Dyesol Commentary and Update – 3rd Quarter 2009

Highlights
Retains strong cash position – over $6.1 Million cash on hand
Burn rate drops by 24%
Revenue growth of over 70% re FY 2008
Cash inflows maintained
Operational expenditure prioritised to projects
Low capital expenditure
Solid order book for 4th Quarter and beyond
No debt
Now, three quarters through FY 2009, a year in which nearly all industrial companies have suffered a drastic drop in revenue and substantial reduction of cash, Dyesol continues to achieve revenue growth, with income at the end of the 3rd Quarter being 70% greater than that achieved for the whole FY2008. Meanwhile the company has substantially reduced cash burn rate while maintaining excellent progress on all projects. By the key measure of operational cash burn, Dyesol has reduced its expenditure by nearly $1M in the quarter, a reduction of 24% in burn. During the quarter, the company met another key milestone in our partnership project with Corus and announced the first stage commitments from projects in Korea and Turkey – moving the company closer to full commercialisation. Last week, at the Dyesol sponsored conference in Nara, Japan, attended by a record 250 delegates, Dyesol announced the achievement of over 12% efficiency for an industrial size tandem cell – demonstrating that the company is also expanding and strengthening its IP portfolio.

At the end of the quarter Dyesol has $6.137M at bank and continues to have no debt. The monthly burn rate for the quarter averaged $560K indicating that cash reserves are close to one year of operations. The employment levels at Dyesol are now steady as we have completed expansion of the team in the UK to meet the accelerated project schedule. Further business expansion in other jurisdictions will depend on additional funds being secured from partners, government or investors.

In investment activities, as announced in the previous quarter, Dyesol has continued to reduce expenditure on capital equipment as nearly all requirements for current projects have been committed.

Dyesol still holds all its cash as current deposits in top trading banks in Australia (CBA and Westpac/St George), UK (HSBC), Switzerland (Raiffeisen), Singapore (HSBC) and Italy (BPM).

During the quarter the company also confirmed supplier collaborations in Europe and commenced evaluation of outsourcing of equipment manufacture to specialist international equipment engineers, in order to reduce the need for further capital expansion.

The fourth quarter will bring further operating cash inflows from sales of services and equipment in Asia and Europe, growing materials sales and substantial grant payments in UK. Operational and investment cash flows are forecast to remain steady.

Dyesol enters the final quarter of FY2009 confident that the company will continue to grow through the current financial crisis and will be well placed to serve what the IEA and World Bank refer to as the Energy Revolution that could dominate industrial growth for the coming decades. Dyesol is well placed to address the worlds largest energy demand, the built environment due to the fact that our technology and products can operate in any light conditions and at any angle to the sun – a Unique Selling Proposition USP for Dyesol’s Dye Solar Cells.