Related Party Transactions

12 Months Ended

Aug. 31, 2020

Related Party Transactions

Related Party Transactions

Note 9. Related Party Transactions

On November 21, 2017, the Company entered into the Chicago Lease with the Trust, which is the grantor trust of Glen Ceiley, our Chief Executive Officer, Chairman of the Board and the Company’s majority shareholder, for the lease of a facility in Glendale Heights, Illinois.  The Company relocated its Chicago sales office and distribution center to this facility in December 2017.   The Chicago Lease is a ten year lease with an initial monthly rental rate of $22,600, which is subject to annual rent increases of approximately 2.5% as set forth in the Chicago Lease.  The foregoing description of the Chicago Lease does not purport to be complete and is qualified in the entirety by reference to the Chicago Lease as filed as Exhibit 10.33 to the Company’s Annual Report on Form 10-K for the year ended August 31, 2019 as filed with the SEC on November 27, 2019.

On July 26, 2019, the Company entered into the Hunter Lease with the Trust, for the lease of the Hunter Property, which houses the Company’s new corporate headquarters. The Company completed its move to the new headquarters located at the Hunter Property in March 2020.  The term of the Hunter Lease commenced on September 2, 2019 and ends on August 31, 2029 with an initial monthly rental rate of $66,300, which is subject to annual rent increases of approximately 2.5% as set forth in the Hunter Lease.  The foregoing description of the Lease does not purport to be complete and is qualified in the entirety by reference to the lease as filed as Exhibit 10.1 in its Current Report on Form 8-K as filed with the SEC on August 1, 2019.

During fiscal 2020 and fiscal 2019, the Company paid approximately $809,000 and $277,000, respectively, of rent related to all leases with the Trust.