Millennium Cell Inc. (NASDAQ: MCEL) has reported a net loss for the quarter ended June 30, 2006 of $4.7 million, or $0.10 per share, as compared to a net loss of $5.8 million, or $0.14 per share in the same period of 2005.
Cash used in operating and investing activities during the quarter was $1.6 million as compared to $2.3 million in the prior year, a decrease of $0.7 million, primarily attributable to lower professional fees and increased cost reimbursements related to participation in government programs.
“We have made significant progress in the first half of 2006 towards meeting our full year objectives. We have succeeded in moving our exciting programs and partnerships forward, obtaining new government contracts, as well as building new relationships with fuel cell developers and potential OEM partners,” commented H. David Ramm, CEO.
“Regarding existing programs and partnerships, our partner, Protonex Technology Corporation, delivered the P2 soldier power system to the U.S. Air Force in May for evaluation and testing. This system, which combines a Protonex fuel cell with our hydrogen storage technology, is smaller, lighter and more cost efficient than the batteries currently in use by the military for a wide range of portable applications. As a result of the delivery of the P2, which marked the successful completion of the multi-year Dual Use Science and Technology (DUST) program awarded by the Air Force in April 2003, the Air Force Research Laboratory (AFRL) notified both Protonex and Millennium Cell that it intends to award an additional $1.2 million for enhancements to the P2 system and procurement for field testing. This has been an extremely successful collaboration for us and we are working diligently with Protonex to move the product toward full qualification by the military.”
Mr. Ramm continued, “In addition, during the quarter the Company was awarded two separate Small Business Innovation Research Grants which are in the process of being contracted. The first one is a Phase 1 program for the Air Force Research Laboratory to develop a sodium borohydride based fuel cartridge that can be operated with ready-to-use, premixed solutions of sodium borohydride or, alternatively, with solid fuel packets that can be combined with available field water or bodily fluids. The objective of this program is to develop a power source for soldiers that will be energy dense but lighter in weight than traditional batteries used today by airmen in the field.”
“Our second award was from the U.S. Army Tank-automotive and Armaments Command for a $730,000 Phase ll program. This is a two year contract to design and build a fully modular 500 watt power system with the ability to use available field water. We will be developing this system with our subcontractor, ReliOn, a Spokane based fuel cell manufacturer that is a leader in the development and marketing of modular, cartridge-based, PEM fuel cells for stationary and backup power applications. This is an exciting new relationship for the Company.”
“Finally, as a result of meeting our first milestone under our joint development program with The Dow Chemical Company (“Dow”), the Company issued 138,150 shares of Series A-2 Preferred Stock to Dow for their efforts to meet the milestone. In addition, Dow exercised its option to purchase $1.25 million of the Company’s Series B-1 Convertible Preferred Stock. Dow has also committed to continue its human resource commitment towards achievement of the second milestone. We are encouraged by the performance of all involved and look forward to their continued involvement as we work to develop hydrogen batteries for the portable device market,” said Mr. Ramm.
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