912365--3/26/2009--EVERGREEN_ENERGY

related topics

{gas, price, oil}

{stock, price, share}

{debt, indebtedness, cash}

{cost, operation, labor}

{cost, regulation, environmental}

{property, intellectual, protect}

{loss, insurance, financial}

{product, market, service}

{provision, law, control}

{operation, international, foreign}

{condition, economic, financial}

{capital, credit, financial}

{tax, income, asset}

{control, financial, internal}

{personnel, key, retain}

{cost, contract, operation}

{regulation, government, change}

We have a history of losses, deficits, and negative operating cash flows and will likely continue to incur losses in the future. Such losses may impair our ability to pursue our business plan. We have substantial capital requirements and, as a result, we have been, and continue to be, dependent on financing activities or sales of our equity securities to fund our operating costs. The inability to raise funds through traditional financing means or sale of our equity securities may require us to sell assets to fund our operating costs. We have a limited operating history as an energy solutions company, and our business and prospects should be considered in light of the risks and difficulties typically encountered by a company with a limited operating history. We rely on key personnel and if we are unable to retain or attract qualified personnel, we may not be able to execute our business plan. Our acquisition activities may not be successful. Competition from other companies in the clean coal, alternative fuel and emission-reducing equipment industries, including competition resulting from deregulation in the United States power industry, could adversely affect our competitive position. Competition from other companies that have developed or may develop other systems that measure greenhouse gases and certify carbon credits, could adversely affect our competitive position. Further, competition could increase depending upon the level of regulation ultimately enacted in the United States and international markets, which could further adversely affect our competitive position. Overseas development of our K-Fuel and C-Lock businesses is subject to international risks, which could adversely affect our ability to license, construct overseas plants or profitably operate our businesses overseas. If the national and world-wide financial crisis continues or intensifies it could adversely impact demand for our technology and products. Our inability to adequately protect and defend our proprietary K-Fuel and C-Lock processes could harm our business, increase our costs and decrease sales of our products and services. Our success will depend on our ability to operate without infringing on or misappropriating the proprietary rights of others. We faced technical and operational issues at our Fort Union plant prior to suspending operations at the plant. These technical and operational problems may adversely impact our ability to operate or develop future K-Fuel or K-Direct facilities, resulting in delays in achieving full scale commercial production of our K-Fuel refined coal. We do not know if K-Fuel refined coal is commercially viable. Construction of future K-Fuel or K-Direct facilities will require substantial lead time and significant additional financing. Any negative results from the continuing evaluation of K-Fuel refined coal produced at future facility sites by us or third parties could have a material adverse effect on the marketability of K-Fuel refined coal and future prospects. Due to the uncertain market for, and commercial acceptance of, our K-Fuel refined coal, we may not be able to realize significant revenues from the sale of K-Fuel refined coal. If we are unable to construct and commercialize K-Fuel production plants, our ability to generate profits from this process will be impaired. Regulation of the K-Fuel process and K-Fuel refined coal may adversely affect our financial condition and results of operations and cash flows. Compliance with environmental laws and regulations may increase our costs and reduce our future sales. Future changes in the law may adversely affect our ability to sell our products and services. We do not know if our C-Lock technology is commercially viable. Further, due to the uncertain market for, and commercial acceptance of our C-Lock technology, we may not be able to realize significant revenues from this technology. Future changes in the law may adversely affect our ability to sell products and services based on our C-Lock Technology. Certain conditions and events beyond our control could negatively impact our coal mining operations, our production or our operating costs. A substantial or extended decline in coal prices could negatively affect our revenues and the value of our coal reserves. Increases in the costs of mining and other industrial supplies, including steel-based supplies and diesel fuel, or the inability to obtain a sufficient quantity of those supplies, could negatively affect our operating costs or disrupt or delay our production. Our inability to acquire additional coal reserves or our inability to develop coal reserves in an economically feasible manner may adversely affect our business. Estimates of proven and probable reserves may vary substantially from actual results. A shortage of skilled labor in the mining industry could pose a risk to achieving optimal labor productivity and competitive costs, which could adversely affect our profitability. Defects in title or loss of any leasehold interests in our properties could limit our ability to conduct mining operations on these properties or result in significant unanticipated costs. The availability and reliability of transportation facilities and fluctuations in transportation costs could affect the demand for our coal or impair our ability to supply coal to our customers. Extensive government regulations impose significant costs on our mining operations, and future regulations could increase those costs or limit our ability to produce and sell coal. We may be unable to obtain and renew permits necessary for our operations, which would reduce our production, cash flow and profitability. Risks Relating to Our Debt, Our Common Stock and Other Risks. Our debt obligations may affect our business, operating results and financial condition. Our ability to pay principal and interest on outstanding indebtedness depends upon our receipt of dividends or other intercompany transfers from our subsidiaries, and claims of creditors of our subsidiaries that do not guarantee our indebtedness will have priority over claims you may have as for our guaranteed indebtedness with respect to the assets and earnings of those subsidiaries. We may not have the ability to repurchase the 2007 Notes for cash upon the occurrence of a fundamental change as required by the Indenture governing the 2007 Notes or to make payments upon major transactions as required by the 2009 Notes. Conversion of the Notes may dilute the ownership interest of existing stockholders, including holders who have previously converted their Notes. We may not be able to refinance the Notes if required or if we so desire. We may be unable to deduct for tax purposes the interest or original issue discount, if any, paid or accrued on the Notes. Our common stock could be delisted from the NYSE Arca if we do not comply with its continued listing standards. Our stock price has been volatile historically and may continue to be volatile. The price of our common stock, and therefore the price of the notes, may fluctuate significantly, which may make it difficult for holders to resell the notes or the shares of our common stock issuable upon conversion of the notes when desired or at attractive prices. Sales of a significant number of shares of our common stock in the public markets, or the perception of such sales, could depress the market price of the notes, our common stock, or both. Our stock price has been volatile, and your investment in our common stock could suffer a decline in value. We have adopted anti-takeover defenses that could make it difficult for another company to acquire control of the Company or limit the price investors might be wiling to pay for our stock, which could adversely affect the performance of our stock. We have not paid cash dividends on our common stock and do not anticipate paying any dividends on our common stock in the foreseeable future. The 2009 Notes contain restrictive covenants that limit our operational flexibility.

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912365--3/26/2009--EVERGREEN_ENERGY_INC