Note 7 - Leases

3 Months Ended

Aug. 31, 2024

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

Note 7. Leases

Financing Leases

The outstanding liability for financing leases, as of August 31, 2024 and May 31, 2024, was as follows:

	August 31, 2024			May 31, 2024
Non-cancellable financing leases	$	17,455		$	23,143
Less: Current portion		(14,505	)		(19,171	)
Non-cancellable financing leases, net of current portion	$	2,950		$	3,972

The production equipment under the non-cancelable financing leases as of August 31, 2024 and May 31, 2024 was as follows:

	August 31, 2024			May 31, 2024
Production equipment under financing leases	$	97,047		$	176,565
Less: Accumulated amortization		(59,294	)		(119,759	)
Production equipment under financing leases, net	$	37,753		$	56,806

Amortization of the carrying amount of $4,045 and $7,699 was included in depreciation and amortization expense for the three months ended August 31, 2024 and 2023, respectively.

Operating Leases

Greystone recognized a lease liability for each lease based on the present value of remaining minimum fixed rental payments, using a discount rate that approximates the rate of interest for a collateralized loan over a similar term. A right-of-use asset is recognized for each lease, valued at the lease liability. Minimum fixed rental payments are recognized on a straight-line basis over the life of the lease as costs and expenses on the consolidated statements of income. Variable and short-term rental payments are recognized as costs and expenses as they are incurred.

Greystone has two non-cancellable operating leases for (i) two buildings owned by GRE with a 120-month term, a 60-month renewal option and a discount rate of 6.0% and (ii) the corporate offices located in Tulsa, OK with a 72-month lease and a discount rate of 8.5%. The leases are single term with constant monthly rental rates.

The outstanding liability for right to use assets under operating leases as of August 31, 2024 and May 31, 2024, is as follows:

	August 31, 2024			May 31, 2024
Liability under operating leases	$	5,383,704		$	5,453,234
Less: Current portion		(239,543	)		( 286,221	)
Long-term portion of liability under operating leases	$	5,144,161		$	5,167,013

Lease Summary Information

Lease summary information as of and for the periods ending August 31, 2024 and 2023 was as follows:

	2024			2023
Lease Expense
Financing lease expense -
Amortization of right-of-use assets	$	4,045		$	7,699
Interest on lease liabilities		203			600
Operating lease expense		159,635			183,957
Short-term lease expense		385,095			360,353
Total	$	548,978		$	552,609
Other Information
Cash paid for amounts included in the measurement of lease liabilities for finance leases -
Operating cash flows	$	203		$	600
Financing cash flows	$	5,656		$	9,947
Cash paid for amounts included in the measurement of lease liabilities for operating leases -
Operating cash flows	$	153,541		$	177,217
Weighted-average remaining lease term (in years) -
Financing leases		1.0			1.6
Operating leases		12.5			13.9
Weighted-average discount rate -
Financing leases		3.9	%		4.3	%
Operating leases		6.1	%		6.0	%

Future minimum lease payments under non-cancelable leases as of August 31, 2024, are approximately:   

	Financing Leases		Operating Leases
Twelve months ending August 31, 2025	$	14,818	$	609,000
Twelve months ending August 31, 2026		3,009		609,000
Twelve months ending August 31, 2027		-		611,230
Twelve months ending August 31, 2028		-		635,760
Twelve months ending August 31, 2029		-		635,760
Thereafter		-		4,604,150
Total future minimum lease payments		17,827		7,704,900
Less: Imputed interest		372		2,321,196
Present value of minimum lease payments	$	17,455	$	5,383,704