EuroSite Power (EUSP) 10-Q 15 May 15 2015 Q1 Quarterly report Financial data

DOCUMENT_AND_ENTITY_INFORMATIO

DOCUMENT AND ENTITY INFORMATION	3 Months Ended
	Mar. 31, 2015	14-May-15
Document and Entity Information [Abstract]
Entity Registrant Name	EUROSITE POWER INC.
Entity Central Index Key	1528103
Current Fiscal Year End Date	-19
Entity Filer Category	Smaller Reporting Company
Trading Symbol	eusp
Document Type	10-Q
Amendment Flag	FALSE
Document Period End Date	31-Mar-15
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2015
Entity Common Stock, Shares Outstanding		65,747,100

CONDENSED_CONSOLIDATED_BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Mar. 31, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$2,020,883	$3,776,852
Accounts receivable	187,686	152,664
UK energy tax incentives receivable	608,051	648,917
Value added tax receivable	32,521	72,202
Inventory of finished goods	104,056	99,925
Other current assets	35,487	33,655
Total current assets	2,988,684	4,784,215
Property, plant and equipment, net	6,805,089	6,348,905
Other assets, long-term	15,324	16,764
TOTAL ASSETS	9,809,097	11,149,884
Current liabilities:
Accounts payable	438,757	338,067
Accrued expenses and other current liabilities	112,381	130,252
Note payable related party	2,000,000	0
Total current liabilities	2,551,138	468,319
Long-term liabilities:
Convertible debentures	1,630,399	1,645,444
Convertible debentures due to related parties	978,239	987,266
Note payable related party	0	3,000,000
Total liabilities	5,159,776	6,101,029
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value; 100,000,000 shares authorized; 65,747,100 issued and outstanding at March 31, 2015 and December 31, 2014	65,747	65,747
Additional paid-in capital	12,177,868	12,147,005
Accumulated deficit	-7,594,294	-7,163,897
Total stockholders' equity	4,649,321	5,048,855
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$9,809,097	$11,149,884

CONDENSED_CONSOLIDATED_BALANCE1

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$0.00	$0.00
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	65,747,100	65,747,100
Common stock, shares outstanding	65,747,100	65,747,100

CONDENSED_CONSOLIDATED_STATEME

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Revenues
Energy revenues	$530,648	$430,778
Turnkey & other revenues	17,406	1,406
Revenue, Net	548,054	432,184
Cost of sales
Fuel, maintenance and installation	414,972	328,741
Depreciation expense	90,392	70,696
Cost of Services	505,364	399,437
Gross profit	42,690	32,747
Operating expenses
General and administrative	303,340	193,174
Selling	129,449	116,114
Engineering	30,718	23,986
Operating Expenses	463,507	333,274
Loss from operations	-420,817	-300,527
Other income (expense)
Interest and other income	2,697	1,213
Interest expense, net of debt premium amortization	-12,277	-21,778
Loss on extinguishment of convertible debt	0	-713,577
Nonoperating Income (Expense)	-9,580	-734,142
Loss before income taxes	-430,397	-1,034,669
Provision for income taxes	0	0
Net loss	($430,397)	($1,034,669)
Net loss per share - basic and diluted (in dollars per share)	($0.01)	($0.02)
Weighted-average shares outstanding - basic and diluted (in shares)	65,747,100	56,747,100

CONDENSED_CONSOLIDATED_STATEME1

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	($430,397)	($1,034,669)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	90,987	72,419
Loss on extinguishment of debt	0	713,577
Amortization of deferred financing costs	0	2,509
Amortization of convertible debt premium	-24,072	-18,222
Stock-based compensation	30,863	47,896
Changes in operating assets and liabilities
Accounts receivable	35,022	-36,670
Value added tax receivable	80,547	-23,615
Income tax receivable	0	0
Inventory of finished goods	-4,131	371,545
Prepaid and other current assets	-1,832	-27,505
Other assets, long- term	1,440	0
Increase (decrease) in:
Accounts payable	87,727	93,757
Due to related party	12,963	15,633
Accrued expenses and other current liabilities	-17,871	28,709
Net cash (used in) provided by operating activities	-208,798	278,704
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment	-547,171	-595,270
Net cash used in investing activities	-547,171	-595,270
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment on note payable to related party	-1,000,000	0
Net cash used in financing activities	-1,000,000	0
Net decrease in cash and cash equivalents	-1,755,969	-316,566
Cash and cash equivalents, beginning of the period	3,776,852	1,519,602
Cash and cash equivalents, end of the period	2,020,883	1,203,036
Supplemental disclosures of cash flow information:
Income tax paid	6,750	4,250
Interest paid	$0	$0

Description_of_Business_and_Ba

Description of Business and Basis of Presentation	3 Months Ended
	Mar. 31, 2015
Accounting Policies [Abstract]
Description of Business and Basis of Presentation	Description of Business and Basis of Presentation
	Description of Business
	EuroSite Power Inc., pr the Company, we, our or us, distributes, owns and operates clean, on-site energy systems that produce electricity, hot water, heat and cooling in the United Kingdom. The Company’s business model is to own the equipment it installs at customers’ facilities and to sell the energy produced by these systems to the customers on a long-term contractual basis at prices guaranteed to the customer to be below conventional utility rates. The Company calls this business the EuroSite Power “On-Site Utility”.
	The Company was incorporated as a Delaware corporation on July 9, 2010 as a subsidiary of American DG Energy Inc., or American DG Energy, to introduce American DG Energy’s business model into the United Kingdom and Europe, although as of March 31, 2015, we operated in the United Kingdom only.
	The Company has experienced total net losses since inception of approximately $7.6 million. For the foreseeable future, the Company expects to experience continuing operating losses and negative cash flows from operations as its management executes its current business plan. The Company believes that its existing resources, including cash and cash equivalents, future cash flow from operations, its ability to control certain costs, including those related to general and administrative expenses, and the use of capital from its parent company, will be sufficient to meet the working capital requirements of its existing business for the foreseeable future; however, as the Company continues to grow its business by adding more energy systems, the cash requirements will increase. The Company may need to raise additional capital through a debt financing or use capital provided by its parent to meet its operating and capital needs. There can be no assurance, however, that the Company will be successful in these fund-raising efforts or that additional funds will be available on acceptable terms, if at all.
	Basis of Presentation
	The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2015 are not necessarily indicative of the results that may be expected for the year ended December 31, 2015.
	The condensed consolidated balance sheet at December 31, 2014 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.
	For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2014, or the Annual Report.
	There have been no significant changes in accounting principles, practices or inherent estimates.
	The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary EuroSite Power Limited, a United Kingdom registered company.
	The Company’s operations are comprised of one business segment. The Company’s business is to sell energy in the form of electricity, heat, hot water and cooling to its customers under long-term sales agreements.

Loss_Per_Common_Share

Loss Per Common Share	3 Months Ended
	Mar. 31, 2015
Earnings Per Share [Abstract]
Loss Per Common Share	Loss Per Common Share
	The Company computes basic loss per share by dividing net 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 stock options, warrants and debentures to be dilutive Common Stock equivalents when the exercise price is less than the average fair market value of the Company’s Common Stock for the period. For the three months ended March 31, 2015, the Company excluded 11,305,000 potentially dilutive shares resulting from stock options, warrants and convertible debentures, and for the three months ended March 31, 2014, the Company excluded 13,288,333 potentially dilutive shares resulting from stock options, warrants and convertible debentures. All shares issuable for both periods were anti-dilutive as a result of the reported net loss.

Income_Taxes_Notes

Income Taxes (Notes)	3 Months Ended
	Mar. 31, 2015
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes
	The provision (benefit) for income taxes in the accompanying consolidated statements of operations for the three months ended March 31, 2015 and March 31, 2014 differ from that which would be expected by applying the federal statutory tax rate primarily due to losses for which no benefit is recognized.

Related_parties

Related parties	3 Months Ended
	Mar. 31, 2015
Related Party Transactions [Abstract]
Related Parties	Related Parties
	American DG Energy, Tecogen and Ilios, are affiliated companies by virtue of common ownership
	The Company purchases the majority of its energy equipment from American DG Energy, its parent. American DG Energy purchases energy equipment primarily from Tecogen, an affiliate of the Company, which manufactures natural gas, engine-driven commercial and industrial cooling and cogeneration systems, and from Ilios Inc., or Ilios, a majority-owned subsidiary of Tecogen which is developing a line of ultra-high-efficiency heating products, such as a high efficiency water heater, for commercial and industrial applications utilizing advanced thermodynamic principles.
	John N. Hatsopoulos is the Company’s Chairman of the Board and is also the Co-Chief Executive Officer of American DG Energy and Tecogen. His salary is $1.00 per year. On average, Mr. Hatsopoulos spends approximately 20% of his business time on the affairs of the Company, but such amount varies widely depending on the needs of the business and is expected to increase as the business of the Company develops.
	Gabriel J. Parmese, the Company’s Chief Financial Officer, devotes part of his business time to the affairs of American DG Energy. His salary is paid by American DG Energy but a portion is reimbursed by the Company according to the requirements of the business. On average, Mr. Parmese spends approximately 15% of his business time on the affairs of the Company, but such amount varies widely depending on the needs of the business.
	During the first quarter of 2015, the Company repaid $1,000,000 of a related party note according to the terms of the agreement.
	The Company’s headquarters are located in Waltham, Massachusetts and consist of 3,282 square feet of office and storage space that are leased from Tecogen and shared with American DG Energy. American DG Energy is not currently charging the Company for utilizing its share of office space in the United States since it believes it is insignificant. The Company currently does not occupy any office space in the United Kingdom or Europe but intends to do so in the future. The Company believes that its facilities are appropriate and adequate for its current needs.

Commitments_and_contingencies

Commitments and contingencies	3 Months Ended
	Mar. 31, 2015
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies
	The Company has certain commitments through its agreements with Tecogen, Ilios, and other related parties. See Note 4 "Related Parties" for more detail.
	The Company, in the ordinary course of business is involved in various legal matters, the outcomes of which are not expected to have a material impact on the financial statements.

Subsequent_events

Subsequent events	3 Months Ended
	Mar. 31, 2015
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events
	The Company has evaluated subsequent events through the date of this filing and determined that no other subsequent events occurred that would require recognition in the consolidated financial statements or disclosure in the notes thereto.

Description_of_Business_and_Ba1

Description of Business and Basis of Presentation (Policies)	3 Months Ended
	Mar. 31, 2015
Accounting Policies [Abstract]
Description of Business	EuroSite Power Inc., pr the Company, we, our or us, distributes, owns and operates clean, on-site energy systems that produce electricity, hot water, heat and cooling in the United Kingdom. The Company’s business model is to own the equipment it installs at customers’ facilities and to sell the energy produced by these systems to the customers on a long-term contractual basis at prices guaranteed to the customer to be below conventional utility rates. The Company calls this business the EuroSite Power “On-Site Utility”.
	The Company was incorporated as a Delaware corporation on July 9, 2010 as a subsidiary of American DG Energy Inc., or American DG Energy, to introduce American DG Energy’s business model into the United Kingdom and Europe, although as of March 31, 2015, we operated in the United Kingdom only.
	The Company has experienced total net losses since inception of approximately $7.6 million. For the foreseeable future, the Company expects to experience continuing operating losses and negative cash flows from operations as its management executes its current business plan. The Company believes that its existing resources, including cash and cash equivalents, future cash flow from operations, its ability to control certain costs, including those related to general and administrative expenses, and the use of capital from its parent company, will be sufficient to meet the working capital requirements of its existing business for the foreseeable future; however, as the Company continues to grow its business by adding more energy systems, the cash requirements will increase. The Company may need to raise additional capital through a debt financing or use capital provided by its parent to meet its operating and capital needs. There can be no assurance, however, that the Company will be successful in these fund-raising efforts or that additional funds will be available on acceptable terms, if at all.
Basis of Presentation	The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2015 are not necessarily indicative of the results that may be expected for the year ended December 31, 2015.
	The condensed consolidated balance sheet at December 31, 2014 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.
	For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2014, or the Annual Report.
	There have been no significant changes in accounting principles, practices or inherent estimates.
	The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary EuroSite Power Limited, a United Kingdom registered company.
	The Company’s operations are comprised of one business segment. The Company’s business is to sell energy in the form of electricity, heat, hot water and cooling to its customers under long-term sales agreements.

Description_of_Business_and_Ba2

Description of Business and Basis of Presentation (Details) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Accounting Policies [Abstract]
Retained Earnings (Accumulated Deficit)	$7,594,294	$7,163,897

Loss_Per_Common_Share_Details

Loss Per Common Share (Details)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Earnings Per Share [Abstract]
Antidilutive securities excluded from computation of earnings per share	11,305,000	13,288,333

Related_parties_Details

Related parties (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
	sqft
Related Party Transaction [Line Items]
Repayments of related party note	$1,000,000	$0
Area of real estate property	3,282
Affiliated Entity
Related Party Transaction [Line Items]
Repayments of related party note	1,000,000
Board of Directors Chairman
Related Party Transaction [Line Items]
Officers' compensation	$1
Percentage of time spent by related parties	20.00%
Chief Financial Officer
Related Party Transaction [Line Items]
Percentage of time spent by related parties	15.00%