Note 7 - Leases

3 Months Ended

Aug. 31, 2023

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

Note 7. Leases

Financing Leases

Financing leases as of August 31, 2023 and May 31, 2023 were as follows:

	August 31, 2023			May 31, 2023
Non-cancellable financing leases	$	50,518		$	60,485
Less: Current portion		(27,689	)		(31,981	)
Non-cancellable financing leases, net of current portion	$	22,829		$	28,504

The production equipment under the non-cancelable financing leases as of August 31, 2023 and May 31, 2023 was as follows:

	August 31, 2023			May 31, 2023
Production equipment under financing leases	$	176,565		$	176,565
Less: Accumulated amortization		(103,146	)		(95,447	)
Production equipment under financing leases, net	$	73,419		$	81,118

Amortization of the carrying amount of $7,699 and $218,914 was included in depreciation and amortization expense for the three months ended August 31, 2023 and 2022, 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 three non-cancellable operating leases for (i) equipment with a 52-month term and a 60-month term at a discount rate of 5.40% and (ii) two buildings owned by GRE with a 120-month term, with a 60-month renewal option and a discount rate of 6.0%. The leases are single term with constant monthly rental rates.

Lease Summary Information

Lease summary information as of and for the periods ending August 31, 2023 and 2022 was as follows:

	2023			2022
Lease Expense
Financing lease expense -
Amortization of right-of-use assets	$	7,699		$	218,914
Interest on lease liabilities		600			19,509
Operating lease expense		183,957			52,970
Short-term lease expense		360,353			395,810
Total	$	552,609		$	687,203
Other Information
Cash paid for amounts included in the measurement of lease liabilities for finance leases -
Operating cash flows	$	600		$	19,509
Financing cash flows	$	9,947		$	419,120
Cash paid for amounts included in the measurement of lease liabilities for operating leases -
Operating cash flows	$	177,217		$	52,970
Weighted-average remaining lease term (in years) -
Financing leases		1.6			1.1
Operating leases		13.9			14.8
Weighted-average discount rate -
Financing leases		4.3	%		7.3	%
Operating leases		6.0	%		6.0	%

Future minimum lease payments under non-cancelable leases as of August 31, 2023, are approximately:

	Financing Leases		Operating Leases
Twelve months ending August 31, 2024	$	34,374	$	546,910
Twelve months ending August 31, 2025		14,818		534,000
Twelve months ending August 31, 2026		3,009		534,000
Twelve months ending August 31, 2027		-		536,230
Twelve months ending August 31, 2028		-		560,760
Thereafter		-		5,139,910
Total future minimum lease payments		52,201		7,851,810
Present value discount		1,683		2,552,837
Present value of minimum lease payments	$	50,518	$	5,298,973