06 Jun CHRO Quarterly Update – From the Desk of the Chairman
From the Desk of the Chairman, Mr. Byron Young
Dearest Shareholders, Partners & Friends of CHRON:
I want to take a moment and say thanks to each and every one of you, our shareholders. We appreciate all of you and you should also know that we have been burning the midnight oil here at The Chron Organization on your behalf. After much trial, some error, tons of testing and retesting, and then, of course, the much needed feedback from multiple stakeholders, I strongly believe we are at a turning point in the Company and are now beginning to hit a major stride.
Today, I want to give everyone some quick updates because I feel that many shareholders are at a point where they are saying, “We appreciate the information, but show us more action, meaning business, revenue, and press releases that address sales.” Fair enough, so let’s break this down and I will address each relevant topic:
Commercial Zero Cost Program Funding:
In order for CHRON to become the multi-billion dollar company that Alex and I both envision, we must have a funding mechanism in place to support our flagship commercial Zero Cost Program. The reality is that we will require hundreds of millions of dollars over the next several years as we conduct the installations associated with this program. The good news is that after many months of meetings and reaching out to various funds and investment banks, we now have multiple funding groups that have committed or are in the process of committing to the Zero Cost Program. This is very exciting for us since it essentially puts us on the map in a monumental way, enabling us to take on multiple commercial projects for years to come.
CHRO Pubco Funding:
We are also pleased to say that we continue to be successful through our bridge funding efforts. In the past, this has been accomplished primarily by leveraging friends and family, but now we are fundraising mainly through various private equity funds. After the SEC Form 10 goes effective on or around June 20th, our plan is to immediately file our S-1, which we anticipate will be a swift process with the SEC. Once our S-1 registration goes effective, we will plan on completing a considerable capital raise, which we believe will be our final need for capital. It is at that point I believe the real fun will begin, especially as it will coincide with the official launching of our REP services.
Sales and Revenue:
As any business owner or person knows, “Strong sales cures lots of ailments.” I am pleased to say that we have been quietly filling up our commercial Zero Cost Program sales pipeline in a major way. Our process consists of the initial meeting, information gathering, site survey, underwriting and credit, engineering, production of a cost savings analysis, and a contract to the end user to sign. Then we get to start the installations. This process takes 3-6 months to complete, depending on how fast we can get the required information from the customer.
As of the writing of this blog post, we are well underway with planning installations at the business locations of seven existing commercial customers. Moreover, our sales pipeline includes hundreds of physical locations of businesses that want our Zero Cost Program solution. Let me stress a few things here, these first 7 clients represent a few million dollars in revenue for us – but here is why you should be excited: four of these seven clients have already committed additional work for us.
In one of these real examples, we will be doing the installation of LED Lighting, HVAC Solutions and Refrigeration Motor Controllers on 35 C-Stores – well, this REIT has now agreed to give us another 50 locations (Circle K convenient stores) and a couple of hospitals within their portfolio. In another real-life example, we are doing installations at two Crown Plaza hotels in the Houston area and one of these owners has already committed to give us another 10 hotels and a chain of 45 fast food restaurants via entering the first phase of the sales process, which is a Letter of Authorization and Initial Site Survey. Some of them have already gone to contract and our first installs will begin in the next couple of weeks while some still need to undergo the audit and survey process. All of these activities should keep our B2B sales and our operations teams busy for the next two years.
Let me stress again that these deals are all 5-year deals and five of these seven signed deals are worth over 3 million dollars in revenues to CHRON. Based on our unofficial projections, we anticipate the current pipeline of prospects to represent between approximately 50 and 100 million dollars over the next 12 months. I realize this is a wide range, but the reason for that is we’ve yet to prove how fast and efficient we can install and hopefully, we don’t run out of our project financing sources. In any event, I believe that once the stock analysts start picking up these revenue generating activities when we up-list to the OTCQB, our share price will begin to reflect the true value of our company. I also believe that during our third quarter, we should be able to start forecasting revenues and performance with a little more accuracy than we can today; and we will make these forecasts much more official then.
This should really excite you. Note that the above projections do not factor in our recent partnership with the Viridian direct sales channels, which represent tens of thousands of direct sales associates across the country. Nor does it include our residential forecast, which we are still working on.
Partnerships and Acquisitions:
While we continue to reiterate that CHRON is a long-term play, we remain committed to pursuing hyper growth strategies that contribute toward that vision. To that end, we are currently analyzing many acquisition and partnership opportunities. Over the past several months, I have been traveling extensively to trade shows and meeting with business owners almost every single day. We will soon be closing some of these partnerships and hopefully, acquisitions, too. Once these transactions are finalized and executed, we will be able to make some great announcements relating to these opportunities. Again, I hope that all happens very soon.
CHRO Stock and Press Release Strategy:
We plan on focusing our communications on PR that will cover partnerships, acquisitions, SEC and Up-listing, and sales, sales, sales. Currently, our share price has taken a dip; I suspect that this is mainly due to the fact that it has taken us this long to get the Company to the revenue producing stage. But that problem, fellow shareholders, is about to be a distant memory.
Summary and Conclusion:
In spite of the delay in getting to this revenue generating phase, Alex and I continue to be very excited about the Company. It has been a long journey to get to where we are—the turning point we have all been waiting for. We appreciate everyone sticking with us, but now it is about to get real, meaning revenue real. And henceforth, we look forward to delivering more good news to all of our shareholders as we proactively seize opportunities to add value to our collective enterprise.