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It would be. And the remaining patents could have more value in the process. But it would wipe out the shareholders.
The following is in response to questions received from several of our shareholders:
Current Assessment – It is not reasonable to expect any further net value or recovery of any kind from the corn oil patents. The Company has no revenue and the Company’s resources are limited to proceeds provided under related party debt arrangements on a match funding basis. Additional debt will cease to become available at some point. The Company also remains in continuing default of its secured debt agreements. Litigation financing may be available in conjunction with a contingency arrangement to pursue recovery for legal malpractice. While we can easily prove extensive damages in that matter, our former attorneys have availed themselves of every possible tactic at their disposal to delay arbitration and judgment, and they can be expected to continue to do so. There is a non-zero chance of a net recovery in the malpractice matter, and there is a chance that it may be sufficient to cover all of CleanTech Alpha's debts such that a distributable cash surplus may remain. If that occurs (emphasis on "if"), then we intend to proportionately distribute any net distributable cash surplus to all of our shareholders. We have no plan to operate CleanTech Alpha if or when that occurs. No assurances can be given that any recovery will occur.
Previously Announced Plans – We previously evaluated a number of alternatives to enable the Company’s shareholders to have increased access to liquidity. We attempted to complete a transaction involving shares of another liquid stock, however, after an extensive evaluation, we concluded that the associated tax and securities ramifications rendered that option cost-prohibitive and infeasible. The Company accordingly shifted its focus to a potential alternative transaction which would provide each of our shareholders with new shares in a newly-public entity in addition to their current holdings in the Company. If that transaction is successful, and no assurances can be given in that regard, then the newly-public entity would be free of the constraints described in the first paragraph above, and it would therefore have the ability to conduct new financing, reverse mergers, acquisitions, and other transactions.
Reality Check – Your collective interests are the sole reason that the Company continues to function. We intend to continue to use our best efforts to advance our shareholder interests for so long as we are able to continue making the attempt. To be clear, we only have two viable options to do so at this point: (1) by responsibly guiding CleanTech Alpha and the corn oil saga to completion, and, hopefully, (2) by completing the alternate transaction described above.
Technologies – The Company invested in research and development of corn oil extraction-centric and corn oil extraction-adjacent technologies over many years prior to 2017. Most of that work involved further processing of de-oiled distillers' grains. Some of it involved other forms of biomass. Regardless, all direct research and development efforts ceased due to the Company's inability to raise additional capital as a result of the corn oil infringement matter. In May 2018, the Company attempted to resolve that constraint by issuing a license for all of its technologies to a jointly-owned subsidiary of Attis Industries (20% Company, 80% Attis). Attis thereafter tried (and failed) to acquire additional rights to patents that were issued to and owned by an independent third party. The Company's former Chief Technology Officer, who ceased to be an employee and officer of the Company in 2017, subsequently negotiated to license and acquire the independent third party's patents in 2021. At no point did the Company own any rights to those patents.
We hope to have an additional update before the end of the year.
All –
As many of you know, the infringement litigation was lost without a trial. The technologies that the Company developed are used by more than 95% of the industry to produce billions in additional annual profit. At least seven of twelve corn oil extraction patents remain valid and enforceable. We have a viable offer from a new litigation firm to restart from scratch on a contingency arrangement. However, the path to monetization is fraught with significant risk and additional delay, neither of which any of you deserve. Critically, that path will also cost the Company between $500,000 and $1,000,000 per year ancillary litigation expenses for several years, and, inasmuch as the defendants in the corn oil litigation remain bent on the Company’s extinction, the only form of financing available to cover those costs would carry a certain dilutive expense for an uncertain recovery. As I have stated many times, any risk of additional dilution without a clear path to accretive returns is unacceptable.
Consequently, the Company is focused on delivering an alternative path to liquidity for its shareholders that is not linked to the fate of corn oil and the infringement litigation. The Company is working through the details in that regard with counsel. Additional information will be provided after OTC Markets accepts the Company’s application and current financial statements are posted to www.otcmarkets.com. However, until then, the Company can confirm the following in response to recent questions from several of you:
- Neither the Company nor its intellectual properties will be acquired, in spite of our best efforts. No discussions are being held to that effect. Any speculation to the contrary is unfortunately not correct. The continued aggressions of the defendants in the corn oil litigation, and the implicated risks and uncertainties, have rendered any such options impossible.
- The alternative path to liquidity will likely take the form of a distribution or other transaction under which the Company’s common shareholders of record are issued shares in another publicly-traded company at a premium to the Company’s current market price, subject to fulfillment of the required conditions and the blessings of counsel for all applicable parties. That transaction is likely to involve a pre-existing equity interest in Artizen Corporation.
- The Company changed its name to CleanTech Alpha Corporation and will have limited operations beyond the infringement litigation after each of you successfully receive shares in the new company. More information will be provided on that front in the Company’s pending financial statement disclosures.
Speaking personally, I can’t overstate my gratitude for your heroic interest, support, and patience through many years of brutal adversity, from the 2008 financial crisis and the loss of the $50 million GE equity financing, to the dilutive toll of holding the line to protect and preserve the Company’s corn oil platform through over $110 million in debt repayment, to the decade spent at war with the ethanol industry, to losing that war without a trial. We have all invested with blood, tears, and years. In spite of what it may have seemed from our silence, I have never once lost sight of that, or of you and your investments. The corn oil saga should have produced a vastly different result. Our technologies have offset more than 260 million barrels of fossil fuel and produced more than $12 billion in additional profit industry-wide since inception, and that value has recently increased to more than $3 billion per year. We disrupted the industry. We shifted the consumption practices of millions. I’m sorry that I and we were not able to ultimately convert even a sliver of that success into increased shareholder value for all of you. The liquidity alternative above is intended to offset that outcome for each of you. It is the least that you deserve.
Again, thank you for your interest and support. The Company will provide an additional update after OTC Markets accepts the pending application and current financial statements are posted.
Regards,
Kevin Kreisler
Negative. Alternative path to liquidity means just that.
On the record comment: we lost. Without a trial. The technology that we developed is used by more than 95% of the industry to produce billions in additional annual profit. At least seven of twelve patents remain valid and enforceable. We have a viable offer from a new firm to restart from scratch on a fully-funded contingency arrangement. However, the path to monetization is fraught with significant risk and additional delay, neither of which any of you deserve. Therefore, regardless of the ultimate fate of the litigation and corn oil, we are focused on delivering transparency and an alternative path to liquidity for all of you. The name of the company will change. It’s focus will change. And all of our shareholders will be better off for it.
Buffalo isn’t buying GreenShift.
The filings will be brought current before completing any strategic transactions.
We fought for many years to preserve and advance our portfolio to build value.
We stayed public to allow all of our stakeholders to participate in whatever that may be.
Speaking personally, I intend to do everything in my power to maximize that value, especially including for each of you. Doing so is about many things beyond my obligation as a fiduciary. Responsibility. Appreciation. Redemption. Vindication. Disruption.
We proved that globally-meaningful change is possible. We delivered tremendous value to an industry, but we/I failed to bring that value back to our shareholders. We were before our time in 2005. Now is the time. I have zero interest in gamesmanship.
All -
This post is to provide each of you with a copy of a Q&A with another investor involving previously-accessible public information.
***
Will GreenShift be releasing an investor update this quarter?
That is our current plan.
Has all major legacy debt been paid off?
Yes. The bulk of the remaining secured debt is with friendly related parties. Those lenders and I continue to provide working capital support. My hope is to eventually convert those balances into a form of long-term non-dilutive preferred equity that the company would redeem with a portion of its after-tax net income, if possible in the future.
Have the dilution issues been completely dealt with?
Yes. However, we want to do better than that. We are evaluating additional tactics to offset at least some of the historical impact.
Is 20,000,000 shares outstanding the most up to date and accurate number?
We have recently re-engaged with our accountants to bring all financial statements and securities filings current. We will have exact numbers once that it is done, however, your estimate is reasonably close for the issued and outstanding common stock, which represents about 20% of fully-diluted issued and outstanding capital stock. Viridis Asset Management LLC (my holding company) and its assigns beneficially own 80% of GreenShift’s fully-diluted issued and outstanding capital stock in the form of preferred equity.
What was the purchase (latest SEC filing) of 500,000 Attis shares on 12/20/2019 related to and does GERS still own those?
That form pertained to one of two preferred stock conversions filed by GreenShift against the $18,000,000 in Attis preferred stock issued in that transaction. The conversion was deemed to be a “purchase” under the applicable reporting rules, hence the form. Those shares were never cleared, deposited, or sold.
What percentage of the GreenShift/Attis JVCo does GreenShift currently own?
GreenShift retained 20% of the JVCo entity under the May 2018 documents. Attis is required to return the other 80% in the event of default.
Are both GreenShift and Attis going to relist to a major Exchange at some point?
We cannot speak for Attis. GreenShift recently re-engaged with its accountants to bring its financial statements and filings current, with an objective of doing so as soon as possible during the first quarter of 2021. Additional disclosure on uplisting ambitions and other plans will be provided in our planned update for later this quarter, and otherwise as appropriate.
Is the $500m Cares Act loan rumor true?
GreenShift has engaged a banker to complete a direct application to provide capital for selected stealth mode and other projects under the CARES Act Secondary Market Corporate Credit Facility (“SMCCF”) program created and administered by the Federal Reserve Bank of the US. We expect to submit that application in November 2020. However, the application that you are referring to involves another entity. I completed a personal investment in a company called White Buffalo Corporation that subsequently became a GreenShift licensee and appointed me as its chief executive officer. White Buffalo has applied for $500,000,000 of debt funding under the SMCCF. The use of proceeds under that financing is intended to include scale-up of several technologies licensed to White Buffalo by GreenShift, among others. Additional disclosure in that regard will be provided as appropriate. Finally, to avoid confusion, I also completed a personal investment in a company called Artizen Corporation, who also became a GreenShift licensee and appointed me as its chief executive officer. As a cannabis company, Artizen is not eligible for SMCCF financing.
How many ethanol plants does GreenShift either wholly own or own a membership interest in?
None at this time.
What's keeping GreenShift from updating fillings?
Nothing today, except for the time it will take to complete the financial statements and filings, and to resolve any issues raised by our independent accountants and securities counsel as we work to get that done.
All -
The company will have a general update this quarter. Many of your questions will be answered at that time.
Your patience and support continues to be remarkable. Thank you.
Kevin
The restructuring documents were never completed. The lender insisted on including variable priced conversions into our stock. I said no. It’s been in limbo. We were waiting for the appeal to run its course before providing another update. The defendants and their attorneys read everything written here and on the skunk blog.
We will take all of you into that courtroom.
If there is a book here, then each of you are among its heroes.
Whether you hate us or love us, you’re here. You’re active. Fifteen years after we began. Through the crash. Through a decade of thievery and hell. Through the debt and dilution. Through the splits and the scars. Through it all. No matter what happens today, and no matter where we go from here, thank you. Your support matters. We have not forgotten any of you. Nor will we.
Every shipment of oil is a choice. A conscious decision to practice the methods disclosed in our patents without a license. A deliberate act taken on the hope that we will fail and die before we can win and collect. Failure is not an option, and we have no intention of dying. Royalties are accruing.
As difficult as things have been, I'm fortunate in that everyone I love is alive and well. My worst fear is losing any of them. I can only begin to empathize. I'm sorry for your loss and pain.
4 is assured. 5 requires performance, regardless of 1 & 2. 6 sounds very nice. We certainly don't want anyone to go out of business, but we will consider alternate forms of payment that facilitate shared value creation for all stakeholders. Such as ownership and upgrades.
Nobody - agreed, this is not constructive, and I fear that further responses from anyone are fueling the flat earth debate, including me. This will be my last public reply to Hank on the matter. Our point has been made.
Hank -
There is no SEC investigation. There has been no communications or correspondence from or with the SEC involving GreenShift or its filing status. Any comment to the contrary is baseless and not true.
Consider using care when you post to distinguish between facts and your beliefs or assumptions.
The mere filing of a compliant does not automatically result in an investigation, and the SEC does not investigate every complaint it receives. Likewise, while it is true that the SEC has published its requirements, that doesn't mean that the SEC contacts or investigates every company that is delayed. Even if they had contacted us (which, again, they haven't), or even if they contact us between now and the time we file, the remedy is simply to file.
We are working on our filings as previously disclosed. Please feel free to email me directly for a status update if you don't see our filings online by December 31, 2018.
Thank you for your obvious interest and support.
Thanks,
Kevin Kreisler
GreenShift Corporation
Hank -
For now, I suggest that you read the Attis Form 8K and the accompanying exhibits filed in connection with the May 25, 2018, transaction for specific answers to your questions, all of which are answered by those documents. Email me if you have further questions after doing the reading.
Further, we have not received any correspondence or other communication from the SEC regarding our filing status or any other matter pertaining to GreenShift. Your false accusations of impropriety, however, were the subject of unnecessary scrutiny and oxygen in a material commercial matter. I will deem the matter resolved if you fail to comment further on this point. I suggest that everyone consider doing the same and move on.
Thank you again for your input.
Kevin
The GreenShift site was not hacked. We’re not seeing the issue you raised. Please clarify. Otherwise, thank you for your comments and response.
I’m aware of the rules and risks. The letter will be posted, as well as any subsequent response that we deem to be material, if any.
1 - I agree that using the I-Hub board and the SkunK blog is unorthodox. However, the I-Hub board contained some posts that were causing an issue for us elsewhere, and that required a public response. Further, I saw those posts as a symptom of a condition caused by our delayed filings, a condition that I thought would be best treated for now by giving our shareholders an opportunity to openly ask questions. The GreenShift site is not interactive.
2 - We have not registered our stock. A lender converting their shares must do so under an exemption from registration provided by Rule 144, which requires a legal opinion and a compliance review by the broker and the clearing firm. Compliance reviews involve an assessment of the debt instruments, the consideration paid in exchange for the debt, the applicable conversion terms, the Company’s current disclosures, and whatever else the compliance officer deems to necessary. It is difficult to complete those reviews if the Company’s disclosures are not current. The lenders still have the power to convert debt into stock at will, subject to applicable regulatory limitations. In sum, those limitations restrict debt conversions to either 4.99% of the Company’s issued and outstanding common stock at the time of conversion (when taken with all shares held by the converting lender and its affiliates), or 9.99%. Historically, when we were current, lenders have used their conversion rights to convert debt up to that amount and sell within hours, only to repeat the process multiple times within a single day. The situation improved for the Company when DTC “chilled” our stock by removing it from eligibility for electronic share transfer, thereby frustrating the share supply chain by forcing all transactions to be completed in physical form. Physical transactions are costly and time-consuming for all parties involved (transfer agent, broker, clearance firm), which increases the cost and price risk for the lender seeking to deposit the shares. As the stock price decreases in response to the selling pressure, the share amounts increase while the economic substance per deposit and sale decreases. The lower that becomes, the less incentive the lender has to convert and sell. And, if the demand and liquidity are low - for example, because we aren’t putting out news, then a lender converting its debt into stock will receive the shares, but it would be at risk of loss if the price goes down before they can be sold. Thus, a lender today could convert about $150,000 of debt into about 3,000,000 shares at about $0.05 per share. If the price drops to $0.025 then the lender loses $75,000 on the trade. Since liquidity is low, it would take a month or more to “leak” the shares into market - i.e., to our shareholders. That may make sense to the lender for the first few conversions, but it doesn’t when the value per conversion drops. Deliberate inaction (delay and silence) thus “chills” conversions in a similar manner to DTC’s method. Our December 2015 refinancing agreements created an opportunity to implement the above without breaching our covenants.
3 - I can’t find the issue you’re referring to on our site. Please confirm or email me directly. Doing so will also have the benefit of confirming my identity for you. My email is kkreisler@greenshift.com.
Thank you.
Mr. Winston -
Thank you for asking.
1-3 - It is reasonable to expect that our results of operations between October 1, 2016 and March 31, 2018, were materially consistent with prior periods. Our operating income is positive. You’re free to assume that our net worth is negative until and unless we report otherwise. Aside from that, Mr. Nimble is correct. I am limited by what I can say for now. Further detail will need to wait for the completion of our audits and the filing of our reports.
4-5 - GreenShift’s wholly-owned subsidiary, GS CleanTech Corporation, is the sole owner of all of our extraction patents and all applicable license agreements. No patents or licenses have been transferred.
6 - Our policy is not to comment on matters subject to pending litigation. However, I will say that we’re still here in spite of everything for a reason. I strongly believe that we are right and I have faith in the system. My partners and I are prepared to spend another decade fighting if need be. Read into that what you will.
7 - Yes.
8 - It wasn’t. It’s a different court. The access protocols are simply different (see below). We don’t have an explanation, but it’s not because anyone is trying to hide anything. The brief is on our website.
Do you want to ask any questions to confirm the veracity of your accusations? If so, now is the time. We need the issue to be resolved.
Your core point about transparency was correct. However, there is no SEC contract, no laws were broken, and there will be no prosecution. I didn’t neglect my duties by not filing. I honored them. I chose the lesser evil, and I couldn’t broadcast it without defeating the purpose. Again, I regret any confusion that may have caused.
I’m choosing to look past the negativity and interpret your comments to mean that I need to be more responsive, especially until our filings are out, and even if it means temporarily using unorthodox methods like posting on this board. In exchange, I hope that you can agree to find more constructive ways of expressing your criticisms and frustrations. You’re free to email me directly at any time.
The stakes are far too high. People tend to think about fire if they see something that resembles smoke, even if it’s nothing more than a hundred posts of hot air. Shouting fake or misinformed news loud enough for long enough can alter perception and influence action. Russia just took all of us to that school. Google me. Look at the words that feed the autofill. It’s obviously not true, and yet that’s what people see. I get asked about it all the time. Because people make uninformed comments on these boards.
Everyone that posts here should assume that everyone that matters to our future is going to read whatever you write - including current and future licensees, investors, adversaries, attorneys, clerks, and judges. Please remember that anything you post will be there forever, and that your words can have unintended harmful consequences. We’re all in this together.
Thank you for your interest and support.
Sincerely,
Kevin Kreisler
GreenShift Corporation
PACER Access Instructions:
https://urldefense.proofpoint.com/v2/url?u=https-3A__pacer.login.uscourts.gov&d=DwIGaQ&c=gAzS7Z2sPulVLgfP0R9Uzw&r=zQtoayD7hsASLMwR4qL9rV3LsVVohMG2v8wFNrQTXo8&m=nSfkKXjQ2bg-FrGmQRkfKgtxuZeIEb7D0obJd1k6gmw&s=VJ6YM0iwZqcFZCeIJ3H2qW_xX3z3uojReSiXvnI4CrM&e=
Search for case number 16-2231.
Click on the case number (not the case name).
Select docket item 62 for the public version of the CleanTech opening appeal brief.
TO SHAREHOLDERS OF GREENSHIFT CORPORATION:
We’re working on our filings while we finalize restructuring agreements with our lenders. While we’re targeting year-end to get everything done, our reports will be delayed if execution of the restructuring agreements is delayed. If that occurs, it will be to mitigate the risk of dilution.
We regret any confusion that may cause. Transparency is obviously a legitimate concern. It has been almost two years since our last filing, and I empathize with the impact. There would be no void to fill with speculation if there was no void to fill. That said, bringing our filings current carries an immediate risk of dilution from lenders that can be expected to convert their debt into stock as soon as they can deposit, clear, and sell our shares - before the Federal Circuit’s decision, before we make progress building value again, and before buyers come to the table.
The stakes couldn’t be more material. We have about 30 million shares outstanding. Full conversion of our legacy debt at $0.10 per share would increase our outstanding stock by more than 160 million shares. That amount obviously increases as the price decreases; for example, to 1.6 billion shares at $0.01 per share, 16 billion shares at $0.001 per share, and 160 billion shares at $0.0001 per share. Worse, that last price is our par value, and it’s the trigger point at which we would be forced to gut ourselves by completing yet another reverse split to comply with our loan agreements. It wouldn’t take much selling to drive the price down to that level. Getting current would just start a fire and news would add the fuel. You’d get increased transparency, but you’d also get to watch your investments burst into flame and burn to ash; and, once we got current, there would be little that we could do to protect you without breaching our debt agreements. I’m not going to allow any of that to happen. Not again.
New shareholders may not appreciate the context. We attempted a production-centric model between 2005 and 2008, prior to issuance of our patents; one in which we partnered with and provided incentives to our clients that included inherent protections for us by paying for and integrating our production assets into participating plants. We had more than a third of the industry signed up. GE’s December 2008 Agreement to invest about $50 million into that model was intended to be a prelude to an industry-wide rollout of COES under GE’s ecomagination initiative. It was a company-maker. The WSJ even had an article drafted on the deal. It was waiting for release when GE breached our agreements in March 2009, ghosting us after a year of due diligence, negotiation, and documentation. The only explanation we were given was that Immelt had shut down outside investments because GE’s credit rating was at risk after their stock had caved. Nevertheless, we had used most of our liquidity to honor our client and vendor commitments, and to keep construction on schedule in reliance on GE’s agreement to fund. Refinancing to replenish our working capital with another source in time was impossible. The crash had just hit full swing. Our backup sources were all struggling to meet their own needs. Banks and funds were shutting down. The stench of panic was everywhere. We ran out of cash. Our business collapsed.
We received our first notices of allowance weeks later, but we had over $110 million in debt and a fraction of our prior revenue. Some argued that bankruptcy was necessary, and it probably was, but we obviously didn’t file. It would’ve wiped everyone out. Lenders. Shareholders. Employees. Families. Everyone. That wasn’t much of a choice as far as I was concerned. So, we hunkered down and weathered the storm. We slashed everything, tapped into savings, and raised what we could from friends and family. We struck expensive deals with hard money lenders when that wasn’t enough. We preserved our core assets and we rebuilt our business, returning to profitability by 2012. Most of the $94 million in debt that we eliminated by 2017 was achieved by liquidating assets and using as much of our cash as we could afford to commit. The rest was paid with stock.
We have two kinds of lenders. Related party lenders are comprised of friends and family, and, while they expect their interests to remain protected with liens and intercreditor agreements, they have always been flexible with their funding and repayment terms. The bulk of their investments were provided after the crash, during the recession when our survival was at constant risk and capital from other sources was limited and ridiculously expensive. They care about repayment, but I personally guaranteed each of their loans, and they agreed to let us to pay over time, in alignment with the shared long-term success of all of our stakeholders. In contrast, unaffiliated third party lenders have no special relationships or interests in our business. All of their debt originated before the crash, and the balances were vastly more than our cash flows alone could service, let alone before returning to profitability. Their agreements consequently included terms that allow them to accelerate payment in parallel to our cash payments by directly converting their debt into stock without our involvement or consent. They also have the right to force us to complete as many reverse splits as they need to continue converting and selling stock until they are fully paid.
The dilutive effect of those agreements has haunted us for a decade, through five painful reverse stock splits that undercut our stock ten billion times. The dilution has been beyond staggering. It’s an irreparable scar, a deformity that we endured for having the temerity to survive. It’s shameful to me despite the circumstances and absence of alternatives. It’s a cross that I and we will forever bear, regardless of how our story ends. We disclosed the implications and risks in our filings, for whatever good that did, and I openly vowed for many years to shut it down as soon as I could.
Could it have been less? Could we have spent less along the way? Perhaps, but not materially. We did our best to minimize the impact over the years in spite of what it may have seemed from afar. Unfortunately, the sheer magnitude of our pre-crash debt and the status and extended timing of our infringement matter frustrated all of our attempts until recently. We made some headway in 2015, but we simply didn’t have enough collateral or cash flow to refinance on terms with better sources that allowed us to eliminate the toxic conversion terms. The Attis transaction was structured in part to resolve that circumstance, and documentation is finally underway, almost ten years to the month after we signed with GE.
We only have two practical options to prevent dilution without triggering multiple debt defaults until those agreements are signed: delay and silence. Issuance, deposit, and clearance of new shares is very difficult to accomplish if our filings aren’t current, and sales at rates which justify the effort are impossible without demand and liquidity – neither of which are viable if we’re not talking. If a tree falls in the woods and nobody is around to hear it, does it make a sound? Why bother converting debt and taking price risk if the conversion shares can’t be sold? We had used silence in the past to variable degrees of success to limit dilution that we couldn’t stop, but the combination of delay and silence has effectively chilled all conversions and dilution since 2016.
We have been vilified for dilution over the years. I’ve seen the comments. Some are fair. Some are irresponsible. While the right to question and criticize management is the prerogative of any shareholder, I take issue with fake news, invectives, and baseless accusations of impropriety. Such comments debase and lessen all of us. I’m disappointed in those that assert themselves in a public forum before reading our historical filings or asking basic questions to validate their assumptions. That’s especially irresponsible when their comments cause harm; such as when they state falsehoods that prospective shareholders believe, or that our adversaries happily subvert to malign our credibility, or that our clients and prospective partners see online.
The worst of it unsurprisingly involves me. My critics have cited the history of dilution (and reporting delays) out of context as proof that I am unethical, immoral, or worse, and, therefore, that GreenShift is somehow morally suspect by extension. Of course, none of that is true. I’ve never seen or heard anyone make the opposite points: that the chips were down and holding the line and repaying our debt instead of filing bankruptcy was the ethical and moral thing to do; that we had little choice thereafter but to watch the dilution as it occurred because our lenders had the power to issue stock to themselves; that discretion was always the better part of valor since the greatest good for our shareholders was best served by staying alive and preserving the technology; and that our only other option was to deliberately breach our debt agreements and split our resources to start a second war defending ourselves against multiple foreclosure actions (read: litigation, expense, bankruptcy, scorched earth, failure). We’ve been fighting a war of attrition since 2009. Against opponents with vastly superior resources. We need allies and partners, not enemies, and we need to pick our battles.
I have absolutely made my share of mistakes. I’m as flawed and fallible as anyone else, but I’m an honest man. I care about faith and family and doing the right thing, and I take my fiduciary duties very seriously. Our actions don’t remotely meet the standards of any form of wrongdoing. Anything stated to the contrary is utter nonsense. I would gladly open the floor in our next shareholder meeting to anything anyone wants to ask of me – in person, where everyone can be held accountable for words. I have always put GreenShift’s needs first, and I accept full responsibility for all of our actions and their consequences. I chose the financial partners that we got in bed with. I chose to take on $110 million in debt on the bet that the value of what we were building would be more than enough to repay it. I chose to stay out of bankruptcy and repay our debts when the sky fell and that bet failed. I chose to persevere and cut the deals we needed to survive and build value with our technologies. I chose to incur the cost of facing every insult and adversity that we resolved along the way. And I chose to delay filing the second I saw an opportunity to shut off the dilution (that wasn’t negligence, btw - it was intent, and I stand by my decision). GreenShift is in large part the product of my choices. Each of us has bled because of them. The dilution happened because of them. Only time will tell if I was right or wrong under the circumstances, if such concepts even matter at this point. However, as we stand here today, I will be the first to admit that one thing is crystal clear; I have failed to deliver value to our shareholders according to the only metric that matters after everything is said and done – our stock.
That doesn’t sit well with me. At all. It never did. It never will. So, no, I am not taking GreenShift private for that reason alone. I supported GreenShift and its team in every way I could through a decade of hell to build value. I contributed more than $15 million in cash over the years, plus another $8 million in investments (at cost) to facilitate completion of the Attis deal – in each case for no additional equity, debt, or any other form of consideration in return – to build value. We’re working on growth again to build value, both on our own and with Attis through our jointly-owned subsidiary. And we’re getting current and cleaning up our share structure (without splitting) specifically to allow our shareholders to participate in the value of whatever comes next. I won’t speak yet as to what that value is or may be, but it will be as much as I and we can make it. As I said this past summer, it’s high time that our shareholders had a chance to participate in the value that we created for so many others.
Some of you might recall the vision we outlined for GreenShift’s integrated biorefinery plans before the crash. We outlined a series of iterative technology upgrades designed to collectively shift the efficiency and profitability of corn ethanol dramatically forward by extracting and refining co-products into an array of value-added renewable alternatives to fossil fuel-derived products. We targeted producer partnerships and planned to leverage our technological capabilities to acquire, upgrade, and use first generation production assets to produce more with less. We spoke of greenshifting the industry.
That vision is alive and well today, more so than ever. Attis’ plans are complimentary to everything we’ve ever done. They have been amassing a broad portfolio of biorefining technologies, and they’re working on some extremely exciting things, some of which build on and add to our technologies. Plastics. Adhesives. Drop-in fuels. Breakthroughs. All from biomass. We’re working together to build value through our joint venture, free of the constraints of our legacy debt and litigation, making more progress than we have in a decade. Imagine the effect of fully integrating COES and biodiesel into a single Attis-owned ethanol plant and you’ll get a sense of the starting point of our trajectory. Some of you participated in the Attis conference call this week. Those that didn’t should consider listening to the replay (access instructions below). The Attis roadmap and our shared opportunities for value creation have me and us excited and energized again, for the first time in many years. Developing those opportunities rank amongst our top priorities.
Our next steps are simple: stay focused, support Attis and our joint venture subsidiary, service our clients, continue to innovate, complete the restructuring, get and stay current, communicate, push through the appeal, make peace, acquire, diversify, grow … and build value for all of our stakeholders. Especially, and most importantly, for each of you.
I hope that the extent and candor of this update has been helpful in view of the filing delays. I look forward to our next communication, as well as a shareholder meeting as soon as we can. As always, thank you for your continued interest and support. Please feel free to email any questions you may have to my attention at kkreisler@greenshift.com.
Sincerely,
Kevin Kreisler
GreenShift Corporation
Attis Industries Inc., September 26, 2018, Conference Call:
A replay of the call will be available through October 10, 2018. To listen to the replay, dial (877) 481-4010 (domestic) or (919) 882-2331 (international) and use replay ID 37601. The webcast replay will be available online through December 26, 2018, at: http://www.investorcalendar.com/event/37601.
About GreenShift Corporation
GreenShift Corporation (“GreenShift”) develops and commercializes clean technologies that facilitate the more efficient use of natural resources. GreenShift primarily does so today in the U.S. ethanol industry, where it innovates and offers technologies that improve the profitability of licensed ethanol producers. GreenShift generates revenue by licensing its technologies to ethanol producers, and by providing its licensees with success-driven, value-added services and other solutions based upon its expertise, know-how, technologies, and patent position. GreenShift was founded on the belief that the first, best and most cost-effective way to achieve positive environmental change of any magnitude is to develop technology-driven economic incentives that motivate large groups of people and companies to make incremental environmental contributions that cumulate to catalyze disruptive environmental gains. GreenShift has done so once with its portfolio of patented corn oil extraction technologies. It intends to do so again. For more information, visit: www.greenshift.com.
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