Saturday, March 1, 2008

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
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. . . .

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