included: (1) a discount rate of 0.74%; (2) an expected term of 5 years; (3) an expected volatility of 134%; and (4) zero expected dividends. | |||||||||||||||||||||||||||||||||
Outstanding at February 28, 2014 | 3,146,355 | $ | 1.24 | $ | - | - | The following table summarizes common stock purchase warrants issued and outstanding as of February 2014 and 2013: | |||||||||||||||||||||||||||
Issued | 3,246,000 | $ | 1.5 | $ | - | 3.63 | ||||||||||||||||||||||||||||
Outstanding at November 30, 2014 | 6,392,355 | $ | 1.37 | $ | - | 2.93 | ||||||||||||||||||||||||||||
Warrants | Weighted average exercise price | Aggregate intrinsic value | Weighted average remaining contractual life (years) | |||||||||||||||||||||||||||||||
Warrants exercisable at November 30, 2014 are: | Outstanding at February 28, 2013 | 2,732,074 | $ | 1.13 | $ | - | - | |||||||||||||||||||||||||||
Issued | 414,281 | $ | 2.28 | - | - | |||||||||||||||||||||||||||||
Exercise prices | Number of shares | Weighted average remaining life (years) | Exercisable number of shares | Outstanding at February 28, 2014 | 3,146,355 | $ | 1.24 | $ | 807,096 | 2.97 | ||||||||||||||||||||||||
$ | 0.68 | 220,000 | 1.96 | 220,000 | ||||||||||||||||||||||||||||||
$ | 0.91 | 1,497,124 | 2.17 | 1,497,124 | The following table summarizes common stock purchase warrants exercisable at February 28, 2014: | |||||||||||||||||||||||||||||
$ | 1.4 | 786,250 | 1.74 | 786,250 | ||||||||||||||||||||||||||||||
$ | 1.5 | 3,371,000 | 3.52 | 3,371,000 | Exercise prices | Number of shares | Weighted average remaining life (years) | Exercisable number of shares | ||||||||||||||||||||||||||
$ | 2.1 | 472,001 | 3.19 | 472,001 | $ | 0.68 | 220,000 | 2.71 | 220,000 | |||||||||||||||||||||||||
$ | 2.5 | 25,980 | 3.12 | 25,980 | $ | 0.91 | 1,497,124 | 2.93 | 1,497,124 | |||||||||||||||||||||||||
$ | 3 | 20,000 | 2.17 | 20,000 | $ | 1.4 | 786,250 | 2.49 | 786,250 | |||||||||||||||||||||||||
$ | 1.5 | 150,000 | 2.6 | 150,000 | ||||||||||||||||||||||||||||||
$ | 2.1 | 447,001 | 4.13 | 447,001 | ||||||||||||||||||||||||||||||
$ | 2.5 | 25,980 | 3.87 | 25,980 | ||||||||||||||||||||||||||||||
$ | 3 | 20,000 | 2.92 | 20,000 | ||||||||||||||||||||||||||||||
CONVERTIBLE_NOTES
CONVERTIBLE NOTES | 9 Months Ended | 12 Months Ended | ||||||||
Nov. 30, 2014 | Feb. 28, 2014 | |||||||||
Debt Disclosure [Abstract] | ||||||||||
CONVERTIBLE NOTES | 2013 Notes | 2013 Notes | ||||||||
From January to May 2013, the Company issued convertible promissory notes in the aggregate principal amount of $1,487,000, originally due December 31, 2013 (the “2013 Notes”). | During the years ended February 28, 2014 and 2013, we issued convertible promissory notes in the aggregate principal amount of $700,000 and $787,000, respectively, originally due December 31, 2013 (the “2013 Notes”). | |||||||||
The 2013 Notes bore interest at the rate of 8% per annum, matured on December 31, 2013 and ranked senior to the Company’s currently issued and outstanding indebtedness and equity securities. Upon the closing by the Company of an equity or equity based financing or a series of equity or equity based financings (a “Qualified Financing”) resulting in gross proceeds to us of at least $3,500,000 in the aggregate, inclusive of the 2013 Notes, the outstanding principal amount of the 2013 Notes together with all accrued and unpaid interest thereunder (the “Outstanding Balance”) would have automatically converted into such securities, including warrants, as are issued in the Qualified Financing, the amount of which shall be determined in accordance with the following formula: (the Outstanding Balance as of the closing of the Qualified Financing) x (1.15) / (the per security price of the securities sold in the Qualified Financing). Commencing six months following the issuance date of the 2013 Notes, the noteholders have the right, at their option, to convert the Outstanding Balance into shares of common stock at a conversion price of $2.50 per share. | The 2013 Notes bear interest at the rate of 8% per annum, mature on December 31, 2013 and rank senior to the Company’s currently issued and outstanding indebtedness and equity securities. Upon the closing by us of an equity or equity based financing or a series of equity or equity based financings (a “Qualified Financing”) resulting in gross proceeds to us of at least $3,500,000 in the aggregate, inclusive of the 2013 Notes, the outstanding principal amount of the 2013 Notes together with all accrued and unpaid interest thereunder (the “Outstanding Balance”) shall automatically convert into such securities, including warrants, as are issued in the Qualified Financing, the amount of which shall be determined in accordance with the following formula: (the Outstanding Balance as of the closing of the Qualified Financing) x (1.15) / (the per security price of the securities sold in the Qualified Financing). Commencing six months following the issuance date of the 2013 Notes, the noteholders have the right, at their option, to convert the Outstanding Balance into shares of common stock at a conversion price of $2.50 per share. | |||||||||
Along with the 2013 Notes, we also issued to the noteholders an aggregate of 148,700 detachable warrants. The warrants had an original exercise price of $3.00 per share and can be exercised within a four-year period. | Along with the 2013 Notes, we also issued to the noteholders 70,000 and 78,700 detachable warrants during the years ended February 28, 2014 and 2013, respectively. The warrants had an original exercise price of $3.00 per share and can be exercised within a four year period. | |||||||||
On December 31, 2013, the Company entered into certain amendments to its outstanding 2013 Notes with the holders of an aggregate of $1,387,000 principal amount of 2013 Notes (the “Amendments”), whereby the holders of the 2013 Notes extended the maturity date of the 2013 Notes to June 30, 2014 from December 31, 2013. In consideration for entering into the Amendments, the Company (i) reduced the conversion price of the 2013 Notes to $1.50 per share from $2.50 per share, (ii) reduced the exercise price for an aggregate of 128,700 warrants issued in connection with the issuance of the 2013 Notes to $2.10 per share from $3.00 per share, (iii) issued an aggregate of 92,468 common stock purchase warrants with an exercise price of $2.10 per share and a term of four years, and (iv) issued an aggregate of 92,468 shares of the Company’s common stock. During the three months ended May 31, 2014, the Company repaid the principal amount of $100,000 plus accrued interest of $8,828 of 2013 Notes to a holder thereof. | On December 31, 2013, the Company entered into certain amendments to its outstanding 2013 Notes with the holders of an aggregate of $1,387,000 principal amount of 2013 Notes (the “Amendments”), whereby the holders of the 2013 Notes extended the maturity date of the 2013 Notes to June 30, 2014 from December 31, 2013. In consideration for entering into the Amendments, the Company (i) reduced the conversion price of the 2013 Notes to $1.50 per share from $2.50 per share, (ii) reduced the exercise price for an aggregate of 128,700 warrants issued in connection with the issuance of the 2013 Notes to $2.10 per share from $3.00 per share, (iii) issued an aggregate of 92,468 common stock purchase warrants with an exercise price of $2.10 per share and a term of four years, and (iv) issued an aggregate of 92,468 shares of the Company’s common stock. | |||||||||
The Company determined the Amendments constituted a substantive modification of the notes and, as a result, we accounted for this transaction as extinguishment of debt instrument and the issuance of a new debt instrument (“Amended 2013 Notes”), which resulted in a loss on extinguishment of $32,853 being recognized. The loss on extinguishment was computed as follows: | We determined the Amendments constituted a substantive modification of the notes and, as a result, we accounted for this transaction as extinguishment of debt instrument and the issuance of a new debt instrument (“Amended 2013 Notes”), which resulted in a loss on extinguishment of $32,853 being recognized. The loss on extinguishment was computed as follows: | |||||||||
Fair value of Amended 2013 Notes (1) | $ | 1,243,482 | ||||||||
Fair value of non-cash consideration issued to the creditor (2) | 269,707 | Fair value of Amended 2013 Notes (1) | $ | 1,243,482 | ||||||
Reacquisition price | 1,513,189 | Fair value of non-cash consideration issued to the creditor (2) | 269,707 | |||||||
Carrying value of the debt at modification | 1,480,336 | Reacquisition price | 1,513,189 | |||||||
Loss on extinguishment | $ | 32,853 | Carrying value of the debt at modification | 1,480,336 | ||||||
Loss on extinguishment | $ | 32,853 | ||||||||
(1) | Fair value was determined using level 2 inputs, specifically prices for a subsequent issuance of comparable debt instruments. | |||||||||
(2) | Consist of $143,325 fair value of common stock issued and $126,382 fair value of warrants issued and warrants modified. The warrants were valued using a Black-Scholes model with the following inputs: (1) a discount rate of 1.27%; (2) an expected term of 4.00 years; (3) an expected volatility of 121%; and (4) zero expected dividends. | (1) Fair value was determined using level 2 inputs, specifically prices for a subsequent issuance of comparable debt instruments. | ||||||||
(2) Consist of $143,325 fair value of common stock issued and $126,382 fair value of warrants issued and warrants modified. The warrants were valued using a Black-Scholes model with the following inputs: (1) a discount rate of 1.27%; (2) an expected term of 4.00 years; (3) an expected volatility of 121%; and (4) zero expected dividends. | ||||||||||
During the nine months ended November 30, 2014, the Company recorded $159,647 of accretion expense related to the Amended 2013 Notes. | ||||||||||
During the year ended February 28, 2014, we recorded $77,207 of accretion expense related to the Amended 2013 Notes. | ||||||||||
2014 Notes | ||||||||||
In March 2014, the Company repaid the principal amount of $100,000 plus accrued interest of 2013 Notes to a holder thereof. | ||||||||||
In November 2013, the Company issued convertible promissory notes in the aggregate principal amount of $500,000 with 83,333 detachable warrants that can be exercised at $2.10 per share within a four-year period (the “2014 Notes”). | ||||||||||
2014 Notes | ||||||||||
The 2014 Notes bear interest at the rate of 8% per annum, mature on May 31, 2014 and rank pari passu to the 2013 Notes and senior to the Company’s currently issued and outstanding and equity securities. Upon the closing by the Company of an equity or equity based financing or a series of equity or equity based financings (a “Qualified Financing”) resulting in gross proceeds to the Company of at least $3,500,000 in the aggregate inclusive of the 2013 Notes and the 2014 Notes, the outstanding principal amount of the 2014 Notes together with all accrued and unpaid interest thereunder (the “Outstanding Balance”) shall automatically convert into such securities, including warrants, as are issued in the Qualified Financing, the amount of which shall be determined in accordance with the following formula: (the Outstanding Balance as of the closing of the Qualified Financing) x (1.15) / (the per security price of the securities sold in the Qualified Financing). Commencing six months following the issuance date of the 2014 Notes, the noteholders have the right, at their option, to convert the Outstanding Balance into shares of common stock at a conversion price of $1.50 per share. | ||||||||||
In November 2013, the Company issued convertible promissory notes in the aggregate principal amount of $500,000 with 83,333 detachable warrants that can be exercised at $2.10 per share within a four year period (the “2014 Notes”). | ||||||||||
Additional 2014 Notes | ||||||||||
The 2014 Notes bear interest at the rate of 8% per annum, mature on May 31, 2014 and rank pari passu to the 2013 Notes and senior to the Company’s currently issued and outstanding and equity securities. Upon the closing by MetaStat of an equity or equity based financing or a series of equity or equity based financings (a “Qualified Financing”) resulting in gross proceeds to the Company of at least $3,500,000 in the aggregate inclusive of the 2013 Notes and the 2014 Notes, the outstanding principal amount of the 2014 Notes together with all accrued and unpaid interest thereunder (the “Outstanding Balance”) shall automatically convert into such securities, including warrants, as are issued in the Qualified Financing, the amount of which shall be determined in accordance with the following formula: (the Outstanding Balance as of the closing of the Qualified Financing) x (1.15) / (the per security price of the securities sold in the Qualified Financing). Commencing six months following the issuance date of the 2014 Notes, the noteholders have the right, at their option, to convert the Outstanding Balance into shares of common stock at a conversion price of $1.50 per share. | ||||||||||
In January and February 2014, the Company issued convertible promissory notes in the aggregate principal amount of $855,000 with 142,500 detachable warrants that can be exercised at $2.10 per share within a five-year period (the “Additional 2014 Notes”). | ||||||||||
Additional 2014 Notes | ||||||||||
During the nine months ended November 30, 2014, the Company issued Additional 2014 Notes in the aggregate principal amount of $150,000 with 25,000 detachable warrants that can be exercised at $2.10 per share within a four-year period. | ||||||||||
In January and February 2014, the Company issued convertible promissory notes in the aggregate principal amount of $855,000 with 142,500 detachable warrants that can be exercised at $2.10 per share within a five-year period (the “Additional 2014 Notes”). | ||||||||||
The Additional 2014 Notes bear interest at the rate of 8% per annum, mature on June 30, 2014 and rank pari passu to the Company’s issued and outstanding convertible promissory notes and senior to the Company’s issued and outstanding equity securities. Upon the closing by the Company of an equity or equity based financing or a series of equity or equity based financings (a “Qualified Financing”) resulting in gross proceeds to the Company of at least $5,000,000 in the aggregate, and the Company, prior to or concurrent with the completion of the Qualified Financing (the “Qualified Financing Threshold Amount”), the outstanding principal amount of the Additional 2014 Notes, together with all accrued and unpaid interest thereunder (the “Outstanding Balance”), shall automatically convert into such securities, including warrants of the Company, as are issued in the Qualified Financing, the amount of which shall be determined in accordance with the following formula: (the Outstanding Balance as of the closing of the Qualified Financing) x (1.15) / (the per security price of the securities sold in the Qualified Financing). For purposes of determining whether the Qualified Financing Threshold Amount has been satisfied, such amount shall include (i) the Outstanding Balance of the Additional 2014 Notes (each pursuant to the formula stated above) then outstanding, and (ii) the outstanding principal amount of the 2013 Notes and 2014 Notes together with all accrued and unpaid interest thereunder (pursuant to the same formula as stated above and therein). Following the issuance date of the Additional 2014 Notes, the lenders have the right, at their option, to convert the Outstanding Balance into shares of common stock at a conversion price of $1.50 per share. | ||||||||||
The Additional 2014 Notes bear interest at the rate of 8% per annum, mature on June 30, 2014 and rank pari passu to the Company’s issued and outstanding convertible promissory notes and senior to the Company’s issued and outstanding equity securities. Upon the closing by the Company of an equity or equity based financing or a series of equity or equity based financings (a “Qualified Financing”) resulting in gross proceeds to the Company of at least $5,000,000 in the aggregate, and the Company, prior to or concurrent with the completion of the Qualified Financing (the “Qualified Financing Threshold Amount”), the outstanding principal amount of the Additional 2014 Notes, together with all accrued and unpaid interest thereunder (the “Outstanding Balance”), shall automatically convert into such securities, including warrants of the Company, as are issued in the Qualified Financing, the amount of which shall be determined in accordance with the following formula: (the Outstanding Balance as of the closing of the Qualified Financing) x (1.15) / (the per security price of the securities sold in the Qualified Financing). For purposes of determining whether the Qualified Financing Threshold Amount has been satisfied, such amount shall include (i) the Outstanding Balance of the Additional 2014 Notes (each pursuant to the formula stated above) then outstanding, and (ii) the outstanding principal amount of the 2013 Notes and 2014 Notes together with all accrued and unpaid interest thereunder (pursuant to the same formula as stated above and therein). Following the issuance date of the Additional 2014 Notes, the lenders have the right, at their option, to convert the Outstanding Balance into shares of common stock at a conversion price of $1.50 per share. | ||||||||||
May 2014 Notes | ||||||||||
Debt Discount and beneficial conversion feature | ||||||||||
During the nine months ended November 30, 2014, the Company issued convertible promissory notes in the aggregate principal amount of $465,000 with 155,000 detachable warrants that can be exercised at $1.50 per share within a five-year period (the “May 2014 Notes”). | ||||||||||
The detachable warrants issued in connection with the 2013 Notes, the 2014 Notes and the Additional 2014 Notes (collectively the “Convertible Notes”) were recorded as a debt discount based on their relative fair value. | ||||||||||
The May 2014 Notes bear interest at the rate of 8% per annum, mature on August 15, 2014 and rank pari passu to the Company’s currently issued and outstanding 2013 Notes, 2014 Notes, and Additional 2014 Notes and senior to the Company’s issued and outstanding equity securities. Upon the closing by the Company of an equity or equity based financing or a series of equity or equity based financings (a “Qualified Financing”) resulting in gross proceeds to the Company of at least $5,000,000 in the aggregate and the Company, prior to or concurrent with the completion of the Qualified Financing (the “Qualified Financing Threshold Amount”), the outstanding principal amount of the May 2014 Notes together with all accrued and unpaid interest (the “Outstanding Balance”) shall automatically convert into such securities, including Warrants of the Company as are issued in the Qualified Financing, the amount of which shall be determined in accordance with the following formula: (the Outstanding Balance as of the closing of the Qualified Financing) x (1.15) / (the per security price of the securities sold in the Qualified Financing). For purposes of determining whether the Qualified Financing Threshold Amount has been satisfied, such amount shall include (i) the Outstanding Balance of the May 2014 Notes, (ii) the outstanding principal amount of the 2013 Notes, (iii) the outstanding principal amount of the 2014 Notes, and (iv) the outstanding principal amount of the Additional 2014 Notes, together with all accrued and unpaid interest thereunder. | ||||||||||
The detachable warrants issued during the year ended February 28, 2013 had a weighted-average fair value of $1.00, as calculated using the Black-Scholes model. Assumptions used in the Black-Scholes model included: (1) a discount rate of 0.63%; (2) an expected term of 4 years; (3) an expected volatility of 420%; and (4) zero expected dividends. | ||||||||||
Debt Discount and beneficial conversion feature | ||||||||||
The detachable warrants issued during the year ended February 28, 2014 had a weighted-average fair value of $1.48, as calculated using the Black-Scholes model. Assumptions used in the Black-Scholes model included: (1) a discount rate of 0.88%; (2) an expected term of 4 years; (3) an expected volatility of 129%; and (4) zero expected dividends. | ||||||||||
The detachable warrants issued in connection with the 2013 Notes, the 2014 Notes, the Additional 2014 Notes, and the May 2014 Notes (collectively the “Convertible Notes”) were recorded as a debt discount based on their relative fair value. | ||||||||||
During the year ended February 28, 2013, the relative fair value of the detachable warrants of $71,543 was recorded as a discount to convertible debt. | ||||||||||
The detachable warrants issued during the nine months ended November 30, 2013 had a weighted-average fair value of $199,234 as calculated using the Black-Scholes model. Assumptions used in the Black-Scholes model included: (1) a discount rate of 0.58 %; (2) an expected term of 4 years; (3) an expected volatility of 140.6%; and (4) zero expected dividends. | ||||||||||
During the year ended February 28, 2014, the relative fair value of the detachable warrants of $357,145 was recorded as a discount to convertible debt. An additional debt discount of $532,210 was recorded to recognize the intrinsic value of the beneficial conversion feature. Any contingent beneficial conversion feature related to the automatic conversion of the Convertibles Notes would be recognized when and if a Qualified Financing occurs based on its intrinsic value at the commitment date. | ||||||||||
The detachable warrants issued during the nine months ended November 30, 2014 had a weighted-average fair value of $127,289, as calculated using the Black-Scholes model. Assumptions used in the Black-Scholes model included: (1) a discount rate of 1.64 %; (2) an expected term of 5 years; (3) an expected volatility of 116.8%; and (4) zero expected dividends. | ||||||||||
During the year ended February 28, 2014 and 2013, $752,762 and $1,500, respectively, was recognized as accretion expense related to the debt discount. | ||||||||||
The relative fair value of the warrants and the intrinsic value of the beneficial conversion feature for the convertible notes issued during the nine months ended November 30, 2014 and 2013 totaled $173,035 and $629,332 respectively, and was recorded as a discount to the convertible debt. | ||||||||||
During the nine months ended November 30, 2014 and 2013, $379,672 and $559,496, respectively, was recognized as accretion expense related to the debt discount. | ||||||||||
Automatic Exchange of the Convertible Notes | ||||||||||
On June 30, 2014, the Company completed the Qualified Financing whereby all outstanding Convertible Notes with aggregate principal amounts totaling $3,357,000 were automatically exchanged into the securities offered in the Qualified Financing. The exchange also included approximately $201,000 of accrued interest. As of November 30, 2014, the Company has no Convertible Notes outstanding | ||||||||||
On June 30, 2014, as a result of the exchange of the Convertible Notes in the Qualified Financing, the Company recorded an expense amounting to $2,324,760 related to the recognition of a contingent beneficial conversion feature. The expense was measured at the intrinsic value of the beneficial conversion feature for each of the Convertible Notes at their respective measurement date. |
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended | ||
Feb. 28, 2014 | |||
Fair Value Disclosures [Abstract] | |||
FAIR VALUE MEASUREMENTS | Disclosure and measurement of fair value of our financial instruments reflect the amounts that we estimate to receive in connection with the sale of an asset or paid in connection with the transfer of a liability, when applicable, in an orderly transaction between market participants at the measurement date (exit price). For financial assets and liabilities that are periodically re-measured to fair value, we disclose a fair value hierarchy that prioritizes the use of inputs used in the applicable valuation techniques into the following three levels: | ||
· | Level 1 – quoted prices in active markets for identical assets and liabilities; | ||
· | Level 2 – Inputs other than Level 1 inputs that are either directly or indirectly observable, and; | ||
· | Level 3 – Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. | ||
As of February 28, 2014, the Amended 2013 Notes had a carrying value of $1,320,689, which approximated its fair value based on Level 2 inputs. | |||
The recorded value of certain financial assets and liabilities, which consist primarily of cash and cash equivalents, receivables, other current assets, and accounts payable and accrued expenses approximate the fair value at February 28, 2014 and 2013 based upon the short-term nature of the assets and liabilities. Based on borrowing rates currently available to the Company for loans with similar terms, and the remaining short term period outstanding, the carrying value of 2014 Notes and the Additional 2014 Notes approximates fair value. |
EQUIPMENT
EQUIPMENT | 9 Months Ended | 12 Months Ended | |||||||||
Nov. 30, 2014 | Feb. 28, 2014 | ||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||
EQUIPMENT | On March 26, 2014, we entered into an agreement with HealthCare Equipment Funding located in Roswell, Georgia to finance the purchase of a Perkin Elmer Vectra 2.0 microscope for a purchase price of $318,603. The terms of the agreement require a down payment of $21,115 and 36 monthly payments of $10,260. The agreement further requires a security deposit of $238,952, which will be refunded to the Company in three equal installments upon the payment of the twelfth, the twenty-fourth and the thirty-sixth monthly payments. This security deposit has been satisfied by the Company. As further security, a personal guaranty was required of our chief executive officer. | ||||||||||
Equipment consists of the following: | |||||||||||
On September 1, 2014, we opened our diagnostic laboratory in Boston MA. As such, we have begun to enter into arrangements for the acquisition of additional laboratory equipment, computer hardware and software, leasehold improvements and office equipment. We cannot at this time provide assurances that we will be able to enter into agreements with vendors on terms commercially favorable to us or that we will be able to enter into such arrangements without securing additional financing. | |||||||||||
Estimated Useful lives | February 28, 2014 | February 28, 2013 | |||||||||
Research equipment | 7 years | $ | 165,537 | $ | - | ||||||
Computer and software equipment | 5 years | 72,909 | 65,722 | ||||||||
238,446 | 65,722 | ||||||||||
Accumulated depreciation and amortization | (34,192 | ) | (12,396 | ) | |||||||
Equipment, net | $ | 204,254 | $ | 53,326 | |||||||
Depreciation of equipment utilized in research and development activities is included in research and development expenses. All other depreciation is included in general and administrative expense. Depreciation and amortization expense was $21,796 and $11,125 for the years ended February 28, 2014 and 2013, respectively, and $34,192 for the period from July 22, 2009 (inception) to February 28, 2014. |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Feb. 28, 2014 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | Waterford Capital Acquisition Co. IX, LLC |
During January and February 2012, we borrowed approximately $336,075 from Waterford Capital Acquisition Co. IX, LLC, and accounted for these as advances prior to the Share Exchange. Immediately prior to the Share Exchange, this debt was converted into 309,595 shares of our common stock. | |
Consulting Services | |
During the years ended February 28, 2014 and 2013, we paid one of our shareholders an aggregate of $110,000 and $72,000 of consulting fees for financial advisory services, | |
Additionally, pursuant to the 2012 Plan we issued this shareholder (i) 165,000 stock options with an exercise price equal to $0.68 on February 27, 2012 and (ii) 100,000 options with an exercise price of $3.25 on April 5, 2013. | |
SECURITES_HELD_FOR_SALE
SECURITES HELD FOR SALE | 9 Months Ended |
Nov. 30, 2014 | |
Notes to Financial Statements | |
SECURITIES HELD FOR SALE | As part of the June 30, 2014 equity financing (see Note 2), the Company received 4,800,000 shares of common stock of Quantum Materials Corp (“Consideration Shares”) in lieu of $1,000,000 of cash proceeds from an investor. In the event the Company does not receive gross proceeds of at least $1,000,000 from the sale of the Consideration Shares by the earliest to occur of (i) September 28, 2014 or (ii) the date the Company has sold of the Consideration Shares, then the investor shall make a payment to the Company equal to the difference between $1,000,000 and the aggregate gross proceeds received by the Company from the sale of the Consideration Shares. In the event the Company received gross proceeds of at least $1,000,000 from the sale of the Consideration Shares within the 90 days following the closing date of the equity financing, the Company shall immediately cease to sell the Consideration Shares and return all the unsold Consideration Shares to the investor and any proceeds from the sale of the Consideration Shares in excess of the $1,000,000. |
The Company elected to account for the Consideration Shares and the related liability to the investor at fair value. As such any changes in fair value of the Consideration Shares and the related liability, which are expected to offset each other, are recorded in earnings. The Consideration Shares and the related liability due to investor are financial instruments which are considered Level 1 in the fair value hierarchy and whose value is based on quoted prices in active market. | |
During the nine months ended November 30, 2014, the Company generated approximately $1 million of gross proceeds from the sale of the Consideration Shares. On October 14, 2014, the Company entered into an agreement with the investor whereby the remaining 1,069,305 Consideration Shares were to remain with the Company in exchange of the issuance of Series A Convertible Preferred Stock (see Note 2). As of November 30, 2014, the Company was still holding 400,000 Consideration Shares with an aggregate fair value of $80,000. During the three and nine months ended November 30, 2014, the Company incurred a loss of $33,707 on the holding and selling of the securities. |
NET_LOSS_PER_SHARE
NET LOSS PER SHARE | 9 Months Ended | 12 Months Ended | ||||||||||||||||
Nov. 30, 2014 | Feb. 28, 2014 | |||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||
NET LOSS PER SHARE | Basic net loss per common share is computed based on the weighted average number of common shares outstanding during the period. Restricted shares issued with vesting condition that have not been met at the end of the period are excluded from the computation of the weighted average shares. As of November 30, 2014 and 2013, 367,818 and 403,013 restricted shares of common stock were excluded from the computation of the weighted average shares, respectively. | Basic net loss per common share is computed based on the weighted average number of common shares outstanding during the period. Restricted shares issued with vesting condition that have not been met at the end of the period are excluded from the computation of the weighted average shares. As of February 28, 2014, 303,153 restricted shares of common stock were excluded from the computation of the weighted average shares. | ||||||||||||||||
Diluted net loss per common share is calculated giving effect to all dilutive potential common shares that were outstanding during the period. Diluted potential common shares generally consist of incremental shares issuable upon exercise of stock options and warrants and conversion of outstanding options and warrants and shares issuable from convertible securities. | Diluted net loss per common share is calculated giving effect to all dilutive potential common shares that were outstanding during the period. Diluted potential common shares generally consist of incremental shares issuable upon exercise of stock options and warrants and conversion of outstanding options and warrants and shares issuable from convertible securities. | |||||||||||||||||
In computing diluted loss per share for the periods ended November 30, 2014 and 2013, no effect has been given to the common shares issuable at the end of the period upon the conversion or exercise of the following securities as their inclusion would have been anti-dilutive: | In computing diluted loss per share for the years ended February 28, 2014 and 2013, no effect has been given to the common shares issuable at the end of the period upon the conversion or exercise of the following securities as their inclusion would have been anti-dilutive: | |||||||||||||||||
30-Nov-14 | 30-Nov-13 | 28-Feb-14 | 28-Feb-13 | |||||||||||||||
Stock options | 2,855,000 | 1,940,000 | Stock options | 2,680,000 | 1,116,500 | |||||||||||||
Warrants | 6,392,355 | 2,893,887 | Warrants | 3,146,355 | 2,732,074 | |||||||||||||
Convertible notes | - | 830,615 | Convertible notes | 1,986,467 | 315,576 | |||||||||||||
Series A Convertible Preferred Stock | 874,257 | - | Total | 7,812,822 | 4,164,150 | |||||||||||||
Total | 10,121,612 | 5,664,615 | ||||||||||||||||
COMMITMENT
COMMITMENT | 9 Months Ended |
Nov. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENT | On August 28, 2014, the Company entered into an agreement of lease with Zoom Group, LLC in connection with the Company’s diagnostic laboratory and office space located in Boston, MA. The term of the lease is for two years, from September 1, 2014 through August 31, 2016, and the basic rent payable thereunder is $10,280 per month for the first year and $10,588 per month for the second year. Additional monthly payments under the lease agreement shall include tax payments and operational costs. Additionally, the Company paid a $40,000 security deposit in connection with entering into the lease. |
On November 1, 2014, the Company entered into a sub-lease agreement for one office suite at 1410 Broadway, 23rd Floor, New York, NY 10018. The initial term of the sub-lease agreement is three (3) months ending on January 31, 2015, which may be extended on a month-to-month basis. The basic rent for the office suite is $2,200 per month. | |
LICENSE_DEVELOPMENT_AND_COMMER
LICENSE, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT WITH ASET THERAPEUTICS, LLC | 9 Months Ended |
Nov. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
LICENSE, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT WITH ASET THERAPEUTICS, LLC | On November 25, 2014, we entered into a License, Development and Commercialization Agreement (the “ASET License Agreement”) with ASET Therapeutics LLC (“ASET” or the “Licensee”), a private third party entity affiliated with one of the Company’s directors. The ASET License Agreement sets forth the rights and obligations of the parties with respect to the grant by the Company to the Licensee of an exclusive license of certain of Company’s therapeutic assets and an exclusive sublicense, with the right to sublicense through multiple tiers, of all rights and obligations under the Company’s existing Therapeutic License Agreement dated as of as of December 7, 2013 with the Massachusetts Institute of Technology and its David H. Koch Institute for Integrative Cancer Research at MIT and its Department of Biology (“MIT”), Albert Einstein College of Medicine of Yeshiva University, and Montefiore Medical Center (the “Therapeutic License Agreement”). |
The licensed technology includes: (i) Alternative Splicing Event (ASE) technology based on International Patent Application WO 2012/116248 A1 entitled "Alternatively Spliced mRNA Isoforms as Prognostic and Therapeutic Tools for Metastatic Breast Cancer and Other Invasive/Metastatic Cancers"; and (ii) Technology and know-how stemming from all ASE discovery work carried out in our labs at SUNY Stony Brook from September 2013 through November 25, 2014. The ASET License Agreement provides that the Company has the right to commercialize any companion diagnostic or biomarker (the “Companion Diagnostics”) arising from the work performed by the Licensee under the ASET License Agreement, pursuant to an exclusive sublicense. | |
The ASET License Agreement calls for certain customary payments such as annual license maintenance payments ranging from $5,000 to $25,000 and milestone payments upon the achievement of specified regulatory and sales milestones. The ASET License Agreement also requires the payment by ASET of a low single-digit royalty on net sales, at such time, if ever, as ASET’s products are fully developed, receive the required regulatory approvals and are commercialized. | |
MIT shall retain the sole and exclusive right to file, prosecute and maintain the MIT patent rights in accordance with the Therapeutic License Agreement. ASET shall have the first right to file, prosecute and maintain at its expense, the MetaStat patent rights not covered by the Therapeutic License Agreement and any patent application(s) or patent(s) arising from joint inventions, using patent counsel selected by ASET. In addition, ASET shall have the first right to initiate and prosecute such legal action or to control the defense of any declaratory judgment action relating to the parties’ patent rights in the territory in the field. ASET and MetaStat shall jointly bear the expense of such legal action. | |
Pursuant to the Memorandum of Understanding between the Company and ASET (as assignee), as amended (the “MOU”), ASET is obligated to invest an aggregate of $1.25 million in new equity in the Company, $250,000 of which was invested in the Qualified Financing (Note 2) with the balance to be invested in a separate financing on substantially similar terms on or before December 31, 2015. In the event that ASET does not satisfy its investment obligation, the ASET License Agreement will terminate and the assets will automatically revert back to the Company. The MOU also required ASET to pay for all costs and expenses of the SUNY Stony Brook facility, up to a maximum of $50,000 per month, from October 15, 2014 until the transfer of such assets under the ASET License Agreement. In addition, ASET agreed to reimburse the Company $150,000 for certain costs incurred at such facility by March 1, 2015. | |
Pursuant to the MOU, the Company is obligated to make a $1 million preferred stock equity investment in exchange for a 20% equity interest in ASET (on a fully diluted, as converted basis) on or before December 31, 2015. The Company will maintain its 20% equity ownership in ASET until such time that ASET raises an aggregate of $4,000,000 in equity or in a financing in which ASET issues securities convertible into equity (including the $1 million received from the Company, but excluding any proceeds received by ASET from the sale of the Company’s securities), after which it will be diluted proportionately with all other equity holders of ASET. The Company will have the right to maintain its equity position in ASET by participating in future financings; provided, however, that such right will terminate in the event the Company does not make a minimum investment in a future financing of ASET equal to at least the lesser of (i) $250,000 and (ii) an amount required to maintain its 20% equity ownership interest. | |
The MOU also provides that so long as the Company owns at least ten percent (10%) of the outstanding equity interests of ASET, the Company will have the right to designate one member of the ASET’s board of directors or similar governing body and that the Company’s current chief executive officer shall provide an oversight function to ASET for a period of six months following the execution of the ASET License Agreement. | |
We determined that ASET meets the criteria for variable interest entities (“VIEs”), which are entities in which equity investors lack the characteristics of a controlling financial interest. VIEs are consolidated by the primary beneficiary. ASET has not been consolidated by the Company based on our determination that the Company is not the primary beneficiary. | |
The primary beneficiary is the party who has both the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance and an obligation to absorb losses of the entity or a right to receive benefits from the entity that could potentially be significant to the entity. | |
Our determination of whether we are the primary beneficiary of the VIE is based upon the facts and circumstances for the VIE and requires significant judgment regarding whether we have power to direct the VIE’s most significant activities, which includes, but is not limited to, the VIE’s purpose and design and the risks passed through to investors, the voting interests of the VIE, management, service and/or other agreements of the VIE, involvement in the VIE’s initial design and the existence of explicit or implicit financial guarantees. | |
In accordance with the MOU, during the quarter ended November 30, 2014, we received payments in the aggregate of $75,000 from ASET as a reimbursement of research and development expenses incurred from October 15, 2014 through November 25, 2014. These payments are presented as a reduction of the research and development expense for the three and nine months ended November 30, 2014. |
TERMINATION_OF_THIRD_LICENSE_A
TERMINATION OF THIRD LICENSE AGREEMENT | 9 Months Ended | 12 Months Ended | |
Nov. 30, 2014 | Feb. 28, 2014 | ||
Research and Development [Abstract] | |||
TERMINATION OF THIRD LICENSE AGREEMENT | On October 31, 2014, we provided the Licensee notice to terminate the License Agreement dated January 3, 2012, in connection with the patent application entitled “An In Vivo Quantitative Screening Test For Anti-Metastasis Treatment Efficacy” (the “Third License Agreement”). All obligations pursuant to the Third License Agreement have been satisfied. Management determined that the intellectual property covered by the Third License Agreement was non-essential to its business and not related to its focus on the commercialization of its epigenetic-based diagnostics. | License Agreement | |
The Company entered in to a Patent and Technology License Agreement (the “License Agreement”) with the Albert Einstein College of Medicine of Yeshiva University, Massachusetts Institute of Technology, Cornell University, and the IFO-Regina Elena Cancer Institute (together the “Licensors”) during August 2010. In conjunction with entering into the License Agreement, the Company also entered into a Stock Subscription Agreement (the “Subscription Agreement”) and a Stockholders Agreement (the “Stockholders Agreement”) with the Licensors, which included provisions such as participation rights in future financings, co-sale rights, and certain limited anti-dilution rights. The License Agreement grants the Company a world-wide exclusive license to materials and methods for use in the diagnosis and treatment of metastatic spread of solid tumor cancers. In return, the Company has agreed to grant Company equity to the Licensors, to reimburse the Licensors patent expenses thus far incurred, to pay all future patent expenses, pay a royalty on any sales of product using licensed technology, as well as certain minimum royalties and milestone payments. | |||
Pursuant to the License Agreement, we are also obligated to make the following royalties and payments to the Licensors: | |||
• | Royalty payment of a specified percentage of net sales. | ||
• | Minimum royalty payment of a specified percentage of net sales in case MetaStat pays royalties to unaffiliated third parties for patent rights. | ||
• | Issue 30% of MBM’s outstanding common stock to the Licensors calculated on a fully diluted, as converted basis. Accordingly, on August 26, 2010 MBM issued 3,290,570 common shares valued at $74,786. | ||
• | Non-refundable license fee of $25,000 upon execution of License Agreement. | ||
• | License maintenance fee of $30,000 on each of the first, second, third and fourth anniversary of the License Agreement. The payment may be credited against royalties made during the twelve month period. | ||
• | License maintenance fee of $50,000, and $75,000 on the fifth and sixth anniversaries of the License Agreement, respectively. Each payment may be credited against royalties made during each such twelve month period. | ||
• | License maintenance fee of $100,000 on the seventh and each subsequent anniversary of the License Agreement. Each payment may be credited against royalties made during each such twelve month period. | ||
License payments are expensed as incurred and recorded in research and development expense. | |||
Second License Agreement and Third License Agreement | |||
Additionally, effective in March 2012, we entered into two additional license agreements with Einstein. The second license agreement with Einstein (the “Second License Agreement”) and the third license agreement with Einstein (the “Third License Agreement”) both cover pending patent applications, patent disclosures, cell lines and technology surrounding discoveries in the understanding of the underlying mechanisms of systemic metastasis in solid epithelial cancers. The Second License Agreement and the Third License Agreement both require certain customary payments such as a license signing fee, reimbursement of patent expenses, annual license maintenance fees, milestone payments, and the payment of royalties on sales of products or services covered under such agreements. | |||
Pursuant to the Second License Agreement, we are also obligated to make the following royalties and payments to the Einstein: | |||
• | Royalty payment of a specified percentage of net sales. | ||
• | Minimum royalty payment of a specified percentage of net sales in case MetaStat pays royalties to unaffiliated third parties for patent rights. | ||
• | Non-refundable license fee of $15,000 upon execution of Second License Agreement. | ||
• | License maintenance fee of $12,000 on each of the first and second anniversary of the Second License Agreement. The payment may be credited against royalties made during the twelve month period. | ||
• | License maintenance fee of $30,000, on each of the third, and forth anniversary of the Second License Agreement and $50,000 on the fifth anniversary of the Second License Agreement and $75,000 on the sixth anniversary of the Second License Agreement, respectively. Each payment may be credited against royalties made during each such twelve month period. | ||
• | License maintenance fee of $100,000 on the seventh and each subsequent anniversary of the Second License Agreement. Each payment may be credited against royalties made during each such twelve month period. | ||
Pursuant to the Third License Agreement, we are also obligated to make the following royalties and payments to the Einstein: | |||
• | Royalty payment of a specified percentage of net sales. | ||
• | Minimum royalty payment of a specified percentage of net sales in case MetaStat pays royalties to unaffiliated third parties for patent rights. | ||
• | Non-refundable license fee of $15,000 upon execution of Third License Agreement. | ||
• | License maintenance fee of $12,000 on each of the first and second anniversary of the Third License Agreement. The payment may be credited against royalties made during the twelve month period. | ||
• | License maintenance fee of $30,000, on each of the third, and forth anniversary of the Third License Agreement and $50,000 on the fifth anniversary of the Third License Agreement and $75,000 on the sixth anniversary of the Third License Agreement, respectively. Each payment may be credited against royalties made during each such twelve month period. | ||
• | License maintenance fee of $100,000 on the seventh and each subsequent anniversary of the Third License Agreement. Each payment may be credited against royalties made during each such twelve month period. | ||
License payments are expensed as incurred and recorded in research and development expense. | |||
2014 Alt. Spl. License Agreements | |||
On December 7, 2013, we entered into two separate worldwide exclusive license agreements with M.I.T. and its David H. Koch Institute for Integrative Cancer Research at M.I.T. and its Department of Biology, Einstein, and Montefiore Medical Center (“Montefiore” and, together with M.I.T. and Einstein, the “Alt. Spl. Licensors”). The diagnostic license agreement (the “Alt. Spl. Diagnostic License Agreement”) covers pending patent applications, patent disclosures, and technology surrounding discoveries of alternatively spliced mRNA and protein isoform markers for the diagnosis and prognosis of cancer through the epithelial to mesenchymal transition (“EMT”) in epithelial solid tumor cancers. The therapeutic license agreement (the “Alt. Spl. Therapeutic License Agreement” and, together with the Diagnostic License Agreement, the “2014 Alt. Spl. License Agreements”) covers pending patent applications, patent disclosures, and technology surrounding discoveries of alternatively spliced mRNA and protein isoform markers for the treatment and/or prevention of cancer through the EMT in epithelial solid tumor cancers. The 2014 Alt. Spl. License Agreements call for certain customary payments such as a license signing fee, reimbursement of patent expenses, annual license maintenance fees, milestone payments, and the payment of royalties on sales of products or services covered under the agreement. | |||
Pursuant to the Diagnostic Alt. Splicing Agreement, we are obligated to make the following royalties and payments to the MIT: | |||
• | Royalty payment of a specified percentage of net sales. | ||
• | Minimum royalty payment of a specified percentage of net sales in case MetaStat pays royalties to unaffiliated third parties for patent rights. | ||
• | Non-refundable license fees of $15,000 upon execution of the Therapeutic Alt. Spl. Agreement | ||
• | License Maintenance fee of $10,000, $15,000, $25,000, $37,500, and $50,000 beginning on January 1, 2015 and on the second, third, fourth, and fifth anniversary respectively. Each payment will be credited against royalties made during each such twelve month period. | ||
• | License maintenance fee of $50,000 each year thereafter that the license is in effect. Each payment will be credited against royalties made during each such twelve month period. | ||
Pursuant to the Therapeutic Alt. Splicing Agreement, we are obligated to make the following royalties and payments to the MIT: | |||
• | Royalty payment of a specified percentage of net sales. | ||
• | Minimum royalty payment of a specified percentage of net sales in case MetaStat pays royalties to unaffiliated third parties for patent rights. | ||
• | Non-refundable license fees of $5,000 upon execution of the Therapeutic Alt. Spl. Agreement | ||
• | No license maintenance fees shall be due for as long as the Diagnostic Alt. Spl. License Agreement is in effect. | ||
License payments are expensed as incurred and recorded in research and development expense. | |||
Lease Agreements | |||
Effective as of September 1, 2013, the Company entered into an agreement of lease with Long Island High Technology Incubator, Inc. in connection with the Company’s new drug discovery research facility located in Stony Brook, New York. The term of the lease is for one year, from September 1, 2013 through August 31, 2014, and the rent payable thereunder is $28,000 per year, payable in monthly installments of $2,333. |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 9 Months Ended | 12 Months Ended |
Nov. 30, 2014 | Feb. 28, 2014 | |
Subsequent Events [Abstract] | ||
SUBSEQUENT EVENTS | Completion of Series B Convertible Preferred Financing | Lease Agreement |
On December 31, 2014, we entered into a securities purchase agreement (the “Series B Purchase Agreement”) with a number of new and existing accredited investors (collectively, the “Series B Investors”) pursuant to which the Company may sell units, for a price of $5,500 per unit, up to an aggregate purchase price $3,492,500. Each unit comprised of a) one share of Series B convertible preferred stock (the “Series B Preferred Shares”) convertible into the Company’s common stock (the “Series B Conversion Shares”) at $0.55 per share in a private placement (the “Series B Private Placement”) and b) one series A warrants (the “Series A Warrants”) to purchase 7,500 shares of common stock at an initial exercise price per share of $0.70. Series B Investors who purchased a minimum of $500,000 of units on or before December 31, 2014 shall also receive a series B warrants (the “Series B Warrants” and, together with the Series A Warrants, the “Warrants”) to purchase 2,500 shares of common stock at an initial exercise price per share of $0.55. The Warrants expire on March 31, 2020. | On March 1, 2014 we entered into a six-month lease arrangement for 550 square feet of offices at 1510 Broadway, 23rd Floor, New York, NY 10018 for $5,700 per month for our management and administrative facilities. The lease agreement will automatically renew for successive periods under the same terms unless alternative arrangements have been made in writing at least sixty days prior to the end date. | |
Pursuant to the initial closing under the Series B Purchase Agreement, we issued approximately 229 Series B Preferred Shares convertible into 2,286,363 shares of common stock, Series A Warrants to purchase 1,714,771 shares of common stock and Series B Warrants to purchase 455,000 shares of common stock for an aggregate purchase price of $1,257,500, of which $90,000 was paid through the conversion of outstanding indebtedness and accrued liabilities due to certain members of our board of directors and management. The Series B Purchase Agreement provides that the Company may raise an additional $2,235,000 in the Series B Private Placement at any time through March 31, 2015. | Additional 2014 Notes | |
In connection with the initial closing of the Series B Private Placement, we paid to a placement agent a cash fee of $80,080 and will issue 145,600 placement agent warrants. The placement agent warrants shall have the same terms as the Series A Warrants. In addition, the placement agent received a non-accountable expense allowance of $25,000, which is equal to 50% of the total expense allowance to be paid. | In March 2014, the Company issued Additional 2014 Notes in the aggregate principal amount of $150,000 with 25,000 detachable warrants that can be exercised at $2.10 per share within a five-year period. | |
Along with the Series B Purchase Agreement, we entered into a registration rights agreement with the Series B Investors. If the Company does not file a registration statement within 30 days of the final closing of the Series B Private Placement to register the shares the Series B Preferred Shares can be converted into and the Warrants can be exercised into, it will be subject to late registration payments to be paid to the Series B Investors. | May 2014 Notes | |
In May and June 2014, we entered into separate convertible note and warrant purchase agreements with certain accredited investors for the issuance and sale in a private placement consisting of, in the aggregate: (a) $165,000 principal amount of convertible promissory notes (the “May 2014 Notes”) convertible into shares of our common stock (the “Common Stock”), and (b) five-year warrants to purchase up to 55,001 shares of Common Stock at an exercise price of $1.50 per share, for aggregate gross proceeds of $165,000. | ||
The May 2014 Notes bear interest at the rate of 8% per annum, mature on June 30 and August 15, 2014 and rank pari passu to the Company’s currently issued and outstanding 2013 Notes, 2014 Notes, and Additional 2014 Notes and senior to the Company’s issued and outstanding equity securities. Upon the closing by the Company of an equity or equity based financing or a series of equity or equity based financings (a “Qualified Financing”) resulting in gross proceeds to the Company of at least $5,000,000 in the aggregate and the Company, prior to or concurrent with the completion of the Qualified Financing, (the “Qualified Financing Threshold Amount”), the outstanding principal amount of the May 2014 Notes together with all accrued and unpaid interest (the “Outstanding Balance”) shall automatically convert into such securities, including Warrants of the Company as are issued in the Qualified Financing, the amount of which shall be determined in accordance with the following formula: (the Outstanding Balance as of the closing of the Qualified Financing) x (1.15) / (the per security price of the securities sold in the Qualified Financing). For purposes of determining whether the Qualified Financing Threshold Amount has been satisfied, such amount shall include (i) the Outstanding Balance of the May 2014 Notes, (ii) the outstanding principal amount of the 2013 Notes, (iii) the outstanding principal amount of the 2014 Notes, and (iv) the outstanding principal amount of the Additional 2014 Notes, together with all accrued and unpaid interest thereunder. | ||
Investor Relations Agreements | ||
On March 2, 2014, we entered into a services agreement with an investor relations firm to perform certain investor relations, public relations, Internet development, communications and consulting services. The services agreement has an initial term of six months. We paid an initial retainer of $22,500 upon execution of the services agreement and are required to make three consecutive monthly payments of $7,500. In addition, we issued 50,000 shares of restricted stock to the investor relations firm in connection with entering into the services agreement. | ||
Effective June 9, 2014, we entered into a consulting agreement with an investor relations firm to perform investor relation services. The consulting agreement has a term of six months. We are required to issue 250,000 shares of restricted shares of common stock upon signing of the agreement and shall pay a cash fee of $250,000 upon completion of a financing resulting in gross proceeds to us of at least $2,000,000. | ||
Laboratory Equipment | ||
On March 26, 2014, we entered into an agreement with HealthCare Equipment Funding located in Roswell, Georgia to finance the purchase of a Perkin Elmer Vectra 2.0 microscope for a purchase price of $318,603. The terms of the agreement require a down payment of $21,115 and 36 monthly payments of $10,260. The agreement further requires a security deposit of $238,952, which will be refunded to the Company in three equal installments upon the payment of the twelfth, the twenty-fourth and the thirty-sixth monthly payments. This security deposit was due and payable on May 1, 2014, however has been extended by mutual agreement of the parties. As further security, personal guaranties were required of our chief executive officer and chief financial officer. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | 12 Months Ended | ||||||||||||||||
Nov. 30, 2014 | Feb. 28, 2014 | |||||||||||||||||
Summary Of Significant Accounting Policies Policies | ||||||||||||||||||
Basis of Presentation and Going Concern | These accompanying financial statements have been prepared assuming that the Company will continue as going concern. For the period from July 22, 2009 (inception) to February 28, 2014, the Company has accumulated a deficit of $10,727,675, including a net loss of $5,365,196 for the year ended February 28, 2014, and has not generated revenues or positive cash flows from operations. The continuation of the Company as a going concern is dependent upon continued financial support from its shareholders, the ability of the Company to obtain necessary equity and/or debt financing to continue operations, and the attainment of profitable operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The Company cannot make any assurances that additional financings will be available to it and, if available, completed on a timely basis, on acceptable terms or at all. If the Company is unable to complete a debt or equity offering, or otherwise obtain sufficient financing when and if needed, it would negatively impact its business and operations and could also lead to the reduction or suspension of the Company’s operations and ultimately force the Company to cease operations. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. | |||||||||||||||||
Basis of Presentation | ||||||||||||||||||
The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, MetaStat BioMedical, Inc., a Delaware corporation. All significant intercompany balances and transactions have been eliminated in consolidation. These interim financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”) in the United States consistent with those applied in, and should be read in conjunction with, the Company’s audited consolidated financial statements and related footnotes for the year ended February 28, 2014 included in the Company’s Annual Report on Form 10-K as filed with the United States Securities and Exchange Commission (“SEC”) on June 13, 2014. These financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the Company’s financial position as of November 30, 2014 and its results of operations and cash flows for the interim periods presented and are not necessarily indicative of results for subsequent interim periods or for the full year. These interim financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and allowed by the relevant SEC rules and regulations; however, the Company believes that its disclosures are adequate to ensure that the information presented is not misleading. Certain amounts in prior periods have been reclassified to conform to current presentation. | ||||||||||||||||||
Going Concern | ||||||||||||||||||
These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As of November 30, 2014, the Company has an accumulated deficit of $17,671,372. The continuation of the Company as a going concern is dependent upon continued financial support from its shareholders, the ability of the Company to obtain necessary equity and/or debt financing to continue operations, and the attainment of profitable operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The Company cannot make any assurances that additional financings will be completed on a timely basis, on acceptable terms or at all. If the Company is unable to complete a debt or equity offering, or otherwise obtain sufficient financing when and if needed, it would negatively impact it’s business and operations, which could cause the price of its common stock to decline. It could also lead to the reduction or suspension of the Company’s operations and ultimately force the Company to cease operations. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. | ||||||||||||||||||
. | ||||||||||||||||||
Principles of Consolidation | The consolidated financial statements include the accounts of MetaStat, Inc. and its wholly-owned subsidiary, MetasStat BioMedical, Inc. All significant intercompany accounts and transactions have been eliminated in consolidation. | |||||||||||||||||
Cash and cash equivalents | For purposes of the Statement of Cash Flows, the Company considers all short-term debt securities purchased with maturity of three months or less to be cash equivalents. | |||||||||||||||||
The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risks on cash and cash equivalents. | ||||||||||||||||||
Equipment | Equipment is stated at cost. The cost of equipment is depreciated over the estimated useful lives of the related assets. Depreciation is computed using the straight-line method for financial reporting purposes and accelerated methods for income tax purposes. Expenditures for major renewals or betterments that extend the useful lives of equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. | |||||||||||||||||
Long-lived assets | Long-lived assets are evaluated for impairment whenever events or conditions indicate that the carrying value of an asset may not be recoverable. If the sum of the expected undiscounted cash flows is less than the carrying value of the related asset or group of assets, a loss is recognized for the difference between the fair value and carrying value of the asset or group of assets. There were no events or conditions that indicated that impairment of long-lived assets may have occurred as of February 28, 2014 and 2013. | |||||||||||||||||
Deferred Financing Costs | Debt issuance costs are recorded as deferred financing costs and amortized over the maturity period of the related debt instrument using the effective interest method. | |||||||||||||||||
Debt Instruments | We analyze debt issuance for various features that would generally require either bifurcation and derivative accounting, or recognition of a debt discount or premium under authoritative guidance. | |||||||||||||||||
Detachable warrants issued in conjunction with debt are measured at their relative fair value, if they are determined to be equity instrument, or their fair value, if they are determined to be liability instruments, and recorded as a debt discount. Conversion features that are in the money at the commitment date constitute a beneficial conversion feature that is measured at its intrinsic value and are recognized as debt discount. Debt discount is amortized as accretion expense over the maturity period of the debt using the effective interest method. Contingent beneficial conversion features are recognized when the contingency has been resolved. | ||||||||||||||||||
Development Stage | The Company complies with Statement of Financial Accounting Standard ASC 915-15 for its characterization of the Company as development stage. | |||||||||||||||||
Revenues | We currently do not have any revenues. We expect to derive our revenues from sale of our products which are currently under development. | |||||||||||||||||
Net Loss Per Share | Basic net loss per common share is computed based on the weighted average number of common shares outstanding during the period. Restricted shares issued with vesting condition that have not been met at the end of the period are excluded from the computation of the weighted average shares. As of November 30, 2014 and 2013, 367,818 and 403,013 restricted shares of common stock were excluded from the computation of the weighted average shares, respectively. | Basic net loss per common share is computed based on the weighted average number of common shares outstanding during the period. Restricted shares issued with vesting condition that have not been met at the end of the period are excluded from the computation of the weighted average shares. As of February 28, 2014, 303,153 restricted shares of common stock were excluded from the computation of the weighted average shares. | ||||||||||||||||
Diluted net loss per common share is calculated giving effect to all dilutive potential common shares that were outstanding during the period. Diluted potential common shares generally consist of incremental shares issuable upon exercise of stock options and warrants and conversion of outstanding options and warrants and shares issuable from convertible securities. | Diluted net loss per common share is calculated giving effect to all dilutive potential common shares that were outstanding during the period. Diluted potential common shares generally consist of incremental shares issuable upon exercise of stock options and warrants and conversion of outstanding options and warrants and shares issuable from convertible securities. | |||||||||||||||||
In computing diluted loss per share for the periods ended November 30, 2014 and 2013, no effect has been given to the common shares issuable at the end of the period upon the conversion or exercise of the following securities as their inclusion would have been anti-dilutive: | In computing diluted loss per share for the years ended February 28, 2014 and 2013, no effect has been given to the common shares issuable at the end of the period upon the conversion or exercise of the following securities as their inclusion would have been anti-dilutive: | |||||||||||||||||
30-Nov-14 | 30-Nov-13 | 28-Feb-14 | 28-Feb-13 | |||||||||||||||
Stock options | 2,855,000 | 1,940,000 | Stock options | 2,680,000 | 1,116,500 | |||||||||||||
Warrants | 6,392,355 | 2,893,887 | Warrants | 3,146,355 | 2,732,074 | |||||||||||||
Convertible notes | - | 830,615 | Convertible notes | 1,986,467 | 315,576 | |||||||||||||
Series A Convertible Preferred Stock | 874,257 | - | Total | 7,812,822 | 4,164,150 | |||||||||||||
Total | 10,121,612 | 5,664,615 | ||||||||||||||||
Income Taxes | Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to net operating loss carry forwards and temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. These assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse. A valuation allowance is recorded if it more likely than not that some portion or all of the deferred tax assets will not be realized in future periods. | |||||||||||||||||
Research and Development Costs | Research and development costs are charged to operations when incurred and are included in operating expenses. Research and development costs consist principally of compensation cost for our employees and consultants that perform our research activities, the fees paid to maintain our licenses and the payments to third parties for clinical trial and additional product development and testing. Research and development costs were $824,336 and $516,798 for the years ended February 28, 2014 and February 28, 2013, respectively, and $2,365,539 for the period from July 22, 2009 (inception) to February 28, 2014. | |||||||||||||||||
Use of Estimates | The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. | |||||||||||||||||
Stock-Based Compensation | We account for share-based payments award issued to employees and members of our Board of Directors by measuring the fair value of the award on the date of grant and recognizing this fair value as stock-based compensation using a straight-line basis over the requisite service period, generally the vesting period. For awards issued to non-employees, the measurement date is the date when the performance is complete or when the award vests, whichever is the earliest. Accordingly, non-employee awards are measured at each reporting period until the final measurement date. The fair value of the award is recognized as stock-based compensation over the requisite service period, generally the vesting period. | |||||||||||||||||
For awards with performance conditions that affect their vesting, such as the occurrence of certain transactions or the achievement of certain operating or financial milestones, recognition of fair value of the award occurs when vesting becomes probable. For awards with market condition that affect their vesting, the fair value of the award is recognized as stock-based compensation over the requisite service period, generally the vesting period. | ||||||||||||||||||
Reclassifications | Certain reclassifications have been made to prior year amounts to conform to the current year presentation. | |||||||||||||||||
Recently Issued Accounting Pronouncements | We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow. | |||||||||||||||||
Recent Accounting Pronouncement | ||||||||||||||||||
In June 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) No. 2014-10, “Development Stage Entities (Topic 915), Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, "Consolidation” (“ASU 2014-10”). The amendments in ASU 2014-10 remove the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from GAAP. In addition, the amendments eliminate the requirements for development stage entities to: (i) present inception-to-date information in the statements of income, cash flows, and shareholder equity; (ii) label the financial statements as those of a development stage entity; (iii) disclose a description of the development stage activities in which the entity is engaged; and (iv) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The presentation and disclosure requirements in ASC Topic 915, "Development Stage Entities" are no longer required for interim and annual reporting periods beginning after December 15, 2014, however, early adoption is permitted. The Company has elected to early adopt the presentation and disclosure provisions of ASU 2014-10 for this unaudited condensed consolidated financial statements. | ||||||||||||||||||
In August 2014, the FASB issued ASU No. 2014-15, “ Presentation of Financial Statements-Going Concern” (“ASU 2014-15”), which establishes management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern in connection with preparing financial statements for each annual and interim reporting period. ASU 2014-15 also provides guidance to determine whether to disclose information about relevant conditions and events when there is substantial doubt about an entity’s ability to continue as a going concern. This update is effective for interim and annual reporting periods beginning December 15, 2016; early adoption is permitted. We are currently evaluating the impact that this standard will have on our consolidated financial statements. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||||
Nov. 30, 2014 | Feb. 28, 2014 | |||||||||||||||||
Summary Of Significant Accounting Policies Tables | ||||||||||||||||||
Antidilutive shares excluded from computing diluted loss per share | 30-Nov-14 | 30-Nov-13 | ||||||||||||||||
Stock options | 2,855,000 | 1,940,000 | 28-Feb-14 | 28-Feb-13 | ||||||||||||||
Warrants | 6,392,355 | 2,893,887 | Stock options | 2,680,000 | 1,116,500 | |||||||||||||
Convertible notes | - | 830,615 | Warrants | 3,146,355 | 2,732,074 | |||||||||||||
Series A Convertible Preferred Stock | 874,257 | - | Convertible notes | 1,986,467 | 315,576 | |||||||||||||
Total | 10,121,612 | 5,664,615 | Total | 7,812,822 | 4,164,150 |
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
Statutory federal tax rate reconciliation | |||||||||
28-Feb-14 | 28-Feb-13 | ||||||||
Income tax benefit at the federal statutory rate | 34 | % | 34 | % | |||||
Permanent differences | (3.62 | %) | -3.24 | % | |||||
Increase in valuation allowance | (30.38 | %) | (30.76 | %) | |||||
Provision for income tax | 0 | % | 0 | % | |||||
Deferred tax assets | 2014 | 2013 | |||||||
Net operating loss carryforwards | $ | 2,830,058 | $ | 1,573,290 | |||||
Stock-based compensation | 904,278 | 246,238 | |||||||
3,734,336 | 1,819.53 | ||||||||
Depreciation | -10,273 | -10,273 | |||||||
3,724,063 | 1,809,255 | ||||||||
Less: Valuation allowance | -3,724,063 | (1,809,255 | ) | ||||||
Net deferred tax asset | $ | - | $ | - |
STOCK_OPTIONS_Tables
STOCK OPTIONS (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||
Nov. 30, 2014 | Feb. 28, 2014 | |||||||||||||||||||||||||||||||||
Stock Options Tables | ||||||||||||||||||||||||||||||||||
Common stock options issued and outstanding | Options | Weighted | Aggregate | Weighted | Options | Weighted average exercise price | Aggregate intrinsic value | Weighted average remaining contractual life (years) | ||||||||||||||||||||||||||
average | intrinsic | average | Outstanding at February 28, 2013 | 1,116,500 | $ | 0.68 | - | - | ||||||||||||||||||||||||||
exercise | value | remaining | Granted | 1,563,500 | $ | 2.42 | - | - | ||||||||||||||||||||||||||
price | contractual | Outstanding and expected to vest at February 28, 2014 | 2,680,000 | $ | 1.7 | $ | 599,025 | 8.78 | ||||||||||||||||||||||||||
life (years) | Exercisable at February 28, 2014 | 1,820,000 | $ | 1.89 | $ | 599,025 | 8.53 | |||||||||||||||||||||||||||
Outstanding at February 28, 2014 | 2,680,000 | $ | 1.7 | $ | - | - | ||||||||||||||||||||||||||||
Forfeited | 425,000 | $ | 1.59 | $ | - | - | ||||||||||||||||||||||||||||
Issued | 600,000 | $ | 1.1 | $ | - | - | ||||||||||||||||||||||||||||
Outstanding and expected to vest at November 30, 2014 | 2,855,000 | $ | 1.59 | $ | - | 8.49 | ||||||||||||||||||||||||||||
Exercisable at November 30, 2014 | 1,705,000 | $ | 1.79 | $ | 7.81 |
WARRANTS_Tables
WARRANTS (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||
Nov. 30, 2014 | Feb. 28, 2014 | |||||||||||||||||||||||||||||||||
Warrants Tables | ||||||||||||||||||||||||||||||||||
Common stock purchase warrants issued and outstanding | Warrants | Weighted | Aggregate | Weighted | Warrants | Weighted average exercise price | Aggregate intrinsic value | Weighted average remaining contractual life (years) | ||||||||||||||||||||||||||
average | intrinsic | average | Outstanding at February 28, 2013 | 2,732,074 | $ | 1.13 | $ | - | - | |||||||||||||||||||||||||
exercise | value | remaining | Issued | 414,281 | $ | 2.28 | - | - | ||||||||||||||||||||||||||
price | contractual | Outstanding at February 28, 2014 | 3,146,355 | $ | 1.24 | $ | 807,096 | 2.97 | ||||||||||||||||||||||||||
life (years) | ||||||||||||||||||||||||||||||||||
Outstanding at February 28, 2014 | 3,146,355 | $ | 1.24 | $ | - | - | ||||||||||||||||||||||||||||
Issued | 3,246,000 | $ | 1.5 | $ | - | 3.63 | ||||||||||||||||||||||||||||
Outstanding at November 30, 2014 | 6,392,355 | $ | 1.37 | $ | - | 2.93 | ||||||||||||||||||||||||||||
Warrants exercisable | Exercise prices | Number of shares | Weighted average remaining life (years) | Exercisable number of shares | Exercise prices | Number of shares | Weighted average remaining life (years) | Exercisable number of shares | ||||||||||||||||||||||||||
$ | 0.68 | 220,000 | 1.96 | 220,000 | $ | 0.68 | 220,000 | 2.71 | 220,000 | |||||||||||||||||||||||||
$ | 0.91 | 1,497,124 | 2.17 | 1,497,124 | $ | 0.91 | 1,497,124 | 2.93 | 1,497,124 | |||||||||||||||||||||||||
$ | 1.4 | 786,250 | 1.74 | 786,250 | $ | 1.4 | 786,250 | 2.49 | 786,250 | |||||||||||||||||||||||||
$ | 1.5 | 3,371,000 | 3.52 | 3,371,000 | $ | 1.5 | 150,000 | 2.6 | 150,000 | |||||||||||||||||||||||||
$ | 2.1 | 472,001 | 3.19 | 472,001 | $ | 2.1 | 447,001 | 4.13 | 447,001 | |||||||||||||||||||||||||
$ | 2.5 | 25,980 | 3.12 | 25,980 | $ | 2.5 | 25,980 | 3.87 | 25,980 | |||||||||||||||||||||||||
$ | 3 | 20,000 | 2.17 | 20,000 | $ | 3 | 20,000 | 2.92 | 20,000 |
EQUIPMENT_Tables
EQUIPMENT (Tables) | 12 Months Ended | |||||||||
Feb. 28, 2014 | ||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||
Equipment | Estimated Useful lives | February 28, 2014 | February 28, 2013 | |||||||
Research equipment | 7 years | $ | 165,537 | $ | - | |||||
Computer and software equipment | 5 years | 72,909 | 65,722 | |||||||
238,446 | 65,722 | |||||||||
Accumulated depreciation and amortization | (34,192 | ) | (12,396 | ) | ||||||
Equipment, net | $ | 204,254 | $ | 53,326 |
CONVERTIBLE_NOTES_Tables
CONVERTIBLE NOTES (Tables) | 9 Months Ended | ||||
Nov. 30, 2014 | |||||
Convertible Notes Tables | |||||
Computation of loss on extinguishment | Fair value of Amended 2013 Notes (1) | $ | 1,243,482 | ||
Fair value of non-cash consideration issued to the creditor (2) | 269,707 | ||||
Reacquisition price | 1,513,189 | ||||
Carrying value of the debt at modification | 1,480,336 | ||||
Loss on extinguishment | $ | 32,853 | |||
(1) | Fair value was determined using level 2 inputs, specifically prices for a subsequent issuance of comparable debt instruments. | ||||
(2) | Consist of $143,325 fair value of common stock issued and $126,382 fair value of warrants issued and warrants modified. The warrants were valued using a Black-Scholes model with the following inputs: (1) a discount rate of 1.27%; (2) an expected term of 4.00 years; (3) an expected volatility of 121%; and (4) zero expected dividends. |
NET_LOSS_PER_SHARE_Tables
NET LOSS PER SHARE (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||||
Nov. 30, 2014 | Feb. 28, 2014 | |||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||
Anti-dilutive securities | 30-Nov-14 | 30-Nov-13 | ||||||||||||||||
Stock options | 2,855,000 | 1,940,000 | 28-Feb-14 | 28-Feb-13 | ||||||||||||||
Warrants | 6,392,355 | 2,893,887 | Stock options | 2,680,000 | 1,116,500 | |||||||||||||
Convertible notes | - | 830,615 | Warrants | 3,146,355 | 2,732,074 | |||||||||||||
Series A Convertible Preferred Stock | 874,257 | - | Convertible notes | 1,986,467 | 315,576 | |||||||||||||
Total | 10,121,612 | 5,664,615 | Total | 7,812,822 | 4,164,150 |
DESCRIPTION_OF_BUSINESS_AND_GO1
DESCRIPTION OF BUSINESS AND GOING CONCERN (Details Narrative) (USD $) | 7 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Feb. 28, 2010 | Nov. 30, 2014 | Nov. 30, 2013 | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 29, 2012 | Feb. 28, 2011 | Feb. 28, 2012 | |
Date of incorporation | 28-Mar-07 | 28-Mar-07 | ||||||
Going Concern | ||||||||
Accumulated deficit | ($10,727,675) | |||||||
Net loss | -52,071 | -6,943,697 | -3,680,860 | -5,365,196 | -2,520,579 | -2,426,654 | -363,175 | |
MBM Agreement [Member] | ||||||||
Share Exchange Agreement | ||||||||
Common stock issued pursuant to agreement | 18,369,421 | |||||||
Shares issued rate of outstanding stock | 95.60% | |||||||
Warrants assumed | 780,511 | |||||||
Warrant value in shares | 1,717,122 | |||||||
Debt converted | 336,075 | |||||||
Shares issued upon debt exchange | 309,595 | |||||||
Shares issued for services | 36,000 | |||||||
Remaining common stock outstanding prior to Exchange | 840,000 | |||||||
Five-year warrant share conversion into common shares | 350,000 | |||||||
Five-year warrant exercise price | $1.40 | |||||||
Warrant purchase price | $21,000 | |||||||
Warrants received for services | 12,500 | |||||||
Reserved shares under employee benefit plan | 1,116,789 | |||||||
Converted options | 507,500 | |||||||
Option purchase right, total shares | 1,116,500 | |||||||
Option purchase right, exercise price per share | $0.68 | |||||||
Stock reserved following closing date | 3,316,789 | |||||||
Minimum [Member] | ||||||||
Share Exchange Agreement | ||||||||
Warrant exercise price | $1.50 | |||||||
Minimum [Member] | ||||||||
Share Exchange Agreement | ||||||||
Warrant exercise price | $2 |
DESCRIPTION_OF_BUSINESS_AND_GO2
DESCRIPTION OF BUSINESS AND GOING CONCERN (Details Narrative 2) (USD $) | 9 Months Ended | 12 Months Ended | |
Nov. 30, 2014 | Feb. 28, 2014 | Feb. 28, 2013 | |
Description Of Business And Going Concern Details Narrative 2 | |||
Date of incorporation | 28-Mar-07 | 28-Mar-07 | |
Going Concern | |||
Accumulated deficit | ($17,671,372) | ($10,727,675) | ($5,362,479) |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 9 Months Ended | 12 Months Ended | ||
Nov. 30, 2014 | Nov. 30, 2013 | Feb. 28, 2014 | Feb. 28, 2013 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount | 10,121,612 | 5,664,615 | 7,812,822 | 4,164,150 |
Stock Options [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount | 2,855,000 | 1,940,000 | 2,680,000 | 1,116,500 |
Warrants [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount | 6,392,355 | 2,893,887 | 3,146,355 | 2,732,074 |
Convertible notes [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount | 1,986,467 | 315,576 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 55 Months Ended | |||
Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | |
Summary Of Significant Accounting Policies Details Narrative | |||||||
Antidilutive common stock excluded from weighted average shares | 303,153 | 303,153 | |||||
Research & development | $269,560 | $90,261 | $1,002,187 | $422,476 | $824,336 | $516,798 | $2,365,539 |
LICENSE_AGREEMENT_AND_COMMITME1
LICENSE AGREEMENT AND COMMITMENTS (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Jun. 11, 2014 | Nov. 30, 2014 | Feb. 28, 2014 | |
Lease term | 6 months | 1 year | |
Lease expiration date | 31-Aug-16 | 31-Aug-14 | |
Rent payable yearly | $99,965 | $28,000 | |
Rent payable, monthly installment rate | 2,333 | ||
License Agreement [Member] | |||
Percent of outstanding common stock to be issued | 30.00% | ||
Common shares issued | 3,290,570 | ||
Issued shares, value | 74,786 | ||
License fee due upon execution | 25,000 | ||
License maintenance fee due at one year | 30,000 | ||
License maintenance fee due at two years | 30,000 | ||
License maintenance fee due at three years | 30,000 | ||
License maintenance fee due at four years | 30,000 | ||
License maintenance fee due at five years | 50,000 | ||
License maintenance fee due at six years | 75,000 | ||
License maintenance fee due thereafter | 100,000 | ||
Shares issued per antidilution right | 160,158 | ||
License Agreement 2 [Member] | |||
License fee due upon execution | 15,000 | ||
License maintenance fee due at one year | 12,000 | ||
License maintenance fee due at two years | 12,000 | ||
License maintenance fee due at three years | 30,000 | ||
License maintenance fee due at four years | 30,000 | ||
License maintenance fee due at five years | 50,000 | ||
License maintenance fee due at six years | 75,000 | ||
License maintenance fee due thereafter | 100,000 | ||
License Agreement 3 [Member] | |||
License fee due upon execution | 15,000 | ||
License maintenance fee due at one year | 12,000 | ||
License maintenance fee due at two years | 12,000 | ||
License maintenance fee due at three years | 30,000 | ||
License maintenance fee due at four years | 30,000 | ||
License maintenance fee due at five years | 50,000 | ||
License maintenance fee due at six years | 75,000 | ||
License maintenance fee due thereafter | 100,000 | ||
License Agreement 4 [Member] | |||
License fee due upon execution | 15,000 | ||
License maintenance fee due at one year | 10,000 | ||
License maintenance fee due at two years | 15,000 | ||
License maintenance fee due at three years | 25,000 | ||
License maintenance fee due at four years | 37,500 | ||
License maintenance fee due at five years | 50,000 | ||
License maintenance fee due thereafter | $50,000 |
INCOME_TAXES_Details
INCOME TAXES (Details) | 12 Months Ended | |
Feb. 28, 2014 | Feb. 28, 2013 | |
Income Tax Disclosure [Abstract] | ||
Income tax benefit at the federal statutory rate | 34.00% | 34.00% |
Permanent differences | -3.62% | -3.24% |
Increase in valuation allowance | -30.38% | -30.76% |
Provision for income tax | 0.00% | 0.00% |
INCOME_TAXES_Details_1
INCOME TAXES (Details 1) (USD $) | Feb. 28, 2014 | Feb. 28, 2013 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $2,830,058 | $1,573,290 |
Stock-based compensation | 904,278 | 246,238 |
Deferred tax asset before depreciation | 3,734,336 | 1,819,528 |
Depreciation | -10,273 | -10,273 |
Deferred tax asset | 3,724,063 | 1,809,255 |
Less: Valuation allowance | -3,724,063 | -1,809,255 |
Net deferred tax asset |
INCOME_TAXES_Details_Narrative
INCOME TAXES (Details Narrative) (USD $) | 12 Months Ended | |
Feb. 28, 2014 | Feb. 28, 2013 | |
Income Tax Disclosure [Abstract] | ||
Valuation allowance increase | $1,914,808 | $1,132,682 |
Cumulative net operating loss carry-forward, federal | 7,372,397 | |
Cumulative net operating loss carry-forward, state | $5,445,159 | |
Income tax years subject to IRA and state tax audit | The Company is no longer subject to Federal income tax assessment for years before 2010. However, since the Company has incurred net operating losses every year since inception, all of its income tax returns are subject to examination and adjustments by the Internal Revenue Service for at least three years following the year in which the tax attributes are utilized |
EQUITY_Details_Narrative
EQUITY (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 55 Months Ended | 12 Months Ended | ||||
Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 29, 2012 | Feb. 28, 2014 | Feb. 28, 2012 | |
Share Exchange Agreement | |||||||||
Common stock sold for proceeds | 880,000 | 865,000 | |||||||
Proceeds from sale of common stock | $880,000 | $865,000 | |||||||
Issuance of restricted stock to board of directors for services | 100,000 | ||||||||
Expense of restricted stock issuance | 5,270 | ||||||||
Allocated to research and development expense | 269,560 | 90,261 | 1,002,187 | 422,476 | 824,336 | 516,798 | 2,365,539 | ||
Allocated to general and administrative expense | 1,080,222 | 794,156 | 2,882,899 | 2,608,123 | 3,526,863 | 2,000,937 | 7,345,295 | ||
MBM Agreement [Member] | |||||||||
Share Exchange Agreement | |||||||||
Common stock issued pursuant to agreement | 18,369,421 | ||||||||
Remaining common stock outstanding prior to Exchange | 840,000 | ||||||||
Advisory And Clinical [Member] | |||||||||
Share Exchange Agreement | |||||||||
Restricted stock issued | 153,013 | 153,013 | |||||||
Director [Member] | |||||||||
Share Exchange Agreement | |||||||||
Common stock issued | 150,000 | 150,000 | |||||||
Achievement goal | 5,000,000 | 5,000,000 | |||||||
Fair value | 375,000 | 375,000 | |||||||
Stock compensation expense | 115,500 | ||||||||
Consultant and Advisor [Member] | |||||||||
Share Exchange Agreement | |||||||||
Common stock issued | 100,000 | 112,000 | |||||||
Fair value | 250,000 | 284,200 | |||||||
Stock compensation expense | 250,000 | 0 | 284,200 | ||||||
Allocated to research and development expense | 187,500 | ||||||||
Allocated to general and administrative expense | 96,700 | ||||||||
Consultant [Member] | |||||||||
Share Exchange Agreement | |||||||||
Common stock issued | 50,000 | 12,000 | 12,000 | ||||||
Fair value | 67,500 | 34,200 | 15,000 | ||||||
Stock compensation expense | 0 | 67,500 | 0 | ||||||
2013 Note Holder [Member] | |||||||||
Share Exchange Agreement | |||||||||
Common stock issued | 92,468 | ||||||||
Convertible promissory notes issued | $1,387,000 |
EQUITY_Details_Narrative_2
EQUITY (Details Narrative 2) (USD $) | 12 Months Ended | 9 Months Ended | 1 Months Ended | 12 Months Ended | 9 Months Ended | 3 Months Ended | |
Feb. 28, 2013 | Feb. 29, 2012 | Nov. 30, 2014 | Jan. 14, 2015 | Feb. 28, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | |
Net Proceeds from sale of stock | $880,000 | $865,000 | |||||
Consideration shares sold | 880,000 | 865,000 | |||||
Minimum [Member] | |||||||
Consideration shares sold | 30,000 | ||||||
Maximum [Member] | |||||||
Consideration shares sold | 100,000 | ||||||
Lincoln Park Capital Purchase Agreement | |||||||
Common stock issued | 200,000 | ||||||
Fair value | 140,000 | ||||||
Stock compensation expense | 140,000 | ||||||
Second Closing [Member] | |||||||
Common stock issued | 188,182 | ||||||
Net Proceeds from sale of stock | 207,000 | ||||||
Advisory And Clinical [Member] | |||||||
Restricted stock issued | 153,013 | 153,013 | |||||
Director [Member] | |||||||
Common stock issued | 150,000 | 150,000 | |||||
Achievement goal | 5,000,000 | 5,000,000 | |||||
Fair value | 375,000 | 375,000 | |||||
Stock compensation expense | 115,500 | ||||||
Consultant and Advisor [Member] | |||||||
Common stock issued | 100,000 | 112,000 | |||||
Fair value | 250,000 | 284,200 | |||||
Stock compensation expense | 250,000 | 284,200 | 0 | ||||
Consultant [Member] | |||||||
Common stock issued | 50,000 | 12,000 | 12,000 | ||||
Fair value | 67,500 | 15,000 | 34,200 | ||||
Stock compensation expense | 67,500 | 0 | 0 | ||||
Consultant 2 [Member] | |||||||
Common stock issued | 250,000 | ||||||
Fair value | 285,025 | ||||||
Stock compensation expense | 95,000 | ||||||
Director 2 [Member] | |||||||
Common stock issued | 162,500 | ||||||
Fair value | 147,875 | ||||||
Stock compensation expense | 147,875 | 147,875 | |||||
October Modification [Member] | |||||||
Vested shares | 100,000 | ||||||
Stock compensation expense | 77,000 | ||||||
October Director Grant1 [Member] | |||||||
Common stock issued | 310,000 | ||||||
Fair value | 238,700 | ||||||
Stock compensation expense | 238,700 | ||||||
October Director Grant2 [Member] | |||||||
Common stock issued | 194,805 | ||||||
Fair value | 150,000 | ||||||
Stock compensation expense | 19,672 | ||||||
October Management Grant [Member] | |||||||
Common stock issued | 20,000 | ||||||
Fair value | 15,400 | ||||||
EquityFinancing Investor [Member] | |||||||
Common stock issued | 4,714,025 | ||||||
Preferred stock issued | 500,000 | ||||||
Conversion ratio | 1-to-1 ratio | ||||||
Gross Proceeds from sale of stock | 5,735,427 | ||||||
Proceeds from conversion of outstanding convertible notes | 4,092,427 | ||||||
Principal amount of notes converted | 3,357,000 | ||||||
Net Proceeds from sale of stock | 1,643,000 | ||||||
Fees payable to investor | 100,000 | ||||||
Proceeds expected | 1,000,000 | ||||||
EquityFinancing Investor 2 [Member] | |||||||
Common stock issued | 374,257 | ||||||
Shares acquired | 1,069,305 | ||||||
Fair value | 256,633 |
STOCK_OPTIONS_Details
STOCK OPTIONS (Details) (USD $) | 9 Months Ended | 12 Months Ended |
Nov. 30, 2014 | Feb. 28, 2014 | |
Options Outstanding | ||
Outstanding at Beginning of Period | 2,680,000 | 1,116,500 |
Granted | 15,653,500 | |
Forfeited | 425,000 | |
Outstanding and expected to vest at End of Period | 2,855,000 | 2,680,000 |
Exercisable at End of period | 170,500 | 1,820,000 |
Weighted Average Exercise Price | ||
Outstanding at Beginning of Period | $1.70 | $0.68 |
Granted | $2.42 | |
Exercised | ||
Forfeited | $1.59 | |
Expired | ||
Outstanding and expected to vest at End of Period | $1.59 | $1.70 |
Exercisable at End of period | $1.79 | $1.89 |
Outstanding at Beginning of Period | $599,025 | |
Granted | ||
Exercised | ||
Forfeited | ||
Expired | ||
Outstanding and expected to vest at End of Period | 599,025 | |
Exercisable at End of period | $599,025 | |
Weighted Average Remaining Contractual Term | ||
Outstanding and expected to vest at End of Period | 8 years 5 months 27 days | 8 years 9 months 11 days |
Exercisable at End of period | 7 years 9 months 22 days | 8 years 6 months 11 days |
STOCK_OPTIONS_Details_2
STOCK OPTIONS (Details 2) (USD $) | 9 Months Ended | 12 Months Ended | |
Nov. 30, 2014 | Feb. 28, 2014 | Feb. 28, 2013 | |
Options Outstanding | |||
Outstanding at Beginning of Period | 2,680,000 | 1,116,500 | |
Forfeited | 425,000 | ||
Issued | 600,000 | ||
Outstanding and expected to vest at End of Period | 2,855,000 | 2,680,000 | |
Exercisable at End of period | 170,500 | 1,820,000 | |
Weighted Average Exercise Price | |||
Outstanding at Beginning of Period | $1.70 | $0.68 | |
Granted | $2.42 | ||
Exercised | |||
Forfeited | $1.59 | ||
Issued | $1.10 | ||
Expired | |||
Outstanding and expected to vest at End of Period | $1.59 | $1.70 | |
Exercisable at End of period | $1.79 | $1.89 | |
Granted | |||
Exercised | |||
Forfeited | |||
Expired | |||
Outstanding and expected to vest at End of Period | 599,025 | ||
Exercisable at End of period | $599,025 | ||
Weighted Average Remaining Contractual Term | |||
Outstanding and expected to vest at End of Period | 8 years 5 months 27 days | 8 years 9 months 11 days | |
Exercisable at End of period | 7 years 9 months 22 days | 8 years 6 months 11 days |
STOCK_OPTIONS_Details_Narrativ
STOCK OPTIONS (Details Narrative) (USD $) | 9 Months Ended | 12 Months Ended | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2014 | Feb. 28, 2014 | Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2013 | Feb. 28, 2013 | |
Reserved for issuance | 3,116,789 | |||||
Remain available for issuance | 33,776 | |||||
Stock option expected term | 7 years 9 months 22 days | 8 years 6 months 11 days | ||||
Outstanding options exercisable/vested | $1.59 | $1.70 | $1.59 | $0.68 | ||
Outstanding options price per share | $1.79 | $1.89 | $1.79 | |||
Unrecognized compensation expense | $270,274 | $270,274 | $270,274 | |||
Unmeasured compensation shares | 550,000 | 550,000 | ||||
General and Administrative Expense [Member] | ||||||
Stock option expense | 1,540,884 | |||||
Research and Development Expense [Member] | ||||||
Stock option expense | 106,688 | |||||
Option $0.68 [Member] | ||||||
Stock options issued | 11,116,500 | |||||
Stock option price per share | $0.68 | |||||
Stock option discount rate | 1.98% | |||||
Stock option expected term | 10 years | |||||
Stock option expected volatility | 403.00% | |||||
Stock option expected dividends | ||||||
Outstanding options exercisable/vested | $841,500 | $896,500 | $841,500 | |||
Outstanding options price per share | $0.68 | $0.68 | $0.68 | |||
Outstanding options weighted average life | 7 years 1 month 9 days | 7 years 10 months 12 days | ||||
Outstanding options not yet vested | 220,000 | |||||
Outstanding options weighted average life, Nonvested | 7 years 10 months 12 days | |||||
Option $3.25 (1) [Member] | ||||||
Stock options issued | 300,000 | 300,000 | ||||
Stock option price per share | $3.25 | $3.25 | ||||
Stock option discount rate | 0.68% | 0.68% | ||||
Stock option expected term | 5 years 3 months | 5 years 3 months | ||||
Stock option expected volatility | 128.90% | 129.00% | ||||
Stock option expected dividends | 0 | 0 | ||||
Stock option expense | 632,794 | 158,199 | 316,398 | |||
Outstanding options weighted average life | 9 years 9 months 16 days | |||||
Option $3.25 (2) [Member] | ||||||
Stock options issued | 523,500 | 523,500 | ||||
Stock option price per share | $3.25 | $3.25 | ||||
Stock option discount rate | 2.59% | 2.56% | ||||
Stock option expected term | 9 years 5 months 28 days | 9 years 7 months 6 days | ||||
Stock option expected volatility | 123.60% | 125.00% | ||||
Stock option expected dividends | 0 | 0 | ||||
Stock option expense | 872,528 | 180,599 | 710,912 | |||
Option $3.25 [Member] | ||||||
Outstanding options exercisable/vested | $823,500 | |||||
Outstanding options price per share | $3.25 | |||||
Option $1.50 (1) [Member] | ||||||
Stock options issued | 190,000 | |||||
Stock option price per share | $1.50 | |||||
Stock option discount rate | 1.12% | |||||
Stock option expected term | 10 years | |||||
Stock option expected volatility | 121.50% | |||||
Stock option expected dividends | 0 | |||||
Outstanding options weighted average life | 9 years 9 months 16 days | |||||
Outstanding options weighted average life, Nonvested | 9 years 9 months 16 days | |||||
Option $1.50 (2) [Member] | ||||||
Stock options issued | 550,000 | |||||
Stock option price per share | $1.50 | |||||
Stock option discount rate | 1.12% | |||||
Stock option expected term | 10 years | |||||
Stock option expected volatility | 121.50% | |||||
Stock option expected dividends | 0 | |||||
Stock option expense | $142,250 | |||||
Outstanding options exercisable/vested | $190,000 | $100,000 | $190,000 | |||
Outstanding options price per share | $1.36 | $1.36 | ||||
Outstanding options weighted average life | 9 years 0 months 18 days | |||||
Outstanding options not yet vested | 950,000 | 450,000 | 950,000 | |||
Outstanding options weighted average life, Nonvested | 9 years 4 months 24 days | |||||
Option $1.50 (Aggregate) [Member] | ||||||
Outstanding options exercisable/vested | $100,000 | |||||
Outstanding options not yet vested | 640,000 |
STOCK_OPTIONS_Details_Narrativ1
STOCK OPTIONS (Details Narrative 2) (USD $) | 9 Months Ended | 12 Months Ended | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2014 | Feb. 28, 2014 | Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2013 | Feb. 28, 2013 | |
Stock option expected term | 7 years 9 months 22 days | 8 years 6 months 11 days | ||||
Outstanding options exercisable/vested | $1.59 | $1.70 | $1.59 | $0.68 | ||
Outstanding options price per share | $1.79 | $1.89 | $1.79 | |||
Unrecognized compensation expense | $270,274 | $270,274 | $270,274 | |||
Unmeasured compensation shares | 550,000 | 550,000 | ||||
Option $3.25 (1) [Member] | ||||||
Stock options issued | 300,000 | 300,000 | ||||
Stock option price per share | $3.25 | $3.25 | ||||
Stock options fair value | 632,794 | |||||
Stock option discount rate | 0.68% | 0.68% | ||||
Stock option expected term | 5 years 3 months | 5 years 3 months | ||||
Stock option expected volatility | 128.90% | 129.00% | ||||
Stock option expected dividends | 0 | 0 | ||||
Stock option expense | 632,794 | 158,199 | 316,398 | |||
Outstanding options weighted average life | 9 years 9 months 16 days | |||||
Option $3.25 (2) [Member] | ||||||
Stock options issued | 523,500 | 523,500 | ||||
Stock option price per share | $3.25 | $3.25 | ||||
Stock options fair value | 891,512 | |||||
Stock option discount rate | 2.59% | 2.56% | ||||
Stock option expected term | 9 years 5 months 28 days | 9 years 7 months 6 days | ||||
Stock option expected volatility | 123.60% | 125.00% | ||||
Stock option expected dividends | 0 | 0 | ||||
Stock option expense | 872,528 | 180,599 | 710,912 | |||
Non-Employee Options [Member] | ||||||
Stock options vested | 220,000 | 220,000 | ||||
Stock options fair value | 232,000 | 232,000 | ||||
Stock option expense | 0 | 0 | ||||
Employee Stock Option [Member] | ||||||
Stock options vested | 90,000 | 90,000 | ||||
Stock options fair value | 127,000 | 127,000 | ||||
Stock option expense | 72,000 | 127,000 | ||||
Unrecognized compensation expense | 119,607 | 119,607 | ||||
Unrecognized compensation expense contingent on milestones | 240,000 | 240,000 | ||||
Director Options [Member] | ||||||
Stock options cancelled | 100,000 | 100,000 | ||||
Stock option price per share | $3.25 | $3.25 | ||||
Management Options [Member] | ||||||
Stock options issued | 600,000 | 600,000 | ||||
Stock option price per share | $1.10 | $1.10 | ||||
Stock options fair value | 368,002 | 368,002 | ||||
Stock option discount rate | 16.60% | |||||
Stock option expected term | 10 years | |||||
Stock option expected volatility | 116.00% | |||||
Stock option expected dividends | 0 | |||||
Stock option expense | 8,393 | 8,393 | ||||
Option $0.68 [Member] | ||||||
Stock options issued | 11,116,500 | |||||
Stock option price per share | $0.68 | |||||
Stock option discount rate | 1.98% | |||||
Stock option expected term | 10 years | |||||
Stock option expected volatility | 403.00% | |||||
Stock option expected dividends | ||||||
Outstanding options exercisable/vested | $841,500 | $896,500 | $841,500 | |||
Outstanding options price per share | $0.68 | $0.68 | $0.68 | |||
Outstanding options weighted average life | 7 years 1 month 9 days | 7 years 10 months 12 days | ||||
Outstanding options not yet vested | 220,000 | |||||
Outstanding options weighted average life, Nonvested | 7 years 10 months 12 days | |||||
Option $1.50 (2) [Member] | ||||||
Stock options issued | 550,000 | |||||
Stock option price per share | $1.50 | |||||
Stock option discount rate | 1.12% | |||||
Stock option expected term | 10 years | |||||
Stock option expected volatility | 121.50% | |||||
Stock option expected dividends | 0 | |||||
Stock option expense | $142,250 | |||||
Outstanding options exercisable/vested | $190,000 | $100,000 | $190,000 | |||
Outstanding options price per share | $1.36 | $1.36 | ||||
Outstanding options weighted average life | 9 years 0 months 18 days | |||||
Outstanding options not yet vested | 950,000 | 450,000 | 950,000 | |||
Outstanding options weighted average life, Nonvested | 9 years 4 months 24 days |
WARRANTS_Details
WARRANTS (Details) (Warrants [Member], USD $) | 9 Months Ended | 12 Months Ended |
Nov. 30, 2014 | Feb. 28, 2014 | |
Warrants [Member] | ||
Warrants Outstanding | ||
Outstanding at Beginning of Period | 3,146,355 | 2,732,072 |
Issued | 3,246,000 | 414,281 |
Outstanding at End of Period | 6,392,355 | 3,146,355 |
Weighted Average Exercise Price | ||
Outstanding at Beginning of Period | $1.24 | $1.13 |
Outstanding at End of Period | $1.37 | $1.24 |
Average Intrensic Value | ||
Outstanding at Beginning of Period | ||
Issued | ||
Outstanding at End of Period |
WARRANTS_Details_1
WARRANTS (Details 1) (USD $) | Nov. 30, 2014 | Feb. 28, 2014 | Feb. 28, 2013 |
Exercise prices | $1.59 | $1.70 | $0.68 |
Number of shares | 2,855,000 | 2,680,000 | 1,116,500 |
WarrantExercisableOneMember | |||
Exercise prices | $0.68 | ||
Number of shares | 220,000 | ||
Exercisable number of shares | 220,000 | ||
WarrantExercisableTwoMember | |||
Exercise prices | $0.91 | ||
Number of shares | 1,497,122 | ||
Exercisable number of shares | 1,497,122 | ||
WarrantExercisableThreeMember | |||
Exercise prices | $1.40 | ||
Number of shares | 786,250 | ||
Exercisable number of shares | 786,250 | ||
WarrantExercisableFourMember | |||
Exercise prices | $1.50 | ||
Number of shares | 150,000 | ||
Exercisable number of shares | 150,000 | ||
WarrantExercisableFiveMember | |||
Exercise prices | $2.10 | ||
Number of shares | 447,001 | ||
Exercisable number of shares | 447,001 | ||
WarrantExercisableSixMember | |||
Exercise prices | $2.50 | ||
Number of shares | 25,980 | ||
Exercisable number of shares | 25,980 | ||
WarrantExercisableSeven [Member] | |||
Exercise prices | $3 | ||
Number of shares | 20,000 | ||
Exercisable number of shares | 20,000 |
WARRANTS_Details_2
WARRANTS (Details 2) (Warrant [Member], USD $) | 9 Months Ended | 12 Months Ended |
Nov. 30, 2014 | Feb. 28, 2014 | |
Warrant [Member] | ||
Warrants Outstanding | ||
Outstanding at Beginning of Period | 3,146,355 | 2,732,072 |
Issued | 3,246,000 | 414,281 |
Outstanding at End of Period | 6,392,355 | 3,146,355 |
Weighted Average Exercise Price | ||
Outstanding at Beginning of Period | $1.24 | $1.13 |
Issued | $1.50 | |
Outstanding at End of Period | $1.37 | $1.24 |
Average Intrensic Value | ||
Outstanding at Beginning of Period | ||
Issued | ||
Outstanding at End of Period | ||
Weighted Average Remaining Contractual Term | ||
Issued | 3 years 7 months 17 days | |
Outstanding at End of Period | 2 years 11 months 5 days |
WARRANTS_Details_Narrative
WARRANTS (Details Narrative) (USD $) | 9 Months Ended | 12 Months Ended |
Nov. 30, 2014 | Feb. 28, 2014 | |
Expected term | 7 years 9 months 22 days | 8 years 6 months 11 days |
WarrantExercisableOne [Member] | ||
Shares issued | 220,000 | |
Exercise price | 0.68 | |
Discount rate | 0.91% | |
Expected term | 5 years | |
Expected volatility | 403.00% | |
Expected dividends | 0 | |
WarrantExercisableTwo [Member] | ||
Shares issued | 1,497,122 | |
Exercise price | 0.91 | |
Equity Issuance 8 [Member] | ||
Shares issued | 216,250 | |
Exercise price | 1.4 | |
Equity Issuance 9 [Member] | ||
Shares issued | 350,000 | |
Exercise price | 1.4 | |
WarrantExercisable Four [Member] | ||
Shares issued | 150,000 | |
Exercise price | 1.5 | |
Discount rate | 0.63% | |
Expected term | 4 years | |
Expected volatility | 420.00% | |
Expected dividends | 0 | |
Equity Issuance 10 [Member] | ||
Shares issued | 220,000 | |
Exercise price | 1.4 | |
Equity Issuance 11 [Member] | ||
Shares issued | 78,700 | |
Equity Issuance 12 [Member] | ||
Shares issued | 17,500 | |
Exercise price | 2.5 | |
Discount rate | 0.11% | |
Expected term | 4 years | |
Expected volatility | 121.00% | |
Expected dividends | 0 | |
Equity Issuance 13 [Member] | ||
Shares issued | 295,833 | |
Equity Issuance 14 [Member] | ||
Shares issued | 8,480 | |
Exercise price | 2.5 | |
Discount rate | 0.74% | |
Expected term | 5 years | |
Expected volatility | 134.00% | |
Expected dividends | 0 |
WARRANTS_Details_Narrative_2
WARRANTS (Details Narrative 2) (USD $) | 9 Months Ended | 12 Months Ended | |
Nov. 30, 2014 | Nov. 30, 2013 | Feb. 28, 2014 | |
Granted Warrants | 15,653,500 | ||
Expected dividends | $127,289 | $199,234 | |
Warrant Issuance 1 [Member] | |||
Granted Warrants | 25,000 | ||
Exercise prices | $2.10 | ||
Warrant expiration date | 4-Mar-19 | ||
Warrant Issuance 2 [Member] | |||
Granted Warrants | 155,000 | ||
Exercise prices | $1.50 | ||
Warrant expiration date | 26-Jun-19 | ||
Warrant Issuance 3 [Member] | |||
Granted Warrants | 3,066,000 | ||
Exercise prices | $1.50 | ||
Warrant expiration date | 30-Jun-18 | ||
Placement Agent [Member] | |||
Granted Warrants | 8,480 | ||
Warrant term | 5 years | ||
Fair value | 25,498 | ||
Discount rate | 74.00% | ||
Expected volatility | 134.00% | ||
Expected dividends | $0 | ||
Warrant [Member] | |||
Granted Warrants | 70,000 | ||
Exercise prices | $3 | ||
Warrant expiration date | 14-May-17 |
CONVERTIBLE_NOTES_Details
CONVERTIBLE NOTES (Details) (USD $) | 9 Months Ended | 12 Months Ended | 55 Months Ended | |
Nov. 30, 2014 | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | |
Convertible Notes Details | ||||
Fair value of Amended 2013 Notes | $1,243,482 | |||
Fair value of non-cash consideration issued to the creditor | 269,707 | |||
Reacquisition price | 1,513,189 | |||
Carrying value of the debt at modification | 1,480,336 | |||
Loss on extinguishment | $32,853 | $32,853 | $32,853 |
CONVERTIBLE_NOTES_Details_Narr
CONVERTIBLE NOTES (Details Narrative) (USD $) | 9 Months Ended | 12 Months Ended | |
Nov. 30, 2014 | Nov. 30, 2013 | Feb. 28, 2014 | |
Loss on extinguishment of debt | ($1,480,336) | ||
Debt discount due to beneficial conversion feature | 173,035 | 629,332 | |
Accretion - discount | 379,672 | 559,496 | |
Principal repaid | 100,000 | ||
2013 Notes (1) [Member] | |||
Convertible promissory notes issued | 1,487,000 | 700,000 | |
Warrants issued | 70,000 | ||
Warrant exercise price | $3 | ||
Amended exercise price | $2.10 | ||
Amended note principal balance | 1,387,000 | ||
Shares issued pursuant to amendment | 92,468 | ||
Loss on extinguishment of debt | 32,853 | ||
Weighted average fair value | $1 | ||
Discount rate | 0.63% | ||
Expected term | 4 years | ||
Volatility rate | 129.00% | ||
Warrants valued at a discount to convertible debt | 71,543 | ||
Accretion - discount | 752,762 | ||
Principal repaid | 100,000 | ||
Convertible note maturity date | 31-Dec-13 | ||
Gross proceeds minimum aggregate | 3,500,000 | 3,500,000 | |
Per security price of securities sold in Qualified Financing | $1.15 | $1.15 | |
Conversion price right | $2.50 | $2.50 | |
Amended conversion price | $1.50 | ||
The 2013 Notes (2) [Member] | |||
Convertible promissory notes issued | 148,700 | 787,000 | |
Warrants issued | 78,700 | ||
Warrant exercise price | $3 | ||
Expected term | 4 years | ||
Accretion - discount | 77,207 | ||
Convertible note maturity date | 31-Dec-13 | ||
Gross proceeds minimum aggregate | 3,500,000 | 3,500,000 | |
Per security price of securities sold in Qualified Financing | $1.15 | $1.15 | |
Conversion price right | $2.50 | ||
2014 Notes (1) [Member] | |||
Convertible promissory notes issued | 500,000 | 500,000 | |
Warrants issued | 83,333 | 83,333 | |
Warrant exercise price | $2.10 | $2.10 | |
Weighted average fair value | $1.48 | ||
Discount rate | 0.88% | ||
Expected term | 4 years | ||
Volatility rate | 129.00% | ||
Warrants valued at a discount to convertible debt | 357,145 | ||
Debt discount due to beneficial conversion feature | 532,210 | ||
Accretion - discount | 1,500,000 | ||
Convertible note maturity date | 31-May-14 | ||
Gross proceeds minimum aggregate | 3,500,000 | 3,500,000 | |
Per security price of securities sold in Qualified Financing | $1.15 | $1.15 | |
Conversion price right | $1.50 | $1.50 | |
The 2014 Notes (2) [Member] | |||
Convertible promissory notes issued | 855,000 | 855,000 | |
Warrants issued | 142,500 | 142,500 | |
Warrant exercise price | $2.10 | $2.10 | |
Gross proceeds minimum aggregate | $5,000,000 | $5,000,000 | |
Per security price of securities sold in Qualified Financing | $1.15 | $1.15 | |
Conversion price right | $1.50 | $1.50 |
CONVERTIBLE_NOTES_Details_Narr1
CONVERTIBLE NOTES (Details Narrative 2) (USD $) | 9 Months Ended | 12 Months Ended | 55 Months Ended | ||
Nov. 30, 2014 | Nov. 30, 2013 | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | |
Loss on extinguishment of debt | ($1,480,336) | ||||
Debt discount due to beneficial conversion feature | 173,035 | 629,332 | |||
Accretion | 159,647 | ||||
Accretion - discount | 379,672 | 559,496 | |||
Principal repaid | 100,000 | ||||
Accrued interest | 201,000 | ||||
Loss on extinguishment | 32,853 | 32,853 | 32,853 | ||
Automatic conversion of convertible promissory notes | 3,357,000 | ||||
Beneficial conversion expense | 2,324,760 | ||||
Detachable warrants weighted average fair value | 127,289 | 199,234 | |||
2013 Notes (1) [Member] | |||||
Convertible promissory notes issued | 1,487,000 | 700,000 | |||
Convertible note interest rate | 8.00% | ||||
Warrants issued | 70,000 | ||||
Warrant exercise price | $3 | $3 | |||
Amended exercise price | $2.10 | $2.10 | |||
Amended note principal balance | 1,387,000 | ||||
Shares issued pursuant to amendment | 92,468 | ||||
Loss on extinguishment of debt | 32,853 | ||||
Weighted average fair value | $1 | $1 | |||
Discount rate | 0.63% | ||||
Expected term | 4 years | ||||
Volatility rate | 129.00% | ||||
Warrants valued at a discount to convertible debt | 71,543 | ||||
Accretion - discount | 752,762 | ||||
Principal repaid | 100,000 | ||||
Convertible note maturity date | 31-Dec-13 | ||||
Gross proceeds minimum aggregate | 3,500,000 | 3,500,000 | |||
Per security price of securities sold in Qualified Financing | $1.15 | $1.15 | |||
Conversion price right | $2.50 | $2.50 | $2.50 | ||
Amended conversion price | $1.50 | $1.50 | |||
The 2013 Notes (2) [Member] | |||||
Convertible promissory notes issued | 148,700 | 787,000 | |||
Warrants issued | 78,700 | ||||
Warrant exercise price | $3 | ||||
Expected term | 4 years | ||||
Accretion - discount | 77,207 | ||||
Convertible note maturity date | 31-Dec-13 | ||||
Gross proceeds minimum aggregate | 3,500,000 | 3,500,000 | |||
Per security price of securities sold in Qualified Financing | $1.15 | $1.15 | |||
Conversion price right | $2.50 | ||||
The 2013 Notes (3) [Member] | |||||
Convertible promissory notes issued | 1,387,000 | ||||
Warrant exercise price | $3 | ||||
Amended exercise price | $2.10 | ||||
Amended note principal balance | 128,700 | ||||
Shares issued pursuant to amendment | 92,468 | ||||
Loss on extinguishment of debt | 32,853 | ||||
Expected term | 4 years | ||||
Principal repaid | 100,000 | ||||
Accrued interest | 8,828 | ||||
Amended conversion price | $1.50 | ||||
2014 Notes (1) [Member] | |||||
Convertible promissory notes issued | 500,000 | 500,000 | |||
Convertible note interest rate | 8.00% | ||||
Warrants issued | 83,333 | 83,333 | |||
Warrant exercise price | $2.10 | $2.10 | $2.10 | ||
Weighted average fair value | $1.48 | $1.48 | |||
Discount rate | 0.88% | ||||
Expected term | 4 years | ||||
Volatility rate | 129.00% | ||||
Warrants valued at a discount to convertible debt | 357,145 | ||||
Debt discount due to beneficial conversion feature | 532,210 | ||||
Accretion - discount | 1,500,000 | ||||
Convertible note maturity date | 31-May-14 | ||||
Gross proceeds minimum aggregate | 3,500,000 | 3,500,000 | |||
Per security price of securities sold in Qualified Financing | $1.15 | $1.15 | |||
Conversion price right | $1.50 | $1.50 | $1.50 | ||
The 2014 Notes (2) [Member] | |||||
Convertible promissory notes issued | 855,000 | 855,000 | |||
Convertible note interest rate | 8.00% | ||||
Warrants issued | 142,500 | 142,500 | |||
Warrant exercise price | $2.10 | $2.10 | $2.10 | ||
Gross proceeds minimum aggregate | 5,000,000 | 5,000,000 | |||
Per security price of securities sold in Qualified Financing | $1.15 | $1.15 | |||
Conversion price right | $1.50 | $1.50 | $1.50 | ||
Additional Notes [Member] | |||||
Convertible promissory notes issued | 150,000 | ||||
Warrants issued | 25,000 | ||||
Warrant exercise price | $2.10 | ||||
Gross proceeds minimum aggregate | 5,000,000 | ||||
Per security price of securities sold in Qualified Financing | $1.15 | ||||
Conversion price right | $1.50 | ||||
May 2014 Notes [Member] | |||||
Convertible promissory notes issued | 65,000 | ||||
Convertible note interest rate | 8.00% | ||||
Warrants issued | 155,000 | ||||
Warrant exercise price | $1.50 | ||||
Gross proceeds minimum aggregate | $5,000,000 | ||||
Per security price of securities sold in Qualified Financing | $1.15 |
FAIR_VALUE_MEASUREMENTS_Detail
FAIR VALUE MEASUREMENTS (Details Narrative) (USD $) | Feb. 28, 2014 |
Fair Value Disclosures [Abstract] | |
Fair value Level 2 Notes | $1,320,689 |
EQUIPMENT_Details
EQUIPMENT (Details) (USD $) | 12 Months Ended | ||
Feb. 28, 2014 | Nov. 30, 2014 | Feb. 28, 2013 | |
Equipment, gross | $238,446 | $65,722 | |
Accumulated depreciation and amortization | -34,192 | -74,450 | -12,396 |
Equipment, net | 204,254 | 548,244 | 53,326 |
Research Equipment [Member] | |||
Estimated useful life | P7Y | ||
Equipment, gross | 165,537 | ||
Computer Equipment [Member] | |||
Estimated useful life | P5Y | ||
Equipment, gross | $72,909 | $65,722 |
EQUIPMENT_Details_Narrative
EQUIPMENT (Details Narrative) (USD $) | 9 Months Ended | 12 Months Ended | 55 Months Ended | ||
Nov. 30, 2014 | Nov. 30, 2013 | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | |
Property, Plant and Equipment [Abstract] | |||||
Depreciation | $40,258 | $10,342 | $21,796 | $11,125 | $34,192 |
EQUIPMENT_Details_Narrative_2
EQUIPMENT (Details Narrative 2) (USD $) | 9 Months Ended |
Nov. 30, 2014 | |
Property, Plant and Equipment [Abstract] | |
Microscope purchase price | $318,603 |
Down payment for microscope | 21,115 |
Monthly payment | 10,260 |
Number of payments | 36 |
Security deposit | $238,952 |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details Narrative) (USD $) | 12 Months Ended |
Feb. 28, 2014 | |
Waterford [Member] | |
Proceeds from issuance of related party debt | $336,075 |
Shares issued following conversion of debt | 309,595 |
Consulting [Member] | |
Consulting fees | 110,000 |
Stock options issued | 165,000 |
Stock option price per share | $0.68 |
Consulting 2 [Member] | |
Consulting fees | $72,000 |
Stock options issued | 100,000 |
Stock option price per share | $3.25 |
SECURITIES_HELD_FOR_SALE_Detai
SECURITIES HELD FOR SALE (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 | |
Notes to Financial Statements | ||||
Shares received from Quantum | 4,800,000 | |||
Proceed minimum | $1,000,000 | |||
Receivable from investor | 1,000,000 | 1,000,000 | ||
Proceeds from sale of consideration shares | 1,142,926 | |||
Exchange shares | 1,069,305 | 1,069,305 | ||
Fair value of unsold consideration shares | 80,000 | 80,000 | ||
Loss on sale of securities | $33,707 | $33,707 |
NET_LOSS_PER_SHARE_Details
NET LOSS PER SHARE (Details) | 9 Months Ended | 12 Months Ended | ||
Nov. 30, 2014 | Nov. 30, 2013 | Feb. 28, 2014 | Feb. 28, 2013 | |
Anti-dilutive securities | 10,121,612 | 5,664,615 | 7,812,822 | 4,164,150 |
Stock Options [Member] | ||||
Anti-dilutive securities | 2,855,000 | 1,940,000 | 2,680,000 | 1,116,500 |
Warrants [Member] | ||||
Anti-dilutive securities | 6,392,355 | 2,893,887 | 3,146,355 | 2,732,074 |
Convertible Note [Member] | ||||
Anti-dilutive securities | 830,615 | |||
Series A Preferred Stock [Member] | ||||
Anti-dilutive securities | 874,257 |
NET_LOSS_PER_SHARE_Details_Nar
NET LOSS PER SHARE (Details Narrative) | 9 Months Ended | 12 Months Ended | ||
Nov. 30, 2014 | Nov. 30, 2013 | Feb. 28, 2014 | Feb. 28, 2013 | |
Anti-dilutive securities | 10,121,612 | 5,664,615 | 7,812,822 | 4,164,150 |
Restricted Stock [Member] | ||||
Anti-dilutive securities | 367,818 | 403,013 |
COMMITMENT_Details_Narrative
COMMITMENT (Details Narrative) (USD $) | 9 Months Ended | 12 Months Ended |
Nov. 30, 2014 | Feb. 28, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Lease term | 2 years | |
Lease expiration date | 31-Aug-16 | 31-Aug-14 |
Monthly rent payment, year one | $10,280 | |
Monthly rent payment, year two | 10,588 | |
Security deposit | $40,000 |
LICENSE_DEVELOPMENT_AND_COMMER1
LICENSE, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT WITH ASET THERAPEUTICS, LLC (Details Narrative) (USD $) | 9 Months Ended |
Nov. 30, 2014 | |
Investment amount received | $250,000 |
Reimbursement revenue | 75,000 |
Investment required by company | 1,000,000 |
Costs and Expenses [Member] | |
Reimbursement revenue | 150,000 |
Research and Development Expense [Member] | |
Reimbursement revenue | 75,000 |
Minimum [Member] | |
Other Commitment Due | 5,000 |
Investment amount received | 1,250,000 |
Equity ownership | 20.00% |
Maximum [Member] | |
Other Commitment Due | 25,000 |
Maximum [Member] | Costs and Expenses [Member] | |
Reimbursement revenue | $50,000 |
SUBSEQUENT_EVENTS_Details_Narr
SUBSEQUENT EVENTS (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Jun. 11, 2014 | Nov. 30, 2014 | Feb. 28, 2014 | |
Lease term | 6 months | 1 year | |
Rent payable | $5,700 | ||
Equipment down payment | 21,115 | ||
Equipment monthly payments | 10,260 | ||
AdditionalNotes [Member] | |||
Convertible promissory notes issued | 150,000 | ||
Warrants issued | 25,000 | ||
Warrants exercise price | $2.10 | ||
Additional Notes 2 [Member] | |||
Convertible promissory notes issued | 165,000 | ||
Warrants issued | 55,001 | ||
Warrants exercise price | $1.50 | ||
Aggregate gross proceeds | 165,000 | ||
Notes interest rate | 8.00% | ||
Convertible note maturity date | 15-Aug-14 | ||
Gross proceeds minimum aggregate | 5,000,000 | ||
Per security price of securities sold in Qualified Financing | $1.15 | ||
Investor Relations Agreements [Member] | |||
Services agreement retainer | 22,500 | ||
Monthly services agreement fee payable | 7,500 | ||
Restricted stock issued with services agreement | 50,000 | ||
Investor Relations Agreement (2) Member | |||
Restricted stock issued with services agreement | 250,000 | ||
Consulting agreement term | 6 months | ||
Cash fee payable following financing | 250,000 | ||
Proceeds from financings upon completion | 2,000,000 | ||
Equipment Purchase Agreement [Member] | |||
Equipment purchase agreement price | 318,603 | ||
Equipment down payment | 21,115 | ||
Equipment monthly payments | 10,260 | ||
Equipment security deposit | $238,952 |
SUBSEQUENT_EVENTS_Details_Narr1
SUBSEQUENT EVENTS (Details Narrative 2) (USD $) | 9 Months Ended | 1 Months Ended | |
Nov. 30, 2014 | Nov. 30, 2013 | Jan. 13, 2015 | |
Proceeds from sale of consideration shares | $1,142,926 | ||
Minimum [Member] | |||
Proceeds from sale of consideration shares | 2,235,000 | ||
Maximum [Member] | |||
Proceeds from sale of consideration shares | 3,492,500 | ||
Securities Sold under Agreements to Repurchase [Member] | |||
Unit sale price | $5,500 | ||
Series B price | $0.55 | ||
Series B shares issued | 229 | ||
Series B conversion feature | 2,286,363 | ||
Warrant price | $0.70 | ||
Warrants issued | 1,714,771 | ||
Proceeds from sale of consideration shares | 1,257,500 | ||
Conversion of debt | 90,000 | ||
Placement agent cash fee | 80,080 | ||
Placement agent warrants issued | 145,600 | ||
Placement agent expense allowance | $25,000 |