Document and Entity Information
Document and Entity Information (USD $)
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12 Months Ended | ||
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May 31, 2015
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Aug. 26, 2015
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Nov. 30, 2014
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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, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --05-31 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 5,386,626 | ||
Entity Common Stock, Shares Outstanding | 27,411,201 | ||
Trading Symbol | GLGI | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2015 |
Consolidated Balance Sheets
Consolidated Balance Sheets (Parenthetical)
Consolidated Balance Sheets (Parenthetical) (USD $)
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May 31, 2015
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May 31, 2014
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Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 13,260 | $ 71,462 |
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 |
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 | 27,411,201 | 26,461,201 |
Common stock shares outstanding | 27,411,201 | 26,461,201 |
Consolidated Statements of Income
Consolidated Statements of Income (USD $)
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12 Months Ended | |
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May 31, 2015
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May 31, 2014
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Income Statement [Abstract] | ||
Sales | $ 22,293,922 | $ 23,449,936 |
Cost of Sales | 18,269,192 | 18,107,627 |
Gross Profit | 4,024,730 | 5,342,309 |
General, Selling and Administrative Expenses | 2,168,762 | 2,409,115 |
Operating Income | 1,855,968 | 2,933,194 |
Other Income (Expense): | ||
Other income | 2,500 | 5,000 |
Interest expense | (818,136) | (846,568) |
Total Other Expense, net | (815,636) | (841,568) |
Income before Income Taxes | 1,040,332 | 2,091,626 |
(Provision for) Benefit from Income Taxes | (430,763) | 1,040,000 |
Net Income | 609,569 | 3,131,626 |
Income Attributable to Variable Interest Entity | (227,004) | (200,563) |
Preferred Dividends | (325,000) | (325,000) |
Net Income Attributable to Common Stockholders | $ 57,565 | $ 2,606,063 |
Income Per Share of Common Stock - | ||
Basic | $ 0.00 | $ 0.10 |
Diluted | $ 0.00 | $ 0.09 |
Weighted Average Shares of Common Stock Outstanding - | ||
Basic | 26,975,312 | 26,198,701 |
Diluted | 27,771,466 | 27,674,939 |
Consolidated Statements of Changes in Deficit
Consolidated Statements of Changes in Deficit (USD $)
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Preferred Stock [Member]
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Common Stock [Member]
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Additional Paid-in Capital [Member]
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Accumulated Deficit [Member]
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Total Greystone Stockholders' Deficit [Member]
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Variable Interest Entity [Member]
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Total
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Balance at May. 31, 2013 | $ 5 | $ 2,611 | $ 53,142,717 | $ (58,321,266) | $ (5,175,933) | $ 1,139,878 | $ (4,036,055) |
Balance, Shares at May. 31, 2013 | 50,000 | 26,111,201 | |||||
Common stock options exercised | 35 | 139,965 | 140,000 | 140,000 | |||
Common stock options exercised, Shares | 350,000 | (350,000) | |||||
Stock based compensation | 53,424 | 53,424 | 53,424 | ||||
Cash distributions | (347,318) | (347,318) | |||||
Preferred dividends | (325,000) | (325,000) | (325,000) | ||||
Net income | 2,931,063 | 2,931,063 | 200,563 | 3,131,626 | |||
Balance at May. 31, 2014 | 5 | 2,646 | 53,336,106 | (55,715,203) | (2,376,446) | 993,123 | (1,383,323) |
Balance, Shares at May. 31, 2014 | 50,000 | 26,461,201 | |||||
Common stock options exercised | 95 | 113,905 | 114,000 | 114,000 | |||
Common stock options exercised, Shares | 950,000 | (950,000) | |||||
Stock based compensation | 53,424 | 53,424 | 53,424 | ||||
Cash distributions | (204,000) | (204,000) | |||||
Preferred dividends | (325,000) | (325,000) | (325,000) | ||||
Net income | 382,565 | 382,565 | 227,004 | 609,569 | |||
Balance at May. 31, 2015 | $ 5 | $ 2,741 | $ 53,503,435 | $ (55,657,638) | $ (2,151,457) | $ 1,016,127 | $ (1,135,330) |
Balance, Shares at May. 31, 2015 | 50,000 | 27,411,201 |
Consolidated Statements of Cash Flows
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
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May 31, 2015
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||
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 manufacture 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.
Inventory
Inventory consists of finished pallets and raw materials and is stated at the lower of average cost or market 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:
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.
Other Assets
Other assets includes certain intangible costs as follows:
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 valuation 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 valuation models require the input of highly subjective assumptions including the expected stock price volatility, dividend yields and expected holding periods.
Recognition of Revenues
Greystone’s sales agreements to customers other than its primary customer generally provide for risk of loss to pass to the customers upon shipment from Greystone’s plant in Bettendorf, Iowa. Revenue is recognized for these customers at the date of shipment.
Greystone’s agreement with its major customer provides that (1) risk of loss or damages for product in transit remain with Greystone and (2) the product is subject to approval and acceptance at the buyer’s premises. Accordingly, Greystone recognizes revenue when product has been delivered to the customer’s sites and risk of loss has passed to the customer.
For sales to all customers, cost of goods sold is recognized when the related revenue is recognized.
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. For fiscal years 2015 and 2014, convertible preferred stock and stock options are not considered as their effect is antidilutive.
The following securities were not included in the computation of diluted earnings per share for the fiscal years ended May 31, 2015 and 2014 as their effect would have been antidilutive:
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” (“ASU 2014-09”) which creates a comprehensive set of guidelines for the recognition of revenue under the principle: “Recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” The requirements of ASU 2014-09 will require either retrospective application to each prior period presented or retrospective application with the cumulative effect of initially applying the standard recognized at the date of adoption. Greystone is currently evaluating the impact this ASU will have on our financial position and results of operations. On July 9, 2015, FASB voted to approve a one-year deferral of the effective date such that the effective date for Greystone’s interim and annual periods begins June 1, 2018.
On April 7, 2015, the FASB issued Accounting Standard Update 2015-03, “Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”) which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. The requirement of ASU 2015-03 is effective for fiscal years beginning after December 15, 2015. Greystone does not believe that the impact of this ASU will have a material impact on our financial position and results of operations. |
Inventory
Inventory
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May 31, 2015
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Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||
Inventory |
Inventory consists of the following as of May 31:
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Property and Equipment
Property and Equipment
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May 31, 2015
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment |
A summary of the property and equipment for Greystone is as follows, as of May 31:
Production machinery and equipment includes equipment in the amount of $157,396 that had not been placed into service as of May 31, 2015. The plant buildings and land are owned by GRE, a VIE, and have a net book value of $3,360,037 at May 31, 2015.
Depreciation expense for the years ended May 31, 2015 and 2014 is $1,398,269 and $1,274,453, respectively. |
Other Assets
Other Assets
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May 31, 2015
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Other Assets [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets |
Other assets consist of the following as of May 31:
Amortization of intangibles was $33,554 and $35,120 for 2015 and 2014, respectively. Future amortization for the next five years will be $37,380, $36,467, $35,982, $19,805 and $-0-. |
Long-Term Debt
Long-Term Debt
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May 31, 2015
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt |
Long-term debt consists of the following as of May 31:
The prime rate of interest as of May 31, 2015 was 3.25%.
Loan Agreement between Greystone and International Bank of Commerce (“IBC”)
On January 31, 2014, Greystone and GSM (the “Borrowers”) and IBC entered into a Loan Agreement (the “IBC Loan Agreement”). The IBC Loan Agreement provides 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 Revolving Loan bears interest at the New York Prime Rate plus 0.5% but not less than 4.0% and matures January 31, 2016. The 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. As of May 31, 2015, the interest rate on the Revolving Loan was 4%. 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 may be reborrowed by the Borrowers. The proceeds from the Revolving Loan will be used for general working capital purposes.
The Term Loan bears interest at 4.5% per annum and matures January 31, 2019. The Borrowers are required to make equal payments of principal and interest in an amount sufficient to amortize the principal balance of the Term Loan over five years. The proceeds from the Term Loan were primarily used to repay the Borrowers’ obligations to The F&M Bank & Trust Company in the amount of $3,992,083, to pay accrued preferred dividends of $3,469,040 and to pay $1,312,697 to Yorktown for the acquisition of equipment.
The IBC Loan Agreement required the Borrowers to pay a fee in the amount of $100,000 to IBC on January 31, 2014.
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 (A) a one-time payment of accrued preferred dividends to holders of its preferred stock in an amount not to exceed $3,470,000 within 10 days of the date of the IBC Loan Agreement, and (B) 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 as of May 31, 2015 was 0.54 to 1:00 which was less than the required minimum as discussed above. IBC has issued a waiver with respect to this occurrence of noncompliance.
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.
As discussed in Note 6, Related Party Transactions, Greystone paid a fee to Robert B. Rosene, Jr., a member of Greystone’s board of directors, in connection with procuring the loan with IBC including providing a personal guarantee.
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. The loan is secured by a mortgage on the property. In addition, the mortgaged property is cross collateralized pursuant to the IBC Loan Agreement with Greystone. The proceeds of the loan were used to pay the outstanding obligation with The F&M Bank & Trust Company in the amount of $3,197,682.
Maturities
Maturities of Greystone’s long-term debt for the five years after May 31, 2015 are $2,278,164, $4,122,957, $2,152,726, $4,016,603 and $8,561. |
Related Party Transactions
Related Party Transactions
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Related Party Transactions [Abstract] | |||
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 in the manufacture of pallets. Yorktown also owns a plastic grinding and wash line facility used to recycle plastic into usable raw material. Greystone compensates Yorktown for the use of equipment as discussed below. In addition, Yorktown provides office space for Greystone in Tulsa, Oklahoma at a monthly rental of $2,200 ($2,000 prior to April 1, 2015).
Greystone pays the labor on behalf of Yorktown’s Tulsa, Oklahoma grinding operation. These costs are invoiced to Yorktown on a monthly basis. As of May 31, 2015, Mr. Kruger and Yorktown owe Greystone $450,748 primarily from the aforementioned labor costs incurred by Greystone on behalf of Yorktown.
Rental fees. GSM pays weekly rental fees to Yorktown of $22,500 and $5,000 for grinding equipment and pelletizing equipment. Total equipment rental fees were approximately $1,430,000 in each of the fiscal years 2015 and 2014.
Acquisition of equipment. On and effective January 31, 2014, Greystone, GSM, Warren Kruger, Greystone’s President and CEO, and Yorktown entered into a Bill of Sale and Assignment (the “Bill of Sale”) providing for the acquisition of an injection molding machine, a lift crane and several injection molds by GSM from Yorktown for $2,400,000. Immediately prior to the acquisition, Yorktown owed GSM $3,750,085 and Greystone owed Mr. Kruger $2,662,782. The Bill of Sale provided for the offset of GSM’s receivable and Greystone’s payable, on a dollar-for-dollar basis, leaving a balance of $1,087,303 owed by Yorktown. The purchase price of $2,400,000 was offset by the balance of $1,087,303 owed by Yorktown resulting in a cash payment to Yorktown of $1,312,697. Greystone made payments to Yorktown of $84,983 for use of this equipment in fiscal year 2014 through the date of acquisition.
Other transactions. Effective December 15, 2005, Greystone entered into a loan agreement with Warren Kruger to convert $527,716 of advances due him into a note payable at 7.5% interest and Mr. Kruger has waived payment of interest and principal thereon until January 15, 2015. As discussed above effective January 31, 2014, Mr. Kruger applied this note and advances and accrued interest of $1,318,295 as an offset against certain balances which Yorktown owed to Greystone. Through January 31, 2014, Greystone accrued interest on advances and note payable to Mr. Kruger at the rate of 7.5% per year which totaled $93,729 for fiscal year 2014.
Transactions with TriEnda Holdings, L.L.C.
Warren F. Kruger, Greystone’s President and CEO, has a majority ownership interest in and serves as the non-executive Chairman of the Board of TriEnda Holdings, L.L.C. (“TriEnda”), a manufacturer of plastic pallets. Beginning in fiscal year 2015, Greystone blends and pelletizes plastic resin using TriEnda’s equipment and raw materials. Revenue from TriEnda totaled $220,692 in fiscal year 2015. The account receivable from TriEnda at May 31, 2015 was $22,344.
Transactions with Robert B. Rosene, Jr., Director
Effective December 15, 2005, Greystone entered into an agreement with Mr. Rosene to convert $2,066,000 of the advances into a note payable at 7.5% interest and Mr. Rosene has waived the payment of principal until January 15, 2017. Greystone has accrued interest on the loans in the amounts of $307,276 and $284,845 in fiscal years 2015 and 2014, respectively. Accrued interest due to Mr. Rosene at May 31, 2015 is $2,143,275.
In connection with services provided by Robert B. Rosene, Jr., a member of Greystone’s board of directors, in assisting Greystone in procuring its loan with International Bank of Commerce including providing a corresponding personal guarantee, Greystone’s board of directors approved the payment of a fee in fiscal year 2014 of $65,000 to Mr. Rosene.
Transactions with Larry J. LeBarre, Director
Effective January 1, 2009, Greystone entered into a lease agreement with an entity owned by Mr. LeBarre to rent certain equipment to produce mid-duty pallets with a minimum monthly commitment of $25,000. The lease was amended March 31, 2015 to extend the lease through September 30, 2015. Lease payments were $300,000 for each of fiscal years 2015 and 2014.
Transactions with Green Plastic Pallets
During fiscal year 2015, Greystone had sales totaling $333,253 to Green Plastic Pallets (“Green”). Green is an entity that is owned by James Kruger, brother to Warren Kruger, Greystone’s president and CEO. Fiscal year 2015 is the first year that Greystone had sales to Green. |
Federal Income Taxes
Federal Income Taxes
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Federal Income Taxes |
Deferred taxes as of May 31, 2015 and 2014 are as follows:
Deferred tax assets were classified in the consolidated balance sheets at May 31, as follows:
In assessing the reliability of deferred tax assets, management considers the likelihood of whether it is more likely than not the net deferred tax asset will be realized. Based on this evaluation, management has reduced the valuation allowance which allows for recognition of the tax benefits as deferred tax assets for May 31, 2015 and 2014, respectively.
The net change in deferred taxes for the year ended May 31, 2015 and 2014 is as follows:
The provision (benefit) for income taxes at May 31 consists of the following:
Greystone’s provision (benefit) for income taxes for the years ended May 31, 2015 and 2014 differs from the federal statutory rate as follows:
At May 31, 2015, Greystone had a net operating loss (NOL) for Federal income tax purposes from inception through May 31, 2005 of $17,242,600 expiring in fiscal year 2015 through fiscal year 2025 of which $2,250,000 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 $225,000 per year.
Greystone is no longer subject to income tax examinations by tax authorities for years prior to fiscal year 2006.
Greystone does not have any uncertain tax positions that could result in a material change to its financial position. |
Stockholders' Equity
Stockholders' Equity
|
12 Months Ended | ||
---|---|---|---|
May 31, 2015
|
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Equity [Abstract] | |||
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% 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. |
Stock Options
Stock Options
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 31, 2015
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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. Effective May 5, 2012, Greystone’s board of directors approved the renewal and extension of Greystone’s stock option plan through May 11, 2021 and increased the maximum number of shares of common stock for which options may be granted to 2,500,000 of which none were available for grant at May 31, 2015. Stock options generally expire in ten years from date of grant or upon termination of employment and are generally exercisable one year from date of grant in cumulative annual installments of 25%. Following is a summary of option activity for the two years ended May 31, 2015:
Share-based compensation cost was $53,424 for fiscal years 2015 and 2014, respectively. As of May 31, 2015, the unrecognized compensation expense related to non-vested share-based options was $53,424 which will be fully amortized during fiscal year 2016. |
Financial Instruments
Financial Instruments
|
12 Months Ended | ||
---|---|---|---|
May 31, 2015
|
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Financial Instruments, Owned, at Fair Value [Abstract] | |||
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, 2015 and 2014, the carrying amounts reported in the balance sheet approximate fair value. |
Supplemental Information of Cash Flows
Supplemental Information of Cash Flows
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 31, 2015
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Supplemental Cash Flow Information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Information of Cash Flows |
Supplemental information of cash flows for the years ended May 31:
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Concentrations
Concentrations
|
12 Months Ended | ||
---|---|---|---|
May 31, 2015
|
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Risks and Uncertainties [Abstract] | |||
Concentrations |
For the fiscal years ended May 31, 2015 and 2014, one customer accounted for approximately 51% and 56% 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 Greystone’s major customer which were approximately $1,582,000 and $1,499,000 in fiscal years 2015 and 2014, respectively. |
Variable Interest Entities (VIE)
Variable Interest Entities (VIE)
|
12 Months Ended | ||
---|---|---|---|
May 31, 2015
|
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Variable Interest Entity, Measure of Activity [Abstract] | |||
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 one of the buildings that GSM occupies at 2600 Shoreline Drive, Bettendorf, Iowa. In fiscal year 2012, GRE purchased the second building occupied by Greystone, 2601 Shoreline Drive, Bettendorf, Iowa, in a sale and leaseback transaction with Greystone.
The buildings, having a carrying value of $3,360,037 and $3,475,909 at May 31, 2015 and 2014, respectively, serve as collateral for GRE’s debt. The debt had a carrying value of $3,207,553 and $3,371,660 at May 31, 2015 and 2014, respectively. |
Commitments
Commitments
|
12 Months Ended | ||
---|---|---|---|
May 31, 2015
|
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Commitments and Contingencies Disclosure [Abstract] | |||
Commitments |
At May 31, 2015, Greystone had commitments totaling $104,000 for the acquisition of equipment. |
Summary of Significant Accounting Policies (Policies)
Summary of Significant Accounting Policies (Policies)
|
12 Months Ended | |||||||||||||||||||||||||||
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May 31, 2015
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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 manufacture and marketing of plastic pallets and pelletized recycled plastic resin. |
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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. |
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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. |
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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. |
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Inventory |
Inventory
Inventory consists of finished pallets and raw materials and is stated at the lower of average cost or market value. |
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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:
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. |
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Other Assets |
Other Assets
Other assets includes certain intangible costs as follows:
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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 valuation 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 valuation models require the input of highly subjective assumptions including the expected stock price volatility, dividend yields and expected holding periods. |
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Recognition of Revenues |
Recognition of Revenues
Greystone’s sales agreements to customers other than its primary customer generally provide for risk of loss to pass to the customers upon shipment from Greystone’s plant in Bettendorf, Iowa. Revenue is recognized for these customers at the date of shipment.
Greystone’s agreement with its major customer provides that (1) risk of loss or damages for product in transit remain with Greystone and (2) the product is subject to approval and acceptance at the buyer’s premises. Accordingly, Greystone recognizes revenue when product has been delivered to the customer’s sites and risk of loss has passed to the customer.
For sales to all customers, cost of goods sold is recognized when the related revenue is recognized. |
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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. |
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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. For fiscal years 2015 and 2014, convertible preferred stock and stock options are not considered as their effect is antidilutive.
The following securities were not included in the computation of diluted earnings per share for the fiscal years ended May 31, 2015 and 2014 as their effect would have been antidilutive:
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Recent Accounting Pronouncement |
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” (“ASU 2014-09”) which creates a comprehensive set of guidelines for the recognition of revenue under the principle: “Recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” The requirements of ASU 2014-09 will require either retrospective application to each prior period presented or retrospective application with the cumulative effect of initially applying the standard recognized at the date of adoption. Greystone is currently evaluating the impact this ASU will have on our financial position and results of operations. On July 9, 2015, FASB voted to approve a one-year deferral of the effective date such that the effective date for Greystone’s interim and annual periods begins June 1, 2018.
On April 7, 2015, the FASB issued Accounting Standard Update 2015-03, “Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”) which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. The requirement of ASU 2015-03 is effective for fiscal years beginning after December 15, 2015. Greystone does not believe that the impact of this ASU will have a material impact on our financial position and results of operations. |
Summary of Significant Accounting Policies (Tables)
Summary of Significant Accounting Policies (Tables)
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12 Months Ended | |||||||||||||||||||||||||||
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May 31, 2015
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||
Schedule of Useful Life of 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:
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Schedule of Antidilutive Securities |
The following securities were not included in the computation of diluted earnings per share for the fiscal years ended May 31, 2015 and 2014 as their effect would have been antidilutive:
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Inventory (Tables)
Inventory (Tables)
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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May 31, 2015
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Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory |
Inventory consists of the following as of May 31:
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Property and Equipment (Tables)
Property and Equipment (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 31, 2015
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property and Equipment |
A summary of the property and equipment for Greystone is as follows, as of May 31:
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Other Assets (Tables)
Other Assets (Tables)
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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May 31, 2015
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Other Assets [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Assets |
Other assets consist of the following as of May 31:
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Long-Term Debt (Tables)
Long-Term Debt (Tables)
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 31, 2015
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt |
Long-term debt consists of the following as of May 31:
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Federal Income Taxes (Tables)
Federal Income Taxes (Tables)
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 31, 2015
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Deferred Taxes |
Deferred taxes as of May 31, 2015 and 2014 are as follows:
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Summary of Deferred Tax Assets Classified |
Deferred tax assets were classified in the consolidated balance sheets at May 31, as follows:
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Summary of Net Change in Deferred Taxes |
The net change in deferred taxes for the year ended May 31, 2015 and 2014 is as follows:
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Summary of Provision (Benefit) for Income Taxes |
The provision (benefit) for income taxes at May 31 consists of the following:
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Summary of Provision (Benefit) for Income Taxes for Federal Statutory Rate |
Greystone’s provision (benefit) for income taxes for the years ended May 31, 2015 and 2014 differs from the federal statutory rate as follows:
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Summary of Net Operating Loss for Federal Income Tax |
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Stock Options (Tables)
Stock Options (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 31, 2015
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Option Activity |
Following is a summary of option activity for the two years ended May 31, 2015:
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Supplemental Information of Cash Flows (Tables)
Supplemental Information of Cash Flows (Tables)
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 31, 2015
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Supplemental Cash Flow Information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Supplemental Information of Cash Flows |
Supplemental information of cash flows for the years ended May 31:
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Summary of Significant Accounting Policies (Details Narrative)
Summary of Significant Accounting Policies (Details Narrative)
|
12 Months Ended |
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May 31, 2015
|
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Debt issue costs amortized over term of underlying note payable | 5 years |
Patents [Member]
|
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Estimated life | 15 years |
Summary of Significant Accounting Policies - Schedule of Useful Life of Property Plant and Equipment (Details)
Summary of Significant Accounting Policies - Schedule of Useful Life of Property Plant and Equipment (Details)
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12 Months Ended |
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May 31, 2015
|
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Plant Buildings [Member]
|
|
Estimated useful lives | 39 years |
Production Machinery and Equipment [Member] | Minimum [Member]
|
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Estimated useful lives | 5 years |
Production Machinery and Equipment [Member] | Maximum [Member]
|
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Estimated useful lives | 10 years |
Leasehold Improvements [Member] | Minimum [Member]
|
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Estimated useful lives | 5 years |
Leasehold Improvements [Member] | Maximum [Member]
|
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Estimated useful lives | 7 years |
Furniture & Fixtures [Member] | Minimum [Member]
|
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Estimated useful lives | 3 years |
Furniture & Fixtures [Member] | Maximum [Member]
|
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Estimated useful lives | 5 years |
Summary of Significant Accounting Policies - Schedule of Antidilutive Securities (Details)
Summary of Significant Accounting Policies - Schedule of Antidilutive Securities (Details) (Convertible Preferred Stock [Member])
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12 Months Ended | |
---|---|---|
May 31, 2015
|
May 31, 2014
|
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Convertible Preferred Stock [Member]
|
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Antidilutive Securities Excluded from Computation of Earnings Per Share | 3,333,333 | 3,333,333 |
Inventory - Schedule of Inventory (Details)
Inventory - Schedule of Inventory (Details) (USD $)
|
May 31, 2015
|
May 31, 2014
|
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Inventory Disclosure [Abstract] | ||
Raw materials | $ 665,702 | $ 1,043,411 |
Finished pallets | 763,642 | 572,754 |
Total Inventory | $ 1,429,344 | $ 1,616,165 |
Property and Equipment (Details Narrative)
Property and Equipment (Details Narrative) (USD $)
|
12 Months Ended | |
---|---|---|
May 31, 2015
|
May 31, 2014
|
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Property, Plant and Equipment [Abstract] | ||
Production machinery and equipment | $ 157,396 | |
Plant buildings and land net book value | 3,360,037 | |
Depreciation expense | $ 1,398,269 | $ 1,274,453 |
Property and Equipment - Schedule of Property and Equipment (Details)
Property and Equipment - Schedule of Property and Equipment (Details) (USD $)
|
May 31, 2015
|
May 31, 2014
|
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Property, Plant and Equipment [Abstract] | ||
Production machinery and equipment | $ 13,120,285 | $ 12,826,529 |
Plant buildings and land | 4,663,339 | 4,663,339 |
Leasehold improvements | 198,568 | 203,034 |
Furniture and fixtures | 90,280 | 210,196 |
Property and Equipment gross | 18,072,472 | 17,903,098 |
Less: Accumulated depreciation | (9,563,157) | (9,126,961) |
Net Property and Equipment | $ 8,509,315 | $ 8,776,137 |
Other Assets (Details Narrative)
Other Assets (Details Narrative) (USD $)
|
12 Months Ended | |
---|---|---|
May 31, 2015
|
May 31, 2014
|
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Other Assets [Abstract] | ||
Amortization of intangibles | $ 33,554 | $ 35,120 |
Future amortization year one | 37,380 | |
Future amortization year two | 36,467 | |
Future amortization year three | 35,982 | |
Future amortization year four | 19,805 | |
Future amortization year five | $ 0 |
Other Assets - Schedule of Other Assets (Details)
Other Assets - Schedule of Other Assets (Details) (USD $)
|
May 31, 2015
|
May 31, 2014
|
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Other Assets [Abstract] | ||
Patents | $ 190,739 | $ 190,739 |
Debt issue costs | 129,722 | 129,722 |
Accumulated amortization | (190,827) | (157,273) |
Total Other Assets | $ 129,634 | $ 163,188 |
Long-Term Debt (Details Narrative)
Long-Term Debt (Details Narrative) (USD $)
|
12 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 0 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
May 31, 2015
|
May 31, 2014
|
Jan. 31, 2014
Yorktown [Member]
|
Jan. 31, 2014
Term Loan [Member]
F&M Bank & Trust [Member]
|
Jan. 31, 2014
Greystone and GSM [Member]
|
May 31, 2015
Greystone and GSM [Member]
|
Jan. 31, 2014
Greystone and GSM [Member]
Minimum [Member]
|
Jan. 31, 2014
Greystone and GSM [Member]
Maximum [Member]
|
Jan. 31, 2014
Greystone and GSM [Member]
Revolving Loan [Member]
|
Jan. 31, 2014
Greystone and GSM [Member]
Term Loan [Member]
|
Jan. 31, 2014
GRE And F&M Bank & Trust [Member]
Mortgage Loan [Member]
|
Jan. 31, 2014
IBC Loan Agreement [Member]
|
Jan. 31, 2014
IBC Loan Agreement [Member]
Guaranty [Member]
|
Jan. 31, 2014
GRE And IBC [Member]
Mortgage Loan [Member]
|
May 31, 2015
Prime Rate [Member]
|
|
Debt instrument interest rate | 4.00% | 0.50% | 4.00% | 4.50% | 4.50% | 3.25% | |||||||||
Debt instrument principal amount | $ 2,500,000 | $ 9,200,000 | $ 3,412,500 | ||||||||||||
Borrowed loans | 2,500,000 | ||||||||||||||
Debt instrument maturity date | Jan. 31, 2016 | Jan. 31, 2019 | Jan. 31, 2019 | ||||||||||||
Payments on loan | 3,992,083 | 3,197,682 | |||||||||||||
Pay accrued preferred dividends | (325,000) | (325,000) | 3,469,040 | ||||||||||||
Pay to acquisition equipment | 1,312,697 | ||||||||||||||
Borrowers to pay a fee | 100,000 | ||||||||||||||
Borrowers maintain coverage ratio description | 0.54 to 1:00 which was less than the required minimum | 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 | 1,000,000 | ||||||||||||||
Preferred stock amount | 5 | 5 | 500,000 | ||||||||||||
Borrowings combined amount | 9,200,000 | ||||||||||||||
Maturities long term debt current | 2,278,164 | ||||||||||||||
Maturities long term debt year two | 4,122,957 | ||||||||||||||
Maturities long term debt year three | 2,152,726 | ||||||||||||||
Maturities long term debt year four | 4,016,603 | ||||||||||||||
Maturities long term debt year five | $ 8,561 |
Long-Term Debt - Schedule of Debt (Details)
Long-Term Debt - Schedule of Debt (Details) (USD $)
|
May 31, 2015
|
May 31, 2014
|
---|---|---|
Total Notes Payable | $ 12,579,011 | $ 14,504,121 |
Less: Current portion | (2,278,164) | (3,979,376) |
Long-term Debt | 10,300,847 | 10,524,745 |
Notes Payable One [Member]
|
||
Total Notes Payable | 6,945,884 | 8,647,777 |
Notes Payable Two [Member]
|
||
Total Notes Payable | 300,000 | 385,000 |
Notes Payable Three [Member]
|
||
Total Notes Payable | 3,207,553 | 3,371,660 |
Notes Payable Four [Member]
|
||
Total Notes Payable | 2,066,000 | 2,066,000 |
Other Notes Payable [Member]
|
||
Total Notes Payable | $ 59,574 | $ 33,684 |
Long-Term Debt - Schedule of Debt (Details) (Parenthetical)
Long-Term Debt - Schedule of Debt (Details) (Parenthetical) (USD $)
|
12 Months Ended | |
---|---|---|
May 31, 2015
|
May 31, 2014
|
|
Notes Payable One [Member]
|
||
Debt instrument interest rate | 4.50% | 4.50% |
Debt instrument maturity date | Jan. 31, 2019 | Jan. 31, 2019 |
Debt instrument principal amount | $ 171,760 | $ 171,760 |
Notes Payable Two [Member]
|
||
Debt instrument maturity date | Jan. 31, 2016 | Jan. 31, 2016 |
Notes Payable Two [Member] | Minimum [Member]
|
||
Debt instrument interest rate | 0.50% | 0.50% |
Notes Payable Two [Member] | Maximum [Member]
|
||
Debt instrument interest rate | 4.00% | 4.00% |
Notes Payable Three [Member]
|
||
Debt instrument interest rate | 4.50% | 4.50% |
Debt instrument maturity date | Jan. 31, 2019 | Jan. 31, 2019 |
Debt instrument principal amount | $ 26,215 | $ 26,215 |
Notes Payable Four [Member]
|
||
Debt instrument interest rate | 7.50% | 7.50% |
Debt instrument maturity date | Jan. 15, 2017 | Jan. 15, 2017 |
Related Party Transactions (Details Narrative)
Related Party Transactions (Details Narrative) (USD $)
|
12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
May 31, 2015
|
Jan. 31, 2014
Mr Kruger [Member]
|
Dec. 15, 2005
Mr. Rosene [Member]
|
May 31, 2015
Mr. Rosene [Member]
|
May 31, 2014
Mr. Rosene [Member]
|
Jan. 02, 2009
Mr LeBarre [Member]
|
May 31, 2015
Mr LeBarre [Member]
|
May 31, 2014
Mr LeBarre [Member]
|
Apr. 02, 2015
Oklahoma [Member]
|
May 31, 2015
Oklahoma [Member]
|
Jan. 31, 2014
Yorktown [Member]
|
May 31, 2015
Yorktown [Member]
|
May 31, 2014
Yorktown [Member]
|
May 31, 2015
Yorktown's Pelletizing Equipment [Member]
|
May 31, 2015
Yorktown's Grinding Equipment [Member]
|
May 31, 2014
Yorktown's Grinding Equipment [Member]
|
Jan. 31, 2014
Realted Party Other Transactions [Member]
Mr Kruger [Member]
|
Dec. 15, 2005
Realted Party Other Transactions [Member]
Mr Kruger [Member]
|
May 31, 2014
Realted Party Other Transactions [Member]
Mr Kruger [Member]
|
May 31, 2015
Trienda Holdings, LLC [Member]
|
May 31, 2015
Green Plastic Pallets [Member]
|
|
Operating Lease rental fees | $ 2,000 | $ 2,200 | $ 84,983 | $ 1,430,000 | $ 1,430,000 | ||||||||||||||||
Payments of rental fees | 300,000 | 300,000 | 22,500 | 5,000 | |||||||||||||||||
Labor costs | 450,748 | ||||||||||||||||||||
Payment to acquire injection molding machine | 104,000 | 2,400,000 | |||||||||||||||||||
Due to related parties amount | 2,662,782 | ||||||||||||||||||||
Account receivable | 3,750,085 | 22,344 | |||||||||||||||||||
Payment of cash | 1,312,697 | ||||||||||||||||||||
Notes payable to related parties | 2,066,000 | 527,716 | |||||||||||||||||||
Debt instruments interest rate | 7.50% | 7.50% | 7.50% | ||||||||||||||||||
Debt instrument maturity date | Jan. 15, 2017 | Jan. 15, 2015 | |||||||||||||||||||
Note and advances and accrued interest | 307,276 | 284,845 | 1,318,295 | 93,729 | |||||||||||||||||
Revenue from related parties | 220,692 | ||||||||||||||||||||
Interest payable | 2,143,275 | ||||||||||||||||||||
Payment of fee | 65,000 | ||||||||||||||||||||
Purchase commitments amount | 25,000 | ||||||||||||||||||||
Lease maturity descriptions | lease was amended March 31, 2015 to extend the lease through September 30, 2015 | ||||||||||||||||||||
Sales | $ 333,253 |
Federal Income Taxes (Details Narrative)
Federal Income Taxes (Details Narrative) (USD $)
|
12 Months Ended |
---|---|
May 31, 2015
|
|
Description of operating loss carryforwards | expiring in fiscal year 2015 through fiscal year 2025 |
Internal Revenue Service (IRS) [Member]
|
|
NOL Carryforward | $ 2,250,000 |
Cumulative Through May 31, 2005 [Member]
|
|
NOL Carryforward | 2,250,000 |
Utilization of NOL's accumulated | $ 225,000 |
Federal Income Taxes - Summary of Deferred Taxes (Details)
Federal Income Taxes - Summary of Deferred Taxes (Details) (USD $)
|
May 31, 2015
|
May 31, 2014
|
---|---|---|
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforward | $ 1,892,673 | $ 1,936,834 |
Depreciation and amortization, financial reporting in excess of tax | 219,838 | |
Stock compensation costs | 21,632 | 36,328 |
Allowance for doubtful accounts | 4,508 | 17,000 |
Other | 13,429 | |
Total deferred tax asset | 1,932,242 | 2,210,000 |
Depreciation and amortization, tax reporting in excess of financial | (153,005) | |
Net deferred tax asset | $ 1,779,237 | $ 2,210,000 |
Federal Income Taxes - Summary of Deferred Tax Assets Classified (Details)
Federal Income Taxes - Summary of Deferred Tax Assets Classified (Details) (USD $)
|
May 31, 2015
|
May 31, 2014
|
---|---|---|
Income Tax Disclosure [Abstract] | ||
Deferred tax assets - current | $ 1,222,110 | $ 1,077,000 |
Deferred tax assets - non-current | 557,127 | 1,133,000 |
Deferred tax assets - total | $ 1,779,237 | $ 2,210,000 |
Federal Income Taxes - Summary of Net Change in Deferred Taxes (Details)
Federal Income Taxes - Summary of Net Change in Deferred Taxes (Details) (USD $)
|
12 Months Ended | |
---|---|---|
May 31, 2015
|
May 31, 2014
|
|
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforward | $ (44,121) | $ (28,536) |
Depreciation and amortization, financial reporting in excess of tax | (372,843) | (223,339) |
Stock compensation costs | (14,696) | 18,164 |
Deferred compensation accrual | (244,800) | |
Allowance for doubtful accounts | (12,532) | (17,000) |
Valuation allowance | 1,546,511 | |
Other | 13,429 | |
Total | $ (430,763) | $ 1,051,000 |
Federal Income Taxes - Summary of Provision (Benefit) for Income Taxes (Details)
Federal Income Taxes - Summary of Provision (Benefit) for Income Taxes (Details) (USD $)
|
12 Months Ended | |
---|---|---|
May 31, 2015
|
May 31, 2014
|
|
Income Tax Disclosure [Abstract] | ||
Current income tax - Federal and State | $ 11,000 | |
Deferred income tax provision (benefit) | 430,763 | (1,051,000) |
Provision for (benefit from) income taxes | $ 430,763 | $ (1,040,000) |
Federal Income Taxes - Summary of Provision (Benefit) for Income Taxes for Federal Statutory Rate (Details)
Federal Income Taxes - Summary of Provision (Benefit) for Income Taxes for Federal Statutory Rate (Details)
|
12 Months Ended | |
---|---|---|
May 31, 2015
|
May 31, 2014
|
|
Income Tax Disclosure [Abstract] | ||
Tax provision using statutory rates | 34.00% | 34.00% |
Net operating loss expiration | 7.00% | 0.00% |
Net change in valuation allowance | 0.00% | (75.00%) |
Other | 1.00% | (9.00%) |
Tax provision (benefit) per financial statements | 42.00% | (50.00%) |
Federal Income Taxes - Summary of Net Operating Loss for Federal Income Tax (Details)
Federal Income Taxes - Summary of Net Operating Loss for Federal Income Tax (Details) (USD $)
|
12 Months Ended |
---|---|
May 31, 2015
|
|
Cumulative Through May 31, 2005 [Member]
|
|
NOL Carryforward | $ 2,250,000 |
Cumulative Through May 31, 2005 [Member] | Minimum [Member]
|
|
Year Expiring | 2016 |
Cumulative Through May 31, 2005 [Member] | Maximum [Member]
|
|
Year Expiring | 2025 |
Year Ended May 31, 2006 [Member]
|
|
NOL Carryforward | 237,364 |
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 | $ 266,095 |
Year Expiring | 2035 |
Stockholders' Equity (Details Narrative)
Stockholders' Equity (Details Narrative) (USD $)
|
1 Months Ended | ||
---|---|---|---|
May 31, 2015
|
May 31, 2014
|
Sep. 30, 2003
Convertible Preferred Stock Series 2003 [Member]
|
|
Preferred stock, shares issued | 50,000 | 50,000 | 50,000 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Convertible preferred stock purchase price | $ 5,000,000 | ||
Preferred stock value | $ 5 | $ 5 | $ 100 |
Percentage of dividend equal to prime rate of interest | 3.25% | ||
Preferred stock conversion price per share | $ 1.50 | ||
Preferred stock converted into number of common stock | 3,333,333 |
Stock Options (Details Narrative)
Stock Options (Details Narrative) (USD $)
|
12 Months Ended | |
---|---|---|
May 31, 2015
|
May 31, 2014
|
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Stock options number of shares granted | 2,500,000 | |
Stock option expiration year | 10 years | |
Stock option annual installment percentage | 25.00% | |
Share-based compensation expense | $ 53,424 | $ 53,424 |
Unrecognized compensation expense | $ 53,424 |
Stock Options - Summary of Option Activity (Details)
Supplemental Information of Cash Flows - Summary of Supplemental Information of Cash Flows (Details)
Supplemental Information of Cash Flows - Summary of Supplemental Information of Cash Flows (Details) (USD $)
|
12 Months Ended | |
---|---|---|
May 31, 2015
|
May 31, 2014
|
|
Supplemental Cash Flow Information [Abstract] | ||
Acquisition of equipment through capital lease | $ 64,497 | |
Acquisition of equipment in exchange for net related party receivable | 75,000 | 1,087,302 |
Reduction in net carrying value of equipment resulting from capital lease termination | 212,311 | |
Settlement of related party note payable in acquisition of equipment | ||
Preferred dividend accrual | 26,712 | 27,603 |
Interest paid | 511,496 | 567,507 |
Taxes paid | $ 26,045 |
Concentrations (Details Narrative)
Concentrations (Details Narrative) (USD $)
|
12 Months Ended | |
---|---|---|
May 31, 2015
|
May 31, 2014
|
|
Purchases from customers | $ 1,582,000 | $ 1,499,000 |
Sales Revenue, Net [Member] | One Customer [Member]
|
||
Concentration risk percentage | 51.00% | 56.00% |
Variable Interest Entities (VIE) (Details Narrative)
Variable Interest Entities (VIE) (Details Narrative) (USD $)
|
May 31, 2015
|
May 31, 2014
|
---|---|---|
Debt [Member]
|
||
Carrying value of liabilities | $ 3,207,553 | $ 3,371,660 |
Plant Buildings [Member]
|
||
Carrying value of assets | $ 3,360,037 | $ 3,475,909 |
Commitments (Details Narrative)
Commitments (Details Narrative) (USD $)
|
12 Months Ended |
---|---|
May 31, 2015
|
|
Commitments and Contingencies Disclosure [Abstract] | |
Commitments for acquisition of equipment | $ 104,000 |