A variable interest entity ("VIE") is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support, or (ii) has equity investors who lack the characteristics of a controlling financial interest. Under ASC 810 - Consolidation, an entity that holds a variable interest in a VIE and meets certain requirements would be considered to be the primary beneficiary of the VIE and required to consolidate the VIE in its consolidated financial statements. In order to be considered the primary beneficiary of a VIE, an entity must hold a variable interest in the VIE and have both:

On September 1, 2015, Voxx acquired a majority voting interest in substantially all of the assets and certain specified liabilities of EyeLock, Inc. and EyeLock Corporation, a market leader of iris-based identity authentication solutions, through a newly-formed entity, EyeLock LLC. The Company issued EyeLock LLC a promissory note for the purposes of repaying protective advances and funding working capital requirements of the entity. On August 21, 2019, this promissory note was amended and restated to allow EyeLock LLC to borrow up to $55,000. Through March 1, 2019, interest on the outstanding principal of the loan accrued at 10%. From March 1, 2019 forward, interest will accrue at 2.5%. The amended and restated promissory note is due on August 31, 2020. The outstanding principal balance of this promissory note is convertible at the sole option of Voxx into units of EyeLock LLC. If Voxx chooses not to convert into equity, the outstanding loan principal of the amended and restated promissory note will be repaid at a multiple of 1.50 based on the repayment date. The agreement includes customary events of default and is collateralized by all of the property of EyeLock LLC.

We concluded that we became the primary beneficiary of EyeLock LLC on September 1, 2015 in conjunction with the acquisition. This was the first date on which we had the power to direct the activities that most significantly impact the economic performance of the entity because we acquired a majority interest in substantially all of the assets and certain liabilities of EyeLock, Inc. and EyeLock Corporation on this date, as well as obtained a majority voting interest as a result of this transaction. Although we are considered to have control over EyeLock LLC under ASC 810, due to our majority ownership interest, the assets of EyeLock LLC can only be used to satisfy the obligations of EyeLock LLC. As a result of our majority ownership interest in the entity and our primary beneficiary conclusion, we consolidated EyeLock LLC within our consolidated financial statements beginning on September 1, 2015.

The following table sets forth the carrying values of assets and liabilities of EyeLock LLC that were included on our Consolidated Balance Sheets as of August 31, 2019 and February 28, 2019:

	August 31, 2019			February 28, 2019
Assets	(unaudited)
Current assets:
Cash and cash equivalents	$	81		$	3
Accounts receivable, net		183			363
Inventory, net		303			(27	)
Receivables from vendors		16			—
Prepaid expenses and other current assets		242			322
Total current assets		825			661
Property, plant and equipment, net		90			120
Intangible assets, net		31,533			33,064
Other assets		166			253
Total assets	$	32,614		$	34,098
Liabilities and Partners' Deficit
Current liabilities:
Accounts payable	$	350		$	1,122
Interest payable to VOXX		9,337			8,729
Accrued expenses and other current liabilities		864			1,030
Due to VOXX		49,996			44,937
Total current liabilities		60,547			55,818
Other long-term liabilities		1,200			1,200
Total liabilities		61,747			57,018
Commitments and contingencies
Partners' deficit:
Capital		41,416			41,416
Retained losses		(70,549	)		(64,336	)
Total partners' deficit		(29,133	)		(22,920	)
Total liabilities and partners' deficit	$	32,614		$	34,098

The following table sets forth the revenues and expenses of EyeLock LLC that were included in our Unaudited Consolidated Statements of Operations and Comprehensive (Loss) Income for the three and six months ended August 31, 2019, respectively:

	For the three months ended August 31,						For the six months ended August 31,
	2019			2018			2019			2018
Net sales	$	253		$	93		$	274		$	216
Cost of sales		343			26			414			36
Gross profit		(90	)		67			(140	)		180
Operating expenses:
Selling		161			296			362			624
General and administrative		1,157			1,317			2,377			2,543
Engineering and technical support		1,354			1,828			2,719			3,618
Total operating expenses		2,672			3,441			5,458			6,785
Operating loss		(2,762	)		(3,374	)		(5,598	)		(6,605	)
Interest and bank charges		(315	)		(982	)		(615	)		(1,887	)
Loss before income taxes		(3,077	)		(4,356	)		(6,213	)		(8,492	)
Income tax expense		—			—			—			—
Net loss	$	(3,077	)	$	(4,356	)	$	(6,213	)	$	(8,492	)