As filed with the Securities and Exchange Commission on April 6, 1998
Registration No. 333-
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
(781) 224-2411
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Robert H. Davis
Chief Executive Officer
GreenMan Technologies, Inc.
7 Kimball Lane, Building A
Lynnfield, Massachusetts 01940
(781) 224-2411
(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(3)
<S> <C> <C> <C> <C>
Common Stock, par value $.01 per 2,235,069 $2.48 $5,542,971 $1,635.18
share(1)(2)
<FN>
(1) The Common Stock being registered consists of (i) up to 1,219,048 shares issuable upon conversion of the Company's
Convertible Debentures due December 2000 (the "Debentures"); (ii) 32,000 shares underlying common stock purchase warrants
(the "Investor Warrants") issued to the purchasers of the Debentures in connection with the sale of the Debentures; and
(iii) 32,000 shares underlying common stock purchase warrants (the "Broker Warrants") issued to the placement agent in
connection with the sale of the Debentures and Investor Warrants; (iv) 761,905 shares issuable upon conversion of
Additional Debentures; (v) 40,000 shares of underlying common stock purchase warrants issuable to the investors and
placement agent in connection with the sale of Additional Debentures; (vi) 133,402 shares issued to Messer Griesheim
Industries, Inc.; and (vii) 16,714 shares issued to James Ford pursuant to a settlement agreement dated December 4, 1997
between the Company and Mr. Ford, all as described in the "SELLING STOCKHOLDERS" and "PLAN OF DISTRIBUTION" sections of the
Prospectus.
(2) Pursuant to Rule 416, there are also registered hereby such additional indeterminate number of shares of such Common Stock
as may become issuable in accordance with the terms of the Notes and Warrants referred to above.
(3) The registration fee is calculated pursuant to Rule 457(c) of the Securities Act of 1933 by taking the average of the
closing bid and asked prices of the registrant's Common Stock, $.01 par value per share, on April 2, 1998 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>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
Subject to Completion
Preliminary Prospectus dated April 6, 1998
REOFFER
PROSPECTUS
GreenMan Technologies, Inc.
2,235,069 Shares of Common Stock
This Prospectus relates to 2,084,953 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
1,219,048 Shares issuable upon conversion of the Company's Convertible
Debentures due December 2000 (the "Debentures"); (ii) 32,000 Shares issuable by
the Company upon exercise of common stock purchase warrants (the "Investor
Warrants") issued to the purchasers of the Debentures in connection with the
sale of the Debentures; (iii) 32,000 Shares issuable by the Company upon
exercise of common stock purchase warrants issued to the placement agent (the
"Broker Warrants" and, together with the Investor Warrants, the "Warrants") in
connection with the sale of the Debentures and the Investor Warrants; (iv)
761,905 Shares issuable upon conversion of Additional Debentures (as defined
herein); and (v) 40,000 Shares issuable by the Company upon exercise of warrants
issuable to the investors and placement agent, in connection with the sale of
the Additional Debentures. There are also registered hereby a currently
indeterminate number of shares of Common Stock that may become issuable in
accordance with the terms of the Debentures and the Warrants. Each Warrant is
exercisable for one share of Common Stock. A total of 64,000 Warrants are
exercisable at a price of $3.44 per Warrant. To the extent that the Warrants are
exercised, the Company will receive proceeds equal to the exercise price of the
Warrants. The Debentures and Warrants were issued on December 12, 1997.
This Prospectus also relates to: (i) an aggregate of 133,402 Shares
issued to Messer Griesheim Industries, Inc. ("MG Industries") pursuant to an Act
of Sale Agreement dated November 12, 1997 in which the Company purchased MG's
ownership interest in Cryopolymers, Inc., a company purchased by GreenMan in
November 1997; and (ii) 16,714 Shares issued to James Ford pursuant to a
Settlement Agreement dated December 4, 1997 between Mr. Ford and the Company.
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 the Shares.
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.
A Registration Statement on Form S-3 for 865,578 Shares to be offered
on a continuous basis was filed by the Company on May 22, 1997 and became
effective on November 12, 1997. See "RISK FACTORS--Adverse Consequences
Associated with Reservation of Substantial Shares of Common Stock" and "MATERIAL
DEVELOPMENTS--Issuances of Common Stock Upon Conversion of Company's Convertible
Debentures due October 1998".
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 April 2, 1998 was $2 15/32.
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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 COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" AT PAGES 5 THROUGH 14.
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 2,235,069 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 ______, 1998.
<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. Such materials may also be accessed electronically by means of the
Commission's home page at http://www.sec.gov. 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, as amended, for the fiscal year ended May 31, 1997; (ii) the
Company's Current Reports on Form 8-K, as amended, dated July 15, 1997, July 21,
1997 and September 15, 1997; (iii) the Company's Quarterly Reports on Form
10-QSB for the fiscal quarters ended August 31, 1997 and November 30, 1997; (iv)
the Company's Proxy Statement dated February 13, 1998 relating to the Special
Meeting of Stockholders to be held on March 12, 1998; (v) the unaudited pro
forma financial information presented in Note 2 to the financial statements of
the Company included the Company's Quarterly Report on Form 10-QSB for the
quarter ended November 30, 1995; and (vi) the description of the Company's
Common Stock and the historical financial statements of DuraWear Corporation for
the year ended May 31, 1995, 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
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<PAGE>
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 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 (781) 224-2411.
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<PAGE>
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. All share and per share data in this Prospectus have been adjusted
to give retroactive effect to a reverse split of the Company's Common Stock
pursuant to which each five shares of Common Stock then outstanding were
converted into one share. The reverse split became effective on March 23, 1998.
THE COMPANY....................... GreenMan Technologies, Inc. was formed
primarily to develop, manufacture and
sell "environmentally friendly" plastic
and thermoplastic rubber
feedstocks/products that are
manufactured using recycled materials
and/or are themselves partially or
wholly recyclable. The Company has two
business segments, the recycling
operations, located in Jackson, Georgia,
Savage, Minnesota and St. Francisville,
Louisiana and its industrial materials
operation, DuraWear Corporation
("DuraWear"), which is located in
Birmingham, Alabama, and manufactures,
installs and markets high quality
ceramic, polymer composite, and alloy
steel materials utilized in industries
such as paper and pulp, mining, coal
handling and grain storage and
transportation.
RISK FACTORS...................... The Offering involves substantial risk.
See "RISK FACTORS".
SECURITIES OFFERED................ 2,235,069 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
Information contained or incorporated by reference in this Prospectus
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.
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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, establishing its injection molding and assembly operations and
developing its proprietary "GEM" (GreenMan Environmental Materials) Stock
materials and tire recycling activities. 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, its ability to produce crumb rubber in
commercial quantities at a price that will be competitive in the market and to
market successfully its proposed GreenMan consumer products, 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, 1995, 1996 and 1997, and for the six months ended November
30, 1997, the Company incurred net losses of $1,092,006, $1,578,321, $7,006,479,
and $2,082,543, respectively. At November 30, 1997, the Company had a working
capital deficit of $7,193,460 and an accumulated deficit of $12,787,476 and was
in default on certain capital leases. 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, 1997 to the effect that the Company's ability to continue as a
going concern is contingent upon its ability to raise additional financing and
achieve 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.
Limited Experience in Producing Crumb Rubber in Commercial Quantities; Market
Acceptance
The Company has conducted extensive market research over the past
several years and has concluded that significant market opportunities exist for
ultra fine crumb rubber to be used as chemical feedstocks, incorporated into
parts and products including new automobile and truck tires used in rubber
modified asphalt. As a result, a decision was made to focus the Company's
resources on addressing these "high value added" crumb rubber opportunities.
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<PAGE>
On August 26, 1997, the Company finalized the formation of a joint
venture ("the joint venture") between the Company and Crumb Rubber Technologies,
Inc. of Jamaica, New York ("CRT"), to collect and process tires in the State of
New York and to market the crumb rubber derived from the tires. The joint
venture will address existing opportunities for larger size mesh crumb rubber
such as used in rubber mats, ground cover and as a filler in asphalt
applications. The Company has contributed its investment in the cryogenic crumb
rubber equipment (valued at $400,000) which was formerly located in Jackson,
Georgia into the venture as its capital contribution while CRT will contribute
on its part certain facilities, equipment, customer contracts, licenses and
permits and provide operational and technical expertise. As of the date of this
Prospectus, no large mesh crumb rubber has been produced at this facility and
there can be no assurance that larger size mesh will ever be produced in
commercial quantities at a price that will be competitive with larger size mesh
crumb rubber currently on the market.
On November 19, 1997, the Company acquired all of the outstanding
common stock of Cryopolymers, Inc., ("Cryopolymers") a privately-held crumb
rubber producer located in St. Francisville, Louisiana. Cryopolymers has
produced limited quantities of ultra fine mesh crumb rubber while operating
under limited conditions as management refines the production process of its
cryogenic recycling equipment and continues to evaluate the production
capabilities of the facility. As a result, there can be no assurance that ultra
fine mesh 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 ultra fine mesh
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, GreenMan signed a license agreement with an unaffiliated
third party for the exclusive worldwide right and license to use the company's
proprietary additive technology for co-mingling (mixing and blending) dissimilar
plastics and rubber. This license agreement provides GreenMan 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.
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<PAGE>
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 May 1997, the Company commenced production and sale of the first of
its proposed GreenMan consumer products, a GEM Stock trash container. To date,
revenues from the sale of Gem Stock trash containers have been less than 10% of
the Company's revenues. The Company also intends to use GEM Stock as the primary
raw material in the manufacture of the Company's proposed line of
environmentally friendly, or "green" consumer products, such as recycling totes,
playground and recreational furniture, landscape timbers, corral and picket
fencing, storage bins, and home-use composters. 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.
Shutdown of Injection Molding Operations
In January 1998, the Company discontinued operations at its Malvern,
Arkansas facility (the "Facility"). The Facility was previously engaged in
providing injection molding manufacturing services to customer specifications
("Contract/Custom molding") 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. In the future,
management may rely on third party contract manufacturers to provide the Company
with injection molding capabilities which management believes it can obtain at
equal or less cost.
During the year ended May 31, 1997, the facility's revenues totaled
$1,936,450 and had net losses totaling $589,094. For the three and six months
ended November 30, 1997, the facility's revenues were $327,760 and $895,831,
respectively and the facility's net losses were $297,536 and $444,570,
respectively. For the three and six months ended November 30, 1996, the
facility's revenues were $227,461 and $645,922, respectively and the facility
had net losses of $215,325 and $439,083, respectively. For the year ended May
31, 1997 and the three and six months ended November 30, 1997, the facility's
revenues represented 48%, 10% and 15% , respectively of consolidated revenue and
38%, 30% and 21% of the Company's consolidated net loss. At May 31, 1997 and
November 30, 1997, the facility's assets totaled $3,411,979 and $3,055,558,
respectively, and represented 45% and 17% of consolidated assets.
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<PAGE>
The Company is currently exploring several alternatives with respect to
the facility: (1) the sale of the entire operation or (2) the relocation of a
portion of the facility's assets to other Company locations and the sale of any
remaining assets. The Company is currently in discussions with several parties
regarding the following alternatives and has reached a tentative agreement with
a third party to purchase a majority of the facility's assets. The transaction
is predicated on the Company's ability to transfer clear title to all leased
assets. The Company is currently negotiating with the equipment lessors to
satisfy their lease payout requirements in order for the Company to obtain clear
title to the assets. The Company anticipates a loss on the disposal of the
facility and operations will be approximately $1,100,000.
Need for Additional Financing
On December 12, 1997, (the "December Offering") the Company entered
into securities purchase agreements (the "Debenture Agreements") with two
investors (the "Debenture Holders") and pursuant thereto, the Company issued
Debentures in the aggregate principal amount of $1,600,000 (the "Initial
Debentures") and immediately exercisable two-year warrants to purchase 32,000
shares of Common Stock at an exercise price of $3.44 per share. Each Initial
Debenture bears interest at 8% and is due December 15, 2000. The Initial
Debentures are convertible at the election of the holder at any time commencing
upon the earlier to occur of (i) the effective date of this registration
statement, or (ii) 60 days following the date of issuance at a conversion price
equal to the lower of the average closing bid prices on the five trading days
preceding the date of the closing of the December Offering or 75% of the average
closing bid prices on the five trading days preceding the date of the conversion
of the Debentures. The Debentures automatically convert into shares of common
stock upon maturity. The Company also issued immediately exercisable two year
warrants to purchase 32,000 shares of common stock at an exercise price of $3.44
per share to the placement agent.
Pursuant to the Debenture Agreements, the Debenture Holders have agreed
to purchase up to an additional $2,000,000 in the aggregate of Debentures
("Additional Debentures") in multiple tranches during 12 months following the
effective date of this registration statement. Each tranche shall be for the
purchase of between $75,000 and $175,000 in Additional Debentures and may be
completed at the election of the Company subject to certain conditions. Each
Additional Debenture shall bear similar terms to the Initial Debentures
including the issuance of warrants per Additional Debenture to both the
Debenture Holders and the placement agent. The Additional Debentures are
convertible at the holders option, within two days of issuance.
Pursuant to the terms of the Debenture Agreements, the Company is
obligated to require the Debenture Holders to purchase at least $1,000,000 in
Additional Debentures or the Company must provide the Debenture Holders and
placement agents warrants to purchase an additional 40,000 shares of Common
Stock in the aggregate.
A total of $750,000 from the proceeds of the December Offering were
paid to Browning Ferris Industries, Inc. ("BFI") as partial repayment of amounts
owed to BFI in connection with the purchase by the Company of the tire recycling
operations in Minnesota and Georgia (the "Tire Recycling Operations") from BFI.
In February 1998, the Company secured a $5.0 million asset based credit facility
and used approximately $3.9 million to repay the balance due , including
interest, to BFI.
Based on the Company's operating plans, management believes that the
available working capital together with revenues from operations, the financing
commitment secured in the December Offering, the asset based credit facility and
the purchase of equipment through lease financing arrangements, will be
sufficient to meet the Company's cash requirements through the first half of
fiscal 1999. Management expects that additional financing may be required after
this time to fund continued growth. If the Company is unable to obtain
additional financing, its ability to repay such obligations and maintain its
current level of operations could be materially and adversely affected and the
Company may be required to adjust its operating plans accordingly.
-8-
<PAGE>
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 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, 1997, one injection molding customer
accounted for approximately 29% of the Company's consolidated net sales. As a
result of the closing of the Company's injection molding operations in January
1998, there is no customer which currently accounts for 10% or more 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 operations 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 a cost effective basis, it is, and will be, required to purchase
recycled and virgin plastic from third parties in order to produce its proposed
GreenMan consumer products. In addition, when and if the Company commences
production of GEM Stock in commercial quantities, it will primarily require used
tires as raw materials.
-9-
<PAGE>
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 acquisition of the Tire Recycling
Operations and Cryopolymers, Inc. As a result of such acquisitions, GreenMan has
gained immediate access to over 10 million tires annually and the capability to
produce ultra fine mesh crumb rubber. If GreenMan exercises its option to
purchase certain assets (including certain contract rights) of BFI's Ford
Heights, Illinois tire recycling operations, GreenMan would gain access to an
additional 12 to 15 million tires annually. According to Scrap Tire News, nearly
250 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.
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
In marketing 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.
-10-
<PAGE>
In the manufacture and sale of its GEM Stock, 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 Industrial 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 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. The Company believes that it is in material compliance with all
applicable governmental 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 Company has 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.
-11-
<PAGE>
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 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, 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.
-12-
<PAGE>
Volatility of Stock Price
The market for securities of early stage, rapidly growing companies,
including those of the Company, has been highly volatile. The closing price of
the Company's Common Stock has fluctuated between $8.63 (pre-split) and $.28
(pre-split) from October 1995 to February 1998 and was $.25 (pre-split) on March
16, 1998, 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.
Continued Listing of the Company's Common Stock on NASDAQ
In August 1997, the Nasdaq Stock Market, Inc. ("NASDAQ") announced new
listing requirements which became effective on February 23, 1998.
On February 26, 1998, the Company received a notice from NASDAQ stating
that the Company's securities would be delisted from NASDAQ effective March 27,
1998, if the Company could not demonstrate compliance with the new net tangible
assets/market capitalization/net income, independent directors and independent
audit committee requirements(s) which became effective on February 23, 1998. The
Company made a written submission to the NASDAQ Listings Qualification Panel
(the "Panel") on March 27, 1998 indicating that the Company is now in compliance
with these requirements. The Panel will review the submissions during the week
of April 6, 1998.
At a Special Meeting of Stockholders held on March 12, 1998, the
stockholders elected six persons, including two independent members (who are
also members of the Audit Committee of the Board), to the Company's Board of
Directors, allowing the Company to be in compliance with the independent
directors and independent audit committee requirements.
Amendment to the Company's Certificate of Incorporation to Effect a One-for-Five
Reverse Stock Split.
On February 27, 1998, the Company received notice from NASDAQ stating
that the Company's securities would be delisted from NASDAQ effective May 28,
1998, if the Company could not demonstrate compliance with the minimum $1.00 bid
price requirement for ten consecutive trading days prior to that time.
On March 23, 1998, the Company's Certificate of Incorporation was
amended to effect a reverse split (the "Reverse Split") of the Company's Common
Stock, pursuant to which each five shares of Common Stock were automatically
converted into one share. Since March 24, 1998, the closing bid price of the
Company's Common Stock has exceeded$1.00 per share and, as a result, the Company
anticipates being in compliance with the minimum $1.00 bid price requirement by
April 7, 1998 (which would be the last of ten consecutive trading days). There
can be no assurance however, that after April 7, 1998, the Common Stock will
continue to trade at above the $1.00 bid price.
-13-
<PAGE>
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 447,580 shares per week during the period from October 1995 to
February 1998, 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 February 28, 1998, the Company had reserved 1,251,646 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 (i) up to 456,600 shares of Common Stock reserved for issuance upon the
conversion of the Company's Convertible Notes due October 1998 and the exercise
of the warrants issued in an offering in April 1997 (the "April Offering") (see
"MATERIAL DEVELOPMENTS--Issuances of Common Stock Upon Conversion of Company's
Convertible Notes due October 1998."); (ii) up to 80,000 shares of Common Stock
issuable upon conversion of the interest due on the Palomar Note and the
exercise of the Palomar Warrant; (iii) up to 1,301,040 shares of Common Stock
reserved for issuance upon conversion of notes issued to officers (the "Officer
Notes") in May, June and July 1997 and the exercise of warrants issued in
conjunction with the Officer Notes. In addition, the Company has reserved
260,000 shares for issuance to employees, officers, directors and consultants
under its 1993 Stock Option Plan and its 1996 Director Stock Option Plan and
335,500 shares for issuance under other options. 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, warrants
and other convertible securities, 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. A Registration Statement on Form S-3 was filed by the Company on
May 22, 1997 and become effective on November 12, 1997, registering the shares
issuable upon conversion of the securities offered in the April Offering on a
continuous basis.
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.
-14-
<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 feedstocks, rubber
parts and products that are manufactured using recycled materials and/or are
themselves partially or wholly recyclable. The Company currently operates two
business segments, the recycling operations located in Jackson, Georgia, Savage,
Minnesota and St. Francisville, Louisiana and the industrial material operations
located in Birmingham, Alabama. Until January, 1998 the Company also operated a
molding operation located in Malvern, Arkansas.
The Company's Molding operation provided injection molding
manufacturing services to customers' specifications in the production of plastic
and thermoplastic rubber parts. The facility also conducted research and
development on the Company's GreenMan Environmental Materials ("GEM") Stock and
tested the use of these materials in the manufacture of a variety of potential
products. In January, 1998, Company discontinued operations at the Malvern
facility. In the future, management intends to rely on third party contract
manufacturers to provide the Company with custom injection molding capabilities
which management believes it can obtain at equal or less cost.
The Company's industrial materials operations are conducted by DuraWear
Corporation ("DuraWear"), a wholly-owned subsidiary acquired on October 10,
1995. DuraWear manufactures, installs and markets a diverse range of high
quality ceramic, polymer composite, and alloy steel materials engineered to
resist severely abrasive and corrosive conditions typically encountered in bulk
material handling systems in industries such as paper and pulp, mining, coal
handling and grain storage and transportation.
On June 30, 1997, the Company acquired BFI Tire Recyclers of Minnesota,
Inc. and BFI Tire Recyclers of Georgia, Inc., (renamed GreenMan Technologies of
Minnesota, Inc. ("GMTM") and GreenMan Technologies of Georgia, Inc. ("GMTG"),
respectively) which provides the Company access to over 10 million tires
annually. The Company was also granted an exclusive option to purchase certain
assets and agreements of BFI's Ford Heights, Illinois tire recycling operation
which has the capacity to process between 12 and 15 million tires annually. The
acquired operations are in the scrap tire collection and processing business
whereby they charge a fee to dispose of customers' scrap tires and then process
the tires into two inch rubber chips which are then sold as alternative fuel
("TDF" - Tire Derived Fuel) to cement kilns, paper and pulp producers and
electric utilities; utilized in civil engineering projects such as landfill
construction (leach-bed lining), soil erosion and road stabilization projects;
or used to process into crumb rubber.
On November 19, 1997, the Company acquired all of the outstanding
common stock of Cryopolymers, Inc., ("Cryopolymers") a privately-held crumb
rubber producer located in St. Francisville, Louisiana.
USE OF PROCEEDS
The Company will receive no part of the proceeds from the resale by the
Selling Stockholders of any Shares issued to the Selling Stockholders or
issuable upon conversion of the Initial or Additional 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) issued per the Initial Debentures will be approximately $220,000, and
management intends to use such proceeds for general working capital purposes
including expenditures in connection with the development, sales and marketing
of future products for the Company.
-15-
<PAGE>
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 has held
any office or maintained any material relationship with the Company or its
predecessors or affiliates over the past three years, except as described below.
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.
On December 12, 1997, (the "December Offering") the Company entered
into securities purchase agreements (the "Debenture Agreements") with two
investors (the "Debenture Holders") and pursuant thereto, the Company issued
Debentures in the aggregate principal amount of $1,600,000 (the "Initial
Debentures") and immediately exercisable two year warrants to purchase 32,000
shares of Common Stock at an exercise price of $3.44 per share. Each Initial
Debenture bears interest at 8% and is due December 15, 2000. The Initial
Debentures are convertible at the election of the holder at any time commencing
upon the earlier to occur of (i) the effective date of this registration
statement, or (ii) 60 days following the date of issuance at a conversion price
equal to the lower of the average closing bid prices as reported on NASDAQ on
the five trading days preceding the date of the closing of the December Offering
or 75% of the average closing bid prices as reported on NASDAQ on the five
trading days preceding the date of the conversion of the Initial Debentures. The
Initial Debentures automatically convert into shares of common stock upon
maturity. In connection with the Initial Debentures, the Company also issued
immediately exercisable two year warrants to purchase 32,000 shares of common
stock at an exercise price of $3.44 per share to the placement agent.
Pursuant to the Debenture Agreements, the Debenture Holders have agreed
to purchase up to an additional $2,000,000 in the aggregate of Debentures
("Additional Debentures") in multiple tranches during 12 months following the
effective date of this registration statement. Each tranche shall be for the
purchase of between $75,000 and $175,000 in Additional Debentures and may be
completed at the election of the Company subject to certain conditions. Each
Additional Debenture shall bear similar terms to the Initial Debentures
including the issuance of warrants per Additional Debenture to both the
Debenture Holders and the placement agent. The Additional Debentures are
convertible at the holders option, within two days of issuance.
Pursuant to the terms of the Debenture Agreements, the Company is
obligated to require the Debenture Holders to purchase at least $1,000,000 in
Additional Debentures or the Company must provide the Debenture Holders and
placement agents warrants to purchase an additional 40,000 shares of Common
Stock in the aggregate.
In the event that the shares of Common Stock issuable upon conversion
of the Debentures have not been registered under the Act within 60 days after
the date of issuance, the Company is also required to pay to the Debenture
holders as liquidated damages an amount equal to 3% multiplied by the principal
amount of the Debentures multiplied by the number of months or portion thereof
between the date that the Debentures first become convertible and the date that
the shares of Common Stock are registered under the Act.
-16-
<PAGE>
The number of shares indicated as being issuable upon conversion of the
Debentures and offered hereby represents an estimate of the number of shares of
Common Stock issuable upon conversion of or otherwise with respect to the
Debentures. For purposes of the following table, the Company has assumed that
all of the principal of the Debentures has been converted to Common Stock at a
conversion price per share which is 75% of the average of the closing bid prices
of the Common Stock on the five trading days immediately preceding the dates on
which the Debentures were issued or the five trading days immediately preceding
the filing of this Registration Statement, whichever is lower. The assumed
conversion price of the Debentures is $1.75 per share. Pursuant to Rule 416 of
the Act, the number of shares of Common Stock issuable upon conversion of the
Debentures offered for sale hereby includes an indeterminate number of shares as
may be issued or issuable upon conversion of or otherwise with respect to the
Debentures by reason of a floating rate conversion price mechanism and other
adjustment mechanisms described in the Debentures.
The calculation of the number of Shares owned after the Offering
assumes that all of the Shares offered hereby are sold.
<TABLE>
<CAPTION>
Shares to be Sold in Offering(1)
Shares Shares Shares from Shares from
Shares Owned Issued in Issued For Conversion of Exercise of Shares Owned
Name of Selling Stockholder Prior to Offering Settlement Acquisition Debentures Warrants After Offering
--------------------------- ----------------- ---------- ----------- ---------- -------- --------------
<S> <C> <C> <C> <C> <C> <C>
Messer Griesheim Industries, Inc. 0 0 133,402(2) 0 0
James Ford 0 16,714(3) 0 0 0 0
The Endeavour Capital Fund, S.A. 0 0 0 647,619(4) 17,000(5) 0
The Endeavour Capital Fund, S.A. 0 0 0 380,953(6) 10,000(7) 0
Amro International S.A. 0 0 0 571,429(4) 15,000(5) 0
Amro International S.A. 0 0 0 380,952(6) 10,000(7) 0
Jesup & Lamont 0 0 0 0 32,000(8) 0
Jesup & Lamont 0 0 0 0 20,000(9) 0
<FN>
(1) The actual number of Shares issuable upon conversion of the Debentures and the exercise of the Warrants that can be sold in
the Offering is subject to adjustment and could be materially less or more than the estimated amount indicated depending
upon factors which cannot be predicted by the Company at this time, including among other things, the market price of the
Common Stock on the five trading days immediately preceding the date the Debentures are converted and the principal amount
of Debentures actually converted.
(2) Represents shares of Common Stock issued pursuant to the Act of Sale Agreement between the Company and Messer Griesheim
Industries, Inc. relating to the Company's purchase of Cryopolymers, Inc.
-17-
<PAGE>
(3) Represents Shares of Common Stock issued in settlement of certain litigation brought by James Ford against various parties
including the Company.
(4) Represents shares of Common Stock issuable upon conversion of the Initial Debentures.
(5) Represents shares of Common Stock issuable upon exercise of the Investor Warrants issued with the Initial Debentures.
(6) Represents shares of Common Stock issuable upon conversion of the Additional Debentures.
(7) Represents shares of Common Stock issuable upon exercise of the Investor Warrants that may be issued upon issuance of the
Additional Debentures.
(8) Represents shares of Common Stock issuable upon exercise of the Broker Warrants.
(9) Represents shares of Common Stock issuable upon exercise of Broker Warrants that may be issued upon issuance of the
Additional Debentures.
</FN>
</TABLE>
PLAN OF DISTRIBUTION
Of the 2,235,069 Shares being registered herein for sale by the Selling
Stockholders, (i) up to 1,219,048 Shares are issuable upon conversion of the
Debentures; (ii) 32,000 Shares are issuable upon exercise of the Investor
Warrants; (iii) 32,000 Shares are issuable upon exercise of the Broker Warrants;
(iv) 761,905 Shares issuable upon conversion of Additional Debentures (as
defined herein); (v) 40,000 Shares issuable by the Company upon exercise of
warrants issued to the investors and placement agents, in connection with the
sale of the Additional Debentures; (vi) 132,402 Shares are issuable pursuant to
the Act of Sale Agreement between the Company and Messer Gresheim Industries,
Inc. and (vii) 16,714 shares were issued to James Ford. 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.
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.
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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 10,000 shares of Common Stock.
EXPERTS
The consolidated financial statements of the Company appearing in the
Company's Annual Report on Form 10-KSB, as amended, for the fiscal year ended
May 31, 1997, have been audited by Wolf & Company, P.C. independent auditors as
set forth in their report thereon, which includes an explanatory paragraph
regarding the Company's ability to continue as a going concern, 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. The financial statements of
DuraWear Corporation appearing in the Company's Registration Statement on Form
SB-2 File No. 33- 86138 filed with the Commission on November 9, 1994, as
amended, have been audited by Wolf & Company, P.C. independent auditors as set
forth in their report thereon 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 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>
MATERIAL DEVELOPMENTS
Acquisition of Certain Operations from Browning Ferris Industries, Inc.
On June 30, 1997, GreenMan Acquisition Corp. ("GAC"), a wholly-owned
subsidiary of the Company acquired all of the capital stock of each of (i) BFI
Tire Recyclers of Minnesota, Inc. ("BTM"), a wholly-owned subsidiary of
Browning-Ferris Industries of Minnesota, Inc. ("BFIM") and (ii) BFI Tire
Recyclers of Georgia, Inc. ("BTG"), a wholly-owned subsidiary of Browning-Ferris
Industries of Georgia, Inc. ("BFIG") (the "Acquisition"). BFIG and BFIM are both
wholly-owned subsidiaries of BFI. The Acquisition was made pursuant to a
Purchase and Sale Agreement, dated as of June 30, 1997, by and among the
Company, GAC, BFI, BFIM and BFIG. BTM and BTG have been renamed GreenMan
Technologies of Minnesota, Inc. and GreenMan Technologies of Georgia, Inc.,
respectively, and, together with the crumb rubber facility constructed by the
Company at BTG's facility prior to the Acquisition, constitute the Company's
Recycling Division. As a result of the Acquisition, the Company's obligation to
take tire chips from BTG was eliminated.
In consideration for the capital stock of BTM and BTG, GAC paid BFI
$5,331,000, which amount was determined, (a) as to $3,600,000 of such amount, by
negotiation among the parties and (b) as to the balance, by the value of BTG's
and BTM's working capital. Of such consideration, $650,000 was paid from
proceeds of the sale of the Notes and Warrants and $4,681,000 was financed by
short-term loan from BFI to GAC, which loan was originally due and payable on
September 30, 1997. In October 1997, the Company, GAC, BFI, BFIM and BFIG
entered into a Forbearance Agreement pursuant to which GAC agreed to pay
$2,000,000 on or before November 6, 1997 and to pay the balance owed on the loan
on or before December 6, 1997. The Company paid $350,000 to BFI in November and
as additional $750,000 in December. In February 1998, the Company secured a $5.0
million dollar asset based credit facility and used approximately $3.9 million
dollars to repay the balance due including interest to BFI.
Acquisition of Cryopolymers, Inc.
On November 19, 1997, the Company acquired all of the outstanding
common stock of Cryopolymers, Inc., ("Cryopolymers") a privately-held crumb
rubber producer located in St. Francisville, Louisiana. The purchase price
consisted of (i) $550,000 in shares of common stock based upon the closing bid
price the day prior to closing; (ii) 40,000 shares of Common Stock, valued at
$194,000 or $4.85 per share; (iii) warrants to purchase 240,000 shares of Common
Stock exercisable commencing April 1, 1998 for period of five years at prices
ranging from $15.00 to $35.00 per share; and (iv) additional warrants to
purchase 20,000 shares of Common Stock exercisable at $4.85 per share for a
period of five years and vesting 25% immediately and 25% each successive six
month period. The Company has determined the total purchase price to be $775,000
based upon a $4.85 closing price of the Common Stock prior to the closing and a
$31,000 value ascribed to the 260,000 warrants issued pursuant to SFAS No. 123,
"Accounting for Stock- Based Compensation" ("SFAS No. 123").
Issuance of Convertible Debentures Due December 2000
On December 12, 1997, (the "December Offering") the Company entered
into securities purchase agreements (the "Debenture Agreements") with two
investors (the "Debenture Holders") and pursuant thereto, the Company issued
Debentures in the aggregate principal amount of $1,600,000 (the "Initial
Debentures") and immediately exercisable two year warrants to purchase 32,000
shares of Common Stock at an exercise price of $3.44 per share. Each Initial
Debenture bears interest at 8% and is due December 15, 2000. The Initial
Debentures are convertible at the election of the holder at any time commencing
upon the earlier to occur of (i) the effective date of this registration
statement, or (ii) 60 days following the date of issuance at a conversion price
equal to the lower of the average closing bid prices on the five trading days
preceding the date of the closing of the December Offering or 75% of the average
closing bid prices on the five trading days preceding the date of the conversion
of the Debentures. The Debentures automatically convert into shares of Common
Stock upon maturity. The Company also issued immediately exercisable two year
warrants to purchase 32,000 shares of Common Stock at an exercise price of $3.44
per share to the placement agent.
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<PAGE>
Pursuant to the Debenture Agreements, the Debenture Holders have agreed
to purchase up to an additional $2,000,000 in the aggregate of Debentures
("Additional Debentures") in multiple tranches during 12 months following the
effective date of this registration statement. Each tranche shall be for the
purchase of between $75,000 and $175,000 in Additional Debentures and may be
completed at the election of the Company subject to certain conditions. Each
Additional Debenture shall bear similar terms to the Initial Debentures
including the issuance of warrants per Additional Debenture to both the
Debenture Holders and the placement agent. The Additional Debentures are
convertible at the holders option, within two days of issuance.
Pursuant to the terms of the Debenture Agreements, the Company is
obligated to require the Debenture Holders to purchase at least $1,000,000 in
Additional Debentures or the Company must provide the Debenture Holders and
placement agents warrants to purchase an additional 40,000 shares of Common
Stock in the aggregate.
The net proceeds from the December Offering were approximately
$1,350,000 after deducting commissions and expenses of approximately $250,000.
The Company paid $750,000 from the proceeds of the December Offering to BFI as
partial repayment of amounts owed to BFI in connection with the purchase of GMTM
and GMTG. The Company has recorded a deferred charge of approximately $533,000
associated with the impact of the 25% discount from market to be realized upon
conversion of the Debentures. The Company also recorded deferred financing costs
of $32,000 in connection with the issuance of warrants to purchase 320,000
shares of common stock to the investors and the placement agent in accordance
with SFAS No. 123. The deferred charges are being amortized over the estimated
life of the Debentures.
Issuance of Common Stock Upon Conversion of Company's Convertible Notes Due
October 1998
In accordance with the terms of the Convertible Notes Due October 1998
( the "Notes") issued by the Company in April 1997, the Company issued to
certain holders of the Notes in the period from November 1997 through March 25,
1998 a total of 1,062,991 shares of Common Stock in conversion of the entire
$1,500,000 in principal amount and interest of the Notes. See "RISK FACTORS --
Adverse Consequences Associated with Reservation of Substantial Shares of Common
Stock". The principal of the Notes is convertible at a conversion price equal to
the lower of the average closing bid prices on the five trading days preceding
the date of the closing of the April Offering or 70% of the average closing bid
prices on the five trading days preceding the date of the conversion of the
Notes upon conversion. The Note holders receive 800 shares of the Company's
common stock in lieu of interest for each $100,000 invested.
Legal Proceedings
In October 1994, the Company was sued in Louisiana State Court by a
former consultant seeking monetary damages relating to alleged nonpayment of
consulting fees and royalties for the Company's alleged use of the plaintiff's
proprietary technology.
The Company has retained local counsel and is vigorously contesting the
plaintiff's allegations. Discovery has been conducted and the parties are now
awaiting a pretrial status conference. A trial date has been set for May 23,
1998. The Company believes that the litigation will not have a material adverse
effect on its business.
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<PAGE>
No dealer, salesman or other person has been authorized to give any
information or make any representation other than those contained in this
Prospectus. If given or made, such information or representations must not be
relied upon as having been authorized by the Company. This Prospectus does not
constitute an offer to sell or the solicitation of an offer to buy any of the
securities other than the specific securities to which it relates, or as offer
or solicitation to any person in any jurisdiction where such an offer or
solicitation would be unlawful.
TABLE OF CONTENTS
Page
Available Information....................................2
Incorporation of Certain
Documents by Reference.................................2
Prospectus Summary.......................................4
Risk Factors.............................................5
The Company.............................................15
Use of Proceeds.........................................15
Selling Stockholders....................................16
Plan of Distribution....................................18
Legal Matters...........................................19
Experts.................................................19
Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities ..........................................19
Material Developments...................................19
2,235,069 Shares of Common Stock
GREENMAN TECHNOLOGIES, INC.
______________
PROSPECTUS
______________
April__, 1998
<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 $ 1,635.18
Legal Fees and Expenses 10,000.00
Accounting Fees and Expenses 4,000.00
Miscellaneous Fees and Expenses 2,000.00
-----------
Total Expenses $ 17,635.18
===========
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.
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
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<PAGE>
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 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."
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<PAGE>
Item 16. Exhibits
The following documents have been previously filed as Exhibits and are
incorporated herein by reference if so noted 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.
4.1 Form of Securities Purchase Agreement between the Company and
Investors in the December Offering, incorporated by reference
to Exhibit 10.70 of the Company's Form 10-QSB for the Quarter
ended November 30, 1997.
4.2 Form of Registration Rights Agreement between the Company and
Investors in the December Offering , incorporated by reference
to Exhibit 10.71 of the Company's Form 10-QSB for the Quarter
ended November 30, 1997.
4.3 Form of Convertible Debenture due December 2000, incorporated
by reference to Exhibit 10.72 of the Company's Form 10-QSB for
the Quarter ended November 30, 1997.
4.4 Form of Common Stock Purchase Warrant, incorporated by
reference to Exhibit 10.73 of the Company's Form 10-QSB for
the Quarter ended November 30, 1997.
5* Opinion of Sullivan & Worcester LLP regarding legality of
shares registered hereunder.
23.1* Consent of Wolf & Company, P.C., independent public
accountants
23.2 Consent of Sullivan & Worcester LLP (included in Exhibit 5),
previously filed with this Registration Statement.
- ---------------
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
II-3
<PAGE>
of prospectus filed with the Commission pursuant to
Rule 424(b) (Section 230.424(b) of 17 C.F.R.) if, in
the aggregate, 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.
II-4
<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 Amendment to
the Registration Statement to be signed on its behalf by the undersigned
thereunto duly authorized, in the Town of Lynnfield, Commonwealth of
Massachusetts, on April 6, 1998.
GREENMAN TECHNOLOGIES, INC.
By:/s/ Robert H. Davis
Robert H. Davis
President and Chief Executive Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Form S-3 relating to Common Shares has been signed by the following persons
in the capacities and on the dates indicated. Each person whose signature
appears below hereby authorizes Robert H. Davis and Charles E. Coppa, and each
of them, to file one or more amendments (including additional post-effective
amendments) to this Registration Statement, which amendments may make such
changes as any of such persons deem appropriate, and each person, individually
and in each capacity stated below, hereby appoints each of such persons as
attorney-in-fact to execute in his name and on his behalf any of such amendments
to the Registration Statement.
Signature Title Date
- --------- ----- ----
/s/ Maurice E. Needham Chairman of the Board of Directors April 6, 1998
Maurice E. Needham
/s/ Robert H. Davis President, Chief Executive Officer April 6, 1998
Robert H. Davis and Director (Principal Executive
Officer)
/s/ Joseph E. Levangie Vice Chairman and Director April 6, 1998
Joseph E. Levangie
/s/ Charles E. Coppa Acting Chief Financial Officer, April 6, 1998
Charles E. Coppa Assistant Secretary (Principal
Financial and Accounting Officer)
/s/ Lew F. Boyd Director April 6, 1998
Lew F. Boyd
/s/ Robert D. Maust Director April 6, 1998
Robert D. Maust
/s/ Jagruti Oza Director April 6, 1998
Jagruti Oza
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
April 6, 1998
GreenMan Technologies, Inc.
7 Kimball Lane, Building A
Lynnfield, Massachusetts 01940
Ladies & 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 2,235,069 shares (the
"Shares") of the Company's Common Stock, $.01 par value per share ("Common
Stock"), consisting of: (i) up to 1,219,048 Shares issuable upon conversion of
the Company's Convertible Debentures due December 2000 (the "Debentures"); (ii)
32,000 Shares underlying common stock purchase warrants (the "Investor
Warrants") issued to the purchasers of the Debentures in connection with the
sale of the Debentures; and (iii) 32,000 Shares underlying common stock purchase
warrants issued to the placement agent (the "Broker Warrants" and, together with
the Investor Warrants, the "Warrants") in connection with the sale of the
Debentures and Investor Warrants; (iv) 761,905 Shares issuable upon conversion
of Additional Debentures; (v) 40,000 Shares of underlying common stock purchase
warrants issuable to the investors and placement agent in connection with the
sale of Additional Debentures; (vi) 133,402 Shares issued to Messer Griesheim
Industries, Inc.; and (vii) 16,714 Shares issued to James Ford pursuant to a
settlement agreement dated December 4, 1997 between the Company and Mr. Ford.
The Registration Statement also relates to a currently indeterminate number of
shares of Common Stock that may become issuable in accordance with the terms of
the Notes and the Warrants.
<PAGE>
GreenMan Technologies, Inc.
April 6, 1998
Page 2
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
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,
/s/ SULLIVAN & WORCESTER LLP
SULLIVAN & WORCESTER LLP
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement of
GreenMan Technologies, Inc. on Form S-3 of our report, which included an
explanatory paragraph about the Company's ability to continue as a going
concern, dated August 26, 1997, appearing in the Annual Report on Form
10-KSB/A-1 of GreenMan Technologies, Inc. for the fiscal year ended May 31, 1997
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
April 6, 1998
