LONG BEACH, Calif., June 12, 2013 (GLOBE NEWSWIRE)
--
To All GCEH Shareholders:
For the past four years, around this time – I like to reflect on
the progress and setbacks we've experienced in a letter to
shareholders. I speak with many of you throughout the year, but
this letter gives me the opportunity, as President and Chief
Executive Officer of Global Clean Energy Holdings, to update all my
fellow shareholders on our business plans and to provide insight
into what we have been working on. The best shareholders for GCEH
are ones that are well informed and excited to be on the leading
edge of the renewable fuels and renewable chemicals industry. It is
a revolutionary space, a market and business that did not exist 10
years ago. It is rare to have the opportunity to be involved in a
new industry; especially one that can significantly improve the
world in which we live. We are mindful that the work we are doing
is new and novel, has many opportunities and risks, and directly
affects many people's lives. We take that responsibility very
seriously and always strive to make the best decisions to grow the
business and create long-term shareholder value. We continually
evaluate new opportunities to expand our business that are
consistent with our core business strategy and principles –
developing responsible and sustainable non-food based renewable
feedstocks.
Given the nature of the crop-based renewables business, and
agriculture in general, there are many outside factors that affect
our farming activities. It is inevitable that we will have both
achievements and challenges every year, so we must continually
learn and seek creative ways to reduce and hedge our risks. This
includes expanding our business opportunities, developing new
crops, diversifying our feedstock sources, as well as expanding
both our geographic reach and our customer base. We recently
completed the purchase of a business that meets all of these
criteria.
The biggest and most exciting news is that we just completed the
acquisition of Sustainable Oils, LLC (SusOils), the industry leader
in Camelina development. The acquisition was very timely
because just weeks before, in February of this year, the U.S. EPA
approved Camelina oil as the only non-food based crop able to
produce Advanced Biofuels, which includes renewable jet fuel, under
the national Renewable Fuel Standard (RFS2). SusOils was
instrumental in this approval and has been one of the largest
suppliers of renewable jet fuel (HFA) to the US Navy. Their
collaboration resulted in the certification of 30 tactical military
aircraft for use with a 50/50 blend of Camelina-based renewable and
conventional jet fuels. SusOils is the only Camelina provider
with patented elite varieties that have field-proven superior
yield. The acquisition fits perfectly into our long-term
strategy of developing a portfolio of annual and perennial non-food
based feedstocks. With over $20 million of revenue over the past
four years, a highly developed plant breeding program and approval
by the USDA for the seed meal or "press-cake" as a high quality
animal feed for chickens, pigs and cows, SusOils is a perfect
fit.
We retained an independent, certified valuation firm to provide
the "Fair Market Value" of the intellectual property we acquired in
the SusOils acquisition. The valuation firm concluded that the
intellectual property had a company value of approximately $18.1
million. We have currently recorded the assets on our books at
$4.4 million. However, after our advisors determine the proper
SEC accounting of the intellectual property, we may adjust the
recorded value on our financial statements to more appropriately
reflect the fair market value. Based on our internal analysis, we
believe that the portfolio of SusOils Intellectual Property (IP),
which includes issued patents, pending patent applications, trade
secrets and extensive field trial and production data, when
integrated into our business plan, is worth considerably more than
the valuation established by the valuation firm. Fully
integrated, this IP is expected to generate more than $60 million
in revenue over the next three years.
On March 29, 2013, we filed our Form 10-K annual report with the
SEC and I am proud to report that we have again recorded net income
for the company. This is the third year in the last four where
we have reported net earnings. We have also completed a number for
key initiatives allowing us to move the business along. These
include:
- The Certification of our Farms by the Roundtable on Sustainable
Biomaterials (RSB) – In 2012, our Mexican Jatropha farms became the
first sites in the northern hemisphere to be certified under RSB's
strict standard for environmental and social sustainability. We
have also initiated the certification process for participating
farms in the U.S. where we are growing Camelina.
- Participation in the Midwest Aviation Sustainable Biofuels
Initiative (MASBI) – We have been participating with key industry
stakeholders including Boeing, Honeywell and United Airlines, along
with 50+ other technology providers, NGO's and academics to develop
a roadmap to grow, process and use renewable jet fuel in the
Midwestern United States.
- The Continued Development of U.S. Environmental Protection
Agency (EPA) Pathway Certification for Jatropha – As reported
earlier, we are still in the approval process for Jatropha oil as a
renewable fuels pathway under the EPA's Renewable Fuel Standard
(RFS2). The EPA has indicated that results could be out for
public comment as early as this summer. As reported above, Camelina
was just approved in February 2013 as the first novel crop to
receive an Advanced Biofuel pathway.
As you know, the biofuels business is a very young industry, so
acquiring a company with a highly developed product provides a
unique long-term opportunity for Global. We continue to
maintain our focus on the production and supply of renewable
feedstocks because it represents more than 80% of biofuels and
biochemicals total production cost – commanding the majority of the
profit, which provides the most long-term opportunity for our
shareholders.
Our first Jatropha farm, which consists of more than 5,000 acres
on the Yucatan Peninsula of Mexico, was planted with more than 20
varieties of Jatropha from around the world. The purpose of
this was to determine which varieties grew the best in this
climatic region, and integrate them into our breeding
program. As expected, some varieties adapted better to the
environment and/or were more productive or disease resistant than
others. Based on the results of the first farm, and our breeding
program, we planted the second farm with the highest performing
varieties. Since then we have focused on streamlining and
right-sizing our Mexican farming operations and concentrated on the
newest acreage, which was planted with the most productive
varieties that provide the greatest opportunity to generate ongoing
and future revenue. In 2012, we raised over $5.6 million in
farm-based investment and we have committed operational funding of
an additional $1.2 million for 2013. Consistent with our
ongoing efforts for greater organizational efficiency, we have
significantly reduced operating costs in Mexico. We continue to
optimize cultivation practices and, with success on specific
selections, plan to back-integrate the elite varieties into the
early generation of trees on our older research farm.
From inception, our strategy has been to develop a portfolio of
novel, non-food based energy crops that can be grown in a multitude
of climatic regions around the world. This multi-feedstock
approach allows us to take advantage of regional demand and
opportunities that best fit our business model. Our recent
expansion into annual crops like Camelina has been planned for
quite some time and we are hopeful that it will allow us to
intercrop a short gestation period oilseed into our existing
acreage, generating oil during the early years of a project and
again during any dormant periods. Our newly acquired Camelina
business also facilitates our expansion into new growing regions
within the U.S., as well as many other developed countries.
We continue to be very bullish on Jatropha and are convinced
that it has enormous promise for long-term economic, environmental
and social sustainability. However, in addition to having many
of the same risks that traditional agriculture has faced for
hundreds of years, we also have unique challenges associated with
developing an entirely new crop, new product and new supply
chain.
I am proud to report that in this past year we have accomplished
many noteworthy things. The most significant accomplishments
include:
- We successfully acquired an industry leader in the development
and production of Camelina for use as a biofuels feedstock;
- We continued the efforts of Sustainable Oils and planting
Camelina in the United States, which included multiple farms in in
California;
- We improved our balance sheet by combining the removal of
legacy liabilities and improving revenues—resulting in net earnings
for 2012, which we have generated in three of the last four years;
- We fully planted our Jatropha research farm in the Dominican
Republic, and have already harvested fruit/seeds;
- We increased our asset base by more than $3.3 million, an
increase of over 21%, meanwhile liabilities increased by less than
19%;
- We raised an additional $5.6 million in project equity and
financing;
- We continued our social efforts by supporting local villages
near our farms in Mexico. We have a deep corporate commitment to
work with the local communities to improve the social conditions
where our employees and their families live; and
- We continue to operate our non-profit research organization,
the Center for Sustainable Energy Farming (www.cfsef.org), which
focuses on expanding research opportunities and enhancing the
commercial viability of energy crops, which now includes
Camelina.
As a small and emerging growth-stage company, we face many
challenges to reaching our goals. During this coming year we
will have to coordinate and assimilate our new North American
Camelina operations with our existing Latin American Jatropha
operations. In addition, we are in the process of raising
additional funding at the corporate, subsidiary and project
level. However, I am proud to report that the entire team of
Global Clean Energy employees is optimistic and dedicated to our
company and our cause. I personally have a high level of
confidence and commitment to Global Clean Energy Holdings; and
during the past year I acquired additional stock options to
increase my equity position in the company.
We are all keenly aware of our focus on driving long-term
shareholder value. I thank you for your continued support and
confidence. Please follow us on Twitter [@GCEHoldings] and at
Global Clean Energy Holdings on Facebook and visit our new website
at www.susoils.com.
Sincerely,
Richard Palmer President and Chief Executive Officer Global
Clean Energy Holdings, Inc.
This shareholder letter contains forward-looking statements
which involve risks and uncertainties, including without
limitation, those discussed in our reports on Form 10-K, 10-Q and
8-K. We undertake no obligation to publicly update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise.
CONTACT: Richard Palmer
310-641-4234 ext. 7107
rpalmer@gceholdings.com
Global Clean Energy (QB) (USOTC:GCEH)
Historical Stock Chart
From Jun 2024 to Jul 2024
Global Clean Energy (QB) (USOTC:GCEH)
Historical Stock Chart
From Jul 2023 to Jul 2024