GSCT - GS CleanTech Releases Summary Impact of Restructuring

GS CleanTech Releases Summary Impact of RestructuringBusiness Wire "US Press Releases "
NEW YORK--(BUSINESS WIRE)--
Kevin Kreisler, chairman and chief executive officer of GreenShift Corporation, issued a letter to the shareholders of GreenShift and its subsidiaries on November 9, 2007 that provided an update on GreenShift's restructuring and recent growth.
This announcement is to provide an outline of the specific impact of the steps taken to accelerate the completion of GreenShift's restructuring on the shareholders of GS CLEANTECH CORPORATION (OTC Bulletin Board: GSCT).
Additional detailed background and other information pertaining to the disclosures that follow are provided in GreenShift's November 9, 2007 shareholder letter, which was filed with the Securities and Exchange Commission on a Form 8K by GreenShift and its subsidiaries and will be available on the SEC's EDGAR website the morning of November 13, 2007. The letter is currently available on GreenShift's website at www.greenshift.com. IMPACT ON GS CLEANTECH SHAREHOLDERS
-- Cancellation of Pending Mergers
The two previously announced GS AgriFuels - GS Energy and GreenShift - GS CleanTech mergers were canceled as of November 9, 2007.
-- Transfer of GS AgriFuels and GS Energy to GS CleanTech
On November 9, 2007, GreenShift transferred its 60% stake in GS AgriFuels and 80% stake in GS Energy to GreenShift's 80% owned GS CleanTech. GreenShift received no consideration in return for these transfers to GS CleanTech. These transfers have been completed.
-- Transfer of Corn Oil Extraction Technology, Assets and
Contracts to GS AgriFuels
GS CleanTech will transfer its corn oil assets to GS AgriFuels in return for a term note issued at fair value after GS CleanTech has received an independent fairness opinion relative to the terms of the transfer. An appraisal firm is being retained to assess the fairness of this transaction. This transfer can be expected to be completed within 45-60 days.
-- Recapitalization of GS CleanTech
GS CleanTech will complete a 1:50 reverse stock split as soon as possible. The reverse split can be expected to be effective within 45-60 days, but is subject to any time that may be required for a standard regulatory review of the information statement filed on November 9, 2007 to affect the reverse split.
-- The New Share Structure of GS CleanTech
After its 1:50 reverse stock split, GS CleanTech will have about 140 million shares outstanding on a fully-diluted basis, with the following approximate fully-diluted pro forma post-split share structure: GS CleanTech Corporation: Fully-Diluted Pro Forma Shares % of
Share Structure Total
-------------------------------------------------- ----------- -------
Authorized Common Shares 500,000,000 --
Authorized Preferred Shares 1,000,000 --
Issued and Outstanding Preferred Shares -- --
Issued and Outstanding Common Shares 140,000,000 100.00%
GS CleanTech Public Float 10,000,000 7.38%
GreenShift Shareholders: Public Float 20,800,000 14.82%
GreenShift Shareholders: Viridis Capital, LLC 83,200,000 59.28%
Employee Reserve 10,000,000 7.38%
Reserve for Pending Issuances - Derivative
Securities 16,000,000 11.14%
-------------------------------------------------- ----------- -------
Fully-Diluted Issued and Outstanding Shares 140,000,000 100.00%
-- Reduction in Potentially Issuable Shares on a Post-Split Basis
If all of GS CleanTech's convertible securities were converted today under current market conditions and "as-is" conversion terms, the actual number of potentially issuable shares above would increase from 16,000,000 to about 28,250,000 and bring the total shares outstanding on a fully diluted basis to 152,250,000. However, it is expected that if or when these securities are converted, that they will be converted under conditions that are better for the company. For example, GS CleanTech has held initial favorable discussions with its senior creditor, YA Global Investments, L.P., relative to amending the conversion parameters of their debt to provide for a fixed price conversion at $1.25 per share (on a post-split basis) and regular cash repayment. The 16,000,000 share reserve stated above reflects the expected dilutive impact of the conversion of all of GS CleanTech's convertible securities after taking these modifications into account.
-- Final Share Structure
Note the ratio of the aggregate holdings of the GS CleanTech minority shareholders to the GreenShift minority shareholders - it is approximately 1:2. This reflects about a 33% improvement to the GS CleanTech minority shareholders as compared to the previously planned 1:3 merger. Note also that all preferred stock has been converted and the estimated impact of any dilutive securities has either been eliminated or contained. While the precise share amounts may vary, importantly, the chart above will be GS CleanTech's final share structure for the foreseeable future.
-- Financing Plans Moving Forward
GreenShift's plan is to finance the growth of the corn oil extraction, biodiesel and oilseed crush businesses through GS AgriFuels and its balance sheet, cash flows and capital structure. The same is true for the operations of GS EnviroServices and GS Energy. In other words, GS CleanTech does not plan to issue stock to finance the growth of its subsidiary operations.
-- GS CleanTech's Current and Future Operations
GS CleanTech will own majority stakes in GS AgriFuels, GS EnviroServices, and GS Energy moving forward. GS CleanTech will focus on developing technologies that enhance resource utilization by targeting and leveraging co-product extraction, beneficiation and refining opportunities, and on developing the partnerships and other resources required to bring its technologies to market. The formation and evolution of GS AgriFuels provides the prototypical example of this model.
GS CleanTech's subsidiaries moving forward are shown here with an estimate of their respective revenues for the nine months ended September 30, 2007: Subsidiary % Owned YTD Revenue Business Model
----------------------------------------------------------------------
GS AgriFuels (OTCBB: GSGF) Biomass
Derived Fuel
Production &
Equipment
60% $11,480,000 Sales
GS EnviroServices (OTCBB: GSEN) Diversified
Environmental
60% $11,240,000 Services
GS Energy (OTCBB: GSEG) Manufacturing
& Emerging
Technology
80% $ 4,570,000 R&D
Because GS CleanTech conducted operations for the nine months ended September 30, 2007 only through GS EnviroServices and GS Ethanol Technologies, Inc., GS CleanTech's wholly-owned corn oil extraction and process engineering subsidiary, GS CleanTech expects that its revenues for the nine months ended September 30, 2007 will be about $11,700,000.
Since GS CleanTech will consolidate the revenue and earnings of its majority held subsidiaries under GAAP, GS CleanTech's revenues for the nine months ended September 30, 2007 would have been about $25,390,000 if GS CleanTech had owned each of GS AgriFuels, GS EnviroServices and GS Energy since January 1, 2007 (after subtracting about $2,670,000 in intercompany revenue).
-- GS AgriFuels' Projected Revenue and Earnings Growth.
Assuming the completion of all of the above, and that we successfully finance and execute on each front, the moving forward revenue and EBITDA profile of GS AgriFuels' current operations can be expected to be as follows based on current agreements and at current market prices for corn oil, biodiesel and vegetable oils: GS AgriFuels Estimated Estimated
Revenue EBITDA
----------------------------------------------------------------------
Corn Oil Derived Biodiesel (50 million
gallons per year) $160,000,000 $50,000,000
Oilseed Crushing (annualized) $ 80,000,000 $12,000,000
Biodiesel Equipment Sales (non-recurring) $ 53,000,000 $13,000,000
Note that specific current financial data and other relevant disclosures for each of GS CleanTech, GS AgriFuels, GS EnviroServices and GS Energy are available in each company's periodic securities filings, which can be found online on the SEC website.
Additional disclosures regarding each of GS CleanTech, GS AgriFuels, GS Energy and GS EnviroServices and the specific impact of GreenShift's restructuring on the shareholders of each company are available on separate shareholder disclosures made by each company today, which additional disclosures are available online at www.greenshift.com.
About GreenShift Corporation
GreenShift Corporation develops and supports clean technologies and companies that facilitate the efficient use of natural resources. GreenShift's ambition is to catalyze the rapid realization of disruptive environmental gains by creating valuable opportunities for a great many people and companies to use resources more efficiently and to be more profitable. Additional information on GreenShift is available online at www.greenshift.com.
GreenShift currently owns 80% of GS CleanTech Corporation (OTC Bulletin Board: GSCT), which company now holds majority stakes in each of GS AgriFuels Corporation (OTC Bulletin Board: GSGF), GS Energy Corporation (OTC Bulletin Board: GSEG) and GS EnviroServices, Inc. (OTC Bulletin Board: GSEN).
Safe Harbor Statement
This press release contains statements that may constitute "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations of GreenShift Corporation, GS CleanTech Corporation, GS AgriFuels Corporation, GS Energy Corporation and GS EnviroServices, Inc., and members of their management as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that could cause actual results to differ materially from those in forward-statements include fluctuation of operating results, the ability to compete successfully and the ability to complete before-mentioned transactions. The company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.
Source: GS CleanTech Corporation