GREENMAN TECHNOLOGIES INC, 10QSB, 1999-05-17

GREENMAN TECHNOLOGIES INC
10QSB, 1999-05-17
PLASTICS PRODUCTS, NEC

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

Form 10-QSB

Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934

For Quarter Ended March 31, 1999 Commission File Number 1-13776
--------------- ---------

GreenMan Technologies, Inc.
-------------------------------------
(Exact name of small business issuer as specified in its charter)

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

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

Issuer's telephone number, including area code (781) 224-2411
--------------

---------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report.)

Indicate by check mark whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes |X| No |_|

Number of shares outstanding as of May 14, 1999

Common Stock, $.01 par value, 11,495,970 shares

<PAGE>

GreenMan Technologies, Inc.
Form 10-QSB
Quarterly Report
March 31, 1999

Table of Contents

PART I - FINANCIAL INFORMATION Page
----

Item 1. Financial Statements (*)

Unaudited Condensed Consolidated Balance Sheets as of
September 30, 1998 and March 31, 1999 3

Unaudited Condensed Consolidated Statements of Loss for the three
months ended February 28, 1998 and March 31, 1999 and six months
ended February 28, 1998 and March 31, 1999 4

Unaudited Condensed Consolidated Statement of Changes in
Stockholders' Equity for the six months ended March 31, 1999 5

Unaudited Condensed Consolidated Statements of Cash Flows for
the six months ended February 28, 1998 and March 31, 1999 6-7

Notes to Unaudited Condensed Consolidated Financial Statements 8-16

Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 17-22

PART II - OTHER INFORMATION

Item 1. Legal Proceedings 23

Item 2. Changes in Securities 23

Item 3. Defaults Upon Senior Securities 23

Item 4. Submission of Matters to a Vote of Security Holders 24

Item 5. Other Information 24

Item 6. Exhibits and Reports on Form 8-K 24

Signatures 25

* The financial information at September 30, 1998 has been taken from audited
financial statements at that date and should be read in conjunction therewith.
All other financial statements are unaudited.

** All share and per share data in this Form 10-QSB 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.

2
<PAGE>

GreenMan Technologies, Inc.
Unaudited Condensed Consolidated Balance Sheets

<TABLE>
<CAPTION>
September30, March 31,
1998 1999
------------ ------------
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents ............................................ $ 161,215 $ 355,632
Accounts receivable, trade, less allowance for doubtful
accounts of $58,166 and
$60,600 as of September 30, 1998 and March 31, 1999 ............... 1,685,885 2,246,764
Inventory ............................................................ 229,037 141,826
Insurance claim receivable ........................................... 2,120,284 1,750,000
Other current assets ................................................. 740,859 821,507
------------ ------------
Total current assets .............................................. 4,937,280 5,315,729
------------ ------------
Property and equipment, net ............................................ 9,126,573 8,990,770
------------ ------------
Other assets:
Deferred financing costs ............................................. 306,304 --
Deferred loan costs .................................................. 250,436 196,764
Goodwill, net ........................................................ 2,347,143 1,897,463
Other ................................................................ 439,023 512,889
------------ ------------
3,342,906 2,607,116
------------ ------------
$ 17,406,759 $ 16,913,615
============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Convertible notes payable, current ................................... $ 300,000 $ 300,000
Notes payable, related party ......................................... 4,956 --
Notes payable, current ............................................... 1,678,399 2,391,114
Accounts payable ..................................................... 1,714,529 1,773,655
Accrued expenses, other .............................................. 1,932,789 2,053,667
Obligations under capital leases, current ............................ 542,058 1,701,299
------------ ------------
Total current liabilities ......................................... 6,172,731 8,219,735
Convertible notes payable, non-current portion ....................... 839,740 --
Notes payable, non-current portion ................................... 3,546,207 3,303,902
Obligations under capital leases, non-current portion ................ 1,568,364 1,100,000
------------ ------------
Total liabilities ................................................. 12,127,042 12,623,637
------------ ------------
Stockholders' equity:
Preferred stock, $1.00 par value, 1,000,000 shares authorized:
Class B convertible, liquidation value $10.00 per
share, 320,000 shares issued and
outstanding at September 30, 1998 and March 31, 1999 .............. 3,200,000 3,200,000
Common stock, $.01 par value, 20,000,000 shares authorized; 6,910,247
and 11,495,970 shares issued and outstanding at
September 30, 1998 and March 31, 1999 ............................. 69,103 114,960
Additional paid-in capital ........................................... 21,366,619 22,827,528
Accumulated deficit .................................................. (19,356,005) (21,797,510)
------------ ------------
5,279,717 4,344,978
Notes receivable, common stock ..................................... -- (55,000)
------------ ------------
Total stockholders' equity ........................................ 5,279,717 4,289,978
------------ ------------
$ 17,406,759 $ 16,913,615
============ ============
</TABLE>

- --------------------------------------------------------------------------------

See accompanying notes to unaudited condensed consolidated financial statements

3
<PAGE>

GreenMan Technologies, Inc.
Unaudited Condensed Consolidated Statements of Loss

Three Months Ended Six Months Ended
February 28, March 31, February 28, March 31,
1998 1999 1998 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net sales ....................................... $ 2,271,066 $ 3,804,660 $ 4,672,408 $ 8,185,611
Cost of sales ................................... 1,772,058 2,974,649 3,523,051 6,052,047
------------ ------------ ------------ ------------
Gross profit .................................... 499,008 830,011 1,149,357 2,133,564
------------ ------------ ------------ ------------
Operating expenses:
Research and development ..................... 51,735 16,250 108,470 30,625
Selling, general and
administrative ............................... 793,862 946,127 1,546,383 1,918,260
------------ ------------ ------------ ------------
Total operating expenses ................... 845,597 962,377 1,654,853 1,948,885
------------ ------------ ------------ ------------
Operating (loss) profit ......................... (346,589) (132,366) (505,496) 184,679
------------ ------------ ------------ ------------
Other income (expense):
Interest and financing costs ................. (753,372) (160,959) (1,325,103) (584,975)
Casualty loss ................................ -- (955,000) -- (955,000)
Other, net ................................... 1,091 18,534 1,091 15,076
------------ ------------ ------------ ------------
Other (expense), net ....................... (752,281) (1,097,425) (1,324,012) (1,524,899)
------------ ------------ ------------ ------------
Loss from continuing operations ................. (1,098,870) (1,229,791) (1,829,508) (1,340,220)
------------ ------------ ------------ ------------
Discontinued operations:
Loss from discontinued operations ............ (243,719) (70,901) (495,883) (181,285)
Loss on disposal of discontinued operations .. (1,100,000) (920,000) (1,100,000) (920,000)
------------ ------------ ------------ ------------
(1,343,719) (990,901) (1,595,883) (1,101,285)
------------ ------------ ------------ ------------
Net loss ........................................ $ (2,442,589) $ (2,220,692) $ (3,425,391) $ (2,441,505)
============ ============ ============ ============

Loss from continuing operations per share - basic $ (0.49) $ (0.11) $ (1.05) $ (0.14)
Loss from discontinued operations
per share - basic ............................... (0.11) (0.01) (0.29) (0.02)
Loss on disposal of discontinued
operations- basic ............................... (0.49) (0.08) (0.63) (0.09)
------------ ------------ ------------ ------------
Net loss per share - basic ...................... $ (1.09) $ 0.20) $ (1.97) $ (0.25)
============ ============ ============ ============

Weighted average shares outstanding ............. 2,236,756 11,171,235 1,737,178 9,788,142
============ ============ ============ ============
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements.

4
<PAGE>

GreenMan Technologies, Inc.
Consolidated Statement of Changes in Stockholders' Equity
Six Months Ended March 31, 1999

Preferred Stock Common Stock Additional
--------------------------- --------------------------- Paid-in
Shares Amount Shares Amount Capital
------------ ------------ ---------- ----------------------------
<S> <C> <C> <C> <C> <C>
Balance, September 30, 1998 .................... 320,000 $ 3,200,000 6,910,247 $ 69,103 $ 21,366,619
Shares issued on conversion of notes payable
and accrued interest ......................... -- -- 3,001,110 30,011 882,655
Fair value of conversion discount on accrued
interest associated with convertible notes
payable ...................................... -- -- -- -- 16,100
Sale of common stock ........................... -- -- 1,538,613 15,386 539,614
Stock issued for services rendered ............. -- -- 50,000 500 24,500
Shares issued for notes receivable ............. -- -- -- -- --
Shares purchased and retired ................... -- -- (4,000) (40) (1,960)
Net loss for the six months ended March 31, 1999 -- -- -- -- --
------------ ------------ ------------ ------------ ------------
Balance, March 31, 1999 ........................ 320,000 $ 3,200,000 11,495,970 $ 114,960 $ 22,827,528
============ ============ ============ ============ ============

Accumulated Common
Deficit Stock Total
------------- ------------- --------------
<S> <C> <C> <C>
Balance, September 30, 1998 .................... $(19,356,005) $ -- $ 5,279,717
Shares issued on conversion of notes payable
and accrued interest ......................... -- -- 912,666
Fair value of conversion discount on accrued
interest associated with convertible notes
payable ...................................... -- -- 16,100
Sale of common stock ........................... -- -- 555,000
Stock issued for services rendered ............. -- -- 25,000
Shares issued for notes receivable ............. -- (55,000) (55,000)
Shares purchased and retired ................... -- -- (2,000)
Net loss for the six months ended March 31, 1999 (2,441,505) -- (2,441,505)
------------ ------------ ------------
Balance, March 31, 1999 ........................ $ 21,797,510 $ (55,000) $ 4,289,978
============ ============ ============
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements.

5
<PAGE>

GreenMan Technologies, Inc.
Unaudited Condensed Consolidated Statements of Cash Flow

<TABLE>
<CAPTION>
Six Months Ended
February 28, March 31,
1998 1999
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net loss ............................................. $(3,425,391) $(2,441,505)
Adjustments to reconcile net loss to net cash (used)
for operating activities:
Amortization of deferred financing costs ............. 794,354 306,304
Depreciation and amortization ........................ 669,264 924,826
Common stock issued for accrued interest ............. 214,615 --
Loss on disposal of discontinued operations .......... 1,100,000 920,000
Decrease (increase) in assets:
Accounts receivable ................................ 834,606 (560,879)
Inventory .......................................... 242,931 87,211
Insurance claim receivable ......................... -- 370,284
Other current assets ............................... (200,197) (80,648)
Deferred offering costs ............................ (208,000) --
Deferred loan costs ................................ (50,000) 67,877
(Decrease) increase in liabilities:
Accounts payable ................................... (479,769) 59,126
Accrued expenses ................................... 346,796 484,088
----------- -----------
Net cash (used) for operating activities ........ (160,791) 67,817
----------- -----------
Cash flows from investing activities:
Purchase of property and equipment ................... (984,680) (972,203)
Refund on equipment .................................. 13,000 --
Cash acquired on purchase of Cryopolymers Inc. ....... 117,064 --
(Increase) in other assets ........................... (57,651) (55,525)
----------- -----------
Net cash (used for) investing activities .......... (912,267) (1,027,728)
----------- -----------
Cash flows from financing activities:
Net advances under line of credit .................... 204,678 519,584
Repayment of notes payable ........................... (4,715,912) (492,016)
Proceeds from notes payable .......................... 5,043,380 642,839
Repayment of notes payable related parties ........... (27,255) (4,956)
Principal payments on obligations under capital leases (2,715) (9,123)
Net proceeds on the sale of common stock ............. 225,000 550,000
Repurchase of common stock ........................... -- (2,000)
Net proceeds on exercise of common stock warrants .... (123,750) --
----------- -----------
Net cash provided by financing activities ........... 603,426 1,154,328
----------- -----------
Net (decrease) increase in cash ......................... (469,632) 194,417
Cash and cash equivalents at beginning of period ........ 835,367 161,215
----------- -----------
Cash and cash equivalents at end of period .............. $ 365,735 $ 355,632
=========== ===========
Supplemental cash flow information:
Machinery and equipment acquired under capital leases . $ 3,055,791 $ --
Common stock issued upon conversion of notes payable
and accrued interest .................................. 2,355,791 912,666
Interest paid ......................................... 323,708 266,235
</TABLE>

- --------------------------------------------------------------------------------
See accompanying notes to unaudited condensed consolidated financial statements.

6
<PAGE>

GreenMan Technologies, Inc.
Consolidated Statements of Cash Flow
(Concluded)

Supplemental Schedule of Non-cash Investing and Financing Activities

On November 19, 1997, Company purchased all of the capital stock of
Cryopolymers, Inc. as follows:

Fair value of assets acquired $ 1,016,597
Fair value of liabilities assumed 341,597
-----------
Fair value of net assets acquired 675,000
Common stock issued (744,000)
Value ascribed to warrants issued under SFAS No. 123 ( 31,000)
Excess of cost over fair value of net assets $ 100,000
===========

See accompanying notes to unaudited condensed consolidated financial statements.

7
<PAGE>

GreenMan Technologies, Inc.
Notes To Unaudited Condensed Consolidated Financial Statements
March 31, 1999

1. Business

GreenMan Technologies, Inc. (the "Company" or "GreenMan") is in the
business of collecting, shredding and marketing of scrap tires. The tire
recycling operations (the "Recycling Operations") are located in Jackson and
Lawrenceville, Georgia; Savage, Minnesota and Batesburg, South Carolina.

Until closure in January 1998, the Company also operated an injection
molding operation (the "Molding operation") located in Malvern, Arkansas. In
August 1998, the Company's Louisiana crumb rubber processing facility was
severely damaged by a fire which necessitated the closure of the operation. In
March 1999, the Company decided to discontinue operations at its wholly-owned
subsidiary, DuraWear Corporation ("DuraWear"). DuraWear manufactures, installs
and markets a diverse range of abrasive resistant ceramic and polymer products.

On June 30, 1997, the Company acquired as wholly owned subsidiaries, all
of the capital stock of BFI Tire Recyclers of Minnesota, Inc. ("BTM") and BFI
Tire Recyclers of Georgia, Inc. ("BTG"), both of which were wholly-owned
subsidiaries of Browning-Ferris Industries, Inc. and are in the scrap tire
collection and processing business. BTM and BTG have been renamed GreenMan
Technologies of Minnesota, Inc. ("GMTM") and GreenMan Technologies of Georgia,
Inc. ("GMTG"), respectively.

On November 19, 1997, the Company acquired as a wholly owned subsidiary,
all of the capital stock of Cryopolymers, Inc., ("Cryopolymers") a processor of
scrap tire chips into crumb rubber located in St. Francisville, Louisiana.
Cryopolymers has been renamed GreenMan Technologies of Louisiana, Inc. ("GMTL").
GMTL ceased processing operations in August 1998 due to a fire and GMTL's
facility was completely closed in December 1998.

On September 4, 1998, the Company acquired all of the scrap tire
collection and processing assets of United Waste Service, Inc. ("United"), a
wholly owned subsidiary of Republic Services, Inc. The two recycling operations
are located in Lawrenceville, Georgia and Batesburg, South Carolina. The
Lawrenceville operation was assumed by GMTG. The Batesburg operation has been
incorporated as GreenMan Technologies of South Carolina, Inc. ("GMTSC").

2. Basis of Presentation

The consolidated financial statements include the results of the Company,
GMTM and GMTG for all periods presented, GMTL since November 19, 1997 and GMTSC
since September 4, 1998. All significant intercompany accounts and transactions
are eliminated in consolidation.

The Company discontinued operations at the Malvern, Arkansas molding
operation effective January 1998. Management adopted a formal plan to dispose of
the facility on January 31, 1998. In March 1999, the Company decided to dispose
of its operations at its DuraWear subsidiary effective March 1999. Management
adopted a formal plan to dispose of DuraWear. As a result, the consolidated
financial statements of the Company were restated to reflect the operating
results of the discontinued operations as a separate line item for all periods
presented.

The financial statements are unaudited and should be read in conjunction
with the financial statements and notes thereto for the transition period ended
September 30, 1998 included in the Company's Form 10-KSB/A-1. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to the Securities and Exchange Commission ("SEC")
rules and regulations, although the Company believes the disclosures which have
been made are adequate to make the information presented not misleading.

The results of operations for the periods reported are not necessarily
indicative of those that may be expected for a full year. In the opinion of
management, all adjustments (consisting only of normal recurring adjustments)
which are necessary for a fair statement of operating results for the interim
periods presented have been made.

8
<PAGE>

GreenMan Technologies, Inc.
Notes To Unaudited Condensed Consolidated Financial Statements
March 31, 1999

3. Change in Fiscal Year

On June 24,1998, the Board of Directors of the Company adopted a change of
its fiscal year-end from May 31 of each year to September 30. Accordingly,
during the first full year of the newly adopted fiscal period, quarterly results
for the periods ended December 1998, March 1999 and June 1999 will be compared
to prior fiscal periods ended November 1997, February 1998 and May 1998
respectively. Management believes there are no significant factors which would
negatively impact the comparability of the information or trends reflected.

4. Net Loss Per Share

Basic earnings per share represents income available to common stock
divided by the weighted average number of common shares outstanding during the
period. Diluted earnings per share reflects additional common shares that would
have been outstanding if potential dilutive common shares had been issued, as
well as any adjustment to income that would result from the assumed conversion.
Potential common shares that may be issued by the Company relate to outstanding
stock options and warrants, (determined using the treasury stock method) and
convertible debt. The assumed conversion of outstanding dilutive stock options
and warrants would increase the shares outstanding but would not require an
adjustment to income as a result of the conversion. For all periods presented,
options, warrants and convertible debt were anti-dilutive and excluded from the
net loss per share computation.

All share and per share data in the financial statements 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.

5. Acquisition of Subsidiaries

On June 30, 1997, the Company acquired, as wholly owned subsidiaries, all
of the capital stock of BFI Tire Recyclers of Minnesota, Inc. ("BTM") and BFI
Tire Recyclers of Georgia, Inc. ("BTG"), both of which were wholly-owned
subsidiaries of Browning-Ferris Industries, Inc. and are in the scrap tire
collection and processing business. BTM and BTG were renamed GreenMan
Technologies of Minnesota, Inc. ("GMTM") and GreenMan Technologies of Georgia,
Inc. ("GMTG"), respectively. The Company agreed to pay $5,331,516 for all of the
outstanding capital stock of GMTM and GMTG of which $650,000 was paid as a
deposit and the balance of $4,681,516 was financed by a short-term note, at an
interest rate of 10% from BFI. The acquisition has been accounted for by the
purchase method of accounting, and accordingly, the net assets and results of
operations of GMTM and GMTG are included in the consolidated financial
statements since the date of acquisition.

On November 19, 1997, the Company acquired as a wholly owned subsidiary
all of the outstanding common stock of Cryopolymers Inc., (renamed GreenMan of
Louisiana or "GMTL") a privately-held crumb rubber producer located in St.
Francisville, Louisiana. The purchase price consisted of (1) 153,402 shares of
common stock (then valued at $744,000); (2) 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 (3) additional warrants to
purchase 20,000 shares of common stock exercisable at $4.85 per share for a
period of five years and vesting over a two-year period. The Company has
determined the total purchase price to be $775,000 based upon the value of the
common stock and a $31,000 value ascribed to the warrants to purchase 260,000
shares of common stock at varying prices. The acquisition has been accounted for
as a purchase and accordingly, the operations of GMTL are included in the
consolidated financial statements since November 19, 1997.

Goodwill was recorded as the total consideration paid by the Company
exceeded the fair value of the net assets acquired by $100,000. In August 1998,
GMTL's facility was severely damaged by a fire which necessitated the closure of
the operation. As a result, the remaining goodwill balance was expensed as of
September 30, 1998.

9
<PAGE>

GreenMan Technologies, Inc.
Notes To Unaudited Condensed Consolidated Financial Statements
March 31, 1999

5. Acquisition of Subsidiaries - (Continued)

On September 4, 1998, the Company acquired all of the scrap tire
collection and processing assets of United Waste Service, Inc. ("United"), a
wholly owned subsidiary of Republic Services, Inc. The Company paid $4,050,000
for the acquired assets in the form of $850,000 in cash and $3,200,000 of
preferred stock. The preferred stock is convertible into the Company's common
stock beginning in February 2001 based upon the higher of the trailing 15 day
average closing bid (as defined) prices prior to the conversion date or the
average of the closing bid prices during the period from September 3, 1998 to
February 3, 2001. The 320,000 shares of Class B convertible preferred stock have
a liquidation value of $10 per share. Simultaneous with the acquisition, the
Company entered into an equipment financing agreement with Heller Financial Inc.
which provided $850,000 in cash that was required for the transaction. The
acquired assets are located in Lawrenceville, Georgia (reported as an operating
division of GMTG until February 1999 when consolidated into GMTG's Jackson
location) and Batesburg, South Carolina (incorporated as GreenMan Technologies,
of South Carolina, Inc. "GMTSC") .The acquisition has been accounted for as a
purchase and accordingly, the operations are included in the consolidated
financial statements since September 4, 1998. Goodwill was recorded as the total
consideration paid by the Company exceeded the fair value of the net assets
acquired by $2,015,000.

The following unaudited proforma financial information summarizes the
consolidated results of operations of the Company and the subsidiaries as if the
acquisitions had occurred at the beginning of fiscal year ended May 31,1998. The
unaudited proforma information is not necessarily indicative of the results of
operations that would have occurred had the purchase been made at the beginning
of the fiscal year or of future results of operations of the combined companies.

Three Months Six Months
Ended Ended
February 28, 1998 February 28, 1998
----------------- ------------------

Revenue $ 3,547,236 $ 7,224,748
Net Loss From Continuing Operations (1,045,908) (1,723,584)
Net Loss (2,389,627) (3,319,467)
Net Loss per Weighted Average Share (1.07) (1.91)

6. Insurance Claim Receivable on Casualty Loss

In August 1998, GMTL's facility was damaged by a fire which necessitated
the closure of the operation. The Company does not intend to rebuild in St.
Francisville, Louisiana and does not plan to re-establish crumb rubber
capabilities at this time.

Under the terms of GMTL's $3,000,000 property insurance policy, the
insurance company has agreed to pay approximately $2,050,000 as of March 31,
1999 towards the insured loss. The remaining $950,000 may be paid if the Company
can demonstrate, to the insurance company's satisfaction, that the Company's has
invested at least $3,000,000 (replacement policy limit) in alternative tire
recycling equipment that satisfies the replacement requirements of the insurance
policy. There can be no assurance that this will be the case or that the Company
will ever receive the additional insurance proceeds. In January 1999, the
Company submitted a proposal to the insurance company, which would allow GMT to
receive the remaining funds due under the policy. The Company will recognize the
remaining $950,000 of insurance proceeds when it has received approval from the
insurance company and has replaced the damaged property. As a result of the
closure of GMTL, management wrote down all GMTL assets to their estimated net
realizable value and accrued for all remaining estimated fire related costs at
September 30, 1998 resulting in a casualty loss of $1,450,000.

10
<PAGE>

GreenMan Technologies, Inc.
Notes To Unaudited Condensed Consolidated Financial Statements
March 31, 1999

6. Insurance Claim Receivable on Casualty Loss - (Continued)

The Company also recorded an insurance receivable of approximately
$200,000 at March 31, 1999 associated with its business interruption policy. In
April 1999, the Company received the $200,000 from the insurance company.

On December 31, 1998 the Company reached an agreement in principal with
the lessor of GMTL's cryogenic equipment whereby the lessor agreed to forgive
$500,000 of capital lease obligations in return for a $500,000 payment when the
Company received the actual cash value ("ACV") payment from the insurance
company. The lessor agreed to execute a 10 year note payable with the Company
for the remaining capital lease balance of $1,600,000. The note would bear
interest at 10% per annum and be payable in monthly payments of $21,144
including interest and principal starting in June 1999. The Company recorded
this forgiveness of debt as other income for the period ended September 30,
1998. The Company, however, subsequently received correspondence from attorneys
for the lessor purporting to terminate the lease restructuring and demanding
payment of the original lease buyout of approximately $3,100,000. The lessor
also sought an additional $400,000 for cryogenic rubber recycling equipment the
lessor contended was purchased on behalf of the Company. On May 14, 1999, the
Company and the lessor reached a settlement whereby the lessor agreed to assign
to the Company all interest in and to any additional insurance proceeds to be
received as a result of the August 21, 1998 fire; transfer ownership of the
additional cryogenic rubber recycling equipment to the Company; and withdraw
from all legal proceedings against the Company. In return, the Company agreed to
pay the lessor (1) $1,700,000 of escrowed insurance proceeds; (2) execute a
$1,100,000 sixty month note payable, bearing interest at 7.75% with monthly
payments of $7,500 and a balloon payment due May 2004; (3) issue 250,000 shares
of common stock (valued at $190,000); (4) issue immediately exercisable warrants
to purchase 450,000 shares of common stock (value ascribed at $100,000) for
period of ten years at $.81 per share and (4) pay all fees associated with the
settlement agreement. The Company has determined the total settlement to equal
$3,255,000 resulting in an additional casualty loss to be recorded at March 31,
1999 of $955,000. The $1,100,000 note payable is personally guaranteed by four
officers of the Company and may be prepaid prior to December 31, 1999 at a
$200,000 discount. The Company has pledged the common stock of GMTSC as
collateral to the four officers for their personal guarantees. The Company has
assigned a value of $200,000 to the cryogenic rubber recycling equipment and is
currently marketing the equipment to potential purchasers.

7. Inventory

Inventory consists of the following:

September 30, March 31,
1998 1999
------------ ------------
Raw materials .................. $ 8,517 $ 6,414
Work in process ................ 19,552 --
Finished goods ................. 200,968 $ 135,412
------- -------
$ 229,037 $ 141,826
========== =========

11
<PAGE>

GreenMan Technologies, Inc.
Notes To Unaudited Condensed Consolidated Financial Statements
March 31, 1999

8. Property, Plant and Equipment

Property, plant and equipment consists of the following:

September 30, March 31, Estimated
1998 1999 Useful
Lives
------------- ------------ -----------
Land .............................. $ 879,162 $ 879,162
Buildings ......................... 2,561,924 2,135,945 5-25 years
Machinery and equipment ........... 4,007,240 4,443,219 3-20 years
Furniture and fixtures ............ 91,564 85,278 3-7 years
Motor vehicles .................... 2,699,498 3,002,395 3-10 years
----------- -----------
10,239,388 10,545,999
Less accumulated depreciation
and amortization .................. (1,112,815) (1,555,229)
----------- -----------
Property, plant and equipment (net) 9,126,573 8,990,770
=========== ===========

9. Discontinued 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.

Management adopted a formal plan to dispose of the Facility on January 31,
1998. As a result, the Company recorded a loss on disposal of the Facility of
$1,100,000 and wrote down the Facility's net assets to their estimated fair
market value. The consolidated financial statements of the Company were restated
to reflect the net operating results of the Facility as a separate line item for
all periods presented. The Company reported a loss from discontinued operations
associated with the Facility for the three months and six months ended February
28, 1998 of $216,384 and $513,920 respectively. In July 1998, the Company
disposed of the remaining assets and converted $300,000 of capital lease
obligations into a $300,000, convertible note payable that bears interest at the
rate of 10% per annum. The note is payable in 36 monthly payments of $9,680 and
is convertible into shares of the Company's common stock at the holder's option,
at $1.38 per share. As of March 31, 1999, the note is in default and the note
holder has commenced legal proceedings to collect all amounts due. The note
bears interest at the rate of 18% per annum from and after an event of default.
The Company has classified the note as a current liability and is in
negotiations with the note holder to rectify the default. At September 30, 1998
and March 31, 1999, the Company had approximately $246,000 and $155,000,
respectively of the Facility's net obligations remaining which are included in
accrued expenses. The Company is currently negotiating payment terms with the
remaining creditors, but has not reached settlement with such creditors.

In March 1999, the Company decided to discontinue operations at its
DuraWear subsidiary in order to eliminate continued operating losses and focus
efforts on the Company's core business of tire recycling. Management adopted a
formal plan to dispose of DuraWear on March 31, 1999 (the "Measurement Date").
As a result, the Company recorded an estimated loss on disposal of DuraWear of
$920,000 and has written down DuraWear's net assets to their estimated fair
market value at March 31, 1999. On May 6, 1999, the Company signed a letter of
intent to sell substantially all the assets of DuraWear to a third party. (See
Note 16 Subsequent Events)

The consolidated financial statements of the Company have been restated to
reflect the net operating results of DuraWear as a separate line item ("Loss
from discontinued operations") for all periods presented. The Company reported a
loss from discontinued operations associated with DuraWear for the three months
ended February 28, 1998 of $27,335 and income from discontinued operations of
$18,037 for the six months ended February 28, 1998 and a loss from discontinued
operations of $70,901 and $181,285, respectively, for the three and six months
ended March 31, 1999. At September 30, 1998 and March 31, 1999, DuraWear's
assets totaled $1,979,493 and $994,351, respectively, and represented 11% and 6%
of consolidated assets.

12
<PAGE>

GreenMan Technologies, Inc.
Notes To Unaudited Condensed Consolidated Financial Statements
March 31, 1999

10. Convertible Notes Payable

December 1997 Debentures

In December 1997, 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 $3.13 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 the registration statement covering the shares issuable upon conversion
of the Debentures, 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 $3.13 per share to the placement agent.

The net proceeds from the December Offering were approximately $1,350,000
after deducting commissions and expenses of approximately $250,000. The Company
used $750,000 of the proceeds to paydown the outstanding loan payable to BFI for
the purchase of GMTM and GMTG. The Company recorded a deferred charge of
approximately $533,000 associated with 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 64,000 shares of common stock to the investors and placement agents in
accordance with SFAS No. 123.

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 the registration statement covering the shares issuable upon
conversion of the Debentures. 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 borrow 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. As of March 31, 1999, all of the Initial Debentures and accrued
interest have been converted into shares of common stock. Subsequent to March
31, 1999, the Company notified the Debenture Holders that it will not borrow the
remaining $550,000 of the commitment and will issue the additional warrants.

The Company issued $450,000 of Additional Debentures during the period
ended September 30, 1998 and immediately exercisable two-year warrants to
purchase 27,000 shares of Common Stock at an exercise prices ranging from $1.17
to $2.41 per share. The Company also issued immediately exercisable two year
warrants to purchase 27,000 shares of common stock at an exercise prices ranging
from $1.17 to $2.41 per share to the placement agent. The Company recorded a
deferred charge of approximately $150,000 associated with the 25% discount from
market to be realized upon conversion of the Additional Debentures. The Company
also recorded deferred financing costs of $54,000 in connection with the
issuance of warrants to purchase 54,000 shares of common stock to the investors
and placement agents in accordance with SFAS No. 123. During January 1999, the
remaining $257,500 of Additional Debentures and $27,039 of accrued interest were
converted into 874,465 shares of common stock.

The deferred charges have been amortized over the estimated life of the
Initial and Additional Debentures. Amortization and interest expense for the
three and six months ended March 31, 1999 was $21,111 and $332,494,
respectively.

13
<PAGE>

GreenMan Technologies, Inc.
Notes To Unaudited Condensed Consolidated Financial Statements
March 31, 1999

11. Letter of Intent

On June 1, 1998, the Company signed a letter of intent to acquire all of
the capital stock of Mac's Tire Recyclers ("Mac's") a privately-held tire
recycler located in Saltillo, Mississippi. The Company operated the Mac's
facility from June 1, 1998 until April 16, 1999 under a management agreement
(the "management agreement"). The management agreement provides for the Company
to earn a management fee equal to 90% of the net income of Mac's before
depreciation and income taxes. The Company recognized no income under this
agreement for the quarter ended March 31, 1999 and $36,000 for the six months
ended March 31, 1999. The amount receivable from Mac's was approximately
$151,000 at March 31, 1999. The management agreement term expired on April 16,
1999 and accordingly, the Company is no longer managing Mac's operations. Based
upon due diligence, both parties have agreed not to proceed with the
acquisition.

12. Capital Leases

In October 1997, the Company entered into a fifteen-year cryogenic
equipment lease agreement. Under the terms of the agreement, GMTL was paying
$25,500 per month plus an additional $100,000 of bonus rent per year for the
first six years of the agreement. The bonus rents were payable in the Company's
common stock with the number of shares determined using the closing bid price of
the common stock on each December 31. The lease was classified as a capital
lease at May 31, 1998 with an equipment value of $2,771,876. As a result of the
August 21, 1998 fire at GMTL, the leased cryogenic equipment was destroyed. On
December 31, 1998 the company reached an agreement in principal with the lessor
of GMTL's cryogenic equipment whereby the lessor agreed to forgive $500,000 of
capital lease obligations in return for a $500,000 payment when the Company
receives the additional payment from the insurance company. The lessor agreed to
execute a 10-year note payable with the Company for the remaining capital lease
balance of $1,600,000. The note will bear interest at 10% per annum and is
payable in monthly payments of $22,144 including interest starting in June 1999.
The Company has recorded this forgiveness of debt as other income for the period
ended September 30, 1998. The Company, however, subsequently received
correspondence from attorneys for the lessor purporting to terminate the lease
restructuring and demanding payment of the original lease buyout of
approximately $3,100,000. The lessor also sought an additional $400,000 for
cryogenic rubber recycling equipment the lessor contended was purchased on
behalf of the Company. On May 14, 1999, the Company and the lessor reached a
settlement whereby the lessor agreed to assign to the Company all interest in
and to any additional insurance proceeds to be received as a result of the
August 21, 1998 fire; transfer ownership of the additional cryogenic rubber
recycling equipment to the Company; and withdraw from all legal proceedings
against the Company. In return, the Company agreed to pay the lessor (1)
$1,700,000 of escrowed insurance proceeds; (2) execute a $1,100,000 sixty month
note payable, bearing interest at 7.75% with monthly payments of $7,500 and a
balloon payment due May 2004; (3) issue 250,000 shares of common stock (valued
at $190,000); (4) issue immediately exercisable warrants to purchase 450,000
shares of common stock (value ascribed at $100,000) for period of ten years at
$.81 per share and (4) pay all fees associated with the settlement agreement.
The Company has determined the total settlement to equal $3,255,000 resulting in
an additional casualty loss to be recorded at March 31, 1999 of $955,000. The
$1,100,000 note payable is personally guaranteed by four officers of the Company
and may be prepaid prior to December 31, 1999 at a $200,000 discount. The
Company has pledged the common stock of GMTSC as collateral to the four officers
for their personal guarantees. The Company has assigned a value of $200,000 to
the cryogenic rubber recycling equipment and is currently marketing the
equipment to potential purchasers.

14
<PAGE>

GreenMan Technologies, Inc.
Notes To Unaudited Condensed Consolidated Financial Statements
March 31, 1999

13. Common Stock Transactions

In October 1998, the Company commenced a private offering of common stock
in an effort to raise up to $500,000 in gross proceeds (the offering was
subsequently increased to $1,000,000 in March 1999). As of March 31, 1999, the
Company has sold shares of unregistered common stock to investors including
officers and directors of the Company (the "Investors") for approximately
$555,000 of net proceeds. In January 1999, the Company advanced $55,000 to two
officers of the Company under an 8.5% secured loan agreement with both principal
and interest due January 2002. The proceeds were used to participate in the
private placement and the loans are secured by 191,637 shares of the Company's
common stock owned by the officers. The Company granted the Investors piggy-back
registration rights to register the common stock. The Investors have agreed not
to sell or transfer the shares for a period of at least twelve months after
issuance.

In January 1999, the Company executed a two year investment banking and
corporate financing agreement with Schneider Securities Inc. ("Schneider"). In
exchange for services to be provided by Schneider, the Company agreed to pay
$25,000 per year, issue 50,000 shares of unregistered common stock which are
subject to an eighteen month lock-up agreement and issue (1) warrants to
purchase 150,000 shares of common stock exercisable commencing in January 2000
for period of five years at prices ranging from $1.00 to $1.50 per share and (2)
warrants to purchase 100,000 shares of common stock exercisable commencing in
January 2001 for period of five years at prices ranging from $2.00 to $2.50 per
share.

14. Market for Common Stock

On October 29, 1998, the Company received notice from the NASDAQ Stock
Market, Inc. ("NASDAQ") stating that the Company's common stock would be
delisted from NASDAQ if, in the ninety day period ended January 29, 1999, the
Company could not demonstrate compliance with NASDAQ's $1.00 minimum bid price
for ten consecutive trading days. As of January 29, 1999, the Company had not
regained full compliance with the minimum bid price requirement and requested an
oral appeal to NASDAQ's Listing and Hearing Review Committee. On March 26, 1999,
the Company also received notice from NASDAQ stating that the Company had
violated marketplace rules regarding shareholder approval in connection with the
September 1998 acquisition of the scrap tire collection and processing assets of
United Waste Service, Inc. ("United").

On April 9, 1999 the Company attended a hearing of the Listing and Hearing
Review Committee and requested an extension of time in order to comply with the
$1.00 minimum bid requirement. The Company also provided documentation
substantiating that the Company did not violate the NASDAQ marketplace rules in
regards to the United acquisition. The Company anticipates that delisting of the
Company's common stock will be stayed until the Hearing Committee notifies the
Company of their decision.

On April 12, 1999, the Company received notice from NASDAQ requesting
additional information to substantiate the Company's ability to sustain
compliance with continued listing requirements in light of the Company's going
concern opinion received at September 30, 1998.

There can be no assurance, however, that the Company will be able to
maintain NASDAQ listing for the Company's common stock (whether as a result of
failure to meet the minimum bid price requirement, the market value requirement
or other requirements imposed by NASDAQ). The Company's management anticipates
that the absence of the NASDAQ listing for the Company's common stock would have
a material adverse effect on the market for, and potentially the market price
of, the Company's common stock. If the Company's common stock is delisted from
NASDAQ, the Company expects that brokers would continue to make a market in the
company's common stock on the OTC Bulletin Board but there can be no assurance
that this will be the case.

15
<PAGE>

GreenMan Technologies, Inc.
Notes To Unaudited Condensed Consolidated Financial Statements
March 31, 1999

15. Segment Information

The Company's principal business is collecting, shredding and marketing of
scrap tires to be used as feedstock for tire derived fuel ("TDF"), civil
engineering projects and/or for further processing into crumb rubber. In March
1999, the Company decided to discontinue operations at it's industrial materials
subsidiary in order to eliminate continued operating losses and focus efforts on
the Company's core business of tire recycling.

16. Subsequent Events

Letter of Intent to sell DuraWear

On May 6, 1999, the Company signed a letter of intent to sell
substantially all the assets of DuraWear to a third party. The transaction is
subject to final due diligence by the buyer and approval of the proposed
transaction by DuraWear's bank. The Company will retain all land and buildings
subject to their existing mortgages and sell substantially all remaining assets
for $18,000 plus assumed liabilities. If, however, the sum of DuraWear's cash,
accounts receivables and polymer inventory does not exceed the liabilities
assumed by the buyer, then the Company is responsible for the shortfall. The
Company recorded a $920,000 estimated loss on disposal of DuraWear at March 31,
1999.

Crumb Rubber Modification Technology Agreement

In August 1998, the Company entered into a license agreement with a
privately-held company ("licensor") under which it acquired the exclusive rights
and license to use a series of four proprietary technologies (the
"technologies") to be developed for use in the asphalt industry. In connection
with this license the Company was required to pay $150,000 over a twelve month
period ($30,000 paid as of September 30, 1998 and $85,000 as of March 31, 1999)
and issue warrants to purchase 78,829 shares of common stock of the company at
$1.11 per share that are exercisable for a two year period as each of the four
technologies are conveyed to the Company (315,316 shares in total).

In April 1999, the Company and the licensor agreed to terminate the August
1998 license agreement. In return for payments made to date, the Company
received assignment of two developed technologies for crumb rubber modification.
The licensor also returned warrants to purchase 78,829 shares of the Company's
common stock which were previously issued pursuant to the August 1998 agreement.

16
<PAGE>

Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

The following information should be read in conjunction with the unaudited
condensed consolidated financial statements and the notes thereto included in
Item 1 of the Quarterly Report, and the audited consolidated financial
statements and notes thereto and Management's Discussion and Analysis of
Financial Condition and Results of Operations contained in the Company's Form
10-KSB/A-1 filed for the transition period ended September 30, 1998.

All share and per share data in this Form 10-QSB 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.

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

Overview

Until closure in January 1998, the Company also operated an injection
molding operation (the "Molding operation") located in Malvern, Arkansas. In
August 1998, the Company's Louisiana crumb rubber processing facility was
severely damaged by a fire which necessitated the closure of the operation. In
1999, the Company decided to discontinue operations at its wholly-owned
subsidiary, DuraWear Corporation ("DuraWear"). DuraWear manufactured, installed
and marketed a diverse range of abrasive resistant ceramic and polymer products.

In January 1998, the Company closed its Molding operations in order to
eliminate continued operating losses. The Molding operations were previously
engaged in providing injection molding manufacturing services to customer
specifications in the production of plastic and thermoplastic rubber parts.
Management believes that third party contract manufacturers could provide the
Company with equivalent injection molding capability at equal or less cost on an
as-needed basis should there be a necessity to meet market demands in the
future.

In June 1998, the Company signed a letter of intent to acquire all of the
capital stock of Mac's Tire Recyclers ("Mac's") a privately-held tire recycler
located in Saltillo, Mississippi. The Company operated the Mac's facility from
June 1, 1998 until April 16, 1999 under a management agreement (the "management
agreement"). The management agreement provides for the Company to earn a
management fee equal to 90% of the net income of Mac's before depreciation and
income taxes. The management agreement term expired on April 16, 1999.

17
<PAGE>

On September 4, 1998, the Company acquired all of the scrap tire
collection and processing assets of United Waste Service, Inc. ("United"), a
wholly owned subsidiary of Republic Services, Inc.. The two recycling operations
are located in Lawrenceville, Georgia and Batesburg, South Carolina. The
Lawrenceville operations were previously an operating division of GMTG but were
consolidated with ongoing Jackson, Georgia operations in February 1999. The
Batesburg operation has been incorporated as GreenMan Technologies of South
Carolina, Inc. ("GMTSC"). The Company completed the filing of Form 8-K for the
United acquisition in April 1999. As a result, the Company is ineligible to
register securities using SEC Form S-3 until April 2000.

In March 1999, the Company decided to discontinue operations at its
wholly-owned subsidiary, DuraWear Corporation ("DuraWear"). DuraWear
manufactured, installed and marketed a diverse range of high quality ceramic,
polymer composite, and alloy steel materials engineered to resist severe
abrasive and corrosive conditions typically encountered in bulk material
handling systems.

Results of Operations

Three Months ended March 31, 1999 Compared to the Three Months ended February
28, 1998

Net sales for the three months ended March 31, 1999 were $3,804,660 as
compared to $2,271,066 for the three months ended February 28, 1998. The
increase of $1,533,594 or 68% was primarily attributable to processing over 2.3
million more tires during the three months ended March 31, 1999 as a result of
significant internal growth and the September 1998 acquisition of the United
assets.

Gross profit for the three months ended March 31, 1999 was $830,011 or 22%
of net sales as compared to $499,008 or 22% of net sales for the three months
ended February 28, 1998. The lower than average gross profit during the second
quarter was attributable to the seasonality in the tire recycling industry as
scrap tire generation is lower during the winter months; a 40% reduction in
GMTSC production during the quarter due to equipment maintenance and the impact
of consolidating the Georgia based United assets into GMTG.

Research and development expenditures were $16,250 for the three months
ended March 31, 1999 as compared to $51,735 for the three months ended February
28, 1998. The decrease is due to the fact that during the prior period, the
Company expended a significant effort in the area of crumb rubber research and
development. The effort resulted in the June 1998 Federal Highway Administration
certification of the Company's crumb rubber modification technology for use in
the asphalt industry.

Selling, general and administrative expenses were $946,127 for the three
months ended March 31, 1999, or 25% of sales as compared to $793,862 or 35% of
sales, for the three months ended February 28, 1998.

As a result of the foregoing, the Company had an operating loss of
$132,366 for the three months ended March 31, 1999 as compared to an operating
loss of $346,589 for three months ended February 28, 1998.

Interest and financing costs for the three months ended March 31, 1999
decreased by $592,413 to $160,959 for the three months ended March 31, 1999 due
to decreased interest and amortization of the financing costs associated with
the issuance of convertible debentures. The Company recorded an additional
$955,000 casualty loss during the three months ended March 31, 1999 associated
with GMTL's August 1998 fire and the litigation that ensued therefrom.

The $990,901 loss from discontinued operations for the three months ended
March 31, 1999, includes a $90,701 loss from discontinued operations and a
$920,000 estimated loss on disposal of discontinued operations associated with
DuraWear, the Company's industrial materials subsidiary. The loss from
discontinued operations for the three months ended February 28, 1998 includes a
$216,384 loss from discontinued operations and a $1,100,000 loss on disposal of
discontinued operations associated with the closure of the Company's injection
molding operations in January 1998 and a $27,335 loss from discontinued
operations associated with DuraWear.

The Company experienced a net loss of $2,220,692, or $0.20 per share for
the three months ended March 31, 1999 as compared to a net loss of $2,442,589,
or $1.09 per share for the three months ended February 28, 1998.

18
<PAGE>

Results of Operations

Six Months ended March 31, 1999 Compared to the Six Months ended February 28,
1998

Net sales for the six months ended March 31, 1999 were $8,185,611 as
compared to $4,672,408 for the six months ended February 28, 1998. The increase
of $3,513,203 or 75% was attributable to processing over 4.5 million more tires
during the six months ended March 31, 1999 as a result of significant internal
growth and the September 1998 acquisition of the United assets.

Gross profit for the six months ended March 31, 1999 was $2,133,564 or 26%
of net sales as compared to $1,149,357 or 25% of net sales for the six months
ended February 28, 1998. The slight increase attributable to increased volume
was offset by a lower than average gross profit during the second quarter due to
the seasonality in the tire recycling industry as scrap tire generation is lower
during the winter months; a 40% reduction in GMTSC production during the quarter
due to equipment maintenance and the impact of consolidating the Georgia based
United assets into GMTG.

Research and development expenditures were $30,625 for the six months
ended March 31, 1999 as compared to $108,470 for the six months ended February
28, 1998. The decrease is due to the fact that during the prior period, the
Company expended a significant effort in the area of crumb rubber research and
development. The effort resulted in the June 1998 Federal Highway Administration
certification of the Company's crumb rubber modification technology for use in
the asphalt industry.

Selling, general and administrative expenses were $1,918,260 for the six
months ended March 31, 1999, or 23% of sales as compared to $1,546,383 or 33% of
sales, for the six months ended February 28, 1998.

As a result of the foregoing, the Company had an operating profit of
$184,679 for the six months ended March 31, 1999 as compared to an operating
loss of $505,496 for the six months ended February 28, 1998.

Interest and financing costs for the six months ended March 31, 1999
decreased by $740,128 to $584,975 for the six months ended March 31, 1999 due to
decreased interest and amortization of the financing costs associated with the
issuance of convertible debentures. The Company recorded an additional $955,000
casualty loss during the six months ended March 31, 1999 associated with GMTL's
August 1998 fire and the litigation that ensued therefrom.

The $1,101,285 loss from discontinued operations for the six months ended
March 31, 1999, includes a $181,285 loss from discontinued operations and a
$920,000 loss on disposal of discontinued operations associated with DuraWear,
the Company's industrial materials subsidiary. The loss from discontinued
operations for the six months ended February 28, 1998 includes a $513,920 loss
from discontinued operations and a $1,100,000 loss on disposal of discontinued
operations associated with the closure of the Company's injection molding
operations in January 1998 and an $18,037 profit from discontinued operations
associated with DuraWear.

The Company experienced a net loss of $2,441,505, or $0.25 per share for
the six months ended March 31, 1999 as compared to a net loss of $3,425,391, or
$1.97 per share for the six months ended February 28, 1998.

Liquidity and Capital Resources

Since its inception, the Company has satisfied its capital requirements
through the sale of common and preferred stock and debt securities to investors,
loans from affiliated and unaffiliated lenders, the acquisition of machinery and
equipment through capital leases and notes payable, and the issuance of common
stock and common stock options and warrants in lieu of cash for services
rendered.

On February 5, 1998, GMTM and GMTG collectively secured a $5.0 million
asset-based credit facility (the "Credit Facility") from Heller Financial Inc.
("Heller"). The Credit Facility consisted of : (i) $1,400,000 of three year term
notes secured by the real estate of GMTM and GMTG, payable in monthly principal
installments of $23,333 plus interest at prime plus 1.75% and a balloon payment
of $583,380 due in February 2001; (ii) $1,900,000 of three year term notes
secured by the machinery and equipment of GMTM and GMTG, payable in monthly
principal installments of $31,667, with interest at prime plus 1.75% and a
balloon payment of $791,620 due in February 2001 and (iii) a working capital
line of credit of up to $1,700,000 secured by the eligible accounts receivable,
as defined, of GMTM and GMTG. The line of credit bears interest at prime plus
1.5%.

19
<PAGE>

The Company used the proceeds from the Credit Facility, to repay the
balance of $3,906,071, including interest, due under the short-term note payable
to BFI for the purchase of GMTM and GMTG. The Company also incurred
approximately $322,000 of deferred loan costs associated with securing the
Credit Facility. These deferred charges are being amortized over the life of the
term notes.

On September 4, 1998, Heller provided GMTG an additional $850,000 term
note secured by the machinery and equipment of GMTG and payable in monthly
principal installments of $14,667, with interest at prime plus 1.75% and a
balloon payment of $439,324 due in February 2001. GMTG used the proceeds for the
United acquisition. In connection with the loan, Heller reduced the working
capital line of credit from $1,700,000 to $1,079,000.

In December 1997, 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 $3.13 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 the registration statement covering the shares issuable upon conversion
of the Debentures, 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 $3.13 per share to the placement agent. 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 to BFI towards the outstanding loan payable for the purchase of GMTM
and GMTG.

Pursuant to the Debenture Agreements, the Debenture Holders 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 the registration statement covering the shares issuable upon
conversion of the Debentures. Each tranche shall be for the purchase up to
$175,000 or greater if mutually agreed upon 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 borrow 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. . Subsequent to March 31, 1999, the Company
notified the Debenture Holders that it will not borrow the remaining $550,000 of
the commitment and will issue the additional warrants.

During June and August 1998, the Company issued Additional Debentures in
the aggregate principal amount of $450,000 and immediately exercisable two-year
warrants to purchase 27,000 shares of Common Stock at an exercise prices ranging
from $2.41 to $1.17 per share. The net proceeds from the Additional Debentures
were approximately $371,500 after deducting commissions and expenses of
approximately $78,500.

United Acquisition

20
<PAGE>

an operating division of GMTG) and Batesburg, South Carolina (incorporated as
GreenMan Technologies, of South Carolina, Inc. "GMTSC"). The acquisition has
been accounted for as a purchase and accordingly, the operations are included in
the consolidated financial statements since September 4, 1998. Goodwill was
recorded as the total consideration paid by the Company exceeded the fair value
of the net assets acquired by $2,015,000.

The Company completed the filing of Form 8-K for the United acquisition in
April 1999. As a result, of its delay in filing such Form 8-K, the Company is
ineligible to register securities using SEC Form S-3 until April 2000 and is
subject to certain penalties.

Private Offering of Common Stock

In October 1998, the Company commenced a private offering of common stock
in an effort to raise up to $500,000 in gross proceeds. The offering was
subsequently increased to $1,000,000 in March 1999. As of March 31, 1999, the
Company has sold shares of unregistered common stock to investors including
officers and directors of the Company (the "Investors") for approximately
$555,000 of net proceeds. In January 1999, the Company advanced $55,000 to two
officers of the Company under an 8.5% secured loan agreement with both principal
and interest due January 2002. The proceeds were used to participate in the
private placement and the loans are secured by 191,637 shares of the Company's
common stock owned by the officers. The Company granted the Investors piggy-back
registration rights to register the common stock. The Investors have agreed not
to sell or transfer the shares for a period of at least twelve months after
issuance

At March 31, 1999, the Company had cash of $355,632, a working capital
deficit of $2,904,006, net capital of $4,289,978 and accumulated losses of
$21,797,510. Approximately $290,000 of current liabilities will be settled
through the issuance of common stock and warrants to purchase common stock.

Based on the Company's operating plans management believes that the
available working capital together with revenues from operations, the sale of
common stock pursuant to the October 1998 private placement, the purchase of
equipment through lease financing arrangements and the remaining availability
under the Heller Credit Facility, should be sufficient to meet the Company's
cash requirements through fiscal 1999. Management has identified and is
currently evaluating several immediate financing alternatives which would
enhance the Company's position and is diligently working to determine the
feasibility of each alternative. No assurances can be given that such financing
will be concluded in the near future on favorable terms, if at all. If the
Company is unable to obtain additional financing, its ability to aggressively
grow the business could be materially and adversely affected and the Company may
be required to adjust its operating plans accordingly.

Factors Affecting Future Results

The Company's revenue and operating results may fluctuate from quarter to
quarter and from year to year due to a combination of factors, including (i) the
ability of the Company' common stock to remain listed on the NASDAQ Stock Market
(ii) the Company's ability to realize the remaining $950,000 amounts due under
the its property insurance policy in conjunction with the fire at GMTL; (iii)
the Company's ability to repay the $1,100,000 note due the cryogenic equipment
lessor and other amounts due the remaining creditors of GMTL and the Company's
closed injection molding operation; (iv) the Company's ability to conclude the
sale of substantially all of DuraWear's assets pursuant to the May 1999 letter
of intent; (v) the Company's ability to obtain additional financing at
acceptable terms to fund continued internal growth (vi) the impact of the
Company's ongoing merger and acquisition activities; and (vii) general economic
conditions. The Company's plans and objectives are based on assumptions that it
will be successful in receiving additional financing to fund future growth and
that there will be no material adverse change in the Company's operations or
business.

Assumptions relating to the foregoing involve judgments with respect to,
among other things, future economic, competitive and market conditions, all of
which are difficult or impossible to predict accurately and many of which are
beyond the control of the Company. As a result, there can be no assurance that
the Company will be able to achieve or sustain profitability on a quarterly or
annual basis. In light of the significant uncertainties inherent in the
Company's business, forward-looking statements made in this report should not be
regarded as a representation by the Company or any other person that the
objectives and plans of the Company will be achieved.

21
<PAGE>

Year 2000 Date Conversion

Many computer software systems, as well as certain hardware and equipment
utilizing date-sensitive information, were configured to use a two-digit date
field, which will preclude them from properly recognizing dates in the year
2000. The inability to properly recognize date-sensitive information in the year
2000 could render systems inoperable or cause them to incorrectly process
operational or financial information.

The Company has hired GraVoc Associates, Inc. to assess and replace its
office PC's which are not year 2000 compatible during calendar 1999. The Company
is in the process of obtaining written confirmation that software in year 2000
compatible. The amounts anticipated to be charged to expense related to the year
2000 computer compliance modifications, have not been and are not expected to be
material to the Company's financial position, results of operations or cash
flows.

In addition, machinery and equipment often use or are controlled or
monitored by electronic devices that contain embedded microchips. Such machinery
and equipment cold be rendered partially or totally inoperable if embedded
microchips are date-sensitive and do not properly recognize the year 2000.

The Company is taking steps to resolve year 2000 compliance issues that
may be created by customers, suppliers and financial institutions with whom the
Company does business. However, there can be no guarantee that the systems of
other entities will be converted timely.

The Company has initiated a process to (1) identify critical supplier and
customer related issues, (2) access the year 2000 readiness of equipment located
at all of its operating facilities and (3) determine what contingency plans may
be required. At this time, the potential effects in the event that the Company
or third parties are unable to resolve year 2000 problems timely are not
determinable, however, the Company believes it will be able to resolve its own
year 2000 issues.

22
<PAGE>

PART II - OTHER INFORMATION

Item 1 Legal Proceedings

In February 1999, MAC Funding Corporation ("MAC") commenced an
action in the United States District Court for the District of
Massachusetts against the Company. The claim alleged that MAC is
owed $315,000 (as of December 31, 1998) plus interest accruing
thereon, attorneys' fees, and costs all as provided in a promissory
note issued by the Company to MAC dated July 1, 1998. The Company
did not file a defense to the claim and was noted in default by the
court on April 29, 1999. The Company expects that a motion for
default judgment will be sought by MAC in due course, as it does not
believe it has any defense to the claim and will not oppose the
motion for default judgment except as to excessive amounts claimed,
if any, by MAC.

In November 1998, St. Francisville Industrial Park, Inc. ("SFIP")
commenced an action in the Twentieth Judicial District Court, Parish
of West Feliciana, State of Louisiana. The claim alleged that as a
result of the negligence of the Company or one of its affiliates, a
building which was being leased by GreenMan Technologies of
Louisiana, Inc., as successor in interest to a lease between SFIP
and Cryopolymers, Inc. burned and was damaged. SFIP is claiming
$275,000 for damage to the building, $230,500 for unpaid rent since
the date of the fire through to December 31, 1998. The Company has
not yet filed a defense to this claim, but intends to do so. The
Company believes that it has valid defenses to these claims and
intends to defend them vigorously.

In February 1999, Cryopolymers Leasing, Inc. ("CLI") commenced suit
against the Company, GMTL and Lexington Insurance Company seeking,
among other things, to set aside the December 31, 1998 agreement
concerning the cryogenic equipment lease, enforce the term of an
agreement by the Company to purchase or lease certain additional
cryogenic rubber recycling equipment and for damages. On May 14,
1999, the Company and CLI reached a settlement of this suit whereby
the lessor agreed to assign to the Company all interest in and to
any additional insurance proceeds to be received as a result of the
August 21, 1998 fire; transfer ownership of the additional cryogenic
rubber recycling equipment to the Company; and withdraw from all
legal proceedings against the Company. In return the Company agreed
to pay the lessor (1) $1,700,000 of escrowed insurance proceeds; (2)
execute a $1,100,000 sixty month note payable, bearing interest at
7.75% with monthly payments of $7,500 and a balloon payment due May
2004; (3) issue 250,000 shares of common stock (valued at $190,000);
(4) issue immediately exercisable warrants to purchase 450,000
shares of common stock (value ascribed at $100,000) for period of
ten years at $ .81 per share and (4) pay all fees associated with
the settlement agreement. The Company has determined the total
settlement to equal $3,255,000 resulting in an additional casualty
loss to be recorded at March 31, 1999 of $955,000. The $1,100,000
note payable is personally guaranteed by four officers of the
Company and may be prepaid prior to December 31, 1999 at a $200,000
discount. The Company has assigned a value of $200,000 to the
cryogenic rubber recycling equipment and is currently marketing the
equipment to potential purchasers.

Item 2 Changes in Securities

None

Item 3 Defaults Upon Senior Securities

None

Item 4 Submission of Matters to a Vote of Security Holders

The Company conducted a Special Meeting in lieu of an Annual Meeting
of Stockholders on March 31, 1999. The matters considered at the
meeting were (1) election of five members of the Board of Directors;
(2) approval of an amendment to the Company's Certificate of
Incorporation to increase the authorized number of shares of the
Company's Common Stock from 20,000,000 to 30,000,000; (3) approve an
increase in the shares of common stock authorized under the 1993
Stock Option Plan and (4) a proposal to ratify the selection of the
firm of Wolf & Company, P.C. as independent auditors for the fiscal
year ending September 30, 1999.

The results of each vote was as follows:
Broker
For * Against Abstain* Non Votes
--------- -------- -------- ----------
Vote 1 - Election of five (5)
members of the Board of Directors .. 5,683,871 -- 68,436 --
Vote 2 - Amendment to the
Certificate of Incorporation to
increase the authorized number of
shares of Common Stock to
30,000,000 ......................... 5,414,980 316,757 20,570 5,490,610
Vote 3 - Approve an increase to the
authorized shares under the 1993
Stock Option Plan .................. 5,383,004 324,746 44,557 --
Vote 4 - Proposal to ratify the
selection of Wolf & Company, P.C as
independent auditors for the fiscal
year ending September 30, 1999 ..... 5,707,161 21,280 23,866 --

* Information reported for Vote 1 reflects the voting results for four
directors. Shareholders abstained from voting an additional 634,735 shares for
one director who was successfully elected to the Board of Directors.

23
<PAGE>

Item 5 Other Information

None

Item 6 Exhibits and Reports on Form 8-K

(a) Exhibits
Exhibit 11 -- Statement regarding net loss per share.
Exhibit 10.81 -- Financial Consulting and Investment Banking
Agreement between the Company and Schneider
Securities dated January 22, 1999.

Exhibit 27 -- Financial Data Schedule.

(b) Reports on Form 8-K
A report on Form 8-K/A-1 was filed on April 8, 1999 describing the
Company's acquisition of the tire recycling assets of United Waste
Services.

24
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1934, the Registrant
certifies that it has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

By: GreenMan Technologies, Inc.

/s/ Robert H. Davis
-------------------

Robert H. Davis
Chief Executive Officer

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

/s/ Robert H. Davis Chief Executive Officer, President May 17, 1999
- ------------------- and Director
Robert H. Davis

/s/ Charles E. Coppa Acting Chief Financial Officer, Treasurer May 17, 1999
- -------------------- and Secretary
Charles E. Coppa

Exhibit 11

GreenMan Technologies, Inc.
Statement Regarding Net Loss per Share
March 31, 1999

<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
February 28, March 31, February 28, March 31,
1998 1999 1998 1999
------------- ------------- ------------- -------------

<S> <C> <C> <C> <C>
Loss from continuing operations ... $ (1,098,870) $ (1,229,791) $ (1,829,508) $ (1,340,220)

Loss from discontinued operations . $ (1,343,719) $ ( 990,901) $ (1,595,883) $ (1,101,285)
------------ ------------ ------------ ------------
Net loss .......................... $ (2,442,589) $ (2,220,692) $ (3,425,391) $ (2,441,505)
============ ============ ============ ============

Net loss per share:

Continuing operations ............. $ (0.49) $ (0.11) $ (1.05) $ (0.14)

Discontinued operations ........... $ (0.60) $ (0.09) $ (0.92) $ (0.11)

Net loss .......................... $ (1.09) $ (0.20) $ (1.97) $ (0.25)
------------ ------------ ------------ ------------

Weighted average shares outstanding 2,236,756 11,171,235 1,737,178 $ 9,788,142
============ ============ ============ ============
</TABLE>

Exhibit 10.81

FINANCIAL CONSULTING AND INVESTMENT BANKING AGREEMENT

THIS AGREEMENT is made as of this 22nd day of January, 1999 by and between
GREENMAN TECHNOLOGIES INC., a Delaware corporation having its principal office
at 7 Kimball Lane, Building A, Lynnfield, MA 01940 (the "Company"), and
SCHNEIDER SECURITIES, INC., a Colorado corporation having an office at 1120
Lincoln Street, Suite 900, Denver, Colorado 80203 ("SSI").

In consideration of the mutual premises contained herein and on the terms
and conditions hereinafter set forth, the Company and SSI agree as follows:

1. PROVISION OF SERVICES. The Company hereby retains SSI to perform
non-exclusive consulting services related to corporate finance and investment
banking matters, and SSI hereby accepts such retention and shall undertake all
reasonable efforts to perform for the Company the duties described herein. In
this regard, SSI shall devote such time and attention to the business of the
Company as shall be determined by SSI, in its sole discretion.

(a) SSI agrees, to the extent reasonably required in the conduct of the
business of the Company, and at the Company's written request to SSI's Senior
Vice President of Corporate Finance (or such other person designated by SSI), to
place at the disposal of the Company its judgment and experience and to provide
business development services to the Company including the following:

(i) advice with regard to stockholder relations and public relations
matters, and

(ii) evaluation of financial matters and assistance in financial
arrangements and investment banking and/or transactions.

(b) SSI agrees to prepare and disseminate, or cause the preparation and
dissemination of, a "Corporate Profile" and/or "Research Report" in compliance
with applicable state and federal securities laws, within ninety (90) days of
the date hereof. SSI shall cause such Research Report or Corporate Profile to be
updated, as warranted, in SSI's sole discretion.

(c) At SSI's request, the Company will provide "due diligence"
presentations to Registered Representatives of SSI and other brokerage firms.
SSI agrees to use reasonable efforts to arrange such meetings.

(d) SSI shall undertake at least one "road show" in Europe, the purpose of
which is to introduce the Company to potential institutional investors. The
timing of this "road show" shall be the sole discretion of SSI, but in no case
later than 15 months from the date of this Agreement. The Company shall make its
CEO and Chairman of the Board of Directors available for this "road show". SSI
shall pay for its expenses associated with this "road show" and the Company
shall be responsible for its expenses associated therewith.

1
<PAGE>

(e) SSI shall undertake, on a best efforts basis, financing activities
seeking to raise up to $2,000,000 in equity capital for the Company upon terms
and conditions to be determined mutually by SSI and the Company (the "Equity
Offering"). SSI's compensation for the Equity Offering will be determined at the
time of such financing; however, SSI's compensation for such equity financing
shall be limited to cash compensation in the form of an underwriting concession
in an amount to be negotiated, but in any event it shall not exceed 10% of the
total dollar amount raised by SSI.

(d) Notwithstanding the foregoing, SSI shall provide general services to
the Company in connection with mergers, acquisitions, consolidations, joint
ventures and similar corporate finance transactions; however, for each such
specific transaction or transactions, SSI and the Company will formalize their
arrangement in a separate agreement at the time specific service is provided.

(e) SSI shall use reasonable efforts in furnishing advice recommendations,
and for this purpose SSI shall at all times maintain or keep and make available
qualified personnel or a network of qualified outside professionals for the
performance of its obligations under this Agreement, at its sole expense. To the
extent reasonably practicable, SSI shall so use its own personnel rather than
outside professionals.

(f) The Company shall use reasonable efforts to invite a representative
appointed by SSI to attend and participate in at least one meeting of its Board
of Directors for every year that this Agreement is in effect. The Company shall
provide notice of such meetings to SSI at least two (2) weeks prior to the date
that the meeting is scheduled to occur. SSI will use its reasonable efforts to
attend any other meetings of the Company's Board of Directors to which the
Company requests SSI's attendance. Any expenses incurred by SSI in attending
such meetings shall be borne for by SSI.

2. TERM. Unless otherwise provided for in this Agreement, SSI's retention
hereunder shall be for a term of two (2) years commencing on the date of this
Agreement and expiring on the second anniversary date of this Agreement (the
"Termination Date"). Except as provided for in paragraph 8 below, SSI may not
terminate this Agreement without the written consent of the Company prior to the
Termination Date. In the event that the Company desires to terminate this
Agreement, without "cause", prior to the Termination Date, it shall provide SSI
with at least sixty (60) days prior written notice of its intention to terminate
this Agreement and this Agreement shall so terminate following the expiration of
this sixty (60) day period, without any further responsibility for either party;
provided, however, that SSI shall be entitled to receive all compensation and
un-reimbursed expenses, if any, outstanding as of the date of termination,
unless such termination is for "cause" as determined by a court of competent
jurisdiction, in which case, the Warrant (as defined below) shall terminate as
to any un-exercised portion thereof.

3. COMPENSATION. In consideration for the services provided by SSI hereunder,
the Company shall:

(a) pay to SSI the sum of $50,000 as follows: $25,000 payable upon the
execution of this Agreement and the remaining $25,000 payable on the first
anniversary date of this Agreement;

(b) issue to SSI 50,000 shares of the Company's common stock which shall
be unregistered and which shall be locked-up for a period of eighteen (18)
months following the date of this Agreement (the "Restricted Stock"), which
Restricted Stock shall be issued with the same privileges and rights as set
forth in paragraph 3(c) (ii), (iii) and (v) below; and

2
<PAGE>

(c) issue to SSI a warrant (the "Warrant") to purchase up to 250,000
shares of the common stock of the Company (the "Underlying Common Stock") on the
following terms: 100,000 shares at a per share price of $1.00 and an additional
50,000 shares at a per share price of $1.50 (the "First 150,000 Shares), and an
additional 50,000 shares at a per share price of $2.00, and an additional 50,000
shares at a per share price of $2.50 (the "Second 100,000 Shares"). The Warrant
shall be issued to SSI in the form of a warrant agreement (the "Warrant
Agreement") which shall be in form and content satisfactory to SSI. The Warrant
Agreement shall provide for, among other provisions, the following:

(i) that SSI may exercise the Warrant as to the First 150,000 Shares
at any time after the first Anniversary date of the Warrant Agreement and as to
the Second 100,000 Shares at any time after the second anniversary date of this
Agreement. The Warrant shall expire five (5) years from the date that the
Warrant Agreement is issued.

(ii) anti-dilution provisions for stock dividends, splits, mergers,
sale of substantially all of the Company's assets, except for sale of stock
pursuant to the Company's Stock Option Plan(s).

(iii) that, in lieu of any cash payment required by SSI in connection
with the exercise of the Warrant, the holder(s) of the Warrant shall have the
right at any time and from time to time, to exercise the Warrant in full or in
part by surrendering the Warrant Agreement and/or Certificates as payment of the
aggregated Strike Price. The number of shares of Underlying Common Stock to be
issued upon exercise shall be determined by multiplying the number of the shares
of common stock within the Warrant to be exercised by an amount equal to the
market price per share less the Strike Price, and then dividing the product
thereof by the market price per share. Solely for the purposes of this
paragraph, market price shall be calculated as the average of the market prices
for each of the five (5) trading days preceding the date notice is given that
the holder(s) intend(s) to exercise the Warrant.

(iv) that the Company shall reserve, and at all times have available,
a sufficient number of shares of its common stock to be issued upon the exercise
of the Warrant. Furthermore, the Company shall accept, and shall so instruct its
transfer agent to accept, a Rule 144 opinion letter from any attorney (not just
an opinion from the Company's counsel) representing SSI or any of its employees
or agents that are holders of the Warrant.

(v) that the Company shall, subject to the conditions listed below,
grant "piggy back" registration rights to include the shares of the Underlying
Common Stock in any registration statement (except for Form S-4 or S-8 filings,
or any equivalent thereto) filed by the Company under the Securities Act of 1933
relating to an underwriting of the sale of shares of common stock or other
security of the Company. In the event that the Company grants registration
rights to any other stockholder, which stockholder became a stockholder as a
result of the efforts of SSI), on terms and conditions that SSI deems to be more
favorable than those granted hereunder, except for any stockholder from the
Equity Offering, the Company shall grant the same rights to SSI. Furthermore, in
the event that the Company grants registration rights to any other stockholder,
the Company shall issue written notice thereof to SSI at least 10 business days
prior to the date that the Company files any such registration statement.

3
<PAGE>

4. REPRESENTATIONS AND WARRANTIES OF SSI. SSI represents and warrants that:

(a) it is a securities broker-dealer duly licensed and registered pursuant
to federal and state securities laws rules and regulations;

(b) it has the authority and ability to provide the services contemplated
in this Agreement; and

(c) it is a member in good standing with the NASD and is in good standing
with all states within which it is registered to conduct securities business.

5. INDEMNIFICATION. The Company agree to indemnify and hold harmless SSI and its
affiliates, the respective directors, officers, partners, agents and employees
and each other person, if any, controlling SSI or any of its affiliates
(collectively the "SSI Parties") from all losses, claims, damages, liabilities
and expenses incurred by them (including attorney's fees and disbursements) that
result from any violations of securities laws or rules or any untrue statements
made or any statements omitted to be made in connection with securities related
matters by the Company, its agents or employees. SSI will indemnify and hold
harmless the Company and the respective directors, officers, agents and
employees of the Company (the "Company Parties") from and against all losses,
claims, damages, liabilities and expenses that result from malfeasance, or gross
negligence in the performance of SSI's duties hereunder. Each person or entity
seeking indemnification hereunder shall promptly notify the Company, or SSI as
applicable, of any loss, claim, damage or expense for which the Company or SSI
as applicable, may become liable pursuant to this Section 5. Neither party shall
pay, settle or acknowledge liability under any such claim without the written
consent of the party liable for indemnification, and shall permit the Company or
SSI as applicable a reasonable opportunity to cure any underlying problem or to
mitigate damages. The scope of this indemnification between SSI and the Company
shall be limited to, and pertain only to certain transactions contemplated or
entered into pursuant only to this Agreement.

The Company or SSI, as applicable, shall have the opportunity to defend any
claim for which it may be liable hereunder, provided it notifies the party
claiming the right to indemnification within fifteen (I5) days of notice of the
claim.

6. STATUS OF SSI. SSI shall at all times be an independent contractor of the
Company and, except as expressly provided or authorized in this Agreement, shall
have no authority to act for or represent the Company or bind it to any
agreements.

7. OTHER ACTIVITIES OF SSI. The Company recognizes that SSI now renders and may
continue to render financial consulting, management, investment banking and
other services to other companies that may or may not conduct business and
activities similar to those of the Company. SSI shall be free to render such
advice and other services and the Company hereby consents thereto. SSI shall
not be required to devote its full time and attention to the performance of
its duties under this Agreement, but shall devote only so much of its time
and attention as it deems reasonable or necessary for such purposes, in its
sole discretion.

4
<PAGE>

8. COVENANTS OF THE COMPANY. The Company covenants, promises and agrees that:

(a)during the term of this Agreement, the Company shall provide SSI at
least thirty (30) days prior written notice of the proposed sale of any
securities of the Company in a "Regulation S" or "Regulation D" offering. Such
notice shall specify the type of securities to be offered, the purchase price
thereof, the terms and conditions of the offering and the proposed offering
date. SSI shall be entitled to immediately terminate this Agreement and retain
all of the compensation set forth herein without offset and with no further
liability to the Company, in the event that, during the term of this Agreement,
the Company completes a sale of its securities pursuant to a Regulation D or S
offering, without SSI's prior written consent thereto.

(b) it shall immediately notify SSI in the event that it is de-listed from
the NASDAQ Small Cap Market.

(c) during the term of this Agreement, the Company shall furnish SSI with
copies of its annual, quarterly and proxy filings with the SEC, immediately upon
the Company's filing thereof.

9. CONTROL. Nothing contained herein shall be deemed to require the Company to
take any action contrary to its Certificate of Incorporation or By-Laws, or any
applicable statute or regulation, or to deprive its Board of Directors of their
responsibility for any control of the affairs of the Company.

10. PUBLIC DISCLOSURE REQUIREMENT. Within thirty (30) business days of the final
execution of this Agreement, the Company shall cause the release of a public
announcement which sets forth, in pertinent part, a description of this
Agreement, including without limitation, the name of SSI, the nature of the
services to be provided hereunder by SSI and the compensation paid to it in
connection herewith. At least three (3) business days prior to the dissemination
of any such public announcement or filing containing the above required
description, the Company shall submit to SSI, for its review and comment, the
proposed public announcement or description. SSI shall thereafter have three (3)
business days within which to submit its editions or amendments to the public
announcement and/or description for inclusion therein, which editions and
amendments shall be incorporated in the final version disseminated by the
Company, unless, in the reasonable judgment of counsel to the Company, such
editions or amendments cannot be incorporated.

11. NOTICES. Any notices hereunder shall be sent to the Company and SSI at their
respective addresses above set forth. Any notice shall be given by registered or
certified mail, postage prepaid, and shall be deemed to have been given when
deposited in the United States mail. Either party may designate any other
address to which notice shall be given, by giving written notice to the other of
such change of address in the manner herein provided.

12. ENTIRE AGREEMENT. This Agreement contains the entire agreement and
understanding between the parties with respect to its subject matter and
supersedes all prior discussion, agreements and understandings between them with
respect thereto. This Agreement may not be modified except in a writing signed
by the parties.

5
<PAGE>

13. JURISDICTION AND VENUE. This Agreement has been made in the State of
Colorado and shall be governed by and construed in accordance with the laws
thereof without regard to principles of conflict of laws. Any proceeding
commenced by SSI to enforce or interpret any provision of this Agreement may be
brought in the City and County of Denver, Colorado. The Company hereby submits
to the jurisdiction of the courts of the State of Colorado, including the
federal courts, for such purposes.

14. NO ASSIGNMENT. Neither this Agreement nor the rights of either party
hereunder shall be assigned by either party without the prior written consent of
the other party.

15. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

16. NON-COMPLIANCE. If any provision of this Agreement conflicts with any law,
rule or regulation of any federal, state or self-regulatory organization,
including the Securities and Exchange Commission, the blue-sky laws of any
state, the National Association of Securities Dealers, Inc., or any other
governmental authority having jurisdiction over the activities or services
described herein, then in that event, the Company and SSI shall amend this
Agreement to bring any affected provision into compliance with such regulations.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed the day and year first above written.

SCHNEIDER SECURITIES, INC. GREENMAN TECHNOLOGIES INC.

- ---------------------------- ----------------------------
By: By:
Its: Its:

<ARTICLE> 5
<LEGEND>
Exhibit 27

GreenMan Technologies, Inc.
Form 10-QSB
March 31, 1999

Financial Data Schedule
</LEGEND>

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> MAR-31-1999
<CASH> 355,632
<SECURITIES> 0
<RECEIVABLES> 2,307,364
<ALLOWANCES> 60,600
<INVENTORY> 41,826
<CURRENT-ASSETS> 5,315,729
<PP&E> 10,545,999
<DEPRECIATION> 1,555,229
<TOTAL-ASSETS> 16,913,615
<CURRENT-LIABILITIES> 8,219,735
<BONDS> 3,303,902
0
3,200,000
<COMMON> 114,960
<OTHER-SE> 22,772,528
<TOTAL-LIABILITY-AND-EQUITY> 16,968,615
<SALES> 8,185,611
<TOTAL-REVENUES> 8,185,611
<CGS> 6,052,047
<TOTAL-COSTS> 1,948,885
<OTHER-EXPENSES> (15,076)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (584,975)
<INCOME-PRETAX> (1,340,220)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,340,220)
<DISCONTINUED> (1,101,285)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,441,505)
<EPS-PRIMARY> (0.25)
<EPS-DILUTED> (0.25)

</TABLE>