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Monday, 12/04/2006 12:30:20 PM

Monday, December 04, 2006 12:30:20 PM

Post# of 63795
WSR report highlights:

Remember: Big deals take time for long contracts to get all the T's crossed.


Maybe these highlights will encourage some to read the full report at

http://www.wallstreetresources.net/pdf/fc/USSE.pdf


Investment Highlights:
• U.S. Sustainable Energy is an alternative energy company that holds patent pending technology for a new breakthrough biofuel and carbon based fertilizer that could revolutionize the energy industry. With this broad patent protection, the Company owns the molecular structure of its unique biofuel.
• U.S. Sustainable Energy’s revenues generated from the anticipated sales of its organic fertilizer product pay for the entire operations of the facility. As a result, the revenues generated from its energy and power sales virtually drop to the bottom line.
• Management believes that its revolutionary process is significantly beneficial to both its shareholders as well as its fellow citizens, as evidenced by $5.5 million in daily baseline power sales in addition to offering solutions to three major challenges facing the United States and the World today.
• The biofuel production process is modular meaning it can begin producing fuel and generating revenue with just four of a projected two-hundred reactors per facility. Cash flows from initial energy production could fund additional reactors and capacity.
• Assuming only one fully operational facility with 200 reactors is completed be the end of 2009, it is our opinion that U.S. Sustainable Energy’s common shares hold an average current discounted value of $5.55.
=============================================== page 5 one bushel soybeans yields 5 gal USSE biofuel ===============
WSR p 5

One bushel of soy oil can yield 1.5 gallons of biodiesel whereas one bushel of soybeans yields 5.0 gallons of the Company’s biofuel. Put another way, it requires approximately 666,000 bushels to produce 1 million gallons of biodiesel fuel, but only 200,000 bushels to produce the same amount of the biofuel. Assuming an arbitrary figure of $2.50 per gallon, which is the cost to produce 1 gallon of biodiesel, the revenue generated from 1 million bushels would be $665,001 for the biodiesel, as compared to $2.5 million for biofuel, using the same amount of soy or biofuel.



========================== page 6 $5.5 million in daily baseline power sales with one facility of 200 reactors =======================

Management believes that its revolutionary process is significantly beneficial to both its shareholders as well as its fellow citizens, as evidenced by $5.5 million in daily baseline power sales (assuming only 1 facility with 200 reactors) in addition to providing solutions to three of the major challenges facing the United States and the World today:

============================== page 7 Decreasing America's dependence on foreign oil ========================


Please refer to important disclosures at the end of this report.

Reducing America’s dependence on foreign oil: In the near-term, U.S. Sustainable Energy intends to use every gallon of its liquid biofuel to produce green energy as opposed to retailing the fuel. This decision is purely economic, as the Company can generate two to three times more revenue by producing green power with all the incentives (Green Tags, Nox Credits) than retailing its liquid fuel. In the future, U.S. Sustainable Energy biofuel has strong potential for use as a valuable motor fuel and the Company will continue testing and will work with appropriate engine manufactures to develop engines capable of running 100% blends of its liquid biofuel. The U.S. Sustainable Energy motor fuel development, industry acceptance testing and approval will take three to four years to implement. The path to the motor fuel market will be large volume fuel users such as fleet truck operators and governmental agencies. One such strategic partner for testing and implementation of the U.S. Sustainable Energy motor fuels will be the United State Air Force. This development could lead to decreasing America’s dependence on foreign oil.

========================== page 11 low production cost ===============

Its revolutionary biofuel is totally unique in all its characteristics. It is a replacement for diesel fuel, biodiesel fuel, gasoline, and ethanol. Further, U.S. Sustainable Energy is able produce 5 gallons of biofuel per bushel at a cost of $0.50 per gallon. By way of comparison, West Central, a pioneer in the processing of soybeans into premium biodiesel fuel, produces only 1.5 gallons per bushel at a cost of $2.50 per gallon of biodiesel.


=============================page 15 5 yr plan ==================

During the next five years, the Company intends to become the recognized leader in the development and marketing of organic fertilizer, liquid and gaseous biofuel products as well as green power generation. To achieve, the Company will focus on the following “macro” objectives:
• Economically produce biofuel without relying on federal or state subsidies.
• Produce green electrical power that could be sold at a discount over market power prices.
• Compete with traditional fuels, power and fertilizer without requiring premium pricing usually associated with "green" products.
• Boost domestic agricultural production by providing a new market for agricultural products. Governmental programs to pay farmers not to farm will become obsolete.
• Reduce greenhouse gas emissions to the environment.
• Reduce America’s dependence on foreign petroleum crude oil.


========================= Page 19 wsr =====three one gigawatt plants within three years ======================



Future Facilities
U.S. Sustainable Energy’s goal is to have three “one gigawatt” plants constructed and fully operational within the next three years.

Additional plants are only limited by capital, availability of feed stock, the need for power and proximity to transmission and distribution systems. Thus, U.S. Sustainable Energy plants can be located throughout the U.S. and abroad.

Traditionally Europe has led the way in biofuel production and utilization of green power.

A Memorandum of Understanding has been signed with Cofitral S.p.A to jointly build a one gigawatt power plant in Italy. In the United States alone, there are at least 18 RFBs, request for bids for green power as a result of the 2008 green energy requirements.


In the future, U.S. Sustainable Energy believes that South and Central American countries are also good candidates for the Company’s plants. U.S. Sustainable has hired I.C. Thomassen to do the engineering on the facilities under development.

==========================Page 20 134 Patents pending ======================

Intellectual Property Estate
U.S. Sustainable Energy Corp. holds patent pending technology for a new breakthrough biofuel and carbon based fertilizer. With this broad patent protection, the Company owns the molecular structure of its totally unique biofuel. U.S. Sustainable Energy has retained Finnegan, Henderson, Farabow, Garrett & Dunner, L.L.P., one of the top intellectual property law firms in the country, to represent its interests. At present, the company has 134 patents pending on the molecular structure of this proprietary fuel.

===========================page 22 gov purchase of green power ==

For example, the United States Air Force is currently buying 1.1 gigawatts of electricity per hour of green power and is paying $0.015 cents above retail prices. Because U.S. Sustainable Energy produces “green power” energy that is recycled, the Company jumps to the head of the list, which means that every ounce of energy by the Company will be purchased by the government, including government agencies such as

============================= Page 29 WSR daily production per reactor ===================

Products per day per reactor: Our model assumes that 6,207 gallons of bio fuel, 87,424 cubic feet of biogas, and 31,190 pounds of ash are produced per day, per reactor.

=============================page 30 wsr other assumptions soy bean cost $9/bushel ========================

the wsr report was conservative target of $5.5 using high cost of $9/bushel and hi employee cost and low Forward P/E

Cost of raw materials: The model assumes corn costs $2.00 per bushel and soy bean costs $9.00 per bushel—50% mixture results in a cost of $5.50 per bushel.
Employee salaries: The model assumes an average hourly rate of $50, with 500 employees at year-end 2010.
Reactors: The model assumes that the cost of a four “tube” module is $5.0 million with a useful economic life of 10 years.
Generators: The model assumes that each generator costs $21 million, including installment cost, with a useful life of 20 years.
Debt: The model assumes that all reactors and generators will be funded by debt at 6.0% cost of interest.
Tax Credit per employee: The model assumes $1,200 per employee
Tax Rate: The model assumes a corporate tax rate of 33%.
Share count: The model assumes a beginning share count of 664 million fully diluted shares as of the end of third quarter 2006, growing by 25 million shares every quarter ending 2010 at 1.03 billion shares.

================================== page 31 Comparison ================

Pacific Ethanol Inc. (ticker PEIX) is a publicly traded marketer and producer of renewable fuels. Pacific Ethanol’s product line currently emphasizes clean-burning corn-based ethanol. Pacific Ethanol has a market capitalization of $566 million, and reported approximately $147 million in revenues. PEIX currently trades at 40x earnings, 3.85x sales, and 2.19x book.

======================================= page 32 and page 33 Risks =========stuff happens and can happen ========================



Please refer to important disclosures at the end of this report.
Competition Risk
Execution Risk
Financial Risk
Key Management Risk
Micro-capital Investment Risk
Non-Specific Market Risks (Liquidity, trading rules & BD restrictions)
Risk Categories
Competition Risk
The energy industry is highly competitive. With respect to clean energy generation and distribution, there are other companies that market and produce renewable energy. A key component of U.S. Sustainable Energy’s competitive positions lies in its ability to manufacture high quality renewable energy more efficiently than others in the industry. However, as renewable energy becomes a larger industry and new technologies develop, it is likely that the Company will face significant competition from other renewable energy producers.
Execution Risk
As with any growing company implementing an accelerated growth plan, U.S. Sustainable Energy’s ultimate success or failure will depend on management’s ability to execute their business plan in an efficient and timely manner. Management’s experience and solid reputation in the renewable energy industry helps mitigate this risk.
Financial Risk
U.S. Sustainable Energy is dependent on financing from outside investors to fund equipment acquisitions, including costly reactors and generators. Capital may be raised through sales of equity and/or debt securities; however, there is no firm commitment to invest in U.S. Sustainable Energy at this time. There can be no assurances that the Company will be successful in obtaining debt or equity financing in order to achieve its financial objectives and continue as a going concern.
Key Management Risk
Management skill’s and experience is a key determinant of success. U.S. Sustainable Energy, like most small companies, is heavily dependent on key management, the loss of any of which could seriously, adversely affect the Company.
Micro-capital Investment Risk
Micro-capital investing involves inherent risk and investors should carefully research any company considered for investment. Micro-capital companies are usually early in their market cycle and vulnerable to significant price volatility.

Please refer to important disclosures at the end of this report.

Non-Specific Market Risks (Liquidity, trading rules & BD restrictions)
U.S. Sustainable Energy’s common stock is quoted on the Pink Sheets, as such, there is only a limited trading market for its common stock. As a result, the Company’s common stock is subject to the penny stock rules by the Securities and Exchange Commission that requires brokers to provide extensive disclosure to its customers prior to executing trades in penny stocks, and as such there may be a reduction in the trading activity of its common stock. As a result, investors may find it difficult to sell their Shares of the Company’s common stock.
Intellectual Property Risk
There is no guarantee that U.S. Sustainable Energy’s patents or pending applications will afford legal protection against competitors or provide significant proprietary protection or competitive advantage. In addition, the Company’s patents or pending applications could be held invalid or unenforceable by a court, or infringed or circumvented by others, or others could obtain patents that the Company would need to license or circumvent. Further, when the Company’s patents expire, other companies could develop new competitive products to U.S. Sustainable Energy’s products.
Risk Categories
WSR’s investment universe revolves around undiscovered emerging growth companies that possess higher risk profiles than established “blue chip” companies. Presently WSR maintains two risk categories including aggressive growth and speculative with the later assigned to higher risk companies.


================================ Page 34--> brief bio of management members

Officers, Directors and Key Management
Name Age Position
John Rivera 57 Chairman, Chief Executive Officer, Director
Alex Machado 32 President of Operations/COO, Director
Gerald Brent 59 VP Operations/General Manager, Director
Kelmer Smith 45 VP Engineering/Construction, Director
Dale Shepherd 53 VP Finance/CFO, Director



Please refer to important disclosures at the end of this report.
John Rivera, Chairman & CEO
Mr. Rivera has 30 years of business and technological experience. His background includes both domestic and international business development of innovative process technologies. He has worked in process technology, including the research and development of chemical reactions and catalysts. Mr. Rivera developed a clean-oil process which took pit oils and converted them to uncontaminated fuel. He developed co-generation facilities in the Dominican Republic, Puerto Rico and Nicaragua. In Kuwait, he led the developmental process technology to extract clean oil from contaminated sand. Mr. Rivera has also designed and developed numerous computer-based systems, including a multi-media system for Amp Precision Cable.


=============================== original source for these exerpts ====================

http://www.wallstreetresources.net/pdf/fc/USSE.pdf

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