Kevin Kreisler Questions and Answers

***BREAKING NEWS***
The SkunK just received the following response:
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Mr. Skunk:
Responses to your questions are provided below.

1. Does GreenShift plan to attend the National Ethanol Conference in February?Yes, we are looking forward to meeting with several producers during the conference.
2. Have you had initial feedback from the Ethanol Industry on the new licensing model?
We recently executed the first of our planned new license agreements. We expect to meet and exceed our stated goals for 2010.

3. We are following the biodiesel blenders credit in Washington. Any thoughts?The creation of unnecessary adversity was certainly unfortunate for the biodiesel industry, however, the credit is widely expected to be reinstated retroactively to January 1, 2010, and feedstock prices have been unaffected. In addition, while the primary downstream use of extracted corn oil is in biodiesel, biojet fuel and renewable diesel fuel applications, there are other uses for corn oil that are largely immune to the credit.

4. Can you give us an idea how close to commercialization are some of the additional methods in the GreenShift technology portfolio?
We demonstrated our Method II process a few years ago and the next step there is the construction of a commercial-scale early-adopter pilot. Several ethanol producers have recently expressed interest in this regard. The other technologies in our portfolio are in need of capital for prototyping and pilot demonstration. We are collaborating with strategic partners in a few cases, but we are not going to commit any appreciable resources to any of these technologies until we have transitioned to consistent profitability, paid off or refinanced all of our convertible debt, built up a cash reserve, and increased shareholder value with our patented extraction technologies.

5. Has the Lakota Global Ethanol COES construction begun?
Yes. It is expected to begin production as planned this quarter.

Thank you for your interest.

Regards,
Kevin Kreisler
GreenShift Corporation

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The SkunK would like to thank Mr. Kreisler for his responses.

SkunK

Grassley Hopes for Biodiesel Credit Renewal in mid-February

Business hates uncertainty. It is all about being able to convince others with numbers that your enterprise will generate wealth either now or in the foreseeable future. The numbers have to be credible, they must have certainty. Nothing will CRUSH business activity like uncertainty.

Although the ethanol industry is now coming back like gang busters; the biodiesel industry, especially the soy based feedstock biodiesel industry, is "on hold" awaiting the $1/gallon blenders tax credit. "Talk" in Washington is all about green jobs. Talk does not get it done at the bank. Although it is "near" a sure thing that it will get renewed, whether or not it is retroactive to the start of the year has stopped the industry in it tracks. Money is draining and wealth is being lost each day they dither in Washington.

Greenshift's corn oil is cheaper to produce than soy oil, however I suspect uncertainty in the ethanol plant financing may slow the COES licensing deals until that extra dollar a gallon is settled. A five or ten year deal is what the industry needs, they likely will have to settle for one.

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Some of the biggest advocates for renewal of the $1-a-gallon federal biodiesel blender’s tax incentive looks for renewal of the credit sometime next month.

See rest of Article here:

http://domesticfuel.com/2010/01/29/grassley-looks-for-biodiesel-credit-renewal-in-feb/

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Excerpt From Agriculture Online:

Because of uncertainty over whether the tax credit would be retroactive to the start of 2010, the market for biodiesel has virtually dried up. REG plants are likely to be running at about 15% of capacity in February, Stroburg said.

All this is happening just after President Barack Obama touted green energy jobs in his State of the Union Address this week. As tough as pay cuts and layoffs have been for the biodiesel industry, inaction will be even worse for rural investors who pioneered creating green jobs.

"Those investors could be wiped out as soon as working capital gets depleted," Stroburg said.

"Once a plant goes into default and investors lose their equity, there's no getting it back."

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Rest of Article Here:

http://www.agriculture.com/ag/story.jhtml?storyid=/templatedata/ag/story/data/1264795237646.xml

SkunK

Thanks to a reader for the original link.

Litigation Time Frame

It is very hard to talk about the patent litigation time frame, since there are three different ongoing cases available on Pacer that you can follow related to the Greenshift patents. I am not about to give you a play by play since I am not a patent lawyer and am certainly not qualified. Even if I was, these things can get settled at any time out of court, making any scheduled dates moot. (a four letter lawyer word I picked up on tv) You're encouraged to get an account and look at the filings whenever you want and let me know what you think. They say it costs eight cents a page, but the bill does not come till you get to $10. Not even close yet.

Just go to the link below and get an account, select "civil" and use "greenshift" to search. Five cases come up, two are old and closed and you are left with the three current patent litigation's.

Go here to register:
https://pacer.psc.uscourts.gov/psco/cgi-bin/register.pl

Just to give you some excerpts concerning timing for one of the three cases:
1. ". . . discovery to be completed by February 10, 2010."
2. "(A) briefs in opposition to the respective parties’ initial memorandum of law are to be filed and served by February 26, 2010; and"
3. "(B) reply briefs are to be filed and served by March 12, 2009 with a consolidated hearing on the pending motions thereafter to be scheduled."

The filing where these three quotes come from is available here:

http://docs.google.com/fileview?id=0B_ch8gAs4lCcY2E1NDRiN2YtODQ4Yy00OGU5LThlMTQtN2IwZGJmMzdjMmQx&hl=en

Like ALL the filings I encourage you to read it all. Just to say it out loud again, quoting excepts is not an attempt to deny you information, but to give you, a part of the whole I think you might find interesting.

Good Luck,
SkunK

Lucrative Blog

This from something called:

The Lucrative BlogOne's Journey to being Opulent!

Good Morning,

There are a couple of stocks I would like to bring to your attention. I have recently scanned over 36 stocks with yesterday's most volume numbers. There where two out of 36 stocks that I would like to talk about.
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The second stock pick is:

GERS - Green Shift Corporation
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Rest of Post:http://thelucrativeclass.blogspot.com/2010/01/wednesday-stock-watch-list.html
Note: The information here does not reflect the divestature of the Adrian Plant and the spin off of the seed crushing plant to Carbonics Capital (CICS) .

SkunK

Liquid Fuels From Algae Show Many Advantages

From this months issue of Pipeline and Gas Journal:
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Algae – black, slimy, and obnoxious – just may be the next black gold of energy products, especially for liquid fuels! While other agriculture products have gotten a head start as possible replacements for crude oil, the best candidate currently is one of the lowest forms in the plant kingdom, algae.
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A partial list of smaller, independent companies working on algae for fuel development include:
GreenShift Corporation (GERS.OB)
Greenstar Star Pproducts (Pink Sheets: GSPI)
Nanoforce Inc. (NNFC.PK)
OriginOil, INC. (OTCBB:OOIL)
PetroSun Inc. (Pink Sheets: PSUD)
Valcent Products Inc. (OTCBB: VCTPF)
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Rest of Article Here:
http://pipelineandgasjournal.com/liquid-fuels-algae-show-many-advantages?page=show

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SkunK

PPS

I am not saying the road ahead couldn't be a little rough . . .

Our First Goal for this year:

"Execute new corn oil extraction license agreements during 2010 with ethanol producers with an aggregate capacity of at least 1 billion gallons per year of ethanol;"

Is this achievable? We are already 10% of the way there. The Global Ethanol deal expressed in the 4 Jan 2010 Press Release involved a +100M gallon capacity plant. Nine more deals like that and goal achieved!

"Under the terms of the agreement, Global will directly finance, build, own and operate a facility based on GreenShift’s patented corn oil extraction technologies designed to extract more than 2.2 million gallons per year of corn oil in return for an ongoing royalty payment to GreenShift equal to more than about 20 percent of the market price of the extracted corn oil at the time of shipment."

Using the Global Ethanol numbers, we could expect results to be ten times this deal or 20% of the more than 22M gallons of corn oil produced by the end of 2010. Using an average price of $1.75 per gallon of corn oil, we would therefore earn a commission of about $7.7 million. The SkunK figures this is enough to reach our second goal of profitability. It would also make our third goal of 30% debt reduction much easier.

What is this worth in pps? First, lets use a worst case scenario and max the OS out at 10B. Then lets use a relative tame PE of 20.

$7.7m/10B = (net income)/(TotalOS) = diluted EPS = .00077

(PE) X (Diluted EPS) = (PPS)

20 x .00077 = .0154pps

Using this model, reaching our goal should add at least a Penny and a half to the share price. With a Friday close of GERS 0.0004. - this represents a value 38.5 times the present pps.

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The Meter is running . . .

In the recent shareholder letter Greenshift:

. . . estimate that more than 35 ethanol plants are currently using part of our extraction technologies . . . to produce. . . corn oil worth more than $60 million per year. . . $12 million at a royalty rate of 20% of sales.

. . . we believe that we can increase the yield of currently unlicensed producers by an average of at least 20% . . .

Allow the SkunK to figure that federal patent laws are enforceable in the US State and Federal Court system. If that is the case, then royalties may be due to at least the date of the patents. The meter is running. If one concludes that royalties are accumulating whether or not they are presently being paid, then allow for a minute the assumption that they are accumulated debts that will be paid someday. Also figure the company estimates of current infringers are correct.

What is a royalty rate of $12M/year worth in market cap and pps?

A different perspective seems a bit more inviting . . .

12m/10B = (net income)/(TotalOS) = diluted EPS = .0012

(PE) X (Diluted EPS) = (PPS)
20 x .0012 = .024pps

Using this model, reaching successful enforcement of the patents could add nearly two Pennys and a half to the share price. With a Friday close of GERS 0.0004. - this represents a value 60 times the present pps.

I certainly do not suggest that you can add the two pps estimates together to get a total. Since the present unlicensed users may well be the most motivated new customers. There SHOULD be overlap in the two separate estimates. What I see here is a chance for a significant price rise over the coming year - if the assumptions that the estimates are based on are met - a rise of 50 times is not out of the question. So the SkunK takes a swag of 2 cents/pps for the end of the year - and more importantly - since we may see an OS cap revision - a market cap of $200M.

The SkunK has made GERS pps predictions in the past that have not been met. The stated assumptions upon which they were based did not come true. The entire biofuels industry did not meet its goals and many a good company across the economic landscape is now out of business. Please read my disclaimers below and make your own investment decisions.
You can look over my shoulder and take what you want from this here blog, but don't blame (or credit) the SkunK or anyone else for your investment decisions!
That said,
Good Luck!
SkunK

Looking East

The SkunK took this shot at sunrise looking across the entire Pacific. You can only do that from Asia, (I thinK). We got a little place here and some of you may have remembered I posted some pictures when I was here last May. Its not hot, but a lot warmer than what I escaped. I finally got my fishing poles in the mail, so now its fishing in the morning and site seeing/shopping in the afternoon. The New Years Sumo Tournament comes on TV from 4-6pm and I am hooked. Eleventh Day of the 15 day match. I've been here about a week now and I have not been the first to post some of the great GERS news that has broken lately. We are 16 hours ahead of eastern time, so if I am ready to roll at 5am, I can watch the last hour of trading. Needless to say, I cannot always catch breaking news from here. However, great place for a vacation!

Will this be the year that the building blocks finally slide together in GERS land?

The recent Shareholder Letter has a link to a study of the 25% rule. One key thing I picked up from my quick read:

"The 25 Per Cent Rule is an allocation(or splitting) of operating profits. Explicit consideration is given to all of the costs, including non-manufacturing overhead, that are needed to support a product or are driven by the product. The Rule is not a split of gross profits."

Greenshift estimates that a customer's Corn Oil extraction System (COES) expense will be less than 10% of revenues from the corn oil. The SkunK believes that Greenshift therefore set its license fee from the standard 25% to 20% to account for the difference between the operating profits and the corn oil revenues.

For example, say a customer sold $100 of corn oil from a newly installed COES. For argument - lets say it cost him $10 to produce it (GERS claims the cost is much less), leaving a $90 operating profit. The 25% rule would be 25% of $90 (not $100) - or $22.50 going to GERS. Using the GERS license fee offfering the company would pay GERS $20 based on 20% of the $100. Since every producer is different in its efficiencies, all would have different costs. Some might be $90 while others are $95 operating profit. FEW of them would want to open their books to allow GERS to confirm the proper fee. On the other hand it is easy to meter a fluid and determine exactly how much corn oil is produced. Let the Ethanol company profit from increasing efficiencies, round the number off and tie it to an easy to verify product - the corn oil itself. Both companies are incentivize to increase production. In any case that's how I read why we are asking for a 20% royalty (on corn oil revenues) while quoting the 25% rule (pertaining to operating profits). It seems like a good, enforceable, simple, win-win solution. Besides us stakeholders, the other audiences here include potential customers and the courts. Such a generous offer on GERS part would seem to lessen the chance a court would want to step into this later and change the offering. Lets see how the industry - and eventually the courts - react.

SkunK

Operating Profit:
A measure of a company's earning power from ongoing operations, equal to earnings before deduction of interest payments and income taxes. also called EBIT (earnings before interes and taxes) or operating income.
Gross Profit:
Calculated as sales minus all costs directly related to those sales. These costs can include manufacturing expenses, raw materials, labor, selling, marketing and other expenses.

RevenueFor a company, this is the total amount of money received by the company for goods sold or services provided during a certain time period.

New Shareholder Letter

Dear Shareholders:
The state of our company has improved since our last communication in early 2009: we shed unprofitable business lines, liquidated non-core assets, streamlined overhead, reduced debt by more than 30%, and restructured the majority of our remaining debt on more favorable terms. The ethanol industry has moved favorably: oil prices are high, corn prices are expected to be stable due to a larger than expected crop, ethanol production margins are healthy again, and the industry has the capital and the desire to invest in efficiency improvements. And, our market positioning has strengthened: we were recently awarded two patents on technology that is in high demand and is widely accepted to be the best proven path to increasing the efficiency and profitability of refining corn into fuel. We have much yet to accomplish. We have more debt to eliminate, earnings to produce and shareholder value to build. This letter is to provide an update on our plans in this regard.

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Our key goals moving forward are simple:

1. Execute new corn oil extraction license agreements during 2010 with ethanol producers with an aggregate capacity of at least 1 billion gallons per year of ethanol;

2. Achieve profitability by the end of this year; and,

3. Continue the 30% debt reduction realized in 2009 by reducing debt by an additional 30% during 2010.

We are going to use our technology advantage and patent position to facilitate the widespread adoption of our extraction technologies under fair terms that allow us to satisfy our commitments to our lenders and shareholders, and we are going to stay focused on this plan until we have transitioned to consistent profitability, paid off or refinanced all of our convertible debt, built up a cash reserve, and increased shareholder value.

We are grateful for your patience and support and we look forward to our next communication.

Best Regards, Kevin Kreisler
Chairman and Chief Executive Officer GreenShift Corporation

Rest of Letter Here,
http://www.stockhouse.com/News/USReleasesDetail.aspx?n=7598907

The U.S. ethanol fleet has a capacity of about 12 billion gallons of ethanol per year. So the goal of 1 billion capacity - involving NEW contracts - would involve one out of twelve - or 8.33%. With an estimate that more than 35 ethanol plants are currently using part of Greenshift extraction technologies - or about 20%? -this goal does not seem to be out of reach.

SkunK

BioReactor

20070196892
METHOD OF CONVERTING A FERMENTATION BYPRODUCT INTO OXYGEN AND BIOMASS AND RELATED SYSTEMS
http://appft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&u=%2Fnetahtml%2FPTO%2Fsearch-adv.html&r=9&f=G&l=50&d=PG01&p=1&S1=((%22gs+cleantech%22.AS.)+OR+%22winsness%22)&OS=AN/")
Seems to be the add on to the Bayless patent for the Algae bioreactor by putting it into the Ethanol plant. Note Winsness, Chairman Kreisler, Dr. Krablin are listed as inventors. A different combination of inventors than the rest of the patents.
Notice that the traditional Ethanol Plant produces three products in equal measure by weight. CO2, Liquid fuel (ethanol and corn oil), and feed (DDGs).
Use of the bioreactor in as described in this patent would change those products to Oxygen, Fuel (large increase) and DDGs.
The elegance found at the Ethanol Plant for a bioreactor is feeding the boiler exhaust and the fermentation exhaust into the bioreactor. The algae produced is then fed back into the fermentation process as fuel. Production is increased. CO2 is reduced or eliminated. "Elegant" solutions are simple solutions to complex problems.
So how come the SkunK has been called "simple" - but never "elegant"! :~)
SkunK

At least 11 more Patents Published

Here are eleven Greenshift and/or Winsness; Davis; Barlage; Cantrell; Krablin; Kreisler patents:

http://appft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&u=%2Fnetahtml%2FPTO%2Fsearch-adv.html&r=0&f=S&l=50&d=PG01&OS=AN%2F%22gs+cleantech%22+or+%22Barlage%3B+Gregory%22+or+%22Cantrell%3B+David%22+or+%22winsness%22&RS=%28%28%28AN%2F%22gs+cleantech%22+OR+%22Barlage%3B+Gregory%22%29+OR+%22Cantrell%3B+David%22%29+OR+%22winsness%22%29&TD=11&Srch1=%28%28%28%28%2522gs+cleantech%2522.AS.%29+OR+%2522Barlage%253B+Gregory%2522%29+OR+%2522Cantrell%253B+David%2522%29+OR+%2522winsness%2522%29&StartNum=&Refine=Refine+Search&Query=AN%2F%22gs+cleantech%22++or+%22winsness%22

The first one listed is the same one featured in the blog below.
SkunK

New GERS Patent Application

Here is an interesting new GERS patent application I just stumbled on. The application is now on the US Patent and Trademark Office website. The patent was filed on September 14, 2009 and was published on 7 January 2010 - only two days ago.

It has some interesting estimates of costs and benefits. This adds to the previous allowed patents and claims another 15% improvement in efficiency. The way I read the paragraph below, it seems the COES are claiming wealth generation at a rate of $460.46 per hour. 24/7 that is over $4M a year. Earning a 20% commission on that is over 800K per COES with minimal revenue costs???

This would seem to jive with Greenshifts recent announcement of its new License offering:
"Integration of GreenShift’s patented Method I corn oil extraction technologies into a 100,000,000 gallon per year ethanol production facility will result in the production of between 1,500,000 and 3,000,000 gallons (11,400,000 to 22,800,000 pounds) per year of corn oil, and about $2,300,000 to about $4,500,000 in additional net income to the ethanol producer at the current market price of corn oil (not including the impact of energy savings) – net of GreenShift’s 20% royalty."

These figures seem to blow a gaping hole in the whole financial board generated theory that the COES cost more to run than the wealth they produce. But really, would some 20% of the industry have already invested in, and/or risk patent infringement on something that was not a money maker? In retrospect that argument falls flat on its face.

On the other hand, old board rumors of trouble with filters plugging seems to have had a kernel of truth. It appears that this application is "in part" an improvement on one of the limitations of "an option" described in the '182 patent. Here we also get a mention of what else they are trying to recover besides the corn oil: "lactic acid and glycerol"

"U.S. Pat. No. 5,250,182 (the disclosure of which is incorporated herein by reference) describes the use of filters for removing substantially all solids and recovering lactic acid and glycerol from the thin stillage without the need for evaporation. Despite eliminating a step in the conventional process, the proposal results in a more complicated arrangement requiring multiple filtration steps. Wholesale elimination of the evaporator in the vast majority of existing plants is also unlikely and otherwise uneconomical. Filters, and especially the microfiltration and ultrafiltration types proposed in this patent, are also susceptible to frequent plugging and thus disadvantageously increase the operating cost. For these reasons, the filtration process proposed in this patent has not gained widespread commercial acceptance."

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20100004474 Methods Of Processing Ethanol Byproducts And Related Subsystems 01-07-2010

As a result, the cost per hour of drying this syrup when combined with the distillers wet grains to achieve an end product having a moisture content of less than 10% is only $158.92, or approximately 40% less. Assuming a savings in dryer efficiency of 10%, the product value per hour ($678.46) less the estimated dryer operating cost ($143.03 per hour) and less the estimated evaporator operating cost ($74.96 per hour) is $460.46 per hour. This represents an approximate 15% increase over the corresponding value calculated for Example 1.
Cash -
Cheese and crackers Milk and Cookies
Hamburgers and fries
Steak and lobster
Need I say mooooo re?

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Its tough to get access to the images without special software. So go here for preferred SkunK's blog reader's access. I put them on google documents as a pdf file. Sorry, it's in two parts.

First seven pages and images
https://docs.google.com/fileview?id=0B_ch8gAs4lCcYjk1NDNhZjktNjg2NC00YTZkLThmOWEtNmI4NWVkZmM1NTE4&hl=en

Last page
https://docs.google.com/fileview?id=0B_ch8gAs4lCcYjExOTE2NzMtYzEyMy00MWRjLTg4ZWYtNWZhMjhiOGY2YTNj&hl=en
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For those who believe (like me) "Trust, but verify" here is the Patent Application on the official Government site:
http://appft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&p=1&u=%2Fnetahtml%2FPTO%2Fsearch-bool.html&r=1&f=G&l=50&co1=AND&d=PG01&s1=20100004474&OS=20100004474&RS=20100004474

SkunK

StockGuru Spotlight

Greenshift Corp. is in the StockGuru Spotlight for January 8, 2010

What is the StockGuru Spotlight?

The StockGuru Spotlight features stocks that we expect some action in. Generally speaking we expect a strong showing in the market based on the market, our knowledge of the stock and the buzz in the markets.

Rest of article here:
http://www.allaboutstock.com/2010/01/greenshift-corp-is-in-the-stockguru-spotlight-for-january-8-2010%C2%A0/

SkunK

BIOMASS Magazine

Global Ethanol licenses GreenShift technology

“GreenShift has shown that corn oil extraction enhances ethanol production efficiencies by increasing biofuel yield while reducing energy use," said Trevor Bourne Global Ethanol’s CEO. "This in turn improves cash flow and plant profitability.” An estimated 20 percent of the U.S. ethanol industry currently uses GreenShifts’s technology.

Kevin Kreisler, Greenshift CEO, hopes to expand the use of extraction technology. “Our chief goal for 2010 is to support the integration of our patented extraction technologies into as much of the U.S. ethanol fleet as possible,” Kreisler said. Global Ethanol will finance, build, own and operate a facility based on GreenShift’s technology in exchange for an ongoing royalty payment of roughly 20 percent of the market price of the extracted corn oil at the time of shipment.

Entire Article Here:

http://www.biomassmagazine.com/article.jsp?article_id=3393
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Another reason for this change in licensing is very important. Greenshift estimates that 20% of the industry uses its patented technology. If the ongoing patent court cases uphold the US patent system as the SkunK expects. . , (it seems most of the present arguments are based on liability BEFORE the patents were issued - the liability AFTER is a much higher hill to climb for the patent infringers.) then 20% of the industry owes 20% of its corn oil production to Greenshift - with the meter running - at least from the date of patent issue. This licensing will make it much easier for Greenshift to negotiate implementation of the patents with each plant. Greenshift does NOT want to send years in court with its customers.

SkunK

New Licensing Model for Patented Extraction Technology

As the SkunK said on the day of the deal, the big news about the Global contract was the "new form of technology transfer" and the right of the Ethanol plant to "own and control the equipment and the related building.".

If the industry responds, it could solve the financing problem and make Greenshift a cash cow.
The SkunK believes the patents give Greenshift much more flexibility. Before the patents they had to be very careful about who had access to the equipment. With the security of the patents they can now directly license the COES and turn possession over to the plants. This frees then of the requirement to raise huge sums of cash in a cash strapped economy. It also may put them into the catbird's seat to generate corn oil for a feedstock starved biodiesel industry!

For those who wonder how the plant will finance - it appears Greenshift has also taken care of that.
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Optional Construction Financing
Qualified producers have the ability to take advantage of direct financing that GreenShift has arranged for its licensees for the construction and installation of extraction facilities based on GreenShift’s patented technologies.
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NEW YORK--(BUSINESS WIRE)--GreenShift Corporation (OTC Bulletin Board: GERS - News) today announced a significant modification to its market offering for its recently-patented corn oil extraction technologies.

Under GreenShift’s new licensing option, authorized licensees will be granted the right to directly build, own and operate the equipment they need to use GreenShift’s patented extraction technologies in return for an ongoing royalty payment equal to 20% of the licensee’s corn oil sales. This royalty structure is derived in part from the standard conventions used by thousands of companies in many different industries, including the auto, consumer products, energy, food and manufacturing sectors.

Integration of GreenShift’s patented Method I corn oil extraction technologies into a 100,000,000 gallon per year ethanol production facility will result in the production of between 1,500,000 and 3,000,000 gallons (11,400,000 to 22,800,000 pounds) per year of corn oil, and about $2,300,000 to about $4,500,000 in additional net income to the ethanol producer at the current market price of corn oil (not including the impact of energy savings) – net of GreenShift’s 20% royalty.

At the lower end of this range, an ethanol producer’s investment in an extraction facility can pay for itself within less than about 18 months based on the current market price of corn oil.

Rest of Article here:
http://finance.yahoo.com/news/GreenShift-Announces-New-bw-2756019.html?x=0&.v=1
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SkunK

Preception: "the corn ethanol scam"

In a story that will hopefully be turned from Macro to Micro this year, this article shows how the Corn Ethanol Industry was piled on and referred to last February as the "the corn ethanol scam". The industry, as measured by the BDI index, instead is in the middle of a turnaround and out preformed the DOW for 2009. Take a look at the list of companies in the index.
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"However, perception and reality have significantly diverged in this case."

For the year, the Biofuels Digest Index portfolio of stocks gained 17.48 percent to a 1/2/09 close of 66.28 – and is up more than 2.7 percent for 2010 to date, as well. By contrast, the S&P 500 was up 19.67 percent for the corresponding period and the DJI was up 15.43 percent.

BDI stocks for 2009 were: Archer-Daniels-Midland (ADM), The Andersons (ANDE), Aventine Renewable Energy (AVR), Bluefire Ethanol (BFRE.OB), Biofuel Energy (BIOF), British Petroleum (BP), Cosan (CZZ), Environmental Power (EPG), GreenShift (GERS.OB), Green Plains Renewable Energy (GPRE), GreenHunter (GRH), Gushan Environmental Energy (GU), Lignol (LEC.V), Momentum Biofuels (MMBF.OB), OriginOil (OOIL.OB), PetroAlgae (PALG.OB), Pure Biofuels (PBOF.OB), Pacific Ethanol (PEIX), Raven Biofuels (RVBF.OB), Sustainable Power (SSTP.PK), SunOpta (STKL), Syntec Biofuel (SYBF.OB), Texcom (TEXC.PK), Valero (VLO) and Verenium (VRNM).

The Index is weighted to reflect both company size and the importance within the sector.
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(I am guessing Greenshift was not selected for its market cap/size! That would only leave its importance in the sector.)

http://www.biofuelsdigest.com/blog2/2010/01/06/biofuels-digest-index-outperforms-dow-jones-industrials-in-2009/

SkunK

Todd Neeley, DTN Staff Reporter

Todd Neeley, DTN Staff Reporter, with one of the most respected and well read daily blogs in the Ethanol Industry, recently covered the Greenshift/Global deal.

http://www.dtnprogressivefarmer.com/dtnag/common/link.do?symbolicName=/ag/blogs/template1&blogHandle=ethanol&blogEntryId=8a82c0bc25987ff10125ff5864b804ba

SkunK

Opinion

Here is some seemingly balanced original analysis and opinion.
http://www.hotstocked.com/article/1824/greenshift-corporation-otcbb-gers-closes-a-new.html

SkunK

Moving FAST

From yesterday's PR:

"Global Ethanol prides itself on process efficiency and its commitment to continuous improvement," said Trevor Bourne, Global's chief executive officer. . . "We believe corn oil extraction to be essential to our goal of leading in the low cost production of ethanol, and we are excited to start producing and selling corn oil within the next 2 to 3 months."

One of the advantages of plant owner financing and ownership is they are in a position to make things happen fast. Hopefully this means that specialized parts are on site and cement pours have already been completed in warmer weather. Production by the end of FEB? By the end of the first quarter? If things can be spun up that fast, it may be a good indication of how fast things can move going forward.
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Also note the figure "more than 2.2M gallons". This is more than the 1.5M claimed for a standard 50MMGY plant. But it is less than the 3M expected from a 100MMGY plant. This is either a more conservative estimate of production; an estimate based on the particular circumstances of the Lakota plant (production varies among other things, dependent on the manufacturer of ethanol plant equipment and the fat content of the area corn), or a combination of reasons.

". . . GreenShift’s patented corn oil extraction technologies designed to extract more than 2.2 million gallons per year . . ."
http://www.greenshift.com/news.php?id=252

SkunK

Global Agreement

We knew about the building of two new COES at Lakota. We had a hint something was up. But the BIG news here is the new form of technology transfer. Instead of the "GERS financed" option or the ethanol plant "purchase option" - in each case GERS buys the corn oil at a given percentage of the spot diesel price, here the ethanol plant owner . . .

"will directly finance, build, own and operate a facility based on GreenShift's patented corn oil extraction technologies"

They will pay a royalty to Greenshift based on . . .

"an ongoing royalty payment to GreenShift equal to more than about 20 percent of the market price of the extracted corn oil at the time of shipment."

In the past Greenshift insisted on owning the equipment regardless of the financing. Now, under the security of the two issued patents, the company feels secure in selling the equipment to the plant. If this offering is given to the entire market, this may solve two major problems.

The first is financing. Greenshift is not involved in the financing, the Ethanol company can use the COES equipment as collateral for the loan, since they will now own the equipment.

The second is the natural reluctance by the Ethanol Plant to give up control of a production asset on its property. Now it will now own and control the equipment and the related building. This may open the Greenshift COES production to a much larger percentage of the Ethanol Industry than before.

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January 4, 2010 9:00 AM EST

NEW YORK--(BUSINESS WIRE)-- GreenShift Corporation (OTC Bulletin Board: GERS) today announced its execution of an agreement with Global Ethanol, LLC ("Global"), pursuant to which GreenShift granted Global the right to use GreenShift's patented corn oil extraction technologies at Global's 100 million gallon ethanol plant in Lakota, Iowa.

GreenShift's patented corn oil extraction technologies enable GreenShift and its licensees to "drill" into the back-end of first generation corn ethanol plants to tap into the existing reserve of inedible crude corn oil with an estimated industry-wide output of about 20 million barrels per year. This corn oil has been historically trapped in the distillers grain co-product of ethanol production ("DDGS") and is a valuable second generation feedstock for use in the production of advanced carbon-neutral liquid fuels, such as biodiesel, biojet fuel, and renewable diesel, thereby enhancing total fuel production from corn and increasing ethanol plant profits.

Under the terms of the agreement, Global will directly finance, build, own and operate a facility based on GreenShift's patented corn oil extraction technologies designed to extract more than 2.2 million gallons per year of corn oil in return for an ongoing royalty payment to GreenShift equal to more than about 20 percent of the market price of the extracted corn oil at the time of shipment.
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ALL HERE:

http://www.google.com/url?sa=X&q=http://www.streetinsider.com/Press%2BReleases/Global%2BEthanol%2BLicenses%2BPatented%2BCorn%2BOil%2BExtraction%2BTechnologies%2Bfrom%2BGreenShift/5214174.html&ct=ga&cd=MkCSHo8Ec5E&usg=AFQjCNEtcxwkVy8syG2vuO5xhcjf-1-6DA

SkunK