EcoSystem Corp. (OTCBB: ESYM)
EcoSystem Corp. (ESYM) focuses on providing bioreactor technology for various industrial-scale applications. ESYM is developing technologies designed to increase the yield and reduce the energy and carbon intensity of traditional corn ethanol facilities. The Company intends to acquire and upgrade existing ethanol plants with its technologies, with a goal of becoming a leading low cost and low carbon producer of renewable fuels.
The Company’s biological, chemical and physical technologies are designed to resolve ecological problems, as well as produce value-added carbon-neutral products. It has a license agreement with GreenShift Corp. to provide commercialization support services and access to GreenShift’s portfolio of clean technologies for applications not involving the production of renewable fuels. The Company was formerly known as GS Energy Corp. and changed its name to EcoSystem Corp. in February 2008.
ESYM is based in New York, New York, operating as a subsidiary of Viridis Capital LLC.
Financial Summary
The Company is currently evaluating a number of qualified opportunities that produce the raw materials needed for its technologies, or that have the infrastructure it needs to scale its technologies. As a result, there were no revenues from continuing operations for the three months ended March 31, 2009, or for the three months ended March 31, 2008.
The Company’s primary sources of liquidity are cash provided by investing and financing activities. For the three months ended March 31, 2009, net cash used by operating activities was $18,088. The Company had $267,579 in liabilities at the end of the three months ended March 31, 2009, and will need to obtain additional financing to satisfy these obligations.
The Company’s stock skyrocketed on the announcement that it managed to raise $76 million to commence the ethanol assets acquisition program. The Company’s stock has grown from $0.001 in the last days of July to $0.0041 as of August 4.
Analyst Consensus
There is no analyst recommendations and estimates data available for the Company.
Investment Highlights
ESYM’s portfolio of patented and patent-pending Cellulosic Corn™ technologies include a number of (a) feedstock conditioning, (b) oil production, extraction and refining, and (c) energy and carbon mitigation technologies, all designed to achieve the following key goals: (1) Increase the net energy balance of biofuel derived from corn; (2) Increase profitability of corn ethanol; (3) Decrease amount of petroleum burned to make corn derived biofuel; (4) Increase nutritional content of corn ethanol co-products; (5) Decarbonize corn ethanol production; (6) Diversify the biomass mix accepted and produced by corn ethanol facilities; (7) Decrease the commodity and financial risk profile of corn ethanol; (8) Standardize corn-friendly cellulosic technology by building on the existing corn ethanol complex; and, (9) Enhance the competitive positioning of corn ethanol in the domestic and global markets.
The Company is specifically focused on the acquisition of distressed renewable fuel production assets, with an emphasis on first generation corn ethanol production facilities. ESYM is currently evaluating a number of qualified opportunities that produce the raw materials needed for its technologies, or that have the infrastructure it needs to scale the technologies, or that have the ability to refine the products that will be produced with its technologies into finished goods. The Company’s plan in this respect is to leverage the targeted assets and cash flows to defray its technology and financing risk as it commercialize its technologies.
The Company recently entered into a management services agreement with Global Ethanol LLC pursuant to which Global Ethanol LLC is expected to provide corporate and plant management services to the Company. Global Ethanol LLC operates two corn based ethanol plants for a production total of 160 MMGY located in Riga, Michigan, and Lakota, Iowa. The company is experienced in construction, start-up, and operations and maintains a strong differentiator of all internalized functions and services with collective experience in ethanol production, plant management, grains procurement, ethanol marketing, risk management and project development.
ESYM announced the execution of agreements for the sale of ESYM preferred stock and warrants to purchase common stock to five investment funds for $76 million. ESYM will use the investment proceeds to acquire distressed ethanol production facilities, to acquire other strategically-compatible assets, and to develop and integrate its Cellulosic Corn™ technologies into its planned ethanol production facilities. The Company’s goal is to achieve an annualized renewable fuel production rate of 500 million gallons per year within three years, and to demonstrate market leadership by using its technologies to refine more fuel out of corn for less cost on reduced energy consumption and carbon emitted.
The Corn Ethanol Industry contributed more than $65 billion to the U.S. GDP by offsetting 7% of America’s fossil fuel needs in 2008. Ethanol production and the number of ethanol plants shot higher in recent years, in large part because of government mandates for more use of it. The U.S. produced about 9 billion gallons of ethanol last year, up from 3.9 billion gallons in 2005. In 2005, America had about 80 ethanol plants. Today, there are about 220.
Technical Analysis
Source: http://stockcharts.com/h-sc/ui
ESYM is trading above its 13-day moving average. This is considered to be the sign of a bullish trend. There is added weight to this indication because the moving average is rising and suggests that there has been buying interest in this stock.
The MACD for ESYM currently indicates a strong bullish signal for two reasons. First, the MACD is above the signal line, a 9-day moving average. Second, the MACD is above 0 which implies that the underlying moving averages are trending higher.
Comparative Analysis
The recent track record for alternative energy investments is not great. The ethanol industry was severely devastated during the recession and financial crisis. In fact, virtually every publicly traded ethanol company has filed for bankruptcy over the last year. This includes VeraSun Energy, which sold its assets to Valero (NYSE: VLO), a large refinery company; Aventine Renewable Energy Holdings (Pink Sheets: AVRNQ); and Pacific Ethanol (Nasdaq: PEIX).
However with a number of ethanol refining assets available at bargain prices, potential buyers like ESYM started moving in. Despite all the disappointments, it would appear that there is a future for corn ethanol. Moreover, the 2007 Renewable Fuels Standard program calls for a production cap of 15 billion gallons a year for corn ethanol starting in 2015, that’s still roughly 50% higher than the current U.S. production of slightly more than 10 billion gallons a year.
Comparable Companies: Archer-Daniels Midland Co. (ADM), Bunge Ltd. (BG), Corn Products International Inc. (CPO), Pacific Ethanol Inc. (PEIX) and Green Plains Renewable Energy Inc. (GPRE).
Insider Trading Activity
Net Share Purchase Activity
Insider Purchases – Last 6 Months
Shares Trans
Purchases N/A N/A
Sales N/A N/A
Net Shares Purchased (Sold) N/A N/A
Total Insider Shares Held N/A N/A
% Net Shares Purchased (Sold) N/A N/A
Net Institutional Purchases – Prior Qtr to Latest Qtr
Shares
Net Shares Purchased (Sold) N/A
% Change in Institutional Shares Held N/A
Data provided by Thomson Financial
Report Disclaimer
DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice.
The information contained in our report should be viewed as commercial advertisement and is not intended to be investment advice. The report is not provided to any particular individual with a view toward their individual circumstances. The information contained in our report is not an offer to buy or sell securities. We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.
Our newsletter and website have been prepared for informational purposes only and are not intended to be used as a complete source of information on any particular company. An individual should never invest in the securities of any of the companies profiled based solely on information contained in our report. Individuals should assume that all information contained in the report about profiled companies is not trustworthy unless verified by their own independent research.
Any individual who chooses to invest in any securities should do so with caution. Investing in securities is speculative and carries a high degree of risk; you may lose some or all of the money that is invested. Always research your own investments and consult with a registered investment advisor or licensed stock broker before investing.
Information contained in our report will contain “forward looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934. Subscribers are cautioned not to place undue reliance upon these forward looking statements. These forward looking statements are subject to a number of known and unknown risks and uncertainties outside of our control that could cause actual operations or results to differ materially from those anticipated. Factors that could affect performance include, but are not limited to, those factors that are discussed in each profiled company’s most recent reports or registration statements filed with the SEC. You should consider these factors in evaluating the forward looking statements included in the report and not place undue reliance upon such statements.
We are committed to providing factual information on the companies that are profiled. However, we do not provide any assurance as to the accuracy or completeness of the information provided, including information regarding a profiled company’s plans or ability to effect any planned or proposed actions. We have no first-hand knowledge of any profiled company’s operations and therefore cannot comment on their capabilities, intent, resources, nor experience and we make no attempt to do so. Statistical information, dollar amounts, and market size data was provided by the subject company and related sources which we believe to be reliable.
To the fullest extent of the law, we will not be liable to any person or entity for the quality, accuracy, completeness, reliability, or timeliness of the information provided in the report, or for any direct, indirect, consequential, incidental, special or punitive damages that may arise out of the use of information we provide to any person or entity (including, but not limited to, lost profits, loss of opportunities, trading losses, and damages that may result from any inaccuracy or incompleteness of this information).
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.
Popularity: 4% [?]
