Leases

3 Months Ended

Nov. 30, 2024

Note 5. Leases

The Company leases its facilities and automobiles under operating lease agreements (one facility is leased from the Trust, which is beneficially owned by the Company’s Chief Executive Officer, Chairman of the Board and majority shareholder), which expire on various dates through September 2027 and require minimum rental payments ranging from $1,000 to $22,600 per month. Certain of the leases contain options for renewal under varying terms.

On October 20, 2023, The Company purchased the Hunter Property from the Trust for a purchase price of $31,000,000. See Note 7 of the Notes to Consolidated Financial Statements of this report for further explanation.

Minimum future rental payments under operating leases are as follows:


Years Ending :
2025 (remaining nine months)	$	2,374,000
2026		2,552,000
2027		1,657,000
2028		728,000
2029		517,000
Thereafter		36,000
Future minimum lease payments	$	7,864,000
Less interest		(842,000)
Present value of minimum lease payments	$	7,022,000

Operating lease cost under these leases was approximately $804,000 and $832,000 for the three months ended November 30, 2024 and 2023, respectively.

Other information related to operating leases is as follows:


	November 30,		August 31,
	2024		2024
Weighted average remaining lease term	3.0 years		3.1 years
Weighted average discount rate	7.53	%	7.47	%

The discount rate used on the operating right-of-use assets represented the Company’s incremental borrowing rate at lease inception.

EACO CORP 10-Q