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

                                   FORM 10-QSB

 (Mark One)

     [X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
           ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED FEBRUARY 29, 2008


     [ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT FOR
           THE TRANSITION PERIOD FROM ______ TO ________

                        Commission file number 000-26331


                            GREYSTONE LOGISTICS, INC.
--------------------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)


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


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

                                 (918) 583-7441
--------------------------------------------------------------------------------
                           (Issuer's telephone number)


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

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. Yes [X] No [ ]

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

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: April 7, 2008 - 26,061,201

TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE): Yes  [ ] No [X]
================================================================================
<PAGE>

                            GREYSTONE LOGISTICS, INC.
                                   FORM 10-QSB
                     FOR THE PERIOD ENDED FEBRUARY 29, 2008

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS                                             PAGE

            Consolidated Balance Sheets
               as of February 29, 2008 (Unaudited) and May 31, 2007         1

            Consolidated Statements of Operations (Unaudited)
              For the Nine Month Periods Ended February 29, 2008
              and February 28, 2007                                         2

            Consolidated Statements of Operations (Unaudited)
              For the Three Month Periods Ended February 29, 2008
              and February 28, 2007                                         3

            Consolidated Statements of Cash Flows (Unaudited)
              For the Nine Month Periods Ended February 29, 2008
              and February 28, 2007                                         4

           Notes to Consolidated Financial Statements (Unaudited)           5

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION          8

ITEM 3.  CONTROLS AND PROCEDURES                                           12

PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS                                                 13

ITEM 6.  EXHIBITS                                                          13

SIGNATURES                                                                 14

<PAGE>
ITEM 1.  FINANCIAL STATEMENTS

                   GREYSTONE LOGISTICS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
<TABLE><CAPTION>

                                                                February 29,       May 31,
                                                                    2008            2007
                                                                ------------    ------------
                                                                (Unaudited)

                                Assets
<S>                                                             <C>             <C>
Current Assets:
        Cash                                                    $    358,097    $    340,334
        Accounts receivable                                        1,553,247       1,019,415
        Inventory                                                    436,074         237,769
        Prepaid expenses                                              68,291          57,653
                                                                ------------    ------------
              Total Current Assets                                 2,415,709       1,655,171

Property, Plant and Equipment,
        net of accumulated depreciation of
        $3,292,973 and $2,707,489 at February
        29, 2008 and May 31, 2007, respectively                    6,738,941       7,037,764

Other Assets                                                         123,343         127,140
                                                                ------------    ------------

Total Assets                                                    $  9,277,993    $  8,820,075
                                                                ============    ============

               Liabilities and Stockholders' Deficiency

Current Liabilities:
        Current portion of long-term debt                       $  9,351,085    $  8,655,518
        Advances payable - related party                             618,959         618,959
        Accounts payable and accrued expenses                      1,821,789         959,532
        Accounts payable and accrued expenses -
          related parties                                          2,403,451       2,903,087
        Preferred dividends payable                                1,492,464       1,088,808
                                                                ------------    ------------
              Total Current Liabilities                           15,687,748      14,225,904

Long-Term Debt, net of current portion                             3,060,610       4,297,427

Deferred Income                                                       80,000         128,000

Stockholders' Deficiency:
        Preferred stock, $0.0001 par value, 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, 26,061,201 issued and outstanding                2,606           2,606
        Additional paid-in capital                                52,693,226      52,693,226
        Accumulated deficit                                      (62,246,202)    (62,527,093)
                                                                ------------    ------------
              Total Stockholders' Deficiency                      (9,550,365)     (9,831,256)
                                                                ------------    ------------

Total Liabilities and Stockholders' Deficiency                  $  9,277,993    $  8,820,075
                                                                ============    ============
</TABLE>

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

                                        1
<PAGE>

                   GREYSTONE LOGISTICS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<TABLE><CAPTION>
                                                                      Nine Months Ended
                                                                       February 29/28,
                                                                ----------------------------
                                                                    2008            2007
                                                                ------------    ------------
<S>                                                             <C>             <C>
Sales                                                           $ 16,270,703    $  9,065,259

Cost of Sales                                                     13,582,342       8,840,652
                                                                ------------    ------------

Gross Profit                                                       2,688,361         224,607

General, Selling and Administrative Expenses                       1,184,601       1,368,902
                                                                ------------    ------------

Operating Income (Loss)                                            1,503,760      (1,144,295)

Other Income (Expense):
        Other income (expense)                                       110,576        (472,323)
        Interest expense                                            (929,789)       (953,021)
                                                                ------------    ------------
              Total Other Expense                                   (819,213)     (1,425,344)
                                                                ------------    ------------

Net Income (Loss)                                                    684,547      (2,569,639)

Preferred Dividends                                                  403,656         429,041
                                                                ------------    ------------

Net Income (Loss) Available to Common Stockholders              $    280,891    $ (2,998,680)
                                                                ============    ============

Income (Loss) Available to Common Stockholders
        Per Share of Common Stock - Basic                               0.01           (0.12)
                                                                ============    ============
        Per Share of Common Stock - Diluted                     $       0.01    $      (0.12)
                                                                ============    ============

Weighted Average Shares of Common Stock Outstanding
        Basic                                                     26,061,000      24,283,000
        Dilutive effect of warrants outstanding                      100,000            --
                                                                ------------    ------------
        Diluted                                                   26,161,000      24,283,000
                                                                ============    ============
</TABLE>

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

                                        2
<PAGE>

                   GREYSTONE LOGISTICS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<TABLE><CAPTION>
                                                                     Three Months Ended
                                                                       February 29/28,
                                                                ----------------------------
                                                                    2008            2007
                                                                ------------    ------------
<S>                                                             <C>             <C>
Sales                                                           $  5,427,428    $  2,574,428

Cost of Sales                                                      4,550,579       2,463,916
                                                                ------------    ------------

Gross Profit                                                         876,849         110,512

General, Selling and Administrative Expenses                         404,243         466,157
                                                                ------------    ------------

Operating Income (Loss)                                              472,606        (355,645)

Other Income (Expense):
        Other income (expense)                                        42,425        (474,536)
        Interest expense                                            (302,654)       (348,140)
                                                                ------------    ------------
              Total Other Expense                                   (260,229)       (822,676)
                                                                ------------    ------------

Net Income (Loss)                                                    212,377      (1,178,321)

Preferred Dividends                                                  120,616         141,781
                                                                ------------    ------------

Net Income (Loss) Available to Common Stockholders              $     91,761    $ (1,320,102)
                                                                ============    ============

Income (Loss) Available to Common Stockholders
        Per Share of Common Stock - Basic                       $       0.00    $      (0.05)
                                                                ============    ============
        Per Share of Common Stock - Diluted                     $       0.00    $      (0.05)
                                                                ============    ============

Weighted Average Shares of Common Stock Outstanding
        Basic                                                     26,061,000      24,728,000
        Dilutive effect of warrants outstanding                      106,000            --
                                                                ------------    ------------
        Diluted                                                   26,167,000      24,728,000
                                                                ============    ============
</TABLE>

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

                                        3
<PAGE>

                   GREYSTONE LOGISTICS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE><CAPTION>
                                                                            Nine Months Ended
                                                                             February 29/28,
                                                                      ----------------------------
                                                                          2008            2007
                                                                      ------------    ------------
<S>                                                                   <C>             <C>
Cash Flows from Operating Activities:
  Net income (loss)                                                   $    684,547    $ (2,569,639)
  Adjustments to reconcile net income (loss) to net cash
    provided by (used in) operating activities
        Depreciation and amortization                                      589,281         628,511
        Stock based compensation                                              --           196,060
        Recognition of deferred income                                     (48,000)           --
        Gain on sale of equipment and other assets                            --           (71,472)
        Loss on termination of long-term lease                                --           619,061
        Changes in accounts receivable                                    (533,832)        690,515
        Changes in inventory                                              (198,305)        568,155
        Changes in prepaid expenses                                        (10,638)        (11,604)
        Changes in accounts payable and accrued expenses                   362,621        (444,508)
                                                                      ------------    ------------
          Net cash provided by (used in) operating activities              845,674        (394,921)

Cash Flows from Investing Activities:
  Purchase of property and equipment                                      (286,661)       (517,016)
  Proceeds from sale of assets                                                --           993,234
                                                                      ------------    ------------
          Net cash provided by (used in) investing activities             (286,661)        476,218

Cash Flows from Financing Activities:
  Proceeds from notes and advances payable                                  70,050         355,603
  Payments on notes and advances payable                                  (611,300)       (211,060)
  Decrease in bank overdraft                                                  --          (143,928)
                                                                      ------------    ------------
          Net cash provided by (used in) financing activities             (541,250)            615
                                                                      ------------    ------------

Net Increase in Cash                                                        17,763          81,912
Cash, beginning of period                                                  340,334             925
                                                                      ------------    ------------

Cash, end of period                                                   $    358,097    $     82,837
                                                                      ============    ============

Noncash activities:
        Preferred dividend accrual                                    $    403,656    $    429,041
        Issuance of common stock for termination of long-term lease           --           100,000
        Long-term payable for termination of long-term lease                  --           519,061
Supplemental Information:
        Interest paid                                                 $    748,760    $    820,599
                                                                      ============    ============
</TABLE>

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

                                        4
<PAGE>

                            GREYSTONE LOGISTICS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

     1. In the opinion of Greystone Logistics, Inc., 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 February 29, 2008, and the results of its operations
and its cash flows for the nine and three month periods ended February 29, 2008
and February 28, 2007. These consolidated financial statements should be read in
conjunction with the consolidated financial statements as of and for the year
ended May 31, 2007 and the notes thereto included in Greystone's Form 10-KSB.
The financial statements have been prepared assuming that Greystone will
continue as a going concern. The working capital deficit of $13,272,039, a
stockholders' deficiency of $9,550,365 and Greystone's need to obtain additional
long term financing, as necessary, raises substantial doubt about Greystone's
ability to continue as a going concern. The accompanying financial statements
have been prepared assuming that Greystone will continue as a going concern and
do not reflect the possible effects of any adjustments that might result from
Greystone's inability to continue as a going concern.

     2. The results of operations for the nine and three month periods ended
February 29, 2008 and February 28, 2007 are not necessarily indicative of the
results to be expected for the full year.

     3. Greystone calculates and discloses earnings per share (EPS) in
accordance with Statement of Financial Accounting Standards No. 128, EARNINGS
PER SHARE (SFAS 128). SFAS 128 requires dual presentation of Basic and Diluted
EPS on the face of the statements of operations and requires a reconciliation of
the numerator and denominator of the Basic EPS computation to the numerator and
denominator of the Diluted EPS computation. Basic EPS excludes dilution and is
computed by dividing income (loss) available to common stockholders by the
weighted-average number of common shares outstanding for the period. Diluted EPS
reflects the potential dilution that could occur if securities or other
contracts to issue common stock were exercised or converted into common stock or
resulted in the issuance of common stock that then shared in the earnings of
Greystone.

     In computing Diluted EPS, only potential common shares that are
dilutive--those that reduce earnings per share or increase loss per share--are
included. Exercise of options and warrants or conversion of convertible
securities is not assumed if the result would be antidilutive, such as when a
loss from continuing operations is reported. The "control number" for
determining whether including potential common shares in the Diluted EPS
computation would be antidilutive is income from continuing operations. As a
result, if there were a loss from continuing operations, Diluted EPS would be
computed in the same manner as Basic EPS is computed, even if an entity has net
income after adjusting for discontinued operations, an extraordinary item or the
cumulative effect of an accounting change. As shown in the following table, the
number of shares for calculating Basic and

                                        5
<PAGE>

Diluted EPS are the same manner due to the loss for the nine and three month
periods ended February 28, 2007, and there is a dilutive effect for calculating
EPS as a result of income for the nine and three month periods ended February
29, 2008.

                                                          Nine Months ended
                                                            February 29/28,
                                                      --------------------------
                                                          2008           2007
                                                      -----------    -----------
                                                      (Unaudited)    (Unaudited)

     BASIC:
     Weighted average common shares outstanding        26,061,000     24,283,000
                                                      -----------    -----------
     DILUTIVE EFFECT:
     Assumed exercise of warrants                         250,000           --
     Application of assumed proceeds toward
        repurchase of  treasury stock                    (150,000)          --
                                                      -----------    -----------
     Net additional shares issuable                       100,000           --
                                                      -----------    -----------
     ADJUSTED COMMON SHARES OUTSTANDING FOR
     COMPUTING DILUTIVE EPS                            26,161,000     24,283,000
                                                      ===========    ===========


                                                          Three Months ended
                                                            February 29/28,
                                                      --------------------------
                                                          2008           2007
                                                      -----------    -----------
                                                      (Unaudited)    (Unaudited)

     BASIC:
     Weighted average common shares outstanding        26,061,000     24,728,000
                                                      -----------    -----------
     DILUTIVE EFFECT:
     Assumed exercise of warrants                         250,000           --
     Application of assumed proceeds toward
        repurchase of  treasury stock                    (144,000)          --
                                                      -----------    -----------
     Net additional shares issuable                       106,000           --
                                                      -----------    -----------
     ADJUSTED COMMON SHARES OUTSTANDING FOR
     COMPUTING DILUTIVE EPS                            26,167,000     24,728,000
                                                      ===========    ===========


     4. Inventory consists of the following:

                                          February 29,   May 31,
                                              2008         2007
                                          ----------   ----------
                                          (Unaudited)

          Raw materials                   $  230,535   $   66,832
          Finished goods                     205,539      170,937
                                          ----------   ----------
          Total inventory                 $  436,074   $  237,769
                                          ==========   ==========

     5. Recent Accounting Pronouncements.

                                        6
<PAGE>

     In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48, ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES -- AN
INTERPRETATION OF FASB STATEMENT NO. 109 (FIN 48). This interpretation clarifies
the accounting for uncertainty in income taxes recognized in an enterprise's
financial statements in accordance with FASB Statement No. 109, ACCOUNTING FOR
INCOME TAXES. FIN 48 prescribes a recognition threshold and measurement
attribute for the financial statement recognition and measurement of a tax
position taken or expected to be taken in a tax return. It also provides
guidance on derecognition, classification, interest and penalties, accounting in
interim periods, disclosure, and transition. Greystone adopted the provisions of
this interpretation effective June 1, 2007. The adoption of FIN 48 did not have
a material effect on Greystone's financial statements and related disclosures.

     In September 2006, the FASB issued Statement of Financial Accounting
Standards ("SFAS") No. 157, FAIR VALUE MEASUREMENTS. SFAS 157 defines fair
value, establishes a framework for measuring fair value in generally accepted
accounting principles (GAAP), and expands disclosures about fair value
measurements. The issuance of this standard is meant to increase consistency and
comparability in fair value measurements. SFAS 157 is effective for fiscal years
beginning after November 15, 2007. Greystone does not expect the adoption of
SFAS 157 to have a material effect on its financial statements and related
disclosures.

     In February 2007, the FASB issued SFAS No. 159, THE FAIR VALUE OPTION FOR
FINANCIAL ASSETS AND FINANCIAL LIABILITIES. SFAS 159 permits entities to choose
to measure many financial instruments and certain other items at fair value, and
establishes presentation and disclosure requirements designed to facilitate
comparisons between entities that choose different measurement attributes for
similar types of assets and liabilities. SFAS 159 is effective for fiscal years
beginning after November 15, 2007. Greystone does not expect the adoption of
SFAS 159 to have a material effect on its financial statements and related
disclosures.

     In December 2007, the FASB issued SFAS No. 160, NONCONTROLLING INTERESTS IN
CONSOLIDATED FINANCIAL STATEMENTs. SFAS 160 was issued to establish accounting
and reporting standards for the noncontrolling interest in a subsidiary
(formerly called minority interests) and for the deconsolidation of a
subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an
ownership interest in the consolidated entity that should be reported as equity
in the consolidated financial statements. SFAS 160 is effective for fiscal years
beginning on or after December 15, 2008. Greystone does not expect the adoption
of SFAS 160 to have a material effect on its financial statements and related
disclosures.

     In December 2007, the FASB issued SFAS No. 141 (revised 2007), BUSINESS
COMBINATIONS. SFAS 141R was issued to improve the relevance, representational
faithfulness, and comparability of the information that a reporting entity
provides in its financial reports about a business combination and its effects.
SFAS 141R is effective for fiscal years beginning on or after December 15, 2008.
Greystone does not expect the adoption of SFAS 141R to have a material effect on
its financial statements and related disclosures.

     In March 2008, the Financial Accounting Standards Board issued SFAS No.
161, DISCLOSURES ABOUT DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES -- AN
AMENDMENT OF FASB

                                        7
<PAGE>

STATEMENT NO. 133 (SFAS 161). SFAS 161 requires enhanced disclosures about an
entity's derivative and hedging activities, including qualitative disclosures
about objectives and strategies for using derivatives, quantitative disclosures
about fair value amounts of and gains and losses on derivative instruments, and
disclosures about credit-risk-related contingent features in derivative
agreements. SFAS 161 is effective for fiscal years and interim periods beginning
after November 15, 2008. Greystone does not expect the adoption of SFAS 161 to
have a material effect on its financial statements and related disclosures.

     6. Accounts payable at May 31, 2007 have been reclassified between related
parties and others for comparative purposes with the presentation as of February
29, 2008.

     7. Contingencies

     A court action was filed by William Hamilton dba WHACO and dba Greystone
Bill Hamilton Trucking against GSM alleging damages in the amount of $104,390
for breach of contract involving provision of materials and services. William
Hamilton is an owner in Greystone Plastics, Inc. from whom GSM purchased certain
manufacturing assets in 2003. GSM has denied all allegations and has asserted a
counterclaim arising from the sale of manufacturing assets by Greystone
Plastics, Inc. to GSM. The action is in the early stages of discovery and is
being vigorously defended by GSM. However, GSM management cannot predict or
guarantee the outcome of the action.


ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

RESULTS OF OPERATIONS

GENERAL TO ALL PERIODS

     The unaudited consolidated financial statements include the accounts of
Greystone Logistics, Inc. (" Greystone") and its wholly owned subsidiaries,
Greystone Manufacturing, LLC (" GSM") and Plastic Pallet Production, Inc.
("PPP"). All material intercompany accounts and transactions have been
eliminated upon consolidation.

     Greystone has incurred significant losses from operations, and there is no
assurance that it will continue to achieve profitability or obtain funds
necessary to finance its operations.

     References to fiscal year 2008 refer to the nine and three month periods
ended February 29, 2008. References to fiscal year 2007 refer to the nine and
three month periods ended February 28, 2007.

SALES

     Greystone's primary business is the manufacturing and selling of plastic
pallets, made from recycled plastic, through its wholly owned subsidiaries, GSM
and PPP. Greystone sells its pallets through an exclusive distribution
arrangement with Decade Products whereby Decade sells

                                        8
<PAGE>

Greystone's pallets nationwide through direct sales and a network of independent
contractor distributors. Greystone also sells its pallets and pallet leasing
services to certain large customers direct through its President, Senior Vice
President of Sales and Marketing and other employees.

     Greystone currently derives approximately 86% of its revenue from two
national brewers.

     In addition, in July 2006, Greystone launched a beta test program involving
the lease of a small pool of recycled plastic pallets by Greystone to a customer
to be utilized by the customer to ship a portion of its manufactured products in
a closed loop system. Pursuant to the agreement with the customer, Greystone
delivers and tracks throughout the logistics cycle sufficient quantities of
plastic pallets for use in shipping a segment of the customer's product. The
pallets stay in a closed loop environment and are continually sent back for
reuse. If a pallet is damaged, Greystone grinds the pallet and reutilizes the
resin.

 PERSONNEL

     Greystone had approximately 75 full-time employees as of February 29, 2008
and February 28, 2007.

TAXES

     For all years presented, Greystone's effective tax rate is 0%. Greystone
has generated substantial net operating losses which would normally reflect a
tax benefit in the statement of operations and a deferred tax asset on the
balance sheet. However, because of the current uncertainty as to Greystone's
ability to achieve continued profitability, a valuation reserve has been
established that offsets the amount of any tax benefit available for each period
presented in the consolidated statements of operations.

     Greystone adopted the provisions of FIN 48 (see Note 5 to the financial
statements - Recent Accounting Pronouncements) on June 1, 2007. 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 pursuant to FIN 48. At June 1, 2007, Greystone had no
unrecognized tax benefits.

NINE MONTH PERIOD ENDED FEBRUARY 29, 2008 COMPARED TO NINE MONTH PERIOD ENDED
FEBRUARY 28, 2007

     Sales for fiscal year 2008 were $16,270,703 compared to $9,065,259 in
fiscal year 2007, for an increase of $7,205,444. The increase is primarily
attributable to new customers, production of the beverage pallets for existing
clients, upward price adjustments, and increases in pharmaceutical pallet sales.

                                        9
<PAGE>

     Cost of sales in fiscal year 2008 was $13,582,342, or 83% of sales,
compared to $8,840,652, or 98% of sales, in fiscal year 2007. The improvement in
the ratio of cost of sales to sales is principally due to a decrease in
equipment rental as a result of the termination of the PIPER 600 lease in
February 2007 and increases in sales prices.

     General, selling and administrative expenses decreased $184,301 from
$1,368,902 in fiscal year 2007 to $1,184,601 in fiscal year 2008. Greystone
recorded stock option compensation costs of $196,060 during fiscal year 2007 and
none in fiscal year 2008.

     Interest expense decreased $23,232 from $953,021 in fiscal year 2007 to
$929,789 in fiscal year 2008.

     Greystone reported net income of $684,547 in fiscal year 2008 compared to
net loss of $(2,569,639) in fiscal year 2007 for the reasons discussed above.

     After deducting preferred dividends, the net income available to common
shareholders was $280,891, or $0.01 per share, in fiscal year 2008 compared to a
net loss available to common shareholders of $(2,998,680), or $(0.12) per share,
in fiscal year 2007 for the reasons discussed above.

THREE MONTH PERIOD ENDED FEBRUARY 29, 2008 COMPARED TO THREE MONTH PERIOD ENDED
FEBRUARY 28, 2007

     Sales for fiscal year 2008 were $5,427,428 compared to $2,574,428 in fiscal
year 2007, for an increase of $2,853,000. The increase is primarily attributable
to new customers, production of the beverage pallets for existing clients,
upward price adjustments, and increases in pharmaceutical pallet sales.

     Cost of sales in fiscal year 2008 was $4,550,579, or 84% of sales, compared
to $2,463,916, or 96% of sales, in fiscal year 2007. The improvement in the
ratio of cost of sales to sales is principally due to a decrease in equipment
rental as a result of the termination of the PIPER 600 lease in February 2007
and increases in sales prices.

     General, selling and administrative expense decreased $61,914 from $466,157
in fiscal year 2007 to $404,243 in fiscal year 2008. Greystone recorded stock
option compensation costs of $71,020 during fiscal year 2007 and none in fiscal
year 2008.

     Interest expense decreased $45,486 from $348,140 in fiscal year 2007 to
$302,654 in fiscal year 2008.

     Greystone reported net income of $212,377 in fiscal year 2008 compared to
net loss of $(1,178,321) in fiscal year 2007 for the reasons discussed above.

                                       10
<PAGE>

     After deducting preferred dividends, the net income available to common
shareholders was $91,761, or $0.00 per share, in fiscal year 2008 compared to a
net loss available to common shareholders of $(1,320,102), or $(0.05) per share,
in fiscal year 2007 for the reasons discussed above.

LIQUIDITY AND CAPITAL RESOURCES

     Greystone's cash requirements for operating activities consist principally
of accounts receivable, inventory, accounts payable, operating leases and
scheduled payments of interest on outstanding indebtedness. Greystone is
currently dependent on outside sources of cash to fund its operations. As of
February 29, 2008, revenues from sales remain insufficient to meet current
liabilities.

     A summary of cash flows for the nine months ended February 29, 2008 is as
follows:

          Cash provided by operating activities                $   845,674

          Cash used in investing activities                       (286,661)

          Cash used in financing activities                       (541,250)


     The contractual obligations of Greystone are as follows:

                                 LESS THAN                              OVER
                       TOTAL       1 YEAR    2-3 YEARS   4-5 YEARS    5 YEARS
                    -----------  ----------  ----------  ----------  ----------
Long-term debt      $12,411,695  $9,351,085  $1,782,842  $  333,336  $  944,432
Operating leases      1,755,000     280,800     561,600     561,600     351,000
                    -----------  ----------  ----------  ----------  ----------
Total               $14,166,695  $9,631,885  $2,344,442  $  894,936  $1,295,432
                    ===========  ==========  ==========  ==========  ==========

     To provide for the additional cash that will be necessary to meet
Greystone's contractual obligations, Greystone continues to explore various
options, as necessary, including the possibility of refinancing long-term debt
and/or seeking additional equity financing. However, there is no guarantee that
Greystone will be able to raise sufficient capital to meet these obligations.

     Greystone has accumulated a working capital deficit of $13,272,039 at
February 29, 2008, which includes current portion of long-term debt of
$9,351,085 and $4,225,240 in accounts payable and accrued liabilities. The
working capital deficit reflects the uncertain financial condition of Greystone
resulting from its inability to obtain long-term financing until such time as it
is able to maintain sufficient cash flows from operations to meet its
contractual obligations. There is no assurance that Greystone will secure such
financing or continue to achieve profitability.

     Substantially all of the financing that Greystone has received through
February 29, 2008, has been provided by loans or through loan guarantees from
the officers and directors of Greystone, the

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<PAGE>

offerings of preferred stock to current and former officers and directors of
Greystone in 2001 and 2003 and through a private placement of common stock
completed in March 2005.

     Greystone continues to be dependent upon its officers and directors to
provide and/or secure additional financing and there is no assurance that they
will do so. 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
for a total of $5,000,000 with 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 preferred stock or its common stock
unless and until the financial position of Greystone improves through increased
revenues, another financing or otherwise.

FORWARD LOOKING STATEMENTS AND MATERIAL RISKS

     This Quarterly Report on Form 10-QSB includes certain statements that may
be deemed "forward-looking statements" within the meaning of federal securities
laws. 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 number of assumptions, risks and uncertainties. The
forward-looking statements contained in this Quarterly Report on Form 10-QSB
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 material portion of 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
Form 10-KSB for the fiscal year ended May 31, 2007, which was filed on August
30, 2007. 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-QSB.

ITEM 3. CONTROLS AND PROCEDURES

     As of the end of the period covered by this Current Report on Form 10-QSB,
Greystone carried out an evaluation under the supervision of Greystone's Chief
Executive Officer and Chief Financial Officer of the effectiveness of the design
and operation of Greystone's disclosure controls and procedures pursuant to the
Securities Exchange Act Rules 13a-15(e) and 15d-15(e). Based on this evaluation,
Greystone's Chief Executive Officer and Chief Financial Officer concluded that
the disclosure controls and procedures as of the end of the period covered by
this Current Report on Form 10-QSB were effective.

     During the quarter ended February 29, 2008, there was no change in
Greystone's internal controls over financial reporting that has materially

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<PAGE>

affected, or that is reasonably likely to materially affect, Greystone's
internal control over financial reporting.


PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     Excelsior Capital Marketing and Howell Mergers and Acquisitions, LLC v.
1607 Commerce Limited Partnership, Plastic Pallet Production, Inc. and Palweb
Corporation, Dallas County, Texas. The suit against Greystone, formerly PalWeb
Corporation, and its wholly-owned subsidiary, Plastic Pallet Production, Inc.,
was dismissed in February 2007 under summary judgment.

ITEM 6. EXHIBITS

     11.1 Computation of Income (Loss) per Share is in Note 3 in the Notes to
          the financial statements.

     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.

     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.

     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.

     32.1 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.

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<PAGE>

                                    SIGNATURE

     In accordance with the requirements 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: April 14, 2008                  /s/ Warren Kruger
                                      -----------------------------
                                      President and Chief Executive Officer






















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