Smart grid play Ambient lands $5M

Smart grid technology company Ambient Corp. has raised $5 million from the conversion to securities of a "Holdback Account" established earlier by its majority stockholder, Vicis Capital LLC. Newton-based Ambient said it will use the new funds to boost stockholder equity and strengthen its balance sheet going into 2011.

According to Ambient officials, the original Holdback Account was created in 2009 as a hedge against the bad economy. Documents filed with the U.S. Securities and Exchange Commission show that the original agreement for the Holdback Account stated that Ambient (OTC Bulletin Board: ABTG) could draw from it if its cash reserves fell below $1.5 million, but officials said that Vicis elected to convert the warrants to cash now, even though Ambient’s cash reserves were above that threshold. However, in its quarterly report filed in November, Ambient listed just $1.04 million in cash and cash equivalents.

Ambient officials said the company finished the year with "a very strong backlog of orders for its smart grid communications technology." According to John J. Joyce, president and CEO of Ambient, the new investment will also allow the company to roll out new product lines, "for which we have already received orders."

Ambient booked a $10M order for its communication nodes last January.