It has been less than a month since the board of directors of Evergreen Energy (NYSE Arca: EEE) approved the execution of a reverse split of its common shares at a ratio of 1-for-12, and just under two weeks since that split went into effect and while shareholders may still be longing for the days when the stock closed at what would be the equivalent of 12.96 investors have seen positive signs that the company is moving further away from the their darkest day when they hit 0.84 on July 9, 2010.
With stock prices tumbling shareholders had little choice but to approve the stock split during their Annual Meeting in mid-July, seeing it as a viable act to keep stock prices within the NYSE Arca listing requirements. Failure to maintain their listing would, according to the clean coal technology company, “trigger the fundamental change provision of the company’s outstanding 2007 Convertible Notes.”
Since that reverse split the EEE has announced a signed agreement with certain holders of its 2007 Convertible Notes that would retire approximately $3.1 million in outstanding debt and accrued interest in exchange for 981,250 shares of common stock on a post-split basis.
While that agreement, announced on Aug. 25, 2010, may please some shareholders it doesn’t exactly give the company a clean financial bill of health. The transaction will simply reduce the $27.4 million of notes due in August 2012 to $24.4 million. Despite the significant balance CEO and director of Evergreen Energy Thomas H. Stoner said the reduction represented “a milestone in our continued effort to come to a resolution with our bondholders on outstanding debt. We are focused on reaching the best terms with which to deleverage the company and to operate on firmer financial footing as a clean technology company.”
Their efforts appear to be paying off for EEE as the company is now trading above its 50-day moving average of 1.55, opening on Tuesday at 1.80, while the trading volume has continued to climb well above their average; a positive sign that investors may be seeing the prospects for Evergreen Energy shifting.
Those prospects appear to rely on the company’s two proprietary, patented, and transformative green technologies: GreenCert™, an environment intelligence solution that measures greenhouse gases (GHG) and other environmental costs enabling customers to manage and report their environmental assets and liabilities; and K-Fuel®, a clean coal technology that can make coal cleaner, more heat-efficient and cheaper.
The value in these two technologies is clear to investors as GreenCert™, according to Evergreen Energy, “is the only scientifically verifiable environmental intelligence solution on the market today that scales across the enterprise to capture the entire carbon life-cycle” while K-Fuel® “is the only commercially validated clean coal process that upgrades low-grade coal to improve efficiency of combustion, decrease contaminants, and reduce emissions.”
No doubt there are shareholders who remain critical of EEE, perhaps bitter over a dramatic fall in stock price but the company appears to be making the moves to win back investors. Part of that effort has been in establishing firmer financial footing, in part by concentrating its efforts on shedding non-core assets and evolving into what Stoner called “a pure clean technology company.” He made that comment in Aug. 24, 2010 release announcing the company’s definitive agreement with Synthetic Fuels LLC for the sale of the assets of its Landrica Development Company which would include the Fort Union plant.
Stoner identified the 2010 second quarter, ending June 30, 2010, as “a period of significant progress for Evergreen” and that progress was based largely on the company’s continued product line development of its GreenCert™ technology for the energy and utility market as well as its advancement of K-Fuel® in China, a market that could generate generous financial gains for the company.
For the shareholders who have stuck by EEE and been through the darkest days a brighter future may be on the horizon if they can continue to develop their products while introducing them into new markets.
EEE has a 200 day moving average of 2.89and a 50 day moving average of 1.55, as can be seen in the chart below:
EEE is a penny stock traded on the NYSE. Penny stocks are generally regarded to be securities which trade below $5 per share.