Leases

12 Months Ended

Feb. 28, 2022

Disclosure Text Block [Abstract]

LEASES

NOTE 13 – LEASES

During fiscal 2021, our facilities consisted primarily of an approximate 20,000 square feet facility in Stanton, California and an additional storage facility in Santa Clarita, California. Effective February 28, 2021, we vacated the Stanton facility and consolidated our administrative, production operations including warehousing within an approximately 18,000 square foot facility in Lake Forest, California. The Lake Forest lease is for 66-months effective February 2021 through August 31, 2026. The initial monthly base rental rate was approximately $22,000 per month and escalates 3% each year to approximately $26,000 per month in 2026. The lease liability was determined by discounting the future lease payments under the lease terms using a 10% per annum discount rate to arrive at the current lease liability.

Operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Generally, the implicit rate of interest in arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The operating lease ROU asset includes any lease payments made and excludes lease incentives.

The components of lease expense and supplemental cash flow information related to leases for the period are as follows:

	Year ended February 28, 2022			Year ended February 28, 2021
Lease Cost
Operating lease cost (included in general and administration in the Company’s statement of operations)	$	279,000		$	170,000
Other Information
Cash paid for amounts included in the measurement of lease liabilities for the years ended February 28, 2022	$	222,000		$	-
Weighted average remaining lease term – operating leases (in years)		4.5			5.5
Average discount rate – operating leases		10.0	%		10.0	%

The supplemental balance sheet information related to leases for the period is as follows:

	At February 28, 2022
Operating leases
Long-term right-of-use assets	$	1,000,467
Short-term operating lease liabilities	$	179,450
Long-term operating lease liabilities		867,484
Total operating lease liabilities	$	1,046,934

Maturities of the Company’s lease liability is as follows:

Year Ending February 28:	Operating Lease
2023	$	275,000
2024		283,000
2025		292,000
2026		300,000
2027		128,000
Total lease payments		1,278,000
Less: Imputed interest/present value discount		(231,066	)
Present value of lease liabilities	$	1,046,934