Millennium Cell Inc. (NASDAQ: MCEL), a leading developer of hydrogen battery technology reported a net loss for the quarter ended September 30, 2005 of $3.4 million, or $0.08 per share, as compared to $2.3 million, or $0.06 per share in the same period of 2004.
The increase in net loss is attributable to non-cash interest expense incurred to convert a substantial portion of its convertible instruments during the third quarter. In addition, professional fees increased over the same quarter in the prior year. The results were within expectations for the third quarter.
The company said it made several improvements to its balance sheet during the quarter. Firstly, nearly half of the $10 million of Series C Preferred Stock, issued in April 2005, were converted into common stock. Secondly, the remaining $1.0 million of unsecured debentures were converted into common stock. Lastly, Ballard Power Systems sold $2.4 million of its secured debentures to a group of accredited institutional investors. Millennium Cell and the new holders of the debentures are currently working to modify the terms of the secured debentures with the goal of releasing the restricted cash for use in operations.
“Actions taken by Millennium Cell and by major stockholders this quarter have dramatically improved the health of our balance sheet. We are pleased to report this activity and look forward to continuing to meet our business objectives in a fiscally responsible manner,” stated John D. Giolli, Millennium Cell Chief Financial Officer.
“In addition to these financial accomplishments, we have recently announced that the U.S. Army is funding the development of a portable 30 watt soldier power product (the “P2″) that our licensee, Protonex Technology Corporation is on track to publicly demonstrate in the fourth quarter,” commented H. David Ramm, Millennium Cell Chief Executive Officer. “We expect the Air Force to begin field testing early next year and Protonex to begin low volume shipments to support this effort in early 2006.
Mr. Ramm continued, “While the military has clearly emerged as our lead market in the near term, we view the P2 as an attractive replacement for batteries in selected applications in the medical and industrial markets. With regard to consumer electronics markets, we continue to interact with the Intel-sponsored Extended Battery Life Working Group and through focus groups are evaluating the value proposition provided by our technology in notebook PCs. Initial feedback is encouraging. Finally, as part of our effort to increase the number of licensees, we are actively pursuing additional collaborative opportunities with other potential OEM and fuel cell partners and look forward to updating you on our progress.”
To listen to a live broadcast of the conference call over the Internet or to review the archived call, please visit the website under the “Investor Relations” section.
Millennium Cell develops hydrogen battery technology through a patented chemical process that safely stores and delivers hydrogen energy to power portable devices. The borohydride-based technology can be scaled to fit any application requiring high energy density for a long run time in a compact space. The Company is working with market partners to meet demand for its patented process in four areas: military, medical, industrial and consumer electronics.
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