Related Party Transactions

3 Months Ended

Nov. 30, 2017

Note 5. Related Party Transactions

The Company leases buildings under operating lease agreements from its majority shareholder, who is also the Company’s Chairman and CEO. During the three months ended November 30, 2017 and 2016, the Company incurred approximately $68,000 and $163,000, respectively, of expense related to these leases.

On November 21, 2017, the Company entered into a Commercial and Industrial Lease Agreement (the “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 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 Lease.