Exhibit 99.02 - Pro Forma Financials
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On December 14, 2018 and March 5, 2019, Tecogen Inc. (“the Company”) completed the sales of its interests in two and six agreements, respectively, and associated assets (collectively “the assets”) relating to the generation and sale of energy to an unrelated third party in exchange for $2.0 million and $5.0 million, cash, respectively. The following unaudited pro forma condensed consolidated financial statements have been derived by the application of pro forma adjustments to the Company's historical consolidated financial statements, which have been presented to give effect to the dispositions of the assets. The unaudited pro forma condensed consolidated balance sheet as of September 30, 2018 is presented as if the dispositions had occurred as of September 30, 2018. The unaudited pro forma condensed consolidated statement of operations for the nine months ended September 30, 2018 is presented as if the dispositions had occurred on January 1, 2018. The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2017 is presented as if the dispositions had occurred on May 18, 2017, the date the assets were acquired as part of a larger acquisition. The unaudited pro forma condensed consolidated balance sheet and statements of operations for these respective periods are being provided for illustrative purposes only and do not purport to represent what our results of operations or financial position would have been if the transactions had occurred on the dates indicated and are not intended to project our results of operations or financial position for any future period. Any of the factors underlying these estimates and assumptions may change or prove to be materially different and the estimates and assumptions may not be representative of facts that existed upon completion of the dispositions.
The unaudited pro forma adjustments are based on estimates, available information and certain assumptions that the Company believes are reasonable. The unaudited pro forma adjustments and primary assumptions are described in the accompanying notes. The unaudited pro forma condensed consolidated financial statements and the related notes should be read in conjunction with the historical consolidated financial statements and accompanying notes of Tecogen Inc. included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 and the Company's Quarterly Report on Form 10-Q for the period ended September 30, 2018.
Exhibit 99.02 - Pro Forma Financials
TECOGEN INC.
Pro Forma Condensed Consolidated Balance Sheet
As of September 30, 2018
(Unaudited)
|
| | | | | | | | | | | | | | | | | | |
| | | Tecogen Inc. | | Dispositions of | | Pro Forma | | | | |
| | | Historical | | Assets | | Adjustments | | Notes | | Pro Forma |
| | | | | | | | | | | |
| Cash and cash equivalents | | $ | 136,717 |
| | $ | — |
| | $ | 7,000,000 |
| | (a) | | $ | 7,136,717 |
|
| Accounts receivable, net | | 11,548,663 |
| | — |
| | — |
| | | | 11,548,663 |
|
| Unbilled revenue | | 4,441,565 |
| | — |
| | — |
| | | | 4,441,565 |
|
| Inventory, net | | 5,983,067 |
| | — |
| | — |
| | | | 5,983,067 |
|
| Prepaid and other currents assets | | 815,269 |
| | — |
| | — |
| | | | 815,269 |
|
| Total current assets | | 22,925,281 |
| | — |
| | 7,000,000 |
| | | | 29,925,281 |
|
| Property, plant and equipment, net | | 11,107,509 |
| | (6,825,539 | ) | | — |
| | (b) | | 4,281,970 |
|
| Intangible assets, net | | 2,935,279 |
| | (1,341,584 | ) | | — |
| | (b) | | 1,593,695 |
|
| Goodwill | | 13,365,655 |
| | — |
| | — |
| | | | 13,365,655 |
|
| Other assets | | 427,810 |
| | — |
| | — |
| | | | 427,810 |
|
| Total assets | | $ | 50,761,534 |
| | $ | (8,167,123 | ) | | $ | 7,000,000 |
| | | | $ | 49,594,411 |
|
| | | | | | | | | | | |
| Revolving line of credit, bank | | $ | 1,708,888 |
| | $ | — |
| | $ | — |
| | | | $ | 1,708,888 |
|
| Accounts payable | | 5,716,426 |
| | — |
| | — |
| | | | 5,716,426 |
|
| Accrued expenses | | 2,196,921 |
| | — |
| | 591,000 |
| | (c) | | 2,787,921 |
|
| Deferred revenue | | 1,718,376 |
| | — |
| | — |
| | | | 1,718,376 |
|
| Total current liabilities | | 11,340,611 |
| | — |
| | — |
| | | | 11,931,611 |
|
| Deferred revenue, net of current portion | | 343,031 |
| | — |
| | — |
| | | | 343,031 |
|
| Unfavorable contract liability, net | | 6,534,074 |
| | (3,372,337 | ) | | — |
| | (b) | | 3,161,737 |
|
| Total liabilities | | 18,217,716 |
| | (3,372,337 | ) | | — |
| | | | 15,436,379 |
|
| Common stock | | 24,819 |
| | — |
| | — |
| | | | 24,819 |
|
| Additional paid-in capital | | 56,371,583 |
| | — |
| | — |
| | | | 56,371,583 |
|
| Accumulated deficit | | (24,298,191 | ) | | — |
| | 1,614,214 |
| | (d) | | (22,683,977 | ) |
| Total Tecogen Inc. stockholders’ equity | | 32,098,211 |
| | — |
| | 1,614,214 |
| | | | 33,712,425 |
|
| Noncontrolling interest | | 445,607 |
| | — |
| | — |
| | | | 445,607 |
|
| Total stockholders' equity | | 32,543,818 |
| | — |
| | 1,614,214 |
| | | | 34,158,032 |
|
| Total liabilities and stockholders' equity | | $ | 50,761,534 |
| | $ | (3,372,337 | ) | | $ | 1,614,214 |
| | | | $ | 49,594,411 |
|
The accompanying notes are an integral part of the unaudited pro forma condensed consolidated financial statements.
Exhibit 99.02 - Pro Forma Financials
TECOGEN INC.
Pro Forma Condensed Consolidated Statement of Operations
Nine Months Ended September 30, 2018
(Unaudited)
|
| | | | | | | | | | | | |
| | | Tecogen Inc. | | Dispositions of | | |
| | | Historical | | Assets | | Pro Forma |
| | | | | | | |
| Net sales and gross revenues | | $ | 26,567,276 |
| | $ | (2,037,868 | ) | | $ | 24,529,408 |
|
| Cost and expenses applicable to sales and revenues | | 16,686,781 |
| | (1,387,453 | ) | | 15,299,328 |
|
| Gross profit | | 9,880,495 |
| | (650,415 | ) | | 9,230,080 |
|
| Selling, general and administrative expenses | | 10,015,085 |
| | — |
| | 10,015,085 |
|
| Research and development | | 993,102 |
| | — |
| | 993,102 |
|
| Loss from operations | | (1,127,692 | ) | | (650,415 | ) | | (1,778,107 | ) |
| Interest and other income | | 7,926 |
| | — |
| | 7,926 |
|
| Interest expense | | (56,195 | ) | | — |
| | (56,195 | ) |
| Unrealized loss on investment securities | | (59,042 | ) | | — |
| | (59,042 | ) |
| Loss from continuing operations before income taxes | | (1,235,003 | ) | | (650,415 | ) | | (1,885,418 | ) |
| Provision for income taxes on continuing operations | | 42,679 |
| | — |
| | 42,679 |
|
| Net loss from continuing operations | | (1,277,682 | ) | | (650,415 | ) | | (1,928,097 | ) |
| Income attributable to the noncontrolling interest | | (58,946 | ) | | — |
| | (58,946 | ) |
| Net loss attributable Tecogen Inc. shareholders | | $ | (1,336,628 | ) | | $ | (650,415 | ) | | $ | (1,987,043 | ) |
| | | | | | | |
| Per common share data: | | | | | | |
| Net loss per share - basic and diluted | | $ | (0.05 | ) | | | | $ | (0.08 | ) |
| Weighted average shares outstanding - basic and diluted | | 24,813,936 |
| | | | 24,813,936 |
|
The accompanying notes are an integral part of the unaudited pro forma condensed consolidated financial statements.
Exhibit 99.02 - Pro Forma Financials
TECOGEN INC.
Pro Forma Condensed Consolidated Statement of Operations
Year Ended December 31, 2017
(Unaudited)
|
| | | | | | | | | | | | |
| | | Tecogen Inc. | | Dispositions of | | |
| | | Historical | | Assets | | Pro Forma |
| | | | | | | |
| Net sales and gross revenues | | $ | 33,202,666 |
| | $ | (1,707,016 | ) | | $ | 31,495,650 |
|
| Cost and expenses applicable to sales and revenues | | 20,248,262 |
| | (1,094,566 | ) | | 19,153,696 |
|
| Gross profit | | 12,954,404 |
| | (612,450 | ) | | 12,341,954 |
|
| Selling, general and administrative expenses | | 11,792,323 |
| | — |
| | 11,792,323 |
|
| Research and development | | 936,929 |
| | — |
| | 936,929 |
|
| Income (loss) from operations | | 225,152 |
| | (612,450 | ) | | (387,298 | ) |
| Interest and other income | | 27,626 |
| | — |
| | 27,626 |
|
| Interest expense | | (155,082 | ) | | — |
| | (155,082 | ) |
| Income (loss) from continuing operations before income taxes | | 97,696 |
| | (612,450 | ) | | (514,754 | ) |
| Provision for income taxes on continuing operations | | — |
| | — |
| | — |
|
| Net income (loss) from continuing operations | | 97,696 |
| | (612,450 | ) | | (514,754 | ) |
| Income attributable to the noncontrolling interest | | (50,260 | ) | | — |
| | (50,260 | ) |
| Net income (loss) attributable Tecogen Inc. shareholders | | $ | 47,436 |
| | $ | (612,450 | ) | | $ | (565,014 | ) |
| | | | | | | |
| Per common share data: | | | | | | |
| Net income (loss) per share - basic | | $ | — |
| | | | $ | (0.02 | ) |
| Net income (loss) per share - diluted | | $ | — |
| | | | $ | (0.02 | ) |
| Weighted average shares outstanding - basic | | 23,171,033 |
| | | | 23,171,033 |
|
| Weighted average shares outstanding - diluted | | 23,342,627 |
| | | | 23,171,033 |
|
The accompanying notes are an integral part of the unaudited pro forma condensed consolidated financial statements.
Exhibit 99.02 - Pro Forma Financials
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. PRO FORMA ADJUSTMENTS TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| |
| (a) | Adjustment to reflect the receipt of cash consideration of $2.0 and $5.0 million, respectively, from the sales of the Company’s interests in two and six agreements, respectively, and associated assets (collectively “the assets”) relating to the generation and sale of energy to an unrelated third party. |
| |
| (b) | Adjustment to derecognize the carrying value of the assets sold. |
| |
| (c) | Adjustment to recognize liability for costs related to assets sold which were incurred subsequent to September 30, 2018. |
| |
| (d) | Adjustment for estimated gain on the sales. The amount of the actual gain will be calculated based on the carrying value of the assets as of the closing of the transactions and therefore differ from the estimate which employs the carrying values as of September 30, 2018. |
