Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Aug. 31, 2017 | Oct. 10, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | GREYSTONE LOGISTICS, INC. | |
Entity Central Index Key | 1,088,413 | |
Document Type | 10-Q | |
Document Period End Date | Aug. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --05-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 28,361,201 | |
Trading Symbol | GLGI | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,018 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Aug. 31, 2017 | May 31, 2017 |
Current Assets: | ||
Cash | $ 1,159,974 | $ 579,021 |
Accounts receivable - Trade, net of allowance for doubtful accounts of $31,660 at August 31, 2017 and May 31, 2017 | 2,428,966 | 6,160,145 |
Related party receivables | 36,750 | 73,578 |
Inventory | 2,829,086 | 1,587,552 |
Prepaid expenses | 59,412 | 136,395 |
Total Current Assets | 6,514,188 | 8,536,691 |
Property and Equipment, net | 20,967,523 | 19,706,782 |
Deferred Tax Asset | 77,615 | 281,415 |
Total Assets | 27,559,326 | 28,524,888 |
Current Liabilities: | ||
Current portion of long-term debt | 2,710,820 | 2,493,236 |
Current portion of capital lease | 2,245,129 | 2,261,560 |
Accounts payable and accrued expenses | 3,707,307 | 5,727,903 |
Accrued expenses - related parties | 57,917 | 29,076 |
Preferred dividends payable | 31,849 | 29,726 |
Total Current Liabilities | 8,753,022 | 10,541,501 |
Long-Term Debt, net of current portion | 16,278,947 | 15,310,754 |
Capital Lease, net of current portion | 1,002,466 | 1,532,503 |
Equity: | ||
Preferred stock, $0.0001 par value, cumulative, 20,750,000 shares authorized, 50,000 shares issued and outstanding, liquidation preference of $5,000,000 | 5 | 5 |
Common stock, $0.0001 par value, 5,000,000,000 shares authorized, 28,361,201 shares issued and outstanding | 2,836 | 2,836 |
Additional paid-in capital | 53,790,764 | 53,790,764 |
Accumulated deficit | (53,350,283) | (53,724,991) |
Total Greystone Stockholders' Equity | 443,322 | 68,614 |
Non-controlling interest | 1,081,569 | 1,071,516 |
Total Equity | 1,524,891 | 1,140,130 |
Total Liabilities and Equity | $ 27,559,326 | $ 28,524,888 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Aug. 31, 2017 | May 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful on accounts receivable | $ 31,660 | $ 31,660 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 20,750,000 | 20,750,000 |
Preferred stock, shares issued | 50,000 | 50,000 |
Preferred stock, shares outstanding | 50,000 | 50,000 |
Preferred stock, liquidation preference | $ 5,000,000 | $ 5,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 5,000,000,000 | 5,000,000,000 |
Common stock, shares issued | 28,361,201 | 28,361,201 |
Common stock, shares outstanding | 28,361,201 | 28,361,201 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) | 3 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Income Statement [Abstract] | ||
Sales | $ 10,287,075 | $ 7,844,261 |
Cost of Sales | 8,388,176 | 6,876,443 |
Gross Profit | 1,898,899 | 967,818 |
General, Selling and Administrative Expenses | 831,403 | 723,029 |
Operating Income | 1,067,496 | 244,789 |
Other Income (Expense): | ||
Other income | 8,263 | |
Interest expense | (324,677) | (236,631) |
Income before Income Taxes | 751,082 | 8,158 |
Provision for (Benefit from) Income Taxes | 220,800 | (18,850) |
Net Income | 530,282 | 27,008 |
Income Attributable to Variable Interest Entity | (61,053) | (59,379) |
Preferred Dividends | (94,521) | (85,068) |
Net Income (Loss) Attributable to Common Stockholders | $ 374,708 | $ (117,439) |
Income (Loss) Per Share of Common Stock - Basic and Diluted | $ 0.01 | $ 0 |
Weighted Average Shares of Common Stock Outstanding - Basic | 28,361,201 | 28,202,884 |
Weighted Average Shares of Common Stock Outstanding - Diluted | 28,979,740 | 28,202,884 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Cash Flows from Operating Activities: | ||
Net income | $ 530,282 | $ 27,008 |
Adjustments to reconcile net income to net cash provided by operating activities - | ||
Depreciation and amortization | 778,911 | 527,816 |
Decrease (Increase) in deferred tax asset | 203,800 | (18,850) |
Decrease in trade accounts receivable | 3,731,179 | 1,030,987 |
Decrease in related party receivables | 36,828 | 14,492 |
Increase in inventory | (1,241,534) | (14,003) |
Decrease in prepaid expenses | 76,983 | 52,135 |
Decrease in accounts payable and accrued expenses | (2,023,966) | (330,982) |
Net cash provided by operating activities | 2,092,483 | 1,288,603 |
Cash Flows from Investing Activities: | ||
Purchase of property and equipment | (1,977,498) | (849,062) |
Cash Flows from Financing Activities: | ||
Proceeds from long-term debt | 1,795,000 | |
Payments on long-term debt and capitalized lease | (1,185,634) | (570,014) |
Proceeds from exercised stock options | 57,000 | |
Dividends paid on preferred stock | (92,398) | (87,746) |
Distributions paid by variable interest entity | (51,000) | (51,000) |
Net cash provided by (used in) financing activities | 465,968 | (651,760) |
Net Increase (Decrease) in Cash | 580,953 | (212,219) |
Cash, beginning of year | 579,021 | 897,377 |
Cash, end of year | 1,159,974 | 685,158 |
Non-Cash Activities: | ||
Acquisition of equipment by capital lease | 2,731,152 | |
Conversion of related party accrued interest to long-term debt | 2,475,690 | |
Preferred dividend accrual | 31,849 | 57,329 |
Supplemental information: | ||
Interest paid | $ 295,836 | $ 191,333 |
Basis of Financial Statements
Basis of Financial Statements | 3 Months Ended |
Aug. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Financial Statements | Note 1. Basis of Financial Statements In the opinion of Greystone Logistics, Inc. (“Greystone”), the accompanying unaudited consolidated financial statements contain all adjustments and reclassifications, which are of a normal recurring nature, necessary to present fairly its financial position as of August 31, 2017, and the results of its operations and its cash flows for the three-month periods ended August 31, 2017 and 2016. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the fiscal year ended May 31, 2017 and the notes thereto included in Greystone’s Form 10-K for such period. The results of operations for the three-month periods ended August 31, 2017 and 2016, are not necessarily indicative of the results to be expected for the full fiscal year. The consolidated financial statements of Greystone include its wholly-owned subsidiaries, Greystone Manufacturing, L.L.C. (“GSM”) and Plastic Pallet Production, Inc. (“PPP”), and its variable interest entity (“VIE”), Greystone Real Estate, L.L.C. (“GRE”). GRE owns two buildings located in Bettendorf, Iowa which are leased to GSM. All material intercompany accounts and transactions have been eliminated. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Aug. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 2. Earnings Per Share Basic earnings per share is based on the weighted-average effect of all common shares issued and outstanding and is calculated by dividing net income (loss) attributable to common stockholders by the weighted-average shares outstanding during the period. Diluted earnings per share is calculated by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares used in the basic earnings per share calculation plus the number of common shares that would be issued assuming exercise or conversion of all potentially dilutive common shares outstanding. Greystone excludes equity instruments from the calculation of diluted earnings per share if the effect of including such instruments is anti-dilutive. For the three months ended August 31, 2017, equity instruments which have been excluded are Greystone’s convertible preferred stock which is convertible into 3,333,333 shares of common stock. For the three months ended August 31, 2016, equity instruments which have been excluded are Greystone’s convertible preferred stock which is convertible into 3,333,333 shares of common stock and stock options to purchase 200,000 shares of common stock. The following table sets forth the computation of basic and diluted earnings per share for the three months ended August 31: 2017 2016 Numerator - Net income (loss) attributable to common stockholders $ 374,708 $ (117,439 ) Denominator - Weighted-average shares outstanding - basic 28,361,201 28,202,884 Incremental shares from assumed conversion of options and warrants 618,539 - Diluted shares 28,979,740 28,202,884 Income (Loss) per share of common stock - Basic and Diluted $ 0.01 $ (0.00 ) |
Inventory
Inventory | 3 Months Ended |
Aug. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 3. Inventory Inventory consists of the following: August 31, 2017 May 31, 2017 Raw materials $ 1,190,007 $ 669,083 Finished goods 1,639,079 918,469 Total inventory $ 2,829,086 $ 1,587,552 |
Property, Plants and Equipment
Property, Plants and Equipment | 3 Months Ended |
Aug. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plants and Equipment | Note 4. Property, Plant and Equipment A summary of the property, plant and equipment for Greystone is as follows: August 31, 2017 May 31, 2017 Production machinery and equipment $ 29,439,996 $ 27,493,614 Plant buildings and land 5,296,784 5,296,784 Leasehold improvements 327,038 263,710 Furniture and fixtures 392,370 392,371 35,456,188 33,446,479 Less: Accumulated depreciation and amortization (14,488,665 ) (13,739,697 ) Net Property, Plant and Equipment $ 20,967,523 $ 19,706,782 Production machinery and equipment includes equipment capitalized pursuant to a capital lease in the amount of $5,323,864. The equipment is being amortized using the straight-line method over 10 years. Production machinery includes deposits on equipment in the amount of $1,678,400 that had not been placed into service as of August 31, 2017. Two plant buildings and land are owned by GRE, a VIE, and have a net book value of $3,099,325 at August 31, 2017. Depreciation expense including amortization expense related to assets under capital lease for the three months ended August 31, 2017 and 2016 was $748,968 and $518,576, respectively. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Aug. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 5. Related Party Transactions Yorktown Management & Financial Services, LLC Yorktown Management & Financial Services, LLC (“Yorktown”), an entity wholly owned by Greystone’s CEO and President, owns and rents to Greystone (1) grinding equipment used to grind raw materials for Greystone’s pallet production and (2) extruders for pelletizing recycled plastic into pellets for resale and for use as raw material in the manufacture of pallets. GSM pays weekly rental fees to Yorktown of $22,500 for use of Yorktown’s grinding equipment and $5,000 for the use of Yorktown’s pelletizing equipment. GSM paid Yorktown total equipment rental fees of $357,500 and $385,000 for the three months ended August 31, 2017 and 2016, respectively. In addition, Yorktown provides office space for Greystone in Tulsa, Oklahoma at a monthly rental of $4,000. TriEnda Holdings, L.L.C. TriEnda Holdings, L.L.C. (“TriEnda”) is a manufacturer of plastic pallets, protective packing and dunnage utilizing thermoform processing for which Warren F. Kruger, Greystone’s president and CEO, serves TriEnda as the non-executive Chairman of the Board of Kruger Brown Holdings, LLC (“KBH”), which owns a majority interest in TriEnda. Mr. Kruger’s net interest through KBH is not a majority ownership interest in TriEnda. Greystone provided tolling services for blending and pelletizing plastic resin. Revenue from TriEnda totaled $187,002 for the three months ended August 31, 2016. Tolling services to TriEnda ended March 1, 2017. Greystone periodically purchases raw material from TriEnda. Purchases for the three months ended August 31, 2017 and 2016 totaled $40,917 and $8,905, respectively. Greystone had accounts payable to TriEnda of $40,917 at August 31, 2017. Green Plastic Pallets Greystone sells plastic pallets to Green Plastic Pallets (“Green”), an entity that is owned by James Kruger, brother to Warren F. Kruger, Greystone’s president and CEO. Greystone had sales to Green of $36,750 and $18,365 for the three months ended August 31, 2017 and 2016, respectively. As of August 31, 2017, Greystone had an account receivable of $36,750 from Green. |
Debt
Debt | 3 Months Ended |
Aug. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Note 6. Debt Debt as of August 31, 2017 and May 31, 2017 is as follows: August 31, 2017 May 31, 2017 Term note A payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.0%, maturing January 7, 2019 $ 4,457,243 $ 4,626,191 Term note B payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.0%, maturing January 7, 2019 1,466,522 1,715,132 Term note C payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.0%, maturing August 4, 2020 1,776,190 - Revolving note payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.0%, due January 31, 2019 2,260,000 2,260,000 Term note payable by GRE to International Bank of Commerce, interest rate of 4.5%, monthly principal and interest payments of $26,215, due January 31, 2019 2,795,134 2,841,285 Note payable to First Bank, prime rate of interest plus 1.45% but not less than 4.95%, monthly principal and interest payment of $30,628, due August 21, 2021, secured by production equipment 1,322,628 1,396,448 Note payable to Robert Rosene, 7.5% interest, due January 15, 2019 4,469,355 4,469,355 Note payable to Yorktown Management & Financial Services, LLC, 5.0% interest, due February 28, 2019, monthly principal and interest payments of $20,629 357,021 413,969 Other 284,157 310,036 Total debt 19,188,250 18,032,416 Debt issue costs, net of amortization (198,483 ) (228,426 ) 18,989,767 17,803,990 Less: Current portion (2,710,820 ) (2,493,236 ) Long-term debt $ 16,278,947 $ 15,310,754 The prime rate of interest as of August 31, 2017 was 4.25%. Loan Agreement between Greystone and International Bank of Commerce (“IBC”) On January 31, 2014, Greystone and GSM (the “Borrowers”) and International Bank of Commerce (“IBC”) entered into a Loan Agreement (the “IBC Loan Agreement”). The IBC Loan Agreement provided for a revolving loan in an aggregate principal amount of up to $2,500,000 (the “Revolving Loan”) and a term loan in the aggregate principal amount of $9,200,000 (the “Term Loan”). The exact amount which can be borrowed under the Revolving Loan from time to time is dependent upon the amount of the borrowing base, but can in no event exceed $2,500,000. On January 7, 2016, the Borrowers and IBC entered into the First Amendment to the IBC Loan Agreement (the “First Amendment”) whereby IBC made an additional term loan to Borrowers in the original principal amount of $2,530,072 (the “New Equipment Loan”). The New Equipment Loan and $2,917,422 of the principal amount outstanding on the Term Loan were consolidated into a new loan in the combined principal amount of $5,447,504 (the “Term Loan A”). The Term Loan’s remaining principal balance of $3,000,000 was deemed to be a separate term loan (the “Term Loan B”). Effective August 4, 2017, the Borrowers and IBC entered into the Fourth Amendment to the IBC Loan Agreement whereby IBC made an additional loan (“Term Loan C”) to Borrowers in the amount of $1,795,000. The proceeds from the Term Note C were used to purchase production equipment. The Term Loans A, B and C bear interest at the New York Prime Rate plus 0.5% but not less than 4.0%. Term Loans A and B mature January 7, 2019; Term Loan C matures August 4, 2020. The Borrowers are required to make equal monthly payments of principal and interest in such amounts sufficient to amortize the principal balance of (i) the Term Loan A over a seven-year period beginning January 31, 2016 (currently $74,455 per month), (ii) the Term Loan B over the three-year life of the loan (currently $89,424 per month) and (iii) the Term Loan C over a seven-year period beginning August 31, 2017 (currently $25,205 per month). The Revolving Loan bears interest at the New York Prime Rate plus 0.5% but not less than 4.0% and matures January 31, 2019. The Borrowers are required to pay all interest accrued on the outstanding principal balance of the Revolving Loan on a monthly basis. Any principal on the Revolving Loan that is prepaid by the Borrowers does not reduce the original amount available to the Borrowers. The IBC Loan Agreement includes customary representations and warranties and affirmative and negative covenants which include (i) requiring the Borrowers to maintain a debt service coverage ratio of 1:25 to 1:00 and a funded debt to EBIDA ratio not exceeding 3:00 to 1:00, (ii) subject to certain exceptions, limiting the Borrowers’ combined capital expenditures on fixed assets to $1,000,000 per year, (iii) prohibiting Greystone, without IBC’s prior written consent, from declaring or paying any dividends, redemptions of stock or membership interests, distributions and withdrawals (as applicable) in respect of its capital stock or any other equity interest, other than additional payments to holders of its preferred stock in an amount not to exceed $500,000 in any fiscal year, (iv) subject to certain exceptions, prohibiting the incurrence of additional indebtedness by the Borrowers, and (v) requiring the Borrowers to prevent (A) any change in capital ownership such that there is a material change in the direct or indirect ownership of (1) Greystone’s outstanding preferred stock, and (2) any equity interest in GSM, or (B) Warren Kruger from ceasing to be actively involved in the management of Greystone as President and/or Chief Executive Officer. The foregoing list of covenants is not exhaustive and there are several other covenants contained in the IBC Loan Agreement. Greystone’s debt service coverage ratio at August 31, 2017 was 1.06 which is not in compliance with the IBC Loan Agreement’s minimum debt service coverage ratio of 1.25. The Third Amendment, dated December 12, 2016, to the IBC Loan Agreement waived this requirement to maintain the minimum debt service ratio until February 28, 2018. The IBC Loan Agreement includes customary events of default, including events of default relating to non-payment of principal and other amounts owing under the IBC Loan Agreement from time to time, inaccuracy of representations, violation of covenants, defaults under other agreements, bankruptcy and similar events, the death of a guarantor, certain material adverse changes relating to a Borrower or guarantor, certain judgments or awards against a Borrower, or government action affecting a Borrower’s or guarantor’s ability to perform under the IBC Loan Agreement or the related loan documents. Among other things, a default under the IBC Loan Agreement would permit IBC to cease lending funds under the IBC Loan Agreement, and require immediate repayment of any outstanding loans with interest and any unpaid accrued fees. The IBC Loan Agreement is secured by a lien on substantially all of the assets of the Borrowers. In addition, the IBC Loan Agreement is secured by a mortgage granted by GRE on the real property owned by GRE in Bettendorf, Iowa (the “Mortgage”). GRE is owned by Warren F. Kruger, Greystone’s President and CEO, and Robert B. Rosene, Jr., a director of Greystone. Messrs. Kruger and Rosene have provided a combined limited guaranty of the Borrowers’ obligations under the IBC Loan Agreement, with such guaranty being limited to a combined amount of $6,500,000 (the “Guaranty”). The Mortgage and the Guaranty also secure or guaranty, as applicable, the obligations of GRE under the Loan Agreement between GRE and IBC dated January 31, 2014, as discussed in the following paragraph. Loan Agreement between GRE and IBC On January 31, 2014, GRE and IBC entered into a Loan Agreement which provided for a mortgage loan to GRE of $3,412,500. The loan provides for a 4.5% interest rate and a maturity of January 31, 2019 and is secured by a mortgage on the two buildings in Bettendorf, Iowa which are leased to Greystone. Note Payable between Greystone and Robert B. Rosene, Jr. Effective December 15, 2005, Greystone entered into an agreement with Robert B. Rosene, Jr., a member of Greystone’s board of directors, to convert $2,066,000 of advances into a note payable at 7.5% interest. Payments were not made on the interest accruing under the note from commencement through May 31, 2016. Effective June 1, 2016, the note was restated (the “Restated Note”) to combine the outstanding principal, $2,066,000, and accrued interest, $2,475,690, into a note payable of $4,541,690. Note Payable between Greystone and Yorktown Management Financial Services, LLC (“Yorktown”) On February 29, 2016, Greystone entered into an unsecured note payable to Yorktown in the amount of $688,296 in connection with the acquisition of equipment from Yorktown. The note payable bears interest at the rate of 5% and is payable over three years with monthly principal and interest payments of $20,629. Maturities Maturities of Greystone’s long-term debt for the five years subsequent to August 31, 2017 are $2,710,820, $14,245,980, $1,686,601, $401,647 and $143,202. |
Capital Lease
Capital Lease | 3 Months Ended |
Aug. 31, 2017 | |
Leases [Abstract] | |
Capital Lease | Note 7. Capital Lease Capital lease as of August 31, 2017 and May 31, 2017: August 31, 2017 May 31, 2017 Non-cancellable capital lease with private company, interest rate of 5%, due August 7, 2019 $ 3,247,595 $ 3,794,063 Less: Current portion (2,245,129 ) (2,261,560 ) Non-cancellable capital lease, net of current portion $ 1,002,466 $ 1,532,503 In August, 2016, Greystone entered into a three-year lease agreement with a private company to provide for certain production equipment with a total cost of approximately $5.4 million. The lease agreement includes a bargain purchase option to acquire the production equipment at the end of the lease term. Monthly lease payments, estimated at approximately $200,000 per month, are payable on a per invoice basis at the rate of $6.25 for each pallet produced by the leased production equipment and shipped to the private company. The lease bears an interest rate of 5%, has a three-year maturity and provides for minimum monthly lease rental payment based upon the total pallets sold in excess of a specified amount not to exceed the monthly productive capacity of the leased machines. The production equipment under non-cancelable capital leases has a gross carrying amount of $5,323,864 at August 31, 2017. Amortization of the carrying amount of approximately $134,000 was included in depreciation expense for the three months ended August 31, 2017. Future minimum lease payments under non-cancelable leases as of August 31, 2017, are approximately: Twelve months ended August 31, 2018 $ 2,357,500 Twelve months ended August 31, 2019 1,015,157 Total lease payments 3,372,657 Imputed interest 125,062 Present value of lease payments $ 3,247,595 |
Fair Value Financial Instrument
Fair Value Financial Instruments | 3 Months Ended |
Aug. 31, 2017 | |
Investments, All Other Investments [Abstract] | |
Fair Value of Financial Instruments | Note 8. Fair Value of Financial Instruments The following methods and assumptions are used in estimating the fair-value disclosures for financial instruments: Cash, Accounts Receivable and Accounts Payable: The carrying amounts reported in the balance sheet for cash, accounts receivable and accounts payable approximate fair value due to the short-term maturity of these instruments. Long-Term Debt: The carrying amount of loans with floating rates of interest approximate fair value. Fixed rate loans are valued based on cash flows using estimated rates for comparable loans. As of August 31, 2017 and May 31, 2017, the carrying amounts reported in the balance sheet approximate fair value for the variable and fixed rate loans. |
Recent Accounting Pronouncement
Recent Accounting Pronouncement | 3 Months Ended |
Aug. 31, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncement | Note 9. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “ Revenue from Contracts with Customers In February 2016, the FASB issued Accounting Standards 2016-02, Leases (Topic 842) |
Concentrations, Risks and Uncer
Concentrations, Risks and Uncertainties | 3 Months Ended |
Aug. 31, 2017 | |
Risks and Uncertainties [Abstract] | |
Concentrations, Risks and Uncertainties | Note 10. Concentrations, Risks and Uncertainties Greystone derived 73% and 66% of its sales in fiscal years 2018 and 2017, respectively, from two customers. The loss of a material amount of business from these customers could have a material adverse effect on Greystone. Greystone purchases damaged pallets from its customers at a price based on the value of the raw material content in the pallet. A majority of these purchases, totaling $493,104 and $478,752 in fiscal years 2018 and 2017, respectively, is from one of its major customers. Robert B. Rosene, Jr., a Greystone director, has provided financing and guarantees on Greystone’s bank debt. As of August 31, 2017, Greystone is indebted to Mr. Rosene in the amount of $4,469,355 pursuant to a note payable due January 15, 2019. There is no assurance that Mr. Rosene will continue to provide extensions in the future. |
Commitments
Commitments | 3 Months Ended |
Aug. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Note 11. Commitments At August 31, 2017, Greystone had commitments totaling $359,000 for the purchase of production equipment. References to fiscal year 2018 refer to the three month period ended August 31, 2017. References to fiscal year 2017 refer to the three month period ended August 31, 2016. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Aug. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Earnings Per Shares | The following table sets forth the computation of basic and diluted earnings per share for the three months ended August 31: 2017 2016 Numerator - Net income (loss) attributable to common stockholders $ 374,708 $ (117,439 ) Denominator - Weighted-average shares outstanding - basic 28,361,201 28,202,884 Incremental shares from assumed conversion of options and warrants 618,539 - Diluted shares 28,979,740 28,202,884 Income (Loss) per share of common stock - Basic and Diluted $ 0.01 $ (0.00 ) |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Aug. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consists of the following: August 31, 2017 May 31, 2017 Raw materials $ 1,190,007 $ 669,083 Finished goods 1,639,079 918,469 Total inventory $ 2,829,086 $ 1,587,552 |
Property, Plants and Equipment
Property, Plants and Equipment (Tables) | 3 Months Ended |
Aug. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | A summary of the property, plant and equipment for Greystone is as follows: August 31, 2017 May 31, 2017 Production machinery and equipment $ 29,439,996 $ 27,493,614 Plant buildings and land 5,296,784 5,296,784 Leasehold improvements 327,038 263,710 Furniture and fixtures 392,370 392,371 35,456,188 33,446,479 Less: Accumulated depreciation and amortization (14,488,665 ) (13,739,697 ) Net Property, Plant and Equipment $ 20,967,523 $ 19,706,782 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Aug. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt as of August 31, 2017 and May 31, 2017 is as follows: August 31, 2017 May 31, 2017 Term note A payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.0%, maturing January 7, 2019 $ 4,457,243 $ 4,626,191 Term note B payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.0%, maturing January 7, 2019 1,466,522 1,715,132 Term note C payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.0%, maturing August 4, 2020 1,776,190 - Revolving note payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.0%, due January 31, 2019 2,260,000 2,260,000 Term note payable by GRE to International Bank of Commerce, interest rate of 4.5%, monthly principal and interest payments of $26,215, due January 31, 2019 2,795,134 2,841,285 Note payable to First Bank, prime rate of interest plus 1.45% but not less than 4.95%, monthly principal and interest payment of $30,628, due August 21, 2021, secured by production equipment 1,322,628 1,396,448 Note payable to Robert Rosene, 7.5% interest, due January 15, 2019 4,469,355 4,469,355 Note payable to Yorktown Management & Financial Services, LLC, 5.0% interest, due February 28, 2019, monthly principal and interest payments of $20,629 357,021 413,969 Other 284,157 310,036 Total debt 19,188,250 18,032,416 Debt issue costs, net of amortization (198,483 ) (228,426 ) 18,989,767 17,803,990 Less: Current portion (2,710,820 ) (2,493,236 ) Long-term debt $ 16,278,947 $ 15,310,754 |
Capital Lease (Tables)
Capital Lease (Tables) | 3 Months Ended |
Aug. 31, 2017 | |
Leases [Abstract] | |
Schedule of Non-cancellable Capital Lease | Capital lease as of August 31, 2017 and May 31, 2017: August 31, 2017 May 31, 2017 Non-cancellable capital lease with private company, interest rate of 5%, due August 7, 2019 $ 3,247,595 $ 3,794,063 Less: Current portion (2,245,129 ) (2,261,560 ) Non-cancellable capital lease, net of current portion $ 1,002,466 $ 1,532,503 |
Schedule of Future Minimum Lease Payments | Future minimum lease payments under non-cancelable leases as of August 31, 2017, are approximately: Twelve months ended August 31, 2018 $ 2,357,500 Twelve months ended August 31, 2019 1,015,157 Total lease payments 3,372,657 Imputed interest 125,062 Present value of lease payments $ 3,247,595 |
Earnings Per Share (Details Nar
Earnings Per Share (Details Narrative) - shares | 3 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Earnings Per Share [Abstract] | ||
Conversion of stock into shares | 3,333,333 | 3,333,333 |
Number of stock option to purchase shares of common stock | 200,000 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Computation of Basic and Diluted Earnings Per Shares (Details) - USD ($) | 3 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Earnings Per Share [Abstract] | ||
Numerator - Net income (loss) attributable to common stockholders | $ 374,708 | $ (117,439) |
Denominator - Weighted-average shares outstanding - basic | 28,361,201 | 28,202,884 |
Denominator - Incremental shares from assumed conversion of options and warrants | 618,539 | |
Denominator - Diluted shares | 28,979,740 | 28,202,884 |
Income (Loss) per share of common stock - Basic and Diluted | $ 0.01 | $ 0 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Details) - USD ($) | Aug. 31, 2017 | May 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,190,007 | $ 669,083 |
Finished goods | 1,639,079 | 918,469 |
Total inventory | $ 2,829,086 | $ 1,587,552 |
Property, Plants and Equipmen25
Property, Plants and Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Property, Plant and Equipment [Abstract] | ||
Production machinery and equipment | $ 5,323,864 | |
Property plant and equipment useful life | 10 years | |
Production machinery includes deposits on equipment | $ 1,678,400 | |
Plant buildings and land net book value | 3,099,325 | |
Depreciation and amortization expense | $ 748,968 | $ 518,576 |
Property, Plants and Equipmen26
Property, Plants and Equipment - Schedule of Property Plant and Equipment (Details) - USD ($) | Aug. 31, 2017 | May 31, 2017 |
Property plant and equipment, gross | $ 35,456,188 | $ 33,446,479 |
Less: Accumulated depreciation | (14,488,665) | (13,739,697) |
Net Property, Plant and Equipment | 20,967,523 | 19,706,782 |
Production Machinery and Equipment [Member] | ||
Property plant and equipment, gross | 29,439,996 | 27,493,614 |
Plant Buildings and Land [Member] | ||
Property plant and equipment, gross | 5,296,784 | 5,296,784 |
Leasehold Improvements [Member] | ||
Property plant and equipment, gross | 327,038 | 263,710 |
Furniture and Fixtures [Member] | ||
Property plant and equipment, gross | $ 392,370 | $ 392,371 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Green Plastic Pallets [Member] | ||
Pallet sales | $ 36,750 | $ 18,365 |
Account receivable | 36,750 | |
Yorktown Management & Financial Services, LLC [Member] | ||
Payments of rental fees | 357,500 | 385,000 |
Operating lease rental fees | 4,000 | |
Trienda Holdings, LLC [Member] | ||
Pallet sales | 187,002 | |
Scrap material purchase amount | 40,917 | $ 8,905 |
Accounts payable | 40,917 | |
Yorktown's Grinding Equipment [Member] | ||
Payments of rental fees | 22,500 | |
Yorktown's Pelletizing Equipment [Member] | ||
Payments of rental fees | $ 5,000 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | Jun. 02, 2016 | Feb. 29, 2016 | Jan. 31, 2014 | Jan. 31, 2014 | Aug. 31, 2017 | May 31, 2017 | Aug. 04, 2017 | Jan. 07, 2016 | Dec. 15, 2005 |
Debt instrument interest rate | 5.00% | 5.00% | |||||||
Debt instrument principal amount | $ 19,188,250 | ||||||||
Long-term borrowings | $ 18,989,767 | $ 17,803,990 | |||||||
Debt instrument maturity date | Aug. 7, 2019 | Aug. 7, 2019 | |||||||
Preferred stock amount | $ 5 | $ 5 | |||||||
Maturities long term debt current | 2,710,820 | ||||||||
Maturities long term debt year two | 14,245,980 | ||||||||
Maturities long term debt year three | 1,686,601 | ||||||||
Maturities long term debt year four | 401,647 | ||||||||
Maturities long term debt year five | $ 143,202 | ||||||||
Robert B. Rosene, Jr. [Member] | |||||||||
Debt instrument interest rate | 7.50% | ||||||||
Notes payable | $ 2,066,000 | ||||||||
Robert B. Rosene, Jr. [Member] | Restated Note [Member] | |||||||||
Debt instrument principal amount | $ 2,066,000 | ||||||||
Notes payable | 4,541,690 | ||||||||
Debt accrued interest | $ 2,475,690 | ||||||||
Yorktown Management Financial Services, LLC [Member] | |||||||||
Debt instrument interest rate | 5.00% | ||||||||
Loan term | 3 years | ||||||||
Debt monthly payment | $ 20,629 | ||||||||
Notes payable | $ 688,296 | ||||||||
Term Loan C [Member] | |||||||||
Debt instrument maturity date | Aug. 4, 2020 | ||||||||
Loan term | 7 years | ||||||||
Debt monthly payment | $ 25,205 | ||||||||
Term Loan C [Member] | Minimum [Member] | |||||||||
Debt instrument interest rate | 0.50% | ||||||||
Term Loan C [Member] | Maximum [Member] | |||||||||
Debt instrument interest rate | 4.00% | ||||||||
Term Loan A [Member] | |||||||||
Debt instrument maturity date | Jan. 7, 2019 | ||||||||
Loan term | 7 years | ||||||||
Debt monthly payment | $ 74,455 | ||||||||
Term Loan A [Member] | Minimum [Member] | |||||||||
Debt instrument interest rate | 0.50% | ||||||||
Term Loan A [Member] | Maximum [Member] | |||||||||
Debt instrument interest rate | 4.00% | ||||||||
Term Loan B [Member] | |||||||||
Debt instrument maturity date | Jan. 7, 2019 | ||||||||
Loan term | 3 years | ||||||||
Debt monthly payment | $ 89,424 | ||||||||
Term Loan B [Member] | Minimum [Member] | |||||||||
Debt instrument interest rate | 0.50% | ||||||||
Term Loan B [Member] | Maximum [Member] | |||||||||
Debt instrument interest rate | 4.00% | ||||||||
Greystone and GSM and International Bank of Commerce [Member] | |||||||||
Borrowed loans | $ 2,500,000 | $ 2,500,000 | |||||||
Greystone and GSM and International Bank of Commerce [Member] | Revolving Loan [Member] | |||||||||
Debt instrument principal amount | 2,500,000 | 2,500,000 | |||||||
Greystone and GSM and International Bank of Commerce [Member] | Term Loan [Member] | |||||||||
Debt instrument principal amount | 9,200,000 | $ 9,200,000 | |||||||
Greystone and GSM and International Bank of Commerce [Member] | Term Loan C [Member] | |||||||||
Long-term borrowings | $ 1,795,000 | ||||||||
New Equipment Loan [Member] | International Bank of Commerce [Member] | |||||||||
Debt instrument principal amount | $ 2,530,072 | ||||||||
Term Loan [Member] | International Bank of Commerce [Member] | |||||||||
Debt instrument principal amount | 2,917,422 | ||||||||
Term Loan A [Member] | International Bank of Commerce [Member] | |||||||||
Debt instrument principal amount | 5,447,504 | ||||||||
Term Loan B [Member] | International Bank of Commerce [Member] | |||||||||
Remaining principal balance | $ 3,000,000 | ||||||||
Revolving Loan [Member] | |||||||||
Debt instrument maturity date | Jan. 31, 2019 | ||||||||
Revolving Loan [Member] | Minimum [Member] | |||||||||
Debt instrument interest rate | 0.50% | ||||||||
Revolving Loan [Member] | Maximum [Member] | |||||||||
Debt instrument interest rate | 4.00% | ||||||||
IBC Loan Agreement [Member] | |||||||||
Borrowers maintain coverage ratio description | Borrowers to maintain a debt service coverage ratio of 1:25 to 1:00 and a funded debt to EBIDA ratio not exceeding 3:00 to 1:00 | Greystones debt service coverage ratio at August 31, 2017 was 1.06 which is not in compliance with the IBC Loan Agreements minimum debt service coverage ratio of 1.25. | |||||||
Capital expenditure on fixed assets | 1,000,000 | $ 1,000,000 | |||||||
Preferred stock amount | $ 500,000 | $ 500,000 | |||||||
IBC Loan Agreement [Member] | Guaranty [Member] | |||||||||
Borrowing combined amount | $ 6,500,000 | ||||||||
GRE And IBC [Member] | Mortgage Loan [Member] | |||||||||
Debt instrument interest rate | 4.50% | 4.50% | |||||||
Debt instrument principal amount | $ 3,412,500 | $ 3,412,500 | |||||||
Debt instrument maturity date | Jan. 31, 2019 | ||||||||
Prime Rate [Member] | |||||||||
Debt instrument interest rate | 4.25% |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) | Aug. 31, 2017 | May 31, 2017 |
Total debt | $ 19,188,250 | $ 18,032,416 |
Debt issue costs, net of amortization | (198,483) | (228,426) |
Debt | 18,989,767 | 17,803,990 |
Less: Current portion | (2,710,820) | (2,493,236) |
Long-term Debt | 16,278,947 | 15,310,754 |
Term Note A Payable to International Bank of Commerce, Prime Rate of Interest Plus 0.5% but Not Less Than 4.0%, Maturing January 7, 2019 [Member] | ||
Total debt | 4,457,243 | 4,626,191 |
Term Note B Payable to International Bank of Commerce, Prime Rate of Interest Plus 0.5% but Not Less Than 4.0%, Maturing January 7, 2019 [Member] | ||
Total debt | 1,466,522 | 1,715,132 |
Term Note C Payable to International Bank of Commerce, Prime Rate of Interest Plus 0.5% but Not Less Than 4.0%, Maturing August 4, 2020 [Member] | ||
Total debt | 1,776,190 | |
Revolving Note Payable to International Bank of Commerce, Prime Rate of Interest Plus 0.5% but Not Less Than 4.0%, Due January 31, 2019 [Member] | ||
Total debt | 2,260,000 | 2,260,000 |
Term Note Payable by Gre to International Bank of Commerce, Interest Rate of 4.5%, Monthly Principal and Interest Payments of $26,215, Due January 31, 2019 [Member] | ||
Total debt | 2,795,134 | 2,841,285 |
Note Payable to First Bank, Prime Rate of Interest Plus 1.45% but Not Less Than 4.95%, Monthly Principal and Interest Payment of $30,628, Due August 21, 2021, Secured by Production Equipment [Member] | ||
Total debt | 1,322,628 | 1,396,448 |
Note Payable to Robert Rosene, 7.5% Interest, Due January 15, 2019 [Member] | ||
Total debt | 4,469,355 | 4,469,355 |
Note Payable to Yorktown Management & Financial Services, LLC, 5.0% Interest, Due February 28, 2019, Monthly Principal and Interest Payments of $20,629 [Member] | ||
Total debt | 357,021 | 413,969 |
Other Note Payable [Member] | ||
Total debt | $ 284,157 | $ 310,036 |
Debt - Schedule of Debt (Deta30
Debt - Schedule of Debt (Details) (Parenthetical) - USD ($) | 3 Months Ended | 12 Months Ended |
Aug. 31, 2017 | May 31, 2017 | |
Debt instrument interest rate | 5.00% | 5.00% |
Debt instrument maturity date | Aug. 7, 2019 | Aug. 7, 2019 |
Term Note A Payable to International Bank of Commerce, Prime Rate of Interest Plus 0.5% but Not Less Than 4.0%, Maturing January 7, 2019 [Member] | ||
Debt instrument interest rate | 0.50% | 0.50% |
Debt instrument maturity date | Jan. 7, 2019 | Jan. 7, 2019 |
Term Note A Payable to International Bank of Commerce, Prime Rate of Interest Plus 0.5% but Not Less Than 4.0%, Maturing January 7, 2019 [Member] | Maximum [Member] | ||
Debt instrument interest rate | 4.00% | 4.00% |
Term Note B Payable to International Bank of Commerce, Prime Rate of Interest Plus 0.5% but Not Less Than 4.0%, Maturing January 7, 2019 [Member] | ||
Debt instrument interest rate | 0.50% | 0.50% |
Debt instrument maturity date | Jan. 7, 2019 | Jan. 7, 2019 |
Term Note B Payable to International Bank of Commerce, Prime Rate of Interest Plus 0.5% but Not Less Than 4.0%, Maturing January 7, 2019 [Member] | Maximum [Member] | ||
Debt instrument interest rate | 4.00% | 4.00% |
Term Note C Payable to International Bank of Commerce, Prime Rate of Interest Plus 0.5% but Not Less Than 4.0%, Maturing August 4, 2020 [Member] | ||
Debt instrument interest rate | 0.50% | 0.50% |
Debt instrument maturity date | Aug. 4, 2020 | Aug. 4, 2020 |
Term Note C Payable to International Bank of Commerce, Prime Rate of Interest Plus 0.5% but Not Less Than 4.0%, Maturing August 4, 2020 [Member] | Maximum [Member] | ||
Debt instrument interest rate | 4.00% | 4.00% |
Revolving Note Payable to International Bank of Commerce, Prime Rate of Interest Plus 0.5% but Not Less Than 4.0%, Due January 31, 2019 [Member] | ||
Debt instrument interest rate | 0.50% | 0.50% |
Debt instrument maturity date | Jan. 31, 2019 | Jan. 31, 2019 |
Revolving Note Payable to International Bank of Commerce, Prime Rate of Interest Plus 0.5% but Not Less Than 4.0%, Due January 31, 2019 [Member] | Maximum [Member] | ||
Debt instrument interest rate | 4.00% | 4.00% |
Term Note Payable by Gre to International Bank of Commerce, Interest Rate of 4.5%, Monthly Principal and Interest Payments of $26,215, Due January 31, 2019 [Member] | ||
Debt instrument interest rate | 4.50% | 4.50% |
Debt instrument maturity date | Jan. 31, 2019 | Jan. 31, 2019 |
Debt instrument principal and interest amount | $ 26,215 | $ 26,215 |
Note Payable to First Bank, Prime Rate of Interest Plus 1.45% but Not Less Than 4.95%, Monthly Principal and Interest Payment of $30,628, Due August 21, 2021, Secured by Production Equipment [Member] | ||
Debt instrument interest rate | 1.45% | 1.45% |
Debt instrument maturity date | Aug. 21, 2021 | Aug. 21, 2021 |
Debt instrument principal and interest amount | $ 30,628 | $ 30,628 |
Note Payable to First Bank, Prime Rate of Interest Plus 1.45% but Not Less Than 4.95%, Monthly Principal and Interest Payment of $30,628, Due August 21, 2021, Secured by Production Equipment [Member] | Maximum [Member] | ||
Debt instrument interest rate | 4.95% | 4.95% |
Note Payable to Robert Rosene, 7.5% Interest, Due January 15, 2019 [Member] | ||
Debt instrument interest rate | 7.50% | 7.50% |
Debt instrument maturity date | Jan. 15, 2019 | Jan. 15, 2019 |
Note Payable to Yorktown Management & Financial Services, LLC, 5.0% Interest, Due February 28, 2019, Monthly Principal and Interest Payments of $20,629 [Member] | ||
Debt instrument interest rate | 5.00% | 5.00% |
Debt instrument maturity date | Feb. 28, 2019 | Feb. 28, 2019 |
Debt instrument principal and interest amount | $ 20,629 | $ 20,629 |
Capital Lease (Details Narrativ
Capital Lease (Details Narrative) - USD ($) | 3 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Monthly lease payment | $ 200,000 | |
Lease payment per invoice rate | $ 6.25 | |
Lease bears interest rate | 5.00% | |
Production equipment gross | $ 5,323,864 | |
Amortization | $ 134,000 | |
Three-Year Lease Agreement [Member] | ||
Capital expenditure on fixed assets | $ 5,400,000 |
Capital Lease - Schedule of Non
Capital Lease - Schedule of Non-cancellable Capital Lease (Details) - USD ($) | Aug. 31, 2017 | May 31, 2017 |
Leases [Abstract] | ||
Non-cancellable capital lease with private company, interest rate of 5%, due August 7, 2019 | $ 3,247,595 | $ 3,794,063 |
Less: current portion | (2,245,129) | (2,261,560) |
Non-cancellable capital lease, net of current portion | $ 1,002,466 | $ 1,532,503 |
Capital Lease - Schedule of N33
Capital Lease - Schedule of Non-cancellable Capital Lease (Details) (Parenthetical) | 3 Months Ended | 12 Months Ended |
Aug. 31, 2017 | May 31, 2017 | |
Leases [Abstract] | ||
Capital lease interest rate | 5.00% | 5.00% |
Capital lease maturity date | Aug. 7, 2019 | Aug. 7, 2019 |
Capital Lease - Schedule of Fut
Capital Lease - Schedule of Future Minimum Lease Payments (Details) | Aug. 31, 2017USD ($) |
Leases [Abstract] | |
Twelve months ended August 31, 2018 | $ 2,357,500 |
Twelve months ended August 31, 2019 | 1,015,157 |
Total lease payments | 3,372,657 |
Imputed interest | 125,062 |
Present value of lease payments | $ 3,247,595 |
Concentrations, Risks and Unc35
Concentrations, Risks and Uncertainties (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended |
Aug. 31, 2017 | May 31, 2017 | |
Debt instrument maturity date | Aug. 7, 2019 | Aug. 7, 2019 |
Robert B. Rosene [Member] | ||
Notes payable | $ 4,469,355 | |
Debt instrument maturity date | Jan. 15, 2019 | |
Fiscal Years 2018 [Member] | ||
Purchases from customers | $ 493,104 | |
Fiscal Years 2018 [Member] | Sales Revenue, Net [Member] | Two Customers [Member] | ||
Concentration risk percentage | 73.00% | |
Fiscal Years 2017 [Member] | ||
Purchases from customers | $ 478,752 | |
Fiscal Years 2017 [Member] | Sales Revenue, Net [Member] | Two Customers [Member] | ||
Concentration risk percentage | 66.00% |
Commitments (Details Narrative)
Commitments (Details Narrative) | 3 Months Ended |
Aug. 31, 2017USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments for purchase of production equipment | $ 359,000 |