Monday, August 30, 2010

The North Dakota Industrial Commission

The North Dakota Industrial Commission gives taxpayer money to innovative industry in North Dakota.  The Renewable Energy Council  is a part of that Commission that provides financial assistance as appropriate to foster the development of renewable energy in North Dakota.  The Department of Commerce is directed by the legislature to  ". . . provide technical assistance to the Renewable Energy Council and the Industrial Commission to carry out the law. . . "

On 4 March 2009, Jeff Zueger, the General Manager of Blue Flint Ethanol , came before The Renewable Energy Council and requested and received a half million taxpayer dollars to help pay for a Corn Oil Extraction unit.  Meeting Minutes HERE.

Let me just point out a few highlights of those minutes:

1.  "Commerce’s recommendation is not to fund. The main goal of the REP is to provide funding for research, development, marketing, and education. (1) Given that the technology [Corn Oil Extraction]is already established, we do not feel that the objective of the proposal clearly resonates with the main goal of the REP. (2) Because the project is only cost‐effective with a grant award, it appears that this is more a financing project as opposed to a research, development, marketing, or education project." 

SkunK's Comment:  It looks like the North Dakota Commerce Department had done their research.  By March of 2009 the technology WAS OBVIOUSLY WELL ESTABLISHED.

2.  "In response to a question from Goettle, Zueger stated it [Corn Oil Extraction] has been explored minimally at this point. Has been done on a pilot basis by two companies. Heat exchanger and dewaxing is unique in this process."

SkunK's Comment:  Explored minimally??  Can he be serious???  A simple Google search at the time would have shown that to be a "problematic" statement.  Remember this is about four and a half years after Winsness filed his provisional patent and over three years since GreenShift had to (by law) publish their patent pending.  GreenShift had COES units scattered throughout the midwest.*  Heat exchanger and dewaxing unique?  Corn Oil Extraction isn't just about spinning stuff really, really fast.  Success depends on the right temperatures at the right time to break the bonds of the oil without creating sludge.  Heat exchangers were always part of the real solution from the beginning.  The challenges of the Free fatty acids and the wax were also well known.  De-waxing was always part of the solution either at the COES or at the biodiesel refinery.  Unique?  Hmmmm . . .

3.  "In response to a question from Nisbet, Weeda stated they don’t anticipate developing patents."

LOLOLO, the SkunK wonders if this would have been a good time to mention the GreenShift patents?  (pending at the the time)  "Oh, by the way fellows, the process we are trying to develop (mimic?) here is within a couple months of being allowed by the patent office for a company we forgot to mention: GreenShift."    

In any case, they turned the board who ended up voting (5-0) - a half million of the taxpayer's money to finance this 'new' and 'unique' thing called a  . . .  corn oil extraction system.  Of course, we see ICM mentioned in the minutes as well . . .

The final report to the commission for this 5 month project (now 15 month!) has been extended twice and is due no later than 31 August 2010 - tommoro!  That should be an interesting read - I wonder if GreenShift or their issued patents come up in the conversation this time? How about the patent litigation pending against Blue Flint Ethanol and ICM?
SkunK

*Little Sioux Corn Processors, a 50 MMgy plant in Marcus, Iowa, began using GreenShift’s technology in the spring of 2006. Utica Energy LLC in Oshkosh, Wis., began using it in the spring of 2007.   Western New York Energy LLC in Median, N.Y., began extracting corn oil in February, (2008) and Central Indiana Ethanol

New feature to the blog! 
Voices Conversations in the SkunK's head:
Although I enjoy researching this as a hobby during my ever scarcer free time, are there no reporters in North Dakota?  You know, ones who get paid to do investigative reporting?  This is a half million dollars in public funds . . . to develop a "new" process that had a patent published for it years before.  geezze. .

Com'on SkunK - Admit it.  You may be a lovable old basset hound - but your an unsophisticated one as well!  You missed all the finery and lace around this obviously complicated subject!  There are im'potant people involved here! What does your editor think?  That's right, you don't have one!  Hahahaha!

Well, if I got this wrong - then so did the the North Dakota Department of Commerce - who the legislature set up to provide technical assistance and prevent just these types of problems.  Maybe I should not be asking for an investigative reporter - maybe the SkunK should be first asking for an informed legislator?  How often does this commission go against the clear recommendation of Commerce by a 5-0 vote?  Why?  Their were three members of Commerce at the meeting.  Why did they not present?  Is their detailed report why Corn Oil Extraction was already established science part of the public record?  Why not?

I think we need a nap!

Sunday, August 29, 2010

Heart of the Matter

This is a long blog.  Its the heart of the finances going forward.  I tried to edit it down, but my "readers digest" superhero powers failed me.  So I tried to translate and condense after each paragraph with comments in red.  Not perfect, but it gives you the whole picture AND my worthless well though out, original opinions. Appreciate any help by the readers in the comments section.

LIQUIDITY AND CAPITAL RESOURCES

Our financial position and liquidity are, and will be, influenced by a variety of factors, including our ability to
properly capitalize and generate cash flows from our operations, the level of our outstanding indebtedness and the interest we are obligated to pay on that indebtedness. Our primary sources of liquidity during the three months ended June 30, 2010, included commodity sales and the proceeds from issuance of debt and common stock. During the six months ended June 30, 2010, net cash used in our operating activities was $1,104,080, as compared to the $334,586 used by our operating activities during the same period last year. The primary reason for the different results was that cash produced from licensing activities during 2010 was used to reduce certain liabilities. In addition, during the six months ended June 30, 2010 we obtained $1,608,163 in net proceeds from the sale of convertible debentures and used almost all of that for our operations. We also used $145,573 to expand our property and equipment during the first six months of 2010. During the six months ended June 30, 2009 we obtained $1,180,579 in net proceeds from the sale of convertible debentures but used about $779,000 in construction activities. Any cash we generate from our operating activities in the future will be applied to our operations until we exceed our cash flow break even point and thereafter, albeit at a planned decreasing percentage of sales; and, until we have reduced our current liabilities to equal or less than our current assets, the amount of cash that we have available for use in operations beyond break even will also be determined by the amount of cash that we can obtain from our financing activities.
(Revenues from production goes to operations - till now hasn't been enough - difference is being made up by CDs.  As revenues increase beyond break even - cash will be used to lower debt until current liabilities equal assets.) 


Access to Capital


We received proceeds from financing activities totaling $1,608,136 during the six months ended June 30, 2010. Viridis Capital, LLC ("Viridis"), Minority Interest Fund (II), LLC ("MIF"), Acutus Capital, LLC("Acutus"), and management personnel continue to provide us with the cash resources we require for our overhead needs, including all legal expenses incurred in the prosecution of infringing use of our patented technologies. Viridis is owned by our chairman, MIF is owned by a family member of our chairman, and Acutus is owned by our chairman's attorney and former professor. These investors collectively provided us with a total of $3,821,670 during the year ended December 31, 2009.
(The CDs are converted to cash for operations (A biggy is legal costs to prosecute infringment.  Provided by three LLCs.  Viridis Capital (Kevin Kreisler), MIF (Lawrence Kreisler?) and  Acutus Capital.)


In total, Viridis (along with our chairman personally and an entity held in trust for the benefit of our chairman's wife (the "Kreisler Trust")), MIF, Acutus and current management have provided GreenShift and its affiliated companies and subsidiaries with more than $14,432,307 in cash between January 1, 2005 and June 30, 2010. Viridis, the Kreisler Trust and our chairman collectively loaned $8,329,355 of this cash amount, about half of which was subsequently canceled, forgiven and contributed to shareholders' equity.
(Insiders pushing close to all-in)

We plan to continue to rely on proceeds from financing activities completed with these and other investors while we execute on our plan to increase sales to generate sufficient cash flows from operating activities to cover all of our overhead needs on an ongoing basis. We have recently executed new license agreements that we expect will generate royalties in excess of our break-even costs and possibly at a level sufficient to realize profitability. We expect that we will start realizing these increased revenues upon the completion of assembly and installation of the equipment and components needed to apply our patented technologies at the relevant licensed ethanol plants in late 2010 or early 2011.
(On cusp of making money)


In the meantime, we intend to use our available capital resources as judiciously as possible. Thus, while we would prefer to have a sizeable cash reserve (we only had about $14,944 cash as of June 30, 2010), the most cost-effective use of our resources under current market circumstances is to receive a number of small investments on a quarterly or more frequent basis at levels that match our ongoing operating cash needs.
(Cash reserves are down, but cash is available in small investments to meet operating needs.)


We have limited alternatives available to us for capital formation due to the state of our balance sheet and our capital structure. The available financing options typically take the form of convertible debt and similar derivative structures through which investors purchase securities in the Company that are convertible into our common stock in the future at a discount to either current prices or the market price at the time of conversion. This type of structure helps to mitigate risk for the source of the investment but it is also expensive and potentially very dilutive to the Company. Raising capital with these structures is not desirable moving forward. This type of debt can, however, be cost-effective if the proceeds are used to generate sufficient recurring earnings to justify refinancing of the convertible debt at higher equity values and thus lower overall costs of capital to the Company and its shareholders. We used over $50 million of this type of financing to invent, develop and commercialize our portfolio of cleantech, importantly including our now-patented corn oil extraction technologies. The cost-effective repayment of this debt remains a key objective. For example, we entered into agreements with a subsidiary of GE Energy Financial Services and YA Global Investments, L.P. in late 2008 for $38 million in equity financing to repay a significant amount of our debt and to build new facilities based on our patented and patentpending technologies (this financing unfortunately did not close as expected in the first quarter of 2009 due to turmoil in global commodity and financial markets at the time). We were successful in positioning GreenShift to receive significant capital for debt reduction and growth from strategically valuable capital sources in the past, and we intend to do so again in the future.
(Balance sheet makes it hard to get reasonable financing, pay down the debt and doors will open)


Repayment of Technology Development Debt


During 2009 and the first six months of 2010, we satisfied a total of $5,670,000 and $2,681,304 in convertible debt, respectively, by issuing Company common shares upon conversion by the debt holders. A key challenge and objective for us is to decrease and satisfy our existing convertible debt to YA Global in cost-effective ways by both avoiding the issuance of new convertible debt on expensive terms and by minimizing the issuance of common stock as much as possible. While the cash proceeds provided by our financing activities during 2009 and the first quarter 2010 mostly involved issuance of new convertible debt to Viridis, MIF, Acutus and management, the pricing and other terms of that debt were on average much more favorable to the Company than terms available from any other investors; and, Viridis and MIF have expressed a willingness to fully convert all debt into equity on advantageous terms for GreenShift after we have satisfied the substantial majority of the convertible debt due to YA Global.
(CDs to Viridis, MIF, Acutus and management are currently best financing available.  Once YA Global debt is mostly paid, Viridis and MIF may pay off rest of debt for a stock position.  The SkunK believes that once YA Global is mostly paid off, the preferred shares that Mr. Kreisler holds for them as collateral becomes no longer required.  Getting rid of that situation will make the position of common shareholders as well as any future equity offering much more attractive.)


Our ambition is to reduce and satisfy as much as possible of the remaining convertible debt that we currently owe to YA Global from sources not involving issuance of new common shares. We executed agreements in June 2010 for a transaction that closed during the third quarter 2010 involving the transfer of four partially completed GreenShift owned corn oil extraction facilities to a joint venture with YA Global. The transfer of these facilities to our joint venture with YA Global allows us to repay a significant amount of our existing debt in a way that stabilizes our balance sheet and preserves the value of our shareholders’ equity. Importantly, we reduced debt by $10,000,000 under this transaction without issuing common shares, and we have the ability to reduce debt by another $7,700,000 without issuing stock by meeting moving forward goals tied to the joint venture’s performance. We are currently evaluating opportunities for additional debt reduction.
(Saved 10M of shareholder dilution, chance to save 7.7M more.)


We have a great deal of resources invested into the development of our patented and patent-pending technologies, specifically our now-patented corn oil extraction technologies. Each of our stated goals for 2010 above (increase sales, achieve profitability, and repay our technology development debt) are based on using our patented corn oil extraction technologies and the balance of our Backend Fractionation™ technology portfolio to earn business and to partner with ethanol producers to increase their profitability.
(Focused on earning new business.)
 
2Q P29-30

SkunK

Friday, August 27, 2010

Debt Restructure

No news here for the regular readers, just the fact that this news has made the 'journal of record' for the E Industry.
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Ethanol Producer Magazine Sept 2010
In June, Greenshift Corp. and YA Global Investments LP executed several agreements designed to reduce and restructure Greenshift’s debt to YA Global. The companies formed a joint venture—YA Corn Oil Systems LLC—into which Greenshift will transfer up to five of its corn oil extraction facilities in exchange for a reduction of up to $11.7 million in convertible debt by YA Global. Greenshift will receive a 20 percent equity stake in the joint venture and will provide management services to the company in exchange for management and brokerage fees, as well as earnings-based performance bonuses paid in the form of up to an additional $6 million reduction in debt owed to YA Global.

SEE HERE
SkunK

Thursday, August 26, 2010

Ethanol Producer Magazine

Patent infringement cases consolidated

Fourteen ethanol plants and two technology/manufacturing companies named in a patent infringement lawsuit will have their cases tried in the Southern District of Indiana after a U.S. Judicial Panel on Multidistrict Litigation ruled that the cases will be consolidated.
SEE HERE
 
SkunK
PS.  Where the SkunK believes the Ethanol Producer Magazine has got it wrong is implying that the cases will be all tried in the Southern District of Indiana.  That is where all the pre-trial motions and discovery will take place - but if it goes that far - the cases will be sent back to the original venues for trial.  At least that is what I get from this legal mumbo jumbo from the MDL web site:
 
"The job of the Panel is to (1) determine whether civil actions pending in different federal districts involve one or more common questions of fact such that the actions should be transferred to one federal district for coordinated or consolidated pretrial proceedings; and (2) select the judge or judges and court assigned to conduct such proceedings.


The purposes of this transfer or “centralization” process are to avoid duplication of discovery, to prevent inconsistent pretrial rulings, and to conserve the resources of the parties, their counsel and the judiciary. Transferred actions not terminated in the transferee district are remanded to their originating transferor districts by the Panel at or before the conclusion of centralized pretrial proceedings."

Adkins Update

Looks like the meeting scheduled with Adkins has been postponed to the end of September.  Me thinks it has to do with waiting for the MDL panel to rule on including this case with the others.  (SEE HERE)
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"Joint motion to postpone the submission of the parties’ FED.R.CIV.P.26(f) planning report and August 25, 2010 pre-trial conference [18] is granted. Rule 16 conference set for 8/25/2010 is stricken. Status hearing set for 10/28/2010 at 9:00 AM."
SEE HERE
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Other interesting filing in the case:
GreenShift Defense to Adkins CounterClaims

SkunK

Wednesday, August 25, 2010

2Q - Part II

Nice clean PDF copy of the 2Q on the GreenShift web site HERE.  If you like to do your serious reading using hard copy, in your hands paper - then this prints a lot better than the MS/word or text formats.

GreenShift puts their shiniest pennies on display in "Presentations and Reports".  The fact that the 2Q is included in this section is informative.  We have yet to win the race, but in the SkunK's opinion - after a quick read - the 2Q was a significant stride in the right direction and deserves to be on display here.  Believe it or not, my other lives have kept me away from getting through the 2Q word by word - something I intend to accomplish shortly.

SkunK

United Ethanol's August Newsletter

UPDATE - 0915 CST
On June 14, 2010, GreenShift Corporation announced its execution of a license agreement with United Ethanol for use of GreenShift’s patented corn oil extraction technologies. Corn oil extraction will remove corn oil from the process stream prior to entering the distiller’s grain dryer. Corn oil sales will provide another stream of income and improve the flowability of our distiller’s grain. It will cut our overall energy costs, too.

UPDATE:  Thanks to 'Slashnuts' in the comment section below for finding this more important new find later in the article:

Several interesting projects are keeping this department very busy. Staff is working with GreenShift Corporation on design and standardization of parts for corn oil extraction. They’re also installing components for a wet distiller’s grain (wet cake) reclaimation system to prevent wet cake waste at UnitedEthanol.

SEE HERE

SkunK

PS:  I would of said my excuse for missing this was working after the bewitching hour, however I see the reader posted this even later into the night.   Nice, GreenShift still has the ability to surprise . . . "A wet distiller's grain reclamation system" . . . ?  "Design and standardization of parts for corn oil extraction" . . .?

Monday, August 23, 2010

2Q is Out!

(Skunk's thinkin in red)
Increased Sales

As of the date of this second quarter report, we have executed new license agreements for use of our patented and patent-pending corn oil extraction technologies that we expect will generate royalties in excess of our break-even costs and, possibly, at a level sufficient to realize profitability depending on the amount of oil produced by our licensees and the market value of that oil. We expect that we will start realizing these increased revenues upon the completion of assembly and installation of the equipment and components needed to apply our patented technologies at the relevant licensed ethanol plants. In addition, we are currently in discussions with a number of producers with respect to new settlement and license agreements and we expect to achieve our previously stated goal of executing new license agreements this year with ethanol producers corresponding to an aggregate capacity of at least 1 billion gallons per year of ethanol.
(This says, with even no new contracts - when the Great Green Plains COES build out is done by end of 1q 2011 - we should be at break-even-and possibly even profitable.   ". . . currently in discussions with a number of producers with respect to new settlement . . ." The word "settlement" is is great news because it implys that more companies that are currently under litigation - or the threat of litigation may soon become customers.  No production wait in etiher case. )

We recently entered into license agreements with ethanol producers corresponding to about 840,000,000 gallons of ethanol production, which brings our total licensed production to 1,010,000,000 gallons of annual ethanol production, or about 8% of the U.S. ethanol industry. These agreements provide for royalties payable to GreenShift based on the use by each ethanol producer of our patented and patent-pending corn oil extraction technologies

Revenues

Total revenues for the six months ended June 30, 2010 were $3,300,818 representing an increase of $1,573,285, or about 91%, over the six months ended June 30, 2009 revenues of $1,727,533. Revenue for the six months ended June 30, 2010 included $3,300,818 in licensing sales. In the comparable period of last year, our revenues were comprised of $1,465,586 from licensing activities.

The number of outstanding shares of common stock as August 23, 2010 was 1,826,864,030.

In total, Viridis (along with our chairman personally and an entity held in trust for the benefit of our chairman's wife (the "Kreisler Trust")), MIF, Acutus and current management have provided GreenShift and its affiliated companies and subsidiaries with more than $14,432,307 in cash between January 1, 2005 and June 30, 2010. Viridis, the Kreisler Trust and our chairman collectively loaned $8,329,355 of this cash amount, about half of which was subsequently canceled, forgiven and contributed to shareholders' equity.

The Company estimates that as many as 40 ethanol producers are infringing the Company’s patents. In their opposition to GS CleanTech's motion for preliminary injunction, neither Cardinal Ethanol, Big River Resources Galva, nor Big River Resources West Burlington (each of which use an ICM extraction system and each of which is being indemnified and defended by ICM) affirmatively deny that their respective extraction facilities are being used in a manner covered by one or more claims of the '858 Patent, but rather rely upon arguments that the '858 Patent is invalid based primarily upon prior art that has been considered and rejected by the PTO during the prosecution of the patent application that led to the '858 Patent. GEA Westfalia’s pleadings also suggest that one or more claims of the '858 Patent cover processes utilized by ethanol producers that have purchased GEA Westfalia’s equipment. 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 application that led to the ‘858 Patent. The Company intends to seek additional relief for instances of intentional infringement.


SEE HERE

SkunK

Friday, August 20, 2010

2Q on Monday

The SkunK just got back the following response to this question from Mr. Kreisler:

Q.  Can we expect to see the GreenShift 2Q yet tonight, or should we expect it on Monday?

A.  Monday.

****************************
****************************
****************************
SkunK

PS.  If you want to put something out when no one notices it - you put it out at the end of the week:  After hours on a Friday or at the start of a long weekend is best.  If you have good news - it comes at the start of the week so everyone can see it.  Hopefully the latter pertains here.  GreenShift has five days after the extension . . . Tuesday, Wednesday, Thursday, Friday. . . and since Saturday is on the weekend . . . looks like they have until COB Monday.

Still waiting on the 2Q

Nothing yet. . .

Thursday, August 19, 2010

Westport Energy Holdings Inc

This is not a GreenShift Story.  This is a follow up on Carbonics Capital.  In simple terms this is the company that most recently sold the seed crushing facility in Montana that was part of GreenShift's past.  The founder of GreenShift, Kevin Kreisler is a controlling officer of Carbonics Capital. 

Well it looks like Carbonics Capital is changing names, changing mission, and moving on with a new officer in charge:  Stephen J. Schoepfer.  The SkunK is unaware of any effect in all of this on GreenShift.  He includes it only as a matter of interest for those who have been around these parts for a while, and like the SkunK, may own a few shares of CICS.
SEE HERE

SkunK
This may seem a little inside baseball, but we also have news on the EcoSystem side of the house. 

EcoSystem Corporation licenses some of GreenShift's technology and was in the process of testing somethings at the Global Ethanol facility in Riga.  We should know if this continues - if all the 2Q's are released tomorrow.   EcoSystem put out this filing today:

On August 19, 2010, the Board of Directors of EcoSystem Corporation (the “Company”) appointed Paul Miller, Ph.D., to the post of President and Chief Executive Officer. Dr. Miller was also appointed to the Company’s Board of Directors. The Company’s former Chief Executive Officer, Kevin Kreisler, will remain on the Company’s Board of Directors as Chairman.


From 2009 until August 17, 2010, Dr. Miller served as the chief executive officer of Carbonics Capital Corporation, an early-stage technology development company. Carbonics Capital recently underwent a change of management when it acquired an oil and gas company. Prior to his involvement with Carbonics Capital, Dr. Miller founded Sustainable Systems, which operated an oilseed processing and refining business based on conventional crushing and refining technologies. Dr. Miller served as manager of Sustainable from 2002 through the shutting of the oilseed operations in early 2010. Dr. Miller is a graduate of Radford Ph.D., Chemistry, 2007). Dr. Miller is 35 years old.
SEE HERE

Mega OTC volume stocks

GreenShift Corporation (OTC: GERSD) touched the day high of $0.0012 and low of $0.0009. It jumped up by 11.11% to close at $0.001 with overall traded volume of 45.65 million shares in the last trading session. GreenShift Corporation (GreenShift) develops and commercializes clean technologies designed to integrate into and leverage established production and distribution infrastructure to address the environmental needs of its clients by decreasing raw material needs, facilitating co-product reuse, and reducing waste and emissions.

SEE HERE
SkunK

Wednesday, August 18, 2010

Bits and Pieces coming Together

If one goes to the ICM web site and the Inventory Elimination Blowout, then one brings down the drop under "Category" and select "centrifuge" one sees that they now only have one Flottweg's Tricanter left for sale.  They have had two for the longest time.  Those that follow closely will believe with solid justification and evidence, that this was sold to SIRE as noted in this blog of July 16, 2010.  So is this news that ICM updated their Inventory in their blowout sale?  Not really, but its nice to tie up loose ends and confirm what we though is actually what happened. 

As evidenced by this Inventory Elimination Blowout sale, ICM still appears to be still getting out of the business of selling non-patented Corn Oil Extraction Technology and now selling installation services for GreenShift's licensed technology.  This, combined with a steady stream of Ethanol Producers coming under GreenShift license since the beginning of the year, shows in the SkunK's ("overwhelming biased" lol) opinion - a rock solid, undeniable trend towards GreenShift acceptance and viability:

100-110  Global Ethanol
100-110  Marquis Energy
50           United Ethanol
480-520  GreenPlains Mega Deal
50            Center Ethanol

This is a total of 780-840mmgy of Ethanol production under contract.  (Depending if you count actual production or nameplate) Well on our way to the goal of a billion new gallons for 2010.


SkunK

PS -
New GreenShift article in BioFuels Digest
Top traded volumes on OTCBB: (WLSI, ELCR, APTD, ARSC, GERSD)

I have never been called an art sophisticate.  And I appreciate cats even less.  But the picture above seems so fitting and haunting I had to include it - as we wait for the final pieces to fall into place.

Tuesday, August 17, 2010

Its's Official! Central Settlement!!

THE BIGGEST story here is this is the first Ethanol producer that was under litigation with GreenShift and is now a customer of GreenShift.  The path is clear.  The momentum is clearly building.  This is a giant step forward and suggests this thing might not go to a jury verdict. 
*********************
GreenShift and Center Ethanol Settle Patent Infringement Case
“We are pleased to have the opportunity to partner with Center Ethanol as we work together to maximize the benefits corn oil extraction," said David Winsness, Chief Technology Officer of GreenShift.

“We have been working with GreenShift for a very short time, but thus far we are impressed with their professionalism and knowledge of their corn oil extraction process,” added Barry Frazier, President of Central Ethanol."
********************************
and here
SkunK 

The SkunK has to credit fwayneh1 on I-Hub who I see posted this one a half hour before the SkunK today.  My only excuse was I was out gossiping like an ol'lady with the electric company dude trying to get the skinny on the neighbor.  However I will try to sound my own horn here since I predicted this might happen as early as 9 July when I published this blog:

STIPULATION OF DISMISSAL OF CENTER ETHANOL COMPANY, LLC

and nailed it here on 9 July:

"Again these are just my best guesses based on my logic . . .

1. Central Ethanol has signed up as a licensed customer of GreenShift. GreenShift will likely want some good news to be released with any reverse split or IPO. This could be a part of that good news being set for release."

I know I risk being called a dumbask when I get 'em wrong and an insider when I get it right, but that's the price you pay for playing stick ball in this league.  So when you miss as many fastballs as I do - you have to let everyone know when you occasionally get it right and blast one in the upper cheap seats. . .:~)

Monday, August 16, 2010

NT-10Q

Nt-10Q is out.  Expect 2Q by cob Friday. 
"GreenShift Corporation is unable to file its Quarterly Report on Form 10-Q within the required time because there was a delay in completing the adjustments necessary to close its books for the quarter."



Still searching for enlightenment?  Search no further - the GreenShift 2Q should be out this week!

SkunK

As I said in the last blog - this is expected.  The usual boxes are checked.  Below it shows that it was accepted at 09:57:22 EST today.  That is early - normally it if filed late in the day.  Read into that what you will.
ACCEPTANCE-DATETIME 20100816095722

"The subject annual report, semi-annual report, transition report on Form 10-K, Form 20-F, Form 11-K, Form N-SAR or Form N-CSR, or portion thereof, will be filed on or before the fifteenth calendar day following the prescribed due date; or the subject quarterly report or transition report on Form 10-Q or subject distribution report on Form 10-D, or portion thereof, will be filed on or before the fifth calendar day following the prescribed due date; and"

On a Quarterly you get an automatic 5 calender day extension.  So I expect to see something by close of business Friday.  Although with the weekend, they might be a slim chance they might be able to stretch it to Monday? I doubt they would try.  I am gonna go out on a limb again and guess they might bring it out even Tuesday or Wednesday  - they have released midway through an extension before . . .

GERSD in CEOCAST NEWSLETTER

Companies featured in the current edition of the newsletter: AEN, CBAI, FMTI, GERSD

GreenShift Corporation (OTCBB: GERSD) announced that the eleven pending suits involving infringement of GERSD patents have been ordered transferred for coordinated and consolidated pretrial proceedings. GreenShift previously filed suit against sixteen ethanol producers for infringement of GreenShift’s U.S. Patent No. 7,601,858, titled "Method of Processing Ethanol Byproducts and Related Subsystems” (the ‘858 Patent), which covers processes for recovering corn oil from whole stillage, a precursor to the distillers grain co-product of corn ethanol production. The company also announced that it has closed on a transaction with YA Global Investments, L.P. to reduce and restructure GreenShift’s convertible debt to YA Global. The deal reduces GERSD’s debt by approximately 23%.

SEE HERE

SkunK

When GreenShift is featured in CEOCAST on Sunday night - it has historically meant that we are starting a week of public relations disclosures.  We know we should expect to get an NT-2Q today - the actual 2Q this week sometime.  Will be surprised with a 2Q today?  Will we get PR's issued in conjunction with the scheduled 2Q?  Have we got some more good news on the way?  We will see this week.

Saturday, August 14, 2010

ANOTHER Alleged Infringer and what they are saying in their 2Q

The SkunK has kept a list of Ethanol Plant backend corn oil producers that are not known to have an agreement with GreenShift - and are not yet litigants in the patent trials.  SEE HEREWe have kept an eye on Lake Area Corn Processors - they may have had an early relationship with GreenShift.  Here is part of their 2Q corn oil update:
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"During the second quarter of 2010, we sold approximately 1,545,000 pounds of corn oil compared to approximately 777,000 pounds of corn oil during the second quarter of 2009. This increase in the number of pounds of corn oil that we sold was the result of more run time and improved efficiencies during 2010." (p.17)
*************
Now this sounds OK until one looks at this SkunK's Blog covering Lake Area Corn Processors for the previous quarter.  There you would see that they produced 1,772,000 ponds of corn oil in the 1Q - as opposed to 1,545,000 ponds in the second quarter.  This a significant decrease of about 13%.  Now if they are selling apples - then we would have seasonal variations and a second quarter to second quarter comparison would be useful.   BUT ETHANOL/CORN OIL  is a 24/7 - 365 day operation and subsequent quarters ARE the best way to compare.
SkunK's 1Q Report on Lake Area Corn Processors
Lake Area Corn Processors 1Q - p 18
Lake Area Corn Processors 2Q - p 17-18

So why are they using the 2Q of 2009 to compare?  The answer seems obvious to the SkunK.  They are producing less corn oil with a non-patented COES in the second quarter of 2010 than they did in the first quarter of 2010 - according to their own reporting.  Yet they tell their stakeholders that things are getting better with their non-patented COES by using a 2q 2009 to 2Q 2010 comparison.

Here is some more info . . .

 "The average price we received for our corn oil during the second quarter of 2010 was approximately 30% higher than the price we received for the second quarter of 2009. This was an increase of approximately $0.06 per pound. Management attributes this increase in corn oil prices with higher prices in the energy markets. Management anticipates that corn oil prices will remain relatively stable. We are continuing to refine our operation of the corn oil extraction equipment and anticipate that this may lead to increased production in the future." (p.17&18)

SkunK

Alleged Patent Infringer and what they are telling their Stakeholders

LINCOLNWAY ENERGY, LLC - SEE HERE - Excerpt below
A Complaint for Patent Infringement was filed against Lincolnway Energy and certain other parties on May 3, 2010 by GS CleanTech Corporation. The Complaint was filed in the United States District Court for the Northern District of Iowa, Western Division. The Complaint alleges, in general, that the corn oil extraction equipment and related processes used by Lincolnway Energy and the other parties infringes upon one or more of the claims under certain patents held by GS CleanTech Corporation. The Complaint seeks injunctive relief, an award of damages with interest, and any other remedies available under certain patent statutes or otherwise under law. Lincolnway Energy is reviewing the Complaint and considering its response. Lincolnway Energy is unable to determine at this time if the Complaint will have a material adverse effect on Lincolnway Energy. (p.31) (another related reference page 14)
 
SkunK

Thursday, August 12, 2010

Non Patented COES: Below Expectations, Significantly below the designed capacity

This From Just Released Cardinal 2Q - 12 Aug 2010

Our corn oil production was below expectations for the quarter ended June 30, 2010. Corn oil prices decreased for the quarter ended June 30, 2010. Management attributes this decrease to the decrease in biodiesel production as a result of the expiration of the tax credit. We are currently operating significantly below the designed capacity of our corn oil extraction equipment. We are working with ICM, Inc. to fine tune the operation of our corn oil extraction equipment and hope to have the equipment operating at 100% capacity in the near term. (p.22)
************************
SkunK
 
PS  Some might say this is old news.  AND IT IS!  The quote below is from the Cardinal Ethanol 1Q.  THREE MONTHS AGO!
 
We are currently operating at 60% of the designed capacity of our corn oil extraction equipment. We are working with ICM, Inc. to fine tune the operation of our corn oil extraction equipment and hope to have the equipment operating at 100% capacity in the near term. (Cardinal Ethanol 1Q.p22)

SEEMS like CARDINAL has made no progress with the NON-Patented COES!
 
Notice the common thread.  ". . . hope to have the equipment operating at 100% capacity in the near term."
By Golly!  How long are the the stakeholders at Cardinal going to be satisfied with this "hope" that things will get better?  ?  How about pulling a "Marcus Energy" - and double your production for 20%.  How about stop paying  lawyers in the court room and start paying for technology on the work room floor?

If Cardinal had never heard of GreenShift they would still have these production problems.  To twist a Reaganizm:  "GreenShift is NOT the problem.  They are the Solution!"

If they had never heard of a non-patented COES - and had gone with GreenShift - they would not be in court and would not likely have all these production problems.

Financials Re-Released

The financial statement that was released on 17 July has just been re-released under the symbol GERSD - so it is available for view. 

This could mean nothing - or it could mean a presser on the way where they have a link or reference the financial statement.  (ie past costs v projected revenues)

SkunK!  Your really stretching it now!!

Probably and it would not be the first time.  But I have been on a roll lately and things don't happen without a reason.  Just my guess what this "could" mean.  That's what I do. . .:~)

SkunK

Wednesday, August 11, 2010

GreenShift Infringement Actions Consolidated

GreenShift Corporation (OTC Bulletin Board: GERSD) and its wholly-owned subsidiary, GS CleanTech Corporation (collectively “GreenShift”), today announced that its eleven pending suits involving infringement of GreenShift’s patents have been ordered transferred for coordinated and consolidated pretrial proceedings.

On August 6, 2010, the Panel ordered the consolidation and transfer of all pending suits in the U.S. District Court, Southern District of Indiana for pretrial proceedings. 
********************

And HERE is the PR after trading hours.  But you got it here in the last blog through published court proceedings.  You got it here first!
lol
SkunK

GREENSHIFT WINS first battle - ITs ALL Going to Southern Indiana!

The ICM parties argue against centralization that, inter alia, centralization of their actions with other actions involving different alleged infringing devices will needlessly delay resolution of the litigation. Based upon the Panel’s precedents and for the following reasons, we respectfully disagree with this argument.

IT IS THEREFORE ORDERED that, pursuant to 28 U.S.C. § 1407, the actions listed on Schedule A and pending outside the Southern District of Indiana are transferred to the Southern District of Indiana and, with the consent of that court, assigned to the Honorable Larry J. McKinney, for coordinated or consolidated pretrial proceedings with the action pending in that district and listed on Schedule A.
SEE ALL HERE!
Origin HERE

SkunK

Feels Good!  Feels real good!

GreenShift Closes Debt Restructuring; Reduces Debt by 23%

Impact of Transaction


The transfers reduced the balance of convertible debt due from GreenShift to YA Global by about 23%, from about $43 million to about $33 million. This amount can be reduced further down to about $25.3 million upon realization by GreenShift of the performance bonuses noted above. In addition, the maturity date for the remaining convertible debt due from GreenShift to YA Global has been extended from March 31, 2011 to December 31, 2012.

"Reducing debt will lead to increased strength and enhanced capabilities to win new business," said Kevin Kreisler, GreenShift's chairman and chief executive officer. "The new agreements with YA Global provide a realistic mechanism to achieve this while we continue to service the needs of our clients."

"A key challenge and objective for us is to repay YA Global's investment in cost-effective ways while minimizing the issuance of common stock as much as possible. YA Global provided us with most of the funds we needed to develop and commercialize our patented and patent-pending technologies, and has been and remains a strong and flexible partner for our business, and we are pleased to have the opportunity to continue to partner with them in this new transaction as we achieve our goals to create value for our clients and shareholders," said Kreisler.
SEE ALL HERE
***************
SkunK
 
Revenues and Expenses.  Only by increasing the first and reducing the second will we get to that all elusive golden goal of profitability.  We have already cut overhead to 17 employees.  Now we have additional debt reduction.  We will soon hear the status of revenues in the 2Q next week - (maybe in a PR earlier?) We got one early today. . .

In my opinion, when one looks at vol this week after the reverse split, one needs to add a zero to compare to last week.  5M vol becomes 50M.  20M becomes 200M.  Yesterday, many people's accounts were predictably screwed up - so today is the first real day of trading after the R/S.  Lets see . . .

Today

The release of the 8K yesterday afternoon I believe was significant.  More than a future plan - it is now actual results.  It states:


"GreenShift transferred its interests in the UWCL Facilities to YA Corn Oil in satisfaction of $10,000,000 in convertible debt due from GreenShift to YA Global, . . "

At the closing, three GreenShift-owned corn oil extraction facilities based on GreenShift’s patented and patent-pending technologies and GreenShift’s interest in a fourth facility was transferred to a newly formed joint venture entity, YA Corn Oil Systems, LLC (“YA Corn Oil” or the “Joint Venture Company”). In exchange, $10,000,000 of the convertible debt issued by GreenShift to YA Global was deemed satisfied.


That is 10M that will not be paid from dilution and that is good for shareholders.

I am gonna run out on a limb and say I suspect that we will get a PR today.  That's just my best guess.  Lets see . . .

SkunK

Tuesday, August 10, 2010

Debt Restructure Completed

The transactions contemplated by the Agreements were completed effective July 30, 2010.

The following is a summary of the transactions:
 
o  
Transfer Price. GreenShift transferred its interests in the UWCL Facilities to YA Corn Oil in satisfaction of $10,000,000 in convertible debt due from GreenShift to YA Global, and will, if certain additional closing conditions are satisfied, transfer its interest in the Riga Facility to YA Corn Oil in satisfaction of an additional $1,700,000 in convertible debt due from GreenShift to YA Global.
o  
UWCL Performance Bonuses. An additional $2,500,000 in convertible debt due from GreenShift to YA Global shall be satisfied upon the realization by the UWCL Facilities of $3,000,000 in annualized earnings before interest, taxes, depreciation and amortization (“EBITDA”); and an another $2,500,000 in convertible debt due from GreenShift to YA Global shall be satisfied upon the realization by the UWCL Facilities of $3,600,000 in annualized EBITDA.
o  
Riga Performance Bonuses. In the event that YA Corn Oil purchases the Riga Facility, an additional $500,000 in convertible debt due from GreenShift to YA Global shall be satisfied upon the realization by the Riga Facility of $545,000 in EBITDA; and an another $500,000 in convertible debt due from GreenShift to YA Global shall be satisfied upon the realization by the Riga Facility of $670,000 in annualized EBITDA.
o  
Equity Participation. GreenShift shall receive a 20% equity stake in YA Corn Oil and the right to receive 20% of YA Corn Oil’s distributable cash upon the realization by YA Corn Oil of a 20% internal rate of return on its invested capital.
o  
Performance Guaranty. GreenShift has guaranteed the performance of the extraction facilities acquired by YA Corn Oil until the second anniversary of acquisition, and YA Corn Oil may terminate the management agreement (and GreenShift’s ongoing right to receive fees and bonuses) in the event of failure to perform or other material default by GreenShift.
o  
Conditions Subsequent. GreenShift is required to deliver to YA Corn Oil certain confirmation letters with each of the ethanol facilities at which the UWCL Facilities are co-located during August 2010, and is subject to assessment of liquidated damages in the event one or more such confirmation letters are not provided prior to August 30, 2010.


SkunK

Monday, August 9, 2010

Its GERSD!

The (1-for-10) Reverse Split will take effect at the open of business on August 10, 2010.
Tuesday!!!!
SkunK

". . . a company that has undergone a reverse stock split often gets the letter "D" attached to the end of its ticker symbol.  This letter is generally attached to the end of the ticker for approximately 20 trading days before it's removed."  Quoted from Here  (In our case 30 calender days)


ps.  EcoSystem Corporation (OTC: ESYR) - ESYR is a technology company that focuses on clean tech. designed to resolve compelling ecological challenges, while producing carbon neutral and negative products. The stock has been experiencing high volume and a strong up trend since last week. ESYR has hit a high of $.0037 so far today with no news.  SEE HERE

Trading Report

This article is reporting on Friday's close - premarket open this morning.  ESYM is still climbing as I write this - up 60% to .0032 with +5M shares traded.  No idea or guess what that means.  Mr. Kevin Kreisler is the CEO/Chairman of the Board of both companies.
**************
GreenShift Corporation (OTC: GERS) closed at $0.0002 with no change for the day whereas overall traded volume stood at 28.85 million shares. GreenShift Corporation (GreenShift) develops and commercializes clean technologies designed to integrate into and leverage established production and distribution infrastructure to address the environmental needs of its clients by decreasing raw material needs, facilitating co-product reuse, and reducing waste and emissions.


EcoSystem Corporation (OTC: ESYR) touched the day high of $0.0023 and low of $0.0006. ESYR heavily jumped up by 233.33% to close at $0.002 with total traded volume of 25.16 million shares in the last trading day. EcoSystem Corporation (EcoSystem) is a technology development company. The Company focuses on cleantech designed to resolve compelling ecological challenges, while producing carbon neutral and negative products.

SEE HERE

SkunK

Friday, August 6, 2010

Adkins Defense and Judge directs "discussion of possible settlement"

The Adkins Defense  SEE HERE

In the SkunK's opinion, the Adkins Defense is to make three points in its 6 affirmative defenses:
1.  Adkins does not infringe the patent.
2.  The patent (that they did not infringe?) is invalid.
3-6.  GreenShift agreed not to sue them for (not?) infringing the (invalid?) patent. 

I encourage you to read the whole story, but to SkunK-a-rize the storyline of the 3rd -6th points of the defense: 
1. GreenShift began COES installation at Adkins using Harn Construction.
2. GreenShift could not pay for Harn (partial?) installation.
3. Adkins paid Harn Construction off and purchased Westfalia COES.
4.  Adkins believes they had a (verbal?) agreement not to be sued which gave them an "implied" license and that GreenShift has no right to sue because they have "unclean hands" (due to failure to pay Harn).

"Misleading Silence"?  or  "What did you (not) say?"

In Adkins opinion:  "GS CleanTech, as successor-in-interest to Veridium Corp. d/b/a/ Veridium Industrial Design Corp., is estopped from seeking damages or injunctive relief against Adkins because of its conduct, positive statements, and misleading silence representing to Adkins that Adkins would be free and clear of any claim of infringement if it were to purchase and install corn oil extraction technology from an alternative provider."
************
The Agreement between Harn Construction and Adkins
The Agreement between GreenShift and Adkins
************
The face-to-face (a discussion of possible settlement) Meeting August 2010

This docket entry was made by the Clerk on Wednesday, August 4, 2010: MINUTE entry before Honorable Rebecca R. Pallmeyer: Status hearing set for 9/15/2010 stricken. The parties are directed to appear through lead counsel for a pretrial conference pursuant to Fed. R. Civ. P. 16. on 8/25/2010 at 9:00 AM. Counsel are requested promptly to meet face−to−face for a discussion of possible settlement  and for preparation of a planning report. The form is accessible from the court's Internet site, www.ilnd.uscourts.gov. Such report shall be submitted to Judge Pallmeyer in chambers no later than two business days prior to the conference. Mailed notice(etv, )

SkunK

8/25/2010 at 9:00 AM Pretrail Conference
We Should have 2Q and MDL Panel response before that.

The 28 June 2010 Webinar

For some time THIS PRESENTATION was available on the GreenShift HOME PAGE.  It was somewhat of a mystery as to whom  the presentation was directed.  We now know Dr. Richard Krablin, gave this presentation as a webinar to the industry.  (Web-based Seminar)

SEE HERE



SkunK
ps Here is Dr. Krablin's bio off the GreenShift web site:

Richard Krablin, Ph.D., Executive Vice President, Special Projects

Dr. Krablin directs GreenShift's environmental, health and safety programs and plays an integral role in GreenShift's research and development activities and other special projects.
Prior to joining GreenShift, Dr. Krablin served as Senior Vice President of Environment, Health and Safety for Horsehead Industries, Inc., a leading zinc recycler. Dr. Krablin administered Horsehead's compliance as it extracted zinc from electric arc furnace dust, a hazardous waste produced by the steel industry.
Prior to joining Horsehead, Dr. Krablin had a multi-tasked career with Atlantic Richfield Company (ARCO) where he directed the worldwide environmental affairs of the mining and mineral processing subsidiary and managed the legacies and Superfund sites of the former Anaconda Co. Dr. Krablin started his industry career with The Anaconda Co. in Montana. Dr. Krablin has a Ph.D. and M.S. in physics from Drexel University in Philadelphia and a B.S. in physics from Lafayette College, and is a graduate of the Stanford Executive Program for business leaders.

The SkunK has no picture.  Anyone got a picture of Dr. Krablin or Ed Carroll?  Prizes available!  lol

Wednesday, August 4, 2010

Another Sign of a Strong Ethanol Industry

In Illinois, Archer Daniels Midland Company reported a 550 percent jump in quarterly net earnings to $446 million, reporting that “profit in ADM’s Oilseeds Processing segment increased $ 132 million due to improved margins and higher volumes,” and that “corn Processing profit increased $ 151 million on stronger bioproducts results.”


Overall, the company reported net earnings of $1.9 billion for the year ended June 30, 2010, up $246 million over the year ended June 2009.

The company reported that “Bioproducts profit in the quarter was up significantly from last year’s loss due to better ethanol and lysine margins. At present, ADM has begun production at its Cedar Rapids, Iowa, ethanol dry mill, which should be fully operational by the end of August. And, in Decatur, Ill., the Company is working through startup issues at its propylene glycol plant, which should be fully operational by end of the calendar year.”

SEE ALL HERE
*********************
SkunK
 
PS As one can see from yesterday's blog it seems there has been some delay in getting the new trading symbol, which is part of a reverse split.  Since I believe one reaches the most people starting an information campaign on a Tuesday (especially during the summer), if we do not get something real soon, we might see this pushed off exactly a week later so it starts on the same weekly cycle.  But there are a lot of moving pieces to coordinate that we cannot see - so that's just my best . . .   "guess".  In any case I expect to get a filing in the next 48-36 hrs or so with an updated 8K letting us know the new timing.  Again, since GreenShift gets the trading symbol from another entity, they cannot tell us anything until they themselves are told.

Tuesday, August 3, 2010

Mr. Kreisler Q&A

The SkunK sent GreenShift an email question this morning and just received this answer from Mr. Kreisler the CEO/Chairman.

***************
1. Can you tell us how/when the announced 10-1 reverse split will be implemented?

Part of the process for completion of the split is the processing by FINRA of the application for a new symbol and FINRA has not yet completed that process. Additional disclosure will be provided as appropriate.

****************
Thanks for your time,
SkunK

Monday, August 2, 2010

Stocks to Watch for Monday, August 2nd

OTCPicks.com Stocks to Watch for Monday, August 2nd YIPI, WAVE, GERS, LDSR, BEDA, CTYX

Our Stocks to Watch tomorrow include Yippy Inc. (OTCBB: YIPI), NextWave Wireless Inc. (Nasdaq: WAVE), GreenShift Corp. (OTCBB: GERS), LandStar Inc.

SEE HERE

(A nice mention but no new NEWS yet)

SkunK

Potential

If the Ethanol Industry produces 12B gallons of Ethanol.
If we recovered only 2.2mmgy of corn oil for every 100mmgy of Ethanol produced.

The benefits are so overwhelming - will the entire Ethanol industry soon utilize COES Technology?

If so . . .
Then the industry will produce 264,000,000 gallons of corn oil.
At $1.75/gallon this will generate $462 Million dollars a year in revenue.
At 20% commission this will generate $92.4 Million in GreenShift Royalties.
At +$7 million in Expenses this could move about $85 million to the bottom line.

At 30 times earnings this will generate a Market Capitalization of $2.5 Billion.
With an OS of 20B this makes a share price of 12.5 cents.
With an OS of 2B this makes a share price of $1.25.
.125 is 625 times Fridays close of .0002.
$1,000 bought at .0002 would sell for $625,000.00 at .125

Does anyone - or anything human ever reach its full potential?  I haven't seen it yet.
But - does this thing have room to grow? 
You Betcha!

SkunK

PS.  This is using only Method 1 of COEs.  Method II is near ready for prime time and is rated at up to an additional 3.5mmgy of corn oil per the same 100mmgy of ethanol produced.  Method III is still being tested, developed and commercialized.
 
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