Edgar Filing: GREENMAN TECHNOLOGIES INC

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 26, 2005

Registration No. 333-117819
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM SB-2
AMENDMENT NO. 2 TO
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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GREENMAN TECHNOLOGIES, INC.
(Name of Small Business Issuer in its Charter)

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DELAWARE 3089 71-0724248
(State or Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)

7 Kimball Lane
Building A
Lynnfield, MA 01940
(781) 224-2411

(Address and Telephone Number of Principal Executive Offices)

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Charles E. Coppa
Chief Financial Officer
GreenMan Technologies, Inc.
7 Kimball Lane
Building A
Lynnfield, MA 01940
(781) 224-2411

(Name, Address and Telephone Number of Agent for Service)

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Copies to:

Carl F. Barnes, Esq.
Morse, Barnes-Brown & Pendleton, P.C.
Reservoir Place
Waltham, MA 02451
(781) 622-5930

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Approximate Date of Proposed Sale to the Public: From time to time after
the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box. |X|

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_| ______________

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_| ______________

If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_| ______________

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box |_|.

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CALCULATION OF REGISTRATION FEE

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Title of Each Proposed Proposed
Class of Amount Maximum Maximum
Securities to be to be Offering Price Aggregate Amount of
Registered Registered (1) per Share (2) Offering Price (2) Registration Fee

Common Stock 4,724,565 Shares (3) $1.235 $5,834,837.78 $739.28(4)
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(1) In accordance with Rule 416 under the Securities Act of 1933, this
registration statement also covers any additional shares of common stock
that shall become issuable by reason of any stock dividend, stock split,
recapitalization or other similar transaction effected without the receipt
of consideration that results in an increase in the number of the
outstanding shares of common stock.

(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933. For purposes of
this table, we have used the average of the high and low prices of the
registrant's common stock on July 27, 2004, on the American Stock
Exchange.

(3) To be offered by selling stockholders. Includes 369,331 shares currently
held by selling stockholders, 553,997 shares of common stock issuable upon
exercise of warrants held by selling stockholders, 2,926,528 shares of
common stock issuable upon conversion of the principal of, and interest
accrued on, a secured convertible term note held by a selling stockholder,
and 874,709 shares of common stock issuable upon conversion of the
principal of, and interest accrued on, a secured convertible minimum
borrowing note held by a selling stockholder.

(4) Previously paid.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING STOCKHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND THE SELLING STOCKHOLDERS
ARE NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER
OR SALE IS NOT PERMITTED.

PRELIMINARY PROSPECTUS
SUBJECT TO COMPLETION, DATED JANUARY 26, 2005

GREENMAN TECHNOLOGIES, INC.

4,724,565 Shares of Common Stock

This prospectus relates to the sale of up to 4,724,565 shares of our
common stock by some of our stockholders. For a list of the selling
stockholders, please see "Selling Stockholders." We are not selling any shares
of common stock in this offering and therefore will not receive any proceeds
from this offering. We may, however, receive proceeds upon the exercise of the
warrants registered for sale hereunder in the event that such warrants are
exercised. All costs associated with this registration will be borne by us.

These shares may be sold by the selling stockholders from time to time on
the American Stock Exchange or on any other national securities exchange or
automated interdealer quotation system on which our common stock is then listed
or quoted, through negotiated transactions or otherwise at market prices
prevailing at the time of sale or at negotiated prices.

Our common stock currently trades on the American Stock Exchange under the
symbol "GRN." On January 20, 2005, the last reported sale price of our common
stock was $1.31 per share.

INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISKS. PLEASE
REFER TO THE "RISK FACTORS" BEGINNING ON PAGE 3.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES, OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

THE DATE OF THIS PROSPECTUS IS _____________, 2005.

TABLE OF CONTENTS

Prospectus Summary........................................................ 1

Risk Factors.............................................................. 3

Cautionary Statement Concerning Forward Looking Statements................ 8

Use of Proceeds........................................................... 8

Market for Common Equity and Related Stockholder Matters.................. 9

Management's Discussion and Analysis of Financial Condition
and Results of Operations.............................................. 10

Business.................................................................. 19

Management................................................................ 23

Executive Compensation.................................................... 24

Certain Relationships and Related Transactions............................ 27

Principal Stockholders.................................................... 31

Selling Stockholders...................................................... 33

Plan of Distribution...................................................... 34

Description of Securities................................................. 36

Commission Position on Indemnification for Securities Act Liabilities..... 38

Legal Matters............................................................. 38

Where You Can Find More Information....................................... 38

Financial Statements...................................................... F-1

-i-

PROSPECTUS SUMMARY

This summary highlights selected information from this prospectus and may
not contain all of the information that is important to an investor. We
encourage you to read this entire prospectus, including our consolidated
financial statements and the notes to our consolidated financial statements
completely and carefully before deciding whether to invest in our common stock.
You should also review the other available information referred to in the
section entitled "Where You Can Find More Information" on page 38.

Summary of our Business

GreenMan Technologies, Inc. (together with its subsidiaries "we", "us" or
"our") was originally founded in 1992 has been operated as a Delaware
corporation since 1995. Today, we comprise six operating locations that collect,
process and market scrap tires in whole, shredded or granular form. We are
headquartered in Lynnfield, Massachusetts and currently operate tire processing
operations in California, Georgia, Iowa, Minnesota, Tennessee and Wisconsin and
operate under exclusive agreements to supply whole tires used as alternative
fuel to cement kilns located in Alabama, Florida, Georgia, Illinois, Missouri,
Tennessee and Texas.

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

We collect scrap tires from three sources:

o local, regional and national tire stores;

o tire manufacturing plants; and

o illegal tire piles being cleaned-up by state, county and local
governmental entities;

The tires we collect are processed and sold ("end product" revenue):

o as tire-derived fuel used in lieu of coal by pulp and paper
producers, cement kilns and electric utilities;

o as an effective substitute for crushed stone in civil engineering
applications such as road beds, landfill construction or septic
field construction; or

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

In some states where we have disposal contracts with cement kilns, our
whole tire operations are paid a fee by existing tire collectors to dispose of
whole tires at our location. We pay the cement kilns a fee to accept the whole
tires which they then use as an alternative fuel source to coal, while also
providing a source of iron oxide which is required in the cement making process.

Our executive offices are located at 7 Kimball Lane, Building A,
Lynnfield, Massachusetts 01940. Our telephone number is (781) 224-2411.

The Offering

Securities Offered by
Selling Stockholders.............. 4,724,565 shares of common stock, including
369,331 shares currently held by selling
stockholders, 553,997 shares of common stock
issuable upon exercise of warrants held by
selling stockholders, 2,926,528 shares of
common stock issuable upon conversion of the
principal of, and interest accrued on, a
secured convertible term note held by a
selling stockholder, and 874,709 shares of
common stock issuable upon conversion of the
principal of, and interest accrued on, a
secured convertible minimum borrowing note
held by a selling stockholder.

Offering Price.................... Determined at the time of sale by the
selling stockholders.

Use of Proceeds................... We will not receive any proceeds from the
sale of the shares of common stock by the
selling stockholders. We intend to use the
proceeds from the exercise of outstanding
warrants, if any, for general corporate
purposes.

Shares of Common Stock
outstanding before the offering... 19,200,352 shares.

Risk Factors...................... An investment in the Company involves
significant risks and uncertainties. See
"Risk Factors, beginning on page 3.

RISK FACTORS

An investment in our common stock involves a high degree of risk. You
should carefully consider the risks described below before deciding to purchase
shares of our common stock. If any of the events, contingencies, circumstances
or conditions described in the risks below actually occur, our business,
financial condition or results of operations could be seriously harmed. The
trading price of our common stock could, in turn, decline and you could lose all
or part of your investment.

Risks Related to our Business

We have lost money in the past eight consecutive quarters and may need
additional working capital, which if not received, may force us to curtail
operations.

We have experienced eight consecutive quarters of net losses. While
management has identified several significant non-recurring charges which have
contributed to these losses, the continued, successful sales and marketing of
our services and products, the introduction of new products and the
re-establishment of profitable operations will be critical to our future
liquidity. If we are unable to return to profitability before our cash is
depleted, we will need to seek additional capital. There can be no assurance
that we will be profitable in the future or, if we are not, that we will be able
to obtain additional capital on terms and conditions acceptable to us or at all.

We have substantial indebtedness to Laurus Master Fund secured by substantially
all of our assets. If an event of default occurs under the secured notes issued
to Laurus, Laurus may foreclose on our assets and we may be forced to curtail
our operations or sell some of our assets to repay the notes.

On June 30, 2004, we entered into a $9 million credit facility with Laurus
pursuant to secured promissory notes and related agreements. Subject to certain
grace periods, the notes and agreements provide for the following events of
default (among others):

o failure to pay interest and principal when due;

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

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

o any money judgment or similar final process is filed against us for
more than $50,000;

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

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

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

We may require additional funding to sustain and 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 may 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 may 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 will also need funding to
pursue acquisitions. We cannot assure you that outside funding will be available
to us at the time that we need it and in the amount necessary to satisfy our
needs, or, that if such funds are available, they will be available on terms
that are favorable to us. If we are unable to secure financing when we need it,
our business may be adversely affected. 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 may 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.

In March 2003, a portion of our Georgia facility and several pieces of equipment
were damaged by fire; as a result we have experienced increased disposal costs
and reduced product revenue in Georgia.

On March 31, 2003, a portion of our Georgia facility and several pieces of
waste wire processing equipment were damaged by a fire, which resulted in
increased disposal costs and reduced product revenue in Georgia. These
conditions continued into November 2004, when the re-installation was completed
and the machinery was returned to operative status.

We may not realize the anticipated benefits associated with the establishment of
our Tennessee operations.

In February 2003, as a result of experiencing significant market share
growth during the last two years, we announced our intent to open a new
high-volume tire processing facility in LaVergne, Tennessee. Historically, we
have transported all Tennessee-sourced tires to our Georgia facility for
processing. In July 2003, we began processing tires on a limited basis in
Tennessee utilizing excess and idle equipment from various GreenMan
subsidiaries. Until we are successful in purchasing the appropriate high-volume
shredding and ancillary equipment for our Tennessee facility, we will continue
to incur excess transportation costs necessitated by transporting
Tennessee-sourced tires to Georgia instead of processing them locally. We
initially allocated approximately $1 million of proceeds from the Laurus credit
facility to purchase equipment necessary for our Tennessee facility. In August
2004, we used $350,000 of the proceeds as a "good faith" deposit with a third
party towards the acquisition of certain processing equipment that would be
required in Tennessee. In December 2004, we executed a letter of intent with the
same third party to lease certain pieces of tire processing equipment that will
be used in Tennessee and agreed to apply the $350,000 to preparation and moving
of the equipment to be leased. Due to delays in identifying the appropriate
remaining equipment for Tennessee, we reallocated approximately $650,000 of the
proceeds to be used to re-establish our Georgia waste wire processing equipment
line in November 2004 as well as to support the limited Tennessee operation
during this period. We are currently evaluating several alternatives which will
allow us to commence operations in Tennessee during the second quarter of fiscal
2005. When the Tennessee facility is fully operational, we estimate the cost
savings realized by processing Tennessee-sourced tires locally instead of
transporting them to Georgia should exceed $80,000 per month. No assurance can
be given, however, that we will be able to open this facility in a timely
manner.

We may not realize the anticipated benefits associated with the reconfiguration
of our Wisconsin operations.

In February 2003, we decided to reconfigure the operations of our
low-volume Wisconsin size reduction facility to a whole tire transfer station
supplying compliant tires to a cement kiln. The cement kiln consumes a majority
of the scrap tires collected by the Wisconsin facility. The reconfiguration was
completed during the first quarter of fiscal 2004. We do not have a long-term
supply contract with the cement kiln, however, and there can be no assurance
that we will realize the anticipated benefits associated with the
reconfiguration of these operations.

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

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

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

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

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

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

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

Our success depends largely on the skills, experience and performance of
our senior management, particularly, Robert H. Davis, our Chief Executive
Officer; Charles E. Coppa, our Chief Financial Officer; Mark T. Maust, our
Midwest Regional Vice President; Thomas A. Carter, our Southeastern Regional
Vice President; and James C. Dodenhoff, our California Vice President. The loss
of any of these personnel could have a material adverse effect on our business,
financial condition and results of operations.

Seasonal factors may affect our quarterly operating results.

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

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 are adversely affected by significant increases in the cost
of fuel. Additionally, because we rely on floating-rate debt for certain
financing arrangements, rising interest rates would have a negative effect on
our financial performance.

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

A significant part of our business strategy entails future acquisitions,
or significant investments in, businesses that offer complementary products and
services. Promising acquisitions are difficult to identify and complete for a
number of reasons. Any acquisitions completed by our company may be made at

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

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

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

Risks Related to the Securities Market

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

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

o changes in market valuations of similar companies;

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

o regulatory developments;

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

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

o future issuances of our common stock or other securities.

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

As of December 31, 2004, we have options and warrants to purchase
6,986,359 shares of common stock outstanding in addition to approximately
$5,875,000 of convertible promissory notes. The principal amounts of these notes
are convertible into approximately 4,627,000 shares of common stock. The
exercise of our options and warrants, and the conversion of these promissory
notes, will cause additional shares of common stock to be issued, resulting in
dilution to investors and our existing stockholders. Prior to the effective date
of this registration statement, approximately 11,000,000 shares of our common
stock were eligible for sale in the public market. This represents approximately
58 percent of our outstanding shares of common stock. After the effective date

of this registration statement, approximately 15,725,000 shares of our common
stock will be eligible for resale in the public market. Sales of a significant
number of shares of our common stock in the public market could result in a
decline in the market price of our common stock, particularly in light of the
illiquidity and low trading volume in our common stock.

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

Our directors, executive officers and other principal stockholders owned
approximately 39 percent of our outstanding common stock as of December 31,
2004. Accordingly, these stockholders could have a significant influence over
the outcome of any corporate transaction or other matter submitted to our
stockholders for approval, including mergers, consolidations and the sale of all
or substantially all of our assets and also could prevent or cause a change in
control. The interests of these stockholders may differ from the interests of
our other stockholders. In addition, limited number of shares held in public
float effect the liquidity of our common stock. Third parties may be discouraged
from making a tender offer or bid to acquire us because of this concentration of
ownership.

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

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

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

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

CAUTIONARY STATEMENT CONCERNING
FORWARD-LOOKING STATEMENTS

This document contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements are
subject to risks and uncertainties and are based on the beliefs and assumptions
of management and information currently available to management. The use of
words such as "believes," "expects," "anticipates," "intends," "plans,"
"estimates," "should," "likely" or similar expressions, indicates a
forward-looking statement.

Forward-looking statements are not guarantees of performance. They involve
risks, uncertainties and assumptions. Future results may differ materially from
those expressed in the forward-looking statements. Many of the factors that will
determine these results are beyond the ability of GreenMan Technologies to
control or predict. Stockholders are cautioned not to put undue reliance on any
forward-looking statements, which speak only to the date made. For those
statements, GreenMan Technologies claims the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995.

For a discussion of some of the factors that may cause actual results to
differ materially from those suggested by the forward-looking statements, please
read carefully the information under "Risk Factors" beginning on page 3.

The identification in this document of factors that may affect future
performance and the accuracy of forward-looking statements is meant to be
illustrative and by no means exhaustive. All forward-looking statements should
be evaluated with the understanding of their inherent uncertainty.

You may rely only on the information contained in this prospectus. We have
not authorized anyone to provide information different from that contained in
this prospectus. Neither the delivery of this prospectus nor the sale of common
stock means that information contained in this prospectus is correct after the
date of this prospectus. This prospectus is not an offer to sell or solicitation
of an offer to buy these securities in any circumstances under which the offer
or solicitation is unlawful.

USE OF PROCEEDS

There will be no proceeds to the Company from the sale of shares of common
stock in this offering. However, the Company may receive up to approximately
$591,000 upon exercise of the outstanding warrants covered by this prospectus
(assuming that no warrant holder acquires shares by a "cashless" exercise). We
intend to use any proceeds from the exercise of warrants for general corporate
purposes.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

Our common stock began trading on the American Stock Exchange on September
20, 2002 under the symbol of "GRN." Prior to that time, our common stock had
traded on the Over the Counter 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 on the American Stock Exchange.

Common Stock
---------------------
High Low
---- ---
Fiscal 2003
-----------
Quarter Ended December 31, 2002............. $2.40 $1.90
Quarter Ended March 31, 2003................ 2.15 1.86
Quarter Ended June 30, 2003................ 1.92 1.31
Quarter Ended September 30, 2003............ 1.92 1.57

Fiscal 2004
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Quarter Ended December 31, 2003............. $1.80 $1.25
Quarter Ended March 31, 2004................ 1.60 1.07
Quarter Ended June 30, 2004................ 1.40 1.01
Quarter Ending September 30, 2004........... 1.54 1.14

Fiscal 2005
-----------
Quarter Ended December 31, 2004............. $1.57 $1.11
Quarter Ended March 31, 2005
(through January 20, 2005................... 1.55 1.25

On January 20, 2005, the closing price of our common stock was $1.31 per
share.

As of December 31, 2004, we estimate the approximate number of
stockholders of record of our common stock to be 2,600. This number excludes
individual stockholders holding stock under nominee security position listings.

Dividends

We have not paid any cash dividends on our common stock and do not
anticipate declaring or paying any cash dividends in the foreseeable future. In
addition, our agreements with Laurus prohibit the payment of cash dividends.
Nonetheless, the holders of our common stock are entitled to dividends when and
if declared by our board of directors from legally available funds.

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

Fiscal Year ended September 30, 2004 Compared to Fiscal Year ended
September 30, 2003

Net sales for the fiscal year ended September 30, 2004 were $30,777,182, a
4% increase, compared to last year's net sales of $29,679,992, which included
approximately $1,357,000 of net sales associated with our majority owned joint
venture which was divested on April 1, 2003 and two kiln relationships
terminated during fiscal 2003. We processed approximately 30.6 million passenger
tire equivalents during the fiscal year ended September 30, 2004, compared to
approximately 28.6 million passenger tire equivalents during the fiscal year
ended September 30, 2003.

Overall end product sales increased approximately $963,000 to $8,540,000
during the fiscal year ended September 30, 2004, compared to $7,577,000 for the
same period last year, despite our Georgia waste wire processing equipment being
off-line since April 2003. The 13% increase in end product sales is attributable
to implementation of our waste wire processing equipment in the Midwest during
the second half of fiscal 2003 and stronger crumb rubber and tire-derived fuel
sales during the fiscal year ended September 30, 2004. The overall quality of
revenue (revenue per passenger tire equivalent) benefited from increased tire
volumes and end product sales, which partially offset a 6.2% reduction in
tipping fees per passenger tire equivalent resulting from lower tipping fees in
certain markets.

Gross profit for the fiscal year ended September 30, 2004 was $3,716,536
or 12% of net sales, compared to $3,977,981 or 13% of net sales for year ended
September 30, 2003. The gross profit for the year ended September 30, 2004
reflects the fact that we continue to absorb an estimated $2,000,000 of excess
transportation and disposal costs and reduced end product revenue resulting from
the delayed implementation of our Tennessee facility and Georgia waste wire
equipment. The gross profit for the fiscal year ended September 30, 2003
reflects approximately $800,000 of excess transportation costs resulting from
the delayed implementation of our Tennessee facility and approximately $500,000
of excess disposal costs and reduced end product revenue, net of business
interruption insurance reimbursement as a result of the Georgia waste wire
equipment fire in March 2003. The results for fiscal 2003 also include (1)
approximately $400,000 of operating inefficiencies associated with the
transition of our Wisconsin operations from a size reduction facility to a whole
tire transfer station which was completed during the first quarter of fiscal
2004; (2) approximately $150,000 relating to costs specifically associated with
operational disruptions and increased transportation costs incurred during the
shredding equipment upgrade at our Iowa subsidiary which was completed in
February 2003; (3) over $125,000 in lost profitability due to boiler problems
experienced at two large tire-derived fuel customers (which were corrected in
June 2003); and (4) approximately $250,000 relating to losses associated with a
kiln relationship terminated on December 31, 2002 and the attempted
commercialization of our roofing shingle project.

Selling, general and administrative expenses for the fiscal year ended
September 30, 2004 decreased $755,007 to $4,679,263 or 15% of net sales,
compared to $5,434,270 or 18% of net sales for the fiscal year ended September
30, 2003. The reduction is due to a focused effort to reduce corporate wide
expenses and the elimination of expenses associated with our majority owned
joint venture which was divested in April 2003.

In February 2003, we decided to reconfigure our Wisconsin operations from
a low-volume size reduction facility to a whole tire transfer station supplying
compliant tires to a cement kiln. The cement kiln continues consuming a majority
of the scrap tires collected by our Wisconsin facility. In addition, in order to
meet increased demand in the Midwest and Southeast for smaller and more
lucrative tire-derived fuel material, several new pieces of shredding and
screening equipment were installed at our Georgia and Minnesota facilities
during the second half of fiscal 2003. As a result of these decisions, we
determined that certain equipment was no longer necessary or that the net book
value of certain identified assets exceeded the estimated fair market value and,
accordingly we recorded a non-cash impairment loss of $261,278 during the fiscal
year ended September 30, 2003. The available equipment has either been utilized
at our other locations or sold.

As a result of the foregoing, our operating loss for the fiscal year ended
September 30, 2004 decreased 44% or $754,840 to $962,727, compared to an
operating loss of $1,717,567 for the fiscal year ended September 30, 2003.

Interest and financing costs for the fiscal year ended September 30, 2004
increased $473,332 to $1,859,416, compared to $1,386,084 for the fiscal year
ended September 30, 2003. The increase was primarily attributable to the
inclusion of approximately $407,000 of deferred financing costs associated with
our fiscal 2004 financing efforts.

In addition to the lost product revenues caused by the March 2003 fire at
our Georgia facility, we also incurred additional direct costs relating to
excess disposal costs totaling approximately $95,000, which were offset by an
insurance recovery of $207,873 received during the fiscal year ended September
30, 2004. During the fiscal year ended September 30, 2004 we also recorded other
income of approximately $90,000 relating to a settlement for damaged product.

As a result of the foregoing, our net loss for the fiscal year ended
September 30, 2004 decreased $247,902 or 9% to $2,644,641 or $.15 per basic
share, compared to a net loss of $2,892,543 or $.18 per basic share for the
fiscal year ended September 30, 2003.

Liquidity and Capital Resources

As of September 30, 2004, we had $509,787 in cash and cash equivalents and
a working capital deficiency of $3,522,130. We understand that the continued,
successful sales and marketing of our services and products, the introduction of
new products, and re-establishing continued profitability from operations will
be critical to our future liquidity.

Our Consolidated Statements of Cash Flows reflect events in 2004 and 2003
as they affect our liquidity. During the fiscal year ended September 30, 2004,
net cash used for operating activities was $1,493,061, which reflects a net loss
of $2,644,641; a $555,420 increase in product inventory as a result of increased
processing capacity and weather related delays in shipping mid-west product; a
$1,015,500 increase in accounts receivable; and increased prepaid expenses and
parts inventories. Positively impacting cash flows for the fiscal year ended
September 30, 2004 was depreciation and amortization of $2,680,114, and the
receipt of $932,045 of insurance proceeds. During the fiscal year ended
September 30, 2003, net cash provided by operating activities was $1,961,768.
Cash flows during this period were positively impacted by depreciation and
amortization of $2,271,830, a $704,100 decrease in accounts receivable and an
increase in accounts payable and accrued expenses of $1,954,914 in the
aggregate.

Net cash used for investing activities was $414,116 for the fiscal year
ended September 30, 2004, reflecting the $1,444,580 of proceeds received from
the sale of our Minnesota real estate which offset the purchase of $1,649,264 of
property and equipment. The net cash used by investing activities for the for
the fiscal year ended September 30, 2003 was $2,522,496, reflecting significant
investments made for the purchase of property and equipment to increase capacity
and efficiencies at several of our operating locations.

Net cash provided by financing activities was $1,426,219 during the fiscal
year ended September 30, 2004 and was positively impacted by the new Laurus
credit facility and the completion of the April 2004 private placement of
investment units which collectively generated approximately $6,833,000 of new
cash flow before expenses. These increases were offset by repayment of notes
payable of $4,726,894, including approximately $3,800,000 associated with the
payoff of our Minnesota real estate loan, WAMCO credit facility and Cryopolymers
Leasing note payable. Positively affecting cash flows from financing activities
for both periods were proceeds from the issuance of notes payable to unrelated
and related parties.

Our financial statements have been prepared assuming we will continue as a
going concern. We have incurred substantial losses from operations, and have a
working capital deficiency of $3,522,130 at September 30, 2004. These factors
raise substantial doubt about our ability to continue as a going concern. Our
liquidity had been significantly and adversely affected since our primary source
of working capital financing and long term debt, Southern Pacific Bank and its
wholly owned subsidiary Coast Business Credit, were closed by the Commissioner
of Financial Institutions of the State of California in February 2003. In
particular, we have had to significantly slow down or delay the implementation
of several growth initiatives, including establishing a new high volume tire
processing facility in Tennessee, shredding and screening upgrades in Georgia
and Minnesota, and the installation of our waste wire processing equipment in
Minnesota. These conditions have caused us to incur both significant expenses in
the short-term and have limitations on our ability to grow in the longer-term.

Despite these challenges during the past fifteen months, we invested over
$3 million in new equipment to increase processing capacity at our Iowa,
Minnesota, Georgia and Tennessee locations, which will allow us to increase our
overall revenue with no further capital investment. We have identified, and are
currently selling product into, several new, higher-value markets as evidenced
by a 13% increase in end product revenue during the current year despite the
fact our Georgia waste wire processing equipment has been inoperable since April
2003. We estimate that during the year ended September 30, 2004, reduced end
product revenue and excess waste disposal costs of over $1 million were
associated with the impact of a March 31, 2003 fire. In November 2004, all
previously damaged equipment was re-installed and became operational. We
continue to experience strong demand for our end products and remain confident
in our ability to continue to grow our revenue base. In addition, we have
reconfigured our Wisconsin location to substantially reduce operating costs and
maximize our return on assets and as of September 30, 2004 our efforts have
resulted in a $385,000 reduction in that facility's year-to-date expenses
compared to the same period last year. The reconfiguration was completed during
the first quarter of fiscal 2004. Additionally, management continues to
negotiate more favorable tipping fees with kiln relationships in several markets
with the ultimate goal of substantially reducing these fees from current levels.

We understand that our continued existence is dependent on our ability to
achieve profitable status on a sustainable basis, and have implemented and/or
are in the process of implementing the following actions:

Refinancing of Our Credit Facility

Our liquidity had been significantly and adversely affected since our
primary source of working capital financing and long term debt, Southern Pacific
Bank and its wholly owned subsidiary Coast Business Credit, were closed by the
Commissioner of Financial Institutions of the State of California in February
2003. In particular, we have had to significantly slow down or delay the
implementation of several growth initiatives, including establishing a new high
volume tire processing facility in Tennessee, shredding and screening upgrades
in Georgia and Minnesota, and the installation of our waste wire processing
equipment in Minnesota. These conditions have caused us to incur both
significant expenses in the short-term and have limitations on our ability to
grow in the longer-term.

On June 30, 2004, however, we entered into a $9 million credit facility
with Laurus Master Fund, Ltd., consisting of a $5 million convertible, revolving
working capital line of credit and a $4 million convertible term note. At
closing, we borrowed $4 million under the term loan and $2 million under the
line of credit, and used approximately $1,860,000 of the proceeds to repay the
outstanding indebtedness under our existing credit facility with WAMCO and
approximately $1,070,000 to repay in full the indebtedness due Cryopolymers
Leasing. Additional proceeds of the financing were used to increase working
capital and to pay certain costs and fees associated with this transaction
including a $425,000 placement fee paid to our investment bank.

The line of credit has a three-year term. Borrowings bear interest at the
prime rate published in The Wall Street Journal from time to time plus 1.0%
(5.75% at September 30, 2004), and are convertible into shares of our common
stock at the option of Laurus. Except for downward adjustments provided in the
credit facility terms described below, the interest rate shall not be below 5%.
Subject to certain limitations, Laurus will have the right, but not the
obligation, to convert the first $1 million of borrowings under the line of
credit into our common stock at a price of $1.31 (a 10% premium over the 22-day
trailing average closing price of our common stock on the American Stock
Exchange on June 30, 2004). The conversion price for each subsequent $1 million
of borrowings will be adjusted upward so that the conversion price will always
reflect a 10% premium over the 22-day trailing average closing price computed on

each $1 million increment. The amount we may borrow at any time under the line
of credit is limited to 90% of eligible accounts receivable (90 days or less)
and 50% of eligible finished goods inventory, subject to certain limitations.
The line of credit requires us to maintain a minimum borrowing of $1,000,000.

In connection with the line of credit, we issued Laurus a warrant to
purchase up to 990,000 shares of our common stock at prices ranging from $1.63
to $2.29. The warrant, valued at $82,731, is immediately exercisable, has a term
of ten years and allows for cashless exercise at the option of Laurus, and does
not contain any "put" provisions.

Net proceeds received from advances made under the line at closing were
allocated to the line of credit and the warrant based on their relative fair
values resulting in a discount on the line of credit amounting to $186,700 which
will be amortized to interest expense over the three-year term of the borrowing
or immediately upon conversion.

The term note also has a three-year term and bears interest at the prime
rate published in The Wall Street Journal from time to time plus 1.0% (5.75% at
September 30, 2004), with interest payable monthly. Except for downward
adjustments provided in the credit facility terms described below, the interest
rate shall not be below 5%. Principal will be amortized over the term of the
loan, commencing on November 1, 2004, with minimum monthly principal payments of
$125,000. Laurus has the option to convert some or all of the principal and
interest payments into common stock at a fixed conversion price of $1.25
reflecting a 5% premium over the 22-day trailing average closing price of our
common stock on the American Stock Exchange on June 30, 2004. Subject to certain
limitations, regular payments of principal and interest will be automatically
payable in common stock if the 5-day average closing price of the common stock
immediately preceding a payment date is greater than or equal to 110% of such
fixed conversion price.

In connection with the term note, we issued Laurus a warrant to purchase
up to 390,000 shares of our common stock at prices ranging from $1.56 to $2.18.
The warrant, valued at $37,161, is immediately exercisable, has a term of ten
years and allows for cashless exercise at the option of Laurus, and does not
contain any "put" provisions.

Net proceeds received from issuance of the term note amounted to
$3,788,950 and were allocated to the term note and the warrant based on their
relative fair values. The note contained a beneficial conversion feature of
$64,000 at issuance based on the intrinsic value of the shares into which the
note is convertible, and a debt issue discount amounting to $248,200. The
beneficial conversion discount was recorded as paid-in-capital and will be
amortized to interest expense along with the debt discount over the three-year
term of the note or ratably upon any partial conversion.

We will be required to pay a premium of 2% of the amount of each principal
payment made in cash under the line of credit and/or the term note. In addition,
we will be required to pay a penalty of 20% of the then-outstanding balance of
the term note if we prepay that note.

The interest rate under each of the notes is subject to downward
adjustment on a monthly basis (but not to less than 0%). The downward adjustment
will be in the amount of 200 basis points (2.0%) for each incremental 25%
increase in the average closing price of our common stock over the then
applicable conversion price of the note for the five-day period preceding such
monthly determination date if we have at that time registered for resale all of
the shares of our common stock underlying the notes and warrants we are issuing
to Laurus in this transaction, or 100 basis points (1.0%) for each incremental
25% increase in the average closing price of our common stock over the then
applicable conversion price of the note for the five-day period preceding such
monthly determination date if we have not at that time registered for resale all
of such shares.

The credit facility is secured by a first-priority security interest in
substantially all of our assets, including the capital stock of our active
subsidiaries. Our active subsidiaries have guaranteed our obligations to Laurus
and have granted Laurus a security interest in their assets to secure this
guarantee.

We incurred investment banking costs amounting to $559,000, including
$455,000 in cash and $103,840 in the form of 57,252 shares of our unregistered
common stock valued at $75,000 and warrants to purchase up to 270,000 shares of
our common stock valued at $28,840. The warrants are immediately exercisable,
have a term of five years and have exercise prices ranging from $1.64 to $2.29.

Total debt issuance costs incurred in connection with securing the Laurus
credit facility amounted to approximately $661,000 which have been recorded as
deferred financing costs to be amortized to interest expense over the three year
term. Additionally, a management fee amounting to $315,000 was paid to Laurus
from the closing proceeds, and was recorded as a debt discount to be amortized
to interest expense over the three year term.

The amount of our common stock Laurus may hold at any given time is
limited to no more than 4.99% of our outstanding capital stock and no more than
25% of our aggregate daily trading volume determined over the five-day period
prior to the date of determination. These limitations may be waived by Laurus on
90 days' prior notice, or without notice if we are in default.

The conversion price applicable to each of the notes and the exercise
price of each of the warrants is subject to downward adjustment if we issue
shares of our common stock (or common stock equivalents) at a price per share
less than the applicable conversion or exercise price. There are exceptions for
issuances of stock and options to our employees and for certain other ordinary
course stock issuances.

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

Additional Steps to Increase Liquidity

Over the last several years, we have funded portions of our operating cash
flow and growth from sales of equity securities and loans from officers and
related parties.

In a private placement commencing in February 2002 and ending September
30, 2003, we sold 1,458,511 shares of our common stock to investors, including
existing shareholders, for gross proceeds of $2,133,603. A majority of the
proceeds of this offering were used to acquire certain tire recycling operations
and assets.

In December 2003, we issued a 10% convertible note due December 2004 in
the aggregate principal amount of $375,000 to an investor. The note was
convertible at the option of the holder at any time prior to maturity into
investment units at a price equal to $1.07 per unit with each unit consisting of
one share of common stock and a warrant to purchase 1.5 shares of common stock
at an exercise price of $1.07 per share, exercisable six months after issuance
for a period of five years from date of issuance. The note was converted on June
24, 2004 into 369,331 shares of common stock and we issued warrants to purchase
553,997 shares of our common stock. When originally issued, this note reflected
a beneficial conversion feature amounting to $154,226 and, upon conversion, the
remaining unamortized beneficial conversion discount of approximately $77,000
was charged to interest expense.

In April 2004, we commenced a private offering of investment units to
accredited investors, each unit consisting of one share of our common stock and
a warrant to purchase 0.5 shares of our common stock. As of June 30, 2004, when
the offering terminated, we had sold 1,594,211 units (1,594,211 shares of our
common stock and warrants to purchase 797,105 additional shares of our common
stock at prices ranging from $1.56 to $2.06 per share) to investors, including
our directors and existing shareholders, for gross proceeds of $1,547,800. We
used the net proceeds of this offering to re-establish our Georgia waste wire
processing capacity and for general working capital purposes during the
seasonally slower portion of our fiscal year.

From June 2003 through March 2004, several of our officers and members of
their families loaned us an aggregate of $1,345,000. These advances bear
interest at 12% and mature at various times through March 2006. In April 2004,
several of these individuals agreed to invest approximately $550,000 of the
amounts due them under the terms of their loans into the private placement
described above. In April 2004, one of our officers applied approximately
$187,000 of amounts due him to pay off notes receivable due our company and in
June 2004 applied approximately $114,000 of amounts due him, including $21,000
of accrued interest, to exercise options to purchase 185,000 shares of our
common stock. At September 30, 2004, the remaining balance on these advances
amounted to $699,320. (See "Certain Relationships and Related Transactions -
Loans; Personal Guarantees.")

Repurchase of Class B Convertible Preferred Stock

On February 14, 2002, we repurchased and retired all of the Class B
convertible Preferred Stock held by Republic Services of Georgia, Limited
Partnership (as successor to United Waste Services, Inc.) for a $1,500,000
promissory note bearing interest at 10% and due in February 2007 and 100,000
shares of common stock valued at $1.60 per share on the date of issuance.

Operating Performance Enhancements

During the past five years, we have terminated under-performing operations
and initiatives and eliminated the use of non-conventional financing methods
that had contributed over $18.7 million to our accumulated deficit. In order to
position our company to be stronger, more profitable and to enhance shareholder
value in the future, we began initiatives during fiscal 2003 to upgrade existing
operations, expand into new geographic locations to maximize existing
transportation and marketing infrastructures, and continue to identify better
and more profitable uses for existing and new products.

Historically, our tire shredding operations were able to recover and sell
approximately 60% of a processed tire with the balance disposed of as waste wire
residual (cross-contaminated rubber and steel) at an annual cost exceeding
$1,000,000 in prior years. We have previously purchased secondary equipment for
our Georgia (damaged in the March 2003 fire and reestablished in November 2004),
Iowa and Minnesota facilities to further process the waste wire residual into
saleable components of rubber and steel that not only provide new sources of
revenue but also significantly reduced our residual disposal costs.

During the fourth quarter of fiscal 2002, we initiated a $1.5 million
equipment upgrade to our Des Moines, Iowa tire processing facility. We
completely replaced all tire shredders with more efficient, higher volume
equipment and installed a waste wire processing equipment line that reduced
waste wire disposal costs while increasing our production capacity to over 20
million pounds of rubber feedstock per year for our internal crumb rubber
operations. From July through December 2002, we experienced inevitable one-time

operational disruptions during the equipment installation. Additionally, we
incurred increased transportation costs because a significant portion of Iowa
tires were diverted to our Minnesota plant for processing during the upgrade.
These disruptive factors negatively impacted earnings in the first quarter of
fiscal 2003 by approximately $150,000. Additionally, we believe that these
actions position us to better meet the growing market demand for our products
and services as evidenced by the fact that Iowa crumb product shipments have
increased almost three-fold during the fiscal year ended September 30, 2003,
compared to the same period in fiscal 2002. The capital investment in Iowa was
funded by a combination of internal cash flow and long-term debt provided by
First American Bank of Des Moines, Iowa and the State of Iowa.

On March 31, 2003, a portion of our Georgia facility and several pieces of
waste wire processing equipment were damaged by a fire. As of September 30,
2003, damaged equipment and parts with a net book value of approximately
$179,000 have been written off and we have incurred $225,000 of expenses
associated with the fire, including $211,000 of excess waste wire disposal. In
December 2003 we reached a $1.03 million settlement with our insurance carrier
in connection with the claims associated with the fire and have received all
remaining amounts due under this insurance claim. During the quarter ended
December 31, 2003, we recognized $207,873 of casualty income associated with the
insurance settlement before related costs of $95,000 during the quarter. We
estimate that during the year ended September 30, 2004, reduced end product
revenue and excess waste disposal costs of over $1 million were associated with
the impact of the March 31, 2003 fire. In November 2004, all previously damaged
equipment was re-installed and became operational.

Following the February 2003 decision to reconfigure our Wisconsin
operations, waste wire processing equipment in Wisconsin was taken off line in
March 2003 with the intention of moving it to our Minnesota operation. We had
originally delayed the relocation of the equipment to Minnesota in order to
evaluate whether to deploy it in Georgia to temporarily replace the damaged
equipment; however, in May 2003 we decided to relocate the Wisconsin equipment
to Minnesota as planned. The Minnesota waste wire processing equipment began
initial operation in July 2003. We estimate this equipment will reduce disposal
expense by over $160,000 per year, while providing new sources of revenue and
much needed material feedstock for our Iowa crumb rubber operations. In addition
to the existing waste wire processing equipment, we invested an additional
$250,000 in new support equipment and infrastructure improvements. These capital
investments were funded by internal cash flow.

In addition, during the first half of fiscal 2003, several new pieces of
shredding and screening equipment were installed at our Minnesota and Georgia
locations in order to meet increased demand for more lucrative smaller
tire-derived fuel material in the Midwest and Southeast. These capital
investments, which exceeded $525,000, were funded by internal cash flow.

Effects of Inflation and Changing Prices

Generally, we are exposed to the effects of inflation and changing prices.
Primarily because the largest component of our collection and disposal costs is
transportation, we are adversely affected by significant increases in the cost
of fuel; however, such increases also create additional market demand for our
tire-derived fuel products. Additionally, because we rely on floating-rate debt
for certain financing arrangements, rising interest rates would have a negative
effect on our performance.

Other Matters That Have Impacted Our Liquidity

New Market Development Initiatives.

The July 2002 acquisition of a scrap tire business in Azusa, California
marked our first location in the western portion of the United States. We have
devoted significant resources during the past twenty-four months to expand and
enhance our California market position in order to provide a solid foundation
for future growth and sustainable profitability.

On July 1, 2004, we acquired certain assets of American Tire Disposal,
Inc., a southern California based company in the business of collecting and
marketing scrap tires, for approximately $172,000 in assumed liabilities,
forgiveness of trade payables due to us and cash. We have consolidated American
Tire Disposal's business into our existing California operations.

In February 2003, we announced our intent to open a new high-volume tire
processing facility in LaVergne, Tennessee as a result of experiencing
significant market share growth during the last two years. Historically, we
transported all Tennessee-sourced tires to our Georgia facility to be processed.
We anticipated that a majority of the funding to implement this initiative would
come from our principal lender, which unfortunately was closed by the
Commissioner of Financial Institutions of the State of California in February
2003, shortly after we received verbal approval to move forward. In July 2003,
our Tennessee facility began processing local tires on a limited basis using
excess and idle equipment from various other locations. We initially earmarked
approximately $1 million of proceeds from the Laurus credit facility to purchase
equipment necessary for our Tennessee facility.

In August 2004, we executed a non-binding letter of intent and escrow
agreement in connection with a potential business acquisition. Pursuant to the
escrow agreement, we have made a "good faith" payment amounting to $350,000,
which was to be applied toward the purchase price upon completion of the
transaction. On December 8, 2004, we executed a new letter of intent which
superseded the August letter of intent in which we will lease, with an option to
buy, certain pieces of tire processing equipment owned by the third party. These
leases were executed in January 2005 and provide for aggregate monthly payments
of $25,300 over terms ranging from 48 to 60 months. In addition, we were granted
an exclusive purchase option to acquire additional operating assets of the third
party if predetermined financial performance criteria are met by the third party
during the subsequent fifteen to twenty-four month period after December 8,
2004. The ultimate purchase price cannot be determined at this time. In return
for the exclusive purchase option, we issued 127,389 shares of our common stock
(valued at $200,000) to the third party. If we exercise our exclusive purchase
option and close a transaction, the value of the shares will be applied against
the purchase price of the assets. If the exclusive purchase option expires or we
decide not to exercise the option, the third party shall retain a number of our
shares sufficient to equal $200,000 (as of the date that the purchase option
expires) and return the balance of such shares of common stock to us. If at the
time the purchase option expires the value of the shares is less than $200,000,
we will issue a number of additional shares sufficient to equal $200,000. We
have also agreed to use the $350,000 held in escrow to prepare and move the
leased equipment for our use. The $350,000 escrow deposit is included in other
long term assets.

Due to delays in identifying the appropriate remaining equipment for
Tennessee, we reallocated approximately $650,000 of the proceeds to be used to
re-establish our Georgia waste wire processing equipment line in November 2004
as well as support the limited Tennessee operation during this period. We are
currently evaluating several alternatives which will allow us to commence
operations in Tennessee during the second quarter of fiscal 2005. When the
Tennessee facility is fully operational, we estimate the cost savings realized
by processing Tennessee-sourced tires locally instead of transporting them to
Georgia should exceed $80,000 per month.

Also in February 2003, we decided to reconfigure the operations of our
Wisconsin facility from an unprofitable low-volume size reduction facility to a
whole tire transfer station supplying compliant tires to a cement kiln. The
decision was made because the cement kiln is anticipated to continue consuming a
majority of the scrap tires collected by our Wisconsin facility. As of September
30, 2004, our on-going efforts to increase tire volume and reduce expenses in
Wisconsin have resulted in a $385,000 reduction in that facility's year-to-date
expenses compared to the same period last year. The reconfiguration was
completed during the first quarter of fiscal 2004.

During fiscal 2003 we invested over $1.5 million developing and/or
reconfiguring our California, Tennessee and Wisconsin operations. These
investments have come in the form of new internally financed capital equipment
and the funding of new market development initiatives.

We believe that our current cash position and current credit facilities
combined with internally generated cash flow will satisfy our cash requirements
for the foreseeable future.

Off-balance Sheet Arrangements

We lease various facilities and equipment under cancelable and
noncancelable short and long-term operating leases which are described in Note
11 to our consolidated financial statements contained herein.

BUSINESS
General

Recent Developments

On March 31, 2003, a portion of our Georgia facility and several pieces of
waste wire processing equipment were damaged by a fire. As of September 30,
2003, damaged equipment and parts with a net book value of approximately
$179,000 was written off and we incurred $225,000 of expenses associated with
the fire, including $211,000 of excess waste wire disposal. In December 2003, we
reached a $1.03 million settlement with our insurance carrier in connection with
the claims associated with the fire and received all remaining amounts due under
this insurance claim. We recognized $112,082 of casualty income associated with
the insurance settlement net of related costs in December 2003, and $431,594 in
fiscal 2003. We estimate that during the year ended September 30, 2004, reduced
end product revenue and excess waste disposal costs of over $1 million were
associated with the impact of the fire. In November 2004, all previously damaged
equipment was re-installed and became operational.

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 will be amortized into income over a 12 year period.
Simultaneous with the sale, we entered into an agreement to lease 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.

On April 9, 2004, we commenced a private offering of investment units.
Each unit consists of one share of our common stock and a warrant to purchase
0.5 shares of our common stock. As of June 30, 2004, when the offering was
terminated, we had sold 1,594,211 units (1,594,211 shares of our common stock
and warrants to purchase 797,105 additional shares of our common stock at prices
ranging from $1.56 to $2.06 per share) to investors, including our directors and
existing shareholders, for gross proceeds of $1,547,000.

In April 2004, our Wisconsin subsidiary reached agreement with the lessor
of certain processing equipment to buy-out the remaining term of the lease. The
lessor agreed to accept several pieces of idle equipment, 50,000 unregistered
shares of our common stock, and cash, valued in the aggregate at approximately
$180,000, in full settlement of our capital lease obligation with a carrying
value of approximately $192,000 at March 31, 2004. We realized a gain of
approximately $12,000 in connection with this transaction.

On June 30, 2004, we entered into a three-year, $9 million credit facility
with Laurus Master Fund, Ltd., consisting of a $5 million convertible, revolving
working capital line of credit and a $4 million convertible term loan.

Products and Services

We collect scrap tires from three sources:

o local, regional and national tire stores;

o tire manufacturing plants; and

o illegal tire piles being cleaned-up by state, county and local
governmental entities;

The tires we collect are processed and sold ("end product" revenue):

o as tire-derived fuel used in lieu of coal by pulp and paper
producers, cement kilns and electric utilities;

o as an effective substitute for crushed stone in civil engineering
applications such as road beds, landfill construction or septic
field construction; or

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

Manufacturing/Processing

Our tire shredding operations currently have the capacity to process about
40 million passenger tire equivalents annually. We collected over 30.6 million
passenger tire equivalents in the fiscal year ended September 30, 2004, compared
to approximately 28.6 million passenger tire equivalents during the year ended
September 30, 2003. We anticipate processing over 32 million passenger tire
equivalents in fiscal 2005, based on current processing volumes

The method used to process tires is a series of commercially available
shredders that sequentially reduce tires from whole tires to two-inch chips or
smaller. Bead-steel is removed magnetically yielding a "95% wire-free chip."
This primary recycling process recovers approximately 60% of the incoming tire.
The remaining balance consists of un-saleable cross-contaminated rubber and
steel ("waste wire"), which we have historically disposed of at costs exceeding
$1 million annually. To minimize this disposal cost, we have installed secondary
equipment at our Georgia, Iowa, and Minnesota facilities which further processes
the waste wire residual into saleable components of rubber and steel which not
only has reduced residual disposal costs, but also provides new 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.

The secondary equipment located at our Georgia facility was damaged in a
March 2003 fire. The equipment was returned to operative status during November
2004.

Raw Materials

We believe we will have access to a supply of tires sufficient to meet our
requirements for the foreseeable future. According to the Rubber Manufacturers
Association, in 2003, approximately 290 million passenger tire equivalents
(approximately one per person per year) were discarded in the United States
("current generation scrap tires") in addition to an estimated several hundred
million scrap passenger tire equivalents already stockpiled in illegal tire
piles. The Rubber Manufacturers Association estimates that a total of
approximately 233 million passenger tire equivalents are currently recycled, of
which approximately 130 million are burned as tire-derived fuel; 55 million are

used in civil engineering applications; and 48 million are used in various other
applications such as crumb rubber production, retreading and export. The
approximately 57 million remaining passenger tire equivalents are now added to
landfills annually. Based on this and other data, there appears to be an
abundant supply of tires to meet our growth plans.

Customers

Our tire recycling operations have a diversified collection and product
sales program that minimizes our vulnerability to the loss of any one customer.
For the fiscal years ended September 30, 2004 and 2003, no one customer
accounted for more than 10% of our consolidated net sales. Our diverse base of
customers includes Bridgestone/Firestone, Cooper, Continental, Goodyear,
Michelin, many local and regional tire outlets and state and local governments.
We do not believe that the loss of any individual customer would have a material
adverse effect on our business.

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

Sales and Marketing

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

Competition

We have positioned ourselves as a leader in the tire recycling industry.
Based on our current scrap tire volumes, we estimate we collect approximately
11% of domestic scrap tires currently generated, making us one of the largest
tire recyclers in the United States.

We compete in a highly fragmented and decentralized market in which many
of our competitors are small and undercapitalized. Consequently, we believe
there is an opportunity for industry consolidation and certain strategic
value-added vertical integration. Our strategy is to continue to increase the
number of passenger tire equivalents that we processes through aggressive sales
and marketing efforts as well as through selective acquisitions of smaller
competitors, while continuing to focus on identifying and generating new
marketing strategies for recycled tires and their value added by-products.

Companies in the tire collection and processing industry have historically
generated sufficient quantities of tires to satisfy the growing needs of
tire-derived fuel users such as cement kilns, pulp and paper producers and
electric utilities as well as the demand from civil engineering projects such as
landfill construction or road stabilization projects. There are also several
companies that break down the tire material into its elemental components and
sell the components individually.

Government Regulation

Our tire recycling and processing activities are subject to extensive and
rigorous government regulation designed to protect the environment. We do not
believe that our activities result in emission of air pollutants, disposal of
combustion residues, or storage of hazardous substances except in compliance
with applicable permits and standards. The establishment and operation of plants
for tire recycling, however, are subject to obtaining numerous permits and
compliance with environmental and other government regulations. The process of
obtaining required regulatory approvals can be lengthy and expensive. The
Environmental Protection Agency and comparable state and local regulatory
agencies actively enforce environmental regulations and conduct periodic
inspections to determine compliance with government regulations. Failure to

comply with applicable regulatory requirements can result in, among other
things, fines, suspensions of approvals, seizure or recall of products,
operating restrictions, and criminal prosecutions. Furthermore, changes in
existing regulations or adoption of new regulations could impose costly new
procedures for compliance, or prevent us from obtaining, or affect the timing
of, regulatory approvals. We use our best efforts to keep abreast of changed or
new regulations for immediate implementation.

Protection of Intellectual Property Rights and Proprietary Rights

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

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

Employees

As of September 30, 2004, we had approximately 190 full time employees. We
are not a party to any collective bargaining agreements and consider the
relationship with our employees to be satisfactory.

Properties

Our Minnesota subsidiary leases two industrial buildings and an office
building in Savage, Minnesota, located on approximately 8 acres of land zoned
for industrial use. In March 2004, this subsidiary sold that property to an
entity co-owned by one of our employees for $1,400,000. Simultaneously 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 lease provides for two additional 4-year extensions. (See "Certain
Relationships and Related Transactions - Related Party Transactions.")

In April 2001, our Georgia subsidiary sold all of its land and buildings
located in Jackson, Georgia to a third party. Simultaneous with the sale, the
subsidiary executed a twenty-year lease with the same third party for use of
that property at a monthly rental of $17,642. The lease can be renewed for four
additional five-year periods, and provides us an option to repurchase the land
and buildings at fair market value after the second anniversary of the lease. In
December 2002, the lease was assigned to Mart Management, an unrelated third
party. In September 30, 2003, Mart Management loaned us $100,000 under a twelve
month unsecured note payable bearing interest quarterly at 12% per annum. In
April 2004, Mart Management agreed to invest the $100,000 principal balance due
under the note and accrued interest of $7,300 into a private placement of our
securities. (See "Certain Relationships and Related Transactions - Related Party
Transactions.")

Our Iowa subsidiary leases a facility located on approximately four acres
of land under a ten-year lease commencing in April 2003 from Maust Asset
Management Company, LLC, a company co-owned by one of our employees. Under the
terms of the lease, monthly rental payments of $8,250 are required for the first
five years, increasing to $9,000 per month for the remaining five years. The
lease also provides us with 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. (See "Certain
Relationships and Related Transactions - Related Party Transactions.")

On April 1, 2003, our Wisconsin subsidiary acquired the land and buildings
in which it operates for $362,900 under a sixty-seven month promissory note with
aggregate payments of $76,500 over the first eight months. Thereafter,
commencing December 1, 2003, the note requires monthly payments of $2,886,
including interest at 8% per annum with the remaining principal balance due on
November 1, 2008.

Our California subsidiary leases approximately 45,000 square feet of a
building situated on approximately 1.5 acres of land for $1,250 per month. The
lease expires in April 2007 subject to an option to extend the lease for an
additional five years.

Our Tennessee subsidiary leases a facility of approximately 26,000 square
feet located on approximately two acres of land under a three-year agreement for
$10,222 per month. The lease can be renewed for an additional five-year period
and includes an option to purchase the land and buildings at fair market value
during the term of the lease.

We lease approximately 3,380 square feet of office space in Lynnfield,
Massachusetts at a monthly rental of $5,070 under a five-year lease that expires
in May 2008. In June 2004, we amended this lease to include an additional 1,125
square feet of office space for additional monthly rent of $1,500.

We believe these facilities are adequate for our current needs and have
adequate space to accommodate expansion if required to meet ongoing growth.

MANAGEMENT

Directors and Executive Officers

The following table sets forth our directors and executive officers, their
ages and the positions they hold within our company:

Name Age Position
---- --- --------
Maurice E. Needham......... 64 Chairman of the Board of Directors
Robert H. Davis............ 62 Chief Executive Officer; President; Director
Charles E. Coppa........... 41 Chief Financial Officer; Treasurer; Secretary
Dr. Allen Kahn............. 83 Director
Lew F. Boyd................ 58 Director
Lyle Jensen................ 53 Director

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

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.

Robert H. Davis has been Chief Executive Officer and a Director since July
1997. Prior to joining us, Mr. Davis served as Vice President of Recycling for
Browning-Ferris Industries, Inc. of Houston, Texas ("BFI") since 1990. As an
early leader of BFI's recycling division, Mr. Davis grew that operation from
startup to $650 million per year in profitable revenues. A 25-year veteran of
the recycling industry, Mr. Davis has also held executive positions with Fibres
International, Garden State Paper Company, and SCS Engineers, Inc. Mr. Davis
currently serves as a Director and Audit Committee member of Waste Connections,
Inc., the fourth largest solid waste management company in the United States.

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

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

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

Lyle Jensen has been a Director since May 2002. Mr. Jensen is currently a
Business Development and Operations Consultant. Prior to that he held 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.

EXECUTIVE COMPENSATION

Executive Compensation

The following table summarizes the compensation paid or accrued for
services rendered during the fiscal years ended September 30, 2004, 2003 and
2002, to our Chief Executive Officer, our former Vice President of Operations
and our Chief Financial Officer. We did not grant any restricted stock awards or
stock appreciation rights or make any long-term plan payouts during the periods
indicated.

SUMMARY COMPENSATION TABLE

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

Robert H. Davis, 2004 $230,000 $ -- $21,468 -- $ --
Chief Executive Officer .... 2003 230,000 -- 19,900 -- --
2002 230,000 23,000 16,817 7,500 --

Mark T. Maust, 2004 $140,000 $56,000 $22,598 -- $ --
Vice President (3) ......... 2003 140,000 -- 18,908 -- --
2002 140,000 70,000 17,278 7,500 --

Charles E. Coppa, 2004 $130,000 $ -- $22,906 60,000 $ --
Chief Financial Officer .... 2003 130,000 -- 9,343 -- --
2002 130,000 5,000 7,200 7,500 --

----------
(1) Represents payments made to or on behalf of Messrs. Davis, Maust and Coppa
for health, life and disability insurance and auto allowances.
(2) The fiscal 2004 grant represents options granted to Mr. Coppa in August
2004. The fiscal 2002 grants represent options granted to Mr. Davis, Mr.
Maust and Mr. Coppa in August 2002.
(3) Mr. Maust also served as our Vice President of Operations until April
2004, when we eliminated that position. Mr. Maust still serves as our
Midwest Regional Vice President.

Options/SAR Grants Table

The following table sets forth each grant of stock options made during the
year ended September 30, 2004 held by the executives named in the Summary
Compensation Table above.

OPTION GRANTS IN LAST FISCAL YEAR

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

Charles E. Coppa.......... 60,000 11.2% $1.24 $1.24 8/4/14

Options granted have a ten year term and vest equally over a five-year
period from the date of grant.

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

The following table sets forth information concerning the value of
unexercised options as of September 30, 2004 held by the executives named in the
Summary Compensation Table above.

Number of Unexercised Value of Unexercised In-the-
Options at Money Options at
September 30, 2004 (3) September 30, 2004 (2)
---------------------- ----------------------
Shares
Acquired on Value
Name Exercise (1) Realized (2) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ ------------ ----------- ------------- ----------- -------------

Robert H. Davis....... 185,000 $ 90,940 610,000 149,500 $ 153,540 $ 71,300

Mark T. Maust......... -- -- 278,000 54,500 $ 147,250 $ 37,400

Charles E. Coppa...... 20,000 16,600 323,000 104,500 $ 153,000 $ 30,800

----------
(1) During the fiscal year ended September 30, 2004, Mr. Davis exercised
185,000 options at exercise prices ranging from $.40 to $.94 per share and
Mr. Coppa exercised 20,000 options at exercise prices ranging from $.38 to
$.40 per share.
(2) Assumes that the value of shares of common stock is equal to $1.22 per
share, which was the closing bid price on the American Stock Exchange on
September 30, 2004.
(3) The options granted to the executive officers became exercisable
commencing July 17, 1998 in the case of Mr. Davis, December 30, 1997 in
the case of Mr. Maust and March 23, 1999 in the case of Mr. Coppa at an
annual rate of 20% of the underlying shares of our common stock. The
options granted to Mr. Davis pursuant to his April 1999 employment
agreement vest over a seven-year period.

Employment Agreements

In April 1999, we entered into a three-year employment agreement with Mr.
Davis pursuant to which Mr. Davis receives a salary of $230,000 per annum with
an additional $50,000 of deferred compensation in the first year. The agreement
automatically renews for three additional years upon each anniversary, unless
notice of non-renewal is given by either party, and provides for payment of
twelve months salary as a severance payment for termination without cause. Any
increases will be made at the discretion of our Board of Directors upon the
recommendation of the Compensation Committee. The agreement also provides for
Mr. Davis to receive incentive compensation based on the following formula:

Consolidated Net Income Incentive Cumulative
Before Income Taxes Compensation Rate Maximum
------------------- ----------------- -------
$0 - $1,000,000 5% $ 50,000
$1,000,001 - $2,000,000 7.5% 125,000
$2,000,001+ 2.5% 125,000+

No bonus was payable for fiscal 2004 or 2003. Based upon our fiscal 2002
performance, Mr. Davis chose to accept a reduced bonus amount of $23,000.

In June 1999, we entered into a two-year employment agreement with Mr.
Coppa pursuant to which Mr. Coppa currently receives a salary of $130,000 per
annum. The agreement automatically renews for two additional years upon each
anniversary, unless notice of non-renewal is given by either party. Any
increases or bonuses will be made at the discretion of our Board of Directors
upon the recommendation of the Compensation Committee. The agreement provides
for payment of twelve months salary as a severance payment for termination
without cause.

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

Stock Option Plan

Our 1993 Stock Option 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 Stock Option Plan to 3,000,000 shares. This plan
expired on June 10, 2004.

Our 2004 Stock Option Plan was adopted by the Board of Directors on April
21, 2004, and is subject to ratification by our stockholders. Subject to such
ratification, options granted under the 2004 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.
We will evaluate the market price of our common stock on the date the plan is
ratified as compared to the exercise price of all previously granted options
under the plan to determine the amount of compensation expense, if any, that
should be recognized on such grants.

Incentive stock options may be granted under the 2004 Stock Option Plan to
employees, including officers and directors who are employees. Non-qualified
options may be granted to our employees, directors and consultants. The 2004
Stock Option Plan is administered by our Board of Directors, which has the
authority to determine:

o the persons to whom options will be granted;

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

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

o the manner of exercise; and

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

Incentive stock options granted under the 2004 Stock Option 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. Incentive stock
options granted under the 1993 Stock Option Plan must expire no more than ten
years from the date of grant, and no more than five years from the date of grant
in the case of incentive stock options granted to an employee holding 10% or
more of our voting stock.

As of September 30, 2004, there were 1,670,356 options granted and
outstanding under the 1993 Stock Option Plan of which 1,498,356 options were
exercisable at prices ranging from $0.38 to $1.80. As of such date, 538,000
options were granted and outstanding under the 2004 Stock Option Plan. No such
options are currently exercisable and no such options will become exercisable
unless the adoption of this plan is ratified by our stockholders.

Non-Employee Director Stock Option Plan

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

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

As of September 30, 2004, options to purchase 32,000 shares of our common
stock have been granted under the 1996 Non-Employee Director Stock Option Plan,
of which 22,000 are outstanding and exercisable at prices ranging from $0.38to
$1.95.

Employee Benefit Plan

In August 1999, we implemented a Section 401(k) plan for all eligible
employees. Employees are permitted to make elective deferrals of up to 15% of
employee compensation and employee contributions to the 401(k) plan are fully
vested at all times. We may make discretionary contributions to the 401(k) plan
which become vested over a period of five years. We did not make any
discretionary contributions to the 401(k) plan during the fiscal years ended
September 30, 2004 and 2003.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Stock Issuances; Stock Options; Warrants

In fiscal 2003, Messrs. Needham, Davis, Kahn and Boyd, collectively
exercised options and warrants to purchase 255,106 shares of unregistered common
stock at exercise prices ranging from $.31 to $1.09 per share for gross proceeds
of $113,605.

On May 18, 2004, Mr. Jensen was granted options to purchase 75,000 shares
of our common stock at an exercise price of $1.05 per share. These options vest
equally over a five-year period and are exercisable for a period of ten years.

On June 24, 2004, Messrs. Needham and Kahn collectively purchased 669,871
units (669,871 shares of our common stock and warrants to purchase 334,936
additional shares of our common stock at prices ranging from $1.56 to $1.86 per
share) pursuant to the terms of our April 9, 2004 private placement of
investment units. The warrants are exercisable at any time between the ninth
month and the third year after the date of issuance at an exercise price equal
to 150% of the closing bid price of our common stock on the day preceding such
date. In addition, in accordance with American Stock Exchange rules, units
purchased by officers, directors or affiliates were made at 100% of the closing
bid price of our common stock on the day preceding the date such investor's
subscription for units became a binding commitment

On August 4, 2004, Messrs. Needham, Coppa and Kahn were collectively
granted options to purchase 180,000 shares of our common stock at an exercise
price of $1.24 per share. These options vest equally over a five-year period and
are exercisable for a period of ten years.

In fiscal 2004, Messrs. Needham, Davis and Coppa, collectively exercised
options and warrants to purchase 223,538 shares of unregistered common stock at
exercise prices ranging from $0.38 to $0.94 per share for gross proceeds of
$150,435.

Loans; Personal Guarantees

In January 1998, we advanced Mr. Davis $104,000 under an 8.5% secured loan
agreement with both principal and interest due January 2001. This agreement was
amended on September 30, 2000 to extend the maturity of the note until April 15,
2002 (subsequently extended to April 15, 2004) and increase the interest rate to
9.5%. On April 30, 2004, the remaining balance of $163,000, including interest,
was applied to offset obligations under our $400,000 September 30, 2003 note
payable due to Mr. Davis.

In January 1999, we advanced Messrs. Davis and Coppa a total of $55,000
under 8.5% secured loan agreements with both principal and interest due January
2002 (subsequently extended to January 2004). The proceeds were used to
participate in a private placement of our common stock and the loans were
secured by 191,637 shares of common stock owned by the two officers. In June
2002, Messrs. Davis and Coppa each repaid $5,000 of their respective then
outstanding balances. On March 31, 2004, Mr. Davis's remaining balance of
$24,000 including interest, was applied to offset obligations under our $400,000
September 30, 2003 note payable to him. On May 11, 2004 Mr. Coppa sold 36,717
shares of common stock valued at $44,248 back to us in full settlement of all
amounts due under his note. We subsequently cancelled these shares, which
reduced our total shares issued and outstanding.

Dr. Kahn loaned us $300,000 under the terms of an October 1999 private
offering of 10% convertible notes and warrants and $75,000 under the terms of a
February 2000 private offering of 11% convertible notes and warrants. The
warrants were exercisable for a period of five years to purchase 125,000 shares
of our common stock at exercise prices ranging from $.31 to $.50 per share. The
convertible notes originally matured twelve months after issuance and were
payable in cash or unregistered shares of our common stock at a conversion price
of $1.00 per share. In September 2000 and June 2001, Dr. Kahn agreed to extend
the maturity date of each note for an additional twelve months from their
original maturity. In return for the June 2001 extension, we agreed to reduce
the conversion price to $.75 per share. In September 2002, Dr. Kahn again agreed
to extend the maturity of each note for an additional twenty-four months from
their extended maturity dates which range from October 2004 to February 2005. On
February 16, 2004, Dr. Kahn converted these two notes, including $375,000 of
principal and $168,210 of accrued interest into 724,281 shares of our
unregistered common stock pursuant to the amended terms noted above. The
warrants were exercised by Dr. Kahn during fiscal 2003.

Dr. Kahn has also loaned us $200,000 under the terms of a November 2000
unsecured promissory note which bears interest at 12% per annum with interest
due monthly and the principal due in November 2001. In June 2001, Dr. Kahn
agreed to extend the maturity date of the note for an additional twelve months
from its original maturity. In September 2002, Dr. Kahn again agreed to extend
the maturity of the note until November 2004. In June 2004, Dr. Kahn agreed to
extend the maturity of this note until the earlier of when all amounts due under
the Laurus credit facility have been repaid or June 30, 2007.

During the period of June to August 2003, two immediate family members of
Mr. Needham 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 a total of an additional $200,000, under similar terms
with the principal due in March 2006. These individuals each agreed to invest
the entire $100,000 principal balance of their June 2003 notes ($200,000 in the
aggregate) into the April private placement described above and each received
113,636 investment units (113,636 shares of our common stock and warrants to
purchase 56,818 additional shares of our common stock at $1.80 per share) in
these transactions. At September 30, 2004, the remaining balance due on these
advances amounted to $400,000. In addition, the two individuals agreed to extend
the maturity of the remaining balance of these notes until the earlier of when
all amounts due under the Laurus credit facility have been repaid or June 30,
2007.

In September 2003, Mr. Davis loaned us $400,000 under the terms of a
September 30, 2003 unsecured promissory note which bears interest at 12% per
annum with interest due quarterly and the principal due March 31, 2004
(subsequently extended to September 30, 2004). In 2004, Mr. Davis applied
approximately $114,000 of the balance due him plus $21,000 of accrued interest
to exercise options to purchase 185,000 shares of common stock as described
above. In addition, he agreed to extend the maturity of the remaining balance of
this note until the earlier of when all amount due under the Laurus credit
facility have been repaid or June 30, 2007. At September 30, 2004, the remaining
balance due on this note was $99,320.

In October 2003, Mr. Needham loaned us $75,000 under an unsecured
promissory note payable which bears interest at 12% per annum with interest due
quarterly and the principal due June 30, 2004. During January and February 2004,
Mr. Needham advanced us an additional $250,000 under substantially similar notes
that are also due in June 2004. Mr. Needham agreed to each invest all principal
and interest under these advances ($350,000 in the aggregate) into the April
private placement described above and received 339,806 investment units in this
transaction.

Related Party Transactions

We rent several pieces of equipment on a monthly basis from Valley View
Farms, Inc. and Maust Asset Management, LLC, two companies co-owned by Mr.
Maust. Rent expense associated with payments made to the two companies for the
fiscal years ended September 30, 2004 and 2003 was $248,560 and $281,143,
respectively.

In July 2002, our Minnesota subsidiary entered into a four-year equipment
lease with Valley View Farms. Under the terms of the lease, the subsidiary is
required to pay rent of $4,394 per month and has the ability to purchase the
equipment at the end of the lease at approximately 40% of its original value.
The lease is classified as a capital lease at September 30, 2004 with an
equipment value of $146,670.

Our majority-owned joint venture, Able Tire of Oklahoma, LLC which we
divested in April 2003, leased on a month-to-month basis, certain rolling stock
equipment from Gary Humphreys, an owner of Able Tire Company, LLC, the other
member of the joint venture. Payments made to Mr. Humphreys totaled $48,700
during the fiscal year ended September 30, 2003.

In April 2003, our Iowa subsidiary entered into a ten-year lease agreement
with Maust Asset Management for our Iowa facility. Under the terms of the lease,
monthly rent payments of $8,250 are required for the first five years,
increasing to $9,000 per month for the remaining five years. The lease also
provides us a right of first refusal to purchase the land and buildings at fair
market value during the term of the lease. Maust Asset Management acquired the
property from the former lessor. For the fiscal years ended September 30, 2004
and 2003, payments made in connection with this lease amounted to $111,483 and
$41,250, respectively.

During March 2004, our Minnesota subsidiary sold all of its land and
buildings to an entity co-owned by Mr. Maust 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 our financial statements. Simultaneous with the sale, we
entered into an agreement to lease the property back for a term of 12 years at
an annual rent of $195,000, increasing to $227,460 over the term of the lease.
The gain will be recognized as income ratably over the term of the lease. The
lease provides for two additional 4-year extensions. The lease is classified as
a capital lease at September 30, 2004 with an equipment value of $1,400,000. For
the fiscal year ended September 30, 2004, payments made in connection with this
lease amounted to $145,379.

On September 30, 2003, Mart Management, Inc., our Georgia subsidiary's
landlord, loaned us $100,000 under the terms of a September 30, 2003 unsecured
promissory note which bears interest at 12% per annum with interest due
quarterly and the principal due September 30, 2004. In June 2004, Mart
Management agreed to invest the entire $100,000 principal balance of the
unsecured promissory note plus accrued interest of $7,300 into the April 2004
private placement of investment units and received 121,932 Units in this
transaction.

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.

PRINCIPAL STOCKHOLDERS

The following tables set forth certain information regarding beneficial
ownership of our common stock as of December 31, 2004:

o by each of our directors and executive officers;

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

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

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 December 31, 2004, 19,200,352 shares of our common
stock were issued and outstanding.

Security Ownership of Management and Directors

Number of Shares Percentage
Name (1) Beneficially Owned (2) of Class (2)
-------- ---------------------- ------------

Dr. Allen Kahn (3)................................. 3,273,937 17.04%
Maurice E. Needham (4)............................. 2,210,557 11.00%
Robert H. Davis (5)................................ 1,343,700 6.77%
Charles E. Coppa (6)............................... 669,210 3.42%
Mark T. Maust (7) ................................. 469,236 2.41%
Lew F. Boyd (8).................................... 367,088 1.90%
Lyle Jensen (9).................................... 15,300 *
All officers and directors
as a group (7 persons)............................. 8,349,028 38.79%

* Less than 1%

Security Ownership of Certain Beneficial Owners

Number of Shares Percentage
Name (1) Beneficially Owned of Class
-------- ------------------ --------

Richard Ledet (10)................................. 1,455,629 7.58%
Laurus Master Fund, Ltd. (11)...................... 1,001,727 4.99%

----------
(1) Except as noted, each person's address is care of GreenMan Technologies,
Inc., 7 Kimball Lane, Building A, Lynnfield, Massachusetts 01940.
(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 13,000 shares of common stock issuable pursuant to immediately
exercisable stock options.
(4) Includes 894,962 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 640,000 shares of common stock issuable pursuant to immediately
exercisable stock options.
(6) Includes 353,000 shares of common stock issuable pursuant to immediately
exercisable stock options.

(7) Includes 278,000 shares of common stock issuable pursuant to immediately
exercisable stock options.
(8) Includes 126,894 shares of common stock issuable pursuant to immediately
exercisable stock options.
(9) Includes 15,000 shares of common stock issuable pursuant to immediately
exercisable stock options.
(10) Mr. Ledet's address is 2960 NE Broadway, Des Moines, Iowa 50317.
(11) Laurus holds (i) warrants to purchase up to 1,380,000 shares of common
stock that are exercisable within 60 days (subject to the following
sentence) at exercise prices ranging from $1.56 to $2.29 per share, (ii) a
$4 million convertible term note that is convertible into 3,100,000 shares
of common stock within 60 days (subject to the following sentence) at a
conversion price of $1.25 per share, and (iii) $1 million minimum
borrowing note that is convertible within 60 days (subject to the
following sentence) into 763,359 shares of common stock at a conversion
price of $1.31 per share. These warrants are not exercisable, and these
notes are not convertible, 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 warrants and conversion of the notes
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 warrants and/or
the notes on 90 days' prior notice to us, or without notice if we are in
default under the notes. Laurus beneficially owns 1,001,727 shares of our
common stock underlying warrants and the notes that are exercisable or
convertible, as the case may be, within 60 days. Laurus' address is 825
Third Avenue, 14th Floor, New York, New York 10022.

SELLING STOCKHOLDERS

The following is a list of the selling stockholders who own or who have the
right to acquire the 4,724,565 shares of common stock covered by this
prospectus. As set forth below and elsewhere in this prospectus, some of these
selling stockholders hold or within the past three years have held, a position,
office or other material relationship with us.

The following table sets forth information concerning the selling
stockholders, including:

o the number of shares currently held;

o the number of shares issuable upon conversion of notes payable and
interest;

o the number of shares issuable upon exercise of warrants;

o the number of shares offered by each selling shareholder.

We have no knowledge of the intentions of any selling shareholder to
actually sell any of the securities listed under the columns "Shares Offered."

Before Offering After Offering
------------------------------- ------------------------------
Name of Selling Number of Percentage Number of Shares Number of Percentage
Stockholder Shares Owned(1) Owned(2) Offered(3) Shares Owned(4) Owned(4)
----------- --------------- -------- ---------- --------------- --------

Laurus Master Fund, Ltd. (5) ... 1,001,727 4.99% 3,801,237 0 0.0%

Jed Schutz (6) ................. 923,328 4.7% 923,328 0 0.0%

----------
* Less than 1%.

(1) Includes shares of common stock that the selling stockholder has the right
to acquire beneficial ownership of within 60 days.
(2) Based on 19,200,352 shares of common stock issued and outstanding on
December 31, 2004.
(3) This table assumes that each selling stockholder will sell all shares
offered for sale by it under this registration statement. Stockholders are
not required to sell their shares.
(4) Assumes that all shares of common stock registered for resale by this
prospectus have been sold.
(5) Laurus holds (i) warrants to purchase up to 1,380,000 shares of common
stock that are exercisable within 60 days (subject to the following
sentence) at exercise prices ranging from $1.56 to $2.29 per share, (ii) a
$4 million convertible term note that is convertible into 3,200,000 shares
of common stock within 60 days (subject to the following sentence) at a
conversion price of $1.25 per share, and (iii) $1 million minimum
borrowing note that is convertible within 60 days (subject to the
following sentence) into 763,359 shares of common stock at a conversion
price of $1.31 per share. These warrants are not exercisable, and these
notes are not convertible, 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 warrants and conversion of the notes
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 warrants and/or
the notes on 90 days' prior notice to us, or without notice if we are in
default under the notes. Laurus beneficially owns 1,001,727 shares of our
common stock underlying warrants and the notes that are exercisable or
convertible, as the case may be, within 60 days. Details of the
transaction under which Laurus purchased our securities are provided under
"Liquidity and Capital Resources."
(6) Includes 369,331 shares of common stock and 553,997 shares of common stock
which may be acquired upon exercise of warrants.

PLAN OF DISTRIBUTION

We are registering the shares of common stock on behalf of the selling
stockholders. As used in this prospectus, "selling stockholders" includes the
pledges, donees, transferees or others who may later hold the selling
stockholders' interests. We have agreed to pay the costs and fees of registering
the shares, but the selling stockholders will pay any brokerage commissions,
discounts or other expenses relating to the sale of the shares, including
attorneys' fees.

The stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The stockholders may use any one or more of the following
methods when selling shares:

o ordinary brokerage transactions and transactions in which the broker
dealer solicits purchasers;

o block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction;

o purchases by a broker-dealer as principal and resale by the broker
dealer for its account;

o an exchange distribution in accordance with the rules of the
applicable exchange;

o privately negotiated transactions;

o settlement of short sales;

o broker-dealers may agree with the stockholders to sell a specified
number of such shares at a stipulated price per share;

o a combination of any such methods of sale; and

o any other method permitted pursuant to applicable law.

The stockholders may also sell shares under Rule 144 under the Securities
Act, if available, rather than under this prospectus.

Broker-dealers engaged by the stockholders may arrange for other brokers
dealers to participate in sales. Broker-dealers may receive commissions or
discounts from the stockholders (or, if any broker-dealer acts as agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated. The
stockholders do not expect these commissions and discounts to exceed what is
customary in the types of transactions involved.

The stockholders may from time to time pledge or grant a security interest
in some or all of the shares of common stock owned by them and, if they default
in the performance of their secured obligations, the pledgees or secured parties
may offer and sell the shares of common stock from time to time under this
prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or
other applicable provision of the Securities Act of 1933 amending the list of
stockholders to include the pledgee, transferee or other successors in interest
as stockholders under this prospectus.

The stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be "underwriters" within the meaning of the
Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act.

The Company is required to pay all fees and expenses incident to the
registration of the shares. The Company has agreed to indemnify the stockholders
against certain losses, claims, damages and liabilities, including liabilities
under the Securities Act.

DESCRIPTION OF SECURITIES

Our authorized capital stock consists of 31,000,000 shares, consisting of
30,000,000 shares of common stock, par value $0.01 per share, and 1,000,000
shares of preferred stock, par value $0.01 per share. Our board of directors may
designate the rights and preferences of one or more series of preferred stock.
Preferred stock could be used, under certain circumstances, as a way to
discourage, delay or prevent a takeover of the Company. See "Anti-Takeover
Provisions." As of December 31, 2004, we had 19,200,352 shares of common stock
issued and outstanding and no shares of preferred stock outstanding.

Common Stock

Under our Certificate of Incorporation, shares of our common stock are
identical in all respects, and each share entitles the holder to the same rights
and privileges as are enjoyed by other holders and is subject to the same
qualifications, limitations and restrictions as apply to other shares.

Holders of our common stock are entitled to one vote for each share held
of record on all matters submitted to a vote of the stockholders. Holders of our
common stock do not have cumulative voting rights. Accordingly, subject to the
voting rights of holders of any preferred stock that may be issued, holders of a
plurality of our common stock present at a meeting at which a quorum is present
are able to elect all of the directors eligible for election. The holders of a
majority of the voting power of our issued and outstanding capital stock
constitutes a quorum.

The holders of our common stock are entitled to dividends when and if
declared by our board of directors from legally available funds. The holders of
our common stock are also entitled to share pro rata in any distribution to
stockholders upon the Company's liquidation or dissolution.

None of the shares of our common stock:

o have preemptive rights;

o are redeemable;

o are subject to assessments or further calls;

o have conversion rights; or

o have sinking fund provisions.

Preferred Stock

Our Board of Directors may, without further action of our stockholders,
issue up to 1,000,000 shares of preferred stock in one or more classes and one
or more series and fix the number of shares constituting any such class or
series. The Board of Directors may fix the rights and preferences of any such
class or series, including dividend rights, dividend rates, conversion rights,
voting rights, terms of redemption (including sinking fund provisions), maturity
dates, redemption prices and liquidation preferences. The rights of the holders
of common stock will be subject to, and may be adversely affected by, the rights
of holders of any Preferred Stock that may be issued in the future. Issuance of
Preferred Stock could have the effect of making it more difficult for a third
party to acquire, or of discouraging a third party from acquiring, a majority of
the outstanding voting stock of our company. There are currently no shares of
Preferred Stock outstanding.

Anti-Takeover Provisions

Certain provisions, described below, of our Certificate of Incorporation
and By-Laws, and Section 203 of the General Corporation Law of the State of
Delaware (discussed below), could have the effect, either alone or in
combination with each other, of delaying, deferring or preventing a change in
control of our company.

Our By-Laws provide that special meetings of stockholders may be called
only by the our Board of Directors, our Chairman of the Board, our President or
the holders of at least 10% of the shares entitled to vote at such a meeting.
Moreover, the business permitted to be conducted at any meeting of stockholders
is limited to matters relating to the purpose or purposes stated in the notice
of meeting and to matters brought before the meeting by the Board of Directors
or the presiding officer of the meeting. Advance notice of stockholder
nominations for directors and any other stockholder proposals to be brought
before meetings of stockholders is required to be given in writing to our
Secretary within the time periods and following the procedures set forth in our
By-Laws.

Our Certificate of Incorporation includes a provision eliminating the
liability of its directors to our company or to our stockholders for monetary
damages for breaches of fiduciary duty by such directors, to the extent
permitted by Delaware law. In addition, the Certificate of Incorporation
contains provisions providing for the indemnification of our officers and
directors to the maximum extent permitted by Delaware law from expenses,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such persons by reason of their being officers or directors. Our By-Laws
provide that our directors may be removed, with or without cause, only with the
vote of the holders of at least 66-2/3% of the shares of our capital stock
issued and outstanding and entitled to vote at an election of directors, and
provides that any director elected by a particular class or series of stock may
be removed without cause only by vote of the holders of a majority of the
outstanding shares of such class or series. These provisions could have the
effect of delaying a change in control of our company even if the holders of a
majority (but less than 66-2/3%) of our voting securities desire such a change.

Our By-Laws require a vote of the holders of at least 66-2/3% of the
shares our capital stock issued and outstanding and entitled to vote in order to
alter, amend or repeal, or make any new By-Laws inconsistent with, Article I
(governing certain rights of our stockholders, including the rights to call
meetings of stockholders and to make stockholder proposals at meetings) and
Article II (governing the activities of our directors, including the removal of
members of the Board). These supermajority voting provisions for changes by
stockholders affecting Articles I or II of the By-Laws do not affect the ability
of our Board of Directors to amend either of these sections.

Section 203 of Delaware General Corporation Law

We are subject to Section 203 of the General Corporation Law of the State
of Delaware ("Section 203"), which generally prohibits any Delaware corporation
that has a class of securities listed on a national securities exchange or more
than 2,000 stockholders of record from engaging in a "business combination" with
an "interested stockholder" for a period of three years after the date of the
transaction in which the person becomes an interested stockholder, unless either
(i) the interested stockholder obtains the approval of the Board of Directors
prior to becoming an interested stockholder, (ii) the interested stockholder
owned 85% of the outstanding voting stock of the corporation (excluding shares
held by certain affiliates of the corporation) at the time he became an
interested stockholder or (iii) the business combination is approved by both the
Board of Directors and the holders of two-thirds of the outstanding voting stock
of the corporation (excluding shares held by the interested stockholder), voting
at an annual or special meeting of the stockholders and not acting by written
consent. An "interested stockholder" generally is a person who, together with
affiliates and associates, owns (or at any time within the prior three years did
own) 15% or more of the corporation's outstanding voting stock. A "business
combination" includes mergers, consolidations, stock sales, asset sales and
other transactions involving the corporation or any direct or indirect
majority-owned subsidiary of the corporation that results in a financial benefit
to the interested stockholder.

This need to acquire consent of our Board of Directors and/or stockholders
for Section 203 purposes imposes a substantial burden on a potential acquiror
and could therefore act as an anti-takeover device.

Transfer Agent

The transfer agent for our common stock is American Stock Transfer & Trust
Company, located at 59 Maiden Lane, Plaza Level, New York, NY 10038. American
Stock Transfer & Trust Company's telephone number is (800) 937-5449.

COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

Our certificate of incorporation provides that we shall indemnify our
directors and officers to the fullest extent permitted by Delaware law and that
none of our directors will be personally liable to our company or our
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability:

o for any breach of the director's duty of loyalty to our Company or
our stockholders;

o for acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of the law;

o under section 174 of the Delaware General Corporation Law for the
unlawful payment of dividends; or

o for any transaction from which the director derives an improper
personal benefit.

These provisions require us to indemnify our directors and officers unless
restricted by Delaware law and eliminate our rights and those of our
stockholders to recover monetary damages from a director for breach of his
fiduciary duty of care as a director except in the situations described above.
The limitations summarized above, however, do not affect our ability or that of
our stockholders to seek non-monetary remedies, such as an injunction or
rescission, against a director for breach of his fiduciary duty.

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to our directors, officers and controlling persons pursuant
to the foregoing provisions, we have been advised that in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable.

LEGAL MATTERS

The validity of the shares of common stock being offered hereby will be
passed upon for us by Morse, Barnes-Brown & Pendleton, P.C., Waltham,
Massachusetts.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and current reports and other information with
the SEC. You may read and copy any reports, statements or other information we
file at the SEC's public reference rooms in Washington D.C., New York, New York
and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our filings are also available to the
public from commercial document retrieval services and at the web site
maintained by the SEC at http://www.sec.gov.

We have filed a registration statement on Form SB-2 under the Securities
Act with the SEC covering the common stock to be offered by the selling
stockholders. As permitted by the rules and regulations of the SEC, this
document does not contain all information set forth in the registration
statement and exhibits thereto, all of which are available for inspection as set
forth above. For further information, please refer to the registration
statement, including the exhibits thereto. Statements contained in this document
relating to the contents of any contract or other document referred to herein
are not necessarily complete, and reference is made to the copy of that contract
or other document filed as an exhibit to the registration statement or other
document, and each statement of this type is qualified in all respects by that
reference.

No person is authorized to give any information or make any representation
not contained in this document. You should not rely on any information provided
to you that is not contained in this document. This prospectus does not
constitute an offer to sell or a solicitation of an offer to purchase the
securities described herein in any jurisdiction in which, or to any person to
whom, it is unlawful to make the offer or solicitation. Neither the delivery of
this document nor any distribution of shares of common stock made hereunder
shall, under any circumstances, create any implication that there has not been
any change in our affairs as of any time subsequent to the date hereof.

INDEX TO FINANCIAL STATEMENTS

Page
----

Report of Independent Registered Public Accounting Firm F-2

Consolidated Balance Sheets as of September 30, 2004 and 2003 F-3

Consolidated Statements of Operations for the Years Ended
September 30, 2004 and 2003 F-4

Consolidated Statements of Changes in Stockholders' Equity for the
Years Ended September 30, 2004 and 2003 F-5

Consolidated Statements of Cash Flows for the Years Ended
September 30, 2004 and 2003 F-6

Notes to Consolidated Financial Statements for the Years Ended
September 30, 2004 and 2003 F-7

F-1

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
GreenMan Technologies, Inc.
Lynnfield, Massachusetts

We have audited the accompanying consolidated balance sheets of GreenMan
Technologies, Inc. and subsidiaries as of September 30, 2004 and 2003 and the
related consolidated statements of operations, changes in stockholders' equity
and cash flows for the years then ended. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of GreenMan Technologies, Inc.
and subsidiaries as of September 30, 2004 and 2003 and the results of their
operations and their cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.

As discussed in Note 1 to the financial statements, the Company has
continued to incur substantial losses from operations and has a working capital
deficiency of $3,522,130 at September 30, 2004. This raises substantial doubt
about the Company's ability to continue as a going concern. Management's plans
in regard to these matters are also described in Note 1. The accompanying
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

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

Boston, Massachusetts
December 27, 2004

F-2

GreenMan Technologies, Inc.
Consolidated Balance Sheets

September 30, September 30,
2004 2003
------------ ------------

ASSETS
Current assets:
Cash and cash equivalents ................................................ $ 509,787 $ 990,745
Accounts receivable, trade, less allowance for doubtful accounts of
$187,559 and $148,031 as of September 30, 2004 and September 30, 2003 .. 4,383,935 3,368,435
Insurance claim receivable ............................................... -- 634,172
Note receivable officers ................................................. -- 179,172
Product inventory ........................................................ 667,839 112,419
Other current assets ..................................................... 1,365,594 1,119,872
------------ ------------
Total current assets ................................................. 6,927,155 6,404,815
------------ ------------
Property, plant and equipment, net ......................................... 11,516,253 11,249,706
------------ ------------
Other assets:
Deferred loan costs ...................................................... 626,233 221,931
Goodwill, net ............................................................ 3,533,894 3,413,894
Customer relationship intangibles, net ................................... 253,725 234,875
Deferred tax asset ....................................................... 270,000 270,000
Other .................................................................... 494,496 299,699
------------ ------------
Total other assets ................................................... 5,178,348 4,440,399
------------ ------------
$ 23,621,756 $ 22,094,920
============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable, current ................................................... $ 1,177,390 $ 2,733,475
Notes payable, line of credit ............................................ 500,000 1,015,188
Convertible notes payable, current ....................................... 1,270,929 --
Convertible notes payable, line of credit ................................ 1,814,042 --
Accounts payable ......................................................... 4,158,492 4,350,643
Accrued expenses, other .................................................. 1,225,455 1,384,652
Notes payable related parties, current ................................... -- 520,000
Obligations under capital leases, current ................................ 302,977 423,228
------------ ------------
Total current liabilities ............................................ 10,449,285 10,427,186
Notes payable, related parties, non-current portion ...................... 699,320 975,000
Notes payable, non-current portion ....................................... 3,358,147 5,726,958
Convertible notes payable, non-current portion ........................... 2,434,205 --
Obligations under capital leases, non-current portion .................... 2,874,885 1,986,828
Deferred gain on sale leaseback transaction .............................. 419,115 --
------------ ------------
Total liabilities .................................................... 20,234,957 19,115,972
------------ ------------

Stockholders' equity:
Preferred stock, $1.00 par value, 1,000,000 shares authorized, none
outstanding ............................................................ -- --
Common stock, $.01 par value, 30,000,000 shares authorized,
19,072,963 shares and 16,061,939 shares issued and outstanding at
September 30, 2004 and 2003 ............................................ 190,729 160,619
Additional paid-in capital ............................................... 31,755,384 28,778,002
Accumulated deficit ...................................................... (28,559,314) (25,914,673)
Notes receivable, common stock ........................................... -- (45,000)
------------ ------------
Total stockholders' equity ........................................... 3,386,799 2,978,948
------------ ------------
$ 23,621,756 $ 22,094,920
============ ============

See accompanying notes to consolidated financial statements.

F-3

GreenMan Technologies, Inc.
Consolidated Statements of Operations

Years Ended September 30,
2004 2003
------------ ------------

Net sales .................................................. $ 30,777,182 $ 29,679,992
Cost of sales .............................................. 27,060,646 25,702,011
------------ ------------
Gross profit ............................................... 3,716,536 3,977,981
Operating expenses:
Selling, general and administrative ..................... 4,679,263 5,434,270
Impairment loss ......................................... -- 261,278
------------ ------------
4,679,263 5,695,548
------------ ------------
Operating loss ............................................. (962,727) (1,717,567)
------------ ------------
Other income (expense):
Interest and financing costs, net ....................... (1,859,416) (1,386,084)
Casualty income, net .................................... 202,813 431,594
Other, net .............................................. (20,027) (130,456)
Loss on disposal of assets, net ......................... (5,284) (89,480)
------------ ------------
Other (expense), net ................................. (1,681,914) (1,174,426)
------------ ------------
Net loss before income taxes ............................... (2,644,641) (2,891,993)
Benefit (provision) for income taxes ....................... -- (550)
------------ ------------
Net loss ................................................... $ (2,644,641) $ (2,892,543)
============ ============

Net loss per share - basic and diluted ..................... $ (0.15) $ (0.18)
============ ============
Weighted average shares outstanding - basic and diluted .... 17,173,421 15,794,634
============ ============
Weighted average shares outstanding - diluted .............. 17,173,421 15,794,634
============ ============

See accompanying notes to consolidated financial statements.

F-4

GreenMan Technologies, Inc.
Consolidated Statements of Changes in Stockholders' Equity
Years Ended September 30, 2004 and 2003

Notes
Additional Receivable
Common Stock Paid In Accumulated Common
Shares Amount Capital Deficit Stock Total
---------- --------- ------------ ------------- --------- -----------

Balance, September 30, 2002 ................ 15,654,665 $ 156,547 $ 28,473,710 $(23,022,130) $(45,000) $ 5,563,127
Common stock issued upon exercise of
options and warrants .................... 279,106 2,791 125,573 -- -- 128,364
Sale of common stock ....................... 128,168 1,281 178,719 -- -- 180,000
Net loss for the year ended
September 30, 2003 ...................... -- -- -- (2,892,543) -- (2,892,543)
---------- --------- ------------ ------------ -------- -----------
Balance, September 30, 2003 ................ 16,061,939 $ 160,619 $ 28,778,002 $(25,914,673) $(45,000) $ 2,978,948
Beneficial conversion discount on
convertible notes payable ............... -- -- 218,226 -- -- 218,226
Common stock issued upon exercise of
options and warrants .................... 252,666 2,526 147,909 -- -- 150,435
Common stock issued upon conversion
of notes payable and accrued interest ... 1,093,612 10,936 926,128 -- -- 937,064
Repayment of notes receivable, common
stock and accrued interest .............. (36,717) (367) (43,881) -- 45,000 752
Common stock issued in connection with
lease buyout ............................ 50,000 500 43,500 -- -- 44,000
Common stock issued in connection with
private placement ....................... 1,594,211 15,942 1,482,166 -- -- 1,498,108
Common stock and warrants issued for
investment banking services rendered .... 57,252 573 103,267 -- -- 103,840
Warrants issued with convertible debt ...... -- -- 100,067 -- -- 100,067
Net loss for the year ended
September 30, 2004 ...................... -- -- -- (2,644,641) -- (2,644,641)
---------- --------- ------------ ------------ -------- -----------
Balance, September 30, 2004 ................ 19,072,963 $ 190,729 $ 31,755,384 $(28,559,314) $ -- $ 3,386,799
========== ========= ============ ============ ======== ===========

See accompanying notes to consolidated financial statements.

F-5

GreenMan Technologies, Inc.
Consolidated Statements of Cash Flows

Years Ended September 30,
2004 2003
----------- -----------

Cash flows from operating activities:
Net loss ........................................................................ $(2,644,641) $(2,892,543)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation .................................................................... 2,210,293 2,177,673
Loss on disposal of property, plant and equipment ............................... 5,284 89,480
Casualty loss ................................................................... -- 153,719
Amortization .................................................................... 469,821 94,157
Impairment loss ................................................................. -- 261,278
Decrease (increase) in assets:
Accounts receivable .......................................................... (1,015,500) 704,100
Insurance receivable ......................................................... 634,172 (634,172)
Product inventory ............................................................ (555,420) 21,111
Other current assets ......................................................... (245,722) 32,051
Increase (decrease) in liabilities:
Accounts payable ............................................................. (192,151) 1,773,996
Accrued expenses ............................................................. (159,197) 180,918
----------- -----------
Net cash (used for ) provided by operating activities ..................... (1,493,061) 1,961,768
----------- -----------
Cash flows from investing activities:
Purchase of property and equipment .............................................. (1,649,264) (3,653,257)
Increase to construction work in progress ....................................... -- 848,515
Increase in notes receivable, officer ........................................... (7,848) (13,288)
Proceeds on sale of property and equipment ...................................... 1,444,580 250,000
Repayment of note receivable .................................................... -- 200,000
Increase in other assets ........................................................ (201,584) (154,466)
----------- -----------
Net cash used for investing activities ..................................... (414,116) (2,522,496)
----------- -----------
Cash flows from financing activities:
(Increase) in deferred financing costs .......................................... (624,910) (12,948)
Net advances (repayments) under line of credit ................................. 1,469,978 (97,484)
Proceeds from notes payable ..................................................... 507,131 1,773,682
Proceeds from notes payable, related parties .................................... 575,000 920,000
Repayment of notes payable ...................................................... (4,726,894) (1,733,696)
Proceeds from convertible notes payable ......................................... 4,060,000 --
Principal payments on obligations under capital leases .......................... (632,194) (386,942)
Cash received upon exercise of stock options and warrants ....................... 7,800 128,364
Net proceeds on the sale of common stock ........................................ 790,308 180,000
----------- -----------
Net cash provided by financing activities .................................. 1,426,219 770,976
----------- -----------
Net (decrease) increase in cash and cash equivalents ............................... (480,958) 210,248
Cash and cash equivalents at beginning of year ..................................... 990,745 780,497
----------- -----------
Cash and cash equivalents at end of year ........................................... $ 509,787 $ 990,745
=========== ===========
Supplemental cash flow information:
Machinery and equipment acquired under capital leases ............................ $ 1,400,000 $ 275,908
Common stock issued upon conversion of convertible notes
payable and accrued interest ................................................... 937,064 --
Common stock issued upon conversion of notes payable and
accrued interest in connection with private placement .......................... 707,800 --
Common stock issued upon exercise of stock options applied
to notes payable ............................................................... 142,635 --
Common stock issued in connection with lease buyout .............................. 44,000 --
Notes receivable, officer applied against notes payable,
related party and accrued interest ............................................. 163,000 --
Common stock received in payoff of subscription notes
receivable, officer ............................................................ 44,248 --
Common stock issued for investment banking services .............................. 75,000 --
Interest paid .................................................................... 1,509,446 1,329,337
Taxes paid ....................................................................... -- 550

See accompanying notes to consolidated financial statements.

F-6

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 and majority-owned subsidiaries. All
significant intercompany accounts and transactions have been eliminated in
consolidation.

Nature of Operations, Risks, and Uncertainties

GreenMan Technologies, Inc. (together with its subsidiaries "we", "us" or
"our") was originally founded in 1992 and has been operated as a Delaware
corporation since 1995. Today, we comprise six operating locations that collect,
process and market scrap tires in whole, shredded or granular form. We are
headquartered in Lynnfield, Massachusetts and currently operate tire processing
operations in California, Georgia, Iowa, Minnesota, Tennessee and Wisconsin and
operate under exclusive agreements to supply whole tires used as alternative
fuel to cement kilns located in Alabama, Florida, Georgia, Illinois, Missouri,
Tennessee and Texas.

The financial statements have been prepared assuming we will continue as a
going concern. We have incurred substantial losses from operations, and have a
working capital deficiency of $3,522,130 at September 30, 2004. These factors
raise substantial doubt about our ability to continue as a going concern. Our
liquidity had been significantly and adversely affected since our primary source
of working capital financing and long term debt, Southern Pacific Bank and its
wholly owned subsidiary Coast Business Credit, were closed by the Commissioner
of Financial Institutions of the State of California in February 2003. In
particular, we have had to significantly slow down or delay the implementation
of several growth initiatives, including establishing a new high volume tire
processing facility in Tennessee, shredding and screening upgrades in Georgia
and Minnesota, and the installation of our waste wire processing equipment in
Minnesota. These conditions have caused us to incur both significant expenses in
the short-term and have limitations on our ability to grow in the longer-term.

Despite these challenges during the past fifteen months, we invested over
$3 million in new equipment to increase processing capacity at our Iowa,
Minnesota, Georgia and Tennessee locations which will allow us to increase our
overall revenue with no further capital investment. We have identified, and are
currently selling product into several new, higher-value markets as evidenced by
a 13% increase in end product revenue during the current year despite the fact
our Georgia waste wire processing equipment has been inoperable since April
2003. We estimate that during the year ended September 30, 2004, reduced end
product revenue and excess waste disposal costs of over $1 million were
associated with the impact of a March 31, 2003 fire. In November 2004, all
previously damaged equipment was re-installed and became operational. We
continue to experience strong demand for our end products and remain confident
in our ability to continue to grow our revenue base. In addition, we have
reconfigured our Wisconsin location to substantially reduce operating costs and
maximize our return on assets and as of September 30, 2004 our efforts have
resulted in a $385,000 reduction in that facility's year-to-date expenses
compared to the same period last year. The reconfiguration was completed during
the first quarter of fiscal 2004. Additionally, management continues to
negotiate more favorable tipping fees with kiln relationships in several markets
with the ultimate goal of substantially reducing these fees from current levels.

We understand that our continued existence is dependent on our ability to
achieve profitable status on a sustainable basis. and have implemented and/or
are in the process of implementing the following actions:

A. Refinancing of Our Credit Facility

B. Private Placement of Investment Units

F-7

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

1. Summary of Significant Accounting Policies - (Continued)

C. Related Party Notes Payable

See the discussion of certain notes payable to related parties at Note 9
"Notes Payable - Related Parties".

D. Convertible Note Payable

In December 2003, we entered into a note purchase agreement with an
accredited investor and, pursuant thereto, we issued a convertible note payable
(the "Note") in the aggregate principal amount of $375,000 and bearing interest
at 10%, due December 22, 2004. The note and accrued interest of $11,854 was
converted on June 24, 2004 into 369,331 shares of common stock and we issued
warrants to purchase 553,997 shares of our common stock. (See Note 8).

E. Sale and Leaseback of Real Estate

During March 2004, our Minnesota subsidiary sold all of its land and
buildings to an entity co-owned by an employee for $1,400,000, realizing a gain
of $437,337 which has been recorded as unearned income and will be recognized as
income ratably over the term of the lease. Simultaneous with the sale, we
entered into an agreement to lease property back. We used $875,000 of the
proceeds to repay an existing obligation to Bremer Business Finance. (See Note
6).

F. Tennessee Facility

We initially earmarked approximately $1 million of proceeds from the
Laurus credit facility to purchase necessary shredding equipment for our
Tennessee facility. In August 2004, we used $350,000 of the proceeds as a "good
faith" deposit with a third party towards the acquisition of certain processing
equipment that would be required in Tennessee. In December 2004, we executed a
Letter of Intent with the same third party to lease certain pieces of tire
processing equipment which will be utilized in Tennessee and agreed to apply the
$350,000 to preparation and moving of the equipment to be leased. Due to delays
in identifying the appropriate remaining equipment for Tennessee, we reallocated
approximately $650,000 of the proceeds to be used to re-establish our Georgia
waste wire processing equipment line in November 2004 as well as support the
limited Tennessee operation during this period. We are currently evaluating
several alternatives which will allow us to commence operations in Tennessee
during the second quarter of fiscal 2005. When the Tennessee facility is fully
operational, we estimate the cost savings realized by processing
Tennessee-sourced tires locally instead of transporting them to Georgia should
exceed $80,000 per month. No assurance can be given, however, that we will be
able to open this facility on a fully operational basis in a timely manner.

The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.

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, the
value of goodwill and other intangible assets, the valuation reserve on deferred
taxes 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,
2004.

Cash Equivalents

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

Accounts Receivable

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

Product Inventory

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

F-8

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

1. Summary of Significant Accounting Policies - (Continued)

Property, Plant and Equipment

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

Deferred Loan Costs

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

Revenue Recognition

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

Income Taxes

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

Stock-Based Compensation

Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation", encourages all entities to adopt a fair value based
method of accounting for employee stock compensation plans, whereby compensation
cost is measured at the grant date based on the value of the award and is
recognized over the service period, which is usually the vesting period.
However, it also allows an entity to continue to measure compensation cost of
those plans using the intrinsic value based method of accounting prescribed by
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees", whereby compensation cost is the excess, if any, of the quoted
market price of the stock at the grant date (or other measurement date) over the
amount an employee must pay to acquire the stock. Stock options issued under our
stock option plans generally have no intrinsic value at the grant date, and
under Accounting Principles Board Opinion No. 25 no compensation cost is
recognized for them. We apply Accounting Principles Board Opinion No. 25 and
related interpretations in accounting for stock options issued to our employees
and directors. Had the compensation cost for the stock options issued to our
employees and directors been determined based on the fair value at the grant
dates consistent with Statement of Financial Accounting Standards No. 123, the
net loss and net loss per share would have been adjusted to the pro forma
amounts indicated below:

Year Ended Year Ended
September 30, 2004 September 30, 2003
------------------ ------------------

Net loss as reported ............................ $(2,644,641) $(2,892,543)
Add: Compensation recognized under APB No.25 .... -- --
Less: Compensation recognized under FAS 123 ..... (81,306) (148,769)
----------- -----------
Pro forma net loss .............................. $(2,725,947) $(3,041,312)
=========== ===========

Net loss per share:
Basic and diluted - as reported ............. $ (0.15) $ (0.18)
=========== ===========
Basic and diluted - pro forma ............... $ (0.16) $ (0.19)
=========== ===========

F-9

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

1. Summary of Significant Accounting Policies - (Continued)

The fair value of each option grant during the year ended September 30,
2004 under the 2004 Stock Option Plan and the 1996 Non-Employee Director Stock
Option Plan is estimated on the date of grant using the Black-Scholes
option-pricing model with the following weighted average assumptions; dividend
yields of 0%; risk-free interest rates of 4.5%; expected volatility ranging from
44% to 61% and expected lives of 5 years.

The fair value of each option grant during the year ended September 30,
2003 under the 1993 Stock Option Plan and the 1996 Non-Employee Director Stock
Option Plan is estimated on the date of grant using the Black-Scholes
option-pricing model with the following weighted average assumptions; dividend
yields of 0%; risk-free interest rates of 3.0%; expected volatility of 32% and
expected lives of 5 years.

Intangible Assets

In accordance with SFAS No. 142, "Goodwill and Other Intangible Assets",
we review intangibles for impairment annually, or more frequently if an event
occurs or circumstances change that would more likely than not reduce the fair
value of our business enterprise below its carrying value. The impairment test
for goodwill requires us to estimate the fair value of our overall business
enterprise down to the reporting unit level. In addition to goodwill, intangible
assets include customer relationships acquired in current or past business
acquisitions and 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 $13,150 and $12,600. Accumulated amortization was $30,275 at
September 30,2004.

We have elected to perform the required annual impairment test of our
goodwill on the last day of our fiscal third quarter. As of June 30, 2004, we
have concluded that goodwill is not impaired.

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 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.

Net Income Loss Per Share

Basic earnings per share represents income available to common
stockholders divided by the weighted average number of common shares outstanding
during the period. Diluted earnings per share reflects additional common shares
that would have been outstanding if potentially dilutive common shares had been
issued, as well as any adjustment to income that would result from the assumed
conversion. Potential common shares that may be issued by us relate to
outstanding stock options and warrants (determined using the treasury stock
method) and convertible debt. Basic and diluted net loss per share are the same
for the years ended September 30, 2004 and 2003, since the effect of the
inclusion of all outstanding options, warrants and convertible debt would be
anti-dilutive.

New Accounting Pronouncements

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity." This
Statement establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and
equity. It requires that an issuer classify a financial instrument that is
within its scope as a liability (or an asset in some circumstances). Many of
those instruments were previously classified as equity. This Statement is
effective for financial instruments entered into or modified after May 31, 2003,
and otherwise is effective at the beginning of the first interim period
beginning after June 15, 2003, except for mandatorily redeemable financial
instruments of nonpublic entities. The adoption of this statement did not have
any impact on our financial position or results of operations.

F-10

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

1. Summary of Significant Accounting Policies - (Continued)

In December 2003, the Securities and Exchange Commission, ("SEC") issued
Staff Accounting Bulletin ("SAB") No. 104, "Revenue Recognition". SAB No. 104
supersedes SAB No. 101, "Revenue Recognition in Financial Statements." SAB No.
104's primary purpose is to rescind accounting guidance contained in SAB No. 101
related to multiple element revenue arrangements, superseded as a result of the
issuance of Emerging Issues Task Force ("EITF") No. 00-21, "Accounting for
Revenue Arrangements with Multiple Deliverables". Additionally, SAB No. 104
rescinds the SEC's Revenue Recognition in Financial Statements Frequently Asked
Questions and Answers ("FAQ") issued with SAB No. 101 that had been codified in
SEC Topic No. 13, "Revenue Recognition". Selected portions of the FAQ have been
incorporated into SAB No. 104. While the wording of SAB No. 104 has changed to
reflect the issuance of EITF No. 00-21, the revenue recognition principles of
SAB No. 101 remain largely unchanged by the issuance of SAB No. 104, which was
effective upon issuance. The adoption of SAB No. 104 did not impact our
consolidated financial statements.

In December 2003, the FASB issued FASB interpretation No. 46R ("FIN 46R"),
"Consolidation of Variable Interest Entities". FIN46R expands upon existing
accounting guidance that addresses when a company should include in its
financial statements the assets, liabilities and activities of another entity. A
variable interest entity is a corporation, partnership, trust or any other legal
structure used for business purposes that either (a) does not have equity in
investments with voting rights or (b) has equity investors that do not provide
sufficient financial resources for the entity to support its activities. FIN 46R
requires a variable interest entity to be consolidated by a company if that
company is subject to a majority of the risk of loss from the variable interest
entity's or is entitled to receive a majority of the entity's residual returns
or both. The adoption of this interpretation did not have any impact on our
financial position or results of operations.

SFAS No. 151, Inventory Costs -- An Amendment of ARB No. 43, Chapter 4 -
This Statement amends the guidance in ARB No. 43, Chapter 4, "Inventory
Pricing", to clarify the accounting for "abnormal amounts" of idle facility
expense, freight, handling costs, and wasted material or spoilage. Before
revision by SFAS No. 151, the guidance that existed in ARB No. 43 stipulated
that these type items may be "so abnormal" that the appropriate accounting
treatment would be to expense these costs as incurred. SFAS No. 151 requires
that these costs be recognized as current-period charges without regard to
whether the "so abnormal" criterion has been met. Additionally, SFAS No. 151
requires that allocation of fixed production overheads to the costs of
conversion be based on the normal capacity of the production facilities. The
adoption of this statement did not have any impact on our financial position or
results of operations.

SFAS No. 123R, Share Based Payment - An Amendment to SFAS Nos. 123 and 95
- This standard includes the following changes to current accounting for share
based payments:

o All companies would be required to recognize compensation expense
for share-based payment arrangements including stock options.

o All companies must recognize the expense in operations and cannot
bury the effects in the financial statement footnotes as currently
allowed. The cost would be recognized over the requisite service
period (generally the vesting period).

o All companies would be required to estimate how many options will
actually vest. The ability under the current rules to assume 100%
vesting and record forfeitures as they occur will not be permitted.

o The ED still requires public companies (including Small Business
filers) to value employee stock awards at fair value on the date of
grant. However, the ED prefers a "lattice model" in lieu of what
most companies use today, the Black-Scholes model, a "closed-form
model."

o Private companies would be required to follow either (a) the fair
value method at grant date consistent with public company
accounting, or (b) the intrinsic value method (the excess, if any,
of the fair value of the stock over the exercise price) at each
reporting date until the option is settled or exercised. The
so-called "minimum value" method (essentially a simplified version
of the Black-Scholes model) currently permitted would no longer be
an acceptable valuation model.

o Stock option awards with graded vesting would be treated as separate
awards for each vesting date. The ability to treat such awards as a
single award, as currently permitted, would longer be allowed. This
would lead to more expense up-front and less in later years.

This standard is effective for small business issuers for the first interim or
annual reporting period that begins after December 15, 2005.

F-11

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

1. Summary of Significant Accounting Policies - (Continued)

EITF Issue 04-1, Accounting for Preexisting Relationships between the
Parties to a Business Combination - When two parties that have a pre-existing
contractual relationship enter into a business combination, questions arise
related to the accounting for this contractual relationship upon consummation of
the business combination. The issues are: (1) whether a consummated business
combination should be evaluated to determine if a pre-existing contractual
relationship between the two parties involved in the business combination has
been settled as a result of that business combination, thereby requiring that
pre-existing contractual relationship to be accounted for separate from the
business combination, (2) if the pre-existing contractual relationship is
determined to be settled and is accounted for separately, how should the
settlement amount be recognized and measured, and (3) how an acquired entity's
intangible asset that arose prior to the business combination in connection with
its contractual right to use the acquirer's existing intangible assets
(recognized or unrecognized) should be treated for accounting purposes by the
acquirer. Consensus was reached at the September 29-30, 2004 meeting and was
ratified by the FASB at the October 13, 2004 meeting.

Comprehensive Income

SFAS No. 130, "Reporting Comprehensive Income", establishes standards for
the reporting and display of comprehensive income and its components in the
financial statements. As of September30, 2004 and 2003, we had no items that
represented other comprehensive income and, therefore , have not included a
schedule of comprehensive income in the consolidated financial statements.

2. Acquisition of Businesses

On July 1, 2004, we acquired certain assets of American Tire Disposal,
Inc. ("ATD") a southern California based company in the business of collecting
and marketing scrap tires for approximately $172,000 in assumed liabilities,
forgiveness of trade payables due to us and cash. We have consolidated ATD's
business into our existing California operations. The acquisition was accounted
for as a purchase in accordance with SFAS No. 141 "Business Combinations" and
accordingly the results of their operations since the date of acquisition are
included in the consolidated financial statements. The total consideration paid
exceeded the fair value of the net assets acquired by $152,000 resulting in the
recognition of $120,000 of goodwill and $32,000 assigned to customer
relationships. Customer relationships are being amortized over an estimated
useful life of 10 years on a straight-line basis and will be evaluated annually.

3. Formation of Joint Venture

During January 2002 GreenMan Technologies of Oklahoma, Inc., our newly
formed wholly-owned subsidiary and Able Tire Company, LLC, a Burleson, Texas
tire processor and collector, formed a joint venture known as Able Tire of
Oklahoma, LLC ("Able Tire of Oklahoma"). Able Tire of Oklahoma collects, shreds
and markets whole tires to the cement industry. GreenMan Technologies of
Oklahoma was the majority owner and had responsibility for finance and
administration while Able Tire Company was responsible for all marketing efforts
and operational management. The results of operations of Able Tire of Oklahoma
are included in the consolidated financial statements since January 2002 until
April 1, 2003.

On April 1, 2003 we sold our majority interest in Able Tire of Oklahoma to
the minority member for $50,000 and recognized a $71,000 loss on the
transaction, which is included in loss on disposal of assets, net in the
accompanying financial statements.

F-12

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

4. Insurance Claim Receivable

On March 31, 2003, a portion of our Georgia facility and several pieces of
waste wire processing equipment were damaged by a fire. In December 2003, we
reached a settlement agreement with our insurance carrier amounting to
$1,029,885 of which $821,172 was applicable to losses incurred during fiscal
2003. The settlement amount, net of direct costs incurred, resulted in net
casualty income of $112,082 and $431,594 during the fiscal years ended September
30, 2004 and 2003, respectively and is classified as other income in the
accompanying statement of operations. In December 2003 all remaining amounts
associated with this settlement were received. In fiscal 2004, we also received
an unrelated insurance settlement for damaged product of approximately $90,000
which is also included in other income.

5. Notes Receivable, Officers

In January 1998 we advanced $104,000 to an officer under an 8.5% secured
promissory note with both principal and interest due January 2001. This note was
amended on September 30, 2000 to extend the maturity until April 15, 2002
(subsequently extended to April 15, 2004) and increase the interest rate to
9.5%. On April 30, 2004 the balance of $163,000, including interest, was applied
to offset obligations under our $400,000 September 30, 2003 note payable due to
the officer. (See Note 9).

In January 1999, we advanced two officers $55,000, in aggregate, under
8.5% secured promissory notes with both principal and interest due January 2002
(subsequently extended to January 2004). The proceeds were used to participate
in a private placement of our common stock and the loans are secured by 191,637
shares of common stock owned by the two officers. In June 2002, the two officers
repaid $5,000 each toward their respective then outstanding balances. On March
31, 2004, one officer agreed to apply his then outstanding balance of $24,000
including interest against obligations under our $400,000 September 30, 2003
note payable due to the officer. (See Note 9). On May 11, 2004 the other officer
sold 36,717 shares of common stock valued at $44,248 back to us in full
settlement of all amounts due under his note including interest. We subsequently
cancelled these shares, which reduced our total shares issued and outstanding.

6. Property, Plant and Equipment

Property, plant and equipment consists of the following:

September 30, September 30, Estimated
2004 2003 Useful Lives
------------- ------------- -------------

Land ........................................... $ 167,981 $ 504,346
Buildings and improvements ..................... 3,595,104 2,704,693 10 - 20 years
Machinery and equipment ........................ 9,716,896 9,526,045 5 - 10 years
Furniture and fixtures ......................... 277,146 284,484 3 - 5 years
Motor vehicles ................................. 6,087,959 5,904,050 3 - 10 years
Construction in process ........................ 891,267 --
------------ ------------
20,736,353 18,923,618
Less accumulated deprecation and amortization .. (9,220,100) (7,673,912)
------------ ------------
Property, plant and equipment, net ............. $ 11,516,253 $ 11,249,706
============ ============

As a result of new equipment installations at our Georgia facility and the
reconfiguration of our Wisconsin facility, management determined that the
carrying value of the idled equipment exceeded its estimated fair value based on
replacement cost of similar equipment. Accordingly, we recorded an impairment
loss amounting to $261,278 during the fiscal year ended September 30, 2003.
During fiscal 2004, we installed and utilized some of this equipment at other
GreenMan locations and sold off the excess equipment.

F-13

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

6. 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 property back for a term of 12
years at an annual rent of $195,000, increasing to $227,460 over the term of the
lease. The gain will be recognized as income ratably over the term of the lease.
The lease has been classified as a capital lease, and provides for two
additional 4-year extensions. We used $875,000 of the proceeds to repay an
existing obligation to Bremer Business Finance.

In April 2004, our Wisconsin subsidiary reached an agreement with the
lessor of certain processing equipment to buy-out the remaining term of the
lease. The lessor agreed to accept several pieces of idle equipment, 50,000
unregistered shares of our common stock (valued at $44,000), and cash, valued in
the aggregate at approximately $180,000, in full settlement of our capital lease
obligation with a carrying value of approximately $192,000 at March 31, 2004. We
recognized a gain of approximately $12,000 in connection with this transaction
during the quarter ended June 30, 2004.

Depreciation and amortization expense for the fiscal years ended September
30, 2004 and 2003 was $2,210,293 and $2,177,673 respectively.

7. Acquisition Deposit

In August 2004, we executed a non-binding letter of intent and escrow
agreement in connection with a potential business acquisition. Pursuant to the
escrow agreement, we have made a "good faith" payment amounting to $350,000,
which was to be applied toward the purchase price upon completion of the
transaction. On December 8, 2004, we executed a new letter of intent which
superceded the August letter of intent in which we will lease, with an option to
buy, certain pieces of tire processing equipment owned by the third party. The
leases were executed in January 2005 and provide for aggregate monthly payments
of $25,300 per month over terms ranging from 48 to 60 months. In addition, we
were granted an exclusive purchase option to acquire additional operating assets
of the third party if predetermined financial performance criteria are met by
the third party during the subsequent fifteen to twenty four month period after
December 8, 2004. The ultimate purchase price cannot be determined at this time.
In return for the exclusive purchase option, we issued 127,389 shares of our
common stock (valued at $200,000) to the third party. If we exercise our
exclusive purchase option and close a transaction, the value of the shares will
be applied against the purchase price of the assets. If the exclusive purchase
option expires or we decide not to exercise the option, the third party shall
retain a sufficient number of our shares to equal $200,000 (as of the date that
the purchase option expires) and return the balance of such shares of common
stock to us. If at the time the purchase option expires, the value of the shares
is less than $200,000, we will issue a sufficient number of additional shares to
equal $200,000. We have also agreed to use the $350,000 held in escrow to
prepare and move the leased equipment for our use. The $350,000 escrow deposit
is included in other long term assets.

8. Credit Facility/Notes Payable

On May 14, 1999, we issued a $1,100,000 sixty-month note payable to
Cryopolymers Leasing, Inc., bearing interest at 7.75% with monthly payments of
$7,553 and a balloon payment due June 2004. The note was personally guaranteed
by three of our officers and was paid in full on June 30, 2004 with proceeds
from the Laurus Credit Facility.

On May 6, 2002, Republic Services converted $750,000 of the principal
amount of the February 14, 2002 promissory note into 300,000 unregistered shares
of our common stock valued at $750,000. We issued Republic Services a promissory
note for the remaining balance on the February 14, 2002 promissory note in the
principal amount of $743,750 bearing interest at 10% and due in March 2007. As
of June 30, 2004, 13 payments totaling $114,818 were past due in connection with
this note. We received a waiver of default from Republic Services through June
30, 2004 at which time the outstanding principal amounted to $703,125 and as of
September 30, 2004, all past due payments have been made and the promissory note
is current.

First American Credit Facility

On April 4, 2002, our Iowa subsidiary executed a five-year, $1,185,000
secured term note and a one year $300,000 working capital line of credit
(secured with all Iowa assets) with First American Bank ("First American"). The
proceeds of this term note were used in connection with the acquisition of UT
Tire Recyclers, Inc in April 2002.

F-14

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

8. Credit Facility/Notes Payable - (Continued)

On February 13, 2003, our Iowa subsidiary amended its existing term debt
with First American under the terms of a five-year, $1,760,857 secured term
note. The note is payable in sixty monthly installments of $33,425 and is
secured with all Iowa assets. They also renewed their working capital line of
credit which was increased to $500,000. The line of credit has been subsequently
extended to January 20, 2005 and First American temporarily increased the
maximum availability under the line of credit to $650,000 through September 30,
2004. The term note bears interest at 7.5% and the line of credit bears interest
at the prime rate plus 1%.

Coast Business Credit/WAMCO Credit Facility

On January 31, 2001 our Minnesota and Georgia subsidiaries, collectively
secured a $7 million five-year, asset-based credit facility (the "Credit
Facility") from Coast Business Credit ("Coast"), the proceeds of which were used
principally for the purpose of refinancing their existing credit facility.

On February 7, 2003, Southern Pacific Bank ("SPB") and its wholly owned
subsidiary Coast were closed by the Commissioner of Financial Institutions of
the State of California. The Federal Deposit Insurance Company ("FDIC") was
appointed receiver of SPB and its subsidiaries.

On May 16, 2003, we were notified by the FDIC that Waco Asset Management
Co.31, Ltd., ("WAMCO"), an affiliate of First City Financial Company, had
purchased a pool of loans from the FDIC that included our Credit Facility. We
were notified that WAMCO would continue to honor the original terms of the
Credit Facility. On June 30, 2004, all amounts due WAMCO were paid in full with
proceeds from the Laurus Credit Facility and the unamortized deferred financing
charges of $122,927 were charged to interest expense.

Convertible Notes Payable

In December 2003, we entered into a note purchase agreement (the "Note
Agreement") with an accredited investor (the "Holder") and, pursuant thereto, we
issued a convertible note payable (the "Note") in the aggregate principal amount
of $375,000 and bearing interest at 10%, due December 22, 2004. The Note was
convertible at the option of the Holder at any time prior to maturity into
investment units at a price equal to $1.07 per unit with each unit consisting of
one share of unregistered common stock and a warrant to purchase 1.5 shares of
common stock at an exercise price of $1.07 per share, exercisable six months
after issuance for a period of five years from date of issuance.

The terms of the Note Agreement reflected a beneficial conversion feature
amounting to $154,226 calculated at the date of issue of the Note as the
difference between the fair value of the common stock to be received upon
conversion and the proceeds of the Note to be allocated to the common stock
conversion option. The beneficial conversion feature was recorded as a debt
issuance discount and a corresponding credit to paid-in capital, and was being
amortized to interest expense over the term of the Note, or upon conversion. The
note and accrued interest of $18,854 was converted on June 24, 2004 into 369,331
shares of common stock and we issued warrants to purchase 553,997 shares of our
common stock and the remaining unamortized beneficial conversion discount of
approximately $77,000 was charged to interest expense.

Amortization expense for the year ended September 30, 2004 was $154,226.

Laurus Credit Facility

On June 30, 2004, we entered into a $9 million credit facility with Laurus
Master Fund, Ltd., ("Laurus") consisting of a $5 million convertible, revolving
working capital line of credit (the "Line of Credit") and a $4 million
convertible term note (the "Note"). At closing, we borrowed $4 million under the
term loan and $2 million under the line of credit, and used approximately
$1,860,000 of the proceeds to repay the outstanding indebtedness under our
existing credit facility with WAMCO and approximately $1,070,000 to repay in
full the indebtedness due Cryopolymers Leasing. Additional proceeds of the
financing were used to increase working capital and to pay certain costs and
fees associated with this transaction including a $425,000 placement fee paid to
our investment bank.

The Line of Credit has a three-year term. Borrowings bear interest at the
prime rate published in The Wall Street Journal from time to time plus 1.0%
(5.75% at September 30, 2004), and are convertible into shares of our common
stock at the option of Laurus. Except for downward adjustments provided in the
credit facility terms described below, the interest rate shall not be below 5%.
Subject to certain limitations, Laurus will have the right, but not the
obligation, to convert the first $1 million of borrowings under the line of
credit into our common stock at a price of $1.31 (a 10% premium over the 22-day

F-15

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

8. Credit Facility/Notes Payable - (Continued)

trailing average closing price of our common stock on the American Stock
Exchange on June 30, 2004). The conversion price for each subsequent $1 million
of borrowings will be adjusted upward so that the conversion price will always
reflect a 10% premium over the 22-day trailing average closing price computed on
each $1 million increment. The amount we may borrow at any time under the line
of credit is limited to 90% of eligible accounts receivable (90 days or less)
and 50% of eligible finished goods inventory, subject to certain limitations.
The Line of Credit requires us to maintain a minimum borrowing of $1,000,000.

In connection with the Line of Credit, we issued Laurus a warrant to
purchase up to 990,000 shares of our common stock at prices ranging from $1.63
to $2.29. The warrant, valued at $82,731, is immediately exercisable, has a term
of ten years and allows for cashless exercise at the option of Laurus, and does
not contain any "put" provisions. Net proceeds received from advances made under
the line at closing were allocated to the Line of Credit and the warrant based
on their relative fair values resulting in a discount on the Line of Credit
amounting to $186,700 which will be amortized to interest expense over the
three-year term of the borrowing or immediately upon conversion.

The Term Note also has a three-year term and bears interest at the prime
rate published in The Wall Street Journal from time to time plus 1.0% (5.0% at
June 30, 2004), with interest payable monthly. Except for downward adjustments
provided in the credit facility terms described below, the interest rate shall
not be below 5%. Principal will be amortized over the term of the loan,
commencing on November 1, 2004, with minimum monthly principal payments of
$125,000. Laurus has the option to convert some or all of the principal and
interest payments into common stock at a fixed conversion price of $1.25
reflecting a 5% premium over the 22-day trailing average closing price of our
common stock on the American Stock Exchange on June 30, 2004. ("Fixed Conversion
Price"). Subject to certain limitations, regular payments of principal and
interest will be automatically payable in common stock if the 5-day average
closing price of the common stock immediately preceding a payment date is
greater than or equal to 110% of the Fixed Conversion Price.

In connection with the Term Note, we issued Laurus a warrant to purchase
up to 390,000 shares of our common stock at prices ranging from $1.56 to $2.18.
The warrant, valued at $37,161, is immediately exercisable, has a term of ten
years and allows for cashless exercise at the option of Laurus, and does not
contain any "put" provisions.

Net proceeds received from issuance of the Term Note amounted to
$3,788,950 and were allocated to the Term Note and the warrant based on their
relative fair values. The note contained a beneficial conversion feature of
$64,000 at issuance based on the intrinsic value of the shares into which the
note is convertible, and a debt issue discount amounting to $248,200. The
beneficial conversion discount was recorded as paid-in-capital and will be
amortized to interest expense along with the debt discount over the three-year
term of the note or ratably upon any partial conversion.

Total debt issuance costs incurred in connection with securing the Laurus
Credit Facility amounted to approximately $661,000 of deferred financing costs
which will be amortized to interest expense over the three year term.
Additionally, a management fee amounting to $315,000 was paid to Laurus from the
closing proceeds, and was recorded as a debt discount to be amortized to
interest expense over the three year term.

F-16

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

8. Credit Facility/Notes Payable - (Continued)

We have agreed to register for resale under the Securities Act of 1933 the
shares of common stock issuable to Laurus upon conversion of borrowings under
the credit facility and upon exercise of the warrants. Pursuant to this
agreement, we filed a registration statement on Form SB-2 with the Securities
and Exchange Commission on July 30, 2004. This statement has not yet become
effective.

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

Pursuant to the terms of the Laurus notes, we are required to provide
audited financial statements within ninety days of our fiscal yearend and due to
unforeseen delays we provided the financial statements subsequent to the ninety
days. Laurus has agreed to waive any and all defaults resulting from our failure
to file our financial statements timely.

September 30, September 30,
2004 2003
------------- -------------

Notes payable consists of the following at:
Line of credit, First American, secured by all assets of GreenMan
Technologies of Iowa, bearing interest at prime plus 1.0% (5.75% at
September 30, 2004) .......................................................... $ 500,000 $ 450,000
Line of credit, WAMCO, secured by eligible accounts receivable of
GreenMan Technologies of Minnesota and GreenMan Technologies of Georgia,
guaranteed by GreenMan, and bearing interest at prime plus
2.0% ......................................................................... -- 565,188
Term note payable, Republic Services of Georgia, LP, due in monthly
installments of $3,125 plus interest at 10% with the remaining
principal balance due March 2007 ............................................. 656,250 690,625
Term note payable, First American, secured by assets of GreenMan
Technologies of Iowa, due in equal monthly installments of $33,425
including interest at 7.5through February 2008 ............................... 1,220,315 1,578,579
Term note payable, State of Iowa, secured by certain assets of
GreenMan Technologies of Iowa, due in quarterly installments of $8,449
including interest at 1.5% with the remaining principal
balance due November 2012 .................................................... 280,666 310,083
Term note payable, State of Iowa, secured by certain assets of
GreenMan Technologies of Iowa, due in 32 quarterly installments of
$6,920 including interest at 3% through October 2012 ......................... 196,234 --
Term note payable, Sun Country Bank, secured by all assets of
GreenMan Technologies of California, due in monthly installments of
$6,607 including interest at 5.75% with the remaining principal
balance due March 2011 ....................................................... 438,600 493,530
Term note payable, Andrew and Karen Gundrum, secured by real estate
of GreenMan Technologies of Wisconsin, due in monthly installments
of $9,563 for eight months and monthly installments of $2,886
including interest at 8% for sixty months .................................... 292,980 317,788
Term note payable, Cryopolymers Leasing, guaranteed by three
officers, due in monthly installments of $7,553 including interest
at 7.75% with the principal balance due June 2004 ............................ -- 1,072,351
Term note payable, WAMCO, secured by machinery and equipment of
GreenMan Technologies of Minnesota and GreenMan Technologies of
Georgia, guaranteed by GreenMan, due in monthly installments of
$34,067 including interest at prime plus 2.5% ................................ -- 987,934

F-17

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

8. Credit Facility/Notes Payable - (Continued)

September 30, September 30,
2004 2003
------------- -------------

Term note payable, Bremer, secured by real estate of GreenMan
Technologies of Minnesota, due in monthly installments of $10,649 including
interest at prime plus 2.75% for 36 months then prime
plus 2.25% ................................................................... -- 884,747
Term note payable, WAMCO, secured by machinery and equipment acquired
under the machinery and equipment line of credit, guaranteed by
GreenMan, due in monthly installments of $13,283 including interest
at prime plus 2.5% ........................................................... -- 425,541
Other term notes payable and assessments, secured by various
equipment with interest rates ranging from 0% to 11.26% and
requiring monthly installments from $598 to $5,808 ........................... 1,450,492 1,699,255
----------- -----------
5,035,537 9,475,621
Less current portion ........................................................... (1,677,390) (3,748,663)
----------- -----------
Notes payable, non-current portion ........................................... $ 3,358,147 $ 5,726,958
=========== ===========

September 30, September 30,
2004 2003
------------- -------------

Convertible notes payable consists of the following at
Line of credit, Laurus, secured by eligible accounts receivable and
inventory of GreenMan Technologies of Georgia, Minnesota and
Tennessee, and bearing interest at prime plus 1.0% (5.75% at
September 30, 2004) .......................................................... $ 1,814,042 $ --
Term note payable, Laurus, secured by machinery and equipment of
GreenMan Technologies of Georgia, Minnesota and Tennessee, due in
33 monthly installments of $125,000 plus interest at prime plus 1%
(5.75% at September 30, 2004) commencing November 1, 2004 .................... 3,705,134 --
----------- -----------
5,519,176 --
Less current portion ........................................................... (3,084,971) --
----------- -----------
Convertible notes payable, non-current portion ............................... $ 2,434,205 $ --
=========== ===========

The following is a summary of maturities of all notes payable at September 30,
2004:

Years Ending September 30,
--------------------------
2005 ............................... $1,677,390
2006................................ 956,740
2007 ............................... 1,364,271
2008 ............................... 288,423
2009 ............................... 418,288
2010 and thereafter................. 330,425
----------
$5,035,537
==========

The following is a summary of maturities of all convertible notes payable at
September 30, 2004:

Years Ending September 30,
--------------------------
2005 ............................... $3,084,971
2006................................ 1,395,930
2007 ............................... 1,038,275
2008 ............................... --
2009 ............................... --
20010 and thereafter................ --
----------
$5,519,176
==========

Interest expense on the lines of credit and notes payable for the years
ended September 30, 2004 and 2003 amounted to $814,420 and $873,959,
respectively.

9. Notes Payable - Related Party

Notes Payable, Related Party consists of the following:

Convertible Notes Payable - Related Party

One of our directors was owed $300,000 under the terms of an October 1999
private offering of 10% convertible notes and warrants and $75,000 under the
terms of a February 2000 offering of 11% convertible notes and warrants. The
convertible notes originally matured twelve months after issuance and were
payable in cash or unregistered shares of our common stock at a conversion price
of $1.00 per share. In September 2000 and June 2001, the director agreed to
extend the maturity date of each note for an additional twelve months from their
original maturity. In return for the June 2001 extension, we agreed to reduce

F-18

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

9. Notes Payable - Related Party - (Continued)

the conversion price to $.75 per share. In September 2002, the director again
agreed to extend the maturity of each note for an additional twenty-four months
from their extended maturity dates which range from October 2004 to February
2005. The director exercised the warrants in fiscal 2003. (See Note 12).

On February 16, 2004, the director converted both notes, including
$375,000 of principal and $168,210 of accrued interest into 724,281 shares of
our unregistered common stock pursuant to the amended terms noted above.

Note Payable - Related Party

In November 2000, we borrowed $200,000 from the same director who held the
convertible notes referred to above. This unsecured note payable bears interest
at 12% per annum with interest due monthly and the principal due originally in
November 2001. In June 2001, the director agreed to extend the maturity date of
the note for an additional twelve months from its original maturity. In
September 2002, the director agreed to extend the maturity of the note for an
additional twenty-four months or until November 2004. In June 2004, the director
agreed to extend the maturity of this note until the earlier of when all amounts
due under the Laurus credit facility (See Note 8) have been repaid or June 30,
2007.

During the period of June to August 2003, two immediate family members of
an officerloaned 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 the April 2004 private placement of investment
units and each received 113,636 units in these transactions. At September 30,
2004, the remaining balance due on these advances amounted to $400,000.In
addition, the two individuals agreed to extend the maturity of the remaining
balance of these notes until the earlier of when all amounts due under the
Laurus credit facility (See Note 8) have been repaid or June 30, 2007.

In September 2003, an officer loaned us $400,000 under the terms of a
September 30, 2003 unsecured promissory note which bears interest at 12% per
annum with interest due quarterly and the principal due March 31, 2004
(subsequently extended to September 30, 2004). In 2004, the officer applied
approximately $114,000 of the balance due him and accrued interest of
approximately $21,000 to exercise options to purchase 185,000 shares of common
stock. In addition, he agreed to extend the maturity of the remaining balance of
this note until the earlier of when all amount due under the Laurus credit
facility (See Note 8) have been repaid or June 30, 2007. At September 30, 2004,
the remaining balance due on this note amounted to $99,320

On September 30, 2003, our Georgia subsidiary's landlord, loaned us
$100,000 under the terms of a September 30, 2003 unsecured promissory note which
bears interest at 12% per annum with interest due quarterly and the principal
due September 30, 2004. In June 2004, the landlord agreed to invest the entire
$100,000 principal balance of the unsecured promissory note plus accrued
interest of $7,300 into the April 2004 private placement of investment units and
received 121,932 units in this transaction.

In October 2003, one of our officers loaned us $75,000 under the terms of
an October 22, 2003 unsecured promissory note payable which bears interest at
12% per annum with interest due quarterly and the principal due June 30, 2004.
During January and February 2004, the same officer advanced us an additional
$250,000 under substantially similar notes that are also due in June 2004. This
officer agreed to invest all unpaid principal and interest under these notes
amounting to approximately $350,000 into the April 2004 private placement of
units and received 339,806 units in these transactions.

The following is a summary of maturities of all related party notes
payable at September 30, 2004:

Years Ending September 30,
--------------------------
2005 ............................... $ --
2006................................ --
2007................................ 699,320
---------
$ 699,320
=========

Total interest expense for related party notes amounted to $143,727 and
$76,717, for the fiscal years ended September 30, 2004 and 2003, respectively.
Total accrued interest due related parties amounted to $49,820 and $175,754 at
September 30, 2004 and 2003, respectively.

F-19

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

10. 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 $348 to $17,642. Assets acquired under capital leases with an
original cost of $4,411,461 and $3,291,481 and related accumulated amortization
of $1,319,717 and $968,860 are included in property, plant and equipment at
September 30, 2004 and 2003, respectively. Amortization expense for the years
ended September 30, 2004 and 2003 amounted to $350,857 and $403,380
respectively.

In April 2001, our Georgia subsidiary sold and then leased back their
property under a twenty-year lease requiring a monthly rental of $17,642. The
lease can be renewed for four additional five-year periods and provides us an
option to repurchase the land and buildings at fair market value after the
second anniversary of the lease. The lease has been classified as a capital
lease with a value of $1,300,000.

In July 2002, our Minnesota subsidiary entered into a four-year equipment
lease with a company co-owned by an employee for equipment valued at $146,670.
Under the terms of the lease, we are required to pay $4,394 per month rental and
have the ability to purchase the equipment at the end of the lease at
approximately 40% of original value. The lease is classified as a capital lease.

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

The following is a schedule of the future minimum lease payments under the
capital leases together with the present value of net minimum lease payments at
September 30, 2004:

Years Ending
September 30,
-------------
2005 .................................. $ 708,027
2006 .................................. 596,087
2007 .................................. 522,315
2008 .................................. 435,771
2009 .................................. 417,285
2010 and thereafter ................... 4,185,483
-----------
Total minimum lease payments ............. 6,864,968
Less amount representing interest ........ (3,687,106)
-----------
Present value of minimum lease payments .. $ 3,177,862
===========

For the years ended September 30, 2003 and 2002, interest expense on
capital leases amounted to $376,650 and $349,556, respectively.

11. Commitments and Contingencies

Employment Agreements

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

Rental Agreements

Our Iowa subsidiary leases a facility located on approximately 4 acres of
land under a 10-year lease commencing in April 2003 from Maust Asset Management
Company, LLC ("Maust Asset Management"), a company co-owned by one of our
employees . Under the terms of the lease, monthly rental payments of $8,250 are
required for the first five years increasing to $9,000 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.

Our Tennessee subsidiary leases a facility of approximately 26,000 square
feet located on approximately 2 acres of land under a three-year agreement for
$10,222 per month. The lease can be renewed for an additional five-year period
and includes an option to purchase the land and buildings at fair market value
during the term of the lease.

F-20

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

11. Commitments and Contingencies - (Continued)

Our Wisconsin subsidiary previously leased its facility located on
approximately 4 acres of land for monthly rent of $3,600 pursuant to a
three-year lease agreement. During 2003, the lease terminated upon our exercise
of an option to purchase the property.

For the years ended September 30, 2004 and 2003, total rental expense in
connection with all non-cancellable real estate leases amounted to $302,004 and
$299,244 respectively, of which $99,000 and $49,500 was applicable to the
related-party lease in 2004 and 2003, respectively.

We also rent various vehicles and equipment from third parties under
non-cancellable operating leases with monthly rental payments ranging from $263
to $1,620 and with terms ranging from 48 to 84 months. In addition, we rent
several pieces of equipment on a monthly basis from a company co-owned by an
employee. Monthly rent ranges from $321 to $2,800.

For the fiscal years ended September 30, 2004 and 2003, total rent expense
in connection with vehicle and equipment leases amounted to $78,177 and
$195,886, respectively, of which, $15,786 and $147,649 was to related parties.

The total future minimum rental commitment at September 30, 2004 under the
above operating leases and the leases referred to in Note 7 are as follows:

Year ending September 30: Real Estate Equipment Total
----------- ---------- ----------
2005 ..................... $ 315,504 $ 222,913 $ 538,417
2006 ..................... 185,340 320,209 505,549
2007 ..................... 177,840 303,600 481,440
2008 ..................... 154,560 303,600 458,160
2009 ..................... 153,630 246,900 400,530
2010 and thereafter ...... 378,000 86,000 464,000
---------- ---------- ----------
$1,364,874 $1,483,222 $2,848,096
========== ========== ==========

Litigation

There was no pending litigation as of September 30, 2004.

12. Stockholders' Equity

Increase in Authorized Shares of Common Stock

On February 20, 2003, our stockholders approved an amendment to our
Certificate of Incorporation to increase the number of authorized shares of our
common stock from 20,000,000 to 30,000,000.

Private Offering of Common Stock

In February 2002, we commenced a private offering of our common stock in
an effort to raise up to $2,000,000 in gross proceeds (subsequently increased to
$3,000,000 in August 2002). As of September 30, 2003, when the offering
terminated, we had sold 1,458,511 shares of our unregistered common stock to
investors, including existing shareholders, for gross proceeds of $2,133,603.
The investors have been granted limited registration rights to cause us to
register the common stock for resale in the event that we register shares of
common stock for our own account. The investors have agreed not to sell or
transfer the shares for a period of at least 18 months after issuance.

On April 9, 2004, we commenced a private offering of investment units to
accredited investors. Each unit consists of one share of our common stock and a
warrant to purchase 0.5 shares of our common stock. The purchase price of the
units equaled 80% of the average closing bid price of our common stock during
the ten days preceding the date each investor's subscription for units became a
binding commitment. The warrants are exercisable at any time between the ninth
month and the third year after the date of issuance at an exercise price equal
to 150% of the closing bid price of our common stock on the day preceding such
date. In addition, in accordance with American Stock Exchange rules, units
purchased by officers, directors or affiliates were made at 100% of the closing
bid price of our common stock on the day preceding the date such investor's
subscription for units became a binding commitment.

F-21

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

12. Stockholders' Equity - (Continued)

As of June 30, 2004, when the offering was concluded, we had sold
1,594,211 units (1,594,211 shares of our common stock and warrants to purchase
797,105 additional shares of our common stock at prices ranging from $1.56 to
$2.06 per share) to investors, including our directors and existing
shareholders, for gross proceeds of $1,547,800. We used the net proceeds of this
offering to re-establish our Georgia waste wire processing capacity and for
general working capital purposes during the seasonally slower portion of our
fiscal year.

Other Common Stock Transactions

On February 16, 2004, a director converted two convertible notes,
including $375,000 of principal and $168,210 of accrued interest into 724,281
shares of our unregistered common stock (See Note 9).

In April 2004, we issued 50,000 shares of unregistered stock (valued at
$44,000) to the lessor of certain processing equipment leased by our Wisconsin
subsidiary as partial consideration in a lease buy-out transaction.

On June 24, 2004, we issued 369,331 shares of common stock upon the
conversion of a December 23, 2003 note payable in the principal amount of
$375,000 and accrued interest of $18,854 (See Note 8).

On June 30, 2004, we issued 57,252 shares of our unregistered common stock
valued at $75,000 for investment banking services in conjunction with the Laurus
financing (See Note 8).

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.

During the period of December 2002 to September 2003, two former employees
and three directors collectively exercised 69,106 options to purchase
unregistered shares of our common stock at prices ranging from $.38 to $.85 per
share for gross proceeds of $39,304.

During the period of February 2004 to June 2004, two directors and an
officer, collectively exercised options and warrants to purchase 223,538 shares
of unregistered common stock at exercise prices ranging from $0.38 to $0.94 per
share for gross proceeds of $150,435.

Stock options and activity is summarized as follows:

Year Ended Year Ended
September 30, 2004 September 30, 2003
----------------------- ----------------------
Weighted Weighted
Average Average
Exercise Exercise
Shares Price Shares Price
--------- -------- --------- --------

Outstanding at beginning of period 1,983,894 $ .91 2,113,000 $ .90
Granted -- -- -- --
Canceled (90,000) .53 (60,000) 1.17
Exercised (223,538) .67 (69,106) .57
--------- ---------
Outstanding at end of period 1,670,356 .87 1,983,894 .91
========= =========
Exercisable at end of period 1,498,356 .87 1,533,094 .95
========= =========
Reserved for future grants at end of period -- 936,880
========= =========
Weighted average fair value of options
granted during the period $ -- $ --

F-22

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

12. Stockholders' Equity - (Continued)

Information pertaining to options outstanding under the plan at September
30, 2004 is as follows:

Options Outstanding Options Exercisable
-------------------------------------- ----------------------
Weighted
Average Weighted Weighted
Remaining Average Average
Exercise Number Contractual Exercise Number Exercise
Prices Outstanding Life Price Exercisable Price
------ ------------ ----------- -------- ------------ --------

$ .38 - .53 540,462 5.8 $ .48 438,262 $ .49
$ .81 - 1.09 1,041,894 4.3 .99 1,021,894 .99
$ 1.35 - $1.80 88,000 6.6 1.77 38,200 1.74
--------- ---------
1,670,356 4.9 $ .87 1,498,356 $ .87
========= =========

2004 Stock Option Plan

Our Board of Directors will grant options and establish the terms of the
grant in accordance with the provisions of the 2004 Stock Option Plan. Stock
options granted are summarized as follows:

Year Ended
September 30, 2004
-------------------------
Weighted
Average
Exercise
Shares Price
--------- --------

Outstanding at beginning of period -- $ --
Granted 538,000 1.11
Canceled -- --
Exercised -- --
---------
Outstanding at end of period 538,000 1.11
=========
Exercisable at end of period -- --
=========
Reserved for future grants at end of period 1,462,000
=========
Weighted average fair value of options granted during the period $0.32

Non-Employee Director Stock Option Plan

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

The Board of Directors has reserved 60,000 shares of our common stock for
issuance under this plan and as of September 30, 2004, options to purchase
32,000 shares of our common stock have been granted of which 22,000 are
outstanding and exercisable at prices ranging from $0.38to $1.95.

In September 2003, a director exercised options to purchase 10,000 shares
of our unregistered common stock at prices ranging from $.38 to $1.09 per share
for gross proceeds of $8,060.

F-23

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

12. Stockholders' Equity - (Continued)

During the fiscal years ended September 30, 2004 and 2003, options were
granted to purchase 6,000 shares of common stock at $1.10 per share and $1.95
per share, respectively. The options are exercisable for a period of ten years.
The weighted average fair value of the options granted during the years ended
September 30, 2004 and 2003 were $.37 and $.41 per share, respectively.

Other Stock Options and Warrants

During the months of May and September 2003, a director exercised 125,000
warrants, in aggregate to purchase unregistered shares of our common stock at
prices ranging from $.31 to $.50 per share for gross proceeds of $43,500.

During the months of July and September 2003, an officer exercised 75,000
non-qualified options to purchase unregistered shares of our common stock at an
exercise price of $.50 per share for gross proceeds of $37,500.

In January 2004, warrants to purchase 117,852 shares of our common stock
were exercised at pricing ranging from $1.00 to $1.50 using a net exercise
feature, and as a result, we issued 29,128 shares of our common stock.

On June 30, 2004, we issued Laurus a warrant to purchase up to 990,000
shares of our common stock at prices ranging from $1.63 to $2.29 and a warrant
to purchase up to 390,000 shares of our common stock at prices ranging from
$1.56 to $2.18. The warrants vest immediately and have a five-year term. In
addition, we issued a warrant to purchase up to 270,000 shares of our common
stock at prices ranging from $1.64 to $2.29 for investment banking services. The
warrants vest immediately and have a five-year term.

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

Year Ended Year Ended
September 30, 2004 September 30, 2003
--------------------- ----------------------
Weighted Weighted
Average Average
Exercise Exercise
Shares Price Shares Price
--------- -------- --------- --------

Outstanding at beginning of period 2,004,900 $ 1.28 2,474,900 $ 3.41
Granted 3,001,103 1.74 -- --
Canceled (132,148) 1.98 (270,000) 22.24
Exercised (117,852) 1.17 (200,000) .41
--------- ---------
Outstanding at end of period 4,756,003 1.55 2,004,900 1.28
========= =========
Exercisable at end of period 4,661,003 1.56 1,814,900 1.33
========= =========
Weighted average fair value of options
granted during the period $ .14 $ --

Options Outstanding Options Exercisable
------------------------------------- -------------------------
Weighted
Average Weighted Weighted
Remaining Average Average
Exercise Number Contractual Exercise Number Exercise
Prices Outstanding Life Price Exercisable Price
------ ----------- ----------- -------- ----------- --------

$ .50 - 1.09 2,046,497 4.63 $ .95 1,996,497 $ .96
$ 1.50 - 4.50 2,672,106 4.17 1.96 2,627,106 1.97
$ 5.00 - 5.65 37,400 1.40 5.58 37,400 5.58
--------- ---------
4,756,003 3.95 $ 1.55 4,661,003 $ 1.56
========= =========

Common Stock Reserved

We have reserved common stock at September 30, 2004 as follows:

Stock option plans ....................................... 2,258,356
Other stock options ...................................... 1,151,500
Other warrants ........................................... 3,604,503
Shares issuable upon conversion of notes payable.......... 3,900,000
----------
10,914,359
==========

F-24

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

13. Employee Benefit Plan

Effective August 1999, we implemented a Section 401(k) plan for all
eligible employees. Employees are permitted to make elective deferrals of up to
15% of employee compensation and employee contributions to the 401(k) plan are
fully vested at all times. We may make discretionary contributions to the 401(k)
plan which become vested over a period of five years. There were no corporate
contributions to the 401(k) plan during the years ended September 30, 2004 and
2003, respectively.

14. Segment Information

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

15. Major Customers

During the fiscal years ended September 30, 2004 and 2003, no one customer
accounted for more than 10% of our consolidated net sales.

16. Income Taxes

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

September 30, September 30,
2004 2003
------------- -------------
Current:
Federal..................................... $ -- $ --
State ...................................... -- 550
------ ------
-- 550
------ ------
Deferred federal and state taxes............ -- --
------ ------
Total (benefit) provision for income taxes.. $ -- $ 550
====== ======

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

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

The following differences give rise to deferred income taxes:

September 30, September 30,
2004 2003
------------- -------------

Net operating loss carry forwards ........ $ 9,735,000 $ 8,237,000
Differences in fixed asset bases ......... (1,084,000) (477,000)
Capital loss carryover ................... -- 220,000
Other, net ............................... (17,000) 73,000
----------- -----------
8,634,000 8,053,000
Valuation reserve ........................ (8,364,000) (7,783,000)
----------- -----------
Net deferred tax asset ................... $ 270,000 $ 270,000
=========== ===========

The change in the valuation reserve is as follows:

Year Ended Year Ended
September 30, September 30,
2004 2003
------------- -------------
Balance at beginning of period ............. $ 7,783,000 $ 6,614,000
Increase due to rate differentials and
current period operating results.......... 581,000 1,169,000
----------- -----------
Balance at end of period ................... $ 8,364,000 $ 7,783,000
=========== ===========

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

F-25

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

16. Income Taxes - (Continued)

During the past twelve months we have implemented several initiatives
which will allow us to increase our overall revenue with no further capital
investment. We are currently selling product into several new, higher-value
markets. In response to growing crumb rubber demand, we have doubled the crumb
rubber processing capacity at our California facility. The implementation of our
waste wire processing equipment in Iowa and Minnesota during fiscal 2003 has
reduced our residual disposal costs and provided for increased revenue through
the sale of the steel by-product and premium prices paid for crumb rubber
feedstock. In addition, on-going efforts to reduce selling, general and
administrative costs have resulted in a $755,000 reduction in these costs during
fiscal 2004.

In June 2004, we completed a $9 million financing with Laurus and have
earmarked over $1 million for full implementation of our new high-volume tire
processing facility in Tennessee. We anticipate the facility to be operational
during the second quarter of fiscal 2005 thus eliminating over $80,000 per month
of excess transportation costs necessitated by transporting tires to our Georgia
location for processing. In addition, our Georgia waste wire processing
equipment which was damaged by a fire in March 2003 became operational in
November 2004. Based on historical results and current Iowa and Minnesota
performance of similar equipment, we anticipate our performance will be enhanced
by almost $300,000 per quarter in the form of new product revenue and reduced
disposal expenses in Georgia.

In light of the nature and character of losses sustained during the prior
twenty four months and the performance enhancing initiatives described above, we
have evaluated the realizability of the deferred tax asset and concluded that
based on projected net income in future years, it is more likely than not, this
deferred asset will be realized through utilization of net operating loss
carryforwards in the future. The remaining net operating loss carry forwards and
other components of the net deferred tax asset continue to have a full valuation
allowance. We will evaluate the realizability of these deferred tax assets each
quarter.

As of September 30, 2004, we had net operating loss carry forwards of
approximately $25,000,000. The Federal and state net operating loss carry
forwards expire in varying amounts beginning in 2013 and 2004, respectively. In
addition, we have Federal tax credit carry forwards of approximately $17,000
available to reduce future tax liabilities. The Federal tax credit carry
forwards expire beginning in 2013. Use of net operating loss and tax credit
carry forwards maybe subject to annual limitations based on ownership changes in
our common stock as defined by the Internal Revenue Code.

17. Fair Value of Financial Instruments

At September 30, 2004 and 2003, our financial instruments consist of notes
payable to banks and others, and convertible notes payable. Notes payable to
banks and others approximate their fair values as these instruments were
negotiated currently and bear interest at market rates. The fair value of the
$5,519,176 convertible notes payable is $5,985,166 at September 30, 2004 based
upon the intrinsic value of the conversion feature on that date (see Note 8).

F-26

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24 - INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Under our certificate of incorporation and bylaws, our directors and
officers are entitled to be indemnified by us to the fullest extent permitted by
Section 102(b)(7) of the Delaware General Corporation Law. Additionally, under
our certificate of incorporation and bylaws, our directors are not subject to
personal liability to us or our stockholders for monetary damages resulting from
a breach of fiduciary duty or failure to exercise any applicable standard of
care, except that our directors may be subject to personal liability for
monetary damages in circumstances involving:

o a breach of the duty of loyalty;

o acts or omissions not in good faith which involve intentional
misconduct or a knowing violation of law;

o unlawful payments of dividends, stock purchases or redemptions under
the Delaware General Corporation Law; or

o transactions from which the director derives an improper personal
benefit.

ITEM 25 - OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the estimated costs and expenses of the
Company in connection with the offering described in this registration
statement. None of these costs and expenses will be paid by any of the selling
stockholders.

Securities and Exchange Commission Registration Fee ... $ 739.28
American Stock Exchange Listing Fee ................... 45,000.00
Legal Fees and Expenses ............................... 10,000.00
Accounting Fees and Expenses .......................... 10,000.00
Other Expenses ........................................ 5,000.00
Total Costs and Expenses .............................. $70,739.28

ITEM 26 - RECENT SALES OF UNREGISTERED SECURITIES.

On June 30, 2004, in a transaction exempt from registration under Section
4(2) of the Securities Act, we issued a $4 million secured convertible term
note, a $4 million convertible secured convertible revolving note and a $1
million secured minimum borrowing note, to Laurus Master Fund, Ltd. for an
aggregate purchase price of $9 million. As part of the transaction, Laurus was
also issued ten-year warrants to purchase 1,380,000 shares of our common stock
at prices ranging from $1.56 to $2.29 per share. Amounts outstanding under the
term note are convertible into common stock at Laurus's option at a conversion
price initially equal to $1.25 per share. In addition, subject to (i) having an
effective registration statement with respect to the shares of common stock
underlying the term note, and (ii) limitations based on trading volume of the
common stock, scheduled principal and interest payments under the term note will
be made in shares of common stock valued at the conversion price. Amounts
outstanding under the revolving and minimum borrowing notes are convertible to

II-1

common stock at Laurus's option at a conversion price initially equal to $1.31
per share. The conversion prices under the notes are subject to equitable
adjustment for stock splits, stock dividends and similar events, and "weighted
average" adjustment for future stock issuances (other than stock issuances in
specifically excepted transactions).

In February 2002, we commenced a private offering of our common stock to
accredited investors (as that term is defined in Rule 501 of Regulation D under
the Securities Act) in an effort to raise up to $2,000,000 in gross proceeds
(subsequently increased to $3,000,000 in August 2002). As of September 30, 2003,
when the offering terminated, we had sold 1,458,511 shares of our common stock
to investors, including existing shareholders, for gross proceeds of $2,133,603.
The sale of these shares was exempt from registration pursuant to Section 4(2)
of the Securities Act.

In December 2003, we entered into a note purchase agreement with an
accredited investor pursuant to which we issued a 10% convertible note payable
eu3 December 2004 in the aggregate principal amount of $375,000. The Note was
convertible at the option of the Holder at any time prior to maturity into
special investment units at a price equal to $1.07 per unit with each unit
consisting of one share of unregistered common stock and a warrant to purchase
1.5 shares of common stock at an exercise price of $1.07 per share, exercisable
six months after issuance for a period of five years from date of issuance. The
note was converted on June 24, 2004 into 369,331 shares of common stock and we
issued warrants to purchase 553,997 shares of our common stock. The sale of the
note and the issuance of the shares of common stock upon conversion were exempt
from registration pursuant to Section 4(2) of the Securities Act.

In February 2004, we issued 724,281 shares of our common stock to one of
our directors upon conversion of certain convertible promissory notes in the
aggregate principal amount of $375,000, together with $168,210 of accrued
interest. The issuance of the shares of common stock upon conversion were exempt
from registration pursuant to Section 4(2) of the Securities Act.

In April 2004, we commenced a private offering of investment units to
accredited investors, each unit consisting of one share of our common stock and
a warrant to purchase 0.5 shares of our common stock. As of June 30, 2004, when
the offering terminated, we had sold 1,594,211 units (1,594,211 shares of our
common stock and warrants to purchase 797,105 additional shares of our common
stock at prices ranging from $1.56 to $2.06 per share) to investors, including
our directors and existing shareholders, for gross proceeds of $1,547,800. The
sale of these units was exempt from registration pursuant to Section 4(2) of the
Securities Act.

We have issued options to purchase shares of our common stock from time to
time under our 1993 Stock Option Plan, our 2004 Stock Option Plan and our 1996
Non-Employee Director Stock Option. The exercise prices of such options are
equivalent to the fair market value of our common stock on the respective grant
dates. Such stock option grants, and the issuance of shares of stock upon
exercise of such options, are exempt from registration pursuant to Section 4(2)
of the Securities Act.

ITEM 27 - EXHIBITS.

The following exhibits are filed with this document:

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

3.1(10) -- Restated Certificate of Incorporation as filed with the
Secretary of State of the State of Delaware on May 1, 2003

3.2(2) -- By-laws of GreenMan Technologies, Inc.

4.1(2) -- Specimen certificate for Common Stock of GreenMan
Technologies, Inc.

4.2(14) -- Securities Purchase Agreement, dated June 30, 2004, by and
between GreenMan Technologies, Inc. and Laurus Master Fund,
Ltd.

II-2

4.3(14) -- Security Agreement, dated June 30, 2004, by and among
GreenMan Technologies, Inc. and certain of its subsidiaries,
in favor of Laurus Master Fund, Ltd.

4.4(14) -- Master Security Agreement, dated June 30, 2004, by and among
GreenMan Technologies, Inc. and certain of its subsidiaries,
in favor of Laurus Master Fund, Ltd.

4.5(14) -- Secured Convertible Minimum Borrowing Note, dated June 30,
2004, made by GreenMan Technologies, Inc. to Laurus Master
Fund, Ltd.

4.6(14) -- Secured Revolving Note, dated June 30, 2004, made by GreenMan
Technologies, Inc. to Laurus Master Fund, Ltd.

4.7(14) -- Secured Convertible Term Note, dated June 30, 2004, made by
GreenMan Technologies, Inc. to Laurus Master Fund, Ltd.

4.8(14) -- Common Stock Purchase Warrant, dated June 30, 2004, issued to
Laurus Master Fund, Ltd.

4.9(14) -- Common Stock Purchase Warrant, dated June 30, 2004, issued to
Laurus Master Fund, Ltd.

4.10(14) -- Term Note Registration Rights Agreement, dated June 30, 2004,
by and between GreenMan Technologies, Inc. and Laurus Master
Fund, Ltd.

4.11(14) -- Minimum Borrowing Note Registration Rights Agreement, dated
June 30, 2004, by and between GreenMan Technologies, Inc. and
Laurus Master Fund, Ltd.

4.12(14) -- Subsidiary Guarantee, dated June 30, 2004, by and among
GreenMan Technologies of Minnesota, Inc., GreenMan
Technologies of Georgia, Inc., GreenMan Technologies of Iowa,
Inc., GreenMan Technologies of Tennessee, Inc., GreenMan
Technologies of Wisconsin, Inc. and GreenMan Technologies of
California, Inc., in favor of Laurus Master Fund, Ltd.

4.13(14) -- Stock Pledge Agreement, dated June 30, 2004, by and among
GreenMan Technologies, Inc. and Laurus Master Fund, Ltd.

4.14(14) -- Subordination Agreement, dated June 30, 2004, by and among
Barbara Morey, Joyce Ritterhauss, Allen Kahn, Robert Davis
and Nancy Davis, in favor of Laurus Master Fund, Ltd.

4.15(14) -- Escrow Agreement dated June 30, 2004 among GreenMan
Technologies, Inc., Laurus Master Fund, Ltd., and Loeb & Loeb
LLP, as Escrow Agent

5(14) -- Opinion of Morse, Barnes-Brown & Pendleton, P.C.

10.1(2) -- 1993 Stock Option Plan.

10.2(15) -- 2004 Stock Option Plan.

10.3(2) -- Form of confidentiality and non-disclosure agreement for
executive employees.

10.4(4) -- Employment Agreement between GreenMan Technologies, Inc. and
Robert H. Davis.

10.5(1) -- Promissory Note issued by Robert H. Davis dated January 9,
1998 in favor of GreenMan Technologies, Inc.

10.6(1) -- Promissory Note issued by Robert H. Davis dated January 4,
1999 in favor of GreenMan Technologies, Inc.

10.7(1) -- Extension Agreement dated September 30, 2000 between GreenMan
Technologies, Inc. and Robert H. Davis.

10.8(1) -- Extension Agreement dated September 30, 2001 between GreenMan
and Robert H. Davis.

10.9(4) -- Employment Agreement between GreenMan Technologies, Inc. and
Charles E. Coppa.

10.10(9) -- Promissory Note issued by Charles E. Coppa dated January 4,
1999 in favor of GreenMan Technologies, Inc.

10.11(1) -- Convertible Note Payable issued October 27, 1999 by GreenMan
Technologies, Inc. to Dr. Allen Kahn.

II-3

10.12(1) -- Convertible Note Payable issued November 23, 1999 by GreenMan
Technologies, Inc. to Dr. Allen Kahn.

10.13(1) -- Convertible Note Payable issued February 18, 2000 by GreenMan
Technologies, Inc. to Dr. Allen Kahn.

10.14(1) -- Promissory note issued November 17, 2000 by GreenMan
Technologies, Inc. to Dr. Allen Kahn.

10.15(1) -- Extension Agreement dated September 30, 2000 between GreenMan
Technologies, Inc. and Dr. Allen Kahn.

10.16(1) -- Extension Agreement dated June 27, 2001 between GreenMan
Technologies, Inc and Dr. Allen Kahn.

10.17(12) -- $75,000 Promissory Note issued by GreenMan Technologies, Inc.
to Maurice E. Needham dated October 22, 2003.

10.18(13) -- $100,000 Promissory Note issued by GreenMan Technologies,
Inc. to Maurice E. Needham dated January 13, 2004.

10.19(13) -- $100,000 Promissory Note issued by GreenMan Technologies,
Inc. to Maurice E. Needham dated January 26, 2004.

10.20(13) -- $50,000 Promissory Note issued by GreenMan Technologies, Inc.
to Maurice E. Needham dated February 6, 2004

10.21(13) -- $100,000 Promissory Note issued by GreenMan Technologies,
Inc. to Joyce Ritterhauss dated March 10, 2004.

10.22(13) -- $50,000 Promissory Note issued by GreenMan Technologies, Inc.
to Richard Ledet dated March 12, 2004.

10.23(13) -- $100,000 Promissory Note issued by GreenMan Technologies,
Inc. to Barbara Morey dated March 18, 2004.

10.24(13) -- Purchase Agreement dated February 21, 2004 between GreenMan
Technologies of Minnesota, Inc. and Earl Fisher.

10.25(13) -- Commercial Lease Agreement dated March 25, 2004 between
GreenMan Technologies of Minnesota, Inc. and Two Oaks, LLC.

10.26(13) -- Extension Agreement dated March 31, 2004 between GreenMan
Technologies, Inc. and Robert H. Davis and Nancy
Karfilis-Davis.

10.27(13) -- Waiver agreement by Republic Services of Georgia, LP.

10.28(5) -- Loan and Security Agreement dated January 31, 2001 by and
among Coast Business Credit, GreenMan Technologies of
Minnesota, Inc. and GreenMan Technologies of Georgia, Inc.

10.29(5) -- Secured Promissory Note dated January 31, 2001 in the amount
of $2,044,000 executed by GreenMan Technologies of Minnesota,
Inc. and GreenMan Technologies of Georgia, Inc. payable to
Coast Business Credit.

10.30(5) -- Secured Promissory Note dated January 31, 2001 in the amount
of $822,250 executed by GreenMan Technologies of Minnesota,
Inc. and GreenMan Technologies of Georgia, Inc. payable to
Coast Business Credit.

10.31(5) -- Secured Promissory Note dated January 31, 2001 in the amount
of $812,250 executed by GreenMan Technologies of Minnesota,
Inc. and GreenMan Technologies of Georgia, Inc. payable to
Coast Business Credit.

10.32(5) -- Secured Promissory Note dated January 31, 2001 in the amount
of $1,000,000 executed by GreenMan Technologies of Minnesota,
Inc. and GreenMan Technologies of Georgia, Inc. payable to
Coast Business Credit.

II-4

10.33(5) -- Security Agreement-Continuing Guaranty dated January 31, 2001
between GreenMan Technologies Inc. and Coast Business Credit.

10.34(5) -- Loan Agreement dated March 29, 2001 between GreenMan
Technologies of Minnesota, Inc. Bremer Business Finance
Corporation.

10.35(5) -- Real Estate Term Note dated January 31, 2001 in the amount of
$822,250 executed by GreenMan Technologies of Minnesota, Inc.
in favor of Bremer Business Finance Corporation.

10.36(5) -- Mortgage, Security Agreement, Fixture Financing Statement and
Assignment of Leases and Rents executed by GreenMan
Technologies of Minnesota, Inc. to Bremer Business Finance
Corporation.

10.37(6) -- Purchase and Sale Agreement By and Between GreenMan
Technologies of Georgia, Inc. and WTN Realty Trust dated
April 2, 2001

10.38(6) -- Lease Agreement By and Between WTN Realty Trust to GreenMan
Technologies of Georgia, Inc. dated April 2, 2001.

10.39(6) -- $200,000 Promissory Note by WTN Realty Trust to GreenMan
Technologies of Georgia, Inc. dated April 2, 2001.

10.40(6) -- Purchase and Sale Agreement By and Between Technical Tire
Recycling, Inc. and Tennessee Tire Recyclers, Inc. dated
April 16, 2001

10.41(6) -- $180,000 Promissory Note by Technical Tire Recycling, Inc. to
Tennessee Tire Recyclers, Inc. dated April 16, 2001.

10.42(6) -- Corporate Guarantee by GreenMan Technologies, Inc. of
$180,000 note to Tennessee Tire Recyclers, Inc. dated April
16, 2001.

10.43(7) -- Stock Repurchase Agreement by and between GreenMan
Technologies, Inc. and Republic Services of Georgia, LP,
dated February 14, 2002.

10.44(7) -- $1,500,000 Promissory Note by GreenMan Technologies, Inc. to
Republic Services of Georgia, LP dated February 14, 2002.

10.45(8) -- Stock Repurchase Agreement by and between GreenMan
Technologies, Inc. and Republic Services of Georgia, LP dated
May 6, 2002

10.46(8) -- $750,000 Promissory Note by GreenMan Technologies, Inc. to
Republic Services of Georgia, LP dated May 6, 2002.

10.47(9) -- Extension Agreement dated September 23, 2002 between GreenMan
and Dr. Allen Kahn.

10.48(3) -- Employment Agreement dated April 1, 2003 between GreenMan
Technologies, Inc. and Maurice E. Needham

10.49(3) -- Lease - Business Property agreement dated April 1, 2003
between GreenMan Technologies of Iowa, Inc. and Maust Asset
Management, LLC

10.50(3) -- Guaranty dated September 12, 2003 by GreenMan Technologies,
Inc. of obligations of GreenMan Technologies of Iowa, Inc.
under the Lease - Business Property with Maust Asset
Management, LLC.

10.51(3) -- $100,000 Promissory Note by GreenMan Technologies, Inc. to
Joyce Ritterhauss dated June 23, 2003.

10.52(3) -- $100,000 Promissory Note by GreenMan Technologies, Inc. to
Joyce Ritterhauss dated June 26, 2003.

10.53(3) -- $100,000 Promissory Note by GreenMan Technologies, Inc. to
Barbara Morey dated June 26, 2003.

II-5

10.54(3) -- $100,000 Promissory Note by GreenMan Technologies, Inc. to
Barbara Morey dated August 26, 2003.

10.55(3) -- $100,000 Promissory Note by GreenMan Technologies, Inc. to
Mart Management, Inc. dated September 30, 2003.

10.56(3) -- $400,000 Promissory Note by GreenMan Technologies, Inc. to
Robert H. Davis and Nancy Karfilis Davis dated September 30,
2003.

10.57(3) -- Waiver agreement by Republic Services of Georgia, LP

21.1(17) -- List of All Subsidiaries

23.1(14) -- Consent of Morse, Barnes-Brown & Pendleton, P.C. (included in
Exhibit 5.1).

23.2(16) -- Consent of Wolf & Co., P.C.

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

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

(3) 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.

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

(5) Filed as an Exhibit to GreenMan Technologies, Inc.'s Form 10-QSB for the
Quarter Ended March 31, 2001 and incorporated herein by reference.

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

(7) Filed as an Exhibit to GreenMan Technologies, Inc.'s Form 10-QSB for the
Quarter Ended March 31, 2002 and incorporated herein by reference.

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

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

(10) Filed as an Exhibit to GreenMan Technologies, Inc.'s Form 10-QSB for the
Quarter Ended March 31, 2003 and incorporated herein by reference.

(11) Filed as an Exhibit to GreenMan Technologies, Inc.'s Form 10-QSB for the
Quarter Ended June 30, 2003 and incorporated herein by reference.

(12) Filed as an Exhibit to GreenMan Technologies, Inc.'s Form 10-QSB for the
Quarter Ended December 31, 2003 and incorporated herein by reference.

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

(14) Previously filed.

(15) Filed as an Exhibit to GreenMan Technologies, Inc.'s Form 10-QSB for the
Quarter Ended June 30, 2004, as amended, and incorporated herein by
reference.

(16) Filed herewith.

(17) Filed as an Exhibit to GreenMan Technologies, Inc.'s Form 10-KSB for the
Fiscal Year Ended September 30, 2004 and incorporated herein by reference.

II-6

ITEM 28 - UNDERTAKINGS.

The undersigned registrant hereby undertakes:

(1) To file, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:

(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act;

(ii) Reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of the securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of a
prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the maximum
offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;

(iii) Include any additional or changed material information on the
plan of distribution;

(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the bona fide offering thereof.

(3) To file a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.

Insofar as indemnification arising under the Securities Act may be permitted to
directors, officers and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.

II-7

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this Amendment No. 2
to registration statement to be signed on its behalf by the undersigned in the
city of Lynnfield, Massachusetts, on January 26, 2005.

GREENMAN TECHNOLOGIES, INC.
(Registrant)

By: /s/ Charles E. Coppa
Charles E. Coppa
Chief Financial Officer

Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated:

Signature Title Date
--------- ----- ----

/s/ Robert H. Davis Chief Executive Officer and January 26, 2005
Robert H. Davis President (principal executive
officer); Director

/s/ Charles E. Coppa Chief Financial Officer January 26, 2005
Charles E. Coppa (principal financial and
accounting officer)

/s/ Maurice E. Needham Chairman of the Board of January 26, 2005
Maurice E. Needham Directors

/s/ Dr. Allen Kahn Director January 26, 2005
Dr. Allen Kahn

/s/ Lew F. Boyd Director January 26, 2005
Lew F. Boyd

_________________ Director January __, 2005
Lyle Jensen

II-8