Related party transactions |
12 Months Ended |
|---|---|
Dec. 31, 2016 | |
| Related Party Transactions [Abstract] | |
| Related party transactions |
Related party transactions
The Company has four related companies, namely ADGE, TTcogen, Tedom USA and Ultratek. These companies may be deemed to be related parties because several of the major stockholders of one or more of these companies have a significant ownership position in the Company, and/or the Company has a significant ownership position in one or more of these companies. The Company does not own any shares of ADGE.
ADGE has a sales representation agreement for the Company’s products and services in New England. Revenue from sales of cogeneration and chiller systems, parts and service to American DG Energy during the years ended December 31, 2016 and 2015 amounted to $957,760 and $1,903,427, respectively. Revenue from sales of cogeneration and chiller systems, parts, installations and service to TTcogen during the years ended December 31, 2016 and 2015 amounted to $93,143 and $0, respectively and for Ultratek $22,238 and $0, respectively.
The Company has a line of credit with John N. Hatsopoulos, the Co-Chief Executive Officer of both companies. Details of these transactions can be found in Note 7.
On December 23, 2013, the Company entered into a Senior Convertible Promissory Note with Michaelson Capital Special Finance Fund LP. On April 1, 2016, this note was amended extending the maturity date, security and conversion price. Details of this transaction can be found in Note 7.
John N. Hatsopoulos’ salary is $1.00 per year. On average, Mr. Hatsopoulos spends approximately 50% of his business time on the affairs of the Company; however such amount varies widely depending on the needs of the business and is expected to increase as the business of the Company develops.
Since 2006, the Company has a facilities and support services agreement with ADGE. Under this agreement, the Company provides ADGE with certain office and business support services and also provides pricing based on a volume discount depending on the level of ADGE purchases of cogeneration and chiller products. For certain sites, ADGE hires the Company to service its chiller and cogeneration products. The Company also provides office space and certain utilities to ADGE based on a monthly rate set at the beginning of each year. Also, under this agreement, ADGE has sales representation rights to the Company's products and services in New England.
The Company subleases portions of its corporate offices and manufacturing facility to sub-tenants under annual sublease agreements. For the years ended December 31, 2016 and 2015, the Company received $48,092 and $78,468, respectively, from ADGE and EuroSite Power. In addition, for the years ended December 31, 2016 and 2015 the Company received from the same companies, $22,519 and $36,672, respectively, to offset common operating expenses incurred in the administration and maintenance of its corporate office and warehouse facility.
Tecogen pays certain operating expenses, including benefits and insurance, on behalf of ADGE. Tecogen was reimbursed for these costs. As of December 31, 2016 and 2015, the net amount due from ADGE was $87,288 and $1,177,261, respectively. Tecogen also pays for certain operating expenses on behalf of TTcogen, Tedom USA and Ultratek and is reimbursed for these costs. As of December 31, 2016 and 2015, the net amount due from TTcogen was $107,377 and $0, respectively, the net amount due from Tedom USA was $692 and $0, respectively and the net amount due from Ultratek was $65,631 and $0, respectively.
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