Greystone Logistics, Inc 10-K for FY2026
Greystone Logistics, Inc. (GLGI)
About this 10-K
Greystone Logistics, Inc filed this 10-K on August 31, 2026, covering the fiscal year ended May 31, 2026 (FY2026).
Headline figures
Fiscal year ended May 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $27.54M
- down 52.4% from $57.87M a year earlier
- Net loss
- $8.24M
- compared with net income of $2.35M a year earlier
- Diluted EPS
- -$0.30
- compared with $0.07 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
For the fiscal year ended
For the transition period from _______________ to______________
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Securities registered pursuant to Section 12(b) of the Act:
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Securities registered pursuant to Section 12(g) of the Act:
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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
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Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
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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.
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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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
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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.
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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.
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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
As of November 30, 2025 (the last business day of the registrant’s most recently completed second fiscal quarter), the aggregate market value of the voting common stock held by non-affiliates of the registrant, computed by (reference to the price at which the registrant’s common stock was last sold on such date, was approximately $
As of August 31, 2026, there were
DOCUMENTS INCORPORATED BY REFERENCE
None.
FORM 10-K
TABLE OF CONTENTS
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
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Disclosure Regarding Foreign Jurisdictions that Prevent Inspections |
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
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Certain Relationships and Related Transactions, and Director Independence |
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Item 1. Business.
Organization
Greystone Logistics, Inc. (“Greystone” or the “Company”) was incorporated in Delaware on February 24, 1969, under the name Permaspray Manufacturing Corporation. It subsequently changed its name to Browning Enterprises Inc. in April 1982, to Cabec Energy Corp. in June 1993, to PalWeb Corporation in April 1999 and to Greystone Logistics, Inc. in March 2005, as further described below. In December 1997, Greystone acquired all of the issued and outstanding stock of Plastic Pallet Production, Inc., a Texas corporation (“PPP”), and since that time, Greystone has primarily been engaged in the business of manufacturing and selling plastic pallets.
Effective September 8, 2003, Greystone acquired substantially all of the assets of Greystone Plastics, Inc., an Iowa corporation, through the purchase of such assets by Greystone’s newly formed, wholly-owned subsidiary, Greystone Manufacturing, L.L.C., an Oklahoma limited liability company (“GSM”). Greystone Plastics, Inc. was a manufacturer of plastic pallets used in the beverage industry.
Effective March 18, 2005, the Company caused its newly formed, wholly owned subsidiary, Greystone Logistics, Inc., an Oklahoma corporation, to be merged with and into the Company. In connection with such merger and as of the effective time of the merger, the Company amended its certificate of incorporation by changing its name from PalWeb Corporation to Greystone Logistics, Inc., pursuant to the terms of the certificate of ownership and merger filed by Greystone with the Secretary of State of Oklahoma.
Current Business
Products
Greystone’s primary business is the manufacturing of plastic pallets utilizing recycled plastic and selling the pallets through its wholly owned subsidiary, GSM. Greystone sells its pallets through a network of independent contractor distributors and direct sales by its President and sales department. As of May 31, 2026, Greystone had an aggregate in-house production capacity of approximately 225,000 pallets per month from 14 injection molding machines of which 12 are located in Bettendorf, IA and 2 located in Palmyra, MO. In addition, Greystone outsources production for pallets produced by injection molding machines as necessary to accommodate overflow. Greystone’s injection molding machine production as of May 31, 2026 consists of the following:
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37” X 32” rackable pallet, |
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40” X 32” rackable pallet, |
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37” X 37” rackable pallet, |
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44” X 56” can pallet, |
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48” X 48” rackable pallet, |
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48” X 40” rackable pallet, |
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48” X 44” rackable pallet, |
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48” X 40” nestable pallet with or without detachable runners, |
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45” X 45” nestable pallet with or without detachable bottom deck, |
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24” X 40” display pallet, |
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48” X 40” monoblock (one-piece) pallet, |
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Half-barrel keg stackable pallet, |
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Slim keg stackable pallet, |
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36” X 36” rackable pallet, |
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48” X 45” monoblock pallet, |
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48” X 45” drum pallet, and |
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48” X 40” mid duty pallet. |
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30” X 38” stand-up beer keg pallet, |
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48” X 40” one-piece, lightweight, full picture-frame pallet. |
In April 2023, Greystone opened a facility in Jasper, IN, through the purchase of equipment, including robotics, which uses an extrusion process to produce plastic pallets. The equipment was operated under contract with Jasper Rubber. During the year ended May 31, 2026, Jasper Rubber’s parent company declared bankruptcy and the equipment was moved to Greystone facilities in Iowa. Recycled plastic is used in the process consistent with Greystone’s green standards. The pallets created from this extrusion process are robotically welded, producing pallets in unusual sizes of plastic 2x4 runners with six inch plastic boards.
Greystone operates two grinding lines and four pelletizing lines that process recycled HDPE into regrind pellets (“BBs”) used as feedstock in its pallet manufacturing operations. Greystone currently grinds and pelletizes recycled plastic to customers for a fee. Greystone has two high tonnage machines in Palmyra, Missouri that have been periodically subleased for other high pressure injection products.
The principal raw materials used in manufacturing Greystone’s plastic pallets are in abundant supply, and some of these materials may be obtained from recycled plastic containers. At the present time, these materials are being purchased from local and national suppliers. If available, materials may also be purchased from international suppliers.
Pallet Industry
Pallets are devices used for moving and storing freight. A pallet is used as a base for assembling, storing, stacking, handling, and transporting goods as a unit load. A pallet is constructed to facilitate the placement of a lift truck’s forks between the levels of a platform so it may be moved easily.
Pallets are used worldwide for the transportation of goods, and they are primarily made of wood. An estimated 80-90 percent of all U.S. commerce is carried on pallets, which amounts to an estimated 2.6 billion pallets in circulation daily in the United States. The manufacture of wood pallets is estimated to consume more than 45 percent of total U.S. hardwood lumber production. “Pallets move the world,” says Dr. Marshall S. “Mark” White, an emeritus professor at Virginia Tech University and director of the William H. Sardo Jr. Pallet and Container Research Laboratory and Center for Packaging and Unit Load Design.
Industry research published in 20261 indicates that global demand for pallets across all materials was on the order of $90 billion, with continued growth expected in the mid-single digits annually, driven by e-commerce expansion, warehouse automation, and global trade volumes. Within that broader market, plastic pallets are the fastest-growing category by material. Industry researchers estimate the global plastic pallet market at approximately $9.6 billion in 2026, projecting growth at a compound annual rate of roughly 10% through 2031.
This growth is being driven by factors directly relevant to Greystone’s business: tightening restrictions on untreated wood in international trade; increased automation in warehousing and distribution, which favors the dimensional consistency that plastic pallets provide; and the continued expansion of circular-economy and sustainability initiatives that favor reusable, recyclable assets over single-use wood pallets. Rackable pallets, the category into which most Greystone’s products fall, are estimated to represent approximately 43% of the global plastic pallet market by pallet type in 2026. High-density polyethylene, the material used in Greystone’s pallets, remains the leading plastic pallet material due to its durability, chemical and moisture resistance, and suitability for repeated use in food, beverage and pharmaceutical supply chains — the primary end markets Greystone serves.
Types of Pallets
The most common size pallet is the 48” x 40” 4-way pallet, known as the GMA (Grocery Manufacturer Association) pallet, “GMA 48 x 40 Pallet,” or “GMA Block Pallet.” The GMA pallet acts as a commodity in the pallet industry, as price is often determined by availability. As wood pallets move through their life cycle from a new pallet to a used pallet, they are repaired and put back in service until they are sent to a landfill or used as wood compost.
Pallets are the primary interface between the packaged product and today’s highly automated material handling equipment. Although pallets are not the most glamorous part of the warehouse, they are important because users have expectations based on specifications and wood pallets lack critical manufacturing details that determine performance. The end user becomes frustrated when these pallets do not perform to expectation. Shipments can be damaged or rejected entirely resulting in significant product and revenue losses. This angst is aggravated when new multi-million-dollar automated systems are in use.
1 “Plastic Pallets Market Size & Share Analysis - Growth Trends & Forecasts (2026 - 2030)
Source: https://www.mordorintelligence.com/industry-reports/plastic-pallets-market
Employees
As of May 31, 2026, Greystone had full-time equivalents (“FTE’s” is a unit of measure that translates number of weekly hours worked by all employees where 40 hours per week is a single person) of approximately 82 full time employees. A temporary personnel service provides additional production personnel on an as needed basis of which there were FTE’s of approximately 16 employees as of May 31, 2026.
Marketing and Customers
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 sells to customers through contract distributors or by direct contract through its President and other employees.
Greystone’s customers generally either have a recurring need for pallets such as a distributor and an end-user who acquires pallets for a closed loop distribution system or end users who acquire pallets for internal warehouse use. The latter group of customers may or may not have a recurring demand for pallets each year. Accordingly, revenues from customers that qualify as substantial in any one year may vary. During fiscal years 2026 and 2025, Greystone derived a substantial portion of its revenue from two customers. These customers accounted for approximately 53% and 63% of total sales in fiscal years 2026 and 2025, respectively. During fiscal year 2026, the Company lost a major customer. Based on historical sales to this customer, management expects a total loss of sales of approximately $30 million or 55%. The termination of this relationship has negatively impacted the Company’s financial condition and operating results. The loss of the customer allowed Greystone to enter the pallet pooling space previously prohibited under contract. The Company continues to assess its customer concentration risk and is implementing strategic initiatives to broaden its customer base. Management is aggressively pursuing pooling opportunities in this extremely large market, and the sales team continues its efforts to expand relationships with existing customers and the new product lines added during the year.
Greystone’s recycled plastic pallets are designed to meet the respective customers’ needs and are the only pallets approved for use by these customers. There is no assurance that Greystone will retain these customers’ business at the same level, or at all. The loss of a material amount of business from one of these customers could have a material adverse effect on Greystone.
Competition
Greystone’s primary competitors are a large number of small, privately held firms that sell wood pallets in limited geographic locations. Greystone believes that it can compete with manufacturers of wood pallets by emphasizing the cost savings realized over the longer life of its plastic pallets, as well as the environmental benefits (principally elimination from landfill and recycling) of its plastic pallets as compared to wood pallets. Greystone also competes with three large and approximately ten small manufacturers of plastic pallets. Some of Greystone’s competitors may have substantially greater financial and other resources than Greystone and, therefore, may be able to commit greater resources than Greystone in the areas of product development, manufacturing and marketing. However, Greystone believes that its proprietary designs coupled with the competitive pricing of its products gives Greystone an advantage over other plastic pallet manufacturers.
Government Regulation
Although Greystone recycles approximately 60 million pounds of post-consumer plastic per year which would otherwise be destined for the landfill, business operations of Greystone are subject to existing and potential federal, state and local environmental laws and regulations pertaining to the handling and disposition of wastes (including solid and hazardous wastes) or otherwise relating to the protection of the environment. In addition, both the plastics industry and Greystone are subject to existing and potential federal, state, local and foreign legislation designed to reduce solid wastes by requiring, among other things, plastics to be degradable in landfills, minimum levels of recycled content, various recycling requirements, disposal fees and limits on the use of plastic products.
Patents and Trademarks
Greystone seeks to protect its technical advances by pursuing national and international patent protection for its products and methods when appropriate.
Management Plastic Pallet Summation
For over 30 years, both timber prices and landfill fees have increased and have compelled businesses to modify the way pallets are managed. Businesses can evaluate and improve their pallet management systems and reduce associated waste by utilizing recycled plastic pallets.
According to the U.S. Environmental Protection Agency, deforestation is a significant contributor to global carbon dioxide gas emissions. Deforestation leads to CO2 emissions because the carbon sequestered in trees is emitted into the atmosphere and not counter-balanced by re-growth of new trees. Additionally, estimates are that up to 20 percent of total pallet wood waste ends up in land fill.
ESG, an acronym for environmental, social and governance, consists of three broad categories or areas of interest of what is termed “socially responsible investors.” Within each ESG category there are various specific related concerns that may or may not be pertinent in a given situation depending on the specific investment being examined. The environmental category concerns include pollution or waste material that a company produces and factors related to climate change. The environmental circumstances surrounding deforestation imply that continued and growing interest in ESG compliance will lead companies to strongly consider the change to plastic pallets. Use of recycled plastics to produce pallets, as Greystone does, demonstrates commitment to ESG by reducing plastic disposition to landfills.
Greystone’s management believes that the gradual shifting trend from wood to 100 percent recyclable plastic pallets will continue, with the primary limiting factors being a front-end higher price and some regulatory limits to certain applications of pallet use. The savings come in recyclability and significantly longer life which lowers the cost per trip dramatically. Greystone intends to continue to conduct research on pallet design for strength and coefficient of friction, on the materials used to make the plastic pallets as required to meet market demands and to improve its existing products. Plastic pallets reduce wood waste, are hygienic, weigh less, which lowers fuel consumption and transport costs and are fully recyclable.
Our business could be affected by changes in the availability of raw materials.
Greystone uses a proprietary mix of raw materials to produce its plastic pallets. Such raw materials are generally readily available, and some may be obtained from a broad range of recycled plastic suppliers and unprocessed waste plastic. At the present time, these materials are being purchased from local and national suppliers. If available, these materials may also be purchased from international suppliers. The availability of Greystone’s raw materials could change at any time for various reasons. For example, the market demand for Greystone’s raw materials could suddenly increase, or the rate at which plastic materials are recycled could decrease, affecting both availability and price. Additionally, the laws and regulations governing the production of plastics and the recycling of plastic containers could change and, as a result, affect the supply of Greystone’s raw materials. Any interruption in the supply of raw materials or components could have a material adverse effect on Greystone. Furthermore, certain potential alternative suppliers may have pre-existing exclusive relationships with Greystone’s competitors and others that may preclude Greystone from obtaining raw materials from such suppliers.
Greystone’s business could be affected by competition and rapid technological change.
Greystone currently faces competition from many companies that produce wooden pallets at prices that are substantially lower than the prices Greystone and other companies that manufacture plastic pallets charge for their plastic pallets. It is anticipated that the plastic pallet industry will be subject to intense competition and rapid technological change. Greystone could potentially face additional competition from recycling and plastics companies, many of which have substantially greater financial and other resources than Greystone and, therefore, are able to spend more than Greystone in areas such as product development, manufacturing and marketing. Competitors may develop products that render Greystone’s products or proposed products uneconomical or result in products being commercialized that may be superior to Greystone’s products. In addition, alternatives to plastic pallets could be developed, which would have a material adverse effect on Greystone.
Historically, Greystone was dependent on a few large customers.
Greystone previously derived over 50% of its revenue from two major customers. During fiscal year 2026, the Company lost one of the major customers. The termination of this relationship has negatively impacted the Company’s financial condition and operating results. The Company continues to assess its customer concentration risk and is implementing strategic initiatives to broaden its customer base. Greystone now derives a large portion of its revenue from a broad range of customers and expects that this trend will continue in the foreseeable future. No customer currently provides over 10% of the company’s revenue. There is no assurance that Greystone will retain these customers’ business at the same level, or at all.
We may not be able to effectively protect Greystone’s patents and proprietary rights.
Greystone relies upon a combination of patents and trade secrets to protect its proprietary technology, rights and knowledge. There can be no assurance that such patent rights will not be infringed upon, that Greystone’s trade secrets will not otherwise become known to or independently developed by competitors, that non-disclosure agreements will not be breached, or that Greystone would have adequate remedies for any such infringement or breach. Litigation may be necessary to enforce Greystone’s proprietary rights or to defend Greystone against third-party claims of infringement. Such litigation could result in substantial cost to, and a diversion of effort by, Greystone and its management and may have a material adverse effect on Greystone. Greystone’s success and potential competitive advantage is dependent upon its ability to exploit the technology under these patents. There can be no assurance that Greystone will be able to exploit the technology covered by these patents or that Greystone will be able to do so exclusively.
Our business could be affected by changes or new legislation regarding environmental matters.
Greystone’s business is subject to changing federal, state and local environmental laws and regulations pertaining to the discharge of materials into the environment, the handling and disposition of waste (including solid and hazardous waste) or otherwise relating to the protection of the environment. As is the case with manufacturers in general, if a release of hazardous substances occurs on or from Greystone’s properties or any associated off-site disposal location, or if contamination from prior activities is discovered at any of Greystone’s properties, Greystone may be held liable. No assurances can be given that additional environmental issues will not require future expenditures. In addition, the plastics industry is subject to existing and potential federal, state, local and foreign legislation designed to reduce solid wastes by requiring, among other things, plastics to be degradable in landfills, minimum levels of recycled content, various recycling requirements and disposal fees and limits on the use of plastic products. Also, various consumer and special interest groups have lobbied from time to time for the implementation of these and other similar measures. Although Greystone believes that the legislation promulgated to date and such initiatives to date have not had a material adverse effect on it, there can be no assurance that any such future legislative or regulatory efforts or future initiatives would not have a material adverse effect.
Our business could be subject to potential product liability claims.
The testing, manufacturing and marketing of Greystone’s products and proposed products involve inherent risks related to product liability claims or similar legal theories that may be asserted against Greystone, some of which may cause Greystone to incur significant defense costs. Although Greystone currently maintains product liability insurance coverage that it believes is adequate, there can be no assurance that the coverage limits of its insurance will be adequate under all circumstances or that all such claims will be covered by insurance. In addition, these policies must be renewed every year. While Greystone has been able to obtain product liability insurance in the past, there can be no assurance it will be able to obtain such insurance in the future on all its existing or future products. A successful product liability claim or other judgment against Greystone in excess of its insurance coverage, or the loss of Greystone’s product liability insurance coverage could have a material adverse effect upon Greystone.
Greystone currently depends on certain key personnel.
Greystone is dependent on the experience, abilities and continued services of its current management. In particular, Warren F. Kruger, Greystone’s President, Chief Executive Officer, Chief Financial Officer, and Chairman of the Board has played a significant role in the development, management and financing of Greystone. The loss or reduction of services of Warren F. Kruger or any other key employee could have a material adverse effect on Greystone. In addition, there is no assurance that additional managerial assistance will not be required, or that Greystone will be able to attract or retain such personnel.
Greystone’s executive officers and directors control a large percentage of Greystone’s outstanding common stock which entitles them to certain voting rights, including the right to elect a majority of Greystone’s Board of Directors.
Greystone’s executive officers and directors (and their affiliates), in the aggregate, own approximately 46.69% of Greystone’s outstanding common stock and have approximately 46.69% of the voting power. Therefore, Greystone’s executive officers and directors can have significant influence with respect to the outcome of matters submitted to Greystone’s shareholders for approval (including the election and removal of directors and any merger, consolidation or sale of all or substantially all of Greystone’s assets) and to control Greystone’s management and affairs. During fiscal year 2025, Greystone redeemed all $5,000,000 of its outstanding 2003 preferred stock, and no preferred stock remained outstanding as of the end of the fiscal year. Such concentration of ownership may have the effect of delaying, deferring or preventing a change in control, impeding a merger, consolidation, takeover or other business combination or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control, which in turn could have an adverse effect on the market price of Greystone’s common stock.
Our common stock is a “penny stock” under SEC rules. It may be more difficult to sell securities classified as “penny stock.”
Our common stock is a “penny stock” under applicable SEC rules (generally defined as non-exchange traded stock with a per-share price below $5.00). Unless we successfully list our common stock on a national securities exchange, or maintain a per-share price above $5.00, these rules impose additional sales practice requirements on broker-dealers that recommend the purchase or sale of penny stocks to persons other than those who qualify as “established customers” or “accredited investors.” For example, broker-dealers must determine the appropriateness for non-qualifying persons of investments in penny stocks. Broker-dealers must also provide, prior to a transaction in a penny stock not otherwise exempt from the rules, a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, disclose the compensation of the broker-dealer and its salesperson in the transaction, furnish monthly account statements showing the market value of each penny stock held in the customer’s account, provide a special written determination that the penny stock is a suitable investment for the purchaser, and receive the purchaser’s written agreement to the transaction.
Legal remedies available to an investor in “penny stocks” may include the following:
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If a “penny stock” is sold to the investor in violation of the requirements listed above, or other federal or states securities laws, the investor may be able to cancel the purchase and receive a refund of the investment. |
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If a “penny stock” is sold to the investor in a fraudulent manner, the investor may be able to sue the persons and firms that committed the fraud for damages. |
These requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that becomes subject to the penny stock rules. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our securities, which could severely limit the market price and liquidity of our securities. These requirements may restrict the ability of broker-dealers to sell our common stock and may affect your ability to sell our common stock.
Many brokerage firms will discourage or refrain from recommending investments in penny stocks. Most institutional investors will not invest in penny stocks. In addition, many individual investors will not invest in penny stocks due, among other reasons, to the increased financial risk generally associated with these investments.
For these reasons, penny stocks may have a limited market and, consequently, limited liquidity. We can give no assurance at what time, if ever, our common stock will not be classified as a “penny stock” in the future.
Substantial future sales of shares of our common stock could cause the market price of our common stock to decline.
The market price of shares of our common stock could decline as a result of substantial sales of our common stock, particularly sales by our directors, executive officers and significant stockholders, a large number of shares of our common stock becoming available for sale or the perception in the market that holders of a large number of shares intend to sell their shares.
Greystone’s stock trades in a limited public market and is subject to price volatility. There can be no assurance that an active trading market will develop or be sustained.
There has been a limited public trading market for Greystone’s common stock and there can be no assurance that an active trading market will develop or be sustained. The trading price of Greystone’s common stock could be subject to significant fluctuations in response to variations in quarterly operating results or even mild expressions of interest on a given day. Accordingly, Greystone’s common stock should be expected to experience substantial price changes in short periods of time. Even if Greystone is performing according to its plan and there is no legitimate company-specific financial basis for this volatility, it must still be expected that substantial percentage price swings will occur in Greystone’s common stock for the foreseeable future. In addition, the limited market for Greystone’s common stock may restrict Greystone’s shareholders ability to liquidate their shares.
Greystone does not expect to declare or pay any dividends on its common stock in the foreseeable future.
Greystone has not declared or paid any dividends on its common stock. Greystone currently intends to retain future earnings to fund the development and growth of its business, to repay indebtedness and for general corporate purposes, and, therefore, does not anticipate paying any cash dividends on its common stock in the foreseeable future. Pursuant to the terms and conditions of certain loan documentation with International Bank of Commerce, Greystone is restricted in its ability to pay dividends to holders of its common stock.
Greystone may issue additional equity securities, which would lead to further dilution of Greystone’s issued and outstanding stock.
The issuance of additional common stock or securities convertible into common stock would result in further dilution of the ownership interest in Greystone held by existing shareholders. Greystone is authorized to issue, without shareholder approval, an additional 20,700,000 shares of preferred stock, $0.0001 par value per share, in one or more series, which may give other shareholders dividend, conversion, voting and liquidation rights, among other rights, which may be superior to the rights of holders of Greystone’s common stock. In addition, Greystone is authorized to issue, without shareholder approval, over 4.9 billion additional shares of its common stock and securities convertible into common stock.
We may not have sufficient insurance coverage and an interruption of our business or loss of a significant amount of property could have a material adverse effect on our financial condition and operations.
We currently do not maintain any insurance policies against loss of key personnel. We do maintain insurance coverage for business interruption as well as product liability claims. In addition, we do maintain director and officer insurance coverage. If any event were to occur which required our insurance coverage to be applicable as well as a loss of key personnel, our business, financial performance, and financial position may be materially and adversely affected.
We could become involved in claims or litigations that may result in adverse outcomes.
From time-to-time we may be involved in a variety of claims or litigations. Such proceeding may initially be viewed as immaterial but could prove to be material. Litigations are inherently unpredictable and excessive verdicts do occur. Given the inherent uncertainties in litigation, even when we can reasonably estimate the amount of possible loss or range of loss and reasonably estimable loss contingencies, the actual outcome may change in the future due to new developments or changes in approach. In addition, such claims or litigations could involve significant expense and diversion of management’s attention and resources from other matters.
Security breaches of confidential customer and employee information may adversely affect our business.
Our business requires the collection, transmission and retention of large volumes of customer and employee data, including personally identifiable information, in various information technology systems that are maintained internally and by third parties with whom we contract to provide services. The integrity and protection of that employee data is critical to us. Our customers and employees have a high expectation that we and our service providers will adequately protect their personal information. The information, security and privacy requirements imposed by governmental regulation are increasingly demanding. Our systems may not be able to satisfy these changing requirements and customer and employee expectations or may require significant additional investments or time in order to do so. Efforts to hack or breach security measures, failures of systems or software to operate as designed or intended, viruses, operator error or inadvertent releases of data all threaten our information systems and records. A breach in the security of our service providers’ information technology systems could lead to an interruption in the operation of our systems, resulting in operational inefficiencies and a loss of profits. A significant theft, loss or misappropriation of, or access to, customers’ or other proprietary data or other breach of our information technology systems could result in fines, legal claims or proceedings, including regulatory investigations and actions, or liability for failure to comply with privacy and information security laws, which could disrupt our operations, damage our reputation and expose us to claims from customers and employees, any of which could have a material adverse effect on our financial condition and results of operations.
As a result of being a public company, we are subject to additional reporting and corporate governance requirements that require additional management time, resources, and expense.
As a public company we are obligated to file with the SEC annual and quarterly information and other reports that are specified in the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We are also subject to other reporting and corporate governance requirements under the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated thereunder, all of which impose significant compliance and reporting obligations upon us and require us to incur additional expense in order to fulfill such obligations.
If we fail to maintain effective internal control over financial reporting, the price of our securities may be adversely affected.
Our internal control over financial reporting may have weaknesses and conditions that could require correction or remediation, the disclosure of which may have an adverse impact on the price of our common stock. We are required to establish and maintain appropriate internal control over financial reporting. Failure to establish those controls, or any failure of those controls once established, could adversely affect our public disclosures regarding our business, prospects, financial condition or results of operations. In addition, management’s assessment of internal control over financial reporting may identify weaknesses and conditions that need to be addressed in our internal control over financial reporting or other matters that may raise concerns for investors. Any actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting or disclosure of management’s assessment of our internal control over financial reporting may have an adverse impact on the price of our common stock.
We are required to comply with certain provisions of Section 404 of the Sarbanes-Oxley Act and if we fail to continue to comply, our business could be harmed and the price of our securities could decline.
Rules adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act require an annual assessment of internal control over financial reporting, and for certain issuers an attestation of this assessment by the issuer’s independent registered public accounting firm. The standards that must be met for management to assess the internal control over financial reporting as effective are evolving and complex, and require significant documentation, testing, and possible remediation to meet the detailed standards. We expect to incur significant expenses and to devote resources to Section 404 compliance on an ongoing basis. It is difficult for us to predict how long it will take or costly it will be to complete the assessment of the effectiveness of our internal control over financial reporting for each year and to remediate any deficiencies in our internal control over financial reporting. As a result, we may not be able to complete the assessment and remediation process on a timely basis. In the event that our Chief Executive Officer or Chief Financial Officer determines that our internal control over financial reporting is not effective as defined under Section 404, we cannot predict how regulators will react or how the market prices of our securities will be affected; however, we believe that there is a risk that investor confidence and the market value of our securities may be negatively affected.
Shares eligible for future sale may adversely affect the market.
From time to time, certain of our stockholders may be eligible to sell all or some of their shares of common stock by means of ordinary brokerage transactions in the open market pursuant to Rule 144 promulgated under the Securities Act, subject to certain limitations. In general, pursuant to Rule 144, non-affiliate stockholders may sell freely after six months, subject only to the current public information requirement. Affiliates may sell after six months, subject to the Rule 144 volume, manner of sale (for equity securities), current public information, and notice requirements. Of the approximately 27,000,000 shares of our common stock outstanding as of May 31, 2026, approximately 13,000,000 shares are tradable without restriction. Given the limited trading of our common stock, resale of even a small number of shares of our common stock pursuant to Rule 144 or an effective registration statement may adversely affect the market price of our common stock.
We do not have any long-term contracts with our suppliers or with our customers, and we do not have many written contracts with our customers, and if we cannot maintain these relationships or if we or our suppliers experience manufacturing problems or delays, our financial results will be negatively affected.
We do not have any long-term contracts with our suppliers or with our customers for our current or planned products. We also do not have many written contracts with our customers. There can be no assurance that these suppliers will continue to sell to us on prior or current terms, or at all and likewise there can also be no assurance that our customers will continue to purchase from us or that we can obtain customers to purchase our planned products. We may not be able to maintain our relationships with our suppliers and customers, or we may be unable to find alternate suppliers or customers in a timely fashion. Should this occur, our revenues and results of operations will be negatively affected. Additionally, we or our suppliers may encounter unforeseen delays or shortfalls in manufacturing, and our suppliers’ production processes may have to change to accommodate any significant future expansion of our manufacturing capacity, which may increase our or our suppliers’ manufacturing costs, delay production of our current and planned products, reduce our product gross margin and adversely impact our business. If we are unable to keep up with demand for our current and planned products by maintaining our relationships with our suppliers or successfully manufacturing and shipping our products in a timely manner, our revenue could be impaired, market acceptance for our current and planned products could be adversely affected and our customers might instead purchase our competitors’ products. In addition, developing manufacturing procedures for new products may require developing specific production processes for those products. Developing such processes could be time consuming and any unexpected difficulty in doing so can delay the introduction of a product.
An unexpected interruption in our warehousing facilities or if there is a lack of capacity at our warehousing facilities, it could reduce our sales and margins.
We store products in our warehouses that we then ship to customers or distributors. If we run out of capacity, we will not be able to store as many products and may not be able to maintain all products in an efficient manner. Additionally, if there is any unexpected interruption to our warehousing facilities, for any reason, such as loss of certifications or licenses, as a result of weather, terrorism or acts of war, fire, earthquake, or other national disaster, a work stoppage or other labor-related disruption, electrical outages, or other events, it could result in significant reductions to our sales and margins and could have a material adverse effect on our business, financial condition or results of operations.
Any interruption to our distribution channels for our products could adversely affect our sales and results of operations.
Any interruption to our distribution channels for our products for any reason, such as disruption of distribution channels as a result of weather, terrorism or acts of war, fire, earthquake, or other national disaster, a work stoppage or other labor-related disruption, could adversely affect our sales and results of operations.
There is substantial doubt about our ability to continue as a going concern. If we do not continue as a going concern, investors will lose their entire investment.
We have incurred net losses, experienced negative operating cash flows, accumulated a significant deficit, and had a working capital deficit as of May 31, 2026. We also lost a significant customer during fiscal 2026 and were in default under certain debt covenants and cross-default provisions, resulting in substantially all debt being classified as current. Our ability to continue operations depends on replacing lost revenues, generating positive cash flow, maintaining lender support, and obtaining additional financing. If we are unsuccessful in these efforts, our business, financial condition, results of operations, and common stock value could be materially adversely affected.
We remain subject to risks associated with our indebtedness despite receiving lender accommodations.
Although our lender waived prior events of default and amended our credit arrangements to provide temporary covenant relief and interest-only payment terms, our business remains subject to risks associated with indebtedness. Future operating results, cash flows, and market conditions may affect our ability to satisfy our debt obligations and comply with the terms of our lending arrangements after the temporary relief period expires. If we are unable to meet future requirements under our debt agreements, we may need to obtain additional financing, negotiate further modifications with our lender, or pursue other strategic alternatives, any of which may not be available on favorable terms.
Item 1B. Unresolved Staff Comments.
None.
Governance
Risk Management and Strategy
Through the Provider, automated security tools are used to monitor all Windows-based systems and provide defense against cyberattacks perpetrated on or against these systems and to protect internal systems from known and unknown cybersecurity threats. These security tools include:
Advanced, next-generation endpoint security software, detects attempted attacks on internal Windows-based systems and analyzes the attack providing context for said attacks to analysis teams. This data is then used to mitigate the attack and resolve the incident.
Privilege management software provides application context to reviewers to aid in the preemptive identification of malicious activities on a system. When administrative permissions are requested, details regarding the requesting process are forwarded to our provider for review and analysis before granting administrative privileges, limiting an attacker’s ability to affect and compromise systems in the environment.
The Company employs email security tools provided and managed by our Provider to protect against email-based attacks. These tools include an email security gateway and an additional automated email filtering security. These tools provide advanced, AI-powered phishing detection and remediation for all Microsoft 365 email users in the environment.
The Company utilizes various third-party service organizations for critical areas of operations, including stockholder transfer agent services, accounting software, financial reporting software and regulatory filings, and mineral management software. The Company obtains System and Organization Controls (“SOC”) reports for each vendor and ensures that internal controls are designed and implemented to adequately meet the applicable user controls identified within the SOC report for each vendor.
The Company requires all devices used by employees to be protected with the security measures listed above. It is also Company policy that all devices be used by the employee only and any use by non-employees is prohibited.
Greystone’s operations are performed at:
|
● |
Three primary buildings for a total of 126,000 square feet of manufacturing and warehouse space located on approximately 6.35 acres of land in Bettendorf, Iowa. These buildings are leased from Greystone Real Estate, L.L.C. (“GRE”) which is owned by Robert B. Rosene, Jr., a director of Greystone. The manufacturing and warehouse space is sufficiently equipped and designed to accommodate the manufacturing of plastic pallets and is also used for grinding, processing and pelletizing recycled plastic, and storage of various equipment. See discussion of transactions with Mr. Rosene under the liquidity and capital resources section. |
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● |
Two buildings owned by Greystone located within a 30-mile radius of its primary facility for an additional 75,000 square feet of warehouse space. These buildings are currently used for warehousing inventory and grinding operations. |
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● |
Facility in Palmyra, MO, housing two of Greystone’s injection molding machines. Production in this facility is outsourced to the lessor. |
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● |
Greystone previously leased a facility in Jasper, IN to house its extrusion processing machines. That equipment has since been relocated to storage at a Greystone-owned facility, and Greystone no longer occupies or pays rent for the Jasper, IN location. |
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● |
Office location in Tulsa, OK, which is approximately 3,000 sq ft, and is leased from a related party. |
We believe that these facilities are adequate for our current and near-term needs.
From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business. To the knowledge of our management, there are no legal proceedings currently pending against us which we believe would have a material effect on our business, financial position or results of operations and, to the best of our knowledge, there are no such legal proceedings contemplated or threatened.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
Greystone’s common stock is traded on the OTCQB under the symbol “GLGI.” The following table sets forth the range of high and low per share bid quotations for Greystone’s common stock during the time periods indicated. Quotations reflect inter-dealer prices, without retail mark-up, markdown or commission and may not represent actual transactions. The source of the foregoing quotations was the Financial Industry Regulatory Composite Feed or other qualified inter dealer quotation medium as provided by OTC Market Group, Inc.:
|
Quarter Ended |
High |
Low |
||||||
|
CAugust 31, 2024 |
$ | 1.58 | $ | 1.54 | ||||
|
November 30, 2024 |
$ | 1.00 | $ | 1.00 | ||||
|
February 28, 2025 |
$ | 1.01 | $ | 0.99 | ||||
|
May 31, 2025 |
$ | 1.35 | $ | 1.31 | ||||
|
August 31, 2025 |
$ | 1.35 | $ | 0.98 | ||||
|
November 30, 2025 |
$ | 1.35 | $ | 0.59 | ||||
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February 28, 2026 |
$ | 0.84 | $ | 0.28 | ||||
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May 31, 2026 |
$ | 0.36 | $ | 0.14 | ||||
The Board of Directors has approved a stock repurchase program, pursuant to which the Company is authorized to purchase up to $1 million of its common stock over 12 months. Repurchases pursuant to the stock repurchase program commenced during the second fiscal quarter of 2025 and concluded during the first fiscal quarter of 2026. There is Board consensus for capitalizing on attractive market opportunities by employing strategic stock buybacks to enhance shareholder value.
Under the stock repurchase program, the Company may repurchase shares from time to time in the open market at prevailing market prices, pursuant to one or more Rule 10b5-1 plans, or otherwise. Repurchases under the stock repurchase program will be in accordance with the terms of Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended, and will be made in accordance with applicable laws and regulations in effect from time to time. The timing, as well as the number and value of shares repurchased under the program, will be determined by the Company at its discretion and will depend on a variety of factors, including its assessment of the intrinsic value of the Company’s common stock, the market price of the Company’s common stock, general market and economic conditions, available liquidity, compliance with the Company’s debt and other agreements, applicable legal requirements, the nature of other investment opportunities available to the Company, and other considerations. The Company is not obligated to purchase any shares under the repurchase program, and the program may be suspended, modified, or discontinued at any time without prior notice. This program concluded at the end of the first quarter of fiscal year 2026.
|
Period |
Total Number of Shares Purchased |
Average Price Paid per Share |
Total Number of Shares Purchased As Part of Publicly Announced Plans |
Approximate Dollar Value of Shares that May Yet to Be purchased Under the Share Repurchased Program Remaining Shares Authorized Under the Plan |
||||||||||||
|
12/1/2024-12/30/2024 |
10,871 | $ | 1.05 | 10,871 | 988,034 | |||||||||||
|
1/1/2025-1/31/2025 |
430,725 | 1.04 | 30,725 | 955,365 | ||||||||||||
|
2/1/2025-2/28/2025 |
78,396 | 1.00 | 78,396 | 873,965 | ||||||||||||
|
3/1/2025-3/31/2025 |
38,691 | 1.03 | 38,691 | 832,209 | ||||||||||||
|
4/1/2025-4/30/2025 |
213,107 | 1.09 | 213,107 | 591,463 | ||||||||||||
|
5/1/2025-5/31/2025 |
147,334 | 1.30 | 147,334 | 393,264 | ||||||||||||
|
6/1/2025-6/30/2025 |
80,876 | 1.32 | 80,876 | 281,367 | ||||||||||||
|
7/1/2025-7/31/2025 |
- | - | - | 281,367 | ||||||||||||
|
8/1/2025-8/31/2025 |
9,000 | 1.19 | 9,000 | 270,117 | ||||||||||||
Holders
As of May 31, 2026, Greystone had approximately 959 common stockholders of record.
Dividends
Greystone paid no cash dividends to its common stockholders during the last two fiscal years and does not plan to pay any cash dividends in the near future. The loan agreement dated July 29, 2022 (the “IBC Loan Agreement”), as amended, among Greystone, GSM and International Bank of Commerce (“IBC”) prohibits Greystone from declaring or paying any dividends to its common stockholders without IBC’s prior written consent. See Note 6 to the consolidated financial statements for additional information. In addition, accrued preferred stock dividends must be paid before a dividend on common stock may be declared or paid, as set forth in the Certificate of Designation, Preferences, Rights and Limitations relating to the preferred stock. See Note 11 to the consolidated financial statements and “Liquidity and Capital Resources” in Item 7 of this Form 10-K for additional information.
Greystone paid dividends on its 2003 preferred stock in the amounts of $1,610 and $427,103 during fiscal years 2026 and 2025, respectively. As of May 31, 2026, all preferred stock has been retired.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Cautionary Statement Regarding Forward-Looking Information
This Annual Report on Form 10-K includes “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 statements concern Greystone’s plans, expectations and objectives for future operations. All statements, other than statements of historical facts, included in this Form 10-K that address activities, events or developments that Greystone expects, believes or anticipates will or may occur in the future are forward-looking statements. The words “believe,” “plan,” “intend,” “anticipate,” “estimate,” “project,” and similar expressions are intended to identify forward-looking statements. These forward-looking statements include, among others, such things as:
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• |
expansion and growth of Greystone’s business and operations; |
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|
• |
future financial performance; |
|
|
• |
future acquisitions and developments; |
|
|
• |
potential sales of products; |
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|
• |
future financing activities; and |
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|
• |
business strategy. |
These forward-looking statements are based on assumptions that Greystone believes are reasonable based on current expectations and projections about future events and industry conditions and trends affecting Greystone’s business. However, whether actual results and developments will conform to Greystone’s expectations and predictions is subject to a number of risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements, including those factors discussed under the section of this Form 10-K entitled “Risk Factors.” In addition, Greystone’s historical financial performance is not necessarily indicative of the results that may be expected in the future and Greystone believes that such comparisons cannot be relied upon as indicators of future performance.
Critical Accounting Policies and Estimates
General
Management’s discussion and analysis of financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The preparation of these consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.
Going Concern Assessment
The Company evaluates, at each reporting period, whether conditions or events raise substantial doubt about its ability to continue as a going concern within one year after the date the financial statements are issued. This evaluation requires significant management judgment and involves the consideration of numerous factors, including operating results, liquidity, working capital levels, debt maturities, compliance with debt covenants, forecasted cash flows, anticipated capital raising activities, and other financing arrangements.
Management's assessment incorporates assumptions regarding future revenues, gross margins, operating expenses, capital expenditures, availability of financing, and the timing and success of planned corrective actions. Because these assumptions are inherently uncertain and involve estimates about future events, actual results may differ materially from those projected. Changes in operating performance, delays in obtaining financing, the inability to restructure or refinance debt obligations, or other adverse developments could materially affect management's conclusions regarding the Company's ability to continue as a going concern.
Going Concern Assessment (continued)
Where substantial doubt is identified, management must also evaluate whether its plans are probable of being effectively implemented and probable of mitigating the conditions giving rise to the substantial doubt. The Company's conclusions regarding going concern represent one of the most significant judgments utilized in preparing the consolidated financial statements. The Company's going concern assessment is particularly sensitive to assumptions regarding future operating cash flows, the resolution of debt defaults, the availability of financing from both third-party and related-party sources, and the successful execution of management's liquidity improvement initiatives. Small changes in these assumptions could have a material impact on management's conclusions regarding the Company's ability to continue as a going concern.
Revenue Recognition
Revenue is recognized at the point in time 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.
Inventories
Inventory consists of finished pallets and raw materials which are stated at the lower of average cost or net realizable value, with cost being determined on the “first-in, first-out” basis of accounting. The cost of finished goods include an estimate for manufacturing overhead.
Income Taxes
Greystone accounts for income taxes under the liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the consolidated financial statements and tax bases of assets and liabilities and tax loss carryforwards using enacted tax rates in effect for the year in which the differences are expected to reverse.
Related-Party Transactions
The Company enters into transactions with certain related parties, including officers, directors, principal shareholders, and entities affiliated with such individuals. Management evaluates these arrangements to determine the appropriate accounting treatment and disclosure requirements under applicable accounting standards. The Company has historically engaged in financing and other transactions with related parties that have been significant to its operations and liquidity. Judgments regarding the economic substance, valuation, classification, and disclosure of these transactions are highly dependent upon the specific terms of each arrangement and may materially affect the presentation of the Company's consolidated financial statements and liquidity disclosures.
Significant judgment is required in identifying related parties, assessing the substance of transactions, determining whether transactions are conducted on terms comparable to those available from unrelated third parties, evaluating classification within the consolidated financial statements, and determining the adequacy of related disclosures. In addition, management must assess whether certain transactions contain financing elements or otherwise require specialized accounting consideration.
Amounts due to or from related parties, related-party financing arrangements, guarantees, leases, asset transfers, and other affiliated transactions may require management to estimate fair values or evaluate market-based assumptions. Because many related-party arrangements are negotiated outside normal market conditions, determining the appropriate accounting treatment may involve significant judgment. Changes in facts and circumstances, additional information regarding the nature of relationships, or revised assumptions regarding valuation could materially affect reported results and related disclosures.
Results of Operations
General
The consolidated financial statements include Greystone and its two wholly owned subsidiaries, Greystone Manufacturing, L.L.C. (“GSM”), and Plastic Pallet Production, Inc. (“PPP”).
Greystone’s primary business is the manufacturing of plastic pallets utilizing recycled plastic and selling the pallets through one of its wholly owned subsidiaries, GSM.
As of May 31, 2026 and 2025, Greystone had FTE’s of approximately 80 and 190 employees. Temporary personnel from a personnel service entity are utilized as needed. At any point in time, the Company can have between 16-80 temporary employees. Greystone’s in-house production capacity for its injection molding machines capable of producing pallets is approximately 225,000 plastic pallets per month, or 2,700,000 per year. Production levels will vary proportionately as a result of the pallet design, machine downtime or customer restrictions for maintaining stringent sizing on certain pallets.
Year Ended May 31, 2026 Compared to Year Ended May 31, 2025
Sales
Sales were $27,536,343 for fiscal year 2026 compared to $57,869,480 for fiscal year 2025 representing a decrease of $30,333,137, or about 52%. The reduction in sales, compared to the prior period, is primarily attributable to an approximately 60-65% decrease in demand from two of its major customers.
Cost of Sales
Cost of sales was $29,253,173 (106% of sales) and $47,819,840 (83% of sales) in fiscal years 2026 and 2025, respectively. The increase in the ratio of cost of sales to sales (the “ratio”) in fiscal year 2026 from fiscal year 2025 was the result of several factors, including a decline in production of plastic pallets. Due to Greystone’s inflexible manufacturing costs, the gross profit margin is directly affected by variations in the quantity of plastic pellets produced.
Selling, General and Administrative Expenses
Selling, general and administrative (SGA) expenses were $6,051,426 (22% of sales) for fiscal year 2026 compared to $6,478,151, (11% of sales) for fiscal year 2025, representing a decrease of $426,725. The decrease was primarily attributable to tighter expense controls implemented after the loss of a major customer.
Gain on Involuntary Conversion
The Company recognized a gain on involuntary conversion of $741,821 during the fiscal year ended May 31, 2025 related to the final settlement of insurance claims arising from a warehouse fire that occurred in February 2024 and equipment damage resulting from a prior storm event. During fiscal year 2025, the Company and its insurer finalized the value of the related inventory, building, and equipment claims, resulting in the recognition of the gain. Amounts due from the insurer related to these claims were included in other receivables as of May 31, 2025 and were fully collected during fiscal year 2026. No gain on involuntary conversion was recognized during the fiscal year ended May 31, 2026.
Other Income (Expenses)
Other income for fiscal years 2026 and 2025 included:
|
2026 |
2025 |
|||||||
|
Interest Income |
$ | 5,006 | $ | 98,361 | ||||
|
Other |
$ | (38 | ) | 63,888 | ||||
|
Total Other Income |
$ | 4,968 | $ | 162,249 | ||||
Interest expense was $911,807 in fiscal year 2026 compared to $1,018,084 in fiscal year 2025 for a decrease of $106,277. This decrease is primarily attributable to the decrease in the prime rate of interest which was 6.75% at May 31, 2026, compared to 7.50% at May 31, 2025.
Benefit (Provision) for Income Taxes
The benefit for income taxes was $439,519 in fiscal year 2026 compared to a provision of $(1,106,465) in fiscal year 2025. The effective tax rate differs from federal statutory rates due to state income taxes, charges which have no income tax benefit, changes in the valuation allowance, and provision to return adjustments primarily attributable to fixed assets depreciation and lease accounting.
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 (Loss)
Net loss was $(8,235,576) in fiscal year 2026 compared to net income of $2,351,010 in fiscal year 2025 for a decrease of $10,586,586 for the reasons discussed above.
Net Income (Loss) Attributable to Common Stockholders
After deducting preferred dividends, the net loss attributable to common stockholders was $(8,235,576), or $(0.30) per share, in fiscal year 2026 compared to $1,922,297, or $0.07 per share, in fiscal year 2025 for the reasons discussed above. As of May 31, 2025, all preferred stock has been retired so no further dividend payments are anticipated.
Liquidity and Capital Resources
General
A summary of Greystone’s cash flows for the year ended May 31, 2026, was as follows:
|
Cash used in operating activities |
$ | (1,483,020 | ) | |
|
Cash used in investing activities |
$ | (1,973,041 | ) | |
|
Cash provided by financing activities |
$ | 2,422,941 |
Contractual obligations of Greystone as of May 31, 2026, were as follows:
|
Less than |
||||||||||||||||||||
|
Total |
1 year |
2-3 years |
4-5 years |
Thereafter |
||||||||||||||||
| Revolving loan | $ | 2,200,000 | $ | 2,200,000 | $ | - | $ | - | $ | - | ||||||||||
|
Long-term debt |
$ | 10,875,914 | $ | 1,296,609 | $ | 6,467,918 | $ | 3,111,387 | $ | - | ||||||||||
|
Operating leases |
$ | 6,639,150 | $ | 609,000 | $ | 1,267,060 | $ | 1,165,270 | $ | 3,597,820 | ||||||||||
|
Finance obligation |
$ | 1,012,504 | $ | 201,670 | $ | 415,524 | $ | 395,310 | $ | - | ||||||||||
Greystone had a working capital deficit of $(7,860,055) as of May 31, 2026.
Greystone’s principal debt obligations include a $3,000,000 revolving loan, subject to borrowing base limitations, and several term notes. Greystone was not in compliance with certain financial covenants as well as cross default provisions as of May 31, 2026; therefore, all of the long term debt has been classified as current. To provide for the funding to meet Greystone’s operating activities and contractual obligations as of May 31, 2026, Greystone will have to continue to produce positive operating results or explore various options including 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 financing to meet these obligations.
A substantial portion of debt financing that Greystone received through May 31, 2026, has been provided by loans or through bank loan guarantees from the 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 either will do so.
During the third and fourth quarters for fiscal year 2025, the Company paid $5,000,000 to retire all shares of preferred stock. Prior to retiring, Greystone had 50,000 outstanding shares of cumulative 2003 Preferred Stock for a total of $5,000,000 with a preferred dividend rate at the prime rate of interest plus 3.25%. Greystone paid accrued dividends to its preferred stockholders during fiscal years 2026 and 2025 of $1,610 and $427,103, respectively. Preferred stock dividend payments to the holders of its preferred stock were allowed under the terms of the IBC Restated Loan Agreement as discussed herein under the caption “Loans from International Bank of Commerce” which allows for such payments not to exceed $1,000,000 per year. 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, additional financing or otherwise. Further, pursuant to the terms and conditions of certain loan documentation with International Bank of Commerce, as discussed herein under the caption “Loans from International Bank of Commerce,” and the terms and conditions of Greystone’s 2003 preferred stock, Greystone is restricted in its ability to pay dividends to holders of its common stock.
During the year ended May 31, 2025, the Company paid $606,737 to repurchase 519,124 shares of outstanding common stock under a plan announced by the Board on June 28, 2024. During the first quarter of fiscal 2026, covering the three-month period ended August 31, 2025, the Company repurchased an additional 89,876 shares for $123,147 under the same program. No additional activity occurred during fiscal 2026. As disclosed in the Form 8-K filed on June 28, 2024, the Board’s intent in authorizing the program was to employ strategic buybacks as a means of enhancing shareholder value.
During fiscal year 2026, the Company lost a major customer, which represented a significant portion of consolidated revenues. This change is expected to impact future sales values and will reduce operating cash flows in both the current and subsequent periods. In response, management plans to continue its efforts to expand the present market area and increase sales to its existing customers and seek new customer opportunities. Management also intends to continue tight control over all expenditures and an increased emphasis on inventory and production management. This will lead to decreased labor needs and the discontinued use of temporary labor. Management plans to make sales price adjustments in the future as necessary to correspond with current contribution margins. Management successfully negotiated with lenders to provide for interest‑only payments on certain debt obligations through December 31, 2026 as part of its liquidity management efforts. The revolving loan as well as the term loans are subject to certain financial covenants as well as cross default provisions. Greystone was not in compliance with certain financial covenants as of May 31, 2026. On July 5, 2026, the Company entered into a Fifth Amendment to its Amended and Restated Loan Agreement with International Bank of Commerce (“IBC”), pursuant to which IBC waived existing covenant violations through the amendment date and suspended testing of certain financial covenants through November 30, 2026. As of the issuance date of these consolidated financial statements, IBC had not exercised its rights to accelerate the indebtedness and the Company remained in compliance with the terms of the amended agreement. The Company continues to work with IBC regarding its future financing arrangements and covenant requirements. Management’s forecasts indicate that compliance with certain financial covenants upon the resumption of covenant testing may require additional amendments, waivers, or other accommodations from the lender. While IBC has waived specified covenant violations through the amendment date and suspended covenant testing through November 30, 2026, there can be no assurance that additional waivers or amendments, if needed, will be obtained on acceptable terms. Additionally, as of May 31, 2026, the Company is also in default related to term loans with First Interstate Bank and no waiver has been obtained. Therefore, all of the long term debt has been classified as current.
Management believes that the successful execution of its business plan and debt modifications would alleviate the substantial doubt about the Company’s ability to continue as a going concern. However, there can be no assurance that these plans will be successful. Because it is unclear whether the Company will be successful in accomplishing these objectives, there is uncertainty about the Company’s circumstances, which creates substantial doubt about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
Transactions with Warren F. Kruger and Related Entities
Yorktown Management & Financial Services, LLC (“Yorktown”), an entity wholly owned by Mr. Kruger, Greystone’s President, Chief Executive Officer, Chief Financial Officer, and Chairman of the Board owns and rents to Greystone certain grinding equipment used to grind raw materials and certain extruders for pelletizing recycled plastic into pellets for use as raw material in the manufacture of pallets. Greystone compensates Yorktown for the use of equipment as discussed below.
Rental fees. GSM pays weekly rental fees of $27,500 to Yorktown for grinding equipment and pelletizing equipment. Total rental fees were $1,430,000 and $1,457,200 for fiscal years 2026 and 2025, respectively.
Yorktown provides administrative office space for Greystone in Tulsa, Oklahoma under a 6 year lease agreement at a rental rate of $6,250 per month.
Loans from International Bank of Commerce (“IBC”)
On July 29, 2022, Greystone and GSM (collectively, the “Borrowers”) entered into an Amended and Restated Loan Agreement with International Bank of Commerce (“IBC”) (the “IBC Restated Loan Agreement”), which consolidated certain existing term loans, provided additional funding for equipment purchases and renewed the revolving loan. The IBC Restated Loan Agreement provided for term loans and a revolving loan in the aggregate principal amount of $6,000,000 (the “Revolving Loan”), subject to borrowing base limitations.
The Revolving Loan bore interest at the greater of 7.50% through February 4, 2025 and 6.50% beginning February 5, 2025, or the prime rate of interest plus 0.50%, and initially matured on February 5, 2026. On February 5, 2024, Greystone and IBC entered into a Second Amendment to the IBC Restated Loan Agreement, which, among other things, extended the maturity date of the Revolving Loan from July 29, 2024 to February 5, 2026, increased the permitted distributions to holders of preferred stock to $1,000,000 and authorized Greystone’s stock repurchase plan not to exceed $1,000,000. On January 14, 2025, Greystone and IBC entered into a Third Amendment to the IBC Restated Loan Agreement, which limited repurchases of Greystone equity instruments to an aggregate amount not exceeding $1,000,000 through the period ended May 31, 2026. Effective February 5, 2026, the Revolving Loan was modified to extend the final maturity date to May 5, 2026, with a starting interest rate of 7.25%. Effective April 28, 2026, the Revolving Loan was further modified to extend the final maturity date to July 5, 2026. As of May 31, 2026, Greystone’s available revolving loan borrowing capacity was approximately $1.3 million.
Prior to January 9, 2026, the IBC term loans required equal monthly payments of principal and interest in amounts sufficient to amortize the principal balance of the loans over their remaining lives. The monthly payments of principal and interest on the IBC term loans may vary due to changes in the prime rate of interest. Prior to January 9, 2026, aggregate payments for the IBC term loans were approximately $250,000 per month. On January 9, 2026, Greystone and IBC entered into a Fourth Amendment to the IBC Restated Loan Agreement, which adjusted the interest rate floor on the term loans to 6.25% and allowed interest-only payments through December 29, 2026. Beginning January 29, 2027 and continuing thereafter until the notes are paid in full, the aggregate payments for the IBC term loans will be approximately $245,000 per month. The final maturity date was modified to be July 29, 2030.
On July 5, 2026, subsequent to year-end, Greystone and IBC entered into a Fifth Amendment to the IBC Restated Loan Agreement for the term loans and revolving loan. Under the Fifth Amendment, IBC waived existing covenant defaults and events of default related to specified financial covenants through the amendment date and suspended testing of certain financial covenants through November 30, 2026, after which covenant compliance testing resumes. The Fifth Amendment also extended the maturity date of the Revolving Loan from July 5, 2026 to February 5, 2027 and reduced the revolving commitment to $3.5 million. In addition, the Fifth Amendment modified certain borrowing base and reporting requirements, imposed additional restrictions on capital expenditures and equity distributions, and expanded IBC’s collateral and guaranty support. All other material terms of the credit facility remain in effect.
The IBC Restated Loan Agreement is secured by a lien on substantially all assets of the Borrowers. Warren F. Kruger, the Company’s President, Chief Executive Officer, Chief Financial Officer, and Chairman of the Board, and Robert B. Rosene, Jr., a member of the Company’s Board of Directors and a member of the board for IBC, provided limited guaranties of the Borrowers’ obligations under the IBC Restated Loan Agreement. During the year ended May 31, 2025, Mr. Rosene was released from his guaranty in accordance with the IBC Restated Loan Agreement. In connection with the Fifth Amendment described above, Warren F. Kruger’s prior limited guaranty was replaced with an unlimited guaranty and the Warren F. Kruger Trust also signed a new unlimited guaranty.
Transactions with Robert B. Rosene, Jr.
Effective August 1, 2022, Greystone and GRE, a limited liability company owned by Mr. Rosene, entered into a non-cancellable ten-year lease agreement with a five-year extension for which Greystone recorded a right-of-use asset and liability based on the present value of the lease payments in the amount of $5,516,006, using a term of one hundred eighty (180) months and a discount rate of 6.00%.
On April 23, 2026, the Company entered into an agreement, approved by the Board, with GRE to sell certain commercial real estate located in Bettendorf, Iowa to GRE for proceeds of approximately $1.7 million. Simultaneously, the parties entered into a long-term lease agreement for continued use of the property The non-cancellable five year lease agreement contains no extensions and requires initial monthly payments of $16,750, escalating annually by 2%. Pursuant to the purchase agreement, the Company retained an option to repurchase the property during the stated lease term. The repurchase price is the greater of the original purchase price or the property's then-current fair value as determined in accordance with the agreement. Management evaluated the transaction under ASC 842, Leases, and concluded that the transfer of the property does not qualify for sale accounting. Accordingly, the transaction is accounted for as a financing obligation. The Company continues to recognize the underlying property within property, plant and equipment and recognizes a financial obligation for the proceeds received. Payments made under the arrangement which totaled $33,500 for the year ending May 31, 2026 were accounted for as payments of interest on the financing obligation. The effective interest rate of the financing was 12.35%.
Off-Balance Sheet Arrangements
Greystone does not have any off-balance sheet arrangements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable.
Item 8. Financial Statements and Supplementary Data.
The consolidated financial statements of Greystone are set forth on pages F-1 through F-20 inclusive, found at the end of this report.
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Warren F. Kruger, the Company’s President, Chief Executive Officer, Chief Financial Officer and Chairman of the Board have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of May 31, 2026. Based upon such evaluation, Mr. Kruger has concluded that, as of May 31, 2026, the Company’s disclosure controls and procedures were not effective as required under Rules 13a-15(e) and 15d-15(e) under the Exchange Act.
Management’s Report on Internal Control Over Financial Reporting
Greystone’s management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Exchange Act Rule 13a-15(f). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.
The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
Under the supervision and with the participation of Greystone’s management, including Greystone’s Chief Executive Officer and Chief Financial Officer, as of May 31, 2026, Greystone evaluated the effectiveness of Greystone’s internal control over financial reporting based on the framework in the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based upon this evaluation, our management has concluded that our internal control over financial reporting as of May 31, 2026 was not effective.
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has determined that a material weakness exists due for the following reasons:
|
• |
The Company has an ineffective control environment due to a lack of the necessary corporate accounting resources with SEC financial reporting experience to ensure consistent, complete and accurate financial reporting, as well as disclosure controls and procedures. The Company has outsourced the financial reporting function to a qualified accounting firm; however, the Company does not have the internal resources to maintain appropriate disclosure controls and procedures. |
|
• |
The Company has limited resources to ensure that necessary internal controls are implemented and followed throughout the Company. The limited resources result in inadequate internal controls relating to the authorization, recognition, capture, and review of transactions, facts, circumstances and events that could have a material impact on the Company’s financial reporting process. |
|
• |
The Company has not properly identified or accounted for multiple significant equity transactions in the years ended May 31, 2026 and May 31, 2025, requiring significant reclassifications to equity. |
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.
Changes in Internal Control over Financial Reporting
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
None.
Item 10. Directors, Executive Officers and Corporate Governance.
Directors, Executive Officers, Promoters and Control Persons
The following lists the directors and executive officers of Greystone. Directors of Greystone are elected at annual meetings of shareholders unless appointed by the Board of Directors to fill a vacancy upon the resignation or removal of a member or an increase in the number of members of the Board of Directors. Executive officers serve at the pleasure of the Board of Directors.
|
Name |
Position |
Term as Director Expires |
||
|
Warren F. Kruger |
President, Chief Executive Officer, Chief Financial Officer and Chairman of the Board |
2027 |
||
|
Larry J. LeBarre |
Director |
2027 |
||
|
Robert B. Rosene, Jr. |
Director |
2027 |
||
|
Drew T. Lockard |
Director |
2027 |
Warren F. Kruger, President, Chief Executive Officer, Chief Financial Officer and Chairman of the Board
Mr. Warren F. Kruger, Manager/CEO of privately held Yorktown Management & Financial Services, L.L.C., is 70 years old. Yorktown is involved in investment banking, real estate, manufacturing and energy endeavors. Mr. Kruger is the non-executive chairman of the board of directors of Kruger Family Holdings, LLC, which owns TriEnda Holdings, LLC. and PendaForm, LLC. TriEnda Holdings manufactures plastic pallets utilizing a thermoform process. Because of the different qualities between the pallets manufactured by Greystone and TriEnda, there is no direct competition between the two companies. Mr. Kruger earned a Bachelor of Business Administration degree from the University of Oklahoma and an Executive M.B.A. from Southern Methodist University. Mr. Kruger has over forty years of experience in the financial services industry. In 1980, Mr. Kruger co-founded MCM Group, Ltd., which owned and controlled United Bank Club Association, Inc. until 1996 when the firm was sold to a subsidiary of Cendant Corp. (a former NYSE company). He also owned and operated Century Ice, a manufacturer and distributor of ice products from 1996 to 1997, when Packaged Ice, Inc., acquired Century Ice in an industry rollup.
Mr. Kruger became a director of Greystone on January 4, 2002, served as President and Chief Executive Officer from January 10, 2003 to present and, most recently, was also named Chief Financial Officer beginning in the 2nd quarter of fiscal year 2025.
Mr. Kruger’s business experience and knowledge of the day-to-day operations of Greystone make him well suited to serve on Greystone’s Board of Directors.
Larry J. LeBarre, Director
Mr. LeBarre, age 70, was President and CEO of privately held Native American Marketing (“Native American”) until 2014 when the company was sold to Seminole Energy. Native American was founded by Mr. LeBarre in 2004 as an oil transportation, storage, and marketing business. Mr. LeBarre earned a Bachelor of Business Administration degree from the University of Oklahoma, became a Certified Public Accountant while working for Price Waterhouse & Co. (now PriceWaterhouseCoopers, LLP) and continued his career in the hazardous waste industry and later with Plains Resources. Mr. LeBarre is also actively involved in investment banking, real estate, and oil and gas investments.
Mr. LeBarre became a director of Greystone effective May 5, 2012. Mr. LeBarre’s business experience makes him qualified to serve as a member of Greystone’s Board of Directors.
Robert B. Rosene, Jr., Director
Mr. Rosene, age 72, is President of Patriot Auto Group, L.L.C., which owns seven auto dealerships in Oklahoma. In addition, Mr. Rosene oversees a variety of investments including oil and gas interests, commercial real estate and other investments. Mr. Rosene co-founded Summit Exploration, L.L.C., an oil and gas production company that owns oil and gas production interests in several states. Mr. Rosene has a B.A. with an emphasis in accounting from Oklahoma Baptist University.
Mr. Rosene became a director of Greystone effective June 14, 2004. Mr. Rosene’s business experience and longstanding relationship with Greystone makes him qualified to serve as a member of Greystone’s Board of Directors.
Drew T. Lockard, Director
Mr. Lockard, age 48, has been a Managing Director at Stretto since February 2019. Stretto is a bankruptcy technology firm and is responsible for developing new business and managing client relationships. Mr. Lockard is an expert in corporate restructuring, turnaround management and energy consulting. Throughout his career, he has led practice‐building efforts, guided professional advisors through high‐impact situations and managed large corporate turnarounds. Prior to joining Stretto, Mr. Lockard was a Managing Director and head of the Dallas office for Opportune, an energy consulting firm, from August 2016 until January 2019. At Opportune, he was responsible for developing new business and expanding the Opportune brand in North Texas. Prior to joining Opportune, Mr. Lockard was a Director at AlixPartners, a global management consulting firm. During his 14‐year career at AlixPartners, he was primarily focused on client delivery and building various practice groups.
Mr. Lockard holds a BBA in Management Information Systems from Southern Methodist University; an MBA from The University of Texas at Dallas; and MS in Information Technology from The University of Texas at Dallas.
Mr. Lockard became a director of Greystone effective May 12, 2022. Mr. Lockard’s business experience makes him qualified to serve as a member of Greystone’s Board of Directors.
Involvement in Certain Legal Proceedings
No director, executive officer, significant employee, or control person of the Company has been involved in any legal or regulatory proceeding listed in Item 401(f) of Regulation S-K in the past 10 years.
Board Composition
Our business and affairs are managed under the direction of our Board of Directors. The number of directors is fixed by our Board of Directors, subject to our articles of incorporation and our bylaws. Currently, our Board of Directors consists of four directors: Messrs. Kruger, LeBarre, Rosene and Lockard.
Because of the small size of Greystone’s Board of Directors, it has not established any committees. Rather, the entire Board acts as, and performs the same functions as, an audit committee, compensation committee and nominating committee.
Director Independence
The Board of Directors has undertaken a review of the independence of each director. In conducting this review, the Board considered all relevant facts and circumstances known to the Company, including any transactions, relationships, or arrangements between the Company and each director, as well as any relationships involving entities with which a director is affiliated.
Based on this review, the Board affirmatively determined that LeBarre and Lockard are independent directors. The Board concluded that neither director has any relationship that would impair his ability to exercise independent judgment in the performance of his duties as a director.
The Board determined that Mr. Kruger is not independent due to his service as the Company’s President, Chief Executive Officer, Chief Financial Officer, and Chairman of the Board. The Board determined that Mr. Rosene is not independent due to certain relationships with the Company described under “Certain Relationships and Related Transactions and Director Independence”. As of the date of this report, two of the Company’s four directors are independent directors.
Board Leadership Structure and Board’s Role in Risk Oversight
Our Board of Directors has a Chairman, Mr. Kruger. The Chairman has authority, among other things, to preside over Board meetings and set the agenda for Board meetings. Accordingly, the Chairman has substantial ability to shape the work of our Board of Directors. We believe that separation of the roles of Chairman and Chief Executive Officer is not necessary at this time to ensure appropriate oversight by the Board of Directors of our business and affairs. However, no single leadership model is right for all companies and at all times. The Board of Directors recognizes that depending on the circumstances, other leadership models, such as the appointment of a lead independent director, might be appropriate. Accordingly, the Board of Directors may periodically review its leadership structure. In addition, the Board of Directors may hold executive sessions in which only independent directors are present.
Our Board of Directors is generally responsible for the oversight of corporate risk in its review and deliberations relating to our activities. Our principal source of risk falls into two categories: financial and product commercialization. The Board oversees management of financial risks; our Board of Directors regularly reviews information regarding our cash position, liquidity and operations, as well as the risks associated with each. The Board of Directors regularly reviews plans, results and potential risks related to our product development and commercialization efforts. Our Board also oversees risk management as it relates to our compensation plans, policies and practices for all employees including executives and directors, particularly whether our compensation programs may create incentives for our employees to take excessive or inappropriate risks which could have a material adverse effect on us.
Code of Ethics
Greystone has
Procedures for Contacting the Board
The Board has established a process for stockholders and other interested parties to send written communications to the Board, the independent directors, a particular committee or to individual directors, as applicable. Such communications should be sent by U.S. mail addressed to:
Greystone Logistics, Inc. Board of Directors
c/o Greystone Logistics, Inc.
Attention: Corporate Secretary
1613 East 15th Street
Tulsa, Oklahoma 74120
The Board has instructed the Corporate Secretary to promptly forward all communications so received to the full Board, the independent directors or the individual Board member(s) specifically addressed in the communication. Comments or questions regarding our accounting, internal controls or auditing matters, our compensation and benefit programs, or the nomination of directors and other corporate governance matters will remain with the full Board.
Depending on the subject matter, the Company’s Corporate Secretary will:
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● |
Forward the communication to the director or directors to whom it is addressed; |
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● |
Attempt to handle the inquiry directly, for example, where it is a request for information about our Company or if it is a stock-related matter; or |
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● |
Not forward the communication if it is primarily commercial in nature or if it relates to a topic that is not relevant to the Board or a particular committee or is otherwise improper. |
Procedures for Recommending, Nominating and Evaluating Director Candidates
Recommending Director Candidates for Nomination by the Board
The Board will consider director candidates recommended by stockholders. A stockholder who wishes to recommend a director candidate for nomination by the Board at an annual meeting of stockholders or for vacancies of the Board that arise between annual meetings must provide the Board with sufficient written documentation to permit a determination by the Board whether such candidate meets the required and desired director selection criteria set forth in our bylaws. Such documentation and the name of the director candidate should be sent by U.S. mail to:
Greystone Logistics, Inc. Board of Directors
c/o Greystone Logistics, Inc.
Attention: Corporate Secretary
1613 East 15th Street
Tulsa, Oklahoma 74120
Since the filing of the Company’s quarterly report on Form 10-Q for the quarter ended February 28, 2026, there have been no material changes to the procedures by which security holders may recommend nominees to the Board.
Nominating Director Candidates
For director nominations to be properly brought before an annual meeting of stockholders by a stockholder, the stockholder must give timely notice in proper written form to the Secretary, consistent with the Company’s bylaws.
Evaluating Director Candidates
The Board has no formal guidelines or policy with regard to the consideration of any director candidates recommended by shareholders. The Board will consider several factors when evaluating the appropriate characteristics of candidates for service as a director. The Board initially evaluates a prospective nominee based on his or her resume and other background information that has been provided to the Board. At a minimum, director candidates must demonstrate high standards of ethics, integrity, independence, sound judgment, strength of character, and meaningful experience and skills in business or other appropriate endeavors. In addition to these minimum qualifications, the Board considers other factors it deems appropriate based on the current needs and desires of the Board, including specific business and professional experience that is relevant to the Board’s needs, including, but not limited to, Board diversity. A member of the Board will contact, for further review, those candidates who the Board believes are qualified, who may fulfill a specific Board need and who would otherwise best contribute to the Board. The Board is responsible for conducting, with the assistance of the Corporate Secretary, and subject to applicable law, any inquiries into the background and qualifications of the candidate. Based on the information the Board learns during this process, it determines which nominee(s) to submit for election. The Board uses a comparable process for evaluating all director candidates, regardless of the source of the recommendation.
The Board is authorized to use, as it deems appropriate or necessary, an outside consultant to identify and screen potential director candidates. No outside consultants were used during the fiscal year ended May 31, 2026 to identify or screen potential director candidates. The Board will reassess the qualifications of a current director, including the director’s attendance and contributions at Board meetings, prior to recommending a director for reelection.
Delinquent Section 16(a) Reports
Section 16(a) of the Securities Exchange Act of 1934 requires Greystone’s directors, officers and persons who beneficially own more than 10% of any class of Greystone’s equity securities registered under Section 12 to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of such registered securities of Greystone. Officers, directors and greater than 10% beneficial owners are required by regulation to furnish to Greystone copies of all Section 16(a) reports they file.
Based solely on review of the copies of such reports furnished to Greystone and any written representations that no other reports were required during fiscal year 2026, to Greystone’s knowledge, all Section 16(a) filing requirements applicable to its officers, directors and greater than 10% beneficial owners during fiscal year 2026 were complied with on a timely basis.
Item 11. Executive Compensation.
The following table sets forth the compensation paid to named executive officers during the fiscal years ended May 31, 2026 and 2025:
Summary Compensation Table
|
Name and |
Fiscal Year |
Salary |
Bonus |
Option |
Nonqualified Deferred Compensation Earnings |
All Other Compensation |
Total |
|||||||||||||||||||
|
Warren F. Kruger, |
2026 |
$ | 600,000 | $ | - | $ | - | $ | - | $ | 216,150 | (1) | $ | 816,150 | ||||||||||||
| President and Chief Executive Officer, Chief Financial Officer, and Chairman of the Board |
2025 |
$ | 369,231 | $ | 254,314 | $ | - | $ | - | $ | 37,500 | $ | 661,045 | |||||||||||||
|
(1): |
This includes $25,000 in board fees and $191,250 paid to Warren F. Kruger in addition to his base salary not paid pursuant to a separate consulting or other services arrangement |
Outstanding Equity Awards at Fiscal Year End
Directors’ Compensation
Greystone compensates members of its Board of Directors at a rate of $12,500 per meeting attended. Due to liquidity constraints, only two board meeting payments were made during fiscal 2026. Thereafter, director compensation was suspended, and no amounts related to meetings attended after the suspension are payable to the directors. The following table sets forth compensation paid, earned or awarded during the fiscal year ended May 31, 2026 to each of our directors, whose compensation is included above in the “2026 Summary Compensation Table.”
|
Name |
Fees Earned or Paid in Cash |
Stock Awards |
All Other Compensation |
Total |
||||||||||||
|
Larry J. LeBarre |
$ | 25,000 | $ | - | $ | - | $ | 25,000 | ||||||||
|
Robert B. Rosene, Jr. |
$ | 25,000 | $ | - | $ | - | $ | 25,000 | ||||||||
|
Drew T. Lockard |
$ | 25,000 | $ | - | $ | - | $ | 25,000 | ||||||||
Because the Board of Directors consists of four persons of which three are outside directors, the Board has not considered it necessary to create a compensation committee. All of Greystone’s directors participate in determining compensation for officers with Mr. Kruger abstaining from any discussions concerning his compensation.
Compensation Program as it Relates to Risk
We have reviewed our compensation policies and practices for both executives and non-executives as they relate to risk and have determined that at this time they are not reasonably likely to have a material adverse effect on us.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Securities Authorized for Issuance under Equity Compensation Plans
None.
Security Ownership of Certain Beneficial Owners and Management
As of May 31, 2026, Greystone had 27,270,701 shares of its common stock and 0 shares of its 2003 preferred stock outstanding.
The following table sets forth certain information regarding the shares of Greystone’s common stock beneficially owned as of May 31, 2026, by (i) each person known by Greystone to own beneficially 5% or more of Greystone’s outstanding common stock, (ii) each of Greystone’s directors and named officers, and (iii) all of Greystone’s directors and executive officers as a group:
|
Name and Address of |
Shares of Common Stock Beneficially Owned(1) |
Percent of |
Shares of Senior Preferred Stock Beneficially Owned(3) |
Percent of Class |
Voting Shares Beneficially Owned(4) |
Percent of Total Voting Power |
||||||||||||||||||
|
Warren F. Kruger |
8,900,805 | (5) | 32.05 | % | - | 0 | % | 8,900,805 | 32.05 | % | ||||||||||||||
|
Robert B. Rosene, Jr. |
3,469,051 | (6) | 12.49 | % | - | 0 | % | 3,469,051 | 12.49 | % | ||||||||||||||
|
Larry J. LeBarre |
520,093 | 1.87 | % | - | 0 | % | 520,093 | 1.87 | % | |||||||||||||||
|
Drew T. Lockard |
76,600 | .28 | % | - | 0 | % | 76,600 | * | ||||||||||||||||
|
All Directors & Officers as a Group (4 persons) |
12,966,549 | (7) | 46.69 | % | - | 0 | % | 12,966,549 | 46.69 | % | ||||||||||||||
|
Other 5% Stockholders |
||||||||||||||||||||||||
|
None |
||||||||||||||||||||||||
* Under 1%.
|
(1) |
The number of shares beneficially owned by each holder is calculated in accordance with the rules of the Commission, which provide that each holder shall be deemed to be a beneficial owner of a security if that holder has the right to acquire beneficial ownership of the security within 60 days through options, warrants or the conversion of another security; provided, however, if such holder acquires any such rights in connection with or as a participant in any transaction with the effect of changing or influencing control of the issuer, then immediately upon such acquisition, the holder will be deemed to be the beneficial owner of the securities. The number the shares of common stock beneficially owned by each holder includes common stock directly owned by such holder and the number of shares of common stock such holder has the right to acquire upon the conversion of the Senior Preferred Stock and/or upon the exercise of certain options or warrants. |
|
(2) |
The percentage ownership for each holder is calculated in accordance with the rules of the Commission, which provide that any shares a holder is deemed to beneficially own by virtue of having a right to acquire shares upon the conversion of warrants, options or other rights, or upon the conversion of preferred stock or other rights are considered outstanding solely for purposes of calculating such holder’s percentage ownership. |
|
(3) |
Each share of Senior Preferred Stock is convertible into approximately 66 2/3 shares of Greystone’s common stock. |
|
(4) |
Total “Voting Shares” is defined as the number of shares of common stock outstanding, each share of which receives one vote, or 27,270,701 Voting Shares total. The number of Voting Shares reported by each reporting person above represents the number of shares of common stock beneficially owned by such reporting person plus the number of votes afforded to such reporting person as a holder of shares of Senior Preferred Stock, as applicable. |
|
(5) |
The total includes: (i) 8,631,805, shares of common stock beneficially owned directly by Mr. Kruger; (ii) 19,000 shares held of record by Yorktown; (iii) 250,000 shares of common stock that Mr. Kruger may acquire through the exercise of a warrant. |
|
(6) |
The total includes: (i) 3,219,051 shares of common stock beneficially owned directly by Mr. Rosene; 250,000 shares of common stock that Mr. Rosene may acquire through the exercise of a warrant. |
|
(7) |
The total includes: (i) 12,466,549 shares of common stock; (ii) 250,000 shares of common stock that Mr. Kruger has the right to acquire by exercising a warrant; (iii) 250,000 shares of common stock that Mr. Rosene has the right to acquire by exercising a warrant. |
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Transactions with Related Persons
General
For information regarding loans from IBC and Kruger’s and Rosene’s relationship thereto, see “Loan from International Bank of Commerce (“IBC”) in Item 7 of this Form 10-K.
Transactions with Warren F. Kruger, President, Chief Executive Officer, Chief Financial Officer and Chairman of the Board
Yorktown Management & Financial Services, LLC (“Yorktown”), an entity wholly owned by Greystone’s CEO and President, owns and rents to Greystone (1) grinding equipment used to grind raw materials for Greystone’s pallet production and (2) extruders for pelletizing recycled plastic into pellets for resale and for use as raw material for manufacturing pallets. Greystone compensates Yorktown for the use of equipment as discussed below. GSM pays weekly rental fees of $27,500 to Yorktown for grinding equipment and pelletizing equipment. Total rental fees of $1,430,000 and $1,457,200 for fiscal years 2026 and 2025, respectively. Yorktown provides administrative office space for Greystone in Tulsa, Oklahoma under a six-year lease at a rental rate of $6,250 per month. Total rent expense was $75,000 for fiscal years 2026 and 2025, respectively.
Transactions with TriEnda Holdings, L.L.C.
TriEnda Holdings, L.L.C. (“TriEnda”) is a manufacturer of plastic pallets, protective packaging and dunnage utilizing thermoform processing. Warren F. Kruger, is the non-executive chairman of the board of directors of Kruger Family Holdings, LLC (“KBH”), which owns a majority interest in TriEnda. Greystone may purchase pallets from TriEnda for resale or sell Greystone pallets to TriEnda. During fiscal year 2026, Greystone began a service of disassembling and grinding of certain items for TriEnda. During fiscal year 2026 and 2025, Greystone purchases from TriEnda totaled $43,135 and $81,970, respectively and sales to TriEnda totaled $1,374,096 and $517,194, respectively. As of May 31, 2026 and 2025, TriEnda owed $928,482 and $617,538, respectively, to Greystone.
Durakon Industries, Inc. is a Mexican subsidiary of Trienda Holdings, LLC with which the Company also does business. Sales to Durakon totaled $62,640 and $37,320 for the years ended May 31, 2026 and 2025, respectively. As of May 31, 2026 and 2025, Durakon owed $0 and $37,320, respectively to Greystone.
Transactions with Green Plastic Pallets
Green Plastic Pallets (“Green”) is an entity owned by James Kruger, a brother to Warren F. Kruger. Green purchased pallets from Greystone totaling $319,005 and $367,965 in fiscal years 2026 and 2025, respectively. As of May 31, 2026 and 2025, Green owed $100,980 and $273,345, respectively, to Greystone.
Transactions with Robert B. Rosene, Jr., Director
See transactions described under the “Liquidity and Capital Resources” section of Item 7 of this Form 10-K.
Director Independence
Information regarding director independence is included under Item 10, “Directors, Executive Officers and Corporate Governance.”
Item 14. Principal Accountant Fees and Services.
The following is a summary of the fees billed to Greystone by HoganTaylor LLP, Greystone’s independent registered public accounting firm, for professional services rendered for the fiscal years ended May 31, 2026 and May 31, 2025:
|
Fee Category |
Fiscal 2026 Fees |
Fiscal 2025 Fees |
||||||
|
Audit Fees(1) |
$ | 202,000 | $ | 209,612 | ||||
|
Audit-Related Fees |
18,900 | 27,500 | ||||||
|
Tax Fees |
- | - | ||||||
|
All Other Fees |
- | - | ||||||
|
Total Fees |
$ | 220,900 | $ | 237,112 | ||||
(1) Audit Fees consist of aggregate fees billed for professional services rendered for the audit of Greystone’s annual consolidated financial statements and review of the interim consolidated financial statements included in quarterly reports or services that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements during the fiscal years ended May 31, 2026 and May 31, 2025, respectively.
The entire Board of Directors of Greystone is responsible for the appointment, compensation and oversight of the work of the independent registered public accounting firm and approves in advance any services to be performed by the independent registered public accounting firm, whether audit-related or not. The entire Board of Directors reviews each proposed engagement to determine whether the provision of services is compatible with maintaining the independence of the independent registered public accounting firm. All of the fees shown above were pre-approved by the entire Board of Directors.
Item 15. Exhibits, Financial Statement Schedules.
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(1) |
Consolidated Financial Statements |
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The financial statements required under this item are included in Item 8 of Part II. |
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(2) |
Schedules |
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None. |
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(3) |
Exhibits |
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Exhibit No. |
Description |
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2.1 |
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2.2 |
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3.1 |
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3.2 |
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4.1 |
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4.2 |
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4.3 |
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10.1 |
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10.2 |
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10.3 |
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10.4 |
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10.5 |
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10.6 |
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10.7 |
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10.8 |
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10.9 |
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10.10 |
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21.1* |
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24.1 |
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31.1* |
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32.1** |
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101 INS* |
Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets at May 31, 2026 and 2025, (ii) the Consolidated Statements of Operations for the years ended May 31, 2026 and 2025, (iii) the Consolidated Statements of Changes in Equity for the years ended May 31, 2026 and 2025, (iv) the Consolidated Statements of Cash Flows for the years ended May 31, 2026 and 2025, and (v) the Notes to Consolidated Financial Statements. |
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101 SCH* |
Inline XBRL Taxonomy Extension Schema Document |
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101 CAL* |
Inline XBRL Taxonomy Extension Calculation Linkbase |
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101 DEF* |
Inline XBRL Taxonomy Extension Definition Linkbase |
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101 LAB* |
Inline XBRL Taxonomy Extension Labels Linkbase |
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101 PRE* |
Inline XBRL Taxonomy Extension Presentation Linkbase |
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104* |
Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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* |
Filed herewith. |
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** |
Furnished herewith. |
None.
Pursuant to the requirements of Section 13 or 15(d) 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. |
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(Registrant) |
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Date: August 31, 2026 |
/s/ Warren F. Kruger |
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Warren F. Kruger |
|||
| President, Chief Executive Officer, Chief Financial Officer, and Chairman of the Board | |||
Each person whose signature appears below hereby appoints Warren F. Kruger, as attorney-in-fact with full power of substitution to execute in the name and on behalf of the registrant and each such person, individually and in each capacity stated below, one or more amendments to the annual report on Form 10-K, which amendments may make such changes in the report as the attorney-in-fact acting deems appropriate and to file any such amendment to the annual report on Form 10-K with the Securities and Exchange Commission. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
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Date: August 31, 2026 |
/s/ Warren F. Kruger |
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Warren F. Kruger |
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President, Chief Executive Officer, Chief Financial Officer, and Chairman of the Board |
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(Principal Executive Officer) |
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Date: August 31, 2026 |
/s/ Robert B. Rosene, Jr. |
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Robert B. Rosene, Jr., Director |
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Date: August 31, 2026 |
/s/ Larry J. LeBarre |
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Larry J. LeBarre, Director |
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Date: August 31, 2026 |
/s/ Drew T. Lockard |
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Drew T. Lockard, Director |
||
Index to Financial Statements
CONSOLIDATED FINANCIAL STATEMENTS OF GREYSTONE LOGISTICS, INC.
|
Report of Independent Registered Public Accounting Firm (PCAOB ID |
|
| ● | F-7 | ||
| ● | F-10 | ||
| ● | F-11 | ||
| ● | F-11 | ||
| ● | F-12 | ||
| ● | F-13 | ||
| ● | F-15 | ||
| ● | F-17 | ||
| ● | F-18 | ||
| ● | F-19 | ||
| ● | F-20 | ||
| ● | F-20 | ||
| ● | F-21 | ||
| ● | F-21 | ||
| ● | F-21 | ||
| ● | F-21 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Greystone Logistics, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Greystone Logistics, Inc. and its subsidiaries (the Company) as of May 31, 2026 and 2025, and the related consolidated statements of operations, changes in equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of May 31, 2026 and 2025, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has insufficient revenues, a working capital deficiency and accumulated deficit that raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging subjective, or complex judgements. We determined that there are no critical audit matters.
/s/
We have served as the Company’s auditor since 2007.
August 31, 2026
|
Consolidated Balance Sheets |
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May 31, |
May 31, |
|||||||
|
2026 |
2025 |
|||||||
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Assets |
||||||||
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Current Assets: |
||||||||
|
Cash |
$ | $ | ||||||
|
Accounts receivable - |
||||||||
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Trade |
||||||||
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Related parties |
||||||||
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Inventory |
||||||||
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Prepaid expenses |
||||||||
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Total Current Assets |
||||||||
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Property, Plant and Equipment, net |
||||||||
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Right-to-use Assets |
||||||||
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Total Assets |
$ | $ | ||||||
|
Liabilities and Equity |
||||||||
|
Current Liabilities: |
||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
|
Current portion of revolving loan |
||||||||
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Current portion of long-term debt |
||||||||
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Current portion of financing leases |
||||||||
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Current portion of operating leases |
||||||||
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Deferred revenue |
||||||||
|
Preferred dividends payable |
||||||||
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Total Current Liabilities |
||||||||
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Long-Term Debt, net of current portion |
||||||||
| Finance Obligation | ||||||||
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Operating Leases, net of current portion |
||||||||
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Deferred Tax Liability |
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Total Liabilities |
||||||||
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Commitments and Contingencies (Note 16) |
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|
||||||
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Equity: |
||||||||
| Preferred stock, $ |
||||||||
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Common stock, $ |
||||||||
|
Treasury stock, at cost, |
( |
) | ||||||
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Additional paid-in capital |
||||||||
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Accumulated deficit |
( |
) | ( |
) | ||||
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Total Equity |
||||||||
|
Total Liabilities and Equity |
$ | $ | ||||||
|
The accompanying notes are an integral part of these consolidated financial statements. |
|
Consolidated Statements of Operations |
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For the Years Ended May 31, |
||||||||
|
2026 |
2025 |
|||||||
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Sales |
$ | $ | ||||||
|
Cost of sales |
||||||||
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Gross profit (loss) |
( |
) | ||||||
|
Selling, general and administrative expenses |
||||||||
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Gain on involuntary conversion (see Note 5) |
( |
) | ||||||
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Operating income (loss) |
( |
) | ||||||
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Other income (expense): |
||||||||
|
Other income |
||||||||
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Interest expense |
( |
) | ( |
) | ||||
|
Income (loss) before income taxes |
( |
) | ||||||
|
Benefit (provision) for income taxes |
( |
) | ||||||
|
Net income (loss) |
$ | ( |
) | $ | ||||
|
Preferred dividends |
( |
) | ||||||
|
Net income (loss) attributable to common stockholders |
$ | ( |
) | $ | ||||
|
Net income (loss) per share of common stock - |
||||||||
|
Basic and diluted |
$ | ( |
) | $ | ||||
|
Weighted average shares of common stock outstanding |
||||||||
|
Basic |
||||||||
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Diluted |
||||||||
|
The accompanying notes are an integral part of these consolidated financial statements. |
|
Consolidated Statements of Changes in Equity |
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For the Years Ended May 31, 2026 and 2025 |
|
|
|
Preferred Stock |
Common Stock |
Treasury Stock |
Additional |
Accumulated |
Stockholders’ |
|||||||||||||||||||||||||||||||
|
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Paid-In Capital |
Deficit |
Equity |
||||||||||||||||||||||||||||
|
Balances, May 31, 2024 |
$ | $ | $ | $ | $ | ( |
) | $ | ||||||||||||||||||||||||||||
|
Preferred dividends, $ |
- | - | - | ( |
) | ( |
) | |||||||||||||||||||||||||||||
|
Retirement of preferred stock |
( |
) | ( |
) | - | - | - | - | ( |
) | ( |
) | ||||||||||||||||||||||||
|
Repurchase of common stock |
- | - | - | - | ( |
) | - | ( |
) | |||||||||||||||||||||||||||
|
Repurchase and retirement of common stock |
( |
) | ( |
) | - | - | ( |
) | - | ( |
) | |||||||||||||||||||||||||
|
Net income |
- | - | - | |||||||||||||||||||||||||||||||||
|
Balances, May 31, 2025 |
$ | $ | $ | ( |
) | $ | $ | ( |
) | $ | ||||||||||||||||||||||||||
|
Repurchase of common stock |
- | - | - | - | ( |
) | ( |
) | ||||||||||||||||||||||||||||
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Retirement of treasury shares |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||
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Net loss |
- | - | - | ( |
) | ( |
) | |||||||||||||||||||||||||||||
|
Balances, May 31, 2026 |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||||||||||||||
|
The accompanying notes are an integral part of these consolidated financial statements. |
|
Consolidated Statements of Cash Flows |
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For the Years Ended May 31, |
||||||||
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2026 |
2025 |
|||||||
|
Cash Flows from Operating Activities: |
||||||||
|
Net income (loss) |
$ | ( |
) | $ | ||||
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities - |
||||||||
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Gain on involuntary conversion |
( |
) | ||||||
|
(Gain) loss on disposition of assets |
( |
) | ||||||
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Depreciation and amortization |
||||||||
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Change in deferred taxes |
( |
) | ||||||
|
Effects of changes in operating assets and liabilities: |
||||||||
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Trade accounts receivable |
||||||||
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Other accounts receivable |
||||||||
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Related parties receivable |
( |
) | ( |
) | ||||
|
Inventory |
||||||||
|
Operating leases |
||||||||
|
Prepaid expenses |
( |
) | ||||||
|
Accounts payable and accrued expenses |
( |
) | ||||||
|
Deferred revenue |
( |
) | ||||||
|
Net cash (used in) provided by operating activities |
( |
) | ||||||
|
Cash Flows from Investing Activities: |
||||||||
|
Purchase of property, plant and equipment |
( |
) | ( |
) | ||||
|
Proceeds from disposal of property, plant and equipment |
||||||||
|
Net cash used in investing activities |
( |
) | ( |
) | ||||
|
Cash Flows from Financing Activities: |
||||||||
|
Principal payments on long-term debt and financing leases |
( |
) | ( |
) | ||||
|
Proceeds from finance obligation |
||||||||
|
Advances under revolving loan |
||||||||
|
Payments for retirement of preferred stock |
( |
) | ||||||
|
Repurchase of common stock |
( |
) | ( |
) | ||||
|
Repurchase and retirement of common stock |
( |
) | ||||||
|
Dividends paid on preferred stock |
( |
) | ( |
) | ||||
|
Net cash provided by (used in) financing activities |
( |
) | ||||||
|
Net Decrease in Cash |
( |
) | ( |
) | ||||
|
Cash, beginning of period |
||||||||
|
Cash, end of period |
$ | $ | ||||||
|
The accompanying notes are an integral part of these consolidated financial statements. |
Notes to Consolidated Financial Statements
May 31, 2026 and 2025
Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Greystone Logistics, Inc. (“Greystone”), through its two wholly owned subsidiaries, Greystone Manufacturing, LLC (“GSM”) and Plastic Pallet Production, Inc. (“PPP”), is engaged in the manufacturing and marketing of plastic pallets and pelletized recycled plastic resin.
Principles of Consolidation
The consolidated financial statements include the accounts of Greystone, and its subsidiaries. All material intercompany accounts and transactions have been eliminated.
Use of Estimates
The preparation of Greystone’s consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires Greystone’s management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.
Cash
The Company maintains accounts at financial institutions which are insured by the Federal Deposit Insurance Corporation (FDIC). Cash balances at times are in excess of FDIC insurance limits.
Accounts Receivable and Allowance for Credit Losses
Greystone records its accounts receivable at their face value less an allowance for credit losses in an amount sufficient to absorb losses inherent in its accounts receivable portfolio based on projected expected credit losses. Greystone evaluates its accounts receivable and establishes an allowance for credit losses based on a combination of specific customer circumstances, credit conditions and history of collections, and current economic conditions. Based on this evaluation, expected credit losses were material as of May 31, 2026 and 2025.
Inventory
Inventory consists of finished pallets and raw materials which are stated at the lower of average cost or net realizable value.
Property, Plant and Equipment
Greystone’s property, plant and equipment is stated at cost. Depreciation expense is computed using the straight-line method over the estimated useful lives, as follows:
|
Years |
|||||
|
Plant buildings |
|||||
|
Production machinery and equipment |
- | ||||
|
Leasehold improvements |
- | ||||
|
Furniture & fixtures |
- | ||||
Leasehold improvements are amortized over the shorter of the useful lives or the term of the lease agreement. Upon sale, retirement or other disposal, the related costs and accumulated depreciation of items of property, plant or equipment are removed from the related accounts and any gain or loss is recognized. When events or changes in circumstances indicate that long-lived assets may be impaired, an evaluation is performed comparing the estimated future undiscounted cash flows associated with the asset to the asset’s carrying amount. If the asset’s carrying amount exceeds the cash flows, a write-down to fair value is required.
Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Leases
Greystone recognizes right-of-use assets and lease liabilities on the consolidated balance sheets.
Greystone has operating and finance leases for facilities, office space and plant equipment. Operating leases are included in right‐of‐use (“ROU”) operating lease assets and finance lease ROU assets are included in property, plant and equipment in the consolidated balance sheets. The lease liabilities are included in operating leases and financing leases (current and non-current) in the consolidated balance sheets.
The lease liability is initially measured at the present value of the lease payments, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the incremental borrowing rate. The incremental borrowing rate is defined as the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.
For finance leases, lease expenses are the sum of interest on the lease obligations and amortization of the ROU assets. Finance lease ROU assets are amortized based on the lesser of the lease term and the useful life of the leased asset according to the capital asset accounting policy. If ownership of the ROU assets transfers to Greystone at the end of the lease term or if Greystone is reasonably certain to exercise a purchase option, amortization is calculated using the estimated useful life of the leased asset.
For operating leases, lease expense is generally recognized on a straight-line basis over the lease term and recorded to cost of sales in the consolidated statements of operations.
For a sale-leaseback transaction, when the transaction involves real estate, sale-leaseback accounting shall be used by a seller-lessee only if the transaction includes all of the following a) normal leaseback; b) payment terms and provision that adequately demonstrate the buyer-lessor’s initial and continuing investment in the property; and c) payment terms and provisions that transfer all of the other risks and rewards of ownership as demonstrated by the absence of any other continuing involvement of the seller-lessee.
If a sale-leaseback includes an option for the seller-lessee to repurchase the asset, the exercise price of the option must be at fair value and substantially similar alternative assets must be readily available in the marketplace. If the underlying asset is real estate, which is considered unique, no substantially similar alternative asset exists. Therefore, the transaction does not qualify as a sale. Leasebacks that fail to qualify for sale accounting are accounted for as financing transactions, recognizing a financial obligation on the consolidated balance sheet.
In accordance with Accounting Standards Codification (ASC) 842, Greystone has made accounting policy elections (1) to not recognize right-of-use assets and lease liabilities for lease arrangements with a term of twelve months or less and (2) to combine lease and non-lease components. The non-lease components are not material and do not result in significant timing differences in the recognition of lease expense. Short-term leases include equipment, real estate and vehicles. For these leases, the Company recognizes the leases as an operating expense on a straight-line basis over the term of the lease.
Debt Issuance Costs
The Company capitalizes debt issuance costs as incurred and amortizes such costs on a straight-line basis across the term of the debt. Debt issuance costs are fully amortized when the debt is repaid or refinanced.
Recognition of Revenues
Revenue is recognized at the point in time 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 purchases damaged pallets from its customers which are reground and used in Greystone’s pallet production process; however, damaged pallet purchases are historically insignificant.
Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Income Taxes
Greystone accounts for income taxes under the liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the consolidated financial statements and tax bases of assets and liabilities and tax loss carryforwards using enacted tax rates in effect for the year in which the differences are expected to reverse.
Earnings (Loss) Per Share
Basic earnings (loss) per share is computed by dividing the earnings (loss) available to common stockholders by the weighted average number of common shares outstanding for the year. In arriving at income (loss) available to common stockholders, income (loss) attributable to non-controlling interest and preferred stock dividends are deducted from net income (loss) for the year. Diluted earnings per share is calculated by dividing net income (loss) attributable to common stockholders plus preferred dividends, unless the assumed conversion of the preferred stock is anti-dilutive, 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.
Reclassifications
Certain prior-year amounts have been reclassified to conform to the current-year presentation. During fiscal 2026, the Company refined its classification of depreciation expense based on the functional use of the underlying assets. Certain depreciation expense previously included in cost of goods sold has been reclassified to operating expenses. These reclassifications had no effect on previously reported operating income (loss), net income (loss), earnings (loss) per share, total assets, total liabilities, stockholders’ equity, or cash flows.
During the preparation of the fiscal 2026 consolidated financial statements, management determined that certain shares repurchased and retired during fiscal 2026 had been presented as treasury stock in previously reported interim periods. The accompanying consolidated financial statements reflect a reclassification of the interim period presentation to reflect the retirement of such shares. The reclassification affected the classification of amounts within stockholders’ equity and the number of issued shares reported but had no effect on total stockholders’ equity, net income (loss), earnings (loss) per share, cash flows, or results of operations.
Recent Accounting Pronouncements
Recently Adopted Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures. The Company adopted ASU 2023-09 during fiscal 2026. The adoption did not impact the Company’s financial position, results of operations, or cash flows but resulted in expanded income tax disclosures.
Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU 2024-03 requires public business entities to provide additional disclosures regarding specified categories of expenses included within relevant income statement captions. The standard is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact that adoption of ASU 2024-03 will have on its financial statement disclosures. The Company does not expect the standard to have an impact on its consolidated financial position, results of operations, or cash flows, although it may require expanded disclosures in the notes to the consolidated financial statements.
The Company has evaluated other recently issued accounting standards, including ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, and ASU 2025-12, Codification Improvements, and does not currently expect their adoption to have a material impact on its consolidated financial statements.
Note 2. GOING CONCERN AND MANAGEMENT’S PLAN
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve months following the date these consolidated financial statements are issued. At May 31, 2026, the Company has an accumulated deficit of approximately $() and cash and cash equivalents of approximately $. During fiscal year 2026, the Company lost a major customer that historically represented approximately $
In addition, the Company was not in compliance with certain financial covenants under its debt agreements as of May 31, 2026. On July 5, 2026, the Company entered into a Fifth Amendment to its Amended and Restated Loan Agreement with International Bank of Commerce (“IBC”), pursuant to which IBC waived certain existing covenant violations through the amendment date and suspended testing of specified financial covenants through November 30, 2026. The amendment also provides for interest-only payments on certain debt obligations for a period of seven months through calendar year 2026. As of the date these consolidated financial statements were issued, IBC had not exercised its rights to accelerate the indebtedness and the Company was in compliance with the amended agreement. However, management’s forecasts indicate that compliance with certain financial covenants when testing resumes may require additional amendments, waivers, or other accommodations from the lender. There can be no assurance that such accommodations, if necessary, will be obtained. Due to the covenant violations existing at May 31, 2026 and expected noncompliance within the next twelve months, all outstanding long-term debt has been classified as current in the accompanying consolidated balance sheet.
Management has developed plans intended to improve liquidity and operating performance, including expanding its customer base, increasing sales to existing customers, pursuing new customer opportunities, implementing enhanced inventory and production management practices, controlling operating expenditures, adjusting product pricing where appropriate, and continuing discussions with lenders regarding future financing arrangements and covenant requirements.
Management has evaluated these conditions and events and determined that, although its plans may improve liquidity and operating performance, the successful execution of those plans depends on replacing a substantial portion of the lost customer revenue and obtaining continued lender support. Because it is unclear whether the Company will be successful in accomplishing these objectives, management cannot conclude that it is probable that its plans will alleviate these conditions.
Accordingly, management has concluded that substantial doubt exists regarding the Company’s ability to continue as a going concern within one year after the date these consolidated financial statements are issued. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Note 3. EARNINGS (LOSS) PER SHARE
Basic and diluted earnings (loss) per share of common stock for the years ended May 31, are as follows:
|
Basic earnings (loss) per share of common stock: |
||||||||
|
May 31, |
May 31, |
|||||||
|
2026 |
2025 |
|||||||
|
Numerator - |
||||||||
|
Net income (loss) attributable to common stockholders |
$ | ( |
) | $ | ||||
|
Denominator - |
||||||||
|
Weighted-average shares outstanding - basic |
||||||||
|
earnings (loss) per share of common stock - basic |
$ | ( |
) | $ | ||||
|
Diluted earnings (loss) per share of common stock: |
||||||||
|
Numerator - |
||||||||
|
Net income (loss) attributable to common stockholders |
$ | ( |
) | $ | ||||
|
Denominator - |
||||||||
|
Weighted-average shares outstanding - basic |
||||||||
|
Incremental shares from assumed conversion of options warrants, as appropriate |
||||||||
|
Weighted average common stock outstanding - diluted |
||||||||
|
Earnings (loss) per share of common stock - diluted |
$ | ( |
) | $ | ||||
Warrants exercisable into common stock totaling
Inventory consists of the following as of May 31:
|
May 31, |
May 31, |
|||||||
|
2026 |
2025 |
|||||||
|
Raw materials |
$ | $ | ||||||
|
Finished goods |
||||||||
|
Total inventory |
$ | $ | ||||||
Note 5. PROPERTY, PLANT AND EQUIPMENT
A summary of the property, plant and equipment for Greystone is as follows, as of May 31:
|
May 31, |
May 31, |
|||||||
|
2026 |
2025 |
|||||||
|
Production machinery and equipment |
$ | $ | ||||||
|
Plant buildings and land |
||||||||
|
Leasehold improvements |
||||||||
|
Furniture and fixtures |
||||||||
| Construction in progress | ||||||||
|
Less: Accumulated depreciation and amortization |
( |
) |
( |
) |
||||
|
Net Property, Plant and Equipment |
$ | $ | ||||||
Property, plant and equipment includes production equipment with a carrying value of $
Depreciation expense for the fiscal years ended May 31, 2026 and 2025, was $
In February 2024, one of the Company’s storage warehouses caught fire with damage to finished goods inventory valued at $
Long-term debt consists of the following as of May 31, 2026 and 2025:
|
May 31, 2026 |
May 31, 2025 |
|||||||
|
Term Loans, payable to International Bank of Commerce, prime rate of interest plus % but not less than 6.25% maturing July 29, 2030 |
$ | $ | ||||||
|
Term Loan payable to First Interstate Bank, interest rate of |
||||||||
|
Revolving loan, payable to International Bank of Commerce, prime rate of interest plus |
||||||||
|
Total Debt |
||||||||
|
Less: Debt issue costs, net of amortization |
( |
) | ( |
) | ||||
|
Total debt, net of debt issuance costs |
||||||||
|
Less: Current portion of debt |
( |
) | ( |
) | ||||
|
Long-term Debt, net of current portion |
$ | $ | ||||||
As of May 31, 2026, the prime rate of interest was
The revolving loan and term loans contain financial covenant requirements and cross-default provisions. The Company was not in compliance with certain financial covenants as of May 31, 2026. On July 5, 2026, the Company entered into a Fifth Amendment to its Amended and Restated Loan Agreement with International Bank of Commerce (“IBC”), pursuant to which IBC waived existing covenant violations through the amendment date and suspended testing of certain financial covenants through November 30, 2026. As of the issuance date of these consolidated financial statements, IBC had not exercised its rights to accelerate the indebtedness and the Company remained in compliance with the terms of the amended agreement. Management’s forecasts indicate that compliance with certain financial covenants upon the resumption of covenant testing may require additional amendments, waivers, or other accommodations from the lender. While IBC has waived specified covenant violations through the amendment date and suspended covenant testing through November 30, 2026, management has determined it is not probable the covenant violations will be cured when testing resumes after November 30, 2026. As such, all of the long-term debt has been classified as current.
Debt issuance costs consists of the amounts paid to third parties in connection with the issuance and modification of debt instruments. These costs are shown on the consolidated balance sheets as a direct reduction to the related debt instrument. Amortization of these costs is included in interest expense. Greystone recorded amortization of debt issuance costs of $
Restated and Amended Loan Agreement between Greystone and IBC
On July 29, 2022, Greystone and GSM (collectively, the “Borrowers”) entered into an Amended and Restated Loan Agreement with IBC (the “IBC Restated Loan Agreement”), which consolidated all existing term loans, provided additional funding for equipment purchases and renewed the revolving loan in the aggregate principal amount of $
On February 5, 2024, Greystone and IBC entered into a Second Amendment to the IBC Restated Loan Agreement, which, among other things, extended the maturity date of the Revolving Loan from July 29, 2024 to February 5, 2026, increased the permitted distributions to holders of preferred stock to $
Note 6. LONG-TERM DEBT (cont.)
Prior to January 9, 2026, the IBC term loans required equal monthly payments of principal and interest in amounts sufficient to amortize the principal balance of the loans over their remaining lives. The monthly payments of principal and interest on the IBC term loans may vary due to changes in the prime rate of interest. Aggregate payments for the IBC term loans were approximately $
On July 5, 2026, subsequent to year-end, Greystone and IBC entered into a Fifth Amendment to the IBC Restated Loan Agreement for the term loans and revolving loan. Under the Fifth Amendment, IBC waived existing covenant defaults and events of default related to specified financial covenants through the amendment date and suspended testing of certain financial covenants through November 30, 2026, after which covenant compliance testing resumes. The Fifth Amendment also extended the maturity date of the Revolving Loan from July 5, 2026 to February 5, 2027 and reduced the aggregate available borrowing to $
The IBC Restated Loan Agreement is secured by a lien on substantially all assets of the Company. Warren F. Kruger, the Company’s President, Chief Executive Officer, Chief Financial Officer, and Chairman of the Board and Robert B. Rosene, Jr., a member of the Company’s Board of Directors and a member of the board for IBC, provided limited guaranties of the Borrowers’ obligations under the IBC Restated Loan Agreement. During the year ended May 31, 2025, Mr. Rosene was released from his guaranty in accordance with the IBC Restated Loan Agreement. In connection with the Fifth Amendment described above, Warren F. Kruger’s prior limited guaranty was replaced with an unlimited guaranty and the Warren F. Kruger Trust also signed a new unlimited guaranty.
The IBC Restated Loan Agreement contains customary representations, warranties, and affirmative and negative covenants. Among other requirements, the Borrowers must maintain a minimum debt service coverage ratio of
Loan Agreement with First Interstate Bank
On August 23, 2021, Greystone and First Interstate Bank entered into a loan agreement (the “FIB Loan Agreement”) in connection with certain prior loans and a mortgage loan to refinance certain land and buildings located in Bettendorf, IA.
The FIB Loan Agreement includes customary representations and warranties and affirmative and negative covenants which include (i) requiring the Borrowers to maintain a debt service coverage ratio of to 1:00 as of the end of each fiscal year end and debt to tangible net worth ratio of to 1:00 as of the end of each fiscal year end with a decrease of
The FIB Loan Agreement is secured by a mortgage on one of Greystone’s warehouses.
Maturities
Greystone was not in compliance with certain financial covenants as of May 31, 2026. Therefore, all of the long-term debt has been classified as current.
Financing Leases
Financing leases consist of the following as of May 31:
|
May 31, |
May 31, |
|||||||
|
2026 |
2025 |
|||||||
|
Non-cancellable financing leases |
$ | $ | ||||||
|
Less: Current portion |
( |
) | ||||||
|
Non-cancellable financing leases, net of current portion |
$ | $ | ||||||
The production equipment under the non-cancelable financing leases as of May 31, 2026 and 2025 was as follows:
|
May 31, |
May 31, |
|||||||
|
2026 |
2025 |
|||||||
|
Production equipment under financing leases |
$ | $ | ||||||
|
Less: Accumulated amortization |
( |
) | ( |
) | ||||
|
Production equipment under financing leases, net |
$ | $ | ||||||
Amortization of the carrying amount of the assets was $
Operating Leases
Greystone had four non-cancellable operating leases for (i) equipment with a month term and a month term and a discount rate of
The outstanding liability for right to use assets under operating leases as of May 31, 2026 and 2025 is as follows:
|
May 31, |
May 31, |
|||||||
|
2026 |
2025 |
|||||||
|
Liability under operating leases |
$ | $ | ||||||
|
Less: Current portion |
( |
) | ( |
) | ||||
|
Long-term portion of liability under operating leases |
$ | $ | ||||||
Note 7. LEASES (cont.)
Lease Summary Information
For the years ended May 31, 2026 and 2025, a summary of lease activity follows:
|
May 31, |
May 31, |
|||||||
|
2026 |
2025 |
|||||||
|
Lease Expense |
||||||||
|
Financing lease expense - |
||||||||
|
Amortization of right-of-use assets |
$ | $ | ||||||
|
Interest on lease liabilities |
||||||||
|
Operating lease expense |
||||||||
|
Short-term lease expense |
||||||||
|
Total |
$ | $ | ||||||
|
Other Information |
||||||||
|
Cash paid for amounts included in the measurement of lease liabilities for finance leases - |
||||||||
|
Operating cash flows |
$ | $ | ||||||
|
Financing cash flows |
$ | $ | ||||||
|
Cash paid for amounts included in the measurement of lease liabilities for operating leases - |
||||||||
|
Operating cash flows |
$ | $ | ||||||
|
Weighted-average remaining lease term (in years) - |
||||||||
|
Financing leases |
N/A | |||||||
|
Operating leases |
||||||||
|
Weighted-average discount rate - |
||||||||
|
Financing leases |
N/A | % | ||||||
|
Operating leases |
% | % | ||||||
Future minimum lease payments under non-cancelable operating leases as of May 31, 2026, are approximately:
|
Operating |
||||
|
Leases |
||||
|
Twelve months ending May 31, 2027 |
$ | |||
|
Twelve months ending May 31, 2028 |
||||
|
Twelve months ending May 31, 2029 |
||||
|
Twelve months ending May 31, 2030 |
||||
|
Twelve months ending May 31, 2031 |
||||
|
Thereafter |
||||
|
Total future minimum lease payments |
||||
|
Less: Imputed interest |
( |
) | ||
|
Present value of minimum lease payments |
$ | |||
Note 7. LEASES (cont.)
Finance Obligation
On April 23, 2026, the Company entered into an agreement with Robert B. Rosene, Jr., a member of the Company’s Board of Directors and the sole member of GRE, to sell certain commercial real estate located in Bettendorf, Iowa for proceeds of approximately $
Management evaluated the transaction under ASC 842 and concluded that the transfer of the property does not qualify for sale accounting. Accordingly, the transaction is accounted for as a financing obligation. The Company continues to recognize the underlying property within property, plant and equipment and recognizes a financial obligation for the proceeds received reflected on the statement of cash flows as financing activities. Payments made under the arrangement which totaled $
At May 31, 2026, the carrying amount of the property subject to the arrangement was approximately $
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, Mexico and other Central America countries which totaled
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 fiscal years 2026 and 2025, respectively, were as follows:
|
2026 |
2025 |
|||||||
|
End-user customers |
% | % | ||||||
|
Distributors |
% | % | ||||||
Advances from a customer pursuant to a contract for the sale of plastics pallets is recognized as deferred revenue. Revenue related to these advances is recognized by Greystone as pallets are shipped to customers. The unrecognized balance of deferred revenue as of both May 31, 2026 and 2025, was $
Note 9. RELATED PARTY TRANSACTIONS
Transactions with Warren F. Kruger, President, Chief Executive Officer, Chief Financial Officer and Chairman of the Board
Yorktown Management & Financial Services, LLC (“Yorktown”), an entity wholly owned by Warren F. Kruger, owns and rents to Greystone (1) grinding equipment used to grind raw materials for Greystone’s pallet production and (2) extruders for pelletizing recycled plastic into pellets for resale and for use as raw material for manufacturing pallets. Greystone compensates Yorktown for the use of equipment as discussed below.
Rental fees. GSM pays weekly rental fees of $
Yorktown provides administrative office space for Greystone in Tulsa, Oklahoma under a -year lease at a rental rate of $
Transactions with TriEnda Holdings, L.L.C.
TriEnda Holdings, L.L.C. (“TriEnda”) is a manufacturer of plastic pallets, protective packaging and dunnage utilizing thermoform processing of which Warren F. Kruger, is the non-executive chairman of the board of directors of Kruger Family Holdings, LLC (“KFH”), which owns a majority interest in TriEnda. Greystone may purchase pallets from TriEnda for resale or sell Greystone pallets to TriEnda. During fiscal year 2026, Greystone began a service of disassembling and grinding of certain items for TriEnda. During fiscal year 2026 and 2025, Greystone purchases from TriEnda totaled $
Durakon Industries, Inc. is a Mexican subsidiary of Trienda Holdings, LLC with which the Company also does business. Sales to Durakon totaled $
Transactions with Green Plastic Pallets
Green Plastic Pallets (“Green”) is an entity owned by James Kruger, a brother to Warren F. Kruger. Green purchased pallets from Greystone totaling $
Transactions with Robert B Rosene, Jr., Director
Greystone Real Estate, L.L.C. (GRE) is an entity wholly owned by Mr. Rosene. Prior to April 2026, GRE owned two primary manufacturing facilities occupied by Greystone. Effective August 1, 2022, Greystone and GRE entered into a non-cancellable -year lease agreement with a -year extension for the use of these manufacturing facilities at the initial rate of $
Effective April 23, 2026, the Company sold certain real property to Mr. Rosene, a member of the Company’s Board of Directors and the sole member of GRE, for $
Deferred taxes as of May 31, 2026 and 2025 are as follows:
| May 31, | May 31, | |||||||
|
2026 |
2025 |
|||||||
|
Deferred tax asset: |
||||||||
|
Net operating loss carryforward |
$ | $ | ||||||
|
Other |
||||||||
|
Total deferred tax asset |
||||||||
|
Deferred tax liability: |
||||||||
|
Depreciation and amortization recognized for tax in excess of financial |
( |
) | ( |
) | ||||
|
Deferred rent adjustments |
( |
) | ( |
) | ||||
|
Other |
( |
) | ||||||
|
Valuation allowance |
( |
) | ||||||
|
Net deferred tax liability |
$ | ( |
) | $ | ( |
) | ||
A deferred tax asset is recognized for tax-deductible temporary differences and operating losses using the applicable enacted tax rate. In assessing the realizability of deferred tax assets, management considers the likelihood of whether it is more likely than not the net deferred tax asset will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which net operating losses and the reversal of timing differences may offset taxable income. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Future realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character in carryforward periods under the tax law. Based on this evaluation, management has determined that Greystone will not be able to realize the full effect of the deferred tax assets and a valuation allowance of $
The net change in deferred taxes for the years ended May 31, 2026 and 2025, is as follows:
|
2026 |
2025 |
|||||||
|
Net operating loss carryforward |
$ | $ | ( |
) | ||||
|
Depreciation and amortization, tax reporting in excess of financial |
||||||||
|
Deferred rent adjustments |
( |
) | ||||||
|
Valuation allowance |
( |
) | ||||||
|
Other |
||||||||
|
Net change |
$ | $ | ( |
) | ||||
The provision for income taxes as of May 31, 2026 and 2025 consists of the following:
|
2026 |
2025 |
|||||||
|
Current income tax: |
||||||||
|
Federal |
$ | $ | ||||||
|
State |
||||||||
|
Deferred income tax expense (benefit) |
( |
) | ||||||
|
Provision (Benefit) for income taxes |
$ | ( |
) | $ | ||||
Note 10. INCOME TAXES (cont.)
Greystone’s provision for income taxes for the years ended May 31, 2026 and 2025 differs from the federal statutory rate as follows:
|
2026 |
2025 |
|||||||||||||||
|
Tax Effect ($) |
Rate Effect (%) |
Tax Effect ($) |
Rate Effect (%) |
|||||||||||||
|
|
( |
) | % | % | ||||||||||||
|
State income taxes (benefits) |
( |
) | ||||||||||||||
|
Permanent differences |
||||||||||||||||
|
Provision to return adjustment |
||||||||||||||||
|
Change in valuation allowance |
( |
) | ( |
) | ||||||||||||
|
Tax (benefit) provision per consolidated financial statements |
$ | ( |
) | ( |
)% | $ | % | |||||||||
Convertible Preferred Stock
In September 2003, Greystone issued
Warrants to Purchase Common Stock
On September 1, 2016, the Company issued a warrant to purchase
Retirement of Treasury Stock
On September 8, 2026, the Company retired
Greystone implemented a defined contribution and profit-sharing plan effective January 1, 2019. The defined contribution plan is an Internal Revenue Code of 1986, as amended, Section 401(k) plan. Greystone matches employee contributions up to
The profit-sharing plan is an employer nonelective plan. Greystone’s contributions are discretionary. Vesting is earned ratably over a period. Greystone has not authorized or made any discretionary contributions since inception.
Note 13. FINANCIAL INSTRUMENTS
The following methods and assumptions are used in estimating the fair-value disclosures for financial instruments:
Cash, Accounts Receivable and Accounts Payable: The carrying amounts reported in the consolidated balance sheets for cash, accounts receivable and accounts payable approximate fair value due to the short-term maturity of these instruments.
Long-Term Debt: The carrying amount of loans with floating rates of interest approximate fair value. Fixed rate loans are valued based on cash flows using estimated rates for comparable loans. As of May 31, 2026 and 2025, the carrying amounts reported in the consolidated balance sheets approximate fair value for the variable and fixed rate loans.
Note 14. SUPPLEMENTAL INFORMATION OF CASH FLOWS
Supplemental information of cash flows for the years ended May 31, 2026 and 2025:
|
2026 |
2025 |
|||||||
|
Non-cash investing and financing activities: |
||||||||
|
Preferred dividend accrual |
$ | $ | ||||||
| Equipment purchases in accounts payable | $ | $ | ||||||
| Equipment purchases transferred to inventory | $ | $ | ||||||
|
Supplemental information: |
||||||||
|
Interest paid |
$ | $ | ||||||
|
Income taxes paid |
$ | $ | ||||||
Note 15. CONCENTRATIONS, RISKS AND UNCERTAINTIES
For the fiscal years 2026 and 2025, Greystone’s major customers accounted for approximately
Greystone is subject to litigation, claims and other commitments and contingencies arising in the ordinary course of business. Although the asserted value of these matters may be significant, the company currently does not expect that the ultimate resolution of any open matters will have a material adverse effect on its consolidated financial position or results of operations.
As of May 31, 2026, Greystone has outstanding commitments totaling approximately $
Exhibit 10.9
Exhibit 10.10
Exhibit 21.1
Subsidiaries of Greystone Logistics, Inc.
|
Subsidiary |
Jurisdiction of Incorporation or Organization |
|
Plastic Pallet Production, Inc. |
Texas |
|
Greystone Manufacturing, L.L.C. |
Oklahoma |
Exhibit 31.1
CERTIFICATION
I, Warren F. Kruger, certify that:
|
1. |
I have reviewed this annual report on Form 10‑K 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): |
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(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 |
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(b) |
Any fraud, whether or not material, which involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
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August 31, 2026 |
/s/ Warren F. Kruger |
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Warren F. Kruger |
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President, Chief Executive Officer, Chief Financial Officer, and Chairman of the Board |
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 annual report of Greystone Logistics, Inc. (the “Company”) on Form 10‑K for the period ending May 31, 2026, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Warren F. Kruger, President and Chief Executive Officer and 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:
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(1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
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(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
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August 31, 2026 |
/s/ Warren F. Kruger |
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Warren F. Kruger |
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President, Chief Executive Officer, Chief Financial Officer, and Chairman of the Board |
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.