x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Delaware
|
71-0724248
|
|
(State
or other jurisdiction of
incorporation or organization) |
(I.R.S. Employer Identification No.)
|
|
205
South Garfield, Carlisle, Iowa
|
50047
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
|
(781)
224-2411
|
(Registrant’s
telephone number, including area code)
|
205
South Garfield, Carlisle Iowa 50047
|
(Former
name, former address and former fiscal year, if changed since last
report)
|
q Large
Accelerated Filer
|
q Accelerated
Filer
|
|
q Non-accelerated
Filer
|
x Smaller
reporting company
|
Page
|
||
PART
I.
|
FINANCIAL
INFORMATION
|
|
Item
1.
|
Consolidated
Financial Statements (unaudited)
|
|
Consolidated
Balance Sheets at March 31, 2009 (unaudited) and September 30,
2008
|
3
|
|
Consolidated
Statements of Operations for the three and six months ended March 31, 2009
and 2008 (unaudited)
|
4
|
|
Consolidated
Statement of Changes in Stockholders’ Equity (deficit) for the six months
ended March 31, 2009 (unaudited)
|
5
|
|
Consolidated
Statements of Cash Flows for the six months ended March 31, 2009 and 2008
(unaudited)
|
6
|
|
Notes
to Condensed Consolidated Financial Statements
|
7-13
|
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
14-17
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
17
|
Item
4T.
|
Controls
and Procedures
|
17
|
PART
II.
|
OTHER
INFORMATION
|
|
Item
1.
|
Legal
Proceedings
|
17
|
Item
1A.
|
Risk
Factors
|
17
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
17
|
Item
3.
|
Defaults
Upon Senior Securities
|
18
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
18
|
Item
5.
|
Other
Information
|
18
|
Item
6.
|
Exhibits
|
18
|
Signatures
|
19
|
March
31,
2009
|
September 30,
2008
|
|||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
|
$ | 5,528,228 | $ | 210,080 | ||||
Marketable
investments
|
2,846,933 | -- | ||||||
Accounts
receivable, trade, less allowance for doubtful accounts of $0 and $96,338
as of March 31, 2009 and September 30, 2008
|
109,882 | 1,135,015 | ||||||
Inventory
|
1,252,073 | 1,323,748 | ||||||
Other
current assets
|
1,175,601 | 291,371 | ||||||
Assets
related to discontinued operations
|
-- | 10,145,282 | ||||||
Total
current assets
|
10,912,717 | 13,105,496 | ||||||
Property,
plant and equipment, net
|
557,001 | 551,683 | ||||||
Other
assets:
|
||||||||
Goodwill
|
2,289,939 | 2,289,939 | ||||||
Long
term contracts, net
|
464,625 | 554,250 | ||||||
Patents,
net
|
97,500 | 113,433 | ||||||
Other
|
413,868 | 425,908 | ||||||
Assets
related to discontinued operations
|
-- | 6,566,780 | ||||||
Total
other assets
|
3,265,932 | 9,950,310 | ||||||
$ | 14,735,650 | $ | 23,607,489 | |||||
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIT)
|
||||||||
Current
liabilities:
|
||||||||
Notes
payable, current
|
$ | 210,274 | $ | 506,678 | ||||
Accounts
payable
|
295,838 | 782,494 | ||||||
Accrued
expenses, other
|
976,057 | 1,176,408 | ||||||
Obligations
due under lease settlement, current
|
68,518 | 68,518 | ||||||
Notes
payable, related parties, current
|
-- | 534,320 | ||||||
Liabilities
related to discontinued operations
|
100,000 | 16,140,322 | ||||||
Total
current liabilities
|
1,650,687 | 19,208,740 | ||||||
Notes
payable, non-current
|
477,648 | 482,881 | ||||||
Obligations
due under lease settlement, non-current
|
555,540 | 580,540 | ||||||
Liabilities
related to discontinued operations
|
-- | 3,397,258 | ||||||
Total
liabilities
|
2,683,875 | 23,669,419 | ||||||
Stockholders'
deficit:
|
||||||||
Preferred
stock, $1.00 par value, 1,000,000 shares authorized, none
outstanding
|
-- | -- | ||||||
Common
stock, $.01 par value, 60,000,000 shares authorized, 30,880,435 shares
issued and outstanding at March 31, 2009 and
September 30, 2008
|
308,804 | 308,804 | ||||||
Additional
paid-in capital
|
38,250,536 | 38,881,669 | ||||||
Accumulated
deficit
|
(26,481,367 | ) | (39,252,403 | ) | ||||
Accumulated
other comprehensive loss
|
(26,198 | ) | -- | |||||
Total
stockholders’ equity (deficit)
|
12,051,775 | (61,930 | ) | |||||
$ | 14,735,650 | $ | 23,607,489 |
Three
Months Ended
March
31,
|
Six
Months Ended
March
31,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Net
sales
|
$ | 97,510 | $ | 607,872 | $ | 759,515 | $ | 1,207,486 | ||||||||
Cost
of sales
|
208,955 | 382,071 | 702,115 | 869,511 | ||||||||||||
Gross
profit
|
(111,445 | ) | 225,801 | 57,400 | 337,975 | |||||||||||
Operating
expenses:
|
||||||||||||||||
Selling,
general and administrative
|
724,516 | 830,589 | 1,902,118 | 1,568,501 | ||||||||||||
Operating
(loss) from continuing operations
|
(835,961 | ) | (604,788 | ) | (1,844,718 | ) | (1,230,526 | ) | ||||||||
Other
income (expense):
|
||||||||||||||||
Interest
and financing costs
|
(13,346 | ) | (26,025 | ) | (72,401 | ) | (71,456 | |||||||||
Other,
net
|
32,722 | (30,460 | ) | 23,461 | (49,674 | |||||||||||
Other
(expense), net
|
19,376 | (56,485 | ) | (48,940 | ) | (121,130 | ) | |||||||||
Loss
from continuing operations before income taxes
|
(816,585 | ) | (661,273 | ) | (1,893,658 | ) | (1,351,656 | ) | ||||||||
Provision
(benefit) for income taxes
|
-- | (62 | ) | 456 | -- | |||||||||||
Loss
from continuing operations
|
(816,585 | ) | (661,211 | ) | (1,894,114 | ) | (1,351,656 | ) | ||||||||
Discontinued
operations:
|
||||||||||||||||
Gain
on sale of discontinued operations, net of taxes,
|
-- | 14,347,445 | ||||||||||||||
(Loss)
income from discontinued operations, net of taxes
|
(100,000 | ) | (218,480 | ) | 317,705 | 489,869 | ||||||||||
(100,000 | ) | (218,480 | ) | 14,665,150 | 489,869 | |||||||||||
Net
income (loss)
|
$ | (916,585 | ) | $ | (879,691 | ) | $ | 12,771,036 | $ | (861,787 | ) | |||||
(Loss)
from continuing operations per share –basic
|
$ | (0.03 | ) | $ | (0.03 | ) | $ | (0.06 | ) | $ | (0.04 | ) | ||||
Income
from discontinued operations per share –basic
|
-- | -- | 0.47 | 0.01 | ||||||||||||
Net
(loss) income per share –basic
|
$ | (0.03 | ) | $ | (0.03 | ) | $ | 0.41 | $ | (0.03 | ) | |||||
Net
(loss) income per share –diluted
|
$ | (0.03 | ) | $ | (0.03 | ) | $ | 0.41 | $ | (0.03 | ) | |||||
Weighted
average shares outstanding -basic
|
30,880,435 | 30,880,435 | 30,880,435 | 30,880,435 | ||||||||||||
Weighted
average shares outstanding -diluted
|
30,880,435 | 30,880,435 | 30,880,435 | 30,880,435 |
Accumulated
|
||||||||||||||||||||||||
Additional
|
Other
|
|||||||||||||||||||||||
Common
Stock
|
Paid
In
|
Accumulated
|
Comprehensive
|
|||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Deficit
|
Loss
|
Total
|
|||||||||||||||||||
Balance,
September 30, 2008
|
30,880,435 | $ | 308,804 | $ | 38,881,669 | $ | (39,252,403 | ) | $ | -- | $ | (61,930 | ) | |||||||||||
Repurchase
of warrants
|
-- | -- | (700,000 | ) | -- | -- | (700,000 | ) | ||||||||||||||||
Compensation
expense associated with stock options
|
-- | -- | 61,731 | -- | -- | 61,731 | ||||||||||||||||||
Value
of warrants issued for services rendered
|
-- | -- | 7,136 | -- | -- | 7,136 | ||||||||||||||||||
Unrealized
loss on marketable investments
|
(26,198 | ) | (26,198 | ) | ||||||||||||||||||||
Net
income for six months ended March 31, 2009
|
-- | -- | -- | 12,771,036 | -- | 12,771,036 | ||||||||||||||||||
Balance,
March 31, 2009
|
30,880,435 | $ | 308,804 | $ | 38,250,536 | $ | (26,481,367 | ) | $ | (26,198 | ) | $ | 12,051,775 |
Six
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
income (loss)
|
$ | 12,771,036 | $ | (861,787 | ) | |||
Adjustments
to reconcile net income (loss) to net cash used in operating
activities:
|
||||||||
Gain
on sale of tire recycling operations
|
(19,847,445 | ) | -- | |||||
Net
settlement income from discontinued operations
|
(144,420 | ) | -- | |||||
Deferred
income tax application
|
5,300,000 | -- | ||||||
Gain
on lease termination
|
(124,628 | ) | -- | |||||
Gain
on disposal of property, plant and equipment
|
-- | (7,703 | ) | |||||
Depreciation
|
224,368 | 701,884 | ||||||
Amortization
of deferred interest expense
|
359,927 | 259,852 | ||||||
Amortization
of customer relationships
|
890 | 3,475 | ||||||
Amortization
of stock option compensation expense
|
61,731 | 75,564 | ||||||
Amortization
of patents
|
15,933 | 10,834 | ||||||
Amortization
of long term contracts
|
89,625 | 89,625 | ||||||
Amortization
of deferred gain on sale leaseback transaction
|
(270,228 | ) | (18,293 | ) | ||||
Net
value of warrants issued
|
7,136 | 9,008 | ||||||
Decrease
(increase) in assets:
|
||||||||
Accounts
receivable
|
851,281 | 1,085,205 | ||||||
Product
inventory
|
7,401 | (1,194,726 | ) | |||||
Other
current assets
|
(811,606 | ) | (135,714 | ) | ||||
Other
assets
|
102,739 | (24,687 | ) | |||||
Increase
(decrease) in liabilities:
|
||||||||
Accounts
payable
|
(421,985 | ) | (164,883 | ) | ||||
Accrued
expenses and other
|
(512,670 | ) | (74,602 | ) | ||||
Net
cash used in operating activities
|
(2,340,915 | ) | (246,948 | ) | ||||
Cash
flows from investing activities:
|
||||||||
Purchase
of property and equipment
|
(99,527 | ) | (933,649 | ) | ||||
Purchase
of marketable investments
|
(2,873,131 | ) | -- | |||||
Purchase
of warrants
|
(700,000 | ) | -- | |||||
Cash
acquired upon purchase of business, net of transaction
costs
|
-- | 68,571 | ||||||
Proceeds
from the sale of tire recycling operations
|
27,546,652 | 2,000 | ||||||
Net
cash provided by (used in) investing activities
|
23,873,994 | (863,078 | ) | |||||
Cash
flows from financing activities:
|
||||||||
Net
activity under line of credit
|
(3,300,221 | ) | 2,354,652 | |||||
Proceeds
from notes payable
|
-- | 501,128 | ||||||
Repayment
of notes payable
|
(11,768,101 | ) | (1,418,896 | ) | ||||
Repayment
of notes payable, related party
|
(534,320 | ) | -- | |||||
Principal
payments on obligations under capital leases
|
(1,188,625 | ) | (116,274 | ) | ||||
Net
cash (used in) provided by financing activities
|
(16,791,267 | ) | 1,320,610 | |||||
Net
increase in cash
|
4,741,812 | 215.584 | ||||||
Cash
and cash equivalents at beginning of period
|
786,416 | 376,764 | ||||||
Cash
and cash equivalents at end of period
|
$ | 5,528,228 | $ | 587,348 | ||||
Supplemental
cash flow information:
|
||||||||
Machinery
and equipment acquired under capital leases
|
$ | -- | $ | 413,954 | ||||
Unrealized
loss on marketable investments
|
26,198 | -- | ||||||
Shares
issued in acquisition
|
-- | 2,800,000 | ||||||
Interest
paid
|
470,013 | 688,654 | ||||||
Taxes
paid
|
12,865 | 79,939 |
1.
|
Business
|
2.
|
Basis
of Presentation
|
3.
|
Marketable
Investments
|
|
·
|
Level
1 – Quoted prices in active markets for identical assets or
liabilities
|
|
·
|
Level
2 – Inputs other than Level 1 that are observable, either directly or
indirectly, such as quoted prices for similar assets or liabilities;
quoted prices in markets that are not active; or other inputs that are
observable or can be corroborated by observable market data for
substantially the full term of the assets or
liabilities.
|
|
·
|
Level
3 – Unobservable inputs that are supported by little or no market activity
and that are significant to the fair value of the assets or
liabilities.
|
Description:
|
Level
1
|
Marketable
investments
|
$
2,846,933
|
4.
|
Net
Income Per Share
|
5.
|
Acquisition
of Subsidiary
|
Total
identifiable assets acquired
|
$
2,571,000
|
Total
identifiable liabilities acquired
|
$
2,821,000
|
Twelve months ending March
31:
|
Contracts
|
Patents
|
Total
|
|||||||||
2010
|
$ | 179,250 | $ | 21,667 | $ | 200,917 | ||||||
2011
|
179,250 | 21,667 | 200,917 | |||||||||
2012
|
98,625 | 21,667 | 120,292 | |||||||||
2013
|
7,500 | 21,667 | 29,167 | |||||||||
2014
and thereafter
|
-- | 10,832 | 10,832 | |||||||||
$ | 464,625 | $ | 97,500 | $ | 562,125 |
5.
|
Acquisition
of Subsidiary – (Continued)
|
6.
|
Discontinued
Operations
|
March
31,
2009
|
September 30,
2008
|
|||||||
Liabilities
related to discontinued operations:
|
||||||||
Accounts
payable
|
$ | -- | $ | 116,664 | ||||
Accrued
expenses, other
|
100,000 | 163,147 | ||||||
Total
liabilities related to discontinued operations
|
$ | 100,000 | $ | 279,811 |
6.
|
Discontinued Operations –
(Continued)
|
March
31,
2009
|
September 30,
2008
|
|||||||
Assets
related to discontinued operations:
|
||||||||
Cash
|
$ | -- | $ | 576,336 | ||||
Accounts
receivable, net
|
-- | 3,019,978 | ||||||
Deferred
income tax asset
|
-- | 5,300,000 | ||||||
Other
current assets
|
-- | 1,248,968 | ||||||
Total
current assets related to discontinued operations
|
-- | 10,145,282 | ||||||
Property,
plant and equipment (net)
|
-- | 6,399,172 | ||||||
Other
|
-- | 167,608 | ||||||
Total
other assets related to discontinued operations
|
-- | 6,566,780 | ||||||
Total
assets related to discontinued operations
|
$ | -- | $ | 16,712,062 | ||||
Liabilities
related to discontinued operations:
|
||||||||
Accounts
payable
|
$ | -- | $ | 1,649,530 | ||||
Notes
payable, current
|
-- | 9,566,387 | ||||||
Notes
payable, line of credit
|
-- | 3,300,221 | ||||||
Accrued
expenses, other
|
-- | 962,005 | ||||||
Capital
leases, current
|
-- | 382,368 | ||||||
Total
current liabilities related to discontinued operations
|
-- | 15,860,511 | ||||||
Notes
payable, non-current
|
-- | 1,540,150 | ||||||
Capital
leases, non-current
|
-- | 1,623,325 | ||||||
Deferred
gain on sale leaseback transaction, non-current
|
-- | 233,783 | ||||||
Total
non-current liabilities related to discontinued operations
|
-- | 3,397,258 | ||||||
Total
liabilities related to discontinued operations
|
$ | -- | $ | 19,257,769 |
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
March
31,
|
March
31,
|
March
31,
|
March
31,
|
|||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Net
sales from discontinued operations
|
$ | -- | $ | 3,549,175 | $ | -- | $ | 8,777,968 | ||||||||
Income
(loss) from discontinued operations
|
-- | (218,480 | ) | 14,620,730 | 489,869 |
7.
|
Inventory
|
March
31,
2009
|
September 30,
2008
|
|||||||
Raw
materials
|
$ | 85,736 | $ | 118,530 | ||||
Finished
goods
|
1,166,337 | 1,205,218 | ||||||
Total
inventory
|
$ | 1,252,073 | $ | 1,323,748 |
8.
|
Property,
Plant and Equipment
|
March
31,
2009
|
September 30,
2008
|
Estimated
Useful Lives
|
|||||||||
Land
|
$ | 175,000 | $ | 175,000 |
--
|
||||||
Buildings
and improvements
|
285,000 | 285,000 |
15
years
|
||||||||
Machinery
and equipment
|
1,357,590 | 1,344,377 |
5
- 7 years
|
||||||||
Furniture
and fixtures
|
59,954 | 65,842 |
3
- 7 years
|
||||||||
Motor
vehicles
|
31,169 | 5,760 |
3
- 5 years
|
||||||||
1,908,713 | 1,875,979 | ||||||||||
Less
accumulated depreciation
|
(1,351,712 | ) | (1,324,296 | ) | |||||||
Property,
plant and equipment, net
|
$ | 557,001 | $ | 551,683 |
9.
|
Notes
Payable/Credit Facilities
|
10.
|
Litigation
|
11.
|
Stockholders’
Equity
|
12.
|
Income
Taxes
|
13.
|
Related
Party Transactions
|
Exhibit
No.
|
Description
|
||
10.2
*
|
--
|
Warrant and option purchase
agreement between GreenMan Technologies, Inc., a Delaware
corporation and PSource Structured Debt Ltd., dated March 24,
2009.
|
|
31.1
*
|
--
|
Certification
of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule
15d-14(a)
|
|
31.2
*
|
--
|
Certification
of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule
15d-14(a)
|
|
32.1
*
|
--
|
Certification
of Chief Executive Officer under 18 U.S.C. Section 1350
|
|
32.2
*
|
--
|
Certification
of Chief Financial Officer under 18 U.S.C. Section 1350
|
*
|
Filed
herewith.
|