Leases

12 Months Ended

Feb. 28, 2023

Leases [Abstract]

Leases

Note 10. Leases

Operating Leases

The Company leases its office space and manufacturing facilities and equipment under operating lease agreements. The base lease terms expire at various dates through 2025. While each of the leases include renewal options, the Company has only included the base lease term in its calculation of lease assets and liabilities. The Company has one finance lease.

Balance sheet information related to operating leases is as follows (in thousands):

	February 28, 2023		February 28, 2022
Operating lease right-of-use assets	$	482	$	592
Current portion of operating lease liabilities	$	313	$	257
Noncurrent portion of operating lease liabilities		169		333
Total operating lease liabilities	$	482	$	590

Rent expense totaled approximately $0.5 million for fiscal 2023 and $0.6 million for fiscal 2022. The Company did not have any variable lease costs or short-term lease costs for the years ended February 28, 2023 and 2022, respectively.

Cash paid for amounts included in the measurement of operating lease liabilities was approximately $0.5 for fiscal 2023 and $0.6 million for fiscal 2022. On September 9, 2021, the Company exercised an option to terminate the lease on its Tucker, Georgia location effective March 31, 2022. The terms of the option to terminate included prepaying the remaining rent through March 31, 2022, an additional penalty of three month’s rent and prepaying the property taxes for 2021 and for the first three months of 2022. The Company did not modify any existing operating leases or execute any new operating leases during the fiscal year ended February 28, 2023.

Weighted average information associated with the measurement of the Company’s remaining operating lease obligations is as follows:

	February 28, 2023			February 28, 2022
Weighted average remaining lease term		1.6 years			2.7 years
Weighted average discount rate		6	%		6	%

The following table summarizes the maturity of the Company’s operating lease liabilities as of February 28, 2023 (in thousands):

Fiscal Year	Amount
2024	$	321
2025		190
Total operating lease payments	$	511
Less imputed interest		(29	)
Total operating lease liabilities	$	482

The Company subleases certain of its warehousing space in Lexington, KY. It is of a nominal value.

Financing Leases

The Company has one financing lease entered into on November 23, 2020 for Tempest testing equipment for $277,000. The lease expires on December 1, 2023 and the incremental borrowing rate on the lease is 12.5%.

Balance sheet information related to financing lease is as follows (in thousands):

	February 28, 2023			February 28, 2022
Machinery and equipment	$	277		$	277
Less: Accumulated depreciation		(208	)		(115	)
Machinery and equipment, net	$	69		$	162
Current portion of financing lease liabilities	$	74		$	98
Noncurrent portion of financing lease liabilities		—			64
Total financing lease liabilities	$	74		$	162

Finance lease costs include depreciation expense of $92 thousand and interest expense of $15 thousand for the year ended February 28, 2023 and depreciation expense of $92 thousand and interest expense of $25 thousand for the year ended February 28, 2022. Cash paid for amounts included in the measurement of lease liabilities for finance leases include $15 thousand classified as operating cash flows and $87 thousand classified as financing cash flows for the year ended February 28, 2023. Cash paid for amounts included in the measurement of lease liabilities for finance leases include $25 thousand classified as operating cash flows and $78 thousand classified as financing cash flows for the year ended February 28, 2022.

The following table summarizes the maturity of the Company’s finance lease liabilities as of February 28, 2023 (in thousands):

Fiscal Year	Amount
2024	$	78
Total finance lease payments	$	78
Less imputed interest		(4	)
Total finance lease liabilities	$	74

Related Party Leases

Included in the operating lease section above are leases for manufacturing and warehouse facilities leased from Southeast Metro Savings, LLC and Honeyhill Properties, LLC (entities which are controlled by the Company’s chief executive officer) under operating leases expiring at various dates through 2025. Rent expense under these leases totaled approximately $0.3 million in fiscal 2023 and $0.4 million in fiscal 2022.

Future minimum rental payments due under leases with related parties are as follows (in thousands):

Fiscal Year	Amount
2024	$	190
2025		190
	$	380