Leases

12 Months Ended

Feb. 28, 2026

NOTE 11 – LEASES

In February 2021, the Company consolidated its administrative and production operations, including warehousing, into an approximately 18,000-square-foot facility in Lake Forest, California. The Lake Forest facility lease is for 66 months, effective February 2021 through August 31, 2026. The initial monthly base rental rate was approximately $22 per month and will escalate by 3% each year to approximately $26 per month in 2026. The lease liability was determined by discounting future lease payments under the lease terms at a 10% per annum discount rate.

In April 2024, the Company entered into a 60-month financing lease for a forklift with a cost of $47. The lease has an interest rate of 8%, including a bargain purchase option to acquire the forklift at the end of the lease term for a payment of one dollar.

Operating lease right-of-use (“ROU”) assets and liabilities are recognized at the 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, 2026			Year ended February 28, 2025
(amounts in thousands)
Lease Cost
Operating lease cost (included in general and administration in the Company’s statement of operations)	$	261		$	352

Other Information
Cash paid for amounts included in the measurement of lease liabilities for the years ended February 28, 2026 and 2025, respectively	$	280		$	285
Weighted average remaining lease term – operating leases (in years)		0.7			1.7
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, 2026
Operating leases
Long-term right-of-use assets	$	156

Short-term operating lease liabilities	$	160
Long-term operating lease liabilities		21
Total operating lease liabilities	$	181

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

Year Ending February 28:	Operating Lease
2027	$	166
2028		11
2029		11
2030		1
2031		-
Total lease payments		189
Less: Imputed interest/present value discount		(8	)
Present value of lease liabilities	$	181

In June 2026, the Company amended its facility lease agreement to extend the lease term to August 2028 and revise the monthly lease payments. The amendment will be accounted for as a lease modification in June 2026, including remeasurement of the lease liability and corresponding right-of-use asset using the discount rate in effect on the modification date.