Friday, October 31, 2008

Stock Price!


The number one story the last two weeks is the stock price. It went up. and up. And Up. When we look at the "textbook" stock chart we see a perfect "W" double bottom.
Now lets look at GERS stock in real life below. Looks pretty good to the ol'SkunK, but you make up your own mind. If you were a technician you might tell me that the two bottoms should a couple weeks apart, best if about three months. The bottom should have heavy volume (remember the three days at +1M shares each?) The right side should have generally less volume until it hits the confirmation point. We haven't yet hit the confirmation point - here it is six cents - the point we started the pattern. As it breaks through at 6 cents we should have good volume. In any case, even if you do not believe in this hocus pocus, we should at least know what the Technical Analysis Traders will be looking for as they flock to this chart. If this is not our double bottom then we may get another test of the low. For those of you who missed out on the mid month "buys" you could get a second chance to load up. For those who foresee the worst, you might get (at least) one more chance to say "I told you so!"

Statistics:
In October we may have seen our absolute low(10Oct .0062). In October we have been up eleven trading days, down eight days and held our own on 4. Over the last 11 trading days we have finished the day down only once. We have not traded below 2 cents for nine consecutive trading days.

In the last Eleven trading days we have been down only one day. We started this week at .03 and finished at .05 - up 67%.

Well SkunK, are you ready to lead the Parade? Think it's all Blue skies ahead??

I know, we have all been underwater for so long, it feels good to get a breath of oxygen. I read a little chest beating on boards and smile. Nothing is sure in this life except two things. Even the SkunK, the greatest cheerleader of all time, will not include GERS as one of those two sure things. Lets not get ahead of ourselves. Sure, we may have lived through the bottom this month and all investors should take a deep breath. Sure, we may have had a nice little run. Do I think its only up from here? No. We only went up as fast as we went down and on a low volume stock (least it was low volume) it can happen again. The SkunK can see plenty of speed bumps in the road ahead, some may be serious. But I do think, as I always have, that this stock will eventually be priced quite a distance up from here. With a super decent financing deal and a few months of multiple COES operating at or above capacity, we could see my Feb 2010 forecast ($3.72 pps#) come flying at us at light speed in under a year. Then again, with no financing and no great COES production numbers to confirm our great potential we could easily retest our lows. . .

It was nice to read what I thought were a couple? Technical Analysis (TA) traders come up on the boards. The same way our chart has chased away the technical dudes over the last year or so, our chart, if it builds on its recent nice move, will start to attract these TA traders like bees to honey. They will buy and sell, come and go. They don't know and don't care if we sell corn oil or corn flakes. They will increase the volume and liquidity and help to pollinate this stock.

Yea Glorious Day Approacheth (.06)
As described in previous blogs, the glorious day the SkunK much looks forward to is the day the GERS 50 day moving average moves through the 200 day average. Then and only then will he know he made the right decision to buy here. He thinks he did. But if/when it does, all will be confirmed for him. As predicted the 200 day MA has moved below a dime to .093, while the 50 day moving average has just started to climb in the last couple days, now standing at .033. From now on I will weekly announce or cover "the spread". That "spread" being the difference between the two MAs - or .06 today. I have calculated that this will go to zero and the cross will occur on my birthday. Since I don't pass personal information about anyone on this blog, now I can't tell you what that day is. Guess I'll tell you if I was right or not when it happens. :`)

What the hey is this?

0.035 3,343,333 OBB 15:44:12

I swear (or affirm) "With all this volume, if we don't have any dilution in the 3Q report , I will chug-a-lug that bottle of corn oil I keep hidden for just such occasions." That will definitely clear my mind. (and everything else!)

Man, we have seen some sales in the last hour of trading - but this baby was off the charts! That trade was worth $117,016.66. To give you an idea how big this 3,334,333 trade was, last month we traded 3,382,033 - for the whole bloom'ng month!! We have never traded over 4 million shares in a month this year. We will this month. 3.78M in a day. Three other days over a million shares traded. What really surprised the SkunK here was the recovery after this sale. If this was simply an equity dump by the company to cover the checks clearing on Monday, or by Yagi to cover convertible debt, there were plenty of happy buyers. At the close 15 minutes later, the ask was at .06, with only two other market makers at .07 and then no other sellers till a dime. The bid was at .05 with two other market makers above the 3.5 just traded. Heck, I can't say for sure, but having exchanged a months worth of shares in a single trade without blinking an eye, and coming up on the meat of our 5 day "sweet period", I gotta think we got at least a couple days left in this run.

PS. Last couple days I have locked in some profits and am in the black on the Trading Posts in the right column.

More, SkunK

Tuesday, October 28, 2008

Patterns? or Apophenia?

Interesting things happen when you study interesting things. Sometimes you find patterns. Sometimes they mean something and sometimes they are just coincidental. You decide. I have noticed an interesting pattern when it comes to the movement of the GERS stock price. It seems that we are likely to hit our high for the month on either the last trading day of the month or within the first four trading days of the month [5 day period]. This was true in seven of the last ten months: March (2nd), May (1st), June (2&3), July (4th), August (1st), Sept (last), October (2nd)*. If this pattern holds then there is a 70% chance we will see the high for next month either Monday thru Thursday next week or the last trading day of November.

Why does this happen? Is it more volume? No. The highest monthly volume day is only in the noted 5 day period a predictable 30% of the time. None of the highest monthly volume days coincide with high price for the month day.

Is it less volume that causes the higher price? Not really. In 90% of the cases the lowest volume day was between the 9th and the 19th trading day of the month. Only in May was the lowest volume day in the [five day period], and that happened to coincide with the high for that month.

Conclusion
We have increasing been hitting our monthly high on either the last trading day of the month or the first four days of the month. This is less than a quarter of the trading days but has been true 7 of the last ten months - or 70% of the time. It has been true six of the last six months - or 100% of the time. The high price days seem to have a reverse linkage to extreme volume (either high or low volume).

Synchronicity
Am I grasping for any link in my mind and my perceived world of stock price variation? Am I committing a statistical Type I error? Am I suffering from the heartbreak of apophenia? Are apophenia and creativity two sides of the same coin?

Most importantly - will I make some coin in the [five day period] quickly approaching? lolo and as always - make your own decisions and good luck to you.

SkunK

*Only earlier in the year, January (7th), Feb (11th) and April (7th), did we see a substantial deviation from this pattern. The (numbers) above are not the day of the month - but the number of trading days into the month. The high is based on the price at the close. We average 21 trading days a month so the 5 day period the SkunK singled out (last day and the first four trading days) should have by random chance only about 25% of the monthly highs rather than the 70% observed. Whether this signals repeatable human behavior or radom chance is for you to decide. This is published with three days left to trade in Oct.

Sunday, October 26, 2008

Deadline Met and Exceeded

The COES deployment schedule is now 5 by EOY. The SkunK believes from the last CEO information that we have basically four in production - or the forth now coming on line. In any case by the time we receive word in the 3Q (NLT 17 November) we should have four COES
producing corn oil at a rate of 3 gallons per minute - 24/7. At $4.00/gallon sold as biodiesel that is 3gallons x 4COES x 60minutes x 24hours x $4.00 = $69,120 dollars a day in revenues! Now when you start figuring that COES number in the double digits - you can just stop asking why the SkunK is here!

Although there has been some slippage in COES deployment, here is one deadline we have already exceeded for the year. In order to fulfill the agreement with the inventors we needed to have 3 COES by EOY and basically 5 more per year for the following three years - until we hit 18:

"Effective December 15, 2007, the Company executed an Amended and Restated Technology Acquisition Agreement (the "TAA") with Mean Green Biodiesel of Georgia, LLC (f/k/a Cantrell Winsness Technologies, LLC), David F. Cantrell, David Winsness, Gregory P. Barlage and John W. Davis (the "Inventors").

The amendment changed the method of calculating the purchase price for the Company's corn oil extraction technology (the "Technology"). The TAA, as amended, provides for the payment to the Inventors of a one-time license fee of $150,000 per 1.5 million gallon per year system (a "System") built and commissioned based on the Technology plus an ongoing royalty of $0.10 per gallon of corn oil extracted with the Technology.

The Company is required to sell, market, deploy or in any way cause the initiation of operations of a total of three Systems on or before December 31, 2008, a total of eight Systems on or before December 31, 2009, and an additional five Systems per year up to a total of eighteen Systems, at which point the Company has no continuing commercialization requirement." p.80 2007 Annual Report.

EOY FORECAST: "working"
Long Range Forecast: Feb 2010: **$3.72

**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)

Friday, October 24, 2008

Nominative Determinism* Among Montana Millers

The SkunK thought he might be on to something when he stumbled on this article saying that Paul Miller had started a new business that crushed oilseed and made biodiesel. Knowing that Paul Miller was the CEO of Sustainable Systems (100% owned by GERS), he thought he had just found some NEWS! What he confirmed was one of the ways scuttlebutt begins:
***************
September 16th, 2008
Montana Company Offers On-site Seed Crushing, Biodiesel Brewing
Posted by John Davis
This story from the Billings Business News says Paul Miller owns Big Sky Biofuels, which offers on-farm crushing and biodiesel conversion for farmers who have raised oil-seed crops:
“The idea is to encourage sustainable production and to have the farmer grow oilseed crops capable of fueling their operations,” Miller said.

***************
Now if you go back to the source story that this article references you notice two things:
***************
Big Sky Biofuels offers on-farm seed crushing, biodiesel conversion
By Tom Howard

If Paul R. Miller has his way, farmers will soon begin powering their tractors and combines with fuel that they grow themselves. Miller is owner of Big Sky Biofuels, a startup Billings company that will offer on-farm crushing and biodiesel conversion for farmers who have raised oil-seed crops.


***************
First of all the man's name is now Paul "R" Miller - this makes quite a difference since ours is Paul "T" Miller who also earned a PhD. (Although he rarely uses his title). Who would have thunk that their are two Paul Millers in Montana - a state with few speed limits and less people - and both of the Paul Millers making a living crushing seed and creating biodiesel!
Another astounding coincidence is their common aptronym surname denotes their line of work. After all, they both mill and are both "millers". (grrroan - you only get this stuff here folks!) This opens up the whole field of nominative determinism* - and were they (are we all) influenced by the 'compulsion of the name'? Synchronicity?? (C. Jung-right again)

The second thing is the original article has no timeline. So although the second article was just a month old - it is based on an article - and who knows how old that is?

In conclusion:

The second author dropped the middle initial of Paul Miller thinking it was just "Extra". If he was more aware of his local businessmen he might have known that it essential to differentiate between these two public men in the same industry. This could have led to the false assumption that Paul T. Miller, PhD., had quit Sustainable Systems and had started a small business. Stuff like this happens all the time and leads to bad decisions based on bad information . . .

SkunK,
more
*Nominative determinism refers to amusing instances where people's names suggest key attributes of their jobs, professions, or lives, with the implication that their names have influenced their lives. http://en.wikipedia.org/wiki/Nominative_determinism http://homepage.mac.com/chapmandave/aptonyms/en/weather.html

Saturday, October 18, 2008

The COES "Purchase Option"

The SkunK would like to thank Mr. Kreisler for taking the time to answer some questions in the previous blog. As an investor I would like to see communications increase. Some of the highlights of the recent communications included:

We have not issued any new convertible debt since 2007 and we have no intention of doing so here.

Importantly, these facilities alone can be expected to produce transparent, hedged, recurring cash flows at levels more than sufficient to service all of our current obligations

Our hedged margins give us the ability to remain profitable (at throughput levels above our break-even point) in the face of market movement that would be fatal to a conventional producer.

We are not in discussions to merge with or to acquire or to be acquired by any company.

We have no plans to reverse split the stock.

There will be no sale of our intellectual property.

****************
The CEO explained that although we are not selling our intellectual property, we currently have one COES that is running under our "Purchase Option". The Purchase Option COEs is paid for by our client and in return they get a better price for the corn oil that GERS buys from them. While this is not a new program, it is "news" that a current COES Partner has chosen it. The SkunK is sure the sale will be a welcome addition to our cash flow. Here is the "Purchase Option" explained from the GERS web site.


"We offer two extraction programs: 100% Financing and Purchase. In today’s market (with diesel spot at about $3.33 per gallon), the price we pay for the extracted oil equates to about $0.33 per pound or about $2.50 per gallon for clients that purchase our systems, or about $0.25 per pound or about $1.86 per gallon for clients that take advantage of our 100% financing option. This equates to between $9 to $17 million in additional income for a typical 100 million gallon dry mill ethanol facility. In addition, removing oil from the DDG can also be expected to reduce drying costs, reduce emissions of greenhouse gases and volatile organic compounds and to enhance the marketability of the remaining DDG as more de-fatted DDG can be included in the daily rations fed to beef and dairy cattle. Additional information on our 100% financing program and our purchase option is available upon request."

http://www.greenshift.com/product_desc.php?mode=1

***************
What happened to the Stock Price?

Since the 6th of October the volume has exploded. The 9th, 10th and 13th had volumes over 1M shares traded. The typical day over the ten day period had the stock at strong volumes throughout with steady or trending higher prices. Then in the last half hour of trading the market would be flooded with sell orders and huge volumes - driving the price down. A notable exception to this was this Friday, without the flood of sells at the end - the price remained strong - actually gaining 40% in the last half hour of trading and up over 97% for the day.

What is causing this?

The obvious short answer is the inflationary effect of more shares on the market. More shares for sale = lower price. The three month average vol is about 150K. That means that of the 8M shares traded in the last ten days, about 6.5M were "extra" or "unexpected" shares. The average close over the last ten trading days was .01185 - meaning that if these shares were payment of debt - we paid off about 77K. While there maybe a half dozen possible scenarios - the most reasonable one to the Skunk today is YAGI is converting unpaid debt to shares and selling them. Does he know this? NO. Just my best guess. Many - including the SkunK - expected to see a slow drift up in shares OS over the last six months. So far we have all been wrong. We may be wrong again. Remember this is not a new convertible debenture - this would be an old one being converted. Judging by my best guesses in the last blog (before the CEO gave us some current information) - you might want to come up with your own best guess. [play laugh track at SkunK's expense here]

"On the first business day of each month, the Company must pay $250,000 to YAGI. If the Company fails to make the payment, YAGI shall be entitled to convert that amount of accrued interest and principal into common stock of the Company at a conversion price equal to the lesser of (a) $1.25 or (b) 90% of the volume weighted average price for the twenty trading days preceding conversion. " p.18 Q2

Since GERS in this scenario is credited with 90% of the 20 day vol weighted average price - we would have actually been credited with the period only 10 days ago with the PPS trading between 3-6 cents. 90% of the NON-weighted average price (YOU do the weighted math!) for the last 20 trading days (based on the close) was .024 - or multiply times the 6.5M extra shares - we now are credited with about $156K. Did GERS make a partial payment of 100,000? - and is this the end of dilution? We should have a good idea by 4:15 EST Monday.

As to whether Skunk is correct about the 6.5M shares being YAGI dilution? - we should know that at the release of the 3Q by 17 November. Against all odds we have had NO Convertible Debenture DILUTION since 4 April 2008 when we had 66,200,526 shares and we then added 20M shares for the down payment on NextDiesel on 15 May. We actually CONTRACTED to 85,031,348 shares on 19 May and 82,751,515 shares on 19 August.

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

Perspective?

Remember the 30th of September?- neither do I. The last trading day of last month we traded only 170,093 shares and closed at .051 cents. Ten days later we closed at .0062 with 1,027,457 shares traded. One thing we need to keep in perspective is that on that first "sleepy" day $8675 traded hands - while the "exciting" million share day only traded $6370 - a decrease of 36%!

********************
Dilution

No one likes to see dilution of the Shares Outstanding. Not the Company, not the stakeholders and especially not the shareholders. But to listen to some of the experts around, you would think they try people at the Hague for War Crimes over it. Does anyone here know why Companies Sell Stock? Do they do it so they can spread the wealth around? (And the SkunK is the one credited with listening too much to Investor Relations!!) Do they do it so they can file a hundred filings and follow a few thousand regulations? I don't think so! They do it to raise capital when they need it. If someone does not realize this - then they have no business investing outside the protective wings of the FDIC. To Summarize: Dilution=bad. Bankruptcy=worse. Now you make the call.
******************

Perspective on Dilution

As I hinted earlier GERS has really had a handle on OS dilution since April. Greenshift has 500M total OS available to them - so we are presently only using about 17% of our potential OS shares. That is why any talk of a reverse split in the foreseeable future is getting way ahead of ourselves. So as not to have you think I am sweeping our more ancient history under the rug - lets look at OS history over the last two years - with both eyes open. "Real dilution" is what happened between November 2006 and May 2007. Shares OS increased by about 65% in 6 months. In stark contrast to the last six months where (if you factor out the 20M share NextDiesel down payment) - GERS actually contracted its shares outstanding by 4%.

But SkunK? - Some of the same people who were for the stock during the huge expansion in shares are now against it - and claim one of the reasons they are against it is present dilution??

Don't Ask the SkunK what is going on in (OPN) other people's noggins. He has more than enough trouble trying to explain what he thinks. I can give you the facts and the stats - and you can decide for yourself:

249,828,213 15 Nov 2006

333,345,000 13 April 2007

410,660,805 21 May 2007

483,671,558 14 August 2007

497,548,271 14 Nov 2007 (nearing 500M Cap)

*****50/1 Reverse Split&Consolidation 12 Dec 2007

10,000,000 Shares for Clean Tech Shareholders Holders

21,800,000 Shares for Greenshift(old) Shareholders

*****31,800,000 Shares TOTAL OS after Consolidation and R/S

Changed Name to Greenshift Corp 12 Feb 2008

66,200,526 4 April 2008

20M shares down payment on NextDiesel 15 may 2008

85,031.348 19 May 2008

82,751,515 19 August 2008

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

With the Stock price just bouncing off its all time low - I thought "Kind of Blue" seemed an appropriate theme this week. Here is a little Miles Davis' "Freddie Freeloader" off the classic jazz "Kind Of Blue" Album from the late 50's.

http://www.npr.org/templates/player/mediaPlayer.html?action=1&t=1&islist=false&id=10862796&m=11303603

More, SkunK

Saturday, October 11, 2008

A Message From The Greenshift CEO

A Message From Mr. Kreisler

A comprehensive update will be provided when we file our next quarterly report. In the meantime, the following is in response to some of your questions.

Yes, the activity in the financial and commodity markets has taken its toll. While this and the derivative impact on our operations will be discussed in greater detail in our next quarterly report, the bottom line for now is that some of this activity decreased our access to previously planned short-term sources of liquidity.

We would have solved these issues by completing convertible debt financing with the pre-cash flow structures we used in the past were it not for the potential of our biofuel production operations to produce near-term positive cash flows. We have not issued any new convertible debt since 2007 and we have no intention of doing so here despite the fact that these options have been and remain quite available to us.

Instead, we stayed the course and marshaled our resources around the commissioning process of COES#3 (Marion), COES#4 (Riga) and COES#5 (Albion), and covering the needs of our biodiesel refinery (which we have been intentionally operating at a fraction of capacity since July due to the prohibitively high cost of conventional feedstocks). COES#3 is operating today at slightly less than our 1.5MMGY nameplate (without the upgrade), COES#4 is currently being commissioned and is expected to produce oil later this month, and COES#5 is on schedule for a December commissioning. Importantly, these facilities alone can be expected to produce transparent, hedged, recurring cash flows at levels more than sufficient to service all of our current obligations.

While none of this would have been possible without the relentless and heroic efforts of our design, manufacturing, commissioning and production teams, or the extraordinary support of our vendors and clients, we owe the reliability of these cash flows, and our ability to push through despite the market volatility, to the structure of our business model.

Our business model is also an important part of what distinguishes GreenShift from other biodiesel producers. As you correctly noted, financing for producers refining soy or another conventional feedstock has dried up. This is mostly because conventional producers are subject to significant commodity risk.

Our hedged margins give us the ability to remain profitable (at throughput levels above our break-even point) in the face of market movement that would be fatal to a conventional producer. Our value proposition to a prospective financing source is thus different from that of a conventional producer: with our extraction technology, process know-how, internalization of refining, and long-term hedged feedstock ownership, we have insulated GreenShift from the risks a conventional producer faces and demonstrated our ability to service debt, generate returns on capital and produce significant surplus cash flows.

We are staying the course and will continue to execute on the strategy outlined in our second quarter report. Responses to some of your other specific questions follow:

1. COES#6 and COES#7 are delayed and are now scheduled for commissioning in Q1 2009.

2. We are not selling the COES technology in the sense your question implies. The ‘purchase option’ version of our business model allows an ethanol client to purchase the COES equipment and pay us to build the COES facility at their plant while we retain the long term right to buy the extracted oil at a higher percentage of diesel spot. This is a sale of equipment and construction services only and it does not include any sale of technology. We only have one of these contracts today. There will be no sale of our intellectual property.

3. We are not in discussions to merge with or to acquire or to be acquired by any company.

4. We have no plans to reverse split the stock.

5. YA Global and Stillwater have been exceptional partners. Given the probability and imminence of our production cash flows, the best and most cost-effective path forward for all of our stakeholders is to facilitate the completion of our current and contracted construction projects.

Friday, October 10, 2008

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)

Saturday, October 4, 2008

Extension of the Biodiesel Income/Excise Tax Credit

The SkunK can give another reason for the nice run in GERS stock lately. Look at what he just gleamed from the glistening innards of the Emergency Economic Stabilization Act signed into law Friday. The biodiesel tax credit was extended a year. This will provide additional stability and money to the industry. Since GERS creates a feedstock and then the biodiesel - and sells that biodiesel into the market - It should help GERS directly.

The Act also now treats all biodiesel the same - giving some stimulus to the advanced technologies GERS has in development. It also limits the benefits to fuels produced in the good ol'USA. We should be hearing shortly from the more ed-u-cated elites who took the weekend off - on the details of how this will help our biodiesel industry - but remember u heard it here first.


SEC. 202. Credits for biodiesel and renewable diesel.
(a) In general.—Sections 40A(g), 6426(c)(6), and 6427(e)(5)(B) are each amended by striking “December 31, 2008” and inserting “December 31, 2009”.
(b) Increase in rate of credit.—
(1) Income tax credit.—Paragraphs (1)(A) and (2)(A) of section 40A(b) are each amended by striking “50 cents” and inserting “$1.00”.
(2) Excise tax credit.—Paragraph (2) of section 6426(c) is amended to read as follows:

“(2) Applicable amount.—For purposes of this subsection, the applicable amount is $1.00.”.


http://domesticfuel.com/2008/09/24/biodiesel-tax-credit-part-of-extension/

Uniform treatment of diesel produced from biomass.
—Paragraph (3) of section 40A(f) is amended—
(1) by striking “diesel fuel” and inserting “liquid fuel”,
(2) by striking “using a thermal depolymerization process”, and
(3) by inserting “, or other equivalent standard approved by the Secretary” after “D396”.


END of "Splash and Dash"

Limitation to biodiesel with connection to the United States.
—No credit shall be determined under this section with respect to any biodiesel which is produced outside the United States for use as a fuel outside the United States. For purposes of this paragraph, the term ‘United States’ includes any possession of the United States.”.

The bill would end the practice of shipping biodiesel through the United States to collect the credit, said a Senate Finance Committee spokeswoman, adding "it will be the end of splash and dash as we know it."

In "splash and dash," tankers loaded with foreign-made biodiesel stop at U.S. ports to pick up enough conventional diesel fuel to qualify for the biodiesel credit before sailing for a final destination.

The addition of 9,000 gallons of conventional diesel would be enough for a 9 million-gallon tanker to collect the credit on its entire cargo, according to one description.

http://www.reuters.com/article/GCA-GreenBusiness/idUSTRE4927AZ20081003?pageNumber=1&virtualBrandChannel=0

********
Here is the 400+ page bill in all its detailed glory:
http://thomas.loc.gov/home/gpoxmlc110/h1424_eas.xml#toc-id4B56FDAA8A8E473194A471E49BC90066
********

PS - Here is more help for the Ethanol Industry upon which our COES depend. More and more Ethanol Plant revenue additions include both Carbon Dioxide capture and Corn oil Extraction - Here is also direct help for the Carbon Dioxide capture:

SEC. 45Q. Credit for carbon dioxide sequestration.
“(a) General rule.—For purposes of section 38, the carbon dioxide sequestration credit for any taxable year is an amount equal to the sum of—
“(1) $20 per metric ton of qualified carbon dioxide which is—
“(A) captured by the taxpayer at a qualified facility, and
“(B) disposed of by the taxpayer in secure geological storage, and

“(2) $10 per metric ton of qualified carbon dioxide which is—
“(A) captured by the taxpayer at a qualified facility, and
“(B) used by the taxpayer as a tertiary injectant in a qualified enhanced oil or natural gas recovery project.

SkunK

Friday, October 3, 2008

Milton WI COES UPDATE




SkunK Alert ****Newsflash****



United Ethanol in Milton Wisconsin provides a COES Update in their just released October Newsletter

SkunK Note: The information provided in the current newsletter parallels information previously released by GERS. Milton is listed in the last Quarterly Report as a Q1 '09 completion. It was also mentioned by Mr. Kreisler on this blog as a "possible '08 EOY Completion. Milton had previously released in a newsletter that "Initial tie-ins" were complete.


**The equipment for a corn oil extraction system has been ordered by our partner in this project, GS Clean Tech, Chicago, Ill. Read inside for further information on these projects.**



"In addition to providing another alternative fuel source through biodiesel, corn oil extraction has other benefits. This new process will increase run time by decreasing the frequency of cleans on the evaporation process. It will also improve the quality of the dried distiller’s grain (DDG) by removing the crude corn oil that currently is being dried. Assistant manager of ethanol operations, Dan Shickles, explained that if the oil is removed first, the plant does not need to run the outlet temperature on the dryer as high. There will also be less accumulated build-up in the dryer that currently occurs. While the process does not remove all the oil, it will be a significant improvement and provide another source of revenue. Construction of the corn oil extraction system will be done by GS Clean Tech, of Chicago, Ill. Norm Scheels, plant engineer, expects the foundations to be poured yet this fall. The equipment is on order and will be shipped from Sweden after Thanksgiving. “The weather will play a critical role in how quick we get this up and running,” Norm said. The location of the corn oil tanks has not yet been determined, as Norm explained that thought to future United Ethanol advancements and new technologies needs to be taken into consideration. "



Many of the questions concerning the trouble with the local Department of Natural Resources are also addressed in the "Greetings from the CEO" David Cramer, President and CEO

Here is the Entire Newsletter:



http://www.unitedethanol.com/images/E0135601/UEnwsltrOct2008forWeb.pdf





2 Pictures taken/Lightbeam/i-hub/March 08







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