SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 1, 2007
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GREENMAN TECHNOLOGIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-13776 71-0724248
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
12498 Wyoming Ave So.
Savage, MN 55378
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(Address of principal executive offices, including zip code)
(781) 224-2411
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(Registrant's telephone number, including area code)
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act
Item 1.01. Entry Into a Definitive Material Agreement
On October 1, 2007, the Registrant entered into a definitive Share
Exchange Agreement (the "Exchange Agreement") with Welch Products, Inc., an Iowa
corporation ("Welch Products"), and its stockholders (the "Stockholders").
Pursuant to the Exchange Agreement, the Registrant acquired all of the
outstanding capital stock of Welch Products from the Stockholders in exchange
for the issuance by the Registrant of 8,000,000 shares of its common stock, $.01
par value per share (the "Shares").
The Exchange Agreement contains customary representations, warranties and
covenants. The parties have placed 10% of the Shares in escrow for one year as
security for any indemnification claims by the Registrant under the Exchange
Agreement. In the absence of fraud on the part of Welch Products or the
Stockholders, the escrowed Shares are the sole source from which the Registrant
may recover for claims for breaches of representations, warranties or covenants.
Any Shares released to the Registrant from escrow would be credited against the
amount of the indemnified claim at the rate of $0.32 per Share, irrespective of
the fair market value of Registrant's common stock at the time claim is made or
resolved.
The Exchange Agreement provides that the Registrant will file, as soon as
practicable, a registration statement with the Securities and Exchange
Commission to permit the resale of the Shares by the Stockholders. The
Registrant is obligated to use its commercially reasonable efforts to cause the
registration statement to be declared effective as promptly as possible after
the filing thereof. Notwithstanding such registration:
(a) each Stockholder has agreed, with certain exceptions, that for a
period of one year after the registration statement has been
declared effective, such Stockholder will not sell or otherwise
dispose of the Shares at a price of less than $0.28 per Share
(giving effect to equitable adjustments for any stock split, stock
dividend, combination of shares or the like affecting the Shares);
and
(b) certain Stockholders have agreed, with certain exceptions, that (i)
prior to March 29, 2008, such Stockholders will not sell or
otherwise dispose of any Shares, and (ii) for a period of one year
after such registration statement has been declared effective, such
Stockholders will not, on any trading day, sell or otherwise dispose
of any number of Shares which is in excess of 10% of the aggregate
number of shares of the Registrant's common stock traded on such
trading day.
These restrictions may be waived by the Registrant's chief executive officer
with respect to certain privately negotiated transfers of Shares.
In connection with the acquisition, the Registrant entered into consulting
agreements (the "Consulting Agreements") with Bruce A. Boland ("Boland") and
John W. Brown ("Brown" and, together with Boland, the "Consultants"), who served
as the President and the Chief Financial Officer, respectively, of Welch
Products prior to the completion of the acquisition. In exchange for the
Consultants' consulting services, the Registrant will pay Boland and Brown at
the monthly rates of $6,300 and $4,600, respectively. The Consultants have
agreed to defer receipt of all but $1,000 of each monthly payment, commencing
with the November 30, 2007 payments and ending with the April 30, 2008 payments,
with all deferred amounts payable on May 31, 2008. Thereafter the Registrant
will pay the Consultants on a current basis during the remaining term of the
respective Consulting Agreements. The Consulting Agreements each have terms
expiring on March 31, 2011, subject to their earlier termination. If, however,
the Registrant terminates either Consulting Agreement other than for breach or
for "cause" (as defined in the Consulting Agreements), the Registrant will be
obligated to pay the affected Consultant all consulting fees that would
otherwise have been due through March 31, 2011.
The Consulting Agreements also provide that, if either Consultant
introduces the Registrant to an investment group, person or entity that provides
any financing on terms approved by the Registrant's Board of Directors, the
Registrant will pay such Consultant a fee of 3.5% of the gross proceeds of such
financing, provided that the total fees associated with such financing may not
exceed 15% of such gross proceeds. Further, if any such financing funding is
sufficient (a) to repay 100% of the then outstanding indebtedness of the
Registrant to the Registrant's principal secured lender, Laurus Master Fund,
Ltd. (together with its affiliates and assigns, "Laurus") and (b) to repurchase
all outstanding common stock warrants previously granted by the Registrant to
Laurus, the Registrant will also issue to such Consultant a warrant to purchase
250,000 shares of its common stock. Any such warrant or warrants (i) would be
exercisable at a price equal to the closing bid price of the Registrant's common
stock on the date such financing is closed, (ii) would be exercisable
immediately upon issuance, and (iii) would have a term of three years from the
date of issuance.
In connection with the acquisition, the Registrant, Welch Products and the
Stockholders entered into an agreement with Laurus pursuant to which Laurus has
agreed (i) to provide the Stockholders with notice prior to taking any action to
cause either (x) the Registrant to sell or otherwise liquidate the capital stock
of Welch Products or (y) Welch Products to sell or otherwise liquidate all or
substantially all of its assets, and (ii) if the Stockholders desire to
re-acquire all (but not less than all) of such capital stock or assets, to enter
into up to five days of exclusive negotiations with the Stockholders concerning
the terms of such re-acquisition prior to entering into a binding commitment to
sell such stock or assets to any third party. In the event that the Stockholders
and Laurus reach agreement, then, after the payment in full of the principal
amount of the outstanding indebtedness advanced by Laurus against the value of
the capital stock or assets of Welch Products, together with all interest and
fees, the Stockholders would be permitted, with certain exceptions, to deliver
to the Registrant, as a credit against the purchase price of such shares or
assets, up to 8,000,000 shares of the Registrant's common stock. Any such shares
would be credited against the purchase price at the rate of $0.32 per share,
irrespective of the fair market value of Registrant's common stock at the time
of such purchase.
The foregoing descriptions of the Exchange Agreement and of the other
agreements referred to in this Current Report on Form 8-K do not purport to be
complete and are qualified in their entirety by reference to the complete text
of the Exchange Agreement and such agreements, which are filed as Exhibits 1.1
through 1.5 hereto and incorporated herein by reference.
Item 2.01. Completion of Acquisition or Disposition of Assets
On October 1, 2007, the Registrant completed the acquisition of all of the
outstanding capital stock of Welch Products, Inc., in exchange for the issuance
of 8,000,000 shares of its common stock, $.01 par value per share. Each of the
disclosures set forth in response to Item 1.01 of this Current Report on Form
8-K is incorporated in this Item 2.01 by this reference.
Item 3.02. Unregistered Sale of Equity Securities
On October 1, 2007, the Registrant completed the acquisition of all of the
outstanding capital stock of Welch Products, Inc., in exchange for the issuance
of 8,000,000 shares of its common stock, $.01 par value per share (the
"Shares"). As of September 30, 2007, 22,880,435 shares of the Registrant's stock
were issued and outstanding. The Shares constitute approximately 35% of the
issued and outstanding shares of the Registrant's common stock as of such date.
The issuance of the Shares is exempt from registration under the Securities Act
of 1933, as amended, pursuant to Section 4(2) of such Act.
Item 7.01. Regulation FD Disclosure
On October 2, 2007, the Registrant issued a press release announcing the
execution of the Exchange Agreement and the consummation of the acquisition of
Welch Products. A copy of the press release is furnished with this Current
Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.
The information contained in Item 7.01 of this Current Report on Form 8-K
(including Exhibit 99.1) is being furnished and shall not be deemed "filed" for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or
otherwise be subject to the liabilities of that section. The information in this
Item 7.01 (including Exhibit 99.1) shall not be incorporated by reference into
any registration statement or other document pursuant to the Securities Act of
1933, except as otherwise expressly stated in such filing.
Item 9.01. Financial Statements and Exhibits.
Explanatory Note Regarding Exhibits
Investors should not rely on or assume the accuracy of representations and
warranties in negotiated agreements that have been publicly filed because such
representations and warranties may be subject to exceptions and qualifications
contained in separate disclosure schedules, because such representations may
represent the parties' risk allocation in the particular transaction, because
such representations may be qualified by materiality standards that differ from
what may be viewed as material for securities law purposes or because such
representations may no longer continue to be true as of any given date.
Exhibits B, C, D and E to the Share Exchange Agreement filed as Exhibit
1.1 with this report have been omitted because executed copies of the respective
exhibits have been filed as Exhibits 1.2, 1.3, 1.4 and 1.5, respectively. All
other schedules and attachments to each of the exhibits below are omitted in
reliance on Item 601(b)(2) of Regulation S-B. Such schedules and attachments
will be provided to the Commission upon request.
(a) Financial Statements of Businesses Acquired.
In accordance with Item 9.01(a)(4) of Form 8-K, the financial
statements required by Item 9.01(a) of Form 8-K will be filed by
amendment to this Form 8-K no later than December 15, 2007, 71 days
after the required filing date for this Current Report.
(b) Pro Forma Financial Information.
In accordance with Item 9.01(b)(2) of Form 8-K, the financial
information required by Item 9.01(b) will be filed by amendment to
this Form 8-K no later than December 15, 2007, 71 days after the
required filing date for this Current Report.
(c) Exhibits.
The following exhibits are filed with this report:
Exhibit No. Exhibit Description
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1.1 Share Exchange Agreement among GreenMan Technologies, Inc.,
Welch Products, Inc. and the Stockholders of Welch Products,
Inc., dated October 1, 2007
1.2 Escrow Agreement among GreenMan Technologies, Inc., Welch
Products, Inc., the Stockholders of Welch Products, Inc. and
Dreher, Simpson and Jensen, P.C., as Escrow Agent, dated
October 1, 2007
1.3 Consulting Agreement between GreenMan Technologies, Inc. and
Bruce A. Boland, dated October 1, 2007
1.4 Consulting Agreement between GreenMan Technologies, Inc. and
John W. Brown, dated October 1, 2007
1.5 Agreement among GreenMan Technologies, Inc., Welch Products,
Inc., the Stockholders of Welch Products, Inc. and Laurus
Master Fund Ltd., dated October 1, 2007
99.1 Press release issued by GreenMan Technologies, Inc., dated
October 2, 2007
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GREENMAN TECHNOLOGIES, INC.
(Registrant)
By: /s/ Charles E. Coppa
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Charles E. Coppa
Chief Financial Officer
Date: October 4, 2007