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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-KSB/A
                                (AMENDMENT NO. 1)

   [X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934

                  For the Fiscal Year Ended  May 31, 2006
                                             ------------

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

         For the transition period from _______________ to______________

                        Commission file number 000-26331
                                               ---------


                            GREYSTONE LOGISTICS, INC.
                 (Name of small business issuer in its charter)

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

 1613 EAST 15TH STREET, TULSA, OKLAHOMA                   74120
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(Address of principal executive offices)                (Zip Code)

                                 (918) 583-7441
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                           (Issuer's Telephone Number)

Securities registered under Section 12(b) of the Exchange Act:

         Title of each class                     Name of each exchange
                                                 on which registered
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                NONE                                     NONE

Securities registered under Section 12(g) of the Exchange Act:

                         COMMON STOCK, $0.0001 PAR VALUE
--------------------------------------------------------------------------------
                                (Title of class)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. [X] Yes [ ] No

<PAGE>

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ ]

The issuer's revenue for the year ended May 31, 2006, was $15,956,386.

As of August 21, 2006, the aggregate market value of the voting common stock
held by non-affiliates of the registrant, computed by using the average of the
high and low price on such date, was $1,326,599.

As of August 21, 2006, the issuer had outstanding a total of 24,061,201 shares
of its $0.0001 par value common stock.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      NONE.


Transitional Small Business Disclosure Format (Check one):  Yes [ ]  No  [X]

















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                            GREYSTONE LOGISTICS, INC.
                                  FORM 10-KSB/A
                                (AMENDMENT NO. 1)
                                TABLE OF CONTENTS


PART I

Item 3. Legal Proceedings                                                    4































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                                EXPLANATORY NOTE

     This Form 10-KSB/A is being filed by Greystone Logistics, Inc. (the
"Company"), as Amendment No. 1 (the "Amendment") to the Company's Annual Report
on Form 10-KSB for the fiscal year ended May 31, 2006 (the "Prior Form 10-KSB"),
to amend Part I of the Prior Form 10-KSB by adding a description of a legal
proceeding under Item 3 below. The information contained herein has not been
updated to reflect events or developments that may have occurred subsequent to
May 31, 2006.

PART I.

ITEM 3. LEGAL PROCEEDINGS

1607 Commerce Limited Partnership, a Texas limited partnership, vs. Plastic
Pallet Production, Inc., a Texas corporation, Greystone Logistics, Inc., an
Oklahoma corporation, f/k/a PalWeb Corporation, and Greystone Manufacturing,
L.L.C., an Oklahoma limited liability company, Case No. CJ-06-489W, District
Court of Cleveland County, State of Oklahoma.

     The petition in the above referenced litigation was filed on March 27,
2006. The plaintiff alleges, among other things, that: (a) one of the Company's
wholly owned subsidiaries, Plastic Pallet Production, Inc., or PPP, is in
default under an equipment lease agreement dated September 8, 2003 with a
130-month term pursuant to which PPP agreed to lease certain plastic injection
molding equipment from plaintiff in exchange for monthly rental payments of
$48,000; (b) PPP is indebted to plaintiff in the amount of $576,000,
representing monthly rental payments from April, 2005 through March, 2006 along
with: (i) further amounts that will accrue through the date of trial at the rate
of $48,000 per month; (ii) interest on unpaid amounts at the rate of 18% per
annum; and (iii) attorney fees incurred in connection with the collection of the
past due amounts; and (c) the Company and its other wholly owned subsidiary,
Greystone Manufacturing, L.L.C. are liable for PPP's default under the equipment
lease agreement pursuant to a guaranty agreement. In addition, the plaintiff has
petitioned the court to declare that it has a valid, perfected security interest
in certain collateral, and seeks an order requiring that the Company assemble
such collateral and make it available for repossession and an order that the
plaintiff is entitled to notify third parties obligated on any such collateral.

     The Company has filed an answer generally denying certain allegations in
the petition and asserting defenses to non-payment. The Company has entered into
settlement discussions with the plaintiff and intends to vigorously defend the
suit if it is unable to settle the case upon suitable terms.

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<PAGE>

ITEM 13. EXHIBITS


EXHIBIT
  NO.     DESCRIPTION
  ---     -----------

2.1       Certificate of Ownership and Merger Merging PalWeb Corporation, a
          Delaware corporation, into PalWeb Oklahoma Corporation, an Oklahoma
          corporation, filed with the Delaware Secretary of State on May 2, 2002
          (incorporated herein by reference to Exhibit 2.1 of the Company's Form
          8-K12G3 dated May 2, 2002, which was filed with the SEC on May 24,
          2002).

2.2       Certificate of Ownership and Merger Merging PalWeb Corporation, a
          Delaware corporation, into PalWeb Oklahoma Corporation, an Oklahoma
          corporation, filed with the Oklahoma Secretary of State on May 2, 2002
          (incorporated herein by reference to Exhibit 2.2 of the Company's Form
          8-K12G3 dated May 2, 2002, which was filed with the SEC on May 24,
          2002).

3.1       Certificate of Incorporation of PalWeb Oklahoma Corporation filed with
          the Oklahoma Secretary of State on May 2, 2002 (incorporated herein by
          reference to Exhibit 3.1 of the Company's Form 8-K12G3 dated May 2,
          2002, which was filed with the SEC on May 24, 2002).

3.2       Bylaws of PalWeb Oklahoma Corporation as adopted on May 2, 2002
          (incorporated herein by reference to Exhibit 3.2 of the Company's Form
          8-K12G3 dated May 2, 2002, which was filed with the SEC on May 24,
          2002).

4.1       Certificate of Incorporation of PalWeb Oklahoma Corporation filed with
          the Oklahoma Secretary of State on May 2, 2002 (included in Exhibit
          3.1).

4.2       Certificate of the Designation, Preferences, Rights and Limitations of
          PalWeb Corporation's Series 2003 Cumulative Convertible Senior
          Preferred Stock (incorporated herein by reference to Exhibit 4.1 of
          the Company's Form 8-K dated September 8, 2003, which was filed with
          the SEC on September 23, 2003).

4.3       Certificate of Ownership and Merger Merging Greystone Logistics, Inc.,
          into PalWeb Corporation filed with the Oklahoma Secretary of State on
          March 18, 2005 (incorporated herein by reference to Exhibit 4.1 of the
          Company's Form 8-K dated March 18, 2005, which was filed with the SEC
          on March 24, 2005).

10.1      License Agreement by and between Westgate Capital Company, L.L.C., and
          PalWeb Corporation dated April 20, 2001 (incorporated herein by
          reference to Exhibit 10.21 of the Company's Form 10-KSB for the Fiscal
          Year Ended May 31, 2002, which was filed with the SEC on September 13,
          2002).

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<PAGE>

10.2      Non Exclusive Distribution Agreement between PalWeb Corporation and
          Bosh Material Handling Incorporated dated August 5, 2002 (incorporated
          herein by reference to Exhibit 10.23 of the Company's Form 10-KSB for
          the Fiscal Year Ended May 31, 2002, which was filed with the SEC on
          September 13, 2002).

10.3**    Form of Indemnity Agreement between Members of the Board of Directors
          and PalWeb Corporation (incorporated herein by reference to Exhibit
          10.30 of the Company's Form 10-KSB for the Fiscal Year Ended May 31,
          2002, which was filed with the SEC on September 13, 2002).

10.4      Indemnity Agreement by and between The Union Group, Inc., and Cabec
          Energy Corp. dated August 31, 1998 (incorporated herein by reference
          to Exhibit 10.6 of Amendment No. 3 to the Company's Form 10-SB, which
          was filed on May 2, 2000).

10.5**    Stock Option Plan of PalWeb Corporation (effective May 11, 2001), as
          amended (incorporated herein by reference to Exhibit 10.32 of the
          Company's Form 10-KSB for the Fiscal Year Ended May 31, 2002, which
          was filed with the SEC on September 13, 2002).

10.6**    Form of Non-Qualified Stock Option Agreement (incorporated herein by
          reference to Exhibit 99.8 of the Company's Form 10-KSB for the Fiscal
          Year Ended May 31, 2001, which was filed with the SEC on September 13,
          2001).

10.7**    Form of Incentive Stock Option Agreement (incorporated herein by
          reference to Exhibit 99.9 of the Company's Form 10-KSB for the Fiscal
          Year Ended May 31, 2001, which was filed with the SEC on September 13,
          2001).

10.8**    Form of Nonemployee Director Stock Option Agreement (incorporated
          herein by reference to Exhibit 99.10 of the Company's Form 10-KSB for
          the Fiscal Year Ended May 31, 2001, which was filed with the SEC on
          September 13, 2001).

10.9**    Form of Employee Director Incentive Stock Option Agreement
          (incorporated herein by reference to Exhibit 10.36 of the Company's
          Form 10-KSB for the Fiscal Year Ended May 31, 2002, which was filed
          with the SEC on September 13, 2002).

10.10     Assignment and Indemnity Agreement between the Company and Paul A.
          Kruger (regarding transfer of stock of PP Financial, Inc.) dated May
          30, 2002 (incorporated herein by reference to Exhibit 10.39 of the
          Company's Form 10-KSB for the Fiscal Year Ended May 31, 2002, which
          was filed with the SEC on September 13, 2002).

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<PAGE>

10.11     Letter Agreement dated January 22, 2003 between Gravity Management &
          Engineering Group, LLC and PalWeb Corporation (incorporated herein by
          reference to Exhibit 10.48 of the Company's Form 10-KSB for the Fiscal
          Year Ended May 31, 2003, which was filed with the SEC on September 15,
          2003).

10.12     Asset Purchase Agreement between Greystone Plastics, Inc. and
          Greystone Manufacturing, L.L.C. dated September 3, 2003 (incorporated
          herein by reference to Exhibit 10.1 of The Company's Form 8-K dated
          September 8, 2003, which was filed with the SEC on September 23,
          2003).

10.13     Senior Secured Promissory Note in the amount of $5,000,000 payable to
          Greystone Plastics, Inc. (incorporated herein by reference to Exhibit
          10.2 of The Company's Form 8-K dated September 8, 2003, which was
          filed with the SEC on September 23, 2003).

10.14     Real Estate Note in the amount of $2,500,000 payable to Greystone
          Plastics, Inc. (incorporated herein by reference to Exhibit 10.3 of
          The Company's Form 8-K dated September 8, 2003, which was filed with
          the SEC on September 23, 2003).

10.15     Wraparound Promissory Note in the amount of $799,454.06 payable to
          Bill Hamilton (incorporated herein by reference to Exhibit 10.4 of The
          Company's Form 8-K dated September 8, 2003, which was filed with the
          SEC on September 23, 2003).

10.16     Security Agreement between Greystone Plastics, Inc. and Greystone
          Manufacturing, L.L.C. dated September 3, 2003 (incorporated herein by
          reference to Exhibit 10.5 of The Company's Form 8-K dated September 8,
          2003, which was filed with the SEC on September 23, 2003).

10.17     Asset Purchase Agreement between Plastic Pallet Production, Inc. and
          1607 Commerce Limited Partnership dated September 8, 2003
          (incorporated herein by reference to Exhibit 10.7 of The Company's
          Form 8-K dated September 8, 2003, which was filed with the SEC on
          September 23, 2003).

10.18     Letter Agreement between Plastic Pallet Production, Inc. and 1607
          Commerce Limited Partnership dated September 8, 2003 (incorporated
          herein by reference to Exhibit 10.8 of The Company's Form 8-K dated
          September 8, 2003, which was filed with the SEC on September 23,
          2003).

                                        7
<PAGE>

10.19     Sale Agreement between Plastic Pallet Production, Inc. and 1607
          Commerce Limited Partnership dated September 8, 2003 (incorporated
          herein by reference to Exhibit 10.9 of The Company's Form 8-K dated
          September 8, 2003, which was filed with the SEC on September 23,
          2003).

10.20     Equipment Lease between 1607 Commerce Limited Partnership and Plastic
          Pallet Production, Inc. dated September 8, 2003 (incorporated herein
          by reference to Exhibit 10.10 of the Company's Form 8-K dated
          September 8, 2003, which was filed with the SEC on September 23,
          2003).

10.21     Lease Agreement between 1607 Commerce Limited Partnership and Plastic
          Pallet Production, Inc. dated September 8, 2003 (incorporated herein
          by reference to Exhibit 10.11 of the Company's Form 8-K dated
          September 8, 2003, which was filed with the SEC on September 23,
          2003).

10.22     Security Agreement among PalWeb Corporation, Plastic Pallet
          Production, Inc., Greystone Manufacturing, L.L.C. and 1607 Commerce
          Limited Partnership dated September 8, 2003 (incorporated herein by
          reference to Exhibit 10.12 of the Company's Form 8-K dated September
          8, 2003, which was filed with the SEC on September 23, 2003).

10.23     Guaranty of Obligations of Tenant Pursuant to Equipment Lease by
          PalWeb Corporation and Greystone Manufacturing, L.L.C. dated September
          8, 2003 (incorporated herein by reference to Exhibit 10.13 of the
          Company's Form 8-K dated September 8, 2003, which was filed with the
          SEC on September 23, 2003).

10.24     Guaranty of Obligations of Tenant Pursuant to Lease by PalWeb
          Corporation and Greystone Manufacturing, L.L.C. dated September 8,
          2003 (incorporated herein by reference to Exhibit 10.14 of the
          Company's Form 8-K dated September 8, 2003, which was filed with the
          SEC on September 23, 2003).

10.25     Stock Pledge Agreement between PalWeb Corporation and 1607 Commerce
          Limited Partnership dated September 8, 2003 (incorporated herein by
          reference to Exhibit 10.15 of the Company's Form 8-K dated September
          8, 2003, which was filed with the SEC on September 23, 2003).

10.26**   Employment Agreement between PalWeb Corporation and Warren Kruger
          dated August 13, 2003 (incorporated herein by reference to Exhibit
          10.35 of the Company's Form 10-KSB for the Fiscal Year Ended May 31,
          2004, which was filed with the SEC on August 30, 2004).

                                        8
<PAGE>

10.27**   Employment Agreement dated as of August 1, 2004, by and between PalWeb
          Corporation and Marshall S. Cogan (incorporated herein by reference to
          Exhibit 10.1 of the Company's Form 10-QSB for the Quarterly Period
          Ended November 30, 2004, which was filed with the SEC on January 19,
          2005).

10.28**   Employment Agreement dated as of November 1, 2004, by and between
          PalWeb Corporation and Robert H. Nelson (incorporated herein by
          reference to Exhibit 10.2 of the Company's Form 10-QSB for the
          Quarterly Period Ended November 30, 2004, which was filed with the SEC
          on January 19, 2005).

10.29     Form of Securities Purchase Agreement entered into between PalWeb
          Corporation and certain accredited investors in connection with
          November 2004 private placement (incorporated herein by reference to
          Exhibit 10.3 of the Company's Form 10-QSB for the Quarterly Period
          Ended November 30, 2004, which was filed with the SEC on January 19,
          2005).

10.30     Letter Agreement dated January 3, 2005, by and between Greystone
          Manufacturing, L.L.C., and Greystone Plastics, Inc. (incorporated
          herein by reference to Exhibit 10.4 of the Company's Form 10-QSB for
          the Quarterly Period Ended November 30, 2004, which was filed with the
          SEC on January 19, 2005).

10.31     Loan Agreement dated March 4, 2005, by and among Greystone
          Manufacturing, L.L.C., GLOG Investment, L.L.C., The F&M Bank & Trust
          Company and PalWeb Corporation (incorporated herein by reference to
          Exhibit 10.1 of the Company's Form 8-K dated March 4, 2005, which was
          filed with the SEC on March 10, 2005).

10.32     Promissory Note dated November 30, 2004, in the amount of $1,500,000
          issued by Greystone Manufacturing, L.L.C., to The F&M Bank & Trust
          Company (incorporated herein by reference to Exhibit 10.2 of the
          Company's Form 8-K dated March 4, 2005, which was filed with the SEC
          on March 10, 2005).

10.33     Term Note dated March 4, 2005, in the amount of $5,500,000 issued by
          Greystone Manufacturing, L.L.C., to The F&M Bank & Trust Company
          (incorporated herein by reference to Exhibit 10.3 of the Company's
          Form 8-K dated March 4, 2005, which was filed with the SEC on March
          10, 2005).

10.34     Security Agreement dated March 4, 2005, by and between Greystone
          Manufacturing, L.L.C., and The F&M Bank & Trust Company (incorporated
          herein by reference to Exhibit 10.4 of the Company's Form 8-K dated
          March 4, 2005, which was filed with the SEC on March 10, 2005).

                                        9
<PAGE>

10.35     Mortgage Agreement dated March 4, 2005, by and between Greystone
          Manufacturing, L.L.C., and The F&M Bank & Trust Company (incorporated
          herein by reference to Exhibit 10.5 of the Company's Form 8-K dated
          March 4, 2005, which was filed with the SEC on March 10, 2005).

10.36     Guaranty of PalWeb Corporation dated March 4, 2005 (incorporated
          herein by reference to Exhibit 10.6 of the Company's Form 8-K dated
          March 4, 2005, which was filed with the SEC on March 10, 2005).

10.37     Industrial Lease dated as of July 1, 2004, by and between Greystone
          Properties, LLC, and Greystone Manufacturing, L.L.C. (incorporated
          herein by reference to Exhibit 10.1 of the Company's Form 10-QSB for
          the Quarterly Period Ended February 28, 2005, which was filed with the
          SEC on April 20, 2005).

10.38     Equipment Rental Contract dated as of November 1, 2004, by and between
          NYOK Partners and Greystone Manufacturing, L.L.C. relating to certain
          grinding equipment (incorporated herein by reference to Exhibit 10.2
          of the Company's Form 10-QSB for the Quarterly Period Ended February
          28, 2005, which was filed with the SEC on April 20, 2005).

10.39     Equipment Rental Contract dated as of November 1, 2004, by and between
          NYOK Partners and Greystone Manufacturing, L.L.C. relating to plastic
          injection molding machine (incorporated herein by reference to Exhibit
          10.3 of the Company's Form 10-QSB for the Quarterly Period Ended
          February 28, 2005, which was filed with the SEC on April 20, 2005).
          Promissory Note dated as of June 17, 2005 in the amount of $500,100
          issued by Greystone Logistics, Inc. and Greystone

10.40     Manufacturing, L.L.C. to Robert B. Rosene, Jr. (incorporated herein by
          reference to Exhibit 10.1 of the Company's Form 10-QSB for the
          Quarterly Period Ended November 30, 2005, which was filed with the SEC
          on January 17, 2006).

10.41     Promissory Note dated as of December 15, 2005 in the amount of
          $2,066,000 issued by Greystone Logistics, Inc. and Greystone
          Manufacturing, L.L.C. to Robert B. Rosene, Jr. (incorporated herein by
          reference to Exhibit 10.2 of the Company's Form 10-QSB for the
          Quarterly Period Ended November 30, 2005, which was filed with the SEC
          on January 17, 2006).

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<PAGE>

10.42     Promissory Note dated as of December 15, 2005 in the amount of
          $527,716 issued by Greystone Logistics, Inc. and Greystone
          Manufacturing, L.L.C. to Warren F. Kruger, Jr. (incorporated herein by
          reference to Exhibit 10.3 of the Company's Form 10-QSB for the
          Quarterly Period Ended November 30, 2005, which was filed with the SEC
          on January 17, 2006).

10.43     Security Agreement dated as of December 15, 2005 by and between
          Greystone Logistics, Inc. and Greystone Manufacturing, L.L.C. and
          Robert B. Rosene, Jr. relating to Promissory Note in the amount of
          $500,100 (incorporated herein by reference to Exhibit 10.4 of the
          Company's Form 10-QSB for the Quarterly Period Ended November 30,
          2005, which was filed with the SEC on January 17, 2006).

10.44     Security Agreement dated as of December 15, 2005 by and between
          Greystone Logistics, Inc. and Greystone Manufacturing, L.L.C. and
          Robert B. Rosene, Jr. relating to Promissory Note in the amount of
          $2,066,000 (incorporated herein by reference to Exhibit 10.5 of the
          Company's Form 10-QSB for the Quarterly Period Ended November 30,
          2005, which was filed with the SEC on January 17, 2006).

10.45     Security Agreement dated as of December 15, 2005 by and between
          Greystone Logistics, Inc. and Greystone Manufacturing, L.L.C. and
          Warren F. Kruger, Jr. relating to Promissory Note in the amount of
          $527,716 (incorporated herein by reference to Exhibit 10.6 of the
          Company's Form 10-QSB for the Quarterly Period Ended November 30,
          2005, which was filed with the SEC on January 17, 2006).

11.1      Computation of Loss Per Share is in Note 1 in the Notes to the
          Financial Statements (incorporated herein by reference to Exhibit 11.1
          of the Company's Form 10-KSB for the Fiscal Year Ended May 31, 2006,
          which was filed with the SEC on September 13, 2006).

21.1      Subsidiaries of Greystone Logistics, Inc. (incorporated herein by
          reference to Exhibit 21.1 of the Company's Form 10-KSB for the Fiscal
          Year Ended May 31, 2006, which was filed with the SEC on September 13,
          2006).

23.1      Consent of Murrell, Hall, McIntosh & Co., PLLP (incorporated herein by
          reference to Exhibit 23.1 of the Company's Form 10-KSB for the Fiscal
          Year Ended May 31, 2006, which was filed with the SEC on September 13,
          2006).

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31.1      Certification of Chief Executive Officer pursuant to Rules 13a-14(a)
          and 15d-14(a) promulgated under the Securities Exchange Act of 1934,
          as amended, and Item 601(b)(31) of Regulation S-B, as adopted pursuant
          to Section 302 of the Sarbanes-Oxley Act of 2002 (submitted herewith).

31.2      Certification of Chief Financial Officer pursuant to Rules 13a-14(a)
          and 15d-14(a) promulgated under the Securities Exchange Act of 1934,
          as amended, and Item 601(b)(31) of Regulation S-B, as adopted pursuant
          to Section 302 of the Sarbanes-Oxley Act of 2002 (submitted herewith).

32.1      Certification of Chief Financial Officer (and interim principal
          executive officer) pursuant to 18 U.S.C. Section 1350, as adopted
          pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
          (incorporated herein by reference to Exhibit 32.1 of the Company's
          Form 10-KSB for the Fiscal Year Ended May 31, 2006, which was filed
          with the SEC on September 13, 2006).

**  Management contract or compensatory plan or arrangement required to be filed
    as an exhibit to this report.









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                                   SIGNATURES

     In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                        GREYSTONE LOGISTICS, INC.
                                               (Registrant)



Date:  11/28/06                        /s/ Warren F. Kruger
                                       ----------------------------------------
                                       Warren F. Kruger, President and
                                       Chief Executive Officer


















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