tgen-20260331

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, 2026


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

For the transition period __________ to __________

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 if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No ý

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 ☐

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 13, 2026, 29,917,952 shares of common stock, $0.001 par value per share, of the registrant were issued and outstanding.

CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q ("report") contains forward-looking statements within the meaning of the federal securities laws that involve a number of risks and uncertainties. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “project,” “target,” “potential,” “will,” “should,” “seek,” “could,” “likely” “may,” “pro-forma,” "continue" or other variances thereof (including their use in the negative), or by discussions of strategies, plans or intentions. All statements, other than statements of historical fact, included in this report regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects and plans and objectives of management are forward-looking statements. Such forward-looking statements include, among other things, demand for our products and services, the availability of incentives, rebates, and tax benefits relating to our products, changes in the regulatory environment relating to our products, competing technological developments, and the availability of financing to fund our operations and growth.

Forward-looking statements are not guarantees of future performance and our actual results may differ significantly from the results discussed in the forward-looking statements.

The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties and other factors that may cause us, our customers’ or our industry’s actual results, levels of activity, performance or achievements expressed or implied by these forward-looking statements to differ. See “Item 1A. Risk Factors” and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the year ended December 31, 2025, as well as other sections in this report that discuss some of the factors that could contribute to these differences.

In addition, such forward-looking statements are necessarily dependent upon assumptions and estimates that may prove to be incorrect. Although we believe that the assumptions and estimates reflected in such forward-looking statements are reasonable, we cannot guarantee that our plans, intentions, or expectations will be achieved. The information contained in this report, including the section discussing risk factors, identifies important factors that could cause such differences.

The cautionary statements made in this report are intended to be applicable to all related forward-looking statements wherever they appear in this report. The forward-looking statements made in this report relate only to events as of the date on which the statements are made. Except as required by law, we undertake no obligation to update or release any forward-looking statements as a result of new information, future events, or otherwise, and assume no obligation to update the reasons why actual results could differ materially from those anticipated in such forward-looking statements.

Our logo, trademarks and service marks are the property of Tecogen. Other trademarks or service marks appearing in this report are the property of their respective holders. Solely for convenience, the trademarks, service marks, trade names and copyrights referred to in this report may appear without the TM, SM, ® or © symbols, but such references are not intended to indicate in any way that we or any third-party will not assert, to the fullest extent under applicable law, their rights or the right of the applicable licensor to these trademarks, service marks, trade names and copyrights.

This report also contains or may contain market data related to our business and industry and any such market data may include projections that are based on certain assumptions. If these assumptions turn out to be incorrect, actual results may differ from the projections based on these assumptions. As a result, our markets may not grow at the rates projected by this data, or at all. The failure of these markets to grow at these projected rates may have a material adverse effect on our business, results of operations, financial condition, and the trading price of our common stock.

References in this report to "we," "our," "us," the "Company" and "Tecogen" refer to Tecogen Inc. and its consolidated subsidiaries, unless otherwise noted.

TECOGEN INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE PERIOD ENDED MARCH 31, 2026

TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets (Unaudited)
	March 31, 2026 and December 31, 2025	1

	Condensed Consolidated Statements of Operations (Unaudited)
	Three Months Ended March 31, 2026 and 2025	2

	Condensed Consolidated Statements of Stockholders' Equity (Unaudited)
	Three Months Ended March 31, 2026 and 2025	3

	Condensed Consolidated Statements of Cash Flows (Unaudited)
	Three Months Ended March 31, 2026 and 2025	4

	Notes to Unaudited Condensed Consolidated Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29

Item 4.	Controls and Procedures	29

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	29

Item 1A.	Risk Factors	30

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30

Item 3.	Defaults in Senior Securities	30

Item 4.	Mine Safety Disclosures	30

Item 5.	Other Information	30

Item 6.	Exhibits	31

Signatures	Signature Page	32

TECOGEN INC.

PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)


	March 31, 2026		December 31, 2025
ASSETS
Current assets:
Cash and cash equivalents	$	9,332,650	$	12,430,287

Accounts receivable, net of allowances for expected credit losses of $416,448 and $389,079, respectively	5,056,943		4,280,991

Inventories, net	11,439,973		10,949,697
Unbilled revenue	138,020		138,020

Prepaid and other current assets	581,756		1,086,310
Total current assets	26,549,342		28,885,305
Long-term assets:
Property, plant and equipment, net	1,558,124		1,609,321
Right-of-use assets - operating leases	1,366,435		1,490,094
Right-of-use assets - finance leases	1,606,080		1,434,080
Intangible assets, net	2,056,855		2,146,503

Goodwill	1,248,442		1,248,442


Other assets	79,480		176,358
TOTAL ASSETS	$	34,464,758	$	36,990,103

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:



Accounts payable	$	3,612,215	$	3,381,545
Accrued expenses	2,641,746		2,814,150
Deferred revenue, current portion	950,867		1,530,977
Operating lease liability, current portion	527,990		538,641
Finance lease liability, current portion	349,943		280,265
Acquisition liabilities, current portion	674,019		677,162
Unfavorable contract liability, current portion	41,893		44,433
Total current liabilities	8,798,673		9,267,173

Long-term liabilities:

Deferred revenue, net of current portion	3,244,037		3,265,886
Operating lease liability, net of current portion	892,239		1,004,488
Finance lease liability, net of current portion	1,085,015		992,285
Acquisition liabilities, net of current portion	754,029		826,757
Unfavorable contract liability, net of current portion	150,642		160,902
Total liabilities	14,924,635		15,517,491

Commitments and contingencies


Stockholders’ equity:
Tecogen Inc. shareholders’ equity:
Common stock, $0.001 par value; 100,000,000 shares authorized; 29,905,229 issued and outstanding at March 31, 2026 and 29,846,479 shares issued and outstanding at December 31, 2025	29,906		29,847
Additional paid-in capital	78,353,394		78,216,467
Unearned compensation	(662,839)		(712,019)
Accumulated deficit	(58,009,222)		(55,888,649)
Total Tecogen Inc. stockholders’ equity	19,711,239		21,645,646
Noncontrolling interest	(171,116)		(173,034)
Total stockholders’ equity	19,540,123		21,472,612

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	34,464,758	$	36,990,103

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, 2026		March 31, 2025
Revenues
Products	$	1,175,300	$	2,533,809
Services	4,636,394		4,245,022
Energy production	524,075		498,939
Total revenues	6,335,769		7,277,770
Cost of sales
Products	647,348		1,487,750
Services	2,700,169		2,258,898
Energy production	398,590		310,082
Total cost of sales	3,746,107		4,056,730
Gross profit	2,589,662		3,221,040
Operating expenses
General and administrative	3,718,472		2,928,135
Selling	640,932		594,481
Research and development	363,823		292,668
Loss on disposition of assets	2,344		—

Total operating expenses	4,725,571		3,815,284
Loss from operations	(2,135,909)		(594,244)
Other income (expense)
Other income (expense), net	62,398		(14,245)
Interest expense	(34,244)		(32,326)



Unrealized loss on investment securities	—		(18,749)
Total other income (expense), net	28,154		(65,320)
Loss before provision for state income taxes	(2,107,755)		(659,564)
Provision for state income taxes	10,900		925
Consolidated net loss	(2,118,655)		(660,489)
(Income) loss attributable to the noncontrolling interest	(1,918)		567
Loss attributable to Tecogen Inc.	$	(2,120,573)	$	(659,922)

Net loss per share - basic	$	(0.07)	$	(0.03)
Weighted average shares outstanding - basic	29,859,173		24,954,928
Net loss per share - diluted	$	(0.07)	$	(0.03)
Weighted average shares outstanding - diluted	29,859,173		24,954,928

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, 2026 and 2025

(unaudited)



Three Months ended March 31, 2026	Common Stock Shares	Common Stock $0.001 Par Value		Additional Paid-In Capital		Accumulated Deficit		Unearned Compensation		Non-controlling Interest		Total
Balance at December 31, 2025	29,846,479	$	29,847	$	78,216,467	$	(55,888,649)	$	(712,019)	$	(173,034)	$	21,472,612
Exercise of stock options	58,750	59		54,441		—		—		—		54,500
Stock-based compensation expense	—	—		82,486		—		49,180		—		131,666
Net (loss) income	—	—		—		(2,120,573)		—		1,918		(2,118,655)
Balance at March 31, 2026	29,905,229	$	29,906	$	78,353,394	$	(58,009,222)	$	(662,839)	$	(171,116)	$	19,540,123

Three Months ended March 31, 2025	Common Stock Shares	Common Stock $0.001 Par Value		Additional Paid-In Capital		Accumulated Deficit		Unearned Compensation		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 noncontrolling interest	—	—		—		—		—		(32,889)		(32,889)

Net (loss) income	—	—		—		(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

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, 2026		March 31, 2025
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated net loss	$	(2,118,655)	$	(660,489)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	265,238		185,695
Provision for (recovery of) credit losses	27,409		(75,000)


Stock-based compensation	131,666		40,833


Unrealized loss on investment securities	—		18,749
Loss on disposition of assets	2,344		—


Non-cash interest expense	—		18,852
Changes in operating assets and liabilities
(Increase) decrease in:
Accounts receivable	(803,359)		252,034

Inventory	(490,278)		(252,745)
Unbilled revenue	—		272,160

Prepaid assets and other current assets	408,090		(3,983)
Other assets	220,537		71,264
Increase (decrease) in:
Accounts payable	230,669		204,237
Accrued expenses and other current liabilities	(172,403)		(63,742)
Deferred revenue	(601,959)		(1,041,023)
Other liabilities	(207,420)		(140,245)
Net cash used in operating activities	(3,108,121)		(1,173,403)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(46,118)		(132,020)

Proceeds from the liquidation of investment securities	96,464		—


Distributions to noncontrolling interest	—		(32,889)


Net cash provided by (used) in investing activities	50,346		(164,909)
CASH FLOWS FROM FINANCING ACTIVITIES:
Finance lease principal payments	(94,362)		(38,628)



Proceeds from exercise of stock options	54,500		38,500


Net cash used in financing activities	(39,862)		(128)
Net increase (decrease) in cash and cash equivalents	(3,097,637)		(1,338,440)
Cash and cash equivalents, beginning of the period	12,430,287		5,405,233
Cash and cash equivalents, end of the period	$	9,332,650	$	4,066,793

Supplemental disclosure of cash flow information:
Cash paid for interest	$	33,830	$	13,474
Cash paid for taxes	$	10,900	$	925

Non-cash investing activities
Right-of-use assets acquired under operating leases	$	—	$	115,857
Right-of-use assets acquired under finance leases	$	265,420	$	226,794

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., a Delaware corporation (together with its subsidiaries "we", "our", "us", "Tecogen," or "Company"), 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 customer 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 and chiller systems. Our Services segment provides operation and maintenance services to customers for our products under long-term service contracts. Our Energy Production segment installs, operates, and maintains distributed generation electricity systems that we own, and sells energy in the form of electricity, heat, hot water and cooling to our customers under long-term energy contracts.

On April 30, 2025, we announced that our shares of common stock had been approved for listing on the NYSE American LLC ("NYSE American"), stock exchange. On May 6, 2025, our common stock began trading on the NYSE American under our current symbol "TGEN."

On July 21, 2025, we closed on the sale of an aggregate of 3,985,000 shares of common stock, $0.001 par value per share ("Common Stock"), including an additional 485,000 shares of common stock to cover over-allotments, at a price to the public of $5.00 per share (before deduction of underwriting discounts and commissions), in a firm commitment underwritten public offering pursuant to an underwriting agreement, dated July 18, 2025 between the Company and Roth Capital Partners, LLC as sole underwriter and manager for the offering ("Offering"). The net proceeds from the Offering, after deducting underwriting discounts and commissions and offering expenses were approximately $18,105,100. The net Offering proceeds were as follows:


Gross proceeds	$	19,925,000
Transaction Costs
Underwriters discounts and commissions	1,394,750
Legal fees	256,557
Assurance	83,000
Original listing fee	75,000
Filing and other fees	10,593
Total transaction costs	1,819,900
Net offering proceeds	$	18,105,100

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 United States (U.S.) generally accepted accounting principles, or U.S. GAAP, to ensure financial condition, results of operations, and cash flows are consistently reported. References to U.S. 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. Each quarter, we calculate a year-to-date profit or loss for each site that is part of ADGNY and the noncontrolling interest

TECOGEN INC.

Notes to Condensed Consolidated Financial Statements

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, 2026 and December 31, 2025. Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. All intercompany transactions have been eliminated in consolidation.

The condensed consolidated balance sheet at December 31, 2025 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, 2025, 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, 2025.

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 and chiller systems under long-term services contracts. Our Energy Production segment installs, operates, and maintains distributed generation electricity systems that we own, and sells energy in the form of electricity, heat, hot water and cooling to our customers under long-term energy contracts. 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 (loss) from operations.

Significant Accounting Standards Adopted in the Period

TECOGEN INC.

Notes to Condensed Consolidated Financial Statements

Financial Instruments - Credit Losses Topic (326). In July 2025, the Financial Accounting Standards Board issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326) - Measurement of Credit Losses for Accounts Receivable and Contract Assets. This update is intended to address challenges encountered when applying the guidance of Topic 326, Financial Instruments-Credit Losses to accounts receivable and current contract assets arising from transactions accounted for under Topic 606, Revenue from Contracts with Customers. The amendments in this update provide all entities with a practical expedient and entities other than public entities with an accounting policy election when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. Under Topic 326, in developing reasonable and supportable forecasts of expected credit losses, an entity is required to consider historical credit loss experience of financial assets with similar risks characteristics which generally provides a basis for an entity's assessment of credit losses, but also requires the entity to consider adjustments to that information to reflect the extent to which the entity expects current conditions and reasonable and supportable forecasts to differ from the conditions that existed for the period over which historical information was evaluated. The update allows entities to elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. The amendments are effective for annual reporting periods beginning after December 15, 2025, and interim periods within those annual reporting periods. The amendments should be applied prospectively. The adoption of ASU 2025-05 did not have a material effect on our financial position or results of operations.

Recently Issued Accounting Standards

Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40). In November 2024, the Financial Accounting Standards Board issued ASU 2024-03, Income Statement - Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40). This update is intended to improve disclosures about public entity’s expenses and will require more detailed information about types of expenses including inventory purchases, employee compensation, depreciation, amortization and depletion in commonly presented captions such as cost of sales, SG&A and research and development. In addition, an entity will be required to include certain amounts that are already disclosed under U.S. GAAP in the same disclosure as the other disaggregation requirements; disclose a qualitative description of the amounts remaining in expense captions not separately disaggregated quantitatively; and, disclose the amount of selling expense and, in annual reporting periods, the entity’s definition of selling expenses. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments should be applied prospectively to the financial statements after the effective date and retrospectively to any and all prior periods presented in the financial statements. ASU 2024-03 will apply to Tecogen after December 15, 2026, adoption of which will not have a material effect on our financial position or results of operation, but will require additional disclosure.

Interim Reporting (Topic 270) - Narrow-Scope Improvements. In November 2025, the Financial Accounting Standards Board issued ASU 2025-11, Interim Reporting (Topic 270) - Narrow-Scope Improvements. This update is intended to improve the navigability of the required interim disclosures under Topic 270 and clarify when the guidance is applicable. The amendments also provide a comprehensive list of disclosures required by Topic 270 that should be provided in interim reporting periods. The amendments add to Topic 270 a principle that requires entities to disclose since the end of the last annual reporting period that have a material impact on the entity. The amendments clarify the applicability of Topic 270, the types of interim reporting, and the form and content of the interim financial statements in accordance with GAAP. The amendments in this update apply to all entities that provide interim financial statements and notes in accordance with GAAP and include guidance on the definition of interim financial statements and notes in accordance with GAAP, including referencing the U.S. Securities and Exchange Commission requirements for entities to which those requirements apply. The amendments are effective for interim reporting periods beginning after December 15, 2027, for public entities. Early adoption is permitted. The amendments can be applied either prospectively or retrospectively to any and all prior periods presented in the financial statements. ASU 2024-11 will apply to Tecogen after December 15, 2027, adoption of which will not have a material effect on our financial position or results of operation, but will require additional disclosure.

Codification Improvements. In December 2025, the Financial Accounting Standards Board Issued ASU 2025-12, Codification Improvements. ASU 2025-12 contains amendments to the Codification that affect a wide variety of Topics in the Codification and applies to all reporting entities within the scope of the affected accounting guidance. The amendments in this update represent changes to the Codification that clarify, correct errors or make minor improvements, making the Codification easier to understand and apply. The amendments in this update are effective for public entities for fiscal years beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption of the amendments in this update are permitted for any fiscal year or interim period for which financial statements have not yet been issued or made available for issuance. If adopted in an interim period, the amendment must be adopted as of the beginning of the fiscal years that includes the interim period. An entity should apply the amendments in this update (except for amendments to Topic 260, Earnings per Share, related to Issue 4) using one of the following transition methods: (1) prospectively to all new transactions recognized on or after the date that the entity first applies the amendments, or (2) retrospectively to the beginning of the earliest comparative period presented in which the amendments were first applied, by adjusting the opening balance of retained

TECOGEN INC.

Notes to Condensed Consolidated Financial Statements

earnings, or other appropriate components of equity or net assets, as of the beginning of the earliest comparative period presented. For amendments to Topic 260, Issue 4, an entity shall apply the amendments retrospectively to each prior reporting period presented in the period of adoption. ASU 2025-12 will apply to Tecogen after December 15, 2026. We are currently evaluating the impact on our consolidated financial statements and related disclosures, the adoption of which we anticipate will not have a material effect on our financial position or results of operations.

Note 2. Revenue

Revenue is recognized when performance obligations under the terms of a contract with our customer are satisfied; generally this occurs with the transfer of control of our products, services, and energy production. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services or energy to customers.

Shipping and handling fees billed to customers in sales transactions are recorded in revenue and shipping and handling costs incurred are recorded in cost of sales. We have elected to exclude from revenue any value-added sales and other taxes which we collect concurrent with revenue-producing activities. These accounting policy elections are consistent with the manner in which we historically recorded shipping and handling fees and value-added taxes. Incremental costs incurred by us to obtain a contract with a customer are negligible, if any, and are expensed ratably in proportion to the related revenue recognized.

Disaggregated Revenue

In general, our business segmentation is aligned according to the nature and economic characteristics of our products and customer relationships and provides meaningful disaggregation of each business segment's results of operations. (See Note 13. "Segments " of the Notes to Condensed Consolidated Financial Statements.)

The following table further disaggregates our revenue by major source and by segment for the three months ended March 31, 2026 and 2025.


	Three Months Ended
Revenues	March 31, 2026		March 31, 2025
Products:
Cogeneration	$	356,241	$	1,080,369
Chiller	780,589		1,374,197
Engineered Accessories	38,470		79,243
Total Products Revenue	1,175,300		2,533,809

Services	4,636,394		4,245,022
Energy production	524,075		498,939
Total revenues	$	6,335,769	$	7,277,770

Products Segment

Products. Our Products revenues include cogeneration systems that supply electricity and hot water, chillers that provide air-conditioning and hot water and engineered accessories, which consist of ancillary products and parts necessary to install a cogeneration unit including integration into the customers’ existing electrical and mechanical systems. We refer to the package of engineered accessories and engineering and design services necessary for the customers' installation of a cogeneration unit as light installation services.

We transfer control and generally recognize a sale when we ship a product from our manufacturing facility at which point title has transferred and the customer takes ownership of the product. Payment terms on product sales are generally thirty (30) days.

We recognize revenue in certain circumstances before delivery to the customer has occurred (commonly referred to as bill and hold transactions). We recognize revenue related to such transactions once, among other things, the customer has made a written fixed commitment to purchase the product(s) under normal billing and credit terms, the customer has requested the product(s) be held for future delivery as scheduled and designated by them, risk of ownership has been assumed by the customer, and the product(s) are tagged as sold and segregated for storage awaiting further direction from the customer. Due to the infrequent nature and duration of bill and hold arrangements, the value associated with custodial storage services is deemed immaterial in the context of the contract and in total, and accordingly, none of the transaction price is allocated to such service.

Depending on the product and terms of the arrangement, we may defer the recognition of a portion of the transaction price received because we have to satisfy a future obligation (e.g., product start-up service). Amounts allocated to product start-up services are recognized as revenue when the start-up service has been completed. We use an observable selling price to determine standalone selling prices where available and either a combination of an adjusted market assessment approach, an

TECOGEN INC.

Notes to Condens

SEC Form 10-Q filed by Tecogen Inc.