Wednesday, December 22, 2010

Beacon Power plans on $15M stock offering

By Kyle Alspach

Beacon Power Corp. expects to raise gross proceeds of up to $15 million from a public offering of a newly-designated Series B convertible preferred stock, the company said Wednesday.

The Tyngsboro-based company, a maker of flywheel power storage technology, is selling 10,000 “units” to the public for $1,000 per unit. Each unit includes one share of the Series B convertible preferred stock with an initial value of $1,000, one warrant to buy a half share of preferred stock for $1,000 per share and one warrant to buy 4,458.27 shares of common stock at a price of roughly 25 cents per share.

The offering is expected to close on Thursday. Beacon (Nasdaq: BCON) said it plans to use net proceeds from the offering for general corporate purposes and ongoing working capital requirements. The company is currently putting much of its cash into its first energy storage plant in Stephentown, N.Y., which the company hopes will be connected to the New York state power grid by the end of the year. The connection would mark the start of commercial revenue for Beacon Power.

The flywheel plant is intended to stabilize and enhance the performance of the New York grid, and Beacon expects it will have four megawatts of grid regulation available following the connection. The company expects to have the plant finished — and have all 20 megawatts available for grid regulation — by April.

Earlier this month, the Nasdaq Stock Market ruled against de-listing the company’s sub-$1 stock, though the company must meet compliance with Nasdaq rules by March 14.

Founded in 1997, Beacon Power spun out of Boston-based SatCon Technology Corp.’s Energy Systems division. The company went public in 2000 but has struggled with sub-$1 stock prices for years, receiving a stock noncompliance warning from Nasdaq as far back as 2005.