Item 2. Properties
ITEM 2 – PROPERTIES
Our corporate headquarters is in Lancaster, California,
where we lease 9,255 square feet of office space. The term of the lease extends to January 31, 2026 and the base rent is approximately
$17 thousand per month. The lease agreement gives the Company the right, upon 180 days’ prior notice, to opt out of all or part
of the last four years of the term, with no penalty.
We lease 12,623 square feet of office space in
Buffalo, New York. The initial five-year lease term expired in October 2018 and was renewed for a three-year option, extending it to November
2021, at a base rent of approximately $16 thousand per month. On August 3, 2021, a new lease agreement for a different property was signed
for a five-year term at a base rent of approximately $7 thousand per month with an annual 2% increase, and with two, five-year renewal
options. Due to ongoing construction, the Company has not yet moved into the new property but anticipates doing so and commencing the
lease term no later than November 2021.
We lease approximately 2,700 square feet of space
in Research Triangle Park, North Carolina. The initial three-year term was due to expire in October 2020. An amendment to the initial
lease became effective April 1, 2020, which added 686 square feet and extended the term of the lease to September 30, 2023. The new base
rent is approximately $8 thousand per month with an annual 3% increase.
We lease approximately 2,300 square feet of office
space in Paris, France. As of April 1, 2020, the lease agreement had minimum payments equaling approximately $288 thousand. The lease
is for a 9-year term, with an option to terminate every 3 years, and expires in November of 2024. The base rent is $16 thousand per quarter
(approximately $5.3 thousand per month) and can be adjusted each December based on a consumer price index.
Rent expense, including common area maintenance
fees for the years ended August 31, 2021, 2020, and 2019 was $655 thousand, $644 thousand, and $584 thousand, respectively.
The Company believes its existing facilities and
equipment are in good operating condition and are suitable for the conduct of its business.
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