Tecogen Inc.

Good morning, ladies and gentlemen, and welcome to the first quarter 2024 TECOGEN Investor Update Call. Our host for today's call is Jack Whiting, General Counsel and Secretary. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. I would like to now turn the call over to your host. Mr. Whiting, you may begin.

Good morning. This is Jack Whiting, General Counsel and Secretary of TECOGEN. This call is being recorded and will be archived on our website at tickagen.com. The press release regarding our first quarter 2024 earnings and the presentation provided this morning are available in the investors section of our website. I'd like to direct your attention to our safe harbor statement included in our earnings press release and presentation. Various remarks that we make about the company's expectations, plans, and prospects constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Act the Form Act of 1995. Actual results may differ materially from those indicated by forward-looking statements as a result of various factors, including those discussed in the company's most recent annual and quarterly reports on Forms 10-K and 10-Q, under the caption Risk Factors, filed with the Securities and Exchange Commission, and available in the Investors section of our website under the heading SEC Filings. While we may like to update forward-looking statements, we specifically disclaim any obligation to do so so we should not rely on any forward-looking statements as represented in our views as of any future date. During this call, we will refer to certain financial measures not prepared in accordance with generally accepted accounting principles or GAAP. The reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures is provided in the press release regarding our first quarter 2024 earnings and on our website. I will now turn the call over to Abhinav Rangesh, TQGEN CEO, who will provide an overview of first quarter 2024 activity and results, and Roger Deschenes, TicoGen's CAO, who will provide additional information regarding first quarter 2024 financial results.

Thank you, Jack. Welcome to TicoGen's Q1 2024 earnings call. First, I'd like to start by giving investors an update on our factory move and the 83 service contracts we acquired this year. Then, I'd like to talk about our marketing. To me, our marketing has been our weakest link, but also holds the greatest upside potential. A recent experience made us look at our marketing in a new way. We were recently talking to a prospective industrial customer. They had two electrical services from the same utility into two different sides of the same factory. On one side of the building, they experienced power outages. On the other side, they didn't. Clearly, power constraints are very local, but every facility that has a problem knows that they do. This led to the question, how do we make more facilities like this one find us? Before I tell you how we changed our marketing and the results from that, let me update you on our factory move and service. We've now moved into our new facility in Billerica. Left to do is still the manufacturing space fit-out and the test cells. We saved a tremendous amount of cash by using our own labor for some of this fit-out, but it means limited production until the end of Q2. After this, we should benefit from reduced operational costs and should see product revenue recover in Q3. We saw record service revenue in Q1. We were cash flow positive in Q1, so have not had to draw further into the credit line as of today. We have acquired service for another 83 units this year to date, 16 units in February, 31 in May, and 36 coming online in the next two quarters. We also anticipate a further 30 to 50 service agreements over the next three months. We expect that these service agreement additions will add more than $700,000 in revenue this year and more than $1 million next year. Service will continue to be the foundation of our business as it provides recurring cash flow. In the meantime, we're working to close existing leads and develop a system to double our sales pipelines. Despite the anti-gas sentiments, we expect to see leads from last year close soon. Many of these came from new sales channel partners we signed, the articles we wrote, and the trade shows we attended. The next step is to find a way to sell to the thousands of customers facing power shortages. As we saw from the example before, shortages can be very localized. We needed to be able to advertise to these customers so they can find us. To do this, we focused on online marketing. To be successful with online marketing, the message must be easy to understand and compelling. You have three to eight seconds at best to get a prospect's interest and direct them to your website. Then you have a further 30 seconds to convert them into a lead. To craft our message, we interviewed existing customers and prospects. A pattern began to emerge. Before customers bought from us, they were already looking for a generator or a chiller. Our products offered tremendous savings, so they chose us. They really viewed our product as a generator that saves money or a chiller that saves money. We needed to make our message and value much easier for them to understand. Using this customer feedback, we ran Google Ads with different headlines and different messages. We tracked the percentage of people that clicked on our ads, how long people spent on our website, and what they were searching for before they clicked. The winning ad was, if you spend $100,000 on energy, slash your bill in half. We've now updated our website with case studies and specialized market pages. Prospective customers can now see how our on-site power heating and cooling will help them save money in their applications. As a result, we're already seeing qualified leads through the web. Our preliminary cost to generate leads online is comparable to trade shows. To me, though, the most exciting part is that online marketing is highly scalable. We can continue doing all of the other marketing that we're doing right now and continue running online marketing at the same time. To me, the next step is to take an even more targeted approach through other channels such as LinkedIn, which we hope will generate further leads. Backlog and cash. The backlog is presently at 4.8 million. I understand that this is lower than it has been historically. The anti-gas sentiment has meant the steady one and two unit New York City projects are now gone. However, we have around $7 million of projects that we expect to close in one to three months. Presently, we also have purchase orders for four hybrid air-cooled chillers. Our reliability testing of this product is almost complete, so we expect to start shipping units in Q4. We also expect to see sales for this product increase in 2025 and beyond. We've also established relationships with financing partners that is enabling some of the projects we expect to close later in 2024. We had positive cash flow in Q1 and finished the quarter with $1.5 million in cash. Our present cash position is roughly $1.3 million, and we have paid more than $300,000 towards our fit-out and have roughly $200,000 to $250,000 further in fit-out costs. We've not needed to draw further into our line presently. I'm hoping that with the imminent orders and associated deposits, we can leave the line of credit as a safety net. We have three revenue segments. Our product revenue consists of sales of cogeneration units, microgrid systems, and chillers to a range of markets and customers. Our services revenue primarily consists of our contracted operations and maintenance services. Our energy production revenue It's from energy sales, including sales of electricity and thermal energy produced by our equipment on-site at customer facilities. I'm now going to hand over to Roger to go through the financial results.