001-36103 | 04-3536131 | |
(Commission File Number) | (IRS Employer Identification No.) | |
45 First Avenue | ||
Waltham, Massachusetts | 02451 | |
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of exchange on which registered |
Common Stock, $.001 par value per share | TGEN | NASDAQ |
TECOGEN INC. | ||
By: /s/ Bonnie Brown | ||
November 12, 2019 | Bonnie Brown, Principal Financial & Accounting Officer |
• | Chiller revenues highlighted the quarter with 94% growth and the sale of our first Tecofrost unit. |
• | Total revenues were $8.7 million in the third quarter of 2019, a 9% increase from the same period in 2018. |
• | Energy production revenue for the quarter was $0.6 million, a reduction from the previous year’s total by $1.5 million. This decline is due to the sale of certain energy producing assets in the first quarter of this year. |
• | Overall gross margin decreased from 36% to 33%, resulting in gross profit of $2.8 million for the quarter. |
• | Net loss for the three months ended September 30, 2019 was $586,249 compared to $603,037 for the same period in 2018, an improvement of $16,788 or 3%, year over year. |
• | Net loss per share was $0.02 for both the third quarter of 2019 and 2018. |
• | Adjusted EBITDA(1), excluding goodwill impairment, unrealized gain or loss on marketable equity securities, stock-compensation expense and merger related expenses, was positive $51,299 for the nine months ended September 30, 2019 compared to negative $284,707 for the same period in 2018, an improvement of $336,006. |
• | Adjusted EBITDA(1), excluding unrealized gain or loss on marketable equity securities, stock-compensation expense and merger related expenses, was negative $421,757 for the third quarter of 2019 compared to negative $258,655 for the third quarter of 2018, a decrease of $163,102. |
• | Sold Five STx Tecochill units to a brand new, state-of-the-art ice skating complex in the eastern US. |
• | Sold two 400-ton Tecochill units to a cannabis cultivation facility located in southeastern US. |
• | Sold additional chillers to a Connecticut university and a large New York residential building. |
• | Awarded a contract to supply 950 kW of Tecogen cogeneration systems to a prominent energy services company (ESCO) for eight schools in New York. |
• | Sold the first new Tecofrost system to a skating rink in Massachusetts. |
• | Expanding our manufacturer’s representatives (Rep) network to address applications for our products in areas with grid resiliency concerns. |
• | Current sales backlog of equipment and installations as of November 8, 2019 is $23 million, comprised of $8 million of installation services and $15 million of products. |
• | Ultera Emissions System - Forklift Truck Application. Engineering specialists from Mitsubishi Caterpillar Forklift America Inc. (MCFA) and their engine supplier, a Japanese affiliate, visited Tecogen in October to complete the engine tuning. The work was successful in accomplishing its goal of optimizing the efficiency of the Ultera after treatment process for NOx (nitrogen oxides) removal. The data is under review by MCFA while next steps are considered. |
• | Ultera Emissions System - Stationary Engines. The Company has completed the design of an upscaled Ultera system under a contract from a municipal water pumping district in Southern California. The design, configured to match two 800-horsepower Caterpillar engines, was submitted to the district for review and subsequently accepted. Orders for the Ultera kits are expected in early 2020. |
• | The company received an Ultera inquiry from a second Southern California water district in September. District management expressed resistance to electrification of their gas engine pump drives and have received positive feedback from employees that had previously worked at a nearby district utilizing the Tecogen Ultera technology. |
• | Ultera Emissions System - Automotive Catalyst Development. In the first phase of a program to advance the Ultera technology for mobile applications, our research activities identified a promising catalyst material to improve performance of the Ultera process. We anticipate receiving test results from the |
September 30, 2019 | December 31, 2018 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 780,740 | $ | 272,552 | |||
Accounts receivable, net | 13,049,383 | 14,176,452 | |||||
Unbilled revenue | 5,058,634 | 4,893,259 | |||||
Inventory, net | 7,058,466 | 6,294,862 | |||||
Due from related party | — | 9,405 | |||||
Prepaid and other current assets | 644,821 | 722,042 | |||||
Total current assets | 26,592,044 | 26,368,572 | |||||
Property, plant and equipment, net | 3,603,709 | 11,273,115 | |||||
Right of use assets | 2,294,951 | — | |||||
Intangible assets, net | 1,572,085 | 2,893,990 | |||||
Goodwill | 5,281,867 | 8,975,065 | |||||
Other assets | 609,666 | 393,651 | |||||
TOTAL ASSETS | $ | 39,954,322 | $ | 49,904,393 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Revolving line of credit, bank | $ | 940,576 | $ | 2,009,435 | |||
Accounts payable | 6,487,743 | 7,153,330 | |||||
Accrued expenses | 2,015,111 | 1,528,014 | |||||
Deferred revenue | 1,596,416 | 2,507,541 | |||||
Lease obligations, current | 530,481 | — | |||||
Total current liabilities | 11,570,327 | 13,198,320 | |||||
Long-term liabilities: | |||||||
Deferred revenue, net of current portion | 157,215 | 2,375,700 | |||||
Lease obligations, long-term | 1,764,470 | — | |||||
Unfavorable contract liability, net | 2,644,658 | 6,292,599 | |||||
Total liabilities | 16,136,670 | 21,866,619 | |||||
Commitments and contingencies (Note 11) | |||||||
Stockholders’ equity: | |||||||
Tecogen Inc. stockholders’ equity: | |||||||
Common stock, $0.001 par value; 100,000,000 shares authorized; 24,843,261 and 24,824,746 issued and outstanding at September 30, 2019 and December 31, 2018, respectively | 24,843 | 24,825 | |||||
Additional paid-in capital | 56,573,920 | 56,427,928 | |||||
Accumulated deficit | (32,893,550 | ) | (28,670,095 | ) | |||
Total Tecogen Inc. stockholders’ equity | 23,705,213 | 27,782,658 | |||||
Noncontrolling interest | 112,439 | 255,116 | |||||
Total stockholders’ equity | 23,817,652 | 28,037,774 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 39,954,322 | $ | 49,904,393 |
Three Months Ended | |||||||
September 30, 2019 | September 30, 2018 | ||||||
Revenues | |||||||
Products | $ | 3,790,291 | $ | 2,765,094 | |||
Services | 4,248,584 | 3,713,770 | |||||
Energy production | 631,602 | 1,459,820 | |||||
Total revenues | 8,670,477 | 7,938,684 | |||||
Cost of sales | |||||||
Products | 2,515,605 | 1,695,347 | |||||
Services | 3,029,702 | 2,517,210 | |||||
Energy production | 293,929 | 843,029 | |||||
Total cost of sales | 5,839,236 | 5,055,586 | |||||
Gross profit | 2,831,241 | 2,883,098 | |||||
Operating expenses | |||||||
General and administrative | 2,333,887 | 2,582,600 | |||||
Selling | 669,720 | 581,716 | |||||
Research and development | 365,817 | 281,094 | |||||
Total operating expenses | 3,369,424 | 3,445,410 | |||||
Loss from operations | (538,183 | ) | (562,312 | ) | |||
Other income (expense) | |||||||
Interest income | 192 | 4,168 | |||||
Interest expense | (18,516 | ) | (33,380 | ) | |||
Unrealized gain (loss) on investment securities | — | 19,681 | |||||
Total other income (expense), net | (18,324 | ) | (9,531 | ) | |||
Loss before provision for state income taxes | (556,507 | ) | (571,843 | ) | |||
Provision for state income taxes | 7,881 | 3,815 | |||||
Consolidated net loss | (564,388 | ) | (575,658 | ) | |||
Income attributable to the noncontrolling interest | (21,861 | ) | (27,379 | ) | |||
Net loss attributable to Tecogen Inc. | $ | (586,249 | ) | $ | (603,037 | ) | |
Net loss per share - basic and diluted | $ | (0.02 | ) | $ | (0.02 | ) | |
Weighted average shares outstanding - basic and diluted | 24,843,177 | 24,819,056 |
Non-GAAP financial disclosure (1) | |||||||
Net loss attributable to Tecogen Inc. | $ | (586,249 | ) | $ | (603,037 | ) | |
Interest expense, net | 18,324 | 29,212 | |||||
Income taxes | 7,881 | 3,815 | |||||
Depreciation & amortization, net | 95,616 | 199,938 | |||||
EBITDA | (464,428 | ) | (370,072 | ) | |||
Stock based compensation | 42,671 | 55,330 | |||||
Unrealized (gain) loss on investment securities | — | (19,681 | ) | ||||
Merger related expenses | — | 75,768 | |||||
Adjusted EBITDA | $ | (421,757 | ) | $ | (258,655 | ) |
Nine Months Ended | |||||||
September 30, 2019 | September 30, 2018 | ||||||
Revenues | |||||||
Products | $ | 9,260,265 | $ | 8,922,257 | |||
Services | 13,003,529 | 12,894,439 | |||||
Energy production | 2,450,710 | 4,750,580 | |||||
Total revenues | 24,714,504 | 26,567,276 | |||||
Cost of sales | |||||||
Products | 6,005,819 | 5,596,272 | |||||
Services | 8,034,410 | 8,262,104 | |||||
Energy production | 1,458,360 | 2,828,405 | |||||
Total cost of sales | 15,498,589 | 16,686,781 | |||||
Gross profit | 9,215,915 | 9,880,495 | |||||
Operating expenses | |||||||
General and administrative | 7,672,550 | 8,122,856 | |||||
Selling | 2,067,674 | 1,892,229 | |||||
Research and development | 1,083,444 | 993,102 | |||||
Gain on sale of assets | (1,081,049 | ) | — | ||||
Goodwill impairment | 3,693,198 | — | |||||
Total operating expenses | 13,435,817 | 11,008,187 | |||||
Loss from operations | (4,219,902 | ) | (1,127,692 | ) | |||
Other income (expense) | |||||||
Interest income | 790 | 7,926 | |||||
Interest expense | (63,547 | ) | (56,195 | ) | |||
Unrealized loss on investment securities | (19,680 | ) | (59,042 | ) | |||
Total other expense, net | (82,437 | ) | (107,311 | ) | |||
Loss before provision for state income taxes | (4,302,339 | ) | (1,235,003 | ) | |||
Provision for state income taxes | 15,667 | 42,679 | |||||
Consolidated net loss | (4,318,006 | ) | (1,277,682 | ) | |||
(Income) loss attributable to the noncontrolling interest | 94,551 | (58,946 | ) | ||||
Net loss attributable to Tecogen Inc. | $ | (4,223,455 | ) | (1,336,628 | ) | ||
Net loss per share - basic and diluted | $ | (0.17 | ) | $ | (0.05 | ) | |
Weighted average shares outstanding - basic and diluted | 24,838,367 | 24,813,936 |
Non-GAAP financial disclosure (1) | |||||||
Net loss attributable to Tecogen Inc. | $ | (4,223,455 | ) | $ | (1,336,628 | ) | |
Interest & other expense, net | 62,757 | 48,269 | |||||
Income taxes | 15,667 | 42,679 | |||||
Depreciation & amortization, net | 362,848 | 586,188 | |||||
EBITDA | (3,782,183 | ) | (659,492 | ) | |||
Stock based compensation | 120,604 | 133,808 | |||||
Unrealized (gain) loss on marketable securities | 19,680 | 59,042 | |||||
Merger related expenses | — | 181,935 | |||||
Goodwill impairment | 3,693,198 | — | |||||
Adjusted EBITDA | $ | 51,299 | $ | (284,707 | ) |
Nine Months Ended | |||||||
September 30, 2019 | September 30, 2018 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Consolidated net loss | $ | (4,318,006 | ) | $ | (1,277,682 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation, accretion and amortization, net | 362,848 | 586,188 | |||||
Gain on contract termination | — | (124,732 | ) | ||||
Provision on inventory reserve | — | 1,000 | |||||
Stock-based compensation | 120,604 | 133,808 | |||||
Goodwill impairment | 3,693,198 | — | |||||
(Gain) loss on sale of assets | (1,081,049 | ) | 13,343 | ||||
Provision for losses on accounts receivable | 29,849 | 4,395 | |||||
Non-cash interest expense | 36,252 | — | |||||
Changes in operating assets and liabilities, net of effects of acquisitions | |||||||
(Increase) decrease in: | |||||||
Accounts receivable | 1,097,220 | (1,840,150 | ) | ||||
Unbilled revenue | (165,375 | ) | (245,892 | ) | |||
Inventory | (763,604 | ) | (853,262 | ) | |||
Due from related party | 9,405 | 585,492 | |||||
Prepaid expenses and other current assets | (19,586 | ) | (43,743 | ) | |||
Other non-current assets | (216,015 | ) | 54,741 | ||||
Increase (decrease) in: | |||||||
Accounts payable | (665,587 | ) | (262,925 | ) | |||
Accrued expenses and other current liabilities | (203,262 | ) | 779,945 | ||||
Deferred revenue | (1,142,575 | ) | 185,059 | ||||
Interest payable, related party | — | (52,265 | ) | ||||
Net cash used in operating activities | (3,225,683 | ) | (2,356,680 | ) | |||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Purchases of property and equipment | (73,642 | ) | (273,814 | ) | |||
Proceeds from sale of assets | 5,000,000 | 3,606 | |||||
Purchases of intangible assets | (64,656 | ) | (203,648 | ) | |||
Cash acquired in asset acquisition | — | 442,746 | |||||
Expenses associated with asset acquisition | — | (900 | ) | ||||
Payment of stock issuance costs | (1,011 | ) | (908 | ) | |||
Distributions to noncontrolling interest | (48,127 | ) | (68,950 | ) | |||
Net cash provided by (used in) investing activities | 4,812,564 | (101,868 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Proceeds (payments) on revolving line of credit, net | (1,105,111 | ) | 1,853,899 | ||||
Payments for debt issuance costs | — | (145,011 | ) | ||||
Proceeds from the exercise of stock options | 26,418 | 63,305 | |||||
Payment on loan due to related party | — | (850,000 | ) | ||||
Net cash provided by (used in) financing activities | (1,078,693 | ) | 922,193 | ||||
Change in cash and cash equivalents | 508,188 | (1,536,355 | ) | ||||
Cash and cash equivalents, beginning of the period | 272,552 | 1,673,072 | |||||
Cash and cash equivalents, end of the period | $ | 780,740 | $ | 136,717 | |||
Supplemental disclosures of cash flows information: | |||||||
Cash paid for interest | $ | 24,729 | $ | 112,460 | |||
Cash paid for taxes | $ | 29,205 | $ | 44,864 |
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