As filed with the Securities and Exchange Commission on March 5, 1997
Registration No. __________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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GREENMAN TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-13776 71-0724248
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification
Number)
7 Kimball Lane, Building A
Lynnfield, Massachusetts 01940
(617) 224-2411
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Maurice E. Needham
Chief Executive Officer
GreenMan Technologies, Inc.
7 Kimball Lane, Building A
Lynnfield, Massachusetts 01940
(617) 244-2411
(Name, address, including zip code, telephone number, including area code,
of agent for service)
Copy to:
John A. Piccione, Esq.
Sullivan & Worcester LLP
One Post Office Square
Boston, Massachusetts 02109
(617) 338-2800
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Approximate date of commencement of proposed sale to the public: From
time to time or at one time after the effective date of the Registration
Statement as determined by market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_| _____________
<PAGE>
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. |_| _____________
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |_|
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Proposed Amount of
Title of Each Class of Securities to Amount to Maximum Registration
be Registered be Registered Price to Public Offering Price Fee(2)
----------------- --------------------- --------------------- -----------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01 per 2,912,500 $1.11 $3,232,875 $979.66
share(1)
<FN>
(1) The Common Stock being registered consists of (i) up to 1,700,000
shares issuable upon conversion of the Company's 7% Convertible
Subordinated Debentures (the "Debentures"); (ii) 762,500 shares
underlying common stock purchase warrants issued to the purchasers of
the Debentures in conjunction with the sale of the Debentures; and
(iii) 450,000 shares underlying common stock purchase warrants issued
in payment of brokerage commissions arising from the sale of the
Debentures, all as described in the "Selling Stockholders" and "Plan of
Distribution" sections of the Prospectus.
(2) The registration fee is calculated pursuant to Rule 457(c) of the
Securities Act of 1933 by taking the average of the bid and asked
prices of the registrant's Common Stock, $.01 par value per share, on
March 3, 1997 as reported on the NASDAQ SmallCap Market.
</FN>
</TABLE>
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
(ii)
<PAGE>
Subject to Completion
Preliminary Prospectus Dated March 5, 1997
PROSPECTUS
GreenMan Technologies, Inc.
2,912,500 Shares of Common Stock
This Prospectus relates to 2,912,500 shares of Common Stock, $.01 par value
per share ("Common Stock" or the "Shares"), of GreenMan Technologies, Inc. (the
"Company", the "Registrant" or "GreenMan") consisting of (i) up to 1,700,000
Shares issuable upon conversion of the Company's 7% Convertible Subordinated
Debentures (the "Debentures"); (ii) 762,500 Shares issuable by the Company upon
exercise of certain Common Stock Purchase Warrants (the "Investor Warrants")
issued to the purchasers of the Debentures in conjunction with the sale of the
Debentures; and (iii) 450,000 Shares issuable by the Company upon exercise of
certain Common Stock Purchase Warrants issued in payment of certain brokerage
commissions (the "Broker Warrants" and, together with the Investor Warrants, the
"Warrants") arising from the sale of the Debentures. Each Warrant is exercisable
for one share of Common Stock and has an exercise price of $1.25 per Warrant. To
the extent that the Warrants are exercised, the Company will receive proceeds
equal to the exercise price of the Warrants.
All Shares to be registered hereby are to be offered by the selling
stockholders listed herein (the "Selling Stockholders"), and the Company will
receive no proceeds from the resale by the Selling Stockholders of Shares
issuable upon conversion of the Debentures or exercise of the Warrants. The
Company has agreed to indemnify certain of the Selling Stockholders against
certain liabilities, including certain liabilities under the Securities Act of
1933, as amended (the "Act"), or to contribute to payments which such Selling
Stockholders may be required to make in respect thereof.
The Company's Common Stock is listed on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") and traded on the
NASDAQ SmallCap Market under the symbol "GMTI" and on the Boston Stock Exchange
under the symbol "GMY". The last reported bid price of the Common Stock on the
NASDAQ SmallCap Market on March 3, 1997 was $1.00.
----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COM-
MISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
----------------------
AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE
OF RISK. SEE "RISK FACTORS" AT PAGES 4 THROUGH 11.
----------------------
It is anticipated that usual and customary brokerage fees will be paid by
the Selling Stockholders on the sale of the Common Stock registered hereby. The
Company will pay the other expenses of this offering. See "Plan of
Distribution". The offer of 2,912,500 shares of Common Stock by the Selling
Stockholders as described in this Prospectus is referred to as the "Offering".
----------------------
The date of this Prospectus is _____________, 1997.
<PAGE>
No person has been authorized to give any information or to make any
representations other than those contained or incorporated by reference in this
Prospectus in connection with the offer contained in this Prospectus and, if
given or made, such information or representations must not be relied upon as
having been authorized by the Company or the Selling Stockholders. This
Prospectus does not constitute an offer to sell or solicitation of an offer to
buy securities in any jurisdiction to any person to whom it is unlawful to make
such offer or solicitation. Neither the delivery of this Prospectus nor any sale
made hereunder shall, under any circumstances, create an implication that there
has been no change in the affairs of the Company since the date hereof or the
information contained or incorporated by reference herein is correct at any time
subsequent to the date hereof.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). The Registration
Statement, the exhibits and schedules forming a part thereof and the reports,
proxy statements and other information filed by the Company with the Commission
can be inspected and copies obtained at the public reference facilities
maintained by the Commission at Judiciary Plaza, Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the following regional offices of the
Commission: Chicago Regional Office, Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511; and New York Regional Office, Seven
World Trade Center, Suite 1300, New York, New York 10048. Copies of such
material can be obtained at prescribed rates from the Public Reference Section
of the Commission at its principal office at 450 Fifth Street, N.W., Washington,
D.C. 20549. This prospectus, which constitutes part of a Registration Statement
filed by the Company with the Commission under the Act omits certain information
contained in the Registration Statement in accordance with the rules and
regulations of the Commission. Reference is hereby made to the Registration
Statement and the Exhibits relating thereto for further information with respect
to the Company and the Securities offered hereby. Any statements contained
herein concerning provisions of any documents are not necessarily complete, and,
in each instance, reference is made to the copy of such document filed as an
Exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed with the Commission pursuant
to the Exchange Act, are hereby incorporated in this Prospectus and specifically
made a part hereof by reference: (i) the Company's Annual Report on Form 10-KSB
for the fiscal year ended May 31, 1996; (ii) the Company's Quarterly Report on
Form 10-QSB for the quarter ended November 30, 1996; and (iii) the description
of the Company's Common Stock contained in the Registration Statement on Form
SB-2 File No. 33-86138 filed with the Commission on November 9, 1994, as
amended. All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the Offering of the Shares shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
respective dates of filing of such documents.
Any statement contained herein or in a document incorporated or deemed to
be incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Prospectus to the
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<PAGE>
extent that a statement contained herein (or in the applicable Prospectus
Supplement), or in any subsequently filed document that also is or is deemed to
be incorporated herein by reference, modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person to
whom this Prospectus is delivered, upon the written or oral request of such
person, a copy of any and all of the information that has been incorporated by
reference in this Prospectus (excluding exhibits unless such exhibits are
specifically incorporated by reference into the information that this Prospectus
incorporates). Requests for such copies should be made to the Company at its
principal executive offices, 7 Kimball Lane, Building A, Lynnfield,
Massachusetts 01940, Attention: Charles Coppa, telephone (617) 224-2411.
PROSPECTUS SUMMARY
The following summary information is qualified in its entirety by the more
detailed information appearing elsewhere in this Prospectus or incorporated
herein by reference and the financial statements which are incorporated herein
by reference.
THE COMPANY............. GreenMan Technologies, Inc. was formed primarily to
develop, manufacture and sell "environmentally
friendly" plastic and thermoplastic rubber parts and
products that are manufactured using recycled
materials and/or are themselves partially or wholly
recyclable. The Company has two business segments, a
molding operation located in Malvern, Arkansas and a
recycling operation, located in Jackson, Georgia. The
Company also owns all of the outstanding common
stock of DuraWear Corporation "DuraWear"), an Alabama
corporation located in Birmingham, Alabama, which
manufactures, installs and markets high quality
ceramic, polymer composite, and alloy steel materials
utilized in such industries as paper and pulp,
mining, coal handling and grain storage and
transportation.
RISK FACTORS............. The Offering involves substantial risk. See "Risk
Factors".
SECURITIES OFFERED....... 2,912,500 shares of Common Stock, $.01 par value
per share.
OFFERING PRICE........... All or part of the Shares offered hereby may be sold
from time to time in amounts and on terms to be
determined by the Selling Stockholders at the time
of sale.
USE OF PROCEEDS.......... The Company will receive no part of the proceeds from
the sale of the shares registered pursuant to this
Registration Statement other than the exercise price
of the Warrants.
NASDAQ TRADING SYMBOL.... GMTI
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<PAGE>
RISK FACTORS
An investment in the Securities offered hereby involves a high degree of
risk and should only be purchased by investors who can afford to lose their
entire investment. The following factors, in addition to those discussed
elsewhere in the Prospectus, should be considered carefully in evaluating the
Company and its business.
Limited Operating History
Since its inception in 1992, the Company's primary activities have been
raising capital and developing its injection molding and assembly operations.
The Company's success is dependent upon the successful development and marketing
of its current and future products and increasing revenue. The probability of
such success is highly dependent upon the Company increasing its customer base
and volume of injection molding and assembly operations, its ability to market
successfully its proposed GreenMan consumer products, as well as the
commencement of operations for the recovery of crumb rubber from tires, among
other things. The likelihood of the Company's overall success must be considered
in light of the problems, expenses, difficulties, complications and delays
frequently encountered in connection with the establishment of a new business
and the development of new technologies. These include, but are not limited to,
manufacturing on a high-capacity, multi-shift basis, competition, technological
obsolescence, development of new products by competitors, the need to develop
market expertise, setbacks in product development, market acceptance, sales and
marketing and government regulation.
Continuing Operating Losses; Explanatory Paragraph in Independent Auditors'
Report on GreenMan's Financial Statements Regarding the Company's Ability to
Continue as a Going Concern
The Company has not been profitable since its inception. For the fiscal
years ended May 31, 1994, 1995 and 1996, the Company incurred net losses of
$660,105, $1,092,006 and $1,578,321, respectively. For the six months ended
November 30, 1996, the Company reported a net loss of $2,157,341, a working
capital deficit of $3,214,150 and an accumulated deficit of $5,855,795. The
Company expects to continue to incur losses for the foreseeable future, and
there can be no assurance that the Company will achieve or maintain
profitability or that any revenue growth can be sustained in the future.
The Company's independent auditors have included an explanatory
paragraph in their report on the Company's financial statements for the year
ended May 31, 1996 to the effect that the Company's ability to continue as a
going concern is contingent upon its ability to secure financing and attain
profitable operations. In addition, the Company's ability to continue as a going
concern must be considered in light of the problems, expenses and complications
frequently encountered by its entrance into established markets and the
competitive environment in which the Company operates.
Uncertainty of Success of Proposed Crumb Rubber Facility
The Company has allocated approximately $1,000,000 from the proceeds of its
initial public offering in September 1995 for the construction of a crumb rubber
recycling facility. As of November 30, 1996, approximately $865,000 of the total
estimated construction costs of $1,000,000 have been expended. The Company's
recycling operation, which has not yet begun generating significant revenue, is
operating under limited conditions as the Company has made a decision to upgrade
its Jackson, Georgia crumb rubber production facility to produce a higher-grade
product. As a result, the Company will
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redeploy its current equipment in a yet-to-be-announced joint venture. During
this refacilitation, the Company is required to sell lower value-added Tire
Derived Fuel ("TDF") as a way to fulfill its obligation to BFI Tire Recyclers of
Georgia, Inc., a wholly owned subsidiary of Browning-Ferris Industries ("BFI"),
as described herein. The Company is obligated to "take or pay" for 605 tons per
month of TDF chips starting in August 1996 from BFI pursuant to a December 1995
agreement. BFI has acknowledged the delay in production and has agreed to reduce
the Company's obligation by fifty percent (50%) for six months. In addition,
there can be no assurance that crumb rubber will ever be produced in commercial
quantities at a price that will be competitive with, or at a level of quality
that will be comparable or superior to, crumb rubber currently available on the
market, or that any significant revenues or profits will be generated by sales
of crumb rubber.
Limited Experience in Producing GEM Stock; Uncertainty of Market Acceptance
The Company has developed, and is currently marketing on a limited basis, a
proprietary thermoplastic rubber material, called GEM Stock, using recovered
crumb rubber in combination with recycled plastic waste and virgin plastic. In
April 1996, the Company signed a license agreement with Plastic Solutions of
Texas, Inc. ("PSTI") for the exclusive worldwide right and license to use PSTI's
proprietary additive technology for co-mingling (mixing and blending) dissimilar
plastics and rubber. This license agreement provides the Company with the
ability to incorporate significantly more types of low cost recycled plastic and
rubber into the production of GEM Stock. As currently manufactured, products
made using GEM Stock have properties that are comparable to those products made
using virgin rubber or plastic at a significant cost savings to the Company. The
Company believes that GEM Stock is suitable as a raw material for use in the
manufacture of many of the types of commercial parts and products currently
manufactured by its molding operation. To date, revenues from products made
using GEM Stock have accounted for less than 10% of the Company's revenues, and,
as a result, there can be no assurance that the Company will be able to
manufacture GEM Stock in quantities necessary to achieve significant revenues
and profits. The Company may encounter difficulties in increasing production or
in hiring and training additional personnel to produce and sell its GEM Stock
material in commercial quantities in a timely manner, which could have a
materially adverse effect on the Company's business, financial condition and
results of operations.
In addition, the costs of producing crumb rubber for the GEM Stock material
may be more than anticipated by the Company, in which event the expense of
producing GEM Stock material may result in its not being a cost-effective
alternative to other raw materials even if its environmental advantages, if any,
can be demonstrated, of which there can be no assurance.
No independent market surveys or reports have been obtained regarding the
markets for the Company's GEM Stock material or for products using GEM Stock,
nor are any such reports planned by the Company. Management believes that the
Company's internal needs for GEM Stock will be addressed first, thereby allowing
the Company to become its own customer for raw materials for use in the
manufacture of its GreenMan products. Accordingly, there can be no assurance
that there will be commercial acceptance of GEM Stock or products manufactured
using GEM Stock or that significant revenues can be generated therefrom.
Uncertainty of Market Acceptance of Proposed GreenMan Consumer Products
In the Spring of 1997, the Company expects to commence production and sale
of the first of its proposed GreenMan consumer products, a GEM Stock trash
container. The Company also intends to use GEM Stock as the primary raw material
in the manufacture of the Company's proposed line of
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<PAGE>
environmentally friendly, or "green" consumer products, such as recycling totes,
trash cans, playground and recreational furniture, landscape timbers, corral and
picket fencing, storage bins, and home-use composters. These products are
intended to be made using the broad spectrum of crumb rubber mesh (or particle)
sizes to be produced at the Jackson, Georgia facility. The Company is evaluating
the economic and manufacturing feasibility of several of these proposed products
and has conducted preliminary discussions with possible distributors of such
products. There can be no assurance that such discussions will result in orders
for the products, consumer acceptance of the products or significant revenues
for the Company. There also can be no assurance that the Company will be able to
manufacture and market its proposed GreenMan consumer products, and if
successfully commercialized, that the Company will ever receive significant
revenues from sales of its proposed consumer products, or that any sales
therefrom will be profitable. Results of operations will depend on numerous
factors, including regulatory actions, competition and market acceptance of the
Company's proposed consumer products. The potential profitability of the
Company's consumer product operations will also depend upon the costs associated
with producing crumb rubber, as well as the costs of complying with any
applicable environmental regulations, over which the Company may have little or
no control.
Need for Additional Financing to Finance Expansion Plans
Based on the Company's operating plans, management believes that the
available working capital together with revenues from operations, the sale of
common stock and the purchase of equipment through lease financing arrangements,
will be sufficient to meet the Company's cash requirements through the third
quarter of fiscal 1997. On January 17, 1997, the Company concluded a $1,525,000
offering of the Debentures and Warrants (the "January Offering"). The net
proceeds from the January Offering were approximately $1,300,000 after deducting
commissions and expenses of approximately $200,000. The proceeds were used to
repay notes payable, to purchase manufacturing equipment and for general working
capital needs. The Company expects that additional financing will be required
after this time in order to fund continued growth. Management has identified and
is currently evaluating several additional financing alternatives and diligently
working to determine the feasibility of each alternative. The Company has
commenced the offering of 7% Convertible Subordinated Debentures in an effort to
raise up to an additional $3,000,000 in gross proceeds. If the Company is unable
to obtain additional financing, its ability to maintain its current level of
operations could be materially and adversely affected, and the Company may be
required to adjust its operating plans accordingly.
Dependence on Joint Ventures; Lack of Control Over Possible Joint Ventures
The Company's ability to develop, manufacture and market its proposed line
of environmentally friendly, or "green" consumer products as well as manufacture
GEM Stock on a cost effective basis, will be constrained by the Company's
limited financial and human resources. In order to increase its potential
ability to develop a broader range of products in a shorter period of time than
might otherwise be possible, the Company will seek to enter into joint ventures
or other strategic alliances with entities that have financial, technical,
marketing or other complementary resources. The inability of the Company to
enter into such arrangements could significantly impede the development of
products by the Company. Even if the Company enters into joint venture
agreements, the Company will not be in a position to control such joint ventures
since it is likely that joint venture partners will have greater financial,
technical or marketing resources. In addition, in the event of disagreement
between the Company and possible joint venture partners, the Company's
development and marketing plans could be seriously delayed or terminated since
the Company would likely not be in a position to alter or terminate a joint
venture agreement or to buy out its joint venture partners. There can be no
assurance that appropriate co- venturers or others can be found, that the
Company will be able to enter into such arrangements on
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acceptable terms, or that such arrangements will result in the more rapid or
successful development, manufacture or sale of products.
Dependence upon Major Customers
In the fiscal year ended May 31, 1996, two customers accounted for
approximately 38% and 14%, respectively, of the Company's consolidated net
sales. The Company does not have long-term contracts pursuant to which any
customer is required to purchase any minimum amount of products. There can be no
assurance that the Company will continue to receive orders of the same magnitude
from existing customers or that it will be able to market its current or
proposed products to new customers. The loss of any major customer by the
Company would have a materially adverse effect on the business of the Company as
a whole.
The Company's Dependence upon Suppliers of Raw Materials
Generally, raw materials required for the Company's molding operation are
purchased directly from suppliers on a purchase order basis rather than a
contract basis. There can be no assurance that, absent contracts with firm price
and delivery terms, that suppliers will not increase their prices, change their
credit terms or impose other conditions of sale that may be unfavorable to the
Company. While the Company does not believe that it would experience any
significant difficulty in obtaining materials from alternative sources on
comparable terms, there can be no assurance that such supplies could be obtained
on price and delivery terms favorable to the Company. Until such time, if ever,
that the Company begins to produce GEM Stock in sufficient quantities for its
own use on cost efficient basis, it is, and will be, required to purchase crumb
rubber and recycled and virgin plastic from third parties in order to produce
its proposed GreenMan consumer products. Management believes that there are
currently a limited number of suppliers of high-quality crumb rubber that is
free of fiber and metal. In addition, when and if the Company commences
production of GEM Stock in commercial quantities, it will primarily require used
tires as raw materials.
The Company believes that the overall supply of tires will be sufficient to
meet the Company's requirements for crumb rubber in the foreseeable future based
on the Company's agreement with BFI whereby BFI will supply the Company's
Recycling operation with a minimum of 3.5 million tires per year, initially for
5 years with the ability to extend the agreement for another 15 years. The
Company has reason to believe that through its nationwide operations, BFI has
access to more than 40 million additional tires per year for processing. In
addition, according to Scrap Tire News, nearly 225 million passenger automobile
tires are currently discarded annually in the U.S., and of that total
approximately 1% are used for asphalt pavement, 11% are burned to provide
energy, approximately 2% are processed for retreading, and the remaining tires
are landfilled, adding more than 200 million tires annually to the estimated 3
billion tires already stockpiled in landfills.
DuraWear obtains its primary raw materials, consisting of alumina and
nickel oxides from a number of sources on a purchase order rather than a
contract basis. Therefore, the price and other terms upon which such materials
are obtained are also subject to change over which DuraWear has no control.
Management believes that competitive alternate sources of such raw materials are
available, but there can be no assurance that this would be the case at a time
when such sources might be needed by the Company.
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DuraWear's Dependence upon Third-Party Manufacturers
DuraWear manufactures its ceramic products at the facility it owns in
Birmingham, Alabama. DuraWear's polymer composites and other products are
manufactured by third parties on a contract basis. DuraWear's polymer composite
products are currently produced by only one supplier to DuraWear's
specifications under a confidentiality agreement, and the number of alternative
suppliers is limited. Management has identified several alternative suppliers
for DuraWear's polymer composite products in the event that there are any
adverse changes in its existing relationships. With the exception of its polymer
composites, the Company believes that there are multiple manufacturing sources
available for DuraWear's other products. While DuraWear has longstanding
relationships with its current suppliers, such facilities are not controlled by
DuraWear, and they could sever their relationships with DuraWear at any time. In
such event, particularly as regards the products for which there are now limited
suppliers, it could be difficult for DuraWear to find other suppliers that could
manufacture DuraWear's products to the specifications required by DuraWear on
acceptable terms, if at all.
Significant Competition
The injection molding contract manufacturing industry is highly competitive
and characterized by severe price-cutting by small regional contractors. While
the Company believes that its facility, modern equipment and advanced quality
control are attractive features to potential customers, there can be no
assurance that the Company can capture adequate competitive contracts to achieve
or sustain profitability, either at its present location or at any satellite
location it seeks to establish.
In seeking to introduce and market its proposed GreenMan consumer products,
the Company will be competing with many established manufacturers of similar
products. Most of these competitors have substantially greater financial and
marketing resources and significantly greater name recognition among both
retailers and consumers than the Company. A number of companies with products
made from recycled tires have already entered the market. For example, OMNI
Rubber Products manufactures solid- rubber, non-steel reinforced railroad
crossings from recycled crumb rubber and R.A.S. Recycling, Inc., together with
Royal Rubber Manufacturing, are developing playground and recreational surfacing
mats made of recycled tire rubber. In addition, several companies manufacture
products similar to the Company's proposed GreenMan line of products, such as
industrial floor mats, playground furniture, and landscape timbers. There can be
no assurance that the Company will be able to compete successfully in the
consumer market.
If the Company is successful in manufacturing and selling its GEM Stock, of
which there can be no assurance, the Company will compete with other producers
and suppliers of traditional plastic and thermoplastic rubber products,
including recycled and virgin products. The Company's success in marketing its
products will depend on its ability to convince potential buyers that its
products are of comparable or superior quality to alternative products and that
they are also comparable in cost to competing products. There can be no
assurance that the Company will be able to compete effectively with established
producers, many of which have substantially greater financial and manufacturing
resources than those of the Company.
DuraWear has several competitors for its products, most of whom have
greater financial and marketing resources than DuraWear. In the ceramics market,
competitors include Coors Ceramics Co., Champion and Packo International
Ceramics, Inc. and in the polymer composite market include Solidur Plastics,
DuPont and BP America. DuraWear competes on the basis of the longer-lasting wear
resistance performance of its products as compared to products offered by
competitors. Management believes that
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DuraWear products offer customers significant cost advantages, notwithstanding
DuraWear's products' higher prices.
Government and Environmental Regulation
The Company's tire recycling and manufacturing activities are subject to
extensive and rigorous government regulation designed to protect the
environment. Management does not expect that the Company's activities will
result in the emission of air pollutants, the disposal of combustion residues,
or the storage of hazardous substances (as is the case with other tire recycling
processes such as pyrolysis). The establishment and operation of plants for tire
recycling are subject to obtaining numerous permits and complying with
environmental and other government regulations, both in the U.S. and most
foreign countries. The process of obtaining required regulatory approvals can be
lengthy and expensive. Moreover, regulatory approvals, if granted, may include
significant limitations on the Company's operations. The EPA 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 the Company from
obtaining, or affect the timing of, regulatory approvals.
The effect of government regulation may be to delay for a considerable
period of time or to prevent the Company from developing its business as planned
and/or impose costly requirements on the Company, the result of which may be to
furnish an advantage to its competitors or to make the Company's business less
profitable, or unprofitable, to operate.
Technological Changes
The contract manufacturing of plastic and thermoplastic rubber products and
the injection molding industry are characterized by ongoing technological
change. The Company will have limited resources to devote to research and
development of new products, and as a result, technological advances by any
present or potential competitors could render obsolete both present and future
products of the Company. Although the Company is not currently aware of any
technological changes which have rendered the Company's products obsolete, there
can be no assurance that in the future the Company's technology will not be
rendered obsolete as a result of technological developments. Many companies with
substantially greater resources than the Company are engaged in the development
of products and processes using recycled tires.
Limited Protection of Proprietary Information
None of the equipment or machinery that the Company currently uses or
intends to use in its current or proposed manufacturing activities are
proprietary. Any competitor can acquire equivalent equipment and machinery on
the open market. The Company believes that it has developed specialized know-how
in the blending of plastics and rubber for use in its molding machines and that
its processes are proprietary. The Company has acquired exclusive world-wide
rights to a proprietary additive technology which will enable the Company to
blend a broader range of virgin and recycled plastics together, and/or combine
such plastics with crumb rubber from recycled tires. The Company also believes
that many of the formulae and processes used in manufacturing DuraWear's
products are proprietary, and DuraWear has executed confidentiality agreements
with the appropriate employees and subcontractors. However,
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<PAGE>
there can be no assurance that competitors will not develop processes or
products of comparable efficiency and quality. DuraWear does not have any
patents and does not believe any of its products are patentable. Moreover, there
can be no assurance that any patents that may be granted in the future will be
enforceable or provide the Company with meaningful protection from competitors.
Even if a competitor's products were to infringe patents owned by the Company,
it could be very costly for the Company to enforce its rights in an infringement
action, and such action would divert funds and resources otherwise used in the
Company's operations. Consequently, there can be no assurance that the Company
would elect to prosecute potential patent infringement claims it might have.
Furthermore, there can be no assurance that the Company's proposed products will
not infringe any patents or rights of others.
The Company has used the name "GreenMan" and other trade names in
interstate commerce and asserts a common law right in and to such names. A
trademark search has been conducted for the name "GreenMan" which found that
there are no significantly similar names currently being used in the Company's
current and intended industries. The Company intends to file an application with
the U.S. Department of Commerce, Patent and Trademark Office to register its
name and establish trademark rights. There can be no assurance, however, that
such a trademark application will be approved. Although the Company has been
using the GreenMan name for its custom molding services and has not yet begun
significant marketing for its consumer products, the inability of the Company to
continue to use the name in connection with such services as well as in
connection with the proposed GreenMan consumer products could have an adverse
effect on the Company's efforts to establish name recognition for its products
in the commercial and consumer marketplace.
DuraWear has registered trademarks for a number of products, including
CeraDur and Xylethon and has used the name "ExcelloSlide" and other trade names
in interstate commerce and asserts a common law right in and to such names.
There can be no assurance, however, that such right would sufficiently protect
the Company's right to use such names or that, if and when the Company files
trademark applications for such names, that such applications would be approved.
Current Lack of, and Possible Unavailability of, Product Liability Insurance
Coverage
The Company presently maintains limited product liability insurance
relating to its products, and does not intend to increase such coverage for its
current products in the foreseeable future. The Company intends to seek
additional coverage with respect to any consumer products it markets in the
future. However, there can be no assurance that such coverage will be available
at affordable rates or that the coverage limits of the Company's insurance
policies, if any, will be adequate, if and when the Company markets its proposed
GreenMan consumer products. Such insurance is expensive and in the future may
not be available on acceptable terms, if at all. Although the Company has not
experienced any product liability claims to date, a successful claim brought
against the Company could have a materially adverse effect on the Company's
business, financial condition and results of operations.
Dependence Upon Key Personnel
The Company's success depends, to a significant extent, upon key members of
management. The loss of services of one or more of these persons, especially the
Company's Chief Executive Officer and Chairman of the Board of Directors,
Maurice E. Needham, and the Company's President, James F. Barker, could have a
materially adverse effect on the business of the Company. The Company has
entered into three-year employment agreements with each of Messrs. Needham,
Barker and Joseph E. Levangie, a director and the Company's Chief Financial
Officer. The Company has purchased key- employee life insurance policies, each
in the amount of $1,000,000, to insure the lives of Mr. Needham
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<PAGE>
and Mr. Barker. The Company believes that its future success will also depend in
part upon its ability to attract, retain and motivate qualified personnel.
Competition for such personnel is intense. There can be no assurance that the
Company will be successful in attracting and retaining such personnel.
Volatility of Stock Price
The market for securities of early stage, rapidly growing companies,
including those of the Company, has been highly volatile. The market price of
the Company's Common Stock has fluctuated between $8.63 and $1.13 from October
1995 to December 1996 and was $1.31 on February 5, 1997, and it is likely that
the price of the Common Stock will continue to fluctuate widely in the future.
Announcements of technical innovations, new commercial products, patent or
proprietary rights or other developments by the Company or its competitors could
have a significant impact on the Company's business and the market price of the
Common Stock.
Limited Trading Volume of Common Stock
The development of a public market having the desirable characteristics of
liquidity and orderliness depends upon the presence in the marketplace of a
sufficient number of willing buyers and sellers at any given time, over which
neither the Company nor any market maker has any control. Accordingly, there can
be no assurance that a significant trading market for the securities offered
hereby will develop, that quotations will be available on the NASDAQ as
contemplated, or if a significant market develops, that such market will
continue. Although the trading volume for the Common Stock, as reported by
NASDAQ, averaged 258,727 shares per week during the period from October 1995 to
December 1996 and 224,321 shares per week during the four-week period ended
December 31, 1996, there can be no assurance that persons purchasing the
securities offered hereby will be able readily to sell the securities at the
time or price desired.
Adverse Consequences Associated with Reservation of Substantial Shares of Common
Stock
As of November 30, 1996, the Company had reserved 4,258,233 shares of
Common Stock for issuance upon the exercise of its publicly-traded warrants,
underwriter warrants and other warrants. The foregoing number of shares does not
include the 1,212,500 shares of Common Stock reserved for issuance upon the
exercise of the Warrants issued in the January Offering. In addition, the
Company has reserved 1,270,700 shares for issuance to employees, officers,
directors and consultants under its 1993 Stock Option Plan and its 1996 Director
Stock Option Plan and 866,000 shares for issuance under other plans. The price
which the Company may receive for the Common Stock issuable upon exercise of
such options and warrants will, in all likelihood, be less than the market price
of the Common Stock at the time of such exercise. Consequently, for the life of
such options and warrants, the holders thereof may have been given, at nominal
cost, the opportunity to profit from a rise in the market price of the Common
Stock.
The exercise of all of the aforementioned securities may also adversely
affect the terms under which the Company could obtain additional equity capital.
In all likelihood, the Company would be able to obtain additional equity capital
on terms more favorable to the Company at the time the holders of such
securities choose to exercise them. In addition, should a significant number of
these securities be exercised, the resulting increase in the amount of the
Common Stock in the public market may reduce the market price of the Common
Stock. Also, the Company has agreed that, under certain circumstances, it will
register under Federal and state securities laws certain securities issuable in
connection with warrants issued to the underwriter of the Company's initial
public offering.
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<PAGE>
THE COMPANY
The Company was incorporated under the laws of the State of Arkansas on
September 16, 1992 and reincorporated under the laws of the State of Delaware on
June 27, 1995. The Company was formed primarily to develop, manufacture and sell
"environmentally friendly" plastic and thermoplastic rubber parts and products
that are manufactured using recycled materials and/or are themselves partially
or wholly recyclable. On October 10, 1995, the Company acquired all of the
outstanding common stock of DuraWear.
The Company's molding operation, located in Malvern, Arkansas, provides
injection molding manufacturing services to customers' specifications in the
production of plastic and thermoplastic rubber parts for such products as stereo
components and speakers, water filters and pumps, plumbing components and
automotive accessories. The molding operation uses leased state-of-the-art
injection molding equipment that is energy and labor efficient, has fast cycle
times and minimizes production waste. The facility also conducts R&D testing and
development of the Company's GreenMan Environmental Materials ("GEM") Stock and
tests the use of these materials in the manufacture of a variety of "sample"
products.
The Company's molding operation is scheduled to commence the manufacture of
the Company's first consumer product, a GEM Stock trash container, in the Spring
of 1997. Future proposed products, to be manufactured utilizing injection
molding, will also be produced at the molding operation, which management
expects to result in a gradual transition from contract/custom molding to
captive molding activities.
The Company's recycling operation, located in Jackson, Georgia, was
established to develop low-cost sources of rubber and plastic waste (made from
recycled plastics and crumb rubber from tires) for use in the production of the
Company's GEM Stock and to develop markets for end-products to be made using the
GEM Stock.
The Company has targeted several markets with products incorporating
significant amounts of recovered crumb rubber and plastic waste, including the
building industry with anti-fatigue floor mats, roofing products, and timbers;
the lawn and garden market with landscape timbers, and fencing; the consumer
products market with trash containers, recycling totes, and storage containers;
and the transportation industry with nose cones, barriers, railroad ties and
railway crossing mats. Through an agreement with Crumb Rubber Technologies,
Inc., the Company gains the capability to produce crumb rubber that can be
combined with recycled plastic waste and virgin plastic to produce the Company's
GEM Stock which will be used in the production of the Company's proposed
consumer and industrial products, sold as a merchant chemical to other users of
crumb rubber or sold in its raw state. Through an agreement with BFI, the
Company has a secured multi-year supply of waste tires to feed the Company's
Jackson, Georgia crumb rubber processing operation.
USE OF PROCEEDS
The Company will receive no part of the proceeds from the resale by the
Selling Stockholders of any Shares issuable upon conversion of the Debentures or
upon exercise of the Warrants. The gross proceeds to be received by the Company
from exercise of all of the Warrants (assuming that all of the Warrants are
exercised at $1.25 per Warrant) are $1,515,625, and management intends to such
proceeds
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<PAGE>
for general working capital purposes including expenditures in connection with
the development, sales and marketing of future products for the Company.
SELLING STOCKHOLDERS
The following table sets forth information concerning the beneficial
ownership of Shares of Common Stock by the Selling Stockholders as of the date
of this Prospectus and the number of such shares included for sale in this
Prospectus assuming the sale of all Shares being offered by this Prospectus. To
the best of the Company's knowledge, none of the Selling Stockholders have held
any office or maintained any material relationship with the Company or its
predecessors or affiliates over the past three years. The Selling Stockholders
reserve the right to reduce the number of Shares offered for sale or to
otherwise decline to sell any or all of the Shares registered hereunder.
The principal of and interest accrued on the Debentures are convertible
into shares of Common Stock at a conversion price per share equal to the lower
of (a) the closing bid price for the Common Stock on the date of issuance of the
Debentures, as reported by NASDAQ, or (b) seventy percent (70%) of the Market
Price of the Common Stock. As defined in the Debentures, the "Market Price" is
the closing bid price of the Common Stock on the trading day immediately
preceding the date on which such Debenture is converted into Common Stock, as
reported by NASDAQ, or the closing bid price in the over-the counter market or,
in the event the Common Stock is listed on a stock exchange, the Market Price
shall be the average closing price on the exchange, as reported to the Wall
Street Journal.
For purposes of the following table, the Company has assumed that all of
the principal of and accrued interest on the Debentures have been converted to
Common Stock at a conversion price of $.91875 per share which price is seventy
percent (70%) of the Common Stock's closing bid price of $1.3125 on February 5,
1997. The calculation of the number of Shares owned after the Offering assumes
that all of the Shares offered hereby are sold.
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<PAGE>
<TABLE>
<CAPTION>
Shares to be Sold in Offering
Shares from Shares from
Shares Owned Conversion of Exercise of Shares Owned
Name of Selling Stockholder Prior to Offering Debentures Warrants After Offering
--------------------------- ----------------- ---------- ---------- --------------
<S> <C> <C> <C> <C>
AT Investments S.A. 0 489,796 225,000(1) 0
Austost Anstalt Schaan 0 326,531 150,000(1) 0
UFH Endowment Ltd. 0 326,531 150,000(1) 0
Paril Holding 0 217,687 100,000(1) 0
FT Trading Company 0 217,687 100,000(1) 0
Joseph Friedman 0 54,422 25,000(1) 0
Kent R. Jones 0 27,211 12,500(1) 0
London Select 0 0 292,500(2) 0
Enterprises, Ltd
International Karen 0 0 157,500(2) 0
Nisuin Fonds
Corporation
<FN>
(1) Represents shares of Common Stock issuable pursuant to Investor
Warrants, each exercisable for Common Stock at $1.25 per share for one
year from the date of issuance, and issued in conjunction with the sale
of the Debentures, to each purchaser of a Debenture, in an amount equal
to a warrant to purchase one share of Common Stock for every $2.00 of
principal of Debentures purchased by such investor.
(2) Represents shares of Common Stock issuable pursuant to Broker Warrants,
each exercisable for Common Stock at $1.25 per share for one year from
the date of issuance, which Warrants were issued in payment of
commissions in connection with brokerage services arising from the sale
of the Debentures.
</FN>
</TABLE>
PLAN OF DISTRIBUTION
Of the 2,912,500 Shares being registered herein for sale by the Selling
Stockholders, (i) up to 1,700,000 Shares are issuable upon conversion of the
Debentures; (ii) 762,500 Shares are issuable upon exercise of the Investor
Warrants issued to the purchasers of the Debentures in conjunction with the
offering of the Debentures; and (iii) 450,000 Shares are issuable upon exercise
of the Broker Warrants issued in payment of certain brokerage commissions and
arising from the sale of the Debentures. All Shares to be registered hereby are
to be offered by certain security holders of the Company, and, other than the
exercise price of the Warrants, the Company will receive no proceeds from the
sale of Shares offered hereby.
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<PAGE>
The Selling Stockholders may sell the Common Stock registered in connection
with this Offering on the NASDAQ market system or otherwise. There will be no
charges or commissions paid to the Company by the Selling Stockholders in
connection with the issuance of the Shares. It is anticipated that usual and
customary brokerage fees will be paid by the Selling Stockholders upon sale of
the Common Stock offered hereby. The Company will pay the other expenses of this
Offering. The Shares may be sold from time to time by the Selling Stockholders,
or by pledges, donees, transferees or other successors in interest. Such sales
may be made on one or more exchanges or in the over-the-counter market, or
otherwise at prices and at terms then prevailing or at prices related to the
then current market price, or in negotiated transactions. The Shares may be sold
by one or more of the following: (a) a block trade in which the broker so
engaged will attempt to sell the Shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction; (b) purchases
by a broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus; (c) an exchange distribution in accordance
with the rules of NASDAQ; and (d) ordinary brokerage transactions. In effecting
sales, brokers or dealers engaged by the Selling Stockholders may arrange for
other brokers or dealers to participate. Brokers or dealers will receive
commissions or discounts from Selling Stockholders in amounts to be negotiated
prior to the sale. Such brokers or dealers and any other participating brokers
or dealers may be deemed to be "underwriters" within the meaning of the Act in
connection with such sales. In addition, any securities covered by this
prospectus which qualify for sale pursuant to Rule 144 of the Act may be sold
under Rule 144 rather than pursuant to this Prospectus.
The Company has agreed to indemnify certain of the Selling Stockholders
against certain liabilities, including certain liabilities under the Act, or to
contribute to payments which a Selling Stockholder may be required to make in
respect thereof.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Sullivan & Worcester LLP, One Post Office Square,
Boston, Massachusetts 02109. John A. Piccione, Esq., a partner at Sullivan &
Worcester LLP holds options to purchase 50,000 shares of Common Stock.
EXPERTS
The financial statements of the Company appearing in the Company's Annual
Report (Form 10-KSB) for the fiscal year ended May 31, 1996, have been audited
by Wolf & Company, P.C. independent auditors as set forth in their report
thereon included therein and incorporated herein by reference. Such financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in such Act and is, therefore, unenforceable. In the
event that a claim for indemnification against
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<PAGE>
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the Shares being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in such Act and will be governed by the final adjudication
of such issue.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The expenses in connection with the issuance and distribution of the Common
Stock to be registered are estimated (except for the Securities and Exchange
Commission filing fee) below. All such expenses will be paid by the Registrant.
Registration Fee Under Securities Act $ 979.66
Blue Sky Fees and Expenses 2,000.00
Legal Fees and Expenses 10,000.00
Accounting Fees and Expenses 4,000.00
Printing and Mailing Costs 1,000.00
Miscellaneous Fees and Expenses 2,000.00
---------
Total Expenses $19,979.66
Item 15. Indemnification of Directors and Officers
Delaware General Corporation Law, Section 102(b)(7), enables a corporation
in its original certificate of incorporation or an amendment thereto validly
approved by stockholders to eliminate or limit personal liability of members of
its Board of Directors for violation of a director's fiduciary duty of care.
However, the elimination or limitation shall not apply where there has been a
breach of the duty of loyalty, failure to act in good faith, engagement in
intentional misconduct or knowing violation of a law, payment of a dividend or
approval of a stock repurchase which was deemed illegal or the obtaining of an
improper personal benefit. The Company's Certificate of Incorporation provides
the following language:
"NINTH. To the maximum extent permitted by Section 102(b)(7) of the
General Corporation Law of Delaware, a director of this Corporation shall
not be personally liable to the Corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware General Corporation Law, or
(iv) for any transaction from which the director derived an improper
personal benefit.
TENTH. The Corporation shall, to the fullest extent permitted by
Section 145 of the General Corporation Law of Delaware, as amended from
time to time, indemnify each person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was, or has agreed to become, a director
or officer of the Corporation, or is or was serving, or has agreed to
serve, at the request of the Corporation, as a director, officer or trustee
of, or in a similar capacity with, another corporation, partnership, joint
venture, trust or other enterprise or by reason of any action alleged to
have been taken or omitted in such capacity, against all expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him or on his behalf in
connection with such action, suit or proceeding and any appeal therefrom.
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<PAGE>
Indemnification may include payment by the Corporation of expenses in
defending an action or proceeding in advance of the final disposition of
such action or proceeding upon receipt of an undertaking by the person
indemnified to repay such payment if it is ultimately determined that such
person is not entitled to indemnification under this Article.
The Corporation shall not indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated
by such person unless the initiation thereof was approved by the Board of
Directors of the Corporation.
The indemnification rights provided in this Article TENTH shall not be
deemed exclusive of any other rights to which those indemnified may be
entitled under any law, agreement or vote of stockholders or disinterested
directors or otherwise, and (ii) shall inure to the benefit of the heirs,
executors and administrators of such persons. The Corporation may, to the
extent authorized from time to time by its Board of Directors, grant
indemnification rights to other employees or agents of the Corporation or
other person serving the Corporation, and such rights may be equivalent to,
or greater or less than, those set forth in this Article."
Section 145 of the General Corporation Law of the State of Delaware
generally provides that a corporation may indemnify any director, officer,
employee or agent against expenses, judgements, fines and amounts paid in
settlement in connection with any action against him by reason of his being or
having been such a director, officer, employee or agent, if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal action, had no
reasonable cause to believe his conduct was unlawful. No indemnification shall
be made, however, if he is adjudged liable for negligence or misconduct in the
performance of his duty to the corporation, unless a court determines that he is
nevertheless entitled to indemnification. If he is successful on the merits or
otherwise in defending the action, the corporation must indemnify him against
expenses actually and reasonably incurred by him. Article 5 of the Company's
By-Laws provides indemnification as follows:
"Reference is made to Section 145 of and any other relevant provisions
of the General Corporation Law of the State of Delaware. Particular
reference is made to the class of persons hereinafter called "Indemnitees",
who may be indemnified by a Delaware corporation pursuant to the provisions
of such Section 145, namely, any person, or the heirs, executors, or
administrators of such person, who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit, or
proceeding, whether civil, criminal, administrative, or investigative, by
reason of the fact that such person is or was a director, officer,
employee, or agent of such corporation or is or was serving at the request
of such corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise. The
Corporation shall, and is hereby obligated to, indemnify the Indemnitees,
and each of them, in each and every situation where the Corporation is
obligated to made such indemnification pursuant to the aforesaid statutory
provisions. The Corporation shall indemnify the Indemnitees, and each of
them, in each and every situation where, under the aforesaid statutory
provisions, the Corporation is not obligated, but is nevertheless permitted
or empowered, to make such indemnification, it being understood that,
before making such indemnification with respect to any situation covered
under this sentence, (i) the Corporation shall promptly make or cause to be
made, by any of the methods referred to in Subsection (d) of such Section
145, a determination as to whether each Indemnitee acted in good faith and
in a manner he reasonably believed to be in, or not opposed to, the best
interests of the Corporation, and, in the case of any criminal action or
proceeding, had no reasonable cause to believe that his
II-2
<PAGE>
conduct was unlawful, and (ii) that no such indemnification shall be made
unless it is determined that such Indemnitee acted in good faith and in a
manner he reasonably believed to be in, or not opposed to, the best
interests of the Corporation, and, in the case of any criminal action or
proceeding, had no reasonable cause to believe that his conduct was
unlawful."
Item 16. Exhibits
The following documents have been previously filed as Exhibits and are
incorporated herein by reference except those exhibits indicated with an
asterisk which are filed herewith:
Exhibit No. Description
3.1 Certificate of Incorporation, as amended, incorporated by
reference to Exhibit No. 3.1 of the Company's Registration
Statement on Form SB-2 [Reg. No. 33- 86138] filed November 9,
1994.
3.2 By-laws of Registrant incorporated by reference to Exhibit No.
3.2 of the Company's Registration Statement on Form SB-2 [Reg.
No. 33-86138] filed November 9, 1994.
5* Opinion of Sullivan & Worcester LLP regarding legality of
shares registered hereunder
10.1 Form of Subscription Agreement executed by U.S. and non-U.S.
Investors, incorporated by reference to Exhibit No. 10.1 of
the Company's Form 8-K filed January 29, 1997
10.2 Form of Debenture incorporated by reference to Exhibit No.
10.2 of the Company's Form 8-K filed January 29, 1997
10.3 Form of Warrant incorporated by reference to Exhibit No. 10.3
of the Company's Form 8-K filed January 29, 1997
23.1* Consent of Wolf & Company, P.C., independent public
accountants
23.2* Consent of Sullivan & Worcester LLP (included in Exhibit 5)
Item 17. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in this registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
(Section 230.424(b) of 17 C.F.R.) if, in the aggregate,
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<PAGE>
the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this registration
statement or any material change to such information in this
registration statement;
provided, however, that subparagraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in the periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities and Exchange Act
of 1934 that are incorporated by reference in this registration statement.
(2) That for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
Securities offered herein, and the offering of such Securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment
any of the Shares being registered which remain unsold at the
termination of the offering.
(b) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in such Act and is, therefore, unenforceable.
(c) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Company pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective; and
(2) For purposes of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned thereunto duly
authorized, in the Town of Lynnfield, Commonwealth of Massachusetts, on March 5,
1997.
GREENMAN TECHNOLOGIES, INC.
By: /s/ Maurice E. Needham
Maurice E. Needham
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Form S-3 relating to Common Shares has been signed below on March 5, 1997
by the following persons in the capacities and on the dates indicated.
Signature Title Date
/s/ Maurice E. Needham Chief Executive Officer and March 5, 1997
Maurice E. Needham Chairman of the Board of Directors
/s/ James F. Barker President and Director March 5, 1997
James F. Barker
/s/ Joseph E. Levangie Chief Financial Officer, Secretary March 5, 1997
Joseph E. Levangie and Director
/s/ Lew F. Boyd Director March 5, 1997
Lew F. Boyd
II-5
EXHIBIT 5
SULLIVAN & WORCESTER LLP
ONE POST OFFICE SQUARE
BOSTON, MASSACHUSETTS 02109
(617) 338-2800
FAX NO. 617-338-2880
IN WASHINGTON, D.C. IN NEW YORK CITY
1025 CONNECTICUT AVENUE, N.W. 767 THIRD AVENUE
WASHINGTON, D.C. 20036 NEW YORK, NEW YORK 10017
(202) 775-8190 (212) 486-8200
FAX NO. 202-293-2275 FAX NO. 212-758-2151
March 5, 1997
GreenMan Technologies, Inc.
7 Kimball Lane, Building A
Lynnfield, Massachusetts 01940
Gentlemen:
We are familiar with the Registration Statement on Form S-3 (the "S-3
Registration Statement") to which this opinion is an exhibit, to be filed by
GreenMan Technologies, Inc., a Delaware corporation (the "Company"), with the
Securities and Exchange Commission under the Securities Act of 1933, as amended.
The S-3 Registration Statement relates to the proposed public offering by
certain securityholders of the Company of a total of 2,912,500 shares (the
"Shares") of the Company's Common Stock, $.01 par value per share ("Common
Stock"), consisting of (i) up to 1,700,000 Shares issuable upon conversion of
the Company's 7% Convertible Subordinated Debentures (the "Debentures"); (ii)
762,500 Shares issuable by the Company upon exercise of certain Common Stock
Purchase Warrants (the "Warrants") issued to the purchasers of the Debentures in
conjunction with the sale of the Debentures; and (iii) 450,000 Shares issuable
by the Company upon exercise of Warrants issued in payment of certain brokerage
commissions arising from the sale of the Debentures.
We have acted as counsel to the Company in connection with the
preparation of the S-3 Registration Statement, and we have examined and relied
on the originals or copies, certified or otherwise identified to our
satisfaction of all such corporate records of the Company and such other
instruments and other certificates of public officials, officers and
representatives of the Company and such other persons, and we have made such
investigations of law, as we have deemed appropriate as a basis for the opinion
expressed below. In making such examination, we have assumed the genuineness of
all signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals and the conformity to the originals of
<PAGE>
GreenMan Technologies, Inc.
March 5, 1997
Page 2
all documents submitted to us as copies, which facts we have not independently
verified. As to various facts material to the opinions set forth herein, we have
relied without independent verification upon certificates of public officials
and upon facts certified to us by officers of the Company. We express no opinion
herein as to any laws other than the General Corporation Law of the State of
Delaware.
Based upon the foregoing, we are of the opinion that the Company has
corporate power adequate for the issuance of the Shares issuable in the manner
set forth in the S-3 Registration Statement and offered pursuant to the S-3
Registration Statement. The Shares issuable upon conversion of the Debentures or
the exercise of the Warrants, assuming conversion or exercise on the date hereof
(the "Relevant Shares") have been duly authorized and reserved for issuance.
Upon conversion of the Debentures into Shares and the delivery of such Shares in
accordance with the terms of the Debentures, the Relevant Shares so issued will
be validly issued, fully paid and non-assessable. Upon the exercise of the
Warrants into Shares and delivery of such Shares in accordance with the terms of
the Warrants, the Relevant Shares so issued will be validly issued, fully paid
and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
S-3 Registration Statement.
Very truly yours,
SULLIVAN & WORCESTER LLP
Exhibit 23.1
Independent Auditors' Consent
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
GreenMan Technologies, Inc. on Form S-3 of our report dated July 12, 1996
appearing in the Annual Report on Form 10-KSB of GreenMan Technologies, Inc.,
for the fiscal year ended May 31, 1996 and to the incorporation by reference of
our reports dated July 28, 1995 appearing in the Final Prospectus of GreenMan
Technologies, Inc., dated September 29, 1995. We also consent to the reference
to us under the heading "Experts" in the Prospectus, which is part of this
Registration Statement and to the reference to us under the heading "Experts" in
the Final Prospectus of GreenMan Technologies, Inc., dated September 29, 1995.
WOLF & COMPANY, P.C.
Boston, Massachusetts
March 3, 1997
