tgen-20250331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q


☑						QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025


☐						TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-36103

TECOGEN INC.

(Exact name of Registrant as specified in its charter)


Delaware			04-3536131
(State or Other Jurisdiction of Incorporation or Organization)			(IRS Employer Identification No.)


76 Treble Cove Road
North Billerica, Massachusetts 01862
(Address of Principal Executive Offices and Zip Code)


(781) 466-6402
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class Trading Symbol Name of Each Exchange on Which Registered

Common Stock, $0.001 par value per share TGEN NYSE American LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer o

Non–Accelerated Filer ☒ Smaller reporting company ☒

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).Yes ☐ No ý

As of May 12, 2025, 25,259,267 shares of common stock, $0.001 par value per share, of the registrant were issued and outstanding.

TECOGEN INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE PERIOD ENDED MARCH 31, 2025

TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets (Unaudited)
	March 31, 2025 and December 31, 2024	1

	Condensed Consolidated Statements of Operations (Unaudited)
	Three Months Ended March 31, 2025 and 2024	2

	Condensed Consolidated Statements of Stockholders' Equity (Unaudited)
	Three Months Ended March 31, 2025 and 2024	3

	Condensed Consolidated Statements of Cash Flows (Unaudited)
	Three Months Ended March 31, 2025 and 2024	4

	Notes to Unaudited Condensed Consolidated Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31

Item 4.	Controls and Procedures	32

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	32

Item 1A.	Risk Factors	33

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33

Item 3.	Defaults in Senior Securities	33

Item 4.	Mine Safety Disclosures	33

Item 5.	Other Information	33

Item 6.	Exhibits	34

Signatures	Signature Page	35

References in this Form 10-Q to "we", "us", "our"', the "Company" and "Tecogen" refers to Tecogen Inc. and its consolidated subsidiaries, unless otherwise noted.

TECOGEN INC.

PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)


	March 31, 2025		December 31, 2024
ASSETS
Current assets:
Cash and cash equivalents	$	4,066,793	$	5,405,233

Accounts receivable, net	5,849,511		6,026,545

Inventories, net	9,886,750		9,634,005
Unbilled revenue	126,738		398,898

Prepaid and other current assets	684,548		680,565
Total current assets	20,614,340		22,145,246
Long-term assets:
Property, plant and equipment, net	1,774,288		1,738,036
Right-of-use assets - operating leases	1,768,309		1,730,358
Right-of-use assets - finance leases	646,874		452,390
Intangible assets, net	2,421,355		2,513,189

Goodwill	2,346,566		2,346,566


Other assets	154,096		166,474
TOTAL ASSETS	$	29,725,828	$	31,092,259

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Related party notes, current portion	$	512,187	$	1,548,872


Accounts payable	4,346,918		4,142,678
Accrued expenses	2,827,144		2,890,886
Deferred revenue, current portion	5,656,983		6,701,131
Operating lease obligations, current portion	456,370		430,382
Finance lease obligations, current portion	113,249		85,646
Acquisition liabilities, current portion	936,564		902,552
Unfavorable contract liability, current portion	97,376		113,449
Total current liabilities	14,946,791		16,815,596

Long-term liabilities:
Related party notes, net of current portion	1,055,122		—
Deferred revenue, net of current portion	1,169,075		1,165,951
Operating lease obligations, net of current portion	1,355,685		1,341,789
Finance lease obligations, net of current portion	457,865		325,235
Acquisition liabilities, net of current portion	938,407		1,008,760
Unfavorable contract liability, net of current portion	291,390		309,390
Total liabilities	20,214,335		20,966,721

Commitments and contingencies


Stockholders’ equity:
Tecogen Inc. shareholders’ equity:
Common stock, $0.001 par value; 100,000,000 shares authorized; 24,985,261 issued and outstanding at March 31, 2025 and 24,950,261 shares issued and outstanding at December 31, 2024	24,985		24,950
Additional paid-in capital	57,924,587		57,845,289


Accumulated deficit	(48,299,816)		(47,639,894)
Total Tecogen Inc. stockholders’ equity	9,649,756		10,230,345
Non-controlling interest	(138,263)		(104,807)
Total stockholders’ equity	9,511,493		10,125,538

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	29,725,828	$	31,092,259

The accompanying notes are an integral part of these condensed consolidated financial statements.

TECOGEN INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)


	Three Months Ended
	March 31, 2025		March 31, 2024
Revenues
Products	$	2,533,809	$	1,491,398
Services	4,245,022		4,014,310
Energy production	498,939		680,389
Total revenues	7,277,770		6,186,097
Cost of sales
Products	1,487,750		1,049,543
Services	2,258,898		2,092,257
Energy production	310,082		468,640
Total cost of sales	4,056,730		3,610,440
Gross profit	3,221,040		2,575,657
Operating expenses:
General and administrative	2,928,135		2,848,568
Selling	594,481		529,669
Research and development	292,668		254,696
Gain on disposition of assets	—		(7,391)

Total operating expenses	3,815,284		3,625,542
Loss from operations	(594,244)		(1,049,885)
Other income (expense)
Other income (expense), net	(14,245)		(15,747)
Interest expense	(32,326)		(18,670)



Unrealized gain (loss) on investment securities	(18,749)		18,749
Total other income (expense), net	(65,320)		(15,668)
Loss before provision for state income taxes	(659,564)		(1,065,553)
Provision for state income taxes	925		22,063
Consolidated net loss	(660,489)		(1,087,616)
(Income) loss attributable to the non-controlling interest	567		(17,351)
Loss attributable to Tecogen Inc.	$	(659,922)	$	(1,104,967)

Net loss per share - basic	$	(0.03)	$	(0.04)
Weighted average shares outstanding - basic	24,954,928		24,850,261
Net loss per share - diluted	$	(0.03)	$	(0.04)
Weighted average shares outstanding - diluted	24,954,928		24,850,261

The accompanying notes are an integral part of these condensed consolidated financial statements.

TECOGEN INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

For the Three Months Ended March 31, 2025 and 2024

(unaudited)



Three Months ended March 31, 2025	Common Stock Shares	Common Stock $0.001 Par Value		Additional Paid-In Capital		Accumulated Deficit		Non-controlling Interest		Total
Balance at December 31, 2024	24,950,261	$	24,950	$	57,845,289	$	(47,639,894)	$	(104,807)	$	10,125,538
Exercise of stock options	35,000	35		38,465		—		—		38,500
Stock-based compensation expense	—	—		40,833		—		—		40,833
Distributions to non-controlling interest	—	—		—		—		(32,889)		(32,889)
Net loss	—	—		—		(659,922)		(567)		(660,489)
Balance at March 31, 2025	24,985,261	$	24,985	$	57,924,587	$	(48,299,816)	$	(138,263)	$	9,511,493

Three Months ended March 31, 2024	Common Stock Shares	Common Stock $0.001 Par Value		Additional Paid-In Capital		Accumulated Deficit		Non-controlling Interest		Total
Balance at December 31, 2023	24,850,261	$	24,850	$	57,601,402	$	(42,879,656)	$	(94,301)	$	14,652,295
Stock-based compensation expense	—	—		44,535		—		—		44,535

Net (loss) income	—	—		—		(1,104,967)		17,351		(1,087,616)
Balance at March 31, 2024	24,850,261	$	24,850	$	57,645,937	$	(43,984,623)	$	(76,950)	$	13,609,214

The accompanying notes are an integral part of these condensed consolidated financial statements.

TECOGEN INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	Three Months Ended
	March 31, 2025		March 31, 2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated net loss	$	(660,489)	(1,087,616)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	185,695		140,137
Provision for (recovery of) credit losses	(75,000)		14,258


Stock-based compensation	40,833		44,535


Unrealized (loss) gain on investment securities	18,749		(18,749)
Gain on disposition of assets	—		(7,391)


Non-cash interest expense	18,852		6,400
Changes in operating assets and liabilities
(Increase) decrease in:
Accounts receivable	252,034		234,095

Inventory	(252,745)		532,418
Unbilled revenue	272,160		—

Prepaid assets and other current assets	(3,983)		(48,933)
Other assets	71,264		194,283
Increase (decrease) in:
Accounts payable	204,237		(500,516)
Accrued expenses and other current liabilities	(63,742)		167,789
Deferred revenue	(1,041,023)		791,181
Other liabilities	(140,245)		(213,675)
Net cash provided by (used in) operating activities	(1,173,403)		248,216
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(132,020)		(104,952)
Proceeds from disposition of assets	—		33,013



Distributions to non-controlling interest	(32,889)		—


Net cash used in investing activities	(164,909)		(71,939)
CASH FLOWS FROM FINANCING ACTIVITIES:
Finance lease principal payments	(38,628)		(17,112)



Proceeds from exercise of stock options	38,500		—


Net cash used in financing activities	(128)		(17,112)
Net increase (decrease) in cash and cash equivalents	(1,338,440)		159,165
Cash and cash equivalents, beginning of the period	5,405,233		1,351,270
Cash and cash equivalents, end of the period	$	4,066,793	$	1,510,435

Supplemental disclosure of cash flow information:
Cash paid for interest	$	13,474	$	11,855
Cash paid for taxes	$	925	$	425

Non-cash investing activities
Right-of-use assets acquired under operating leases	$	115,857	$	1,429,977
Right-of-use assets acquired under finance leases	$	226,794	$	200,187
Aegis Contract and Related Asset Acquisition:
Contingent consideration	$	—	$	92,409

The accompanying notes are an integral part of these condensed consolidated financial statements.

TECOGEN INC.

Notes to Condensed Consolidated Financial Statements

Note 1. Description of Business and Basis of Presentation

Description of Business

Tecogen Inc. (together with its subsidiaries "we", "our", "us", "Tecogen," or "Company"), a Delaware corporation, was incorporated on September 15, 2000. We produce commercial and industrial, natural-gas-fueled engine-driven, combined heat and power (CHP) products that reduce energy costs, decrease greenhouse gas emissions and alleviate congestion on the national power grid. Our products supply electric power or mechanical power for cooling, while heat from the engine is recovered and purposefully used at a facility. The majority of our customers are located in regions with the highest utility rates, typically California, the Midwest and the Northeast.

Our operations are comprised of three business segments. Our Products segment designs, manufactures and sells industrial and commercial cogeneration systems. Our Services segment provides operation and maintenance services to customers for our products. Our Energy Production segment sells energy in the form of electricity, heat, hot water and cooling to our customers under long-term sales agreements.

Liquidity, Going Concern and Management's Plans

The condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") assuming that we will continue as a going concern, which contemplates the realization of assets and the settlement of obligations in the normal course of business. As of March 31, 2025, our cash and cash equivalents were $4,066,793, compared to $5,405,233 at December 31, 2024, a decrease of $1,338,440. For the three months ended March 31, 2025 we used $1,173,403 in cash from operations and an operating loss of $594,244, due to a decrease in Services gross margin percentage due to higher labor and material costs and an increase in operating expenses. Working capital at March 31, 2025 was $5,667,549, compared to $5,329,650 at December 31, 2024, an increase of $337,899 and our accumulated deficit was $48,299,816.

As a result of the above factors, management has performed an analysis to evaluate the entity’s ability to continue as a going concern for one year after the financial statements issuance date. Management’s analysis includes forecasting future revenues, expenditures and cash flows, taking into consideration past performance as well as key initiatives recently undertaken. Our forecasts are dependent on our ability to maintain margins based on the Company's ability to close on new and expanded business, leverage existing working capital, and effectively manage expenses. New and expanded business includes the newly developed hybrid-drive air-cooled chillers, the acquisition of additional maintenance contracts in February 2024 and May 2024, and the expansion of markets served by our chiller products into the data center market, which is currently experiencing power constraints. Our backlog at March 31, 2025 was $9,522,015. Based on management's analysis, we believe that cash flows from operations and the proceeds from related party notes will be sufficient to fund operations over the next twelve months. There can, however, be no assurance we will be able to do so and we may be required to raise additional financing through one or more equity or debt financings. There can be no assurance that we will be able to raise such additional financing or upon terms acceptable to us or at all. Based on our analysis, the condensed consolidated financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if we were unable to continue as a going concern.

Our common stock is listed on the NYSE American stock exchange and trades under the symbol "TGEN." See Note 14. Subsequent Events of the Notes to Condensed Consolidated Financial Statements.

Basis of Presentation

The financial statements have been prepared in accordance with accounting standards set by the Financial Accounting Standards Board, or FASB. The FASB sets generally accepted accounting principles, or GAAP, to ensure financial condition, results of operations, and cash flows are consistently reported. References to GAAP issued by the FASB in these footnotes are to the FASB Accounting Standards Codification, or ASC. We adopted the presentation requirements for noncontrolling interests required by ASC 810 Consolidation. Under ASC 810, earnings or losses attributed to the noncontrolling interests are reported as part of the consolidated earnings and not a separate component of income or expense.

The accompanying condensed consolidated financial statements include our accounts and the accounts of the entities in which we have a controlling financial interest. Those entities include our wholly-owned subsidiary, American DG Energy Inc. ("ADGE"), Tecogen CHP Solutions, Inc., and a joint venture, American DG New York, LLC, or ADGNY, in which ADGE holds a 51.0% interest. As the controlling partner, all major decisions in respect of ADGNY are made by ADGE in accordance with the joint venture agreement. The interests in the individual underlying energy system projects in ADGNY vary between ADGE and its joint venture partner. The noncontrolling interest and distributions are determined based on economic ownership. The economic ownership is calculated by the amount invested by us and the noncontrolling partner in each site.

TECOGEN INC.

Notes to Condensed Consolidated Financial Statements

Each quarter, we calculate a year-to-date profit or loss for each site that is part of ADGNY and the noncontrolling interest percent of economic ownership in each site is applied to determine the noncontrolling interest share in the profit or loss. The same methodology is used to determine quarterly distributions of available cash to the noncontrolling interest partner. On our balance sheet, noncontrolling interest represents the joint venture partner’s investment in ADGNY, plus its share of after-tax profits less any cash distributions. ADGE owned a controlling 51.0% legal and economic interest in ADGNY as of March 31, 2025 and December 31, 2024. Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025. All intercompany transactions have been eliminated in consolidation.

The condensed consolidated balance sheet at December 31, 2024 has been derived from the audited consolidated financial statements at that date included in our Annual Report on Form 10-K for the year ended December 31, 2024, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.

For further information, refer to the consolidated financial statements and footnotes thereto included in Tecogen's Annual Report on Form 10-K for the year ended December 31, 2024.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Income Taxes

The provisions for income taxes in the accompanying unaudited consolidated statements of operations differ from that which would be expected by applying the federal statutory tax rate primarily due to losses for which no benefit is recognized.

Business Combinations

In accordance with applicable accounting standards, we estimate the fair value of assets acquired and liabilities assumed as of the acquisition date of each business combination. Any excess purchase price over the fair value of the net tangible and intangible assets acquired is allocated to goodwill. We may make certain estimates and assumptions when determining the fair values of assets acquired and liabilities assumed, including intangible assets. Critical estimates in valuing certain intangible assets include but are not limited to future expected cash flows from energy production sites or customer maintenance contracts, estimated operating costs, as well as discount rates. At the acquisition date, we will also record acquisition related liabilities, if applicable, for any contingent consideration or deferred payments to the seller and pre-acquisition deferred maintenance contingencies identified at service contract acquisition. Contingent consideration and pre-acquisition deferred maintenance contingencies are recorded at fair value on the acquisition date based on our expectation of achieving the contractually defined revenue targets and actual and projected future costs. The fair value of the contingent consideration and pre-acquisition deferred maintenance liabilities are remeasured each reporting period after the acquisition date and any changes in the estimated fair value are reflected as gains or losses in cost of goods sold or general and administrative expense in the condensed consolidated statement of operations. Contingent consideration liabilities and deferred payments to sellers are recorded as current liabilities and other long-term liabilities in the consolidated balance sheets based on the expected timing of settlement.

Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Any changes to provisional amounts identified during the measurement period are recognized in the reporting period in which the adjustment amounts are determined. Transaction costs associated with business combinations are expensed as incurred.

Segment Information

Our operations are comprised of three business segments. Our Products segment designs, manufactures and sells industrial and commercial cogeneration systems as described above. Our Services segment installs and maintains our cogeneration systems. Our Energy Production segment sells energy in the form of electricity, heat, hot water and cooling to our customers under long-term sales agreements. Segment profit is based on operating income after the elimination of intercompany transactions. Segment profit is a measure of operating performance of our reportable segments and may not be comparable to similar measures reported by other companies. Segment profit is a performance metric utilized by our Chief Executive Officer, who is our Chief Operating Decision Maker, to allocate resources to and access performance of our segments. See Note 13. Segments of the Notes to Condensed Consolidated Financial Statements, for a reconciliation of segment profit to income from operations.

Recently Issued Accounting Standards

TECOGEN INC.

Notes to Condensed Consolidated Financial Statements

SEC Form 10-Q filed by Tecogen Inc.