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XsunX is in the right
place at the right time with its Power Glass™ solar cell system as the power industry
is trending toward renewable energy, with governments and the business sectors in the
U.S., Europe and Asia recognizing the need for change
Consumer Goods
Rubber & Plastics
(XSNX.OB)
XsunX Inc.
65 Enterprise
Aliso Viejo, CA 92656
Phone: 949-330-8060
Tom M. Djokovich
President, CEO, CFO and
Principal Accounting Officer
Interview conducted by:
Walter Banks, Publisher
CEOCFOinterviews.com
April 20, 2006
BIO:
Tom Djokovich is the president and chief executive officer of XsunX. He previously founded
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. Prior to Accesspoint, Mr. Djokovich founded TMD Construction and Development in
1979. TMD provided management for 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.
Company Profile:
Based in Aliso Viejo, California, XsunX is the developer of Power Glass - an innovative
thin film building-integrated photovoltaic solar technology that allows glass windows to
produce electricity from the power of the sun. This proprietary process is intended to
allow manufacturers to apply a thin film transparent and photovoltaic glazing to glass and
other transparent substrates. When XsunX films are exposed to light, the light energy is
converted into electrical energy for use as a power source. XsunX believes that its solar
electric glazing technology has a number of major market opportunities in the worldwide
architectural glass, optical film and plastics markets.
CEOCFO: Mr. Djokovich, please give us a brief look at your
background and how you came to be a part of XsunX?
Mr. Djokovich: “My background is one of a building
developer here in California since 1979. Back in the mid-1990s I became involved in the
development of software technologies related to the building industry. As that business
matured, we progressed into the development of financial transaction processing
technologies, and eventually, I helped manage our transition into a public company;
gaining some experience in that regard. Back in September 2003, I was approached by
several investors of XsunX and asked if I would be interested in managing the
reorganization of the Company and its new business effort in the development and
commercialization of a semitransparent solar cell. I looked at the opportunity and chose
to sign on, and in October of 2003, I took over as CEO. Thereafter, I was in charge of
moving the company forward and I spent the first six months trying to determine how to
finance the product development and how to build out the project and commercialize the
technology. Hence, that is how I got involved in the early stage of the reorganized
company.”
CEOCFO: What is the ultimate goal for your semitransparent
solar cell product; how will it be used and applied?
Mr. Djokovich: “The business of XsunX is the development
of new kinds of solar cells, using what is called thin-film technology. Typically,
thin-film is composed of extremely thin layers of semiconductor material that resemble a
film and are used to create a solar cell. The thin-filmed solar cells that we are
developing range from ½ micron to 1.5 microns thick. Conventional solar cells, the
silicon solar cells that hold over 90 percent of the marketplace right now, are between
300 to 400 microns thick and there is a silicon shortage associated in the production of
those solar cells. The consensus of the marketplace is that thin films hold a promising
future to enable the production of inexpensive solar cells that produce electricity and
offer an opportunity to displace silicon wafer technology. We saw this as an opportunity
to use thin-film technology to come up with new kinds of applications for the use of solar
cells, and we thought the Power Glass™ technology would be ideal for designing a
thin-film solar cell for applications on architectural glass facades.
The semi-transparency of our solar cell design lets it be laminated into a glass assembly,
while allowing the glass assembly to continue to function as a window. The finished
product will look like a tinted window, but when the sun shines through it, it will
produce electricity for the building. This is a new product application called
building-integrated photovoltaics, which means converting sunlight into electricity; where
the power producing properties are integrated into building materials. We saw that as a
potentially tremendous opportunity, because instead of just trying to develop a better
solar cell, we thought that we should invent a solar cell with more diverse applications.
In that diversity and increased use may be where the real potential for wide-scale
adoption lie. Therefore, our goal is to develop solar-cell technologies that provide new
kinds of diverse use applications, outside of the normal rooftop solar-cell application.
To that end, our business is the development of these solar cells and the manufacturing
process required for their production. What we intend do then, in terms of our
deliverables and revenues, is to license our solar-cell designs and manufacturing
technologies to manufacturers. We also intend to collect royalties based on the films that
are produced. Further, we plan to market our technologies internationally, to potential
manufacturers in just about every region.”
CEOCFO: Who are your customers and what are some of their
applications?
Mr. Djokovich: “Our target customers are typically going
to be glass companies, plastics, thin-film manufacturers, new start-up and existing solar
product manufacturing companies. We are receiving inquiries from companies that see the
renewable energy and building-integrated photovoltaics sector as a growing opportunity,
with a long and strong potential. These are people developing business plans and financing
those plans; looking to go out and build their own infrastructure and capacity to build
and sell solar cells and products that incorporate solar cell technology.
Our Power Glass™ product produces approximately four watts of power per square foot.
That is less than a conventional solar cell, but we are letting the sunlight pass through;
it is semitransparent and not capturing all of the light and turning it into electricity
as a conventional solar cell does. In that regard, at about four percent efficiency with
four watts per foot, we really think that this will be most ideally suited for commercial,
industrial and agricultural types of applications. In most homes, only about 20 percent of
the floor area is glass and you would be lucky if 1/2 or 1/3 of that is situated correctly
towards the sun. Therefore, we do not see immediate potential for a residential
application, but there may be one that grows in the future, based on the increased use of
glass. This potential exists because everything is based on energy calculations and the
more efficient a home is, the more glass you can put in it. Hence, by turning your glass
area into an energy- producing material, you are increasing the efficiency of the
building. This leaves us with the potential that several years from now that we could see
the substantial increase of the use of glass in residential structures, specifically for
the purpose of using Power Glass™ films.”
CEOCFO: So there is a big enough commercial and industrial
market for you to do quite well.
Mr. Djokovich: “There is a huge market for architectural
glass. When you look at the average skyline in any city, the majority of buildings have
glass façades and that trend is increasing. In fact, in the European market, there are
entire structures that are made out of glass – the roof, walls, everything –
and they have been trying to incorporate solar or
photovoltaics electrical- producing properties into all of those surfaces. In China, the
government recently passed a green building initiative that will cause virtually all of China’s
newly constructed buildings to incorporate energy efficiencies and renewable
technologies.”
CEOCFO: And you see yourself doing business worldwide?
Mr. Djokovich: “We see ourselves very much as an
international enterprise. Solar, and other renewables, were once commonly referred to as
“alternative energy” sources. This name style, suggesting that wind or solar was
an energy source of last resort, is changing rapidly as global demand for electrical power
has pulled the use of solar technologies into the mainstream plans of governments,
businesses and individuals. With demand for solar products growing at unprecedented rates
and the potential for thin films to provide an inexpensive source to fill this demand, we
believe that XsunX is very much a part of an international opportunity.”
CEOCFO: How will your product make an impact, where others
before you have been washed to the side?
Mr. Djokovich: “The entire trend in the power industry
is really changing in that there is a realization for the need to diversify. This is
occurring domestically and internationally at the government, business and private user
levels. I think that there is a sense of awareness that the existing fossil- fuel
technologies that are used to produce the majority of our power are becoming subject to
increased competitive pricing, security issues and supply shortages. On top of this, one
of the most important aspects to realize is the actual production of electricity is being
outpaced by demand. The conventional means of power production are not keeping pace with
the growing demand and the reasons for that are many fold. Here in the United States,
energy production is regulated to death; no one wants a new power plant in his or her
backyard and it is a situation where literally producing enough electricity to keep up
with demand is being outpaced. Internationally, it is even more challenging, with China
and India experiencing phenomenal growth in per-capita kilowatt-hour usage. Therefore,
they can’t produce enough electricity to meet those demands and they have to decide
if they are going to invest in antiquated technologies, which use fuels that are becoming
increasingly more difficult to get and more costly, or do they invest in a future
technology that can offset supply shortages and future costs of production.
What I like to tell people is that back when Hoover
Dam was built, there was an argument over the decision to build a dam in the middle of the
desert. However, without a Hoover Dam there would not be a Southern California or an Arizona
and the Southwest would not have been built. An investment was made in a technology and a
potential that has been paying off for about 70 years. The same applies to renewable
technologies; investments made today have an opportunity to continue to repay 30 to 40
years into the future and even more. There will also be a tremendous cost savings there,
both on a societal basis and economically. A lot of studies are starting to come out to
show that there are more benefits to the use of renewables than just using their current
per-watt cost to analyze whether they are competitive or not. We see this as an industry
that is just in its infancy, and through government, individual and industry awareness, we
see this industry growing phenomenally, and not just for us, but also for a number of
players in this sector. Therefore, it is not going to be just our technology that we think
that causes the change. We think that within the industry there needs to be a change and
we’re coming up with intelligent products to meet that demand.”
CEOCFO: How will politicians and lobbyist affect the growth
of this industry?
Mr. Djokovich: “I believe that our President placed the
future of energy policy making in the laps of every U.S. politician when during his recent
state of the union address he pointed out that the U.S. has to ‘wean itself from oil
dependency.’ There will always be a need for politicians to cater to their
constituents. As long as we turn on the switch, it was inexpensive to do so, and I could
always depend on my lights coming on, I would not have a problem. However, when
politicians start to get pressure from their constituency, then they have to start
weighing whether they bend to the lobbyist on the power-producing side or worry about
where they are going to get the rest of their votes. The realities are that here in the U.S.,
we still have a number of years to go before all 50 states will recognize this need. On an
international basis the time is right now. In China and India alone, there is tremendous
opportunity. You can also include the European markets.”
CEOCFO: How close are you to getting your product to the
market and do you have the funds to continue your growth and building out your business?
Mr. Djokovich: “In our most recent annual filings we had
a projected plan of operations for 2006 that required $4.5 million and we have that money.
Therefore, our plan of operations is funded, so for the near future, in terms of the 2006
operational year, we are covered. We feel comfortable that those funds are going to take
us through into revenue recognition. To answer the first part of your question, we plan to
begin marketing efforts here in the United States this spring. We will start marketing
licenses to our thin-film technologies. We intend to first respond to all of the inquiries
that we have received. We anticipate that 2006 will be a year that we transition from pure
R&D into revenue generation.”
CEOCFO: Do you have any closing comments for potential
investors who are looking at your company?
Mr. Djokovich: “The first thing that I would strongly
suggest to any potential investor is to please go to the SEC website; if you don’t
know how to get there you can go to our website at www.xsunx.com and go to the investor
section where we have a link to the SEC website. Once at the SEC website you should review
our filing. We are current on our filings; we have very important and salient information
there. Secondly, they should read our press releases to see what kind of progress we have
had; we try to come out at least once a month with indications of how we are doing in
research and development. Lastly, they should look at what they see happening in the
energy markets; both in their energy bills and what they see in general, what they see in
the news and what the president may be saying. In addition, what they see in the general
marketplace and how they think the competition for power is going to potentially increase
in the next three to five years with the growth in the ‘third world’ regions,
such as China and India. Therefore, all of those would be important considerations before
you invest in our company or any renewable company.”
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