Beacon Dims on New Financing (BCON)

Beacon Power Corporation (NASDAQ:BCON) is developing a patented flywheel energy storage product, and the going is getting tough. The company today announced an $18 million investment from a private equity firm and the share price is heading toward a new 52-week low.

Under the terms of the deal, private equity firm Seaside 88 LP, will purchase $1 million worth of Beacon stock on the 20th day of each of the next 18 months. The deal is structured in three segments of six months each. Beacon is only committed to the first six-month segment. The company has applied for a loan from the US Department of Energy, and if and when the loan comes through, the deal with Seaside could be canceled. The maximum number of shares Seaside may acquire cannot exceed 19.9% of Beacon’s total outstanding.

Shareholders don’t like the promise of dilution, and have taken the shares down about 13% this morning. Beacon shares have traded in a 52-week range of $0.35-$2.18.

Paul Ausick
February 20, 2009