3Q Total Revenues $6,088,754
(Only 83% of what SkunK expected, although this makes $24,126,662 for the year so far. That makes us on a pace to hit +$32M in total revenues. The significance of that is last year we came in just under 30M with over half from the sales of environmental services. We have shed that part of the business, reduced debt and managed to replace that part of the revenue stream without missing a beat. We are tight on cash, but we are headed into the 4th quarter and still in the game.
I could of got a pretty good line six months ago if I had bet that by years end Verasun would be bankrupt and Greenshift would be still in the hunt. A whole lot of smart people would have taken my bet at 20-1 and lost.
We sold our 10% share of Sterling Planet for 1M cash. Yagi sold some shares and we have some debt waived. I see we may be selling some Cleantech Preferred shares soon. If you haven't noticed this is the hardest credit crunch we have had in at least 70 years. But so far we have found a way when others have not. Will Greenshift be part of the Billions being spent on new energy technologies in the next administration? Will we find a way to stay afloat until we get to that 8th COES and profitability? Like always - its your call. If you haven't noticed - I'm still here.
Total Corn Oil produced 461,282 [About 65% of what SkunK expected and was about 45% of SkunK's estimated capacity. This needs to improve - and the SkunK expects they will as these new extractors are tweaked on line]
Biodiesel produced (gallons) 511,935 [as expected due to feedstock price - little waste grease biodiesel produced, mostly just the 461,282 gallons of corn oil above.]
Average gross price of biodiesel sold per gallon $4.55 [Excellent Price here. I estimate it must have been close to 50 cent premium to standard diesel price.]
*********
The number of outstanding shares of common stock as of November 19, 2008 was 89,809,764. [Looks like YAGI may have sold about 7M shares into the market by converting debentures. The Average shares/month from July, August and September was 3.5M. October was 13.5M. Looking back at the volumes it seems likely that the sales started on the 6th of October and finished up strong with over 3M shares traded on the 31st. Even with all those shares sold we finished up 20% for the month of October. If we continue on this placid November pace we are set for a slightly lower than average volume of under 2.9M shares trading hands. The SkunK thinks we have had no Yagi or other diluting sales in November.
Gers common shares were 82,751,515 as of Aug 19, 2008.
*********
"We currently own and operate six production facilities - four corn oil extraction facilities based on our patented and patent-pending corn oil extraction technologies, one biodiesel production facility based on our patent-pending biodiesel production technologies, and one vegetable oil seed crushing facility based on conventional process technology." [Here is another confirmation #4 Riga Michigan up and running!]
*********
[Due to commodity price changes we now get $1.00 operating income from a gallon of corn oil. It was $1.40 in the 2Q. Therefore the number of COES needed to turn a profit went from 7 to 8.]
". . . profitability at current market prices will require us to successfully commission eight corn oil extraction facilities."
********
Among our current and known sources of operating cash flows are our four existing corn oil extraction facilities and our biodiesel facility in Adrian, Michigan. Notwithstanding any contributions to our cash flows from our equipment or culinary oil sales, or from refining and selling conventional waste fat derived biodiesel, refining the oil extracted by five extraction facilities into biodiesel is expected to provide sufficient cash to cover all of our regular debt service and operational needs for the foreseeable future.
[Definite signal here we need that December COES to help with cash flow. ]
********
Oshkosh, Wisconsin Corn Oil Extraction capacity has been changed to 1.3 million gallons per year. SkunK's capacity was figured using 1.5mmgy for Oshkosh.
*******
Check out the Miller Agreement (Dr. Paul T. Miller, Ph.D., Chief Executive Officer, Sustainable Systems):
"In November 2008, the Company and Miller entered a restructuring agreement (the"Miller Restructuring Agreement") pursuant to which Miller waived all amounts due to him pursuant to the Miller Purchase Agreement totalling 44,511,134 [*See SkunK note below] including accrued interest. The Miller Restructuring Agreement also included a term that called for the Company and Miller to use their respective best efforts to restructure GS AgriFuels' March 26, 2007 purchase agreements with the former unaffiliated minority shareholders of Sustainable Systems, Inc., on an equitable basis to facilitate a return on their respective investments out of the cash flows of Sustainable's Culbertson, Montana oilseed crush plant after its expansion has been completed."
What does this mean? I have been told by another investor that Dr. Paul Miller is qualified to play George Bailey in real life. In my book, that's a compliment. He got Sustainable started and has been with it ever since. He believes in what he is doing and knows Sustainable is good for everyone in the area. It appears he is not going to let a little money get in the way. No matter how many times I read the above paragraph it says George . . . ah, I mean Paul Miller waives $44.5M* in exchange for?? . . . . nothing?? Well actually he and the company promise to work to restructure the money owned to other former shareholders so that they can share in the profits of a expanded company in lieu of present payments due? The SkunK can only imagine he waived this in order to reduce the debt on Sustainable books to improve the debt ratio to allow for future financing.
(Only 83% of what SkunK expected, although this makes $24,126,662 for the year so far. That makes us on a pace to hit +$32M in total revenues. The significance of that is last year we came in just under 30M with over half from the sales of environmental services. We have shed that part of the business, reduced debt and managed to replace that part of the revenue stream without missing a beat. We are tight on cash, but we are headed into the 4th quarter and still in the game.
I could of got a pretty good line six months ago if I had bet that by years end Verasun would be bankrupt and Greenshift would be still in the hunt. A whole lot of smart people would have taken my bet at 20-1 and lost.
We sold our 10% share of Sterling Planet for 1M cash. Yagi sold some shares and we have some debt waived. I see we may be selling some Cleantech Preferred shares soon. If you haven't noticed this is the hardest credit crunch we have had in at least 70 years. But so far we have found a way when others have not. Will Greenshift be part of the Billions being spent on new energy technologies in the next administration? Will we find a way to stay afloat until we get to that 8th COES and profitability? Like always - its your call. If you haven't noticed - I'm still here.
Total Corn Oil produced 461,282 [About 65% of what SkunK expected and was about 45% of SkunK's estimated capacity. This needs to improve - and the SkunK expects they will as these new extractors are tweaked on line]
Biodiesel produced (gallons) 511,935 [as expected due to feedstock price - little waste grease biodiesel produced, mostly just the 461,282 gallons of corn oil above.]
Average gross price of biodiesel sold per gallon $4.55 [Excellent Price here. I estimate it must have been close to 50 cent premium to standard diesel price.]
*********
The number of outstanding shares of common stock as of November 19, 2008 was 89,809,764. [Looks like YAGI may have sold about 7M shares into the market by converting debentures. The Average shares/month from July, August and September was 3.5M. October was 13.5M. Looking back at the volumes it seems likely that the sales started on the 6th of October and finished up strong with over 3M shares traded on the 31st. Even with all those shares sold we finished up 20% for the month of October. If we continue on this placid November pace we are set for a slightly lower than average volume of under 2.9M shares trading hands. The SkunK thinks we have had no Yagi or other diluting sales in November.
Gers common shares were 82,751,515 as of Aug 19, 2008.
*********
"We currently own and operate six production facilities - four corn oil extraction facilities based on our patented and patent-pending corn oil extraction technologies, one biodiesel production facility based on our patent-pending biodiesel production technologies, and one vegetable oil seed crushing facility based on conventional process technology." [Here is another confirmation #4 Riga Michigan up and running!]
*********
[Due to commodity price changes we now get $1.00 operating income from a gallon of corn oil. It was $1.40 in the 2Q. Therefore the number of COES needed to turn a profit went from 7 to 8.]
". . . profitability at current market prices will require us to successfully commission eight corn oil extraction facilities."
********
Among our current and known sources of operating cash flows are our four existing corn oil extraction facilities and our biodiesel facility in Adrian, Michigan. Notwithstanding any contributions to our cash flows from our equipment or culinary oil sales, or from refining and selling conventional waste fat derived biodiesel, refining the oil extracted by five extraction facilities into biodiesel is expected to provide sufficient cash to cover all of our regular debt service and operational needs for the foreseeable future.
[Definite signal here we need that December COES to help with cash flow. ]
********
Oshkosh, Wisconsin Corn Oil Extraction capacity has been changed to 1.3 million gallons per year. SkunK's capacity was figured using 1.5mmgy for Oshkosh.
*******
Check out the Miller Agreement (Dr. Paul T. Miller, Ph.D., Chief Executive Officer, Sustainable Systems):
"In November 2008, the Company and Miller entered a restructuring agreement (the"Miller Restructuring Agreement") pursuant to which Miller waived all amounts due to him pursuant to the Miller Purchase Agreement totalling 44,511,134 [*See SkunK note below] including accrued interest. The Miller Restructuring Agreement also included a term that called for the Company and Miller to use their respective best efforts to restructure GS AgriFuels' March 26, 2007 purchase agreements with the former unaffiliated minority shareholders of Sustainable Systems, Inc., on an equitable basis to facilitate a return on their respective investments out of the cash flows of Sustainable's Culbertson, Montana oilseed crush plant after its expansion has been completed."
What does this mean? I have been told by another investor that Dr. Paul Miller is qualified to play George Bailey in real life. In my book, that's a compliment. He got Sustainable started and has been with it ever since. He believes in what he is doing and knows Sustainable is good for everyone in the area. It appears he is not going to let a little money get in the way. No matter how many times I read the above paragraph it says George . . . ah, I mean Paul Miller waives $44.5M* in exchange for?? . . . . nothing?? Well actually he and the company promise to work to restructure the money owned to other former shareholders so that they can share in the profits of a expanded company in lieu of present payments due? The SkunK can only imagine he waived this in order to reduce the debt on Sustainable books to improve the debt ratio to allow for future financing.
*SkunK Note: The SkunK has to also believe that the debt waived is NOT 44.5M. It has to be an extra 4 typo. Notice the $ symbol is located above the number 4. Looks like someone forgot to hit the shift key when they typed 44,511,134. I think it should have been $4,511,134, which is about right when you figure what he was owed with interest.
On March 26, 2007, GS AgriFuels entered into an agreement to purchase certaincapital stock of Sustainable Systems, Inc. from Paul Miller, a foundingshareholder of Sustainable (the "Miller Purchase Agreement"). The MillerPurchase Agreement called for $46,448 to be paid at closing, a note forapproximately $882,000 and two $1.6 million debentures, totaling $4,228,729.
********
Sale of Sterling Planet?
(GERS had a 10% minority interest) On September 10, 2008, the Company entered into Stock Purchase Agreement with Sterling Planet Holdings, Inc. ("Sterling Planet"). Under the Stock Purchase Agreement, the Company agreed to sell the 1,459,854 shares of Sterling Planet which encompassed the 10% investment the Company had in Sterling Planet. The total sale price for the stock was $1,000,000. [Looking back The SkunK should have seen this coming. Sure it would have been great to hold this if Washington really goes green. But Sterling planet was kind of like a healthy appendix, you don't mind having it around - but if you have to donate an organ while you are still alive - take my Appendix!]
*******
Note: Months to completion after financing is the only change here and there is only one reason for that. In Montana country it is too damn cold to cure cement in the winter time. Sure you can do it. But you basically have to build a temporary enclosure around the pour and heat it. If cement freezes before it cures it will be worthless. It will crumble. Going from six to nine months for completion means the footings have not been poured yet, and they will not be poured - even if we got the loan today - until the spring.
From the 2Q
The expansion can be expected to be completed within approximately six months after the successful completion of a cost-effective financing for this project.
From the 3Q
The expansion can be expected to be completed within approximately nine months after the successful completion of a cost-effective financing for this project.
*******
CONVERTIBLE NOTES
On September 4, 2008, the Company's subsidiary, GS CleanTech Corporation, entered into a series of convertible notes totaling $1,734,579. The notes shall bear interest at a rate 15% per annum and mature on December 31, 2010. On February 1, 2009, payments are due at a rate equal to the greater of the interest accrued on the unpaid principal or $100,000 times the principal amount divided by $3,000,000. Beginning July 1, 2009, payments are due based on an eighteen month amortization, with all principal and accrued interest paid on or before December 31, 2010. The notes are convertible into shares of GS CleanTech subsidiary preferred stock (par $0.001) at the closing by GS CleanTech of a planned Preferred Stock Financing at a 15% discount to the final terms of any such Preferred Stock Financing. If any portion of the note is prepaid in cash, GS CleanTech shall pay a 10% redemption premium at the time of redemption. If the Preferred Stock Financing does not close on or before January 1, 2009, the interest and redemption premium will increase to 20%. The balance of the loans was $1,734,579 as of September 30, 2008.
(Preferred Stock Financing?? What does that mean? It looks like we sold some notes for 1.7M and that debt cannot be converted into common shares. Instead it can be converted into shares of GS Clean Tech preferred Stock? And we plan to do a preferred Stock Financing? Are we gonna do an IPO of Preferred Stock? To the public? Or just to YAGI? Or just to some other deep pocket investors?
ITEM 3 DEFAULTS UPON SENIOR SECURITIES: None.
(Good)
********
Sale of Sterling Planet?
(GERS had a 10% minority interest) On September 10, 2008, the Company entered into Stock Purchase Agreement with Sterling Planet Holdings, Inc. ("Sterling Planet"). Under the Stock Purchase Agreement, the Company agreed to sell the 1,459,854 shares of Sterling Planet which encompassed the 10% investment the Company had in Sterling Planet. The total sale price for the stock was $1,000,000. [Looking back The SkunK should have seen this coming. Sure it would have been great to hold this if Washington really goes green. But Sterling planet was kind of like a healthy appendix, you don't mind having it around - but if you have to donate an organ while you are still alive - take my Appendix!]
*******
Note: Months to completion after financing is the only change here and there is only one reason for that. In Montana country it is too damn cold to cure cement in the winter time. Sure you can do it. But you basically have to build a temporary enclosure around the pour and heat it. If cement freezes before it cures it will be worthless. It will crumble. Going from six to nine months for completion means the footings have not been poured yet, and they will not be poured - even if we got the loan today - until the spring.
From the 2Q
The expansion can be expected to be completed within approximately six months after the successful completion of a cost-effective financing for this project.
From the 3Q
The expansion can be expected to be completed within approximately nine months after the successful completion of a cost-effective financing for this project.
*******
CONVERTIBLE NOTES
On September 4, 2008, the Company's subsidiary, GS CleanTech Corporation, entered into a series of convertible notes totaling $1,734,579. The notes shall bear interest at a rate 15% per annum and mature on December 31, 2010. On February 1, 2009, payments are due at a rate equal to the greater of the interest accrued on the unpaid principal or $100,000 times the principal amount divided by $3,000,000. Beginning July 1, 2009, payments are due based on an eighteen month amortization, with all principal and accrued interest paid on or before December 31, 2010. The notes are convertible into shares of GS CleanTech subsidiary preferred stock (par $0.001) at the closing by GS CleanTech of a planned Preferred Stock Financing at a 15% discount to the final terms of any such Preferred Stock Financing. If any portion of the note is prepaid in cash, GS CleanTech shall pay a 10% redemption premium at the time of redemption. If the Preferred Stock Financing does not close on or before January 1, 2009, the interest and redemption premium will increase to 20%. The balance of the loans was $1,734,579 as of September 30, 2008.
(Preferred Stock Financing?? What does that mean? It looks like we sold some notes for 1.7M and that debt cannot be converted into common shares. Instead it can be converted into shares of GS Clean Tech preferred Stock? And we plan to do a preferred Stock Financing? Are we gonna do an IPO of Preferred Stock? To the public? Or just to YAGI? Or just to some other deep pocket investors?
ITEM 3 DEFAULTS UPON SENIOR SECURITIES: None.
(Good)
New COES Schedule and more to come.
SkunK
SkunK
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