STOCKHOLDERS' EQUITY

12 Months Ended

May 31, 2013

STOCKHOLDERS' EQUITY [Abstract]

STOCKHOLDERS' EQUITY

Note 8.    STOCKHOLDERS' EQUITY

Convertible Preferred Stock

In September 2003, Greystone issued 50,000 shares of Series 2003, cumulative, convertible preferred stock, par value $0.0001, for a total purchase price of $5,000,000.  Each share of the preferred stock has a stated value of $100 and a dividend rate equal to the prime rate of interest plus 3.25% and may be converted into common stock at the conversion rate of $1.50 per share or an aggregate of 3,333,333 shares of common stock. The holder of the preferred stock has been granted certain voting rights so that such holder has the right to elect a majority of the Board of Directors of Greystone.

Preferred stock dividends must be fully paid before a dividend on the common stock may be paid.  Dividends in arrears on the preferred stock were $3,250,889 and $2,924,108 as of May 31, 2013 and 2012, respectively.  The holders of the preferred stock waived their rights to compounded interest on unpaid dividends during the period from inception through May 31, 2013.  The preferred dividend liability is classified as a long-term liability due to the restrictions placed on payment of dividends pursuant to the Loan Agreement with F&M Bank & Trust Company as further discussed in Note 5 - Long-Term Debt.