Annual report [Section 13 and 15(d), not S-K Item 405]

Leases

v3.26.1
Leases
 12 Months Ended
May 31, 2026
Leases [Abstract]  
Leases Leases
The Company enters into leases for equipment and data center and office space. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company presents operating and finance right of use assets and liabilities separately on the balance sheet as their own captions, with the liabilities split between current and long-term, respectively.
During the year ended May 31, 2026, the Company renegotiated the majority of its finance leases to extend the duration of the lease agreements, thus extending finance lease payments through fiscal year 2028. In accordance with ASC 842, as the modifications were not separate contracts, the Company reassessed the classification of the leases, noting no change in classification. As such, the Company reallocated the remaining consideration in the contract and remeasured the lease liability using a discount rate for each of the leases determined at the effective date of the modification. The Company recognized the amount of the remeasurement of the lease liability for each of the modified leases as an adjustment to the corresponding right-of-use asset.
Components of lease expense were as follows:
May 31, 2026 May 31, 2025
Operating lease cost:
Operating lease expense(1)
$ 24,312 $ 36,068
Short-term lease expense — 122
Total operating lease cost 24,312 36,190
Finance lease expense:
Amortization of right-of-use assets(1)
54,578 78,724
Interest on lease liabilities 9,519 16,826
Total finance lease cost 64,097 95,550
Total net lease cost $ 88,409 $ 131,740
(1)    Amortization of right-of-use assets is included within cost of revenues and selling, general and administrative expense in the combined statements of operations.
The following table represents the Company’s future minimum lease payments as of May 31, 2026:
Operating Leases Finance Leases Total
FY27 21,798  51,055 72,853 
FY28 22,623  10,967 33,590 
FY29 17,152  — 17,152 
FY30 3,536  — 3,536 
FY31 —  — — 
Thereafter —  —  — 
Total lease payments $ 65,109  $ 62,022 $ 127,131 
Less: imputed interest (6,690) (3,722) (10,412)
Total lease liabilities 58,419  58,300 116,719 
Less: Current portion of lease liability (18,130) (47,571) (65,701)
Long-term portion of lease liability $ 40,289  $ 10,729 $ 51,018 
Supplemental information related to leases is as follows:
Fiscal Year Ended
May 31, 2026 May 31, 2025
Weighted-average years remaining (in years):
Finance leases 1.0 3.0
Operating leases 2.4 3.3
Weighted-average discount rate:
Finance leases 9.9  % 10.2  %
Operating leases 7.7  % 7.6  %
Leases Leases
The Company enters into leases for equipment and data center and office space. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company presents operating and finance right of use assets and liabilities separately on the balance sheet as their own captions, with the liabilities split between current and long-term, respectively.
During the year ended May 31, 2026, the Company renegotiated the majority of its finance leases to extend the duration of the lease agreements, thus extending finance lease payments through fiscal year 2028. In accordance with ASC 842, as the modifications were not separate contracts, the Company reassessed the classification of the leases, noting no change in classification. As such, the Company reallocated the remaining consideration in the contract and remeasured the lease liability using a discount rate for each of the leases determined at the effective date of the modification. The Company recognized the amount of the remeasurement of the lease liability for each of the modified leases as an adjustment to the corresponding right-of-use asset.
Components of lease expense were as follows:
May 31, 2026 May 31, 2025
Operating lease cost:
Operating lease expense(1)
$ 24,312 $ 36,068
Short-term lease expense — 122
Total operating lease cost 24,312 36,190
Finance lease expense:
Amortization of right-of-use assets(1)
54,578 78,724
Interest on lease liabilities 9,519 16,826
Total finance lease cost 64,097 95,550
Total net lease cost $ 88,409 $ 131,740
(1)    Amortization of right-of-use assets is included within cost of revenues and selling, general and administrative expense in the combined statements of operations.
The following table represents the Company’s future minimum lease payments as of May 31, 2026:
Operating Leases Finance Leases Total
FY27 21,798  51,055 72,853 
FY28 22,623  10,967 33,590 
FY29 17,152  — 17,152 
FY30 3,536  — 3,536 
FY31 —  — — 
Thereafter —  —  — 
Total lease payments $ 65,109  $ 62,022 $ 127,131 
Less: imputed interest (6,690) (3,722) (10,412)
Total lease liabilities 58,419  58,300 116,719 
Less: Current portion of lease liability (18,130) (47,571) (65,701)
Long-term portion of lease liability $ 40,289  $ 10,729 $ 51,018 
Supplemental information related to leases is as follows:
Fiscal Year Ended
May 31, 2026 May 31, 2025
Weighted-average years remaining (in years):
Finance leases 1.0 3.0
Operating leases 2.4 3.3
Weighted-average discount rate:
Finance leases 9.9  % 10.2  %
Operating leases 7.7  % 7.6  %