NOTE 6 – COMMITMENTS, CONTINGENCY 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 January 2029. Monthly payments related to these leases range from $2,500 to $28,000.

Expected future annual minimum rental payments under these leases follow:

Legal Contingency

The Company is involved in various legal proceedings in the ordinary course of business. Management cannot presently predict the outcome of these matters, although management believes, based in part on the advice of counsel, that the ultimate resolution of these matters will not have a materially adverse effect on the Company's consolidated financial position, results of operations or cash flows.

Related Parties

Mistral Capital Management, LLC ("Mistral"), an affiliate of the largest stockholder of the Company, performs management services for the Company under a contractual agreement. Management fees totaled approximately $100,000 for the thirteen weeks ended May 5, 2019 and May 6, 2018, and are included in selling, general and administrative expenses. Amounts payable to Mistral as of May 5, 2019 and February 3, 2019 were $103,443 and $0, respectively and are included in accounts payable in the accompanying balance sheets. In addition, the Company reimbursed Mistral for expenses incurred in the amount of $39,000 for sponsor related fees for the thirteen weeks ended May 5, 2019. There were no such reimbursements during the thirteen weeks ended May 6, 2018.

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 $25,000 for both the thirteen weeks ended May 5, 2019 and May 6, 2018 and are included in selling, general and administrative expenses. There were no amounts payable to Satori as of May 5, 2019 and February3, 2019.

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 of our directors are members and principals of Mistral or employees of Schottenstein Stores Corporation. The Company launched the Blueport platform in February 2018. There were $337,496 and $333,273 of fees incurred with Blueport sales transacted through the Commerce platform and on the conversion of the Commerce platform during the thirteen weeks ended May 5, 2019 and May 6, 2018, respectively. Amounts payable to Blueport as of May 5, 2019 and February 3, 2019 were $140,335 and $93,210, respectively, and are included in accounts payable and accrued expenses in the accompanying condensed consolidated balance sheets.