2011/12 continues to be a challenging year for solar stocks and smaller technology companies world-wide. However, there appears to be light at the end of the tunnel with a number of analysts forecasting a turn-around in the fortunes of solar companies, a reduction of commitment to solar farms and a rapidly growing Building Integrated Photovoltaic (BIPV) market. Dye Solar Cell technology is an excellent match for BIPV applications.
Dyesol's business model differs significantly from other solar companies, however traditionally we have been grouped with conventional solar companies in global stock market indices. In an effort to differentiate Dyesol we have changed our concise company description to read:
Dyesol is a global supplier of Dye Solar Cell (DSC) materials, technology, and know-how. DSC is a photovoltaic technology enabling metal, glass, and polymeric based products in the building, transport and electronics markets to generate energy and improve energy efficiency. Dyesol partners with leading multi-national companies who possess significant market share and established routes-to-market.
Our business model is demonstrated by working with partners such as Tata and Pilkington, which are manufacturers of products that are readily integrated into a diverse range of applications in the built environment. In promoting Dyesol we state that we develop enhanced building products that produce power, thereby lowering the building energy footprint and increasing energy efficiency. We continue our substantial commitments to these projects and are proud of the product development milestones achieved this year and particularly in the recent quarter by our team in the UK.
R&D continues to be a primary focus in facilitating delivery of the key milestones of our technology road map, which are crucial in supporting our partnership projects. The scaling-up of production of each of our new materials underpins the performance improvements achieved and is essential for the commercialisation of the DSC enhanced products of our strategic partners. Dyesol holds unique materials production technology being sought by potential chemical manufacturing partners worldwide. As previously announced Dyesol in Australia achieved a 15% improvement in efficiency (6.9% to 8%) for industrial scale strip cells which are readily scalable. Our collaborative program with the globally recognized Japanese National Institute of Material Science (NIMS) on next generation dye structures is bearing fruit with a record efficiency of 11.4% being achieved on test cells incorporating dye combinations. The collaboration project with CSIRO to develop new dye structures is entering a testing phase for the new materials supplied under this contract.
The industrialisation of DSC on steel continues at the PV Accelerator in Shotton, North Wales utilising the pilot production line. The "Biggest" project involved constructing a 20 square metre DSC roof array which is currently under evaluation. The "Best" project involves demonstrating performance enhancements and durability validation. In the last quarter we have demonstrated the design and industrial product area production process for virtually eliminating use of expensive silver. In parallel, we confirmed a 20% efficiency enhancement for a back lit device which also showed doubling of power output at full sun conditions.
Following the successful installation of process equipment at the Dyesol-Pilkington North America joint venture, Dyetec Solar, activity has focussed on demonstrating equipment capability by producing large area tiles and new glass technology development. The activity is proceeding on time and within budget. This proof of concept phase precedes what is expected to be a significant up-scaling of development activity in Toledo during 2012.
During the quarter we completed installation of prototype manufacturing systems for G Energy a company linked with Tsinghua University in China, and for Acrosol in South Korea. In the Korean project, staff from the Dyesol Timo JV assisted the installation and commissioning. While our focus has been on partnership programs, these projects demonstrate Dyesol's ability to provide system solutions to a range of clients and position ourselves as an ongoing material and equipment supplier. In addition, during this quarter we received an order from the leading Japanese electronics company NEC for materials evaluation. This is a further demonstration of Dyesol's international reputation for technical excellence in the DSC sector.
Dyesol has been active in Australia, and benefitted from Australian government programs including the R&D Tax Rebate scheme and Enterprise Connect which assists businesses such as Dyesol in developing their business activities. The visit of the Australian Prime Minister to Dyesol HQ on 20th October was an extremely positive event, and greatly improved Dyesol visibility within Government and has resulted in ongoing dialogue with key relevant departments.
Dyesol introduced its new e-newsletter in December 2011. The aim of the newsletter is to better inform our shareholders and other stakeholders of Dyesol activities, DSC technology advancements and global trends. There was a positive response to the newsletter and a significant number of new subscribers gained. In addition, Dyesol has added a company YouTube channel to share video content and enhance our online communications.
Preparation is underway to upgrade our American depositary receipt program, now trading on the Over-The-Counter (OTC) Pink marketplace in the United States, to the top tier of the OTC market - the OTCQX. Once implemented, this will significantly increase our information transparency to US investors providing easier real time access to quotes, company announcements and other disclosures. We also expect this to translate into greater investment activity, especially as the activities in Toledo become more widely known.
We have now completed the transition from the equity line of credit agreement with SpringTree Special Opportunities Fund, LP to a new agreement with Bergen Asset Management, LLC. The new facility was considered to offer a number of improved features beneficial to Dyesol and its shareholders. Importantly, the facility provides access to flexible funding whilst the Company develops its global commercialisation strategy and puts in place strategic investments.
The net operating monthly burn rate for the second quarter was $900K in line with Company expectations. At the end of the quarter cash was $2.67M down from $4M at the end of the previous quarter with a new equity line of credit available of up to $21.2M. An R&D tax rebate of $0.73M was received after the end of the quarter. The company continues to look at options to lower cash burn while strengthening our technological leadership.
