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What changed in TECOGEN INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of TECOGEN INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+315 added−320 removedSource: 10-K (2026-03-19) vs 10-K (2025-03-18)

Top changes in TECOGEN INC.'s 2025 10-K

315 paragraphs added · 320 removed · 246 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

80 edited+30 added−21 removed107 unchanged
Biggest changeThese poisons or contaminants are most commonly sulfur compounds. • 9,702,306: “Internal Combustion Engine Controller.” This patent granted in July of 2017 relates to the unique control methodology used in the InVerde e+ CHP unit that maximizes engine fuel economy under variable speed operation. • 9,470,126: "Assembly and method for reducing ammonia in exhaust of internal combustion engines." This patent, granted in October 2016, is related to the Ultera emission control system applicable to all our products. • 9,856,767: “Systems and methods for reducing emissions in exhaust of vehicles and producing electricity." This patent, filed in November 2015 and published in March 2016, relates to the development of the Ultera emission control system for vehicle applications. • 9,121,326: “Assembly and method for reducing nitrogen oxides, carbon monoxide and hydrocarbons in exhausts of internal combustion engines.” This patent, granted in September 2015, is related to the Ultera emission control system applicable to all our products. • 9,631,534: "Assembly and Method for reducing nitrogen oxides, carbon monoxide, hydrocarbons and hydrocarbon gas in exhausts of internal combustion engines and producing and electrical output." This patent granted in April 2017, is related to the Ultera emission control system applicable to all our products. • 8,578,704: “Assembly and method for reducing nitrogen oxides, carbon monoxide, and hydrocarbons in exhausts of internal combustion engines.” This patent, granted in November 2013, is for the Ultera emission control system applicable to all our products. • 7,243,017: “Method for controlling internal combustion engine emissions.” This patent, granted in July 2007, applies to the specific algorithms used in our engine controller for metering fuel usage to obtain the correct combustion mixture and is technology used by most of our engines. • 7,239,034: "Engine driven power inverter system with cogeneration." This patent granted in July 2007, pertains to the utilization of an engine-driven CHP module combined with an inverter and applies to our InVerde product specifically. • 11,936,327: "Hybrid Power System With Electric Generator and Auxiliary Power Source." This patent, granted in March 2024, pertains to joining two power sources to optimize power use from the grid or another source by way of a proprietary DC-DC voltage converter, inverter and controller circuits.
Biggest changeThese poisons or contaminants are most commonly sulfur compounds. • 9,856,767: “Systems and methods for reducing emissions in exhaust of vehicles and producing electricity." This patent, filed in November 2015 and published in March 2016, relates to the development of the Ultera emission control system for vehicle applications. • 9,631,534: "Assembly and Method for reducing nitrogen oxides, carbon monoxide, hydrocarbons and hydrocarbon gas in exhausts of internal combustion engines and producing and electrical output." This patent granted in April 2017, is related to the Ultera emission control system applicable to all our products. • 9,470,126: "Assembly and method for reducing ammonia in exhaust of internal combustion engines." This patent, granted in October 2016, is related to the Ultera emission control system applicable to all our products. • 9,121,326: “Assembly and method for reducing nitrogen oxides, carbon monoxide and hydrocarbons in exhausts of internal combustion engines.” This patent, granted in September 2015, is related to the Ultera emission control system applicable to all our products. • 8,578,704: “Assembly and method for reducing nitrogen oxides, carbon monoxide, and hydrocarbons in exhausts of internal combustion engines.” This patent, granted in November 2013, is for the Ultera emission control system applicable to all our products. • 7,243,017: “Method for controlling internal combustion engine emissions.” This patent, granted in July 2007, applies to the specific algorithms used in our engine controller for metering fuel usage to obtain the correct combustion mixture and is technology used by most of our engines. • 7,239,034: "Engine driven power inverter system with cogeneration." This patent granted in July 2007, pertains to the utilization of an engine-driven CHP module combined with an inverter and applies to our InVerde product specifically.
All of our CHP products are available with the patented Ultera low-emissions technology as an equipment option.
Ultera Low Emissions Technology . All of our CHP products are available with the patented Ultera low-emissions technology as an equipment option.
Overall, we compete with end users’ other options for electrical power, heating, and cooling on the basis of our technology’s ability to: • Provide a more efficient solution that results in operational savings for a facility's energy needs including cooling, electricity and hot water; • Provide power when a utility grid is not available or goes out of service; • Reduce emissions of criteria pollutants (NOx and CO) to near-zero levels and cut the emission of greenhouse gases such as carbon dioxide due to increased efficiencies compared to the electric grid; • Provide reliable on-site power generation, heating and cooling services.
Overall, we compete with end users’ other options for electrical power, heating, and cooling on the basis of our technology’s ability to: • Provide a more efficient solution that results in operational savings for a facility's energy needs including cooling, electricity and hot water; • Provide power when a utility grid is not available or goes out of service; • Reduce emissions of criteria pollutants (NOx and CO) to near-zero levels and cut the emission of greenhouse gases such as carbon dioxide due to increased efficiencies compared to the electric grid; and • Provide reliable on-site power generation, heating and cooling services.
We have succeeded in developing new technologies and products in collaboration with several entities, including: • Sacramento Municipal Utility District has provided test sites to us since 2010. • Southern California Gas Company and San Diego Gas & Electric Company, each a Sempra Energy subsidiary, have granted us research and development contracts since 2004. • Department of Energy’s Lawrence Berkeley National Laboratory, with whom we have had research and development contracts since 2005, including ongoing Microgrid development work related to the InVerde. • Eastern Municipal Water District in Southern California has co-sponsored demonstration projects to retrofit both a natural-gas powered municipal water pump engine and a biofuel powered pumping station engine with the Ultera low emissions technology since 2012. • Consortium for Electric Reliability Technology Solutions executed research and development contracts with us, and has provided a test site to us since 2005. • California Energy Commission with whom we had a research and development contract from 2004 until March 2013. • The AVL California Technology Center performed a support role in research and development contracts as well as internal research and development on our Ultera emission control system from August 2009 to November 2011.
We have succeeded in developing new technologies and products in collaboration with several entities, including: • Sacramento Municipal Utility District has provided test sites to us since 2010. • Southern California Gas Company and San Diego Gas & Electric Company, each a Sempra Energy subsidiary, have granted us research and development contracts beginning in 2004. • Department of Energy’s Lawrence Berkeley National Laboratory, with whom we have had research and development contracts beginning in 2005, including ongoing Microgrid development work related to the InVerde. • Eastern Municipal Water District in Southern California has co-sponsored demonstration projects to retrofit both a natural-gas powered municipal water pump engine and a biofuel powered pumping station engine with the Ultera low emissions technology beginning in 2012. • Consortium for Electric Reliability Technology Solutions executed research and development contracts with us, and has provided a test site to us beginning in 2005. • California Energy Commission with whom we had a research and development contract from 2004 until March 2013. • The AVL California Technology Center performed a support role in research and development contracts as well as internal research and development on our Ultera emission control system from August 2009 to November 2011.
On March 31, 2023, we entered into two lease agreements for two adjacent buildings, located in North Billerica, Massachusetts, containing approximately 26,412 square feet of manufacturing, storage and office space to serve as our headquarters and manufacturing facilities. In April, 2024, we relocated our manufacturing operations and corporate offices to 76 Treble Cove Road, North Billerica, MA.
Properties On March 31, 2023, we entered into two lease agreements for two adjacent buildings, located in North Billerica, Massachusetts, containing approximately 26,412 square feet of manufacturing, storage and office space to serve as our headquarters and manufacturing facilities. In April, 2024, we relocated our manufacturing operations and corporate offices to 76 Treble Cove Road, North Billerica, MA.
Reasons include fair compensation, a complete array of employee benefits to include: health, dental and life insurance; short-term and long-term disability insurance; HSA account funding; generous time off benefits; and the grant of options or awards to purchase shares of our common stock. We use web-based training for all of our employees.
Reasons include fair compensation, a complete array of employee benefits including: health, dental and life insurance; short-term and long-term disability insurance; HSA account funding; generous time off benefits; and the grant of options or awards to purchase shares of our common stock. We use web-based training for all of our employees.
On February 1, 2024, Tecogen and Aegis amended the Agreement to add eighteen (18) additional maintenance service agreements (the "Amendment"). The Amendment includes an undertaking by Aegis to use commercially reasonable efforts to support and assist our execution of maintenance service agreements for an additional thirty-six (36) cogeneration units sold to customers by Aegis.
On February 1, 2024, Tecogen and Aegis amended the Agreement to add eighteen (18) additional maintenance service agreements (the "First Amendment"). The First Amendment includes an undertaking by Aegis to use commercially reasonable efforts to support and assist our execution of maintenance service agreements for an additional thirty-six (36) cogeneration units sold to customers by Aegis.
Pursuant to the Vertiv Agreement we have granted Vertiv the exclusive right to market and sell our DTx chillers for data center cooling applications outside the United States, and the non-exclusive right to market and sell our DTx chillers within the United States.
Pursuant to the Vertiv Agreement we have granted Vertiv the exclusive right to market and sell our DTx chillers for data center cooling applications outside the United States, and the non-exclusive right to market and sell our DTx chillers for such applications within the United States.
The Inflation Reduction Act of 2022 increased Federal tax credits, including the investment tax credit (ITC), to up to thirty percent (30%) of the project cost for projects incorporating certain low emission technologies, including CHP equipment, that begin construction before January 1, 2025 and provides for an additional ten percent (10%) credit if the taxpayer satisfies additional requirements relating to domestic content.
The Inflation Reduction Act of 2022 increased federal tax credits, including the investment tax credit (ITC), to up to thirty percent (30%) of the project cost for projects incorporating certain low emission technologies, including CHP equipment, that began construction before January 1, 2025 and provides for an additional ten percent (10%) credit if the taxpayer satisfies additional requirements relating to domestic content.
Distributed power generation (“DG”) has been successfully implemented by others in large industrial installations over 10 Megawatts ("MW") , where the market has been growing for a number of years and is increasingly being accepted in smaller sized units because of technology improvements, increased energy costs, and better DG economics.
Distributed power generation has been successfully implemented by others in large industrial installations over 10 Megawatts ("MW") , where the market has been growing for a number of years and is increasingly being accepted in smaller sized units because of technology improvements, increased energy costs, and better economics.
Impact of Utility Power Constraints, Data Center Construction As more load is added to the utility grid in the form of data centers, EV charging, and other demands for power, customers are facing power constraints. Tecogen believes that these power constrained customers, in particular data centers and 2 TECOGEN INC. industrial facilities, represent a significant opportunity for growth.
Impact of Utility Power Constraints, Data Center Construction As more load is added to the utility grid in the form of data centers, EV charging, and other demands for power, customers are facing power constraints. Tecogen believes that these power-constrained customers, in particular data centers and industrial facilities, represent a significant opportunity for growth.
We have a total of approximately 21,000 square feet of manufacturing and warehouse space at the North Billerica, Massachusetts facility. The lease agreements which commenced on January 1, 2024, provide for initial lease terms of five (5) years, expiring on December 31, 2028, with two successive options to renew for additional terms of five (5) years.
We have a total of approximately 21,000 square feet of manufacturing and warehouse space at the North Billerica, Massachusetts facility. The lease agreements which commenced on January 1, 2024, provide for initial lease terms of five (5) years, expiring on December 31, 2028, with two successive options to renew for additional terms of five (5) years. See Item 2.
The factors that drive the demand for such products include the price of natural gas, local electricity rates, 4 TECOGEN INC. environmental regulations, and governmental energy policies, as well as customers’ desire to become more environmentally responsible. Our Tecochill and Tecofrost cooling and refrigeration products provide both cooling and make use of high-grade waste heat.
The factors that drive the demand for such products include the price of natural gas, local electricity rates, environmental regulations, and governmental energy policies, as well as customers’ desire to become more environmentally responsible. Our Tecochill and Tecofrost cooling and refrigeration products provide both cooling and make use of high-grade waste heat.
The typical sales model is to install and own energy systems in customers' buildings and sell the energy produced by those systems back to the customers at a cost set by a negotiated formula in customer contracts.
The typical sales model is to install and own energy systems in customers' buildings and sell the energy or cooling produced by those systems back to the customers at a cost set by a negotiated formula in customer contracts.
In the event of such a conversion, the number of shares we will be required to issue will be determined by dividing the balance due under the promissory note by the average closing price per share of our shares during the thirty-day period prior to the date of conversion. On February 18, 2025 we amended the promissory notes with Mr.
In the event of such a conversion, the number of shares we were required to be issue is determined by dividing the balance due under the promissory note by the average closing price per share of our shares during the thirty-day period prior to the date of conversion. On February 18, 2025, we amended the promissory notes with Mr.
As of December 31, 2024, our Ultera CHP, and fuel cell technologies, are the only technologies we are aware of that comply with California's air quality standards for CO and NOx, the world's strictest air quality standards.
As of December 31, 2025, our Ultera CHP, and fuel cell technologies, are the only technologies we are aware of that comply with California's air quality standards for CO and NOx, the world's strictest air quality standards.
Information contained on our website is not incorporated by reference into this Annual Report on Form 10-K or our other securities filings with the SEC. The SEC maintains an internet website at www.sec.gov which contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
Information contained on our website is not incorporated by reference into this Annual Report on Form 10-K or our other securities filings with the SEC. The SEC maintains an internet website at www.sec.gov which contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. 14 TECOGEN INC.
Most of these states also have high peak demand rates, which favor utilization of our modular units in groups so as to assure redundancy and peak demand savings. Governmental agencies in some of these regions may also provide generous rebates that can improve the economic viability of our systems.
Most of these states also have high peak demand rates, which favor utilization of our modular units in groups so as to assure redundancy and peak demand savings. 7 TECOGEN INC. Governmental agencies in some of these regions may also provide generous rebates that can improve the economic viability of our systems.
However, we have sold to other indoor agricultural growers, and we believe that the indoor food production market will provide significant opportunities for us. The indoor agriculture market in particular has the potential to be a major driver of growth as states move to legalize the use of cannabis for medicinal purposes and recreational use.
However, we have sold to other indoor agricultural growers, and we believe that the indoor food production market may provide significant opportunities for us. The indoor agriculture market in particular has the potential to be a significant driver of growth as states move to legalize the use of cannabis for medicinal purposes and recreational use.
Our business operations is comprised of three business segments: • Products Segment - designs, manufactures and sells industrial and commercial cogeneration systems; • Services Segment - provides operations and maintenance ("O&M") services for our products under long term service contracts; and • Energy Production Segment - installs, operates and maintains distributed generation electricity systems that we own and sell the energy generated by such systems in the form of electricity, heat, hot water and cooling to our customers under long-term energy sales agreements.
Our Business Our business operations are comprised of three business segments: • Products Segment - designs, manufactures and sells industrial and commercial cogeneration and chiller systems; • Services Segment - provides operations and maintenance ("O&M") services for our products under long term service contracts; and • Energy Production Segment - installs, operates and maintains distributed generation electricity systems that we own, and sells the energy generated by such systems in the form of electricity, heat, hot water and cooling to our customers under long-term energy sales agreements.
The Vertiv Agreement has a term of two years and provides that Vertiv will establish a budget for marketing activities and use commercially reasonable efforts to sell our DTx chillers for cooling applications in data centers. The Vertiv Agreement also provides the basis for the negotiation of a definitive supply agreement between us and Vertiv.
The Vertiv Agreement has a term of two years and provides that Vertiv will engage in establishing a budget for marketing activities and use commercially reasonable efforts to sell our DTx chillers for cooling applications in data centers. The Vertiv Agreement also provides the basis for the negotiation of a definitive supply agreement between us and Vertiv.
We anticipate that an inverter-based product with at least some of the features offered by our InVerde products will be introduced by others, but we believe that our competitors will face serious challenges in duplicating the InVerde and that product development time and costs would likely be significant.
We anticipate that an inverter-based product with at least some of the features offered by our InVerde products will be introduced by others, but we believe that our competitors will face serious challenges in duplicating the InVerde and that product development time and costs would likely be significant. 11 TECOGEN INC.
We may benefit from increased government regulations that impose tighter emission and fuel efficiency standards. We encourage investors and potential investors to carefully consider the risks described under "Item 1A. Risk Factors" below regarding various aspects of the regulatory environment and other related risks.
We may benefit 12 TECOGEN INC. from increased government regulations that impose tighter emission and fuel efficiency standards. We encourage investors and potential investors to carefully consider the risks described under "Item 1A. Risk Factors" below regarding various aspects of the regulatory environment and other related risks.
Similarly, in the growing Microgrid segment, neither fuel cells nor microturbines can respond to changing energy loads when the system is disconnected from the utility grid. Engines such as those used in our equipment inherently have a fast-dynamic response to step load changes, which is why they are the primary choice for emergency generators.
See "Business-Intellectual Property." Similarly, in the growing Microgrid segment, neither fuel cells nor microturbines can respond to changing energy loads when the system is disconnected from the utility grid. Engines such as those used in our equipment inherently have a fast-dynamic response to step load changes, which is why they are the primary choice for emergency generators.
Such royalty payments have been in the range of $5,000 to $15,000 on an annual basis through the year ended December 31, 2024. In addition, WARF reserved the right to grant non-profit research institutions and governmental agencies non-exclusive licenses to practice and use, for non-commercial research purposes, the technology developed by us that is based on the licensed software.
Such royalty payments have been in the range of $5,000 to $15,000 on an annual basis through the year ended December 31, 2025. WARF has reserved the right to grant non-profit research institutions and governmental agencies non-exclusive licenses to practice and use, for non-commercial research purposes, the technology developed by us that is based on the licensed software.
In 2018, we migrated our cloud-based system from a third-party system to our CHP Insight® system developed in-house to access and store operating data on the cloud and provide user interface features specific to CHP operation as well as sophisticated data analysis tools.
In 2018, we migrated our cloud-based system from a third-party system to our CHP Insight® system developed in-house to access and store operating data on the cloud and provide user interface features specific to CHP operation as well as sophisticated data analysis tools. 6 TECOGEN INC.
The development of our business could be adversely affected by any slowdown or reversal in the utility deregulation process or by difficulties in negotiating back-up power supply agreements with electric providers in the areas where we seek to do business. 12 TECOGEN INC.
The development of our business could be adversely affected by any slowdown or reversal in the utility deregulation process or by difficulties in negotiating back-up power supply agreements with electric providers in the areas where we seek to do business.
Engine-driven chillers are often used as replacements for aging electric chillers because they both occupy similar amounts of floor space and require similar maintenance schedules. This is also the case with refrigeration compressors. 7 TECOGEN INC.
Engine-driven chillers are often used as replacements for aging electric chillers because they both occupy similar amounts of floor space and require similar maintenance schedules. This is also the case with refrigeration compressors.
Our Energy Production segment sells energy in the form of electricity, heat, hot water and cooling to our customers under long-term sales agreements which represented 9.3% of our consolidated revenues for the years ended December 31, 2024 and 2023. See Note 18. "Segments" of the Notes to the Consolidated Financial Statements.
Our Energy Production segment sells energy in the form of electricity, heat, hot water and cooling to our customers under long-term sales agreements which represented 4.9% and 9.3% of our consolidated revenues for the years ended December 31, 2025 and 2024, respectively. See Note 18. "Segments" of the Notes to the Consolidated Financial Statements.
During the years ended December 31, 2024 and December 31, 2023, no customer accounted for more than 10% of our revenues. We typically sell our chiller products through our manufacturing representatives with assistance from our internal sales team. Our combined heat and power products are typically sold direct to end customers by our internal sales team.
During the years ended December 31, 2025 and December 31, 2024, one customer accounted for more than 10% of our revenues. We typically sell our chiller products through our manufacturing representatives with assistance from our internal sales team. Our combined heat and power products are typically sold direct to end customers by our internal sales team.
We believe that the primary opportunity for our cogeneration and chiller DG systems are in regions of the U.S. where commercial electricity rates range between $0.14 and $0.28 per kW hour, or kWh, which are predominantly in the Northeast, Mid-Atlantic, Florida, California, and parts of Canada.
We believe that the primary opportunity for our cogeneration and chiller DG systems are in regions of the U.S. where commercial electricity rates range between $0.15 and $0.31 per kW hour, or kWh, which are predominantly in the Northeast, Mid-Atlantic, Florida, California, and parts of Canada.
The higher energy prices for natural gas as a result of the war may affect the performance of our Energy Production Segment and the cost differential between grid generated energy and natural gas sourced energy using our cogeneration equipment.
The higher energy prices for natural gas as a result of these wars may affect the performance of our Energy Production Segment and the cost differential between grid generated energy and natural gas sourced energy using our cogeneration equipment.
Sales & Distribution Our products are sold directly to end-users by our sales team and by established independent sales agents and representatives. We have entered into agreements with manufacturers' representatives and outside sales representatives who are 6 TECOGEN INC. compensated on a commission basis for designated territories and product lines.
Sales & Distribution Our products and services are sold directly to end-users by our sales team and by established independent sales agents and representatives. We have entered into agreements with manufacturers' representatives and outside sales representatives who are compensated on a commission basis for designated territories and product lines.
We believe that our target market for DG, users of up to 1 MW, has been barely penetrated and that the reduced reliability of the utility grid and increasing cost pressures experienced by energy users will drive our near-term growth and penetration of this market.
We believe that our target market for distributed power generation for users of up to 1 MW, has been barely penetrated and that the reduced reliability of the utility grid and increasing cost pressures experienced by energy users will drive our near-term growth and penetration of this market.
Competition The markets for our products are highly competitive, although we believe that we offer customers a suite of premier best-in-class clean energy and thermal solutions.
Competition The markets for our products are highly competitive, although we believe that we offer customers a suite of premier best-in-class clean energy and thermal solutions. 8 TECOGEN INC.
Hatsopoulos to extend the maturity dates for both promissory notes to July 31, 2026. We also agreed to permit Mr. Hatsopoulos to either receive repayment of his notes in cash, or, at his discretion, convert the balances of one or both of the promissory notes into shares of our common stock.
Hatsopoulos to extend the maturity dates for both promissory notes to July 31, 2026. We also agreed to permit Mr. Hatsopoulos to either receive repayment of his notes in cash, or at his discretion, convert the balance(s) due of one or both of the promissory notes into shares of our common stock.
The foregoing description of the Vertiv Agreement is not complete and is qualified in its entirety by reference to the full text thereof, a copy of which was filed as Exhibit 99.01 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on February 28, 2025, and incorporated herein by reference as Exhibit 10.30 hereto.
The foregoing description of the Vertiv Agreement is not complete and is qualified in its entirety by reference to the full text thereof, a copy of which was filed as Exhibit 99.01 to our Current Report on Form 8-K filed with the Securities and Exchange Commission ("SEC") on February 28, 2025.
The software allows our products to be integrated as a Microgrid, where multiple InVerde e+ units can be seamlessly isolated from the main utility grid in the event of an outage and re-connected to it afterward. We expect that our patents and license for Microgrid software will deter others from offering certain important functions. See "Business-Intellectual Property." 8 TECOGEN INC.
The software allows our products to be integrated as a Microgrid, where multiple InVerde e+ units can be seamlessly isolated from the main utility grid in the event of an outage and re-connected to it afterward. We expect that our patents and license for Microgrid software will deter others from offering certain important functions.
Energy Production Our wholly owned subsidiary, ADGE, distributes, owns and operates clean, on-site energy systems that produce electricity, hot water, heat, and cooling. ADGE owns the equipment that it installs at customers' facilities and sells the energy produced by these systems to customers on a long-term contractual basis. ADGE utilizes energy equipment supplied by Tecogen and other cogeneration manufacturers.
Energy Production Our wholly owned subsidiary, ADGE, distributes, owns and operates clean, on-site energy systems that produce electricity, hot water, heat, and cooling for our customers. ADGE owns the equipment that it installs at customers' facilities and sells the energy produced by these systems to customers on a long-term contractual basis.
The hybrid-drive air-cooled chiller will take simultaneous inputs from the electrical grid and the natural gas engine so that it can operate with the lowest cost and/or greenhouse gas footprint at any time based on changing conditions. We anticipate initial delivery of our hybrid air cooled chiller in the first half of fiscal 2025.
The hybrid-drive air-cooled chiller will take simultaneous inputs from the electrical grid and the natural gas engine so that it can operate with the lowest cost and/or greenhouse gas footprint at any time based on changing conditions. We began deliveries of our hybrid air cooled chiller in the first half of fiscal 2025. 9 TECOGEN INC.
Government & Regulation Several kinds of federal, state and local government regulations affect our products and services, including but not exclusive to: • product safety certifications and interconnection requirements; 11 TECOGEN INC. • air pollution regulations which govern the emissions allowed in engine exhaust; • state and federal incentives for CHP technology; • various local building and permitting codes and third-party certifications; • electric utility pricing and related regulations; and • federal and state laws regarding the legalization of cannabis for medicinal and recreational use.
"Properties" Government Regulation Our business operations are subject to various federal, state and local government regulations which affect our products and services, including but not exclusive to: • product safety certifications and interconnection requirements; • air pollution regulations which govern the emissions allowed in engine exhaust; • state and federal incentives for CHP technology; • various local building and permitting codes and third-party certifications; • electric utility pricing and related regulations; and • federal and state laws regarding the legalization of cannabis for medicinal and recreational use.
M ultiple unit sites dramatically reduce the likelihood of a full system outage that would result in a high demand charge, giving customers with multiple units a greater probability of capturing peak demand savings. Our products are sold directly to customers by our in-house marketing team and by established independent sales agents and representatives. Ultera Low Emissions Technology .
Multiple unit sites dramatically reduce the likelihood of a full system outage that would result in a high demand charge, giving customers with multiple units a greater probability of capturing peak demand savings. Our products are sold directly to customers by our in-house marketing team and by established independent sales agents and representatives. 5 TECOGEN INC.
In the event of such a conversion, the number of shares we will be required to issue will be determined by dividing the balance(s) due under the promissory note(s) by the average closing price per share of our shares during the thirty-day period prior to the date of conversion.
In the event of such a conversion, the number of shares we were required to issue is determined by dividing the balance(s) due under the promissory note(s) by the average closing price per share of our shares during the thirty-day period prior to the date of conversion. Both of the promissory notes with Mr.
The political environment following the 2024 elections in the United States may have a material impact on anti-fossil fuel sentiment and the regulatory environment that may be favorable to our business. We have also diversified our sales activities to reduce our reliance on markets like New York City.
The political environment following the 2024 elections in the United States has had a material impact on anti-fossil fuel sentiment and the regulatory environment that is more favorable to our business. We have also diversified our sales activities to reduce our reliance on markets like New York City. 3 TECOGEN INC.
Many of the components used in the manufacture of our highly-efficient clean energy equipment are readily fabricated from commonly available raw materials or are standard available parts sourced from multiple suppliers. We believe that adequate supplies exist to meet our near to medium term manufacturing needs.
Sourcing & Manufacturing We are focused on continuously strengthening our manufacturing processes and increasing operational efficiencies. Many of the components used in the manufacture of our highly-efficient clean energy equipment are readily fabricated from commonly available raw materials or are standard available parts sourced from multiple suppliers. We believe that adequate supplies exist to meet our near-to-medium-term manufacturing needs.
We introduced the Tecochill Hybrid-Drive Air-Cooled Chiller at the AHR Expo in February 2023 and received an order on February 8, 2024 for three hybrid-drive air-cooled chillers for a utility company in Florida.
We introduced the Tecochill Hybrid-Drive Air-Cooled Chiller at the AHR Expo in February 2023 and received an order on February 8, 2024 for three hybrid-drive air-cooled chillers for a utility company in Florida which were shipped in the second and third quarter of 2025.
Our cogeneration systems produce electricity from an internal combustion engine driving a generator, while the heat from the engine and exhaust is recovered and typically used to produce heat and hot water for use on-site.
ADGE utilizes energy equipment supplied by Tecogen and other cogeneration manufacturers. Our cogeneration systems produce electricity from an internal combustion engine driving a generator, while the heat from the engine and exhaust is recovered and typically used to produce heat and hot water for use on-site.
Although we have some exposure to Chinese and European suppliers, we do not anticipate any increases in tariffs to materially affect our operations. 3 TECOGEN INC. Related Party Notes On October 9, 2023, we entered into note subscription agreements with each of John N. Hatsopoulos and Earl R.
Although we have some exposure to Chinese and European suppliers, we do not anticipate any increases in tariffs to materially affect our operations. Related Party Notes On October 9, 2023, we entered into note subscription agreements with each of John N. Hatsopoulos and Earl R. Lewis, III, each a director and shareholder of the Company, pursuant to which Mr.
(“ADGE”) which sells energy in the form of electricity, heat, hot water and cooling to customers under long-term energy sales agreements (typically with terms of 10 to 15 years).
Our Energy Production business is conducted by our subsidiary ADGE which sells energy in the form of electricity, heat, hot water and cooling to customers under long-term energy sales agreements (typically with terms of 10 to 15 years).
Eleven of our New Jersey service employees are represented by a collective bargaining agreement which expires on December 31, 2025 and thereafter renews annually unless terminated by either party by written notice within sixty days prior to the expiration date.
Thirteen of our New Jersey service employees are represented by a collective bargaining agreement which expires on December 31, 2026 and thereafter renews annually unless terminated by either party by written notice within sixty days prior to the expiration date. Employee Health and Safety Employee health and safety continues to be a priority in every aspect of our business.
See Note 11."Related Party Notes" of the Notes to the Consolidated Financial Statements. Overview of Our Business Our operations are comprised of three business segments. Our Products segment designs, manufactures and sells industrial and commercial cogeneration systems. Our Services segment provides O&M services for our products under long term service contracts.
Overview of Our Business Our operations are comprised of three business segments. Our Products segment designs, manufactures and sells industrial and commercial cogeneration systems and chillers. Our Services segment provides O&M services for our products under long term service contracts.
We consider our patents and licensed intellectual property to be important in the operation of our business. The expiration, termination, or invalidity of one or more of these patents may have a material adverse effect on our business.
We consider our patents and licensed intellectual property to be important in the operation of our business. The expiration, termination, or invalidity of one or more of these patents may have a material adverse effect on our business. Copyrights Our control software is protected by copyright laws or through an exclusive license agreement.
Employees As of December 31, 2024, we employed 91 full-time employees and 1 part-time employee, including 5 sales and marketing personnel, 61 service personnel, 17 manufacturing personnel and 9 finance and administrative personnel.
Employees As of December 31, 2025, we employed 119 full-time employees and 1 part-time employee, including 4 sales and marketing personnel, 83 service personnel, 24 manufacturing personnel and 9 finance and administrative personnel.
ADGE and ADGNY distribute, own, and operate clean, on-site energy systems that produce electricity, hot water, heat and cooling. ADGE and ADGNY own the equipment that is installed at customers' facilities and sell the energy produced to the customer on a long-term contractual basis.
ADGE and ADGNY own the equipment that is installed at customers' facilities and sell the energy produced to the customer on a long-term contractual basis.
Recent Developments Vertiv Sales and Marketing Agreement - Data Center Cooling Market On February 28, 2025, we entered into a Sales and Marketing Agreement with Vertiv Corporation (“Vertiv”) relating to sales of Tecogen DTx chillers for data center cooling applications (the “Vertiv Agreement”).
On May 6, 2025, our common stock began trading on the NYSE American under our current symbol "TGEN." Vertiv Sales and Marketing Agreement - Data Center Cooling Market On February 28, 2025, we entered into a Sales and Marketing Agreement with Vertiv Corporation (“Vertiv”) relating to sales of Tecogen DTx chillers for data center cooling applications (“Vertiv Agreement”).
Hatsopoulos and issued a one-year promissory note with interest accruing at 5.12% per annum. On July 23, 2024, we borrowed an additional $500,000 from Mr. Hatsopoulos, and executed a one-year promissory note with interest accruing at 5.06% per annum. On March 21, 2024, John H.
On July 23, 2024, we borrowed an additional $500,000 from Mr. Hatsopoulos, and issued a one-year promissory note with interest accruing at 5.06% per annum. On March 21, 2024, we extended the maturity date of the promissory note dated October 10, 2023 by one year, making the maturity date October 10, 2025.
Management believes that this chiller will address a significant market segment that is currently not addressed by our existing Tecochill product. For the years ended December 31, 2024 and 2023, we spent $961,837 and $840,011, respectively, on research and development activities. 9 TECOGEN INC.
Management believes that this chiller will address a significant market segment that is currently not addressed by our existing Tecochill product. For the years ended December 31, 2025 and 2024, we spent $1,166,744 and $961,837, respectively, on research and development activities. Intellectual Property As of December 31, 2025 we hold the following United States patents for our technologies.
The improved performance, consisting of up to 90% reductions in NMOG and CO results from increased oxidation of NMOG and CO due to a lower temperature environment in the second stage catalyst. • 10,774,724: “Dual Stage Internal Combustion Engine Aftertreatment System Using Exhaust Gas Intercooling and Charger Driven Air Ejector.” This patent, granted in September 2020, relates to the use of turbo compressors and exhaust gas intercoolers in turbocharged engines to reduce the complexity and cost of Ultera emissions reduction systems. • 9,995,195: “Emissions control systems and methods for vehicles.” This patent, granted in June 2018, is a method for vehicle cold start to enhance the removal of CO and hydrocarbons emissions, which are extremely problematic for cold engines.
The improved performance, consisting of up to 90% reductions 10 TECOGEN INC. in NMOG and CO results from increased oxidation of NMOG and CO due to a lower temperature environment in the second stage catalyst. • 9,995,195: “Emissions control systems and methods for vehicles.” This patent, granted in June 2018, is a method for vehicle cold start to enhance the removal of CO and hydrocarbons emissions, which are extremely problematic for cold engines.
Patent 7,687,937, and titled “Control of Small Distributed Energy Resources”, granted in 2010 and expires on July 26, 2027. Our exclusive rights are for engine-driven systems utilizing natural gas or diesel fuel in the application of power generation where the per-unit output is less than 500 kW.
Our exclusive rights are for engine-driven systems utilizing natural gas or diesel fuel in the application of power generation where the per-unit output is less than 500 kW.
Our liquidity and cash flows are discussed in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations." Available Information Our internet website address is http://www.tecogen.com.
Based on management's analysis, we believe that our working capital and cash flows from operations will be sufficient to fund our operations over the next twelve months. Our liquidity and cash flows are discussed in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations." Available Information Our internet website address is http://www.tecogen.com.
We strive to maintain product service contracts for many years and work to maintain the integrity and performance of our equipment. Our products have a long history of reliable operation.
Customers are therefore invoiced in level, predictable amounts without unforeseen add-ons for unscheduled repairs or engine replacements. We strive to maintain product service contracts for many years and work to maintain the integrity and performance of our equipment. Our products have a long history of reliable operation.
As of December 31, 2024, our Services business provided maintenance services for approximately 215 chillers and 1,046 cogeneration units pursuant to maintenance services agreements. Energy Production. Our Energy Production business is conducted by our subsidiary American DG Energy Inc.
As of December 31, 2025, our Services business provided maintenance services for approximately 244 chillers and 764 cogeneration units pursuant to maintenance services agreements. Energy Production.
We also understand the environment of trust and fairness that exists when information is openly shared. We also continue to invest in products and services to meet the health and safety needs of our customers and communities. Talent Acquisition and Development Our values are integral to our employment process and serve as guideposts for leadership.
We also continue to invest in products and services to meet the health and safety needs of our customers and communities. Talent Acquisition and Development Our values are integral to our employment process and serve as guideposts for leadership. The ultimate goal is straightforward: find great people, ask them to join, and give them a reason to stay.
These registered and pending trademarks include Tecogen, Tecochill, Tecopower, Ultera, InVerde, InVerde e+ and the associated logos. We will continue to trademark our product names and symbols. We rely on treatment of our technology as trade secrets through confidentiality agreements, which our employees and vendors are required to sign.
Trademarks We have registered the brand names of our equipment and logos used on our equipment. These registered and pending trademarks include Tecogen, Tecochill, Tecopower, Ultera, InVerde, InVerde e+ and the associated logos. We will continue to trademark our product names and symbols.
Also, we rely on non-disclosure agreements with others that have or may have access to confidential information to protect our trade secrets and proprietary knowledge. Sourcing & Manufacturing We are focused on continuously strengthening our manufacturing processes and increasing operational efficiencies.
We rely on treatment of our technology as trade secrets through confidentiality agreements, which our employees and vendors are required to sign. Also, we rely on non-disclosure agreements with others that have or may have access to confidential information to protect our trade secrets and proprietary knowledge.
As of December 31, 2024, ADGE owned 25 operational energy systems, representing an aggregate of approximately 1,195 kilowatts of electrical capacity from cogeneration units and 850 cooling ton capacity from chillers. 1 TECOGEN INC.
As of December 31, 2025, ADGE owned 14 operational energy systems, representing an aggregate of approximately 1,045 kilowatts of electrical capacity from cogeneration units and 850 cooling ton capacity from chillers. Our Growth Strategies Artificial Intelligence Data Centers We believe artificial intelligence data centers represent a significant growth opportunity for Tecogen.
Lewis, III, each a director and shareholder of Tecogen, pursuant to which Mr. Hatsopoulos agreed to provide financing to us of up to $1 million, and Mr. Lewis agreed to provide financing to us of $500,000, and at his discretion an additional $500,000. On October 10, 2023, we borrowed $500,000 from Mr.
Hatsopoulos agreed to provide financing to us of up to $1,000,000, and Mr. Lewis agreed to provide financing to us of $500,000, and potentially, an additional $500,000 at his discretion. On October 10, 2023, we borrowed $500,000 from Mr. Hatsopoulos and issued him a one-year promissory note with interest accruing at 5.12% per annum.
Hatsopoulos amended the terms of the promissory note, dated October 10, 2023, extending the maturity date by one year, making the maturity date October 10, 2025. On September 18, 2024, we borrowed $500,000 from Mr. Lewis and issued a one-year promissory note with interest accruing at 4.57% per annum. On January 14, 2025 we agreed to permit Mr.
On September 18, 2024, we borrowed $500,000 from Mr. Lewis and issued him a one-year promissory note with interest accruing at 4.57% per annum. On January 14, 2025, we agreed to permit Mr. Lewis to either receive repayment of his note in cash or, at his discretion, convert the balance of the promissory note into shares of our common stock.
Our patents expire between 2025 and 2042. 10 TECOGEN INC. In addition, we have licensed specific rights to Microgrid software algorithms developed by University of Wisconsin researchers for which we pay royalties to the assignee, The Wisconsin Alumni Research Foundation (WARF). Pursuant to U.S.
In addition, we have licensed specific rights to Microgrid software algorithms developed by University of Wisconsin researchers for which we pay royalties to the assignee, The Wisconsin Alumni Research Foundation (WARF). Pursuant to U.S. Patent 7,687,937, titled “Control of Small Distributed Energy Resources”, granted in 2010 and expires on July 26, 2027.
Using the inverter design from our InVerde e+ cogeneration module, the system can simultaneously take two inputs, one from the grid or a renewable energy source and one from our natural gas engine. This allows a customer to seek the optimum blend of operational cost savings and greenhouse gas benefits while providing added resiliency from two power sources.
This allows a customer to seek the optimum blend of operational cost savings and greenhouse gas benefits while providing added resiliency from two power sources.
We were incorporated in the State of Delaware on September 15, 2000. We have wholly-owned subsidiaries American DG Energy, Inc. ("ADGE") and Tecogen CHP Solutions, Inc., and we own a 51% interest in American DG New York, LLC ("ADGNY"), a joint venture.
We have two wholly-owned subsidiaries American DG Energy, Inc. ("ADGE") and Tecogen CHP Solutions, Inc.. In addition, we own a 51% interest in American DG New York, LLC ("ADGNY"), a joint venture. ADGE and ADGNY distribute, own, and operate clean, on-site energy systems that produce electricity, hot water, heat and cooling.
We have made, and will continue to make, the necessary research and development and capital expenditures to comply with these emissions standards. Human Capital Resources We believe our success in delivering energy efficient, ultra clean cogeneration systems, chillers and energy production services relies on our culture, values, and the creativity and commitment of our people.
Human Capital Resources We believe our success in delivering energy efficient, ultra clean cogeneration systems, chillers and energy production services relies on our culture, values, and the creativity and commitment of our people. We strive to maintain healthy, safe, and secure working conditions and a workplace where our employees are treated with respect and dignity.
Our InVerde product can provide on-site power generation which allows customers to eliminate long lead times associated with electrical switch gear and bridge any short fall in power from the utility. Residual Impacts of Covid-19 Pandemic Supply chains were adversely impacted during Covid, resulting in significant delays or lack of availability of critical components such as engines.
Our InVerde product can provide on-site power generation which allows customers to eliminate long lead times associated with electrical switch gear and bridge any short fall in power from the utility. Tecochill Hybrid-Drive Air-Cooled Chiller Development During the third quarter of 2021, we began development of the Tecochill Hybrid-Drive Air-Cooled Chiller.
Most of our service revenue is in the form of annual service contracts which typically provide all-inclusive “bumper-to-bumper” coverage, with service fees based on equipment operating hours for the relevant period. Customers are therefore invoiced in level, predictable amounts without unforeseen add-ons for unscheduled repairs or engine replacements.
These centers are staffed by our full-time technicians, working from local leased facilities which provide office and warehouse space for inventory. Most of our service revenue is in the form of annual service contracts which typically provide all-inclusive “bumper-to-bumper” coverage, with service fees based on equipment operating hours for the relevant period.
We are striving to create employee experience that offers opportunity for personal and professional growth, and enables work-life balance that aligns with our core values. Employee Health and Safety Employee health and safety continues to be a priority in every aspect of our business.
Our vision is to create an inclusive, diverse and authentic community that inspires collaboration, integrity, engagement, and innovation. We are striving to create employee experience that offers opportunity for personal and professional growth, and enables work-life balance that aligns with our core values. 13 TECOGEN INC.
We provide service maintenance contracts, parts sales, and installation for our products through a network of eleven well-established field service centers in California, the Midwest, the Northeast, the Southeast and in Toronto, Canada. These centers are staffed by our full-time technicians, working from local leased facilities which provide office and warehouse space 5 TECOGEN INC. for inventory.
To date we have shipped over 3,200 units, some of which have been operating for almost 35 years. We provide maintenance service contracts, parts sales, and installation for our products through a network of eleven well-established field service centers in California, the Midwest, the Northeast, the Southeast and in Toronto, Canada.
We have an on-going focus on developing and implementing new systems to simplify our manufacturing processes, product sourcing methods, and our supply chain.
However, certain of the components used in the manufacture of our engine driven power inverter systems contain rare-earth minerals and are currently sole-sourced from a supplier in China. We have an on-going focus on developing and implementing new systems to simplify our manufacturing processes, product sourcing methods, and our supply chain.
"Related Party Notes") to finance our facilities move to North Billerica, Massachusetts, continued development of the hybrid-drive air-cooled chiller product, and marketing expenses associated with identifying opportunities in the data center market. Based on management's analysis, we believe that cash flows from operations will be sufficient to fund operations over the next twelve months.
"Related Party Notes") which were used to finance our facilities' move to North Billerica, Massachusetts, continued development of the hybrid-drive air-cooled chiller product, and marketing expenses associated with identifying opportunities in the data center market. The related party notes were repaid in full or converted to shares of our common stock in the year ended December 31, 2025.
In March 2024, the US Patent and Trademark Office granted patent 11,936,327: "Hybrid Power System With Electric Generator and Auxiliary Power Source." Controlled Environment Agriculture On July 20, 2022, we announced our intention to focus on opportunities for the use of our cogeneration equipment in low carbon Controlled Environment Agriculture ("CEA").
In March 2024, the US Patent and Trademark Office granted patent 11,936,327: "Hybrid Power System With Electric Generator and Auxiliary Power Source." Impact of Geopolitical Tensions We have no operations or customers in Russia, the Ukraine, or in the Middle East, including the recent military actions in Iran.
Intellectual Property Currently, we hold thirteen United States patents for our technologies: • 10,774,720: “NOx Reduction Without Urea Using a Dual-Stage Catalyst System with Intercooling in Vehicle Gasoline Engines.” This patent, granted in September 2020, improves the removal of Non-Methane Organic Gases (NMOG) and Carbon Monoxide (CO) from vehicle emissions.
The patents expire between 2026 and 2042: • 11,936,327: "Hybrid Power System With Electric Generator and Auxiliary Power Source." This patent, granted in March 2024, pertains to joining two power sources to optimize power use from the grid or another source by way of a proprietary DC-DC voltage converter, inverter and controller circuits. • 10,774,724: “Dual Stage Internal Combustion Engine Aftertreatment System Using Exhaust Gas Intercooling and Charger Driven Air Ejector.” This patent, granted in September 2020, relates to the use of turbo compressors and exhaust gas intercoolers in turbocharged engines to reduce the complexity and cost of Ultera emissions reduction systems. • 10,774,720: “NOx Reduction Without Urea Using a Dual-Stage Catalyst System with Intercooling in Vehicle Gasoline Engines.” This patent, granted in September 2020, improves the removal of Non-Methane Organic Gases (NMOG) and Carbon Monoxide (CO) from vehicle emissions.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSignificant increases in federal, state or municipal restrictions on emissions of carbon dioxide that may be imposed on gas-driven cogeneration and chillers could adversely affect demand for our product. Our inability to respond to such changes could adversely impact the demand for our products and our business, financial condition, results of operations or cash flows.
Biggest changeLaws enacted that could impact demand for the products we sell could adversely affect our business, financial condition, results of operations and cash flows. Significant increases in federal, state or municipal restrictions on emissions of carbon dioxide that may be imposed on gas-driven cogeneration and chillers could adversely affect demand for our product.
The loss of any one or more of our major customers or our inability to collect on outstanding accounts receivable from one or more of these customers could have a material adverse effect on our business and financial condition.
The loss of any one or more of our major customers or our inability to collect outstanding accounts receivable from one or more of these customers could have a material adverse effect on our business and financial condition.
Among other things, our certificate of incorporation and bylaws includes provisions that: • permit the board to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquire • prohibit cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates • limit the liability of, and provide for the indemnification of, our directors and officers • permit the board to amend our bylaws, which may allow the board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt • require a supermajority vote of stockholders to amend certain provisions of our certificate of incorporation and a supermajority vote of stockholders in order to amend our bylaws • limit our ability to engage in business combinations with certain interested stockholders without certain approvals • permit only the board, the chief executive officer of the company or the chairperson of the board to call special stockholder meetings; • mandate advance notice procedures with which stockholders must comply in order to nominate candidates to the board or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in the board and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company, and • provide that directors may be removed only for cause and only by a supermajority vote of our stockholders These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our board or management.
Among other things, our certificate of incorporation bylaws, or DGCL include provisions that: • permit the board to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquire • prohibit cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates • limit the liability of, and provide for the indemnification of, our directors and officers • permit the board to amend our bylaws, which may allow the board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt • require a supermajority vote of stockholders to amend certain provisions of our certificate of incorporation and a supermajority vote of stockholders in order to amend our bylaws • limit our ability to engage in business combinations with certain interested stockholders without certain approvals • permit only the board, the chief executive officer of the company or the chairperson of the board to call special stockholder meetings; • mandate advance notice procedures with which stockholders must comply in order to nominate candidates to the board or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in the board and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company, and • provide that directors may be removed only for cause and only by a supermajority vote of our stockholders These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our board or management.
If we fail to establish and maintain effective internal control over financial reporting and disclosure controls and procedures, we may not be able to accurately report our financial results or report them in a timely manner. Investor confidence in the price of our stock may be adversely affected if we are unable to comply with such rules and regulations.
If we fail to establish and maintain effective disclosure controls and procedures and internal controls over financial reporting, we may not be able to accurately report our financial results or report them in a timely manner. Investor confidence in the price of our stock may be adversely affected if we are unable to comply with such rules and regulations.
The market price of shares of our common stock could be subject to wide fluctuations in response to many risk factors listed in this section, and others beyond our control, including: • results and timing of our product development; • results of the development of our competitors’ products; • regulatory actions with respect to our products or our competitors’ products; • actual or anticipated fluctuations in our financial condition and operating results; • actual or anticipated changes in our growth rate relative to our competitors; 21 TECOGEN INC. • actual or anticipated fluctuations in our competitors’ operating results or changes in their growth rate; • competition from existing products or new products that may emerge; • announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations, or capital commitments; • issuance of new or updated research or reports by securities analysts; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; • additions or departures of key management or personnel; • disputes or other developments related to proprietary rights, including patents, litigation matters, and our ability to obtain, maintain, defend or enforce proprietary rights relating to our products and technologies; • announcement or expectation of additional financing efforts; • sales of our shares by us, our insiders, or our other stockholders; • political events, war, terrorism, public health issues, natural disasters and other circumstances; • lawsuits threatened or filed against us; and • general economic and market conditions.
The market price of shares of our common stock could be subject to wide fluctuations in response to many risk factors listed in this section, and others beyond our control, including: • results and timing of our product development; • results of the development of our competitors’ products; • regulatory actions with respect to our products or our competitors’ products; • actual or anticipated fluctuations in our financial condition and operating results; • actual or anticipated changes in our growth rate relative to our competitors; • actual or anticipated fluctuations in our competitors’ operating results or changes in their growth rate; • competition from existing products or new products that may emerge; • announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations, or capital commitments; • issuance of new or updated research or reports by securities analysts; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; • additions or departures of key management or personnel; • disputes or other developments related to proprietary rights, including patents, litigation matters, and our ability to obtain, maintain, defend or enforce proprietary rights relating to our products and technologies; • announcement or expectation of additional financing efforts; • sales of our shares by us, our insiders, or our other stockholders; • political events, war, terrorism, public health issues, natural disasters and other circumstances; • lawsuits threatened or filed against us; and • general economic and market conditions.
In completing such reporting, we disclose, as appropriate, any significant change in our internal control over financial reporting that occurred during our most recent fiscal period that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
In completing such reporting, we will disclose, as appropriate, any significant change in our internal control over financial reporting that occurred during our most recent fiscal period that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
These provisions could also limit the price that investors might be willing to pay in the future for shares of common stock and therefore depress the trading price.
These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock and therefore depress the trading price.
If we identify further deficiencies in our internal control over financial reporting in the future or if we are unable to comply with the demands that will be placed upon us as a public company, including the requirements of Section 404 of the Sarbanes-Oxley Act, in a timely manner, we may be unable to accurately report our financial results, or report them within the timeframes required by the SEC.
If we identify further deficiencies in our internal control over financial reporting in the future or if we are unable to comply with the demands placed upon us as a public company, including the requirements of Section 404 of the Sarbanes-Oxley Act, in a timely manner, we may be unable to accurately report our financial results, or report them within the timeframes required by the SEC.
The fair value of the Aegis maintenance service contracts based on a discounted cash flow analysis exceeded the carrying value of the assets, and we did not recognize goodwill impairment relating to our services segment for the year ended December 31, 2024. Increased costs of labor and employee health and welfare benefits may impact our results of operations.
The fair value of the Aegis maintenance service contracts based on a discounted cash flow analysis exceeded the carrying value of the assets, and we did not recognize goodwill impairment relating to our services segment for the year ended December 31, 2025. Increased costs of labor and employee health and welfare benefits may impact our results of operations.
Despite our implementation of security measures, there are numerous and evolving risks to cybersecurity and privacy, including risks originating from intentional acts of criminal hackers, nation states and competitors, intentional and unintentional acts or omissions of customers, vendors, contractors, employees and other third parties that may result in damage, breakdown, or interruption from computer viruses, ransomware, malware, phishing, social engineering, fraudulent inducement, electronic fraud, wire fraud, human error or malfeasance, unauthorized access, natural disasters, and telecommunications and electrical failures.
Despite our implementation of security measures, there are numerous and evolving risks to cybersecurity and privacy, including risks originating from intentional acts of criminal hackers, nation states and competitors, intentional and unintentional acts or omissions of customers, vendors, contractors, employees and other third parties that may result in damage, 25 TECOGEN INC. breakdown, or interruption from computer viruses, ransomware, malware, phishing, social engineering, fraudulent inducement, electronic fraud, wire fraud, human error or malfeasance, unauthorized access, natural disasters, and telecommunications and electrical failures.
Our future performance depends on the continued contributions of our senior management, including our Chief Executive Officer and Chief Financial Officer, Abinand Rangesh, our President and Chief Operating Officer, Robert Panora, and other key employees, to execute on our business plan, develop new products and services, source new customers, and enter into new partnerships.
Our future performance depends on the continued contributions of our senior management, including our Chief Executive Officer, Abinand Rangesh, our President and Chief Operating Officer, Robert Panora, our Chief Financial Officer, Roger Deschenes, and other key employees, to execute on our business plan, develop new products and services, source new customers, and enter into new partnerships.
These attacks seek to compromise the confidentiality, integrity or availability of confidential information, or disrupt normal business operations, and could, among other things, impair our ability to attract and retain customers for our products and services, impact our stock price, materially damage commercial relationships, and expose us to litigation or government investigations, which could result in penalties, fines, or judgments against us.
These attacks seek to compromise the confidentiality, integrity or availability of confidential information, or disrupt normal business operations, and could, among other things, impair our ability to attract and retain customers for our products and services, impact our stock price, materially damage commercial relationships, and expose us to litigation or government investigations, 20 TECOGEN INC. which could result in penalties, fines, or judgments against us.
Our certifying officer designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under his supervision, to ensure that information required to be disclosed by us in the reports we file or submit under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified by the SEC’s rules and forms, and is made known to management (including the certifying officer) by others within the company, including our subsidiaries.
Our certifying officers designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under their supervision, to ensure that information required to be disclosed by us in the reports we file or submit under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified by the SEC’s rules and forms, and is made known to management (including the certifying officer) by others within the company, including our subsidiaries.
We cannot ensure that our existing intellectual property rights will not be invalidated, circumvented, challenged, or rendered unenforceable. 25 TECOGEN INC. Our competitors may successfully challenge the validity of our patents, design non-infringing products, or deliberately infringe our patents. There can be no assurance that other companies are not investigating or developing other similar technologies.
We cannot ensure that our existing intellectual property rights will not be invalidated, circumvented, challenged, or rendered unenforceable. Our competitors may successfully challenge the validity of our patents, design non-infringing products, or deliberately infringe our patents. There can be no assurance that other companies are not investigating or developing other similar technologies.
Our current controls and any new controls that we develop may also become inadequate because of changes in our business, and weaknesses in our disclosure controls and internal control over financial reporting may be discovered in the future.
Our current controls and any new controls that we develop may become inadequate because of changes in our business, and weaknesses in our disclosure controls and procedures and internal control over financial reporting may be discovered in the future.
Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could cause us to fail to meet our reporting obligations, result in a restatement of our financial statements for prior periods, undermine investor confidence in us, and adversely affect the trading price of our common stock. 24 TECOGEN INC.
Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could cause us to fail to meet our reporting obligations, result in a restatement of our financial statements for prior periods, undermine investor confidence in us, and adversely affect the trading price of our common stock.
As of the end of the period covered by our Annual Report on Form 10-K for the year ended December 31, 2024, our certifying officer performed an evaluation of our disclosure controls and procedures and concluded that our controls were not effective to provide reasonable assurance that information required to be disclosed by us in reports that we file under the Securities Exchange Act, is recorded, processed, summarized and reported when required.
As of the end of the period covered by our Annual Report on Form 10-K for the year ended December 31, 2025, our certifying officers performed an evaluation of our disclosure controls and procedures and concluded that our controls were not effective to provide reasonable assurance that information required to be disclosed by us in reports that we file under the Securities Exchange Act, is recorded, processed, summarized and reported when required.
Potential customers may perceive the risk of unpredictable swings in natural gas and electricity prices as a risk of investing in on-site CHP, and may decide not to purchase CHP products. We may make acquisitions or take other corporate strategic actions that could harm our financial performance.
Potential customers may perceive the risk of unpredictable swings in natural gas and electricity prices as a risk of investing in on-site CHP, and may decide not to purchase CHP products. 16 TECOGEN INC. We may make acquisitions or take other corporate strategic actions that could harm our financial performance.
Globally, attacks are expected to continue accelerating in both frequency and sophistication with increasing use by actors of tools and techniques that are designed to circumvent controls, avoid detection, and remove or obfuscate forensic evidence, all of which hinders our ability to identify, investigate and recover from incidents. 20 TECOGEN INC.
Globally, attacks are expected to continue accelerating in both frequency and sophistication with increasing use by actors of tools and techniques that are designed to circumvent controls, avoid detection, and remove or obfuscate forensic evidence, all of which hinders our ability to identify, investigate and recover from incidents.
The loss of the services of one or more of our senior management or other key employees for any reason could adversely affect our business, financial condition, and operating results, and require significant amounts of time, training, and resources to recruit suitable replacements and integrate them within our business and could affect our corporate culture.
The loss of the services of one or more of our senior management or other key employees for any reason could adversely affect our business, financial condition, and operating results, and require significant amounts of time, training, and resources to recruit suitable replacements and integrate them within our business and could affect our corporate culture. 18 TECOGEN INC.
There can 18 TECOGEN INC. be no assurance that we will successfully identify new product opportunities, develop and bring new or enhanced products to market in a timely manner, successfully lower costs, and achieve market acceptance of our products, or that products and technologies developed by others will not render our products or technologies obsolete or noncompetitive.
There can be no assurance that we will successfully identify new product opportunities, develop and bring new or enhanced products to market in a timely manner, successfully lower costs, and achieve market acceptance of our products, or that products and technologies developed by others will not render our products or technologies obsolete or noncompetitive.
We believe that these costs are a disproportionately larger percentage of our revenues than they are for many larger companies. In addition, the rules and regulations of the SEC impose significant requirements on public companies, including ongoing disclosure obligations and mandatory corporate governance practices.
We believe that these costs are a disproportionately larger percentage of our revenues than they are for many larger companies. In addition, the rules and regulations of the SEC impose significant requirements on public companies, including 22 TECOGEN INC. ongoing disclosure obligations and mandatory corporate governance practices.
Our revenue from energy billing may be adversely impacted by increases in the price of natural gas, reductions in utility rates for electrical power, weather conditions, or by an increase in remote work and study environments, all of which could reduce our revenue.
Our revenue from energy billing may be adversely impacted by increases in the price of natural gas, reductions in utility rates for electrical power, weather conditions, or by an increase in remote work and study environments, all of which could reduce our revenue. 17 TECOGEN INC.
Inadequate internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common stock and may require us to incur additional costs to improve our internal control system.
Inadequate internal controls could also 23 TECOGEN INC. cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common stock and may require us to incur additional costs to improve our internal control system.
Construction contracts involving our products may contain liquidated damages provisions resulting from failure to achieve agreed milestones relating to construction activity. Agreements relating to the sale of equipment or energy may include performance and other obligations that may result in payment obligations to customers.
Construction contracts involving our products may contain liquidated damages provisions resulting from failure to achieve agreed milestones relating to construction activity. Agreements relating to the sale of equipment or energy may include performance and other obligations that may result in payment obligations to customers. 19 TECOGEN INC.
In addition, as a public company we are required to document and test our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”) so that our management can certify as to the effectiveness of our internal control over financial reporting, which requires us to document and our internal control over financial reporting.
In addition, as a public company we are required to document and test our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”) so that our management can certify as to the effectiveness of our internal control over financial reporting.
These provisions could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the incumbent members of the board of directors or taking other corporate actions, including effecting changes in our management.
These provisions could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the incumbent members of the board of directors or taking other corporate actions, 24 TECOGEN INC. including effecting changes in our management.
However, the regional rates charged for both base load and peak electricity may decline periodically due to excess generating capacity or general economic recessions, and both the cost of natural gas and the cost of electricity for base load and peak load may be adversely affected by market forces and geopolitical disruptions such as Russian expansion into the Ukraine and political and other responses to such activity.
However, the regional rates charged for both base load and peak electricity may decline periodically due to excess generating capacity or general economic recessions, and both the cost of natural gas and the cost of electricity for base load and peak load may be adversely affected by market forces and geopolitical disruptions such as Russian expansion into the Ukraine and the conflict in the Middle East and political and other responses to such activity.
The loss of the services of key employees or an inability to attract, train and retain qualified and skilled employees, specifically engineering, operations, and business development personnel, could result in the loss of business or could otherwise negatively impact on our ability to operate and grow our business successfully. 26 TECOGEN INC.
The loss of the services of key employees or an inability to attract, train and retain qualified and skilled employees, specifically engineering, operations, and business development personnel, could result in the loss of business or could otherwise negatively impact on our ability to operate and grow our business successfully.
Regardless of whether we consummate any such transaction, the negotiation of a potential transaction could require us to incur significant costs, including 16 TECOGEN INC. as a result of professional fees and due diligence efforts, and cause diversion of management’s time and resources.
Regardless of whether we consummate any such transaction, the negotiation of a potential transaction could require us to incur significant costs, including as a result of professional fees and due diligence efforts, and cause diversion of management’s time and resources.
This could make our systems less desirable, thereby adversely affecting our revenue and other operating results. 19 TECOGEN INC. The reduction, elimination or expiration of government and economic incentives for applications of our equipment could reduce demand for our equipment and harm our business.
This could make our systems less desirable, thereby adversely affecting our revenue and other operating results. The reduction, elimination or expiration of government and economic incentives for applications of our equipment could reduce demand for our equipment and harm our business.
These broad market and industry fluctuations, as well as general economic, political, and market conditions such as recessions, interest rate changes, or international currency fluctuations may negatively impact the market price of shares of our common stock.
These broad market and industry fluctuations, as well as 21 TECOGEN INC. general economic, political, and market conditions such as recessions, interest rate changes, or international currency fluctuations may negatively impact the market price of shares of our common stock.
Securities litigation against us could result in substantial costs and damages and divert our management’s attention from other business concerns, which could seriously harm our business, results of operations, financial condition or cash flows.
Securities litigation against us could result in substantial costs and damages and divert our management’s attention from other business concerns, which could seriously harm our business, results of operations, financial condition or cash flows. 26 TECOGEN INC.
As of the end of the period covered by our Annual Report on Form 10-K for the year ended December 31, 2024, our principal executive officer and principal financial officer has concluded that there is a material weakness in our disclosure controls and procedures and our internal control over financial reporting.
As of the end of the period covered by our Annual Report on Form 10-K for the year ended December 31, 2025, our principal executive officer and principal financial officer have concluded that there is a material weakness in our disclosure controls and procedures and our internal control over financial reporting.
If we fail to achieve and maintain the adequacy of our disclosure control or internal control over financial reporting, there is a risk that we will not comply with all of the requirements imposed by Section 404.
If we fail to achieve and maintain the adequacy of our internal controls over financial reporting, there is a risk that we will not comply with all of the requirements imposed by Section 404.
As of the date of this report, our directors and executive officers and related parties directly, indirectly, and through trusts for the benefit of family members, collectively beneficially own approximately 43.0% of our issued and outstanding shares.
As of the date of this report, our directors and executive officers and related parties directly, indirectly, and through trusts for the benefit of family members, collectively beneficially own approximately 37.7% of our issued and outstanding shares.
The holders of outstanding options, warrants and convertible securities or derivatives, if any, have the opportunity to profit from a rise in the market price of our shares, if any, without assuming the risk of ownership, with a resulting dilution in the interests of other stockholders.
Also, the exercise of options may result in additional dilution. The holders of outstanding options, warrants and convertible securities or derivatives, if any, have the opportunity to profit from a rise in the market price of our shares, if any, without assuming the risk of ownership, with a resulting dilution in the interests of other stockholders.
Our provision for credit losses decreased to $146,010 in the year ended December 31, 2024, compared to $902,432 in the year ended December 31, 2023, due to the write down of certain install receivables which were deemed uncollectible in the year ended December 31, 2023.
Our provision for credit losses decreased to $62,958 in the year ended December 31, 2025, compared to $146,010 in the year ended December 31, 2024, due to the write down of certain install receivables which were deemed uncollectible in the year ended December 31, 2024.
Our provision for credit losses decreased to $146,010 in the year ended December 31, 2024, compared to $902,432 in the year ended December 31, 2023, due to the write down of certain install receivables which were deemed uncollectible in the year ended December 31, 2023.
Our provision for credit losses decreased to $62,958 in the year ended December 31, 2025, compared to $146,010 in the year ended December 31, 2024, due to the write down of certain install receivables which were deemed uncollectible in the year ended December 31, 2024.
We use third-party suppliers for components in all of our products. Our engines and generators required in our cogeneration products (other than the InVerde), and the compressor and vessel sets in our chillers, are all purchased from large multinational equipment manufacturers.
We are dependent on a limited number of third-party suppliers for the supply of key components for our products. We use third-party suppliers for components in all of our products. Our engines and generators required in our cogeneration products (other than the InVerde), and the compressor and vessel sets in our chillers, are all purchased from large multinational equipment manufacturers.
In addition, if we are unable to assert that our internal control over financial reporting is effective, investors may lose confidence in the accuracy and completeness of our financial reports, we may face restricted access to the capital markets, and our stock price may be adversely affected.
We also could become subject to regulatory action. In addition, if we are unable to assert that our internal controls over financial reporting are effective, investors may lose confidence in the accuracy and completeness of our financial reports, we may face restricted access to the capital markets, and our stock price may be adversely affected.
Our Chief Executive Officer and Chief Financial Officer (“certifying officer”) is responsible for establishing and maintaining our disclosure controls and procedures (as defined in Securities Exchange Act Rule 13a-15(e) and Rule15d-15(e)). 23 TECOGEN INC.
Our Chief Executive Officer and Chief Financial Officer (“certifying officers”) are responsible for establishing and maintaining our disclosure controls and procedures (as defined in Securities Exchange Act Rule 13a-15(e) and Rule15d-15(e)).
As a public reporting company under the Securities Exchange Act, we are subject to the rules and regulations established from time to time by the SEC and the PCAOB. These rules and regulations require, among other things, that we establish and periodically evaluate procedures with respect to our internal control over financial reporting.
As a public reporting company under the Securities Exchange Act, we are subject to the rules and regulations established from time to time by the SEC and the PCAOB. These rules and regulations require, among other things, that we maintain disclosure controls and procedures and internal controls over financial reporting.
Our allowance for credit losses increased $145,940 to $295,932 in the year ended December 31, 2024, compared to the year ended December 31, 2023. The amount of our backlog is subject to fluctuation due to our customers’ experiencing unexpected delays in financing, permitting, or modifications in specifications of the equipment.
Our allowance for credit losses increased $93,147 to $389,079 in the year ended December 31, 2025, compared to the year ended December 31, 2024. The amount of our backlog is subject to fluctuation due to our customers’ experiencing unexpected delays in financing, permitting, or modifications in specifications of the equipment.
Risks Relating to Our Business and Financial Condition Our operating history is characterized by losses and there can be no assurance we will be able to increase our sales and sustain profitability in the future. We have historically incurred annual net losses, including net loss of $4,760,238 in 2024.
Risks Relating to Our Business and Financial Condition Our operating history is characterized by net losses. There can be no assurance we will be able to increase our revenues and become profitable in the future. We have historically incurred net losses, including net loss of $8,248,755 in 2025 and a net loss of $4,760,238 in 2024.
We performed a goodwill impairment test at December 31, 2024, and determined that the carrying value of our energy production business assets exceeded the estimated fair value of the energy production business assets based on a discounted cash flow analysis, and we recognized goodwill impairment relating to our energy production segment of $217,295 for the year ended December 31, 2024.
We performed a goodwill impairment test at December 31, 2025, and determined that the carrying value of our energy production business assets exceeded the estimated fair value of the energy production business assets based on a discounted cash flow analysis, and we recognized goodwill and long-lived asset impairment relating to our energy production and product segments of $1,098,124 for the year ended December 31, 2025.
We are continuing to improve our internal control over financial reporting which may require us to hire additional accounting and financial personnel to implement such processes and controls and to provide additional training for our existing personnel.
We are continuing to improve our internal control over financial reporting which may require us to hire additional accounting and financial personnel to implement such processes and controls and to provide additional training to our existing personnel. We expect to incur costs related to implementing our internal compliance function to further improve our internal control environment.
The loss of any one or more of such customers or an inability to collect resulting accounts receivables could have a material adverse effect our business, financial condition and results of operations.
The loss of any one or more of such customers or an inability to collect resulting accounts receivables could have a material adverse effect our business, financial condition and results of operations. For the year ended December 31, 2025 one customer represented more than 10% of our revenue.
We have an accumulated deficit as of December 31, 2024 of $47,639,894 and working capital of $5,329,650. Our business is capital intensive and, because our products generally are built to order with customized configurations, the lead time to build and deliver a unit can be significant.
We have an accumulated deficit as of December 31, 2025 of $55,888,649 and working capital of $19,618,132. Our business is capital intensive and, because our products generally are built to order with customized configurations, the lead time to build and deliver a unit can be significant.
The sale of a substantial number of shares into the market, or even the perception that sales could occur, could depress the price of our common stock. Also, the exercise of options may result in additional dilution.
Our issuance of additional common stock, preferred stock, or convertible debt may result in dilution to the interests of shareholders and may also result in the reduction of our stock price. The sale of a substantial number of shares into the market, or even the perception that sales could occur, could depress the price of our common stock.
However, any such impairment would have an adverse effect on our results of operations. As of December 31, 2024, our goodwill was $2,346,566, and our intangible assets were $2,513,189.
However, any such impairment would have an adverse effect on our results of operations. As of December 31, 2025, our goodwill was $1,248,442, and our intangible assets were $2,146,503.
Our backlog as of December 31, 2024 was $12,336,248 compared to $7,388,145 as of December 31, 2023. Although we expect our customers to issue definitive purchase orders with respect to such backlog, there can be no assurance that such amounts will not be subject to modification in the event customers experience unexpected delays in obtaining permits, interconnection agreements, or financing.
Although we expect our customers to issue definitive purchase orders with respect to such backlog, there can be no 15 TECOGEN INC. assurance that such amounts will not be subject to modification in the event customers experience unexpected delays in obtaining permits, interconnection agreements, or financing.
For the years ended December 31, 2024 and December 31, 2023, no customer represented more than 10% of revenues for the respective years, and one customer represented 12% of the accounts receivable balance as of December 31, 2024, and one customer represented 14% of the accounts receivable balance as of December 31, 2023.
No customer represented more than 10% of our revenue for the year ended December 31, 2024. One customer represented 11% of our accounts receivable balance as of December 31, 2025, and one customer represented 14% of our accounts receivable balance as of December 31, 2024.
Our senior management and other personnel need to devote a substantial amount of time to ensure ongoing compliance with these requirements. Our common stock is currently quoted on the OTC Markets Group Inc.’s OTCQX Best Market tier.
Our senior management and other personnel need to devote a substantial amount of time to ensure ongoing compliance with these requirements. Our common stock is currently listed on the NYSE American LLC ("NYSE American") stock exchange.
Also, and as a result, relatively small trades in our stock could have a disproportionate effect on our stock price. As a public reporting company, we are subject to rules and regulations established from time to time by the SEC and Public Company Accounting Oversight Board (“PCAOB”) regarding our internal control over financial reporting.
As a public reporting company, we are subject to rules and regulations established from time to time by the SEC and Public Company Accounting Oversight Board (“PCAOB”) regarding our disclosure controls and internal controls over financial reporting.
In addition, increases in the cost of natural gas may increase the cost of power generation in comparison to the cost of power from the electric grid, and may result in decreased revenue and adversely affect our results of operation. 17 TECOGEN INC.
In addition, increases in the cost of natural gas may increase the cost of power generation in comparison to the cost of power from the electric grid, and may result in decreased revenue and adversely affect our results of operation. We may be affected by global climate change or by legal, regulatory, or market responses to such change.
Our financial condition and results of operations could suffer if there is an impairment of goodwill or intangible assets.
Our inability to respond to such changes could adversely impact the demand for our products and our business, financial condition, results of operations or cash flows. Our financial condition and results of operations could suffer if there is an impairment of goodwill or intangible assets.
We may be affected by global climate change or by legal, regulatory, or market responses to such change. The growing political and scientific sentiment is that global weather patterns are being influenced by increased levels of greenhouse gases in the earth’s atmosphere.
The growing political and scientific sentiment is that global weather patterns are being influenced by increased levels of greenhouse gases in the earth’s atmosphere. This growing sentiment and the concern over climate change have led to legislative and regulatory initiatives aimed at reducing greenhouse gas emissions which warm the earth’s atmosphere.
We have experienced order delays and deferrals for our products due to business closures or the inability to obtain government issued permits to conduct product installations.
We have experienced order delays and deferrals for our products due to business closures or the inability to obtain government issued permits to conduct product installations. Any of such events may result in customers modifying the equipment or the terms or timing of the expected installation, which may result in changes to the amount of backlog attributed to those projects.
Moreover, proposals that would impose mandatory requirements on greenhouse gas emissions continue to be considered by policy makers in the United States. Laws enacted that could impact demand for the products we sell could adversely affect our business, financial condition, results of operations and cash flows.
These warmer weather conditions could result in a decrease in demand for our products in general. Moreover, proposals that would impose mandatory requirements on greenhouse gas emissions continue to be considered by policy makers in the United States.
We have a small number of employees dealing with general controls over information technology, security and user access. This constitutes a material weakness in financial reporting. Any failure to implement effective internal controls could harm our operating results or cause us to fail to meet our reporting obligations.
Any failure to implement effective internal controls could harm our operating results or cause us to fail to meet our reporting obligations.
Lewis are willing to extend the terms of the loan or renegotiate the terms, or accept payment by conversion to our shares, of which there can be no assurance. Risks Relating to Ownership of our Common Stock Investment in our Common Stock is subject to price fluctuations and market volatility. Historically, valuations of many small companies have been highly volatile.
Our allowance for credit losses was $389,079 as of December 31, 2025, an increase of $93,147 when compared to the allowance for credit losses as of December 31, 2024. Risks Relating to Ownership of our Common Stock Investment in our Common Stock is subject to price fluctuations and market volatility. Historically, valuations of many small companies have been highly volatile.
Removed
We may need to raise additional financing if the cash generated from our operations is insufficient to fund our continued operations, which additional capital may result in restrictions on our operations or substantial dilution to our stockholders, and which capital may not be available to us or on terms acceptable to us or at all.
Added
Our backlog as of December 31, 2025 was $2,522,231 compared to $12,336,248 as of December 31, 2024.
Removed
During the year ended December 31, 2024, our revenues were negatively impacted due to supply chain issues, project deferrals and the reduced manufacturing capacity due to our plant relocation in 2024. During 2024, we have funded our operations through cash generated from our operations and through financing transactions, including related party loans from our directors. See Note 11.
Added
Our backlog at December 31, 2024 included an order for several chillers which were shipped in 2025 and orders for our several cogeneration systems that shipped in the first quarter of 2025 to customers seeking tax credits under the Inflation Reduction Act of 2022.
Removed
"Related Party Notes" of the Notes to the Consolidated Financial Statements. We cannot be certain if our operations will generate sufficient cash to fund our ongoing operations or the growth of our business. To the extent cash generated from operations in the future is insufficient to fund our operating requirements, we will be required to seek additional outside financing.
Added
On May 6, 2025, our common stock began trading on the NYSE American under our current symbol "TGEN." Also, we must be current in our SEC reporting obligations to maintain our listing.
Removed
Our inability to obtain necessary capital or financing to fund these working capital needs may adversely affect our ability to expand our operations. 14 TECOGEN INC. Our business is capital intensive and, because our products are built to order with customized configurations, the lead time to build and deliver a unit can be significant.
Added
Our management, including our certifying officers, after evaluating the effectiveness of our disclosure controls and procedures, concluded that our disclosure controls and procedures were not effective as of December 31, 2025, due to material weakness with respect to a small number of individuals dealing with general controls over information technology.
Removed
We may be required to purchase key components long before we can deliver a unit and receive payment. Changes in customer orders or lack of demand may also impact our profitability. There can be no assurance we will be able to increase our sales and achieve and sustain profitability in the future.
Added
We are committed to remediating the material weakness identified in internal controls over financial reporting and have begun the process to remediate this material weakness.
Removed
Based on management's analysis and our operating and cash flow plans, we believe that anticipated cash flows from operations will be sufficient to meet our current working capital needs and fund operations over the next twelve months. There can, however, be no assurance we will be able to do so.
Added
Our efforts will focus on instituting mitigating controls to address segregation of duties; hiring of additional staff; implementing additional controls to address system access deficiencies; implementing additional controls over business operations; establishing independent review and verification procedures for our vendor and customer master files; enhancing the documentation to support review occurrences and approval procedures; and, commencing regular periodic reviews of our internal controls over financial reporting with our Board of Directors and Audit Committee to address the inadequate risk oversight function and institute procedures to evaluate and report on risks to financial reporting, including the documentation and completion of a comprehensive risk assessment to identify all potential risk areas and evaluate the adequacy of our controls to mitigate these risks.
Removed
If our cash flows from operations are insufficient to fund our business we must continue to rely upon financing provided by related parties to help fund our operations and we may need to raise additional capital through a debt or equity financing to meet our need for capital to fund operations and future growth.
Added
In addition, on March 11, 2025, we filed a Current Report on Form 8-K to report, among other things, certain changes in the level of compensation for Mr. Panora, our President and COO, and the resignation of Mr. Gehret, our Vice President of Operations. Although Mr.
Removed
Furthermore, any debt financing is likely to include financial and other covenants that may impede our ability to react to changes in the economy or industry.
Added
Gehret remained with us as an employee until February 28, 2025, and then as a consultant until his duties were transferred to Mr. Panora, and subsequently determined we did not report Mr. Gehret’s resignation timely in accordance with the requirements of Form 8-K. We continue to develop and refine our disclosure controls and other procedures.
Removed
If adequate financing is not available when needed, we may be required to implement cost-cutting strategies, delay production, curtail research and development efforts, or implement other measures, which may adversely affect our results of operations and financial conditions and the price of our stock.
Added
Our disclosure controls and procedures are designed to provide reasonable assurance that the control system's objectives will be met.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

2 edited+0 added−0 removed14 unchanged
Biggest changeIn the event of a cybersecurity incident, our incident response plan outlines the steps to be followed from incident detection to mitigation, recovery and notification, and involves notifying senior management, our legal department, and the board of directors and/or our audit committee, if appropriate, and mitigation and remediation steps by our third-party consultant.
Biggest changeIn the event of a cybersecurity incident, our incident response plan outlines the steps to be followed from incident detection to mitigation, recovery and notification, and involves notifying senior management, our legal department, and the board of directors and/or our audit committee, if appropriate, and mitigation and remediation steps by our third-party consultant. 27 TECOGEN INC.
We monitor issues that are internally discovered or externally reported that may affect our business and have processes to assess those issues for potential cybersecurity impact or risk. 27 TECOGEN INC. We have integrated our cybersecurity risk management program into our broader enterprise risk management program.
We monitor issues that are internally discovered or externally reported that may affect our business and have processes to assess those issues for potential cybersecurity impact or risk. We have integrated our cybersecurity risk management program into our broader enterprise risk management program.

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−0 removed5 unchanged
Biggest changeThe estimated straight-line monthly rent expense for the initial term of the lease is approximately $26,962 per month. In accordance with ASC 842-20-30-1, we recognized and recorded the lease liability and 28 TECOGEN INC. right-of-use asset using the discount rate for the lease upon the lease commencement date, January 1, 2024.
Biggest changeThe estimated straight-line monthly rent expense for the initial term of the lease is approximately $26,412 per month. In accordance with ASC 842-20-30-1, we recognized and recorded the lease liability and right-of-use asset using the discount rate for the lease upon the lease commencement date, January 1, 2024.
Both lease agreements commenced on January 1, 2024, and require payment of the base rent, real estate taxes, common maintenance expenses, and aggregate security deposits in the amount of $38,200. Our costs for initial improvements required to the leased premises is estimated to range between $900,000 and $1,000,000.
Both lease agreements commenced on January 1, 2024, and require payment of the base rent, real estate taxes, common maintenance expenses, and aggregate security deposits in the amount of $38,200. Our costs for initial improvements required to the leased premises is estimated to range between $1,150,000 and $1,200,000.
As of December 31, 2024, the service centers that fit this larger category are based in Piscataway, New Jersey and Valley Stream and Buchanan, New York to service the Metro New York City and the Mid-Atlantic region. The San Francisco Bay area and Northern California are served by such a center in Hayward, California.
As of December 31, 2025, the service centers that fit this larger category are based in Piscataway, New Jersey and Valley Stream and Buchanan, New York to service the Metro New York City and the Mid-Atlantic region. The San Francisco Bay area and Northern California are served by such a center in Hayward, California.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

9 edited+2 added−0 removed4 unchanged
Biggest changeThe option price per share under the 2022 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 2022 Plan as of December 31, 2024 and 2023 were 2,950,000 and 3,068,750, respectively.
Biggest changeThe options are not transferable except by will or domestic relations order. The option price per share under the 2022 Plan cannot be less than the fair market value of the underlying shares on the date of the grant.
Our stockholders approved the amendment in June 2017 and ratified all of our option grants after January 1, 2016. 29 TECOGEN INC. Table of Contents 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 2006 Plan.
Our stockholders approved the amendment in June 2017 and ratified all of our option grants after January 1, 2016. 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 2006 Plan.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market for Our Shares Our common stock is quoted on the OTC Markets Group’s OTCQX Best Market tier and trades under the symbol TGEN. As of March 18, 2025, there were 57 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market for Our Shares Our common stock is listed on the NYSE American LLC ("NYSE American") stock exchange and trades under the symbol TGEN. As of March 19, 2026, there were 57 holders of record of our common stock.
Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column) Equity compensation plans approved by security holders 2,752,962 $ 1.14 4,058,168 Equity compensation plans not approved by security holders — — — Total 2,752,962 $ 1.14 4,058,168 Item 6. [Reserved].
Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column) Equity compensation plans approved by security holders 2,347,044 $ 1.90 3,783,924 Equity compensation plans not approved by security holders — — — Total 2,347,044 $ 1.90 3,783,924 On January 1, 2026 the 2006 Plan expired.
Under the plan, the Board of Directors may grant or award incentive stock options to employees and officers and non-qualified stock options, restricted stock grants, and common stock to our employees, officers, directors, and consultants. We have reserved 3,800,000 shares of our common stock for issuance pursuant to awards under the 2022 Plan.
Under the plan our board of directors may grant or award incentive stock options to our officers and employees and grant or award non-qualified stock options, and restricted stock to our employees, officers, directors, and consultants.
The following table provides information as of December 31, 2024, regarding Common Stock that may be issued under the 2006 Plan and the 2022 Plan.
The number of shares that remained available for future issuance under the 2022 Plan as of December 31, 2025 and 2024 were 2,632,856 and 2,950,000, respectively. 29 TECOGEN INC. Table of Contents The following table provides information as of December 31, 2025, regarding Common Stock that may be issued under the 2006 Plan and the 2022 Plan.
Under the 2022 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 2022 Plan. The options are not transferable except by will or domestic relations order.
We have reserved 3,800,000 shares of our common stock for issuance pursuant to awards under the 2022 Plan. Under the 2022 Plan, stock options vest based upon the terms of the individual option grants, with an acceleration of the unvested portion of such options upon a change in control event, as defined in the 2022 Plan.
Equity Compensation Plan Information We adopted our 2006 Stock Incentive Plan (as amended, the “2006 Plan”) in December 2005. Under the plan our board of directors may grant or award incentive stock options to our officers and employees and non-qualified stock grants and awards, and restricted stock to our employees, officers, directors, and consultants.
We adopted the 2022 Stock Incentive Plan (the "2022 Plan") on March 8, 2022, and it was approved by our stockholders on June 9, 2022. Under the plan, the Board of Directors may grant or award incentive stock options to employees and officers and non-qualified stock options, restricted stock grants, and common stock to our employees, officers, directors, and consultants.
The number of shares remaining available for future issuance under the 2006 Plan as of December 31, 2024 and 2023 were 1,108,168 and 243,818, respectively. We adopted the 2022 Stock Incentive Plan (the "2022 Plan") on March 8, 2022, and it was approved by our stockholders on June 9, 2022.
The number of shares that remained available for future issuance under the 2006 Plan as of December 31, 2025 and 2024 were 1,151,068 and 1,108,168, respectively. On January 1, 2026, the 2006 Plan expired. Accordingly, no further grants or awards may be made under the plan.
Added
Recent Sales of Unregistered Securities None Equity Compensation Plan Information We adopted our 2006 Stock Incentive Plan (as amended, the “2006 Plan”) in December 2005.
Added
Accordingly, no further options or other grants may be made under the plan. The number of shares that remained available for further issuance was 2,632,856 as of January 1, 2026. Item 6. [Reserved].

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeYears Ended Increase (Decrease) December 31, 2024 December 31, 2023 $ % Operating Expenses General and administrative 11,356,406 11,880,389 $ (523,983) (4.4) % Selling 1,880,903 1,931,037 (50,134) (2.6) % Research and development 961,837 840,011 121,826 14.5 % Gain on sale of assets (12,181) (36,207) 24,026 (66.4) % Goodwill impairment 217,295 — 217,295 — % Total $ 14,404,260 $ 14,615,230 $ (210,970) (1.4) % General and administrative expenses decreased $523,983, or 4.4%, to $11,356,406 in the year ended December 31, 2024 compared to $11,880,389 in 2023 due to a $756,422 decrease in credit loss expense, due to the write down of certain install receivables which were deemed uncollectible in 2023, a $104,986 decrease in consulting costs, a $84,756 decrease in stock-based compensation and a $80,331 decrease in amortization and depreciation, offset partially by a $265,274 increase in payroll and related benefits, a $90,593 increase in facility costs due to the transition to our new facility and $83,055 of relocation costs.
Biggest changeYears Ended Increase (Decrease) December 31, 2025 December 31, 2024 $ % Operating Expenses General and administrative 13,522,035 11,356,406 $ 2,165,629 19.1 % Selling 2,267,247 1,880,903 386,344 20.5 % Research and development 1,166,744 961,837 204,907 21.3 % Loss (gain) on sale of assets 183 (12,181) 12,364 (101.5) % Goodwill impairment 1,098,124 217,295 880,829 405.4 % Long-lived asset impairment 15,005 — 15,005 — % Total $ 18,069,338 $ 14,404,260 $ 3,665,078 25.4 % General and administrative expenses increased $2,165,629, or 19.1%, to $13,522,035 in the year ended December 31, 2025 compared to $11,356,406 in 2024, due to a $490,192 increase in payroll and a $433,113 increase in employee benefits, a $264,638 increase in recruitment costs, a $274,191 increase in depreciation and amortization, a $224,331 increase in travel and vehicle expense, a $422,073 increase in freight costs, a $139,423 increase in stock-based compensation costs, a $123,049 increase in business insurance premiums, a $157,298 increase in operating supply costs, a $94,972 increase in filing fees and other taxes, offset partially by a $115,036 decrease in facility costs, due to the transition to our new facility in 2024, a $83,052 reduction in credit losses, due to the accounts receivable recovery of $75,000 recognized in 2025, a decrease in relocation costs of $83,055 incurred in 2024 and the $78,531 litigation provision reversal recognized in 2025.
The allowance for credit losses is estimated based on historical experience, aging of the receivable, the counterparty’s ability to pay, condition of general economy and industry, and combined with management's estimate of current conditions, reasonable and supportable forecasts of future losses to determine estimated credit losses in our evaluation of outstanding accounts receivable at the end of the year.
The allowance for credit losses is estimated based on historical experience, aging of the receivable, the counterparty’s ability to pay, condition of the general economy and industry, and combined with management's estimate of current conditions, reasonable and supportable forecasts of future losses to determine estimated credit losses in our evaluation of outstanding accounts receivable at the end of the year.
The impairment analysis recognizes the shortening of remaining contract terms with customers without replacement and without further growth, as well as less than expected cost savings, offset by profitability from our initiatives to optimize the long-term profitability of our various site operations and a price peak of the our common stock on the date of the business combination to which the goodwill relates (see also Note 6."Sale of Energy Producing Assets and Goodwill Impairment").
The impairment analysis recognizes the shortening of remaining contract terms with customers without replacement and without further growth, as well as less than expected cost savings, offset by profitability from our initiatives to optimize the long-term profitability of our various site operations and a price peak of the our common stock on the date of the business combination to which the goodwill relates (see also Note 6."Sale of Energy Producing Assets").
During the year ended December 31, 2024, our revenues were negatively impacted due to customer order delays or deferrals; the relocation to our new facility in April 2024 which impacted product revenues during the second and third quarters of 2024; service delays due to customer facility closures, in some cases for extended periods and a reduction in our energy production revenues, due to business closures and increased remote work and learning environments.
During the year ended December 31, 2025, our revenues were negatively impacted due to customer order delays or deferrals; the relocation to our new facility in April 2024 which impacted product revenues during the second and third quarters of 2024; service delays due to customer facility closures, in some cases for extended periods and a reduction in our energy production revenues, due to business closures and increased remote work and learning environments.
Lewis and issued a one-year promissory note with interest accruing at 4.57% per annum. On January 14, 2025 we agreed to permit Mr. Lewis to either receive repayment of his note in cash or, at his discretion, convert the balance of the promissory note into shares of our common stock.
Lewis and issued him a one-year promissory note with interest accruing at 4.57% per annum. On January 14, 2025, we agreed to permit Mr. Lewis to either receive repayment of his note in cash or, at his discretion, convert the balance of the promissory note into shares of our common stock.
On February 1, 2024, Tecogen and Aegis amended the Agreement to add eighteen (18) additional maintenance service agreements (the "Amendment"). The Amendment includes an undertaking by Aegis to use commercially reasonable efforts to support and assist our execution of maintenance service agreements for an additional thirty-six (36) cogeneration units sold to customers by Aegis.
On February 1, 2024, Tecogen and Aegis amended the Agreement to add eighteen (18) additional maintenance service agreements (the "First Amendment"). The First Amendment includes an undertaking by Aegis to use commercially reasonable efforts to support and assist our execution of maintenance service agreements for an additional thirty-six (36) cogeneration units sold to customers by Aegis.
Pursuant to the Vertiv Agreement we have granted Vertiv the exclusive right to market and sell our DTx chillers for data center cooling applications outside the United States, and the non-exclusive right to market and sell our DTx chillers within the United States.
Pursuant to the Vertiv Agreement we have granted Vertiv the exclusive right to market and sell our DTx chillers for data center cooling applications outside the United States, and the non-exclusive right to market and sell our DTx chillers for such applications within the United States.
Lewis agreed to provide financing to us of $500,000, and at his discretion an additional $500,000. On October 10, 2023, we borrowed $500,000 from Mr. Hatsopoulos and issued a one-year promissory note with interest accruing at 5.12% per annum. On July 23, 2024, we borrowed an additional $500,000 from Mr.
Lewis agreed to provide financing to us of $500,000, and potentially, an additional $500,000 at his discretion. On October 10, 2023, we borrowed $500,000 from Mr. Hatsopoulos and issued him a one-year promissory note with interest accruing at 5.12% per annum. On July 23, 2024, we borrowed an additional $500,000 from Mr.
In the fourth quarter of 2024, we performed a quantitative goodwill impairment test for our energy production reporting unit acquired in 2017. We used a discounted cash flow approach to develop the estimated fair value of that reporting unit. Management judgment is required in developing the assumptions for the discounted cash flow model.
In the fourth quarter of 2025, we performed a quantitative goodwill impairment test for our energy production reporting unit acquired in 2017. We used a discounted cash flow approach to develop the estimated fair value of that reporting unit. Management judgment is required in developing the assumptions for the discounted cash flow model.
Table of Contents Our service operation revenues grow with the sales of installed systems, since the majority of our product sales are accompanied by a service contract or time and materials agreements. As a result, our “fleet” of units being serviced by our service department grows with product sales.
Our service operation revenues grow with the sales of installed systems, since the majority of our product sales are accompanied by a service contract or time and materials agreements. As a result, our “fleet” of units being serviced by our service department grows with product sales.
In the event of such a conversion, the number of shares we will be required to issue will be determined by dividing the balance due under the promissory note by the average closing price per share of our shares during the thirty-day period prior to the date of conversion. On February 18, 2025 we amended the promissory notes with Mr.
In the event of such a conversion, the number of shares we were required to be issue is determined by dividing the balance due under the promissory note by the average closing price per share of our shares during the thirty-day period prior to the date of conversion. On February 18, 2025, we amended the promissory notes with Mr.
The Vertiv Agreement has a term of two years and provides that Vertiv will establish a budget for marketing activities and use commercially reasonable efforts to sell our DTx chillers for cooling applications in data centers. The Vertiv Agreement also provides the basis for the negotiation of a definitive supply agreement between us and Vertiv.
The Vertiv Agreement has a term of two years and provides that Vertiv will engage in establishing a budget for marketing activities and use commercially reasonable efforts to sell our DTx chillers for cooling applications in data centers. The Vertiv Agreement also provides the basis for the negotiation of a definitive supply agreement between us and Vertiv.
You should review the “Risk Factors” in this report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following MD&A.
You should review the “Risk Factors” in this report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
These policies may require management to make assumptions about matters that are highly uncertain at the time of the estimate or employ an estimate where alternative estimates could have also been employed, and may involve estimates that are reasonably likely to change with the passage of time.
These aspects of these accounting policies are considered critical accounting policies. These policies may require management to make assumptions about matters that are highly uncertain at the time of the estimate or employ an estimate where alternative estimates could have also been employed, and may involve estimates that are reasonably likely to change with the passage of time.
Hatsopoulos to extend the maturity dates for both promissory notes to July 31, 2026. We also agreed to permit Mr. Hatsopoulos to either receive repayment of his notes in cash, or, at his discretion, convert the balances of one or both of the promissory notes into shares of our common stock.
Hatsopoulos to extend the maturity dates for both promissory notes to July 31, 2026. We also agreed to permit Mr. Hatsopoulos to either receive repayment of his notes in cash, or at his discretion, convert the balance(s) due of one or both of the promissory notes into shares of our common stock.
Any reserves that result from this review are charged to cost of sales. Property, Plant and Equipment Property, plant and equipment are recorded at cost. Depreciation is provided using the straight-line method over the estimated useful life of the asset, which range from P3Y to P15Y years.
Any reserves that result from this review are charged to cost of sales. Property, Plant and Equipment Property, plant and equipment are recorded at cost. Depreciation is provided using the straight-line method over the estimated useful life of the asset, which range from three to fifteen years.
For the last two fiscal years, more than half of our revenue was generated from long-term maintenance and energy production contracts, which provides us with a predictable revenue stream, especially during the summer months. We experience a slight surge of activity from May through September as our “chiller season” is in full swing.
For the last two fiscal years, more than half of our revenue was generated from long-term maintenance and energy production contracts, which provides us with a predictable revenue stream, especially during the summer months. We experience a slight surge of activity from May through September as our “chiller season” is in full swing. Our O&M service 30 TECOGEN INC.
Based on the aforementioned analysis, the estimated fair value of that reporting unit, including goodwill, exceeded the carrying value and resulting in no impairment at December 31, 2024. See Note 5. "Aegis Contract and Related Asset Acquisition".
Based on the aforementioned analysis, the estimated fair value of that reporting unit, including goodwill, exceeded the carrying value and resulted in no impairment at December 31, 2025. See Note 5. "Aegis Contract and Related Asset Acquisition".
We have agreements in place with distributors and sales representatives. Our existing customers include 30 TECOGEN INC. Table of Contents hospitals and nursing homes, colleges and universities, health clubs and spas, hotels and motels, office and retail buildings, food and beverage processors, multi-unit residential buildings, laundries, ice rinks, swimming pools, factories, municipal buildings, military installations and indoor growing facilities.
We have agreements in place with distributors and sales representatives. Our existing customers include hospitals and nursing homes, colleges and universities, health clubs and spas, hotels and motels, office and retail buildings, food and beverage processors, multi-unit residential buildings, laundries, ice rinks, swimming pools, factories, municipal buildings, military installations and indoor growing facilities.
Related Party Notes On October 9, 2023, we entered into note subscription agreements with each of John N. Hatsopoulos and Earl R. Lewis, III, each a director and shareholder of Tecogen, pursuant to which Mr. Hatsopoulos agreed to provide financing to us of up to $1 million, and Mr.
Related Party Notes On October 9, 2023, we entered into note subscription agreements with each of John N. Hatsopoulos and Earl R. Lewis, III, each a director and shareholder of the Company, pursuant to which Mr. Hatsopoulos agreed to provide financing to us of up to $1,000,000, and Mr.
Our O&M service revenue which has grown from year to year since 2005, with our New York City/New Jersey and New England systems experiencing the majority of the growth, was positively impacted by the Aegis maintenance agreement acquisition in 2023.
Table of Contents revenue which has grown from year to year since 2005, with our New York City/New Jersey and New England systems experiencing the majority of the growth, was positively impacted by the Aegis maintenance agreement acquisition in 2023.
These changes have historically been minor and have been included in the consolidated financial statements as soon as they became known. In addition, management is periodically faced with uncertainties, the outcomes of which are not within its control and will not be known for prolonged periods of time. These uncertainties are discussed in "Item 1A," “Risk Factors" above.
These changes have historically been minor and have been included in the consolidated financial statements as soon as they became known. In addition, management is periodically faced with uncertainties, the outcomes of which are not within its control and will not be known for prolonged periods of time.
Our analysis uses our internally generated long-range plan. The long-range plan reflects management's judgment and assumptions about future events. In the fourth quarter of 2024, we performed a quantitative goodwill impairment test for the Aegis maintenance service contracts reporting unit acquired in 2023 and 2024.
Our analysis uses our internally generated long-range plan. The long-range plan reflects management's judgment and assumptions about future events. 35 TECOGEN INC. Table of Contents In the fourth quarter of 2025, we performed a quantitative goodwill impairment test for the Aegis maintenance service contracts reporting unit acquired in 2023 and 2024.
Provision for State Income Taxes The provision for state income taxes for the years ended December 31, 2024 and 2023 was $22,565 and $32,491, respectively, and represents estimated income tax payments, net of refunds, to various states. Noncontrolling Interest We have income and losses attributable to the non-controlling interest we have in American DG Energy's 51% owned subsidiary, ADGNY, LLC.
Provision for State Income Taxes The provision for state income taxes for the years ended December 31, 2025 and 2024 were $20,615 and $22,565, respectively, and represents estimated income tax payments, net of refunds, to various states. Noncontrolling Interest We have income and losses attributable to the non-controlling interest we have in American DG Energy's 51% owned subsidiary, ADGNY, LLC.
Any excess purchase price over the fair value of the net tangible and intangible assets acquired is allocated to goodwill. We may make certain estimates and assumptions when determining the fair values of assets acquired and liabilities assumed, including intangible assets. Critical estimates in valuing 34 TECOGEN INC.
Any excess purchase price over the fair value of the net tangible and intangible assets acquired is allocated to goodwill. We may make certain estimates and assumptions when determining the fair values of assets acquired and liabilities assumed, including intangible assets.
Hatsopoulos, and executed a one-year promissory note with interest accruing at 5.06% per annum. On March 21, 2024, John H. Hatsopoulos amended the terms of the promissory note, dated October 10, 2023, extending the maturity date by one year, making the maturity date October 10, 2025. On September 18, 2024, we borrowed $500,000 from Mr.
Hatsopoulos, and issued a one-year promissory note with interest accruing at 5.06% per annum. On March 21, 2024, we extended the maturity date the of the promissory note dated October 10, 2023 by one-year making the maturity date October 10, 2025. On September 18, 2024, we borrowed $500,000 from Mr.
See Note 11."Related Party Notes" of the Notes to the Consolidated Financial Statements. Critical Accounting Estimates Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.
Critical Accounting Estimates Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.
In the event of such a conversion, the number of shares we will be required to issue will be determined by dividing the balance(s) due under the promissory note(s) by the average closing price per share of our shares during the thirty-day period prior to the date of conversion.
In the event of such a conversion, the number of shares we were required to issue is determined by dividing the balance(s) due under the promissory note(s) by the average closing price per share of our shares during the thirty-day period prior to the date of conversion. Both of the promissory notes with Mr.
The lead time to build and deliver a unit depends on its customized configuration and is approximately 12 to 14 weeks for a chiller and 6 to 8 weeks for a cogeneration system or heat pump, from time of purchase order.
Our cogeneration, heat pump, and chiller modules are built to order and revenue is recognized upon shipment. The lead time to build and deliver a unit depends on its customized configuration and is approximately 12 to 14 weeks for a chiller and 6 to 8 weeks for a cogeneration system or heat pump, from time of purchase order.
Table of Contents certain intangible assets include but are not limited to future expected cash flows from energy production sites or customer maintenance contracts, estimated operating costs, as well as discount rates.
Critical estimates in valuing certain intangible assets include but are not limited to future expected cash flows from energy production sites or customer maintenance contracts, estimated operating costs, as well as discount rates.
Cash used in asset acquisition are mainly for costs incurred in 2024 for initial improvements required to the North Billerica, Massachusetts leased premises which are estimated to range between $900,000 and $1,000,000. For the year ended December 31, 2023 we used $244,889 in cash from investing activities.
Cash used in asset acquisition are mainly for costs incurred in 2025 for initial improvements required to the North Billerica, Massachusetts leased premises which are estimated to range between $1,150,000 and $1,200,000. For the year ended December 31, 2024 we used $1,014,737 in cash from investing activities.
The foregoing description of the Vertiv Agreement is not complete and is qualified in its entirety by reference to the full text thereof, a copy of which is filed as Exhibit 99.01 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on February 28, 2025, and incorporated by reference as Exhibit 10.30 hereto.
The foregoing description of the Vertiv Agreement is not complete and is qualified in its entirety by reference to the full text 31 TECOGEN INC. Table of Contents thereof, a copy of which was filed as Exhibit 99.01 to our Current Report on Form 8-K filed with the Securities and Exchange Commission ("SEC") on February 28, 2025.
For the year ended December 31, 2024 we used $1,014,737, in cash from investing activities. We used $969,163 of cash for purchases of property and equipment, and distributed $96,974 to the 49% non-controlling interest holders of American DG New York LLC and received $51,400 in proceeds from the disposition of assets, including insurance proceeds.
We used $969,163 of cash for purchases of property and equipment, and distributed $96,974 to the 49% non-controlling interest holders of American DG New York LLC and received $51,400 in proceeds from the disposition of assets, including insurance proceeds.
Net Income (Loss) Per Share Net loss per share for the year ended December 31, 2024 was a loss of $0.19 compared to a loss of $0.19 per share for the same period in 2023. The basic and diluted weighted average shares outstanding for the year ended December 31, 2024 were 24,861,190 and 24,861,190, respectively.
Net Income (Loss) Per Share Net loss per share for the year ended December 31, 2025 was a loss of $0.30 compared to a loss of $0.19 per share for the same period in 2024. The basic and diluted weighted average shares outstanding for the year ended December 31, 2025 were 27,233,143 and 27,233,143, respectively.
In the event of such a conversion, the number of shares we will be required to issue will be determined by dividing the balance(s) due under the promissory note(s) by the average closing price per share of our common stock during the thirty-day period prior to the date of conversion.
In the event of such a conversion, the number of shares we were required to issue is determined by dividing the balance(s) due under the promissory note(s) by the average closing price per share of our shares during the thirty-day period prior to the date of conversion. Both of the promissory notes with Mr.
Assumption of Aegis Energy Services Maintenance Agreements On March 15, 2023, we entered into an agreement ("Agreement") with Aegis Energy Services, LLC (“Aegis”) pursuant to which Aegis agreed to assign to us and we agreed to assume certain Aegis maintenance agreements, we agreed to 31 TECOGEN INC. Table of Contents purchase certain assets, and related matters (“Acquisition”).
Assumption of Aegis Energy Services Maintenance Agreements On March 15, 2023, we entered into an agreement ("Agreement") with Aegis Energy Services, LLC (“Aegis”) pursuant to which Aegis agreed to assign to us and we agreed to assume certain Aegis maintenance agreements, we agreed to purchase certain assets, and related matters (“Acquisition”). On April 1, 2023, the Acquisition closed.
Contract Assets and Liabilities The favorable contract asset and unfavorable contract liability included in the intangible assets and liabilities of the consolidated balance sheets represent the fair value of customer energy production contracts (both positive for favorable contracts and negative for unfavorable contracts) which were acquired by us.
Transaction costs associated with business combinations are expensed as incurred. Contract Assets and Liabilities The favorable contract asset and unfavorable contract liability included in the intangible assets and liabilities of the consolidated balance sheets represent the fair value of customer energy production contracts (both positive for favorable contracts and negative for unfavorable contracts) which were acquired by us.
An impairment would be recorded if the carrying amount of a reporting unit including goodwill exceeded the estimated fair value. Based on the aforementioned 35 TECOGEN INC. Table of Contents analysis, the carrying amount of that reporting unit, including goodwill, exceeded the estimated fair value and resulted in an impairment at December 31, 2024. See Note 6.
An impairment would be recorded if the carrying amount of a reporting unit including goodwill exceeded the estimated fair value. Based on the aforementioned analysis, the carrying amount of that reporting unit, including goodwill, exceeded the estimated fair value and resulted in an impairment at December 31, 2025. See Note 6. "Sale of Energy Producing Assets".
We define reporting units at the business segment level. For purposes of testing goodwill for impairment, goodwill has been allocated to our reporting units to the extent it relates to each reporting unit.
We define reporting units at the business segment level. For purposes of testing goodwill for impairment, goodwill has been allocated to our reporting units to the extent it relates to each reporting unit. At a minimum, we perform a quantitative goodwill impairment test in the fourth quarter of the year.
There can be no assurance that we will be able to raise such additional financing or upon terms that are acceptable to us or at all. On October 9, 2023, we entered into note subscription agreements with each of John N. Hatsopoulos and Earl R. Lewis, III, both directors and shareholders of Tecogen, pursuant to which Mr.
There can be no assurance that we will be able to raise such additional financing or upon terms that are acceptable to us or at all. 40 TECOGEN INC. Table of Contents Repayment of related party notes On October 9, 2023, we entered into note subscription agreements with each of John N. Hatsopoulos and Earl R.
Management believes that the following are critical accounting estimates: Revenue Recognition Revenue is recognized when performance obligations under the terms of a contract with our customer are satisfied. This generally occurs with the transfer of control of our products, services and energy production.
These uncertainties are discussed in "Item 1A, Risk Factors" above. 33 TECOGEN INC. Table of Contents Management believes that the following are critical accounting estimates: Revenue Recognition Revenue is recognized when performance obligations under the terms of a contract with our customer are satisfied. This generally occurs with the transfer of control of our products, services and energy production.
Hatsopoulos to either receive repayment of his notes in cash, or at his discretion, convert the balances of one or both of the promissory into shares of our common stock .
Lewis to either receive repayment of his note in cash or, at his discretion, convert the balance of the promissory note into shares of our common stock.
This chiller “busy season” for the service team generally runs from May through the end of September. Chillers in indoor cultivation and other process cooling applications run year round. Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Disclosure in response to this item is not required of a smaller reporting company.
Chillers in indoor cultivation and other process cooling applications run year round. Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Disclosure in response to this item is not required of a smaller reporting company.
Gain on the sale of assets was $12,181 in 2024 compared to a gain on the sale of assets of $36,207 in 2023. During the year ended December 31, 2024 we recognized goodwill impairment of $217,295 on our Energy Production sites compared to $0 in 2023.
Loss on the sale of assets was $183 in 2025 compared to a gain on the sale of assets of $12,181 in 2024. During the year ended December 31, 2025 we recognized goodwill and long-lived impairment of $1,113,129 on our Energy Production sites compared to $217,295 in 2024.
Recent Developments Vertiv Sales and Marketing Agreement - Data Center Cooling Market On February 28, 2025, we entered into a Sales and Marketing Agreement with Vertiv Corporation (“Vertiv”) relating to sales of Tecogen DTx chillers for data center cooling applications (the “Vertiv Agreement”).
On May 6, 2025, our common stock began trading on the NYSE American under our current symbol "TGEN." Vertiv Sales and Marketing Agreement - Data Center Cooling Market On February 28, 2025, we entered into a Sales and Marketing Agreement with Vertiv Corporation (“Vertiv”) relating to sales of Tecogen DTx chillers for data center cooling applications (“Vertiv Agreement”).
In the event of such a conversion, the number of shares we will be required to issue will be determined by dividing the balance due under the promissory note by the average closing price per share of our shares during the thirty-day period prior to the date of conversion. 40 TECOGEN INC.
In the event of such a conversion, the number of shares we were required to be issued is determined by dividing the balance due under the promissory note by the average closing price per share of our shares during the thirty day period prior to the date of conversion. On February 18, 2025, we amended the promissory notes with Mr.
Our cogeneration sales are not generally affected by the seasons. Our service team experiences higher demand in the warmer months when cooling is required. Chiller units for space conditioning applications are generally shut down in the winter and started up again in the spring.
Our service team experiences higher demand in the warmer months when cooling is required. Chiller units for space conditioning applications are generally shut down in the winter and started up again in the spring. This chiller “busy season” for the service team generally runs from May through the end of September.
Table of Contents Years ended December 31, 2024 2023 Revenues 100.0 % 100.0 % Cost of Sales 56.4 59.4 Gross Profit 43.6 40.6 Operating expenses: General and administrative 50.2 47.3 Selling 8.3 7.7 Research and development 4.3 3.3 Gain on sale of assets (0.1) (0.1) Goodwill impairment 1.0 — Total operating expenses 63.7 58.1 Loss from operations (20.0) (17.6) Total other expense, net (0.5) (0.3) Consolidated net loss (20.7) (18.0) Income attributable to the noncontrolling interest (0.4) (0.3) Net loss attributable to Tecogen Inc.
Results of Operations Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 The following table sets forth for the periods indicated, the percentages of the net sales represented by certain items reflected in our statements of operations for the years ended December 31, 2025 and 2024: Years ended December 31, 2025 2024 Revenues 100.0 % 100.0 % Cost of Sales 63.7 56.4 Gross Profit 36.3 43.6 Operating expenses: General and administrative 49.9 50.2 Selling 8.4 8.3 Research and development 4.3 4.3 Loss (gain) on sale of assets — (0.1) Goodwill impairment 4.1 1.0 Total operating expenses 66.7 63.7 Loss from operations (30.5) (20.0) Total other expense, net 0.1 (0.5) Consolidated net loss (30.5) (20.7) Loss (income) attributable to the noncontrolling interest — (0.4) Net loss attributable to Tecogen Inc.
Our inventory decreased by $848,884 as of December 31, 2024 compared to December 31, 2023 and other non-current assets increased by $510,723 as of December 31, 2024 as compared to December 31, 2023. Accounts payable decreased by $371,736 from December 31, 2023 to December 31, 2024 due to our increased liquidity in in the fourth quarter of 2024.
Our inventory increased by $1,426,182 as of December 31, 2025 compared to December 31, 2024 and other non-current assets decreased by $464,576 as of December 31, 2025 as compared to December 31, 2024. Accounts payable decreased by $761,131 from December 31, 2024 to December 31, 2025 due to our increased liquidity in the fourth quarter of 2025.
Services Revenues derived from our service centers in 2024 were $16,074,870 compared to $14,523,054 for the same period in 2023, an increase of $1,551,816 or 10.7%.
Services Revenues derived from our service centers in 2025 were $16,616,523 compared to $16,074,870 for the same period in 2024, an increase of $541,653 or 3.4%.
Our products gross margin was 32.2% in 2024 compared to 33.1% in 2023, a decrease of 0.9%, due to decreased engineering accessories sales in 2024, which are higher margin sales.
Our products gross margin was 33.2% in 2025 compared to 32.2% in 2024, an increase of 1.0%, due to increased engineering accessories sales in 2025, which are higher margin sales. Services 37 TECOGEN INC.
Table of Contents Certain aspects of certain accounting policies require management to make difficult, subjective or complex judgments that could have a material effect on our financial condition and results of operations. These aspects of these accounting policies are considered critical accounting policies.
"Summary of Significant Accounting Policies" of the Notes to our Consolidated Financial Statements describes the significant accounting policies used in the preparation of the consolidated financial statements. Certain aspects of certain accounting policies require management to make difficult, subjective or complex judgments that could have a material effect on our financial condition and results of operations.
Loss from Operations Loss from operations for the year ended December 31, 2024 was $4,534,087 compared to a loss of $4,413,612 in 2023, an increase in the loss from operations of $120,475.
Loss from Operations Loss from operations for the year ended December 31, 2025 was $8,244,830 compared to a loss of $4,534,087 in 2024, an increase in the loss from operations of $3,710,743, or 81.8%.
Cash flows from financing activities for the year ended December 31, 2024 were $1,008,153, consisting of borrowings under our related party notes with John N. Hatsopoulos and Earl R. Lewis of $1,000,000.00 (see Note 11."Related Party Notes"), $71,000 of proceeds from the exercise of stock options and used $62,847 of cash in payment of finance lease principal.
During the year ended December 31, 2024, we received proceeds of $1,000,000 under the related party promissory notes and used $62,847 of cash in payment of finance lease principal. and received $71,000 of proceeds from the exercise of stock options (see Note 11."Related Party Notes").
On July 23, 2024, we borrowed an additional $500,000 from Mr. Hatsopoulos, and issued a one-year promissory note with interest accruing at 5.06% per annum. On March 21, 2024, John H. Hatsopoulos amended the terms of the promissory note, dated October 10, 2023, extending the maturity date by one year, making the maturity date October 10, 2025.
On March 21, 2024, we extended the maturity date the of the promissory note dated October 10, 2023 by one-year making the maturity date October 10, 2025. On September 18, 2024, we borrowed $500,000 from Mr. Lewis and issued him a one-year promissory note with interest accruing at 4.57% per annum. On January 14, 2025, we agreed to permit Mr.
Accrued expenses increased by $386,257 as of December 31, 2024 compared to December 31, 2023 due to timing of operating expenses. Deferred revenues increased by $5,850,265 as of December 31, 2024 as compared to December 31, 2023, due to advance customer deposits collected in 2024 for Products that will ship in 2025.
Accrued expenses increased by $76,736 as of December 31, 2025 compared to December 31, 2024 due to timing of operating expenses. Deferred revenues decreased by $3,070,219 as of December 31, 2025 as compared to December 31, 2024, due to application of advance customer deposits collected in 2024 for Products shipments in 2025.
The political environment following the 2024 elections in the United States may have a material impact on anti-fossil fuel sentiment and the regulatory environment that may be favorable to our business.
The political environment following the 2024 elections in the United States has had a material impact on anti-fossil fuel sentiment and the regulatory environment that is more favorable to our business. We have also diversified our sales activities to reduce our reliance on markets like New York City.
The non-controlling interest share of ADGNY profits and losses was income of $86,468 for the year ended December 31, 2024 compared to income of $74,952 in 2023. Net Loss Attributable to Tecogen Inc Net loss for the year ended December 31, 2024 was $4,760,238 compared to a net loss of $4,598,108 for 2023, an increase of $162,130.
The non-controlling interest share of ADGNY profits and losses was a loss of $588 for the year ended December 31, 2025 compared to income of $86,468 in 2024.
Services Cost of sales for services in 2024 was $8,432,876 compared to $7,909,202 in 2023, an increase of $523,674, or 6.6%, due to increased labor and material costs as a consequence of acquiring the Aegis customer maintenance contracts and increased material usage at existing sites, offset by a decrease in the provision for obsolete inventory in 2024.
Table of Contents Cost of sales for services for the year ended December 31, 2025 was $10,202,774 compared to $8,432,876 in 2024, an increase of $1,769,898, or 21.0%, due to increased labor and material costs as a consequence of acquiring the Aegis customer maintenance contracts and increased material usage at existing sites.
Hatsopoulos agreed to provide financing to us of up to $1,000,000, and Mr. Lewis agreed to provide financing to us of $500,000, and potentially, an additional $500,000 at his discretion. On October 10, 2023, we borrowed $500,000 from Mr. Hatsopoulos and issued him a one-year promissory note with interest accruing at 5.12% per annum.
Hatsopoulos and issued him a one-year promissory note with interest accruing at 5.12% per annum. On July 23, 2024, we borrowed an additional $500,000 from Mr. Hatsopoulos and issued a one-year promissory note with interest accruing at 5.06% per annum.
We introduced the Tecochill Hybrid-Drive Air-Cooled Chiller at the AHR Expo in February 2023 and received an order on February 8, 2024 for three hybrid-drive air-cooled chillers for a utility company in Florida. In March 2024, the US Patent and Trademark Office granted patent 11,936,327: "Hybrid Power System With Electric Generator and Auxiliary Power Source." 32 TECOGEN INC.
We introduced the Tecochill Hybrid-Drive Air-Cooled Chiller at the AHR Expo in February 2023 and received an order on February 8, 2024 for three hybrid-drive air-cooled chillers for a utility company in Florida which were shipped in the second and third quarter of 2025. In 32 TECOGEN INC.
We are also obligated under finance leases for ten vehicles through October 31, 2029. Future minimum finance lease payments as of December 31, 2024, were $410,881. Seasonality We expect that the majority of our heating systems sales will be operational for the winter and the majority of our chilling systems sales will be operational for the summer.
Future minimum finance lease payments as of December 31, 2025, were $1,272,550. See Note 14."Leases". Seasonality We expect that the majority of our heating systems sales will be operational for the winter and the majority of our chilling systems sales will be operational for the summer. Our cogeneration sales are not generally affected by the seasons.
Our product revenue is derived from the sale of the various cogeneration modules, such as the InVerde, InVerde e+, the Tecopower, and Tecochill products. In 2019, we also reintroduced our TecoFrost refrigeration line. The sales cycle varies between 6 months to a year or more. Therefore, our product revenue can be difficult to predict and the expected margin can vary.
In 2019, we also reintroduced our TecoFrost refrigeration line. The sales cycle varies between 6 months to a year or more. Therefore, our product revenue can be difficult to predict and the expected margin can vary. In most cases we work with consulting engineers who specify our product in new and retrofit applications.
Using the inverter design from our InVerde e+ cogeneration module, the system can simultaneously take two inputs, one from the grid or a renewable energy source and one from our natural gas engine. This allows a customer to seek the optimum blend of operational cost savings and greenhouse gas benefits while providing added resiliency from two power sources.
This allows a customer to seek the optimum blend of operational cost savings and greenhouse gas benefits while providing added resiliency from two power sources.
See Note 11."Related Party Notes" of the Notes to the Consolidated Financial Statements. Obligations and Commitments We are obligated under operating leases for our North Billerica, Massachusetts headquarters through December 31, 2028 and our eleven leased service centers through January 2031. Future minimum lease commitments under non-cancellable operating leases as of December 31, 2024, were $1,772,171. See Note 14."Leases".
Obligations and Commitments We are obligated under operating leases for our North Billerica, Massachusetts headquarters through February 28, 2031 and our eleven leased service centers through January 2031. Future minimum lease commitments under non-cancellable operating leases as of December 31, 2025, were $1,543,129. We are also obligated under finance leases for thirty-five vehicles through October 31, 2029.
For the year ended December 31, 2024 we generated $4,060,547 in cash from operations compared to $817,810 in cash used from operations in 2023, an increase of $4,878,357 in net cash generated by operating activities. Our accounts 39 TECOGEN INC.
For the year ended December 31, 2025 we used $9,911,674 in cash from operations compared to $4,060,547 in cash generated from operations in 2024, a decrease of $13,972,221 in net cash generated by operating activities.
Liquidity and Capital Resources The following table presents a summary of our net cash flows from operating, investing, and financing activities: Years End Cash Provided by (Used in) December 31, 2024 December 31, 2023 Operating activities $ 4,060,547 $ (817,810) Investing activities (1,014,737) (244,889) Financing activities 1,008,153 500,000 Change in cash and cash equivalents $ 4,053,963 $ (562,699) Consolidated working capital at December 31, 2024 was $5,329,650, compared to $9,822,546 at December 31, 2023, a decrease of $4,492,896 or 45.7%.
The following table presents a summary of our net cash flows from operating, investing, and financing activities: Years End Cash Provided by (Used in) December 31, 2025 December 31, 2024 Operating activities $ (9,911,674) 4,060,547 Investing activities (464,130) (1,014,737) Financing activities 17,400,858 1,008,153 Change in cash and cash equivalents $ 7,025,054 $ 4,053,963 Consolidated working capital at December 31, 2025 was $19,618,132, compared to $5,329,650 at December 31, 2024, an increase of $14,288,482 or 268.1% due to the July 21, 2025 equity financing Included in working capital were cash and cash 39 TECOGEN INC.
We believe that as regulations take into account scope 2 emissions (site versus source emissions), products like our hybrid chiller that can choose the cleanest fuel source will have a significant advantage in decarbonization efforts.
Impact of Anti-fossil Fuel Sentiment In some key markets such as New York City, the regulatory push to eliminate fossil fuels from buildings has impacted cogeneration unit sales. We believe that as regulations take into account scope 2 emissions and products like our hybrid chiller that can choose the cleanest fuel source will have a significant advantage in decarbonization efforts.
Contingent consideration liabilities and deferred payments to sellers are recorded as current liabilities and other long-term liabilities in the consolidated balance sheets based on the expected timing of settlement. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.
Contingent consideration liabilities and deferred payments to sellers are recorded as current liabilities and other long-term liabilities in the consolidated balance sheets based on the expected timing of settlement. 34 TECOGEN INC.
Cost of Sales Cost of sales in 2024 was $12,749,363 compared to $14,937,801 in 2023, a decrease of $2,188,438 or 14.7%. The decrease in cost of sales is due to decreased Products revenue volume. Our overall gross margin was 43.6% in 2024 compared to 40.6% in 2023, an increase of 3.0%.
Cost of Sales Cost of sales for the year ended December 31, 2025 was $17,249,202 compared to $12,749,363 in 2024, an increase of $4,499,839 or 35.3%. The increase in cost of sales is due to increased Products revenue volume and increased Services costs. Our overall gross margin was 36.3% in 2025 compared to 43.6% in 2024, a decrease of 7.3%.
Other Income (Expense), net Other expense, net, for the year ended December 31, 2024 was $117,118 compared to $77,053 for the same period in 2023, an increase of $40,065, due to a $74,254 increase in interest expense on borrowings under our related party notes and lease financing, partially offet by a decrease in interest income and other expense of $26,814 compared to $61,003 in 2023, due to a $35,759 decrease in currency exchange losses for the year ended December 31, 2024.
Table of Contents Other income, net, for the year ended December 31, 2025 was $16,102 compared to other expense, net of $117,118 for the same period in 2024, an increase in income of $133,220, due to a $200,288 increase in interest income resulting from increased cash on deposit in interest-bearing accounts, offset by a $59,985 increase in interest expense on borrowings under our related party notes and lease financing and a $21,763 increase in currency exchange losses.
Energy Production Cost of sales for energy production for the year ended December 31, 2024 was $1,301,832 compared to $1,105,503 in 2023, an increase of $196,329. Energy production gross margin was 38.0% in 2024 compared to 37.1% in 2023, an increase of 0.9%, due to higher fuel costs.
Energy Production Cost of sales for energy production for the year ended December 31, 2025 was $948,927 compared to $1,301,832 in 2024, a decrease of $352,905, of 27.1%. Energy production gross margin was 28.3% in 2025 compared to 38.0% in 2024, a decrease of 9.7%.
During the years ended December 31, 2024 and 2023, our revenues were negatively impacted due to supply chain issues, customer order delays or deferrals; service delays due to customer facility closures and reduced manufacturing capacity due to our plant relocation in 2024.
During the years ended December 31, 2025 and 2024, our revenues were negatively impacted due to supply chain issues, customer order delays or deferrals and, service delays due to customer facility closures. Our product revenue is derived from the sale of the various cogeneration modules, such as the InVerde, InVerde e+, the Tecopower, and Tecochill products.
Our InVerde product can provide on-site power generation which allows customers to eliminate long lead times associated with electrical switch gear and bridge any short fall in power from the utility. Residual Impacts of Covid-19 Pandemic Supply chains were adversely impacted during Covid, resulting in significant delays or lack of availability of critical components such as engines.
Our InVerde product can provide on-site power generation which allows customers to eliminate long lead times associated with electrical switch gear and bridge any short fall in power from the utility. Tecochill Hybrid-Drive Air-Cooled Chiller Development During the third quarter of 2021, we began development of the Tecochill Hybrid-Drive Air-Cooled Chiller.
Table of Contents Research and development expenses increased in the year ended December 31, 2024 to $961,837 compared to $840,011, an increase of $121,826 due to a $151,193 increase in depreciation and amortization, offset by a $56,924 decrease in payroll costs and related benefits.
Research and development expenses increased in the year ended December 31, 2025 to $1,166,744 compared to $961,837, an increase of $204,907 due to a $224,736 increase in payroll costs and related benefits, partially offset by a $14,800 decrease in outside consulting fees.
We used $170,000 of cash to acquire certain assets as part of the Aegis acquisition, used $46,851 of cash for purchases of property and equipment, and distributed $62,693 to the 49% non-controlling interest holders of American DG New York LLC and received $34,655 in proceeds from the disposition of assets, including insurance proceeds.
Net cash used in investing activities For the year ended December 31, 2025 we used $464,130, in cash from investing activities. We used $400,781 of cash for purchases of property and equipment, and distributed $67,639 to the 49% non-controlling interest holders of American DG New York LLC and received $4,290 in proceeds from the disposition of assets, including insurance proceeds.
(21.0) % (18.3) % The following table presents revenue by segment and the change from the prior year for the years ended December 31, 2024 and 2023: Years Ended Revenues December 31, 2024 December 31, 2023 Increase (Decrease) $ Increase (Decrease) % Product: Cogeneration $ 2,677,930 $ 2,761,667 $ (83,737) (3.0) % Chillers 1,647,374 5,303,978 (3,656,604) (68.9) % Engineered Accessories 118,692 794,301 (675,609) (85.1) % Total product revenue 4,443,996 8,859,946 (4,415,950) (49.8) % Services 16,074,870 14,523,054 1,551,816 10.7 % Energy production 2,100,670 1,756,419 344,251 19.6 % Total Revenue $ 22,619,536 $ 25,139,419 $ (2,519,883) (10.0) % Revenues Revenues in 2024 were $22,619,536 compared to $25,139,419 in 2023, a decrease of $2,519,883 or 10.0% due to decreased Products revenues.
Table of Contents The following table presents revenue by segment and the change from the prior year for the years ended December 31, 2025 and 2024: Years Ended Revenues December 31, 2025 December 31, 2024 Increase (Decrease) $ Increase (Decrease) % Product: Cogeneration $ 3,073,582 $ 2,677,930 $ 395,652 14.8 % Chillers 5,658,183 1,647,374 4,010,809 243.5 % Engineered Accessories 401,685 118,692 282,993 238.4 % Total product revenue 9,133,450 4,443,996 4,689,454 105.5 % Services 16,616,523 16,074,870 541,653 3.4 % Energy production 1,323,737 2,100,670 (776,933) (37.0) % Total Revenue $ 27,073,710 $ 22,619,536 $ 4,454,174 19.7 % Revenues Revenues in 2025 were $27,073,710 compared to $22,619,536 in 2024, an increase of $4,454,174 or 19.7% due to increased Products and Services revenues.
Table of Contents receivable balance decreased by $608,929 at December 31, 2024 compared to December 31, 2023 and our unbilled revenues decreased by $859,634 at December 31, 2024 compared to December 31, 2023.
Our accounts receivable balance decreased by $1,682,596 at December 31, 2025 compared to December 31, 2024 and our unbilled revenues decreased by $260,879 at December 31, 2025 compared to December 31, 2024.
The increase in Services revenue in 2024 is due to an increase in revenue from the acquired Aegis Maintenance contracts of $786,160, or 41.7%, and a $765,656, or 6.1%, increase in service contract revenues from existing contracts. 37 TECOGEN INC.
The increase in Services revenue in 2025 is due to a $815,522, or 6.1% increase in service contract revenues from existing contracts, offset partially by a $273,869, or 10.3%, decrease in revenue from the acquired Aegis Maintenance contracts.
The increase in the net loss is due to a $331,445 decrease in gross margin due to lower Products revenue and goodwill impairment of $217,295, offset partially by a $428,265 decrease in operating expenses.
The increase in the net loss is due to an increase in operating expenses of $2,756,880, an increase in the goodwill and long-lived asset impairment of $895,834 and the decrease in Services segment gross margin, partially offset by increased interest income.

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