GreenMan Completes Sale of Georgia Scrap Tire Business

GreenMan Technologies, Inc. has entered into agreements with two separate parties for the purchase of all Georgia scrap tire operating assets.

Chuck Coppa, GreenMan's CFO stated, "As previously disclosed, due to the magnitude of the operating losses incurred by our Georgia subsidiary, we implemented an initiative to dispose of all Georgia operating assets and wrote down these assets to their estimated fair market value at September 30, 2005 recording an estimated non-cash loss on disposal of approximately $3.4 million.

"We today announce that we have entered into an agreement with Tires Into Recycled Energy and Supplies, Inc. in which we have sold and assigned to TIRES (a) certain truck tire processing equipment located at our Georgia facility; (b) certain rights and interests in our contracts with suppliers of scrap truck tires; and (c) certain intangible assets. We received $155,000 in cash proceeds from the sale and TIRES agreed to terminate several material supply and equipment lease agreements previously executed between the parties in addition to terminating a December 2005 letter of intent between GreenMan and TIRES containing an exclusive option to acquire certain operating assets of TIRES,” Coppa said.

He also mentioned that GreenMan entered into an agreement with MTR of Georgia in which they sold and assigned to MTR certain passenger tire processing equipment located at its Georgia facility; certain rights and interests in our contracts with suppliers of scrap passenger tires; and certain intangible assets.

In return, GreenMan received $250,000 in cash proceeds from the sale and MTR has agreed to assume financial responsibility for disposing of all scrap tires and scrap tire processing residual at the Georgia facility as of the close.

The company also agreed with TIRES and MTR not to compete in the business of providing whole tire waste disposal services or selling crumb rubber material (except to existing GreenMan customers) within certain Southeastern states for a period of three years. In addition, both parties entered into a sublease agreement with us with respect to part of the premises located in Georgia.