NOTE 6 - COMMITMENTS, CONTINGENCIES AND RELATED PARTIES

OPERATING LEASE COMMITMENTS

The Company leases its office, warehouse facilities and retail showrooms under operating lease agreements which expire at various dates through November 2027. Monthly payments related to these leases range from $2,500 to $45,600. Total rent expense including common area maintenance charges sales percentage rent and deferred rent expense was $19,676,958 in fiscal 2020 and $16,245,590 in fiscal 2019.

Expected future annual minimum rental payments under these leases follow:

The above disclosure includes lease extensions for various retail showrooms the Company entered into after year end.

SEVERANCE CONTINGENCY

The Company has various employment agreements with its senior level executives. A number of these agreements have severance provisions, ranging from 12 to 18 months of salary, in the event those employees are terminated without cause. The total amount of exposure to the Company under these agreements was $3,670,533 at February 2, 2020 if all executives with employment agreements were terminated without cause and the full amount of severance was payable.

RELATED PARTIES

Mistral performs management services for the Company under a contractual agreement. Management fees totaled approximately $400,000 in both fiscal 2020 and in fiscal 2019 and are included in selling, general and administrative expenses. There was $2,000 payable to Mistral as of February 2, 2020 and no amounts payable to Mistral as of February 3, 2019. The amounts payable to Mistral as of February 2, 2020 are included in accrued liabilities in the accompanying consolidated balance sheet. In addition, the Company reimbursed Mistral for expenses incurred in the amount of $44,140 and $55,015 for out of pocket expenses for fiscal 2020 and fiscal 2019, respectively. Transaction fees related to the IPO were $500,000 in fiscal 2019 and are included in selling, general and administrative expenses. There were no such transactions fees related to the IPO for fiscal 2020.

Satori Capital, LLC ("Satori"), an affiliate of two stockholders of the Company since April 2017, performs management services for the Company under a contractual agreement. Management fees totaled approximately $100,000 in both fiscal 2020 and fiscal 2019 and are included in selling, general and administrative expenses. Amounts payable to Satori as of February 2, 2020 were $95,000 consisting of $25,000 in management fees and $70,000 of reimbursable expenses which were included in accounts payable and accrued liabilities in the accompanying consolidated balance sheet as of February 2, 2020, respectively. A one-time stock bonus of 50,000 shares of common stock at $14.83 per share, or $741,500, is included in equity-based compensation on the accompanying consolidated statement of changes in stockholders' equity and issued on June 22, 2018. The bonus was issued to Satori in three installments; two equal installments of 5,000 shares of common stock in August 2018 and September 2018 and the remainder of the shares were issued in October 2018. All fees and the stock bonus are included in selling, general and administrative expenses in the accompanying condensed statements of operations. There were no amounts payable to Satori as of February 3, 2019. In addition, the Company reimbursed Satori for expenses incurred in the amount of $70,000 and $0 for out of pocket expenses for fiscal 2020 and fiscal 2019, respectively. Transaction fees related to the IPO were $125,000 fiscal 2019 and are included in selling, general and administrative expenses. There were no such transactions fees related to the IPO for fiscal 2020.

The Company engaged Blueport Commerce ("Blueport"), a company owned in part by investment vehicles affiliated with Mistral and an affiliate of Schottenstein Stores Corporation, an indirect investor in SAC Acquisition LLC, our largest shareholder, to evaluate a transition plan to convert to the Blueport platform. Certain directors are members and principals of Mistral or employees of Schottenstein Stores Corporation. The Company launched the Blueport platform in February 2018. There were $1,833,154 and $1,153,844 of fees incurred with Blueport sales transacted through the Commerce platform and on the conversion of the Commerce platform during fiscal 2020 and fiscal 2019, respectively. Amounts payable to Blueport as of February 2, 2020 and February 3, 2019 were $150,508 and $93,211, respectively, and are included in accounts payable in the accompanying consolidated balance sheets.