Greystone Logistics, Inc 10-Q for FY2023 Q2
Greystone Logistics, Inc. (GLGI)
About this 10-Q
Greystone Logistics, Inc filed this 10-Q on January 17, 2023, covering the quarter ended November 30, 2022 (FY2023 Q2).
Headline figures
Quarter ended November 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $12.1M
- down 23.6% from $15.84M a year earlier
- Net loss
- $187.25K
- compared with a net loss of $229.49K a year earlier
- Diluted EPS
- -$0.01
- compared with -$0.01 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
(Mark One)
For
the quarterly period ended
For the transition period from ___________ to ____________
Commission
file number
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||
| NONE | GLGI | NONE |
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.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to post and submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ | |
| Smaller
reporting company | ||
| Emerging
growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by checkmark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act). Yes ☐
Applicable only to corporate issuers:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: January 13, 2023 –
GREYSTONE LOGISTICS, INC.
FORM 10-Q
For the Period Ended November 30, 2022
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Greystone Logistics, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
| November 30, 2022 | May 31, 2022 | |||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable - | ||||||||
| Trade | ||||||||
| Related parties | ||||||||
| Other | ||||||||
| Inventory | ||||||||
| Prepaid expenses | ||||||||
| Total Current Assets | ||||||||
| Property, Plant and Equipment, net | ||||||||
| Right-of-Use Operating Lease Assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Equity | ||||||||
| Current Liabilities: | ||||||||
| Current portion of long-term debt | $ | $ | ||||||
| Current portion of financing leases | ||||||||
| Current portion of operating leases | ||||||||
| Accounts payable and accrued liabilities | ||||||||
| Deferred revenue | ||||||||
| Preferred dividends payable | ||||||||
| Total Current Liabilities | ||||||||
| Long-Term Debt, net of current portion and debt issuance costs | ||||||||
| Financing Leases, net of current portion | ||||||||
| Operating Leases, net of current portion | ||||||||
| Deferred Tax Liability | ||||||||
| Equity: | ||||||||
| Preferred stock, $ par value, cumulative, shares authorized, shares issued
and outstanding, liquidation preference of $ | ||||||||
| Common stock, $ par value, shares authorized, shares issued and outstanding, | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Greystone Stockholders’ Equity | ||||||||
| Non-controlling interest | ||||||||
| Total Equity | ||||||||
| Total Liabilities and Equity | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 1 |
Greystone Logistics, Inc. and Subsidiaries
Consolidated Statements of Income
For the Six Months Ended November 30,
(Unaudited)
| 2022 | 2021 | |||||||
| Sales | $ | $ | ||||||
| Cost of Sales | ||||||||
| Gross Profit | ||||||||
| Selling, General and Administrative Expenses | ||||||||
| Operating Income | ||||||||
| Other Income (Expense): | ||||||||
| Gain from forgiveness of debt | ||||||||
| Gain on deconsolidation of variable interest entity | ||||||||
| Other income | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Income before Income Taxes | ||||||||
| Benefit from (Provision for) Income Taxes | ( | ) | ||||||
| Net Income | ||||||||
| Income Attributable to Non-controlling Interest | ( | ) | ( | ) | ||||
| Preferred Dividends | ( | ) | ( | ) | ||||
| Net Income Attributable to Common Stockholders | $ | $ | ||||||
| Income Per Share of Common Stock - | ||||||||
| Basic and Diluted | $ | $ | ||||||
| Weighted Average Shares of Common Stock Outstanding - | ||||||||
| Basic | ||||||||
| Diluted | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 2 |
Greystone Logistics, Inc. and Subsidiaries
Consolidated Statements of Operations
For the Three Months Ended November 30,
(Unaudited)
| 2022 | 2021 | |||||||
| Sales | $ | $ | ||||||
| Cost of Sales | ||||||||
| Gross Profit | ||||||||
| Selling, General and Administrative Expenses | ||||||||
| Operating Income (Loss) | ( | ) | ||||||
| Other Income (Expense): | ||||||||
| Other income | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Loss before Income Taxes | ( | ) | ( | ) | ||||
| Benefit from Income Taxes | ||||||||
| Net Loss | ( | ) | ( | ) | ||||
| Income Attributable to Non-controlling Interest | ( | ) | ||||||
| Preferred Dividends | ( | ) | ( | ) | ||||
| Loss Attributable to Common Stockholders | $ | ( | ) | $ | ( | ) | ||
| Loss Per Share of Common Stock - | ||||||||
| Basic and Diluted | $ | ( | ) | $ | ( | ) | ||
| Weighted Average Shares of Common Stock Outstanding - | ||||||||
| Basic and diluted | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 3 |
Greystone Logistics, Inc. and Subsidiaries
Consolidated Statements of Changes in Equity
For the Six Months Ended November 30, 2022 and 2021
(Unaudited)
| Preferred Stock | Common Stock | Additional Paid-in | Accumulated | Total Greystone Stockholders’ | Non- controlling | Total | ||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Equity | Interest | Equity | ||||||||||||||||||||||||||||
| Balances, May 31, 2021 | $ | $ | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||||
| Stock options exercised | - | |||||||||||||||||||||||||||||||||||
| Cash distributions | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Preferred dividends, $ per share | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||||||||||
| Balances, August 31, 2021 | ( | ) | ||||||||||||||||||||||||||||||||||
| Preferred dividends, $ per share | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Net income (loss) | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balances, November 30, 2021 | $ | $ | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||||
| Balances, May 31, 2022 | $ | $ | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||||
| Capital Contribution | - | - | ||||||||||||||||||||||||||||||||||
| Deconsolidation of variable interest entity | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Preferred dividends, $ per share | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||||||||||
| Balances, August 31, 2022 | ( | ) | ||||||||||||||||||||||||||||||||||
| Preferred dividends, $ per share | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Preferred dividends | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Net income (loss) | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balances, November 30, 2022 | $ | $ | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||||
| Ending balance | $ | $ | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 4 |
Greystone Logistics, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
For the Six Months Ended November 30,
(Unaudited)
| 2022 | 2021 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net income | $ | $ | ||||||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities - | ||||||||
| Gain on forgiveness of debt | ( | ) | ||||||
| Gain on deconsolidation of variable interest entity | ( | ) | ||||||
| Gain on sale of assets | ( | ) | ||||||
| Depreciation and amortization | ||||||||
| Deferred tax expense (benefit) | ( | ) | ||||||
| Decrease (increase) in trade accounts receivable | ( | ) | ||||||
| Decrease in related party receivables | ||||||||
| Increase in inventory | ( | ) | ( | ) | ||||
| Increase in prepaid expenses | ( | ) | ( | ) | ||||
| Increase (decrease) in accounts payable and accrued liabilities | ( | ) | ||||||
| Increase (decrease) in deferred revenue | ( | ) | ||||||
| Net cash provided by (used in) operating activities | ( | ) | ||||||
| Cash Flows from Investing Activities: | ||||||||
| Purchase of property, plant and equipment | ( | ) | ( | ) | ||||
| Deconsolidation of variable interest entity | ( | ) | ||||||
| Proceeds from sale of assets | ||||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from long-term debt | ||||||||
| Payments on long-term debt and financing leases | ( | ) | ( | ) | ||||
| Payments on related party note payable and financing lease | ( | ) | ( | ) | ||||
| Proceeds from revolving loan | ||||||||
| Payments on revolving loan | ( | ) | ||||||
| Proceeds from stock options exercised | ||||||||
| Payments for debt issuance costs | ( | ) | ( | ) | ||||
| Dividends paid on preferred stock | ( | ) | ( | ) | ||||
| Capital contribution to non-controlling interest | ||||||||
| Distributions paid by non-controlling interest | ( | ) | ||||||
| Net cash provided by (used in) financing activities | ( | ) | ||||||
| Net Increase (Decrease) in Cash | ( | ) | ||||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| Non-cash Activities: | ||||||||
| Refinancing of certain term loans | $ | $ | ||||||
| Deconsolidation of net assets of variable interest entity | $ | $ | ||||||
| Acquisition of equipment through financing lease | $ | $ | ||||||
| Capital expenditures in accounts payable | $ | $ | ||||||
| Preferred dividend accrual | $ | $ | ||||||
| Supplemental information: | ||||||||
| Interest paid | $ | $ | ||||||
| Income taxes paid | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 5 |
Greystone Logistics, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)
Note 1. Basis of Financial Statements
In the opinion of Greystone Logistics, Inc. (“Greystone”), the accompanying unaudited consolidated financial statements contain all adjustments and reclassifications, which are of a normal recurring nature, necessary to present fairly its financial position as of November 30, 2022, the results of its operations for the six months and three months ended November 30, 2022 and 2021 and its changes in equity and cash flows for the six months ended November 30, 2022 and 2021. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the fiscal year ended May 31, 2022 and the notes thereto included in the Form 10-K for such period. The results of operations for the six months and three months ended November 30, 2022 and 2021 are not necessarily indicative of the results to be expected for the full fiscal year.
The consolidated financial statements of Greystone include its wholly-owned subsidiaries, Greystone Manufacturing, L.L.C. (“GSM”) and Plastic Pallet Production, Inc. (“PPP”), and the variable interest entity, Greystone Real Estate, L.L.C. (“GRE”) for the period from June 1, 2022 through July 29, 2022. All material intercompany accounts and transactions have been eliminated in the consolidated financial statements.
GRE,
which is wholly-owned by a member of Greystone’s Board of Directors, owns two primary manufacturing facilities which are occupied
by Greystone. Effective July 29, 2022, GRE paid off its mortgage payable and, in conjunction with Greystone’s refinancing described
in Note 6, GRE was removed from the cross-collateralization in the loan agreement between Greystone and International Bank of Commerce.
Following these transactions, Greystone was no longer determined to be the primary beneficiary of GRE. Accordingly, GRE was deconsolidated
from Greystone’s consolidated financial statements as of July 29, 2022, resulting in the recognition of a gain in the amount of
$
Basic earnings per share is based on the weighted-average effect of all common shares issued and outstanding and is calculated by dividing net income (loss) attributable to common stockholders by the weighted-average shares outstanding during the period. Diluted earnings per share is calculated by dividing net income attributable to common stockholders by the weighted-average number of common shares used in the basic earnings per share calculation plus the number of common shares that would be issued assuming exercise or conversion of all potentially dilutive common shares outstanding.
| 6 |
Schedule of Anti-dilutive Earnings Per Share
| 2022 | 2021 | |||||||
| For the six months ended November 30: | ||||||||
| Preferred stock convertible into common stock | ||||||||
| For the three months ended November 30: | ||||||||
| Preferred stock convertible into common stock | ||||||||
| Warrants exercisable into common stock | ||||||||
| Total | ||||||||
Schedule of Basic and Diluted Earnings Per Share
For the six months ended November 30, 2022 and 2021:
| 2022 | 2021 | |||||||
| Basic earnings per share of common stock: | ||||||||
| Numerator - | ||||||||
| Net income attributable to common stockholders | $ | $ | ||||||
| Denominator - | ||||||||
| Weighted-average shares outstanding - basic | ||||||||
| Income per share of common stock - basic | $ | $ | ||||||
| Diluted earnings per share of common stock: | ||||||||
| Numerator - | ||||||||
| Net income attributable to common stockholders | $ | $ | ||||||
| Add: Preferred stock dividends for assumed conversion | ||||||||
| Net income allocated to common stockholders | $ | $ | ||||||
| Denominator - | ||||||||
| Weighted-average shares outstanding – basic | ||||||||
| Incremental shares from assumed conversion of warrants and preferred stock, as appropriate | ||||||||
| Weighted average common stock outstanding – diluted | ||||||||
| Income per share of common stock – diluted | $ | $ | ||||||
For the three months ended November 30, 2022 and 2021:
| 2022 | 2021 | |||||||
| Basic earnings per share of common stock: | ||||||||
| Numerator - | ||||||||
| Net loss attributable to common stockholders | $ | ( | ) | $ | ( | ) | ||
| Denominator - | ||||||||
| Weighted-average shares outstanding - basic | ||||||||
| Loss per share of common stock - basic | $ | ( | ) | $ | ( | ) | ||
| Diluted earnings per share of common stock: | ||||||||
| Numerator - | ||||||||
| Net loss attributable to common stockholders | $ | ( | ) | $ | ( | ) | ||
| Denominator - | ||||||||
| Weighted-average shares outstanding - basic | ||||||||
| Incremental shares from assumed conversion of warrants and preferred stock, as appropriate | ||||||||
| Weighted average common stock outstanding – diluted | ||||||||
| Loss per share of common stock - diluted | $ | ( | ) | $ | ( | ) | ||
| 7 |
Note 3. Inventory
Inventory consists of the following:
Schedule of Inventory
| November 30, | May 31, | |||||||
| 2022 | 2022 | |||||||
| Raw materials | $ | $ | ||||||
| Finished goods | ||||||||
| Total inventory | $ | $ | ||||||
Note 4. Property, Plant and Equipment
A summary of property, plant and equipment is as follows:
Schedule of Property, Plant and Equipment
November 30, 2022 | May 31, 2022 | |||||||
| Production machinery and equipment | $ | $ | ||||||
| Plant buildings and land | ||||||||
| Leasehold improvements | ||||||||
| Furniture and fixtures | ||||||||
| Less: Accumulated depreciation and amortization | ( | ) | ( | ) | ||||
| Net Property, Plant and Equipment | $ | $ | ||||||
Production
machinery includes deposits on equipment in the amount of $
Depreciation
expense, including amortization expense related to financing leases, for the six months ended November 30, 2022 and 2021 was $
Note 5. Related Party Transactions/Activity
Yorktown Management & Financial Services, LLC
Yorktown
Management & Financial Services, LLC (“Yorktown”), an entity wholly-owned by Greystone’s President and CEO, owns
and rents to Greystone (1) grinding equipment used to grind raw materials for Greystone’s pallet production and (2) extruders for
pelletizing recycled plastic into pellets for resale and for use as raw material in the manufacture of pallets. GSM pays weekly rental
fees to Yorktown of $
Effective
January 1, 2017, Greystone and Yorktown entered into a lease for office space at a monthly rental of $
| 8 |
TriEnda Holdings, L.L.C.
TriEnda
Holdings, L.L.C. (“TriEnda”) is a manufacturer of plastic pallets, protective packing and dunnage utilizing thermoform processing
for which Warren F. Kruger, Greystone’s President and CEO, serves TriEnda as the non-executive Chairman of the Board and is a partner
in a partnership which has a majority ownership interest in TriEnda. Greystone may purchase pallets from TriEnda for resale or sell Greystone
pallets to TriEnda. During the six months ended November 30, 2022 and 2021, Greystone purchases from TriEnda totaled $
Green Plastic Pallets
Greystone
sells plastic pallets to Green Plastic Pallets (“Green”), an entity that is owned by James Kruger, brother to Warren Kruger,
Greystone’s President and CEO. Greystone had sales to Green of $
Note 6. Long-term Debt
Debt as of November 30, 2022 and May 31, 2022 is as follows:
Schedule of Long-Term Debt
| November 30, | May 31, | |||||||
| 2022 | 2022 | |||||||
| Term loan A dated July 29, 2022, payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.50%, maturing July 29, 2027 | $ | $ | ||||||
| Term loan A dated July 29, 2022, payable to International Bank of Commerce, prime rate of interest plus | $ | $ | ||||||
| Term loan B dated July 29, 2022, payable to International Bank of Commerce, prime rate of interest plus | ||||||||
| Term loans payable to International Bank of Commerce, prime rate of interest plus | ||||||||
| Revolving loan payable to International Bank of Commerce, prime rate of interest plus | ||||||||
| Term loan payable by GRE to International Bank of Commerce, interest rate of | ||||||||
| Term loan payable to First Interstate Bank, interest rate of | ||||||||
| Term loan payable to First Interstate Bank, interest rate of | ||||||||
| Note payable to Robert Rosene, | ||||||||
| Other | ||||||||
| Total long-term debt | ||||||||
| Debt issuance costs, net of amortization | ( | ) | ( | ) | ||||
| Total debt, net of debt issuance costs | ||||||||
| Less: Current portion of long-term debt | ( | ) | ( | ) | ||||
| Long-term debt, net of current portion | $ | $ | ||||||
| 9 |
The
prime rate of interest as of November 30, 2022 was
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 sheet 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 “Borrowers”) and IBC entered into an Amended and Restated Loan Agreement (“IBC Restated Loan Agreement”) that provides for consolidation of certain term loans and a renewed revolver loan.
The
IBC term loans make equal monthly payments of principal and interest in such amounts sufficient to amortize the principal balance of
the loans over the 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. Currently, the aggregate payments for the IBC term loans are approximately $
The
IBC Restated Loan Agreement provides for IBC to make to Greystone (i) a term loan in the amount of $
The IBC Restated Loan Agreement includes customary events of default, including events of default relating to non-payment of principal and other amounts owing under the IBC Restated Loan Agreement from time to time, inaccuracy of representations, violation of covenants, defaults under other agreements, bankruptcy and similar events, the death of a guarantor, certain material adverse changes relating to a Borrower or guarantor, certain judgments or awards against a Borrower, or government action affecting a Borrower’s or guarantor’s ability to perform under the IBC Restated Loan Agreement or the related loan documents. Among other things, a default under the IBC Restated Loan Agreement would permit IBC to cease lending funds under the IBC Restated Loan Agreement and require immediate repayment of any outstanding notes with interest and any unpaid accrued fees.
The
IBC Restated Loan Agreement is secured by a lien on substantially all assets of the Borrowers. Warren F. Kruger, President and CEO, and
Robert B. Rosene, Jr. have provided limited guaranties of the Borrowers’ obligations under the IBC Restated Loan Agreement. Mr.
Kruger’s guarantee is limited to
Loan Agreement with First Interstate Bank, formerly Great Western Bank
On August 23, 2021, Greystone entered into a loan agreement with First Interstate Bank (“FIB Loan Agreement”) to include prior commercial loans and subsequent loans. GSM is a named guarantor under the FIB Loan Agreement.
The FIB Loan Agreement includes customary events of default, including events of default relating to non-payment of principal and other amounts owing under the FIB Loan Agreement from time to time, inaccuracy of representations, violation of covenants, defaults under other agreements, bankruptcy and similar events, certain material adverse changes relating to a Borrower, certain judgments or awards against a Borrower, or guarantor’s ability to perform under the FIB Loan Agreement. Among other things, a default under the FIB Loan Agreement would permit FIB to cease lending funds under the FIB Loan Agreement and require immediate repayment of any outstanding notes with interest and any unpaid accrued fees.
The FIB Loan Agreement is secured by a mortgage on one of Greystone’s warehouses.
Maturities
Maturities
of Greystone’s long-term debt for the five years subsequent to November 30, 2022, are $
| 10 |
Note 7. Leases
Financing Leases
Financing leases as of November 30, 2022 and May 31, 2022:
Schedule of Financing Lease
| November 30, 2022 | May 31, 2022 | |||||||
| Non-cancellable financing leases | $ | $ | ||||||
| Less: Current portion | ( | ) | ( | ) | ||||
| Non-cancellable financing leases, net of current portion | $ | $ | ||||||
Greystone
and an unrelated private company entered into three lease agreements for certain production equipment with a total cost of approximately
$
Effective
December 28, 2018, Yorktown purchased certain production equipment from Greystone at net book value of $
The
production equipment under the remaining non-cancelable financing leases as of November 30, 2022, has a gross carrying amount of $
Operating Leases
Greystone recognized a lease liability for each lease based on the present value of remaining minimum fixed rental payments, using a discount rate that approximates the rate of interest for a collateralized loan over a similar term. A right-of-use asset is recognized for each lease, valued at the lease liability. Minimum fixed rental payments are recognized on a straight-line basis over the life of the lease as costs and expenses on the consolidated statements of income. Variable and short-term rental payments are recognized as costs and expenses as they are incurred.
Greystone
has three non-cancellable operating leases for (i) equipment with a month term and a month term and a discount
rate of
As
discussed in Note 1, effective August 1, 2022, Greystone and GRE 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 properties in the amount
of $
| 11 |
Lease Summary Information
For the six-month periods ending November 30, 2022 and 2021:
Summary of Lease Activity
| 2022 | 2021 | |||||||
| 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 | ||||||||
| Operating leases | ||||||||
| Weighted-average discount rate - | ||||||||
| Financing leases | % | % | ||||||
| Operating leases | % | % | ||||||
Future minimum lease payments under non-cancelable leases as of November 30, 2022, are approximately:
Schedule of Future Minimum Lease Payments
Financing Leases | Operating Leases | |||||||
| Twelve months ended November 30, 2023 | $ | $ | ||||||
| Twelve months ended November 30, 2024 | ||||||||
| Twelve months ended November 30, 2025 | ||||||||
| Twelve months ended November 30, 2026 | ||||||||
| Twelve months ended November 30, 2027 | ||||||||
| Thereafter | ||||||||
| Total future minimum lease payments | ||||||||
| Present value discount | ||||||||
| Present value of minimum lease payments | $ | $ | ||||||
Note 8. Deferred Revenue
Advances
from a customer pursuant to a contract for the sale of plastic pallets is recognized as deferred revenue. Revenue is recognized by Greystone
as pallets are shipped to the customer which totaled $
Note 9. Revenue and Revenue Recognition
Greystone’s
principal product is plastic pallets produced from recycled plastic resin. Sales are primarily to customers in the continental United
States of America. International sales are made to customers in Canada and Mexico which totaled approximately
| 12 |
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 six months ended November 30, 2022 and 2021, respectively, were as follows:
Schedule of Sale of Revenues for Customer Categories
| Category | 2022 | 2021 | ||||||
| End User Customers | % | % | ||||||
| Distributors | % | % | ||||||
Note 10. Fair Value of Financial Instruments
The following methods and assumptions are used in estimating the fair-value disclosures for financial instruments:
Debt: The carrying amount of notes with floating rates of interest approximate fair value. Fixed rate notes are valued based on cash flows using estimated rates of comparable notes. The carrying amounts reported on the consolidated balance sheets approximate fair value.
Note 11. Concentrations, Risks and Uncertainties
Greystone
derived approximately
Greystone
purchases damaged pallets from its customers at a price based on the value of the raw material content in the pallet. A majority of these
purchases, totaling $
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.
Note 12. Commitments
As
of November 30, 2022, Greystone had commitments totaling $
Note 13. Subsequent Events
By
notices dated January 9, 2023, the Department of Treasury notified Greystone of Employee Retention Credits awarded under the CARES Act
in the total amount of approximately $
| 13 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Results of Operations
General to All Periods
The unaudited consolidated statements include Greystone Logistics, Inc., and its two wholly-owned subsidiaries, Greystone Manufacturing, L.L.C. (“GSM”) and Plastic Pallet Production, Inc. (“PPP”). Greystone also consolidates the variable interest entity, Greystone Real Estate, L.L.C. (“GRE”) for the period from June 1, 2022 through July 29, 2022. Effective July 29, 2022, the relationship of Greystone as a beneficiary of GRE ceased to exist. All material intercompany accounts and transactions have been eliminated.
References to fiscal year 2023 refer to the six months and three months ended November 30, 2022. References to fiscal year 2022 refer to the six months and three months ended November 30, 2021.
Sales
Greystone’s primary focus is to provide quality plastic pallets to its existing customers while continuing its marketing efforts to broaden its customer base. Greystone’s existing customers are primarily located in the United States and engaged in the beverage, pharmaceutical and other industries. Greystone has generated, and plans to continue to generate, interest in its pallets by attending trade shows sponsored by industry segments that would benefit from Greystone’s products. Greystone hopes to gain wider product acceptance by marketing the concept that the widespread use of plastic pallets could greatly reduce the destruction of trees on a worldwide basis. Greystone’s marketing is conducted through contract distributors, its President and other employees.
Personnel
Greystone had full-time-equivalents of approximately 195 and 264 full-time employees and 40 and 73 temporary employees as of November 30, 2022 and 2021, respectively. Full-time equivalent is a measure based on time worked.
Six Months Ended November 30, 2022 Compared to Six Months Ended November 30, 2021
Sales
Sales for fiscal year 2023 were $31,055,273 compared to $30,618,966 in fiscal year 2022 for an increase of $436,307, or 1.4%. While the quantity of pallets sold in fiscal year 2023 decreased by approximately 13% from the prior period, the average price of pallets sold increased by approximately 15%. The increase in the average price of pallets sold during the current period is the result of product mix and price increases.
Greystone had three customers which accounted for approximately 73% and 74% of sales in fiscal years 2023 and 2022, respectively. Greystone is not able to predict the future needs of these major customers and will continue its efforts to grow sales through the addition of new customers developed through Greystone’s marketing efforts.
Cost of Sales
Cost of sales in fiscal year 2023 was $27,369,753, or 88% of sales, compared to $28,179,906, or 92% of sales, in fiscal year 2022. The decrease in cost of sales to sales in fiscal year 2023 from the prior period was primarily the result of selling price increases as noted under Sales and the cost control measures implemented by Greystone to offset the impact of lower pallet production. Greystone’s inflexible costs of production are a significant factor impacting the profit margins realized from the sale of product. While cost of sales to sales showed improvements over the prior period, Greystone anticipates continued improvements during the remainder of the current year as increases are anticipated in pallet production.
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Selling, General and Administrative Expenses
Selling, general and administrative expenses (SG&A) were $2,311,579, or 7.4% of sales, in fiscal year 2023 compared to $2,352,504, or 7.7% of sales, in fiscal year 2022 for a decrease of $(40,925). SG&A during the current period compared to the prior period shows general consistency.
Other Income (Expenses)
During fiscal year 2023, Greystone recognized a gain on the deconsolidation of the variable interest entity GRE in the amount of $569,997. During fiscal year 2022, a gain was recognized on the forgiveness of debt plus accrued interest in the amount of $3,068,497 for the Paycheck Protection Program loan under the Coronavirus Aid, Relief, and Economic Security Act.
Other income was $6,318 in fiscal year 2023 and $32,043 in fiscal year 2022 from the sale of scrap material and a gain on the sale of assets in the prior period.
Interest expense was $507,762 in fiscal year 2023 compared to $429,123 in fiscal year 2022 for an increase of $78,639. The increase is attributable to increases in the prime rate of interest which was 7.00% as of November 30, 2022 compared to 3.25% as November 30, 2021.
Provision for Income Taxes
The provision for (benefit from) income taxes was $256,000 and $(135,000) in fiscal years 2023 and 2022, respectively. The effective tax rate differs from federal statutory rates principally due to state income taxes, charges or income which have no tax benefit or expense, changes in the valuation allowance, and the basis that net income from GRE is not taxable at the corporate level because GRE is a limited liability company of which Greystone has no equity ownership.
Based upon a review of its income tax filing positions, Greystone believes that its positions would be sustained upon an audit by the Internal Revenue Service and does not anticipate any adjustments that would result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded.
Net Income
Greystone recorded net income of $1,186,494 in fiscal year 2023 compared to $2,892,973 in fiscal year 2022 primarily for the reasons discussed above.
Net Income Attributable to Common Stockholders
The net income attributable to common stockholders (net income less preferred dividends and GRE’s net income) for fiscal year 2023 was $908,128, or $0.03 per share, compared $2,592,077, or $0.09 per share, in fiscal year 2022 primarily for the reasons discussed above.
| 15 |
Three Months Ended November 30, 2022 Compared to Three Months Ended November 30, 2021
Sales
Sales for fiscal year 2023 were $12,101,674 compared to $15,844,567 in fiscal year 2022 for a decrease of $(3,742,893). This decrease in sales from fiscal year 2022 was principally the result of a decrease of approximately 27% in the quantity of pallets sold offset somewhat by an increase of approximately 5% in the average price per pallet sold.
Greystone had three customers which accounted for approximately 66% and 78% of sales in fiscal years 2023 and 2022, respectively. Greystone is not able to predict the future needs of these major customers and will continue its efforts to grow sales through the addition of new customers developed through Greystone’s marketing efforts.
Cost of Sales
Cost of sales in fiscal year 2023 was $10,879,300, or 90% of sales, compared to $14,867,601, or 94% of sales, in fiscal year 2022. The decrease in cost of sales to sales in fiscal year 2023 from the prior period was primarily the result of selling price increases as noted under Sales and cost control measures implemented by Greystone to offset the impact of lower pallet production during the current period. Greystone’s inflexible costs of production are a significant factor impacting the profit margins realized from the sale of product. While cost of sales to sales showed improvements over the prior period, Greystone anticipates continued improvements during the remainder of the current year as increases are anticipated in pallet production.
Selling, General and Administrative Expenses
Selling, general and administrative expenses (SG&A) were $1,205,988, or 10.0% of sales, in fiscal year 2023 compared to $1,133,900, or 7.2% of sales, in fiscal year 2022 for an increase of $72,088. SG&A costs during the current period compared to the prior period showed general consistency. The increase in the percent of SG&A to sales results from the decline of sales in the current period.
Other Income (Expenses)
Other income from sales of scrap material was $683 in fiscal year 2023 compared to $5,218 in fiscal year 2022.
Interest expense was $288,316 in fiscal year 2023 compared to $205,769 in fiscal year 2022 for an increase of $82,547. The increase is attributable to increases in the prime rate of interest which was 7.00% as of November 30, 2022 compared to 3.25% as November 30, 2021.
Provision for Income Taxes
The benefit from income taxes was $84,000 and $128,000 in fiscal years 2023 and 2022, respectively. The effective tax rate differs from federal statutory rates due principally to state income taxes, charges or income which have no tax benefit or expense, changes in the valuation allowance, and the basis that the net income from GRE is not taxable at the corporate level because GRE is a limited liability company of which Greystone has no equity ownership.
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.
| 16 |
Net Loss
Greystone recorded net losses of $(187,247) in fiscal year 2023 compared to $(229,485) in fiscal year 2022 primarily for the reasons discussed above.
Net Loss Attributable to Common Stockholders
The net loss attributable to common stockholders (net loss less preferred dividends and GRE’s net income) for fiscal year 2023 was $(306,596), or $(0.01) per share, compared $(378,844), or $(0.01) per share, in fiscal year 2022 primarily for the reasons discussed above.
Liquidity and Capital Resources
A summary of cash flows for the six months ended November 30, 2022 is as follows:
| Cash used in operating activities | $ | (3,309,912 | ) | |
| Cash used in investing activities | $ | (1,808,201 | ) | |
| Cash provided by financing activities | $ | 2,994,102 |
The contractual obligations of Greystone are as follows:
| Total | Less than 1 year | 1-3 years | 4-5 years | Thereafter | ||||||||||||||||
| Long-term debt | $ | 17,163,563 | $ | 2,101,460 | $ | 9,116,477 | $ | 5,405,050 | $ | 540,576 | ||||||||||
| Financing lease rents | $ | 90,701 | $ | 49,880 | $ | 39,318 | $ | 1,503 | $ | - | ||||||||||
| Operating lease rents | $ | 8,283,008 | $ | 564,816 | $ | 1,080,792 | $ | 1,076,920 | $ | 5,560,480 | ||||||||||
| Commitments | $ | 5,065,888 | $ | 5,065,888 | $ | - | $ | - | $ | - | ||||||||||
Greystone had a working capital of $2,811,905 as of November 30, 2022. To provide for the funding to meet Greystone’s operating activities and contractual obligations as of November 30, 2022, Greystone will have to continue to produce positive operating results or explore various options including additional long-term debt and equity financing. However, there is no guarantee that Greystone will continue to create positive operating results or be able to raise sufficient capital to meet these obligations.
By notice dated January 9, 2023, the Department of Treasury notified Greystone of Employee Retention Credits awarded under the CARES Act in the total amount of approximately $3,270,000 due to Greystone for the quarters ended June 30, 2021 and September 30, 2021. Greystone anticipates the receipt of these funds during its fiscal third quarter 2023, and plans to use the funds to improve its working capital, reduce debt, and cover portions of our unfinanced commitments.
As of November 30, 2022, Greystone had commitments for capital expenditures of approximately $5.0 million of which $3.5 million is available under the advancing term loan with IBC, see Note 6 to the consolidated financial statements.
| 17 |
A substantial amount of the Greystone’s debt financing has resulted primarily from bank notes which are guaranteed by certain officers and directors of Greystone and from loans provided by certain officers and directors of Greystone. Greystone continues to be dependent upon its officers and directors to provide and/or secure additional financing and there is no assurance that its officers and directors will continue to do so. As such, there is no assurance that funding will be available for Greystone to continue operations.
Greystone has 50,000 outstanding shares of cumulative 2003 Preferred Stock with a liquidation preference of $5,000,000 and a preferred dividend rate of the prime rate of interest plus 3.25%. Greystone does not anticipate that it will make cash dividend payments to any holders of its common stock unless and until the financial position of Greystone improves through increased revenues, another financing transaction or otherwise. Pursuant to the IBC Loan Agreement, as discussed in Note 6 to the consolidated financial statements, Greystone may pay dividends on its preferred stock in an amount not to exceed $500,000 per year.
Forward Looking Statements and Material Risks
This Quarterly Report on Form 10-Q includes certain statements that may be deemed “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are made in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, that address activities, events or developments that Greystone expects, believes or anticipates will or may occur in the future, including decreased costs, securing financing, the profitability of Greystone, potential sales of pallets or other possible business developments, are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties. The forward-looking statements contained in this Quarterly Report on Form 10-Q could be affected by any of the following factors: Greystone’s prospects could be affected by changes in availability of raw materials, competition, rapid technological change and new legislation regarding environmental matters; Greystone may not be able to secure additional financing necessary to sustain and grow its operations; and a material portion of Greystone’s business is and will be dependent upon a few large customers and there is no assurance that Greystone will be able to retain such customers. These risks and other risks that could affect Greystone’s business are more fully described in Greystone’s Form 10-K for the fiscal year ended May 31, 2022, which was filed on August 19, 2022. Actual results may vary materially from the forward-looking statements. Greystone undertakes no duty to update any of the forward-looking statements contained in this Quarterly Report on Form 10-Q.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable.
Item 4. Controls and Procedures.
As of the end of the period covered by this Quarterly Report on Form 10-Q, Greystone carried out an evaluation under the supervision of Greystone’s Chief Executive Officer and Chief Financial Officer of the effectiveness of the design and operation of Greystone’s disclosure controls and procedures pursuant to the Securities Exchange Act Rules 13a-15(e) and 15d-15(e). Based on an evaluation as of May 31, 2022, Warren F. Kruger, Greystone’s Chief Executive Officer, and William W. Rahhal, Greystone’s Chief Financial Officer, identified no material weakness in Greystone’s internal control over financial reporting. As a result, Greystone’s CEO and Chief Financial Officer concluded that the design and operation of Greystone’s disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) were effective as of November 30, 2022.
During the three months ended November 30, 2022, there were no changes in Greystone’s internal controls over financial reporting that have materially affected, or that are reasonably likely to materially affect, Greystone’s internal control over financial reporting.
| 18 |
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 1A. Risk Factors.
Not applicable.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None.
Item 6. Exhibits.
The following exhibits are filed or furnished as part of this Quarterly Report on Form 10-Q.
| 19 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| GREYSTONE LOGISTICS, INC. | |
| (Registrant) | |
| Date: January 17, 2023 | /s/ Warren F. Kruger |
| Warren F. Kruger, President and Chief | |
| Executive Officer (Principal Executive Officer) | |
| Date: January 17, 2023 | /s/ William W. Rahhal |
| William W. Rahhal, Chief Financial Officer | |
| (Principal Financial Officer and Principal Accounting Officer) |
| 20 |
Index to Exhibits
The following exhibits are filed or furnished as part of this Quarterly Report on Form 10-Q.
| 21 |
Exhibit 31.1
CERTIFICATION
I, Warren F. Kruger, certify that:
| 1. | I have reviewed this annual report on Form 10-Q of Greystone Logistics, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| January 17, 2023 | /s/ Warren F. Kruger |
| Warren F. Kruger | |
| President and Chief Executive Officer |
Exhibit 31.2
CERTIFICATION
I, William W. Rahhal, certify that:
| 1. | I have reviewed this annual report on Form 10-Q of Greystone Logistics, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| January 17, 2023 | /s/ William W. Rahhal |
| William W. Rahhal | |
| Chief Financial Officer |
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-Q for the period ending November 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Warren F. Kruger, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| January 17, 2023 | /s/ Warren F. Kruger |
| Warren F. Kruger | |
| President and Chief Executive Officer |
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
The foregoing certification is being furnished to the Securities and Exchange Commission as an exhibit to the Report and shall not be considered filed as part of the Report.
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the annual report of Greystone Logistics, Inc. (the “Company”) on Form 10-Q for the period ending November 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, William W. Rahhal, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| January 17, 2023 | /s/ William W. Rahhal |
| William W. Rahhal | |
| Chief Financial Officer |
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
The foregoing certification is being furnished to the Securities and Exchange Commission as an exhibit to the Report and shall not be considered filed as part of the Report.