Note 12 - Related Party Transactions

6 Months Ended

May 31, 2020

)

Related Party Transactions

During the

three

and

six

months ended

May 31, 2020

and

May 31, 2019,

the Company did

not

recognize any revenues from transactions with a related party, and

amounts in accounts receivable balances were due from a related party. From time to time, the Company purchases various supplies from related parties, which are companies owned by J. Ward McConnell, Jr., the Vice Chairman of the Company’s Board of Directors. Marc McConnell, the Chairman of the Company’s Board of Directors, also serves as President of these companies. J. Ward McConnell, Jr., as a shareholder owning more than

20%

of the Company’s outstanding stock, was required to guarantee a portion of the Company’s Term Loan in accordance with the USDA guarantee on the Company’s Term Loan. J. Ward McConnell, Jr. is paid a monthly fee for his guarantee. During the

three

and

six

months ended

May 31, 2020,

the Company recognized expense of

$5,314

and

$9,902,

respectively, for transactions with related parties, compared to

$6,501

and

$14,649

for the same periods of fiscal

2019,

respectively. On

May 31, 2020,

accrued expenses contained a balance of

$1,540

owed to a related party compared to

$1,594

May 31, 2019.