12/28/17 Zenergy End of Year 2017 Shareholder Newsletter
Note: Posting for those who didn't receive this newsletter - whizent1
Dearest Shareholders, Friends & Partners:
We have come to the end of 2017; this now concludes two years into our mission that started off under the ticker symbol USAR that we inherited from the previous directors and managers, then to CHRO and recently we landed at what I believe is our final destination; that is ZNGY – Zenergy Brands, Inc. It feels like it was just yesterday, when our Chairman and my good friend Byron Young called me (you can actually see a picture of when that meeting took place here), while I was still on sabbatical during 2015 to consider getting involved with this little OTC company. While today, I certainly feel like we are anywhere between 3 and 6 months behind our plans and aspirations; and the challenges associated with the cleaning up of this vehicle and turning it into a fully reporting SEC company, were piled up a mile higher than what we originally perceived. I do not regret for one second the decision that we made to use this vehicle to build what I am calling “the nation’s leading next-generation utility”.
I am not going to elaborate too much herein, because we’ve got a great conference call/webinar orchestrated for next month, which will be followed up our Annual Shareholder Meeting coming up in February. If you’ve not yet registered, please see that news announcement and instructions by clicking here. However, I do want to address the topic of timing and where I believe the Company is in terms of its lifecycle. After all, we are concluding our second year at the respective helm and I believe that it is important for both team members and shareholders alike to firmly understand and have an appreciation for where we are and how it relates to our business plan. As many of you may recall, myself and Byron publicly told everyone that we would be in the “marathon” business and not in the “sprinting” business; meaning that we wanted all investors/shareholders to have a long-term mindset if they wanted to take this ride with us. In this spirit, we asked everyone to “please give us 3 to 5 years to demonstrate what we are building”, this has been relayed at numerous times during conference calls, interviews and blog postings during our tenure. I am excited to share with you that we are now concluding year 2 and heading into year 3; I could not be more pleased with what is in our rear-view mirror and what I see on the horizon.
Change Is Upon Us
One of my mentors from 25 years back now, would always say, it’s imperative to know when the project that you are carrying goes from your heart to your shoulders. He was referencing the respective birthing process and how it is associated with bringing to life any new endeavor, more specifically, his point was to be acutely aware of when the season is changing. I am reminded of that bit of wisdom when I contemplate where Zenergy is today and what we are staring down, at this exact moment; our season is certainly changing. The reference of “your heart” can be interpreted as the founding and laying of building blocks of the process, otherwise known as, the “pre-revenue”, “early stage” and/or the “development phase” of our company. Like any trail-blazing endeavor, this stage is not comfortable for many people and not everyone is cut out for team membership during this phase; hell, candidly, it requires the most faith! And FAITH is not a common currency, it defies the obvious, defies the norm, and, certainly is, the only currency with which any VISION worth pursuing can be attained. In my opinion, this is the stage where we have been and this is the stage that we are now currently evolving out of.
The phrase “your shoulders” is a reference to becoming a burden of responsibility; in our case it would mean that we are now moving from theory into action. Your shoulders are where you can bear a heavy load; this is where I believe that our company is evolving into. I don’t mean to mumbo-jumbo this, please indulge me for another minute or two. You see, when we first started down the path two years ago, I had a hunch that a conversion would be taking place. My hunch was that over the next 10, possibly even 20 years, the areas and industries known and referred to as “Smart Controls”, “Internet of Things” (or “IoT”), “Energy” and “Energy Conservation” and even general utility services such as electricity, natural gas and/or water services would all begin to converge. I actually covered this topic in a blog posted on July 28th 2017 entitled “The Million Dollar Question: What exactly is our Industry?” In any event, this hunch turned into a platform, an entire ecosystem that can touch each of these industries (and suppliers therein) in a powerful and cost-cutting manner for home owners, commercial and industrial customers, and municipalities.
As time passed, our experience, data gathering and knowledge base has increased; as a result, I have become far more attune to the magnitude of the market opportunity that is in front of us. While, I don’t want to take away attention from my core message at this moment, this should be noted, and will be followed up upon, sometime in the first quarter.
Over the past year, we have been testing our platform, meaning that we have been serving residential and commercial class customers, while testing our theories. Think deeply about what I am trying to convey here; this company, this management team has (1) built an end-to-end platform merging each of these areas, (2) acquired all necessary industry required licenses, (3) engineered, installed and project managed several installations across the nation, (4) entered into the monthly billing phase for several customers, (5) originated a cutting edge delivery mechanism known as the “Zero Cost Program”, (6) performed site audits and utility surveys for hundreds of commercial locations, (7) built a significant pipeline of prospective sales opportunities for 2018.
All of this brings us to where we are today; going from the testing & theory laboratory to the marketplace. As most of you should be aware by now, we announced earlier this month that we would be commencing our fourth Zero Cost customer installation; this is a county jail system located in the state of Oklahoma, which has now led us to another county jail related opportunity that we are currently in the audit phase on. It has now been approximately three months since our prior Zero Cost installations went active and I am incredibly pleased to announce that we not only beat our forecast with respect to conservation of energy, but we beat the forecast under more severe weather conditions than that of the baseline data. This is a very positive testament to our engineering and project strategy, the technology that our analyst specified and of course, the overall productizing and installation of the same. Our marketing team is working on a very nice case study, wherein these results will be posted publicly; I am expecting this marketing piece to be out in the first week or two of January.
What exactly does all of this mean today?
Does this evolution or transition happen in one day? Of course not, but I assure you that we are in the middle of the crossover right now. We are actively moving into a phase wherein customer acquisition and subsequent revenue growth is the constant task at hand or as I like to refer to it; “now comes the fun part”. I am forecasting that this transition will be over by the end of February 2018 and/or sometime during Q1/2018. However, there are three major business objectives that we have planned for Q1/2018 which, in our view point, are the missing pieces required. However, in spite of these very real objectives on our agenda, our sales goal is to complete fifty (50) Zero Cost installations during Q1/2018. I highly recommend that you watch our recent VLOG, wherein I am addressing the value associated with each Zero Cost Customer as well as the fact that each Zero Cost Customer represents a minimum of a 7-year revenue stream to the Company.
Three (3) Business Objectives for Q1/2018
Let me be clear in stating each of the objectives below, are definitely under the category of forward-looking statements. They are objectives that we are working relentlessly to accomplish, however, they are subject to any number of risks and setbacks as defined in our disclaimer language.
Cleaning Up the Balance Sheet: With the aforementioned transition taking place in our business, I believe that we can now attract new and friendlier sources of capital and on more practical terms. While we are only in early discussions with a few prospective parties, we are hopeful that something will materialize that can be executed during this time period. I see this a very strategic move, and one that will get us on our proper and intended growth trajectory.
Enertrade Acquisition: I only know to be candid, so allow me to do so. It does not escape me that we have taken way too long to execute the same and I am not in any way happy about this. While there were numerous setbacks during this time, a few within our control, however, many well beyond our control, I am thankful that the owners of Enertrade have been flexible and understanding with us. While Zenergy’s core product and service offering can be offered in all fifty (50) U.S. states and with or without the Retail Energy Provider commodity sales platform, we still see this offering and platform as a very natural supplemental piece towards accomplishing our vision of being the “nation’s leading next-generation utility”. As a result of this process, we have made the proper adjustments and changes internally and externally to avoid this manner of execution in the future.
Zero Cost Scalable Financing: Much of this year was spent in market testing with respect to our Zero Cost product offering. The results were so overwhelmingly positive, that we decided to put the brakes on these efforts as we realized that we would need to put scalable financing in place to accommodate this type of growth. This of course, led us to the engagement with Coit Capital; if you are not familiar with this news, please click here for the full story. We have been in the due diligence process for the past 2 months now and we are hopeful that we will be able to close this anticipated transaction sometime during Q1/2018.
Okay Zenergy friends, this concludes our end of year communication to you all and also sets the stage and tone for the next quarter and for 2018. Please stay connected with us on our corporate website, as well as all of our Zenergy branded social media outlets.
As always, Byron and myself remain always grateful for this opportunity, we remain stedfast in pursuit of our goals and objectives and we remain grateful for each of you, our valued shareholders. I would like to wish you all a very happy and blessed holiday season and a very prosperous new year.
Onward and upward,
Alex Rodriguez
CEO & President
Zenergy Brands, Inc. (OTCQB: ZNGY)
Disclaimer & Forward-Looking Statements
This document and/or communication contains statements that involve expectations, plans or intentions (such as those relating to future business or financial results) and other factors discussed from time to time in our Securities and Exchange Commission filings. These statements are forward-looking and are subject to risks and uncertainties, so actual results may vary materially. You can identify these forward-looking statements by words such as "may," "should," "expect," "anticipate," "believe," "estimate," "intend," "plan" and other similar expressions. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors not within the control of the Company. The Company cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The Company disclaims any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
