Friday, October 10, 2008

Beacon Power plans to raise $7.9 million through securities sale

Tyngsborough-based flywheel energy technology developer Beacon Power Corp. has received a commitment from an unnamed investor to raise $7.9 million through a private placement of stock and warrants under a previously filed a shelf registration.

The company expects to use the net proceeds — $7.2 million after fees and expenses — to continue the manufacturing and commercial installation of its flywheel energy systems. The transaction is expected to close on October 15.

The offering will be separated into units, each consisting of one share of common stock with a par value of one cent and one warrant to purchase one share of the company’s common stock at an exercise price of $1.20 per share. Beacon Power (Nasdaq: BCON) aims to sell 8.7 million units at 91 cents per unit.

The warrants will be immediately separable from the units, and will be exercisable beginning six months and one day after the date of their issuance, and will expire five years after they become exercisable.

Beacon Power is building five megawatts of flywheel-based power capacity at its Tyngsborough facility as part of a grid-based alternative energy storage pilot program launched by ISO New England Inc., which is expected to be the company’s first commercial installation. The system  was originally designed using one flywheel, but last month the company announced that it has successfully tested its first “matrix,” which uses ten flywheels to store one megawatt of power, instantly available to the grid when needed.

The company intends to build four more of the units at its facility. Over the summer, the company landed $5 million in loan commitments from MassDevelopment’s Emerging Technology Fund and the Massachusetts Technology Collaborative.

A spinoff of Boston-based SatCon Technology Corp.’s Energy Systems division, Beacon Power was founded in 1997. The company went public in 2000, and last year reported $1.4 million in revenue on a $13 million loss.