Green Star Products Inc.

Analyst: Victor Sula, Ph.D. Report Update October 22th, 2008

21/10/08

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Green Star Products Inc. 858 Third Avenue 455 Chula Vista, CA 91911-1305 USA

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MARKET DATA

Symbol GSPI Exchanges OTC PK Current Price $0.025 Price Target $0.18 Rating Speculative Buy Outstanding Shares 386.51 Million Market Cap. $9.66 Million Average 50-day Volume 522,165 Source: Yahoo Finance, Analyst Estimates

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Millions

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Telephone: (619) 864-4010 Fax: (619) 789-4743 E-mail: info@GreenStarUSA.com Web: http://www.greenstarusa.com

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Company Introduction Green Star Products Inc. (GSPI) is an environmentally friendly company involved in the production of renewable clean-burning biodiesel and other products, including lubricants, additives and devices that reduce emissions and improve fuel economy in vehicles, machinery and power plants.

The Company was one of the early pioneers to begin researching alternative energy resources in the 1990s. Following an extensive Research & Development program, GSPI has advanced a number of proprietary technologies which are now in the revenue-producing stage. The Company is 100% vertically integrated designing and manufacturing its own biofuel processing equipment in-house.

In 2007, GSPI announced the development of an innovative processing system for converting algae-to-biodiesel, offering a potential solution to Global Warming and rising oil and gas prices. In November of last year, the Company announced an agreement to build the first algae-to-biodiesel facility in the Midwest. The advantages of algae as a feedstock include its ability to consume harmful CO2 gases while producing up to 100 times more oil per cultivated area than traditional oilseed crops.

The Company focuses on project-level joint venture relationships where it supplies the engineering, manufacturing, construction and operations technology and expertise. Through these intellectual property licensing agreements, GSPI shares in the ownership and profit distribution from each project. The joint venture partners supply project funding and, in some cases, local infrastructure and support. This joint-venture strategy allows GSPI to expand its

Green Star Products Inc. (OTCPK: GSPI)

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Analyst: Victor Sula, Ph.D. Report Update October 22th, 2008

business rapidly without requiring large in-house capital expenditures or the need to raise funding from stock offerings.

Business Update Rather than selling its plants or reactors, the Company forms joint ventures with customers that become operating partners for a facility. GSPI has already had more than 50 offers for joint ventures to place biodiesel plants and algae farms at various locations worldwide. The Company has been very selective in choosing its joint venture partners and maintains business and research relationships on five continents.

After fabrication and construction of a facility, GSPI retains an on-going revenue stream from its joint-venture participation. In 2007, GSPI generated revenues of $2,485,000 and earnings of $455,000.

Revenue 3,000,000

2,484,868

2,500,000 2,000,000 1,500,000 519,557

1,000,000 500,000

45,000

2005

2006

2007

Source: Company’s press releases

The Company generates revenues from fabricating and installing the bio-refinery complex, engineering services, participating interests in joint ventures and exclusive licensing arrangements. Revenue is also generated from manufacturing and sales of biofuels, high-tech lubricants and other green products, and fees from royalties and engineering services.

Products and Services Bio-refinery construction GSPI, in conjunction with its consortium partners, designs and constructs bio-refineries that produce ethanol from low cost agricultural waste products (i.e. wood chips, switch-grass, rice stalks, municipal waste, etc.). The Company has proprietary process patents for the production of biodiesel and integrates its proprietary continuous flow waterless biodiesel process with low cost feedstock provided by local farmers.

GSPI’s current plans include commercial scale biofuel production through a joint venture with United Biorefineries Corp. The Company also has commitments to build several plants. GSPI and its consortium partners are in the process of applying for government grants and loan guarantee programs covering alternative energy Green Star Products Inc. (OTCPK: GSPI)

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Analyst: Victor Sula, Ph.D. Report Update October 22th, 2008

programs. GSPI’s consortium programs include cellulosic ethanol, algae-to-biofuel, advanced biodiesel processes engineering, and other waste-to-energy and greenhouse gas reduction technologies.

The selection criteria for government funding of clean energy projects includes the technology’s ability to reduce green house gas emissions and other air pollutants; the speed at which the technology can be commercialized; potential cost saving for consumers; and prospect for loan repayment and the potential for long-term commercial success.

Biodiesel technology In 2006, after announcing that the Company was developing its own biodiesel plants, GSPI unveiled its proprietary continuous flow biodiesel reactor. These reactors can be used to produce large quantities of biodiesel at smaller plants and produce more efficiently and economically than traditional batch processes. Biodiesel conversion is reduced to just a few minutes with high quality fuel results.

In the year following the unveiling of its novel reactor, GSPI introduced improved design concepts for the reactor, including new proprietary flow control mechanisms and other back and front-end biodiesel plant improvements.

GSPI is currently working on integrating its high-tech biodiesel plant technology with an oilseed crusher plant, supported by farm cooperative partnerships, for a biodiesel facility in Odessa, Washington.

Algae technology The Company announced a new formula to increase the growth rates of certain strains of microalgae with a product called Montana Micronutrient Booster (MMB). GSPI has been making this MMB formula available to researchers on five continents. Samples are being supplied to research facilities which agree to share their growth research data. This data will be made available on GSPI’s Web site.

The Company has also introduced its Agri-2000 and Agri-3000 growth boosters for terrestrial plants.

Initial results from tests of the growth formula have been supplied by Dr. John Lednicky, principal scientist at the Midwest Research Institute (MRI). Dr. Lednicky’s results from tests of the MMB growth formula were consistent with results achieved in tests performed at the University of Baja California in Ensenada, Mexico, indicating that the sample grew more algae mass. Dr. Lednicky tested the MMB natural growth formula on two algae strains, one freshwater and one saltwater, and found that both test strains grew 200% faster in algae biomass compared to their respective controls. Dr. Lednicky’s tests also indicated that the increase in biomass included cells that lived longer and were larger in size.

In January and May 2008, the Company released news regarding its wet algae stripping technology (important for both cellulosic ethanol and biodiesel production) and a report on its HAPS algae production system. The ninemonth long HAPS algae production system trial demonstrated the feasibility of the HAPS system for commercial farming microalgae.

At present, GSPI is focused on improving and expanding its algae research facilities. Lab operations have been Green Star Products Inc. (OTCPK: GSPI)

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Analyst: Victor Sula, Ph.D. Report Update October 22th, 2008

slowing down to prepare for the transfer installation of equipment, personnel and algae cultures to the Company’s new facility in Utah.

Lubricant additive In 2005, GSPI formed a joint venture with NRG Resources Inc. for TVT 24-7 Lubricant Products. NRG has the exclusive worldwide distribution rights for the TVT line of products. GSPI receives 25% of net profits on sales and owns 1,375,000 shares of NRG stock (approximately 2% of NRG stock).

GSPI recently filled a large order for the TVT 24-7 product line involving 15 40-foot ocean shipping container loads (equivalent to more than 1,000 barrels) for customers in Asia. The order shipped in May 2008 and arrived in Asia three weeks later.

Partnerships The Company forms joint ventures with customers who become GSPI’s operating partners in each facility. These arrangements ensure the security of the Company’s advance technology, trade secrets and other intellectual property.

Bio-refinery partnerships GSPI’s joint venture bio-refinery facilities can produce biodiesel, biomass ethanol and other valuable products from non-food waste feedstocks and are likely to be the first of their kind in North America. The Company’s biorefinery complexes fully integrate a biodiesel processing plant, biomass ethanol processing plant and a biogas production facility to optimize engineering and realize cost reductions through planned synergic processing.

Algae farm partnerships In 2007, GSPI built and began operating one of the largest algae demonstration facilities in the world – a 40,000liter algae facility that ran for nine months and provided all the information and data necessary to plan for commercial production. GSPI is in the planning and engineering phase of constructing a 500-acre commercial-scale facility.

GSPI is also involved in joint ventures for the commercial production of algae on five continents. Algae-tobiodiesel technology could reduce worldwide oil consumption and significantly alleviate global warming if the technology is deployed on a large scale.

GSPI participates in $141 million alternative energy project In July 2008, GSPI announced that the county of Saline, Missouri, had approved $141 million of financing for the construction of an algae-to-biodiesel facility in conjunction with an integrated bio-refinery complex. EcoAlgae USA has contracted with GSPI’s Associated Consortium of Companies to construct the complex. The project will be organized and constructed in conjunction with United Biorefineries Corp. (UBC), a technology management company, as the main consortium company with other integrated licenses. The bio-refinery will be the first of its Green Star Products Inc. (OTCPK: GSPI)

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Analyst: Victor Sula, Ph.D. Report Update October 22th, 2008

kind, incorporating technologies to produce oil, cattle feed, electricity, biodiesel, cellulosic ethanol and steam.

The four GSPI technologies to be deployed in this facility include: 1. Algae Production, Processing and Refining by GSPI 2. Cellulosic Ethanol Production by Pure Energy Corporation 3. Biogas Production by MKW Biogas 4. Algae Research & Engineering by Biotech Research (BTR) and GSPI United Biorefineries Corp. represents the consortium through licensing arrangements and is the technology provider. It will also be responsible for constructing the bio-refinery complex for EcoAlgae USA, with GSPI as one of the primary facilitators.

Other recent developments GSPI has completed a state-of-the-art biodiesel facility in Washington State that includes its own crushing facility.

Two farm coops are its partners and will provide canola seeds to the facility as a feedstock. This facility represents the successful implementation of a strategy GSPI formulated more than six years ago to protect its operations from unstable commodity prices.

Financial Analysis The Company’s unaudited financial statements show modest revenues in 2005 and 2006 from the sale of TVT products, biofuel reactors and controllers, consulting income, royalties and sales of distribution licenses for TVT products.

During 2007, the Company focused on developing joint ventures to build, own and operate biodiesel processing plants and on further research and development on an economic process for algae-to-biodiesel conversion.

GSPI generated 2007 revenues of $2,485,000, a 60% increase over earlier estimates, and earnings of $455,000, the Company’s first ever net profit. As of year-end 2007, GSPI also had a tax loss carry forward of approximately $11 million, which, depending on the timing of expiration dates and use, represents an unbooked benefit of $3,520,000 against future taxable earnings.

Income Statement $

2006

Revenue Cost of revenue Gross profit Operating expenses Operating profit Net profit

2007

%Chg

519,577 292,099 227,478

2,484,868 1,084,721 1,400,147

378% 271% 516%

2,178,574

898,865

-59%

-1,951,096 -1,951,096

501,282 455282

n/m n/m

Source: http://www.greenstarusa.com/investors/comparison.html

Green Star Products Inc. (OTCPK: GSPI)

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Analyst: Victor Sula, Ph.D. Report Update October 22th, 2008

Management GSPI has expanded its management team by adding the following executives.

Thomas Gruenwald Chief Financial Officer

Mr. Gruenwald has a broad financial background and has more than 25 years experience in banking and financing. He formerly served as CFO of two major financial institutions and as manager for the Asset Management Division of the Resolution Trust Corporation. In addition, he served as CFO of a real estate development company with multiple financial projects worth more than $100 million.

Mr. Gruenwald’s duties include financial models for GSPI domestic and international projects, contract negotiations and several DOE and USDA grants project proposals.

Brooks Agnew Vice President, Field Engineering

Mr. Agnew has a Bachelor of Science in chemistry, a Master of Science in quality control, and has accumulated more than 25 years of leadership experience in a broad range of engineering disciplines. Mr. Agnew’s experience includes senior management and consulting positions at General Motors, Nissan and Kaiser Corporations.

Mr. Agnew has been working as a consultant for GSPI since September 2007 and oversaw the completion of the Odessa Washington biodiesel facility and infrastructure, including the renovation of existing industrial building.

Michael X. Hu Vice President, International Engineering Programs

Mr. Hu is a mechanical engineer with a Bachelor of Science from Tong Ji University, Shanghai China and a Master of Science from California State University, Long Beach. Mr. Hu has accumulated more than 30 years of experience in a broad range of engineering and marketing disciplines.

He has worked as a consultant for GSPI for several years. In addition to his position as a vice-president, he is also the Secretary & Treasurer of GSPI and a GSPI board member. Mr. Hu is also involved in energy and algae programs in China and other Asian countries for GSPI.

Green Star Products Inc. (OTCPK: GSPI)

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Analyst: Victor Sula, Ph.D. Report Update October 22th, 2008

Analyst Summary Since our previous report, GSPI’s stock price has declined by 43% from 4.4 cents to 2.5 cents, mainly due to lack of information regarding the Company’s progress and general market conditions. However, in recent press releases, the Company’s management has discussed several new developments that cause us to reaffirm our Speculative Buy rating for GSPI. First of all, in July the Company announced that Saline County, Missouri, had approved $141 million in financing for the construction of a bio-refinery complex and integrated commercial algae production facility. The project was awarded to EcoAlgae USA, which plans to contract with GSPI’s Associated Consortium of Companies to construct the complex. The project is likely to create a significant revenue stream and increased visibility for GSPI. Secondly, the Company announced a new formula to increase the growth rates of certain strains of microalgae with a product called Montana Micronutrient Booster (MMB). Initial tests by researchers at the Midwest Research Institute (MRI) and the University of Baja California in Ensenada Mexico confirm the formula’s ability to enhance algae mass. Dr. Lednicky’s tests also indicated that the increase in biomass included cells that lived longer and were larger in size.

With regard to its lubricant additives product, GSPI completed a 1,000 barrel shipment of its TVT 24-7 product to Asia. The order shipped in May 2008 and was received three weeks later.

The Company has also advanced the development of its biodiesel technology by unveiling a new reactor with improved design and capabilities. In addition, GSPI is implementing its strategy of integrating its biodiesel plant technology with oilseed crusher plants and farm cooperative support at its biodiesel facility in Odessa, Washington.

GSPI’s 2007 revenues were 60% higher at $2.5 million than our $1.5 million estimate. Going forward, we anticipate a 10-fold increase in revenue over the next 12 months as a result of recent agreements and contracts. For these reasons, we are reaffirming our Speculative Buy rating and $0.18 price target for GSPI shares.

Green Star Products Inc. (OTCPK: GSPI)

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Analyst: Victor Sula, Ph.D. Report Update October 22th, 2008

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We encourage you to invest carefully and read investment information available at the websites of the SEC at http://www.sec.gov and FINRA at http://www.finra.org.

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I, Victor Sula, Ph.D, the author of this report, certify that the material and views presented herein represent my personal opinion regarding the content and securities included in this report. In no way has my opinion been influenced by outside parties, nor has my compensation been either directly or indirectly tied to the performance of any security listed. I certify that I do not currently own, nor will own and shares or securities in any of the companies featured in this report.

Victor Sula, Ph.D. - Senior Analyst Victor Sula, Ph.D. has held the position of Senior Analyst with several independent investment research firms since 2004. Prior to 2004, Mr. Sula held Senior Financial Consultant positions within the World Bank sponsored Agency for Restructuring and Enterprise Assistance and TACIS sponsored Center for Productivity and Competitiveness of Moldova, where he was involved in corporate reorganization and liquidation. He is also employed as Associate Professor at the Academy of Economic Studies of Moldova. Mr. Sula earned his Ph.D. degree in 2001 and bachelor’s degree in Finance in 1997 from the Academy of Economic Studies of Moldova. Mr. Sula is currently a level III candidate in the CFA program.

Green Star Products Inc. (OTCPK: GSPI)

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