Related Party Transactions

9 Months Ended

May 31, 2017

Note 5.

Related Party Transactions

The Company leases two buildings under operating lease agreements from a trust beneficially owned by the Company’s Chief Executive Officer, Chairman of the Board and majority shareholder, Glen Ceiley (the “Trust”). During the three months ended May 31, 2017 and 2016, the Company incurred approximately $120,000 and $173,000, respectively, of expense related to these leases. During the nine months ended May 31, 2017 and 2016, the Company incurred approximately $446,000 and $519,000, respectively, of expense related to these leases. On May 19, 2017, the Company purchased the building that houses the Company’s existing corporate headquarters and Anaheim distribution center located at 1500 North Lakeview Avenue in Anaheim, California (“Lakeview Property”) from the Glen Ceiley Trust. The total purchase price of the Lakeview Property was $7,200,000. The purchase of the property was financed through borrowings on the line of credit of $1,800,000 and a loan with Community Bank in the amount of $5,400,000. (Note 3)