The Company accounts for operating and finance leases in accordance with ASC Topic 842, Leases. We determine whether an arrangement is a lease at inception. This determination generally depends on whether the arrangement conveys the right to control the use of an identified fixed asset explicitly or implicitly for a period of time in exchange for consideration. Control of an underlying asset is conveyed if we obtain the rights to direct the use of, and to obtain substantially all of the economic benefit from, the use of the underlying asset. Some of our leases include both lease and non-lease components which are accounted for as a single lease component, as we elected the practical expedient in ASC 842-10-15-37. Some of our operating lease agreements include variable lease costs, including taxes, common area maintenance, or increases in rental costs related to inflation. Such variable payments, other than those dependent upon a market index or rate, are expensed when the obligation for those payments is incurred. Lease expense is recorded in operating expenses in the Consolidated Statements of Operations and Comprehensive Loss. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. Leases with an initial term of 12 months or less which do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise are considered short term leases and are not recorded on the balance sheet. The Company had no short-term leases during the year ended February 29, 2024.

Right-of-use assets and lease liabilities are recognized at each lease’s commencement date based on the present value of its lease payments over its respective lease term. When a borrowing rate is not explicitly available for a lease, our incremental borrowing rate is used based on information available at the lease’s commencement date to determine the present value of its lease payments. Operating lease payments are recognized on a straight-line basis over the lease term.

We have operating leases for office equipment, as well as offices, warehouses, and other facilities used for our operations. We also have finance leases comprised primarily of computer hardware and machinery and equipment. Our leases have remaining lease terms of less than 1 year to 7 years, some of which include renewal options. We consider these renewal options in determining the lease term used to establish our right-of-use assets and lease liabilities when it is determined that it is reasonably certain that the renewal option will be exercised.

Refer to the Consolidated Statements of Cash Flows for supplemental cash flow information related to leases.

The components of lease cost for the year ended February 29, 2024 were as follows:


	February 29, 2024		February 28, 2023		February 28, 2022
Operating lease cost (a) (c)	$	1,377	$	1,508	$	1,383
Finance lease cost:
Amortization of right of use assets (a)		372		283		403
Interest on lease liabilities (b)		53		4		11
Total finance lease cost	$	425	$	287	$	414

(a)

Recorded within Selling, general, and administrative; Engineering and technical support; and Cost of sales on the Consolidated Statements of Operations and Comprehensive Loss.

(b)

Recorded within Interest and bank charges on the Consolidated Statements of Operations and Comprehensive Loss.

(c)

Includes immaterial amounts related to variable rent expense.

Supplemental balance sheet information related to leases is as follows:


	February 29, 2024			February 28, 2023
Operating Leases
Operating lease, right of use assets	$	2,577		$	3,632
Total operating lease right of use assets	$	2,577		$	3,632
Accrued expenses and other current liabilities	$	782		$	1,173
Operating lease liabilities, less current portion		1,884			2,509
Total operating lease liabilities	$	2,666		$	3,682
Finance Leases
Property, plant and equipment, gross	$	3,835		$	2,754
Accumulated depreciation		(2,863	)		(2,491	)
Total finance lease right of use assets	$	972		$	263
Accrued expenses and other current liabilities	$	349		$	203
Finance lease liabilities, less current portion		644			63
Total finance lease liabilities	$	993		$	266
Weighted Average Remaining Lease Term
Operating leases	4.9 years			5.0 years
Finance leases	3.1 years			1.2 years
Weighted Average Discount Rate
Operating leases		4.12	%		3.83	%
Finance leases		8.45	%		3.51	%

At February 29, 2024, maturities of lease liabilities for each of the succeeding years were as follows:


	Operating Leases		Finance Leases
2025	$	851	$	435
2026		608		364
2027		401		194
2028		246		122
2029		241		71
Thereafter		549		-
Total lease payments		2,896		1,186
Less imputed interest		230		193
Total	$	2,666	$	993

As of February 29, 2024, the Company has not entered into any lease agreements that have not yet commenced.

The Company owns and occupies buildings as part of its operations. Certain space within these buildings may, from time to time, be leased to third parties from which the Company earns rental income as lessor. This leased space is recorded within property, plant and equipment and was not material to the Company's Consolidated Balance Sheets at February 29, 2024. Rental income earned by the Company for the years ended February 29, 2024, February 28, 2023, and February 28, 2022 was $937, $911, and $678, respectively, which is recorded within Other income (expense).