U.S.
Securities and Exchange Commission
 Washington,
D.C. 20549
 
 Form
10-KSB
 
 (Mark
One)
 ☒
              ANNUAL
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT OF
      1934
 
 For
the fiscal year ended September 30, 2008
 
 OR
 
 ☐
              TRANSITION
      REPORT UNDER SECTION
      13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
  1934
 
 Commission
File Number1-13776
 
 GreenMan Technologies,
Inc.
 (
Name of small business issuer  in its charter)
 
 Delaware
              71-0724248(State
      or other jurisdiction of incorporation or organization)
              (I.R.S.
      Employer Identification No.)205 South Garfield,
      Carlisle, Iowa
              50047(Address
      of principal executive offices)
              (Zip
      Code)
 
 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 ☐  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.    ☒
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).   ☐
 
 The
issuer’s revenues for the fiscal year ended September 30, 2008 were
$26,748,773.
 
 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 January 8,
2009 was $5,784,271.
 
 As
of January 8, 2009, 30,880,435 shares of common stock of issuer were
outstanding.
 
 Transitional Small Business Disclosure
Format (check
one)         Yes☐No☒
  1
  
 GREENMAN
      TECHNOLOGIES, INC.
                INDEXPagePART
      IItem
      1.
              
              Description
      of Business
              
              3Item
      2.
              
              Description
      of Properties
              
              6Item
      3.
              
              Legal
      Proceedings
              
              6Item
      4.
              
              Submission
      of Matters to a Vote of Security Holders
              
              7PART
      IIItem
      5.
              
              Market
      for Common Equity and Related Stockholder Matters and Small Business
      Issuer's Purchases of Equity Securities
              
              7Item
      6.
              
              Management's
      Discussion and Analysis of Plan of Operation
              
              8Item
      7.
              
              Financial
      Statements
              
              13Item
      8.
              
              Changes
      in and Disagreements with Accountants on Accounting and
                Financial
      Disclosure
              
              13Item
      8A(T)
              
              Controls
      and Procedures
              
              13PART
      IIIItem
      9.
              
              Directors,
      Executive Officers, Key Employees and Corporate Governance; Compliance
      with Section 16(a) of the Exchange Act
              
              14Item
      10.
              
              Executive
      Compensation
              
              16Item
      11.
              
              Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
              
              19Item
      12.
              
              Certain
      Relationships and Related Transactions and Director
      Independence
              
              20Item
      13.
              
              Exhibits
              
              21Item
      14.
              
              Principal
      Accountant Fees and Services
              
              23SignaturesExhibits
 
  2
  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. Such statements 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 operated as a Delaware corporation since
1995. At September 30, 2008, GreenMan was comprised of two business segments,
the tire recycling operations and the molded recycled rubber products
operations. As described below under the caption “Recent Developments,” our
business changed substantially in November 2008, when we sold substantially all
of the assets of our tire recycling operations. Because we operated these assets
throughout the fiscal year covered by this Annual Report on Form 10-KSB, we have
included in this Annual Report relevant information on this business segment.
Words such as “today,” “currently” and other similar expressions referring to
the present or current operations of the tire recycling business refer to the
operations of that business as of September 30, 2008.  Investors
should understand, however, that our current business excludes such
operations.
  The
tire recycling operations located in Savage, Minnesota and Des Moines, Iowa
collect, process and market scrap tires in whole, shredded or granular form. We
are paid a fee to collect, transport and process scrap tires (i.e., collection/processing
revenue) in whole or into two inch or smaller rubber chips which are then sold
(i.e., product
revenue).
  On
October 1, 2007, we acquired Welch Products, Inc. (“Welch”), a company
headquartered in Carlisle, Iowa, which specializes in designing, developing, and
manufacturing of environmentally responsible products using recycled materials,
primarily recycled rubber. Welch’s patented products and processes include
playground safety tiles, roadside anti-vegetation products, construction molds
and highway guard-rail rubber spacer blocks. Through its prior acquisition of
Playtribe, Inc., Welch also provides innovative playground design, equipment and
installation.
  Recent Developments
  On
September 12, 2008 we executed an Asset Purchase Agreement with Liberty Tire
Services of Ohio, LLC, a wholly-owned subsidiary of Liberty Tire Services, LLC
(“LTS”), the largest tire recycling company in the United States for sale of our
Tire Recycling Business, subject to shareholder approval. On November 13, 2008
our shareholders approved the sale and on November 17, 2008 we completed the
divestiture of substantially all of the assets of our GreenMan Technologies of
Minnesota, Inc. and GreenMan Technologies of Iowa, Inc. subsidiaries, which had
operated our tire recycling business, for approximately $27.5 million in
cash.
  We
used approximately $17.7 million of the proceeds of this sale to retire certain
transaction related obligations and other debt including approximately $12.8
million due Laurus Master Fund, Ltd., and will have approximately $9.8 million
of available cash before estimated transaction related income taxes and other
costs which we estimate to be approximately $1.6 million.
  In
the first quarter of fiscal 2008, our Board of Directors concluded that we would
be unable to meet our monthly principal payment obligations to Laurus, which
were scheduled to increase significantly on October 1, 2008 or to retire the
debt when it matured in June 2009. The board of directors also believed that any
material modification to the terms and maturity of debt to Laurus would be
extremely costly. Accordingly, our Board of Directors and management began to
actively explore strategic alternatives during the first quarter of fiscal 2008,
meeting with over 20 entities since the first quarter of fiscal 2008 to discuss
various potential strategic alternatives. We believe that the sale of the tire
recycling business is in the best interests of our shareholders because it
provided us with immediately available funds to pay off a majority of our
outstanding indebtedness and because it permits us to focus on growing our
molded rubber products and renewable fuel/alternative energy business
units.
  In
addition, in September 2008 we announced the formation of a new subsidiary,
GreenMan Renewable Fuel and Alternative Energy, Inc.  Our primary
objective for this subsidiary is to pursue licenses, joint-ventures and
long-term contracts focused on the commercialization of existing and late-stage
development products and processes in green-based technologies including
renewable fuels and alternative energy. There has been significant global
investment made over the past several years in the area of renewable fuels,
alternative energy and clean-tech technologies and management does not see this
momentum slowing down. Our initial efforts to date have focused on rubber-based
opportunities such as tire gasification and alternative energy generation, but
we have recently begun expanding our focus into several other non-rubber based
sectors which we believe have large commercial market potential. We anticipate
devoting increasing resources over the next fiscal year to exploring our
heightened participation in this fast growing global initiative. To date,
GreenMan Renewable Fuel and Alternative Energy has generated no revenues and has
not incurred any operating expenses.
  3
   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:
  ·
              local,
      regional and national tire stores;
  ·
              tire
      manufacturing plants; and
  ·
              illegal
      tire piles being cleaned-up by state, county and local governmental
      entities.
  The
      tires we collect are processed and
sold:
  ·
              as
      tire-derived fuel used in lieu of coal by pulp and paper producers, cement
      kilns and electric utilities;
  ·
              as
      a substitute for crushed stone in civil engineering applications such as
      road beds, landfill construction or septic field construction;
      or
  ·
              as
      crumb rubber (rubber granules) and used for playground and athletic
      surfaces, running tracks, landscaping/groundcover applications and bullet
      containment systems.
  Our
molded recycled rubber products operations specialize in the design,
development, and manufacturing of market-branded, recycled-content products and
services that provide schools and municipalities with environmentally
responsible products to create safer work and play environments. Welch's
patented cold-cured products and processes include playground safety tiles,
roadside anti-vegetation products, construction molds and highway guard-rail
rubber spacer blocks. Welch’s Duromat Extended LifeTM playground safety tiles are
manufactured with a patented “cold-cure” process that allows high quality crumb
rubber tiles to have a unique long life, even in extreme hot and cold
temperatures. Welch also provides innovative playground design, equipment and
installation.
  Manufacturing/Processing
  Our
tire shredding operations currently have the capacity to process about 15
million passenger tire equivalents annually. Our continuing operations collected
approximately 13.2 million passenger tire equivalents in the fiscal year ended
September 30, 2008 compared to approximately 12.8 million passenger tire
equivalents during the year ended September 30, 2007.
  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 served by our molded recycled rubber
products operations.
  Our
molded recycled rubber products operations currently have the capacity to
produce approximately 120,000 standard playground tile equivalents annually.
During the fiscal year ended September 30, 2008 they produced approximately
78,000 standard playground tile equivalents. In addition, Welch has an exclusive
five-year manufacturing and supply agreement with a third party based in China
for distribution of certain proprietary rubber and plastic molded
products.
  Raw
Materials
  We
believe we have access to a supply of tires sufficient to meet our requirements
for the foreseeable future. According to the 2007 Scrap Tire and Rubber User’s
Directory, in 2006 approximately 300 million passenger tire equivalents
(approximately one per person per year) were discarded in the United States
(referred to as “current generation scrap tires”) in addition to an estimated
several hundred million scrap passenger tire equivalents already stockpiled in
illegal tire piles. Additionally, approximately 237 million passenger tire
equivalents are currently recycled, of which approximately 133 million are
burned as tire-derived fuel; 46 million are used in civil engineering
applications; and 58 million are used in various other applications such as
crumb rubber production, retreading and export.  The approximately 63
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 from both the scrap tire processing
and crumb rubber feedstock perspectives.
  4
   Customers
  Our
tire processing customers 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 2008 and 2007, no single customer accounted for more than 10% of our
total net sales. We do not have any
long-term tire supply 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.
  Our
molded recycled rubber products customers primarily consist of schools,
community and state parks, governmental agencies and child care
centers.  While we utilize the four business development and product
endorsement agreements noted below to procure potential business, typically our
customers will be individual entities within the respective school districts.
Therefore we do not believe that the loss of any individual customer would have
a material adverse effect on our business. During 2008 no single customer
accounted for more than 10% of our total net sales. We do not have any long-term
purchase contracts which require any customer to purchase any minimum amount of
products from us. 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
  Our
tire processing operations 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.
  Our
molded recycled rubber products operations has created a unique patented
marketing program focused on: (1) improving playground safety and accessibility;
(2) lowering playground maintenance costs; and (3) mitigating playground
liability risks for schools, community and state parks, and child care centers.
We utilize an experienced in-house sales staff for securing new accounts and
marketing product offerings. In June 2008, Welch through one of its
subsidiaries, signed new five-year business development and product endorsement
agreements with the state school board associations of Iowa, Missouri, Minnesota
and California to provide state-of-the-art playground compliance programs to
their member school districts.  Under the brand name of the National
Playground Compliance Group, (NPCG), the company’s playground compliance
programs offer school districts a full portfolio of safety design assessments,
playground and outdoor fitness equipment, recycled rubber surfacing, and
installation solutions with an integrated approach to child safety, American
Disabilities Act (“ADA”) accessibility and risk
mitigation.  Additionally, NPCG will assist school districts in
identifying financing alternatives for their playground projects.
  Competition
  Our tire processing operations 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 such as the acquisition of Welch Products.  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.
  Our molded recycled rubber products
operations also competes in a highly fragmented and decentralized market with a
large number of small competitors who provide alternatives to our patented
cold-cured molded tiles such as “pour-in-place surfacing materials” or
loose-fill surfacing materials (e.g., wood chips, mulch, sand, and pea gravel).
In addition, many competitors sell only components of the total project
utilizing traditional distributor channels as compared to Welch which sells
directly to the end customer complete project management, turn-key installation
services and safety certification. During 2007, a new market requirement created
by the American Disabilities Act (“ADA”) requires schools and other public
playgrounds to provide all children access to outdoor play.  We
believe that loose-fill surfacing is not consistently maintained to proper
safety levels and does not allow children in wheelchairs or with other
disabilities to easily use playground equipment. Welch  playground
tiles are fully-ADA compliant and, during independent tests performed by the
National Program for Playground Safety, demonstrated a 75 percent reduction in
emergency room injuries given proper supervision.
  Government
Regulation
  Our
tire processing operations 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.
  5
   Protection
of Intellectual Property Rights and Proprietary Rights
  None
of the equipment or machinery that we currently use or intend to use in our
scrap tire processing operations is proprietary. Any competitor can acquire
equivalent equipment and machinery on the open market.  Our Welch
subsidiary has been granted three U.S. patents for various molded products and
one for its method for making cold cured composite molded articles. In addition,
Welch has been granted ten trademarks.
  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, 2008, we had 88 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.”) This lease was terminated on November 17, 2008 in conjunction
with the Midwest divestiture.
  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.”) This lease was terminated
on November 17, 2008 in conjunction with the Midwest divestiture.
  Our
Iowa molded products location consists of production facilities and office space
situated on approximately four acres which were purchased in 2006.
  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.
  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. During fiscal 2008, both companies vacated the
leased property.
  We rent approximately 1,100 square feet
of office space in Lynnfield, Massachusetts, the site of our former corporate
headquarters, on a rolling six-month basis at $1,250 per month.
  We
consider our properties in good condition, well maintained and generally
suitable to carry on our business activities for the foreseeable
future.
  Item
3.          Legal
Proceedings
  As
previously disclosed 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 Laurus, our secured lender, and these subsidiaries have no
assets.  Several vendors of these subsidiaries commenced legal action,
primarily in the state courts of Georgia, in attempts to collect past due
amounts, plus accruing interest, attorneys’ fees, and costs, all relating to
various services rendered to these subsidiaries.  Although GreenMan
Technologies, Inc. itself was not a party to any of these vendor relationships,
three of the plaintiffs, representing approximately $900,000 of these claims,
have named GreenMan Technologies, Inc. as a defendant along with GreenMan
Technologies of Georgia, Inc.
   6
   On
June 27, 2008, GreenMan Technologies of Georgia, Inc. filed for liquidation
under Chapter 7 of the federal bankruptcy laws in the Bankruptcy Court of the
Middle District of Georgia and a trustee was appointed.   As a
result of the bankruptcy proceedings all pending litigation was stayed and
GreenMan Technologies of Georgia, Inc. was de-consolidated from our financial
statements as of September 30, 2008.
  As
of September 30, 2008 one vendor had secured a summary judgment for
approximately $890,000 against GreenMan Technologies, Inc. While GreenMan
Technologies, Inc. believes it has valid defenses to these claims, as well as
against any similar or related claims that may be made against us in the future,
we did not receive proper notice of the summary judgment against us and
therefore were unable to timely appeal the judgment. Management therefore
determined it to be in the best interests of GreenMan Technologies, Inc. to
reach settlement on this judgment rather than to attempt to appeal the judgment
for lack of proper notice. On March 28, 2008, GreenMan Technologies, Inc. agreed
to a cash settlement of $450,000 with $100,000 paid upon signing the settlement
agreement and nine additional monthly payments of $38,889 commencing on April
30, 2008 and ending on December 31, 2008. . In early January, 2009, after
receipt of the final payment, the plaintiff marked the judgment satisfied with
the appropriate courts, at which time we recorded a gain on settlement of
approximately $150,000.
  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
  There
were no matters submitted to a vote of our shareholders during the fourth
quarter of the fiscal year ended September 30, 2008.
  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
      StockHigh
                LowFiscal
      2007Quarter
      Ended December 31, 2006
                $
      0.63
                
                $
      0.32Quarter
      Ended March 31, 2007
                0.49
                
                0.23Quarter
      Ended  June 30, 2007
                0.39
                
                0.27Quarter
      Ending September 30, 2007
                0.39
                
                0.30
 
 Fiscal
      2008Quarter
      Ended December 31, 2007
                $
      0.54
                
                $
      0.35Quarter
      Ended March 31, 2008
                0.51
                
                0.20Quarter
      Ended  June 30, 2008
                0.30
                
                0.20Quarter
      Ending September 30, 2008
                0.39
                
                0.16
  On
January 8, 2009 the closing price of our common stock was $.25 per
share.
  As
of September 30, 2008, we estimate the approximate number of stockholders of
record of our common stock to be 1,750.  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.
  
  7
   Item
      6.
              Management’s
      Discussion and Analysis of Plan of
  Operations
  In
September 2005, due to the magnitude of continued operating losses, our Board of
Directors approved plans to divest the operations of our GreenMan Technologies
of Georgia, Inc. subsidiary and dispose of its respective assets. Accordingly,
we have classified all remaining liabilities associated with our Georgia entity
and its results of operations as discontinued operations for all periods
presented in the accompanying consolidated financial statements.On June 27, 2008, our
Georgia subsidiary filed for liquidation under Chapter 7 of the federal
bankruptcy laws in the Bankruptcy Court of the Middle District of Georgia. As a
result of the bankruptcy proceedings we have relinquished control of our Georgia
subsidiary to the Bankruptcy Court and therefore have de-consolidated
substantially all remaining obligations from our financial statements as of
September 30, 2008. On October 1, 2007, we
acquired Welch Products, Inc. in exchange for 8,000,000 newly issued shares of
our common stock. The results described below include the operations of Welch
since October 1, 2007.
  As
described in Item 1, above, our business changed substantially in November 2008,
when we sold substantially all of the assets of our tire recycling operations.
Because we operated these assets throughout the fiscal year covered by this
Annual Report on Form 10-KSB, the following discussion reflects the results of
operations of this business segment through September 30,
2008.  Investors should understand, however, that our current business
excludes such operations.
  Fiscal
Year ended September 30, 2008 Compared to Fiscal Year ended September 30,
2007
  Net
sales for the fiscal year ended September 30, 2008 increased $6,570,047 or 33%
to $26,748,773 as compared to the net sales of $20,178,726 for the fiscal year
ended September 30, 2007. The increase is primarily attributable to the
inclusion of approximately $3,465,414 of revenue associated with Welch, our
newly acquired subsidiary. The remaining increase in revenue was attributable to
a 18% increase in overall tire derived end product revenues during the fiscal
year ended September 30, 2008 and a 3% increase in scrap tire volume (we
processed approximately 13.2 million passenger tire equivalents during the
fiscal year ended September 30, 2008 as compared to approximately 12.8 million
passenger tire equivalents during the same period last year). The results for
the fiscal year ended September 30, 2007 included approximately $404,000 of
revenue and 205,000 passenger tire equivalents associated with an Iowa scrap
tire cleanup project which was completed during that period.
  Gross
profit for the fiscal year ended September 30, 2008 was $7,944,156 or 30% of net
sales, compared  to $5,956,568 or 30% of net sales for the fiscal year
ended September 30, 2007.  The results for the fiscal year ended
September 30, 2008 included Welch, which had a gross profit of $969,701 or 28%
of its net sales.
  Selling,
general and administrative expenses for the fiscal year ended September 30, 2008
increased $1,758,958 to $5,606,684 or 21% of net sales, compared to $3,847,726
or 19% of net sales for the fiscal year ended September 30, 2007. The increase
was attributable to the inclusion of $1,654,237 associated with Welch, including
a significant investment in sales and marketing efforts to promote the Welch
patented products and establish market presence. These increases were offset by
reduced wages and performance based incentives.
  As
a result of the foregoing, we had operating income from continuing operations of
$2,337,472 during the fiscal year ended September 30, 2008 as compared to
operating income of $2,108,842 for fiscal year ended September 30,
2007.
  Interest
and financing expense for the fiscal year ended September 30, 2008, decreased
$6,771 to $1,999,528 compared to $2,006,299 during the fiscal year ended
September 30, 2007. The decrease was primarily due to reduced interest
rates.
  We
recorded a net benefit for income taxes of $5,332,561 primarily due to the
recognition of a deferred tax asset of $5,300,000.  As a result of the
gain to be realized in fiscal 2009 from the sale of the tire recycling
operations, the Company expects to be able to realize the benefit of a portion
of their federal net operating loss carryforwards and therefore have reduced our
deferred tax valuation reserve resulting in the recognition of the net deferred
tax asset.  During the fiscal year ended September 30, 2007 we
recorded income tax expense of approximately $116,000.
  As
a result of the foregoing, income from continuing operations after income taxes
increased to $5,530,755 for the fiscal year ended September 30, 2008 as compared
to a loss of $3,302 for fiscal year ended September 30, 2007.
  During
the fiscal year ended September 30, 2008, we recognized income from discontinued
operations of $2,360,930 associated with a one time, non-cash gain resulting
from writing off liabilities and the de-consolidation of our inactive Georgia
subsidiary which filed Chapter 7 bankruptcy in June 2008. During the fiscal year
ended September 30, 2007 we reached agreements with several Georgia vendors
regarding remaining past due amounts resulting in approximately $297,000 of
income from discontinued operations.
  Our
net income for the fiscal year ended September 30, 2008, was $7,891,685 or $.26
per basic share as compared to a net income of $293,894or $.01 per basic share
for the fiscal year ended September 30, 2007.
  8
   Liquidity
and Capital Resources
  As
of September 30, 2008, we had $786,416 in cash and cash equivalents and a
working capital deficiency of $11,403,244 (excluding a  $5.3 million
deferred tax asset) primarily due to the inclusion of approximately $12.8
million due our primary secured lender which was paid in November 2008 in
conjunction with the sale of our tire recycling business. Following the sale of
the tire recycling business, we will have minimal long-term debt and more than
$7 million of available cash. We intend to invest a portion of the net proceeds
of this transaction to grow our Welch Products' business model nationwide and
pursue additional recycling, alternative fuel, alternative energy and other
“Green” business opportunities through our recently announced subsidiary,
GreenMan Renewable Fuel and Alternative Energy, Inc.
  Our
tire recycling business has historically been the source of substantially all of
our revenue and cash flow. Revenues for the fiscal year ended September 30, 2008
associated with our remaining active subsidiary Welch Products, was $3,465,414
and they had a net operating loss of $800,157.  While Welch’s revenue
increase over 90% as compared to their previous year, it has not yet reached
sustained profitability. Since the date of acquisition, we have made a
significant investment in sales and marketing initiatives intended to promote
the Welch patented products and establish market presence. We understand our
continued existence is dependent on our ability to generate positive operating
cash flow from existing operations and achieve profitable status on a sustained
basis.
  In
September 2008 we announced the formation of a new subsidiary, GreenMan
Renewable Fuel and Alternative Energy, Inc.  Our primary objective for
this subsidiary is to pursue licenses, joint-ventures and long-term contracts
focused on the commercialization of existing and late-stage development products
and processes in green-based technologies including renewable fuels and
alternative energy. There has been significant global investment made over the
past several years in the area of renewable fuels, alternative energy and
clean-tech technologies and management does not see this momentum slowing down.
Our initial efforts to date have focused on rubber-based opportunities such as
tire gasification and alternative energy generation, but we have recently begun
expanding our focus into several other non-rubber based sectors which we believe
have large commercial market potential. We anticipate devoting increasing
resources over the next fiscal year to exploring our heightened participation in
this fast growing global initiative. To date, GreenMan Renewable Fuel and
Alternative Energy has generated no revenues and has not incurred any operating
expenses.
  We
believe we will be able to satisfy our cash requirements through at least fiscal
2010. If Welch is unable to achieve sustained profitability during fiscal 2009
and we are unable to obtain additional financing to supplement our cash
position, our ability to maintain our current level of operations could be
materially and adversely affected.  There is no guarantee we will be
able to achieve sustained profitability of our Welch Products business or of new
business opportunities.
  The
Consolidated Statements of Cash Flows reflect events for the fiscal years ended
September 30, 2008 and 2007 as they affect our liquidity. During the fiscal year
ended September 30, 2008, net cash provided by operating activities was
$589,324.  Our net income for the fiscal year ended September 30, 2008
was $7,891,685, including non-cash deferred income tax benefit of $5,300,000 and
a one time, non-cash gain of $2,360,930 associated with the de-consolidation of
our Georgia subsidiary. Our cash flow was positively impacted by the following
non-cash expenses and changes to our working capital: $2,307,161 of depreciation
and amortization which was offset by a $1,155,739 increase in receivables and a
$1,099,518 increase in product inventory primarily associated with the addition
our new Welch subsidiary. During the fiscal year ended September 30, 2007, net
cash provided by operating activities was $1,087,933 reflecting a net profit was
$293,894 and the impact by the following non-cash expenses and changes to our
working capital: $1,913,445 of depreciation and amortization which offset a
$538,162 decrease in accounts payable, and a $405,430 increase in accounts
receivable.
  Net
cash used by investing activities was $1,764,100 for the fiscal year ended
September 30, 2008, reflecting the net purchase of equipment of $1,777,415
during the year. Net cash used by investing activities was $933,825 for the
fiscal year ended September 30, 2007, reflecting the purchase of $941,075 of
equipment during the year.
  Net
cash provided by financing activities was $1,584,428 during the fiscal year
ended September 30, 2008, reflecting an increase in our working capital line of
$3,300,221, which offset normal debt payments including the payoff of
approximately $467,000 of Welch debt in conjunction with the
acquisition.  Net cash used by financing activities was $416,358
during the fiscal year ended September 30, 2007, reflecting normal debt and
capital lease activity.
  In
order to address our liquidity needs and return to sustainable profitable
status, we have implemented and/or are in the processing of implementing the
following actions:
  Divestiture
of Tire Recycling Business
  On September 12, 2008 we executed an
Asset Purchase Agreement with Liberty Tire Services of Ohio, LLC, a wholly-owned
subsidiary of Liberty Tire Services, LLC (“LTS”), the largest tire recycling
company in the United States for sale of our Tire Recycling Business, subject to
shareholder approval. On November 13, 2008 our shareholders approved the sale
and on November 17, 2008 we completed the divestiture of substantially all of
the assets of GreenMan Technologies of Minnesota, Inc. and GreenMan Technologies
of Iowa, Inc. subsidiaries which had operated our tire recycling business,for
approximately $27.5 million in cash.
  9
   We
used approximately $17.7 million of the proceeds of this sale to retire certain
transaction related obligations and other debt including approximately $12.8
million due our primary secured lender and have approximately $9.8 million of
available cash before estimated transaction related income taxes and other costs
which we estimate to be approximately $1.6 million. We believe that the sale of
the tire recycling business is in the best interests of our shareholders because
it provided us with the funds to pay off a majority of our outstanding
indebtedness and because it permits us to focus on growing our molded rubber
products and renewable fuel/alternative energy business units.
  Effects
of Inflation and Changing Prices
  Generally,
we are exposed to the effects of inflation and changing prices.  Given
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.  We have generally been unaffected by interest rate declines in
fiscal 2008, because our credit facility bore interest at a minimum rate of
8.0%.
  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 Note 8 to our Audited
Consolidated Financial Statements.
  Cautionary
Statement
  Information
contained or incorporated by reference in this document 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. Such statements 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.
  Factors
That May Affect Future Results
 
 Risks
Related to our Business
 
 By
completing the November 2008 sale of our tire recycling business we have sold
the operations which have historically generated substantially all our revenue.
In order to increase revenue, we willneed to grow our
Welch division and identify and successfully execute new business
initiatives.
  Following
the sale of the tire recycling business, we will have minimal long-term debt and
more than $7 million of available cash. We intend to invest a portion of the net
proceeds of this transaction to grow our Welch Products' business model
nationwide and pursue additional recycling, alternative fuel, alternative energy
and other “Green” business opportunities through our recently announced
subsidiary, GreenMan Renewable Fuel and Alternative Energy, Inc.
  Our
tire recycling business has historically been the source of substantially all of
our revenue and cash flow. Revenues for the fiscal year ended September 30, 2008
associated with our remaining active subsidiary Welch Products, was $3,465,414
and they had a net operating loss of $800,157.  While Welch’s revenue
increase over 90% as compared to their previous year, they have not yet reached
sustained profitability. Since the date of acquisition, we have made a
significant investment in sales and marketing initiatives intended to promote
the Welch patented products and establish market presence. We understand our
continued existence is dependent on our ability to generate positive operating
cash flow from existing operations and achieve profitable status on a sustained
basis.
  We
believe we will be able to satisfy our cash requirements through at least fiscal
2010. If Welch is unable to achieve sustained profitability during fiscal 2009
and we are unable to obtain additional financing to supplement our cash
position, our ability to maintain our current level of operations could be
materially and adversely affected.  There is no guarantee we will be
able to achieve sustained profitability of our Welch Products business or of new
business opportunities.
  The
divestiture of our tire recycling business may expose us to contingent
liabilities.
  We
are required to indemnify LTS and its affiliates for the breach or violation of
any representation, warranty or covenant made by us in the Asset Purchase
Agreement, subject to certain limitations and up to a maximum of $1.375 million
(5%) of the total purchase price. Significant indemnification claims by the LTS
Group could have a material adverse effect on our financial
condition.
  10
   We
will be prohibited from competing with the tire recycling business on a regional
basis for 5 years from the date of the closing.
  The
LTS Asset Purchase Agreement provides that for a period of five years after the
closing of the transaction, (i) we will not own, manage, operate, join, control
or participate in the ownership, management, operation or control of, or be
employed or otherwise connected as an agent, security holder, consultant,
stockholder, subsidiary, partner or otherwise with any person, firm corporation
or business that engages in any activity that is the same as, similar to, or
competitive with the business of collection, disposal, shredding, processing,
recycling or sale of used tires, including without limitation the production of
fuel chips, tire derived mulch, tire shreds, crumb rubber and other tire derived
feedstock, anywhere within the states of Iowa, Minnesota, Illinois, Indiana,
Kansas, Michigan, Missouri, Nebraska, North Dakota, South Dakota and Wisconsin
or (ii) sell crumb rubber to any person who is a customer of ours as of the date
of the Asset Purchase Agreement.
  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 investors
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.
  Factors
that could limit demand for our products and services are 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.
  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 products and services is highly competitive, fragmented and
decentralized.  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, changes in
customer requirements, or devote greater resources to the promotion and sale of
their products and 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.
  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. Our Welch subsidiary also experiences a reduction
playground tile and equipment sales during the winter as a majority of it’s
current business is derived from the Midwestern part of the United States where
colder weather impacts the ability to install their products.
 
 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. We have generally been unaffected by interest rate declines in
fiscal 2008, because our credit facility bore interest at a minimum rate of
8.0%.
 
  11
  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 any future acquired businesses, at all or
without significant distraction of management into 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.
 
 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:
  ·
              we
      are now traded on the OTC Bulletin
Board;
  ·
              changes
      in market valuations of similar
companies;
  ·
              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;
  ·
              regulatory
      developments;
  ·
              additions
      or departures of senior management and other key
  personnel;
  ·
              deviations
      in our results of operations from the estimates of securities analysts;
      and
  ·
              future
      issuances of our common stock or other
  securities.
 
 We
have options and warrants currently outstanding.  Exercise of these
options and warrant 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, 2008, we had options and warrants outstanding to purchase
9,690,364 additional shares for future issuance. These reserved shares relate to
the following: 3,154,462 shares for issuance upon exercise of awards granted
under our 1993 Stock Option Plan, 1996 Non-Employee Director Stock Option Plan
and 2005 Stock Option Plan and 6,535,902 shares for issuance upon exercise of
other stock options and stock purchase warrants.
  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, 2008, approximately 23 million shares of our
common stock were eligible for sale in the public market. This represents
approximately 74% of our outstanding shares of common stock. We have registered
an additional 2,951,905 shares of common stock issuable upon exercise of
remaining warrants owned by certain stockholders, therefore increasing the
potential total shares of our common stock eligible for resale in the public
market to approximately 26 million. 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.
 
  12
  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 25 percent of our outstanding common stock as of September 30,
2008. 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. During the fiscal year ended September 30, 2007, Laurus
acquired 1,154,098 shares of our common stock upon partial exercise of its
warrant on a cashless basis. In addition, Laurus can elect to acquire up to
4,811,905 shares of our outstanding stock by exercising its warrants for an
aggregate exercise price of $48,119. If Laurus were to acquire those shares,
they would represent 16% of our outstanding shares of common stock at September
30, 2008. In addition, the 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
business.. 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.
  Environmental
Liability
  There
are no known material environmental violations or assessments.
  Recent
Accounting Pronouncements
  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, de-recognition or measurement of a tax position should be
recognized in the interim period in which the change occurs.  The
adoption of FIN 48 has not had a material effect on our consolidated financial
position or results of operations.
   Item
      7.
              Financial
      Statements
  For
information required with respect to this Item 7, see “Consolidated Financial
Statements” on pages 25 through 50 of this report.
  Item
      8.
              Changes In and
      Disagreements With Accountants on Accounting and Financial
      Disclosure
  None.
  Item
      8A.
              Disclosure Controls
      and Procedures
  As
required by paragraph (b) of Rules 13a-15 or 15d-15 under the Exchange Act, our
chief executive officer and chief financial officer evaluated our company’s
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
of the Exchange Act) as of the end of the period covered by this Annual Report
on Form 10-KSB. Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
in our company's reports filed or submitted under the Securities Exchange Act is
recorded, processed, summarized and reported, within the time periods specified
in the Securities and Exchange Commission's rules and forms. Disclosure controls
and procedures include controls and procedures designed to ensure that
information required to be disclosed in our company's reports filed under the
Securities Exchange Act is accumulated and communicated to our chief executive
officer and our chief financial officer, as appropriate, to allow timely
decisions regarding required disclosure.
 
  13
  Based
on its evaluation, our management concluded that as of the end of the period
covered by this Annual Report on Form 10-KSB, our disclosure controls and
procedures were effective.
 
 Management’s
Report on Internal Control Over Financial Reporting.
  Our
company’s management is responsible for establishing and maintaining adequate
internal control over financial reporting (as defined in Rules 13a-15(f) and
15d-15(f) of the Exchange Act) for our company. Our company’s internal control
over financial reporting is designed to provide reasonable assurance, not
absolute assurance, regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles in the United States of America.
Internal control over financial reporting includes those policies and procedures
that: (i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of our company’s
assets; (ii) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles in the United States of America, and
that our company’s receipts and expenditures are being made only in accordance
with authorizations of our management and directors; and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of our assets that could have a material effect
on the financial statements.
  Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. In addition, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions and that the degree of compliance
with the policies or procedures may deteriorate.
  As
required by Rule 13a-15(c) promulgated under the Exchange Act, our management,
with the participation of our Chief Executive Officer and Chief Financial
Officer, evaluated the effectiveness of our internal control over financial
reporting as of September 30, 2008. Management’s assessment was based on
criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission in Internal Control over Financial Reporting —Guidance for Smaller
Public Companies. Management, under the supervision and with the participation
of the Company’s Chief Executive Officer and Chief Financial Officer, assessed
the effectiveness of the company’s internal control over financial reporting as
of September 30, 2008 and concluded that it is effective.
  This
Annual Report does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the Securities Exchange
Commission that permit the Company to provide only management’s report in this
Annual Report.
 
 Changes
in Internal Control over Financial Reporting
  There
were no changes in our internal control over financial reporting during the
fourth quarter of our fiscal year ended September 30, 2008 that have materially
affected or are 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
                PositionMaurice
      E. Needham
                68
                Chairman
      of the Board of DirectorsLyle
      Jensen
                58
                Chief
      Executive Officer; President; DirectorCharles
      E. Coppa
                45
                Chief
      Financial Officer; Treasurer; SecretaryDr.
      Allen Kahn
                87
                DirectorLew
      F. Boyd
                63
                DirectorNicholas
      DeBenedictis
                49
                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 2007, 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.  Effective on January 1, 2008,
the Board increased the quarterly fee to $5,000.
  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. DeBenedictis is an “audit committee financial expert” within the meaning
given that term by Item 407(d)(5) of Regulation S-B. Our common stock is traded on the OTC Bulletin Board under
the symbol “GMTI” and we are not currently subject to the listing requirements
of any national securities exchange. However, our Board of Directors has also
determined that Mr. DeBenedictis is “independent” within the meaning
given to that term by Section 803 of the American Stock Exchange Company
Guide.
  14
   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 JENSENhas 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.
  CHARLES E. COPPAhas 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
DEBENEDICTIShas 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.
  15
   Item
      10.
              Executive
      Compensation
 
 Summary
Compensation Table
 
 The
following table summarizes the compensation paid or accrued for services
rendered during the fiscal years ended September 30, 2008, 2007 and 2006, to our
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.
 
 Annual
      Compensation
                  Option
                  All
      OtherName and Principal
      Position
                  Fiscal
      Year
                  Salary
                  Bonus
                  Awards
      (1)(2)
                  Compensation(3)
                  TotalLyle
      Jensen
                    Chief
      Executive Officer
                  2008
                    2007
                  $
      250,000
                    195,000
                  $
      150,000
                    212,000
                  $  39,200
                    32,466
                  $   23,923
                    17,901
                  $  463,123
                    457,367Charles
      E. Coppa
                    Chief
      Financial Officer
                  2008
                    2007
                  $
      158,625
                    150,000
                  $
      75,000
                    51,000
                  $          --
                    10,533
                  $  12,760
                    11,912
                  $
      246,385
                    223,445
  (1)
              Amounts shown do not reflect
      compensation actually received by the named executive officer. The amounts
      in the Option Awards column reflect the dollar amount recognized as
      compensation cost for financial statement reporting purposes for the
      fiscal yearsendedSeptember 30,
      2008 and September 30, 2007, in accordance with SFAS 123(R)
      for all stock options granted insuch fiscal years. The calculation in the table
      above excludes all assumptions with respect to forfeitures. There can be
      no assurance that the amounts set forth in the Option Awards column will
      ever be realized. A forfeiture rate was used in the expense calculation in
      the financial statements.
  (2)
              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 with the exception of the 225,000
      granted to Mr. Jensen which pursuant to the terms of his employment, vest
      immediately on the date of grant and have a ten year
  term.
  (3)
              Represents
      payments made to or on behalf of Messrs. Jensen and Coppa for health, life
      and disability insurance and auto
allowances.
 
  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 provided 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:
 
 EBITDA
      as
                    % of
      Revenue
                  Performance
      IncentiveBase:
                  10.0
      % or Less
                  NoneLevel
      I:
                  10.1%
      – 12.0%
                  10%
      of EBITDA dollars above BaseLevel
      II:
                  12.1%
      – 15.0%
                  12%
      of EBITDA dollars above BaseLevel
      III:
                  >
      15.0%
                  15%
      of EBITDA dollars above
Base
 
 During
fiscal 2007, Mr. Jensen earned an incentive bonus of $262,000 but agreed to
receive a reduced amount of $212,000.  During fiscal 2007, Mr. Jensen
used approximately $52,000 (net of taxes) of his bonus to purchase 100,000
shares of  unregistered common stock from the company. On February 8,
2008, Mr. Jensen was granted immediately exercisable options to purchase 100,000
shares of common stock at an exercise price of $.34 per share based on fiscal
2007 EBITDA performance. During 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. In December 2006, Mr. Jensen was granted immediately exercisable
options to purchase 25,000 shares of common stock at an exercise price of $.36
per share based on fiscal 2006 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.
  16
   Mr.
Jensen’s employment agreement was amended in January 2008 to increase Mr.
Jensen’s base salary to $250,000 per year, with such increase retroactive to
October 1 2007. In addition, the amendment deleted the EBITDA-based incentive
compensation measures described above, and provides instead for incentive
compensation in respect of any fiscal year of up to the lesser of (x) 20% of our
audited annual profit after tax, as reported in the financial statements
included in our Annual Report on Form 10-KSB for such fiscal year and (y)
$150,000.  During fiscal 2008, Mr. Jensen earned an incentive bonus of
$150,000 and on September 30, 2008 was granted immediately exercisable options
to purchase 100,000 shares of common stock at an exercise price of $.33 per
share based on fiscal 2008 EBITDA performance.
  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. The
agreement provides for payment of twelve months salary as a severance payment
for termination without cause. Mr. Coppa’s employment agreement was amended in
January 2008 to increase Mr. Coppa’s base salary to $161,500 per year, effective
January 1, 2008. In addition, the amendment deleted the discretionary incentive
compensation measures described above, and provides instead for incentive
compensation in respect of any fiscal year to be based on mutually agreed
performance measures as determined our Compensation Committee, with maximum
potential incentive compensation in respect of any fiscal year equal to 25% of
Mr. Coppa’s base salary for such fiscal year. Any increases or bonuses will be
made at the discretion of our Board of Directors upon the recommendation of the
Compensation Committee.
  During
fiscal 2008 and 2007, Mr. Coppa earned a discretionary incentive bonus of
$75,000 and $51,000 respectively, based on individual and company
performance.
 
 Outstanding
Equity Awards
  The
following table sets forth information concerning outstanding stock options for
each named executive officer as of September 30, 2008:
 
 Number
      of Securities Underlying
                Unexercised
      Options
              Exercise
                Price
                Per
      Share
              Option
                Expiration
                DateName
              Date of
      Grant
              Exercisable
              UnexercisableLyle
      Jensen
              March
      12, 2002 (1)
              25,000
              --
              $1.51
              March
      12, 2012August
      23, 2002 (2)
              2,500
              --
              $1.80
              August
      23, 2012February
      20, 2003 (3)
              2,000
              --
              $1.95
              February
      20, 2013April
      24, 2004 (3)
              2,000
              --
              $1.10
              April
      24, 2014June
      15, 2005 (3)
              2,000
              --
              $0.51
              June
      15, 2015April
      12, 2006 (4)
              300,000
              200,000
              $0.28
              April
      12, 2016December
      18, 2006 (4)
              20,000
              80,000
              $0.35
              December
      18, 2016December
      29, 2006 (5)
              25,000
              --
              $0.36
              December
      29, 2016February
      8, 2008 (5)
              100,000
              --
              $0.34
              February
      8, 2018September
      30, 2008 (5)
              100,000
              --
              $0.33
              September
      30, 2018Charles
      E. Coppa
              July
      22,1999 (2)
              90,000
              --
              $0.53
              July
      22, 2009February
      18, 2000 (1)
              100,000
              --
              $0.50
              February
      18, 2010January  12,
      2001 (2)
              40,000
              --
              $0.40
              January  12,
      2011August
      23, 2002 (2)
              7,500
              --
              $1.80
              August
      23, 2012June
      6, 2006 (4)
              137,000
              109,600
              $0.36
              June
      6, 2016September
      28,2007 (4)
              45,000
              45,000
              $0.35
              September
      28,2017
  (1)
              These
      options are non-qualified, have a ten-year term and vest at an
      annual rate of 20% over a five-year period from the date of
      grant
  (2)
              These
      options were granted under the 1993 Stock Option Plan, have a ten-year term and vest at an
      annual rate of 20% over a five-year period from the date ofgrant
  (3)
              These
      options were granted under the 1996 Non Employee Stock Option Plan, have a
      ten-year term and vested immediately on the date of
  grant.
  (4)
              These
      options were granted under the 2005 Stock Option Plan, have a ten-year
      term and vest at an annual rate of 20% over a five-year period from the
      date of grant.
  (5)
              These
      options were granted under the 2005 Stock Option Plan, have a ten-year
      term and vested immediately on the date of
  grant.
  17
   Director
Compensation
  The
following table sets forth information concerning the compensation of our
Directors who are not named executive officers for the fiscal year ended
September 30, 2008:
 
 Name
              Fees
      Earned or Paid in
                Cash or Common
      Stock
              Option
      Awards
                (1)
      (2)
              All
      Other
                Compensation
              TotalMaury
      Needham
              $               --
              $              --
              $              --
              $             --Lew
      Boyd
              $       17,500
              $              --
              $              --
              $     17,500Dr.
      Allen Kahn
              $       17,500
              $              --
              $              --
              $     17,500Nick
      DeBenedictis
              $       17,500
              $              --
              $              --
              $     17,500
  (1)
              There
      were no option grants to Directors during fiscal
  2008.
  (2)
              As
      of September 30, 2008, each non-employee director holds the following
      aggregate number of shares under outstanding stock
  options:
 
 Name
                Number
      of Shares Underlying
                  Outstanding Stock
      OptionsMaury
      Needham
                578,962Lew
      Boyd
                45,500Dr.
      Allen Kahn
                51,500Nick
      DeBenedictis
                235,000
 
 During
fiscal 2007, 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.  Effective on January 1, 2008, the Board increased the
quarterly fee to $5,000.
  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.
  During
fiscal 2008, options to purchase 427,894 shares of common stock at $1.09 per
share expired un-exercised. As of September 30, 2007, there were 1,022,356
options granted and outstanding under the 1993 Plan which are exercisable at
prices ranging from $0.38 to $1.80.
  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 2008, our stockholders
approved an increase to the number of shares authorized under the 2005 Plan from
2,000,000 to 3,500,000 shares.   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:
 
 ·
              the
      persons to whom options will be
granted;
 
 ·
              the
      number of shares to be covered by each
option;
 
 ·
              whether
      the options granted are intended to be incentive stock
      options;
 
 ·
              the
      manner of exercise; and
 
 ·
              the
      time, manner and form of payment upon exercise of an
    option.
 
  18
  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.
 
 During
the year ended September 30, 2008, 870,000 options were granted under the 2005
Plan at prices ranging from $.33 to $.35.  As of September 30, 2008
there were 2,532,000 options granted and outstanding under the 2005 Plan which
are exercisable at prices ranging from $0.28 to $0.55.
 
 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. 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, 2008, 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 75% of employee
compensation and employee contributions up to the maximum contribution allowed
by law 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, 2008 and 2007.
  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, 2008:
  ·
              by
      each of our directors and executive
officers;
 ·
              by
      all of our directors and executive officers as a group;
  and
 ·
              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.
  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, 2008, 30,880,435 shares of our common stock
were issued and outstanding.
  Security
Ownership of Management and Directors
 
 Name
      (1)
              Number
      of Shares
                Beneficially Owned
      (2)
              Percentage
                of Class
      (2)Dr.
      Allen Kahn (3)
              4,371,931
              
              13.15%Maurice
      E. Needham (4)
              1,672,301
              
              5.36%Lyle
      Jensen (5)
              1,113,522
              
              3.55%Nicholas
      DeBenedictis (6)
              815,454
              
              2.64%Charles
      E. Coppa (7)
              688,228
              
              2.21%Lew
      F. Boyd (8)
              293,678
              
              0.95%All
      officers and directorsas
      a group (6 persons)
              8,955,114
              
              25.08%
 
 Security
Ownership of Certain Beneficial Owners
 
 Name
      (1)
              Number
      of Shares
                Beneficially Owned
      (2)
              Percentage
                of Class
      (2)Laurus
      Master Fund, Ltd. (9)
              1,540,933
              
              4.99%
 
  19
  (1)
              Except
      as noted, each person’s address is care of GreenMan Technologies, Inc.,
      205 South Garfield, Carlisle, Iowa,
50047.
 (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
      23,500 shares of common stock issuable pursuant to immediately exercisable
      stock options.
 (4)
              Includes
      343,962 shares of common stock issuable pursuant to immediately
      exercisable stock options. Also includes 59,556 shares of common stock
      owned by Mr. Needham’s wife.
 (5)
              Includes
      478,500 shares of common stock issuable pursuant to immediately
      exercisable stock options.
 (6)
              Includes
      371,000 shares of common stock owned by Mr. DeBenedictis’s wife and 47,000
      shares of common stock issuable pursuant to immediately exercisable
      options.
 (7)
              Includes
      301,300 shares of common stock issuable pursuant to immediately
      exercisable stock options.
 (8)
              Includes
      125,394 shares of common stock issuable pursuant to immediately
      exercisable stock options.
 (9)
              Laurus
      holds warrants to purchase up to 4,811,905 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 1,540,933 shares of our common
      stock issuable pursuant to underlying warrant. Laurus’s address is 335
      Madison Avenue, 10th Floor, New York, New York
  10017.
 
 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, 2008, 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.
  Item
      12.
              Certain Relationships
      and Related Transactions
  Stock
Issuances; Options granted
  On
August 21, 2007, Mr. Jensen purchased 100,000 unregistered shares of common
stock (valued at $35,000 at date of purchase).
  During
the year ended September 30, 2007, Messrs. Boyd, DeBenedictis and Dr. Kahn
agreed to accept 84,838 shares of unregistered common stock valued at $30,796
(all shares were issued at a price equal to the closing price of our common
stock on date of issuance) in lieu of cash for certain director’s fees, interest
and expenses due the directors.
  During
fiscal 2007, 800,000 qualified options in aggregate were granted at exercise
prices ranging from $.35 to $.55 per share to Messrs. Needham, Jensen, Coppa,
Boyd, Kahn and DeBenedictis. All options have a ten year term with 775,000
vesting equally over a five year term from the date of grant and 25,000 vesting
immediately upon grant.
  During
fiscal 2008, 200,000 qualified options in aggregate were granted at exercise
prices ranging from $.33 to $.34 per share to Mr. Jensen. All options vest
immediately and have a ten-year term from the date of grant.
  Related
Party Transactions
  As
a result of the divestiture of our tire recycling operations on November 17,
2008, all related party transactions noted below have been
terminated.
  We
rented 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. We have entered into three equipment operating lease agreements with
Maust Asset Management.  Under these leases, we were required to pay
between $1,500 and $2,683 per month rental and had 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, 2008 and 2007 was $82,858 and $187,554, respectively.
  During
fiscal 2007, we entered into a new capital lease agreement with Maust Asset
Management for equipment valued at $64,719. We were required to pay rent of
$1,614 per month and had the ability to purchase the equipment at the end of the
lease for $8,512.
  During
fiscal 2008, we entered into 2 new capital lease agreements with Maust Asset
Management for equipment valued at $358,548. Under the terms of the leases we
were required to pay between $2,974 and $5,000 per month rental for a period of
60 months from inception. We had the ability to purchase the equipment at the
end of each lease for $1 per unit.
  20
   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 were required for the
first five years, increasing to $9,000 plus real estate taxes per month for the
remaining five years. The lease also provided 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 were
required. For the fiscal years ended September 30, 2008 and 2007, payments made
in connection with these leases amounted to $168,180 and $179,203,
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 was being recognized as income ratably over the term of the
lease. The lease provided for two additional four year extensions. The building
lease is classified as a capital lease at September 30, 2008 valued at
$1,036,000 with the portion allocated to land treated as an operating lease. For
the fiscal years ended September 30, 2008 and 2007, payments made in connection
with this lease amounted to $257,429 and $241,539, 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.
                                      
                                      Description2.1
      (1)
                                      --
                                      Asset
      Purchase Agreement among GreenMan Technologies, Inc., Liberty Tire
      Services, LLC, Liberty Tire Services of Ohio, LLC, GreenMan Technologies
      of Iowa, Inc., and GreenMan Technologies of Minnesota, Inc., dated
      September 12, 20082.2
      (1)
                                      --
                                      Stockholder
      Voting Agreement among Liberty Tire Services, LLC, Liberty Tire Services
      of Ohio, LLC, GreenMan Technologies, Inc., GreenMan Technologies of Iowa,
      Inc., GreenMan Technologies of Minnesota, Inc., Maurice E. Needham, Lyle
      Jensen, Dr. Allen Kahn, Lew F. Boyd, Nicholas DeBenedictis and Charles E.
      Coppa, dated September 12, 2008.2.3
      (2)
                                      --
                                      Share
      Exchange Agreement among GreenMan Technologies, Inc., Welch Products, Inc.
      and the Stockholders of Welch Products, Inc., dated October 1,
      20072.4
      (2)
                                      --
                                      Escrow
      Agreement among GreenMan Technologies, Inc., Welch Products, Inc., the
      Stockholders of Welch Products, Inc. and Dreher, Simpson and Jensen, P.C.,
      as Escrow Agent, dated October 1, 20072.5
      (2)
                                      --
                                      Agreement
      among GreenMan Technologies, Inc., Welch Products, Inc., the Stockholders
      of Welch Products, Inc. and Laurus Master Fund Ltd., dated October 1,
      20073.1
      (3)
                                      --
                                      Restated
      Certificate of Incorporation as filed with the Secretary of State of the
      State of Delaware on May 1, 2003, as amended3.2
      (4)
                                      --
                                      By-laws
      of GreenMan Technologies, Inc.4.1
      (4)
                                      --
                                      Specimen
      certificate for Common Stock of GreenMan Technologies,
  Inc.4.2
      (5)
                                      --
                                      Option
      Agreement, dated July 20, 2005 by and between GreenMan Technologies, Inc.
      and Laurus Master Fund, Ltd.4.3
      (6)
                                      --
                                      Common
      Stock Purchase Warrant, dated June 30, 2006, issued to Laurus Master Fund,
      Ltd.4.4
      (6)
                                      --
                                      Registration
      Rights Agreement dated June 30, 2006, made by GreenMan Technologies, Inc.
      to Laurus Master Fund, Ltd.10.1
      (7)
                                      --
                                      Employment
      Agreement dated April 1, 2003 between GreenMan Technologies, Inc. and
      Maurice E.
Needham
  21
  
 10.2
      (8)
                                            --
                                            Employment
      Agreement dated April 12, 2006, between GreenMan Technologies, Inc. and
      Lyle E. Jensen10.3
      (9)
                                            --
                                            Addendum
      dated January 30, 2008, to the Employment Agreement dated April 12, 2006,
      between GreenMan Technologies, Inc. and Lyle E. Jensen10.4
      (10)
                                            --
                                            Employment
      Agreement dated June 1, 1999, between GreenMan Technologies, Inc. and
      Charles E. Coppa10.5
      (9)
                                            --
                                            Addendum
      dated January 30, 2008, to the Employment Agreement dated June 1, 1999,
      between GreenMan Technologies, Inc. and Charles E.
Coppa10.6
      (2)
                                            --
                                            Consulting
      Agreement between GreenMan Technologies, Inc. and Bruce A. Boland, dated
      October 1, 200710.7
      (2)
                                            --
                                            Consulting
      Agreement between GreenMan Technologies, Inc. and John W. Brown, dated
      October 1, 200710.8
      (4)
                                            --
                                            1993
      Stock Option Plan10.9
      *
                                            --
                                            2005
      Stock Option Plan, as amended January 18, 200810.10
      (4)
                                            --
                                            Form
      of confidentiality and non-disclosure agreement for executive
      employees10.11
      (11)
                                            --
                                            Lease
      Agreement By and Between WTN Realty Trust to GreenMan Technologies of
      Georgia, Inc. dated April 2, 200121.1
      *
                                            --
                                            List
      of All Subsidiaries31.1
      *
                                            --
                                            Certification
      of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule
      15d-14(a)31.2
      *
                                            --
                                            Certification
      of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule
      15d-14(a)32.1
      *
                                            --
                                            Certification
      of Chief Executive Officer under 18 U.S.C. Section 135032.2
      *
                                            --
                                            Certification
      of Chief Financial Officer under 18 U.S.C. Section
  1350
 ________________________
  (1)
              Filed
      as an Exhibit to GreenMan Technologies, Inc.’s Form 8-K dated September
      12, 2008 and filed September 17, 2008, and incorporated herein by
      reference.
  (2)
              Filed
      as an Exhibit to GreenMan Technologies, Inc.’s Form 8-K dated October 1,
      2007 and filed October 5, 2007, and incorporated herein by
      reference.
  (3)
              Filed
      as an Exhibit to GreenMan Technologies, Inc.’s Form 10-QSB for the Quarter
      Ended June 30, 2008 and incorporated herein by
  reference.
  (4)
              Filed
      as an Exhibit to GreenMan Technologies, Inc.’s Registration Statement on
      Form SB-2 No. 33-86138 and incorporated herein by
    reference.
  (5)
              Filed
      as an Exhibit to GreenMan Technologies, Inc.’s Form 10-QSB for the Quarter
      Ended June 30, 2005 and incorporated herein by
  reference.
  (6)
              Filed
      as an Exhibit to GreenMan Technologies, Inc.’s Form 10-QSB for the Quarter
      Ended June 30, 2006 and incorporated herein by
  reference.
  (7)
              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.
  (8)
              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.
  (9)
              Filed
      as an Exhibit to GreenMan Technologies, Inc.’s Form 8-K dated January 28,
      2008 and filed January 31, 2008, and incorporated herein by
      reference.
  (10)
              Filed
      as an Exhibit to GreenMan Technologies, Inc.’s Form 10-QSB for the Quarter
      Ended December 31, 2000 and incorporated herein by
    reference.
  (11)
              Filed
      as an Exhibit to GreenMan Technologies, Inc.’s Form 10-QSB for the Quarter
      Ended June 30, 2001 and incorporated herein by
  reference.
  *
              Filed
      herewith.
  22
  (b)  
Reports on Form 8-K.
 
 Current
Report on Form 8-K, dated November 17, 2008 and filed with the Securities and
Exchange Commission on November 20, 2008, with respect to the completion of the
sale of substantially all of the assets of GreenMan Technologies of Iowa, Inc.
and GreenMan Technologies of Minnesota, Inc. to Liberty Tire Services of Ohio
(Items 2.01, 7.01 and 9.01).
 
 Current
Report on Form 8-K, dated September 12, 2008 and filed with the Securities and
Exchange Commission on September 17, 2008, with respect to the execution of the
definitive agreement to sell substantially all of the assets of GreenMan
Technologies of Iowa, Inc. and GreenMan Technologies of Minnesota, Inc. to
Liberty Tire Services of Ohio (Items 1.01, 7.01 and 9.01).
 
 Item
14.        Principal Accountant Fees
and Services
 
 In
February 2007 we selected the firm of Schechter, Dokken, Kanter, Andrews &
Selcer, Ltd. (“SDKAS”) as our independent auditors for the fiscal year ending
September 30, 2007 and subsequent years, and SDKAS commenced providing services
in conjunction with the quarter ended March 31, 2007. Our former auditors, Wolf
and Company, P.C. only provided services in conjunction with the quarter ended
December 31, 2006.
 
 In
addition to audit services, SDKAS also provided certain non-audit services to us
during the fiscal years ended September 30, 2008 and 2007.  The Audit
Committee has considered whether the provision of these additional services is
compatible with maintaining the independence of SDKAS.
  Audit Fees. The aggregate
fees billed for professional services rendered by SDKAS for (1) the audit
of our financial statements as of and for the fiscal years ended September 30,
2008 and 2007 and (2) the review of the financial statements included our
company’s Form 10-QSB filings for fiscal 2008 and 2007 were $147,039 and
$120,712, respectively. The aggregate fees billed for professional services
rendered by Wolf & Company, P.C. for the review of the financial statements
included our company’s Form 10-QSB filings for fiscal 2007 were
$25,050.
  Audit-Related Fees. The
aggregate fees billed in fiscal 2008 and 2007 for assurance and related services
rendered by SDKAS that are reasonably related to the performance of the audit or
review of our financial statements, was $36,833 and $10,828,
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 2008 for professional services rendered by SDKAS for tax
compliance, tax advice and tax planning was $35,913.
  All Other Fees. The aggregate
other fees billed during fiscal 2008 and 2007 by SDKAS for the audit of our
Company sponsored benefit plan was $0 and $11,500, respectively as there was no
requirement to audit the fiscal 2008 plan. During fiscal 2007 the aggregate fees
billed by Wolf & Company for products and services provided other than
services reported above was $5,750.
  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 2008 and 2007, all of the non-audit services provided by SDKAS were
pre-approved by the Audit Committee. Accordingly, the Audit Committee did not
rely on the de minimisexception 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.
 
  23
  GreenMan
Technologies, Inc.
 Index
to Consolidated Financial Statements
 
 PageReports
      of Independent Registered Public Accounting Firm
              25Consolidated
      Balance Sheets as of September 30, 2008 and 2007
              26Consolidated
      Statements of Operations for the Years Ended September 30, 2008 and
      2007
              27Consolidated
      Statements of Changes in Stockholders’ Deficit for the Years Ended
      September 30, 2008 and 2007
              28Consolidated
      Statements of Cash Flows for the Years Ended September 30, 2008 and
      2007
              29Notes
      to Consolidated Financial Statements
              30
 
  24
  Report
of Independent Registered Public Accounting Firm
  The
Board of Directors and Stockholders
 GreenMan
Technologies, Inc.
 Carlisle,
Iowa
  We
have audited the accompanying consolidated balance sheets of GreenMan
Technologies, Inc. and subsidiaries as of September 30, 2008 and 2007 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
audit.
  We
conducted our audit 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. The company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting.  Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company’s internal control over financial
reporting.  Accordingly, we express no such opinion.  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
audit provides 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, 2008 and 2007 and the results of its operations
and its cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.
 
 /s/ schechter dokken kanter
andrews & Selcer,  ltd.
 schechter
dokken kanter andrews & Selcer, ltd.
 
 Minneapolis,
Minnesota
 January
16, 2009
  25
  GREENMAN
TECHNOLOGIES, INC.
 Consolidated
Balance Sheets
 
 September 30,
                                  2008
                                
                                
                                September 30,
                                  2007ASSETSCurrent
      assets:Cash
      and cash equivalents
                                
                                $
                                786,416
                                
                                
                                $
                                376,764Accounts
      receivable, trade, less allowance for doubtful accounts of $187,588
      and$268,867
      as of  September 30, 2008 and September 30, 2007
                                
                                
                                4,154,993
                                
                                
                                
                                2,462,358Inventory
                                
                                
                                1,754,268
                                
                                
                                
                                157,094Deferred
      tax asset
                                
                                
                                5,300,000
                                
                                
                                
                                --Other
      current assets
                                
                                
                                1,109,819
                                
                                
                                
                                764,046Total
      current assets
                                
                                
                                13,105,496
                                
                                
                                
                                3,760,262Property,
      plant and equipment, net
                                
                                
                                6,950,855
                                
                                
                                
                                5,218,706Other
      assets:Customer
      relationship intangibles, net
                                
                                
                                65,536
                                
                                
                                
                                72,485Goodwill
                                
                                
                                2,289,939
                                
                                
                                
                                --Long
      term contracts, net
                                
                                
                                554,250
                                
                                
                                
                                --Patents,
      net
                                
                                
                                113,433
                                
                                
                                
                                --Other
                                
                                
                                527,980
                                
                                
                                
                                239,750Total
      other assets
                                
                                
                                3,551,138
                                
                                
                                
                                312,235$
                                23,607,489
                                
                                
                                $
                                9,291,203LIABILITIES
      AND STOCKHOLDERS'  DEFICITCurrent
      liabilities:Notes
      payable, current
                                
                                $
                                10,073,065
                                
                                
                                $
                                1,072,117Notes
      payable, line of credit
                                
                                
                                3,300,221
                                
                                
                                
                                --Accounts
      payable
                                
                                
                                2,432,024
                                
                                
                                
                                1,320,320Accrued
      expenses, other
                                
                                
                                2,101,968
                                
                                
                                
                                1,579,725Obligations
      under capital leases, current
                                
                                
                                382,368
                                
                                
                                
                                185,127Obligations
      due under lease settlement, current
                                
                                
                                68,518
                                
                                
                                
                                68,518Deferred
      gain on sale leaseback transaction, current
                                
                                
                                36,445
                                
                                
                                
                                36,445Notes
      payable, related parties,current
                                
                                
                                534,320
                                
                                
                                
                                --Liabilities
      related to discontinued operations
                                
                                
                                279,811
                                
                                
                                
                                3,018,503Total
      current liabilities
                                
                                
                                19,208,740
                                
                                
                                
                                7,280,755Notes
      payable, non-current
                                
                                
                                2,023,031
                                
                                
                                
                                10,272,574Obligations
      under capital leases, non-current
                                
                                
                                1,623,325
                                
                                
                                
                                1,272,527Obligations
      due under lease settlement, non-current
                                
                                
                                580,540
                                
                                
                                
                                580,540Deferred
      gain on sale leaseback transaction, non-current
                                
                                
                                233,783
                                
                                
                                
                                270,298Notes
      payable, related parties, non-current
                                
                                
                                --
                                
                                
                                
                                534,320Total
      liabilities
                                
                                
                                23,669,419
                                
                                
                                
                                20,211,014Stockholders'
      deficit:Preferred
      stock, $1.00 par value, 1,000,000 shares authorized, none
      outstanding
                                
                                
                                --
                                
                                
                                
                                --Common
      stock, $.01 par value, 60,000,000 shares authorized, 30,880,435 shares and
      22,880,435 shares issued and outstanding at September 30, 2008 and
      September 30, 2007
                                
                                
                                308,804
                                
                                
                                
                                228,804Additional
      paid-in capital
                                
                                
                                38,881,669
                                
                                
                                
                                35,995,473Accumulated
      deficit
                                
                                
                                (39,252,403
                                )
                                
                                
                                (47,144,088
                                )Total
      stockholders’ deficit
                                
                                
                                (61,930
                                )
                                
                                
                                (10,919,811
                                )$
                                23,607,489
                                
                                
                                $
                                9,291,203
 
  
 See
accompanying notes to consolidated financial statements.
  
  26
  GreenMan
Technologies, Inc.
 Consolidated
Statements of Operations
 
 Years
      Ended September 30,2008
                          
                          
                          2007Net
      sales
                          
                          $
                          26,748,773
                          
                          
                          $
                          20,178,726Cost
      of sales
                          
                          
                          18,804,617
                          
                          
                          
                          14,222,158Gross
      profit
                          
                          
                          7,944,156
                          
                          
                          
                          5,956,568Operating
      expenses:Selling,
      general and administrative
                          
                          
                          5,606,684
                          
                          
                          
                          3,847,726Operating
      income from continuing operations
                          
                          
                          2,337,472
                          
                          
                          
                          2,108,842Other
      income (expense):Interest
      and financing expense
                          
                          
                          (1,999,528
                          )
                          
                          
                          (2,006,299
                          )Other,
      net
                          
                          
                          (139,750
                          )
                          
                          
                          9,954Other
      (expense), net
                          
                          
                          (2,139,278
                          )
                          
                          
                          (1,996,345
                          )Income
      from continuing operations before income taxes
                          
                          
                          198,194
                          
                          
                          
                          112,497Benefit
      (provision) for income taxes
                          
                          
                          5,332,561
                          
                          
                          
                          (115,799
                          )Income
      (loss) continuing operations
                          
                          
                          5,530,755
                          
                          
                          
                          (3,302
                          )Discontinued
      operations:Income
      from discontinued operations
                          
                          
                          2,360,930
                          
                          
                          
                          297,196Net
      income
                          
                          $
                          7,891,685
                          
                          
                          $
                          293,894Income
      from continuing operations per share – basic
                          
                          $
                          0.18
                          
                          
                          $
                          --Income
      from discontinued operations per share – basic
                          
                          
                          0.08
                          
                          
                          
                          0.01Net
      income per share – basic
                          
                          $
                          0.26
                          
                          
                          $
                          0.01Net
      income per share – diluted
                          
                          $
                          0.22
                          
                          
                          $
                          0.01Weighted
      average shares outstanding -- basic
                          
                          
                          30,880,435
                          
                          
                          
                          21,766,013Weighted
      average shares outstanding -- diluted
                          
                          
                          35,546,787
                          
                          
                          
                          26,456,510
    See
accompanying notes to consolidated financial statements.
  
  27
  GreenMan
Technologies, Inc.
 Consolidated
Statements of Changes in Stockholders’ Deficit
 Years
Ended September 30, 2008 and 2007
 
 AdditionalCommon
      Stock
                    
                    
                    Paid
      In
                    
                    
                    AccumulatedShares
                    
                    
                    Amount
                    
                    
                    Capital
                    
                    
                    Deficit
                    
                    
                    TotalBalance,
      October 1, 2006
                    
                    
                    21,408,966
                    
                    
                    $
                    214,089
                    
                    
                    $
                    35,811,086
                    
                    
                    $
                    (47,437,982
                    )
                    
                    $
                    (11,412,807
                    )Common
      stock issued for fees, incentives and  expenses
    due
                    
                    
                    184,838
                    
                    
                    
                    1,849
                    
                    
                    
                    63,947
                    
                    
                    
                    --
                    
                    
                    
                    65,796Common
      stock issued for services rendered
                    
                    
                    67,533
                    
                    
                    
                    675
                    
                    
                    
                    22,575
                    
                    
                    
                    --
                    
                    
                    
                    23,250Common
      stock issued in connection with lease settlement
                    
                    
                    65,000
                    
                    
                    
                    650
                    
                    
                    
                    31,850
                    
                    
                    
                    --
                    
                    
                    
                    32,500Value
      of options issued for services rendered
                    
                    
                    --
                    
                    
                    
                    --
                    
                    
                    
                    11,070
                    
                    
                    
                    --
                    
                    
                    
                    11,070Common
      stock  issued on exercise of warrants using cashless exercise
      option
                    
                    
                    1,154,098
                    
                    
                    
                    11,541
                    
                    
                    
                    (11,541
                    )
                    
                    
                    --
                    
                    
                    
                    --Compensation
      expense associated with stock options
                    
                    
                    --
                    
                    
                    
                    --
                    
                    
                    
                    66,486
                    
                    
                    
                    --
                    
                    
                    
                    66,486Net
      income for year ended September 30, 2007
                    
                    
                    --
                    
                    
                    
                    --
                    
                    
                    
                    --
                    
                    
                    
                    293,894
                    
                    
                    
                    293,894Balance,
      September 30, 2007
                    
                    
                    22,880,435
                    
                    
                    $
                    228,804
                    
                    
                    $
                    35,995,473
                    
                    
                    $
                    (47,144,088
                    )
                    
                    $
                    (10,919,811
                    )Common
      stock issued for acquisition
                    
                    
                    8,000,000
                    
                    
                    
                    80,000
                    
                    
                    
                    2,720,000
                    
                    
                    
                    --
                    
                    
                    
                    2,800,000Compensation
      expense associated with stock options
                    
                    
                    --
                    
                    
                    
                    --
                    
                    
                    
                    151,928
                    
                    
                    
                    --
                    
                    
                    
                    151,928Value
      of warrants issued for services rendered
                    
                    
                    --
                    
                    
                    
                    --
                    
                    
                    
                    14,268
                    
                    
                    
                    --
                    
                    
                    
                    14,268Net
      income for year ended September 30, 2008
                    
                    
                    --
                    
                    
                    
                    --
                    
                    
                    
                    --
                    
                    
                    
                    7,891,685
                    
                    
                    
                    7,891,685Balance,
      September 30, 2008
                    
                    
                    30,880,435
                    
                    
                    $
                    308,804
                    
                    
                    $
                    38,881,669
                    
                    
                    $
                    (39,252,403
                    )
                    
                    $
                    (61,930
                    )
   
 See
accompanying notes to consolidated financial statements
 
  28
  GreenMan
Technologies, Inc.
 Consolidated
Statements of Cash Flows
 
 Years
      Ended September 30,2008
                                
                                
                                2007Cash
      flows from operating activities:Net
      income
                                
                                $
                                7,891,685
                                
                                
                                $
                                293,894Adjustments
      to reconcile net income to net cash provided by operating
      activities:Gain
      associated with de-consolidation of Georgia subsidiary
                                
                                
                                (2,360,930
                                )
                                
                                
                                --Deferred
      tax asset
                                
                                
                                (5,300,000
                                )
                                
                                
                                --(Gain)
      loss on disposal of property, plant and equipment
                                
                                
                                (81,194
                                )
                                
                                
                                6,697Write
      off of lease receivables
                                
                                
                                65,570
                                
                                
                                
                                --Lease
      settlement and adjustments
                                
                                
                                --
                                
                                
                                
                                (260,456
                                )Depreciation
                                
                                
                                1,429,042
                                
                                
                                
                                1,267,501Amortization
      of deferred interest expense
                                
                                
                                518,325
                                
                                
                                
                                566,508Amortization
      of customer relationships
                                
                                
                                6,949
                                
                                
                                
                                12,949Amortization
      of stock compensation expense
                                
                                
                                151,928
                                
                                
                                
                                66,487Amortization
      of patents
                                
                                
                                21,667
                                
                                
                                
                                --Amortization
      of long term contracts
                                
                                
                                179,250
                                
                                
                                
                                --Deferred
      gain on sale leaseback transaction
                                
                                
                                (36,515
                                )
                                
                                
                                (36,442
                                )Warrants
      issued
                                
                                
                                22,143
                                
                                
                                
                                7,320Common
      stock issued for fees, incentives and expenses
                                
                                
                                --
                                
                                
                                
                                84,920Common
      stock issued for lease settlement
                                
                                
                                --
                                
                                
                                
                                32,500(Increase)
      decrease in assets:Accounts
      receivable
                                
                                
                                (1,155,739
                                )
                                
                                
                                (405,430
                                )Inventory
                                
                                
                                (1,099,518
                                )
                                
                                
                                (43,758
                                )Other
      current assets
                                
                                
                                (56,918
                                )
                                
                                
                                (95,457
                                )Other
      assets
                                
                                
                                288,077
                                
                                
                                
                                (41,200
                                )(Decrease)
      increase in liabilities:Accounts
      payable
                                
                                
                                (90,160
                                )
                                
                                
                                (538,162
                                )Accrued
      expenses
                                
                                
                                195,662
                                
                                
                                
                                170,062Net
      cash provided by operating activities
                                
                                
                                589,324
                                
                                
                                
                                1,087,933Cash
      flows from investing activities:Purchase
      of property and equipment
                                
                                
                                (1,777,415
                                )
                                
                                
                                (941,075
                                )Purchase
      of Welch Products, Inc., net of cash acquired
                                
                                
                                68,571
                                
                                
                                
                                --Deposits
                                
                                
                                (149,600
                                )
                                
                                
                                --Proceeds
      from the sale of equipment and insurance settlements
                                
                                
                                94,344
                                
                                
                                
                                7,250Net
      cash used for investing activities
                                
                                
                                (1,764,100
                                )
                                
                                
                                (933,825
                                )Cash
      flows from financing activities:Net
      advances under line of credit
                                
                                
                                3,300,221
                                
                                
                                
                                --Proceeds
      from notes payable
                                
                                
                                1,073,283
                                
                                
                                
                                596,432Repayment
      of notes payable
                                
                                
                                (2,508,551
                                )
                                
                                
                                (782,539
                                )Principal
      payments on obligations under capital leases
                                
                                
                                (280,525
                                )
                                
                                
                                (200,251
                                )Repayment
      of notes payable, related parties
                                
                                
                                --
                                
                                
                                
                                (30,000
                                )Net
      cash provided (used) by financing activities
                                
                                
                                1,584,428
                                
                                
                                
                                (416,358
                                )Net
      increase (decrease) in cash and cash equivalents
                                
                                
                                409,652
                                
                                
                                
                                (262,250
                                )Cash
      and cash equivalents at beginning of year
                                
                                
                                376,764
                                
                                
                                
                                639,014Cash
      and cash equivalents at end of year
                                
                                $
                                786,416
                                
                                
                                $
                                376,764Supplemental
      cash flow information:Machinery
      and equipment acquired under capital leases
                                
                                $
                                828,564
                                
                                
                                $
                                167,525Shares
      issued in acquisition
                                
                                
                                2,800,000
                                
                                
                                
                                --Net
      change in capital lease
                                
                                
                                --
                                
                                
                                
                                364,000Interest
      paid
                                
                                
                                1,445,471
                                
                                
                                
                                1,420,722Taxes
      paid
                                
                                
                                82,323
                                
                                
                                
                                35,300
 
 Supplemental Schedule of Non-cash
Investing and Financing Activities
 
 As
described in Note 2, on October 1, 2007, GreenMan acquired all of the capital stock of
Welch Products, Inc.as follows:
 
 Working
      capital acquired, net of cash
                          
                          $
                          82,429Property
      acquired
                          
                          
                          574,000Goodwill
      and intangibles, acquired
                          
                          
                          3,168,000Long-term
      debt
                          
                          
                          (1,093,000
                          )Common
      stock issued
                          
                          
                          (2,800,000
                          )Cash
      acquired upon purchase of business
                          
                          $
                          68,571
 
 See
accompanying notes to consolidated financial statements.
 29
  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 with the exception of Welch, which is
included since October 1, 2007.   All significant intercompany
accounts and transactions have been eliminated in consolidation.
  In
September 2005, due to the magnitude of continued operating losses, our Board of
Directors approved plans to divest the operations of our GreenMan Technologies
of Georgia, Inc. subsidiary and dispose of its assets. Accordingly, we
classified all remaining liabilities associated with our Georgia entity and its
results of operations as discontinued operations for all periods presented in
the accompanying consolidated financial statements. In June 2008, GreenMan
Technologies of Georgia, Inc. filed for liquidation under Chapter 7 of the
federal bankruptcy laws in the Bankruptcy Court of the Middle District of
Georgia and a trustee was appointed (See Note 3.) As a result of the bankruptcy
proceedings we have relinquished control of our Georgia subsidiary to the
Bankruptcy Court and therefore have de-consolidated substantially all remaining
obligations from our financial statements as of September 30, 2008.
  Nature
of Operations, Risks, and Uncertainties
  GreenMan
Technologies, Inc. (together with its subsidiaries “we”, “us” or “our”) was
originally founded in 1992 and has operated as a Delaware corporation since
1995. We are comprised of two business segments, the tire recycling operations
and the molded recycled rubber products operations. Most of our business is
derived from the Mid-western United States.
  The
tire recycling operations located in Savage, Minnesota and Des Moines, Iowa
collect, process and market scrap tires in whole, shredded or granular form. We
are paid a fee to collect, transport and process scrap tires (i.e., collection/processing
revenue) in whole or into two inch or smaller rubber chips which are then sold
(i.e., product
revenue).
  On
October 1, 2007, we acquired Welch Products, Inc. (“Welch”), a company
headquartered in Carlisle, Iowa, which specializes in designing, developing, and
manufacturing of environmentally responsible products using recycled materials,
primarily recycled rubber. Welch’s patented products and processes include
playground safety tiles, roadside anti-vegetation products, construction molds
and highway guard-rail rubber spacer blocks. Through its prior acquisition of
Playtribe, Inc., Welch also provides innovative playground design, equipment and
installation.
  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, 2008.
  Cash
Equivalents
  Cash
equivalents include short-term investments with original maturities of three
months or less.
  Reclassification
  Certain
amounts in the 2007 financial statements have been reclassified to conform to
the 2008 presentation.
  Concentration
of Credit Risk
  Financial
instruments which potentially subject the Company to a concentration of credit
risk are cash and cash equivalents. The Company maintains its bank accounts that
at times the balances exceed FDIC insured limits. The Company has not
experienced any losses as a result of this practice.
  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.
  30
  GreenMan
Technologies, Inc.
 Notes
To Consolidated Financial Statements
  1.
                Summary
      of Significant Accounting Policies –
(Continued)
  Inventory
  Raw
material inventory primarily consists of crumb rubber used in production of
molded rubber products and other manufacturing supplies by our molded recycled
rubber products operation. Finished goods primarily consist of molded products,
playground equipment and crumb rubber to be sold to third parties by our tire
recycling operations. All inventory is valued at the lower of cost or market on
the first-in first-out (FIFO) method. Inventory consists of the
following:
 
 September
      30,
                          2008
                        
                        
                        September
      30,
                          2007Raw
      materials
                        
                        $
                        118,499
                        
                        
                        $
                        --Finished
      goods
                        
                        
                        1,635,769
                        
                        
                        
                        157,094Total
      inventory
                        
                        $
                        1,754,268
                        
                        
                        $
                        157,094
  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.
  Advertising Costs
    Revenue
Recognition
  We have primarily two sources of
revenue from each business segment. Our tire processing operations derive
revenue from (1) processing revenue which is earned from the collection,
transportation and processing of scrap tires and (2) 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. Our molded recycled rubber products operations
derive revenue from (1) product revenue which is earned from the sale of molded
rubber products and playground equipment and (2) installation revenue which is
earned from the installation of molded products and playground equipment.
Revenues from product sales are recognized when the products are shipped and
collectability is reasonably assured.  Revenues derived from
installations of our products are recognized when the installation is
complete.
  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
  Effective
October 1, 2006, we adopted the provisions of Statement of Financial Accounting
Standards No. 123R, “Share-Based Payment” (SFAS 123R) for our share-based
compensation plans. We adopted SFAS 123R using the modified prospective
transition method. Under this transition method, compensation cost recognized
includes (a) the compensation cost for all share-based awards granted prior to,
but not yet vested, as of October 1, 2006, based on the grant-date fair value
estimated in accordance with the original provisions of SFAS 123 and (b) the
compensation cost for all share-based awards granted subsequent to September 30,
2006, based on the grant-date fair value estimated in accordance with the
provisions of SFAS 123R. In addition, we continued to use of the “simplified
method” as allowed under Staff issued SAB 110, for determining expected terms on
stock options for calculating expense as the Company’s stock option
exercise experience does not provide a reasonable basis for an estimated
expected option term. Amortization of stock compensation expense was $151,928
and $66,487 for the fiscal years ended September 30, 2008 and 2007 respectively.
The unamortized compensation expense at September 30, 2008
was  $384,927 and will be amortized over a weighted average remaining
amortizable life of approximately 3.5 years.
  The
fair value of each option grant during the year ended September 30, 2007 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
4.6%; expected volatility based on historical trading information ranging from
62% to 78% and expected term of 7.5 years.
  The
fair value of each option grant during the year ended September 30, 2008 under
the 2005 Stock Option Plan were 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 ranging from 2.7% to
4.33%; expected volatility based on historical trading information ranging from
64% to 86% and expected term ranging from 5 to 7.5 years.
  31
  GreenMan
Technologies, Inc.
 Notes
To Consolidated Financial Statements
 
 1.
                Summary
      of Significant Accounting Policies -
(Continued)
  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 $6,950 and $12,950 for the fiscal years
ended September 30, 2008 and 2007 respectively. Accumulated amortization was
$73,465 and $66,515 at September 30, 2008 and 2007, respectively. At September
30, 2008 the remaining balance to be amortized was $65,536. This amount was
fully amortized in conjunction with the sale of the tire recycling business in
November 2008 (see Note 15).
  In conjunction with the Welch Products
acquisition (See Note 2) we recognized $2,289,000 of goodwill which is not tax
deductible, $735,000 associated with long term contractual relationships
acquired and $130,000 to acquired patents. The long term contractual
relationships are being amortized on a straight line basis over an estimated
useful life ranging from 48 to 60 months  and the patents are being
amortized on a straight line basis over an estimated useful life of 60 months.
Goodwill is being evaluated annually for impairment. Amortization expense
associated with contractual relationships amounted to $179,250 for the fiscal
year ended September 30, 2008 and accumulated amortization was $180,750 at
September 30, 2008. Amortization expense associated with patents amounted to
$21,667 for the fiscal year ended September 30, 2008 and accumulated
amortization was $21,667 at September 30, 2008.
  Product Warranty
Costs
  Our
recycled rubber products operations typically offer a five-year warranty for all
of our tile and playground equipment. We provide for the estimated cost of
product warranties at the time product revenue is recognized. Factors that
affect our warranty reserves include the number of units sold, historical and
anticipated rates of warranty repairs, and the cost per repair. We assess the
adequacy of the warranty provision and we may adjust this provision if
necessary.
  The
following table provides the detail of the change in our product warranty
accrual, which is a component of accrued liabilities on the Consolidated Balance
Sheets for the year ended September 30, 2008.
  
 September 30,
                        2008Warranty
      accrual at the beginning of the year
                      
                      $
                      35,000Charged
      to costs and expenses relating to new sales
                      
                      
                      8,488Costs
      to product warranty claims
                      
                      
                      (15,488
                      )Warranty
      accrual at the end of year
                      
                      $
                      28,000
  Long-Lived
Assets
  In
accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144,
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 “Accounting for The Impairment or
Disposal of Long Lived Assets”, 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.
  New
Accounting Pronouncements
  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, de-recognition or measurement of a tax position should be
recognized in the interim period in which the change occurs.  The
adoption of FIN 48 has not had a material effect on our consolidated financial
position or results of operations.
  32
  GreenMan
Technologies, Inc.
 Notes
To Consolidated Financial Statements
  
 1.
                Summary
      of Significant Accounting Policies -
(Continued)
  Net
Income Per Share
  Basic
earnings per share represents income available to common stockholders divided by
the weighted average number of common shares outstanding during the
period.  Diluted earnings per share reflects additional common shares
that would have been outstanding if potentially dilutive common shares had been
issued, as well as any adjustment to income that would result from the assumed
conversion.  Potential common shares that may be issued by us relate
to outstanding stock options and warrants (determined using the treasury stock
method).   Diluted net income per share for the fiscal years
ended are as follows:
 
 September
      30,
                      2008
                    
                    
                    September
      30,
                      2007Weighted
      average shares outstanding
                    
                    
                    30,880,435
                    
                    
                    
                    21,766,013Exercisable
      options and warrants
                    
                    
                    4,666,352
                    
                    
                    
                    4,690,497Weighted
      average shares, fully diluted
                    
                    
                    35,546,787
                    
                    
                    
                    26,456,510Net
      income per share – fully diluted from continuing
operations
                    
                    $
                    0.15
                    
                    
                    $
                    --Net
      income per share – fully diluted from discontinued
    operations
                    
                    $
                    0.07
                    
                    
                    $
                    0.01Net
      income per share – fully diluted
                    
                    $
                    0.22
                    
                    
                    $
                    0.01
  The calculation of additional
exercisable options and warrants above excludes 5,024,012 and 5,185,261 options
and warrants that are outstanding at September 30, 2008 and 2007 respectively,
but are deemed to be anti-dilutive as their exercise price exceeds the average
closing price used in the calculation of fully diluted shares.
  2.
                Acquisition
      of Subsidiary
  On
October 1, 2007, we acquired Welch Products, Inc., a company headquartered in
Carlisle, Iowa, which specializes in designing, developing and manufacturing of
environmentally responsible products using recycled materials, primarily
recycled rubber. Welch’s patented products and processes include playground
safety tiles, roadside anti-vegetation products, construction molds and highway
guard-rail rubber spacer blocks. Through its prior acquisition of Playtribe,
Inc., Welch also provides innovative playground design, equipment and
installation.  Welch had been one of our crumb rubber customers for
the past several years. The transaction was structured as a share exchange in
which 100 percent of Welch’s common stock was exchanged for 8 million shares of
our common stock, valued at $2,800,000 based on the value of the 8 million
shares issued in this transaction on the date of issuance. Welch’s unaudited
revenues for the twelve months ended September 30, 2007 were approximately $1.8
million and Welch recorded a net loss of approximately $646,000 for that
period.
  The
acquisition has been accounted for as a purchase in accordance with SFAS No.
141, “Business Combinations”, and accordingly the results of Welch’s operations
since the date of acquisition are included in our consolidated financial
statements.  The total purchase price of $2,890,000 including
approximately $90,000 of transaction costs has been allocated as
follows:
 
 Total
      identifiable assets acquired
                      $
      2,571,000Total
      identifiable liabilities acquired
                      $
      2,821,000
  The
total consideration paid exceeded the fair value of the net assets acquired by
$3,140,000 resulting in the recognition of $2,289,000 of goodwill and $645,000
assigned to long term contracts (in addition to $90,000 assigned to an existing
contract and being amortized over a 5-year term) based on an analysis of the
discounted future net cash flows of the contracts.  In addition, we
increased the value of land and buildings by $195,000 based on a recent
appraisal and increased the value assigned to patents by $11,000 based on an
analysis of discounted future cash flows associated with the
patents.  The value assigned to the long-term contracts is being
amortized on a straight line basis over an estimated useful life ranging from 48
to 60 months and the value assigned to patents is being amortized on a straight
line basis over an estimated useful life of 60 months. Goodwill will be
evaluated annually.
  Amortization
expense during the next five years is anticipated to be:
 
 Twelve
      months ending September 30:
                                          
                                          Contracts
                                          
                                          
                                          Patents
                                          
                                          
                                          Total2009
                                          
                                          $
                                          179,250
                                          
                                          
                                          $
                                          21,667
                                          
                                          
                                          $
                                          200,9172010
                                          
                                          
                                          179,250
                                          
                                          
                                          
                                          21,667
                                          
                                          
                                          
                                          200,9172011
                                          
                                          
                                          179,250
                                          
                                          
                                          
                                          21,667
                                          
                                          
                                          
                                          200,9172012
                                          
                                          
                                          16,500
                                          
                                          
                                          
                                          21,666
                                          
                                          
                                          
                                          38,1662013
      and thereafter
                                          
                                          
                                          --
                                          
                                          
                                          
                                          21,667
                                          
                                          
                                          
                                          21,667$
                                          554,250
                                          
                                          
                                          $
                                          108,334
                                          
                                          
                                          $
                                          662,584
  Included
in other current and long term assets are lease receivables which bear interest
at rates ranging from 1.99% to 5.5% per annum.
  33
  GreenMan
Technologies, Inc.
 Notes
To Consolidated Financial Statements
  2.
                Acquisition
      of Subsidiary – (Continued)
  Management
annually reviews long-lived assets, goodwill and certain identifiable
intangibles to evaluate whether events or changes in circumstances indicate an
impairment of carrying value.  Such reviews include an analysis of
current results and take into consideration the discounted value of projected
operating cash flows (earnings before interest, taxes, depreciation and
amortization).  An impairment charge would be recognized when expected
future operating cash flows are lower than the carrying value of the
assets.
  The
following unaudited pro forma consolidated financial information sets forth
the pro forma consolidated results of operations of GreenMan Technologies, Inc.
(the “Company”) for the twelve months ended September 30, 2007 as if the Welch
acquisition had occurred on October 1, 2006 (the earliest period presented). The
consolidated results of operations for the twelve months ended September 30,
2007 have been derived from the Company’s historical consolidated financial
information.
  The
pro forma unaudited consolidated financial information has been prepared in
accordance with Article 11 of Regulation S-X and should be read in
conjunction with the Company’s historical audited consolidated financial
statements included in this Form 10-KSB. The pro forma consolidated financial
information does not purport to represent what the Company’s consolidated
results of operations or consolidated financial position would have been if this
transaction had occurred on the date indicated and are not intended to project
the Company’s consolidated results of operations or consolidated financial
position for any future period or date.
  The
pro forma unaudited adjustments are based on estimates and certain
assumptions that the Company believes are reasonable. The consolidated pro forma
adjustments and primary assumptions are described in the accompanying notes
herein.
 
 GREENMAN
TECHNOLOGIES, INC.
 Pro
Forma Unaudited Consolidated Statement of Operations
 Fiscal
Year Ended September 30, 2007
 
 GreenMan
                          Historical
                          Consolidated
                        
                        
                        Welch
                          Products
                        
                        
                        Pro
      Forma
                          Adjustments
                        
                        
                        Pro
      Forma
                          ConsolidatedNet
      sales
                        
                        $
                        20,178,726
                        
                        
                        $
                        1,785,117
                        
                        
                        $
                        (250,764
                        )(1)
                        
                        $
                        21,713,079Cost
      of sales
                        
                        
                        14,222,158
                        
                        
                        
                        1,472,334
                        
                        
                        
                        (250,764
                        )(1)
                        
                        
                        15,483,38839,660
                        (2)Gross
      profit
                        
                        
                        5,956,568
                        
                        
                        
                        312,783
                        
                        
                        
                        (39,660
                        )
                        
                        
                        6,229,691Operating
      expenses:Selling,
      general and administrative
                        
                        
                        3,847,726
                        
                        
                        
                        1,055,340
                        
                        
                        
                        161,256
                        (3)
                        
                        
                        5,064,322Operating
      income from continuing operations
                        
                        
                        2,108,842
                        
                        
                        
                        (742,557
                        )
                        
                        
                        (200,916
                        )
                        
                        
                        1,165,369Other
      income (expense):Interest
      and financing costs
                        
                        
                        (2,006,299
                        )
                        
                        
                        (57,185
                        )
                        
                        
                        --
                        
                        
                        
                        (2,063,484
                        )Other,
      net
                        
                        
                        9,954
                        
                        
                        
                        109,689
                        
                        
                        
                        --
                        
                        
                        
                        119,643Other
      expense, net
                        
                        
                        (1,996,345
                        )
                        
                        
                        52,504
                        
                        
                        
                        --
                        
                        
                        
                        (1,943,841
                        )Income
      (loss) from continuing operations before income taxes
                        
                        
                        112,497
                        
                        
                        
                        (690,053
                        )
                        
                        
                        (200,916
                        )
                        
                        
                        (778,472
                        )(Provision)
      benefit for income taxes
                        
                        
                        (115,799
                        )
                        
                        
                        44,050
                        
                        
                        
                        --
                        
                        
                        
                        (71,749
                        )Income
      (loss) from continuing operations
                        
                        
                        (3,302
                        )
                        
                        
                        (646,003
                        )
                        
                        
                        (200,916
                        )
                        
                        
                        (850,221
                        )Discontinued
      operations:Income
      from discontinued operations
                        
                        
                        297,196
                        
                        
                        
                        --
                        
                        
                        
                        --
                        
                        
                        
                        297,196Net
      income (loss)
                        
                        $
                        293,894
                        
                        
                        $
                        (646,003
                        )
                        
                        $
                        (200,916
                        )
                        
                        $
                        (553,025
                        )Income
      (loss) from continuing operations per share – basic
                        
                        $
                        --
                        
                        
                        $
                        (0.02
                        )
                        
                        $
                        (0.01
                        )
                        
                        $
                        (0.03
                        )Income
      from discontinued operations per share – basic
                        
                        
                        0.01
                        
                        
                        
                        --
                        
                        
                        
                        --
                        
                        
                        
                        0.01Net
      Income (loss) per share – basic
                        
                        $
                        0.01
                        
                        
                        $
                        (0.02
                        )
                        
                        $
                        (0.01
                        )
                        
                        $
                        (0.02
                        )Net
      Income (loss) per share – diluted
                        
                        $
                        0.01
                        
                        
                        $
                        (0.02
                        )
                        
                        $
                        (0.01
                        )
                        
                        $
                        (0.02
                        )Weighted
      average shares outstanding -basic
                        
                        
                        21,766,013
                        
                        
                        
                        29,766,013
                        
                        
                        
                        29,766,013
                        
                        
                        
                        29,766,013Weighted
      average shares outstanding -diluted
                        
                        
                        26,456,510
                        
                        
                        
                        29,766,013
                        
                        
                        
                        29,766,013
                        
                        
                        
                        29,766,013
 
  34
  GreenMan
Technologies, Inc.
 Notes
To Consolidated Financial Statements
  2.
                Acquisition
      of Subsidiary – (Continued)
 
 II.         Adjustments
to pro forma consolidated statements of operations
 
 a)        GREENMAN
TECHNOLOGIES, INC.
  Represents
the historical consolidated statement of operations for the fiscal year ended
September 30, 2007 as reported in the Company’s Form 10-KSB for the fiscal
years ended September 30, 2008.
 
 b)        Welch
Products, Inc.
  Represents
the addition of Welch Products, Inc.’s consolidated revenues and expenses as
reflected in their historical unaudited consolidated statement of operations for
the fiscal year ended September 30, 2007.
 
 c)        Pro
forma adjustments
  1)
                Represents
      an adjustment to eliminate intercompany revenue and cost of goods sold
      relating to sales of crumb rubber by GreenMan Technologies of Iowa, Inc.
      to Welch.
 2)
                Represents
      an adjustment to reflect annual amortization of patents and long term
      manufacturing contracts.
 3)
                Represents
      an adjustment to reflect annual amortization of long term school board
      contracts.
  3.
                Discontinued
      Operations
  Due
to the magnitude of the continuing operating losses incurred by our GreenMan
Technologies of Georgia, Inc. subsidiary ($3.4 million) during fiscal 2005, our
Board of Directors determined it to be in the best interest of our company to
discontinue all Georgia operations and completed the divestiture of its
operating assets during fiscal 2006.  Accordingly, we have classified
all remaining liabilities associated with our Georgia entity and its results of
operations as discontinued operations.
  During
the year ended September 30, 2007 we received credits from vendors, we recovered
certain bad debts and we reduced certain accrued expenses which offset a $19,058
increase in our lease settlement reserve (see discussion of our Georgia lease
below) resulting in approximately $297,000 of income from discontinued Georgia
operations.
  On
June 27, 2008, GreenMan Technologies of Georgia, Inc. filed for liquidation
under Chapter 7 of the federal bankruptcy laws in the Bankruptcy Court of the
Middle District of Georgia and a trustee was appointed.  In July 2008
a Meeting of Creditors was held and on September 30, 2008 we received approval
of the Trustee’s Final Report of No Distribution in relation to the Chapter 7
filing and the case is considered closed.  The Trustee's Report of No
Distribution certifies that the trustee has performed the duties required of a
trustee under 11 U.S.C. 704 and has concluded that there are no assets to
administer.  As a result of the bankruptcy proceedings all pending
litigation was stayed and GreenMan Technologies of Georgia, Inc. was
de-consolidated from our financial statements as of September 30, 2008 resulting
in the recognition of non-cash income from discontinued operations of $2,360,930
during the fiscal year ended September 30, 2008. The results from discontinued
operations are presented net of deferred tax expense of $700,000 and a change in
the deferred tax valuation reserve of an equal amount.
  The
major classes of liabilities associated with discontinued operations
were:
 
 September
      30,
                          2008
                        
                        
                        September
      30,
                          2007Liabilities
      related to discontinued operations:Accounts
      payable
                        
                        $
                        116,664
                        
                        
                        $
                        2,502,779Notes
      payable, current
                        
                        
                        --
                        
                        
                        
                        357,340Accrued
      expenses, other
                        
                        
                        163,147
                        
                        
                        
                        107,115Capital
      leases, current
                        
                        
                        --
                        
                        
                        
                        51,269Total
      liabilities related to discontinued operations
                        
                        $
                        279,811
                        
                        
                        $
                        3,018,503
  4.
                Property,
      Plant and Equipment
  Property,
plant and equipment consists of the following:
 
 September
      30,
                            2008
                          
                          
                          September
      30,
                            2007
                          
                          
                          Estimated
                            Useful
      LivesLand
                          
                          $
                          175,000
                          
                          
                          $
                          --
                          
                          
                          
                          --Buildings
      and improvements
                          
                          
                          2,173,938
                          
                          
                          
                          1,384,028
                          
                          
                          10
      - 20 yearsMachinery
      and equipment
                          
                          
                          8,763,843
                          
                          
                          
                          7,379,405
                          
                          
                          5
      - 10 yearsConstruction
      in progress
                          
                          
                          292,702
                          
                          
                          
                          --Furniture
      and fixtures
                          
                          
                          81,636
                          
                          
                          
                          15,147
                          
                          
                          3
      - 5 yearsMotor
      vehicles
                          
                          
                          5,112,223
                          
                          
                          
                          3,928,089
                          
                          
                          3
      - 10 years16,599,342
                          
                          
                          
                          12,706,669Less
      accumulated depreciation and amortization
                          
                          
                          (9,648,487
                          )
                          
                          
                          (7,487,963
                          )Property,
      plant and equipment, net
                          
                          $
                          6,950,855
                          
                          
                          $
                          5,218,706
 
  35
  GreenMan
Technologies, Inc.
 Notes
To Consolidated Financial Statements
  4.
                Property,
      Plant and Equipment – (Continued)
  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 building
portion of the lease has been classified as a capital lease and the land portion
has been classified as an operating lease. The lease provides for two additional
4-year extensions. We used $875,000 of the proceeds to repay an existing
mortgage on the property.
  Depreciation
and amortization expense for the fiscal years ended September 30, 2008 and 2007
was $1,429,042 and $1,267,501 respectively.
  5.
                Credit
      Facility/Notes Payable
  June
2006 Laurus Credit Facility
  On
June 30, 2006, we entered into a $16 million amended and restated credit
facility with Laurus (the “Credit Facility”). The Credit Facility consists of a
$5 million non-convertible secured revolving note and an $11 million secured
non-convertible term note. The credit facility is 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.  In January 2008, we granted Laurus additional security
interest in the assets of Welch Products and its subsidiaries, which increased
our borrowing base under the revolving note described above.
  The
revolving note has a three-year term from the closing, bears interest on any
outstanding amounts at the prime rate plus 2% (7% at September 30, 2008), with a
minimum rate of 8%.  Amounts advanced under the line are limited to
90% of eligible accounts receivable and 50% of finished goods inventory, up to a
maximum of $5 million, subject to certain limitations.  As of
September 30, 2008, the balance due under the revolving note was $3,300,221. All
amounts due Laurus under the revolving note were paid off on November 17, 2008
in conjunction with the sale of our Tire Recycling Business (See Note
15).
  The
term note has a maturity date of June 30, 2009 and bears interest at the prime
rate plus 2% (7% at September 30, 2008), with a minimum rate of
8%.  Principal is 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 May 2007, Laurus
agreed to reduce the principal payments required during the period of July 2007
to September 2008 to $100,000 per month and defer the difference of $1,500,000
to the June 2009 maturity date.  All amounts due Laurus under the term
note were paid off on November 17, 2008 in conjunction with the sale of our Tire
Recycling Business (See Note 15).
  In
addition, we agreed to make excess cash flow payments beginning with the
fiscal year ended September 30, 2007 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 this clause). Laurus agreed to
waive this provision for the year ended September 30, 2007.
  In
connection with the New Credit Facility, we issued Laurus a warrant to purchase
up to 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 common 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.
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 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 as described
below.
  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. On January 25,
2007, we filed a registration statement under the Securities Act of 1933
relating to the 3,586,429 shares underlying the June 30, 2006 warrant as well as
553,997 shares issuable to another shareholder upon exercise of a warrant. The
registration statement was declared effective on February 6, 2007. During the
period of June through August 2007, Laurus acquired 1,154,098 shares of our
common stock upon the partial exercise of its warrants on a cashless
basis.
  
  36
  GreenMan
Technologies, Inc.
 Notes
To Consolidated Financial Statements
  5.
                Credit
      Facility/Notes Payable –
(Continued)
  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 greater than $50,000 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.
  Pursuant to Statement of Financial
Accounting Standards No. 15, “Accounting by Debtors and Creditors for Troubled
Debt Restructuring” (“SFAS 15”) the Credit Facility has been 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, unamortized balances of $258,900 of
deferred financing fees and $972,836 of debt discount and beneficial conversion
features associated with the previous Laurus 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 Laurus debt and
related accrued interest totaling $8,503,416 to provide a net carrying amount
for that portion of the debt of $6,927,525.  The carrying amount of
the loan is being 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.
 
 Notes
      payable consists of the following at:
                          
                          September
      30,
                              2008
                          
                          
                          September
      30,
                              2007Term
      note payable, Laurus Master Fund, Ltd., due in monthly installments of
      $100,000 plus interest at prime plus 2% (8.0% at September 30, 2008)
      through September 30, 2008 followed by 12 monthly principal payments of
      $400,000 plus interest with the remaining balance due June
      2009
                          
                          
                          9,140,073
                          
                          
                          
                          9,821,748Term
      note payable, Republic Services of Georgia, LP, unsecured, due
      in  3 monthly installments of $15,411 with the remaining balance
      due December 31, 2007
                          
                          
                          --
                          
                          
                          
                          46,234Term
      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
                          
                          
                          158,488
                          
                          
                          
                          189,736Term
      note payable, State of Iowa, secured by certain assets of GreenMan of
      Iowa, due in quarterly installments of $6,920 including interest at 3%
      through October 2012
                          
                          
                          104,021
                          
                          
                          
                          128,084Term
      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
                          
                          
                          332,795
                          
                          
                          
                          391,794Term
      notes payable, Daimler Chrysler Financial Services, secured by equipment
      of GreenMan of Minnesota, due in monthly installments ranging from $1,651
      to $5,279 including interest at between 6.95% interest and 8.48% with
      remaining balance due between 2009 and 2012
                          
                          
                          847,251
                          
                          
                          
                          442,111Term
      note payable, Great Western Bank, secured by certain receivables and other
      assets of Welch Products, due in annual installments of $200,626 plus
      interest at 8% with remaining principal due July 2010
                          
                          
                          401,786
                          
                          
                          
                          --Term
      note payable, William Welch, secured by all real estate of Welch Products,
      due in monthly installments of $1,927 plus interest at 7.1% and due
      December 2026
                          
                          
                          236,080
                          
                          
                          
                          --Other
      term notes payable and assessments, secured by various equipment with
      interest rates ranging from 0% to 13.33% and requiring monthly
      installments from $639 to $5,490...
                          
                          
                          875,602
                          
                          
                          
                          324,98412,096,096
                          
                          
                          
                          11,344,691Less
      current portion
                          
                          
                          (10,073,065
                          )
                          
                          
                          (1,072,117
                          )Notes
      payable, non-current portion
                          
                          $
                          2,023,031
                          
                          
                          $
                          10,272,574
 
 The
following is a summary of maturities of carrying values of all notes payable at
September 30, 2008:
 
 Years Ending September 30,2009
                          
                          $
                          10,073,0652010
                          
                          
                          702,1732011
                          
                          
                          409,3992012
                          
                          
                          476,7882013
                          
                          
                          235,8712014
      and thereafter
                          
                          
                          198,800$
                          12,096,096
 
  37
  GreenMan
Technologies, Inc.
 Notes
To Consolidated Financial Statements
  5.
                Credit
      Facility/Notes Payable – (Continued
  The carrying value of the Laurus debt
under the New Credit Facility at September 30, 2008 was $9,140,073 and does not
equate to the remaining total cash payments of $9,500,000 due under the debt as
a result of accounting for a troubled debt restructure.Interest expense
on the lines of credit and notes payable for the years ended September 30, 2008
and 2007 amounted to $1,999,528 and $2,006,299, respectively.
  6.
                Notes
      Payable –Related Party
  Note
Payable-Related Party
  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.
  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. In 2006 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 the remaining
balance of $99,320 as follows: $79,060 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 (subsequently extended until the earlier of when all amounts due under the
restructured Laurus credit facility have been repaid or June 30, 2009). During
fiscal 2006, the director agreed in lieu of being repaid in cash at maturity to
convert $91,676 (including interest of $1,676) into 315,330 shares of
unregistered common stock at the closing price of our stock on the dates of
conversion ($.28 and $.35). During the year ended of September 30, 2007 the
director was repaid $30,000.
  Total
interest expense for related party notes amounted to $63,444 and $85,612, for
the fiscal years ended September 30, 2008 and 2007, respectively.  As
of September 30, 2008, $534,320 was due related parties and the total accrued
interest due related parties amounted to $113,574 and $101,653 at September 30,
2008 and 2007, respectively. All amounts due related parties were repaid in
November 2008 (See Note 15).
  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
$57 to $16,250. Assets acquired under capital leases with an original cost of
$3,698,225 and $2,869,661 and related accumulated amortization of $1,673,382 and
$1,415,217 are included in property, plant and equipment at September 30, 2008
and 2007, respectively.  Amortization expense for the years ended
September 30, 2008 and 2007 amounted to $258,165 and $157,762
respectively.
  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 building lease has been
classified as a capital lease with a value of $1,036,000 and the portion
allocated to the land has been treated as an operating lease.
  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. 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 a $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 Obligations due under lease settlement at September 30,
2008.
 
  38
  GreenMan
Technologies, Inc.
 Notes
To Consolidated Financial Statements
  7.
                Capital
      Leases – (Continued)
  During
fiscal 2007, we entered into a new capital lease agreement with a company
co-owned by one of our employees for equipment valued at $64,719. We are
required to pay $1,614 per month rental and have the ability to purchase the
equipment at the end of the lease for $8,512.During fiscal 2008, we
entered into 2 new capital lease agreements with the same company for
equipment valued at $358,548. Under the terms of the leases we are required to
pay between $2,974 and $5,000 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 $1 per unit.
  Total
payments due under long term capital leases are as follows:
 
 Years Ending September 30,2009
                          
                          $
                          586,1002010
                          
                          
                          581,0722011
                          
                          
                          479,9482012
                          
                          
                          334,0302013
                          
                          
                          258,8602014
      and thereafter
                          
                          
                          420,801Total
      minimum lease payments
                          
                          
                          2,660,811Less
      amount representing interest
                          
                          
                          (655,118
                          )Present
      value of minimum lease payments
                          
                          $
                          2,005,693
  For
the years ended September 30, 2008 and 2007, interest expense on capital leases
amounted to $196,512 and $76,796, respectively.
  8.
                Commitments
      and Contingencies
  Employment
Agreements
  We
have employment agreements with three of our corporate officers, which provide
for base salaries, participation in employee benefit programs including our
stock option plans and severance payments for termination without
cause.
  Rental
Agreements
  Our
Iowa subsidiary leased 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.
  For
the years ended September 30, 2008 and 2007, total rental expense in connection
with all non-cancellable real estate leases amounted to $198,228 and $333,450,
respectively including $198,228 and $218,450, repectively 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.
  For
the fiscal years ended September 30, 2008 and 2007, total rent expense in
connection with non-cancellable operating vehicle and equipment leases amounted
to $38,683 and $68,199, respectively with all amounts paid to related parties
during both fiscal years.   The total future minimum rental
commitment at September 30, 2008 under the above operating leases are as
follows:
 
 Year
      ending September 30:
                                    
                                    Real
      Estate
                                    
                                    
                                    Equipment
                                    
                                    
                                    Total2009
                                    
                                    $
                                    204,756
                                    
                                    
                                    $
                                    6,000
                                    
                                    
                                    $
                                    210,7562010
                                    
                                    
                                    204,756
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    204,7562011
                                    
                                    
                                    204,756
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    204,7562012
                                    
                                    
                                    206,948
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    206,9482013
                                    
                                    
                                    135,448
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    135,4482014
      and thereafter
                                    
                                    
                                    211,816
                                    
                                    
                                    
                                    --
                                    
                                    
                                    
                                    211,816$
                                    1,168,480
                                    
                                    
                                    $
                                    6,000
                                    
                                    
                                    $
                                    1,174,480
  
  39
  GreenMan
Technologies, Inc.
 Notes
To Consolidated Financial Statements
  8.
                Commitments
      and Contingencies – (Continued)
  Litigation
  As
previously disclosed 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 Laurus, our secured lender, and these subsidiaries have no
assets.  Several vendors of these subsidiaries commenced legal action,
primarily in the state courts of Georgia, in attempts to collect past due
amounts, plus accruing interest, attorneys’ fees, and costs, all relating to
various services rendered to these subsidiaries.  Although GreenMan
Technologies, Inc. itself was not a party to any of these vendor relationships,
three of the plaintiffs, representing approximately $900,000 of these claims,
have named GreenMan Technologies, Inc. as a defendant along with GreenMan
Technologies of Georgia, Inc.
  On
June 27, 2008, GreenMan Technologies of Georgia, Inc. filed for liquidation
under Chapter 7 of the federal bankruptcy laws in the Bankruptcy Court of the
Middle District of Georgia and a trustee was appointed.   As a
result of the bankruptcy proceedings all pending litigation was stayed and
GreenMan Technologies of Georgia, Inc. was de-consolidated from our financial
statements as of June 30, 2008.
  As
of September 30, 2008 one vendor had secured a summary judgment for
approximately $890,000 against GreenMan Technologies, Inc. GreenMan believes it
has valid defenses to these claims, as well as against any similar or related
claims that may be made against us in the future, we did not receive proper
notice of the summary judgment against us and therefore were unable to timely
appeal the judgment. Management therefore determined it to be in the best
interests of GreenMan Technologies, Inc. to reach settlement on this judgment
rather than to attempt to appeal the judgment for lack of proper notice. On
March 28, 2008, GreenMan Technologies, Inc. agreed to a cash settlement of
$450,000 with $100,000 paid upon signing the settlement agreement and nine
additional monthly payments of $38,889 commencing on April 30, 2008 and ending
on December 31, 2008. Upon receipt of the final payment, the plaintiff has
agreed to mark the judgment satisfied with the appropriate courts, at which time
we anticipate recording a gain on settlement of approximately
$150,000.
  9.
                Stockholders’
      Equity
  Authorized
Shares
  On
April 2, 2008, our shareholders approved an amendment to our Restated
Certificate of Incorporation to increase the number of authorized shares of
common stock from 40,000,000 to 60,000,000 shares.
  Common
Stock Transactions
  During
fiscal 2007, we issued 42,533 shares of our unregistered common stock valued at
$15,000 (at prices ranging from $.33 to $.40 which represented the closing price
of our stock on the dates of issuance) to a third party for financial consulting
services rendered during fiscal 2007. In April 2007, we executed a one-year
financial consulting agreement with this third party. In exchange for services
to be provided, we agreed to (1) issue 25,000 shares of unregistered common
stock (valued at $8,250); (2) issue warrants to purchase 75,000 shares of common
stock (valued at $7,500) exercisable for a three year period at prices ranging
from $0.33 to $0.75 per share.
  In
conjunction with the November 2006 termination of the lease for our former
Massachusetts headquarters we issued 65,000 shares of our unregistered common
stock valued at $32,500 at a price of $.50 which was the closing price of our
stock on the date of issuance. (See Note 8)
  During
the period of June through August 2007, Laurus acquired 1,154,098 shares of our
common stock upon the partial exercise of its warrant on a cashless
basis.
  During
the fiscal year ended September 30, 2007, several directors agreed to accept
64,559 shares of unregistered common stock valued at $22,500 (all shares were
issued at a price equal to the closing price of our common stock on date of
issuance) in lieu of cash for certain director’s fees and expenses due the
directors.
  On
October 1, 2007, we issued 8,000,000 shares of our unregistered common stock
valued at $2,800,000 (at a price of $.35 which was the closing price of our
stock on the date of issuance) in connection with the acquisition of Welch
Products. (See Note 2.)
  
  40
  GreenMan
Technologies, Inc.
 Notes
To Consolidated Financial Statements
  9.
                Stockholders’
      Equity - (Continued)
  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:
 
 Year
      Ended
                      September
      30, 2008
                    
                    
                    Year
      Ended
                      September
      30, 2007Shares
                    
                    
                    Weighted
                      Average
                      Exercise
                      Price
                    
                    
                    Shares
                    
                    
                    Weighted
                      Average
                      Exercise
                      PriceOutstanding
      at beginning of period
                    
                    
                    1,022,356
                    
                    
                    $
                    .82
                    
                    
                    
                    1,032,356
                    
                    
                    $
                    .82Granted
                    
                    
                    --
                    
                    
                    
                    --
                    
                    
                    
                    --
                    
                    
                    
                    --Forfeited
      or expired
                    
                    
                    (427,894
                    )
                    
                    
                    1.09
                    
                    
                    
                    (10,000
                    )
                    
                    
                    .71Exercised
                    
                    
                    --
                    
                    
                    
                    --
                    
                    
                    
                    --
                    
                    
                    
                    --Outstanding
      at end of period
                    
                    
                    594,462
                    
                    
                    
                    .62
                    
                    
                    
                    1,022,356
                    
                    
                    
                    .82Exercisable
      at end of period
                    
                    
                    594,462
                    
                    
                    
                    .62
                    
                    
                    
                    1,022,356
                    
                    
                    
                    .82Reserved
      for future grants at end of period
                    
                    
                    --
                    
                    
                    
                    
                    
                    
                    
                    --Aggregate
      intrinsic value of exercisable options
                    
                    $
                    100
                    
                    
                    
                    
                    
                    
                    $
                    100Weighted
      average fair value of options granted during the period
                    
                    
                    
                    
                    
                    $
                    --
                    
                    
                    
                    
                    
                    
                    $
                    --
  Information
pertaining to options outstanding under the plan at September 30, 2008 is as
follows:
 
 Options
      Outstanding
                              
                              
                              Options
      ExercisableExercisePrices
                              
                              
                              Number
                                Outstanding
                              
                              Weighted
                                Average
                                Remaining
                                Contractual
                                Life
                              
                              Weighted
                                Average
                                Exercise
                                Price
                              
                              
                              Number
                                Exercisable
                              
                              Weighted
                                Average
                                Remaining
                                Contractual
                                Life
                              
                              Weighted
                                Average
                                Exercise
                                Price$
                              .38
      - .53
                              
                              
                              
                              496,462
                              
                              1.9
      years
                              
                              $
                              .49
                              
                              
                              
                              496,462
                              
                              1.9
      years
                              
                              $
                              .49$
                              .84
                              
                              
                              
                              50,000
                              
                              .4
      years
                              
                              
                              .84
                              
                              
                              
                              50,000
                              
                              .4
      years
                              
                              
                              .84$
                              .28
      - .55
                              
                              
                              
                              48,000
                              
                              2.8
      years
                              
                              
                              1.80
                              
                              
                              
                              48,000
                              
                              2.8
      years
                              
                              
                              1.80594,462
                              
                              1.9
      years
                              
                              $
                              .62
                              
                              
                              
                              594,462
                              
                              1.9
      years
                              
                              $
                              .62
 
 2005
Stock Option Plans
  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. In
April 2008, our stockholders approved an increase to the number of shares
authorized under the 2005 Plan from 2,000,000 to 3,500,000 shares.  In
April 2008, our stockholders approved an increase to the number of shares
authorized under the 2005 Plan from 2,000,000 to 3,500,000 shares.
  During
fiscal 2007, 800,000 qualified options in aggregate were granted at exercise
prices ranging from $.35 to $.55 per share. All options have a ten-year term
with 775,00 vesting equally over a five year term from the date of grant and
25,000 vesting immediately upon grant.
  During
the fiscal 2008, 870,000 qualified options in aggregate were granted with
670,000 options having an exercise price of $.35 per share, vest annually at 20%
per year over a five-year period from date of grant and have a ten-year term.
The remaining 200,000 have exercise prices ranging from $.33 to $34 per share,
vest immediately and have a ten-year term.
 
  41
  GreenMan
Technologies, Inc.
 Notes
To Consolidated Financial Statements
  9.
                Stockholders’
      Equity - (Continued)
  
 Year
      Ended
                              September
      30, 2008
                            
                            
                            Year
      Ended
                              September
      30, 2007Shares
                            
                            
                            Weighted
      Average
                              Exercise
                              Price
                            
                            
                            Shares
                            
                            
                            Weighted
                              Average
                              Exercise
                              PriceOutstanding
      at beginning of period
                            
                            
                            1,662,000
                            
                            
                            $
                            .34
                            
                            
                            
                            929,000
                            
                            
                            $
                            .29Granted
                            
                            
                            870,000
                            
                            
                            
                            .35
                            
                            
                            
                            800,000
                            
                            
                            
                            .38Forfeited
      or expired
                            
                            
                            --
                            
                            
                            
                            .--
                            
                            
                            
                            (67,000
                            )
                            
                            
                            .28Exercised
                            
                            
                            --
                            
                            
                            
                            --
                            
                            
                            
                            --
                            
                            
                            
                            --Outstanding
      at end of period
                            
                            
                            2,532,000
                            
                            
                            
                            .34
                            
                            
                            
                            1,662,000
                            
                            
                            
                            .34Exercisable
      at end of period
                            
                            
                            724,800
                            
                            
                            
                            .33
                            
                            
                            
                            197,400
                            
                            
                            
                            .30Reserved
      for future grants
                            
                            
                            968,000
                            
                            
                            
                            
                            
                            
                            
                            338,000Aggregate
      intrinsic value of exercisable options
                            
                            $
                            50,494
                            
                            
                            
                            
                            
                            
                            $
                            17,522Aggregate
      intrinsic value of all options
                            
                            $
                            148,410
                            
                            
                            
                            
                            
                            
                            $
                            95,610Weighted
      average fair value of options granted during the period
                            
                            
                            
                            
                            
                            $
                            .23
                            
                            
                            
                            
                            
                            
                            $
                            .27
  Information
pertaining to options outstanding under the plan at September 30, 2008 is as
follows:
 
 Options
      Outstanding
                      
                      
                      Options
      ExercisableExercisePrices
                      
                      
                      Number
                        Outstanding
                      
                      Weighted
                        Average
                        Remaining
                        Contractual
                        Life
                      
                      Weighted
                        Average
                        Exercise
                        Price
                      
                      
                      Number
                        Exercisable
                      
                      Weighted
                        Average
                        Remaining
                        Contractual
                        Life
                      
                      Weighted
                        Average
                        Exercise
                        Price$
                      .28
      - .55
                      
                      
                      
                      2,532,000
                      
                      8.4
      years
                      
                      $
                      .34
                      
                      
                      
                      724,800
                      
                      8.3
      years
                      
                      $
                      .33
 
 The
following table summarizes activity related to non-vested options:
 
 Year
      Ended
                          September
      30, 2008Weighted
      AverageGrant
      DateShares
                        
                        
                        Fair
      ValueNon-vested
      at beginning of period
                        
                        
                        1,465,000
                        
                        
                        $
                        .25Granted
                        
                        
                        870,000
                        
                        
                        
                        .23Forfeited
      or expired
                        
                        
                        --
                        
                        
                        
                        --Vested
                        
                        
                        (527,800
                        )
                        
                        
                        .23Non-vested
      at end of period
                        
                        
                        1,807,200
                        
                        
                        
                        .25
 
 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.
  As
of September 30, 2008, 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.  At September 30, 2008, options outstanding had a
weighted average exercise price of $1.10 per share and a weighted average
contractual life of 5.5 years.
 
  42
  GreenMan
Technologies, Inc.
 Notes
To Consolidated Financial Statements
  9.
                Stockholders’
      Equity - (Continued)
  Other
Stock Options and Warrants
  In
April 2007, we executed a one year investor relations consulting agreement with
this third party. In exchange for services to be provided, we agreed to (1) pay
$6,500 per month and (2) issue warrants to purchase 150,000 shares of common
stock (valued at $28,500) which vest equally over a twenty four month period
from date of agreement and are exercisable for a three year period at $0.40
per share.
  Information
pertaining to all other options and warrants granted and outstanding is as
follows:
 
 Year
      Ended
                          September
      30, 2008
                        
                        
                        Year
      Ended
                          September
      30, 2007Shares
                        
                        
                        Weighted
                          Average
                          Exercise
                          Price
                        
                        
                        Shares
                        
                        
                        Weighted
                          Average
                          Exercise
                          PriceOutstanding
      at beginning of period
                        
                        
                        7,163,402
                        
                        
                        $
                        .44
                        
                        
                        
                        8,953,603
                        
                        
                        $
                        .44Granted
                        
                        
                        --
                        
                        
                        
                        --
                        
                        
                        
                        225,000
                        
                        
                        
                        .44Forfeited
      or expired
                        
                        
                        (627,500
                        )
                        
                        
                        1.92
                        
                        
                        
                        (827,106
                        )
                        
                        
                        1.92Exercised
                        
                        
                        --
                        
                        
                        
                        --
                        
                        
                        
                        (1,188,095
                        )
                        
                        
                        .01Outstanding
      at end of period
                        
                        
                        6,535,902
                        
                        
                        
                        .44
                        
                        
                        
                        7,163,402
                        
                        
                        
                        .44Exercisable
      at end of period
                        
                        
                        6,479,652
                        
                        
                        
                        .44
                        
                        
                        
                        7,032,152
                        
                        
                        
                        .44Aggregate
      intrinsic value of exercisable options/warrants
                        
                        $
                        1,829,744
                        
                        
                        
                        
                        
                        
                        $
                        1,829,744Aggregate
      intrinsic value of all options/warrants
                        
                        $
                        1,829,744
                        
                        
                        
                        
                        
                        
                        $
                        1,829,744Weighted
      average fair value of options granted during the period
                        
                        
                        
                        
                        
                        $
                        --
                        
                        
                        
                        
                        
                        
                        $
                        .44
 
 Options/Warrants
      Outstanding
                    
                    
                    Options/Warrants
      ExercisableExercisePrices
                    
                    
                    Number
                      Outstanding
                    
                    Weighted
                      Average
                      Remaining
                      Contractual
                      Life
                    
                    Weighted
                      Average
                      Exercise
                      Price
                    
                    
                    Number
                      Exercisable
                    
                    Weighted
                      Average
                      Remaining
                      Contractual
                      Life
                    
                    Weighted
                      Average
                      Exercise
                      Price$
                    .01 – 1.09
                    
                    
                    
                    6,240,903
                    
                    6.0
      years
                    
                    $
                    .19
                    
                    
                    
                    6,184,653
                    
                    6.0
      years
                    
                    $
                    .19$
                    1.50
      – 2.29
                    
                    
                    
                    295,000
                    
                    1.9
      years
                    
                    
                    1.93
                    
                    
                    
                    295,000
                    
                    1.9
      years
                    
                    
                    1.936 535,903
                    
                    5.8
      years
                    
                    $
                    .27
                    
                    
                    
                    6,479,653
                    
                    5.9
      years
                    
                    $
                    .27
 
 Common
Stock Reserved
  We
have reserved common stock at September 30, 2008 as follows:
 
 Stock
      option plans
                        
                        
                        3,126,462Other
      stock options
                        
                        
                        328,000Other
      warrants
                        
                        
                        6,235,9029,690,364
  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 75% of employee
compensation up to the maximum contribution allowed by law 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, 2008 and 2007, respectively.
 
  43
  GreenMan
Technologies, Inc.
 Notes
To Consolidated Financial Statements
  11.
                Segment
      Information
  In
conjunction with the acquisition of Welch Products (See Note 2) on October 1,
2007, we established a new reporting structure whereby we now have two
reportable operating segments: (1) tire recycling and  (2) molded
recycled rubber products. We have identified the tire recycling and molded
recycled rubber product as operating segments for which discrete financial
information is available. Each operating segment has its respective management
team.
  The
tire recycling operations collect, process and market scrap tires in whole,
shredded or granular form. We are paid a fee to collect, transport and process
scrap tires (i.e.,
collection/processing revenue) in whole or into two inch or smaller rubber chips
which are then sold (i.e., product
revenue).
  The
molded recycled rubber products operations manufacture, install and market
branded recycled content products and services that provide schools and other
political subdivisions viable solutions for safety, compliance, and
accessibility. Pursuant to  SFAS No. 131, “Disclosures about Segments
of an Enterprise and Related Information”, our Chief Executive Officer has been
identified as the chief operating decision maker (CODM) as he assesses the
performance of the segments and decides how to allocate resources to the
segments. Income (loss) from operations is the measure of profit and loss that
our CODM uses to assess performance and make decisions. Assets are not a measure
used to assess the performance of the company by the CODM; therefore we will
report assets by segment in our disclosures. Income (loss) from operations
represents the net sales less the cost of sales and direct operating expenses
incurred within the operating segments as well the allocation of some but not
all corporate operating expenses. These unallocated costs include certain
corporate functions (certain legal, accounting, wage, public relations and
interest expense) are included in the results below under Corporate and other in
the reconciliation of operating results. Management does not consider
unallocated Corporate and other in its management of segment
reporting.
  The
following table provides total assets for our operating segments as of
:
 
 Total assets:
                          
                          September
      30,
                            2008
                          
                          
                          September
      30,
                            2007Tire
      recycling
                          
                          $
                          11,412,062
                          
                          
                          $
                          9,034,960Molded
      recycled rubber products
                          
                          
                          6,610,698
                          
                          
                          
                          --Corporate
      and other
                          
                          
                          5,584,729
                          
                          
                          
                          256,243Total
      assets
                          
                          $
                          23,607,489
                          
                          
                          $
                          9,291,203
  The
following table provides net sales and income from operations for our operating
segments:
 
 Fiscal
      Year EndedSeptember
      30,
                      
                      
                      September
      30,2008
                      
                      
                      2007Net sales;Tire
      recycling
                      
                      $
                      23,283,359
                      
                      
                      $
                      20,178,726Molded
      recycled rubber products
                      
                      
                      3,465,414
                      
                      
                      
                      --Corporate
      and other
                      
                      
                      --
                      
                      
                      
                      --Total net
      sales
                      
                      $
                      26,748,773
                      
                      
                      $
                      20,178,726
  Sales
between the segments were $356,166 during the fiscal year ended September 30,
2008.
 Fiscal
      Year EndedSeptember
      30,
                      
                      
                      September
      30,2008
                      
                      
                      2007Income (loss) from continuing
      operations:Tire
      recycling
                      
                      $
                      3,142,249
                      
                      
                      $
                      2,187,758Molded
      recycled rubber products
                      
                      
                      (800,157
                      )
                      
                      
                      --Corporate
      and other
                      
                      
                      3,188,663
                      
                      
                      
                      (2,191,060
                      )Total
      income (loss) from continuing operations
                      
                      $
                      5,530,755
                      
                      
                      $
                      (3,302
                      )
  12.
                Major
      Customers
  During
the fiscal years ended September 30, 2008 and 2007, no one customer accounted
for more than 10% of our consolidated net sales.
  
  44
  GreenMan
Technologies, Inc.
 Notes
To Consolidated Financial Statements
  13.
                Fair
      Value of Financial Instruments
  At September 30,
2008 and 2007, 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.
  14.
                Income
      Taxes
  The
(benefit) provision for income taxes was comprised of the following amounts for
the years ended:
 
 September
      30,
                        
                        
                        September
      30,2008
                        
                        
                        2007Current:Federal
                        
                        $
                        --
                        
                        
                        $
                        22,691State
                        
                        
                        (32,561
                        )
                        
                        
                        93,108(32,561
                        )
                        
                        
                        115,799Change
      in valuation reserve
                        
                        
                        (5,300,000
                        )
                        
                        
                        --Total
      (benefit) provision for income taxes
                        
                        $
                        (5,332,561
                        )
                        
                        $
                        115,799
 
 The 2007
state taxes result from income in states where we have no net operating loss
carry forwards.
  Historically we have
provided a valuation reserve equal to 100% of our potential deferred tax benefit
due to the uncertainty of our ability to realize the anticipated benefit given
our historial losses. As a result of the
estimated
gain to be realized in fiscal 2009 fromthe sale of the
tire recycling operations and anticipated overall Company results for fiscal
2009, we expect to be able to realize the benefit of a portion of our federal
net operating loss carryforwards. Using an effective overal tax rate of 30%
(which takes into account certain state net operating loss limitations)
we have recognized a change in the valuation allowance of $5.3 million
during the fiscal year ended September 30, 2008 based on the estimated gain
associated with the November 2008 sale of our tire recycling
operations.
  In
addition, as of September 30, 2008, using an effective overall tax rate of 30%
(which takes into account certain state net operating loss limitations) we have
calculated a deferred tax liability of approximately $700,000 associated with
the income recognized from the write-off of all liabilities
associated with the de-consolidation of GreenMan of Georgia during fiscal
2008. We have sufficient net operating loss carryforwards to offset this
anticipated deferred tax liability and accordingly will not recognize any
additional income tax at September 30, 2008.
  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 giverise to deferred
income taxes:
 
 September
      30,
                                                  
                                                  
                                                  September
      30,2008
                                                  
                                                  
                                                  2007Net
      operating loss carry forwards
                                                  
                                                  $
                                                  11,118,532
                                                  
                                                  
                                                  $
                                                  12,367,000Differences
      in fixed asset bases
                                                  
                                                  
                                                  (1,043,729
                                                  )
                                                  
                                                  
                                                  (529,000
                                                  )Capital
      loss carryover
                                                  
                                                  
                                                  1,286,937
                                                  
                                                  
                                                  
                                                  1,287,000Other,
      net
                                                  
                                                  
                                                  734,900
                                                  
                                                  
                                                  
                                                  801,00012,096,640
                                                  
                                                  
                                                  
                                                  13,926,000Valuation
      reserve
                                                  
                                                  
                                                  (6,796,640
                                                  )
                                                  
                                                  
                                                  (13,926,000
                                                  )Net
      deferred tax asset
                                                  
                                                  $
                                                  5,300,000
                                                  
                                                  
                                                  $
                                                  --
  The
change in the valuation reserve is as follows:
 
 Year
      Ended
                                  September 30, 2008
                                
                                
                                Year
      Ended
                                  September 30, 2007Balance
      at beginning of period
                                
                                $
                                13,926,000
                                
                                
                                $
                                14,288,000Tax
      benefit to be realized
                                
                                
                                (6,000,000
                                )
                                
                                
                                --Decrease
      (increase) due to rate differentials and current period operating
      results
                                
                                
                                (628,055
                                )
                                
                                
                                362,000Other
                                
                                
                                (501,508
                                )
                                
                                
                                --Balance
      at end of period
                                
                                $
                                6,796,640
                                
                                
                                $
                                13,926,000
 
 As
of September 30, 2008, we had net operating loss carry forwards of approximately
$32 million including a net operating loss of $29 million and a $3 million
capital loss carry-forward.  The Federal and state net operating loss
carry forwards expire in varying amounts beginning in 2009. 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.
  45
  GreenMan
Technologies, Inc.
 Notes
To Consolidated Financial Statements
  15.
                Subsequent
      Event
  On
September 12, 2008 we executed an Asset Purchase Agreement with Liberty Tire
Services of Ohio, LLC, a wholly-owned subsidiary of Liberty Tire Services, LLC
(“LTS”), the largest tire recycling company in the United States for sale of our
Tire Recycling Business, subject to shareholder approval. On November 13, 2008
our shareholders approved the sale and on November 17, 2008 we completed the
divestiture of substantially all of the assets of GreenMan Technologies of
Minnesota, Inc. and GreenMan Technologies of Iowa, Inc. for approximately $27.5
million in cash. We anticipate recognizing a gain on sale of approximately $19
million .
  We used approximately $17.7 million of
the proceeds of this sale to retire certain transaction related obligations and
other debt including approximately $12.8 million due Laurus and will have
approximately $9.8 million of available cash before estimated transaction
related income taxes and other costs which we estimate to be approximately $1.6
million.
  Unaudited
Proforma Information
  The
following pro forma consolidated financial information sets forth the pro forma
consolidated results of operations of GreenMan Technologies, Inc. (the
“Company”) for the twelve months ended September 30, 2008 and 2007 and the pro
forma consolidated financial position of the Company as of September 30,
2008.
  The
pro forma consolidated results of operations for the twelve months ended
September 30, 2008 and 2007 have been derived from the Company’s historical
consolidated financial information and give effect to the following transaction
as if it had occurred on October 1, 2006 (the earliest period presented).
In addition, the pro forma consolidated balance sheet as of September 30, 2008
has been derived from the Company’s historical consolidated financial
information and gives effect to the following transaction as if it had occurred
on September 30, 2008:
  ·
                Transaction — The
      sale of substantially all of the net assets of the Company’s Tire
      Recycling Business in exchange for approximately $27.5 million in cash. At
      closing, we estimate $12.8 million will be used to pay-off our Laurus
      credit facility, $3.1 million will be used to retire certain transaction
      related obligations, $1.5 million will be due in federal and state income
      taxes, $1.375 million (5% of gross proceeds) of the cash proceeds
      will be placed in a restricted account to cover possible indemnification
      claims, $.95 million will be used to pay down a portion of other debt
      including approximately $.65 million of related party and other debt and
      other transaction related fees to legal and accounting
      services.
  The
pro forma consolidated financial information has been prepared in accordance
with Article 11 of Regulation S-X and should be read in conjunction
with the Company’s historical audited consolidated financial statements and
unaudited interim consolidated financial statements included in this Form
10-KSB.
  The
pro forma consolidated financial information does not purport to represent what
the Company’s consolidated results of operations or consolidated financial
position would have been if this transaction had occurred on the date indicated
and are not intended to project the Company’s consolidated results of operations
or consolidated financial position for any future period or date.
  The
pro forma adjustments are based on estimates and certain assumptions that the
Company believes are reasonable. The consolidated pro forma adjustments and
primary assumptions are described in the accompanying notes herein.
 
  46
  GreenMan
Technologies, Inc.
 Notes
To Consolidated Financial Statements
  15.
                Subsequent
      Event – (Continued)
 
 GREENMAN
TECHNOLOGIES, INC.
 Pro
Forma Unaudited Consolidated Balance Sheet
 As
of September 30, 2008
 
 GreenMan
                                    Historical
                                    Consolidated
                                  
                                  
                                  Tire
      Recycling
                                    Businesses
                                  
                                  
                                  Pro
      Forma
                                    Adjustments
                                  
                                  
                                  
                                  
                                  
                                  Pro
      Forma
                                    ConsolidatedASSETSCash
                                  
                                  $
                                  786,416
                                  
                                  
                                  $
                                  576,336
                                  
                                  
                                  $
                                  27,500,000
                                  
                                  
                                  (1
                                  )
                                  
                                  $
                                  9,191,144(1,375,000
                                  )
                                  
                                  (1
                                  )(17,720,272
                                  )
                                  
                                  (2
                                  )576,336
                                  
                                  
                                  (3
                                  )Restricted
      cash
                                  
                                  
                                  --
                                  
                                  
                                  
                                  --
                                  
                                  
                                  
                                  1,375,000
                                  
                                  
                                  (1
                                  )
                                  
                                  
                                  1,375,000Accounts
      receivable, net
                                  
                                  
                                  4,154,993
                                  
                                  
                                  
                                  3,019,978
                                  
                                  
                                  
                                  --
                                  
                                  
                                  
                                  
                                  
                                  
                                  1,135,015Product
      inventory
                                  
                                  
                                  1,754,268
                                  
                                  
                                  
                                  430,520
                                  
                                  
                                  
                                  --
                                  
                                  
                                  
                                  
                                  
                                  
                                  1,323,748Deferred
      tax asset
                                  
                                  
                                  5,300,000
                                  
                                  
                                  
                                  --
                                  
                                  
                                  
                                  --
                                  
                                  
                                  
                                  
                                  
                                  
                                  5,300,000Other
      current assets
                                  
                                  
                                  1,109,819
                                  
                                  
                                  
                                  818,448
                                  
                                  
                                  
                                  --
                                  
                                  
                                  
                                  
                                  
                                  
                                  291,371Total
      current assets
                                  
                                  
                                  13,105,496
                                  
                                  
                                  
                                  4,845,282
                                  
                                  
                                  
                                  10,356,064
                                  
                                  
                                  
                                  
                                  
                                  
                                  18,616,278Property,
      plant and equipment
                                  
                                  
                                  6,950,855
                                  
                                  
                                  
                                  6,399,172
                                  
                                  
                                  
                                  --
                                  
                                  
                                  
                                  
                                  
                                  
                                  551,683Other
      assets
                                  
                                  
                                  3,551,138
                                  
                                  
                                  
                                  167,608
                                  
                                  
                                  
                                  --
                                  
                                  
                                  
                                  
                                  
                                  
                                  3,383,530Total
      assets
                                  
                                  $
                                  23,607,489
                                  
                                  
                                  $
                                  11,412,062
                                  
                                  
                                  $
                                  10,356,064
                                  
                                  
                                  
                                  
                                  
                                  $
                                  22,551,491LIABILITIES
      AND STOCKHOLDERS’ DEFICITNotes
      payable, current
                                  
                                  $
                                  10,073,065
                                  
                                  
                                  $
                                  426,314
                                  
                                  
                                  $
                                  359,927
                                  
                                  
                                  (4
                                  )
                                  
                                  $
                                  306,678(9,500,000
                                  )
                                  
                                  (5),(6
                                  )(200,000
                                  )
                                  
                                  (7
                                  )Notes
      payable, line of credit
                                  
                                  
                                  3,300,221
                                  
                                  
                                  
                                  --
                                  
                                  
                                  
                                  (3,300,221
                                  )
                                  
                                  (5
                                  )
                                  
                                  
                                  --Obligations
      under capital leases, current
                                  
                                  
                                  382,368
                                  
                                  
                                  
                                  382,368
                                  
                                  
                                  
                                  
                                  
                                  
                                  (6
                                  )
                                  
                                  
                                  --Notes
      payable, related party, current
                                  
                                  
                                  534,320
                                  
                                  
                                  
                                  --
                                  
                                  
                                  
                                  (534,320
                                  )
                                  
                                  (7
                                  )
                                  
                                  
                                  --Accounts
      payable
                                  
                                  
                                  2,432,024
                                  
                                  
                                  
                                  1,649,532
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  782,492Income
      taxes payable
                                  
                                  
                                  --
                                  
                                  
                                  
                                  --
                                  
                                  
                                  
                                  1,500,000
                                  
                                  
                                  (9
                                  )
                                  
                                  
                                  1,500,000Accrued
      expenses and other liabilities
                                  
                                  
                                  2,486,742
                                  
                                  
                                  
                                  1,047,005
                                  
                                  
                                  
                                  (113,574
                                  )
                                  
                                  (7
                                  )
                                  
                                  
                                  1,326,163Total
      current liabilities
                                  
                                  
                                  19,208,740
                                  
                                  
                                  
                                  3,505,219
                                  
                                  
                                  
                                  (11,788,188
                                  )
                                  
                                  
                                  
                                  
                                  
                                  3,915,333Notes
      payable, non-current
                                  
                                  
                                  2,023,031
                                  
                                  
                                  
                                  1,540,150
                                  
                                  
                                  
                                  --
                                  
                                  
                                  (6
                                  )
                                  
                                  
                                  482,881Obligations
      under capital leases, non-current
                                  
                                  
                                  1,623,325
                                  
                                  
                                  
                                  1,623,325
                                  
                                  
                                  
                                  
                                  
                                  
                                  (6
                                  )
                                  
                                  
                                  --Other
      liabilities, non-current
                                  
                                  
                                  814,323
                                  
                                  
                                  
                                  233,783
                                  
                                  
                                  
                                  --
                                  
                                  
                                  
                                  
                                  
                                  
                                  580,540Total
      liabilities
                                  
                                  
                                  23,669,419
                                  
                                  
                                  
                                  6,902,477
                                  
                                  
                                  
                                  (11,788,188
                                  )
                                  
                                  
                                  
                                  
                                  
                                  4,978,754Preferred
      stock
                                  
                                  
                                  --
                                  
                                  
                                  
                                  --
                                  
                                  
                                  
                                  --
                                  
                                  
                                  
                                  
                                  
                                  
                                  --Common
      stock
                                  
                                  
                                  308,804
                                  
                                  
                                  
                                  --
                                  
                                  
                                  
                                  --
                                  
                                  
                                  
                                  
                                  
                                  
                                  308,804Additional
      paid in capital
                                  
                                  
                                  38,881,669
                                  
                                  
                                  
                                  --
                                  
                                  
                                  
                                  --
                                  
                                  
                                  
                                  
                                  
                                  
                                  38,881,669Accumulated
      deficit
                                  
                                  
                                  (39,252,403
                                  )
                                  
                                  
                                  4,509,585
                                  
                                  
                                  
                                  (359,927
                                  )
                                  
                                  (4
                                  )
                                  
                                  
                                  (21,617,736
                                  )(100,000
                                  )
                                  
                                  (8
                                  )
                                  
                                  
                                  ----
                                  
                                  
                                  
                                  --
                                  
                                  
                                  
                                  (1,500,000
                                  )
                                  
                                  (9
                                  )
                                  
                                  
                                  ----
                                  
                                  
                                  
                                  --
                                  
                                  
                                  
                                  24,104,179
                                  
                                  
                                  (10
                                  )
                                  
                                  
                                  --Total
      stockholders’ equity (deficit)
                                  
                                  
                                  (61,930
                                  )
                                  
                                  
                                  4,509,585
                                  
                                  
                                  
                                  22,144,252
                                  
                                  
                                  
                                  
                                  
                                  
                                  17,572,737Total
      liabilities and stockholders’ equity (deficit)
                                  
                                  $
                                  23,607,489
                                  
                                  
                                  $
                                  11,412,062
                                  
                                  
                                  $
                                  10,356,064
                                  
                                  
                                  
                                  
                                  
                                  $
                                  22,551,491
 
 I.       Adjustments
to pro forma consolidated balance sheet
  (a)         GreenMan
Technologies, Inc. Historical Consolidated
  Represents
the historical unaudited consolidated balance sheet as of September 30, 2008 as
reported in the Company’s Form 10-KSB for the fiscal year ended September
30, 2008.
 
 (b)         Tire
Recycling Business
  Represents
the elimination of the Tire Recycling Business’ assets and liabilities, as
reflected in the historical consolidated balance sheet of the Company as of
September 30, 2008.
 
  47
  GreenMan
Technologies, Inc.
 Notes
To Consolidated Financial Statements
  15.
                Subsequent
      Event – (Continued)
  The
Tire Recycling Business’ historical financial position is included within the
Company’s Consolidated Financial statements for financial reporting
purposes.  In addition the Laurus credit facility (revolving debt and
secured term debt) has been transacted through the corporate accounts of the
Company and therefore have not historically been reflected in the Tire Recycling
Business.
 
 (c)         Unaudited
Pro Forma Adjustments
  1) At
the close of the transaction, the Company will receive proceeds of $27.5 million
of which $1.375 million will be placed in a separate account to cover
possible indemnification claims that may arise from this
transaction.
 2) Represents
the pay down of all amounts due by the Company to Laurus, certain Tire Recycling
Business debt other Company indebtedness and transaction costs, as further
described below.
 3) The
Company will retain the Tire Recycling Business’ cash balances at
closing.
 4) This
amount reflects the write off of $359,927 of deferred financing costs as a
result of the repayment of all amounts due Laurus.
 5) Approximately
$12.8 million of the cash proceeds will be used to pay off all amounts due
Laurus by the Company at closing including the portion which was allocated to
the Tire Recycling Business based on the percentage of total Tire Recycling
Business assets to total assets.
 6) Approximately
$4.0 million of the cash proceeds will be used to extinguish certain Tire
Recycling Business notes payable and capital leases at closing.
 7) Approximately
$.85 million of the cash proceeds will be used to pay certain notes payable
and accrued interest due related parties and others at closing.
 8) Approximately
$.1 million of the cash proceeds will be used to pay transaction costs
associated with legal services.
 9) Estimated
state and federal income tax expense associated with sale of the Tire Recycling
Business.
 10) Estimated
gain on sale of the Tire Recycling Business before state and federal income
taxes.
 
 GreenMan
Technologies, Inc.
 Pro
Forma Unaudited Consolidated Statement of Operations
 Fiscal
Year Ended September 30, 2008
 
 GreenMan
                        Historical
                        Consolidated
                      
                      
                      Tire
      Recycling
                        Businesses
                      
                      
                      Pro
      Forma
                        Adjustments
                      
                      
                      Pro
      Forma
                        ConsolidatedNet
      sales
                      
                      $
                      26,748,773
                      
                      
                      $
                      23,283,359
                      
                      
                      $
                      --
                      
                      
                      $
                      3,465,414Cost
      of sales
                      
                      
                      18,804,617
                      
                      
                      
                      16,308,904
                      
                      
                      
                      --
                      
                      
                      
                      2,495,713Gross
      profit
                      
                      
                      7,944,156
                      
                      
                      
                      6,974,455
                      
                      
                      
                      --
                      
                      
                      
                      969,701Operating
      expenses:Selling,
      general and administrative
                      
                      
                      5,606,684
                      
                      
                      
                      2,262,369
                      
                      
                      
                      --
                      
                      
                      
                      3,344,315Operating
      income from continuing operations
                      
                      
                      2,337,472
                      
                      
                      
                      4,712,086
                      
                      
                      
                      --
                      
                      
                      
                      (2,374,614
                      )Other
      income (expense):Interest
      and financing costs
                      
                      
                      (1,999,528
                      )
                      
                      
                      (538,139
                      )
                      
                      
                      1,313,327
                      (1)
                      
                      
                      (148,062
                      )Other,
      net
                      
                      
                      (139,750
                      )
                      
                      
                      85,236
                      
                      
                      
                      --
                      
                      
                      
                      (224,986
                      )Other
      expense, net
                      
                      
                      (2,139,278
                      )
                      
                      
                      (452,903
                      )
                      
                      
                      1,313,327
                      
                      
                      
                      (373,048
                      )Income
      (loss) from continuing operations before income taxes
                      
                      
                      198,194
                      
                      
                      
                      4,259,183
                      
                      
                      
                      1,313,327
                      
                      
                      
                      (2,747,662
                      )Benefit
      (provision) for income taxes
                      
                      
                      5,332,561
                      
                      
                      
                      32,561
                      
                      
                      
                      --
                      
                      
                      
                      5,300,000Income
      (loss) from continuing operations
                      
                      
                      5,530,755
                      
                      
                      
                      4,291,744
                      
                      
                      
                      1,313,327
                      
                      
                      
                      2,552,338Discontinued
      operations:Income
      from discontinued operations
                      
                      
                      2,360,930
                      
                      
                      
                      --
                      
                      
                      
                      --
                      
                      
                      
                      2,360,930Net
      income
                      
                      $
                      7,891,685
                      
                      
                      $
                      4,291,744
                      
                      
                      $
                      1,313,327
                      
                      
                      $
                      4,913,268Income
      from continuing operations per share –basic
                      
                      $
                      0.18
                      
                      
                      $
                      0.14
                      
                      
                      $
                      0.04
                      
                      
                      $
                      0.08Income
      from discontinued operations per share –basic
                      
                      
                      0.08
                      
                      
                      
                      --
                      
                      
                      
                      --
                      
                      
                      
                      0.08Net
      Income per share – basic
                      
                      $
                      0.26
                      
                      
                      $
                      0.14
                      
                      
                      $
                      0.04
                      
                      
                      $
                      0.16Net
      Income per share – diluted
                      
                      $
                      0.22
                      
                      
                      $
                      0.12
                      
                      
                      $
                      0.04
                      
                      
                      $
                      0.14Weighted
      average shares outstanding -- basic
                      
                      
                      30,880,435
                      
                      
                      
                      30,880,435
                      
                      
                      
                      30,880,435
                      
                      
                      
                      30,880,435Weighted
      average shares outstanding -- diluted
                      
                      
                      35,546,787
                      
                      
                      
                      35,546,787
                      
                      
                      
                      35,546,787
                      
                      
                      
                      35,546,787
 
  48
  GreenMan
Technologies, Inc.
 Notes
To Consolidated Financial Statements
  15.
                Subsequent
      Event – (Continued)
 
 GreenMan
Technologies, Inc.
 Pro
Forma Unaudited Consolidated Statement of Operations
 Fiscal
Year Ended September 30, 2007
 
 GreenMan
                        Historical
                        Consolidated
                      
                      
                      Tire
      RecyclingBusinesses
                      
                      
                      Pro
      Forma
                        Adjustments
                      
                      
                      Pro
      Forma
                        ConsolidatedNet
      sales
                      
                      $
                      20,178,726
                      
                      
                      $
                      20,178,726
                      
                      
                      $
                      --
                      
                      
                      $
                      --Cost
      of sales
                      
                      
                      14,222,158
                      
                      
                      
                      14,222,158
                      
                      
                      
                      --
                      
                      
                      
                      --Gross
      profit
                      
                      
                      5,956,568
                      
                      
                      
                      5,956,568
                      
                      
                      
                      --
                      
                      
                      
                      --Operating
      expenses:Selling,
      general and administrative
                      
                      
                      3,847,726
                      
                      
                      
                      2,262,925
                      
                      
                      
                      --
                      
                      
                      
                      1,584,801Operating
      income from continuing operations
                      
                      
                      2,108,842
                      
                      
                      
                      3,693,643
                      
                      
                      
                      --
                      
                      
                      
                      (1,584,801
                      )Other
      income (expense):Interest
      and financing costs
                      
                      
                      (2,006,299
                      )
                      
                      
                      (467,526
                      )
                      
                      
                      1,538,773
                      (1)
                      
                      
                      --Other,
      net
                      
                      
                      9,954
                      
                      
                      
                      37,284
                      
                      
                      
                      --
                      
                      
                      
                      (27,330
                      )Other
      expense, net
                      
                      
                      (1,996,345
                      )
                      
                      
                      (430,242
                      )
                      
                      
                      1,538,773
                      
                      
                      
                      (27,330
                      )Income
      (loss) from continuing operations before income taxes
                      
                      
                      112,497
                      
                      
                      
                      3,263,401
                      
                      
                      
                      1,538,773
                      
                      
                      
                      (1,612,131
                      )Provision
      for income taxes
                      
                      
                      115,799
                      
                      
                      
                      95,735
                      
                      
                      
                      --
                      
                      
                      
                      20,064Income
      (loss) from continuing operations
                      
                      
                      (3,302
                      )
                      
                      
                      3,167,666
                      
                      
                      
                      1,538,773
                      
                      
                      
                      (1,632,195
                      )Discontinued
      operations:Income
      from discontinued operations
                      
                      
                      297,196
                      
                      
                      
                      --
                      
                      
                      
                      --
                      
                      
                      
                      297,196Net
      income (loss)
                      
                      $
                      293,894
                      
                      
                      $
                      3,167,666
                      
                      
                      $
                      1,538,773
                      
                      
                      $
                      (1,334,999
                      )Income
      (loss) from continuing operations per share –basic
                      
                      $
                      --
                      
                      
                      $
                      0.15
                      
                      
                      $
                      0.07
                      
                      
                      $
                      (0.07
                      )Income
      from discontinued operations per share –basic
                      
                      
                      0.01
                      
                      
                      
                      --
                      
                      
                      
                      --
                      
                      
                      
                      0.01Net
      Income (loss) per share –basic
                      
                      $
                      0.01
                      
                      
                      $
                      0.15
                      
                      
                      $
                      0.07
                      
                      
                      $
                      (0.06
                      )Net
      Income (loss) per share –diluted
                      
                      $
                      0.01
                      
                      
                      $
                      0.12
                      
                      
                      $
                      0.06
                      
                      
                      $
                      (0.05
                      )Weighted
      average shares outstanding -basic
                      
                      
                      21,766,013
                      
                      
                      
                      21,766,013
                      
                      
                      
                      21,766,013
                      
                      
                      
                      21,766,013Weighted
      average shares outstanding -diluted
                      
                      
                      26,456,510
                      
                      
                      
                      26,456,510
                      
                      
                      
                      26,456,510
                      
                      
                      
                      26,456,510
 
 II.         Adjustments
to pro forma consolidated statements of operations
 
 a)        GreenMan
Technologies, Inc. Historical Consolidated
  Represents
the historical consolidated statement of operations for the fiscal years ended
September 30, 2008 and 2007 as reported in the Company’s Form 10-KSB for
the fiscal years ended September 30, 2008.
 
 b)        Tire
Recycling Business
  Represents
the elimination of Tire Recycling Business’ revenues and expenses as reflected
in the historical consolidated statement of operations of the Company for the
fiscal years ended September 30, 2008 and 2007.
 
 c)        Pro
forma adjustments
  Represents
adjustment to reflect interest and loan amortization expense after the payment
of approximately $12.8 million of the Company’s senior debt due Laurus,
approximately $3.7 million of a Tire Recycling Business notes payable and
capitalized leases and approximately $.85 million of related party and other
notes payable for the periods presented as if the pending transaction had
occurred on October 1, 2006.
 
  49
  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 JensenLyle
      JensenChief
      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.
 
 Signature
                  Title(s)
                  Date/s/ Maurice E. Needham
                  Chairman
      of the Board
                  January
      16, 2009Maurice
      E. Needham/s/ Lyle Jensen
                  Chief
      Executive Officer, President
                  January
      16, 2009Lyle
      Jensen
                  and
      Director/s/ Charles E. Coppa
                  Chief
      Financial Officer,Charles E.
      Coppa
                  Treasurer
      and Secretary
                    (Principal
      Financial Officer and Principal
                    Accounting
      Officer)
                  January
      16, 2009/s/ Lew F. Boyd
                  Director
                  January
      16, 2009Lew
      F. Boyd/s/ Dr. Allen Kahn
                  Director
                  January
      16, 2009Dr.
      Allen Kahn/s/ Nicholas DeBenedictis
                  Director
                  January
      16, 2009Nicholas
      DeBenedictis
 
  50