Note 12 - Related Party Transactions

12 Months Ended

Oct. 31, 2020

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

 

Note

1

2

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Related party transactions

A portion of our operating leases are leased from K&K Unlimited, a company controlled by Darren Clark, the former owner and current President of Cables Unlimited. Cables Unlimited's monthly rent expense under the lease is

$13,000

per month, plus payments of all utilities, janitorial expenses, routine maintenance costs, and costs of insurance for Cables Unlimited's business operations and equipment. In

January 2020,

we began to pay an additional

$1,000

in rent expense for leased storage units located on the premises. During the fiscal year ended

October 31, 2020,

we paid a total of

$180,000

under the leases.

During fiscal

2020,

we paid royalties to Elmec Ltd. (“Elmec”), a European-based company that owns the intellectual property that is used in Schrofftech's products.  One

third

of Elmec is jointly owned by David Therrien and Richard DeFelice,

two

of the former owners and current President and Vice President, respectively, of Schrofftech.  For the year ended

October 31, 2020,

we paid a total of

$11,000

of royalty payments to Elmec, and have accrued an additional

$4,000

as of

October 31, 2020. 

The expenses related to these transactions are included in cost of goods sold.