Biodiesel: Green Star Products

I admit it. I like things simple. When something isn't readily transparent or understandable, I get twitchy. My antenna starts to quiver.

Green Star Products (stock: GSPI) makes my antenna quiver. And not just because of their rudimentary website design...

The company recently announced that, with it's "consortium of independent companies" will "begin construction of two demonstration algae-to-biodiesel production facilities in the U.S. and abroad... The Consortium has developed a patent pending proprietary algae processing system and it also has assembled a seven-member research team, which has been in operation at the University of Baja California in Ensenada, Mexico."

Now, I've already written that I love the algae to biodiesel process (see Algae Biofuels posting from 3.27.07). It seems to have a lot more potential than feedstock derived biodiesel. I confident that there will be a sound investment opportunities for companies seeking to leverage related technologies.

Green Star Products does not seem to be one of them, however. Here's some of the gems from their last letter to company shareholders:

• "...we are slightly behind on finishing our financials because, as many of you know, the accounting procedures have become immensely more complex over the last two years due to the Sarbanes Oxley Act."
• "GSPI still owes the IRS approximately $200,000 in back-taxes stemming from an item from 1993. Given the related details GSPI does not see this as a particularly detrimental item in our balance statement."
• [Regarding a fire that destroyed their Bakersfield facility that was not covered by insurance]: "The biodiesel industry is a new industry to all the insurance companies. They have no history and they cannot calculate their exposure. We were diligently pursuing insurance on the Bakersfield plant for a long time. Four days after the fire, we received a proposal, which could have insured the plant for only $300,000!"

The president of the company, Joseph P. LaStella, is listed as the principal point of contact on all press releases. Makes me think this is a pretty small operation.

Admittedly, I haven't talked to anyone from Green Star. It's hard to when your antenna is quivering so much...