Beacon Power has received a commitment for $25 million of new investment in the company. The capital will be used to fund ongoing operations, including the manufacturing and deployment of Smart Energy 25 flywheels and the construction of the company's frequency regulation plant.

The frequency regulation plant is expected to have 10MW to 20MW of service capability by the end of 2008.

The investment was made by three current Beacon investors, with the largest share of the transaction being made by the Quercus Trust. The investors agreed to an at-market purchase of approximately 11.9 million units for $2.10 per unit. The transaction is expected to close on October 31, 2007.

Each unit consists of one share of the company’s common stock, par value $0.01 per share, and one warrant to purchase 0.95 of a share of the company’s common stock at an exercise price of $2.97 per share. The net proceeds to the company are expected to be approximately $23,757,000 after deducting placement agency fees and estimated expenses.

The warrants are 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 and one half years after the date of their issuance.