SIRE Update

Remember back in July of 2010 when ICM unloaded one of their two Tricanter Flottweg centrifuges - to SIRE - in their Inventory Blowout Sale?  I covered their "secret" agreement at the same time.  I have also had updates HERE and  HERE and HERE. 

Any who, I have always wondered exactly "WHY" SIRE would make such a decision in the midst of a well publicized litigation.  Although many have licensed with GreenShift during these past two years, SIRE was one of the few (or only?) that have gone with an ICM Tricanter since the GreenShift COES patents were issued and litigation began.  I think I found the reasons "why" in their last public filing HERE:

We can start with:

"Our plant was constructed by ICM, Inc. (“ICM”)."

But more important is this:

Bunge and ICM hold a significant amount of equity in us, and ICM and Holdings issued us the Convertible Debt.  We also have material commercial arrangements with Bunge and ICM.

ICM Holds Convertible DEBT over SIRE:

Under the Convertible Debt, we must use 24% and 76% of the proceeds of this offering to repay the ICM Note and the Holdings Note, respectively. Accordingly, if we issue $10 million of Notes in this offering and we incur offering costs estimated to be $125,000, approximately $2,370,000 and $7,505,000 would be required to be used to repay the ICM Note and the Holdings Note, respectively.

ICM currently Appoints a Director at SIRE
"Most particularly, our directors who were nominated by Bunge and ICM have duties and responsibilities to those companies which may conflict with our interests."    ". . . ICM would continue to appoint one director."

Threat of dilution:
Unitholders will experience dilution if Holdings converts any of the Holdings Note into Series U Units or if ICM converts any of the ICM Note into Series C Units. 

Seems fair enough to me (said the umpire as he called the first batter out before his son threw the first pitch) category:
Consequently, the terms and conditions of our agreements with ICM and Bunge have not been negotiated with independent parties.  Therefore, these arrangements may not be as favorable to us as could have been if obtained from unaffiliated third parties.  Most of the cost of our project has been paid to ICM for the design and construction of the Facility.  In addition, because of the extensive roles that ICM and Bunge had, it may be difficult or impossible for us to enforce claims that we may have against ICM or Bunge.

SkunK

In all fairness, they also say that the ICM director does not vote on specific ICM contracts.  All GreenShift Investors know too much about Convertible Debt and the threat of dilution, and so I feel I do not have to explain that.  For me at least, I no longer wonder why SIRE bought the ICM TriCanter.