FORM 10-QSB
SECURITIES EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For Quarter Ended March 31, 2005
Commission file number: 000-29621
XSUNX, INC.
---------------
(Exact name of registrant as specified in its charter)
Colorado 84-1384159
------------------------ ------------------
(State of incorporation) (I.R.S. Employer Identification No.)
65 Enterprise, Aliso Viejo, CA 92656
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (949) 330-8060
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: None Name of each exchange on which registered: N/A
Securities registered pursuant to Section 12(g) of the Act:
Title of each class: None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to the filing
requirements for at least the past 90 days. Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
As of May 13, 2005 the number of shares outstanding of the registrant's only
class of common stock was 120,996,239
Transitional Small Business Disclosure Format (check one): Yes [_] No [X]
Table of Contents
PART I - FINANCIAL INFORMATION
PAGE
Item 1. Condensed Consolidated Financial Statements
Independent Auditor's Report............................................................ F-1
Balance Sheets March 31, 2005 (unaudited) and September 30, 2004........................ F-2
Statements of Operations for the Three Months and Six Months ended
March 31, 2005 and 2004 (unaudited) and the period February 25, 1997
(inception) to March 31, 2005........................................................... F-3
Statements of Stockholders Equity for the period February 25, 1997
(inception) to March 31, 2005 unaudited)................................................ F-4
Statements of Cash Flows for the Six Months ended March 31, 2005 and
2004 (unaudited) and the period February 27, 1997 (inception) to March
31, 2005................................................................................ F-5
Notes to Condensed Consolidated Financial Statements (Unaudited)........................ F-6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations... 4
Item 3 Controls and Procedures................................................................. 7
PART II - OTHER INFORMATION
Item 1. Legal Proceedings....................................................................... 7
Item 2. Changes in Securities................................................................... 7
Item 3. Defaults upon Senior Securities......................................................... 8
Item 4. Submission of Matters to a Vote of Security Holders..................................... 8
Item 5. Other Information....................................................................... 8
Item 6. Exhibits and Reports on Form 8-K........................................................ 8
Signatures....................................................................................... 9
2
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
XSUNX
(AN DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
SIX-MONTHS ENDED March 31, 2005
(UNAUDITED)
3
XSUNX, INC.
(Formerly Sun River Mining, Inc.)
(A Development Stage Company)
Balance Sheets
(Unaudited)
March 31, September 30,
2005 2004
----------------- -----------------
ASSETS:
Current assets:
Cash $ 155,471 $ 37,344
Prepaid Expenses 17,143 20,000
----------------- -----------------
Total current assets 172,614 57,344
----------------- -----------------
Fixed assets:
Office Equipment (Net) 2,270 2,270
R&D Equipment 173,000 -
----------------- -----------------
Total fixed assets 175,270 2,270
----------------- -----------------
Other assets:
Patents 10,000 10,000
Deposit - Lease - 2,500
----------------- -----------------
Total other assets 10,000 12,500
----------------- -----------------
TOTAL ASSETS $ 357,884 $ 72,114
================= =================
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Accounts Payable $ 236,270 $ 89,030
Accrued Expenses 532 5,908
Notes Payable - 1,225
----------------- -----------------
Total current liabilities 236,802 96,163
----------------- -----------------
Stockholders' Equity:
Preferred Stock, par value $0.01 per share; 50,000,000
shares authorized; no shares issued and outstanding - -
Common Stock, no par value; 500,000,000 shares authorized;
120,544,239 shares issued and outstanding at March 31,
2005 and 114,036,102 outstanding at September 30, 2004 3,619,531 3,104,396
Common stock warrants 1,200,000 1,200,000
Deficit accumulated during the exploratory stage (4,698,449) (4,328,445)
----------------- -----------------
Total stockholders' profit (deficit) 121,082 (24,049)
----------------- -----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 357,884 $ 72,114
================= =================
See Accountants Review Report
F-1
XSUNX, INC.
(Formerly Sun River Mining, Inc.)
(A Development Stage Company)
Consolidated Statements of Operations
(Unaudited)
Feb. 25, 1997
Three-Months Ended Six-Months Ended (Inception) to
March 31, March 31, March 31,
------------------------------ ---------------------------
2005 2004 2005 2004 2005
------------ ------------ ---------- ---------- -------------
Revenue $ - $ - $ -
Expenses:
Abandoned Equipment - - - - 808
Advertising 550 - 2,410 - 2,410
Bank Charges 111 62 301 62 2,414
Consulting - - - - 1,024,039
Contract R&D 114,439 12,850 213,336 12,850 342,829
Depreciation - - - - 3,178
Directors' Fees - - - - 11,983
Due Diligence - - - - 45,832
Equipment Rental - - - - 1,733
Impairment loss - - - - 923,834
Legal & Accounting 9,509 9,999 18,633 15,345 206,993
Licenses & Fees 25 - 25 - 6,435
Meals & Entertainment - - - 112 4,119
Office Expenses 1,143 138 2,548 2,759 21,747
Salaries 38,227 37,500 79,112 65,000 579,198
Postage & Shipping 298 158 472 302 3,689
Printing 463 5 502 134 6,082
Public Relations 32,037 375 39,226 840 150,192
Rent 2,250 2,268 3,750 5,173 20,713
Taxes - - - 4,657
Telephone 1,329 902 2,333 1,543 37,148
Transfer Agent Expense 1,335 250 3,094 1,800 19,419
Travel 3,719 - 4,680 222 67,613
Warrant Option Expense - - - - 1,200,000
------------ ------------ ---------- ---------- -------------
Total Operating Expenses 205,435 64,507 370,422 106,142 4,687,065
------------ ------------ ---------- ---------- -------------
Other Income (Expense)
Interest Expense - - 71,597
Interest Income - - (22)
Returned Merchandise (320) - (418) - (418)
Forgiveness of Debt - - (59,773)
------------ ------------ ---------- ---------- -------------
Net (Loss) $ (205,115) $ (64,507) $(370,004) $(106,142) $ (4,698,449)
------------ ------------ ---------- ---------- -------------
Per Share Information:
Weighted average number of
common shares outstanding 120,544,239 111,248,148
------------ ------------
Net Loss per Common Share * *
------------ ------------
* Less than $.01
See Accountants Review Report
F-2
XSUNX, INC.
(Formerly Sun River Mining, Inc.)
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
Indirect Method
Feb. 25, 1997
Six-Months Ended (Inception) to
March 31, March 31,
2005 2004 2005
-------------- -------------- -----------------
Cash Flows from Operating Activities:
Net Loss $(370,004) $(106,142) $ (4,698,449)
Adjustments to reconcile net loss to cash used in
operating activities:
Issuance of Common Stock for Services 24,000 - 1,261,557
Issuance of Common Stock Warrants - - 1,200,000
(Increase) Decrease in Deposits - (1,500) -
(Increase) in Stock Subscriptions Receivable - (4,653) -
(Increase) Decrease in Prepaid Expense 2,857 - (17,143)
Increase (Decrease) in Accrued Expenses (5,376) 65,000 532
Increase in Accounts Payable 147,290 18,317 236,270
-------------- -------------- -----------------
Net Cash Flows Used for Operating Activities (201,233) (28,978) (2,017,233)
-------------- -------------- -----------------
Cash Flows from Investing Activities:
Purchase of Fixed Asset (173,000) - (175,270)
Purchase of Intangible Assets - - (10,000)
-------------- -------------- -----------------
Net Cash Flows Used for Investing Activities (173,000) - (185,270)
-------------- -------------- -----------------
Cash Flows from Financing Activities:
Payments to Notes Payable 1,225 - 1,225
Proceeds from Notes Payable - 10,400 -
Issuance of Common Stock 491,135 21,071 2,356,749
-------------- -------------- -----------------
Net Cash Flows Provided by Financing Activities 492,360 31,471 2,357,974
-------------- -------------- -----------------
Net Increase (Decrease) in Cash 118,127 2,493 155,471
-------------- -------------- -----------------
Cash and cash equivalents - Beginning of period 37,344 - -
-------------- -------------- -----------------
Cash and cash equivalents - End of period $ 155,471 $ 2,493 $ 155,471
============== ============== =================
Supplemental Disclosure of Cash Flow Information
Cash Paid During the Year for:
Interest $ - $ - $ 71,346
============== ============== =================
Income Taxes $ - $ - $ -
============== ============== =================
NON-CASH TRANSACTIONS
Common stock issued in exchange for services $ 24,000 $ - $1,261,557
============== ============== =================
See Accountants Review Report
F-3
XSUNX, INC.
(Formerly Sun River Mining, Inc.)
(A Development Stage Company)
Consolidated Statement of Stockholders' Equity (Deficit)
March 31, 2005
(Unaudited)
Deficit
Accumulated
Common During the
Common Stock Stock Exploration
# of Shares Amount Warrants Stage Totals
--------------- -------------- --------------- --------------- -------------
Balance - September 30, 1999 753,148 $1,894,419 $ - $(2,475,441) $ (581,022)
--------------- -------------- --------------- --------------- -------------
Issuance of stock for cash 15,000 27,000 - - 27,000
Net Loss for year - - - (118,369) (118,369)
Balance - September 30, 2000 768,148 1,921,419 - (2,593,810) (672,391)
--------------- -------------- --------------- --------------- -------------
Extinquishment of debt - 337,887 - - 337,887
Net Loss for year - - - (32,402) (32,402)
--------------- -------------- --------------- --------------- -------------
Balance - September 30, 2001 768,148 2,259,306 - (2,626,212) (366,906)
--------------- -------------- --------------- --------------- -------------
Net Loss for year - - - (47,297) (47,297)
--------------- -------------- --------------- --------------- -------------
Balance - September 30, 2002 768,148 2,259,306 - (2,673,509) (414,203)
--------------- -------------- --------------- --------------- -------------
Issuance of stock for Assets 70,000,000 3 - - 3
Issuance of stock for Cash 9,000,000 225,450 - - 225,450
Issuance of stock for Debt 115,000 121,828 - - 121,828
Issuance of stock for Accruals 115,000 89,939 - - 89,939
Issuance of stock for Services 31,300,000 125,200 - - 125,200
Net Loss for year - - - (145,868) (145,868)
--------------- -------------- --------------- --------------- -------------
Balance - September 30, 2003 111,298,148 2,821,726 - (2,819,377) 2,349
--------------- -------------- --------------- --------------- -------------
Issuance of stock for cash 181,750 21,071 - - 21,071
Issuance of stock for cash 217,450 22,598 - - 22,598
Issuance of stock for cash 254,956 34,669 - - 34,669
Issuance of stock for cash 694,649 96,306 - - 96,306
Issuance of stock for cash 157,649 21,421 - - 21,421
Issuance of stock for cash 57,000 5,133 - - 5,133
Issuance of stock for cash 1,174,500 81,472 - - 81,472
Issuance of stock for warrants - - 1,200,000 - 1,200,000
Net Loss for year - - - (1,509,068) (1,509,068)
--------------- -------------- --------------- --------------- -------------
Balance - September 30, 2004 114,036,102 3,104,396 1,200,000 (4,328,445) (24,049)
--------------- -------------- --------------- --------------- -------------
Issuance of stock for cash 5,907,537 471,068 - - 471,068
Issuance of stock for cash 300,600 20,067 - - 20,067
Issuance of stock for services 300,000 24,000 - - 24,000
Net Loss for Period - - - (370,004) (370,004)
--------------- -------------- --------------- --------------- -------------
Balance - March 31, 2005 120,544,239 $3,619,531 $ 1,200,000 $(4,698,449) $121,082
=============== ============== =============== =============== =============
All shares have been adjusted for the 1 for
20 reverse split.
See Accountants Review Report
F-4
XSUNX, INC.
(FORMERLY SUN RIVER MINING, INC.)
Notes to Financial Statements
March 31, 2005
(Unaudited)
Note 1 - Presentation of Interim Information:
In the opinion of the management of XSUNX, Inc., the accompanying unaudited
financial statements include all normal adjustments considered necessary to
present fairly the financial position as of March 31, 2005 and the results of
operations for the three and six-months ended March 31, 2005 and 2004 and for
the period February 25, 1997 (inception) to March 31, 2005, and cash flows for
the six-months ended March 31, 2005 and 2004 and the for the period February 25,
1997 (inception) to March 31, 2005. Interim results are not necessarily
indicative of results for a full year.
The financial statements and notes are presented as permitted by Form 10-Q, and
do not contain certain information included in the Company's audited financial
statements and notes for the fiscal year ended September 30, 2004.
Note 2 - Going Concern:
The Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business.
The Company is in the exploration state and has not earned any revenue from
operations. The Company's ability to continue as a going concern is dependent
upon its ability to develop additional sources of capital or locate a merger
candidate and ultimately, achieve profitable operations. The accompanying
financial statements do not include any adjustments that might result from the
outcome of these uncertainties. Management is seeking new capital to revitalize
the Company.
F-5
Item 2. MANAGEMENT'S DISCUSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
CAUTIONARY AND FORWARD LOOKING STATEMENTS
In addition to statements of historical fact, this Form 10-KSB contains
forward-looking statements. The presentation of future aspects of XsunX, Inc.
("XsunX", the "Company" or "issuer") 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. 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.
These forward-looking statements are subject to numerous assumptions,
risks and uncertainties that may cause XsunX's actual results to be materially
different from any future results expressed or implied by XsunX in those
statements. Important facts that could prevent XsunX from achieving any stated
goals include, but are not limited to, the following:
Some of these risks might include, but are not limited to, the
following:
(a) volatility or decline of the Company's stock price;
(b) potential fluctuation in quarterly results;
(c) failure of the Company to earn revenues or profits;
(d) inadequate capital to continue or expand its business, inability to
raise additional capital or financing to implement its business
plans;
(e) failure to commercialize its technology or to make sales;
(f) rapid and significant changes in markets;
(g) litigation with or legal claims and allegations by outside parties;
(h) insufficient revenues to cover operating costs.
There is no assurance that the Company will be profitable, the Company
may not be able to successfully develop, manage or market its products and
services, the Company may not be able to attract or retain qualified executives
and technology personnel, the Company's products and services may become
obsolete, government regulation may hinder the Company's business, additional
dilution in outstanding stock ownership may be incurred due to the issuance of
more shares, warrants and stock options, or the exercise of warrants and stock
options, and other risks inherent in the Company's businesses.
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 and Annual Reports on
Form 10-KSB filed by the Company and any Current Reports on Form 8-K filed by
the Company.
4
CURRENT OVERVIEW
XsunX, Inc. is developing Power Glass(TM) - an innovative solar
technology that is intended to allow glass windows to produce electricity from
the power of the sun. This process for producing electricity is known as
Photovoltaics. Photovoltaic ("PV") is the science of capturing and converting
solar energy into electricity.
Using patented solar cell design and manufacturing processes, the
Company is focused on the development of very thin semi-transparent coatings on
thin-film flexible plastics that create large area monolithic solar cell
structures that you can see through. This semi-transparency makes Power
Glass(TM) glazing desirable for placing over glass, plastics, and other
see-through structures.
The Company's strategy is to complete the development and
commercialization of its Power Glass(TM) process and enter into licensing
agreements with channel partners who will manufacture and distribute products
made with the XsunX solar electric glass technology. In this manner, it is
anticipated that glass manufactures will incorporate the Power Glass(TM)
technology into their manufacturing process as an "original equipment
manufacturer" (OEM) and sell the finished product to their consumers.
For the period ended March 31, 2005, the Company had and continues to
focus on the development and refinement of commercially appealing solar cell
designs, proprietary manufacturing processes and facilities design that could be
provided to our future licensees as turn-key solutions for the mass production
of Power Glass(TM) films. A large part of the Company's investment capital is
used for product development. However, this may begin to shift towards
marketing, sales, and business development in this new fiscal year ending
September 30, 2005.
The Company continues to do research to develop the XsunX Power
Glass(TM) process for future commercial applications. Areas of current process
development include:
(a) Process development on thin-film sheet and rolled polymers and
plastics
(b) Characterize efficiency and transparency vs. thickness -
curves for applications
(c) Engineer the integration of reel-to-reel and laser scribing
process into manufacturing devices
In conjunction with on going R&D efforts the Company is talking with
various manufactures to assist in the development of specific applications,
processes and manufacturing requirements.
The Company intends to continue to make investments in the commercial
development of its patents and evolving technologies through the course of the
next year. To finance these development efforts we are currently engaged in on
going capital formation efforts to fund the Company's projected deficits for
development costs in the current year. The Company intends to continue to
fulfill its working capital requirements through the sale of Common Stock. A
majority of the investment proceeds will be allocated for the commercial
development of its Power Glass(TM) product line.
Management believes the summary data presented herein is a fair
presentation of the Company's results of operations for the periods presented.
Due to the Company's change in primary business focus in October 2003 and new
business opportunities these historical results may not necessarily be
indicative of results to be expected for any future period. As such, future
results of the Company may differ significantly from previous periods.
Results of Operations for the Three-Month Period Ended March 31, 2005 Compared
to the Same Period in 2004
The Company had no revenues in the quarter ended March 31, 2005 as well
as for the same period in 2004.
The Company incurred operating expenses totaling $205,435 for the three
months ending March 31, 2005 compared to $64,507 for the same period in 2004, a
314% increase. The major components for the increase to operating expense of
$140,928 include: an increase of $101,589 in contract research and development
activities, an increase of $32,037 in public relations activities, and an
5
increase to travel expenses of $3,719. In the same quarter 2004 research and
development expenses were only $12,850, public relations costs were $375, and
travel expenses were $0.
The loss per share in the quarter ending March 31, 2005 and the same
period in 2004 was nominal. The Company expects the trend of accelerated losses
to continue in the future until the Company achieves commercialization of its
technology and revenues commence, of which there is no assurance.
Results of Operations for the Six-Month Period Ended March 31, 2005 Compared to
the Same Period in 2004
The Company generated no revenues in the period ended March 31, 2005 as
well as for the same period in 2004.
The Company incurred operating expenses totaling $370,422 for the six
months ending March 31, 2005 compared to $106,142 for the same period in 2004, a
286% increase. The major components for the increase to operating expense of
$264,280 include: an increase of $200,486 in research and development
activities, an increase of $38,386 in public relations, a $14,112 increase in
salary expense, and an increase to travel expenses of $3,719. These expenses are
anticipated to continue to increase as the Company continues the development of
the Company's new business plan as the developer and provider of
semi-transparent solar electric glazing technologies.
The net loss for the six months ending March 3, 2005 was ($370,004) as
compared to a net loss of ($106,142) for the same period 2004. The loss per
share was nominal for the period in 2005 and 2004.
Liquidity and Capital Resources
The Company had cash at March 31, 2005 of $155,471 and prepaid expenses
in the amount of $17,143 as compared to cash of $37,344 and prepaid expenses in
the amount of $20,000 as of September 30, 2004. The Company had a net working
capital (deficit) of ($64,188) as compared to a working capital (deficit) of
($38,819) at September 30, 2004.
Cash flows used in operating activities during the six-month period
ended, March 31, 2005, was ($201,233) as compared to using ($28,978) for the
same period 2004. Cash flow used in investing activities was ($173,000) for the
six months ended March 31, 2005 as compared to cash used in investing activities
of ($0) during the six months ended March 31, 2004. Cash flow provided by
financing activities was $492,360 for the six months ended March 31, 2005 as
compared to cash provided by financing activities of $31,471 during the six
months ended March 31, 2004.
For the six-months ended March 31, 2005, the Company's capital needs
have been met from the proceeds of a series of private placements of Common
Stock made by the Company. The Company completed private placements of its
common stock pursuant to Regulation S totaling $491,134.97 in the quarter ended
March 31, 2005 as compared to $31,471 for the same period 2004. The proceeds
from the above sales of unregistered securities were used primarily to fund the
research and developments efforts and day-to-day operations of the Company and
to pay the accrued liabilities associated with these operations.
We had, at March 31, 2005, cash and cash equivalents of $155,471 and
net working capital (deficit) of ($64,188). We anticipate that there will not be
sufficient cash generated from operations in the current year necessary to fund
our current and anticipated cash requirements. The Company is currently engaged
in efforts to obtain additional financing from equity and debt placements.
6
NEED FOR ADDITIONAL FINANCING
The Company anticipates that there will be no cash generated from
operations in the current year necessary to fund its anticipated cash
requirements. The Company has incurred operating deficits since its
reorganization in October 2003, which are expected to continue until its new
business model is fully developed. Accordingly, the Company is dependent on
raising additional capital necessary to meet the Company's cash needs for
Research, Development, General and Administrative expenses including the costs
of compliance with the continuing reporting requirements of the Securities
Exchange Act of 1934.
The Company has been able to raise capital in a series of equity and
debt offerings in the past and is actively pursuing additional financing in the
form of loans or equity placements to cover on going cash needs. There can be no
assurances that the Company will be able to obtain such additional financing, on
terms acceptable to it and at the times required, or at all. Lack of capital may
be a sufficient impediment to prevent it from accomplishing the goal of
commercializing a licensable process for the manufacture of semi-transparent
solar electric glazing technologies.
Irrespective of whether the Company's cash assets prove to be
inadequate to meet the Company's operational needs, the Company might seek to
compensate providers of services by issuances of stock in lieu of cash.
GOING CONCERN
The Company is in the development stage and as of the period ending
March 31, 2005, did not have any products for sale, and had not generated any
revenue from sales or other operating activities. To date the Company's
principal source of liquidity has been the private placement of equity
securities and the issuance of notes payable. As such, the Company's ability to
secure additional financing on a timely basis is critical to its ability to stay
in business and to pursue planned operational activities.
Based on the foregoing and the Company's history of losses, the
Company's financial statements for the six-month period ended March 31, 2005
include a going concern opinion from its outside auditors, which stated there
"is substantial doubt" about our ability to continue operating as a "going
concern."
Item 3. CONTROLS AND PROCEDURES
The Company's Chief Executive Officer and Chairman have evaluated the
effectiveness of the Company's disclosure controls and procedures (as defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
amended) as of the end of the period covered by this quarterly report and, based
on this evaluation, have concluded that the disclosure controls and procedures
are effective.
There have been no changes in the Company's internal control over
financial reporting that occurred during the Company's first fiscal quarter that
has materially affected, or is reasonably likely to materially affect, the
Company's internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings - None.
Item 2. Changes in securities -
In a private placement of the Company's common stock pursuant to
Regulation S of the Act on or about January 3, 2005 the Company accepted an
7
offer for the sale of 66,600 shares at a price of $.0944 per share, which raised
gross proceeds of $6,284.25. This offer and sale was completed on January 3,
2005.
On or about February 4, 2005 the Company issued 300,000 shares of
common stock pursuant to Rule 144 of the Act to 1 consultant as compensation for
seven months of services to be rendered to the company. The shares were valued
at the market price of the Company's common stock at the time of issuance which
was $0.08 per share for a total compensated value of $24,000.00.
In a private placement of the Company's common stock pursuant to
Regulation S of the Act on or about February 19, 2005, the Company accepted an
offer for the sale of 234,000 shares at a price of $.0589 per share, which
raised gross proceeds of $13,782.60. This offer and sale was completed on
February 19, 2005.
In a private placement of the Company's common stock pursuant to
Regulation S of the Act on or about April 1, 2005, the Company accepted an offer
for the sale of 327,000 shares at a price of $.0764 per share, which raised
gross proceeds of $24,980. This offer and sale was completed on April 1, 2005.
On or about May 5, 2005 the Company issued 125,000 shares of common
stock pursuant to Rule 144 of the Act to 1 consultant as compensation for three
months of services to be rendered to the company. The shares were valued at the
market price of the Company's common stock at the time of issuance which was
$0.08 per share for a total compensated value of $10,000.00.
Grant of Options/Warrants
During the quarter period ending March 31, 2005 the Company issued
consultancy and advisory Warrants to 3 individuals as compensation for 2 years
service each as members of the Company's Scientific Advisory Board. Each
individual was granted Warrants totaling 250,000 shares with an exercise price
of $0.20 per share. The Warrants were issued as part of Consultancy and Advisory
Agreements and each carry a 3 year exercise term and the following vesting
provisions:
(i) 50,000 shares upon the effective date of Warrant. Thereafter, the
Warrant shall become exercisable at the rate of 25,000 Shares per
calendar quarter, or any apportioned amount thereof, during the term of
engagement between the consultant and the Company.
Item 3. Defaults upon senior securities - None.
Item 4. Submission of matters to a vote of security holders - None.
Item 5. Other information - None
Item 6. Exhibits and reports on Form 8-K -
A. Exhibits:
32 Sarbanes-Oxley Certification
33 Sarbanes-Oxley Certification
B. Reports on Form 8-K: None.
8
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Dated: May 13, 2005 XSUNX, INC.
By: /s/ Tom M. Djokovich
----------------------------------------
Tom M. Djokovich, Chief Executive
Officer, President, and acting Chief
Financial Officer
9