Commitments

12 Months Ended

May 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments

Note 14. COMMITMENTS

At May 31, 2017, Greystone had outstanding commitments totaling $1,913,900 for the acquisition of equipment.

Greystone leases production equipment under non-cancelable capital leases with a gross carrying amount of $5,323,864 at May 31, 2017. The lease agreement includes a bargain purchase option to acquire the production equipment at the end of the lease term. Monthly lease payments, estimated at approximately $200,000 per month, are payable on a per invoice basis at the rate of $6.25 for each pallet produced by the leased production equipment and shipped to the leasing company. The lease bears an interest rate of 5%, has a three-year maturity and provides for minimum monthly lease rental payment based upon the total pallets sold in excess of a specified amount not to exceed the monthly productive capacity of the leased machines. Amortization of the carrying amount of approximately $380,000 was included in depreciation expense for the year ended May 31, 2017.

Future minimum lease payments under non-cancelable leases as of May 31, 2017, are approximately:

Fiscal year ended May 31, 2018	$	2,400,000
Fiscal year ended May 31, 2019		1,560,936
Total lease payments		3,960,936
Imputed interest		(166,893	)
Present value of lease payments	$	3,794,063