As you can see in the upper left corner of the Marquis Energy Site (HERE) the GreenShift deal is highlighted and linked to "Marquis to use Corn Oil Extraction System provided by GreenShift" (HERE).
SkunK
Friday, April 30, 2010
Thursday, April 29, 2010
GreenShift Patent Fast Tracked!
GreenShift Patent Application Accepted into Accelerated Green Technology Pilot Program:
". . . the U.S. Patent and Trademark Office ("PTO") has accepted one of GreenShift's pending corn oil extraction patent applications into the PTO's Green Technology Pilot Program for accelerated review."
David Winsness, GreenShift's Chief Technology Officer, said, "We have many patent applications pending covering processes that build on our existing patent portfolio for improving the profitability of corn ethanol facilities. We are pleased that one of our pending applications has been accepted into this important and timely program. We look forward to additional opportunities to deliver our clients the powerful cost advantages made possible by our patented technologies."
See It Here and Here
***************************
Here is the Program Details
“American competitiveness depends on innovation and innovation depends on creative Americans developing new technology,” U.S. Commerce Secretary Gary Locke said. “By ensuring that many new products will receive patent protection more quickly, we can encourage our brightest innovators to invest needed resources in developing new technologies and help bring those technologies to market more quickly.”
Patent applications are normally taken up for examination in the order that they are filed. The average pendency time for applications in green technology areas is approximately 30 months to a first office action and 40 months to a final decision. Under the pilot program, for the first 3,000 applications related to green technologies in which a proper petition is filed, the agency will examine the applications on an accelerated basis.
SkunK
". . . the U.S. Patent and Trademark Office ("PTO") has accepted one of GreenShift's pending corn oil extraction patent applications into the PTO's Green Technology Pilot Program for accelerated review."
David Winsness, GreenShift's Chief Technology Officer, said, "We have many patent applications pending covering processes that build on our existing patent portfolio for improving the profitability of corn ethanol facilities. We are pleased that one of our pending applications has been accepted into this important and timely program. We look forward to additional opportunities to deliver our clients the powerful cost advantages made possible by our patented technologies."
See It Here and Here
***************************
Here is the Program Details
“American competitiveness depends on innovation and innovation depends on creative Americans developing new technology,” U.S. Commerce Secretary Gary Locke said. “By ensuring that many new products will receive patent protection more quickly, we can encourage our brightest innovators to invest needed resources in developing new technologies and help bring those technologies to market more quickly.”
Patent applications are normally taken up for examination in the order that they are filed. The average pendency time for applications in green technology areas is approximately 30 months to a first office action and 40 months to a final decision. Under the pilot program, for the first 3,000 applications related to green technologies in which a proper petition is filed, the agency will examine the applications on an accelerated basis.
SkunK
Kansas; ICM Litigation Schedule
The SkunK has been swamped with questions about the schedule for the Kansas litigation. I finally got something off Pacer. It is a text entry only - so no PDF for you to inspect. Status conference on 18 May:
ORDER: A status conference is set for 5/18/2010 at 3:00 PM before Magistrate Judge Karen M. Humphreys via telephone conference call to be initiated by the Court. The purpose of the conference is to address case status and scheduling. Counsel shall confer and submit their joint recommendations for future case management by 5/11/10. Signed by Magistrate Judge Karen M. Humphreys on 4/26/10.(This is a TEXT ENTRY ONLY. There is no.pdf document associated with this entry.)(vs) Modified on 4/27/2010 to correct typo (aa). (Entered: 04/26/2010)
The SkunK managed to upload a screen grab so HERE is a JPG for ya. Click on it to enlarge it.
SkunK
ORDER: A status conference is set for 5/18/2010 at 3:00 PM before Magistrate Judge Karen M. Humphreys via telephone conference call to be initiated by the Court. The purpose of the conference is to address case status and scheduling. Counsel shall confer and submit their joint recommendations for future case management by 5/11/10. Signed by Magistrate Judge Karen M. Humphreys on 4/26/10.(This is a TEXT ENTRY ONLY. There is no.pdf document associated with this entry.)(vs) Modified on 4/27/2010 to correct typo (aa). (Entered: 04/26/2010)
The SkunK managed to upload a screen grab so HERE is a JPG for ya. Click on it to enlarge it.
SkunK
Wednesday, April 28, 2010
If you plan to Expand . . . use the "Patented COES"
With all the new filing out there in the Ethanol Production Industry - the SkunK has found a small treasure trove of new information.
On February 3, 2010, the EPA released its final regulations on the Renewable Fuels Standard, or RFS 2. Many of the plants are grandfathered in at their current operating capacity. Any expansion of their plant will require a 20% reduction in green house gas (“GHG”) emissions from a baseline measurement. For this they may be required to "install advanced technology such as corn oil extraction, . . ." Many of the public Ethanol Plants have this standard warning found deep in "Risks Associated With Our Operations". I pulled the first three I saw:
*********************************
"If we sought to expand capacity at our Facility, we would have to apply for additional permits, install advanced technology such as corn oil extraction, or reduce drying of certain amounts of Distillers Grains.
SOUTHWEST IOWA RENEWABLE ENERGY, LLC p.21
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"If we sought to expand capacity at our ethanol plant, we would have to apply for additional permits, install advanced technology such as corn oil extraction, or reduce drying of certain amounts of distiller’s grains."
NEDAK ETHANOL, LLC p.22
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"In order to expand capacity at our plants, we may be required to obtain additional permits, install advanced technology such as corn oil extraction, or reduce drying of certain amounts of distillers grains."
BIOFUEL ENERGY CORP.p.25
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And here is an update on an ol'Friend in North Dakota who GreenShift had almost partnered with.
"During 2008, the Company entered into an agreement to operate a third party’s corn oil extraction equipment to be installed in our Plant. Due to the downturn in the economy that occurred during the last six months of 2008, the third party we contracted with was unable to obtain financing for its operation until some time during 2009. The Company terminated its agreement with the third party during 2009 due to the Company’s decision not to install such equipment at this time. The Company may revisit this project in the future."
RED TRAIL ENERGY, LLC p.3
SkunK
PS. It is amaizing to think that only a few short months ago it was often repeated on the financial boards that Corn Oil Extraction was a myth. That it took more energy than it produced. That it was a basically flawed technology that would never pan out. That the patents would never be approved. All of that has now changed. And of course the SkunK is not the only one who has been pointing at these things - there are many who are trying to get the word out. The serious doubters have moved past these canards - now mostly looking at past performance to (mis)judge future events - you know the thing they always warn you against!
Sure, we all wish the PPS was "higher", the OS "tighter" and that the financial balance sheet was more . . . ahhh. . . "balanced". And the SkunK has been famously wrong about pps predictions in the past. But the distance COES have traveled in the last six months is nothing short of incredible. They are now pushed by the EPA as a proven technology. The GERS patents have been approved - multiple times. They are even now part of the standard clause as a requirement for expansion. And if we continue to move in this same direction, the SkunK sees a rose' future. More on that later. Good luck investors!
On February 3, 2010, the EPA released its final regulations on the Renewable Fuels Standard, or RFS 2. Many of the plants are grandfathered in at their current operating capacity. Any expansion of their plant will require a 20% reduction in green house gas (“GHG”) emissions from a baseline measurement. For this they may be required to "install advanced technology such as corn oil extraction, . . ." Many of the public Ethanol Plants have this standard warning found deep in "Risks Associated With Our Operations". I pulled the first three I saw:
*********************************
"If we sought to expand capacity at our Facility, we would have to apply for additional permits, install advanced technology such as corn oil extraction, or reduce drying of certain amounts of Distillers Grains.
SOUTHWEST IOWA RENEWABLE ENERGY, LLC p.21
***************************************
"If we sought to expand capacity at our ethanol plant, we would have to apply for additional permits, install advanced technology such as corn oil extraction, or reduce drying of certain amounts of distiller’s grains."
NEDAK ETHANOL, LLC p.22
***********************************
"In order to expand capacity at our plants, we may be required to obtain additional permits, install advanced technology such as corn oil extraction, or reduce drying of certain amounts of distillers grains."
BIOFUEL ENERGY CORP.p.25
***********************************
***********************************
And here is an update on an ol'Friend in North Dakota who GreenShift had almost partnered with.
"During 2008, the Company entered into an agreement to operate a third party’s corn oil extraction equipment to be installed in our Plant. Due to the downturn in the economy that occurred during the last six months of 2008, the third party we contracted with was unable to obtain financing for its operation until some time during 2009. The Company terminated its agreement with the third party during 2009 due to the Company’s decision not to install such equipment at this time. The Company may revisit this project in the future."
RED TRAIL ENERGY, LLC p.3
SkunK
PS. It is amaizing to think that only a few short months ago it was often repeated on the financial boards that Corn Oil Extraction was a myth. That it took more energy than it produced. That it was a basically flawed technology that would never pan out. That the patents would never be approved. All of that has now changed. And of course the SkunK is not the only one who has been pointing at these things - there are many who are trying to get the word out. The serious doubters have moved past these canards - now mostly looking at past performance to (mis)judge future events - you know the thing they always warn you against!
Sure, we all wish the PPS was "higher", the OS "tighter" and that the financial balance sheet was more . . . ahhh. . . "balanced". And the SkunK has been famously wrong about pps predictions in the past. But the distance COES have traveled in the last six months is nothing short of incredible. They are now pushed by the EPA as a proven technology. The GERS patents have been approved - multiple times. They are even now part of the standard clause as a requirement for expansion. And if we continue to move in this same direction, the SkunK sees a rose' future. More on that later. Good luck investors!
Tuesday, April 27, 2010
Is this the Tipping Point? Welcome Marquis Energy!
April 27, 2010 08:00 AM Eastern Daylight Time
NEW YORK--(BUSINESS WIRE)--GreenShift Corporation OTC Bulletin Board: GERS - News) today announced its execution of an agreement with Marquis Energy, LLC (“Marquis Energy”), pursuant to which GreenShift has granted Marquis Energy a license to use GreenShift’s patented corn oil extraction technologies at Marquis Energy’s 100 million gallon ethanol plant in Hennepin, Illinois.
Under the terms of the agreement, Marquis Energy will operate its existing facility based on GreenShift’s patented corn oil extraction technologies. In addition, GreenShift will provide Marquis Energy with technical support, yield optimization and corn oil marketing services with a view towards maximizing the performance and benefits of Marquis Energy’s existing corn oil extraction installation.
Mark Marquis, President and General Manager of Marquis Energy, stated that: “We are confident that the license with GreenShift is a win-win for both companies. The financial structure provides natural incentives for both Marquis Energy and GreenShift as we each gain from increased performance, yield and product value. GreenShift invented and patented its corn oil extraction processes, and the superior process knowledge and technical expertise of GreenShift’s team is clear. In only a few weeks, GreenShift was able to review our currently installed equipment and implement a technical plan that included a series of adjustments to systematically improve the reliability and production of our existing extraction system. Current results indicate that GreenShift has more than doubled our oil yields. We believe that we will make more money with GreenShift than without.”
See It all Here
Marquis Energy Here
SkunK
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Why may this be a tipping point?
There is an ongoing titanic struggle for the Corn Oil Extraction Business in the Ethanol Industry.
Speak softly and carry a big stick.
GreenShift - the first - the inventors - and armed with numerous patents are trying to make business partners out of the +40 or so Plant infringers who are already using their technology. Using increased technology and experience they are set to make a win/win situation for the plants - where they make more money and receive a license. One of the most important things in today's release is this: "Current results indicate that GreenShift has more than doubled our oil yields." Even with the assumed 20% royalties being paid this makes a HUGE addition to bottom line of the Ethanol Producers who come aboard. WE may see additional movement of the remaining plants who have un-patented COES as they realize the potential here! The very REAL threat of litigation is the big stick that hopefully is rarely swung.
ICM, as an example of the other side, is passing out indemnifications to their customers, which is said to protect ". . . harmless from all claims, liabilities, and costs including attorney fees arising out of the infringement . . ." Again, if you followed the SkunK's math you can see this promise seems empty - if it involves more than a couple customers and more than a short period of time. We have seen NO new non- patented corn oil extraction customers. We have seen the "Blow Out Sale" including tricanter centrifuges for sale at ICM. With huge costs and lead times to acquire centrifuges - it frankly appears to an outsider that ICM may be starting to cut bait while a trophy business partner just jumped in GreenShifts boat!
With yesterdays sighting of the sale of the
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ps. With Gobal Ethanol's previous announcement for the 100mmgy Plant at Lakota and today's 110mmgy Marquis Ethanol Plant - GreenShift is well over 20% of their #1 2010 goal of an additional billion gallons of Ethanol production tapped for corn oil production.
"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; "
Picture: This plant has a dang port on the Illinois River! Is that kool or what? Notice the plant in the background. I wonder how much this reduces shipping costs?
Located in Hennepin, IL, 45 miles north of Peoria on the Illinois River, this facility is currently producing 110 million gallons of ethanol per year. Marquis Energy also produces 330,000 tons of hi-protein bio-energy feed (DDG or Dried Distiller's Grain) and 1.7 million gallons of corn oil. Marquis Energy does all this by purchasing 40 million bushels of corn per year from Illinois producers.
Besides the river, which will also transport the plant’s corn and distillers grains, the site offers several other infrastructure benefits. “We’re near a mainline railroad that covers the East Coast markets,” Marquis said. “We’re near three interstates. We’ve got [access to] 250 million bushels of corn in an eight-county area. There’s an electric plant a mile away, and two natural gas pipelines adjacent to our property. This site is hard to beat in terms of infrastructure.”
Sunday, April 25, 2010
Inventory Blowout Sale! With update. . .
The SkunK already noted at the end of his last blog that we had an, "Inventory Blowout Sale" going on over at ICM. Curiously, if you put the word "centrifuges" from the drop down in the search you come up with three tricanter centrifuges for sale. Hey! Isn't the tricanter the centerpiece of the Tricanter Extraction System? Why sell them now? - Just when you need an expanding business to pass out those indemnifications?"ICM's oil extraction technology, which utilizes the Tricanter® centrifuge, . . ."
Update: For you early birds who checked this out last night, you may have noticed the two entries for centrifuges. One entry was for "1" and the other had "2" for a total of three. If you check it out now we are down to a total of two! Looks like a SkunK reader may be the proud owner of a new "tricanter centrifuge!" Let me know when you spin 'er up - we got some cloudy spring rhubarb wine with huge potential and I don't want to wait six months for it to settle out.
Update: For you early birds who checked this out last night, you may have noticed the two entries for centrifuges. One entry was for "1" and the other had "2" for a total of three. If you check it out now we are down to a total of two! Looks like a SkunK reader may be the proud owner of a new "tricanter centrifuge!" Let me know when you spin 'er up - we got some cloudy spring rhubarb wine with huge potential and I don't want to wait six months for it to settle out.
SkunK
SkunK Exclusive - an Inside Look - Indemnification Clause
SkunK found some details of the clause:
"Subsequent to year end, GS Clean Tech Corp. has filed a lawsuit against Big River Resources West Burlington, LLC and Big River Resources Galva, LLC in the U.S. District Court for infringement rights on its patent covering corn oil extraction technology. On July 1, 2009, Big River Resources Galva, LLC entered into a Corn Oil Tricanter Purchase and Installation Agreement with ICM, Inc. This agreement includes an indemnification clause that holds Big River Resources West Burlington, LLC and Big River Resources Galva, LLC harmless from all claims, liabilities, and costs including attorney fees arising out of the infringement of adversely owned patents. Due to this indemnification clause, the company does not expect to incur any costs related to the litigation. As such, no liability has been recorded as of December 31, 2009."
See it Here - p 24
SkunK
Wow - so now this has the SkunK worried a bit. Imagine if I had 20 non-patented COES units installed. I gave each an unlimited indemnification clause in an attempt to sell more units. Say each was producing at an average .7mmgy rate. At treble damages and 1.75/gal of corn oil that puts me on the hook for (700,000 x $1.75 x 20 x .6 =) $14.7Million dollars a year - or 73.5M in five years! If we figure that each unit sells for 3.6M (see here page 33) and say half went to my bottom line - I would need to sell over eight new units a year just to fill the tip jar and cover my liability. Each unit, of course, would increase my liability. Ahhh - am I digging a big hole or what??
Now this doesn't say my liability will end if the patents are enforced. I told these customers that they are:
". . . harmless from all claims, liabilities, and costs including attorney fees arising out of the infringement . . ."
So does that mean I will pay the GreenShift royalties until 3 January 2028 if the GreenShift patents are enforced? WOW! - thats (700,000 x 1.75 x 20 x .2 x 18yrs) over another 50 million dollars! - Not including all liability I assumed for those other units I sold to pay the previous bills.
It seems to the SkunK that this whole Indemnification will work. FOR A VERY SHORT PERIOD OF TIME AND FOR A VERY LIMITED NUMBER OF CLAIMS. Otherwise it quickly becomes unsustainable. It seems to an uninitiated outsider (me) that the legal strategy to consolidate the individual Ethanol Plant cases by the parts supplier into one giant case - (after all that is what the two recent stays were about) - only increases the chance that this is a win it all - or fold strategy.
***********
***********
OT - Playing Poker
Now I have played a card game or two over the years. I will be the first to say I am not real good - and luckily I have played mostly with those who were even worse. One important lesson I learned from those close to me who taught: The most important thing about a bluff is it must be believable.
Here is another poker pointer:
"Another thing that beginners should be care[ful] of when bluffing: Avoid bluffing against short-stack players. They tend to be quite a bit more desperate since they are on the verge of going out, so attempts to bluff them more than likely won't work."
Calling a bad bluff is the most common way for a short-stack player to get right back into the game.
PS
Blow Out Sale is On! Over 70 Pages of parts!
ALL PRICES REDUCED!
"Subsequent to year end, GS Clean Tech Corp. has filed a lawsuit against Big River Resources West Burlington, LLC and Big River Resources Galva, LLC in the U.S. District Court for infringement rights on its patent covering corn oil extraction technology. On July 1, 2009, Big River Resources Galva, LLC entered into a Corn Oil Tricanter Purchase and Installation Agreement with ICM, Inc. This agreement includes an indemnification clause that holds Big River Resources West Burlington, LLC and Big River Resources Galva, LLC harmless from all claims, liabilities, and costs including attorney fees arising out of the infringement of adversely owned patents. Due to this indemnification clause, the company does not expect to incur any costs related to the litigation. As such, no liability has been recorded as of December 31, 2009."
See it Here - p 24
SkunK
Wow - so now this has the SkunK worried a bit. Imagine if I had 20 non-patented COES units installed. I gave each an unlimited indemnification clause in an attempt to sell more units. Say each was producing at an average .7mmgy rate. At treble damages and 1.75/gal of corn oil that puts me on the hook for (700,000 x $1.75 x 20 x .6 =) $14.7Million dollars a year - or 73.5M in five years! If we figure that each unit sells for 3.6M (see here page 33) and say half went to my bottom line - I would need to sell over eight new units a year just to fill the tip jar and cover my liability. Each unit, of course, would increase my liability. Ahhh - am I digging a big hole or what??
Now this doesn't say my liability will end if the patents are enforced. I told these customers that they are:
". . . harmless from all claims, liabilities, and costs including attorney fees arising out of the infringement . . ."
So does that mean I will pay the GreenShift royalties until 3 January 2028 if the GreenShift patents are enforced? WOW! - thats (700,000 x 1.75 x 20 x .2 x 18yrs) over another 50 million dollars! - Not including all liability I assumed for those other units I sold to pay the previous bills.
It seems to the SkunK that this whole Indemnification will work. FOR A VERY SHORT PERIOD OF TIME AND FOR A VERY LIMITED NUMBER OF CLAIMS. Otherwise it quickly becomes unsustainable. It seems to an uninitiated outsider (me) that the legal strategy to consolidate the individual Ethanol Plant cases by the parts supplier into one giant case - (after all that is what the two recent stays were about) - only increases the chance that this is a win it all - or fold strategy.
***********
***********
OT - Playing Poker
Now I have played a card game or two over the years. I will be the first to say I am not real good - and luckily I have played mostly with those who were even worse. One important lesson I learned from those close to me who taught: The most important thing about a bluff is it must be believable.
Here is another poker pointer:
"Another thing that beginners should be care[ful] of when bluffing: Avoid bluffing against short-stack players. They tend to be quite a bit more desperate since they are on the verge of going out, so attempts to bluff them more than likely won't work."
Calling a bad bluff is the most common way for a short-stack player to get right back into the game.
PS
Blow Out Sale is On! Over 70 Pages of parts!
ALL PRICES REDUCED!
Saturday, April 24, 2010
The Bottom Line
Now the SkunK likes to keep things simple, and I have heard many a well thought out opinion over the years that I am well equipped for simple arguments. lol. Having read a complicated argument or two, I always choose to take "simple" as a complement. After all - most of life's decisions are easy if you remember what is important.
Lets take a look at four different forests and you decide where to plant your tree.
The First Scenario is an Ethanol Plant that decided today to go with a non-patented corn oil extraction system. Over the course of five years they produce 700,000 x 5 = 3.5Million gallons of corn oil worth about $1.75 x 3.5M = $6.125M in Ebitda. (This scenario assumes no plant risk in the present litigation. ) (The SkunK takes the ***announced Cardinal rate below (see last note) of .3965 mmgy and jumps it to .7 mmgy. I will fudge their numbers in their favor and add over 70% to the their announced rate of production - Why? Why not. Heck, they might have had some technical problems starting out.)
The Second Scenario is the first scenario after a final ruling in which the GreenShift patents are enforced* - and after five years - the plant is faced with treble royalty payments for having consciously violated an issued patent over the course of five years. The 6.125M in revenues minus 60% royalties equals $6.125 x .4 = $2.45M in Ebitda. (After faced with a $3.675 Million dollar partial judgement)
The Third Scenario is an Ethanol Plant that decided today to go with a Patented GreenShift Corn oil extraction system producing at a 1.1 mmgy rate. Over the course of five years they produce 1.1 x 5 = 5.5 Million gallons of corn oil worth about $1.75 x 5.5M = $9.625M. After a 20% payment of royalties $9.625 x .8 = they have earned $7.7M in Ebitda.
The Fourth Scenario is an Ethanol Plant that decided today to go with a Patented GreenShift Corn oil extraction system producing at a 1.5 mmgy rate.** Over the course of five years they produce 1.5 x 5 = 7.5Million gallons of corn oil worth about $1.75 x 7.5M = $13.125M. After 20% payment of royalties 13.125 x .8 = they have earned $10.5M in Ebitda.
*********************
SkunK
If its underlined when you put your mouse cursor over it - its a referenced link
The SkunK left out capital payments#, energy savings, lawyer costs, fees, sleepless nights, damages, et cetera, et cetera.
The four plants above are 50mmgy ethanol plants.
Corn Oil @ $1.75/Gallon
# Example of Capital payments p.33
Effective July 31, 2008, we amended our construction loan agreement to include a new loan up to the maximum amount of $3,600,000 for the purchase and installation of a corn oil extraction system and related
equipment.
* From Cardinal Annual Report p. 18
We may be subject to litigation involving our corn oil extraction technology. We have received written correspondence from GreenShift Corporation asserting its intellectual property rights to certain corn oil extraction processes we obtained from ICM, Inc. in August 2008. The correspondence from GreenShift indicates that it will seek to enforce its patent rights against ICM and the Company. According to information available through the U.S. Patent and Trademark Office, certain patents have been issued and other patents will be issued to GreenShift. If GreenShift files an intellectual property infringement action against the Company, GreenShift will likely seek damages from the Company. If GreenShift pursues an intellectual property claim against the property, we may incur significant expense in defending such claims and if GreenShift is victorious we may be force to pay damages to GreenShift as a result of our use of such technology.
**"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."
***This link suggests a 7.93mmgy annual rate of production for a 101mmgy/ year Ethanol plant. (note 14 months). Since the SkunK is using 50mmgy plants in his example we cut that in half to .3965mmgy/year of corn oil production- p. 1
"Since we began operations (14 months of production), we have ground nearly 42,500,000 bushels of corn, turning it into approximately 117,750,000 gallons of ethanol, 325,000 tons of DDGs and extracted about 925,000 gallons of corn oil. The first fiscal quarter of this year we achieved a net income of over $10,700,000."
Here is my math. Sometimes the "nine" sticks, but I did it twice:
117,750,000 / 14 = 8,410,071.42/month. 8,410,000 x 12 = 100.92857mmgy of Ethanol.
925,000 / 14 = 66,071/month. 66,071 x 12 = 792,857/year corn oil at a 100mmgy Ethanol Plant
792,857/ 2 = 396,428gy at a 50mmgy Ethano Plant.
EBITDA - definition of EBITDA - Earnings Before Interest, Taxes, Depreciation and Amortization.
Lets take a look at four different forests and you decide where to plant your tree.
The First Scenario is an Ethanol Plant that decided today to go with a non-patented corn oil extraction system. Over the course of five years they produce 700,000 x 5 = 3.5Million gallons of corn oil worth about $1.75 x 3.5M = $6.125M in Ebitda. (This scenario assumes no plant risk in the present litigation. ) (The SkunK takes the ***announced Cardinal rate below (see last note) of .3965 mmgy and jumps it to .7 mmgy. I will fudge their numbers in their favor and add over 70% to the their announced rate of production - Why? Why not. Heck, they might have had some technical problems starting out.)
The Second Scenario is the first scenario after a final ruling in which the GreenShift patents are enforced* - and after five years - the plant is faced with treble royalty payments for having consciously violated an issued patent over the course of five years. The 6.125M in revenues minus 60% royalties equals $6.125 x .4 = $2.45M in Ebitda. (After faced with a $3.675 Million dollar partial judgement)
The Third Scenario is an Ethanol Plant that decided today to go with a Patented GreenShift Corn oil extraction system producing at a 1.1 mmgy rate. Over the course of five years they produce 1.1 x 5 = 5.5 Million gallons of corn oil worth about $1.75 x 5.5M = $9.625M. After a 20% payment of royalties $9.625 x .8 = they have earned $7.7M in Ebitda.
The Fourth Scenario is an Ethanol Plant that decided today to go with a Patented GreenShift Corn oil extraction system producing at a 1.5 mmgy rate.** Over the course of five years they produce 1.5 x 5 = 7.5Million gallons of corn oil worth about $1.75 x 7.5M = $13.125M. After 20% payment of royalties 13.125 x .8 = they have earned $10.5M in Ebitda.
*********************
SkunK
If its underlined when you put your mouse cursor over it - its a referenced link
The SkunK left out capital payments#, energy savings, lawyer costs, fees, sleepless nights, damages, et cetera, et cetera.
The four plants above are 50mmgy ethanol plants.
Corn Oil @ $1.75/Gallon
# Example of Capital payments p.33
Effective July 31, 2008, we amended our construction loan agreement to include a new loan up to the maximum amount of $3,600,000 for the purchase and installation of a corn oil extraction system and related
equipment.
* From Cardinal Annual Report p. 18
We may be subject to litigation involving our corn oil extraction technology. We have received written correspondence from GreenShift Corporation asserting its intellectual property rights to certain corn oil extraction processes we obtained from ICM, Inc. in August 2008. The correspondence from GreenShift indicates that it will seek to enforce its patent rights against ICM and the Company. According to information available through the U.S. Patent and Trademark Office, certain patents have been issued and other patents will be issued to GreenShift. If GreenShift files an intellectual property infringement action against the Company, GreenShift will likely seek damages from the Company. If GreenShift pursues an intellectual property claim against the property, we may incur significant expense in defending such claims and if GreenShift is victorious we may be force to pay damages to GreenShift as a result of our use of such technology.
**"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."
***This link suggests a 7.93mmgy annual rate of production for a 101mmgy/ year Ethanol plant. (note 14 months). Since the SkunK is using 50mmgy plants in his example we cut that in half to .3965mmgy/year of corn oil production- p. 1
"Since we began operations (14 months of production), we have ground nearly 42,500,000 bushels of corn, turning it into approximately 117,750,000 gallons of ethanol, 325,000 tons of DDGs and extracted about 925,000 gallons of corn oil. The first fiscal quarter of this year we achieved a net income of over $10,700,000."
Here is my math. Sometimes the "nine" sticks, but I did it twice:
117,750,000 / 14 = 8,410,071.42/month. 8,410,000 x 12 = 100.92857mmgy of Ethanol.
925,000 / 14 = 66,071/month. 66,071 x 12 = 792,857/year corn oil at a 100mmgy Ethanol Plant
792,857/ 2 = 396,428gy at a 50mmgy Ethano Plant.
EBITDA - definition of EBITDA - Earnings Before Interest, Taxes, Depreciation and Amortization.
Friday, April 23, 2010
Beware of offers of indemnification
GreenShift counters ICM PR with devastating Press Release!
Infringement Was Not Denied
. . . Cardinal doesn’t deny that its ICM-designed corn oil extraction system is infringing GreenShift’s patent claims.
ICM’s Claims Were Rejected
. . . – the PTO considered and rejected the materials raised by ICM prior to the issuance of GreenShift’s first two patents in October 2009. Any producer that relies upon ICM’s continued claims of invalidity does so at its own peril.
Royalties Are Accruing
GreenShift has a statutory right to reasonable royalties for every pound of corn oil extracted with GreenShift’s technologies beginning as early as February 23, 2006, the publication date of GreenShift’s first patent.
Do Your Due Diligence
Ethanol producers are cautioned to fully investigate the facts and applicable patent laws as they relate to the viability of any indemnity, particularly under circumstances where the indemnitor’s exposure is multiplied by the number of indemnified producers and the ongoing infringement of each.
****************
See it ALL Here. (GreenShift Press Room) and Here (Biofuels Journal) and here (RFC Express - Federal Court Access) and here (News Blaze) and here (Forbes) and here (Europe)
SkunK
PS. The SkunK, as an investor, is interested in that last point. I guess Ethanol Producers - well all parties involved here - might be interested. I think what it is saying is we might have about 40 Ethanol Plant infringers. If One supplier installed half - or twenty units - and each unit was in full operation on average for two years - after the patent was published (23 Feb 2006) and prior to the patent being issued (13 Oct 2009) we would have 20 x 2 or about 40 years of straight line royalties. If we figure that any settlement after issue (13 Oct 2009) is three times royalties - and say this thing was settled on Monday - over half a year past the issue of the patent - we would add more than an additional 20 x 3 x .5 = 30 years of additional royalties. So with these rough numbers one can see that a single infringing supplier might be already on the hook for 70 years of indemnification.
A single year of Corn oil extraction might look like this. Lets be conservative and say production was only 700,000 gallons a year. (Less than half of GreenShifts proven yields). At an average of $1.75 (cost has been much higher over large chunks of this period) we have 1.225Million in income and at a twenty percent rate - about $245,000 in royalties per year/plant. This would put each hypothetical Ethanol parts supplier trying to cover each of their twenty plants on the hook for $17.15M before we even look at fines, additional damages, lawyer costs of both sides, etcetera, etcetera.
Since the SkunK believes we are now in the treble damages area - continuing to infringe in the face of an Issued Patent - any supplier who is claiming to cover some 20 plants in this scenario - does so at a rate of an additional $245,000 x 3 x 20 = $14.7M a year.
The question arises, at some point, what is the end game here? If you were facing treble damages in payments as a patent infringer - wouldn't you want to hurry this to court to get a settlement either way? If you were to win - better win early and rid yourself of this patent stuff. If you were to lose you could at least limit your potential treble damages to a smaller period of time. Limit potential risk. Limit needless risk. But Risk to who?
The Ethanol Plant Stakeholders must have a lot of question. If you were to lose - who pays the court costs? The damages, the treble damages, the fines, both sides lawyer costs? To what limit? When the judge says your plant has to pay - not the equipment supplier - and twenty other plants and the parts suppliers themselves are looking for help to make huge accrued royalty payments - Who gets covered first from that offers of indemnification? Did your plant give up the option to couter sue the parts supplier for not disclosing the GreenShift Patents in order to get a promise of indemnification?
It seems that only the government has a unlimited supply of money - and everywhere except the government - choices might have to be made.
Infringement Was Not Denied
. . . Cardinal doesn’t deny that its ICM-designed corn oil extraction system is infringing GreenShift’s patent claims.
ICM’s Claims Were Rejected
. . . – the PTO considered and rejected the materials raised by ICM prior to the issuance of GreenShift’s first two patents in October 2009. Any producer that relies upon ICM’s continued claims of invalidity does so at its own peril.
Royalties Are Accruing
GreenShift has a statutory right to reasonable royalties for every pound of corn oil extracted with GreenShift’s technologies beginning as early as February 23, 2006, the publication date of GreenShift’s first patent.
Do Your Due Diligence
Ethanol producers are cautioned to fully investigate the facts and applicable patent laws as they relate to the viability of any indemnity, particularly under circumstances where the indemnitor’s exposure is multiplied by the number of indemnified producers and the ongoing infringement of each.
****************
See it ALL Here. (GreenShift Press Room) and Here (Biofuels Journal) and here (RFC Express - Federal Court Access) and here (News Blaze) and here (Forbes) and here (Europe)
SkunK
PS. The SkunK, as an investor, is interested in that last point. I guess Ethanol Producers - well all parties involved here - might be interested. I think what it is saying is we might have about 40 Ethanol Plant infringers. If One supplier installed half - or twenty units - and each unit was in full operation on average for two years - after the patent was published (23 Feb 2006) and prior to the patent being issued (13 Oct 2009) we would have 20 x 2 or about 40 years of straight line royalties. If we figure that any settlement after issue (13 Oct 2009) is three times royalties - and say this thing was settled on Monday - over half a year past the issue of the patent - we would add more than an additional 20 x 3 x .5 = 30 years of additional royalties. So with these rough numbers one can see that a single infringing supplier might be already on the hook for 70 years of indemnification.
A single year of Corn oil extraction might look like this. Lets be conservative and say production was only 700,000 gallons a year. (Less than half of GreenShifts proven yields). At an average of $1.75 (cost has been much higher over large chunks of this period) we have 1.225Million in income and at a twenty percent rate - about $245,000 in royalties per year/plant. This would put each hypothetical Ethanol parts supplier trying to cover each of their twenty plants on the hook for $17.15M before we even look at fines, additional damages, lawyer costs of both sides, etcetera, etcetera.
Since the SkunK believes we are now in the treble damages area - continuing to infringe in the face of an Issued Patent - any supplier who is claiming to cover some 20 plants in this scenario - does so at a rate of an additional $245,000 x 3 x 20 = $14.7M a year.
The question arises, at some point, what is the end game here? If you were facing treble damages in payments as a patent infringer - wouldn't you want to hurry this to court to get a settlement either way? If you were to win - better win early and rid yourself of this patent stuff. If you were to lose you could at least limit your potential treble damages to a smaller period of time. Limit potential risk. Limit needless risk. But Risk to who?
The Ethanol Plant Stakeholders must have a lot of question. If you were to lose - who pays the court costs? The damages, the treble damages, the fines, both sides lawyer costs? To what limit? When the judge says your plant has to pay - not the equipment supplier - and twenty other plants and the parts suppliers themselves are looking for help to make huge accrued royalty payments - Who gets covered first from that offers of indemnification? Did your plant give up the option to couter sue the parts supplier for not disclosing the GreenShift Patents in order to get a promise of indemnification?
It seems that only the government has a unlimited supply of money - and everywhere except the government - choices might have to be made.
Thursday, April 22, 2010
GreenShift '858 Patent Extended
NEW YORK - (Business Wire) GreenShift Corporation (OTC Bulletin Board: GERS) announced today that the U.S. Patent and Trademark Office (“PTO”) has extended the term of U.S. Patent No. 7,601,858, titled "Method of Processing Ethanol Byproducts and Related Subsystems” (the ’858 Patent).
The ‘858 Patent, which was filed on May 5, 2005 and published on February 23, 2006, was previously scheduled to expire on May 5, 2025. The PTO extension pushes the expiration date out by 973 days to January 3, 2028, further strengthening the competitive advantage available to ethanol producers which license GreenShift’s technology.
“Our patented corn oil extraction technologies deliver important and timely benefits to the ethanol industry, facts which have been recognized by the EPA and repeatedly confirmed by the PTO,” said David Winsness, GreenShift’s Chief Technology Officer. “We are thankful for the additional time granted by the PTO and look forward to the continued opportunity to deliver additional value to the industry.”
See entire first released Article Here:
Others?
here and here and here and here and finally back here :~)
SkunK
The ‘858 Patent, which was filed on May 5, 2005 and published on February 23, 2006, was previously scheduled to expire on May 5, 2025. The PTO extension pushes the expiration date out by 973 days to January 3, 2028, further strengthening the competitive advantage available to ethanol producers which license GreenShift’s technology.
“Our patented corn oil extraction technologies deliver important and timely benefits to the ethanol industry, facts which have been recognized by the EPA and repeatedly confirmed by the PTO,” said David Winsness, GreenShift’s Chief Technology Officer. “We are thankful for the additional time granted by the PTO and look forward to the continued opportunity to deliver additional value to the industry.”
See entire first released Article Here:
Others?
here and here and here and here and finally back here :~)
SkunK
ICM comments on patent infringment case
New Article Just Released. Here is ICM's spin side of the recent rulings. :~)
Note this: "ICM strongly believes that GS CleanTech’s alleged patent claims are and will be proved to be invalid"
ICM does not claim that GreenShift does not have COES patents issued to them - how could they? - they are right here on the US Patent and Trademark site. ICM does not even appear to claim that their COE Systems do not infringe those GreenShift patents. ICM's claim seems based on a belief that the United States Patent Office somehow made a mistake or was negligent issuing the Corn Oil Extraction patent(s) to GreenShift.
Entire Article Right Here
SkunK
Note this: "ICM strongly believes that GS CleanTech’s alleged patent claims are and will be proved to be invalid"
ICM does not claim that GreenShift does not have COES patents issued to them - how could they? - they are right here on the US Patent and Trademark site. ICM does not even appear to claim that their COE Systems do not infringe those GreenShift patents. ICM's claim seems based on a belief that the United States Patent Office somehow made a mistake or was negligent issuing the Corn Oil Extraction patent(s) to GreenShift.
Entire Article Right Here
SkunK
Big River CEO Claims ICM will Pay ALL
The SkunK has wondered out loud how far ICM will go covering the potential risk to the companies who have installed the ICM Corn Oil Extraction System. This article seems to have answered that question.
Big River CEO Raymond Defenbaugh said April 12 that his company is confident in the case.
“We feel like we’re in safe territory, but should they (courts) decide against us, ICM has signed off to hold Big River harmless,” Defenbaugh said. “They’re covering us completely. If there is any recourse, they’re standing behind it completely.”
See it Here
**************************
The SkunK welcomes The Galva News to the story - who learned of the lawsuit last week. I'm sure that since this lawsuit has the potential to affect the local economy of their readers - they are likely to independently investigate the claims of both sides. They might want to start with this. Last paragraph - bottom of page six. (page 13 of the PDF)
Here is ICM's original News Release where Big River directs all further inquiries to ICM.
SkunK
Big River CEO Raymond Defenbaugh said April 12 that his company is confident in the case.
“We feel like we’re in safe territory, but should they (courts) decide against us, ICM has signed off to hold Big River harmless,” Defenbaugh said. “They’re covering us completely. If there is any recourse, they’re standing behind it completely.”
See it Here
**************************
The SkunK welcomes The Galva News to the story - who learned of the lawsuit last week. I'm sure that since this lawsuit has the potential to affect the local economy of their readers - they are likely to independently investigate the claims of both sides. They might want to start with this. Last paragraph - bottom of page six. (page 13 of the PDF)
Here is ICM's original News Release where Big River directs all further inquiries to ICM.
SkunK
Wednesday, April 21, 2010
Big River Stay
On March 17, 2010, an order was issued staying this case through April 20, 2010, pending the hearing for preliminary injunction that was scheduled for April 15, 2010 in the related case before Judge McKinney in the Southern District of Indiana.
On April 13, 2010, Judge McKinney issued an order staying the case before him and vacating the hearing for preliminary injunction set for April 15, 2010. The order also stated, “The Court will issue an order granting Defendant’s Motion to Transfer . . . after the Kansas District Court resolves the pending motions to dismiss or, in the alternative, to transfer.”
In the interest of judicial efficiency and in order to avoid duplicating efforts and/or issuing conflicting rulings, the instant case pending in the Northern District of Illinois is also stayed, pending the resolution of the pending motions in the related case before the Kansas District Court. The parties are to inform this court when the Kansas court has issued its ruling, so that this court may determine the most appropriate way to proceed in light of those rulings.
The hearing set for April 20, 2010 is stricken.
It is so ordered.
__________________________
Wayne R. Andersen
United States District Judge
*************
SEE IT HERE
SkunK
On April 13, 2010, Judge McKinney issued an order staying the case before him and vacating the hearing for preliminary injunction set for April 15, 2010. The order also stated, “The Court will issue an order granting Defendant’s Motion to Transfer . . . after the Kansas District Court resolves the pending motions to dismiss or, in the alternative, to transfer.”
In the interest of judicial efficiency and in order to avoid duplicating efforts and/or issuing conflicting rulings, the instant case pending in the Northern District of Illinois is also stayed, pending the resolution of the pending motions in the related case before the Kansas District Court. The parties are to inform this court when the Kansas court has issued its ruling, so that this court may determine the most appropriate way to proceed in light of those rulings.
The hearing set for April 20, 2010 is stricken.
It is so ordered.
__________________________
Wayne R. Andersen
United States District Judge
*************
SEE IT HERE
SkunK
FEW Fuel Ethanol and Expo: June 14th -17th
Gonna be in St Louis this summer? The GreenShift crew will be selling the benefits of patented COES at the FEW Conference - check out the booths at 1328 and 1330. Note Fagen - as well as ICM and Westfalia all have booths close by.
Check it out here
It looks like GreenShift has a primo position looking down the main aisle. Here is a map.
SkunK
Check it out here
It looks like GreenShift has a primo position looking down the main aisle. Here is a map.
SkunK
Monday, April 19, 2010
Found a Tad More
Spent some time going through the Annual report and found some more things that at least interest me.
The Company paid $3,370,875 in debt using 2.4B shares since the beginning of the year. Debt reduced.
The Bolheimer & Associates purchase was rescinded and settled based solely on the $80,000 paid at the closing in 2008. Debt reduced.
The Company is "involved in various collection matters for which vendors are seeking payment for services rendered and goods provided." Debt that needs to be reduced.
************
On page 47 - The Lakota COES is reported as "operational"
************
Now this is really something. The SkunK reads that as many as 40 Ethanol Producers are infringing. It sounds like GreenShift plans to file a lawsuit on each of them. You read it and tell me what you see. I see additional lawsuits - lots of them.
"The Company estimates that as many as 40 ethanol producers are infringing the Company’s patents. ICM has not denied in its pleadings that its equipment has been sold and is being used in a manner covered by the patents. GEA Westfalia’s pleadings also suggest that it admits that the Company’s patent claims cover processes utilized by ethanol producers that have purchased GEA Westfalia’s equipment. Rather, both parties rely upon arguments that the Company’s patents are invalid based upon prior art that has been considered and rejected by the U.S. Patent and Trademark Office (“PTO”). The Company believes these arguments have been fully considered and rejected by the PTO. The Company intends to file additional lawsuits involving any and all infringing use of the Company’s patents. The Company’s position is that any infringing ethanol producer is liable for a minimum of reasonable royalties for any infringing use of the Company’s patented technologies beginning on the publication date of the ‘858 Patent. The Company intends to seek additional relief for instances of intentional infringement." p.54
SkunK
The Company paid $3,370,875 in debt using 2.4B shares since the beginning of the year. Debt reduced.
The Bolheimer & Associates purchase was rescinded and settled based solely on the $80,000 paid at the closing in 2008. Debt reduced.
The Company is "involved in various collection matters for which vendors are seeking payment for services rendered and goods provided." Debt that needs to be reduced.
************
On page 47 - The Lakota COES is reported as "operational"
************
Now this is really something. The SkunK reads that as many as 40 Ethanol Producers are infringing. It sounds like GreenShift plans to file a lawsuit on each of them. You read it and tell me what you see. I see additional lawsuits - lots of them.
"The Company estimates that as many as 40 ethanol producers are infringing the Company’s patents. ICM has not denied in its pleadings that its equipment has been sold and is being used in a manner covered by the patents. GEA Westfalia’s pleadings also suggest that it admits that the Company’s patent claims cover processes utilized by ethanol producers that have purchased GEA Westfalia’s equipment. Rather, both parties rely upon arguments that the Company’s patents are invalid based upon prior art that has been considered and rejected by the U.S. Patent and Trademark Office (“PTO”). The Company believes these arguments have been fully considered and rejected by the PTO. The Company intends to file additional lawsuits involving any and all infringing use of the Company’s patents. The Company’s position is that any infringing ethanol producer is liable for a minimum of reasonable royalties for any infringing use of the Company’s patented technologies beginning on the publication date of the ‘858 Patent. The Company intends to seek additional relief for instances of intentional infringement." p.54
SkunK
Saturday, April 17, 2010
10-K Tidbits and 10K/A
I found a few things of interest with a fast read after my initial skim. We have about 929 shareholders who own about 10.87Billion shares of Stock. An average shareholder therefore owns about 11.61 Million shares worth about $3500 at .0003 PPS. Now you know - Are you average? lol
Greenshift had 17 employees as of 31 Dec 2009 and also a steady 17 as of 15 April 2010.
The first COES patent does not expire until 2027.
GreenShift Issued a 10-K/A which means a change to the Annual.is being filed to in order to correct errors contained in the Company’s cash flow statement for the years ended December 31, 2009 and December 31, 2008 relating to the impact of certain discontinued operations during 2009.
The COES are running at about 50-60% of designed rate due to lack of capital.
GreenShift, through GS Agrifuels, (which is inactive) still owns a 10% stake in Zeropoint Technology.
GS Design was liquidated 1Q 2010*, leaving only CleanTech active. GS CleanTech now is divided into three sources of business: Licensing; Commodities; Products and Services. GS CleanTech also owns a subsidary: GS COES (Yorkville I), LLC.I
Producted about 2.4 M gallons of corn oil last year - sold for about $3,796,000 - or about $1.61/gallon.
And finally here is some good news on the Montana suit:
The defendants served a separate action entitled Max, et al. v. GS AgriFuels Corporation, et al. in the Montana Fourth Judicial District Court in response to GS AgriFuels’ New York complaint; this Montana complaint was dismissed in January 2010. The New York court granted GS AgriFuels’ March 2010 motion for summary judgment as to liability on GS AgriFuels’ fraud and breach of contract claims on April 8, 2010.
SkunK
* Page 11 says 4Q 2009 while page 22 says 1Q 2010.
Greenshift had 17 employees as of 31 Dec 2009 and also a steady 17 as of 15 April 2010.
The first COES patent does not expire until 2027.
GreenShift Issued a 10-K/A which means a change to the Annual.is being filed to in order to correct errors contained in the Company’s cash flow statement for the years ended December 31, 2009 and December 31, 2008 relating to the impact of certain discontinued operations during 2009.
The COES are running at about 50-60% of designed rate due to lack of capital.
GreenShift, through GS Agrifuels, (which is inactive) still owns a 10% stake in Zeropoint Technology.
GS Design was liquidated 1Q 2010*, leaving only CleanTech active. GS CleanTech now is divided into three sources of business: Licensing; Commodities; Products and Services. GS CleanTech also owns a subsidary: GS COES (Yorkville I), LLC.I
Producted about 2.4 M gallons of corn oil last year - sold for about $3,796,000 - or about $1.61/gallon.
And finally here is some good news on the Montana suit:
The defendants served a separate action entitled Max, et al. v. GS AgriFuels Corporation, et al. in the Montana Fourth Judicial District Court in response to GS AgriFuels’ New York complaint; this Montana complaint was dismissed in January 2010. The New York court granted GS AgriFuels’ March 2010 motion for summary judgment as to liability on GS AgriFuels’ fraud and breach of contract claims on April 8, 2010.
SkunK
* Page 11 says 4Q 2009 while page 22 says 1Q 2010.
Friday, April 16, 2010
May 2010 - Ethanol Producer Magazine is out
Greenshift files patent infringement
Whole Article Here
The company [Courtland, Wis., Didion Ethanol] is adding corn oil extraction to reduce the load on the dryers, meaning distillers grains can be dried more efficiently and with less energy.
See Whole Article Here - Last Para
SkunK
Ps. Who is Didion Ethanol going with?
Whole Article Here
The company [Courtland, Wis., Didion Ethanol] is adding corn oil extraction to reduce the load on the dryers, meaning distillers grains can be dried more efficiently and with less energy.
See Whole Article Here - Last Para
SkunK
Ps. Who is Didion Ethanol going with?
Thursday, April 15, 2010
10-K Its out!
Expected Activity Moving Forward
While our existing corn oil extraction facilities and license agreements are producing sufficient cash flows to cover most of our minimum overhead requirements, we are currently evaluating opportunities to liquidate an 80% interest in these facilities to a strategic investor in order to repay a significant amount of our existing convertible debt in lieu of issuing additional shares of common stock. We accordingly intend to fund our principal liquidity and capital resource requirements through new financing and licensing activities.
******************
Cash Flows Provided By Operating Activities
Our top priority for 2010 is to execute several license agreements with ethanol producers to generate sufficient royalties for us to return to positive cash flow and to achieve profitability by the end of 2010.
******************
Cash Flows Provided By Financing Activities
We have sufficient capital sources committed to cover our minimum overhead requirements and the cost of prosecuting infringement of our patented extraction technologies for the foreseeable future. In addition, Fagen, Inc., an engineering and procurement contractor with extensive experience in the ethanol industry, has offered to provide financing for most of the costs needed for construction and installation of [four to six] extraction facilities based on our patented extraction technologies. We currently have no committed source of capital for the completion of construction of our existing extraction facilities. These facilities are collectively operating at about 50% of their aggregate design capacity due to a lack of capital.
*********************
Cash Flows Used In Investment Activities
After repaying a substantial amount of our convertible debt and achieving profitability, our long term plan includes the completion of significant new equity financing, possibly in the form of a secondary public offering or a large project financing, in order to greatly amplify and accelerate the construction of facilities based on our patented and patent-pending extraction and other technologies.
******************
As of April 15, 2010, there were 10,786,612,055 shares of common stock outstanding.
******************
Gross Profit
Gross profit for year ended December 31, 2009 was $1,222,992, representing a gross margin of 31.6% as compared to $(114,687), (2.5)%, in the comparable period of the prior year. The increase in margin as a percentage of sales was primarily due to the Company’s changed business operations during 2009.
****************
Our plans for the balance of 2010 involve the following activities:
Ø 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;
Ø Achieve profitability by the end of this year; and,
Ø Continue the 30% debt reduction realized in 2009 by reducing debt by an additional 30% during 2010.
*********************
ITEM 3 LEGAL PROCEEDINGS
INFRINGEMENT
On October 13, 2009, the U.S. Patent and Trademark Office issued U.S. Patent No. 7,601,858, titled "Method of Processing Ethanol Byproducts and Related Subsystems” (the ’858 Patent) to GS CleanTech Corporation, a wholly-owned subsidiary of GreenShift Corporation. On October 27, 2009, the U.S. Patent and Trademark Office issued U.S. Patent No. 7,608,729, titled "Method of Freeing the Bound Oil Present in Whole Stillage and Thin Stillage” (the ’729 Patent) to GS CleanTech. Both the ‘858 Patent and the ‘729 Patent relate to the Company’s corn oil extraction technologies.
On October 13, 2009, GS CleanTech filed a legal action in the United States District Court, Southern District of New York captioned GS CleanTech Corporation v. GEA Westfalia Separator, Inc.; and DOES 1-20, alleging infringement of the ‘858 Patent. On October 13, 2009, GS CleanTech filed a Motion to Dismiss with the same court relative to a separate complaint filed previously by Westfalia alleging (1) false advertising in violation of the Lanham Act § 43(a); (2) deceptive trade practices and false advertising in violation of New York General Business Law §§ 349, 350 and 350-a; and (3) common law unfair competition. On October 13, 2009, Westfalia filed its First Amended Complaint in the matter captioned GEA Westfalia Separator, Inc. and Ace Ethanol, LLC v. GreenShift Corporation, which complaint included Ace Ethanol, an ethanol production company, and added claims seeking a declaratory judgment of invalidity and/or non-infringement of the ‘858 Patent. On October 13, 2009, ICM, Inc. filed a complaint in the United States District Court, District of Kansas in the matter captioned ICM, Inc. v. GS CleanTech Corporation and GreenShift Corporation, alleging unfair competition, interference with existing and prospective business and contractual relationships, and deceptive trade practices. ICM is also seeking declaratory judgment of invalidity and non-infringement of the ‘858 Patent. On October 15, 2009, GS CleanTech filed a Notice of Filing First Amended Complaint for infringement of the ‘858 Patent, along with a copy of the First Amended Complaint, which added ICM, Ace Ethanol, Lifeline Foods LLC and ten additional DOES as defendants in the case pending in the Southern District of New York. In October 2009, GS CleanTech filed a Motion to Dismiss or Transfer the case to New York with respect to ICM’s Kansas lawsuit. These matters were only recently commenced, there have been no substantive rulings on the merits and Management is unable to characterize or evaluate the probability of any outcome at this time.
During February 2010, GS CleanTech commenced a legal action in the United States District Court, Southern District of Indiana captioned GS CleanTech Corporation v. Cardinal Ethanol, LLC, and a separate legal action in the United States District Court, Northern District of Illinois captioned GS CleanTech Corporation v. Big River Resources Galva, LLC and Big River Resources West Burlington, LLC. In addition to asserting claims for infringement of the ‘858 Patent in each of these cases, GS CleanTech filed a motion for preliminary injunction with each complaint. In each motion, GS CleanTech argued that it has sufficient evidence to prove that Cardinal and Big River are infringing GS CleanTech’s patented corn oil extraction technologies, and that this infringement has caused and will continue to cause irreparable harm to GS CleanTech. ICM sold Cardinal and Big River the equipment that each of Cardinal and Big River have used and are using to infringe the ‘858 Patent. ICM has assumed the defense of each of the above matters involving Cardinal and Big River, and petitioned the Indiana and Illinois courts to stay review of GS CleanTech’s motions for preliminary injunction in each case until the Kansas court referenced above rules on GS CleanTech’s pending motion to dismiss or to transfer to New York. These matters were only recently commenced and Management is unable to characterize or evaluate the probability of any outcome at this time.
The Company estimates that as many as 40 ethanol producers are infringing the Company’s patents. ICM has not denied in its pleadings that its equipment has been sold and is being used in a manner covered by the patents. GEA Westfalia’s pleadings also suggest that it admits that the Company’s patent claims cover processes utilized by ethanol producers that have purchased GEA Westfalia’s equipment. Rather, both parties rely upon arguments that the Company’s patents are invalid based upon prior art that has been considered and rejected by the U.S. Patent and Trademark Office (“PTO”). The Company believes these arguments have been fully considered and rejected by the PTO. The Company intends to file additional lawsuits involving any and all infringing use of the Company’s patents. The Company’s position is that any infringing ethanol producer is liable for a minimum of reasonable royalties for any infringing use of the Company’s patented technologies beginning on the publication date of the ‘858 Patent. The Company intends to seek additional relief for instances of intentional infringement.
The estimated completion times for assets recorded in construction in progress are as follows:
Location Current Status
Oshkosh, Wisconsin Operational
Medina, New York Operational
Marion, Indiana Operational
Riga, Michigan Operational
Lakota, Iowa Operational
http://www.sec.gov/Archives/edgar/data/1269127/000126912710000045/gers10k09.htm
SkunK
PS. Note: Executive Compensation on page 64
First note that is lists ALL compensation over the last three years.
The following table sets forth all compensation awarded to, earned by, or paid by GreenShift Corporation and its subsidiaries (or by third parties as compensation for services to GreenShift Corporation or its subsidiaries) to Kevin Kreisler, the Company’s Chief Executive Officer, Dave Winsness, the Company’s Chief Technology Officer, Greg Barlage, the Company’s Chief Operating Officer, Ed Carroll, the Company’s Chief Financial Officer, and Dr. Richard Krablin, the Company’s Executive Vice President, Special Projects.
Note that all five Officers/Directors rate $150,000 in salary. Most took just over 2/3rds of that - or $100,500 in 2009. Note also that the Chairman/CEO took less than 2/3 of even that - or $66,982 in 2009 in TOTAL compensation. Not exactly the narrative we read on the boards . . .
While our existing corn oil extraction facilities and license agreements are producing sufficient cash flows to cover most of our minimum overhead requirements, we are currently evaluating opportunities to liquidate an 80% interest in these facilities to a strategic investor in order to repay a significant amount of our existing convertible debt in lieu of issuing additional shares of common stock. We accordingly intend to fund our principal liquidity and capital resource requirements through new financing and licensing activities.
******************
Cash Flows Provided By Operating Activities
Our top priority for 2010 is to execute several license agreements with ethanol producers to generate sufficient royalties for us to return to positive cash flow and to achieve profitability by the end of 2010.
******************
Cash Flows Provided By Financing Activities
We have sufficient capital sources committed to cover our minimum overhead requirements and the cost of prosecuting infringement of our patented extraction technologies for the foreseeable future. In addition, Fagen, Inc., an engineering and procurement contractor with extensive experience in the ethanol industry, has offered to provide financing for most of the costs needed for construction and installation of [four to six] extraction facilities based on our patented extraction technologies. We currently have no committed source of capital for the completion of construction of our existing extraction facilities. These facilities are collectively operating at about 50% of their aggregate design capacity due to a lack of capital.
*********************
Cash Flows Used In Investment Activities
After repaying a substantial amount of our convertible debt and achieving profitability, our long term plan includes the completion of significant new equity financing, possibly in the form of a secondary public offering or a large project financing, in order to greatly amplify and accelerate the construction of facilities based on our patented and patent-pending extraction and other technologies.
******************
As of April 15, 2010, there were 10,786,612,055 shares of common stock outstanding.
******************
Gross Profit
Gross profit for year ended December 31, 2009 was $1,222,992, representing a gross margin of 31.6% as compared to $(114,687), (2.5)%, in the comparable period of the prior year. The increase in margin as a percentage of sales was primarily due to the Company’s changed business operations during 2009.
****************
Our plans for the balance of 2010 involve the following activities:
Ø 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;
Ø Achieve profitability by the end of this year; and,
Ø Continue the 30% debt reduction realized in 2009 by reducing debt by an additional 30% during 2010.
*********************
ITEM 3 LEGAL PROCEEDINGS
INFRINGEMENT
On October 13, 2009, the U.S. Patent and Trademark Office issued U.S. Patent No. 7,601,858, titled "Method of Processing Ethanol Byproducts and Related Subsystems” (the ’858 Patent) to GS CleanTech Corporation, a wholly-owned subsidiary of GreenShift Corporation. On October 27, 2009, the U.S. Patent and Trademark Office issued U.S. Patent No. 7,608,729, titled "Method of Freeing the Bound Oil Present in Whole Stillage and Thin Stillage” (the ’729 Patent) to GS CleanTech. Both the ‘858 Patent and the ‘729 Patent relate to the Company’s corn oil extraction technologies.
On October 13, 2009, GS CleanTech filed a legal action in the United States District Court, Southern District of New York captioned GS CleanTech Corporation v. GEA Westfalia Separator, Inc.; and DOES 1-20, alleging infringement of the ‘858 Patent. On October 13, 2009, GS CleanTech filed a Motion to Dismiss with the same court relative to a separate complaint filed previously by Westfalia alleging (1) false advertising in violation of the Lanham Act § 43(a); (2) deceptive trade practices and false advertising in violation of New York General Business Law §§ 349, 350 and 350-a; and (3) common law unfair competition. On October 13, 2009, Westfalia filed its First Amended Complaint in the matter captioned GEA Westfalia Separator, Inc. and Ace Ethanol, LLC v. GreenShift Corporation, which complaint included Ace Ethanol, an ethanol production company, and added claims seeking a declaratory judgment of invalidity and/or non-infringement of the ‘858 Patent. On October 13, 2009, ICM, Inc. filed a complaint in the United States District Court, District of Kansas in the matter captioned ICM, Inc. v. GS CleanTech Corporation and GreenShift Corporation, alleging unfair competition, interference with existing and prospective business and contractual relationships, and deceptive trade practices. ICM is also seeking declaratory judgment of invalidity and non-infringement of the ‘858 Patent. On October 15, 2009, GS CleanTech filed a Notice of Filing First Amended Complaint for infringement of the ‘858 Patent, along with a copy of the First Amended Complaint, which added ICM, Ace Ethanol, Lifeline Foods LLC and ten additional DOES as defendants in the case pending in the Southern District of New York. In October 2009, GS CleanTech filed a Motion to Dismiss or Transfer the case to New York with respect to ICM’s Kansas lawsuit. These matters were only recently commenced, there have been no substantive rulings on the merits and Management is unable to characterize or evaluate the probability of any outcome at this time.
During February 2010, GS CleanTech commenced a legal action in the United States District Court, Southern District of Indiana captioned GS CleanTech Corporation v. Cardinal Ethanol, LLC, and a separate legal action in the United States District Court, Northern District of Illinois captioned GS CleanTech Corporation v. Big River Resources Galva, LLC and Big River Resources West Burlington, LLC. In addition to asserting claims for infringement of the ‘858 Patent in each of these cases, GS CleanTech filed a motion for preliminary injunction with each complaint. In each motion, GS CleanTech argued that it has sufficient evidence to prove that Cardinal and Big River are infringing GS CleanTech’s patented corn oil extraction technologies, and that this infringement has caused and will continue to cause irreparable harm to GS CleanTech. ICM sold Cardinal and Big River the equipment that each of Cardinal and Big River have used and are using to infringe the ‘858 Patent. ICM has assumed the defense of each of the above matters involving Cardinal and Big River, and petitioned the Indiana and Illinois courts to stay review of GS CleanTech’s motions for preliminary injunction in each case until the Kansas court referenced above rules on GS CleanTech’s pending motion to dismiss or to transfer to New York. These matters were only recently commenced and Management is unable to characterize or evaluate the probability of any outcome at this time.
The Company estimates that as many as 40 ethanol producers are infringing the Company’s patents. ICM has not denied in its pleadings that its equipment has been sold and is being used in a manner covered by the patents. GEA Westfalia’s pleadings also suggest that it admits that the Company’s patent claims cover processes utilized by ethanol producers that have purchased GEA Westfalia’s equipment. Rather, both parties rely upon arguments that the Company’s patents are invalid based upon prior art that has been considered and rejected by the U.S. Patent and Trademark Office (“PTO”). The Company believes these arguments have been fully considered and rejected by the PTO. The Company intends to file additional lawsuits involving any and all infringing use of the Company’s patents. The Company’s position is that any infringing ethanol producer is liable for a minimum of reasonable royalties for any infringing use of the Company’s patented technologies beginning on the publication date of the ‘858 Patent. The Company intends to seek additional relief for instances of intentional infringement.
The estimated completion times for assets recorded in construction in progress are as follows:
Location Current Status
Oshkosh, Wisconsin Operational
Medina, New York Operational
Marion, Indiana Operational
Riga, Michigan Operational
Lakota, Iowa Operational
http://www.sec.gov/Archives/edgar/data/1269127/000126912710000045/gers10k09.htm
SkunK
PS. Note: Executive Compensation on page 64
First note that is lists ALL compensation over the last three years.
The following table sets forth all compensation awarded to, earned by, or paid by GreenShift Corporation and its subsidiaries (or by third parties as compensation for services to GreenShift Corporation or its subsidiaries) to Kevin Kreisler, the Company’s Chief Executive Officer, Dave Winsness, the Company’s Chief Technology Officer, Greg Barlage, the Company’s Chief Operating Officer, Ed Carroll, the Company’s Chief Financial Officer, and Dr. Richard Krablin, the Company’s Executive Vice President, Special Projects.
Note that all five Officers/Directors rate $150,000 in salary. Most took just over 2/3rds of that - or $100,500 in 2009. Note also that the Chairman/CEO took less than 2/3 of even that - or $66,982 in 2009 in TOTAL compensation. Not exactly the narrative we read on the boards . . .
2009 Annual Report
This 10-K should be out in the next four hours or so. I suggest that you click this link to get it first. I recommend that you start with the OS - just above the table of contents. Before you dig in I suggest you skim these key areas:
Management's Discussion and Analysis
DESCRIPTION OF PROPERTIES
LEGAL PROCEEDINGS
Next look for gallons of corn oil produced, cash on hand, and on and on . . .
Good Luck,
SkunK
Management's Discussion and Analysis
DESCRIPTION OF PROPERTIES
LEGAL PROCEEDINGS
Next look for gallons of corn oil produced, cash on hand, and on and on . . .
Good Luck,
SkunK
Wednesday, April 14, 2010
Stay Granted, Preliminary Injunction Vacated
ENTRY & ORDER
On April 13, 2010, the parties appeared by counsel for a Telephonic Status Conference. The parties informed the Court that the motions to dismiss or, in the alternative, to transfer remain pending in the United States District Court for the District of Kansas. The Court ruled on defendant’s, Cardinal Ethanol, LLC (“Defendant”), Motion to Stay and Transfer on the record. The Court Reporter was Fred Pratt.
For the reasons stated on the record, Defendant’s Motion to Stay (Dkt. No. 23) is GRANTED. The Hearing on plaintiff’s, GS Cleantech Corporation, Motion for Preliminary Injunction, set for Thursday, April 15, 2010, is hereby VACATED. The Court will issue an order granting Defendant’s Motion to Transfer (Dkt. No. 23) after the Kansas District Court resolves the pending motions to dismiss or, in the alternative, to transfer. The Court hereby ORDERS Defendant to file a Notice of Decision by the Kansas District Court after that court has issued its rulings.
IT IS SO ORDERED this 13th day of April, 2010.
ALL HERE
SkunK
I believe this means that Cardinal will be able to continue to produce corn oil during the proceedings that will continue to move forward. Although a preliminary injunction would have produced significant additional pressures to get an early settlement, if GreenShift eventually prevails, present production will likely be taken into account in the settlement. It seems that the next step is a promised decision in Kansas to dismiss or transfer. It seems things are being consolidated? To a single case? In New York? We should get some information in the Annual Report coming out today or tomorrow.
On April 13, 2010, the parties appeared by counsel for a Telephonic Status Conference. The parties informed the Court that the motions to dismiss or, in the alternative, to transfer remain pending in the United States District Court for the District of Kansas. The Court ruled on defendant’s, Cardinal Ethanol, LLC (“Defendant”), Motion to Stay and Transfer on the record. The Court Reporter was Fred Pratt.
For the reasons stated on the record, Defendant’s Motion to Stay (Dkt. No. 23) is GRANTED. The Hearing on plaintiff’s, GS Cleantech Corporation, Motion for Preliminary Injunction, set for Thursday, April 15, 2010, is hereby VACATED. The Court will issue an order granting Defendant’s Motion to Transfer (Dkt. No. 23) after the Kansas District Court resolves the pending motions to dismiss or, in the alternative, to transfer. The Court hereby ORDERS Defendant to file a Notice of Decision by the Kansas District Court after that court has issued its rulings.
IT IS SO ORDERED this 13th day of April, 2010.
ALL HERE
SkunK
I believe this means that Cardinal will be able to continue to produce corn oil during the proceedings that will continue to move forward. Although a preliminary injunction would have produced significant additional pressures to get an early settlement, if GreenShift eventually prevails, present production will likely be taken into account in the settlement. It seems that the next step is a promised decision in Kansas to dismiss or transfer. It seems things are being consolidated? To a single case? In New York? We should get some information in the Annual Report coming out today or tomorrow.
Tuesday, April 13, 2010
Should be Happen'ng
REVISED SCHEDULING ORDER
The Court REVISES the April 6, 2010, Scheduling Order setting a Telephonic Status Conference on Tuesday, April 13, 2010, at 11:00 a.m., to discuss the pending motion to stay (Dkt. No. 23). Parties, by counsel, shall call Judge McKinney’s main line at 317-229-3650.
IT IS SO ORDERED this 7th day of April, 2010.
************************
The 11 a.m. start time I believe is EST. So this should be going on or already done by now. Not sure how or when we will learn the results. Hopefully something will get posted in the court record within 24 hours or so and the SkunK or anyone can relay what they learn.
SkunK
This from the court site: "NOTICE: E-filing and PACER access to case information will be unavailable on Wednesday, April 14, 2010, from 6:00 AM (EDT) to 7:00 AM (EDT), due to scheduled system maintenance. Please plan accordingly."
The Court REVISES the April 6, 2010, Scheduling Order setting a Telephonic Status Conference on Tuesday, April 13, 2010, at 11:00 a.m., to discuss the pending motion to stay (Dkt. No. 23). Parties, by counsel, shall call Judge McKinney’s main line at 317-229-3650.
IT IS SO ORDERED this 7th day of April, 2010.
************************
The 11 a.m. start time I believe is EST. So this should be going on or already done by now. Not sure how or when we will learn the results. Hopefully something will get posted in the court record within 24 hours or so and the SkunK or anyone can relay what they learn.
SkunK
This from the court site: "NOTICE: E-filing and PACER access to case information will be unavailable on Wednesday, April 14, 2010, from 6:00 AM (EDT) to 7:00 AM (EDT), due to scheduled system maintenance. Please plan accordingly."
Sunday, April 11, 2010
Another Revenue Stream?
There is more to corn oil that just the conversion of the corn oil into biodiesel. For one thing, it saves the industry energy and money by making the DDGs easier to dry. Also, by taking the oil out, it concentrates the protein and makes the feed better and cheaper to maintain or feed out most animals. But it might also provide another “revenue stream” that we seldom talk about. A reader sent in this idea.
The extraction of oil from DDGs improves the digestibility of cattle feed. With higher protein inclusion, more nutrient uptake - less methane will exit . . . up the stack. Methane is very important since is at least 23 times more potent than carbon dioxide as a greenhouse gas.
The Basics
Each bushel of corn weighs about 56 pounds and contains about 2# of fat. 12 Billion gallons per year of ethanol produced uses about 4.3 Billion bushels of corn. The corn weighs about 242 billion pounds and contains the before mentioned 8.64 billion pounds of fat. According to the US EPA about 66% is extractable – or about 5.7 billion pounds of corn oil. If GreenShift COES make 70% penetration (EPA predicts someone will) then they could extract about about 3.9 billion pounds of fat/corn oil. (That’s well over half a billion gallons of Corn Oil!).
The Future
97 million head of cattle in the USA “contribute” about 140 TgCO2 equivalents (about 7 Million Tons) of methane through Enteric Fermentation. By taking out 3.9 billion pounds of fat from their diet – we will create a defatted, protein-enriched DDG diet that should yield less methane. The question is how many tons of methane? At only 2 dollars a ton in carbon offset price – and methane being at equivalent to 23 times carbon – what sort of carbon offset value have we created? Millions of tons could equal millions of dollars earned in carbon offsets. If we enter a world of “Cap and Trade” this may be yet another revenue stream for the corn oil extractor.
SkunK
Note that the units are Tg CO2 equivalent, (teragrams of CO2 equivalent) instead of million metric tonnes of carbon equivalent (MMTCE) reflecting the change in units used by the EPA to report U.S. greenhouse gas emissions. Carbon constitutes 12/44ths of carbon dioxide by weight.
PS. Note on the second page of this EPA article closely ties the digestablilty of cattle feed to the production of methane: "From 1990 to 2008, emissions from enteric fermentation have increased by 6.4 percent. Generally, emissions decreased from 1996 to 2003, though with a slight increase in 2002. This trend was mainly due to decreasing populations of both beef and dairy cattle and increased digestibility of feed for feedlot cattle. Emissions increased from 2004 through 2007, as both dairy and beef populations have undergone increases and the literature for dairy cow diets indicated a trend toward a decrease in feed digestibility for those years."
The extraction of oil from DDGs improves the digestibility of cattle feed. With higher protein inclusion, more nutrient uptake - less methane will exit . . . up the stack. Methane is very important since is at least 23 times more potent than carbon dioxide as a greenhouse gas.
The Basics
Each bushel of corn weighs about 56 pounds and contains about 2# of fat. 12 Billion gallons per year of ethanol produced uses about 4.3 Billion bushels of corn. The corn weighs about 242 billion pounds and contains the before mentioned 8.64 billion pounds of fat. According to the US EPA about 66% is extractable – or about 5.7 billion pounds of corn oil. If GreenShift COES make 70% penetration (EPA predicts someone will) then they could extract about about 3.9 billion pounds of fat/corn oil. (That’s well over half a billion gallons of Corn Oil!).
The Future
97 million head of cattle in the USA “contribute” about 140 TgCO2 equivalents (about 7 Million Tons) of methane through Enteric Fermentation. By taking out 3.9 billion pounds of fat from their diet – we will create a defatted, protein-enriched DDG diet that should yield less methane. The question is how many tons of methane? At only 2 dollars a ton in carbon offset price – and methane being at equivalent to 23 times carbon – what sort of carbon offset value have we created? Millions of tons could equal millions of dollars earned in carbon offsets. If we enter a world of “Cap and Trade” this may be yet another revenue stream for the corn oil extractor.
SkunK
Note that the units are Tg CO2 equivalent, (teragrams of CO2 equivalent) instead of million metric tonnes of carbon equivalent (MMTCE) reflecting the change in units used by the EPA to report U.S. greenhouse gas emissions. Carbon constitutes 12/44ths of carbon dioxide by weight.
PS. Note on the second page of this EPA article closely ties the digestablilty of cattle feed to the production of methane: "From 1990 to 2008, emissions from enteric fermentation have increased by 6.4 percent. Generally, emissions decreased from 1996 to 2003, though with a slight increase in 2002. This trend was mainly due to decreasing populations of both beef and dairy cattle and increased digestibility of feed for feedlot cattle. Emissions increased from 2004 through 2007, as both dairy and beef populations have undergone increases and the literature for dairy cow diets indicated a trend toward a decrease in feed digestibility for those years."
Friday, April 9, 2010
Friday Special: Please Don't Tell us how that Balloon got Inflated!
Cows absolved of causing global warming with nitrous oxide
In the past environmentalists, from Lord Stern to Sir Paul McCartney, have urged people to stop eating meat because the methane produced by cattle causes global warming. However a new study found that cattle grazed on the grasslands of China actually reduce another greenhouse gas, nitrous oxide.
The research will reignite the argument over whether to eat red meat after other studies suggested that grass fed cattle in the UK and US can also be good for the environment as long as the animals are free range.
See it all here.
Now, since its Friday - lets fire up the grill!
SkunK
PS. The SkunK used a simular picture in a blog over a year ago. Notice the ear tag on the cow in both pictures - "503". Either that poor beast has been wearing that embarrassing outfit for over a year - or the media recycles pictures from previous stories. You can see the strange fence in the background is the same in both pictures as well. You only get that kind of detail here! lol.
Review of the Big Week coming up
With the Annual Report and two hearings in the Cardinal Case - this should be an exciting week coming up.
The Telephone Hearing on the Cardinal motion to stay is still on the 13th - but the telephone number and procedure was just updated:
REVISED SCHEDULING ORDER
The Court REVISES the April 6, 2010, Scheduling Order setting a Telephonic Status Conference on Tuesday, April 13, 2010, at 11:00 a.m., to discuss the pending motion to stay (Dkt. No. 23). Parties, by counsel, shall call Judge McKinney’s main line at 317-229-3650. IT IS SO ORDERED this 7th day of April, 2010.
Hearing for Cardinal Motion of Preliminary Injunction is still set for 15 April. Wanna be a SkunK Reporter? See if you can observe the hearing at 9:00 a.m., in Courtroom 202, Birch Bayh Federal Building, United States Courthouse, 46 East Ohio Street, Indianapolis, Indiana. Email the SkunK a report or just post it in the comments of the current blog.
2009 Annual Report is due 15 April. Well it was technically due 31 March 2010, but an automatic 15 day extension is normally used. The dates of release from earliest to oldest over the previous three years were: April 16th, 7th, 17th. The way the weekends fall, the SkunK believes COB April 15th is the absolute deadline this year. [Will GreenShift be able to add a note in the Annual Report informing Investors about the outcome of the morning hearing??? The Annual is due later the same afternoon! We will see! ]
Big Rivers case is still stayed through April 20th 2010.
Point your cursor to the bold words above and if they become underlined - Click on them to go to the reference.
SkunK
The Telephone Hearing on the Cardinal motion to stay is still on the 13th - but the telephone number and procedure was just updated:
REVISED SCHEDULING ORDER
The Court REVISES the April 6, 2010, Scheduling Order setting a Telephonic Status Conference on Tuesday, April 13, 2010, at 11:00 a.m., to discuss the pending motion to stay (Dkt. No. 23). Parties, by counsel, shall call Judge McKinney’s main line at 317-229-3650. IT IS SO ORDERED this 7th day of April, 2010.
Hearing for Cardinal Motion of Preliminary Injunction is still set for 15 April. Wanna be a SkunK Reporter? See if you can observe the hearing at 9:00 a.m., in Courtroom 202, Birch Bayh Federal Building, United States Courthouse, 46 East Ohio Street, Indianapolis, Indiana. Email the SkunK a report or just post it in the comments of the current blog.
2009 Annual Report is due 15 April. Well it was technically due 31 March 2010, but an automatic 15 day extension is normally used. The dates of release from earliest to oldest over the previous three years were: April 16th, 7th, 17th. The way the weekends fall, the SkunK believes COB April 15th is the absolute deadline this year. [Will GreenShift be able to add a note in the Annual Report informing Investors about the outcome of the morning hearing??? The Annual is due later the same afternoon! We will see! ]
Big Rivers case is still stayed through April 20th 2010.
Point your cursor to the bold words above and if they become underlined - Click on them to go to the reference.
SkunK
Thursday, April 8, 2010
Note the "SkunK News Network" on the right hand side. It normally is further down, but I brought it up to show the press GERS is getting for high volume. Rather than blog on the articles, you can just click on the headline and go for it. This normally has the most current stories about us GreenShifter's favorite subject. . .
SkunK
SkunK
Wednesday, April 7, 2010
The ICM Patent?
Does ICM have a patent for a COES? We learn in the recent GreenShift Filing that ICM relies on this patent: 7,297,2361
"Cardinal's reliance on ICM's US patent number 7,297,2361 is also misplaced. (Opposition, p. 11). Cardinal essentially argues that since the '236 patent allegedly teaches heating thin stillage with steam during an evaporation stage of the dry milling process, then somehow the claims of the '858 patent are limited to heating thin stillage during a concentration stage of the dry milling process. (Id) This is simply not true.
This footnote says: The '236 patent is an ICM patent and shows the state of its technology, which did contemplate oil extraction from thin stillage." This Patent is described as "Ethanol distillation process". Here is the best short summary I could find:
"Thus, the invention process arrangement meets the objects noted above by providing an ethanol distillation process having evaporators in sets of evaporators that can be selectively taken off-line for cleaning and maintenance without effecting the operation of the overall ethanol distillation process. The problems associated with shutting down an ethanol distillation facility in order to clean and maintain evaporators have been eliminated. Moreover, the invention process arrangement meets the objects noted above by providing an ethanol distillation process in which second effect steam from a set of second effect evaporators can be used to provide heat for the beer column. This allows distillation to be conducted with a minimum usage of plant steam."
Although I'm sure this patent may provide a step forward (after all it was approved by the patent office), but to tell the truth, the SkunK could not find the word "extraction", in this "ICM" patent, and word the "oil" is only used inside the word "boil". The SkunK is not sure what it has to do with this case. Happy to find out if anybody can explain it to me in the comments of this post or an email. Both of the Blue quotes above come from the most recent GreenShift filing here. (bottom of page 5.)
SkunK
"Cardinal's reliance on ICM's US patent number 7,297,2361 is also misplaced. (Opposition, p. 11). Cardinal essentially argues that since the '236 patent allegedly teaches heating thin stillage with steam during an evaporation stage of the dry milling process, then somehow the claims of the '858 patent are limited to heating thin stillage during a concentration stage of the dry milling process. (Id) This is simply not true.
This footnote says: The '236 patent is an ICM patent and shows the state of its technology, which did contemplate oil extraction from thin stillage." This Patent is described as "Ethanol distillation process". Here is the best short summary I could find:
"Thus, the invention process arrangement meets the objects noted above by providing an ethanol distillation process having evaporators in sets of evaporators that can be selectively taken off-line for cleaning and maintenance without effecting the operation of the overall ethanol distillation process. The problems associated with shutting down an ethanol distillation facility in order to clean and maintain evaporators have been eliminated. Moreover, the invention process arrangement meets the objects noted above by providing an ethanol distillation process in which second effect steam from a set of second effect evaporators can be used to provide heat for the beer column. This allows distillation to be conducted with a minimum usage of plant steam."
Although I'm sure this patent may provide a step forward (after all it was approved by the patent office), but to tell the truth, the SkunK could not find the word "extraction", in this "ICM" patent, and word the "oil" is only used inside the word "boil". The SkunK is not sure what it has to do with this case. Happy to find out if anybody can explain it to me in the comments of this post or an email. Both of the Blue quotes above come from the most recent GreenShift filing here. (bottom of page 5.)
SkunK
Discuss the Pending Motion to Stay
SCHEDULING ORDER [in the Cardinal Case]
The Court, on its own motion, hereby SETS this matter for a Telephonic Status Conference on Tuesday, April 13, 2010, at 11:00 a.m., to discuss the pending motion to stay (Dkt. No. 23). Parties shall call the Court’s Conference Bridge at 317-229-3961. The first caller will hear a beep, then silence.
IT IS SO ORDERED this 6th day of April, 2010.
SEE IT HEAR
(SkunK Note) Remember the 13th above is about Cardinal's motion to stay the case. The 15th court date to argue the preliminary injunction about whether to shut down the Cardinals COES is still on. Two dates. Two big decisions coming up.
SkunK
The Court, on its own motion, hereby SETS this matter for a Telephonic Status Conference on Tuesday, April 13, 2010, at 11:00 a.m., to discuss the pending motion to stay (Dkt. No. 23). Parties shall call the Court’s Conference Bridge at 317-229-3961. The first caller will hear a beep, then silence.
IT IS SO ORDERED this 6th day of April, 2010.
SEE IT HEAR
(SkunK Note) Remember the 13th above is about Cardinal's motion to stay the case. The 15th court date to argue the preliminary injunction about whether to shut down the Cardinals COES is still on. Two dates. Two big decisions coming up.
SkunK
Tuesday, April 6, 2010
GreenShift's Answer to Cardinal
I mentioned before that GreenShift will file their brief on or before 5 April. Well here it is below - now whats left is the court date on the 15th - concerning the preliminary injunction against Cardinal - to shut down their non-patented COES. The SkunK picked out a few choice words that caught his eye. Read it all and figure for yourself what's important.
Cardinal further complains that it has invested several million dollars in purchasing and installing this equipment at a point where no alleged patent rights of CleanTech existed, and Cardinal Ethanol’s inability to recover that investment through corn oil sales, if enjoined, will cause it harm. However, at the same time, Cardinal boasts to the public that it will continue to infringe and that it is being indemnified by ICM. Cardinal’s complaint runs hollow since it knowingly assumed the risk of monetary damages and an injunction when it purchased equipment to perform a patent-pending method despite the existence of CleanTech’s published application. CleanTech has actively marketed its technology to the entire U.S. ethanol industry since 2004. CleanTech’s patent published in 2006. The industry was clearly on notice and aware of CleanTech’s patented technology. Cardinal’s equipment supplier, ICM, had actual specific knowledge of CleanTech’s pending application.
Yet, Cardinal ignored these risks and invested several million dollars in a system used solely to infringe CleanTech’s now-patented method.
The Federal Circuit has consistently held that “[o]ne who elects to build a business on a product found to infringe cannot be heard to complain if an injunction against continuing infringement destroys the business so elected.”
Cardinal does not deny - and thus admits - that its corn oil extraction system infringes the asserted claims of the '858 patent. Cardinal's invalidity arguments are primarily a rehashing of the prior art cited during the prosecution of the '858 patent and are also premised on Cardinal's fundamental misunderstanding of the invention as claimed. Although Cardinal argues that the invention in the '858 patent is invalid, Cardinal has failed to show that these novel methods were ever thought of prior to CleanTech's invention. As CleanTech has a very high likelihood of success on the merits and continues to suffer irreparable harm, the motion for preliminary injunction should be granted.
Given Cardinal's effective admission of infringement and its invalidity position consisting basically of a rehashing of the patent's prosecution history, CleanTech has a very high likelihood of success on the merits. Coupling this high likelihood of success with the irreparable harm suffered by CleanTech (including Cardinal's admitted continued willful infringement), this matter is ripe for the grant of a preliminary injunction.
The problem solved by the '858 patent One of the keys to CleanTech's invention - a point entirely missed by Cardinal - is the advantage of introducing thin stillage into the centrifuge after the thin stillage has been evaporated or concentrated by the removal of water content (i.e. moisture). In the Background of the Invention of the '858 patent, CleanTech explains:
Efforts to recover the valuable oil from this byproduct have not been successful [prior to GreenShift's Invention] in terms of efficiency or economy. For example, one approach involves attempting to separate the oil from the thin stillage before the evaporation stage, such as using a centrifuge. However, spinning the thin stillage at this stage does not produce usable oil, but rather merely creates an undesirable emulsion phase requiring further processing p.9
It is noteworthy that all of Cardinal's arguments related to the alleged invalidity of the '858 patent, including what would be obvious to skilled in the art, are nothing more than attorney argument.
What is absolutely fatal about Cardinal's argument is that its proposed thin stillage obtained a moisture content of 85%, not by concentrating the thin stillage to remove water thus weakening the bonds between the oil and water, but rather by virtue of simply diluting the water in the thin stillage with additional solids (i.e. 15% solids content). Consequently, if one were to introduce Cardinal's proposed thin stillage into a centrifuge it would primarily produce the undesirable emulsion described above because the oil and water bonds would not have been weakened during an evaporation or concentration step.
Finally, Cardinal's argument that CleanTech somehow dissuaded the examiner from reviewing certain provisions in Prevost is a complete red herring, thoroughly lacks merit and ignores the clear prosecution history.
Pivotally here, the court added that “[t]he fact that other infringers may be in the marketplace does not negate irreparable harm. A patentee does not have to sue all infringers at once. Picking off one infringer at a time is not inconsistent with being irreparably harmed.” Id. at 975 (emphasis added). After responding to declaratory judgment suits filed by centrifuge manufacturers in New York and Kansas, CleanTech continued to market its oil extraction technology only to continue to be rebuffed by almost the entire ethanol industry. It became clear that CleanTech would be harmed irreparably if it did not pursue preliminary injunctive relief. By targeting a clear direct infringer, such as Cardinal, CleanTech may be able to achieve a domino effect: not only will Cardinal stop infringing, but other infringers will also see that ethanol plants can be forced to cease infringing. Stopping one large direct infringer at a time is the most effective and efficient use of CleanTech’s and the judicial system’s scarce resources.
See it all Here!
Here is a Dave Winsness statement to go with it
SkunK
Cardinal further complains that it has invested several million dollars in purchasing and installing this equipment at a point where no alleged patent rights of CleanTech existed, and Cardinal Ethanol’s inability to recover that investment through corn oil sales, if enjoined, will cause it harm. However, at the same time, Cardinal boasts to the public that it will continue to infringe and that it is being indemnified by ICM. Cardinal’s complaint runs hollow since it knowingly assumed the risk of monetary damages and an injunction when it purchased equipment to perform a patent-pending method despite the existence of CleanTech’s published application. CleanTech has actively marketed its technology to the entire U.S. ethanol industry since 2004. CleanTech’s patent published in 2006. The industry was clearly on notice and aware of CleanTech’s patented technology. Cardinal’s equipment supplier, ICM, had actual specific knowledge of CleanTech’s pending application.
Yet, Cardinal ignored these risks and invested several million dollars in a system used solely to infringe CleanTech’s now-patented method.
The Federal Circuit has consistently held that “[o]ne who elects to build a business on a product found to infringe cannot be heard to complain if an injunction against continuing infringement destroys the business so elected.”
Cardinal does not deny - and thus admits - that its corn oil extraction system infringes the asserted claims of the '858 patent. Cardinal's invalidity arguments are primarily a rehashing of the prior art cited during the prosecution of the '858 patent and are also premised on Cardinal's fundamental misunderstanding of the invention as claimed. Although Cardinal argues that the invention in the '858 patent is invalid, Cardinal has failed to show that these novel methods were ever thought of prior to CleanTech's invention. As CleanTech has a very high likelihood of success on the merits and continues to suffer irreparable harm, the motion for preliminary injunction should be granted.
Given Cardinal's effective admission of infringement and its invalidity position consisting basically of a rehashing of the patent's prosecution history, CleanTech has a very high likelihood of success on the merits. Coupling this high likelihood of success with the irreparable harm suffered by CleanTech (including Cardinal's admitted continued willful infringement), this matter is ripe for the grant of a preliminary injunction.
The problem solved by the '858 patent One of the keys to CleanTech's invention - a point entirely missed by Cardinal - is the advantage of introducing thin stillage into the centrifuge after the thin stillage has been evaporated or concentrated by the removal of water content (i.e. moisture). In the Background of the Invention of the '858 patent, CleanTech explains:
Efforts to recover the valuable oil from this byproduct have not been successful [prior to GreenShift's Invention] in terms of efficiency or economy. For example, one approach involves attempting to separate the oil from the thin stillage before the evaporation stage, such as using a centrifuge. However, spinning the thin stillage at this stage does not produce usable oil, but rather merely creates an undesirable emulsion phase requiring further processing p.9
It is noteworthy that all of Cardinal's arguments related to the alleged invalidity of the '858 patent, including what would be obvious to skilled in the art, are nothing more than attorney argument.
What is absolutely fatal about Cardinal's argument is that its proposed thin stillage obtained a moisture content of 85%, not by concentrating the thin stillage to remove water thus weakening the bonds between the oil and water, but rather by virtue of simply diluting the water in the thin stillage with additional solids (i.e. 15% solids content). Consequently, if one were to introduce Cardinal's proposed thin stillage into a centrifuge it would primarily produce the undesirable emulsion described above because the oil and water bonds would not have been weakened during an evaporation or concentration step.
Finally, Cardinal's argument that CleanTech somehow dissuaded the examiner from reviewing certain provisions in Prevost is a complete red herring, thoroughly lacks merit and ignores the clear prosecution history.
Pivotally here, the court added that “[t]he fact that other infringers may be in the marketplace does not negate irreparable harm. A patentee does not have to sue all infringers at once. Picking off one infringer at a time is not inconsistent with being irreparably harmed.” Id. at 975 (emphasis added). After responding to declaratory judgment suits filed by centrifuge manufacturers in New York and Kansas, CleanTech continued to market its oil extraction technology only to continue to be rebuffed by almost the entire ethanol industry. It became clear that CleanTech would be harmed irreparably if it did not pursue preliminary injunctive relief. By targeting a clear direct infringer, such as Cardinal, CleanTech may be able to achieve a domino effect: not only will Cardinal stop infringing, but other infringers will also see that ethanol plants can be forced to cease infringing. Stopping one large direct infringer at a time is the most effective and efficient use of CleanTech’s and the judicial system’s scarce resources.
See it all Here!
Here is a Dave Winsness statement to go with it
SkunK
New 8-K
Dated April 5, 2010
On March 31, 2010 GreenShift filed with the Delaware Secretary of State a Certificate of Amendment of its Certificate of Incorporation. The effect of the amendment was to increase the number of authorized shares of common stock to 20 billion.
See All HERE
SkunK
On March 31, 2010 GreenShift filed with the Delaware Secretary of State a Certificate of Amendment of its Certificate of Incorporation. The effect of the amendment was to increase the number of authorized shares of common stock to 20 billion.
See All HERE
SkunK
Monday, April 5, 2010
I 'll take it Medium Rare, Please
He is somethnig light to start off the week.
The green food choice may not be so green
If everyone became vegan and so ate only fruit and vegetables, then the reduction in greenhouse emissions for the whole of food consumption would be a mere 7%. The widespread adoption of vegetarianism would have even less impact, while organic food production actually leads to a net increase in greenhouse gas emissions.
SkunK
The SkunK is all about liberty, so whatever your food choices are , and for whatever reason: Good for you! As for me, if the varmint is moving slow enough to catch, I'm eaten it.
The green food choice may not be so green
If everyone became vegan and so ate only fruit and vegetables, then the reduction in greenhouse emissions for the whole of food consumption would be a mere 7%. The widespread adoption of vegetarianism would have even less impact, while organic food production actually leads to a net increase in greenhouse gas emissions.
SkunK
The SkunK is all about liberty, so whatever your food choices are , and for whatever reason: Good for you! As for me, if the varmint is moving slow enough to catch, I'm eaten it.
Saturday, April 3, 2010
Advanced Technologies: CORN OIL EXTRACTION
Ethanol producers are required to register with the EPA in accordance with the Renewable Fuels Standard. Here is a Checklist put out by the Renewable Fuels Association to help with the registration. In order to get a good code they need to show a couple advanced technologies - Notice "Corn Oil Extraction" is one of those prominently listed in the first question:
*******************
Step 1: Determine whether renewable fuel produced at facility is eligible for an RFS2 D Code.
Is there an applicable approved pathway for conventional ethanol?
Corn ethanol produced using one of the following processes:
__ Dry mill using natural gas, biomass or biogas that uses one of the following:
__ At least two advanced technologies (Corn oil fractionation; Corn oil extraction; Membrane separation; Raw starch hydrolysis; Combined heat and power)
__ At least one advanced technology and dries no more than 65% of distiller grains annually
__ Dries no more than 50% of distiller grains annually
********************
SEE REST HERE
More Information
SkunK
*******************
Step 1: Determine whether renewable fuel produced at facility is eligible for an RFS2 D Code.
Is there an applicable approved pathway for conventional ethanol?
Corn ethanol produced using one of the following processes:
__ Dry mill using natural gas, biomass or biogas that uses one of the following:
__ At least two advanced technologies (Corn oil fractionation; Corn oil extraction; Membrane separation; Raw starch hydrolysis; Combined heat and power)
__ At least one advanced technology and dries no more than 65% of distiller grains annually
__ Dries no more than 50% of distiller grains annually
********************
SEE REST HERE
More Information
SkunK
Cardinal's Reply
If the SkunK were writing this for the Defense, he would have inserted "alleged" in the following quote: Otherwise it appears that Cardinal admits that there is a "patent infringement issue" - a surprising assertion for the defense: ". . . to resolve the very same patent infringement issue." 1stPara, page 3 Shouldn't they be arguing that there is "no patent infringement issue" rather than admitting that there "is" an issue here with patent infringement? Once you admit a crime took place - what does the defense have left? Somebody else did it? Not being a lawyer, I obviously am missing something here . . . Maybe this is what they call a gambit -it is surely a clever stratagem - 'cause I cannot fathom what they gained by admitting there is an issue with patent infringment . . .
Here is an interesting short: ". . . the pending motions in Kansas have been fully briefed, and a resolution of those motions is imminent."
Here is Cardinal's Reply
or try this secondary link
SkunK
PS Happy Easter and Happy Passover to all . . .
Here is an interesting short: ". . . the pending motions in Kansas have been fully briefed, and a resolution of those motions is imminent."
Here is Cardinal's Reply
or try this secondary link
SkunK
PS Happy Easter and Happy Passover to all . . .
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