NOTE 5. Leases

The Company has previously entered into multiple lease agreements for the use of certain property and equipment under operating and finance leases. Property leases include hangars, storage, offices, and other space.

The Company records the initial right-to-use asset and lease liability at the present value of lease payments scheduled during the lease term. Unless the rate implicit in the lease is readily determinable, the Company discounts the lease payments using an estimated incremental borrowing rate at the time of lease commencement. The Company estimates the incremental borrowing rate based on the information available at the lease commencement date, including the rate the Company could borrow for a similar amount, over a similar lease term with similar collateral. The Company’s weighted-average discount rate for operating and finance leases during all periods presented was 10%.

Operating lease expense is recognized on a straight-line basis over the lease term. The weighted-average remaining lease term is 1 year as of May 31, 2025. There were no new leases entered into during the year-ended May 31, 2025.

The Company’s lease costs were as follows (in 000’s CAD):

The Company’s weighted-average remaining lease term and discount rate as of May 31, 2025, and May 31, 2024, was as follows:

The minimum aggregate future obligations under the Company’s non-cancellable operating leases as of May 31, 2025, were as follows (in 000’s CAD):