8. COMMITMENTS

In connection with the purchase of the facility, disclosed in Note 3, we entered into a 15-year lease with the seller, a non-related third party, who leases 181,300 square feet, or 45.3% of the facility. The lease is being accounted for as an operating lease.

The cost of the leased space upon acquisition was estimated at $10,159,000, which was also the carrying cost as of February 28, 2017. The accumulated depreciation associated with the leased assets was $438,700 and $88,000 for the fiscal years ended February 28, 2017 and February 29, 2016, respectively. Both the leased assets and accumulated depreciation are included in property, plant and equipment-net in the balance sheet.

The lease requires payments of $105,800 per month starting December 1, 2015, with a 2.0% annual increase adjustment on each anniversary date thereafter. The lease terms allow for one five-year extension, which is not a bargain renewal option, at the expiration of the 15-year term. Revenue associated with the lease is being recorded on a straight-line basis and is reported in other income on the statement of earnings.

The following table reflects future minimum rental income payments under the non-cancellable portion of this lease as of February 28, 2017:

	Year Ending February 28,

2018	$	1,301,000
2019		1,327,000
2020		1,353,500
2021		1,380,600
2022		1,408,200
Thereafter		13,584,100
Total	$	20,354,400

At February 28, 2017, we had outstanding purchase commitments for inventory totaling approximately $5,969,800, which is due during fiscal year 2018. Of these commitments, $2,037,600 were with Usborne, $3,836,400 with various Kane Miller publishers and the remaining $95,700 with other suppliers.

Rent expense for the year ended February 28, 2017 and February 29, 2016 was $69,500 and $26,100, respectively. As of February 28, 2017, we did not have any lease commitments in excess of one year.