Note 2 – INVENTORIES

Inventories consist of the following:

Inventory in transit totaled $442,800 and $2,732,400 at August 31, 2022 and February 28, 2022, respectively.

Book inventory quantities in excess of what we expect will be sold within the normal operating cycle, based on 2½ years of anticipated sales, are included in noncurrent inventory.

Significant portions of our inventory purchases are concentrated with an England-based publishing company, Usborne Publishing Limited (“Usborne”). Our distribution agreement includes annual minimum purchase volumes along with specific payment terms, which if not met or payments are not received timely may result in termination of the agreement. Should termination of the agreement occur, the Company will be allowed to sell through their remaining Usborne inventory over the twelve months following the termination date. Purchases received from Usborne were $1,206,200 and $12,127,000 for the three months ended August 31, 2022 and 2021, respectively. Total inventory purchases received from all suppliers were $3,163,100 and $18,779,100 for the three months ended August 31, 2022 and 2021, respectively.

Purchases received from Usborne were $4,783,500 and $24,415,300 for the six months ended August 31, 2022 and 2021, respectively. Total inventory purchases received from all suppliers were $9,141,700 and $36,564,300 for the six months ended August 31, 2022 and 2021, respectively.