PHOTON International The Photovoltaic Magazine

Flywheel company Beacon Power goes solar to improve business

Beacon Power Corporation, a manufacturer of flywheels for energy storage, announced its second quarter results on Aug. 14. But while the results won't make investors smile, the company's new direction may. Beacon plans to shift the focus of its business, letting its flywheel technology hibernate and enter the PV market.

»Our main focus is on PV now,« says Gene Hunt, director of corporate communications at Beacon. »For the flywheel technology, we are looking for a partner to help us further its development.«

That the company's losses have shrunken is encouraging. For the second quarter ended June 30, the Wilmington, Massachusetts-based company reported a net loss of $2.22 million, compared to $4.04 million in the second quarter of 2002. Its operating expenses were down, at $1.26 million, from $1.47 million in the same period in 2002, as was R&D, at $950,000, from $1.77 million. As the company has not made any revenues in the last two years, by the end of June, losses had accumulated to $119.37 million since its incorporation on May 8, 1997.

The same day Beacon published second quarter results, it announced that the Nasdaq Listing Qualifications Panel has revised a June 6 decision to delist the company's stock from the SmallCap Market. Since Jan. 29, 2002, Beacon stock has been trading under $1 – Nasdaq's lower share price limit for a company listing. Following a hearing at the Nasdaq panel requested by Beacon on July 18, the company was granted a listing until Oct. 6, 2003, although the share price was still well below the limit: on Aug. 14, the day the information was published, it closed at 29¢; on Aug. 15 it increased to 38¢.

There is a chance that the period to meet the listing criteria even may be extended. According to Beacon, the panel has proposed to the Securities and Exchange Commission to grant 360 more days to reach the $1 goal. While the official reasons for the Nasdaq panel's decision are unknown, it's likely that Beacon's plan to move into PV turned the balance. In March, it purchased patents from liquidated inverter company Advanced Energy Inc. for $141,000; the start of sales of a first on-grid inverter is slated for September (see PI 9/2003, p. 30). Moreover, Beacon purchased $1.2 million of stock in Evergreen Solar Inc. As for the dramatic increase in sales volume and leap of the share price to 94¢ on Aug. 19, there is probably a different explanation. Three days later, Beacon announced that two top managers sold shares to repay loans they received from the company. On Aug. 20, the price had fallen to 62¢. During September Beacon's share price strongly fluctuated: the stock was trading between 61¢ and $1.12, but never closed above Nasdaq's critical $1 mark.