NOTE 11 – LEASING ARRANGEMENTS

The Company conducts its retail operations in facilities leased under non-cancelable operating leases of up to ten years. Certain leases contain renewal options for between one and five additional years at increased monthly rentals. Some of the leases provide for contingent rentals based on sales in excess of predetermined base levels.

The Company also leases trucking equipment in support of its production operations. Expenses associated with trucking are included in cost of sales on the condensed consolidated statements of operations.

The Company entered into two new leases during the six months ended August 31, 2026 for its Nashville, TN location for 10 years and Chino Hills, CA location for 29 months with total future lease liability of $0.6 million. The Company entered into two new leases during the six months ended August 31, 2025 for its Camarillo, CA location for 10 years and Miami, FL location for 18 months with total future lease liability of $0.6 million.

The Company accounts for payments related to lease liabilities on a straight-line basis over the lease term. During the six months ended August 31, 2026 and 2025, lease expense recognized in the condensed consolidated statements of operations was $0.4 million and $0.2 million, respectively.

The lease liability reflects the present value of the Company’s estimated future minimum lease payments over the life of its leases. This includes known escalations and renewal option periods reasonably assured of being exercised. Typically, renewal options are considered reasonably assured of being exercised if the sales performance of the location remains strong. Therefore, the right of use asset and the lease liability include an assumption on renewal options that have not yet been exercised by the Company and are not currently a future obligation. The Company has separated non-lease components from lease components in the recognition of the asset and liability except in instances where such costs were not practical to separate. To the extent that occupancy costs, such as site maintenance, are included in the asset and liability, the impact is immaterial. For franchised locations, the related occupancy costs including property taxes, insurance and site maintenance are generally required to be paid by the franchisees as part of the franchise arrangement. In addition, the Company is the lessee under non-store-related leases for trucking equipment and office space. For leases where the implicit rate is not readily determinable, the Company uses an incremental borrowing rate to calculate the lease liability that represents an estimate of the interest rate the Company would incur to borrow on a collateralized basis over the term of a lease. The weighted average discount rate used for

operating leases was 11.56% and 10.29% as of August 31, 2026 and February 28, 2026, respectively. The total estimated future minimum lease payments are $2.9 million as of August 31, 2026.

The weighted average lease term was 8.6 years and 8.4 years at August 31, 2026 and February 28, 2026, respectively.

The Company did not have any leases categorized as finance leases as of August 31, 2026 or February 28, 2026.