Friday, February 27, 2009
General Electric Cuts Dividend
http://online.wsj.com/article/SB123573389322793621.html
SkunK
NOVA Idles its BioDiesel Plants/Misses payments
(Todays price is as I write, I suspect it may change throughout the day!)
Good Hunting,
Wednesday, February 25, 2009
13% Ethanol Blend
Touting the benefits of alternative fuels, the governors pressed the Environmental Protection Agency to approve a waiver allowing a higher percentage of ethanol of 13 percent to be blended into gasoline. The U.S. currently allows gasoline to contain 10 percent ethanol.
Culver said the EPA would "take a very serious look" at the waiver and he was optimistic they would allow the waiver to promote biofuels.
The governors said it would help the U.S. meet a renewable fuels standard that will require 36 billion gallons of biofuels to be blended into gasoline by 2022 and benefit rural economies instead of increasing dependence upon foreign oil.
http://www.businessweek.com/ap/financialnews/D96HMB580.htm
and
http://www.dtnprogressivefarmer.com/dtnag/common/link.do?symbolicName=/ag/blogs/template1&blogHandle=ethanol&blogEntryId=8a82c0bc1f3e98a0011fa9690d89047f
Good hunting,
SkunK
Tuesday, February 24, 2009
More Signs of Biofuel Bottom?
Under rules approved by Judge Brendan Shannon, Valero Energy Corp. of San Antonio will open bidding for five of VeraSun's ethanol plants at $280 million.
http://www.farmfutures.com/ME2/dirmod.asp?sid=CD26BEDECA4A4946A1283CC7786AEB5A&nm=News&type=news&mod=News&mid=9A02E3B96F2A415ABC72CB5F516B4C10&tier=3&nid=6F06076C6EE14889853EB93435486668
*******
Wisconsin's Ethanol Boom Sputters, Stalls
http://www.dtnprogressivefarmer.com/dtnag/common/link.do?symbolicName=/ag/blogs/template1&blogHandle=ethanol&blogEntryId=8a82c0bc1f3e98a0011fa43405c80443
*******
Evansville Biodiesel project halted
Two years ago, Gov. Jim Doyle announced $250,000 in public infrastructure improvements to support a biodiesel plant planned for Evansville, in Rock County. The plant would have turned soybeans into a diesel-fuel additive and would have created about 56 jobs.
A few months after the announcement, construction of the North Prairie Productions plant came to an abrupt halt because of rapidly rising soybean costs and the decision by a bank to withdraw its loan commitment.
Investors received 35% to 50% of their money back, and the project's assets are being liquidated. "Long term, I think biodiesel is still a viable business. But it's tough now," said Mike Robinson, North Prairie president.
*******
Some places (Just in Wisconsin) where plans for ethanol plants have been canceled or placed on hold:
Dover, in Racine County
Arena, in Iowa County
Belmont, in Lafayette County
Sparta, in Monroe County
Reedsburg, in Sauk County
Wisconsin Rapids, in Wood County.
********
Under the "SkunK has 'No Comment' Section"
Muslim cleric decries biofuels as sinful
http://www.cleantech.com/news/4196/muslim-cleric-says-biofuels-are-sin
SkunK
Renewable Energy Loan Guarantees and Tax Credits
23rd February 2009
In his weekly address, US President Barack Obama acknowledged the role of renewable energy in the US economy, and outlined measures including loan guarantees and tax credits to stimulate the sector.
He said, ‘Earlier this week, I signed into law the American Recovery and Reinvestment Act - the most sweeping economic recovery plan in history.
‘Obama continued, ‘Because of what we did, companies — large and small — that produce renewable energy can now apply for loan guarantees and tax credits and find ways to grow, instead of laying people off; . . . '
REST OF ARTICLE HERE:
http://www.newenergyworldnetwork.com/renewable-energy-news/by_technology/energy_efficiency/obama-highlights-role-of-renewable-energy-as-part-of-economic-recovery-package.html
*********
Renewable Energy
GE Energy Financial Services is rapidly growing and diversifying its portfolio of more than $4 billion in renewable energy assets. GE has a long track record of investing in wind, solar, biomass, hydro and geothermal power assets. In addition to renewable power assets, GE's renewables finance experts are examining growth opportunities in biofuels, greenhouse gas offsets, energy efficiency, and many other sectors.
Note the representative transactions at the bottom of this site:
http://www.geenergyfinancialservices.com/investment/investfocus_renew.asp
Note this representative GE deal: GE takes a 70% Equity holding and managing unit 30%. Hmmmm.
http://www.geenergyfinancialservices.com/press_room/press_releases/BabcockReleaseFeb122007_FINAL.pdf
COOL GE VIDEO: http://www.geenergyfinancialservices.com/video/GEproject.ae_medium.wmv
Good Hunting,
Friday, February 20, 2009
Early as April or May?
"Mr. Chu appeared more comfortable Thursday answering questions about how his agency plans to distribute roughly $40 billion provided to it under the recently passed economic-stimulus legislation. He said the agency intends to disperse 70% of the money by the end of next year. By as early as April or May, he said the agency would start awarding loan guarantees to companies implementing alternative energy projects that would otherwise have trouble raising financing from private sources."
http://online.wsj.com/article/SB123508025907226643.html?mod=article-outset-box
Good Hunting,
SkunK
Thursday, February 19, 2009
75% Biodiesel/21% Ethanol Capacity Idle. USDA pushing EPA for more ethanol in gasoline
The SkunK recommends raising the rate to 12% this year, 15% next year and to 20% in two years, the SkunK believes this would have a tremendous positive impact on the ethanol industry and the entire Midwest economy. Now I sit and wait for them to ask me.
http://uk.reuters.com/article/oilRpt/idUKN1029043720090210?pageNumber=1&virtualBrandChannel=0
*******
You do not have to look far for proof of a suffering Biofuels Industry:
Seventy-Five percent (75%) of Biodiesel capacity sits idle as biodiesel plants close:
http://www.biodieselinvesting.com/biodiesel-archives/2009/01/22/with-u-s-biodiesel-capacity-only-at-25-percent-low-demand-for-oil-forces-northwood-mills-shutdown/
Some 21 percent of U.S. ethanol capacity has been idled since peaking sometime last year, according to Archer Daniels Midland. After filing for bankruptcy protection in October, VeraSun Energy Corp. has shut 12 out of 16 ethanol plants. The company, which used to be the second largest U.S. producer of the fuel, suffered from costly hedging bets on the price of corn and the credit crunch.
Since then a string of plants have filed for bankruptcy protection, including a subsidiary of Panda Ethanol Inc., Northeast Biofuels and, last week, the private Wisconsin distiller Renew Energy LLC. (sister plant to Utica, 1st COES - the utica plant is unaffected.)
http://money.cnn.com/2009/02/03/news/companies/adm_ethanol.reut/index.htm
Also, less than a month after SkunK reported Fulton NY Ethanol Plant filed chapter 11 - it sells its unprocessed 800,000 bushels of perishable corn on hand for $2.6 million. This is the location of our 6th and 7th COES in our planned deployment.
http://www.biodieselinvesting.com/biodiesel-archives/2009/02/18/bankrupt-northeast-biofuels-unloads-26-million-worth-of-unused-corn/
and
http://www.9wsyr.com/news/local/story/Volney-ethanol-plant-sells-off-all-its-corn/G5uygql20k-M177wFRhSiA.cspx
*********
Otter Tail Ethanol (Greenshift COES with a 30 November planned completion?) says in their current newsletter that they are going to their membership trying to raise additional monies to continue operations through this bad spell. If it was a public company it might be called "dilution", since they are selling additional pieces of the same sized pie. In LLC land: "The equity offering provides current members a unique opportunity to leverage their original investment, . . ." Wish them the best of luck.
http://www.ottertailethanol.com/documents/09-02-01InformationRelease.pdf
*******
Thanks to Peanut 93 for his RB link with the ominous title:
Is Alternative Energy Dead?
(SkunK says NO! But this medicine hurts too!)
http://seekingalpha.com/article/121458-is-alternative-energy-dead?source=yahoo
In fact a recent article dated 13 Feb it says that
"U.S. weekly ethanol margins rise to above break even"
in fact 5 cents a gallon in profit is what average producers can now expect. http://www.reuters.com/article/GCA-GreenBusiness/idUSTRE51C6DT20090213
SkunK Conclusion. I think we are near the bottom of the biofuels market. With mandates increasing, margins should continue to improve. An increase in ethanol mandate from 10 to 12 or 15% at the pump would really spike demand.
In the meantime the Biofuels industry is struggling to stay alive. Greenshift is no exception. This is not just a wash out of weak hands - that happened months ago. This is now a test of good and great companies. The SkunK reported how soy diesel plants lost their margins. Then biodiesel plants fell like snowflakes. Seventy-five percent of biodiesel plant capacity is idle. Twenty -one percent of Ethanol production is idled. The VeraSun giant proved that it takes more than just credit lines and production to stay alive.
Those companies that can weather this storm will be left with an expanding market share in an expanding biofuels market. Whether our little under capitalized Greenshift makes it or not at this point, is (and always has been) open to honest debate. The SkunK has his opinion and I am sure so does everyone else. The fact that it still here at all, however, turns to rubbish all the arguments I have read over the past twelve months that Greenshift is some kind of make believe company without real assets - ready to collapse at any second. Well, a lot of seconds have ticked by in the last 4 quarters and a whole lot of good companies have already gone under.
Whatever happens now, will happen to a company that has outlasted many. The recent Adrian newspaper article has NextDiesel stopping production soon and construction liens on the Riga COES. It has no news on the GE CBE or other financing deals. Since this and other industries are suffering nationwide, few of those not working at NextDiesel will find quick reemployment in their field. I would expect a larger than normal percentage will be available for reemployment when the economics can justify it.
With 75% of biodiesel capacity nationwide idled - we could not be making money hand over fist if we just did something "different". To use an ol'bubba phrase, "It's the Economy Stu......!"
I tell ya, this job as a blogger for a penny stock, is like being the umpire for a little league game, without all the perks. Heck, I don't even get a uniform . . .
SkunK
Short Short Report
Although a large number considering our brief history, it is $2,653.22 worth of shares at today's close at a penny. I figure this is a long who is hedging a portion of his shares - not a pure short at these low prices. The "upside" (fall in price) is so small, and the risk of having to cover at a dime would so outweigh the benefit of any drop from a penny.
Again, before anyone gets their shorts in a bunch (too late?? lol), with today's volumes, the shortee in this case could not really affect the price long term even if he had to cover quickly. The one important thing to keep in mind when you see a quarter million shares shorted in GERS land - not everyone is looking for the pps to go up.
***********
Additional Information is at these links
http://www.pinksheets.com/pink/quote/quote.jsp?symbol=GERS
and
http://www.shortsqueeze.com/?symbol=gers&submit=Short+Quote%99
Good Luck to all Investors
SkunK
Wednesday, February 18, 2009
Word From GreenShift
Dear Sir:
We are working to properly capitalize our construction and production activities as quickly as possible. Additional disclosure will be provided when appropriate.
Regards,
Investor Relations
GreenShift Corporation
*********
Good Luck to All Investors
SkunK
Tuesday, February 17, 2009
NextDiesel biofuel plant faces shutdown
I have always tried to get the news to you - good or bad - FIRST. Here is some breaking news that I certainly do not enjoy passing on.
SkunK
*********
Tue Feb 17, 2009, 05:30 PM EST
ADRIAN, Mich. -
The NextDiesel biofuel plant here may shut down operations in a few weeks if market conditions do not turn around to make it profitable again, the company’s CEO said Monday. “We have every intention of sticking with this,” said Terry Nosan, chief executive officer of Biofuels Industries Group, based in West Bloomfield. The current cost of inputs to make the company’s product and the market price of diesel fuel make it impractical to continue production for now, he said.
The company has stopped buying corn oil and other material it turns into diesel fuel, he said. The workforce of 26 people has been trimmed and production geared back while the plant uses up its remaining stock of material. When that runs out in two or three weeks, Nosan said, the company will have to decide what steps to take next.
Gov. Jennifer Granholm, U.S. Sens. Carl Levin and Debbie Stabenow, and U.S. Rep. Tim Walberg joined local government officials in ceremonies that opened the NextDiesel plant to high expectations in August 2007. “No one more than us,” Nosan said of the high hopes held at that time for the alternative fuels industry.
“But it’s been a very difficult year for everyone, including us,” he said. Agricultural commodity prices shot up, raising the cost of producing biofuels, then the cost of competing petroleum fuels came down with the dramatic fall in oil prices. At the same time, demand for fuel has contracted with the economy.Nosan said he is hoping the federal economic stimulus package just passed by Congress and a traditional boost in economic activity in the spring will improve market conditions enough to make the plant profitable again.
The downturn in the biodiesel market also pinched off payments for a new corn oil extraction facility installed at the Global Ethanol plant in Riga. The facility was installed by NextDiesel’s parent company, Greenshift Inc. of New York.Construction liens were filed against the equipment at the ethanol plant since the work was completed in December.
Diversified Mechanical Services of Comstock Park filed a lien on Jan. 19 for $964,085 in unpaid bills from its $1.3 million contract. Sieler Construction Inc. of Blissfield filed a lien on Dec. 23 for $90,122 it is owed from a $217,000 contract.Nosan said he does not know the status of Greenshift’s corn oil facility since NextDiesel stopped buying the product. The construction liens against Greenshift indirectly affect Global Ethanol, which counted on the corn oil production and a new CO2 facility built at the Riga plant last year to add to its revenue stream.
Ethanol producers have suffered a market drubbing similar to biodiesel in the past year.Global Ethanol, which has a plant in Iowa as well as the Riga facility, reported $10.7 million in net profits from $305.8 million in gross revenue for the fiscal year that ended June 30, 2008.
Operations stopped being profitable after that, said the company’s last newsletter released in August.“Although the ethanol industry appears to be in turmoil at the moment, the current state of affairs are providing the required ethanol industry changes which should provide for more positive business conditions in the near future,” the company stated on its Web site.
Go here for entire article
http://www.lenconnect.com/news/x1658742869/NextDiesel-biofuel-plant-faces-shutdown
Here is link to
Diversified Mechanical Services of Comstock park
http://www.diversifiedmechanical.com/
Sieler Construction Inc. of Blissfield
7779 Thompson HwyBlissfield, MI 49228-9736
(517) 486-3050
Sunday, February 15, 2009
Details seem to look good so far. . .
o Provides grants/(energy tax credit?) of up to 30 percent of the cost of building a new renewable energy facility to address current renewable energy credit market concerns.
Above is the summary: Here is what it actually says:
IN GENERAL.-For purposes of section 46, the qualifying advanced energy project credit for any taxable year is an amount equal to 30 percent of the qualified
investment for such taxable year with respect to any qualifying advanced energy project of the taxpayer.
Well SkunK, does it pertain to GERS????
You Decide:
"(A) IN GENERAL.-The term 'qualifying advanced energy project' means a project-
(i) which re-equips, expands, or establishes a manufacturing facility for the production of-
"(IV) property designed to capture and sequester carbon dioxide emissions, (BioReactor?)
"(V) property designed to refine or blend renewable fuels. . . (COES & NEXTDiesel & Sustainable Systems?)
Does BIG OIL get all the money?? NO.
"(B) EXCEPTION.-Such term shall not include any portion of a project for the production of any property which is used in the refining or blending of any transportation fuel (other than renewable fuels).
Is this a one time shot? NO.
"(C) PERIOD OF ISSUANCE.-An applicant which receives a certification shall have 3 years from the date of issuance of the certification in order to place the project in service and if such project is not placed in service by that time period, then the certification shall no longer be valid.
I BET GERS will not be selected!! Here is the Criteria - Although we may not score the highest in EVERY category, the SkunK sees no insurmountable roadblocks to a decent overall criteria score - do you?
"(3) SELECTION CRITERIA.-In determining which qualifying advanced energy projects to certify under this section, the Secretary- shall take into consideration only those projects where there is a reasonable expectation of commercial viability, and "(B) shall take into consideration which projects-
(i) will provide the greatest domestic job creation (both direct and indirect) during the credit period, "
(ii) will provide the greatest net impact in avoiding or reducing air pollutants or anthropogenic emissions of greenhouse gases,''
(iii) have the greatest potential for technological innovation and commercial
deployment, "
(iv) have the lowest levelized cost of generated or stored energy, or of measured reduction in energy consumption or greenhouse gas emission (based on costs of the full supply chain), and
(v) have the shortest project time from certification to completion.
I bet it will not start for YEARS! It already started . . .
(b) EFFECTIVE DATE.-The amendments made by this section shall apply to facilities placed in service after December 31, 2008.
It sounds good, but I bet not enough money to go around!!! Here are the numbers!
"(B) LIMITATION.-The total amount of credits that may be allocated under the program
shall not exceed $2,300,000,000.
I think that is $2.3 BILLION. . . To give you an idea on how much that is. GERS used to have a goal of 150M to finance 50mmgy in COES extraction. If we did that today and applied for 30% or $45 million in grants/(energy tax credits?), that would be less than 2% of the total amount available. I am not saying it is gonna happen. But I see no reason why at least a portion of our present and mid-term financing needs could not become facilitatable under this and/or another one of these economic recovery programs.
Seems to me that lenders might look at that 30% (energy tax credits?) as additional collateral in case of default. Lenders are afraid to lend. A thirty percent cushion should make 'em all start scratch'in where it itches and talk'ng like John Wayne again. . .
Good Hunting,
SkunK
Saturday, February 14, 2009
Grant up to 30% for new Renewable Energy Facilities??? COES??
Until I can read the actual: Here is a fact sheet from the Speaker of the House (best I can do for for a primary source for now) The devil is always in the details, but we will work with what we have. http://sefora.org/wp-content/uploads/2009/02/conference-report.doc
I list things here as I see their importance.
o Provides grants of up to 30 percent of the cost of building a new renewable energy facility to address current renewable energy credit market concerns.
WOW. Did that just say the governemt will pay up to 30% of the cost of a new COES? Last I heard they plant corn every year. Sounds renewable to me. A grant is good. A grant is not a loan, where they kinda expect you to pay it back. A grant is not an investment, where they expect a percentage of what you build. No, a grant is good. The details will hopefully show GERS will qualify with their COES. I am reaching here, but maybe also to expand the NextDiesel and Montana sites as well. No wonder GE/CBE wants a buy in rather than a loan on the COES. Thirty percent is a heck of a return for just showing up!
o Provides $20 billion in tax incentives for renewable energy and energy efficiency over the next 10 years. [Good]
o Establishes a new manufacturing investment tax credit for investment in advanced energy facilities, such as facilities that manufacture components for the production of renewable energy, advanced battery technology, and other innovative next-generation green technologies. [Nice]
o Includes a variety of provisions to help small business, including small business expensing for investment in new plants and equipment, loss carry back for small businesses, a delay of the 3% withholding tax on payments to businesses that sell goods or services to governments, and a cut in the capital gains tax cut for investors in small businesses who hold stock for more than five years. [Man, if there is a capital gain on 5 year old GERS stock this year, I'll buy a house next to Billy Gates. lol]
o Provides assistance to companies looking to reduce their debt burdens by delaying the tax on businesses that have discharged indebtedness, which will help these companies strengthen their balance sheets and obtain resources to invest in job creation. [GERS has some debt.]
Here is one of the many summaries on the energy portion of the bill:
Energy firms may reap the biggest rewards from the package, which is flush with dollars for investment in renewable energy and smart grid technologies. The bill includes $11 billion to improve the electric grid, including to provide for more efficient transmission of power from renewable sources. That would help smart grid technology providers such as Ambient Corp. (ABTG) and Echelon Corp. (ELON). Wind energy producers such as GE Energy, a unit of General Electric Co. (GE) [although it is just says 'a unit' of GE, the SkunK figures GE Energy must have something to do with GE. lol] , and Spain's Iberdrola SA (IBE.MC), would gain under a three-year extension of green energy production tax credits. Renewable energy tax incentives total $15 billion. Wind firms and solar companies such as SunPower Corp. (SPWRA) won a new grants program designed to provide a direct cash infusion to projects that have lagged because of tight credit markets and a lack of tax credit investors. Technology firms generally are happy with the infusion of money for health information technology and the "smart" energy grid. They are also pleased with some $7 billion in grants for new high-speed Internet connections in rural areas, according to Bruce Mehlman, who is co-chairman of the Internet Innovation Alliance, or IIA.
More details as I find them,
Good Hunting
SkunK
Thursday, February 12, 2009
Ethanol World View, through the eyes of Red Trail
3. We have temporarily suspended the employee bonus program beginning in the fourth quarter of 2008 and also eliminated management bonuses for fiscal year 2008.
Wednesday, February 11, 2009
GreenShift Attends National BioDiesel Conference in San Francisco
Sunday, February 8, 2009
February 9th CEOcast Weekly Newsletter
http://stockreads.com/Stock-Newsletter.aspx?id=7427
SkunK micro News Flash
Sorry to insult 98% of the readers, but there is some confusion among some here. In penny land (or for that matter other lands) there are basically two newsletters. One that is paid by the company and one by the subscriber. Neither are known for their negative news coverage. If they choose to cover, the news is good. As a subscriber you are owed a bit more loyalty. CEOcast is paid by the company (cash/shares)to get their word out. Kind of like a Public Relations firm. Hence the name "PR". Companies advertise. Not a new or novel concept. You may think you need to buy soap after watching TV commercials. Look in your cabinet, you may not!!!!
SkunK is not paid in any way by GERS, CEOCast or any one like them or associated with them. I am not paid by anyone to write this blog and that sucks. That makes it a hobby. I could quality for the blogger Olympics with an amateur status here! Hopefully this clears up any honest confusion that previously existed.
Weird Hobby? Right . . . normally said by the dude who spends all summer in an RV collecting bottle caps and Star Trek figurines. lol
Good Luck
SkunK
Employee Stock Incentive Program
http://docs.google.com/Doc?id=dgzzx2hv_43hnvcmbdk
Friday, February 6, 2009
January Share Report
Using the non-novel SkunK method of taking the numbers in the last known dilution (3Q) and using that formula to estimate today's OS, the SkunK guesstimated 4M shares were added to the public kitty in December. (Explained here: http://greenshift-gers.blogspot.com/2009/01/dilution.html )
Using this same method of first subtracting out the expected daily average (150K), then taking 70% of the result, we end up the following dilution estimate for January:
37,153,589-(20x150,000)x(.70)=23,907,512 shares of estimated dilution in January.
In the last shares OS report filed with the SEC, we see that on November 19, 2008 - we had 89,809,764 shares outstanding. Looking at the volumes it seems to the SkunK we had no meaningful dilution at all from the time of the report till the end of November. We estimated 4M shares in December. We just came up with 24M shares in January for a total of 28M.
According to these rough estimates the SkunK sees us finishing the month of January with about 118M shares OS. In a worse case scenario, where every single share sold above our long term daily average was dilution, it would put us at about 126M shares OS at the end of January. SkunK's estimate puts us at 23.6% of our corporate limit of 500M possible shares outstanding. The worst case scenario I just outlined puts us at 25.2%.
Continuing trends
As the SkunK noted in the December Volume report blog, instead of Knight gaining market share during higher volume months as in the past, Knight lost market share in December to UBS Securities. This trend has continued in January. We now see Knight with only 51% market share and UBSS moving up to 39%. With the table below we see this amaizing trend:
Who is buying these Shares?
Knight losing market share to UBSS may well mean we have a new player in the market. As readers have asked me in emails, do we have someone accumulating shares? Why have we been able to add maybe 30% to our OS in a few weeks and the price, although low, has not collapsed? Why have we not made new lows under the weight of all of these shares?
One answer is we have new money using UBSS to accumulate these new shares mostly at the bid. Slowly, Smartly. Could it be GE acculmulating before the deal? My first reaction is no, since I would expect a more ham fisted approach. Throw a million dollars down and see how many shares you can buy on the way to the moon. Plus I would expect a filing after 5%? Could it be an investment group who follows GE around? Taking GE's DD to the bank? Somebody knows, but no one in front of my keyboard...
Another answer is we have is 300 Joe twelve packs (to coin a term) dropping a couple thousand each just to see what happens. Trouble with that theory is you would expect to see a market maker like E-Trade take a jump in trading percentage, rather than the 3-4% they have steadily held over this same four month period.
Who is selling these shares?
The easy answer is YAGI. They have convertible debenture (CD) loans with Greenshift. If Greenshift does not make the $250,000 dollar payment at the beginning of the month, YAGI is issued shares using a predetermined formula. The agreement states they cannot accumulate more than 5% of the shares OS, so they could not wait to sell even if they wished. 5% of a 2M dollar market cap is only 100 grand. Taking the SkunK's rough estimate of 28M shares dilution during December and January - at a .018 cent average - that is $504,000 - roughly two monthly CD payments to YAGI.
In any case, if you are looking for 'revelations', I heard that is a chapter in The good book. All I got here is guesses based on what I find looking through my rose (or is it rosé?) colored glasses. I think it would be a fair critique to say over the last year I have consistantly overestimated future dilution AND share price, and underestimated gross revenues.
As always, do your own DD and make your own decisions. Final investment decisions and shaving with a straight blade are near the top of my list of 'best not left to others.'
Good Hunting,
SkunK
Wednesday, February 4, 2009
Details, details
December 11, 2008
CleanBioenergy Partners, LLC, a Delaware limited liability company ("CleanBioenergy"), a newly formed joint venture company owned by two members: one is an affiliate of GE Energy Financial Services, a unit of General Electric Company, and the other member is an affiliate of YA Global Investments, L.P., a private investment firm managed by Yorkville Advisors, LLC.
January 30, 2009
CleanBioenergy Partners, LLC, a Delaware limited liability company ("CleanBioenergy"), a newly formed joint venture company owned by two members: one is a subsidiary of GE Energy Financial Services, a unit of General Electric Company, and the other member is a subsidiary of YA Global Investments, L.P., a private investment firm managed by Yorkville Advisors, LLC.
*********
In the first (Dec 11th) paragraph the new lender is described as an "affiliate" of GE Financial Services. In every day common usage, "affiliate" might describe two unions that are "affiliated" under an umbrella organization. It suggests a relationship, however casual. Yet there is a specific business definition for "affiliate" in use here and the SkunK wrote a blog that concluded:
"Affiliate of GE Energy Financial Services" is a unit that is owned in part or in whole by GE Energy Financial Services."
http://greenshift-gers.blogspot.com/2008/12/cleanbioenergy-partners.html
+++++++
This was confirmed and we were told it is wholly owned by GE here during this Q & A:
Question: What is your definition of "affiliate of GE Energy Financial Services" ?
Answer: The reference to "affiliate" in each case is to a wholly-owned special purpose investment company through which the equity investment in the GS NextDiesel project is being made. Both investors are contributing capital first to CleanBioenergy Partners, LLC and then CleanBioenergy is contributing the same capital to GS NextDiesel.
http://greenshift-gers.blogspot.com/2008/12/q-on-38m-dollar-deal.html
+++++++Now in the second paragraph from yesterday we see a change to "subsidiary". A simple business definition of subsidiary is: A company whose voting stock is more than 50% controlled by another company, usually referred to as the parent company. So from this more descriptive term we can conclude that:
Subsidiary of GE Energy Financial Services is a unit (that is at least 50% and described by Mr. Kreisler as "wholly") owned by GE Financial Services (wholly owned by GE).
http://www.answers.com/topic/subsidiary
The SkunK believes the stronger word "subsidiary" was put in place to better demonstrate that GE is directly involved in the pending financing deal. The fact that GE is directly involved in the lending lends tremendous credibility to this company and its clean energy pursuit. For that very reason I realize for some this GE round peg fact will not fit in their world. Although painful, I have found it is always best to change your world view to make the facts fit, rather than the other way around.
If you have trouble keeping the company relationships straight (I do), here is a diagram I made before:
http://docs.google.com/Doc?id=dgzzx2hv_25ccb422czWe have lots of people waiting to see this get done,
So lets tie up those loose ends,
SkunK
Tuesday, February 3, 2009
ECCA Agreement extended to March 2
The ECCA Agreement originally provided that CleanBioenergy could terminate the ECCA Agreement if the Initial Equity Contribution Date had not occurred by January 30, 2009. The Amendment extended that date to March 2, 2009.
http://www.sec.gov/Archives/edgar/data/1269127/000126912709000002/gers8k2309.txt
The agreement is between these four elements, with no hint of which, what or who was not quite ready:
GS Adrian
Biofuel Industries Group
GS NextDiesel
CleanBioenergy Partners, LLC,
The SkunK sees this as a minor delay to a much anticipated event. If our funding partners had second thoughts and were not going to finance, they would have simply used this delay as an excuse to bail out of the agreement. Instead, they signed into a significant extension. I see this as a strong commitment. For whatever reason for the delay, GE financial was given a chance to walk away and they instead recommitted to the deal with a thirty day extension.
I do not expect this to continue through the entire 30 days of the extension. I believe they may have needed a couple weeks and so they asked for a month. That way if something unexpected came up and they needed more time they do not have to ask for another extension. For this reason I would anticipate that they will wrap things up and then close the deal maybe part way through the month. This way they would also generate a little tactical surprise buzz. They did this for the last Annual Report when they took only a small part of the extension. We will see.
SkunK
Very Important Incentives
$33 billion in green energy tax incentives will grow jobs in the renewable energy sector by encouraging private-sector investments in research and production of green energy with wind, biomass, hydropower, and other renewable sources.
$4.6 billion for Fossil Energy research and development. (Clean Coal Bioreactor?)
$10 billion is provided for new loan guarantees aimed at standard renewable projects such as wind or solar projects and for electricity transmission projects.
Approximately $21 billion in business tax relief and incentives will help businesses survive in growing markets, get financing for expansion, and get the money they need for payroll and expenses. Businesses will be able to more easily write off the cost of new equipment, write off more losses if they're hard hit economically, delay or reduce some tax payments, and cash in unused tax credits.
$5.4 billion in tax incentives for conservation and green energy use will encourage and reward energy efficiency and the building of alternative fueling stations, [E-85 and Biodiesel?]and facilitate the funding of conservation projects to improve America's energy independence and grow jobs in these sectors as well.
$730 million to stimulate lending to small businesses.
$2.6 billion for energy efficiency and renewable energy research.
http://www.usnews.com/articles/news/stimulus/2009/02/02/summary-of-the-888-billion-stimulus-bill-under-debate-in-the-senate.html?PageNr=4
SkunK
Very Important Dates
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The SkunK has tried to demystify and outline the various agreements we are working with in this pending finance deal. Since we live in a world of deadlines, I outlined the agreements by dates to try and get my arms around it. I am sure I left something out so I encourage everyone to read the filings. The thing most people are interested in is the pending GE CBE deal, so you might want to look at Feb 5th. This second tier of deadlines might be the reason for any delay in the release into the end of this week or even the start of next week. It looks like the investors have until COB Thursday to actually release the cash and close the deal - if all requirements have been met. GreenShift would be well served to actually wait until cash is in hand to announce the deal is done. I think everyone can understand why they might not want to start with "We have met the requirements and are waiting for funding." Just does not have the same effect as "The deal is done, cash is in hand, and we are aggressively moving forward to complete these COES both under time and under budget."
ALSO what does it mean shareholders shall approve the transactions by 1 July?? Will that require a vote of the Board of Directors? If that was the case why put it in the agreement? Have the numbers changed enough to require a proxy or shareholder vote? Interesting.
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Dec 11, 2008
Membership Interest Purchase and Equity Capital Contribution Agreement
YAGI Amended Credit Agreement
YAGI Exchange Debenture @10%
Jan 30, 2009
Initial Equity Capital Contribution Date shall occur on or before January 30, 2009
Jan 31, 2009
Four COES Installations complete
Feb 5, 2009
Class A/B Investors must have made Initial Equity Capital Contribution
Close on GS NextDiesel LLC Agreement/Project
March 31, 2009
Montana Sustainable Plant close on property
Jun 30, 2009
Seven COES Installations complete
July 1, 2009
GreenShift shareholders shall approve the transactions evidenced by the Project Documents
Sept 30, 2009
Eleven COES Installations complete
This date or earlier if tenth COES has been transferred: called suspension date
October 1, 2009
Level I and Level II payments
Nov 30, 2009
Twelve COES Installations complete
http://www.sec.gov/Archives/edgar/data/1269127/000126912708000182/gers8kex10-1.txt
Go to this link, then "Edit", "Find on this page", type in month, hit enter till you find reference.
Good Hunting,
SkunK