Leases

12 Months Ended

May 31, 2021

Leases [Abstract]

Leases

(3) Leases

The Company leases the space for its three offices in New York City, Hauppauge and New Jersey. Under ASC 842, at contract inception we determine whether the contract is or contains a lease and whether the lease should be classified as an operating or finance lease. Operating leases are in right-of-use assets and operating lease liabilities in our consolidated balance sheets.

The Company’s leases for its three offices are classified as operating leases.

The lease agreements for New York City, Hauppauge and New Jersey expire on August 31, 2022, December 31, 2023 and May 31, 2027, respectively, and do not include any renewal options. During the fiscal year ended May 31, 2021, the Company extended its lease in Hauppauge, entered into a lease in a new location for its New Jersey office, and entered into a sublease agreement for the remainder of the lease in New York City. Due to the fact that the future sublease lease cash inflows will be less than the carrying value of the corresponding right-of-use asset, the Company recorded a right-of-use asset impairment charge of $136,599 in the quarter ended November 30, 2020.

In addition to the monthly base amounts in the lease agreements, the Company is required to pay real estate taxes and operating expenses during the lease terms.

For the fiscal years ended May 31, 2021 and 2020, the Company’s operating lease expense for these leases was $385,000 and $417,000.

Future minimum lease payments under non-cancelable operating leases as of May 31, 2021 were as follows:

Twelve Months Ended May 31,
2022	$	371,155
2023		256,605
2024		179,035
2025		123,840
2026		126,936
Thereafter		130,109
Total undiscounted operating lease payments		1,187,680
Less imputed interest		170,580
Present value of operating lease payments	$	1,017,100

The following table sets forth the right-of-use assets and operating lease liabilities as of May 31, 2021:

Assets
Right-of-use assets	$	895,573
Liabilities
Current operating lease liabilities	$	309,731
Long-term operating lease liabilities		707,369
Total operating lease liabilities	$	1,017,100

The weighted average remaining lease term for the Company’s operating leases is 3.3 years.