I got a couple things for you this week as we await the Press Release announcing the commissioning of the Marion, IN COES.
The first is The Kriesler Family Corporations and Limited Liability Corporations or LLCs. If you spend much time reading the past filings you will notice that most of the Kreisler family members have a legal entity that is used to bring money into or out of the company. This is not good or bad in itself - it could be either depending on the circumstances - but everyone should be aware of it when it happens. The most common mention in the filings is Viridis Capital, LLC, which belongs to Kevin Kreisler. It is a holding company in which he is the sole owner and where he keeps all of his GERS Stock. Kevin's wife, Mrs. Rachael Kreisler is the president of and owns Candent Corp. As of March 31, 2008, the Company (GERS) owed Candent Corporation $757,853. Candent Corporation has provided IT services in the past and she has an Internet web designer background. They may have also loaned money to the company through this source? Lawrence Kreisler, the Chairman's father owns Serenity Capital, LLC. Scott Kreisler, Kevin Kreisler's brother owns Cyrus Capital, LLC. As late as the second quarter 2006, Cyrus effected conversions totaling 6,000,000 (pre R/S) shares of the Company's common stock. Kevin's mother Kathi Kreisler does not seem to have her own legal entity, although she and her son Scott still may work for the company.
The Skunk has listed some of the more current actions in the family history in the right hand column if you are interested. I suggest just go to any GERS filing and do a search on - LLC - . The amount of money moved around in these certainly has decreased in the last two years - the older filings are much more interesting in these matters. Cyrus and Serenity LLCs seem to be two years or more removed. The reason I bring this up is twofold. The first is the Skunk wants everyone to know that I include these Kreisler family members in my blog because they are involved in the business. I do not post personal information I find if it is not somehow related to the business. As the Skunk mentioned in his review of the First Quarter Report, our line of credit is getting used up on construction and the accounts payable continues to rise. So - we may see the use of these LLCs to generate cash until a new financing deal can be done. 
What I suspect is these LLCs may be used to effect conversions of common stock. What the Skunk imagines would happen is GERS sells company shares to the LLC on 30 days credit, the LLC sells the shares into the market, the LLC then pays the company with the proceeds. The Skunk has no knowledge this is going to happen - but it seems to have happened in the past when things got tight - and unless we see some financing quick - things may get tight again.
Now this type of thing seems to have been used to pay an old 1million dollar legal judgement in the 1st Quarter:
"During the first quarter 2008, Minority Interest Fund (II), LLC ("MIF") acquired the Kerns $1,000,000 Debenture. This debenture was due to be paid by the Company in two payments $600,000 on January 15, 2008 and $500,000 (plus residual interest and costs of $100,000) on February 15, 2008. MIF purchased the Kerns $1,000,000 Debenture and paid these sums in cash to Kerns on the requisite due dates. In February 2008, MIF subsequently fully converted this debenture at the rate of $0.16 per share into 6,875,000 shares of Company common stock. The managing member of MIF is a relative of Kevin Kreisler, the Company's chairman and chief executive officer." (p. 23 1st Qtr Rpt)
Now, if you multiply out the 6,875,000 shares times .16 you get exactly the amount of the debt - or - $1.1M. This leaves no room for shenanigans or even valid sales commissions. Although we do not learn who the managing member is, the Skunk would guess based on past history, that it is either Lawrence or Scott Kreisler. Even though I have worn out a keyboard trying - I have not found out any more information about the MIF, LLC. When the second quarter Report comes out in August - You and the ol'Skunk will have to see if the family LLCs were used to convert some of the common shares to pay some of the bills this quarter.
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Thanks to Lightbeam on i-hub: For those who missed it - here are a couple of impressive two page spreads advertising GERS. The first is on pages 4&5 of Biodiesel Magazine for NextGen Fuels which is our bio-diesel division inside of Agrifuels.
http://mag1.olivesoftware.com/ActiveMagazine/getBookEnc.asp?Path=QkRNLzIwMDgvMDYvMDE=&BookCollection=BDM_AM&ReaderStyle=Normal&browserWindowWidth=1270&browserWindowHeight=974
http://mag1.olivesoftware.com/ActiveMagazine/getBookEnc.asp?Path=QkJJLzIwMDgvMDcvMDE=&BookCollection=BBI_AM&ReaderStyle=Normal&browserWindowWidth=1270&browserWindowHeight=974
Thanks again Lightbeam on i-hub for that DD
***********************End of Year (EOY 2008) Forecast
The Skunk stands by his detailed EOY from last weeks blog. Here are the quick details reviewed:
12.5MMGY of Corn Oil Bio-diesel = 25M EBITDA
3.75MMGY of Waste Fat Bio-diesel = 2.625M EBITDA
$2.5M Third Party Bio-Diesel sales = 1.25M EBITDA
10MMGY Sustainable Systems = 1.25M EBITDA
TOTAL EBITDA = $30.125 at an annualized rate or $30M
With 30M EBITDA the Skunk estimates we could have 175M shares outstanding at the end of the year. This is due to the various reward programs with preferred stock tied to EBITDA. Historical indications are these stock conversions are awarded when the company reaches an annualized rate of EBITDA earnings over a quarter. (We will explore how this works at a later date)
Public Float 56,044,957
Employee Pool (B) 36,379,995
Viridis Capital, LLC (D) 49,920,000
BIG Shareholder Group (E) 32,000,000
Total 174,344,952
The Skunk is also going to throw in 25M shares as possible debenture stock conversion by YAGI. This is based on past history (and also wanting a conservative, round number to work with!) That gives us 200M shares OS. Moving only 20% of EBITDA down to Net income we have: 6M/200M Shares Outstanding = .03 *P/E factor of 15-25 = .45 - .75 Trading Range
*PE I used very conservative P/E ratio here - compared to the two year forecast - since in six months, even with these short term goals met - we will still be a work in progress - still a diamond in the rough.
My prediction for the last trade in 2008 for GERS is the center of the Trading Range =
.60**
With a trading range of .45 to .75 during mid December '08 to mid January '09. I am making this prediction on 6 June 2008. GERS stock just closed down 9% for the day at a dime.
LONG RANGE FORECAST
The Skunk stands with his Long Range estimate of the last couple weeks. Here is a quick rundown. Detail are in the Skunk archives from a couple weeks ago.
With the remaining convertible debentures all paid through dilution - we get a grand total of 388,295,382 shares "possible" outstanding in FEB 2010. Or, with your permission, the Skunk will round up to 388.3M Shares Outstanding. This is where we may stand with the OS shares - some 4.6 times the present levels in under two years. Yet, what shareholders need to remember is in order to have that kind of number of OS shares - the EBITDA will be over 31 times its present amount ($920,324 X 4 = $3,681,296 or 1st Q at annualized rate of 3.68M) and that difference will be reflected in the share price. Using a factor of one-third to project net income from EBITDA , we can see: 34.7M/388.3M Shares = (net income)/Total OS) = .08936 (PE) X (Diluted EPS) = (est PPS) 55 x .08936 =
$4.91 Share Price in FEB 2010**
**Note: I am a shareholder - I do not work for, nor do I receive any direct or indirect payment from GERS or anyone associated with them. (But it would be Kapitalist Kool if I did) I will not intentionally mislead - but I can be wrong (ask Mrs. Skunk for specific frequencies) - so do your own due diligence - and take responsibility for your own financial decisions – (and your own life in general) good or bad. And some good garage logic luck to ya.
SKUNK
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