GREYSTONE LOGISTICS, INC.

Note 10. INCOME TAXES

Deferred taxes as of May 31, 2026 and 2025 are as follows:

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 not the net deferred tax asset will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which net operating losses and the reversal of timing differences may offset taxable income. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Future realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character in carryforward periods under the tax law. Based on this evaluation, management has determined that Greystone will not be able to realize the full effect of the deferred tax assets and a valuation allowance of $1,757,711 and $0 has been recorded as of May 31, 2026 and 2025, respectively. All remaining net operation losses do not expire but are subjection to a utilization limitation.

The net change in deferred taxes for the years ended May 31, 2026 and 2025, is as follows:

The provision for income taxes as of May 31, 2026 and 2025 consists of the following:

Note 10. INCOME TAXES (cont.)

Greystone’s provision for income taxes for the years ended May 31, 2026 and 2025 differs from the federal statutory rate as follows: