I've put together several reports covering the solar industry since early last year. One mainstay in my small cap arsenal has been XsunX, Inc. (OTCPK:XSNX) Ever since October of 2013, this company has been seeing major business developments and an increase in share price of roughly 211% over that time-period. Recently I've had the pleasure of actually sitting down with the CEO, someone who I've followed closely. Here's what he had to say:
- In a few words, can you explain what the company does or is planning to do?
XsunX, Inc. focuses on delivering solar power energy solutions that provide the greatest bottom-line financial benefits to commercial and industrial business clients. In addition to providing the highest quality energy production systems our goal is to deliver solar power systems that meet our client's energy needs, financial goals, and provide net positive cash flows in the first year.
2. What Direction do you see your industry headed toward?
In short - continued expansion of solar PV adoption rates by consumers, and substantial growth opportunities for solar technology providers. The nation's current electric distribution system was not built in a few years - it took nearly a century. Today, even with record solar installations occurring we have barely scratched the full potential for the industry.
3.What are the key risks the company faces right now?
XsunX is focused on delivering solar power solutions to commercial and industrial business clients. For a business or property owner a direct investment in solar PV makes incredible financial sense. Many, if not most, businesses can realize net positive cash flows in the first year. It is the tax incentives that make the investment so powerful, but if these tax laws were to be changed it could affect how rapidly our client's investment provides positive returns.
4.What projects are you currently looking to begin and/or complete?
The projects that we offer design and installation services to are typically very diverse in their power needs, building limitations, and financial goals. Currently, we are working to design custom systems for low rise commercial and heavy industrial applications. We are also completing the installation of hotel systems, commercial, and agricultural locations.
5. What are the current challenges you're facing that could prevent or slow progress from this/these project(s)?
The limiting factors we often encounter relate to the buildings and business needs of our clients. These include limitations to current electrical systems, architectural designs, roof space, or structural issues. Our designs have to provide absolute compliance and safety with modern building codes while at the same time we need to be conscious of the financials goals we have set for ourselves and our client.
6. If all goes as planned, how much revenue does the company anticipate generating from this/these project(s)?
We launched our PV system design and sales efforts last November so we are still in the early stages of building momentum and a sales channel in which we can close several deals per week. While we have begun to make sales and generate revenues our goal is ramp up and to achieve 1 megawatt per month in sales this calendar year. Depending on the mix of project types that could generate well in excess of $3 million per month in sales.
7. How are you currently marketing your product/brand?
Our marketing efforts are currently focused on commercial PV system sales in the Southern California region - Ventura to Riverside to San Diego. We have been using print ads designed specifically to market to and attract business owners. Our focus is solar that makes sense for your business. The results have been better that we had initially anticipated with many weeks generating hundreds of kilowatts in system quote requests. In the future we plan to expand marketing efforts to include radio advertising as well.
8. Where do you think the most significant growth will occur for the company over the next 3-6months?
The sale of solar power systems to business owners offers XsunX the greatest revenue growth opportunities. Our goal is to establish a brand that business owners associate with solar for your business that makes dollars and sense. We are working hard to develop that no-brainer package that opens the commercial PV system floodgates.
9. You're the CEO of a small cap company. What is the major discerning factor that sets the company apart from the rest and gives you a competitive advantage?
The fact that we are focused on commercial clients and not residential is key. We have heard from many people that they have not seen many, if any, solar companies conducting main stream marketing efforts aimed exclusively at commercial clients. The bulk of the industry is currently built around a sales gimmick tailored to enticing residential owners to pay a few cents less for power and own nothing for "zero down". And, there are also a number of companies focused on developing large scale solar farms which is a highly competitive space.
We believe, and market statistics support, that the commercial solar PV market is one of the largest yet to be tapped opportunities. As a full service design and installation company we can address the unique financial, architectural, and power needs of each client. And unlike the residential market our system sales can reach and even exceed $1 million per installation.
10. What are you doing to capitalize on the company's strengths and minimize the company's weakness?
Management has over 30 years' experience in the building industry, nearly 20 years in finance, and 10 years in the solar PV space. We are qualified, experienced, and capable to aggressively market and grow our business. Our challenge will be managing the diversity of client needs while working to maintain focused growth in the most profitable services we offer. A major weakness that we want to avoid would be dissatisfied clients so we are keeping an eye on quality and satisfaction to ensure that our brand develops a respected reputation.
11. Are you self-funding your projects or do you work with funding sources as a means for operational cash flow?
Our goal is to self-fund as soon as possible. However, if we fail to aggressively establish our brand and grow sales through overly cautious cash management we may delay the greater opportunities that exist. So we continue to review financing options that would allow us to accelerate our efforts.
12. Is there anything that shareholders should know about you personally?
I can tell you this - I really like what I'm doing. We help clients make profitable investments while at the same time give them the means to control costs and establish long term predictability for their business. Also, I love to build things and each project offers design and assembly challenges that allows me to leverage my experience. This is a great business to be in.
I'd like to take the time to thank Mr. Djokovich for his insight into the furtherance of the company and I'm sure for many of the shareholders, this gives a glimpse into what the company will look to build over the coming year. It's always been an honor being able to speak to the figure heads of companies that I actually report on and for me, this was a great opportunity to discuss the company first hand with its CEO.
Important information on subjects contained within this interview:
Small and micro cap companies involve a higher risk. The above interview was conducted solely for the purposes of first hand information and more incite into the company. Information from this interview may contain statements about future expectations, plans, prospects or performance of XsunX, Inc. that constitute forward-looking statements for purposes of the Safe Harbor Provisions under the Private Securities Litigation Reform Act of 1995. Words and phrases "can be", "expects", "may affect", "believed", "estimate", "project" among others are intended to identify forward-looking statements. Please be advised that forward-looking statements are not a guarantee of future performance. None of the information in this interview constitutes or is intended as an offer to sell securities or investment advice of any kind. Actual results may differ materially from those anticipated in such forward-looking statements as a result of various factors, some of which are beyond the company's control, including attracting and retaining key talent. In addition to press releases, all public filings and forward-looking statements made by management, are to include, but are not limited to, the estimate of the sufficiency of capital resources, the ability to raise additional capital to fund future operations, repay existing indebtedness, and uncertainties involving estimating market opportunities include, and in identifying which contracts matches the company's capability to be awarded such contracts. All such forward-looking statements are current only as of the date on which statements were made. The above company or this contributor do not undertake any obligation to publicly update any forward-looking statement to reflect events or circumstances after the date on which any such statement is made or to reflect the occurrence of unanticipated events.