Document and Entity Information
Document and Entity Information Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 29, 2016 | Jun. 30, 2015 | |
Entity Information [Line Items] | |||
Entity Registrant Name | Tecogen Inc. | ||
Entity Central Index Key | 1,537,435 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Smaller Reporting Company | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 18,478,990 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 24,972,026 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 5,486,526 | $ 1,186,033 |
Short-term investments, restricted | 294,802 | 585,702 |
Accounts receivable, net | 5,286,863 | 4,750,437 |
Unbilled revenue | 1,072,391 | 696,912 |
Inventory, net | 5,683,043 | 4,090,221 |
Due from related party | 1,177,261 | 600,251 |
Deferred financing costs | 48,989 | 50,201 |
Prepaid and other current assets | 353,105 | 348,868 |
Total current assets | 19,402,980 | 12,308,625 |
Property, plant and equipment, net | 543,754 | 658,421 |
Deferred Finance Costs, Noncurrent, Net | 0 | 48,990 |
Intangible assets, net | 1,044,611 | 1,011,300 |
Goodwill | 40,870 | 40,870 |
Other assets | 58,425 | 53,325 |
TOTAL ASSETS | 21,090,640 | 14,121,531 |
Current liabilities: | ||
Accounts payable | 3,311,809 | 2,416,313 |
Accrued expenses | 1,066,860 | 1,008,153 |
Deferred revenue | 996,941 | 1,666,576 |
Total current liabilities | 5,375,610 | 5,091,042 |
Long-term liabilities: | ||
Deferred revenue, net of current portion | 273,162 | 207,153 |
Convertible Debentures, Related Parties, Noncurrent | 3,000,000 | 3,000,000 |
Total liabilities | $ 8,648,772 | $ 8,298,195 |
Commitments and contingencies (Note 8) | ||
Tecogen Inc. shareholders’ equity: | ||
Common stock, $0.001 par value; 100,000,000 shares authorized; 18,478,990 and 15,905,881 issued and outstanding at December 31, 2015 and 2014, respectively | $ 18,479 | $ 15,906 |
Additional paid-in capital | 34,501,640 | 25,088,213 |
Accumulated deficit | (21,682,437) | (18,955,023) |
Total Tecogen Inc. stockholders’ equity | 12,837,682 | 6,149,096 |
Noncontrolling interest | (395,814) | (325,760) |
Total stockholders’ equity | 12,441,868 | 5,823,336 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 21,090,640 | $ 14,121,531 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
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 | 18,478,990 | 15,905,881 |
Common Stock, Shares, Outstanding | 18,478,990 | 15,905,881 |
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, 2015 | Dec. 31, 2014 | |
Revenues | ||
Products | $ 10,055,237 | $ 8,625,034 |
Services | 11,387,420 | 10,717,630 |
Total revenues | 21,442,657 | 19,342,664 |
Cost of sales | ||
Products | 7,137,149 | 6,347,583 |
Services | 6,672,282 | 6,596,017 |
Total cost of sales | 13,809,431 | 12,943,600 |
Gross profit | 7,633,226 | 6,399,064 |
Operating expenses | ||
General and administrative | 7,997,512 | 7,264,630 |
Selling | 1,687,479 | 1,796,268 |
Research and development | 591,585 | 1,041,483 |
Total operating expenses | 10,276,576 | 10,102,381 |
Loss from operations | (2,643,350) | (3,703,317) |
Other income (expense) | ||
Interest and other income | 14,334 | 9,710 |
Interest expense | (171,944) | (177,345) |
Total other income (expense) | (157,610) | (167,635) |
Loss before income taxes | (3,870,952) | |
Consolidated net loss | (2,800,960) | (3,870,952) |
Less: Loss attributable to the noncontrolling interest | 73,547 | 125,140 |
Net loss attributable to Tecogen Inc. | $ (2,727,413) | $ (3,745,812) |
Net loss per share - basic and diluted (usd per share) | $ (0.16) | $ (0.24) |
Weighted average shares outstanding - basic and diluted (shares) | 16,860,453 | 15,607,897 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Total | Common Stock 0.001 Par Value | Additional Paid-in Capital | Accumulated Deficit | Noncontrolling Interest |
Balance, beginning balance at Dec. 31, 2013 | $ 7,065,893 | $ 15,155 | $ 22,463,996 | $ (15,209,212) | $ (204,046) |
Beginning balance, shares at Dec. 31, 2013 | 15,155,200 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Sale of common stock | 2,340,194 | $ 649 | 2,339,545 | 0 | |
Sale of common stock, shares | 649,106 | ||||
Exercise of stock options | 161,265 | $ 102 | 161,163 | ||
Exercise of stock options, shares | 101,575 | ||||
Stock based compensation expense | 126,936 | 123,510 | 3,426 | ||
Net loss | (3,870,952) | (3,745,812) | (125,140) | ||
Balance, ending balance at Dec. 31, 2014 | 5,823,336 | $ 15,906 | 25,088,214 | (18,955,024) | (325,760) |
Ending balance, shares at Dec. 31, 2014 | 15,905,881 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Sale of common stock and warrants | 8,859,767 | $ 2,351 | 8,857,416 | ||
Sale of common stock, shares | 2,350,734 | ||||
Exercise of stock options | 360,225 | $ 222 | 360,003 | ||
Exercise of stock options, shares | 222,375 | ||||
Stock based compensation expense | 199,500 | 196,007 | 3,493 | ||
Net loss | (2,800,960) | (2,727,413) | (73,547) | ||
Balance, ending balance at Dec. 31, 2015 | $ 12,441,868 | $ 18,479 | $ 34,501,640 | $ (21,682,437) | $ (395,814) |
Ending balance, shares at Dec. 31, 2015 | 18,478,990 |
Consolidated Statements of Sto6
Consolidated Statements of Stockholders' Equity Parenthetical - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Stockholders' Equity [Abstract] | ||
Common stock, par value (usd per share) | $ 0.001 | $ 0.001 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (2,800,960) | $ (3,870,952) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 271,727 | 278,865 |
Loss (gain) on disposal of asset | (4,631) | 1,209 |
Provision for losses on accounts receivable | 0 | 53,800 |
Provision (recovery) for inventory reserve | (7,000) | 0 |
Stock-based compensation | 199,500 | 126,936 |
Non-cash interest expense | 50,202 | 50,910 |
(Increase) decrease in: | ||
Short-term investments, restricted | 290,900 | (1,303) |
Accounts receivable | (536,426) | (1,063,352) |
Inventory | (1,585,822) | (746,428) |
Unbilled revenue | (375,479) | (50,514) |
Due from related party | (577,010) | (600,251) |
Prepaid assets and other current assets | (4,237) | (8,855) |
Other assets | (5,100) | 19,100 |
Changes in operating liabilities increase (decrease) in: | ||
Accounts payable | 895,496 | 78,267 |
Accrued expenses | 58,707 | (131,401) |
Deferred revenue | (603,626) | 1,055,270 |
Interest payable, related party | 0 | (198,450) |
Due to related party | 0 | (119,667) |
Net cash used in operating activities | (4,733,759) | (5,126,816) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (69,582) | (223,574) |
Disposal of property and equipment | 16,874 | 7,092 |
Purchases of intangible assets | (133,032) | (141,959) |
Payments to Acquire Short-term Investments | 0 | 584,400 |
Net cash used in investing activities | (185,740) | (942,841) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments made on demand notes payable, related party | 0 | 2,950,000 |
Proceeds from sale of common stock, net of costs | 8,859,767 | 2,340,194 |
Proceeds from exercise of stock options | 360,225 | 161,265 |
Payments from debt issuance costs | 0 | (9,668) |
Net cash provided by financing activities | 9,219,992 | (458,209) |
Net increase (decrease) in cash and cash equivalents | 4,300,493 | (6,527,866) |
Cash and cash equivalents, beginning of the year | 1,186,033 | 7,713,899 |
Cash and cash equivalents, end of the year | 5,486,526 | 1,186,033 |
Supplemental disclosures of cash flows information: | ||
Cash paid for interest | $ 121,742 | $ 324,885 |
Nature of business and operatio
Nature of business and operations | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of business and operations | Nature of business and operations Tecogen Inc. (the “Company”), a Delaware Corporation, was organized 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 May 4, 2009, the Company invested in a new corporation called Ilios Inc., or Ilios. The investment gave the Company a controlling financial interest in Ilios, whose business focus is advanced heating systems for commercial and industrial applications. As of December 31, 2015 the Company owns a 65.0% interest in Ilios and has consolidated Ilios into its financial statements. With the inclusion of unvested restricted stock awards, the Company owns 64.3% of Ilios. The accompanying consolidated financial statements include the accounts of the Company and its majority owned subsidiary, Ilios. The Company’s operations are comprised of one business segment. Our business is to manufacture and support highly efficient CHP products based on engines fueled by natural gas. |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Dec. 31, 2015 | |
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. Noncontrolling interests in the net assets and operations of Ilios are reflected in the caption “Noncontrolling interest” in the accompanying consolidated financial statements. All intercompany transactions have been eliminated. 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, short-term investments 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, 2015 and 2014 which exceeded the $250,000 federally insured limit was approximately $5,329,528 and $1,272,500 , 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 and cash equivalents. There was no customer who represented more than 10% of revenues for the years ended December 31, 2015 and 2014 . The Company has approximately four hundred customers who represented 100% of the revenues for the year ended December 31, 2015 . Included in trade accounts receivable are amounts from one customer who represents 16% of the accounts receivable balance as of December 31, 2015 and another customer who represented 13% of the accounts receivable balance as of December 31, 2014 . Cash and Cash Equivalents The Company considers all highly liquid instruments with an original maturity date, at date of purchase, of three months or less to be cash and cash equivalents. Short-Term Investments Short-term investments consist of certificate of deposit with maturities of greater than three months but less than one year. Certificates of deposits approximate fair value, based on estimates using current market rates offered for deposits with similar remaining maturities. These certificates of deposits was currently restricted as collateral for performance bonds associated with ongoing turnkey projects. On January 28, 2016, the collateral restriction was lifted and the remaining certificates was liquidated into cash. 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, 2015 and 2014 , the allowance for doubtful accounts was $50,000 . 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 market. 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 lives 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. 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. Goodwill The Company's goodwill was recorded as a result of the Company's asset acquisition. The Company tests its recorded goodwill for impairment as of the last day of the year, or more often if indicators of potential impairment exist, by determining if the carrying value of the Company's single reporting unit exceeds its estimated fair value. Factors that could trigger an interim impairment test include, but are not limited to, underperformance relative to historical or projected future operating results, significant changes in the manner of use of the acquired assets or the Company's overall business, significant negative industry or economic trends and a sustained period where market capitalization, plus an appropriate control premium, is less than stockholders' equity. The Company's impairment testing involves a step zero process. Step zero allows for management to first assess qualitative factors to determine whether it is more likely than not that the fair value of the intangible asset is less than its carrying value. Therefore, as of December 31, 2015 , the Company determined that the fair value of the reporting unit exceeded its carrying value and therefore no impairment was recognized. 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, 2015 . Off Balance Sheet Arrangements On July 22, 2013, John Hatsopoulos, one of the Company’s Co-Chief Executive Officers, personally pledged to support a bank credit facility of $1,055,000 to support bank guarantees issued on certain construction contracts. On April 10, 2015, the performance obligation tied to this bond was relieved and the credit facility was canceled. 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 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. All shares issuable for the years ended December 31, 2015 and 2014 were anti-dilutive because of the reported net loss. Segment Information The Company reports segment data based on the management approach. The management approach designates the internal reporting that is used by management for making operating and investment decisions and evaluating performance as the source of the Company's reportable segments. The Company uses one measurement of profitability and does not disaggregate its business for internal reporting. The Company has determined that it operates in one business segment which manufactures and supports highly efficient CHP products based on engines fueled by natural gas. All of the Company’s long lived assets reside in, and the significant majority of the Company’s revenue is generated in the United States of America. The following table summarizes net revenue by product line and services for the years ended December 31, 2015 and 2014 : 2015 2014 Products: Cogeneration $ 7,882,838 $ 5,364,810 Chiller & Heat Pump 2,172,399 3,260,224 Total Product Revenue 10,055,237 8,625,034 Services: Service contracts and related part sales 7,832,181 7,438,125 Installations 3,555,239 3,279,505 Total Service Revenue 11,387,420 10,717,630 Total Revenue $ 21,442,657 $ 19,342,664 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 2012, 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 2002 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, certificates of deposit, accounts receivable, accounts payable, demand notes, line of credit and convertible debentures due to related parties. The recorded values of cash and cash equivalents, accounts receivable and accounts payable approximate their fair values based on their short-term nature. At December 31, 2015 , the recorded value on the consolidated balance sheet of the debentures approximates fair value as the terms approximate those available for similar instruments. Certificates of deposits are classified as short-term investments and approximate fair value, based on estimates using current market rates offered for deposits with similar remaining maturities. Revenue Recognition Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable and collectability is reasonably assured. Generally, sales of cogeneration and chiller units and parts are recognized when shipped and services are recognized over the term of the service period. Payments received in advance of services being performed are recorded as deferred revenue. The Company recognizes revenue in certain circumstances before delivery has occurred (commonly referred to as bill and hold transactions). In such circumstances, among other things, risk of ownership has passed to the buyer, the buyer has made a written fixed commitment to purchase the finished goods, the buyer has requested the finished goods be held for future delivery as scheduled and designated by them, and no additional performance obligations exist by the Company. For these transactions, the finished goods are segregated from inventory and normal billing and credit terms granted. For the year ended December 31, 2015 , bill and hold transactions were approximately $928,900 in revenue compared to $1,020,000 in 2014 . For those arrangements that include multiple deliverables, the Company first determines whether each service or deliverable meets the separation criteria of FASB ASC 605-25, Revenue Recognition—Multiple-Element Arrangements . In general, a deliverable (or a group of deliverables) meets the separation criteria if the deliverable has stand-alone value to the customer and, if the arrangement includes a general right of return, delivery or performance of the undelivered item(s) is considered probable and substantially in control of the Company. Each deliverable that meets the separation criteria is considered a separate ‘‘unit of accounting”. The Company allocates the total arrangement consideration to each unit of accounting using the relative selling price method. The amount of arrangement consideration that is allocated to a delivered unit of accounting is limited to the amount that is not contingent upon the delivery of another unit of accounting. When vendor-specific objective evidence or third-party evidence is not available, adopting the relative fair value method of allocation permits the Company to recognize revenue on specific elements as completed based on the estimated selling price. The Company generally uses internal pricing lists that determine sales prices to external customers in determining its best estimate of the selling price of the various deliverables in multiple-element arrangements. Changes in judgments made in estimating the selling price of the various deliverables could significantly affect the timing or amount of revenue recognition. The Company enters into sales arrangements with customers to sell its cogeneration and chiller units and related service contracts and occasionally installation services. Based on the fact that the Company sells each deliverable to other customers on a stand-alone basis, the company has determined that each deliverable has a stand-alone value. Additionally, there are no rights of return relative to the delivered items; therefore, each deliverable is considered a separate unit of accounting. After the arrangement consideration has been allocated to each unit of accounting, the Company applies the appropriate revenue recognition method for each unit of accounting based on the nature of the arrangement and the services included in each unit of accounting. Cogeneration and chiller units are recognized when shipped and services are recognized over the term of the applicable agreement, or as provided when on a time and materials basis. In some cases, our customers may choose to have the Company engineer and install the system for them rather than simply purchase the cogeneration and/or chiller units. In this case, the Company accounts for revenue, or turnkey revenue, and costs using the percentage-of-completion method of accounting. Under the percentage-of-completion method of accounting, revenues are recognized by applying percentages of completion to the total estimated revenues for the respective contracts. Costs are recognized as incurred. The percentages of completion are determined by relating the actual cost of work performed to date to the current estimated total cost at completion of the respective contracts. When the estimate on a contract indicates a loss, the Company’s policy is to record the entire expected loss, as required by generally accepted accounting principles. The excess of contract costs and profit recognized to date on the percentage-of-completion accounting method in excess of billings is recorded as unbilled revenue. Billings in excess of related costs and estimated earnings are recorded as deferred revenue. Presentation of Sales Taxes The Company reports revenues net of any revenue-based taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue-producing transactions. Shipping and Handling Costs The Company classifies freight billed to customers as sales revenue and the related freight costs as cost of sales. Advertising Costs The Company expenses the costs of advertising as incurred. For the years ended December 31, 2015 and 2014 , advertising expense was approximately $184,000 and $281,000 , respectively. Research and Development Costs Research and development expenditures are expensed as incurred. Proceeds from certain grants and contracts with governmental agencies and their contractors to conduct research and development for new CHP technologies or to improve or enhance existing technology is recorded as an offset to the related research and development expenses. These grants and contracts are paid on a cost reimbursement basis provided in the agreed upon budget. Amounts received totaled $0 and $74,800 in fiscal years 2015 and 2014 , respectively, which offset the Company’s total research and development expenditures of approximately $591,585 and $1,116,283 for each of the years ended December 31, 2015 and 2014 , 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 an estimated forfeiture rate when calculating the expense for the period. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. 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 In May 2014, the FASB amended its standards related to revenue recognition. This amendment replaces all existing revenue recognition guidance and provides a single, comprehensive revenue recognition model for all contracts with customers. The standard contains principles that we will apply to determine the measurement of revenue and timing of when it is recognized. The underlying principle is that we will recognize revenue in a manner that depicts the transfer of goods or services to customers at an amount that we expect to be entitled to in exchange for those goods or services. The guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. Other major provisions include capitalization of certain contract costs, consideration of the time value of money in the transaction price and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The amendment also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract. The standard allows either full or modified retrospective adoption effective for annual and interim periods beginning January 1, 2018. Management is in the process of evaluating the impact the amendment will have on our Consolidated Financial Statements. While a final decision has not been made, we are currently planning to adopt the standard using the modified retrospective approach. In April 2015, the FASB amended its standards related to the balance sheet classification of debt issuance costs. This amendment requires entities to present debt issuance costs related to a debt liability as a direct deduction from the carrying amount of the debt and requires retrospective application. The new rules will become effective for annual and interim periods beginning after December 15, 2016. This will not have a significant impact our Consolidated Financial Statements. In July 2015, the FASB issued ASU No. 2015-11, which simplifies the subsequent measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This ASU is effective for public business entities for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The Company is currently assessing the impact of adopting this ASU on its Consolidated Financial Statements. In November 2015, the FASB amended its standards related to balance sheet classification of deferred taxes. This amendment requires that all deferred tax assets and liabilities be classified as non-current in a classified statement of financial position. The new rules will become effective for annual and interim periods beginning after December 15, 2016. Our deferred tax assets and liabilities include a full evaluation allowance. The Company adoption is not expected to impact our financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires companies to recognize all leases as assets and liabilities on the consolidated balance sheet. This ASU retains a distinction between finance leases and operating leases, and the classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the current accounting literature. The result of retaining a distinction between finance leases and operating leases is that under the lessee accounting model in Topic 842, the effect of leases in a consolidated statement of comprehensive income and a consolidated statement of cash flows is largely unchanged from previous GAAP. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Earlier application is permitted. The Company is currently evaluating the impact that the adoption of this ASU will have on its Consolidated Financial Statements. |
Loss per common share
Loss per common share | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Loss per common share | Loss per common share: Basic and diluted loss per share for the years ended December 31, 2015 and 2014 , respectively, was as follows: 2015 2014 Loss available to stockholders $ (2,727,413 ) $ (3,745,812 ) Weighted average shares outstanding - Basic and diluted 16,860,453 15,607,897 Basic and diluted loss per share $ (0.16 ) $ (0.24 ) Anti-dilutive shares underlying stock options outstanding 1,268,200 1,356,325 Anti-dilutive convertible debentures 890,207 555,556 |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Inventories at December 31, 2015 and 2014 consisted of the following. 2015 2014 Gross raw materials $ 5,618,853 $ 4,348,786 Less - reserves (293,000 ) (300,000 ) Net raw materials 5,325,853 4,048,786 Work-in-process 124,845 22,250 Finished goods 232,345 19,185 $ 5,683,043 $ 4,090,221 |
Intangible assets
Intangible assets | 12 Months Ended |
Dec. 31, 2015 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Intangible assets | Intangible assets other than goodwill The Company capitalized $39,272 and $68,638 of product certification costs during the years ended December 31, 2015 and 2014 , 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 $88,985 and $73,321 of patent-related costs during the years ended December 31, 2015 and 2014 , respectively. The Company capitalized $4,775 in trademarks during 2015. Intangible assets at December 31, 2015 and 2014 consist of the following: Product Certifications Patents Developed Technology Trademarks Total Balance at December 31, 2015 Intangible assets $ 514,616 $ 603,915 $ 240,000 $ 4,775 $ 1,363,306 Less - accumulated amortization (182,931 ) (91,764 ) (44,000 ) — (318,695 ) $ 331,685 $ 512,151 $ 196,000 $ 4,775 $ 1,044,611 Balance at December 31, 2014 Intangible assets $ 475,344 $ 514,930 240,000 — $ 1,230,274 Less - accumulated amortization (128,732 ) (62,242 ) (28,000 ) — (218,974 ) $ 346,612 $ 452,688 $ 212,000 $ — $ 1,011,300 Amortization expense was $99,721 and $83,986 during the years ended December 31, 2015 and 2014 , respectively. Estimated amortization expense at December 31, 2015 for each of the five succeeding years and thereafter are as follows: 2016 $ 153,278 2017 153,278 2018 147,081 2019 130,430 2020 124,518 Thereafter 336,026 $ 1,044,611 |
Property, plant and equipment
Property, plant and equipment | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Property, plant and equipment Property, plant and equipment at December 31, 2015 and 2014 consisted of the following: Estimated Useful Life (in Years) 2015 2014 Machinery and equipment 5 - 7 years $ 953,081 $ 936,705 Furniture and fixtures 5 years 113,842 99,346 Computer software 3 - 5 years 67,215 67,215 Leasehold improvements * 437,341 427,791 1,571,479 1,531,057 Less - accumulated depreciation and amortization (1,027,725 ) (872,636 ) Net property, plant and equipment $ 543,754 $ 658,421 * Lesser of estimated useful life of asset or lease term Depreciation and amortization expense on property and equipment for the years ended December 31, 2015 and 2014 was $172,006 and $194,879 , respectively. |
Demand note payable and convert
Demand note payable and convertible debentures - related party | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Demand notes payable and convertible debentures - related party | Demand notes payable, convertible debentures and line of credit Demand notes payable to related parties consist of various demand notes outstanding to stockholders totaling $0 at December 31, 2015 and 2014 . The primary lender was John N. Hatsopoulos, the company’s Co-Chief Executive Officer. On January 6, 2014, the Company repaid the then outstanding principal balance of $1,750,000 together with accrued interest of $175,311 . On March 25, 2013, the Company entered into a Revolving Line of Credit Agreement, or the Credit Agreement, with John N. Hatsopoulos, our Co-Chief Executive Officer. On January 6, 2014, the Company repaid the then outstanding principal balance of $1,200,000 together with accrued interest of $25,347 , closing the line of Credit. 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. In the event of default such interest rate shall accrue at 8% after the occurrence of the event of default and during continuance plus 2% after the occurrence and during the continuance of any other event of default. The Note is a senior unsecured obligation which pays 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 principal amount, if not converted, is due on the third anniversary of the Note, December 31, 2016. The Note is senior in right of payment to any unsecured indebtedness that is expressly subordinated in right of payment to the Note. The principal balance of the Note, together with any unpaid interest, is convertible into shares of the Company's common stock at 296.73 shares of our common stock per $1,000 principal amount of Note (equivalent to a conversion price of $3.37 per share) at the option of Michaelson. If at any time the common stock of the Company is (1) the arithmetic average of the volume weighted average price of the Common Stock for the twenty consecutive trading days preceding the Company's notice of mandatory conversion exceeds $150,000 , the Company shall have the right to require conversion of all of the then outstanding principal balance together with unpaid interest of this Note into the Company's common stock based on the conversion price of $3.37 per share. The conversion price is subject to adjustment. The Company may 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. Upon change of control, as defined by the Note, at Michaelson's option, the obligations may be assumed, on the terms and conditions in this Note, through an assignment and assumption agreement, or the Company may prepay all of the then outstanding principal and unpaid interest under this Note in full at the optional 120% prepayment amount. This provision does not create an embedded derivative in accordance with ASC 815, Derivatives and Hedging . As such it is not required to be bifurcated and accounted for separately from the Note. Debt issuance costs of $140,433 with a balance of $48,989 at December 31, 2015 are being amortized to interest expense over the term of the Note using the effective interest method. At December 31, 2015 , there were 890,207 shares of common stock issuable upon conversion of the Notes. While, prior to this transaction, Michaelson was an unrelated party, due to their beneficial ownership percentage of 6.8% after this transaction, Michaelson is now considered a related party. On June 15, 2015, the Company entered into a Non-Revolving Line of Credit Agreement, or the Agreement, with John N. Hatsopoulos, the Company's Co-Chief Executive Officer and a Company Director. Under the terms of the Agreement, Mr. Hatsopoulos has agreed to lend the Company up to an aggregate of $2,000,000 , with a withdrawal limit of $250,000 per financial calendar quarter, at the written request of the Company. Any amounts borrowed by the Company pursuant to the Agreement will bear interest at 6% per year. Interest is due and payable quarterly in arrears. The term of the Agreement is from July 1, 2015 to July 1, 2017. Repayment of the principal amount borrowed pursuant to the Agreement will be due on July 1, 2017, or the Maturity Date. Prepayment of any amounts due under the Agreement may be made at any time without penalty. The Agreement terminates on the Maturity Date. The Company has not yet borrowed any amounts pursuant to the Agreement. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2015 | |
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 . The Company subleases portions of its corporate offices and manufacturing facility to sub-tenants under annual sublease agreements, on a calendar year basis. Total rent expense for the years ended December 31, 2015 and 2014 amounted to $637,588 and $615,602 , offset by $113,472 and $201,440 in rent paid by sub-lessees, to both related and unrelated parties, for a net amount of $524,116 and $414,162 . As of December 31, 2015 , the future minimum lease payments receivable on subleases were $65,748 . The Company leased two passenger vehicle under a lease agreement expiring in 2018 . Vehicle rent expense amounted to $7,547 and $1,839 during the year ended December 31, 2015 and 2014, respectively. Future minimum lease payments under all non-cancelable operating leases as of December 31, 2015 consist of the following: Years Ending December 31, Amount 2016 $ 621,516 2017 742,944 2018 568,221 2019 506,432 2020 513,742 2021 and thereafter 1,722,042 Total $ 4,674,897 Letters of Credit As of December 31, 2015 , $294,802 in a letter of credit was outstanding under a revolving bank credit facility needed to collateralize a performance bond on a certain installation project. The bank required collateral to issue the letter of credit which the company provided in the form of restricted cash. This revolving bank credit facility was terminated on January 28, 2016 as the performance bond obligations were cleared. On April 10, 2015, the performance obligation tied to a performance bond previously collateralized by an account owned by John N. Hatsopoulos was relieved and the credit facility was canceled. Legal Proceedings From time to time, the Company may be involved in various claims and other legal proceedings which arise in the normal course of business. Such matters are subject to many uncertainties and outcomes that are not predictable. Based on the information available to the Company and after discussions with legal counsel, the Company does not believe any such proceedings will have a material adverse effect on the business, results of operations, financial position or liquidity. |
Product warranty
Product warranty | 12 Months Ended |
Dec. 31, 2015 | |
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, 2013 $ 95,000 Warranty provision for units sold 207,583 Costs of warranty incurred (155,583 ) Warranty reserve, December 31, 2014 147,000 Warranty provision for units sold 87,690 Costs of warranty incurred (124,690 ) Warranty reserve, December 31, 2015 $ 110,000 |
Stockholders' equity
Stockholders' equity | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Shareholders' equity | Stockholders’ equity Common Stock In 2015 and 2014 , the Company raised additional funds through the private placements and public offerings of common stock. In connection with the 2014 public offering, the Company sold an aggregate of 647,706 shares of common stock at a purchase price of $4.75 per share. In connection with this public offering the Company incurred commissions, legal fees and various other costs of $742,710 which were offset against the proceeds in additional paid in capital, resulting in net cash proceeds of $2,333,894 . In connection with the 2015 and 2014 private placements, the Company sold an aggregate of 2,350,734 and 1,400 shares of common stock in a purchase price range from $3.37 and $4.75 per share, resulting in net cash proceeds of $8,859,767 and $6,300 . The holders of Common Stock have the right to vote their interest on a per share basis. At December 31, 2015 and 2014, there were 18,478,990 and 15,905,881 shares of Common Stock outstanding, respectively. Preferred Stock On February 13, 2013, the Company authorized preferred stock of 10 million shares. At December 31, 2015 , no shares were issued or outstanding. Stock-Based Compensation In 2006, 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 to increase the reserved shares of common stock issuable under the Plan to 3,838,750 as of December 31, 2014 (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, 2015 and 2014 was 1,614,533 and 1,748,783 , respectively. In 2015 , the Company granted nonqualified options to purchase an aggregate of 165,000 shares of common stock in a range of $3.39 and $4.05 per share, respectively to certain employees and a consultant. These options have a vesting schedule of four years and expire in ten years. The fair value of the options issued in 2015 was $250,462 . The weighted-average grant date fair value of stock options granted during 2015 was $1.52 per option. In October 2015, the Board of Directors modified the performance options granted in 2014 to the Company's standard vesting schedule. In 2014 , the Company granted nonqualified options to purchase an aggregate of 318,325 shares of common stock for between $4.50 and $5.39 per share, respectively to certain employees, a director, and a consultant. These options have a vesting schedule of four years and expire in ten years. One of the grants for 100,000 shares had vesting terms of one year and only vest if the Company achieves positive earnings before interest, taxes, depreciation, and amortization adjusted for stock compensation. The fair value of the options issued in 2014 was $577,029 . The weighted-average grant date fair value of stock options granted during 2015 was $1.89 per option. Stock option activity for the year ended December 31, 2015 was as follows: Common Stock Options Number of Options Exercise Share Weighted Price Weighted Life Aggregate Value Outstanding, December 31, 2014 1,356,325 $1.20-$5.39 $ 2.77 5.12 years $ 3,618,935 Granted 165,000 $3.39-$4.05 3.43 Exercised (222,375 ) $1.20-$2.60 1.62 Canceled and forfeited (18,250 ) $2.60-$4.50 3.52 Expired (12,500 ) $1.20 1.20 Outstanding, December 31, 2015 1,268,200 $1.20-$5.39 $ 3.06 6.01 years $ 985,578 Exercisable, December 31, 2015 841,650 $ 2.48 $ 978,640 Vested and expected to vest, December 31, 2015 1,268,200 $ 3.06 $ 985,578 The Company does not expect any forfeitures and the table above represents all stock options expected to vest. 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 2015 and 2014 are as follows: Stock option awards: 2015 2014 Expected life 6.25 years 6.25 years Risk-free interest rate 1.63%-1.67% 1.51% Expected volatility 32.4%-32.6% 22.7%-32.3% The Company has granted restricted stock awards to its employees and directors. The performance based awards have vesting schedules 25% per year beginning two years after an IPO. Restricted stock activity for the years ended December 31, 2015 was as follows: Number of Restricted Stock Weighted Average Grant Date Fair Value Unvested, December 31, 2014 163,350 $ 1.31 Granted — — Vested — — Forfeited — — Unvested, December 31, 2015 163,350 $ 1.31 During the year ended December 31, 2015, the Company granted 250,000 warrants. During the years ended December 31, 2015 and 2014 , the Company recognized stock-based compensation of $189,511 and $117,138 , respectively, related to the issuance of stock options and restricted stock. No tax benefit was recognized related to the stock-based compensation recorded during the years. At December 31, 2015 and 2014 , the total compensation cost related to unvested restricted stock awards and stock option awards not yet recognized is $592,494 and $156,179 , respectively. This amount will be recognized over a weighted average period of 2.96 years . Stock Based Compensation - Ilios In 2009, Ilios adopted the 2009 Stock Incentive Plan (the “2009 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 maximum number of shares allowable for issuance under the Plan is 2,000,000 shares of common stock. 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 Plan. The options are not transferable except by will or domestic relations order. The option price per share under the Plan cannot be less than the fair market value of the underlying shares on the date of the grant. During the years ended December 31, 2015 and 2014 Ilios recognized stock-based compensation of $9,989 and $9,798 , related to stock options, respectively. No tax benefit was recognized related to the stock-based compensation recorded during the year. At December 31, 2015 and 2014 there were 160,000 unvested shares of restricted stock outstanding. At December 31, 2015 and 2014 the total compensation cost related to unvested restricted stock awards and stock option awards not yet recognized is $4,489 and $9,004 , respectively. This amount will be recognized over the weighted average period of 0.36 years . Stock option activity relating to Ilios for the year ended December 31, 2015 was as follows: Common Stock Options Number of Options Exercise Share Weighted Price Weighted Life Aggregate Value Outstanding, December 31, 2014 675,000 $0.10-$0.50 $ 0.32 6.56 years $ 120,000 Granted — — — Exercised — — — Canceled and forfeited (25,000 ) 0.50 0.50 Expired — — — Outstanding, December 31, 2015 650,000 $0.10-$0.50 $ 0.32 5.04 years $ 120,000 Exercisable, December 31, 2015 262,500 $ 0.50 $ — Vested and expected to vest, December 31, 2015 650,000 $ 0.32 $ 120,000 Ilios does not expect any forfeitures and the table above represents all stock options expected to vest. Ilios uses the Black-Scholes option pricing model to determine the fair value of stock options granted. Expected volatility was calculated based on the average volatility of comparable publicly traded companies, the expected life of the options was calculated using the simplified method, and 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 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 weighted average assumptions used in the Black-Scholes option pricing model for options granted in 2014 are as follows: Stock option awards: Expected life 6.25 years Risk-free interest rate 1.65% Expected volatility 35.2% Ilios has granted restricted stock awards to its employees and directors. The awards have only service conditions and carry vesting schedules ranging from 100% 90 days after an IPO up to 100% one year after an IPO. Restricted stock activity for the Ilios awards, for the years ended December 31, 2015 was as follows: Number of Restricted Stock Weighted Average Grant Date Fair Value Unvested, December 31, 2014 310,000 $ 0.10 Granted — — Vested — — Forfeited (150,000 ) 0.10 Unvested, December 31, 2015 160,000 $ 0.10 |
Noncontrolling interests
Noncontrolling interests | 12 Months Ended |
Dec. 31, 2015 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling interests | Noncontrolling interests As of December 31, 2015 , Tecogen owns 9,500,000 shares of 14,610,000 outstanding shares in Ilios or 65.0% . If the 160,000 restricted Ilios shares vest, the net result will decrease Tecogen’s ownership interest to 64.3% . |
Retirement plans
Retirement plans | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [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 $179,300 and $144,568 to the Plan in 2015 and 2014 , respectively. |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related party transactions | Related party transactions The Company has two affiliated companies, namely American DG Energy, and EuroSite Power. These companies are affiliates because several of the major stockholders of those companies have a significant ownership position in the Company. The Company does not own any shares of American DG Energy, and EuroSite Power. American DG Energy has sales representation rights to the Company’s products and services in New England. Revenue from sales of cogeneration and chiller systems, parts and service to American DG Energy and EuroSite Power during the years ended December 31, 2015 and 2014 amounted to $1,903,427 and $1,410,639 , respectively. On October 20, 2009, American DG Energy, in the ordinary course of its business, signed a Sales Representative Agreement with Ilios to promote, sell and service the Ilios high-efficiency heating products, such as the high efficiency water heater, in the marketing territory of the New England States, including Connecticut, Rhode Island, Massachusetts, New Hampshire, Vermont, and Maine. The marketing territory also includes all of the nations in the European Union. The initial term of this Agreement is for five years, after which it may be renewed for successive one -year terms upon mutual written agreement. The Company had lines of credit with John N. Hatsopoulos, the Co-Chief Executive Officer. Details of these transactions can be found in Note 7. On December 23, 2013, the Company entered into a Senior Convertible Promissory Note (the "Note") with Michaelson Capital Special Finance Fund LP, ("Michaelson"). Details of these transaction can be found in Note 7. John N. Hatsopoulos’ salary is $1.00 per year. On average, Mr. Hatsopoulos spends approximately 50% of his business time on the affairs of the Company; however such amount varies widely depending on the needs of the business and is expected to increase as the business of the Company develops. Since 2006, the Company has a facilities and support services agreement with American DG Energy. Under this agreement, the Company provides American DG Energy with certain office and business support services and also provides pricing based on a volume discount depending on the level of American DG Energy purchases of cogeneration and chiller products. For certain sites, American DG Energy hires the Company to service its chiller and cogeneration products. The Company also provides office space and certain utilities to American DG Energy based on a monthly rate set at the beginning of each year. Also, under this agreement, American DG Energy has sales representation rights to the Company's products and services in New England. The Company subleases portions of its corporate offices and manufacturing facility to sub-tenants under annual sublease agreements. For the years ended December 31, 2015 and 2014 , the Company received $78,468 and $87,880 , respectively, from American DG Energy and EuroSite Power. In addition, for the years ended December 31, 2015 and 2014 the Company received from the same companies, $36,672 and $42,366 , respectively, to offset common operating expenses incurred in the administration and maintenance of its corporate office and warehouse facility. In addition, Tecogen pays certain operating expenses, including benefits and insurance, on behalf of American DG Energy. Tecogen was reimbursed for these costs. As of December 31, 2015 and 2014 , the net amount due from American DG Energy was $1,177,261 and $600,251 , respectively. |
Investment Activities (Notes)
Investment Activities (Notes) | 12 Months Ended |
Dec. 31, 2015 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment Activities | Investment Activities On December 28, 2015, Tecogen 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 Ltd., was organized under the laws of the Island of Jersey, Channel Islands. Tecogen 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 offshore 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. The license agreement, joint venture agreement and form of warrant are filed as exhibits to this Current Report on Form 8-K. Robert Panora, Tecogen’s President, Chief Operating Officer, and one of the inventors of the Ultera technology will serve as JV co-Chief Executive Officer along with Dr. Elias Samaras. Dr. Samaras is the founder, President and Managing Director of Digital Security Technologies S.A. and the Chief Executive Officer of EuroSite Power Inc., a Tecogen affiliate. The JV is expected to have losses as it performs the necessary research and development with the Ultera technology. Using equity method accounting, these losses will not be included in Tecogen's financial statements |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2015 | |
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 2015 and 2014 is as follows: 2015 2014 Pre-tax book income $ (2,800,960 ) $ (3,870,952 ) Expected tax at 34% (952,326 ) (1,316,123 ) Permanent differences: Machinery & equipment 5,251 6,492 Other 444 36 State taxes: Current — — Deferred 120,931 (177,412 ) Other items: Federal research and development credits (16,504 ) — Change in valuation allowance (120,931 ) 177,412 Deferred tax past year true-up's (47,242 ) 132 Unbenefited operating losses 1,010,377 1,309,463 Income tax provision $ — $ — The components of net deferred tax assets recognized in the accompanying consolidated balance sheets at 2015 and 2014 are as follows: 2015 2014 Net operating loss carryforwards $ 6,734,000 $ 6,356,000 R&D and ITC credit carryforwards 133,000 — Accrued expenses and other 1,297,000 1,051,000 Accounts receivable 19,000 19,000 Inventory 250,000 207,000 Property, plant and equipment 119,000 138,000 Deferred tax assets 8,552,000 7,771,000 Valuation allowance (8,552,000 ) (7,771,000 ) Deferred tax assets, net $ — $ — At 2015 , the Company has approximately $17,903,000 of Federal Loss Carryforwards that expire beginning in the year 2021 through 2035. In addition, the Company has varying amounts of state net operating losses, expiring at various dates starting 2017 through 2035. The Federal net operating losses include approximately $3,578,000 attributable to the Company's majority owned subsidiary, which can only be used against income of that entity. Utilization of the loss carryforwards may be subject to a substantial annual limitation due to ownership change limitations that may have occurred previously or could occur in the future, 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 the 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 of stock of a corporation by more than 50 percentage points over a three -year period. If the Company has experienced a change of control, utilization of its carryforwards would be subject to an annual limitation under Section 382. Any limitation may result in expiration of a portion of the loss carryforwards before utilization. Subsequent ownership changes could further impact the limitation in future years. Further, until a study is completed and any limitation known, no amounts are being presented as an uncertain tax provision. A full valuation allowance has been provided against the company's loss carryforwards and, if an adjustment is required, this adjustment would be offset by an 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 did not record a benefit for income taxes related to its operating losses for the years ended 2015 and 2014 . |
Subsequent events
Subsequent events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent events | Subsequent events On January 28, 2016, the letter of credit from Enterprise Bank and Trust Company required for collateral with an outstanding performance bond was closed as the Company had met the performance obligations of the bond (see Note 8). On March 8, 2016, the Board of Directors authorized a stock exchange with Ilios shareholders in order to acquire the remaining 35% of outstanding Ilios stock and effect a statutory merger of the Company. The exchange was offered using a 30 day volume weighted average closing price of the Company's stock, or $3.93 at an exchange rate of 7.86 Ilios shares per Tecogen share. As of the filing date, shareholders have begun to respond but no shares have been issued in the exchange. On March 15, 2016, the Board of Directors accepted an offer in principle by the Michealson Capital Special Finance Fund, LP to extend the maturity date of the convertible note until December 18, 2018 and increase the outstanding balance by $150,000. The Company has evaluated subsequent events through the date of this report and determined that no additional subsequent events occurred that would require recognition in the consolidated financial statements or disclosure in the notes thereto. |
Summary of significant accoun24
Summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
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. Noncontrolling interests in the net assets and operations of Ilios 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, short-term investments 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, 2015 and 2014 which exceeded the $250,000 federally insured limit was approximately $5,329,528 and $1,272,500 , 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 and cash equivalents. There was no customer who represented more than 10% of revenues for the years ended December 31, 2015 and 2014 . The Company has approximately four hundred customers who represented 100% of the revenues for the year ended December 31, 2015 . Included in trade accounts receivable are amounts from one customer who represents 16% of the accounts receivable balance as of December 31, 2015 and another customer who represented 13% of the accounts receivable balance as of December 31, 2014 . |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid instruments with an original maturity date, at date of purchase, of three months or less to be cash and cash equivalents. |
Short-Term Investments | Short-Term Investments Short-term investments consist of certificate of deposit with maturities of greater than three months but less than one year. Certificates of deposits approximate fair value, based on estimates using current market rates offered for deposits with similar remaining maturities. These certificates of deposits was currently restricted as collateral for performance bonds associated with ongoing turnkey projects. On January 28, 2016, the collateral restriction was lifted and the remaining certificates was liquidated into cash. |
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, 2015 and 2014 , the allowance for doubtful accounts was $50,000 . |
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 market. 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 lives 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. |
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. |
Goodwill | Goodwill The Company's goodwill was recorded as a result of the Company's asset acquisition. The Company tests its recorded goodwill for impairment as of the last day of the year, or more often if indicators of potential impairment exist, by determining if the carrying value of the Company's single reporting unit exceeds its estimated fair value. Factors that could trigger an interim impairment test include, but are not limited to, underperformance relative to historical or projected future operating results, significant changes in the manner of use of the acquired assets or the Company's overall business, significant negative industry or economic trends and a sustained period where market capitalization, plus an appropriate control premium, is less than stockholders' equity. The Company's impairment testing involves a step zero process. Step zero allows for management to first assess qualitative factors to determine whether it is more likely than not that the fair value of the intangible asset is less than its carrying value. Therefore, as of December 31, 2015 , the Company determined that the fair value of the reporting unit exceeded its carrying value and therefore no impairment was recognized. |
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. |
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 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. |
Segment Information | Segment Information The Company reports segment data based on the management approach. The management approach designates the internal reporting that is used by management for making operating and investment decisions and evaluating performance as the source of the Company's reportable segments. The Company uses one measurement of profitability and does not disaggregate its business for internal reporting. The Company has determined that it operates in one business segment which manufactures and supports highly efficient CHP products based on engines fueled by natural gas. All of the Company’s long lived assets reside in, and the significant majority of the Company’s revenue is generated in the United States of America. |
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 2012, 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 2002 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, certificates of deposit, accounts receivable, accounts payable, demand notes, line of credit and convertible debentures due to related parties. The recorded values of cash and cash equivalents, accounts receivable and accounts payable approximate their fair values based on their short-term nature. At December 31, 2015 , the recorded value on the consolidated balance sheet of the debentures approximates fair value as the terms approximate those available for similar instruments. Certificates of deposits are classified as short-term investments and approximate fair value, based on estimates using current market rates offered for deposits with similar remaining maturities. |
Revenue Recognition | Revenue Recognition Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable and collectability is reasonably assured. Generally, sales of cogeneration and chiller units and parts are recognized when shipped and services are recognized over the term of the service period. Payments received in advance of services being performed are recorded as deferred revenue. The Company recognizes revenue in certain circumstances before delivery has occurred (commonly referred to as bill and hold transactions). In such circumstances, among other things, risk of ownership has passed to the buyer, the buyer has made a written fixed commitment to purchase the finished goods, the buyer has requested the finished goods be held for future delivery as scheduled and designated by them, and no additional performance obligations exist by the Company. For these transactions, the finished goods are segregated from inventory and normal billing and credit terms granted. For the year ended December 31, 2015 , bill and hold transactions were approximately $928,900 in revenue compared to $1,020,000 in 2014 . For those arrangements that include multiple deliverables, the Company first determines whether each service or deliverable meets the separation criteria of FASB ASC 605-25, Revenue Recognition—Multiple-Element Arrangements . In general, a deliverable (or a group of deliverables) meets the separation criteria if the deliverable has stand-alone value to the customer and, if the arrangement includes a general right of return, delivery or performance of the undelivered item(s) is considered probable and substantially in control of the Company. Each deliverable that meets the separation criteria is considered a separate ‘‘unit of accounting”. The Company allocates the total arrangement consideration to each unit of accounting using the relative selling price method. The amount of arrangement consideration that is allocated to a delivered unit of accounting is limited to the amount that is not contingent upon the delivery of another unit of accounting. When vendor-specific objective evidence or third-party evidence is not available, adopting the relative fair value method of allocation permits the Company to recognize revenue on specific elements as completed based on the estimated selling price. The Company generally uses internal pricing lists that determine sales prices to external customers in determining its best estimate of the selling price of the various deliverables in multiple-element arrangements. Changes in judgments made in estimating the selling price of the various deliverables could significantly affect the timing or amount of revenue recognition. The Company enters into sales arrangements with customers to sell its cogeneration and chiller units and related service contracts and occasionally installation services. Based on the fact that the Company sells each deliverable to other customers on a stand-alone basis, the company has determined that each deliverable has a stand-alone value. Additionally, there are no rights of return relative to the delivered items; therefore, each deliverable is considered a separate unit of accounting. After the arrangement consideration has been allocated to each unit of accounting, the Company applies the appropriate revenue recognition method for each unit of accounting based on the nature of the arrangement and the services included in each unit of accounting. Cogeneration and chiller units are recognized when shipped and services are recognized over the term of the applicable agreement, or as provided when on a time and materials basis. In some cases, our customers may choose to have the Company engineer and install the system for them rather than simply purchase the cogeneration and/or chiller units. In this case, the Company accounts for revenue, or turnkey revenue, and costs using the percentage-of-completion method of accounting. Under the percentage-of-completion method of accounting, revenues are recognized by applying percentages of completion to the total estimated revenues for the respective contracts. Costs are recognized as incurred. The percentages of completion are determined by relating the actual cost of work performed to date to the current estimated total cost at completion of the respective contracts. When the estimate on a contract indicates a loss, the Company’s policy is to record the entire expected loss, as required by generally accepted accounting principles. The excess of contract costs and profit recognized to date on the percentage-of-completion accounting method in excess of billings is recorded as unbilled revenue. Billings in excess of related costs and estimated earnings are recorded as deferred revenue. |
Shipping and Handling Costs | Shipping and Handling Costs The Company classifies freight billed to customers as sales revenue and the related freight costs as cost of sales. |
Advertising Costs | Advertising Costs The Company expenses the costs of advertising as incurred. For the years ended December 31, 2015 and 2014 , advertising expense was approximately $184,000 and $281,000 , respectively. |
Research and Development Costs | Research and Development Costs Research and development expenditures are expensed as incurred. Proceeds from certain grants and contracts with governmental agencies and their contractors to conduct research and development for new CHP technologies or to improve or enhance existing technology is recorded as an offset to the related research and development expenses. These grants and contracts are paid on a cost reimbursement basis provided in the agreed upon budget. Amounts received totaled $0 and $74,800 in fiscal years 2015 and 2014 , respectively, which offset the Company’s total research and development expenditures of approximately $591,585 and $1,116,283 for each of the years ended December 31, 2015 and 2014 , 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 an estimated forfeiture rate when calculating the expense for the period. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. 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 | Recent Accounting Pronouncements In May 2014, the FASB amended its standards related to revenue recognition. This amendment replaces all existing revenue recognition guidance and provides a single, comprehensive revenue recognition model for all contracts with customers. The standard contains principles that we will apply to determine the measurement of revenue and timing of when it is recognized. The underlying principle is that we will recognize revenue in a manner that depicts the transfer of goods or services to customers at an amount that we expect to be entitled to in exchange for those goods or services. The guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. Other major provisions include capitalization of certain contract costs, consideration of the time value of money in the transaction price and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The amendment also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract. The standard allows either full or modified retrospective adoption effective for annual and interim periods beginning January 1, 2018. Management is in the process of evaluating the impact the amendment will have on our Consolidated Financial Statements. While a final decision has not been made, we are currently planning to adopt the standard using the modified retrospective approach. In April 2015, the FASB amended its standards related to the balance sheet classification of debt issuance costs. This amendment requires entities to present debt issuance costs related to a debt liability as a direct deduction from the carrying amount of the debt and requires retrospective application. The new rules will become effective for annual and interim periods beginning after December 15, 2016. This will not have a significant impact our Consolidated Financial Statements. In July 2015, the FASB issued ASU No. 2015-11, which simplifies the subsequent measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This ASU is effective for public business entities for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The Company is currently assessing the impact of adopting this ASU on its Consolidated Financial Statements. In November 2015, the FASB amended its standards related to balance sheet classification of deferred taxes. This amendment requires that all deferred tax assets and liabilities be classified as non-current in a classified statement of financial position. The new rules will become effective for annual and interim periods beginning after December 15, 2016. Our deferred tax assets and liabilities include a full evaluation allowance. The Company adoption is not expected to impact our financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires companies to recognize all leases as assets and liabilities on the consolidated balance sheet. This ASU retains a distinction between finance leases and operating leases, and the classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the current accounting literature. The result of retaining a distinction between finance leases and operating leases is that under the lessee accounting model in Topic 842, the effect of leases in a consolidated statement of comprehensive income and a consolidated statement of cash flows is largely unchanged from previous GAAP. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Earlier application is permitted. The Company is currently evaluating the impact that the adoption of this ASU will have on its Consolidated Financial Statements. |
Summary of significant accoun25
Summary of significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Net Revenue by Product Line and Services | The following table summarizes net revenue by product line and services for the years ended December 31, 2015 and 2014 : 2015 2014 Products: Cogeneration $ 7,882,838 $ 5,364,810 Chiller & Heat Pump 2,172,399 3,260,224 Total Product Revenue 10,055,237 8,625,034 Services: Service contracts and related part sales 7,832,181 7,438,125 Installations 3,555,239 3,279,505 Total Service Revenue 11,387,420 10,717,630 Total Revenue $ 21,442,657 $ 19,342,664 |
Loss per common share (Tables)
Loss per common share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Loss Per Common Share, Basic and Diluted | Basic and diluted loss per share for the years ended December 31, 2015 and 2014 , respectively, was as follows: 2015 2014 Loss available to stockholders $ (2,727,413 ) $ (3,745,812 ) Weighted average shares outstanding - Basic and diluted 16,860,453 15,607,897 Basic and diluted loss per share $ (0.16 ) $ (0.24 ) Anti-dilutive shares underlying stock options outstanding 1,268,200 1,356,325 Anti-dilutive convertible debentures 890,207 555,556 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |
Summary of Inventory | Inventories at December 31, 2015 and 2014 consisted of the following. 2015 2014 Gross raw materials $ 5,618,853 $ 4,348,786 Less - reserves (293,000 ) (300,000 ) Net raw materials 5,325,853 4,048,786 Work-in-process 124,845 22,250 Finished goods 232,345 19,185 $ 5,683,043 $ 4,090,221 |
Intangible assets (Tables)
Intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets at December 31, 2015 and 2014 consist of the following: Product Certifications Patents Developed Technology Trademarks Total Balance at December 31, 2015 Intangible assets $ 514,616 $ 603,915 $ 240,000 $ 4,775 $ 1,363,306 Less - accumulated amortization (182,931 ) (91,764 ) (44,000 ) — (318,695 ) $ 331,685 $ 512,151 $ 196,000 $ 4,775 $ 1,044,611 Balance at December 31, 2014 Intangible assets $ 475,344 $ 514,930 240,000 — $ 1,230,274 Less - accumulated amortization (128,732 ) (62,242 ) (28,000 ) — (218,974 ) $ 346,612 $ 452,688 $ 212,000 $ — $ 1,011,300 |
Schedule of Estimated Future Amortization Expense | Estimated amortization expense at December 31, 2015 for each of the five succeeding years and thereafter are as follows: 2016 $ 153,278 2017 153,278 2018 147,081 2019 130,430 2020 124,518 Thereafter 336,026 $ 1,044,611 |
Property, plant and equipment (
Property, plant and equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property, Plant and Equipment | Property, plant and equipment at December 31, 2015 and 2014 consisted of the following: Estimated Useful Life (in Years) 2015 2014 Machinery and equipment 5 - 7 years $ 953,081 $ 936,705 Furniture and fixtures 5 years 113,842 99,346 Computer software 3 - 5 years 67,215 67,215 Leasehold improvements * 437,341 427,791 1,571,479 1,531,057 Less - accumulated depreciation and amortization (1,027,725 ) (872,636 ) Net property, plant and equipment $ 543,754 $ 658,421 * Lesser of estimated useful life of asset or lease term |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 consist of the following: Years Ending December 31, Amount 2016 $ 621,516 2017 742,944 2018 568,221 2019 506,432 2020 513,742 2021 and thereafter 1,722,042 Total $ 4,674,897 |
Product warranty (Tables)
Product warranty (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Guarantees [Abstract] | |
Schedule of Product Warranty Reserve | Changes in the Company’s warranty reserve were as follows: Warranty reserve, December 31, 2013 $ 95,000 Warranty provision for units sold 207,583 Costs of warranty incurred (155,583 ) Warranty reserve, December 31, 2014 147,000 Warranty provision for units sold 87,690 Costs of warranty incurred (124,690 ) Warranty reserve, December 31, 2015 $ 110,000 |
Stockholders' equity (Tables)
Stockholders' equity (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Tecogen | |
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, 2015 was as follows: Common Stock Options Number of Options Exercise Share Weighted Price Weighted Life Aggregate Value Outstanding, December 31, 2014 1,356,325 $1.20-$5.39 $ 2.77 5.12 years $ 3,618,935 Granted 165,000 $3.39-$4.05 3.43 Exercised (222,375 ) $1.20-$2.60 1.62 Canceled and forfeited (18,250 ) $2.60-$4.50 3.52 Expired (12,500 ) $1.20 1.20 Outstanding, December 31, 2015 1,268,200 $1.20-$5.39 $ 3.06 6.01 years $ 985,578 Exercisable, December 31, 2015 841,650 $ 2.48 $ 978,640 Vested and expected to vest, December 31, 2015 1,268,200 $ 3.06 $ 985,578 |
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 2015 and 2014 are as follows: Stock option awards: 2015 2014 Expected life 6.25 years 6.25 years Risk-free interest rate 1.63%-1.67% 1.51% Expected volatility 32.4%-32.6% 22.7%-32.3% |
Schedule of Restricted Stock Activity | Restricted stock activity for the years ended December 31, 2015 was as follows: Number of Restricted Stock Weighted Average Grant Date Fair Value Unvested, December 31, 2014 163,350 $ 1.31 Granted — — Vested — — Forfeited — — Unvested, December 31, 2015 163,350 $ 1.31 |
Ilois | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Stock Option Activity | Stock option activity relating to Ilios for the year ended December 31, 2015 was as follows: Common Stock Options Number of Options Exercise Share Weighted Price Weighted Life Aggregate Value Outstanding, December 31, 2014 675,000 $0.10-$0.50 $ 0.32 6.56 years $ 120,000 Granted — — — Exercised — — — Canceled and forfeited (25,000 ) 0.50 0.50 Expired — — — Outstanding, December 31, 2015 650,000 $0.10-$0.50 $ 0.32 5.04 years $ 120,000 Exercisable, December 31, 2015 262,500 $ 0.50 $ — Vested and expected to vest, December 31, 2015 650,000 $ 0.32 $ 120,000 |
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 2014 are as follows: Stock option awards: Expected life 6.25 years Risk-free interest rate 1.65% Expected volatility 35.2% |
Schedule of Restricted Stock Activity | Restricted stock activity for the Ilios awards, for the years ended December 31, 2015 was as follows: Number of Restricted Stock Weighted Average Grant Date Fair Value Unvested, December 31, 2014 310,000 $ 0.10 Granted — — Vested — — Forfeited (150,000 ) 0.10 Unvested, December 31, 2015 160,000 $ 0.10 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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 2015 and 2014 is as follows: 2015 2014 Pre-tax book income $ (2,800,960 ) $ (3,870,952 ) Expected tax at 34% (952,326 ) (1,316,123 ) Permanent differences: Machinery & equipment 5,251 6,492 Other 444 36 State taxes: Current — — Deferred 120,931 (177,412 ) Other items: Federal research and development credits (16,504 ) — Change in valuation allowance (120,931 ) 177,412 Deferred tax past year true-up's (47,242 ) 132 Unbenefited operating losses 1,010,377 1,309,463 Income tax provision $ — $ — |
Schedule of Deferred Tax Assets | The components of net deferred tax assets recognized in the accompanying consolidated balance sheets at 2015 and 2014 are as follows: 2015 2014 Net operating loss carryforwards $ 6,734,000 $ 6,356,000 R&D and ITC credit carryforwards 133,000 — Accrued expenses and other 1,297,000 1,051,000 Accounts receivable 19,000 19,000 Inventory 250,000 207,000 Property, plant and equipment 119,000 138,000 Deferred tax assets 8,552,000 7,771,000 Valuation allowance (8,552,000 ) (7,771,000 ) Deferred tax assets, net $ — $ — |
Schedule of Reconciliation to Income Tax Provision | A reconciliation of the federal statutory income tax provision to the Company's actual provision for the years ended 2015 and 2014 is as follows: 2015 2014 Pre-tax book income $ (2,800,960 ) $ (3,870,952 ) Expected tax at 34% (952,326 ) (1,316,123 ) Permanent differences: Machinery & equipment 5,251 6,492 Other 444 36 State taxes: Current — — Deferred 120,931 (177,412 ) Other items: Federal research and development credits (16,504 ) — Change in valuation allowance (120,931 ) 177,412 Deferred tax past year true-up's (47,242 ) 132 Unbenefited operating losses 1,010,377 1,309,463 Income tax provision $ — $ — |
Nature of business and operat34
Nature of business and operations (Details) | 12 Months Ended |
Dec. 31, 2015segment | |
Sale of Stock By Subsidiary [Line Items] | |
Number of Operating Segments | 1 |
Ilios | |
Sale of Stock By Subsidiary [Line Items] | |
The Company's ownership percentage in subsidiary | 65.00% |
Restricted stock | Ilios | |
Sale of Stock By Subsidiary [Line Items] | |
The Company's ownership percentage in subsidiary | 64.30% |
Summary of significant accoun35
Summary of significant accounting policies - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Jul. 22, 2013 | |
Debt Instrument [Line Items] | |||
Allowance for doubtful accounts | $ 50,000 | $ 50,000 | |
Bill and Hold Transactions | 928,900 | 1,020,000 | |
Advertising expense | 183,512 | 281,330 | |
Research and development costs reimbursed by government agencies | 0 | 74,800 | |
Research and development | $ 591,585 | $ 1,116,283 | |
Revolving credit facility | Chief Executive Officer (John N. Hatsopoulos) | |||
Debt Instrument [Line Items] | |||
Bank credit facility | $ 1,055,000 |
Summary of significant accoun36
Summary of significant accounting policies - Concentration of Credit Risk (Details) | 12 Months Ended | |
Dec. 31, 2015USD ($)customer | Dec. 31, 2014USD ($)customer | |
Concentration Risk [Line Items] | ||
Cash, FDIC Insured Amount | $ | $ 250,000 | |
Cash, Uninsured Amount | $ | $ 5,329,528 | $ 1,272,500 |
Customer concentration risk | Revenues | ||
Concentration Risk [Line Items] | ||
Number of customers | 400 | |
Number of customer representing more than 10% of revenues or trade accounts receivable | 0 | 0 |
Customer concentration risk | Trade accounts receivable | ||
Concentration Risk [Line Items] | ||
Number of customer representing more than 10% of revenues or trade accounts receivable | 1 | |
Concentration risk, percentage | 16.00% | 13.00% |
Summary of significant accoun37
Summary of significant accounting policies - Short-Term Investments (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Short-Term Investments, Minimum Maturity Term | 3 months |
Short-Term Investments, Maximum Maturity Term | 1 year |
Summary of significant accoun38
Summary of significant accounting policies - Property, Plant and Equipment (Details) | 12 Months Ended |
Dec. 31, 2015 | |
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 accoun39
Summary of significant accounting policies - Revenue by Product Line and Services (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue by Producks and Services [Line Items] | ||
Products | $ 10,055,237 | $ 8,625,034 |
Services | 11,387,420 | 10,717,630 |
Total revenues | 21,442,657 | 19,342,664 |
Cogeneration | ||
Revenue by Producks and Services [Line Items] | ||
Products | 7,882,838 | 5,364,810 |
Chiller | ||
Revenue by Producks and Services [Line Items] | ||
Products | 2,172,399 | 3,260,224 |
Service contracts | ||
Revenue by Producks and Services [Line Items] | ||
Services | 7,832,181 | 7,438,125 |
installations | ||
Revenue by Producks and Services [Line Items] | ||
Services | $ 3,555,239 | $ 3,279,505 |
Loss per common share - Schedul
Loss per common share - Schedule of Loss Per Common Share, Basic and Diluted (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Loss available to stockholders | $ (2,727,413) | $ (3,745,812) | |
Weighted average shares outstanding - Basic and diluted | 16,860,453 | 15,607,897 | |
Basic and diluted loss per share (usd per share) | $ (0.16) | $ (0.24) | |
Stock Options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive shares underlying stock options outstanding | 1,268,200 | 1,356,325 | |
Anti-dilutive convertible debentures | 1,268,200 | 1,356,325 | |
Convertible debentures | Common stock | Convertible Debenture | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Debt conversion, number of shares issued | 555,556 | ||
Convertible debentures | Common stock | Michaelson | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Debt conversion, number of shares issued | 296.73 | ||
Convertible debentures | Common stock | Michaelson | Convertible Debenture | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Common stock issuable upon conversion | 890,207 |
Inventory - Summary of Inventor
Inventory - Summary of Inventory (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Gross raw materials | $ 5,618,853 | $ 4,348,786 |
Less - reserves | (293,000) | (300,000) |
Net raw materials | 5,325,853 | 4,048,786 |
Work-in-process | 124,845 | 22,250 |
Finished goods | 232,345 | 19,185 |
Inventory, Net | $ 5,683,043 | $ 4,090,221 |
Intangible assets - Narrative (
Intangible assets - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amortization expense | $ 99,721 | $ 83,986 |
Product Certifications | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Capitalized finited lived intangible assets | 39,272 | 68,638 |
Patents | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Capitalized finited lived intangible assets | $ 88,985 | $ 73,321 |
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 |
Intangible assets - Schedule of
Intangible assets - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Schedule of Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | $ 1,363,306 | $ 1,230,274 |
Less - accumulated amortization | (318,695) | (218,974) |
Intangible Assets, Net | 1,044,611 | 1,011,300 |
Product Certifications | ||
Schedule of Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | 514,616 | 475,344 |
Less - accumulated amortization | (182,931) | (128,732) |
Intangible Assets, Net | 331,685 | 346,612 |
Patents | ||
Schedule of Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | 603,915 | 514,930 |
Less - accumulated amortization | (91,764) | (62,242) |
Intangible Assets, Net | 512,151 | 452,688 |
Developed Technology | ||
Schedule of Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | 240,000 | 240,000 |
Less - accumulated amortization | (44,000) | (28,000) |
Intangible Assets, Net | 196,000 | $ 212,000 |
Trademarks | ||
Schedule of Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | 4,775 | |
Intangible Assets, Net | $ 4,775 |
Intangible assets - Schedule 44
Intangible assets - Schedule of Estimated Future Amortization Expense (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
2,016 | $ 153,278 | |
2,017 | 153,278 | |
2,018 | 147,081 | |
2,019 | 130,430 | |
2,020 | 124,518 | |
Thereafter | 336,026 | |
Intangible assets, net | $ 1,044,611 | $ 1,011,300 |
Property, plant and equipment -
Property, plant and equipment - Summary of Property and Equipment (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | ||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 1,571,479 | $ 1,531,057 | |
Less: accumulated depreciation and amortization | (1,027,725) | (872,636) | |
Net property, plant and equipment | $ 543,754 | 658,421 | |
Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life - years | 3 years | ||
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 | $ 953,081 | 936,705 | |
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 | 5 years | ||
Furniture and Fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 113,842 | 99,346 | |
Useful life - years | 5 years | ||
Computer software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 67,215 | 67,215 | |
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 | 3 years | ||
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | [1] | $ 437,341 | $ 427,791 |
[1] | Lesser of estimated useful life of asset or lease term |
Property, plant and equipment46
Property, plant and equipment -Depreciation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization | $ 172,006 | $ 194,879 |
Demand note payable and conve47
Demand note payable and convertible debentures - related party (Details) | Jan. 06, 2014USD ($) | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2015USD ($)shares$ / shares | Dec. 31, 2014USD ($)shares |
Debt Instrument [Line Items] | ||||
Interest paid on debt | $ 121,742 | $ 324,885 | ||
Michaelson | ||||
Debt Instrument [Line Items] | ||||
Related party ownership percentage | 6.80% | |||
Demand notes | ||||
Debt Instrument [Line Items] | ||||
Demand notes payable, related party, current | $ 1,750,000 | $ 0 | $ 0 | |
Interest paid on debt | 175,311 | |||
Demand notes | Maximum | ||||
Debt Instrument [Line Items] | ||||
Related party debt, stated interest rate | 6.00% | |||
Demand notes | Chief Executive Officer (John N. Hatsopoulos) | ||||
Debt Instrument [Line Items] | ||||
Demand notes payable, related party, current | 2,000,000 | $ 2,000,000 | ||
Demand notes payable, withdrawal limit per quarter | $ 250,000 | $ 250,000 | ||
Convertible debentures | Michaelson | ||||
Debt Instrument [Line Items] | ||||
Related party debt, stated interest rate | 4.00% | |||
Conversion price in usd per share | $ / shares | $ 3.37 | $ 3.37 | ||
Debt conversion, amount converted | $ 1,000 | |||
Convertible debentures, related party, current | $ 3,000,000 | $ 3,000,000 | ||
Debt term | 3 years | |||
Accrue rate after occurrence and during continuance | 8.00% | |||
Accrue rate after occurrence and during continuance on other default | 2.00% | |||
Consecutive trading days | 20 days | |||
Maximum conversion amount | $ 150,000 | |||
Percentage of principal and interest | 120.00% | |||
Debt issuance cost | $ 140,433 | $ 48,989 | ||
Convertible debentures | Michaelson | Common stock | ||||
Debt Instrument [Line Items] | ||||
Debt conversion, number of shares issued | shares | 296.73 | |||
Revolving credit facility | ||||
Debt Instrument [Line Items] | ||||
Interest paid on debt | 25,347 | |||
Revolving credit facility | Chief Executive Officer (John N. Hatsopoulos) | ||||
Debt Instrument [Line Items] | ||||
Amount outstanding | $ 1,200,000 | |||
Convertible Debenture | Convertible debentures | Common stock | ||||
Debt Instrument [Line Items] | ||||
Debt conversion, number of shares issued | shares | 555,556 | |||
Convertible Debenture | Convertible debentures | Michaelson | Common stock | ||||
Debt Instrument [Line Items] | ||||
Common stock issuable upon conversion | shares | 890,207 |
Commitments and contingencies -
Commitments and contingencies - Operating Lease Obligations (Details) | 12 Months Ended | ||
Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Jan. 31, 2012vehicle | |
Operating Leased Assets [Line Items] | |||
Future minimum payments receivable | $ 65,748 | ||
Office space and warehouse facilities | |||
Operating Leased Assets [Line Items] | |||
Rent expense, gross | 637,588 | $ 615,602 | |
Rent expense, sublease rent offset | 113,472 | 201,440 | |
Rent expense, net | 524,116 | 414,162 | |
Vehicles | |||
Operating Leased Assets [Line Items] | |||
Rent expense, net | $ 7,547 | $ 1,839 | |
Operating Leased Assets, Number of Assets | vehicle | 2 |
Commitments and contingencies49
Commitments and contingencies - Schedule of Future Minimum Rental Payments for Operating Leases (Details) | Dec. 31, 2015USD ($) |
Future minimum lease payments under all non-cancelable operating leases | |
2,016 | $ 621,516 |
2,017 | 742,944 |
2,018 | 568,221 |
2,019 | 506,432 |
2,020 | 513,742 |
2021 and thereafter | 1,722,042 |
Total | $ 4,674,897 |
Commitments and contingencies50
Commitments and contingencies - Agreement with Digital Energy Corp. (Details) | Dec. 31, 2015USD ($) |
Revolving credit facility | |
Guarantor Obligations [Line Items] | |
Letter of credit outstanding | $ 294,802 |
Product warranty - Schedule of
Product warranty - Schedule of Product Warranty Reserve (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Guarantees [Abstract] | ||
Product warranty period | 1 year | |
Schedule of Product Warranty Reserve [Roll Forward] | ||
Warranty reserve, beginning balance | $ 147,000 | $ 95,000 |
Warranty provision for units sold | 87,690 | 207,583 |
Costs of warranty incurred | (124,690) | (155,583) |
Warranty reserve, ending balance | $ 110,000 | $ 147,000 |
Stockholders' equity - Common S
Stockholders' equity - Common Stock and Receivable from Shareholder (Details) - USD ($) | 12 Months Ended | 24 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Feb. 13, 2013 | |
Class of Stock [Line Items] | ||||
Common stock, shares outstanding | 18,478,990 | 15,905,881 | 18,478,990 | |
Preferred stock, shares authorized | 10,000,000 | |||
Common stock | ||||
Class of Stock [Line Items] | ||||
Shares of common stock issued in private placements | 647,706 | |||
Private placements, price in usd per share | $ 4.75 | |||
Stock issuance costs | $ 742,709.51 | |||
Net cash proceeds from private placements | $ 2,333,894 | |||
Private Placement | Common stock | ||||
Class of Stock [Line Items] | ||||
Shares of common stock issued in private placements | 2,350,734 | 1,400 | ||
Net cash proceeds from private placements | $ 8,859,767 | $ 6,300 | ||
Private Placement | Common stock | Minimum | ||||
Class of Stock [Line Items] | ||||
Private placements, price in usd per share | $ 3.37 | |||
Private Placement | Common stock | Maximum | ||||
Class of Stock [Line Items] | ||||
Private placements, price in usd per share | $ 4.75 |
Stockholders' equity - Stock-Ba
Stockholders' equity - Stock-Based Compensation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options granted, exercise price range, lower limit (usd per share) | $ 3.39 | |
Options granted, exercise price range, upper limit (usd per share) | $ 4.05 | |
Warrants granted | 250,000 | |
Tecogen | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options granted | 165,000 | 318,325 |
Options granted, exercise price range, lower limit (usd per share) | $ 3.39 | $ 4.50 |
Options granted, exercise price range, upper limit (usd per share) | $ 4.05 | $ 5.39 |
Fair value of options issued | $ 250,462 | $ 577,029 |
Weighted-average grant date fair value of options granted | $ 1.52 | $ 1.89 |
Recognized stock-based compensation | $ 189,511 | $ 117,138 |
Compensation cost related to unvested restricted stock awards and stock option awards not yet recognized | $ 592,494 | $ 156,179 |
Compensation cost not yet recognized, weighted average period of recognition | 2 years 11 months 15 days | |
Tecogen | Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 4 years | 4 years |
Award expiration period | 10 years | 10 years |
Tecogen | Restricted stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unvested restricted stock outstanding | 163,350 | 163,350 |
Tecogen | Restricted stock | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 2 years | |
Vesting percentage | 25.00% | |
Tecogen | Performance Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options granted | 100,000 | |
Award vesting period | 1 year | |
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 | 1,614,533 | 1,748,783 |
Ilois | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options granted | 0 | |
Recognized stock-based compensation | $ 9,989 | $ 9,798 |
Compensation cost related to unvested restricted stock awards and stock option awards not yet recognized | $ 4,489 | $ 9,004 |
Compensation cost not yet recognized, weighted average period of recognition | 4 months 11 days | |
Ilois | Restricted stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unvested restricted stock outstanding | 160,000 | 310,000 |
Ilois | Restricted stock | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 90 days | |
Vesting percentage | 100.00% | |
Ilois | Restricted stock | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 1 year | |
Vesting percentage | 100.00% | |
Ilois | 2009 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Maximum number of shares allowable for issuance | 2,000,000 |
Stockholders' equity - Stock Op
Stockholders' equity - Stock Option Activity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Exercise Price Per Share [Abstract] | ||
Granted, Exercise Price Lower Range Limit (usd per share) | $ 3.39 | |
Granted, Exercise Price Upper Range Limit (usd per share) | $ 4.05 | |
Tecogen | ||
Stock Options Outstanding [Roll Forward] | ||
Beginning (shares) | 1,356,325 | |
Granted (shares) | 165,000 | 318,325 |
Exercised (shares) | (222,375) | |
Canceled and forfeited (shares) | (18,250) | |
Expired (shares) | (12,500) | |
Ending (shares) | 1,268,200 | 1,356,325 |
Exercisable (shares) | 841,650 | |
Vested and expected to vest (shares) | 1,268,200 | |
Weighted Average Exercise Price [Roll Forward] | ||
Beginning (usd per share) | $ 2.77 | |
Granted (usd per share) | 3.43 | |
Exercised (usd per share) | 1.62 | |
Canceled and forfeited (usd per share) | 3.52 | |
Expired (usd per share) | 1.20 | |
Ending (usd per share) | 3.06 | $ 2.77 |
Exercisable (usd per share) | 2.48 | |
Vested and expected to vest (usd per share) | $ 3.06 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | ||
Outstanding, Aggregate Intrinsic Value | $ 985,578 | $ 3,618,935 |
Exercisable, Aggregate Intrinsic Value | 978,640 | |
Vested and expected to vest, Aggregate Intrinsic Value | $ 985,578 | |
Exercise Price Per Share [Abstract] | ||
Outstanding, Exercise Price Lower Range Limit (usd per share) | $ 1.20 | $ 1.2 |
Outstanding, Exercise Price Upper Range Limit (usd per share) | 5.39 | 5.39 |
Granted, Exercise Price Lower Range Limit (usd per share) | 3.39 | 4.50 |
Granted, Exercise Price Upper Range Limit (usd per share) | 4.05 | $ 5.39 |
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) | 2.60 | |
Canceled and Forfeited, Exercise Price Upper Range Limit (usd per share) | 4.50 | |
Expired, Exercise Price (usd per share) | $ 1.20 | |
Ilois | ||
Stock Options Outstanding [Roll Forward] | ||
Beginning (shares) | 675,000 | |
Granted (shares) | 0 | |
Exercised (shares) | 0 | |
Canceled and forfeited (shares) | (25,000) | |
Expired (shares) | 0 | |
Ending (shares) | 650,000 | 675,000 |
Exercisable (shares) | 262,500 | |
Vested and expected to vest (shares) | 650,000 | |
Weighted Average Exercise Price [Roll Forward] | ||
Beginning (usd per share) | $ 0.32 | |
Granted (usd per share) | 0 | |
Exercised (usd per share) | 0 | |
Canceled and forfeited (usd per share) | 0.50 | |
Expired (usd per share) | 0 | |
Ending (usd per share) | 0.32 | $ 0.32 |
Exercisable (usd per share) | 0.50 | |
Vested and expected to vest (usd per share) | $ 0.32 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | ||
Outstanding, Weighted Average Remaining Life | 5 years 14 days | 6 years 6 months 21 days |
Outstanding, Aggregate Intrinsic Value | $ 120,000 | $ 120,000 |
Exercisable, Aggregate Intrinsic Value | 0 | |
Vested and expected to vest, Aggregate Intrinsic Value | $ 120,000 | |
Exercise Price Per Share [Abstract] | ||
Outstanding, Exercise Price Lower Range Limit (usd per share) | $ 0.10 | $ 0.10 |
Outstanding, Exercise Price Upper Range Limit (usd per share) | 0.50 | $ 0.50 |
Granted, Exercise Price (usd per share) | 0 | |
Exercised, Exercise Price (usd per share) | 0 | |
Canceled and Forfeited, Exercise Price (usd per share) | 0.50 | |
Expired, Exercise Price (usd per share) | $ 0 | |
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 | 6 years 5 days | 5 years 1 month 15 days |
Stockholders' equity - Weighted
Stockholders' equity - Weighted Average Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Tecogen | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation cost not yet recognized, weighted average period of recognition | 2 years 11 months 15 days | |
Tecogen | Stock Options | ||
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 | 1.51% | |
Risk-free interest rate, Minimum | 1.63% | |
Risk-free interest rate, Maximum | 1.67% | |
Expected volatility, Minimum | 32.40% | 22.70% |
Expected volatility, Maximum | 32.60% | 32.30% |
Ilois | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation cost not yet recognized, weighted average period of recognition | 4 months 11 days | |
Ilois | Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life | 6 years 3 months | |
Risk-free interest rate | 1.65% | |
Expected volatility | 35.20% |
Stockholders' equity - Restrict
Stockholders' equity - Restricted Stock Activity (Details) - Restricted stock | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Tecogen | |
Unvested Restricted Stock [Roll Forward] | |
Unvested, Beginning (shares) | shares | 163,350 |
Granted (shares) | shares | 0 |
Vested (shares) | shares | 0 |
Forfeited (shares) | shares | 0 |
Unvested, Ending (shares) | shares | 163,350 |
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 | 0 |
Forfeited (usd per share) | $ / shares | 0 |
Unvested, Ending (usd per share) | $ / shares | $ 1.31 |
Ilois | |
Unvested Restricted Stock [Roll Forward] | |
Unvested, Beginning (shares) | shares | 310,000 |
Granted (shares) | shares | 0 |
Vested (shares) | shares | 0 |
Forfeited (shares) | shares | (150,000) |
Unvested, Ending (shares) | shares | 160,000 |
Weighted Average Grant Date Fair Value [Roll Forward] | |
Unvested, Beginning (usd per share) | $ / shares | $ 0.10 |
Granted (usd per share) | $ / shares | 0 |
Vested (usd per share) | $ / shares | 0 |
Forfeited (usd per share) | $ / shares | 0.10 |
Unvested, Ending (usd per share) | $ / shares | $ 0.10 |
Noncontrolling interests (Detai
Noncontrolling interests (Details) - Ilios | Dec. 31, 2015shares |
Noncontrolling Interest [Line Items] | |
Noncontrolling Interest, Shares | 9,500,000 |
Outstanding shares | 14,610,000 |
The Company's ownership percentage in subsidiary | 65.00% |
If restricted shares vest | |
Noncontrolling Interest [Line Items] | |
The Company's ownership percentage in subsidiary | 64.30% |
Ilios restricted stock | 160,000 |
Retirement plans (Details)
Retirement plans (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Compensation and Retirement Disclosure [Abstract] | ||
Maximum employer annual contribution per employee, percent | 4.50% | |
Contributions to plan | $ 179,300 | $ 144,568 |
Related party transactions (Det
Related party transactions (Details) | Oct. 20, 2009 | Dec. 31, 2015USD ($)company | Dec. 31, 2014USD ($) |
Related Party Transaction [Line Items] | |||
Number of affiliated companies | company | 2 | ||
Office space and warehouse facilities | |||
Related Party Transaction [Line Items] | |||
Sublease rental | $ 113,472 | $ 201,440 | |
Affiliated companies | Sublease under operating leased assets | Office space and warehouse facilities | |||
Related Party Transaction [Line Items] | |||
Sublease rental | 78,468 | 87,880 | |
Sublease operating expenses offset | 36,672 | 42,366 | |
Affiliated companies | American DG Energy | |||
Related Party Transaction [Line Items] | |||
Revenue from related parties | 1,903,427 | 1,410,639 | |
Related party transactions agreement term | 5 years | ||
Related party transactions agreement term, renewal period | 1 year | ||
Due from related party | 1,177,261 | $ 600,251 | |
Chief Executive Officer (John N. Hatsopoulos) | |||
Related Party Transaction [Line Items] | |||
Officers' compensation | $ 1 | ||
Percentage of time spent on company affairs | 50.00% |
Investment Activities (Details)
Investment Activities (Details) | Dec. 28, 2015USD ($) |
Schedule of Equity Method Investments [Line Items] | |
Equity interest in joint venture (percent) | 50.00% |
Offshore Investors | |
Schedule of Equity Method Investments [Line Items] | |
Investment by other party to joint venture | $ 3,000,000 |
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, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Line Items] | ||
Federal statutory income tax rate (percent) | 34.00% | |
Pre-tax book income | $ (3,870,952) | |
Income Tax Provision | ||
Income Tax Disclosure [Line Items] | ||
Pre-tax book income | $ (2,800,960) | (3,870,952) |
Expected tax at 34% | (952,326) | (1,316,123) |
Machinery & equipment | 5,251 | 6,492 |
Other | 444 | 36 |
Current | 0 | 0 |
Deferred | 120,931 | (177,412) |
Federal research and development credits | (16,504) | 0 |
Change in valuation allowance | (120,931) | 177,412 |
Deferred tax past year true-up's | (47,242) | 132 |
Unbenefited operating losses | 1,010,377 | 1,309,463 |
Income tax provision | $ 0 | $ 0 |
Income taxes - Schedule of Defe
Income taxes - Schedule of Deferred Tax Assets (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 6,734,000 | $ 6,356,000 |
R&D and ITC credit carryforwards | 133,000 | 0 |
Accrued expenses and other | 1,297,000 | 1,051,000 |
Accounts receivable | 19,000 | 19,000 |
Inventory | 250,000 | 207,000 |
Property, plant and equipment | 119,000 | 138,000 |
Deferred tax assets | 8,552,000 | 7,771,000 |
Valuation allowance | (8,552,000) | (7,771,000) |
Deferred tax assets, net | $ 0 | $ 0 |
Income taxes - Narrative (Detai
Income taxes - Narrative (Details) - Internal Revenue Service (IRS) | Dec. 31, 2015USD ($) |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards | $ 17,903,000 |
Subsidiary | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards | $ 3,578,000 |
Subsequent events (Details)
Subsequent events (Details) - Subsequent event | Mar. 08, 2016$ / shares |
Subsequent Event [Line Items] | |
Stock exchange agreement, price per share of Company stock (usd per share) | $ 3.93 |
Stock exchange agreement, exchange rate of Ilios shares per Company share | 7.86 |
Ilios | |
Subsequent Event [Line Items] | |
Ownership interest acquired through stock exchange agreement (percent) | 35.00% |