Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
May 31, 2019 | Aug. 16, 2019 | Nov. 30, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | GREYSTONE LOGISTICS, INC. | ||
Entity Central Index Key | 0001088413 | ||
Document Type | 10-K | ||
Document Period End Date | May 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --05-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | false | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 10,043,000 | ||
Entity Common Stock, Shares Outstanding | 28,361,201 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | May 31, 2019 | May 31, 2018 |
Current Assets: | ||
Cash | $ 1,255,408 | $ 379,632 |
Accounts receivable -Trade | 6,320,875 | 4,951,148 |
Related parties | 50,320 | 60,045 |
Inventory | 2,620,991 | 3,089,267 |
Prepaid expenses | 239,146 | 215,617 |
Total Current Assets | 10,486,740 | 8,695,709 |
Property, Plant and Equipment, net | 32,499,678 | 25,353,876 |
Total Assets | 42,986,418 | 34,049,585 |
Current Liabilities: | ||
Current portion of long-term debt | 3,030,630 | 2,324,046 |
Current portion of capital leases | 1,516,629 | 2,160,807 |
Accounts payable and accrued expenses | 6,520,721 | 4,651,695 |
Deferred revenue | 2,201,067 | 3,404,334 |
Accrued expenses - related parties | 55,104 | |
Preferred dividends payable | 112,192 | |
Total Current Liabilities | 13,381,239 | 12,595,986 |
Long-Term Debt, net of current portion | 19,629,148 | 16,836,180 |
Capital Leases, net of current portion | 5,238,190 | 1,733,007 |
Deferred Tax Liability | 926,642 | 490,965 |
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 | (51,108,677) | (52,485,313) |
Total Greystone Stockholders' Equity | 2,684,928 | 1,308,292 |
Non-controlling interest | 1,126,271 | 1,085,155 |
Total Equity | 3,811,199 | 2,393,447 |
Total Liabilities and Equity | $ 42,986,418 | $ 34,049,585 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | May 31, 2019 | May 31, 2018 |
Statement of Financial Position [Abstract] | ||
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 - USD ($) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Income Statement [Abstract] | ||
Sales | $ 71,077,116 | $ 48,609,075 |
Cost of Sales | 62,837,214 | 41,570,319 |
Gross Profit | 8,239,902 | 7,038,756 |
Selling, General and Administrative Expenses | 3,922,284 | 3,034,027 |
Operating Income | 4,317,618 | 4,004,729 |
Other Income (Expense): | ||
Other income | 11,560 | 12,144 |
Interest expense | (1,836,294) | (1,373,392) |
Income before Income Taxes | 2,492,884 | 2,643,481 |
Provision for Income Taxes | 435,677 | 772,380 |
Net Income | 2,057,207 | 1,871,101 |
Income Attributable to Non-controlling Interest | (252,116) | (247,039) |
Preferred Dividends | (428,455) | (384,384) |
Net Income Attributable to Common Stockholders | $ 1,376,636 | $ 1,239,678 |
Income Per Share of Common Stock - Basic and Diluted | $ 0.05 | $ 0.04 |
Weighted Average Shares of Common Stock Outstanding - Basic | 28,361,201 | 28,361,201 |
Weighted Average Shares of Common Stock Outstanding - Diluted | 29,009,415 | 28,993,110 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total Greystone Stockholders' Equity (Deficit) [Member] | Non-controlling Interest [Member] | Total |
Balance at May. 31, 2017 | $ 5 | $ 2,836 | $ 53,790,764 | $ (53,724,991) | $ 68,614 | $ 1,071,516 | $ 1,140,130 |
Balance, shares at May. 31, 2017 | 50,000 | 28,361,201 | |||||
Cash distributions | $ (233,400) | (233,400) | |||||
Preferred dividends | (384,384) | (384,384) | (384,384) | ||||
Net income | 1,624,062 | 1,624,062 | 247,039 | 1,871,101 | |||
Balance at May. 31, 2018 | $ 5 | $ 2,836 | 53,790,764 | (52,485,313) | 1,308,292 | 1,085,155 | 2,393,447 |
Balance, shares at May. 31, 2018 | 50,000 | 28,361,201 | |||||
Cash distributions | (211,000) | (211,000) | |||||
Preferred dividends | (428,455) | (428,455) | (428,455) | ||||
Net income | 1,805,091 | 1,805,091 | 252,116 | 2,057,207 | |||
Balance at May. 31, 2019 | $ 5 | $ 2,836 | $ 53,790,764 | $ (51,108,677) | $ 2,684,928 | $ 1,126,271 | $ 3,811,199 |
Balance, shares at May. 31, 2019 | 50,000 | 28,361,201 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Cash Flows from Operating Activities: | ||
Net income | $ 2,057,207 | $ 1,871,101 |
Adjustments to reconcile net income to net cash provided by operating activities - | ||
Depreciation and amortization | 4,533,757 | 3,686,121 |
Change in deferred taxes | 435,677 | 772,380 |
Loss on sale of equipment | 7,932 | |
Decrease (increase) in trade accounts receivable | (1,369,727) | 1,208,997 |
Decrease in related party receivable | 9,725 | 13,533 |
Decrease (increase) in inventory | 468,276 | (1,501,715) |
Increase in prepaid expenses | (23,529) | (79,222) |
Increase (decrease) in accounts payable and accrued expenses | 1,913,571 | (1,321,375) |
Increase (decrease) in deferred revenue | (1,203,267) | 3,404,334 |
Net cash provided by operating activities | 6,821,690 | 8,062,086 |
Cash Flows from Investing Activities: | ||
Purchase of property and equipment | (7,016,662) | (6,710,210) |
Proceeds from sale of equipment | 968,168 | 3,000 |
Net cash used in investing activities | (6,048,494) | (6,707,210) |
Cash Flows from Financing Activities: | ||
Proceeds from long-term debt | 4,636,800 | 2,638,200 |
Proceeds from revolving loan | 4,956,000 | 2,119,000 |
Payments on long-term debt and capitalized leases | (4,951,433) | (5,431,836) |
Payments on related party note payable and capital lease | (340,042) | (232,119) |
Payments on revolving loan | (3,630,000) | |
Payments for debt issuance costs | (41,482) | |
Dividends paid on preferred stock | (316,263) | (414,110) |
Distributions paid by non-controlling interest | (211,000) | (233,400) |
Net cash provided by (used in) financing activities | 102,580 | (1,554,265) |
Net Increase (Decrease) in Cash | 875,776 | (199,389) |
Cash, beginning of year | 379,632 | 579,021 |
Cash, end of year | $ 1,255,408 | $ 379,632 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
May 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization Greystone Logistics, Inc. (“Greystone”), through its two wholly-owned subsidiaries, Greystone Manufacturing, LLC (“GSM”) and Plastic Pallet Production, Inc. (“PPP”), is engaged in the manufacturing and marketing of plastic pallets and pelletized recycled plastic resin. Principles of Consolidation The consolidated financial statements include the accounts of Greystone, its subsidiaries and entities required to be consolidated by the accounting guidance for variable interest entities (“VIE”). All material intercompany accounts and transactions have been eliminated. Greystone consolidates its VIE, Greystone Real Estate, L.L.C. (“GRE”), which owns the manufacturing facilities which are occupied by Greystone. GRE is owned by Warren F. Kruger, President and CEO, and Robert B. Rosene, Jr., a member of Greystone’s Board of Directors. Use of Estimates The preparation of Greystone’s financial statements in conformity with accounting principles generally accepted in the United States of America requires Greystone’s management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ materially from those estimates. Accounts Receivable and Allowance for Doubtful Accounts Greystone carries its accounts receivable at their face value less an allowance for doubtful accounts. On a periodic basis, Greystone evaluates its accounts receivable and establishes an allowance for doubtful accounts based on a combination of specific customer circumstances, credit conditions and history of collections. Based on periodic reviews of outstanding accounts receivable, Greystone writes off balances deemed to be uncollectible against the allowance for doubtful accounts. There was no allowance for doubtful accounts at May 31, 2019 and 2018 as the accounts receivable are considered fully collectible. Inventory Inventory consists of finished pallets and raw materials which are stated at the lower of average cost or net realizable value. Property, Plant and Equipment Greystone’s property, plant and equipment is stated at cost. Depreciation expense is computed using the straight-line method over the estimated useful lives, as follows: Plant buildings 39 years Production machinery and equipment 5-12 years Leasehold improvements 5-7 years Furniture & fixtures 3-5 years Upon sale, retirement or other disposal, the related costs and accumulated depreciation of items of property, plant or equipment are removed from the related accounts and any gain or loss is recognized. When events or changes in circumstances indicate that assets may be impaired, an evaluation is performed comparing the estimated future undiscounted cash flows associated with the asset to the asset’s carrying amount. If the asset’s carrying amount exceeds the cash flows, a write-down to fair value is required. Debt Issuance Costs The Company capitalizes debt issuance costs as incurred and amortizes such costs on a straight-line basis across the term of the debt. Debt issuance costs are fully amortized when the debt is repaid or refinanced. Stock Options The grant-date fair value of stock options and other equity-based compensation issued to employees is amortized on the straight-line basis over the vesting period of the award as compensation cost. The fair value of new option grants is estimated using the Black-Scholes option pricing model. The Black-Scholes option pricing model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option pricing models require the input of highly subjective assumptions including the expected stock price volatility, dividend yields and expected holding periods. Recognition of Revenues On June 1, 2018, Greystone adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606) any adjustments to Greystone’s consolidated financial statements for prior periods The amount of revenue recognized reflects the consideration to which Greystone expects to be entitled to receive in exchange for its products. The following steps are applied in determining the amount and timing of revenue recognition: 1. Identification of a contract with a customer is a sales arrangement involving a purchase order issued by the customer stating each party’s rights regarding the plastic pallets to be transferred. Payment terms vary by customer from net 30 days to 90 days. Discounts on sales arrangements are generally not provided. Credit worthiness is determined by Greystone based on payment experience and financial information available on the customer. 2. Identification of performance obligations in the sales arrangement which is predominantly the promise to transfer plastic pallets to Greystone’s customer. 3. Determination of the transaction price which is specified in the purchase order based on product pricing negotiated between Greystone and the customer. 4. Allocation of the transaction price to performance obligations. 5. Recognition of revenue which predominantly occurs upon completion of the performance obligation and transfer of control. Transfer of control generally occurs at the point of shipment which is Greystone’s manufacturing and warehouse locations. Income Taxes Greystone accounts for income taxes under the liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the consolidated financial statements and tax bases of assets and liabilities and tax loss carryforwards using enacted tax rates in effect for the year in which the differences are expected to reverse. Earnings Per Share Basic earnings per share is computed by dividing the earnings available to common stockholders by the weighted average number of common shares outstanding for the year. In arriving at income available to common stockholders, preferred stock dividends are deducted from net income for the year. Greystone’s Series 2003 preferred stock, which is convertible into 3,333,333 shares of common stock, was not included in the computation of diluted earnings per share for the fiscal years 2019 and 2018 as the effect would have been antidilutive. Recent Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses |
Inventory
Inventory | 12 Months Ended |
May 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 2. INVENTORY Inventory consists of the following as of May 31: 2019 2018 Raw materials $ 1,295,991 $ 864,339 Finished pallets 1,325,000 2,224,928 Total Inventory $ 2,620,991 $ 3,089,267 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
May 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Note 3. PROPERTY, PLANT AND EQUIPMENT A summary of the property, plant and equipment for Greystone is as follows, as of May 31: 2019 2018 Production machinery and equipment $ 45,645,910 $ 35,270,326 Plant buildings and land 6,336,855 5,739,491 Leasehold improvements 979,890 534,637 Furniture and fixtures 563,074 396,882 53,525,729 41,941,336 Less: Accumulated depreciation (21,026,051 ) (16,587,460 ) Net Property, Plant and Equipment $ 32,499,678 $ 25,353,876 Property, plant and equipment includes items which had not been placed into service as of May 31, 2019, as follows: Production machinery and equipment $ 3,635,683 Plant buildings $ 597,364 Leasehold improvements $ 121,544 Two plant buildings and land located in Bettendorf, Iowa are owned by GRE, a variable interest entity, and had a net book value of $2,896,549 at May 31, 2019. Depreciation expense for the years ended May 31, 2019 and 2018, was $4,438,591 and $3,549,065, respectively. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
May 31, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Note 4. LONG-TERM DEBT Long-term debt consists of the following as of May 31: 2019 2018 Term loan A payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.0%, maturing April 30, 2023 $ 3,234,947 $ 3,945,443 Term loan C payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.0%, maturing August 4, 2020 1,399,490 1,613,445 Term loan D payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.75%, maturing January 10, 2022 1,744,235 2,314,935 Term loan E payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.75%, maturing January 10, 2022 927,199 843,200 Term loan F payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 5.25%, maturing February 8, 2021 3,398,247 - Term loan G payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 5.25%, maturing April 30, 2024 876,934 - Revolving loan payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 5.50%, due January 31, 2021 3,205,000 1,879,000 Term loan payable by GRE to International Bank of Commerce, interest rate of 5.5%, monthly principal and interest payments of $27,688, due April 30, 2023 2,461,116 2,652,428 Note payable to Robert Rosene, 7.5% interest, due January 15, 2021 4,426,631 4,469,355 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 800,488 1,099,447 Note payable to Yorktown Management & Financial Services, LLC, 5.0% interest, due February 28, 2019, monthly principal and interest payments of $20,629 - 181,850 Other 223,177 252,493 Face value of long-term debt 22,697,464 19,251,596 Less: Debt issuance costs, net of amortization (37,686 ) (91,370 ) 22,659,778 19,160,226 Less: Current portion of long-term debt (3,030,630 ) (2,324,046 ) Long-term debt $ 19,629,148 $ 16,836,180 The prime rate of interest as of May 31, 2019 was 5.50%. Effective August 1, 2019, the prime rate of interest decreased to 5.25%. 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, as amended, provides for certain term loans and a revolver loan. During the years ended May 31, 2019 and 2018, Greystone and IBC entered into certain amendments to the IBC Loan Agreement providing for the following new loans: Date Term Loan Amount Maturity Purpose August 4, 2017 C $ 1,795,000 August 4, 2020 Acquisition of Equipment January 10, 2018 D $ 2,500,000 January 10, 2022 Convert Revolver to Term January 10, 2018 E $ 1,000,000 January 10, 2022 Acquisition of Equipment August 8, 2018 F $ 3,600,000 February 8, 2021 Acquisition of Equipment April 30, 2019 G $ 880,000 April 30, 2024 Acquisition of Real Estate The IBC term loans make equal monthly payments of principal and interest in such amounts sufficient to amortize the principal balance of (i) Term Loan A over a seven-year period beginning February 29, 2016 (currently $77,548 per month), (ii) Term Loan C over a seven-year period beginning August 31, 2017 (currently $25,205 per month), (iii) Term Loan D over a four-year period beginning February 10, 2019 (currently $57,469 per month), (iv) Term Loan E over a four-year period beginning February 10, 2019 (currently $23,060 per month), (v) Term Loan F over a five-year period beginning February 28, 2019 (currently $68,808 per month) and (vi) Term Loan G over a fifteen-year period beginning April 30, 2019 (currently $7,466 per month). The monthly payments of principal and interest on the IBC term loans may vary as a result of changes in the prime rate of interest. The IBC Loan Agreement, as amended, provides a revolving loan in an aggregate principal amount of up to $4,000,000 (the “Revolving 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 in no event can exceed $4,000,000. The Revolving Loan bears interest at greater of the prime rate of interest plus 0.5%, or 5.50% and matures January 31, 2021. 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 $1,500,000 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. As of May 31, 2019, Greystone was not in compliance to maintain the debt service coverage ratio required by the IBC Loan Agreement. IBC issued a waiver, dated August 26, 2019, to Greystone for failure to maintain the debt service coverage ratio at May 31, 2019. 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, as amended, providing for a mortgage loan to GRE of $3,412,500. The loan provides for a 5.5% interest rate and a maturity of April 30, 2023 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. Effective June 1, 2016, the note payable with Mr. Rosene was restated (the “Restated Note”) whereby accrued interest of $2,475,690 was combined with the outstanding principal of $2,066,000 resulting in a note payable in the principal amount of $4,541,690 with an interest rate of 7.5% and a maturity of January 15, 2018, subsequently amended to January 15, 2021. The Restated Note requires the payment of accrued interest to Mr. Rosene. In addition, the Restated Note allows Greystone to make additional payments, at Greystone’s discretion, up to an amount allowed by the IBC Loan Agreement. Note Payable between Greystone and First Bank In connection with the acquisition of certain equipment from Yorktown Management & Financial Services, LLC (“Yorktown”) effective February 1, 2017, Greystone assumed a note payable in the amount of $1,469,713 between Yorktown and First Bank. The note bears interest at the prime rate of interest plus 1.45% but not less than 4.95% (6.95% at May 31, 2019). The First Bank note is secured by certain production equipment. Maturities Maturities of Greystone’s long-term debt for the five years after May 31, 2019 are $3,030,630, $13,868,421, $2,370,964, $2,713,978 and $713,471. |
Capital Leases
Capital Leases | 12 Months Ended |
May 31, 2019 | |
Leases [Abstract] | |
Capital Leases | Note 5. CAPITAL LEASES Capital leases consist of the following as of May 31: 2019 2018 Non-cancelable capital leases $ 6,754,819 $ 3,893,814 Less: Current portion of capital leases (1,516,629 ) (2,160,807 ) Non-cancelable capital leases, net of current portion $ 5,238,190 $ 1,733,007 Greystone and an unrelated private company entered into three five-year lease agreements which have an effective interest rate of 7.4%. The leased equipment was placed into production during February 2018, August 2018 and December 2018, at a total cost of approximately $6.9 million. The lease agreements include bargain purchase options to acquire the production equipment at the end of the leases’ term. The leased equipment is used to manufacture pallets to sell to the private company. Rental payments are made as a credit on every sales invoice of pallets produced on the respective leased equipment at the rate of $3.32 per pallet. The aggregate monthly rental is estimated to be approximately $45,000 per machine. The agreements provide for minimum monthly lease rental payments based upon the total pallets sold in excess of a specified amount not to exceed the monthly productive capacity of the leased machines. Yorktown and Greystone entered into a sale and leaseback agreement effective December 28, 2018, whereby Yorktown purchased certain production equipment from Greystone at its net book value of $968,168 and entered into a four-year lease agreement with Greystone at a monthly rent of $27,915 for the initial thirty-six months and $7,695 for the remaining twelve months. The lease agreement provides for a purchase option of $10,000 at the end of the lease on December 27, 2023. In May 2019, Greystone exercised options to purchase certain production equipment pursuant to lease agreements originating in August 2016 between Greystone and the private company. This equipment with a gross carrying value of $5,365,889 is excluded from the following table at May 31, 2019. The production equipment under the non-cancelable capital leases at May 31, 2019 and 2018 is as follows: 2019 2018 Production equipment under capital leases $ 7,861,233 $ 7,591,574 Less: Accumulated amortization (614,909 ) (974,811 ) Production equipment under capital leases, net $ 7,246,324 $ 6,616,763 Amortization of the carrying amount of the assets was $1,093,760 and $594,578 for the years ended May 31, 2019 and 2018, respectively. The amortization was included in depreciation expense. Future minimum lease payments under non-cancelable capital leases as of May 31, 2019, are approximately: Year ended May 31, 2020 $ 1,966,428 Year ended May 31, 2021 1,966,428 Year ended May 31, 2022 1,865,328 Year ended May 31, 2023 1,443,654 Year ended May 31, 2024 605,053 Total lease payments 7,846,891 Less: Imputed interest 1,092,072 Present value of minimum lease payments $ 6,754,819 |
Revenue
Revenue | 12 Months Ended |
May 31, 2019 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Revenue | Note 6. REVENUE Greystone’s principal product is plastic pallets produced from recycled plastic resin. Sales are primarily to customers in the continental United States of America. International sales are made to customers in Canada and Mexico which totaled $540,969 and $408,499 in fiscal years 2019 and 2018, respectively. Greystone’s customers include stocking and non-stocking distributors and direct sales to end-user customers. Sales to the following categories of customers for the fiscal years 2019 and 2018, respectively, were as follows: Category 2019 2018 Major customers (end users) 86 % 78 % Distributors 14 % 22 % Advances from a customer pursuant to a contract for the sale of plastics pallets is recognized as deferred revenue. Revenue is recognized by Greystone as pallets are shipped to the customer. Customer advances totaled $3,161,118 and $4,595,034 in fiscal years 2019 and 2018, respectively. The unrecognized balance of deferred revenue at May 31, 2019 and 2018, was $2,201,067 and $3,404,334, respectively. The Company recognized $3,404,334 into revenue during the year ended May 31, 2019, related to customer advances which were recorded at May 31, 2018. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
May 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 7. RELATED PARTY TRANSACTIONS Transactions with Warren F. Kruger, Chairman 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 for manufacturing pallets. Greystone compensates Yorktown for the use of equipment as discussed below. Rental fees. Yorktown provides administrative office space for Greystone in Tulsa, Oklahoma under a five-year lease at a monthly rental of $4,000 per month. Total rent expense was $48,000 each in fiscal years 2019 and 2018. At May 31, 2019, future minimum payments under the non-cancelable operating lease are $48,000 for fiscal years 2020 and 2021 and $28,000 for fiscal year 2022. Transactions with TriEnda Holdings, L.L.C. TriEnda Holdings, L.L.C. (“TriEnda”) is a manufacturer of plastic pallets, protective packaging and dunnage utilizing thermoform processing of which Warren F. Kruger, Greystone’s President and CEO, is the non-executive chairman of the board of directors 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 purchases certain pallet designs produced by TriEnda for resale. During fiscal year 2019 and 2018, Greystone purchases from TriEnda totaled $42,349 and $68,302, respectively. Transactions with Green Plastic Pallets Green Plastic Pallets (“Green”) is an entity owned by James Kruger, a brother to Warren Kruger, Greystone’s President and CEO. Green purchased pallets from Greystone totaling $225,600 and $421,965 in fiscal years 2019 and 2018, respectively. At May 31, 2019, Green owed $38,760 to Greystone. |
Federal Income Taxes
Federal Income Taxes | 12 Months Ended |
May 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Federal Income Taxes | Note 8. FEDERAL INCOME TAXES Deferred taxes as of May 31, 2019 and 2018 are as follows: 2019 2018 Deferred tax asset: Net operating loss carryforward $ 4,807,616 $ 2,015,616 Accrued expenses 88,298 101,320 Other 33,528 27,432 Total deferred tax asset 4,929,442 2,144,368 Deferred tax liability: Depreciation and amortization, tax reporting in excess of financial (2,877,573 ) (2,635,333 ) Valuation allowance (2,978,511 ) - Net deferred tax liability $ (926,642 ) $ (490,965 ) A deferred tax asset is recognized for tax-deductible temporary differences and operating losses using the applicable enacted tax rate. In assessing the realizability of deferred tax assets, management considers the likelihood of whether it is more likely than not the net deferred tax asset will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which net operating losses and the reversal of timing differences may offset taxable income. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Future realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character in carryforward periods under the tax law. Based on this evaluation, management has determined that Greystone will not be able to realize the full effect of the deferred tax assets and a valuation allowance of $2,978,511 has been recorded as of May 31, 2019. There was no valuation allowance as of May 31, 2018. The net change in deferred taxes for the year ended May 31, 2019 and 2018 is as follows: 2019 2018 Valuation allowance $ (2,978,511 ) $ - Net operating loss carryforward 2,792,000 (87,308 ) Depreciation and amortization, tax reporting in excess of financial (242,240 ) (664,475 ) Allowance for doubtful accounts - (8,788 ) Accrued expenses (13,022 ) (11,701 ) Other 6,096 (108 ) Net change $ (435,677 ) $ (772,380 ) The provision for income taxes at May 31, 2019 and 2018 consists of the following: 2019 2018 Current income tax – Federal and State $ - $ - Deferred income tax provision 435,677 772,380 Provision for income taxes $ 435,677 $ 772,380 Greystone’s provision for income taxes for the years ended May 31, 2019 and 2018 differs from the federal statutory rate as follows: 2019 2018 Tax provision using statutory rates 21 % 21 % State income taxes 9 9 Federal tax rate change adjustment - (2 ) Change in valuation allowance (11 ) - Expiring net operating losses - 3 VIE income passed to members (2 ) (2 ) Tax provision per financial statements 17 % 29 % During fiscal year 2019, Greystone conducted a reassessment of its net operating losses (NOL) and corrected an error which resulted in an increase in the amount of NOL deductions which were available. Additionally, the correction to the NOLs was accompanied by an offsetting increase in the valuation allowance based on management’s estimate of Greystone’s ability to utilize the NOLs. As a result, this correction had no impact on Greystone’s results from operations or financial position. At May 31, 2019, Greystone had NOL deductions for Federal income tax purposes from inception through May 31, 2005 of $11,953,302, expiring in fiscal years 2022 through fiscal year 2025 of which approximately $4,200,000 is management’s estimate of the usable amount pursuant to Internal Revenue Code Section 382. The limitation is due to a change in control of Greystone during the fiscal year ended May 31, 2005. The utilization of NOL’s accumulated through fiscal year 2005 is limited to approximately $437,000 per year and is available to carryforward. At May 31, 2019, management conducted an evaluation of its valuation allowance which resulted in a reduction to the previously established allowance of approximately $233,000. A summary of Federal net operating losses (NOL) for Federal income tax purposes at May 31, 2019 is as follows: NOL Carryforward Year Expiring Year ended May 31, 2002 $ 1,950,345 2022 Year ended May 31, 2003 4,154,960 2023 Year ended May 31, 2004 1,632,774 2024 Year ended May 31, 2005 5,620,289 2025 Year ended May 31, 2006 2,622,921 2026 Year ended May 31, 2007 2,151,837 2027 Year ended May 31, 2011 746,484 2031 Year ended May 31, 2015 321,625 2035 Year ended May 31, 2016 1,060,747 2036 On December 22, 2017, the President signed into legislation The Tax Cuts and Jobs Act (the Act). The Act changes existing U.S. tax law and included numerous provisions that will affect Greystone’s business, including income tax accounting, disclosure and tax compliance. Greystone revalued all deferred tax assets and liabilities as of the date of the Act. The result of this revaluation was an increase in deferred taxes during fiscal year 2018 in the amount of $57,039 and a like decrease in the provision for income taxes. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
May 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | Note 9. STOCKHOLDERS’ EQUITY Convertible Preferred Stock In September 2003, Greystone issued 50,000 shares of Series 2003, cumulative, convertible preferred stock, par value $0.0001, for a total purchase price of $5,000,000. Each share of the preferred stock has a stated value of $100 and a dividend rate equal to the prime rate of interest plus 3.25% (8.75% at May 31, 2019) and may be converted into common stock at the conversion rate of $1.50 per share or an aggregate of 3,333,333 shares of common stock. The holder of the preferred stock has been granted certain voting rights so that such holder has the right to elect a majority of the Board of Directors of Greystone. Preferred stock dividends must be fully paid before a dividend on the common stock may be paid. Warrants to Purchase Common Stock Effective September 1, 2016, Greystone’s Board of Directors authorized the issuance of warrants to purchase 250,000 shares of Greystone’s common stock for $0.01 per share to each of Warren F. Kruger, President and CEO, and Robert B. Rosene, Jr., a member of Greystone’s Board of Directors, as compensation for providing guarantees on Greystone’s debt with IBC. The warrants are vested and expire January 10, 2027. |
Stock Options
Stock Options | 12 Months Ended |
May 31, 2019 | |
Stock Options | |
Stock Options | Note 10. STOCK OPTIONS Greystone has a stock option plan that provides for the granting of options to key employees and non-employee directors. The options are to purchase common stock at not less than fair market value at the date of the grant. Stock options generally expire in ten years from the date of grant or upon termination of employment and are generally exercisable one year from date of grant in cumulative annual installments of 25%. There was no option activity during the two years ended May 31, 2019. Outstanding options are as follows: Number Weighted Average Exercise Price Remaining Intrinsic Value Total outstanding May 31, 2017 200,000 $ 0.12 Total outstanding May 31, 2018 200,000 $ 0.12 Exercisable as of May 31, 2018 200,000 $ 0.12 Total outstanding May 31, 2019 200,000 $ 0.12 3.0 Exercisable as of May 31, 2019 200,000 $ 0.12 3.0 $ 88,000 Non-vested as of May 31, 2019 -0- |
Financial Instruments
Financial Instruments | 12 Months Ended |
May 31, 2019 | |
Investments, All Other Investments [Abstract] | |
Financial Instruments | Note 11. 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 May 31, 2019 and 2018, the carrying amounts reported in the balance sheet approximate fair value for the variable and fixed rate loans. |
Supplemental Information of Cas
Supplemental Information of Cash Flows | 12 Months Ended |
May 31, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Information of Cash Flows | Note 12. SUPPLEMENTAL INFORMATION OF CASH FLOWS Supplemental information of cash flows for the years ended May 31, 2019 and 2018: 2019 2018 Non-cash investing and financing activities: Acquisition of equipment through capital lease $ 4,667,380 $ 2,225,685 Revolver loan converted to term loan $ - $ 2,500,000 Acquisition of equipment in accounts payable $ 273,565 $ 373,214 Preferred dividend accrual $ 112,192 $ - Supplemental information: Interest paid $ 1,786,882 $ 1,210,308 |
Concentrations
Concentrations | 12 Months Ended |
May 31, 2019 | |
Risks and Uncertainties [Abstract] | |
Concentrations | Note 13. CONCENTRATIONS For the fiscal years 2019 and 2018, Greystone had three customers that accounted for approximately 86% and 78% of total sales, respectively. Greystone purchases damaged pallets from its customers at a price based on the value of the raw material content of the pallet. A majority of these purchases are from one of Greystone’s major customers which were approximately $1,587,000 and $1,616,000 in fiscal years 2019 and 2018, respectively. |
Variable Interest Entities (VIE
Variable Interest Entities (VIE) | 12 Months Ended |
May 31, 2019 | |
Variable Interest Entity, Measure of Activity [Abstract] | |
Variable Interest Entities (VIE) | Note 14. VARIABLE INTEREST ENTITIES (VIE) Greystone Real Estate, L.L.C. GRE, is owned by Warren Kruger, President and CEO, and Robert Rosene, a member of the Board of Directors. GRE was created solely to own and lease buildings that GSM occupies in Bettendorf, Iowa. The buildings, having a carrying value of $2,896,549 and $3,012,421 at May 31, 2019 and 2018, respectively, serve as collateral for GRE’s debt and Greystone’s debt under the Loan Agreement between Greystone and International Bank of Commerce. The debt had a carrying value of $2,461,116 and $2,652,428 at May 31, 2019 and 2018, respectively. |
Commitments
Commitments | 12 Months Ended |
May 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Note 15. COMMITMENTS At May 31, 2019, Greystone had outstanding commitments totaling $835,085 for the acquisition of equipment. |
Subsequent Event
Subsequent Event | 12 Months Ended |
May 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Event | Note 16. SUBSEQUENT EVENT On July 1, 2019, Greystone and IBC entered into the Tenth Amendment to the IBC Loan Agreement dated January 31, 2014 (the “Tenth Amendment”) whereby IBC made an additional term loan to Borrowers in the original principal amount of $672,000 (“Term Loan H”). Term Loan H has an interest rate of the prime rate of interest plus 0.5% but not less than 5.25% and a maturity date of January 1, 2022. The proceeds from Term Loan H will be used to acquire new production equipment. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
May 31, 2019 | |
Accounting Policies [Abstract] | |
Organization | Organization Greystone Logistics, Inc. (“Greystone”), through its two wholly-owned subsidiaries, Greystone Manufacturing, LLC (“GSM”) and Plastic Pallet Production, Inc. (“PPP”), is engaged in the manufacturing and marketing of plastic pallets and pelletized recycled plastic resin. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Greystone, its subsidiaries and entities required to be consolidated by the accounting guidance for variable interest entities (“VIE”). All material intercompany accounts and transactions have been eliminated. Greystone consolidates its VIE, Greystone Real Estate, L.L.C. (“GRE”), which owns the manufacturing facilities which are occupied by Greystone. GRE is owned by Warren F. Kruger, President and CEO, and Robert B. Rosene, Jr., a member of Greystone’s Board of Directors. |
Use of Estimates | Use of Estimates The preparation of Greystone’s financial statements in conformity with accounting principles generally accepted in the United States of America requires Greystone’s management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ materially from those estimates. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Greystone carries its accounts receivable at their face value less an allowance for doubtful accounts. On a periodic basis, Greystone evaluates its accounts receivable and establishes an allowance for doubtful accounts based on a combination of specific customer circumstances, credit conditions and history of collections. Based on periodic reviews of outstanding accounts receivable, Greystone writes off balances deemed to be uncollectible against the allowance for doubtful accounts. There was no allowance for doubtful accounts at May 31, 2019 and 2018 as the accounts receivable are considered fully collectible. |
Inventory | Inventory Inventory consists of finished pallets and raw materials which are stated at the lower of average cost or net realizable value. |
Property, Plant and Equipment | Property, Plant and Equipment Greystone’s property, plant and equipment is stated at cost. Depreciation expense is computed using the straight-line method over the estimated useful lives, as follows: Plant buildings 39 years Production machinery and equipment 5-12 years Leasehold improvements 5-7 years Furniture & fixtures 3-5 years Upon sale, retirement or other disposal, the related costs and accumulated depreciation of items of property, plant or equipment are removed from the related accounts and any gain or loss is recognized. When events or changes in circumstances indicate that assets may be impaired, an evaluation is performed comparing the estimated future undiscounted cash flows associated with the asset to the asset’s carrying amount. If the asset’s carrying amount exceeds the cash flows, a write-down to fair value is required. |
Debt Issuance Costs | Debt Issuance Costs The Company capitalizes debt issuance costs as incurred and amortizes such costs on a straight-line basis across the term of the debt. Debt issuance costs are fully amortized when the debt is repaid or refinanced. |
Stock Options | Stock Options The grant-date fair value of stock options and other equity-based compensation issued to employees is amortized on the straight-line basis over the vesting period of the award as compensation cost. The fair value of new option grants is estimated using the Black-Scholes option pricing model. The Black-Scholes option pricing model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option pricing models require the input of highly subjective assumptions including the expected stock price volatility, dividend yields and expected holding periods. |
Recognition of Revenues | Recognition of Revenues On June 1, 2018, Greystone adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606) any adjustments to Greystone’s consolidated financial statements for prior periods The amount of revenue recognized reflects the consideration to which Greystone expects to be entitled to receive in exchange for its products. The following steps are applied in determining the amount and timing of revenue recognition: 1. Identification of a contract with a customer is a sales arrangement involving a purchase order issued by the customer stating each party’s rights regarding the plastic pallets to be transferred. Payment terms vary by customer from net 30 days to 90 days. Discounts on sales arrangements are generally not provided. Credit worthiness is determined by Greystone based on payment experience and financial information available on the customer. 2. Identification of performance obligations in the sales arrangement which is predominantly the promise to transfer plastic pallets to Greystone’s customer. 3. Determination of the transaction price which is specified in the purchase order based on product pricing negotiated between Greystone and the customer. 4. Allocation of the transaction price to performance obligations. 5. Recognition of revenue which predominantly occurs upon completion of the performance obligation and transfer of control. Transfer of control generally occurs at the point of shipment which is Greystone’s manufacturing and warehouse locations. |
Income Taxes | Income Taxes Greystone accounts for income taxes under the liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the consolidated financial statements and tax bases of assets and liabilities and tax loss carryforwards using enacted tax rates in effect for the year in which the differences are expected to reverse. |
Earnings Per Share | Earnings Per Share Basic earnings per share is computed by dividing the earnings available to common stockholders by the weighted average number of common shares outstanding for the year. In arriving at income available to common stockholders, preferred stock dividends are deducted from net income for the year. Greystone’s Series 2003 preferred stock, which is convertible into 3,333,333 shares of common stock, was not included in the computation of diluted earnings per share for the fiscal years 2019 and 2018 as the effect would have been antidilutive. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
May 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Useful Life of Property, Plant and Equipment | Depreciation expense is computed using the straight-line method over the estimated useful lives, as follows: Plant buildings 39 years Production machinery and equipment 5-12 years Leasehold improvements 5-7 years Furniture & fixtures 3-5 years |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
May 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consists of the following as of May 31: 2019 2018 Raw materials $ 1,295,991 $ 864,339 Finished pallets 1,325,000 2,224,928 Total Inventory $ 2,620,991 $ 3,089,267 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
May 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | A summary of the property, plant and equipment for Greystone is as follows, as of May 31: 2019 2018 Production machinery and equipment $ 45,645,910 $ 35,270,326 Plant buildings and land 6,336,855 5,739,491 Leasehold improvements 979,890 534,637 Furniture and fixtures 563,074 396,882 53,525,729 41,941,336 Less: Accumulated depreciation (21,026,051 ) (16,587,460 ) Net Property, Plant and Equipment $ 32,499,678 $ 25,353,876 |
Schedule of Property, Plant and Equipment Not Been Placed Into Services | Property, plant and equipment includes items which had not been placed into service as of May 31, 2019, as follows: Production machinery and equipment $ 3,635,683 Plant buildings $ 597,364 Leasehold improvements $ 121,544 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
May 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt consists of the following as of May 31: 2019 2018 Term loan A payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.0%, maturing April 30, 2023 $ 3,234,947 $ 3,945,443 Term loan C payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.0%, maturing August 4, 2020 1,399,490 1,613,445 Term loan D payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.75%, maturing January 10, 2022 1,744,235 2,314,935 Term loan E payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.75%, maturing January 10, 2022 927,199 843,200 Term loan F payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 5.25%, maturing February 8, 2021 3,398,247 - Term loan G payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 5.25%, maturing April 30, 2024 876,934 - Revolving loan payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 5.50%, due January 31, 2021 3,205,000 1,879,000 Term loan payable by GRE to International Bank of Commerce, interest rate of 5.5%, monthly principal and interest payments of $27,688, due April 30, 2023 2,461,116 2,652,428 Note payable to Robert Rosene, 7.5% interest, due January 15, 2021 4,426,631 4,469,355 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 800,488 1,099,447 Note payable to Yorktown Management & Financial Services, LLC, 5.0% interest, due February 28, 2019, monthly principal and interest payments of $20,629 - 181,850 Other 223,177 252,493 Face value of long-term debt 22,697,464 19,251,596 Less: Debt issuance costs, net of amortization (37,686 ) (91,370 ) 22,659,778 19,160,226 Less: Current portion of long-term debt (3,030,630 ) (2,324,046 ) Long-term debt $ 19,629,148 $ 16,836,180 |
Schedule of Loan Agreement | During the years ended May 31, 2019 and 2018, Greystone and IBC entered into certain amendments to the IBC Loan Agreement providing for the following new loans: Date Term Loan Amount Maturity Purpose August 4, 2017 C $ 1,795,000 August 4, 2020 Acquisition of Equipment January 10, 2018 D $ 2,500,000 January 10, 2022 Convert Revolver to Term January 10, 2018 E $ 1,000,000 January 10, 2022 Acquisition of Equipment August 8, 2018 F $ 3,600,000 February 8, 2021 Acquisition of Equipment April 30, 2019 G $ 880,000 April 30, 2024 Acquisition of Real Estate |
Capital Leases (Tables)
Capital Leases (Tables) | 12 Months Ended |
May 31, 2019 | |
Leases [Abstract] | |
Schedule of Non-cancelable Capital Leases | Capital leases consist of the following as of May 31: 2019 2018 Non-cancelable capital leases $ 6,754,819 $ 3,893,814 Less: Current portion of capital leases (1,516,629 ) (2,160,807 ) Non-cancelable capital leases, net of current portion $ 5,238,190 $ 1,733,007 |
Schedule of Production Equipment Under Non-cancelable Capital Leases | The production equipment under the non-cancelable capital leases at May 31, 2019 and 2018 is as follows: 2019 2018 Production equipment under capital leases $ 7,861,233 $ 7,591,574 Less: Accumulated amortization (614,909 ) (974,811 ) Production equipment under capital leases, net $ 7,246,324 $ 6,616,763 |
Schedule of Future Minimum Lease Payments Under Non-cancelable Capital Leases | Future minimum lease payments under non-cancelable capital leases as of May 31, 2019, are approximately: Year ended May 31, 2020 $ 1,966,428 Year ended May 31, 2021 1,966,428 Year ended May 31, 2022 1,865,328 Year ended May 31, 2023 1,443,654 Year ended May 31, 2024 605,053 Total lease payments 7,846,891 Less: Imputed interest 1,092,072 Present value of minimum lease payments $ 6,754,819 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
May 31, 2019 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Schedule of Sale of Revenues for Customer Categories | Sales to the following categories of customers for the fiscal years 2019 and 2018, respectively, were as follows: Category 2019 2018 Major customers (end users) 86 % 78 % Distributors 14 % 22 % |
Federal Income Taxes (Tables)
Federal Income Taxes (Tables) | 12 Months Ended |
May 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Summary of Deferred Taxes | Deferred taxes as of May 31, 2019 and 2018 are as follows: 2019 2018 Deferred tax asset: Net operating loss carryforward $ 4,807,616 $ 2,015,616 Accrued expenses 88,298 101,320 Other 33,528 27,432 Total deferred tax asset 4,929,442 2,144,368 Deferred tax liability: Depreciation and amortization, tax reporting in excess of financial (2,877,573 ) (2,635,333 ) Valuation allowance (2,978,511 ) - Net deferred tax liability $ (926,642 ) $ (490,965 ) |
Summary of Net Change in Deferred Taxes | The net change in deferred taxes for the year ended May 31, 2019 and 2018 is as follows: 2019 2018 Valuation allowance $ (2,978,511 ) $ - Net operating loss carryforward 2,792,000 (87,308 ) Depreciation and amortization, tax reporting in excess of financial (242,240 ) (664,475 ) Allowance for doubtful accounts - (8,788 ) Accrued expenses (13,022 ) (11,701 ) Other 6,096 (108 ) Net change $ (435,677 ) $ (772,380 ) |
Summary of Provision for Income Taxes | The provision for income taxes at May 31, 2019 and 2018 consists of the following: 2019 2018 Current income tax – Federal and State $ - $ - Deferred income tax provision 435,677 772,380 Provision for income taxes $ 435,677 $ 772,380 |
Summary of Provision for Income Taxes for Federal Statutory Rate | Greystone’s provision for income taxes for the years ended May 31, 2019 and 2018 differs from the federal statutory rate as follows: 2019 2018 Tax provision using statutory rates 21 % 21 % State income taxes 9 9 Federal tax rate change adjustment - (2 ) Change in valuation allowance (11 ) - Expiring net operating losses - 3 VIE income passed to members (2 ) (2 ) Tax provision per financial statements 17 % 29 % |
Summary of Net Operating Loss for Federal Income Tax | A summary of Federal net operating losses (NOL) for Federal income tax purposes at May 31, 2019 is as follows: NOL Carryforward Year Expiring Year ended May 31, 2002 $ 1,950,345 2022 Year ended May 31, 2003 4,154,960 2023 Year ended May 31, 2004 1,632,774 2024 Year ended May 31, 2005 5,620,289 2025 Year ended May 31, 2006 2,622,921 2026 Year ended May 31, 2007 2,151,837 2027 Year ended May 31, 2011 746,484 2031 Year ended May 31, 2015 321,625 2035 Year ended May 31, 2016 1,060,747 2036 |
Stock Options (Tables)
Stock Options (Tables) | 12 Months Ended |
May 31, 2019 | |
Stock Options | |
Schedule of Option Activity | Outstanding options are as follows: Number Weighted Average Exercise Price Remaining Intrinsic Value Total outstanding May 31, 2017 200,000 $ 0.12 Total outstanding May 31, 2018 200,000 $ 0.12 Exercisable as of May 31, 2018 200,000 $ 0.12 Total outstanding May 31, 2019 200,000 $ 0.12 3.0 Exercisable as of May 31, 2019 200,000 $ 0.12 3.0 $ 88,000 Non-vested as of May 31, 2019 -0- |
Supplemental Information of C_2
Supplemental Information of Cash Flows (Tables) | 12 Months Ended |
May 31, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Supplemental Information of Cash Flows | Supplemental information of cash flows for the years ended May 31, 2019 and 2018: 2019 2018 Non-cash investing and financing activities: Acquisition of equipment through capital lease $ 4,667,380 $ 2,225,685 Revolver loan converted to term loan $ - $ 2,500,000 Acquisition of equipment in accounts payable $ 273,565 $ 373,214 Preferred dividend accrual $ 112,192 $ - Supplemental information: Interest paid $ 1,786,882 $ 1,210,308 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Allowance for doubtful accounts | ||
Series 2003 Preferred Stock [Member] | ||
Antidilutive securities excluded from computation of earnings per share | 3,333,333 | 3,333,333 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Useful Life of Property, Plant and Equipment (Details) | 12 Months Ended |
May 31, 2019 | |
Plant Buildings [Member] | |
Estimated useful life of property plant and equipment | 39 years |
Production Machinery and Equipment [Member] | Minimum [Member] | |
Estimated useful life of property plant and equipment | 5 years |
Production Machinery and Equipment [Member] | Maximum [Member] | |
Estimated useful life of property plant and equipment | 12 years |
Leasehold Improvements [Member] | Minimum [Member] | |
Estimated useful life of property plant and equipment | 5 years |
Leasehold Improvements [Member] | Maximum [Member] | |
Estimated useful life of property plant and equipment | 7 years |
Furniture and Fixtures [Member] | Minimum [Member] | |
Estimated useful life of property plant and equipment | 3 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Estimated useful life of property plant and equipment | 5 years |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Details) - USD ($) | May 31, 2019 | May 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,295,991 | $ 864,339 |
Finished pallets | 1,325,000 | 2,224,928 |
Total Inventory | $ 2,620,991 | $ 3,089,267 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Depreciation expense | $ 4,438,591 | $ 3,549,065 |
Plant Buildings [Member] | ||
Carrying value of assets | $ 2,896,549 | $ 3,012,421 |
Property, Plant and Equipment -
Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) | May 31, 2019 | May 31, 2018 |
Property plant and equipment, gross | $ 53,525,729 | $ 41,941,336 |
Less: Accumulated depreciation | (21,026,051) | (16,587,460) |
Net Property, Plant and Equipment | 32,499,678 | 25,353,876 |
Production Machinery and Equipment [Member] | ||
Property plant and equipment, gross | 45,645,910 | 35,270,326 |
Plant Buildings and Land [Member] | ||
Property plant and equipment, gross | 6,336,855 | 5,739,491 |
Leasehold Improvements [Member] | ||
Property plant and equipment, gross | 979,890 | 534,637 |
Furniture and Fixtures [Member] | ||
Property plant and equipment, gross | $ 563,074 | $ 396,882 |
Property, Plant and Equipment_3
Property, Plant and Equipment - Schedule of Property, Plant and Equipment Not Been Placed Into Services (Details) | May 31, 2019USD ($) |
Production Machinery and Equipment [Member] | |
Property plant and equipment not placed into services | $ 3,635,683 |
Plant Buildings [Member] | |
Property plant and equipment not placed into services | 597,364 |
Leasehold Improvements [Member] | |
Property plant and equipment not placed into services | $ 121,544 |
Long-Term Debt (Details Narrati
Long-Term Debt (Details Narrative) - USD ($) | Jun. 02, 2017 | Jan. 31, 2014 | May 31, 2019 | May 31, 2018 | Aug. 01, 2019 | Feb. 01, 2018 | Dec. 15, 2006 |
Amortization of debt issuance costs | $ 95,166 | $ 137,056 | |||||
Preferred stock amount | 5 | $ 5 | |||||
Maturities long term debt current | 3,030,630 | ||||||
Maturities long term debt year two | 13,868,421 | ||||||
Maturities long term debt year three | 2,370,964 | ||||||
Maturities long term debt year four | 2,713,978 | ||||||
Maturities long term debt year five | $ 713,471 | ||||||
First Bank [Member] | |||||||
Debt instrument principal amount | $ 1,469,713 | ||||||
Robert B. Rosene, Jr. [Member] | |||||||
Debt instrument interest rate | 7.50% | ||||||
Note payable | $ 2,066,000 | ||||||
Robert B. Rosene, Jr. [Member] | Restated Note [Member] | |||||||
Debt instrument interest rate | 7.50% | ||||||
Debt instrument principal amount | $ 4,541,690 | ||||||
Note payable | 2,066,000 | ||||||
Debt accrued interest | $ 2,475,690 | ||||||
Extended maturity date | Jan. 15, 2021 | ||||||
First Bank [Member] | |||||||
Debt instrument interest rate | 6.95% | ||||||
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 | ||||||
Capital expenditure on fixed assets | $ 1,500,000 | ||||||
Preferred stock amount | $ 500,000 | ||||||
Revolving Loan [Member] | |||||||
Debt instrument maturity date | Jan. 31, 2021 | ||||||
Term Loan A [Member] | |||||||
Note term | 7 years | ||||||
Debt monthly payment | $ 77,548 | ||||||
Term Loan C [Member] | |||||||
Note term | 7 years | ||||||
Debt monthly payment | $ 25,205 | ||||||
Term Loan D [Member] | |||||||
Note term | 4 years | ||||||
Debt monthly payment | $ 57,469 | ||||||
Term Loan E [Member] | |||||||
Note term | 4 years | ||||||
Debt monthly payment | $ 23,060 | ||||||
Term Loan F [Member] | |||||||
Note term | 5 years | ||||||
Debt monthly payment | $ 68,808 | ||||||
Term Loan G [Member] | |||||||
Note term | 15 years | ||||||
Debt monthly payment | $ 7,466 | ||||||
Revolving Loan [Member] | |||||||
Debt instrument interest rate | 5.50% | ||||||
Revolving Loan [Member] | IBC Loan Agreement [Member] | |||||||
Debt instrument principal amount | $ 4,000,000 | ||||||
Line of credit maximum borrowing capacity | 4,000,000 | ||||||
Guaranty [Member] | IBC Loan Agreement [Member] | |||||||
Borrowing combined amount | $ 6,500,000 | ||||||
Mortgage Loan [Member] | GRE and IBC [Member] | |||||||
Debt instrument interest rate | 5.50% | ||||||
Debt instrument principal amount | $ 3,412,500 | ||||||
Debt instrument maturity date | Apr. 30, 2023 | ||||||
Prime Rate [Member] | |||||||
Debt instrument interest rate | 5.50% | ||||||
Prime Rate [Member] | First Bank [Member] | Minimum [Member] | |||||||
Debt instrument interest rate | 1.45% | ||||||
Prime Rate [Member] | First Bank [Member] | Maximum [Member] | |||||||
Debt instrument interest rate | 4.95% | ||||||
Prime Rate [Member] | Revolving Loan [Member] | |||||||
Debt instrument interest rate | 0.50% | ||||||
Prime Rate [Member] | Subsequent Event [Member] | |||||||
Debt instrument interest rate | 5.25% |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) | May 31, 2019 | May 31, 2018 |
Face value of long-term debt | $ 22,697,464 | $ 19,251,596 |
Less: Debt issuance costs, net of amortization | (37,686) | (91,370) |
Long-term debt total | 22,659,778 | 19,160,226 |
Less: Current portion of long-term debt | (3,030,630) | (2,324,046) |
Long-term debt | 19,629,148 | 16,836,180 |
Term Loan A Payable to International Bank of Commerce, Prime Rate of Interest Plus 0.5% But Not Less Than 4.0%, Maturing April 30, 2023 [Member] | ||
Face value of long-term debt | 3,234,947 | 3,945,443 |
Term loan 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] | ||
Face value of long-term debt | 1,399,490 | 1,613,445 |
Term loan D payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.75%, maturing January 10, 2022 [Member] | ||
Face value of long-term debt | 1,744,235 | 2,314,935 |
Term loan E payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.75%, maturing January 10, 2022 [Member] | ||
Face value of long-term debt | 927,199 | 843,200 |
Term loan F payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 5.25%, maturing February 8, 2021 [Member] | ||
Face value of long-term debt | 3,398,247 | |
Term loan G payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 5.25%, maturing April 30, 2024 [Member] | ||
Face value of long-term debt | 876,934 | |
Revolving loan payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 5.50%, due January 31, 2021 [Member] | ||
Face value of long-term debt | 3,205,000 | 1,879,000 |
Term loan payable by GRE to International Bank of Commerce, interest rate of 5.5%, monthly principal and interest payments of $27,688, due April 30, 2023 [Member] | ||
Face value of long-term debt | 2,461,116 | 2,652,428 |
Note payable to Robert Rosene, 7.5% interest, due January 15, 2021 [Member] | ||
Face value of long-term debt | 4,426,631 | 4,469,355 |
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 [Member] | ||
Face value of long-term debt | 800,488 | 1,099,447 |
Note payable to Yorktown Management & Financial Services, LLC, 5.0% interest, due February 28, 2019, monthly principal and interest payments of $20,629 [Member] | ||
Face value of long-term debt | 181,850 | |
Other Note Payable [Member] | ||
Face value of long-term debt | $ 223,177 | $ 252,493 |
Long-Term Debt - Schedule of _2
Long-Term Debt - Schedule of Long-Term Debt (Details) (Parenthetical) - USD ($) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Term Loan A Payable to International Bank of Commerce, Prime Rate of Interest Plus 0.5% But Not Less Than 4.0%, Maturing April 30, 2023 [Member] | ||
Debt instrument interest rate | 0.50% | 0.50% |
Debt instrument maturity date | Apr. 30, 2023 | Apr. 30, 2023 |
Term Loan A Payable to International Bank of Commerce, Prime Rate of Interest Plus 0.5% But Not Less Than 4.0%, Maturing April 30, 2023 [Member] | Maximum [Member] | ||
Debt instrument interest rate | 4.00% | 4.00% |
Term loan 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 loan 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% |
Term loan D payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.75%, maturing January 10, 2022 [Member] | ||
Debt instrument interest rate | 0.50% | 0.50% |
Debt instrument maturity date | Jan. 10, 2022 | Jan. 10, 2022 |
Term loan D payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.75%, maturing January 10, 2022 [Member] | Maximum [Member] | ||
Debt instrument interest rate | 4.75% | 4.75% |
Term loan E payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.75%, maturing January 10, 2022 [Member] | ||
Debt instrument interest rate | 0.50% | 0.50% |
Debt instrument maturity date | Jan. 10, 2022 | Jan. 10, 2022 |
Term loan E payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.75%, maturing January 10, 2022 [Member] | Maximum [Member] | ||
Debt instrument interest rate | 4.75% | 4.75% |
Term loan F payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 5.25%, maturing February 8, 2021 [Member] | ||
Debt instrument interest rate | 0.50% | 0.50% |
Debt instrument maturity date | Feb. 8, 2021 | Feb. 8, 2021 |
Term loan F payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 5.25%, maturing February 8, 2021 [Member] | Maximum [Member] | ||
Debt instrument interest rate | 5.25% | 5.25% |
Term loan G payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 5.25%, maturing April 30, 2024 [Member] | ||
Debt instrument interest rate | 0.50% | 0.50% |
Debt instrument maturity date | Apr. 30, 2024 | Apr. 30, 2024 |
Term loan G payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 5.25%, maturing April 30, 2024 [Member] | Maximum [Member] | ||
Debt instrument interest rate | 5.25% | 5.25% |
Revolving loan payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 5.50%, due January 31, 2021 [Member] | ||
Debt instrument interest rate | 0.50% | 0.50% |
Debt instrument maturity date | Jan. 31, 2021 | Jan. 31, 2021 |
Revolving loan payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 5.50%, due January 31, 2021 [Member] | Maximum [Member] | ||
Debt instrument interest rate | 5.50% | 5.50% |
Term loan payable by GRE to International Bank of Commerce, interest rate of 5.5%, monthly principal and interest payments of $27,688, due April 30, 2023 [Member] | ||
Debt instrument interest rate | 5.50% | 5.50% |
Debt instrument maturity date | Apr. 30, 2023 | Apr. 30, 2023 |
Debt instrument principal and interest amount | $ 27,688 | $ 27,688 |
Note payable to Robert Rosene, 7.5% interest, due January 15, 2021 [Member] | ||
Debt instrument interest rate | 7.50% | 7.50% |
Debt instrument maturity date | Jan. 15, 2021 | Jan. 15, 2021 |
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 [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 [Member] | Maximum [Member] | ||
Debt instrument interest rate | 4.95% | 4.95% |
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 |
Long-Term Debt - Schedule of _3
Long-Term Debt - Schedule of Loan Agreement (Details) - IBC Loan Agreement [Member] - USD ($) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Term Loan C [Member] | ||
Debt issuance date | Aug. 4, 2017 | Aug. 4, 2017 |
Debt principal amount | $ 1,795,000 | $ 1,795,000 |
Debt maturity date | Aug. 4, 2020 | Aug. 4, 2020 |
Purpose of loan | Acquisition of Equipment | Acquisition of Equipment |
Term Loan D [Member] | ||
Debt issuance date | Jan. 10, 2018 | Jan. 10, 2018 |
Debt principal amount | $ 2,500,000 | $ 2,500,000 |
Debt maturity date | Jan. 10, 2022 | Jan. 10, 2022 |
Purpose of loan | Convert Revolver to Term | Convert Revolver to Term |
Term Loan E [Member] | ||
Debt issuance date | Jan. 10, 2018 | Jan. 10, 2018 |
Debt principal amount | $ 1,000,000 | $ 1,000,000 |
Debt maturity date | Jan. 10, 2022 | Jan. 10, 2022 |
Purpose of loan | Acquisition of Equipment | Acquisition of Equipment |
Term Loan F [Member] | ||
Debt issuance date | Aug. 8, 2018 | Aug. 8, 2018 |
Debt principal amount | $ 3,600,000 | $ 3,600,000 |
Debt maturity date | Feb. 8, 2021 | Feb. 8, 2021 |
Purpose of loan | Acquisition of Equipment | Acquisition of Equipment |
Term Loan G [Member] | ||
Debt issuance date | Apr. 30, 2019 | Apr. 30, 2019 |
Debt principal amount | $ 880,000 | $ 880,000 |
Debt maturity date | Apr. 30, 2024 | Apr. 30, 2024 |
Purpose of loan | Acquisition of Real Estate | Acquisition of Real Estate |
Capital Leases (Details Narrati
Capital Leases (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Value of production equipment | $ 968,168 | $ 3,000 |
Amortization | 1,093,760 | $ 594,578 |
Production Equipment [Member] | ||
Leased equipment | 5,365,889 | |
Sale and Leaseback Agreement [Member] | Yorktown Production Equipment [Member] | ||
Payments of monthly rental amount | 7,695 | |
Value of production equipment | 968,168 | |
Bargain purchase option amount | $ 10,000 | |
Lease maturity date | Dec. 27, 2023 | |
Sale and Leaseback Agreement [Member] | Yorktown Production Equipment [Member] | Initial Thirty Six Months [Member] | ||
Payments of monthly rental amount | $ 27,915 | |
Three Five-Year Lease Agreements [Member] | ||
Lease bears interest rate | 7.40% | |
Leased equipment | $ 6,900,000 | |
Lease payment per invoice rate | $ 3.32 | |
Payments of monthly rental amount | $ 45,000 |
Capital Leases - Schedule of No
Capital Leases - Schedule of Non-cancelable Capital Leases (Details) - USD ($) | May 31, 2019 | May 31, 2018 |
Leases [Abstract] | ||
Non-cancelable capital leases | $ 6,754,819 | $ 3,893,814 |
Less: Current portion of capital leases | (1,516,629) | (2,160,807) |
Non-cancelable capital leases, net of current portion | $ 5,238,190 | $ 1,733,007 |
Capital Leases - Schedule of Pr
Capital Leases - Schedule of Production Equipment Under Non-cancelable Capital Leases (Details) - USD ($) | May 31, 2019 | May 31, 2018 |
Leases [Abstract] | ||
Production equipment under capital leases | $ 7,861,233 | $ 7,591,574 |
Less: Accumulated amortization | (614,909) | (974,811) |
Production equipment under capital leases, net | $ 7,246,324 | $ 6,616,763 |
Capital Leases - Schedule of Fu
Capital Leases - Schedule of Future Minimum Lease Payments Under Non-cancelable Capital Leases (Details) | May 31, 2019USD ($) |
Leases [Abstract] | |
Year ended May 31, 2020 | $ 1,966,428 |
Year ended May 31, 2021 | 1,966,428 |
Year ended May 31, 2022 | 1,865,328 |
Year ended May 31, 2023 | 1,443,654 |
Year ended May 31, 2024 | 605,053 |
Total lease payments | 7,846,891 |
Less: Imputed interest | 1,092,072 |
Present value of minimum lease payments | $ 6,754,819 |
Revenue (Details Narrative)
Revenue (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Sales revenue | $ 3,404,334 | |
Customer advances | 3,161,118 | $ 4,595,034 |
Unrecognized deferred revenue | 2,201,067 | 3,404,334 |
Canada and Mexico [Member] | ||
Sales revenue | $ 540,969 | $ 408,499 |
Revenue - Schedule of Sale of R
Revenue - Schedule of Sale of Revenues for Customer Categories (Details) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Major Customers (End Users) [Member] | ||
Total | 86.00% | 78.00% |
Distributors [Member] | ||
Total | 14.00% | 22.00% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Rent expense | $ 48,000 | $ 48,000 |
Future minimum payments under capital lease 2020 | 1,966,428 | |
Future minimum payments under capital lease 2021 | 1,966,428 | |
Future minimum payments under capital lease 2022 | 1,865,328 | |
TriEnda Holdings, L.L.C. [Member] | ||
Purchases from related parties | 42,349 | 68,302 |
Non-Cancelable Operating Lease [Member] | ||
Future minimum payments under capital lease 2020 | 48,000 | |
Future minimum payments under capital lease 2021 | 48,000 | |
Future minimum payments under capital lease 2022 | 28,000 | |
Yorktown's Grinding and Pelletizing Equipment [Member] | ||
Payments of rental fees | 27,500 | |
Yorktown [Member] | ||
Rent expense | 1,430,000 | 1,430,000 |
Yorktown [Member] | Oklahoma [Member] | ||
Rent expense | 4,000 | |
Green Plastic Pallets [Member] | ||
Revenue from service | 225,600 | $ 421,965 |
Account receivable | $ 38,760 |
Federal Income Taxes (Details N
Federal Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Deferred tax assets and valuation allowance | $ 2,978,511 | |
Description of operating loss carryforwards | Expiring in fiscal years 2022 through fiscal year 2025 | |
Reduction in valuation allowance | $ 233,000 | |
Increase in deferred taxes | (435,677) | (772,380) |
Internal Revenue Service (IRS) [Member] | ||
NOL carryforward | 4,200,000 | |
Tax Cuts and Jobs Act [Member] | ||
Increase in deferred taxes | $ 57,039 | |
Inception Through May 31, 2005 [Member] | ||
NOL carryforward | 11,953,302 | |
Utilization of NOL's accumulated | $ 437,000 |
Federal Income Taxes - Summary
Federal Income Taxes - Summary of Deferred Taxes (Details) - USD ($) | May 31, 2019 | May 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforward | $ 4,807,616 | $ 2,015,616 |
Accrued expenses | 88,298 | 101,320 |
Other | 33,528 | 27,432 |
Total deferred tax asset | 4,929,442 | 2,144,368 |
Depreciation and amortization, tax reporting in excess of financial | (2,877,573) | (2,635,333) |
Valuation allowance | (2,978,511) | |
Net deferred tax liability | $ (926,642) | $ (490,965) |
Federal Income Taxes - Summar_2
Federal Income Taxes - Summary of Net Change in Deferred Taxes (Details) - USD ($) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Valuation allowance | $ (2,978,511) | |
Net operating loss carryforward | 2,792,000 | (87,308) |
Depreciation and amortization, tax reporting in excess of financial | (242,240) | (664,475) |
Allowance for doubtful accounts | (8,788) | |
Accrued expenses | (13,022) | (11,701) |
Other | 6,096 | (108) |
Net change | $ (435,677) | $ (772,380) |
Federal Income Taxes - Summar_3
Federal Income Taxes - Summary of Provision for Income Taxes (Details) - USD ($) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Current income tax - Federal and State | ||
Deferred income tax provision | 435,677 | 772,380 |
Provision for income taxes | $ 435,677 | $ 772,380 |
Federal Income Taxes - Summar_4
Federal Income Taxes - Summary of Provision for Income Taxes for Federal Statutory Rate (Details) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Tax provision using statutory rates | 21.00% | 21.00% |
State income taxes | 9.00% | 9.00% |
Federal tax rate change adjustment | 0.00% | (2.00%) |
Change in valuation allowance | (11.00%) | 0.00% |
Expiring net operating losses | 0.00% | 3.00% |
VIE income passed to members | (2.00%) | (2.00%) |
Tax provision per financial statements | 17.00% | 29.00% |
Federal Income Taxes - Summar_5
Federal Income Taxes - Summary of Net Operating Loss for Federal Income Tax (Details) | 12 Months Ended |
May 31, 2019USD ($) | |
Year Ended May 31, 2002 [Member] | |
NOL Carryforward | $ 1,950,345 |
Year Expiring | 2022 |
Year Ended May 31, 2003 [Member] | |
NOL Carryforward | $ 4,154,960 |
Year Expiring | 2023 |
Year Ended May 31, 2004 [Member] | |
NOL Carryforward | $ 1,632,774 |
Year Expiring | 2024 |
Year Ended May 31, 2005 [Member] | |
NOL Carryforward | $ 5,620,289 |
Year Expiring | 2025 |
Year Ended May 31, 2006 [Member] | |
NOL Carryforward | $ 2,622,921 |
Year Expiring | 2026 |
Year Ended May 31, 2007 [Member] | |
NOL Carryforward | $ 2,151,837 |
Year Expiring | 2027 |
Year Ended May 31, 2011 [Member] | |
NOL Carryforward | $ 746,484 |
Year Expiring | 2031 |
Year Ended May 31, 2015 [Member] | |
NOL Carryforward | $ 321,625 |
Year Expiring | 2035 |
Year Ended May 31, 2016 [Member] | |
NOL Carryforward | $ 1,060,747 |
Year Expiring | 2036 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2003 | May 31, 2019 | May 31, 2018 | Sep. 01, 2016 | |
Preferred stock par value | $ 0.0001 | $ 0.0001 | ||
Warren F. Kruger [Member] | ||||
Issuance of warrants to purchase shares of common stock | 250,000 | |||
Warrants exercise price per share | $ 0.01 | |||
Warrants expiration date | Jan. 10, 2027 | |||
Robert B. Rosene, Jr. [Member] | ||||
Issuance of warrants to purchase shares of common stock | 250,000 | |||
Warrants exercise price per share | $ 0.01 | |||
Warrants expiration date | Jan. 10, 2027 | |||
Convertible Preferred Stock [Member] | ||||
Number of shares issued | 50,000 | |||
Preferred stock par value | $ 0.0001 | |||
Number of shares issued, value | $ 5,000,000 | |||
Preferred stock stated value | $ 100 | |||
Preferred stock dividend rate | 3.25% | 8.75% | ||
Debt conversion price | $ 1.50 | |||
Number of common stock issued upon conversion | 3,333,333 |
Stock Options (Details Narrativ
Stock Options (Details Narrative) | 12 Months Ended |
May 31, 2019 | |
Stock Options | |
Stock option expiration year | 10 years |
Stock option annual installment percentage | 25.00% |
Stock Options - Schedule of Opt
Stock Options - Schedule of Option Activity (Details) - USD ($) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Stock Options | ||
Number of Options Outstanding, Beginning Balance | 200,000 | 200,000 |
Number of Options Outstanding, Exercised | ||
Number of Options Outstanding, Ending Balance | 200,000 | 200,000 |
Number of Options Exercisable, Ending Balance | 200,000 | 200,000 |
Number of Options Non-vested, Ending Balance | 0 | |
Weighted Average Exercise Price Outstanding, Beginning Balance | $ 0.12 | $ 0.12 |
Weighted Average Exercise Price Outstanding, Exercised | ||
Weighted Average Exercise Price Outstanding, Ending Balance | 0.12 | 0.12 |
Weighted Average Exercise Price, Exercisable | $ 0.12 | $ 0.12 |
Remaining Contractual Life (years), Outstanding | 3 years | |
Remaining Contractual Life (years), Exercisable | 3 years | |
Intrinsic Value, Options Exercisable, Ending Balance | $ 88,000 |
Supplemental Information of C_3
Supplemental Information of Cash Flows - Schedule of Supplemental Information of Cash Flows (Details) - USD ($) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | ||
Acquisition of equipment through capital lease | $ 4,667,380 | $ 2,225,685 |
Revolver loan converted to term loan | 2,500,000 | |
Acquisition of equipment in accounts payable | 273,565 | 373,214 |
Preferred dividend accrual | 112,192 | |
Interest paid | $ 1,786,882 | $ 1,210,308 |
Concentrations (Details Narrati
Concentrations (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Customer purchases amount | $ 1,587,000 | $ 1,616,000 |
Sales Revenue, Net [Member] | Three Customers [Member] | ||
Concentration risk percentage | 86.00% | 78.00% |
Variable Interest Entities (V_2
Variable Interest Entities (VIE) (Details Narrative) - USD ($) | May 31, 2019 | May 31, 2018 |
Debt [Member] | ||
Carrying value of liabilities | $ 2,461,116 | $ 2,652,428 |
Plant Buildings [Member] | ||
Carrying value of assets | $ 2,896,549 | $ 3,012,421 |
Commitments (Details Narrative)
Commitments (Details Narrative) | May 31, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Purchase obligation on acquisition of equipment | $ 835,085 |
Subsequent Event (Details Narra
Subsequent Event (Details Narrative) - USD ($) | Jul. 01, 2019 | Aug. 01, 2019 | May 31, 2019 |
Prime Rate [Member] | |||
Debt instrument interest rate | 5.50% | ||
Subsequent Event [Member] | Prime Rate [Member] | |||
Debt instrument interest rate | 5.25% | ||
Subsequent Event [Member] | IBC Loan Agreement [Member] | Term Loan H [Member] | |||
Debt original principal amount | $ 672,000 | ||
Debt instrument maturity date | Jan. 1, 2022 | ||
Subsequent Event [Member] | IBC Loan Agreement [Member] | Term Loan H [Member] | Prime Rate [Member] | |||
Debt instrument interest rate | 0.50% | ||
Subsequent Event [Member] | IBC Loan Agreement [Member] | Term Loan H [Member] | Prime Rate [Member] | Maximum [Member] | |||
Debt instrument interest rate | 5.25% |