Edgar Filing: GREENMAN TECHNOLOGIES INC

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

Form 10-KSB

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

For the fiscal year ended September 30, 2003

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

Commission File Number 1-13776
-------

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

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

7 Kimball Lane, Building A, Lynnfield, MA 01940
------------------------------------------------------
(Address of principal executive offices) (Zip Code)

Issuer's telephone number (781) 224-2411
--------------

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

Title of each class Name of each exchange on which registered
------------------- -----------------------------------------

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

Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

Yes |X| No |_|

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

The issuer's revenues for the fiscal year ended September 30, 2003 were
$29,679,992.

The aggregate market value of the voting stock held by non-affiliates, computed
by reference to the closing bid prices of such stock, as of January 30, 2004 was
$14,013,000.

As of January 30, 2004, 16,061,939 shares of common stock of issuer were
outstanding.

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

PART 1

Item 1. Description of Business

General

GreenMan Technologies, Inc. (together with its subsidiaries, "we", "us" or
"our") was originally founded in 1992 and has been operated as a Delaware
corporation since 1995. Today, we comprise 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 Florida, Georgia, Illinois, Missouri, Tennessee
and Texas.

Recent Developments

In February 2003, we decided to reconfigure the operations of our
low-volume size reduction facility in Wisconsin to a whole tire transfer station
supplying compliant tires to a cement kiln. The cement kiln has been and is
anticipated to continue consuming a majority of the scrap tires collected by the
Wisconsin facility. We intend to either use the existing Wisconsin size
reduction equipment at our other locations or initiate an effort to sell the
idle equipment.

On March 31, 2003, a portion of our Georgia facility and several pieces of
waste wire processing equipment were damaged by a fire. We therefore will incur
increased disposal costs and reduced product revenue in Georgia until March
2004, when the equipment is currently expected to be re-installed and
operational. 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. These amounts have been offset by approximately $821,000 of
insurance proceeds of which $187,000 has been received as of September 30, 2003.
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.

On April 1, 2003 we sold our majority interest in Able Tire of Oklahoma,
LLC, to the minority member for $50,000 and recognized a $71,000 loss on the
transaction. We determined that it was in our best interest to divest our
interest due to the uncertain impact of pending Oklahoma scrap tire legislation
intended to significantly reduce the state sponsored tire processing fee.

Products and Services

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;

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

o as heavy-duty roofing shingles which are stamped from the tread of
scrap passenger and light truck tires, coated with a granular
material to have a "slate look" and then used as a replacement for
wood shingles, particularly in areas where hail is prevalent.

During the fiscal year ended September 30, 2003, we produced and test
marketed a limited amount of heavy-duty roofing shingles stamped from tire
treads and continue to work with the developer/marketer to commercialize the
production of this product on a high-volume, cost-effective basis.

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 are used as an alternative fuel source to coal, while also providing
a source of iron oxide which is required in the cement making process.

Manufacturing/Processing

Our tire shredding operations currently have the capacity to process about
40 million passenger tire equivalents annually. We collected over 28.6 million
passenger tire equivalents in the fiscal year ended September 30, 2003, compared
to approximately 26.3 million passenger tire equivalents during the year ended
September 30, 2002. We anticipate processing over 30 million passenger tire
equivalents in fiscal 2004, 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 has
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, and we estimate new equipment will be re-installed during the
second quarter of fiscal 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 Scrap Tire Management
Council, approximately 280 million passenger tire equivalents (approximately one
per person per year) are discarded annually 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
Scrap Tire Management Council estimates that a total of approximately 180
million passenger tire equivalents are currently recycled of which approximately
115 million are burned as tire-derived fuel; 25 million are used in civil
engineering applications; and 40 million are used in various other applications
such as crumb rubber production, retreading and export. The approximately 100
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 year ended September 30, 2003, no one customer accounted for more
than 10% of our consolidated net sales while one customer did account for
approximately 10% of consolidated net sales for the fiscal year ended September
30, 2002. 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 process 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, 2003, we had approximately 180 full time employees. We
are not a party to any collective bargaining agreements and consider the
relationship with our employees to be satisfactory.

Item 2. Description of Properties

Our Minnesota subsidiary owns two industrial buildings and an office
building in Savage, Minnesota, located on approximately eight acres of land
zoned for industrial use.

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 20 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, Inc. ("Mart") an
unrelated third party. On September 30, 2003, Mart loaned us $100,000 under a
twelve month unsecured note payable bearing interest quarterly at 12% per annum
(See Item 12 - "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 ("Maust Asset Management"), a company co-owned by one of
our officers. 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.

On April 1, 2003, our Wisconsin subsidiary acquired the land and buildings
in which it operates for $362,900 under a 67 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.

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

Item 3. Legal Proceedings

We were not a party to any pending legal proceedings as of September 30, 2003.

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

There were no matters submitted to a vote of our shareholders during the
fourth quarter of the fiscal year ended September 30, 2003.

PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

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 "GMT."

Based on the minimal trading activity of common stock on the Boston Stock
Exchange, we voluntarily withdrew our listing on that exchange effective
November 13, 2002.

The following table sets forth the high and low bid quotations for our
common stock for the periods indicated as quoted on the Over the Counter
Bulletin Board and, effective September 20, 2002, on the American Stock
Exchange. Quotations from the Over the Counter Bulletin Board reflect
inter-dealer prices, without retail mark-up, mark-down or commission and may not
necessarily represent actual transactions.

------------------
Common Stock
------------------
High Low
---- ---
Fiscal 2002
-----------
Quarter Ended December 31, 2001 $ 1.35 $ 0.65
Quarter Ended March 31, 2002 1.82 1.12
Quarter Ended June 30, 2002 2.68 2.00
Quarter Ended September 30, 2002 2.35 1.80

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

On January 30, 2004, the closing bid price of our common stock was $1.45
per share.

As of January 30, 2004, we estimate the approximate number of
stockholders of record of our common stock to be 2,600.

We have not paid any cash dividends on our common stock since inception
and do not anticipate paying any cash dividends in the foreseeable future.

See "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Liquidity and Capital Resources - Private Offering of
Common Stock" below, for descriptions of certain shares of capital stock sold
under an offering completed during the fiscal year ended September 30, 2003.

Item 6. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Fiscal Year ended September 30, 2003 Compared to Fiscal Year ended
September 30, 2002

Net sales for the fiscal year ended September 30, 2003 increased 8% to
$29,679,992, compared to $27,451,633 for the fiscal year ended September 30,
2002. In addition, several large tire pile cleanup projects accounting for 10%
of the total passenger tire equivalents processed during the year ended
September 30, 2002 were completed. The increase was primarily attributable to
the inclusion of operations of our new California, Iowa and Wisconsin
subsidiaries formed in connection with fiscal 2002 acquisitions, as well as
increased end product sales which accounted for over 25% of consolidated
revenues for the fiscal year ended September 30, 2003, compared to 17% for the
same period last year. The increase in end product sales is attributable to
implementation of our waste wire processing equipment and crumb rubber
production capacity which was acquired during the last half of fiscal 2002. The
overall quality of revenue (revenue per passenger tire equivalent) benefited
from increased tire volumes and end product sales which substantially offset an
11% reduction in tipping fees resulting from lower tipping fees in certain
markets and the completion of several large on-going tire pile cleanups during
2002. We processed over 28.6 million passenger tire equivalents during the
fiscal year ended September 30, 2003, compared to over 26.3 million passenger
tire equivalents during the fiscal year ended September 30, 2002.

Gross profit for the fiscal year ended September 30, 2003 was $3,977,981
or 13% of net sales, compared to $6,254,624 or 23% of net sales for fiscal year
ended September 30, 2002. The decrease was attributable to: (1) the completion
of several large tire pile cleanups in June 2002; (2) more than $800,000 of
excess transportation costs and other operating inefficiencies necessitated by
processing Tennessee-sourced tires at our Georgia facility until our Nashville
area facility commences full operation; (3) previously reported corporate-wide
insurance cost increases of more than $100,000 per quarter; (4) $260,000 of
increased raw material costs incurred by our Iowa subsidiary resulting from the
need to supplement crumb rubber feedstock requirements externally during the
$1.5 million facility upgrade period and the winter months when seasonally
inbound volumes are lower; (5) decreased end product revenue in Georgia as a
result of the March 31, 2003 waste wire processing equipment fire and which
management estimates to exceed $500,000 net of business interruption insurance
reimbursement; (6) 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; (7) 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; (8) 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 (9) approximately $250,000 relating to losses
associated with a kiln relationship terminated on December 31, 2002 and the
commercialization of our roofing shingle project.

Selling, general and administrative expenses for the fiscal year ended
September 30, 2003 were $5,434,270 or 18% of sales, compared to $4,398,146 or
16% of sales for the fiscal year ended September 30, 2002. The increase is
attributable to the inclusion of our three new subsidiaries formed in connection
with fiscal 2002 acquisitions and our majority owned joint venture formed in
fiscal 2002. In addition, results for the fiscal year ended September 30, 2003
include approximately $411,000 of costs associated with the initial startup and
limited operations of our new Tennessee facility.

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 is anticipated to continue
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. We intend to either utilize the
available equipment at our other locations or initiate an effort to sell the
excess equipment.

As a result of the foregoing, we recorded an operating loss of $1,717,567
for the fiscal year ended September 30, 2003, compared to an operating profit of
$1,856,478 for the fiscal year ended September 30, 2002.

In addition to the disruption of operations and lost revenues caused by
the March 2003 fire at our Georgia facility, we also incurred additional direct
costs relating to damaged equipment and excess disposal costs totaling
approximately $390,000, which were offset by a partial insurance recovery of
$821,000 associated with costs incurred during the fiscal year ended September
30, 2003. We also incurred a net loss of approximately $89,000 associated with
the divestiture of under-performing assets during the fiscal year ended
September 30, 2003.

We recorded $177,929 of income from forgiveness of indebtedness during the
fiscal year ended September 30, 2002 as a result of renegotiating and settling
certain outstanding obligations due to various unrelated, unsecured vendors and
creditors who agreed to forgive past due amounts due in return for an immediate
payment of less than 100%. No such income was recorded during fiscal 2003.

During the fiscal year ended September 30, 2002, we recorded a net benefit
for income taxes of $204,400 primarily due to the recognition of a deferred tax
asset of $270,000.

As a result of the foregoing, we recorded a net loss of $2,892,543 or $.18
per basic share for the fiscal year ended September 30, 2003, compared to net
income of $1,018,027 or $.07 per basic share for the fiscal year ended September
30, 2002.

Liquidity and Capital Resources

As of September 30, 2003, we had $990,745 in cash and cash equivalents and
a working capital deficiency of $4,022,371. We understand that the continued,
successful sales and marketing of our services and products, the introduction of
new products, raising additional growth capital and re-establishing continued
profitability from operations will be critical to our future liquidity.

The Consolidated Statements of Cash Flows reflect events in fiscal 2003
and 2002 as they affect our liquidity. During the fiscal years ended September
30, 2003 and 2002, net cash provided from operating activities was $1,948,484
and $1,726,014, respectively. Negatively impacting operating cash flows in
fiscal 2003 was a net loss from operations, which was offset by depreciation,
amortization, impairment losses and an increase in accounts payable. Positively
affecting cash flows for fiscal 2002 was net income from operations,
depreciation and amortization, which was offset by an increase in accounts
receivables and deferred income taxes.

Net cash used for investing activities was $2,522,496 and $3,563,132
during fiscal 2003 and 2002, respectively. These amounts represent significant
investments made for the purchase of property and equipment during the last two
years and the acquisition of several entities during fiscal 2002.

Net cash provided by financing activities was $770,976 and $1,888,180
during fiscal 2003 and 2002, respectively. Positively affecting cash flows from
financing activities for both years were proceeds from the sale of our common
stock, the issuance of notes payables to unrelated and related parties and the
exercise of stock options and warrants.

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 the first quarter of 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. Several
of these initiatives are described below.

Operating Performance Enhancements

Historically, our tire shredding operations were able to recover and sell
approximately 60% of a processed tire with the balance disposed of as waste wire
residual (cross-contaminated rubber and steel) at an annual cost exceeding
$1,000,000 in prior years. We have purchased secondary equipment for our Georgia
(damaged in the March 2003 fire), 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 reduces 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 will reduce
waste wire disposal costs while increasing our capacity to produce 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. We estimate the internalization of crumb
rubber feedstock supply and production via our new processing equipment will
eliminate over $250,000 in annual transportation costs by eliminating the need
to source crumb rubber feedstock from our other locations. 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 last year. 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.

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. 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 twelve months to expand and
enhance our California market position in order to provide a solid foundation
for future growth and sustainable profitability.

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 are evaluating
several immediate financing alternatives to provide the capital necessary to
purchase all remaining equipment, which is estimated to cost approximately $1.5
million. 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. We intend to
either use the available Wisconsin size reduction equipment at our other
locations or initiate an effort to sell. We also intend to continue our efforts
to increase Wisconsin tire volumes and reduce expenses in order to reach
profitability in the near term.

During the past twelve months, we have 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.

Private Offerings of Common Stock

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 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. A
majority of the proceeds of this offering were used to acquire certain tire
recycling operations and assets. The sale of these shares was exempt from
registration under the Securities Act pursuant to Rule 506 of Regulation D and
Section 4(2) of the Securities Act.

In December 2003, we commenced a private offering of investment units to
accredited investors through an investment bank in an effort to raise up to
$3,000,000 (which may be increased to up to $3,500,000 to cover over-allotments,
if any). 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 will
equal 80% of the average closing bid price of our common stock during the ten
days preceding each closing of the offering. The warrants are exercisable at any
time between the sixth month and the fifth year after the date of issuance at an
exercise price equal to 105% of the closing bid price of our common stock on the
day preceding the applicable closing. The sale of these units is exempt from
registration under the Securities Act pursuant to Rule 506 of Regulation D and
Section 4(2) of the Securities Act. We have agreed to use our best efforts to
register the shares of common stock, and the shares issuable upon exercise of
the warrants, for resale under the Securities Act. No assurances can be given
that such offering will be successful.

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 ("RSLP") (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. The difference between the liquidation value of the preferred stock
and the consideration given was credited to paid-in-capital.

On May 6, 2002, RSLP 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 RSLP 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 September 30,
2003, four payments totaling $35,845 were past due and we have received a waiver
of default from RSLP through March 31, 2004 on any past due amounts.

Credit Facility

On February 7, 2003, Southern Pacific Bank ("SPB") and its wholly owned
subsidiary Coast Business Credit ("CBC") 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. Prior to
its closure, CBC had been our principal source of working capital financing and
long term debt (the "Credit Facility") and had verbally agreed to provide the
necessary funding to implement several growth initiatives including shredding
and screening upgrades in Georgia and Minnesota, our waste wire processing
equipment in Minnesota and a new high volume tire processing facility in
Tennessee. As a result of the CBC failure, these initiatives have taken longer
to implement as they have been funded by internal cash flows.

On May 16, 2003, we were notified by the FDIC that Waco Asset Management
Co.31, Ltd., an affiliate of First City Financial Company ("FCFC"), had
purchased a pool of loans from the FDIC that included our Credit Facility. FCFC
focuses on acquiring and resolving distressed loans and other assets at
discounted values and is not generally a long-term, asset-based lender.
Accordingly, we have been advised that because the Credit Facility does not
represent a typical FCFC loan, FCFC intends to sell its interest in the Credit
Facility to a third party. No assurance can be given that FCFC will be
successful in selling its interest in the Credit Facility. We are in compliance
with all covenants and other terms of the Credit Facility. Although FCFC must
honor the terms of the Credit Facility as long as we are not in default, FCFC is
not willing to expand the Credit Facility to provide us with necessary growth
capital. No assurance can be given that FCFC will grant waivers of defaults that
we may need in the future. Our management is currently evaluating several
financing alternatives which would provide growth capital and enhance our
financial position, and is diligently working to determine the feasibility of
each alternative. No assurances can be given that any such financing will be
concluded in the near future, on terms favorable to us, or at all. If we are
unable to obtain additional growth capital, our ability to implement our
business plan may be materially and adversely affected. If we are forced to
refinance our obligations, we would be required to write off the then
unamortized balance of deferred financing charges relating to the Credit
Facility ($181,156 at September 30, 2003).

Off-Balance Sheet Arrangements

We lease various facilities and equipment under cancelable and
non-cancelable short and long term operating leases which are described in
Footnote 10 to the Consolidated Financial Statements contained herein.

Cautionary Statement

Information contained or incorporated by reference in this document
contains "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, which statements can be identified by
the use of forward-looking terminology such as "may," "will," "would," "can,"
"could," "intend," "plan," "expect," "anticipate," "estimate" or "continue" or
the negative thereof or other variations thereon or comparable terminology. The
following matters constitute cautionary statements identifying important factors
with respect to such forward-looking statements, including certain risks and
uncertainties that could cause actual results to differ materially from those in
such forward-looking statements.

Factors That May Affect Future Results

Risks Related to our Business

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

We have experienced four consecutive quarters of operating 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 may need to seek an alternate principal source of working capital financing
and long term debt.

See the discussion regarding our Credit Facility in "Other Matters That
Have Impacted Our Liquidity - Credit Facility," above. In addition to the risks
disclosed in that discussion, the uncertainty surrounding the status of the
Credit Facility, which expires on December 31, 2006, may become a significant
distraction of management from our ongoing business.

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. We anticipate
that these conditions will continue until March 2004, when the equipment is
expected to be repaired and returned to operative status. No assurance can be
given, however, that we will be able to re-establish our Georgia waste wire
processing capabilities in a timely manner.

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 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 has been and is
anticipated to continue to consume a majority of the scrap tires collected by
the Wisconsin facility. We do not have a long-term supply contract with the
cement kiln 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 service 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 Vice
President of Operations and Midwest Regional Vice President; Thomas A. Carter,
subsidiary and Southeastern Regional Vice President; and James C. Dodenhoff, our
Western Regional Vice President. The loss of any of these personnel could have a
material adverse effect on our business, financial condition and results of
operations. We have obtained "key man" insurance only on the lives of Messrs.
Davis and Coppa.

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.

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
of, 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.

We have options and warrants to purchase approximately 4,029,794 shares of
common stock currently outstanding in addition to $375,000 of convertible
promissory notes. These notes are convertible into 500,000 shares of common
stock and are held by a member of our Board of Directors. 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.

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. As a result, capital appreciation, if any, of our
common stock will be shareholders' sole source of gain for the foreseeable
future.

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

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

Environmental Liability

There are no known material environmental violations or assessments.

Recent Accounting Pronouncements

In December 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation - Transition and Disclosure", amending the disclosure
requirements for stock-based compensation. This statement requires prominent
disclosures in both annual and interim financial statements about the method of
accounting for stock-based employee compensation and the effect of the method
used on reported results.

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133
on Derivative Instruments and Hedging Activities." This Statement amends SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities", and
clarifies accounting for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities under SFAS
No. 133. This Statement is effective for contracts entered into or modified
after June 30, 2003, except in certain circumstances, and for hedging
relationships designated after June 30, 2003. This Statement did not have a
material effect on our consolidated financial statements.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity." This
Statement provides new rules on the accounting for certain financial instruments
that, under previous guidance, would be accounted for as equity. Such financial
instruments include mandatorily redeemable shares, instruments that require the
issuer to buy back some of its shares in exchange for cash or other assets, or
obligations that can be settled with shares, the monetary value of which is
fixed. Most of the guidance in SFAS No. 150 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 30,
2003. This Statement did not have a material effect on our consolidated
financial statements.

In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities" (FIN 46), which establishes guidance for determining
when an entity should consolidate another entity that meets the definition of a
variable interest entity. FIN 46 requires a variable interest entity to be
consolidated by a company if that company will absorb a majority of the expected
losses, will receive a majority of the expected residual returns, or both. On
December 17, 2003, the FASB deferred the effective date of FIN 46 to no later
than the end of the first reporting period that ends after March 15, 2004,
however, for special-purpose entities, we would be required to apply FIN 46 as
of December 31, 2003. The Interpretation had no effect on our consolidated
financial statements.

Item 7. Financial Statements

For information required with respect to this Item 7, see "Consolidated
Financial Statements" on pages F-1 through F-21 of this report.

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

None

Item 8A. Controls and Procedures

(a) Evaluation of disclosure controls and procedures. As of the end of the
period covered by this report, our principal executive officer and principal
financial officer have concluded that our disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of
1934 (the "Exchange Act")) are effective to ensure that information required to
be disclosed by us in reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in Securities and Exchange Commission rules and forms.

(b) Changes in internal controls. There were no significant changes in our
internal controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

PART III

Item 9. Directors, Executive Officers and Key Employees

Our directors and executive officers are as follows:

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

Maurice E. Needham ............... 63 Chairman of the Board of Directors
Robert H. Davis .................. 61 Chief Executive Officer; President; Director
Charles E. Coppa ................. 40 Chief Financial Officer; Treasurer; Secretary
Mark T. Maust .................... 45 Vice President of Operations
Dr. Allen Kahn.................... 83 Director
Lew F. Boyd ...................... 58 Director
Lyle Jensen....................... 53 Director

Each director is elected for a period of one year at the annual meeting of
stockholders and serves until his or her successor is duly elected by the
stockholders. The officers are appointed by and serve at the discretion of the
Board of Directors. Each outside director receives a fee of $2,500 per board
meeting. Each outside director also participates in the Non-Employee Director
Stock Option Plan.

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 of 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 also
serves 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.

MARK T. MAUST has been Vice President of Operations since July 2000 and
Vice President of our Minnesota subsidiary since July 1997. Prior to joining us,
Mr. Maust served as Vice President for BFI Tire Recyclers of Minnesota, Inc.
from July 1991 to June 1997. Mr. Maust was Vice President of Maust Tire
Recycling from 1988 to 1991, when the business was sold to BFI and he joined BFI
as a Vice President.

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.

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

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

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

Code of Ethics

We have not yet adopted a code of ethics that applies to our principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions. We are in the process of
preparing and adopting a code of ethics, which will be posted on our corporate
website.

Item 10. Executive Compensation

The following table summarizes the compensation paid or accrued for
services rendered during the fiscal years ended September 30, 2003, 2002 and
2001, to our Chief Executive Officer, our 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

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

Robert H. Davis ............. 2003 $230,000 $ -- $19,900 -- $ --
Chief Executive Officer 2002 230,000 23,000 16,817 7,500 --
2001 230,000 44,000 15,586 25,000 5,813

Mark T. Maust ............... 2003 $140,000 $ -- $18,908 -- $ --
Vice President 2002 140,000 70,000 17,278 7,500 --
2001 140,000 70,000 17,074 25,000 5,813

Charles E. Coppa ............ 2003 $130,000 $ -- $ 9,343 -- $ --
Chief Financial Officer 2002 130,000 5,000 7,200 7,500 --
2001 130,000 20,000 7,200 50,000 5,813

(1) Represents payments made to or on behalf of Messrs. Davis, Maust and Coppa
for health and life insurance and auto allowances.
(2) The fiscal 2002 grants represent options granted to Mr. Davis, Mr. Maust
and Mr. Coppa in August 2002. The fiscal 2001 grants represent options
granted in January 2001 to Mr. Davis, Mr. Maust and Mr. Coppa.
(3) Represents the value assigned to 19,375 shares of our unregistered common
stock granted to each of Messrs. Davis, Maust and Coppa for prior services
rendered.

Options/SAR Grants Table

We did not grant any stock options or other equity during the fiscal year
ended September 30, 2003 to the executives named in the Summary Compensation
Table above.

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, 2003 held by the executives named in the
Summary Compensation Table above.

Shares Value of Unexercised
Acquired Value Number of Unexercised In-the-Money Options
on Exercise (1) Realized (2) Options at September 30, 2003 (3) at September 30, 2003 (2)
--------------- ------------ --------------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------

Robert H. Davis ....... 103,000 $ 119,940 944,500 273,500 $ 441,430 $ 257,830
Mark T. Maust ......... -- -- 166,000 166,500 $ 208,550 $ 112,500
Charles E. Coppa ...... -- -- 214,000 173,500 $ 242,720 $ 124,880

(1) During the fiscal year ended September 30, 2003, Mr. Davis exercised
103,000 options at exercise prices ranging from $.40 to $.53 per share.
(2) Assumes that the value of shares of common stock is equal to $1.66 per
share, which was the closing bid price on the American Stock Exchange on
September 30, 2003.
(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 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 will receive 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.

Options granted under the 1993 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.
Incentive stock options may be granted under the 1993 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 1993 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 1993 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 the 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, 2003, there were 1,983,894 options granted and
outstanding under the 1993 Stock Option Plan of which 1,533,094 options were
exercisable at prices ranging from $0.38 to $4.70.

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 our 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, 2003,options to purchase 26,000 shares of our common
stock have been granted under the 1996 Non-Employee Director Stock Option Plan,
of which 16,000 are outstanding and exercisable at prices ranging from $0.38 to
$1.95.

Employee Benefit Plan

In August 1999, we implemented a Section 401(k) plan for all eligible
employees. Employees are permitted to make elective deferrals of up to 15% of
employee compensation and employee contributions to the 401(k) plan are fully
vested at all times. We may make discretionary contributions to the 401(k) plan
which become vested over a period of five years. We did not make any
discretionary contributions to the 401(k) plan during the fiscal years ended
September 30, 2003 and 2002.

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

The following table sets forth certain information regarding beneficial
ownership of our common stock as of September 30, 2003:

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

o by each of our directors and officers; and

o by all our directors and officers as a group.

Unless otherwise indicated below, to the best of our knowledge, all
persons listed below have sole voting and investment power with respect to their
shares of common stock, except to the extent authority is shared by spouses
under applicable law. As of September 30, 2003, 16,061,939 shares of our common
stock were issued and outstanding.

SECURITY OWNERSHIP OF MANAGEMENT AND DIRECTORS
Number of Shares Percentage of
Name (1) Beneficially Owned (2) Class (2)
-------- ---------------------- ---------

Dr. Allen Kahn (3)......................... 2,717,091 16.40%
Maurice E. Needham (4)..................... 1,791,251 10.60%
Robert H. Davis (5)......................... 1,191,200 7.12%
Charles E. Coppa (6)........................ 608,427 3.72%
Mark Maust (7).............................. 422,736 2.59%
Lew F. Boyd (8)............................. 364,588 2.25%
Lyle Jensen (9)............................. 7,800 *
All officers and directors as a group
(7 persons) .......................... 7,103,093 37.83%

* Less than 1%

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Number of Shares Percentage of
Beneficially Owned Class
------------------ -----

Richard Ledet (10)......................... 1,950,400 12.14 %

(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 10,500 shares of common stock issuable pursuant to immediately
exercisable stock options. Also includes 500,000 shares of common stock
issuable pursuant to immediately exercisable convertible notes.
(4) Includes 834,000 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 672,500 shares of common stock issuable pursuant to immediately
exercisable stock options.
(6) Includes 275,500 shares of common stock issuable pursuant to immediately
exercisable stock options.
(7) Includes 231,500 shares of common stock issuable pursuant to immediately
exercisable stock options.
(8) Includes 124,394 shares of common stock issuable pursuant to immediately
exercisable stock options.
(9) Includes 7,500 shares of common stock issuable pursuant to immediately
exercisable stock options.
(10) Mr. Ledet's address is 2960 NE Broadway, Des Moines, Iowa 50317.

Common Stock Authorized for Issuance under Equity Compensation Plans

For descriptions of equity compensation plans under which our common stock
is authorized for issuance as of September 30, 2003, see Note 11 ("Stockholders'
Equity") of the Consolidated Financial Statements contained herein. For
additional information concerning certain compensation arrangements, not
approved by stockholders, under which options to purchase common stock may be
issued, see "Executive Compensation - Employment Agreements', above, and
"Certain Relationships and Transactions - Stock Issuances: Stock Options;
Warrants", below.

Item 12. Certain Relationships and Related Transactions

Stock Issuances; Stock Options; Warrants

In July 2001, our Board of Directors approved the issuance of 100,000
shares of our unregistered common stock to certain employees in recognition of
past services and we recorded a $30,000 expense (the assigned fair value based
on the closing bid price of our common stock on the date of issuance) associated
with the issuance of these shares during the year ended September 30, 2001.
Messrs. Needham, Davis, Coppa, Maust, Boyd and Kahn collectively received 85,000
of these shares of common stock.

On March 19, 2002, Mr. Jensen was granted options to purchase 25,000
shares of our common stock at an exercise price of $1.51 per share in connection
with his election as a member of our Board of Directors. These options vest
equally over a five-year period and are exercisable for a period of ten years.

On August 23, 2002, Messrs. Needham, Davis, Coppa, Maust, Kahn, Boyd and
Jensen were collectively granted options and warrants to purchase 30,000 shares
of our common stock at an exercise price of $1.80 per share. These options vest
equally over a five-year period and are exercisable for a period of ten years.

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.

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 and increase the interest rate to 9.5%. In September 2001, we agreed to
extend the maturity date to April 15, 2004. As of September 30, 2003, the
outstanding balance on this note amounted to approximately $158,100, including
accrued interest.

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 April 15, 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,
Messrs. Davis and Coppa each repaid $5,000 of their respective then outstanding
balances. As of September 30, 2003, the outstanding balance on these notes
amounted to approximately $66,100, including accrued interest, of which $45,000
is classified as an offset to stockholders' equity.

Messrs. Needham, Davis and Coppa have personally guaranteed a $1.1 million
note payable issued to Cryopolymers Leasing Inc. in May 1999.

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 a February 2000
offering of 11% convertible notes. The entire principal balance was outstanding
as of September 30, 2003. The warrants are 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. Dr. Kahn has been granted limited registration
rights to cause us to register for resale the common stock underlying the
warrants in the event that we register shares of common stock for our own
account. The original maturity date of the convertible notes was twelve months
after issuance and they are 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 his notes 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 with no change
in existing terms.

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 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.

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.

Related Party Transactions

We rent several pieces of equipment on a monthly basis from Valley View
Farms, Inc., a company co-owned by Mr. Maust. Rent expense associated with
payments made to Valley View Farms for the fiscal years ended September 30, 2003
and 2002 was $279,443 and $355,040, 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, 2003 with an
equipment value of $146,670.

In September 1999, our Georgia subsidiary entered into a five-year
equipment lease with Valley View Farms. Under the terms of the lease, the
subsidiary was required to pay rent of $6,421 per month and had the ability to
apply 85% of all payments made towards the purchase of the equipment at the end
of the lease. In August 2002 the subsidiary exercised its option to acquire the
equipment.

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 and
$45,100 during the fiscal years ended September 30, 2003 and 2002, respectively.

Able Tire of Oklahoma, LLC also purchased certain operating equipment from
Green Tree Resorts, a company partly owned by Mr. Humphreys, for $10,500 during
the fiscal year ended September 30, 2002.

In April 2003, our Iowa subsidiary entered into a ten-year lease agreement
with Maust Asset Management Company, LLC ("Maust Asset Management") for our Iowa
facility. Maust Asset Management is co-owned by one of our officers. 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 our former lessor. For the fiscal year
ended September 30, 2003, payments made in connection with this lease amounted
to $41,250.

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.

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

Item 13. Exhibits and Reports on Form 8-K

(a) Exhibits

The following exhibits required by Item 601 of Regulation S-B are filed as
part of this Form 10-KSB.

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(3) -- Note Purchase Agreement dated December 22, 2003 between
GreenMan Technologies, Inc. and Jed Schutz.

4.3(3) -- 10% Convertible Promissory Note dated December 22, 2003
issued to Jed Schutz.

10.1(2) -- 1993 Stock Option Plan.

10.2(2) -- Form of confidentiality and non-disclosure agreement for
executive employees.

10.3(4) -- Employment Agreement between GreenMan Technologies, Inc.
and Robert H. Davis.

10.4(1) -- Promissory Note issued by Robert H. Davis dated January
9, 1998 in favor of GreenMan Technologies, Inc.

10.5(1) -- Promissory Note issued by Robert H. Davis dated January
4, 1999 in favor of GreenMan Technologies, Inc.

10.6(1) -- Extension Agreement dated September 30, 2000 between
GreenMan Technologies, Inc. and Robert H. Davis.

10.7(1) -- Extension Agreement dated September 30, 2001 between
GreenMan and Robert H. Davis.

10.8(4) -- Employment Agreement between GreenMan Technologies, Inc.
and Charles E. Coppa.

10.9(9) -- Promissory Note issued by Charles E. Coppa dated January
4, 1999 in favor of GreenMan Technologies, Inc.

10.10(1) -- Convertible Note Payable issued October 27, 1999 by
GreenMan Technologies, Inc. to Dr. Allen Kahn.

10.11(1) -- Convertible Note Payable issued November 23, 1999 by
GreenMan Technologies, Inc. to Dr. Allen Kahn.

10.12(1) -- Convertible Note Payable issued February 18, 2000 by
GreenMan Technologies, Inc. to Dr. Allen Kahn.

10.13(1) -- Promissory note issued November 17, 2000 by GreenMan
Technologies, Inc. to Dr. Allen Kahn.

10.14(1) -- Extension Agreement dated September 30, 2000 between
GreenMan Technologies, Inc. and Dr. Allen Kahn.

10.15(1) -- Extension Agreement dated June 27, 2001 between GreenMan
Technologies, Inc and Dr. Allen Kahn.

10.16(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.

10.17(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.

10.18(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.

10.19(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.

10.20(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.

10.21(5) -- Security Agreement-Continuing Guaranty dated January 31,
2001 between GreenMan Technologies Inc. and Coast
Business Credit.

10.22(5) -- Loan Agreement dated March 29, 2001 between GreenMan
Technologies of Minnesota, Inc. Bremer Business Finance
Corporation.

10.23(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.

10.24(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.

10.25(6) -- Purchase and Sale Agreement By and Between GreenMan
Technologies of Georgia, Inc. and WTN Realty Trust dated
April 2, 2001

10.26(6) Lease Agreement By and Between WTN Realty Trust to
GreenMan Technologies of Georgia, Inc. dated April 2,
2001.

10.27(6) -- $200,000 Promissory Note by WTN Realty Trust to GreenMan
Technologies of Georgia, Inc. dated April 2, 2001.

10.28(6) -- Purchase and Sale Agreement By and Between Technical Tire
Recycling, Inc. and Tennessee Tire Recyclers, Inc. dated
April 16, 2001

10.29(6) -- $180,000 Promissory Note by Technical Tire Recycling,
Inc. to Tennessee Tire Recyclers, Inc. dated April 16,
2001.

10.30(6) -- Corporate Guarantee by GreenMan Technologies, Inc. of
$180,000 note to Tennessee Tire Recyclers, Inc. dated
April 16, 2001.

10.31(7) -- Stock Repurchase Agreement by and between GreenMan
Technologies, Inc. and Republic Services of Georgia, LP,
dated February 14, 2002.

10.32(7) -- $1,500,000 Promissory Note by GreenMan Technologies, Inc.
to Republic Services of Georgia, LP dated February 14,
2002.

10.33(8) -- Stock Repurchase Agreement by and between GreenMan
Technologies, Inc. and Republic Services of Georgia, LP
dated May 6, 2002

10.34(8) -- $750,000 Promissory Note by GreenMan Technologies, Inc.
to Republic Services of Georgia, LP dated May 6, 2002.

10.35(9) -- Extension Agreement dated September 23, 2002 between
GreenMan and Dr. Allen Kahn.

10.36(3) -- Employment Agreement dated April 1, 2003 between GreenMan
Technologies, Inc. and Maurice E. Needham

10.37(3) -- Lease - Business Property dated April 1, 2003 between
GreenMan Technologies of Iowa, Inc. and Maust Asset
Management, LLC

10.38(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.

10.39(3) -- $100,000 Promissory Note by GreenMan Technologies, Inc.
to Joyce Ritterhauss dated June 23, 2003.

10.40(3) -- $100,000 Promissory Note by GreenMan Technologies, Inc.
to Joyce Ritterhauss dated June 26, 2003.

10.41(3) -- $100,000 Promissory Note by GreenMan Technologies, Inc.
to Barbara Morey dated June 26, 2003.

10.42(3) -- $100,000 Promissory Note by GreenMan Technologies, Inc.
to Barbara Morey dated August 26, 2003.

10.43(3) -- $100,000 Promissory Note by GreenMan Technologies, Inc.
to Mart Management, Inc. dated September 30, 2003.

10.44(3) -- $400,000 Promissory Note by GreenMan Technologies, Inc.
to Robert H. Davis and Nancy Karfilis Davis dated
September 30, 2003.

10.45(3) -- Waiver agreement by Republic Services of Georgia, LP

10.46(3) -- Business Loan Agreement dated April 4, 2002 executed by
GreenMan Technologies of Iowa, Inc. and GreenMan
Technologies Inc. and First American Bank.

10.47(3) -- First Amendment dated October 7, 2002 to Business Loan
Agreement dated April 4, 2002 executed by GreenMan
Technologies of Iowa, Inc. and First American Bank.

10.48(3) -- Second Amendment dated February 25, 2003 to Business Loan
Agreement dated April 4, 2002 executed by GreenMan
Technologies of Iowa, Inc. and First American Bank.

21.1(3) -- List of All Subsidiaries

31.1(3) -- Certification of Chief Executive Officer pursuant to Rule
13a-14(a) or Rule 15d-14(a).

31.2(3) -- Certification of Chief Financial Officer pursuant to Rule
13a-14(a) or Rule 15d-14(a).

32.1(3) -- Certification of Chief Executive Officer pursuant 18
U.S.C. Section 1350

32.2(3) -- Certification of Chief Financial Officer pursuant to 18
U.S.C. Section 1350

(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 herewith.

(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.

(b) Reports on Form 8-K.

A Current Report on Form 8-K was filed on August 21, 2003, covering Item 5
("Other Information") and Item 9 ("Regulation FD Disclosure"). Our press
releases dated August 12, 2003 and August 18, 2003 were included as exhibits.

Item 14. Principal Accountant Fees and Services

Not applicable as our fiscal year ended prior to December 15, 2003.

GreenMan Technologies, Inc.
Index to Consolidated Financial Statements

Page
----

Independent Auditors' Report F-2

Consolidated Balance Sheets as of September 30, 2003 and 2002 F-3

Consolidated Statements of Operations for the Years Ended September
30, 2003 and 2002 F-4

Consolidated Statements of Changes in Stockholders' Equity for the
Years Ended September 30, 2003 and 2002 F-5

Consolidated Statements of Cash Flows for the Years Ended September
30, 2003 and 2002 F-6

Notes to Consolidated Financial Statements F-7

F-1

Independent Auditors' Report

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, 2003 and 2002 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 auditing standards generally
accepted in the United States of America. 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, 2003 and 2002 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 2003 financial statements, the Company has
suffered a substantial loss from operations in the current year and has a
working capital deficiency of $4,022,371. 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 2003 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 17, 2003

F-2

GreenMan Technologies, Inc.
Consolidated Balance Sheets

September 30,
2003 2002
------------ ------------

ASSETS
Current assets:
Cash and cash equivalents ................................ $ 990,745 $ 780,497
Accounts receivable, trade, less allowance for doubtful
accounts of $148,031 and $196,920 as of September 30,
2003 and 2002 ......................................... 3,368,435 4,072,535
Insurance claim receivable ............................... 634,172 --
Equipment held for sale .................................. -- 213,333
Note receivable officers ................................. 179,172 --
Product inventory ........................................ 112,419 133,530
Other current assets ..................................... 1,119,872 1,151,923
------------ ------------
Total current assets .................................. 6,404,815 6,351,818
------------ ------------
Property, plant and equipment, net ......................... 11,249,706 10,845,337
------------ ------------
Other assets:
Deferred loan costs ...................................... 221,931 313,603
Goodwill, net ............................................ 3,413,894 3,413,894
Customer relationship intangibles, net ................... 234,875 247,475
Note receivable .......................................... -- 200,000
Note receivable officers ................................. -- 165,884
Deferred tax asset ....................................... 270,000 270,000
Other .................................................... 299,699 145,233
------------ ------------
Total other assets .................................... 4,440,399 4,756,089
------------ ------------
$ 22,094,920 $ 21,953,244
============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable, current ................................... $ 3,748,663 $ 2,743,187
Accounts payable ......................................... 4,350,643 2,576,647
Accrued expenses, other .................................. 1,384,652 1,184,261
Notes payable related parties, current ................... 520,000 --
Obligations under capital leases, current ................ 423,228 345,090
------------ ------------
Total current liabilities ............................. 10,427,186 6,849,185
Notes payable, related parties, non-current portion ...... 975,000 575,000
Notes payable, non-current portion ....................... 5,726,958 6,789,932
Obligations under capital leases, non-current portion .... 1,986,828 2,176,000
------------ ------------
Total liabilities ..................................... 19,115,972 16,390,117
------------ ------------

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
at September 30, 2003 and 20,000,000 shares authorized
at September 30, 2002: 16,061,939 and 15,654,665 shares
issued and outstanding at September 30, 2003 and 2002 . 160,619 156,547
Additional paid-in capital ............................... 28,778,002 28,473,710
Accumulated deficit ...................................... (25,914,673) (23,022,130)
Notes receivable, common stock ........................... (45,000) (45,000)
------------ ------------
Total stockholders' equity ............................ 2,978,948 5,563,127
------------ ------------
$ 22,094,920 $ 21,953,244
============ ============

See accompanying notes to consolidated financial statements.

F-3

GreenMan Technologies, Inc.
Consolidated Statements of Operations

Years Ended September 30,
2003 2002
------------ ------------
Net sales ....................................... $ 29,679,992 $ 27,451,633
Cost of sales ................................... 25,702,011 21,197,009
------------ ------------
Gross profit .................................... 3,977,981 6,254,624
Operating expenses:
Selling, general and administrative .......... 5,434,270 4,398,146
Impairment loss .............................. 261,278 --
------------ ------------
5,695,548 4,398,146
------------ ------------
Operating income (loss) ......................... (1,717,567) 1,856,478
------------ ------------
Other income (expense):
Interest and financing costs, net ............ (1,386,084) (1,231,248)
Casualty income, net ......................... 431,594 --
Other, net ................................... (130,456) 10,468
Loss on disposal of assets, net .............. (89,480) --
Forgiveness of indebtedness .................. -- 177,929
------------ ------------
Other (expense), net ....................... (1,174,426) (1,042,851)
------------ ------------
Net income (loss) before income taxes ........... (2,891,993) 813,627
Benefit (provision) for income taxes ............ (550) 204,400
------------ ------------
Net income (loss) ............................... $ (2,892,543) $ 1,018,027
============ ============
Net income (loss) per share - basic ............. $ (0.18) $ 0.07
============ ============
Net income (loss) per share - diluted ........... $ (0.18) $ 0.06
============ ============

Weighted average shares outstanding - basic ..... 15,794,634 14,586,538
============ ============
Weighted average shares outstanding - diluted ... 15,794,634 16,624,109
============ ============

See accompanying notes to consolidated financial statements.

F-4

GreenMan Technologies, Inc.
Consolidated Statements of Changes in Stockholders' Equity
Years Ended September 30, 2003 and 2002

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

Balance, September 30, 2001 .... 320,000 $ 3,200,000 13,648,231 $136,482 $23,659,072 $(24,040,157) $(55,000) $ 2,900,397
Repurchase of preferred stock .. (320,000) (3,200,000) 100,000 1,000 1,699,000 -- -- (1,500,000)
Common stock issued for
business acquisitions ........ -- -- 191,778 1,918 334,242 -- -- 336,160
Common stock issued in
connection with partial
conversion of note payable ... -- -- 300,000 3,000 747,000 -- -- 750,000
Common stock issued upon
exercise of options .......... -- -- 54,313 543 46,397 -- -- 46,940
Common stock and warrants
issued in connection with
service agreement ............ -- -- 30,000 300 47,700 -- -- 48,000
Sale of common stock ........... -- -- 1,330,343 13,304 1,940,299 -- -- 1,953,603
Repayment of notes receivable,
common stock ................. -- -- -- -- -- -- 10,000 10,000
Net income for the year ended
September 30, 2002 ........... -- -- -- -- -- 1,018,027 -- 1,018,027
-------- ----------- ---------- -------- ----------- ------------ -------- -----------
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
======== =========== ========== ======== =========== ============ ======== ===========

See accompanying notes to consolidated financial statements.

F-5

GreenMan Technologies, Inc.
Consolidated Statements of Cash Flows

Years Ended September 30,
2003 2002
----------- -----------

Cash flows from operating activities:
Net income (loss) .................................................. $(2,892,543) $ 1,018,027
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation ....................................................... 2,177,673 1,859,815
Loss on disposal of property, plant and equipment .................. 89,480 730
Casualty loss ...................................................... 153,719 --
Amortization ....................................................... 94,157 88,765
Impairment loss .................................................... 261,278 --
Deferred income tax benefit ........................................ -- (270,000)
Common stock and warrants issued for services ...................... -- 24,000
Forgiveness of indebtedness ........................................ -- (177,929)
Decrease (increase) in assets:
Accounts receivable .............................................. 704,100 (526,189)
Insurance claim receivable ....................................... (634,172) --
Product inventory ................................................ 21,111 (54,564)
Other current assets ............................................. 32,051 (29,183)
Increase in liabilities:
Accounts payable ................................................. 1,773,996 27,398
Accrued expenses ................................................. 180,918 66,504
----------- -----------
Net cash provided by operating activities ..................... 1,961,768 1,726,014
----------- -----------
Cash flows from investing activities:
Purchase of property and equipment ................................. (3,653,257) (2,022,472)
Increase to construction work in process ........................... 848,515 (848,515)
Increase in notes receivable, officers ............................. (13,288) --
Proceeds on sale of property and equipment and other assets ........ 250,000 180,000
Repayment of note receivable ....................................... 200,000 --
Acquisition of businesses, net of cash acquired .................... -- (608,437)
(Increase) in other assets ......................................... (154,466) (263,708)
----------- -----------
Net cash used for investing activities ........................ (2,522,496) (3,563,132)
----------- -----------
Cash flows from financing activities:
Deferred financing costs ........................................... (12,948) (28,405)
Proceeds from notes payable ........................................ 1,773,682 836,157
Proceeds from notes payable, related parties ....................... 920,000 --
Repayment of notes payable ......................................... (1,733,696) (1,350,468)
Net advances (repayments) under line of credit .................... (97,484) 736,146
Repayment of notes payable, related party .......................... -- 10,000
Principal payments on obligations under capital leases ............. (386,942) (315,793)
Cash received upon exercise of stock options and
warrants ........................................................... 128,364 --
Net proceeds on the sale of common stock ........................... 180,000 1,953,603
----------- -----------
Net cash provided by financing activities ..................... 770,976 1,888,180
----------- -----------
Net increase in cash and cash equivalents ............................. 210,248 352,422
Cash and cash equivalents at beginning of year ........................ 780,497 428,075
----------- -----------
Cash and cash equivalents at end of year .............................. $ 990,745 $ 780,497
=========== ===========
Supplemental cash flow information:
Property and equipment acquired under capital leases ................ $ 275,908 $ 310,139
Interest paid ....................................................... 1,329,337 1,119,035
Common stock issued in acquisitions ................................. -- 336,160
Debt issued in acquisitions ......................................... -- 1,866,410
Repurchase of preferred stock for note payable ...................... -- 1,500,000
Common stock issued on conversion of notes payable .................. -- 750,000
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 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 Florida, Georgia, Illinois, Missouri, Tennessee
and Texas.

The 2003 financial statements have been prepared assuming we will continue
as a going concern. We have incurred a substantial loss from operations in the
current year, and have a working capital deficiency of $4,022,371 at September
30, 2003. These factors raise substantial doubt about our ability to continue as
a going concern. We have engaged an investment bank to assist us in raising up
to $3,500,000 in equity financing through a private offering of common stock
which commenced in December 2003. We have invested substantial amounts of
capital in new equipment to increase processing capacity at our Iowa, Minnesota
and Georgia locations, as well as reconfigured our Wisconsin location to
substantially reduce operating costs and maximize our return on assets.
Additionally, management continues to negotiate more favorable tipping fees with
kiln relationships is several markets with the ultimate goal of substantially
reducing these fees from current levels. We also continue to seek more favorable
alternatives to our current working capital line of credit arrangement. Our
ability to resume profitable operations, raise needed equity capital, or obtain
more favorable sources of financing cannot be determined at this time. 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 equipment held for resale, notes receivable and other
assets and liabilities could differ materially from the values recorded in the
accompanying financial statements as of September 30, 2003.

Reclassification

Certain amounts in the 2002 consolidated financial statements have been
reclassified to conform to the 2003 presentation.

Cash Equivalents

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

Accounts Receivable

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

Product Inventory

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

Property, Plant and Equipment

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

F-7

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

1. Summary of Significant Accounting Policies - (Continued)

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 for our wholly-owned subsidiaries in Minnesota, Iowa and Georgia.

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 have elected to continue to apply the accounting in
Accounting Principles Board Opinion No. 25 and, as a result, have provided pro
forma disclosures of net income and earnings per share and other disclosures, as
if the fair value based method of accounting had been applied. (See Note 11)

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 income (loss) and net income (loss) per share would have been adjusted to
the pro forma amounts indicated below:

Year Ended Year Ended
September 30, September 30,
2003 2002
------------- -------------
Net income (loss):
As reported $(2,892,543) $1,018,027
Pro forma (3,041,312) 808,836
Net income (loss) per share - basic:
As reported $ (0.18) $ 0.07
Pro forma $ (0.19) $ 0.06
Net income (loss) per share - diluted:
As reported $ (0.18) $ 0.06
Pro forma $ (0.19) $ 0.05

The fair value of each option grant 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 used for grants during the years ended September 30, 2003
and 2002: dividend yields of 0%; risk-free interest rates of 3.0%; expected
volatility of 32% in 2003 and 50% in 2002 and expected lives of 5 years.

Impairment of Long Lived Assets and Assets to be Disposed Of

Management continually reviews long-lived assets, goodwill and certain
identifiable intangibles to evaluate whether events or changes in circumstances
indicate an impairment of carrying value. Such reviews include an analysis of
current results and take into consideration the discounted value of projected
operating cash flows (earnings before interest, taxes, depreciation and
amortization). An impairment charge would be recognized when expected future
operating cash flows are lower than the carrying value of the assets.

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 year ended September 30, 2003, since the effect of the inclusion of all
outstanding options, warrants and convertible debt would be anti-dilutive. The
assumed conversion of outstanding dilutive stock options, warrants and
convertible debt for the year ended September 30, 2002 would increase the shares
outstanding and would require an adjustment to increase income by $38,250 as a
result of the conversion.

F-8

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

1. Summary of Significant Accounting Policies - (Continued)

Net income per common share for the fiscal year ended September 30, 2002 has
been computed based on the following:

Net income applicable to common stock ...................... $ 1,018,027
===========

Average number of common shares outstanding ................ 14,586,538
Effect of dilutive options, warrants and convertible debt .. 2,037,571
-----------
Average number of common shares outstanding used to
calculate diluted net income per share .................. 16,624,109
===========

New Accounting Pronouncements

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133
on Derivative Instruments and Hedging Activities." This Statement amends SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities" and
clarifies accounting for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities under SFAS
No. 133. This Statement is effective for contracts entered into or modified
after June 30, 2003, except in certain circumstances, and for hedging
relationships designated after June 30, 2003. This Statement did not have a
material effect on our consolidated financial statements.

In January 2003, the FASB issued Interpretation No. 46, Consolidation of
Variable Interest Entities (FIN 46) which establishes guidance for determining
when an entity should consolidate another entity that meets the definition of a
variable interest entity. FIN 46 requires a variable interest entity to be
consolidated by a company if that company will absorb a majority of the expected
losses, will receive a majority of the expected residual returns, or both. On
December 17, 2003, the FASB deferred the effective date of FIN 46 to no later
than the end of the first reporting period that ends after March 15, 2004,
however, for special-purpose entities the Corporation would be required to apply
FIN 46 as of December 31, 2003. The Interpretation had no effect on our
consolidated financial statements.

2. Acquisition of Businesses

On January 1, 2002, GreenMan Technologies of Wisconsin, Inc., a newly
formed wholly-owned subsidiary of our Minnesota subsidiary acquired the
operations and certain processing equipment of An-Gun, Inc. ("An-Gun"), a
Wisconsin based company in the business of collecting, processing and marketing
of scrap tires.

On April 4, 2002 GreenMan Technologies of Iowa, Inc., our newly formed,
wholly-owned subsidiary acquired the Iowa based tire collection and processing
operations of Utah Tire Recyclers, Inc. ("UT").

On July 1, 2002 GreenMan Technologies of California, Inc, our newly
formed, wholly-owned subsidiary acquired the outstanding common stock of
Unlimited Tire Technologies, Inc. ("UTT"), an Azusa, California based company in
the business of collecting, processing and marketing of scrap tires.

F-9

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

2. Acquisition of Businesses - (Continued)

Each of the acquisitions 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 aggregate consideration, exclusive of debt assumed for
the acquisitions consisted of $608,437 in cash, 191,778 shares of unregistered
shares of our common stock valued at $336,160 and the issuance of $1,866,410 of
long term debt. The total consideration paid exceeded the fair value of the net
assets acquired by $1,493,696 resulting in the recognition of $1,241,696 of
goodwill and $252,000 assigned to customer relationships. Customer relationships
are being amortized over an estimated useful life of 20 years on a straight-line
basis and are evaluated annually. Amortization expense associated with customer
relationships amounted to $12,600 and $4,525 for the years ended September 30,
2003 and 2002, respectively.

The changes in the carrying amount of goodwill for the year ended
September 30, 2002, are as follows:

Balance as of September 30, 2001........ $ 2,172,198
Goodwill acquired during the year....... 1,241,696
-----------
Balance as of September 30, 2002........ $ 3,413,894
===========

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.

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.

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. We estimate that losses
sustained as a result of the fire amounted to approximately $390,000, excluding
business interruption losses, and before considering insurance recoveries.

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 $431,594, which is classified as other income
in the accompanying statement of operations. As of September 30, 2003, advances
amounting to $187,000 had been previously received from our insurance carrier;
accordingly, the accompanying balance sheet reflects an insurance claim
receivable of $634,172 as of September 30, 2003. In December 2003, the
receivable was collected together with an additional $208,713 associated with
losses sustained during fiscal 2004.

5. Notes Receivable, Officers

In January 1998, $104,000 was advanced to an officer 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 2004) and increase the interest rate to
9.5%. As of September 30, 2003, the balance receivable on this note amounted to
$158,087, including accrued interest.

In January 1999, two officers were advanced a total of $55,000, in
aggregate, under 8.5% secured loan agreements with both principal and interest
due January 2002 (subsequently extended to April 15, 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. As of September 30, 2003, the amount receivable on these
notes including interest amounted to $66,087, of which $45,000 relates to a
stock subscription receivable and is classified as an offset to stockholders'
equity.

F-10

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

6. Property, Plant and Equipment

Property, plant and equipment consists of the following:

Estimated
September 30, September 30, Useful
2003 2002 Lives
------------- ------------ -----------

Land ............................... $ 504,346 $ 336,365
Buildings .......................... 2,704,693 2,245,891 10-20 years
Machinery and equipment ............ 9,526,045 7,875,139 5-10 years
Furniture and fixtures ............. 284,484 169,721 3-5 years
Motor vehicles ..................... 5,904,050 5,410,434 3-10 years
Construction work in process ....... -- 848,515
------------ ------------
18,923,618 16,886,065
Less accumulated depreciation
And amortization (7,673,912) (6,040,728)
------------ ------------
Property, plant and equipment, net $ 11,249,706 $ 10,845,337
============ ============

During the fourth quarter of fiscal 2002, we initiated a $1.5 million
equipment upgrade to our Des Moines, Iowa tire processing facility to replace
all tire shredders with more efficient, higher volume equipment and to install
our third waste wire processing equipment line in order to reduce waste wire
disposal costs as well as provide the internal capacity to produce rubber
feedstock for our crumb rubber operations. The upgrade was completed during the
quarter ended March 31, 2003. At September 30, 2002, we had $848,515 of
construction work in process relating to this initiative.

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.

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. We
intend to either utilize the available shredding equipment at other GreenMan
locations or initiate an effort to sell the excess equipment.

Depreciation and amortization expense for the fiscal years ended September
30, 2003 and 2002 was $2,177,673 and $1,859,815 respectively.

7. Credit Facility/Notes Payable

In August 1998, our former Louisiana crumb rubber processing facility was
severely damaged by a fire, which necessitated the closure of this operation in
December 1998. As a result of the fire, certain cryogenic equipment we were
leasing from Cryopolymers Leasing, Inc. ("Cryopolymers Leasing"), under an
October 1997 agreement was destroyed.

On May 14, 1999, we reached a settlement agreement Cryopolymers Leasing
valued at $3,255,000, whereby they agreed to assign to us all interest in and to
any additional insurance proceeds to be received as a result of the fire;
transfer ownership of some additional cryogenic rubber recycling equipment to
us; and withdraw from all legal proceedings against us. As part of the
settlement agreement, we issued a $1,100,000 sixty-month note payable, bearing
interest at 7.75% with monthly payments of $7,553 and a balloon payment due June
2004. The $1,100,000 note payable is personally guaranteed by three of our
officers.

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. The
Credit Facility consisted of approximately $3 million of term loans secured by
machinery and equipment, a working capital line of credit of up to $2.3 million
secured by eligible accounts receivable, as defined and approximately $1.6
million of bridge loans secured by all real estate of the entities. The bridge
loans were repaid in 2001. We also incurred approximately $346,000 of deferred
loan costs incurred securing the Credit Facility. These deferred charges are
being amortized to interest expense over the life of the term notes.
Amortization expense amounted to $84,014 for each of the fiscal years

F-11

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

7. Credit Facility/Notes Payable - (Continued)

ended September 30, 2003 and 2002. As of September 30, 2003, the unamortized
balance of deferred financing charges relating to this obligation was $181,156.

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. The obligations under the Credit Facility are guaranteed by us
and contain certain minimum reporting requirements and certain restrictions on
intercompany transactions with which we were in compliance at September 30,
2003.

On March 29, 2001, our Minnesota subsidiary executed a five-year, $950,000
secured term note (secured with all Minnesota real estate) with Bremer Business
Finance Corporation, ("Bremer") payable in monthly installments including
interest at prime plus 2.75% for the first 36 months thereafter decreasing to
prime plus 2.25% until maturity based on a 15 year amortization. The proceeds of
the term notes were used to repay the Minnesota portion of the Coast bridge loan
of $822,250, including interest. We incurred $41,700 of deferred loan costs
associated with the transaction, which are being amortized to interest expense
over the life of the term note. Amortization of deferred charges was $8,340 for
each of the fiscal years ended September 30, 2003 and 2002.

In connection with the February 14, 2002, repurchase and retirement of all
of the Class B convertible Preferred Stock held by Republic Services of Georgia,
Limited Partnership ("RSLP") (as successor to United Waste Services, Inc.), we
issued a $1,500,000 promissory note bearing interest at 10% and due in February
2007 and 100,000 shares of our common stock valued at $1.60 per share on the
date of issuance (See Note 11).

On May 6, 2002, RSLP 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 RSLP a promissory note in the principal
amount of $743,750 bearing interest at 10% and due in March 2007. As of
September 30, 2003, four payments totaling $35,845 were past due. In addition,
we have not made the required monthly payments through December 2003. RSLP has
agreed to waive any and all defaults resulting from our failure to make such
payments.

On April 4, 2002, our Iowa subsidiary executed a five-year, $1,185,000
secured term note and a $300,000 line of credit (secured with all Iowa assets)
with First American Bank ("First American"), payable in monthly installments of
$23,735, with a final payment of unpaid principal and accrued interest on April
1, 2007. The term note bears interest at 7.5% and the line of credit bears
interest the prime rate plus 1%. The proceeds of this term note were used in
connection with the acquisition of UT. We incurred $34,425 of deferred loan
costs associated with the transaction, which are being amortized to interest
expense over the life of the term note. Amortization of deferred charges for the
years ended September 30, 2003 and 2002, amounted to $11,649 and $2,850,
respectively.

In September 2002, our Iowa subsidiary executed a ten-year, $331,867
secured term note (secured by certain assets) with the State of Iowa, payable in
quarterly installments of $8,449, with a final payment of unpaid principal and
accrued interest in November 2012. The term note bears interest at 1.5%. The
proceeds of this term note were used to purchase machinery and equipment.

On February 13, 2003, our Iowa subsidiary amended its existing term debt,
capital expenditure line and increased its working capital line of credit to
$500,000 under the terms of a five-year, $1,760,857 secured term note with First
American. The note is payable in sixty monthly installments of $34,660 and is
secured with all Iowa assets. The term note bears interest at 7.5% and the line
of credit bears interest a prime rate plus 1%.

F-12

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

7. Credit Facility/Notes Payable - (Continued)

September 30, September 30,
Notes payable consists of the following at: 2003 2002
----------- -----------

Term note payable, Cryopolymers Leasing, guaranteed by three officers, due in
monthly installments of $7,553 including interest at 7.75% with the remaining
principal balance due June 2004 ...................................................... $ 1,072,351 $ 1,079,576
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% (6.0% at September 30, 2003) ....... 565,188 893,670
Line of credit, First American, secured by all assets of GreenMan Technologies
of Iowa, bearing interest at prime plus 1.0% (5.00% at September 30, 2003) ........... 450,000 219,000
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% (6.5% at September 30, 2003) ............................................... 987,934 1,396,734
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%
(6.5% at September 30, 2003) ......................................................... 425,541 552,828
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% (6.75% at September 30, 2003) for 36 months then prime plus 2.25% ......... 884,747 914,293
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 ... 690,625 728,125
Term note payable, First American, secured by assets of GreenMan Technologies of
Iowa, due in monthly installments of $23,735 including interest at 7.5% with
the remaining principal balance due April 2007 ....................................... -- 985,072
Term note payable, First American, secured by assets of GreenMan Technologies
of Iowa, due in equal monthly installments of $33,425 including interest at 7.5% .... 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 .............. 310,083 331,867
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 5.0% with the remaining principal balance due March 2011 ................. 493,530 543,038
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 .. 317,788 --
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 .................................................................. 1,699,255 1,888,916
----------- -----------
9,475,621 9,533,119

Less current portion ................................................................... (3,748,663) (2,743,187)
----------- -----------
Notes payable, non-current portion ................................................... $ 5,726,958 $ 6,789,932
=========== ===========

The following is a summary of maturities of all notes payable at September 30,
2003:

Years Ending September 30,
--------------------------
2004 ......................... $3,748,663
2005.......................... 1,550,099
2006 ......................... 1,880,210
2007 ......................... 1,317,974
2008 ......................... 552,141
2009 and thereafter........... 426,534
----------
$9,475,621
==========

Interest expense on the lines of credit and notes payable for the years
ended September 30, 2003 and 2002 amounted to $873,959 and $842,376,
respectively.

F-13

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

8. Notes Payable - Related Party

Notes Payable, Related Party consists of the following:

Convertible Notes Payable-Related Party

As of September 30, 2003, one of our directors is owed $300,000 under the
terms of an October 1999 private offering of 10% convertible notes payable and
warrants and $75,000 under the terms of a February 2000 offering of 11%
convertible notes payable and warrants. The director was issued immediately
exercisable five year warrants to purchase 125,000 shares of our common stock at
exercise prices ranging from $.31 to $.50 per share and has been granted
piggy-back registration rights to register the underlying shares of common stock
(See Note 11). The convertible notes payable 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 the conversion price to $.75 per share. In
September 2002, the director again agreed to extend the maturity of and defer
interest due on each note for an additional twenty-four months from their
extended maturity dates which range from October 2004 to February 2005.

Note Payable-Related Party

In November 2000, we borrowed $200,000 from the same director who holds
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. (See Note 11)

During the period from June to August 2003, two immediate family members
of an officer loaned us $400,000 in aggregate, under the terms of two year,
unsecured note payable which bears interest at 12% per annum with interest due
quarterly and the principal due upon maturity through August 2005.

On September 30, 2003, our Georgia landlord loaned us $100,000 under the
terms of a September 30, 2003 unsecured note payable which bears interest at 12%
per annum with interest due quarterly and the principal due September 30, 2004.

In September 2003, one of our officers loaned us $400,000 under the terms
of a September 30, 2003 unsecured note payable which bears interest at 12% per
annum with interest due quarterly and the principal due March 31, 2004.

The following is a summary of maturities of all related party notes payable at
September 30, 2003:

Years Ending September 30,
--------------------------
2004 ......................... $ 520,000
2005.......................... 975,000
-----------
$ 1,495,000
===========

Total interest expense for related party notes amounted to $76,717 and
$62,250, for the fiscal years ended September 30, 2003 and 2002, respectively.
Total accrued interest due related parties amounted to $175,754 and $115,617 at
September 30, 2003 and 2002, respectively.

For additional related party transactions see Notes 9 and 10.

9. 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 $387 to $17,642. Assets acquired under capital leases with an
original cost of $3,291,481 and $3,015,574 and related accumulated amortization
of $968,860 and $565,480 are included in property, plant and equipment at
September 30, 2003 and 2002, respectively. Amortization expense for the years
ended September 30, 2003 and 2002 amounted to $403,380 and $193,891
respectively.

In April 2001, our Georgia subsidiary 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.

F-14

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

9. Capital Leases - (Continued)

In July 2002, our Minnesota subsidiary entered into a four-year equipment
lease with a company co-owned by an officer 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 August 1999, our South Carolina subsidiary entered into a five-year
lease agreement for equipment valued at $610,973. Under the terms of the lease,
we are required to pay $12,234 per month rental. In March 2000, the leased
equipment and related lease obligation was transferred to our Minnesota
subsidiary, which assumed responsibility for all future lease obligations. The
lease is classified as a capital lease.

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, 2003:

Years Ending September 30,
--------------------------
2004 ................................... $ 715,782
2005 ................................... 547,990
2006 ................................... 529,040
2007 ................................... 327,315
2008 ................................... 240,771
2009 and thereafter .................... 2,999,026
-----------
Total minimum lease payments .............. 5,359,924
Less amount representing interest ......... (2,949,868)
-----------
Present value of minimum lease payments ... $ 2,410,056
===========

For the years ended September 30, 2003 and 2002, interest expense on
capital leases amounted to $349,556 and $326,264, respectively.

10. 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
officers. 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 our former lessor.

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 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.

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.

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.

For the years ended September 30, 2003 and 2002, total rental expense in
connection with all non-cancellable real estate leases amounted to $299,244 and
$122,100 respectively, of which $49,500 was applicable to the related-party
lease in 2003.

F-15

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

10. Commitments and Contingencies - (Continued)

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
officer. Monthly rent ranges from $321 to $2,800.

For the fiscal years ended September 30, 2003 and 2002, total rent expense
in connection with vehicle and equipment leases amounted to $195,886 and
$173,069, respectively, of which, $147,649 and $118,693 was to related parties.

The total future minimum rental commitment at September 30, 2003 under the
above operating leases follows:

Year ending September 30: Real Estate Equipment Total
----------- --------- ----------
2004 $ 297,504 $ 52,192 $ 349,696
2005 297,504 40,711 338,215
2006 174,840 12,117 186,957
2007 167,340 -- 167,340
2008 149,130 -- 149,130
Thereafter 486,000 -- 486,000
---------- -------- ----------
$1,572,318 $105,020 $1,677,338
========== ======== ==========

Litigation

In October 2001, we commenced an action in the Supreme Court of the State
of New York, County of Albany, against Acorn Processing, Inc. and TransWorld
Equipment Sales, Inc. seeking the return of certain cryogenic equipment or a
payment of $550,000. In November 2001 Acorn Processing filed several
counterclaims against us and TransWorld, seeking damages of $250,000.

In May 2002, the parties agreed to settle all of these claims in return
for a payment of $180,000 to us. We received the $180,000 payment on June 6,
2002 and all legal proceedings have been terminated.

11. 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.

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 ("RSLP") (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 our common stock valued at $1.60 per share on the date of
issuance. The difference between the liquidation value of the preferred stock
and the consideration given has been credited to paid-in-capital.

On May 6, 2002, RSLP 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 RSLP 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.

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 have 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.

F-16

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

11. Stockholders' Equity - (Continued)

Other Common Stock Transactions

On April 1, 2002, we executed a one-year financial consulting agreement
with a third party. In exchange for services to be provided, we agreed to (1)
issue 30,000 shares of our unregistered common stock valued at $37,000 which
vest over the term of the agreement and (2) issue warrants to purchase 150,000
shares of common stock (valued at $11,000) exercisable commencing in April 2002
through April 2005 at prices ranging from $2.25 to $4.50 per share.

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.

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.

Our Board of Directors will grant options and establish the terms of the
grant in accordance with the provisions of the 1993 Stock Option Plan. Stock
options granted are summarized as follows:

Year Ended Year Ended
September 30, 2003 September 30, 2002
--------------------- ---------------------
Weighted Weighted
Average Average
Exercise Exercise
Shares Price Shares Price
--------- ------- --------- -------

Outstanding at beginning of period 2,113,000 $ 0.90 1,962,000 $ 0.89
Granted -- -- 255,000 1.27
Canceled (60,000) 1.17 (102,800) 0.76
Exercised (69,106) .57 (1,200) 1.09
--------- ---------
Outstanding at end of period 1,983,894 .91 2,113,000 0.90
========= =========
Exercisable at end of period 1,533,094 .95 1,201,800 0.97
========= =========
Reserved for future grants at
end of period 936,880 876,880
========= =========
Weighted average fair value of
options granted during the period $ -- $ 0.78

Information pertaining to options outstanding under the plan at September 30,
2003 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 - .53 728,000 6.7 $ .49 470,600 $ .50
$ .81 - 1.09 1,127,894 4.9 .97 1,000,894 .99
$ 1.35 5,000 .6 1.35 5,000 1.35
$ 1.50 - 4.70 123,000 6.7 2.74 56,600 3.85
--------- --------
1,983,894 5.6 $0.91 1,533,094 $0.95
========= =========

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

F-17

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

11. Stockholders' Equity - (Continued)

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, 2003, 26,000 options have been
granted under this Plan with 16,000 outstanding and exercisable at prices
ranging from $.38 to $1.95 per share.

In December 2001, a former director exercised 4,000 non-employee director
options to purchase unregistered shares of our common stock at prices ranging
from $.59 to $.88 per share. In addition, the former director exercised an
additional 4,000 non-employee director options using a net exercise feature, and
was issued 241 shares of our unregistered common stock.

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.

During the fiscal year ended September 30, 2003, options were granted to
purchase 6,000 shares of common stock at $1.95 per share and during the fiscal
year ended September 30, 2002, options were granted to purchase 4,000 shares of
our common stock at $1.60 per share. The options are exercisable for a period of
ten years. The weighted average fair value of the options on the date of grant
was $.41 and $.42 per share, respectively, for the years ended September 30,
2003 and 2002.

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.

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

Outstanding at beginning of period 2,474,900 $ 3.41 2,324,900 $3.51
Granted -- -- 225,000 1.50
Canceled (270,000) 22.24 (25,000) .41
Exercised (200,000) .41 (50,000) .88
--------- --------
Outstanding at end of period 2,004,900 1.28 2,474,900 3.41
========= =========
Exercisable at end of period 1,814,900 1.33 1,896,400 4.10
========= =========

Weighted average fair value of
options granted during the period $ -- $1.50

.50 - 1.09 1,592,500 5.8 $ .91 1,192,500 $ .95
$1.50 - 4.50 375,000 2.6 2.03 315,000 2.60
$5.00 - 5.65 37,400 2.0 5.58 37,400 5.58
--------- ---------
2,004,900 5.1 $1.28 1,544,900 $1.33
========= =========

F-18

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

11. Stockholders' Equity - (Continued)

Common Stock Reserved

We have reserved common stock at September 30, 2003 as follows:

Stock option plans ..................... 2,962,774
Other stock options .................... 1,151,500
Other warrants ......................... 853,400
---------
4,967,674
=========

12. 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, 2003 and
2002, respectively.

13. 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.

14. Major Customers

During the fiscal year ended September 30, 2003, no one customer accounted
for more than 10% of our consolidated net sales. During the fiscal year ended
September 30, 2002, one customer accounted for approximately 10% of our
consolidated net sales.

F-19

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

15. Income Taxes

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

September 30, September 30,
2003 2002
------------- -------------

Current:
Federal ................................... $ -- $ --
State ...................................... 550 65,600
------- ---------
550 65,600
------- ---------
Deferred federal and state taxes ............ -- (270,000)
------- ---------
Total (benefit) provision for income taxes .. $ 550 $(204,400)
======= =========

The difference in 2003 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. A reconciliation of the statutory federal income tax rate as a
percentage of pre-tax income for 2002 is as follows:

September 30,
2002
-------------

Statutory rate............................. 34.0%
State income taxes, net of federal benefit.. 5.3
Benefit derived from net operating loss
carry forward not previously provided for. (31.2)
Change in valuation reserve on net deferred tax
assets.................................... (33.2)
-----
Effective tax rate.......................... (25.1)%
=====

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 following differences give rise to deferred income taxes:

September 30, September 30,
2003 2002
------------- -------------

Net operating loss carry forwards........ $ 8,237,000 $ 6,935,000
Differences in fixed asset bases......... (477,000) (408,000)
Capital loss carryover................... 220,000 220,000
Other, net............................... 73,000 137,000
----------- -----------
8,053,000 6,884,000
Valuation reserve ....................... (7,783,000) (6,614,000)
----------- -----------
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,
2003 2002
------------- -------------
Balance at beginning of period ............. $ 6,614,000 $ 7,209,000
Decrease due to expected realization of
net operating loss carry forward......... -- (270,000)
Increase due to rate differentials and
current period operating results......... 1,169,000 (325,000)
----------- -----------
Balance at end of period ................... $ 7,783,000 $ 6,614,000
=========== ===========

F-20

GreenMan Technologies, Inc.
Notes To Consolidated Financial Statements

15. Income Taxes - (Continued)

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. In light of the nature
and character of losses sustained in the current year, we have evaluated the
realizability of the net deferred tax asset and concluded that based on
projected net income in future years, the amount of $270,000 is still estimated
to 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, 2003, we had net operating loss carry forwards of
approximately $20,593,000. The Federal and state net operating loss carry
forwards expire in varying amounts beginning in 2008 and 2002, 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 2008. 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.

16. .Fair Value of Financial Instruments

At September 30, 2003 and 2002, 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
$375,000 convertible note payable is $455,000 and $650,000 at September 30, 2003
and 2002, respectively based upon the intrinsic value of the conversion feature
on those dates (see Note 8).

17. Subsequent Events

Private Offering of Common Stock

Convertible Note Payable

In December 2003, we entered into a note purchase agreement (the "Note
Agreement") with an investor (the "Note 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 is
convertible at the option of the holder at any time prior to maturity but the
Note shall automatically, and without action on the part of Holder, be converted
upon the closing of the offering of investment units described above into
special investment units (the "SIUnits") at a price equal to $1.07 per SIUnit
with each SIUnit consisting of one share of unregistered common stock and a
warrant (the "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
reflect a beneficial conversion feature amounting to approximately $154,000
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 allocated to the common stock conversion option. The beneficial conversion
feature will be recorded as a debt issuance discount and a corresponding credit
to paid-in capital, and will be amortized to interest expense over the term of
the Note, or upon conversion.

F-21

SIGNATURES

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

GreenMan Technologies, Inc.

/s/ Robert H. Davis
---------------------
Robert H. Davis
Chief Executive Officer

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

Signature Title(s) Date
--------- -------- ----

/s/ Maurice E. Needham Chairman of the Board February 11, 2004
----------------------
Maurice E. Needham

/s/ Robert H. Davis Chief Executive Officer, February 11, 2004
------------------- President
Robert H. Davis and Director

/s/ Charles E. Coppa Chief Financial Officer, February 11, 2004
-------------------- Treasurer and Secretary
Charles E. Coppa (Principal Financial Officer February 11, 2004
and Principal
Accounting Officer)

/s/ Lew F. Boyd Director February 11, 2004
---------------
Lew F. Boyd

/s/ Dr. Allen Kahn Director February 11, 2004
------------------
Dr. Allen Kahn

/s/ Lyle Jensen Director February 11, 2004
---------------
Lyle Jensen

F-22