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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):
FEBRUARY 7, 2007
GREYSTONE LOGISTICS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
OKLAHOMA 000-26331 75-2954680
(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
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1613 E. 15TH, TULSA, OKLAHOMA 74120
(Address of principal executive offices) (Zip Code)
(918) 583-7441
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
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ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On February 7, 2007, a subsidiary of the registrant, Greystone
Manufacturing, L.L.C., an Oklahoma limited liability company ("Greystone
Manufacturing"), entered into that certain Yorktown Management & Financial
Services, LLC Molds, Grinder, Ancillary Resin Handling Equipment, Bumper
Contract, Raw Materials and Finished Goods Inventory Purchase Agreement and Bill
of Sale (the "Purchase Agreement"), with Yorktown Management & Financial
Services, LLC, an Oklahoma limited liability company ("Yorktown"), pursuant to
which Yorktown purchased from Greystone Manufacturing existing finished goods
inventory (including certain Coors Brewing inventory) and certain of the
Greystone Manufacturing's raw materials, grinding and peripheral equipment,
resin contracts and molds for a total purchase price of $2.2 million.
In connection with the Purchase Agreement, on February 8, 2007, the
registrant issued a warrant to a third party to purchase up to 250,000 shares of
the registrant's common stock at an exercise price of $0.15 per share in
consideration of providing certain financing and consulting services, which
facilitated the transaction with Yorktown. Also in connection with the Purchase
Agreement, Greystone Manufacturing and Yorktown have entered into that certain
pallet molds lease agreement dated as of February 7, 2007 (the "Pallet Molds
Lease"), whereby for a period of seven years, Yorktown will lease back to
Greystone Manufacturing the molds and resin equipment purchase from Greystone
Manufacturing at the lease rate of $1.00 per pallet manufactured using the molds
and $0.03 per pound of resin provided using the resin equipment.
Yorktown is owned by the registrant's Chief Executive Officer,
Warren Kruger. The assets sold pursuant to the Purchase Agreement were sold to
Yorktown at their fair market value and the transactions described above were
approved by the disinterested member of the registrant's Board of Directors.
On February 8, 2007, the registrant entered into that certain
Settlement Agreement and Release (the "Settlement Agreement"), by and among the
registrant, 1607 Commerce Limited Partnership, a Texas limited partnership
("1607"), Plastic Pallet Production, Inc., a Texas corporation and subsidiary of
the registrant ("Plastic Pallet"), and Greystone Manufacturing, whereby, for
full, final and complete settlement of any and all claims that 1607 has
asserted, or could have asserted, in its lawsuit regarding an alleged default in
the payment of rent pursuant to terms of the Equipment Lease (defined below) and
the enforcement of certain guaranties of such payment of rent entered into by
and between the registrant and 1607 and Greystone Manufacturing and 1607, the
registrant has agreed to (i) make a one time payment to 1607 of $1,048,000.00,
(ii) make monthly payments to 1607 of $24,000.00 for a term of 24 months
commencing March 1, 2007, which payments can be used towards the purchase price
of pallets purchased from 1607 as further described below, (iii) transfer to
1607 2,000,000 shares of the registrant's common stock, par value $0.0001 per
share, and (iv) enter into an agreement with 1607 whereby, among other things,
1607 will be given floor space, utilities and regrind resin in the registrant's
Iowa facility and the registrant, Plastic Pallet and Greystone Manufacturing
will be required to purchase up to 200,000 Granada pallets at $8.00 per pallet
and 200,000 nestable pallets at $3.00 per pallet from 1607 over a two year term.
Also pursuant to the Settlement Agreement, the monthly payments to be made by
the registrant will be credited against the purchase price of any Granada
pallets purchased by 1607; provided, however, 1607 is not obligated to produce
any pallets, but has agreed to use it best efforts to do so. The Settlement
Agreement also included an immediate termination of that certain equipment lease
dated as of September 8, 2003, by and between 1607 and Plastic Pallet (the
"Equipment Lease"), whereby the
registrant leased, for a term of 130 months commencing September 8, 2003,
certain equipment for $48,000.00 per month.
The foregoing summary of the Purchase Agreement, Pallet Molds Lease
and Settlement Agreement is qualified in its entirety by reference to the full
terms and conditions of such agreements, copies of which are filed as Exhibits
10.1, 10.2 and 10.3, respectively, to this Current Report on Form 8-K and are
incorporated herein by reference.
ITEM 1.02. TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT.
The description of the termination of the Equipment Lease set forth
under Item 1.01 of this Current Report on Form 8-K is incorporated by reference
herein.
ITEM 2.01. COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.
The description of the sale of certain assets of the registrant set
forth under Item 1.01 of this Current Report on Form 8-K is incorporated by
reference herein.
ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
The description of the monthly payment obligations of the registrant
pursuant the Settlement Agreement set forth under Item 1.01 of this Current
Report on Form 8-K is incorporated by reference herein.
ITEM 3.02. UNREGISTERED SALES OF EQUITY SECURITIES.
The description of the issuance of the warrant to a third party in
connection with the Purchase Agreement set forth under Item 1.01 of this Current
Report on Form 8-K is incorporated by reference herein. The description of the
issuance of 2,000,000 shares of common stock, par value $0.0001 per share,
issued to 1607 pursuant to the Settlement Agreement set forth under Item 1.01 of
this Current Report on Form 8-K is incorporated by reference herein.
The securities described above were issued pursuant to the exemption
from registration under Section 4(2) of the Securities Act of 1933, as amended.
The parties described above are either a sophisticated person or entity and
there was no underwriting and no commissions paid to any party in connection
with the transactions described above.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(c) The following exhibits are furnished herewith:
Exhibit No. Description
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10.1 Yorktown Management & Financial Services, LLC Molds, Grinder,
Ancillary Resin Handling Equipment, Bumper Contract, Raw Materials
and Finished Goods Inventory Purchase Agreement and Bill of Sale
dated as of February 7, 2007, by and between the registrant and
Yorktown.
10.2 Pallet Molds Lease Agreement dated as of February 7, 2007, by and
between Greystone Manufacturing and Yorktown.
10.3 Settlement Agreement and Release dated as of February 8, 2007, by
and among the registrant, 1607, Plastic Pallet and Greystone
Manufacturing.
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 hereunto duly authorized.
GREYSTONE LOGISTICS, INC.
Date: February 27, 2007 By: /s/ Warren F. Kruger
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Warren F. Kruger
President and Chief Executive Officer
EXHIBIT INDEX
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Exhibit No. Description
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10.1 Yorktown Management & Financial Services, LLC Molds, Grinder,
Ancillary Resin Handling Equipment, Bumper Contract, Raw Materials
and Finished Goods Inventory Purchase Agreement and Bill of Sale
dated as of February 7, 2007, by and between the registrant and
Yorktown.
10.2 Pallet Molds Lease Agreement dated as of February 7, 2007, by and
between Greystone Manufacturing and Yorktown.
10.3 Settlement Agreement and Release dated as of February 8, 2007, by
and among the registrant, 1607, Plastic Pallet and Greystone
Manufacturing.