eps3283.htm
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
10-Q
(Mark
One)
☒
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
For
the quarterly period ended December 31,
2008
|
or
|
☐
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
For
the transition period from _______________ to
_______________
|
Commission
File Number: 1-13776
GreenMan
Technologies, Inc.
(Exact
name of registrant as specified in its charter)
Delaware
|
|
71-0724248
|
(State
or other jurisdiction of
incorporation
or organization)
|
|
(I.R.S.
Employer Identification No.)
|
|
|
|
205
South Garfield, Carlisle, Iowa
|
|
50047
|
(Address
of principal executive offices)
|
|
(Zip
Code)
|
(Registrant’s
telephone number, including area code)
12498
Wyoming Ave South, Savage, MN 55378
(Former
name, former address and former fiscal year, if changed since last
report)
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
☒ No
☐
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,”
“accelerated filer” and smaller reporting company” in Rule 12b-2 of the Exchange
Act. (Check one):
|
☐ Large
Accelerated Filer
|
☐ Accelerated
Filer
|
|
☐ Non-accelerated
Filer
|
☒ Smaller
reporting company
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes ☐ No
☒
As
of February 17, 2009, there were 30,880,435 shares of the registrant’s Common
Stock were outstanding.
GreenMan
Technologies, Inc.
TABLE
OF CONTENTS
|
|
Page
|
PART
I.
|
FINANCIAL
INFORMATION
|
|
|
|
|
Item
1.
|
Consolidated
Financial Statements (unaudited)
|
|
|
Consolidated
Balance Sheets at December 31, 2008 (unaudited) and September 30,
2008
|
3
|
|
Consolidated
Statements of Operations for the three months ended December 31, 2008 and
2007 (unaudited)
|
4
|
|
Consolidated
Statement of Changes in Stockholders’ Equity (deficit) for the three
months ended December 31, 2008 (unaudited)
|
5
|
|
Consolidated
Statements of Cash Flows for the three months ended December 31, 2008 and
2007 (unaudited)
|
6
|
|
Notes
to Condensed Consolidated Financial Statements
|
7-12
|
|
|
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
13-14
|
|
|
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
15
|
|
|
|
Item
4.
|
Controls
and Procedures
|
15
|
|
|
|
PART
II.
|
OTHER
INFORMATION
|
|
|
|
|
Item
1.
|
Legal
Proceedings
|
15
|
|
|
|
Item
1A.
|
Risk
Factors
|
16
|
|
|
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
16
|
|
|
|
Item
3.
|
Defaults
Upon Senior Securities
|
16
|
|
|
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
16
|
|
|
|
Item
5.
|
Other
Information
|
16
|
|
|
|
Item
6.
|
Exhibits
|
16
|
|
|
|
|
Signatures
|
17
|
GreenMan
Technologies, Inc.
Consolidated
Balance Sheets
(Unaudited)
|
|
December
31,
2008
|
|
|
September
30,
2008
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$ |
10,113,897 |
|
|
$ |
210,080 |
|
Accounts
receivable, trade, less allowance for doubtful accounts of $96,338 and
$96,338 as of December 31, 2008 and September 30,
2008
|
|
|
353,285 |
|
|
|
1,135,015 |
|
Inventory
|
|
|
1,183,456 |
|
|
|
1,323,748 |
|
Other
current assets
|
|
|
1,166,780 |
|
|
|
291,371 |
|
Assets
related to discontinued operations
|
|
|
-- |
|
|
|
10,145,282 |
|
Total
current assets
|
|
|
12,817,418 |
|
|
|
13,105,496 |
|
Property,
plant and equipment, net
|
|
|
538,258 |
|
|
|
551,683 |
|
Other
assets:
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
2,289,939 |
|
|
|
2,289,939 |
|
Long
term contracts, net
|
|
|
509,438 |
|
|
|
554,250 |
|
Patents,
net
|
|
|
108,017 |
|
|
|
113,433 |
|
Other
|
|
|
425,056 |
|
|
|
425,908 |
|
Assets
related to discontinued operations
|
|
|
-- |
|
|
|
6,566,780 |
|
Total
other assets
|
|
|
3,332,450 |
|
|
|
9,950,310 |
|
|
|
$ |
16,688,126 |
|
|
$ |
23,607,489 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Notes
payable, current
|
|
$ |
233,558 |
|
|
$ |
506,678 |
|
Accounts
payable
|
|
|
359,823 |
|
|
|
782,494 |
|
Accrued
expenses, other
|
|
|
1,307,871 |
|
|
|
1,176,408 |
|
Obligations
due under lease settlement, current
|
|
|
68,518 |
|
|
|
68,518 |
|
Notes
payable, related parties, current
|
|
|
-- |
|
|
|
534,320 |
|
Liabilities
related to discontinued operations
|
|
|
-- |
|
|
|
16,140,322 |
|
Total
current liabilities
|
|
|
1,969,770 |
|
|
|
19,208,740 |
|
Notes
payable, non-current
|
|
|
479,391 |
|
|
|
482,881 |
|
Obligations
due under lease settlement, non-current
|
|
|
580,540 |
|
|
|
580,540 |
|
Liabilities
related to discontinued operations
|
|
|
-- |
|
|
|
3,397,258 |
|
Total
liabilities
|
|
|
3,029,701 |
|
|
|
23,669,419 |
|
|
|
|
|
|
|
|
|
|
Stockholders'
deficit:
|
|
|
|
|
|
|
|
|
Preferred
stock, $1.00 par value, 1,000,000 shares authorized, none
outstanding
|
|
|
-- |
|
|
|
-- |
|
Common
stock, $.01 par value, 60,000,000 shares authorized, 30,880,435 shares
issued and outstanding at December 31, 2008 and September 30,
2008
|
|
|
308,804 |
|
|
|
308,804 |
|
Additional
paid-in capital
|
|
|
38,914,403 |
|
|
|
38,881,669 |
|
Accumulated
deficit
|
|
|
(25,564,782 |
) |
|
|
(39,252,403 |
) |
Total
stockholders’ equity (deficit)
|
|
|
13,658,425 |
|
|
|
(61,930 |
) |
|
|
$ |
16,688,126 |
|
|
$ |
23,607,489 |
|
See
accompanying condensed notes to unaudited consolidated financial
statements.
GreenMan
Technologies, Inc.
Consolidated
Statements of Operations
(Unaudited)
|
|
Three
Months Ended
December
31,
|
|
|
|
2008
|
|
|
2007
|
|
Net
sales
|
|
$ |
662,005 |
|
|
$ |
599,614 |
|
Cost
of sales
|
|
|
493,160 |
|
|
|
487,440 |
|
Gross
profit
|
|
|
168,845 |
|
|
|
112,174 |
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling,
general and administrative
|
|
|
1,177,400 |
|
|
|
737,911 |
|
Operating
loss from continuing operations
|
|
|
(1,008,555 |
) |
|
|
(625,737 |
) |
Other
(expense):
|
|
|
|
|
|
|
|
|
Interest
and financing costs
|
|
|
(59,055 |
) |
|
|
(45,431 |
) |
Other,
net
|
|
|
(9,462 |
) |
|
|
(19,216 |
) |
Other
(expense), net
|
|
|
(68,517 |
) |
|
|
(64,647 |
) |
Loss
from continuing operations before income taxes
|
|
|
(1,077,072 |
) |
|
|
(690,384 |
) |
Provision
for income taxes
|
|
|
456 |
|
|
|
- |
|
Loss
from continuing operations
|
|
|
(1,077,528 |
) |
|
|
(690,384 |
) |
Discontinued
operations:
|
|
|
|
|
|
|
|
|
Gain
on sale of discontinued operations, net of taxes
|
|
|
14,347,445 |
|
|
|
-- |
|
Income
from discontinued operations, net of taxes
|
|
|
417,704 |
|
|
|
708,288 |
|
|
|
|
14,765,149 |
|
|
|
708,288 |
|
Net
income
|
|
$ |
13,687,621 |
|
|
$ |
17,904 |
|
|
|
|
|
|
|
|
|
|
(Loss)
from continuing operations per share – basic
|
|
$ |
(0.03 |
) |
|
$ |
(0.02 |
) |
Income
from discontinued operations per share – basic
|
|
|
0.47 |
|
|
|
0.02 |
|
Net
income per share – basic
|
|
$ |
0.44 |
|
|
$ |
0.00 |
|
Net
income per share – diluted
|
|
$ |
0.39 |
|
|
$ |
0.00 |
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding -basic
|
|
|
30,880,435 |
|
|
|
30,880,435 |
|
Weighted
average shares outstanding -diluted
|
|
|
35,519,812 |
|
|
|
35,787,810 |
|
See
accompanying condensed notes to unaudited consolidated financial
statements.
GreenMan
Technologies, Inc.
Consolidated
Statement of Changes in Stockholders’ (Deficit) Equity
Three
Months Ended December 31, 2008
(Unaudited)
|
|
Common
Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Amounts
|
|
|
Additional
Paid
In
Capital
|
|
|
Accumulated
Deficit
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
September 30, 2008
|
|
|
30,880,435 |
|
|
$ |
308,804 |
|
|
$ |
38,881,669 |
|
|
$ |
(39,252,403 |
) |
|
$ |
(61,930 |
) |
Compensation
expense associated with stock options
|
|
|
-- |
|
|
|
-- |
|
|
|
29,166 |
|
|
|
-- |
|
|
|
29,166 |
|
Value
of warrants issued for services rendered
|
|
|
-- |
|
|
|
-- |
|
|
|
3,568 |
|
|
|
-- |
|
|
|
3,568 |
|
Net
income for quarter ended December 31, 2008
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
13,687,621 |
|
|
|
13,687,621 |
|
Balance,
December 31, 2008
|
|
|
30,880,435 |
|
|
$ |
308,804 |
|
|
$ |
38,914,403 |
|
|
$ |
(25,564,782 |
) |
|
$ |
13,658,425 |
|
See
accompanying condensed notes to unaudited consolidated financial
statements.
GreenMan
Technologies, Inc.
Consolidated
Statements of Cash Flow
(Unaudited)
|
|
Three
Months Ended December 31,
|
|
|
|
2008
|
|
|
2007
|
|
Cash
flows from operating activities:
|
|
|
|
|
|
|
Net
income
|
|
$ |
13,687,621 |
|
|
$ |
17,904 |
|
Adjustments
to reconcile net loss to net cash (used) provided by operating
activities:
|
|
|
|
|
|
|
|
|
Gain
on sale of tire recycling operations
|
|
|
(19,847,445 |
) |
|
|
-- |
|
Net
settlement income from discontinued operations
|
|
|
(144,420 |
) |
|
|
-- |
|
Deferred
income tax application
|
|
|
5,300,000 |
|
|
|
-- |
|
Gain
on lease termination
|
|
|
(124,628 |
) |
|
|
-- |
|
(Gain)
loss on disposal of property, plant and equipment
|
|
|
-- |
|
|
|
(11,148 |
) |
Depreciation
|
|
|
201,778 |
|
|
|
346,866 |
|
Amortization
of deferred interest expense
|
|
|
359,927 |
|
|
|
129,926 |
|
Amortization
of customer relationships
|
|
|
890 |
|
|
|
1,738 |
|
Amortization
of stock option compensation expense
|
|
|
29,166 |
|
|
|
28,182 |
|
Amortization
of patents
|
|
|
5,416 |
|
|
|
5,417 |
|
Amortization
of long term contracts
|
|
|
44,812 |
|
|
|
44,812 |
|
Amortization
of deferred gain on sale leaseback transaction
|
|
|
(270,228 |
) |
|
|
(9,146 |
) |
Net
value of warrants issued
|
|
|
3,568 |
|
|
|
5,440 |
|
Decrease
(increase) in assets:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
607,878 |
|
|
|
742,479 |
|
Product
inventory
|
|
|
76,018 |
|
|
|
(345,820 |
) |
Other
current assets
|
|
|
(802,785 |
) |
|
|
(212,090 |
) |
Other
assets
|
|
|
91,551 |
|
|
|
(24,756 |
) |
Increase
(decrease) in liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
(358,000 |
) |
|
|
(128,997 |
) |
Accrued
expenses and other
|
|
|
(255,856 |
) |
|
|
(170,416 |
) |
Net
cash (used) provided by operating activities
|
|
|
(1,394,737 |
) |
|
|
420,391 |
|
Cash
flows from investing activities:
|
|
|
|
|
|
|
|
|
Purchase
of property and equipment
|
|
|
(58,194 |
) |
|
|
(641,972 |
) |
Cash
acquired upon purchase of business, net of transaction
costs
|
|
|
-- |
|
|
|
68,571 |
|
Proceeds
from the sale of tire recycling operations
|
|
|
27,546,652 |
|
|
|
-- |
|
Net
cash provided (used) by investing activities
|
|
|
27,488,458 |
|
|
|
(573,401 |
) |
Cash
flows from financing activities:
|
|
|
|
|
|
|
|
|
Net
activity under line of credit
|
|
|
(3,300,221 |
) |
|
|
1,002,943 |
|
Proceeds
from notes payable
|
|
|
-- |
|
|
|
268,473 |
|
Repayment
of notes payable
|
|
|
(11,743,074 |
) |
|
|
(1,023,300 |
) |
Repayment
of notes payable, related party
|
|
|
(534,320 |
) |
|
|
-- |
|
Principal
payments on obligations under capital leases
|
|
|
(1,188,625 |
) |
|
|
(50,063 |
) |
Net
cash used by financing activities
|
|
|
(16,766,240 |
) |
|
|
198,053 |
|
Net
increase (decrease) in cash and cash equivalents
|
|
|
9,327,481 |
|
|
|
45,043 |
|
Cash
and cash equivalents at beginning of period
|
|
|
786,416 |
|
|
|
376,764 |
|
Cash
and cash equivalents at end of period
|
|
$ |
10,113,897 |
|
|
$ |
421,807 |
|
|
|
|
|
|
|
|
|
|
Supplemental
cash flow information:
|
|
|
|
|
|
|
|
|
Machinery
and equipment acquired under capital leases
|
|
$ |
-- |
|
|
$ |
244,076 |
|
Shares
issued in acquisition
|
|
|
-- |
|
|
|
2,800,000 |
|
Interest
paid
|
|
|
466,269 |
|
|
|
319,271 |
|
Taxes
paid
|
|
|
26,000 |
|
|
|
80,000 |
|
See
accompanying condensed notes to unaudited consolidated financial statements.
GreenMan
Technologies, Inc.
Condensed
Notes to Interim Consolidated Financial Statements
Quarter
Ended December 31, 2008 and 2007
(Unaudited)
GreenMan
Technologies, Inc. (together with its subsidiaries “we”, “us” or “our”) was
originally founded in 1992 and has operated as a Delaware corporation since
1995. Prior to November 17, 2008, GreenMan was comprised of two business
segments, the tire recycling operations and the molded recycled rubber products
operations. As described below, our business changed substantially in November
2008, when we sold substantially all of the assets of our tire recycling
operations.
The
tire recycling operations were located in Savage, Minnesota and Des Moines, Iowa
and collected, processed and marketed scrap tires in whole, shredded or granular
form. We were paid a fee to collect, transport and process scrap tires (i.e., collection/processing
revenue) in whole or into two inch or smaller rubber chips which were then sold
(i.e., product
revenue).
On
October 1, 2007, we acquired Welch Products, Inc. (“Welch”), a company
headquartered in Carlisle, Iowa, which specializes in designing, developing, and
manufacturing of environmentally responsible products using recycled materials,
primarily recycled rubber (See Note 4). Welch’s patented products and processes
include playground safety tiles, roadside anti-vegetation products, construction
molds and highway guard-rail rubber spacer blocks. Through its prior acquisition
of Playtribe, Inc., Welch also provides innovative playground design, equipment
and installation.
Recent
Developments
On
September 12, 2008 we executed an asset purchase agreement with Liberty Tire
Services of Ohio, LLC, a wholly-owned subsidiary of Liberty Tire Services, LLC,
the largest tire recycling company in the United States for sale of our tire
recycling business, subject to shareholder approval. On November 13, 2008 our
shareholders approved the sale and on November 17, 2008 we completed the
divestiture of substantially all of the assets of our GreenMan Technologies of
Minnesota, Inc. and GreenMan Technologies of Iowa, Inc. subsidiaries, which had
operated our tire recycling business, for approximately $27.7 million in
cash. (See Note 5)
The
consolidated financial statements include the accounts of GreenMan Technologies,
Inc. and our wholly-owned subsidiaries. All significant intercompany
accounts and transactions have been eliminated in consolidation.
In
September 2005, due to the magnitude of continued operating losses, our Board of
Directors approved plans to divest the operations of our GreenMan Technologies
of Georgia, Inc. subsidiary and dispose of its assets. Accordingly, we
classified all remaining liabilities associated with our Georgia entity and its
results of operations as discontinued operations for all periods presented in
the accompanying consolidated financial statements. In June 2008, GreenMan
Technologies of Georgia, Inc. filed for liquidation under Chapter 7 of the
federal bankruptcy laws in the Bankruptcy Court of the Middle District of
Georgia and a trustee was appointed (See Note 5). As a result of the bankruptcy
proceedings we relinquished control of our Georgia subsidiary to the Bankruptcy
Court and therefore we de-consolidated substantially all remaining
obligations from our financial statements as of September 30, 2008.
Because
we operated our tire recycling assets during only a portion of the fiscal
quarter covered by this Report on Form 10Q we have included in this Quarterly
Report relevant information on this business segment but have classified their
respective assets, liabilities and results of operations as
discontinued operations for all periods presented in the accompanying
consolidated financial statements.
The
accompanying interim financial statements are unaudited and should be read in
conjunction with the financial statements and notes thereto for the year ended
September 30, 2008 included in our Annual Report on Form 10-KSB. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted pursuant to the
Securities and Exchange Commission rules and regulations, although we believe
the disclosures which have been made herein are adequate to ensure that the
information presented is not misleading. The results of operations
for the interim periods reported are not necessarily indicative of those that
may be reported for a full year. In our opinion, all adjustments
which are necessary for a fair statement of operating results for the interim
periods presented have been made.
GreenMan
Technologies, Inc.
Condensed
Notes to Interim Consolidated Financial Statements
Quarter
Ended December 31, 2008 and 2007
(Unaudited)
Net
Income Per Share
Basic
earnings per share represents income available to common stockholders divided by
the weighted average number of common shares outstanding during the
period. Diluted earnings per share reflects additional common shares
that would have been outstanding if potentially dilutive common shares had been
issued, as well as any adjustment to income that would result from the assumed
conversion. Potential common shares that may be issued by us relate
to outstanding stock options and warrants (determined using the treasury stock
method). Diluted net income per share for the three months ended
December 31, 2008 and 2007 are as follows:
|
|
2008
|
|
|
2007
|
|
Weighted
average shares outstanding
|
|
|
30,880,435 |
|
|
|
30,880,435 |
|
Exercisable
options and warrants
|
|
|
4,639,377 |
|
|
|
4,907,375 |
|
Weighted
average shares, fully diluted
|
|
|
35,519,812 |
|
|
|
35,787,810 |
|
Net
(loss) per share – fully diluted from continuing
operations
|
|
$ |
(0.03 |
) |
|
$ |
(0.02 |
) |
Net
income per share – fully diluted from discontinued
operations
|
|
$ |
0.42 |
|
|
$ |
0.02 |
|
Net
income per share – fully diluted
|
|
$ |
0.39 |
|
|
$ |
0.00 |
|
The calculation of additional
exercisable options and warrants above excludes 5,130,487 and 5,638,383 options
and warrants that are outstanding at December 31, 2008 and 2007 respectively,
but are deemed to be anti-dilutive as their exercise price exceeds the average
closing price used in the calculation of fully diluted shares.
4.
|
Acquisition
of Subsidiary
|
On
October 1, 2007, we acquired Welch Products, Inc., a company headquartered in
Carlisle, Iowa, which specializes in designing, developing and manufacturing of
environmentally responsible products using recycled materials, primarily
recycled rubber. Welch’s patented products and processes include playground
safety tiles, roadside anti-vegetation products, construction molds and highway
guard-rail rubber spacer blocks. Through its prior acquisition of Playtribe,
Inc., Welch also provides innovative playground design, equipment and
installation. Welch had been one of our crumb rubber customers for
the past several years. The transaction was structured as a share exchange in
which 100 percent of Welch’s common stock was exchanged for 8 million shares of
our common stock, valued at $2,800,000 based on the value of the 8 million
shares issued in this transaction on the date of issuance.
The
acquisition has been accounted for as a purchase in accordance with SFAS No.
141, “Business Combinations”, and accordingly the results of Welch’s operations
since the date of acquisition are included in our consolidated financial
statements. The total purchase price of $2,890,000 including
approximately $90,000 of transaction costs has been allocated as
follows:
Total
identifiable assets
acquired $
2,571,000
Total
identifiable liabilities
acquired $
2,821,000
The
total consideration paid exceeded the fair value of the net assets acquired by
$3,140,000 resulting in the recognition of $2,289,000 of goodwill and $645,000
assigned to long term contracts (in addition to $90,000 assigned to an existing
contract and being amortized over a 5-year term) based on an analysis of the
discounted future net cash flows of the contracts. In addition, we
increased the value of land and buildings by $195,000 based on a recent
appraisal and increased the value assigned to patents by $11,000 based on an
analysis of discounted future cash flows associated with the
patents. The value assigned to the long-term contracts is being
amortized on a straight line basis over an estimated useful life ranging from 48
to 60 months and the value assigned to patents is being amortized on a straight
line basis over an estimated useful life of 60 months.
Included
in other current and long term assets are lease receivables which bear interest
at rates ranging from 1.99% to 5.5% per annum.
GreenMan
Technologies, Inc.
Condensed
Notes to Interim Consolidated Financial Statements
Quarter
Ended December 31, 2008 and 2007
(Unaudited)
4.
|
Acquisition
of Subsidiary – (Continued)
|
Amortization
expense during the next five years is anticipated to be:
Twelve
months ending December 31:
|
|
Contracts
|
|
|
Patents
|
|
|
Total
|
|
2009
|
|
$ |
179,250 |
|
|
$ |
21,667 |
|
|
$ |
200,917 |
|
2010
|
|
|
179,250 |
|
|
|
21,667 |
|
|
|
200,917 |
|
2011
|
|
|
138,938 |
|
|
|
21,667 |
|
|
|
160,605 |
|
2012
|
|
|
12,000 |
|
|
|
21,666 |
|
|
|
33,662 |
|
2013
and thereafter
|
|
|
-- |
|
|
|
16,249 |
|
|
|
16,249 |
|
|
|
$ |
509,438 |
|
|
$ |
102,916 |
|
|
$ |
612,354 |
|
The
balance of patents at December 31, 2008 includes $5,101 relating to new
patent pending activities. Management annually reviews long-lived assets,
goodwill and certain identifiable intangibles to evaluate whether events or
changes in circumstances indicate an impairment of carrying
value. Such reviews include an analysis of current results and take
into consideration the discounted value of projected operating cash flows
(earnings before interest, taxes, depreciation and amortization). An
impairment charge would be recognized when expected future operating cash flows
are lower than the carrying value of the assets.
5.
|
Discontinued
Operations
|
Georgia
Operations
Due
to the magnitude of the continuing operating losses incurred by our GreenMan
Technologies of Georgia, Inc. subsidiary ($3.4 million) during fiscal 2005, our
Board of Directors determined it to be in the best interest of our company to
discontinue all Georgia operations and completed the divestiture of its
operating assets during fiscal 2006. Accordingly, we have classified
all remaining liabilities associated with our Georgia entity and its results of
operations as discontinued operations.
On
June 27, 2008, GreenMan Technologies of Georgia, Inc. filed for liquidation
under Chapter 7 of the federal bankruptcy laws in the Bankruptcy Court of the
Middle District of Georgia and a trustee was appointed. On September
30, 2008 we received approval of the Trustee’s Final Report of No Distribution
in relation to the Chapter 7 filing and the case is considered
closed. The Trustee's Report of No Distribution certifies that the
trustee has performed the duties required of a trustee under 11 U.S.C. Section
704 and has concluded that there are no assets to administer. As a
result of the bankruptcy proceedings all pending litigation was stayed and
GreenMan Technologies of Georgia, Inc. was de-consolidated from our financial
statements as of September 30, 2008 resulting in the recognition of non-cash
income from discontinued operations of $2,360,930 (net of a deferred income tax
expense of $700,000 and change in the deferred tax valuation reserve of an equal
amount during the fiscal year ended September 30, 2008.)
The
major classes of liabilities associated with Georgia discontinued operations
were:
|
|
December 31,
2008
|
|
|
September 30,
2008
|
|
Liabilities
related to discontinued operations:
|
|
|
|
|
|
|
Accounts
payable
|
|
$ |
-- |
|
|
$ |
116,664 |
|
Accrued
expenses, other
|
|
|
-- |
|
|
|
163,147 |
|
Total
liabilities related to discontinued operations
|
|
$ |
-- |
|
|
$ |
279,811 |
|
During
the quarter ended December 31, 2008, we recognized net income from Georgia
discontinued operations of approximately $144,000 including approximately
$161,000 associated with the completion of a March 2008 settlement agreement
with a former Georgia vendor (See Note 8).
Tire
Recycling Operations
On
September 12, 2008 we executed an Asset Purchase Agreement with Liberty Tire
Services of Ohio, LLC, a wholly-owned subsidiary of Liberty Tire Services, LLC,
the largest tire recycling company in the United States, for sale of our tire
recycling business, subject to shareholder approval. On November 13, 2008 our
shareholders
GreenMan
Technologies, Inc.
Condensed
Notes to Interim Consolidated Financial Statements
Quarter
Ended December 31, 2008 and 2007
(Unaudited)
5.
|
Discontinued
Operations – (Continued)
|
approved
the sale and on November 17, 2008 we completed the divestiture of substantially
all of the assets of our GreenMan Technologies of Minnesota, Inc. and GreenMan
Technologies of Iowa, Inc. subsidiaries, which had operated our tire recycling
business, for approximately $27.7 million in cash. We recognized a
gain on sale of approximately $14.35 million, net of estimated taxes of
approximately $5.5 million which is included in gain on sale of discontinued
operations.
We
used approximately $16.5 million of the proceeds of this sale to retire certain
transaction related obligations and other debt including approximately $12.8
million due our former primary secured lender, Laurus Master Fund, Ltd., and
approximately $645,000 of related party debt (including approximately $111,000
of accrued interest). In addition, $750,000 of the proceeds were placed in an
escrow account for twelve months to cover possible indemnification claims by the
purchaser as well as the pending finalization of several other post-closing
reconcilations.
The
major classes of assets and liabilities associated with discontinued tire
recycling operations were:
|
|
December 31,
2008
|
|
|
September 30,
2008
|
|
Assets
related to discontinued operations:
|
|
|
|
|
|
|
Cash
|
|
$ |
-- |
|
|
$ |
576,336 |
|
Accounts
receivable, net
|
|
|
-- |
|
|
|
3,019,978 |
|
Other
current assets
|
|
|
-- |
|
|
|
1,248,968 |
|
Total
current assets related to discontinued operations
|
|
|
-- |
|
|
|
4,845,282 |
|
Property,
plant and equipment (net)
|
|
|
-- |
|
|
|
6,399,172 |
|
Other
|
|
|
-- |
|
|
|
167,608 |
|
Total
other assets related to discontinued operations
|
|
|
-- |
|
|
|
6,566,780 |
|
Total
assets related to discontinued operations
|
|
$ |
-- |
|
|
$ |
11,412,062 |
|
|
|
|
|
|
|
|
|
|
Liabilities
related to discontinued operations:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$ |
-- |
|
|
$ |
1,649,530 |
|
Notes
payable, current
|
|
|
-- |
|
|
|
9,566,387 |
|
Notes
payable, line of credit
|
|
|
-- |
|
|
|
3,300,221 |
|
Accrued
expenses, other
|
|
|
-- |
|
|
|
962,005 |
|
Capital
leases, current
|
|
|
-- |
|
|
|
382,368 |
|
Total
current liabilities related to discontinued operations
|
|
|
-- |
|
|
|
15,860,511 |
|
Notes
payable, non-current
|
|
|
-- |
|
|
|
1,540,150 |
|
Capital
leases, non-current
|
|
|
-- |
|
|
|
1,623,325 |
|
Deferred
gain on sale leaseback transaction, non-current
|
|
|
-- |
|
|
|
233,783 |
|
Total
non-current liabilities related to discontinued operations
|
|
|
-- |
|
|
|
3,397,258 |
|
Total
liabilities related to discontinued operations
|
|
$ |
-- |
|
|
$ |
19,257,769 |
|
In
conjunction with the sale of our Minnesota tire recycling operations, we
terminated a long term land and building lease agreement and realized a gain on
termination of the lease of $124,627 which is included in income from
discontinued operations for the three months ended December 31, 2008. In
addition, included in income from discontinued operations for the three months
ended December 31, 2008 is the remaining unamortized gain of $265,570 associated
with a 2004 sale lease back transaction associated with this property.
Previously, we had been amortizing a gain of $437,337 as income ratably over the
term of the lease.
Net
sales and income from discontinued operations for the three months ended
December 31 were as follows:
|
|
December 31,
2008
|
|
|
December 31,
2007
|
|
Net
sales from discontinued operations
|
|
$ |
2,977,803 |
|
|
$ |
5,288,484 |
|
Income
from discontinued operations
|
|
|
417,704 |
|
|
|
708,288 |
|
GreenMan
Technologies, Inc.
Condensed
Notes To Consolidated Financial Statements
Quarter
Ended December 31, 2008 and 2007
(Unaudited)
6.
|
Property,
Plant and Equipment
|
Property,
plant and equipment consists of the following:
|
|
December 31,
2008
|
|
|
September 30,
2008
|
|
|
Estimated
Useful Lives
|
|
Land
|
|
$ |
175,000 |
|
|
$ |
175,000 |
|
|
--
|
|
Buildings
and improvements
|
|
|
285,000 |
|
|
|
285,000 |
|
|
15
years
|
|
Machinery
and equipment
|
|
|
1,351,234 |
|
|
|
1,344,377 |
|
|
5
- 7 years
|
|
Furniture
and fixtures
|
|
|
65,842 |
|
|
|
65,842 |
|
|
3
- 7 years
|
|
Motor
vehicles
|
|
|
5,760 |
|
|
|
5,760 |
|
|
3
- 5 years
|
|
|
|
|
1,882,836 |
|
|
|
1,875,979 |
|
|
|
|
Less
accumulated depreciation
|
|
|
(1,344,578 |
) |
|
|
(1,324,296 |
) |
|
|
|
Property,
plant and equipment, net
|
|
$ |
538,258 |
|
|
$ |
551,683 |
|
|
|
|
7.
|
Notes
Payable/Credit Facilities
|
June
2006 Laurus Credit Facility
In
June 2006, we entered into a $16 million amended and restated credit facility
with Laurus Master Fund, Ltd. The credit facility consisted of a $5 million
non-convertible secured revolving note and an $11 million secured
non-convertible term note. All amounts due Laurus under the revolving note
($3,414,754) and term note ($9.4 million plus accrued interest of $35,511) were
paid off on November 17, 2008 in conjunction with the sale of our tire recycling
business (see Note 5), and this credit facility has been
terminated.
As
previously disclosed substantially all of GreenMan Technologies of Georgia,
Inc.’s assets were sold as of March 1, 2006. Several vendors of this subsidiary
commenced legal action, primarily in the state courts of Georgia, in attempts to
collect past due amounts, plus accruing interest, attorneys’ fees, and costs,
all relating to various services rendered to these subsidiaries. Although
GreenMan Technologies, Inc. itself was not a party to any of these vendor
relationships, two of the plaintiffs, representing approximately $900,000 of
these claims, have named GreenMan Technologies, Inc. as a defendant along with
GreenMan Technologies of Georgia, Inc.
On
June 27, 2008, GreenMan Technologies of Georgia, Inc. filed for liquidation
under Chapter 7 of the federal bankruptcy laws in the Bankruptcy Court of the
Middle District of Georgia and a trustee was appointed. As a result
of the bankruptcy proceedings all pending litigation was stayed and GreenMan
Technologies of Georgia, Inc. was de-consolidated from our financial statements
as of September 30, 2008.
During
fiscal 2008, one vendor secured a summary judgment for approximately $890,000
against GreenMan Technologies, Inc. While GreenMan Technologies, Inc. believed
it had valid defenses to these claims, as well as against any similar or related
claims that may be made against us in the future, we did not receive proper
notice of the summary judgment against us and therefore were unable to timely
appeal the judgment. Management therefore determined it to be in the best
interests of GreenMan Technologies, Inc. to reach settlement on this judgment
rather than to attempt to appeal the judgment for lack of proper notice. On
March 28, 2008, GreenMan Technologies, Inc. agreed to a cash settlement of
$450,000 with $100,000 paid upon signing the settlement agreement and nine
additional monthly payments of $38,889 commencing on April 30, 2008 and ending
on December 31, 2008. In January, 2009, after receipt of the final payment, the
plaintiff marked the judgment satisfied with the appropriate courts, at which
time we recorded a gain on settlement of approximately $161,000 relating to
amounts accrued for but forgiven per the agreement and which are included in
income from discontinued operations for the three months ended December
31,2008.
GreenMan
Technologies, Inc.
Condensed
Notes to Interim Consolidated Financial Statements
Quarter
Ended December 31, 2008 and 2007
(Unaudited)
Stock
Options
We
maintain stock-based compensation plans, which are described more fully in Note
11 to the consolidated financial statements in our 2008 Annual Report filed on
Form 10-KSB for the fiscal year ended September 30, 2008. Effective October 1,
2006, we adopted the provisions of Statement of Financial Accounting Standards
No. 123R, “Share-Based Payment” (SFAS 123R) for our share-based compensation
plans. We adopted SFAS 123R using the modified prospective transition method.
Under this transition method, compensation cost recognized includes (a) the
compensation cost for all share-based awards granted prior to, but not yet
vested, as of October 1, 2006, based on the grant-date fair value estimated in
accordance with the original provisions of SFAS 123 and (b) the compensation
cost for all share-based awards granted subsequent to September 30, 2006, based
on the grant-date fair value estimated in accordance with the provisions of SFAS
123R. In addition, we continued to use the “simplified method” as allowed under
Staff issued SAB 110, for determining expected terms on stock options for
calculating expense as our stock option exercise experience does not provide a
reasonable basis for an estimated expected option term. Amortization of stock
compensation expense was $29,166 and $28,182 for the three months ended December
31, 2008 and 2007 respectively. The unamortized compensation expense at December
31, 2008 was $461,246 and will be amortized over a weighted average remaining
amortizable life of approximately 3.7 years.
During
the three months ended December 31, 2008, we granted options to our directors
and management to purchase an aggregate of 600,000 shares of our common stock at
an exercise price of $.33 per share, which represented the closing price of our
stock on the date of each respective grant. The options were granted under the
2005 Stock Option Plan, have a ten-year term and vest equally over a five-year
period from date of grant. The fair value of the options at the date of grant in
aggregate was $136,000 which was determined on the date of grant using the
Black-Scholes option-pricing model with the following weighted average
assumptions; dividend yield of 0%; risk-free interest rates of approximately
2.3%; expected volatility based on historical trading information of 87% and
expected term of 5 years.
As
a result of the gain to be realized in fiscal 2009 from the sale of the tire
recycling operations (see Note 5) and anticipated overall Company results for
fiscal 2009, we have recorded a provision for state and federal income of $5.5
million during the three months ended December 31, 2008 using an effective
overall tax rate of 30% (which takes into account certain state net operating
loss limitations). This amount is included in the gain on disposal of
discontinued operations during the three months ended December 31,
2008.
Historically
we have provided a valuation reserve equal to 100% of our potential deferred tax
benefit due to the uncertainty of our ability to realize the anticipated benefit
given our historical losses. As a result of the estimated gain to be realized in
fiscal 2009 from the sale of the tire recycling operations and anticipated
overall results for fiscal 2009, we expect to be able to realize the benefit of
a portion of our federal net operating loss carry-forwards. Using an
effective overall tax rate of 30% (which takes into account certain state net
operating loss limitations) we have recognized a change in the valuation
allowance of $5.3 million during the fiscal year ended September 30, 2008 based
on the estimated gain associated with the November 2008 sale of our tire
recycling operations. This deferred asset was utilized during the quarter ended
December 31, 2008.
Item
2. Management’s Discussion and Analysis of Financial Condition and
Results of Operations
In
September 2005, due to the magnitude of continued operating losses, our Board of
Directors approved plans to divest the operations of our GreenMan Technologies
of Georgia, Inc. subsidiary and dispose of its respective assets. Accordingly,
we have classified all remaining liabilities associated with our Georgia entity
and its results of operations as discontinued operations for all periods
presented in the accompanying consolidated financial statements. On June 27, 2008, our
Georgia subsidiary filed for liquidation under Chapter 7 of the federal
bankruptcy laws in the Bankruptcy Court of the Middle District of Georgia. As a
result of the bankruptcy proceedings we have relinquished control of our Georgia
subsidiary to the Bankruptcy Court and therefore have de-consolidated
substantially all remaining obligations from our financial statements as of
September 30, 2008.
As
described in Item 1, above, our business changed substantially in November 2008,
when we sold substantially all of the assets of our tire recycling operations.
Because we operated our tire recycling assets during only a portion of the
fiscal quarter covered by this Report on Form 10Q we have included in this
Quarterly Report relevant information on this business segment but have
classified their respective assets, liabilities and results of
operations as discontinued operations for all periods presented in the
accompanying consolidated financial statements.
The
following information should be read in conjunction with the unaudited
consolidated financial statements and the notes thereto included in Item 1 of
this Quarterly Report, and the audited consolidated financial statements and
notes thereto and Management’s Discussion and Analysis of Financial Condition
and Results of Operations contained in our Form 10-KSB filed for the fiscal year
ended September 30, 2008.
Results
of Operations
Three
Months ended December 31, 2008 Compared to the Three Months ended December 31,
2007
Net
sales from continuing operations for the three months ended December 31, 2008
increased $62,391 or 10% to $662,005 as compared to net sales of $599,614 for
the quarter ended December 31, 2007. The
increase is primarily attributable to increased playground tile and equipment
sales of our Welch subsidiary.
Gross
profit for the three months ended December 31, 2008 was
$168,845 or 26% of net sales, compared to $112,174 or 19% of net
sales for the three months ended December 31, 2007. The increase was
primarily attributable to higher revenues and reduced overhead costs and
headcount.
Selling,
general and administrative expenses for the three months ended December 31, 2008
increased $439,489 to $1,177,400 as compared to $737,911 for the three months
ended December 31, 2007. The increase was primarily attributable to an increase
of $247,000 in professional expenses relating to business development
initiatives and the November 2008 sale of our tire recycling operations, an
increase of approximately $164,000 in wage and performance based
incentives.
Interest
and financing expense for the three months ended December 31, 2008 increased
$13,624 to $59,055, compared to $45,431 during the three months ended December
31,2007 due to increased borrowings.
As a result of the foregoing, our loss
from continuing operations after income taxes increased $387,144 to $1,077,528
for the three months ended December 31, 2008 as compared to $690,384 for the
three months ended December 31, 2007.
During
the three months ended December 31, 2008 we recognized a gain on sale of
discontinued operations net of income taxes ($5.5 million), of $14,347,445
associated with the sale of our tire recycling business in November
2008. The income from discontinued operations for the three months
ended December 31, 2008 relates primarily to the net results of our tire
recycling operations including approximately $391,000 of one-time gains
associated with the termination of a long-term land and building lease agreement
in Minnesota. In addition, during the quarter ended December 31, 2008, we
recognized income from Georgia discontinued operations of approximately $144,000
including approximately $161,000 associated with the completion of a March 2008
settlement agreement with a former Georgia vendor. The income from discontinued
operations for the three months ended December 31, 2007 relates to the net
results of our tire recycling operations.
Our
net income for the three months ended December 31, 2008 was $13,687,621 or $.39
per basic share as compared to net income of $17,904 or $.00 per basic share for
the three months ended December 31, 2007.
Liquidity
and Capital Resources
As
of December 31, 2008, we had $10,113,897 in cash and cash equivalents and net
working capital of $10,847,648 primarily due to the sale of our tire recycling
business in November 2008. We intend to invest a portion of the net proceeds of
this transaction to grow our Welch Products' business model nationwide and
pursue additional recycling, alternative fuel, alternative energy and other
“green” business opportunities through our recently announced subsidiary,
GreenMan Renewable Fuel and Alternative Energy, Inc. as described
below.
Our
tire recycling business has historically been the source of substantially all of
our revenue and cash flow. While Welch’s revenue have increased 10% during the
quarter ended December 31, 2008 and over 90% during fiscal 2008 as compared to
fiscal 2007. Welch has not yet reached sustained profitability. Since the date
of acquisition, we have made a significant investment in sales and marketing
initiatives intended to promote Welch’s patented products and establish market
presence. We understand our continued existence is dependent on our ability to
generate positive operating cash flow from existing operations and achieve
profitable status on a sustained basis.
In
September 2008 we announced the formation of a new subsidiary, GreenMan
Renewable Fuel and Alternative Energy, Inc. Our primary objective for
this subsidiary is to pursue licenses, joint-ventures and long-term contracts
focused on the commercialization of existing and late-stage development products
and processes in green-based technologies including renewable fuels and
alternative energy. There has been significant global investment made over the
past several years in the area of renewable fuels, alternative energy and
clean-tech technologies and management does not see this momentum slowing down.
Our initial efforts to date have focused on rubber-based opportunities such as
tire gasification and alternative energy generation, but we have recently begun
expanding our focus into several other non-rubber based sectors which we believe
have large commercial market potential. We anticipate devoting increasing
resources over the next fiscal year to exploring our heightened participation in
this fast growing global initiative. To date, GreenMan Renewable Fuel and
Alternative Energy has generated no revenues and has not incurred any operating
expenses.
We
believe we will be able to satisfy our cash requirements through at least fiscal
2010. If Welch is unable to achieve sustained profitability during fiscal 2009
and we are unable to obtain additional financing to supplement our cash
position, our ability to maintain our current level of operations could be
materially and adversely affected. There is no guarantee we will be
able to achieve sustained profitability of our Welch Products business or of new
business opportunities. Our credit facility with Laurus Master Fund, Ltd. was
terminated in November 2008, and we have not yet established any new credit
facility.
The
Consolidated Statements of Cash Flows reflect events for the three months ended
December 31, 2008 and 2007 as they affect our liquidity. During the three months
ended December 31, 2008, net cash used by operating activities was $1,394,737.
Our net income for the three months ended December 31, 2008 was $13,687,621,
reflecting a $19,847,445 gain on sale of our tire recycling operations and the
application of $5.3 million of non-cash income taxes. Our cash flow was
positively impacted by the following non-cash expenses and changes to our
working capital: $641,989 of depreciation and amortization which was offset by
an $802,785 increase in other current assets and a decrease of $613,856 in
accounts payable and accrued expenses. During the three months ended December
31, 2007, net cash provided by operating activities was $420,391 reflecting net
income of $17,904 and the following non-cash expenses and changes to our working
capital: $556,941 of depreciation and amortization and a decrease in accounts
receivable of $742,479. These changes were offset by a $345,820 increase in
product inventory which is not unusual during this seasonally slower quarter and
a net decrease in accounts payable and accrued expenses of
$299,413.
Net
cash provided by investing activities was $27,488,458 for the three months ended
December 31, 2008, reflecting net proceeds from the sale of our scrap tire
processing operations of approximately $27.5 million. Net cash used by investing
activities was $573,401 for the three months ended December 31, 2007 reflecting
the purchase of equipment offset by proceeds of $2,000 and $68,571 of net cash
acquired in the Welch transaction.
Net
cash used by financing activities was $16,766,240 during the three months ended
December 31, 2008, reflecting the payoff of approximately $12.85 million
associated with our Laurus credit facility and approximately $ $3.4 million of
other debt and capital lease obligations associated with our discontinued scrap
tire operations and $534,320 of related party debt. Net cash provided by
financing activities was $198,053 during the three months ended December 31,
2007 reflecting normal debt including the payoff of approximately $467,000 of
Welch debt in conjunction with the acquisition and capital lease repayments and
an increase in our working capital line of $1,002,943.
Effects
of Inflation and Changing Prices
Generally,
we are exposed to the effects of inflation and changing prices. Given
the largest component of our scrap tire collection and disposal costs is
transportation, we had been adversely affected by the significant increases in
the cost of fuel. Having sold our scrap tire recycling business, we do not
believe that future increases in fuel costs are likely to adversely affect our
business. We have generally been unaffected by interest rate declines during the
quarter ended December 31, 2008, because our credit facility bore interest at a
minimum rate of 8.0%.
Environmental
Liability
There
are no known material environmental violations or assessments.
Item
3. Quantitative and Qualitative Disclosures About Market
Risk
Not
required pursuant to Item 305(e) of Regulation S-K.
Item
4. Controls and Procedures
Our
management, with the participation of our chief executive officer and chief
financial officer, evaluated the effectiveness of our disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934) as of December 31, 2008 . In designing and evaluating our
disclosure controls and procedures, we recognized that any controls and
procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving their objectives and management necessarily
applied its judgment in evaluating the cost-benefit relationship of possible
controls and procedures. Based on this evaluation, our chief executive officer
and chief financial officer concluded that as of December 31, 2008, our
disclosure controls and procedures were (1) designed to ensure that material
information relating to the company, including our consolidated subsidiaries, is
made known to our chief executive officer and chief financial officer by others
within those entities, particularly during the period in which this report was
being prepared and (2) effective, in that they provide reasonable assurance that
information required to be disclosed by us in the reports that we file or submit
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the SEC's rules and forms.
No
change in our internal control over financial reporting (as defined in Rules
13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal
quarter ended December 31, 2008 that has materially affected, or is reasonably
likely to materially affect, our internal control over financial
reporting.
PART
II - OTHER INFORMATION
Item
1. Legal Proceedings
As
previously disclosed substantially all of GreenMan Technologies of Georgia,
Inc.’s assets were sold as of March 1, 2006. Several vendors of this subsidiary
commenced legal action, primarily in the state courts of Georgia, in attempts to
collect past due amounts, plus accruing interest, attorneys’ fees, and costs,
all relating to various services rendered to these subsidiaries. Although
GreenMan Technologies, Inc. itself was not a party to any of these vendor
relationships, two of the plaintiffs, representing approximately $900,000 of
these claims, have named GreenMan Technologies, Inc. as a defendant along with
GreenMan Technologies of Georgia, Inc.
On
June 27, 2008, GreenMan Technologies of Georgia, Inc. filed for liquidation
under Chapter 7 of the federal bankruptcy laws in the Bankruptcy Court of the
Middle District of Georgia and a trustee was appointed. As a result
of the bankruptcy proceedings all pending litigation was stayed and GreenMan
Technologies of Georgia, Inc. was de-consolidated from our financial statements
as of September 30, 2008.
During
fiscal 2008, one vendor secured a summary judgment for approximately $890,000
against GreenMan Technologies, Inc. While GreenMan Technologies, Inc. believed
it had valid defenses to these claims, as well as against any similar or related
claims that may be made against us in the future, we did not receive proper
notice of the summary judgment against us and therefore were unable to timely
appeal the judgment. Management therefore determined it to be in the best
interests of GreenMan Technologies, Inc. to reach settlement on this judgment
rather than to attempt to appeal the judgment for lack of proper notice. On
March 28, 2008, GreenMan Technologies, Inc. agreed to a cash settlement of
$450,000 with $100,000 paid upon signing the settlement agreement and nine
additional monthly payments of $38,889 commencing on April 30, 2008 and ending
on December 31, 2008. In January, 2009, after receipt of the final payment, the
plaintiff marked the judgment satisfied with the appropriate
courts.
In
addition to the foregoing, we are subject to routine claims from time to time in
the ordinary course of our business. We do not believe that the
resolution of any of the claims that are currently known to us will have a
material adverse effect on our company or on our financial
statements.
There
have not been any material changes from the risk factors previously disclosed
under Item 6 of our Annual Report on Form 10-KSB for the fiscal year ended
September 30, 2008.
Item
2.
|
Unregistered
Sales of Equity Securities and Use of
Proceeds
|
None.
Item
3.
|
Defaults
Upon Senior Securities
|
None.
Item
4.
|
Submission
of Matters to a Vote of Security
Holders
|
We
conducted a Special Meeting of Stockholders on November 13, 2008. The
matters considered at the meeting and the results for each vote were as
follows:
|
|
For
|
|
Against
|
|
Abstain
|
Vote 1 – Approve the sale of substantially
all of our assets that relate to our scrap tire recycling business (the
“Tire Recycling Business”) pursuant to the Asset Purchase Agreement dated
September 12, 2008 by and among Liberty Tire Services, LLC, Liberty Tire
Services of Ohio, LLC, a wholly owned subsidiary of Liberty Tire Services,
LLC, GreenMan and two of our wholly owned subsidiaries, GreenMan
Technologies of Iowa, Inc., and GreenMan Technologies of Minnesota,
Inc.
|
|
21,050,496
|
|
51,380
|
|
9,195
|
Vote 2 – Approve one or more adjournments
of the Special Meeting, if deemed necessary to facilitate the approval of
Proposal No. 1, including to permit the solicitation of
additional proxies if there are not sufficient votes at the time of the
Special Meeting to establish a quorum or to approve
Proposal No.1
|
|
21,059,296
|
|
42,580
|
|
9,195
|
None.
The
following exhibits are filed with this document:
Exhibit
No.
|
|
Description
|
2.1
(1)
|
|
--
|
Asset
Purchase Agreement among GreenMan Technologies, Inc., Liberty Tire
Services, LLC, Liberty Tire Services of Ohio, LLC, GreenMan Technologies
of Iowa, Inc., and GreenMan Technologies of Minnesota, Inc., dated
September 12, 2008
|
2.2
(1)
|
|
--
|
Stockholder
Voting Agreement among Liberty Tire Services, LLC, Liberty Tire Services
of Ohio, LLC, GreenMan Technologies, Inc., GreenMan Technologies of Iowa,
Inc., GreenMan Technologies of Minnesota, Inc., Maurice E. Needham, Lyle
Jensen, Dr. Allen Kahn, Lew F. Boyd, Nicholas DeBenedictis and Charles E.
Coppa, dated September 12, 2008
|
10.1
*
|
|
--
|
Consulting
Agreement among Coastal International, Inc. and GreenMan Technologies,
Inc., dated November 18, 2008.
|
31.1
*
|
|
--
|
Certification
of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule
15d-14(a)
|
31.2
*
|
|
--
|
Certification
of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule
15d-14(a)
|
32.1
*
|
|
--
|
Certification
of Chief Executive Officer under 18 U.S.C. Section 1350
|
32.2
*
|
|
--
|
Certification
of Chief Financial Officer under 18 U.S.C. Section 1350
|
________________________
(1)
|
Filed
as an Exhibit to GreenMan Technologies, Inc.’s Form 8-K dated September
12, 2008 and filed September 17, 2008, and incorporated herein by
reference.
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
GreenMan
Technologies, Inc.
By: /s/ Lyle Jensen
Lyle
Jensen
President
& Chief Executive Officer
By: /s/ Charles E. Coppa
Charles
E. Coppa
Chief
Financial Officer
Dated: February
17, 2009