Note 8 - Related Party Transactions

12 Months Ended

May 31, 2024

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

Note 8.   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. GSM pays weekly rental fees of $27,500 to Yorktown for grinding equipment and pelletizing equipment. Total rental fees of $1,457,200 and $1,430,000 were paid infiscal years 2024 and 2023, respectively.

Yorktown provides administrative office space for Greystone in Tulsa, Oklahoma under a six-year lease at a rental rate of $6,250 per month. Total rent expense was $73,950 and $62,400 for fiscal years 2024 and 2023, respectively.

Transactions with Greystone Real Estate, L.L.C.

GRE owns two primary manufacturing facilities occupied by Greystone and is wholly owned by a member of Greystone’s Board of Directors. During fiscal year 2024 and 2023, Greystone made total rental payments of $534,600 per year to GRE.

Effective August 1, 2022, Greystone and GRE entered into a non-cancellable ten-year lease agreement with a five-year extension for the use of these manufacturing facilities at the initial rate of $44,500 per month, increasing 5.00% per month every fifth year.

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 Family Holdings, LLC (“KFH”), which owns a majority interest in TriEnda. Greystone may purchase pallets from TriEnda for resale or sell Greystone pallets to TriEnda. During fiscal year 2024 and 2023, Greystone purchases from TriEnda totaled $7,516 and $431, respectively, and sales to TriEnda totaled $279,138 and $50,611, respectively. As of May 31, 2024 and 2023, TriEnda owed $143,290 and $152,152, respectively, to Greystone.

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 $240,294 and $657,706 in fiscal years 2024 and 2023, respectively. As of May 31, 2024 and 2023, Green owed $122,280 and $99,960, respectively, to Greystone.