American DG Energy Reports Second Quarter 2015 Financial Performance

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

Jun 30, 2015

Dec 31, 2014

ASSETS

Current assets:

Cash and cash equivalents

$     8,172,481

$     11,825,915

Accounts receivable, net

1,062,153

1,140,811

Unbilled revenue

14,810

12,533

Due from related party

42,266

39,682

Inventory finished goods

1,060,512

1,153,927

Prepaid and other current assets

537,462

852,069

Total current assets

10,889,684

15,024,937

Property, plant and equipment, net

25,704,362

24,885,155

Accounts receivable, long-term

-

3,600

Other assets, long-term

72,418

92,148

TOTAL ASSETS

$   36,666,464

$     40,005,840

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$        551,280

$          605,530

Accrued expenses and other current liabilities

492,446

485,570

Due to related party

1,003,750

630,805

Notes payable to related party

2,000,000

-

Total current liabilities

4,047,476

1,721,905

Long-term liabilities:

Convertible debentures

1,615,354

1,645,444

Convertible debt due to related parties

16,435,471

15,864,215

Warrant liability

-

6,780

Note payable related party

-

3,000,000

Other long-term liabilities

-

2,227

Total liabilities

22,098,301

22,240,571

Commitments and contingencies

Stockholders' Equity:

American DG Energy Inc. stockholders' equity:

Common Stock

50,694

52,140

Additional paid-in capital

49,667,217

49,854,998

Accumulated deficit

(37,620,906)

(35,232,411)

Total American DG Energy Inc. stockholders' equity

12,097,005

14,674,727

Non-controlling interest

2,471,158

3,090,542

Total Stockholders' equity

14,568,163

17,765,269

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$   36,666,464

$     40,005,840

Reclassifications: certain prior period balances have been reclassified to conform with current period presentation.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

Three Months Ended

June 30,

June 30,

2015

2014

Revenues

Energy revenues

$         1,871,110

$         1,752,517

Turnkey & other revenues

216,017

318,705

2,087,127

2,071,222

Cost of sales

Fuel, maintenance and installation

1,367,484

1,485,589

        Depreciation expense

519,858

412,313

1,887,342

1,897,902

Gross profit

199,785

173,320

Operating expenses

General and administrative

645,367

775,998

Selling

308,428

247,358

Engineering

215,077

198,677

1,168,872

1,222,033

Loss from operations

(969,087)

(1,048,713)

Other income (expense), net

Interest and other income

168,167

7,364

Interest expense

(317,650)

(378,820)

Change in fair value of warrant liability

81

57,101

(149,402)

(314,355)

Loss before benefit (provision) for income taxes

(1,118,489)

(1,363,068)

Benefit (provisions) for income taxes

2,187

(2,940)

Consolidated net loss

(1,116,302)

(1,366,008)

(Loss) income attributable to the non-controlling interest

(59,759)

89,856

Net loss attributable to American DG Energy Inc.

$       (1,176,061)

$       (1,276,152)

Loss per share

$                (0.02)

$                (0.03)

Weighted average shares outstanding - basic and diluted

50,655,021

49,923,697

Non-GAAP financial disclosure

Loss from operations

$          (969,087)

$       (1,048,713)

Depreciation & other non-cash expense

532,672

428,859

Stock based compensation

130,430

69,849

Adjusted EBITDA

(305,985)

(550,005)

Grants, tax rebates and incentives

668,859

-

Total EBITDA cash inflows (outflows) *

$            362,874

$          (550,005)

* EBITDA (cash outflows), for the second quarter of 2015, were ($149,572) for American DG Energy in North America and this was more than fully offset by cash inflows of $512,446 for EuroSite Power.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

Six Months Ended

June 30,

June 30,

2015

2014

Revenues

Energy revenues

$         4,261,457

$         4,148,798

Turnkey & other revenues

333,410

450,224

4,594,867

4,599,022

Cost of sales

Fuel, maintenance and installation

3,095,137

3,193,235

Depreciation expense

1,028,315

893,877

4,123,452

4,087,112

Gross profit

471,415

511,910

Operating expenses

General and administrative

1,506,429

1,549,958

Selling

649,121

508,474

Engineering

385,447

462,448

2,540,997

2,520,880

Loss from operations

(2,069,582)

(2,008,970)

Other income (expense)

Interest and other income

186,433

22,348

Interest expense

(630,106)

(733,323)

Loss on extinguishment of debt

-

(533,177)

Change in fair value of warrant liability

6,479

(9,012)

(437,194)

(1,253,164)

Loss before provision for income taxes

(2,506,776)

(3,262,134)

Provisions for income taxes

(5,168)

(9,880)

Consolidated net loss

(2,511,944)

(3,272,014)

Loss attributable to the non-controlling interest

123,449

330,506

Net loss attributable to American DG Energy Inc.

$       (2,388,495)

$       (2,941,508)

Loss per share

$                (0.05)

$                (0.06)

Weighted average shares outstanding - basic and diluted

50,695,201

49,871,101

Non-GAAP financial disclosure

Loss from operations

$       (2,069,582)

$       (2,008,970)

Depreciation & other non-cash expense

1,052,173

940,840

Stock based compensation

280,889

208,477

Adjusted EBITDA

(736,520)

(859,653)

Grants, tax rebates and incentives

668,859

-

Total EBITDA cash outflows *

$            (67,661)

$          (859,653)

* EBITDA (cash outflows), for the first six months of 2015, were ($281,140) for American DG Energy in North America and inflows of $213,479 for EuroSite Power.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

Six Months Ended

June 30,

June 30,

2015

2014

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss

$   (2,388,495)

$   (2,941,508)

Loss attributable to non-controlling interest

(123,449)

(330,506)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization

1,052,173

940,840

Gain attributable to distribution of nonmonetary assets to non-controlling interest

(157,870)

-

Loss on extinguishment of debt

-

533,177

Amortization of deferred financing costs

11,637

(7,427)

Amortization of convertible debt premium

(48,144)

15,472

Increase (decrease) in fair value of warrant liability

(6,479)

9,012

Noncash interest expense

582,348

624,368

Stock-based compensation

280,889

208,478

Changes in operating assets and liabilities

(Increase) decrease in:

Accounts receivable and unbilled revenue

79,981

(90,437)

Due from related party

(2,485)

274,965

Inventory

93,415

570,436

Prepaid and other current assets

322,700

(275,465)

Increase (decrease) in:

Accounts payable

(54,250)

(230,668)

Accrued expenses and other current liabilities

13,537

140,281

Due to related party

372,945

(27,373)

Other long-term liabilities

(2,227)

(6,804)

Net cash provided by (used) in operating activities

26,226

(593,159)

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment

(2,295,568)

(2,664,953)

Partial purchase of non-controlling interest

(100,000)

-

Net cash used in investing activities

(2,395,568)

(2,664,953)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of convertible debentures

-

1,450,000

Share repurchases

(148,510)

-

Repayment of note payable to related party

(1,000,000)

-

Distributions to non-controlling interest

(135,582)

(148,625)

Net cash (used in) provided by financing activities

(1,284,092)

1,301,375

Net decrease in cash and cash equivalents

(3,653,434)

(1,956,737)

Cash and cash equivalents, beginning of the period

11,825,915

9,804,291

Cash and cash equivalents, end of the period

$      8,172,481

$      7,847,554