Document and Entity Information
Document and Entity Information Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 28, 2019 | Jun. 30, 2018 | |
Entity Information [Line Items] | |||
Entity Registrant Name | Tecogen Inc. | ||
Entity Central Index Key | 0001537435 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 24,829,746 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 65,946,973 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 272,552 | $ 1,673,072 |
Accounts receivable, net | 14,176,452 | 9,536,673 |
Unbilled revenue | 4,893,259 | 3,963,133 |
Inventory, net | 6,294,862 | 5,130,805 |
Due from related party | 9,405 | 585,492 |
Prepaid and other current assets | 722,042 | 771,526 |
Total current assets | 26,368,572 | 21,660,701 |
Property, plant and equipment, net | 11,273,115 | 12,265,711 |
Intangible assets, net | 2,893,990 | 2,896,458 |
Goodwill | 8,975,065 | 13,365,655 |
Other assets | 393,651 | 482,551 |
TOTAL ASSETS | 49,904,393 | 50,671,076 |
Current liabilities: | ||
Revolving line of credit, bank | 2,009,435 | 0 |
Accounts payable | 7,153,330 | 5,095,285 |
Accrued expenses | 1,528,014 | 1,416,976 |
Deferred revenue | 2,507,541 | 1,293,638 |
Notes Payable, Related Parties, Current | 0 | 850,000 |
Due to Related Parties, Current | 0 | 52,265 |
Total current liabilities | 13,198,320 | 8,708,164 |
Long-term liabilities: | ||
Deferred revenue, net of current portion | 2,375,700 | 538,100 |
Unfavorable contract liability, net | 6,292,599 | 7,729,667 |
Total liabilities | 21,866,619 | 16,975,931 |
Commitments and contingencies (Note 8) | ||
Tecogen Inc. shareholders’ equity: | ||
Common stock, $0.001 par value; 100,000,000 shares authorized; 24,824,746 and 24,766,892 issued and outstanding at December 31, 2018 and 2017, respectively | 24,825 | 24,767 |
Additional paid-in capital | 56,427,928 | 56,176,330 |
Accumulated other comprehensive loss-investment securities | 0 | (165,317) |
Accumulated deficit | (28,670,095) | (22,796,246) |
Total Tecogen Inc. stockholders’ equity | 27,782,658 | 33,239,534 |
Noncontrolling interest in American DG New York, LLC | 255,116 | 455,611 |
Total stockholders’ equity | 28,037,774 | 33,695,145 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 49,904,393 | $ 50,671,076 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (usd per share) | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares, Issued | 24,824,746 | 24,766,892 |
Common Stock, Shares, Outstanding | 24,824,746 | 24,766,892 |
Redeemable common stock, par value, $0.001 per share | $ 0.001 | $ 0.001 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | ||
Products | $ 12,624,867 | $ 12,991,283 |
Services | 16,859,291 | 16,377,443 |
Energy production | 6,399,526 | 3,833,940 |
Total revenues | 35,883,684 | 33,202,666 |
Cost of sales | ||
Products | 7,797,591 | 8,012,012 |
Services | 10,693,077 | 10,201,732 |
Energy production | 3,801,154 | 2,034,518 |
Total cost of sales | 22,291,822 | 20,248,262 |
Gross profit | 13,591,862 | 12,954,404 |
Operating expenses | ||
General and administrative | 10,790,841 | 9,520,497 |
Selling | 2,651,128 | 2,271,826 |
Research and development | 1,297,612 | 936,929 |
Goodwill impairment | 4,390,590 | 0 |
Total operating expenses | 19,130,171 | 12,729,252 |
Income (loss) from operations | (5,538,309) | 225,152 |
Other income (expense) | ||
Interest and other income | 8,030 | 27,626 |
Interest expense | (120,015) | (155,082) |
Unrealized loss on investment securities | (118,084) | 0 |
Total other expense, net | (230,069) | (127,456) |
Income (loss) before income taxes | (5,768,378) | 97,696 |
State income tax provision | 32,748 | 0 |
Consolidated net income (loss) | (5,801,126) | 97,696 |
(Income) loss attributable to the noncontrolling interest | 92,594 | (50,260) |
Net income (loss) attributable to Tecogen Inc. | (5,708,532) | 47,436 |
Other comprehensive loss-unrealized loss on securities | (165,317) | |
Comprehensive loss | $ (117,881) | |
Net income (loss) per share - basic (in USD per share) | $ (0.23) | $ 0 |
Net income (loss) per share - diluted (in USD per share) | $ (0.23) | $ 0 |
Weighted average shares outstanding - basic (shares) | 24,815,926 | 23,171,033 |
Weighted average shares outstanding - diluted (shares) | 24,815,926 | 23,342,627 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Total | Common Stock 0.001 Par Value | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Noncontrolling Interest |
Balance, beginning balance at Dec. 31, 2016 | $ 14,511,073 | $ 19,982 | $ 37,334,773 | $ 0 | $ (22,843,682) | $ 0 |
Beginning balance, shares at Dec. 31, 2016 | 19,981,912 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Exercise of stock options | 179,918 | $ 122 | 179,796 | |||
Reclassification of Accumulated Other Comprehensive Loss | (165,317) | 165,317 | (165,317) | |||
Exercise of stock options, shares | 122,043 | |||||
Issuance of common stock in connection with ADGE acquisition, net of costs of $377,246 | 18,482,656 | $ 4,663 | 18,477,993 | |||
Issuance of common stock in connection with ADGE acquisition, net of costs of $377,246 (shares) | 4,662,937 | |||||
Acquisition of non-controlling interest in Ilios | 453,272 | 453,272 | ||||
Distributions to non-controlling interest | (47,921) | (47,921) | ||||
Stock-based compensation | 183,768 | 183,768 | 0 | |||
Comprehensive income (loss) | (67,621) | (165,317) | 47,436 | 50,260 | ||
Net loss | 47,436 | |||||
Net loss | (50,260) | |||||
Net loss | 97,696 | |||||
Balance, ending balance at Dec. 31, 2017 | 33,695,145 | $ 24,767 | 56,176,330 | (165,317) | (22,796,246) | 455,611 |
Ending balance, shares at Dec. 31, 2017 | 24,766,892 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Exercise of stock options | 72,925 | $ 58 | 72,867 | |||
Reclassification of Accumulated Other Comprehensive Loss | ||||||
Stock issuance costs | (2,457) | (2,457) | ||||
Exercise of stock options, shares | 57,854 | |||||
Issuance of common stock in connection with ADGE acquisition, net of costs of $377,246 | 0 | |||||
Distributions to non-controlling interest | (107,901) | (107,901) | ||||
Stock-based compensation | 181,188 | 181,188 | ||||
Net loss | (5,708,532) | (5,708,532) | ||||
Net loss | 92,594 | (92,594) | ||||
Net loss | (5,801,126) | |||||
Balance, ending balance at Dec. 31, 2018 | $ 28,037,774 | $ 24,825 | $ 56,427,928 | $ 0 | $ (28,670,095) | $ 255,116 |
Ending balance, shares at Dec. 31, 2018 | 24,824,746 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity Parenthetical | 12 Months Ended |
Dec. 31, 2017USD ($)$ / shares | |
Statement of Stockholders' Equity [Abstract] | |
Common stock, par value (usd per share) | $ / shares | $ 0.001 |
Acquisition costs | $ | $ 377,246 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (5,801,126) | $ 97,696 |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation and amortization | 789,123 | 587,822 |
Gain on contract termination | (124,733) | 0 |
Loss on sale of assets | 22,088 | 2,909 |
Provision (recovery) for losses on accounts receivable | 4,395 | (16,600) |
Provision of inventory reserve | 1,000 | 17,000 |
Stock-based compensation | 181,188 | 183,768 |
Goodwill impairment | 4,390,590 | 0 |
Non-cash interest expense | 32,225 | 1,491 |
(Increase) decrease in: | ||
Accounts receivable | (4,467,939) | (336,051) |
Unbilled revenue | (697,586) | (1,676,409) |
Inventory | (1,165,057) | (298,167) |
Due from related party | 576,087 | (325,651) |
Prepaid assets and other current assets | 49,484 | (47,498) |
Other assets | 113,284 | (32,252) |
Increase (decrease) in: | ||
Accounts payable | 1,173,979 | 1,335,042 |
Accrued expenses | 111,038 | (494,095) |
Deferred revenue | 1,006,893 | 375,499 |
Interest payable, related party | (52,265) | 34,240 |
Net cash used in operating activities | (3,857,332) | (591,256) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (828,086) | (580,044) |
Proceeds on sale of property and equipment | 2,003,606 | 0 |
Purchases of intangible assets | (226,847) | (453,598) |
Cash Acquired from Acquisition | 442,746 | 971,454 |
Expenses associated with asset acquisition | (2,457) | 0 |
Return of investment in Ultra Emissions Technologies Ltd | 0 | 2,000,000 |
Payment of stock issuance costs | 0 | (377,246) |
Distributions to noncontrolling interest | (107,901) | (47,921) |
Net cash provided by investing activities | 1,281,061 | 1,512,645 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from revolving line of credit | 21,533,143 | 0 |
Payments on revolving line of credit | (19,435,306) | 0 |
Payments for debt issuance costs | (145,011) | 0 |
Payments made on loan due to related party | (850,000) | (3,150,000) |
Proceeds from exercise of stock options | 72,925 | 179,918 |
Net cash provided by financing activities | 1,175,751 | (2,970,082) |
Net increase (decrease) in cash and cash equivalents | (1,400,520) | (2,048,693) |
Cash and cash equivalents, beginning of the year | 1,673,072 | 3,721,765 |
Cash and cash equivalents, end of the year | 272,552 | 1,673,072 |
Supplemental disclosures of cash flows information: | ||
Cash paid for interest | 140,055 | 110,979 |
Cash paid for taxes | 32,748 | 0 |
Issuance of stock to acquire American DG Energy, net | 0 | 18,482,656 |
Issuance of Tecogen stock options in exchange for American DG Energy options | $ 0 | $ 114,896 |
Nature of business and operatio
Nature of business and operations | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of business and operations | Nature of business and operations Tecogen Inc. ("Tecogen" or the “Company”), a Delaware Corporation, was incorporated on November 15, 2000, and acquired the assets and liabilities of the Tecogen Products division of Thermo Power Corporation. The Company produces 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. Tecogen’s 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 the Company’s customers are located in regions with the highest utility rates, typically California, the Midwest and the Northeast. On November 28, 2017 after the dissolution of a former joint venture, Ultratek, the Company created Ultera Technologies Inc., a Delaware corporation that is wholly owned by the Company ("Ultera Technologies"). Ultera Technologies was organized to continue to develop and commercialize Tecogen's patented technology, Ultera ® , for the automotive market. The Company’s operations are comprised of two business segments. Our Products and Services segment designs, manufactures and sells industrial and commercial cogeneration systems as described above. Our Energy Production segment sells energy in the form of electricity, heat, hot water and cooling to our customers under long-term sales agreements. Acquisition of American DG Energy, Inc. On May 18, 2017, the Company completed its acquisition, by means of a stock-for-stock merger, of 100% of the outstanding common shares of American DG Energy Inc. ("ADGE"), a company which installs, owns, operates and maintains completed distributed generation of electricity, or DG systems or energy systems, and other complementary systems at customer sites and sells electricity, hot water, heat and cooling energy under long-term contracts at prices guaranteed to the customer to be below conventional utility rates. Prior to the acquisition, ADGE was considered a related company because certain major stockholders had significant ownership positions in both companies. ADGE also had a sales representation agreement for Tecogen's products and service in New England and purchased the majority of its energy system from Tecogen. Pursuant to the Merger Agreement, Tecogen acquired ADGE by means of a merger of one of our wholly owned subsidiaries (the "Merger Sub") with and into ADGE, so that ADGE became a wholly owned subsidiary of Tecogen. Pursuant to the Merger Agreement, at the effective time of the Merger, each outstanding share of ADGE common stock, $.001 par value per share, was automatically converted into the right to receive 0.092 shares of common stock, $.001 par value per share, of Tecogen (the “Exchange Ratio”), with cash paid in lieu of any fractional shares. As a result of the Merger, Tecogen issued approximately 4,662,937 shares of Tecogen common stock at $4.02 per share. This price was based on the closing price of Tecogen's common stock on May 18, 2017 , the closing date of the Merger. The aggregate value of the consideration paid in connection with the Merger to former holders of ADGE common stock, net of costs, was approximately $18.5 million . Upon consummation of the Merger, ADGE stock options and other equity awards converted into stock options and equity awards with respect to Tecogen common shares, after giving effect to the Exchange Ratio. ADGE distributes, owns, and operates clean, on-site energy systems that produce electricity, hot water, heat and cooling. ADGE's business model is to own the equipment that it installs at customer's facilities and to sell the energy produced by these systems to the customer on a long-term contractual basis. We have assumed these customer contracts and ADGE's business model and have fully incorporated ADGE's business into ours. |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | Summary of significant accounting policies Principles of Consolidation and 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. The Company 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 consolidated financial statements include the accounts of the Company and entities in which it has a controlling financial interest. Those entities include the Company's wholly-owned subsidiary, ADGE 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 the Company and the noncontrolling partner in each site. Each quarter, the Company calculates a year-to-date profit/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/loss. The same methodology is used to determine quarterly distributions of available cash to the noncontrolling interest partner. On the Company’s 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 December 31, 2018 . Investments in partnerships and companies in which the Company does not have a controlling financial interest but where we have significant influence are accounted for under the equity method. Noncontrolling interests in the net assets and operations of ADGNY are reflected in the caption “Noncontrolling interest” in the accompanying consolidated financial statements. All intercompany transactions have been eliminated. Reclassification Certain prior period amounts have been reclassified to conform with current year presentation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. Concentration of Credit Risk The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company maintains its cash balances in bank accounts, which at times may exceed the Federal Deposit Insurance Corporation’s general deposit insurance limits. The amount on deposit at December 31, 2018 and 2017 which exceeded the $250,000 federally insured limit were approximately $0 and $1,172,911 , respectively. The Company has not experienced any losses in such accounts and thus believes that it is not exposed to any significant credit risk on cash. There were no customers who represented more than 10% of revenues for the year ended December 31, 2018 and one customers who represented more than 10% of revenues for the year ended December 31, 2017 . The Company has approximately five hundred customers who represented 100% of the revenues for the year ended December 31, 2018 . There was 1 customer who represented more than 10% of the accounts receivable balance as of December 31, 2018 , and none as of December 31, 2017 . Cash and Cash Equivalents The Company considers all highly liquid instruments with an original maturity date of three months or less when purchased to be cash and cash equivalents. The Company has cash balances in certain financial institutions in amounts which occasionally exceed current federal deposit insurance limits. The financial stability of these institutions is continually reviewed by senior management. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents. Accounts Receivable Accounts receivable are stated at the amount management expects to collect from outstanding balances. An allowance for doubtful accounts is provided for those accounts receivable considered to be uncollectible based upon historical experience and management’s evaluation of outstanding accounts receivable at the end of the year. Bad debts are written off against the allowance when identified. At December 31, 2018 and 2017 , the allowance for doubtful accounts was $26,800 and $22,400 , respectively. Inventory Raw materials, work in process, and finished goods inventories are stated at the lower of cost, as determined by the average cost method, or net realizable value. The Company periodically reviews inventory quantities on hand for excess and/or obsolete inventory based primarily on historical usage, as well as based on estimated forecast of product demand. Any reserves that result from this review are charged to cost of sales. Property, Plant and Equipment Property, plant and equipment are recorded at cost. Depreciation is provided using the straight-line method over the estimated useful life of the asset, which range from three to fifteen years. Leasehold improvements are amortized using the straight-line method over the lesser of the estimated useful lives of the assets or the term of the related leases. Expenditures for maintenance and repairs are expensed currently, while renewals and betterments that materially extend the life of an asset are capitalized. The Company receives rebates and incentives from various utility companies and governmental agencies which are accounted for as a reduction in the book value of the assets. The rebates are payable from the utility to the Company and are applied against the cost of construction, therefore reducing the book value of the installation. As a reduction of the facility construction costs, these rebates are treated as an investing activity in the statements of cash flows. The rebates received by the Company from the utilities that apply to the cost of construction are one time rebates based on the installed cost, capacity and thermal efficiency of the installed unit and are earned upon the installation and inspection by the utility and are not related to or subject to adjustment based on the future operating performance of the installed units. The rebate agreements with utilities are based on standard terms and conditions, the most significant being customer eligibility and post-installation work verification by a specific date. During 2018 the amount of rebates applied to the cost of construction was $180,000 . Intangible Assets Intangible assets subject to amortization include costs incurred by the Company to acquire product certifications, certain patent costs and developed technologies. These costs are amortized on a straight-line basis over the estimated economic life of the intangible asset. Indefinite life intangible assets such as trademarks are recorded at cost and not amortized. The Company reviews intangible assets for impairment when the circumstances warrant. The favorable contract asset which relates to existing ADGE customer contracts is more fully described in Note 6. , "Intangible assets and liabilities other than goodwill" . Impairment of Long-lived Assets Long-lived assets, including intangible assets and property, plant and equipment, are evaluated for impairment whenever events or changes in circumstances have indicated that an asset may not be recoverable and are grouped with other assets to the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. If the sum of the projected undiscounted cash flows (excluding interest charges) is less than the carrying value of the assets, the assets will be written down to the estimated fair value and such loss is recognized in income from continuing operations in the period in which the determination is made. Management determined that no impairment of long-lived assets existed as of December 31, 2018 . Goodwill Goodwill is the excess of the acquisition cost of businesses over the fair value of the identifiable net assets acquired. Impairment testing for goodwill is performed annually in the fourth fiscal quarter or more frequently if impairment indicators are present. To determine if goodwill is potentially impaired, we have the option to perform a qualitative assessment. However, we may elect to bypass the qualitative assessment and perform an impairment test even if no indications of a potential impairment exist. The impairment test for goodwill is performed at the reporting unit level and compares the fair value of the reporting unit (calculated using a discounted cash flow method) to its carrying value, including goodwill. The discount rate represents our estimate of the weighted-average cost of capital, or expected return, that a marketplace participant would have required as of the valuation date. If the carrying value exceeds the fair value, an impairment charge is recorded for the excess carrying value over fair value, limited to the total amount of goodwill of that reporting unit. Our assessment in 2018 indicated that the carrying value of our energy production reporting unit exceeded its fair value and therefore resulted in an impairment of goodwill (see Note 8. "Goodwill" ). The Company early-adopted the provisions of ASU 2017-04, during 2018, which simplified the impairment testing process by eliminating the requirement to determine the implied fair value of goodwill. The Company tests it goodwill for impairment on either a qualitative basis under certain conditions, or a quantitative basis. On a quantitative basis, fair value of the reporting units is primarily determined using probability weighted discounted cash flow analysis. Income (loss) per Common Share The Company computes basic loss per share by dividing net income (loss) for the period by the weighted-average number of shares of common stock outstanding during the period. The Company computes its diluted earnings per common share using the treasury stock method. For purposes of calculating diluted earnings per share, the Company considers its shares issuable in connection with the convertible debentures, stock options and warrants to be dilutive common stock equivalents when the exercise/conversion price is less than the average market price of our common stock for the period. For the year ended December 31, 2017 the Company included 171,594 dilutive shares resulting from assumed exercise of stock options. Segment Information The Company's operations are comprised of two business segments. Our Products and Services segment designs, manufactures and sells industrial and commercial cogeneration systems as described above. Our Energy Production segment sells energy in the form of electricity, heat, hot water and cooling to our customers under long-term sales agreements. Prior to the acquisition of ADGE (see Note 4. "Acquisition of American DG Energy Inc." ), the Company's operations were comprised of a single segment (see Note 16. "Segments" ). Income Taxes The Company uses the asset and liability method of accounting for income taxes. The current or deferred tax consequences of transactions are measured by applying the provisions of enacted tax laws to determine the amount of taxes payable currently or in future years. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities and expected future tax consequences of events that have been included in the financial statements or tax returns using enacted tax rates in effect for the years in which the differences are expected to reverse. Under this method, a valuation allowance is used to offset deferred taxes if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets may not be realized. Management evaluates the recoverability of deferred taxes and the adequacy of the valuation allowance annually. The Company has adopted the provisions of the accounting standards relative to accounting for uncertainties in tax positions. These provisions provide guidance on the recognition, de-recognition and measurement of potential tax benefits associated with tax positions. The Company elected to recognize interest and penalties related to income tax matters as a component of income tax expense in the statements of operations. The Company has analyzed its current tax return compliance positions and has determined that no uncertain tax positions have been taken that would require recognition. With few exceptions, the Company is no longer subject to possible income tax examinations by federal, state or local taxing authorities for tax years before 2015, with the exception of loss carryforwards in the event they are utilized in future years. The Company's tax returns are open to adjustment from 2001 forward, as a result of the fact that the Company has loss carryforwards from those years, which may be adjusted in the year those losses are utilized. Fair Value of Financial Instruments The Company’s financial instruments are cash and cash equivalents, accounts receivable, available-for-sale securities, accounts payable and revolving line of credit. The recorded values of cash and cash equivalents, accounts receivable, accounts payable and line of credit approximate their fair values based on their short-term nature. At December 31, 2018 , the recorded value on the consolidated balance sheet of the loan due to related party approximates fair value as the terms approximate those available for similar instruments. See Note 13. "Fair value measurements" . Revenue Recognition 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 a sales transaction are recorded in revenue and shipping and handling costs incurred are recorded in cost of sales. The Company has elected to exclude from revenue any value add sales and other taxes which it collects concurrent with revenue-producing activities. These accounting policy elections are consistent with the manner in which the Company historically recorded shipping and handling fees and taxes. Incremental costs incurred by us in obtaining a contract with a customer are negligible, if any, and are expensed ratably in proportion to the related revenue recognized. The application of ASU 2014-09 did not have an impact upon adoption or on the amounts reported for 2018 as compared with the guidance that was in effect before the adoption and application of ASU 2014-09. Disaggregated Revenue In general, the Company's business segmentation is aligned according to the nature and economic characteristics of its products and customer relationships and provides meaningful disaggregation of each business segment's results of operations. The following table further disaggregates our revenue by major source by segment for the year ended December 31, 2018 . Year Ended December 31, 2018 Products and Services Energy Production Total Products $ 12,624,867 $ — $ 12,624,867 Installation services 8,097,473 — 8,097,473 Maintenance services 8,761,818 — 8,761,818 Energy production — 6,399,526 6,399,526 Total revenue $ 29,484,158 $ 6,399,526 $ 35,883,684 Product and Services Segment Products. We transfer control and generally recognize a sale when we ship a product from our manufacturing facility at which point a customer takes ownership of the product. Payment terms on product sales are generally 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 expected cost plus a margin approach, and/or a residual approach to determine the standalone selling prices for separate performance obligations as a basis for allocating contract consideration when an observable selling price is not available. Amounts received but not recognized pending completion of performance are recognized as contract liabilities and are recorded as deferred revenue along with deposits by customers. Installation Services. We provide both complete turnkey installation services and what we refer to as light installation services. Complete turnkey installation services typically include all necessary engineering and design, labor, subcontract labor and service, and ancillary products and parts necessary to install a cogeneration unit including integration into the customers’ existing electrical and mechanical systems. Light installation services typically include some engineering and design as well as certain ancillary products and parts necessary for the customers’ installation of a cogeneration unit. Under light installation contracts, revenue related to ancillary products and parts is recognized when we transfer control of such items to the customer, generally when we ship them from our manufacturing facility, with revenue related to engineering and design services being recognized at the point where the customer can benefit from the service, generally as completed. Generally billings under light installation contracts are made when shipped and/or completed, with payment terms generally being 30 days. Under complete turnkey installation service contracts revenue is recognized over time using the percentage-of-completion method determined on a cost to cost basis. Our performance obligation under such contracts is satisfied progressively over time as enhancements are made to customer owned and controlled properties. We measure progress towards satisfaction of the performance obligation based on an input method based on cost which we believe is the most faithful depiction of the transfer of products and services to the customer under these contracts. When the financial metrics of a contract indicate a loss, our policy is to record the entire expected loss as soon as it is known. Contract costs and profit recognized to date under the percentage-of-completion method in excess of billings are recognized as contract assets and are recorded as unbilled revenue. Billings in excess of contract costs and profit are recognized as contract liabilities and are recorded as deferred revenue. Generally billings under complete turnkey installation contracts are made when contractually determined milestones of progress have been achieved, with payment terms generally being 30 days. Maintenance Services. Maintenance services are provided under either long-term maintenance contracts or one-time maintenance contracts. Revenue under one-time maintenance contracts is recognized when the maintenance service is completed. Revenue under long-term maintenance contracts is recognized either ratably over the term of the contract where the contract price is fixed or when the periodic maintenance activities are completed where the invoiced cost to the customer is based on run hours or kilowatts produced in a given period. We use an output method to measure progress towards completion of our performance obligation which results in the recognition of revenue on the basis of a direct measurement of the value to the customer of the services transferred to date relative to the remaining services promised under the contract. We use the practical expedient at ASC 606-10-55-18 of recognizing revenue in an amount equal to that amount to which we have the right to invoice the customer under the contract. Energy Production Segment Energy Production. Revenue from energy contracts is recognized when electricity, heat, hot and/or chilled water is produced by the Company owned on-site cogeneration systems. Each month we bill the customer and recognize revenue for the various forms of energy delivered, based on meter readings which capture the quantity of the various forms of energy delivered in a given month, under a contractually defined formula which takes into account the current month's cost of energy from the local power utility. As the various forms of energy delivered by us under energy production contracts are simultaneously delivered and consumed by the customer, our performance obligation under these contracts is considered to be satisfied over time. We use an output method to measure progress towards completion of our performance obligation which results in the recognition of revenue on the basis of a direct measurement of the value to the customer of the services transferred to date relative to the remaining services promised under the contract. We use the practical expedient at ASC 606-10-55-18 of recognizing revenue in an amount equal to that amount to which we have the right to invoice the customer under the contract. Payment terms on invoices under these contracts are generally 30 days. Contract Balances The timing of revenue recognition, billings and cash collections result in billed accounts receivable, unbilled revenue (contract assets) and deferred revenue, consisting of customer deposits and billings in excess of revenue recognized (contract liabilities) on the Consolidated Balance Sheets. Revenue recognized during the year ended December 31, 2018 that is included in unbilled revenue is approximately $2.2 million . Approximately $1.6 million of revenue was billed in this period that had been recognized in previous periods. Revenue recognized during the year ended December 31, 2018 that was included in deferred revenue at the beginning of the period was approximately $3.0 million . The increase in the deferred revenue balance during the year ended December 31, 2018 is primarily a result of approximately $4.5 million of prepayments added during the period, $2.0 million of which relates to an agreement for disposal of certain energy production related assets of the Company in December 2018, that was not included in the deferred revenue balance at the beginning of the year, offset by cash payments of $1.6 million received in advance of satisfying performance obligations. Remaining Performance Obligations Remaining performance obligations related to ASC 606 represent the aggregate transaction price allocated to performance obligations with an original contract term greater than one year, excluding certain maintenance contracts and all energy production contracts where a direct measurement of the value to the customer is used as a method of measuring progress towards completion of our performance obligation. Exclusion of these remaining performance obligations is due in part to the inability to quantify values based on unknown future levels of delivery and in some cases rates used to bill customers. Remaining performance obligations therefore consist of unsatisfied or partially satisfied performance obligations related to fixed price maintenance contracts and installation contracts. As of December 31, 2018 , the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $16.6 million . The Company expects to recognize revenue of approximately 96% of the remaining performance obligations over the next 24 months, 45% recognized in the first 12 months and 51% recognized over the subsequent 12 months, and the remainder recognized thereafter. Advertising Costs The Company expenses the costs of advertising as incurred. For the years ended December 31, 2018 and 2017 , advertising expense was approximately $273,000 and $278,000 , respectively. Research and Development Costs Research and development expenditures are expensed as incurred. The Company’s total research and development expenditures of approximately $1,298,000 and $937,000 were recognized for each of the years ended December 31, 2018 and 2017 , respectively. Stock-Based Compensation Stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as an expense in the statements of operations over the requisite service period. The determination of the fair value of share-based payment awards is affected by the Company’s stock price. For the awards prior to the Company being publicly traded, the Company considered the sales price of the Common Stock in private placements to unrelated third parties as a measure of the fair value of its Common Stock. The Company utilizes actual forfeitures when calculating the expense for the period. Stock-based compensation expense recognized is based on awards that are ultimately expected to vest. The Company evaluates the assumptions used to value awards regularly and if factors change and different assumptions are employed, stock-based compensation expense may differ significantly from what has been recorded in the past. If there are any modifications or cancellations of the underlying unvested securities, the Company may be required to accelerate, increase or cancel any remaining unearned stock-based compensation expense. Pursuant to ASC 505-50, Equity Based Payments to Non-Employees , the fair value of restricted Common Stock and stock options issued to nonemployees is revalued at each reporting period until the ultimate measurement date, as defined by ASC 505-50. The Company records the value of the instruments at the time services are provided and the instruments vest. Accordingly, the ultimate expense is not fixed until such instruments are fully vested. See Note 12. "Stockholders' equity" for a summary of the restricted stock and stock option activity under the Company's stock-based employee compensation plan for the years ended December 31, 2018 and 2017 . Significant New Accounting Standards Adopted this Period Revenue Recognition In May 2014, the Financial Accounting Standards Board ("FASB") issued an accounting standard update (ASU 2014-09) related to revenue from contracts with customers, which, along with amendments issued in 2015 and 2016, supersedes nearly all current U.S. GAAP guidance on this topic and eliminates industry-specific guidance. The underlying principle is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The Company adopted this accounting standard update on a modified retrospective basis in the first quarter of 2018. See Revenue Recognition above for further discussion. Investments in Equity Securities In January 2016, the FASB issued an accounting standard update related to investments in equity securities requiring unrealized holding gains and losses to be included in net income. Prior to this update, unrealized holding gains and losses related to available-for-sale securities were included in accumulated other comprehensive income and not included in determining net income. This accounting standard update became effective for the Company beginning in the first quarter of 2018 and is applied by means of a cumulative-effect adjustment to the balance sheet as of January 1, 2018. The Company adopted this accounting standard update in the first quarter of 2018 which resulted in reclassification of $165,317 of cumulative unrealized holding losses from accumulated other comprehensive loss to accumulated deficit. The future impact of recognizing unrealized holding gains or losses in net income is dependent on the movement in the stock prices related to such investments. Business In January 2017, the FASB issued a new accounting standard that changes the definition of a business to assist entities with the evaluation of when a set of assets acquired or disposed of should be considered a business. The new standard requires that an entity evaluate whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets; if so, the set of assets would not be considered a business. The new standard also requires that a business include at least one substantive process, and it narrows the definition of outputs. The Company adopted this standard as of January 1, 2018. Adoption of this new standard may result in more transactions being accounted for as asset acquisitions versus business combinations; however, the impact on our consolidated financial statements in future periods will depend on the facts and circumstances of future transactions. Goodwill During 2018, the Company early-adopted the provisions of ASU 2017-04 which simplified goodwill impairment testing by eliminating the requirement to determine the implied value of goodwill. Disclosure update The Securities and Exchange Commission has recently issued several final rules, including but not limited to SEC Final Rule Release No. 33-10532 Disclosure Update and Simplification (“Final Rule”), which amends certain redundant, duplicative, outdated, superseded or overlapping disclosure requirements. This Final Rule is intended to facilitate disclosure information provided to investors and simplify compliance without significantly impacting the mix of information provided to investors. The amendments also expand the disclosure requirements regarding the analysis of stockholders' equity for interim financial statements, in which entities will be required to present a reconciliation for each period for which a statement of comprehensive income is required to be filed. We adopted the Final Rule effective on November 5, 2018, which did not have any material impact on our consolidated financial statements and related disclosures. Significant New Accounting Standards or Updates Not Yet Effective Leases In February 2016, the FASB issued an accounting standard update related to leases requiring lessees to recognize operating and financing lease liabilities on the balance sheet, as well as corresponding right-of-use assets. The new lease standard also makes some changes to lessor accounting and aligns key aspects of the lessor accounting model with the revenue recognition standard. In addition, disclosures will be required to enable users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The accounting standard update will be effective for the Company beginning in the first quarter of fiscal 2019 on a modified retrospective basis, and early adoption is permitted. |
Income (loss) per common share
Income (loss) per common share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Income (loss) per common share | Income (loss) per common share: Basic and diluted income (loss) per share for the years ended December 31, 2018 and 2017 , respectively, was as follows: 2018 2017 Net income (loss) attributable to stockholders $ (5,708,532 ) $ 47,436 Weighted average shares outstanding - Basic 24,815,926 23,171,033 Basic income (loss) per share $ (0.23 ) $ — Weighted average shares outstanding - Diluted 24,815,926 23,342,627 Diluted income (loss) per share $ (0.23 ) $ — Anti-dilutive shares underlying stock options outstanding 144,077 441,356 |
Acquisition of American DG Ener
Acquisition of American DG Energy Inc. (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisition of American DG Energy Inc. | Acquisition of American DG Energy Inc. On May 18, 2017 , we completed our acquisition, by means of a stock-for-stock merger, of 100% of the outstanding common shares of American DG Energy Inc. (“American DG Energy" or "ADGE”), a company which installs, owns, operates and maintains complete distributed generation of electricity systems, or DG systems or energy systems, and other complementary systems at customer sites and sells electricity, hot water, heat and cooling energy under long-term contracts at prices guaranteed to the customer to be below conventional utility rates, by means of a merger of one of our wholly owned subsidiaries with and into ADGE such that ADGE became a wholly owned subsidiary of Tecogen. We acquired ADGE to, among other reasons, expand our product offerings and benefit directly from the long-term contracted revenue streams generated by these installations. We gained control of ADGE on May 18, 2017 by issuing Tecogen Common Stock to the prior stockholders of ADGE. We have included the financial results of ADGE in our condensed consolidated financial statements from the date of acquisition. For the year ended December 31, 2018 , ADGE contributed $6,399,526 to our total revenues and $2,598,372 to our gross profit. Acquisition related costs included in general and administrative expenses totaled $322,566 for the year ended December 31, 2018 . Stock issuance related costs totaling $377,246 were netted against additional paid in capital during the year ended December 31, 2018 . The merger is intended to qualify for federal income tax purposes as a tax-free reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986. Subject to the terms and conditions of the merger agreement, at the closing of the merger, each outstanding share of ADGE common stock was converted into the right to receive approximately 0.092 shares of common stock of Tecogen (the "Exchange Ratio"). Also in connection with the merger, Tecogen, at the effective time of the merger, assumed the outstanding stock options of ADGE as adjusted pursuant to the Exchange Ratio and subject to the terms of the merger agreement. The fair value of the 4,662,937 shares of common stock issued as part of the consideration for the acquisition was determined based on the closing market price of Tecogen’s stock on the date of acquisition. Additionally, as there is no required service condition in the assumed equity-based awards, 100% of the estimated fair value of the replacement equity-based awards at the date of the merger is considered attributable to pre-combination service and accordingly is included in the consideration. The following table summarizes the consideration paid for ADGE and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date, as well as the fair value at the acquisition date of the noncontrolling interest in American DG New York, LLC, a consolidated subsidiary of ADGE. Consideration Tecogen common stock - 4,662,937 shares $ 18,745,007 Assumed fully vested equity awards 114,896 $ 18,859,903 Recognized amounts of identifiable assets acquired and liabilities assumed Financial assets $ 1,542,137 Inventory 75,374 Prepaid and other current assets 358,628 Property, plant and equipment 12,186,664 Investment securities 519,568 Favorable contract asset 1,561,739 Financial liabilities (1,912,859 ) Unfavorable contract liability (8,341,922 ) Other liabilities (939 ) Total identifiable net assets 5,988,390 Noncontrolling interest in American DG New York, LLC (453,272 ) Goodwill 13,324,785 $ 18,859,903 Goodwill acquired of $13.3 million arising from the acquisition is primarily attributable to the going concern element of ADGE’s business, including its assembled workforce and the long-term contractual nature of its business, as well as expected cost synergies from the merger related primarily to the elimination of administrative overhead and duplicative personnel. None of the goodwill recognized is expected to be deductible for income tax purposes. The favorable contract asset and the unfavorable contract liability, both of which relate to existing customer contracts, and the estimated amortization are more fully described in Note 6. "Intangible assets and liabilities other than goodwill" . The fair value of the noncontrolling interest in American DG New York, LLC, a consolidated subsidiary of ADGE, was estimated using the income approach. This fair value measurement is based on significant inputs that are not observable in the market and thus represents a fair value measurement categorized within level 3 of the fair value hierarchy described in ASC Section 820-10-35. Key assumptions include a discount rate of 5.61% and the run out of existing contracts at current levels of profitability. Unaudited Pro Forma Financial Information The unaudited pro forma financial information in the table below summarizes the combined results of operations for Tecogen and ADGE as though the companies were combined as of the beginning of fiscal 2016. The pro forma financial information for all periods presented also includes the business combination accounting effects resulting from the acquisition including amortization charges and credits from acquired intangible assets and liabilities, and depreciation adjustments related to fair value as though the aforementioned companies were combined as of the beginning of fiscal 2016. The pro forma financial information as presented below is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of fiscal 2016. Year ended December 31, 2017 Total revenues $ 36,232,650 Net income (loss) 113,255 Basic earnings (loss) per share $ 0.01 Diluted earnings (loss) per share $ 0.01 One-time acquisition-related expenses related to the merger incurred during the year ended December 31, 2017 are not included in the unaudited pro forma financial information as they are not expected to have a continuing impact on the consolidated results. The unaudited pro forma financial information does not include the revenues or results of operations of a subsidiary previously owned and consolidated by ADGE as that subsidiary was disposed of in 2016 prior to the acquisition by Tecogen and was considered to be a discontinued operation by ADGE. Additionally, the unaudited pro forma financial information does not include a gain recognized on deconsolidation of that same subsidiary by ADGE and an amount of interest cost related to ADGE's long-term debt which was extinguished contemporaneously with the disposition of the subsidiary. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Inventories at December 31, 2018 and 2017 consisted of the following. 2018 2017 Gross raw materials $ 6,165,099 $ 5,270,732 Less - reserves (284,000 ) (283,000 ) Net raw materials 5,881,099 4,987,732 Work-in-process 413,763 11,852 Finished goods — 131,221 $ 6,294,862 $ 5,130,805 |
Intangible assets other than go
Intangible assets other than goodwill | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Intangible assets other than goodwill | Intangible Assets and Liabilities Other Than Goodwill The Company capitalized $120,455 and $61,053 of product certification costs during the years ended December 31, 2018 and 2017 , respectively. Also included in intangible assets are the costs incurred by the Company to acquire certain patents. These patents, once in service, will be amortized on a straight-line basis over the estimated economic life of the associated product, which range from approximately 7 - 10 years. The Company capitalized $102,245 and $181,637 of patent-related costs during the years ended December 31, 2018 and 2017 , respectively. The Company capitalized $3,212 and $2,375 in trademarks during the years ended December 31, 2018 and 2017 , respectively. The Company capitalized $935 and $263,001 of in process R&D related to the former Ultratek joint venture during the years ended December 31, 2018 and 2017 , respectively. Intangible assets and liabilities at December 31, 2018 and 2017 consist of the following: December 31, 2018 December 31, 2017 Intangible assets Cost Accumulated Amortization Net Cost Accumulated Amortization Net Product certifications $ 726,159 $ (345,658 ) $ 380,501 $ 605,704 $ (285,341 ) $ 320,363 Patents 910,569 (188,239 ) 722,330 808,323 (154,972 ) 653,351 Developed technology 240,000 (92,000 ) 148,000 240,000 (76,000 ) 164,000 Trademarks 22,752 — 22,752 19,540 — 19,540 In process R&D 263,936 — 263,936 263,001 — 263,001 TTcogen intangible assets 29,607 (2,776 ) 26,831 — — — Favorable contract assets 1,561,739 (232,099 ) 1,329,640 1,561,739 (85,536 ) 1,476,203 $ 3,754,762 $ (860,772 ) $ 2,893,990 $ 3,498,307 $ (601,849 ) $ 2,896,458 Intangible liability Unfavorable contract liability $ 7,912,275 $ (1,619,676 ) $ 6,292,599 $ 8,341,922 $ (612,255 ) $ 7,729,667 The aggregate amortization expense related to intangible assets exclusive of contract related intangibles was $112,359 and $99,310 during the years ended December 31, 2018 and 2017 , respectively. The net credit to cost of sales related to the amortization of the contract related intangible asset and liability for the years ended December 31, 2018 and 2017 was $860,858 and $526,719 , respectively. Contract Asset and Liability The favorable contract asset and unfavorable contract liability in the foregoing table represent the fair value of ADGE's customer contracts (both positive for favorable contracts and negative for unfavorable contracts) which were acquired by the Company on May 18, 2017 (see Note 4. "Acquisition of American DG Energy Inc." ). These contracts are long-term and provide customers with an alternative source of electrical power in addition to that provided by the local power utility, at rates that are lower than local utilities. This alternative electrical power is typically produced by ADGE owned, operated and maintained natural gas powered systems installed at the customers' sites, with ADGE bearing all costs of operation and maintenance. In addition to the alternative source of electrical power provided by ADGE’s systems, customers can opt to add and take advantage of the heat generated in the electrical production process in the form of hot water and/or space heating. Pricing to the customer for electrical power produced and supplied by ADGE under the contracts is under a fixed formula which requires the customer to pay for the kilowatts of electrical power provided at a fixed percentage discount to the local utility’s electric rate for that period. As a result, as utility rates for electrical power change, the amount ADGE is able to charge the customer under the contract also changes. There has been a sharp decrease in electric rates over the past several years, subsequent to the vast majority of customer contract dates, causing the billable value of the electrical power generated by ADGE’s systems to decrease, resulting in a deterioration of expected profitability. As of the date of acquisition, utility electric rates were significantly below the level anticipated at the time the fixed percentage discounts contained in the vast majority of ADGE’s customer contracts were contracted for, thus these contract terms, although they produce cash flow, were considered to be off market in the vast majority of ADGE’s customer contracts. Additionally, the demand and volume of kilowatts produced and billed for vary by contract and by period and in certain instances have been significantly below what was originally expected such that had it been known at the time the contract(s) were negotiated, it would have influenced ADGE’s determination of the level of the fixed percentage discount in those contracts. The determination of fair value requires development of an estimate of the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the measurement date under current market conditions. Contracts are considered to be assets or liabilities by virtue of the rights and obligations inherent in the contract terms. Typically, contracts with terms considered to be at market are considered to have no fair value because in order to be entitled to the rights under the contract performance must occur for which a market rate of return is earned due to the at market terms. The fair value of a contract is primarily a measurement of its off market terms. The obligation to perform under a contract with terms that are unfavorable to market results in a liability to the extent its terms are off market. The resulting liability is an estimate of the price that would need to be paid to a willing market participant to assume the obligations under the contract in order for them to receive a market rate of return for their remaining performance obligation under the contract. The exact opposite holds true in instances where the terms of a contract are considered to be favorable to market. In that case an asset would exist as an estimate of the price that would be received from a willing market participant in order to be entitled to the rights under the contract. In determining the estimate of fair value of ADGE’s customer contracts, the measure of market, and thus the baseline to measure the amount related to any of the off market terms or conditions with respect to the contracts, was considered best determined, given the nature of the services provided under the contracts, by utilizing a benchmark level of profit margin, in this case 35% of revenue which is consistent with the average return on revenue of US investor owned public utilities. Amortization of intangibles including contract related amounts is calculated using the straight line method over the remaining useful life or contract term and charged against cost of sales in the accompanying consolidated statement of operations and comprehensive loss. Aggregate future amortization over the next five years is estimated to be as follows: Non-contract related intangibles Contract related intangibles Total 2019 $ 246,837 $ (705,430 ) (458,593 ) 2020 237,903 (675,232 ) (437,329 ) 2021 212,446 (680,719 ) (468,273 ) 2022 205,369 (655,086 ) (449,717 ) 2023 198,296 (578,426 ) (380,130 ) Thereafter 440,746 (1,668,066 ) (1,227,320 ) $ 1,541,597 $ (4,962,959 ) $ (3,421,362 ) |
Property, plant and equipment
Property, plant and equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, plant and equipment | Property, plant and equipment Property, plant and equipment at December 31, 2018 and 2017 consisted of the following: Estimated Useful Life (in Years) 2018 2017 Energy systems 1 - 15 years $ 12,709,990 $ 12,466,642 Machinery and equipment 5 - 7 years 1,355,617 1,215,951 Furniture and fixtures 5 years 222,542 205,320 Computer software 3 - 5 years 200,626 115,253 Leasehold improvements * 450,792 440,519 14,939,567 14,443,685 Less - accumulated depreciation and amortization (3,666,452 ) (2,177,974 ) Net property, plant and equipment $ 11,273,115 $ 12,265,711 * Lesser of estimated useful life of asset or lease term Depreciation and amortization expense on property and equipment for the years ended December 31, 2018 and 2017 was $1,537,622 and $1,114,540 , respectively. In December 2018, the Company sold certain energy systems related assets and related energy production contracts. As the sales agreement contained a repurchase provision, no sale was recognized. Accordingly, the assets were not derecognized and the $2.0 million consideration for the sale was deferred. Subsequent to December 31, 2018, the sales agreement was modified to exclude the repurchase provision (see Note 18. "Subsequent Events"). Subsequent to December 31, 2018 , the Company contracted for the disposition of certain energy systems (see Note 18. "Subsequent events"). |
Goodwill (Notes)
Goodwill (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill Changes in the carrying amount of goodwill by reportable segment during the year was as follows: Product and Service Energy Production Total Company Balance at December 31, 2016 $ 40,870 $ — $ 40,870 Acquisitions 13,324,785 13,324,785 Balance at December 31, 2017 40,870 13,324,785 13,365,655 Impairment loss — (4,390,590 ) (4,390,590 ) Balance at December 31, 2018 $ 40,870 $ 8,934,195 $ 8,975,065 The Company recorded an impairment loss of $4,390,590 following the performance of its 2018 annual goodwill impairment test. The impairment loss represents the excess of the carrying value of the Company's energy production reporting unit, including goodwill, over its estimated fair value based on discounted cash flow analysis. The impairment recognizes the shortening of remaining contract terms with customers without replacement and without further growth, as well as less than expected cost savings and increased profitability from the Company's initiative to optimize the long-term profitability of its various site operations, and a price peak of the Company's stock on the date of the business combination to which the goodwill relates (see also Note 18 "Subsequent events"). |
Revolving line of credit, Conve
Revolving line of credit, Convertible debentures and loan due to related party | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Revolving line of credit, Convertible debentures and loan due to related party | Revolving line of credit, Convertible debentures and loan due to related party On December 23, 2013, the Company entered into a Senior Convertible Promissory Note (the "Note") with Michaelson Capital Special Finance Fund LP, ("Michaelson"), for the principal amount of $3,000,000 with interest at 4% per annum for a term of three years. On April 1, 2016, the Company amended the Note increasing the total principal amount to $3,150,000 increasing the conversion price to $3.54 from $3.37 , and extending the term until December 23, 2018 . The amended Note was a senior secured obligation which paid interest only on a monthly basis in arrears at a rate of 4% per annum, unless earlier converted in accordance with the terms of the agreement prior to such date. The Note was secured by an all asset lien and was senior in right of payment to any unsecured indebtedness that is expressly subordinated in right of payment to the Note. On December 14, 2017, the Company, through principal payment of $3,150,000 to Michaelson (the "Payment"), terminated the Senior Convertible Promissory Note with Michaelson. Through the Note, Michaelson was the Company's principle debt holder and a beneficial holder of approximately 5% of the Company's shares outstanding. There were no pre-payment penalties paid by the Company, as Michaelson provided a waiver of the pre-payment penalties that were contained in the Note. By completing the Payment, the Company has satisfied all of its obligations under the Note and the Note was cancelled. Below is a summary of the terms of the Note, as amended. The Company could prepay all of the outstanding principal and interest due and payable under this Note in full, at any time prior to the maturity date for an amount equal to 120% of the then outstanding principal and interest due and payable as of the date of such prepayment. In connection with the acquisition of American DG Energy, the Company assumed a loan from John N. Hatsopoulos, the Company's then Co-Chief Executive Officer and a Company Director. The loan was in the amount of $850,000 with interest at 6% , payable quarterly. On May 4, 2018, the Company, through a payment of $919,590 , terminated the loan and all obligations under the loan. On May 4, 2018 ("Closing Date") the Company, and its wholly owned subsidiaries, American DG Energy Inc. and TTcogen LLC (collectively, the "Borrowers"), entered into a Credit Agreement with Webster Business Credit Corporation (the "Lender") that matures in May 2021 and provides Borrowers a line of credit of up to $10 million on a revolving and secured basis, with availability based on certain accounts receivables, raw materials, and finished goods. Borrowings under the Credit Agreement bear interest at a rate equal to, at the Borrower's option, either (1) One Month LIBOR, plus 3.00% , or (2) Lender’s Base Rate, plus 1.5% . Lender’s Base Rate is defined as the highest of (a) the Federal Funds rate plus 0.5% , (b) Lender’s Prime Rate as adjusted by Lender from time to time, and (c) One Month LIBOR, plus 2.75% , 7% as of December 31, 2018 . The Credit Agreement contains certain affirmative and negative covenants applicable to the Company and its subsidiaries, which include, among other things, restrictions on their ability to (i) incur additional indebtedness, (ii) make certain investments, (iii) acquire other entities, (iv) dispose of assets and (v) make certain payments including those related to dividends or repurchase of equity. The Credit Agreement also contains financial covenants including maintaining a fixed charge coverage ratio of not less than 1.10 :1.00 and the Company may not make any unfinanced capital expenditures in excess of $500,000 in the aggregate in any fiscal year. As of December 31, 2018 , the Company believes it is in compliance with covenants. The $145,011 of costs incurred in connection with the issuance of the revolving credit facility were capitalized and are being amortized to interest expense on a straight-line basis over three years based on the contractual term of the Agreement. As of December 31, 2018 , the outstanding balance on the line of credit was $2,122,221 and the unamortized portion of debt issuance cost related to the Credit Agreement was $112,786 and is included as a reduction to the revolving line of credit in the accompanying Consolidated Balance Sheet. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and contingencies Operating Lease Obligations The Company leases office space and warehouse facilities under various lease agreements which expire through March 2024 . Total rent expense for the years ended December 31, 2018 and 2017 amounted to $755,579 and $700,335 , respectively. In 2017, a portion of rent expense was offset by $34,995 in rent paid by sub-lessees, to both related and unrelated parties, for a net amount of $665,340 . The Company leased one passenger vehicle under a lease agreement which expired in 2018 . Vehicle rent expense amounted to $1,912 and $1,571 during the years ended December 31, 2018 and 2017 , respectively. Future minimum lease payments under all non-cancelable operating leases as of December 31, 2018 consist of the following: Years Ending December 31, Amount 2019 $ 643,930 2020 647,341 2021 589,538 2022 577,055 2023 584,803 Thereafter 134,700 Total $ 3,177,367 Guarantees The Company guarantees certain obligations of a former subsidiary of ADGE, EuroSite Power Inc. These guarantees include a payment performance guarantee in respect of collateralized equipment financing loans, with a remaining principal amount outstanding subject to the guarantee at December 31, 2018 of approximately $202,359 due ratably in equal installments through September 2021, and certain guarantees of performance in respect of certain customer contracts. Based on current conditions, the Company does not believe there to be any amounts probable of payment by the Company under any of the guarantees and has estimated the value associated with the non-contingent aspect of the guarantees is approximately $7,000 which is recorded as a liability in the accompanying financial statements. Dismissal of Litigation The Company was previously a party to an action in the United States District Court for the District of Massachusetts, described below, related to the Merger. All claims in the litigation relating to the Merger have been dismissed. On November 16, 2018, the US District Court for the District of Massachusetts dismissed all remaining claims against all defendants in the litigation against Tecogen Inc. and its affiliates, including American DG Energy Inc., and their directors and certain officers, relating to the merger of American DG Energy Inc. with and into a subsidiary of Tecogen Inc. in a case filed on May 15, 2017 titled Vardakas v. American DG. Energy, Inc., Case No. 17-CV-1024(LTS). The case was originally filed in February 2017 in Massachusetts state court by William C. May ("May"), individually and on behalf of the other shareholders of American DG Energy Inc. as a class in the Business Litigation Session of the Superior Court of the Commonwealth of Massachusetts, Civil Action N. 17-0390. Plaintiff May voluntarily dismissed the state court case on May 31, 2017 and consolidated that case with the case filed by plaintiff Lee Vardakas on May 15, 2017 in US District Court for the District of Massachusetts, alleging violations of federal securities laws and breaches of fiduciary duties to minority shareholders of American DG Energy Inc. in connection with the merger of American DG Energy Inc. with a subsidiary of Tecogen Inc. The US District Court dismissed all federal securities law claims in the case on March 2, 2018. On November 16, 2018 the remaining state law claims alleging breach of fiduciary duties to minority stockholders, and aiding and abetting breaches of fiduciary duties, were dismissed on the basis of the defendants' Motion for Judgment on the Pleadings. Plaintiff's motion for class certification was also dismissed on November 16, 2018. |
Product warranty
Product warranty | 12 Months Ended |
Dec. 31, 2018 | |
Guarantees [Abstract] | |
Product warranty | Product warranty The Company reserves an estimate of its exposure to warranty claims based on both current and historical product sales data and warranty costs incurred. The majority of the Company’s products carry a one -year warranty. The Company assesses the adequacy of its recorded warranty liability annually and adjusts the amount as necessary. The warranty liability is included in accrued expenses on the accompanying consolidated balance sheets. Changes in the Company’s warranty reserve were as follows: Warranty reserve, December 31, 2016 $ 148,000 Warranty provision for units sold 128,100 Costs of warranty incurred (142,600 ) Warranty reserve, December 31, 2017 133,500 Warranty provision for units sold 348,100 Costs of warranty incurred (341,000 ) Warranty reserve, December 31, 2018 $ 140,600 |
Stockholders' equity
Stockholders' equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Stockholders' equity | Stockholders’ equity Common Stock As discussed in Note 4. "Acquisition of American DG Energy Inc." , on May 18, 2017, the Company completed the acquisition of ADGE, by means of a stock-for-stock merger, of 100% of the outstanding common shares of ADGE in exchange for 4,662,937 shares of the Company's newly issued common stock. The holders of Common Stock have the right to vote their interest on a per share basis. At December 31, 2018 and 2017 , there were 24,824,746 and 24,766,892 shares of Common Stock outstanding, respectively. Preferred Stock On February 13, 2013, the Company authorized 10 million shares of preferred stock. As of December 31, 2018 , no preferred shares were issued or outstanding. Warrants In conjunction with the Ultratek Joint Venture, the Board of Directors granted 250,000 warrants to Dr. Elias Samaras at $4.00 a share with an expiration date of December 28, 2017. The warrants granted to Dr. Samaras expired unexercised. Stock-Based Compensation The Company adopted the 2006 Stock Option and Incentive Plan (the “Plan”), under which the board of directors may grant incentive or non-qualified stock options and stock grants to key employees, directors, advisors and consultants of the Company. The Plan was amended at various dates by the Board of Directors to increase the reserved shares of common stock issuable under the Plan to 3,838,750 as of December 31, 2018 , and in June 2017 stockholders approved an amendment to extend the termination date of the Plan to January 1, 2026 and to ratify all Company option grants made after January 1, 2016 (the “Amended Plan”). Stock options vest based upon the terms within the individual option grants, with an acceleration of the unvested portion of such options upon a change in control event, as defined in the Amended Plan. The options are not transferable except by will or domestic relations order. The option price per share under the Amended Plan cannot be less than the fair market value of the underlying shares on the date of the grant. The number of shares remaining available for future issuance under the Amended Plan as of December 31, 2018 and 2017 was 1,990,980 and 2,123,747 , respectively. In 2018 the Company granted nonqualified options to purchase an aggregate of 367,500 shares of common stock in a range of $2.30 and $4.04 per share to certain officers and employees. These options have a vesting schedule of four years and expire in ten years . The fair value of the options issued in 2018 was $365,054 . The weighted-average grant date fair value of stock options granted during 2018 was $0.99 per option. In 2017 , the Company granted nonqualified options to purchase an aggregate of 45,000 shares of common stock for between $3.22 and $3.72 per share to certain employees and a director. These options have a vesting schedule of four years and expire in ten years . The fair value of the options issued in 2017 was $41,113 . The weighted-average grant date fair value of stock options granted during 2017 was $0.91 per option. In 2018 and 2017 , option holders exercised 57,854 and (156,124) options, respectively, with an intrinsic value of $137,085 and $149,598 , respectively. Stock option activity for the year ended December 31, 2018 was as follows: Common Stock Options Number of Options Exercise Share Weighted Price Weighted Life Aggregate Value Outstanding, December 31, 2017 1,061,552 $0.79-$18.15 $ 3.60 4.95 years $ 291,449 Granted 367,500 $2.30-$4.04 3.35 Exercised (57,854 ) $1.20-$2.60 1.26 137,085 Canceled and forfeited (78,609 ) $2.30-$18.15 6.43 Outstanding, December 31, 2018 1,292,589 $0.79-$10.33 $ 3.52 5.93 years $ 671,331 Exercisable, December 31, 2018 855,089 $ 3.46 $ 620,266 Vested and expected to vest, December 31, 2018 1,226,964 $ 3.51 $ 663,672 Using the Company's historical forfeiture rate of 15% , the table above uses said rate in the expected to vest calculation. The Company uses the Black-Scholes option pricing model to determine the fair value of stock options granted. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs. Expected volatility was calculated based on the average volatility of four comparable publicly traded companies. The average expected life was estimated using the simplified method to determine the expected life based on the vesting period and contractual terms, since it does not have the necessary historical exercise data to determine an expected life for stock options. The Company uses a single weighted-average expected life to value option awards and recognizes compensation on a straight-line basis over the requisite service period for each separately vesting portion of the awards. The risk-free interest rate is based on U.S. Treasury zero-coupon issues with a remaining term which approximates the expected life assumed at the date of grant. The weighted average assumptions used in the Black-Scholes option pricing model for options granted in 2018 and 2017 are as follows: Stock option awards: 2018 2017 Expected life 6.25 years 6.25 years Risk-free interest rate 2.73% 1.86% Expected volatility 20.90% 23.10% The Company granted restricted stock awards to its employees and directors. The performance based awards have vesting schedules of 25% or 33% per year beginning one year after the Company's IPO in 2014. Restricted stock activity for the year ended December 31, 2018 was as follows: Number of Restricted Stock Weighted Average Grant Date Fair Value Unvested, December 31, 2017 42,921 $ 1.31 Granted — — Vested (42,921 ) 1.31 Forfeited — — Unvested, December 31, 2018 — $ — During the years ended December 31, 2018 and 2017 , the Company recognized stock-based compensation expense of $181,188 and $183,768 , respectively, related to the issuance of stock options and restricted stock. No tax benefit was recognized related to the stock-based compensation expense recorded during the years. At December 31, 2018 and 2017 , the total compensation cost related to unvested restricted stock awards and stock option awards not yet recognized is $415,941 and $281,554 , respectively. This amount will be recognized over a weighted average period of 2.02 years . |
Fair Value Measurements (Notes)
Fair Value Measurements (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair value measurements The fair value topic of the FASB Accounting Standards Codification defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The accounting guidance also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available, and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value: Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities. The Company currently does not have any Level 1 financial assets or liabilities. Level 2 - Observable inputs other than quoted prices included in Level 1. Level 2 inputs include quoted prices for identical assets or liabilities in non-active markets, quoted prices for similar assets or liabilities in active markets and inputs other than quoted prices that are observable for substantially the full term of the asset or liability. Level 3 - Unobservable inputs reflecting management’s own assumptions about the input used in pricing the asset or liability. The Company currently does not have any Level 3 financial assets or liabilities. The following table presents the asset reported in the consolidated balance sheet measured at its fair value on a recurring basis as of December 31, 2018 and 2017 by level within the fair value hierarchy. December 31, 2018 Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs Total Level 1 Level 2 Level 3 Total gains (losses) Recurring fair value measurements Available-for-sale equity securities EuroSite Power Inc. $ 236,167 $ — $ 236,167 $ — $ (283,401 ) Total recurring fair value measurements $ 236,167 $ — $ 236,167 $ — $ (283,401 ) December 31, 2017 Recurring fair value measurements Available-for-sale equity securities EuroSite Power Inc. $ 354,251 $ — $ 354,251 $ — $ (165,317 ) Total recurring fair value measurements $ 354,251 $ — $ 354,251 $ — $ (165,317 ) The Company utilizes a Level 2 category fair value measurement to value its investment in EuroSite Power Inc. as an available-for-sale security at period end. That measurement is equal to the quoted market closing price at period end. Since this security is not actively traded we are classifying as Level 2. |
Retirement plans
Retirement plans | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Retirement plans | Retirement plans The Company has a defined contribution retirement plan (the “Plan”), which qualifies under Section 401(k) of the Internal Revenue Code (IRC). Under the Plan, employees meeting certain requirements may elect to contribute a percentage of their salary up to the maximum allowed by the IRC. The Company matches a variable amount based on participant contributions up to a maximum of 4.5% of each participant’s salary. The Company contributed approximately $238,680 and $231,945 to the Plan in 2018 and 2017 , respectively. |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related party transactions | Related party transactions In January of 2017, prior to its acquisition of American DG Energy, the Company purchased a large quantity of used equipment from ADGE for approximately $985,000 . Tecogen sold the majority of this equipment to specific customers during the year and plans to sell the remainder in the coming year. In connection with the acquisition of American DG Energy, the Company assumed a loan from John N. Hatsopoulos, the Company's Co-Chief Executive Officer and a Company Director. The loan is in the amount of $850,000 and bears interest at 6% , payable quarterly. On May 4, 2018, the Company, through a payment of $919,590 , terminated the loan and all obligations under the loan. Ultra Emissions Technologies S.ar.L On December 28, 2015, the Company entered into a joint venture agreement relating to the formation of a joint venture company (the “JV”) organized to develop and commercialize Tecogen’s patented technology (“Ultera ® Technology”) designed to reduce harmful emissions generated by engines using fossil fuels. The joint venture company, called Ultra Emissions Technologies S.ar.L, formerly known as "Ultra Emissions Technologies Limited" ("Ultratek"), was originally organized under the laws of the Island of Jersey, Channel Islands. The Company received a 50% equity interest in the JV in exchange for a fully paid-up worldwide license to use Tecogen’s Ultera emissions control technology in the field of mobile vehicles burning fossil fuels. The other half of the joint venture equity interests were purchased for $3,000,000 by a small group of non US investors. Warrants to purchase additional equity securities in the JV were granted to all parties pro rata. If the venture is not successful, all licensed intellectual property rights will revert to Tecogen. On August 2, 2016, Tecogen exercised 2,000,000 warrants (the "Ultratek Warrants"), to purchase shares of the JV, at $1.00 per share, for an aggregate amount of $2 million. The funds used to exercise the Ultratek Warrants were acquired by the Company from the holders of certain Company warrants (the "Tecogen Warrant Holders"), when they partially exercised their Tecogen warrants (the "Tecogen Warrants"), in July of 2016. The Tecogen Warrant Holders exercised a total of 675,000 Tecogen Warrants with a $4.00 exercise price, resulting in cash proceeds of $2,700,000 to the Company, which the Company then used in part to invest in the JV. An additional $8,500,000 was raised from other outside investors for a total equity investment in the JV to date of $13,500,000 . Due to this investment, Tecogen's ownership decreased to 43% . By unanimous written consent on October 24, 2017, the shareholders of Ultratek voted to dissolve Ultratek, thus terminating the joint venture agreement dated December 28, 2015 and the license agreement between the Company and Ultratek. This joint venture agreement and license agreement is described in its entirety on the Company's Form 8-K that was filed with the Securities and Exchange Commission on December 31, 2015. Pursuant to the unanimous shareholder consent dissolving Ultratek, the Company received its full $2,000,000 investment in Ultratek upon the completion of the liquidation process. Further, upon termination of the license agreement all intellectual property immediately reverted to the Company. Upon dissolution, the Company purchased all of the remaining assets of Ultratek, including new intellectual property that Ultratek developed and other assets, for a total purchase price of $400,000 . TTcogen LLC On May 19, 2016, the Company along with Tedom a.s., an unrelated corporation incorporated in the Czech Republic and a European combined heat and power product manufacturer ("Tedom"), entered into a joint venture, pursuant to which the Company held a 50% participating interest and the remaining 50% interest was held by Tedom. As part of the joint venture, the parties agreed to create a Delaware limited liability company, TTcogen LLC ("TTcogen"), to carry out the business of the venture. Tedom granted TTcogen the sole and exclusive right to market, sell, offer for sale, and distribute certain products as agreed to by the parties throughout the United States. The product offerings of the joint venture expand the current Tecogen product offerings to the MicroCHP of 35kW to large 4,000kW plants. Tecogen agreed to refer all appropriate sales leads to TTcogen regarding the products agreed to by the parties, and Tecogen had the first right to repair and maintain the products sold by TTcogen. Until the Company acquired the assets of TTcogen, the Company accounted for its interest in TTcogen's operations using equity method accounting. Any initial operating losses of TTcogen were borne and funded by Tedom. To the extent any such losses were borne and funded solely by Tedom, the Company did not recognize any portion of such losses given the Company did not guarantee the obligations of the joint venture nor is it committed to provide funding to the joint venture. On September 22, 2017, the Company provided written notice to Tedom and Tedom USA Inc., a Delaware subsidiary of Tedom (“Tedom USA”) that the Company is exercising its rights under the Joint Venture Agreement dated May 19, 2016 ("JVA") and the TTcogen LLC Operating Agreement ("LLC Operating Agreement"), to terminate the JVA and LLC Operating Agreement. This notice began the dissolution process under the LLC Operating Agreement. On March 27, 2018, the Company entered into a Membership Interest Purchase and Wind-Down Agreement (the “Purchase Agreement”) among the Company, Tedom, Tedom USA, and TTcogen. The Purchase Agreement follows the mutual agreement of the parties to terminate the joint venture between the Company and Tedom that resulted in the creation of TTcogen, and implements the acquisition by the Company of Tedom USA’s 50% membership interest in TTcogen for a purchase price of one dollar, plus $72,597 , which represents a portion of Tedom USA's initial investment in TTcogen, minus certain adjustments. The Purchase Agreement also grants TTcogen and the Company the exclusive right to market, sell, and distribute Tedom’s Micro T35 combined heat and power equipment within an agreed territory in the northeastern United States under certain conditions, and limits the Company’s right to sell certain competing products. The Company will provide services for Tedom equipment sold by TTcogen or the Company. The acquisition of Tedom's 50% membership interest for $72,598 was accounted for as an acquisition of assets, and not a business combination, due to the lack of an assembled workforce. The Company adopted the provisions of ASU 2017-01 "Business Combinations - Clarifying the Definition of a Business" at the beginning of 2018, which require, at a minimum, the presence of an input and substantive process that together significantly contribute to the ability to create an output. The lack of an assembled workforce results in the non presence of a substantive process. The following represents the consideration for and the fair value of assets acquired and liabilities assumed recognized at the acquisition date: Cash $ 442,786 Accounts receivable 176,235 Unbilled revenue 232,540 Fixed assets 47,508 Intangible assets 29,607 Accounts payable (811,468 ) Deferred revenue (44,610 ) Cash payable $ 72,598 The intangible asset represents contract backlog related to acquired contracts. The value assigned to contract backlog was determined based on the result of a discounted cash flow analysis, which resultant value was capped so as to preclude recognition of any amount in excess of cost after considering the fair values assigned to other assets acquired and liabilities assumed. Revenue from sales of cogeneration and chiller systems, parts, installations and service to TTcogen during the year ended December 31, 2017 amounted to $347,275 . The amounts due to Tecogen from TTcogen and Tedom USA as of December 31, 2017 was $585,492 . This amount was recorded in the accompanying consolidated balance sheets as due from related parties. Other financing transactions During the years ended December 31, 2018 and 2017 , the Company had a loan with John N. Hatsopoulos, the former Co-Chief Executive Officer of both Tecogen and American DG Energy. Details of these transactions can be found in Note 9. "Revolving line of credit, Convertible debentures and loan due to related party" . On December 23, 2013, the Company entered into a Senior Convertible Promissory Note with Michaelson Capital Special Finance Fund LP. On April 1, 2016, this note was amended to extend the maturity date and revise the security and conversion price. On December 14, 2017 the note was discharged. Details of this payoff and discharge can be found in Note 9. "Revolving line of credit, Convertible debentures and loan due to related party" . |
Segments (Notes)
Segments (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segments | Segments As of December 31, 2018 , the Company was organized into two operating segments through which senior management evaluates the Company’s business. These segments, as described in more detail in Note 1, are organized around the products and services provided to customers and represent the Company’s reportable segments. Prior to the acquisition of ADGE (see Note 4. "Acquisition of American DG Energy Inc." ), the Company’s operations were comprised of a single segment.The following table presents information by reportable segment for the years ended December 31, 2018 and 2017 : Products and Services Energy Production Corporate, other and elimination (1) Total Year ended December 31, 2018 Revenue - external customers $ 29,484,158 $ 6,399,526 $ — $ 35,883,684 Intersegment revenue 1,211,148 — (1,211,148 ) — Total revenue 30,695,306 6,399,526 (1,211,148 ) 35,883,684 Gross profit 10,993,490 2,598,372 — 13,591,862 Identifiable assets 27,566,921 22,337,472 — 49,904,393 Year ended December 31, 2017 Revenue - external customers $ 29,368,726 $ 3,833,940 $ — $ 33,202,666 Intersegment revenue 750,692 — (750,692 ) — Total revenue 30,119,418 3,833,940 (750,692 ) 33,202,666 Gross profit 11,154,982 1,799,422 — 12,954,404 Identifiable assets 24,234,505 26,436,571 — 50,671,076 (1) Corporate, intersegment revenue, other and elimination includes various corporate assets. |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes A reconciliation of the federal statutory income tax provision to the Company's actual provision for the years ended December 31, 2018 and 2017 is as follows: 2018 2017 Pre-tax book income (loss) (5,768,378 ) 97,697 Expected tax at 21% and 34%, respectively (1,211,359 ) 33,217 Permanent differences: Machinery & equipment 4,658 10,888 Mark to market 24,798 — Goodwill impairment 922,024 — Intangible Amortization (180,780 ) — Stock compensation — (179,084 ) Non-deductible interest — 10,788 Other 876 26 State taxes: Current 32,748 — Deferred (120,477 ) (24,960 ) Other items: Federal research and development credits (35,550 ) (33,406 ) Change in valuation allowance (153,000 ) 277,000 Deferred tax past year true-up's (99,348 ) 191,355 ADGE deferred tax assets and liabilities at purchase — (3,702,013 ) ADGE other post-closing adjustments — (1,330,665 ) Change in statutory tax rate for deferred tax assets-Federal — 4,914,329 Change in statutory tax rate for deferred tax assets-State — (167,475 ) True up - ADG NOL IRC Sec 382 limitation 817,198 — Other 30,960 — Income tax provision $ 32,748 $ — The components of net deferred tax assets recognized in the accompanying consolidated balance sheets at December 31, 2018 and 2017 are as follows: 2018 2017 Net operating loss carryforwards $ 7,206,000 $ 7,429,000 R&D and ITC credit carryforwards 244,000 203,000 Accrued expenses and other 1,140,000 879,000 Accounts receivable 7,000 6,000 Inventory 73,000 73,000 Property, plant and equipment 568,000 801,000 Deferred tax assets 9,238,000 9,391,000 Valuation allowance (9,238,000 ) (9,391,000 ) Deferred tax assets, net $ — $ — At December 31, 2018 , the Company had approximately $29,793,000 of Federal Loss Carryforwards that expire beginning in the year 2022 through 2037. In addition, the Company has varying amounts of state net operating losses, expiring at various dates starting in 2019 through 2038. The Tax Cuts and Jobs Act was enacted on December 22, 2017. A significant provision of the act was to reduce the statutory Federal tax rate from 34% to 21%. During 2018, the Company’s valuation allowance decreased by $153,000 . This decrease is affected by the absorption of deferred tax attributes associated with its acquisition of American DG Energy, Inc. along with permanent book to tax differences and provision to return adjustments. In accordance with the provisions of the Income Taxes topic of the Codification, the Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets, which are comprised principally of net operating losses. Management has determined that it is more likely than not that the Company will not recognize the benefits of federal and state deferred tax assets and, as a result, a full valuation allowance has been established for 2017 and 2018 respectively. Utilization of the NOL and research and development credit carryforwards are subject to a substantial annual limitation due to ownership changes, as provided by Section 382 of the Internal Revenue Code of 1986, as well as similar state provisions. Ownership changes may limit the amount of NOL and tax credit carryforwards that can be utilized to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50 percentage points over a three -year period. The Company acquired a new subsidiary, American DG Energy, Inc. during 2017, by acquiring 100 percent of the company's stock. Accordingly, utilization of their consolidated and/or separately computed NOL and/or tax credit carryforwards will be subject to an annual limitation under Internal Revenue Code Section 382. Any such limitation may result in expiration of a portion of the NOL or tax credit carryforwards before utilization. The extent of the limitation, and related allocation and impact upon the NOL and credit carryforwards has been determined to be $391,394 per year for a 20 year period at the ADGE level. The Company, however, has enough pre-merger NOLs to offset anticipated taxable income for the taxable year ended December 31, 2018 and is not expected to be limited in NOL utilization for the period. A full valuation allowance has been provided against the Company's loss carryforwards and, if an adjustment is required under Section 382, it would be offset by a corresponding adjustment to the valuation allowance. Thus, there would be no impact to the balance sheet or statement of operations if an adjustment were required. The Company has not recorded any amounts for unrecognized tax benefits as of December 31, 2018 or 2017 . The Company files tax returns as prescribed by the tax laws of the jurisdiction in which it operates. In the normal course of business the Company is subject to examination by federal and state jurisdictions, where applicable. There are currently no pending tax examinations. The Company is thus still open to examination from tax year 2015 for both federal and state jurisdictions. |
Subsequent events
Subsequent events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent events | Subsequent events On February 1, 2019, the Board of Directors increased the size of the Company's Board of Directors to seven directors and elected Mr. John Hatsopoulos to serve as a director of the Company for the period from February 1, 2019 until the Company's 2019 annual meeting of stockholders, or until his successor is duly elected and qualified. Mr. Hatsopoulos will serve as Lead Director for purposes of assisting the Company in identifying and evaluating financing alternatives for the Company. On March 5, 2019, the Company transferred ownership of certain of its energy systems related assets and related energy production contracts in a sale transaction in consideration for approximately $5 million . In connection with the sale, the Company entered into two separate agreements to provide operational and maintenance services for the purchaser. Concurrently, the Company amended the terms of an agreement related to certain energy systems related assets and related energy production contracts, the ownership of which were transferred to the same purchaser in December 2018 in consideration of approximately $2 million , in order to conform and finalize the terms of the agreement to the latter agreement. The foregoing resulted in a disposition of more than an insignificant portion of the income producing assets of the energy production segment of the Company which will result in additional impairment of the goodwill associated with those assets. The Company has evaluated subsequent events through the date of this report and determined that there are no additional subsequent events that have occurred that would require recognition in the consolidated financial statements or disclosure in the notes thereto. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and 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. The Company 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 consolidated financial statements include the accounts of the Company and entities in which it has a controlling financial interest. Those entities include the Company's wholly-owned subsidiary, ADGE 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 the Company and the noncontrolling partner in each site. Each quarter, the Company calculates a year-to-date profit/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/loss. The same methodology is used to determine quarterly distributions of available cash to the noncontrolling interest partner. On the Company’s 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 December 31, 2018 . Investments in partnerships and companies in which the Company does not have a controlling financial interest but where we have significant influence are accounted for under the equity method. Noncontrolling interests in the net assets and operations of ADGNY are reflected in the caption “Noncontrolling interest” in the accompanying consolidated financial statements. All intercompany transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. |
Concentration of Credit Risk | Concentration of Credit Risk The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company maintains its cash balances in bank accounts, which at times may exceed the Federal Deposit Insurance Corporation’s general deposit insurance limits. The amount on deposit at December 31, 2018 and 2017 which exceeded the $250,000 federally insured limit were approximately $0 and $1,172,911 , respectively. The Company has not experienced any losses in such accounts and thus believes that it is not exposed to any significant credit risk on cash. There were no customers who represented more than 10% of revenues for the year ended December 31, 2018 and one customers who represented more than 10% of revenues for the year ended December 31, 2017 . The Company has approximately five hundred customers who represented 100% of the revenues for the year ended December 31, 2018 . There was 1 customer who represented more than 10% of the accounts receivable balance as of December 31, 2018 , and none as of December 31, 2017 . |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid instruments with an original maturity date of three months or less when purchased to be cash and cash equivalents. The Company has cash balances in certain financial institutions in amounts which occasionally exceed current federal deposit insurance limits. The financial stability of these institutions is continually reviewed by senior management. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents. |
Accounts Receivable | Accounts Receivable Accounts receivable are stated at the amount management expects to collect from outstanding balances. An allowance for doubtful accounts is provided for those accounts receivable considered to be uncollectible based upon historical experience and management’s evaluation of outstanding accounts receivable at the end of the year. Bad debts are written off against the allowance when identified. At December 31, 2018 and 2017 , the allowance for doubtful accounts was $26,800 and $22,400 , respectively. |
Inventory | Inventory Raw materials, work in process, and finished goods inventories are stated at the lower of cost, as determined by the average cost method, or net realizable value. The Company periodically reviews inventory quantities on hand for excess and/or obsolete inventory based primarily on historical usage, as well as based on estimated forecast of product demand. Any reserves that result from this review are charged to cost of sales. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are recorded at cost. Depreciation is provided using the straight-line method over the estimated useful life of the asset, which range from three to fifteen years. Leasehold improvements are amortized using the straight-line method over the lesser of the estimated useful lives of the assets or the term of the related leases. Expenditures for maintenance and repairs are expensed currently, while renewals and betterments that materially extend the life of an asset are capitalized. The Company receives rebates and incentives from various utility companies and governmental agencies which are accounted for as a reduction in the book value of the assets. The rebates are payable from the utility to the Company and are applied against the cost of construction, therefore reducing the book value of the installation. As a reduction of the facility construction costs, these rebates are treated as an investing activity in the statements of cash flows. The rebates received by the Company from the utilities that apply to the cost of construction are one time rebates based on the installed cost, capacity and thermal efficiency of the installed unit and are earned upon the installation and inspection by the utility and are not related to or subject to adjustment based on the future operating performance of the installed units. The rebate agreements with utilities are based on standard terms and conditions, the most significant being customer eligibility and post-installation work verification by a specific date. During 2018 the amount of rebates applied to the cost of construction was $180,000 . |
Intangible Assets | Intangible Assets Intangible assets subject to amortization include costs incurred by the Company to acquire product certifications, certain patent costs and developed technologies. These costs are amortized on a straight-line basis over the estimated economic life of the intangible asset. Indefinite life intangible assets such as trademarks are recorded at cost and not amortized. The Company reviews intangible assets for impairment when the circumstances warrant. |
Impairment of Long-Lived Assets | Impairment of Long-lived Assets Long-lived assets, including intangible assets and property, plant and equipment, are evaluated for impairment whenever events or changes in circumstances have indicated that an asset may not be recoverable and are grouped with other assets to the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. If the sum of the projected undiscounted cash flows (excluding interest charges) is less than the carrying value of the assets, the assets will be written down to the estimated fair value and such loss is recognized in income from continuing operations in the period in which the determination is made. Management determined that no impairment of long-lived assets existed as of December 31, 2018 . |
Goodwill | Goodwill Goodwill is the excess of the acquisition cost of businesses over the fair value of the identifiable net assets acquired. Impairment testing for goodwill is performed annually in the fourth fiscal quarter or more frequently if impairment indicators are present. To determine if goodwill is potentially impaired, we have the option to perform a qualitative assessment. However, we may elect to bypass the qualitative assessment and perform an impairment test even if no indications of a potential impairment exist. The impairment test for goodwill is performed at the reporting unit level and compares the fair value of the reporting unit (calculated using a discounted cash flow method) to its carrying value, including goodwill. The discount rate represents our estimate of the weighted-average cost of capital, or expected return, that a marketplace participant would have required as of the valuation date. If the carrying value exceeds the fair value, an impairment charge is recorded for the excess carrying value over fair value, limited to the total amount of goodwill of that reporting unit. Our assessment in 2018 indicated that the carrying value of our energy production reporting unit exceeded its fair value and therefore resulted in an impairment of goodwill (see Note 8. "Goodwill" ). The Company early-adopted the provisions of ASU 2017-04, during 2018, which simplified the impairment testing process by eliminating the requirement to determine the implied fair value of goodwill. The Company tests it goodwill for impairment on either a qualitative basis under certain conditions, or a quantitative basis. On a quantitative basis, fair value of the reporting units is primarily determined using probability weighted discounted cash flow analysis. |
Income (Loss) per Common Share | Income (loss) per Common Share The Company computes basic loss per share by dividing net income (loss) for the period by the weighted-average number of shares of common stock outstanding during the period. The Company computes its diluted earnings per common share using the treasury stock method. For purposes of calculating diluted earnings per share, the Company considers its shares issuable in connection with the convertible debentures, stock options and warrants to be dilutive common stock equivalents when the exercise/conversion price is less than the average market price of our common stock for the period. For the year ended December 31, 2017 the Company included 171,594 dilutive shares resulting from assumed exercise of stock options. |
Segment Information | Segment Information The Company's operations are comprised of two business segments. Our Products and Services segment designs, manufactures and sells industrial and commercial cogeneration systems as described above. Our Energy Production segment sells energy in the form of electricity, heat, hot water and cooling to our customers under long-term sales agreements. Prior to the acquisition of ADGE (see Note 4. "Acquisition of American DG Energy Inc." ), the Company's operations were comprised of a single segment (see Note 16. "Segments" ). |
Income Taxes | Income Taxes The Company uses the asset and liability method of accounting for income taxes. The current or deferred tax consequences of transactions are measured by applying the provisions of enacted tax laws to determine the amount of taxes payable currently or in future years. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities and expected future tax consequences of events that have been included in the financial statements or tax returns using enacted tax rates in effect for the years in which the differences are expected to reverse. Under this method, a valuation allowance is used to offset deferred taxes if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets may not be realized. Management evaluates the recoverability of deferred taxes and the adequacy of the valuation allowance annually. The Company has adopted the provisions of the accounting standards relative to accounting for uncertainties in tax positions. These provisions provide guidance on the recognition, de-recognition and measurement of potential tax benefits associated with tax positions. The Company elected to recognize interest and penalties related to income tax matters as a component of income tax expense in the statements of operations. The Company has analyzed its current tax return compliance positions and has determined that no uncertain tax positions have been taken that would require recognition. With few exceptions, the Company is no longer subject to possible income tax examinations by federal, state or local taxing authorities for tax years before 2015, with the exception of loss carryforwards in the event they are utilized in future years. The Company's tax returns are open to adjustment from 2001 forward, as a result of the fact that the Company has loss carryforwards from those years, which may be adjusted in the year those losses are utilized. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments are cash and cash equivalents, accounts receivable, available-for-sale securities, accounts payable and revolving line of credit. The recorded values of cash and cash equivalents, accounts receivable, accounts payable and line of credit approximate their fair values based on their short-term nature. At December 31, 2018 , the recorded value on the consolidated balance sheet of the loan due to related party approximates fair value as the terms approximate those available for similar instruments. |
Revenue Recognition | Revenue Recognition 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 a sales transaction are recorded in revenue and shipping and handling costs incurred are recorded in cost of sales. The Company has elected to exclude from revenue any value add sales and other taxes which it collects concurrent with revenue-producing activities. These accounting policy elections are consistent with the manner in which the Company historically recorded shipping and handling fees and taxes. Incremental costs incurred by us in obtaining a contract with a customer are negligible, if any, and are expensed ratably in proportion to the related revenue recognized. The application of ASU 2014-09 did not have an impact upon adoption or on the amounts reported for 2018 as compared with the guidance that was in effect before the adoption and application of ASU 2014-09. Disaggregated Revenue In general, the Company's business segmentation is aligned according to the nature and economic characteristics of its products and customer relationships and provides meaningful disaggregation of each business segment's results of operations. The following table further disaggregates our revenue by major source by segment for the year ended December 31, 2018 . Year Ended December 31, 2018 Products and Services Energy Production Total Products $ 12,624,867 $ — $ 12,624,867 Installation services 8,097,473 — 8,097,473 Maintenance services 8,761,818 — 8,761,818 Energy production — 6,399,526 6,399,526 Total revenue $ 29,484,158 $ 6,399,526 $ 35,883,684 Product and Services Segment Products. We transfer control and generally recognize a sale when we ship a product from our manufacturing facility at which point a customer takes ownership of the product. Payment terms on product sales are generally 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 expected cost plus a margin approach, and/or a residual approach to determine the standalone selling prices for separate performance obligations as a basis for allocating contract consideration when an observable selling price is not available. Amounts received but not recognized pending completion of performance are recognized as contract liabilities and are recorded as deferred revenue along with deposits by customers. Installation Services. We provide both complete turnkey installation services and what we refer to as light installation services. Complete turnkey installation services typically include all necessary engineering and design, labor, subcontract labor and service, and ancillary products and parts necessary to install a cogeneration unit including integration into the customers’ existing electrical and mechanical systems. Light installation services typically include some engineering and design as well as certain ancillary products and parts necessary for the customers’ installation of a cogeneration unit. Under light installation contracts, revenue related to ancillary products and parts is recognized when we transfer control of such items to the customer, generally when we ship them from our manufacturing facility, with revenue related to engineering and design services being recognized at the point where the customer can benefit from the service, generally as completed. Generally billings under light installation contracts are made when shipped and/or completed, with payment terms generally being 30 days. Under complete turnkey installation service contracts revenue is recognized over time using the percentage-of-completion method determined on a cost to cost basis. Our performance obligation under such contracts is satisfied progressively over time as enhancements are made to customer owned and controlled properties. We measure progress towards satisfaction of the performance obligation based on an input method based on cost which we believe is the most faithful depiction of the transfer of products and services to the customer under these contracts. When the financial metrics of a contract indicate a loss, our policy is to record the entire expected loss as soon as it is known. Contract costs and profit recognized to date under the percentage-of-completion method in excess of billings are recognized as contract assets and are recorded as unbilled revenue. Billings in excess of contract costs and profit are recognized as contract liabilities and are recorded as deferred revenue. Generally billings under complete turnkey installation contracts are made when contractually determined milestones of progress have been achieved, with payment terms generally being 30 days. Maintenance Services. Maintenance services are provided under either long-term maintenance contracts or one-time maintenance contracts. Revenue under one-time maintenance contracts is recognized when the maintenance service is completed. Revenue under long-term maintenance contracts is recognized either ratably over the term of the contract where the contract price is fixed or when the periodic maintenance activities are completed where the invoiced cost to the customer is based on run hours or kilowatts produced in a given period. We use an output method to measure progress towards completion of our performance obligation which results in the recognition of revenue on the basis of a direct measurement of the value to the customer of the services transferred to date relative to the remaining services promised under the contract. We use the practical expedient at ASC 606-10-55-18 of recognizing revenue in an amount equal to that amount to which we have the right to invoice the customer under the contract. Energy Production Segment Energy Production. Revenue from energy contracts is recognized when electricity, heat, hot and/or chilled water is produced by the Company owned on-site cogeneration systems. Each month we bill the customer and recognize revenue for the various forms of energy delivered, based on meter readings which capture the quantity of the various forms of energy delivered in a given month, under a contractually defined formula which takes into account the current month's cost of energy from the local power utility. As the various forms of energy delivered by us under energy production contracts are simultaneously delivered and consumed by the customer, our performance obligation under these contracts is considered to be satisfied over time. We use an output method to measure progress towards completion of our performance obligation which results in the recognition of revenue on the basis of a direct measurement of the value to the customer of the services transferred to date relative to the remaining services promised under the contract. We use the practical expedient at ASC 606-10-55-18 of recognizing revenue in an amount equal to that amount to which we have the right to invoice the customer under the contract. Payment terms on invoices under these contracts are generally 30 days. Contract Balances The timing of revenue recognition, billings and cash collections result in billed accounts receivable, unbilled revenue (contract assets) and deferred revenue, consisting of customer deposits and billings in excess of revenue recognized (contract liabilities) on the Consolidated Balance Sheets. Revenue recognized during the year ended December 31, 2018 that is included in unbilled revenue is approximately $2.2 million . Approximately $1.6 million of revenue was billed in this period that had been recognized in previous periods. Revenue recognized during the year ended December 31, 2018 that was included in deferred revenue at the beginning of the period was approximately $3.0 million . The increase in the deferred revenue balance during the year ended December 31, 2018 is primarily a result of approximately $4.5 million of prepayments added during the period, $2.0 million of which relates to an agreement for disposal of certain energy production related assets of the Company in December 2018, that was not included in the deferred revenue balance at the beginning of the year, offset by cash payments of $1.6 million received in advance of satisfying performance obligations. Remaining Performance Obligations Remaining performance obligations related to ASC 606 represent the aggregate transaction price allocated to performance obligations with an original contract term greater than one year, excluding certain maintenance contracts and all energy production contracts where a direct measurement of the value to the customer is used as a method of measuring progress towards completion of our performance obligation. Exclusion of these remaining performance obligations is due in part to the inability to quantify values based on unknown future levels of delivery and in some cases rates used to bill customers. Remaining performance obligations therefore consist of unsatisfied or partially satisfied performance obligations related to fixed price maintenance contracts and installation contracts. |
Advertising Costs | Advertising Costs The Company expenses the costs of advertising as incurred. For the years ended December 31, 2018 and 2017 , advertising expense was approximately $273,000 and $278,000 , respectively. |
Research and Development Costs | Research and Development Costs Research and development expenditures are expensed as incurred. The Company’s total research and development expenditures of approximately $1,298,000 and $937,000 were recognized for each of the years ended December 31, 2018 and 2017 , respectively. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as an expense in the statements of operations over the requisite service period. The determination of the fair value of share-based payment awards is affected by the Company’s stock price. For the awards prior to the Company being publicly traded, the Company considered the sales price of the Common Stock in private placements to unrelated third parties as a measure of the fair value of its Common Stock. The Company utilizes actual forfeitures when calculating the expense for the period. Stock-based compensation expense recognized is based on awards that are ultimately expected to vest. The Company evaluates the assumptions used to value awards regularly and if factors change and different assumptions are employed, stock-based compensation expense may differ significantly from what has been recorded in the past. If there are any modifications or cancellations of the underlying unvested securities, the Company may be required to accelerate, increase or cancel any remaining unearned stock-based compensation expense. Pursuant to ASC 505-50, Equity Based Payments to Non-Employees , the fair value of restricted Common Stock and stock options issued to nonemployees is revalued at each reporting period until the ultimate measurement date, as defined by ASC 505-50. The Company records the value of the instruments at the time services are provided and the instruments vest. Accordingly, the ultimate expense is not fixed until such instruments are fully vested. |
Recent Accounting Pronouncements | Significant New Accounting Standards Adopted this Period Revenue Recognition In May 2014, the Financial Accounting Standards Board ("FASB") issued an accounting standard update (ASU 2014-09) related to revenue from contracts with customers, which, along with amendments issued in 2015 and 2016, supersedes nearly all current U.S. GAAP guidance on this topic and eliminates industry-specific guidance. The underlying principle is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The Company adopted this accounting standard update on a modified retrospective basis in the first quarter of 2018. See Revenue Recognition above for further discussion. Investments in Equity Securities In January 2016, the FASB issued an accounting standard update related to investments in equity securities requiring unrealized holding gains and losses to be included in net income. Prior to this update, unrealized holding gains and losses related to available-for-sale securities were included in accumulated other comprehensive income and not included in determining net income. This accounting standard update became effective for the Company beginning in the first quarter of 2018 and is applied by means of a cumulative-effect adjustment to the balance sheet as of January 1, 2018. The Company adopted this accounting standard update in the first quarter of 2018 which resulted in reclassification of $165,317 of cumulative unrealized holding losses from accumulated other comprehensive loss to accumulated deficit. The future impact of recognizing unrealized holding gains or losses in net income is dependent on the movement in the stock prices related to such investments. Business In January 2017, the FASB issued a new accounting standard that changes the definition of a business to assist entities with the evaluation of when a set of assets acquired or disposed of should be considered a business. The new standard requires that an entity evaluate whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets; if so, the set of assets would not be considered a business. The new standard also requires that a business include at least one substantive process, and it narrows the definition of outputs. The Company adopted this standard as of January 1, 2018. Adoption of this new standard may result in more transactions being accounted for as asset acquisitions versus business combinations; however, the impact on our consolidated financial statements in future periods will depend on the facts and circumstances of future transactions. Goodwill During 2018, the Company early-adopted the provisions of ASU 2017-04 which simplified goodwill impairment testing by eliminating the requirement to determine the implied value of goodwill. Disclosure update The Securities and Exchange Commission has recently issued several final rules, including but not limited to SEC Final Rule Release No. 33-10532 Disclosure Update and Simplification (“Final Rule”), which amends certain redundant, duplicative, outdated, superseded or overlapping disclosure requirements. This Final Rule is intended to facilitate disclosure information provided to investors and simplify compliance without significantly impacting the mix of information provided to investors. The amendments also expand the disclosure requirements regarding the analysis of stockholders' equity for interim financial statements, in which entities will be required to present a reconciliation for each period for which a statement of comprehensive income is required to be filed. We adopted the Final Rule effective on November 5, 2018, which did not have any material impact on our consolidated financial statements and related disclosures. Significant New Accounting Standards or Updates Not Yet Effective Leases In February 2016, the FASB issued an accounting standard update related to leases requiring lessees to recognize operating and financing lease liabilities on the balance sheet, as well as corresponding right-of-use assets. The new lease standard also makes some changes to lessor accounting and aligns key aspects of the lessor accounting model with the revenue recognition standard. In addition, disclosures will be required to enable users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The accounting standard update will be effective for the Company beginning in the first quarter of fiscal 2019 on a modified retrospective basis, and early adoption is permitted. The Company believes the adoption of this accounting standard update will result in recognition of lease liabilities and right of use assets related to operating leases of approximately $2.6 million without any cumulative impact on equity upon adoption. |
Summary of significant accoun_3
Summary of significant accounting policies Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Disaggregation of Revenue | The following table further disaggregates our revenue by major source by segment for the year ended December 31, 2018 . Year Ended December 31, 2018 Products and Services Energy Production Total Products $ 12,624,867 $ — $ 12,624,867 Installation services 8,097,473 — 8,097,473 Maintenance services 8,761,818 — 8,761,818 Energy production — 6,399,526 6,399,526 Total revenue $ 29,484,158 $ 6,399,526 $ 35,883,684 |
Income (loss) per common share
Income (loss) per common share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Income (Loss) Per Common Share, Basic and Diluted | Basic and diluted income (loss) per share for the years ended December 31, 2018 and 2017 , respectively, was as follows: 2018 2017 Net income (loss) attributable to stockholders $ (5,708,532 ) $ 47,436 Weighted average shares outstanding - Basic 24,815,926 23,171,033 Basic income (loss) per share $ (0.23 ) $ — Weighted average shares outstanding - Diluted 24,815,926 23,342,627 Diluted income (loss) per share $ (0.23 ) $ — Anti-dilutive shares underlying stock options outstanding 144,077 441,356 |
Acquisition of American DG En_2
Acquisition of American DG Energy Inc. (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisition | The following table summarizes the consideration paid for ADGE and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date, as well as the fair value at the acquisition date of the noncontrolling interest in American DG New York, LLC, a consolidated subsidiary of ADGE. Consideration Tecogen common stock - 4,662,937 shares $ 18,745,007 Assumed fully vested equity awards 114,896 $ 18,859,903 Recognized amounts of identifiable assets acquired and liabilities assumed Financial assets $ 1,542,137 Inventory 75,374 Prepaid and other current assets 358,628 Property, plant and equipment 12,186,664 Investment securities 519,568 Favorable contract asset 1,561,739 Financial liabilities (1,912,859 ) Unfavorable contract liability (8,341,922 ) Other liabilities (939 ) Total identifiable net assets 5,988,390 Noncontrolling interest in American DG New York, LLC (453,272 ) Goodwill 13,324,785 $ 18,859,903 The following represents the consideration for and the fair value of assets acquired and liabilities assumed recognized at the acquisition date: Cash $ 442,786 Accounts receivable 176,235 Unbilled revenue 232,540 Fixed assets 47,508 Intangible assets 29,607 Accounts payable (811,468 ) Deferred revenue (44,610 ) Cash payable $ 72,598 |
Pro Forma Information | The pro forma financial information as presented below is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of fiscal 2016. Year ended December 31, 2017 Total revenues $ 36,232,650 Net income (loss) 113,255 Basic earnings (loss) per share $ 0.01 Diluted earnings (loss) per share $ 0.01 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Summary of Inventory | Inventories at December 31, 2018 and 2017 consisted of the following. 2018 2017 Gross raw materials $ 6,165,099 $ 5,270,732 Less - reserves (284,000 ) (283,000 ) Net raw materials 5,881,099 4,987,732 Work-in-process 413,763 11,852 Finished goods — 131,221 $ 6,294,862 $ 5,130,805 |
Intangible assets other than _2
Intangible assets other than goodwill (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets and liabilities at December 31, 2018 and 2017 consist of the following: December 31, 2018 December 31, 2017 Intangible assets Cost Accumulated Amortization Net Cost Accumulated Amortization Net Product certifications $ 726,159 $ (345,658 ) $ 380,501 $ 605,704 $ (285,341 ) $ 320,363 Patents 910,569 (188,239 ) 722,330 808,323 (154,972 ) 653,351 Developed technology 240,000 (92,000 ) 148,000 240,000 (76,000 ) 164,000 Trademarks 22,752 — 22,752 19,540 — 19,540 In process R&D 263,936 — 263,936 263,001 — 263,001 TTcogen intangible assets 29,607 (2,776 ) 26,831 — — — Favorable contract assets 1,561,739 (232,099 ) 1,329,640 1,561,739 (85,536 ) 1,476,203 $ 3,754,762 $ (860,772 ) $ 2,893,990 $ 3,498,307 $ (601,849 ) $ 2,896,458 Intangible liability Unfavorable contract liability $ 7,912,275 $ (1,619,676 ) $ 6,292,599 $ 8,341,922 $ (612,255 ) $ 7,729,667 |
Schedule of Estimated Future Amortization Expense | Non-contract related intangibles Contract related intangibles Total 2019 $ 246,837 $ (705,430 ) (458,593 ) 2020 237,903 (675,232 ) (437,329 ) 2021 212,446 (680,719 ) (468,273 ) 2022 205,369 (655,086 ) (449,717 ) 2023 198,296 (578,426 ) (380,130 ) Thereafter 440,746 (1,668,066 ) (1,227,320 ) $ 1,541,597 $ (4,962,959 ) $ (3,421,362 ) |
Property, plant and equipment (
Property, plant and equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property, Plant and Equipment | Property, plant and equipment at December 31, 2018 and 2017 consisted of the following: Estimated Useful Life (in Years) 2018 2017 Energy systems 1 - 15 years $ 12,709,990 $ 12,466,642 Machinery and equipment 5 - 7 years 1,355,617 1,215,951 Furniture and fixtures 5 years 222,542 205,320 Computer software 3 - 5 years 200,626 115,253 Leasehold improvements * 450,792 440,519 14,939,567 14,443,685 Less - accumulated depreciation and amortization (3,666,452 ) (2,177,974 ) Net property, plant and equipment $ 11,273,115 $ 12,265,711 * Lesser of estimated useful life of asset or lease term |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Changes in the carrying amount of goodwill by reportable segment during the year was as follows: Product and Service Energy Production Total Company Balance at December 31, 2016 $ 40,870 $ — $ 40,870 Acquisitions 13,324,785 13,324,785 Balance at December 31, 2017 40,870 13,324,785 13,365,655 Impairment loss — (4,390,590 ) (4,390,590 ) Balance at December 31, 2018 $ 40,870 $ 8,934,195 $ 8,975,065 |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum lease payments under all non-cancelable operating leases as of December 31, 2018 consist of the following: Years Ending December 31, Amount 2019 $ 643,930 2020 647,341 2021 589,538 2022 577,055 2023 584,803 Thereafter 134,700 Total $ 3,177,367 |
Product warranty (Tables)
Product warranty (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Guarantees [Abstract] | |
Schedule of Product Warranty Reserve | Changes in the Company’s warranty reserve were as follows: Warranty reserve, December 31, 2016 $ 148,000 Warranty provision for units sold 128,100 Costs of warranty incurred (142,600 ) Warranty reserve, December 31, 2017 133,500 Warranty provision for units sold 348,100 Costs of warranty incurred (341,000 ) Warranty reserve, December 31, 2018 $ 140,600 |
Stockholders' equity (Tables)
Stockholders' equity (Tables) - Tecogen | 12 Months Ended |
Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Stock Option Activity | Stock option activity for the year ended December 31, 2018 was as follows: Common Stock Options Number of Options Exercise Share Weighted Price Weighted Life Aggregate Value Outstanding, December 31, 2017 1,061,552 $0.79-$18.15 $ 3.60 4.95 years $ 291,449 Granted 367,500 $2.30-$4.04 3.35 Exercised (57,854 ) $1.20-$2.60 1.26 137,085 Canceled and forfeited (78,609 ) $2.30-$18.15 6.43 Outstanding, December 31, 2018 1,292,589 $0.79-$10.33 $ 3.52 5.93 years $ 671,331 Exercisable, December 31, 2018 855,089 $ 3.46 $ 620,266 Vested and expected to vest, December 31, 2018 1,226,964 $ 3.51 $ 663,672 |
Summary of Weighted Average Assumptions Used in Black-Scholes Option Pricing | The weighted average assumptions used in the Black-Scholes option pricing model for options granted in 2018 and 2017 are as follows: Stock option awards: 2018 2017 Expected life 6.25 years 6.25 years Risk-free interest rate 2.73% 1.86% Expected volatility 20.90% 23.10% |
Schedule of Restricted Stock Activity | Restricted stock activity for the year ended December 31, 2018 was as follows: Number of Restricted Stock Weighted Average Grant Date Fair Value Unvested, December 31, 2017 42,921 $ 1.31 Granted — — Vested (42,921 ) 1.31 Forfeited — — Unvested, December 31, 2018 — $ — |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets Measured on Recurring Basis | The following table presents the asset reported in the consolidated balance sheet measured at its fair value on a recurring basis as of December 31, 2018 and 2017 by level within the fair value hierarchy. December 31, 2018 Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs Total Level 1 Level 2 Level 3 Total gains (losses) Recurring fair value measurements Available-for-sale equity securities EuroSite Power Inc. $ 236,167 $ — $ 236,167 $ — $ (283,401 ) Total recurring fair value measurements $ 236,167 $ — $ 236,167 $ — $ (283,401 ) December 31, 2017 Recurring fair value measurements Available-for-sale equity securities EuroSite Power Inc. $ 354,251 $ — $ 354,251 $ — $ (165,317 ) Total recurring fair value measurements $ 354,251 $ — $ 354,251 $ — $ (165,317 ) |
Related party transactions (Tab
Related party transactions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of Business Acquisition | The following table summarizes the consideration paid for ADGE and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date, as well as the fair value at the acquisition date of the noncontrolling interest in American DG New York, LLC, a consolidated subsidiary of ADGE. Consideration Tecogen common stock - 4,662,937 shares $ 18,745,007 Assumed fully vested equity awards 114,896 $ 18,859,903 Recognized amounts of identifiable assets acquired and liabilities assumed Financial assets $ 1,542,137 Inventory 75,374 Prepaid and other current assets 358,628 Property, plant and equipment 12,186,664 Investment securities 519,568 Favorable contract asset 1,561,739 Financial liabilities (1,912,859 ) Unfavorable contract liability (8,341,922 ) Other liabilities (939 ) Total identifiable net assets 5,988,390 Noncontrolling interest in American DG New York, LLC (453,272 ) Goodwill 13,324,785 $ 18,859,903 The following represents the consideration for and the fair value of assets acquired and liabilities assumed recognized at the acquisition date: Cash $ 442,786 Accounts receivable 176,235 Unbilled revenue 232,540 Fixed assets 47,508 Intangible assets 29,607 Accounts payable (811,468 ) Deferred revenue (44,610 ) Cash payable $ 72,598 |
Segments (Tables)
Segments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Infomration by Reportable Segment | The following table presents information by reportable segment for the years ended December 31, 2018 and 2017 : Products and Services Energy Production Corporate, other and elimination (1) Total Year ended December 31, 2018 Revenue - external customers $ 29,484,158 $ 6,399,526 $ — $ 35,883,684 Intersegment revenue 1,211,148 — (1,211,148 ) — Total revenue 30,695,306 6,399,526 (1,211,148 ) 35,883,684 Gross profit 10,993,490 2,598,372 — 13,591,862 Identifiable assets 27,566,921 22,337,472 — 49,904,393 Year ended December 31, 2017 Revenue - external customers $ 29,368,726 $ 3,833,940 $ — $ 33,202,666 Intersegment revenue 750,692 — (750,692 ) — Total revenue 30,119,418 3,833,940 (750,692 ) 33,202,666 Gross profit 11,154,982 1,799,422 — 12,954,404 Identifiable assets 24,234,505 26,436,571 — 50,671,076 (1) Corporate, intersegment revenue, other and elimination includes various corporate assets. |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Reconciliation of Federal Statutory Income Tax Provision To Company's Actual Provision | A reconciliation of the federal statutory income tax provision to the Company's actual provision for the years ended December 31, 2018 and 2017 is as follows: 2018 2017 Pre-tax book income (loss) (5,768,378 ) 97,697 Expected tax at 21% and 34%, respectively (1,211,359 ) 33,217 Permanent differences: Machinery & equipment 4,658 10,888 Mark to market 24,798 — Goodwill impairment 922,024 — Intangible Amortization (180,780 ) — Stock compensation — (179,084 ) Non-deductible interest — 10,788 Other 876 26 State taxes: Current 32,748 — Deferred (120,477 ) (24,960 ) Other items: Federal research and development credits (35,550 ) (33,406 ) Change in valuation allowance (153,000 ) 277,000 Deferred tax past year true-up's (99,348 ) 191,355 ADGE deferred tax assets and liabilities at purchase — (3,702,013 ) ADGE other post-closing adjustments — (1,330,665 ) Change in statutory tax rate for deferred tax assets-Federal — 4,914,329 Change in statutory tax rate for deferred tax assets-State — (167,475 ) True up - ADG NOL IRC Sec 382 limitation 817,198 — Other 30,960 — Income tax provision $ 32,748 $ — |
Schedule of Deferred Tax Assets | The components of net deferred tax assets recognized in the accompanying consolidated balance sheets at December 31, 2018 and 2017 are as follows: 2018 2017 Net operating loss carryforwards $ 7,206,000 $ 7,429,000 R&D and ITC credit carryforwards 244,000 203,000 Accrued expenses and other 1,140,000 879,000 Accounts receivable 7,000 6,000 Inventory 73,000 73,000 Property, plant and equipment 568,000 801,000 Deferred tax assets 9,238,000 9,391,000 Valuation allowance (9,238,000 ) (9,391,000 ) Deferred tax assets, net $ — $ — |
Nature of business and operat_2
Nature of business and operations (Details) | May 18, 2017USD ($)$ / sharesshares | Dec. 31, 2018USD ($)segment$ / shares | Dec. 31, 2017USD ($)$ / shares |
Class of Stock [Line Items] | |||
Number of operating segments | segment | 2 | ||
Common stock, par value (usd per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 |
Shares issued in acquisition (shares) | shares | 4,662,937 | ||
Shares issued in acquisition, price per share (in USD per share) | $ / shares | $ 4.02 | ||
Issuance of stock to acquire American DG Energy, net | $ | $ 0 | $ 18,482,656 | |
American DG Energy | |||
Class of Stock [Line Items] | |||
Outstanding common shares acquired (percent) | 100.00% | ||
Common stock, par value (usd per share) | $ / shares | $ 0.001 | ||
Issuance of stock to acquire American DG Energy, net | $ | $ 18,745,007 | ||
Common stock | |||
Class of Stock [Line Items] | |||
Conversion exchange ratio | 0.092 | ||
Issuance of stock to acquire American DG Energy, net | $ | $ 4,663 |
Summary of significant accoun_4
Summary of significant accounting policies - Additional Information (Details) | 12 Months Ended | |||
Dec. 31, 2018USD ($)segment | Dec. 31, 2017USD ($)shares | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Joint venture, percent owned | 51.00% | |||
Allowance for doubtful accounts | $ 26,800 | $ 22,400 | ||
Impairment of long-lived assets | $ 0 | |||
Dilutive shares resulting from stock option exercises included in the calculation of EPS (shares) | shares | 171,594 | |||
Number of operating segments | segment | 2 | |||
Advertising expense | $ 273,000 | $ 278,000 | ||
Research and development | $ 1,298,000 | $ 937,000 | ||
Accumulated Deficit | Adjustments for New Accounting Pronouncement | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect of new accounting principle | $ 165,317 | |||
Accumulated Other Comprehensive Loss | Adjustments for New Accounting Pronouncement | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect of new accounting principle | $ 165,317 | |||
Forecast | Adjustments for New Accounting Pronouncement | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Right-of-use assets | $ 2,600,000 | |||
Lease liabilities | $ 2,600,000 |
Summary of significant accoun_5
Summary of significant accounting policies - Concentration of Credit Risk (Details) | 12 Months Ended | |
Dec. 31, 2018USD ($)customer | Dec. 31, 2017USD ($)customer | |
Concentration Risk [Line Items] | ||
Cash, FDIC Insured Amount | $ | $ 250,000 | |
Cash, Uninsured Amount | $ | $ 0 | $ 1,172,911 |
Customer concentration risk | Revenues | ||
Concentration Risk [Line Items] | ||
Number of customer representing more than 10% of revenues or trade accounts receivable | 0 | 1 |
Number of customers | 500 | |
Customer concentration risk | Trade accounts receivable | ||
Concentration Risk [Line Items] | ||
Number of customer representing more than 10% of revenues or trade accounts receivable | 1 | 0 |
Concentration risk, percentage | 10.00% | 10.00% |
Summary of significant accoun_6
Summary of significant accounting policies - Property, Plant and Equipment (Details) | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Property, Plant and Equipment [Line Items] | |
Utility rebates applied to cost of construction | $ 180,000 |
Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful lives | 3 years |
Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful lives | 15 years |
Summary of significant accoun_7
Summary of significant accounting policies - Revenue (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 35,883,684 | |
Payment Term on Product Sales | 30 days | |
Payment Term on Energy Production Contract Invoices | 30 days | |
Unbilled revenue recognized | $ 2,200,000 | |
Revenue billed that was recognized in previous periods | 1,600,000 | |
Deferred revenue recognized | 3,000,000 | |
Increase in deferred revenue | 4,500,000 | |
Cash payments received | 1,600,000 | |
Remaining performance obligations | $ 16,600,000 | |
Performance obligation recognized over next 24 months (percent) | 96.00% | |
Performance obligation recognized over next 12 months (percent) | 45.00% | |
Performance obligation recognized in subsequent 12 months (percent) | 51.00% | |
Product [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 12,624,867 | |
Installation Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 8,097,473 | |
Maintenance Service [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 8,761,818 | |
Energy Production | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 6,399,526 | |
Light Installation [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Payment Term on Installation Services | 30 days | |
Turnkey Installation [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Payment Term on Installation Services | 30 days | |
Energy Production | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 6,399,526 | |
Energy Production | Product [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | |
Energy Production | Installation Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | |
Energy Production | Maintenance Service [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | |
Energy Production | Energy Production | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 6,399,526 | |
Product and Service | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 29,484,158 | |
Product and Service | Product [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 12,624,867 | |
Product and Service | Installation Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 8,097,473 | |
Product and Service | Maintenance Service [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 8,761,818 | |
Product and Service | Energy Production | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | |
Certain Energy Production Related Assets | ||
Disaggregation of Revenue [Line Items] | ||
Increase in deferred revenue | $ 2,000,000 |
Income (loss) per common shar_2
Income (loss) per common share - Schedule of Loss Per Common Share, Basic and Diluted (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Net income (loss) attributable to stockholders | $ (5,708,532) | $ 47,436 |
Weighted average shares outstanding - basic (shares) | 24,815,926 | 23,171,033 |
Basic income (loss) per share (in USD per share) | $ (0.23) | $ 0 |
Weighted average shares outstanding - diluted (shares) | 24,815,926 | 23,342,627 |
Diluted income (loss) per share (in USD per share) | $ (0.23) | $ 0 |
Stock Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares | 144,077 | 441,356 |
Acquisition of American DG En_3
Acquisition of American DG Energy Inc. - Additional Information (Details) | May 18, 2017USD ($)shares | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Business Acquisition [Line Items] | ||||
Energy production revenue | $ 6,399,526 | $ 3,833,940 | ||
Gross profit | 13,591,862 | 12,954,404 | ||
Stock issuance costs netted against APIC | 377,246 | |||
Shares issued in acquisition (shares) | shares | 4,662,937 | |||
Goodwill | 8,975,065 | $ 13,365,655 | $ 40,870 | |
Goodwill expected to be tax deductible | $ 0 | |||
Discount rate used to calculate fair value of noncontrolling interest (percent) | 5.61% | |||
General and Administrative Expense | ||||
Business Acquisition [Line Items] | ||||
Acquisition related costs | 322,566 | |||
American DG Energy | ||||
Business Acquisition [Line Items] | ||||
Ownership interest (percent) | 100.00% | |||
Gross profit | $ 2,598,372 | |||
Goodwill | $ 13,324,785 | |||
Common stock | ||||
Business Acquisition [Line Items] | ||||
Conversion ratio of American DG shares to Tecogen shares | 0.092 |
Acquisition of American DG En_4
Acquisition of American DG Energy Inc. - Assets Acquired and Liabilities Assumed in Acquisition (Details) - USD ($) | May 18, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||||
Tecogen common stock - 4,662,937 shares | $ 0 | $ 18,482,656 | ||
Assumed fully vested equity awards | 0 | 114,896 | ||
Financial liabilities | (6,292,599) | (7,729,667) | ||
Noncontrolling interest in American DG New York, LLC | 255,116 | 455,611 | ||
Goodwill | $ 8,975,065 | $ 13,365,655 | $ 40,870 | |
American DG Energy | ||||
Business Acquisition [Line Items] | ||||
Tecogen common stock - 4,662,937 shares | $ 18,745,007 | |||
Assumed fully vested equity awards | 114,896 | |||
Equity consideration | 18,859,903 | |||
Financial assets | 1,542,137 | |||
Inventory | 75,374 | |||
Prepaid and other current assets | 358,628 | |||
Property, plant and equipment | 12,186,664 | |||
Investment securities | 519,568 | |||
Favorable contract asset | 1,561,739 | |||
Financial liabilities | (1,912,859) | |||
Unfavorable contract liability | (8,341,922) | |||
Other liabilities | (939) | |||
Cash payable | 5,988,390 | |||
Noncontrolling interest in American DG New York, LLC | (453,272) | |||
Goodwill | 13,324,785 | |||
Consideration transferred | $ 18,859,903 |
Acquisition of American DG En_5
Acquisition of American DG Energy Inc. - Pro Forma Information (Details) - American DG Energy | 12 Months Ended |
Dec. 31, 2017USD ($)$ / shares | |
Business Acquisition [Line Items] | |
Total revenues | $ | $ 36,232,650 |
Net income (loss) | $ | $ 113,255 |
Basic earnings (loss) per share (in USD per share) | $ / shares | $ 0.01 |
Diluted earnings (loss) per share (in USD per share) | $ / shares | $ 0.01 |
Inventory - Summary of Inventor
Inventory - Summary of Inventory (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Gross raw materials | $ 6,165,099 | $ 5,270,732 |
Less - reserves | (284,000) | (283,000) |
Net raw materials | 5,881,099 | 4,987,732 |
Work-in-process | 413,763 | 11,852 |
Finished goods | 0 | 131,221 |
Inventory, Net | $ 6,294,862 | $ 5,130,805 |
Intangible assets other than _3
Intangible assets other than goodwill - Narrative (Details) - USD ($) | May 18, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 112,359 | $ 99,310 | |
Net credit to cost of sales related to the amortization of contract related assets and liabilities | 860,858 | 526,719 | |
Fair Value, Benchmark Level of Margin Contribution, Percent | 35.00% | ||
Intangible assets, net | 2,893,990 | 2,896,458 | |
Product Certifications | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Capitalized finited lived intangible assets | 120,455 | 61,053 | |
Intangible assets, net | 380,501 | 320,363 | |
Patents | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Capitalized finited lived intangible assets | 102,245 | 181,637 | |
Intangible assets, net | $ 722,330 | 653,351 | |
Patents | Minimum | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Finited lived intangible assets, estimated useful life | 7 years | ||
Patents | Maximum | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Finited lived intangible assets, estimated useful life | 10 years | ||
Trademarks | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Capitalized finited lived intangible assets | $ 3,212 | 2,375 | |
Intangible assets, net | 22,752 | 19,540 | |
In process R&D | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, net | 263,936 | 263,001 | |
Ultratek | In process R&D | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, net | $ 935 | $ 263,001 |
Intangible assets other than _4
Intangible assets other than goodwill - Schedule of Intangible Assets (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | $ 3,754,762 | $ 3,498,307 |
Less - accumulated amortization | (860,772) | (601,849) |
Intangible Assets, Net | 2,893,990 | 2,896,458 |
Product Certifications | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | 726,159 | 605,704 |
Less - accumulated amortization | (345,658) | (285,341) |
Intangible Assets, Net | 380,501 | 320,363 |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | 910,569 | 808,323 |
Less - accumulated amortization | (188,239) | (154,972) |
Intangible Assets, Net | 722,330 | 653,351 |
Developed Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | 240,000 | 240,000 |
Less - accumulated amortization | (92,000) | (76,000) |
Intangible Assets, Net | 148,000 | 164,000 |
TTcogen Intangible Assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | 29,607 | 0 |
Less - accumulated amortization | (2,776) | 0 |
Intangible Assets, Net | 26,831 | 0 |
Favorable contract assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | 1,561,739 | 1,561,739 |
Less - accumulated amortization | (232,099) | (85,536) |
Intangible Assets, Net | 1,329,640 | 1,476,203 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | 22,752 | 19,540 |
Less - accumulated amortization | 0 | 0 |
Intangible Assets, Net | 22,752 | 19,540 |
In process R&D | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | 263,936 | |
Less - accumulated amortization | 0 | 0 |
Intangible Assets, Net | 263,936 | 263,001 |
Unfavorable Contract Liability | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible liability | 7,912,275 | 8,341,922 |
Less - accumulated amortization | (1,619,676) | (612,255) |
Intangible Liabilities, Net | $ 6,292,599 | $ 7,729,667 |
Intangible assets other than _5
Intangible assets other than goodwill - Schedule of Estimated Future Amortization Expense (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, net | $ 2,893,990 | $ 2,896,458 |
Contract Asset and Liability | ||
Finite-Lived Intangible Assets [Line Items] | ||
2019 | 458,593 | |
2020 | 437,329 | |
2021 | 468,273 | |
2022 | 449,717 | |
2023 | 380,130 | |
Thereafter | 1,227,320 | |
Intangible assets, net | 3,421,362 | |
Contract Asset and Liability | Contract related intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
2019 | 705,430 | |
2020 | 675,232 | |
2021 | 680,719 | |
2022 | 655,086 | |
2023 | 578,426 | |
Thereafter | 1,668,066 | |
Intangible assets, net | 4,962,959 | |
Contract Asset and Liability | Non-contract related intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
2019 | 246,837 | |
2020 | 237,903 | |
2021 | 212,446 | |
2022 | 205,369 | |
2023 | 198,296 | |
Thereafter | 440,746 | |
Intangible assets, net | $ 1,541,597 |
Property, plant and equipment -
Property, plant and equipment - Summary of Property and Equipment (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | ||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 14,939,567 | $ 14,443,685 | |
Less: accumulated depreciation and amortization | (3,666,452) | (2,177,974) | |
Net property, plant and equipment | $ 11,273,115 | 12,265,711 | |
Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life - years | 3 years | ||
Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life - years | 15 years | ||
Energy systems | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 12,709,990 | 12,466,642 | |
Energy systems | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life - years | 1 year | ||
Energy systems | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life - years | 15 years | ||
Machinery and Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 1,355,617 | 1,215,951 | |
Machinery and Equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life - years | 5 years | ||
Machinery and Equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life - years | 7 years | ||
Furniture and Fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 222,542 | 205,320 | |
Useful life - years | 5 years | ||
Computer software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 200,626 | 115,253 | |
Computer software | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life - years | 3 years | ||
Computer software | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life - years | 5 years | ||
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | [1] | $ 450,792 | $ 440,519 |
Certain Energy Production Related Assets | |||
Property, Plant and Equipment [Line Items] | |||
Deferred consideration | $ 2,000,000 | ||
[1] | Lesser of estimated useful life of asset or lease term |
Property, plant and equipment_2
Property, plant and equipment -Depreciation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization | $ 1,537,622 | $ 1,114,540 |
Goodwill (Details)
Goodwill (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Line Items] | ||
Goodwill, beginning | $ 13,365,655 | $ 40,870 |
Impairment loss | 13,324,785 | |
Impairment loss | (4,390,590) | 0 |
Goodwill, ending | 8,975,065 | 13,365,655 |
Product and Service | ||
Goodwill [Line Items] | ||
Goodwill, beginning | 40,870 | 40,870 |
Impairment loss | 0 | |
Goodwill, ending | 40,870 | 40,870 |
Energy Production | ||
Goodwill [Line Items] | ||
Goodwill, beginning | 13,324,785 | |
Impairment loss | (4,390,590) | |
Goodwill, ending | $ 8,934,195 | $ 13,324,785 |
Revolving line of credit, Con_2
Revolving line of credit, Convertible debentures and loan due to related party (Details) | May 04, 2018USD ($) | Dec. 14, 2017USD ($) | Dec. 23, 2013USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Apr. 01, 2016$ / shares | Mar. 31, 2016$ / shares |
Debt Instrument [Line Items] | |||||||||
Payment made to terminate senior convertible promissory note | $ 850,000 | $ 3,150,000 | |||||||
Michaelson | |||||||||
Debt Instrument [Line Items] | |||||||||
Related party ownership percentage | 5.00% | ||||||||
Convertible debentures | Michaelson | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal amount | $ 3,000,000 | ||||||||
Related party debt, stated interest rate | 4.00% | ||||||||
Debt term | 3 years | ||||||||
Conversion price in usd per share | $ / shares | $ 3.54 | $ 3.37 | |||||||
Payment made to terminate senior convertible promissory note | $ 3,150,000 | ||||||||
Percentage of principal and interest | 120.00% | ||||||||
Chief Executive Officer (John N. Hatsopoulos) | |||||||||
Debt Instrument [Line Items] | |||||||||
Payment made to terminate senior convertible promissory note | $ 919,590 | ||||||||
Loan from related party | $ 850,000 | $ 850,000 | $ 850,000 | ||||||
Demand notes | Chief Executive Officer (John N. Hatsopoulos) | |||||||||
Debt Instrument [Line Items] | |||||||||
Stated interest rate (percent) | 6.00% | 6.00% | 6.00% | ||||||
Webster Business Credit Corporation | |||||||||
Debt Instrument [Line Items] | |||||||||
Credit facility, maximum borrowing capacity | $ 10,000,000 | ||||||||
Effective interest rate (percent) | 7.00% | 7.00% | |||||||
Fixed charge coverage ratio | 1.10 | ||||||||
Annual financial capital expenditure limit | $ 500,000 | ||||||||
Debt issuance costs | $ 145,011 | ||||||||
Amortization period for debt issuance costs | 3 years | ||||||||
Line of credit outstanding | $ 2,122,221 | $ 2,122,221 | |||||||
Line of credit, debt issuance costs | $ 112,786 | $ 112,786 | |||||||
One Month LIBOR | Webster Business Credit Corporation | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 3.00% | ||||||||
Lender's Base Rate | Webster Business Credit Corporation | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 1.50% | ||||||||
Federal Funds Rate | Webster Business Credit Corporation | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 0.50% | ||||||||
Lender's Base Rate - One Month LIBOR | Webster Business Credit Corporation | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 2.75% |
Commitments and contingencies -
Commitments and contingencies - Operating Lease Obligations (Details) | 12 Months Ended | |
Dec. 31, 2018USD ($)vehicle | Dec. 31, 2017USD ($) | |
Office space and warehouse facilities | ||
Operating Leased Assets [Line Items] | ||
Rent expense, gross | $ 755,579 | $ 700,335 |
Rent expense, sublease rent offset | 34,995 | |
Rent expense, net | 665,340 | |
Vehicles | ||
Operating Leased Assets [Line Items] | ||
Rent expense, net | $ 1,912 | $ 1,571 |
Operating leased assets, number of assets | vehicle | 1 |
Commitments and contingencies_2
Commitments and contingencies - Schedule of Future Minimum Rental Payments for Operating Leases (Details) | Dec. 31, 2018USD ($) |
Future minimum lease payments under all non-cancelable operating leases | |
2019 | $ 643,930 |
2020 | 647,341 |
2021 | 589,538 |
2022 | 577,055 |
2023 | 584,803 |
Thereafter | 134,700 |
Total | $ 3,177,367 |
Commitments and contingencies_3
Commitments and contingencies - Agreement with Digital Energy Corp. (Details) | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Guarantee of obligations of EuroSite Power Inc. | $ 202,359 |
Guarantee liability | $ 7,000 |
Product warranty - Schedule of
Product warranty - Schedule of Product Warranty Reserve (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Guarantees [Abstract] | ||
Product warranty period | 1 year | |
Schedule of Product Warranty Reserve [Roll Forward] | ||
Warranty reserve, beginning balance | $ 133,500 | $ 148,000 |
Warranty provision for units sold | 348,100 | 128,100 |
Costs of warranty incurred | (341,000) | (142,600) |
Warranty reserve, ending balance | $ 140,600 | $ 133,500 |
Stockholders' equity - Common S
Stockholders' equity - Common Stock and Receivable from Shareholder (Details) - shares | May 18, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Feb. 13, 2013 |
Class of Stock [Line Items] | ||||
Shares issued in acquisition (shares) | 4,662,937 | |||
Common stock, shares outstanding | 24,824,746 | 24,766,892 | ||
Preferred stock, shares authorized | 10,000,000 | |||
American DG Energy | ||||
Class of Stock [Line Items] | ||||
Outstanding common shares acquired (percent) | 100.00% |
Stockholders' equity - Stock-Ba
Stockholders' equity - Stock-Based Compensation (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Jul. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Historical forfeiture rate (percent) | 15.00% | ||
Warrants granted | 250,000 | ||
Warrant exercise price per share (in dollars per share) | $ 4 | $ 4 | |
Options granted, exercise price range, lower limit (usd per share) | $ 2.30 | ||
Options granted, exercise price range, upper limit (usd per share) | $ 4.04 | ||
Tecogen | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options granted | 367,500 | 45,000 | |
Options granted, exercise price range, lower limit (usd per share) | $ 2.30 | $ 3.22 | |
Options granted, exercise price range, upper limit (usd per share) | $ 4.04 | $ 3.72 | |
Award vesting period | 4 years | ||
Award expiration period | 10 years | ||
Fair value of options issued | $ 365,054 | $ 41,113 | |
Weighted-average grant date fair value of options granted | $ 0.99 | $ 0.91 | |
Exercised, aggregate intrinsic value | $ 137,085 | $ 149,598 | |
Exercised (shares) | (57,854) | (156,124) | |
Recognized stock-based compensation | $ 181,188 | $ 183,768 | |
Compensation cost related to unvested restricted stock awards and stock option awards not yet recognized | $ 415,941 | $ 281,554 | |
Compensation cost not yet recognized, weighted average period of recognition | 2 years 6 days | ||
Tecogen | Restricted stock | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 25.00% | ||
Tecogen | Restricted stock | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 1 year | ||
Vesting percentage | 33.00% | ||
Tecogen | Amended Plan | Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares of common stock reserved for future issuance | 3,838,750 | ||
Number of shares remaining available for future issuance | 1,990,980 | 2,123,747 | |
Remaining Options | Tecogen | Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 4 years | ||
Award expiration period | 10 years |
Stockholders' equity - Stock Op
Stockholders' equity - Stock Option Activity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Exercise Price Per Share [Abstract] | ||
Granted, Exercise Price Lower Range Limit (usd per share) | $ 2.30 | |
Granted, Exercise Price Upper Range Limit (usd per share) | $ 4.04 | |
Tecogen | ||
Stock Options Outstanding [Roll Forward] | ||
Beginning (shares) | 1,061,552 | |
Granted (shares) | 367,500 | 45,000 |
Exercised (shares) | (57,854) | (156,124) |
Canceled and forfeited (shares) | (78,609) | |
Ending (shares) | 1,292,589 | 1,061,552 |
Exercisable (shares) | 855,089 | |
Vested and expected to vest (shares) | 1,226,964 | |
Weighted Average Exercise Price [Roll Forward] | ||
Beginning (usd per share) | $ 3.60 | |
Granted (usd per share) | 3.35 | |
Exercised (usd per share) | 1.26 | |
Canceled and forfeited (usd per share) | 6.43 | |
Ending (usd per share) | $ 3.52 | $ 3.60 |
Exercised, aggregate intrinsic value | $ 137,085 | $ 149,598 |
Exercisable (usd per share) | $ 3.46 | |
Vested and expected to vest (usd per share) | $ 3.51 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | ||
Outstanding, Aggregate Intrinsic Value | $ 671,331 | $ 291,449 |
Exercisable, Aggregate Intrinsic Value | 620,266 | |
Vested and expected to vest, Aggregate Intrinsic Value | $ 663,672 | |
Exercise Price Per Share [Abstract] | ||
Outstanding, Exercise Price Lower Range Limit (usd per share) | $ 0.79 | $ 0.79 |
Outstanding, Exercise Price Upper Range Limit (usd per share) | 10.33 | 18.15 |
Granted, Exercise Price Lower Range Limit (usd per share) | 2.30 | 3.22 |
Granted, Exercise Price Upper Range Limit (usd per share) | 4.04 | $ 3.72 |
Exercised, Exercise Price Range, Lower Range Limit (usd per share) | 1.20 | |
Exercised, Exercise Price Range, Upper Range Limit (usd per share) | 2.60 | |
Canceled and Forfeited, Exercise Price Lower Range Limit (usd per share) | 2.30 | |
Canceled and Forfeited, Exercise Price Upper Range Limit (usd per share) | $ 18.15 | |
Stock Options | Tecogen | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | ||
Outstanding, Weighted Average Remaining Life | 5 years 11 months 5 days | 4 years 11 months 12 days |
Stockholders' equity - Weighted
Stockholders' equity - Weighted Average Assumptions (Details) - Tecogen - Stock Options | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life | 6 years 3 months | 6 years 3 months |
Risk-free interest rate | 2.73% | 1.86% |
Expected volatility | 20.90% | 23.10% |
Stockholders' equity - Restrict
Stockholders' equity - Restricted Stock Activity (Details) - Tecogen - Restricted stock | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Unvested Restricted Stock [Roll Forward] | |
Unvested, Beginning (shares) | shares | 42,921 |
Granted (shares) | shares | 0 |
Vested (shares) | shares | (42,921) |
Forfeited (shares) | shares | 0 |
Unvested, Ending (shares) | shares | 0 |
Weighted Average Grant Date Fair Value [Roll Forward] | |
Unvested, Beginning (usd per share) | $ / shares | $ 1.31 |
Granted (usd per share) | $ / shares | 0 |
Vested (usd per share) | $ / shares | 1.31 |
Forfeited (usd per share) | $ / shares | 0 |
Unvested, Ending (usd per share) | $ / shares | $ 0 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair Value, Measurements, Recurring - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total gains (losses) | $ (283,401) | $ (165,317) |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total recurring fair value measurements | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total recurring fair value measurements | 236,167 | 354,251 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total recurring fair value measurements | 0 | 0 |
Estimate of Fair Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total recurring fair value measurements | 236,167 | 354,251 |
Eurosite Power Inc. | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total gains (losses) | (283,401) | (165,317) |
Eurosite Power Inc. | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale equity securities | 0 | 0 |
Eurosite Power Inc. | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale equity securities | 236,167 | 354,251 |
Eurosite Power Inc. | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale equity securities | 0 | 0 |
Eurosite Power Inc. | Estimate of Fair Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale equity securities | $ 236,167 | $ 354,251 |
Retirement plans (Details)
Retirement plans (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Retirement Benefits [Abstract] | ||
Maximum employer annual contribution per employee, percent | 4.50% | |
Contributions to plan | $ 238,680 | $ 231,945 |
Related party transactions (Det
Related party transactions (Details) - USD ($) | May 04, 2018 | Mar. 27, 2018 | Aug. 02, 2016 | Jan. 31, 2017 | Jul. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | May 19, 2016 | Dec. 28, 2015 |
Related Party Transaction [Line Items] | ||||||||||
Payment made to terminate senior convertible promissory note | $ 850,000 | $ 3,150,000 | ||||||||
Equity interest in joint venture (percent) | 43.00% | |||||||||
Warrant exercise price per share (in dollars per share) | $ 4 | $ 4 | ||||||||
Proceeds from exercise of warrants | $ 2,700,000 | |||||||||
Investments in joint venture | $ 13,500,000 | |||||||||
Return of investment in Ultra Emissions Technologies Ltd | 0 | $ 2,000,000 | ||||||||
Purchase of remaining assets of Ultratek | 828,086 | $ 580,044 | ||||||||
Affiliated companies | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Payments to acquire used equipment | $ 985,000 | |||||||||
Affiliated companies | TTcogen, LLC | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Revenue from related parties | 347,275 | |||||||||
Due from related party | 585,492 | |||||||||
Affiliated companies | Ultratek | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Return of investment in Ultra Emissions Technologies Ltd | 2,000,000 | |||||||||
Purchase of remaining assets of Ultratek | 400,000 | |||||||||
Co-venturer | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Investments in joint venture | 8,500,000 | |||||||||
Ultra Emissions Technology Ltd. | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Equity interest in joint venture (percent) | 50.00% | |||||||||
TTcogen, LLC | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Equity interest in joint venture (percent) | 50.00% | |||||||||
Offshore Investors | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Investment by other party to joint venture | $ 3,000,000 | |||||||||
Tedom a.s. | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Equity interest in joint venture (percent) | 50.00% | |||||||||
Tedom USA | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Equity interest in joint venture (percent) | 50.00% | |||||||||
Initial payment to acquire productive assets | $ 1 | |||||||||
Payments to acquire equity method investments | 72,597 | |||||||||
Payments to acquire productive assets | $ 72,598 | |||||||||
Warrant | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Warrants exercised (shares) | 675,000 | |||||||||
Warrant | Ultra Emissions Technology Ltd. | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Warrants exercised (shares) | 2,000,000 | |||||||||
Warrant exercise price per share (in dollars per share) | $ 1 | |||||||||
Chief Executive Officer (John N. Hatsopoulos) | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Loan from related party | $ 850,000 | $ 850,000 | ||||||||
Payment made to terminate senior convertible promissory note | $ 919,590 | |||||||||
Chief Executive Officer (John N. Hatsopoulos) | Demand notes | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Stated interest rate (percent) | 6.00% | 6.00% |
Related party transactions - As
Related party transactions - Assets Acquired and Liabilities Assumed (Details) - Tedom USA's Membership Interest in TTcogen | Mar. 27, 2018USD ($) |
Related Party Transaction [Line Items] | |
Cash | $ 442,786 |
Accounts receivable | 176,235 |
Unbilled revenue | 232,540 |
Fixed assets | 47,508 |
Intangible assets | 29,607 |
Accounts payable | (811,468) |
Deferred revenue | (44,610) |
Cash payable | $ 72,598 |
Segments (Details)
Segments (Details) | 12 Months Ended | |
Dec. 31, 2018USD ($)segment | Dec. 31, 2017USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of operating segments | segment | 2 | |
Revenue | $ 35,883,684 | $ 33,202,666 |
Gross profit | 13,591,862 | 12,954,404 |
Identifiable assets | 49,904,393 | 50,671,076 |
Products and Services | ||
Segment Reporting Information [Line Items] | ||
Revenue | 30,695,306 | 30,119,418 |
Gross profit | 10,993,490 | 11,154,982 |
Identifiable assets | 27,566,921 | 24,234,505 |
Energy Production | ||
Segment Reporting Information [Line Items] | ||
Revenue | 6,399,526 | 3,833,940 |
Gross profit | 2,598,372 | 1,799,422 |
Identifiable assets | 22,337,472 | 26,436,571 |
Corporate, other and elimination | ||
Segment Reporting Information [Line Items] | ||
Revenue | (1,211,148) | (750,692) |
Gross profit | 0 | 0 |
Identifiable assets | 0 | 0 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Revenue | 35,883,684 | 33,202,666 |
Operating Segments | Products and Services | ||
Segment Reporting Information [Line Items] | ||
Revenue | 29,484,158 | 29,368,726 |
Operating Segments | Energy Production | ||
Segment Reporting Information [Line Items] | ||
Revenue | 6,399,526 | 3,833,940 |
Operating Segments | Corporate, other and elimination | ||
Segment Reporting Information [Line Items] | ||
Revenue | 0 | 0 |
Intersegment Eliminations | ||
Segment Reporting Information [Line Items] | ||
Revenue | 0 | 0 |
Intersegment Eliminations | Products and Services | ||
Segment Reporting Information [Line Items] | ||
Revenue | 1,211,148 | 750,692 |
Intersegment Eliminations | Energy Production | ||
Segment Reporting Information [Line Items] | ||
Revenue | 0 | 0 |
Intersegment Eliminations | Corporate, other and elimination | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ (1,211,148) | $ (750,692) |
Income taxes - Reconciliation o
Income taxes - Reconciliation of Federal Statutory Income Tax Provision to Company's Actual Provision (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Line Items] | ||
Federal statutory income tax rate (percent) | 21.00% | |
Pre-tax book income | $ (5,768,378) | $ 97,696 |
Income tax provision | 32,748 | 0 |
Income Tax Provision | ||
Income Tax Disclosure [Line Items] | ||
Pre-tax book income | 97,697 | |
Expected tax at 34% | (1,211,359) | 33,217 |
Machinery & equipment | 4,658 | 10,888 |
Mark to market | 24,798 | 0 |
Goodwill impairment | 922,024 | 0 |
Intangible Amortization | (180,780) | 0 |
Stock compensation | 0 | (179,084) |
Non-deductible interest | 0 | 10,788 |
Other | 876 | 26 |
Current | 32,748 | 0 |
Deferred | (120,477) | (24,960) |
Federal research and development credits | (35,550) | (33,406) |
Change in valuation allowance | (153,000) | 277,000 |
Deferred tax past year true-up's | (99,348) | 191,355 |
ADGE deferred tax assets and liabilities at purchase | 0 | (3,702,013) |
ADGE other post-closing adjustments | 0 | (1,330,665) |
Change in statutory tax rate for deferred tax assets-Federal | 0 | 4,914,329 |
Change in statutory tax rate for deferred tax assets-State | 0 | (167,475) |
True up - ADG NOL IRC Sec 382 limitation | 817,198 | 0 |
Other | 30,960 | 0 |
Income tax provision | $ 32,748 | $ 0 |
Income taxes - Schedule of Defe
Income taxes - Schedule of Deferred Tax Assets (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 7,206,000 | $ 7,429,000 |
R&D and ITC credit carryforwards | 244,000 | 203,000 |
Accrued expenses and other | 1,140,000 | 879,000 |
Accounts receivable | 7,000 | 6,000 |
Inventory | 73,000 | 73,000 |
Property, plant and equipment | 568,000 | 801,000 |
Deferred tax assets | 9,238,000 | 9,391,000 |
Valuation allowance | (9,238,000) | (9,391,000) |
Deferred tax assets, net | $ 0 | $ 0 |
Income taxes - Narrative (Detai
Income taxes - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Internal Revenue Service (IRS) | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | $ 29,793,000 | |
Income Tax Provision | ||
Operating Loss Carryforwards [Line Items] | ||
Change in valuation allowance | (153,000) | $ 277,000 |
American DG Energy | ||
Operating Loss Carryforwards [Line Items] | ||
Ownership interest (percent) | 100.00% | |
Annual limitation of acquired NOL | $ 391,394 | |
Period of limitation on acquired NOL | 20 years |
Subsequent events Subsequent Ev
Subsequent events Subsequent Events (Details) - Subsequent Event $ in Millions | Mar. 05, 2019USD ($)agreement | Feb. 01, 2019director |
Subsequent Event [Line Items] | ||
Number of Directors | director | 7 | |
Number of agreements related to the sale | agreement | 2 | |
February 2019 Sale | ||
Subsequent Event [Line Items] | ||
Consideration received from transfer of ownership | $ 5 | |
December 2018 Sale | ||
Subsequent Event [Line Items] | ||
Consideration received from transfer of ownership | $ 2 |