Related Party Transactions

9 Months Ended

Feb. 28, 2013

Related Party Transactions

Note 4.               Related Party Transactions

            Yorktown Management & Financial Services, LLC (“Yorktown”), an entity wholly owned by Greystone's CEO and President, owns certain equipment that Greystone uses for its pallet and resin production. Greystone pays advances to Yorktown in recognition of the amounts owed pursuant to certain agreements.  As of February 28, 2013, Greystone has a receivable from Yorktown in the amount of $2,985,051.  Mr. Kruger has agreed that, if necessary, the amounts due Greystone should be offset against certain amounts that Greystone owes him or Yorktown.  At February 28, 2013, the offset against the net advances is the combined total of (i) the accrued interest of $802,551 payable to Mr. Kruger, (ii) advances payable to Mr. Kruger of $513,180 and (iii) an account payable of $720,000 for deferred compensation payable to Mr. Kruger.

Effective February 1, 2013, the arrangement between Greystone and Yorktown whereby Yorktown provided the pelletizing equipment and received a 40% share of the gross profit from the sale of pelletized resin was replaced by an arrangement whereby Greystone will pay Yorktown a fee of $0.02 per pound for utilization of Yorktown's pelletizing equipment. Also, Greystone no longer purchases raw materials for pallet production from Yorktown and the grinding fee for utilization of Yorktown's equipment was increased to $0.05 per pound.