SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report: October 15, 2003
XSUNX, INC.
---------------------------
(Exact name of registrant as specified in its charter)
SUN RIVER MINING, INC.
----------------------
(Former Name)
Colorado 000-29621 84-1384159
-------- --------- ----------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
65 Enterprise, Aliso Viejo, CA 92656
-----------------------------------------------------------------
(New address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (949) 330-8060
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
The Plan and Agreement of Reorganization between Sun River Mining, Inc. and
Xoptix, Inc. was completed on September 24, 2003. Pursuant to the Plan, the
Company authorized the issuance of 110,530,000 (post reverse split) common
shares.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
None
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
None
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
None
ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE
The Company approved a reverse split on a one new share for twenty
old shares basis, effective October 6, 2003.
The Company has also changed its name from Sun River Mining, Inc. to
XSUNX, Inc. on September 30, 2003.
--------------
CERTAIN FACTORS AFFECTING FORWARD LOOKING STATEMENTS
In addition to statements of historical fact, this summary contains
forward-looking statements. The presentation of future aspects of XsunX, Inc.
("XsunX, Inc." or the "Company") found in these statements is subject to a
number of risks and uncertainties that could cause actual results to differ
materially from those reflected in such statements. Some of these risks might
include, but are not limited to, those discussed below. Readers are cautioned
not to place undue reliance on these forward-looking statements, which reflect
management's analysis only as of the date hereof. Without limiting the
generality of the foregoing, words such as "may", "will", "expect", "believe",
"anticipate", "intend", or "could" or the negative variations thereof or
comparable terminology are intended to identify forward-looking statements. The
Company undertakes no obligation to publicly revise these forward-looking
statements to reflect events or circumstances that arise after the date hereof.
Readers should carefully review the factors described in other documents the
Company files from time to time with the Securities and Exchange Commission,
including the Quarterly Reports on Form 10-QSB filed by the Company in 2003 and
any Current Reports on Form 8-K filed by the Company.
NEW BUSINESS
On July 9, 2003, The Company entered into a Plan of Reorganization and Asset
Purchase Agreement with Xoptix, Inc., a California corporation, to acquire the
following three patents for Seventy Million (70,000,000) shares (post reverse
split one for twenty): No. 6,180,871 for Transparent Solar Cell and Method of
Fabrication (Device), granted on January 30, 2001; No. 6,320,117 for Transparent
Solar Cell and Method of Fabrication (Method of Fabrication), granted on
November 20, 2001; and No. 6,509,204 for Transparent Solar Cell and Method of
Fabrication (formed with a Schottky barrier diode and method of its
manufacture), granted on January 21, 2003 (collectively, the "Patents"). The
Company's new Business Plan is as contained herein. The Plan provided for the
issuance of 70,000,000 shares for the Patents and 25,500,000 shares for
services, and 230,000 shares to settle old bills (post reverse split one for
twenty), in addition to the shares being sold hereunder. The transaction was
completed on September 30, 2003.
HISTORY OF XOPTIX PATENTS
Xoptix, Inc. was founded in March 1999 to develop and exploit a new solar-based
invention. Between March 1999 and the present, Xoptix focused primarily on
protecting and validating its proprietary process for making a transparent
window glazing which produces electricity.
Specifically, Xoptix has been granted three patents for a process for making
solar electric glass. This yields a new class of thin film and glass products
for use under the trade name "XsunX" (and which will be used hereafter to
describe the technology). These films and glasses can replace a broad spectrum
of common materials. Xoptix ceased business operations in 2001 due to lack of
capital. Xoptix has sold its technologies and patent assets to the Company as
part of a plan of liquidation of Xoptix and winding up of its corporate
existence.
Products Strategy
XsunX has recently acquired the patents to technology for the manufacture of
transparent solar cells. We anticipate that the primary product opportunity for
this technology will be in establishing a viable process for the commercial
manufacture of solar electric glass. This proprietary process will allow
manufacturers to inexpensively apply a coating, film or glazing to glass,
plastic and other materials, which is transparent and photovoltaic. Because
XsunX glazing is transparent, the appearance of products manufactured using the
XsunX process is not changed. When XsunX glazing is exposed to light, the light
energy is converted into electrical energy for use as a power source.
Applications for Solar Electric Glass
While there are numerous ways to make solar cells, all of these methods result
in a structure that is opaque. Thus, they are not appropriate for many
applications. The need to place cells in areas where they do not obscure vision
or building esthetics also limits deployment to areas of exceedingly small
percentages of total available building surfaces. To date, this limiting factor
has also presented ROI inefficiencies associated with costs per kW produced
versus the Balance Of System (BOS) expenditures for mounting, wiring, power
conditioning and grid connection.
On the other hand, XsunX solar electric glass technology provides an opportunity
for up to 75% of a buildings exterior surface to produce electricity for use by
the building. Efficiencies are gained in total kW produced and ROI on BOS
expenditures. Management believes these unique properties provide major market
potential in the following areas:
Architectural Glass - Large Buildings
XsunX glazing could be applied to the windows of large buildings, turning these
structures into virtual power plants. Electrical power generated can be used to
run building systems. In the future, the Company's management believes that a
substantial portion of electrical power can be generated in dense urban areas
with XsunX's solar electric glass. While the total amount spent annually on
building products is over a trillion dollars, the total expenditure for XsunX
solar electric glass could swell into the billions.
Architectural Glass - Homes
XsunX glazing could be applied to windows in homes to supply a portion of
residential electrical power. The Company's management believes that these types
of windows could eventually be supplied by companies such as Andersen Windows
and could be sold directly at home improvement stores such as Home Depot. Film
produced by companies such as 3M using the XsunX process could also be applied
to new and existing windows.
Business Model
The Company's management believes that the primary target opportunity for
XsunX's technology is makers and fabricators of glass. This is a very large
industry, generating worldwide revenues in the hundreds of billions of dollars.
The Company's strategy is to complete the development and commercialization of
the XsunX process, and then enter into relationships with channel partners who
will manufacture and distribute products made with XsunX solar electric glass
technology. The Company's management believes that the most rapid and likely
path to success involves licensing the XsunX process to companies with
established manufacturing and distribution facilities.
The Company intends to promote the environmental and cost savings virtues of
products manufactured with the XsunX process. By supplementing the marketing
efforts of channel partners, the Company expects to accelerate the adoption of
products that benefit from XsunX's solar electric glass technology.
Revenue Model
The Company's management believes that virtually all of the Company's revenues
will come from the license of its proprietary XsunX solar electric glass
technology to major manufacturers. Exclusive and non-exclusive know-how and
intellectual property licenses will result in a substantial stream of royalty
revenue for the Company. The Company's management estimates that manufactures of
architectural glass will be willing to pay a royalty of at least 3% of gross
sales for the non-exclusive right to manufacture XsunX flat glass. No contracts
now exist.
Proprietary Technology
The best inventions are often simple in nature and come from looking at a
problem from a different perspective. For the last 20 years, the solar industry
has made tremendous strides in improving the efficiency of solar products. In
fact, it is fair to say that nearly all of the work done to improve solar cells
has been with the goal of improving their efficiency or cost. A small amount of
work has been done to turn the existing solar technologies into products that
could be integrated into larger portions of our environments. Ostensibly, the
most benefits from solar technologies will come from the incorporation of vast
amounts of solar cell technology into our environments.
Background of the Transparent Solar Cell Invention
Solar energy provides many advantages over traditional energy sources. For
example, energy from the sun is virtually unlimited and easily accessible
throughout the world. It does not require the extraction of a natural resource
from the ground to obtain the energy and it can be converted to electricity in a
manner that is not harmful to the environment. Solar energy is available
whenever the sun is shining and can be collected and stored for use when no
light source is available. Therefore, if it can be harnessed economically, it
provides an environmentally friendly source of energy that does not deplete or
destroy precious natural resources. This is in stark contrast to the use of
fossil fuels that are of limited supply and which cause environmental damage
with both their use and extraction processes. The use of fossil fuel also
requires a constant source of raw materials that may be difficult obtain in many
circumstances.
Many different applications benefit greatly from the use of solar energy. For
example, buildings, with their broad surfaces that are exposed to the sun's
energy for much of the day, can use that energy to provide some or all of their
energy needs. Various solar cells have been developed using different
fabrication techniques to take advantage of this energy source.
One type of solar cell is formed with crystalline silicon. For these solar
cells, crystalline silicon is formed by melting silicon and drawing an ingot of
crystalline silicon of the size desired. Alternatively, a ribbon of crystalline
silicon can be pulled from molten silicon to form a crystalline silicon solar
cell. A conductor is placed on either side of the crystalline silicon to form
the solar cell. These processes use high temperatures and the solar cells are
expensive to manufacture. Packaging is also difficult and expensive and creates
a rigid structure. The manufacturing process limits their maximum size. It is
difficult to slice the resulting crystalline silicon thin enough to provide a
transparent or flexible solar cell. However, these structures are very efficient
(relative to other types of presently available commercial solar cells). As
such, crystalline solar cells are used primarily for applications where
efficiency is more important than cost and where the structures do not need to
be flexible. For example, these are commonly used on satellites.
Another type of solar cell is formed with polycrystalline silicon. These may be
formed as thin layers on wafers and can thus be made thinner than crystalline
silicon solar cells. As is well known in the art, heating amorphous silicon can
form polycrystalline silicon. Typically, amorphous silicon begins to crystallize
at temperatures greater than about 1400(Degree)C. Because of these high
temperatures, known processes can only use substrates with high melting points.
These processes are not appropriate for substrates made of plastics or other
materials that melt at lower temperatures. In the manufacture of flat panel
displays, it is known to use lasers to form polycrystalline silicon thin film
transistors (TFTs). Such use has not included the formation of P-N junctions or
solar cells that presents its own set of challenges. Moreover, these
manufacturing processes generally formed single transistors and were not used to
form large sheets or areas of polycrystalline silicon. Further, lasers have been
used in the manufacture of solar cells, but only as a tool to mechanically form
(slice, pattern, etch, etc.) the solar cells.
Another type of solar cell has been formed using doped layers of amorphous
silicon. These are not subject to some of the problems inherent in the
previously described crystalline silicon or polycrystalline solar cells. First,
amorphous silicon can be formed using low temperature processes. Thus, it can be
formed on plastic and other flexible substrates. They can also be formed over
large surfaces. Second, the processing techniques are less expensive.
Nevertheless, amorphous solar cells introduce other significant limitations not
found in crystalline silicon or polycrystalline silicon solar cells. For
example, hydrogen is generally added during the manufacturing to increase the
efficiency of the cell. Amorphous silicon solar cells tend however to lose this
hydrogen over time, causing reduced efficiency and reduced usable life.
Moreover, amorphous silicon solar cells are not transparent. Thus, they are not
appropriate for many applications. For example, buildings with solar cells can
be unsightly, and the solar panels may block the view of the outdoors or access
to outside light indoors. Also, portable electronics often place a premium on
size and surface area. Some devices have displays that cover most -- if not all
-- of the exposed surface of the device. Therefore, it is often undesirable or
impossible to mount a traditional amorphous silicon solar cell on the device.
Attempts have been made to solve this transparency problem by making transparent
panels from existing solar cell processes. One method has been to take advantage
of the "window shade effect" whereby solar cells are formed on a transparent
substrate with gaps between adjacent solar cells. This allows some light to pass
through to create a transparent effect. The larger the gaps, the more
transparency the device has. A disadvantage of this technique is that much of
the space is unused; therefore the efficiency of the device is less than it
would be if all of the surface areas were used for solar cells. Of course,
devices of this type also suffer from the problems inherent to the type of cell
used. For example, if based on amorphous silicon, these devices suffer from the
hydrogen loss exhibited in other amorphous silicon devices.
Other work has been done at making transparent solar cells using materials other
than silicon (for example, cadmium telluride (CdTe)). These cells suffer from
the challenges inherit to using materials other than silicon.
The XsunX Process
The XsunX technique for making transparent solar cells leverages two distinctly
different technologies -- amorphous solar cell process and flat panel display
process -- that have not previously been linked. By adding known processing
techniques to those commonly used in the solar industry, XsunX has been able to
create and protect a structure that is both transparent and photovoltaic.
The XsunX Process combines the following advantages:
o It is transparent and therefore can be used in places inapplicable to
existing solar cells.
o It is cost effective because it uses thin film amorphous silicon.
o It may be readily manufactured because the methods for manufacture uses
commercially available chemical vapor deposition and laser annealing
equipment.
o It can be used on a wide variety of substrates including low temperature
substrates.
The Method of Fabrication
It is anticipated that the XsunX Process will provide a method and structure
that will form a substantially transparent solar cell. The solar cell is
anticipated to be thin, flexible, and easy to make and use with conventional
semiconductor processes. The solar cell is also anticipated to operate
effectively as an optical filter.
In a specific embodiment, the XsunX Process includes a method of forming a solar
cell. The method includes steps of providing a substrate, such as glass,
plastic, Mylar and other substrates, including those with low melting points.
The method also includes forming a first conductive layer overlying the
substrate. The method also includes forming a first amorphous silicon layer of a
first dopant type overlying the first conductive layer. A step of annealing the
first amorphous silicon layer is included. The method also forms a second
amorphous silicon layer of a second dopant type, and also anneals the second
amorphous silicon layer. A second conductive layer is formed overlying the
second amorphous silicon layer. A combination of these steps forms a transparent
solar cell structure.
In an alternative aspect, the XsunX Process provides a solar cell structure that
is transparent. The structure includes a transparent substrate, which can be
selected from glass, crystal, plastic, Mylar, and other substrates, including
those that have low melting points. A conductive layer is formed overlying the
transparent substrate. A first polycrystalline silicon layer from a first
amorphous silicon layer of a first dopant type is formed overlying the first
conductive layer. The structure also includes a second polycrystalline silicon
layer from a second amorphous silicon layer of a second dopant type overlying
the first polycrystalline silicon layer, and a second conductive layer overlying
the second polycrystalline silicon layer. The combination of these layers forms
a transparent structure.
In a further aspect, the XsunX Process provides a method for fabricating a
structure comprising a transparent solar cell structure. The method includes
forming a first conductive layer overlying a transparent substrate, and forming
a first amorphous silicon layer overlying the first conductive layer. The method
also includes converting the first amorphous silicon layer into a first
polycrystalline silicon, and forming a second amorphous silicon layer overlying
the first amorphous silicon layer. A step of converting the second amorphous
silicon layer into a second polycrystalline silicon is included. The method also
includes forming a second conductive layer overlying the second amorphous
silicon layer. The combination of these steps forms a transparent solar cell
structure overlying the substrate.
In still a further aspect, the XsunX Process provides a solar cell comprising a
substrate with a melting temperature of less than 450(Degree) C, a first
conductive layer overlying the substrate, a first polycrystalline film overlying
the first conductive layer, a second polycrystalline film overlying the first
polycrystalline film, and a second conductive layer overlying the second
polycrystalline film.
Advantages of the XsunX Process
The XsunX Process will achieve numerous advantages over conventional techniques
for forming solar cells. For example, the present XsunX method uses conventional
equipment and processes from semiconductor operations to manufacture the solar
cells. In one aspect of the XsunX Process, an Excimer laser is used to anneal
the amorphous silicon layers. Use of this, or a similar laser, allows the
forming of polycrystalline silicon without exposing the substrate to high
temperature that will distort or destroy it. Therefore, low melting point
materials such as plastic may be used. The XsunX solar cells can be transparent,
which makes them desirable for placing over glass and other see through
structures. In other aspects, the invention is expected to be easy to implement
and control. The present cell structure is extremely thin and efficient and can
be implemented on a variety of applications.
For example, it can be formed on a flexible substrate and substantially maintain
the flexibility of the substrate. Depending upon the embodiment, one or more of
these advantages may exist. Other advantages may also exist depending upon the
embodiment. A transparent solar cell produced with the XsunX Process will also
have a lower efficiency than a standard solar cell.
Conversely, the ability to incorporated larger amounts of XsunX cells on to a
structure provides for significant opportunities to produce greater amounts of
usable energy. Conventional PV technology installation is typically limited to
very small percentages of a buildings usable surface. XsunX PV technology may
see building surface integration of as much as 75% in commercial applications
providing many times the kW production associated with smaller installations of
conventional opaque PV cells.
The Company's management has a high level of confidence that the Company can
successfully complete the commercial process development because the XsunX
process is either:
o A mature process of making amorphous silicon solar cells plus one mature
step from the process of making flat panel displays, or
o A mature process of making flat panel displays plus the mature step of
sandwiching it with ITO on a substrate
The XsunX process for producing a transparent solar cell uses standard
(commercially available) equipment, inexpensive materials and many
well-understood processes.
The Company's management estimates that a transparent solar cell produced with
the XsunX process will have a lower efficiency than a standard solar cell for
the following reasons:
Poly-crystalline cells are more efficient than amorphous cells
At least 25% of the photons will be annihilated within 1000 Angstroms
ND1 Solar Filter will be at least 4000 Angstroms - conservative number is
50% for ND1 filter
XsunX transparent solar cells will have a very wide dynamic range of efficiency
depending on the application and the optical filter characteristics.
Future Products
XsunX intends to extend its brand name and capitalize on its channel partner
relationships by developing additional building integrated photovoltaic products
in the future. The Company realizes that the cost of product development is
becoming increasingly more expensive. To assure the best possible new product
decisions are made, the Company has implemented the following criteria for
evaluating and selecting new products:
o Product opportunity is presented by established license partner with
provisions for adequate marketing support
o Product assists users by reducing time, effort or expense
o Product can be implemented using the Company's existing channels of
distribution.
o Product potential is investigated, and market research is undertaken to
estimate the numbers of potential users that can be reached.
o Product complies with any and all new laws or government programs or
regulations bearing impact within the next five years.
o New products will be added as new opportunities are identified.
o The Company will use outside material providers when they have the
resources necessary to expedite the development of an XsunX product. They
will be selected based upon their expertise, active participation,
reputation and success in their field. When beneficial, the Company seeks
to blend the offerings of several providers to create an optimum hybrid
product yielding the most benefits to its customers.
o A product must be improved every 12 months in order to maintain its
competitive position, market value and price point. The Company must
maintain its ability to provide useful products as the environment, its
customers' needs, and its capabilities change.
Market Analysis
XsunX's transparent photovoltaic glazing for glass, plastic and other materials
promises to be a break-through technological innovation that will make solar
energy economically feasible and may cause the solar energy market to explode.
The Company's technology can be applied to the already quite large and
established glass industries. That is, transparent glazing will enable solar
energy-production to enter mainstream markets because it can readily become
integral to the designs of buildings. Builders and manufacturers already use
glass, plastic and other materials, so they will be especially attracted to the
economic benefits of using the same materials that also produce electrical
energy.
In the long view, solar energy production is intrinsically attractive, not only
environmentally but also economically. Sunlight is readily, regularly, and
widely available; it is renewable; and it is easily accessible without the
massive expense of mining, drilling, or constructing huge dams or other
facilities. Tapping the sun directly, rather than through the solar energy
stored in fossil fuels, wood, or ethanol, makes too much economic sense not to
be inevitable.
A major factor in the restricted use of solar energy has been the technological
limitations of large-scale solar energy production, particularly active
production of electricity rather than passive collection of heat. For buildings,
residential and nonresidential, photovoltaic technology has shown it can
significantly reduce the need for electricity generated through other means, but
the additional cost of purchasing and installing photovoltaic systems has been
prohibitive, especially compared to the cost of electricity through other means.
XsunX's patented technology may make solar energy production economically and
technologically feasible for the building industry because it allows glass,
plastic and other materials to produce electricity while remaining transparent
and thus functional as a window or display surface. The architectural limiting
aspects of current photovoltaic technologies may soon disappear as XsunX glazing
turns commercial and residential structures, and their vast areas of modern
architectural glass, into virtual power plants.
The Company's management believes that the primary target markets for XsunX's
technology are makers and fabricators of glass. This is a very large industry,
generating worldwide revenues in the hundreds of billions of dollars. It breaks
down into two areas relevant to XsunX's technology:
o Nonresidential construction, primarily architectural glass for large
edifices, such as office buildings, hospitals, schools, retail buildings,
and industrial buildings.
o Residential construction, primarily doors and windows for homes.
The construction industries fluctuate in direct relationship to the growth of
the overall economy. They are, nevertheless, very large, stable markets over the
long term. In addition, the flat glass industry for the construction industry is
geared for technological innovations, including especially those that help
control sunlight for greater energy efficiency.
Other factors indicating favorable market conditions for XsunX include:
o A boom market for nonresidential and residential construction, spurred by
strong low interest rates.
o A growing concern in nonresidential construction with energy efficient
buildings, possibly spurred by recent dramatic hikes in energy costs,
especially oil.
As an innovative, patent technology, the competition for XsunX's transparent
solar cell technology is primarily current modes of producing and glazing glass
and plastic. These include various technologies to control sunlight and increase
heating and cooling efficiency in buildings and cars and advances in
battery-powered technology for electronics.
With its breakthrough process in the solar production of electricity, XsunX will
have clear advantages marketing its technology. XsunX transparent solar cell
technology will enable manufacturers to make buildings more efficient and
ultimately more cost-effective, while also reducing dependency on fossil fuels
and other technologies that harm the environment.
The Underdeveloped Market for Photovoltaic Products
Electricity produced by photovoltaic products is growing rapidly, but remains a
very small percentage of overall U.S. energy production, and a very small
percentage of its potential. Despite the attraction of clean, renewable, safe
energy production, solar electricity fails to compete with other means of
producing electricity in part because of technological limitations, which often
make solar energy economically unfeasible. This is especially true for
large-scale energy production. XsunX's transparent solar cell technology opens
new markets for solar energy applications in construction and other industries
as it makes the option of solar energy economically feasible.
Marketing Plan
XsunX's marketing strategy is to create a favorable environment to license its
solar electric glass technology. The Company intends to enhance, promote and
support the fact that products produced with the XsunX process provide users
with a best of class technology that spans and interconnects glass, optical film
and energy markets market's to provide substantial economic and environmental
benefits.
Product and Service Differentiation
The differentiating attributes of products produced with the XsunX process
include:
o Energy from a renewable source - solar
o Transparent nature eliminates inhibiting architectural applications
o May be applied to glass or flexible substrates
o Provides distributors with valuable bundling opportunities
o May be applied with low temperature - allows for a variety of
substrates
o High level of reliability
o Reasonable cost
Value Proposition
The Company's value proposition is simple: XsunX technology fills the voids in
today's solar technologies allowing the production of solar electricity to
become part of our environment as a natural use of space and makes more sense
out of how we control our environments and draw the most from them.
Positioning
XsunX's unique value proposition can be exploited to arrive at a winning
position in the minds of its customers. The Company must be positioned as the
only source of commercially viable, solar electric glass -- providing users with
substantial economic and environmental benefits.
Advertising and Promotion
XsunX recognizes that a key to success will be to undertake focused advertising
and promotion efforts aimed at developing product awareness within the glass
manufactures, fabricators, optical film, and building industries. This campaign
will be performed aggressively and on a scale necessary to meet license sales
goals. To accomplish its licensing goals, the Company requires a capable
advertising agency and public relations firm. Subject to the recommendation of a
marketing director, an agency will be selected and, with their assistance, a
comprehensive advertising and promotion plan will be drafted.
Advertising and Promotion Objectives
XsunX's overall advertising and promotion objectives are to:
o Position XsunX as a leader building integrated photovoltaic markets.
o Increase Company awareness and brand name recognition among prospective
customers.
o Generate qualified sales leads for the Company's field sales organization.
o Develop, through market research, significant information to create
immediate and long-term marketing plans.
o Create product and service advertising programs supporting the Company's
value proposition.
o Coordinate sales literature, demonstration materials, telemarketing
programs, and direct response promotions in order to present a unified
marketing approach.
Media Objectives
XsunX's media objectives are to:
o Increase awareness of the Company in the glass and building industries.
o Establish an image of XsunX as an organization that is professional,
completely reliable, and highly positioned in the market.
o Maximize efficiency in selection and scheduling of published ads in
publications to cover all targeted markets.
Print Media Strategy
XsunX's print media strategy is to:
o Select primary business publications with high specific market penetration.
o Schedule adequate frequency of ads to impact market with corporate image
and product messages.
o Where possible, position advertising in or near industry articles, product
reviews, center spread or appropriate editorials.
o Utilize U.S. editions of consumer, trade, or specialty publications.
o Take advantage of special high-interest issues of major publications when
possible.
o Maximize ad life with monthly and weekly publications.
The Company will develop an advertising campaign built around a solutions
oriented ad campaign message, beginning with a "breakthrough technology"
statement and supporting it with ads that reinforce this message. Additionally,
the Company will schedule its advertising campaign to develop a consistent reach
and frequency throughout the year.
Advertising Campaign
An effective way to reach the Company's potential customers is to develop a
targeted advertising campaign promoting XsunX Technology. To establish and
maintain the Company's image, the delivery and tone of its statements will be
informative. Ads will convey the look and feel of a successful company. Ideally,
after becoming familiar with the Company's products, prospective customers will
call for more information or visit the Company's Web site.
Trade Shows
XsunX will participate in industry trade shows, where the Company is likely to
meet new alliance partners and licensing customers. The number of trade shows
attended will be increased each year. These shows will be attended independently
and with companies with which XsunX has joint marketing/sales or OEM agreements.
In deciding on the XsunX plan for trade shows, the following factors have been
taken into consideration:
o Target audience of the show - will this get the message to the Company's
target market
o Geographic location - a good mix of shows around the country.
o Time frame - preferably no more than one show a month.
o Past experience, if any with the show.
o Participation in someone else's booth.
Reports and papers will be published for trade journals supporting trade shows
and technical conferences.
Sales Support Collateral Materials
XsunX plans to develop a variety of collateral materials to support its sales
efforts. These items are intended to sell the Company's products and services.
Plan of Operations
XsunX anticipates the 12-month capital operational requirements of the company
to be $2,250,000 dollars. We are preparing to raise this amount through the
placement of equity capital in the form of one or more private offering's of
XsunX's shares of common stock to accredited investors. These net proceeds from
the offering of the Common Stock are estimated to be utilized as follows: (i)
approximately $718,000 will be used to pay costs associated with research and
preparation of a plan of operations by the company's technical advisory board
for the development of XsunX Process and the completion of development of a
production model for the XsunX Process, (ii) approximately $623,000 will be used
to pay salaries and general administrative costs and for intellectual property
protection, (iii) approximately $87,000 will be used to pay for testing and
development equipment, (iv) approximately $301,000 will be used to pay for
market development research, general competitive research and publicity costs,
and (v) approximately $521,000 will be used for general working capital.
The Company may change any or all of the budget categories in the execution of
its business attempts. None of the items is to be considered fixed or
unchangeable.
The Company will need substantial additional capital to support its budget. The
Company has no revenues. The Company has no committed source for any funds as of
date here. No representation is made that any funds will be available when
needed. In the event funds cannot be raised when needed, the Company may not be
able to carry out its business plan, may never achieve sales or royalty income,
and could fail in business as a result of these uncertainties.
Backlog of Orders. There are currently no orders for sales at this time.
Government Contracts. None at this time.
Competitive Conditions. Currently, the management is not aware of other products
similar to those of the company on the market. However, larger existing firms
are developing competitive products and may have extensive capital for
development work.
Company Sponsored Research and Development. No significant research is being
conducted. However, with proceeds of future capital raising, the Company plans
to engage in significant development of its technology. (See "Use of Proceeds.")
Compliance with Environmental Laws and Regulations.
--------------------------------------------------
The operations of the Company are subject to local, state and federal laws and
regulations governing environmental quality and pollution control. To date,
compliance with these regulations by the Company has had no material effect on
the Company's operations, capital, earnings, or competitive position, and the
cost of such compliance has not been material. The Company is unable to assess
or predict at this time what effect additional regulations or legislation could
have on its activities.
Number of Persons Employed. As of October 1, 2003, the Company has one full-time
Employee. Other Executive Officers and Directors work on an as needed basis.
ITEM 6. RESIGNATIONS AND APPOINTMENTS OF REGISTRANT'S OFFICERS AND DIRECTORS
Tom Anderson resigned as President and CEO effective September 30, 2003.
Tom Djokovich was appointed President and CEO of the Company effective September
30, 2003. Randy McCall and Steve Weathers will resign from the Board of
Directors effective ten days after mailing of Notice to Shareholders pursuant to
Section 14f of the Securities Exchange Act. Brian Altounian has been appointed
as Secretary and as a director effective immediately.
Tom Djokovich has been appointed as a director effective ten days after
mailing of Notice to Shareholders pursuant to Section 14f of the Securities
Exchange Act.
BRIAN ALTOUNIAN, Chairman of the Board, Secretary and Director
Mr. Altounian has over 16 years of experience in the area of finance,
administration and operations. Most recently, he served as Executive Vice
President of Plyent, Inc., a provider of a proprietary software solution that
allows dynamic wireless Web access by Web enabled wireless thin clients, such as
cell phones and personal digital assistants (PDAs). Mr. Altounian previously
served as the Vice President of Finance for Lynch Entertainment, a producer of
family television series' for the Nickelodeon and Disney Channels. While at
Lynch, he established subsidiary corporations, purchased and oversaw the
construction of a state-of-the-art television studio facility, and built the
infrastructure of the company. Prior to joining Lynch Entertainment, Mr.
Altounian held key management positions at numerous entertainment companies
including Director of Finance and Administration at Time Warner Interactive;
Finance Manager for National Geographic Television; and Manager of Business
Services for WQED, the nation's first community-owned public television station.
He also founded his own consulting company, BKA Enterprises, a firm that
supported and advised entertainment and multimedia companies in the areas of
financial and business management. Mr. Altounian holds an undergraduate degree
from UCLA and an MBA from Pepperdine University.
TOM DJOKOVICH, President and Chief Executive Officer as of September 30, 2003;
Board of Director Nominee:
Mr. Djokovich was the founder and served from 1995 to 2002 as the Chief
Executive Officer of Accesspoint Corporation, a vertically integrated provider
of electronic transaction processing and e-business solutions for merchants.
Under Mr. Djokovich's guidance, Accesspoint became a member of the
Visa/MasterCard association, the national check processing association NACHA,
and developed one of the payment industry's most diverse set of network based
transaction processing, business management and CRM systems for both Internet
and conventional points of sale. During his tenure, Accesspoint became an early
adopter of WAP based e-commerce capabilities and the industry's first certified
Level 1 Internet payment processing engine. In his last year as executive
manager, Accesspoint grew its processing revenues by over 800% and overall
revenues by nearly 300%. Prior to Accesspoint, Mr. Djokovich founded TMD
Construction and Development in 1979. TMD provided effective cost management of
multimillion-dollar projects incorporating at times hundreds of employees,
subcontractors and international material acquisitions for commercial,
industrial and custom residential construction services as a licensed building
firm in California. In 1995 Mr. Djokovich developed an early Internet based
business-to-business ordering system for the construction industry. Mr.
Djokovich also currently serves as a Director for Roaming Messenger, Inc., a
publicly reporting company that provides a breakthrough software solution for
delivering real-time actionable information for Homeland Security, emergency
response, military and enterprise applications.
2
ITEM 7. FINANCIAL STATEMENTS & EXHIBITS
Financial Statements - None.
Exhibits:
3.3 Amendment to Articles of Incorporation
10.1 Plan and Agreement of Reorganization
10.2 Abstract of Patent - 6,320,117
10.3 Abstract of Patent - 6,509,204
10.4 Abstract of Patent - 6,180,871
10.5 Assignment of Patent - 6,180,871
10.6 Assignment of Patent - 6,320,117
10.7 Assignment of Patent - 6,509,204
ITEM 8. CHANGE IN FISCAL YEAR
None
ITEM 9. REGULATION FD DISCLOSURE
THIS EXECUTIVE SUMMARY DOES NOT ITSELF CONSTITUTE A SECURITIES OR AN OFFER TO
BUY OR SELL SECURITIES. THE SECURITIES, IF ANY, DISCUSSED OR REFERENCED HEREIN
ARE NOT BEING OFFERED FOR SALE IN ANY MANNER HEREBY AND HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON ANY OF THE STATEMENTS OR MATERIAL CONTAINED IN
THIS EXECUTIVE SUMMARY. THIS EXECUTIVE SUMMARY IS NOT PART OF ANY CONFIDENTIAL
OFFERING MEMORANDUM OR PROSPECTUS.
Executive Summary
XsunX, Inc. (XsunX) has acquired a breakthrough-patented technology to produce
solar electric glass. This proprietary process is intended to allow
manufacturers to apply a transparent and photovoltaic glazing to glass and other
transparent substrates. When XsunX glazing is exposed to light, the light energy
is converted into electrical energy for use as a power source.
XsunX believes that its patented solar electric glass technology has a number of
major market opportunities in the multi-billion dollar worldwide architectural
glass markets. The company intends to take advantage of this commercial
opportunity to provide governments, developers, businesses and architects with a
commercially viable method for converting today's large areas of architectural
glass into virtual power plants.
The Solar Electric Glass Opportunity
XsunX's transparent photovoltaic glazing for glass and other materials may
provide a break-through technological innovation that will make solar energy
economically feasible and may cause the solar energy market to explode.
The Company's technology can be applied to the already quite large and
established glass and building industries. That is, transparent glazing will
enable solar energy-production to enter mainstream markets because it can
readily become integral to the designs of buildings. Builders and manufacturers
of building products already use glass, plastic and other materials, so they
will be especially attracted to the economic and marketing benefits of using the
same materials to produce electrical energy while continuing to function as
window or display surfaces. XsunX intends to be a technology leader in the field
of building integrated photovoltaics (BIPV).
Advantages Offered by Transparent Solar Cell Technology
With its unique patented solar glazing technology to produce electricity from
sunlight, XsunX believes it has no direct competition. The Company's challenge
in entering its target market segments is to demonstrate the advantages of its
transparent solar cell technology over current designs.
In the glass industry, the advantages of XsunX's transparent solar cell
technology are not only quite clear, but solar glazing technology is much
anticipated. This is especially true in the market for architectural glass,
which is why architectural glass is XsunX's best initial market.
Applications for Solar Electric Glass
While there are numerous ways to make solar cells, all of these other methods
result in a structure that is opaque. Thus, they are not appropriate for many
applications. The need to place these other cells in areas where they do not
obscure vision or building esthetics also limits installation of these other
methods to areas of exceedingly small percentages of total available building
surfaces. To date, this limiting factor has also presented Return On Investment
(ROI) inefficiencies associated with costs per kW produced versus the Balance
Of System (BOS) expenditures for mounting, wiring, power conditioning and grid
connection.
On the other hand, XsunX solar electric glass technology provides an opportunity
for up to 75% of a buildings exterior surface to produce electricity for use by
the building. Efficiencies are gained in an increase of total kW's produced
averaged across BOS expenditures providing the opportunity for a more rapid ROI.
Management believes these unique properties provide major market potential in
the following areas:
Nonresidential construction - primarily architectural glass for large
edifices, such as office buildings, hospitals, schools, retail buildings,
and industrial buildings.
Residential construction - primarily doors and windows for homes.
Business Model
The Company's management believes that the primary target opportunity for
XsunX's technology is makers and fabricators of glass. This is a very large
industry, generating worldwide revenues in the hundreds of billions of dollars.
The Company's strategy is to complete the development and commercialization of
the XsunX process, and then enter into licensing relationships with channel
partners who will manufacture and distribute products made with XsunX solar
electric glass technology.
Revenue Model
The Company's management believes that virtually all of the Company's revenues
will come from the license of its proprietary XsunX solar electric glass
technology to major manufacturers. The Company's management estimates that
manufactures of architectural glass will be willing to pay a royalty of at least
3% of gross sales for the non-exclusive right to use the XsunX process.
The XsunX Process
The Company's technique for making solar electric glass leverages two distinctly
different technologies -- amorphous solar cell process and flat panel display
process -- that have not previously been linked. By adding known processing
techniques to those commonly used in the solar industry, the Company has been
able to create and protect a structure that is both transparent and
photovoltaic. The Company believes that its XsunX Process combines the following
advantages:
It is transparent and therefore can be used in places inapplicable to
existing solar cells.
It is cost effective because it uses thin film amorphous silicon.
It may be readily manufactured because the method for manufacture uses
commercially available CVD and laser annealing equipment.
It can be used on a wide variety of substrates including low temperature
substrates.
In addition to the production of electricity the solar cell is also anticipated
to operate effectively as an optical filter.
The following chart offers key comparative analysis:
Conventional PV Solar Cells XsunX Solar Electric Glazing
-------------------------------------------------------------- ---------------------------------------------------------
Current costs of approximately $450-500/sq. meter for The anticipated method for the manufacture of XsunX
crystalline-silicon PV modules. Production process is not glazing employs the use of mass production CVD and
conducive to high volume production rates. Newer thin film annealing systems readily in use today. These methods
PV systems are anticipated to reach costs of $75-100/sq. and systems are intended to establish production line
meter and employ production methods that provide somewhat economy's that may result in per meter production costs
higher production volumes then crystalline-silicon. similar to those found for current high performance
optical films and glass coatings.
-------------------------------------------------------------- ---------------------------------------------------------
-------------------------------------------------------------- ---------------------------------------------------------
Current technology requires area related balance of system XsunX glazing is an integral part of the building glass
installation costs of $135/sq. meter. This includes the cost facade, therefore it is anticipated that installation
of mounting, land or building space and wiring. costs will be incidental aside from the expense
associated with wiring.
-------------------------------------------------------------- ---------------------------------------------------------
-------------------------------------------------------------- ---------------------------------------------------------
Power conditioning, battery storage and power inverters Similar costs associated with XsunX technology.
average $200 per peak kW.
-------------------------------------------------------------- ---------------------------------------------------------
-------------------------------------------------------------- ---------------------------------------------------------
Building area available for solar module installation Amount of potential building area available for XsunX
typically reserved to roof areas and certain facades. Sample solar electric glass installation for the same 20 story
roof panel system size at between 300-750/sq. meters for a office building at 75% of available exterior glass area
20 story building 61 meters tall and 46 meters wide. is estimated to be 8,400/sq. meters
-------------------------------------------------------------- ---------------------------------------------------------
-------------------------------------------------------------- ---------------------------------------------------------
Amount of the sun's peak energy converted to electrical Amount of the sun's peak energy converted to electrical
power by PV cells averages between 10-15% /sq. meter. power by XsunX glazing is estimated to average 1.5-2.5%
/sq. meter depending on cell filtering specifications.
-------------------------------------------------------------- ---------------------------------------------------------
-------------------------------------------------------------- ---------------------------------------------------------
Amount of peak power produced by 500/sq. meters of solar Amount of peak power produced by 8,400/sq. meters of
panels mounted to the roof of the sample 20 story building XsunX glazing applied to the glass facade of the sample
operating at 14% efficiency, 70 kW. building operating at 2% efficiency, 168 kW.
-------------------------------------------------------------- ---------------------------------------------------------
-------------------------------------------------------------- ---------------------------------------------------------
Other efficiencies include the potential for government XsunX glazing may also operate as an optical filter
sponsored credits, depreciation credits, net metering and eliminating the need for the additional use of costly
re-sale of surplus power, property improvement valuations in UV filter films and glazings applied to modern
some areas equal to 20 times the annual savings of power architectural glass facades. This dual benefit feature
produced. (XsunX glazing also enjoys these same benefits.) provides construction cost credits that may be factored
in to reduce XsunX costs.
-------------------------------------------------------------- ---------------------------------------------------------
The Market
According to the U.S. DOE, Photovoltaics is a billion dollar a year industry and
is expected to grow at a rate in excess of 15-20% per year over the next several
decades. In the last thirty years, the cost per watt produced by solar electric
technology has dropped by over 90% and efficiency rates have steadily grown.
Today, the amortized costs over a fifteen-year period of new thin film solar
cells are estimated to achieve cost rates equal to $0.08-0.11/kWh. Over this
same period, the cost per watt for fossil fuel based electrical power may
continue to rise and become ever increasingly susceptible to political and
domestic uncertainty.
The market for Photovoltaics will continue to grow into the billions. The market
for architectural glass, optical films and glazings are collectively in the
billions and the markets for energy are infinitely larger. XsunX solar electric
glazing spans and works to interconnect these markets opening innovative new
product and revenue opportunities for these industries and XsunX.
Value Proposition
The XsunX value proposition is simple: The source of commercially viable, solar
electric glass providing users with substantial economic and environmental
benefits.
XsunX technology fills the voids in today's solar technologies allowing the
production of solar electricity to become part of our environment as a natural
use of space and makes more sense out of how we control our environments and
draw the most from them.
Financial Plan
XsunX is raising equity capital through a private offering of the Company's
shares of common stock to accredited investors (the "Offering"). The proceeds of
the Offering will be used to complete the commercial development of the XsunX
technology, establish infrastructure and undertake preliminary marketing and
selling efforts. The Offering is being conducted under an exemption from
registration set forth in Rule 506 of Regulation D for federal securities law
purposes. The Offering is described in the Company's Private Placement
Memorandum.
Additional documents available: The purpose of this summary is to provide an
outline of the XsunX opportunity. As this is a new application environment and
solution, outside of conventional experience and application, more detailed
information may be necessary for a full review and understanding of the
opportunity. The following are available for review:
o Confidential Offering Memorandum]
o The company web site at www.xsunx.com
Safe Harbor Statement: Matters discussed in the foregoing executive summary
contain forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. When used in summary, the words "anticipate,"
"believe," "estimate," "may," "intend," "expect", "potential" and similar
expressions identify such forward-looking statements. Actual results,
performance or achievements could differ materially from those contemplated,
expressed or implied by the forward-looking statements contained herein. These
forward-looking statements are based largely on the expectations of the Company
and are subject to a number of risks and uncertainties. These include, but are
not limited to, risks and uncertainties associated with: the impact of economic,
competitive and other factors affecting the Company and its operations, markets,
product, and distributor performance, the impact on the national and local
economies resulting from terrorist actions, and U.S. actions subsequently; and
other factors detailed in reports filed by the Company. Readers should carefully
review the factors described in other documents the Company files from time to
time with the Securities and Exchange Commission, including the Quarterly
Reports on Form 10-QSB filed by the Company in 2003 and any Current Reports on
Form 8-K filed by the Company. Statistics and comparative analysis charts
contained in this summary express certain industry estimates and statements and
are subject to the diversity of manufacturing, sales and physical aspects of
solar module production and installation. Readers are cautioned not to place
undue reliance on these forward-looking statements, which reflect management's
analysis only as of the date hereof. This document contains confidential and
proprietary information belonging exclusively to XsunX, Inc. and may not be
duplicated.
ITEM 10. AMENDMENTS TO THE REGISTRANT'S CODE OF ETHICS, OR WAIVER OF A PROVI-
SION OF THE CODE OF ETHICS
None.
ITEM 11. TEMPORARY SUSPENSION OF TRADING UNDER REGISTRANT'S EMPLOYEE BENEFIT
PLANS
None.
ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITIONS
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: October 15, 2003
XSUNX, INC.
By: /s/ Tom Djokovich
--------------------------------
Tom Djokovich, CEO/President