Greenshift Corporation (GERS)

[nobody12378]

Talk about unwinding a onion!

The Company’s wholly-owned subsidiary, GS CleanTech Corporation, is the owner of 100% of the issued and outstanding membership units of Genarex LLC (“GX”), an entity which in turn holds 36.75% of the issued and outstanding membership units of Genarex FD LLC (“LLC”). LLC was formed in 2015 for the purpose of continuing the development and commercialization of an intellectual property portfolio involving production of carbon-neutral alternatives for fossil fuel derived products (“Bioproducts Portfolio”), which had previously been developed in concert with various third parties. ASC 810 requires the Company to evaluate non-consolidated entities periodically and as circumstances change to determine if an implied controlling interest exists. The Company has evaluated this equity investment and concluded that this is a variable interest entity and the Company is not the primary beneficiary. LLC’s fiscal year end is December 31. Under the associated agreements, an unaffiliated member has agreed to provide LLC up to $3 million to fund the continuing development of the Bioproducts Portfolio. As of the six months ended June 30, 2015, $385,487 of that amount had been received. The members also assigned their respective interests in the Bioproducts Portfolio to LLC. GX’s contribution was valued at $4 million, however, the relevant agreements provide for GX to receive a preferential distribution until it receives approximately $3 million, at which point GX’s interest will decrease from 36.75% to 24.50%. The Company engaged two separate third party valuation firms, the first to complete a fairness opinion in respect of the foregoing, and the second to perform a valuation of GX’s interest in LLC using the fair value method as defined by FASB ASC 805-10-20. Under this method, fair value is defined as “the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date.” Using the income approach, the valuation company used the discounted cash flow method to develop low, mid and high cash projections for LLC’s potential business model by estimating the expected cash flows derived from production of LLC’s products on a commercial scale. As of June 30 2015, the Company had funded $515,849 towards operations and research and development of LLC, of which $385,487 has been reimbursed under the relevant joint venture agreements. The following presents unaudited summary financial information for LLC. Such summary financial information has been provided herein based upon the individual significance of this unconsolidated equity investment to the consolidated financial information of the Company. The investment balance carried on the Company’s balance sheet amounts to $3,733,132 as of June 30, 2015. The Company’s share of the net loss from LLC for the six months ended June 30, 2015 was $270,543.

http://www.genarex.com/news

http://rebel.alltech.com/sponsors/genarex-fdllc

Some how linked to this guy: https://www.linkedin.com/in/bertfarrish1

Appears that they are doing business:
rebel.alltech.com/sites/default/files/files/exhibitor-profiles.pdf



Three Months Ended
6/30/2015 6/30/2014

Revenue $ 1,149,559 $ 4,109,835
Costs of goods sold 439,064 1,589,259
Gross profit 710,495 2,520,576

Operating expenses:
Research and development (146,429 ) 233,682
Sales, general and administrative expenses 1,763,533 2,045,033
Total operating expenses 1,617,104 2,278,715

Income (loss) from operations (906,609 ) 241,861

Other Income (Expense):
Gain on extinguishment of debt 6,350 2,814,952
Other expense (560,000 ) --
Miscellaneous income -- 3,981
Equity loss from investee (270,543 ) --