updated 12/23/2010 12:16:39 PM ET 2010-12-23T17:16:39

TYNGSBORO, Mass., Dec. 23, 2010 (GLOBE NEWSWIRE) -- Beacon Power Corporation (Nasdaq:BCON), a leading provider of fast-response energy storage systems and services to support a more stable, reliable and efficient electricity grid, today announced that it has consummated the sale of an underwritten public offering of 10,000 units at a price to the public of $1,000 per unit, as previously announced on December 22, 2010, for initial gross proceeds of $10 million.

Each unit consists of one share of Beacon's newly designated Series B convertible preferred stock, with an initial stated value of $1,000 per share; one warrant to purchase an additional 0.5 of a share of preferred stock for an exercise price of $1,000 per share of preferred stock; and one warrant to purchase 4,458.27 shares of common stock at an exercise price of $0.25234 per share of common stock. The shares of preferred stock, the preferred stock warrants and the common stock warrants are immediately separable and will be issued separately. The preferred stock is convertible by the holders into common stock at an initial conversion price of $0.25234 per share, subject to adjustment.

Net proceeds, assuming no exercise of the warrants included in the units, and after underwriting discounts, commissions and estimated expenses, are approximately $8.9 million.  If the preferred stock warrants are exercised in full, Beacon will receive additional gross proceeds of $5 million, assuming none of the common warrants are exercised. Lazard Capital Markets LLC acted as the exclusive underwriter of the offering.

About Beacon Power

Beacon Power Corporation designs, develops and is commercializing advanced products and services to support stable, reliable and efficient electricity grid operation. Beacon's Smart Energy Matrix(TM), now in production, being operated and earning revenue, is a non-polluting, megawatt-scale, fast-response flywheel-based solution designed to provide less expensive, more sustainable and effective frequency regulation services to the nation's power grid. The Company's business strategy is both to supply frequency regulation services from its own plants and to sell systems directly to utilities or grid operators in parts of North America and selected international markets. Beacon is a publicly traded company with its research, development and manufacturing facility in the U.S. For more information, visit www.beaconpower.com.

Safe Harbor Statements under the Private Securities Litigation Reform Act of 1995: The Material contained in this press release may include statements that are not historical facts and are considered "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect Beacon Power Corporation's current views about future events, financial performances, and project development. These "forward-looking" statements are identified by the use of terms and phrases such as "will," "believe," "expect," "plan," "anticipate," and similar expressions identifying forward-looking statements. Investors should not rely on forward-looking statements because they are subject to a variety of risks, uncertainties, and other factors that could cause actual results to differ materially from Beacon's expectation. These factors include: a short operating history; a history of losses and anticipated continued losses from operations; the complexity and other challenges of arranging project financing and resources for one or more frequency regulation power plants, including uncertainty about whether we will be able to comply with the conditions or ongoing covenants of the Federal Financing Bank loan for our Stephentown, New York, facility; our need to comply with any disbursement or other conditions under the DOE Smart Grid grant program; a need to raise additional equity to fund Beacon's projects and our other operations in uncertain financial markets and at a time when the Company's stock price is rather low; conditions in target markets, such as that some ISOs are taking longer than others to comply with FERC's requirement to update market rules to include new technology such as the Company's, and also such as that frequency regulation pricing is lower in the short-term than at many times in the past; our ability to obtain site interconnection approvals, landlord approvals, or other zoning and construction approvals in a timely manner; limited experience manufacturing commercial products or supplying frequency regulation services on a commercial basis; limited commercial contracts for revenues to date; the dependence of revenues on the achievement of product optimization, manufacturing and commercialization milestones; dependence on third-party suppliers; intense competition from companies with greater financial resources, especially from companies that are already in the frequency regulation market; possible government regulation that would impede the ability to market products or services or affect market size; possible product liability claims and the negative publicity which could result; any failure to protect intellectual property; retaining key executives and the possible need in the future to hire and retain key executives; the historical volatility of our stock price, as well as the volatility of the stock price of other companies in the energy sector, especially in view of current conditions in the financial markets generally. These factors are elaborated upon and other factors may be disclosed from time to time in Beacon Power filings with the Securities and Exchange Commission. Beacon Power expressly does not undertake any duty to update forward-looking statements.

CONTACT:  Darrow Associates
          Investor Relations Contact:
          Chris Witty
          646-438-9385
          cwitty@darrowir.com

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