Here are some things that caught my eye going through quickly the first time. Revenues down from expected levels, yet EPS at .53/.63 basic/diluted??????? On a dime share? Cash on hand nearly equals market cap?
We have executed license agreements with ethanol producers corresponding to more than about 2.3 billion gallons per year of ethanol. We believe that we will continue to increase our market penetration during 2012.
We won significant new business during 2011, more than doubling the amount of ethanol production licensed to use our extraction technologies from 1.0 billion gallons per year (“BGY”) at the end of 2010 to more than 2.3 BGY of ethanol production today with our licensees at full production.
Our annual interest expense is now expected to be about $1.8 million, or about 50% less than the interest expense we incurred during 2011.
The current market price for corn oil is more than about $3.40 per gallon, up significantly from its trailing four year average.
We transitioned to profitability (excluding the impact of one-time bonuses). We reduced debt by about 30% by liquidating our remaining production assets, and we have begun to service our remaining debt to our senior lender out of cash flow to supplement and offset equity conversion.
Looking forward, we will continue to work with our licensees to maximize the benefits and minimize the costs of recovering as much corn oil as possible. Our existing licensees collectively have the potential to recover more than 150 MGY of corn oil.
We expect to continue incurring substantial costs in connection with our ongoing litigation for infringement of our patented corn oil extraction technologies. These costs have increased during the second half of 2011 and are expected to continue to increase through the middle of 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.
During 2011 and 2010, some of our license agreements provided for royalties in the form of a discounted corn oil purchase price. In these cases, our royalty payments were equal to the gross profit realized upon sale of corn oil, or the difference between the market price of the corn oil produced and our discounted purchase price in each relevant license.
Net income (loss) per share – basic 0.53
Net income (loss) per share - diluted 0.63
Costs of sales for 2011 comprised about 44% of revenue. These amounts compare to 82% of revenue for the same period in 2010.
GreenShift Corporation currently has 15 full-time employees as of March 30, 2012. In addition to its executive officers, GreenShift employs sales personnel, staff engineers, process managers, maintenance managers, administrative personnel and general facility technicians.
Do I sense a purposeful change in tone? Although we showed a profit, I see little talk of profits. Is this the tone of a plaintiff showing they have been damaged by infringers? A plaintiff who needs to be made whole by the court? Although we know we have had new customers added, we see little talk of that. No grand goals for 2012? Why? Can't you hear the disposition? You claim that infringers are costing you market share, yet you have plans to license an additional 20% of the market - just this year? GreenShift's litigation game face may explain a few more things as well . . . but some things are best left unsaid.
For everything there is a season, for every thing there is a reason.
SkunK
To find any of the quotes (in Green above) - just do an "edit" "find on this page" with a portion of the quote and it should take you right to it.)
Saturday, March 31, 2012
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3 comments:
Current market value of licenses is 150,000,000 x $ 3.40 x .2 = $102,000,000, each year, for a dime a share? Can that be right? The Skunk is echoing my position that only so much can be said or explained at this time because of the litigation. There is confusing and contradictory language that will likely not be cleared up until this is over; such as the debt increasing to 38 million (38 million) from 33 million. There is a reference to 35 plants under license on page 11; there is for the first time in several filings a statement about the possibility of another R/S on page 25. In other words, there is so much great, and so much problematic. Do not expect outsiders to work this hard to find the balance, do not expect a shareholder letter; do not expect a press release putting all this in perspective. In other words, do not expect much response in the PPS until the litigation choke-hold on communication is lifted.
My position has not changed. Is this news black out really necessary? Is KK unnecessarily succumbing to the attorneys’ desire to control everything? We can’t answer that from afar, but remember many technology focused companies such as Apple do not close out its shareholders from important information during their infringement litigations. So, the Golden 1130 is now the Platinum 930 (probably less since this is the number of accounts in which GERS is held) and we will hold our shares tightly and try to keep this afloat; we know what we have, we wait until others do as well.
There is a reference to 35 plants under license on page 11.
Not to pick nits since your overall conclusion is likely correct but they said
"we estimate that more than an additional 35 plants were using our extraction technology"
That would include litigants, potential litigants and licensed plants. We all agree we have Non-licensees using our extraction technology or we would not be in court.
The reference to R/S on page 24 is boiler plate. Copy/paste. Same as in last years 10-K . In fact they say
"In addition, because the market price of our common stock is currently less than its par value, the conversion price, which is a fraction of the market price, is less than par value."
The market price is now over like a thousand times Par value. Nothing to worry about here. This is old language carried over from the last annual.
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