What's Going On?

"Posted by: lightbeam
Date: Friday, October 10, 2008 4:15:34 PM
In reply to: None
Post # of 5061
"I just shake my head.....""What a day. I do not know what to say. Worked hard here to show the techs they have but seems no one trusts there money here. 1/2 mil t trades after the close."

Sorry for lifting the partial post LB (on i-hub) - but that says what a lot of investors are feeling today.

What a Day indeed. What a week!

What is Going On? We opened the new month at at 6 cents a week ago. Starting this week we dropped through 2 cents and now our shares trade for .6 cents?"

The SkunK DOES NOT know what has been going on this week behind the scenes. He suspects that something is afoot and he suspects that "something" big will happen within the next 2 weeks.

Lay it out for Us!

The numerous things that point to a pivotal event are as follows:

1. Deteriorating Macro Economics
a. This company has been starving for new financing for months - and we now face a worldwide credit crunch the likes of which have not been seen in 70 years. The SkunK had not dwelled on the deteriorating markets - but there appear to be few safe ports in this storm. GERS is certainly not proving to be one. Many pooh pooh the relationship of the overall market and the fortunes of this stock. I am one of those. However the magnitude of the recent market and credit happenings have - or will - affect all companies.

b. Financiers have been burnt royal on soy based biodiesel plants going teats up. There are reports of grown bankers running away like third grade girls faced with a garden snake - at the mere mention of "biodiesel" financing. Even though GERS does not depend on soy feedstocks - the credit industry appears to be gun shy in this area.

2. Deteriorating Micro Economics:

a. The cash reserves, of this company have steadily decreased from the 07 Annual/1Q/2Q from , $486,993; $412,727; $345,342; respectively.
b. Unconfirmed talk of hardware supplier bills not being serviced.#
c. Initial principal payment to YAGI being being delayed from 1 July to to 1 OCT 2008. p.16 2Q
d. Very recent talk of employees not being reimbursed for out of pocket expenses on road trips. #
e. We recently passed a $2M+ deadline with Stillwater. According to the amended terms, all amounts of principal and interest not previously satisfied will be due on September 30, 2008. The balance due to Stillwater at June 30, 2008 was 2,071,886. 2Q p19, 20,23 (note end of 20 Sept and 28 Sept blogs)

3. Talk and No Talk

a. Unconfirmed talk of Due Diligence being made (on site appraisal) this week of GERS COES technology in the field by a tech company. Since such an appraisal is meant to determine the price of an asset during a moment in time - expect whatever is going to happen - to happen pretty quick.#
b. The SkunK sent two sets of questions to GERS in September. Both went unanswered. The SkunK's last correspondence with GERS was toward the end of August (resulting in the 22 and 25 August Blogs.) Normally I would consider this an understandable case of GERS acquiring good taste and not wanting to be associated with a dude called "SkunK." However, the boards have also been absent any GERS correspondence during the same period. Silence may mean accelerated transformation is about to happen before our eyes.

What does all this mean?
Well it could mean nothing. Yet, I think this is the least probable scenario. The only previously planned reasons I can find for a third party valuation is this paragraph on page 27 of the 2Q. (The fact that it dragged into the 4th quarter is not a reason to preclude the tie) It, however, appears to be related to the BIG/NextDiesel purchase and to be a reason for a third party valuation of NextDiesel only. Nothing here explains the reported COES third party evaluation:

"The Company is in the process of obtaining a third-party valuation of certain assets and liabilities, including acquired intangible assets and finalizing its own internal assessment of the purchase price allocation; thus, the preliminary allocation of purchase price will change, and such change could be material. The Company anticipates completing the purchase price allocation in the third quarter of fiscal 2008." 2Qp.27

If one believes all of the above information is true. Then the SkunK believes we may see one of three things very soon:

1. Sale of the COES Technology:
This would inject immediate cash in the company but at the expense of its future. The inventors hold license on GERS technology so it is really a question if GERS owns enough of it to sell. GERS owns the use of the technology but pays the inventors 10cents a gallon and a fee for each new COES. They could sell the COES themselves and the ten year contract but what good it be without Dave Winsess and the specialists in Cleantech Corp? It is hard to believe that Yagi would allow this to happen without YAGI getting basically all the money. I would guess a fire sale would only be done only as a last resort. This might see GERS common shareholders holding a shell. We have a current market cap of just under half a million.

2. Merger
Even the greatest skeptics acknowledge Mr. Kreislers ability to make a deal. It would be hard to believe that he could just sell the COES promise and walk away. It is much more believable in SkunK's eyes that we see some type of merger/partnership developing between say "Global Ethanol" or even "Permolex" and GERS. A buy out - by an up and coming ethanol producer would provide the cash/financing for expansion and the combined diversified company could immediately compete with Verasun Corp for the very real extraction market. Some kind of stock exchange might be possible even if dealing with a LLC??? The greatest reason for this not happening would be the huge GERS debt that the merger would force on the mergeee. However - as we saw with GSEN - it is possible to load up a leaking boat with debt and cast it away. (My few shares of GSEN are the only ones with an up arrow lately.) No one can say that this company is not capable of sewing together a complicated deal. YAGI would have to be paid or convinced it was in their best interest. Depending on the scenario - this might be an option where the GERS common shareholders could eventually see some daylight.

PS - Look at the SkunK highlights and read this aggressive MISSION STATEMENT by Global Ethanol:

"The global leader in the renewable fuels industry within five years through operational excellence, strategic capacity expansion, acquisitions, technology enhancements, preeminent risk management, marketing and distribution capabilities."

{The SkunK HAS HEARD NOTHING lately concerning a merger with these or any other company. He is only exploring this as a possibility.}

3. Loan
A third reason for everything above would be a loan. I think this is not feasible at this time if only because of reasons listed above as Macro Economics. Also, if it was doable it would have already have been done. I wish I am wrong on this. If done on reasonable terms - this might be the best scenario for GERS shareholders.

*************

Below is the (secondary) source for the unconfirmed talk. It is self-titled "Facts or Rumors". I have no knowledge of the primary source, however with enough of the other stars listed above lining up - my gut tells me it is important enough to bring it to your attention and to give my best effort on the possible scenarios if it is true.

#http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_G/threadview?m=tm&bn=77822&tid=4850&mid=4850&tof=18&frt=2

**In conclusion I think this company will evolve into something else within a couple weeks, maybe a month. This is based on the Macro and Micro Economic deteriorating conditions, the unconfirmed board information, and the tidbits outlined above. You are free to make your own conclusions from the same information. My best guess would be a merger into a larger Ethanol company of some sort. My second best guess would be a technology sale involving the COES. How us shareholders fare in all this is yet to be seen. Since our total market cap is less than a half million, hopefully after the swap meet we get thrown in the pickup bed with the COES in it. The Skunk now holds quite a few shares and wishes to follow the COES Technology - but we will just have to see how this plays out.

Whatever information the Greenshift Corporation wishes to put out or correct in the blog above - like always - I encourage - and I will immediately post. Nothing would be finer than to be wrong on some of my assumptions this week.

Looking at the DOW again today - Our times may become even more interesting and challenging.

SkunK.

PS. I have not yet sold a single share of GERS stock. Ever. I just wanted you to know that I have not been selling. I am obviously not in the black here so I am not bragging or suggesting what you or I should do in the future. But I have always told you what I know and what I thought. Like always make your own decisions and Good Luck.

Due to the shifting ground under our feet; until we get some updated information from the company on which to base predictions; the Skunk's short and long range predictions are on hold.

**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. I have been rightfully accused of being a rather cheery, positive individual who laughs at every opportunity. These tendencies may cause me to overlook deficiencies in this stock that are painfully obvious to others. Celebrate today - and some good garage logic luck to ya.SkunK - (Blogger formerly know as Skunk)