Long-Term Debt	12 Months Ended
Aug. 31, 2019
Long-Term Debt
Long-Term Debt	Note 4. Long-Term Debt The Company currently has a $10,000,000 line of credit agreement with the Bank. On July 18, 2019, the Company entered into a Change in Terms Agreement dated July 12, 2019 with the Bank (the “Amendment”). The Amendment modifies the Company’s $10,000,000 line of credit between the Company and the Bank to: (i) extend the expiration date of the line of credit under the agreement from August 20, 2020 to July 5, 2021; (ii) change the monthly payment date to the fifth of every month; (iii) modify the variable interest rate on the line of credit, which is subject to change from time to time based on changes in the Lender's bank prime rate index; (iv) modify the interest rate option that the Company may select (subject to the requirements in the Amendment and provided that the Company is not in default under the line of credit agreement): to (A) The default variable interest index rate, which is Citizens Business Bank Prime Rate of Interest, which is the prime rate (5.25% at August 31, 2019) less 0.500%; or (B) One Hundred Eighty (180) day Libor Rate plus a margin of 1.550%; and (v) replace the preferred rate of interest with a discounted rate. The amounts outstanding under this line of credit as of August 31, 2019 is currently all under the default variable interest index rate of 4.75%. The line of credit agreement contains financial and other covenants that have not been modified by the Amendment. Borrowings under this agreement bear interest at the bank’s reference rate, which is the Prime Rate (5.25% at August 31, 2019 and 5.00% at August 31, 2018) less .500%. Borrowings are secured by substantially all of the assets of the Company and its subsidiary. The amounts outstanding under this line of credit as of August 31, 2019 and 2018 were $6,114,000 and $3,113,000, respectively. The line of credit agreement contains certain nonfinancial and financial covenants, including the maintenance of certain financial ratios. As of August 31, 2019 and August 31, 2018, the Company was in compliance with all such covenants. The Company also entered into a new Loan Agreement with the Bank to borrow up to $5 million (the "Construction Loan") for the primary purpose of financing tenant improvements at the Hunter Property, which will serve as the Company's new corporate headquarters. The Hunter Property is owned by a trust beneficially owned and controlled by Mr. Glen F. Ceiley, the Chief Executive Officer, Chairman of the Board and majority stockholder of EACO. The Construction Loan is a line of credit evidenced by a Promissory Note in the principal amount of up to $5,000,000 with a maturity date of May 15, 2027. The terms of the Construction Note provide that the Company may only request advances through July 15, 2020, and thereafter, the Construction Loan will convert to a term loan. Interest on the Construction Note is payable monthly, subject to variable interest rate based on the Bank's internal prime rate (5.25% at August 31, 2019). The balance of the Construction Loan at August 31, 2019 was $342,000. On May 15, 2017, the Company entered into a $5,400,000 loan agreement with the Bank. The proceeds of the loan were used to purchase the building that houses the Company’s corporate headquarters and distribution center located in Anaheim, California. This loan is payable in 35 regular monthly payments of $27,142 and one irregular last payment of $5,001,607 due on the maturity of the loan on May 16,2020. The loan is secured by a deed of trust to the Lakeview Property and a variable interest rate, which is 1.70% plus one year LIBOR (2.0% at August 31, 2019 and 2.8% at August 31, 2018). This rate can be periodically reset based on the one year LIBOR rate no more than once in any 12 month period at the election of the Bank. At August 31, 2018, the outstanding balance of this loan was $5,237,000. EACO has entered into a commercial guaranty agreement, pursuant to which EACO is the guarantor for the $5,400,000 loan. In September 2019, Bisco entered into the Purchase Agreement to sell the Lakeview Property for a cash purchase price of $7,075,000, which recently closed on November 19, 2019. Upon the closing, Bisco used the proceeds from the sale to repay all of the outstanding principal and accrued interest on the Lakeview Loan. See Note 11. EACO has also entered into a business loan agreement (and related $100,000 promissory note) with the Bank in order to obtain a $100,000 letter of credit as security for the Company’s workers compensation requirements.

Note 4. Long-Term Debt

The Company currently has a $10,000,000 line of credit agreement with the Bank. On July 18, 2019, the Company entered into a Change in Terms Agreement dated July 12, 2019 with the Bank (the “Amendment”). The Amendment modifies the Company’s $10,000,000 line of credit between the Company and the Bank to: (i) extend the expiration date of the line of credit under the agreement from August 20, 2020 to July 5, 2021; (ii) change the monthly payment date to the fifth of every month; (iii) modify the variable interest rate on the line of credit, which is subject to change from time to time based on changes in the Lender's bank prime rate index; (iv) modify the interest rate option that the Company may select (subject to the requirements in the Amendment and provided that the Company is not in default under the line of credit agreement): to (A) The default variable interest index rate, which is Citizens Business Bank Prime Rate of Interest, which is the prime rate (5.25% at August 31, 2019) less 0.500%; or (B) One Hundred Eighty (180) day Libor Rate plus a margin of 1.550%; and (v) replace the preferred rate of interest with a discounted rate. The amounts outstanding under this line of credit as of August 31, 2019 is currently all under the default variable interest index rate of 4.75%. The line of credit agreement contains financial and other covenants that have not been modified by the Amendment. Borrowings under this agreement bear interest at the bank’s reference rate, which is the Prime Rate (5.25% at August 31, 2019 and 5.00% at August 31, 2018) less .500%. Borrowings are secured by substantially all of the assets of the Company and its subsidiary. The amounts outstanding under this line of credit as of August 31, 2019 and 2018 were $6,114,000 and $3,113,000, respectively. The line of credit agreement contains certain nonfinancial and financial covenants, including the maintenance of certain financial ratios. As of August 31, 2019 and August 31, 2018, the Company was in compliance with all such covenants.

The Company also entered into a new Loan Agreement with the Bank to borrow up to $5 million (the "Construction Loan") for the primary purpose of financing tenant improvements at the Hunter Property, which will serve as the Company's new corporate headquarters. The Hunter Property is owned by a trust beneficially owned and controlled by Mr. Glen F. Ceiley, the Chief Executive Officer, Chairman of the Board and majority stockholder of EACO. The Construction Loan is a line of credit evidenced by a Promissory Note in the principal amount of up to $5,000,000 with a maturity date of May 15, 2027. The terms of the Construction Note provide that the Company may only request advances through July 15, 2020, and thereafter, the Construction Loan will convert to a term loan. Interest on the Construction Note is payable monthly, subject to variable interest rate based on the Bank's internal prime rate (5.25% at August 31, 2019). The balance of the Construction Loan at August 31, 2019 was $342,000.

On May 15, 2017, the Company entered into a $5,400,000 loan agreement with the Bank. The proceeds of the loan were used to purchase the building that houses the Company’s corporate headquarters and distribution center located in Anaheim, California. This loan is payable in 35 regular monthly payments of $27,142 and one irregular last payment of $5,001,607 due on the maturity of the loan on May 16,2020. The loan is secured by a deed of trust to the Lakeview Property and a variable interest rate, which is 1.70% plus one year LIBOR (2.0% at August 31, 2019 and 2.8% at August 31, 2018). This rate can be periodically reset based on the one year LIBOR rate no more than once in any 12 month period at the election of the Bank. At August 31, 2018, the outstanding balance of this loan was $5,237,000. EACO has entered into a commercial guaranty agreement, pursuant to which EACO is the guarantor for the $5,400,000 loan. In September 2019, Bisco entered into the Purchase Agreement to sell the Lakeview Property for a cash purchase price of $7,075,000, which recently closed on November 19, 2019. Upon the closing, Bisco used the proceeds from the sale to repay all of the outstanding principal and accrued interest on the Lakeview Loan. See Note 11.

EACO has also entered into a business loan agreement (and related $100,000 promissory note) with the Bank in order to obtain a $100,000 letter of credit as security for the Company’s workers compensation requirements.