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GreenShift Acquires Stake in Electronic Scrap Recycling Corporation; Company is Developing Proprietary New Ferrofluid Recycling Process

Posted on: Tuesday, 29 November 2005, 09:00 CST

GreenShift Corporation (OTC Bulletin Board: GSHF) today announced its acquisition of an 80% stake in Electronic Scrap Recycling Corporation ("ESRC"), an Indiana-based full service recycler of electronic components.

Under the terms of its agreement with ESRC, GreenShift acquired 80% of ESRC's outstanding stock and received certain commercial rights in return for 1.6 million shares of GreenShift common stock and GreenShift's provision of technology rights, strategic business development and other services.

E-Waste Recycling

Obsolete electronic equipment is a rapidly expanding problem in today's economy. As technology continues to make significant leaps, the life cycle of electronic products shortens dramatically. The National Safety Council estimates that over 500 million obsolete computers will be discarded in the United States alone. Additional electronic devices such as cell phones, office machines and a host of other products present problems not only to the environment, but to the businesses, individuals and organizations that must deal with their disposal. In addition to the bulk materials such as plastic and steel, electronics also contains significant amounts of toxic materials including lead, mercury, arsenic, chromium and more.

ESRC currently provides full service electronic waste ("e-waste") recycling, logistics and Certified Data Destruction services to public and private sector clients out of its 125,000 square foot facility in Elkhart, Indiana.

Ferrofluid Separation

ESRC is developing a proprietary new ferrofluid process that is capable of preferentially separating targeted compounds from a mixed solid waste stream. Ferrofluids are liquids that are comprised of nanoscale magnetic particles suspended in a carrier fluid and exhibit novel properties when exposed to specific magnetic fields. Conductivity, viscosity and volatility can all be manipulated through the selection and sizing of the particles and the application of specific magnetic fields.

Importantly, ESRC's ferrofluid process can enable the preferential separation of targeted compounds out of a mixed micron sized powder. This can be important because GreenShift's Tornado Generator(TM) technology cost-effectively grinds, desiccates, and atomizes solid and liquid wastes and other materials into micron sized powders.

ESRC plans to use its ferrofluid process, the Tornado Generator(TM) technology, GreenShift's existing plastics and metal separation and other technologies, and some conventional process technologies to dramatically decrease capital costs and improve operating efficiencies for processing e-wastes.

Brett Oliphant, ESRC's chief executive officer, said that "Our view is that the e-waste recycling industry is becoming a commodity-driven business. Tipping fees will eventually give way to commodity sales as the value of the plastics and metals in e-waste begins to govern the economics of the industry. We believe that, when this time comes, the relative operating efficiencies of e-waste processors will define who survives and who does not. Our strategic plan therefore is to invest in technologies that drive operating costs down while we acquire small- to medium-sized e-waste brokers and processors to consolidate volume. We believe that GreenShift will help us on both fronts and we are very excited to have their support."

"E-waste recycling is a compelling challenge that we intend to address with our investment in ESRC," added Kevin Kreisler, GreenShift's chairman and chief executive officer. "ESRC's existing volumes of e-waste and positive cash flows are strategic to our existing technologies, their technology has some fascinating potential, their approach to the market is dead on, and their business presents us with a platform to acquire significant market share. We are excited by this investment and we intend to provide ESRC with the resources it needs as it scales its business."

Technology and Manufacturing Rights

Under GreenShift's agreement with ESRC, ESRC will assign its technologies and intellectual property rights to GreenShift Industrial Design Corporation ("GIDC"), a wholly owned GreenShift company, who will in turn provide ESRC with non-exclusive license rights to all current and future GIDC technologies, including its Tornado Generator(TM) and plastic waste separation technologies.

GreenShift's agreements with ESRC also provide for right of first refusal manufacturing rights to ESRC's planned new e-waste recycling equipment and products for INSEQ Corporation (OTC Bulletin Board: INSQ), another GreenShift portfolio company.

About GreenShift Corporation

GreenShift Corporation is a publicly traded business development company (BDC) whose mission is to develop and support companies and technologies that facilitate the efficient use of natural resources and catalyze transformational environmental gains.

BDCs are regulated by the Investment Company Act of 1940 and are essentially publicly-traded equity funds where shareholders and financial institutions provide capital in a regulated environment for investment in a pool of long-term, small and middle-market companies through the use of senior debt, mezzanine financing, and equity funding.

GreenShift plans to use equity and debt capital to support and drive the value of its existing portfolio of companies and to make investments in a diversified mix of strategically compatible growth stage public and private businesses and technologies. GreenShift's current portfolio includes investments in the following environmentally proactive companies:

-- Veridium Corporation (OTC Bulletin Board: VRDM);

-- INSEQ Corporation (OTC Bulletin Board: INSQ);

-- GreenWorks Corporation;

-- GreenShift Industrial Design Corporation;

-- Ovation Products Corporation;

-- Tornado Trash Corporation;

-- Mean Green BioFuels Corporation;

-- Ethanol Oil Recovery Systems, LLC;

-- Sterling Planet, Inc.;

-- TerraPass, Inc.;

-- Aerogel Composite, Inc.;

-- Air Cycle Corporation;

-- Electronic Scrap Recycling Corporation;

-- Coriolis Energy Corporation;

-- Hugo International Telecom, Inc.; and,

-- TDS (Telemedicine), Inc.

Additional information regarding GreenShift Corporation is available online at www.greenshift.com.

Safe Harbor Statement

This press release contains statements, which 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, 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: Business Wire

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