Note 1 - Basis of Financial Statements

6 Months Ended

Nov. 30, 2023

Notes to Financial Statements

Basis of Accounting [Text Block]

Note 1. Basis of Financial Statements

In the opinion of Greystone Logistics, Inc. (“Greystone” or the “Company”), 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, 2023, the results of its operations for the six months and three months ended November 30, 2023 and 2022 and its cash flows for the six months ended November 30, 2023 and 2022. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the fiscal year ended May 31, 2023 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, 2023 and 2022 are not necessarily indicative of the results to be expected for the full fiscal year.

The unaudited 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 unaudited consolidated financial statements.

GRE owns two buildings located in Bettendorf, IA, which are occupied by Greystone. GRE is wholly owned by Robert B. Rosene, Jr., a member of Greystone's Board of Directors. Effective July 29, 2022, GRE paid off its mortgage note payable, and in conjunction with the Company's refinancing described in Note 6, GRE was removed from the cross-collateralization agreement. Following these transactions Greystone was no longer determined to be the primary beneficiary of GRE. Accordingly, GRE was deconsolidated from the Greystone consolidated financial statements as of July 29, 2022, resulting in the recognition of a gain in the amount of $569,997. Subsequent to the deconsolidation, the Company entered into a new lease agreement with GRE and recorded right-of-use assets and liabilities for the new lease. See Note 7.