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Related Party Transactions | 9 Months Ended
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Feb. 29, 2024
Related Party Transactions [Abstract] |
Related Party Transactions | Related Party Transactions Related Party Revenue The following table illustrates related party revenue for the three and nine months ended February 29, 2024 and February 28, 2023 (in thousands):
| Three Months Ended |  | Nine Months Ended
| February 29, 2024 |  | February 28, 2023 |  | February 29, 2024 |  | February 28, 2023
Customer D* | $ | 1,662 |  |  | $ | 2,250 |  |  | $ | 5,980 |  |  | $ | 5,690 |
Customer E** | $ | 1,402 |  |  | $ | 1,786 |  |  | $ | 4,903 |  |  | $ | 4,525 |
*Customer D is a subsidiary of an entity which is deemed to beneficially own over 5% of the Company's outstanding common stock **Customer E is 60% owned by an individual who is deemed to beneficially own over 5% of the Company's outstanding common stock The following table illustrates related party deferred revenue and deposits balances as of February 29, 2024 and May 31, 2023 (in thousands):
| Customer D balances as of |  | Customer E balances as of
| February 29, 2024 |  | May 31, 2023 |  | February 29, 2024 |  | May 31, 2023
Deferred revenue | $ | 895 |  |  | $ | 1,474 |  |  | $ | 392 |  |  | $ | 50 |
Customer Deposits | $ | 2,450 |  |  | $ | 2,450 |  |  | $ | 1,360 |  |  | $ | 1,360 |
Related Party Sublease Income The Company receives sublease income from B. Riley Asset Management, which is also a wholly-owned subsidiary of B. Riley Financial, Inc. As previously disclosed, the Company’s Chairman and Chief Executive Officer, served as the President of B. Riley Asset Management, and effective February 5, 2024, resigned from that position. Sublease income is included in selling, general and administrative expenses in our condensed consolidated statements of operations. The following table illustrates related party sublease income for the three and nine months ended February 29, 2024 and February 28, 2023 (in thousands):
| Three Months Ended |  | Nine Months Ended
| February 29, 2024 |  | February 28, 2023 |  | February 29, 2024 |  | February 28, 2023
Sublease Income | $ | 23 |  |  | $ | 23 |  |  | $ | 70 |  |  | $ | 81 |
B. Riley Loan During the nine months ended February 29, 2024, the Company borrowed an additional $8.0 million and early repaid the total outstanding balance of $44.5 million. Interest expense and deferred issuance cost amortization associated with the loan was $0.7 million for the nine months ended February 29, 2024. The Company recognized a $2.4 million loss on debt extinguishment associated with the early repayment of the outstanding balance for the nine months ended February 29, 2024. On February 5, 2024, the Company entered into a Termination of Loan and Security letter with B. Riley Commercial Capital, LLC and B. Riley Securities, Inc. which terminated the Loan and Security Agreement dated as of May 23, 2023, as amended, among the parties. At the time of the Termination Letter, all principal, interest and fees under the Loan and Security Agreement had been paid in full. No early termination penalty was paid in connection with the Termination of Loan and Security letter. AI Bridge Loan On January 30, 2024, the Company issued an Unsecured Promissory Note (the “AI Bridge Loan”) payable to AI Bridge Funding LLC (the “Lender”), providing for an unsecured loan in the aggregate principal amount of up to $20.0 million, of which $15.0 million was available immediately and funded upon the execution of the AI Bridge Loan. The obligation of the Lender to advance the remaining $5.0 million shall be in the Lender’s sole discretion. The AI Bridge Loan will mature on January 30, 2026 and bears interest at a rate of 12.5% per annum. Additionally, upon the receipt by the Company or any of its subsidiaries of any cash proceeds from either the incurrence of any indebtedness (other than the AI Bridge Loan) or the issuance of any equity interests in the Company, which net proceeds total more than $35.0 million, the Company shall apply such net proceeds toward the prepayment of the outstanding principal of the AI Bridge Loan. Pursuant to the terms of the AI Bridge Loan, the Company is obligated to pay to the Lender a repayment fee in an amount sufficient for the Lender to receive an aggregate amount equal to 1.25x the aggregate principal amount funded as loans by the Lender to the Company. As of February 29, 2024, the total outstanding balance under the AI Bridge Loan was $15.0 million. The Company has elected to recognize the entire note at fair value under ASC 815, Derivatives and Hedging. During the three and nine months ended February 29, 2024, the Company recognized a $2.6 million loss on change in fair value of debt associated with such election which is included in our condensed consolidated statements of operations. See Note 8 - Fair Value Measurements for further discussion on the Company’s fair value considerations. Affiliates of the Lender are both an investor in B. Riley Financial, Inc. and also an investment management client of B. Riley Asset Management. As previously disclosed, the Company’s Chairman and Chief Executive Officer, served as the President of B. Riley Asset Management, and effective February 5, 2024, resigned from that position. Other Related Party Transactions During the three and nine months ended February 29, 2024, the Company paid construction and consulting costs of $44.4 thousand and $0.3 million, respectively, to a company owned by a family member of the Company’s Chief Financial Officer. During the three and nine months ended February 29, 2024, the Company paid software license fees of $0.1 million and $0.2 million, respectively, to a company whose chairman is also a member of the Company’s Board of Directors. During the three and nine months ended February 29, 2024, the Company paid $23 thousand in consulting fees to a Board of Director member for sales consulting work. The Company did not make any payments to these related parties during the three and nine months ended February 28, 2023.

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