Beacon Power Corporation (Nasdaq: BCON), a company that designs and
develops advanced products and services to support more stable, reliable
and efficient electricity grid operation, announced that it has entered
into a common stock purchase agreement with Seaside 88, LP (“Seaside”),
valued at up to $18 million. The agreement requires Seaside to buy $1
million of Beacon common stock from the Company once each month for up
to 18 months, beginning on February 20, 2009, and on the 20th day of
each month thereafter (or the next closest business day).
“We expect this agreement to provide some of the funds necessary to
manufacture our flywheel systems and the containers to house them,” said
Bill Capp, Beacon Power president and CEO. “The structure of this
agreement, with its reasonable pause and extension options, gives us
considerable flexibility to minimize shareholder dilution as we execute
our business plan.”
“In addition to this financing,” Capp continued, “we remain optimistic
about receiving a loan under the Department of Energy’s loan guarantee
program. Our application is in the final stage of due diligence. The
loan would cover a majority of the capital requirements for our 20 MW
frequency regulation plant in Stephentown, New York.”
The agreement is structured in three six-month tranches, or segments,
each covering monthly closings of $1 million each, for up to $6 million
total. Beacon is committed to only the first six-month tranche, but has
the option, exercisable at the Company’s sole discretion, to extend the
agreement for up to two additional six-month periods (each for up to $6
million), for a total of up to $18 million over the three tranches.
Beacon has paid Seaside $100,000 for the right to exercise the first
optional extension (although it has not actually exercised that
extension), and would pay an additional $50,000 if it wishes to exercise
the second such extension. Additionally, the Company at its sole
discretion can freeze the monthly transactions for up to six months by
paying a fee to Seaside of $100,000.
At each monthly closing, the number of shares of common stock to be
issued will be determined by applying a 20% discount to the weighted
average trading price during the five trading days preceding the
closing. If in any month the five-day weighted average trading price of
the Company’s common stock is below $0.25, then the closing for that
month will not occur and will not be made up.
