10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 29, 2020

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ____________

Commission file number 000-26331

GREYSTONE LOGISTICS, INC.

(Exact name of registrant as specified in its charter)

Oklahoma	75-2954680
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1613 East 15th Street, Tulsa, Oklahoma	74120
(Address of principal executive offices)	(Zip Code)

(918) 583-7441

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [  ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to post and submit such files).

Yes [X] No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	[  ]	Accelerated filer	[  ]
Non-accelerated filer	[X]	Smaller reporting company	[X]
		Emerging growth company	[  ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

Indicate by checkmark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act). Yes [  ] No [X]

Applicable only to corporate issuers:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: April 3, 2020 - 28,361,201

GREYSTONE LOGISTICS, INC.

FORM 10-Q

For the Period Ended February 29, 2020

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets (Unaudited) As of February 29, 2020 and May 31, 2019	1
	Consolidated Statements of Income (Unaudited) For the Nine Months Ended February 29(28), 2020 and 2019	2
	Consolidated Statements of Income (Unaudited) For the Three Months Ended February 29(28), 2020 and 2019	3
	Consolidated Statements of Changes in Equity (Unaudited) For the Nine Months Ended February 29(28), 2020 and 2019	4
	Consolidated Statements of Cash Flows (Unaudited) For the Nine Months Ended February 29(28), 2020 and 2019	5
	Notes to Consolidated Financial Statements (Unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22
Item 4.	Controls and Procedures	22
PART II. OTHER INFORMATION		22
Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 3.	Defaults Upon Senior Securities	22
Item 4.	Mine Safety Disclosures	22
Item 5.	Other Information	23
Item 6.	Exhibits	23
SIGNATURES		24

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

Greystone Logistics, Inc. and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

	February 29, 2020			May 31, 2019
Assets
Current Assets:
Cash	$	1,156,900		$	1,255,408
Accounts receivable -
Trade		5,873,647			6,320,875
Related parties		129,334			50,320
Inventory		3,876,099			2,620,991
Prepaid expenses		29,693			239,146
Total Current Assets		11,065,673			10,486,740
Property, Plant and Equipment, net		32,905,722			32,680,472
Total Assets	$	43,971,395		$	43,167,212
Liabilities and Equity
Current Liabilities:
Current portion of long-term debt	$	3,525,314		$	3,030,630
Current portion of financing leases		2,146,923			1,516,629
Current portion of operating leases		73,078			58,236
Accounts payable and accrued liabilities		5,061,708			6,520,721
Deferred revenue		5,940,593			2,201,067
Preferred dividends payable		99,726			112,192
Total Current Liabilities		16,847,342			13,439,475
Long-Term Debt, net of current portion and debt issue costs		15,097,717			19,629,148
Financing Leases, net of current portion		3,775,920			5,238,190
Operating Leases, net of current portion		126,575			122,558
Deferred Tax Liability		1,733,642			926,642
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		(48,562,194	)		(51,108,677	)
Total Greystone Stockholders’ Equity		5,231,411			2,684,928
Non-controlling interest		1,158,788			1,126,271
Total Equity		6,390,199			3,811,199
Total Liabilities and Equity	$	43,971,395		$	43,167,212

The accompanying notes are an integral part of these consolidated financial statements.

1

Greystone Logistics, Inc.

Consolidated Statements of Income

For the Nine Months Ended February 29(28),

(Unaudited)

	2020			2019
Sales	$	57,906,777		$	50,163,707
Cost of Sales		49,279,904			44,257,438
Gross Profit		8,626,873			5,906,269
Selling, General and Administrative Expenses		3,438,424			2,752,029
Operating Income		5,188,449			3,154,240
Other Income (Expense):
Other income		9,304			7,728
Interest expense		(1,333,827	)		(1,348,285	)
Income before Income Taxes		3,863,926			1,813,683
Provision for Income Taxes		807,000			520,400
Net Income		3,056,926			1,293,283
Income Attributable to Non-controlling Interest		(195,717	)		(187,620	)
Preferred Dividends		(314,726	)		(316,264	)
Net Income Attributable to Common Stockholders	$	2,546,483		$	789,399
Income Per Share of Common Stock -
Basic and Diluted	$	0.09		$	0.03
Weighted Average Shares of Common Stock Outstanding -
Basic		28,361,201			28,361,201
Diluted		29,003,201			29,009,415

The accompanying notes are an integral part of these consolidated financial statements.

2

Greystone Logistics, Inc.

Consolidated Statements of Income

For the Three Months Ended February 29(28),

(Unaudited)

	2020			2019
Sales	$	19,738,806		$	17,224,467
Cost of Sales		15,622,931			15,455,920
Gross Profit		4,115,875			1,768,547
Selling, General and Administrative Expenses		1,248,196			959,288
Operating Income		2,867,679			809,259
Other Income (Expense):
Other income		4,391			2,438
Interest expense		(420,128	)		(499,967	)
Income before Income Taxes		2,451,942			311,730
Provision for Income Taxes		487,000			80,300
Net Income		1,964,942			231,430
Income Attributable to Non-controlling Interest		(65,411	)		(64,093	)
Preferred Dividends		(99,726	)		(108,219	)
Net Income Attributable to Common Stockholders	$	1,799,805		$	59,118
Income Per Share of Common Stock -
Basic and Diluted	$	0.06		$	0.00
Weighted Average Shares of Common Stock Outstanding -
Basic		28,361,201			28,361,201
Diluted		28,999,499			29,012,048

The accompanying notes are an integral part of these consolidated financial statements.

3

Greystone Logistics, Inc. and Subsidiaries

Consolidated Statements of Changes in Equity

For the Nine Months Ended February 29(28), 2020 and 2019

(Unaudited)

	Preferred Stock				Common Stock				Additional Paid-in		Accumulated			Total Greystone Stockholders’			Non-controlling			Total
	Shares		Amount		Shares		Amount		Capital		Deficit			Equity			Interest			Equity
Balances, May 31, 2019		50,000	$	5		28,361,201	$	2,836	$	53,790,764	$	(51,108,677	)	$	2,684,928		$	1,126,271		$	3,811,199
Cash distributions		-		-		-		-		-		-			-			(52,200	)		(52,200	)
Preferred dividends, $2.25/share		-		-		-		-		-		(112,363	)		(112,363	)		-			(112,363	)
Net income		-		-		-		-		-		554,613			554,613			64,686			619,299
Balances, August 31, 2019		50,000		5		28,361,201		2,836		53,790,764		(50,666,427	)		3,127,178			1,138,757			4,265,935
Cash distributions		-		-		-		-		-		-			-			(69,600	)		(69,600	)
Preferred dividends, $2.05/share		-		-		-		-		-		(102,637	)		(102,637	)		-			(102,637	)
Net income		-		-		-		-		-		407,065			407,065			65,620			472,685
Balances, November 30, 2019		50,000		5		28,361,201		2,836		53,790,764		(50,361,999	)		3,431,606			1,134,777			4,566,383
Cash distributions		-		-		-		-		-		-			-			(41,400	)		(41,400	)
Preferred dividends, $2.00/share		-		-		-		-		-		(99,726	)		(99,726	)		-			(99,726	)
Net income		-		-		-		-		-		1,899,531			1,899,531			65,411			1,964,942
Balances, February 29, 2020		50,000	$	5		28,361,201	$	2,836	$	53,790,764	$	(48,562,194	)	$	5,231,411		$	1,158,788		$	6,390,199
Balances, May 31, 2018		50,000	$	5		28,361,201	$	2,836	$	53,790,764	$	(52,485,313	)	$	1,308,292		$	1,085,155		$	2,393,447
Cash distributions		-		-		-		-		-		-			-			(51,000	)		(51,000	)
Preferred dividends, $2.06/share		-		-		-		-		-		(102,945	)		(102,945	)		-			(102,945	)
Net income		-		-		-		-		-		704,333			704,333			60,575			764,908
Balances, August 31, 2018		50,000		5		28,361,201		2,836		53,790,764		(51,883,925	)		1,909,680			1,094,730			3,004,410
Cash distributions		-		-		-		-		-		-			-			(51,000	)		(51,000	)
Preferred dividends, $2.10/share		-		-		-		-		-		(105,100	)		(105,100	)		-			(105,100	)
Net income		-		-		-		-		-		233,993			233,993			62,952			296,945
Balances, November 30, 2018		50,000		5		28,361,201		2,836		53,790,764		(51,755,032	)		2,038,573			1,106,682			3,145,255
Cash distributions		-		-		-		-		-		-			-			(51,000	)		(51,000	)
Preferred dividends, $2.16/share		-		-		-		-		-		(108,219	)		(108,219	)		-			(108,219	)
Net income		-		-		-		-		-		167,337			167,337			64,093			231,430
Balances, February 28, 2019		50,000	$	5		28,361,201	$	2,836	$	53,790,764	$	(51,695,914	)	$	2,097,691		$	1,119,775		$	3,217,466

The accompanying notes are an integral part of these consolidated financial statements.

4

Greystone Logistics, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

For the Nine Months Ended February 29(28),

(Unaudited)

	2020			2019
Cash Flows from Operating Activities:
Net income	$	3,056,926		$	1,293,283
Adjustments to reconcile net income to net cash provided by operating activities -
Depreciation and amortization		3,915,774			3,334,730
Deferred tax expense		807,000			486,300
Decrease in trade accounts receivable		447,228			708,876
Decrease (Increase) in related party receivables		(79,014	)		33,347
Increase in inventory		(1,255,108	)		(2,062,150	)
Decrease (Increase) in prepaid expenses		209,453			(23,931	)
Increase (Decrease) in accounts payable and accrued liabilities		(1,278,393	)		1,943,133
Increase (Decrease) in deferred revenue		3,739,526			(751,827	)
Net cash provided by operating activities		9,563,392			4,961,761
Cash Flows from Investing Activities:
Purchases of property and equipment		(3,686,791	)		(6,380,490	)
Proceeds from sale of equipment		-			968,168
Net cash used in investing activities		(3,686,791	)		(5,412,322	)
Cash Flows from Financing Activities:
Proceeds from long-term debt		672,000			3,756,800
Principal payments on long-term debt and financing leases		(3,679,145	)		(3,567,629	)
Proceeds from revolving loan		2,180,000			4,321,000
Principal payments on revolving loan		(4,295,000	)		(2,750,000	)
Principal payments on related party note payable and financing lease		(359,212	)		(233,302	)
Payments for debt issuance costs		(3,360	)		-
Dividends paid on preferred stock		(327,192	)		(208,045	)
Distributions paid by non-controlling interest		(163,200	)		(153,000	)
Net cash provided by (used in) financing activities		(5,975,109	)		1,165,824
Net Increase (Decrease) in Cash		(98,508	)		715,263
Cash, beginning of period		1,255,408			379,632
Cash, end of period	$	1,156,900		$	1,094,895
Non-cash Activities:
Acquisition of equipment by capital leases	$	612,124		$	4,667,380
Addition of right-to-use equipment by operating leases	$	67,750		$	-
Capital expenditures in accounts payable	$	92,945		$	38,445
Preferred dividend accrual	$	99,726		$	108,219
Supplemental information:
Interest paid	$	1,327,149		$	1,297,997

The accompanying notes are an integral part of these consolidated financial statements.

5

GREYSTONE LOGISTICS, INC.

Notes to Consolidated Financial Statements

(Unaudited)

Note 1. Basis of Financial Statements

In the opinion of Greystone Logistics, Inc. (“Greystone”), the accompanying unaudited consolidated financial statements contain all adjustments and reclassifications, which are of a normal recurring nature, necessary to present fairly its financial position as of February 29, 2020 and the results of its operations and cash flows for the nine months and three months ended February 29(28), 2020 and 2019. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the fiscal year ended May 31, 2019 and the notes thereto included in Greystone’s Form 10-K for such period. The results of operations for the nine months and three months ended February 29(28), 2020 and 2019 are not necessarily indicative of the results to be expected for the full fiscal year.

The consolidated financial statements of Greystone include its wholly-owned subsidiaries, Greystone Manufacturing, L.L.C. (“GSM”) and Plastic Pallet Production, Inc. (“PPP”), and the variable interest entity, Greystone Real Estate, L.L.C. (“GRE”). GRE owns two buildings located in Bettendorf, Iowa which are leased to GSM. All material intercompany accounts and transactions have been eliminated in the consolidated financial statements.

Note 2. Earnings Per Share

Basic earnings per share is based on the weighted-average effect of all common shares issued and outstanding and is calculated by dividing net income attributable to common stockholders by the weighted-average shares outstanding during the period. Diluted earnings per share is calculated by dividing net income attributable to common stockholders by the weighted-average number of common shares used in the basic earnings per share calculation plus the number of common shares that would be issued assuming exercise or conversion of all potentially dilutive common shares outstanding.

Greystone excludes equity instruments from the calculation of diluted earnings per share if the effect of including such instruments is anti-dilutive. Instruments which have an anti-dilutive effect for the nine months and three months ended February 29(28) are as follows:

	2020		2019
Preferred stock convertible into common stock		3,333,333		3,333,333

6

The following tables set forth the computation of basic and diluted earnings per share:

For the nine months ended February 29(28), 2020 and 2019:

	2020		2019
Numerator -
Net income attributable to common stockholders	$	2,546,483	$	789,399
Denominator -
Weighted-average shares outstanding - basic		28,361,201		28,361,201
Incremental shares from assumed conversion of warrants and options		642,000		648,214
Diluted shares		29,003,201		29,009,415
Income per share -
Basic and Diluted	$	0.09	$	0.03

For the three months ended February 29(28), 2020 and 2019:

	2020		2019
Numerator -
Net income attributable to common stockholders	$	1,799,805	$	59,118
Denominator -
Weighted-average shares outstanding - basic		28,361,201		28,361,201
Incremental shares from assumed conversion of warrants and options		638,298		650,847
Diluted shares		28,999,499		29,012,048
Income per share -
Basic and Diluted	$	0.06	$	0.00

7

Note 3. Inventory

Inventory consists of the following:

	February 29, 2020		May 31, 2019
Raw materials	$	1,919,222	$	1,295,991
Finished goods		1,956,877		1,325,000
Total inventory	$	3,876,099	$	2,620,991

Note 4. Property, Plant and Equipment

A summary of property, plant and equipment for Greystone is as follows:

	February 29, 2020			May 31, 2019
Production machinery and equipment	$	49,077,097		$	45,645,910
Plant buildings and land		6,869,380			6,336,855
Leasehold improvements		1,095,961			979,890
Furniture and fixtures		601,586			563,074
Right-to-use assets under operating leases		199,653			180,794
		57,843,677			53,706,523
Less: Accumulated depreciation and amortization		(24,937,955	)		(21,026,051	)
Net Property, Plant and Equipment	$	32,905,722		$	32,680,472

Production machinery and equipment includes right-to-use equipment capitalized pursuant to financing leases in the amount of $8,473,357 and $7,861,233 at February 29, 2020 and May 31, 2019, respectively. The financing leases all include an option to purchase which management anticipates exercising and, accordingly, the related equipment is being amortized over the estimated useful life using the straight-line method over 3.5 years for pallet molds, 5 and 7 year for material handling equipment and 12 years for injection molding machines.

Production machinery includes deposits on equipment in the amount of $1,680,960 at February 29, 2020 which have not been placed into service. Two plant buildings and land are owned by GRE, a variable interest entity (“VIE”), having a net book value of $2,809,645 at February 29, 2020.

Depreciation expense, including amortization expense related to right-to-use assets under financing leases, for the nine months ended February 29(28), 2020 and 2019 was $3,911,904 and $3,255,939, respectively.

Note 5. Related Party Transactions/Activity

Yorktown Management & Financial Services, LLC

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. GSM pays weekly rental fees to Yorktown of $27,500 for use of Yorktown’s grinding equipment and pelletizing equipment. Rental fees were $1,072,500 for the each of the nine months ended February 29(28), 2020 and 2019.

8

Effective January 1, 2017, Greystone and Yorktown entered into a five-year lease for office space at a monthly rental of $4,000 per month. Total rent expense was $36,000 for each of the nine months ended February 29(28), 2020 and 2019. At February 29, 2020, future minimum payments under the non-cancelable operating lease for the remaining two years are $48,000 and $40,000.

TriEnda Holdings, L.L.C.

TriEnda Holdings, L.L.C. (“TriEnda”) is a manufacturer of plastic pallets, protective packing and dunnage utilizing thermoform processing for which Warren Kruger, Greystone’s President and CEO, serves TriEnda as the non-executive Chairman of the Board and is a partner in a partnership which has a majority ownership interest in TriEnda. Greystone periodically purchases material and pallets from TriEnda. Purchases for the nine months ended February 29(28), 2020 and 2019 totaled $5,400 and $42,349, respectively.

Green Plastic Pallets

Greystone sells plastic pallets to Green Plastic Pallets (“Green”), an entity that is owned by James Kruger, brother to Warren Kruger, Greystone’s President and CEO. Greystone had sales to Green of $393,720 and $167,400 for the nine months ended February 29(28), 2020 and 2019, respectively. The account receivable due from Green at February 29, 2020 was $122,400.

Note 6. Long-term Debt

Debt as of February 29, 2020 and May 31, 2019 is as follows:

	February 29, 2020			May 31, 2019
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	$	2,664,063		$	3,234,947
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, 2024		1,228,697			1,399,490
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		1,293,713			1,744,235
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		756,372			927,199
Term loan F payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 5.25%, maturing February 29, 2024		2,919,586			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		848,448			876,934
Term loan H payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 5.25%, maturing January 1, 2022		499,585			-
Revolving loan payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 5.5%, due January 31, 2022		1 090,000			3,205,000
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, secured by production equipment		561,105			800,488
Term loan payable by GRE to International Bank of Commerce, interest rate of 5.5%, monthly principal and interest payment of $27,688, due April 30, 2023		2,312,223			2,461,116
Note payable to Robert Rosene, 7.5% interest, due January 15, 2022		4,297,169			4,426,631
Other		189,246			223,177
Total long-term debt		18,660,207			22,697,464
Debt issuance costs, net of amortization		(37,176	)		(37,686	)
Total debt, net of debt issuance costs		18,623,031			22,659,778
Less: Current portion of long-term debt		(3,525,314	)		(3,030,630	)
Long-term debt, net of current portion and debt issue costs	$	15,097,717		$	19,629,148

The prime rate of interest as of February 29, 2020 was 4.75%. Effective March 16, 2020, the prime rate of interest was reduced to 3.25%.

9

Loan Agreement between Greystone and IBC

The Loan Agreement (“IBC Loan Agreement”), dated January 31, 2014 and as amended from time to time, among Greystone and GSM (the “Borrowers”) and International Bank of Commerce (“IBC”) provides for certain term loans and a revolver loan.

Effective July 1, 2019, the Borrowers and IBC entered into the Tenth Amendment to the IBC Loan Agreement providing for Term Loan H in the amount of $672,000 with a maturity date of January 1, 2022, for the procurement of production equipment.

The IBC term loans make equal monthly payments of principal and interest in such amounts sufficient to amortize the principal balance as follows: (i) Term Loan A over a seven-year period beginning February 29, 2016 (currently $78,260 per month), (ii) Term Loan C over a seven-year period beginning November 30, 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 $67,674 per month), (vi) Term Loan G over a fifteen-year period beginning April 30, 2019 (currently $7,092 per month) and (vii) Term Loan H over 30 months beginning August 1, 2019 (currently $23,891 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 amount which can be borrowed from time to time is dependent upon the amount of the borrowing base not to exceed $4,000,000. The Revolving Loan bears interest at the greater of the prime rate of interest plus 0.5%, or 5.50% and matures January 31, 2022. 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, among other things, requires a quarterly affirmation that the Borrowers have maintained a debt service coverage ratio of 1:25 to 1:00. As of February 29, 2020, Greystone was in compliance with this debt service coverage ratio.

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 notes with interest and any unpaid accrued fees.

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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 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 August 10, 2018, GRE and IBC entered into an amended agreement to extend the maturity of the note to April 30, 2023 and increase the interest rate to 5.5%. The note 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 an unsecured note payable at 7.5% interest.

Effective June 1, 2016, the note was restated (the “Restated Note”) to combine the outstanding principal, $2,066,000, and accrued interest, $2,475,690, into an unsecured note payable of $4,541,690 with an extended maturity date of January 15, 2022. The Restated Note provides that accrued interest is payable monthly and allows Greystone to use commercially reasonable efforts to pay such amounts as allowed by the IBC Loan Agreement against the interest accrued prior to the restatement. The balance of the note at February 29, 2020 was $4,297,169.

There is no assurance that Mr. Rosene will renew the note as of the maturity date.

Maturities

Maturities of Greystone’s long-term debt for the five years subsequent to February 29, 2020 are $3,525,314, $9,251,335, $2,203,898, $2,906,782 and $772,878.

Note 7. Leases

Financing Leases

Financing leases as of February 29, 2020 and May 31, 2019:

	February 29, 2020			May 31, 2019
Present value of non-cancellable financing leases	$	5,922,843		$	6,754,819
Less: Current portion		(2,146,923	)		(1,516,629	)
Present value of non-cancellable financing leases, net of current portion	$	3,775,920		$	5,238,190

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Greystone and an unrelated private company entered into three lease agreements for certain production equipment with a total cost of approximately $7.4 million during the period from February 24, 2018 through December 21, 2018 with five-year terms and a capitalized interest rate of 7.4%. Each of the lease agreements include a bargain purchase option to acquire the production equipment at the end of the lease term. The leased equipment is principally used to produce pallets for the private company. Lease payments are made as a credit on the sales invoice at the rate of $3.32 for each pallet produced from the respective leased equipment and shipped to the private company. The estimated aggregate monthly rental payments are approximately $178,500. The rent payments can vary each month depending on the quantity of pallets produced from each machine. Due to improvements in the production process, pallet production has increased since May 31, 2019 thereby resulting in an increase in the estimated annual future rental payments and a corresponding reduction in the estimated term of the lease. The lease 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.

Effective December 28, 2018, Yorktown purchased certain production equipment from Greystone at net book value of $968,168 and entered into a lease agreement with Greystone for the equipment with a monthly rent of $27,915 for the initial thirty-nine months and $7,695 for the following twelve months and maturing December 27, 2022. The lease agreement has a $10,000 purchase option at the end of the lease.

The production equipment under the non-cancelable financing leases has a gross carrying amount of $8,473,357 at February 29, 2020. Amortization of the carrying amount of $653,942 and $775,530 was included in depreciation expense for the nine months ended February 29(28), 2020 and 2019, respectively.

Operating Leases

Greystone recognize a lease liability for each lease based on the present value of remaining minimum fixed rental payments, using a discount rate that approximates the rate of interest for a collateralized loan over a similar term. A right-of-use asset, reported in property, plant and equipment on the consolidated balance sheets, is recognized for each lease, valued at the lease liability. Minimum fixed rental payments are recognized on a straight-line basis over the life of the lease as costs and expenses on the consolidated statement of income. Variable and short-term rental payments are recognized as costs and expenses as they are incurred.

Greystone has three non-cancellable operating leases for (i) equipment with a fifty-two month term and a forty-eight month term and a discount rate of 5.40% and (ii) office space on a ninety-month term and a discount rate of 5.0%. The leases are single-term with constant monthly rental rates.

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Lease Summary Information

For the nine months ended February 29(28), 2020 and 2019:

	2020			2019
Lease Expense
Financing lease expense -
Amortization of right-of-use assets	$	653,942		$	775,530
Interest on lease liabilities		355,692			236,875
Operating lease expense		63,185			36,000
Short-term lease expense		1,207,008			1,136,617
Total	$	2,279,827		$	2,185,022
Other Information
Cash paid for amounts included in the measurement of lease liabilities for finance leases -
Operating cash flows	$	355,692		$	236,875
Financing cash flows	$	1,487,489		$	644,677
Cash paid for amounts included in the measurement of lease liabilities for operating leases -
Operating cash flows	$	63,185		$	36,000
Right-of-use assets obtained in exchange for lease liabilities -
Financing leases	$	612,124		$	4,667,380
Operating leases	$	67,750		$	-
Weighted-average remaining lease term (in years) -
Financing leases		3.6			3.1
Operating leases		3.0			2.8
Weighted-average discount rate -
Financing leases		7.1	%		7.2	%
Operating leases		5.2	%		5.0	%

Future minimum lease payments under non-cancelable leases as of February 29, 2020, are approximately:           ,

	Financing Leases		Operating Leases
Twelve months ended February 28, 2021	$	2,513,000	$	81,881
Twelve months ended February 28, 2022		2,395,000		73,881
Twelve months ended February 28, 2023		1,552,000		33,881
Twelve months ended February 29, 2024		149,000		23,154
Twelve months ended February 28, 2025		20,000		-
Total future minimum lease payments		6,629,000		212,797
Present value discount		706,157		13,144
Present value of minimum lease payments	$	5,922,843	$	199,653

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Note 8. Deferred Revenue

Advances from a customer pursuant to a contract for the sale of plastic pallets is recognized as deferred revenue. Revenue is recognized by Greystone as pallets are shipped to the customer(s). Customer advances totaled $5,981,710 and $3,280,500 during the nine months ended February 29(28), 2020 and 2019, respectively. Revenue recognition from customer advances during the nine months ended February 29, 2020 was $2,242,184. The unrecognized balance of deferred revenue at February 29, 2020 and May 31, 2019, was $5,940,593 and $2,201,067, respectively.

Note 9. Revenue and Revenue Recognition

Revenue is recognized at the point in time as a good or service is transferred to a customer and the customer obtains control of that good or receives the service performed. Sales arrangements with customers are short-term in nature involving single performance obligations related to the delivery of goods and generally provide for transfer of control at the time of shipment. In limited circumstances, where acceptance of the goods is subject to approval by the customer, revenue is recognized upon approval by the customer unless, historically, there have been insignificant rejections of goods by the customer. Contract liabilities associated with sales arrangements primarily relate to deferred revenue on prepaid sales of goods. Greystone generally permits returns of product due to defects; however, product returns are historically insignificant.

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 approximately $2,187,000 and $291,000 in fiscal years 2020 and 2019, 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 nine months ended February 29(28), 2020 and 2019, respectively, were as follows:

Category	2020			2019
End Users – Major Customers		87	%		85	%
End Users - Other		1	%		1	%
Distributors		12	%		14	%

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Note 10. Fair Value of Financial Instruments

The following methods and assumptions are used in estimating the fair-value disclosures for financial instruments:

Debt: The carrying amount of notes with floating rates of interest approximate fair value. Fixed rate notes are valued based on cash flows using estimated rates of comparable notes. The carrying amounts reported on the balance sheets approximate fair value.

Note 11. Concentrations, Risks and Uncertainties

Greystone derived approximately 87% and 85% of its total sales from four customers (three in fiscal year 2019) in fiscal years 2020 and 2019, respectively. The loss of a material amount of business from one or more of these customers could have a material adverse effect on Greystone.

Greystone purchases damaged pallets from its customers at a price based on the value of the raw material content in the pallet. A majority of these purchases, totaling $1,409,045 and $1,249,653 in fiscal years 2020 and 2019, respectively, is from one of its major customers.

COVID-19

The recent global outbreak of COVID-19 has created much uncertainty in the marketplace, and the full economic impact, duration and spread of the COVID-19 virus is uncertain and difficult to predict at this time considering the rapidly evolving landscape. To date, the demand for Greystone’s products has not been affected as Greystone’s pallets are generally used logistically by essential entities. Going forward, the major issue that Greystone has incurred is maintaining adequate work force to meet demand for pallets. While there has not been a reported case of COVID-19 at Greystone, the virus has impacted the overall workforce in the area as recruiting new employees has slowed, and a portion of the employees have opted to remain home for protection. Management is currently unable to estimate the impact of this economic event on its future financial position, results of operations and cash flows. Therefore, Greystone can give no assurances that this event will not have a material adverse effect on its financial position or results of operations. If the COVID-19 outbreak continues to evolve causing disruption to our workforce, customers and vendors, this economic event could have a material adverse effect on Greystone’s business, results of operations, financial condition and cash flows.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law providing certain economic aid packages for small business. Greystone qualifies as a small business under CARES and has submitted an application for funding under the Paycheck Protections Program.

Note 12. Commitments

At February 29, 2020, Greystone had commitments totaling $2,867,000 toward the purchase of production equipment.

Note 13. Subsequent Event

On March 24, 2020, Greystone entered into a loan agreement with Great Western Bank to borrow $1,508,000 under a term loan, 3.7% interest and maturing March 19, 2025, for the purchase of an injection molding machine.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Results of Operations

General to All Periods

The unaudited consolidated financial statements include Greystone Logistics, Inc., and its two wholly-owned subsidiaries, Greystone Manufacturing, L.L.C. (“GSM”) and Plastic Pallet Production, Inc. (“PPP”). Greystone also consolidates its variable interest entity, Greystone Real Estate, L.L.C. (“GRE”). All material intercompany accounts and transactions have been eliminated.

References to fiscal year 2020 refer to the nine months and three months ended February 29, 2020. References to fiscal year 2019 refer to the nine months and three months ended February 28, 2019.

Sales

Greystone’s primary focus is to provide quality plastic pallets to its existing customers while continuing its marketing efforts to broaden its customer base. Greystone’s existing customers are primarily located in the United States and engaged in the beverage, pharmaceutical and other industries. Greystone has generated, and plans to continue to generate, interest in its pallets by attending trade shows sponsored by industry segments that would benefit from Greystone’s products. Greystone hopes to gain wider product acceptance by marketing the concept that the widespread use of plastic pallets could greatly reduce the destruction of trees on a worldwide basis. Greystone’s marketing is conducted through contract distributors, its President and other employees.

COVID-19 Risks

The impact of COVID-19 has created much uncertainty in the marketplace. To date, the demand for Greystone’s products has not been affected as Greystone’s pallets are generally used logistically by essential entities. Going forward, the major issue that Greystone has incurred is maintaining adequate work force to meet demand for pallets. While there has not been a reported case of COVID-19 at Greystone, approximately 10% of Greystone’s workforce have opted to stay at home for protection. The virus has impacted the overall workforce in the area as recruiting new employees has slowed. Management is unable to predict the stability of its workforce as the longer that the virus stays active, the greater the uncertainty.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law providing certain economic aid packages for small business. Greystone qualifies as a small business under CARES and has submitted an application for funding under the Paycheck Protections Program.

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Personnel

Greystone personnel includes both full-time employees and temporary contract personnel. Temporary personnel train for ninety days and, if appropriate, hired as full-time. Greystone had approximately 266 and 220 full-time employees as of February 29(28), 2020 and 2019, respectively. In addition, temporary personnel totaled 116 and 126 as of February 29(28), 2020 and 2019, respectively.

Nine Months Ended February 29, 2020 Compared to Nine Months Ended February 28, 2019

Sales

Sales for fiscal year 2020 were $57,906,777 compared to $50,163,707 in fiscal year 2019 for an increase of $7,743,070, or 15%. The increase in pallet sales in fiscal year 2020 over 2019 was primarily attributable to the sales growth within Greystone’s largest customers which included a new customer in fiscal year 2020.

Sales to Greystone’s four (three in fiscal year 2019) largest customers accounted for approximately 87% and 85% of sales in fiscal years 2020 and 2019, respectively. Greystone is not able to predict the future needs of these major customers and will continue its efforts to grow sales through the addition of new customers developed through Greystone’s marketing efforts.

Cost of Sales

Cost of sales in fiscal year 2020 was $49,279,904, or 85% of sales, compared to $44,257,438, or 88% of sales, in fiscal year 2019. The ratio of cost of sales to sales in fiscal year 2020 reflects a significant improvement over the ratio for fiscal year 2019. Improvements during fiscal year 2020 included significant increases in pallet production levels resulting from installation of hardware and software to improve the flow of resin into molds on injection molding machines, the addition of a new pelletizing line which increases Greystone’s capacity for pelletizing plastic in lieu of purchasing plastic in pelletized form and price increases on certain pallets.

Additional initiatives to facilitate and continue improvements toward reductions in cost of sales as a ratio of sales include the addition of a new injection molding machine in March 2020, to replace an older unit, additional hardware and software to regulate the flow of resin thereby increasing pallet production levels, completing the installation of an additional grinding machine to increase grinding capacity thereby reducing raw material costs through the ability to use lower-priced unground recycled plastic, and completion of robotics installation on two production lines. Greystone plans to complete the remaining initiatives throughout the coming months.

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Selling, General and Administrative Expenses

Selling, general and administrative expenses were $3,438,424, or 5.9% of sales, in fiscal year 2020 compared to $2,752,029, or 5.5% of sales, for an increase of $686,395 or 25%. The increase in fiscal year 2020 over fiscal year 2019 results principally from increased costs for administrative personnel. The selling, general and administrative expenses are estimated to increase proportionately with increases in sales.

Other Income (Expenses)

Other income was $9,304 in fiscal year 2020 compared to $7,728 in fiscal year 2019 primarily from sale of scrap materials.

Interest expense was $1,333,827 in fiscal year 2020 compared to $1,348,285 in fiscal year 2019 for a decrease of $14,458. The prime rate of interest declined from 5.50% at May 31, 2019 to 4.75% at February 29, 2020. The weighted average prime rate of interest was 5.00% compared to 5.19% for the nine months ended February 29(28), 2020 and 2019, respectively.

Provision for Income Taxes

The provision for income taxes was $807,000 and $520,400 in fiscal years 2020 and 2019, respectively. The effective tax rate differs from federal statutory rates due to net income from GRE which, as a limited liability company of which Greystone has no equity ownership, is not taxed at the corporate level, charges which have no tax benefit and changes in the valuation allowance.

Based upon a review of its income tax filing positions, Greystone believes that its positions would be sustained upon an audit by the Internal Revenue Service and does not anticipate any adjustments that would result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded.

Net Income

Greystone recorded net income of $3,056,926 in fiscal year 2020 compared to $1,293,283 in fiscal year 2019 primarily for the reasons discussed above.

Net Income Attributable to Common Stockholders

The net income attributable to common stockholders for fiscal year 2020 was $2,545,483, or $0.09 per share, compared $789,399, or $0.03 per share, in fiscal year 2019 primarily for the reasons discussed above.

Three Months Ended February 29, 2020 Compared to Three Months Ended February 28, 2019

Sales

Sales for fiscal year 2020 were $19,738,806 compared to $17,224,467 in fiscal year 2019 for an increase of $2,514,339, or 15%. The increase in pallet sales in fiscal year 2020 over 2019 was primarily due to the sales growth within Greystone’s largest customers which included a new customer in fiscal year 2020.

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Sales to Greystone’s four (three in fiscal year 2019) largest customers accounted for approximately 87% and 85% of sales in fiscal years 2020 and 2019, respectively. Greystone is not able to predict the future needs of these major customers and will continue its efforts to grow sales through the addition of new customers developed through Greystone’s marketing efforts.

Cost of Sales

Cost of sales in fiscal year 2020 was $15,622,931, or 79% of sales, compared to $15,455,920, or 90% of sales, in fiscal year 2019. The ratio of cost of sales to sales in fiscal year 2020 reflects a significant improvement over the ratio for fiscal year 2019. Improvements during fiscal year 2020 included significant increases in pallet production levels resulting from installation of hardware and software to improve the flow of resin into molds on injection molding machines, the addition of a new pelletizing line which increases Greystone’s capacity for pelletizing plastic in lieu of purchasing plastic in pelletized form and price increases on certain pallets.

Additional initiatives to facilitate and continue improvements toward reductions in cost of sales as a ratio of sales include the addition of a new injection molding machine in March 2020, to replace an older unit, additional hardware and software to regulate the flow of resin thereby increasing pallet production levels, completing the installation of an additional grinding machine to increase grinding capacity thereby reducing raw material costs through the ability to use lower-priced unground recycled plastic, and completion of the robotics installation on two production lines. Greystone plans to complete the remaining initiatives throughout the coming months.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $1,248,195, or 6% of sales, in fiscal year 2020 compared to $959,288, or 6% of sales, for an increase of $288,908 or 30%. The increase in fiscal year 2020 over fiscal year 2019 results principally from increased costs for administrative personnel. The selling, general, selling and administrative expenses are estimated to increase proportionately with increases in sales.

Other Income (Expenses)

Other income was $4,391 in fiscal year 2020 compared to $2,438 in fiscal year 2019 principally from sales of scrap material.

Interest expense was $420,128 in fiscal year 2020 compared to $499,967 in fiscal year 2019 for a decrease of $79,839. The prime rate of interest declined from 5.25% at August 31, 2019 to 4.75% at February 29, 2020. The weighted average prime rate of interest was 4.96% compared to 5.18% for the three months ended February 29(28), 2020 and 2019, respectively.

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Provision for Income Taxes

The provision for income taxes was $487,000 and $80,300 in fiscal years 2020 and 2019, respectively. The effective tax rate differs from federal statutory rates due to net income from GRE which, as a limited liability company of which Greystone has no equity ownership, is not taxed at the corporate level, charges which have no tax benefit and changes in the valuation allowance.

Based upon a review of its income tax filing positions, Greystone believes that its positions would be sustained upon an audit by the Internal Revenue Service and does not anticipate any adjustments that would result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded.

Net Income

Greystone recorded net income of $1,964,942 in fiscal year 2020 compared to $231,430 in fiscal year 2019 primarily for the reasons discussed above.

Net Income Attributable to Common Stockholders

The net income attributable to common stockholders for fiscal year 2020 was $1,799,805, or $0.06 per share, compared $59,118, or $0.00 per share, in fiscal year 2019 primarily for the reasons discussed above.

Liquidity and Capital Resources

A summary of cash flows for the nine months ended February 29, 2020 is as follows:

Cash provided by operating activities	$	9,563,392
Cash used in investing activities	$	(3,686,791	)
Cash used in financing activities	$	(5,975,109	)

The contractual obligations of Greystone are as follows:

	Total		Less than 1 year		1-3 years		4-5 years		More than 5 years
Long-term debt	$	18,660,207	$	3,525,314	$	11,455,233	$	3,679,660	$	-
Financing lease rent	$	6,629,000	$	2,513,000	$	3,947,000	$	169,000	$	-
Operating lease rent	$	212,797	$	81,881	$	107,762	$	23,154	$	-
Commitments	$	2,867,000	$	2,867,000	$	-	$	-	$	-

Greystone had a working capital deficit of $(5,781,669) at February 29, 2020. To provide for the funding to meet Greystone’s operating activities and contractual obligations as of February 29, 2020, Greystone will have to continue to produce positive operating results or explore various options including additional long-term debt and equity financing. However, there is no guarantee that Greystone will continue to create positive operating results or be able to raise sufficient capital to meet these obligations.

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Effective March 24, 2020, Greystone entered into a loan agreement with Great Western Bank to borrow $1,508,000 under a term loan, 3.7% interest and maturing March 19, 2025. The purpose of the loan is to substantially fund the purchase of an injection molding machine of which the cost is included as a commitment at February 29, 2020.

Substantially all the financing that Greystone has received through the last few fiscal years resulted primarily from bank notes which are guaranteed by certain officers and directors of Greystone and, formerly, from loans provided by certain officers and directors of Greystone. Greystone continues to be dependent upon its officers and directors to provide and/or secure additional financing and there is no assurance that its officers and directors will continue to do so. As such, there is no assurance that funding will be available for Greystone to continue operations.

Greystone has 50,000 outstanding shares of cumulative 2003 Preferred Stock with a liquidation preference of $5,000,000 and a preferred dividend rate of the prime rate of interest plus 3.25%. Greystone does not anticipate that it will make cash dividend payments to any holders of its common stock unless and until the financial position of Greystone improves through increased revenues, another financing transaction or otherwise. Pursuant to the IBC Loan Agreement, as discussed in Note 6 to the consolidated financial statements, Greystone may pay dividends on its preferred stock in an amount not to exceed $500,000 per year.

Forward Looking Statements and Material Risks

This Quarterly Report on Form 10-Q includes certain statements that may be deemed “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are made in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, that address activities, events or developments that Greystone expects, believes or anticipates will or may occur in the future, including decreased costs, securing financing, the profitability of Greystone, potential sales of pallets or other possible business developments, are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties. The forward-looking statements contained in this Quarterly Report on Form 10-Q could be affected by any of the following factors: Greystone’s prospects could be affected by changes in availability of raw materials, competition, rapid technological change new legislation regarding environmental matters and possible effect from COVID-19; Greystone may not be able to secure additional financing necessary to sustain and grow its operations; and a material portion of Greystone’s business is and will be dependent upon a few large customers and there is no assurance that Greystone will be able to retain such customers. These risks and other risks that could affect Greystone’s business are more fully described in Greystone’s Form 10-K for the fiscal year ended May 31, 2019, which was filed on August 29, 2019. Actual results may vary materially from the forward-looking statements. Greystone undertakes no duty to update any of the forward-looking statements contained in this Quarterly Report on Form 10-Q.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4. Controls and Procedures.

As of the end of the period covered by this Quarterly Report on Form 10-Q, Greystone carried out an evaluation under the supervision of Greystone’s Chief Executive Officer and Chief Financial Officer of the effectiveness of the design and operation of Greystone’s disclosure controls and procedures pursuant to the Securities Exchange Act Rules 13a-15(e) and 15d-15(e). Based on an evaluation as of May 31, 2019, Warren F. Kruger, Greystone’s Chief Executive Officer, and William W. Rahhal, Greystone’s Chief Financial Officer, identified no material weakness in Greystone’s internal control over financial reporting. As a result, Greystone’s CEO and Chief Financial Officer concluded that the design and operation of Greystone’s disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) were effective as of February 29, 2020.

During the nine months ended February 29, 2020, there were no changes in Greystone’s internal controls over financial reporting that have materially affected, or that are reasonably likely to materially affect, Greystone’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A. Risk Factors.

Not applicable.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

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Item 5. Other Information.

None.

Item 6. Exhibits.

The following exhibits are filed or furnished as part of this Quarterly Report on Form 10-Q.

31.1	Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended, and Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (submitted herewith).
31.2	Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended, and Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (submitted herewith).
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (submitted herewith).
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (submitted herewith).
101	Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets at February 29, 2020 and May 31, 2019, (ii) the Consolidated Statements of Income for the Nine Months and Three months ended February 29(28), 2020 and 2019, (iii) the Consolidated Statements of Changes in Equity for the Nine Months and Three Months ended February 29(28), 2020 and 2019, (iv) the Consolidated Statements of Cash Flows for the Nine Months ended February 29(28), 2020 and 2019, and (v) the Notes to the Consolidated Financial Statements (submitted herewith).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	GREYSTONE LOGISTICS, INC.
	(Registrant)
Date: April 13, 2020	/s/ Warren F. Kruger
	Warren F. Kruger, President and Chief
	Executive Officer (Principal Executive Officer)
Date: April 13, 2020	/s/ William W. Rahhal
	William W. Rahhal, Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)

24

Index to Exhibits

The following exhibits are filed or furnished as part of this Quarterly Report on Form 10-Q.

31.1	Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended, and Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (submitted herewith).
31.2	Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended, and Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (submitted herewith).
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (submitted herewith).
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (submitted herewith).
101	Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets at February 29, 2020 and May 31, 2019, (ii) the Consolidated Statements of Income for the Nine Months and Three months ended February 29(28), 2020 and 2019, (iii) the Consolidated Statements of Changes in Equity for the Nine Months and Three months ended February 29(28), 2020 and 2019, (iv) the Consolidated Statements of Cash Flows for the Nine Months ended February 29(28), 2020 and 2019, and (v) the Notes to the Consolidated Financial Statements (submitted herewith).

25

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Warren F. Kruger, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Greystone Logistics, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

April 13, 2020	/s/ Warren F. Kruger
	Warren F. Kruger
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, William W. Rahhal, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Greystone Logistics, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

April 13, 2020	/s/ William W. Rahhal
	William W. Rahhal
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Greystone Logistics, Inc. (the “Company”) on Form 10-Q for the period ending February 29, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Warren F. Kruger, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

April 13, 2020	/s/ Warren F. Kruger
	Warren F. Kruger
	President and Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished to the Securities and Exchange Commission as an exhibit to the Report and shall not be considered filed as part of the Report.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Greystone Logistics, Inc. (the “Company”) on Form 10-Q for the period ending February 29, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, William W. Rahhal, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

April 13, 2020	/s/ William W. Rahhal
	William W. Rahhal
	Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished to the Securities and Exchange Commission as an exhibit to the Report and shall not be considered filed as part of the Report.

XML

Property, Plant and Equipment (Tables)

9 Months Ended

Feb. 29, 2020

Property, Plant and Equipment [Abstract]

Schedule of Property, Plant and Equipment

A summary of property, plant and equipment for Greystone is as follows:

	February 29, 2020			May 31, 2019
Production machinery and equipment	$	49,077,097		$	45,645,910
Plant buildings and land		6,869,380			6,336,855
Leasehold improvements		1,095,961			979,890
Furniture and fixtures		601,586			563,074
Right-to-use assets under operating leases		199,653			180,794
		57,843,677			53,706,523
Less: Accumulated depreciation and amortization		(24,937,955	)		(21,026,051	)
Net Property, Plant and Equipment	$	32,905,722		$	32,680,472

XML

Earnings Per Share - Schedule of Anti-Dilutive Instruments of Earnings Per Share (Details) - shares	3 Months Ended		9 Months Ended
	Feb. 29, 2020	Feb. 28, 2019	Feb. 29, 2020	Feb. 28, 2019
Convertible Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-Dilutive Instruments of Earnings per Share	3,333,333	3,333,333	3,333,333	3,333,333

XML

Consolidated Statements of Changes in Equity (Unaudited) - USD ($)	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Total Greystone Stockholders' Equity [Member]	Non-controlling Interest [Member]	Total
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						(51,000)	(51,000)
Preferred dividends				(102,945)	(102,945)		(102,945)
Net income				704,333	704,333	60,575	764,908
Balance at Aug. 31, 2018	$ 5	$ 2,836	53,790,764	(51,883,925)	1,909,680	1,094,730	3,004,410
Balance, shares at Aug. 31, 2018	50,000	28,361,201
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
Net income							1,293,283
Balance at Feb. 28, 2019	$ 5	$ 2,836	53,790,764	(51,695,914)	2,097,691	1,119,775	3,217,466
Balance, shares at Feb. 28, 2019	50,000	28,361,201
Balance at Aug. 31, 2018	$ 5	$ 2,836	53,790,764	(51,883,925)	1,909,680	1,094,730	3,004,410
Balance, shares at Aug. 31, 2018	50,000	28,361,201
Cash distributions						(51,000)	(51,000)
Preferred dividends				(105,100)	(105,100)		(105,100)
Net income				233,993	233,993	62,952	296,945
Balance at Nov. 30, 2018	$ 5	$ 2,836	53,790,764	(51,755,032)	2,038,573	1,106,682	3,145,255
Balance, shares at Nov. 30, 2018	50,000	28,361,201
Cash distributions						(51,000)	(51,000)
Preferred dividends				(108,219)	(108,219)		(108,219)
Net income				167,337	167,337	64,093	231,430
Balance at Feb. 28, 2019	$ 5	$ 2,836	53,790,764	(51,695,914)	2,097,691	1,119,775	3,217,466
Balance, shares at Feb. 28, 2019	50,000	28,361,201
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
Cash distributions						(52,200)	(52,200)
Preferred dividends				(112,363)	(112,363)		(112,363)
Net income				554,613	554,613	64,686	619,299
Balance at Aug. 31, 2019	$ 5	$ 2,836	53,790,764	(50,666,427)	3,127,178	1,138,757	4,265,935
Balance, shares at Aug. 31, 2019	50,000	28,361,201
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
Net income							3,056,926
Balance at Feb. 29, 2020	$ 5	$ 2,836	53,790,764	(48,562,194)	5,231,411	1,158,788	6,390,199
Balance, shares at Feb. 29, 2020	50,000	28,361,201
Balance at Aug. 31, 2019	$ 5	$ 2,836	53,790,764	(50,666,427)	3,127,178	1,138,757	4,265,935
Balance, shares at Aug. 31, 2019	50,000	28,361,201
Cash distributions						(69,600)	(69,600)
Preferred dividends				(102,637)	(102,637)		(102,637)
Net income				407,065	407,065	65,620	472,685
Balance at Nov. 30, 2019	$ 5	$ 2,836	53,790,764	(50,361,999)	3,431,606	1,134,777	4,566,383
Balance, shares at Nov. 30, 2019	50,000	28,361,201
Cash distributions						(41,400)	(41,400)
Preferred dividends				(99,726)	(99,726)		(99,726)
Net income				1,899,531	1,899,531	65,411	1,964,942
Balance at Feb. 29, 2020	$ 5	$ 2,836	$ 53,790,764	$ (48,562,194)	$ 5,231,411	$ 1,158,788	$ 6,390,199
Balance, shares at Feb. 29, 2020	50,000	28,361,201

XML

Revenue and Revenue Recognition - Schedule of Sale of Revenues for Customer Categories (Details)	9 Months Ended
	Feb. 29, 2020	Feb. 28, 2019
End Users - Major Customers [Member]
Concentration Risk [Line Items]
Total	87.00%	85.00%
End Users - Other [Member]
Concentration Risk [Line Items]
Total	1.00%	1.00%
Distributors [Member]
Concentration Risk [Line Items]
Total	12.00%	14.00%

XML

Document and Entity Information - shares	9 Months Ended
	Feb. 29, 2020	Apr. 03, 2020
Document And Entity Information
Entity Registrant Name	GREYSTONE LOGISTICS, INC.
Entity Central Index Key	0001088413
Document Type	10-Q
Document Period End Date	Feb. 29, 2020
Amendment Flag	false
Current Fiscal Year End Date	--05-31
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 Shell Company	false
Entity Common Stock, Shares Outstanding		28,361,201
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2020

XML

Earnings Per Share

9 Months Ended

Feb. 29, 2020

Earnings Per Share [Abstract]

Earnings Per Share

Note 2. Earnings Per Share

Basic earnings per share is based on the weighted-average effect of all common shares issued and outstanding and is calculated by dividing net income attributable to common stockholders by the weighted-average shares outstanding during the period. Diluted earnings per share is calculated by dividing net income attributable to common stockholders by the weighted-average number of common shares used in the basic earnings per share calculation plus the number of common shares that would be issued assuming exercise or conversion of all potentially dilutive common shares outstanding.

Greystone excludes equity instruments from the calculation of diluted earnings per share if the effect of including such instruments is anti-dilutive. Instruments which have an anti-dilutive effect for the nine months and three months ended February 29(28) are as follows:

	2020		2019
Preferred stock convertible into common stock		3,333,333		3,333,333

The following tables set forth the computation of basic and diluted earnings per share:

For the nine months ended February 29(28), 2020 and 2019:

	2020		2019
Numerator -
Net income attributable to common stockholders	$	2,546,483	$	789,399
Denominator -
Weighted-average shares outstanding - basic		28,361,201		28,361,201
Incremental shares from assumed conversion of warrants and options		642,000		648,214
Diluted shares		29,003,201		29,009,415
Income per share -
Basic and Diluted	$	0.09	$	0.03

For the three months ended February 29(28), 2020 and 2019:

	2020		2019
Numerator -
Net income attributable to common stockholders	$	1,799,805	$	59,118
Denominator -
Weighted-average shares outstanding - basic		28,361,201		28,361,201
Incremental shares from assumed conversion of warrants and options		638,298		650,847
Diluted shares		28,999,499		29,012,048
Income per share -
Basic and Diluted	$	0.06	$	0.00

XML

Leases (Details Narrative) - USD ($)	9 Months Ended		10 Months Ended
	Feb. 29, 2020	Feb. 28, 2019	Dec. 21, 2018	May 31, 2019
Lessee, Lease, Description [Line Items]
Production equipment gross carrying amount	$ 8,473,357			$ 7,861,233
Amortization	$ 653,942	$ 775,530
Equipment One [Member]
Lessee, Lease, Description [Line Items]
Operating lease term	52 months
Operating lease discount rate	5.40%
Equipment Two [Member]
Lessee, Lease, Description [Line Items]
Operating lease term	48 months
Operating lease discount rate	5.40%
Office Space [Member]
Lessee, Lease, Description [Line Items]
Operating lease term	90 months
Operating lease discount rate	5.00%
Production Equipment [Member]
Lessee, Lease, Description [Line Items]
Production equipment gross carrying amount	$ 8,473,357
Sale and Leaseback Agreement [Member] | Yorktown Production Equipment [Member]
Lessee, Lease, Description [Line Items]
Payments of monthly rental amount	7,695
Value of production equipment purchased	$ 968,168
Lease maturity date	Dec. 27, 2022
Bargain purchase option amount	$ 10,000
Sale and Leaseback Agreement [Member] | Yorktown Production Equipment [Member] | Initial Thirty Nine Months [Member]
Lessee, Lease, Description [Line Items]
Payments of monthly rental amount	$ 27,915
Three Year Lease Agreements with Five Year Terms [Member]
Lessee, Lease, Description [Line Items]
Leased equipment			$ 7,400,000
Finance lease term			5 years
Lease interest rate			7.40%
Lease payment per invoice rate			$ 3.32
Payments of monthly rental amount			$ 178,500

XML

Related Party Transactions/Activity (Details Narrative) - USD ($)		9 Months Ended
	Jan. 01, 2017	Feb. 29, 2020	Feb. 28, 2019
Related Party Transaction [Line Items]
Rent expense		$ 2,279,827	$ 2,185,022
Future minimum payments under operating lease 2021		81,881
Future minimum payments under operating lease 2022		73,881
Non-Cancelable Operating Lease [Member]
Related Party Transaction [Line Items]
Future minimum payments under operating lease 2021		48,000
Future minimum payments under operating lease 2022		40,000
Office Space [Member]
Related Party Transaction [Line Items]
Rent expense		$ 36,000	36,000
Lease term		90 months
Monthly [Member] | Office Space [Member]
Related Party Transaction [Line Items]
Rent expense	$ 4,000
Lease term	5 years
Yorktown's Grinding and Pelletizing Equipment [Member]
Related Party Transaction [Line Items]
Rent expense		$ 1,072,500	1,072,500
Yorktown's Grinding and Pelletizing Equipment [Member] | Weekly [Member]
Related Party Transaction [Line Items]
Payments of rental fees		27,500
TriEnda Holdings, L.L.C [Member]
Related Party Transaction [Line Items]
Related party transaction purchases		5,400	42,349
Green Plastic Pallets [Member]
Related Party Transaction [Line Items]
Revenue from goods		393,720	$ 167,400
Account receivable		$ 122,400

XML

Property, Plant and Equipment

9 Months Ended

Feb. 29, 2020

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Note 4. Property, Plant and Equipment

A summary of property, plant and equipment for Greystone is as follows:

	February 29, 2020			May 31, 2019
Production machinery and equipment	$	49,077,097		$	45,645,910
Plant buildings and land		6,869,380			6,336,855
Leasehold improvements		1,095,961			979,890
Furniture and fixtures		601,586			563,074
Right-to-use assets under operating leases		199,653			180,794
		57,843,677			53,706,523
Less: Accumulated depreciation and amortization		(24,937,955	)		(21,026,051	)
Net Property, Plant and Equipment	$	32,905,722		$	32,680,472

Production machinery and equipment includes right-to-use equipment capitalized pursuant to financing leases in the amount of $8,473,357 and $7,861,233 at February 29, 2020 and May 31, 2019, respectively. The financing leases all include an option to purchase which management anticipates exercising and, accordingly, the related equipment is being amortized over the estimated useful life using the straight-line method over 3.5 years for pallet molds, 5 and 7 year for material handling equipment and 12 years for injection molding machines.

Production machinery includes deposits on equipment in the amount of $1,680,960 at February 29, 2020 which have not been placed into service. Two plant buildings and land are owned by GRE, a variable interest entity (“VIE”), having a net book value of $2,809,645 at February 29, 2020.

Depreciation expense, including amortization expense related to right-to-use assets under financing leases, for the nine months ended February 29(28), 2020 and 2019 was $3,911,904 and $3,255,939, respectively.

XML

Deferred Revenue

9 Months Ended

Feb. 29, 2020

Revenue from Contract with Customer [Abstract]

Deferred Revenue

Note 8. Deferred Revenue

Advances from a customer pursuant to a contract for the sale of plastic pallets is recognized as deferred revenue. Revenue is recognized by Greystone as pallets are shipped to the customer(s). Customer advances totaled $5,981,710 and $3,280,500 during the nine months ended February 29(28), 2020 and 2019, respectively. Revenue recognition from customer advances during the nine months ended February 29, 2020 was $2,242,184. The unrecognized balance of deferred revenue at February 29, 2020 and May 31, 2019, was $5,940,593 and $2,201,067, respectively.

XML

Commitments

9 Months Ended

Feb. 29, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments

Note 12. Commitments

At February 29, 2020, Greystone had commitments totaling $2,867,000 toward the purchase of production equipment.

XML

Leases - Schedule of Financing Lease (Details) - USD ($)	Feb. 29, 2020	May 31, 2019
Leases [Abstract]
Present value of non-cancellable financing leases	$ 5,922,843	$ 6,754,819
Less: Current portion	(2,146,923)	(1,516,629)
Present value of non-cancellable financing leases, net of current portion	$ 3,775,920	$ 5,238,190

XML

Long-Term Debt (Details Narrative) - USD ($)				9 Months Ended
	Jul. 01, 2019	Aug. 10, 2018	Jun. 02, 2016	Feb. 29, 2020	Feb. 28, 2019	Mar. 16, 2020	Dec. 15, 2005
Debt Instrument [Line Items]
Proceeds from long-term debt				$ 672,000	$ 3,756,800
Note payable				4,297,169
Maturities long term debt current				3,525,314
Maturities long term debt year two				9,251,335
Maturities long term debt year three				2,203,898
Maturities long term debt year four				2,906,782
Maturities long term debt year five				$ 772,878
Restated Note [Member]
Debt Instrument [Line Items]
Debt instrument principal amount			$ 2,066,000
Note payable			4,541,690
Debt accrued interest			$ 2,475,690
Extended maturity date			Jan. 15, 2022
Robert B. Rosene, Jr. [Member]
Debt Instrument [Line Items]
Debt instrument interest rate							7.50%
Note payable							$ 2,066,000
IBC Loan Agreement [Member]
Debt Instrument [Line Items]
Borrowers maintain coverage ratio description				Borrowers have maintained a debt service coverage ratio of 1:25 to 1:00.
Revolving Loan [Member]
Debt Instrument [Line Items]
Debt instrument maturity date				Jan. 31, 2022
GRE and IBC [Member]
Debt Instrument [Line Items]
Debt instrument interest rate		5.50%
Debt instrument maturity date		Apr. 30, 2023
Term Loan H [Member]
Debt Instrument [Line Items]
Proceeds from long-term debt	$ 672,000
Debt instrument maturity date	Jan. 01, 2022
Note term				30 months
Debt monthly payment				$ 23,891
Term Loan A [Member]
Debt Instrument [Line Items]
Note term				2 years 6 months
Debt monthly payment				$ 78,260
Term Loan C [Member]
Debt Instrument [Line Items]
Note term				7 years
Debt monthly payment				$ 25,205
Term Loan D [Member]
Debt Instrument [Line Items]
Note term				4 years
Debt monthly payment				$ 57,469
Term Loan E [Member]
Debt Instrument [Line Items]
Note term				4 years
Debt monthly payment				$ 23,060
Term Loan F [Member]
Debt Instrument [Line Items]
Note term				5 years
Debt monthly payment				$ 67,674
Term Loan G [Member]
Debt Instrument [Line Items]
Note term				15 years
Debt monthly payment				$ 7,092
Revolving Loan [Member]
Debt Instrument [Line Items]
Debt instrument interest rate				5.50%
Revolving Loan [Member] | IBC Loan Agreement [Member]
Debt Instrument [Line Items]
Debt instrument principal amount				$ 4,000,000
Line of credit maximum borrowing capacity				4,000,000
Guaranty [Member] | IBC Loan Agreement [Member]
Debt Instrument [Line Items]
Borrowing combined amount				$ 6,500,000
Prime Rate [Member]
Debt Instrument [Line Items]
Debt instrument interest rate				4.75%
Prime Rate [Member] | Revolving Loan [Member]
Debt Instrument [Line Items]
Debt instrument interest rate				0.50%
Prime Rate [Member] | Subsequent Event [Member]
Debt Instrument [Line Items]
Debt instrument interest rate						3.25%

XML

Concentrations, Risks and Uncertainties

9 Months Ended

Feb. 29, 2020

Risks and Uncertainties [Abstract]

Concentrations, Risks and Uncertainties

Note 11. Concentrations, Risks and Uncertainties

Greystone derived approximately 87% and 85% of its total sales from four customers (three in fiscal year 2019) in fiscal years 2020 and 2019, respectively. The loss of a material amount of business from one or more of these customers could have a material adverse effect on Greystone.

Greystone purchases damaged pallets from its customers at a price based on the value of the raw material content in the pallet. A majority of these purchases, totaling $1,409,045 and $1,249,653 in fiscal years 2020 and 2019, respectively, is from one of its major customers.

COVID-19

The recent global outbreak of COVID-19 has created much uncertainty in the marketplace, and the full economic impact, duration and spread of the COVID-19 virus is uncertain and difficult to predict at this time considering the rapidly evolving landscape. To date, the demand for Greystone’s products has not been affected as Greystone’s pallets are generally used logistically by essential entities. Going forward, the major issue that Greystone has incurred is maintaining adequate work force to meet demand for pallets. While there has not been a reported case of COVID-19 at Greystone, the virus has impacted the overall workforce in the area as recruiting new employees has slowed, and a portion of the employees have opted to remain home for protection. Management is currently unable to estimate the impact of this economic event on its future financial position, results of operations and cash flows. Therefore, Greystone can give no assurances that this event will not have a material adverse effect on its financial position or results of operations. If the COVID-19 outbreak continues to evolve causing disruption to our workforce, customers and vendors, this economic event could have a material adverse effect on Greystone’s business, results of operations, financial condition and cash flows.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law providing certain economic aid packages for small business. Greystone qualifies as a small business under CARES and has submitted an application for funding under the Paycheck Protections Program.

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Inventory

9 Months Ended

Feb. 29, 2020

Inventory Disclosure [Abstract]

Inventory

Note 3. Inventory

Inventory consists of the following:

	February 29, 2020		May 31, 2019
Raw materials	$	1,919,222	$	1,295,991
Finished goods		1,956,877		1,325,000
Total inventory	$	3,876,099	$	2,620,991

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Leases

9 Months Ended

Feb. 29, 2020

Leases [Abstract]

Leases

Note 7. Leases

Financing Leases

Financing leases as of February 29, 2020 and May 31, 2019:

	February 29, 2020			May 31, 2019
Present value of non-cancellable financing leases	$	5,922,843		$	6,754,819
Less: Current portion		(2,146,923	)		(1,516,629	)
Present value of non-cancellable financing leases, net of current portion	$	3,775,920		$	5,238,190

Greystone and an unrelated private company entered into three lease agreements for certain production equipment with a total cost of approximately $7.4 million during the period from February 24, 2018 through December 21, 2018 with five-year terms and a capitalized interest rate of 7.4%. Each of the lease agreements include a bargain purchase option to acquire the production equipment at the end of the lease term. The leased equipment is principally used to produce pallets for the private company. Lease payments are made as a credit on the sales invoice at the rate of $3.32 for each pallet produced from the respective leased equipment and shipped to the private company. The estimated aggregate monthly rental payments are approximately $178,500. The rent payments can vary each month depending on the quantity of pallets produced from each machine. Due to improvements in the production process, pallet production has increased since May 31, 2019 thereby resulting in an increase in the estimated annual future rental payments and a corresponding reduction in the estimated term of the lease. The lease 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.

Effective December 28, 2018, Yorktown purchased certain production equipment from Greystone at net book value of $968,168 and entered into a lease agreement with Greystone for the equipment with a monthly rent of $27,915 for the initial thirty-nine months and $7,695 for the following twelve months and maturing December 27, 2022. The lease agreement has a $10,000 purchase option at the end of the lease.

The production equipment under the non-cancelable financing leases has a gross carrying amount of $8,473,357 at February 29, 2020. Amortization of the carrying amount of $653,942 and $775,530 was included in depreciation expense for the nine months ended February 29(28), 2020 and 2019, respectively.

Operating Leases

Greystone recognize a lease liability for each lease based on the present value of remaining minimum fixed rental payments, using a discount rate that approximates the rate of interest for a collateralized loan over a similar term. A right-of-use asset, reported in property, plant and equipment on the consolidated balance sheets, is recognized for each lease, valued at the lease liability. Minimum fixed rental payments are recognized on a straight-line basis over the life of the lease as costs and expenses on the consolidated statement of income. Variable and short-term rental payments are recognized as costs and expenses as they are incurred.

Greystone has three non-cancellable operating leases for (i) equipment with a fifty-two month term and a forty-eight month term and a discount rate of 5.40% and (ii) office space on a ninety-month term and a discount rate of 5.0%. The leases are single-term with constant monthly rental rates.

Lease Summary Information

For the nine months ended February 29(28), 2020 and 2019:

	2020			2019
Lease Expense
Financing lease expense -
Amortization of right-of-use assets	$	653,942		$	775,530
Interest on lease liabilities		355,692			236,875
Operating lease expense		63,185			36,000
Short-term lease expense		1,207,008			1,136,617
Total	$	2,279,827		$	2,185,022
Other Information
Cash paid for amounts included in the measurement of lease liabilities for finance leases -
Operating cash flows	$	355,692		$	236,875
Financing cash flows	$	1,487,489		$	644,677
Cash paid for amounts included in the measurement of lease liabilities for operating leases -
Operating cash flows	$	63,185		$	36,000
Right-of-use assets obtained in exchange for lease liabilities -
Financing leases	$	612,124		$	4,667,380
Operating leases	$	67,750		$	-
Weighted-average remaining lease term (in years) -
Financing leases		3.6			3.1
Operating leases		3.0			2.8
Weighted-average discount rate -
Financing leases		7.1	%		7.2	%
Operating leases		5.2	%		5.0	%

Future minimum lease payments under non-cancelable leases as of February 29, 2020, are approximately:

	Financing Leases		Operating Leases
Twelve months ended February 28, 2021	$	2,513,000	$	81,881
Twelve months ended February 28, 2022		2,395,000		73,881
Twelve months ended February 28, 2023		1,552,000		33,881
Twelve months ended February 29, 2024		149,000		23,154
Twelve months ended February 28, 2025		20,000		-
Total future minimum lease payments		6,629,000		212,797
Present value discount		706,157		13,144
Present value of minimum lease payments	$	5,922,843	$	199,653

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Inventory (Tables)

9 Months Ended

Feb. 29, 2020

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventory consists of the following:

	February 29, 2020		May 31, 2019
Raw materials	$	1,919,222	$	1,295,991
Finished goods		1,956,877		1,325,000
Total inventory	$	3,876,099	$	2,620,991

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Revenue and Revenue Recognition (Tables)

9 Months Ended

Feb. 29, 2020

Revenue from Contract with Customer [Abstract]

Schedule of Sale of Revenues for Customer Categories

Sales to the following categories of customers for the nine months ended February 29(28), 2020 and 2019, respectively, were as follows:

Category	2020			2019
End Users – Major Customers		87	%		85	%
End Users - Other		1	%		1	%
Distributors		12	%		14	%

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Basis of Financial Statements

9 Months Ended

Feb. 29, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Financial Statements

Note 1. Basis of Financial Statements

In the opinion of Greystone Logistics, Inc. (“Greystone”), the accompanying unaudited consolidated financial statements contain all adjustments and reclassifications, which are of a normal recurring nature, necessary to present fairly its financial position as of February 29, 2020 and the results of its operations and cash flows for the nine months and three months ended February 29(28), 2020 and 2019. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the fiscal year ended May 31, 2019 and the notes thereto included in Greystone’s Form 10-K for such period. The results of operations for the nine months and three months ended February 29(28), 2020 and 2019 are not necessarily indicative of the results to be expected for the full fiscal year.

The consolidated financial statements of Greystone include its wholly-owned subsidiaries, Greystone Manufacturing, L.L.C. (“GSM”) and Plastic Pallet Production, Inc. (“PPP”), and the variable interest entity, Greystone Real Estate, L.L.C. (“GRE”). GRE owns two buildings located in Bettendorf, Iowa which are leased to GSM. All material intercompany accounts and transactions have been eliminated in the consolidated financial statements.

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Consolidated Statements of Income (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Feb. 29, 2020	Feb. 28, 2019	Feb. 29, 2020	Feb. 28, 2019
Income Statement [Abstract]
Sales	$ 19,738,806	$ 17,224,467	$ 57,906,777	$ 50,163,707
Cost of Sales	15,622,931	15,455,920	49,279,904	44,257,438
Gross Profit	4,115,875	1,768,547	8,626,873	5,906,269
Selling, General and Administrative Expenses	1,248,196	959,288	3,438,424	2,752,029
Operating Income	2,867,679	809,259	5,188,449	3,154,240
Other Income (Expense):
Other income	4,391	2,438	9,304	7,728
Interest expense	(420,128)	(499,967)	(1,333,827)	(1,348,285)
Income before Income Taxes	2,451,942	311,730	3,863,926	1,813,683
Provision for Income Taxes	487,000	80,300	807,000	520,400
Net Income	1,964,942	231,430	3,056,926	1,293,283
Income Attributable to Non-controlling Interest	(65,411)	(64,093)	(195,717)	(187,620)
Preferred Dividends	(99,726)	(108,219)	(314,726)	(316,264)
Net Income Attributable to Common Stockholders	$ 1,799,805	$ 59,118	$ 2,546,483	$ 789,399
Income Per Share of Common Stock - Basic and Diluted	$ 0.06	$ 0.00	$ 0.09	$ 0.03
Weighted Average Shares of Common Stock Outstanding - Basic	28,361,201	28,361,201	28,361,201	28,361,201
Weighted Average Shares of Common Stock Outstanding - Diluted	28,999,499	29,012,048	29,003,201	29,009,415

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Concentrations, Risks and Uncertainties (Details Narrative)	9 Months Ended
	Feb. 29, 2020 USD ($)
Fiscal Year 2020 [Member]
Concentration Risk [Line Items]
Customer purchases amount	$ 1,409,045
Fiscal Year 2019 [Member]
Concentration Risk [Line Items]
Customer purchases amount	$ 1,249,653
Sales Revenue, Net [Member] | Four Customers [Member] | Fiscal Year 2020 [Member]
Concentration Risk [Line Items]
Concentration risk percentage	87.00%
Sales Revenue, Net [Member] | Three Customers [Member] | Fiscal Year 2019 [Member]
Concentration Risk [Line Items]
Concentration risk percentage	85.00%

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Related Party Transactions/Activity

9 Months Ended

Feb. 29, 2020

Related Party Transactions [Abstract]

Related Party Transactions/Activity

Note 5. Related Party Transactions/Activity

Yorktown Management & Financial Services, LLC

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. GSM pays weekly rental fees to Yorktown of $27,500 for use of Yorktown’s grinding equipment and pelletizing equipment. Rental fees were $1,072,500 for the each of the nine months ended February 29(28), 2020 and 2019.

Effective January 1, 2017, Greystone and Yorktown entered into a five-year lease for office space at a monthly rental of $4,000 per month. Total rent expense was $36,000 for each of the nine months ended February 29(28), 2020 and 2019. At February 29, 2020, future minimum payments under the non-cancelable operating lease for the remaining two years are $48,000 and $40,000.

TriEnda Holdings, L.L.C.

TriEnda Holdings, L.L.C. (“TriEnda”) is a manufacturer of plastic pallets, protective packing and dunnage utilizing thermoform processing for which Warren Kruger, Greystone’s President and CEO, serves TriEnda as the non-executive Chairman of the Board and is a partner in a partnership which has a majority ownership interest in TriEnda. Greystone periodically purchases material and pallets from TriEnda. Purchases for the nine months ended February 29(28), 2020 and 2019 totaled $5,400 and $42,349, respectively.

Green Plastic Pallets

Greystone sells plastic pallets to Green Plastic Pallets (“Green”), an entity that is owned by James Kruger, brother to Warren Kruger, Greystone’s President and CEO. Greystone had sales to Green of $393,720 and $167,400 for the nine months ended February 29(28), 2020 and 2019, respectively. The account receivable due from Green at February 29, 2020 was $122,400.

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Revenue and Revenue Recognition

9 Months Ended

Feb. 29, 2020

Revenue from Contract with Customer [Abstract]

Revenue and Revenue Recognition

Note 9. Revenue and Revenue Recognition

Revenue is recognized at the point in time as a good or service is transferred to a customer and the customer obtains control of that good or receives the service performed. Sales arrangements with customers are short-term in nature involving single performance obligations related to the delivery of goods and generally provide for transfer of control at the time of shipment. In limited circumstances, where acceptance of the goods is subject to approval by the customer, revenue is recognized upon approval by the customer unless, historically, there have been insignificant rejections of goods by the customer. Contract liabilities associated with sales arrangements primarily relate to deferred revenue on prepaid sales of goods. Greystone generally permits returns of product due to defects; however, product returns are historically insignificant.

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 approximately $2,187,000 and $291,000 in fiscal years 2020 and 2019, 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 nine months ended February 29(28), 2020 and 2019, respectively, were as follows:

Category	2020			2019
End Users – Major Customers		87	%		85	%
End Users - Other		1	%		1	%
Distributors		12	%		14	%

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Leases - Schedule of Future Minimum Lease Payments (Details) - USD ($)	Feb. 29, 2020	May 31, 2019
Leases [Abstract]
Twelve months ended February 28, 2021	$ 2,513,000
Twelve months ended February 28, 2022	2,395,000
Twelve months ended February 28, 2023	1,552,000
Twelve months ended February 29, 2024	149,000
Twelve months ended February 28, 2025	20,000
Total future minimum lease payments	6,629,000
Present value discount	706,157
Present value of minimum lease payments	5,922,843	$ 6,754,819
Twelve months ended February 28, 2021	81,881
Twelve months ended February 28, 2022	73,881
Twelve months ended February 28, 2023	33,881
Twelve months ended February 29, 2024	23,154
Twelve months ended February 28, 2025
Total future minimum lease payments	212,797
Present value discount	13,144
Present value of minimum lease payments	$ 199,653

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Long-Term Debt - Schedule of Long-Term Debt (Details) (Parenthetical) - USD ($)	9 Months Ended	12 Months Ended
	Feb. 29, 2020	May 31, 2019
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 [Line Items]
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 [Line Items]
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, 2024 [Member]
Debt Instrument [Line Items]
Debt instrument interest rate	0.50%	0.50%
Debt instrument maturity date	Aug. 04, 2024	Aug. 04, 2024
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, 2024 [Member] | Maximum [Member]
Debt Instrument [Line Items]
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 [Line Items]
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 [Line Items]
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 [Line Items]
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 [Line Items]
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 29, 2024 [Member]
Debt Instrument [Line Items]
Debt instrument interest rate	0.50%	0.50%
Debt instrument maturity date	Feb. 29, 2024	Feb. 29, 2024
Term Loan F Payable to International Bank of Commerce, Prime Rate of Interest Plus 0.5% But Not Less Than 5.25%, Maturing February 29, 2024 [Member] | Maximum [Member]
Debt Instrument [Line Items]
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 [Line Items]
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 [Line Items]
Debt instrument interest rate	5.25%	5.25%
Term Loan H Payable to International Bank of Commerce, Prime Rate of Interest Plus 0.5% But Not Less Than 5.25%, Maturing January 1, 2022 [Member]
Debt Instrument [Line Items]
Debt instrument interest rate	0.50%	0.50%
Debt instrument maturity date	Jan. 01, 2022	Jan. 01, 2022
Term Loan H Payable to International Bank of Commerce, Prime Rate of Interest Plus 0.5% But Not Less Than 5.25%, Maturing January 1, 2022 [Member] | Maximum [Member]
Debt Instrument [Line Items]
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 5.5%, Due January 31, 2022 [Member]
Debt Instrument [Line Items]
Debt instrument interest rate	0.50%	0.50%
Debt instrument maturity date	Jan. 31, 2022	Jan. 31, 2022
Revolving Loan Payable to International Bank of Commerce, Prime Rate of Interest Plus 0.5% But Not Less Than 5.5%, Due January 31, 2022 [Member] | Maximum [Member]
Debt Instrument [Line Items]
Debt instrument interest rate	5.50%	5.50%
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, Secured by Production Equipment [Member]
Debt Instrument [Line Items]
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, Secured by Production Equipment [Member] | Maximum [Member]
Debt Instrument [Line Items]
Debt instrument interest rate	4.95%	4.95%
Term Loan Payable by GRE to International Bank of Commerce, Interest Rate of 5.5%, Monthly Principal and Interest Payment of $27,688, Due April 30, 2023 [Member]
Debt Instrument [Line Items]
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, 2022 [Member]
Debt Instrument [Line Items]
Debt instrument interest rate	7.50%	7.50%
Debt instrument maturity date	Jan. 15, 2022	Jan. 15, 2022

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Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($)	Feb. 29, 2020	May 31, 2019
Property, Plant and Equipment [Line Items]
Property plant and equipment, gross	$ 57,843,677	$ 53,706,523
Less: Accumulated depreciation and amortization	(24,937,955)	(21,026,051)
Net Property, Plant and Equipment	32,905,722	32,680,472
Production Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property plant and equipment, gross	49,077,097	45,645,910
Plant Buildings and Land [Member]
Property, Plant and Equipment [Line Items]
Property plant and equipment, gross	6,869,380	6,336,855
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property plant and equipment, gross	1,095,961	979,890
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property plant and equipment, gross	601,586	563,074
Right-to-use Assets Under Operating Leases [Member]
Property, Plant and Equipment [Line Items]
Property plant and equipment, gross	$ 199,653	$ 180,794

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Subsequent Event

9 Months Ended

Feb. 29, 2020

Subsequent Events [Abstract]

Subsequent Event

Note 13. Subsequent Event

On March 24, 2020, Greystone entered into a loan agreement with Great Western Bank to borrow $1,508,000 under a term loan, 3.7% interest and maturing March 19, 2025, for the purchase of an injection molding machine.

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Long-Term Debt (Tables)

9 Months Ended

Feb. 29, 2020

Debt Disclosure [Abstract]

Schedule of Long-Term Debt

Debt as of February 29, 2020 and May 31, 2019 is as follows:

	February 29, 2020			May 31, 2019
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	$	2,664,063		$	3,234,947
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, 2024		1,228,697			1,399,490
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		1,293,713			1,744,235
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		756,372			927,199
Term loan F payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 5.25%, maturing February 29, 2024		2,919,586			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		848,448			876,934
Term loan H payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 5.25%, maturing January 1, 2022		499,585			-
Revolving loan payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 5.5%, due January 31, 2022		1 090,000			3,205,000
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, secured by production equipment		561,105			800,488
Term loan payable by GRE to International Bank of Commerce, interest rate of 5.5%, monthly principal and interest payment of $27,688, due April 30, 2023		2,312,223			2,461,116
Note payable to Robert Rosene, 7.5% interest, due January 15, 2022		4,297,169			4,426,631
Other		189,246			223,177
Total long-term debt		18,660,207			22,697,464
Debt issuance costs, net of amortization		(37,176	)		(37,686	)
Total debt, net of debt issuance costs		18,623,031			22,659,778
Less: Current portion of long-term debt		(3,525,314	)		(3,030,630	)
Long-term debt, net of current portion and debt issue costs	$	15,097,717		$	19,629,148

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Earnings Per Share - Schedule of Basic and Diluted Earnings Per Share (Details) - USD ($)	3 Months Ended		9 Months Ended
	Feb. 29, 2020	Feb. 28, 2019	Feb. 29, 2020	Feb. 28, 2019
Earnings Per Share [Abstract]
Net income attributable to common stockholders	$ 1,799,805	$ 59,118	$ 2,546,483	$ 789,399
Weighted-average shares outstanding - basic	28,361,201	28,361,201	28,361,201	28,361,201
Incremental shares from assumed conversion of warrants and options	638,298	650,847	642,000	648,214
Diluted shares	28,999,499	29,012,048	29,003,201	29,009,415
Income per share - Basic and Diluted	$ 0.06	$ 0.00	$ 0.09	$ 0.03

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Subsequent Event (Details Narrative) - Subsequent Event [Member] - Loan Agreement [Member] - Great Western Bank [Member]	Mar. 24, 2020 USD ($)
Loan borrowing amount	$ 1,508,000
Loan interest rate	3.70%
Loan maturity date	Mar. 19, 2025

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Consolidated Statements of Changes in Equity (Unaudited) (Parenthetical) - $ / shares	3 Months Ended
	Feb. 29, 2020	Nov. 30, 2019	Aug. 31, 2019	Feb. 28, 2019	Nov. 30, 2018	Aug. 31, 2018
Statement of Stockholders' Equity [Abstract]
Preferred dividends per share	$ 2.00	$ 2.05	$ 2.25	$ 2.16	$ 2.10	$ 2.06

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Consolidated Balance Sheets - USD ($)	Feb. 29, 2020	May 31, 2019
Current Assets:
Cash	$ 1,156,900	$ 1,255,408
Accounts receivable - Trade	5,873,647	6,320,875
Accounts receivable - Related parties	129,334	50,320
Inventory	3,876,099	2,620,991
Prepaid expenses	29,693	239,146
Total Current Assets	11,065,673	10,486,740
Property, Plant and Equipment, net	32,905,722	32,680,472
Total Assets	43,971,395	43,167,212
Current Liabilities:
Current portion of long-term debt	3,525,314	3,030,630
Current portion of financing leases	2,146,923	1,516,629
Current portion of operating leases	73,078	58,236
Accounts payable and accrued liabilities	5,061,708	6,520,721
Deferred revenue	5,940,593	2,201,067
Preferred dividends payable	99,726	112,192
Total Current Liabilities	16,847,342	13,439,475
Long-Term Debt, net of current portion and debt issue costs	15,097,717	19,629,148
Financing Leases, net of current portion	3,775,920	5,238,190
Operating Leases, net of current portion	126,575	122,558
Deferred Tax Liability	1,733,642	926,642
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	(48,562,194)	(51,108,677)
Total Greystone Stockholders' Equity	5,231,411	2,684,928
Non-controlling interest	1,158,788	1,126,271
Total Equity	6,390,199	3,811,199
Total Liabilities and Equity	$ 43,971,395	$ 43,167,212

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Revenue and Revenue Recognition (Details Narrative) - Canada and Mexico [Member] - USD ($)	9 Months Ended
	Feb. 29, 2020	Feb. 28, 2019
Fiscal Year 2020 [Member]
Disaggregation of Revenue [Line Items]
Sales revenue	$ 2,187,000
Fiscal Year 2019 [Member]
Disaggregation of Revenue [Line Items]
Sales revenue		$ 291,000

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Inventory - Schedule of Inventory (Details) - USD ($)	Feb. 29, 2020	May 31, 2019
Inventory Disclosure [Abstract]
Raw materials	$ 1,919,222	$ 1,295,991
Finished goods	1,956,877	1,325,000
Total inventory	$ 3,876,099	$ 2,620,991

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Earnings Per Share (Tables)

9 Months Ended

Feb. 29, 2020

Earnings Per Share [Abstract]

Schedule of Anti-Dilutive Instruments of Earnings Per Share

Instruments which have an anti-dilutive effect at for the nine months and three months ended February 29(28) are as follows:

	2020		2019
Preferred stock convertible into common stock		3,333,333		3,333,333

Schedule of Basic and Diluted Earnings Per Share

The following tables set forth the computation of basic and diluted earnings per share:

For the nine months ended February 29(28), 2020 and 2019:

	2020		2019
Numerator -
Net income attributable to common stockholders	$	2,546,483	$	789,399
Denominator -
Weighted-average shares outstanding - basic		28,361,201		28,361,201
Incremental shares from assumed conversion of warrants and options		642,000		648,214
Diluted shares		29,003,201		29,009,415
Income per share -
Basic and Diluted	$	0.09	$	0.03

For the three months ended February 29(28), 2020 and 2019:

	2020		2019
Numerator -
Net income attributable to common stockholders	$	1,799,805	$	59,118
Denominator -
Weighted-average shares outstanding - basic		28,361,201		28,361,201
Incremental shares from assumed conversion of warrants and options		638,298		650,847
Diluted shares		28,999,499		29,012,048
Income per share -
Basic and Diluted	$	0.06	$	0.00

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Leases (Tables)

9 Months Ended

Feb. 29, 2020

Leases [Abstract]

Schedule of Financing Lease

Financing leases as of February 29, 2020 and May 31, 2019:

	February 29, 2020			May 31, 2019
Present value of non-cancellable financing leases	$	5,922,843		$	6,754,819
Less: Current portion		(2,146,923	)		(1,516,629	)
Present value of non-cancellable financing leases, net of current portion	$	3,775,920		$	5,238,190

Schedule of Lease Cost

For the nine months ended February 29(28), 2020 and 2019:

	2020			2019
Lease Expense
Financing lease expense -
Amortization of right-of-use assets	$	653,942		$	775,530
Interest on lease liabilities		355,692			236,875
Operating lease expense		63,185			36,000
Short-term lease expense		1,207,008			1,136,617
Total	$	2,279,827		$	2,185,022
Other Information
Cash paid for amounts included in the measurement of lease liabilities for finance leases -
Operating cash flows	$	355,692		$	236,875
Financing cash flows	$	1,487,489		$	644,677
Cash paid for amounts included in the measurement of lease liabilities for operating leases -
Operating cash flows	$	63,185		$	36,000
Right-of-use assets obtained in exchange for lease liabilities -
Financing leases	$	612,124		$	4,667,380
Operating leases	$	67,750		$	-
Weighted-average remaining lease term (in years) -
Financing leases		3.6			3.1
Operating leases		3.0			2.8
Weighted-average discount rate -
Financing leases		7.1	%		7.2	%
Operating leases		5.2	%		5.0	%

Schedule of Future Minimum Lease Payments

Future minimum lease payments under non-cancelable leases as of February 29, 2020, are approximately:

	Financing Leases		Operating Leases
Twelve months ended February 28, 2021	$	2,513,000	$	81,881
Twelve months ended February 28, 2022		2,395,000		73,881
Twelve months ended February 28, 2023		1,552,000		33,881
Twelve months ended February 29, 2024		149,000		23,154
Twelve months ended February 28, 2025		20,000		-
Total future minimum lease payments		6,629,000		212,797
Present value discount		706,157		13,144
Present value of minimum lease payments	$	5,922,843	$	199,653

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Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Feb. 29, 2020	Feb. 28, 2019
Cash Flows from Operating Activities:
Net income	$ 3,056,926	$ 1,293,283
Adjustments to reconcile net income to net cash provided by operating activities -
Depreciation and amortization	3,915,774	3,334,730
Deferred tax expense	807,000	486,300
Decrease in trade accounts receivable	447,228	708,876
Decrease (Increase) in related party receivables	(79,014)	33,347
Increase in inventory	(1,255,108)	(2,062,150)
Decrease (Increase) in prepaid expenses	209,453	(23,931)
Increase (Decrease) in accounts payable and accrued liabilities	(1,278,393)	1,943,133
Increase (Decrease) in deferred revenue	3,739,526	(751,827)
Net cash provided by operating activities	9,563,392	4,961,761
Cash Flows from Investing Activities:
Purchases of property and equipment	(3,686,791)	(6,380,490)
Proceeds from sale of equipment		968,168
Net cash used in investing activities	(3,686,791)	(5,412,322)
Cash Flows from Financing Activities:
Proceeds from long-term debt	672,000	3,756,800
Principal payments on long-term debt and financing leases	(3,679,145)	(3,567,629)
Proceeds from revolving loan	2,180,000	4,321,000
Principal payments on revolving loan	(4,295,000)	(2,750,000)
Principal payments on related party note payable and financing lease	(359,212)	(233,302)
Payments for debt issuance costs	(3,360)
Dividends paid on preferred stock	(327,192)	(208,045)
Distributions paid by non-controlling interest	(163,200)	(153,000)
Net cash provided by (used in) financing activities	(5,975,109)	1,165,824
Net Increase (Decrease) in Cash	(98,508)	715,263
Cash, beginning of period	1,255,408	379,632
Cash, end of period	1,156,900	1,094,895
Non-cash Activities:
Acquisition of equipment by capital leases	612,124	4,667,380
Addition of right-to-use equipment by operating leases	67,750
Capital expenditures in accounts payable	92,945	38,445
Preferred dividend accrual	99,726	108,219
Supplemental information:
Interest paid	$ 1,327,149	$ 1,297,997

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Commitments (Details Narrative)	Feb. 29, 2020 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Purchase obligation on acquisition of equipment	$ 2,867,000

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Deferred Revenue (Details Narrative) - USD ($)	9 Months Ended
	Feb. 29, 2020	May 31, 2019	Feb. 28, 2019
Revenue from Contract with Customer [Abstract]
Customer advances	$ 5,981,710		$ 3,280,500
Revenue recognition from customer advances	2,242,184
Unrecognized deferred revenue	$ 5,940,593	$ 2,201,067

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Consolidated Balance Sheets (Parenthetical) - USD ($)	Feb. 29, 2020	May 31, 2019
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

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Long-Term Debt

9 Months Ended

Feb. 29, 2020

Debt Disclosure [Abstract]

Long-Term Debt

Note 6. Long-term Debt

Debt as of February 29, 2020 and May 31, 2019 is as follows:

	February 29, 2020			May 31, 2019
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	$	2,664,063		$	3,234,947
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, 2024		1,228,697			1,399,490
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		1,293,713			1,744,235
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		756,372			927,199
Term loan F payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 5.25%, maturing February 29, 2024		2,919,586			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		848,448			876,934
Term loan H payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 5.25%, maturing January 1, 2022		499,585			-
Revolving loan payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 5.5%, due January 31, 2022		1 090,000			3,205,000
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, secured by production equipment		561,105			800,488
Term loan payable by GRE to International Bank of Commerce, interest rate of 5.5%, monthly principal and interest payment of $27,688, due April 30, 2023		2,312,223			2,461,116
Note payable to Robert Rosene, 7.5% interest, due January 15, 2022		4,297,169			4,426,631
Other		189,246			223,177
Total long-term debt		18,660,207			22,697,464
Debt issuance costs, net of amortization		(37,176	)		(37,686	)
Total debt, net of debt issuance costs		18,623,031			22,659,778
Less: Current portion of long-term debt		(3,525,314	)		(3,030,630	)
Long-term debt, net of current portion and debt issue costs	$	15,097,717		$	19,629,148

The prime rate of interest as of February 29, 2020 was 4.75%. Effective March 16, 2020, the prime rate of interest was reduced to 3.25%.

Loan Agreement between Greystone and IBC

The Loan Agreement (“IBC Loan Agreement”), dated January 31, 2014 and as amended from time to time, among Greystone and GSM (the “Borrowers”) and International Bank of Commerce (“IBC”) provides for certain term loans and a revolver loan.

Effective July 1, 2019, the Borrowers and IBC entered into the Tenth Amendment to the IBC Loan Agreement providing for Term Loan H in the amount of $672,000 with a maturity date of January 1, 2022, for the procurement of production equipment.

The IBC term loans make equal monthly payments of principal and interest in such amounts sufficient to amortize the principal balance as follows: (i) Term Loan A over a seven-year period beginning February 29, 2016 (currently $78,260 per month), (ii) Term Loan C over a seven-year period beginning November 30, 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 $67,674 per month), (vi) Term Loan G over a fifteen-year period beginning April 30, 2019 (currently $7,092 per month) and (vii) Term Loan H over 30 months beginning August 1, 2019 (currently $23,891 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 amount which can be borrowed from time to time is dependent upon the amount of the borrowing base not to exceed $4,000,000. The Revolving Loan bears interest at the greater of the prime rate of interest plus 0.5%, or 5.50% and matures January 31, 2022. 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, among other things, requires a quarterly affirmation that the Borrowers have maintained a debt service coverage ratio of 1:25 to 1:00. As of February 29, 2020, Greystone was in compliance with this debt service coverage ratio.

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 notes 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 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 August 10, 2018, GRE and IBC entered into an amended agreement to extend the maturity of the note to April 30, 2023 and increase the interest rate to 5.5%. The note 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 an unsecured note payable at 7.5% interest.

Effective June 1, 2016, the note was restated (the “Restated Note”) to combine the outstanding principal, $2,066,000, and accrued interest, $2,475,690, into an unsecured note payable of $4,541,690 with an extended maturity date of January 15, 2022. The Restated Note provides that accrued interest is payable monthly and allows Greystone to use commercially reasonable efforts to pay such amounts as allowed by the IBC Loan Agreement against the interest accrued prior to the restatement. The balance of the note at February 29, 2020 was $4,297,169.

There is no assurance that Mr. Rosene will renew the note as of the maturity date.

Maturities

Maturities of Greystone’s long-term debt for the five years subsequent to February 29, 2020 are $3,525,314, $9,251,335, $2,203,898, $2,906,782 and $772,878.

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Fair Value of Financial Instruments

9 Months Ended

Feb. 29, 2020

Investments, All Other Investments [Abstract]

Fair Value of Financial Instruments

Note 10. Fair Value of Financial Instruments

The following methods and assumptions are used in estimating the fair-value disclosures for financial instruments:

Debt: The carrying amount of notes with floating rates of interest approximate fair value. Fixed rate notes are valued based on cash flows using estimated rates of comparable notes. The carrying amounts reported on the balance sheets approximate fair value.

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Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($)	Feb. 29, 2020	May 31, 2019
Debt Instrument [Line Items]
Total long-term debt	$ 18,660,207	$ 22,697,464
Debt issuance costs, net of amortization	(37,176)	(37,686)
Total debt, net of debt issuance costs	18,623,031	22,659,778
Less: Current portion of long-term debt	(3,525,314)	(3,030,630)
Long-term debt, net of current portion and debt issue costs	15,097,717	19,629,148
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 [Line Items]
Total long-term debt	2,664,063	3,234,947
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, 2024 [Member]
Debt Instrument [Line Items]
Total long-term debt	1,228,697	1,399,490
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 [Line Items]
Total long-term debt	1,293,713	1,744,235
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 [Line Items]
Total long-term debt	756,372	927,199
Term Loan F Payable to International Bank of Commerce, Prime Rate of Interest Plus 0.5% But Not Less Than 5.25%, Maturing February 29, 2024 [Member]
Debt Instrument [Line Items]
Total long-term debt	2,919,586	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]
Debt Instrument [Line Items]
Total long-term debt	848,448	876,934
Term Loan H Payable to International Bank of Commerce, Prime Rate of Interest Plus 0.5% But Not Less Than 5.25%, Maturing January 1, 2022 [Member]
Debt Instrument [Line Items]
Total long-term debt	499,585
Revolving Loan Payable to International Bank of Commerce, Prime Rate of Interest Plus 0.5% But Not Less Than 5.5%, Due January 31, 2022 [Member]
Debt Instrument [Line Items]
Total long-term debt	1,090,000	3,205,000
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, Secured by Production Equipment [Member]
Debt Instrument [Line Items]
Total long-term debt	561,105	800,488
Term Loan Payable by GRE to International Bank of Commerce, Interest Rate of 5.5%, Monthly Principal and Interest Payment of $27,688, Due April 30, 2023 [Member]
Debt Instrument [Line Items]
Total long-term debt	2,312,223	2,461,116
Note Payable to Robert Rosene, 7.5% Interest, Due January 15, 2022 [Member]
Debt Instrument [Line Items]
Total long-term debt	4,297,169	4,426,631
Other [Member]
Debt Instrument [Line Items]
Total long-term debt	$ 189,246	$ 223,177

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Property, Plant and Equipment (Details Narrative) - USD ($)	9 Months Ended
	Feb. 29, 2020	Feb. 28, 2019	May 31, 2019
Property, Plant and Equipment [Line Items]
Machinery and equipment	$ 8,473,357		$ 7,861,233
Carrying value of property, plant and equipment	57,843,677		$ 53,706,523
Depreciation expense	3,911,904	$ 3,255,939
Two Plant Buildings and Land [Member]
Property, Plant and Equipment [Line Items]
Carrying value of property, plant and equipment	2,809,645
Service [Member]
Property, Plant and Equipment [Line Items]
Machinery and equipment	$ 1,680,960
Pallet Molds [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	3 years 6 months
Material Handling Equipment [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	5 years
Material Handling Equipment [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	7 years
Molding Machines [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	12 years

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Leases - Schedule of Lease Cost (Details) - USD ($)	9 Months Ended
	Feb. 29, 2020	Feb. 28, 2019
Leases [Abstract]
Financing lease expense - Amortization of right-of-use assets	$ 653,942	$ 775,530
Financing lease expense - Interest on lease liabilities	355,692	236,875
Operating lease expense	63,185	36,000
Short-term lease expense	1,207,008	1,136,617
Total	2,279,827	2,185,022
Cash paid for amounts included in the measurement of lease liabilities for finance leases - Operating cash flows	355,692	236,875
Cash paid for amounts included in the measurement of lease liabilities for finance leases - Financing cash flows	1,487,489	644,677
Cash paid for amounts included in the measurement of lease liabilities for operating leases - Operating cash flows	63,185	36,000
Right-of-use assets obtained in exchange for lease liabilities - Financing leases	612,124	4,667,380
Right-of-use assets obtained in exchange for lease liabilities - Operating leases	$ 67,750
Weighted-average remaining lease term (in years) - Financing leases	3 years 7 months 6 days	3 years 1 month 6 days
Weighted-average remaining lease term (in years) - Operating leases	3 years	2 years 9 months 18 days
Weighted-average discount rate - Financing leases	7.10%	7.20%
Weighted-average discount rate - Operating leases	5.20%	5.00%