SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10QSB
Quarterly Report under Section 13 or 15(d) of
the Securities Exchange Act of 1934
CIK NO.: 0001039466
For Quarter Ended March 31, 2004
Commission File Number: 000-29621
XSUNX, INC.
-------------------
(Name of Small Business Issuer in its charter)
COLORADO 84-1384159
--------------------------------------- -------------------------------
State of incorporation or organization IRS Employer ID Number
65 Enterprise, Aliso Viejo, CA 92656
-------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (949) 330-8060
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 7, 2004 the number of shares outstanding of the registrant's only
class of common stock was 111,764,394.
Transitional Small Business Disclosure Format (check one): Yes [_] No [X]
1
Table of Contents
Page
PART I - FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
Independent Auditor's Report............................................................. F-1
Balance Sheets as of March 31, 2004 (unaudited) and September 30, 2003................... F-2
Statements of Operations for the Three and Six Months ended March 31,
2004 and 2003 (unaudited) and the period February 27, 1997 (inception)
to March 31, 2004........................................................................ F-3
Statements of Stockholders Equity for the period February 27, 1997
(inception) to March 31, 2004 (unaudited)................................................ F-4
Statements of Cash Flows for the Six Months ended March 31, 2004 and
2003 (unaudited) and the period February 27, 1997 (inception) to March
31, 2004................................................................................. F-5 - F-6
Notes to Condensed Consolidated Financial Statements
(Unaudited).............................................................................. F-7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.................................................................... 3
Item 3 Controls and Procedures.................................................................. 6
PART II - OTHER INFORMATION
Item 1. Legal Proceedings ....................................................................... 6
Item 2. Changes in Securities.................................................................... 6
Item 3. Defaults upon Senior Securities.......................................................... 7
Item 4. Submission of Matters to a Vote of Security Holders...................................... 7
Item 5. Other Information........................................................................ 7
Item 6. Exhibits and Reports on Form 8-K......................................................... 7
Signatures........................................................................................ 8
2
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
XSUNX
(FORMERLY SUN RIVER MINING, INC.)
(AN EXPLORATION STAGE COMPANY)
FINANCIAL STATEMENTS
March 31, 2004
(UNAUDITED)
Michael Johnson & Co., LLC.
9175 Kenyon Ave., #100
Denver, CO 80237
Phone: 303-796-0099
Fax: 303-796-0137
ACCOUNTANTS' REVIEW REPORT
Board of Directors
XSUNX, Inc.
Denver, CO
We have reviewed the accompanying balance sheet of XSUNX, Inc. (An Exploration
Stage Company) as of March 31, 2004 and the related statements of operations for
the three and six months ended March 31, 2004 and 2003 and the period February
27, 1997 (inception) to March 31, 2004 and cash flows and stockholders' equity
for the six-months ended March 31, 2004 and 2003 and for February 25, 1997
(inception) to March 31, 2004 included in the accompanying Securities and
Exchange Commission Form 10-QSB for the period ended March 31, 2004. These
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of person responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with auditing standards generally accepted in the United States, the objective
of which is the expression of an opinion regarding the financial statements as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements for them to be in conformity
with accounting principles generally accepted in the United States.
We have previously audited, in accordance with auditing standards generally
accepted in the United States, the balance sheet as of September 30, 2003, and
the related statements of operations, stockholders' equity and cash flows for
the year then ended (not presented herein). In our report dated December 13,
2003, we expressed an unqualified opinion on those financial statements. In our
opinion, the information set forth in the accompanying balance sheets as of
March 31, 2004 is fairly stated in all material respects in relation to the
balance sheet from which it has been derived.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, conditions exist which raise substantial doubt about the
Company's ability to continue as a going concern unless it is able to generate
sufficient cash flows to meet its obligations and sustain its operations.
Management's plans in regard to these matters are also described in Note 2. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ Michael Johnson & Co., LLC
Michael Johnson & Co., LLC
Denver, CO
May 18, 2004
F-1
XSUNX, INC.
(Formerly Sun River Mining, Inc.)
(A Development Stage Company)
Balance Sheets
(Unaudited)
March 31, September 30,
2004 2003
----------------- -----------------
ASSETS:
Current assets:
Cash $ 2,493 $ 2,346
Stock Subscription Receivable 4,653 -
----------------- -----------------
Total current assets 7,146 2,346
----------------- -----------------
Other assets:
Patents 3 3
Deposit - Lease 1,500 -
----------------- -----------------
Total other assets 1,503 3
----------------- -----------------
TOTAL ASSETS $ 8,649 $ 2,349
================= =================
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Accounts Payable $ 15,971 $ -
Accrued Officers Salaries 65,000 -
Notes Payable 10,400 -
----------------- -----------------
Total current liabilities 91,371 -
----------------- -----------------
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;
111,479,898 shares issued and outstanding at March 31,
2004 and 111,298,148 outstanding at September 30, 2003 2,842,797 2,821,726
Deficit accumulated during the exploratory stage (2,925,519) (2,819,377)
----------------- -----------------
Total stockholders' profit (deficit) (82,722) 2,349
----------------- -----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 8,649 $ 2,349
================= =================
See Accountants Review Report
F-2
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,
2004 2003 2004 2003 2004
------------ --------- ----------- ---------- -------------
Revenue $ - $ - $ - $ -
Expenses:
Abandoned Equipment - - - - 808
Bank Charges 62 - 62 - 1,774
Consulting - - - - 1,004,139
Contract R&D 12,850 - 12,850 - 12,850
Depreciation - - - - 3,178
Directors' Fees - - - - 11,983
Due Diligence - - - - 45,832
Equipment Rental - - - - 1,733
Impairment loss - - - - 923,834
Legal & Accounting 9,999 - 15,345 884 176,502
Licenses & Fees - - - - 6,220
Meals & Entertainment - - 112 - 4,231
Office Expenses 138 - 2,759 - 16,740
Salaries 37,500 - 65,000 - 445,750
Postage & Shipping 158 - 302 - 3,519
Printing 5 - 134 - 5,714
Public Relations 375 - 840 - 105,166
Rent 2,268 - 5,173 - 13,231
Taxes - - 4,657
Telephone 902 - 1,543 - 32,088
Transfer Agent Expense 250 - 1,800 375 15,128
Travel - - 222 - 59,515
------------ --------- ----------- ---------- -------------
Total Operating Expenses 64,507 - 106,142 1,259 2,894,592
------------ --------- ----------- ---------- -------------
Other Income (Expense)
Interest Expense - - 71,346
Interest Income - - (22)
Forgiveness of Debt - - (40,397)
------------ --------- ----------- ---------- -------------
Net (Loss) $ (64,507) $ - $ (106,142) $ (1,259) $ (2,925,519)
------------ --------- ----------- ---------- -------------
Per Share Information:
Weighted average number of
common shares outstanding 111,248,148 15,362,970
----------- ----------
Net Loss per Common Share * *
----------- ----------
* Less than $.01
See Accountants Review Report
F-3
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,
2004 2003 2004
-------------- -------------- -----------------
Cash Flows from Operating Activities:
Net Loss $(106,142) $ (1,259) $ (2,925,519)
Adjustments to reconcile net loss to cash used in
operating activities:
Issuance of Common Stock for Services - - 1,237,557
(Increase) in Deposits (1,500) - (1,500)
(Increase) in Stock Subscriptions Receivable (4,653) (4,653)
Increase in Accrued Expenses - Officers 65,000 - 65,000
Increase in Accounts Payable 18,317 1,259 15,971
-------------- -------------- -----------------
Net Cash Flows Used for Operating Activities (28,978) - (1,613,144)
-------------- -------------- -----------------
Cash Flows from Investing Activities:
Purchase of Intangible Assets - - (3)
-------------- -------------- -----------------
Net Cash Flows Used for Investing Activities - - (3)
-------------- -------------- -----------------
Cash Flows from Financing Activities:
Proceeds from Notes Payable 10,400 - 10,400
Issuance of Common Stock 21,071 - 1,605,240
-------------- -------------- -----------------
Net Cash Flows Provided by Financing Activities 31,471 - 1,615,640
-------------- -------------- -----------------
Net Increase (Decrease) in Cash 2,493 - 2,493
-------------- -------------- -----------------
Cash and cash equivalents - Beginning of period - - -
-------------- -------------- -----------------
Cash and cash equivalents - End of period $ 2,493 $ - $ 2,493
============== ============== =================
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 $ - $ - $1,237,557
============== ============== =================
See Accountants Review Report
F-4
XSUNX, INC.
(Formerly Sun River Mining, Inc.)
(A Development Stage Company)
Consolidated Statement of Stockholders' Equity (Deficit)
March 31, 2004
(Unaudited)
Deficit
Accumulated
During the
Common Stock Exploration
# of Shares Amount Stage Totals
------------ ----------- ----------- -----------
Inception - February 25, 1997 - $ - $ - $ -
Issuance of stock for cash 3/97 5,000 100 - 100
Issuance of stock for cash 3/97 5,590 111,800 - 111,800
Issuance of stock to Founders 3/97 14,110 - - -
Issuance of stock for Consolidation 4/97 445,000 312,106 - 312,106
Issuance of stock for cash 8/97 2,900 58,000 - 58,000
Issuance of stock for cash 9/97 2,390 47,800 47,800
Net Loss for Year - - (193,973) (193,973)
------------ ----------- ----------- -----------
Balance - September 30, 1997 474,990 529,806 (193,973) 335,833
------------ ----------- ----------- -----------
Issuance of stock for services 11/97 1,500 30,000 - 30,000
Issuance of stock for cash 9/98 50,000 200,000 - 200,000
Consolidation stock cancelled 9/98 (60,000) (50,000) - (50,000)
Issuance of stock for cash 9/98 200 4,000 - 4,000
Net Loss for year - - (799,451) (799,451)
------------ ----------- ----------- -----------
Balance - September 30, 1998 466,690 713,806 (993,424) (279,618)
------------ ----------- ----------- -----------
Issuance of stock for cash 10/98 21,233 159,367 - 159,367
Issuance of stock for services 1/99 40,000 40,000 - 40,000
Issuance of stock for cash 1/99 37,500 296,125 - 296,125
Issuance of stock for services 1/99 25,000 276,500 - 276,500
Issuance of stock for cash 2/99 7,500 70,313 - 70,313
Issuance of stock for cash 4/99 45,225 122,108 - 122,108
Issuance of stock for salaries 6/99 70,000 147,000 - 147,000
Issuance of stock for cash 9/99 40,000 69,200 69,200
Net Loss for year (1,482,017) (1,482,017)
------------ ----------- ----------- -----------
Balance - September 30, 1999 753,148 1,894,419 (2,475,441) (581,022)
------------ ----------- ----------- -----------
Issuance of stock for cash 9/00 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)
------------ ----------- ----------- -----------
F-5
XSUNX, INC. ......Continued
(Formerly Sun River Mining, Inc.)
(A Development Stage Company)
Consolidated Statement of Stockholders' Equity (Deficit)
March 31, 2004
(Unaudited)
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 7/03 70,000,000 3 - 3
Issuance of stock for Cash 8/03 9,000,000 225,450 - 225,450
Issuance of stock for Debt 9/03 115,000 121,828 - 121,828
Issuance of stock for Accruals 9/03 115,000 89,939 - 89,939
Issuance of stock for Services 9/03 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 3/04 20,000 1,418 - 1,418
Issuance of stock for 3/04 80,750 9,811 - 9,811
Issuance of stock for 3/04 81,000 9,842 - 9,842
Net Loss for period - - (106,142) (106,142)
------------ ----------- ----------- -----------
Balance - March 31, 2004 111,479,898 $2,842,797 $(2,925,519) $ (82,722)
============ =========== =========== ===========
All shares have been adjusted for the 1 for
20 reverse split.
See Accountants Review Report
F-6
XSUNX, INC.
(FORMERLY SUN RIVER MINING, INC.)
Notes to Financial Statements
March 31, 2004
(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, 2004 and the results of
operations for the three and six-months ended March 31, 2004 and 2003 and for
the period February 25, 1997 (inception) to March 31, 2004, and cash flows for
the six-months ended March 31, 2004 and 2003 and the for the period February 25,
1997 (inception) to March 31, 2004. 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, 2003.
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.
Note 3 - Subsequent Event:
----------------
On May 13, 2004, the Company issued a letter of intent with MVSystems, to enter
into a definitive asset license and cooperative venture agreement for the
development and commercialization of cooperative uses of core technologies as
supplemental enhancements to the commercial application of their respective
technologies and business initiatives.
F-7
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-QSB 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 busi-
ness, inability to raise additional capital or financ
-ing 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.
3
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 Report on Form 10-KSB
filed by the Company in 2004 and any Current Reports on Form 8-K filed by the
Company.
Nature of Operations
XsunX, Inc. (XsunX) is currently working to establish scalable
processes for the manufacture of photovoltaic technology in the mass production
of environmentally friendly semi-transparent photovoltaic products for use in
the glass, optical film and building industries.
Management has established a plan under which the Company is attempting
to commercialize its patented technology and developing new technology through
the contracting for research, development and commercialization processes with
certain qualified facilities that specialize in the Company's target market
segments. This product development process is anticipated to provide the Company
with the fastest path to marketable products, the maximization of corporate
resources, and, the broadest access to device, optical and material engineering
facilities and technical expertise.
Although the Company faces many challenges in perfecting and
establishing viable commercial processes it is encouraged by its developments
efforts in which the production of working model samples of semi-transparent
photovoltaic glazings approached 4% electrical conversion efficiencies. These
working models established the basis for process and cell refinement that the
Company hopes will provide conversion efficiencies approaching 6% or greater.
The Company is continuing to concentrate on the refinement of cell structures,
manufacturing processes, the balancing of light transmittance and transparency,
and conversion efficiencies.
Through the successful commercial development of its semi-transparent
solar electric glazing processes the Company anticipates being able to take
4
advantage opportunities to provide a commercially viable method for converting
large areas of architectural glass into electrical power producing systems. Upon
the completion of its commercialization process the Company anticipates the
majority of revenues to be derived from the licensing of its technology.
Financial Condition and Changes in Financial Condition
The Company has and continues to make investments in the development of
intellectual property assets as part of a business-restructuring plan. The
purpose of these on going investments is to acquire, develop and market patented
semi-transparent solar electric glazing processes.
The Company intends to continue to make investments in product
development for the foreseeable future. To finance these development efforts the
Company is currently engaged in on going capital formation efforts to fund the
Company's projected deficits for development costs in the current year.
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 and new business
opportunities these results may not necessarily be indicative of results to be
expected for any future period. As such, future results of the Company may, in
the future, differ significantly from previous periods.
Results of Operations for the Three-Month Period Ended March 31, 2004 Compared
to the Same Period in 2003
The Company incurred expenses totaling $64,507 for the three months ending
March 31, 2004 compared to $0.00 for the same period in 2003. The large increase
between the periods of $64,507 resulted entirely from the increase to general,
administrative and research expenses due to a change in operations necessary for
the development of the Company's new business plan as a developer and provider
of semi-transparent solar electric glazing technologies. The Company generated
no revenues in this period as well as for the same period in 2003. The net loss
for the three months ending March 31, 2004 was ($64,507) as compared to a net
loss of ($0.00) for the same period 2003. Operating costs in the development of
the Company's business plan are expected to continue for the foreseeable future
as the Company continues to increase expenditures in the commercial development
of its new business opportunities.
Liquidity and Capital Resources
The Company had a net working capital (deficit) at March 31, 2004 of
($82,212) as compared to a working capital (deficit) of ($39,286) at December
31, 2003 and working capital of $2,349 at September 30, 2003. There were no cash
flows provided from operations during the three and six months ended December
31, 2003 and March 31, 2004 and an increase to general, administrative and
5
development expenses in these periods resulted in an increase to working capital
deficits. For the three and six months ended December 31, 2003 and March 31,
2004 the Company's capital needs have been met by loans and the issuance of
notes to senior executives of the company and the sale of common stock.
Cash and cash equivalents at March 31, 2004 were $8,649, an increase of
$6,839 from December 31, 2004. During the three-month period ended, March 31,
2004, the Company used $64,507 net cash in operating activities as compared to
using $0.00 for the same period 2003. This increase of cash used in operations
of $64,507 was entirely a result of an increase in general and administrative
expenses in the commercial development of its new business objectives.
The Company had, at March 31, 2004, working capital of $7,146. The Company
anticipates that there will be no cash generated from operations in the current
year necessary to fund its current and anticipated cash requirements. The
Company plans to obtain additional financing from equity and debt placements.
The Company has been able to raise capital in a series of equity and debt
offerings in the past. While 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, the Company believes that sufficient capital can be
raised in the foreseeable future.
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 made by the
Company from December 19, 2003 to March 31, 2004 pursuant to Regulation S of the
Act at a variable price equal to 27% of the five (5) day average closing bid
price, the Company raised gross proceeds of $21,070.79 during the quarter ending
March 31, 2004. The gross proceeds raised in this offering as of May 7, 2004
were $39,793.94 from the sale of 370,500 shares. The Company is offering a total
of 3,000,000 shares pursuant to this private placement, which has not been
6
terminated and can be terminated at the discretion of the Company with three (3)
days prior written notice to the purchaser.
On April 9, 2004 the Company entered into a private placement agreement
for the sale of up to 10,000,000 shares of common stock pursuant to Regulation S
of the Act. The purchaser will have to and until December 31, 2004 to deliver
one or more purchase notices to the Company. The agreement provided for a
variable purchase price based on the closing bid price on the date prior to the
purchase with a floor price of $.20 cents. The Company may, at its discretion,
waive the floor price or terminate this agreement upon two (2) weeks notice to
the purchaser. The shares were offered in a private transaction, which was not
part of a distribution of the shares.
Subsequent to the quarter ending March 31, 2004 in a private
placement of the Company's common stock made by the Company from April 9, 2003
to May 7, 2004 pursuant to Regulation S of the Act at a variable price equal to
30% of the closing bid price on the date prior to the purchase of the stock, the
Company raised gross proceeds of $12,925.71 from the sale of 95,746 shares. The
Company is offering a total of 10,000,000 shares pursuant to this private
placement, which has not been terminated and can be terminated at the discretion
of the Company with two (2) week prior written notice to the purchaser.
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
Exhibits: 31 Sarbanes-Oxley Certification
32 Sarbanes-Oxley Certification
Reports on Form 8-K: 8-K filed 2-25-04
7
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 17, 2004 XSUNX, INC.
By: \s\ Tom M. Djokovich
----------------------
Tom M. Djokovich, Chief Executive Officer,
President and acting Chief Financial Officer
8