We account for leases in accordance with ASC 842 “Leases” (“ASC 842”). We determine whether an arrangement is a lease at inception. This determination generally depends on whether the arrangement conveys the right to control the use of an identified fixed asset explicitly or implicitly for a period of time in exchange for consideration.

We have operating leases for office equipment, as well as offices, warehouses, and other facilities used for our operations. We also have finance leases comprised primarily of computer hardware. Our leases have remaining lease terms of less than 1 year to 6 years, some of which include renewal options. We consider these renewal options in determining the lease term used to establish our right-of-use assets and lease liabilities when it is determined that it is reasonably certain that the renewal option will be exercised. The Company had no short-term leases during the three and nine months ended November 30, 2024.

On September 24, 2024, the Company executed a sale leaseback transaction, selling its real property in Lake Nona, Florida, consisting of a manufacturing facility and office space, to Aladdin Sane Realty, LLC ("the Purchaser") for $20,000. The net proceeds received from the transaction were approximately $13,600 after transactional costs of approximately $1,100 and repayment of the outstanding mortgage, which was $5,323 on September 24, 2024. The transaction qualified for sale leaseback accounting in accordance with ASC 842, "Leases." Concurrently with the sale, the Company entered into an operating lease arrangement ("lease") with the Purchaser for a small portion of the real property to continue to operate its automotive electronic sales office in Florida, with an initial term of five years. The Company recognized a gain related to the execution of the sale transaction of $7,299 for the three and nine months ended November 30, 2024, which is recorded in Other income (expense) on the Unaudited Consolidated Statements of Operations and Comprehensive (Loss) Income.

The components of lease cost for the three and nine months ended November 30, 2024 and 2023 were as follows:


	Three months ended November 30,				Nine months ended November 30,
	2024		2023		2024		2023
Operating lease cost (a) (c)	$	391	$	335	$	1,022	$	1,038
Finance lease cost:
Amortization of right of use assets (a)		78		79		296		248
Interest on lease liabilities (b)		17		10		47		18
Total finance lease cost	$	95	$	89		343	$	266

(a)

Recorded within Selling, General and administrative, Engineering and technical support, and Cost of sales on the Unaudited Consolidated Statements of Operations and Comprehensive (Loss) Income.

(b)

Recorded within Interest and bank charges on the Unaudited Consolidated Statements of Operations and Comprehensive (Loss) Income.

(c)

Includes immaterial amounts related to variable rent expense.

Supplemental balance sheet information related to leases is as follows:


	November 30, 2024			February 29, 2024
Operating Leases
Operating lease, right of use assets	$	5,067		$	2,577
Total operating lease right of use assets	$	5,067		$	2,577
Accrued expenses and other current liabilities	$	1,398		$	782
Operating lease liabilities, less current portion		3,728			1,884
Total operating lease liabilities	$	5,126		$	2,666
Finance Leases
Property, plant, and equipment, gross		3,835		$	3,835
Accumulated depreciation		(3,159	)		(2,863	)
Total finance lease right of use assets		676		$	972
Accrued expenses and other current liabilities	$	312		$	349
Finance lease liabilities, less current portion		399			644
Total finance lease liabilities	$	711		$	993
Weighted Average Remaining Lease Term
Operating leases	4.4 years			4.9 years
Finance leases	2.7 years			3.1 years
Weighted Average Discount Rate
Operating leases		5.73	%		4.12	%
Finance leases		8.69	%		8.45	%

Maturities of lease liabilities on November 30 of each of the succeeding years are as follows:


	Operating Leases		Finance Leases
2025	$	1,636		362
2026		1,260		236
2027		925		111
2028		880		92
2029		736		-
Thereafter		325		-
Total lease payments		5,762		801
Less imputed interest		636		90
Total	$	5,126		711

As of November 30, 2024, the Company has not entered into any lease agreements that have not yet commenced.

The Company owns and occupies buildings as part of its operations. Certain space within these buildings may, from time to time, be leased to third parties from which the Company earns rental income as lessor. This leased space is recorded within property, plant, and equipment and was not material to the Company's Consolidated Balance Sheets at November 30, 2024 and February 29, 2024. Rental income earned by the Company for the three and nine months ended November 30, 2024 and 2023 was $258 and $780, respectively, as compared to $237 and $702, respectively, and is recorded within Other income (expense).