BCON logoBeacon Power Corporation (Nasdaq: BCON) engages in the development of products and services for the support of stable electricity grid operations. The company offers the Smart Energy Matrix product based on a patented flywheel energy storage technology. Beacon provides sustainable frequency regulation service, which is non-polluting and operates at megawatt levels. To put it more simply, the company's products allow for storing energy when it's not required and allocating it when the need arises.

Beacon's revenue from operations has been decreasing for a whole year and their net loss has been widening accordingly . For the three months end March 31, 2008, Beacon reported revenue of only $20 thousand which resulted in a net loss of nearly $5.3 million. The decrease in revenue is mostly related to the expiration of contracts with California, New York and the U.S. Department of Energy.

Investors might find such an event alarming, however the company seems to have already planned ahead. Beacon plans to enter the production stage, which should produce revenues from the sale of frequency regulation facilities in the 4th quarter of 2008. Such facilities are planned to be built in New York and New England. The company is also pursuing other locations.

According to their latest SEC filing the company had $25 million in cash on March 31, 2008. Considering Beacon will continue burning an average of $5 million per quarter, on SG&A and R&D expenses, they should be able to continue operations for at least another year without raising a concern. The construction of frequency regulation facilities however will require additional capital. The company plans to raise additional $20 million through project finance and equity transactions.

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Currently the most interesting part of the company is their skyrocketing share price. The stock has had several major rushes, the first on May 16, after the company announced they got the necessary permits to begin construction of their first 20-megawatt flywheel frequency regulation plant in Stephentown, New York. The second rally up occurred at May 23; the analyst Theodore O'Neill at Kaufman Bros. initiated buy rating with the price target of $3. This sounded really promising and the stock keeps hitting new highs - on June 3, it went as high as $2.14 which was its highest level over the past 7 months.