Enerkon Solar International Inc. (OTCMKTS: ENKS) is engaged in designing and developing renewable energy equipment. The company also participates in solar projects through its subsidiaries.
The company last month started negotiations with JSC Ukrainian Capital Bank over a new solar project called “Chernobyl Green Clean Solar-Powered World Co-Generation Power Plant Project.” Enerkon said in a statement that the project would provide a clean energy solution for the future of Ukraine if the discussions succeeded.
Enerkon also said that it will update the public if the negotiations reach any meaningful conclusion. However, the talks may not end up in a deal so people should not make any investment decision solely based on the aforesaid news.
Recent Performance & Outlook
Enerkon said in October that the Covid-19 pandemic made 2020 a difficult year for its overall strategy and business model. Nevertheless, the company said it is currently exploring options including the establishment of a special purpose acquisition company (SPAC) in the future. The SPAC is expected to help it in securing more projects and technologies crucial for the long-term success of Enerkon and its shareholders, according to the company.
If we look at the major developments of the year, Enerkon inked a deal this summer to buy a 20 percent stake in Albayraklar Defense, which is an affiliate of Albayraklar Holding. Moreover, it is also planning to secure funding for its projects in the U.S., Africa, and Turkey.
Enerkon has not reported its performance for the recent quarters. Speaking on the matter, Chairman and CEO Benjamin Ballout said in a statement, “The company is behind in its filings due to the previous June Quarter being out of format and GAAP due to mistakes in our in-house administration who help us with the presentation of information to the public and likewise we are now in the process of filing the New Amended June 30, 2020, Quarter Report as well as the Year-End September 30th, 2020 report with the OTC for public display on their official disclosure site page for ENKS”
ENKS said that the impact of the Covid-19 on its operations is still unknown, but the senior management is positive and is anticipating significant opportunities in the next fiscal year. It also said the commercialization of patents owned by Enerkon will stay a top priority in the coming months.
Separately, ENKS also revealed its plan of completing an audit of the previous two years and apply for a listing on the Nasdaq stock exchange, as the company wants to access capital markets. Besides, ENKS believes that OTC PINK market offers fewer opportunities in this regard, which is why the company had to rely on itself for arranging funds required for its operations.
Enerkon also revealed in a statement that its Chairman is not receiving any salary. Moreover, he has not sold any of his holdings in ENKS since its foundation to support the company’s operations and to offer maximum value to ENKS shareholders.
Opportunities and Risks
Both leading and small firms in the solar market have been facing intense competition, especially in terms of pricing. The market also regularly experiences supply and demand imbalance, which further weighs on product prices.
Enerkon is currently following its long-term strategic policy, which mainly revolves around focusing its key strengthens including advanced modules and technologies that allow it to offer utility-scale PV solar energy solutions to regions with urgent electricity needs. PV solar energy solutions mainly refer to the power generation systems that convert solar energy into electrical energy, thus helping industries and households in areas with no or high-cost electricity.
The worldwide solar market is growing at a reasonable pace, mainly driven by the affordability factor that is critical for the emerging markets. ENKS is running several solar projects across the globe and many of them are among the leading projects in those regions.
However, there are also several potential risks ENKS may face in the coming time. For instance, any drop in the average selling price could severely hurt its results. Moreover, aggressively low prices from rivals could also adversely affect its revenues.