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New Govt Contract & Consolidated Share Structure Leaves Junior Renewable Energy Company Positioned for Growth
By: AllPennyStocks.com News
January 17, 2012
For many companies, the idea of, nonetheless the execution, of a reverse split can be a share price death sentence. Generally meant to be used as a means to enhance shareholder value and often times a necessary tool to graduate to a bigger exchange, the reverse split has been severely tainted by countless low-caliber companies that simply use it to reduce share count and then dilute the daylights out of the stock again. For those types of companies, it is literally a “wash, rinse and repeat” type of money-generating tactic that has fleeced shareholders over and again. For other companies that do not make such practices a habit, however, the reverse split can provide a positive sign for the future. Those companies are quickly recognized as the share price typically maintains its value – or even rises – around the time of the effective split.
For Arista Power, Inc. (OTCBB:ASPWD), a developer, manufacturer, and supplier of custom-designed power management systems, renewable energy storage systems, WindTamer wind turbines, and solar energy systems, a reverse split was effective on December 27, 2011, when the company consolidated shares on a 20 for 1 basis. As such, the “D” will remain on the company’s ticker for 20 business days, per FINRA guidelines before reverting back to ASPW. The share value of Arista has held relatively firm and is now trading above its adjusted split price.
Helping buoy shares has been some solid news in 2012 from the Company. On January 3rd, the company reported an increase in 2011 booked orders of nearly 180 percent as compared to 2010. Booked orders for the year rose to $2.3 million from $0.8 million the year prior.
Now, two weeks later, the company has disclosed a new agreement with the U.S. Army that will add $922,000 to corporate coffers. Per the contract, Arista Power is to be the prime contractor to complete Phase One activities for the development of a new Intelligent Micro-Grid. The Intelligent Micro-Grid will be designed to seamlessly integrate both renewable and traditional energy sources to provide the scalability and automatic operation needed to deliver highly reliable power in areas where military operations are taking place across a broad spectrum of energy requirements.
“While our currently available Mobile Renewable Power Station is an attractive solution that can provide adequate power for a single operation," said Arista CEO William A. Schmitz. "The Arista Power platform will enable the Intelligent Micro-Grid to provide much greater levels of needed power, and give the soldier the ability to maximize renewable power while minimizing reliance on fossil fuels.”
What should not be overlooked is the potential for future Arista Power revenue because of the agreement. The Department of Defense has voiced its initiatives to increase its use of clean energy technologies, with goals of 25 percent of its energy usage coming from renewable energies over the next 13 years. While many companies are chomping at the bit to try and get a piece of the alternative energy pie from the government’s efforts, Arista now has its foot in the door. In fact, the new contract contains a provision for a second phase of the project upon successful completion of the first phase by Arista.
Arista’s reverse split has provided the company with potential to truly add shareholder value because of a low number of outstanding shares. 2011 proved an increase in orders and 2012 is moving in the right direction. Should the capital structure remain intact, Arista Power may be a company to keep an eye on as the year progresses to bolster its $20 million market cap. Proper due diligence is encouraged.
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