Unprecedented Volatility

Here are some of the things that caught the eyes of this SkunK, the first time through. As I expected things are not wonderful in the state of the economy, biodiesel land or the providence of GreenShift.

My comments are in blue: the rest should be quotes from the annual. (Hopefully I did it right)

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First to set the Mood:

Unfortunately, unprecedented volatility in the global financial and commodity markets intervened before we were able to complete construction and initiate production with the amount of corn oil extraction facilities we needed to achieve break-even cash flow. The adverse conditions in the financial markets during the third and fourth quarters of 2008 resulted in the loss of previously committed sources of liquidity during the second half of 2008. We believe that these market conditions were also responsible for the failure of our $38 million project equity financing to close during the first quarter 2009 as called for by the relevant December 2008 investment agreements.

We intend to fund our principal liquidity and capital resource requirements through new financing activities. The Company has no committed source of capital that is sufficient to meet all of its operational and other regular cash needs during 2009 and beyond. Obtaining this capital is currently Management's top priority.

Here are some smaller notes the SkunK took during his first foray through the Annual in no particular order:

EBITDA standard for employee compensation was eliminated during 2008.. Included in our operating expenses for the year ended December 31, 2008 was $7,252,883 in stock-based compensation

New Director, long time employee
Richard Krablin 64 Director, Executive Vice President

We also reduced overhead during the latter half of 2008, we cut head count down to 75 as of December 31, 2008 and to 38 as of April 1, 2009, and we shut-down our equipment manufacturing operations.

. . . all biodiesel refining and construction activities are currently suspended pending the completion of the additional financing that we need to operate our biodiesel refinery and to continue construction.

BIG owes GreenShift money?
BIG owns and operates a biodiesel production facility in Adrian, Michigan
Prior to the acquisition, the Company had billed BIG for $126,882 in engineering services, $1,540,037 for equipment, and $ 451,154 for corn oil. These amounts were not eliminated in the consolidation as the activity occurred prior to acquisition.

MIF used to convert Debt
During the year ended December 31, 2008, the Company entered into amended and restated convertible debentures with MIF that total $1,319,783. This amount includes the $410,930 note payable MIF purchased from Viridis, the $757,853 convertible debenture that was purchased from Candent, and the $500,000 convertible debenture that was purchased from Acutus Capital, as well as an additional $151,000 in new convertible debt that MIF purchased during December 2008.

Corn oil extracted for 2008: 1,223,562 gallons

default of its debt agreement with Acutus Capital, LLC,

the Company is in default of payments owed under the purchase agreement with Bollheimer Associates
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Sustainable idled. For Sale?
Stillwater loan is currently in default. The Company is currently exploring opportunities to liquidate its interest in NextGen Acquisition under conditions that would eliminate the Company's obligation to Stillwater.

Sustainable Systems, LLC is currently negotiating a settlement agreement with the states of Montana and North Dakota pertaining to outstanding payments due for purchase of oil seeds during 2008 that were contracted at rates far greater than current oilseed values. Sustainable had previously negotiated with two separate banks to receive working capital financing sufficient to service these obligations. Neither bank was able to close due to strain in the prevailing commodity and financial markets. Sustainable has accordingly idled its operations and voluntarily surrendered its commodity license to the state of Montana Department of Agriculture pending liquidation of Sustainable's inventories to satisfy the oilseed payables. Sustainable is permitted to reacquire its commodity license upon the completion of sufficient working capital and equity financing to operate.

now in default due to the failure by the selling shareholders to disclose that Sustainable did not hold title to its now-owned Culbertson, Montana oilseed crushing facility at the time of the acquisition by GS AgriFuels.

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Gross profit for year ended December 31, 2008 was $3,364,797, representing a gross margin of 14.2%. This compared to $1,592,599, 10.8%, in the comparable period of the prior year.

. . . accrued legal and other fees relating to the Company's previously planned $38,000,000 financing with CleanBioenergy Partners, LLC of about $2,000,000

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Mr. Green returns

On November 12, 2008, GreenShift Corporation entered into a consulting services agreement with James Green. Under the agreement, Mr. Green shall receive 100,000 shares of GreenShift common stock in exchange for his services.

The number of outstanding shares of common stock . . 245,560,894

More Later,

SkunK