Related Party Agreements

9 Months Ended

Sep. 29, 2018

Related Party Agreements

Related Party Agreements

Note 10—Related‑Party Agreements

We have entered into a management services agreement with Cortec Group Fund V, L.P. and its affiliates (“Cortec”), our majority stockholder, that provides for a management fee to be based on 1.0% of total sales, not to exceed $0.8 million annually, plus certain out‑of‑pocket expenses. During each of the nine months ended September 29, 2018 and September 30, 2017, we incurred fees and out‑of‑pocket expenses under this agreement totaling approximately $0.8 million, which were included in selling, general, and administrative expenses. We incurred no expense for these management fees during the three months ended September 29, 2018 and September 30, 2017. This agreement was terminated on October 24, 2018 and no further payments are due to Cortec.

We lease warehouse and office facilities under various operating leases. One warehouse facility is leased from an entity owned by our Founders, Roy and Ryan Seiders. The lease, which is month to month and can be cancelled upon 30 days written notice, requires monthly payments of $8,700 and is included in selling, general, and administrative expenses.