Commitments and Contingencies

12 Months Ended

Aug. 31, 2025

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 8. Commitments and Contingencies

Legal Matters

From time to time, the Company may be subject to legal proceedings and claims which arise in the normal course of our business. Any such matters and disputes could be costly and time consuming, subject the Company to damages or equitable remedies, and divert management and key personnel from core business operations.

In January 2023, a class action lawsuit was filed with the Los Angeles County Superior Court against Bisco, alleging wage and hour violations and related claims. The class action covers a class of former and current employees of Bisco who were employed between January 13, 2019 and the present time. In March 2023, Plaintiff filed a First Amended Complaint that added claims under the California Private Attorneys General Act (“PAGA”). Both parties requested to stay the litigation pending mediation, which mediation commenced in April 2024. As a result of the mediation, the parties agreed in principle to settle this matter for approximately $7,500,000 which settlement amount, inclusive of payroll taxes, was increased to $7,795,000 in May 2025. In July 2025, the court approved the settlement.  In anticipation of this settlement, the Company accrued $7,390,000 and $285,000 in fiscal 2024 and fiscal 2023, respectively, and an additional $120,000 was accrued in fiscal 2025 to cover the remaining settlement expense. The Company made the full settlement payment in September 2025.

Operating Lease Obligations

The Company leases its facilities and automobiles under operating lease agreements (one leased facility is currently leased from the Trust, which is beneficially owned by the Company’s Chief Executive Officer, Chairman of the Board and majority shareholder – see Note 10), which expire on various dates through September 2029 and require minimum rental payments ranging from $1,000 to $28,000 per month. Certain of the leases contain options for renewal under varying terms.

On October 20, 2023, the Company purchased the Hunter Property from the Trust for a purchase price of $31,000,000 in cash. The Hunter Property was also previously leased from the Trust, which lease terminated upon the completion of the purchase. See Notes 2 and 10 for further explanation.

Minimum future rental payments under operating leases are as follows:

Years Ending August 31:
2026	$	3,166,000
2027		2,416,000
2028		1,283,000
2029		658,000
2030		183,000
Thereafter		309,000
Future minimum lease payments	$	8,015,000
Less interest		867,000
Present value of minimum lease payments	$	7,148,000

Operating lease cost under these leases was approximately $3,419,000 and $2,987,000 for fiscal years ended August 31, 2025 and 2024, respectively.

Other information related to operating leases is as follows:

	Years Ended August 31,
	2025		2024
Weighted average remaining lease term	2.8	years	3.1	years
Weighted average discount rate	7.2	%	7.5	%

The discount rate used on the operating right-of-use assets represented the Company’s incremental borrowing rate at lease inception.