PRE 14C 1 ger14c61209.txt GREENSHIFT CORPORATION FORM 14C SCHEDULE 14C INFORMATION REQUIRED IN INFORMATION STATEMENT Information Statement Pursuant to Section 14(c) of the Securities Exchange Act of 1934 Check the appropriate box: [x] Preliminary Information Statement [ ] Confidential, for use of the Commission only [ ] Definitive Information Statement GREENSHIFT CORPORATION ---------------------- (Name of Registrant as Specified In Its Charter) Payment of Filing Fee (Check the appropriate box): [x] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11. 1) Title of each class of securities to which transaction applies: .................................................................. 2) Aggregate number of securities to which transaction applies: .................................................................. 3) Price per unit or other underlying value of transaction pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the filing fee is calculated and state how it was determined.) .................................................................. 4) Proposed maximum aggregate value of transaction: ................................................................... 5) Total fee paid: ................................................................... [ ] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 1) Amount Previously Paid: ...................................... 2) Form, Schedule or Registration Statement No.: ...................................... 3) Filing Party: ...................................... 4) Date Filed: ...................................... GREENSHIFT CORPORATION One Penn Plaza, Suite 1612 New York, New York 10119 INFORMATION STATEMENT To the Holders of Our Voting Stock: The purpose of this Information Statement is to notify you that the holders of shares representing a majority of the voting power of GreenShift Corporation have given their written consent to a resolution adopted by the Board of Directors of GreenShift to amend the certificate of incorporation of GreenShift so as to increase the number of shares of authorized common stock from 500,000,000 shares to 10,000,000,000 shares. We anticipate that this Information Statement will be mailed on _________________, 2009 to shareholders of record. On or after _________________, 2009, the amendment to the Certificate of Incorporation will be filed with the Delaware Secretary of State and become effective. The Board of Directors approved the amendment in order to comply with GreenShift's agreements with its senior creditor, YA Global Investments, L.P. ("YA Global"). The convertible debt instruments held by YA Global require that GreenShift maintain a sufficient number of shares of authorized common stock to enable conversion of the convertible debt issued by GreenShift to YA Global. At the present time, GreenShift has no shares available for issuance upon conversion and is therefore in default of those debt instruments. Although GreenShift's ambition is to satisfy its debt to YA Global in cash deriving from one or more potential future financing transactions, it is necessary that this default be cured in the meantime. Delaware corporation law permits holders of a majority of the voting power to take shareholder action by written consent. Accordingly, GreenShift will not hold a meeting of its shareholders to consider or vote upon the proposed amendment to GreenShift's certificate of incorporation. WE ARE NOT ASKING YOU FOR A PROXY. YOU ARE REQUESTED NOT TO SEND US A PROXY. June ___, 2009 KEVIN KREISLER, Chief Executive Officer VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS We determined the shareholders of record for purposes of this shareholder action at the close of business on June 11, 2009 (the "Record Date"). The table below lists the authorized voting stock as of the Record Date, the number of shares of each class that were outstanding on the Record Date, and the voting power of each class. Each share of common stock is entitled to one vote. Each share of Series B Preferred Stock is entitled to 25 votes. The holder of the Series D shares are entitled to a portion of the aggregate voting power equal to 80% multiplied by a fraction, the numerator of which is the number of outstanding Series D shares and the denominator of which is 1,000,000. Security Authorized Outstanding Voting Power -------- ---------- ----------- ------------ Common Stock 500,000,000 500,000,000 249,827,813 Series B Preferred Stock 2,865,333 2,519,219 62,980,475 Series D Preferred Stock 1,000,000 791,459 971,862,696 ---------------- 1,534,843,171 The following table sets forth information regarding the voting stock beneficially owned by any person who, to our knowledge, owned beneficially more than 5% of any class of voting stock as of June 11, 2009. Amount and Nature of Beneficial Ownership
Name and Address(1) Series B Series D Percentage of Of Beneficial Owner Common % of Class Preferred % of Class Preferred % of Class Voting Power --------- ------------ ----------- ------------ ----------- ------------ ------------- Kevin Kreisler(2) 1,486,391 1.56% -- -- 791,459 100% 63.32% David Winsness(3) 976,667 1.03% 360,933 12.45% -- -- 2.77% Greg Barlage(3) 1,088,043 1.14% 356,478 12.30% -- -- 2.77% Ed Carroll(3) 1,670,435 1.76% 393,183 13.56% -- -- 3.19% Richard Krablin (3) 585,217 0.62% 376,183 12.99% -- -- 2.77% ---------- ------- --------- -------- ------- ---- -------- Officers and Directors as a Group (5 persons) 5,806,753 6.10% 1,487,186 51.30% 791,459 100% 74.82% (1) The address of each shareholder is c/o GreenShift Corporation, One Penn Plaza, Suite 1612, New York, NY 10119. (2) All shares listed for Mr. Kreisler are owned of record by Viridis Capital, LLC, of which Mr. Kreisler is the sole member. (3) Shares of Company Series B Preferred Stock are convertible at the fixed rate of 1 Series B Share to 25 Company common shares.
AMENDMENT OF THE CERTIFICATE OF INCORPORATION TO INCREASE THE AUTHORIZED COMMON STOCK On June 11, 2009, GreenShift's Board of Directors approved an amendment to GreenShift's Certificate of Incorporation to increase the authorized common stock from 500 million to 10 billion shares. The Board approved the amendment in order to comply with GreenShift's agreements with its senior creditor, YA Global Investments, L.P. ("YA Global"). The convertible debt instruments held by YA Global require that GreenShift maintain a sufficient number of shares of authorized common stock to enable conversion of the convertible debt issued by GreenShift to YA Global. On June 11, 2009, the holder of a majority of the voting power of the outstanding voting stock gave its written consent to the amendment. The amendment will be filed and become effective approximately twenty days after this Information Statement is mailed to the shareholders. At the June 11, 2009 Record Date, 500,000,000 of the currently authorized 500,000,000 common shares are issued and outstanding, leaving none available for issuance. The effect of the amendment will be to increase the number of authorized shares of common stock, $0.0001 par value, from 500,000,000 to 10,000,000,000. The Board of Directors and the majority shareholder have approved the increase in authorized common stock in order to provide GreenShift with flexibility in pursuing its long-term business objectives. The primary reason for the increase is the requirement contained in GreenShift's agreements with YA 3 Global to maintain a sufficient number of shares of authorized common stock to enable conversion of debt issued by GreenShift to YA Global. Additional reasons for the increase include: >> Management plans in the future to pursue opportunities to obtain the capital in order to fully implement GreenShift's business plan. A reserve of both common and preferred shares available for issuance from time-to-time will enable GreenShift to entertain a broad variety of financing proposals. >> Management may utilize the additional shares in connection with corporate acquisitions, joint venture arrangements, or for other corporate purposes, including the solicitation and compensation of key personnel. >> There are additional outstanding debentures issued by GreenShift that are convertible, at the instance of the debt-holders, into GreenShift common stock. Management has not entered into any commitment to issue any shares except upon conversion of the outstanding debentures. The following table shows the derivative securities currently outstanding that may result in the issuance of more than 1,000,000 common shares:
Issue Original Principal Shares Derivative Security Creditor Date Principal Amount Issuable ------------------- ------------------------ ------------- -------------- ------------ --------------- Secured Convertible Debenture YA Global Investments, L.P. April 2006 $ 4,400,000 $ 2,084,986 308,886,815(1) Secured Convertible Debenture YA Global Investments, L.P. April 2006 $ 1,475,000 $ 303,515 44,965,185(1) Secured Convertible Debenture YA Global Investments, L.P. February 2006 $ 1,949,631 $ 1,949,631 288,834,222(1) Secured Convertible Debenture YA Global Investments, L.P. June 2006 $ 5,500,000 $ 5,500,000 814,814,815(1) Secured Convertible Debenture YA Global Investments, L.P. October 2006 $ 13,000,000 $12,860,000 1,905,185,185(1) Secured Convertible Debenture YA Global Investments, L.P. February 2007 $ 1,125,000 $ 1,224,063 181,342,667(1) Secured Convertible Debenture YA Global Investments, L.P. April 2007 $ 2,190,410 $ 2,789,278 413,226,370(1) Secured Convertible Debenture YA Global Investments, L.P. December 2008 $ 1,950,000 $ 1,950,000 288,888,889(1) Unsecured Debenture Acutus Capital, LLC December 2008 $ 485,000 $ 485,000 71,851,852(2) Related Party Debenture Minority Interest Fund (II), LLC January 2008 $ 1,600,207 $ 1,600,207 237,067,704(3) Options Various - 996,629(4) -------------- 4,556,060,333 -------------- (1) The principal amount and accrued interest on the Secured Convertible Debentures issued to YA Global Investments, L.P. ("YA Global"), are convertible by the holder into common stock at a conversion rate equal to the lesser of $1.25 or 90% of the average closing market price of the Company's common stock for the 20 days prior to conversion. The Secured Convertible Debentures accrue interest at 10% per annum and are due December 31, 2011. At a conversion rate of $0.00675 on June 11, 2009, the Convertible Secured Notes could be converted into 4,246,144,148 common shares. (2) The principal amount and accrued interest on the Unsecured Debenture issued to Acutus Capital, LLC ("Acutus"), are convertible by the holder into common stock at a conversion rate equal to the lesser of $1.25 or 90% of the average closing market price of the Company's common stock for the 20 days prior to conversion. The Unsecured Debenture accrues interest at 20% per annum and is currently due. At a conversion rate of $0.00675 on June 11, 2009, the Unsecured Convertible Debenture could be converted into 71,851,852 common shares. (3) The principal amount and accrued interest on the unsecured Related Party Debenture issued to Minority Interest Fund (II), LLC ("MIF"), are convertible by the holder into common stock at a conversion rate equal to the lesser of $1.25 or 90% of the average closing market price of the Company's common stock for the 20 days prior to conversion. The Related Party Debenture accrues interest at 20% per annum and is due December 31, 2010. At a conversion rate of $0.00675 on June 11, 2009, the Unsecured Convertible Debenture could be converted into 237,067,704 common shares. (4) There are employee stock options that were issued and unexercised for 996,629 shares with a weighted average exercise price of $5.00.
All of the foregoing derivative securities are currently exercisable, and the notes and debentures will remain exercisable until satisfied. In the event that any of the foregoing derivative securities were converted or exercised, GreenShift would not be able to issue the requisite common stock, and would be in default, unless the number of authorized common shares is increased. Conversion of those debentures would improve GreenShift's balance sheet by reducing its debt to equity ratio, and increase its ability to obtain future 4 financing. However, conversion would also dilute the interest of current shareholders in the equity in GreenShift. The additional authorized common stock is necessary to accommodate those conversions, should they occur. The amendment of the Certificate of Incorporation will increase the number of common shares available for issuance by the Board of Directors from 0 to 9,500,000,000. The Board of Directors will be authorized to issue the additional common shares without having to obtain the approval of GreenShift's shareholders. Delaware law requires that the Board use its reasonable business judgment to assure that GreenShift obtains "fair value" when it issues shares. Nevertheless, the issuance of the additional shares would dilute the proportionate interest of current shareholders in GreenShift. The issuance of the additional shares could also result in the dilution of the value of shares now outstanding, if the terms on which the shares were issued were less favorable than the current market value of GreenShift common stock. The amendment of the Certificate of Incorporation is not being done for the purpose of impeding any takeover attempt, and Management is not aware of any person who is acquiring or plans to acquire control of GreenShift. Nevertheless, the power of the Board of Directors to provide for the issuance of shares of common stock without shareholder approval has potential utility as a device to discourage or impede a takeover of GreenShift. In the event that a non-negotiated takeover were attempted, the private placement of stock into "friendly" hands, for example, could make GreenShift unattractive to the party seeking control of GreenShift. This would have a detrimental effect on the interests of any stockholder who wanted to tender his or her shares to the party seeking control or who would favor a change in control. No Dissenters Rights Under Delaware law, shareholders are not entitled to dissenters' rights with respect to the amendment of the Certificate of Incorporation to increase the authorized capital stock. * * * * * 5