U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-KSB

(Mark One)

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

      For the fiscal year ended September 30, 2006

                                       OR

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

                         Commission File Number 1-13776


                           GreenMan Technologies, Inc.
                 ----------------------------------------------
                 (Name of small business issuer in its charter)


                 Delaware                             71-0724248
        ----------------------------               ----------------
        (State or other jurisdiction               (I.R.S. Employer
      of incorporation or organization)           Identification No.)


        12498 Wyoming Ave So., Savage, MN                 55378
     ----------------------------------------           ----------
     (Address of principal executive offices)           (Zip Code)


Issuer's telephone number  (781) 224-2411

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

Title of each class

Common Stock, $ .01 par value
---------------------------------
    (Title of each class)


Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act |_|

Check whether the issuer (1) has 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 |_|

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

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). |_|

<PAGE>

The issuer's revenues for the fiscal year ended September 30, 2006 were
$17,607,812.

The aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
sold, or the average bid and asked price of such common equity, as of December
1, 2006 was $6,410,766.

As of December 1, 2006, 21,493,595 shares of common stock of issuer were
outstanding.

Transitional Small Business Disclosure Format (check one) Yes |_|   No |X|

<PAGE>

                     GREENMAN TECHNOLOGIES, INC.
INDEX

                                                                            Page
PART I

Item 1.   Business                                                            4
Item 2.   Properties                                                          7
Item 3.   Legal Proceedings                                                   8
Item 4.   Submission of Matters to a Vote of Security Holders                 8

PART II

Item 5.   Market for the Registrant's Common Equity, Related Stockholder      8
          Matters and Small Business Issuer's Purchases of Equity Securities
Item 6.   Management's Discussion and Analysis of Financial Condition and     9
          Results of Operations
Item 7.   Financial Statements                                               19
Item 8.   Changes in and Disagreements with Accountants on Accounting and    19
          Financial Disclosure
Item 8A.  Disclosure Controls and Procedures                                 20

PART III

Item 9.   Directors, Executive Officers, and Key Employees                   20
Item 10.  Executive Compensation                                             21
Item 11.  Security Ownership of Certain Beneficial Owners and Management     24
          and Related Stockholder Matters
Item 12.  Certain Relationships and Related Transactions                     26
Item 13.  Exhibits and Reports on Form 8-K                                   27
Item 14.  Principal Accountant Fees and Services                             31

Signatures

Exhibits


                                        3
<PAGE>

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

      This Annual Report on Form 10-KSB contains forward-looking statements
regarding future events and the future results of GreenMan Technologies, Inc.
within the meaning of the Private Securities Litigation Reform Act of 1995, and
are based on current expectations, estimates, forecasts, and projections and the
beliefs and assumptions of our management. Words such as "expect," "anticipate,"
"target," "goal," "project," "intend," "plan," "believe," "seek," "estimate,"
"will," "likely," "may," "designed," "would," "future," "can," "could" and other
similar expressions that are predictions of or indicate future events and trends
or which do not relate to historical matters are intended to identify such
forward-looking statements. These statements are based on management's current
expectations and beliefs and involve a number of risks, uncertainties, and
assumptions that are difficult to predict; consequently actual results may
differ materially from those projected, anticipated, or implied.

                                     PART I

Item 1. Description of Business

General

      GreenMan Technologies, Inc. (together with its subsidiaries "we", "us" or
"our") was originally founded in 1992 and has been operated as a Delaware
corporation since 1995. Today, we comprise two operating locations that collect,
process and market scrap tires in whole, shredded or granular form. We are
headquartered in Savage, Minnesota and currently operate tire processing
operations in Iowa and Minnesota.

      Our tire processing operations are paid a fee to collect, transport and
process scrap tires (i.e., collection/processing revenue) in whole or two inch
or smaller rubber chips which are then sold (i.e., product revenue).

Recent Developments

      On June 30, 2006, we entered into a $16 million amended and restated
credit facility with Laurus (the "New Credit Facility"). The New Credit Facility
consists of a $5 million non-convertible secured revolving note and an $11
million secured non-convertible term note. Unlike our previous credit facility
with Laurus, the New Credit Facility is not convertible into shares of common
stock.

      The revolving note has a term of three years from the closing, bears
interest on any outstanding amounts at the prime rate published in The Wall
Street Journal from time to time plus 2%, with a minimum rate of 8%. The amount
we may borrow at any time under the revolving note is based on our eligible
accounts receivable and our eligible inventory with an advance rate equal to 90%
of our eligible accounts receivable (90 days or less) and 50% of finished goods
inventory up to a maximum of $5 million minus such reserves as Laurus may
reasonably in its good faith judgment deem necessary and proper from time to
time. There were no amounts outstanding under the line at September 30, 2006.

      The term note has a maturity date of June 30, 2009 and bears interest at
the prime rate published in The Wall Street Journal from time to time plus 2%
with a minimum rate of 8%. Interest on the loan is payable monthly commencing
August 1, 2006. Principal will be amortized over the term of the loan,
commencing on July 2, 2007, with minimum monthly payments of principal as
follows: (i) for the period commencing on July 2, 2007 through June 2008,
minimum payments of $150,000; (ii) for the period from July 2008 through June
2009, minimum payments of $400,000; and (iii) the balance of the principal shall
be payable on the maturity date. In addition, we have agreed to make an excess
cash flow repayment as follows: no later than 95 days following the end of each
fiscal year beginning with the fiscal year ending on September 30, 2007, we have
agreed to make a payment equal to 50% of (a) our aggregate net operating cash
flow generated in such fiscal year less (b) our aggregate capital expenditures
in such fiscal year (up to a maximum of 25% of the net operating cash flow
calculated in accordance with clause (a) of this sentence. The term loan maybe
prepaid at any time without penalty. We used approximately $9,972,000 of the
same term loan proceeds to repay certain existing debt (including approximately
$8.5 million due to Laurus) and to pay approximately $888,000 of transaction
fees associated with the New Credit Facility.

      In connection with the New Credit Facility, we also issued to Laurus a
warrant to purchase up to an aggregate of 3,586,429 shares of our common stock
at an exercise price equal to $.01 per share. Laurus has agreed that it will
not, on any trading day, be permitted to sell any common stock acquired upon
exercise of this warrant in excess of 10% of the aggregate number of shares of
the common stock traded on such trading day. Previously issued warrants to
purchase an aggregate of 1,380,000 shares of our common stock were canceled as
part of these transactions. The amount of our common stock Laurus may hold at
any given time is limited to no more than 4.99% of our outstanding capital
stock. This limitation may be waived by Laurus upon 61 days notice to us and
does not apply if an event of default occurs and is continuing under the New
Credit Facility.

      During the third quarter of fiscal 2006, we initiated a $950,000 equipment
upgrade to our Des Moines, Iowa processing facility installing new fine grind
crumb rubber processing equipment. The equipment became operational during
September 2006. This new equipment is expected to increase overall production
capacity by over 8 million pounds per year to over 20 million pounds of crumb
rubber capacity. Approximately $450,000 of the initiative was funded by a long
term loan from the Iowa Department of Natural Resources with the balance of the
project funded through internally generated cash flow and Iowa's line of credit.
The Iowa line of credit was subsequently paid off in conjunction with our June
2006 Laurus refinancing.

      Due to the magnitude of continued operating losses incurred by our
California subsidiary ($3.2 million since inception), our Board of Directors
determined it to be in the best interest of our company to divest our California
operations. A majority of the California operating losses were due to rapid
market share growth within the state, significantly higher operating costs and
equipment reliability issues resulting from aging equipment processing an
increasing number of scrap tires. The aggregate net losses associated with our
California subsidiary included in the results for years ended September 30, 2006
and 2005 were approximately $1,005,000 and $1,365,000 respectively.

      In July 2006 we sold our California subsidiary to a third party for
$1,000. We did not recognize a material gain or loss on this transaction.

      Due to the magnitude of the continuing operating losses incurred by our
Georgia ($3.4 million) and Tennessee ($1.8 million) subsidiaries during fiscal
2005, our Board of Directors determined it to be in the best interest of our
company to discontinue all Southeastern operations and dispose of their
respective operating assets. A majority of the Tennessee operating losses were
due to rapid market share growth within the state necessitating us to transport
an increasing number of Tennessee scrap tires to our Georgia facility for
processing at significant transportation and processing loss. A majority of the
Georgia operating losses were due to (1) the negative impact of processing a
significant number of Tennessee sourced tires; (2) a change in the
specifications of our primary end market customers requiring a smaller product
resulting in reduced processing capacity and significantly higher operating
costs; and (3) equipment reliability issues resulting from aging equipment
processing an increasing number of scrap tires.

      In September 2005 we assigned all Tennessee scrap tire collection
contracts and certain other contracts with suppliers of waste tires and
contracts to supply whole tires to certain cement kilns in the southeastern
region of the United States to a company owned by a former employee. We received
no cash consideration for these assignments and recorded a $1,334,849 loss
(including a non-cash loss of $918,450 associated with goodwill written off) on
disposal of the operations at September 30, 2005. The aggregate net losses
including the loss on disposal associated with the discontinued operations of
our Tennessee subsidiary included in the results for year ended September 30,
2005 were approximately $3.1 million. During fiscal 2006 we reduced certain
plant closure accruals and reached agreement with our former Tennessee landlord
regarding past due amounts aggregating $56,000 and recognized approximately
$70,000 of insurance credits resulting in approximately $126,000 of income from
discontinued Tennessee operations during the year ended September 30, 2006.


                                       4
<PAGE>

      In September 2005, we adopted a plan to dispose of all Georgia operations
and during the quarter ended December 31, 2005, we substantially curtailed
operations at our Georgia subsidiary. As a result, we wrote down all Georgia
operating assets to their estimated fair market value at September 30, 2005 and
recorded a loss on disposal of $4,631,102 (including a non-cash loss of
$1,253,748 associated with goodwill written off) net of a gain on settlement of
our Georgia facility lease of $586,137. We completed the divestiture of all
Georgia operating assets as of March 1, 2006. The aggregate net losses incurred
during fiscal 2006 associated with our discontinued Georgia operation was
approximately $582,000. The aggregate net losses including the loss on disposal
associated with the discontinued operations of our Georgia subsidiary included
in the results for the fiscal year ended September 30, 2005 were approximately
$8.0 million.

      In February 2006, we sold and assigned to Tires Into Recycled Energy and
Supplies, Inc. ("TIRES"), a leading crumb rubber processor in the United States,
certain assets, including (a) certain truck tire processing equipment located at
our Georgia facility; (b) certain rights and interests in our contracts with
suppliers of scrap truck tires; and (c) certain intangible assets. TIRES assumed
all of our rights and obligations under these contracts. In addition, TIRES
entered into a sublease agreement with us with respect to part of the premises
located in Georgia. As additional consideration, TIRES terminated several
material supply agreements and a December 2005 letter of intent containing an
exclusive option to acquire certain operating assets of TIRES. (See Item 6.
Management's Discussion and Analysis of Financial Condition and Results of
Operation "Liquidity and Capital Resources - Divestiture of Unprofitable
Operations").

      In March 2006, we sold and assigned to MTR of Georgia, Inc. ("MTR"), a
company co-owned by a former employee, certain assets, including (a) certain
passenger tire processing equipment located at our Georgia facility; (b) certain
rights and interests in our contracts with suppliers of scrap passenger tires;
and (c) certain intangible assets. MTR assumed all of our rights and obligations
under these contracts. In addition, MTR entered into a sublease agreement with
us with respect to part of the premises located in Georgia. We received $250,000
from MTR for these assets. As additional consideration, MTR assumed financial
responsibility for disposing of all scrap tires and scrap tire processing
residual at the Georgia facility as of the closing of this sale. (See Item 6.
Management's Discussion and Analysis of Financial Condition and Results of
Operation "Liquidity and Capital Resources - Divestiture of Unprofitable
Operations").

      We agreed with TIRES and MTR not to compete in the business of providing
whole tire waste disposal services or selling crumb rubber material (except to
our existing customers) within certain Southeastern states for a period of three
years.

      In February 2006, we amended our Georgia lease agreement to obtain the
right to terminate the original lease, which had a remaining term of
approximately 15 years, by providing the landlord with six months notice. In the
event of termination, we will be obligated to continue to pay rent until the
earlier to occur of (1) the sale by the landlord of the premises; (2) the date
on which a new tenant takes over; or (3) three years from the date on which we
vacate the property. As a result of the amendment and our decision to dispose of
our Georgia operations, we wrote off the unamortized balance of $1,427,053
associated with the leased land and buildings and improvements as a cost of
disposal of discontinued operations at September 30, 2005. This loss was
partially offset by a $586,137 gain on settlement of the remaining capital lease
obligations due and is included in the loss on disposal of discontinued
operations at September 30, 2005. In addition, on August 28, 2006 we received
notice from the Georgia landlord indicating that the Georgia subsidiary was in
default under the lease due to its insolvent financial condition. The landlord
agreed to waive the default in return for $75,000 fee to be paid upon
termination of the lease and required that all current and future rights and
obligations under the lease be assigned to GreenMan Technologies, Inc. pursuant
to a March 29, 2001 guaranty agreement. The $75,000 is included in loss from
discontinued operations for the fiscal year ended September 30, 2006 and is
included in Obligations due under lease settlement at September 30, 2006.

Products and Services

      Our tire processing operations are paid a fee to collect, transport and
process scrap tires (i.e., collection/processing revenue) in whole or two inch
or smaller rubber chips which are then sold (i.e., product revenue).

      We collect scrap tires from three sources:

      o     local, regional and national tire stores;
      o     tire manufacturing plants; and
      o     illegal tire piles being cleaned-up by state, county and local
            governmental entities.

      The tires we collect are processed and sold:

      o     as tire-derived fuel used in lieu of coal by pulp and paper
            producers, cement kilns and electric utilities;
      o     as an effective substitute for crushed stone in civil engineering
            applications such as road beds, landfill construction or septic
            field construction; or


                                       5
<PAGE>

      o     as crumb rubber (rubber granules) and used for playground and
            athletic surfaces, running tracks, landscaping/groundcover
            applications and bullet containment systems.

      In some states where we previously had disposal contracts with cement
kilns, our whole tire operations were paid a fee by other tire collectors to
dispose of whole tires at our location. We paid the cement kilns a fee to accept
the whole tires which they then use as an alternative fuel source to coal, while
also providing a source of iron oxide which is required in the cement making
process. As of September 30, 2006, we no longer have any disposal contracts with
cement kilns.

Manufacturing/Processing

      Our tire shredding operations currently have the capacity to process about
15 million passenger tire equivalents annually. Our continuing operations
collected approximately 12.1 million passenger tire equivalents in the fiscal
year ended September 30, 2006 compared to approximately 14.1 million passenger
tire equivalents during the year ended September 30, 2005. We anticipate
processing over 12.6 million passenger tire equivalents in fiscal 2007, based on
current processing volumes.

      The method used to process tires is a series of commercially available
shredders that sequentially reduce tires from whole tires to two-inch chips or
smaller. Bead-steel is removed magnetically yielding a "95% wire-free chip."
This primary recycling process recovers approximately 60% of the incoming tire.
The remaining balance consists of un-saleable cross-contaminated rubber and
steel ("waste wire"), which we have historically disposed of at significant
annual costs. Our Iowa and Minnesota facilities further process the waste wire
residual into saleable components of rubber and steel, which reduces residual
disposal costs and provides additional sources of revenue. In our Iowa facility,
rubber is further granulated into particles less than one-quarter inch in size
for use in the rapidly expanding athletic surfaces and playground markets.

Raw Materials

      We believe we will have access to a supply of tires sufficient to meet our
requirements for the foreseeable future. According to the 2006 Scrap Tire and
Rubber User's Directory, in 2005 approximately 297 million passenger tire
equivalents (approximately one per person per year) were discarded in the United
States ("current generation scrap tires") in addition to an estimated several
hundred million scrap passenger tire equivalents already stockpiled in illegal
tire piles. Additionally, approximately 241 million passenger tire equivalents
are currently recycled, of which approximately 130 million are burned as
tire-derived fuel; 55 million are used in civil engineering applications; and 56
million are used in various other applications such as crumb rubber production,
retreading and export. The approximately 56 million remaining passenger tire
equivalents are now added to landfills annually. Based on this and other data,
there appears to be an adequate supply of tires to meet our needs.

Customers

      Our customers continue to consist of major tire manufacturers, local and
regional tire outlets, and state and local governments. We have many long-term,
stable relationships with our customers and we do not believe that the loss of
any individual customer would have a material adverse effect on our business.
During 2006 and 2005, no single customer accounted for more than 10% of our
total net sales.

      We do not have any long-term contracts which require any customer to
purchase any minimum amount of products or provide any minimum amount of tires.
There can be no assurance that we will continue to receive orders of the same
magnitude as in the past from existing customers or that we will be able to
market our current or proposed products to new customers.

Sales and Marketing

      We continue to utilize in-house sales staff for securing new accounts and
marketing processed materials. This strategy maximizes revenue and concentrates
our sales/marketing efforts on highly focused initiatives. Sales/marketing
personnel have extensive experience in the tire recycling industry and in
industries where our processed materials are consumed.

Competition

      We compete in a highly fragmented and decentralized market with a large
number of small competitors. Although we continue to believe there is an
opportunity for industry consolidation, we have focused our attention on
strategic value-added vertical integration. Our strategy is to continue to
increase the number of passenger tire equivalents that we processes through
aggressive sales and marketing efforts as well as continuing to focus on
identifying and generating new marketing strategies for recycled tires and their
value added by-products.


                                       6
<PAGE>

Government Regulation

      Our tire recycling and processing activities are subject to extensive and
rigorous government regulation designed to protect the environment. We do not
believe that our activities result in emission of air pollutants, disposal of
combustion residues, or storage of hazardous substances except in compliance
with applicable permits and standards. The establishment and operation of plants
for tire recycling, however, are subject to obtaining numerous permits and
compliance with environmental and other government regulations. The process of
obtaining required regulatory approvals can be lengthy and expensive. The
Environmental Protection Agency and comparable state and local regulatory
agencies actively enforce environmental regulations and conduct periodic
inspections to determine compliance with government regulations. Failure to
comply with applicable regulatory requirements can result in, among other
things, fines, suspensions of approvals, seizure or recall of products,
operating restrictions, and criminal prosecutions. Furthermore, changes in
existing regulations or adoption of new regulations could impose costly new
procedures for compliance, or prevent us from obtaining, or affect the timing
of, regulatory approvals. We use our best efforts to keep abreast of changed or
new regulations for immediate implementation.

Protection of Intellectual Property Rights and Proprietary Rights

      None of the equipment or machinery that we currently use or intend to use
in our current or proposed manufacturing activities is proprietary. Any
competitor can acquire equivalent equipment and machinery on the open market.

      We have used the name "GreenMan" in interstate commerce since inception
and assert a common law right in and to that name.

Employees

      As of September 30, 2006, we had 79 full time employees. We are not a
party to any collective bargaining agreements and consider the relationship with
our employees to be satisfactory.

Item 2. Description of Properties

      Our Minnesota location consists of production facilities and office space
situated on approximately eight acres which we lease from a related party. The
lease expires in 2016, but provides for two additional four-year extensions.
(See "Item 12. Certain Relationships and Related Transactions - Related Party
Transactions.")

      Our Iowa location consists of production facilities and office space
situated on approximately four acres which we lease on a triple net basis from a
related party. The lease expires in 2013 and provides us with a right of first
refusal to purchase the land and buildings at fair market value during the term
of the lease. In addition, we entered into a new lease with the same related
party for approximately three additional acres adjacent to our Iowa facility
expiring in 2013. (See "Item 12. Certain Relationships and Related Transactions
- Related Party Transactions.")

      In conjunction with the relocation of corporate headquarters from
Massachusetts to Minnesota we terminated our lease for our former headquarters
effective November 1, 2006. In return for the termination, we gave our landlord
$50,000 and 65,000 shares of our common stock (valued at $32,500). We are
allowed to remain in the existing space through December 31, 2006. In addition,
as part of the settlement agreement, the landlord agreed to provide us with
approximately 1,100 square feet of office space for 12 months commencing January
1, 2007 at no cost (valued at $15,000).

      In September 2005, we ceased operations at our Tennessee facility and
substantially curtailed operations at our Georgia location during the quarter
ended December 31, 2005. The Tennessee lease expired in 2005. The Georgia
location consists of production facilities and office space which we lease
pursuant to an April 2001 sale/leaseback arrangement originally expiring in
2021. In February 2006, we renegotiated the lease to permit us to terminate the
lease with 180 days notice. Despite early termination, we will be obligated to
continue to pay rent until the earlier to occur of (1) the sale of the premises
by the landlord; (2) the date on which the landlord begins leasing the premises
to a new tenant; or (3) three years from the date on which we vacate the
property. (See "Item 12. Certain Relationships and Related Transactions -
Related Party Transactions.")

      During the period of February 16, 2006 to March 1, 2006, we completed the
sale of substantially all GreenMan of Georgia operating assets to two companies,
one of which is co-owned by a former employee. In addition, we entered into a
sublease agreement with each party with respect to part of the premises located
in Georgia with a rolling six month commitment from each party.

      We consider our properties in good condition, well maintained and
generally suitable to carry on our business activities for the foreseeable
future.


                                       7
<PAGE>

Item 3. Legal Proceedings

      As of September 30, 2006, approximately 14 vendors of our GreenMan
Technologies of Georgia, Inc. and GreenMan Technologies of Tennessee, Inc.
subsidiaries had commenced legal action, primarily in the state courts of
Georgia, in attempts to collect approximately $1.4 million of past due amounts,
plus accruing interest, attorneys' fees, and costs, all relating to various
services rendered to these subsidiaries. The largest individual claim is for
approximately $650,000. As of September 30, 2006, 5 vendors had secured
judgments in their favor against GreenMan Technologies of Georgia, Inc. for an
aggregate of approximately $237,000. As previously noted, all of GreenMan
Technologies of Tennessee, Inc.'s assets were sold in September 2005 and
substantially all of GreenMan Technologies of Georgia, Inc.'s assets were sold
as of March 1, 2006. All proceeds from these sales were retained by our secured
lender and these subsidiaries have no substantial assets. We are therefore
currently evaluating the alternatives available to these subsidiaries.

      Although GreenMan Technologies, Inc. was not a party to any of these
vendor relationships, three of the plaintiffs have named GreenMan Technologies,
Inc. as a defendant along with our subsidiaries. We believe that GreenMan
Technologies, Inc. has valid defenses to these claims, as well as against any
similar or related claims that may be made against us in the future, and we
intend to defend against any such claims vigorously. 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.

Item 4. Submission of Matters to a Vote of Security Holders

      We held our Annual Meeting of Stockholders on July 27, 2006. The matters
considered at the meeting and the results for each vote were as follows:

<TABLE>
<CAPTION>
                                                             For          Against       Abstain
                                                          ----------      -------       -------
<S>                                                       <C>             <C>          <C>
Vote 1 - Election of  the Board of Directors
  Maurice E. Needham ...............................      13,783,603      543,242         N/A
  Lyle Jensen ......................................      13,789,028      537,817         N/A
  Lew Boyd .........................................      13,799,603      527,242         N/A
  Dr. Allen Kahn ...................................      13,799,603      527,242         N/A
  Nicholas DeBenedictis ............................      13,800,028      526,817         N/A

Vote 2 - Ratify the selection of Wolf and Company as
our independent auditors for the fiscal year ended
September 30, 2006 .................................      14,265,374       31,400      30,071
</TABLE>


                                     PART II

Item 5. Market for Common Equity, Related Stockholder Matters and Small Business
        Issuer's Purchases of Equity Securities

      Our common stock traded on the American Stock Exchange from September 2002
through June 15, 2006 under the symbol "GRN." Our common stock ceased trading on
the Exchange and was delisted from the Exchange on July 6, 2006. During the
period of June 15 through June 20, 2006 our common stock traded on the Pink
Sheet, and on June 21, 2006 our stock began trading on the OTC Bulletin Board
under the symbol "GMTI". The following table sets forth the high and low bid
quotations for our common stock for the periods indicated as quoted on the
American Stock Exchange, the Pink Sheet and the OTC Bulletin Board, for these
respective periods. Quotations from the Pink Sheet and the OTC Bulletin Board
reflect inter-dealer prices, without retail mark-up, mark-down or commission and
may not necessarily represent actual transactions.

                                                        Common Stock
                                                   ----------------------
                                                     High            Low
                                                     ----            ---
Fiscal 2005
-----------
Quarter Ended December 31, 2004 ................    $1.57           $1.11
Quarter Ended March 31, 2005 ...................     1.55            0.79
Quarter Ended June 30, 2005 ....................     0.94            0.44
Quarter Ended September 30, 2005 ...............     0.44            0.22


                                       8
<PAGE>

Fiscal 2006
-----------
Quarter Ended December 31, 2005 ................    $0.27           $0.15
Quarter Ended March 31, 2006 ...................     0.32            0.14
Quarter Ended June 30, 2006 ....................     0.57            0.23
Quarter Ending September 30, 2006 ..............     0.40            0.26

      On December 1, 2006, the closing price of our common stock was $ .46 per
share.

      As of September 30, 2006, we estimate the approximate number of
stockholders of record of our common stock to be 2,200. This number excludes
individual stockholders holding stock under nominee security position listings.

      We have not paid any cash dividends on our common stock since inception
and do not anticipate paying any cash dividends in the foreseeable future. In
addition, our agreements with Laurus Master Fund, Ltd. prohibit the payment of
cash dividends.

Item 6. 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 separate plans to divest the operations of our
Georgia and Tennessee subsidiaries and dispose of their respective assets. In
addition, due to continuing operation losses, in July 2006 we sold our
California subsidiary. Accordingly, we have classified all three respective
entity's results of operations as discontinued operations for all periods
presented in the accompanying consolidated financial statements.

Fiscal Year ended September 30, 2006 Compared to Fiscal Year ended
September 30, 2005

      Net sales from continuing operations for the fiscal year ended September
30, 2006 decreased $703,650 or 4% to $17,607,812 as compared to last year's net
sales from continuing operations of $18,311,462. Our continuing operations
processed approximately 12.1 million passenger tire equivalents during the
fiscal year ended September 30, 2006, compared to approximately 14.1 million
passenger tire equivalents during the same period last year. The decrease was
attributable to the completion of an Iowa scrap tire cleanup project during
fiscal 2005 which accounted for approximately $1,188,000 of revenue and 1.25
million passenger tire equivalents during fiscal 2005.

      In addition to the impact of the completion of the Iowa cleanup project in
2005, the remaining decrease in overall inbound tire volume was attributable a
corporate-wide effort initiated during fiscal 2005 to evaluate our inbound
collection infrastructure and implement price increases where warranted and
terminate service in situations where price increases were not an alternative.
While these initiatives reduced our overall inbound tire volume the overall fee
we are paid to collect and dispose of a scrap tire ("tipping fee") increased 5%
(a 6% increase when the prior year Iowa scrap tire cleanup revenue is removed)
as compared to last year. While these initiatives reduced our overall inbound
tire volume growth rate and may negatively impact our overall gross tipping fee
revenue, we believe these efforts will continue to improve our performance
through lower labor, parts and maintenance costs.

      Gross profit for the fiscal year ended September 30, 2006 was $4,654,059
or 26% of net sales, compared to $3,508,828 or 19% of net sales for fiscal year
ended September 30, 2005. Our cost of sales decreased $1,848,881 or 13%
primarily due to decreased collection and processing costs associated with lower
inbound volume, reduced residual disposal costs associated with several large
civil engineering projects (which use more of the scrap tire including waste
wire) and our ongoing efforts to reduce operating costs where available.

      Selling, general and administrative expenses for the fiscal year ended
September 30, 2006 increased $855,793 to $3,549,803 or 20% of net sales,
compared to $2,694,010 or 15% of net sales for the fiscal year ended September
30, 2005. The increase was primarily attributable to an increase of $343,000
(including approximately $397,000 of one-time severance costs related to our
former Chief Executive Officer and our California divestiture in July 2006)
associated with continuing operations and the re-allocation of approximately
$571,000 of net corporate operating expenses which were absorbed by discontinued
operations in prior years.

      During fiscal 2005 management determined that the carrying value of
certain transportation equipment was impaired and recorded an impairment loss
amounting to $57,183 during the fiscal year ended September 30, 2005. In
addition, due to the magnitude of our fiscal 2005 losses, management determined
that the carrying value of corporate-wide goodwill to be impaired and
accordingly wrote-off all remaining goodwill recording an additional non-cash
impairment loss of $783,410.

      As a result of the foregoing, we had operating income of $1,104,256 for
the fiscal year ended September 30, 2006 as compared to an operating loss of
$25,775 for the fiscal year ended September 30, 2005.

      Cash interest and financing expense for the fiscal year ended September
30, 2006 increased $1,482,578 to $2,312,071, compared to $829,493 during the
fiscal 2005. The increase is attributable to the inclusion of approximately
$888,000 of fees and expenses and $131,256 of deferred interest associated with
the June 2006 Laurus credit facility restructuring, increased rates and the


                                       9
<PAGE>

allocation of all Laurus related cash interest to continuing operations during
the fiscal year ended September 30, 2006 (approximately $127,000 was allocated
to discontinued operations during fiscal 2005). Non-cash financing fees and
interest decreased $274,549 to $1,273,014 for the fiscal year ended September
30, 2006 and as compared to $1,547,563 for the same period last year. The
decrease was attributable to the completion of all amortization of deferred
financing fees in conjunction with the June 2006 Laurus refinancing.

      During the fiscal year ended September 30, 2006 we recognized
approximately $353,476 of a gain on debt restructuring associated with the
June 2006 restructuring of the promissory note payable to Republic Services of
Georgia (see Note 5).

      We recorded a provision for state income tax expense of $65,337 during the
fiscal year ended September 30, 2006 based on certain subsidiary state income
tax obligations. Based on the magnitude of our fiscal 2005 losses, we determined
the near-term realizability of a $270,000 non-cash deferred tax asset to be less
likely than not and therefore have provided a valuation allowance on the entire
amount during the fiscal year ended September 30, 2005.

      As a result of the foregoing, our net loss after income taxes from
continuing operations for the fiscal year ended September 30, 2006 decreased
$443,247 to $2,244,978 (including approximately $932,000 of net one-time charges
noted above) or $.11 per basic share, compared to a net loss of $2,688,225 or
$.13 per basic share for the fiscal year ended September 30, 2005.

      The $1,460,981 net loss ($.08 per basic share) from discontinued
operations for the fiscal year ended September 30, 2006 includes approximately
$1 million of losses incurred by our former California subsidiary with the
balance relating primarily to the costs of exit activities associated with our
Georgia operations. The $6,518,532 net loss ($.34 per basic share) from
discontinued operations for the fiscal year ended September 30, 2005 includes
approximately $3.4 million associated with our Georgia operations, approximately
$1.8 million associated with our Tennessee operations and $1.3 million
associated with our California operations. The estimated loss on disposal of
discontinued operations for the fiscal year ended September 30, 2005 includes
approximately $1.3 million relating to our Tennessee operations and
approximately $4.6 million in connection with our Georgia facility. Losses
primarily relate to the write-off of property, equipment, goodwill, an
acquisition deposit and costs of exit activities.

      Our net loss for the fiscal year ended September 30, 2006 decreased
$11,466,750 or 76% to $3,705,959 (including approximately $932,000 of net
one-time charges noted above) or $.19 per basic share as compared to a net loss
of $15,172,709 or $.79 per basic share for the fiscal year ended September 30,
2005.

Liquidity and Capital Resources

      As of September 30, 2006, we had $639,014 in cash and cash equivalents and
a working capital deficiency of $3,989,555 of which $3,414,834 or 86% of the
total is associated with our discontinued Georgia subsidiary. We understand our
continued existence is dependent on our ability to generate positive operating
cash flow and achieve profitable status on a sustained basis. We believe our
efforts to achieve these goals have been positively impacted by the June 30,
2006 restructuring of our Laurus Credit facility as well as our divestiture of
historically unprofitable operations during fiscal 2006 and 2005. However, we
believe the June 15th delisting of our stock by the American Stock Exchange
could substantially limit our stock's future liquidity and impair our ability to
raise capital.

      The Consolidated Statements of Cash Flows reflect events in fiscal 2006
and 2005 as they affect our liquidity. During the fiscal year ended September
30, 2006, net cash provided by operating activities was $372,922. While our net
loss was $3,705,959 our overall cash flow was positively impacted by the
following non-cash expenses and changes to our working capital: $2,808,591 of
depreciation and amortization, $264,543 of non-cash impairment loss and net loss
on disposal of fixed assets and a decrease in accounts receivable and other
current assets aggregating $1,736,704 which offset a $289,603 decrease in
accounts payable. During the fiscal year ended September 30, 2005, net cash used
by operating activities was $450,536 which reflects a net loss of $15,172,709
which was partially offset by the following non-cash expenses and changes to our
working capital: $4,020,633 of depreciation and amortization, $3,618,150 of
non-cash net loss on disposal of fixed assets (including capital leases),
$3,591,077 of non-cash goodwill impairment, a decrease in accounts receivable,
product inventory and other current assets of $1,243,190 in aggregate and an
increase in accounts payable and accrued expenses of $1,938,606 in aggregate.

      Net cash used for by investing activities was $863,880 for the fiscal year
ended September 30, 2006 reflecting the purchase of $1,424,212 of equipment and
the receipt of $560,332 from the sale of assets. The net cash used by investing
activities for the fiscal year ended September 30, 2005 was $987,991 reflecting
the purchase of $1,596,093 of equipment to increase capacity and efficiencies at
several of our operating locations. This was offset by proceeds received from
the sale of our Wisconsin property as our Wisconsin operations were consolidated
into Minnesota during fiscal 2005.

      Net cash provided by financing activities was $764,787 during the fiscal
year ended September 30, 2006 reflecting the positive impact of the Laurus
restructuring and other notes payable and the sale of our common stock. Net cash
provided by financing activities was $1,293,956 during the fiscal year ended
September 30, 2005 and was positively impacted by availability under our new
Laurus credit facility as well as increased availability under our First
American credit facility. This increase was offset by repayment of notes payable
of $2,002,404 and capital leases of $538,848.


                                       10
<PAGE>

      In order to reduce our operating costs, address our liquidity needs and
return to profitable status, we have implemented and/or are in the processing of
implementing the following actions:

Divestiture of Unprofitable Operations

      Due to the magnitude of the continuing operating losses incurred by our
Georgia ($3.4 million) and Tennessee ($1.8 million) subsidiaries during fiscal
2005 and our California ($3.2 million since inception) subsidiary in fiscal
2006, our Board of Directors determined it to be in the best interest of our
company to discontinue all Southeastern and West coast operations and dispose of
their respective operating assets. A majority of the Tennessee operating losses
were due to rapid market share growth within the state necessitating us to
transport an increasing number of Tennessee scrap tires to our Georgia facility
for processing at significant transportation and processing loss. A majority of
the Georgia operating losses were due to (1) the negative impact of processing a
significant number of Tennessee sourced tires; (2) a change in the
specifications of our primary end market customers requiring a smaller product
resulting in reduced processing capacity and significantly higher operating
costs and (3) equipment reliability issues resulting from aging equipment
processing an increasing number of scrap tires. A majority of the California
operating losses were due to significantly higher operating costs and equipment
reliability issues resulting from aging equipment.

      In September 2005 we assigned all Tennessee scrap tire collection
contracts and certain other contracts with suppliers of waste tires and
contracts to supply whole tires to certain cement kilns in the southeastern
region of the United States to a company owned by a former employee. We received
no cash consideration for these assignments and recorded a $1,334,849 loss
(including a non-cash loss of $918,450 associated with goodwill written off) on
disposal of the operations at September 30, 2005. The aggregate net losses
including the loss on disposal associated with the discontinued operations of
our Tennessee subsidiary included in the results for year ended September 30,
2005 were approximately $3.1 million. We accrued $165,000 of estimated costs
associated with the Tennessee closure at September 30, 2005. During fiscal 2006
we incurred and charged against the accrual approximately $109,000. In addition,
$56,000 was reversed into income as result of a reduction in certain plant
closure accruals and an agreement with our former Tennessee landlord regarding
past due amounts. Additionally, we recognized $70,000 associated with insurance
credits. In aggregate, we recognized approximately $126,000 of income from
discontinued Tennessee operations during the year ended September 30, 2006.

      In September 2005, we adopted a plan to dispose of all Georgia operations
and during the quarter ended December 31, 2005, we substantially curtailed
operations at our Georgia subsidiary. As a result, we wrote down all Georgia
operating assets to their estimated fair market value at September 30, 2005 and
recorded a loss on disposal of $4,631,102 (including a non-cash loss of
$1,253,748 associated with goodwill written off) net of a gain on settlement of
our Georgia facility lease of $586,137. We completed the divestiture of all
Georgia operating assets as of March 1, 2006. The aggregate net losses incurred
during fiscal 2006 associated with our discontinued Georgia operation was
approximately $582,000. The aggregate net losses including the loss on disposal
associated with the discontinued operations of our Georgia subsidiary included
in the results for the fiscal year ended September 30, 2005 were approximately
$8.0 million.

      In February 2006, we sold and assigned to Tires Into Recycled Energy and
Supplies, Inc. ("TIRES"), a leading crumb rubber processor in the United States,
certain assets, including (a) certain truck tire processing equipment located at
our Georgia facility; (b) certain rights and interests in our contracts with
suppliers of scrap truck tires; and (c) certain intangible assets. TIRES assumed
all of our rights and obligations under these contracts. In addition, TIRES
entered into a sublease agreement with us with respect to part of the premises
located in Georgia. As additional consideration, TIRES terminated several
material supply agreements and a December 2005 letter of intent containing an
exclusive option to acquire certain operating assets of TIRES. (See Item 6.
Management's Discussion and Analysis of Financial Condition and Results of
Operation "Liquidity and Capital Resources - Divestiture of Unprofitable
Operations").

      In March 2006, we sold and assigned to MTR of Georgia, Inc. ("MTR"), a
company co-owned by a former employee, certain assets, including (a) certain
passenger tire processing equipment located at our Georgia facility; (b) certain
rights and interests in our contracts with suppliers of scrap passenger tires;
and (c) certain intangible assets. MTR assumed all of our rights and obligations
under these contracts. In addition, MTR entered into a sublease agreement with
us with respect to part of the premises located in Georgia. We received $250,000
from MTR for these assets. As additional consideration, MTR assumed financial
responsibility for disposing of all scrap tires and scrap tire processing
residual at the Georgia facility as of the closing of this sale. (See Item 6.
Management's Discussion and Analysis of Financial Condition and Results of
Operation "Liquidity and Capital Resources - Divestiture of Unprofitable
Operations").

      We agreed with TIRES and MTR not to compete in the business of providing
whole tire waste disposal services or selling crumb rubber material (except to
our existing customers) within certain Southeastern states for a period of three
years.

      In February 2006, we amended our Georgia lease agreement to obtain the
right to terminate the original lease, which had a remaining term of
approximately 15 years, by providing the landlord with six months notice. In the
event of termination, we will be obligated to continue to pay rent until the
earlier to occur of (1) the sale by the landlord of the premises; (2) the date
on which a new tenant takes over; or (3) three years from the date on which we
vacate the property. As a result of the amendment and our decision to dispose of
our Georgia operations, we wrote off the unamortized balance of $1,427,053
associated with the leased land and buildings and improvements as a cost of
disposal of discontinued operations at September 30, 2005. This loss was
partially offset by a $586,137 gain on settlement of the remaining capital lease
obligations due and is included in the loss on disposal of discontinued
operations at September 30, 2005. In addition, on August 28, 2006 we received
notice from the Georgia landlord indicating that the Georgia subsidiary was in
default under the lease due to its insolvent financial condition. The landlord
agreed to waive the default in return for $75,000 fee to be paid upon


                                       11
<PAGE>

termination of the lease and required that all current and future rights and
obligations under the lease be assigned to GreenMan Technologies, Inc. pursuant
to a March 29, 2001 guaranty agreement. The $75,000 is included in loss from
discontinued operations for the fiscal year ended September 30, 2006 and is
included in Obligations due under lease settlement at September 30, 2006.

      In July 2006 we sold our California subsidiary to a third party for
$1,000. The aggregate net losses associated with our California subsidiary
included in the results for years ended September 30, 2006 and 2005 were
approximately $1,005,000 and $1,365,000 respectively.

Credit Facility Refinancing

      On June 30, 2006, we entered into a $16 million amended and restated
credit facility with Laurus (the "New Credit Facility"). The New Credit Facility
consists of a $5 million non-convertible secured revolving note and an $11
million secured non-convertible term note. Unlike our previous credit facility
with Laurus, the New Credit Facility is not convertible into shares of common
stock.

      The revolving note has a term of three years from the closing, bears
interest on any outstanding amounts at the prime rate published in The Wall
Street Journal from time to time plus 2%, with a minimum rate of 8%. The amount
we may borrow at any time under the revolving note is based on our eligible
accounts receivable and our eligible inventory with an advance rate equal to 90%
of our eligible accounts receivable (90 days or less) and 50% of finished goods
inventory up to a maximum of $5 million minus such reserves as Laurus may
reasonably in its good faith judgment deem necessary and proper from time to
time. There were no amounts outstanding under the line at September 30, 2006.

      The term note has a maturity date of June 30, 2009 and bears interest at
the prime rate published in The Wall Street Journal from time to time plus 2%
with a minimum rate of 8%. Interest on the loan is payable monthly commencing
August 1, 2006. Principal will be amortized over the term of the loan,
commencing on July 2, 2007, with minimum monthly payments of principal as
follows: (i) for the period commencing on July 2, 2007 through June 2008,
minimum payments of $150,000; (ii) for the period from July 2008 through June
2009, minimum payments of $400,000; and (iii) the balance of the principal shall
be payable on the maturity date. In addition, we have agreed to make an excess
cash flow repayment as follows: no later than 95 days following the end of each
fiscal year beginning with the fiscal year ending on September 30, 2007, we have
agreed to make a payment equal to 50% of (a) our aggregate net operating cash
flow generated in such fiscal year less (b) our aggregate capital expenditures
in such fiscal year (up to a maximum of 25% of the net operating cash flow
calculated in accordance with clause (a) of this sentence. The term loan maybe
prepaid at any time without penalty. We used approximately $9,972,000 of the
same term loan proceeds to repay certain existing debt (including approximately
$8.5 million due to Laurus) and to pay approximately $888,000 of transaction
fees associated with the New Credit Facility.

      In connection with the New Credit Facility, we also issued to Laurus a
warrant to purchase up to an aggregate of 3,586,429 shares of our common stock
at an exercise price equal to $.01 per share. Laurus has agreed that it will
not, on any trading day, be permitted to sell any common stock acquired upon
exercise of this warrant in excess of 10% of the aggregate number of shares of
the common stock traded on such trading day. Previously issued warrants to
purchase an aggregate of 1,380,000 shares of our common stock were canceled as
part of these transactions. The amount of our common stock Laurus may hold at
any given time is limited to no more than 4.99% of our outstanding capital
stock. This limitation may be waived by Laurus upon 61 days notice to us and
does not apply if an event of default occurs and is continuing under the New
Credit Facility.

      We have agreed to register for resale under the Securities Act of 1933 the
shares of common stock issuable to Laurus upon exercise of the new warrant. We
have not yet completed the registration statement of the underlying shares and
Laurus has waived any default resulting from the delay in filing until January
30, 2007.

      Subject to applicable cure periods, amounts borrowed under the New Credit
Facility are subject to acceleration upon certain events of default, including:
(i) any failure to pay when due any amount we owe under the New Credit Facility;
(ii) any material breach by us of any other covenant made to Laurus; (iii) any
misrepresentation, in any material respect, made by us to Laurus in the
documents governing the New Credit Facility; (iv) the institution of certain
bankruptcy and insolvency proceedings by or against us; (v) the entry of certain
monetary judgments against us that are not paid or vacated for a period of 30
business days; (vi) suspensions of trading of our common stock; (vii) any
failure to deliver shares of common stock upon exercise of the warrant; (viii)
certain defaults under agreements related to any of our other indebtedness; and
(ix) changes of control of our company. Substantial fees and penalties are
payable to Laurus in the event of a default.

      Our obligations under the New Credit Facility are secured by first
priority security interests in all of the assets of our company and all of the
assets of our GreenMan Technologies of Minnesota, Inc. and GreenMan Technologies
of Iowa, Inc. subsidiaries, as well as by pledges of the capital stock of those
subsidiaries.

Additional Steps to Increase Liquidity

      Over the last several years, we have funded portions of our operating cash
flow from sales of equity securities, loans from officers and related parties,
increased borrowings and extending payments to our vendors.


                                       12
<PAGE>

      In November 2000, a director loaned us $200,000 under an unsecured
promissory note which bore interest at 12% per annum with interest due monthly
and the principal due in November 2001. In June 2001 and again in June 2004, the
director agreed to extend the maturity of this note until the earlier of when
all amounts due under the Laurus credit facility have been repaid or June 30,
2007. On August 24, 2006, the director converted the $200,000 of principal and
$76,445 of accrued interest into 953,259 unregistered shares of common stock at
a price of $.29 which was the closing price of our stock on the date of
conversion.

      In addition, during the period of January to June 2006, another director
loaned us $155,000 under the terms of three unsecured promissory notes which
bear interest at 10% per annum with interest with principal due during periods
ranging from June 30, 2006 through September 30, 2006. On April 12, 2006, the
director agreed in lieu of being repaid in cash at maturity to convert $76,450
(including interest of $1,450) into 273,035 shares of unregistered common stock
at a price of $.28 which was the closing price of our stock on the date of
conversion. In addition, on June 5, 2006 the director agreed to convert $15,226
(including interest of $226) into 42,295 shares of unregistered common stock at
a price of $.36 which was the closing price of our stock on the date of
conversion.

Operating Performance Enhancements

      Historically, our tire shredding operations were able to recover and sell
approximately 60% of a processed tire with the balance disposed of as waste wire
residual (cross-contaminated rubber and steel) at a significant cost. During the
past several years we have purchased secondary equipment for our Iowa and
Minnesota facilities to further process the waste wire residual into saleable
components of rubber and steel that not only provide new sources of revenue but
also significantly reduced our residual disposal costs.

      During the third quarter of fiscal 2006, we initiated a $950,000 equipment
upgrade to our Des Moines, Iowa processing facility installing new fine grind
crumb rubber processing equipment. The equipment became operational during
September 2006. This new equipment is expected to increase overall production
capacity by over 8 million pounds per year to over 20 million pounds of crumb
rubber capacity. Approximately $450,000 of the initiative was funded by a long
term loan from the Iowa Department of Natural Resources with the balance of the
project funded through internally generated cash flow and Iowa's line of credit.
The Iowa line of credit was subsequently paid off in conjunction with our June
2006 Laurus refinancing.

Effects of Inflation and Changing Prices

      Generally, we are exposed to the effects of inflation and changing prices.
Primarily because the largest component of our collection and disposal costs is
transportation, we have been adversely affected by the significant increases in
the cost of fuel. Additionally, because we rely on floating-rate debt for
certain financing arrangements, rising interest rates have had a negative effect
on our performance.

      Based on our fiscal 2007 operating plan, available working capital,
revenues from operations and anticipated availability under our working capital
line of credit with Laurus, we believe we will be able to satisfy our cash
requirements through the third quarter of fiscal 2008 at which time our Laurus
principal payments increase substantially. If we are unable to obtain additional
financing or restructure our remaining principal payments with Laurus, our
ability to maintain our current level of operations could be materially and
adversely affected and we may be required to adjust our operating plans
accordingly.

Off-Balance Sheet Arrangements

      We lease various facilities and equipment under cancelable and
non-cancelable short and long term operating leases which are described in
Footnote 8 to the Audited Consolidated Financial Statements contained in our
annual report on Form 10-KSB.

Cautionary Statement

      Information contained or incorporated by reference in this document
contains contains forward-looking statements regarding future events and the
future results of GreenMan Technologies, Inc. within the meaning of the Private
Securities Litigation Reform Act of 1995, and are based on current expectations,
estimates, forecasts, and projections and the beliefs and assumptions of our
management. Words such as "expect," "anticipate," "target," "goal," "project,"
"intend," "plan," "believe," "seek," "estimate," "will," "likely," "may,"
"designed," "would," "future," "can," "could" and other similar expressions that
are predictions of or indicate future events and trends or which do not relate
to historical matters are intended to identify such forward-looking statements.
These statements are based on management's current expectations and beliefs and
involve a number of risks, uncertainties, and assumptions that are difficult to
predict; consequently actual results may differ materially from those projected,
anticipated, or implied.


                                       13
<PAGE>

Factors That May Affect Future Results

Risks Related to our Business

We have lost money in the last sixteen consecutive quarters and may need
additional working capital if we do not return to sustained profitability, which
if not received, may force us to curtail operations.

      We have incurred substantial losses from operations over 15 of the past 16
consecutive quarters. As of September 30, 2006, we had $639,014 in cash and cash
equivalents and a working capital deficiency of $3,989,555 of which $3,414,834
or 86% of the total is associated with our discontinued Georgia operations. We
understand our continued existence is dependent on our ability to generate
positive operating cash flow and achieve profitable status on a sustained basis.
We believe our efforts to achieve these goals have been positively impacted by
the June 30, 2006 restructuring of our Laurus Credit facility as well as our
divestiture of historically unprofitable operations. However, in the fourth
quarter of fiscal 2008, our principal payments due Laurus are scheduled to
increase substantially. If we are unable to obtain additional financing or
restructure our remaining principal payments with Laurus, our ability to
maintain our current level of operations could be materially and adversely
affected and we may be required to adjust our operating plans accordingly.

The delisting of our common stock by the American Stock Exchange could
substantially limit our stock's liquidity and impair our ability to raise
capital.

      Our common stock ceased trading on the American Stock Exchange on June 15,
2006 and was delisted by the Exchange on July 6, 2006 as result of our failure
to maintain stockholder's equity in excess of $4 million as required by the
Exchange's Company Guide when a company has incurred losses in three of the four
most recent fiscal years. During the period of June 15 through June 20, 2006 we
were traded on the Pink Sheet until June 21, 2006 when we began trading on the
Over-The-Counter-Bulletin-Board under the symbol "GMTI". We believe the
delisting could substantially limit our stock's liquidity and impair our ability
to raise capital.

We have substantial indebtedness to Laurus Master Fund secured by substantially
all of our assets. If an event of default occurs under the secured notes issued
to Laurus, Laurus may foreclose on our assets and we may be forced to curtail or
cease our operations or sell some or all of our assets to repay the notes. We
have not yet completed a required registration statement of shares underlying
the Laurus warrants and have received a waiver from Laurus of any defaults until
January 31, 2007.

      On June 30, 2006, we entered into a $16 million amended and restated
credit facility with Laurus (the "New Credit Facility"). The New Credit Facility
consists of a $5 million non-convertible secured revolving note and an $11
million secured non-convertible term note. Unlike the terms of the June 2004
credit facility with Laurus, the New Credit Facility is not convertible into
shares of our common stock.

      Subject to certain grace periods, the notes and agreements provide for the
following events of default (among others):

      o     failure to pay interest and principal when due;

      o     an uncured breach by us of any material covenant, term or condition
            in any of the notes or related agreements;

      o     a breach by us of any material representation or warranty made in
            any of the notes or in any related agreement;

      o     any money judgment or similar final process is filed against us for
            more than $50,000 that remains unvacated, unbonded or unstayed for a
            period of 30 business days;

      o     any form of bankruptcy or insolvency proceeding is instituted by or
            against us;

      o     suspension of our common stock from our principal trading market for
            five consecutive days or five days during any ten consecutive days;
            and

      o     the occurrence of a change in control of our ownership.

      In the event of a future default under our agreements with Laurus, Laurus
may enforce its rights as a secured party and we may lose all or a portion of
our assets, be forced to materially reduce our business activities or cease
operations.


                                       14
<PAGE>

We will require additional funding to grow our business, which funding may not
be available to us on favorable terms or at all. If we do not obtain funding
when we need it, our business will be adversely affected. In addition, if we
have to sell securities in order to obtain financing, the rights of our current
holders may be adversely affected.

      We will have to seek additional outside funding sources to satisfy our
future financing demands if our operations do not produce the level of revenue
we require to maintain and grow our business. We cannot assure you that outside
funding will be available to us at the time that we need it and in the amount
necessary to satisfy our needs, or, that if such funds are available, they will
be available on terms that are favorable to us. If we are unable to secure
financing when we need it, our business will be adversely affected and we may
need to discontinue some or all of our operations. If we have to issue
additional shares of common stock or securities convertible into common stock in
order to secure additional funding, our current stockholders will experience
dilution of their ownership of our shares. In the event that we issue securities
or instruments other than common stock, we may be required to issue such
instruments with greater rights than those currently possessed by holders of our
common stock.

Improvement in our business depends on our ability to increase demand for our
products and services.

      Adverse events or economic or other conditions affecting markets for our
products and services, potential delays in product development, product and
service flaws, changes in technology, changes in the regulatory environment and
the availability of competitive products and services are among a number of
factors that could limit demand for our products and services.

Our business is subject to extensive and rigorous government regulation; failure
to comply with applicable regulatory requirements could substantially harm our
business.

      Our tire recycling activities are subject to extensive and rigorous
government regulation designed to protect the environment. The establishment and
operation of plants for tire recycling are subject to obtaining numerous permits
and compliance with environmental and other government regulations. The process
of obtaining required regulatory approvals can be lengthy and expensive. The
Environmental Protection Agency and comparable state and local regulatory
agencies actively enforce environmental regulations and conduct periodic
inspections to determine compliance with government regulations. Failure to
comply with applicable regulatory requirements can result in, among other
things, fines, suspensions of approvals, seizure or recall of products,
operating restrictions, and criminal prosecutions. Furthermore, changes in
existing regulations or adoption of new regulations could impose costly new
procedures for compliance, or prevent us from obtaining, or affect the timing
of, regulatory approvals.

The market in which we operate is highly competitive, fragmented and
decentralized and our competitors may have greater technical and financial
resources.

      The market for our services is highly competitive, fragmented and
decentralized. Many of our competitors are small regional or local businesses.
Some of our larger competitors may have greater financial and technical
resources than we do. As a result, they may be able to adapt more quickly to new
or emerging technologies and changes in customer requirements, or to devote
greater resources to the promotion and sale of their services. Competition could
increase if new companies enter the markets in which we operate or our existing
competitors expand their service lines. These factors may limit or prevent any
further development of our business.

Our success depends on the retention of our senior management and other key
personnel.

      Our success depends largely on the skills, experience and performance of
our senior management. The loss of any key member of senior management could
have a material adverse effect on our business, financial condition and results
of operations.

Seasonal factors may affect our quarterly operating results.

      Seasonality may cause our total revenues to fluctuate. We typically
process fewer tires during the winter and experience a more pronounced volume
reduction in severe weather conditions. In addition, a majority of our crumb
rubber is used for playground and athletic surfaces, running tracks and
landscaping/groundcover applications which are typically installed during the
warmer portions of the year. Similar seasonal or other patterns may develop in
our business.


                                       15
<PAGE>

Inflation and changing prices may hurt our business.

      Generally, we are exposed to the effects of inflation and changing prices.
Primarily because the largest component of our collection and disposal costs is
transportation, we have been adversely affected by significant increases in the
cost of fuel. Additionally, because we rely on floating-rate debt for certain
financing arrangements, rising interest rates have had a negative effect on our
financial performance.

If we acquire other companies or businesses, we will be subject to risks that
could hurt our business.

      A significant part of our business strategy entails future acquisitions,
or significant investments in, businesses that offer complementary products and
services. Promising acquisitions are difficult to identify and complete for a
number of reasons. Any acquisitions completed by our company may be made at a
premium over the fair value of the net assets of the acquired companies, and
competition may cause us to pay more for an acquired business than its long-term
fair market value. There can be no assurance that we will be able to complete
future acquisitions on terms favorable to us or at all. In addition, we may not
be able to integrate future acquired businesses, at all or without significant
distraction of management from our ongoing business. In order to finance
acquisitions, it may be necessary for us to issue shares of our capital stock to
the sellers of the acquired businesses and/or to seek additional funds through
public or private financings. Any equity or debt financing, if available at all,
may be on terms which are not favorable to us and, in the case of an equity
financing or the use of our stock to pay for an acquisition, may result in
dilution to our existing stockholders.

As we grow, we are subject to growth related risks.

      We are subject to growth-related risks, including capacity constraints and
pressure on our internal systems and personnel. In order to manage current
operations and any future growth effectively, we will need to continue to
implement and improve our operational, financial and management information
systems and to hire, train, motivate, manage and retain employees. We may be
unable to manage such growth effectively. Our management, personnel or systems
may be inadequate to support our operations, and we may be unable to achieve the
increased levels of revenue commensurate with the increased levels of operating
expenses associated with this growth. Any such failure could have a material
adverse impact on our business, operations and prospects. In addition, the cost
of opening new facilities and the hiring of new personnel for those facilities
could significantly decrease our profitability, if the new facilities do not
generate sufficient additional revenue.

If we fail to maintain an effective system of internal controls, we may not be
able to accurately report our financial results or prevent fraud. As a result,
current and potential shareholders could lose confidence in our financial
reporting, which would harm our business and the trading price of our stock.

      Effective internal controls are necessary for us to provide reliable
financial reports and effectively minimize the possibility of fraud and its
impact on our company. If we cannot continue to provide financial reports or
effectively minimize the possibility of fraud, our business reputation and
operating results could be harmed.

      In addition, we will be required as currently proposed, to include the
management and auditor reports on internal controls as part of our annual report
for the fiscal year ending September 30, 2008, pursuant to Section 404 of the
Sarbanes-Oxley Act of 2002, which requires, among other things, that we maintain
effective internal controls over financial reporting and procedures. In
particular, we must perform system and process evaluation and testing of our
internal controls over financial reporting to allow management and our
independent registered public accounting firm to report on the effectiveness of
our internal controls over financial reporting, as required by Section 404. Our
compliance with Section 404 will require that we incur substantial accounting
expense and expend significant management efforts.

      We cannot be certain as to the timing of the completion of our evaluation
and testing, the timing of any remediation actions that may be required or the
impact these may have on our operations. Furthermore, there is no precedent
available by which to measure compliance adequacy. If we are not able to
implement the requirements relating to internal controls and all other
provisions of Section 404 in a timely fashion or achieve adequate compliance
with these requirements or other requirements of the Sarbanes-Oxley Act, we
might become subject to sanctions or investigation by regulatory authorities
such as the Securities and Exchange Commission or any securities exchange on
which we may be trading at that time, which action may be injurious to our
reputation and affect our financial condition and decrease the value and
liquidity of our common stock.


                                       16
<PAGE>

Risks Related to the Securities Market

Our stock price may be volatile, which could result in substantial losses for
our shareholders.

     Our common stock is thinly traded and an active public market for our stock
may not develop. Consequently, the market price of our common stock may be
highly volatile. Additionally, the market price of our common stock could
fluctuate significantly in response to the following factors, some of which are
beyond our control:

      o     we are now traded on the OTC Bulletin Board;

      o     changes in market valuations of similar companies;

      o     announcements by us or by our competitors of new or enhanced
            products, technologies or services or significant contracts,
            acquisitions, strategic relationships, joint ventures or capital
            commitments;

      o     regulatory developments;

      o     additions or departures of senior management and other key
            personnel;

      o     deviations in our results of operations from the estimates of
            securities analysts; and

      o     future issuances of our common stock or other securities.

We have options and warrants currently outstanding. Exercise of these options
and warrants, and conversions of these promissory notes will cause dilution to
existing and new shareholders. Future sales of common stock by Laurus and our
existing stockholders could result in a decline in the market price of our
stock.

      As of September 30, 2006, we have options and warrants to purchase
approximately 10,942,959 shares of common stock outstanding. The exercise of our
options and warrants will cause additional shares of common stock to be issued,
resulting in dilution to investors and our existing stockholders. As of
September 30, 2006, approximately 13.6 million shares of our common stock were
eligible for sale in the public market. This represents approximately 61 percent
of our outstanding shares of common stock. We are required to register
additional shares of common stock owned by certain stockholders. After the
effective date of the registration statement for those shares, approximately
19.6 million shares of our common stock will be eligible for resale in the
public market. Sales of a significant number of shares of our common stock in
the public market could result in a decline in the market price of our common
stock, particularly in light of the illiquidity and low trading volume in our
common stock

Our directors, executive officers and principal stockholders own a significant
percentage of our shares, which will limit your ability to influence corporate
matters.

      Our directors, executive officers and other principal stockholders owned
approximately 35 percent of our outstanding common stock as of September 30,
2006. Accordingly, these stockholders could have a significant influence over
the outcome of any corporate transaction or other matter submitted to our
stockholders for approval, including mergers, consolidations and the sale of all
or substantially all of our assets and also could prevent or cause a change in
control. The interests of these stockholders may differ from the interests of
our other stockholders. In addition, limited number of shares held in public
float effect the liquidity of our common stock. Third parties may be discouraged
from making a tender offer or bid to acquire us because of this concentration of
ownership.

We have never paid dividends on our capital stock, and we do not anticipate
paying any cash dividends in the foreseeable future.

      We have paid no cash dividends on our capital stock to date and we
currently intend to retain our future earnings, if any, to fund the development
and growth of our businesses. In addition, our agreements with Laurus prohibit
the payment of cash dividends. As a result, capital appreciation, if any, of our
common stock will be shareholders' sole source of gain for the foreseeable
future.

Anti-takeover provisions in our charter documents and Delaware law could
discourage potential acquisition proposals and could prevent, deter or delay a
change in control of our company.

      Certain provisions of our Restated Certificate of Incorporation and
By-Laws could have the effect, either alone or in combination with each other,
of preventing, deterring or delaying a change in control of our company, even if
a change in control would be beneficial to our stockholders. Delaware law may
also discourage, delay or prevent someone from acquiring or merging with us.


                                       17
<PAGE>

Environmental Liability

      There are no known material environmental violations or assessments.

Recent Accounting Pronouncements

      SFAS 123(R) - In December 2004, the Financial Accounting Standards Board
("FASB") issued SFAS No. 123(R) (revised 2004), Share-Based Payment, which is a
revision of SFAS No. 123, Accounting for Stock-Based Compensation. SFAS No.
123(R) supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees,
and amends SFAS No. 95, Statement of Cash Flows. Generally, the approach in SFAS
No. 123(R) is similar to the approach described in SFAS No. 123. However, SFAS
No. 123(R) requires all share-based payments to employees, including grants of
employee stock options, to be recognized in the income statement based on their
fair values. Pro forma disclosure is not an alternative. SFAS No. 123(R) must be
adopted no later than the first interim period for fiscal years beginning after
December 15, 2005. We adopted SFAS No. 123(R) effective on October 1, 2006.

      SFAS No. 123(R) permits public companies to adopt its requirements using
one of two methods: a "modified prospective" approach or a "modified
retrospective" approach. Under the modified prospective approach, compensation
cost is recognized beginning with the effective date based on the requirements
of SFAS 123(R) for all share-based payments granted after the effective date and
the requirements of SFAS No. 123(R) for all awards granted to employees prior to
the effective date of SFAS No. 123(R) that remain unvested on the effective
date. The modified retrospective approach includes the requirements of the
modified prospective approach but also permits entities to restate based on the
amounts previously recognized under SFAS No. 123 for purposes of pro forma
disclosures either for all prior periods presented or prior interim periods of
the year of adoption. We are evaluating which method to adopt.

      As permitted by SFAS No. 123, we currently account for the share-based
payments to employees using APB Opinion No. 25's intrinsic value method and, as
such, generally recognize no compensation cost for employee stock options.
However, grants of stock to employees have always been recorded at fair value as
required under existing accounting standards. We do not expect the adoption of
SFAS No. 123(R) to have a material effect on our results of operations. However,
our results of operations could be materially affected by share-based payments
issued after the adoption of SFAS 123(R). The impact of the adoption of SFAS No.
123(R) cannot be predicted at this time because it will depend on levels of
share-based payments granted in the future. The unamortized compensation costs
at September 30, 2006 was $117,690.

      SFAS No. 123(R) also requires the benefits of tax deductions in excess of
recognized compensation cost to be reported as a financing cash flow, rather
than an operating cash flow under current accounting literature. Since we do not
have the benefit of tax deductions in excess of recognized compensation cost,
because of its net operating loss position, the change will have no immediate
impact on the consolidated financial statements.

      SFAS No. 154 - In May 2005, FASB issued SFAS No. 154 "Accounting Changes
and Error Corrections", to amend Opinion 20 and FASB No. 3 and changes the
requirements for the accounting for and reporting of a change in accounting
principle. This Statement provides guidance on the accounting for and reporting
of accounting changes and error corrections. It establishes, unless
impracticable, retrospective application as the required method for reporting a
change in accounting principle in the absence of explicit transition
requirements specific to the newly adopted accounting principle. This Statement
also provides guidance for determining whether retrospective application of a
change in accounting principle is impracticable and for reporting a change when
retrospective application is impracticable. The correction of an error in
previously issued financial statements is not an accounting change. However, the
reporting of an error correction involves adjustments to previously issued
financial statements similar to those generally applicable to reporting an
accounting change retrospectively. Therefore, the reporting of a correction of
an error by restating previously issued financial statements is also addressed
by this Statement. The effective date for accounting changes and correction of
errors made in fiscal years beginning after December 15, 2005. This
pronouncement is not expected to have a material effect on our financial
statements.


                                       18
<PAGE>

      SFAS No. 155 - In February 2006, FASB issued SFAS No. 155, "Accounting for
Certain Hybrid Financial Instruments" as an amendment to SFAS No. 133 and 140.
This Statement:

      a. Permits fair value re-measurement for any hybrid financial instrument
      that contains an embedded derivative that otherwise would require
      bifurcation;

      b. Clarifies which interest-only strips and principal-only strips are not
      subject to the requirements of Statement 133;

      c. Establishes a requirement to evaluate interests in securitized
      financial assets to identify interests that are freestanding derivatives
      or that are hybrid financial instruments that contain an embedded
      derivative requiring bifurcation;

      d. Clarifies that concentrations of credit risk in the form of
      subordination are not embedded derivatives; and

      e. Amends Statement 140 to eliminate the prohibition on a qualifying
      special-purpose entity from holding a derivative financial instrument that
      pertains to a beneficial interest other than another derivative financial
      instrument.

      This Statement is effective for all financial instruments acquired or
issued after the beginning of an entity's first fiscal year that begins after
September 15, 2006. We do not expect the adoption of SFAS 155 to have a material
effect on our consolidated financial position or results of operations.

      SFAS No. 157 - In September 2006, the FASB issue SFAS No. 157, "Fair Value
Measurement" ("SFAS 157"). SFAS 157 defines fair value, establishes a framework
for measuring fair value and expands disclosures about fair value measurements.
SFAS 157 is effective for financial statements issued for fiscal years beginning
after November 17, 2007 and interim periods within those fiscal years. We are
evaluating the impact of adopting SFAS 157 on our consolidated financial
position, results of operations and cash flows.

      FIN No. 48 - In July 2006, the FASB issued Interpretation No. 48,
"Accounting for Uncertain Tax Positions"; an Interpretation of SFAS No. 109
("FIN 48"), which clarifies the criteria for recognition and measurement of
benefits from uncertain tax positions. Under FIN 48, an entity should recognize
a tax benefit when it is "more-likely-than-not", based on the technical merits,
that the position would be sustained upon examination by a taxing authority. The
amount to be recognized, given the "more likely than not" threshold was passed,
should be measured as the largest amount of tax benefit that is greater than 50
percent likely of being realized upon ultimate settlement with a taxing
authority that has full knowledge of all relevant information. Furthermore, any
change in the recognition, derecognition or measurement of a tax position should
be recognized in the interim period in which the change occurs. We do not expect
the adoption of FIN 48 to have a material effect on our consolidated financial
position or results of operations.

      Sarbanes-Oxley Section 404 - The Securities and Exchange Commission issued
two releases on August 6, 2006 to grant smaller public companies and many
foreign private issuers further relief from compliance with Section 404 of the
Sarbanes-Oxley Act of 2002. The Commission is proposing to grant relief to
smaller public companies by extending the date by which non-accelerated filers
must start providing a report by management assessing the effectiveness of the
company's internal control over financial reporting. The initial compliance date
for these companies would be moved from fiscal years ending on or after July 15,
2007, until fiscal years ending on or after Dec. 15, 2007. The Commission also
proposes to extend the date by which non-accelerated filers must begin to comply
with the Section 404(b) requirement to provide an auditor's attestation report
on internal control over financial reporting in their annual reports. This
deadline would be moved to the first annual report for a fiscal year ending on
or after Dec. 15, 2008. This proposed extension would result in all
non-accelerated filers being required to complete only the management's portion
of the internal control requirements in their first year of compliance with the
requirements. This proposal is intended to provide cost savings and efficiency
opportunities to smaller public companies and to assist them as they prepare to
comply fully with Section 404's reporting requirements. This proposed extension
will provide these issuers and their auditors an additional year to consider,
and adapt to, the changes in Auditing Standard No. 2 that the Commission and the
Public Company Accounting Oversight Board intend to make, as well as the
guidance for management the Commission intends to issue, to improve the
efficiency of the Section 404(b) auditor attestation report process.

Item 7. Financial Statements

      For information required with respect to this Item 7, see "Consolidated
Financial Statements" on pages F-1 through F-27 of this report.

Item 8. Changes In and Disagreements With Accountants on Accounting and
        Financial Disclosure

      None


                                       19
<PAGE>

Item 8A. 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 September 30, 2006. 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 September 30, 2006, 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 Commission'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 September 30, 2006 that has materially affected, or is reasonably
likely to materially affect, our internal control over financial reporting.

PART III

Item 9. Directors, Executive Officers and Key Employees

Our directors and executive officers are as follows:

Name                               Age             Position
----                               ---             --------

Maurice E. Needham .............   66     Chairman of the Board of Directors
Lyle Jensen.....................   56     Chief Executive Officer; President;
                                          Director
Charles E. Coppa ...............   43     Chief Financial Officer; Treasurer;
                                          Secretary
Dr. Allen Kahn..................   85     Director
Lew F. Boyd ....................   61     Director
Nicholas DeBenedictis...........   47     Director

      Each director is elected for a period of one year at the annual meeting of
stockholders and serves until his or her successor is duly elected by the
stockholders. The officers are appointed by and serve at the discretion of the
Board of Directors. During fiscal 2006, the Board agreed that each outside
director would receive $2,500 per quarter in recognition of the increased
frequency of telephonic Board meetings. Previously, outside directors received
$2,500 per meeting attended. In addition, during fiscal 2006, the Compensation
Committee agreed to discontinue future option grants made to outside directors
pursuant the Non-Employee Director Stock Option Plan.

      We have established an Audit Committee consisting of Messrs. DeBenedictis
(Chair) and Boyd and Dr. Kahn, and a Compensation Committee consisting of
Messrs. Boyd (Chair) and DeBenedictis. Our Board of Directors has determined
that Mr. DeBenedicits is an "audit committee financial expert" within the
meaning given that term by Item 401(e) of Regulation S-B and that Mr.
DeBenedictis is "independent" within the meaning given to that term by Item
7(d)(3)(iv) of Schedule 14A under the Exchange Act. On April 12, 2006 Mr. Jensen
resigned as Chair of the Audit Committee and as a member of the Compensation
Committee and Mr. DeBenedictis became Chair of the Audit Committee and joined
the Compensation Committee.

      MAURICE E. NEEDHAM has been Chairman since June 1993. From June 1993 to
July 21, 1997, Mr. Needham also served as Chief Executive Officer. He has also
served as a Director of Comtel Holdings, an electronics contract manufacturer
since April 1999. He previously served as Chairman of Dynaco Corporation, a
manufacturer of electronic components which he founded in 1987. Prior to 1987,
Mr. Needham spent 17 years at Hadco Corporation, a manufacturer of electronic
components, where he served as President, Chief Operating Officer and Director.

      LYLE JENSEN has been a Director since May 2002. On April 12, 2006, Mr.
Jensen became our Chief Executive Officer. Mr. Jensen previously was Executive
Vice President/Chief Operations Officer of Auto Life Acquisition Corporation, an
automotive aftermarket leader of fluid maintenance equipment. Prior to that he
was a Business Development and Operations consultant after holding executive
roles as Chief Executive Officer and minority owner of Comtel and Corlund
Electronics, Inc. He served as President of Dynaco Corporation from 1988 to
1997; General Manager of Interconics from 1984 to 1988 and various financial and
general management roles within Rockwell International from 1973 to 1984.


                                       20
<PAGE>

      CHARLES E. COPPA has served as Chief Financial Officer, Treasurer and
Secretary since March 1998. From October 1995 to March 1998, he served as
Corporate Controller. Mr. Coppa was Chief Financial Officer and Treasurer of
Food Integrated Technologies, a publicly-traded development stage company from
July 1994 to October 1995. Prior to joining Food Integrated Technologies, Inc.,
Mr. Coppa served as Corporate Controller for Boston Pacific Medical, Inc., a
manufacturer and distributor of disposable medical products, and Corporate
Controller for Avatar Technologies, Inc., a computer networking company.

      ALLEN KAHN, M.D., has been a Director since March 2000. Dr. Kahn operated
a private medical practice in Chicago, Illinois, which he founded in 1953 until
his retirement in October 2002. Dr. Kahn has been actively involved as an
investor in "concept companies" since 1960. From 1965 through 1995 Dr. Kahn
served as a member of the Board of Directors of Nease Chemical Company
(currently German Chemical Company), Hollymatic Corporation and Pay Fone Systems
(currently Pay Chex, Inc.).

      LEW F. BOYD has been a Director since August 1994. Mr. Boyd is the founder
and since 1985 has been the Chief Executive Officer of Coastal International,
Inc., an international business development and executive search firm,
specializing in the energy and environmental sectors. Previously, Mr. Boyd had
been Vice President/General Manager of the Renewable Energy Division of Butler
Manufacturing Corporation and had served in academic administration at Harvard
and Massachusetts Institute of Technology.

      NICHOLAS DEBENEDICTIS has been a Director since September 2005. Mr.
DeBenedictis has been an independent investment advisor for the past nine years
and has over 16 years of experience in the financial markets and securities
business including positions with E.W. Smith Securities, Smith Barney, and
Janney Montgomery Scott.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

      Section 16(a) of the Exchange Act requires our directors and executive
officers, and persons who own more than 10% of our common stock, to file with
the Securities and Exchange Commission initial reports of ownership of our
common stock and other equity securities on Form 3 and reports of changes in
such ownership on Form 4 and Form 5. Officers, directors and 10% stockholders
are required by the Securities and Exchange Commission regulations to furnish us
with copies of all Section 16(a) forms they file.

      To the best of management's knowledge, based solely on review of the
copies of such reports furnished to us during and with respect to, our most
recent fiscal year, and written representation that no other reports were
required, all Section 16(a) filing requirements applicable to our officers and
directors have been complied with.

Code of Ethics

      On May 28, 2005, we adopted a code of ethics which applies to our
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions. We have posted
our code of ethics on our corporate website, www.greenman.biz.

Item 10. Executive Compensation

      The following table summarizes the compensation paid or accrued for
services rendered during the fiscal years ended September 30, 2006, 2005 and
2004, to our Chief Executive Officer, Former Chief Executive Officer and our
Chief Financial Officer. We did not grant any restricted stock awards or stock
appreciation rights or make any long-term plan payouts during the periods
indicated.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                                 Long-Term
                                                                                               Compensation
                                             Annual Compensation                                Securities
                                             -------------------             Other Annual       Underlying       All Other
 Name and Principal Position       Fiscal Year      Salary        Bonus     Compensation (1)    Options (2)   Compensation (3)
 ---------------------------       -----------      ------        -----     ----------------    -----------   ----------------

<S>                                   <C>         <C>           <C>             <C>                <C>              <C>
Lyle Jensen ................          2006        $ 81,250      $43,000         $ 6,683            500,000          $  --
Chief Executive Officer

Robert H. Davis ............          2006        $134,167      $  --           $13,186               --            $102,252
Chief Executive Officer               2005         230,000         --            23,802               --               --
(Resigned April 12, 2006)             2004         230,000         --            21,468               --               --

Charles E. Coppa ...........          2006        $145,000      $48,000         $ 8,396            137,000          $  --
Chief Financial Officer               2005         130,000         --             8,396               --               --
                                      2004         130,000         --            22,906             60,000             --
</TABLE>


                                       21
<PAGE>

(1)   Represents payments made to or on behalf of Messrs. Jensen, Davis and
      Coppa for health, life and disability insurance and auto allowances.
(2)   The fiscal 2006 grants represent options granted to Mr. Jensen in April
      2006 and Mr. Coppa in June 2006. The fiscal 2004 grant represents options
      granted to Mr. Coppa in August 2004 and were subsequently cancelled in
      March 2005.
(3)   The other compensation paid to Mr. Davis represents seven months of
      severance payments made pursuant to an agreement underwhich Mr. Davis
      receives twelve months salary and health insurance reimbursement
      commencing May 2006 and ending April 2007.

Options/SAR Grants Table

      The following table sets forth each grant of stock options made during the
year ended September 30, 2006 held by the executives named in the Summary
Compensation Table above.

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
                                                                                             Market
                                         Number of            % of Total      Exercise       Price
                                         Securities         Options Granted     Price       On Date
                                         Underlying         to Employees in      Per        of Grant      Expiration
Name                                  Options Granted       the Fiscal Year     Share      Per Share         Date
----                                  ---------------       ---------------     -----      ---------         ----

<S>                                       <C>                    <C>            <C>          <C>           <C>
Lyle Jensen.................              500,000                53.8%          $0.28        $0.28         4/12/16

Robert H. Davis.............                 --                   --             --            --             --

Charles E. Coppa............              137,000                14.8%          $0.36        $0.36          6/5/16
</TABLE>

      Options granted have a ten year term and vest at an annual rate of 20%
over a five-year period from the date of grant.

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values

      The following table sets forth information concerning the value of
unexercised options as of September 30, 2006 held by the executives named in the
Summary Compensation Table above.

<TABLE>
<CAPTION>
                                       Shares                     Number of Securities Underlying         Value of Unexercised
                                       Acquired        Value            Unexercised Options               In-the-Money Options
                                   on Exercise (1)    Realized       at September 30, 2006 (2)           at September 30, 2006
                                   ---------------    --------       -------------------------           ---------------------
Name                                                              Exercisable     Unexercisable      Exercisable    Unexercisable
----                                                              -----------     -------------      -----------    -------------

<S>                                      <C>             <C>         <C>             <C>                 <C>           <C>
Lyle Jensen.................             --              $--         28,000          505,500             $--           $--
Robert H. Davis ............             --               --           --               --               $--           $--
Charles E. Coppa ...........             --               --        366,000          138,500             $--           $--
</TABLE>

(1)   There were no options exercised during the fiscal year ended September 30,
      2006.

(2)   The options granted to the executive officers became exercisable
      commencing February 20, 2003 in the case of Mr. Jensen and December 30,
      1997 in the case of Mr. Coppa. In the case of Mr. Jensen, 6,000 options
      granted under the 1996 Non-Employee Director plan vested immediately upon
      grant and have a term of 10 years. All other options including those
      granted to Mr. Coppa vest at an annual rate of 20% and have a 10 year
      term.

Employment Agreements

      On April 12, 2006, we entered into a five-year employment agreement with
Mr. Jensen pursuant to which Mr. Jensen will receive a base salary of $195,000
per year. The agreement automatically renews for one additional year upon each
anniversary, unless notice of non-renewal is given by either party. We may
terminate the agreement without cause on 30 days' prior notice. The agreement
provides for payment of twelve months' salary and certain benefits as a
severance payment for termination without cause. Any increases in Mr. Jensen's
base salary will be made in the discretion of the Board of Directors upon the
recommendation of the Compensation Committee. Mr. Jensen also received a
relocation allowance of $23,603 and receives a car allowance of $600 per month.
Mr. Jensen has been granted a qualified option under our 2005 Stock Option Plan
to purchase 500,000 shares of our common stock with an exercise price of $.28
per share. The options vest at an annual rate of 20% over a five year period
from date of grant and have a ten year term.

      The agreement also provides for Mr. Jensen to be eligible to receive
incentive compensation based on (i) non-financial criteria which may be
established by the Board of Directors and (ii) upon a calculation of our annual
audited earnings before interest, taxes, depreciation and amortization
("EBITDA") as a percentage of our revenue, as follows:


                                       22
<PAGE>

                          EBITDA as
                         % of Revenue                Performance Incentive
                         ------------                ---------------------
Base:                   10.0 % or Less       None
Level I:                10.1% - 12.0%        10% of EBITDA dollars above Base
Level II:               12.1% - 15.0%        12% of EBITDA dollars above Base
Level III:                 > 15.0%           15% of EBITDA dollars above Base

      In fiscal 2006, Mr. Jensen received an incentive bonus of $43,000 based on
our performance from his date of hire to the fiscal year-end. In addition, Mr.
Jensen will be eligible to be awarded qualified options to purchase up to
100,000 additional shares of common stock annually, with the actual amounts
contingent on achieving certain levels of EBITDA performance. The right to
exercise all options will accelerate in full immediately prior to any
transaction or series of sequenced events in which all or substantially all of
our assets or common stock are sold to or merged with a third party or third
parties. In addition, upon signing of his employment agreement, Mr. Jensen
purchased 500,000 unregistered shares of our common stock at $.28 which was the
closing bid price of our common stock on the date the agreement was executed.

      In April 1999, we entered into a three-year employment agreement with Mr.
Davis pursuant to which Mr. Davis received a salary of $230,000 per annum. The
agreement automatically renewed for three additional years upon each
anniversary, unless notice of non-renewal is given by either party, and provided
for payment of twelve months salary as a severance payment for termination
without cause. The agreement also provided for Mr. Davis to receive incentive
compensation based on the following certain financial performance measures. No
bonus was payable for fiscal 2006, 2005 or 2004. On April 12, 2006, the Board of
Directors accepted Mr. Davis's resignation as President, Chief Executive Officer
and a member of the Board of Directors. Pursuant to the terms of his employment
agreement, Mr. Davis is to receive severance of 12 months salary plus benefits
starting May 1, 2006 (valued at $260,000) plus all accrued and unpaid vacation
(valued at $40,000).

      In June 1999, we entered into a two-year employment agreement with Mr.
Coppa pursuant to which Mr. Coppa received a salary of $130,000 per annum. In
July 2006, the Compensation Committee agreed to increase Mr. Coppa's base salary
to $150,000. The agreement automatically renews for two additional years upon
each anniversary, unless notice of non-renewal is given by either party. Any
increases or bonuses will be made at the discretion of our Board of Directors
upon the recommendation of the Compensation Committee. During fiscal 2006, the
Compensation Committee agreed to grant him a one-time $48,000 bonus. Mr. Coppa
used $20,000 (net of taxes) of his bonus to purchase 50,000 shares of
unregistered common stock from the company. The agreement provides for payment
of twelve months salary as a severance payment for termination without cause.

      In June 2003, we entered into a three-year employment agreement with Mr.
Needham pursuant to which Mr. Needham receives a salary of $90,000 per annum. In
July 2006, Mr. Needham agreed to a 30% reduction in his base salary in
recognition of on going efforts to reduce corporate overhead. The agreement
automatically renews for three additional years upon each anniversary, unless
notice of non-renewal is given by either party. Any increases or bonuses will be
made at the discretion of our Board of Directors upon the recommendation of the
Compensation Committee. The agreement provides for payment of twelve months
salary as a severance payment for termination without cause.

Stock Option Plans

      Our 1993 Stock Option Plan (the "2003 Plan") was established to provide
options to purchase shares of common stock to our employees, officers, directors
and consultants. In March 2001, our stockholders approved an increase to the
number of shares authorized under the 1993 Plan to 3,000,000 shares. The 1993
Plan expired on June 10, 2004.

      On March 18, 2005, our Board of Directors adopted the 2005 Stock Option
Plan (the "2005 Plan"), which was subsequently approved by our stockholders on
June 16, 2005. The 2005 Plan replaced the 1993 Plan. In April 2004, our Board
adopted a replacement stock option plan (the "2004 Plan") but did not submit it
for ratification by our stockholders. The 2004 Plan was terminated by our Board
on March 18, 2005, and all options granted under that plan have been terminated.
Options granted under the 2005 Plan may be either options intended to qualify as
"incentive stock options" under Section 422 of the Internal Revenue Code of
1986, as amended; or non-qualified stock options.

      Incentive stock options may be granted under the 2005 Plan to employees,
including officers and directors who are employees. Non-qualified options may be
granted to our employees, directors and consultants. The 2005 Plan is
administered by our Board of Directors, which has the authority to determine:

      o     the persons to whom options will be granted;

      o     the number of shares to be covered by each option;


                                       23
<PAGE>

      o     whether the options granted are intended to be incentive stock
            options;

      o     the manner of exercise; and

      o     the time, manner and form of payment upon exercise of an option.

      Incentive stock options granted under the 2005 Plan may not be granted at
a price less than the fair market value of our common stock on the date of grant
(or less than 110% of fair market value in the case of persons holding 10% or
more of our voting stock). Non-qualified stock options may be granted at an
exercise price established by our Board which may not be less than 85% of fair
market value of our shares on the date of grant. Current tax laws adversely
impact recipients of non-qualified stock options granted at less than fair
market value, however, we do not expect to make such grants. Incentive stock
options granted under the 2005 Plan must expire no more than ten years from the
date of grant, and no more than five years from the date of grant in the case of
incentive stock options granted to an employee holding 10% or more of our voting
stock.

      As of September 30, 2006, there were 1,032,356 options granted and
outstanding under the 1993 Plan of which 1,022,356 options were exercisable at
prices ranging from $0.38 to $1.80. During the year ended September 30, 2006,
929,000 options were granted under the 2005 Plan at prices ranging from $.28 to
$.36. No options were granted under the 2005 Plan during the fiscal year ended
September 30, 2005.

Non-Employee Director Stock Option Plan

      Our 1996 Non-Employee Director Stock Option Plan is intended to promote
our interests by providing an inducement to obtain and retain the services of
qualified persons who are not officers or employees to serve as members of our
Board of Directors. The Board of Directors has reserved 60,000 shares of common
stock for issuance under Non-Employee Director Stock Option Plan.

      Each person who was a member of the Board of Directors on January 24,
1996, and who was not an officer or employee, was automatically granted an
option to purchase 2,000 shares of common stock. In addition, after an
individual's initial election to the Board of Directors, any director who is not
an officer or employee and who continues to serve as a director will
automatically be granted on the date of the Annual Meeting of Stockholders an
additional option to purchase 2,000 shares of common stock. The exercise price
per share of options granted under the Non-Employee Director Stock Option Plan
is 100% of the fair-market value of the common stock on the business day
immediately prior to the date of the grant and each option is immediately
exercisable for a period of ten years from the date of the grant. During fiscal
2006, the Compensation Committee agreed to discontinue future option grants made
under the Non-Employee Director Stock Option Plan.

      As of September 30, 2006, options to purchase 38,000 shares of our common
stock have been granted under the 1996 Non-Employee Director Stock Option Plan,
of which 28,000 are outstanding and exercisable at prices ranging from $0.38 to
$1.95.

Employee Benefit Plan

      In August 1999, we implemented a Section 401(k) plan for all eligible
employees. Employees are permitted to make elective deferrals of up to 15% of
employee compensation and employee contributions to the 401(k) plan are fully
vested at all times. We may make discretionary contributions to the 401(k) plan
which become vested over a period of five years. We did not make any
discretionary contributions to the 401(k) plan during the fiscal years ended
September 30, 2006 and 2005.

Item 11. Security Ownership of Certain Beneficial Owners and Management and
         Related Stockholder Matters

      The following tables set forth certain information regarding beneficial
ownership of our common stock as of September 30, 2006:

      o     by each of our directors and executive officers;

      o     by all of our directors and executive officers as a group; and

      o     by each person (including any "group" as used in Section 13(d) of
            the Securities Exchange Act of 1934) who is known by us to own
            beneficially 5% or more of the outstanding shares of common stock.


                                       24
<PAGE>

      Unless otherwise indicated below, to the best of our knowledge, all
persons listed below have sole voting and investment power with respect to their
shares of common stock, except to the extent authority is shared by spouses
under applicable law. As of September 30, 2006, 21,408,966 shares of our common
stock were issued and outstanding.

Security Ownership of Management and Directors

                                        Number of Shares
                                          Beneficially        Percentage
               Name (1)                     Owned (2)        of Class (2)
               --------                     ---------        ------------
Dr. Allen Kahn (3).................        4,500,657             20.85%
Maurice E. Needham (4).............        2,401,204             10.68%
Charles E. Coppa (5)...............          752,928              3.46%
Nicholas DeBenedictis (6)..........          633,368              2.96%
Lyle Jensen (7)....................          563,022              2.63%
Lew F. Boyd (8)....................          394,127              1.83%

All officers and directors
as a group (6 persons).............        9,245,306             39.88%

Security Ownership of Certain Beneficial Owners

                                        Number of Shares      Percentage
               Name (1)                 Beneficially Owned     of Class
               --------                 ------------------     --------
Robert H. Davis (9) ...............          703,700            3.29%
Laurus Master Fund, Ltd. (10)......        1,068,307            4.99%

----------
(1)   Except as noted, each person's address is care of GreenMan Technologies,
      Inc., 12498 Wyoming Avenue South, Savage, Minnesota, 55378.
(2)   Pursuant to the rules of the Securities and Exchange Commission, shares of
      common stock that an individual or group has a right to acquire within 60
      days pursuant to the exercise of options or warrants are deemed to be
      outstanding for the purpose of computing the percentage ownership of such
      individual or group, but are not deemed to be outstanding for the purpose
      of computing the percentage ownership of any other person shown in the
      table.
(3)   Includes 181,033 shares of common stock issuable pursuant to immediately
      exercisable stock options and warrants.
(4)   Includes 1,072,865 shares of common stock issuable pursuant to immediately
      exercisable stock options and warrants. Also includes 59,556 shares of
      common stock owned by Mr. Needham's wife.
(5)   Includes 366,000 shares of common stock issuable pursuant to immediately
      exercisable stock options.
(6)   Includes 285,000 shares of common stock owned by Mr. DeBenedictis's wife.
(7)   Includes 28,000 shares of common stock issuable pursuant to immediately
      exercisable stock options.
(8)   Includes 124,894 shares of common stock issuable pursuant to immediately
      exercisable stock options.
(9)   Mr. Davis's address is 1501 W. Gladstone Street, Azusa, California, 91702.
(10)  Laurus holds warrants to purchase up to 6,000,000 shares of common stock
      that are exercisable (subject to the following sentence) at an exercise
      price of $.01 per share. The warrants are not exercisable, however, to the
      extent that (a) the number of shares of our common stock held by Laurus
      and (b) the number of shares of our common stock issuable upon exercise of
      the warrant would result in beneficial ownership by Laurus of more than
      4.99% of our outstanding shares of common stock. Laurus may waive these
      provisions, or increase or decrease that percentage, with respect to the
      warrant on 61 days' prior notice to us, or without notice if we are in
      default under our credit facility. Unless and until Laurus waives these
      provisions, then Laurus beneficially owns 1,068,307 shares of our common
      stock issuable pursuant to underlying warrant. Laurus's address is 825
      Third Avenue, 14th Floor, New York, New York 10022.

Common Stock Authorized for Issuance Under Equity Compensation Plans

      For descriptions of equity compensation plans under which our common stock
is authorized for issuance as of September 30, 2006, see Note 9 ("Stockholders'
Equity") of the Consolidated Financial Statements contained herein. For
additional information concerning certain compensation arrangements, not
approved by stockholders, under which options to purchase common stock may be
issued, see "Executive Compensation - Employment Agreements', above, and
"Certain Relationships and Transactions - Stock Issuances: Stock Options;
Warrants", below.


                                       25
<PAGE>

Item 12. Certain Relationships and Related Transactions

Stock Issuances; Warrants

      During the quarter ended June 30, 2006, Mr. DeBenedictis agreed to convert
$91,676 of principal and interest due him under certain unsecured promissory
notes payable into 315,330 shares of our unregistered common stock.

      During the last half fiscal 2006, Messers. Jensen, Needham, Boyd,
DeBenedicits, Coppa and Dr. Kahn agreed to accept 231,695 shares of unregistered
common stock (valued at $82,046 at date of conversion) in lieu of cash for
certain director's fees and expenses due the individuals. In addition, on August
1, 2006, Mr. Coppa purchased 50,000 unregistered shares of common stock (valued
at $15,000 at date of purchase).

Loans; Personal Guarantees

      Dr. Kahn loaned us $200,000 under a November 2000 unsecured promissory
note which bears interest at 12% per annum with interest due monthly and the
principal originally due in November 2001. In June 2001, Dr. Kahn agreed to
extend the maturity date of the note for an additional twelve months from its
original maturity. In September 2002, Dr. Kahn again agreed to extend the
maturity of the note until November 2004. Dr. Kahn agreed to extend the maturity
dated several times and on August 24, 2006, Dr. Kahn agreed to convert the
$200,000 of principal and $76,445 of accrued interest into 953,259 unregistered
shares of common stock.

      Between the period of June and August 2003, two immediate family members
of an officer loaned us a total of $400,000 under the terms of two-year,
unsecured promissory notes which bear interest at 12% per annum with interest
due quarterly and the principal due upon maturity. In March 2004, these same
individuals loaned us an additional $200,000 in aggregate, under similar terms
with the principal due upon maturity March 2006. These individuals each agreed
to invest the entire $100,000 principal balance of their June 2003 notes
($200,000 in aggregate) into our April 2004 private placement of investment
units and each received 113,636 units in these transactions. In addition, the
two individuals agreed to extend the maturity of the remaining balance of these
notes, $400,000 at September 30, 2006 until the earlier of when all amounts due
under the Laurus credit facility have been repaid or June 30, 2009.

      In September 2003, Mr. Davis loaned us $400,000 under a September 30, 2003
unsecured promissory note which bears interest at 12% per annum with interest
due quarterly and the principal due March 31, 2004 (subsequently extended to
September 30, 2004). In 2005, Mr. Davis applied approximately $114,000 of the
balance due him plus $21,000 of accrued interest to exercise options to purchase
185,000 shares of common stock as noted above. In addition, he agreed to extend
the maturity of the remaining balance of this note until the earlier of when all
amounts due under the Laurus credit facility have been repaid or June 30, 2009.
In July 2006, Mr. Davis assigned $79,060 of the remaining balance to one of Mr.
Needham's immediate family members noted above and the remaining balance of
$20,260 plus accrued interest of $13,500 to Mr. Needham.

      Between January and June 2006, Mr. DeBenedictis loaned us $155,000 under
three unsecured promissory notes which bear interest at 10% per annum with
interest and principal due during periods ranging from June 30, 2006 through
September 30, 2006. On April 12, 2006, Mr. DeBenedictis agreed in lieu of being
repaid in cash at maturity to convert $76,450 (including interest of $1,450)
into 273,035 shares of unregistered common stock at a price of $.28 which was
the closing price of our stock on the date of conversion. In addition, on June
5, 2006 Mr. DeBenedictis agreed to convert $15,226 (including interest of $226)
into 42,295 shares of unregistered common stock at a price of $.36 which was the
closing price of our stock on the date of conversion. As of September 30, 2006,
the remaining balance due on this note amounted to $65,000. Mr. DeBenedictis has
agreed be paid $10,000 per month during the quarter ended December 31, 2006 and
extend the remaining $35,000 until the earlier of when all amounts due under the
restructured Laurus credit facility have been repaid or June 30, 2009.

Related Party Transactions

      We rent several pieces of equipment on a monthly basis from Valley View
Farms, Inc. and Maust Asset Management, LLC, two companies co-owned by one of
our employees. In January 2005, we entered into three equipment operating lease
agreements with Maust Asset Management. Under these leases, we are required to
pay between $1,500 and $2,683 per month rental and have the ability to purchase
the equipment at the end of the lease for between $12,000 and $16,000. Rent
expense associated with payments made to the two companies for the fiscal years
ended September 30, 2006 and 2005 was $263,801 and $170,940, respectively.

      In July 2002, our Minnesota subsidiary entered into a four-year equipment
lease with Valley View Farms. Under the this lease, we were required to pay rent
of $4,394 per month until the lease termination in July 2006 at which time we
purchased the equipment for $60,000 as provided for in the lease.

      During fiscal 2006, we entered into 4 new capital lease agreements with
Maust Asset Management for equipment valued at $423,038. We are required to pay
between $2,543 and $4,285 per month rental and have the ability to purchase the
equipment at the end of the lease for prices ranging from $11,250 to $15,000 per
unit.


                                       26
<PAGE>

      In April 2003, our Iowa subsidiary entered into a ten-year lease agreement
with Maust Asset Management for our Iowa facility. Under the lease, monthly rent
payments of $8,250 plus real estate taxes are required for the first five years,
increasing to $9,000 plus real estate taxes per month for the remaining five
years. The lease also provides us a right of first refusal to purchase the land
and buildings at fair market value during the term of the lease. Maust Asset
Management acquired the property from the former lessor. In April 2005, our Iowa
subsidiary entered into an eight-year lease agreement with Maust Asset
Management for approximately three acres adjacent to our existing Iowa facility.
Under that lease, monthly rent payments of $3,500 are required. For the fiscal
years ended September 30, 2006 and 2005, payments made in connection with these
leases amounted to $163,221 and $123,000, respectively.

      During March 2004, our Minnesota subsidiary sold all of its land and
buildings to an entity co-owned by one of our employees for $1,400,000,
realizing a gain of $437,337 which has been recorded as unearned income and
classified as a non current liability in the accompanying financial statements.
Simultaneous with the sale, we entered into an agreement to lease the property
back for a term of 12 years at an annual rent of $195,000, increasing to
$227,460 over the term of the lease. The gain is being recognized as income
ratably over the term of the lease. The lease provides for two additional four
year extensions. The lease is classified as a capital lease at September 30,
2006 with an equipment value of $1,400,000. For the fiscal years ended September
30, 2006 and 2005, payments made in connection with this lease amounted to
$240,672 and $236,298, respectively.

      All transactions, including loans, between us and our officers, directors,
principal stockholders, and their affiliates are approved by a majority of the
independent and disinterested outside directors on the Board of Directors.
Management believes these transactions were consummated on terms no less
favorable to us than could be obtained from unaffiliated third parties.

Item 13.  Exhibits and Reports on Form 8-K

      The following exhibits are filed with this document:

Exhibit No.    --   Description
-----------         -----------

   2.1 (1)     --   Asset Purchase Agreement dated February 17, 2006 between
                    GreenMan Technologies of Georgia, Inc., GreenMan
                    Technologies, Inc. and Tires Into Recycled Energy and
                    Supplies, Inc.
   2.2 (1)     --   Asset Purchase Agreement dated March 1, 2006 between
                    GreenMan Technologies of Georgia, Inc., GreenMan
                    Technologies, Inc. and MTR of Georgia, Inc.
   2.3 (1)     --   Amendment No. 1 to Lease Agreement dated February 28, 2006
                    between GreenMan Technologies of Georgia, Inc. and Mart
                    Management, Inc.
   3.1 (2)     --   Restated Certificate of Incorporation as filed with the
                    Secretary of State of the State of Delaware on May 1,
                    2003, as amended
   3.2 (3)     --   By-laws of GreenMan Technologies, Inc.
   4.1 (3)     --   Specimen certificate for Common Stock of GreenMan
                    Technologies, Inc.
   4.2 (2)     --   Option Agreement, dated July 20, 2005 by and between
                    GreenMan Technologies, Inc. and Laurus Master Fund, Ltd.
   4.3 (4)     --   Common Stock Purchase Warrant, dated June 30, 2006, issued
                    To Laurus Master Fund, Ltd.
   4.4 (4)     --   Registration Rights Agreement dated June 30, 2006, made by
                    GreenMan Technologies, Inc. to Laurus Master Fund, Ltd.
  10.1 (5)     --   Securities Purchase Agreement, dated June 30, 2004, by and
                    between GreenMan Technologies, Inc. and Laurus Master
                    Fund, Ltd.
  10.2 (5)     --   Security Agreement, dated June 30, 2004, by and among
                    GreenMan Technologies, Inc. and certain of its
                    subsidiaries, in favor of Laurus Master Fund, Ltd.
  10.3 (5)     --   Master Security Agreement, dated June 30, 2004, by and
                    among GreenMan Technologies, Inc. and certain of its
                    subsidiaries, in favor of Laurus Master Fund, Ltd.


                                       27
<PAGE>

Exhibit No.    --   Description
-----------         -----------
  10.4 (5)     --   Subsidiary Guarantee, dated June 30, 2004, by and among
                    GreenMan Technologies of Minnesota, Inc., GreenMan
                    Technologies of Georgia, Inc., GreenMan Technologies of
                    Iowa, Inc., GreenMan Technologies of Tennessee, Inc.,
                    GreenMan Technologies of Wisconsin, Inc. and GreenMan
                    Technologies of California, Inc., in favor of Laurus
                    Master Fund, Ltd.
  10.5 (5)     --   Stock Pledge Agreement, dated June 30, 2004, by and among
                    GreenMan Technologies, Inc. and Laurus Master Fund, Ltd.
  10.6 (6)     --   Amendment No. 1 and Waiver dated March 22, 2005 by and
                    among GreenMan Technologies, Inc. and certain of its
                    subsidiaries, in favor of Laurus Master Fund, Ltd.
  10.7 (2)     --   Securities Purchase Agreement, dated July 20, 2005, by and
                    between GreenMan Technologies, Inc. and Laurus Master
                    Fund, Ltd.
  10.8 (2)     --   Reaffirmation and Ratification Agreement, dated July 20,
                    2005 by and between GreenMan Technologies, Inc. and
                    certain of its subsidiaries, in favor of Laurus Master
                    Fund, Ltd.
  10.9 (7)     --   Waiver dated April 8, 2006 by and among GreenMan
                    Technologies, Inc. and Laurus Master Fund, Ltd.
  10.10 (4)    --   Amended and Restated Security Purchase Agreement, dated
                    June 30, 2006, by and among GreenMan Technologies, Inc.
                    and certain of its subsidiaries, in favor of Laurus Master
                    Fund, Ltd.
  10.11 (4)    --   Secured Non-Convertible Term Note, dated June 30, 2006,
                    made by GreenMan Technologies, Inc. to Laurus Master Fund,
                    Ltd.
  10.12 (4)    --   Secured Non-Convertible Revolving Note, dated June 30,
                    2006, made by GreenMan Technologies, Inc. to Laurus Master
                    Fund, Ltd.
  10.13 (4)    --   Reaffirmation and Ratification Agreement dated June 30,
                    2006, made by GreenMan Technologies, Inc. to Laurus Master
                    Fund, Ltd.
  10.14 (4)    --   Stock Pledge Agreement, dated June 30, 2006, by and among
                    GreenMan Technologies, Inc. and Laurus Master Fund, Ltd.
  10.15 (4)    --   Escrow Agreement dated June 30, 2006, among GreenMan
                    Technologies, Inc., Laurus Master Fund, Ltd., and Loeb &
                    Loeb LLP, as Escrow Agent
  10.16 (3)    --   1993 Stock Option Plan
  10.17 (8)    --   2005 Stock Option Plan
  10.18 (3)    --   Form of confidentiality and non-disclosure agreement for
                    executive employees
  10.19 (9)    --   Employment Agreement dated April 1, 2003 between GreenMan
                    Technologies, Inc. and Maurice E. Needham
  10.20 (10)   --   Employment Agreement dated April 12, 2006, between
                    GreenMan Technologies, Inc. and Lyle E. Jensen
  10.21 (11)   --   Employment Agreement between GreenMan Technologies, Inc.
                    and Charles E. Coppa
  10.22 (11)   --   Employment Agreement between GreenMan Technologies, Inc.
                    and Robert H. Davis
  10.23 (12)   --   Promissory Note issued by Robert H. Davis dated January 9,
                    1998 in  favor of GreenMan Technologies, Inc.
  10.24 (9)    --   $400,000 Promissory Note by GreenMan Technologies, Inc. to
                    Robert H. Davis and Nancy Karfilis Davis dated September
                    30, 2003
  10.25 (13)   --   Extension Agreement dated March 31, 2004 between GreenMan
                    Technologies, Inc. and Robert H. Davis and Nancy
                    Karfilis-Davis


                                       28
<PAGE>

Exhibit No.    --   Description
-----------         -----------
  10.26 (12)   --   Promissory note issued November 17, 2000 by GreenMan
                    Technologies, Inc. to Dr. Allen Kahn
  10.27 (12)   --   Extension Agreement dated September 30, 2000 between
                    GreenMan Technologies, Inc. and Dr. Allen Kahn
  10.28 (12)   --   Extension Agreement dated June 27, 2001 between GreenMan
                    Technologies, Inc and Dr. Allen Kahn
  10.29 (14)   --   Extension Agreement dated September 23, 2002 between
                    GreenMan and Dr. Allen Kahn
  10.30 (13)   --   $100,000 Promissory Note issued by GreenMan Technologies,
                    Inc. to Joyce Ritterhauss dated March 10, 2004
  10.31 (9)    --   $100,000 Promissory Note by GreenMan Technologies, Inc. to
                    Barbara Morey dated June 26, 2003
  10.32 (9)    --   $100,000 Promissory Note by GreenMan Technologies, Inc. to
                    Barbara Morey dated August 26, 2003
  10.33 (13)   --   $100,000 Promissory Note issued by GreenMan Technologies,
                    Inc. to Barbara Morey dated March 18, 2004
  10.34 (5)    --   Subordination Agreement, dated June 30, 2004, by and among
                    Barbara Morey, Joyce Ritterhauss, Allen Kahn, Robert Davis
                    and Nancy Davis, in favor of Laurus Master Fund, Ltd.
  10.35 (15)   --   $25,000 Unsecured Promissory Note issued by GreenMan
                    Technologies, Inc. to Nicholas and Nancy DeBenedictis
                    dated January 6, 2006
  10.36 (15)   --   $100,000 Unsecured Promissory Note issued by GreenMan
                    Technologies, Inc. to Nicholas and Nancy DeBenedictis
                    dated January 6, 2006
  10.37 (4)    --   $30,000 Unsecured Promissory Note issued by GreenMan
                    Technologies, Inc. to Nicholas and Nancy DeBenedictis
                    dated May 6, 2006
   4.51 (4)    --   Subordination Agreement, dated March 15, 2006 by and among
                    Nicholas and Nancy DeBenedictis in favor of Laurus Master
                    Fund, Ltd.
  10.38 (13)   --   Purchase Agreement dated February 21, 2004 between
                    GreenMan Technologies of Minnesota, Inc. and Earl Fisher
  10.39 (13)   --   Commercial Lease Agreement dated March 25, 2004 between
                    GreenMan Technologies of Minnesota, Inc. and Two Oaks, LLC
  10.40 (16)   --   Purchase and Sale Agreement By and Between GreenMan
                    Technologies of Georgia, Inc. and WTN Realty Trust dated
                    April 2, 2001
  10.41 (16)   --   Lease Agreement By and Between WTN Realty Trust to
                    GreenMan Technologies of Georgia, Inc. dated April 2, 2001
  10.42 (17)   --   $750,000 Promissory Note by GreenMan Technologies, Inc. to
                    Republic Services of Georgia, LP dated May 6, 2002
  10.43 (2)    --   Waiver Agreement by Republic Services of Georgia, LP dated
                    July 31, 2005
  10.44 (4)    --   Mutual General Release by and between GreenMan
                    Technologies, Inc. et al. and Republic Services, Inc.
                    dated June 30, 2006
  10.45 (4)    --   $150,000 Promissory Note by GreenMan Technologies, Inc. to
                    Republic Services of Georgia, LP dated June 30, 2006
  10.46 (9)    --   Lease -- Business Property agreement dated April 1, 2003
                    between GreenMan Technologies of Iowa, Inc. and Maust
                    Asset Management, LLC


                                       29
<PAGE>

Exhibit No.    --   Description
-----------         -----------
  10.47 (9)    --   Guaranty dated September 12, 2003 by GreenMan
                    Technologies, Inc. of obligations of GreenMan Technologies
                    of Iowa, Inc. under the Lease - Business Property with
                    Maust Asset Management, LLC
  10.48 (7)    --   Lease -- Business Property agreement dated March 1, 2005
                    between GreenMan Technologies of Iowa, Inc. and Maust
                    Asset Management, LLC
  10.49 (7)    --   Lease -- Motor Vehicle agreement dated January 1, 2005
                    between GreenMan Technologies of Minnesota, Inc. and Maust
                    Asset Management, LLC
  10.50 (7)    --   Lease -- Motor Vehicle agreement dated January 1, 2005
                    between GreenMan Technologies of Minnesota, Inc. and Maust
                    Asset Management, LLC
  10.51 (7)    --   Lease -- Motor Vehicle agreement dated January 1, 2005
                    between GreenMan Technologies of Minnesota, Inc. and Maust
                    Asset Management, LLC
  10.52 (18)   --   Lease -- Motor Vehicle agreement dated December 29, 2005
                    between GreenMan Technologies of Minnesota, Inc. and Maust
                    Asset Management, LLC
  10.53 (18)   --   Lease -- Motor Vehicle agreement dated July 1, 2006 between
                    GreenMan Technologies of Minnesota, Inc. and Maust Asset
                    Management, LLC
  10.54 (18)   --   Lease -- Motor Vehicle agreement dated July 1, 2006 between
                    GreenMan Technologies of Minnesota, Inc. and Maust Asset
                    Management, LLC
  10.55 (18)   --   $20,260 Unsecured Promissory Note by GreenMan
                    Technologies, Inc. to Barbara Morey dated July  7, 2006.
  10.56 (18)   --   $79,060 Unsecured Promissory Note by GreenMan
                    Technologies, Inc. to Barbara Morey dated July 7, 2006.
  10.57 (18)        Release agreement dated November 30, 2006 between Robert
                    H. Davis and GreenMan Technologies, Inc.
  21.1 (18)    --   List of All Subsidiaries
  31.1 (18)    --   Certification of Chief Executive Officer pursuant to Rule
                    13a-14(a) or Rule 15d-14(a)
  31.2 (18)    --   Certification of Chief Financial Officer pursuant to Rule
                    13a-14(a) or Rule 15d-14(a)
  32.1 (18)    --   Certification of Chief Executive Officer under 18 U.S.C.
                    Section 1350
  32.2 (18)    --   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
      February 17, 2006 and filed March 6, 2006, and incorporated herein by
      reference.

(2)   Filed as an Exhibit to GreenMan Technologies, Inc.'s Form 10-QSB for the
      Quarter Ended June 30, 2005 and incorporated herein by reference.

(3)   Filed as an Exhibit to GreenMan Technologies, Inc.'s Registration
      Statement on Form SB-2 No. 33-86138 and incorporated herein by reference.

(4)   Filed as an Exhibit to GreenMan Technologies, Inc.'s Form 10-QSB for the
      Quarter Ended June 30, 2006 and incorporated herein by reference.

(5)   Filed as an Exhibit to GreenMan Technologies, Inc.'s Registration
      Statement on Form SB-2 (File No. 333-117819), and incorporated herein by
      reference.

(6)   Filed as an Exhibit to GreenMan Technologies, Inc.'s Form 8-K dated March
      22, 2005 and filed March 28, 2005, and incorporated herein by reference.


                                       30
<PAGE>

(7)   Filed as an Exhibit to GreenMan Technologies, Inc.'s Form 10-KSB for the
      fiscal year ended September 30, 2005 and incorporated herein by reference.

(8)   Filed as an Exhibit to GreenMan Technologies, Inc.'s definitive proxy
      statement dated May 19, 2005 with respect to the Annual meeting held on
      June 16, 2005, and incorporated herein by reference.

(9)   Filed as an Exhibit to GreenMan Technologies, Inc.'s Form 10-KSB for the
      Fiscal Year Ended September 30, 2003 and incorporated herein by reference.

(10)  Filed as an Exhibit to GreenMan Technologies, Inc.'s Form 8-K dated April
      12, 2006 and filed April 17, 2006, and incorporated herein by reference.

(11)  Filed as an Exhibit to GreenMan Technologies, Inc.'s Form 10-QSB for the
      Quarter Ended December 31, 2000 and incorporated herein by reference.

(12)  Filed as an Exhibit to GreenMan Technologies, Inc.'s Form 10-KSB for the
      Fiscal Year Ended September 30, 2001 and incorporated herein by reference.

(13)  Filed as an Exhibit to GreenMan Technologies, Inc.'s Form 10-QSB for the
      Quarter Ended March 31, 2004 and incorporated herein by reference.

(14)  Filed as an Exhibit to GreenMan Technologies, Inc.'s Form 10-KSB for the
      Fiscal Year Ended September 30, 2002 and incorporated herein by reference

(15)  Filed as an Exhibit to GreenMan Technologies, Inc.'s Form 10-QSB/A for the
      Quarter Ended March 31, 2006 and incorporated herein by reference.

(16)  Filed as an Exhibit to GreenMan Technologies, Inc.'s Form 10-QSB for the
      Quarter Ended June 30, 2001 &and incorporated herein by reference.

(17)  Filed as an Exhibit to GreenMan Technologies, Inc.'s Form 10-QSB for the
      Quarter Ended June 30, 2002 and incorporated herein by reference.

(18)  Filed herewith.

(b) Reports on Form 8-K.

       None

Item 14. Principal Accountant Fees and Services

      In addition to audit services, Wolf & Company, P.C. also provided certain
non-audit services to us during the fiscal year ended September 30, 2006. The
Audit Committee has considered whether the provision of these additional
services is compatible with maintaining the independence of Wolf & Company, P.C.

      Audit Fees. The aggregate fees billed for professional services rendered
by Wolf & Company, P.C. for (1) the audit of our financial statements as of and
for the fiscal year ended September 30, 2006 and (2) the review of the financial
statements included our company's Form 10-QSB filings for fiscal 2006 were
$204,820. The aggregate fees billed for professional services rendered by Wolf &
Company, P.C. for (1) the audit of our financial statements as of and for the
fiscal year ended September 30, 2005 and (2) the review of the financial
statements included in our Form 10-QSB filings for fiscal 2005 were $220,000.

      Audit-Related Fees. The aggregate fees billed in fiscal 2006 and 2005 for
assurance and related services rendered by Wolf & Company, P.C. that are
reasonably related to the performance of the audit or review of our financial
statements, were $4,300 and $6,600, respectively. Services rendered in this
category consisted of (i) financial accounting and reporting consultations, and
(ii) participation in board and audit committee meetings and (iii) assurance
services on specific transactions.

      Tax Fees. The aggregate fees billed in fiscal 2006 and 2005 for
professional services rendered by Wolf & Company, P.C. for tax compliance, tax
advice and tax planning were $26,975 and $27,750, respectively.

      All Other Fees. There were no fees billed in fiscal 2006 and 2005 for
products and services provided by Wolf & Company, P.C., other than services
reported above.


                                       31
<PAGE>

      Pre-Approval Policies and Procedures. The Audit Committee has adopted
policies which provide that our independent auditors may only provide those
audit and non-audit services that have been pre-approved by the Audit Committee,
subject, with respect to non-audit services, to a de minimis exception
(discussed below) and to the following additional requirements: (1) such
services must not be prohibited under applicable federal securities rules and
regulations, and (2) the Audit Committee must make a determination that such
services would be consistent with the principles that the independent auditor
should not audit its own work, function as part of management, act as an
advocate of our company, or be a promoter of our company's stock or other
financial interests. The chairman of the Audit Committee has the authority to
grant pre-approvals of permitted non-audit services between meetings, provided
that any such pre-approval must be presented to the full Audit Committee at its
next scheduled meeting.

      During fiscal 2006, all of the non-audit services provided by Wolf &
Company, P.C. were pre-approved by the Audit Committee. Accordingly, the Audit
Committee did not rely on the de minimis exception noted above. This exception
waives the pre-approval requirements for non-audit services if certain
conditions are satisfied, including, among others, that such services are
promptly brought to the attention of and approved by the Audit Committee prior
to the completion of the audit.


                                       32
<PAGE>

GreenMan Technologies, Inc.
Index to Consolidated Financial Statements

                                                                           Page
                                                                           ----

Report of Independent Registered Public Accounting Firm                     F-2

Consolidated Balance Sheets as of September 30, 2006 and 2005               F-3

Consolidated Statements of Operations for the Years Ended
  September 30, 2006 and 2005                                               F-4

Consolidated Statements of Changes in Stockholders' Deficit for
  the Years Ended September 30, 2006 and 2005                               F-5

Consolidated Statements of Cash Flows for the Years Ended
  September 30, 2006 and 2005                                               F-6

Notes to Consolidated Financial Statements                                  F-8


                                      F-1
<PAGE>

Report of Independent Registered Public Accounting Firm


The Board of Directors and Stockholders
  GreenMan Technologies, Inc.
  Savage, Minnesota

      We have audited the accompanying consolidated balance sheets of GreenMan
Technologies, Inc. and subsidiaries as of September 30, 2006 and 2005 and the
related consolidated statements of operations, changes in stockholders' deficit
and cash flows for the years then ended. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.

      We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

      In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of GreenMan Technologies, Inc.
and subsidiaries as of September 30, 2006 and 2005 and the results of their
operations and their cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.

                                            /S/ WOLF & COMPANY, P.C.
                                            ----------------------------
                                                WOLF & COMPANY, P.C


Boston, Massachusetts
December 12, 2006.


                                      F-2
<PAGE>

                           GreenMan Technologies, Inc.
                           Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                                        September 30,   September 30,
                                                                                            2006            2005
                                                                                        ------------    ------------
<S>                                                                                     <C>             <C>
                                        ASSETS
Current assets:
  Cash and cash equivalents .........................................................   $    639,014    $    255,657
  Accounts receivable, trade, less allowance for doubtful accounts of $185,206 and
     $110,115 as of September 30, 2006 and September 30, 2005 .......................      2,056,928       2,337,038
  Product inventory .................................................................        113,336         144,928
  Other current assets ..............................................................        653,423         564,620
  Assets related to discontinued operations .........................................          7,291       2,776,485
                                                                                        ------------    ------------
        Total current assets ........................................................      3,469,992       6,078,728
                                                                                        ------------    ------------
Property, plant and equipment, net ..................................................      5,807,119       5,512,227
                                                                                        ------------    ------------
Other assets:
  Deferred loan costs ...............................................................             --         430,158
  Customer relationship intangibles, net ............................................         85,434          92,383
  Other .............................................................................        146,982          62,360
  Assets related to discontinued operations .........................................             --         944,096
                                                                                        ------------    ------------
        Total other assets ..........................................................        232,416       1,528,997
                                                                                        ------------    ------------
                                                                                        $  9,509,527    $ 13,119,952
                                                                                        ============    ============

                           LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
  Notes payable, current ............................................................   $    493,572    $    763,058
  Notes payable, line of credit .....................................................             --         619,950
  Notes payable, related party, current .............................................         30,000              --
  Convertible notes payable, current ................................................             --       1,305,361
  Convertible notes payable, line of credit .........................................             --       3,585,281
  Accounts payable ..................................................................      1,786,130       1,909,315
  Accrued expenses, other ...........................................................      1,549,071       1,004,711
  Obligations under capital leases, current .........................................        185,940         153,104
  Liabilities related to discontinued operations ....................................      3,414,834       5,405,833
                                                                                        ------------    ------------
        Total current liabilities ...................................................      7,459,547      14,746,613
  Notes payable, related parties, non-current portion ...............................        534,320         699,320
  Notes payable, non-current portion ................................................     10,339,590       1,883,742
  Convertible notes payable, non-current portion ....................................             --       1,802,896
  Obligations under capital leases, non-current portion .............................      1,615,692       1,298,266
  Deferred gain on sale leaseback transaction .......................................        343,185         379,633
  Obligations due under lease settlement ............................................        630,000              --
  Liabilities related to discontinued operations ....................................             --         995,653
                                                                                        ------------    ------------
        Total liabilities ...........................................................     20,922,334      21,806,123
                                                                                        ------------    ------------

Stockholders' deficit:
  Preferred stock, $1.00 par value, 1,000,000 shares authorized, none outstanding ...             --              --
  Common stock, $.01 par value, 40,000,000 shares authorized, 21,408,966 shares
     and 19,225,352 shares issued and outstanding at September 30, 2006 and 2005 ....        214,089         192,253
  Additional paid-in capital ........................................................     35,811,086      34,853,599
  Accumulated deficit ...............................................................    (47,437,982)    (43,732,023)
                                                                                        ------------    ------------
        Total stockholders' deficit .................................................    (11,412,807)     (8,686,171)
                                                                                        ------------    ------------
                                                                                        $  9,509,527    $ 13,119,952
                                                                                        ============    ============
</TABLE>


          See accompanying notes to consolidated financial statements.


                                      F-3
<PAGE>

                           GreenMan Technologies, Inc.
                      Consolidated Statements of Operations

<TABLE>
<CAPTION>
                                                                     Years Ended September 30,
                                                                       2006            2005
                                                                   ------------    ------------
<S>                                                                <C>             <C>
Net sales ......................................................   $ 17,607,812    $ 18,311,462
Cost of sales ..................................................     12,953,753      14,802,634
                                                                   ------------    ------------
Gross profit ...................................................      4,654,059       3,508,828
Operating expenses:
    Selling, general and administrative ........................      3,549,803       2,694,010
    Impairment loss - goodwill .................................             --         783,410
    Impairment loss - long lived assets ........................             --          57,183
                                                                   ------------    ------------
                                                                      3,549,803       3,534,603
                                                                   ------------    ------------
Operating income (loss) from continuing operations .............      1,104,256         (25,775)
                                                                   ------------    ------------
Other income (expense):
    Interest and financing expense .............................     (2,312,071)       (829,493)
    Non-cash interest and financing costs ......................     (1,273,014)     (1,547,563)
    Other, net .................................................        307,701         (13,484)
    (Loss) gain on disposal of assets, net .....................         (6,513)          2,835
                                                                   ------------    ------------
        Other (expense), net ...................................     (3,283,897)     (2,387,705)
                                                                   ------------    ------------
Loss from continuing operations before income taxes ............     (2,179,641)     (2,413,480)
Provision for income taxes .....................................        (65,337)       (274,745)
                                                                   ------------    ------------
Loss from continuing operations ................................     (2,244,978)     (2,688,225)
                                                                   ------------    ------------
Discontinued operations:
    Loss on disposal of discontinued operations ................             --      (5,965,952)
    Loss from discontinued operations ..........................     (1,460,981)     (6,518,532)
                                                                   ------------    ------------
                                                                     (1,460,981)    (12,484,484)
                                                                   ------------    ------------
Net loss .......................................................   $ (3,705,959)   $(15,172,709)
                                                                   ============    ============

Loss from continuing operations per share - basic ..............   $      (0.11)   $      (0.14)
Loss on disposal of discontinued operations per share - basic ..             --           (0.31)
Loss from discontinued operations per share - basic ............          (0.08)          (0.34)
                                                                   ------------    ------------
Net loss per share - basic .....................................   $      (0.19)   $      (0.79)
                                                                   ============    ============

Weighted average shares outstanding ............................     19,810,585      19,188,674
                                                                   ============    ============
</TABLE>


          See accompanying notes to consolidated financial statements.


                                      F-4
<PAGE>

                           GreenMan Technologies, Inc.
           Consolidated Statements of Changes in Stockholders' Deficit
                     Years Ended September 30, 2006 and 2005

<TABLE>
<CAPTION>
                                                                 Additional
                                              Common Stock         Paid In     Accumulated
                                           Shares      Amount      Capital        Deficit          Total
                                         ---------------------   -----------   ------------    ------------
<S>                                      <C>          <C>        <C>           <C>             <C>
Balance, September 30, 2004 ..........   19,072,963   $190,729   $31,755,384   $(28,559,314)   $  3,386,799
Common stock issued in connection
   with a potential acquisition ......      127,389      1,274       198,726             --         200,000
Beneficial conversion discount on
   convertible notes payable .........           --         --     2,879,989             --       2,879,989
Common stock issued upon conversion
   of notes payable ..................       25,000        250        19,500             --          19,750
Net loss for the year ended
   September 30, 2005 ................           --         --            --    (15,172,709)    (15,172,709)
                                         ----------   --------   -----------   ------------    ------------
Balance, September 30, 2005 ..........   19,225,352   $192,253   $34,853,599   $(43,732,023)   $ (8,686,171)
Sale of common stock .................      550,000      5,500       149,500             --         155,000
Net value of warrants issued in
   conjunction with debt
   restructuring .....................           --         --       344,155             --         344,155
Common stock issued upon conversion
   of interest and principal .........    1,268,589     12,686       355,436             --         368,122
Common stock issued for fees and
   expenses due ......................      231,695      2,317        79,729             --          82,046
Common stock issued for
   services rendered .................      133,330      1,333        28,667             --          30,000
Net loss for the year ended
   September 30, 2006 ................           --         --            --     (3,705,959)     (3,705,959)
                                         ----------   --------   -----------   ------------    ------------
Balance, September 30, 2006 ..........   21,408,966   $214,089   $35,811,086   $(47,437,982)   $(11,412,807)
                                         ==========   ========   ===========   ============    ============
</TABLE>


           See accompanying notes to consolidated financial statements


                                      F-5
<PAGE>

                           GreenMan Technologies, Inc.
                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                           Years Ended September 30,
                                                                                              2006            2005
                                                                                          ------------    ------------
<S>                                                                                       <C>             <C>
Cash flows from operating activities:
    Net loss ..........................................................................   $ (3,705,959)   $(15,172,709)
Adjustments to reconcile net income to net cash provided by operating activities:
    Increase in valuation allowance on deferred tax asset .............................             --         270,000
    Loss on disposal of property, plant and equipment .................................        264,543       3,618,150
    Gain recognized on debt restructuring .............................................       (353,476)             --
    Gain on capital lease settlement, net .............................................             --        (552,137)
    Impairment loss ...................................................................             --       3,591,077
    Depreciation ......................................................................      1,522,880       2,425,801
    Amortization of non-cash financing costs ..........................................      1,272,874       1,547,562
    Amortization of customer relationships ............................................         12,837          47,270
    Gain on sale leaseback ............................................................        (36,445)        (39,482)
    Loss on stock deposit .............................................................             --         200,000
    Decrease (increase) in assets:
        Accounts receivable ...........................................................      1,590,857         261,900
        Product inventory .............................................................        (23,523)        494,796
        Other current assets ..........................................................        145,847         486,494
        Other assets ..................................................................        (84,622)        432,136
    Increase (decrease) in liabilities:
        Accounts payable ..............................................................       (289,603)      1,366,876
        Accrued expenses ..............................................................         56,712         571,730
                                                                                          ------------    ------------
           Net cash provided by operating activities ..................................        372,922        (450,536)
                                                                                          ------------    ------------
Cash flows from investing activities:
    Purchase of property and equipment ................................................     (1,424,212)     (1,596,093)
    Proceeds on sale of property and equipment ........................................        116,000         608,102
    Proceeds from equipment held for sale .............................................        444,332              --
                                                                                          ------------    ------------
         Net cash used for investing activities .......................................       (863,880)       (987,991)
                                                                                          ------------    ------------
Cash flows from financing activities:
    Increase in deferred financing costs ..............................................             --         (60,209)
    Net advances under line of credit .................................................       (619,950)        119,950
    Proceeds from notes payable .......................................................     11,692,579         492,643
    Proceeds from notes payable, related parties ......................................        155,000              --
    Repayment of notes payable ........................................................     (3,713,644)     (1,502,404)
    Proceeds from convertible notes payable ...........................................             --       1,000,000
    Repayment of convertible notes payable ............................................     (3,108,257)       (500,000)
    Net (payments) advances on convertible notes payable, line of credit , net ........     (3,585,281)      2,282,824
    Principal payments on obligations under capital leases ............................       (195,660)       (538,848)
    Net proceeds on the sale of common stock ..........................................        140,000              --
                                                                                          ------------    ------------
         Net cash provided by financing activities ....................................        764,787       1,293,956
                                                                                          ------------    ------------
Net increase (decrease) in cash and cash equivalents ..................................        273,829        (144,571)
Cash and cash equivalents at beginning of year, including $109,559 and $48,113,
   respectively, of cash related to discontinued operations ...........................        365,216         509,787
                                                                                          ------------    ------------
Cash and cash equivalents at end of year, including $31 and $109,559, respectively,
   of cash related to discontinued operations .........................................   $    639,045    $    365,216
                                                                                          ============    ============
</TABLE>


           See accompanying notes to consolidated financial statements


                                      F-6
<PAGE>

                           GreenMan Technologies, Inc.
                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                      Years Ended September 30,
                                                                                          2006         2005
                                                                                       ----------   ----------

<S>                                                                                    <C>          <C>
Supplemental cash flow information:
Machinery and equipment acquired under capital leases ..............................   $  535,686   $  478,476
Transfer of equipment held for resale ..............................................           --      539,332
Beneficial conversion discount recognized on convertible debt ......................           --    2,879,979
Net value of warrants issued .......................................................      344,156           --
Shares issued upon conversion of convertible notes payable, related party
   and accrued interest ............................................................      368,121       19,750
Shares issued in lieu of cash for fees, incentives, expenses and service rendered ..      127,046           --
Accounts receivable offset in connection with sale of discontinued operations ......      152,000
Accounts payable offset with proceeds on sale of discontinued operations ...........      247,000
Capital lease net settlement .......................................................           --      700,000
Shares issued to acquire exclusive purchase option .................................           --      200,000
Equipment acquired through transfer of deposits ....................................           --      247,874
Interest paid ......................................................................    1,238,375    1,360,447
Taxes paid .........................................................................       28,809           --
</TABLE>


          See accompanying notes to consolidated financial statements.


                                      F-7
<PAGE>

                           GreenMan Technologies, Inc.
                   Notes To Consolidated Financial Statements

1.    Summary of Significant Accounting Policies

Basis of Presentation

      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 separate plans to divest the operations of our
Georgia and Tennessee subsidiaries and dispose of their respective assets. In
addition, due to continuing operation losses, in July 2006 we sold our 100%
ownership interest in our California subsidiary. Accordingly, we have classified
all three respective entities' assets, liabilities and results of operations as
discontinued operations for all periods presented in the accompanying
consolidated financial statements.

Reclassification

      Certain amounts in the 2005 financial statements have been reclassified to
conform with 2006 presentation.

Nature of Operations, Risks, and Uncertainties

      As of September 30, 2006, we had $639,014 in cash and cash equivalents and
a working capital deficiency of $3,989,555 of which $3,414,834 or 86% of the
total is associated with our discontinued Georgia subsidiary. We understand our
continued existence is dependent on our ability to generate positive operating
cash flow and achieve profitable status on a sustained basis. We believe our
efforts to achieve these goals have been positively impacted by the June 30,
2006 restructuring of our Laurus Credit facility (see Note 5) and our
divestiture of historically unprofitable operations during fiscal 2006 and 2005
(see Note 2). However, in the fourth quarter of fiscal 2008, our principal
payments due Laurus are scheduled to increase substantially. If we are unable to
obtain additional financing or restructure our remaining principal payments with
Laurus, our ability to maintain our current level of operations could be
materially and adversely affected and we may be required to adjust our operating
plans accordingly. We believe the June 15, 2006 delisting of our stock by the
American Stock Exchange as a result of our noncompliance with their minimum
stockholders' equity requirement of $4 million (for companies incurring losses
in three of there four most recent fiscal years) could substantially limit our
stock's future liquidity and impair our ability to raise capital.

      We have invested substantial amounts of capital during the past several
years, including approximately $950,000 in Iowa during our fourth quarter in new
equipment to increase processing capacity at our Iowa and Minnesota locations,
as well as consolidating our Wisconsin location into our Minnesota operations
during fiscal 2005 to substantially reduce operating costs and maximize our
return on assets. Our future operating plan focuses on maximizing the
performance of these two operations through our continuing efforts to increase
overall quality of revenue (revenue per passenger tire equivalent) while
remaining diligent with our ongoing cost reduction initiatives. During fiscal
2005, we completed an evaluation of our corporate-wide inbound collection
infrastructure and determined that we would no longer provide certain levels of
service and products at existing rates in certain markets and therefore
implemented price increases where warranted and terminated service in situations
where price increases were not an alternative. As a result, we experienced a 4%
increase in overall tipping fees (fees we are paid to collect and dispose of a
scrap tire) during fiscal 2005 and an increase of 5% during fiscal 2006 as
compared to the same period during fiscal 2005. While these initiatives reduced
our overall inbound tire volume growth rate during fiscal 2005 and thus far
during fiscal 2006, we believe they have and will continue to improve our
performance through lower labor, parts and maintenance costs. In addition, we
continue to identify, and are currently selling product into several new,
higher-value markets as evidenced by an 18% increase in end product revenue
during fiscal 2005 and consistent end product revenue in fiscal 2006. We
continue to experience strong demand for our end products.

Nature of Operations, Risks, and Uncertainties

      GreenMan Technologies, Inc. (together with its subsidiaries "we", "us" or
"our") was originally founded in 1992 and has been operated as a Delaware
corporation since 1995. Today, we comprise three operating locations that
collect, process and market scrap tires in whole, shredded or granular form. We
are headquartered in Savage, Minnesota and currently operate tire processing
operations in Iowa and Minnesota.

Management Estimates

      The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the amounts of revenues and expenses recorded during the
reporting period. Actual results could differ from those estimates. Such
estimates relate primarily to the estimated lives of property and equipment
other intangible assets, the valuation reserve on deferred taxes, the value of
our lease settlement obligation and the value of equity instruments issued. The
amount that may be ultimately realized from assets and liabilities could differ
materially from the values recorded in the accompanying financial statements as
of September 30, 2006.


                                      F-8
<PAGE>

                           GreenMan Technologies, Inc.
                   Notes To Consolidated Financial Statements

1.    Summary of Significant Accounting Policies - (Continued)

      In particular, discontinued operations included management's best estimate
of the amounts to be realized and liabilities to be incurred in connection with
the discontinuing of our Georgia operation. The amounts we may ultimately
realize could differ materially from the amounts estimated in arriving at the
loss on disposal of the discontinued operations.

Cash Equivalents

      Cash equivalents include short-term investments with original maturities
of three months or less.

Accounts Receivable

      Accounts receivable are carried at original invoice amount less an
estimate made for doubtful accounts. Management determines the allowance for
doubtful accounts by regularly evaluating past due individual customer
receivables and considering a customer's financial condition, credit history,
and the current economic conditions. Individual accounts receivable are written
off when deemed uncollectible, with any future recoveries recorded as income
when received.

Product Inventory

      Inventory consists primarily of crumb rubber and is valued at the lower of
cost or market on the first-in first-out (FIFO) method.

Property, Plant  and Equipment

      Property, plant and equipment are stated at cost. Depreciation and
amortization expense is provided on the straight-line method. Expenditures for
maintenance, repairs and minor renewals are charged to expense as incurred.
Significant improvements and major renewals that extend the useful life of
equipment are capitalized.

Deferred Loan Costs

      Deferred loan costs are amortized into interest expense over the life of
the related financing arrangement and represent costs incurred in connection
with financing at the corporate level and our wholly-owned subsidiary in Iowa.

Revenue Recognition

      We have two sources of revenue: processing revenue which is earned from
the collection, transportation and processing of scrap tires and product revenue
which is earned from the sale of tire chips, crumb rubber and steel. Revenues
from product sales are recognized when the products are shipped and
collectability is reasonably assured. Revenues derived from the collection,
transporting and processing of tires are recognized when processing of the tires
has been completed.

Income Taxes

      Deferred tax assets and liabilities are recorded for temporary differences
between the financial statement and tax bases of assets and liabilities using
the currently enacted income tax rates expected to be in effect when the taxes
are actually paid or recovered. A deferred tax asset is also recorded for net
operating loss and tax credit carry forwards to the extent their realization is
more likely than not. The deferred tax expense for the period represents the
change in the net deferred tax asset or liability from the beginning to the end
of the period.

Stock-Based Compensation

      Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation", encourages all entities to adopt a fair value based
method of accounting for employee stock compensation plans, whereby compensation
cost is measured at the grant date based on the value of the award and is
recognized over the service period, which is usually the vesting period.
However, SFAS No. 123, as amended by SFAS No. 123(R), amended, discussed below
allows us until October 1, 2006, to continue to measure compensation cost of
those plans using the intrinsic value based method of accounting prescribed by
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees", whereby compensation cost is the excess, if any, of the quoted
market price of the stock at the grant date (or other measurement date) over the
amount an employee must pay to acquire the stock. Stock options issued under our
stock option plans generally have no intrinsic value at the grant date, and
under Accounting Principles Board Opinion No. 25 no compensation cost is
recognized for them. We apply Accounting Principles Board Opinion No. 25 and
related interpretations in accounting for stock options issued to to our
employees and directors. Had the compensation cost for the stock options issued


                                      F-9
<PAGE>

                           GreenMan Technologies, Inc.
                   Notes To Consolidated Financial Statements

1.    Summary of Significant Accounting Policies - (Continued)

to our employees and directors been determined based on the fair value at the
grant dates consistent with Statement of Financial Accounting Standards No. 123,
the net loss and net loss per share would have been adjusted to the pro forma
amounts indicated below:

<TABLE>
<CAPTION>
                                                      Year Ended      Year Ended
                                                     September 30,   September 30,
                                                         2006            2005
                                                      -----------    ------------

<S>                                                   <C>            <C>
Net loss as reported ..............................   $(3,705,959)   $(15,172,709)
Add: Compensation  recognized under APB No. 25 ....            --              --
Less: Compensation recognized under FAS 123 .......       (12,012)        (52,306)
                                                      -----------    ------------
Pro forma net loss ................................   $(3,717,971)   $(15,225,015)
                                                      ===========    ============

Net loss per share:
   Basic and diluted - as reported ................   $     (0.19)   $      (0.79)
                                                      ===========    ============
   Basic and diluted - pro forma ..................   $     (0.19)   $      (0.79)
                                                      ===========    ============
</TABLE>

      The fair value of each option grant during the year ended September 30,
2006 under the 2005 Stock Option Plan was estimated 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
4.9%; expected volatility ranging from 78% to 103% and expected life of 5 years.

      The fair value of each option grant during the year ended September 30,
2005 under the 1996 Non-Employee Director Stock Option Plan was estimated 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
4.5%; expected volatility of 57% and expected life of 5 years.

Intangible Assets

      In accordance with SFAS No. 142, "Goodwill and Other Intangible Assets",
we review intangibles for impairment annually, or more frequently if an event
occurs or circumstances change that would more likely than not reduce the fair
value of our intangible assets below their carrying value.

      Intangible assets include customer relationships acquired in current or
past business acquisitions which are being amortized on a straight-line basis
over a period of ten to twenty years, commencing on the date of the acquisition.
The impairment test for customer relationships requires us to review original
relations for continued retention. Amortization expense associated with customer
relationships amounted to $12,837 and $47,266 (including $22,653 of impairment
charges) for the fiscal years ended September 30, 2006 and 2005 respectively.
Accumulated amortization was $53,567 and $77,544 at September 30, 2006 and 2005,
respectively. Amortization of customer relationships is expected to be $6,950
per year during the next five years.

      Due to our decision to dispose of our Georgia and Tennessee operations at
September 30, 2005, goodwill associated with these operations totaling
$2,172,198 was written off as part of the loss on disposal of such discontinued
operations during the fourth quarter. In addition, due to the magnitude of the
resultant fiscal 2005 losses, management determined in the fourth quarter that
the carrying value of corporate-wide goodwill was impaired at September 30, 2005
and accordingly wrote-off all remaining goodwill recording a non-cash impairment
loss of $1,361,696, including $578,287 related to our California operations.

Long-Lived Assets

      In accordance with Statement of Financial Accounting Standards ("SFAS")
No. 144 "Accounting for The Impairment or Disposal of Long Lived Assets",
long-lived assets to be held and used are analyzed for impairment whenever
events or changes in circumstances indicate the carrying amount of an asset may
not be recoverable. SFAS No. 144 relates to assets that can be amortized and the
life can be determinable. We evaluate at each balance sheet date whether events
and circumstances have occurred that indicate possible impairment. If there are
indications of impairment, we use future undiscounted cash flows of the related
asset or asset grouping over the remaining life in measuring whether the assets
are fully recoverable. In the event such cash flows are not expected to be
sufficient to recover the recorded asset values, the assets are written down to
their estimated fair value. Long-lived assets to be disposed of are reported at
the lower of carrying amount or fair value of asset less the cost to sell.


                                      F-10
<PAGE>

                           GreenMan Technologies, Inc.
                   Notes To Consolidated Financial Statements

1.    Summary of Significant Accounting Policies - (Continued)

Net Income Loss 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) and convertible debt. Basic and diluted net loss per share are the same
for the years ended September 30, 2006 and 2005, since the effect of the
inclusion of all outstanding options, warrants and convertible debt would be
anti-dilutive.

New Accounting Pronouncements

      SFAS 123(R) - In December 2004, the Financial Accounting Standards Board
("FASB") issued SFAS No. 123(R) (revised 2004), Share-Based Payment, which is a
revision of SFAS No. 123, Accounting for Stock-Based Compensation. SFAS No.
123(R) supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees,
and amends SFAS No. 95, Statement of Cash Flows. Generally, the approach in SFAS
No. 123(R) is similar to the approach described in SFAS No. 123. However, SFAS
No. 123(R) requires all share-based payments to employees, including grants of
employee stock options, to be recognized in the income statement based on their
fair values. Pro forma disclosure is not an alternative. SFAS No. 123(R) must be
adopted no later than the first interim period for fiscal years beginning after
December 15, 2005. We adopted SFAS No. 123(R) effective on October 1, 2006.

      SFAS No. 123(R) permits public companies to adopt its requirements using
one of two methods: a "modified prospective" approach or a "modified
retrospective" approach. Under the modified prospective approach, compensation
cost is recognized beginning with the effective date based on the requirements
of SFAS 123(R) for all share-based payments granted after the effective date and
the requirements of SFAS No. 123(R) for all awards granted to employees prior to
the effective date of SFAS No. 123(R) that remain unvested on the effective
date. The modified retrospective approach includes the requirements of the
modified prospective approach but also permits entities to restate based on the
amounts previously recognized under SFAS No. 123 for purposes of pro forma
disclosures either for all prior periods presented or prior interim periods of
the year of adoption. We are evaluating which method to adopt.

      As permitted by SFAS No. 123, we currently account for the share-based
payments to employees using APB Opinion No. 25's intrinsic value method and, as
such, generally recognizes no compensation cost for employee stock options.
However, grants of stock to employees have always been recorded at fair value as
required under existing accounting standards. We do not expect the adoption of
SFAS No. 123(R) to have a material effect on our results of operations. However,
our results of operations could be materially affected by share-based payments
issued after the adoption of SFAS 123(R). The impact of the adoption of SFAS No.
123(R) cannot be predicted at this time because it will depend on levels of
share-based payments granted in the future. The unamortized compensation costs
in connection with stock option grants prior to September 30, 2006 was $117,690.

      SFAS No. 123(R) also requires the benefits of tax deductions in excess of
recognized compensation cost to be reported as a financing cash flow, rather
than an operating cash flow under current accounting literature. Since we do not
have the benefit of tax deductions in excess of recognized compensation cost,
because of our net operating loss position, the change will have no immediate
impact on the consolidated financial statements.

      SFAS No. 154 - In May 2005, FASB issued SFAS No. 154 "Accounting Changes
and Error Corrections", to amend Opinion 20 and FASB No. 3 and changes the
requirements for the accounting for and reporting of a change in accounting
principle. This Statement provides guidance on the accounting for and reporting
of accounting changes and error corrections. It establishes, unless
impracticable, retrospective application as the required method for reporting a
change in accounting principle in the absence of explicit transition


                                      F-11
<PAGE>

                           GreenMan Technologies, Inc.
                   Notes To Consolidated Financial Statements

1.    Summary of Significant Accounting Policies - (Continued)

requirements specific to the newly adopted accounting principle. This Statement
also provides guidance for determining whether retrospective application of a
change in accounting principle is impracticable and for reporting a change when
retrospective application is impracticable. The correction of an error in
previously issued financial statements is not an accounting change. However, the
reporting of an error correction involves adjustments to previously issued
financial statements similar to those generally applicable to reporting an
accounting change retrospectively. Therefore, the reporting of a correction of
an error by restating previously issued financial statements is also addressed
by this Statement. The effective date for accounting changes and correction of
errors made in fiscal years beginning after December 15, 2005. This
pronouncement is not expected to have a material effect on our financial
statements.

      SFAS No. 155 - In February 2006, FASB issued SFAS No. 155, "Accounting for
Certain Hybrid Financial Instruments" as an amendment to SFAS No. 133 and 140.
This Statement:

      a. Permits fair value re-measurement for any hybrid financial instrument
      that contains an embedded derivative that otherwise would require
      bifurcation;

      b. Clarifies which interest-only strips and principal-only strips are not
      subject to the requirements of Statement 133;

      c. Establishes a requirement to evaluate interests in securitized
      financial assets to identify interests that are freestanding derivatives
      or that are hybrid financial instruments that contain an embedded
      derivative requiring bifurcation;

      d. Clarifies that concentrations of credit risk in the form of
      subordination are not embedded derivatives; and

      e. Amends Statement 140 to eliminate the prohibition on a qualifying
      special-purpose entity from holding a derivative financial instrument that
      pertains to a beneficial interest other than another derivative financial
      instrument.

      This Statement is effective for all financial instruments acquired or
issued after the beginning of an entity's first fiscal year that begins after
September 15, 2006. We do not expect the adoption of SFAS 155 to have a material
effect on our consolidated financial position or results of operations.

      SFAS No. 157 - In September 2006, the FASB issued SFAS No. 157, "Fair
Value Measurement" ("SFAS 157"). SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. SFAS 157 is effective for financial statements issued for fiscal
years beginning after November 17, 2007 and interim periods within those fiscal
years. We are evaluating the impact of adopting SFAS 157 on our consolidated
financial position, results of operations and cash flows.

      FIN No. 48 - In July 2006, the FASB issued Interpretation No. 48,
"Accounting for Uncertain Tax Positions"; an Interpretation of SFAS No. 109
("FIN 48"), which clarifies the criteria for recognition and measurement of
benefits from uncertain tax positions. Under FIN 48, an entity should recognize
a tax benefit when it is "more-likely-than-not", based on the technical merits,
that the position would be sustained upon examination by a taxing authority. The
amount to be recognized, given the "more likely than not" threshold was passed,
should be measured as the largest amount of tax benefit that is greater than 50
percent likely of being realized upon ultimate settlement with a taxing
authority that has full knowledge of all relevant information. Furthermore, any
change in the recognition, derecognition or measurement of a tax position should
be recognized in the interim period in which the change occurs. We do not expect
the adoption of FIN 48 to have a material effect on our consolidated financial
position or results of operations.

      Sarbanes-Oxley Section 404 - The Securities and Exchange Commission issued
two releases on August 6, 2006 to grant smaller public companies and many
foreign private issuers further relief from compliance with Section 404 of the
Sarbanes-Oxley Act of 2002. The Commission is proposing to grant relief to
smaller public companies by extending the date by which non-accelerated filers
must start providing a report by management assessing the effectiveness of the
company's internal control over financial reporting. The initial compliance date
for these companies would be moved from fiscal years ending on or after July 15,
2007, until fiscal years ending on or after Dec. 15, 2007. The Commission also
proposes to extend the date by which non-accelerated filers must begin to comply
with the Section 404(b) requirement to provide an auditor's attestation report
on internal control over financial reporting in their annual reports. This
deadline would be moved to the first annual report for a fiscal year ending on
or after Dec. 15, 2008. This proposed extension would result in all
non-accelerated filers being required to complete only the management's portion


                                      F-12
<PAGE>

                           GreenMan Technologies, Inc.
                   Notes To Consolidated Financial Statements

1.    Summary of Significant Accounting Policies - (Continued)

of the internal control requirements in their first year of compliance with the
requirements. This proposal is intended to provide cost savings and efficiency
opportunities to smaller public companies and to assist them as they prepare to
comply fully with Section 404's reporting requirements. This proposed extension
will provide these issuers and their auditors an additional year to consider,
and adapt to, the changes in Auditing Standard No. 2 that the Commission and the
Public Company Accounting Oversight Board intend to make, as well as the
guidance for management the Commission intends to issue, to improve the
efficiency of the Section 404(b) auditor attestation report process.

2.    Discontinued Operations

      Due to the magnitude of the continuing operating losses incurred by our
Georgia ($3.4 million) and Tennessee ($1.8 million) subsidiaries during fiscal
2005 and our California ($3.2 million since inception), subsidiary in fiscal
2006, our Board of Directors determined it to be in the best interest of our
company to discontinue all Southeastern and West coast operations and dispose of
their respective operating assets. A majority of the Tennessee operating losses
were due to rapid market share growth within the state necessitating us to
transport an increasing number of Tennessee scrap tires to our Georgia facility
for processing at significant transportation and processing loss. A majority of
the Georgia operating losses were due to (1) the negative impact of processing a
significant number of Tennessee sourced tires; (2) a change in the
specifications of our primary end market customers requiring a smaller product
resulting in reduced processing capacity and significantly higher operating
costs and (3) equipment reliability issues resulting from aging equipment
processing an increasing number of scrap tires. A majority of the California
operating losses were due to significantly higher operating costs resulting from
rapid market share growth and equipment reliability issues resulting from aging
equipment.

      In September 2005 we assigned all Tennessee scrap tire collection
contracts and certain other contracts with suppliers of waste tires and
contracts to supply whole tires to certain cement kilns in the southeastern
region of the United States to a company owned by a former employee. We received
no cash consideration for these assignments and recorded a $1,334,849 loss
(including a non-cash loss of $918,450 associated with goodwill written off) on
disposal of the operations at September 30, 2005. The aggregate net losses
including the loss on disposal associated with the discontinued operations of
our Tennessee subsidiary included in the results for year ended September 30,
2005 were approximately $3.1 million. We accrued $165,000 of estimated costs
associated with the Tennessee closure at September 30, 2005. During fiscal 2006
we incurred and charged against the accruals approximately $109,000. In
addition, $56,000 was reversed into income as a result of a reduction in certain
plant closure accruals and an agreement with our former Tennessee landlord
regarding past due amounts. Additionally, we recognized $70,000 associated with
insurance credits. In aggregate, we recognized approximately $126,000 of income
from discontinued Tennessee operations during the year ended September 30, 2006.

      In September 2005, we adopted a plan to dispose of all Georgia operations
and during the quarter ended December 31, 2005, we substantially curtailed
operations at our Georgia subsidiary. As a result, we wrote down all Georgia
operating assets to their estimated fair market value at September 30, 2005 and
recorded a loss on disposal of $4,631,102 (including a non-cash loss of
$1,253,748 associated with goodwill written off) net of a gain on settlement of
our Georgia facility lease of $586,137. We completed the divestiture of all
Georgia operating assets as of March 1, 2006. The aggregate net losses incurred
during fiscal 2006 associated with our discontinued Georgia operation was
approximately $582,000. The aggregate net losses including the loss on disposal
associated with the discontinued operations of our Georgia subsidiary included
in the results for the fiscal year ended September 30, 2005 were approximately
$8.0 million.

      In February 2006, we sold and assigned to Tires Into Recycled Energy and
Supplies, Inc. ("TIRES"), a leading crumb rubber processor in the United States,
certain assets, including (a) certain truck tire processing equipment located at
our Georgia facility; (b) certain rights and interests in our contracts with
suppliers of scrap truck tires; and (c) certain intangible assets. TIRES assumed
all of our rights and obligations under these contracts. In addition, TIRES
entered into a sublease agreement with us with respect to part of the premises
located in Georgia. As additional consideration, TIRES terminated several
material supply agreements and a December 2005 letter of intent containing an
exclusive option to acquire certain operating assets of TIRES.

      In March 2006, we sold and assigned to MTR of Georgia, Inc. ("MTR"), a
company co-owned by a former employee, certain assets, including (a) certain
passenger tire processing equipment located at our Georgia facility; (b) certain
rights and interests in our contracts with suppliers of scrap passenger tires;
and (c) certain intangible assets. MTR assumed all of our rights and obligations
under these contracts. In addition, MTR entered into a sublease agreement with
us with respect to part of the premises located in Georgia. We received $250,000
from MTR for these assets. As additional consideration, MTR assumed financial
responsibility for disposing of all scrap tires and scrap tire processing
residual at the Georgia facility as of the closing of this sale.


                                      F-13
<PAGE>

                           GreenMan Technologies, Inc.
                   Notes To Consolidated Financial Statements

2.    Discontinued Operations - (Continued)

      We agreed with TIRES and MTR not to compete in the business of providing
whole tire waste disposal services or selling crumb rubber material (except to
our existing customers) within certain Southeastern states for a period of three
years.

      In February 2006, we amended our Georgia lease agreement to obtain the
right to terminate the original lease, which had a remaining term of
approximately 15 years, by providing the landlord with six months notice. In the
event of termination, we will be obligated to continue to pay rent until the
earlier to occur of (1) the sale by the landlord of the premises; (2) the date
on which a new tenant takes over; or (3) three years from the date on which we
vacate the property. As a result of the amendment and our decision to dispose of
our Georgia operations, we wrote off the unamortized balance of $1,427,053
associated with the leased land and buildings and improvements as a cost of
disposal of discontinued operations at September 30, 2005. This loss was
partially offset by a $586,137 gain on settlement of the remaining capital lease
obligations due and is included in the loss on disposal of discontinued
operations at September 30, 2005. In addition, on August 28, 2006 we received
notice from the Georgia landlord indicating that the Georgia subsidiary was in
default under the lease due to its insolvent financial condition. The landlord
agreed to waive the default in return for $75,000 fee to be paid upon
termination of the lease and required that all current and future rights and
obligations under the lease be assigned to GreenMan Technologies, Inc. pursuant
to a March 29, 2001 guaranty agreement. The $75,000 is included in loss from
discontinued operations for the fiscal year ended September 30, 2006 and is
included in Obligations due under lease settlement at September 30, 2006.

      In July 2006 we sold our California subsidiary to a third party for
$1,000. GreenMan Technologies of California, was formed in 2002 to acquire all
of the outstanding common stock of Unlimited Tire Technologies, Inc. an Azusa,
California scrap tire recycling company of which the third party was the
majority owner. The aggregate net losses including the loss on disposal
associated with the discontinued operations of our California subsidiary
included in the results of operations for year ended September 30, 2006 were
approximately $1,005,000. The aggregate net losses associated with our
California subsidiary included in the results for the fiscal year ended 2005
were approximately $1,365,000.

      The major classes of assets and liabilities associated with discontinued
operations were:

<TABLE>
<CAPTION>
                                                                September 30,    September 30,
                                                                    2006             2005
                                                                -------------    -------------
<S>                                                               <C>              <C>
Assets related to discontinued operations:
  Cash ....................................................       $       31       $  109,560
  Accounts receivable, net ................................               --        1,784,997
  Equipment held for resale ...............................               --          539,332
  Other current assets ....................................            7,260          342,596
                                                                  ----------       ----------
    Total current .........................................            7,291        2,776,485
  Property, plant and equipment (net) .....................               --          830,025
  Other ...................................................               --          114,071
                                                                  ----------       ----------
    Total non-current .....................................               --          944,096
                                                                  ----------       ----------
    Total assets related to discontinued operations .......       $    7,291       $3,720,581
                                                                  ==========       ==========

Liabilities related to discontinued operations:
  Accounts payable ........................................       $2,575,134       $3,616,052
  Notes payable, current ..................................          394,887          509,249
  Accrued expenses, other .................................          118,019          792,474
  Capital leases, current .................................          326,795          343,058
  Lease payable, current ..................................               --          145,000
                                                                  ----------       ----------
    Total current .........................................        3,414,834        5,405,833
  Notes payable, non-current ..............................               --          369,727
  Capital leases, non-current .............................               --           70,926
  Lease payable, non-current ..............................               --          555,000
                                                                  ----------       ----------
    Total non-current .....................................               --          995,653
                                                                  ----------       ----------
    Total liabilities related to discontinued operations ..       $3,414,834       $6,401,486
                                                                  ==========       ==========
</TABLE>

      Net sales and (loss) from discontinued operations were as follows:

<TABLE>
<CAPTION>
                                                               September 30,       September 30,
                                                                   2006                2005
                                                               -------------       ------------
<S>                                                             <C>                <C>
Net sales from discontinued operations ............             $2,885,019         $15,369,641
(Loss) from discontinued operations ...............             (1,460,981)         (6,518,532)
</TABLE>


                                      F-14
<PAGE>

                           GreenMan Technologies, Inc.
                   Notes To Consolidated Financial Statements

3.   Property, Plant and Equipment

     Property, plant and equipment consists of the following:

<TABLE>
<CAPTION>
                                                   September 30,    September 30,         Estimated
                                                       2006             2005            Useful Lives
                                                   -------------    ------------       -------------
<S>                                                 <C>             <C>                  <C>
Buildings and improvements ......................   $  1,741,943    $  1,731,279         10-20 years
Machinery and equipment .........................      7,188,119       6,223,775         5-10 years
Furniture and fixtures ..........................        164,025         188,329          3-5 years
Motor vehicles ..................................      3,586,457       3,454,955         3-10 years
Construction in process .........................             --           3,604
                                                    ------------    ------------
                                                      12,680,544      11,601,942
Less accumulated depreciation and amortization ..     (6,873,425)     (6,089,715)
                                                    ------------    ------------
Property, plant and equipment, net ..............   $  5,807,119    $  5,512,227
                                                    ============    ============
</TABLE>

      During March 2004, our Minnesota subsidiary sold all of its land and
buildings to an entity co-owned by an officer for $1,400,000, realizing a gain
of $437,337 which has been recorded as unearned income and classified as a non
current liability in the accompanying financial statements. Simultaneous with
the sale, we entered into an agreement to lease the property back for a term of
12 years at an annual rent of $195,000, increasing to $227,460 over the term of
the lease. The gain will be recognized as income ratably over the term of the
lease. The lease has been classified as a capital lease, and provides for two
additional 4-year extensions. We used $875,000 of the proceeds to repay an
existing mortgage on the property.

      In June 2005, we sold all our Wisconsin land and buildings for
approximately $483,000, realizing a gain of $123,608. We used approximately
$284,000 of the proceeds to repay an existing obligation on the property and
simultaneous with the sale, entered into an agreement to lease the property back
for a period of 90 days. We consolidated all remaining Wisconsin operations into
our Minnesota facility during the quarter ending September 30, 2005. During
fiscal 2005, our Wisconsin subsidiary reached an agreement with the lessor of
certain transportation equipment to buy-out the remaining term of the lease. The
lessor agreed to accept approximately $190,000 in full settlement of our capital
lease obligation with a carrying value of approximately $156,000, resulting in a
loss of approximately $34,000 in connection with this transaction. In addition,
management determined that the carrying value of the purchased transportation
equipment was impaired. Accordingly, we recorded an impairment loss amounting to
$57,183 during the fiscal year ended September 30, 2005 based on the estimated
fair value based on replacement cost of similar equipment and reduced the
remaining estimated useful life to 24 months.

      Depreciation and amortization expense for the fiscal years ended September
30, 2006 and 2005 was $1,522,880 and $2,425,801 respectively, including
depreciation and amortization from discontinued operations of $213,689 and
$1,089,911, respectively.

4.    Acquisition Deposit

      In August 2004, in connection with our Georgia facility we executed a
non-binding letter of intent and escrow agreement with Tires Into Recycled
Energy and Supplies, Inc. ("TIRES"), a leading crumb rubber processor in the
United States. Pursuant to the escrow agreement, we made a "good faith" payment
amounting to $350,000, which was to be applied toward the purchase price upon
completion of the transaction. On December 8, 2004, we executed a new letter of
intent which superseded the August letter of intent in which we (1) leased, with
an option to buy, certain pieces of tire processing equipment owned by TIRES
(the "Equipment Leases"), (2) entered a material supply agreement (the "MSA")
and (3) were granted an exclusive purchase option to acquire additional
operating assets of TIRES. The operating leases were executed in January 2005
but became effective in February and March 2005 and provide for aggregate
monthly payments of $25,300 over terms ranging from 48 to 60 months.

      We also agreed to allow TIRES to retain $101,378 of the "good faith"
payment to upgrade it's existing crumb rubber production capacity and have used
the remaining $248,622 to prepare and move the leased equipment for our use.
Accordingly, during the quarter ended March 31, 2005, the $101,378 was expensed
when it was released from escrow and approximately $243,597 has been capitalized
and was being amortized over the lease terms which ranged from 48 to 60 months.
The remaining balance of $205,306 was written off as a cost of disposal of
discontinued operations.


                                      F-15
<PAGE>

                           GreenMan Technologies, Inc.
                   Notes To Consolidated Financial Statements

4.    Acquisition Deposit - (Continued)

      Pursuant to the terms of the MSA, we were to supply agreed upon minimum
amounts of crumb rubber material to TIRES on a weekly basis. If we do not meet
the minimum weekly requirements, we are assessed a shortfall fee equal to 150%
of the purchase price for any shortfall tonnage. Due to unexpected equipment
downtime and delays in installing the additional rasper which was being leased
from TIRES, we were unable to meet the minimum material requirements during
various periods during fiscal 2005 and as a result, we recorded a shortfall
expense of approximately $382,000 during the fiscal year ended September 30,
2005.

      On June 6, 2005, we negotiated an amendment to the material supply
agreement whereby the minimum weekly requirement was reduced and the price at
which TIRES would purchase material was increased 15 percent for a period of 10
weeks. In return for this short term consideration, we agreed to reduce our
original pricing by 8% on the first 30,000 tons of material purchased by TIRES
subsequent to the 10 week amendment period.

      The exclusive purchase option to acquire additional operating assets of
TIRES was exercisable if predetermined financial performance criteria are met by
TIRES during the subsequent fifteen to twenty four month period after December
8, 2004. The ultimate purchase price was to be determined based on those
results. In return for the exclusive purchase option, we issued 127,389 shares
of our common stock (valued at $200,000) to TIRES. Had we exercised our
exclusive purchase option and closed a transaction, the value of the shares
would have been applied against the purchase price of the assets. If the
exclusive purchase option expired or we decided not to exercise the option,
TIRES would retain a sufficient number of our shares to equal $200,000 (as of
the date that the purchase option expires) and return the balance of such shares
of common stock to us. If at the time the purchase option expired, the value of
the shares were less than $200,000, we would have been required to issue a
sufficient number of additional shares to equal $200,000. If at the time the
purchase option expired, TIRES had not achieved the predetermined financial
performance criteria, TIRES would have had to return to us a sufficient number
of our shares to equal $200,000 at the time.

      In February 2006 in conjunction with the discontinuance of our Georgia
operations (See Note 2), we agreed to sell and assign to TIRES (a) certain truck
tire processing equipment located at our Georgia facility; (b) certain rights
and interests in our contracts with suppliers of scrap truck tires; (c) certain
intangible assets; and (d) allowed TIRES to retain the 127,389 shares of our
common stock and in return received $155,000 in cash proceeds; agreed to
terminate the MSA, Equipment Leases and several other agreements previously
executed between the parties in addition to terminating a December 2004 letter
of intent and exclusive option. Accordingly, at September 30, 2005, included in
loss on disposal of discontinued operations is the $200,000 assigned to the
shares of common stock retained by TIRES.

5.    Credit Facility/Notes Payable

Republic Services of Georgia

      On May 6, 2002 we issued Republic Services of Georgia, LP ("RSLP") a
$743,750 10% promissory note due in March 2007. On July 31, 2005, RSLP agreed to
defer all interest and principal payments due, including nine existing past-due
payments totaling $76,042 through June 2006 at which time all past due interest
and principal payments under the May 6, 2002 promissory note was to be
incorporated into an a new 10% promissory note, payable in 48 monthly
installments commencing July 2006.

      On June 30, 2006 we reached an agreement with RSLP whereby in return for a
payment of $250,000 and the issuance of a $150,000 unsecured promissory note,
RSLP agreed to forgo all remaining amounts due under the revised May 6, 2002
promissory note totaling $766,355 at June 30, 2006. The settlement was
characterized as a troubled debt restructuring and as a result, we realized a
gain on restructuring of $353,476 during the quarter ended June 30, 2006. The
gain is included in other income on the accompanying consolidated statement of
operations. The note bears interest at 10% and is payable in 11 monthly
installments of $5,000 with the remaining balance due June 30, 2007.

First American Credit Facility

      On February 13, 2003, our Iowa subsidiary amended its existing term debt
with First American under the terms of a five-year, $1,760,857 secured term
note. The note was payable in sixty monthly installments of $33,425 and secured
with all Iowa assets. The term note bore interest at 7.5% and the line of credit
bore interest at the prime rate plus 1%.

      On February 10, 2005, First American renewed our working capital line
until February 10, 2006 (subsequently extended to June 15, 2006) and increased
our maximum availability under the line of credit to $800,000. On June 30, 2006,
we used $1,218,746 of the proceeds from the Laurus debt restructuring described
below to pay off all amounts due First American.


                                      F-16
<PAGE>

                           GreenMan Technologies, Inc.
                   Notes To Consolidated Financial Statements

5.    Credit Facility/Notes Payable - (Continued)

June 2004 Laurus Credit Facility

      On June 30, 2004, we entered into a $9 million credit facility with Laurus
Master Fund, Ltd. ("Laurus"), consisting of a $5 million convertible, revolving
working capital line of credit and a $4 million convertible term note. At
closing, we borrowed $2 million under the line of credit and $4 million under
the term loan. We used the proceeds to repay certain existing debt obligations,
financing costs relating to this transaction, and general working capital. On
March 22, 2005, the credit facility was amended to (1) permit us to maintain
overradvances of up to $2,000,000 under the line of credit through December 31,
2005 (subsequently extended to May 31, 2006); (2) defer certain principal
payments on the term note as described below; and (3) reduce the conversion
price on the minimum borrowing note and term note as described below.

      The line of credit had a three-year term and required us to maintain a
minimum borrowing of $1,000,000. Advances generally bore interest at the prime
rate plus 1.0% and were convertible into shares of our common stock at the
option of Laurus. Except for downward adjustments provided in the credit
facility terms described below, the interest rate would not be below 5%. Amounts
advanced under the line were limited to 90% of accounts receivable and 50% of
finished goods inventory as defined, subject to certain limitations. We were
permitted to maintain overadvances of up to $2,000,000 under the line of credit
until June 30, 2006.

      Subject to certain limitations, Laurus had the option to convert the first
$1,000,000 of borrowings under the line of credit into our common stock at a
revised price of $0.79 (85% of the average closing price of our common stock for
the five days immediately preceding March 22, 2005). Each subsequent $1,000,000
of borrowings would be convertible at the higher of $.93 or a 10% premium over
the 22-day trailing average closing price computed on each $1,000,000 increment.
As a result of the reduction in conversion price pursuant to the terms of the
March 22, 2005 amendment, we recorded a beneficial conversion feature of
$598,717. The discount was recorded as additional paid-in-capital and was
amortized to interest as of December 31, 2005.

      The term note also had a three-year term and bore interest at the greater
of prime rate plus 1% or 5%, payable monthly. Monthly principal payments of
$125,000 over the term of the loan commenced on November 1, 2004; however, the
terms of the March 22, 2005 amendment deferred the principal payments otherwise
due from December 1, 2004 through June 30, 2005, until the maturity date of the
term note, at which time the deferred payments and all other outstanding amounts
were due. In addition, Laurus agreed to defer principal payments otherwise due
from November 1, 2005 through June 1, 2006, which were to be payable in full at
maturity.

      Laurus had the option to convert some or all of the note's principal and
interest payments into common stock at a revised fixed conversion price of $.79
on the first $1,000,000 of borrowings, and $.93 on the remaining amounts.
Subject to certain limitations, regular payments of principal and interest were
automatically payable in common stock if the 5-day average closing price of the
common stock immediately preceding a payment date was greater than or equal to
110% of such fixed conversion price. As a result of the change in conversion
price pursuant to the terms of the March 22, 2005 amendment, we recorded an
additional beneficial conversion feature of $1,485,594 on the term note. The
additional discount amount was recorded as paid-in-capital with the portion
attributed to the first $1,000,000 of borrowings, $567,429 which was amortized
to interest expense as of December 31, 2005 with the remaining balance of
$918,165 have been amortized over the remaining term of the note or ratably upon
any partial conversion.

      On July 20, 2005, we issued an additional $1 million convertible term note
to Laurus. The note matured on June 30, 2007 and bore interest at the prime rate
plus 1.75%, payable monthly commencing August 1, 2005. Monthly principal
payments of $58,823.53 over the term of the loan were to commence on February 1,
2006. Laurus subsequently agreed to defer the principal payments otherwise due
from February 1, 2006 through May 1, 2006, until the maturity date of the term
note, at which time the deferred payments and all other outstanding amounts are
due. Laurus had the option to convert some or all of the principal and interest
payments into common stock at a price of $.33 (the average closing price of our
common stock on the American Stock Exchange for the 3-day period ending July 18,
2005).

      In connection with this term note, we issued Laurus an option to purchase
up to an aggregate of 2,413,571 shares of our common stock at an exercise price
equal to $0.01 per share. This option, valued at $401,738, was immediately
exercisable, has a term of ten years, allows for cashless exercise at the option
of Laurus, and does not contain any "put" provisions. Net proceeds received from
issuance of the term note amounted to $955,000 and were allocated to the term
note and the option based on their relative fair values. The note contained a
beneficial conversion feature of $393,939 at issuance based on the intrinsic


                                      F-17
<PAGE>

                           GreenMan Technologies, Inc.
                   Notes To Consolidated Financial Statements

5.    Credit Facility/Notes Payable - (Continued)

value of the shares into which the note is convertible, and a debt issue
discount amounting to $446,738. The beneficial conversion amount was recorded as
paid in capital and was to be amortized to interest expense along with the debt
conversion discount over the two year term of the note or ratably upon any
partial conversion. The terms of the note were substantially similar to our June
2004 credit facility, including similar negative and restrictive covenants, as
well as reporting requirements and default provisions.

      The conversion price applicable to each of the notes and the exercise
price of each of the warrants was previously subject to downward adjustment on a
"full ratchet" basis, if with certain exceptions, we issued shares of our common
stock (or common stock equivalents) at a price per share less than the
applicable conversion or exercise price. These rights have never been enforced
and on April 8, 2006, Laurus agreed to retroactively eliminate their rights to
enforce these provisions

June 2006 Laurus Credit Facility

      On June 30, 2006, we entered into a $16 million amended and restated
credit facility with Laurus (the "New Credit Facility"). The New Credit Facility
consists of (1) a $5 million non-convertible secured revolving note (the
"Revolving Note"); and (2) an $11 million secured non-convertible term note (the
"Term Note"). Unlike the terms of our prior credit facility with Laurus, the New
Credit Facility is not convertible into shares of our common stock.

      The Revolving Note has a three-year term from the closing, bears interest
on any outstanding amounts at the prime rate plus 2% (10.25% at September 30,
2006), with a minimum rate of 8%. Amounts advanced under the line are limited to
90% of accounts receivable and 50% of finished goods inventory, as defined up to
a maximum of $5 million, subject to certain limitations. There are no amounts
outstanding under the Revolving Note at September 30, 2006.

      The Term Loan has a maturity date of June 30, 2009 and bears interest at
the prime rate plus 2% (10.25% at September 30, 2006), with a minimum rate of
8%. Interest on the Term Loan is payable monthly commencing August 1, 2006.
Principal will be amortized over the term of the loan, commencing on July 2,
2007, with minimum monthly payments of principal as follows: (i) for the period
commencing on July 2, 2007 through June 2008, minimum principal payments of
$150,000; (ii) for the period from July 2008 through June 2009, minimum
principal payments of $400,000; and (iii) the balance of the principal will be
payable on the maturity date. In addition, we have agreed to make an excess cash
flow repayment as follows: no later than ninety-five days following the end of
each fiscal year beginning with the fiscal year ending on September 30, 2007, we
have agreed to make a payment equal to 50% of (a) the aggregate net operating
cash flow generated for such fiscal year less (b) aggregate capital expenditures
made in such fiscal year (up to a maximum of 25% of the net operating cash flow
calculated in accordance with clause (a). The Term Loan may be prepaid at any
time without penalty. We used approximately $8,503,000 of the Term Note proceeds
to repay our outstanding indebtedness under our existing credit facility with
Laurus, approximately $1,219,000 to repay in full the indebtedness due First
American Bank; $250,000 to RSLP as part of a settlement agreement (as described
above) and paid approximately $888,000 of costs and fees associated with this
transaction which were expensed at June 30, 2006.

      In connection with the New Credit Facility, we issued Laurus a warrant to
purchase up to an aggregate of 3,586,429 shares of our common stock at an
exercise price equal to $0.01 per share. This warrant, valued at $1,116,927, is
immediately exercisable, has a term of ten years, allows for cashless exercise
at the option of Laurus, and does not contain any "put" provisions. Previously
issued warrants to purchase an aggregate of 1,380,000 shares of our common
stock, which were issued in connection with the original notes on June 30, 2004
were canceled as part of this transaction. The amount of our common stock Laurus
may hold at any given time is limited to no more than 4.99% of our outstanding
stock. The fair value of these terminated warrants was determined to be $31,774
and offset the value of the new warrant issued. In addition, the fair value
associated with the foregone convertibility feature of all previous convertible
amounts was determined to be $740,998 and will also offset the value of the new
warrant issued. As a result of the foregoing, the net value assigned to the new
warrant of $344,155 was recorded as paid in capital and recorded as a reduction
to the carrying value of the refinanced note. The terms of the Term Note are
substantially similar to our June 2004 credit facility, including similar
negative and restrictive covenants, as well as reporting requirements and
default provisions.

      Laurus Funds has agreed that it shall not, on any trading day, be
permitted to sell any common stock acquired upon exercise of this warrant in
excess of 10% of the aggregate numbers of shares of the common stock traded on
such trading day. We have agreed to register for resale under the Securities Act
of 1933 the shares of common stock issuable to Laurus Funds upon exercise of the
aforementioned warrant. We have not yet completed the registration of the
underlying shares and Laurus has waived any default resulting from the delay in
filing until January 30, 2007.


                                      F-18
<PAGE>

                           GreenMan Technologies, Inc.
                   Notes To Consolidated Financial Statements

5.    Credit Facility/Notes Payable - (Continued)

      Pursuant to Statement of Financial Accounting Standards No. 15 "Accounting
by Debtors and Creditors for Troubled Debt Restructuring" ("SFAS 15") the New
Credit Facility will be accounted for as a troubled debt restructuring. It was
determined that, because the effective interest rate of the New Credit Facility
was lower than that of the previous credit facility therefore indicating a
concession was granted by Laurus, we are viewed as a passive beneficiary of the
restructuring, and no new transaction has occurred. Under SFAS 15, a
modification of terms "is neither an event that results in a new asset or
liability for accounting purposes nor an event that requires a new measurement
of an existing asset or liability." Thus, from a debtor's standpoint, SFAS 15
calls for a modification of the terms of a loan to be accounted for
prospectively. As a result, $258,900 of deferred financing fees and $972,836 of
debt discount and beneficial conversion features associated with the previous
credit facility were netted along with the value of the new warrants issued of
$344,155 against the new Term Debt related to the portion of the new debt that
refinanced the original outstanding Laurus debt and related accrued interest
totaling $8,503,416 to provide a net carrying amount of $6,927,525. The carrying
amount of the loan will be amortized over the term of the loan at a constant
effective interest rate of 20% applied to the future cash payments specified by
the new loan.

<TABLE>
<CAPTION>
                                                                                              September 30,   September 30,
Notes payable consists of the following at:                                                       2006            2005
                                                                                              ------------    -----------

<S>                                                                                           <C>             <C>
Line of credit, First American, secured by all assets of GreenMan of Iowa, bearing
  interest at prime plus 1.0% (7.75% at September 30, 2005) ...............................   $         --    $   619,950
Term note payable, First American, secured by assets of GreenMan of Iowa, due in equal
  monthly installments of $33,425 including interest at 7.5% through February 2008 ........             --        742,811
Term note payable, Republic Services of Georgia, LP, interest only at 10% through July
  2006 at which time the outstanding balance will be payable in 48 monthly installments
  including interest at 10% due  July 2010 ................................................             --        717,370
Term note payable, Republic Services of Georgia, LP, unsecured, due in 11 monthly
  installments of $5,000 at 10% interest with the remaining balance due June 30, 2007 .....        147,879             --
Term note payable, Laurus Master Fund, Ltd., interest only at prime plus 2% (10.25% at
  September 30, 2006) through June 30, 2007 followed by 12 monthly principal
  payments of $150,000 plus interest and then 12 monthly principal payments of
  $400,000 plus interest with the remaining balance due June 2009 .........................      9,424,109             --
Term note payable, State of Iowa, secured by certain assets of GreenMan of Iowa, due in
  quarterly installments of $8,449 including interest at 1.5% with the remaining
  principal balance due November 2012 .....................................................        220,506        250,811
Term note payable, State of Iowa, secured by certain assets of GreenMan of Iowa, due in
  32 quarterly installments of $6,920 including interest at 3% through October 2012 .......        151,483        174,193
Term note payable, State of Iowa, secured by certain assets of GreenMan of Iowa, due in
  28 quarterly installments of $16,469 including interest at 2% through July 2013 .........        449,686             --
Other term notes payable and assessments, secured by various equipment with interest
  rates ranging from 0% to 11.26% and requiring monthly installments from $598 to $9,765 ..        439,499        761,615
                                                                                              ------------    -----------
                                                                                                10,833,162      3,266,750

Less current portion ......................................................................       (493,572)    (1,383,008)
                                                                                              ------------    -----------
  Notes payable, non-current portion ......................................................   $ 10,339,590    $ 1,883,742
                                                                                              ============    ===========
</TABLE>

The following is a summary of maturities of carrying values of all notes payable
at September 30, 2006:

         Years Ending September 30,
         2007 .........................         $   493,572
         2008 .........................           2,284,183
         2009 .........................           7,573,527
         2010 .........................             123,179
         2011 .........................             148,858
         2012 and thereafter...........             209,843
                                                -----------
                                                $10,833,162
                                                ===========

The carrying value of the Laurus debt does not equate to the total cash payments
due under the debt as a result of accounting for a troubled debt restructure.
The following is a summary of the cash maturities of the Laurus debt:

         Years Ending September 30,
         2007 .........................         $   450,000
         2008 .........................           2,550,000
         2009 .........................           8,000,000
                                                -----------
                                                $11,000,000
                                                ===========


                                      F-19
<PAGE>

                           GreenMan Technologies, Inc.
                   Notes To Consolidated Financial Statements

5.   Credit Facility/Notes Payable - (Continued)

      Convertible notes payable at September 30, 2005 consisted of the
following:

<TABLE>
<S>                                                                                                      <C>
Line of credit, Laurus, secured by eligible accounts receivable and inventory of GreenMan of Georgia,
  Minnesota and Tennessee, bearing interest at prime plus 1.0%, net of discount of $977,834 ..........   $ 3,290,155
Term note payable, Laurus, secured by machinery and equipment of GreenMan of Georgia, Minnesota and
  Tennessee, due in 33 monthly installments of $125,000 plus interest at prime plus 1.0% and due
  June 30, 2007, net of discount of $361,026 .........................................................     3,138,974
Term note payable, Laurus, secured by machinery and equipment of GreenMan Technologies of Georgia,
  Minnesota and Tennessee, due in 17 monthly installments of $58,824 plus interest at prime plus 1.75%
  commencing February 1, 2006, net of discount of $735,593 ...........................................       264,409
                                                                                                         -----------
                                                                                                           6,693,538

Less current portion .................................................................................    (4,890,642)
                                                                                                         -----------
  Convertible notes payable, non-current portion .....................................................   $ 1,802,896
                                                                                                         ===========
</TABLE>

      Interest expense on the lines of credit and notes payable for the years
ended September 30, 2006 and 2005 amounted to $1,187,870 and $678,602
respectively.

6.    Notes Payable - Related Party

Note Payable - Related Party

      In November 2000, we borrowed $200,000 from a director under an unsecured
promissory note which bears interest at 12% per annum with interest due monthly
and the principal originally due in November 2001. In June 2001 and again in
September 2002, the director agreed to extend the maturity date of note until
November 2004. The director agreed to extend the maturity date several times and
on August 24, 2006, agreed to convert the $200,000 of principal and $76,445 of
accrued interest into 953,259 of unregistered shares of common stock at a price
of $.29 per share which was the closing price of our stock on the date of
conversion.

      Between June and August 2003, two immediate family members of an officer
loaned us a total of $400,000 under the terms of two-year, unsecured promissory
notes which bear interest at 12% per annum with interest due quarterly and the
principal due upon maturity. In March 2004, these same individuals loaned us an
additional $200,000 in aggregate, under similar terms with the principal due
upon maturity March 2006. These individuals each agreed to invest the entire
$100,000 principal balance of their June 2003 notes ($200,000 in aggregate) into
our April 2004 private placement of investment units and each received 113,636
units in these transactions. In addition, the two individuals agreed to extend
the maturity of the remaining balance of these notes, $400,000 at September 30,
2006 until the earlier of when all amounts due under the Laurus credit facility
have been repaid or June 30, 2009. (see Note 5).

      In September 2003, a former officer loaned us $400,000 under a September
30, 2003 unsecured promissory note which bore interest at 12% per annum with
interest due quarterly and the principal due March 31, 2004 (subsequently
extended to September 30, 2004). In 2004, the former officer applied
approximately $114,000 of the balance due him plus $21,000 of accrued interest
to exercise options to purchase 185,000 shares of unregistered common stock. In
addition, he agreed to extend the maturity of the remaining balance of this note
until the earlier of when all amounts due under the Laurus credit facility have
been repaid or June 30, 2009. In July 2006, the former officer assigned $79,060
of the remaining balance to one of an officer's immediate family members noted
above and the remaining balance of $20,260 plus accrued interest of $13,500 to
the officer.

      Between January and June 2006, a director loaned us $155,000 under three
unsecured promissory notes which bear interest at 10% per annum with interest
and principal due during periods ranging from June 30, 2006 through September
30, 2006. On April 12, 2006, the director agreed in lieu of being repaid in cash
at maturity to convert $76,450 (including interest of $1,450) into 273,035
shares of unregistered common stock at a price of $.28 which was the closing
price of our stock on the date of conversion. In addition, on June 5, 2006 the
director agreed to convert $15,226 (including interest of $226) into 42,295
shares of unregistered common stock at a price of $.36 which was the closing
price of our stock on the date of conversion. As of September 30, 2006, the
remaining balance due on this note amounted to $65,000. The director has agreed
be paid $10,000 per month during the quarter ended December 31, 2006 and extend
the remaining $35,000 until the earlier of when all amounts due under the
restructured Laurus credit facility have been repaid or June 30, 2009.


                                      F-20
<PAGE>

                           GreenMan Technologies, Inc.
                   Notes To Consolidated Financial Statements

6.    Notes Payable - Related Party - (Continued)

      The following is a summary of maturities of all related party notes
payable at September 30, 2006:


         Years Ending September 30,
         --------------------------
         2007 .........................      $30,000
         2008 .........................           --
         2009..........................      534,320
                                            --------
                                            $564,320
                                            ========

      Total interest expense for related party notes amounted to $85,612 and
$83,918, for the fiscal years ended September 30, 2006 and 2005, respectively.
Total accrued interest due related parties amounted to $86,229 and $98,739 at
September 30, 2006 and 2005, respectively.

7.    Capital Leases

      We lease various facilities and equipment under capital lease agreements
with terms ranging from 36 months to 240 months and requiring monthly payments
ranging from $479 to $16,250. Assets acquired under capital leases with an
original cost of $3,066,136 and $2,529,832 and related accumulated amortization
of $1,257,455 and $1,016,987 are included in property, plant and equipment at
September 30, 2006 and 2005, respectively. Amortization expense for the years
ended September 30, 2006 and 2005 amounted to $240,488 and $237,054
respectively.

      In July 2002, our Minnesota subsidiary entered into a four-year equipment
lease with a company co-owned by an employee for equipment valued at $146,670.
Under the terms of the lease, we were required to pay $4,394 per month rental
until the lease terminated in July 2006 at which time we purchased the equipment
for $60,000 as provided for in the lease.

      In March 2004, our Minnesota subsidiary leased back their property from a
company co-owned by an employee under a twelve-year lease requiring an annual
rental of $195,000, increasing to $227,460 over the term of the lease. The lease
can be renewed for two additional four-year periods. The lease has been
classified as a capital lease with a value of $1,400,000 (See Note 3).

      In February 2006, we amended our Georgia lease agreement to obtain the
right to terminate the original lease, which had a remaining term of
approximately 15 years, by providing the landlord with six months notice. In the
event of termination, we will be obligated to continue to pay rent until the
earlier to occur of (1) the sale by the landlord of the premises; (2) the date
on which a new tenant takes over; or (3) three years from the date on which we
vacate the property. As a result of the amendment and our decision to dispose of
our Georgia operations, we wrote off the unamortized balance of $1,427,053
associated with the leased land and buildings and improvements as a cost of
disposal of discontinued operations at September 30, 2005. This loss was
partially offset by a $586,137 gain on settlement of the remaining capital lease
obligations due and is included in the loss on disposal of discontinued
operations at September 30, 2005. In addition, on August 28, 2006 we received
notice from the Georgia landlord indicating that the Georgia subsidiary was in
default under the lease due to its insolvent financial condition. The landlord
agreed to waive the default in return for $75,000 fee to be paid upon
termination of the lease and required that all current and future rights and
obligations under the lease be assigned to GreenMan Technologies, Inc. pursuant
to a March 29, 2001 guaranty agreement. The $75,000 is included in loss from
discontinued operations for the fiscal year ended September 30, 2006 and is
included in Obligations due under lease settlement at September 30, 2006.

      During fiscal 2006, we entered into four capital lease agreements with
Maust Asset Management, a company co-owned by one of our employees, for
equipment valued at $423,038. Under the terms of the leases we are required to
pay between $2,543 and $4,285 per month rental for a period of 60 months from
inception. We have the ability to purchase the equipment at the end of each
lease for prices ranging from $11,250 to $15,000 per unit.


                                      F-21
<PAGE>

                           GreenMan Technologies, Inc.
                   Notes To Consolidated Financial Statements

7.    Capital Leases - (Continued)

      The following is a schedule of the future minimum lease payments under the
capital leases together with the present value of net minimum lease payments at
September 30, 2006:

         Years Ending
         September 30,
         -------------
            2007 ..................................   $   376,116
            2008 ..................................       341,380
            2009 ..................................       338,253
            2010 ..................................       349,891
            2011 ..................................       303,076
            2012 and thereafter ...................     1,015,113
                                                      -----------
         Total minimum lease payments .............     2,723,829
         Less amount representing interest ........      (922,197)
                                                      -----------
         Present value of minimum lease payments ..   $ 1,801,632
                                                      ===========

      For the years ended September 30, 2006 and 2005, interest expense on
capital leases amounted to $168,143 and $199,182, respectively.

8.    Commitments and Contingencies

Management Changes

      On April 12, 2006, our Board of Directors named Lyle E. Jensen as
President and Chief Executive Officer succeeding Robert H. Davis, who resigned
those positions, and resigned as a member of our Board of Directors, on the same
day. Mr. Jensen has been a member of our Board of Directors since May 2002, and
previously served as the Chair of the Board's Audit Committee and as member of
the Board's Compensation Committee. Mr. Jensen remains a member of the Board of
Directors, but no longer serves on these committees. Nicholas DeBenedictis, an
outside Director has joined the Compensation Committee and will serve as Audit
Committee Chair.

      We entered into a five-year employment agreement with Mr. Jensen pursuant
to which Mr. Jensen receives a base salary of $195,000 per year. The agreement
automatically renews for one additional year upon each anniversary, unless
notice of non-renewal is given by either party. The agreement may be terminated
without cause on thirty days' notice but provides for payment of twelve months'
salary and certain benefits as a severance payment for termination without
cause. The agreement also provides for incentive compensation based on the
attainment of certain financial and non-financial goals. Mr. Jensen also
received a relocation allowance of $23,603 and a car allowance of $600 per
month. Mr. Jensen has been granted a qualified option under our 2005 Stock
Option Plan to purchase 500,000 shares of the our common stock, par value $.01
per share, with an exercise price of $.28 per share which was the closing price
of our stock on the date of grant. In addition, upon signing of his employment
agreement, Mr. Jensen purchased 500,000 unregistered shares of our common stock
at $.28 per share which was the closing bid price of the common stock on the
date the agreement was executed. In conjunction with Mr. Davis's resignation, we
agreed to the payment of salary and certain benefits for a subsequent twelve
month period which aggregate approximately $300,000 pursuant to certain
contractual obligations.

      In addition, based on the intended sale of our California subsidiary (see
Note 2), notice of termination was provided to our California vice president on
June 30 and we agreed to the payment of salary and certain benefits for a
subsequent twelve month period which aggregate approximately $97,000 pursuant to
certain contractual obligations.

Employment Agreements

      We have employment agreements with three (including Mr. Jensen) of our
corporate officers, which provide for base salaries, participation in employee
benefit programs and severance payments for termination without cause.

Rental Agreements

      Our Iowa subsidiary leases a facility located on approximately 4 acres of
land under a 10-year lease commencing in April 2003 from Maust Asset Management
Company, LLC ("Maust Asset Management"), a company co-owned by one of our
employees. Under the terms of the lease, monthly rental payments of $8,250 on a
triple net basis are required for the first five years increasing to $9,000 on a
triple net basis per month for the remaining five years. The lease also provides
a right of first refusal to purchase the land and buildings at fair market value
during the term of the lease. Maust Asset Management acquired the property from
the former lessor. In April 2005, our Iowa subsidiary entered into an eight-year
lease agreement with Maust Asset Management for approximately 3 acres adjacent
to our existing Iowa facility at monthly rent payments of $3,500.


                                      F-22
<PAGE>

                           GreenMan Technologies, Inc.
                   Notes To Consolidated Financial Statements

8.    Commitments and Contingencies

      Our California subsidiary leased approximately 45,000 square feet of a
building situated on approximately 1.5 acres of land for $1,250 per month. The
lease expired in April 2006 but we remained a tenant-at-will through the July
17, 2006 sale of GreenMan of California (see Note 2).

      We lease approximately 3,380 square feet of office space from an unrelated
third party for our corporate headquarters pursuant to a five-year lease that
expires in May 2008. In June 2004, we amended this lease to include an
additional 1,125 square feet of office space for an additional monthly rent of
$1,500. In conjunction with the relocation of corporate headquarters from
Massachusetts to Minnesota we terminated our lease for our former headquarters
effective November 1, 2006. In return for the termination, we gave our landlord
$50,000 and 65,000 shares of our common stock (valued at $32,500). We are
allowed to remain in the existing space through December 31, 2006. As a result
of settlement, we recorded a lease settlement expense of $54,360 at September
30, 2006. In addition, as part of the settlement agreement, the landlord agreed
to provide us with approximately 1,100 square feet of office space for 12 months
commencing January 1, 2007 at no cost (valued at $15,000).

      For the years ended September 30, 2006 and 2005, total rental expense in
connection with all non-cancellable real estate leases amounted to $219,840 and
$261,145, respectively including $141,000 and 123,000, respectively per year
associated with related-party leases.

      We also rent various vehicles and equipment from third parties under
non-cancellable operating leases with monthly rental payments ranging from
$1,500 to $2,683 and with terms ranging from 38 to 47 months. In addition, we
rent several pieces of equipment on a monthly basis from a company co-owned by
an employee at monthly rentals ranging from $263 to $1,295. In January 2005, we
entered into three new equipment lease agreements with Maust Asset Management in
which we are required to pay between $1,500 and $2,683 per month rental and have
the ability to purchase the equipment at the end of the lease for between
$12,000 and $16,000.

      For the fiscal years ended September 30, 2006 and 2005, total rent expense
in connection with non-cancellable operating vehicle and equipment leases
amounted to $68,837 and $58,805, respectively, of which, $68,199 and $51,149
were to related parties. The total future minimum rental commitment at September
30, 2006 under the above operating leases are as follows:

 Year ending September 30:            Real Estate      Equipment        Total
                                      -----------     ----------      ----------
    2007 .........................      $147,570      $   68,199      $  215,769
    2008 .........................       145,500          19,416         164,916
    2009 .........................       150,000              --         150,000
    2010 .........................       150,000              --         150,000
    2011 .........................       150,000              --         150,000
    2012 and thereafter ..........       228,500              --         228,500
                                        --------      ----------      ----------
                                        $971,570      $   87,615      $1,059,185
                                        ========      ==========      ==========

Litigation

      As of September 30, 2006, approximately 14 vendors of our GreenMan
Technologies of Georgia, Inc. and GreenMan Technologies of Tennessee, Inc.
subsidiaries had commenced legal action, primarily in the state courts of
Georgia, in attempts to collect approximately $1.4 million of past due amounts,
plus accruing interest, attorneys' fees, and costs, all relating to various
services rendered to these subsidiaries. The largest individual claim is for
approximately $650,000. As of September 30, 2006, 5 vendors had secured
judgments in their favor against GreenMan Technologies of Georgia, Inc. for an
aggregate of approximately $237,000. As previously noted, all of GreenMan
Technologies of Tennessee, Inc.'s assets were sold in September 2005 and
substantially all of GreenMan Technologies of Georgia, Inc.'s assets were sold
as of March 1, 2006. All proceeds from these sales were retained by our secured
lender and these subsidiaries have no substantial assets. We are therefore
currently evaluating the alternatives available to these subsidiaries.

      Although GreenMan Technologies, Inc. was not a party to any of these
vendor relationships, three of the plaintiffs have named GreenMan Technologies,
Inc. as a defendant along with our subsidiaries. We believe that GreenMan
Technologies, Inc. has valid defenses to these claims, as well as against any
similar or related claims that may be made against us in the future, and we
intend to defend against any such claims vigorously. 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.


                                      F-23
<PAGE>

                           GreenMan Technologies, Inc.
                   Notes To Consolidated Financial Statements

9.    Stockholders' Equity

Increase in Authorized Shares of Common Stock

      On June 16, 2005, our stockholders approved an amendment to our Rested
Certificate of Incorporation to increase the number of authorized shares of our
common stock from 30,000,000 to 40,000,000.

Elimination of the Description of Class A Convertible Preferred Stock

      On June 16, 2005, our stockholders approved an amendment to our Restated
Certificate of Incorporation to eliminate the description of Class A Convertible
Preferred Stock due to the fact no such shares were authorized for issuance
under the Restated Certificate of Incorporation.

Other Common Stock Transactions

      On April 12, 2006, our Chief Executive Officer purchased 500,000 shares of
our unregistered common stock (see Note 8) and on July 31, 2006 our Chief
Financial Officer purchased 50,000 unregistered shares of common stock.

      During the quarter ended June 30, 2006, a director agreed to convert
$90,000 principal and $1,676 interest due him under certain unsecured promissory
notes payable into 315,330 shares of our unregistered common stock. (see Note 6)
During the year ended September 30, 2006 several directors and officers agreed
to accept 231,695 shares of unregistered common stock (valued at $82,046) in
lieu of cash for certain director's fees and expenses due the individuals. In
addition, we issued 133,330 shares of unregistered stock (valued at $30,000) to
a third party for consulting services rendered during fiscal 2006.

      On August 24, 2006, a director agreed to convert $200,000 of principal and
$76,445 of accrued interest due him under an unsecured promissory note into
953,259 unregistered shares of common stock. (see Note 6)

1993 Stock Option Plan

      The 1993 Stock Option Plan was established to provide stock options to our
employees, officers, directors and consultants. On March 29, 2001, our
stockholders approved an increase to the number of shares authorized under the
Plan to 3,000,000. This plan expired in June 2004.

      Stock options and activity under the Plan is summarized as follows:

<TABLE>
<CAPTION>
                                                        Year Ended                   Year Ended
                                                    September 30, 2006           September 30, 2005
                                                   ---------------------       -----------------------
                                                                Weighted                      Weighted
                                                                 Average                      Average
                                                                Exercise                      Exercise
                                                    Shares        Price         Shares         Price
                                                   ---------    --------       ---------      --------
<S>                                                <C>            <C>          <C>            <C>
Outstanding at beginning of period                 1,660,356      $ .85        1,670,356      $ .87
Granted                                                   --         --               --         --
Canceled                                            (628,000)       .94          (10,000)      1.58
Exercised                                                 --         --               --         --
                                                   ---------                   ---------
Outstanding at end of period                       1,032,356        .82        1,660,356        .86
                                                   =========                   =========
Exercisable at end of period                       1,022,356        .81        1,578,156        .85
                                                   =========                   =========
Reserved for future grants at end of period               --                          --
                                                   =========                   =========
Weighted average fair value of options
   granted during the period                                      $  --                       $  --
</TABLE>

Information pertaining to options outstanding under the plan at September 30,
2006 is as follows:

<TABLE>
<CAPTION>
                                Options Outstanding                  Options Exercisable
                        -------------------------------------       ----------------------
                                       Weighted
                                        Average      Weighted                     Weighted
                                       Remaining     Average                       Average
Exercise                  Number      Contractual    Exercise         Number      Exercise
Prices                  Outstanding       Life         Price        Exercisable     Price
------                  -----------   -----------    --------       -----------   --------
<S>                     <C>                <C>         <C>           <C>            <C>
$  .38 -   .53            504,462           3.8        $ .48           504,462      $ .48
$  .84 -  1.09            477,894           2.3         1.06           477,894       1.06
$ 1.35 - $1.80             50,000           4.6         1.80            40,000       1.80
                        ---------                                    ---------
                        1,032,356           5.4        $ .82         1,022,356      $ .81
                        =========                                    =========
</TABLE>


                                      F-24
<PAGE>

                           GreenMan Technologies, Inc.
                   Notes To Consolidated Financial Statements

9.    Stockholders' Equity - (Continued)

2004 and 2005 Stock Option Plans

      On April 21, 2004, our Board of Directors adopted the 2004 Stock Option
Plan (the "2004 Plan") subject to ratification by our stockholders. During May
and August 2004, the Board granted options to purchase 538,000 shares of our
common stock under the 2004 Plan at prices ranging from $1.05 to $1.24 and
having a weighted average fair value of $.32 per share. Subsequently, the Board
chose not to submit the 2004 Plan for ratification by our stockholders and the
plan and all granted options were terminated by our Board on March 18, 2005, and
all options granted under that plan have been terminated.

      In addition, on March 18, 2005, our Board of Directors adopted the 2005
Stock Option Plan (the "2005 Plan"), which was subsequently approved by our
stockholders on June 16, 2005. The options granted under the 2005 Stock Option
Plan may be either options intended to qualify as "incentive stock options"
under Section 422 of the Internal Revenue Code of 1986, as amended; or
non-qualified stock options. During the fiscal year ended September 30, 2006,
929,000 qualified options in aggregate were granted with 792,000 options having
an exercise price of $.28 per share and 137,000 having an exercise price of $.36
per share. All options vest annually at 20% per year from date of grant and have
a ten year term. Options granted during fiscal 2006 had a weighted average
exercise price of $.29 per share, a weighted average fair value on date of grant
of $.12 per share and a weighted average contractual remaining life of 9.6
years. No options were vested at September 30, 2006.

Non-Employee Director Stock Option Plan

      Under the terms of our 1996 Non-Employee Director Stock Option Plan on a
non-employee director's initial election to the Board of Directors, they are
automatically granted an option to purchase 2,000 shares of our common stock.
Each person who was a member of the Board of Directors on January 24, 1996, and
was not an officer or employee, was automatically granted an option to purchase
2,000 shares of our common stock. In addition, after an individual's initial
election to the Board of Directors, any director who is not an officer or
employee and who continues to serve as a director will automatically be granted,
on the date of the annual meeting of stockholders, an option to purchase an
additional 2,000 shares of our common stock. The exercise price per share of
options granted under the Non-Employee Director Stock Option Plan is 100% of the
fair-market value of our common stock on the business day immediately prior to
the date of the grant and is immediately exercisable for a period of ten years
from the date of the grant.

      The Board of Directors has reserved 60,000 shares of our common stock for
issuance under this plan and as of September 30, 2006, options to purchase
38,000 shares of our common stock have been granted of which 28,000 are
outstanding and exercisable at prices ranging from $0.38 to $1.95. During fiscal
2006, the Compensation Committee agreed to discontinue future option grants
pursuant to the Non-Employee Director Stock Option Plan.

      During the fiscal year ended September 30, 2005 options were granted to
purchase 6,000 shares of common stock at $.51 per share. The options are
exercisable for a period of ten years. The weighted average fair value of the
options granted during the year ended September 30, 2005 was $.16 per share. At
September 30, 2006, options outstanding had a weighted average exercise price of
$1.10 per share and a weighted average contractual life of 6.5 years.

Other Stock Options and Warrants

      On June 30, 2004, we issued Laurus a warrant to purchase up to 990,000
shares of our common stock at prices ranging from $1.63 to $2.29 and a warrant
to purchase up to 390,000 shares of our common stock at prices ranging from
$1.56 to $2.18. These warrants were terminated in conjunction with the June 2006
Laurus refinancing. (see Note 5). In addition, we issued a warrant to purchase
up to 270,000 shares of our common stock at prices ranging from $1.64 to $2.29
for investment banking services. The warrants vested immediately and have a
five-year term.

      On July 20, 2005, we issued Laurus an option to purchase up to an
aggregate of 2,413,571 shares of our common stock at an exercise price equal to
$0.01 per share. This option, valued at $401,738, is immediately exercisable,
has a term of ten years, allows for cashless exercise at the option of Laurus,
and does not contain any "put" provisions.

      On June 30, 2006, we issued Laurus a warrant to purchase up to an
aggregate of 3,586,429 shares of our common stock at an exercise price equal to
$0.01 per share. This option, valued at $1,116,927, is immediately exercisable,
has a term of ten years, allows for cashless exercise at the option of Laurus,
and does not contain any "put" provisions.


                                      F-25
<PAGE>

                           GreenMan Technologies, Inc.
                   Notes To Consolidated Financial Statements

9.     Stockholders' Equity - (Continued)

Information pertaining to all other options and warrants granted and outstanding
is as follows:

<TABLE>
<CAPTION>
                                                        Year Ended                   Year Ended
                                                    September 30, 2006           September 30, 2005
                                                   ---------------------       -----------------------
                                                                Weighted                      Weighted
                                                                 Average                      Average
                                                                Exercise                      Exercise
                                                    Shares        Price         Shares         Price
                                                   ---------    --------       ---------      --------
<S>                                                <C>            <C>          <C>             <C>
Outstanding at beginning of period                 7,015,574      $ .98        4,756,003       $1.55
Granted                                            3,586,429        .01        2,413,571         .01
Canceled                                          (1,648,400)      1.80         (154,000)       3.36
Exercised                                                 --         --               --          --
                                                   ---------                   ---------
Outstanding at end of period                       8,953,603        .44        7,015,574         .98
                                                   =========                   =========
Exercisable at end of period                       8,948,603        .44        6,985,574         .98
                                                   =========                   =========

Weighted average fair value of options
granted during the period                                         $ .31                        $ .30

<CAPTION>
                                Options Outstanding                  Options Exercisable
                        -------------------------------------       ----------------------
                                       Weighted
                                        Average      Weighted                     Weighted
                                       Remaining     Average                       Average
Exercise                  Number      Contractual    Exercise         Number      Exercise
Prices                  Outstanding       Life         Price        Exercisable     Price
------                  -----------   -----------    --------       -----------   --------
<S>                     <C>                <C>         <C>           <C>            <C>
$  .01 - 1.09           7,831,497          7.74        $ .23         7,831,497      $ .23
$  1.50 - 4.50          1,092,106          1.35         1.82         1,087,106       1.82
$  5.00 - 5.65             30,000           .25         5.65            30,000       5.65
                        ---------                                    ---------
                        8,953,603          6.94        $ .44         8,948,603      $ .44
                        =========                                    =========
</TABLE>

Common Stock Reserved

      We have reserved common stock at September 30, 2005 as follows:

         Stock option plans .....................        1,989,356
         Other stock options ....................          882,500
         Other warrants .........................        8,071,103
                                                        ----------
                                                        10,942,959
                                                        ==========

10.   Employee Benefit Plan

      Effective August 1999, we implemented a Section 401(k) plan for all
eligible employees. Employees are permitted to make elective deferrals of up to
15% of employee compensation and employee contributions to the 401(k) plan are
fully vested at all times. We may make discretionary contributions to the 401(k)
plan which become vested over a period of five years. There were no corporate
contributions to the 401(k) plan during the years ended September 30, 2006 and
2005, respectively.

11.   Segment Information

      We operate in one business segment, the collecting, processing and
marketing of scrap tires to be used as feedstock for tire derived fuel, civil
engineering projects and/or for further processing into crumb rubber.

12.   Major Customers

      During the fiscal years ended September 30, 2006 and 2005, no one customer
accounted for more than 10% of our consolidated net sales.


                                      F-26
<PAGE>

                           GreenMan Technologies, Inc.
                   Notes To Consolidated Financial Statements

13.   Income Taxes

      The provision for income taxes was comprised of the following amounts for
the years ended:

                                                  September 30,    September 30,
                                                      2006             2005
                                                  -------------    -------------
Current:
Federal ........................................     $     --        $270,000
State ..........................................       65,337           4,745
                                                     --------        --------
                                                       65,337         274,745
Deferred federal and state taxes ...............           --              --
                                                     --------        --------
Total provision for income  taxes ..............     $ 65,337        $274,745
                                                     ========        ========

      The current state taxes result from income in states where we have no net
operating loss carry forwards. The provision for deferred income taxes reflect
the impact of "temporary differences" between amounts of assets and liabilities
recorded for financial reporting purposes and the amounts recorded for income
tax reporting purposes.

      The difference between the statutory federal income tax rate of 34% and
the effective rate is primarily due to net operating losses incurred by us and
the provision of a valuation reserve against the related deferred tax assets.

The following differences give rise to deferred income taxes:

                                             September 30,       September 30,
                                                 2006                2005
                                             -------------       -------------

Net operating loss carry forwards ........    $ 12,961,000       $ 11,835,000
Differences in fixed asset bases .........        (503,000)           522,000
Capital loss carryover ...................       1,287,000                 --
Other, net ...............................         543,000          1,296,000
                                              ------------       ------------
                                                14,288,000         13,653,000
Valuation reserve ........................     (14,288,000)       (13,653,000)
                                              ------------       ------------
Net deferred tax asset ...................    $         --       $         --
                                              ============       ============

      Previously, we had recorded a full valuation allowance on the net
operating loss carry forwards and other components of the deferred tax assets
based on our expected ability to realize the benefit of those assets. In the
year ending September 30, 2002, we reduced the valuation allowance by $270,000
based on our net income before taxes in the year then ending as well as expected
net income before income taxes for the next fiscal year.

      Based on the unforeseen magnitude of our quarterly and year to date
losses, we determined the near-term realizability of the $270,000 non-cash
deferred tax asset to be questionable and therefore provided a valuation
allowance on the entire amount during the first quarter of our fiscal year ended
September 30, 2005.

The change in the valuation reserve is as follows:

                                                   Year Ended      Year Ended
                                                  September 30,   September 30,
                                                      2006            2005
                                                  -------------   ------------
Balance at beginning of period .................   $13,653,000     $ 8,364,000
Increase due to rate differentials and
   current period operating results ............       635,000       5,289,000
                                                   -----------     -----------
Balance at end of period .......................   $14,288,000     $13,653,000
                                                   ===========     ===========

      As of September 30, 2006, we had net operating loss carry forwards of
approximately $36 million including a net operating loss of $33 million and a $3
million capital loss carry forwards. The Federal and state net operating loss
carry forwards expire in varying amounts beginning in 2013 and 2007,
respectively. In addition, we have Federal tax credit carry forwards of
approximately $17,000 available to reduce future tax liabilities. The Federal
tax credit carry forwards expire beginning in 2013. Use of net operating loss
and tax credit carry forwards maybe subject to annual limitations based on
ownership changes in our common stock as defined by the Internal Revenue Code.

14.   Fair Value of Financial Instruments

      At September 30, 2006 and 2005, our financial instruments consist of
accounts receivable, accounts payable and notes payable to banks and others.
These instruments approximate their fair values as these instruments are either
due currently or were negotiated currently and bear interest at market rates.


                                      F-27
<PAGE>

                                   SIGNATURES

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

                                             GreenMan Technologies, Inc.

                                                   /s/ Lyle Jensen
                                                   ---------------
                                                       Lyle Jensen
                                                 Chief Executive Officer

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant in the capacities and on the dates
indicated.

<TABLE>
<CAPTION>
        Signature                               Title(s)                              Date
        ---------                               --------                              ----

<S>                            <C>                                              <C>
  /s/ Maurice E. Needham                  Chairman of the Board                 December 14, 2006
  ----------------------
    Maurice E. Needham

     /s/ Lyle Jensen               Chief Executive Officer, President           December 14, 2006
     ---------------                          and Director
       Lyle Jensen

   /s/ Charles E. Coppa                 Chief Financial Officer,
   --------------------                  Treasurer and Secretary
     Charles E. Coppa          (Principal Financial Officer and Principal       December 14, 2006
                                           Accounting Officer)

     /s/ Lew F. Boyd                            Director                        December 14, 2006
     ---------------
       Lew F. Boyd

    /s/ Dr. Allen Kahn                          Director                        December 14, 2006
    ------------------
      Dr. Allen Kahn

/s/ Nicholas DeBenedictis                       Director                        December 14, 2006
-------------------------
  Nicholas DeBenedictis
</TABLE>