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3:14-4:50 GERS COES
CliK PiK (Long Range Adv Tech)
GERS Patented Tech-MSNBC
Feedstock Conditioning!
Chairman, President & Chief Executive Officer, 37
So who will benefit from this relationship? Stay tuned to find out!
Project Manager, 2006-08 Greenshift Ethanol Conf Attendee, Alparetta, GA - About 28 years old
Rachael is a 1994 Graduate of Lakeside, a private Prep school in Seattle, WA. Rachael is a graduate of The University of the South, with a cum laude bachelor's degree in biological psychology and minors in fine arts and philosophy. One time IBM site designer, worked on Macy's e-commerce site and the redesign of the NYSE site. Founder of Kissykat and Candent Corp. As of March 31, 2008, the Company (GERS) owed Candent Corporation $757,853 (the "Candent Note"). The former president of Candent is the wife of the Company's chairman. All of the issued and outstanding capital stock held by Candent is in trust for the benefit of its former president. The note payable to Candent shall bear interest at a rate of 10% per year and matures November 8, 2010. (P. 21 1st Quarter)
I am the SkunKhunter. I hunt down SkunK stocks. Those are stocks that have been beat down past any reasonable justification. I try to ride the stock up as market forces eventually right the ship of PPS. A SkunK is not a herd animal. He is a scavenger who knows that arriving before the herd means big profits and clean shoes. This is the journey of the GreenShift Corporation. Updated weekly between COB Friday and Sunday evening. (Disclaimers on Bottom of Site)
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3:14-4:50 GERS COES
co2 Bioreactor
CliK PiK (Long Range Adv Tech)
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Flash Desiccate
GERS Patented Tech-MSNBC
Tornado Generator
Feedstock Conditioning!
Kevin Kreisler
Chairman, President & Chief Executive Officer, 37
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Time Line for Patents
- 17 Aug 2004 Clean Tech filed first COES Provisional Patent Application “050”
- 2004 Inventors Disclosed Technology to ICM. ICM executed Confidentiality Agreement. ICM purchases two authorized COES.p3
- June 2005: Westfalia is still "developing" COES technology while ICM is finally installing the two COES bought from the Inventors the year before
- 2005 The Inventors invited Ethanol manufacturers to symposium to hear about COES – 30% attended.(SkunK's idea on which one)
- 5 May 2005 Clean Tech filed first COES Non-Provisional Patent Application “859”
- 23 Feb 2006 '858 patent publication date.
- 23 Feb 2006 '729 publication date
- 6 May 2009 GERS receives Notice of Allowance for first Patents
- U.S. Patent 7,601,858 issued 13 Oct 2009
- U.S. Patent 7,608,729 issued 27 Oct 2009
- 16 Feb 2010 Notice Of Allowance Issued For Third GreenShift Corn Oil Extraction Patent
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So who will benefit from this relationship? Stay tuned to find out!
CHAIRMAN of the GERS BOARD
Mr Kevin Kreisler maintains his GERS stock through his holding company: Viridis Capital, LLC. Mr. Kreisler is a graduate of Rutgers University College of Engineering (B.S., Civil and Environmental Engineering, 1994), Rutgers University Graduate School of Management (M.B.A., 1995), and Rutgers University School of Law (J.D., 1997). Served as the Company’s vice president from 1998 to 2000, president from 2000 to 2002, chief executive officer from 2002 to 2005 and has served as the Company’s chairman from 2005 to the present. Admitted to practice law in New Jersey and the United States District Court for the District of New Jersey. Kevin Kreisler is the sole owner of Viridis Capital LLC; GreenSpace Capital, LLC; Incandent Capital, L.L.C. Mr. Kevin Kreisler is about 37 years old.
"Roots" of Greenshift
- Greenshift Corp - until present
- GS Clean Tech Corp - until 2-2008 - 1-50 Reverse Split 12Dec2007
- VERIDIUM CORP until 7-2006
- KBF Pollution Management Inc from 3-1996 until 10-2003 - 1-20 Reverse Split 21Oct03
- KBF Pollution Control Inc 1984-1996
- Kreisler Bags - then - Kreisler Bags and Filtration 1979-1984 (hence "KBF" above)
Technicians and Magicians Behind the Curtain
David Fred Cantrell - Graduate of the University of Georgia where he received a Masters Degree in Poultry Science and Statistics. Co-inventor of COE technology with Dave Winsness. Started: Cantrell Winsness Technologies LLC. Next: CEO of Mean Green Biodiesel. Works out of One Penn Plaza, NY?
Dan Lester - Project Manager, GS CleanTech. Past: Warnecke Design Engineer 2004-2007; Imagetech Inc. Engineer 2001-2004. Education: Devry University EET, Electronics Engineering, 1998 — 2001
Patrick Bush - GreenShift’s Vice President of Biodiesel Technology
Dan Page - Attended 2008 Ethanol Conference for Greenshift Corp from Alpharetta, GA.
Dan Saltzman - Controller Greenshift Corporation
Past: 2001 — 2004 Assistant Controller, New York Mortgage;
1989 — 2000 Assistant Vice President Financial Reporting, Scudder; 1984 — 1997 Bucknell University
Jacqueline Flynn - Controller of GreenShift Corporation since 2006. She is the Chief Financial Officer (CFO) and Chief Accounting Officer for ESYM/ADRN. She is also the CFO for CICS. She has twenty years experience in financial accounting for both public and private companies.
Mary J. Carroll - Worked in GreenShift Administration since at least December of 2003. Presently GreenShift Vice President of Administration.
John W. Davis - John "Whit" Davis, has a B.S. in Civil Engineering from the U.S. Coast Guard Academy and an M.B.A from Boston University. GS CleanTech's new Vice President of Operations (as of PR 22 Jan '07), has a broad base of diversified management, engineering, operational and business development experience. Mr. Davis led the deployment of GS CleanTech's existing Corn Oil Extraction System installations at Little Sioux Corn Processors and Glacial Lakes Energy. Most recently in his career, Mr. Davis was the technical director for special projects at Vortex Dehydration Technology, where he led product design, development and implementation for many applications of the technologies underlying GS CleanTech's Tornado Generator[TM]. Mr. Davis holds the rank of Lt. Commander as a reservist with the U.S. Coast Guard. (One of four original COES Inventors.)
Dan Lester - Project Manager, GS CleanTech. Past: Warnecke Design Engineer 2004-2007; Imagetech Inc. Engineer 2001-2004. Education: Devry University EET, Electronics Engineering, 1998 — 2001
Patrick Bush - GreenShift’s Vice President of Biodiesel Technology
Dan Page - Attended 2008 Ethanol Conference for Greenshift Corp from Alpharetta, GA.
Dan Saltzman - Controller Greenshift Corporation
Past: 2001 — 2004 Assistant Controller, New York Mortgage;
1989 — 2000 Assistant Vice President Financial Reporting, Scudder; 1984 — 1997 Bucknell University
Jacqueline Flynn - Controller of GreenShift Corporation since 2006. She is the Chief Financial Officer (CFO) and Chief Accounting Officer for ESYM/ADRN. She is also the CFO for CICS. She has twenty years experience in financial accounting for both public and private companies.
Mary J. Carroll - Worked in GreenShift Administration since at least December of 2003. Presently GreenShift Vice President of Administration.
John W. Davis - John "Whit" Davis, has a B.S. in Civil Engineering from the U.S. Coast Guard Academy and an M.B.A from Boston University. GS CleanTech's new Vice President of Operations (as of PR 22 Jan '07), has a broad base of diversified management, engineering, operational and business development experience. Mr. Davis led the deployment of GS CleanTech's existing Corn Oil Extraction System installations at Little Sioux Corn Processors and Glacial Lakes Energy. Most recently in his career, Mr. Davis was the technical director for special projects at Vortex Dehydration Technology, where he led product design, development and implementation for many applications of the technologies underlying GS CleanTech's Tornado Generator[TM]. Mr. Davis holds the rank of Lt. Commander as a reservist with the U.S. Coast Guard. (One of four original COES Inventors.)
Christopher Kennedy
Project Manager, 2006-08 Greenshift Ethanol Conf Attendee, Alparetta, GA - About 28 years old
Public History of the Keisler Family
The lovely Mrs. Rachael Kreisler
Rachael is a 1994 Graduate of Lakeside, a private Prep school in Seattle, WA. Rachael is a graduate of The University of the South, with a cum laude bachelor's degree in biological psychology and minors in fine arts and philosophy. One time IBM site designer, worked on Macy's e-commerce site and the redesign of the NYSE site. Founder of Kissykat and Candent Corp. As of March 31, 2008, the Company (GERS) owed Candent Corporation $757,853 (the "Candent Note"). The former president of Candent is the wife of the Company's chairman. All of the issued and outstanding capital stock held by Candent is in trust for the benefit of its former president. The note payable to Candent shall bear interest at a rate of 10% per year and matures November 8, 2010. (P. 21 1st Quarter)
Kreisler Family Involved in GERS
Lawrence M. Kreisler - Lawrence is the sole owner of Serenity Capital, LLC. Built Kreisler Bags, then Kreisler Bags and Filters, then KBF Pollution Control Inc., then KBF Pollution Management Inc. After 1-20 R/S Sept2003 company was taken over by Veridium Corp in Oct2003, controlled by son Kevin. Resigned, effective December 31, 2003, as an officer and director of Veridium Corporation. Continued to work at Veridium's Paterson, New Jersey based recycling facility, that was designed on recycling technologies he invented. His employment was terminated in July 2004 due to irreconcilable philosophical differences in how to best operate and grow that facility. Bronze Parachute included: 100 percent of his salary of $150,000 through December 31, 2004 and 50 percent of his salary through December 31, 2006. Medical benefits until the age of 65. Lawrence is about 61 years old.
Scott Kreisler - Scott is the sole owner of Cyrus Capital, LLC. Brother of Kevin Kreisler, listed as a Beneficial Owner of Veridium Corporation on 4/2/2002 SEC filings. The 2005 annual report also says: "During 2005, Scott Kreisler, brother of Kevin Kreisler, received salaries of $72,700. Scott Kreisler no longer works for the Company." In February 2006, Cyrus Capital, LLC, purchased from GCS Investments $500,000 in convertible debt issuedby GS Clean Tech. During the period ended March 31, 2006, Cyrus effected conversions totaling $280,000, corresponding to 14,000,000 shares of the Company's common stock. During the second quarter 2006 Cyrus effected additional conversions totaling $120,000 into a total of 6,000,000 shares of the Company's common stock.
Kathi A. Kreisler From a 3/30/2001 filing: Kathi Kreisler is a Co-founder of VERIDIUM CORPORATION and served as its President from 1984 through December 1994. She has been a director since March 1984. In January 1995, Ms. Kreisler became vice president, secretary and treasurer of Veridium Corporation. From 1979 to 1984, Ms. Kreisler was a principal in Kreisler Bags and Filtration, Inc., which name was subsequently changed to KBF Pollution Management, Inc. Ms. Kreisler is the wife of Lawrence Kreisler and is the mother of Kevin and Scott Kreisler. During 2005, Kathi Kreisler received salaries of $33,750. During December of 2005, Kathi Kreisler received 3,806,811 shares of the Company's common stock as a settlement of all severance liabilities.
MIF During the first quarter 2008, Minority Interest Fund (II), LLC ("MIF") acquired the Kerns $1,000,000 Debenture. In February 2008, MIF subsequently fully converted this debenture at the rate of $0.16 per share into 6,875,000 shares of Company common stock. The managing member of MIF is a relative of Kevin Kreisler. (p. 23 1st Qtr Rpt)
Scott Kreisler - Scott is the sole owner of Cyrus Capital, LLC. Brother of Kevin Kreisler, listed as a Beneficial Owner of Veridium Corporation on 4/2/2002 SEC filings. The 2005 annual report also says: "During 2005, Scott Kreisler, brother of Kevin Kreisler, received salaries of $72,700. Scott Kreisler no longer works for the Company." In February 2006, Cyrus Capital, LLC, purchased from GCS Investments $500,000 in convertible debt issuedby GS Clean Tech. During the period ended March 31, 2006, Cyrus effected conversions totaling $280,000, corresponding to 14,000,000 shares of the Company's common stock. During the second quarter 2006 Cyrus effected additional conversions totaling $120,000 into a total of 6,000,000 shares of the Company's common stock.
Kathi A. Kreisler From a 3/30/2001 filing: Kathi Kreisler is a Co-founder of VERIDIUM CORPORATION and served as its President from 1984 through December 1994. She has been a director since March 1984. In January 1995, Ms. Kreisler became vice president, secretary and treasurer of Veridium Corporation. From 1979 to 1984, Ms. Kreisler was a principal in Kreisler Bags and Filtration, Inc., which name was subsequently changed to KBF Pollution Management, Inc. Ms. Kreisler is the wife of Lawrence Kreisler and is the mother of Kevin and Scott Kreisler. During 2005, Kathi Kreisler received salaries of $33,750. During December of 2005, Kathi Kreisler received 3,806,811 shares of the Company's common stock as a settlement of all severance liabilities.
MIF During the first quarter 2008, Minority Interest Fund (II), LLC ("MIF") acquired the Kerns $1,000,000 Debenture. In February 2008, MIF subsequently fully converted this debenture at the rate of $0.16 per share into 6,875,000 shares of Company common stock. The managing member of MIF is a relative of Kevin Kreisler. (p. 23 1st Qtr Rpt)
The SkunK on the Big Picture Stuff
Capitalism
"This system is not bad, it is just how things have worked in every functional society since time began. Someone provides a good or service in exchange for receiving a good or service. Money just facilitates making change and keeping score."
Socialism
"A system where more goods and services are provided to those who provide less goods and services." Leads to less goods and services.
Communism
"Where the link to producing goods and services and receiving goods and services is severed. Outdated, shabby or no production follows. Leads in time to a robust Free Enterprise system - starting with a black market."
"This system is not bad, it is just how things have worked in every functional society since time began. Someone provides a good or service in exchange for receiving a good or service. Money just facilitates making change and keeping score."
Socialism
"A system where more goods and services are provided to those who provide less goods and services." Leads to less goods and services.
Communism
"Where the link to producing goods and services and receiving goods and services is severed. Outdated, shabby or no production follows. Leads in time to a robust Free Enterprise system - starting with a black market."
GERS CHART
Disclaimer
**Traditional SkunK Disclaimer.
Note: I am a shareholder - I do not work for, nor do I receive any direct or indirect payment from GERS or anyone associated with them. (But it would be Kapitalist Kool if I did) I will not intentionally mislead - but I can be wrong (ask Mrs. SkunK for specific frequencies) - so do your own due diligence - and take responsibility for your own financial decisions – (and your own life in general) good or bad. I do not give financial advice - I let you look at my dd as I try to make sense of it all and make MY decisions. Make your own! I have been rightfully accused of being a rather cheery, positive individual who laughs at every opportunity. These tendencies may cause me to overlook deficiencies in this stock that are painfully obvious to others. Celebrate today - and some good garage logic luck to ya.
SkunK
(Blogger formerly know as Skunk)
Disclaimer for those who need additional clarification. . .
My beliefs and the financial strategies discussed on this site are not to be used without proper financial analysis of your personal situation. Better yet, you do not have my permission to use them at all. I strongly suggest you seek help of a financial advisor or, even better, a Certified Financial Planner in order to assist you in any financial planning. I am not selling or advising you to buy any financial products. I am not selling or advising you to buy this stock or any other stock! I am just blogging about one of my favourite subjects! This is a hobby for me and should only be entertainment for you. You may analyse my opinions and determine if they suit you or not. I hope that your personal finance path to your goals will be covered with success and profit. Enjoy your reading.
Additional Disclaimer for the real knukleheads . . . .
Look, if your still reading this disclaimer and haven't figured out my name is SkunK and I don't know nothin' then you really need help. If you still want to blindly go out and do whatever some dude on the internet does then I can't help you. If you are not emotionally secure enough to suffer another's opinion - then turn the dang channel. Quickly seek a mental health professional! I am not one of them either!
Still do not understand? This is for the Lawyers (lol)
DISCLAIMER: The author is not a registered stockbroker nor a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity, index or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his sources. The author recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and that you confirm the facts on your own before making important investment commitments.
Note: I am a shareholder - I do not work for, nor do I receive any direct or indirect payment from GERS or anyone associated with them. (But it would be Kapitalist Kool if I did) I will not intentionally mislead - but I can be wrong (ask Mrs. SkunK for specific frequencies) - so do your own due diligence - and take responsibility for your own financial decisions – (and your own life in general) good or bad. I do not give financial advice - I let you look at my dd as I try to make sense of it all and make MY decisions. Make your own! I have been rightfully accused of being a rather cheery, positive individual who laughs at every opportunity. These tendencies may cause me to overlook deficiencies in this stock that are painfully obvious to others. Celebrate today - and some good garage logic luck to ya.
SkunK
(Blogger formerly know as Skunk)
Disclaimer for those who need additional clarification. . .
My beliefs and the financial strategies discussed on this site are not to be used without proper financial analysis of your personal situation. Better yet, you do not have my permission to use them at all. I strongly suggest you seek help of a financial advisor or, even better, a Certified Financial Planner in order to assist you in any financial planning. I am not selling or advising you to buy any financial products. I am not selling or advising you to buy this stock or any other stock! I am just blogging about one of my favourite subjects! This is a hobby for me and should only be entertainment for you. You may analyse my opinions and determine if they suit you or not. I hope that your personal finance path to your goals will be covered with success and profit. Enjoy your reading.
Additional Disclaimer for the real knukleheads . . . .
Look, if your still reading this disclaimer and haven't figured out my name is SkunK and I don't know nothin' then you really need help. If you still want to blindly go out and do whatever some dude on the internet does then I can't help you. If you are not emotionally secure enough to suffer another's opinion - then turn the dang channel. Quickly seek a mental health professional! I am not one of them either!
Still do not understand? This is for the Lawyers (lol)
DISCLAIMER: The author is not a registered stockbroker nor a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity, index or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his sources. The author recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and that you confirm the facts on your own before making important investment commitments.
When you're one step ahead of the crowd you're a genius. When you're two steps ahead, you're a crackpot.
--Rabbi Shlomo Riskin
First they ignore you. Then they laugh at you. Then they fight you. Then you win.
-- Gandhi
Remember the only reason the herd is on the move is because they finally figured out the last place they rushed off to was wrong! -- SkunK
Git your dirty feet off the furniture! -- Mrs. SkunK
--Rabbi Shlomo Riskin
First they ignore you. Then they laugh at you. Then they fight you. Then you win.
-- Gandhi
Remember the only reason the herd is on the move is because they finally figured out the last place they rushed off to was wrong! -- SkunK
Git your dirty feet off the furniture! -- Mrs. SkunK
SkunK's Free GERS Video Store
Posts
It just don't fit anywhere else!
SkunK's Public Library; Magazine Section
- June 2008 Bio-Diesel Mag - New Bio-Diesel method that can use corn oil
- Marion (3rd COE) site and COE/Biodiesel
- Dr. Bayless explains Algae process he sold to Greenshift
- Our Algae slime is 94% starch and 6% oil
- and the super "algae" comes from Yellowstone
- Biodiesel Nov 2006 - The Matchmaker
- Forbes Dan Fisher Article
- Distillers Grain Quarterly - 2007 1st Quarter - "COE Opens New Markets"
45 comments:
I would really like to hear some elaboration on the reason for the share conversion.
Perhaps a new cash investor is coming in, conditioned on a change in the capital structure.
I too would like to hear more about the share conversion. Business is continuously improving. I am not sure why we would want a new cash investor. Merger still sounds like the best possible reason.
We would want a new investor to reduce debt.
The stock will do much better if the still-extremely-high debt level is reduced.
An all equity structure would really lift the share price.
A new equity investor might require the conversion of KK's preferred stock to common, as a condition precedent to investing.
I don't know. Just a guess.
It sounds like the same old trade off here, dilution for debt reduction. If you always do what you always have done, you will always get what you always got. I still hope it is a merger.
Not quite.
Let's say, for example, a new private equity investor came in and said,
"We'll put $75 Million into GreenShift, for debt reduction, in exchange for 40% of the equity, on the condition that all preferred shares are converted into common prior to investment."
The pro-forma capital structure would then be:
$0 Debt.
40% Equity owned by new investors.
42% owned by KK
18% owned by employees & public.
Yes, we would be diluted by the new investment, but the company would have zero debt after such a transaction.
Companies without debt are generally valued higher than companies with debt, especially considering the economic environment is still not great.
Thanks
On top of that, I'm sure that a large equity investment of that nature would make quite a splash ... especially if the investor is a widely recognized and respected name.
We'd get some valuation increase from the debt reduction and also some from the "vote of confidence" that a large investment from a well recognized company would produce.
If a big name in the industry (Exxon, Valero, ADM, Bunge, or someone like that) make a large investment, it is like an endorsement, not only of the product but also of the company and the people.
Like having a famous basketball player endorse your sneakers.
Many public investors would become interested in the stock simply because that big name company invested. There are many "follow-the-leader" type investors in the markets.
Like Green Plains, GPRE?
"any binding commitments or definitive agreements to enter into potential acquisitions, it may also use a portion of the net proceeds to acquire or invest in additional facilities, assets or technologies consistent with its growth strategy."
http://finance.yahoo.com/news/Green-Plains-Renewable-Energy-pz-2796380289.html?x=0&.v=1
GPRE raises $90 million for potential acquisitions to acquire assets or technologies.
And then there's this...
"Viridis and MIF have expressed a willingness to fully convert all debt into equity on advantageous terms for GreenShift after we have satisfied the substantial majority of the convertible debt due to YAGI."
An investment like that from GPRE would be great ... not quite as powerful as a big name like Exxon Mobil or GE ... but it would be a great deal for GERS!
The stock would go beserk ... not quite as beserk as if the investor were Exxon Mobil or GE ... but still very beserk! And, it would be a great deal for GERS shareholders!!
And, what about this new investor we have now ... "E-Lionheart" ???
Someone with a King Edward Complex, I guess!!! ;>)
Correction: King Richard, the lion-hearted!
JGTEX, your math is OK but your logic is wrong. Why would any company (GPRE or XOM or ?) with half a brain pay market price for GERS? Nobody wants to own it as potential buyers are few and even stock has limited liquidity, cash flow is barely keeping it alive and profitability is years away. A possible buyer will pay 15% or 25% of value to keep it from going under. The ruthless investor will let it go under, then pay 5% of market to own it without all the baggage of buying it as an ongoing enterprise. (I make my living in the ruthless category) GPRE may be in the offing but the prices you are tossing about are beyond logic. And don't say "Revenue is X million a quarter so cost of money means the value is Y" becasue the fact is that GERS is losing its shirt and can't stay afloat forever without fresh money. They are spending a fortune on legal fees and the outcome is sketchy (Never think juries are predictable!) and why would smart people like GPRE add a loser to the stable at full price. It's a dream! Sharks like me are just waiting to pick up what's left over after the cash runs out at bargain prices. That's why I am anonymous.
I agree. And being one myself, it would be a great deal for GPRE shareholders as well. It would save them money in the long run, a soon-to-be profitable GERS would add to earnings, and the rest of Greenshift's technologies would be a nice fit for someone like GPRE who has the resources to follow through.
So what's it mean when they're converting before instead of after? Could it be the new investor wants to keep the legacy systems and they'll just pay Y/A off? I think it has something to do with a buyout or merger. Prefereds are usually converted to common in connection with a merger.
Profitability is years away? Yea right, they most likely turned profitable in Q4 or will in Q1. GPRE would make an excellent fit since their business model already markets and distrubutes third party ethanol, why not third party corn oil? I have reason to believe GPRE is in the market for feedstock conditioning(in Greenshift's stable). Algae is produced and harvested everyday at their plant in Iowa. Greenshift's patented algae technology would make a nice combo. Then there's the patented gasification that can turn excessive stockpiles of DDG into synthetic diesel/ethanol. At current royaltys, GPRE will pay GERS $300 million over the life of the patents. They're breathing new life into this little company. Why would they wait for them to get stronger when they have a chance to buy them now?
The $1 a gallon biodiesel credit is huge and GPRE doesn't have much exposure to biodiesel right now.
You said, "GERS is losing its shirt ..."
W do have lot of debt, but you are exaggerating the circumstances of the company ... to the downside. Your characterization is "irrational pessimism" and so is the current stock price. We should be trading at $0.003, or higher, based on a more rational analysis.
We have around 1 Billion of properly contracted COES installs coming online very soon. The balance of the YAGI debts aren't due until 12/2011.
YAGI has already agreed to exchange debt for COES installs. So, we know that they are willing to exchange debt for up & running systems with cash flows. If necessary, all of the debt can be eliminated by giving up operating assets and cash flows.
And, at the rate that YAGI agreed to already, we could eliminate all debt by giving up COES installs and still have some cash and upside potential left over for the equity holders.
Plus there is the added upside potential from the probable and retroactive renewal of the ethanol & biodiesel subsidies, which have been lumped into the tax deal that is likely to be passed in a matter of days.
With the retroactivity and the go-forward value, that is worth about $12 Billion to the industry as a whole, including a significant enhancement to the value of GreenShift and its technologies.
While I would agree that things are not great for GERS. We do have far too much debt. No question about that. But, there are very reasonable go-forward solutions to the excess debt, which are currently not factored into the stock price or your irrationally pessimistic characterization.
The tax deal that is likely to be signed soon includes a retroactive and go-forward value of $1.01 per gallon of biodiesel.
Since the corn oil produced by COES is used for BioDiesel production, that tax credit will flow through to GERS.
Without the tax credit, the corn oil is worth, probably, $1.00 - $1.50 per gallon. With the tax credit, it is worth $2.00 - $2.50 per gallon.
The 1.2 Billion in properly contracted COES installs can produce 48 MillionGPY in Version 1 corn oil, not to mention another 24+ Million GPY in Version 2 corn oil and additional upside from the Cellulosic Oil technology and the Algae technology.
At current rates, without the subsidy, 48 MMPY at 20% of $1.50 = $16 Million per year. Put an 8 multiple on that = $128 Million.
So, even just right there, without the subsidy, without winning any infringement suits, and based on Version 1.0 COES alone, we can pay off all of the debts by 12/2011.
Now, add in the probable tax credit, and the pipeline value, and you are looking at significant upside potential over and above THAT.
This stock is DEEPLY undervalued, primarily because of the high debt levels and the convertibility of the debt into stock, which hangs over the stock.
A debt-reducing cash investment and conversion of all non-diluteable preferred stock to common will eliminate that overhang and lift the stock closer to its fair value based on fundamentals alone.
The inventors have proved themselves now. So, the pipeline ought to earn some value based on its future potential, even if cash flows are a few years off.
Is electronic trading back up? Over 185 million trades already today.
Based on the properly contracted COES installs ALONE, the tax credit is worth another $16 Million on top of the $128 Million.
So, even before putting any kind of premium for the infringement suits and the pipeline, the properly contracted Version 1.0 installs, WITH THE EXPECTED TAX CREDIT, have a present value of about...
$128 + $16 = $144.
$144 less $75 Million in debt = $69 Million in equity.
So, we could eliminate the debt and have a $69 Million cash balance sheet for future development of the pipeline by year end 2011 ... even with no new investments at all.
Great comments, JG. I would like to add that according to the Y/A deal, the due dates have been extended..."In addition, the maturity date for the remaining convertible debt due from GreenShift to YA Global has been extended from March 31, 2011 to December 31, 2012."
I think your corn oil price is too low but I agree that the credit will cause prices to continue to rise. Corn oil was $.25 a pound($1.91 a gallon) back when soy oil was $.38 a pound ($2.91). Corn oil was $1.50 last year and it hit $4.58 in 2008. In my opinion, the trend is that corn oil costs about $1 a gallon less than soy oil. The two commodity's have been trading like this for as long as I can recall. Soy oil is currently $.5565 per pound.
That's $4.28 a gallon (7.6 LB's a gallon). I think it's safe to say that conservatively, corn oil is north of $3 a gallon right now. Factor in the $1 credit and it's easy to see why GERS is a buyout target.
And, that tax credit will also strengthen the rest of the industry, as well. So, customers and prospective customers will be more likely to have funds for a new COES install.
Thanks for the correction on corn oil price.
That makes a big difference, of course, on the UPSIDE.
Look at GPRE ... if that tax credit passes, GPRE would get an immediate shot in the arm from the retroactive portion of more than $200 Million, plus its prospects for 2011 will really look much better.
If corn oil is north of $3, then my analysis is truly a very conservative BASE CASE.
The actual value is much higher.
With a $200 Million shot in the arm, plus a very acquisitive nature, GPRE might well offer a higher price for GERS.
And, risk free interest rates are still rock bottom these days.
That 8X multiple may also be low.
In today's low rate environment, someone might pay as much as 10X for those cash flows!
Just for fun would one of you guys be willing to throw out what your best guestimate at what an appropriate price per shar would be if someone were to purchase GERS by the end of the year. I am just curious what everyone else things. I believe $.05 per share sounds appropriate. I have ranges as low as 0.0002/share all the way up to .5/share. What do you guys think?
Assuming $3 corn oil price and 10X multiple on cash flows, then we are looking at ...
$32 Million per year * 10 = $320 Million total value for the properly contracted installs.
That is more than enough to pay off debts by the extended maturity date of 12/2012 and still leave quite a nice pile of debt free cash for future technology development AND patent infringement litigation, if necessary!
To ANON, the vulture ... this company is nowhere near as dead as you would like to think.
You'll have to dig around in some other graveyard for your scraps of food!
Greenshift is more of a Phoenix than a Vulture!
Greenshift is more Phoenix than Vulture food.
A 100% buyout including the inventors and the pipeline ....
I wouldn't sell it for less than $0.05 per share.
But, I think it would be worth MORE as a standalone, refinanced growth stock.
Good growth stocks are hard to find these days, and they command a premium.
But, it's got to be a "good" growth stock ... no debt, analyst coverage, >$10 per share stock price.
If a new investor comes in with $75 Million for 40% of the company, and the debts are reduced to ZERO, that deal would value the company at $187 Million ... about 50% higher than my really convervative base case ... but still well below the $3 corn oil valuation of $320.
That would also balance the control between the new investor and KK. Neither party would have total control. A nice balance.
All investors should be in the same class of stock ... common stock ... so that everyone is "in the same boat and pulling in the same direction".
By putting everyone in the same boat, this reduces boardroom conflicts and helps to focus everyone on growing the company, rather than fighting with each other.
From there, the stock would rise, I think, to that $0.05 per share range.
Include, in the deal, a 1-for-500 reverse split, so that $0.05 per share becomes $25.00 per share.
And, there you go ... a debt free, technology driven, green, biofuels growth stock!!
With control being balanced as follows:
40% New Investors
42% KK
18% Public & Employees
Any disputes or disagreements between the New Investors and KK would be settled by the public/employee shareholder block.
In other words, "control would float". This should have a positive impact on the stock value, because then control goes to the highest bidder. So, we could see a bidding war for control of the company.
That is also the fairest and most 'free market' way to settle disputes.
Just let the market be the final arbitrator.
I'm sure Mr. Anon/Vulture would prefer that the whole thing go through Chapter 11 so that he could buy 90% of the company for some ridiculuos price like $1 Million.
That's what vultures do. They always try to get something for nothing.
But, it ain't gonna work on this one, Mr. Vulture!
The assets are worth far more than the liabilities.
Either take your something-for-nothing strategy elsewhere or make a reasonable offer based on the value of the assets.
JGTEX, as I said, I won't dispute your math. It is the patience of your investors that I am betting on. Sooner or later they will lose faith as every time GERS needs more cash, more dilution occurs, making the investors smaller and smaller and soon to be insignificant. They will wonder why the executives are getting all the money and not the investors who have stuck it out with them. Then they will want to punish KK and the rest by forcing them to pay them or sell at rock bottom prices.
Or just think what happens if a jury finds that COES is not patentable, or that they can't get royalty from certain installations because someone has found a way around the patent by adding or deleting a trivial piece of the system. Then some curent subscribers will drop off and new ones don't happen so GERS really is hurt then. Like I said, never trust a jury until the verdict is in!
Think I'll lurk around a while, thank you. This looks to me like some possible good pickings!
Vulture
Trivial changes are not sufficient to 'get around' a patent ... in theory anyways. Juries, I will admit, are less predictable, but appellate judges tend to follow the law more closely than juries.
If the 1.2 Billion GPY of properly licensed systems is put online within a month or two, as projected, then those cash flows will be online before any jury has a chance to rule one way or the other. Appeals could drag on for years, and during that time the licensed systems will generate cash flows, irregardless of the final outcome of the appeals.
And, besides, there will always be risks to any corporate cash flows. That's why they are only worth 8-10X. If they were risk free, they would trade at US Treasury-type-multiples ... 30X, 50X, or even 400X to match the 3 year rate.
So, the risks you mention are already discounted by using the cash flow multiples of 8X - 10X on the cash flows.
With regard to dilution, as soon as these systems are up and running, within weeks, dilution risk will decrease to almost zero as debts are paid off, either by selling cash flows or simply by using cash flows to pay off debt.
Of course, in the scenario I outlined above (new equity investor pays off debts), dilution risk is completely eliminated by the terms of the deal and the debt reduction.
I know that vulture/distressed investors sometimes do more friendly, turnaround investments like that ... an issue of preferred stock with the same management team... a "Phoenix" rather than a "Vulture".
That's what you should do, if you have that kind of money to invest.
Correction: "400X to match the 3 Month Treasury Rate"
1/0.25% = 400X
Hope you are enjoying those low yields on your cash, because that's all you are gonna get as you wait around for a Ch. 11 that will never happen!!
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