NOTE 12 - PRODUCT WARRANTIES

The Company generally warrants its products against defects over periods ranging from 12 to 24 months. An accrual for estimated future costs relating to products returned under warranty is recorded as an expense when products are shipped. At the end of each fiscal quarter, the Company adjusts its liability for warranty claims based on its actual warranty claims experience as a percentage of revenues for the preceding one to two years and also considers the impact of the known operational issues that may have a greater impact than historical trends. The warranty reserve is included in Other Current Liabilities in the unaudited consolidated balance sheets. Activity in the accrued warranty costs liability for the three months ended May 31, 2016 and 2015 is as follows (in thousands):

	Three Months Ended
	May 31,
	2016			2015
Balance at beginning of period	$	1,892		$	1,819
Assumed from acquisition of LoJack		1,883		$	-
Charged to costs and expenses		317			339
Deductions		(577	)		(304	)
Balance at end of period	$	3,515		$	1,854

In LoJack's efforts to maintain a high recovery rate of stolen vehicles with LoJack units, in September 2014, LoJack commenced a quality assurance program in the U.S. related to a battery performance issue in self-powered LoJack units under base or extended warranty. LoJack also entered into agreements to support quality assurance programs with all major international licensees that identified performance issues in certain self-powered units equipped with the battery pack.

At May 31, 2016, we had a reserve of $1.4 million for certain costs associated with this program, quality assurance programs in other countries and markets, and other business concessions related to the battery performance matter as further described in Note 15. As of the date of this report, we anticipate that the U.S. quality assurance program will be completed by the end of fiscal 2017.