2012 Ethanol Conference

The following are registered to represent GreenShift Corporation at the 2012 Ethanol Conference in Orlando, Florida 22-24 February 2012. Chris Kennedy, Project Manager; David Winsness, CTO; Greg Barlage, Chief Operating Officer; out of Alpharetta, Georgia and Ed Carroll, CFO & President out of NY, NY.

As the agenda develops, potential GreenShift areas of interest include "Blend Your Own (BYO) Ethanol and Blender Pumps" and "Technology Advancements Improving the Bottom Line."
 
SEE HERE
 
SkunK

PS So far no ICM reps on the list - I see Fagen is a sponsor.

About Half?

Here is an EPM article that talks about a unique situation in Canada involving their swine production and the running cost competition de-oiled corn DDGS have with wheat DDGS.  Yes wheat DDGs!  What I see as important here is that 'half" of the DDGs coming into Canada have gone through a COES process.  It is not scientific poll but we are well into the entire industry moving to COES and corn oil as a co-byproduct.

"With U.S. ethanol plants adding corn oil extraction in increasing numbers, about half the distillers grains coming into Canada is a low corn oil product, . . "

SEE HERE

SkunK

As long as the rising Asian middle class and parts south demand an increasing beef portion in their diet, the American corn ethanol DDGs will not have trouble finding a world wide market.  High protein, reduced fat DDGS also have a huge market in the American Dairy and Beef industry.

Aberdeen to Add Corn Oil in 2012

ADVANCED BIOENERGY, LLC 10K Annual Report is just out and we have some good news about adding their Aberdeen Plant to GreenShift's Customer List in 2012!

"In August 2011, we implemented corn oil extraction technology at our Fairmont plant, and intend to implement the technology at our Aberdeen facility in 2012. The corn oil systems are designed to extract non-edible corn oil during the thin stillage evaporation process immediately prior to production of distillers grains. Corn oil is produced by processing evaporated thin stillage through a disk stack style centrifuge. Corn oil has a lower density than the water or solids that make up the syrup. The centrifuges separate the relatively light oil from the heavier components of the syrup, eliminating the need for significant retention time. De-oiled syrup is returned to the process for blending into wet, modified, or dry distillers grains. The corn oil product is primarily marketed as a livestock feed supplement or to the biodiesel market.

Industrial uses for corn oil include feedstock for biodiesel, livestock feed additives, rubber substitutes, rust preventatives, inks, textiles, soaps and insecticides. Our corn oil is primarily sold by truck to biodiesel manufacturers."
*****
"In the sales of corn oil, we compete with other ethanol producers. Many producers are adding corn oil technology to their facilities."

SEE Quotes Above HERE p.10

SkunK

Here is the recent Video Showing the GreenShift COES System at the ADVANCED BIOENERGY Fairmont plant.  I see we are over 730 views now.

Video Repost

I see the GreenShift Video got reposted HERE
We now have over 430 views.  Not a bad start for a holiday weekend!

Here is where GreenShift announced the Advanced BioEnergy LLC deal back in August of this year.  They talk about the two Alfa Laval Disc Stack Centrifuges that you see in the video - producing some 3 Million gallons of corn oil at the plant. 

SkunK

PS.  Back in 2008 I took some heat for posting this:  "The fuel tanker above has an 8500 gallon capacity. Moving 1.5M gallons of corn oil/year = (4110 gallons/day) would require one of these tanker trucks moving the oil to a bio-diesel plant almost every other day."  I based this on a 50mmgy ethanol plant.  Now Advanced Biodiesel reports 8 trucks/week coming out of their 110mmgy plant.  Close enough :~)

Merry Christmas to All

Merry Christmas to you and yours from the SkunK family.

Notice of Allowance for 5th COES Patent

The SkunK has been following a promising GreenShift COES patent application. I have learned from the Patent Public pair that the notice of allowance was issued on December 21st for GreenShift Patent Application 20080110577 "Method and systems for enhancing oil recovery from ethanol production byproducts"

This is the 5th COES patent allowed and the patent could be issued in as little as three weeks to 4 weeks. Although I am certainly not a patent expert I have picked up on a few things along the way. This seems to be a significant patent in that 15 claims have been allowed in this particular patent. As others have learned this is a difficult field to receive a patent and each claim and each patent helps to solidify GreenShifts leadership position in Corn Oil Extraction.

Notice of Allowance

Here are GreenShift's present 4 Corn Oil Extraction Patents

SkunK

ps - When my bot found that GreenShift You-Tube it was just posted and had less than 5 views.  I see now (lower right corner) in less than 36 hours - it has over 330! 

SkunK-Tube

See Here

This is a great video.  Less than five hits so far.  If you know where the education might do some good - do not be shy - get the link out there in the market place.  Watch the number of hits explode.

SkunK

PS  When will they market the GreenShift shirts?  I want mine to say "GreenShift Investor"

Cost of Corn Oil Additive

The SkunK has followed the public story of Lincolnway's COE.  Here they give us a look at the cost of the additive they use. 
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Lincolnway Energy estimates that it will produce and sell approximately 4,700 tons of corn oil per year at the plant. Lincolnway Energy does not, however, anticipate that corn oil will be a material product of Lincolnway Energy because Lincolnway Energy’s corn oil sales were approximately $1,200,000 and $1,500,000 and $3,400,000 respectively, for the fiscal years ended September 30, 2009 and September 30, 2010, and September 30, 2011 which represented less than 2%, of Lincolnway Energy's total revenues for those respective fiscal years. Lincolnway Energy's oil sales did increase approximately 127% compared to the prior year. This was due to an additive that was added to the process to improve the oil yield. The cost of the additive for the year was approximately 8% of corn oil revenue.


See Here page 4
 
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Litigation
Here is what they said a year ago:
"The case has been transferred to the United States District Court for the Southern District of Indiana pursuant to Multi-District Litigation proceedings. No initial disclosures have yet been exchanged and no discovery has yet been completed. Lincolnway Energy is therefore unable to determine at this time if the Complaint will have a material adverse effect on Lincolnway Energy."
 
Here is what they told their investors this year:
 
"The case has been transferred to the United States District Court for the Southern District of Indiana pursuant to Multi-District Litigation proceedings. The initial claims construction hearing has been held, and the United States District Court has construed the disputed terms. Various discovery activities, motions and other procedural actions have also been made or taken. Lincolnway Energy, however, is unable as of the date of this annual report to determine if the Complaint will have a material adverse effect on Lincolnway Energy".



SkunK

Watch Closely

Does Flint hills have a GreenShift License?  Are they buying this biodiesel plant and retrofitting it to run corn oil from their ethanol plants?  Just speculation at this point.  Just speculation from an anonymous source in a previous blog comment.  Speculation can be fun, especially for us speculators.   Just know what it is.
See Here

SkunK

US Corn Farmers Feeding the World

US DDGs shipped around the world.  Removing a portion of the corn oil from the DDGs helps drying, ease of transfer and shelf-life. 

"Wisconsin corn is feeding cattle in Japan, hogs in Vietnam and a rapidly growing middle-class in China hungry for a more sophisticated diet."

"Last year, China was the largest importer of another important U.S. corn industry product-dried distillers grain (DDG). However, claims of dumping by the Chinese government halted DDG imports this year. While the DDG case is widely recognized as retaliation for U.S. claims of Chinese tire dumping, Sanchez said the issue appears so political it can't be resolved quickly. He told the group that Chinese feed buyers tried forming a coalition to persuade their government to drop the case but the movement didn't gain traction."

"I don't know when the DDGs issue will blow over, but they can't keep it up for very long," Sanchez said. "We may have to put some time between the issue and government action. Relationships are above laws in China and business leaders often work connection to get approvals or to gain the ‘blind eye' when needed."

"The U.S. Grains Council is continuing efforts to educate Chinese feed ingredient buyers about the many advantages of DDGs from the U.S. The ethanol co-product is a competitively priced, environmentally friendly source of protein for livestock and present opportunity for both ingredient buyers and our domestic ethanol producers alike. DDG is being promoted for swine, poultry and dairy rations in China."
See Here

SkunK

7 Top

7 Top Penny Stocks in Review

GreenShift Corp. (OTC: GERS) shares slipped 11.76% to $0.08, with volume of 129 K shares traded. GreenShift develops and commercializes clean technologies that facilitate the more efficient use of natural resources.

See Here

SkunK

Cardinal Update

Corn Oil
In November 2008, we began separating some of the corn oil contained in our distiller's grains for sale. Corn oil sales represented approximately 2% of our revenues for our 2011 fiscal year. We anticipate continuing to fine tune the operation of our corn oil extraction equipment and we expect that it will operate more efficiently in the future. The corn oil that we produce is not food grade corn oil and therefore cannot be used for human consumption without further refining. However, corn oil can be used as the feedstock to produce biodiesel and has other industrial uses.   SEE HERE page 6
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Even after three years they still expect it to work better in the future . . .
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Corn Oil Extraction Note
In July 2008, the Company and the financial institution amended the construction loan for an additional $3,600,000 to be used for the installation of a corn oil extraction system and related equipment. In April 2009, the Corn Oil Extraction Note was converted into a term note with interest at the greater of the 3-month LIBOR rate plus 300 basis points, or 5%, provided no event of default exists. Principal will be due in quarterly installments of $90,000, plus accrued interest, commencing in July 2009 through April 2014. The interest shall adjust based on the Company meeting certain financial targets, measured quarterly. At September 30, 2011 and September 30, 2010 the balance on the corn oil extraction note was $2,790,000 and $3,150,000, respectively.

****************
In a period when COES payback periods are a year or less, - AS GPRE EXPERIENCED -  Cardinal reports above they have paid off less than 25% of a three year old, 2008 COES loan.
see here
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SkunK

Save up to 65% of

Here is a sale where you can purchase GE motors for up to 65% of.

Until recently they had a tricanter centrifudge for sale, but now you need a password to find out if it is still available.

SkunK

Here is hoping everyone can take some time of this holiday to spend with family.  - Merry Christmas!

Nothing Unusual to Report

Just checked the patent litigation perimeter and outposts Max and Fagen.   Nothing.   Looks like a quiet weekend on Pacer. 

SkunK

Poet Insider Video

Here is a Poet Video about corn oil.
SEE HERE

Insider Article

SkunK
Note the "patented" no heat process is for ethanol production. 

From GERSD to GERS

The Company’s common stock will begin trading on a post-reverse split basis on November 11, 2011. The post-reverse split common stock will be listed under the symbol “GERSD” for twenty business days, then will revert to “GERS.”  SEE HERE

If one was looking for good Public Relations news to accompany the 3Q and the recent split, one may see it following the revert back to "GERS".  One is unlikely to see a PR with "GERSD" in it, - and while some shareholders are still going through conversion.  That should conclude on Monday or Tuesday of next week - and if we are getting news before the Christmas/Hanukkah holidays it will happen then.  The following week is a short one for many so it is not cost effective to start a campaign the week of the 19th - 23rd.   In 2009 we had an 8-K on 9 December and old timers may remember the year before - 2008 - the GE deal was announced on 16 December and we had numerous PR releases that week. 

So the SkunK is going out on a shaky, ice covered limb this week and estimates that we will hear something from the company on Monday or Tuesday of next week.  If I am wrong - then I expect it to be quiet until at least the 9th of January.

SkunK

Corn vs Palm Oil

"There is appeal with corn oil. The U.S. has ethanol plants in place and the logistics have been set up years ago, so it's a matter of extracting more value from corn through its oil," he said.

While corn oil now costs around $1,300 a ton, a greater commitment by U.S. ethanol producers to actively use this as a feedstock for biodiesel would bring more supply to the expanding biodiesel market, bringing prices lower.

The U.S. has the potential to produce 580 million gallons of corn oil, once taking into account that some of the oil is needed to keep the substance of DDG -- a valuable source of animal feed, Dwyer said.

See Article Here
Another Article HERE

SkunK

Thanks to Anonymous @10:02 AM in Previous Blog for heads up.

Poet's Corn Oil Report

See Here

SkunK

Dilution and Cash as a Strategic Weapon - 3Q

Cash Reserve - Now $1.5M
These expenses may delay or otherwise adversely affect our ability to achieve our profitability and debt reduction goals. We hope to eventually eliminate our litigation expense, but we must and will take all necessary steps to bring infringement of our patents to an end. We have reserved cash for this purpose.

Expand Litigation - Soon?
Operating expenses for the three months ended September 30, 2011 and 2010 were about $1.1 million and $1.0 million, respectively. Our operating expenses include significant professional fees which can be expected to increase moving forward as we defend against infringement and expand our patent litigation.

These expenses have increased in the latter half of 2011 and are expected to continue to increase into 2012 in advance of trial, and as we expand our litigation to protect the competitive advantage of our licensees by prosecuting additional producers and other parties infringing our patents. Consequently, litigation expenses may delay or otherwise adversely affect our ability to achieve our profitability and debt reduction goals. We hope to eventually eliminate our litigation expense, but we must and will take all necessary steps to bring infringement of our patents to an end. Despite these expected increases, our operating expenses can be expected to decrease overall as a percentage of revenue in future periods as we continue to realize increased economies of scale from our existing and new licensing activities.

Litigation AND Financing Directly Related to Building Cash Reserves
Our liquidity and capital resources were improved during the third quarter of 2011 as compared to prior periods. During the nine months ended September 30, 2011, we produced about $0.5 million in net cash from operating activities and about $3.3 million in net cash from investing activities, and used about $2.3 million in net cash in financing activities. The shift in early 2011 from relying on cash from financing activities to producing and using surplus cash from operating and investing activities was an important milestone for GreenShift and its shareholders. That said, the output of our licensees, the price for corn oil are variable and litigation costs can be expected to continue to increase. Thus, until we build up a meaningful cash reserve, we cannot rule out the possibility that we may seek financing to cover operating needs in the future. Our cash positions at September 30, 2011 and December 31, 2010 were about $1.5 million and $18,000, respectively.

License Agreements More than Cover Sales, Operating Expense, Professional Fees
Income from operations during the nine months ended September 30, 2011 was about $7.1 million, or about $2.1 million net of the $5.0 million in performance bonuses earned from YA Corn Oil during the nine month period. We anticipate improving on this result in future quarters in connection with the commencement and realization of full production by existing and new licensees. Our costs of sales and operating expenses moving forward will be primarily comprised of (1) technology royalties; (2) employee costs; (3) travel, materials and other expenses incidental to execution of our license support services; (4) general and administrative costs relating to our offices, utilities and insurance; and (5), professional fees relating to accounting, corporate and litigation activities. As discussed above, we expect that the license agreements we have executed to date will provide sufficient revenue to more than cover all of these costs on an ongoing basis.

*********************
If you follow my summary logic as outlined in blue (above each quote from the 3Q) you might agree that:

1.  The Cash Reserve is for litigation
2.  The Litigation is about to expand.
3.  The Cash Reserve will also expand - until it becomes "meaningful"
4.  The license agreements already executed will more than cover Sales and Operating Expense.

Up till now I am trying to basically restate what I think is already said in the 3Q.  Now this next step takes a step further - deduced from above:

5.  Present financing activities (IF ANY, stock sales/dilution) are being used to service the debt and add to the cash reserve.

SkunK? SO WHAT! 

Well, as a shareholder, I am not here to argue in favor of dilution - lets get that out of the way right away.  No one has to give me a history lesson here - I lived it :~).  Can we learn the lessons of the past without living in the past?  We do need to recognize where we are now and what has changed - luckily we are now profitable - with net income.  May I be so bold to state that dilution, if it is done in a limited fashion, [less than the percentage growth in net income], and the gained assets are moved to cash and the elimination of debt - then it directly adds to book value - tangible equity that will at some point directly affect the pps. 

How can we now sit with more cash than market cap?  How can we set at this pps with a small but valid earnings per share?   Two main reasons at this point:

1.  Lack of a (profitable) track record.  Pennyland is full of stocks that manipulate their books to show a quarter of profit.    In the 3Q GreenShift made a small but significant profit due to revenues from corn oil royalties.  As investors, we know that these royalties are not one time sales or asset manipulation,  but rather dependable, recurring, expanding royalties.  It may take a quarter or two for new money to notice the trend line and catch on.

2.  Debt.  Cash on hand does not pay off debt.  Yet cash on hand can balance debt.  If we held 20 million in cash and 20 million in debt would the debt still be scary?  Of course the plan is to pay off debt AND raise cash on hand, however I think you see my point.  As the debt is lowered and the cash is increased our real book value increases - and that will directly affect share price - and directly benefit shareholders.  Yes it would be different if it was being used to fund operating costs - like in the past - then we were literally only "buying time".  Since we only have inventory - and own few other physical assets - cash is even more important to demonstrate our substance.

Strategic Weapon
With Prevost no longer mentioned after the Markman, and with the defendants sanctioned for their tactics and clinging to the one year rule, one might guess that through their eyes the best option left is to simply outlast GreenShift.   IF this is the case - then cash-on-hand becomes GreenShift's strongest strategic weapon.  Cash-on-hand is the biggest club one has to beat down the morale of the "we can out last 'em, lets wait them out" pool of defendants.  Nothing says "we got all the time in the world" like a huge cash reserve.  In my opinion, nothing will move the defendants to settlement faster than an increasing, meaningful cash reserve.   

Conclusion 
If dilution is happening at a limited rate [less than the rate of increase of earnings per share], and if the assets gained are used to increase the intrinsic book value by directly decreasing debt and increasing cash on hand - then I would argue that it may very well benefit shareholders in the mid to long term.  If, as a strategic weapon in the litigation; an increasing, meaningful cash reserve begins to precipitate significant settlements, then it may benefit shareholders immediately.

SkunK

New Order

See Here
SkunK

On the Brink - Within 60 Days?

Looks like the 5th GreenShift COES Patent may be coming closer to being allowed than even I had thought.  I had reported earlier that the examiner had used the telly to tiddy up a tad.  Now it appears that the last correspondence dated the 28th of November shows a clear path to allowance. 

It appears the examiner sets out the specific (minor?) modifications needed for allowance on pages 2 and 3 in bold.  Hopefully the changes are ones we can live with - and still protect the invention and those who hold a valid license.
0
1
2
3
4

Sorry for the one link per page but nothing handy in this device I am using will combine the PDFs for me.

SkunK

Max

As you can see Max vs GS Agrifuels has been covered in a recent blog HERE.    The background here is important:  Here from the 2009 Annual report p. 19:

First GS Agrifuels files this:

The Company’s GS AgriFuels subsidiary is party to the matter entitled GS AgriFuels Corporation v. Chaykin, et al. The action was filed in the Supreme Court of the State of New York, County of New York, on February 2, 2009. The Complaint seeks damages for defendants' fraudulent misrepresentations, tortious interference, breach of acquisition agreements and related claims relating to the sale by the defendants of the stock of Sustainable Systems, Inc. (“Culbertson”) to GS AgriFuels, and arising from the disclosure by the defendants that Culbertson owned its Culbertson, Montana oilseed crushing facility when in fact Culbertson merely held the right to purchase the Montana facility at the time of the acquisition by GS AgriFuels; the failure to disclose by the defendants that Culbertson’s right to purchase the Montana facility, as well as any investment made in the Montana facility, was subject to forfeiture within months of entering into the acquisition agreements with GS AgriFuels; and, the provision by the defendants of materially false financial statements.

Next Max, et al files this and it gets dismissed:

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.

Next GS AgriFuel's motion for Summary judgement is granted:

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. During 2008 and 2009, three of the former shareholders of Culbertson, corresponding to about 60% of the former shareholders’ prior ownership interest in Culbertson, entered into settlement agreements pursuant to which has all parties have been released from all obligations under the relevant acquisition agreements and otherwise.


********************
May of this year Max and company filed again here:
Court Docket 
Here list of documents
HERE is where they voluntarily withdraw their own complaint in July.
 
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Now in November Max and company filed again - seems same as previous filing that was withdrawn Court Docket
Court Conference scheduled HERE
Case put in a Pilot Project HERE
********************

My opinion of this business?  I see no filing of a complaint.  Why is that?  Why would someone sue another party but fail to file a complaint?  Why would they then withdraw the case and then wait a couple months and again file the same thing without a complaint?  The litigation filed in May goes two months and then is withdrawn - no complaint is filed.  The litigation in November is filed the same way and the first judge just declined the case because the case is similar to the one voluntarily dismissed.    Until I see a complaint filed, my opinion borders on this being a harassment filing by a party that has lost previous litigation. 

Although I might be accused of getting out my tin foil hat, I cannot help but comment on the fact that this Agri-Fuels issue has been a recurring theme of (what I believe to be) a single poster on Yahoo over the years.  (Please . .  read carefully.  No, I did not just say all Yahoos posting as self-described victims were the same person  :~)).  In any case, the victim-hood mentality developed from expecting a big payoff from selling the Seed Crushing Plant to Agri-Fuels, (even though they appeared to have sold it to Agri-Fuels without owning a clear title) explains to me both the tone and the tenacity of the negative Yahoo posts - from that poster - over the years.  To put it very simply, my gut feeling - for some time - is that one of those with a direct or family interest in these Seed Crushing related legal suits is a negative poster on Yahoo.

 

SkunK

Fagen Litigation - nothing new as of 8:15am cst
Patent Litigation - nothing new as of 8:15am cst

Another SkunK Sales Lead

REX American Resources Corp. reported a 20.3 percent increase in net sales and revenues compared to the previous quarter.

The company plans to add corn oil extraction at both plants, which should help increase profitability, he added.

See Here

SkunK