Daystar Obtains Bridge Financing

DayStar Technologies, Inc. (Nasdaq: DSTI), the early developer of CIGS solar cells, who The Energy Blog has reported on previously, has raised a $5mm bridge loan from a group of six investors, Millennium Partners being the largest funder. The money will help carry the company while it raises significantly more capital to be used for the building of a production line in Malta.

According the Albany Times Union,the Halfmoon, NY-based solar cell manufacturer is seeking as much as $30 million for a new manufacturing facility in Malta but has said it needs funding just to keep operating past the first quarter of this year.

A new manufacturing facility is key to DayStar's business plan. The company lost nearly $15 million through the first nine months of 2006 and needs increased manufacturing capability to boost sales and turn a profit.

Founder John Tuttle, who brought the company from California to Saratoga County in 2004, was replaced as CEO by Stephan DeLuca in November. Randolph A. Graves, Jr., a member of DayStar’s board of directors since October 2003, was elected by the board of directors to serve as Chairman of the Board, replacing Tuttle, who will remain a member of the board until the next annual meeting.  Tuttle resigned as Chief Development Officer of DayStar Technologies, Inc. to pursue other opportunities. The company is operating without a chief financial officer.

Thanks to Rob Day of Cleantech Investing for the tip

This financing and changes in corporate structure confirm my suspicions that the company was suffering financial problems.  It would be a shame to see this innovating company not to be able to succeed.

Comments

[karl (how is that losing money?)]

This is the (at least) third time the expression occurs, and it's particularly absurd for solar energy to say that because a company isn't raking in more then they are spending it is somehow "losing" money.

The people who are buying overpriced PV might be losing money, but not this company in selling to them.

Shareholder equity has not been lost. Purchases have not been liquidated below cost.

Getting additional money put in is not a sign that money already in has been poorly invested- it is of course just the opposite, good money following good.

Microsoft is moving to a leasing model. Lighting is often leased based upon the energy savings, not sold. It's the business model that is masking the problem. They sell long term energy sources for a fixed price up front. WIth this price they are expected to pay all there bills? Regardless of how high competitors prices go in the future?

At some point you have taken your profits and are done. That is if you sell instead of lease. When PV starts offering leasing, as utilities have pretended to siting regional plants, then it will be scalable. Yet we see contracts to sell, not lease, to governments.

PV is like land. It can be leased to nations if they are secure enough. Some nations will pay a tremendous amount for a five year demonstration lease- like half the cost of a at least twenty year life panel. Instead, this company seeks venture capital. Instead of borrowing money at a fixed rate secured by there contracts. Greed?

http://timesunion.com/AspStories/story.asp?storyID=557415&category=BUSINESS&BCCode=HOME&newsdate=1/26/2007

[Greg Woulf]

Leasing takes up front money.

If they had enough money to build the panels for free and then lease them then they wouldn't need the money to up production.

I totally agree that the most beneficial situation for panel producers is leasing, but that doesn't solve the short term money crunch.

[karl (what money crunch?)]

By greed I meant the obvious, that which we already know. That people will spend or invest tons of money with little concern for the risk if the potential good, not just profit, is understood to them.

The risk is only price. That it will come down, that the ability to repay the loans will not be there.

But this speaks to the merits, something leasing does not have to. When we buy a home, there is some risk to the guaranter, increasingly so, that if we are godless, if we are smart, if we have too good credit, we will not make payments if it's in our interest to default and refinance for actual value even though the terms will absorb some of the savings with slightly higher interest.

It is not possible to contract against this right. Not possible to contract for debt for PV that is not dischargable at our whim if not payable back in a mere half decade.

ALL THAT HAS TO HAPPEN IS THAT PV ETC. be given an exception, like taxes, educational AND / OR VOCATIONAL incurred debt, OR EVEN PUNITIVEly imposed amount have.

Then the good consumers will sign. Gladdly. WIth a video of an interview by however many shrinks that they consent.

it's our money we put forth every month. We should have the right to borrow if properly informed, if sane, if we prove both of these things.

What a different world the world would be if we did. If Sears didn't suffer under the searing fact of the need to write off high seer HVAC for any customer who after a few payments on long term financing loses there job or just does not want to pay after learning that they own the equipment and at most can only be forced to pay what someone Sears finds would pay in short order at a random point would for the entire home less debt and of course subject to exemptions that not just sociopaths who kill there partners and there competitors make all to consequentially evil use of.
(for more on this anyone can research bankruptcy's evil in deterring the evolution of contract law)

Volume means dealing with strangers. Dealing with rational actors influenced by the limits legally of there discretion.

So then while we can't so contract, our legislators and regulators are wined and dined, accept bribes, are idiots and know nothings, making much worse deals. Deals we can't get out of. For highways. For Power plants. For sickness and war for more 'business' as usual, more suffering and chaos more madness.

It's not in the details every time. The devil is in thinking that currency should be printed on silicon. And making it illegal to do so.

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