CEO: John Hatsopoulos
WSA: Good day from Wall Street this is Juan Costello Senior Analyst at the Wall Street Analyzer. Joining us today is John Hatsopoulos the co-CEO and Director of Tecogen Incorporated; the company trades on NASDAQ ticker symbol TGEN. Thanks for joining us again today John.
John Hatsopoulos: Thank you it’s absolutely a pleasure. Let’s make it an annual event.
WSA: Yeah it’s always good to have you on and get an update from our interview from last year. So starting off can you talk about some of your recent news?
John Hatsopoulos: The biggest news that we have in the company is something that almost happened accidentally, as a result of a three-year effort in eliminating emissions from our equipment. As you know we have combined heat and power equipment that barely met the new California Emissions Standards, which they updated to such stringent levels that the only equipment that really could meet their emission standards were fuel cells, and this would have destroyed our (natural gas) market. We came up with a technology that is fully patented, is fully insured to be defended by Lloyd’s of London, where our emissions are reduced to even with or maybe a little better than fuel cells, but call it even for fairness sake. We eliminate almost down to zero NOx and CO for natural gas engines, and we’re now making a study. We have formed a group around Professor Ahmed Ghoneim of MIT, a member of the board of Tecogen, to see if we can use the same technology for gasoline.
His feeling is that the properties are similar and therefore we should be able to do it but I cannot guarantee it at this point. If that is the case, not only will we have an immense market for natural gas engines, and that includes everything from heat pumps to cogeneration, to whatever you use natural gas to run. But now hopefully and we’re going to work hopefully closely with another, with an engine manufacturer or with an automotive manufacturer to run our technology for gasoline. That is a technology in my simple mind is worth hundreds of millions of dollars, and there could be no better timing than the time right now, where we are– the world has the problem of automotive manufacturers sort of cheating in their emission testing.
WSA: So what are some of the factors that you feel make the company and technology unique from that of some of the other players in the sector?
John Hatsopoulos: We are the only ones, we are the only ones with this emissions reduction technology and as a matter of fact we have proposals outstanding with various companies and potential clients that use natural gas to use our technology. Our technology by the way does not interfere with the engine, it’s an add-on, it’s like a muffler. So we can use it even for anybody that uses natural gas like a generator. As a matter of fact, generators that run on natural gas are not allowed to run more than 200 hours a year because of emissions. If we add that (Tecogen’s emissions system) to their equipment then it can become a standard energy producer without violation of any regulations. So hopefully over the next few weeks we’ll be getting orders, we haven’t gotten them yet, we’re just in the proposal state, but hopefully over the next few weeks we’ll have orders from some of our people that we have made proposals to, and in the meanwhile we’re organizing a team again I repeat with Professor Ghoneim from MIT as part of it, to see if we can solve the potential emission problem of automobiles.
WSA: Right, well yeah those are some of the short-term goals, can you talk about some of the key goals and milestones you’re hoping to accomplish over the course of the next year?
John Hatsopoulos: Well the first six months, and I don’t have the exact amount in front of me, we were up in revenues at somewhere between 30 and 40%. We hope, it’s a not a projection but it’s a hope, that this growth is going to continue over the next few years, because again we not only have extremely efficient equipment that runs at 90% efficiency of cogeneration, but also we have a piece of equipment that has almost no emissions. So it’s an amazing home run and it happened just as the world is starting to be more aware of the problems of emissions, which they sort of had ignored except for CO up to now. This will continue to give us dramatic growth, and I don’t know what I mean by dramatic, anything above 30% is dramatic to me, at least for the next few years. And if again we can do it (reduce emissions) for automobiles then it’ll make us hopefully a major corporation in the United States.
WSA: And what are some of the key value drivers that you wish investors better understood about the company?
John Hatsopoulos: Well the revenues have been up, and people now realize that our technology is being accepted and is growing. The first question that we get asked is how fast are you going to be profitable? And we are spending an awful lot of money in both patents, and by the way we are fully patented in the United States and almost completely patented in Europe and Asia. So we are not yet profitable because again we are spending an awful lot of money to improve this revolutionary technology, but we think that our goal, and I stress the word goal, is to be cash flow positive sometime in the middle of next year and down the road profitable.
WSA: Right and so once again joining us today is John Hatsopoulos the co-CEO of Tecogen Incorporated, which trades on NASDAQ ticker symbol TGEN currently trading at $3.50 a share market cap is around $57 million. And before we conclude here John to recap some of your key points, why do you believe investors should consider the company as a good investment opportunity today?
John Hatsopoulos: Well that’s very simple. The answer is as our technology is proven, and we’ve proven it with, and we’ve announced it publicly, with test installations on the west coast. This (emissions awareness) is going to spread nationwide and eventually probably worldwide. And as our company grows then people are going to hopefully make a lot of money. And again I say hopefully because there are no guarantees in this world.
WSA: Well we certainly look forward to continue to track the company’s growth and report on your upcoming progress, and we’d like to thank you for taking the time to join us today John, and update our investor audience on Tecogen Inc.–it’s always good to have you on.
John Hatsopoulos: Thank you very much, thank you.