I called Solargy Systems this AM to get a status update.
I spent about an hour speaking with Mr Nurse, CEO, about the current progress and schedule of events going forward. What he told me was very encouraging so I am sharing it here, with permission from the company.
I asked if they would continue to file financial reports with the SEC. He advised me that because they have more than 300 shareholders, they have an obligation to do so; currently about 1500 shareholders. Minimally they have to file an annual report, once per year.
Mr Nurse is currently working on the filing for 4th Quarter 2009 and hopes to get it completed and published by the end of Feb. He is also planning to file for 1st Quarter 2010, and hopes to get that completed by the end of April. Furthermore, he hopes to continue the quarterly filings to eventually become current and then be uplisted back to the OTCBB. That is his stated plan.
He further related that these filings would contain forward guidance and status information about projects currently being developed and future projects. He would prefer to issue status updates via the filings as opposed to using occasional press releases. However, I asked him about any breaking news events and he agreed that he would always issue PRs in that case.
The current project emphasis in on starting construction of the solar farm in Florida. Solargy owns the 55 acre plot which is situated directly across the road from a power substation. They have already negotiated a preliminary agreement for the sale of the power to be generated, and hope to renegotiate this agreement upward since the cost of power is increasing locally. They still need to secure the local building permits to actually begin construction but this should be easy to do since this is not a habitable site and there is an expanding need for local power. In short, the local community needs this power plant to be built, and the US Gov will reimburse about 30% of the cost.
The company is currently seeking $100 Million in financing for this project and the prospect for success is good. There are multiple interested parties and the negotiations are continuing next week. However, Solargy is still a small company and this is a great deal of money, so this process is complex and difficult and it will take some more time. The optimistic timeline is to secure the financing by early May and begin construction immediately. Full construction can be completed in about 90 days or less. The Obamma Stimulus plan offers major financial incentives for this project but construction MUST start before Sept2010. So, worst case, the plant might not be online until year end.
The project financing is in the form of high-quality securitized bond issues to be sold mainly in Europe. They have a 5 year maturity and will be repurchased by the company and retired using future revenue from the solar farm. These Section 144a bonds do NOT convert into shares of stock. So they are non-dilutive to the current share structure.
The earlier revenue estimate from this solar farm was approximately $5.25 million annual. But that was made 18 months ago based on the prevailing technology of a single solar panel that produced about 300 watts. Since then the technology has improved substantially to the point that current panels can produce 550 watts. So it is reasonable that the cumulative power output and subsequent revenue could be scaled upwards, possibly even doubled by completion. Solargy Systems has not yet purchased the solar panels but the advancement of the technology is definitely working in their favor. Likewise, as the use of solar energy is increasing worldwide the lead time on purchase is also being extended. But this is not viewed as much of a problem currently.
Finally, I also asked Mr Nurse about other projects, specifically the previously announced renewable energy project in Pakistan. He said that one is still active and moving slowly thru the government regulation process. There is also a planned project in Puerto Rico that is moving along thru the process. He also volunteered that when the Florida project is completed they would be able to, more or less, "rubber stamp" these types of projects across the USA and through out the Caribbean. He mentioned specifically Arizona and California, but would not comment further. But it sounded like there is interest in using Solargy Systems as a prime contractor on various projects being developed by other companies further out west. This work is most likely going to develop in 2011 and later.
Everything considered, it was defiantly worth the time to call and ask about the current status. The company is very busy taking care of business. However, I am sure Mr Nurse would be willing to speak with shareholders. Early AM is probably the best time to call. Furthermore, he is very aware of the current languishing share price and is working fervently to increase share holder value by building up the company. From my viewpoint, this is exactly what he should be doing, and I am personally satisfied that good progress is being made.
So, in summary, probably the next milestone event we can look forward to is another SEC Financial filing in about 3 weeks.
Good Luck to All Longs.
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