Greetings, and welcome to the Tecogen Third Quarter 2017 Results Conference Call. If you'd like to listen to the webcast and view the presentation, please go to the Investor Relations section of our website, and under News and Events, you'll find a link to the webcast. At this time, all participants are in a listen-only mode. A question-and-session will follow formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Bonnie Brown, CAO, Treasurer and Secretary. Thank you, Ms. Brown, you may begin.

Thank you, Bob. Good morning and thank you all for joining our third quarter earnings call. On the call with me today are John Hatsopoulos and Ben Locke, our co-CEOs; Robert Panora, our President and Chief Operating Officer; and Jeb Armstrong, our Director of Capital Markets. Before we begin, I'd like to read our Safe Harbor statement. This conference call and any accompanying documents contain forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Reform Act of 1995. Forward-looking statements can be identified by words such as anticipate, intend, plan, goal, seek, believe, project, estimate, expect, strategy, future, likely, may, should, will and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding expected operating results such as revenue growth, gross profit and backlog; and strategy for growth, product development and market position. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include among others the following: decrease in interest in our products, the elimination of incentives and rebates related to our products, competing technological developments, issues in the research, development and commercialization of new products, Tecogen's inability to obtain sufficient funding and such other factors as discussed throughout the Risk Factors section of Tecogen's 10-K that was filed with the SEC on March 31, 2017 and can be found at www.sec.gov. Any forward-looking statement made by us in this conference call and any accompanying documents is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise. I'll now turn the call over to John Hatsopoulos for some opening remarks.

Good morning, ladies and gentlemen. As some of you that have been with us for a long time know, our business vacillates from quarter to quarter and day to day. And right now, today is one of the best periods of our short life. Not only is our backlog well over $16 million, and Ben Locke will give you the exact amount, but our cash in the bank is $2.8 million and we are expecting momentarily to receive from our - the dissolution of ULTRATEK on which, by the way, we have all the signatures of the shareholders and their approval, so we'll get another $1.6 million. So, you add this up we'll have something like $4.4 million in cash, so that we can have enough money to fulfill all the orders that we're receiving. On our backlog, by the way, we don't include the backlog of ADG, which is many years to come. With that, I'd like to ask the man that really runs the operations, Ben Locke.

Thank you, John. The third quarter of 2017 was very important for Tecogen, and that it was the first full quarter integrating American DG financials into Tecogen's financials. As I will cover in a few minutes, we are realizing many of the benefits we expected from the acquisition. As the agenda on Slide 4 indicates, I'll start by reviewing the company's performance and financial results for the quarter along with recent achievements and accomplishments. Bob will then give an overview of our emissions technology development, followed by Bonnie with more detail on the financials. I will then have some final remarks on future opportunities we expect to see as the year comes to an end and we look forward to 2018. Then we'll take questions. But first, I would like to start off our call by reminding those who may be new to our company about Tecogen's core business model shown on Slide 5, heat, power and cooling that is cheaper, cleaner and more reliable. Our proprietary technology for improving efficiency, emissions and grid resiliency is truly disruptive to the traditional methods of heating, cooling and powering buildings and infrastructure. And with the acquisition of American DG completed in Q2, we have added the on-site utility business to Tecogen, making us a completely vertically integrated clean technology company able to offer equipment design, manufacturing, installation, financing and long-term maintenance service. As the third quarter results show, the ADG fleet contributed solid revenues with good margins that supplemented Tecogen's earnings for the quarter. Turning to Slide 6, we're quite pleased to see the financial benefit of a full quarter of ADG supplementing the performance of Tecogen. Total revenues were a record $8.5 million for the company as compared to $6.6 million in the third quarter of 2016 and $7.6 million last…

Good morning, and thank you, Ben. My discussion today will cover our three emissions technology programs that I've been reporting on regularly. Specifically, I will first discuss the research grant awarded to Tecogen from the propane industry for adapting the Ultera technology to propane fueled fork trucks. Second, I will discuss our progress in bringing online the special generators in Southern California that were retrofitted with the Ultera emissions system such that our customer could operate these units without annual hourly limitation. Lastly, I will review what's happening with ULTRATEK, a subsidiary to adapt the Ultera technology to gasoline-powered vehicles. As we reported in our October 26 press release, the investors in Tecogen have agreed to dissolve the venture. This was due to unresolved differences concerning business strategy. As such, I'll provide a summary of where the research program stands and then I'll recap the status of the dissolution process, and describe what future scenarios might look like. Let's begin with the fork truck. As announced last year, the Propane Education and Research Council, PERC, has provided the company with a research grant to demonstrate Ultera's emissions reduction capability in a propane fueled fork truck. The project has significant potential for this industry, as these vehicles generally operate indoors, where health concerns are magnified. In recent years, the market share for propane trucks has been eroded by battery-operated versions to a large extent because of this issue. This market loss has occurred despite significant disadvantages of the battery systems. They are more costly and often unable to complete a full shift, because of energy storage limitations. The program commenced this January, and this proof-of-concept phase is scheduled to be completed at the end of this year. From the program onset, industry interest was strong because of the acute importance of…

Thank you, Bob. I'd like to start with a discussion regarding the merger with ADG and how it is presented in the financial statements of Tecogen for those who may not have joined our second quarter call. Since ADG became a wholly owned subsidiary of Tecogen as of May 18, ADG's operations are included in and consolidated with Tecogen's operations as of that date. Said differently, revenues and cost of sales for our new energy production revenue stream includes the operations of ADG only after May 18, essentially six weeks in Q2 and a full quarter for Q3. Also, the purchase accounting has not been finalized and balance sheet values are presented as provisional pending completion of the necessary valuations and analyses. Moving on to the quarter, Slide 11 contains some of the highlights of the year-on-year financial results for the third quarter. First, total revenues increased by 28.5% compared to the same period last year. Product revenues alone fell 14.9% compared to the same period last year, with a 30% decrease in sales of cogeneration modules and a 176% increase in chillers and heat pump sales. Total service revenue grew 20% compared to the same period last year and continued its steady growth, delivering well over half of our product and service revenues for the quarter. Service contract and parts revenue were flat on a year-over-year basis. These long-term contract maintenance and service agreements account for a substantial piece of the company's total revenue, providing a reliable annuity-like revenue stream. We also have our new energy production revenue stream from our ADG subsidiary, which added $1.6 million to our total revenues for the quarter. This revenue stream adds an important second source of annuity-like revenue with its long-term contracts. Product gross margin was 37% for Q3 2017 compared to…

Thanks, Bonnie. As I mentioned earlier in the call, we are quite pleased with the third quarter results. The contribution of ADG revenues allowed us to maintain profitability despite slippage in some shipments out of the quarter. Having this flexibility makes it easier to stage product shipments without the pressures and occasional inefficiencies of meeting quarterly deadlines. We expect robust product orders in the coming quarters as we continue to make good progress with our direct sales efforts, interactions with ESCOs, and continuing need for our chiller systems. We expect sustained and mostly predictable revenues and margins from the ADG fleet. The first full quarter of ADG revenues demonstrated the acquisition was beneficial to Tecogen in many ways. And as the integration continues, we hope to build on their contributions. Next, we will continue to grow our revenues and margins through our core business of product sales and service. Our CHP systems are becoming increasingly acknowledged and specified as the best technical choice for CHP in our size range. Our chillers are becoming the standard design for indoor growing facilities, and our relationships with key partners continue to grow and expand. And environmental pressures and grid resiliency concerns continue to support the trend towards Tecogen products. We have demonstrated tremendous financial growth over the past few quarters, culminating in our record revenues this quarter. We are planning on continued success going into 2018, including making renovations to our building to facilitate a larger production area needed for increased product manufacturing. While we have not outgrown our building yet, we have the ability to reconfigure office and administrative space to accommodate more production area to support our expected growth. It is truly an exciting time for Tecogen. And we hope that our new and existing investors will realize the full potential of our technology and success going forward. With that, I'd like to turn it over to the operator for questions.

Thank you. At this time, we'll be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Amit Dayal with Rodman & Renshaw. Please proceed with your question.

Thank you.

Good morning, Amit.

Good morning, guys. How are you doing?

Great. Thank you.

Just to begin with, maybe if you could talk about what we're doing to maybe revive some of the weakness in the cogeneration sales?

Yeah, Amit, I tried to say in my remarks. I don't see it as a weakness at all. It is quite cyclical, the - particularly with our turnkeys, Amit. If you can imagine a turnkey sale, as I mentioned before, involves Tecogen contracting and doing all the construction ourselves. So, for example, in the third quarter we had that big spike in cogen sales. Some of those installations are finishing up, so it really is kind of timing. I don't see it being a trend at all. I expect to see our cogen sales to be right back, where they normally are in the coming quarters. So, it's - it's not something I'm worried about, and I don't think it's anything that any of you guys should be worried about.

Understood. That's good to hear. And then again on the margin side, last quarter we saw some sort of installation related costs driving or pressuring margins a little bit. We saw it again this quarter. I thought this would probably be only be for a onetime thing that we would see last time, but it looks like, it's persisting. Any color on where margins will trend relative to how the backlog mix is looking like?

Well, I fully expect to maintain our range of margins that we always try to between 35% and 40%; and agreed, yes, on the low end of that. And you're right, it is an artifact of - we're doing installations. And as anybody knows, doing construction is a low-margin business. But we generally accept that and are okay with that, because as I mentioned, having these - doing all the construction ourselves really does ensure that the installation is done right, which more importantly means we're going to get five, 10, 15 years of really good margin service revenues, because we won't be having to clean up the mistakes that might have been made if we weren't involved in the construction. So, yes, we have a slug of installations that are kind of going through the system right now, pulling down the margins a little bit. Also, the product mix, the margins are a little bit different for each of our products. Obviously, we're trying to get our margins up on every product. But those things kind of came together, not in a really bad way this quarter, but just in a way that brought it down a little bit to around 35%. But again, I don't think that - I don't think you're going to see a trend of that going down any further. I think we're always going to be in that trending area of 35% to 40% with our margins, particularly as our product sales kind of rebound a little bit.

Understood, perfect. What plans do we have for ULTRATEK going forward? I know you just dissolved everything. You're probably digesting all of that. But are you looking to pause over here for a little bit or are you actively looking for new partners to potentially work on this?

I think - well, first and foremost, we're just trying to get the administrative task of, and the legal task of getting ULTRATEK dissolved in place and get all parties sorted out. And then, as Bob indicated, once that's done, which we expect to be soon, quite soon, certainly the end of this year, if not in weeks. Then we'll have, as Bob said, the intellectual property that evolved ULTRATEK as well as free control or complete control about what our next steps are. So, we had contemplated next steps for testing. And again, once the transaction is complete, I think in 2018 we can probably share with shareholders what our plan is to do. As Bob indicated, the next step is to do some prototype development and to get that tested, and so we believe a very important next step for ULTRATEK, so that when we do go to potential partners or manufacturers or whoever we're going to commercialize it, we'll have something that really answers a lot of their questions right in front of them, and it won't call for them to ask us more questions to do more development work. So that's my long way of saying, I think, we'll be able to articulate a plan for you in the coming weeks and months, but the first order of business is to get the ULTRATEK dissolution. Again, there's nothing - no risk in that. It's just a legal and administrative process we have to go through.

Great, understood, just…

Ben, this is John Hatsopoulos.

His name's Amit. This is Amit.

What's that? You and Ben, I wanted to tell you that our goal is to make this as a spinout like we did at Thermo Electron, because we'll continue with all the patents that we have and the four pending patents that we have. We have tremendous technology behind it. And we'll continue very actively. As a matter of fact, I think over the next few weeks you'll see the creation of probably a spinout that addresses this market for emission control of vehicles.

Understood. Thank you for that, John.

Your last one?

Just one last one for me, guys, in regards to the opportunities with the ESCOs, they look pretty significant. I am assuming they're not part of your backlog right now, right?

It's a great question. The first one I mentioned, which we had been contracted earlier in the year to do scoping studies, et cetera. And as I said in my remarks, we expect those product sales in the beginning of 2018. Those are indeed in our backlog.

Okay.

Some of the other projects with the other larger ESCO I mentioned, haven't been entirely scoped out yet to the point where I'm comfortable putting it in backlog. And as a reminder, what we consider backlog is, obviously, if we have a purchase order that's backlog. But also included in backlog are orders that are essentially in place, it's just that a PO is imminent. So those latter orders are not in the backlog. So, when we do get more clarity on them and believe me, you'll be first to know it, all of our investors will be informed when we get those orders. They'll be included in our backlog.

So, roughly, out of the 5 megawatts you potentially have, one is in backlog and three are still pending, roughly?

Yeah, that's correct.

Okay. Okay.

And I should say it's a mix of products, and that - with both those ESCOs, it's a mix of our InVerde, it's a mix of our Tecopower, it's a mix of our chillers, different components, which is actually very good that these ESCOs are recognizing that there's different tools that they can apply to their projects based on the customer and the economic returns of them.

Understood. Thank you so much.

Sure. Thank you, Amit.

Thank you. Our next question comes from the line of Patrick Murphy with Maxim Group. Please proceed with your question.

Hi, Patrick.

Hi. When can we look for the impact of the Ultera emissions to come through? Is this a 2018 or is this more of a 2019 event?

Well, I'll let Bob describe a little bit in more detail, but I will just say that there's kind of two distinct events that could occur to some type of monetization. One is with the fork trucks and one is with the ULTRATEK. And as I've said in the past, the fork truck is nice, because it is you can imagine a faster time line towards work, developing some type of business arrangement, whether it'd be with a fork truck company, whether it'd be any other type of partnership. You can imagine that happening a little bit quicker. And as Bob said, we expect to be meeting with those folks this year to talk about next steps. In terms of the ULTRATEK, maybe I'll let Bob talk a little bit about that.

Yeah. Is that what you were referring to? Which of those three programs were you referring to?

Well, I guess both of them, the fork truck and ULTRATEK.

Right, and so the time line on the fork truck, as like Ben said, I think in December we're going to meet with the manufacturer and PERC. And then, I think, we'll have some clarity on that. And we have to show them that we can do what we said we can do in person. And then I think the next step will be, hopefully, some sort of partnership to build maybe some prototypes, but I don't know yet. On the automotive side, we have a pretty good idea. And we've met with some subcontractors to do this. We have to create a very tight vehicle that has the Ultera implemented into it in a very practical, compact, low cost way; and that will require about a year-and-a-half, we think. And we have a good idea of who we're going to work with and how that's going to happen. But I have not - I don't want to mention that yet, because I haven't got a contract yet with those folks.

Okay, and then on ULTRATEK, would there be an increase in operation costs, if you brought that in-house?

You mean the cost of the research or…?

Yes.

I don't think the process will be any different than what we've done. Much of the work is subcontracted out to these engineering folks like AVL. In this case, it's a different company. But the - it's a subcontracted effort, and the costs will be higher than perhaps Phase 1 was, because we're actually building something more substantial. In terms of what's being done in-house at Tecogen that cost was borne by the ULTRATEK subsidiary, so it wasn't any cost on our P&L, if that answers your question.

Yeah, that's…

By the way, I would like to add to this, that we have a whole list of investors that want to participate in this venture. And as a matter of fact, I made more enemies than I've ever made in my 60 years of people that did not - were not allowed to participate in the investments for the emission control. The problem was that the investors that of ULTRATEK up to now insisted that we have somebody that has a very close connection with the automotive industry. And that's why we did not allow other investors, even though they're terrific investors and they've been very long-term investors to participate. The second question that came in, and it surprised the heck out of me, is that in Europe you're allowed to do a rights offering on any product or technology that you have. In the United States, you're not, because a lot of our shareholders are not high-net-worth individuals, and they're not allowed to participate. Therefore, we could not do a rights offering that we only give rights to wealthy people and not rights to less wealthy people. So, if we do a spinout, which every intention is to do so, then we will have to face this again. Thank you.

Thank you. And then just one more quick housekeeping item. Are there any residual merger related costs remaining?

Yes, we do expect to have some more costs associated with the merger.

Okay, great. Thank you very much.

Thanks, Patrick. Do we have any more questions, operator?

Our next question comes from the line of Roger Liddell with Clear Harbor Asset Management. Please proceed with your question.

Hi there, Roger.

Hello. First, a quick comment, I applaud the focus on the texture that we received today on the ESCOs. That is an area that should be of considerable interest to prospective investors as well as current ones. And so, I hope that there will be comparable focus in future quarterly calls on the evolving ESCO relationships. My question involves grid resiliency. We have two unwelcome things that have happened recently, and looking back to earlier 2017, a welcome one. What I mean is the hurricanes and Florida, I don't know enough about Texas and its electric pricing issues, but Florida certainly the electric infrastructure got hammered. And I should like to think that there would be a tailwind, no pun intended, for not just CHP, but also the chillers in nonagricultural purposes and also for heat pumps. Puerto Rico, could there be any opportunity - a direct, identifiable opportunity created by that problem? The more welcome one is Con Ed and the New York City - I'm sorry, New York State, REV proceedings and consequences from the New York Public Service Commission. So, could you sketch out, are we seeing, are we likely to see any meaningful bump as a consequence of hurricane activity and the REV process and playing out through Con Ed?

Yes, great questions, Roger. I'll handle the yours - the latter part of your question first, which is the REV thing that's playing out in New York. And we're quite involved with that. As you can imagine, it's important to us - for us to be able to contribute to that discussion. There are a number of things in place with REV that have consequence to us, not the least of which is the ability or the potential ability of CHP to be able to export. Even if you don't monetize that export, it's got value to us. So that's just one of many issues that are kind of being discussed under the REV proceedings. And us directly as well as us in some industry groups, and NYSERDA and the like are involved in that. And I think it's going to have a good outcome for us. It's a process and we got to work through it. Back to your original question about the hurricanes and the terrible tragedy that's been going on as a result of natural disasters, in the near - we've - I'll start with Puerto Rico. We've got some sales agents in Puerto Rico. We don't give that exclusive to anyone, so there are project developers down there. But certainly, we've been in close contact with as all of these things have unfolded. And CHP is not an immediate solution to those things. Standby generators are what people immediately need in those things. But I think, what we're seeing now is people looking at CHP, and maybe they wouldn't have accepted the ROI in the past. Let's say, you're a hotel and you're looking at a - it's a high electric rate, as you know, Roger. But also, the fuel prices are quite high down there.…

Yeah. Thank you.

Thank you.

Thanks, Roger.

[Operator Instructions] Our next question comes from the line of Michael Zuk with Oppenheimer Company. Please proceed with your question.

Good morning, everybody. I have an IT question and a financial question.

I can't wait for the IT question, Mike.

The IT question is, it looks more and more that in electric grid management that blockchain technology is beginning to enter that area. Is that a type of technology that we will eventually employ?

Well, you caught me flat-footed on that one, Mike. You stumped me. Tell me what blockchain technology is, if you can, briefly.

Well, basically, it enables you to gather disparate information and to apply that disparate information in a methodical way so that you can, in live time, increase the monitoring and the efficiency of operating units to coordinate them between each other. For instance, if you have like the Stevens series of installations, where you have different buildings, some of which may or may not be connected. It will enable you to very efficiently monitor all of the systems in total and individually and to transfer, if necessary loads from one system to another system seamlessly without having the intervention of an individual making the decision.

Yeah, Ron, I mean...

Michael.

Mike, sorry. I'm trying to think how that would apply to us. But the demand response programs that our cogeneration systems do participate in act sort of like that, but I don't know that it's quite - there's no human interaction. But there is - it's heading that way, where units will be dispatched not by a phone call and not by an e-mail, but they might be done by some automated system. And the inverter system we have is going through a next generation of certification to the [UL Standard] [ph], and the new standard has something very interesting in it. It's based on what happened in Germany. That inverter will have to ride through different scenarios that could be caused by too much DG on the grid. But the second phase two years from now or whenever, it's not this year, a few years out, is that that inverter has to communicate with the utility. And the utility will be able - this includes solar systems, and we would be included as well - we'll have to be constantly, there will be some automated way of telling us to maybe back off or increase and so forth, if it causes crises in the grid - if there's some overload situation coming or something like that. So, I don't know if that, I think that's the closest thing I can come up with to describe what you're asking, Mike.

I think there's a white paper out there that I've got access to. I'll forward it to you, and you can take a look at it.

Very good, very good, very good.

And then secondly a question, I guess, for Bonnie on the liability - on the condensed balance sheet. We have unfavorable contract liability, which I think came from ADG. And then, in the non-GAAP financial disclosure line, we have depreciation and amortization. And I guess, my question is how much of the depreciation and amortization is going toward the amortization of that unfavorable contract liability, and will that be a straight line, or will it be more of a fluctuating amortization?

It will fluctuate. It will decrease as time goes on, as contracts run out. So, I believe it was somewhere in the neighborhood of 160 as the offset to depreciation.

And the average amortization will be over a period of what, 9 or 10 or 11 years, based on the contract length?

Right. It's going to be based on the contract life. So, it could go out as far as 15 years; some of them do. But - and that will be the furthest out.

And amortization is done on a per-contract and not an aggregate basis?

That's right.

Okay. Well, so in other words, that will be a long-term benefit for us in the reporting of non-GAAP financial items?

Yes, for sure, yeah.

Just wanted to clarify that.

Okay.

That's all I have. Congratulations. It looks like [Multiple Speakers] on all fronts.

Thank you, Mike.

Thanks again, Mike.

Thank you. Our next question comes from the line of [Tom Aur] [ph], who's a private investor. Please proceed with your question.

Hey, good afternoon, guys. How are you?

Hi, Tom. Doing, great.

Hi, Tom.

Hey, Ben, John, Bob. Hey, a couple of things on ULTRATEK. So, I'm just looking back at when the partnership was formed, I think in December 2015. And if I recall, the investors bought - they put money in, they bought a bunch of Tecogen stock. I think it was 800,000 or 900,000 shares. Now we've had a strategy disagreement with those investors. We dissolved the partnership. Do we have any kind of an agreement with them with respect to them potentially exiting their Tecogen stock, the 900,000 shares they bought? Are they free to sell it? Do we know if they're going to sell it? What's our sense there?

Tom, this is John. To start with, I apologize. My hearing was never that good, but right now my two-year-old grandson has managed to give me some kind of a cold, and neither my speech nor my ears are working well. There is no agreement whatsoever. And as a matter of fact, some of the investors even disagreed among themselves. Some of the investors were interested in continuing this process, because we had from automotive companies all acceptance that that technology works. What they were looking for is a prototype that can fit under the hood. And the disagreement, by the way, was do we want to try right now to go to them and ask them to make that prototype at their expense, or we want to do it at our expense. Thank goodness, we're in good financial position right now. And on the advice of one of our Board members whose name is Ahmed - I forget his last name.

Ghoniem.

Ghoniem. Ghoniem. Is that he felt that we would lose a lot of our rights if we asked the automotive companies to make a prototype. And this is where the disagreement came in. The people that bought the shares - the reason I'm telling you all this is they're still very positive on this venture. And as a matter of fact, if we do a spinout, eventually they might also be allowed to invest in the spinout, if there are some complications, financial complications that I'm not allowed to talk about with a small debt that we have with one of our investors. But they're not negative. And as a matter of fact, two of them you know very well, and both of them are in a spar right now in Switzerland, and they have both assured me - I talked to them last week - and they both assured me that they have no interest in selling anything.

All right, fine. But we don't have a signed agreement. The reason why I asked is this. Tecogen's stock is down 30% for the year. The backlog has never been better. The orders have never been better. The deal with ADG is consummated, and yet the stock is just constantly under pressure. Nobody ever seems to want to buy it, no matter what. So, I mean, somebody doesn't like it. I can only say this, look, as just - if I'm just looking at this, not knowing much to me, the dissolution of the ULTRATEK partnership is extremely disappointing. It's not a positive. I mean, we invested almost two years of time in it and have come away with nothing. We had a $13 million valuation on a potential joint venture that's now a zero valuation. You have to reconstitute it. It's probably another one to two years before you get to any kind of a place where you can generate revenues. We're looking at four years all in. That to me is a major disappointment. So, I know you've got the cash on the balance sheet, but I just look at this as a big, big negative. I mean, I really do. And I think that's - I think that's part of the reason why the stock is under a lot of pressure.

Tom, this is John Hatsopoulos. I don't agree with you. And as a matter of fact, you should speak with Ahmed. And if you want me, I can have Ahmed call you. We have four patents applied for. That's why we paid the $400,000 for to retain them, which strengthened our position dramatically. As you know, automotive companies don't move as fast as they should. And as a matter of fact, they do everything they possibly can, not to move on. So, having money for - to develop this is not a problem. Not only we have our own money to do it, but also, we have a whole lineup of investors that are interested in investing in this. And we never...

I get that, but here is the thing. As you know, your edge in technology, proprietary edge lasts for only so long. And so now we've lost - so two years have gone away, and then another two years, and we're a small cap. And before you know it, you lose your edge. So, what's really super attractive today and is patented and is cutting edge, if you don't generate any revenues out of it, before you know it, somebody else finds it or figures it out or someone bigger comes along. I'm just saying that it's just disappointing point of - I think this is a real potential home-run ball for the stock. And almost two years have come by and we haven't generated a penny and we have no visibility on when we'll drive any revenues for this thing. That to me is very disappointing, so I just think it's still theoretical. You can have all the patents you want, but if someone isn't paying for them or you're not licensing the technology, it doesn't be any good.

Yeah. To start with, let me answer it, then I'll let the experts answer you. We as you probably know, these patents are insured with Lloyd's of London. And if anybody tries to copy our patents or violate our patents, Lloyd's is committed to defend us at their own expense. With that, maybe Ben or Bob want to add something to it.

Well, the only thing I was going to add is that - well, Tom, I mean, we know you quite well and happy to talk with you more about it, but I think you're going to be surprised. I think, you're going to be pleasantly surprised, when we - I mean, these are our crown jewels, our emissions technology. It's a lot of work, a lot of work by Bob, a lot of work by Ahmed, a lot of intellectual property, a lot of interest. We've made good progress so far, and if you think about it, all the progress we made at AVL with our vehicle result, we couldn't have done it if we hadn't embarked on what we did with ULTRATEK in the past 18 months. And now, that's all coming back to us in our control. And so, I think we're in a good position. And I can understand your frustration, of course, I do. I look at the share price too. But I think having it under our control and bringing it to a commercial reality in some way, shape or form under our own beliefs and strategy is the best way to go. And I think the fork truck is going to provide our investors and yourself with some more near-term gratification that this is getting somewhere. That's the beauty of the fork truck, as it is something more near-term. So anyways, I can understand your frustration. I appreciate it, but I think we're going to be in - I think, you'll be pleasantly surprised.

I add to this that the forklift will be added to the automotive technology. When we do and if we do a spinout, both the forklift and the automotive will be together, which we couldn't otherwise. And the forklift has much less time to start giving some returns to us than the automotive industry, as far as I'm concerned. Maybe Bob disagrees.

No, you're spot-on. You're spot-on.

Thank you. Our next question comes from the line of Alex Blanton with Clear Harbor Asset Management. Please proceed with your question.

Hi there, Alex. Thanks for waiting patiently.

Can you hear me?

Yeah, we can hear you just fine. Thanks.

Okay, great. On that last point, I disagree also with what the point that was made. You've got the testing done, AVL testing. And that would have had to been done regardless of what happened with the joint venture. I mean, it's going to take time to test and prove out the concept. And so, you...

Except that we didn't have the capital to do that on our own, Alex, at the time.

That's right. But what I was saying is that the person who made that comment didn't take that into account that you're going to have to spend a year-and-a-half testing the product, regardless of whether or not this joint venture survives. So, it's not true that there was a delay. Not true.

Okay, I agree with that.

On the selling in the stock and the lack of buying, it is very low volume. I mean, very little dollar volume changes hands every day most of the time. So, there isn't really a lot of selling. It's very minor selling and it's just a lack of buying. And that is probably due to the fact that there isn't anybody following the stock. Now, you have a hard time finding any estimates at all, never mind a consensus estimate for this company. There's nobody writing on it, there's nobody recommending it, and that is why there's no one buying it. That's pretty simple. Now, I have a question, and you really need to find somebody who's willing to follow a small company. The Street analysts really don't like to do it, because the volumes are low, and they can't really generate any commissions, so they don't bother. But you need to find someone who's really interested in the technology, in environmental impacts, which this has a great deal of favorable environmental impact, someone who believes in that, who is also a sell-side analyst, who can tell people about this company. Because most - I'd say almost all investors have never heard of it, and that's why the stock is low.

Yeah, we do have two analysts, I believe following it, but...

Who are they?

Bob, why don't you let Jeb?

Yeah, Jeb is here. Jeb is…

Jeb's the one that can [create the level for you] [ph].

Good morning, Alex. Actually, afternoon.

Hi.

We do have two sell-side analysts covering us already, both of whom have been on the call H.C. Wainwright and Maxim both cover us.

I missed that, because I got on the call really late, so I missed it. Who is it? Wainwright?

Wainwright and Maxim, so we already have two sell-side coverage.

Oh, Maxim, okay.

Yes.

All right. We need some larger companies doing it. My question really is this.

We can certainly talk about that, Alex.

And I don't know, if anyone's asked this or not, but do you have the capacity to expand your production dramatically? Should you get these orders without expanding your plant and spending money doing it?

Yeah, Alex, this is Ben speaking again. Absolutely, and I kind of alluded to that in the call. I mean, the first - I'm not sure if you've been to our building, but we've got office space.

I have…

Yeah, yeah. So, we've got office space in the front and office space in the back. And not all of it is utilized. It's been kind of ad-hoc. But now that we're looking at making more production, we're going to reconfigure things here, or at least start planning the reconfiguration of it to give our manufacturing floor more space. And we don't need to do anything drastic for that. We don't - certainly don't need another building. So, I think this next stage of growth, we're covered here in our building. If we were to experience the next stage beyond that, a real growth spurt, there are other things we can do. You could start getting more construction going on, but still within our building. I don't think we're at the limits of this building yet. And certainly, there's second shifts and all that, that in a pinch you could go to. And we do that a little bit right now, having folks work a little bit more extra time. So, we've got a few levers to pull to handle this increase in activity, right here where we are.

Well, doesn't that mean that those costs, the facility costs, are fixed? And therefore, if you get greater production and sales out of that same space, you're going to have a positive effect on margins, correct?

You got it.

Because fixed costs are not going to go up, at least not that…

Yeah, we don't plan on putting in any marble or anything expensive when we do this renovation. You know what, Alex, we do things on a budget with one goal in mind and that's productivity, so I think you're right.

Thank you.

Thanks, Alex.

Thank you. There are no further questions at this time. I'd like to turn the floor back to management for closing comments.

Thank you all for joining us on this call. I think we set our record revenue and commensurately set a record length for our conference call. I appreciate all of you for joining us, and we'll talk to you soon.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.