Greystone Logistics, Inc. Liquidation Value

Greystone Logistics (GLGI) presents a materially deteriorated liquidation posture as of February 28, 2026, driven by a discrete revenue collapse following the loss of a major customer representing approximately 55% of prior-year sales (~$30M annualized). The company has an explicit going concern qualification in Note 2. MFFAIS-reported CLV/LLV of -$19.2M and OLV of -$16.4M confirm negative equity recovery under liquidation assumptions, consistent with the balance sheet analysis below.

Asset-side liquidation estimate: Cash $217K (100% = $217K); AR not separately tagged in XBRL but implied by IncreaseDecreaseInAccountsReceivable movement — filing does not separately tag gross AR; inventory $2.76M (60% = $1.66M); net PP&E $27.2M (50-60% haircut on heavily depreciated manufacturing equipment yields ~$13.6-16.3M); operating ROU asset $4.8M (0% — no liquidation value as lease obligations survive); intangibles/other immaterial. Total estimated gross asset recovery: approximately $16-19M.

Liability stack at face value: Total liabilities $25.1M, of which current liabilities $15.0M. The most significant items are: (1) long-term debt entirely reclassified to current at $11.7M due to IBC covenant breach — all $11.7M callable now; (2) operating lease liability $4.9M (non-cancelable, 11-year weighted average remaining term — survives liquidation at full NPV); (3) accounts payable/accrued $2.9M current. Deferred income tax liability of $5.5M is classified in long-term liabilities and would likely reverse/offset in a wind-down but is retained at face value per the lens. Total liabilities $25.1M exceed estimated asset recovery of $16-19M, producing negative equity recovery of approximately ($6M) to ($9M) before transaction costs.

Key change from prior filing (Q2, November 30, 2025): The most significant structural deterioration is the debt reclassification — at Q2 (Nov 30, 2025), long-term debt was split approximately $3.3M current / $7.7M long-term. By Feb 28, 2026, IBC covenant violations caused the entire $11.7M to be classified current, effectively bringing the entire term loan stack into the near-term liability pile. The fourth IBC amendment (January 9, 2026) converted the facility to interest-only through December 2026, providing cash flow relief but not reducing the face-value liability. Operating cash generation collapsed to $2,660 for the nine-month period vs. $7.9M prior year — near-zero operating cash barely covering anything. Cash fell from $1.55M (June 1, 2025) to $217K (Feb 28, 2026). A subsequent event (post-period) involves a $1.675M sale-leaseback of real property to a board member — accounting treatment under ASC 842 not yet determined and not reflected in these statements; this transaction will add a new ROU liability and reduce PP&E in Q4.