INCOME TAXES

9 Months Ended

Nov. 30, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 8 - INCOME TAXES

We use the assets and liabilities method when accounting for income taxes. Under this method, deferred income tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to the taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

We evaluate our estimated annual effective tax rate (“ETR”) on a quarterly basis based on current and forecasted operating results. The relationship between our income tax provision or benefit and our pretax book income or loss can vary significantly from period to period considering, among other factors, the overall level of pretax book income or loss and changes in the blend of jurisdictional income or loss that is

taxed at different rates and changes in valuation allowances. The income tax expense of $0.0 million and $0.5 million for the three and nine months ended November 30, 2023, was primarily attributable to one of our foreign subsidiaries, partially offset by a $0.3 million decrease in uncertain tax benefits related to certain foreign net operating loss carryforwards and a $0.2 million decrease in valuation allowances against net deferred tax assets. Any income tax benefit associated with the pre-tax loss for the quarter ended November 30, 2023, resulting primarily from the U.S. jurisdiction, is offset by a full valuation allowance.