Unless specifically indicated otherwise, all amounts presented in our MD&A below are in thousands, except share and per share data.

The Company continues to focus on cash flow and anticipates having sufficient resources to operate for the coming twelve-month period.

Products included in these segments are as follows:

mobile multi-media infotainment products, including overhead, seat-back, and headrest systems;

automotive security, vehicle access, and remote start systems;

satellite radios, including plug and play models, and direct connect models;

rear observation and collision avoidance systems;

automotive sensing and camera systems;

wired, wireless, and Bluetooth headphones and ear buds;

Bluetooth headphones and ear buds;

DLNA (Digital Living Network Alliance) compatible devices;

High-Definition Multimedia Interface ("HDMI") accessories;

home electronic accessories such as cabling, power cords, and other connectivity products;

flat panel TV mounting systems;

power supply systems and charging products;

Our objective is to continue to grow our business by acquiring new brands, embracing new technologies, expanding product development, and applying this to a continued stream of new products that should increase gross margins and improve operating

Critical Accounting Policies and Estimates

The following tables set forth, for the periods indicated, certain statements of operations data for the three and six months ended August 31, 2022 and 2021.

Gross Profit and Gross Margin Percentage

For the three months ended August 31, 2022, the Company recorded an income tax benefit of $708, which includes a discrete income tax benefit of $9 related primarily to the remeasurement of state deferred taxes based on law changes enacted during the quarter. For the three months ended August 31, 2021, the Company recorded an income tax benefit of $217, which includes a

discrete income tax benefit of $70 related primarily to the reversal of uncertain tax position liabilities as a result of the lapse of the applicable statute of limitations.

Cash Flows, Commitments and Obligations

The obligations under the Credit Facility documents are secured by a general lien on and security interest in substantially all of the assets of the borrowers and certain of the guarantors, including accounts receivable, equipment, real estate, general intangibles, and inventory. The Company has guaranteed the obligations of the borrowers under the Agreement.

Certain contractual cash obligations and other commercial commitments will impact our short and long-term liquidity. At August 31, 2022, such obligations and commitments are as follows:

Represents amounts outstanding under the Company's Credit Facility and the VOXX Germany asset-based lending facility at August 31, 2022.

We issue standby and commercial letters of credit to secure certain purchases and insurance requirements.

This amount represents the outstanding balances of the mortgage for our manufacturing facility in Florida and the shareholder loan payable to Sharp.

Represents the contingent liability payable to Onkyo Home Entertainment Corp. for future purchases of certain product inventory.

Represents the liability for an employer defined benefit pension plan covering certain eligible current and former employees of Voxx Germany.

Open purchase obligations represent inventory commitments. These obligations are not recorded in the consolidated financial statements until commitments are fulfilled given that such obligations are subject to change based on negotiations with manufacturers.

We do not maintain any off-balance sheet arrangements, transactions, obligations, or other relationships with unconsolidated entities that would be expected to have a material current or future effect upon our financial condition or results of operations.

We are required to adopt certain new accounting pronouncements. See Note 24 to our consolidated financial statements included herein.

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