Cautionary Statement Regarding Forward-Looking Information

Greystone has attained operating profits and positive cash flows from operating activities but there is no assurance that it will be able to sustain profitability.

Greystone has granted security interests in substantially all of its assets in connection with certain debt financings and other transactions.

Greystone's business could be affected by changes in availability of raw materials.

Greystone's business could be affected by competition and rapid technological change.

Greystone is dependent on a few large customers.

Greystone's business could be affected by the Coronavirus, COVID-19.

Greystone may not be able to effectively protect Greystone's patents and proprietary rights.

Greystone's business could be affected by changing or new legislation regarding environmental matters.

Greystone's business could be subject to potential product liability claims.

Greystone currently depends on certain key personnel.

Greystone's executive officers and directors control a large percentage of Greystone's outstanding common stock and all of Greystone's 2003 preferred stock, which entitles them to certain voting rights, including the right to elect a majority of Greystone's Board of Directors.

Greystone's stock trades in a limited public market and is subject to price volatility. There can be no assurance that an active trading market will develop or be sustained.

Greystone does not expect to declare or pay any dividends on its common stock in the foreseeable future.

Greystone's common stock may be subject to secondary trading restrictions related to penny stocks.

Greystone may issue additional equity securities, which would lead to further dilution of Greystone's issued and outstanding stock.

The consolidated financial statements include Greystone and its two wholly owned subsidiaries, Greystone Manufacturing, L.L.C. ("GSM"), and Plastic Pallet Production, Inc. ("PPP"), and one variable interest entity, Greystone Real Estate, L.L.C. ("GRE").

Greystone's primary business is the manufacturing of plastic pallets utilizing recycled plastic and selling the pallets through one of its wholly owned subsidiaries, GSM.

Year Ended May 31, 2022 Compared to Year Ended May 31, 2021

Selling, General and Administrative Expenses

Interest expense was $841,701 in fiscal year 2022 compared to $1,177,799 in fiscal year 2021 for a decrease of $336,098. This decrease is primarily attributable to a net decrease in long-term debt and financing leases during fiscal year 2022 by approximately $4.8 million offset by an increase in Greystone's revolver loan by $3,700,000.

Net income was $4,546,600 in fiscal year 2022 compared to $3,625,526 in fiscal year 2021 for an increase of $921,074 for the reasons discussed above.

Net Income Attributable to Common Stockholders

A summary of Greystone's cash flows for the year ended May 31, 2022, was as follows:

Cash provided by operating activities $ 6,637,361 Cash used in investing activities $ (6,080,521 ) Cash used in financing activities $ (1,801,116 )

Contractual obligations of Greystone as of May 31, 2022, were as follows:

Transactions with Warren Kruger and Related Entities

Rental fees. GSM pays weekly rental fees of $27,500 to Yorktown for grinding equipment and pelletizing equipment. Total rental fees of approximately $1,430,000 were paid in both fiscal years 2022 and 2021.

Yorktown provides administrative office space for Greystone in Tulsa, Oklahoma under a one-year lease agreement at a rental rate of $5,200 per month.

Loans from International Bank of Commerce ("IBC")

Transactions with Robert B. Rosene, Jr.

Loan. 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 a note payable at 7.5% interest.

Greystone does not have any off-balance sheet arrangements.

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