Long Range Price

As you can see from these pictures - I made it home to snow fall and snow melt. I saw Ethanol blended gasoline as far south as Oklahoma - although it was certainly not everywhere like around these parts. It was unusual enough that it had the cardboard Ears of Corn display on the pump. Haven't seen that in years. Its great to be home - and I hope to get through all my E-mails this week. Not to sound like a shareholder's letter - but thanks for your patience.

With all the detailed information now out - its time for the Skunk to re-evaluate his estimate of the long term share price - Feb 2010. The goal for GERS (as it has been for at least the last six months) is to have 50M gal of COE, 50M gal of bio-diesel and 16 M gal of oilseed crush annualized capacity online by the end of 2009. Based on information in the 9 November 2007 shareholder letter, the Skunk conservatively converts Extraction & Bio-diesel to EBITDA at $1.40/cents per gallon (the spot price of diesel has risen quite a bit in the last six months). With 50M gallons value enhanced that is $70M EBITDA .

The expansion in Montana is expected to be completed in 2008 - and a good year running near capacity in 2009 should be a solid start to paying off the $9M debt to its former owners and the service of its own debt. We are expected to add $80M in sales and $12M in EBITDA from the Montana Oilseed crush plant during the years 2009, 2010 and beyond.

We see in the Feb '08 shareholder letter a mention of more than 15M in sales for the construction of four 10M gal Bio-diesel plants to third party clients. Our focus has obviously evolved away from third party sales to building our own COEs and bio-diesel. In the shareholder letter dated 9 November 2007 the total estimated future revenue from Bio-diesel sales was 53m with an EBITDA of 13M. We will use that ratio to find the EBITDA for our 2008 sales - I will then use a conservative flat projection for 2009. Our 15M then, provides a conservative $3.68M EBITDA for our annualized third party sales projected into the future. Totaling up our three major revenue sources in blue font above, we have a projected annualized rate of EBITDA in Feb 2010 of $86.69M.

If we reach these goals - clearly re-stated in the 2007 Annual Report - and the previous shareholder letters - then it will also affect the number of shares outstanding. A detailed employee stock reward program is in effect on page 93 of the 2007 Annual report. Put simply - with well over $75M EBITDA - the outstanding shares will be 241,133,851 - nearly 4 times its present number. Since we want to include all possible dilution to find a conservative number - we also need to look at page 59 of the annual report to learn this:

"Potential future dilutive securities include 996,279 outstanding options and warrants, and 37,865,871 shares issuable for the conversion of convertible debentures."

So even with the employee stock reward program and these remaining convertible debentures all paid through dilution - we get a grand total of 279,996,001 shares outstanding. Or, with your permission, the Skunk will round up to 280M Shares Outstanding. This is where we stand with the OS shares - some 4.2 times the present levels in two years. Yet, what shareholders need to remember is in order to have that kind of number of OS shares - the EBITDA will be over 37 times its present amount - and that difference will be reflected in the share price. Using a factor of one-third to project net income from EBITDA , we can see:

28.97M/280M Shares = (net income)/TotalOS) = .1035

(PE) X (Diluted EPS) = (est PPS)

100 x .1035 = $10.35 Share Price in FEB 2010**

Now the one item that I have not explained yet is the P/E ratio. Granted, the Skunk picked a large number here. I probably agree with most - that a P/E ratio even a significant fraction of 100 is not justified today. But the Skunk is not predicting today's price. The reason I believe 100 is totally justified in Feb 2010 is that my whole prediction is predicated on our goals having been met. We will be at 50M gallons of Corn Oil extracted and value enhanced into bio-diesel in our own facilities. We will have gotten legitimate financing. We will be looking at having achieved about 5% market penetration, with no legitimate competition over the 1B? gallon market. Our previous creditors' terms will be distant memories. With these things accomplished - GERS will be a player in the alternative energy field with both the cash flow and the customer relationships to deploy our remaining three levels of technologies. The Montana Plant will be debt free and a showcase of our technologies.

To give my projections a little flavor: Imagine you are on a ship at sea and you are trying to describe to a shipmate what the rocky mountains look like from a penthouse suite in Denver. If your shipmate cannot imagine the ship making it to port, if he cannot imagine flying in a plane to Denver and if he never stayed in motel with out a number in the name, (Hotel 6, Economy Eight, etc.) you might excuse his insistence that the world consists only of salt water, sea froth and a flat horizon. And he would be right. Our present world at sea does look like that. But I predict the ship will make it to port, the plane will not crash and the suite will be available. From that location in the future, it will be hard to remember the salt water, sea froth and flat horizon. If we make it to the location that I expect - then most would have to concede that a 100 P/E would be a conservative estimate of the potential of this company.

TWO UPDATES on the COES Gleamed from the ANNUAL REPORT:

After much deliberation, the Skunk thought he had figured out the price of an individual COEs. That is until he read this on page 66 of the 2007 of the Annual Report.

"During the year ended December 31, 2007, the Company commissioned the corn oil extraction system in Oshkosh, Wisconsin. This system was commissioned in April 2007. As of December 31, 2007, the total amount invested into the system including system upgrades was $1,285,584."

So we find numerous pieces of information here. The first and most obvious is the price of a COEs. The Skunk's first SWAG on the cost was 1.2M. I appears that he was scary close and should have kept those numbers. Instead he pulled numbers from oblique references that were first significantly less and then more. Until we get specific information from other installations and we can average the costs over different locations - I think that 1.286M for the cost of a COES will remain the gold standard for all financing calculations.

The second piece of information is the verbiage: "including system upgrades". In the message boards over the last few months it has been stated or implied that the installed systems were not producing the plate capacity of corn oil from the ddg slurry. Recently I also read a post referencing the Nov 2007 Shareholder letter where the CEO writes:

"This system is producing oil today at yields that correspond to more than 1.5 million gallons per year and about 1.125 million per year in contribution margin."

Is it possible that both opinions were right? It does appear that the first production COEs at Utica Energy had problems reaching plate capacity. What other reason would we need to install "system upgrades?" What other reason would the CEO in the SEC filed Nov 2007 shareholder letter preface his statement on production with the words "producing oil today"? These opinions are also confirmed on p. 78 of the Annual where the revenue from the Bio-fuels/COES is broken out at $270,866. Since the Utica plant was the only COEs unit owned by GERS and in production at the time - the Skunk thinks that this represents the revenues from the corn oil extraction. Since the Utica Plant was commissioned in April 2007 - if it was operating at full capacity for eight months - the revenues should be about two thirds of the annual rate. If we just take the 1.125M of contribution margin in the quote above, we see that 2/3 of 1.125 is about $750,000. Our actual revenues are about a third of that. So what we see here is the first unit put into a facility, then tweaked with significant system upgrades until it reached full capacity sometime before the 9th of November 2007. This is a technology that was basically drawn on a cocktail napkin a couple years ago - now it is producing in the field at plate capacity. If one expected the system to work in the field the first time without some sort of "system upgrades" - then those expectations were unreasonable. To insist that problems cannot and were not fixed in the field by Dave Winsness - the inventor - and a lot of experienced process engineers - the Skunk believes that is also an invalid assumption.

I did not fully appreciate this portion of the Annual Report below until I put together the information above:

8. Applied Technology Development
Among our core competencies is the ability to develop and implement incremental advances in technologies that add value to existing production infrastructure. As we build our own infrastructure in the short term, we plan to continue to enhance our extraction and bio-diesel technologies with a form of in-the-trenches commercialization that relies on and is then accretive to the cash flows of pre-existing production assets.

From this part of the Annual report on page 20, it sounds like they are talking about the improvements that were made to the COE system at the Utica Plant. They are talking about using hard learned practical improvements - ones that come from the work room floor - not the conference room table, and transferred that knowledge to all of their systems.

SKUNK's Grade for last week

Well, the Skunk saw a move coming in the second part of the week. We had started the week at .12 and were still there all Wednesday afternoon. Come Thursday we got the move as predicted - but without any news from the company - the bears managed to pull the shares back down to the all time lows for the 4th time. Previous closes at a dime have come on 8 Feb, 19 March, 30 March and now 17 April.

Actual in Blue

April 14-18th
Best Buys- 12-13 (best buys were .10-.11) D+
Range for the week: 12-.21 (.10-13.4) D-
Closes over .20 -one (none) D
Fridays close.19 (.10) F

Skunk gives himself a D+ for the week - he saved a failure since he managed to see the move coming with the Bollinger Band contraction - but he got the direction wrong.

FORECAST FOR THE WEEK OF APRIL 21-25th

BEST BUYS .9-.10

Closes above 20 - NONE this week

Range for the week .9-.13

Friday's close .12

I see this week moving generally higher - with a chance of an intraday dip below .10 for a short period. No close below a DIME however is in the cards. Stochastic and others show me an oversold position. I see a close at .12 - gaining back the losses last week. Good information on financing or COEs production or completion and all bets are off. Then we go north fast - how far depends on the news.

Our 100 day moving average is just at .20 cents - while our 20 day moving average sets at just .12 cents. As long as we do not get a close below a dime - this bottom keeps getting stronger. What this stock needs is some good news. First on my list is financing. Any kind of legitimate financing news will instantly propel this stock north. Partly due to eliminating a lot of shareholder risk. Mostly due to shareholders who need the reassurance of a financier looking at the situation and saying - "Hey - I think this is going to work - my company's money is safe here. " A couple good PR's - with maybe a COE coming on line - could certainly help here as well.

** Note/Warning: Dude -do your own DD - I can be and will be occasionally wrong. I will not intentionally mislead. I try to leave sources and page numbers to help you with your due diligence, but don't count on a guy called Skunk to pick your stocks for you. Good Luck to both of us.

The Annual Repot 2007

The Skunk is in his spring quarters. I am enjoying the warmer weather - but should be back above Kornfield Kounty by next weekend. In the meantime I'm working off a single laptop - not quite what I'm used to.

Well it surprised most of us. Not issued on 30 March, not issued at the end of the 15 day extension. Issued Monday after the bell, the first impression was man - this thing is an Encyclopedia! I skimmed through it once, read through most of it again and I am reading it cover to cover now. I have read a lot of good, some bad; and while some questions were answered, new ones come to light - such is life.

I have written a lot about what to look for in the annual and so I will first structure my comments on how the results measured up to what I was looking for. What I asked for in the 29 March blog is in parenthesis - the results I found so far are in blue.

"I would like to see a positive cash flow into ebitda from both of these and also from Bio-diesel construction. We should have real money in the net income section" Stripping away some non-recurring items we got a positive EBITDA. With the Consolidation of debt we saw no black in net income.

"The forward looking section will hopefully provide detail on the COE construction and how we are meeting the terms with YAGI." No real, specific word on how we are doing on this front.

"The Skunk would like to be ahead of schedule but would be happy with a smooth working plan. We have some previously announced 31 total COEs awaiting construction. I would like to see more names than the seven and a total number bigger than 31 would show momentum." We did get the name of the eighth COE that is required to be constructed by 30 Sept 08 to meet the YAGI debt terms. The Eighth COEs is in Richardton, North Dakota with a 1.5M gal plate capacity. All I could find about the additional unnamed facilities is this: "We are under contract to build many more corn oil extraction facilities corresponding to more than an additional 25 million gallons per year of corn oil." At 1.5M a pop - that accounts for about 17 unnamed units. Added to the 8 named units - that makes 25. That leaves 6 units either gone or covered in the "more than".

"The Skunk wants some news on the financing front. We were working with another company to try and get a 150M financing deal with decent rates closer to the 10% level. This would change the company instantly into a legitimate player and we could shake off the YAGI debt. With the YAGI deal we are paying 20% plus/10c/gal and with some free shares it’s around 30%. On the positive side - if we can show we can pay the 30% - others should feel safe giving us a loan at decent rates." I have seen the name Fieldstone Private Capital Group in other information and that is the company I referred to above. I think Northland Networks (for the oil seed expansion) is a new find. As I will painfully explain later - legitimate financing is critical to the success of this company. It needs to be done quickly. Yet nothing can be gleamed from the lack of information - unless they are on the verge of signing - we should hear nothing. Interesting note on the importance of financing: "In Mr. Carroll's case . . . 1M common shares. . . additional restriction that requires the completion by the Company of certain financing." Seems they all know this HAS to get done - and his bonus is to make sure it will get done!

"The Skunk also wants to see a minor problem that is being dealt with." Well they found a problem and are dealing with it. Called "Remediation of Material Weakness in Internal Control over Financial Reporting" the board is hiring a new corporate controller, have reassigned duties, are adding adding more people with GAAP tax accounting experience. Not sure what this means -but apparently some bean counter missed some beans and we are making sure it doesn’t happen again. This is what I was looking for.

Now for a simple? question: How many shares are outstanding? The answer is 66,200,526. In the annual report - the sentence BEFORE the start of the Table of contents reads: "The number of outstanding shares of common stock and value of the voting stock held by non-affiliates of the Registrant as of April 4, 2008 were 66,200,526 and 7,944,063 , respectively."To find how we come to those numbers is a little more complex. First the Skunk did a document search of 66,200,526 and discovered how we got that number. On page 94 of the Annual we find a breakout of 55,546,526 of Outstanding, 9,167,609 to the employee pool and 1,486,391 to Viridis Capital, LCC. As you may remember, the 9 Nov 2007 shareholder letter put aside 10M shares as an employee reserve and this is where these came from. The new annual announced a new employee reward plan that is tied to EBITDA. The awards are described on page 101. A notable amount goes to employees outside of the 4 on the board - this is good for corporate morale and a sign of corporate maturity. If we run a search on the 83,200,000 we found in the same November shareholder letter we found it in two places - pages 93 and 94. On the top of page 93 we see that this amount was set aside for Viridus Capital but is now only payable on a sliding scale - but not until after we reach 50M EBITDA. On page 94 we see the same thing - but so far only 1,486,391 shares were awarded and represent only a portion of that 83,200,000. What we have left to explain is how the 30.8M shares held by the GERS shareholders in the shareholder letter has become 55,546,526 held now. The only part accounted for in the breakout in the November shareholder letter and is yet unexplained is the 16M set aside for Pending Issuances-Derivative Securities. So we have the difference - 24,746,526 shares - sold to meet debt requirements of our senior creditor YAGI. The Skunk likes a little confirmation and here goes: If one looks at the 2nd paragraph of notes below the breakout in the November shareholder letter we see this: "If all of GS Tech's convertible securities were converted . . . the actual number (instead of 16m) of potentially issuable shares would increase to about 28,250,000 . . ."So it appears that all (or about 88%) of the GS Cleantech's convertible Legacy debt tied to Derivative Securities was converted and paid off between 9 November and 4 April 2008.

Now with that out of the way I need to talk about the need for new financing. Our present construction loan with YAGI is just a bridge loan and we must find long range legitimate financing. I have rewritten this part and have made it so simple I think even I understand it. First of all we have a Corn Oil Extraction System (COEs). This is the widget we need to make money. After much trying to find and guessing on my own - Mr. Kreisler told us in this report how much they cost. In numerous places the extraction process costs are put at $1.50 for every gallon of extraction capacity. The extraction capacity of a COEs is listed at 1.5M gallons per year. One and a half dollars times one and a half million gallons equals two and a quarter million dollars. (See I did the math without the numbers.) That is 2.25M dollars apiece. Remember that.Now let’s talk about revenues tied to production. In the November 2007 letter we were basically told that our EBITDA per gallon of production was .75* for the corn oil. If we take the .75 a gallon times the 1.5M capacity - we get $1.125M of EBITDA per machine. SO - We have to produce the $1.125M for two years to exactly pay off the principal cost of the $2.5M COEs. Now in most cases this is great. To pay off a piece of capital intensive machinery like this in two +years would produce a tremendous cash cow. But with the terms of the YAGI deal - all loans must be repaid by 31 August 2009. The deal was signed on 25 Jan 2008. The terms of the loan were for less than 20 month payback on machinery that can only self finance themselves in 24 months (more with interest and fees). So all we have now is a bridge loan - but only half way across the river. We have to get as many COEs up as quickly as possible - and get real financing soon.

Now the Skunk could be wrong if one of the following is wrong: The production capacity is more than 1.5Mgallons /year. The COEs cost is less than $1.50/gallon per year capacity. Our EBITDA is more than .75/gallon. Other than that this is just 3rd grade math. (Mrs. Anderson, my third grade teach would be proud.)

The Skunk looked to see if the planned revenues can be made up by converting the corn oil into Biodiesel in our own plants. (We plan to have 20M gallon capacity by the end of the year.) Since the gross margin doubles with the conversion and the capital expenditures are about the same for the biodiesel per gallon of production - then they have the same payoff time as the COEs.. *The .10/gallon that goes to YAGI as a fee or the .10/gallon that goes to Dave Winsness (inventor)as part of a renegotiated licensing fee- but we can safely throw those out since they are covered by the increased price of spot diesel over the last six months.

The North Dakota Plant - RED TRAIL ENERGY, LLC - also recently released its annual Report - Skunk found this on page 20 of their 10-K:

"Corn Oil Extraction — we have entered into an agreement to add corn oil extraction equipment to our facility. We do not believe the equipment will be operational during 2008 but project that it will be operational during the first quarter of 2009. At current prices and anticipated volumes, we expect that corn oil sales will add approximately $1,000,000 to our gross margin and net income on an annual basis."

and on page F-18 of the ND Plant's Annual we see more detail:

"In an effort to diversify its revenue stream, the Company entered into an agreement in March 2008 to operate third party corn oil extraction equipment that will be added to its facility. The agreement has a term of 10 years commencing from the date when the equipment installation is complete. The Company expects the equipment to be operating in 2009. In return for operating the equipment, the Company will receive a negotiated price per pound for the oil. The agreement contains guaranteed minimum pricing and yield provisions. If at any time the production or yield falls below these levels, the Company can terminate the agreement with no cost to the Plant. Corn oil can be extracted from the Plant’s process and marketed as a separate commodity. This process may have the effect of lowering the fat content of the Company’s distillers grains. "
http://www.sec.gov/Archives/edgar/data/1359687/000095013708005304/c25165e10vk.htm#104
Grading Last weeks forecast: Actual in BLUE
Forecast details for April 7-11:
Best buys? (11-12)Actual(11-12) Hit it right on the head. A+
Range for week? (11-16) Actual (11-14) Pretty Damn Close B+
Closes over .20? - not this week (Actual=None over .20) A+
Fridays close - .15 Actual (.13) Not too bad C+
Overall Grade=A This is my most accurate prediction so far. All in a days work.

What I see for next week is at least one PR . In fact I see about three PRs between now and the 1st quarter release. The Skunk will be looking for some information on financing and another COE completion. Technically we have been in a flat trading range. We have just recently closed above the 20 day moving average. I see the Bollinger Bands have started to compress. This week -in the second half - we should see a move. I see we can move north to tag (.16) and then punch through the northern band to .21 - to meet the 100 day moving average - then resting for a Friday close of .19. The last two run ups we had - Dec07 and Feb08 - we pushed through the 100 day MA. We will see what happens this time. I am going to say we rest on the lower side of the 100 day MA for this week - but I have not read the PR's yet. Surprise me GERS.

Next Weeks Forecast: April 14-18th

Best Buys- 12-13

Range for the week: 12-.21

Closes over .20 -one

Fridays close.19

Long Range Forecast:$12.50 Share Price in FEB 2010**That's right - that is over 90 times today's price. Skunk has no stinking reason to change his long range prediction. Expect the number to be further refined as information is gleamed from the before mentioned, upcoming annual and 1st quarter reports.
**Note: I am a shareholder - I do not work for, nor do I receive any direct or indirect payment from GERS or anyone associated with them. (But it would be Kapitalist Kool if I did) I will not intentionally mislead - but I can be wrong (ask Mrs. Skunk for specific frequencies) - so do your own due diligence - and take responsibility for your own financial decisions - good or bad. And some good garage logic luck to ya.

The Skunk is gonna take it (ethanol) with him . .

Well the '73 Vega is packed and I am ready to head south at zero-dark-thirty Sunday Morn. Most of those Johnny Rebs don't have no ethanol. I have been using the same solution for the last three years. The back seat passenger side ( have to pack for balance) , I got filled with empty milk jugs, full of 190 proof. Since our local "refinery" has no "molecular sieve" we settle for 190 proof. But that's OK, it hasn't been denatured either - so it remains duel purpose - if you know what I mean. That reminds me - no hitchhikers this year. Last year the Skunk stopped for a dude 20 miles north of Waterloo for the "short" trip into town. Well he sat in the back and must have got into the squeezens - cause I couldn't get him to wake up until the next day - no matter how long or loud I played "Taking Care of Business" By BTO on the Eight Track. When I propped him up at that Texas rest stop - he was still smiling. The Vega never liked him though- he single handily cut my mileage by 20%. Remember when the hitchhikers where skinny and rich people were "rotund"? The world is upside down.

Oh - and the year before that - the damn hitchhiker smoked (before and after!) - good thing I was driving my old car that year. This year all the milk jug caps are tight - but that's another story . . . .

Lets talk business . . .
GERS traded all week in a very tight trading range. After it appeared that GERS was going to go for an extension for the annual report - and then took one - the price fell to test the dime low for the third time. Again the dime low held. And once again a move away from the low started at the end of the week. The Skunk has said it before but it bears repeating - every time a low is tested and it prevails - it becomes stronger. One cannot expect a stock - a stock that has been drifting lower for years - to all of a sudden reverse course without inflicting some pain. During each painful high volume bottom - we wash out a lot of tired sellers. New investors - or investors who are long holds - either average down - or go to the beach. Sometimes the hardest part of holding these micro-caps is to stay in tune with the news - but not be influenced by the daily price. These new investors, who can look at this stock as growing from a dime - rather than having fallen from five dollars - will be more willing to invest in its future. That is why each of these three washouts can be seen as therapeutic for the stock in the long run.

POSTS
I see the short and the long, the trader, the opportunist and the dreamer each express themselves on the message boards. They all play a function in providing liquidity, information (and humor) to the market. One group that has occasionally confused and entertained the Skunk is the tired Shareholder who cannot sell.
These are GERS Shareholders who state these seemingly different opinions in a single post:

1. Will not sell because they think the price is going up.

2. Discourage others from buying because they think the price is going down.

Now the Skunk understands that if you think the stock is going down - well you should sell. If you think the stock is going up - you should buy - or hold. I have even heard of some Varmints who tell others to buy as they sell - and I'm sure a warm spot awaits them. But this telling others not to buy because the PPS is going down - as you hold thinking it might go up - well I am not sure what to make of it. It doesn't seem logical Mr. Spock. I though it might be one of those sophisticated trading schemes they dream up in a business school - so I asked my friend "Lucky" over at the "Rutabaga Ranch" what he thought of it. Lucky has some experience with numerous money making exercises - and he assured me that no one was making any money in this deal. In fact he told me it would be like trying to sell a car for top price by putting a sign in the yard saying (This car sucks - but its not for sale). I told Lucky it was a poor example - since I have never sold a vehicle - not with all the room I still have left in the front yard. So the Skunk will just have to wait and see how this all turns out. In the end revenues and net income will drive prices and what the Skunk or anyone else says may slightly entertain - but will matter little to the stock price in the long run.

TRADING POST– I have nothing to update on the trading side - not with the flat daily range and the wait for the annual. I wait for the annual with confidence it will provide access to opportunity. As I said a week too early last week - "with the DIME bottom holding and the general move north through the week. I think the current is headed north, and this time it’s not a back eddy. "

Skunk's Grade for last week

The forecast fell apart with the news that GERS asked for an extension for the annual. As I said I needed three scenarios to line up in order to get it right last week and the first one thru me off the horse. No need to rub it in - I should have went with the odds - not my gut. But what an uninterestingly successful life that would lead to!

Skunks Grade: for 31 March - 4 April - Actual in Blue

Trading range 13-34 - How about .10-14 or so? = F

Closes above .20= Four ZERO = F

Best Buys – Monday before the report is released - .13-15 (10-11) = D-

Fridays Close .26 (that's a double, babe) .12 = F

Skunks grade for the week = A ( I said I would be bad if they asked for the extension - they did and I was) - just glad this is self grading!!

FORECAST for the week of April 7-11th I expect the rise we saw on Friday to carry into next week but with a continued flat range. I see the message boards have provided the important function of lowering expectations over the last week. When the annual is finally released - all it has to say is we are still in business - and the relief will be sudden and north - but that is for next week (unless we get a mid week surprise.)

Forecast details for April 7-11:

Best buys? (11-12)

Range for week? (11-16)

Closes over .20? - not this week

Fridays close - .15
Taking it to the Moon!

Long Range Forecast:$12.50 Share Price in FEB 2010**That's right - that is over 100 times today's price. From the Skunks Spread sheet - he has learned that with an aggressive COEs installation these kinds of numbers are possible with even the financing we presently have - and for only the COE portion of the business. Skunk has no stinking reason to change his long range prediction. Expect the number to be further refined as information is gleamed from the before mentioned, upcoming annual and 1st quarter reports.

**Note: I am a shareholder - I do not work for, nor do I receive any direct or indirect payment from GERS or anyone associated with them. (But it would be Kapitalist Kool if I did) I will not intentionally mislead - but I can be wrong (ask Mrs. Skunk for specific frequencies) - so do your own due diligence - and take responsibility for your own financial decisions - good or bad. And some good garage logic luck to ya.

COES Spreadsheet.

Its not perfect but the COEs Spreadsheet is done for now. I am headed south - far below Kornfield Kounty for a couple weeks - I will stay connected - and should get some pictures of "some things"?? We will see how far the 1973 Chevy Vega will get. I hope the snow chains come off after the first day of driving.

I got the speadsheet on 68KB xl file - three pages. The first page is 8 COEs, the second page is a 12 COEs structure and the third page is 19 COEs and counting. All within the time frames and the YAGI debt agreement. I know this is just one part of the company - there is other revenue and other debt - but an elephant gets eaten one bite at a time.

The best part is you can customize it. All the figures in green are the Skunk's researched assumptions. But the bashers can dilute the whole thing into oblivion and say: "I told you so". The pumpers can put the price of Corn oil up to $100,000.00 a gallon and buy out Exxon. Or, like Skunk - you can update it as we get more information and use it as an investor's tool.

Put "COES" in the subject line and I will send it to you as an attachment. If you got feedback - be glad to accept that as payment - otherwise its free.

Skunk

skunkhunter13@gmail.com

MIDWEEK UPDATE

Occasionally, the Skunk needs to post an update. First of all - it looks like GERS has taken the 15 day extension - so we can expect the annual to be posted between the 15 -17 of April, with an outside chance that it is posted in the interim. This is news that is neither good nor bad in its own right - but it is news and the wait continues. With active shareholders interested and waiting for the release, the pps can move on rehash and rumor. With the mob of shareholders swelling as large and as interested as it may be all year, attempts can be made to move the share price either up or down. Absent any news from the company, I prefer to wait, watch and enjoy the circus - and be poised to latch ahold of the fleeting leg of opportunity if he strolls by. As I write this, the stock revisited and is moving off the dime low for the third time. So far, we remain with no closes below a dime. Everytime the floor is tested with success it becomes stronger. We got some huge volumes Monday and some after market trades that combined for over 900,000 shares. Yet for every seller there was a buyer - and Skunk can only guarantee in a few months there will be 900,000 regrets - on which side of those trades will be the regrets? - is yet to be determined. I remain confident in the outcome - but with both eyes open.

Having addressed current events - now the real reason for the update. I have asked for help in nailing down the cost for the COEs. All the other cost and revenue factors we have had plenty of information on which to base a reasonable opinion. I though the COE capital costs were lacking. Here again the Skunk was mistaken. Re-reading the 9 November 2007 shareholder letter I came across this gem:

"Capital Intensity (per gallon of installed capacity) 2.00 (Extraction Only) 3.00 (Biodiesel & Extraction)"


I had also remembered highlighting a part of the 19 Feb 2008 shareholder letter about bio-diesel production:"These systems correspond to 15 million gallons of annualized biodiesel production capacity and about $5.5 million in sales. We are building an additional four 10 million gallon per year biodiesel production facilities for third party clients. These facilities . . . correspond to more than $15 million in additional equipment sales."

Putting these two items together I think we may have the ROSSETTA STONE (it's software right?) for COE capital overhead. If we can make a ratio of bio-diesel production that is close to three - we can use the same ratio to solve for COE. (Since we produced for "clients I think we can take 10% markup off the top of costs since we might give ourselves wholesale prices.)

The capital intensity for Bio-diesel capacity produced= 55Mgal/$20.5M = 2.68 or if we subtract out the 10% markup suggested above we get 20.5 x .9 = 18.45M. Therefore 55Mgal/$18.45M = 2.98 or what we call 3! In short terms we get 3 gallons of annual production for each dollar of capital invested.

So Now we have proven the ratio - we can solve for COE:

The capital intensity for Extraction = 1,500,000Gal (plate capacity of a COE system) /cost of that capacity = 2 Or using those fancy algebra switcheroo rules we get:

1.5M/2 = cost of capital. Therefore each COE system costs $750,000 dollars each.

I have changed my draw assumptions accordingly. I still have a 5 month draw - from 120 days prior to 30 days post installation. The draw is 100K each month, except for 30 days prior it is 150K, and the month of installation it is 350K. This comes out to 750K total. If you see fault in this logic - please give me an E-mail.

Now when I plug the numbers in everything works in my spreadsheet. I am still working on referencing my assumptions - but I feel confident telling you this much: If we meet the minimum of 8 COEs on line as per the YAGI agreement schedule - we can make all the YAGI payments - including the $250,000 monthly debentures payments paying down the baggage debt. And we are left with 8 COEs - paid for- on 30 August 2009. My figures show these things pay for themselves/with interest in about 9 months at full production - even with the 20% interest and .10/gallon - so it will have to be a race to see how many they can have up by Thanksgiving this year! Any COEs coming on line after Christmas and before the balance comes due to YAGI on 30 August 2009 will be a net drain on these particular ledgers. (They could still be build with cash flow or with other financing.) Any online before Thanksgiving 2008 provide a positive cash flow and are in production long enough to pay for themselves and help pull the financial weight on this Greenshift dogsled.

Wishing all a Successful GERS Annual Trading Season
Skunk

Through the Eyes of a Skunk

Before the Sun Sets. . .

between the famous twin peaks overlooking Hooterville on Monday night, we should have word on the Annual Report. We should either see a copy or an extension filed with the SEC. One thing we should remember when we look at the annual. It is for 2007. It will have only one COE in production and the Montana Oilseed Plant.

I would like to see a positive cash flow into ebitda from both of these and also from Bio-diesel construction. We should have real money in the net income section - and for now that can be best used to chain the debt hound, paying off principle and building real shareholder wealth.

The forward looking section will hopefully provide detail on the COE construction and how we are meeting the terms with YAGI. The Skunk would like to be ahead of schedule but would be happy with a smooth working plan. We have some previously announced 31 total COEs awaiting construction. I would like to see more names than the seven and a total number bigger than 31 would show momentum.

The Skunk want some news on the financing front. We were working with another company to try and get a 150M financing deal with decent rates closer to the 10% level. This would change the company instantly into a legitimate player and we could shake off the YAGI debt. With the YAGI deal we are paying 20% plus/10c/gal and with some free shares its around 30%. On the positive side - if we can show we can pay the 30% - others should feel safe giving us a loan at decent rates.

The Skunk also wants to see a minor problem that is being dealt with. We shareholders constantly cry for information. WE WANT THE TRUTH. But in real life Shitshu Happens. And then we panic over anything. So they don't want to tell us and the cycle continues. I want to be told something needs fixing - and we are fixing it. That's real life. And we should expect it. But I'm not sure if they told the shareholders something that's wrong and being fixed - and we did handle it - with whom I would be more surprised.

The Skunk has this COE section of the business spreadsheeted out over the next two years. I change a variable like Ave COE production in June '08 and the PPS estimate changes for the month. It has factored in all the YAGI payments and the product being sold as corn oil. My weakest assumption is the cost of the CEO systems. I cannot find one on E-Bay. So I would appreciate some critical comments based on knowledge or experience (the other kinds are OK too) for these cost estimates of the COEs, which are based roughly on my idea of how they are installed.

COST ESTIMATE: My best guess (worse case/highest cost) is they draw 200K a month for 5 months on each COE. That is from 120 days before installation to 30 days after. The skunk also throws in an extra 200K the month of installation. So I got it roughed in at $1.2M. With seven units and a 20% pad that puts us in the ball park for the total 10M revolving credit. Yet they also talk of using positive cash flow and this same credit line to install more COEs in the same time period. The skunk may be off by as much as 100% - and hopefully on the high side. (Skunk does not expect GERS to release these offical figures - it hard to negotiate a good deal with someone who knows your margins)

INSTALLATION ESTIMATE: It starts with design crew and project manager on site visit five- six months out? Enclosures and concrete pours begin with the project manager on site supervising these subcontracted jobs. Back at the ranch . . . The Skunk figures a specialized team constructs and bench tests the 4-5 major modular components in Alpharetta GA facility under the watchful eye of Dave Winsness. Then the COE parts get craned on a couple 18 wheelers and shipped to the ethanol plant. There the COE unit meets up with our installation team in our enclosure and a bunch of pipes and valves ordered by our design group in Ohio to fit into the back-end of that particular install. Our team of 3-4 does the first couple weeks of this rough install under the project manager (Maybe Chris Kennedy or Dan Page). When everything is bolted together, Winsness and company fly in for the last few weeks and tweaks the thing up to plate capacity. During the burn in the installation team gets a week at home and its off to the next installation where another project manager has another COE enclosure ready for the team. For the last week Mr. Kreisler flies in to sign the turnover to the plant and generate the PR.

So if anyone out there knows or can run these ideas past someone who would know - have them read my musings and comments - seriously, all critiques are appreciated, but I want to firm up all my cost assumptions. skunkhunter13@gmail.com

PS My definition of Constructive Critique: Polite laughter is tolerated - uncontrolled rolling on the floor gut-gripping belly laughs, however appropriate, is not. And of course since this blog is all about sharing DD -when this spread sheet gets a dress I will share it with any reader who asks for it.

PSS Can anyone give me the model number of the main centrifuge above? I assume it is an Alfa Laval considering the history of our main players. It looks like a High Speed Disc Stack Centriguge - is it a nozzelbowl or a desludge? Do I see a small pre-stage stand up clarifier in this one picture to the left(nearly all the way to the right)? I think this would be major expenses in the construction. If we can nail them down - they might be 10-20% of the total install price.

Skunks Grade For Last Week (last weeks prediction in blue - ACTUAL + comments in red)
1. Trading range .9 -19 with no closes below a dime. [Actual 10-14 cents] with no close below a dime - Not one! BOTTOM! Off the top by a nickel – but I nailed the bottom. B+
2. Best Buys .11-.12 Only a few sellers left at a dime or below. Only a few 100 sold below .11 the best buys were actual [.11&.12] Skunk takes home an A.
3. Closes above .20 none - Will have to wait for another week. Got it right! A.
4. Friday's close .17 - That is one big percentage jump. Off by 4 cents – but I got that the Friday close was slightly down from the weekly high & it was a +27% rise for the week – I’ll take that every week. B-
Grade for the week A-
That should bring the average up!

WARNING BELOW : This is Skunks small trading Position found to in the right column – Not to be confused with his long hold position. The tides gonna rise – and I’m play’en in the surf.

Trading Post
For the first six days of my life as a small time, laid back day trader of GERS, I am satisfied with my trading performance. Have done a little scalping years ago and did alright mostly with the low cost, high volume Lucent. I thought about getting in and out with this position, and I can make $28.10 (after commission both sides) on 3,000 shares and a two cent move. Trouble is I read what I write – and I was waiting last week for the stock to move to at least .15 before I pulled the first trigger. I then planned to buy back what I sold with a limit at .13 or two cents below the sell. Also with these low volume stocks – you may not get a sell/buy even if you meet the sell/ask price – since you might be in a long queue. So I feel good about ending the week fully vested in GERS – with the DIME bottom holding and the general move north through the week. I think the current is headed north, and this time it’s not a back eddy.

POLLS

I do not normally comment on the results of the POLLS - they are what they are- but not a single person admitted to selling at a dime? Somebody, somewhere did.
BOARD TALK

Lightbeam is back aboard the i-hub as of Monday Morning 31 March. He just had some great pictures of the Milton, Wi Ethanol plant. Thanks Lightbeam. Now lets see if you can get some pictures of GERS installing their COEs systems :~)

Forecast
Of all the weeks that I have forecasted – this is the most difficult so far. In order to get it right I must hit the trifecta. First – will the report be issued next week? Second – If released what will the annual say? Third – and most important for a weekly forecast - how will investors immediately react to what the report says – what will they focus on? Getting only two out of three right may still put me on the wrong side of the move. Well, I did not buy into GERS ‘cause I was afraid to take some risk. – So here goes. . .

Even though we got an extension 4 of the last 5 years - I am going against the odds and with my gut – The 2007 annual report will be issued after the close on Monday. The Annual will show a small positive flow through EBITDA all the way to net income in the 4th quarter – for the first time? two quarters in a row. I think this is the main thing investors are looking for – so they will act positively to the news – and we will get a significant bump into mid week.

If we see the things addressed in the forward section of the annual like I wrote about in the first part of the blog – things like status of the Yagi Debt, future financing deals, additional COEs signed up, a few more specific plant locations – then the move north will continue through the week as investors have a chance to read the annual cover to cover. I am guessing too many of these things will be left for future PRs and the 1st quarter report – thereby seeing a small retreat late in the week from the highs on Wednesday.

Detailed Forecast for the week 31 March - 4 April
Trading range 13-34
Closes above .20= Four
Best Buys – Monday before the report is released - .13-15
Fridays Close .26 (that's a double, babe)

Long Range Forecast:
$12.50 Share Price in FEB 2010**
That's right - that is over 90 times today's price.
Skunk has no stinking reason to change his long range prediction. Expect the number to be further refined as information is gleamed from the before mentioned, upcoming annual and 1st quarter reports.
**Note: I am a shareholder - I do not work for, nor do I receive any direct or indirect payment from GERS or anyone associated with them. (But it would be Kapitalist Kool if I did) I will not intentionally mislead - but I can be wrong (ask Mrs. Skunk for specific frequencies) - so do your own due diligence - and take responsibility for your own financial decisions - good or bad. And some good garage logic luck to ya.

Six (or 6+sweet16) Trading Days Left till Annual

SKUNK NEWS FLASH: Located deep in the 8K SEC Filing dated 25 January '08, I just found this nugget!! It looks like the cash flow will be here pretty quick!! This means we HAVE to have 6.25M by 30 June and 10M gallon Corn Oil production by 30 September!!! Almost makes you want to start turning bolts!! All we need is some word this thing is going down according to the plan and this stock might explode! - LETS GET 'ER DONE!!

5.14 Build Out Draw Schedule. The Borrower shall install the COES Installations in accordance with, and subject to, the Build Out Draw Schedule. In addition, the Borrower shall have installed no less than four (4) COES Installations (in addition to the Utica System) on or before June 30, 2008 and no less than three (3) additional COES Installations on or before September 30, 2008.
5.15 Compliance with Projections.
{To say it short these paragraphs say the money we use has to remain within 10% of projections for building the COEs.}
5.16 Minimum Production. Each COES Installation shall produce no less than an average of 1,250,000 gallons of corn oil each year.

The Annual report is due out at the end of this month. If you have been reading this blog past the headlines - you know that we have taken the 15 day extension 4 of the last 5 years. That gives us an 80% chance of an extension in my book. Since we are faced with no news from the company this week and a shortened trading week - I thought a review of what to expect - in the run up to the annual - historically speaking - is in order. {Ever since last fall, when I assigned Mrs. Skunk the wood stove duties , I have had time to ponder the bigger questions. Like what has PPS for GERS looked like over the last 5 years during the 30-45 days run up to the annual report?} This is not the same company it was five years ago - nor 4,3,2,or even 1 year ago. We have all read the warning that "past performance is not a guarantee of future results"

(Remember this warning applies to shorts as well as longs). But history being one of the few tools we have to work with in these circumstances -lets take a look - then you can decide how - or if -to use it. The data I used were the closing price on three days in March: 10,20,30 & three days in April: 10,17,20 for each of the past five years. If the sample was not a trading day - I used the next day. I picked the 17th since it is normally the first day posted and traded on the annual.

The first thing one cannot help but notice is the tremendous price decline over the past five years. This should not and cannot be ignored if one is going to understand this stock and the current psychology behind it. The $80.00 adjusted share price on 10 April 2003 as compared to the present .10 PPS should be a cold slap in the face to anyone who thinks this stock poses no risk. A stock is rarely valued correctly in the market at any instant in time. This is why liquidity is important. The market pendulum tends to swing past the absolute price in one direction or the other. Selling when it is overpriced and buying when it is under priced allows smart traders and investors to make money. It would be hard to imagine someone arguing today that the $80.00 adjusted PPS in 2003 was not an extreme overvalue. But it would be absurd to argue that only because the value of a stock was overvalued at one time - it is overvalued now. I believe that the .10 share price we see today is extremely undervalued and that is partially related to the previous extremely overvalued position it once held.

The second thing I noticed was a 100% 'er. In every single year (including this year) the price dropped ('03 stayed the same) between 10 and 20 March. In three of the five years if one bought on the 20th of March and sold on any of my three sample dates in April they would have come out ahead. Picking the 10th of April as the sell date they would grossed 125%, 16%, 78% for the years 2006,04 and 03 respectively. Picking the 17th of April as the sell date they would have grossed 487%, 5% and 38% during the same years. What about the other two losing years you say??? Well if they bought on the 20th of March and sold on the 10th or the 17th of April they would have lost 58% in 2007 and 13% in 2005.

The third thing I noticed was volatility. This stock moves during the next 30-40 days. Two years (07,05) it suffered through a gradual decline. '06 and '03 it went up. Two years ago it went up very significantly from a pre-report dip. In '04 it waffled both up and down. If you trade, these could be good days ahead. If you invest - do you think the stock will move off these previously tested lows? If you answered no - then why are you holding it? Skunk has answered these questions for himself. In this dip Skunk filled his long term position goal for GERS. Due to my interest in the stock and its potential, Skunk has also taken a small trading position as well. The Skunk will treat these positions differently. One is strategic and long term, the trading position is short term.

SKUNK's "Trading Posts"

Once again I throw my better judgement to the winds (afraid it ain't the first time). I will post my trades in the right hand column of my blog. I guess how near the top may have to do with how good I am doing. I will try to post them as close to real time as possible - I do have other responsibilities - but the trades will go up at least prior to the next day's trading. This is not an effort to have you make the same mistakes as I - It is done for your amusement and the possibility of my own financial reward. I will attempt to do this for a month and then re-evaluate my effort. Do not confuse my buying or selling of my trading position as a recommendation for you to change your long term position. I think the tides a'rising - this is just a chance to play in the surf.

Skunk's Grade:

During this part of the Blog I self grade myself for my predictions from last week. I wish I could give myself an incomplete since I nearly nailed the drop at the beginning of the week. Yet I also called a swing north later in the week. That swing north never had a chance to materialize during the holiday shortened 4 day week. Here is part of what I predicted FOR LAST WEEK:

". . .expect to see a significant move in one direction or the other soon. I am calling it for this week - with a slight dip before a smash through the .20 cap that has kept us trapped below it since the .24 close on 20 Feb. I see a quick tip of the hat down to as low as .13 early in the week."

It was not a tip of St Pat's Hat to the lows - it was more a formal Japanese bow at the waist - but I did get the timing & direction for the initial move right. I had been talking about a move coming into place for weeks. Only now do I find out that in Japan, (20March) Vernal Equinox Day (春分の日 Shunbun no hi) is an official national holiday. I was looking East for an analogy - when I obviously should have been looking west. I promise to spend less time with the bird entrails and more time studying the international calendar. The Skunk thinks the second half of his prediction will still come about this week - and explains some reasons why in the weekly "forecasts" below.

Skunks Grade:Actual/Predicted/
Trading Range .10-.16/.13-.25/ Close on the bottom C+

Above .20 None/Two/ D- Got it wrong again

Friday's close .10/.24 F How can it be anything else?

Best Buy .10-12/.13-.14 B+ Considering we started at .16 not a bad prediction

Giving myself a few extra credit points for calling both the initial move and the direction in the PPS - Skunk will give himself a C+ for the week. (Maybe I should start? grading on a curve?)

FORECASTS**For the week of 24 - 28th March

The volume midweek was massive as we had an ol'fashioned wash out. We got rid of some tired sellers with about 500,000 shares traded in a single day. If you are into trend lines - bring up a chart for the last year with daily volumes. Draw a trend line on volume tops starting around last Thanksgiving through this week. Notice it tags at least 7 volume tops. That note, plus the annual and the 1st quarterly '08 coming up - I expect to see some heavy volume for the next 30 days. Along that trend line - we could easily see volumes of 750K in a single day. We have not seen these heavy volumes since the run up to a dollar (adjusted price) last June or since the run up to the annual in 2006. I expect the heavy volumes to continue as we move off the lows.

We have now tagged the bottom bollinger band. This is a sign of a relative low. What normally happens now is the price either walks down the lower band or it starts a move towards a tag of the top band. I see the top band coming down to meet the price - so I predict the price moving north and trading as high as .19 this week. I see a slower repeat of the early Feb move. To review: As late as 12 Feb someone bought shares for 10 cents. As early as the 15th - three days later - some shares sold for 40 cents. I do not see this next move being quite so dramatic - but part of a broader based move off the lows to greet the annual report - something we have seen over the years.

A note on the Level 2s at the end of the week. We had a pretty good spread at the end with a bid just over a dime and the ask close to .13. Normally I would attribute this to a market mover looking for sentiment - but less than 2200 shares traded in the last 3 hours. The sellers had only 10,000 shares offered at .13 or under - with the next shares jumping up all the way to .18. The buyers had some 20,000 backed up ready to buy from 10-10.5 cents. This lends credence to my theory that the washout is nearly done. We had plenty of people willing to buy for a dime - but the dime sellers have dried up.

The bottom we formed on the 7th-12th of February has so far proved stronger than the wash out. If we can hold our ground for a day or two more - then we may have finally established a firm bottom under this stock. We have not yet closed under a dime - and a dime is just as good a place as any to dig in. For now GERS may only be a double digit midget - but remaining above a dime is both a technical and a psychological win. We will see how right I am this week.

Weekly Forecast 24-29 March '08

Trading range .9 -19 with no closes below a dime.

Best Buys .11-.12 Only a few sellers left at a dime or below.

Closes above .20 none - Will have to wait for another week.

Friday's close .17 - That is one big percentage jump.

Significant Events Ahead: I expect some kind of PR this week. We have an 80% chance we will see a request for extension on or about 30 March 2008 rather than the actual report. If the extension is used the annual report would then be filed and posted about 15-17 April. 1st Quarter 2008 will be reported by May 15th. This has been timely in the past. It will come only 30 to 45 days after the annual report.

Long Range Forecast:

$12.50 Share Price in FEB 2010**

That's right - that is over 120 times today's price.

Skunk has no stinking reason to change his long range prediction. Long range predictions are not based on daily market trends but on the value of the stock based on expected profitability. How I came to this number is explained in blogs below. Expect the number to be further refined as information is gleamed from the before mentioned, upcoming annual and 1st quarter reports.

**Note: I am a shareholder - I do not work for, nor do I receive any direct or indirect payment from GERS or anyone associated with them. (But it would be Kapitalist Kool if I did) I will not intentionally mislead - but I can be wrong (ask Mrs. Skunk for specific frequencies) - so do your own due diligence - and take responsibility for your own financial decisions - good or bad. And some good garage logic luck to ya.

COE UPDATES - two Up and 5 to go

SKUNK Believes that the Corn Oil Extraction in the First 7 plants is the key to our success. In order to flourish - we must have these units on line - on time. This is what will fuel the turn-a-round for this company. This is what brought the ol'Skunk a snooping around in the first place. Without these revenue producers on the cusp of delivering - Greenshift might be just another dry dream scrawled on a wet napkin at the 2'O'clock club in downtown Hooterville (they start early with the corn squezzin down in Kornfield Kounty). With these COEs on line we will have the access to capital sufficient to shackle the debt hounds and leverage a whole lot of our good technology to market.

The tracking of the construction of the seven COE plants that make up the promise of a strong financial foundation for the Greenshift Corporation is challenging to say the least. Those seven Corn Oil Extraction Plants are laid out from the upper mid-west to the Northeast. The first to begin production is in Oshkosh, Wisconsin. The second, in Mount Morris, New York - south of Rochester, only recently began to move product. The third in Marion Indiana, well we hear rumors that we might get strong rumors soon. From the most recent newsletter published by Midwest Grain Producers - the owner of both the Riga, Michigan (4thCOE) and Lakota, IA (5thCOE) ethanol facilities - we get a time line of completion for their projects. They predict a 3rd quarter completion for the Riga Michigan Corn Oil Extraction and an early 4th Quarter completion for the Lakota IA Corn Oil Extraction facility. They also expect to see a completion of the co-located bio-diesel facility in Lakota by mid 2009. This is good news and an independent confirmation that the Big Seven COEs are coming on line by about Thanksgiving - just as described in the February 19th Shareholder Letter.

Here is the link to the Midwest Grain Processors Newsletter : http://www.mgpethanol.com/news/newsletters/MGP%20NEWSLETER%201%20Quarter%202008.pdf



The seventh COE in Milton, WI may be the last of the BIG SEVEN to come on line. I would like to thank Lightbeam on the iHub for putting some independent pictures on the web for us to look at. For you junior conspiracy theorists it appears to an actual brick and mortar ethanol facility - not a phantom paper facility drawn up at One Penn Plaza.

Here are Lightbeam's pictures. http://investorshub.advfn.com/boards/read_msg.asp?message_id=27587720
Here is the Milton websight.
http://www.unitedethanol.com/
In the October 2007 Milton newsletter they independently acknowledge the Greenshift COE contract but no time-line is given. They also talk of the long term bio-diesel project.
http://www.unitedethanol.com/images/E0135601/UEfall07finalWebsite.pdf

The ADVANTANGES of Corn Oil in Bio-Diesel Production
- or -
Nothing like a fast horse to make a good jockey look great!!
- or -
Three reasons to climb aboard GERS Greenshift!!
1. Rising Costs of Raw Material
Most Bio-diesel in the US is made from Soy oil - canola (oil seed) in Europe. The supply of bio-diesel feedstock is a major factor limiting the development of the bio-diesel industry. From the USDS's February 2008 Oil Crops Outlook Report comes some interesting finds. The Bio-diesel market input requirements are natural oils for raw material, and natural gas (need I say anything?) for heating requirements. The costs of raw material account for between 60-90% of the cost of bio-diesel production and these costs have lately increased tremendously. The trading predictions for 2008 - lard (.36 and .40/lb) and edible tallow (.37 and .42/lb) are at or near all time highs. Soybean oil is also expected to trade at .475-.515/lb this year. This is more than twice its 20yr ave. IT TAKES MORE THAN SEVEN POUNDS OF SOYBEAN OIL TO MAKE A GALLON OF BIO-DIESEL. Soybean & and Animal Oil Bio-Diesiel plants in IA have shut down when shortages have kicked local prices above even the high national market prices.

Here is a good source of the typical trials of a bio-diesel plant - Western Iowa Energy SEC filing

http://www.westerniowaenergy.com/forms/10_ksb_as_filed.pdf

2. Rising costs of Methane.
ADM technical literature provides an almost understandable explanation on the making of the Fuel: "Bio-diesel is typically produced by the reaction of a vegetable oil or animal fat with an alcohol such as methane or ethanol in the presence of a catalyst to yield mono-alkyl esters (bio-diesel) and glycerine". As all you foreign policy geeks know - the world methane supply is tied to Chile (methanol producer) and its ongoing dispute with Argentina (Chile's Natural Gas Supplier-required to produce methane) - and the price is rising. So what about Ethanol??

GET WITH THE FLOW!
3. All bio-diesel is not the same! Bio-diesel make from animal fats - or tallow based - will not flow properly at temperatures below 61F. Palm oil is close to Tallow! Their use will be restricted by climate. Soybean oil and Corn oil flow at temperatures near freezing. Petrol diesel flows down to -30F. Therefore Bio-diesel requires a proper blending with Petrol-diesel of between 2 and 20% - and an occasional chemical additive - in order to keep those big Trucks a'running all winter long. [Since I am north of Kornfield Kounty - we have about nine months of winter and three months - that we don't really call summer - but we can get to the outhouse without strapping on our snow shoes.] On the good side of the coin - even only a 3% bio-diesel blend replaces the lubricity lost with the newer low sulfur fuels required by The Clean Air Act.

ADM rates Palm Oil close to animal fats and Canola Oil (like from out oilseed plant) a little better that soy oil.

Now if you add Points one, two and three - and you co-locate Bio-diesel and Ethanol Production - combined with a cheap corn oil feedstock readily available - with good flow rates and value enhanced benefits added to both!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

GERS - Greenshift Corporation - is in the right place at the right time!
Skunk's conclusion: Greenshift's recent advances in technologies that extract the remaining corn oil from the distillers grains—offering multiple benefits to the parties involved—will increase margins for our customers, and Greenshift share value and shareholder wealth.
Skunks Grade:
Actual/Predicted/Grade

Trading range .145-.19/.15-.23/B- Got the bottom right
Close above .20 none/one/ D Ya, win some . . .
Friday's Close .16/.22/D- Ethanol stocks weak 4 week
Buy between .145-.16/.15-17 A- Got that one pretty good

Overall "B"- Not bad - but you can do better Skunk!!!

FORECASTS**
For the week of 17 - 21 March
Friday's volume was under 40K and we are under half of last weeks volume. The trading range has even gotten smaller. We never got a trade outside the .15-.16 range since mid-week. The slight move of the Bollinger Bands I mentioned last week has developed into the start of the contraction I was looking for - That tells me to expect to see a significant move in one direction or the other soon. I am calling it for this week - with a slight dip before a smash through the .20 cap that has kept us trapped below it since the .24 close on 20 Feb. I see a quick tip of the hat down to as low as .13 early in the week to acknowledge the lows - then a bounce to .25 before a close off the high at .24 on Friday. I expect volume to pick up as we may get word on COE production or another contract this week and as those who think they know - begin to trade positions before the annual is released..
Trading Range .13-.25
Close above .20 two
Friday's close .24
Best Buy .13-.14

Significant events Ahead: We have an 80% chance we will see a request for extension on or about 30 March 2008 rather than the actual report. If the extension is used the annual report would then be filed and posted about 15-17 April. 1st Quarter 2008 will be reported by May 15th. This has been timely in the past. It will come only 30 to 45 days after the annual report.
If you want to see the possible future by looking in the past - just look at the run up to the Annual Report in 2006. From 16 March to 30 March (when the extention was filed) we saw a final dip to $1.30(adjusted price) and until 10 April we saw a tiny trading range and low volume. Then on 10 April all heck broke loose as we went up more than a dozen times over that recent low!! The Sec report was received on the 17th and the price peaked on the 18th at $16.00 a share!!! (adjusted price) - The price stayed strong through 1 May with smaller volume. Hopefully we could see a jump like that on this - or a future report - and the price would be sustained and built on by profits. Twelve times our recent low would put us at $1.20 a share. Now there is some history that bears repeating! {And would send the BEARS a running!}

$12.50 Share Price in FEB 2010**
Thats right - that is over 80 times today's price.

Skunk has no stinking reason to change his long range prediction. How I came to this number is explained in blogs below. Expect the number to be further refined as information is gleamed from the before mentioned, upcoming annual and 1st quarter report.
++ When the bands narrow drastically, a sharp expansion in volatility usually occurs in the very near future.Disclaimer - this is a (somewhat) healthy and as of yet unprofitable addiction - please note the notes below about being responsible for yourself and your money.

Skunk Reporting from the 2008 Ethanol Conference in Orlando, FL

Skunk working undercover at the Ethanol Conference in Orlando - In order to hide my true identity and move unnoticed in the crowds - this year I went as a Kernel of Korn. The next picture is also from
the 2008 Ethanol Conference. The production seems to rise with the market - kind of supports the whole Capitalism thing. I believe those flat-lander boys in Iowa will get 180+bu/Acre this year. Ethanol production per acre is increasing also. In 2002 an acre of corn produced 375 gallons; last year the average was about 450 gallons. "Dupont and Pioneer suggest that by 2020 we'll be getting 1,000 gallons per acre," That takes into account yield increases, changes in starch and fiber and the (cellulosic) use of some parts of the corn stover and cob."

SKUNK NEWS EXCLUSIVE GreenShift Corporation Attendees -
Greg Barlage, David Cantrell, Ed Carroll and Kevin Kreisler from NY, NY Greeenshift HQ
Christopher Kennedy, Dan Page and David Winsness from the Alpharetta, GA Production Facility.

Corn Prices Tomorrow
July 2009 corn futures traded in all-time-record territory, hitting a high of $5.67






This tall building to our right is One Penn Plaza in New York City. Greenshift HQ is at Suite 1612. Somebody leave me a comment if they have ever been there. How come the theme to Green Acres runs through my head whenever I look at that view?

SUMMARY and Skunk's grade For the WEEK Two weeks ago Friday this stock closed at .17 Last Friday it closed at .175 This Friday it closed at .17 I know I have been saying tight trading range for the last two weeks - but if this was the whole story we might as well watch paint dry. Luckily for you adrenaline junkies, we have been all over in true micro cap fashion and after we tested our recent lows on Friday we found a spring board and finished higher for the day and only fractionally lower for the week.
Lets get Honest - this week Skunk stunk up the weekly forcast!!


Actual/Predicted & Skunk's Grade of Skunk


Trading range Actual: .12-.20/Predicted .17-.28 Total Spread close but down = D
Closes above .20 Actual: None /Predicted 4 Skunk Grade = F No Excuses
Close up Friday: Actual .17 / Predicted .23 Skunk Grade = D Market down overall?
Best Buy: Actual .12 / Predicted .17-.18 Skunk Grade =D+ Few shares traded so low

Overall I give myself a D for the week. To all my guests - I am afraid you got just what you paid for in the forecast department this week. I can see now that the support I saw at twenty cents for the last two weeks was really still a ceiling that needs a break through. I averaged my weekly grade up to a D since my warning came true that if anything negative about "the event" came out - it would lead to the testing of the recent lows. The taking private of GS Agri-fuels went by almost without a hitch - the continued trading of GSHF for the month - although not substantive - still rattled skittish investors. The nice snap up off of .12 to finish on the days high of .17 was nothing short of GREAT - even though it was on low volume.


FORECASTS**


For the week of 10 - 14 March


The old Skunk Crystal Ball had a few smudges on it from last week - so I polished it up with a little corn oil. I have see an increasing volume. Last Tuesday's daily volume was the highest since last June. I am seeing a slight start of a contraction in the Bollinger Bands - although not enough to call a breakout this next week, we are close. For those of you who are into charts - back test some of those past GERS breakouts we would like to see again. In the move last June I see contracting bands, a tight trading range and a bounce off the lows just before the move. If you are into ancient history look at the moves at both the start of May and the end of Oct 2001 as well. I am not saying this is the week - but I am saying this is the year. And depending on what news is released (or rumored early) over the next 37 days - I expect to see a significant move in one direction or the other.

I see a trading range much the same as last week .15-.23

and this is the week we get a close above .20

and I call it for next Friday's close at .22
If you need to buy it is between .15 and .17

Significant events Ahead:You basically get 90 days after the end of the our fiscal (calendar) year to file an annual report. You can get an automatic 15 day extension. We used the 90 day grace period and the 15 day extension in 2003, 2004, 2006 & 2007. We did not file an extension in 2005. This tells me we have an 80% chance we will see a request for extension on or about 30 March 2008 rather than the actual report. If the extension is used the annual report would then be filed and posted about 15-17 April. One more curious thing about the spring 2005 (for 2004 calendar year) report was that it was both on time and the last time total stockholder equity was in the black. A cynical skunk might suggest that the trip home from school is a lot shorter with a good report card. I would guess that a timely report will definitely bring good news - an extension may mean bad news - or it may mean the bean counters really are as busy as two one legged men in a three legged race.


1st Quarter 2008 will be reported by May 15th. This has been timely in the past. It will come only 30 to 45 days after the annual report.


$12.50 Share Price in FEB 2010**

Skunk has no stinking reason to change his long range prediction - The following positive news this week have helped to reinforce my outlook. 1. The payment date for GS AgriFuels shareholders is set at 27 Mar 2008. Greenshift now owns 100% of the Outstanding share. 2. This seals the deal on the consolidation. One Public Company, one share price.3. Little noticed was the transformation of the shareholder letter dtd Feb 19 into an Form 8-K SEC filing received on 6 Mar. It is the first to be from Kevin Kreisler to the shareholders of Greenshift. Look at the one dtd 9 Nov 07 - It was to Greenshift and then listed all the subsidiaries.


For how I came to this number see details from last two weeks. Expect the number to be refined as information is gleamed from the before mentioned, upcoming annual report.


++ When the bands narrow drastically, a sharp expansion in volatility usually occurs in the very near future.


Disclaimer - this is a healthy and as of yet unprofitable addiction - please note the notes below about being responsible for yourself and your money.

Second COE - We Are Moving Product! (next post by noon Sunday March 9th)

SKUNK NEWS EXCLUSIVE***************************************************
GreenShift Corporation Attendees - 2008 Ethanol Conference in Orlando FL were Greg Barlage, David Cantrell, Ed Carroll and Kevin Kreisler from NY, Greeenshift HQ - Christopher Kennedy, Dan Page and David Winsness from Alpharetta, GA Facility. ************************************************************************
In a significant step forward, Kevin Kreisler announced on Monday that its second Corn Oil Extraction (COE) facility (this one in Medina, New York) has begun production. This brings Greenshifts corn oil production to more than 3Million gallons annually.

There was some jive talk on the message boards about no market for ethanol - so I thought I might show to those who live outside the midwest or even to our few German friends who have visited the site - What we see everytime we go to the gas pump. In Kornfield Kounty everything except the premium is mixed to 10% ethanol. Not many E-85 pumps yet in my area - but E-10 is everywhere. Everyone uses it. Note the "Contains up to 10% Ethanol" on the pump.



SUMMARY and Skunk's grade For the WEEK

As I predicted GERS moved in a narrow trading range for the week - and even more so. Its first trade Monday and last trade Friday was 17.5. This makes it an up week from last Fridays .17 close - but just barely. There was a close at .20 twice early in the week - in fact both Monday and Tuesday - again (almost) as predicted.

Actual/Predicted & Skunk's Grade of Skunk

Trading Range (.17 - .21)/(.15 - .25) B Got the narrow part right
Early week close (.20)/(over .20) A- What can I say?
Skunk Buy at Low (.17) (.15-.17) A+ Skunk is blushing (He's black and white and red all over?)
End of Week Close % (.175 up 3%) (.24 up 24%) D Getting the "up" for the week saved a "F"
Overall GPA B Solid, Excellent predictions for the week.

Overall the market week was spent in a close trading range because it was waiting to see if Mr. Keisler was going (to be able) to go forward with the taking private of GS AgriFuels under the GERS structure ("the event"). At COB Friday GSGF closed at .457 (same as the bid). At first this would seem to indicate no market confidence in the event - but further review indicates that the ask was .49 - that there were no trades for the last 40 minutes and volume was only 7.33K. This large spread indicates that the holders of GSGF are convinced they will get the .50/share buyout by the end of March as planned. It also shows that others are equally convinced it will not happen - since their bids insisted on over a 9% premium to hold GSGF for 30 days (thats 109% annualized return).

I believe the event now must happen. Therefore it will happen. If Greenshift was to reverse course they would have had to do so before COB Friday. In the absence of information contrary to the event - there will be a gradual increase in the price of GERS through the .50 payout to GSGF shareholders. The earlier the payout - the faster the rise in GERS price. Since part of the market was unconvinced GSGF would go private - it will react positively when it does becomes convinced. If for some reason the event does not go as scripted - (I don't think so!) expect GERS to test its all time post split low of about .10

Next (Foreseeable) Significant Events:
COB 29 February, 2008 - GERS takes GS Agrifuels private (Done - Look for evidence)
COB 31 March, 2008 - All shareholders of GS Agrifuels will have received .50/share.
31March, 2008 4th Quarter/Annual Report
15April, 2008 1st Quarter Report
Forecasts**
Next Week 3-7 March 2008
We have had the heavest monthly trading volume in six months and a tightening of the trading range. Technically I see a break out soon - (one week or two). However, I need to see the Bollinger Bands++ start to move together before I call it. Non-technically I see the breakout at the release (or anticipated release) of (hopefully good) news in the annual report due 31 March (on the same day as the deadline for payout of the event). I normally find my best chart reads looking in the rear view mirror - but since this is a weekly forcast - here it goes: I see a trading range drifting higher without a breakout - between .17 -.28 I still see support at the .20 level and 4 days will close above .20 The stock will close Friday up 31% at .23 If I need to buy - its between .17 and .18.
If news comes out hindering "the event" - I will try to gather the courage to put in order limits at .11 and .10 - cause she will push through .15 and may test recent lows.

Next 24 Months and beyond! I stay the course!!

SKUNK NOTICE: The Market Cap quotes on Pink Sheets and yahoo for GERS are WRONG!

See SKUNK worthy award winning post and thread for explanation of GERS market cap - Find it in the first link in the right hand column.


I think we are headed up - way up. This is why . . .
From the Shareholder Letter dated 02/19/08 we see $12 million in EBITDA from the (presently operational) but now expanded Oilseed Crushing Facility to be completed this year.
We have one COE facility in full operation. Just this facility and the Oilseed Facility above put the company in the black - profitable - the debt is being attacked as we speak - building shareholder wealth. Six more facilities are under construction and will be completed in the next 9 months. We see at least $50 million in annualized EBITDA from corn oil extraction COE by the end of 2009. These contracts are locked in for ten years. When this is done - with less than 5% of the potential market share - GERS can basically self finance - and ramp up to their stated first goal of 20% market share - or $200M EBITDA.
GERS is building biodiesel facilities for third party clients. Two in 2007 and four more in 2008. The four inked deals will provide some 15m in sales this year. Many more only await client financing. In the sharholder letter dtd 9 November 2007 the total estimated revenue from Biodiesel sales was 53m with an EBITDA of 13M.
Lets forget all the hoopla over the algae for now, even if we are the ones who crack that nut - it will be a few years before it pays any bills. So lets make a guess about where we stand in 12-24 months. From above we have an EBITDA of 75M by the end of 2009. If we take last quarter as a guide (why not) about one third EBITDA ends up as net income. So I will say 25m net income. We have a half billion common share float. We also have 1M preferred shares that belong to Mr. Keisler. The fully diluted and outstanding share number were set at 140,000,000. There is some tied to debt and may also be redeemed later. I am still trying to get a definitive answer here where we stand - but lets get real (considering history here) and say we at 175M shares today and will be at 200M shares in 24 months.
25m/200m = (net income)/(TotalOS) = diluted EPS = .125
(PE) X (Diluted EPS) = (PPS)
100 x 12.5 =
$12.50 Share Price in FEB 2010**

++ When the bands narrow drastically, a sharp expansion in volatility usually occurs in the very near future.


Disclaimer - this is a healthy and as of yet unprofitable addiction - please note the note.

Note: I am a shareholder - I do not work for, nor do I receive any direct or indirect payment from GERS or anyone associated with them. (But it would be Kapitalist Kool if I did) I will not intentionally mislead - but I can be wrong (ask Mrs. Skunk for specific frequencies) - so do your own due diligence - and take responsibility for your own financial decisions - good or bad.
*(Its a PR picture - "I'm not a stalker!" - no really)
(ETHICS: No personal phone number/address/email of the Kreisler family or any employee of GERS will be published as the result of due diligence performed on this stock.)
**This is a forecast - This is just my stinking skunk opinion! I'm trying to predict the future here. Humans/small mammals have had little luck in such endeavors. If you want to be a dumb ass and throw your money away based on what I say - well good luck. . . .