Related Party Transactions |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 31, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Related Party Transactions | Related Party Transactions The Company has transactions with related parties, primarily with its parent entity, Applied Parent. As a result of its ownership interest and control, Applied Parent is considered a related party.
Management Advisory and Corporate Services Agreement
In connection with the Business Combination, the Company entered into a Management Advisory and Corporate Services Agreement (the “Services Agreement”) and related commercial arrangements with Applied Parent, pursuant to which Applied Parent provides certain services to the Company. The Services Agreement provides management advisory and corporate services to the Company including financial, managerial, operational, strategic, financing, acquisition, and divestiture-related advice. The arrangements generally have an initial term of approximately one year and are subject to automatic monthly renewal provisions unless terminated by either party in accordance with the terms of the Services Agreement. The Company compensates Applied Parent for these services through a combination of management services fees based on a percentage of revenue and fixed fees for corporate and administrative services. The Company may also reimburse Applied Parent for certain costs incurred on its behalf.
Expenses (and, where applicable, income) associated with these arrangements are recognized as the related services are rendered. The Company believes that fees charged under the Services Agreement and related arrangements are consistent with market terms.
Related Party Transactions and Balances
The condensed consolidated financial statements presented for the periods prior to the Business Combination were prepared on a standalone basis and were derived from the condensed consolidated financial statements and accounting records of Applied Parent, as relevant. For purposes of preparing the condensed consolidated financial statements on a “carve-out” basis, management allocated a portion of Applied Parent corporate expenses to the Company. Applied Parent provided shared services and utilized cash pooling in situations where Applied Parent paid for an expense associated with the Company. Shared services consisted of, but are not limited to, financing, payroll, stock-based compensation, and other expenses that were either specifically identifiable or clearly applicable to the Company. These expenses have been allocated to the Company on the basis of direct usage when identifiable, with the remainder allocated on a pro rata basis using an applicable measure of headcount or other allocation methodologies considered to be a reasonable reflection of the utilization of services provided or the benefit received by the Company during the periods presented. Management
considers that such allocations have been made on a reasonable basis; however, these allocations below may not be indicative of the actual expense that would have been incurred had the Company operated as an independent, stand-alone public entity (in thousands).
As of August 31, 2026, amounts due to Applied Parent totaled $7.6 million, which primarily include borrowings made under the Grid Note (as defined and described in Note 8. Debt — Applied Parent Grid Note). As of May 31, 2026, amounts due to or from Applied Parent were considered immaterial.
The Company identified Applied Parent as a related party based on its controlling ownership interest. Based on a review of contractual arrangements and Directors’ and Officers’ questionnaires, the Company did not identify any reportable related party arrangements, including loans, guarantees, or transactions with directors, officers, or their immediate family members other than those with Applied Parent. Refer to Note 10. Stockholders' Equity — Contributions from Applied Parent for additional information regarding transactions with Applied Parent.
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