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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A
(AMENDMENT NO. 1)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Fiscal Year Ended May 31, 2006
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _______________ to______________
Commission file number 000-26331
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GREYSTONE LOGISTICS, INC.
(Name of small business issuer in its charter)
OKLAHOMA 75-2954680
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1613 EAST 15TH STREET, TULSA, OKLAHOMA 74120
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(Address of principal executive offices) (Zip Code)
(918) 583-7441
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(Issuer's Telephone Number)
Securities registered under Section 12(b) of the Exchange Act:
Title of each class Name of each exchange
on which registered
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NONE NONE
Securities registered under Section 12(g) of the Exchange Act:
COMMON STOCK, $0.0001 PAR VALUE
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(Title of class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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. [X] Yes [ ] No
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ ]
The issuer's revenue for the year ended May 31, 2006, was $15,956,386.
As of August 21, 2006, the aggregate market value of the voting common stock
held by non-affiliates of the registrant, computed by using the average of the
high and low price on such date, was $1,326,599.
As of August 21, 2006, the issuer had outstanding a total of 24,061,201 shares
of its $0.0001 par value common stock.
DOCUMENTS INCORPORATED BY REFERENCE
NONE.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
2
GREYSTONE LOGISTICS, INC.
FORM 10-KSB/A
(AMENDMENT NO. 1)
TABLE OF CONTENTS
PART I
Item 3. Legal Proceedings 4
3
EXPLANATORY NOTE
This Form 10-KSB/A is being filed by Greystone Logistics, Inc. (the
"Company"), as Amendment No. 1 (the "Amendment") to the Company's Annual Report
on Form 10-KSB for the fiscal year ended May 31, 2006 (the "Prior Form 10-KSB"),
to amend Part I of the Prior Form 10-KSB by adding a description of a legal
proceeding under Item 3 below. The information contained herein has not been
updated to reflect events or developments that may have occurred subsequent to
May 31, 2006.
PART I.
ITEM 3. LEGAL PROCEEDINGS
1607 Commerce Limited Partnership, a Texas limited partnership, vs. Plastic
Pallet Production, Inc., a Texas corporation, Greystone Logistics, Inc., an
Oklahoma corporation, f/k/a PalWeb Corporation, and Greystone Manufacturing,
L.L.C., an Oklahoma limited liability company, Case No. CJ-06-489W, District
Court of Cleveland County, State of Oklahoma.
The petition in the above referenced litigation was filed on March 27,
2006. The plaintiff alleges, among other things, that: (a) one of the Company's
wholly owned subsidiaries, Plastic Pallet Production, Inc., or PPP, is in
default under an equipment lease agreement dated September 8, 2003 with a
130-month term pursuant to which PPP agreed to lease certain plastic injection
molding equipment from plaintiff in exchange for monthly rental payments of
$48,000; (b) PPP is indebted to plaintiff in the amount of $576,000,
representing monthly rental payments from April, 2005 through March, 2006 along
with: (i) further amounts that will accrue through the date of trial at the rate
of $48,000 per month; (ii) interest on unpaid amounts at the rate of 18% per
annum; and (iii) attorney fees incurred in connection with the collection of the
past due amounts; and (c) the Company and its other wholly owned subsidiary,
Greystone Manufacturing, L.L.C. are liable for PPP's default under the equipment
lease agreement pursuant to a guaranty agreement. In addition, the plaintiff has
petitioned the court to declare that it has a valid, perfected security interest
in certain collateral, and seeks an order requiring that the Company assemble
such collateral and make it available for repossession and an order that the
plaintiff is entitled to notify third parties obligated on any such collateral.
The Company has filed an answer generally denying certain allegations in
the petition and asserting defenses to non-payment. The Company has entered into
settlement discussions with the plaintiff and intends to vigorously defend the
suit if it is unable to settle the case upon suitable terms.
4
ITEM 13. EXHIBITS
EXHIBIT
NO. DESCRIPTION
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2.1 Certificate of Ownership and Merger Merging PalWeb Corporation, a
Delaware corporation, into PalWeb Oklahoma Corporation, an Oklahoma
corporation, filed with the Delaware Secretary of State on May 2, 2002
(incorporated herein by reference to Exhibit 2.1 of the Company's Form
8-K12G3 dated May 2, 2002, which was filed with the SEC on May 24,
2002).
2.2 Certificate of Ownership and Merger Merging PalWeb Corporation, a
Delaware corporation, into PalWeb Oklahoma Corporation, an Oklahoma
corporation, filed with the Oklahoma Secretary of State on May 2, 2002
(incorporated herein by reference to Exhibit 2.2 of the Company's Form
8-K12G3 dated May 2, 2002, which was filed with the SEC on May 24,
2002).
3.1 Certificate of Incorporation of PalWeb Oklahoma Corporation filed with
the Oklahoma Secretary of State on May 2, 2002 (incorporated herein by
reference to Exhibit 3.1 of the Company's Form 8-K12G3 dated May 2,
2002, which was filed with the SEC on May 24, 2002).
3.2 Bylaws of PalWeb Oklahoma Corporation as adopted on May 2, 2002
(incorporated herein by reference to Exhibit 3.2 of the Company's Form
8-K12G3 dated May 2, 2002, which was filed with the SEC on May 24,
2002).
4.1 Certificate of Incorporation of PalWeb Oklahoma Corporation filed with
the Oklahoma Secretary of State on May 2, 2002 (included in Exhibit
3.1).
4.2 Certificate of the Designation, Preferences, Rights and Limitations of
PalWeb Corporation's Series 2003 Cumulative Convertible Senior
Preferred Stock (incorporated herein by reference to Exhibit 4.1 of
the Company's Form 8-K dated September 8, 2003, which was filed with
the SEC on September 23, 2003).
4.3 Certificate of Ownership and Merger Merging Greystone Logistics, Inc.,
into PalWeb Corporation filed with the Oklahoma Secretary of State on
March 18, 2005 (incorporated herein by reference to Exhibit 4.1 of the
Company's Form 8-K dated March 18, 2005, which was filed with the SEC
on March 24, 2005).
10.1 License Agreement by and between Westgate Capital Company, L.L.C., and
PalWeb Corporation dated April 20, 2001 (incorporated herein by
reference to Exhibit 10.21 of the Company's Form 10-KSB for the Fiscal
Year Ended May 31, 2002, which was filed with the SEC on September 13,
2002).
5
10.2 Non Exclusive Distribution Agreement between PalWeb Corporation and
Bosh Material Handling Incorporated dated August 5, 2002 (incorporated
herein by reference to Exhibit 10.23 of the Company's Form 10-KSB for
the Fiscal Year Ended May 31, 2002, which was filed with the SEC on
September 13, 2002).
10.3** Form of Indemnity Agreement between Members of the Board of Directors
and PalWeb Corporation (incorporated herein by reference to Exhibit
10.30 of the Company's Form 10-KSB for the Fiscal Year Ended May 31,
2002, which was filed with the SEC on September 13, 2002).
10.4 Indemnity Agreement by and between The Union Group, Inc., and Cabec
Energy Corp. dated August 31, 1998 (incorporated herein by reference
to Exhibit 10.6 of Amendment No. 3 to the Company's Form 10-SB, which
was filed on May 2, 2000).
10.5** Stock Option Plan of PalWeb Corporation (effective May 11, 2001), as
amended (incorporated herein by reference to Exhibit 10.32 of the
Company's Form 10-KSB for the Fiscal Year Ended May 31, 2002, which
was filed with the SEC on September 13, 2002).
10.6** Form of Non-Qualified Stock Option Agreement (incorporated herein by
reference to Exhibit 99.8 of the Company's Form 10-KSB for the Fiscal
Year Ended May 31, 2001, which was filed with the SEC on September 13,
2001).
10.7** Form of Incentive Stock Option Agreement (incorporated herein by
reference to Exhibit 99.9 of the Company's Form 10-KSB for the Fiscal
Year Ended May 31, 2001, which was filed with the SEC on September 13,
2001).
10.8** Form of Nonemployee Director Stock Option Agreement (incorporated
herein by reference to Exhibit 99.10 of the Company's Form 10-KSB for
the Fiscal Year Ended May 31, 2001, which was filed with the SEC on
September 13, 2001).
10.9** Form of Employee Director Incentive Stock Option Agreement
(incorporated herein by reference to Exhibit 10.36 of the Company's
Form 10-KSB for the Fiscal Year Ended May 31, 2002, which was filed
with the SEC on September 13, 2002).
10.10 Assignment and Indemnity Agreement between the Company and Paul A.
Kruger (regarding transfer of stock of PP Financial, Inc.) dated May
30, 2002 (incorporated herein by reference to Exhibit 10.39 of the
Company's Form 10-KSB for the Fiscal Year Ended May 31, 2002, which
was filed with the SEC on September 13, 2002).
6
10.11 Letter Agreement dated January 22, 2003 between Gravity Management &
Engineering Group, LLC and PalWeb Corporation (incorporated herein by
reference to Exhibit 10.48 of the Company's Form 10-KSB for the Fiscal
Year Ended May 31, 2003, which was filed with the SEC on September 15,
2003).
10.12 Asset Purchase Agreement between Greystone Plastics, Inc. and
Greystone Manufacturing, L.L.C. dated September 3, 2003 (incorporated
herein by reference to Exhibit 10.1 of The Company's Form 8-K dated
September 8, 2003, which was filed with the SEC on September 23,
2003).
10.13 Senior Secured Promissory Note in the amount of $5,000,000 payable to
Greystone Plastics, Inc. (incorporated herein by reference to Exhibit
10.2 of The Company's Form 8-K dated September 8, 2003, which was
filed with the SEC on September 23, 2003).
10.14 Real Estate Note in the amount of $2,500,000 payable to Greystone
Plastics, Inc. (incorporated herein by reference to Exhibit 10.3 of
The Company's Form 8-K dated September 8, 2003, which was filed with
the SEC on September 23, 2003).
10.15 Wraparound Promissory Note in the amount of $799,454.06 payable to
Bill Hamilton (incorporated herein by reference to Exhibit 10.4 of The
Company's Form 8-K dated September 8, 2003, which was filed with the
SEC on September 23, 2003).
10.16 Security Agreement between Greystone Plastics, Inc. and Greystone
Manufacturing, L.L.C. dated September 3, 2003 (incorporated herein by
reference to Exhibit 10.5 of The Company's Form 8-K dated September 8,
2003, which was filed with the SEC on September 23, 2003).
10.17 Asset Purchase Agreement between Plastic Pallet Production, Inc. and
1607 Commerce Limited Partnership dated September 8, 2003
(incorporated herein by reference to Exhibit 10.7 of The Company's
Form 8-K dated September 8, 2003, which was filed with the SEC on
September 23, 2003).
10.18 Letter Agreement between Plastic Pallet Production, Inc. and 1607
Commerce Limited Partnership dated September 8, 2003 (incorporated
herein by reference to Exhibit 10.8 of The Company's Form 8-K dated
September 8, 2003, which was filed with the SEC on September 23,
2003).
7
10.19 Sale Agreement between Plastic Pallet Production, Inc. and 1607
Commerce Limited Partnership dated September 8, 2003 (incorporated
herein by reference to Exhibit 10.9 of The Company's Form 8-K dated
September 8, 2003, which was filed with the SEC on September 23,
2003).
10.20 Equipment Lease between 1607 Commerce Limited Partnership and Plastic
Pallet Production, Inc. dated September 8, 2003 (incorporated herein
by reference to Exhibit 10.10 of the Company's Form 8-K dated
September 8, 2003, which was filed with the SEC on September 23,
2003).
10.21 Lease Agreement between 1607 Commerce Limited Partnership and Plastic
Pallet Production, Inc. dated September 8, 2003 (incorporated herein
by reference to Exhibit 10.11 of the Company's Form 8-K dated
September 8, 2003, which was filed with the SEC on September 23,
2003).
10.22 Security Agreement among PalWeb Corporation, Plastic Pallet
Production, Inc., Greystone Manufacturing, L.L.C. and 1607 Commerce
Limited Partnership dated September 8, 2003 (incorporated herein by
reference to Exhibit 10.12 of the Company's Form 8-K dated September
8, 2003, which was filed with the SEC on September 23, 2003).
10.23 Guaranty of Obligations of Tenant Pursuant to Equipment Lease by
PalWeb Corporation and Greystone Manufacturing, L.L.C. dated September
8, 2003 (incorporated herein by reference to Exhibit 10.13 of the
Company's Form 8-K dated September 8, 2003, which was filed with the
SEC on September 23, 2003).
10.24 Guaranty of Obligations of Tenant Pursuant to Lease by PalWeb
Corporation and Greystone Manufacturing, L.L.C. dated September 8,
2003 (incorporated herein by reference to Exhibit 10.14 of the
Company's Form 8-K dated September 8, 2003, which was filed with the
SEC on September 23, 2003).
10.25 Stock Pledge Agreement between PalWeb Corporation and 1607 Commerce
Limited Partnership dated September 8, 2003 (incorporated herein by
reference to Exhibit 10.15 of the Company's Form 8-K dated September
8, 2003, which was filed with the SEC on September 23, 2003).
10.26** Employment Agreement between PalWeb Corporation and Warren Kruger
dated August 13, 2003 (incorporated herein by reference to Exhibit
10.35 of the Company's Form 10-KSB for the Fiscal Year Ended May 31,
2004, which was filed with the SEC on August 30, 2004).
8
10.27** Employment Agreement dated as of August 1, 2004, by and between PalWeb
Corporation and Marshall S. Cogan (incorporated herein by reference to
Exhibit 10.1 of the Company's Form 10-QSB for the Quarterly Period
Ended November 30, 2004, which was filed with the SEC on January 19,
2005).
10.28** Employment Agreement dated as of November 1, 2004, by and between
PalWeb Corporation and Robert H. Nelson (incorporated herein by
reference to Exhibit 10.2 of the Company's Form 10-QSB for the
Quarterly Period Ended November 30, 2004, which was filed with the SEC
on January 19, 2005).
10.29 Form of Securities Purchase Agreement entered into between PalWeb
Corporation and certain accredited investors in connection with
November 2004 private placement (incorporated herein by reference to
Exhibit 10.3 of the Company's Form 10-QSB for the Quarterly Period
Ended November 30, 2004, which was filed with the SEC on January 19,
2005).
10.30 Letter Agreement dated January 3, 2005, by and between Greystone
Manufacturing, L.L.C., and Greystone Plastics, Inc. (incorporated
herein by reference to Exhibit 10.4 of the Company's Form 10-QSB for
the Quarterly Period Ended November 30, 2004, which was filed with the
SEC on January 19, 2005).
10.31 Loan Agreement dated March 4, 2005, by and among Greystone
Manufacturing, L.L.C., GLOG Investment, L.L.C., The F&M Bank & Trust
Company and PalWeb Corporation (incorporated herein by reference to
Exhibit 10.1 of the Company's Form 8-K dated March 4, 2005, which was
filed with the SEC on March 10, 2005).
10.32 Promissory Note dated November 30, 2004, in the amount of $1,500,000
issued by Greystone Manufacturing, L.L.C., to The F&M Bank & Trust
Company (incorporated herein by reference to Exhibit 10.2 of the
Company's Form 8-K dated March 4, 2005, which was filed with the SEC
on March 10, 2005).
10.33 Term Note dated March 4, 2005, in the amount of $5,500,000 issued by
Greystone Manufacturing, L.L.C., to The F&M Bank & Trust Company
(incorporated herein by reference to Exhibit 10.3 of the Company's
Form 8-K dated March 4, 2005, which was filed with the SEC on March
10, 2005).
10.34 Security Agreement dated March 4, 2005, by and between Greystone
Manufacturing, L.L.C., and The F&M Bank & Trust Company (incorporated
herein by reference to Exhibit 10.4 of the Company's Form 8-K dated
March 4, 2005, which was filed with the SEC on March 10, 2005).
9
10.35 Mortgage Agreement dated March 4, 2005, by and between Greystone
Manufacturing, L.L.C., and The F&M Bank & Trust Company (incorporated
herein by reference to Exhibit 10.5 of the Company's Form 8-K dated
March 4, 2005, which was filed with the SEC on March 10, 2005).
10.36 Guaranty of PalWeb Corporation dated March 4, 2005 (incorporated
herein by reference to Exhibit 10.6 of the Company's Form 8-K dated
March 4, 2005, which was filed with the SEC on March 10, 2005).
10.37 Industrial Lease dated as of July 1, 2004, by and between Greystone
Properties, LLC, and Greystone Manufacturing, L.L.C. (incorporated
herein by reference to Exhibit 10.1 of the Company's Form 10-QSB for
the Quarterly Period Ended February 28, 2005, which was filed with the
SEC on April 20, 2005).
10.38 Equipment Rental Contract dated as of November 1, 2004, by and between
NYOK Partners and Greystone Manufacturing, L.L.C. relating to certain
grinding equipment (incorporated herein by reference to Exhibit 10.2
of the Company's Form 10-QSB for the Quarterly Period Ended February
28, 2005, which was filed with the SEC on April 20, 2005).
10.39 Equipment Rental Contract dated as of November 1, 2004, by and between
NYOK Partners and Greystone Manufacturing, L.L.C. relating to plastic
injection molding machine (incorporated herein by reference to Exhibit
10.3 of the Company's Form 10-QSB for the Quarterly Period Ended
February 28, 2005, which was filed with the SEC on April 20, 2005).
Promissory Note dated as of June 17, 2005 in the amount of $500,100
issued by Greystone Logistics, Inc. and Greystone
10.40 Manufacturing, L.L.C. to Robert B. Rosene, Jr. (incorporated herein by
reference to Exhibit 10.1 of the Company's Form 10-QSB for the
Quarterly Period Ended November 30, 2005, which was filed with the SEC
on January 17, 2006).
10.41 Promissory Note dated as of December 15, 2005 in the amount of
$2,066,000 issued by Greystone Logistics, Inc. and Greystone
Manufacturing, L.L.C. to Robert B. Rosene, Jr. (incorporated herein by
reference to Exhibit 10.2 of the Company's Form 10-QSB for the
Quarterly Period Ended November 30, 2005, which was filed with the SEC
on January 17, 2006).
10
10.42 Promissory Note dated as of December 15, 2005 in the amount of
$527,716 issued by Greystone Logistics, Inc. and Greystone
Manufacturing, L.L.C. to Warren F. Kruger, Jr. (incorporated herein by
reference to Exhibit 10.3 of the Company's Form 10-QSB for the
Quarterly Period Ended November 30, 2005, which was filed with the SEC
on January 17, 2006).
10.43 Security Agreement dated as of December 15, 2005 by and between
Greystone Logistics, Inc. and Greystone Manufacturing, L.L.C. and
Robert B. Rosene, Jr. relating to Promissory Note in the amount of
$500,100 (incorporated herein by reference to Exhibit 10.4 of the
Company's Form 10-QSB for the Quarterly Period Ended November 30,
2005, which was filed with the SEC on January 17, 2006).
10.44 Security Agreement dated as of December 15, 2005 by and between
Greystone Logistics, Inc. and Greystone Manufacturing, L.L.C. and
Robert B. Rosene, Jr. relating to Promissory Note in the amount of
$2,066,000 (incorporated herein by reference to Exhibit 10.5 of the
Company's Form 10-QSB for the Quarterly Period Ended November 30,
2005, which was filed with the SEC on January 17, 2006).
10.45 Security Agreement dated as of December 15, 2005 by and between
Greystone Logistics, Inc. and Greystone Manufacturing, L.L.C. and
Warren F. Kruger, Jr. relating to Promissory Note in the amount of
$527,716 (incorporated herein by reference to Exhibit 10.6 of the
Company's Form 10-QSB for the Quarterly Period Ended November 30,
2005, which was filed with the SEC on January 17, 2006).
11.1 Computation of Loss Per Share is in Note 1 in the Notes to the
Financial Statements (incorporated herein by reference to Exhibit 11.1
of the Company's Form 10-KSB for the Fiscal Year Ended May 31, 2006,
which was filed with the SEC on September 13, 2006).
21.1 Subsidiaries of Greystone Logistics, Inc. (incorporated herein by
reference to Exhibit 21.1 of the Company's Form 10-KSB for the Fiscal
Year Ended May 31, 2006, which was filed with the SEC on September 13,
2006).
23.1 Consent of Murrell, Hall, McIntosh & Co., PLLP (incorporated herein by
reference to Exhibit 23.1 of the Company's Form 10-KSB for the Fiscal
Year Ended May 31, 2006, which was filed with the SEC on September 13,
2006).
11
31.1 Certification of Chief Executive Officer pursuant to Rules 13a-14(a)
and 15d-14(a) promulgated under the Securities Exchange Act of 1934,
as amended, and Item 601(b)(31) of Regulation S-B, as adopted pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002 (submitted herewith).
31.2 Certification of Chief Financial Officer pursuant to Rules 13a-14(a)
and 15d-14(a) promulgated under the Securities Exchange Act of 1934,
as amended, and Item 601(b)(31) of Regulation S-B, as adopted pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002 (submitted herewith).
32.1 Certification of Chief Financial Officer (and interim principal
executive officer) pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(incorporated herein by reference to Exhibit 32.1 of the Company's
Form 10-KSB for the Fiscal Year Ended May 31, 2006, which was filed
with the SEC on September 13, 2006).
** Management contract or compensatory plan or arrangement required to be filed
as an exhibit to this report.
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
GREYSTONE LOGISTICS, INC.
(Registrant)
Date: 11/28/06 /s/ Warren F. Kruger
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Warren F. Kruger, President and
Chief Executive Officer
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