Note 8 - Leases

9 Months Ended

Feb. 28, 2026

Note 8. Leases

Financing Leases

The outstanding liability for financing leases is as follows:

	February 28,		May 31,
	2026		2025
Non-cancelable financing leases	$	-	$	4,457
Less: Current portion		-		(4,457	)
Non-cancelable financing leases, net of current portion	$	-	$	-

The production equipment under the non-cancelable financing leases is as follows:

	February 28,			May 31,
	2026			2025
Production equipment under financing leases	$	24,431		$	24,431
Less: Accumulated amortization		(21,174	)		(17,509	)
Production equipment under financing leases, net	$	3,257		$	6,922

Amortization of the carrying amount of $3,665 and $10,660 was included in depreciation and amortization expense for the nine months ended February 28, 2026 and 2025, 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 operations. 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%, escalating rent payments at 5% every 5 years and (ii) the corporate offices located in Tulsa, OK with a 72-month lease and a discount rate of 8.5%, and lease is with a related party.

The outstanding liability for right to use assets under operating leases is as follows:

	February 28,			May 31,
	2026			2025
Liability under operating leases	$	4,942,277		$	5,168,301
Less: Current portion		(318,811	)		(303,815	)
Long-term portion of liability under operating leases	$	4,623,466		$	4,864,486

Lease Summary Information

Lease summary information as of and for the nine month periods ending is as follows:

	February 28,			February 28,
	2026			2025
Lease Expense
Financing lease expense -
Amortization of right-of-use assets	$	3,665		$	10,660
Interest on lease liabilities		55			432
Operating lease expense		477,120			477,715
Short-term lease expense		1,192,063			1,123,611
Total	$	1,672,903		$	1,612,418

Other Information
Cash paid for amounts included in the measurement of lease liabilities for finance leases -
Operating cash flows	$	55		$	432
Financing cash flows	$	4,457		$	15,440
Cash paid for amounts included in the measurement of lease liabilities for operating leases -
Operating cash flows	$	456,750		$	458,041
Weighted-average remaining lease term (in years) -
Financing leases		-			0.8
Operating leases		11.0			12.0
Weighted-average discount rate -
Financing leases		-			3.37	%
Operating leases		6.11	%		6.12	%

Future minimum lease payments under non-cancelable leases as of February 28, 2026, are approximately:

	Operating
	Leases
Twelve months ending February 28, 2027	$	609,000
Twelve months ending February 28, 2028		624,610
Twelve months ending February 28, 2029		635,760
Twelve months ending February 28, 2030		623,260
Twelve months ending February 28, 2031		560,760
Thereafter		3,738,010
Total future minimum lease payments		6,791,400
Less: Imputed interest		(1,849,123	)
Present value of minimum lease payments	$	4,942,277

Subsequent to February 28, 2026, the Company sold certain real property to Robert B. Rosene, Jr., a member of the Company’s Board of Directors, for $1,675,000 and concurrently entered into a leaseback arrangement for the property. The Board has agreed to the substance of the transaction but is currently negotiating the specific terms of the lease that is expected to be signed during the fourth quarter. The accounting treatment under ASC 842, Leases, is currently being evaluated and will be reflected in the annual consolidated financial statements.

Subsequent to February 28, 2026, the Company began leasing certain idle equipment to an outside entity. The terms of the agreement are still being negotiated, but the Company anticipates receiving monthly rental income of approximately $20,000 related to this equipment.