Scary Numbers

Lets talk about something that will get everyone all riled up. Lets confront something that everyone thinks they know the answers to. Lets talk about something that is Scary - because if people are confronted with these facts and are honest with themselves - it might cause people to re-evaluate their opinions - (OK - that like that could happen! LOL). I got some SCARY voting % numbers and present OS share numbers at the beginning for the Shorts - and some SCARY future OS share numbers in the Long Range Forecast for the Longs. . . . BOO00oooooo!

Lets talk about voting rights. Who is running the company now and who will be running the company in the future? Things have changed - or have they?

21 Dec 2007 Kevin Kreisler controlled 65.10%* of the voting rights. Pg 2 (14c)

On page 101 of the '07 Annual we have the voting percentages of the officers at that time:
Kevin Kreiseler: 54.98%
David Winsness: 4.15%
Greg Barlage: 3.11%
Edward Carrol: 2.49%

As I have read on the boards - It would take Kevin Kreisler and two of the three other officers to get a 60% super majority. These preferred shares are convertible to common shares and the officers seem to be able to exercise these voting privileges now. However, no one can convert these shares to common and sell them now. They must earn that right after certain EBITDA milestones have been achieved. On page 92 of the 2007 Annual the "Reduction and Restriction of Founder Shares" is covered. Mr Kreisler earns his full conversion at 75M EBITDA and Senior Management and Technical Staff earn their full conversion at 50M.


However "The times - they are a changing."

As we move to the Quarterly, the NextDiesel Acquisition makes a BIG splash in the pond. First of all, on the bottom of page 30 we see the chart x'plaining it to us. The BIG shareholder group starts the day with 20M shares. When we hit 50M EBITDA, they will be at 40M shares converted. However, like the other preferred holders - the Skunk believes they can vote their shares today. Now lets say that "Big" Founder shareholders proxy their votes to Terry Nosan who will represent their interests on the board.

This is how the Skunk sees things TODAY: Pg. 30(1st Qtr Rpt)

Kevin Kreiseler: 124,954,000 43.1%
Big Founder Shares: 40,000,000 13.8%
Employee Pool 69,133,333 23.7%
Public Float 56,044,957 19.3%
Total 290,132,290 100.00%

Looks like Mr. Kreisler lost his majority control. Does that make our world a little different? People have been saying that's what they wanted for years. Now it happened and nobody noticed. Sit down - the room will stop spinning in a minute.

Everyone knows this just cannot be true - Soooo . . .Lets play "what if": What if Terry Nosan cannot vote the other BIG founder shares? What if YAGI converts and sells a bunch of shares? What if the Employees or Mr. Kreiseler decides to sell shares after they have earned the right to convert? The answer to all of these question is the voting power of the common shareholders will increase compared to everyone else. The voting percentage of the others will decrease.

BUT WHAT IF: What if KK wants to change the number of shares he can convert???? What if he wants more shares?? What if, What if, What if? . . . Not with 43% voting rights he's not - not without the approval of another group. All the other groups will lose if he regains majority status - so what would be their motivation? Sit down - the room will stop spinning in a minute.

Since I mentioned YAGI, the senior creditor in this deal - lets talk about that. What is the deal with them and the Public Float?

How about a little history:
In the 9 November 2007 shareholder letter, we were given the plan for the consolidation:
The base of the float would consist of the shares of CleanTech Corp (10M)* after the 50:1 RS (COB 11Dec '07) and the shares issued by the old Greenshift Corp. Near the start of 2008 owners of the "old" Greenshift got the new shares of 3 companies including Clean Tech(20.8M)**. On 25 January '08 Yagi was given 6M shares to "entice" them to finance the COES.

4 Feb '08 YAGI filed a 13g claiming over 5% voting shares at 6,402,598 common shares.
Clean Tech Corp was renamed Greenshift Corp on COB 11 Feb '08. 29 Feb '08 Agrifuels stopped trading and was rolled into GERS. The consolidation basically took place as outlined in the Nov '07 letter without many surprises - even as many public investors continued to pull out tuffs of hair in frenzied worry. On 15 May '08 The BIG investors got 20,000,000 shares of common stock straight up and another 20M shares convertible only when EBITDA milestones are reached. On the first page of the Annual# (detail p. 94) and the first page of the Quarterly## (detail p. 30) we got an update of the number of shares Outstanding.

Total Shares Outstanding
*12 Dec '07 10,000,000 shares
**1 Jan "08 30,800,000 shares.
# 4 April '08 66,200,526 shares
##19 May 85,031,348 shares

Analysis:
So what does this mean? We started with 10M shares of CleanTech Corp after the R/S.* We next added the 20.8M shares from the old Greenshift shareholders.** Next we enticed YAGI to loan us 10M dollars by giving them 6M shares.# (added 3June08) We also converted almost 7M shares to settle an old $1M Lawsuit judgement. (p.23 1st Quarter)

"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."

"In January 2008, the Company issued 25,085 and 6,797,633 shares of Company common stock to relatives of Kevin Kreisler upon conversion of 1,254,244 shares of Company Series A Preferred Stock and 151,250 shares of Company Series B Preferred Stock, respectively, which Series A and Series B preferred shares were originally issued in 2003 in connection with financial accommodations provided to the Company by the holders." (p.28 1st Quarter)

Since we have nothing else to go by - We also had 15,702,808 shares of additional YAGI debt dilution in the first quarter - determined by subtraction.# Finally we purchased NEXT Diesel with 20M shares of common stock on 15 May'08.

However, we can see the difference between the last two numbers is less that 20M from the April to May dates??? A closer look shows that the Public Float increased by 498,431 shares, yet Mr. Kreisler's common shares decreased by 1,332,391 and the employee pool shrunk by 335,217 shares. This leaves us with a net loss of 1,169,177 shares in the Total Shares Outstanding. Of course if Mr. Kreisler and the other employees had sold their stock - it would have increased the Public Float by the same amount as the sale. Instead the Public Float only increased by less than .5M shares and we get an overall CONTRACTION (Subtracting out the 20M share NEXTDiesel buy) in total shares OS. The only answer the Skunk can come up with is Mr. Kreisler and the "employee pool" unconverted most of the shares in question. This has left Mr. Kreisler with only the 154,000 shares of common stock that he had purchased earlier this year.

Sorry
I know this might be too much for one to chew on in a single week - Kevin Kreisler having 43.1% of the voting power today - and having unconverted common shares back to preferred - but I am willing to listen to any other reasonable explanation that does not involve either "The Trilateral Commission", the "Masons", or a certain "grassy knoll" or other conspiracism.

NEXTDiesel
This 30,000 square foot facility is located on a 25-acre land parcel ideally located in Adrian, Michigan. The plant features an indoor heated area for feedstock storage tanks and the B100 NextDiesel bio-diesel product among other important features such as:

An on-site state-of-the-art test lab
Sophisticated environmental and fire suppression systems
Carefully chosen, highly automated processing equipment that does not emit greenhouse gases and uses only recycled water during NextDiesel bio-diesel production.
Access to three major railroads with on site space for 15 rail cars with expansion to 50 rail cars on site. With 25 acres, we also have the potential for future expansion.

Possible Scenario by the end of the year?

I have grouped each oil producer with its closest Bio-Diesel plant. The way the Skunk has it - All distances are under 350 miles - most way under. The two WI plants give us some flexibility - since the distance to Next Diesel in Adrian, MI and Lakota, IA is almost identical and they can be sent either way depending on our production needs. When you factor in the Chicago Metro area with its traffic, tolls and trouble - I think they would be going to Lakota - on a day when everything else is equal!

One thing interesting about the Marion, ID COES system that is now planned to come up in June. According to a Sept/Oct '07 article in BFJ Magazine, the President and General Manager said:

“Our goal is to have our own biodiesel plant on-line by the end of 2008,” Miller added, saying it will produce 5 MMGY of biodiesel, “all from the same corn feedstock.”



Unless things have changed this 5MMGY line may be one of the third party bio-diesel facilities that we are now producing. GERS advertises it can produce either the 5M or the more popular 10MMGY Modular Bio-diesel production line. GERS claims that no one else has the technology to refine the corn oil it produces. So I suspect that the corn oil Marion produces will be refined at NextDiesel until (if and when) their on site plant is complete - using their own bio-diesel line built by GERS. Marion, IN is 173 miles away from the NextDiesel Plant - close enough to be efficient either way.

On another front here is another tidbit from the Global Ethanol Web site:

"It is anticipated that Global Ethanol will be producing the corn oil by the third quarter of 2008 and that the bio-diesel plant will be in production by the third quarter of 2009."

Further along we have this:

"Installation of a 10 million gallon per year Biodiesel facility at Lakota. Target Completion Date: August 20, 2009"



Bio-Diesel Capacity/COES Production/Miles to closest Bio-Diesel Plant



Adrian, MI 20M/0/0
Riga, MI 0/1.5M/16 miles
Marion, IN 5M?/1.5/173miles



Fulton, NY 10M/3M/0
Medina, NY 0/1.5M/108 miles


Lakota, IA 10M/3M/0 miles
Oshkosh, WI 0/1.5M/327 miles to Lakota (401 to Adrian, MI)
Milton, WI 0/1.5M/344 to Lakota(also 344 to Adrian - but 20 min faster to IA)


Culbertson, MT 10M/16M/0 miles (Lakota is 840 miles)
Richardton, ND 0/1.5M/188 miles (Lakota is 654 miles)


Marion, IN 5M/1.5M/0 miles (173 miles to Adrian, MI)



The fuel tanker above has an 8500 gallon capacity. Moving 1.5M gallons of corn oil/year = (4110 gallons/day) would require one of these tanker trucks moving the oil to a bio-diesel plant almost every other day. By grouping the plants with a bio-diesel producer - I have attempted to minimize transportation costs. It seems obvious now that the missing 10M gallon bio-diesel plant (in order to get our 50M gallon capacity established for end of year 2009) - has to go to the MT seed crushing plant. That is the only way the Richardton, ND plant and the huge MT expansion makes any business sense. The Bio-Diesel capacity in MT can access the local customer base - and as they expand can access the lucrative west coast Bio-Diesel market by rail or truck. Although none of the plants would appear to be fully utilized - many more COES (30+ total?) are reported to be under contract. In the meantime - in order to keep the revenues coming in - all the plants have access to low-cost feedstock from various waste fats from sources scattered throughout the Midwest.




Little can be better




VERASUN


This from the VERASUN web site - this shows are at least a year behind us and have yet to see a single gallon of commercial production:



"In December 2007, work began on an oil extraction facility at VeraSun Aurora utilizing a technology to extract corn oil from distillers grains, a co-product of the ethanol production process. Construction is targeted to be completed by the end of 2008 and the process is expected to yield 8 million gallons of corn oil annually from 390,000 tons of distillers grains. The corn oil will be made available for sale to the biodiesel market. One gallon of corn oil yields approximately one gallon of biodiesel, increasing the production of renewable fuels without creating additional feedstock demand."



SKUNK's GRADE for DETAILED FORECAST FOR May 27-30th
Best Buys 8.5 -9.5 cents (Actual .81-.86 - We had 50,000 bought this level) Pretty Close = B+
Weekly range 8.5 - 11.5 ( Actual .81-.102) NOT BAD! = B+
Closes above .15 NONE this week (Actual none) - Wish I was wrong here! = B+
Friday's close .105 (Actual .92) Off by 12% - I use to like Fridays! = C
Overall Grade for the week = a good Solid B

More to come . . .

Weekly Forecasts. . .

LONG RANGE FORECAST

Detailed review of the quarterly has made two BIG changes* to my forecast. The first is the increase of value added margin found in the Quarterly due to spot price increase in the price of bio-diesel. The second is the added dilution from the BIG purchase and Series "E" employee stock conversions. From the quarterly:





"Moving forward, since we are now directly refining our extracted corn oil into biodiesel, the contribution of corn oil to our gross profit is expected to increase to more than $2.00 per gallon."





The goal for GERS (as it has been for at least the last 8 months) is to have 50M gal of COEs, 50M gal of bio-diesel and 16 M gal of oilseed crush annualized capacity online by the end of 2009. With 50M gallons value enhanced that is over $100M EBITDA. (Up from my previous 70M estimate based on $1.40 gross profit/gallon in the Nov 2007 Shareholder Letter.)

The expansion in Montana is still expected to be completed in 2008 - and a good year running near capacity in 2009 should be a solid start to paying off the $9M debt to its former owners and the service of its own debt. We are expected to add $80M in sales and $12M in EBITDA from the Montana Oilseed crush plant during the years 2009, 2010 and beyond.

We see in the Feb '08 shareholder letter a mention of more than 15M in sales for the construction of four 10M gal Bio-diesel plants to third party clients. Our focus has obviously evolved away from third party sales to building our own COEs and bio-diesel. In the shareholder letter dated 9 November 2007 the total estimated future revenue from Bio-diesel sales was 53m with an EBITDA of 13M. We will use that ratio to find the EBITDA for our 2008 sales - I will then use a conservative flat projection for 2009. Our 15M then, provides a conservative $3.68M EBITDA for our annualized third party sales projected into the future.

Totaling up our three major revenue sources in blue font above, we have a projected annualized rate of EBITDA in Feb 2010 of $115.68M


If we reach these goals - clearly re-stated in the 2007 Annual Report - and the First Quarter Report - then it will also affect the number of shares outstanding. A detailed employee stock reward program is in effect on page 93 of the 2007 Annual report. Put simply - with well over $100M EBITDA - the outstanding shares will be 290,132,290 (241,133,851 in Annual) - nearly 3.5 times its present number of 85,031,348. Since we want to include all possible dilution to find a conservative number - we also need to look at page 59 of the annual report to learn this:




"Potential future dilutive securities include 996,279 outstanding options and warrants, and 37,865,871 shares issuable for the conversion of convertible debentures."






Which now changes to this on page 13 of the Updated Quarterly:


"Potential future dilutive securities include 996,279 outstanding options and warrants, and 37,865,871 shares issuable for the conversion of convertible debentures and 56,300,942 shares issuable after the conversion of the Series B Preferred stock under the employee pool."

So with the employee stock reward program and these 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:(The Skunk thinks that the 56.3M shares from the employee pool may have already factored in - and - since we may have had almost 30M shares from convertable debentatures converted in the First Quarter already - that number should have also gone down. However the Skunk will research some more and go with the highest conservative number of 388.3M shares for now. Leave me a comment or an E-Mail if you think you can help here.)

**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.

First Quarter Report

SKUNK NEWS FLASH:

Finally some news on the planned 4th and 5th COES from the Global Ethanol Update Newsletter, May 2008:

"The installation of the first corn oil extraction systems are progressing for both Lakota and Riga. Process tie-ins are occurring during shutdowns at both plants. The skid mounted equipment is expected to be delivered in June with an August start-up in Riga and a September start-up in Lakota."

And also this interesting comment:

"Projects continue to gather momentum and as you will see in this newsletter both CO2 and corn oil extraction have made progress. In particular the relationship with Greenshift is an important one for the company that will provide opportunities to Global in the future."

(Through Global we could access some BIG players who might open some doors for GERS)
http://www.globalethanolservices.com/MGP%20NEWSLETER%202%20Quarter%202008.pdf

Note: Comments about the Riga expansion and their problems accessing credit markets are tied to Global's ethanol expansion at the Riga MI plant and are not GERS related.

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

The Quarterly is out and we saw a few surprises. Was it overall good news or bad? Skunk always has an opinion, but . . . .
Here comes the Judge! . . . You be the Judge!

Skunk Predicted 1.27M Culinary Oil sales: Actual $3,659,954


Of course these numbers are great! Selling oil into the culinary market has higher margins and makes good business sense. Selling this much is fantastic. But even better, could the plant expansion project be finally on its way??? Is financing being locked up? Would we slow down a very profitable part of the business to expand without financing in place? You read this and decide.

Explanation from the Quarterly for these huge sales comes on page 32:

"Culinary oil sales were higher than expected during the first quarter of 2008 due to opportunistic sales of whole seed into higher end culinary markets. Quarterly revenues from this segment for the second and third quarters of this year can be expected to decrease to historical levels due to the fact that we have scaled back production until we complete our plant expansion project. We will not operate at efficient economies of scale until we complete this project. We will not be able to recover all of the available oil in the seed we process until then. Revenues in this segment can be expected to rise significantly after we complete this plant expansion (which is targeted for the fourth quarter of this year)."

This obviously also means we will see a significantly smaller number in this segment until the 4th quarter. And then a HUGE jump in the first quarter of next year if the expansion goes by this schedule above.

Skunk Predicted 3.43M Equipment and Technology (3.34M+.1M) sales : Actual $2,564,428

As the Skunk has mentioned before, this third party bio-diesel is a tough nut to predict on the quarterly. They used to take credit for the construction only at the completion (hence the big 4th quarter numbers last year.). Since they have done a few and have good estimates of milestones, good accounting practices dictated they now switch over to methods that account for a percentage of construction revenues as they build. Since they cannot switch between procedures on an ongoing project, this quarter and last they were still in the process of switching over. Unless they start and finish construction in the same quarter - this will be hard to predict how far along they are in any single construction. However, they already have given a hint for next quarter: "The majority of the revenue and margin for this additional system (another 10 million gallon per year facility near completion) will be realized during the second quarter 2008." Since these come in at about 5M apiece - we can expect even better numbers here next quarter.
Skunk Predicted $838,125 Bio-diesel production: Actual $331,371



This news is disappointing. The numbers are less than half of what the Skunk figured they should be. So far the only answers I can gleam from the filings that excuse these numbers are two things: First of all the Medina, NY facility was commissioned with only 5 weeks left in the quarter. The PR announcing that start up said that much of the infrastructure, including the tanks were not yet present. So the Skunk guesstimating 50% of nameplate was too optimistic.

The second reason was apparently the COES plant at Utica went through a scheduled upgrade which would have caused the system to be off line for a while. This from the quarterly - bottom of page 32.

"We commenced commissioning of our Medina, New York corn oil extraction facility and a scheduled upgrade of our Oshkosh, Wisconsin corn oil extraction facility during the first quarter."

Now there are other answers that I can gleam from outside the filings as well. Here is a reminder of what I wrote two weeks ago (and restate today):

"At Skunks estimate revenues of $2.25/gallon (based on the 19 Feb Shareholder letter) that provides us with $838,125 total dollars of Revenue from the COES for the First Quarter. (If we see significantly less here this will add doubt as to the maturity of our technology and/or GERS will have some serious x'plaining to do. With the Utica Plant now over one year old - we would expect it to be running at near showcase capacity.)"

Here is one reported telephone answer to this mystery as posted by dwkrl on the Yahoo message board Thursday evening in a reported Q & A with Dave Winsness. Mr. Winsness is the inventor of the COES system - Is the Chief Technology Officer and sits on the Board of Directors.

Q: Mr. Winsness, the recent 10Q shows that the revenue generated from COES is only $330,000. The number is about a half of what we expected. Is because your COES not as efficient as it was claimed?

A: The number that you gave me does sound kind low. However, I am not the one who figure(s) out those number(s). As far as I know, Our COES is one of the best in the market. We had made some comparison analysis with six other COES competitors, none of them even come close to our capability. Currently, we have two COES systems in production; one COES running in full capacity and the other one is coming close to its full capacity. Moreover, we have a big backlogs of COES are waiting to be built between now and end of 2008.

http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_G/threadview?m=tm&bn=77822&tid=2872&mid=2872&tof=24&frt=2

Here is another answer posted by one who does not believe the COES work as planned:

http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_G/threadview?m=tm&bn=77822&tid=2828&mid=2840&tof=14&frt=2

The COES are the Key. How they turn out will determine the success or failure of this company. Contrary to what many think - this blog isn't about getting you to buy, buy, buy this stock. I have simply allowed you to look over my DD and listen to me react and try to prioritize and make sense of what I found. I am positive on this stock - and that's why I remain a shareholder, and I am sure most of you understand that's where I am coming from. But I understand everyone has different goals, asset allocations, risk tolerances, ol'ladies etc, etc. So what you need to determine is - do you think these things will work? 'Cause if you think in the long run they will not - this company will fail. No if ands or buts.

You would be better off investing in a tank of gas. However, if they can be made to work at or near plate capacity - a very good chance exists that we will see a BIG turnaround at some point- likely late this year - based on earnings - the earnings of the COES. For instance: If we see good numbers showing both COES running at or near plate capacity for a good part of the second quarter - combined with more COES coming on line - and that corn oil being made into our bio-diesel - then, and only then would I expect to see the start of a sustained movement up in share price. I think that when and if that happens - the refinancing will happen as well. Heck, if the ol' Skunk is asking these questions - What do you think them bankers are ASKING??? When they come aboard - I will know we are going places.

The Good NEWS!

First
Acquiring NextDiesel and bringing it under the Greenshift Corporation may turnout to be a masterstroke. First we built it to our specifications and technologies with the sole purpose of converting our Extracted Corn Oil to Bio-Diesel. So we were actually able to build it for a customer, with all the benefits of their financing and at their risk. Our labor and equipment was paid for at full retail, with their cash. Next we were able to buy it back with little cash. Something we are a little short of. Since we were in the process of adding another 10M gallons of capacity at the site - we have much of the necessary equipment on site and are now ready to assemble another line. With two separate modular 10M gallon production lines - they could insure a steady, continuous revenue stream. GERS could task one line with corn oil and the other with waste fats and other low cost feedstock. This would minimize downtime for cleaning and maximise the use of on site labor for planned and corrective maintenance.

So we have already met half our goal of 20M gallons of bio-diesel production by the end of the year. If we just finish the 10M gallon line at Next Diesel we will have met our goal for the year! Better yet - by adding a third 10M gallon line at NextDiesel (or at another COES? or even better at the Montana Seed Crushing Plant! - more on that next week) and finishing the 10M gallon bio-diesel facilities planned for Lakota, IA and Fulton, NY that would would secure our 50M gallon goal for the end of 2009. All of a sudden what seemed like a fantasy goal of 50M gallon bio-diesel capacity by the end of 2009 looks like it could really happen!

Second
Inter-company balances and transactions From page 10 of the Quarterly:

"All significant inter-company balances and transactions were eliminated in consolidation"

A constant worry of shareholders of layered, related companies is the effect of inter-company billing. Sales Company "A" sells a widget to Service Company "B" for two dollars. Company "B" takes that and installs it in Manufacturing Company "C's" facility for a two dollar installation fee and two dollars for the part. Say Company "C" is in the business of making widgets. They then make 5 new widgets and sell it back to Company "A" for a dollar apiece. It appears to be a booming business with everyone making money. ABC Consolidated Corporation - who owns A, B, and C - then files for combined revenues of 10 dollars. (Whoops - thats $11 - See how confusing it can get?)

Now that GERS is a single entity after consolidation - there will be no significant inter-company balances or transactions. The revenues we see will have been generated with outside sources. One less worry to take off your GERS "worry board."

Third
Board of Directors

When I first started to read the GERS message boards some time back, a common theme was that Mr Kreisler acted capriciously and without limits. Some posts said that what we needed was an Independent Board of Directors to reign him in and ensure his decisions were made on what was best for the Company as a whole (more likely to include minority shareholder concerns).
The addition of Mr Terry Nosan, BIG's chief executive officer and one of its founding shareholders, takes us one step closer to a real board. As it has been pointed out on the message boards, it presently takes three members to get to a 60% super majority. I suspect the new "BIG" Deal will decrease each members voting power - but will have to wait for future filings to find out.

The BAD news:

First
No new COES since late Feb. We need 3 more (for a total of five) prior to 30 June 2008 to remain in compliance with the YAGI debt agreement. (par 5.14). (We also need 3 more after that before 30 Sept). All of these sites are published and in construction. The quarterly (p. 38) only says:

. . . our new corn oil extraction facility in Marion, Indiana (which is targeted for commissioning in June 2008), . .

What YAGI can do if we are in noncompliance is - well just about anything they want. What they will do is up for debate. If you have spent anytime reading the YAGI agreement - they have so many fail-safes and lock-boxes and monitored accounts and deadlines and reports - I would be entirely surprised if GERS was in strict compliance for even the first 24 hours of the agreement. If YAGI closed us down and took over the COES - what are they going to do with them? They surely cannot get back their money back by selling them off without the knowledge base to run and maintain them. I suspect they have us right where they want us - working around the clock to pay their exorbitant interest rates and fees. I also suspect we have over 8M expended on purchased equipment from the 10M revolving credit line as our insurance YAGI will not pull the plug. I may be wrong, but the Skunk would be more worried if we only had a couple million on the line of credit. In this high stakes poker game - us shareholders will have to make sure nobody gets behind us.

The next two on the list are Riga, Michigan and Lakota IA. The Lakota IA facility is set to receive a stage II COES whose nameplate is at 3.0 million gallons. It is also scheduled to receive a 10M gallon bio-diesel plant to convert its - and other western COES's corn oil to bio-diesel.

Second
Cash Flow/Financing

"Accounts payable and accrued expenses totaled $6,614,003." Quarterly P. 35

That is a lot of money to have out in accounts payable. We got 8M+ already spent on our 10M revolving credit. At March 31, 2008, accounts receivable, net of allowance for doubtful accounts, totaled $2,650,855 and inventories totaled $3,896,902. I suspect much of that inventory is not for customers that would generate a quick turn around for us - rather it is in COES equipment that needs to get slapped together and start earning there keep.

Here is the unchanged GERS word on the status of financing:

"We are currently investigating the availability of both equity and debt financing necessary to complete the balance of the Company's contracted corn oil extraction, bio-diesel production and oilseed crush projects. We are also evaluating various opportunities to restructure our convertible debt in favor of traditional, non-convertible long term debt. We do not know at this time if the necessary funds can be obtained or on what terms they may be available."

With a third COES in June and NextDiesel the Company claims that

". . . these four facilities alone are expected to generate over $45 million in annualized sales and produce about $10 million in cash flows from operating activities. This degree of cash flow alone is expected to be sufficient to cover all of our debt service and operational cash needs for the foreseeable future."

AGAIN - this is why the COES must produce - and soon.

Lastly, I have seen a couple of personal loans by the directors to the company listed in the filings. (That were paid back.) A friend of mine said that shows the directors believe in the company and are not just in it to take money out. That's a fair point - but it also means we are having cash flow problems. Things are tight when a member of the board has to write out a check to the company he works for - my first guess was the loans were to cover a payroll. You start losing your good people if the Corporate paychecks ever bounce. These same loans were mentioned in the annual and are not new news - but we need to watch this.

Third
COES Production
Covered above - but important enough to say it again.

Forecasts

Grade for Short Term Prediction for 19 - 23 May 2008

Best Buys .10-.11 ACTUAL = .9 - .10 I should of quit right here - not bad = c+

Weekly range .10-.16 ACTUAL = .9 - .11 half a dime off the high side = F

Closes at or above .15 (One) ACTUAL = NONE Not even close = F

Friday's Close .15 ACTUAL = .9 Off by a couple planets = F

Overall grade for the week = F+ Skunk obviously stunk it up this week - but he gets a plus for enthusiasm.

FORECAST for May 27th - 30th

The Skunk is anxious to beat his head against the wall again - after all can he do any worse? We will find out:

We saw three days with a 9 cent close on the 7th, 8th and 9th of May. We have had two closes at nine on the 22nd and 23rd but unlike before - so far no trades below nine cents. We may get one more nine cent close on Monday - but I see an attempt by the stock to stay above a dime and reestablish that as the bottom. Skunk seems to see NITE backing off sales below a dime - although recently I have seen it asking between nine cents and a dime. Its monthly selling volume supports the general hypothises that it is the chief seller for YAGI. Like I said above we may see the stock drifting up and down in a narrow range until we get production#/COES on line/financing.

DETAILED FORECAST FOR May 27-30th

Best Buys 8.5 -9.5 cents

Weekly range 8.5 - 11.5

Closes above .15 NONE this week

Friday's close 10.5

Long Term Prediction FEB 2010

As promised, the Skunk will adjust his forecast as his assumptions change based on the best information available . We stand with most of the details in the blog from weeks ago. However, reflecting his concerns about COES production not addressed in the Quarterly combined with the failure to systematically bring one COES online during either March, April and most of May, the Skunk has this week reduced his PE factor to 55. The ratio did not fall further since bringing NEXTDiesel aboard made the possibility of seeing increased margins with the corn oil we are producing - a real time possibility. The Skunk will be quick to move this factor up or down depending on information provided or not provided by the company in the following days. The Skunk sees 280M Shares Outstanding - some 4.2 times the present levels. However, In order to have that number of OS shares - the EBITDA will be over 37 times its present amount - 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: 28.97M/280M Shares = (net income)/TotalOS) = .1035(PE) X (Diluted EPS) = (est. PPS) 55 x .1035 =$5.69 Share Price in FEB 2010**

countdown2run = "in 2 market days."

Provided a few snickers on the Raging Bull for the past couple weeks as they provided us a countdown to apparently the three day Memorial Weekend. (Unless the Mayan Calender points to a GERS run starting Tuesday - (Ah . . . ADM buyout . . .or Verasun Buy in . . . . or T. Boone Pickens and Kevin K vacationing together?) If nothing else he/she was consistent. Not missing a single market day, for 15 days. Posting between 8am and 5pm, they simply stated the number of days left in the countdown once a day. Only once were they baited to reply - and then with a single "yes" response to a non yes or no question. Not sure they generated additional interest in GERS stock - but they did generate some chatter. Seems somebody has been to marketing school? Since only one "countdown2run" exists - we will have to wait for them to come clean - are they up to it? Or is that Verasun knocking on the door? LOL

Message Board Sentiment

Revenues were over 18% above Skunk's estimate of $5,538,125. Detailed cyphering to come.

Our total revenues were $6,555,753 as compared to $1,006,208 in revenues for 2007;

http://www.nqb.com/edgar/GetFilingHtml?FilingID=5951460

The GERS Men in Montana - the Oilseed Crush Plant - Some of the New Guys

Just in from the garden. Finally, the frost has left Kornfield Kounty for a couple months. I can work the soil in the small plot I have hand carved amongst the old growth mixed hardwoods which surround me. Just got (almost) all the vegetables planted and the things like tomatoes and peppers out from behind the window and into the ground. For those who work hard to keep your hands clean - let me tell you what you are missing. Few things in life are as satisfying as starting with a promise (seed) and ending up with something as basic as providing nutrition for your family. Some would say fishing is the same - but although I like to fish, I would argue that it does not involve the same long term faith and investment of effort that gardening does. Fishing involves a day. A garden involves three seasons. Raising a child might be the best long range garden type investment we will ever run into. The investment in time and money is enormous, yet if the investment is properly managed, the payoff can dwarf the investment a thousandfold. Like a garden, once the seed is planted (the fun part), the real work has just begun.
I've never been a short term foster parent, but I guess it has to be just a tiny, little like hunting Skunk Stocks. Both require commitment and a leap of faith. The whole idea is picking something out that has seen trouble, maybe someone made some bad choices. Picking up something that others have cast aside. Others can only see the problems, you see the potential. Others look at what the past was. You see what the future can be. In the case of a stock, watching a reversal in a turn around stock can be the most satisfying thing in your financial life. Being able to turn a child around, well that also changes lives - and family trees. If this stock is going to turn around we will see it begin to happen soon. If it is not going to turn around we will know that pretty fast as well. The Skunk knows this for a number of reasons. One of the more obvious is the financial situation. We need to get COES on line and at full production fast - in order to provide the life blood of this company - to pay the bills and service the debt. The Skunk wants answers on the construction of COES and COES production. AND financing. I have already covered these things in painful detail last week and in weeks past.

Today the subject is negative sentiment. Before a skunk stock reaches its low and begins to turn around it has to reach its bottom. Nobody wants the stock. Nobody will admit to owning it. It is unpopular because it is low. It is low because it is unpopular. The tired old shareholders sell and new money takes its place. The Skunk can see a year ago we had over 12,000 shareholders? How many among the various companies?? Today we have about 900. We have (temporarily?) achieved unpopularity. Will the 240,000 shares that sold for .7 be remembered as the bottom? It all depends on the company from here. The first quarter report coming out next week will be important. Almost every dollar of revenue will be from a source that was not even in existence during the first quarter last year. The COES are new. The bio-diesel construction is new. The Montana Oil Crushing is new. The bio-diesel services are new. The old garbage business was sold - and good riddance. Be disappointed in the share price. But everyone should acknowledge that this is a new company. With a new game plan. With mostly new management. With a true board of directors. AND the question is: With a new future??

Board Sentiment
In order to trend sentiment, the Skunk looked at two, seven day periods a month apart. Each period was the same in that; first it was the walk up to the Annual Report and then; prior to our scheduled release of the First Quarter Report. The actual periods were April 8-14th and May 8th -14th. Obviously other days could have been chosen - but I thought this would give an adequate sample. I chose the Yahoo Message Board and simply counted the number of negative and positive posts. Since I read the posts everyday - I am familiar with who posts from each side of the aisle. For all of you who think you are the only unbiased poster - I did have to re-read a couple posts to confirm where they were coming from - so all can pretend you were that single complicated poster. In any case here is what I found. During the April period their was some 76 posts during the 7 day period. 42 or 55% of the posts were negative towards the stock. That is about a 4-3 ratio. During the May period there were 161 posts and 106 were negative. That is 66% or a 2-1 ratio of negative postings. What I found then, was a significant increase in the ratio of negative sentiment over a one month period. For those who read the boards - you already knew that. For those contrarians who are bullish on this stock - (we are an endangered species and deserve protection) this could mean we are at or near the bottom.





For those bears who think we are all on a one way street - you could be near your unprofitable dream of being right on this stock for the first time.


Extreme Bearishness a Definite Bullish Sign
This article is a few months old, and it relates to the stock market as a whole, but I offer it for those interested in such things.

http://seekingalpha.com/article/45142-extreme-bearishness-a-definite-bullish-sign

What is a contrarian investor? ( Or as I like to say a Skunkhunter) This simple, short definition is from our friends at Wikipedia:
In finance, a contrarian is one who attempts to profit by investing in a manner that differs from the conventional wisdom, when the consensus opinion appears to be wrong. A contrarian believes that certain crowd behavior among investors can lead to exploitable mispricings in securities markets. For example, widespread pessimism about a stock can drive a price so low that it overstates the company's risks, and understates its prospects for returning to profitability. Identifying and purchasing such distressed stocks, and selling them after the company recovers, can lead to above-average gains.

REVIEW
Last weeks prediction was based on a First Quarter Report coming out on Thursday. Since it did not come out - and we got an extension: We did not get a big move - up or down. Instead we got a general glide to the upside. So if you moved the prediction two weeks ago to last week and last weeks to next - OH never mind - I just blew it! Technically, one has to be glad that our hard ten seems to have reestablished itself as the floor. Fears of it becoming a hard ceiling can be pushed aside - for now!

Grade for 12 - 15 May 2008
Best Buys .7 - .8 (actual 8.5 - 9.5) Never took the dip - in fact only a few traded below .10 = D
Weekly range .7-.16(actual 8.5 - .11) Missed on both ends, no quarterly report = D
Closes above .15 One - Friday (none) No report! = D-
Fridays Close .15 (Actual .10) WOW! Skunk that is 50% off! You got spanked! = D - - - - -
Overall grade for the week: D- (that's a single minus here).

FORECASTS
The Skunk sees the quarterly report coming out Monday - maybe after hours. On a quarterly report the extension is only for 5 calender days:
"will be filed on or before the fifth calendar day following the prescribed due date;"

So the Report is now actually due on the 20th - but since the Company did not take the whole extension for the annual - I expect them to try and surprise by coming out on Monday afternoon or after hours.


Short Term Prediction for 19 - 23 May 2008
Best Buys .10-.11
Weekly range .10-.16
Closes at or above .15 (One)
Friday's Close .15

Long Term Prediction FEB 2010
As promised, the Skunk will adjust his forecast as his assumptions change based on the best information available . We stand with most of the details in the blog from weeks ago. However, reflecting his concerns about COES production combined with the failure to systematically bring one COES online during either March, April and half of May, the Skunk has recently reduced his PE factor to 75. The Skunk will be quick to move this factor up or down depending on information provided or not provided by the company in the following days. The Skunk sees 280M Shares Outstanding - some 4.2 times the present levels. However, In order to have that number of OS shares - the EBITDA will be over 37 times its present amount - 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: 28.97M/280M Shares = (net income)/TotalOS) = .1035(PE) X (Diluted EPS) = (est. PPS)75 x .1035 =
$7.76 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.

First Quarter Preview Review

Since the first quarter report is due out about the 15th of May, the Skunk has decided its time to don the Karnac The Magnificent Hat and give a look see into the future. In order to do this we need to review a few things - follow along if you would like. First the Skunk is going to take a look at the last quarterly report (Sept 07) to see the structure. Since the Annual was published post first quarter - that will be our most up to date source for company information. There are many numbers in the Annual Report that are labeled as first quarter figures. In fact, although it was published on 7 April, it had figures added to it as late as the 4th. The February Shareholder letter - published with the SEC as well - will be my secondary source. The Yagi debt agreement will be the third. The PRs published during the quarter will be reviewed as well. OK - got everything?? We will both do our review and lets meet back here (sober) in two hours . . . . ................. . . . .............. zzz ........ . . . ZZZZZ . Well that was fun, Huh?

What the quarterly report will say somewhere:

Total revenues for the three months ended March 31, 2008 were $?,???,???representing an xxcrease of ??.?%, over the three months ended March 31, 2007 revenues of $3,291,178.

The Skunk thinks he can fill in the blanks. We will come in with revenues below a quarter (7.5M)of the almost 30M we were able to generate last year and above the revenues from the same period last year - 3.29M. Now that isn't much of an estimate since the spread is so big - so lets try to refine that a bit. Now the Skunk is just smart enough to know that if he gets lucky and is close in his estimate - some will say he is an insider and a "company clown". AND if he is way off (more likely) he will be an "asstard clown". But luckily, since he is really an "I don't give a XXXX what anyone thinks clown" - here goes. LOL

First we have to eliminate some of the revenue since we sold the Environmental Services Division (ESD). Next we have to add in the additional revenues we will get from the corn oil extraction, the increased equipment sales, and the engineering for hire team running the third party bio-diesel plant we have installed. Finally we add in the culinary oils from the Montana plant. That should get us in the ball park.

We all know that COEs have a plate capacity of 1.5M gallons per year. That is 375,000 gallons/quarter. What I am going to do is use a 1.25M gallons per year rate for the Utica Plant in Wisconsin - that would give us 312,500 gallons in the first quarter. The 1.25M gallons comes from the Yagi debt agreement (paragraph 5.16) - anything less than that and it may affect our ability to draw down on our $10M revolving debt. What about the second COEs at Medina, New York? Well, we were told on 25 Feb that “We still have to finish installing the tank farm and other infrastructure but we’re going to start moving product." This was well over half way through the quarter, and without the infrastructure in place - I would say we might expect maybe 50% production over those 5 weeks left in the quarter - or an additional 60,000 gallons. This gives us a total of 372,500 gallons. At Skunks estimate revenues of $2.25/gallon (based on the 19 Feb Shareholder letter) that provides us with $838,125 total dollars of Revenue from the COES for the First Quarter. (If we see significantly less here this will add doubt as to the maturity of our technology and/or GERS will have some serious x'plaining to do. With the Utica Plant now over one year old - we would expect it to be running at near showcase capacity.)

The February Shareholder letter has us bringing in $15M in additional sales for third party bio-diesel sales in 2008. The Annual Report mentioned that future sales would report construction revenues over time - not only at completion - since after the completion of prior installations - they have the documentation to properly track/predict the progress. (Annual Report P.56-57) One third of that 30M gallon capacity was commissioned in the first quarter. (But some 1.67M? was accounted for in the 2007 Annual report?) So the Skunk is going to take 1/3rd of $15M and subtract out the 1.67M to get 3.33M as his wild arse low ball guesstimate. (Damn those bean counters)

Next we are looking at the engineer for hire team running third party Plants (NextDiesel?). An engineer and a technician sub-contracted out at a $200,000 and $100,000 ea including benefits. Plus corporate support. I would have to really wing it here and guess we see $400,000 on an annualized rate or $100,000 for the quarter revenues from this source.

The final source is the Montana Oil Seed plant. We saw 5.087M last year on an annualized basis. Since none of the expansion is reported completed - except for increasing oil prices - this number should not change much. I will try to find a way to account for seasonal quarterly changes and refine this number later - but for now I go with 1/4th of the annual or 1.27M.

So, adding up the 4 sources of revenue (in blue above) - here is my best guess:

Total revenues for the three months ended March 31, 2008 were $5,538,125 representing an increase of or 68.3%, over the three months ended March 31, 2007 revenues of $3,291,178.

Think you can do better? Play along in the poll to the right - and for those who want a more serious challenge - email me your estimate - and I will post it on the blog under your board name or the pseudonym of your choice.

skunkhunter13@gmail.com

Over the last two weeks we have covered two basic subjects:

Two weeks ago Skunk asked and answered this central question: "What is important?

Skunks answers were:

1. Getting as many Coes on-line as quickly as possible.

2. Getting conventional Financing to support getting as many COES on line as quickly as possible.

In last weeks blog the second question was addressed: "What is not important?"

1. Skunks short answer was -"Everything else." One detail to that answer was getting rid of the Environmental Services Division (ESD) was a good thing. First, it helped to focus on getting as many COES on line as quickly as possible and two, it helped towards better financing.

Now a question has arisen about the basic technology of the COES.

Is this question important? YES!!! REFER TO FIRST ANSWER ABOVE: (Getting as many COES on-line as quickly as possible) . Of course a corn oil extraction system is no good to anyone if it is not on-line and in production. This is a new technology and it will have problems. Our first COES was commissioned in April of 2007 and has been running since. It did not run at plate capacity from commissioning to years end. I know that since on page 38 of the annual we claimed $491,655 for annual corn oil biofuel up to 31 Dec 2007 and yet bouncing that off the table on page 78 we see only $270,866. (Side note: That difference, however, is reflected in the opposite change in the two culinary oil entries - did we make edible corn oil in a COES? Or did we make corn oil in Montana?) In either case, even if we divide the largest number of 491,655 by $2.25 per gallon we see a production of 218,513 gallons - or less than two months at full production over the eight months after commissioning. Clearly we have had problems getting started here. Clearly, using the company's own numbers - the potential for continuing problems still exist.

People who claim to know, or claim to know others who know, have written that neither of our COES system work as advertised and both have significant problems that continue to this day. Here are three specific posts so you can judge for yourselves:

http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_G/threadview?m=tm&bn=77822&tid=1555&mid=1557&tof=18&frt=2

http://messages.finance.yahoo.com/Stocks_(A_to_Z)/Stocks_G/threadview?m=tm&bn=77822&tid=2264&mid=2265&tof=7&rt=2&frt=2&off=1

http://messages.finance.yahoo.com/Stocks_(A_to_Z)/Stocks_G/threadview?m=tm&bn=77822&tid=2264&mid=2266&tof=27&rt=2&frt=2&off=1

I do not know for sure one way or the other, but I have enough doubt as a supporter of this company to realize that this question must be confronted head on, and quickly. That was the purpose of my questions on the Raging Bull message board. It is comforting to know that a COES can be made to work - but do ours work? - and how well? The shareholders have the right to production numbers at a certain point - or at least an immediate no wiggle room answer that our units are operating as advertised. I realize this could open a can of worms with present and future customers. Yet with the share price haven broken through the dime support - its time for action. As I have said like a broken record - if this is going to work - it all depends on the COES. There can be no doubt that our COES work, or can work - and at a commercial level. We need to acknowledge any problems - tell the shareholders the plan to fix the problems and move on quickly to fix those problems. In any case, we shareholders will eventually be able to determine the rough extent of any problem by crunching the numbers in the filings - the only question is - will the company make the process easy or hard? Will they tell us the correct assumptions or do we have to make our own?

A True Little Story

A hour's drive from my cabin is a metropolis of over 20,000 souls. A billionaire got his start there and still maintains his HQ in the area. He started with almost nothing and is now a hugely successful businessman. 35 years ago his first employees would run to cash his checks before they bounced. The quality of his product was famous for being bad - but he was always the cheapest. He treated his employees like crap if they were expendable - and he worked hard to make sure they were all expendable. He tried to screw every business that ever made a deal with him. One of a thousand examples was when he offered a deal to a gas station. He would run his fleet through them if they would expand enough to handle his business. Soon after they did, and they were mortgaged to the hilt, he told them what he was going to pay for the gas. They said that they would lose money at that price. He said that was the price or he would go somewhere else. Forced into a corner they chose the slow death of subsidizing his fleet - and he eventually bought them out for pennies on the dollar. Well let me tell you something - he is business successful - but there are thousands? of people who love to tell stories about what an evil dude he is to just about anyone who will listen - just like I did for you. AND do you know what - most are true. Now don't you wonder how the Skunk was involved here and how he came on this story? Was he the manager of the gas station? Was he he a manager for the evil dude? Is the Evil Dude his uncle? Maybe Skunk was just holding down a bar stool next to one of the above? Does it matter as to how much credence you give to the story? Of course it does.

An Even Truer Story
Every Enterprise has its 10%. Even the best Boss possible in this world, who hand picked his 12 disciples, still had one who did not appreciate his Boss. (OK 1 out of 12 is only 8.33% - but it is the one exception that proves the rule.

What the Heck is your point Skunk?

My point is every boss fits in between the two examples above. Most of the bosses I know are not as bad - but are of course, closer to the first example than the second. Although I don't know Mr. Kreisler - I see no reason to single him out as one who might get less than his full 10% of malcontent employees. In fact from what I have heard, I think Mr. Kreisler will generate at least his typical 10% of dissatisfied employees and former employees. Then there is the failed businessman who felt he got took in a business deal - like the owner of the gas station above, he would naturally want to get even. So the rumors about the COES may be wrong - fed to others to spread like gossip to even an old score - real or imagined. The possibility exists however, that the rumors about the production of the COES are very true. The Skunk has enough information to want detailed answers and will not dismiss his concerns until the company proves otherwise.

OK, THE REAL POINT IS:
In the absence of news from the company to counter rumors - those 10% can generate a lot of trouble telling stories: some embellished, some fabricated, some true. We need to listen, evaluate the message, evaluate the messenger and evaluate their sources and each make our own decision. It leaves us poor shareholders asking questions and looking for answers - answers the company needs to answer. Answers that will hopefully be answered in the 1st quarter results - or at least within the next 30 days.

FORECASTS

Well Skunk you got the move south right - but the single big trade to .7 caught you by surprise - didn't it? It sure did. I was also surprised by the three closes at 9 cents. Here is what I said last week:

". . .As the bottom band moves between 9 and 10 cents - it could be possible for the PPS to meet that band in the 9 cent range during the week, however I do not see a close below 10 cents - and that means I expect the bottom to hold firm again. "

Detailed Forecasts for 5-9 May 2008
Best Buys: 9.5-10.5 (actual .7) WOW almost a quarter Million shares at .7! = D
Closes above .15 (none this week)(actual none) Too easy = A
Range for the Week: 9.5-.12(Actual .7 - .11) If not for the big .7 cent trade - I would have only been a penny high on both ends = D
Friday's close: 11.5 (Actual .9) ouch! D-

Skunk earns a grade of D going into finals week! Here comes the First Quarter Report!

Forecast for 12 - 16 May 2008

I think the technicals here are not much help. I would normally say that the PPS will either continue to ride the lower band at .9 and try to establish a new low - or start the move to the higher band. This week I think will be dominated by the Company Report - and any news will simply wash away anything that stands in the way. I think if the investors are sophisticated enough to have written off the EDS revenues as old good news, AND the Company brings the bacon home with good news about new COES Installations nearing completion, Production at decent levels and Financing in hand - then the sky is the limit. If on the other hand - we see the opposite - say hello to new lows. Up or Down, I think you should keep the antacids handy - next week may make a skydiver nervous. I see a low start to the week - with a strong finish after the release. Does our CEO have a rabbit up his sleeve?

Well, Bullwinkle this is Rocket J. Squirrel calling: "It's time!"

Detailed Forecast for 12 - 15 May 2008

Best Buys .7 - .8

Weekly range .7-.16

Closes above .15 One - Friday

Fridays Close .15

Long Term Prediction FEB 2010

As promised, the Skunk will adjust his forecast as his assumptions change based on the best information available . We stand with most of the details in the blog from two weeks ago. However, reflecting his concerns about COES production combined with the failure to systematically bring one COES online during either March or April, the Skunk has reduced his PE factor 25% to 75. The Skunk will be quick to move this factor up or down depending on information provided or not provided by the company in the following days. The Skunk sees 280M Shares Outstanding - some 4.2 times the present levels. However, In order to have that number of OS shares - the EBITDA will be over 37 times its present amount - 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: 28.97M/280M Shares = (net income)/TotalOS) = .1035(PE) X (Diluted EPS) = (est. PPS)75 x .1035 =

$7.76 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.

The 9 Cent Punch

The Rumble in the Jungle, Can GERS take a punch?

At 32, many people feared for Ali’s health but on an amazing night, he soaked up astonishing punishment on the ropes before launching a stunning counter-attack in the eighth round to floor Foreman. Does GERS have the juice to bounce back?

Here is an informative (Skunk note: Not to insult the reader - but for those unfamiliar with the term "informative" - information can be gleamed in what is said, what is not said, how it is said and the detail or the lack thereof) answer to two questions Skunk posted on the Raging Bull GERS Board and were relayed to Mr Kreisler. The answers were posted back on the board in about an hour. It appears the COES can certainly meet and exceed plate capacity. Hopefully, actual data showing production in our two COES units will be released in our "periodic security and other filings"

----- Original Message -----
From: Kevin Kreisler
To: John XXXXXXX
Cc: 'Chris Kennedy' ; David Winsness
Sent: Wednesday, May 07, 2008 3:35 PM
Subject:

1 - Both of our COES and biodiesel technologies are well proven and have been thoroughly reviewed by a great many of our current and pending clients and financial partners.

2 - Our actual corn oil and biodiesel production data will be released in our periodic securities and other filings.

3 - We have well over 30,000 hours of operating history in COES. An early adopter version of COES technology is in production today at Little Sioux in Marcus, Iowa - this COES facility is currently producing more than 1.5MMGY.

Skunk Movie Review

GERS has come to that Indiana Jones Rope Bridge in the jungle. The void is immense, the treasure is on the other side, and the bridge is dangerous. The first four planks are missing, others are rotten, only a single grapevine (non OSHA approved) handrail. Since the debt hounds are closing in fast, we drop our pack and we run and we jump. We barely made the leap, yet we steady ourselves for the dangerous journey across the swaying bridge. As the ravenous debt hounds thunder up and yap helpless on the bank - they tear apart our dropped baggage, in the pack we dropped to make the initial leap - they find garbage - and that old GERS garbage sorting equipment.

Some shareholders might complain that they bought into the whole heavy metal recycle business. They were "sold" on that part of the business. The Skunk has the whole company history recorded in this blog all the way back to "Kreisler Bags" in 1979. Well, if you have not noticed - over the last few years - what was left of heavy industry in America either packed up and moved overseas - or they reduced their waste to a trickle. In either case that purpose for the company- heavy metal waste recycling and other "environmental services"- has become a shrinking non-market. The company survived the period (with debt, barely) and that's about it. Well, the Skunk never bought a share based on that business strategy. Every single share I have purchased and continue to hold is a bet on the Corn Oil Extraction/Biodiesel business. Now, anyone could have written off their original play on Veridium Corporation, but if you are still here you decided to stay for what some thought was the second act. Well, the Skunk did not come to see the second act of the same play. . .

Some of our shareholders came back from intermission criticising the company of actors and saying like they don't understand the plot. Its like they were watching "Rio Bravo" at the multiplex - and after a popcorn break they came back to another "plex". They sat down to "Sands of Iwo Jima" and start asking: Where are the horses? What happened to Dean Martin? The Skunk needs to break it to some of our GERS Knuckleheads - ITS A DIFFERENT MOVIE! Its a different plot. Its a different time. Sure, the leading man - John Wayne was in both movies - but that's it. (Now before a smartask short runs with this analogy to the climax of "Iwo Jima" - lets move on!)

Grading last week's Detailed Forecast April 28th – May 2nd

Best Buys(.11-.12) Actual (.105-.11) Not too far off = B

Closes above 20 (none - not this week) Actual (none) This is way too easy = A

Range for the week (.11-.15) Actual (10.5-.12) Real close on the bottom/Top killed me = C

Fridays Close (.14) Actual (10.5) Ouch! D-

We did not get the drift up - drifted slightly down = Overall grade C-

Forecast for the Week of 5-9 May 2008

I see the top bollinger band and the 50 day moving average have come together at 13.5 cents. The hint of a band contraction I had mentioned last week, but luckily did not call, disappeared. I see the PPS moving in a continued narrow band for the next week as buyers and sellers await the 1st quarter report due out on the 15th - Thursday of the following week. As the bottom band moves between 9 and 10 cents - it could be possible for the PPS to meet that band in the 9 cent range during the week, however I do not see a close below 10 cents - and that means I expect the bottom to hold firm again. Since the stock rose 20% above its bottom - and then reversed course - the Skunk is counting this as the 5th test of the dime bottom. With every successful test - the bottom becomes stronger. Like tempered steel - the heat strengthens our mettle.

Detailed Forecasts for 5-9 May 2008

Best Buys: 9.5-10.5

Closes above .15 (none this week)

Range for the Week: 9.5-.12

Friday's close: 11.5

Long Term Prediction FEB 2010 We stand with the details in the blog two weeks ago. The Skunk sees 280M Shares Outstanding - some 4.2 times the present levels. However, In order to have that number of OS shares - the EBITDA will be over 37 times its present amount - 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: 28.97M/280M Shares = (net income)/TotalOS) = .1035(PE) X (Diluted EPS) = (est. PPS)100 x .1035 = $10.35 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.