Exhibit 99.02 - Pro Forma Financials

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On December 14, 2018 and March 5, 2019, Tecogen Inc. (“the Company”) completed the sales of its interests in two and six agreements, respectively, and associated assets (collectively “the assets”) relating to the generation and sale of energy to an unrelated third party in exchange for $2.0 million and $5.0 million, cash, respectively. The following unaudited pro forma condensed consolidated financial statements have been derived by the application of pro forma adjustments to the Company's historical consolidated financial statements, which have been presented to give effect to the dispositions of the assets. The unaudited pro forma condensed consolidated balance sheet as of September 30, 2018 is presented as if the dispositions had occurred as of September 30, 2018. The unaudited pro forma condensed consolidated statement of operations for the nine months ended September 30, 2018 is presented as if the dispositions had occurred on January 1, 2018. The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2017 is presented as if the dispositions had occurred on May 18, 2017, the date the assets were acquired as part of a larger acquisition. The unaudited pro forma condensed consolidated balance sheet and statements of operations for these respective periods are being provided for illustrative purposes only and do not purport to represent what our results of operations or financial position would have been if the transactions had occurred on the dates indicated and are not intended to project our results of operations or financial position for any future period. Any of the factors underlying these estimates and assumptions may change or prove to be materially different and the estimates and assumptions may not be representative of facts that existed upon completion of the dispositions.

The unaudited pro forma adjustments are based on estimates, available information and certain assumptions that the Company believes are reasonable. The unaudited pro forma adjustments and primary assumptions are described in the accompanying notes. The unaudited pro forma condensed consolidated financial statements and the related notes should be read in conjunction with the historical consolidated financial statements and accompanying notes of Tecogen Inc. included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 and the Company's Quarterly Report on Form 10-Q for the period ended September 30, 2018.






























Exhibit 99.02 - Pro Forma Financials

TECOGEN INC.
Pro Forma Condensed Consolidated Balance Sheet
As of September 30, 2018
(Unaudited)
 
 
Tecogen Inc.
 
Dispositions of
 
Pro Forma
 
 
 
 
 
 
Historical
 
Assets
 
Adjustments
 
Notes
 
Pro Forma
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
136,717

 
$

 
$
7,000,000

 
(a)
 
$
7,136,717

Accounts receivable, net
 
11,548,663

 

 

 
 
 
11,548,663

Unbilled revenue
 
4,441,565

 

 

 
 
 
4,441,565

Inventory, net
 
5,983,067

 

 

 
 
 
5,983,067

Prepaid and other currents assets
 
815,269

 

 

 
 
 
815,269

Total current assets
 
22,925,281

 

 
7,000,000

 
 
 
29,925,281

Property, plant and equipment, net
 
11,107,509

 
(6,825,539
)
 

 
(b)
 
4,281,970

Intangible assets, net
 
2,935,279

 
(1,341,584
)
 

 
(b)
 
1,593,695

Goodwill
 
13,365,655

 

 

 
 
 
13,365,655

Other assets
 
427,810

 

 

 
 
 
427,810

Total assets
 
$
50,761,534

 
$
(8,167,123
)
 
$
7,000,000

 
 
 
$
49,594,411

 
 
 
 
 
 
 
 
 
 
 
Revolving line of credit, bank
 
$
1,708,888

 
$

 
$

 
 
 
$
1,708,888

Accounts payable
 
5,716,426

 

 

 
 
 
5,716,426

Accrued expenses
 
2,196,921

 

 
591,000

 
(c)
 
2,787,921

Deferred revenue
 
1,718,376

 

 

 
 
 
1,718,376

Total current liabilities
 
11,340,611

 

 

 
 
 
11,931,611

Deferred revenue, net of current portion
 
343,031

 

 

 
 
 
343,031

Unfavorable contract liability, net
 
6,534,074

 
(3,372,337
)
 

 
(b)
 
3,161,737

Total liabilities
 
18,217,716

 
(3,372,337
)
 

 
 
 
15,436,379

Common stock
 
24,819

 

 

 
 
 
24,819

Additional paid-in capital
 
56,371,583

 

 

 
 
 
56,371,583

Accumulated deficit
 
(24,298,191
)
 

 
1,614,214

 
(d)
 
(22,683,977
)
Total Tecogen Inc. stockholders’ equity
 
32,098,211

 

 
1,614,214

 
 
 
33,712,425

Noncontrolling interest
 
445,607

 

 

 
 
 
445,607

Total stockholders' equity
 
32,543,818

 

 
1,614,214

 
 
 
34,158,032

Total liabilities and stockholders' equity
 
$
50,761,534

 
$
(3,372,337
)
 
$
1,614,214

 
 
 
$
49,594,411


The accompanying notes are an integral part of the unaudited pro forma condensed consolidated financial statements.




Exhibit 99.02 - Pro Forma Financials


TECOGEN INC.
Pro Forma Condensed Consolidated Statement of Operations
Nine Months Ended September 30, 2018
(Unaudited)

 
 
Tecogen Inc.
 
Dispositions of
 
 
 
 
Historical
 
Assets
 
Pro Forma
 
 
 
 
 
 
 
Net sales and gross revenues
 
$
26,567,276

 
$
(2,037,868
)
 
$
24,529,408

Cost and expenses applicable to sales and revenues
 
16,686,781

 
(1,387,453
)
 
15,299,328

Gross profit
 
9,880,495

 
(650,415
)
 
9,230,080

Selling, general and administrative expenses
 
10,015,085

 

 
10,015,085

Research and development
 
993,102

 

 
993,102

Loss from operations
 
(1,127,692
)
 
(650,415
)
 
(1,778,107
)
Interest and other income
 
7,926

 

 
7,926

Interest expense
 
(56,195
)
 

 
(56,195
)
Unrealized loss on investment securities
 
(59,042
)
 

 
(59,042
)
Loss from continuing operations before income taxes
 
(1,235,003
)
 
(650,415
)
 
(1,885,418
)
Provision for income taxes on continuing operations
 
42,679

 

 
42,679

Net loss from continuing operations
 
(1,277,682
)
 
(650,415
)
 
(1,928,097
)
Income attributable to the noncontrolling interest
 
(58,946
)
 

 
(58,946
)
Net loss attributable Tecogen Inc. shareholders
 
$
(1,336,628
)
 
$
(650,415
)
 
$
(1,987,043
)
 
 
 
 
 
 
 
Per common share data:
 
 
 
 
 
 
Net loss per share - basic and diluted
 
$
(0.05
)
 
 
 
$
(0.08
)
Weighted average shares outstanding - basic and diluted
 
24,813,936

 
 
 
24,813,936


The accompanying notes are an integral part of the unaudited pro forma condensed consolidated financial statements.





Exhibit 99.02 - Pro Forma Financials

TECOGEN INC.
Pro Forma Condensed Consolidated Statement of Operations
Year Ended December 31, 2017
(Unaudited)

 
 
Tecogen Inc.
 
Dispositions of
 
 
 
 
Historical
 
Assets
 
Pro Forma
 
 
 
 
 
 
 
Net sales and gross revenues
 
$
33,202,666

 
$
(1,707,016
)
 
$
31,495,650

Cost and expenses applicable to sales and revenues
 
20,248,262

 
(1,094,566
)
 
19,153,696

Gross profit
 
12,954,404

 
(612,450
)
 
12,341,954

Selling, general and administrative expenses
 
11,792,323

 

 
11,792,323

Research and development
 
936,929

 

 
936,929

Income (loss) from operations
 
225,152

 
(612,450
)
 
(387,298
)
Interest and other income
 
27,626

 

 
27,626

Interest expense
 
(155,082
)
 

 
(155,082
)
Income (loss) from continuing operations before income taxes
 
97,696

 
(612,450
)
 
(514,754
)
Provision for income taxes on continuing operations
 

 

 

Net income (loss) from continuing operations
 
97,696

 
(612,450
)
 
(514,754
)
Income attributable to the noncontrolling interest
 
(50,260
)
 

 
(50,260
)
Net income (loss) attributable Tecogen Inc. shareholders
 
$
47,436

 
$
(612,450
)
 
$
(565,014
)
 
 
 
 
 
 
 
Per common share data:
 
 
 
 
 
 
Net income (loss) per share - basic
 
$

 
 
 
$
(0.02
)
Net income (loss) per share - diluted
 
$

 
 
 
$
(0.02
)
Weighted average shares outstanding - basic
 
23,171,033

 
 
 
23,171,033

Weighted average shares outstanding - diluted
 
23,342,627

 
 
 
23,171,033


The accompanying notes are an integral part of the unaudited pro forma condensed consolidated financial statements.





Exhibit 99.02 - Pro Forma Financials

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. PRO FORMA ADJUSTMENTS TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(a)
Adjustment to reflect the receipt of cash consideration of $2.0 and $5.0 million, respectively, from the sales of the Company’s interests in two and six agreements, respectively, and associated assets (collectively “the assets”) relating to the generation and sale of energy to an unrelated third party.
(b)
Adjustment to derecognize the carrying value of the assets sold.
(c)
Adjustment to recognize liability for costs related to assets sold which were incurred subsequent to September 30, 2018.
(d)
Adjustment for estimated gain on the sales. The amount of the actual gain will be calculated based on the carrying value of the assets as of the closing of the transactions and therefore differ from the estimate which employs the carrying values as of September 30, 2018.