5. Commitments and Contingencies

Operating Lease Agreements—The Company has several operating leases with unrelated parties, primarily for land, plant and office spaces in Taiwan, which are including cancellable and noncancellable and which expire at various dates between February 2018 and December 2020. Lease expense related to these noncancellable operating leases was $112 thousand and $82 thousand for the three months ended November 30, 2016 and 2015, respectively. Lease expense is recognized on a straight-line basis over the term of the lease.

The aggregate future noncancellable minimum rental payments for the Company’s operating leases as of November 30, 2016 consisted of the following (in thousands):


	Operating
Years Ending August 31,	Leases
Remainder of 2017	$	356
2018		264
2019		109
2020		90
2021		30
Thereafter		—
Total	$	849

Purchase Obligations—The Company had purchase commitments for inventory, property, plant and equipment in the amount of $1.5 million as of both November 30, 2016 and August 31, 2016.

Litigation—The Company is directly or indirectly involved from time to time in various claims or legal proceedings arising in the ordinary course of business. The Company recognizes a liability when it is probable that a loss has been incurred and the amount is reasonably estimable. There is significant judgment required in assessing both the likelihood of an unfavorable outcome and whether the amount of loss, if any, can be reasonably estimated. As of November 30, 2016, there was no pending or threatened litigation that could have a material impact on the Company’s financial position, results of operations or cash flows.