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NGEN Leads Fallbrook Investment

Published January 12, 2009

SAN DIEGO, CA (BRAIN)—Fallbrook Technologies Inc. (Fallbrook), a pioneering technology company dedicated to improving the performance and flexibility of transmissions for engine and human powered devices, has completed the first close of a $25.4 million financing round.

NGEN III, LP provided $10 million as the lead investor. Robeco, the investment arm of Rabobank of The Netherlands, provided an additional $10 million from its Clean Tech Private Equity funds. Windstone Capital Partners, Inc. of Scottsdale, Arizona provided advisory support for the round.

The investment will enable Fallbrook to continue the commercialization of its NuVinci continuously variable planetary (CVP) transmission, and to accelerate the development of advanced technologies. A number of applications of NuVinci technology—both current and projected—represent significant clean technology opportunities.

This is Fallbrook’s first venture-financed round; previous financing for the company was done through private equity investment.

“We’re convinced that NuVinci technology, already commercialized for bicycles, can revolutionize a wide range of cleantech market segments,” said Steven E. Parry, managing director of NGEN. “The investment in Fallbrook reflects our commitment to help companies who are leading the way to a more sustainable energy future.”

“NuVinci technology has enormous potential to add value in the bicycle, electric vehicle and automotive industries,” said Keimpe Keuning, senior investment manager at Robeco. “Robeco, through its Clean Tech Private Equity funds, is dedicated to the clean technology space. Because of the technological advantages Fallbrook can bring, this investment fits very well within our investment strategy.”

Under terms of the agreement, both Parry and Keuning will join Fallbrook’s board of directors.

“Closing a $25 million finance round in this economy is a huge validation of NuVinci technology and its "game-changing" potential—particularly in the cleantech area,” said William G. Klehm III, Fallbrook’s president and CEO. “This investment positions us to make major gains in both market reach and market share worldwide.”

NuVinci technology is the most practical, economical and universally adaptable continuously variable transmission for human—and motor-powered vehicles and machines. The NuVinci CVP uses a set of rotating and tilting balls positioned between the input and output components of a transmission. Tilting the balls changes their contact diameters and varies the speed ratio.

The NuVinci CVP can be used in virtually any transmission-based vehicle or device—from bicycles and outdoor power equipment to cars, trucks and wind turbines. It's already on track to expand the number of bicycles used for transportation and it enables the design and manufacture of a wide range of electric and hybrid vehicles that have the speed, range and hill-climbing capability to be genuine transportation alternatives. When used with vehicle accessory drives, a NuVinci CVP can improve performance and increase fuel efficiency. Additionally, a study conducted by the National Renewable Energy Laboratory (NREL) showed that, when used in a wind turbine, NuVinci technology can significantly reduce the cost of producing energy.

Since coming into the market in late 2006, market acceptance and penetration for the NuVinci CVP has increased steadily— particularly in the bike and electric vehicle industries, and especially in Europe. Originally formed with an IP licensing business model, Fallbrook, in March 2008, also became a manufacturing and marketing company for certain applications. MTD Products Inc physically manufactures the NuVinci CVP for bicycles and light electric vehicles in its Leitchfield, Kentucky, facility under agreement with Fallbrook.

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