UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

~~[X]~~ ☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ~~FOR THE QUARTERLY PERIOD ENDED~~~~November 30, 2017~~

For the quarterly period ended November 30, 2023

~~[ ]~~

☐

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~FOR THE TRANSITION PERIOD FROM ______ TO ________~~For the transition period from ___________ to ____________

Commission file number000-26331

~~GREYSTONE LOGISTICS, INC.~~

~~(Exact name of registrant as specified in its charter)~~

GREYSTONE LOGISTICS, INC.

(Exact name of registrant as specified in its charter)

Oklahoma		75-2954680
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

1613 East 15^th15th Street, Tulsa, Oklahoma 74120			~~74120~~
(Address of principal executive offices)		(Zip Code)

(918) 583-7441

(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

~~(918) 583-7441~~

~~(Registrant’s telephone number, including area code)~~Securities registered pursuant to Section 12(b) of the Act:

~~(Former name, former address and former fiscal year, if changed since last report)~~
Title of each class
Trading Symbol
Name of each exchange on
which registered
NONE
GLGI
NONE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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.

Yes ~~[X]~~☒ No ~~[ ]~~☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to post and submit such files).

Yes ~~[X]~~☒ No ~~[ ]~~☐

Table of Contents

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated ~~filer”~~filer,” “smaller reporting company,” and ~~“smaller reporting~~“emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ~~[ ]~~	☐	Accelerated filer ~~[ ]~~☐
Non-accelerated filer ~~[ ] (Do not check if a smaller reportingcompany)~~	☒	Smaller reporting company ~~[X]~~☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by checkmark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act).

Yes ~~[ ]~~☐ No ~~[X]~~☒

Applicable only to corporate issuers:

Indicate the number of shares outstanding of each of the ~~issuer’s~~issuer's classes of common stock, as of the latest practicable date:

January ~~10, 2018 - 28,361,201~~16, 2024 – 28,279,701

Table of Contents

GREYSTONE LOGISTICS, INC.

FORM 10-Q

For the Period Ended November 30, ~~2017~~2023

		Page
PART I. FINANCIAL INFORMATION

~~PART I. FINANCIAL INFORMATION~~		1

Item 1. Financial Statements		1

	Consolidated Balance Sheets (Unaudited) As of November 30, ~~2017~~2023 and May 31, ~~2017~~2023	1

	Consolidated Statements of ~~Operations~~Income (Unaudited) For the Six Months Ended November 30, ~~2017~~2023 and ~~2016~~2022	2

	Consolidated Statements of Operations (Unaudited) For the Three Months Ended November 30, ~~2017~~2023 and ~~2016~~2022	3

	Consolidated Statements of Changes in Equity (Unaudited) For the Six Months Ended November 30, 2023 and 2022	4

	Consolidated Statements of Cash Flows (Unaudited) For the Six Months Ended November 30, ~~2017~~2023 and ~~2016~~2022	4 5

	Notes to Consolidated Financial Statements (Unaudited)	5 6

Item 2. ~~Management’s~~	Management's Discussion and Analysis of Financial Condition and Results of Operations	14 15

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	19 21

Item 4.	Controls and Procedures	19

~~PART II. OTHER INFORMATION~~21		19

~~Item 1. Legal Proceedings~~PART II. OTHER INFORMATION		19 21

Item ~~1A. Risk Factors~~1.	19 Legal Proceedings	21

Item 1A.	Risk Factors	21

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	19 22

Item 3.	Defaults Upon Senior Securities	19 22

Item 4.	Mine Safety Disclosures	19 22

Item 5.	Other Information	20 22

Item 6. ~~Exhibits~~	20 Exhibits	23

~~SIGNATURES~~		21


SIGNATURES		24

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Greystone Logistics, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)

	November 30, 2023			May 31, 2023
Assets
Current Assets:
Cash	$	4,183,406		$	695,951
Accounts receivable -
Trade		3,402,977			4,857,504
Related parties		170,960			56,550
Other		85,709			386,877
Inventory		5,260,002			4,484,106
Prepaid expenses		293,735			528,962
Total Current Assets		13,396,789			11,009,950
Property, Plant and Equipment, net		31,873,300			33,184,706
Right-of-Use Operating Lease Assets		5,203,089			5,335,714
Total Assets	$	50,473,178		$	49,530,370

Liabilities and Equity
Current Liabilities:
Current portion of long-term debt	$	2,321,333		$	2,249,570
Current portion of financing leases		28,698			31,981
Current portion of operating leases		242,417			240,346
Accounts payable and accrued expenses		3,636,664			3,337,410
Deferred revenue		23,007			23,007
Preferred dividends payable		146,473			134,414
Total Current Liabilities		6,398,592			6,016,728
Long-Term Debt, net of current portion and debt issuance costs		12,254,311			14,919,687
Financing Leases, net of current portion		11,737			28,504
Operating Leases, net of current portion		4,997,680			5,119,688
Deferred Tax Liability		4,854,000			3,905,279
Equity:
Preferred stock, $0.0001 par value, cumulative, 20,750,000 shares authorized, 50,000 shares issued and outstanding, liquidation preference of $5,000,000		5			5
Common stock, $0.0001 par value, 5,000,000,000 shares authorized, 28,279,701 shares issued and outstanding		2,828			2,828
Additional paid-in capital		53,533,272			53,533,272
Accumulated deficit		(31,579,247	)		(33,995,621	)

Total Equity		21,956,858			19,540,484

Total Liabilities and Equity	$	50,473,178		$	49,530,370

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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Greystone Logistics, Inc. and Subsidiaries
Consolidated Statements of Income
For the Six Months Ended November 30,
(Unaudited)

	2023			2022

Sales	$	33,010,707		$	31,055,273

Cost of Sales		25,828,480			27,369,753

Gross Profit		7,182,227			3,685,520

Selling, General and Administrative Expenses		2,586,974			2,311,579

Operating Income		4,595,253			1,373,941

Other Income (Expense):
Gain on deconsolidation of variable interest entity		-			569,997
Other income		3,153			6,318
Interest expense		(672,361	)		(507,762	)

Income before Income Taxes		3,926,045			1,442,494
Provision for Income Taxes		(1,217,000	)		(256,000	)
Net Income		2,709,045			1,186,494

Net Income Attributable to Non-controlling Interest		-			(49,599	)

Preferred Dividends		(292,671	)		(228,767	)

Net Income Attributable to Common Stockholders	$	2,416,374		$	908,128

Net Income Per Share of Common Stock -
Basic	$	0.09		$	0.03
Diluted	$	0.08		$	0.03

Weighted Average Shares of Common Stock Outstanding -
Basic		28,279,701			28,279,701
Diluted		28,774,562		28,773,207

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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Greystone Logistics, Inc. and Subsidiaries
Consolidated Statements of Operations
For the Three Months Ended November 30,
(Unaudited)

	2023			2022

Sales	$	15,597,036		$	12,101,674

Cost of Sales		12,459,570			10,879,300

Gross Profit		3,137,466			1,222,374

Selling, General and Administrative Expenses		1,374,024			1,205,988

Operating Income		1,763,442			16,386

Other Income (Expense):
Other income		1,554			683
Interest expense		(330,170	)		(288,316	)

Income (Loss) before Income Taxes		1,434,826			(271,247	)
Benefit from (Provision for) Income Taxes		(470,000	)		84,000
Net Income (Loss)		964,826			(187,247	)

Preferred Dividends		(146,472	)		(119,349	)

Net Income (Loss) Attributable to Common Stockholders	$	818,354		$	(306,596	)

Net Income (Loss) Per Share of Common Stock -
Basic and Diluted	$	0.03		$	(0.01	)

Weighted Average Shares of Common Stock Outstanding -
Basic		28,279,701			28,279,701
Diluted		28,774,780			28,279,701

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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Greystone Logistics, Inc.

Consolidated Statements of Changes in Equity

For the Six Months Ended November 30, 2023 and 2022

(Unaudited)

	Preferred Stock				Common Stock				Additional Paid-in		Accumulated			Total Greystone Stockholders'			Non-controlling			Total
	Shares		Amount		Shares		Amount		Capital		Deficit			Equity			Interest			Equity
Balances, May 31, 2022		50,000	$	5		28,279,701	$	2,828	$	53,533,272	$	(39,838,449	)	$	13,697,656		$	1,383,825		$	15,081,481
Capital contribution non-controlling interest		-		-		-		-		-		-			-			1,669,000			1,669,000
Deconsolidation of variable interest entity		-		-		-		-		-		-			-			(3,102,424	)		(3,102,424	)
Preferred dividends ($2.19 per share)		-		-		-		-		-		(109,418	)		(109,418	)		-			(109,418	)
Net income		-		-		-		-		-		1,324,142			1,324,142			49,599			1,373,741
Balances, August 31, 2022		50,000		5		28,279,701		2,828		53,533,272		(38,623,725	)		14,912,380			-			14,912,380
Preferred dividends ($2.39 per share)		-		-		-		-		-		(119,349	)		(119,349	)		-			(119,349	)
Net loss		-		-		-		-		-		(187,247	)		(187,247	)		-			(187,247	)
Balances, November 30, 2022		50,000	$	5		28,279,701	$	2,828	$	53,533,272	$	(38,930,321	)	$	14,605,784		$	-		$	14,605,784

Balances, May 31, 2023		50,000	$	5		28,279,701	$	2,828	$	53,533,272	$	(33,995,621	)	$	19,540,484		$	-		$	19,540,484
Preferred dividends ($2.92 per share)		-		-		-		-		-		(146,199	)		(146,199	)		-			(146,199	)
Net income		-		-		-		-		-		1,744,219			1,744,219			-			1,744,219
Balances, August 31, 2023		50,000		5		28,279,701	$	2,828		53,533,272		(32,397,601	)		21,138,504			-			21,138,504
Preferred dividends ($2.93 per share)		-		-		-		-		-		(146,472	)		(146,472	)		-			(146,472	)
Net income		-		-		-		-		-		964,826			964,826			-			964,826
Balances, November 30, 2023		50,000	$	5		28,279,701	$	2,828	$	53,533,272	$	(31,579,247	)	$	21,956,858		$	-		$	21,956,858

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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Greystone Logistics, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
For the Six Months Ended November 30,
(Unaudited)

	2023			2022
Cash Flows from Operating Activities:
Net income	$	2,709,045		$	1,186,494
Adjustments to reconcile net income to net cash provided by (used in) operating activities –
Gain on deconsolidation of variable interest entity		-			(569,997	)
Depreciation and amortization		2,844,103			2,722,174
Deferred tax expense		948,721			19,000
Decrease in trade accounts receivable		1,755,695			1,770,360
(Increase) decrease in related party receivables		(114,410	)		39,411
Increase in inventory		(775,896	)		(994,525	)
(Increase) decrease in prepaid expenses		235,227			(23,653	)
Increase (decrease) in accounts payable and accrued expenses		127,987			(2,153,136	)
Decrease in deferred revenue		-			(5,306,040	)
Net cash provided by (used in) operating activities		7,730,472			(3,309,912	)

Cash Flows from Investing Activities:
Purchase of property and equipment		(1,345,880	)		(1,805,395	)
Deconsolidation of variable interest entity		-			(2,806	)
Net cash used in investing activities		(1,345,880	)		(1,808,201	)

Cash Flows from Financing Activities:
Proceeds from long-term debt		-			8,707,426
Payments on long-term debt and financing leases		(1,103,440	)		(4,823,623	)
Payments on related party note payable and financing lease		-			(3,340,533	)
Proceeds from revolving loan		-			1,090,648
Payments on revolving loan		(1,500,000	)		(42,867	)
Payments for debt issuance costs		(13,085	)		(71,154	)
Dividends paid on preferred stock		(280,612	)		(194,795	)
Capital contribution to non-controlling interest		-			1,669,000
Net cash (used in) provided by financing activities		(2,897,137	)		2,994,102
Net Increase (Decrease) in Cash		3,487,455			(2,124,011	)
Cash, beginning of period		695,951			3,143,257
Cash, end of period	$	4,183,406		$	1,019,246
Non-cash Activities:
Refinancing of certain term loans	$	-		$	2,669,892
Deconsolidation of net assets of variable interest entity	$	-		$	3,102,424
Capital expenditures in accounts payable	$	316,329		$	8,863
Preferred dividend accrual	$	146,473		$	119,349
Supplemental information:
Interest paid	$	674,407		$	505,723
Income taxes paid	$	-		$	160,000

The accompanying notes are an integral part of these unaudited consolidated financial statements.

Table of Contents

Greystone Logistics, Inc. and Subsidiaries

~~Consolidated Balance Sheets~~

~~(Unaudited)~~

November 30, 2017 May 31, 2017
Assets
Current Assets:
Cash $ 528,450 $ 579,021
Accounts receivable -
Trade, net of allowance for doubtful accounts of $31,660 at November 30, 2017 and May 31, 2017 1,940,167 6,160,145
Related party receivables 73,027 73,578
Inventory 3,039,936 1,587,552
Prepaid expenses 113,158 136,395
Total Current Assets 5,694,738 8,536,691

Property and Equipment, net 21,053,357 19,706,782

Deferred Tax Asset 38,915 281,415

Total Assets $ 26,787,010 $ 28,524,888

Liabilities and Equity
Current Liabilities:
Current portion of long-term debt $ 2,794,286 $ 2,493,236
Current portion of capital lease 2,194,217 2,261,560
Accounts payable and accrued expenses 3,921,631 5,727,903
Accrued expenses - related parties - 29,076
Preferred dividends payable 30,822 29,726
Total Current Liabilities 8,940,956 10,541,501

Long-Term Debt, net of current portion 15,803,513 15,310,754

Capital Lease, net of current portion 518,072 1,532,503

Equity:
Preferred stock, $0.0001 par value, cumulative, 20,750,000 shares authorized, 50,000 shares issued and outstanding, liquidation preference of $5,000,000 5 5
Common stock, $0.0001 par value, 5,000,000,000 shares authorized, 28,361,201 shares issued and outstanding 2,836 2,836
Additional paid-in capital 53,790,764 53,790,764
Accumulated deficit (53,361,620 ) (53,724,991 )
Total Greystone Stockholders’ Equity 431,985 68,614
Non-controlling interest 1,092,484 1,071,516
Total Equity 1,524,469 1,140,130

Total Liabilities and Equity $ 26,787,010 $ 28,524,888

~~The accompanying notes are an integral part of these consolidated financial statements.~~

~~Greystone Logistics, Inc. and Subsidiaries~~

~~Consolidated Statements of Operations~~

~~(Unaudited)~~

For the Six Months Ended
November 30,
2017 2016

Sales $ 20,009,177 $ 17,065,972

Cost of Sales 16,976,241 14,868,884

Gross Profit 3,032,936 2,197,088

General, Selling and Administrative Expenses 1,452,416 1,387,304

Operating Income 1,580,520 809,784

Other Income (Expense):
Other income 12,069 -
Interest expense (658,736 ) (542,800 )

Income before Income Taxes 933,853 266,984
Provision for Income Taxes 259,500 54,550
Net Income 674,353 212,434

Income Attributable to Variable Interest Entity (122,968 ) (119,552 )

Preferred Dividends (188,014 ) (169,212 )

Net Income (Loss) Attributable to Common Stockholders $ 363,371 $ (76,330 )

Income (Loss) Per Share of Common Stock -
Basic and Diluted $ 0.01 $ (0.00 )

Weighted Average Shares of Common Stock Outstanding -
Basic 28,361,201 28,283,332
Diluted 28,988,701 28,283,332

~~The accompanying notes are an integral part of these consolidated financial statements.~~

~~Greystone Logistics, Inc. and Subsidiaries~~

~~Consolidated Statements of Operations~~

~~(Unaudited)~~

For the Three Months Ended
November 30,
2017 2016

Sales $ 9,722,102 $ 9,221,711

Cost of Sales 8,588,065 7,992,441

Gross Profit 1,134,037 1,229,270

General, Selling and Administrative Expenses 621,013 664,275

Operating Income 513,024 564,995

Other Income (Expense):
Other income 3,806 -
Interest expense (334,059 ) (306,169 )

Income before Income Taxes 182,771 258,826
Provision for Income Taxes 38,700 73,400
Net Income 144,071 185,426

Income Attributable to Variable Interest Entity (61,915 ) (60,173 )

Preferred Dividends (93,493 ) (84,144 )

Net Income (Loss) Attributable to Common Stockholders $ (11,337 ) $ 41,109

Income (Loss) Per Share of Common Stock -
Basic and Diluted $ (0.00 ) $ 0.00

Weighted Average Shares of Common Stock Outstanding -
Basic 28,361,201 28,361,201
Diluted 28,361,201 28,940,368

~~The accompanying notes are an integral part of these consolidated financial statements.~~

~~Greystone Logistics, Inc. and Subsidiaries~~

~~Consolidated Statements of Cash Flows~~

~~(Unaudited)~~

For the Six Months Ended
November 30,
2017 2016
Cash Flows from Operating Activities:
Net income $ 674,353 $ 212,434
Adjustments to reconcile net income to net cash provided by operating activities -
Depreciation and amortization 1,612,143 1,222,574
Decrease in deferred tax asset 242,500 54,550
Decrease in trade accounts receivable 4,219,978 2,486,129
(Increase) Decrease in related party receivables 551 (22,142 )
(Increase) Decrease in inventory (1,452,384 ) 8,953
(Increase) Decrease in prepaid expenses 23,237 (157,932 )
Increase (Decrease) in accounts payable and accrued expenses (1,733,329 ) 239,547
Net cash provided by operating activities 3,587,049 4,044,113

Cash Flows from Investing Activities:
Purchase of property and equipment (2,996,530 ) (2,095,073 )

Cash Flows from Financing Activities:
Proceeds from long-term debt 1,795,000 -
Payments on long-term debt and capitalized lease (2,387,172 ) (1,619,936 )
Proceeds from revolving loan 240,000 -
Payments on revolving loan - (275,000 )
Debt issue costs - (64,000 )
Proceeds from exercised stock options - 57,000
Dividends paid on preferred stock (186,918 ) (172,813 )
Distributions paid by variable interest entity (102,000 ) (102,000 )
Net cash used in financing activities (641,090 ) (2,176,749 )

Net Decrease in Cash (50,571 ) (227,709 )
Cash, beginning of period 579,021 897,377

Cash, end of period $ 528,450 $ 669,668

Non-cash Activities:
Acquisition of equipment by capital lease $ - $ 5,450,474
Conversion of related party accrued interest to long-term debt $ - $ 2,475,690
Warrants to purchase common stock issued $ - $ 120,000
Preferred dividend accrual $ 30,822 $ 56,404
Supplemental information:
Interest paid $ 658,736 $ 527,800
Taxes paid $ 10,000 $ -

~~The accompanying notes are an integral part of these consolidated financial statements.~~

~~GREYSTONE LOGISTICS, INC.~~
Notes to Consolidated Financial Statements

(Unaudited)

Note 1.

~~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, ~~2017,~~2023, the results of its operations for the ~~six-month~~six months and ~~three-month periods~~three months ended November 30, ~~2017~~2023 and ~~2016,~~2022 and its cash flows for the ~~six-month periods~~six months ended November 30, ~~2017~~2023 and ~~2016.~~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, ~~2017~~2023 and the notes thereto included in ~~Greystone’s~~the Form 10-K for such period. The results of operations for the ~~six-month~~six months and ~~three-month periods~~three months ended November 30, ~~2017~~2023 and ~~2016~~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, ~~Iowa~~IA, which are ~~leased~~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 ~~GSM.~~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.

Note 2.

~~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 (loss) ~~available~~attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing net income (loss) ~~available~~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 periods ended November 30 are as follows:

2017 2016
Six-month periods ended November 30:
Options to purchase common stock - 200,000
Warrants to purchase common stock - 500,000
Preferred stock convertible into common stock 3,333,333 3,333,333

Total 3,333,333 4,033,333

Three-month periods ended November 30:
Options to purchase common stock 200,000 -
Warrants to purchase common stock 500,000 -
Preferred stock convertible into common stock 3,333,333 3,333,333

Total 4,033,333 3,333,333

Table of Contents

	2023		2022
For the six months ended November 30:
Preferred stock convertible into common stock		3,333,333		3,333,333
For the three months ended November 30:
Preferred stock convertible into common stock		3,333,333		3,333,333
Warrants exercisable into common stock		-		500,000
Total		3,333,333		3,833,333

The following tables set forth the computation of basic and diluted earnings per share ~~for the following periods:~~.

For the six months ended November 30, 2023 and 2022:

2017 2016
Six-month periods ended November 30:
Numerator -
Net income (loss) attributable to common stockholders $ 363,371 $ (76,330 )
Denominator -
Weighted-average shares outstanding - basic 28,361,201 28,283,332
Incremental shares from assumed conversion of options and warrants 627,500 -
Diluted shares 28,988,701 28,283,332
Loss per share -
Basic and Diluted $ 0.01 $ (0.00 )
Three-month periods ended November 30:
Numerator -
Net income (loss) attributable to common stockholders $ (11,337 ) $ 41,109
Denominator -
Weighted-average shares outstanding - basic 28,361,201 28,361,201
Incremental shares from assumed conversion of options and warrants - 579,167
Diluted shares 28,361,201 28,940,368
Loss per share -
Basic and Diluted $ (0.00 ) $ 0.00

	2023		2022
Basic earnings per share of common stock:
Numerator -
Net income attributable to common stockholders	$	2,416,374	$	908,128
Denominator -
Weighted-average shares outstanding - basic		28,279,701		28,279,701
Income per share of common stock - basic	$	0.09	$	0.03

Diluted earnings per share of common stock:
Numerator -
Net income attributable to common stockholders	$	2,416,374	$	908,128
Add: Preferred stock dividends for assumed conversion		-		-
Net income allocated to common stockholders	$	2,416,374	$	908,128
Denominator -
Weighted-average shares outstanding – basic		28,279,701		28,279,701
Incremental shares from assumed conversion of warrants and preferred stock, as appropriate		494,861		493,506
Weighted average common stock outstanding – diluted		28,774,562		28,773,207
Income per share of common stock – diluted	$	0.08	$	0.03

For the three months ended November 30, 2023 and 2022:

	2023		2022
Basic earnings per share of common stock:
Numerator -
Net income (loss) attributable to common stockholders	$	818,354	$	(306,596	)
Denominator -
Weighted-average shares outstanding - basic		28,279,701		28,279,701
Net income (loss) per share of common stock - basic	$	0.03	$	(0.01	)

Diluted earnings per share of common stock:
Numerator -
Net income (loss) attributable to common stockholders	$	818,354	$	(306,596	)
Denominator -
Weighted-average shares outstanding - basic		28,279,701		28,279,701
Incremental shares from assumed conversion of warrants and preferred stock, as appropriate		495,079		-
Weighted average common stock outstanding – diluted		28,774,780		28,279,701
Net income (loss) per share of common stock - diluted	$	0.03	$	(0.01	)

~~Note 3.~~

Table of Contents

Note 3.

Inventory

Inventory consists of the following:

	November 30,		May 31,
	2023		2023
Raw materials	$	2,114,110	$	2,299,911
Finished goods		3,145,892		2,184,195
Total inventory	$	5,260,002	$	4,484,106

November 30, 2017 May 31, 2017
Raw materials $ 774,037 $ 669,083
Finished goods 2,265,899 918,469
Total inventory $ 3,039,936 $ 1,587,552

Note 4.

~~Note 4.~~ Property, Plant and Equipment

A summary of ~~the~~ property, plant and equipment ~~for Greystone~~ is as follows:

November 30, 2017

May 31, 2017

Production machinery and equipment $ 30,314,497 $ 27,493,614
Plant buildings and land 5,296,784 5,296,784
Leasehold improvements 337,339 263,710
Furniture and fixtures 392,370 392,371
36,340,990 33,446,479

Less: Accumulated depreciation and amortization (15,287,633 ) (13,739,697 )

Net Property, Plant and Equipment $ 21,053,357 $ 19,706,782

Production machinery and equipment includes equipment capitalized pursuant to a capital lease in the amount of $5,323,864. The equipment is being amortized using the straight-line method over 10 years.

	November 30, 2023			May 31, 2023
Production machinery and equipment	$	67,506,545		$	66,068,625
Plant buildings and land		2,364,089			2,364,089
Leasehold improvements		1,632,363			1,553,138
Furniture and fixtures		542,057			542,057
		72,045,054			70,527,909

Less: Accumulated depreciation and amortization		(40,171,754	)		(37,343,203	)

Net Property, Plant and Equipment	$	31,873,300		$	33,184,706

Production machinery includes deposits on equipment in the amount of ~~$149,220 that had~~$609,707 as of November 30, 2023, which has not been placed into ~~service as of November 30, 2017. Two plant buildings and land are owned by GRE, a VIE, having a net book value of $3,070,357 at November 30, 2017.~~service.

Depreciation expense, including amortization expense related to ~~assets under capital lease~~financing leases, for the six months ended November 30, ~~2017~~2023 and ~~2016~~2022 was ~~approximately $1,547,936~~$2,828,552 and ~~$1,187,544,~~$2,719,312, respectively.

Note 5.

~~Note 5.~~ Related Party Transactions/Activity

Yorktown Management & Financial Services, LLC

Yorktown Management & Financial Services, LLC (“Yorktown”), an entity wholly owned by Warren F. Kruger, Greystone’s CEO, President, Chairman of the Board and ~~President,~~a significant stockholder of Greystone, 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 ~~$22,500~~$27,500 for use of Yorktown’s grinding equipment and ~~$5,000 for the use of Yorktown’s~~ pelletizing ~~equipment for which GSM paid Yorktown rental~~equipment. Rental fees ofwere $742,500 and $715,000 for the six months ended November 30, ~~2017~~2023 and ~~2016,~~2022, respectively.

~~In addition, Yorktown provides~~Greystone leases office space ~~for Greystone in Tulsa, Oklahoma~~from Yorktown at a monthly rental of ~~$4,000.~~$5,200 per month which increased to $6,250 per month effective July 1, 2023, with the intent of Greystone and Yorktown finalizing a new lease agreement, subject to the Board of Directors approval. Total rent expense was $36,450 and $31,200 for the six months ended November 30, 2023 and 2022, respectively.

Table of Contents

Greystone Real Estate, L.L.C. (GRE)

GRE owns two primary manufacturing facilities occupied by Greystone and is wholly owned by Robert B. Rosene, Jr., a member of Greystone’s Board of Directors. Effective August 1, 2022, Greystone and GRE entered into a non-cancellable ten-year lease agreement with a five-year extension for the use of these manufacturing facilities at the initial rate of $44,500 per month, increasing 5.00% per month every fifth year. During the six months ended November 30, 2023 and 2022, rent payments to GRE totaled $267,000 and $178,000, respectively.

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 F. Kruger, Greystone’s ~~president~~CEO, President, Chairman of the Board and ~~CEO,~~a significant stockholder of Greystone, serves TriEnda as the non-executive Chairman of the Board and is a partner in a partnership which has a majority ownership ~~interest.~~interest in TriEnda. Greystone ~~provided tolling services, blending and pelletizing plastic resin, for TriEnda through March 2017. Revenue~~may purchase pallets from TriEnda ~~totaled $-0- and $368,690~~ for resale or sell Greystone pallets to TriEnda. During the six months ended November 30, ~~2017~~2023 and ~~2016,~~2022, Greystone purchases from TriEnda totaled $-0- and $431, respectively and sales to TriEnda totaled $150,189 and $25,039, respectively. As of November 30, 2023, TriEnda owed $99,425 to Greystone.

~~Greystone periodically purchases material and pallets from TriEnda. Purchases for the six months ended November 30, 2017 and 2016 totaled $45,467 and $24,265, 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~~CEO, President, Chairman of the Board and ~~CEO.~~a significant stockholder of Greystone. Greystone had sales to Green of ~~$256,819~~$122,670 and ~~$146,885~~$438,420 for the six months ended November 30, ~~2017~~2023 and ~~2016,~~2022, respectively. The account receivable due from Green atas of November 30, ~~2017~~2023 was ~~$73,027.~~$71,535.

Note 6.

Long-term Debt

Debt as of November 30, ~~2017~~2023 and May 31, ~~2017 is~~2023 was as follows:

November 30, 2017 May 31, 2017
Term loan A payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.0%, maturing January 7, 2019 $ 4,287,282 $ 4,626,191

Term loan B payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.0%, maturing January 7, 2019 1,215,061 1,715,132

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, 2020 1,721,667 -

Revolving loan payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.0%, due January 31, 2019 2,500,000 2,260,000

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 1,248,240 1,396,448

Term loan payable by GRE to International Bank of Commerce, interest rate of 4.5%, monthly principal and interest payment of $26,215, due January 31, 2019 2,748,105 2,841,285

Note payable to Robert Rosene, 7.5% interest, due January 15, 2019 4,469,355 4,469,355

Note payable to Yorktown Management & Financial Services, LLC, 5% interest, due February 28, 2019, monthly principal and interest payments of $20,629 299,358 413,969

Other 272,950 310,036
Total Debt 18,762,018 18,032,416
Debt issue costs, net of amortization (164,219 ) (228,426 )
Less: Current portion (2,794,286 ) (2,493,236 )
Long-term debt $ 15,803,513 $ 15,310,754

	November 30,			May 31,
	2023			2023
Term loans dated July 29, 2022, payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.50%, maturing July 29, 2027	$	13,449,109		$	14,334,736

Revolving loan payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.50%, due July 29, 2024		-			1,500,000

Term loan payable to First Interstate Bank, interest rate of 3.70%, monthly principal and interest payments of $27,593, due March 19, 2025, secured by certain equipment		429,840			585,536

Term loan payable to First Interstate Bank, interest rate of 3.50%, monthly principal and interest payments of $5,997, due August 10, 2028, secured by certain real estate		737,080			759,639

Other		53,859			73,368
Total long-term debt		14,669,888			17,253,279
Debt issuance costs, net of amortization		(94,244	)		(84,022	)
Total debt, net of debt issuance costs		14,575,644			17,169,257
Less: Current portion of long-term debt		(2,321,333	)		(2,249,570	)
Long-term debt, net of current portion	$	12,254,311		$	14,919,687

Table of Contents

The prime rate of interest as of November 30, ~~2017~~2023, was ~~4.25%. Effective December 14, 2017, the prime rate of interest increased to 4.50%~~8.50%.

Debt Issuance Costs consists of the amounts paid to third parties in connection with the issuance and modification of debt instruments. These costs are shown on the consolidated balance sheet as a direct reduction to the related debt instrument. Amortization of these costs is included in interest expense. Greystone recorded amortization of debt issuance costs of $2,862 for each of the six months ended November 30, 2023 and 2022, respectively.

Restated and Amended Loan Agreement between Greystone and IBC

On ~~January 31, 2014,~~July 29, 2022, Greystone and GSM ~~(the~~(each a “Borrower” and together, the “Borrowers”) entered into an Amended and Restated Loan Agreement (“IBC Restated Loan Agreement”) with International Bank of Commerce (“IBC”) ~~entered into a Loan Agreement (the “IBC Loan Agreement”). The IBC Loan Agreement~~that provided for ~~a revolving loan in an aggregate principal amount~~the consolidation of ~~up to $2,500,000 (the “Revolving Loan”)~~certain term loans and a term loan in the aggregate principal amount of $9,200,000 (the “Term Loan”). The exact amount which can be borrowed under the Revolving Loan from time to time is dependent upon the amount of the borrowing base, but can in no event exceed $2,500,000. On January 7, 2016, the Borrowers and IBC entered into the First Amendment to the IBC Loan Agreement (the “First Amendment”) whereby IBC made an additional term loan to Borrowers in the original principal amount of $2,530,072 (“New Equipment Loan”). The New Equipment Loan and $2,917,422 of the principal amount outstanding on the Term Loan were consolidated into a new loan in the combined principal amount of $5,447,504 (“Term Loan A”). The Term Loan’s remaining principal balance of $3,000,000 was deemed to be a separate term loan (“Term Loan B”). Effective August 4, 2017, the Borrowers and IBC entered into the Fourth Amendment to the IBC Loan Agreement whereby IBC made an additional loan (“Term Loan C”) to the Borrowers in the amount of $1,795,000. The proceeds from Term Loan C were used to purchase production equipment.renewed revolver loan.

The Term Loans A, B and C bear interest at the New York Prime Rate plus 0.5% but not less than 4.0%. Term Loans A and B mature January 7, 2019; Term Loan C matures August 4, 2020. The Borrowers are required to makeIBC term loans require equal monthly payments of principal and interest in such amounts sufficient to amortize the principal balance of ~~(i) Term Loan A over a seven-year period beginning January 31, 2016 (currently $74,455 per month), (ii) Term Loan B~~the loans over the ~~three-year life~~remaining lives. The monthly payments of ~~the note (currently $89,424 per month)~~principal and ~~(iii) Term Loan C over a seven-year period beginning August 31, 2017 (currently $25,205 per month).~~

~~The Revolving Loan bears~~ interest at the New York Prime Rate plus 0.5% but not less than 4.0%. Effective December 12, 2016, the Revolving Loan was amended and restated to extend the maturity of the loan to January 31, 2019. 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~~IBC term loans may vary due to ~~the Borrowers.~~

The IBC Loan Agreement includes customary representations and warranties and affirmative and negative covenants which include (i) requiring the Borrowers to maintain a debt service coverage ratio of 1:25 to 1:00 and a funded debt to EBIDA ratio not exceeding 3:00 to 1:00 measured quarterly, (ii) subject to certain exceptions, limiting the Borrowers’ combined capital expenditures on fixed assets to $1,000,000 per year, (iii) prohibiting Greystone, without IBC’s prior written consent, from declaring or paying any dividends, redemptions of stock or membership interests, distributions and withdrawals (as applicable) in respect of its capital stock or any other equity interest, other than additional payments to holders of its preferred stock in an amount not to exceed $500,000 in any fiscal year, (iv) subject to certain exceptions, prohibiting the incurrence of additional indebtedness by the Borrowers, and (v) requiring the Borrowers to prevent (A) any change in capital ownership such that there is a material changechanges in the ~~direct or indirect ownership~~prime rate of (1) Greystone’s outstanding preferred stock, and (2) any equity interest in GSM, or (B) Warren Kruger from ceasing to be actively involved in the management of Greystone as President and/or Chief Executive Officer. The foregoing list of covenants is not exhaustive and there are several other covenants contained in the IBC Loan Agreement.

~~Greystone’s debt service coverage ratio as~~interest. As of November 30, ~~2017 was 1:27 to 1:00 which meets~~2023, the ~~minimum requirement as discussed above.~~aggregate payments for the IBC term loans are approximately $254,000 per month.

The IBC Restated Loan Agreement, dated July 29, 2022, as amended, provided for IBC to make certain term loans to Greystone to consolidate all existing term loans in the aggregate amount of approximately $2,700,000 and additional funding in the approximate amount of $13,200,000 for the purchase of equipment and renewal of the revolving loan with an increase of $2,000,000 to an aggregate principal amount of $6,000,000 (the “Revolving Loan”), subject to borrowing base limitations. As of November 30, 2023, Greystone’s available revolving loan borrowing capacity was approximately $4,000,000.

The IBC Restated Loan Agreement includes customary events of default, including events of default relating to non-payment of principal and other amounts owing under the IBC Restated 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 Restated Loan Agreement or the related loan documents. In addition, without prior written consent, Greystone shall not declare or pay any dividends, redemptions, distributions and withdrawals with respect to its equity interest other than distributions to holders of its preferred stock in the aggregate of $500,000 in any fiscal year. Among other things, a default under the IBC Restated Loan Agreement would permit IBC to cease lending funds under the IBC Restated Loan Agreement and require immediate repayment of any outstanding notes with interest and any unpaid accrued fees.

Table of Contents

The IBC Restated Loan Agreement is secured by a lien on substantially all ~~of the~~ assets of the Borrowers. Warren F. Kruger, the Company’s President, CEO and Chairman of the Board and a significant stockholder of Greystone, and Robert B. Rosene, Jr., a member of the Company’s Board of Directors, have provided limited guaranties of the Borrowers’ obligations under the IBC Restated Loan Agreement. Mr. Kruger’s guarantee is limited to 32.4% of all debt obligations to IBC. Mr. Rosene’s limited guaranty is the lesser of (i) $3,500,000 less all amounts paid on the principal amount of the loans after the date of the agreement excluding payments on the revolver and (ii) the amount owed to IBC of the loans outstanding from time to time including accrued interest and fees.

Loan Agreement with FirstInterstate Bank, formerly Great Western Bank

On August 23, 2021, Greystone entered into a loan agreement with First Interstate Bank (“FIB Loan Agreement”) to include prior commercial loans and subsequent loans. GSM is a named guarantor under the FIB Loan Agreement.

The FIB Loan Agreement includes customary representations and warranties and affirmative and negative covenants which include (i) requiring the Borrowers to maintain a debt service coverage ratio of 1:25 to 1:00 as of the end of each fiscal year end and debt to tangible net worth ratio of 4:00 to 1:00 as of the end of each fiscal year end with a decrease of 0.50 in the ratio each year thereafter until reaching a minimum ratio of 3:00 to 1:00. In addition, the ~~IBC~~FIB Loan Agreement provides that Greystone shall not, without prior consent of the bank, incur or assume additional indebtedness or capital leases.

The FIB 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 F. Kruger,~~one of 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~~warehouses.

On January 31, 2014, GRE and IBC entered into a Loan Agreement which provided for a mortgage note to GRE of $3,412,500. The note provides for a 4.5% interest rate and a maturity of January 31, 2019 and is secured by a mortgage on the two buildings in Bettendorf, Iowa which are leased to Greystone.

Maturities

~~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, 2019. 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.

~~Note Payable between Greystone and Yorktown Management Financial Services, LLC (“Yorktown”)~~

On February 29, 2016, Greystone entered into an unsecured note payable to Yorktown in the amount of $688,296 in connection with the acquisition of equipment from Yorktown. The note payable bears interest at the rate of 5% and is payable over three years with monthly principal and interest payments of $20,629.

~~Maturities~~

Maturities of Greystone’s long-term debt for the five years subsequent to November 30, ~~2017~~2023, are ~~$2,794,286, $13,895,875, $1,638,153, $433,704~~$2,321,333, $2,269,023, $2,257,551, $7,281,401 and ~~$-0-.~~$540,580.

Note 7. ~~Capital Lease~~

Leases

~~Capital lease~~Financing Leases

Financing leases as of November 30, ~~2017~~2023 and May 31, ~~2017:~~

2023:

November 30, 2017 May 31, 2017
Non-cancellable capital lease with private company, interest rate of 5%, due August 7, 2019 $ 2,712,289 $ 3,794,063
Less: Current portion (2,194,217 ) (2,261,560 )
Non-cancellable capital lease, net of current portion $ 518,072 $ 1,532,503

	November 30, 2023			May 31, 2023
Non-cancellable financing leases	$	40,435		$	60,485
Less: Current portion		(28,698	)		(31,981	)
Non-cancellable financing leases, net of current portion	$	11,737		$	28,504

In August, 2016, Greystone entered into a three-year lease agreement with an unrelated private company to provide for certain production equipment with a total cost of approximately $5.4 million. The lease agreement includes a bargain purchase option to acquire the production equipment at the end of the lease term. Monthly lease payments, estimated at approximately $200,000 per month, are payable on a per invoice basis at the rate of $6.25 for each pallet produced by the leased production equipment and shipped to the private company. The lease bears an interest rate of 5%, has a three-year maturity and provides for minimum monthly lease rental payment based upon the total pallets sold in excess of a specified amount not to exceed the monthly productive capacity of the leased machines.

	November 30, 2023			May 31, 2023
Production equipment under financing leases	$	176,565		$	176,565
Less: Accumulated amortization		(110,844	)		(95,477	)
Production equipment under financing leases, net	$	65,721		$	81,118

~~The production equipment under the non-cancelable capital lease has a gross carrying amount of $5,323,864 at November 30, 2017.~~ Amortization of the carrying amount of ~~approximately $266,000~~$15,397 and ~~$111,000~~$180,240 was included in depreciation expense for the six months ended November 30, ~~2017~~2023 and ~~2016,~~2022, respectively.

Greystone recognized 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 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 statements 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 52-month term and a 60-month term at a discount rate of 5.40% and (ii) two buildings owned by GRE with a 120-month term, a 60-month renewal option and a discount rate of 6.0%. The leases are single term with constant monthly rental rates.

Future minimum lease payments under ~~the~~ non-cancelable ~~capital lease~~leases as of November 30, ~~2017,~~2023, are approximately:

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 which totaled $-0- and $5,306,040 during the six months ended November 30, 2023 and 2022, respectively. The unrecognized balance of deferred revenue as of November 30, 2023 and May 31, 2023, was $23,007.

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 $228,051 and $292,025 during the six months ended November 30, 2023 and 2022, 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, 2023 and 2022, respectively, were as follows:

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 inon the consolidated balance ~~sheet~~sheets approximate fair value.

Greystone derived approximately ~~73%~~83% and ~~67%~~73% of its total sales from ~~two~~three customers ~~in fiscal years 2018~~during the six months ended November 30, 2023 and ~~2017,~~2022, respectively. The loss of a material amount of business from one or ~~both~~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 ~~$890,562~~$470,648 for the six months ended November 30, 2023 and ~~$864,874 in fiscal years 2018 and 2017, respectively, is~~$313,050 for the six months ended November 30, 2022, were from one of its major customers.

Greystone is subject to litigation, claims and other commitments and contingencies arising in the ordinary course of business. Although the asserted value of these matters may be significant, the company currently does not expect that the ultimate resolution of any open matters will have a ~~Greystone director, has provided financing and guarantees~~material adverse effect on ~~Greystone’s bank debt.~~ its consolidated financial position or results of operations.

As of November 30, ~~2017,~~2023, Greystone ~~is indebted to Mr. Rosene in~~had no commitments toward the ~~amount~~purchase of ~~$4,469,355 for a note payable due January 15, 2019. There is no assurance that Mr. Rosene will renew the note as of the maturity date.~~production equipment.

~~In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “~~~~Revenue from Contracts with Customers~~” (“ASU 14-09”) which creates a comprehensive set of guidelines for the recognition of revenue under the principle: “Recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” The requirements of ASU 14-09 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 and will require either retrospective application to each prior period presented or retrospective application with the cumulative effect of initially applying the standard recognized at the date of adoption. Greystone is currently evaluating the impact this ASU will have on our financial position and results of operations.

~~In February 2016, the FASB issued Accounting Standards 2016-02,~~~~Leases (Topic 842)~~, which is intended to improve financial reporting about leasing transactions. The ASU will require organizations (“lessees”) that lease assets with lease terms of more than twelve months to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. In addition, the ASU will require disclosures to help investors and other financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. The effective date of this ASU is for fiscal years beginning after December 31, 2018 and interim periods within that year. Greystone is currently reviewing the ASU to assess the potential impact on the consolidated financial statements.

On December 22, 2017, the President signed into legislation The Tax Cuts and Jobs Act (the Act). The Act changes existing U.S. tax law and includes numerous provisions that will affect our business, including our income tax accounting, disclosure and tax compliance. We believe the most impactful changes within the Act are those that will reduce the U.S. corporate tax rates, business-related exclusions and deductions and credits. ASC 740, “Income Taxes” (Topic 740), requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. Consequently, as of the date of enactment, and during the three months ended February 28, 2018, Greystone will value all deferred tax assets and liabilities at the newly enacted Corporate U.S. income tax rate. Greystone is currently evaluating the impact of the Act, which will include revaluing the deferred tax assets and liabilities and will disclose the estimated impact upon recognition in the third quarter of fiscal 2018.

~~On January 10, 2018, Greystone and International Bank of Commerce (“IBC”) entered into the Fifth Amendment~~Subsequent to the ~~IBC Loan Agreement dated January 31, 2014 (the “Fifth Amendment”) whereby (i)~~quarter ended November 30,2023, Greystone received insurance proceeds of approximately $227,000 associated with damage to its equipment. As a result, Greystone will record a gain of approximately $155,000 during the ~~existing Revolver Note with~~quarter ended February 29, 2024.

This Quarterly Report on Form 10-Q includes certain statements that may be deemed "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, that address activities, events or developments that Greystone expects, believes or anticipates will or may occur in the future, including decreased costs, securing financing, the profitability of Greystone, potential sales of pallets or other possible business developments, are forward-looking statements. Such statements are subject to a ~~current balance~~number of ~~$2,500,000 was converted into a term loan (Term Loan D) with principal~~assumptions, risks and ~~interest amortized over four years~~uncertainties. The forward-looking statements contained in this Quarterly Report on Form 10-Q could be affected by any of the following factors: Greystone's prospects could be affected by changes in availability of raw materials, competition, rapid technological change and new legislation regarding environmental matters; Greystone may not be able to secure additional financing necessary to sustain and grow its operations; and a ~~maturity date~~material portion of ~~January 10, 2022, (ii) an additional term loan~~Greystone's business is and will be dependent upon a few large customers and there is no assurance that Greystone will be able to retain such customers. These risks and other risks that could affect Greystone's business are more fully described in Greystone's Annual Report on Form 10-K for the fiscal year ended May 31, 2023, which was filed with the Securities and Exchange Commission on August 28, 2023, as the same may be updated from ~~IBC~~time to ~~Borrowers in~~time. Actual results may vary materially from the ~~original principal amount~~forward-looking statements. The results of ~~$1,000,000 (Term Loan E) to provide funding~~operations for ~~procurement of production equipment with interest only for one year and amortization of principal and interest over four years beginning at~~ the ~~end~~six months ended November 30, 2023, are not necessarily indicative of the ~~first~~results for the fiscal year ~~and a maturity date of January 10, 2022, and (iii) a new $3,000,000 revolving loan~~ending May 31, 2024. Greystone undertakes no duty to ~~provide working capital with the same lending conditions as the existing Revolver Note and a maturity date of January 10, 2020. The three new notes will bear interest at the greater~~update any of the ~~prime rate of interest plus 0.5% or 4.75%.~~

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.~~forward-looking statements contained in this Quarterly Report on Form 10-Q.

The unaudited consolidated statements include Greystone Logistics, Inc., and its two wholly-owned subsidiaries, Greystone Manufacturing, L.L.C. (“GSM”) and Plastic Pallet Production, Inc. (“PPP”). Greystone also ~~consolidates its~~consolidated the variable interest entity, Greystone Real Estate, L.L.C. (“GRE”). for the period from June 1, 2022 through July 29, 2022. Effective July 29, 2022, the relationship of Greystone as a beneficiary of GRE ceased to exist. All material intercompany accounts and transactions have been eliminated.

~~References to fiscal year 2018 refer to the six and three month periods ended November 30, 2017. References to fiscal year 2017 refer to the six and three month periods ended November 30, 2016.~~Sales

~~Greystone’s~~Greystone's primary focus is to provide quality plastic pallets to its existing customers while continuing its marketing efforts to broaden its customer base. ~~Greystone’s~~Greystone's existing customers are primarily located in the United States and engaged in the beverage, pharmaceutical and other industries. Greystone has generated, and plans to continue to generate, interest in its pallets by attending trade shows sponsored by industry segments that would benefit from ~~Greystone’s~~Greystone's products. Greystone hopes to gain wider product acceptance by marketing the concept that the widespread use of plastic pallets could greatly reduce the destruction of trees on a worldwide basis. Greystone’s marketing is conducted through contract distributors, its President and other employees.

Greystone had full-time-equivalents of approximately ~~167~~181 and ~~200 full-time~~195 and approximately 66 and 40 temporary employees as of November 30, ~~2017~~2023 and ~~2016, respectively.~~2022 respectfully. Full-time equivalent is a measure based on time worked.

~~Six-Month Period~~Six Months Ended November 30, ~~2017~~2023 Compared to ~~Six-Month Period~~Six Months Ended November 30, ~~2016~~2022

Sales for ~~fiscal year 2018~~the six months ended November 30, 2023 were ~~$20,009,177~~$33,010,707 compared to ~~$17,065,972 in fiscal year 2017~~$31,055,273 for the six months ended November 30, 2022 for an increase of ~~$2,943,205.~~$1,955,434, or 6.3%. The increase in sales for the six months ended November 30, 2023, over the prior period was the result of an approximate 12.8% increase in the quantity of pallets sold somewhat offset by a decrease of approximately 5.3% in the average price per pallet ~~sales~~sold. The decrease in ~~fiscal year 2018 over 2017~~the average price per pallet for the current period was ~~primarily due~~the result of price adjustments to ~~sales growth to a pallet leasing company, one~~reflect decreases in the average cost of ~~Greystone’s major customers.~~raw materials.

Greystone ~~has two major~~had three customers ~~who~~which accounted for approximately 83% in the six months ended November 30, 2023 and 73% ~~and 67%~~in the six months ended November 30, 2022 of ~~sales in fiscal years 2018 and 2017, respectively. Pallet sales to Greystone’s major customers are generally based on the customers’ need which may vary by period.~~sales. Greystone is not able to predict the future needs of these major customers and will continue its efforts to grow sales through the addition of new customers developed through Greystone’s marketing efforts.

Cost of sales ~~in fiscal year 2018~~for the six months ended November 30, 2023 was ~~$16,976,241,~~$25,828,480, or ~~85%~~78.2% of sales, compared to ~~$14,868,884,~~$27,369,753, or ~~87%~~88.1% of sales for the six months ended November 30, 2022. The improvement in the ratio of cost of sales to sales for the six months ended November 30, 2023, over the prior period was primarily the result of an approximate 29.4% increase in pallet production and improvements in productivity and an approximate 36.2% decrease in the average cost of Greystone blended raw materials. The Company produces pallets manufactured using either customer materials or its Greystone blend of purchased recycled plastic.

Gross profit for the six months ended November 30, 2023, was $7,187,227, or 21.8% of sales, compared to $3,685,520, or 11.9% of sales, for the six months ended November 30, 2022. The improved gross profits for the six months ended November 30, 2023, were the result of the Company’s changes to pricing of pallets manufactured with the Greystone blend, a drop in the cost of resin, and increased sales as discussed above.

Selling, general and administrative expenses (SG&A) were $2,586,974, or 7.8% of sales, in ~~fiscal year 2017. The decrease in cost of sales as a percentage~~the six months ended November 30, 2023 compared to $2,311,579, or 7.4% of sales, in ~~fiscal year 2018 compared to fiscal year 2017 was principally due to setup costs incurred in fiscal year 2017 to fulfill~~ the ~~production requirements for the pallet leasing company.~~

~~General, selling and administrative expenses were $1,452,416 in fiscal year 2018 compared to $1,387,304 in fiscal year 2017~~six months ended November 30, 2022 for an increase of ~~$65,112, or approximately 5%.~~$275,395. The increase ~~in fiscal year 2018 over fiscal year 2017 was attributable~~is primarily due to ~~general business growth.~~enhanced efforts directed toward marketing Greystone’s pallets.

During the six months ended November 30, 2022, Greystone recognized a gain on the deconsolidation of the variable interest entity GRE in the amount of $569,997.

Other income ~~was $12,069 and $-0- in fiscal years 2018 and 2017, respectively. The source of other income is~~generally from the sale of scrap ~~material.~~material in the six months ended November 30, 2023 was $3,153, and for the six months ended November 30, 2022 was $6,318.

Interest expense was ~~$658,736 and $542,800~~$672,361 in ~~fiscal years 2018 and 2017 for~~the six months ended November 30, 2023 compared to $507,762 the six months ended November 30, 2022, representing an increase of ~~$115,936. The increase in interest expense in fiscal year 2018 over fiscal year 2017~~$164,599. Greystone’s debt is ~~principally due to an increase in debt, a 0.75% increase in~~based on the prime rate of interest ~~and an increase in amortization expense associated with debt service costs.~~which had a weighted average of 8.42% for the six months November 30, 2023, compared to 5.62% for the six months ended November 30, 2022.

The provision for income taxes for the six months ended November 30, 2023 was ~~$259,500~~$1,217,000 and ~~$54,550 in fiscal years 2018 and 2017, respectively.~~for the six months ended November 30, 2022 was $256,000. The ~~provision for~~effective tax rate differs from federal statutory rates due principally to state income taxes, ~~does not include~~charges (income) which have no tax benefit (expense), changes in the valuation allowance, and the basis that net income from ~~the variable interest entity as the entity~~GRE is not ~~included in~~taxable at the ~~income tax returns~~corporate level because GRE is a limited liability company of which Greystone ~~and the taxable income of the entity is passed-through to the respective owners.~~has no equity ownership.

Based upon a review of its income tax filing positions, Greystone believes that its positions would be sustained upon an audit by the Internal Revenue Service and does not anticipate any adjustments that would result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded.

Greystone recorded net income for the six months ended November 30, 2023 of ~~$674,353 in fiscal year 2018~~$2,709,045 compared to ~~$212,434 in fiscal year 2017~~the six months ended November 30, 2022 of $1,186,494 primarily for the reasons discussed above.

~~Net~~The income attributable to common stockholders for ~~fiscal year 2018~~the six months ending November 30, 2023 was ~~$363,371,~~$2,416,374, or ~~$0.01~~$0.09 per share, compared to ~~a net loss attributable to common stockholders $(76,330),~~the six months ending November 30, 2022 of $908,128 or ~~$(0.00)~~$0.03 per share, ~~in fiscal year 2017~~ primarily for the reasons discussed above.

~~Three-Month Period~~Three Months Ended November 30, ~~2017~~2023 Compared to ~~Three-Month Period~~Three Months Ended November 30, ~~2016~~2022

Sales for ~~fiscal year 2018~~the three months ended November 30, 2023 were ~~$9,722,102~~$15,597,036 compared to ~~$9,221,711 in fiscal year 2017~~the three months ended November 30, 2022 of $12,101,674, for an increase of ~~$500,391. The~~$3,495,362, or 28.9%. This increase in ~~pallet~~ sales was principally the result of increased sales of approximately 29.5% in ~~fiscal year 2018 over 2017 was primarily due to sales growth to a pallet leasing company, one~~the quantity of ~~Greystone’s major customers.~~pallets sold.

Greystone generally has ~~two major~~a limited number of customers, ~~who~~generally 2 to 4, that accounted for approximately ~~73%~~85% and ~~70%~~77% of sales ~~in fiscal years 2018~~during the three months ended November 30, 2023 and ~~2017,~~2022, respectively. ~~Pallet sales to Greystone’s major customers are generally based on the customers’ need which may vary by period.~~ Greystone is not able to predict the future needs of these major customers and will continue its efforts to ~~grow~~increase sales through the addition of new customers developed through Greystone’s marketing efforts.

Cost of sales ~~in fiscal year 2018~~for the three months ended November 30, 2023 was ~~$8,588,065,~~$12,459,570, or ~~88%~~80% of sales, compared to ~~$7,992,441,~~the three months ended November 30, 2022 of $10,879,300, or ~~87%~~90% of sales. The improvement in cost of sales to sales for the three months ended November 30, 2023, over the prior period was primarily the result of an approximate 56.4% increase in pallet production allowing a larger base to allocate inflexible manufacturing costs and improvements in productivity. The Company produces pallets manufactured using either customer materials or its Greystone blend of purchased recycled plastic.

Selling, general and administrative expenses (SG&A) were $1,374,024, or 8.8% of sales, for the three months ended November 30, 2023 compared to $1,205,988, or 10.0% of sales, for the three months ended November 30, 2022 for an increase of $168,036. SG&A costs during the current period compared to the prior period showed general consistency with past performance. The decrease in the percentage of SG&A to sales results from the increase of sales in ~~fiscal year 2017. Cost of sales in fiscal year 2018 were adversely affected because of (a) two injection molding machines that were out-of-service during~~ the ~~month of~~three months ended November ~~2017 for maintenance and (b) setup costs incurred to place an additional injection molding machine into service in~~30, 2023 over three months ended November ~~2017.~~30, 2022.

General, selling and administrative expenses were $621,013 in fiscal year 2018 compared to $664,275 in fiscal year 2017 for a decrease of $43,262 or 7%. The decrease in fiscal year 2018 over fiscal year 2017 is primarily attributable to timing of expenses for the respective periods.

Other income ~~was $3,806 and $-0- in fiscal years 2018 and 2017, respectively. The source of other income is~~generally from the sale of scrap ~~material.~~material for the three months ended November 30, 2023 was $1,554, and for the three months ended November 30, 2022 was $683.

Interest expense was ~~$334,059 in fiscal year 2018~~$330,170 for the three months ended November 30, 2023 compared to ~~$306,169 in fiscal year 2017~~$288,316 for the three months ended November 30, 2022, representing an increase of ~~$27,890. The increase~~$164,599. Greystone’s debt is ~~principally attributable to increases in debt and an increase in~~based on the prime rate of interest ~~by 0.75% at~~which had a weighted average of 8.42% for the six months November 30, ~~2017~~2023, compared to 5.62% for the six months ended November 30, ~~2016.~~

The provision for (benefit from) income taxes for the three months ended November 30, 2023 was ~~$38,700~~$470,000 and ~~$73,400 in fiscal years 2018 and 2017, respectively.~~for the three months ended November 30, 2022 $(84,000). The ~~provision for~~effective tax rate differs from federal statutory rates due principally to state income taxes, ~~does not include~~charges or income which have no tax benefit or expense, changes in the valuation allowance, and the basis that the net income from ~~the variable interest entity as the entity~~GRE is not ~~included in~~taxable at the ~~income tax returns~~corporate level because GRE is a limited liability company of which Greystone ~~and the taxable income from this entity is passed-through to the respective owners.~~has no equity ownership.

Greystone recorded net income for the three months ended November 30, 2023 of ~~$144,071 in fiscal year 2018~~$964,826 compared to ~~$185,426 in fiscal year 2017~~a loss of $(187,247) for the three months ended November 30, 2022, primarily for the reasons discussed above.

The income attributable to common stockholders (net income less preferred dividends and GRE’s net income, as applicable) for the three months ended November 30, 2023 was $818,354, or $0.03 per share, compared to a loss attributable to common stockholders for ~~fiscal year 2018 was $(11,337)~~the three months ended November 30, 2022 of $(306,596), or ~~$(0.00)~~$(0.01) per share ~~compared to net income of $41,109, or $0.00 per share, in fiscal year 2017~~ primarily for the reasons discussed above.

A summary of cash flows for the ~~six-month period~~six months ended November 30, ~~2017~~2023 is as follows:

Greystone had a working capital ~~deficit~~ of ~~$(3,246,218) at~~$6,998,197 as of November 30, ~~2017.~~2023. To provide for the funding to meet ~~Greystone’s~~Greystone's operating activities and contractual obligations as of November 30, ~~2017,~~2023, Greystone will have to continue to produce positive operating results or explore various options including additional long-term debt and equity financing. However, there is no guarantee that Greystone will continue to create positive operating results or be able to raise sufficient capital to meet these obligations.

As ~~discussed in Note 6 to the consolidated financial statements, Greystone has one relatively near-term loan with IBC, Term Loan A, which had an outstanding balance~~ of ~~$4,287,282 at~~ November 30, 2017 with a maturity date of January 7, 2019. Greystone’s management believes that IBC will renew this note at the appropriate time under similar terms. Effective January 10, 2018 and as discussed further in Note 12 to the consolidated financial statements,2023, Greystone ~~and IBC entered into the Fifth Amendment to the IBC Loan Agreement dated January 31, 2014 which provided~~had no commitments for (1) converting the existing revolving loan with a balance of $2,500,000 at November 30, 2017 into a four-year term loan, (2) new funding in the amount of $1,000,000 for the purchase of production equipment with interest only for one year and principal and interest to be amortized over four years and (3) a new revolving loan for $3,000,000 with a maturity date of January 31, 2020.capital expenditures.

~~Substantially all~~A substantial amount of ~~the~~Greystone’s debt financing ~~that Greystone~~ has ~~received through the last few fiscal years~~ resulted primarily from ~~loans provided by certain officers and directors of Greystone and~~ bank notes which are guaranteed by certain officers and directors of Greystone. From time to time, loans have been provided by certain officers and directors of Greystone of which there are none outstanding as of November 30, 2023. Greystone continues to be dependent upon its officers and directors to ~~provide and/~~secure, or ~~secure~~possibly provide, additional financing and there is no assurance that its officers and directors will continue to do ~~so.~~so, or that they will do so on terms that are acceptable to Greystone. As such, there is no assurance that funding will be available for Greystone to continue operations.

Greystone has 50,000 outstanding shares of cumulative 2003 Preferred Stock with a liquidation preference of $5,000,000 and a preferred dividend rate of the prime rate of interest plus 3.25%. Greystone does not anticipate that it will make cash dividend payments to any holders of its common stock unless and until the financial position of Greystone improves through increased revenues, another financing transaction or otherwise. Pursuant to the IBC Loan Agreement, as discussed in Note 6 to the consolidated financial statements, Greystone may pay dividends on its preferred stock in an amount not to exceed $500,000 per year.

~~This Quarterly Report~~Greystone does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on ~~Form 10-Q includes certain~~our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Greystone believes that the following critical policies affect Greystone’s more significant judgments and estimates used in preparation of Greystone’s financial statements.

The preparation of unaudited consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that ~~may be deemed “forward-looking statements” within~~affect the ~~meaning~~reported amounts of ~~Section 27A~~assets and liabilities and disclosure of contingent assets and liabilities at the date of the ~~Securities Act~~financial statements and the reported amounts of ~~1933, as amended,~~revenues and ~~Section 21E~~expenses during the reporting period. Actual results could differ from those estimates.

Revenue is recognized at the point in 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 ~~Securities Exchange Act~~goods is subject to approval by the customer, revenue is recognized upon approval by the customer unless, historically, there have been insignificant rejections of ~~1934,~~goods by the customer.

Trade receivables are carried at original invoice amount less an estimate made for doubtful accounts. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history and current economic conditions. Trade receivables are written off against the allowance when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when received. The Company generally does not charge interest on past due accounts.

Inventory consists of finished pallets and raw materials which are stated at the lower of average cost or net realizable value. Management applies overhead costs to inventory based on an analysis of the Company's expense categories. The specific costs are then applied to inventory based on production during the period. Management relies on estimates and assumptions regarding the specific costs to include in the production costs, as ~~amended. These forward-looking~~well as the period to use in determining inventory production.

Greystone accounts for income taxes under the liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax assets and liabilities are ~~made in reliance~~determined based on the ~~safe harbor protections provided under~~difference between the ~~Private Securities Litigation Reform Act~~consolidated financial statements and tax bases of ~~1995. All statements, other~~assets and liabilities and tax loss carryforwards using enacted tax rates in effect for the year in which the differences are expected to reverse.

A deferred tax asset is recognized for tax-deductible temporary differences and operating losses using the applicable enacted tax rate. In assessing the realizability of deferred tax assets, management considers the likelihood of whether it is more likely than ~~statements of historical fact, that address activities, events or developments~~not the net deferred tax asset will be realized. Based on this evaluation, management will provide a valuation allowance if it is determined more likely than not the associated asset will not be recognized. Based on this, management has determined that Greystone ~~expects, believes or anticipates~~ will or may occur in the future, including decreased costs, securing financing, the profitability of Greystone, potential sales of pallets or other possible business developments, are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties. The forward-looking statements contained in this Quarterly Report on Form 10-Q could be affected by any of the following factors: Greystone’s prospects could be affected by changes in availability of raw materials, competition, rapid technological change and new legislation regarding environmental matters; Greystone may not be able to ~~secure additional financing necessary to sustain and grow its operations;~~realize the full effect of the deferred tax assets and a valuation allowance of $793,337 and $1,044,361 has been recorded as of November 30, 2023 and May 31, 2023, respectively.

Management does not believe that any recently issued, but not yet effective, accounting standards could have a material ~~portion of Greystone’s business is and will be dependent upon a few large customers and there is no assurance that~~effect on the accompanying unaudited consolidated financial statements. As new accounting pronouncements are issued, Greystone will ~~be able to retain such customers. These risks and other risks~~adopt those that ~~could affect Greystone’s business~~ are ~~more fully described in Greystone’s Form 10-K for~~applicable under the fiscal year ended May 31, 2017, which was filed on August 25, 2017. Actual results may vary materially from the forward-looking statements. Greystone undertakes no duty to update any of the forward-looking statements contained in this Quarterly Report on Form 10-Q.circumstances.

As of the end of the period covered by this Quarterly Report on Form 10-Q, Greystone carried out an evaluation under the supervision of ~~Greystone’s~~Greystone's Chief Executive Officer (CEO) and Chief Financial Officer (CFO) of the effectiveness of ~~the design and operation of Greystone’s~~Greystone's disclosure controls and procedures pursuant to the ~~Securities Exchange Act~~ Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (“Exchange Act”). Based on an evaluation as of May 31, 2017, Warren F. Kruger, Greystone’s Chief Executive Officer, and William W. Rahhal, Greystone’s Chief Financial Officer, identified one material weakness in Greystone’s internal control over financial reporting. As of the end of the period covered by this Quarterly Report on Form 10-Q, such material weakness had not been rectified. As a result of the continuation of this material weakness,November 30, 2023, Greystone’s CEO and ~~Chief Financial Officer~~CFO concluded that Greystone’s disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) were ~~not~~ effective atas of November 30, ~~2017.~~2023.

During the ~~six-month period~~six months ended November 30, ~~2017,~~2023, there were no changes in ~~Greystone’s~~Greystone's internal controls over financial reporting that have materially affected, or that are reasonably likely to materially affect, ~~Greystone’s~~Greystone's internal control over financial reporting.

~~Item 3. Defaults Upon Senior Securities.~~

Item 3.

Defaults Upon Senior Securities.

	2023			2022
Lease Expense
Financing lease expense -
Amortization of right-of-use assets	$	15,397		$	180,240
Interest on lease liabilities		1,085			25,261
Operating lease expense		328,070			190,343
Short-term lease expense		801,548			783,360
Total	$	1,146,100		$	1,179,204

Other Information
Cash paid for amounts included in the measurement of lease liabilities for finance leases -
Operating cash flows	$	1,085		$	25,261
Financing cash flows	$	20,008		$	549,029
Cash paid for amounts included in the measurement of lease liabilities for operating leases -
Operating cash flows	$	328,070		$	190,343
Weighted-average remaining lease term (in years) -
Financing leases		1.4			1.9
Operating leases		13.6			14.6
Weighted-average discount rate -
Financing leases		4.2	%		4.7	%
Operating leases		6.0	%		6.0	%

Twelve months ended November 30, 2018	$	2,280,000
Twelve months ended November 30, 2019		521,607
Total lease payments		2,801,607
Imputed interest		89,318
Present value of minimum lease payments	$	2,712,289

	Financing Leases		Operating Leases
Twelve months ended November 30, 2024	$	29,686	$	543,037
Twelve months ended November 30, 2025		10,463		534,000
Twelve months ended November 30, 2026		1,505		534,000
Twelve months ended November 30, 2027		-		542,920
Twelve months ended November 30, 2028		-		560,760
Thereafter		-		4,999,720
Total future minimum lease payments		41,654		7,714,437
Present value discount		1,219		2,474,340
Present value of minimum lease payments	$	40,435	$	5,240,097

	Total		Less than 1 year		1-3 years		4-5 years		Thereafter
Long-term debt	$	14,669,888	$	2,321,333	$	4,526,574	$	7,821,981	$	-
Financing lease rents	$	41,654	$	29,686	$	11,968	$	-	$	-
Operating lease rents	$	7,714,437	$	543,037	$	1,068,000	$	1,103,680	$	4,999,720
Commitments	$	-	$	-	$	-	$	-	$	-

31.1*	~~10.1~~	~~Fifth Amendment dated January 10, 2018 to the Loan Agreement dated January 31, 2014 among Greystone Logistics, Inc., Greystone Manufacturing, LLC and International Bank of Commerce.~~

	~~10.2~~	~~Promissory note (Term Loan D) dated January 10, 2018 made by Greystone Logistics, Inc. and Greystone Manufacturing, LLC to International Bank of Commerce.~~

	~~10.3~~	~~Promissory note (Term Loan E) dated January 10, 2018 made by Greystone Logistics, Inc. and Greystone Manufacturing, LLC to International Bank of Commerce.~~

	~~10.4~~	~~Promissory note (Revolving Loan) dated January 10, 2018 made by Greystone Logistics, Inc. and Greystone Manufacturing, LLC to International Bank of Commerce.~~

	November 30, 2017			May 31, 2017
Assets
Current Assets:
Cash	$	528,450		$	579,021
Accounts receivable -
Trade, net of allowance for doubtful accounts of $31,660 at November 30, 2017 and May 31, 2017		1,940,167			6,160,145
Related party receivables		73,027			73,578
Inventory		3,039,936			1,587,552
Prepaid expenses		113,158			136,395
Total Current Assets		5,694,738			8,536,691

Property and Equipment, net		21,053,357			19,706,782

Deferred Tax Asset		38,915			281,415

Total Assets	$	26,787,010		$	28,524,888

Liabilities and Equity
Current Liabilities:
Current portion of long-term debt	$	2,794,286		$	2,493,236
Current portion of capital lease		2,194,217			2,261,560
Accounts payable and accrued expenses		3,921,631			5,727,903
Accrued expenses - related parties		-			29,076
Preferred dividends payable		30,822			29,726
Total Current Liabilities		8,940,956			10,541,501

Long-Term Debt, net of current portion		15,803,513			15,310,754

Capital Lease, net of current portion		518,072			1,532,503

Equity:
Preferred stock, $0.0001 par value, cumulative, 20,750,000 shares authorized, 50,000 shares issued and outstanding, liquidation preference of $5,000,000		5			5
Common stock, $0.0001 par value, 5,000,000,000 shares authorized, 28,361,201 shares issued and outstanding		2,836			2,836
Additional paid-in capital		53,790,764			53,790,764
Accumulated deficit		(53,361,620	)		(53,724,991	)
Total Greystone Stockholders’ Equity		431,985			68,614
Non-controlling interest		1,092,484			1,071,516
Total Equity		1,524,469			1,140,130

Total Liabilities and Equity	$	26,787,010		$	28,524,888

	For the Six Months Ended November 30,
	2017			2016

Sales	$	20,009,177		$	17,065,972

Cost of Sales		16,976,241			14,868,884

Gross Profit		3,032,936			2,197,088

General, Selling and Administrative Expenses		1,452,416			1,387,304

Operating Income		1,580,520			809,784

Other Income (Expense):
Other income		12,069			-
Interest expense		(658,736	)		(542,800	)

Income before Income Taxes		933,853			266,984
Provision for Income Taxes		259,500			54,550
Net Income		674,353			212,434

Income Attributable to Variable Interest Entity		(122,968	)		(119,552	)

Preferred Dividends		(188,014	)		(169,212	)

Net Income (Loss) Attributable to Common Stockholders	$	363,371		$	(76,330	)

Income (Loss) Per Share of Common Stock -
Basic and Diluted	$	0.01		$	(0.00	)

Weighted Average Shares of Common Stock Outstanding -
Basic		28,361,201			28,283,332
Diluted		28,988,701			28,283,332

	For the Three Months Ended November 30,
	2017			2016

Sales	$	9,722,102		$	9,221,711

Cost of Sales		8,588,065			7,992,441

Gross Profit		1,134,037			1,229,270

General, Selling and Administrative Expenses		621,013			664,275

Operating Income		513,024			564,995

Other Income (Expense):
Other income		3,806			-
Interest expense		(334,059	)		(306,169	)

Income before Income Taxes		182,771			258,826
Provision for Income Taxes		38,700			73,400
Net Income		144,071			185,426

Income Attributable to Variable Interest Entity		(61,915	)		(60,173	)

Preferred Dividends		(93,493	)		(84,144	)

Net Income (Loss) Attributable to Common Stockholders	$	(11,337	)	$	41,109

Income (Loss) Per Share of Common Stock -
Basic and Diluted	$	(0.00	)	$	0.00

Weighted Average Shares of Common Stock Outstanding -
Basic		28,361,201			28,361,201
Diluted		28,361,201			28,940,368

	2017		2016
Six-month periods ended November 30:
Options to purchase common stock		-		200,000
Warrants to purchase common stock		-		500,000
Preferred stock convertible into common stock		3,333,333		3,333,333

Total		3,333,333		4,033,333

Three-month periods ended November 30:
Options to purchase common stock		200,000		-
Warrants to purchase common stock		500,000		-
Preferred stock convertible into common stock		3,333,333		3,333,333

Total		4,033,333		3,333,333

	November 30, 2017			May 31, 2017
Term loan A payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.0%, maturing January 7, 2019	$	4,287,282		$	4,626,191

Term loan B payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.0%, maturing January 7, 2019		1,215,061			1,715,132

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, 2020		1,721,667			-

Revolving loan payable to International Bank of Commerce, prime rate of interest plus 0.5% but not less than 4.0%, due January 31, 2019		2,500,000			2,260,000

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		1,248,240			1,396,448

Term loan payable by GRE to International Bank of Commerce, interest rate of 4.5%, monthly principal and interest payment of $26,215, due January 31, 2019		2,748,105			2,841,285

Note payable to Robert Rosene, 7.5% interest, due January 15, 2019		4,469,355			4,469,355

Note payable to Yorktown Management & Financial Services, LLC, 5% interest, due February 28, 2019, monthly principal and interest payments of $20,629		299,358			413,969

Other		272,950			310,036
Total Debt		18,762,018			18,032,416
Debt issue costs, net of amortization		(164,219	)		(228,426	)
Less: Current portion		(2,794,286	)		(2,493,236	)
Long-term debt	$	15,803,513		$	15,310,754

	November 30, 2017			May 31, 2017
Non-cancellable capital lease with private company, interest rate of 5%, due August 7, 2019	$	2,712,289		$	3,794,063
Less: Current portion		(2,194,217	)		(2,261,560	)
Non-cancellable capital lease, net of current portion	$	518,072		$	1,532,503

Cash provided by operating activities	$	3,587,049		$	7,730,472

Cash used in investing activities		(2,996,530	)	$	(1,345,880	)

Cash used in financing activities		(641,090	)	$	(2,897,137	)

	~~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-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002 (submitted herewith).~~2002.
31.2*
	~~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-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002 (submitted herewith).~~2002.
32.1**
	~~32.1~~	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002 (submitted herewith).~~2002.
32.2**
	~~32.2~~	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002 (submitted herewith).~~2002.
101.INS*		Inline XBRL Instance Document.
10. SCH*	~~101~~ Inline XBRL Taxonomy Extension Schema Document.
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase.
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase.
101.LAB*	Inline XBRL Taxonomy Extension Labels Linkbase.
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase.
104*	Cover Page Interactive ~~data files pursuant to Rule 405 of Regulation S-T: (i)~~Data File (embedded within the Consolidated Balance Sheets at November 30, 2017 and May 31, 2017, (ii) the Consolidated Statements of Operations for the six-month and three-month periods ended November 30, 2017 and 2016, (iii) the Consolidated Statements of Cash Flows for the six-month periods ended November 30, 2017 and 2016, and (iv) the Notes to the Consolidated Financial Statements (submitted herewith)Inline XBRL document).

	GREYSTONE LOGISTICS, INC.
	(Registrant)

Date: January 16, 2024	/s/ Warren F. Kruger
	Warren F. Kruger, President and Chief
	Executive Officer (Principal Executive Officer)
	~~(Registrant)~~

Date: January 16, ~~2018~~2024	/s/ ~~Warren F. Kruger~~Curtis B. Crosier
	~~Warren F. Kruger, President and Chief~~
	~~Executive Officer (Principal Executive Officer)~~

~~Date: January 16, 2018~~	~~/s/ William W. Rahhal~~
	~~William W. Rahhal,~~Curtis B. Crosier, Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)