Greenshift Corporation (GERS)

[Olie77]

10k: 10million of additional YA debt satisfied in 1q11.

On June 17, 2010, GreenShift Corporation and its subsidiaries signed a series of agreements with YA Global Investments, L.P. ("YA Global") to reduce and restructure GreenShift’s convertible debt to YA Global (the “YACO Agreements”). On July 30, 2010, the Company and YA Global entered into an agreement pursuant to which the transactions contemplated by the YACO Agreements (the “YA Corn Oil Transaction”) shall close effective August 1, 2010 (the “Effective Date”) subject to satisfaction of certain closing conditions. The conditions to effectiveness of this transaction were satisfied and the transaction is deemed effective for reporting purposes as of the first quarter of 2011. Since the conditions of closing were not satisfied as of December 31, 2010, the Company’s results of operations for the year ended December 31, 2010 are reported herein on the basis that the closing of the YA Corn Oil Transaction had not


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occurred as of such date. The YACO Agreements call for three GreenShift-owned corn oil extraction facilities based on GreenShift’s patented and patent-pending technologies and GreenShift’s interest in a fourth facility to be transferred as of August 1, 2010 to a newly formed joint venture entity, YA Corn Oil Systems, LLC (“YA Corn Oil”). In exchange, $10 million of the convertible debt issued by GreenShift to YA Global shall be deemed satisfied as of the August 1, 2010. GreenShift will also receive a 20% equity stake in YA Corn Oil and the right to receive 20% of YA Corn Oil’s distributable cash upon the realization by YA Corn Oil of a 20% internal rate of return on its invested capital. GreenShift further agreed to provide management services to the YA Corn Oil for the ongoing operation and maintenance of the transferred extraction facilities in exchange for certain management and brokerage fees, as well as earnings-based performance bonuses to be paid in the form of up to another $6 million in reduction of GreenShift’s convertible debt due to YA Global. The conditions to effectiveness of this transaction were satisfied as of the first quarter 2011. The Company’s debt was consequently reduced by $10 million as of that date, which decreased the remaining balance of convertible debt due to YA Global to about $33 million. This amount can be reduced further down to approximately $27 million upon realization by GreenShift of the performance bonuses noted above.