v3.26.3
Subsequent Events
6 Months Ended
Aug. 31, 2026
Subsequent Events [Abstract]  
Subsequent Events

NOTE 16 - SUBSEQUENT EVENTS

Sale-Leaseback of the Durango Property

On September 29, 2026, the Board of Directors (the "Board") of the Company approved the sale-leaseback of the Company's property at 265 Turner Drive, Durango, Colorado (the "Durango Property") with American Heritage Legacies, LLC ("AHL"). AHL is a local company controlled by the family of Allen Harper, the Company's Interim Chief Executive Officer.

On September 30, 2026, the Company and AHL entered into a Contract to Buy and Sell Real Estate (Commercial) (the "Purchase Agreement"). Under the Purchase Agreement, the Company agreed to sell the Durango Property to AHL for $6.6 million. An independent appraisal of the Durango Property supported the purchase price. The Purchase Agreement also contains customary terms and conditions and closed on October 16, 2026. The Company used the net proceeds to repay an aggregate of $6.6 million of outstanding credit agreements (see Note 8). In connection with the repayment, the Company also incurred prepayment penalties and related costs of $0.3 million.

On October 1, 2026, the Company signed a lease with AHL for the continued use of the Durango Property (the "Lease"). The Lease commenced on October 16, 2026 and has an initial term of ten years, with an option to renew of an additional ten-year term. Annual base rent is $0.6 million, subject to a 2% escalation annually. The Company will continue to pay all costs of owning, operating and maintaining the Durango Property during the Lease term.

If the Company undergoes a Change of Control (as defined in the Lease), the Lease shall terminate in accordance with the terms of the Lease. In the event of a Change in Control, at AHL's option, the Company must buy back the Durango Property for the greater of $6.93 million or its appraised value. The Lease also includes other customary terms for an agreement of this kind.

The agreements described above in this Note 16 and the transactions contemplated thereby were reviewed and approved by the disinterested members of the Board and the Audit Committee of the Board in accordance with the Company's Related Party Transaction Policy.

Loan Agreement

On October 16, 2026, the Company entered into a loan agreement with Alpine Bank (the "Loan Agreement"). Pursuant to the Loan Agreement, the Company received an advance in the principal amount of $2.0 million, which is evidenced by a promissory note (the "Promissory Note"). The Promissory Note matures on October 16, 2028, and monthly payments of interest at Prime plus 1% are due in arrears. All outstanding principal and interest will be due on the maturity date. The Loan Agreement is collateralized by all assets.