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 June 2, 2020, this promissory note was amended and restated to allow EyeLock LLC to borrow up to $57,500. Through March 1, 2019, interest on the outstanding principal of the loan accrued at 10%. From March 1, 2019 forward, interest accrues 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 May 31, 2020 and February 29, 2020:

	May 31, 2020			February 29, 2020
Assets	(unaudited)
Current assets:
Cash and cash equivalents	$	7		$	—
Accounts receivable, net		85			147
Inventory, net		2,292			2,052
Prepaid expenses and other current assets		217			313
Total current assets		2,601			2,512
Property, plant and equipment, net		52			69
Intangible assets, net		2,532			2,600
Other assets		60			76
Total assets	$	5,245		$	5,257
Liabilities and Partners' Deficit
Current liabilities:
Accounts payable	$	2,024		$	2,086
Interest payable to VOXX		10,344			9,994
Accrued expenses and other current liabilities		423			252
Due to VOXX		55,740			54,074
Total current liabilities		68,531			66,406
Other long-term liabilities		1,200			1,200
Total liabilities		69,731			67,606
Commitments and contingencies
Partners' deficit:
Capital		41,416			41,416
Retained losses		(105,902	)		(103,765	)
Total partners' deficit		(64,486	)		(62,349	)
Total liabilities and partners' deficit	$	5,245		$	5,257

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 months ended May 31, 2020 and 2019, respectively:

	For the three months ended May 31,
	2020			2019
Net sales	$	97		$	21
Cost of sales		119			71
Gross profit		(22	)		(50	)
Operating expenses:
Selling		177			201
General and administrative		429			1,220
Engineering and technical support		1,155			1,365
Total operating expenses		1,761			2,786
Operating loss		(1,783	)		(2,836	)
Other expense:
Interest and bank charges		(354	)		(300	)
Total other expense, net		(354	)		(300	)
Loss before income taxes		(2,137	)		(3,136	)
Income tax expense		—			—
Net loss	$	(2,137	)	$	(3,136	)