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 $30,000.

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 condensed 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 and $200,000 for the thirteen and twenty-six weeks ended August 4, 2019 and August 5, 2018 respectively, and are included in selling, general and administrative expenses. There were no amounts payable to Mistral as of August 4, 2019 and February 3, 2019. In addition, the Company reimbursed Mistral for expenses incurred in the amount of $39,000 and $0 for management related fees for the twenty-six weeks ended August 4, 2019 and August 5, 2018, respectively. There were no such reimbursements during the thirteen weeks ended August 4, 2019 and August 5, 2018, respectively. Management fees related to the IPO were $500,000 for the thirteen and twenty-six weeks ended August 5, 2018 and are included in selling, general and administrative expenses. There were no such management fees for the thirteen and twenty-six weeks ended August 4, 2019.

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 and $50,000 for the thirteen and twenty-six weeks ended August 4, 2019 and August 5, 2018 respectively, and are included in selling, general and administrative expenses. Amounts payable to Satori as of August 4, 2019 and February 3, 2019 were $25,000 and $0 respectively and are included in accounts payable on the accompanying condensed balance sheets. Management fees related to the IPO were $125,000 for the thirteen and twenty-six weeks ended August 5, 2018 and are included in selling, general and administrative expenses. There were no such management fees for the thirteen and twenty-six weeks ended August 4, 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 directors are members and principals of Mistral or employees of Schottenstein Stores Corporation. The Company launched the Blueport platform in February 2018. There were $430,335 and $218,270 of fees incurred with Blueport sales transacted through the Commerce platform and on the conversion of the Commerce platform during the thirteen weeks ended August 4, 2019 and August 5, 2018 and $767,831 and $551,543 during the twenty-six weeks ended August 4, 2019 and August 5, 2018, respectively. Amounts payable to Blueport as of August 4, 2019 and February 3, 2019 were $0 and $93,210, respectively, and are included in accrued expenses in the accompanying condensed consolidated balance sheets.