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, 2019 and the results of its operations and cash flows for the six months and three months ended November
30, 2019 and 2018. These consolidated financial statements should be read in conjunction with the audited consolidated financial
statements as of and for the fiscal year ended May 31, 2019 and the notes thereto included in Greystone’s Form 10-K for
such period. The results of operations for the six months and three months ended November 30, 2019 and 2018 are not necessarily
indicative of the results to be expected for the full fiscal year.
The
consolidated financial statements of Greystone include its wholly-owned subsidiaries, Greystone Manufacturing, L.L.C. (“GSM”)
and Plastic Pallet Production, Inc. (“PPP”), and the variable interest entity, Greystone Real Estate, L.L.C. (“GRE”).
GRE owns two buildings located in Bettendorf, Iowa which are leased to GSM. All material intercompany accounts and transactions
have been eliminated in the consolidated financial statements.
Note
2. Earnings Per Share
Basic
earnings per share is based on the weighted-average effect of all common shares issued and outstanding and is calculated by dividing
net income attributable to common stockholders by the weighted-average shares outstanding during the period. Diluted earnings
per share is calculated by dividing net income attributable to common stockholders by the weighted-average number of common shares
used in the basic earnings per share calculation plus the number of common shares that would be issued assuming exercise or conversion
of all potentially dilutive common shares outstanding.
Greystone
excludes equity instruments from the calculation of diluted earnings per share if the effect of including such instruments is
anti-dilutive. Instruments which have an anti-dilutive effect for the six months and three months ended November 30 are as
follows:
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
Preferred stock convertible into common stock
|
|
|
3,333,333
|
|
|
|
3,333,333
|
|
The
following tables set forth the computation of basic and diluted earnings per share:
For
the six months ended November 30, 2019 and 2018:
|
|
2019
|
|
|
2018
|
|
Numerator -
|
|
|
|
|
|
|
|
|
Net income attributable to common stockholders
|
|
$
|
746,678
|
|
|
$
|
730,281
|
|
Denominator -
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding - basic
|
|
|
28,361,201
|
|
|
|
28,361,201
|
|
Incremental shares from assumed conversion of options and warrants
|
|
|
644,231
|
|
|
|
648,748
|
|
Diluted shares
|
|
|
29,005,432
|
|
|
|
29,009,949
|
|
Income per share -
|
|
|
|
|
|
|
|
|
Basic and Diluted
|
|
$
|
0.03
|
|
|
$
|
0.03
|
|
For
the three months ended November 30, 2019 and 2018:
|
|
2019
|
|
|
2018
|
|
Numerator -
|
|
|
|
|
|
|
|
|
Net income attributable to common stockholders
|
|
$
|
304,428
|
|
|
$
|
128,893
|
|
Denominator -
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding - basic
|
|
|
28,361,201
|
|
|
|
28,361,201
|
|
Incremental shares from assumed conversion of options and warrants
|
|
|
639,959
|
|
|
|
657,061
|
|
Diluted shares
|
|
|
29,001,160
|
|
|
|
29,018,262
|
|
Income per share -
|
|
|
|
|
|
|
|
|
Basic and Diluted
|
|
$
|
0.01
|
|
|
$
|
0.00
|
|
Note
3. Inventory
Inventory
consists of the following:
|
|
November 30, 2019
|
|
|
May 31, 2019
|
|
Raw materials
|
|
$
|
1,701,839
|
|
|
$
|
1,295,991
|
|
Finished goods
|
|
|
1,991,152
|
|
|
|
1,325,000
|
|
Total inventory
|
|
$
|
3,692,991
|
|
|
$
|
2,620,991
|
|
Note
4. Property, Plant and Equipment
A
summary of property, plant and equipment for Greystone is as follows:
|
|
November 30, 2019
|
|
|
May
31, 2019
|
|
Production machinery and equipment
|
|
$
|
47,323,256
|
|
|
$
|
45,645,910
|
|
Plant buildings and land
|
|
|
6,724,513
|
|
|
|
6,336,855
|
|
Leasehold improvements
|
|
|
1,129,474
|
|
|
|
979,890
|
|
Furniture and fixtures
|
|
|
601,586
|
|
|
|
563,074
|
|
Right-to-use assets under operating leases
|
|
|
218,634
|
|
|
|
180,794
|
|
|
|
|
55,997,463
|
|
|
|
53,706,523
|
|
|
|
|
|
|
|
|
|
|
Less: Accumulated depreciation and amortization
|
|
|
(23,583,987
|
)
|
|
|
(21,026,051
|
)
|
|
|
|
|
|
|
|
|
|
Net Property, Plant and Equipment
|
|
$
|
32,413,476
|
|
|
$
|
32,680,472
|
|
Production
machinery and equipment includes right-to-use equipment capitalized pursuant to financing leases in the amount of $7,861,233 at
November 30, 2019 and May 31, 2019. The financing leases all include an option to purchase which management anticipates exercising
and, accordingly, the related equipment is being amortized over the estimated useful life using the straight-line method over
3.5 years for pallet molds and 12 years for injection molding machines.
Production
machinery includes deposits on equipment in the amount of $923,063 at November 30, 2019 which have not been placed into service.
Two plant buildings and land are owned by GRE, a variable interest entity (“VIE”), having a net book value of $2,838,613
at November 30, 2019.
Depreciation
expense, including amortization expense related to right-to-use assets under financing leases, for the six months ended November
30, 2019 and 2018 was $2,557,936 and $2,131,971, respectively.
Note
5. Related Party Transactions/Activity
Yorktown
Management & Financial Services, LLC
Yorktown
Management & Financial Services, LLC (“Yorktown”), an entity wholly-owned by Greystone’s CEO and President,
owns and rents to Greystone (1) grinding equipment used to grind raw materials for Greystone’s pallet production and (2)
extruders for pelletizing recycled plastic into pellets for resale and for use as raw material in the manufacture of pallets.
GSM pays weekly rental fees to Yorktown of $27,500 for use of Yorktown’s grinding equipment and pelletizing equipment. Rental
fees were $715,000 for the each of the six months ended November 30, 2019 and 2018.
Effective
January 1, 2017, Greystone and Yorktown entered into a five-year lease for office space at a monthly rental of $4,000 per month.
Total rent expense was $24,000 for each of the six months ended November 30, 2019 and 2018. At November 30, 2019, future minimum
payments under the non-cancelable operating lease for the remaining three years are $48,000, $48,000, and $4,000.
TriEnda
Holdings, L.L.C.
TriEnda
Holdings, L.L.C. (“TriEnda”) is a manufacturer of plastic pallets, protective packing and dunnage utilizing thermoform
processing for which Warren Kruger, Greystone’s President and CEO, serves TriEnda as the non-executive Chairman of the Board
and is a partner in a partnership which has a majority ownership interest in TriEnda. Greystone periodically purchases material
and pallets from TriEnda. Purchases for the six months ended November 30, 2019 and 2018 totaled $5,400 and $42,349, respectively.
Green
Plastic Pallets
Greystone
sells plastic pallets to Green Plastic Pallets (“Green”), an entity that is owned by James Kruger, brother to Warren
Kruger, Greystone’s President and CEO. Greystone had sales to Green of $271,320 and $167,400 for the six months ended November
30, 2019 and 2018, respectively. The account receivable due from Green at November 30, 2019 was $96,900.
Note
6. Long-term Debt
Debt
as of November 30, 2019 and May 31, 2019 is as follows:
|
|
November 30, 2019
|
|
|
May 31, 2019
|
|
Term loan A payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.0%, maturing April 30, 2023
|
|
$
|
2,861,716
|
|
|
$
|
3,234,947
|
|
|
|
|
|
|
|
|
|
|
Term loan C payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.0%, maturing August 4, 2024
|
|
|
1,287,485
|
|
|
|
1,399,490
|
|
|
|
|
|
|
|
|
|
|
Term loan D payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.75%, maturing January 10, 2022
|
|
|
1,447,506
|
|
|
|
1,744,235
|
|
|
|
|
|
|
|
|
|
|
Term loan E payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.75%, maturing January 10, 2022
|
|
|
814,945
|
|
|
|
927,199
|
|
|
|
|
|
|
|
|
|
|
Term loan F payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 5.25%, maturing February 8, 2021
|
|
|
3,082,407
|
|
|
|
3,398,247
|
|
|
|
|
|
|
|
|
|
|
Term loan G payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 5.25%, maturing April 30, 2024
|
|
|
858,375
|
|
|
|
876,934
|
|
|
|
|
|
|
|
|
|
|
Term loan H payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 5.25%, maturing January 1, 2022
|
|
|
564,067
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Revolving loan payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 5.5%, due January 31, 2021
|
|
|
2,923,000
|
|
|
|
3,205,000
|
|
|
|
|
|
|
|
|
|
|
Note payable to First Bank, prime rate of interest plus 1.45% but not less than 4.95%, monthly principal and interest payment of $30,628, due August 21, 2021, secured by production equipment
|
|
|
643,089
|
|
|
|
800,488
|
|
|
|
|
|
|
|
|
|
|
Term loan payable by GRE to International Bank of Commerce, interest rate of 5.5%, monthly principal and interest payment of $27,688, due April 30, 2023
|
|
|
2,362,662
|
|
|
|
2,461,116
|
|
|
|
|
|
|
|
|
|
|
Note payable to Robert Rosene, 7.5% interest, due January 15, 2021
|
|
|
4,340,285
|
|
|
|
4,426,631
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
200,934
|
|
|
|
223,177
|
|
Total long-term debt
|
|
|
21,386,471
|
|
|
|
22,697,464
|
|
Debt issuance costs, net of amortization
|
|
|
(38,466
|
)
|
|
|
(37,686
|
)
|
Total debt, net of debt issuance costs
|
|
|
21,348,005
|
|
|
|
22,659,778
|
|
Less: Current portion of long-term debt
|
|
|
(3,442,269
|
)
|
|
|
(3,030,630
|
)
|
Long-term debt, net of current portion
|
|
$
|
17,905,736
|
|
|
$
|
19,629,148
|
|
The
prime rate of interest as of November 30, 2019 was 4.75%.
Loan
Agreement between Greystone and IBC
The
Loan Agreement (“IBC Loan Agreement”), dated January 31, 2014 and as amended from time to time, among Greystone and
GSM (the “Borrowers”) and International Bank of Commerce (“IBC”) provides for certain term loans and a
revolver loan.
Effective
July 1, 2019, the Borrowers and IBC entered into the Tenth Amendment to the IBC Loan Agreement providing for Term Loan H in the
amount of $672,000 with a maturity date of January 1, 2022, for the procurement of production equipment.
The
IBC term loans make equal monthly payments of principal and interest in such amounts sufficient to amortize the principal balance
as follows: (i) Term Loan A over a seven-year period beginning February 29, 2016 (currently $77,550 per month), (ii) Term Loan
C over a seven-year period beginning November 30, 2017 (currently $25,205 per month) and (iii) Term Loan D over a four-year period
beginning February 10, 2019 (currently $57,469 per month), (iv) Term Loan E over a four-year period beginning February 10, 2019
(currently $23,060 per month), (v) Term Loan F over a five-year period beginning February 28, 2019 (currently $68,849 per month),
(vi) Term Loan G over a fifteen-year period beginning April 30, 2019 (currently $7,466 per month) and (vii) Term Loan H over 30
months beginning August 1, 2019 (currently $24,203 per month). The monthly payments of principal and interest on the IBC term
loans may vary as a result of changes in the prime rate of interest.
The
IBC Loan Agreement, as amended, provides a revolving loan in an aggregate principal amount of up to $4,000,000 (the “Revolving
Loan”). The amount which can be borrowed from time to time is dependent upon the amount of the borrowing base not to exceed
$4,000,000. The Revolving Loan bears interest at the greater of the prime rate of interest plus 0.5%, or 5.50% and matures January
31, 2021. The Borrowers are required to pay all interest accrued on the outstanding principal balance of the Revolving Loan on
a monthly basis. Any principal on the Revolving Loan that is prepaid by the Borrowers does not reduce the original amount available
to the Borrowers.
The
IBC Loan Agreement, among other things, requires a quarterly affirmation that the Borrowers have maintained a debt service coverage
ratio of 1:25 to 1:00. As of November 30, 2019, Greystone was not in compliance with this debt service coverage ratio. IBC has
issued a waiver, dated January 14, 2020, with respect to this event of noncompliance.
The
IBC Loan Agreement includes customary events of default, including events of default relating to non-payment of principal and
other amounts owing under the IBC Loan Agreement from time to time, inaccuracy of representations, violation of covenants, defaults
under other agreements, bankruptcy and similar events, the death of a guarantor, certain material adverse changes relating to
a Borrower or guarantor, certain judgments or awards against a Borrower, or government action affecting a Borrower’s or
guarantor’s ability to perform under the IBC Loan Agreement or the related loan documents. Among other things, a default
under the IBC Loan Agreement would permit IBC to cease lending funds under the IBC Loan Agreement, and require immediate repayment
of any outstanding notes with interest and any unpaid accrued fees.
The
IBC Loan Agreement is secured by a lien on substantially all of the assets of the Borrowers. In addition, the IBC Loan Agreement
is secured by a mortgage granted by GRE on the real property owned by GRE in Bettendorf, Iowa (the “Mortgage”). GRE
is owned by Warren Kruger, Greystone’s President and CEO, and Robert B. Rosene, Jr., a director of Greystone. Messrs. Kruger
and Rosene have provided a combined limited guaranty of the Borrowers’ obligations under the IBC Loan Agreement, with such
guaranty being limited to a combined amount of $6,500,000 (the “Guaranty”). The Mortgage and the Guaranty also secure
or guaranty, as applicable, the obligations of GRE under the Loan Agreement between GRE and IBC dated January 31, 2014 as discussed
in the following paragraph.
Loan
Agreement between GRE and IBC
On
August 10, 2018, GRE and IBC entered into an amended agreement to extend the maturity of the note to April 30, 2023 and increase
the interest rate to 5.5%. The note is secured by a mortgage on the two buildings in Bettendorf, Iowa, which are leased to Greystone.
Note
Payable between Greystone and Robert B. Rosene, Jr.
Effective
December 15, 2005, Greystone entered into an agreement with Robert B. Rosene, Jr., a member of Greystone’s board of directors,
to convert $2,066,000 of advances into an unsecured note payable at 7.5% interest.
Effective
June 1, 2016, the note was restated (the “Restated Note”) to combine the outstanding principal, $2,066,000, and accrued
interest, $2,475,690, into an unsecured note payable of $4,541,690 with an extended maturity date of January 15, 2021. The Restated
Note provides that accrued interest is payable monthly and allows Greystone to use commercially reasonable efforts to pay such
amounts as allowed by the IBC Loan Agreement against the interest accrued prior to the restatement. The balance of the note at
November 30, 2019 was $4,340,285.
Maturities
Maturities
of Greystone’s long-term debt for the five years subsequent to November 30, 2019 are $3,442,269, $12,683,643, $1,919,583,
$2,416,434 and $924,542.
Note
7. Leases
Financing
Leases
Financing
leases as of November 30, 2019 and May 31, 2019:
|
|
November 30, 2019
|
|
|
May 31, 2019
|
|
Non-cancellable financing leases
|
|
$
|
5,843,290
|
|
|
$
|
6,754,819
|
|
Less: Current portion
|
|
|
(2,111,028
|
)
|
|
|
(1,516,629
|
)
|
Non-cancellable financing leases, net of current portion
|
|
$
|
3,732,262
|
|
|
$
|
5,238,190
|
|
Greystone
and an unrelated private company entered into three lease agreements for certain production equipment with a total cost of approximately
$6.9 million which were effective February 24, 2018, August 2, 2018 and December 21, 2018, respectively, with five-year terms
and a capitalized interest rate of 7.4%. Each of the lease agreements include a bargain purchase option to acquire the production
equipment at the end of the lease term. The leased equipment is principally used to produce pallets for the private company. Lease
payments are made as a credit on the sales invoice at the rate of $3.32 for each pallet produced and shipped from the respective
leased equipment. The estimated aggregate monthly rental payments are approximately $178,000. The rent payments can vary each
month depending on the quantity of pallets produced from each machine. Due to improvements in the production process, pallet production
has increased since May 31, 2019 thereby resulting in an increase in the estimated aggregate future rental payments. The lease
agreements provide for minimum monthly lease rental payments based upon the total pallets sold in excess of a specified amount
not to exceed the monthly productive capacity of the leased machines.
Effective
December 28, 2018, Yorktown purchased certain production equipment from Greystone at net book value of $968,168 and entered into
a lease agreement with Greystone for the equipment with a monthly rent of $27,915 for the initial thirty-six months and $7,695
for the following twelve months and maturing December 27, 2022. The lease agreement has a $10,000 purchase option at the end of
the lease.
The
production equipment under the non-cancelable financing leases has a gross carrying amount of $7,861,233 at November 30, 2019.
Amortization of the carrying amount of approximately $416,000 and $449,000 was included in depreciation expense for the six months
ended November 30, 2019 and 2018, respectively.
Operating
Leases
Greystone
recognize a lease liability for each lease based on the present value of remaining minimum fixed rental payments, using a discount
rate that approximates the rate of interest for a collateralized loan over a similar term. A right-of-use asset, reported in property,
plant and equipment on the consolidated balance sheets, is recognized for each lease, valued at the lease liability. Minimum fixed
rental payments are recognized on a straight-line basis over the life of the lease as costs and expenses on the consolidated statement
of income. Variable and short-term rental payments are recognized as costs and expenses as they are incurred.
Greystone
has three non-cancellable operating leases for (i) equipment with a fifty-two month term and a forty-eight month term and a discount
rate of 5.40% and (ii) office space on a sixty month term and a discount rate of 5.0%. The leases are single-term with constant
monthly rental rates.
Lease
Summary Information
For
the six months ended November 30, 2019 and 2018:
|
|
2019
|
|
|
2018
|
|
Lease Expense
|
|
|
|
|
|
|
|
|
Financing lease expense -
|
|
|
|
|
|
|
|
|
Amortization of right-of-use assets
|
|
$
|
416,000
|
|
|
$
|
449,000
|
|
Interest on lease liabilities
|
|
|
220,255
|
|
|
|
126,514
|
|
Operating lease expense
|
|
|
39,650
|
|
|
|
24,000
|
|
Short-term lease expense
|
|
|
797,835
|
|
|
|
749,843
|
|
Total
|
|
$
|
1,473,740
|
|
|
$
|
1,349,357
|
|
|
|
|
|
|
|
|
|
|
Other Information
|
|
|
|
|
|
|
|
|
Cash paid for amounts included in the measurement of lease liabilities for finance leases -
|
|
|
|
|
|
|
|
|
Operating cash flows
|
|
$
|
220,255
|
|
|
$
|
126,514
|
|
Financing cash flows
|
|
$
|
911,529
|
|
|
$
|
1,333,699
|
|
Cash paid for amounts included in the measurement of lease liabilities for operating leases -
|
|
|
|
|
|
|
|
|
Operating cash flows
|
|
$
|
39,650
|
|
|
$
|
24,000
|
|
Right-of-use assets obtained in exchange for lease liabilities -
|
|
|
|
|
|
|
|
|
Financing leases
|
|
$
|
-
|
|
|
$
|
2,333,333
|
|
Operating leases
|
|
$
|
67,750
|
|
|
$
|
-
|
|
Weighted-average remaining lease term (in years) -
|
|
|
|
|
|
|
|
|
Financing leases
|
|
|
3.2
|
|
|
|
3.4
|
|
Operating leases
|
|
|
3.5
|
|
|
|
3.1
|
|
Weighted-average discount rate -
|
|
|
|
|
|
|
|
|
Financing leases
|
|
|
7.1
|
%
|
|
|
7.0
|
%
|
Operating leases
|
|
|
5.3
|
%
|
|
|
5.0
|
%
|
Future
minimum lease payments under non-cancelable leases as of November 30, 2019, are approximately:
|
|
Financing
Leases
|
|
|
Operating
Leases
|
|
Twelve months ended November 30, 2020
|
|
$
|
2,471,000
|
|
|
$
|
81,881
|
|
Twelve months ended November 30, 2021
|
|
|
2,471,000
|
|
|
|
81,881
|
|
Twelve months ended November 30, 2022
|
|
|
1,506,000
|
|
|
|
37,881
|
|
Twelve months ended November 30, 2023
|
|
|
-
|
|
|
|
27,751
|
|
Twelve months ended November 30, 2024
|
|
|
-
|
|
|
|
9,037
|
|
Total future minimum lease payments
|
|
|
6,448,000
|
|
|
|
238,431
|
|
Present value discount
|
|
|
604,710
|
|
|
|
19,798
|
|
Present value of minimum lease payments
|
|
$
|
5,843,290
|
|
|
$
|
218,633
|
|
Note
8. Deferred Revenue
Advances
from a customer pursuant to a contract for the sale of plastic pallets is recognized as deferred revenue. Revenue is recognized
by Greystone as pallets are shipped to the customer(s). Customer advances totaled $-0- and $3,280,500 during the six months ended
November 30, 2019 and 2018, respectively. Revenue recognition from customer advances during the six months ended November 30,
2019 was $686,572. The unrecognized balance of deferred revenue at November 30, 2019 and May 31, 2019, was $1,514,495 and $2,201,067,
respectively.
Note
9. Revenue and Revenue Recognition
Revenue
is recognized at the 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 permits returns of product due to defects; however,
product returns are historically insignificant.
Greystone’s
principal product is plastic pallets produced from recycled plastic resin. Sales are primarily to customers in the continental
United States of America. International sales are made to customers in Canada and Mexico which totaled approximately $1,803,000
and $291,000 in fiscal years 2020 and 2019, respectively.
Greystone’s
customers include stocking and non-stocking distributors and direct sales to end-user customers. Sales to the following categories
of customers for the six months ended November 30, 2019 and 2018, respectively, were as follows:
Category
|
|
2019
|
|
|
2018
|
|
End Users – Major Customers
|
|
|
88
|
%
|
|
|
84
|
%
|
End Users - Other
|
|
|
1
|
%
|
|
|
2
|
%
|
Distributors
|
|
|
11
|
%
|
|
|
14
|
%
|
Note
10. Fair Value of Financial Instruments
The
following methods and assumptions are used in estimating the fair-value disclosures for financial instruments:
Debt:
The carrying amount of notes with floating rates of interest approximate fair value. Fixed rate notes are valued based on cash
flows using estimated rates of comparable notes. The carrying amounts reported on the balance sheets approximate fair value.
Note
11. Concentrations, Risks and Uncertainties
Greystone
derived approximately 88% and 84% of its total sales from four customers (three in fiscal year 2019) in fiscal years 2020 and
2019, respectively. The loss of a material amount of business from one or more of these customers could have a material adverse
effect on Greystone.
Greystone
purchases damaged pallets from its customers at a price based on the value of the raw material content in the pallet. A majority
of these purchases, totaling $1,019,279 and $814,764 in fiscal years 2020 and 2019, respectively, is from one of its major customers.
Robert
B. Rosene, Jr., a Greystone director, has provided financing and guarantees on Greystone’s bank debt. As of November 30,
2019, Greystone is indebted to Mr. Rosene in the amount of $4,340,285 for a note payable due January 15, 2021. There is no assurance
that Mr. Rosene will renew the note as of the maturity date.
Note
12. Commitments
At
November 30, 2019, Greystone had commitments totaling $2,468,000 toward the purchase of production equipment.