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Ethanex Energy Inc. (fka EHTEQ) RSS Feed

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http://www.ethanexenergy.com/pdf/al_knapp.pdf http://www.ethanexenergy.com/facilities/ 14500 Parallel Road Suite A Basehor, KS 66007 United States - Map Phone: 913-724-4106 Web Site: http://www.ethanexenergy.com DETAILS Index Membership: N/A Sector: Basic Materials Industry: Specialty Chemicals Full Time Employees: 11 BUSINESS SUMMARY Ethanex Energy, Inc. does not have significant operations. It plans to engage in the production of fuel ethanol through the ownership and operation of ethanol plants. The company intends to market ethanol to refineries for use as a blend component in the U.S. gasoline fuel market. Ethanex Energy was founded in 2006 and is based in Basehor, Kansas with offices in Santa Rosa, California and Charleston, South Carolina. Corporate Profile Ethanex Energy expects to achieve its position as the low-cost producer of ethanol through application of next-generation feedstock technologies and use of alternative energy sources. Ethanex Energy has signed a definitive Asset Purchase agreement with Midwest Renewable Energy, LLC to acquire Midwest's ethanol plant, located in Sutherland, Nebraska. Ethanex Energy is currently developing two ethanol production facilities with a combined production capacity of approximately 264 million gallons of ethanol per year. The Company's senior management brings over 80 years of experience in the energy sector, including design, construction and operation of hundreds of power generation facilities. KEY EXECUTIVES Mr. Robert C. Walther , 73 Exec. Chairman, Chief Exec. Officer of Ipt Ethanol Inc and Pres of Ipt Ethanol Inc Mr. Albert W. Knapp III, 56 Chief Exec. Officer, Pres and Exec. Director Mr. Bryan J. Sherbacow , 39 Co-Founder, Co-Chief Operating Officer, Controller Mr. Randall L. Rahm , 57 Co-Founder, Co-Chief Operating Officer Mr. David J. McKittrick , 62 Chief Financial Officer, Principal Accounting Officer and Exec. VP State Of Incorporation NV Jurisdiction Of Incorporation USA SEC Reporting Status SEC Reporting Company CIK 0001343611 Estimated Market Cap 6,505,581 as of Feb 12, 2008 Outstanding Shares 6,505,581 as of Jan 24, 2008 Number of Share Holders of Record 157 as of Apr 2, 2007 Transfer Agent Island Stock Transfer, 100 Second Avenue South Suite 104N St. Petersburg, FL 33701 -------------------------------------------------- News ~ Updates -------------------------------------------------- Filings: http://www.pinksheets.com/edgar/GetFilingHtml?FilingID=5656420 http://www.pinksheets.com/edgar/GetFilingHtml?FilingID=5669050 February 11, 2008 - 9:35 AM EST Ethanex Signs Agreement to Acquire Ethanol Plant from MRE Ethanex Energy, Inc. (OTCBB: EHTE) today announced that it has signed a definitive Asset Purchase agreement with Midwest Renewable Energy, LLC to acquire Midwest’s ethanol plant, located in Sutherland, Nebraska, for $220 million in cash and Ethanex stock, subject to various adjustments as specified in the Agreement. As previously announced, Ethanex and Midwest entered into a non-binding letter of intent for this transaction in late November 2007. Under the Agreement, several newly formed, wholly owned subsidiaries of Ethanex will acquire substantially all of the assets, and assume certain liabilities, of Midwest in a series of three transactions. ("At a first closing"), Ethanex will acquire the existing ethanol plant for $50 million in cash. The existing plant, which has a production capacity of 26 million gallons per year (“MGY”), is currently undergoing a two-phase expansion. Each expansion phase is designed to add an additional 42.5MGY of production capacity, for a total projected plant capacity of 111MGY. "At each of the three closings Ethanex will receive $2 million of inventory which is included in the purchase price". http://www.ethanexenergy.com/facilities/ Ethanex will build and add its integrated fractionation platform, developed in collaboration with Buhler, Inc., to the plant. "The Agreement contemplates that the fractionation platform will commence operation at the time Ethanex acquires the first expansion phase of the Sutherland plant", estimated to occur during the last quarter of 2008. Ethanex estimates that the fractionation platform will enable total plant capacity to be approximately 132MGY upon completion of the project. Co-products will include high-protein distiller's grains, food-grade crude corn oil as well as corn gluten feed. ("After the initial closing"), Midwest will be responsible for continuing and completing the two-phase plant expansion. ("In two subsequent closings"), Ethanex will acquire each of the expansion phases. ("The second and third closings") are subject to testing and certification of the plant expansions in accordance with construction and performance specifications contained in the Agreement that were established by Ethanex and agreed to by Midwest. Ethanex will pay Midwest $60 million in cash and $25 million in Ethanex common stock (at each of the second and third closings). If Midwest fails to complete the plant expansions for any reason, Ethanex has the option to do so at its cost, in which case the amount payable to Midwest under the Agreement will be reduced by Ethanex’s completion costs plus a penalty to Midwest of 5-10% of those costs (depending on the reason for Midwest’s failure to complete the applicable phase). It is estimated that the final closing will occur in the first quarter of 2009. Ethanex’s ability to consummate the acquisition is subject to its receipt of bridge financing sufficient to permit it to continue operating through the first closing under the Agreement, which is expected to occur early in the second quarter of 2008. "Ethanex estimates that it will need at least $1.5 million of interim financing to continue operating into the second quarter". Additional funding would be needed if the first closing is delayed. Although Ethanex is in discussions with several parties regarding such interim financing, it has no commitments and cannot assure that it will be able to obtain the needed financing on reasonable terms or at all. The Agreement is terminable after March 5, 2008 by either Ethanex or Midwest if Ethanex has not obtained bridge financing of at least $1.5 million by that date. "If Ethanex is unable to obtain interim financing by March 5, 2008 it anticipates that it will be unable to proceed with the transaction, will need to cease operations and will be required to file for bankruptcy protection". Each of the three closings is subject to various closing conditions, including receipt by Ethanex of financing for the cash portion of the purchase price payable at each closing and (at the first closing) for construction of the fractionation platform, as well as other customary conditions. "Ethanex does not presently have commitments for the required financing, and there is no assurance that Ethanex will be able to secure any or all of such financing". Ethanex estimates that total financing needs for these transactions, including a $20 million working capital line, will be approximately $263 million. "The initial closing also is subject to approval of Ethanex’s stockholders of an amendment to Ethanex’s certificate of incorporation to increase the number of authorized shares of capital stock of Ethanex", as well as receipt of regulatory approvals and other third-party consents. Under the terms of the Agreement, if Ethanex is unable to obtain sufficient financing for either the second or the third closings, assuming all other conditions to closing are then satisfied, Midwest and Ethanex will operate the plant through a joint venture, under terms specified in the Agreement. Ownership of the joint venture will be in proportion to the parties’ respective investments in the project (with Ethanex’s investment being discounted by 10% for failure to obtain sufficient financing), subject to certain adjustments specified in Agreement. This announcement is neither an offer to sell, nor a solicitation of an offer to buy, any securities of Ethanex Energy, Inc. About Ethanex Energy, Inc. Ethanex is a renewable energy company whose mission is to be a low cost producer of renewable energy by employing advanced technology in design, construction and operation of ethanol plants. The company expects to achieve this industry position through the application of next-generation feedstock technologies and use of alternative energy sources. Ethanex is based in Basehor, Kansas with offices in Santa Rosa, California and Charleston, South Carolina. For more information about Ethanex, visit www.ethanexenergy.com. Forward-Looking Statement Disclosure This press release contains "forward-looking statements," as such term is used in the Securities Exchange Act of 1934, as amended. Such forward-looking statements include those regarding Ethanex’s ability to continue as a going concern, complete the acquisition of the ethanol plant from Midwest, finance the second and third closings (if the initial acquisition is completed), the timing and expected capacity of the planned expansions to the Nebraska facility, plans to construct and integrate Ethanex’s corn fractionation platform with the facility and the anticipated benefits of the fractionation platform. When used herein, the words "anticipate," "believe," "estimate," "intend," "may," "will," "expect" and similar expressions as they relate to Ethanex or its management are intended to identify such forward-looking statements. Forward-looking statements are based on current expectations and assumptions, which are subject to risks and uncertainties. They are not guarantees of future performance or results. Ethanex's actual results, performance or achievements could differ materially from the results expressed in, or implied by, these forward-looking statements. Factors that could cause or contribute to such differences include: (1) Ethanex may not obtain bridge financing needed to continue as a going concern, (2) Ethanex may not complete the acquisition of the ethanol plant from Midwest on the negotiated terms, within the anticipated timelines or at all, (3) Midwest may need additional financing to complete the planned expansions and may be unable to obtain that financing on acceptable terms or at all, (4) the Midwest facility may not expand production to the expected amounts, (5) the fractionation platform may not increase the efficiency of the Midwest facility, (6) Ethanex may not be successful in operating the facility, (7) Ethanex may not be successful in obtaining the financing needed to close the transactions with Midwest on the negotiated terms, within anticipated timeframes or at all and (8) other factors discussed in Ethanex’s filings with the Securities and Exchange Commission. Ethanex undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Investors: Ethanex Energy, Inc. Investor Relations Leslie Turner, 843-724-1553 l.turner@ethanexenergy.com or Media: Ethanex Energy, Inc. Chief Operating Officer Bryan Sherbacow, 843-724-1555 b.sherbacow@ethanexenergy.com Proposed Acquisition http://www.mreethanol.com/index.htm 27532 West Hwy 30 Sutherland, NE 69165 Fax: (308) 386-2498 Email: info@mreethanol.com Physical Location is one mile east of Sutherland, NE on U.S. Highway 30 Midwest Renewable Energy, LLC (MRE) operates a dry-mill ethanol plant located near Sutherland, Nebraska. The plant generates fuel-grade ethanol via natural fermentation and distillation of corn, primarily for blending with gasoline and other motor fuels. The facility, approximately one mile east of Sutherland, was originally constructed in 1991 by Nebraska Nutrients, Inc. Nebraska Nutrients utilized a modified wet milling concept as the basis for its process technology. The plant never operated to expectations. During the period from 1991-1994, the facility was the subject of litigation among the principal owners of Nebraska Nutrients. In December 1995, the facility conducted sufficient operations to qualify for the State Producer Tax Incentives but never commenced commercial scale operations. Nebraska Nutrients subsequently filed for bankruptcy. The plant remained idle until purchased by Sutherland Associates, LLC from the bankruptcy trustee in February 1999. After extensive improvements and renovation, the Project began its start-up in November 1999 and commenced commercial operations in January 2000. Records indicate that the 1999 improvements were designed by Delta-T, with the principal contractor being Fagan Construction of Granite Falls, MN. Lurgi/PSI of Memphis, TN provided construction management services for a portion of the Project development period. Delta-T, under the name Sutherland Associates, LLC operated the plant. Each of these firms has had significant previous experience in ethanol plant design and construction. The plant ran at less than the anticipated capacity from May 2000 to December 2001 averaging less than 14 MGY rates. The total amount produced during this period was 18.5 million gallons. The plant did not perform as expected. Due to poor evaporation, the Nebraska Department of Environmental Quality called for the plant to stop operations until the problems of waste stillage disposal could be resolved. During the shutdown, Delta-T sold the assets to Mr. Tony Ball, an engineer and entrepreneur. In early 2002, Mr. Ball attempted to restart the plant under the close watch of the primary lender from the previous ownership, Stearns Bank of St. Cloud, MN. The bank was unwilling to advance additional funds to Mr. Ball and the plant never restarted. Stearns Bank foreclosed on the facility in the summer of 2002. On April 25, 2003, Midwest Renewable Energy, LLC purchased all of the assets of Nebraska Ethanol, LLC, a company wholly owned by Stearns Bank. In December 2003, the facility was stripped of all process equipment. MRE conducted start-up operations in the summer of 2004 and declared full operations in September 2004. Today, MRE runs at a rate of 25 million gallons per year. The cost of the complete retrofit was approximately $9 million. An expansion to operate at 110 million gallons is expected to begin in 2006. --------------------------------------------------------------------------------------------------------------------------------
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