We have not issued any new convertible debt since 2007 and we have no intention of doing so here.
Importantly, these facilities alone can be expected to produce transparent, hedged, recurring cash flows at levels more than sufficient to service all of our current obligations
Our hedged margins give us the ability to remain profitable (at throughput levels above our break-even point) in the face of market movement that would be fatal to a conventional producer.
We are not in discussions to merge with or to acquire or to be acquired by any company.
We have no plans to reverse split the stock.
There will be no sale of our intellectual property.
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The CEO explained that although we are not selling our intellectual property, we currently have one COES that is running under our "Purchase Option". The Purchase Option COEs is paid for by our client and in return they get a better price for the corn oil that GERS buys from them. While this is not a new program, it is "news" that a current COES Partner has chosen it. The SkunK is sure the sale will be a welcome addition to our cash flow. Here is the "Purchase Option" explained from the GERS web site.
"We offer two extraction programs: 100% Financing and Purchase. In today’s market (with diesel spot at about $3.33 per gallon), the price we pay for the extracted oil equates to about $0.33 per pound or about $2.50 per gallon for clients that purchase our systems, or about $0.25 per pound or about $1.86 per gallon for clients that take advantage of our 100% financing option. This equates to between $9 to $17 million in additional income for a typical 100 million gallon dry mill ethanol facility. In addition, removing oil from the DDG can also be expected to reduce drying costs, reduce emissions of greenhouse gases and volatile organic compounds and to enhance the marketability of the remaining DDG as more de-fatted DDG can be included in the daily rations fed to beef and dairy cattle. Additional information on our 100% financing program and our purchase option is available upon request."
http://www.greenshift.com/product_desc.php?mode=1***************
What happened to the Stock Price?
Since the 6th of October the volume has exploded. The 9th, 10th and 13th had volumes over 1M shares traded. The typical day over the ten day period had the stock at strong volumes throughout with steady or trending higher prices. Then in the last half hour of trading the market would be flooded with sell orders and huge volumes - driving the price down. A notable exception to this was this Friday, without the flood of sells at the end - the price remained strong - actually gaining 40% in the last half hour of trading and up over 97% for the day.
What is causing this?
The obvious short answer is the inflationary effect of more shares on the market. More shares for sale = lower price. The three month average vol is about 150K. That means that of the 8M shares traded in the last ten days, about 6.5M were "extra" or "unexpected" shares. The average close over the last ten trading days was .01185 - meaning that if these shares were payment of debt - we paid off about 77K. While there maybe a half dozen possible scenarios - the most reasonable one to the Skunk today is YAGI is converting unpaid debt to shares and selling them. Does he know this? NO. Just my best guess. Many - including the SkunK - expected to see a slow drift up in shares OS over the last six months. So far we have all been wrong. We may be wrong again. Remember this is not a new convertible debenture - this would be an old one being converted. Judging by my best guesses in the last blog (before the CEO gave us some current information) - you might want to come up with your own best guess. [play laugh track at SkunK's expense here]
"On the first business day of each month, the Company must pay $250,000 to YAGI. If the Company fails to make the payment, YAGI shall be entitled to convert that amount of accrued interest and principal into common stock of the Company at a conversion price equal to the lesser of (a) $1.25 or (b) 90% of the volume weighted average price for the twenty trading days preceding conversion. " p.18 Q2
Since GERS in this scenario is credited with 90% of the 20 day vol weighted average price - we would have actually been credited with the period only 10 days ago with the PPS trading between 3-6 cents. 90% of the NON-weighted average price (YOU do the weighted math!) for the last 20 trading days (based on the close) was .024 - or multiply times the 6.5M extra shares - we now are credited with about $156K. Did GERS make a partial payment of 100,000? - and is this the end of dilution? We should have a good idea by 4:15 EST Monday.
As to whether Skunk is correct about the 6.5M shares being YAGI dilution? - we should know that at the release of the 3Q by 17 November. Against all odds we have had NO Convertible Debenture DILUTION since 4 April 2008 when we had 66,200,526 shares and we then added 20M shares for the down payment on NextDiesel on 15 May. We actually CONTRACTED to 85,031,348 shares on 19 May and 82,751,515 shares on 19 August.
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Perspective?
Remember the 30th of September?- neither do I. The last trading day of last month we traded only 170,093 shares and closed at .051 cents. Ten days later we closed at .0062 with 1,027,457 shares traded. One thing we need to keep in perspective is that on that first "sleepy" day $8675 traded hands - while the "exciting" million share day only traded $6370 - a decrease of 36%!
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Dilution
No one likes to see dilution of the Shares Outstanding. Not the Company, not the stakeholders and especially not the shareholders. But to listen to some of the experts around, you would think they try people at the Hague for War Crimes over it. Does anyone here know why Companies Sell Stock? Do they do it so they can spread the wealth around? (And the SkunK is the one credited with listening too much to Investor Relations!!) Do they do it so they can file a hundred filings and follow a few thousand regulations? I don't think so! They do it to raise capital when they need it. If someone does not realize this - then they have no business investing outside the protective wings of the FDIC. To Summarize: Dilution=bad. Bankruptcy=worse. Now you make the call.
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Perspective on Dilution
As I hinted earlier GERS has really had a handle on OS dilution since April. Greenshift has 500M total OS available to them - so we are presently only using about 17% of our potential OS shares. That is why any talk of a reverse split in the foreseeable future is getting way ahead of ourselves. So as not to have you think I am sweeping our more ancient history under the rug - lets look at OS history over the last two years - with both eyes open. "Real dilution" is what happened between November 2006 and May 2007. Shares OS increased by about 65% in 6 months. In stark contrast to the last six months where (if you factor out the 20M share NextDiesel down payment) - GERS actually contracted its shares outstanding by 4%.
But SkunK? - Some of the same people who were for the stock during the huge expansion in shares are now against it - and claim one of the reasons they are against it is present dilution??
Don't Ask the SkunK what is going on in (OPN) other people's noggins. He has more than enough trouble trying to explain what he thinks. I can give you the facts and the stats - and you can decide for yourself:
249,828,213 15 Nov 2006
333,345,000 13 April 2007
410,660,805 21 May 2007
483,671,558 14 August 2007
497,548,271 14 Nov 2007 (nearing 500M Cap)
*****50/1 Reverse Split&Consolidation 12 Dec 2007
10,000,000 Shares for Clean Tech Shareholders Holders21,800,000 Shares for Greenshift(old) Shareholders
*****31,800,000 Shares TOTAL OS after Consolidation and R/S
Changed Name to Greenshift Corp 12 Feb 2008
66,200,526 4 April 2008
20M shares down payment on NextDiesel 15 may 2008
85,031.348 19 May 2008
82,751,515 19 August 2008
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With the Stock price just bouncing off its all time low - I thought "Kind of Blue" seemed an appropriate theme this week. Here is a little Miles Davis' "Freddie Freeloader" off the classic jazz "Kind Of Blue" Album from the late 50's.
http://www.npr.org/templates/player/mediaPlayer.html?action=1&t=1&islist=false&id=10862796&m=11303603More, SkunK
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