MetaStat (MTST) 10-Q 15 Jul 15 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	3 Months Ended
	May. 31, 2015	May. 21, 2015	Aug. 31, 2014
Document And Entity Information
Entity Registrant Name	MetaStat, Inc.
Entity Central Index Key	1,404,943
Document Type	10-Q
Document Period End Date	May 31, 2015
Amendment Flag	false
Current Fiscal Year End Date	--02-29
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			$ 13,967,296
Entity Common Stock, Shares Outstanding		27,630,052
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,016
Trading symbol	MTST

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	May. 31, 2015	Feb. 28, 2015
CURRENT ASSETS
Cash and cash equivalents	$ 1,032,563	$ 257,820
Prepaid expenses	159,860	$ 38,748
Assets held for sale	85,196
Total Current Assets	1,277,619	$ 296,568
Equipment (net of accumulated depreciation of $98,053 and $96,089, respectively)	514,487	526,606
Refundable deposits	281,052	278,952
TOTAL ASSETS	2,073,158	1,102,126
Current liabilities
Accounts payable	336,534	293,152
Accrued expense	129,179	4,565
Current portion of capital lease	$ 102,773	99,965
Accrued interest payable		2,351
Accrued dividends on Series B Preferred Stock	$ 45,530	16,767
Total Current Liabilities	614,016	416,800
Capital lease	142,870	169,676
Warrant liability	136,500	273,000
TOTAL LIABILITIES	893,386	859,476
STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock, ($0.0001 par value; 150,000,000 shares authorized; 27,630,052 and 27,470,960 shares issued and outstanding respectively)	2,763	2,747
Additional Paid-in-capital	20,974,978	18,962,965
Accumulated deficit	(19,798,056)	(18,723,149)
Total stockholders' equity	1,179,772	242,650
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 2,073,158	1,102,126
Series A Preferred Stock [Member]
STOCKHOLDERS' EQUITY (DEFICIT)
Series A convertible preferred stock ($0.0001 par value; 1,000,000 shares authorized; 874,257 and 874,257 shares issued and outstanding respectively); Series B convertible preferred stock ($0.0001 par value; 1,000 shares authorized; 621 and 229 shares issued and outstanding respectively)		$ 87
Series B Preferred Stock [Member]
STOCKHOLDERS' EQUITY (DEFICIT)
Series A convertible preferred stock ($0.0001 par value; 1,000,000 shares authorized; 874,257 and 874,257 shares issued and outstanding respectively); Series B convertible preferred stock ($0.0001 par value; 1,000 shares authorized; 621 and 229 shares issued and outstanding respectively)

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($)	May. 31, 2015	Feb. 28, 2015
STOCKHOLDERS' EQUITY
Preferred stock, shares authorized	10,000,000	10,000,000
Accumulated depreciation	$ 98,053	$ 96,089
Convertible debentures, discount		$ 206,636
Common stock, par value	$ 0.0001	$ .0001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	27,630,052	27,470,960
Common stock, shares outstanding	27,630,052	27,470,960
Series A Preferred Stock [Member]
STOCKHOLDERS' EQUITY
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, par value	$ 0.0001	$ .0001
Preferred stock, shares issued	874,257	874,257
Preferred stock, shares outstanding	874,257	874,257
Series B Preferred Stock [Member]
STOCKHOLDERS' EQUITY
Preferred stock, shares authorized	1,000	1,000
Preferred stock, par value	$ .0001	$ .0001
Preferred stock, shares issued	621	229
Preferred stock, shares outstanding	621	229

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	May. 31, 2015	May. 31, 2014
Revenue
Revenue
Total revenue
OPERATING EXPENSES
General & administrative	$ 948,895	$ 529,836
Research & development	219,327	258,747
Total Operating Expenses	1,168,222	788,583
OTHER EXPENSES (INCOME)
Interest expense	$ 4,917	58,673
Accretion expense		342,073
Deferred financing costs amortization		45,392
Other income, net	$ (169)	$ (2,637)
Change in fair value of warrant liability	(136,500)
Settlement expense	38,437
Total Other Expenses (Income)	(93,315)	$ 443,501
NET LOSS	(1,074,907)	(1,232,084)
Net loss	(2,197,660)	$ (1,232,084)
Deemed Dividend on Series B Preferred Stock issuance	(1,067,491)
Accrued dividends on Series B Preferred Stock	(55,262)
Loss attributable to common shareholders	$ (2,197,660)	$ (1,232,084)
Net loss per share, basic and diluted	$ (0.08)	$ (0.06)
Weighted average of shares outstanding	27,138,854	21,622,812

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	May. 31, 2015	May. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (1,074,907)	$ (1,232,084)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation	24,845	9,222
Share based compensation	$ 207,112	33,750
Accretion expense		$ 342,073
Change in fair value of warrant liability	$ (136,500)
Net changes in assets and liabilities
Other receivable		$ 20,000
Prepaid expenses	$ (13,862)	(21,427)
Deferred financing costs		45,392
Refundable deposit	$ (2,100)	(238,952)
Accounts payable	43,382	439,651
Accrued expenses	53,114	32,662
Interest payable	(2,351)	50,080
NET CASH USED IN OPERATING ACTIVITIES	(901,267)	(519,633)
Purchase of equipment	(97,922)	(7,533)
Net cash used in investing activities	$ (97,922)	(7,533)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of convertible notes		$ 225,000
Proceeds from issuance of common stock and warrants	$ (111,563)
Proceeds from issuance of Series B preferred stock and warrant, net	$ 1,945,244
Payment of convertible notes		$ (100,000)
Payment of short-term debt	$ (35,750)
Payment of capital lease obligation	(23,999)
NET CASH PROVIDED BY FINANCING ACTIVITIES	1,773,932	$ 125,000
Increase (decrease) in cash and cash equivalents	774,743	(402,166)
Cash at the beginning of the period	257,820	483,408
Cash at the end of the period	$ 1,032,563	81,242
Common stock issued for services not yet rendered (prepaid expense)		67,500
Issuance on lease financing for fixed assets		318,603
Financing of insurance premium through short-term debt	$ 107,250	93,840
Warrants issued with convertible notes		35,289
Beneficial conversion feature in convertible notes		$ 31,221
Warrants issued to placement agent	$ 158,441
Series B Preferred Stock accrued dividends	55,262
Series B Preferred PIK dividend	26,498
Reclassification of equipment to assets held for sale	$ 85,196

DESCRIPTION OF BUSINESS AND GOI

DESCRIPTION OF BUSINESS AND GOING CONCERN	3 Months Ended
	May. 31, 2015
Description Of Business And Going Concern
DESCRIPTION OF BUSINESS AND GOING CONCERN	MetaStat, Inc. (“we,” “us,” “our,” the “Company,” or “MetaStat”) is a pre-commercial 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 identify the aggressiveness and metastatic potential of primary tumors. The Company was incorporated on March 28, 2007 under the laws of the State of Nevada. Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, MetaStat Biomedical, Inc., a Delaware corporation and all significant intercompany balances have been eliminated by 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, 2015 included in the Company’s Annual Report on Form 10-K as filed with the United States Securities and Exchange Commission (“SEC”) on May 28, 2015. 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 May 31, 2015 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. In previous filings, the Company has reported as a “Development Stage Entity”. 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 elected to early adopt the presentation and disclosure provisions of ASU 2014-10 effective August 31, 2014. Going Concern The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has experienced net losses and negative cash flows from operations since its inception. The Company has sustained cumulative losses of $19,798,056 as of May 31, 2015 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.

CAPITAL STOCK

CAPITAL STOCK	3 Months Ended
	May. 31, 2015
Equity [Abstract]
CAPITAL STOCK	The Company has authorized 160,000,000 shares of capital stock, par value $0.0001 per share, of which 150,000,000 are shares of common stock and 10,000,000 are shares of “blank-check” preferred stock. Our board of directors (“Board”) is empowered, without stockholder approval, to issue preferred stock with dividend, liquidation, conversion, voting or other rights, which could adversely affect the voting power or other rights of the holders of common stock. The preferred stock could be utilized as a method of discouraging, delaying or preventing a change in control. Common Stock The holders of our common stock are entitled to one vote per share. In addition, the holders of our common stock will be entitled to receive ratably such dividends, if any, as may be declared by our Board out of legally available funds; however, the current policy of our Board is to retain earnings, if any, for operations and growth. Upon liquidation, dissolution or winding-up, the holders of our common stock will be entitled to share ratably in all assets that are legally available for distribution. Series A Convertible Preferred Stock Pursuant to the Certificate of Designation of Rights and Preferences of the Series A Preferred Stock (the “Series A Certificate of Designation”), the terms of the Series A Preferred Stock are as follows: Ranking The Series A Preferred Stock will rank senior to our common stock with respect to distributions of assets upon the liquidation, dissolution or winding up of the Company. Dividends The Series A Preferred Stock is 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 of the Series A Preferred Stock shall be entitled to receive out of the assets of the Company, whether such assets are capital or surplus, for each share of Series A Preferred Stock an amount equal to the fair market value as determined in good faith by the Board. Voluntary Conversion; Anti-Dilution Adjustments Each share of Series A Preferred Stock shall be convertible into one share of common stock (the “Series A Conversion Ratio”). The Series A 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 has 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. Series B Convertible Preferred Stock Pursuant to the Certificate of Designation of Rights and Preferences of the Series B Preferred Stock (the “Series B Certificate of Designation”), the terms of the Series B Preferred Stock are as follows: Ranking The Series B Preferred Stock will rank senior to the Company’s Series A Convertible Preferred Stock and common stock with respect to distributions of assets upon the liquidation, dissolution or winding up of the Company. Stated Value Each shares of Series B Preferred Stock will have a stated value of $5,500, subject to adjustment for stock splits, combinations and similar events (the “Stated Value”). Dividends Cumulative dividends on the Series B Preferred Stock accrue at the rate of 8% of the Stated Value per annum, payable quarterly on March 31, June 30, September 30, and December 31 of each year, from and after the date of the initial issuance. Dividends are payable in kind in additional shares of Series B Preferred Stock valued at the Stated Value or in cash at the sole option of the Company. At May 31, 2015 and February 28, 2015, the dividend payable to the holders of the Series B Preferred stocks amounted to approximately $45,530 and $16,767, respectively. During the three months ended May 31, 2015, the Company issued 4.818 shares of Series B Preferred Stock for payment of dividends amounting to $26,498. Liquidation Rights If the Company voluntarily or involuntarily liquidates, dissolves or winds up its affairs, each holder of the Series B Preferred Stock will be entitled to receive out of the Company’s assets available for distribution to stockholders, after satisfaction of liabilities to creditors, if any, but before any distribution of assets is made on the Series A Preferred Stock or common stock or any of the Company’s shares of stock ranking junior as to such a distribution to the Series B Preferred Stock, a liquidating distribution in the amount of the Stated Value of all such holder’s Series B Preferred Stock plus all accrued and unpaid dividends thereon. At May 31 and February 28, 2015, the value of the liquidation preference of the Series B Preferred stocks aggregated to approximately $3,460,000 and $1,274,000, respectively. Conversion; Anti-Dilution Adjustments Each share of Series B Preferred Stock will be convertible at the holder’s option into common stock in an amount equal to the Stated Value plus accrued and unpaid dividends thereon through the conversion date divided by the then applicable conversion price. The initial conversion price is $0.55 per share (the “Series B Conversion Price”) and is subject to customary adjustments for issuances of shares of common stock as a dividend or distribution on shares of common stock, or mergers or reorganizations, as well as “full ratchet” anti-dilution adjustments for future issuances of other Company securities (subject to certain standard carve-outs) at prices less than the applicable Series B Conversion Price. The Series B Preferred Stock is subject to automatic conversion (the “Mandatory Conversion”) at such time when the Company’s common stock has been listed on a national stock exchange such as the NASDAQ, New York Stock Exchange or NYSE MKT; provided, that, on the Mandatory Conversion date, a registration statement providing for the resale of the shares of common stock underlying the Series B Preferred Stock is effective. In the event of a Mandatory Conversion, each share of Series B Preferred Stock will convert into the number of shares of common stock equal to the Stated Value plus accrued and unpaid dividends divided by the applicable Series B Conversion Price. Voting Rights On March 27, 2015, the holders of the Series B Preferred Stock entered into an Amended and Restated Series B Preferred Purchase Agreement, whereby the Company filed an Amended and Restated Series B Preferred Certificate of Designation. The Amended and Restated Series B Preferred Certificate of Designation provides that the holders of the Series B Preferred Stock shall be entitled to the number of votes equal to the number of shares of common stock into which such Series B Preferred Stock could be converted for purposes of determining the shares entitled to vote at any regular, annual or special meeting of stockholders of the Company, and shall have voting rights and powers equal to the voting rights and powers of the common stock (voting together with the common stock as a single class). Most Favored Nation For a period of up to 30 months after March 31, 2015, if the Company issues any New Securities (as defined below) in a private placement or public offering (a “Subsequent Financing”), the holders of Series B Preferred Stock may exchange all of the Series B Preferred Stock at their Stated Value plus all Series A Warrants (as defined below) issued to the Series B Preferred Stock investors in the Series B Private Placement for the securities issued in the Subsequent Financing on the same terms of such Subsequent Financing. This right expires upon the earlier of (i) September 30, 2017 and (ii) the consummation of a bona fide underwritten public offering in which the Company receives aggregate gross proceeds of at least $5,000,000. “New Securities” means shares of the common stock, any other securities, options, warrants or other rights where upon exercise or conversion the purchaser or recipient receives shares of the common stock, or other securities with similar rights to the common stock, subject to certain standard carve-outs. See Note 3 for the accounting treatment of the Series B Preferred Stock.

EQUITY TRANSACTIONS

EQUITY TRANSACTIONS	3 Months Ended
	May. 31, 2015
Equity [Abstract]
EQUITY TRANSACTIONS	Issuances of common stock for services During the three months ended May 31, 2014, the Company issued 50,000 shares of common stock to a consultant for services that vested immediately. The fair value of the shares amounted to $67,500 on the grant date. This transaction was recorded as a pre-paid expense of which $33,750 was expensed during the three months ended May 31, 2014. During the three months ended May 31, 2015, the Company issued an aggregate of 320,000 shares of common stock to consultants for services that vested immediately. The fair value of the shares amounted to $133,406 on the grant dates, which was recognized into general and administrative expense during the three months ended May 31, 2015. Settlement On April 1, 2015, the Company entered into a settlement agreement to settle a dispute with two affiliated security holders in which the Company paid $150,000, in exchange for the cancellation of all Company securities held by such parties, which included an aggregate of 160,908 shares of common stock, 25,000 common stock purchase warrants with an exercise price of $2.10 and 75,000 common stock purchase warrants with an exercise price of $1.50 Additionally, the Company reimbursed $3,000 of legal expenses to the two affiliated security holders. The Company recorded the fair value of the instruments as a reduction of equity as equity instruments were cancelled and recognized a settlement expense of $38,437 for the excess of the amount paid over the fair value of the cancelled equity instruments. Series B preferred stock financing – the Series B Private Placement The Company entered into an amended and restated securities purchase agreement (the “A&R Series B Purchase Agreement”) on March 27, 2015 and March 31, 2015 with a number of new and existing accredited investors (collectively, the “Series B Investors”) pursuant to which it sold $2,130,750 of Series B Preferred Stock convertible into common stock at $0.55 per share in a private placement (the “Series B Private Placement”). In addition, pursuant to the A&R Series B Purchase Agreement, the Company issued series A warrants (the “Series A Warrants”) to purchase up to 2,905,568 shares of common stock at an initial exercise price per share of $0.70 to the Series B Investors. The Series A Warrants expire on March 31, 2020. Pursuant to the closings of the Series B Private Placements in March 2015, the Company issued 387.4088 shares of Series B Preferred Stock convertible into 3,874,088 shares of common stock and Series A Warrants to purchase 2,905,568 shares of common stock for an aggregate purchase price of $2,130,750, of which $18,000 represents the exchange of stock-based compensation to a consultant that was to be settled in the form of shares of common stock and was settled is Series B Preferred Stock and Series A Warrants. As a result of the exchange, the Company recorded an additional $12,695 of stock-based compensation. In connection with the March 2015 closings of the Series B Private Placement, the placement agents were paid a total cash fee of $147,451 including expense allowances and reimbursements, and were issued an aggregate of 309,927 Series A Warrants. On the grant dates, the fair value of the placement agent warrants amounted to $158,441 and was recorded as a stock issuance cost. Net proceeds amounted to $1,945,244 after deducting offering expenses to be paid in cash, including the placement agent fees and legal fees and other expenses. Accounting for the Series B Preferred Stock The Company determined the Series B Preferred Stock should be classified as equity as it is not mandatorily redeemable, and there are no unconditional obligations in that (1) the Company must or may settle in a variable number of its equity shares and (2) the monetary value is predominantly (a) fixed, (b) varying with something other than the fair value of the Company’s equity shares or (c) varying inversely in relation to the Company’s equity shares. Because the Series B Preferred Stock contain certain embedded features that could affect the ultimate settlement of the Series B Preferred Stock, the Company analyzed the instrument for embedded derivatives that require bifurcation. The Company’s analysis began with determining whether the Series B Preferred Stock is more akin to equity or debt. The Company evaluated the following criteria/features in this determination: redemption, voting rights, collateral requirements, covenant provisions, creditor and liquidation rights, dividends, conversion rights and exchange rights. The Company determined that the preponderance of evidence suggests the Series B Preferred Stock was more akin to equity than to debt when evaluating the economic characteristics and risks of the entire Series B Preferred Stock, including the embedded features. The Company then evaluated the embedded features to determine whether their economic characteristics and risks were clearly and closely related to the economic characteristics and risks of the Series B Preferred Stock. Since, the Series B Preferred Stock was determined to be more akin to equity than debt, and the underlying that causes the value of the embedded features to fluctuate would be the value of the Company’s common stock, the embedded features were considered clearly and closely related to the Series B Preferred Stock. As a result, the embedded features would not need to be bifurcated from the Series B Preferred Stock. Any beneficial conversion features, related to the exercise of the Most Favored Nation exchange right or the application of the Mandatory Conversion provision, would be recognized upon the occurrence of the contingent events based on its intrinsic value at the commitment date. Accounting for the Series A Warrants The Company concluded the freestanding Series A Warrants were indexed to the Company’s common stock and should be classified in stockholder’s equity, based on their relative fair value. Allocation of Proceeds of the Series B Private Placement on March 27 and 31, 2015 The $2,130,750 proceeds from the Series B Private Placement on March 27 and 31, 2015 were allocated to the Series B Preferred Stock and Series A Warrant instruments based on their relative fair values. The Series B Preferred Stock was valued on an as-if-converted basis based on the underlying common stock. The Series A Warrants were valued using the Black-Scholes model with the following weighted-average input at the time of issuance: expected term of 5.0 years based on their contractual life, volatility of 125% based on the Company’s historical volatility and risk free rate of 1.4% based on the rate of the 5-years U.S. treasury bill. After allocation of the proceeds, the effective conversion price of the Series B Preferred Stock was determined to be beneficial and, as a result, the Company recorded a non-cash deemed dividend of $1,067,491 equal to the intrinsic value of the beneficial conversion feature. The Series B Registration Rights Agreement In connection with the closing of the Series B Private Placement, the Company entered into an amended and restated registration rights agreement (the “A&R Series B Registration Rights Agreement”) with the Series B Investors, in which the Company agreed to file a registration statement (the “Registration Statement”) with the Securities and Exchange Commission ("SEC") to register for resale the shares of common stock underlying the Series B Preferred Stock, the Series A Warrants and the Series B Warrants within 30 calendar days of the final closing date of March 31, 2015 (the “Filing Date”), and to have the registration statement declared effective within 120 calendar days of the Filing Date. If the Registration Statement has not been filed with the SEC on or before the Filing Date, the Company shall, on the business day immediately following the Filing Date, and each 15th day thereafter, make a payment to the Series B Investors as partial liquidated damages for such delay (together, the “Late Registration Payments”) equal to 2.0% of the purchase price paid for the Series B Preferred Stock then owned by the Series B Investors for the initial 15 day period and 1.0% of the purchase price for each subsequent 15 day period until the Registration Statement is filed with the SEC. Late Registration Payments will be prorated on a daily basis during each 15 day period and will be paid to the Series B Investors by wire transfer or check within five business days after the end of each 15 day period following the Filing Date. The Company filed the Registration Statement on Form S-1 with the SEC on April 10, 2015, and as a result no penalty was incurred.

STOCK OPTIONS

STOCK OPTIONS	3 Months Ended
	May. 31, 2015
Stock Options
STOCK OPTIONS	On June 22, 2015, our shareholders approved amending our Amended and Restated 2012 Omnibus Securities and Incentive Plan (the “2012 Incentive Plan”) to increase the number of authorized shares of common stock reserved for issuance under the 2012 Incentive Plan to a number not to exceed fifteen percent (15%) of the issued and outstanding shares of common stock on an as converted primary basis (the “As Converted Primary Shares”) on a rolling basis. For calculation purposes, the As Converted Primary Shares shall include all shares of common stock and all shares of common stock issuable upon the conversion of outstanding preferred stock and other convertible securities, but shall not include any shares of common stock issuable upon the exercise of options, warrants and other convertible securities issued pursuant to the 2012 Incentive Plan. The number of authorized shares of common stock reserved for issuance under the 2012 Incentive Plan shall automatically be increased concurrently with the Company’s issuance of fully paid and non- assessable shares of As Converted Primary Shares. Shares shall be deemed to have been issued under the 2012 Incentive Plan solely to the extent actually issued and delivered pursuant to an award. During the three months ended May 31, 2015, the Company issued options to purchase 100,000 shares of common stock at $0.75 per share to a consultant. The options vest upon achieving certain performance-based milestones and expire on March 1, 2025. The Company will measure the fair value of these options with vesting contingent on achieving certain performance-based milestones and recognize the compensation expense when vesting becomes probable. The fair value will be measured using a Black-Scholes model. During the three months ended May 31, 2015, 25,000 of these options vested based on achieving certain milestones and the Company recognized $8,000 in stock-based compensation in connection with these options. During the three months ended May 31, 2015, the Company issued options to purchase 1,200,000 shares of common stock at $0.55 per share to non-executive members of its Board. The options vest in three equal installments on each of May 18, 2016, May 18, 2017, and May 18, 2018 and expire on May 18, 2025. These options had a total fair value of $388,000 as calculated using the Black-Scholes model. During the three months ended May 31, 2015, the Company recognized $9,016 of compensation expense related to these options The weighted average inputs to the Black-Scholes model used to value the stock options granted during the three months ended May 31, 2015 are as follows: Expected volatility 123% Expected dividend yield 0.00% Weighted average risk-free interest rate 1.88% Expected Term 6.08 years During the three months ended May 31, 2015, 8,000 options previously issued to a member of the Company’s Scientific and Clinical Advisory Board were mutually cancelled by the parties. The member will continue to serve on the Company’s Scientific and Clinical Advisory Board without any equity compensation. The following table summarizes common stock options issued and outstanding: Options Weighted average exercise price Aggregate intrinsic value Weighted average remaining contractual life (years) Outstanding at February 28, 2015 2,810,000 $ 1.58 $ 20,670 8.29 Granted 1,300,000 0.55 - - Exercised - - - - Forfeited 8,000 0.54 - - Expired - - - - Outstanding and expected to vest at May 31, 2015 4,102,000 $ 1.26 $ - 8.65 Exercisable at May 31, 2015 1,769,000 $ 1.76 $ - 7.25 As of May 31, 2015, 8,000 options are exercisable at $0.54 per share with a weighted average life of 9.67 years, 841,500 options are exercisable at $0.68 per share with a weighted average life of 6.61 years, 25,000 options exercisable at $0.75 per share with a life of 9.75 years, 221,000 options are exercisable at $1.50 with a weighted average life of 8.75 years, and 673,500 options are exercisable at $3.25 with a weighted average life of 7.85 years. Additionally, the options that have yet to vest were as follows: 8,000 options exercisable at $0.54 per share with a weighted average life of 9.67 years; 1,200,000 options exercisable at $0.55 per share with a weighted average life of 9.97 years; 75,000 options are exercisable at $0.75 with a weighted average life of 9.75 years; 450,000 options are exercisable at $1.50 with a weighted average life of 8.55 years and 600,000 options are exercisable at $1.10 with a weighted average life of 9.38 years. As of May 31, 2015, we had $468,206 of unrecognized compensation related to employee and consultant stock options that are expected to vest over a weighted average period of 1.87 years and, $240,000 of unrecognized compensation related to employee stock options whose recognition is dependent on certain milestones to be achieved. Additionally, there were 525,000 stock options with a performance vesting condition that were granted to consultants which will be measured and recognized when vesting becomes probable.

WARRANTS

WARRANTS	3 Months Ended
	May. 31, 2015
Warrants
WARRANTS	For the three months ended May 31, 2014, the Company issued 50,000 warrants in connection with the issuance of convertible notes referenced in Note 6 below. These warrants were issued between March 4, 2014 and May 27, 2014, are exercisable at $1.50 per share and expire between March 4, 2019 and May 27, 2019. These warrants vest 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. In connection with the issuance of the convertible notes referenced in Note 6 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,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. For the three months ended May 31, 2015, the Company issued an aggregate of 2,905,568 Series A Warrants in connection with the issuances of Series B Preferred Stock in March 2015, referenced in Note 3. These Series A Warrants were issued on March 27 and 31, 2015, are exercisable at $0.70 per share and expire on March 31, 2020. The Series A Warrants vest immediately. The Series A Warrants do not contain any provision that would require liability treatment, therefore they were classified as equity in the Condensed Consolidated Balance Sheet. In connection with the issuances of the Series B Preferred Stock on March 27 and 31, 2015, the Company issued placement agent warrants to purchase an aggregate of 309,927 shares of common stock. These placement agent warrants had the same terms as the Series A Warrants and were issued on March 27, 2015, are exercisable at $0.70 per share and expire on March 31, 2020. These placement agent warrants vest immediately. The fair value of these warrants was determined to be $158,441, as calculated using the Black-Scholes model. Weighted-average assumptions used in the Black-Scholes model included: (1) a discount rate of 1.41%; (2) an expected term of 5.0 years; (3) an expected volatility of 125% and (4) zero expected dividends. For the three months ended May 31, 2015, the Company issued an aggregate of 18,750 warrants to a consultant for services. These warrants were issued on May 31, 2015 and expire on May 31, 2020. 8,333 of such warrants are exercisable at $1.00 per share and 10,417 of such warrants are exercisable at $1.25 per share. These warrants vest immediately. The fair value of these warrants was determined to be $4,771, as calculated using the Black-Scholes model. Average assumptions used in the Black-Scholes model included: (1) a discount rate of 1.49%; (2) an expected term of 5.0 years; (3) an expected volatility of 124 %; and (4) zero expected dividends. For the three months ended May 31, 2015, the Company recognized $4,771 of stock-based compensation for these warrants. For the three months ended May 31, 2015, 25,000 common stock purchase warrants with an exercise price of $2.10 and 75,000 common stock purchase warrants with an exercise price of $1.50 were repurchased and cancelled as part of a settlement of a dispute with two affiliated security holders (see Note 3). The following table summarizes common stock purchase warrants issued and outstanding: Warrants Weighted average exercise price Aggregate intrinsic value Weighted average remaining contractual life (years) Outstanding at February 28, 2015 8,707,726 $ 1.19 $ 72,250 3.33 Granted 3,234,245 0.70 - - Exercised - - - - Cancelled 100,000 1.65 - - Expired - - - - Outstanding at May 31, 2015 11,841,971 $ 1.05 $ - 3.56 Warrants exercisable at May 31, 2015 are: Exercise prices Number of shares Weighted average remaining life (years) Exercisable number of shares $ 0.55 455,000 4.84 455,000 $ 0.68 220,000 1.46 220,000 $ 0.70 5,075,866 4.84 5,075,866 $ 0.91 1,497,124 1.67 1,497,124 $ 1.00 8,333 5.00 8,333 $ 1.25 10,417 5.00 10,417 $ 1.40 786,250 1.24 786,250 $ 1.50 3,296,000 3.02 3,296,000 $ 2.10 447,001 2.87 447,001 $ 2.50 25,980 2.62 25,980 $ 3.00 20,000 1.67 20,000

CONVERTIBLE NOTES

CONVERTIBLE NOTES	3 Months Ended
	May. 31, 2015
Debt Disclosure [Abstract]
CONVERTIBLE 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”). 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”). The Company determined the Amendments constituted a substantive modification of the 2013 Notes and, as a result, we accounted for this transaction as extinguishment of debt instrument and recorded the amended 2013 Notes at their fair value, amounted to $1,243,482, based on level 2 inputs, specifically prices for a subsequent issuance of comparable debt instruments. During the three months ended May 31, 2015 and 2014, we recorded $0 and $120,399 of accretion expense related to the amended 2013 Notes. 2014 Notes During the three months ended May 31, 2014, the Company issued additional 2014 Notes (as defined below) in the aggregate principal amount of $225,000 with 25,000 detachable warrants that can be exercised at $1.50 per share within a five-year period and 25,000 detachable warrants that can be exercised at $2.10 per share within a four-year period. The promissory notes originally due June 30 and August 15, 2014 (the “2014 Notes”) bore interest at the rate of 8% per annum and ranked pari passu Debt Discount and beneficial conversion feature The detachable warrants issued in connection with the convertible notes were recorded as a debt discount based on their relative fair value. The relative fair value of the warrants and the intrinsic value of the beneficial conversion feature for the convertible notes issued during the three months ended May 31, 2014 totaled $66,510, and was recorded as a discount to the convertible debt. During the three months ended May 31, 2015 and 2014, $0 and $221,674, respectively, was recognized as accretion expense related to the debt discount. Automatic Exchange of the Convertible Notes The Company completed the Qualified Financing on June 30, 2014, whereby all outstanding convertible notes were automatically exchanged into the securities offered in the Qualified Financing. As of May 31, 2015, the Company has no convertible notes outstanding.

LICENSE AGREEMENTS AND COMMITME

LICENSE AGREEMENTS AND COMMITMENTS	3 Months Ended
	May. 31, 2015
Research and Development [Abstract]
LICENSE AGREEMENTS AND COMMITMENTS	License Agreements In August 2010, we entered into a License Agreement (the “License Agreement”) with Einstein, MIT, Cornell and IFO-Regina. Pursuant to the License Agreement, we are required to make annual license maintenance fee payments beginning August 26, 2011. We have satisfied all license maintenance payments due through May 31, 2015 and are required to make payments of $50,000 in 2015, $75,000 in 2016 and $100,000 in 2017 and every year the license is in effect thereafter. These annual license maintenance fee payments will be credited to running royalties due on net sales earned in the same calendar year. Effective March 2012, we entered into a second license agreement dated January 3, 2012 (the “Second License Agreement”) with Einstein. Pursuant to the Second License Agreement, we are required to make annual license maintenance fee payments beginning on January 3, 2013. We have satisfied all license maintenance payments due through May 31, 2015 and are required to make additional payments of $30,000 in 2016, $50,000 in 2017, $75,000 in 2018 and $100,000 in 2019 and every year the license is in effect thereafter. These annual license maintenance fee payments will be credited to running royalties due on net sales earned in the same calendar year. Effective December 2013, we entered into a diagnostic license agreement (the “Alternative Splicing Diagnostic License Agreement”) with MIT and its David H. Koch Institute for Integrative Cancer Research at MIT and its Department of Biology, Einstein, and Montefiore Medical Center. Pursuant to the Alternative Splicing Diagnostic License Agreement, we are required to make annual license maintenance fee payments for each license beginning on January 1, 2015. We have satisfied the license maintenance payment of $10,000 for 2015. We are required to make additional payments of $15,000 in 2016, $25,000 in 2017, $37,500 in 2018, and $50,000 in 2019 and every year each license is in effect thereafter. These annual license maintenance fee payments will be credited to running royalties due on net sales earned in the same calendar year. Effective June 2014, we entered into a license agreement (the “Antibody License Agreement”) with MIT. Pursuant to the Antibody License Agreement, we are required to make license maintenance fee payments beginning on January 1, 2015. We have satisfied the license maintenance payment of $5,000 for 2015. We are required to make additional payments of $10,000 in 2016, $15,000 in 2017, $15,000 in 2018, and $20,000 in 2019 and every year the license is in effect thereafter. These annual license maintenance fee payments will be credited to running royalties due on net sales earned in the same calendar year. Lease Agreements On August 28, 2014, we entered into a lease agreement for our diagnostic laboratory and office space located in Boston, MA. The term of the lease is 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, we paid a $40,000 security deposit in connection with entering into the lease. Effective March 1, 2015 we entered into a lease agreement for a short-term office space in New York, NY. The term of the lease is month-to-month and may be terminated with twenty-one (21) days notice. The basic rent payment is $1,400 per month and we paid a $2,100 security deposit in connection with entering into the lease.

LICENSE, DEVELOPMENT AND COMMER

LICENSE, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT WITH ASET THERAPEUTICS, LLC	3 Months Ended
	May. 31, 2015
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 (see Note 6) 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. On June 22, 2015, effective May 31, 2015, the Company and ASET entered into a side letter that clarifies certain terms of the MOU including allowing for the equity investments in multiple tranches. In addition, the parties have mutually agreed to an extension of the $150,000 due the Company on March 1, 2015 in connection with the reimbursement the for certain costs. ASET issued an interest free promissory note to the Company in the aggregate amount of $150,000, payable in three installments of $50,000 each due on June 1, 2015, July 1, 2015 and August 1, 2015, respectively. The Company has received the first payment due June 1, 2015. ASET also issued the Company a promissory note in the principal amount of $75,000 for the purchase of the equipment and fixed assets of the Stony Brook, NY laboratory, which are presented as assets available for sale in the consolidated balance sheet. This note is interest free and matures on December 30, 2015. In the event the Company has purchased at least $925,000 in equity of ASET prior to December 30, 2015, then the Company may use this note as payment for its remainder purchase of equity in ASET. 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. 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. We determined that we are not the primary beneficiary of ASET based primarily on the facts that we do not have the power to direct ASET’s operations nor do we have any obligation to absorb ASET losses. As a result, ASET has not been consolidated by us. 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.

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	3 Months Ended
	May. 31, 2015
Fair Value Disclosures [Abstract]
FAIR VALUE MEASUREMENTS	The recorded value of certain financial assets and liabilities, which consist primarily of cash and cash equivalents, receivables, accounts payable and accrued expenses approximate the fair value at May 31 and February 28, 2015 based upon the short-term nature of the assets and liabilities. The following table sets forth the changes in the estimated fair value for our Level 3 classified derivative warrant liability: May 31, 2015 Fair value at the beginning of period: $ 273,000 Change in fair value: (136,500) Fair value at end of period: $ 136,500 The Series B warrants contain an adjustment clause affecting the exercise price of the Series B warrants, which may be reduced if the Company issues shares of common stock or convertible securities at a price below the then-current exercise price of the Series B warrants. As a result, we determined that the Series B warrants were not indexed to the Company’s common stock and therefore should be recorded as a derivative liability. The Series B Warrants were measured at fair value on the issuance date using a Monte Carlo simulation and will be re-measured to fair value at each balance sheet date, and any resultant changes in fair value will be recorded in earnings. The Monte Carlo simulation as of May 31 and February, 2015 used the following assumptions: (1) a stock price of $0.35 and $0.70, respectively; (2) a risk free rate of 1.49% and 1.50%, respectively; (3) an expected volatility of 125% and (4) a fundraising event to occur on September 30, 2015 that would result in the issuance of additional common stock.

EQUIPMENT

EQUIPMENT	3 Months Ended
	May. 31, 2015
Property, Plant and Equipment [Abstract]
EQUIPMENT	Equipment consists of the following: Estimated Useful lives May 31, 2015 February 28, 2015 Research equipment 7 years $ 538,836 $ 548,991 Computer and software equipment 5 years 73,704 73,704 612,540 622,695 Accumulated depreciation and amortization (98,053) (96,089) Equipment, net $ 514,487 $ 526,606 Depreciation and amortization expense was $24,845 and $9,222 for the three months ended May 31, 2015 and 2014, respectively. Depreciation of equipment utilized in research and development activities is included in research and development expenses and amounted to $21,160 and $5,665 for the three months ended May 31, 2015 and 2014, respectively. All other depreciation is included in general and administrative expense and amounted to $3,685 and $3,557 for the three months ended May 31, 2015 and 2014, respectively. On March 26, 2014, we entered into an agreement to finance the purchase of research equipment 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 former chief executive officer. Capital lease obligation and future payments of capital lease obligations as of May 31, 2015 were as follows: Period Ending May 31, 2016 $ 92,340 2017 123,120 2018 61,560 277,020 Less: amount representing interest 31,377 Capital lease obligations 245,643 Less: current portion 102,773 Noncurrent $ 142,870

NET LOSS PER SHARE

NET LOSS PER SHARE	3 Months Ended
	May. 31, 2015
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 May 31, 2015 and 2014, 437,818 and 303,153, restricted shares of common stock, respectively, 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 shares issuable from convertible securities. Warrants classified as liability are included in the potential common shares and any change in fair value of the warrant for the period presented is excluded from the net loss. For the period ended May 31, 2015, the liability warrants were not dilutive. In computing diluted loss per share for the periods ended May 31, 2015 and 2014, 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: May 31, 2015 May 31, 2014 Stock options 4,102,000 2,680,000 Warrants 11,841,971 3,196,355 Convertible notes - 1,769,854 Preferred stock 7,082,887 - Total 23,026,858 7,646,209

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	May. 31, 2015
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	Management Changes On June 17, 2015, Oscar L. Bronsther, M.D. resigned as our Chief Executive Officer and Chief Medical Officer. Dr. Bronsther will retain his position as a member of our Board and has entered a consulting agreement to become Chairman of our Scientific and Clinical Advisory Board. In connection with Dr. Bronsther’s resignation as Chief Executive Officer and Chief Medical Officer, the Company entered into a standard separation and release agreement with Dr. Bronsther. In recognition of his contribution to the Company over the last 3 years, Dr. Bronsther was granted ten-year options to purchase 400,000 stock options at an exercise price of $0.55 per share, which options vest immediately. Dr. Bronsther shall have the right to exercise any of such options for a period of 180 days following the expiration or termination of the consulting agreement. On June 17, 2015, we entered into an employment agreement with Douglas Hamilton to join us as President and Chief Executive Officer for a term of two years. The employment agreement provides for a base salary of $260,000 and an annual milestone bonus equal to 150% of Mr. Hamilton’s compensation thereunder, based on his attainment of certain financial, clinical development, and/or business milestones to be established annually by the Company’s Board or compensation committee. Mr. Hamilton was also granted ten-year options to purchase 900,000 shares of the Company’s common stock at an exercise price of $0.55 per share. 150,000 options vested immediately and the remaining 750,000 vest upon achieving various milestones including (i) up-listing of the Company’s common stock to a national securities exchange, (ii) certification of the CLIA laboratory, (iii) achieving a market capitalization of $100 million, (iv) first commercial product sales, and (v) achieving a sales threshold of $25 million over 12 consecutive months. Option Issuance On June 30, 2015, the Company issued an aggregate of 75,000 options with a strike price of $0.55 per share to employees with annual milestone vesting over three years.

STOCK OPTIONS (Tables)

STOCK OPTIONS (Tables)	3 Months Ended
	May. 31, 2014
Stock Options Tables
Weighted average inputs to the Black-Scholes model used to value the stock options granted	Expected volatility 123% Expected dividend yield 0.00% Weighted average risk-free interest rate 1.88% Expected Term 6.08 years
Common stock options issued and outstanding	Options Weighted average exercise price Aggregate intrinsic value Weighted average remaining contractual life (years) Outstanding at February 28, 2015 2,810,000 $ 1.58 $ 20,670 8.29 Granted 1,300,000 0.55 - - Exercised - - - - Forfeited 8,000 0.54 - - Expired - - - - Outstanding and expected to vest at May 31, 2015 4,102,000 $ 1.26 $ - 8.65 Exercisable at May 31, 2015 1,769,000 $ 1.76 $ - 7.25

WARRANTS (Tables)

WARRANTS (Tables)	3 Months Ended
	May. 31, 2014
Warrants Tables
Common stock purchase warrants issued and outstanding	Warrants Weighted average exercise price Aggregate intrinsic value Weighted average remaining contractual life (years) Outstanding at February 28, 2015 8,707,726 $ 1.19 $ 72,250 3.33 Granted 3,234,245 0.70 - - Exercised - - - - Cancelled 100,000 1.65 - - Expired - - - - Outstanding at May 31, 2015 11,841,971 $ 1.05 $ - 3.56
Warrants exercisable	Exercise prices Number of shares Weighted average remaining life (years) Exercisable number of shares $ 0.55 455,000 4.84 455,000 $ 0.68 220,000 1.46 220,000 $ 0.70 5,075,866 4.84 5,075,866 $ 0.91 1,497,124 1.67 1,497,124 $ 1.00 8,333 5.00 8,333 $ 1.25 10,417 5.00 10,417 $ 1.40 786,250 1.24 786,250 $ 1.50 3,296,000 3.02 3,296,000 $ 2.10 447,001 2.87 447,001 $ 2.50 25,980 2.62 25,980 $ 3.00 20,000 1.67 20,000

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	3 Months Ended
	May. 31, 2014
Fair Value Disclosures [Abstract]
Fair value measurements	May 31, 2015 Fair value at the beginning of period: $ 273,000 Change in fair value: (136,500) Fair value at end of period: $ 136,500

EQUIPMENT (Tables)

EQUIPMENT (Tables)	3 Months Ended
	May. 31, 2014
Property, Plant and Equipment [Abstract]
Equipment	Estimated Useful lives May 31, 2015 February 28, 2015 Research equipment 7 years $ 538,836 $ 548,991 Computer and software equipment 5 years 73,704 73,704 612,540 622,695 Accumulated depreciation and amortization (98,053) (96,089) Equipment, net $ 514,487 $ 526,606
Capital lease obligations	Period Ending May 31, 2016 $ 92,340 2017 123,120 2018 61,560 277,020 Less: amount representing interest 31,377 Capital lease obligations 245,643 Less: current portion 102,773 Noncurrent $ 142,870

NET LOSS PER SHARE (Tables)

NET LOSS PER SHARE (Tables)	3 Months Ended
	May. 31, 2015
Accounting Policies [Abstract]
Anti-dilutive securities	May 31, 2015 May 31, 2014 Stock options 4,102,000 2,680,000 Warrants 11,841,971 3,196,355 Convertible notes - 1,769,854 Preferred stock 7,082,887 - Total 23,026,858 7,646,209

DESCRIPTION OF BUSINESS AND G23

DESCRIPTION OF BUSINESS AND GOING CONCERN (Details Narrative) - USD ($)	3 Months Ended
	May. 25, 2015	May. 31, 2014	May. 31, 2015	Feb. 28, 2015
Description Of Business And Going Concern Details Narrative
Date of incorporation		Mar. 28, 2007
State of incorporation		Nevada
Common stock issued pursuant to agreement	387
Warrants issued	2,905,568
Value shares and warrants issued	$ 2,130,750
Proceeds from private placement	$ 2,112,750
Going Concern
Accumulated deficit			$ (19,798,056)	$ (18,723,149)
Net loss		$ (7,995,474)

EQUITY TRANSACTIONS (Details Na

EQUITY TRANSACTIONS (Details Narrative) - USD ($)	3 Months Ended
	May. 31, 2015	May. 31, 2014
Common stock issued for services	320,000	50,000
Fair value of shares issued for services	$ 133,406	$ 67,500
Increase in prepaid expenses		33,750
Legal settlement, amount	$ 150,000
Shares issued in legal settlement	160,908
Reimbursement of legal expenses	$ 3,000
Settlement expense	38,437
Stock based compensation	207,112	$ 33,750
Net proceeds from offering	1,945,244
Series B Preferred Stock [Member]
Sale of stock, amount	$ 2,130,750
Sale of stock, price per share	$ .55
Series B Preferred Stock [Member] | Private Placement [Member]
Sale of stock, amount	$ 2,130,750
Warrants issued	$ 2,905,568
Preferred stock issued private placement	3,874,088
Stock based compensation	$ 12,695
Cash fee to placement agents	$ 147,451
Placement agent warrants	309,927
Fair value of placement agent warrants	$ 158,411
Net proceeds from offering	1,945,244
Non-cash deemed dividend	$ 1,067,491
Series A Preferred Stock [Member] | Warrants [Member]
Exercise price	$ 0.70
Series A Preferred Stock [Member] | Warrants [Member] | Placement Agent [Member]
Fair value of shares issued for services	$ 158,441
Warrants issued	$ 2,905,568
Warrants [Member] | $1.50 [Member]
Shares issued in legal settlement	25,000
Exercise price	$ 1.50
Warrants [Member] | $2.10 [Member]
Shares issued in legal settlement	75,000
Exercise price	$ 2.10

CAPITAL STOCK (Details Narrativ

CAPITAL STOCK (Details Narrative) - USD ($)	3 Months Ended
	May. 31, 2015	Feb. 28, 2015
Authorized shares of stock		160,000,000
Par value of shares	$ 0.0001	$ .0001
Authorized shares of common stock	150,000,000	150,000,000
Authorized shares of preferred stock	10,000,000	10,000,000
Series B Preferred Stock [Member]
Authorized shares of preferred stock	1,000	1,000
Stated value per share	$ .0001	$ .0001
Dividend rate	8.00%
Dividend payable	$ 45,530	$ 16,767
Preferred issued for payment of dividends	4,818
Preferred B issued for dividends, Amount	$ 26,498
Liquidation preference	$ 3,460,000	$ 1,274,000
Conversion price	$.055 per share

STOCK OPTIONS (Details)

STOCK OPTIONS (Details) - 3 months ended May. 31, 2015 - Option [Member]	Total
Expected volatility	123.00%
Expected dividend yield	0.00%
Weighted average risk-free interest rate	1.88%
Expected Term	6 years 26 days

STOCK OPTIONS (Details 1)

STOCK OPTIONS (Details 1) - 3 months ended May. 31, 2015 - Option [Member] - USD ($)	Total
Options Outstanding
Outstanding at Beginning of Period	2,810,000
Granted	1,300,000
Exercised
Forfeited	8,000
Expired
Outstanding and expected to vest at End of Period	4,102,000
Exercisable	1,769,000
Weighted Average Exercise Price
Outstanding at Beginning of Period	$ 1.58
Granted	$ .55
Exercised
Forfeited	$ .54
Expired
Outstanding and expected to vest at End of Period	$ 1.26
Exercisable at End of period	$ 1.76
Outstanding at Beginning of Period	$ 20,670
Outstanding and expected to vest at End of Period
Exercisable at End of period
Weighted Average Remaining Contractual Term
Outstanding and expected to vest at Beginning of Period	8 years 3 months 14 days
Outstanding and expected to vest at End of Period	8 years 7 months 24 days
Exercisable at End of period	7 years 3 months

STOCK OPTIONS (Details Narrativ

STOCK OPTIONS (Details Narrative) - USD ($)	3 Months Ended
	May. 31, 2015	May. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award, Percentage of Outstanding Stock Maximum	15.00%
Stock based compensation expense	$ 207,112	$ 33,750
Scientific Clinic Board [Member]
Shares cancelled	8,000
Option $0.75 [Member]
Stock options issued	100,000
Stock option price per share	$ 0.75
Stock option expiration date	Mar. 1, 2025
Shares vested	25,000
Stock based compensation expense	$ 8,000
Unvested options	100,000
Option $0.55 [Member]
Stock options issued	1,200,000
Stock option price per share	$ 0.55
Stock option expiration date	May 18, 2025
Stock options fair value	$ 388,000
Stock based compensation expense	$ 9,016
Unvested options	1,200,000
Option $0.54 [Member]
Exercisable	8,000
Option exercise price	$ 0.54
Stock option expected term	9 years 8 months 1 day
Unvested options	8,000
Option $0.68 [Member]
Exercisable	841,500
Option exercise price	$ 0.68
Stock option expected term	6 years 7 months 10 days
Option $1.50 [Member]
Exercisable	671,000
Option exercise price	$ 1.50
Stock option expected term	8 years 9 months
Option $3.25 [Member]
Exercisable	673,500
Option exercise price	$ 3.25
Stock option expected term	7 years 10 months 6 days

WARRANTS (Details)

WARRANTS (Details) - 3 months ended May. 31, 2015 - Warrants [Member] - USD ($)	Total
Warrants Outstanding
Outstanding at Beginning of Period	8,707,726
Granted	3,234,245
Exercised
Cancelled	100,000
Expired
Outstanding at End of Period	11,841,971
Weighted Average Exercise Price
Outstanding at Beginning of Period	$ 1.19
Granted	$ 0.70
Exercised
Cancelled	$ 1.65
Expired
Outstanding at End of Period	$ 1.05
Average Intrensic Value
Outstanding at Beginning of Period	$ 72,250
Issued
Outstanding at End of Period
Weighted Average Remaining Contractual Term
Outstanding at Beginning of Period	3 years 3 months 29 days
Outstanding at End of Period	3 years 6 months 21 days

WARRANTS (Details 1)

WARRANTS (Details 1) - May. 31, 2015 - Warrants [Member] - $ / shares	Total
$0.55 [Member]
Exercise prices	$ 0.55
Number of shares	455,000
Weighted average remaining life (years)	4 years 10 months 2 days
Exercisable number of shares	455,000
$0.68 [Member]
Exercise prices	$ 0.68
Number of shares	220,000
Weighted average remaining life (years)	1 year 5 months 16 days
Exercisable number of shares	220,000
$0.70 [Member]
Exercise prices	$ 0.70
Number of shares	5,075,866
Weighted average remaining life (years)	4 years 10 months 2 days
Exercisable number of shares	5,075,866
$0.91 [Member]
Exercise prices	$ 0.91
Number of shares	1,497,124
Weighted average remaining life (years)	1 year 8 months 1 day
Exercisable number of shares	1,497,124
$1.00 [Member]
Exercise prices	$ 1
Number of shares	8,333
Weighted average remaining life (years)	5 years
Exercisable number of shares	8,333
$1.25 [Member]
Exercise prices	$ 1.25
Number of shares	10,417
Weighted average remaining life (years)	5 years
Exercisable number of shares	10,417
$1.40 [Member]
Exercise prices	$ 1.40
Number of shares	786,250
Weighted average remaining life (years)	1 year 2 months 27 days
Exercisable number of shares	786,250
$1.50 [Member]
Exercise prices	$ 1.50
Number of shares	3,296,000
Weighted average remaining life (years)	3 years 7 days
Exercisable number of shares	3,296,000
$2.10 [Member]
Exercise prices	$ 2.10
Number of shares	447,001
Weighted average remaining life (years)	2 years 10 months 13 days
Exercisable number of shares	447,001
$2.50 [Member]
Exercise prices	$ 2.50
Number of shares	25,980
Weighted average remaining life (years)	2 years 7 months 13 days
Exercisable number of shares	25,980
$3.00 [Member]
Exercise prices	$ 3
Number of shares	20,000
Weighted average remaining life (years)	1 year 8 months 1 day
Exercisable number of shares	20,000

WARRANTS (Details Narrative)

WARRANTS (Details Narrative) - USD ($)	3 Months Ended
	May. 31, 2015	May. 31, 2014	May. 27, 2014
Fair value of warrants issued	$ 133,406	$ 67,500
Warrants issued to consultant for services	320,000	50,000
Stock based compensation expense	$ 207,112	$ 33,750
$2.10 [Member] | Warrants [Member]
Warrant exercise price	$ 2.10
Warrants repurchased and cancelled	25,000
$1.50 [Member] | Warrants [Member]
Warrant exercise price	$ 1.50
Warrants repurchased and cancelled	75,000
Warrants [Member] | Goods and Services Exchanged for Equity Instrument [Member]
Discount rate	1.49%
Fair value of warrants issued	$ 4,771
Warrant term	5 years
Volatility	124.00%
Dividends	0.00%
Warrants issued to consultant for services	18,750
Stock based compensation expense	$ 4,771
Warrants [Member] | Goods and Services Exchanged for Equity Instrument [Member] | $1.00 [Member]
Warrant exercise price	$ 1
Warrants issued to consultant for services	8,333
Warrants [Member] | Goods and Services Exchanged for Equity Instrument [Member] | $1.25 [Member]
Warrant exercise price	$ 1.25
Warrants issued to consultant for services	10,417
Warrants [Member] | Series A Preferred Stock [Member]
Warrants issued	2,905,568
Warrant exercise price	$ 0.70
Warrants [Member] | Placement Agent [Member] | Series A Preferred Stock [Member]
Warrants issued	309,927
Discount rate	1.41%
Fair value of warrants issued	$ 158,441
Warrant term	5 years
Volatility	125.00%
Dividends	0.00%
Convertible Notes Payable [Member] | Warrants [Member]
Warrants issued			50,000
Warrant exercise price			$ 1.50
Convertible Notes Payable [Member] | Warrants [Member] | Placement Agent [Member]
Warrants issued			8,480
Warrant exercise price			$ 2.50
Discount rate			0.74%
Fair value of warrants issued			$ 25,498
Warrant term			5 years
Volatility			134.00%
Dividends			0.00%

CONVERTIBLE NOTES (Details Narr

CONVERTIBLE NOTES (Details Narrative) - USD ($)	3 Months Ended				5 Months Ended	13 Months Ended
	May. 31, 2015	May. 25, 2015	May. 31, 2014	May. 31, 2014	May. 31, 2013	Dec. 31, 2014
Warrants issued		2,905,568
Debt discount due to beneficial conversion feature				$ 31,221
Convertible promissory notes outstanding	$ 0
Convertible Note 2013 [Member]
Convertible promissory notes issued					$ 1,487,000
Modification of notes						$ (1,387,000)
Extinguishment of debt						$ 1,243,482
Accretion expense	120,399			0
Convertible note maturity date					Dec. 31, 2013
Convertible Notes Payable [Member]
Convertible promissory notes issued			$ 225,000
Accretion expense	$ 0			$ 221,674
Convertible note maturity date			Jun. 30, 2014
Convertible note interest rate			8.00%
Warrants issued			25,000
Warrant exercise price			$ 2.10	$ 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	$ 1.50
Debt discount due to beneficial conversion feature			$ 66,510
Convertible Notes 2014 (2) [Member]
Convertible note maturity date			Aug. 15, 2014

LICENSE AGREEMENTS AND COMMIT33

LICENSE AGREEMENTS AND COMMITMENTS (Details Narrative) - USD ($)	3 Months Ended
	May. 31, 2015	May. 31, 2014	Feb. 28, 2015
Lease term		1 year
Lease expiration date		Aug. 31, 2014
Rent payable, Boston, monthly installment rate			$ 10,280
Rent payable, New York, monthly installment rate			1,400
Rental security deposit			$ 2,100
License Agreement [Member]
License maintenance fee due at one year	$ 50,000
License maintenance fee due at two years	75,000
License maintenance fee due at three years	$ 100,000
Shares issued per antidilution right	160,158
License Agreement 2 [Member]
License maintenance fee due at one year	$ 30,000
License maintenance fee due at two years	50,000
License maintenance fee due at three years	75,000
License maintenance fee due at four years	100,000
License Agreement 3 [Member]
License maintenance fee due at one year	15,000
License maintenance fee due at two years	25,000
License maintenance fee due at three years	37,500
License maintenance fee due at four years	50,000
License Agreement 4 [Member]
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	15,000
License maintenance fee due at four years	$ 20,000

LICENSE, DEVELOPMENT AND COMM34

LICENSE, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT WITH ASET THERAPEUTICS, LLC (Details Narrative) - Nov. 25, 2014 - USD ($)	Total
Costs and Expenses [Member]
Reimbursement revenue	$ 150,000
Research and Development Expense [Member]
Reimbursement revenue	75,000
Maximum [Member] | Costs and Expenses [Member]
Reimbursement revenue	50,000
Licensing Agreements [Member]
Investment amount received	250,000
Reimbursement revenue	75,000
Investment required by company	1,000,000
Licensing Agreements [Member] | Minimum [Member]
Investment amount received	$ 1,250,000
Equity ownership	20.00%

FAIR VALUE MEASUREMENTS (Detail

FAIR VALUE MEASUREMENTS (Details)	3 Months Ended
	May. 31, 2015USD ($)
Fair Value Disclosures [Abstract]
Fair value of Level 3 derivative warrant liability, beginning of year	$ 273,000
Change in fair value:	(136,500)
Fair value at end of year	$ 136,500

FAIR VALUE MEASUREMENTS (Deta36

FAIR VALUE MEASUREMENTS (Details Narrative) - Fair Value, Inputs, Level 3 [Member] - $ / shares	3 Months Ended	12 Months Ended
	May. 31, 2015	Feb. 28, 2015
Stock price	$ .35	$ .70
Risk free rate	1.50%	1.49%
Volatility	125.00%	125.00%

EQUIPMENT (Details)

EQUIPMENT (Details) - USD ($)	3 Months Ended
	May. 31, 2015	Feb. 28, 2015
Equipment, gross	$ 612,540	$ 622,695
Accumulated depreciation and amortization	(98,053)	(96,089)
Equipment, net	$ 514,487	526,606
Research Equipment [Member]
Estimated useful life	P7Y
Equipment, gross	$ 538,836	548,991
Computer Equipment [Member]
Estimated useful life	P5Y
Equipment, gross	$ 73,704	$ 73,704

EQUIPMENT (Details 1)

EQUIPMENT (Details 1) - USD ($)	May. 31, 2015	Feb. 28, 2015
Capital lease obligation
2,016	$ 92,340
2,017	123,120
2,018	61,560
Total future payments due	277,020
Less: amount representing interest	31,377
Capital lease obligations	245,643
Less: current portion	102,773	$ 99,965
Noncurrent	$ 142,870	$ 169,676

EQUIPMENT (Details Narrative)

EQUIPMENT (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended
	Mar. 26, 2014	May. 31, 2015	May. 31, 2014
Depreciation		$ 24,845	$ 9,222
Equipment Purchase Agreement [Member]
Research equipment agreement	$ 318,603
Equipment payment	21,115
Security deposit	238,952
Equipment Purchase Agreement [Member] | Minimum [Member]
Equipment payment	$ 10,260
Research and Development Expense [Member]
Depreciation		21,160	5,665
General and Administrative Expense [Member]
Depreciation		$ 3,685	$ 3,557

NET LOSS PER SHARE (Details)

NET LOSS PER SHARE (Details) - shares	3 Months Ended
	May. 31, 2015	May. 31, 2014
Anti-dilutive securities	23,026,858	7,646,209
Stock Options [Member]
Anti-dilutive securities	4,102,000	268,000
Warrants [Member]
Anti-dilutive securities	11,841,971	3,196,335
Convertible notes [Member]
Anti-dilutive securities		1,769,854
Preferred Stock [Member]
Anti-dilutive securities	7,082,887

NET LOSS PER SHARE (Details Nar

NET LOSS PER SHARE (Details Narrative) - shares	3 Months Ended
	May. 31, 2015	May. 31, 2014
Anti-dilutive securities	23,026,858	7,646,209
Restricted Stock [Member]
Anti-dilutive securities	437,818	303,153

Uncategorized Items - mtst-2015

Label	Element	Value
Warrants [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number	us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsOutstandingNumber	8,707,726
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value	us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsNonvestedWeightedAverageGrantDateFairValue	$ 1.19
ShareBasedCompensationArrangementByShareBasedPaymentAwardOtherThanOptionsOutstandingIntrinsicValue	MTST_ShareBasedCompensationArrangementByShareBasedPaymentAwardOtherThanOptionsOutstandingIntrinsicValue	$ 72,250