Analyst: Victor Sula, Ph.D. Report Update October 22th, 2008
Analyst Summary Since our previous report, GSPI’s stock price has declined by 43% from 4.4 cents to 2.5 cents, mainly due to lack of information regarding the Company’s progress and general market conditions. However, in recent press releases, the Company’s management has discussed several new developments that cause us to reaffirm our Speculative Buy rating for GSPI. First of all, in July the Company announced that Saline County, Missouri, had approved $141 million in financing for the construction of a bio-refinery complex and integrated commercial algae production facility. The project was awarded to EcoAlgae USA, which plans to contract with GSPI’s Associated Consortium of Companies to construct the complex. The project is likely to create a significant revenue stream and increased visibility for GSPI. Secondly, the Company announced a new formula to increase the growth rates of certain strains of microalgae with a product called Montana Micronutrient Booster (MMB). Initial tests by researchers at the Midwest Research Institute (MRI) and the University of Baja California in Ensenada Mexico confirm the formula’s ability to enhance algae mass. Dr. Lednicky’s tests also indicated that the increase in biomass included cells that lived longer and were larger in size. With regard to its lubricant additives product, GSPI completed a 1,000 barrel shipment of its TVT 24-7 product to Asia. The order shipped in May 2008 and was received three weeks later. The Company has also advanced the development of its biodiesel technology by unveiling a new reactor with improved design and capabilities. In addition, GSPI is implementing its strategy of integrating its biodiesel plant technology with oilseed crusher plants and farm cooperative support at its biodiesel facility in Odessa, Washington. GSPI’s 2007 revenues were 60% higher at $2.5 million than our $1.5 million estimate. Going forward, we anticipate a 10-fold increase in revenue over the next 12 months as a result of recent agreements and contracts. For these reasons, we are reaffirming our Speculative Buy rating and $0.18 price target for GSPI shares.
Green Star Products Inc. (OTCPK: GSPI)
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