Note 7 - Leases

9 Months Ended

Feb. 29, 2024

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

Note 7. Leases

Financing Leases

Financing leases as of February 29, 2024 and May 31, 2023:

	February 29, 2024			May 31, 2023
Non-cancellable financing leases	$	17,070		$	60,485
Less: Current portion		(15,288	)		(31,981	)
Non-cancellable financing leases, net of current portion	$	1,782		$	28,504

The production equipment under the remaining non-cancelable financing leases as of February 29, 2024, has a gross carrying amount of $63,457 as of February 29, 2024. Amortization of the carrying amount of $21,470 and $189,927 was included in depreciation expense for the nine months ended February 29(28), 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 three non-cancellable operating leases for (i) equipment with a fifty-two month term and a forty-eight month term and a discount rate of 5.40% and (ii) two buildings on a ten year lease with a five year renewal option and a discount rate of 6.00%. The leases are single-term with defined constant monthly rental rates.

Lease Summary Information

For the nine-months ended February 29(28), 2024 and 2023:

	2024			2023
Lease Expense
Financing lease expense -
Amortization of right-of-use assets	$	21,470		$	189,927
Interest on lease liabilities		1,415			30,614
Operating lease expense		454,893			335,378
Short-term lease expense		1,205,951			1,217,095
Total	$	1,683,729		$	1,773,014
Other Information
Cash paid for amounts included in the measurement of lease liabilities for finance leases -
Operating cash flows	$	1,415		$	30,614
Financing cash flows	$	11,650		$	626,329
Cash paid for amounts included in the measurement of lease liabilities for operating leases -
Operating cash flows	$	467,182		$	335,378
Weighted-average remaining lease term (in years) -
Financing leases		1.0			1.9
Operating leases		13.4			14.4
Weighted-average discount rate -
Financing leases		4.8	%		4.4	%
Operating leases		6.0	%		6.0	%

Future minimum lease payments under non-cancelable leases as of February 29, 2024, are approximately:

	Financing Leases		Operating Leases
Twelve months ended February 28, 2025	$	15,715	$	534,000
Twelve months ended February 28, 2026		1,798		534,000
Twelve months ended February 28, 2027		-		534,000
Twelve months ended February 29, 2028		-		549,610
Twelve months ended February 28, 2029		-		560,760
Thereafter		-		4,859,530
Total future minimum lease payments		17,513		7,571,900
Present value discount		443		2,396,681
Present value of minimum lease payments	$	17,070	$	5,175,219