MSP on Demand's New Majority Owner: What's the Story?

XnE Inc. has acquired a “majority” position in MSP on Demand, a hardware as a service (HaaS) specialist that had roughly (US)$1 million in revenues and $110,000 in net income for 2009. This is the second HaaS-related investment that has surfaced in recent weeks. Interesting stuff. But  XnE Inc.’s background — and delayed SEC filings — raises some question marks. Here’s why.

First, the high-level industry info: MSP on Demand President Ramsey Dellinger has been an outspoken advocate of HaaS opportunities for resellers and MSPs. Dellinger frequently educates MSPs at industry conferences; I most recently caught up with him at the N-able Partner Summit in October 2009.

Meanwhile, HaaS has been generating considerable interest from solutions providers that want to potentially offer Technology as a Service (TaaS) — everything from hardware to software as part of a monthly fixed fee. In addition to the MSP on Demand-XnE Inc. deal, ConnectWise Capital recently invested in CharTec, another well-known HaaS specialist.

Who Is XnE Inc.?

Now for a more intriguing question: Who is XnE Inc.?

According to the company’s Web site, XnE “partners with executives to build public or private long term businesses, through acquisitions or organic growth.” XnE Chairman and and CEO Michael Cummings has been involved in multiple acquisitions and roll ups during his career, according to his biography.

But here’s where all the questions start.

XnE Inc. previously was named Siena Technologies Inc. The company name change and a 500-to-1 reverse stock split took effect July 1, 2009.

XnE Inc.’s name is short for Xcellence in Entertainment. Poke around the web and you’ll find some mission statements indicating: “XnE’s core business is to own and operate independent Minor League Baseball franchises throughout the United States.” As part of that effort, XnE has acquired minor league baseball teams in Hawaii.

In an email exchange, I asked Cummings why XnE is now investing in MSP on Demand. His reply: “If you look at the website, XnE has taken a new direction.”

So I took a closer look at the XnE Inc. web site, and noticed blank pages for such areas as Investors and Portfolio companies.

Again, who is XnE?

Financial Performance and Delayed SEC Filings

According to an official XnE Inc.-MSP on Demand press release, XnE Inc. is publicly held (PINKSHEETS Symbol: XNEZ).

Yahoo Finance indicates the symbol has changed to XNEZD.PK — most recently trading at $0.02 a share in January 2010.

In a November 2009 letter to shareholders, XnE apologized for late SEC filings, stating:

I asked Cummings about the situation…

We’ll be watching the situation in the months ahead.

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