General Electric Cuts Dividend

General Electric shares fell 6.5% after the conglomerate said it planned to cut its quarterly dividend to 10 cents a share from 31 cents in a move that it hopes will save $9 billion and preserve its AAA credit ratings. GE, which has shed 75% of its market value over the past year, had said that it would preserve the dividend, but analysts and investors were skeptical.
http://online.wsj.com/article/SB123573389322793621.html

SkunK

NOVA Idles its BioDiesel Plants/Misses payments

As an example of how the last few weeks - and months - have been devastating to the BioDiesel Industry- look at NOVA. An up and coming, multi-feedstock biodiesel company with a listing on what used to be the American Stock Exchange. Here are some filings for the last two weeks. http://www.novabiosource.com/

10 Feb- Company needs $20M as a bridge loan - substantial doubt exists about the Company’s ability to continue to operate as going concern. http://www.sec.gov/Archives/edgar/data/1137469/000110465909008015/a09-5204_18k.htm

12 Feb -NOVA faces delisting of what was formerly the American Exchange, for failing to hold an Annual Stockholders meeting.

http://www.sec.gov/Archives/edgar/data/1137469/000110465909008560/a09-5403_18k.htm

17 Feb- Effective February 17, 2009, WestLB AG, New York Branch, as administrative agent for the Lenders under the $41 million senior secured construction, term and working capital credit facility (the “Credit Facility”) among Nova Biofuels Seneca, LLC (“Nova Biofuels Seneca”), a subsidiary of Nova Biosource Fuels, Inc., and the other parties thereto, agreed to waive the requirement of Nova Biofuels Seneca to make its scheduled principal and interest payments previously due on February 17, 2009 until March 3, 2009 while the parties continue to evaluate the Credit Facility and the project’s financial condition and working capital requirements.

http://www.sec.gov/Archives/edgar/data/1137469/000110465909010226/a09-5812_18k.htm

26 Feb- On February 26, 2009, the Board of Directors of Nova Biosource Fuels, Inc. (the “Company”) authorized management to idle the Seneca, Illinois biodiesel refinery and to suspend plans for restarting the Clinton, Iowa biodiesel refinery. Accordingly, management commenced steps to reduce the Company’s workforce at these locations and at its engineering and construction subsidiary, including sending appropriate notices to the affected employees and local government officials as a precautionary measure. The Seneca refinery is intended to remain operational until on hand feedstocks and consumables have been processed into finished biodiesel and related co-products, at which point it is expected to be idled. The duration of the shutdown is presently unknown. These actions were taken due to the unexpected breakdown in negotiations with a working capital financing source on the evening of February 22, 2009 and the inability to obtain financing from other sources in a timely fashion during the intervening period. As previously reported, without additional financing, the refineries do not have sufficient working capital to continue operations.

http://www.sec.gov/Archives/edgar/data/1137469/000110465909012659/a09-6511_18k.htm

Lets subtract out the market conditions common to these two biodiesel producers and then lets see how GreenShift is doing - objectively.

NBF 52 week range=$0.05-$2.20 Today=.04

http://caps.fool.com/Ticker/NBF.aspx

GERS 52 week range=$0.0052-$0.199 Today=.0075

http://www.greenshift.com/financial.php?mode=2&qm_page=90881
(Todays price is as I write, I suspect it may change throughout the day!)

*******

NBF is 1.8% of its 52 week high.

GERS is 3.7% of its 52 week high.

Here is NBF's recent annual report:

http://www.sec.gov/Archives/edgar/data/1137469/000110465909004647/a09-3272_210k.htm

For those who can still manage (or need) a chuckle in these market conditions go read the NBF message board. http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_N/messagesview?bn=51612&vmode=1

Just like the old Seinfield episode where Jerry's posse meets up with another posse with all the same characters: Then Elane has to decide between the two . . . This NBF board has all the same characters that posted on the GERS board over the last twelve months - only they are all still posting. . . . and are not quite as ritualized . . . yet. . . its a riot. . .

Good Hunting,

SkunK

13% Ethanol Blend

Iowa Gov. Chet Culver, a Democrat, and Republican Govs. John Hoeven of North Dakota, Mike Rounds of South Dakota and Tim Pawlenty of Minnesota want the administration to take several steps to make ethanol blends more available and promote wind energy.

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

More Signs of Biofuel Bottom?

The U.S. Bankruptcy Court for the District of Delaware has approved the proposed auction of ethanol plants by South Dakota-based VeraSun Energy. The auction will now take place on March 16.
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

Obama highlights role of renewable energy as part of economic recovery package
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,

SkunK

Early as April or May?

Thanks to a reader for this article link. According to the DOE Secretary in this Wall Street Journal article, the Cavalry may be coming over the hill this spring in the form of government loan guarantees.

"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

75% Biodiesel/21% Ethanol Capacity Idle. USDA pushing EPA for more ethanol in gasoline

In what would be welcome relief to the long suffering Ethanol Industry, the USDA is pushing the EPA to raise the ethanol content of gasoline above the present 10%.

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

With slightly over a quarter million shorts out on the bi-monthly short report, we are at an all time high of shares shorted. This comes up as a 3,331.48% increase over the last report and nearly 100K more than our previous high of 167,463 shares short last October. Last October still standing as the month with our .0062 all time low.

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

Word From GreenShift

When the SkunK crawler software spotted the NEXTDiesel article in the local Adrian paper, the first thing I did was post the article. The second thing I did was ask GreenShift if they could comment on the article. I just received the response:


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

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

Details seem to look good so far. . .

Here is the most fascinating part so far of the Bill that just got through Congress. Yes, I finally got through the overloaded server and downloaded it to my desk top. This little thing below may be bigger than I thought.

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

Grant up to 30% for new Renewable Energy Facilities??? COES??

The SkunK has been trying to read the actual stimulus package since it passed but of course it is on one server for 300 million people to share. All other sites refer to this one. It is in the conference reports A and B section. Total just over 1000 pages on two PDFs. No alternative download sites. Think its down? Oh yeah. Big Time. Here is the site and good luck. http://www.rules.house.gov/bills_details.aspx?NewsID=4149

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

Ethanol World View, through the eyes of Red Trail

Red Trail Energy (RTE) is located in Richardton, ND. SkunK believes this is the eighth planned Greenshift COES with a scheduled install date of 30 June 2009. In a letter sent to members, seen here in a Feb 10th SEC filing, we get a look at how this Ethanol Plant sees the future. No specific update on the Greenshift COES, however it is interesting nonetheless. The talk of the advantage over Natural Gas heated plants, I believe has to do with them being the first ethanol plant that is coal fired. A popular thing when neighbors mine coal. Another tidbit is this North Dakota Plant is less than 200 miles from the Montana Seed Crushing plant - just a small jaunt, (a stones throw), in Big Sky Country.

"In spite of the current economics in the industry, we continue to remain optimistic that margins will improve over the next few months for a number of reasons:

1. There is federal mandate (Renewable Fuel Standard passed in the 2007 Energy Bill) in place that requires 10.5 billion gallons of ethanol to be blended in 2009. If margins don’t improve, many more plants will shut down as losses cannot be sustained indefinitely which will correct the supply and demand imbalance very quickly and this should improve margins for the plants that continue to operate.

2. The new Obama administration has shown great support for the biofuels industry and

3. Red Trail maintains an energy cost advantage over natural gas fired ethanol plants which we believe will help RTE remain a viable entity.

RTE is also taking other steps to help ensure the viability of the company. Some of the steps that have already been taken include

1. In response to the negative margins being experience in the industry, we have reduced the plant rate to run at approximately 80% of our normal production capacity. We anticipate running at a reduced rate until margins improve.

2. In an effort to protect the Company from the volatility in the commodities markets, we have changed our corn procurement strategy so that we do not hold as long of a corn position as we have in the past.

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.

4. Board members are currently opting out of the compensation they are paid for attending board meetings and committee meetings and

5. We have reorganized our corn procurement department in an effort to purchase more corn from North Dakota farmers and reduce the amount of corn purchased via rail. RTE is currently evaluating other cost cutting measures as well."

Link to full newsletter

http://www.sec.gov/Archives/edgar/data/1359687/000114420409006555/v139366_ex99-1.htm

Link to RTE Home Page

http://redtrailenergyllc.com/index.php

Good Hunting,

SkunK

GreenShift Attends National BioDiesel Conference in San Francisco

GreenShift Corporation had two adjoining Exhibitor Booths at the National BioDiesel Conference @ 622, 624. Second row in from the entrance, forth column from the right. Got the cheaper ($2100) booths, rather than the corners ($2300). Looks like they also picked area with no competition either side, so they got the corner traffic for free. If anyone spots a familiar face in the flicker photos for the conference let me know. The Confrence went from 2-4 Feb in San Francisco, Ca., With social and networking events the preceeding Saturday and Sunday.

http://sales.biodieselconference.org/ema/memberarea/exhibitor/BoothMapDisabled.html

**********

Do not see any Greenshift reservations yet for the National Ethanol Conference near the end of the month in Texas. Registration for the conference will be accepted online and onsite at the event

http://www.nationalethanolconference.com/attendees/documents/2009NationalEthanolConferenceAttendanceRoster02-09-2009.pdf

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BioDiesel magazine is out for March 2009

No GreenShift articles, but here is a quick preview of some articles that the SkunK thinks may indirectly affect GreenShift

http://www.biodieselmagazine.com/issue.jsp

Tests prove biodiesel doesn’t negatively impact railcar linings

Michigan passes key (BioDiesel) legislation

http://www.biodieselmagazine.com/article.jsp?article_id=3215

What may have a substantial, immediate effect is to provide another revenue stream to NextDiesel by using the glycerin by-product. See here:

Glycerin: Research Turns Up New Uses

http://www.biodieselmagazine.com/article.jsp?article_id=3237

Good hunting,

SkunK

February 9th CEOcast Weekly Newsletter

Greenshift (OTCBB: GERS), a company that develops and commercializes clean technologies that facilitate the efficient use of natural resources, announced an amendment to its previously announced joint venture with GE Energy Financial Services and YA Global Investments, an institutional investor, that extends the Initial Equity Contribution Date to March 2, 2009 from its previously arranged date of January 30, 2009. Under the previously arranged terms, the newly formed subsidiary, CleanBioenergy, will invest up to $38 million in GS NextDiesel, newly formed GreenShift subsidiary,o help deploy twelve new corn oil extraction facilities across the country and double the capacity of GreenShift`s Michigan-based NextDiesel biodiesel refinery from 10 million gallons per year to 20 million gallons per year. Shares lost a penny on the week to close at $0.012.

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

The stock incentive program is a venerable tradition in Micro-Cap land, where employees settle for less than a normal or (sometimes even regular) paycheck, in trade for a portion of the company's future. A future they are helping to build. Usually under financed and short on cash, getting paid in stocks at a Micro-cap with a rising stock price can be a great fit for the company and the employee.

Like any possible good, there can be many drawbacks for both the company and the employee.

Dilution; under compensation during low stock price; lack of liquidity; group rather than individual performance incentives; subjective performance thresholds; non diversification of portfolios; these are just some of the possible problems.

In any case lets take a look at Employee Stock Incentive Program at GERS.

We can start with the top executives since their share is listed by name. We can then see what is allotted to employees other than top executives.

Executive Officer Employment Agreements

Effective March 20, 2008, the Company entered into amended and restated employment agreements with David Winsness, the Company's Chief Technology Officer, Greg Barlage, the Company's Chief Operating Officer, and Ed Carroll, the Company's Chief Financial Officer. These agreements call for a salary of $150,000 per year for each employee and reduce and restrict the shares and other compensation due to each employee as compared to earlier agreements between each employee and the Company. Each agreement also included the above described EBITDA performance restriction on conversion and provides for 400,000, 300,000 and 240,000 shares of Series B Shares to be issued to Mr. Winsness, Mr. Barlage and Mr. Carroll, respectively. These shares are convertible into a total of 10,000,000, 7,500,000 and 6,000,000 shares, respectively, in line with the satisfaction of the $50,000,000 EBITDA targets noted above. In Mr. Carroll's case, 40,000 of his Series B Shares, corresponding to 1,000,000 common shares, are subject to an additional restriction that requires the completion by the Company of certain financing.

(Annual Report p. 93)

Adding the details above and comparing them to the chart below we see that of the 69,133,333 shares allotted to employee incentives at 50M EBITDA, 23.5M are set aside for the three top Executives above. That leaves over 45M shares, or over 65% for other employees. This ratio, since I see no contrary examples, should continue down to lesser EBITDAs. If for example, we declared an EBITDA of 10M at the end of the year. (Not saying they did - its just an example!) That would mean that over 16.5M shares would have been converted under the employee option. Over 10.7M shares would have been placed in the hands of more "junior" employees, who might be more likely to be in a position to require a quick sell.

An Interesting SkunK note: Although I said (and stick by) my guess that we have had dilution, and that dilution in December and January has been to cover 2 YAGI payments, my mind is open to other options. (Wild concept in GERS land!) If you add up the shares converted with ( B, D and E preferred shares, [see chart]) upon meeting 10M EBITDA, you see it is about 37M common shares! This could account for the increased January and February volume as well! This would be theory II with a much lower possibility level. I do not expect to see 10M EBITDA declared in 2008. However we might have had a lesser EBITDA amount declared which freed up some junior employee commons at the start of the year and accounted for a portion of the increased volume.

You can see this in full size and also more references here:
http://docs.google.com/Doc?id=dgzzx2hv_43hnvcmbdk

One last note: If you study the variation between the annual report employee compensation chart (p94 annual report) and the First quarter Report (p.30) after the BIG deal, you will note variances. The most important is almost 9m Employee pool shares are already worked or added into the OS after the Big Deal. The 154,000 shares Mr Kreisler direct purchased are also included in the OS here. I think this could mean that we had an individual performance award (tied to the Big Close?) and the Employee pool was expanded to include at least a portion of the estimated 20-25 NextDiesel employees.

Best of Luck to All Investors

SkunK

ps. If you feel you must constantly lift your tail and spray things, you have been reading too much SkunK. I have devised an anti-dope in the form of even more in depth disclaimers at the bottom of the blog.

January Share Report

The monthly volume report is out for January and to no ones surprise it shows a huge volume increase. Total January volume of 37,153,589 shares trading hands. The previous high volume month was 13.5M shares trading last October. http://www.otcbb.com/asp/tradeact_mv.asp?SearchBy=issue&SortBy=volume&Issue=gers&Month=1-1-2009

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

Details, details

Years ago the SkunK had a job where minute details mattered. Allot. Guess I occasionally still show symptoms. Please note the two paragraphs below that describe our new pending financial partners. Do you see any difference?

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_25ccb422cz

We have lots of people waiting to see this get done,
So lets tie up those loose ends,

SkunK

ECCA Agreement extended to March 2

Well, if the tension wasn't already building in GERS investor land, we just took it up a notch.

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

Here are some of the Green highlights of the stimulus bill NOW being debated in the Senate that may affect GreenShift in the near future:

$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

Note: I predicted that the pending financing agreement closure would be announced 4 Feb. I will stick with that, although with everyone else my eyes fixed on the end of January deadline that was in the summary. So what is this 5 Feb deadline thing all about?
**********
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.
********
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